AIG/Lincoln takes off with first residential project
AIG/Lincoln Polska started the sale of apartments at its Osiedle Kampinos, west of Warsaw, late last month, signing firm contracts for a tenth of its properties in the first week. This is AIG/Lincoln's first residential project in Poland.
The company, which owns nine hectares of land in the village of Lipkow, 17 kilometers west of central Warsaw, plans to build 31 houses by the end of this year and another 70 by the end of 2001.
AIG/Lincoln, the Polish unit of the U.S.-based developer, has until now been involved in the development of office, warehouse and retail projects. It chose Lipkow for its first residential project because it is near Warsaw and within walking distance of Kampinos National Park. Tomasz Klodowski, residential partner with AIG/Lincoln, said: "The location is absolutely perfect it is beautiful."
Areas northwest of Warsaw have so far attracted few modern residential investments by Western developers. Investments in high-end homes tend to focus on the city's southern boundaries, in areas such as Wilanow, Konstancin and Ursynow.
AIG/Lincoln said it realized the area's potential when it was involved in the development of a hypermarket for U.K.-based Tesco in western Warsaw. Northwestern Warsaw districts such as Bemowo, Bielany and Ursus are densely populated, which should help attract customers to Kampinos, Klodowski believes. "People want to live near their families," he said.
AIG/Lincoln plans to attract middle and upper-middle class Polish nationals to the development. Its price of $900 per square meter of apartment includes ownership of the land and infrastructure development. That means the smallest, 164 square-meter, semi-detached house costs $150,000. The biggest house in Kampinos, with 251 square meters, comes in at $226,000.
These prices are lower than similar high-end projects south of Warsaw, including the Konstancja project developed by Globe Trade Centre (GTC).
GTC charges $900-$1,000 per square meter of house, plus $120 per square meter of land. Its smallest, 140 square-meter house, situated on a 350 square- meter site, would cost $168,000, more than a slightly bigger house in Kampinos.
GTC said its prices are higher simply because land in the Konstancin neighborhood costs more. According to Zygmunt Chyla, marketing manager at GTC, "(Konstancin) is a high-class location." AIG/Lincoln's Klodowski said Kampinos' position close to the national park could offset the greater prestige of Konstancja's location.
During the first week of sales, AIG/Lincoln signed reservations for nine houses. These reservations precede actual contracts to give customers time to make the necessary financial arrangements. Three of the reservations have already resulted in firm sales contracts. "This is what we expected," Klodowski said. Mansion & House agency is the sole agent for the project.
Klodowski said the company planned more residential developments in Poland. "We have a number of other projects," he said, though he wouldn't specify locations.
Budimex not selling HQ
Budimex, one of Poland's biggest construction companies, said it doesn't have immediate plans to sell the building containing its headquarters on ulica Marszalkowska in central Warsaw. Some analysts had suggested that Budimex, whose strategy is to focus on core construction operations, should sell the office.
"We are not considering that," said Waldemar Mierzwa, spokesman for Budimex.
The 20,000-square-meter building covers more than 5,000 square meters of land. Budimex occupies a "tiny" part of the building and rents the rest out, Mierzwa said without elaborating.
"Budimex doesn't need such a big building," said Rafal Jankowski, an analyst with CDM Pekao Securities.
The company, which is listed on the Warsaw Stock Exchange (WSE), has already sold two of its hotels in southern Poland for zl. 34 million ($8.5 million), Jankowski said.
"They sold the hotels, now it's time for the (headquarters)," he said. Jankowski said the building is worth at least $25 million.
Focus Filtrowa changes agents
German insurance company Hamburg-Mannheimer, which recently acquired the Focus Filtrowa office building currently under construction in Warsaw, has changed the agents representing the development.
The building had been represented by Healey & Baker but is now being handled by Jones Lang LaSalle and DTZ, working as joint exclusive agents, said Thomas Hattig, board member of Teamworx, which represents the building's owner in the building. Hattig said the new owner, which bought the 11-story building between the Trasa Lazienkowska highway and ulica Filtrowa from Mostostal Export, had reviewed the project's marketing strategy.
"Healey & Baker was selected by the former owner," Hattig said. "We were asked to arrange for the tender (to select new agents)."
Focus Filtrowa has 33,000 square meters of office space. Hamburg-Mannheimer, its subsidiary Compensa, as well as Mostostal Export have already committed to taking 30% of the space, Hattig said.
The asking rents in the building, due for completion in October 2000, are $25-$28 per square meter a month, depending on the size of the space taken.
Room to grow
Shopping centers' share of total retail sales in Central Europe still has room for growth, according to a recent report from Retail & Development Services (RDS), a Swiss research institute.
Last year, sales at shopping centers in Central and Eastern Europe reached o11.3 billion, which represents just 1.9% of the o599 billion in total retail sales, according to RDS. By comparison, shopping centers account for 16.5% of total retail spending in Western Europe and as much as half of total retail sales in the United States, according to the RDS report "Development of Shopping Centers in Europe."
RDS estimates that this year and the following year as much as 6.8 million square meters of retail space in shopping centers will be developed throughout Europe, which will increase the total stock of such space by 11%. Central and Eastern Europe will get 27% more shopping center space, RDS estimates.
Poland, with 840,000 square meters of space in these centers, ranks No. 11 out of 25 countries in Europe. In per capita terms, though, with 22 square meters per 1,000 residents, it comes near the bottom, at No. 20. That puts it behind Hungary, Slovenia and the Czech Republic, and ahead of only Greece, Estonia, Turkey, Slovakia and Russia.
