International capital continues its search for investment opportunities in CEE

Volume 9 No 9 September 2015 International capital continues its search for investment opportunities in CEE Euro zone: EUR 2.00 Poland: PLN 7.00 (i...
Author: Alberta Holland
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Volume 9 No 9

September 2015

International capital continues its search for investment opportunities in CEE

Euro zone: EUR 2.00 Poland: PLN 7.00 (incl. Tax) Czech Republic: CZK 45.00 Hungary: HUF 502.00 Ukraine: UAH 13.00 Slovakia: EUR 2.00 Russia: USD 2.00 United Kingdom: GBP 1.50 Romania: RON 6.50 USA: USD 2.00

R e ta i l • O f f i c e • I n d u s t r i a l & L o g i s t i c s • I n v e s t m e n t • M i x e d U s e

Romania witnesses highest lending increase across SEE see page 8

and

Residential

Palazzo Mall developing in Minsk

see page 18

Manufacturing Excellence celebrated in Warsaw see page 20

Supporting Partner:

Investment & Green Building Awards Jury for 2015

5th Annual

CEE INVESTMENT &

G R E E N

B U I L D I N G S

AWARDS

October 29th 2015, InterContinental Hotel, Warsaw, Poland

#CEEInvestmentAwards

www.CEEInvestmentAwards.com Partners for 2015:

BCSC

BELARUS COUNCIL OF SHOPPING CENTRES

For further information contact: Craig Smith / +48 604 144 769 / [email protected] Anna Kaliszewska / +48 601 382 667 / [email protected]

Ian Church, AECOM, MD, Continental Europe: Buildings & Places

Guy Pinsent, Less Mess Storage, CEO

David Hay, AFI Europe, Country Director Romania

Andrzej Tokaj, Magnusson Law, Managing Partner

Doron Klein, AFI Europe, Czech Republic/Germany, CEO

Ulf Pleschiutschnig, Morgan Stanley, MD

Raimund Paetzmann, Amazon EU SarL, Director EMEA Ops / CS RE

James Huckle, NBGI Private Equity, Investment Director

Jeffrey Stonger, Amstar, Vice President

Seweryna Afanasjew, Octava Asset Management

Fabrice Bansay, Apsys Group, Chief Executive Officer

Ian Worboys, Point Park Properties (P3), CEO

Liad Barzilai, Atrium, Chief Investment Officer

Robert Dobrzycki, Panattoni, Europe Director

Roger Dunlop, Avestus Real Estate (ARE), CEO

Darjušas Tadarovskis, Pribaltiskaya Investicionaya Kompaniya, Director, Belarus

Dieter Lobnig, Bank Pekao, Managing Director

Wojciech Pisz, PZU, Director of Real Estate Investments

Robert Sztemberg, Berlin Hyp, Country Director

Anton Semenenko, RAPA Group, Head of Retail, Belarus

Razvan Nica, BuildGreen, Managing Director

Dirk Adriaenssen, Redevco, Managing Director

Brendan Long, BZ WBK, Head of Corporate Property Finance Department

Radu Boitan, REVETAS Capital, Senior Investment Director

David Brodersen, Coimpex, COO

Johannes Bauer, S+B Gruppe, Asset Management CEE

Gary Burrows, Dana Holdings, Head of Property & AM, Belarus

Amit Lath, Sharda Group of Companies, CEO & Co-founder

Marek Jakubiak, Deutsche Asset & Wealth Management, Director - Head of Real Estate for CEE

Jason Sharman, Sharman Church, Partner and Owner

Thomas Staats, Deutsche Hypothekenbank, Head of Origination, International Property Finance

Angus Wade, Sharow Capital, Managing Partner

Dieter Knittel, Deutsche Pfandbriefbank, Director Europe

Marie Passuburg, Skanska Czech, President

Claudia Pendred, EBRD, Director

Yossef Fridman, Svitand Development, Belarus Country Director

Jonathan Tinker, EC Property Management, CEO & MD

Michael Tippin, Tippin, President & CEO

Richard Wilkinson, Erste Group Immorent, CEO

Małgorzata Dankowska, TPA Horwath, Partner - Real Estate

Robert Martin, Europa Capital, Principal, Head of Central Europe

Arpad Torok, Trigranit Development, CEO

Czarek Jarząbek, Golub GetHouse, Founder, co-owner

Olga Solovei, Ukraine Real Estate Club, President

Dorota Wysokińska-Kuzdra, Griffin Real Estate, Senior Partner – Investments

Eva Boehler, Unicredit, Director

Pavel Trenka, HB Reavis, CEO

Ernest Bartosik, UNIPHARM, Country Manager

Martin Erbe, Helaba Landesbank Hesse, Head of Int. Real Estate Finance

Thierry Leleu, Valad Europe, Head of Fund Management

Antoni Leonik, HSBC Bank Polska SA, Multinational Banking Manager

Roger Andersson, Vastint, Managing Director

Peter Szamely, Hypo Noe Gruppe, Head of Team CEE/SEE

Maciej Krol, XCITY (PKP), CEO

George Mula, Integrated Finance Group, Principal

Yury Popov, Your Capital, Head of Commercial Real Estate Department

Anna Duchnowska, Invesco Real Estate Poland, Board Member, Director Asset Management Edgar Rosenmayr, Kulczyk Silverstein Properties, Managing Director

LATEST NEWS

LATEST NEWS

Deals worth €2.55 billion finalized on CEE real estate markets in H1 2015 case for sources of capital which previously only looked at opportunistic products.”

JLL’s Troy Javaher

According to international advisory firm JLL, the total real estate investment volumes in H1 2015 reached around €2.55 billion in Central and Eastern Europe. The Czech Republic led the region in terms of volumes with a share of about 47 percent in CEE (€1.2 billion), followed by Poland (32 percent €813 million), Hungary (€280 million – 11 percent), Romania (7.5 percent), Slovakia (0.5 percent), and the SEE - other CEE - markets (2 percent). Troy Javaher, Regional Director, Head of CEE Investment at JLL, commented:” As the prime European real estate markets returns become increasingly tight, other investment locations look more attractive. The positive economic news from Central and Eastern Europe coupled with healthy yields, are attracting capital and re-pricing, with investors especially focusing on Poland and the Czech Republic. Other CEE capital cities along with Poland’s regional markets will also be highly sought after. The weight of international capital seeking core CEE opportunities has provided increased liquidity for large lot-size properties and portfolios. In addition, attractive and more easily attainable financing has widened the pool of investors who are able to offer more competitive pricing. This is especially the

The volume of investment transactions finalized on the commercial real estate market in Poland in H1 2015 reached €813 million. In H1 2015, investors were the most active in the office segment with closed transactions of around €385 million, while retail came in with €285 million and industrial finished with €143 million. The most notable deals in H1 2015 included: Enterprise Park, acquired by Tristan Capital Partners in Kraków, Green Horizon, purchased by Griffin in Łódź, a portfolio of offices comprising of Europlex, Wiśniowy A and Irydion in Warsaw and Millenium in Katowice acquired by Lonestar; Sarni Stok in Bielsko Biała and Focus Park Rybnik acquired by Union Investment, Solaris Centre in Opole purchased by Rockcastle as well as the Europolis/CA Immo and FM Logistics industrial portfolios closed by TPG and WP Carey respectively. All of these transactions were medium sized deals ranging between €50 and €100 million. “Investors are still very active on the biggest office markets outside Warsaw – H1 2015 saw the finalization of the transactions of Enterprise Park and Kazimierz Office Center in Kraków, Green Horizon in Łódź, Baltic Business Center in Gdynia, West Forum in Wrocław and Millenium in Katowice. These transactions helped push the total volume for office deals in regional cities to €234 million. Furthermore, the office market is also witnessing an interesting phenomenon regarding the increased number of sale/ purchase transactions of lower values, as well as the extension of the finalization process by up to three months when compared to

2014,” said Sławomir Jędrzejewski, National Director, Office and Industrial Investment at JLL Poland. The volume of investment transactions in H1 was over 40 percent lower compared to the corresponding period of 2014 with lack of big ticket transactions. Nevertheless, investor interest in Poland remains very high and is visible in almost all sectors of the commercial real estate market as well as product classes. Experts from JLL forecast that several schemes, currently in advanced negotiations, will change owners in Q3 2015. Tomasz Puch, Regional Director, Head of Office and Industrial Investment at JLL Poland, summarized: “The overall lower transaction volume in H1 2015 is not the beginning of a trend. It is just that more lower value transactions were closed on the Polish market in H1 this year than in the corresponding period last year. Furthermore, we are observing increased activity among investors searching for interesting products in all segments of the commercial real estate market. Currently, there are numerous transactions whose negotiations are in advanced stages. Taking into consideration the positive approach among investors, ongoing negotiations, as well as transaction awaiting closing, such as Empark in Warsaw or Riviera in Gdynia, we expect that the overall investment volume will reach €3 billion by the end of 2015, with a major increase being particularly felt in the retail segment.” Yields for prime retail schemes are at around 5.5 percent, offices at 6.0 percent and industrial expected at or below 7.0 percent.

