Apollo Rida eyes Daewoo tower to increase stake in Warsaw
"With the market turning, Rida is gearing to existing projects," said Ira Mitzner, a vice-president at Apollo Rida, a Poland-based joint venture owned by U.S. developer Rida Development Corporation and the U.S. property fund Apollo Real Estate Fund III.
Apollo Rida has had talks with owners of the Daewoo tower, said Mitzner, who would not comment further on the negotiations. Developer Dae-Pol's price tag for the Warsaw Trade Tower is $120 million, according to Dae-Pol, a joint venture owned by Daewoo (96%) and Polmot (4%).
Preliminary negotiations between Apollo Rida and building owners took place last month in New York and are ongoing, according to sources close to the deal. A sale could be completed in coming weeks, the sources added.
Daewoo officials were not available to comment on the negotiations.
Development of the tower is majority financed through an $80 million loan from BRE Bank, according to Dae-Pol. Apollo Rida is prepared to take over the building's debt obligation, sources said.
The Warsaw Trade Tower, scheduled to open this fall, is the newest skyscraper on the Warsaw skyline and will bring 34,000 square meters of net rentable class-A office space to the market in addition to 4,700 square meters of retail space. Assuming an average $40 a square meter for quality office space and retail space not in a prime location, rental income could reach $18.5 million a year, or a 15% rate of return based on a $120 million purchase price.
The 42-floor Daewoo tower purchase is part of Apollo Rida's strategy to buy a few existing real estate projects in Warsaw, Mitzner said.
"We move to take advantage of those who cannot hold in the longer term," Mitzner said. Daewoo's tower is one of a number of existing projects now under review by Apollo Rida, he said. Apollo will likely slim the list down to a couple of sites, Mitzner said.
Although office rents in Warsaw are among the highest in Europe, rates are falling as new space comes on line. That may signal some relief for tenants but developers will likely feel the squeeze on their rate of return on investment. Apollo Rida, with the deep pockets of the Apollo Real Estate Fund, can easily weather the storm, Mitzner said. The real estate fund is one of the largest U.S. property funds, he said.
Apollo Rida currently has $50 million in equity to invest in Poland which the company can use to leverage up to $200-$300 million for real estate investment, Mitzner said.
Until now Apollo Rida in Poland has been involved in greenfield projects, which include two existing office buildings, the Ericsson Center and PAR Tower, and the Renaissance Tower, now under construction. In addition, Rida is developing the Zeran Distribution Center, a 56,000 square meter warehousing scheme. It has also recently acquired warehouses from the Pollena chemical company in Warsaw's gmina Bialoleka with an eye to redevelop them into a 40,000 square meter modern warehousing project called Marywilska Distribution, Mitzner said.
Fall premieres
Three multiplex operators have been racing to be first on the market to debut their modern multiplex cinemas in Warsaw.
South Africa-based Ster Century this fall plans to open its theater in Promenada shopping mall; Multikino has its development in the residential Ursynow district; and the Silver Screen company plans to open in the Europlex building on ulica Pulawska, downtown not far from plac Unii Lubelskiej.
But as they vie for post position on the Warsaw market, they're also in a race to showcase their state-of-the-art wares during the premiere of the new "Star Wars: Episode I." But with the new Star Wars release slated to hit Poland in late September, the odds are the movie will debut before the pack of new cinemas.
"And what is the competition doing?" queried Jeff Georgino, managing director at Ster Century, when asked about his opening. Ster Century has yet to set a firm date for the opening of its multiplex in the Promenada shopping mall in the Praga Poludnie district. "It's likely to be in October," Georgino said.
To date, Warsaw has no modern multiplex cinema. In fact, the only modern cinema project nationwide is in Poznan and was developed by Multikino last summer.
To be the first to draw big crowds in the capital city is one thing. The other is the rush to sell tickets for an expected blockbuster like "Star Wars Episode I." It's a great opportunity for multiplex cinemas to start operations, operators said.
'We have been trying to make it just in time for Star Wars," said Aneta Bolesta, executive assistant of Ster Century. "But it looks like we will be unable to open on time."
Ster Century's 6,700 square meter cinema complex in the Promenada mall will have 13 screens and total seating capacity of 3,220. Ster Century also plans to debut in October a multiplex in Wroclaw that will have nine screens and 2,058 seats and comprise 4,500 square meters in a Geant suburban mall.
