European investor and asset manager Meyer Bergman European Retail Partners has bought the Aladdin shopping centre in Kiev in a deal reflecting a net initial yield of more than 10%.
The price for the 16,000m2 complex, which opened in 2005 on the left bank of the Ukrainian capital, is not being disclosed, but the yield falls just short of that achieved on the Globus Center sale last October, struck at just under 10%.
Selling agent DTZ was offering Aladdin at a price reflecting 10.6%. Sources in Kiev say Meyer Bergman is negotiating to buy another two retail projects under construction in the city.
The purchase follows a string of retail deals over the past two years at decreasing yields and shows the strength of demand for Ukrainian commercial real estate.
In spring 2006, US fund Apollo Real Estate Advisors bought the 16,000 m2 Piramida shopping centre at an initial yield of 16%-17%.
Six months later, in December, Irish Quinn Group paid $59m (€37.9m) for a 93%-stake in the 38,000m2 Ukraina shopping mall from western European fund manager NCH Advisors. The transaction reflected an initial yield of 11%.
Quinn Group then paid $40m for the 23,200 m2 Alta Center in April 2007 in a deal showing a 10% yield. Shortly after that, private international real estate company London & Regional Properties paid around $170m for Globus Center. The 38,300 m2 complex was built in 2002 underneath Kiev’s historic Independence Square.
Rents in Kiev centres range from $15-$25 per m2 per month for anchor tenants to $40-$180 per m2 for average boutique units, says DTZ.
The highest monthly rents are for prime high street locations along Khreshchatyk Street at $300-$400 per m2.