BREEAM Excellent for Tryton Business House

Tryton Business House

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EuropaProperty CEE COMMERCIAL REAL ESTATE NEWS

September 2015

Tryton Business House, an A-Class office building, which is being carried out by Echo Investment in Gdansk, has obtained a BREEAM Interim certificate with the Excellent rating. Tryton had a very high score of 73.2 percent, which resulted in the Excellent rating, which has only been granted to only

September 2015

a dozen or so other office projects in Poland. The certification process was conducted by Grontmij Polska, and construction of the development is scheduled to finish in Q4 2015.

CEE COMMERCIAL REAL ESTATE NEWS EuropaProperty

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LATEST NEWS

LATEST NEWS

The Advisers become fully branded Knight Frank office in Romania Knight Frank is to formally tie the knot with Bucharest based property partners, The Advisers, which will now become a fully branded Knight Frank business. Under its new corporate identity, the business will continue to be headed by Horatiu Florescu. Chris Bell, managing director of Europe at Knight Frank said: “After six successful years together, we are delighted to officially become Knight Frank Romania, and look forward to expanding our presence and success in the local real estate market, under the leadership of Horatiu Florescu; an exceptional professional with outstanding

results. We are confident the Knight Frank brand will continue to flourish in Romania.” Horatiu Florescu, head of Bucharest office, Knight Frank, commented: “Following a highly productive six year partnership with Knight Frank, we felt the time has come to strengthen our commitment and our joinedup success. This exciting direction comes both as the recognition of our office as a local powerhouse and as a sign of confidence of a global leader in the Romanian market.” Knight Frank’s new Bucharest Market Report states 2014 as the most successful year for

the Romanian investment market since the global crisis, reaching total investment levels of €1.15 billion, with 2015 expected to follow suit. While the rising demand for office space in Bucharest resulted in 2014 take-up to reach its highest level since 2009, development activity has also increased, sustained by the surge in pre-leasing levels, triple the number of those transacted in 2013. On the back of Romania’s strengthening economy, forecast to grow by another 2.8 percent in 2015, both occupier and capital markets continue to benefit from improved sentiment across all business sectors.

HB Reavis to embark on large-scale property development project in Budapest HB Reavis has announced the acquisition of plots covering a total area of three hectares located in one of Budapest’s busiest areas, to serve as the location of a large-scale office development project, which the company intends to launch in the near future. The acquisition paves the way for a major office development which will amount to a gross leasable area exceeding 120,000 sqm. Acquired from multiple owners in June, the sites are located in the 13th district of Budapest, an area framed by Váci Road, Róbert Károly Boulevard and Árboc

Street. Located in one of the city’s most frequented settings, the sites are accessible by multiple means of public transport and provide an excellent opportunity for office development. HB Reavis will leverage the location and connectivity of the site to create a contemporary and flexible work environment which meets the demands of the modern-day European occupier. While the focus of the project is the high quality workspace, equal attention will be given to the surrounding and complementary retail

and leisure facilities and expansive green open spaces. “This unparalleled project heralds a new era of workplace design and development in Budapest. It will be a unique, vibrant scheme which brings together high quality offices with a range of restaurants, cafes, shops and other facilities, which we believe could act as the benchmark for future business locations in Budapest,” said Zoltán Radnóty, CEO of HB Reavis Hungary.

Europa Capital completes another acquisition in Prague Europa Capital (“Europa”) has completed another acquisition for its pan-European investment fund, Europa Fund IV, acquiring Hadovka Office Park, Prague for €43 million, reflecting a 9 percent initial yield. Hadovka is a 25,000 sqm office building situated in a prominent position on the Evropska corridor in Prague 6. The Property is 100 percent leased to a number of international and national tenants. Europa will invest significant capital into the asset and will be seeking to optimise the tenant mix going forward. Resolution Capital Management Ltd, a specialist CEE Asset Management company owned by George Leslie, has co-invested in

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the project with Europa and will be providing asset management services to the project. George Leslie commented: “I am delighted to conclude RCM’s first acquisition and I look forward to working with Europa on this project and growing our AUM platform going forward across the CEE region.” German lender pbb Deutsche Pfandbriefbank provided a senior acquisition loan to the project. Charles Balch, Head of International Clients, UK & CEE at pbb, said: “Our extensive experience in the CEE markets allowed us to understand the particular opportunity and hence offer attractive financing terms.”

Europe at Europa, commented: “This is an asset we have tracked over many years and, with the extension of the metro line bringing a significant improvement to the public transport in Prague 6, we believe this is a fully sustainable location where we can offer quality office space at affordable rents. The acquisition of Hadovka fits in with our strategy of acquiring high quality, but often capital-starved buildings, in strategic locations in European capital cities and also where we can add value with quality on-site management and building improvement. The pricing relative to the average Prague office market is very compelling.”

Robert Martin, Principal and Head of Central

EuropaProperty CEE COMMERCIAL REAL ESTATE NEWS

September 2015

September 2015

CEE COMMERCIAL REAL ESTATE NEWS EuropaProperty

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FINANCE/INVESTMENT

GTC finalizes debt restructuring of its Romanian subsidiaries GTC to continue with the restructuring of its remaining non-performing portfolio in the most efficient way and to focus on the realization of our growth strategy which we see as single most important catalyst to further value creation for our shareholders,” said Thomas Kurzmann, GTC’s Chief Executive Officer. Additionally, GTC has fully repaid its loan in relation to Avenue Mall in Osijek, Croatia, and has signed a preliminary agreement for the sale of the SPV that owns the asset. The closing of this transaction is expected for July 2015 subject to customary closing conditions. GTC’s Thomas Kurzmann

Globe Trade Centre S.A. (“GTC”) successfully restructured the loan agreements of its Romanian subsidiaries with the European Bank for Reconstruction and Development (“EBRD”). GTC signed the agreement with EBRD for the restructuring of the existing loans for its two Romanian shopping malls in Arad and Piatra Neamt. Under this agreement, GTC will be released from guaranteeing the loans and instead will become a co-borrower alongside its subsidiaries. According to the restructuring agreement, the loans totalling about €33.6 million will be repaid in quarterly instalments until the end of 2017.

“As a result of the continuing weak consumer spending in secondary Romanian cities, the retailers’ sales in our shopping centres there have continued to underperform, while rent levels have not recovered. Therefore, some of our projects have been in covenant breach and GTC decided to guarantee the repayment of these loans on corporate level. GTC is committed to its long-standing relationships with its financing banks and eager to further strengthen its reputation as a trustful and reliable borrower. The successful loan restructuring with EBRD, as well as the recently completed loan restructuring with our Hungarian banks, allows GTC to match its debt repayments with its operating cash flows and additionally removes any existing project related loan covenants. This will allow

Finally, GTC has restructured loan agreements with MKB and OTP, its two Hungarian lenders, which originally financed construction of Galleria Varna. This loan, which amounts to around €13.5 million, will be amortized in equal quarterly instalments until the end of 2018. In parallel, GTC has signed a preliminary agreement for the sale of Galleria Varna and fully repaid the loans related to this project. Closing of this transaction is expected for July 2015 also subject to customary closing conditions. The company expects that the restructuring of all the above loans will be finalized this summer, as the last loan restructuring agreement related to Galleria Stara Zagora is scheduled for signing in July.

