Echo Polska buys mall in tourist city

(c) Krzysztof Nahlik - 123RF.com

Echo PolskaProperties (EPP), the developer and owner of Polish office and retail assets, has entered the popular tourist city of Krakow in Poland through the acquisition of Zakopianka Shopping Centre.

This is the group’s first retail acquisition in the city and increases its footprint across fast-growing Poland.

In order to buy the mall, EPP has concluded a preliminary agreement to acquire 100% of the equity in EPISO 3 Zakopianka sp. z o.o, which is the holder of leasehold rights that entitle the acquired entity to all rental income derived from leases concluded by tenants occupying premises within the shopping centre.

This is other than those portions of the centre leased to owner-occupied Carrefour and Castorama stores.

The Zakopianka lease rights owned by the acquired entity relate to that portion of the centre with a gross lettable area of 27,463m².

"This acquisition boosts our portfolio to 22 properties and is evidence of our delivery on our target of adding two properties per annum. The centre forms part of a retail park located within the affluent southern part of Krakow with a catchment area of 1.3-million people," said CEO Hadley Dean.

The equity would be purchased for about €54m.

"The Zakopianka Shopping Centre is well established in Krakow, trading since 1998. It is well located with easy access by both car and public transport. The centre trades well and has a diversified tenant mix… There is the potential for extensions to be completed. The acquisition price of approximately €54m represents an acquisition yield of approximately 10%," Dean said.

"Krakow is Poland’s top tourist destination and a leading destination for business process outsourcing and information technology outsourcing in Europe. The transaction is in line with EPP’s stated strategy of acquiring retail assets in strategic locations," he said.

Dean wants EPP to grow to own €3.5bn in assets by 2022. It has assets worth about €1.2bn
at present.