Green light for Krakow's Nowe Miasto project
Rags to riches: The dilapidated surroundings of Krakóws main railway station will change dramatically when Tishman begins its Nowe Miasto project.
Tishman Speyer Properties got the go-ahead last month to purchase a 12-hectare plot in Krakow from Polish State Railways (PKP).
The deal, which had been pending approval by the Interior Ministry, moves the U.S.-based developer closer to realizing its plans to construct its $750-million "Nowe Miasto" project. While the terms of the deal have yet to be finalized, PKP is reportedly asking zl. 28 million ($6.7 million) for the site. Tishman is also looking to obtain permits to purchase other plots in the area, including those owned by Pekaes and Poczta Polska. The company hopes to finalize all land acquisition deals by autumn. "We hope to get all ownership issues sorted out this fall," said Katarzyna Deja, a Tishman spokeswoman. "It will take 24-30 months to complete (the first phase of the project) after we break ground." Since 1998, the company has spent $15 million on the venture.
The $300-million first stage of the project includes 80,000 square meters of retail and leisure space, and 22,000 square meters of class-A office space. Plans foresee the development of a four-star hotel with 240 rooms, a multi-screen cinema, sports facilities, and aboveground parking for 2,400 cars. The timetable for developing the second stage of the project depends on the success of the first one. "The market will dictate the demand," Deja said. Initial plans envision developing office, residential and hotel space at a cost of $450 million.
One of the major issues confronting the Nowe Miasto project is building adequate transport infrastructure. While the development is located in the center of Krakow near the main train station the investor and city authorities are working together to redesign roads and build parking lots. "It's all going to be integrated," Deja said. The city will cover most of the costs to build roads while Tishman's contribution to the infrastructure changes is still being negotiated. So far it has only agreed to pay for parking and access roads.
"It's a step forward, but it's still a dozen-year project," said Grzegorz Pekalski, marketing director at French developer Cefic. He said Tishman's Nowe Miasto project is one of the largest in Central Europe and that before it is completed the developer will likely face a myriad of obstacles by local authorities and state-owned companies that occupy the land. Other hiccups may include the Interior Ministry itself and the threat posed by complex transport solutions. "Things do not go smoothly if there are that many parties involved, it's super complicated," Pekalski said. At the same time, he said the project would have no problems finding tenants. "Every city would like such a center," he said.
Announcements
n Skanska Polska, Gmina Centrum, Portman Development and Starwood Hotels & Resorts Worldwide broke ground on a five-star hotel last month. The E79.5-million "The Westin Warsaw," located at the corner of Aleje Jana Pawla II and ulica Grzybowska, will have 366 rooms on 22 floors. It will also boast state-of-the-art conference facilities, a ballroom, a fitness club and several restaurants. Loans for the project were provided by the European Bank for Reconstruction and Development (EBRD) and Caisse des Depots et Consignations-IXIS. The hotel is scheduled to be completed by mid-2003.
n Logistics firm Cargoline Polska, a subsidiary of German Cargoline, leased 3,100 square meters of warehouse and 400 square meters of office space in Diamond Business Park Piaseczno. The company previously let 300 square meters of office space in Diamond Business Park Lodz. U.S.-based AIG/Lincoln is the developer of the warehouse complexes in Piaseczno, Lodz and Gliwice. The Piaseczno scheme covers 13 hectares. The first stage, totaling 9,300 square meters, was completed in 2000. The next stage will cover 9,300 square meters and is scheduled for completion by September. The Piaseczno complex will total 50,000 square meters.
n France-based Cefic's "Szczecin Turzyno" retail development in Szczecin is already 85% leased prior to its November opening. Among its tenants are France's Sephora and Promod and household appliances and equipment retailer EURO RTV/AGD. In Warsaw, Cefic has secured deals for 80% of its Centrum Wilenska, which is slotted for completion by next April.
