Text size

Just four years ago real estate developer Mordechay (Motti) Zisser was in deep financial straits. The share price of his medical tech-cum-real estate company Elbit Medical Imaging had plunged. Institutional investors were suing him, Bank Hapoalim was urging him to divest assets to reduce his huge debts and Bank Leumi sold its shares in ElbitElbit Medical at a great loss.

The adventure he set out on ten years earlier - to build a chain of 50 malls in Eastern Europe at a time when there were no modern shopping centers there at all - seemed on the verge of collapse.

But Zisser believed in himself, restructured his debts, signed guarantees and put in more of his own money. He sold nothing and was not tempted to bring partners.

Now his stock has taken off. He's the darling of the banks and investors all over the world are emulating his methods.

After three years of recovery in international real estate markets, the entry of a number of the countries that Zisser invested in to the Euro Bloc, and amazing price increases in Eastern Europe, Zisser no longer needs handouts.

At the end of last week, investors also took notice in London, one of the world's chief financial centers.

Zisser successfully raised EUR 230 million for Plaza Centers, a subsidiary of Elbit Medical Imaging, on the London Stock Exchange. Plaza Centers builds malls and commercial centers in Central and Eastern Europe.

The issue put a value of 550 million euro ($700 million) on the company before the money, or 800 million euro ($1 billion) after the money.

The offering will immediately give Elbit capital gains of NIS 600 million, and while it now trades at a company value of $700 million, its value will certainly go up. P

Plaza Centers, the subsidiary issued on the LSE, has five malls operating, another five in advanced stages of construction and another 10 projects in various stages of planning and construction.

It also owns rights in three enormous projects underway in Budapest and Bucharest. One is an entertainment, hotel, gambling and residential center on the Obuda island in the middle of the Danube River near Budapest. It will be 350,000 square meters of construction and cost $1.5 billion.

Plaza Centers owns 30 percent of the rights to the project, and Plaza's partners in the deal are British investor Sir Bernard Schreier and the European Bank for Reconstruction and Development (EBRD).

Bucharest is also where Zisser opened his first mall in 1996, at a time when no one thought that Eastern europeans had the buying-power to make such investments pay off.

Plaza Centers is also building a similar project in the center of Bucharest, Romania at an investment of $500 million, with Schreier and the Romanian government as partners.

Now that everyone is investing in Eastern Europe, Plaza Centers is looking elsewhere - to India.

It is also building shopping centers in India at a cost of $200 million, and the subcontinent is likely to be its next region for growth in coming years.