Romania witnesses highest lending increase across SEE

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Romania will record the highest increase in lending among South-Eastern European states until 2019, according to Raiffeisen Bank International (RBI). It will see an annual growth rate of 12.4 percent, due to economic recovery and low interest rates.

The Romanian National Bank plans to join EU’s Single Supervisory Mechanism by the end of 2016. This could bring more pressure on banks’ profitability, even though the process is complex and could register delays, according to RBI.

“After many years of restructuring, the banks in Romania are now ready to increase lending,” reads the RBI report.

The acquisition of Volksbank by local bank Banca Transilvania and local lender BCR’s business restructuring could reduce

EuropaProperty CEE COMMERCIAL REAL ESTATE NEWS

September 2015

the share of banks with foreign capital in Romania, whereas local banks could raise their share, further reads the RBI report.

CEE investment volumes expected to exceed 2014 levels According to Cushman & Wakefield, investment activity in the Central European markets of Poland, Czech Republic, Slovakia, Hungary and Romania maintained C&W’s James Chapman momentum with €881 million invested in Q2, combining to total €2.21 billion invested in the region year to date. However, given the significant pipeline of transactions, year end volumes are expected to exceed 2014 levels. Commenting on the activity in Q2 2015, James Chapman, Partner, Head of CE Capital Markets at Cushman & Wakefield, said, “Q2 has been all about making significant progress with deals that are now expected to close between July and September. Q3 2015 is going to be a record period for investment volumes in all countries across the CE region based upon the advanced status of numerous deals.” Investors preference for the office sector increased with €394 million traded in Q2 2015 (a 158 percent growth quarter-onquarter). Retail and industrial saw weaker activity in Q2 than in Q1 with volumes at €380 million and €52 million respectively (down by 51 percent and 87 percent compared with Q1 2015). Considering H1 2015, however, retail activity was up 55 percent on H1 2014, and industrial by a moderate 12 percent on the same period. Retail will be a big driver of growth in H2 2015. Poland saw the highest volume of transactions over the second quarter (€365 million), furthermore half year results show that the Czech Republic and Poland continue to attract the strongest investor interest. However, Hungary was the only country seeing higher activity than in Q1 and was also the only country seeing recent activity volumes above the 5 year quarterly average. The largest portfolio deal in Q2 was Aviva’s sale of their ten asset strong mixed use CE portfolio for a reported €185 million, whereby Lone Star acquired assets across the Visegrad countries. The largest single asset deal concluded in Prague with the sale of Arkády Pankrác shopping centre for €162 million which Cushman & Wakefield’s Capital Markets team advised on. Commenting on the prospects for the remainder of the year, James Chapman added “We are optimistic in our forecasts for the region, demonstrated by a strong pipeline of transactions in due diligence. We continue to see strong investment inflows across office and retail sectors. Prime yields have gone below 6 percent for landmark properties and retail investments have gained significant momentum. Although the difficult situation in Greece influencing the Eurozone, the evidence to date is that volumes in Central Europe will be stronger this year than last and will reach €7.5 billion.”

FINANCE/INVESTMENT

Office investment in Russia up 70 percent in H1 2015 transactions are being closed and owners are holding on to the most attractive assets, which is also reflected in the current size of investments.

Mercedes- Benz

In the first half of 2015, investment in office real estate in Russia amounted to $579 million, which is up 70 percent y-o-y. Retail real estate in Russia, which has usually dominated demand, saw investment of only $208 million, which was a record low for the last few years. At the same time, deals that were suspended late last year due to the devaluation of the rouble are being rapidly closed, according to a report by Colliers International. Total investment in Russian real estate in H1 2015 amounted to $1.23 billion, which is down 23 percent y-o-y. The decline is mainly due to a weak first quarter. The Moscow market was again on investor’s radar, with the capital seeing 81 percent of investment. The office sector, historically the most transparent and understandable for investors, attracted the largest amount of investment in the first half of 2015 – 47 percent. Warehouses and retail properties accounted for 19 percent and 17 percent, respectively. Multifunctional centres have been recently gaining in popularity – their share increased to 13 percent in H1 2015, up from an average of 10 percent over the past five years. The largest investment transactions in H1 2015 were the sale of the Metropolis business centre (Building 1), the PNK-Chekhov I warehouse complex, the Mercedes-Benz Plaza business centre, as well as part of the Sponda portfolio – the Bakhrushin House business centre in Moscow and the Solnechny II shopping centre in Ramenskoye, Moscow Region.

During economic hard times, Russian investors usually dominate in the real estate investment market in Russia, and the presence of international players is reduced to a minimum. The share of foreign capital in total investment fell from 29 percent in Q1 2015 to 4 percent in Q2 2015. The Q1 figure was the result of one transaction with foreign capital. Nevertheless, foreign investors – particularly Asian investors – are still interested in the Russian market. The high cost of bank financing is hindering the decline of capitalisation rates. In Q2 2015, the minimum rate of return in Moscow did not change and was at 9.5 -10.5 percent for the office and retail segments and 1213 percent for storage facilities, depending on the terms of lease agreements, bank financing and the quality of covenants. Stanislav Bibik, head of capital markets, Colliers International Russia, commented: “Despite the gradual reduction in the key policy rate of the Central Bank of Russia (on June 16, the rate was reduced to 11.5 percent), debt financing remains expensive and difficult to obtain, which is a limiting factor for the conclusion of investment transactions in Russia. In addition, fluctuations in the rouble exchange rate and oil prices are still determining factors for the Russian economy and the investment market as a whole. It is important to note that despite the current uncertainty in the market, we are seeing an increased number of significant investment transactions, which is undoubtedly an important signal for the return of investors to the market and growing interest in the Russian commercial real estate.”

A mismatch in the price expectations of buyers and sellers explains the limited number of transactions. Major players have adopted a wait-and-see attitude. At the same time, taking into account the decline in rental rates and capitalisation rates, investors now have profitable investment opportunities. However, almost no large

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EuropaProperty CEE COMMERCIAL REAL ESTATE NEWS

Global real estate markets remain steady despite debt crisis in Europe Despite the debt crisis in Greece and volatility in China’s equity markets, Q2 2015 preliminary data from JLL shows global transaction volumes in the second quarter of the year totalled US$161 billion, unchanged from the same period a year ago. The US leads global commercial real estate investment in the second quarter of 2015 after posting a 30 percent rise in transaction volumes, as full year global forecasts hit US$750-760 billion. “We can expect the recent decline in global interest rates to support transactional activity for the remainder of 2015,” said David GreenMorgan, global capital markets research director at JLL. “As a result, we believe global volumes for the full year will reach US$750-760 billion, a 5 percent rise on 2014 transactional activity.” In EMEA, transaction volumes were up 11 percent, measured in Euros. Southern Europe posted a 47 percent growth in the first six months. The UK, France and Germany were up 15 percent in the same period while Nordic investment was up 38 percent. Russia meanwhile shows signs of renewed optimism with the strongest level of activity seen in five quarters. The uncertainty over the future of Greece continues to push investors into real estate which benefits not only from record low financing but also yields a healthy premium to the returns offered in risk free assets such as government debt.

Colliers International completes second logistics transaction selling inNove Business Park Increasing investment activity coupled with easing pressure on rents and a sharp drop in vacancy rates on the Budapest industrial and logistics market have been the main observations from experts recently. The long awaited recovery is finally visible and momentum is building on the back of strong leasing activity pushing vacancy rates to a record low level since 2008. Following strong leasing activity in 2014 (net absorption of 128,000 sqm was registered), vacancies in the Budapest logistics market dropped further to 14.5 percent by the end of Q1 2015, which today are even below those of the office market. 2014 was the first year in which investment grade logistics assets changed ownership after a 5-year long dormant period, and now the asset class appears to be on an upward curve. “Early in Q2 2015, Colliers International has already registered three investment transactions, more than during the course of 2014. Colliers International recently completed its second logistics transaction this year, advising a private developer on the sale of an 18,000 sqm fully-let prime city logistics asset inNove Business Park in Budapest; a deal that establishes a new benchmark for prime assets within this class,” commented Bence Vécsey, Head of Investment Services at Colliers International Hungary. The new owner of the building is an open-ended retail fund managed by Diófa Fund Management. “We are pleased to have been involved in this transaction as well as supporting CA Immo and Union Investment in selling one of the largest logistics facilities in Hungary to Prologis a few months ago,” added Vécsey. On the development side of the logistics market, there are some rather large current BTS requirements and some experienced developers; in addition, new market entrants are considering investing in land for future projects.

