The FINANCIAL -- The Slovakian developer HB Reavis commenced the construction of an office building in Warsaw.
The company also signed an agreement with Polish State Railways (PKP) regarding an investment project at the Warsaw West (Warszawa Zachodnia) railway station. Polish Construction Review was told that the developer noted positive growth in commercial space market in Poland and would like to take advantage of the moment and strengthen its position in this market.
The developer started the Konstruktorska Business Center office development (near the junction of Konstruktorska and Suwak Streets in Warsaw) at the beginning of May 2011. A seven-storey building will be erected as part of the project, whose lease area will be 48,000 m². Tenants will be also able to use a two-storey car park for 1,070 vehicles. The complex will also include service points, restaurants and a gym. The project is scheduled for delivery in Q1 2013; its cost is estimated at €100m.
In addition, HB Reavis recently signed a contract with PKP concerning the construction of the Warsaw West railway station and an office, service and retail complex in its vicinity. The station building will have a floor space of over 1,200 m², while the planned business centre will be composed of seven buildings with the total space of 54,000 m². The station construction process will continue until Q4 2014, and the whole complex will be ready by 2017. The overall cost of the project will amount to approx. €110m.
The company also considers the construction of a shopping centre in Kielce, which would be built on a site belonging to the former PKS (Car Communication Enterprise). The acquisition of land for the project is expected to be wrapped up in one or two months. A final decision on the purpose of the planned facility will be made after a due diligence study. Polish Construction Review was told by Maria Juritkova of HB Reavis that the developer was of the opinion that there is enough space in the centre of Kielce to build a reasonably-sized commercial facility.
The developer also launched the first real estate fund. It comprises two office buildings, two logistics parks and a shopping centre in Slovakia with the aggregate value of €165m. The target value of the fund is to be approx. €330m, and the company will have a 20-25% interest in the fund. Annual yield on the project is expected to amount to 11%, half of which will be distributed to investors as a dividend. The company’s senior management expects that it will be able to raise €100m from investors – these funds are to be used to acquire real estate mostly in Prague and Warsaw.
The developer plans that a second, larger fund will be established by the end of 2011 and it will include fewer facilities constructed by the company. In the opinion of the company’s senior management, the funds may not be exposed to the risk related to developers' operations, so only completed and leased out projects will participate in them. The fund will invest in commercial real estate in the Czech Republic, Poland, Slovakia and Hungary.
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