PRESS ABOUT US

Local heroes

Eurobuild Poland 12/12/2005

Local operators have been untroubled by large international investors for many years, taking advantage of the lack of competition to open malls and office buildings. But things are changing now that newcomers with foreign capital and experienced in shopping projects have made their presence felt.

Lublin firms carry out bold developments without outsider help

Lublin is a provincial capital of 147,500 square kilometers, with a population of around 400,000 and is also a major Polish academic centre. It has a delightful old town and a lively shopping, office and housing real estate market. Hypermarket chains were the only companies interested in investing in the city until recently, but the potential of the largest city in eastern Poland has now been noted by developers, who had previously been focusing their attention on Warsaw. Kraków, Poznań and Wrocław. Lublin’s home-grown businesses have not been wasting time, however, and have actively invested in the property market. Though their projects have certainly not been huge, they have become successful and worthy additions to the city’s landscape.

To the top with Olimp

Galeria Olimp situated on the exit road towards Białystok , is one of Lublin’s oldest and best known shopping centres. It is owned by Transhurt, a family company set up by Tomasz and Grzegorz  Dębiec, and its major tenant is a Aldik supermarket – also Lublin – based. Adam Kleczkowski, the owner of the Jerzy Kleczkowski M.A. Real Estate Office, goes into more details: „Olimp was constructed in three stages, the last of which was opened in October this year. Now customers can shop from around 150 retailers, including Adidas, Puma, Venezia and Simple outlets and showrooms. I am aware that the Dębiec brothers are now thinking seriously of enlarging their premises, as they are not restricted by a lack of land.”

Local businessman Jarosław Urban this year opened the Galeria Parada mall (around 5,000 sqm) on ul. Nałęczowska, while the Rusałka company started to operate a shopping complex of the same name on ul. Rusałka, specializing in interior décor items. A similar line of goods is on offer at the Gala centre on ul. Fabryczna, but in a much larger area – around 60,000 sqm. A Galeria Orkana mall (7,300 sqm for rent) is being constructed near the Tesco hypermarket and Obi supermarket on ul. Orkana, the developer of the centre – to be finished by May 2006 – being the Lublin Real Estate Society.

Highlighting retail space

Small shopping projects will soon have to face competition from the large shopping centres which are being, or are soon to be, developed by more experienced operators. The future chances of local malls surviving or finding a niche In a competitive market are still difficult to evaluate. Lublin Plaza, a shopping and entertainment complex with an office section, is currently under construction on ul. Lipowa.

It is being developed jointly by Plaza Centres – which has the Sadyba Best Mall in “Warsaw and Poznań Plaza already under its belt – and the local Movement Polska company. The first stage of the project will be ready by the end of 2006, and will house a shoping centre, a delicatessen and an 8-screen CinemaCity multiplex. The total space of the first stage will amount to 68,000 sqm, and the cost will be PLN 40 mln.

Plaza Centres refuse to divulge any details concerning the second stage. Justyna Durmaj, a Plaza Centres official, will only say that “for the moment we are focusing our efforts on the shopping section”. According to local paper ‘Kurier Lubelski’, the investors are planning for a hotel and offices in Lublin Plaza for between 2008 and 2011, and at a cost of around PLN 20 mln.

Bożena Martynowska of the Lublin Real Estate Society thinks that Felicity will be Lublin’s foremost shopping mall, but only if the developer realizes the entire investment. She stresses that “the project is far from large residential districts, being situated on the exit road to Zamość and Lvov.”

Gray International is a company with ambitious plans. Its complex on ul. Witosa is to have a total shopping space of 65,000 sqm, and will include a Géant Hypermarket (15,000 sqm), a cinema (2,200sqm), a building materials store (8,000 sqm) and a household and radio-TV appliances retailer (4,000 sqm). Felicity is scheduled to open in the fourth quarter of 2007, and will become a part of the property portfolio of the found managed by Meinl European Land.

Echo to keep on fighting

Felicity will enjoy a very strong market position should Echo Investment throw its hand in. The developer has been working for many months on taking the first step in a large project at Górki  Czechowskie, where it owns a plot measuring 113 hectares.

A company official informed us that Echo plans to create a general access park of around 100 hectares with a multitude of attractions: recreation and picnic areas, an arboretum, a landscape reserve, cycling paths and a mountain bike track. The investment is to cost as much as PLN 280 mln and, together with a shopping and entertainment centre, should be ready within 12 to 18 months of the first spadework. The only thing still needed is a local spatial development plan permitting the construction of a shopping centre.

