Foncière Euris, Rallye confirm sale of €300m Polish mall

A consortium led by French listed firm Foncière Euris has confirmed the sale of the Riviera mall in the Polish city of Gdynia, as tipped by PropertyEU in March.

Foncière Euris and investment partner Rallye said on Thursday that they have signed an agreement to sell the mall to an unnamed buyer.

The deal - one of the largest transactions in the Polish retail property market this year - amounts to a total of €291 mln, which may increase to up to €300 mln, depending on the centre's performance over the next three years. The transaction reflects a capitalisation rate of stabilized net operating income of 5.4%,

The 70,000 m2 mall is located close to the city centre in the Tricity region and comprises 250 shops, including an Auchan hypermarket as well as a 1,200-seat cinema and 1,750 parking spaces.

Foncière Euris owns 67,5% of the scheme while Rallye holds 22,5% and Casino the remaining 10%.

Closing of the deal is expected for the end of August.

Developed by Mayland Real Estate with €137 mln in finance provided by Polish Bank Pekao and Bank Zachodni, the scheme has been revamped and extended before reopening in October 2013. It is nearly fully let.

Mayland, a unit of Casino Group and the developer of Riviera, will retain the management of the asset.

Agents Colliers International and JLL advised Fonciere Euris on the sale.

'Demand for regionally dominant centers 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,' said Neil Gregory-Eaves, International Director at Colliers.

Foncière Euris has long been active in the Polish market where it already invested in Manufaktura in Lódz and Posnania in Poznañ. Manufaktura was sold in October 2012 to Union Investment Real Estate for €390 mln.

Posnania represents the largest retail project currently under way in Poland. The mall, representing an investment of €300 mln, covers 100,000 m2 over 300 shops, and is slated for delivery in the second half of 2016.

Foncière Euris has also recently acquired Kraków’s Serenada shopping centre project for an investment of €140 mln. The 43,000 m2 mall, developed by Mayland, was financed by banks Unicredit’s Pekao and Santander and is slated for delivery in September 2016.