Meyer Bergman is tapping into investor demand for core retail assets in Central and Eastern Europe by putting Galeria Katowicka in southwestern Poland on the market for over €300 mln.
The pan-European investment manager has mandated JLL's Polish business to sell the retail-led scheme, PropertyEU can reveal. Initially, we reported the indication price was in the region of €280 mln, but now it is believed to be in excess of €300 mln.
Both Meyer Bergman and JLL declined to confirm the move, which comes weeks after Meyer Bergman and Thor Equities enlisted the services of CBRE to market their joint venture asset, Burlington Arcade in London for €450 mln.
Although a smaller ticket size, the €300 mln-plus guide price for the 47,500 m2 Galeria Katowicka equates to at least a 25% increase on the attributed value of €240 mln when the scheme opened in September 2013. Over 67,000 people visited the shopping centre on the first day.
Galeria Katowicka is part of the regeneration of the centre of Katowice, the regional capital of Polish Silesia. Centred around the city's main square, the three-phase project comprised the redevelopment and renovation of the main railway station, a bus terminus and a separate mixed-use building.
The Meyer Bergman fund took full ownership of Galeria Katowicka in December 2015.
Joint venture with Neinver
Poland's state railway company PKP owned the land and the original goal was to modernise the train station which services 12 million passengers annually. Neinver subsequently won a tender to add the shopping centre, and Meyer Bergman's first fund, Meyer Bergman European Retail Partners I, became the main investor in the development joint venture in 2010.
With direct access to rail and bus stations, the shopping centre provides 220 retail units, restaurants and cafés over four floors, with a multiplex cinema on the fifth floor.
The centre has performed strongly since it opened. Sales growth increased by 19% in the first full-year of operation in 2014, and by 34% in 2015. Meyer Bergman recently announced Galeria Katowicka experienced a 13% increase in sales growth last year compared to 2015. Footfall rose by 8%, while the national average was -0.1%. In addition, Meyer Bergman and its centre manager Apsys signed 25 new leases last year which will lift Galeria Katowicka to full occupancy during 2017.
Significant interest expected
The retail asset is likely to attract significant interest among a wide range of investors as demand for modern, core shopping centres is running high in Poland and in other markets across CEE and South Eastern Europe.
South African investment managers, both listed and privately owned vehicles, have been the most active group of retail buyers in the region over the last two years.
Last summer Rockcastle, a Johannesburg-listed real estate company, agreed to acquire Bonarka City Center (BCC) in the southern Polish city of Krakow from Hungarian developer TriGranit for €361 mln. Rockcastle additionally purchased two Focus-branded shopping centres in Poland from Aviva Investors for €160 mln.
Rockcastle is currently finalising a merger with New European Property Investments, a Johannesburg-listed peer that pioneered South African investment in the CEE real estate markets. The merger creates a new property investment powerhouse in CEE with over €3 bn of assets under management.
Another active retail buyer is Echo Polska Properties (EPP), which in recent weeks struck a deal with Blackstone to acquire four retail assets in Poland for €167 mln.
EPP is a REIT-like investment platform built around standing asset spun off from Polish developer Echo Investments. South Africa listed company Redefine Properties took a 75% in the EPP portfolio in 2016, and EPP went on to list in Johannesburg and Luxembourg.
