Retail giants clash in small southern town
By : Anna Staniszewska
Two huge competing retail projects, Centrum Mostowa and Sarni Stok, have started touting for tenants in Bielsko-Biala, in southern Poland, ahead of their joint November completion dates.
Privately owned developer Bielsko-Biala Business Center started construction of the $30 million ($7.1 million), 33,000 square-meter Centrum Mostowa in December last year. The project, near the city's historic market square, will include a 3,000 square-meter Hypernova supermarket, a 75-store shopping gallery, a seven-screen movie theater operated by Echo Cinemas, a bowling and entertainment center, a health and fitness club and a food court.
"Centrum Mostowa has a better location and is much more than simply a hypermarket scheme with a small retail gallery in a fringe location," said Mark Gamble, retail director at Anglo-Dutch DTZ Zadelhoff Tie Leung. He said the project is already 60% leased. Asking rents range from E18-E32 per square meter, depending on the size of the space rented.
Gamble said Centrum Mostowa's catchment area includes about 400,000 people. He said Bielsko-Biala is a good investment for retail projects, with the city's close proximity to the Czech Republic, Slovakia and Austria, and with local people's high purchasing power and the low unemployment rate.
France's Ahold is developing the 30,500 square-meter Sarni Stok project, which will house mainly large retail tenants. Ahold's Hypernova supermarket will take up 11,580 square meters, and the 31 other shops will take up 3,280 square meters. Units of more than 500 square meters, specializing in interior furnishing and household appliances, will cover 14,400 square meters.
Another 1,000 square meters will be set aside for restaurants and bars, with more space for a bowling alley. The rents at Sarni Stok will range from DM20-DM78 per square meter a month.
The development is already 61% occupied, according to the Anglo-American Jones Lang LaSalle (JLL) property consultancy. "We're not afraid of competition because we offer a different type of retail scheme," said Magdalena Frontczak, senior property negotiator at JLL.
Frontczak said Bielsko-Biala has room for three retail centers at most. Despite this, other supermarket chains such as France's Auchan and Geant and the U.K.'s Tesco are also looking to set up locally. But Frontczak said too many retail chains could lead to chronic oversupply. "It's risky to have too many retail centers in this region," she said. "You should remember that from Bielsko-Biala it's closer to Vienna than to Warsaw and customers have a better selection there."
Poznan reaches
saturation point
Jedynka Poznan has announced plans to create an investor group to finance the construction of Brama Poludnia, a B-class office building on Poznan's Wroclaw exit road. The cost of the 31,000 square-meter development is estimated at zl. 180 million ($42.9 million). The investor group will cover some 25% of the investment with bank loans funding the remaining 75%.
Jedynka Poznan already has its construction permit and perpetual usufruct deed for the plot. "Technically we are prepared to start the development, but we don't have enough funds," said Jan Wieczorkiewicz, president of Jedynka Poznan. If the group forms this year, construction work will start immediately and should be completed in 2003. "We hope that within the next two years the office market will go up again," Wieczorkiewicz said.
According to Jerzy Wysocki, head of the office department at U.K.-based Knight Frank Nieruchomosci, such a large office building could cause a shake-up on the Poznan market and reduce rents. "But the question is can Poznan can absorb such a big investment?" Wysocki said. "Winogrady Business Center, GTC's project, the second phase of Poznan Financial Centre and some smaller office developments will deliver a couple of thousand square meters to the Poznan market within the next two years," he said.
Announcements
n Polnord Dom, a subsidiary of Gdansk-based general contractor Polnord, completed Krolewski Trakt Apartamenty, a residential project on ulica Sikorskiego last month. It is the developer's first investment in Warsaw, worth an estimated zl. 50 million ($11.9 million). The 24,000 square-meter project includes three, six-to-13 story buildings. There will be 130 apartments, ranging in size from 38 to 186 square meters. Pricing will start at $900 per square meter. There are 40 residential units left. "We have proven that a developer out of Warsaw can compete with local firms, despite high land prices," said Krzysztof Daroszewski, president of Polnord Dom.
The company plans to expand its Warsaw operations and is talking to city authorities about another investment in Gmina Centrum, but company officials refused to reveal the location of the plot. Its plans are similar to those of Krolewski Trakt, though they focus on recreation. The development's value is estimated at zl. 20 million ($4.8 million).
n Nepentes, a Polish distributor of cosmetics and over-the-counter drugs, signed a five-year lease contract earlier this month. The company took 2,000 square meters at Millennium Logistic Park, located in Warsaw's suburban town of Pruszkow. Bel Properties' 38,000 square-meter warehouse consists of new and refurbished warehouse space. Bel Properties plans to expand to 140,000 square meters, out of which 55,000 will be refurbished. Asking rent for modern space is $5.50 per square meter, and $3 for refurbished space. The U.K.'s Healey & Baker and Poland's Maxon Nieruchomosci are acting as joint agents for the project.
