Four pillars

Shopping space offers a fresh challenge to AIG/Lincoln Polska. This American company is developing around 10 hectares of land in Radom city centre. In the meantime it is entering the tender for the Targ Sienny and Targ Rakowy in Gdańsk. The company also has no intention to pull out of the residential, office and warehousing markets

“A momentous time is upon us” – at least that is what Radom’s citizens were thinking in mid-June when the local authorities announced who would be developing Radom’s new city centre. The Poland Business Park company, owned by AIG/Lincoln Polska, turned out to be the winner, their offer bettering that of Hungary’s TriGránit, who has appealed the against result. At the end of the day, Zdzisław Marcinkowski, the mayor of Radom, in July accepted the result, clearing the path for AIG/Lincoln Polska to begin a pioneering retail development in Poland.

Indicators and rates are not everything

Radom has a population of around 230,000, a large number of whom are not in work, with the June unemployment rate standing at 26.1 pct. So what enticed this USA company to begin their expansion into Poland from this city?

Anna Wysocka, Head of Retail Department at CB Richard Ellis, believes that: “Developers are displaying an increasing readiness to enter smaller towns, as large cities are gradually becoming saturated in terms of retail space. The purchasing potential and climate in such centres are often much better than they might seem at first glance. Admittedly, unemployment in Radom is on the steep side, but there is also a large grey market.” She also says that many of Radom’s citizens have found employment in Warsaw and its surrounding areas, while people who enjoy higher living standards have been crying out for a shopping centre of a decent quality in their native city. The average gross monthly wage of just above PLN 2,200 is not low. But there is relatively little competition for AIG/Lincoln Polska to engage with.

Radom’s citizens can do their shopping in E. Leclerc and also in a small Carrefour mall. But the greatest competition which AIG/Lincoln Polska will have to face is M1 in which, as well as a Real, and a gallery with several dozen outlets, customers can also shop atMedia Markt and Praktiker

A new centre

The project to develop the Northern Centre, as the area in the vicinity of ul. Bolesława Chrobrego, ul. Struga and ul. Kelles-Krauz has been called, has been drawn up for AIG/Lincoln Polska by the APA Wojciechowski architectural studio.

The investor intends to develop a shopping mall there with total space exceeding 60,000 sqm (shopping space 36,000 sqm). The centre will be on two levels and hold two larger outlets 3,000 and 4,000 sqm in area, as well as 150 to 170 boutiques. The complex will also contain an ice rink, amphitheatre and aquapark of around 4,000 sqm, which will include two swimming pools, water slides, a sauna, bowling alley and fitness club. Within the centre there will also be a housing estate of around 20,000 sqm space comprising 14 buildings and a children’s playground.

In Anna Wysocka of CB Richard Ellis’s opinion: “The location of this investment in the city centre near Radom University of Technology and student halls, is the strong point of this American project. If it does happen, and what they seem to be planning is a multifunctional, customer-friendly complex – then they can be sure of success.”

Construction work is to begin next year.

Mirosław Szydelski, investments director in AIG/Lincoln Polska outlines the present situation: “We are under contract to perform this investment in 4 years, but will try to do it even quicker. We are presently at the design stage and are waiting for a notarial deed to be signed for the perpetual usufruct of the land.” The developer is to pay PLN 98 mln for a 99-year lease. The city authorities expect all the formalities to be concluded by October, that is, once the city council accepts amendments to the development plans for the land and thereby makes the investment possible.

Better late than never

Mirosław Szydelski of AIG/Lincoln Polska explains the company’s strategy: “We wish to operate more actively on the retail market. We are not afraid of any deterioration of the national economic health, including that in smaller towns. One has to bear in mind that trade by itself is an essential expression of economic activity affecting the improvement of the economy in general. I am sure that we shall find a place for ourselves on this competitive market, since if you do well there is always room for you.”

AIG/Lincoln has said it is ready to develop pl. Defilad in central Warsaw, but the city authorities have so far been unable to remove the MarcPol supermarkets there, so the whole concept has come to a dead end.

Mirosław Szydelski reveals that: “We are taking a close look at Gdańsk and the city’s plans for developing the Targ Sienny and Targ Rakowy. Should any future proposals for this project have a sound economic basis, then we shall definitely take part in the tender.”

Such a tender will probably be announced by the city authorities by the end of this year. AIG/Lincoln Polska are likely to participate, alongside ECE Projektmanagement, TriGránit and ING Real Estate.

Wait for council elections

AIG/Lincoln also has railway stations in its sights, ie. those which PKP (the Polish State Railways) intend to modernize and extend in partnership with private investors. The developer is also looking with hungry eyes at the housing market. So far this American company has successfully finished a single-family housing estate in Lipków near Warsaw, comprising 99 houses within the self-contained Osiedle Kampinos estate. There is also another project that has gathered dust, or rather weeds

– a 67-ha plot in Słomin. The only person to be found on this erstwhile battlefield is a guard growing tomatoes (still green as we saw for ourselves) as well as two lonely exhibition houses – a semi-detached and a terraced house. Dom i Ogród 2000, the developer’s daughter-company, has invested USD 11.5 mln in Słomin since 2002 and today is waging war with local authorities, who are refusing to take the administrative decisions necessary to allow a request for a building licence to be submitted. But Mirosław Szydelski has not lost hope: “For the moment, at least, the project is on hold, becoming a pawn in a game being played by the over-politicized local government board. But we are not giving in and are convinced the estate will happen.”

This autumn’s local government elections are the light at the end of the tunnel for the developer. AIG/Lincoln Polska is also watching events in other towns where homes could be constructed. Mirosław Szydelski thinks it would be wrong to argue over whether the housing market is overheated or not. It is like predicting the future from tea leaves. One fact is indisputable though – there is a high demand for homes. On the other hand, the housing market fluctuates as all markets do, which means that while we are currently experiencing a boom, worse times are bound to occur. So where is the company looking for building sites? Its internet website mentions Gdańsk, Kraków, Wrocław and Poznań. So housing projects are going to appear in these cities? Mirosław Szydelski avoids replying, limiting himself to the statement: “We are looking for plots in the largest cities, but we have not yet finalised any contracts. It is too early to talk about specific locations.”

Known and trustworthy

The company is also consolidating its position on the warehouse and office markets it already knows. The construction of the first stage of a logistics park (20,000 sqm) is to begin in late September near Łódź. The developer is presently waiting for a building licence for Diamond Business Park Stryków, while work is also to start this year on another project – Diamond Business Park Gliwice. Each of these will hold around 40,000 sqm of rentable space.

This year, the construction of the Grzybowska Park office building in central Warsaw is to begin, long after it was originally announced. The ‘A’ class building will be of 7 storeys (9,800 sqm for rent), its design also being the work of the APA Wojciechowski studio. It will be ready by the end of 2007.

Mirosław Szydelski sums up his company’s Polish activities: “The strength of AIG/Lincoln Polska will stand on four sector pillars: office, warehouse, retail and housing. We shall neglect none of them.”

z Ewa Andrzejewska