In Asia Pacific, lower transactions in Japan and Australia – the region’s biggest markets – pulled volumes down.

InNove Business Park Hungary

September 2015

CEE RETAIL AWARDS 2016 JURY

Marek Skoczylas

Serdar Ersoy

Paweł Korobacz

Waldemar Madajczyk

Media Saturn Holding Poland Head of Real Estate Poland

Defacto Retail Chief Growth Officer (CGO)

“YES Biżuteria” Expansion & Organisation Director

Małgorzata Gabryś

Philippe Beurtheret

Ilona Gryszko-Redo Alshaya Poland Head of Property CEE

H&M Hennes & Mauritz CZ Lease Manager

Dieter Knittel

Artur Kazienko

Anton Semenenko

Dorota Wiaderek

Alexandra von der Grün

OTCF S.A."4F" Director Expansion & Investment

Paweł Oskręda Smyk Property Director

Immochan Hungary General Manager

Deutsche Pfandbriefbank AG Director Europe, Real Estate Finance International

Nevena Kostic

KAZAR Footwear Owner

Guess Poland Executive Board member

Petr Žahour

Rapa Group Head of Retail Businesses, Member of the Board of Directors

Marko Schönebeck

Retail SEE Group d.o.o Owner / Director

GO Sport Polska Sp. z o.o. General Director

Adidas AG Director Real Estate Western Europe

Joanna Jóźwiak

Andrzej Czarnecki

Adrian J. Heymans ECC Real Estate CEO

C&A Buying GmbH & Co. KG Head of Global Real Estate

Krzysztof Apostolidis

Ronan Martin

Harald Aichberger

Rafał Chrapkowicz

H&M Hennes and Mauritz Sp. z o.o. Expansion Manager CEE

Fabryka Biznesu Sp. z o.o. - investor of SUKCESJA President of Board

EURO-net Sp. z o.o. Development Director

Carrefour Polska C&A Expansion and Shopping Centers Director, Leiter Expansion/ Vice President of the Board Immobilien Österreich/CEE/SEE

Hunkemöller Deutschland Real Estate Manager

Christoph Gessler

Pako Lorente Sp. z o.o. President

PLGBC GREEN BUILDING SYMPOSIUM 06.10.2015 WARSAW

CENTRUM NAUKI KOPERNIK

HEALTH WELLBEING PRODUCTIVITY AS KEY ECONOMIC BENEFITS OF GREEN BUILDING

New workspace: why do leaders choose green offices? Global trends and perspectives for green, healthy and comfortable buildings of various types. Providing optimum conditions of buildings use and employees’ wellbeing vs energy efficiency.

www.konferencja.plgbc.org.pl Honorary patrons:

Media partners:

RETAIL NEWS

Rise in online retail challenges the turnover rent model Growth of online retailing and omnichannel shopping poses risks for the model of turnover rents and potentially longterm development in the retail property sector, according to Colliers International’s latest research paper.

turnover rents,” said Damian Harrington, CEE Regional Director of Research for Colliers International. “At present, there is no known consistent tracking of, or legislation for, the inclusion of goods purchased online or collected or returned in store for the purposes of calculating turnover rent. We understand that major European landlords are currently reviewing how to manage the potential impact of omnichannel shopping on their rent roll and lease agreements.”

The rise of the share of online retail sales in Europe from its current 5.7 percent to an estimated 20 percent+ creates challenges for landlords and developers in the retail sector, as their ability to calculate and collect turnover rents may become increasingly problematic, according to Colliers in its report on retail in central and eastern Europe (CEE) – Tenuous Turnover: Implications of E-commerce Growth.

Sean Briggs, Managing Director of Retail Agency in Eastern Europe for Colliers International said: “Click-and-collect and other digital commerce options that involve the physical store blur the lines of what’s included in store turnover, as do purchases that can be returned in store. If there is not

an understanding between the retailers and owners of shopping centres as to what is fair and appropriate to include in a turnover rent as well as a reliable mechanism for calculating this, then it seems likely that landlords will place more emphasis on the base rent, perhaps with rent reviews linked to a store’s turnover.” “As click-and-collect becomes the key operating retail model, the sooner these solutions are reached, the better for the market as a whole.”

operating models and formats into their business. There is much growth left in the omnichannel sector,” added Harrington. “Most leases are not structured to include online sales, so getting this operating and lease model right is vital. Shopping centres have been highly attractive and defensive investments and it is crucial that rents will be collected on the basis of retailer’s performance, helping protect and grow income and sustain continued future investment in the retail property sector.”

“The relatively low 5.7 percent online share of retailing as a whole in Europe tells us that although online retail is becoming mainstream, many retailers have only just begun the journey of integrating new

Turnover based rent is common in the retail sector. There are a number of ways to structure leases but most common has been a monthly base rent, topped-up by a percentage of a tenant’s annual retail sales if such amount of sales exceeds the total base rent for the year. However, the strong negotiating position of retailers over recent years, particularly the anchors, has led to the rent being calculated as just a percentage of turnover without there being a guaranteed minimum base rent. This can be problematic for developers and landlords Another rising issue of contention within this model is the growth in online sales by retailers with a bricks-andmortar retail presence, and whether or how online revenue should be included in the sales figures for the purposes of calculating turnover rent. Complicating the matter further is the increasing popularity of omnichannel shopping. This includes the situation whereby a customer orders goods online, but for collection in-store, and whether such sales should be included in a store’s turnover. If the goods are paid for on-line then one may argue that the transaction was not concluded in a store, but what if the purchase is paid for in the shop upon collection? Similarly, where goods are purchased online but returned in store, is it appropriate for this to be deducted from a retailer’s turnover? Some retailers are using bricks-and-mortar stores as a showroom for their online sales as in-store and online sales become increasingly co-dependent. In the US, online retailing is developed to the extent that 10 percent of total retail sales take place exclusively online, with 55 percent of all sales entailing a combination of an online component and the customer visiting a physical store. This highlights the difficulty in defining which of the stages of the purchasing process can be attributed reasonably to the in-store component as opposed to online buying. “Understanding the local interplay between in-store and online sales is becoming increasingly significant and with this in mind, there are great implications for landlords charging

September 2015

CEE COMMERCIAL REAL ESTATE NEWS EuropaProperty

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RETAIL NEWS

SES to manage Mall of Split The Mall of Split is currently being built at an entrance to the city of Split and is located in one of the coastal city’s most important hubs.

SES Spar European Shopping Centers is strengthening its market position in Croatia and will manage the new shopping centre Mall of Split in Croatia’s second largest city, Split, from autumn 2015. The Croatian owner Mejaši prvi d.o.o. commissioned SES with the flagship project’s centre management. The centre is currently being built and will open this autumn. With a leasable area of over 60,000 sqm and more than 200 shops, the mega complex is now the largest shopping centre in SES’s management portfolio in six countries. In addition to its own locations, SES also manages shopping centers from well-known investors in Austria, Slovenia, Northern Italy, and Hungary.

