Platan Group cuts leases in bid to attract tenants
Platan Group announced late in May that it had scaled back leasing plans for its Centrum Milenium office project to beef up the building's poor occupancy rates.
The developers of the 26,000 square-meter structure, at the intersection of ulica Targowa and ulica Kijowska in Warsaw's Praga district, divided its second floor into units of 43 to 150 square meters each to attract clients looking for smaller offices and lease periods shorter than six months. Platan is eager to generate more interest in the building, which is still only 17% let since opening last October.
Centrum Milenium, which is marketed by Anglo-American firm Jones Lang LaSalle (JLL) and the U.K.-based King Sturge, will lease space on its second floor for $1,370-$3,536 per month for up to six months. The price of nearly $32 a square meter includes security and cleaning services and access to conference rooms and kitchen facilities.
"We would like to welcome tenants wanting to lease smaller spaces; those who are often rejected by big agencies," said Anna Fijalkowska, property consultant at Platan. Since the announcement, she said one deal had been signed and that three are being negotiated.
The building, which has 15,300 square meters of commercial space, including 10,700 of office and 4,600 square meters of retail space, lists as its tenants Bank Handlowy, Pizza Express San Marzano restaurant, Avant and Molex Premise Networks. "We want to be flexible and talk to both big tenants interested in leasing more than 500 square meters, as well as those that don't require that much space," Fijalkowska said. She added that the building has been slow to fill up because "big deals take time." The asking rents for larger clients is $17-$18 per square meter, she said.
In another strategy to draw tenants, Platan in September plans to operate a shuttle bus from Centrum Milenium to the Centrum metro station. Fijalkowska said the developer is counting on the service to help lure smaller tenants. "It should (spark interest in) the building," she said.
Alan Colquhoun, managing director of DTZ Zadelhoff Tie Leung, said that while he considered Centrum Milienium to be a good investment, the relatively low demand for offices in the Praga area is a problem. "If they are considering shorter terms and smaller tenants, they are merely responding to the lower demand and taking a more flexible approach, which would seem like a good idea," he said. He added, however, that most tenants prefer to be on the west side of the Wisla River.
Ikea Targowek opens, Ikea on Aleje Jerozolimskie to close
Swedish retailer and furniture supplier Ikea is to open its third Warsaw store this week in the northeastern district of Targowek.
The 22,800 square-meter outlet, Ikea's eighth in Poland, cost about zl. 100 million ($25 million) and will feature a restaurant, a playground and a 1,400-car parking lot.
The Targowek store will be one of Ikea's biggest in Poland, second only to the 23,600 square-meter outlet opened in Katowice last year. By 2003, the Swedish operator plans to invest a further $100 million to enter the home-furnishing markets in Lodz, Bydgoszcz, Szczecin and Gliwice, and to modernize and expand the chain's existing operations. "The Polish market is still absorbant," said Jan Musiolik, general manager of Ikea in Poland. The company's Janki store, which is being expanded, is set to be completed by 2002.
By September, however, Ikea will close its centrally located Aleje Jerozolimskie store. "It's part of our strategy," Musiolik said. He added that despite customer nostalgia for the location, the company had decided to focus on its full-size outlets in Janki and Targowek.
Ikea buys its furniture locally from Polish manufacturers that use Swedish designs. "During the past year we have bought zl. 1.5 billion ($375 million) worth of materials from within the country," Musiolik said. Polish producers supply 30% of Ikea's stock.
Announcements
n Platan Park I became fully let in June. The newest lease contracts were signed with Polish outdoor-advertising companies Cursor, Galposter and ARZ Galicja, which rented 348, 309 and 140.6 square meters respectively. Platan Park I, located on Warsaw's ulica Poleczki, has 28,759 square meters of space, about half of which belongs to office tenants with the other half for warehouse space. MTV, DHL and Yamanouchi Pharma are tenants in the complex. JLL, which represented Platan Group during the project's first phase, will continue to act on the part of the investor during the second phase, Platan II, which is scheduled for completion in September.
n Knight Frank Nieruchomosci, a U.K.-based property consultancy, secured a 1,200-square-meter lease deal with German insurer Inter-Polska for the Optimus Tower. Asking rent in the 6,200 square-meter office building, located on Warsaw's ulica Marynarska, is $22 per square meter plus a $4.50 service charge. The building is 85% let.
n Knight Frank also concluded an 860-square-meter deal on ulica Widok 26. AmRest, the U.S.-based fast-food chain operator, sublet the space to the Archibald English language school for about $20 per square meter.
