Echo Polska Properties NV has concluded an agreement to purchase a stake in the 22 Towarowa Street retail development site in Warsaw, with all outstanding conditions precedent fulfilled. The site is the biggest commercial development in the centre of Warsaw and spans a total area of approximately 6.5 ha with a development capacity of over 100 000m² of gross lettable area.
EPP will acquire a 70% interest in a special purpose vehicle (SPV) that owns the property, with Echo Investment S.A. acquiring the remaining 30%. The total purchase price for 100% of interests in SPV will be EUR 120 million upon the satisfaction of conditions related to the receipt of construction permit. EPP NV already paid EUR42 million and EUR42 million will be payable dependent on the timing of satisfaction of these conditions. EPP has been appointed to manage the property, while Echo Investment will be the developer.
EPP CEO Hadley Dean comments: “This is a transformational acquisition for EPP as it gives us an entry into the Warsaw retail market and is a perfect fit for our portfolio due to its location and attractiveness as well as being one of the last sites of this nature available in Warsaw.”
The average retail area per 1,000 inhabitants is relatively small in Warsaw at 450m², which compares favourably to over 600m² in Poznań or Wrocław. “This 5th generation retail development will benefit from Varsovians’ high purchasing power which is 80% higher than the national average.”
Development is expected to start in 2018 with completion by 2020/21.