Von der Heyden in talks with U.S. family fund
The Von der Heyden Group, a German developer operating primarily in Poland, is in talks with U.S. real estate investment firm Harbert Management Corp. to create a Polish investment venture, said Sven von der Heyden, owner of the Von der Heyden Group.
"We're in the final stage of negotiations," he said. If the deal goes through, the parties will become equal partners and co-owners of some of von der Heyden's Polish properties.
The joint venture would be the first Central European investment for Harbert, which is owned by one of the richest families in Alabama, von der Heyden said. In Europe, Harbert has so far invested in Sweden and the U.K. No source at Harbert was available for comment at press time.
Von der Heyden is well established in Poland. The developer's portfolio includes the ulica Nowogrodzka 69 office building in Warsaw, occupied by the PricewaterhouseCoopers consulting firm; the 6,000 square-meter Skorupki office building in Warsaw now owned by Bankowy Fundusz Gwarancyjny; and the Poznan Financial Center, a $42 million office building in Poznan. The developer also owns 27,000 square meters of land zoned for residential development in Warsaw's Miedzylesie district. In addition, it's doing an $8 million renovation of the Lublinianka Hotel in Lublin and has a joint venture with the Polish Press Agency (PAP) to build a $24 million office building on property owned by PAP in Warsaw.
Von der Heyden said he was looking to team up with institutional investors to help finance new projects in Poland. "I was looking for an institutional investor for the last six months if not a year," he said.
Von der Heyden said the family-run Harbert is an ideal partner since it has the financial muscle of an institutional investor without the bureaucracy of large investors.
"They are very smart but relatively passive investors," von der Heyden said.
If Harbert and von der Heyden complete the deal, the new joint venture will most likely acquire existing properties and new developments in Warsaw and Poznan.
"We are currently talking about Poznan and Warsaw," von der Heyden said. While he wouldn't comment on the Warsaw project, he said he has plans to expand the Poznan Financial Center, whose first phase was recently completed.
The expansion plans call for construction of a new, $70 million building on plac Andersa next to the existing building. The city of Poznan has agreed to contribute a 10,000 square-meter site in exchange for a stake in the new project, Von der Heyden said.
The new building, scheduled to have 25,000-30,000 square meters of space, will accommodate office, hotel and retail facilities, von der Heyden said.
If von der Heyden strikes a deal with Harbert to raise financing for the project, the construction will start next summer and be completed by the end of 2002, he said.
Airport terminal bidders shortlisted
Polskie Porty Lotnicze (PPL), the company managing Warsaw's Okecie airport, earlier this month shortlisted seven companies for the construction of a new $350 million terminal in the capital, PPL said.
"There are seven (shortlisted) companies," said Marek Wos, PPL's spokesman. Wos, who said that more than a dozen firms had bid for the contract, refused to name either shortlisted or eliminated bidders.
Skanska, a Swedish construction company bidding for the tender, said it received a response from PPL that it had made the shortlist, but that no mention of other bidders was included in the letter. "We just received information that we are prequalified," said Skanska's Kaj Gulin, in charge of the tender. Gulin said he didn't know which other companies were shortlisted. "I haven't seen the list," he said.
Construction sources said that many major international companies as well as a few of the biggest Polish firms were bidding for the tender. Companies including Sweden's NCC and Belgium-based CFE earlier confirmed bidding, but were unavailable for comment after the shortlist had been issued.
The airport tender is seen as attractive for international companies due to its value $350 million a rarity in the Polish construction market.
PPL, which plans to select a construction company in the first half of next year, wants to build a 40,000 square-meter terminal. The new facility, which will link with the existing 20,000 square-meter terminal, will increase Warsaw's air travel capacity to 12 million passengers a year from the current 5 million, Wos said.
PPL said that construction of the terminal will start by the end of next year and will last three years.
Construction of the terminal is also sparking construction activity surrounding the airport.
Currently several investors are either building or preparing to build office projects along ulica 17 Stycznia near the airport.
PPL is also erecting its new head office in the area. The building, which will be completed by next summer, will house PPL's offices but will also have rentable commercial space, said Wos, who wouldn't offer any details as to the size of the building.
In addition, LOT Polish Airlines is building an 18,000 square-meter head office on ulica 17 Stycznia, the company said. The building is slated for completion in November 2001.
On the same street, Warsaw-based but foreign-owned developer Globe Trade Centre (GTC) is planning to build a 51,000 square-meter business park.
No surprises
New York, Paris, Sydney and London top the list of the most expensive cities in terms of retail space, according to a report released earlier this month by Healey & Baker, the U.K.-based property consulting firm.
Warsaw's high streets Nowy Swiat and Chmielna where the annual cost to rent prime retail space runs $960 per square meter, ranked as the 31st most expensive retail location in the world among 45 cities surveyed, Healey & Baker said.
Warsaw rents are about eight times lower than rents on New York's East 57th street, which was named as the most expensive retail street in the world, running $7,535 per square meter annually to rent retail space, Healey & Baker said.
New York was followed by Paris' Champs Elysees where annual rents reached $6,026 per square meter, Sydney's Pitt Street ($4,803) and Oxford Street in London ($4,263), Healey & Baker said.
Rents in Warsaw are on similar level to rents in Prague, which ranked as the 24th most expensive retail location while Budapest ranked 33rd, Healey & Baker said.
Cities such as Moscow, with annual rents of $2,000 per square meter as well Seoul ($1,971) and Sao Paolo ($1,755) are significantly more expensive than Warsaw, according to the report. Bratislava, Bangkok, Mexico City and Cape Town, all with rents below $500 per square meter a year, were significantly cheaper than Warsaw, Healey & Baker said.
Poles invest in housing
despite high rates
More than 600,000 households are building new homes or upgrading their existing ones in Poland, according to a report published earlier this month by the government's Housing and Urban Development Office (UMiRM).
The number of new flats completed in the first half of the year reached 34,400 units, 27% more than in the first half of 1999, the office said.
The number of completed dwellings rose despite a tight monetary policy and growing interest rates. Because of the new rates, which are 3.5% higher than in the same period of 1999, the total value of loans granted in the first six months of this year was equal in nominal terms to the amount granted in the first half of 1999, the office said. Although it wouldn't disclose the value of loans granted in the first half of 2000, the office estimated that only up to 25% of housing investment in Poland is financed by bank loans.
In terms of prices, new apartments ranged from zl. 1,200 per square meter in small towns to more than zl. 3,000 per square meter in Warsaw and Poznan, the office said.