With more than 200 retailers, food service, and service providers, the centre brings new brand diversity and added value to the affluent region. Its prominent anchor tenants include Interspar, Zara, Massimo Dutti, Zara Home, Stradivarius, a dm drugstore, Debenhams, and many others. The shop mix is an answer to heavy demand for international brands and the increasing importance of gastronomic diversity. The centre therefore offers a food court with a large outdoor terrace and an impressive view over the city. In 2016, SES will also gain leasing responsibility for the centre. Owner representative Kristijan Gelo, Mejaši prvi d.o.o, commented: “We are delighted to have gained the Austrian market leader SES as an operator for our Mall of Split. The centre has great architecture, a perfect location, and will boast a trendy mix of tenants. With

SES, we have brought retail specialists and partners on board who know how to breathe life into centres over the long term and make them real meeting places.” Marcus Wild, CEO of SES Spar European Shopping Centers: “The Mall of Split is another pearl for our exquisite portfolio of shopping centers. Designed to be an appealing building, it possesses all the factors that are important for the successful operation of a centre. The motto is good eating, experiencing abundant shopping, and feeling good. The centre has a futureoriented design in this respect. We previously handled only smaller units in Croatia. The centre management in Split now allows us to expand our market position.” SPAR Austria has been successfully active in Croatia since 2005 and operates a branch network of 50 food markets in the country. SES has been represented on the Croatian market since the acquisition of four Ipercoop markets in 2009.

MEGA to welcome the largest sports and health centre in the Baltics VS-Fitness will be opening the largest sports and health centre in the Baltics at MEGA shopping and leisure centre in Kaunas, Lithuania. At 7,500 sqm, the new sports centre will be a unique project for its size, modern equipment and range of activities. The only sports and health centre of its kind in the Baltics is set to open its doors in autumn 2016.

professional squash courts. There will also be a specially designed gym featuring stateof-the-art equipment, a climbing wall and a martial arts room with Everlast equipment, which is the leading brand worldwide. This will be the only gym in Lithuania with a skiing and fitness bike zone with an interactive screen in lieu of an instructor for those exercising individually.

“This centre will offer residents and guests of Kaunas an especially broad range of services. This will be a place where tennis, squash, fitness, cycling and martial arts enthusiasts can come to work out, as well as those who are interested in aerobics or modern dance. The gym will also offer separate sauna zones for men and women with relaxation lounges,” said Antanas Sakalauskas, UAB VS-Fitness gym manager.

The property managers of MEGA confirm that during expansion, the shopping centre will operate normally.

The new sports centre will have competition standard outdoor tennis courts and

“Expansion will not affect operation of the shopping centre, and we will ensure that our visitors are provided with maximum comfort. Preparatory works are already being carried out, and we have set up another entrance to the shopping centre for the convenience of our customers. Located at the back of the shopping centre, the new entrance makes it even easier to reach Rimi Hypermarket

and the other shops located next to it,” said Ms Vyšniauskienė, Baltic RED marketing manager. The new sports and health centre will begin to operate after reconstruction and expansion of MEGA is complete. Once it is, MEGA will become the largest shopping centre in central Lithuania, with over 102,000 sqm of floor space. Together with Swedbank, which is financing the project, AB Baltic Shopping Centers – which is controlled by the Rakauskas family – will invest €45 million into the MEGA shopping and entertainment centre development project. The development project is being carried out by Baltic RED, one of the largest commercial real estate development and management companies in the Baltic countries.

RHIC

RUSSIA & CIS HOTEL INVESTMENT CONFERENCE

26-28 OCTOBER 2015 Azimut Moscow Olympic Hotel, Russia

PLAYING THE LONG GAME THE REGION’S LEADING HOTEL INVESTMENT CONFERENCE Join us in Moscow for the 11th Russia & CIS Hotel Investment Conference (RHIC), to network with the most influential gathering of hotel investors, owners, operators and developers and explore new opportunities in the region. HIGHLIGHTS INCLUDE: NETWORKING Meet 350 senior decision makers, make valuable new contacts and catch up with old friends. EDUCATION PROGRAMME Over 70 local and international experts will share their specialist knowledge over two days. SPONSORS’ EXHIBITION The heart of the conference, where meetings are arranged and deals are done.

REGISTER NOW AT www.russia-cisconference.com www.russia-cisconference.com

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EuropaProperty CEE COMMERCIAL REAL ESTATE NEWS

September 2015

H O ST SP O NSO R

Azimut Hotels FO U NDER SP O NSO R

JLL P L ATI NU M SP O NSO R

Carlson Rezidor Hotel Group G O L D SP O NSO RS

AccorHotels Dentons DLA Piper InterContinental Hotels Group Marriott International, Inc. Starwood Hotels & Resorts Worldwide, Inc. Wyndham Hotel Group Sponsors confirmed as of 27 July 2015.

@RHIC_News #RHIC CO- ORGANISE RS

RETAIL FEATURE

RETAIL

Palazzo Mall developing in Minsk

Palazzo Mall

RRY Capital is currently developing Palazzo Mall, a shopping and entertainment centre in the city centre of Minsk, Belarus. This retail project, designed by Chapman Taylor UK, consists of three structures: a 4-level mall, a 6-floor parking building and a large energy centre. The project will boast 33,000 sqm of space for retailers, across a combination of shopping, entertainment, dining, and leisure activities. The total investment is expected to reach around USD 100 million. Belarus has been hit disproportionately by the recent economic downturn and Western sanctions, due to the country’s dependency on Russia. Its GDP, which has shown historically high growth rates, has fallen to less than 1 percent in the most recent year and is expected to remain subdued over the next few years. Amidst this backdrop however, China has aggressive plans to invest in Belarus. Due to its geographic location, China envisions Belarus as a key hub for the New Silk Road, a transcontinental link that reconnects the heart of China with the heart of Europe, and is expecting to invest up to USD 16 billion in various projects over the coming years. As a significant part of their investment, China’s spending is being funnelled into the creation of the China-Belarus industrial park, territorial entity with the area of around 80 square kilometres with a special legal status to provide for comfortable conditions for business conduct. Among many positive macroeconomic impacts this foreign investment will have on the country of Belarus, the most staggering are expected to be rising consumer confidence and growing retail demand. Currently, Minsk ranks low in Europe with regards to modern retail stock per capita. Total retail stock volume is around 900,000 sqm (as reported by Colliers 1Q 2015), and much of it is greatly outdated. This highlights

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the desperate need for new developments of retail space. Namely, lack of proper modern formats has been one of the major deterrent factors for international brands considering the country as a potential market. Obviously, influx of quality lease stock is required to boost retail sales in Belarus and satisfy the insatiable demand of local shoppers. As one of the largest ongoing retail developments in Minsk, Palazzo project is anticipated to revive the look and feel of the city from its current outdated model to a more vibrant modern-chic retail environment. According to JLL, the commercial real estate market is considered to be saturated when the retail stock per capita is equal to 600 sqm per 1,000 persons. When compared to other Eastern European and CIS capital cities, Minsk’s retail saturation ratio ranks quite low with 370 sqm per 1,000 persons, just above Kiev with 365 sqm per 1,000 persons. This saturation ratio is also far behind other cities’ indicators, e.g. Vilnius and Tallinn with populations of 535,000 and 408,000 respectively in comparison to the population of Minsk at 1.9 million. This low saturation level of retail space and lack of quality shopping centres contributes to the under-penetration of fashionable clothing brands in Belarus forcing most consumers within the Minsk market to travel to neighbouring countries like Poland and Lithuania in order to make their retail purchases. This retail tourism alone contributes to a leakage of approximately EUR 1 billion annually in total retail sales from the Belarusian economy. Within the Belarusian retail landscape there exists approximately 900,000 square metres GLA of retail stock, of which there are currently 5-7 large modern retail centres (with a total GLA of approximately 131,000 sqm). By the end of 2015 it is expected that

EuropaProperty CEE COMMERCIAL REAL ESTATE NEWS

September 2015

another 375,000 sqm of retail stock will be added to the landscape, and another 277,000 sqm by the end of 2016. Of this, 4 large modern retail centres (totalling 174,000 sqm GLA) are considered to meet international high quality standards. Under this backdrop of existing low quality standard shopping centres, low retail stock per capita, and an increase in pipeline construction retail space, Minsk is poised to absorb this new stock of retail development, thereby encouraging a variety of international and national fashion brands to operate in the country. Palazzo Mall (with an expected construction completion date Q1 2017) is designed throughout to international standards with the capacity to accommodate 130 fashion retailers, 9 cafes and elite restaurants, 6 food court restaurants, as well as an 8 hall movie theatre (incl. 1 iMax) with a total seating capacity of around 1,300 attendees. Adjacent to the retail centre, is the 6-floor parking structure (construction has been completed and it is currently in operation) that will provide parking places for up to 1,100 cars. Palazzo Mall will be located at the junction of Minsk’s major 8-lane transportation arteries of Orlovskaya St. and Timiryazeva St (in the vicinity of Pobediteley Avenue). The project is situated close to the densely populated residential districts of Vesnyanka and Masiukovshina, and access to a catchment population of approximately 1.3 million people (up to 20 minutes by private transportation). Within walking distance from Palazzo Mall there are Minsk major landmarks. Specifically, National Flag square, the Presidential Office, Dreamland Amusement Park, the Qatari Sports Centre, as well as other economically important facilities. Adjacent to Palazzo are the Kazakhstan (currently under construction), Turkmenistan (currently under construction), and the Chinese embassies (designated land plot, with construction yet to start). Palazzo Mall is one of the major retail properties currently under construction in Minsk, Belarus. Its second to none location, unique architectural concept and smart tenant mix assure success for the project and responds to shoppers’ insatiable demands and preferences.

