Arcapita Bank B.S.C.(c), a leading international investment firm headquartered in Bahrain, has announced that it and its affiliates have formed two joint ventures with Layetana Developments, a leading Spanish residential developer, to construct approximately 1,500 mid-income apartments in central Warsaw, for a total development cost of over PLN 1.1 billion (c. €270m).
Arcapita and Layetana will co-invest in the acquisition of land, development and marketing for two separate projects, located in the sought after residential districts of Mokotów and ¯oliborz, and aimed at the growing market of middle income Polish households. For implementation, the joint ventures will draw on Layetana's knowledge of the Polish market and excellent development track record, evidenced in their portfolio of iconic and well-designed buildings. The joint ventures will be managed from Layetana's offices in Warsaw and Barcelona.
Arcapita's partnership with Layetana is similar to other partnerships that the bank has developed elsewhere in the world, resulting in a range of successful residential and commercial real estate ventures in the US, Europe, the GCC and Asia, with a transaction value to date of over $7.5 billion. Layetana and Arcapita intend to use this partnership as a platform for subsequent joint ventures to develop Layetana's pipeline of projects in Poland.
Equity for the projects will be provided by Arcapita and Layetana's development fund. The financing facilities for the Mokotów project are being provided by KBC Bank. The financing facilities for the ¯oliborz project are expected to close in October 2007.
These projects mark the beginning of Arcapita and Layetana's geographic expansion into the growing markets of Central and Eastern Europe, where economic growth, favorable demographics and the emergence of the residential mortgage market offer attractive real estate investment opportunities.
Commenting on the joint ventures, Muhannad M. Abulhasan, head of Arcapita's European Real Estate business, and Alfredo Laffitte, Layetana's Chief Operating Officer, said, "We are very pleased to have created this partnership. The joint venture model has proved successful for both Arcapita and Layetana elsewhere in the world and we look forward to drawing upon our joint expertise to develop our presence in this attractive market. We plan to develop this partnership further across Central and Eastern Europe in the future and capture some of the exciting opportunities that we believe will become available across the region."
Source: Tulchan
