Multiplex racers gain speed with openings, ground-breakings
The cinema center in Poznan, which is 5,000 square meters in size, took a year to build at a cost of $11 million. In addition to eight screens and seats for nearly 2,300 theater goers, the complex will also host a restaurant, bar, cafe and shop, said Agnieszka Siennicka, responsible for promotion and marketing in Multikino.
The Poznan theater complex is said to be the only state-of-the-art multiplex yet to open in Poland. Although, the Femina in Warsaw could be called a multiplex based on number of theaters, those in the industry said it is not of the same standard as new, modern centers planned around the country.
With the opening of the first multiplex, Multikino, which is a joint venture between media company ITI and U.K-based United Cinemas International (UCI), is ready to move on its second. The company last week broke ground for a multiplex in Warsaw's Ursynow district. The nine-screen theater project will consist of 16,000 square meters and will host a pub and video store in addition to the same facilities that are in the Poznan center, Siennicka said. Multikino expects to invest at least $15 million in the project, she added. Multikino is looking to develop 10 cinemas centers around Poland, including two in Warsaw by the end of 2000, Siennicka said.
Next up
While Multikino breaks ground on its second multiplex, Portico Development is getting ready to start construction on its first project in Gdynia. The company is currently working on infrastructure around its site near the harbor and will start building in August, said Vinton Frost, Portico CEO.
Portico is currently preparing to pick from among two short-listed construction companies for the $17 million project, he added. The center will consist of an eight-screen multiplex, 8,000 square meters of space for shops, restaurants and cafes and parking for about 400 cars.
But Gdynia isn't the only Baltic location Portico is pursuing for a multiplex-retail center. The company recently won a tender for a 7,700 square-meter site in the center of Gdansk, between that city's main train station and the Old Town.
Progress on the site could be delayed, however, by protests from the other bidder for the site, Echo Investment. The publicly traded development company protested Portico's victory in the tender to the city.
That protest has been rejected by the city, said Roman Sebastyanski, head of the city's real estate promotion department. And Frost said Portico now has 30 days to sign a deed to purchase the property.
But Echo is appealing the city's decision further, said Michal Kubicki, investment director with Echo. The company is arguing that the price Portico first presented for the site was lower than its bid. But Portico was allowed to change its price later in the tender process, Kubicki charged.
Frost said Portico did come in with a second, higher price, but "that's because we stated in our tender document that we would be willing to negotiate a higher price and they didn't." He added that the tender committee also favored Portico's bid because of the company's project in Gdynia and the cinema-retail concept it is proposing. "That was more of a function than price," Frost said.
Even if its appeal is rejected, Echo said it plans to keep butting heads with Portico in Gdansk. If it doesn't get that site, it will look for another. "This is not the last location for a multiplex cinema in Gdansk," Kubicki said. Echo is cooperating with Australia-based Hoyts Cinemas to build multiplexes. Like Multikino, it too wants to develop 10 cinemas around Poland.
Falling rates
There is much debate about how the wave of office space expected to come onto the Warsaw market over the next two years will affect rental prices. For every person who believes the new supply will result in price reductions, there's another who argues the market will hold.
But according to a report by Healey & Baker, the answer already started to unfold in 1997 with rental prices falling in the capital by more than 11%. The flip side for developers is that despite the decline, rates remain well above those in neighboring capitals such as Prague and Budapest.
The report, compiled in March but only released to the press earlier this month, found that in 1997 the annual total cost to rent one square meter of Class A office space in Warsaw fell to $581, an 11% drop from the previous year.
The reason for the drop was obvious: new space on the market. "The Warsaw city center saw a decrease in prime rent due to the space now coming forward," Healey & Baker said in the report.
Warsaw rents still outpace Prague at $436, or Budapest at $305. The capital is cheaper than its neighbors to the east, though, with annual rents in Moscow hitting $915 and Kiev $756. But the bad news is that those letting space in Warsaw don't get as much bang for their buck as do those renting space in Budapest and Prague. In Warsaw, costs such as property taxes and service charges including utilities, account for 17.3% of the total rent paid. But in Budapest these costs account for only 16.3% for rent and in Prague they are just 11.2%, according to the report.
The downward price trend seen in Warsaw isn't being replicated in other Polish cities, though. The report said that Szczecin and lodz both saw rates increase 33%. Of course, larger increases could also be because the cities are coming from lower bases - they are the cheapest in Poland with net, annual rental prices (excluding taxes) of $240. Katowice and Poznan saw rents increase by 25% in 1997 to $300 on a net (excluding taxes) annual basis.
Growth in rental rates seemed to be directly related to the level of rents. Krakow and Wroclaw, the most expensive cities outside Warsaw, saw flat growth. Net annual rents ran at $360 in Krakow and $324 in Wroclaw, according to Healey & Baker's report.
Logistic start-up
BOC Distribution Services (BOC DS) announced last week that it will become the first tenant to move into the Diamond Business Park, a more than 100,000-square-meter light industrial complex on the southwestern outskirts of Warsaw.
U.K.-based BOC, which specializes in food products distribution for retailers, has operated since July 6 out of 5,500 square meters at the business park. The space consists of 5,000 square meters of warehouse area and 500 square meters of offices.
BOC has an option to lease an additional 5,000 square meters of office space from Diamond Business Park developer AIGLincoln. Taking up this additional space will depend, though, on whether BOC lands more clients, said Piotr Polak, general manager of BOC DS in Poland.
Currently, the company's main customer is Tricon, the operator of Pizza Hut, KFC and Taco Bell restaurants. Tricon products occupy 50% of BOC's warehouse space in Diamond Business Park, Polak said
But Diamond Business Park, in which it plans to invest $7 million, isn't the only expansion point for BOC. It also expects over the next five years to open five more distribution centers around the country.
