Two developers vie for discount factory outlet partner
Two developers have chosen the same partner to build a factory outlet shopping center near Warsaw that will primarily sell discounted fashions from last season.
Both developers Centrum Mody Warszawa and Liebrecht & Wood said they intend to construct their outlet with Scotland-based Morrison, a company known for running factory outlet centers. The catch is that Morrison plans to build only one center, said David Watt, Morrison's spokesman in Edinburgh. "We are looking at couple of opportunities near Warsaw. We hope to make an announcement in the summer," said Watt, who refused to comment further.
Centrum Mody Warszawa and Liebrecht & Wood both said that there is no room for two such developments. "There will be only one," said Patrick Van Den Bossche, managing director of Belgium-based Liebrecht & Wood. The firm said it has signed a contract with Morrison on a 50-50 joint venture to develop a 20,000-square-meter factory outlet shopping center in the town of Piaseczno, south of Warsaw.
But Centrum Mody, a Polish-Italian company, is convinced that it will reach an agreement with Morrison within the month to develop a 20,000-square-meter factory outlet center in Nadarzyn, also south of Warsaw. "We are 100% sure that they (Morrison) will select one location," said Violetta Malcher, president of Centrum Mody Warszawa.
Both developers are eager to work with Morrison, the self-proclaimed European leader in factory outlet centers. Factory outlet centers, which are not yet present in Poland, specialize in the sale of discounted well-known fashion brands from previous seasons. The concept has worked well in both the United States and U.K. "In Europe it is starting to take off," Van Den Bossche said.
In vying for Morrison, both developers bring to the table similar locations on busy roads south of Warsaw. Liebrecht & Wood, which has so far focused on business park development in Poland, has a 14-hectare site at ulica Pulawska in Piaseczno. The developer plans to use eight hectares of the site, formerly owned by a TV production company, for the factory outlet center and the remaining six hectares for a business park.
Centrum Mody has a 13-hectare site that runs along the Trasa Katowicka highway next to its existing shopping center. Centrum Mody's existing center has been selling clothes from local producers at a 40-90% discount, Malcher said. If the company manages to attract Morrison to develop the new factory outlet center, the Scottish group could supply Centrum Mody with well-known international fashions, she said.
Malcher said Centrum Mody wants to develop a $20 million shopping center jointly with Morrison and hopes to conclude an agreement within a month. The agreement would pave the way for the project to be completed by the end of next year.
Liebrecht & Wood's Van Den Bossche wouldn't comment on Centrum Mody's plans but said that his company has been in talks with Morrison since late 1998 and has already reached an agreement on the project. "I know what we have," he said.
Liebrecht & Wood plans to apply for a construction permit for its Piaseczno project later this year and to start construction early next year. Completion is targeted for the end of 2001. Liebrecht & Wood will manage the development of the center, while Morrison will take care of the retail side, Van Den Bossche said.
Centrum Gieldowe delayed
The Centrum Gieldowe office building, future headquarters for the Warsaw Stock Exchange (WSE), will officially open in late April, two months later than initially planned, according to the agency representing the building.
"There is a small delay," said Leszek Gietko, head of Unikat's office agency. The building is located at ulica Ksiazaca between the current WSE headquarters and the Holland Park building occupied by ING Group.
Despite the delay, the 30,000-square-meter building is already fully leased, Gietko said. "It's out of the market now," he added.
The Centrum Gieldowe building developed by a company of the same name owned by the WSE, Bank Handlowy and the National Depository for Securities will mostly house operations for the investors. All but a 200-square-meter unit of the remaining 6,000 square meters offered for lease has been taken, and several tenants are said to be interested in that space.
Gietko said Centrum Gieldowe's three tenants include two banks and a law firm, but refused disclose names or details regarding the space the tenants have taken. Unofficial sources said the tenants include HSBC Bank, Bank Komunalny w Gdyni and the law firm Hunton & Williams. Hunton & Williams managing partner Lejb Fogelman has confirmed the law firm intends to move but wouldn't comment further.
Centrum Gieldowe was fully leased ahead of completion despite being the most expensive office building in Warsaw, Unikat's Gietko said. "It's the only building with rents above $40 (per square meter a month)," he said.
Gietko admitted that some potential tenants decided not to lease space because of the steep rate, but added that others were attracted by the prestige of being in the same building as the WSE. "That's the eye of the cyclone," he said.
New fund eyes region
U.K.-based Europa Fund, which recently closed a $1 billion real estate fund, will look to invest up to 30% of its assets in properties throughout Central Europe including Poland over the next three years, according to a statement issued by the fund's manager, Europa Capital Partners.
The Europa Fund has appointed Warsaw-based George Mula to represent it in Poland.
"Among Central European markets, Poland is likely to attract more investment that other countries simple because of its size," said Noel Manns, director of Europa Capital Partners.
"In terms of allocation, Poland would be a priority," Manns said. "There are six big countries in Europe. Poland will, I'm confident, become one of Big Six."
Manns said Europa Fund plans to conclude its first deal in Poland later this year. The fund is unlikely to acquire office buildings in Warsaw, but rather will look for offices outside the capital as well as for retail, warehousing and residential properties across Poland, Manns said.
Eying Henry Butcher?
Henry Butcher Poland, a Warsaw-based real estate agency, could announce an alliance with an international real estate agency network in the coming days, some property sources said.
The property sources said Henry Butcher's possible strategic partner is U.K.-based CB Richard Ellis. "I'm surprised that it (Henry Butcher's cooperation with CB Richard Ellis) wasn't announced at MIPIM," said Pierre Couderq, owner of the Couderq & Partners real estate agency in Warsaw. MIPIM is the real estate fair held in Cannes, France every year in March.
Henry Butcher Poland was formerly part of U.K.-based HBSV's international real estate agency network. When HBSV went into receivership earlier this year, it sold Henry Butcher to three Warsaw-based employees: Brian Burgess, Nigel Wade and John Palmer.
"We are in the process of buying the company," said Brian Burgess, director of Henry Butcher Poland.
Without its U.K. parent company, Henry Butcher Poland could be looking to become part of a big agency with access to international clients and a network of offices around Europe. "We can see the advantages of it," Burgess said. He refused, however, to comment on Henry Butcher's partnership plans. "I have to keep quiet," he added.
Property sources in Warsaw said Henry Butcher could be an attractive target for CB Richard Ellis, which has in the past done business in Poland through its association with the Warsaw-based agency Prime Property. "We no longer cooperate with (Prime Property)," said Ewen Hill, the Budapest-based director of Central Europe for CB Richard Ellis.
Hill confirmed CB Richard Ellis is interested in building their presence in Poland but wouldn't give further details. "I have no comment to make," Hill said.
In brief:
U.K.-based Knight Frank agency has entered into a formal strategic alliance with U.S. real estate consulting firm Grubb & Ellis.
A press release issued by Knight Frank's head office in London stated the alliance "will combine the collective resources of more than 200 offices throughout 27 countries, employing approximately 7,000 people" and will have a combined annual turnover of nearly $550 million. Knight Frank accounts for $200 million of that. Grubb & Ellis' existing operations in Europe, which include its London and Brussels offices, will be integrated with those of Knight Frank, the press release said.
