Some of Malta’s biggest market players are coming together to develop commercial real estate holdings on a joint basis, with the move seen as an opportunity for each company to diversify its property exposure across a more diverse portfolio.

TUM Invest subsidiary TUM Operations Ltd and V&C Group subsidiary V&C Developments Ltd, respectively holding a 75 per cent and 25 per cent shareholding in Centre Park Holdings Ltd, have on 7th June entered into an agreement with BT Group Ltd, Burmarrad Group Ltd, and fellow V&C Group comany V&C Investments Ltd, with each agreeing to take up shares in varying proportions in the newly set up BBT plc.

Centre Parc Holdings is the owner of Centre Parc, a shopping mall found in the limits of Qormi. The complex is currently undergoing a second phase of expansion, consisting of an extension to the existing built-up footprint, as well as the development of an additional two floors covering a total area of approximately 8,000sqm.

The deal will see TUM Operations Ltd exchange its 75 per cent shareholding in Centre Parc Holdings in return for the issue and allotment of 31.43 per cent of the issued share capital of BBT plc.

In a communication to market, TUM Finance plc (the finance vehicle of TUM Invest), explained that the shareholding allocated to TUM Operations Ltd has been determined based on the fair market value attributed to its shareholding in Centre Parc Holdings compared to the fair market value attributed to the assets contributed by the other shareholders in BBT plc.

“The fair market value of the equity attributed to Centre Parc Holdings was based on the fair market value of the property less €13 million in liabilities,” the company said, with latter representing the outstanding balance due by Centre Parc Holdings to Tumas Operations Ltd, which liability in CPHL will be assumed by BBT plc.

As per the agreement, BBT plc shall procure bank financing for the purposes of advancing a loan of €6 million to Centre Parc Holdings, to use for the purposes of paying TUM Operations Ltd directly in settlement of part of the loan.

“With respect to the outstanding balance of €7 million, it was agreed that TUM Operations Ltd would assign such receivable to BBT plc for an equivalent consideration to be settled by way of issuance of further shares in BBT plc in favour of TUM Operations Ltd.”

The deal was first announced in a market update released by TUM Finance plc on 7th April 2022.

The Marsa Edible Oil site

The deal is presumed to have at its core an intention to develop the former site of the Edible Oil factory in Marsa, in an area known as ‘Tal-Imgieret’. Part of the site is owned by Regeneration Projects Ltd, a consortium set up in 2018 having BT Commercial, Burmarrad Group, and TUM Invest as shareholders, among others.

The total investment is expected to be of some €50 million. 

The site has recently been granted an extension of emphyteusis and a removal of conditions over development following a parliamentary resolution.

About the companies behind the joint venture

TUM Invest is involved in the automobile and property development industries. It is owned by Anthony Fenech, formerly a major shareholder in TUMAS Group who divested of his holdings in the conglomerate to focus on his immediate family’s business interests, as per the company’s website.

V&C Group is a diversified group finding its origin as a construction contractor. Nowadays it operates in road building, education, healthcare, hospitality, retail and property management. It was founded by Vincent and Charles Borg.

BT Commercial is one of Malta’s leading suppliers of air conditioning systems, renewable energy systems, and appliances. It is also involved in property development and management, having an office block in Mrieħel and, together with Burmarrad Group, working to renovate the former Farmers’ Wine building in Burmarrad, which now houses fashion retail chain Kiabi. It is owned by Oliver and Graziella Brownrigg.

Burmarrad Group is involved in the leasing, maintenance, repair and sale of all kinds of vehicles. The company, started by Mario Gauci and today run by Sharon Gauci, recently completed a move to new premises in Marsa. Its former Burmarrad site is currently slated for development into a four-storey complex.