September 2015

CEE COMMERCIAL REAL ESTATE NEWS EuropaProperty

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MANUFACTURING AWARDS

MANUFACTURING AWARDS

Manufacturing Excellence celebrated in Warsaw

CEO Manufacturing Magazine and EuropaProperty would like to thank all those that attended the 3rd annual CEE Manufacturing Excellence Awards 2015, held in Warsaw’s Intercontinental Hotel. The awards ceremony was witnessed by a select group of senior European and Central European Manufacturing professionals; affirming the event’s status as a true landmark occasion for the manufacturing industry. Volkswagen, the biggest car manufacturer both in Germany and Europe, and one of world’s top-automobile sellers, with a strong manufacturing footprint in Poland, was one of the event’s big winners, collecting three major honours on the night for the company’s manufacturing excellence in Sustainability & Environment, Customer Relationship Management/Customer Service/Customer Satisfaction as well as the coveted Overall Manufacturer prize. Marek Foryński from Panattoni Europe was named this year’s Industry Professional, topping off a very successful night for the real estate developer, which also won BTS Developer of the Year, after scooping up all the project prizes for their BTS developments in Poland. “It is a great honour and privilege to win as many as six awards at such a prestigious competition,” commented Marek Foryński, BTS Group Managing Director at Panattoni Europe. “They are all special and exceptional. Each one is a testament to the great determination and professionalism across the entire Panattoni organisation.” Robert

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Dobrzycki, Managing Partner Panattoni Europe, also made no secret of his satisfaction with the prestigious and lucky six, adding: “Establishing the special BTS Group in 2008 was one of the best strategic decisions we have made in the ten years of our presence in the European market.” Zelmer, a manufacturer of Small Domestic Appliances, collected two awards, one for Marcin Tomkiewicz, who was voted Plant Manager of the Year, and another in the Business and Science category. Valeo, a leader in power and automation technologies that enable customers to improve their performance while lowering environmental impact picked up an award in the Quality Control category. In the Special Economic Zone category, Katowice Special Economic Zone, covering the four main cities in the Silesian region, was considered by the judges to the best because of its very good transportation network, accessibility to neighbouring countries, very good access to a qualified workforce, competitive greenfield prices, comparing to land prices outside the zone and its growing BPO/IT sector. BorgWarner, a leader in providing trusted, innovative products and solutions for the automobile sector, Nexteer Automotive Poland, a global steering and driveline business, and Gonvarri Steel Polska, a Steel Service centre, were also among the award winners. Aecom, a world leading engineering design firm, picked up the evening’s first award in

EuropaProperty CEE COMMERCIAL REAL ESTATE NEWS

September 2015

the Professional Service Provider category. Other Service providers awarded on the night included Cushman & Wakefield for Corporate Real Estate Consultancy and SPIE Polska won in the Facility Maintenance/ Property Management category. Tom Listowski, Partner, Head of Industrial Poland & CEE Corporate Client Relations, Cushman & Wakefield, said: “This award, which we are immensely proud to receive, confirms Cushman & Wakefield’s leading position in the industrial and logistics real estate sector in the CEE region. It proves that our dedicated and experienced team is committed to providing top class advisory services which has been recognized by global manufacturers operating in the market. We would like to sincerely thank our clients for their continued trust and cooperation.” Commenting on the event AECOM’s Ian Church, said: “Notwithstanding the fact that we won, it was an excellent means of efficiently meeting with the movers-andshakers from the world of CEE manufacturing. The balanced mix of clients and service providers gave AECOM a really great forum in which to share what we are doing, and with whom.” On behalf of our sponsors, judges and attendees, we offer our congratulations to all the winners. Foundations are already in place for next year’s event, which promises to be even better. The fourth annual CEE Manufacturing Excellence Awards will be held on June 16, 2016.

Manufacturing Excellence Winners Professional Service Provider AECOM

Sustainability and Environment Volkswagen Poznan

Facilities Maintenance/Property Management SPIE Polska

Business and Science Zelmer

Corporate Real Estate Consultancy Cushman & Wakefield

Product Design/Life Cycle Management BorgWarner Poland

BTS Developer/Contractor of the Year Panattoni Europe

Robotics/Automation Nexteer Automotive Poland

BTS Project of the Year - Small (under 20,000 sqm) Kellogg’s Production/Warehouse Facility - Panattoni Europe - Poland

Supply Chain Management Logistics Gonvarri Steel Polska

BTS Project of the Year - Medium (20,000 sqm to 40,000 sqm) Polaris Manufacturing Facility - Panattoni Europe - Poland

Quality Control Valeo Autosystemy

BTS Project of the Year - Large (over 40,000 sqm) Castorama Warehouse Facility - Panattoni Europe - Poland

Customer Relationship Management/Customer Service/ Customer Satisfaction Volkswagen Poznan

Fulfilment BTS Project of the Year Amazon Poznan - Panattoni Europe - Poland

Manufacturer of the Year Volkswagen Poznan

Special Economic Zone Katowice Special Economic Zone

Professional of the Year Marek Forynski - Panattoni Europe

Plant Manager Marcin Tomkiewicz – Zelmer

Next year’s event promises to be even bigger

Winner Volkswagen Polska

Panattoni wins six awards

Winner Zelmer

September 2015

Winner Aecom

CEE COMMERCIAL REAL ESTATE NEWS EuropaProperty

21

LATEST NEWS

Hungarian construction market to grow 5 percent in 2015

Budapest

Civil engineering and non-residential construction are the sectors most likely to drive Hungarian construction in the coming years. Thanks to the increasing number of tenders in the civil engineering sector, particularly transport infrastructure construction and environmental protectionrelated construction, Hungarian construction output is to see steady growth in the coming years. However, in 2016 the construction sector may witness some decline, being mostly result of the slow execution of projects from the new EU budget. According to a new report entitled “Construction sector in Hungary 2015 Development forecasts for 2015-2020” published by the analytical and research company PMR, following a drop of almost 9 percent year on year in 2012, Hungarian construction output recovered in both

2013 and 2014 growing by more than 14 percent year on year in each of the two years. The growth was driven mostly by civil engineering construction, which experienced an increase of over 24 percent year on year in 2014. In non-residential construction, following an estimated rise of less than 3 percent in 2014, Hungarian non-residential construction is expected to experience nearly 5 percent increase in 2015, as a number of projects, particularly on the warehouse and office markets, are expected to begin. On the other hand, the non-residential subgroup which is likely to lag behind all others is retail facility construction. The renewal of the ban on the construction of large shopping malls last December dashed hopes of recovery among investors in this area. As a result, no major retail facility projects were unveiled in 2014,

a year which saw no facilities completed in this field. Most of the output in the retail construction arena is accounted for by small developments in small towns. Road construction is forecast to be the main generator of funding and orders for the Hungarian construction industry in the years to come. The EU budget for the years 2014-2020, which is relatively favourable for Hungary, along with the expected high rate of absorption, will stimulate public investment and employment in the economy. As a result, the amount invested in civil engineering structures will still be relatively substantial in the medium term. However, in 2016, it is expected that expenditures covered by EU funds will be reduced significantly because of the end of the financing period for projects under the 2007-2013 EU budget. This will have a detrimental effect on public investment and, consequently, civil engineering construction. However, there are some signs of a possible slowdown. In the first three months of 2015 the construction confidence indicator began to deteriorate again, mostly driven by slowgrowing prices and still massive competition for a low number of orders.

