Raiffeisen Real Estate is allowed to buy Mall Varna

30 Nov

Bulgaria’s Competition Protection Commission has approved the request of Austria’s biggest banking group, Raiffeisen Zentralbank Austria AG to buy out the Mall Varna shopping and office center in the Black Sea city of Varna.

Raiffeisenbank will thus go ahead with the purchase 100% of Miller Mall Varna One EAD, headquartered in Sofia. RZB is the owner of Raiffeisenbank Bulgaria, which owns Raiffeisen Real Estate.

Raiffeisenbank Austria AG is a holding company of the Raiffeisenbank Group, which owns Raiffeisenbank Bulgaria EAD.

Miller Mall Varna One EAD manages the commercial and entertainment center known as Mall Varna. Raiffeisenbank approached the Competition Protection Commission over the deal at the beginning of October 2010.

The competition watchdog has now ruled that there is “neither horizontal, nor vertical connection between the activities of the two parties,” which will therefore generate no changes in the market situation of the participants after the deal is carried out. The Commission believes that the purchase will not affect the efficient market competition in the respective sector.

The sum that Raiffeisenbank will pay to acquire Mall Varna’s ownerhas not been revealed.

Mall Varna was constructed by the Bulgarian Interservice Uzunovi Jsc and opened in the summer of 2008. Shortly after it was acquired by the Scottish Miller Developments, a subsidiary of Miller Group.

The price of EUR 120 M was record-high for the purchase of a commercial center in Bulgaria at the time. This was also the second largest real estate deal in the country.

Bulgaria ranks first in the European Union in the number of new shopping malls in the first half of the 2010, according to a report by Cushman and Wakefield consultancy.

While in most EU member-states the number of malls is on the slide due to the global economic crisis, their construction has accelerated in Bulgaria, marking a nearly 90% increase over one year.

A similar trend is also witnessed in other Balkan states – Bosnia&Herzegovina, Romania, Slovenia, Serbia and Croatia – but the growth rate there is 5-10%.

The stock of contemporary shopping mall space in Bulgaria doubled in the first six months of 2010 with the opening of five new shopping malls, reaching 452 000 sqm in total, according to a recent realtor report.

Another five shopping mall projects are expected to open until the end of 2010, which will add 126 000 sqm of contemporary stock to the market, according to Colliers International’s retail market overview for the first half of 2010 in Bulgaria.

Mall Varna was the first major shopping mall to open doors in Bulgaria’s Varna. At the time of its opening it became the largest shopping mall in Bulgaria, with a total all-out build-up area of 70 000 square meters.

Two similarly giant malls opened doors in Varna subsequently Grand Mall Varna, and Varna Towers.