Coffee with Craig Show – daily CRE news covering the CEE region, Friday, June 10 with Winston Norman, Editor and Chief of EuropaProperty.com.
AFI acquires 70 percent share of Towarowa 22
Griffin Capital Partners has acted as a transaction manager and advised EPP on the sale of the 70 percent share of Towarowa 22 to AFI Europe, with the total plot value exceeding €180 million. The transaction was one of the key parts of implementing EPP’s new strategy, which focused on reducing the leverage on the company’s balance sheet.
Towarowa 22 is an investment plot with an area of 6.5 ha. The area is now intended for an office and residential mixed-use development.
The current JV partners, AFI Europe and Echo Investment will jointly participate in the development of the office and PRS parts of the complex. The investment will offer more than 200,000 sqm GLA, out of which 50 percent with office function and 50 percent of residential spaces (PRS and residential for sale). It shall be a landmark, city-shaping destination project, with an aim to repeat the success of the internationally recognized Warsaw Brewery mixed-use investment.
“Griffin’s vital role as a transaction advisor to EPP and as catalysator for the overall complex development joint venture between AFI Europe and Echo Investment is not only satisfying in getting the deal successfully over the line but being involved in one if not the largest urban inner-city development projects in a European capital city,” said Nebil Senman, Managing Partner at Griffin Capital Partners.
Demand for offices in Prague returns to pre-pandemic levels
Colliers published a survey of the Prague office market for the first quarter of 2022. According to this survey, there was a further increase in vacancy, which increased across Prague. However, gross take-up recorded a year-on-year increase of 44 percent, and thus returned to pre-pandemic levels. The increase in prices throughout the city is still felt especially in construction projects, mainly due to rising costs for materials and construction work.
The first quarter of this year was very successful, especially in terms of gross take-up. With a total of 135,600 sqm, it was the highest volume ever recorded during the first quarter.
“A year-on-year increase of 44 percent shows that we are back at pre-pandemic levels and the demand for offices seems unscathed,” says Josef Stanko an analyst at the consulting company Colliers.
Despite the growth in gross take-up, there was a further increase in vacancy in the first quarter of this year, which increased by 60 basis points to 8.4 percent and represents a total of 315,300 sqm. The vacancy has increased throughout the entire city in recent quarters, but the largest is located within Prague 4.
Prime headline rents in Prague range between €24.00 and €24.50. This citywide increase can still be felt, especially on projects under construction, largely thanks to the rising cost of materials and labour.
“Due to weak construction, the market will remain balanced between landlords and tenants, respectively will be more inclined to landlords. Tenants will not have enough choice of new buildings in popular locations and will extend their leases in existing buildings,” says Petr Žalský, Head of Office Department at Colliers.
Romanian retailer Vagabond announces its first store in London
CBRE Romania secured for the Romanian retailer Vagabond Studio its first international location, in one of the largest shopping centres in London, under the brand “Made by Society”. Vagabond Studio is the first Romanian retailer that entered the British market assisted by a real estate consultant from Romania, following an investment of €800,000.
The store, which opened this May, is located in Westfield Stratford City. This is the largest urban shopping centre in the UK by land and the 4th-largest shopping centre in the country by retail space.
“It is a great satisfaction that, after advising a series of top brands to enter the CEE or Romania markets, CBRE Romania had the opportunity to assist a true champion of the local retailing its launching on the most competitive market in Europe,” says Carmen Ravon, Head of Retail Occupiers CEE at CBRE.
Vagabond Studio’s decision to expand internationally was a natural step for the company, considering the large number and positive reaction of Western shoppers who visited the stores in Romania.
“We are very excited that “Made by society” penetrated new markets and we are proud that a Romanian brand is so successful abroad, as well,” says Darian Vicol – CEO of Vagabond Studio.
PKP Cargo takes space in DL Tower
Several thousand square meters of office space have been leased by PKP Cargo SA in the DL Tower office building in Katowice. The building was commissioned at the end of March 2022 and delivered 17,000 sqm to the Silesian market. DL Tower was built as part of a mixed-use project, which will ultimately include commercial, hotel and service functions in addition to the dominant office function. The entire complex will provide over 45,000 sqm of modern spaces to the market. The DL Tower office building is currently 90 percent leased. Advanced talks on the remaining vacant space are underway. The building is BREEAM certified.
“The rental of four floors of office space by PKP Cargo is a confirmation of the high quality of our building. DL Tower, apart from high quality, is characterized by a convenient location and very good communication with other districts of the city and other cities of the Silesian agglomeration,” says Dominik Leszczyński, CEO of DL Invest Group. “We want to create a real city-forming facility that will make the district’s offer more attractive.”