After starting its European expansion last year with an investment in Cyprus, Atterbury Europe took the next step by partnering with one of Serbia’s leading property developers in December. We spoke to Atterbury Europe CFO Henk Deist about what 2016 holds in store

With the Cyprus deal Atterbury owns the entire asset, but now in Serbia you have a local partner on the ground. What are the biggest operational differences?
Having a competent partner on the ground definitely makes life much easier. There are specific advantages to owning an asset outright, but it is also extremely demanding to manage an asset in another country. The management team racks up a lot of travelling hours every month as part of staying on top of the development. In the case of Serbia, less travel is required and certain aspects can be left in the hands of our partners, MPC Properties. This means progress is faster, and responsibilities are shared. Having the right partner is critical, and I’m of the opinion that having that local partner is the preferable way of doing business – and owning and managing an asset outright from outside should be the exception rather than the rule. It’s been only two months, but we are very happy that we have a partner that shares the Atterbury culture in so many ways. It really is, after all, a matter of association.

How are the companies similar?
I think it starts with the connection between the owners. The CEOs of our two companies, Louis van der Watt and Petar Matíc, have similar entrepreneurial thinking. Also, the financial discipline with which they run their company is similar to our own. On an operational level, the head of their Asset Management division Thomas Viladsen is Danish, and his Western European mindset is very similar to our own. Both Mr Matíc and Mr Viladsen have been to South Africa on a number of occasions, so they have a good grasp of how Atterbury’s business is run.

We believe the annual results, which came in after the deal was signed, were also very positive?
Yes, we signed the deal on the strength of the December 2014 results, shortly before the 2015 results were available, so it was a wonderful surprise to learn mere weeks later that the appreciation had been significant, and we’d achieved better operating results than we’d expected.

What do you think will be Atterbury’s biggest contribution to the partnership?
Europe is just coming out a slow economic period, so our partners have not developed a property for five years, whereas Atterbury has been extremely active. So our intellectual capital around design, process, development and asset management of huge malls over many years and in many countries, combined with their local knowledge is a very powerful combination

What are the next steps now that the deal is signed?
The Serbian capital Belgrade has two million people and only two malls, so we want to build another significant mall, and also start with developing our first smaller retail park quite soon. Ušće Shopping Centre, which is part of our new acquisition, is the largest mall, and the other one, incidentally, was also recently acquired by a South African developer, so in effect all of Belgrade’s malls now belong to South African concerns! Competition is fierce, so we’ll have to be vigilant about keeping an eye open for new items on tender, which is why having the local partner on the ground is such an asset.

Is Europe’s Syrian refugee crisis in any way impacting on business?
No. Belgrade has not been affected in any way that we’ve encountered.

Are you fully relying on MPC’s network of suppliers or are there plans to broaden that existing network?
We will probably use their supplier network, although we are using our architect, which adds value in terms of innovation, recent best practices and so forth.

What are the objectives for 2016?
There are two aspects we want to take forward. Firstly, developing greenfield projects. There are a number of excellent land options that we are tendering on, and because we also seeded a 50/50 development fund with MPC at the start we already have the equity for new developments and there will be no financing delays. Secondly, the development/expansion of existing assets. Because they are performing so well, as attested by the favourable annual results, we can easily raise capital against them, so we are in the great position that we are able to leverage the good performance of the existing assets to invest in new projects. We really have all the ingredients, we just have to put them in place now, and make them work! By the end of this year we want to have completed a small development – a retail park just outside of Belgrade – and acquired the land for a big new mall in the capital. Negotiations are already underway.

And where to next for Atterbury Europe?
I think finding another opportunity like this one, where there is a great local partner and great investment opportunity on the ground, would be the best deal to work towards.