Silesia Park's new beginning

Had everything gone according to plan, the Silesia Park retail and leisure centre in Katowice would have been launched last year. It wasn't to be but there's still hope for the ambitious project. It comes in the form of a Dutch investor, Moonfleet

The talks over the acquisition were initiated relatively recently, in January this year. Peter Long of Chelverton International, Silesia's former owner, informed Eurobuild that all the necessary documents had been signed and the final payments should be made by the end of this month.

Australians packing up
Two firms were originally involved in Nowe Centrum, which was what Silesia Park used to be called. Those were Chelverton International, a development company owned by the Australian firms Lend Lease and Chelverton Properties International and Katowicki Holding Węglowy, the owner of the plot. The latter's shares were however subsequently bought by the developer.
The first news of the Nowe Centum project, which was to consist of 75,000 sqm, 200 shops, restaurants, a multiplex, supermarket and swimming pool, was published in Eurobuild Poland four years ago. The estimated total investment value of the scheme, planned for completion in 2002-2003, amounted to USD 150 mln. We also mentioned that Ahold had signed a lease agreement for 12,000 sqm as well as that the European Bank of Reconstruction and Development had agreed to invest EUR 18.8 mln so that the scheme might be finished. The last we heard about it was that it had been granted the final construction permit (Eurobuild Poland number 4/2002). Since then, the lips of the developer and the leasing agencies (Jones Lang LaSalle and Cushman & Wakefield H&B) have been sealed. Unofficially however, rumours of a key player's withdrawal and the subsequent lack of funding have spread. "The switch in Lend Lease's corporate strategy significantly slowed down the whole process," Peter Long of Chelverton International admits. "The Australians decided they would no longer engage in development projects in Central and Eastern Europe, so we started looking for investors interested in acquiring Silesia Park." The final choice was a group of investors gathered around the Moonfleet fund.

Investor from the Moon
We didn't manage to find out who the Moonfleet investors were. The fund has no internet site, and the surname of its president, Christopher Samuelson, appears only in connection with another investment group Velmet and Mutual Trust Management, a company which operates in a similar sector. "Apart from my involvement, there is no other connection between these companies and Moonfleet," says Samuelson, who is new to investing in Poland, (although he claims to have had experience of working in Russia), and for that matter, to running a retail development project. He stresses however, that he has found the right people who do have experience in the business, and who he has placed in charge of the project. A number of people who have worked on it so far, such as Peter Long, will continue to be involved.
In all likelihood, JLL will be given the task of leasing the centre.

Shops before cinema
Will the emergence of Moonfleet, who have committed themselves to seeing the project to its end, increase the chances of success? One of our interviewees claims that a lot depends on the investor's precise plan, which has not as yet been divulged.
"We will make an announcement soon. We've started working with Chapman Taylor, the creators of the project and we'd like to improve on certain aspects such as the leisure section. We're also going to increase the size of shop units. Another option is to divide the whole investment into stages, in which case the retail centre would be completed in the first and the multiplex in the second stages," says Christopher Samuelson.
He also informed us that negotiations with prospective tenants, including the hypermarket operator, had already begun. According to information received from Jan Wasilewski, Ahold had decided to terminate their contract.

Silesia the first step
The new investor has set a time frame for the investment which is scheduled for completion by Easter 2005.
"We'll soon start preparing the ground work. In the meantime, we want to complete the design, which will enable us to organize tenders for the contracted work," says Peter Long. "Construction should begin in May or June next year."
He adds that the investor has approached the banks which had already considered financing the scheme. Will the European Bank for Reconstruction and Development find itself among them?
Not only will the Moonfleet investors have a chance to rejuvenate a large plot of land, damaged by heavy industry, they will also open up a floodgate of cash. Silesia Park will go up in a prime location, and the land is ideal not only for the construction of the centre but also for other projects.
"The construction of Silesia Park is the first stage of this regional centre," says Samuelson. "We are talking to prospective partners who might be interested in utilizing the plot for their own retail projects."