Auchan leases 170,000 m2 of Valad's Polish assets

French hypermarket chain Auchan has signed seven leases in Poland with investment manager Valad Europe and one lease with Schiever Polska totalling 170,000 m2.

The eight new leases represent the largest Polish retail letting so far this year, Valad Europe said in a press release. The leases, which have an average weighted unexpired lease term of 12 years, are the first signed by Valad Europe with the French retail giant.

'It is a great opportunity to develop the relationship with Auchan,' commented Thierry Leleu, head of Funds Management at Valad Europe.

The deal was concluded behalf of Valad's Polish Retail Fund (VPRF).

During the last two years, Valad has implemented various asset management initiatives aimed at enhancing the overall value of the fund for its investors, including refurbishing both Szczecin Ster Shopping Centre and Rondo Shopping Centre in Bydgoszcz.

Commenting on the deal, Karol Pilniewicz, Valad Europe’s head of Central Europe, said: 'Auchan is one of several international retailers to have made a significant commitment to Poland in the past few months. As consumer spending continues to rise, we expect this trend to continue, and consequently, demand for modern retail space is likely to remain robust, especially outside of the major cities.'

According to Xavier Mouillard, head of Auchan's Poland Development Team, the agreement with Valad Europe gives the retailer the possibility to consolidate its model and leadership as a discounter in the country. 'This will create additional value in the long term for each of our companies and clients.'

Thierry Leleu, head of Funds Management at Valad Europe, said the Polish retail assets continue to provide attractive opportunities for investors. 'We are excited about the prospect of enhancing value further.'

Commenting on the fund's strategy, Leleu said the Group aims to sell around €300 mln of fund assets in the next 18 months, to take advantage of strong demand for income-producing assets in Poland. 'The investment market is very good at the moment, with more and more investors coming to the market from Germany but also from Asia and the US. These investors are looking for long-term income-producing assets and the occupancy rate in our fund is currently at 99%,' he noted.

'The retail market is also performing well, with only a slight downward rental pressure on non prime retail product,' Leleu added.

Auchan is directly replacing REAL at seven locations, including Centrum Janki, Warsaw; Korona Shopping Centre, Wroclaw; Rondo Shopping Centre, Bydgoszcz; Krokus Shopping Centre, Krakow; King Cross Praga Shopping Centre, Warsaw; Kometa Shopping Centre, Torun; and Tulipan Shopping Centre, Lodz. Schiever Polska has leased hypermarket space at Szczecin Ster Shopping Centre.

VPRF is a closed ended fund comprising six first generation shopping centres and three hypermarkets, totalling 300,000 m2, located in seven of Poland’s key cities including Warsaw, Kraków and Wroclaw.

Valad started managing VPRF in 2013 when it acquired the fund’s investment adviser and asset manager from GE Capital Real Estate.

Valad Europe is a diversified real estate manager with €5.3 bn of real estate assets and investment capacity across its 24 funds and mandates in Europe. The portfolio comprises in excess of 400 assets and approximately 3,700 tenants, managed by local teams totalling 180 people in 22 offices and 13 European countries.