Life after retail
Hotels
It has further acquisitions in the pipeline as well as a planned relocation of its Polish head office. The port in Sztynort was put up for sale at auction by the courts with a reserve price of PLN 15 mln. The property comprises over 51 ha, which includes a yacht harbour with a guest house and a restaurant. King Cross won the auction having bid above the reserve by just the minimum mandatory increment. “The King Cross Group has decided to continue investing in Poland. We have, however, withdrawn from shopping centres and now want to focus on projects from other segments of the commercial real estate market. We are particularly interested in hotel and recreational projects due to the opportunities we see in this segment. We are looking carefully at the market for future projects and choosing only to invest when a project is well thought-through,” explains Marcin Trybus, a board member of King Cross. The plan is now to renovate the Masurian port and the old park that surrounds it as well as to develop a modern campground with around 50 holiday homes on the site. In addition, the new complex will include a four-star hotel, a hostel as well as an area for recreation and sports. The company is also to invest in renovating the marina and the harbour buildings. Preliminary work is to start this year, while the construction of the hotel is to begin in 2021, with the completion of the project having been scheduled for 2024. “We are developing an all-year project there, with a large number of attractions for the widest possible group of visitors,” states the representative of the investor.
Taking a selective look at hotels
The purchase of the aparthotel in Uniejów is of a different scale. “We are diversifying our risk. Sztynort has the most potential but it is also has the highest risk so we are filling up our portfolio with more sizeable projects. So we have decided to invest PLN 13.5 mln in an aparthotel in Uniejów. This is a standard passive investment with a 30-year term and a stable rate of return of around 7 pct. We have bought the restaurant, conference and recreation sections. All 172 rooms had already been sold by the town’s authorities,” says Marcin Trybus. The company has also purchased a hotel project at ul. Postępu 15A in Warsaw’s Służewiec Przemysłowy district. The construction work started last autumn and the delivery is planned for the beginning of next year. The hotel will be a seven-storey building with 167 rooms, an open lobby on the ground floor, conference facilities and an underground car park. Upon its completiont, the hotel will have a value of around EUR 20 mln. “This investment results from our strategy of looking for attractive projects. We intend to manage it ourselves just like our other properties,” he adds..
Other options still on the table
Slightly more complicated and demanding purchases have also not been ruled out. “Distressed projects which have at the same time both promise and potential are also on the radar. We haven’t ruled out investing in the residential sector,” he says. “We are interested in slightly smaller projects, and are looking for real estate assets worth from under PLN 20 mln to more than PLN 100 mln, which would also be of a size to allow us to easily exit from an investment,” adds Marcin Trybus. The change in the company’s investment strategy coincides with a change in its Polish HQ.as it intends to buy more than 500 sqm of office space from BBI Development in Centrum Praskie Koneser in Warsaw. The company is to take up around 200 sqm for its own offices and lease out the rest. The move is scheduled for the spring.