Riviera

Union Investment has purchased the Riviera shopping centre in Gdynia. The volume of the transaction is €291 million, with potential increase through earn outs up to €300 million. International advisory companies Colliers and JLL co-exclusively represented the vendor – Foncière Euris and its subsidiary Rallye – in this transaction.

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Neil Gregory-Eaves, International Director at Colliers, added: “Demand for regionally dominant centres in Poland is growing and now attracting the top investors globally. Investor interest in Riviera originated from across the EMEA and Asia and the fierce competition for the property was reflected in pricing, a new benchmark in Poland.”

EuropaProperty CEE COMMERCIAL REAL ESTATE NEWS

September 2015

www.ManufacturingAwards.eu

Official Patronage:

Union Investment acquires Riviera shopping centre Agata Sekuła, International Director, Head of Retail Investment CEE at JLL, commented: “We are honoured to have advised on this transaction which is - to date - the biggest deal this year not only in the retail segment but across all sectors of Poland’s commercial real estate market. The sale of Riviera in Gdynia illustrates the strong interest that investors continue to have in core retail properties located in Poland’s major agglomerations.”

#CEEManufacturingAwards

Premier Partner:

Sponsors:

Jury Sponsor:

With over 70,000 sqm GLA and more than 230 shops, Riviera is the largest shopping and entertainment centre in the Tri-City region (Gdańsk, Gdynia, Sopot). The scheme boasts an extensive retail and services offer including leading Polish and international brands such as Bershka, H&M, Mango, Massimo Dutti, Pull & Bear, Reserved, Stradivarius, Zara, Van Graaf, as well as an Auchan hypermarket. A Helios multiplex cinema and numerous restaurants contribute to Riviera’s welldeveloped entertainment area. The scheme was commissioned for use in October 2013. Mayland Real Estate is the acting Property Manager for the Riviera shopping centre.

PR Partners:

Whisky Partner:

Luxury Spirit Partner:

Auditor:

Exclusive Business Club Partner:

Cocktail Partners:

Award Sponsor:

Supporting Partners:

International Media Partner:

Media Partners:

Charity Partner:

Car Rental Partner:

Beer Partner:

For more information about the nomination process/sponsorship opportunities/attending the CEE Manufacturing Excellence Awards & Strategy Summit that will take place during the day of the event, please contact: For more information about the nomination process/sponsorship opportunities/attending the CEE Manufacturing Excellence Awards & Strategy Summit: Event Director / Craig Smith / +48 604 144 769 / [email protected] Anna Kaliszewska / Head of Nominations, +48 22 586 30 19, [email protected]

Event Director / Craig Smith / +48 604 144 769 / [email protected] Anna Kaliszewska / Head of Nominations, +48 22 586 30 19, [email protected]

WAREHOUSE NEWS

Demand for logistics remains low in Ukraine

Warehouse vacancy is on the rise

Due to suppressed business dynamics in Ukraine, the market-wide vacancy in the logistics property sector in the Greater Kyiv area increased to 8.1 percent at the end of the first quarter of 2015, revealed DTZ in its latest market report. In late March 2015, total stock of modern warehousing and logistics space in the Greater Kyiv area amounted to around 1,730,000 sqm (GLA). This figure includes approximately 340,140 sqm (GLA) of modern specialised chilled & frozen and chemical warehousing facilities. In the first quarter of 2015, the new supply on the logistics property market in the Greater Kyiv area reached approximately 14,000 sqm (GLA) with the warehousing complex FM Logistic (phase 2) delivered during the period. Overall development activity in the warehousing and logistics property sector in the Greater Kyiv area remains generally low. DTZ projects that during the remaining three quarters of the year new logistics supply in the Greater Kyiv area may reach around 77,000 sqm (GLA). All properties in the sector, scheduled for delivery in Kyiv and its suburbs in AprilDecember 2015, are planned for owneroccupation purposes, whilst delivery of several speculative logistics schemes was postponed until the market conditions improve. In January-March 2015, take-up in the warehousing and logistics space in the Greater Kyiv area amounted to around

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39,500 sq m (GLA), which is similar to the figure registered in the first quarter 2014. The demand for quality warehousing and logistics space in the Greater Kyiv area in the first quarter of 2015 was driven by the companies operating in the logistics and transportation sector, as well as retail companies, which cumulatively accounted for approximately 70 percent of total takeup registered during the first three months of the year. In January-March 2015, the occupier demand was heavily dominated by relocations with the intentions of existing tenants to obtain better lease terms and secure lower rental payments. Similar to 2014, new market entries were almost absent in the first quarter of 2015. As of late March 2015, primary vacancy in the logistics property sector in the Greater Kyiv area reached approximately 8.1 percent, increasing by 2 percent compared to the figure registered at the end of 2014. Increase in primary vacancy in the sector resulted from weakened occupier demand for logistics and warehousing space in the Greater Kyiv area, due to very challenging economic conditions in Ukraine, as well as a decrease in imports in response to the devaluation of the national currency and drop in purchasing power of the country’s population. In the first quarter of 2015, prime asking rents for warehousing and logistics space in the Greater Kyiv area remained unchanged compared to late 2014. As of March 2015, monthly asking rents varied from USD 3 to

EuropaProperty CEE COMMERCIAL REAL ESTATE NEWS

September 2015

USD 5 per sqm for prime warehousing space in the Greater Kyiv area, while for B-class properties average monthly rent was at around USD 2 per sqm. Achievable rents in the sector mainly depend on the quality of space, its location and accessibility, as well as general lease terms.

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In the first quarter of 2015, on the logistics property market in the Greater Kyiv area several new leases were signed in hryvnas without the rent being linked to the US dollar or Euro. At the same time, some landlords are offering incentives in the form of rental discounts to retain the tenants, which signed lease agreements prior to 2015. Due to poor outlook for economic development and business dynamics in Ukraine throughout 2015, DTZ expects that occupier demand for quality modern warehousing space in the Greater Kyiv area will remain low during the remainder of the year. Despite the weak demand in the sector, and given relatively low volumes of short-term speculative delivery pipeline, vacancy in the logistics property sector in the Greater Kyiv area is forecast to remain below 10 percent during the remainder of 2015. DTZ projects that, other things being equal, during the remainder of 2015 rents for prime warehousing space in the Greater Kyiv area will be subject to further downward pressure in the US dollar equivalent, and various incentives will be increasingly offered by the landlords in the sector to retain their tenants.

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Go inside a world of retail

PEOPLE ON THE MOVE

New Chief Operating Officer CEE at JLL

PEOPLE ON THE MOVE

opening night 17 Nov. 2015

Małgorzata Żółtowska has been appointed Chief Operating Officer CEE at JLL. Her responsibilities will include taking care of the company’s increase in effectiveness in the region and supervision of areas such as HR, marketing and corporate social responsibility. In her new position, Małgorzata Żółtowska will also be responsible for the legal department, policy compliance and procurement. She combines this new COO duties and responsibilities with her existing position as Head of Valuations, CEE. In addition to her new role, she will continue her commitment to lead a team of over 40 valuers that provides strategic complex services across the CEE region. Małgorzata replaces Joanna Gajewska - Sokołowska as Operations Manager CEE, who has been appointed Director of EMEA Lease Administration and Corporate Solutions Centre of Excellence at JLL.

18-20 nov. 2015 Cannes, France

Join more than 8,400 international retail & real estate leaders

CBRE appoints Daniel Bienias as Managing Director, Poland CBRE has confirmed that Daniel Bienias will become Managing Director of its Polish business. Mr. Bienias, who is currently Head of Tenant Representation for CBRE in Poland, has been with the company for the last five years. Daniel will succeed Colin Waddell who is relocating to the UK to take up a senior management position within the business. Colin joined CBRE in 2000 and has led its Polish office since 2010, overseeing a period of rapid expansion for the business particularly growing its Capital Markets and Leasing divisions as well as launching new teams such as Asset Services and Workplace Strategy in country.

