Echo Polska Properties has concluded an acquisition agreement to acquire a 70% stake in Galeria Młociny in Warsaw for €29 million from Rosehill Investments sp. z o.o.
Galeria Młociny will be developed at an estimated development yield on cost of approximately 7.1% and on completion is expected to be accretive to EPP.
CEO Hadley Dean explains that the acquisition provides EPP with an earlier entry into the underserviced Warsaw retail market, ahead of the completion of the Towarowa mixed use development currently underway. “The acquisition is in line with our stated strategy of investing in quality retail assets in strategic locations.”
Warsaw is underserved per 1000 inhabitant in terms of retail compared to other regional Polish cities. “Notably Galeria Młociny is also a strategic transport hub for trams, buses and the metro, in the middle of a large growing residential district,” says Dean Galeria Młociny is a 81 900m2 mixed use development (of which 71 050 m2 is retail) in North Warsaw. The new generation shopping centre will service a rapidly growing residential area that lacks a modern fashionable retail offering and is located next to Northern Warsaw’s main public transport hub, which sees 40 000 daily commuters.
Construction of the first phase commenced in October 2016, and is on track for completion in Q2 2019. The development is approximately 50% preleased to strong anchor tenants including Inditex brands, Van Graaf and H&M.
Echo Investment S.A will be appointed as the developer of Galeria Młociny and will acquire the remaining 30% of the equity in Rosehill.
Dean concludes: “This is our seventh retail acquisition since IPO in September 2016 and further enables EPP to leverage our scale and influence to give retailers a much needed alternative choice in Poland”.