Soft spot for Zana

Companies looking for offices in Lublin city centre can choose among premises adapted from old tenement buildings, as well as in several new free-standing buildings, (e.g.on ul. Dolna – around 1,000 sqm),  or buildings ‘filled in’ between two older units (e.g. on the corner of ul. Krakowskie Przedmieście and ul. Kołłątaja – app. 2,000 sqm). Adam Kleczkowski feels that “the situation will change when the office section of City Centre on ul. Lipowa comes into use. The new building will probably ‘squeeze’ firms out of the premises they presently occupy.”

Tenants not so interested in the prestige of working in the city centre may find the office complex on ul. Zana, where Lublin’s business life flourishes, more to their liking. Zana Centre, a local company – formerly Bami Real Estate – is the developer of both the office complexes there. Grzegorz Turski, the company president told us that: “Up to now we have been responsible for two developments: Zana Centre and Zana Office. The first comprises two buildings of 10,000 and 6,000 sqm total space, while Zana Office consists of two smaller office buildings of 4,000 and 3,700 sqm. We have one more plot of around 1 hectare in the same locality, and have just received the building permit for another office building, this time with an area of 8,500 sqm. We have land got three more buildings should the need arise.”

Grzegorz Turski is unlikely to feel reluctant about starting a new project, since there is very little unoccupied space in his buildings, while the number of tenants paying rent regularly is increasing. They include several banks, including Kredyt Bank, PKO, ING, Bank Śląski and Deutsche Bank.

A-class still absent

Dariusz Pastuszak, president of the local Batory Investment  company, strongly believes that “an A-class office building is what is needed in Lublin,” and goes on to add that “this is why our Batory project closely approaches that standard. The shape of the 4,500 sqm building will be reminiscent of that of Poland’s famous passenger liner of the same name.”

For a building to merit A-class status, it must be located in the city centre – unlike Batory, situated somewhat further out , at the junction of ul. Wojciechowska and ul. Kraśnicka. But should any other developer think of a large investment in Lublin ‘s centre, it would be difficult to find an good plot. Adam Kleczkowski thinks he knows a few such locations: “A potential spot is the site f the still unfinished theatre on al. Racławickich. Work began way back in the 1980s. Should the city decide to sell, this would be a truly tasty titbit for many investors. The City Transport Enterprise depot has potential, as does a plot on ul. Jasna.”

Finding tenants

Mr Kleczkowski believes the Lublin office market to be a tenant’s market. It is still the case that very few firms want to open their headquarters there. Grzegorz Turski of Zana Centre perceives office market opportunities to lie elsewhere: “Rising interest is becoming evident in opening back offices and call centres in Lublin, the relatively low cost of employment and availability of a young and educated work force speaking strongly in favour of such a move. The Lublin student community numbers around 100,000. Centertel, PKO BP and Żagiel have already opened such offices in the city and I am sure further ones will soon follow.”

Housing boom

Housing developers are also encountering problems in finding attractive building sites. Dariusz Pastuszak of Batory Investments notes that local companies must compete in Lublin with Warsaw companies which have sensed a boom in the offing. In the opinion of Bożena Martynowska:” Rising demand is not being followed by a supply of new homes. Lublin is a city with a young population which wants to have their own home, but instead of purchasing walls, are buying projects still at the building permit stage. Projects currently under construction are to be found on ul. Popiełuszki (190 flats developed by Stelmach and Partners), ul. Startowa (Gala Dom), ul. Orkana (from the ‘Oaza’ housing Cooperative), ul. Turniowa (from the ‘Węglinek’ Housing cooperative) and some projects on ul. Willowa.”

According to the Lublin property market, the prices of flats on the primary and secondary markets differ very little and are climbing. Adam Kleczkowski pointed out that the buying rate for 1 sqm rose by around 20 pct last year.

Lublin at a glance

• Population: around 400,000
• rate of unemployment: 12,3 pct .but falling
• university-level colleges : Maria Skłodowskia-Curie University, Agriculture Academy, Medical Academy,  Lublin Catholic University, Lublin University of Technology and several others.
• rent for Office space: in old Office buildings – from several PLN per sqm ,
• in adapted city – centre tenements – from a dozen to around PLN 50 per sqm
• in modern office buildings – EUR 9-12 per sqm (Zana Centre) and from EUR 12 per sqm in the planed Batory building
• rent for shopping space: on the main shopping street (ul. Krakowskie Przedmieście – PLN 150-200 per sqm)
• in shopping mall – EUR 16-30 per sqm
• price for homes primary market –PLN 2300-3300 per sqm
• secondary market – PLN 2000-3000 per sqm

back