Cortis family purchases Savoy Complex for €17.5m

Central Business Centres plc to retain retail activity


The Savoy Shopping Complex in Valletta has been purchased for €17.5 million by Central Business Centres p.l.c. (CBC), which is fully owned by the Cortis family, following a successful bond issue of €21 million earlier this month.

The €21 million 4% Unsecured Bonds 2033 had a nominal value of €100 per Bond and were issued at par.

According to the company’s prospectus published on 24 September, CBC intends to refurbish the Valletta premises and continue operating it as a retail and office centre.

Architect and civil engineer Joe Cassar valued the Savoy Complex at €16.5 million in September. In his valuation, he considered the location, finishes and potential rental market value of similar properties in Valletta.

In its prospectus, the company said that of Bond Issue proceeds, the amount of circa €17.5 million was to be used to purchase the Savoy complex, €3 million will be used to repay the 2014 Bonds; and approximately €200,000 are be used for general corporate funding purposes.

On 19 November, just eight days after the Bonds were issued, CBC announced that it had purchased and acquired the Savoy Shopping Complex in line with its prospectus.

CBC already owns and operates other properties and business centres:

  • CBC Zebbug enjoys a 100% occupancy of available office space and car park facilities
  • CBC Gudja enjoys a 100% occupancy of available office space and car park facilities
  • CBC St. Julian’s enjoys a 57% occupancy of available office space and car park facilities
  • Zebbug Business Premises enjoys a 100% occupancy of proposed areas and parking facilities

The prospectus notes that there has been no material adverse change in CBC’s prospects since the publication of its latest audited financial statements. The company considers that it is generally subject to the normal business risks associated with the real estate market and barring unforeseen circumstances, does not anticipate any trend or events outside the ordinary course of business that could be deemed likely to have a material effect on its upcoming prospects, for at least the current financial year.

“The Directors are of the view that there is still an active demand for the rental of commercial property generally, particularly because Malta’s economy is largely based on the services sector, rendering quality commercial space increasingly attractive to employers wishing to enhance their professional image,” the prospectus reads. “The Directors are satisfied that their targets of renting out the commercial space available at the Zebbug CBC and the Gudja CBC have been achieved and will strive toward 100% occupancy at CBC St. Julian’s and Villa Fieres.”

The company’s directors are also confident of achieving high occupancy levels at the new Valletta property, firstly due to the fact that it is current 50% occupied and secondly, due to the location and current standing of the property.

“The Issuer has now garnered experience with respect to operations in the property development sector and the Issuer’s strategy for the foreseeable future is to continue developing its assets with a view to realising and maximising their financial potential as well as exploring new opportunities on the local market.”

The Savoy Complex

The Savoy Shopping Complex was built between 1950 and 1954 and was subsequently developed into a cinema complex with a lower auditorium and upper auditorium.

In the 80s, the lower auditorium - the upper basement and ground floor - was converted to retail shops. In the 90s the upper auditorium was also converted to retail outlets.

Currently, the property is specifically used for retail shopping outlets on all floors with administrative offices on Level 6.

The present net annual income of the leased property amounts to €313,000.

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