Elektrim considers selling its Port Praski project
Industrial conglomerate Elektrim is considering divesting itself of the planned Port Praski development in central Warsaw.
"We will announce whether to undertake the project or what is more likely not to undertake it," said Ewa Bojar, Elektrim's spokeswoman. Bojar said the announcement will be made in the autumn when the o40 million Swietokrzyski bridge over the Wisla river is completed.
The development of the bridge was part of a 1998 swap deal between Elektrim and Warsaw's Gmina Centrum. According to the terms of the deal, Elektrim agreed to finance 51% of the vehicle bridge, which will replace the temporary Syreny bridge, in return for ownership of 40 hectares of land in Port Praski, a harbor area on the east bank of the Wisla facing the Old Town.
The agreement would potentially allow Elektrim to develop up to 900,000 square meters of office, retail and residential space in Port Praski.
Elektrim has already invested zl. 65.4 million ($14.5 million) in the bridge project, but real estate development is not part of its core business. Last year Elektrim announced it would focus its strategy on telecoms, but did not at the time say whether plans for Port Praski had changed.
Bojar said that if the company decided against the project, the property would be sold.
Port Praski could be an attractive proposition for many developers because it constitutes a large undeveloped area in the center of the city. But Gmina Centrum has not approved the size of the Port Praski area plans, which is a key condition for investors, said Adrian Gorecki, managing director of Property Project, the company Elektrim hired to draw up Port Praski's development plan. "We are waiting for the approval of the plan," Gorecki said. "It's taking longer than we expected."
Gmina Centrum has already presented tentative development guidelines that would allow for the cultivation of 17 out of Port Praski's 40 hectares, or 900,000 square meters of commercial and residential space. "This is in line with our expectations," Gorecki said.
But the approval procedure allows the public to voice complaints about the project and consequently to amend plans. According to Gmina Centrum, about 800 protests and amendments have been lodged with regard to the Port Praski plan. The gmina will decide by the end of July whether to reject the public's complaints and amendments or to include them in the plan.
To formalize Elektrim's plans, all work has to be approved by the gmina's council, whose decision is expected later this year at the earliest, Gorecki said.
Ikea eyeing more outlets
Swedish retailer and furniture maker Ikea is looking to invest $100 million over the next two years to expand the number of its local outlets from six to nine, the company announced during the topping-out ceremony of its zl. 150 million ($33 million) distribution facility in central Poland.
Ikea has already invested $200 million in the country to develop six outlets, including two in Warsaw and one each in Poznan, Wroclaw, Gdansk and Katowice.
The new investment will be directed toward the completion of distribution centers with a total area of 62,000 square meters in Jarosty, a village near Piotrkow Trybunalski, as well as three new retail outlets in the capital, Lodz and Katowice.
Ikea wouldn't comment further on the locations, but company officials said earlier that outlets in Warsaw would be located in the northeastern district of Targowek, where the company plans to develop a 150,000 square-meter shopping center (see the Business Journal, Feb. 14-20, 2000).
The growing number of retail outlets across the country and in the region has prompted Ikea to develop the Jarosty distribution center. The project is the first of its kind for Ikea's Central European operations. Ikea has 14 distribution centers across Western Europe and Scandinavia.
The Jarosty development will cover 40 hectares and is slated for completion in early 2001.
The center will service the firm's stores in Poland, the Czech Republic, Russia, Slovakia and Hungary, the company said. Ikea plans to have 19 stores in those countries in three years. It also has 26 outlets in Germany, 14 in the United States, 13 in Sweden and 10 in the U.K., the company said.
Baltic resort
hopes to lure investors
Authorities in the Baltic port town of Ustka have agreed to begin marketing 181 hectares of land to attract residential and leisure investors.
"We want to benefit from Ustka's natural assets," said Jerzy Dorosz, president of Beta Styl, a Slupsk-based company hired to manage the marketing and investment project.
Ustka hopes to draw investment to the undeveloped Przewloka neighborhood, one kilometer from the beach and two kilometers east of the town center.
In the 1970s, the central government planned to enlarge the small fishery port town and develop a residential neighborhood with multi-story buildings in Przewloka, Dorosz said. But as the country's market economy developed in the late 1980s no investor was willing to put money into expanding the Ustka port and the Przewloka area remained undeveloped.
Ustka's authorities last month agreed to invest in area infrastructure, which is equally owned by city and private owners, in order to entice residential and leisure developers, Dorosz said. As part of the investment plan, interested developers will be able to acquire construction permits and start building as quickly as two weeks after applying, said Dorosz, who wouldn't reveal how much Ustka planned to spend on its infrastructure development.
Ustka plans to offer land in Przewloka for zl. 85 per square meter, with the smallest lots at 1,000 square meters, Dorosz said. Land near Baltic beaches typically runs zl. 55-zl. 100 per square meter, he added.
Ustka is located in the depressed Slupsk region, but its high unemployment figures of up to 21% have not stopped town authorities from planning to sell as many as 1,350 buildings in Przewloka during the next five years, Dorosz said.
Dorosz said he expects that 20% of Przewloka property customers will be local buyers from the Slupsk and Ustka areas. Beta Styl's marketing plan predicts that the remaining 80% will come from other parts of the country and abroad.
Beta Styl expects area investors to be individual home buyers and businesses looking to build hotels, restaurants and water parks along the coast, Dorosz said.
