ING Real Estate is to pay compensation to Rodamco Europe as a temporary solution to appease its fellow Dutch company in relation to the ongoing saga surrounding the Zlote Tarasy (Golden Terraces) shopping and retail complex in Warsaw.
Menno Maas, ceo of ING RE's Development division, reportedly said ING RE will make a financial arrangement with Rodamco Europe based on the profits generated by Zlote Tarasy, according to Dutch business week FEM. The arrangement will continue until ING is in a position to sell Rodamco Europe its agreed stake in the centre. Speaking on the fringes of the MIPIM property fair in Cannes earlier this month, Maas reportedly ruled out the possibility that ING RE would sell Rodamco Europe shares from the 72.85% stake ING already holds in Zlote Tarasy. 'That's not going to happen,' he said.
Last month it was reported ING RE faced a new delay in acquiring the 23.15% stake in the centre held by Warsaw City Council. ING RE needs the stake to fulfil its obligations to Rodamco Europe, which has an option to buy 50% of these shares. The city council wants to await the outcome of an assessment of the project before determining the sale price. This could delay the sale until after the summer.
The problem with the shares is just the latest set-back to bedevil the Zlote Tarasy partnership between ING RE and Rodamco Europe. The complex was originally to open in 2005 but ING has blamed repeated missed deadlines on court action by environmentalists and then construction delays.
The project comprises three office buildings (including one over 100 metres high), 200 retail and service units spread over 63,000 m2, an eight-screen cinema and a four-level underground car park. The retail portion of the complex opened in November 2006.