Dutch firm to renovate mansion while tenants sit tight

The historic buildings conservator - the individual who lists Poland's historic mansions and monuments - has given the go-ahead to Netherlands-based developer Von der Heyden Group to add an extra floor and renovate the facade of a 110-year-old mansion on ulica Wilcza.

Von der Heyden bought the 3,000 square-meter occupied building last year with the intention of turning it into a high-end residential project. The Dutch firm would not say who it purchased the mansion from or how much it paid for it.

"We plan to renovate the facade and add a floor with four apartments with 500 square meters on the roof, which blends in with the original architecture," said Sven von der Heyden, managing director of the Von der Heyden Group.

But the company's plans have been delayed while Von der Heyden tries to strike a deal with existing tenants. "Due to the unfavorable legal environment, it is difficult to cut a deal with a tenant to leave a flat," von der Heyden said. He added that the rental income the developer receives does not cover the building's operating costs.

Because most residential property in downtown Warsaw is owned by Gmina Centrum or cooperatives, older buildings tend to be in poor condition. As a result, developers often encounter obstacles when buying old buildings, which are usually inhabited by long-term residents. "Unfortunately, this is reality in Warsaw's real estate market in terms of historic buildings," von der Heyden said. But he said there is a strong demand for them.

Hines hires consultancy

Hines, the U.S.-based developer, hired the U.K.'s Healey & Baker property consultancy as the main agency to market the $110-million Metropolitan project on Warsaw's plac Piłsudskiego last month. All major real estate agencies have been asked to submit bids.

"We wanted to find a consultancy that has a long track record and experience with large projects," said Mieczysław Godzisz, general director of Hines Polska. Alan Colquhoun, managing director of DTZ Zadelhoff Tie Leung, said his company was also invited to submit a bid. "At the moment we have a potential conflict of interest as we are the leading agent for Skanska (Atrium Centrum project)," he said. He added that this may have affected Hines' decision.

British architect Sir Norman Foster designed the building, which is scheduled for completion in summer 2003. The scheme will have 32,000 square meters of office space and 4,000 square meters of retail space. The two-level underground car parking lot will have room for 400 vehicles.

Godzisz would not disclose the asking rent price, but according to property sources it should be more than $30 per square meter. "The market will ultimately decide, but it seems to be an appropriate asking level at the moment," Colquhoun said.

The developer said the firm did not have to rush to find tenants as financing for the project was already in place. Most property insiders agree the project should prove a success.

In brief:

Anglo-American consultancy Jones Lang LaSalle helped seal leasing deals for the following companies in the past two months:

n Finplus, a Franco-Dutch financial services provider for retailers. The company leased 1,440 square meters on Brama Zachodnia's fourth floor, located on Aleje Jerozolimskie. Finplus will move into the 22,000 square-meter project, developed by Sweden's NCC, in January 2002.

n PharmaNet Services, a global drug development company, rented 273 square meters on the seventh floor of the IPC Business Centre on ulica Koszykowa 54 in Warsaw.

n Pharmacia Polska sub-leased 485 square meters of office space to Swedish law firm Magnusson Wahlin in Biblioteka Uniwersytetu Warszawskiego (Warsaw's University Library) on ulica Dobra in Warsaw's Powiśle district.

Ania Staniszewska