Apollo Rida acquires twenty eight retail projects
The shopping centers are master leased on a long term basis to affiliates of the Metro Group, a German retailer, whose brands include the hypermarket group, Real, the electronics chain Media Markt and the Praktiker DIY stores. The debt financing of up to zł.2.92 billion (€615) million for the transaction is being put up by Eurohypo, the Dusseldorf-based, specialised bank for real estate and public sector financing.
William Benjamin, Apollo's London-based Managing Partner, called the transaction, "probably the largest single transaction of its kind in Poland," and Ira Mitzner of Rida claimed the deal could become, "a template for future opportunities in the EU as it grows." This is the Apollo Rida partnership's second high profile transaction in Poland in recent years, the first being the purchase of the former Daewoo headquarters in Warsaw, Warsaw Trade Tower, late in 2002. The deal has apparently been in the pipeline for the past nine months and now the parties are expecting, "approval from government agencies shortly," according to Ira Mitzner.
The members of the panel at the press conference found it very difficult to conceal their satisfaction at the accomplishment of the transaction and insisted it was to be the first of many to come in Poland and other EU accession countries. "This is a region we're very comfortable with," said Lee Neibart, Apollo's New York-based Senior Partner. He added that it would soon be raising a second fund of zł.2.37 billion (€500) million, "to be deployed over two years."
Ira Mitzner paid tribute to the contributions of Marcus Leininger of Eurohypo and Apollo Rida Poland's Rafał Nowicki, for laying much of the groundwork for the purchase and stressed that, "this was not an easy deal. We were dealing with five different government jurisdictions and properties in twenty five localities."
In an outburst of optimism, which some closely involved in the Polish real estate market of recent years may have considered unusual, if not unwelcome, William Benjamin stated that, "Despite [recent] bumps in the road, Poland will become one of the fastest growing economies in Europe. Consistent research shows this." He added that consumer demand was destined to be "well above the EU average" and the newly-acquired portfolio was needs-driven, focused as it was, on food and basic household goods and appliances. "This is the right way to enter this market," he insisted.
The acquired retail developments are all based in cities of 200,000 people or more and include the major centers of Warsaw, Kraków, Gdańsk and Poznań but they are concentrated more in the south of the country, particularly in the Silesia region.
The announcement of this transaction, however, follows other agreements during recent months, (which admittedly don't involve quite so many developments), such as the Heitman/ Polimeni Joint Venture, which suggest that Poland's retail market is about to heat up significantly in the coming years. Asked about the level of competition Apollo Rida could expect to face in the retail sector, Ira Mitzner replied, "this portfolio is very well-positioned to compete," and added that the concepts underpinning the portfolio were, "very well-marketed and merchandised and fresh" and that the partnership would do all it could to "keep their [shopping centers'] edge".
The panel wouldn't be drawn on the returns they were expecting from the portfolio, however, and William Benjamin stated that "it was not our policy to discuss targets." He wasn't particularly forthcoming about the partnership's exit strategy either and made the general remark that as far as a future buyer of the portfolio was concerned, "we are hopeful and expect that with EU accession, there will be continuing interest in this market."
William Benjamin, Apollo's London-based Managing Partner, called the transaction, "probably the largest single transaction of its kind in Poland," and Ira Mitzner of Rida claimed the deal could become, "a template for future opportunities in the EU as it grows." This is the Apollo Rida partnership's second high profile transaction in Poland in recent years, the first being the purchase of the former Daewoo headquarters in Warsaw, Warsaw Trade Tower, late in 2002. The deal has apparently been in the pipeline for the past nine months and now the parties are expecting, "approval from government agencies shortly," according to Ira Mitzner.
The members of the panel at the press conference found it very difficult to conceal their satisfaction at the accomplishment of the transaction and insisted it was to be the first of many to come in Poland and other EU accession countries. "This is a region we're very comfortable with," said Lee Neibart, Apollo's New York-based Senior Partner. He added that it would soon be raising a second fund of zł.2.37 billion (€500) million, "to be deployed over two years."
Ira Mitzner paid tribute to the contributions of Marcus Leininger of Eurohypo and Apollo Rida Poland's Rafał Nowicki, for laying much of the groundwork for the purchase and stressed that, "this was not an easy deal. We were dealing with five different government jurisdictions and properties in twenty five localities."
In an outburst of optimism, which some closely involved in the Polish real estate market of recent years may have considered unusual, if not unwelcome, William Benjamin stated that, "Despite [recent] bumps in the road, Poland will become one of the fastest growing economies in Europe. Consistent research shows this." He added that consumer demand was destined to be "well above the EU average" and the newly-acquired portfolio was needs-driven, focused as it was, on food and basic household goods and appliances. "This is the right way to enter this market," he insisted.
The acquired retail developments are all based in cities of 200,000 people or more and include the major centers of Warsaw, Kraków, Gdańsk and Poznań but they are concentrated more in the south of the country, particularly in the Silesia region.
The announcement of this transaction, however, follows other agreements during recent months, (which admittedly don't involve quite so many developments), such as the Heitman/ Polimeni Joint Venture, which suggest that Poland's retail market is about to heat up significantly in the coming years. Asked about the level of competition Apollo Rida could expect to face in the retail sector, Ira Mitzner replied, "this portfolio is very well-positioned to compete," and added that the concepts underpinning the portfolio were, "very well-marketed and merchandised and fresh" and that the partnership would do all it could to "keep their [shopping centers'] edge".
The panel wouldn't be drawn on the returns they were expecting from the portfolio, however, and William Benjamin stated that "it was not our policy to discuss targets." He wasn't particularly forthcoming about the partnership's exit strategy either and made the general remark that as far as a future buyer of the portfolio was concerned, "we are hopeful and expect that with EU accession, there will be continuing interest in this market."
