Agat Ejendomme

Regulatory Filings • Jul 17, 2012

Aalborg, 2012-07-17 20:38 CEST (GLOBE NEWSWIRE) --

TK Development concludes a conditional agreement with Heitman concerning the
sale of two Polish projects at a total project value of EUR 95 million. The sale
concerns the Group’s shopping centre, Galeria Tarnovia, in Tarnów and a new
development project in Jelenia Góra.

Summary:

TK Development has concluded a conditional agreement with Heitman to the effect
that Heitman assumes a 70 % shareholding in two Polish projects, i.e. the
completed shopping centre in Tarnów, Galeria Tarnovia, and the planned shopping
centre project in Jelenia Góra. TK Development will realize a small profit upon
completion of the transaction, free up cash resources and obtain an additional,
future profit from fee income from the jointly owned company in respect of
development, letting and construction management services.

Heitman takes over 70 % of the projects via investment in a holding company.
Heitman, founded in 1966 and headquartered in Chicago, manages approximately
EUR 21 billion in assets invested directly and indirectly in real estate in
North America, Europe and Asia-Pacific. The firm’s clients include
institutions, pension plans, endowments and foundations, and individual
investors. European private equity investments span 15 countries with
approximately EUR 4 billion currently under management. A leading investor in
the region, Heitman has over 50 people across Europe in its offices in London,
Warsaw, Luxembourg and Moscow.

Galeria Tarnovia, shopping centre, Tarnów, Poland

The Galeria Tarnovia shopping centre is one of TK Development’s major completed
projects. The project comprises a 16,500 m2 shopping centre, consisting of a
supermarket of about 2,000 m2 and specialty stores of about 14,500 m2. The
centre opened in November 2009 and has basically been fully let since then,
with satisfactory operations and customer influx.

The sales price is in the region of EUR 40 million. The current external
financing in the project is continued, and Heitman makes financing available
for the company pro rata to their ownership interest. TK Development will
realize a small profit on the project and will free up liquidity.

Shopping centre, Jelenia Góra, Poland

TK Development has bought a plot of land in Jelenia Góra, Poland, and has an
option on additional land for the development of a shopping centre of approx.
24,000 m2. The project will comprise a supermarket of about 3,500 m2 and
retail, restaurant and service premises of about 20,500 m2. The local plan for
the area is in place, and the letting of premises has started. Construction is
expected to start in 2013 and opening is scheduled for 2015.

Heitman joins the project with a 70 % ownership interest at the current
development stage, and the future development of the project, including the
construction of the project, will take place in partnership with Heitman. The
total project value is expected to be around EUR 55 million. The partnership
will allow for a more optimal exploitation of the Group’s resources, including
equity allocation, as Heitman will make financing available pro rata to their
ownership interest.

The agreement involves further maturing of Galeria Tarnovia, Tarnów, as well as
startup and maturing of the shopping centre in Jelenia Góra after the expected
opening in 2015. After this, the projects are intended to be resold. It has
been agreed that resale can be realized after a period of three years from the
conclusion of the agreement.

The agreement provides a preference return for Heitman, while TK Development
has access to a performance-related share of any additional proceeds from
reselling the projects. In addition, TK Development will receive fees from the
jointly owned company for development, letting and construction management of
the development project.

The overall agreement with Heitman is in line with the Group’s adjusted
business model under which TK Development wishes to enter into partnerships
concerning completed properties and new development projects for the purpose of
securing a more optimal allocation of the company’s equity, greater
diversification of risk and improved utilization of the Group’s development
expertise.

TK Development’s ownership interest in the projects will be classified as
investment properties.

The transaction is expected to be finally effected in August 2012.

Profit expectations for 2012/13

The agreement does not change the Group’s expectations for 2012/13.

Management considers it of great importance to effect further sales of
completed major projects in 2012/13. The sale of major completed projects will
generate the cash resources required to underpin future operations and project
flow, and thus long-term earnings. In light of the volatility of financial
markets, the volume, timing and proceeds of further major project sales are
subject to uncertainty. Despite this uncertainty, Management expects to sell
additional projects in the near future and to generate positive pre-tax results
for the 2012/13 financial year.

The expectations mentioned in this announcement, including earnings
expectations, are naturally subject to risks and uncertainties, which may
result in deviations from the expected results. Expectations may be affected by
various factors, as mentioned in the section “Risk issues” in the Group’s
2011/12 Annual Report.

Contact details:

TK Development A/S

Frede Clausen

President and CEO

T: +45 2090 8770