A ladybird in your backyard

Information about the possible EUR 240 mln agreement first appeared in the Austrian press. An article referred to a deal between Portuguese Jeronimo Martins' Biedronka and a Credo Real Estate AG. This, we found out, would be for the development of 40 outlets in local malls with approx. 2,000 sqm of retail space. The project was reportedly to be financed by a "leading insurance firm" which would own 90 pct of the future stores with Credo Real Estate AG holding the remainder.

Second-hand concept?

A similar kind of concept - "small neighborhood malls" - is already known in Poland. Norwegian company RECE was working on such a project to put REMA 1000 as the anchor tenant, accompanied by several smaller shops and service points. Ideal sites were to be close to large residential communities with easy access to main roads for increased visibility and access by car as well as having a heavy footfall. Finally the venture wasn't realised with REMA 1000. The REMA stores were sold to to DRD Food Emporium, and later 16 of these supermarkets were acquired by the Jeronimo Martins Group and incorporated into the Biedronka chain. Instead RECE opened seven centres called Skwer Handlowy VIKI (VIKI Shopping Square) anchored by other supermarkets such as Leader Price and Edeka. Łódź was the first town to welcome the concept, followed by Bydgoszcz. A further six VIKI centres were planned.

Polish/Norwegian link

Trying to find out more information on Credo Real Estate (represented in Poland by IRES), which will possibly be working for Biedronka we found out that the developer's office in Poland is managed by Jacek Wesołowski and Jan Christensen, the same people who previously were working for RECE developing the idea of "small neighborhood malls". This would seem to confirm our suspicions that Biedronka outlets would be similar to VIKI. A Warsaw real estate consultant familiar with the duo's previous achievements thought that this was the case too. He told us that they had a lot of experience, and that the concept of local shopping malls was very interesting and would tempt him too. However, he did add that such a centre could be vulnerable should a hypermarket manage to open within the vicinity. Unfortunately neither Mr Wesołowski nor Christensen from IRES nor Biedronka representatives were willing to talk to us about how the co-operation started and how it could evolve in the future. They also didn't disclose the name of the "leading insurance firm", mentioned in the Austrian press, which is supposed to finance the project and become co-owner of the malls in the future.

Good pedigree

Though Credo Real Estate AG is a new entrant on the market, it has a good pedigree. It was created towards the end of 2003 through an all-Austrian partnership of the real estate investor and developer Credo AG (formerly Zwerenz & Krause) and Constantia Privatbank, with stakes of 70 pct and 30 pct respectively. Credo AG has been operating in Central Europe since mid-2000 since co-founding a new firm called IRES with Hungarian Norbert Galfusz. IRES's credentials in Hungary include Pharmapark, a 14,000 sqm warehouse and office development for the pharmaceutical industry. Biedronka is already an important player in the Polish market. For the financial year 2003 the chain generated nearly a billion Euros in turnover, with 672 stores open at the close of this period. Little secret is made of their wish to expand - the company expects like for like sales growth of around 10 pct in 2004 - with 1200 stores planned in the medium term.