EPN Announces an Investment in the U.S. Retail Real Estate Market Becoming the Largest Investor in the US$1.5 Billion Macquarie DDR Trust With a 48% Stake

Jun 16, 2010, 07:58 ET from Elbit Imaging Ltd.

NORTHBROOK, Illinois, June 16, 2010 /PRNewswire-FirstCall/ -- EPN GP, LLC ("EPN"), a real estate investment venture jointly formed by Elbit Plaza USA, LP ("Elbit Plaza USA") and Eastgate Property LLC ("Eastgate"), announced today an approximately US$116 million investment in Macquarie DDR Trust ("MDT" or the "Trust"), an Australian publicly traded trust (ASX:MDT). The Trust will be renamed EDT Retail Trust ("EDT"), an Australian publicly traded trust (ASX:EDT). Following completion of the transaction, which is expected on June 18, 2010, EPN will hold an approximately 48% ownership interest in the Trust, becoming its largest unitholder, and will appoint EPN representatives to the Board managing EDT.

The Trust holds interests in 78 operating retail properties valued US$1.5 billion as of December 31, 2009. The portfolio comprises approximately 460 tenants and 13.2 million square feet (1.2 million square meters) of leasable area of mainly community shopping centers and single box retail properties across the major regions of the U.S., with assets located in 23 states.

Key parts of the transaction are: (i) MDT's private placement to EPN of A$9.5 million; (ii) MDT's completion of a pro rata entitlement offer raising approximately A$200 million; (iii) EPN's acquisition from Macquarie Group Limited of its principal unit holding in the Trust; and (iv) EPN acquisition from Macquarie Group of its 50% interest in the entity which is the owner of the Responsible Entity of the Trust, with the other 50% owned by Developers Diversified Realty Corporation ("DDR"). DDR continues to provide property management and leasing services for the Trust's assets.

The proceeds of the MDT recapitalization will be largely used for repayment of the amounts outstanding under the Trust's unsecured debt and derivative liabilities and other senior debt, and provide enhanced balance sheet stability to the Trust, reducing leverage from 73.2% to 64.4%.

Alex Berman, EPN's Chief Executive Officer, commented: "We are excited to be making a significant investment in EDT with its high quality portfolio of retail assets. In joint management with DDR, a top notch asset and property manager, we look forward to further enhancing the portfolio performance and its value. This large-scale complicated transaction has been made possible by hard work of the EPN team and commitment from its sponsors, and is an important step forward to fulfilling EPN's strategy of becoming a significant U.S. retail real estate investor."

About EPN

EPN is a real estate investment venture jointly formed by Elbit Plaza USA, L.P., a subsidiary of Elbit Imaging Ltd. (NASDAQ: EMITF) and Plaza Centers N.V. (LSE: PLAZ) (WSE: PLAZ/PLAZACNTR), and Eastgate Property LLC, an established U.S. based international fund manager with assets under management of over US$3 billion, of which approximately $800 million are dedicated to real estate.

EPN is in the process of raising a real estate investment fund totaling US$400 million, with Elbit Plaza USA and Eastgate committed to invest US$200 million of the equity in the fund (the "Fund"). The Fund will be focused on the U.S. retail and commercial real estate sectors by establishing one or more dedicated U.S. real estate investment platforms. The Fund in general, and EPN in particular, intend to take advantage of real estate opportunities in the United States, primarily in the retail sector, through direct acquisitions and joint ventures with leading real estate operators and owners of relevant assets or portfolios.

    For further information, please contact:

    EPN Investment Management, LLC
    Mr. Alex Berman
    Chief Executive Officer
    707 Skokie Boulevard, Suite 600
    Northbrook, IL 60062, U.S.A.
    Phone: +1-312-915-0690

SOURCE Elbit Imaging Ltd.