Stephan Kirkland, david Reilly, contributed to this story.
The Poznan theater complex is said to be the only state-of-the-art multiplex yet to open in Poland. Although, the Femina in Warsaw could be called a multiplex based on number of theaters, those in the industry said it is not of the same standard as new, modern centers planned around the country.
With the opening of the first multiplex, Multikino, which is a joint venture between media company ITI and U.K-based United Cinemas International (UCI), is ready to move on its second. The company last week broke ground for a multiplex in Warsaw's Ursynow district. The nine-screen theater project will consist of 16,000 square meters and will host a pub and video store in addition to the same facilities that are in the Poznan center, Siennicka said. Multikino expects to invest at least $15 million in the project, she added. Multikino is looking to develop 10 cinemas centers around Poland, including two in Warsaw by the end of 2000, Siennicka said.
Next up
While Multikino breaks ground on its second multiplex, Portico Development is getting ready to start construction on its first project in Gdynia. The company is currently working on infrastructure around its site near the harbor and will start building in August, said Vinton Frost, Portico CEO.
Portico is currently preparing to pick from among two short-listed construction companies for the $17 million project, he added. The center will consist of an eight-screen multiplex, 8,000 square meters of space for shops, restaurants and cafes and parking for about 400 cars.
But Gdynia isn't the only Baltic location Portico is pursuing for a multiplex-retail center. The company recently won a tender for a 7,700 square-meter site in the center of Gdansk, between that city's main train station and the Old Town.
Progress on the site could be delayed, however, by protests from the other bidder for the site, Echo Investment. The publicly traded development company protested Portico's victory in the tender to the city.
That protest has been rejected by the city, said Roman Sebastyanski, head of the city's real estate promotion department. And Frost said Portico now has 30 days to sign a deed to purchase the property.
But Echo is appealing the city's decision further, said Michal Kubicki, investment director with Echo. The company is arguing that the price Portico first presented for the site was lower than its bid. But Portico was allowed to change its price later in the tender process, Kubicki charged.
Frost said Portico did come in with a second, higher price, but "that's because we stated in our tender document that we would be willing to negotiate a higher price and they didn't." He added that the tender committee also favored Portico's bid because of the company's project in Gdynia and the cinema-retail concept it is proposing. "That was more of a function than price," Frost said.
Even if its appeal is rejected, Echo said it plans to keep butting heads with Portico in Gdansk. If it doesn't get that site, it will look for another. "This is not the last location for a multiplex cinema in Gdansk," Kubicki said. Echo is cooperating with Australia-based Hoyts Cinemas to build multiplexes. Like Multikino, it too wants to develop 10 cinemas around Poland.
Falling rates
There is much debate about how the wave of office space expected to come onto the Warsaw market over the next two years will affect rental prices. For every person who believes the new supply will result in price reductions, there's another who argues the market will hold.
But according to a report by Healey & Baker, the answer already started to unfold in 1997 with rental prices falling in the capital by more than 11%. The flip side for developers is that despite the decline, rates remain well above those in neighboring capitals such as Prague and Budapest.
The report, compiled in March but only released to the press earlier this month, found that in 1997 the annual total cost to rent one square meter of Class A office space in Warsaw fell to $581, an 11% drop from the previous year.
The reason for the drop was obvious: new space on the market. "The Warsaw city center saw a decrease in prime rent due to the space now coming forward," Healey & Baker said in the report.
Warsaw rents still outpace Prague at $436, or Budapest at $305. The capital is cheaper than its neighbors to the east, though, with annual rents in Moscow hitting $915 and Kiev $756. But the bad news is that those letting space in Warsaw don't get as much bang for their buck as do those renting space in Budapest and Prague. In Warsaw, costs such as property taxes and service charges including utilities, account for 17.3% of the total rent paid. But in Budapest these costs account for only 16.3% for rent and in Prague they are just 11.2%, according to the report.
The downward price trend seen in Warsaw isn't being replicated in other Polish cities, though. The report said that Szczecin and lodz both saw rates increase 33%. Of course, larger increases could also be because the cities are coming from lower bases - they are the cheapest in Poland with net, annual rental prices (excluding taxes) of $240. Katowice and Poznan saw rents increase by 25% in 1997 to $300 on a net (excluding taxes) annual basis.
Growth in rental rates seemed to be directly related to the level of rents. Krakow and Wroclaw, the most expensive cities outside Warsaw, saw flat growth. Net annual rents ran at $360 in Krakow and $324 in Wroclaw, according to Healey & Baker's report.
Logistic start-up
BOC Distribution Services (BOC DS) announced last week that it will become the first tenant to move into the Diamond Business Park, a more than 100,000-square-meter light industrial complex on the southwestern outskirts of Warsaw.
U.K.-based BOC, which specializes in food products distribution for retailers, has operated since July 6 out of 5,500 square meters at the business park. The space consists of 5,000 square meters of warehouse area and 500 square meters of offices.
BOC has an option to lease an additional 5,000 square meters of office space from Diamond Business Park developer AIGLincoln. Taking up this additional space will depend, though, on whether BOC lands more clients, said Piotr Polak, general manager of BOC DS in Poland.
Currently, the company's main customer is Tricon, the operator of Pizza Hut, KFC and Taco Bell restaurants. Tricon products occupy 50% of BOC's warehouse space in Diamond Business Park, Polak said
But Diamond Business Park, in which it plans to invest $7 million, isn't the only expansion point for BOC. It also expects over the next five years to open five more distribution centers around the country.
Stephan Kirkland, david Reilly, contributed to this story.
