Develia has signed a letter of intent on a joint venture with Hillwood Polska regarding the intention to jointly invest in a property located in Malina near Wrocław, involving the construction of a logistics centre with an area of around 400,000 sqm of GLA. The estimated value of the entire project will exceed PLN 1.5 billion.
The letter of intent sets out the principles of cooperation between Develia and Hillwood Polska in the construction of a logistics park with the necessary technical and road infrastructure. The owner of the property on which the logistics centre will be built is a subsidiary of Develia. The project will be implemented in at least four stages, therefore the letter of intent provides for the phased sale of the land to a special purpose vehicle in which Develia will own 25 percent of the shares. The developer estimates that the revenue from the sale of the entire land property will amount to approximately €35 million. In the basic scenario, Develia does not envisage any additional financial involvement in the construction of a logistics centre.
The project parameters will be established based on the business plan adopted during the joint venture agreement negotiations. Its implementation requires cooperation from partners at all stages – from obtaining the necessary administrative decisions, through construction, ending with the commercialization of the facility. The project will draw on the experience of both companies, but the operational management will be carried out by the Hillwood team.
“Establishing cooperation with Hillwood Polska in order to build a logistics park on our land in Malina is another element of Develia’s strategy. We are striving to maximize the value as part of the divestment of the asset that the company bought in 2007, and the letter of intent is the first step in this direction. In addition to the income from the sale of land, Develia will have a share in the profits from this project, which should be completed by 2029,” says Andrzej Oślizło, president of Develia. “Together with our partner, we are conducting talks with local authorities about the change of land use, which will enable the implementation of the project. We hope that we will be able to work out an optimal solution.”
“The implementation of the project in Malina is a step towards expanding our offer in the vicinity of Wrocław. Our successes in conducting projects in the joint venture formula will allow us to optimize the results of both partners,” says Hubert Michalak, President of Hillwood Polska. “The logistics park, which we will build in cooperation with Develia, will be our fifth warehouse centre in this area. Wrocław and the whole of Lower Silesia enjoy great interest among tenants, especially companies from the e-commerce and logistics sectors. As indicated by the data for the last quarter of last year, it is the third-largest market in the country in terms of demand for modern warehouse space.”
