Johannesburg - Echo Polska Properties (EPP), the Poland retail property fund in which listed Redefine Properties has a 49.9 percent shareholding, has acquired a 70 percent interest in a special purpose vehicle that owns the biggest commercial property development site in Warsaw for up to €120 million (R2 billion).
EPP said yesterday that it had concluded a formal and binding agreement to purchase a 70 percent interest in a special purpose vehicle that owned the 22 Towarowa Street property from Griffin Real Estate, Poland’s leading real estate fund, on which retail development would be undertaken.
Echo Investment, one of the largest development companies in Poland, will acquire the remaining 30 percent interest in the special purpose vehicle and has also been appointed to develop the property, with EPP appointed to manage the property.
EPP said the Towarowa property consisted of a number of plots acquired through five separate transactions and had a total area of about 6.5 hectares and development capacity of more than 100 000 square metres of gross lettable area.
EPP and Echo will each be liable for only their pro rata portion of the purchase price.
The purchase agreement is still subject to the consent of Poland’s anti-monopoly office, UOKiK.
Hadley Dean, the chief executive of EPP, said yesterday that the property would be the perfect fit for EPP’s portfolio because of its location and attractiveness.
Dean said it was probably the last site of this nature available in Warsaw and despite seemingly high retail space saturation in Warsaw compared with other cities, the average retail area per 1 000 inhabitants was still relatively small at 450m² in Warsaw compared with more than 600m² in Poznan or Wroclaw.
He said the purchasing power of Warsaw residents was also 80 percent higher than the national average.
In August, prior to EPP’s listing on the JSE, Dean confirmed EPP was planning to buy a 110 000m² shopping centre development site on the fringe of Warsaw’s CBD.
“It is probably the most exciting retail development in any capital city in the next five years in Europe and is targeted for completion by 2020.
“By the time the shopping centre is built, there will be 1 million square metres of offices used by 100 000 people within a 15 minute walk of the centre,” he said at the time.
Maciej Drozd, EPP’s chief financial officer, said the construction cost of the centre was about €400m and EPP’s expected return on that was €34m.
BUSINESS REPORT