Trading FMCG for malls

Businessman Mariusz Świtalski plans to spend about zł.1 billion to invest in residential and commercial real estate, according to the Rzeczpospolita daily.

The founder and former owner of FMCG chains Biedronka, Eurocash and Żabka, Świtalski plans to build about 90 shopping centers in smaller cities and towns of Poland. Each center will host a Biedronka. Work on the development plans is most advanced for the towns of Goleniów, Wolsztyn, Szczecinek in western part of Poland and Świdnik in the eastern part of the country. Świtalski also wants to engage in residential investments.

The investment will be managed by Sowiniec Fundusz Inwestycyjny Zamknięty (SFIZ), an investment fund launched in 2007 by Świtalski i Synowie, which Świtalski owns.

SFIZ will fund the investment in cooperation with Raiffeisen Bank Polska, but there may be some other large international investor, according to Świtalski i Synowie representatives quoted by Rzeczpospolita.

Smaller cities and towns have been attracting a growing number of retailers, including industry giants, but according to Marek Dietl, a retail analyst at Simon-Kucher & Partners, this kind of investment in shopping centers in such places could prove risky. "Growing mobility and improving road infrastructure encourage people from smaller towns to go shopping to larger areas," he said.

Holding 35th place on Wprost's ranking of the richest Poles in 2007, Mariusz Świtalski began his career in the retail market in the late 1980s. His first large success was the company Elektromis, the owner of Biedronka discounts and Eurocash wholesalers which were sold to Portuguese Jeronimo Martins in the 1990s. Świtalski also founded the Żabka chain of convenience stores in 1998 and later sold it to Czech-Slovakian Penta Investments. All three chains are leaders in their segments.

Świtalski's reputation for success has been somewhat colored by allegations of tax misconduct and business irregularities but he has never been convicted of any wrongdoing.