It also looks like Silver Screen, which plans to open an eight-screen, 1,500 seat cinema complex in the Europlex building, will also show up late for the Star Wars release. The Europlex cinema probably won't open until late October or early November, Silver Screen said.
Multikino, which is a joint venture between media conglomerate ITI and cinema operator UCI, plans to open a 12-screen theater with about 3,000 seats in Ursynow on the end of September or early October, said Aldona Szostakowska, managing director at Multikino.
On the move
l Sean Briggs, who earlier this summer said he was planning to leave his position as head of the retail agency at Healey & Baker, is going to Tri Idm, a local company owned by Canadian developer TrizecHahn, according to an industry source. Briggs, when contacted last week, confirmed his plan to leave Healey & Baker, but wouldn't say where and when he's going.
TrizecHahn, which claims to be Canada's largest real estate firm, earlier this year announced plans to invest $500 million to develop 30 to 50 shopping and entertainment centers in Central and Southern Europe. Poland is included in the plan, TrizecHahn said.
l Chris Vaughan, project manager at Chelverton International responsible for marketing of the Wisniowy Business Park in Warsaw, is also leaving his position. Vaughan will stay with Chelverton but is going back to the developer's home market, the United Kingdom, where he will concentrate on other projects. Graham Kilbane, who arrived in Warsaw in August, will take Vaughan's post to market the multi-phase office project near Okecie airport. Kilbane comes from London, where he worked for a real estate fund run by United Bank of Kuwait. Kilbane's major challenge here will be to manage pre-let leasing of Wisniowy Business Park building E, a 10,000 square meter office project to be completed in April next year, Kilbane said.
"We are now in discussion with several parties," he said. Wisniowy Business Park's phase one, including buildings A,B,C,D, are already completed. About 2,000 square meters out of a total 20,000 square meters of office space is still available in Wisniowy phase one.
l Kulczyk Tradex, a Poznan-based distributor of Volkswagen, Audi and Porsche cars, in early September moved its offices to new buildings at ul. Krancowa 44, in the suburb of Poznan. Kulczyk Tradex, which so far had been occupying leased offices on ulica Dziadoszanska in the same area of Poznan, decided to build its own offices because the company had outgrown existing space, said Alicja Florek, the firm's public relation manager. Florek would not give information on construction cost and size of the firm's new office site, but said more details would be available after when the building opens next month.
Apollo Rida has had talks with owners of the Daewoo tower, said Mitzner, who would not comment further on the negotiations. Developer Dae-Pol's price tag for the Warsaw Trade Tower is $120 million, according to Dae-Pol, a joint venture owned by Daewoo (96%) and Polmot (4%).
Preliminary negotiations between Apollo Rida and building owners took place last month in New York and are ongoing, according to sources close to the deal. A sale could be completed in coming weeks, the sources added.
Daewoo officials were not available to comment on the negotiations.
Development of the tower is majority financed through an $80 million loan from BRE Bank, according to Dae-Pol. Apollo Rida is prepared to take over the building's debt obligation, sources said.
The Warsaw Trade Tower, scheduled to open this fall, is the newest skyscraper on the Warsaw skyline and will bring 34,000 square meters of net rentable class-A office space to the market in addition to 4,700 square meters of retail space. Assuming an average $40 a square meter for quality office space and retail space not in a prime location, rental income could reach $18.5 million a year, or a 15% rate of return based on a $120 million purchase price.
The 42-floor Daewoo tower purchase is part of Apollo Rida's strategy to buy a few existing real estate projects in Warsaw, Mitzner said.
"We move to take advantage of those who cannot hold in the longer term," Mitzner said. Daewoo's tower is one of a number of existing projects now under review by Apollo Rida, he said. Apollo will likely slim the list down to a couple of sites, Mitzner said.
Although office rents in Warsaw are among the highest in Europe, rates are falling as new space comes on line. That may signal some relief for tenants but developers will likely feel the squeeze on their rate of return on investment. Apollo Rida, with the deep pockets of the Apollo Real Estate Fund, can easily weather the storm, Mitzner said. The real estate fund is one of the largest U.S. property funds, he said.
Apollo Rida currently has $50 million in equity to invest in Poland which the company can use to leverage up to $200-$300 million for real estate investment, Mitzner said.
