Annual report 2010 - plazacenters

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Proceed selectively with our targeted development program in CEE and India, and hold and expertly manage completed assets as income-generating investments until sale yields are sufficient, whilst continuing to identify opportunities to expand our activities into new regions.
Overview Our s trategy O Br Mg Fs Ai Develop Develop modern, western-style shopping and entertainment centers in capital and regional cities primarily in CEE and India Acquire Acquire operating shopping centers that show significant redevelopment potential or show significant value growth Flexibility Depending on market yields, we either pre-sell or hold and manage our assets until the exit yields are sufficiently attractive Portfolio acquisitions A partnership with Elbit Imaging and other entities for investing in commercial income-producing properties with appreciation potential in the US Maintain liquidity Maintaining high cash balances, conservative leverage levels and well-spread debt maturities. Reliance on material non-revalued shareholders’ equity of €624 million Objectives 1 Target 4–5 new development projects per year 2 Target returns of at least 40–60% on equity invested 3 Dividend policy – 25% of realized development profits up to €30 million, and 20–25% of the excess thereafter, as decided by the directors. Payable annually 4 Limited commencement of construction for projects meeting the two major criteria as follows: • intensive demand from tenants • based on external bank accompaniment which require minimal equity investment 5 Capital raising of approximately US$231 million is a part of the initial plan for raising up to US$400 million for real estate investments in the US. Development criteria Selection of target countries We focus upon countries in emerging markets and are currently present in CEE and India. In order to determine a favorable investment climate, we take into account country risk, GDP per capita and economic growth, ratio of retail sales per capita, political stability, sophistication of banking systems, land ownership restrictions, ease of obtaining building and operating permits, business risks, existing competition and market saturation levels. Site evaluation We look to develop our first project in a new country in the capital, and thereafter in regional cities with a minimum catchment of 50,000 residents. Site evaluation includes site area, catchment area, local zoning and town planning schemes, proximity to transportation and vehicular routes and legal issues. A carefully structured, internally developed evaluation process is in place involving each of the relevant disciplines (economies, engineering, marketing, etc.). Project development Once we have approved a site we manage its development from inception to completion, incorporating engineering, marketing, financial and legal stages, to encompass designs, architects, market forecasts and feasibility studies. Emerging markets Plaza Centers has a strong track record in developing real estate projects such as shopping and entertainment centers in emerging markets. The Group has been present in the CEE region since 1996, and was a pioneer in bringing western-style shopping malls to Hungary. The concept was continued throughout the CEE and is now being exported to India, whilst other development and investment opportunities in Asia, other European countries and in the United States are being explored further. The Company has had great success in capitalizing on the fantastic opportunities that its emerging markets have offered. We carefully investigate the benefits and challenges inherent in every proposed project, adhering to our development criteria. The gross domestic product (“GDP”) growth in CEE and India is likely to continue to outperform that of Western Europe, and we plan to continue to capitalize on the opportunities inherent in the region, whilst investigating new areas of opportunity such as Asia and the United States. Plaza Centers N.V. <strong>Annual</strong> Report <strong>2010</strong> 05
Page 1 and 2: Plaza Centers Annual report 2010 Su
Page 3 and 4: Overview Who we are O Br Mg Fs Ai W
Page 5: O Br Mg Fs Ai Operational highlight
Page 9 and 10: O Br Mg Fs Ai Koregaon Park Plaza (
Page 11 and 12: O Br Mg Fs Ai • As a result of th
Page 13 and 14: O Br Mg Fs Ai Plaza expects to comp
Page 15 and 16: Overview Our portfolio at a glance
Page 17 and 18: O Br Mg Fs Ai Suwałki Plaza: opera
Page 19 and 20: O Br Mg Fs Ai Belgrade Plaza Serbia
Page 21 and 22: O Br Mg Fs Ai Koregaon Park Plaza:
Page 23 and 24: Overview Current devel opments cont
Page 25 and 26: O Br Mg Fs Ai Timisoara Plaza Roman
Page 27 and 28: Overview Current de velopments cont
Page 29 and 30: O Br Mg Fs Ai Liberec Plaza Czech R
Page 31 and 32: O Br Mg Fs Ai Bulgaria Sofia Plaza
Page 33 and 34: O Br Mg Fs Ai I am pleased to repor
Page 35 and 36: O Br Mg Fs Ai The combination of Pl
Page 37 and 38: O Br Mg Fs Ai Over the course of th
Page 39 and 40: O Br Mg Fs Ai Plaza’s effective o
Page 41 and 42: O Br Mg Fs Ai In addition, Plaza ha
Page 43 and 44: O Br Mg Fs Ai Among our first actio
Page 45 and 46: O Br Mg Fs Ai increased rental reve
Page 47 and 48: Management and governance Managemen
Page 49 and 50: O Br Mg Fs Ai Uzi Eli (35), LLB, At
Page 51 and 52: O Br Mg Fs Ai Substantial sharehold
Page 53 and 54: Management and governance Corporate
Page 55 and 56: O Br Mg Fs Ai • Best Practice Pro
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O Br Mg Fs Ai Among other matters,
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Management and governance Risk mana
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O Br Mg Fs Ai • Real estate valua
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O Br Mg Fs Ai II) Four components o
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O Br Mg Fs Ai c) The Audit Committe
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O Br Mg Fs Ai Service arrangements
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Financial statements Independent au
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Financial statements Consolidated i
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Financial statements Consolidated s
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O Br Mg Fs Ai For the For the year
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O Br Mg Fs Ai Estimates and underly
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O Br Mg Fs Ai Note 3 - Summary of s
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O Br Mg Fs Ai Financial assets and
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O Br Mg Fs Ai f. Normal operating c
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O Br Mg Fs Ai i) Rental income The
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O Br Mg Fs Ai 2. Share-based paymen
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O Br Mg Fs Ai The current lack of c
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O Br Mg Fs Ai Note 7 - Available-fo
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O Br Mg Fs Ai Below is a summary ta
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O Br Mg Fs Ai Major additions/dispo
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O Br Mg Fs Ai Note 16 - Derivatives
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O Br Mg Fs Ai December 31, December
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O Br Mg Fs Ai Note 21 - Other liabi
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O Br Mg Fs Ai As of December 31, 20
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O Br Mg Fs Ai Contractual life Gran
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O Br Mg Fs Ai Note 28 - Revenues Fo
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O Br Mg Fs Ai Note 32 - Net finance
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O Br Mg Fs Ai b. Under the particip
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O Br Mg Fs Ai The Group limits its
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O Br Mg Fs Ai Liquidity risk The fo
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O Br Mg Fs Ai Interest rate risk Pr
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O Br Mg Fs Ai Note 36 - Contingent
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O Br Mg Fs Ai Certain loan agreeme
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O Br Mg Fs Ai The net proceeds of t
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O Br Mg Fs Ai Additional transactio
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O Br Mg Fs Ai Note 39 - Operating s
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O Br Mg Fs Ai Note 41 - Critical ac
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O Br Mg Fs Ai therefore fail to imp
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O Br Mg Fs Ai Cyprus - Russia Activ
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O Br Mg Fs Ai The Dutch Antilles Ac
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O Br Mg Fs Ai United States Activit
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Additional information Advisors O B
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