NEPI Rockcastle Plc's wholly owned subsidiary Tuvalu sp zoo agreed to acquire two adjacent shopping centers in Kraków, Poland, for an aggregate purchase consideration of €249.4 million, which will be increased by future payments of roughly €212 million subject to completion of a planned extension that will combine the two properties.

Closing of the deal is expected in the first quarter of 2018, with the purchase consideration payable on the effective date in cash. Future tranches of additional purchase price commitments comprise €115 million in regular monthly development drawdowns during the construction of the extension, roughly €34 million upon completion of the extension work and roughly €63 million on the second anniversary of the completion of the extension works, subject to specified parameters for the commercial success of the extension.

The agreement dictates that the aggregate of the initial payment and subsequent tranches may not exceed €469.3 million.

The sellers are Centrum Krokus sp zoo and Centrum Serenada sp zoo.

The two properties are the Serenada Shopping Centre and the Krokus Shopping Centre, with the former scheduled to open in October. Serenada, which spans 41,170 square meters, is being acquired for roughly €163.6 million, and the 27,728-square-meter Krokus is going for roughly €85.7 million. Upon completion of the extension work, which is expected in 2020, the resulting single integrated shopping center will span a gross lettable area of more than 100,000 square meters.

The deal is subject to the opening of the Serenada, regulatory approvals and permits, tax rulings, and the waiver of a right of first refusal by one of the tenants of Centrum Krokus in an existing lease agreement.

The acquisition will be initially funded using a combination of NEPI Rockcastle's existing cash and debt resources.