Developer freezes Lidl Malta funds over Żebbuġ site dispute

A local property development company has frozen funds belonging to Lidl Malta amid a contractual dispute over the former Cortis Woodworks site in Żebbuġ.

Central Business Centres (CBC), a sister company of the Cortis Group, said on Tuesday it had frozen an undisclosed sum provided by Lidl in the form of a bank guarantee, citing the retailer’s alleged failure to hand over part of the Żebbuġ site as agreed.

The dispute stems from an emphyteutical deed signed several years ago, which paved the way for Lidl to redevelop the former woodworks factory into a supermarket — the retailer’s 11th outlet across Malta and Gozo. Under the agreement, Lidl was also obliged to construct an underground level for CBC as part of the development.

CBC said it had made repeated attempts to resolve the matter amicably, but these had failed, prompting the company to formally register a dispute and freeze the funds provided as a guarantee.

In a statement, CBC said the frozen money would be used to finance works that Lidl allegedly failed to carry out, or which did not meet the required standards, as well as to offset damages the company claims it has suffered and continues to suffer as a result of the dispute.

According to public filings, the agreement between CBC plc and Lidl was signed in 2017, with the underground level originally expected to be completed by the end of the third quarter of 2025.

CBC plc owns a portfolio of properties used for commercial, warehousing and retail purposes. The dispute with Lidl comes at a sensitive time for the company, just days before a €3 million bond it issued a decade ago is set to mature. Filings also show the company is required to repay a further €3 million in unsecured callable notes issued last year, with CBC having previously indicated it would secure new borrowings to meet these obligations.