"Property Watch": Apsys to launch Manufaktura project this autumn

French retail developer Apsys plans to break ground in September on Manufaktura, a multipurpose real estate located in Łódź, according to company President Maurice Bansay. The developer is hoping to revamp Fabryka Poznańskiego, a 19th-century textile factory, by the first quarter of 2004. The investment is expected to cost €200 million ($186 million), of which €120 million ($111.6 million) is to be covered by Apsys and the balance by major tenants, which include France's Geant, Poland's Multikino, Mango of Spain and RE Reserved, a Polish company. The venture, formerly dubbed "Nowy Świat" (New World), covers 27 hectares in downtown Łódź at the intersection of ulicas Zachodnia and Ogrodowa. Bansay said Manufaktura is already 45% leased. Despite optimistic claims, Michał Kubicki, vice president of PIA Piasecki Inwestycje is skeptical about the 45% figure. "I really doubt it, taking into account the high rent levels, exceeding €30 per square meter, and the ECE's project nearing completion, which has competitive rents," he said, referring to Germany's ECE Projektmanagement Galeria Łódzka, a 40,000-square-meter facility expected to open this fall.

City within a city Apsys's plans call for 150,000 square meters of gross lettable area (GLA) for modern retail, entertainment and leisure tenants. Because of the building's age, construction will be supervised by an architectural conservationist. "This is an exceptional project," Bansey said. "We want to revitalize this historical site and turn it into a lively place for people to relax, play, shop and have fun. But it will all be integrated." Retail tenants include hypermarket Geant (8,000 square meters) and 20 specialized anchor tenants such as Euro RTV/AGD and home decor retailer Decorador. There will also be 250 smaller retail outlets and parking for 3,500 cars. Entertainment facilities will include a nine-screen Multikino multiplex operator, a 24-lane bowling alley, a 2,000-square-meter disco and 20 restaurants and bars around the Old Town square. Apsys also wants to devote 50,000 square meters to the "Dynamix Center," which will host a roller-skating rink, a climbing wall, squash courts, a dance studio and playground. Additionally, the developer is hoping to contribute to local culture by refurbishing buildings for the Museum of Contemporary Art, the Museum of Science and Technology for Children and the Museum of Łódź History. Apsys is also looking to build a 10,000-square-meter Center for Fashion Promotion. A three-star, 200-room hotel is also planned. According to the firm's market research, 300,000 clients are expected to visit Manufaktura each week, translating into 12 million visitors a year.

"It's a massive project but they're an experienced developer and know what they're doing," said Sean Briggs, head of leasing and marketing at the Central European Retail Property Fund (CERPF). Still, the project could be a difficult one to market because of its complexity, according to a source who asked not to be named. "It's mammoth and complicated because of tenant mix, clients and delivery communications, as well as location, which already faces heavy traffic," Kubicki said. Łódź is also becoming more dense in terms of retail space. In addition to ECE's 40,000-square-meter project, Israeli's Plaza Centers is also planning to develop a site at the intersection of ulica Żeromskiego and Aleja Mickiewicza, bringing another 41,000 square meters of GLA.

Cornerstone at Westin Sweden's Skanska and U.S.-based Portman Development and Starwood Hotels & Resorts Worldwide, along with Warsaw's Gmina Centrum, will hold the cornerstone ceremony for the Westin hotel this week. The €79.5 million ($73.9 million) five-star development, located at the junction of Aleja Jana Pawła II and ulica Grzybowska, is financed through loans from the European Bank for Reconstruction and Development (EBRD) and France's Caisse des Depots et Consignations-IXIS (CDC). The 366-room Westin Hotels & Resorts will be managed by Starwood Hotels & Resorts Worldwide. The 22-story building will have conference rooms, a ballroom, swimming pool, fitness club and restaurant. Construction is slated for completion in mid-2003.

In brief: U.K.-based property consultancy Cushman & Wakefield Healey & Baker concluded 20,500 square meters of warehouse deals in the first five months of 2002: - Procter & Gamble, a U.S. household chemical products manufacturer and distributor, took 11,500 square meters in the Ursus Logistic Center; - Archive Management Solutions, a provider of professional document archiving services, leased 4,500 square meters in a warehouse facility in Reguły; - Textbook publisher Nowa Era will occupy 2,000 square meters in Ożarów Business Center; - North Coast, a foodstuffs distributor, leased 2,500 square meters in the Millennium Logistic Park.

U.S.-based GE Capital Golub Europe concluded the following deals last month: - Softlab, a Polish software producer leased 227 square meters in the zł. 40 million ($9.75 million) PGK Centrum II in Poznań, slated for completion in March 2003. - Hamburgische Landesbank's representative office took 120 square meters in the Warsaw Financial Center.