Until now Apollo Rida in Poland has been involved in greenfield projects, which include two existing office buildings, the Ericsson Center and PAR Tower, and the Renaissance Tower, now under construction. In addition, Rida is developing the Zeran Distribution Center, a 56,000 square meter warehousing scheme. It has also recently acquired warehouses from the Pollena chemical company in Warsaw's gmina Bialoleka with an eye to redevelop them into a 40,000 square meter modern warehousing project called Marywilska Distribution, Mitzner said.
Fall premieres
Three multiplex operators have been racing to be first on the market to debut their modern multiplex cinemas in Warsaw.
South Africa-based Ster Century this fall plans to open its theater in Promenada shopping mall; Multikino has its development in the residential Ursynow district; and the Silver Screen company plans to open in the Europlex building on ulica Pulawska, downtown not far from plac Unii Lubelskiej.
But as they vie for post position on the Warsaw market, they're also in a race to showcase their state-of-the-art wares during the premiere of the new "Star Wars: Episode I." But with the new Star Wars release slated to hit Poland in late September, the odds are the movie will debut before the pack of new cinemas.
"And what is the competition doing?" queried Jeff Georgino, managing director at Ster Century, when asked about his opening. Ster Century has yet to set a firm date for the opening of its multiplex in the Promenada shopping mall in the Praga Poludnie district. "It's likely to be in October," Georgino said.
To date, Warsaw has no modern multiplex cinema. In fact, the only modern cinema project nationwide is in Poznan and was developed by Multikino last summer.
To be the first to draw big crowds in the capital city is one thing. The other is the rush to sell tickets for an expected blockbuster like "Star Wars Episode I." It's a great opportunity for multiplex cinemas to start operations, operators said.
'We have been trying to make it just in time for Star Wars," said Aneta Bolesta, executive assistant of Ster Century. "But it looks like we will be unable to open on time."
Ster Century's 6,700 square meter cinema complex in the Promenada mall will have 13 screens and total seating capacity of 3,220. Ster Century also plans to debut in October a multiplex in Wroclaw that will have nine screens and 2,058 seats and comprise 4,500 square meters in a Geant suburban mall.
It also looks like Silver Screen, which plans to open an eight-screen, 1,500 seat cinema complex in the Europlex building, will also show up late for the Star Wars release. The Europlex cinema probably won't open until late October or early November, Silver Screen said.
Multikino, which is a joint venture between media conglomerate ITI and cinema operator UCI, plans to open a 12-screen theater with about 3,000 seats in Ursynow on the end of September or early October, said Aldona Szostakowska, managing director at Multikino.
On the move
l Sean Briggs, who earlier this summer said he was planning to leave his position as head of the retail agency at Healey & Baker, is going to Tri Idm, a local company owned by Canadian developer TrizecHahn, according to an industry source. Briggs, when contacted last week, confirmed his plan to leave Healey & Baker, but wouldn't say where and when he's going.
TrizecHahn, which claims to be Canada's largest real estate firm, earlier this year announced plans to invest $500 million to develop 30 to 50 shopping and entertainment centers in Central and Southern Europe. Poland is included in the plan, TrizecHahn said.
l Chris Vaughan, project manager at Chelverton International responsible for marketing of the Wisniowy Business Park in Warsaw, is also leaving his position. Vaughan will stay with Chelverton but is going back to the developer's home market, the United Kingdom, where he will concentrate on other projects. Graham Kilbane, who arrived in Warsaw in August, will take Vaughan's post to market the multi-phase office project near Okecie airport. Kilbane comes from London, where he worked for a real estate fund run by United Bank of Kuwait. Kilbane's major challenge here will be to manage pre-let leasing of Wisniowy Business Park building E, a 10,000 square meter office project to be completed in April next year, Kilbane said.
"We are now in discussion with several parties," he said. Wisniowy Business Park's phase one, including buildings A,B,C,D, are already completed. About 2,000 square meters out of a total 20,000 square meters of office space is still available in Wisniowy phase one.
l Kulczyk Tradex, a Poznan-based distributor of Volkswagen, Audi and Porsche cars, in early September moved its offices to new buildings at ul. Krancowa 44, in the suburb of Poznan. Kulczyk Tradex, which so far had been occupying leased offices on ulica Dziadoszanska in the same area of Poznan, decided to build its own offices because the company had outgrown existing space, said Alicja Florek, the firm's public relation manager. Florek would not give information on construction cost and size of the firm's new office site, but said more details would be available after when the building opens next month.
