No solution in sight for Zlote Tarasy ownership wrangle

ING Real Estate still has no clarity on when it will be able to transfer a stake in the Zlote Tarasy (Golden Terraces) shopping centre in central Warsaw to Rodamco Europe. During a press tour of the shopping centre on Wednesday, Menno Maas, ceo of ING RE's Development division, conceded that a solution is still not in sight. 'We are in ongoing talks with the Mayor of Warsaw and Rodamco', he said. The press tour was held on the fringes of the European conference of the International Council of Shopping Centers.

In February this year, it was reported ING RE faced a new delay in acquiring the 23.15% stake in the centre held by the Warsaw municipality. ING RE needs the stake to fulfil its obligations to Rodamco Europe, which has an option to buy a 50% stake in the project. The city council wants to await the outcome of an assessment of the project before determining the sale price. This could delay the sale until after the summer.

Last month, Maas told Dutch weekly FEM Business that ING RE will compensate Rodamco Europe based on the profits generated by Zlote Tarasy. He said the arrangement would continue until ING RE is in a position to sell Rodamco Europe its agreed stake in the centre.

The retail part of Zlote Tarasy opened on 7 February and has since attracted three million visitors. The mall, which was developed by ING RE in a public private partnership with Warsaw municipality, was originally due to open in 2005. ING RE has blamed repeated missed deadlines on court action by environmentalists and subsequent construction delays. The occupancy rate for the retail units stands at 96%.

The retail part of Zlote Tarasy has a gross lettable area of 63,000 m². The total complex, which includes 45,000 m² of office space and an eight-screen cinema, has a surface area of 205,000 m². The cinema and half of the office space are scheduled to open in July this year.

ING RE is also developing two residential projects in Poland. Marcel Kooij, president of the management board of Zlote Tarasy, stressed that all major projects involving multiple partners may have minor difficulties, but said he was confident that the new projects would not run into any major problems.

The first project is Parkowe Wzgorze in the south of Poland near Krakow. It involves 150 houses to be constructed on 15-hectare plot by 2009. The first phase has been sold. Phase II starts this year and involves 50 homes. The second project will be on 4 hectares of land bought by ING RE near to Katowice. The plans for the project are being developed.