The ultimate event to connect, transact, learn and share

JLL’s management board appoints Agata Sekuła as International Director Agata Sekuła, Head of Retail Investment CEE at JLL, has been appointed from Regional Director to International Director – JLL’s most senior leadership level. She is the second person and the first woman from JLL’s CEE structure, as well as one of 45 women globally to hold such a senior position in the company. Agata Sekuła has over 17 years’ experience in the CEE retail investment market. She has participated in numerous financing deals including development debt, investment debt, equity raising, sales and acquisition and sale and leaseback transactions as well as portfolio deals. She is one of the most recognized retail experts in the CEE region. JLL’s team specializing in retail investment transactions finalized deals in excess of €7 billion under her leadership. Agata graduated in Law and Administration from the University of Warsaw.

Maricn Zuchniewicz has joined DTZ’s Industrial & Logistics Agency as an Associate Director. Marcin Zuchniewicz graduated from the Warsaw School of Economics and has over 7 years’ experience in the real estate sector, as well as strategic and economic consulting, which he gained in companies such as DTZ, KPMG, and PwC Poland. Over the course of his career, Marcin has worked on many projects for clients both from real estate and finance sectors, as well as public institutions, where his duties included project feasibility strategy development, market research, and due diligence studies.

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EuropaProperty CEE COMMERCIAL REAL ESTATE NEWS

September 2015

MAPIC is a registered trademark of Reed MIDEM- All rights reserved.

Marcin Zuchniewicz joins DTZ’s Industrial & Logistics Agency

September 2015

mapic.com

CEE COMMERCIAL REAL ESTATE NEWS EuropaProperty

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GRI EUROPE

Pa ri s 10-11 se P te mb e r

The 18th Annual

Premier Media Sp. z o.o. Al. Jerozolimskie 81 room 13.01A, 02-001 Warsaw Publisher Craig Smith [email protected] +48 604 144 769 Editorial Director Winston Norman [email protected] +48 (22) 586 30 30 Poland Country Manager Anna Kaliszewska [email protected] +48 601 382 667 Hungary Country Manager Gary J. Morrell [email protected] +36 121 734 251 111 Romania Country Manager Mihaela Mazilescu [email protected] +40 21 781 25 93 +40 722 517 680 Russia CIS Country Office Mikhail Barkovskiy [email protected] +48 697 401 397 Marketing Department [email protected] + 48 (22) 586 30 29

Real Estate Event Calendar 16-18 September CoreNet Global EMEA Summit London www.corenetglobal.org 6 October PLGBC Green Building Symposium Copernicus Science Centrum, Warsaw www.plgbc.org.pl October 5–7 Expo Real 18th International Trade Fair for Property and Investment Munich, Germany www.exporeal.net

9-11 November Mediterranean Resort & Hotel Real Estate Forum, NH Collection Eurobuilding Madrid www.mrandh.com 18-20 November MAPIC 2015 the international real property market, Palais des Festivals, Cannes, France www.mapic.com 25/26 November EEA Forum and Project Awards Fairmont Hotel, Kyiv, Ukraine www.ureclub.com

14-15 October Outsourcing Fair EXPO XXI Warsaw www.targioutsourcingu.pl

28 January 2016 8th Annual CEE Retail Awards InterContinental, Warsaw, Poland www.retailawards.eu

15 October PRCH Retail Awards Gala Warsaw, Poland www.prch.org.pl

31 May – 1 June 2016 Turkey & Neighbours Hotel Investment Conference Hilton Istanbul Bomonti Hotel & Conference Centre www.cathic.com

26-28 October Russia & CIS Hotel Investment Conference, Azimut Moscow Olympic Hotel www.russia-cisconference.com 29 October 5th Annual EuropaProperty CEE Investment Awards InterContinental, Warsaw, Poland www.ceeinvestmentawards.com

InterContinental Paris Le Grand Incorporating...

SUMMIT

FRancE

2015

GRI 2015

EuropE’s LargEst gathEring of sEnior rEaL EstatE LEadErs 450+

40+

Senior level real estate leaders

Interactive discussions

30+

10

Countries represented by attendees

Discussions en français

PARtICIPANtS INClUDE:

ArnAud MAlbos

renAud Jezequel

Peter WinstAnley

SVP, Investments, Europe Ivanhoé CambrIdge europe France

MD and Head of RE heLaba France

dAVid M. brush

rAlf KlAnn

CIO merLIn properTIes Spain

Head of Risk, Europe adIa UAE

Managing Director deuTsChe asseT & WeaLTh managemenT Germany

JiM GArMAn

dAVid MAtheson

MD & Global co-Head of RE in the Merchant Banking Division goLdman saChs UK

w w w. e u r o p a p r o p e r t y. c o m

Jörn stobbe

President, France TIaa henderson reaL esTaTe France

SVP - Managing Director, Investments Europe oxFord properTIes group UK

roelie VAn WiJK

VAdiM KorsAKoV

CEO TKp InvesTmenTs Netherlands

CIO pensIon Fund bLagososToyanIe Russia

Anthony Myers

KAty rice

Senior MD & Head of RE Europe bLaCKsTone UK

MD & CFO W.p. Carey USA

DISCUSSION tOPICS INClUDE:

Structured Financing



Student Housing



Core Markets (Germany, UK, Nordics, Benelux, France)



Development Funding

Offices • Asset Management • Retail • Global Equity • Investment Opportunities (Spain, CEE, Secondary Markets & Assets)... For queries or to register please contact: Ronny GotthaRdt



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Deutsche GRI

Wohnen 2015

berlin 25-26 noveMber

IdentIfyIng opportunItIes In the german resIdentIal market Exclusively Senior Level Participants

unique Interactive Discussion Format

Including Benelux & Austria Markets

Quality Networking

PARTICIPANTS INCLuDE:

Vorstand WertGrunD iMMobilien Germany

Director Asset Management rounD Hill capital Germany

Marcus EilErs

GEorG JEWGrafoW

rainEr schMitz

daniEl riEdl

GErhard MEitinGEr

thoMas MEyEr

DISCOVER 12 OUTSOURCING SECTORS AND MORE THEN 150 SUBSECTORS IN ONE PLACE

TAKE PART IN THE MOST IMPORTANT BUSINESS EVENT IN POLAND

EXPERIENCE A RICH RANGE OF INNOVATIVE OUTSOURCING SERVICES

TAKE PART IN NETWORKING

More information and tickets: www.targioutsourcingu.pl AT THE EXHIBITION INVITE:

GErald KlincK

Chief Controlling Officer DeutscHe anninGton iMMobilien se Germany

sascha WilhElM

Chief Operating Officer corestate capital aG Germany

TAKE PART IN CONFERENCES AND INDUSTRY MEETINGS

Senior Portfoliomanager provinzial norDWest asset ManaGeMent GMbH Germany

OPTIMIZE BUSINESS PROCESSES IN YOUR COMPANY

CEO real i.s. Germany

CEO buWoG Group Austria

MD, Head of Real Estate Finance Germany pbb DeutscHe pfanDbriefbank Germany

PEtEr BrocK

Managing Director GrainGer DeutscHlanD Germany

BErnd BEchhEiM

Head of Asset Management & Transactions aberDeen asset ManaGeMent DeutscHlanD aG Germany

DISCuSSION TOPICS INCLuDE:

Demographic Change • Student Housing • Rental Cap • Healthcare / Social Real Estate • Platforms & Joint Ventures • Portfolio Transactions across borders B & C Cities • Urban opportunities • Many region-specific discussions

For queries or to register please contact: Christoph sauerwein



chris.sauer [email protected]

uK Tel: +44 207 121 5098

w w w.globalrealestate.org/DeutscheWohnen2015

Since 1998, GRI meetings provide a forum for the world’s leading real estate players to develop valuable relationships, find new business par tners, and strengthen their global networks.

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