Heitman, a multi-national real estate investment management firm, today announced the establishment of a joint venture with Polimeni International (“Polimeni”), a major commercial property developer based in New York. The joint venture was formed to develop a €135 million ($160 million) portfolio of hypermarket-anchored retail centers across Poland on behalf of Heitman’s Central Europe Property Partners II (“HCEPP II”) investment fund.
This joint venture expects to develop shopping centers in Kalisz, Poznan, Glogow, Gniezno and Grudziadz, as well as other secondary and tertiary markets throughout the country. The centers will range in size from 21,400 square meters (210,000 square feet) to 36,205 square meters (360,205 square feet). The total developed area will comprise approximately 146,000 square meters (1,460,000 square feet). The developments are scheduled to start in early 2004 and should be completed by mid-2006.
Mr. Christopher Merrill, Managing Director of Heitman’s International Private Equity Group, commented, “The joint venture with Polimeni reflects our confidence in the Central European property markets and our desire to increase our investment in retail properties in the region.”
Heitman was an early entrant into the Central European property markets in the mid-nineties, and is now one of the area’s leading real estate investment managers with the largest on-the-ground presence. This venture will increase the firm’s ownership to 23 shopping malls in Central Europe, and according to Merrill, is an important one for the firm as it looks to increase its presence there.
Polimeni is currently involved in the pre-development and leasing phases of five projects in Poland totalling approximately 150,000 square meters (1,500,000 square feet). It has built an on-the-ground presence there with local offices in Warsaw and Gdynia.
“More than six years ago, Polimeni International realized that economic and social conditions in Poland were ripe for retail development, and has been active in the region ever since.” said Vincent Polimeni, Chairman and CEO of The Polimeni Organization. “We’ve enjoyed major successes in Poland, and look forward to yet another exciting initiative through our joint venture with Heitman.”
Polimeni recently completed development on the “Konin Lakeside Galeria,” a 25,000 square meter shopping center in Konin, Poland, which is now 98% leased to major tenants such as Hypernova, a retailer owned by the Dutch supermarket chain, Ahold; NOMI, a home retailer similar to Home Depot; and a multiplex cinema. Merrill and Polimeni confirmed that the partnership’s planned centers will incorporate similar concepts.
In fact, the NOMI store located in Konin is the retailer’s highest grossing store in Poland. “This is one of the barometers that has us very excited about doing similar projects in secondary cities in Poland,” says Polimeni International President, Phil Okun. He also points out that many retailers in larger cities in Poland are now looking at entering secondary markets. Okun cites major retailers and Polimeni tenants Reserved, a European clothing chain, and Apart, a European jewellery chain, as examples.
“The success of the Konin project has given us confidence in Polimeni’s expertise as a retail developer. Working together, we feel certain that our upcoming projects will be just as successful,” said Merrill.