Midi plc plans to go to the market by the end of the year to raise funds as it enters the next phase of the €450 million-plus Tignè Point and Manoel Island project, chairman Albert Mizzi told The Times Business.
“We have two alternatives – either an initial public offering or a bond issue,” Mr Mizzi said. “Since it is a long-term project, we are examining both and maintain a balance between one and the other.
“Whichever the option, however, the shareholders are putting in more of their own funds. We also have the option to go to the market with one option first and another later.”
Midi plc currently has 3,000 bondholders; its seven per cent 2016-18 GBP bonds have recently traded at record highs, while the euro bonds have consistently traded at a premium on the secondary market.
Following the inauguration of The Point, the landmark shopping mall earlier this year, Midi plc, the developer of the most ambitious project undertaken by private enterprise in Malta, is gearing up to begin works on the north side of the Tignè peninsula. Planning permission is pending for another 88 luxury apartments on two seafront blocks – secluded on account of the mall – a second public piazza with adjacent catering and retail offers, and a business centre.
Meanwhile, the master plan for Manoel Island, where the restoration of the historic fort is practically complete bar some lighting installations, is under discussion.
The outline plan is equally as ambitious: subject to planning approval, Midi plc hopes to re-create a Mediterranean marina village ambience on Manoel Island, with low-rise residential developments consisting of bungalows, villas, maisonettes and apartments. There will be extensive landscaping and a fully-fledged marina able to accommodate superyachts, protected by a breakwater. The nearby yacht yard is to be secluded by a “commercial” strip.
Works on the Manoel Island phase, which should kick off mid-2011, will cost €100 million.
Midi is also discussing the final location and dimensions of the project’s planned hotel with the Malta Environment and Planning Authority.
Mr Mizzi said the most realistic completion date for the wider project, in the making since 2002 and spanning more than 400 tumoli between Tignè and Gzira, was 2016.
The chairman said buyer interest in Midi property had slowed, mainly because there was currently none available for sale. Resale values, meanwhile, continued to rise as did the return on rented apartments.
“Midi is a unique project,” Mr Mizzi stressed. “There will never be another like it. We have two unique sites and we want to ensure that we develop the right product to the right quality. Midi will be responsible for it long term.
“Why invest in Midi? Midi is not selling investors a product, it is selling property. It cannot be carried away. Midi is a real estate company, selling high quality property and retaining other projects on a long-term basis generating cash flows to the company. The future of Midi depends on the quality and the finishings of our development. If we maintain that, this company has a fantastic future. People aspire to be part of the Midi community: the location, the views, the uniformity, the freedom from traffic, the high standards all make it very desirable.”
The project’s initial stages stalled several times during the past eight years when excavation unearthed heritage sites and encountered difficult geological conditions. Work on the foundations and infrastructure proved especially time-consuming and expensive – the consortium is bound by the lease agreement signed with the government to foot the project’s entire infrastructural and heritage bill. Restoration work on Fort Tignè and Fort Manoel alone will cost €30 million.
“Luckily, when construction began and the first block was put on the market, there was enormous response,” Mr Mizzi recalled. “It was snapped up in three days. We decided to sell further property on plan. In four months, we sold Lm45 million (€104.8 million) worth of property housed in 12 blocks – it was a record. At the moment, practically all the apartments have been sold, bar a handful. But more will come on stream soon, the first will be 22 apartments around the piazza. In total, Midi aims to have put around 550 apartments on the market at Tignè Point.
“Not many people actually realise how vast this project is – there is an entire network of roads and parking areas below ground. Midi gave Sliema its first real square. It is as large as Valletta’s Pjazza Reġina. Everything is moving now as we had planned.”
Asked about retail activity at The Point – at 14,000 square metres, it is the largest shopping mall Malta has ever seen – Mr Mizzi admitted the economic climate had taken its toll similarly to other commercial areas around the country. Mr Mizzi said The Point had got off to a good start in March and Midi had high expectations for its prospects.
Mr Mizzi, who is involved in retail franchising locally and overseas through his own firms, said he was confident business would improve as the economy picked up. It was paramount that The Point, where all outlets have been leased, maintained its high standards in the meantime. By the festive season, all units will be occupied and operating.
Midi was undertaking to increase activity in the square onto which The Point led out and several proposals have been discussed with the Malta Environment and Planning Authority.
“We aim to inject more life into the square with more restaurants and catering outlets,” Mr Mizzi explained. “That will encourage more people to come to The Point. We are very cognisant of customer feedback. The underground car park has the lowest fees in Sliema, making it more accessible. We will also have a lift installed at the belvedere before Christmas to facilitate access from street level.”