Mitiska looking for projects in CEE

David Tejml, head of Mitiska REIM’s CEE operations: The equity we have, credit included, has more than doubled our investment capacity to app. EUR 500 mln. About half of this amount is planned to be invested in Central and Eastern Europe. In case of interesting opportunities Poland will most account for between EUR 50 mln and 100 mln of the investment amount (equity of EUR 40–50 mln).
As far as purchases are concerned, we are not interested in shopping centres or hybrid facilities, but exclusively in retail parks with a strong grocery or DIY tenant. We are currently looking at projects in Poland and, if all goes well, we should be able to announce one large acquisition before the end of this year.

Is the company also interested in other regions in Poland?

Yes, we are. E.g. in Warsaw we are in exclusive negotiations over the acquisition of an investment project. We are working on obtaining the building permit for this and preparing for the construction work.

What is the size of the project?

Our projects are usually worth worth 5-30 million Euros and the sizes of retail parks and the area of the plots ranges from 0.025 ha to 2.5 ha. The project is not large, so it will be close to the bottom of the range. We are also working on many other projects all over Poland. However, they are at the initial stages of negotiations, so it is a little too early to describe them in detail.

What are Mitiska’s plans for other countries in the region?

So far we have managed to invest in Romania, the Czech Republic, Hungary and Serbia. As far as other countries are concerned, we’re also interested in Croatia and Slovakia. So the CEE region is the most significant for us at this time.

How much is Mitiska planning to invest?

This depends on the investment opportunities. We are ready to invest in the next years in CEE about 100 - 150 mn euros in equity. We are able to multiply the total investment volume together with our co-investors and financing possibilities many times higher. We are planning to finalise a few investments in the CEE region by the end of the year. Our strategy is not just based on buying finished facilities but on our ability to build new ones. This strategy turned out to be successful to gain investors for our first fund and it has allowed us to double the amount of money we have raised for our second fund.

Is the company planning to launch another fund?

Yes, however not immediately. We have almost finished fundraising for the FRI 2, so we have plenty to do. Furthermore, there will also be a third closing of this fund, the exact date is still open. We are a young and ambitious team, so we hope to continue our winning streak.

What is currently the greatest challenge you face when investing in Central and Eastern Europe?

Stefan Klug, Germany investment director, Mitiska-REIM: Prices are high in the CEE region as well as the rest of Europe.

David Tejml: We are permanently searching for new retail park opportunities as well for perspective JV partners, which could be considered as the greatest but most interesting challenge. We are seeing market saturation on some of the markets, such as the Czech Republic and Slovakia, but this does not stop investment opportunities. However, you do need to adapt your investment approach. The growth in online retail does not affect retail parks as much as it does larger shopping centres.

Is the company planning to develop in Ukraine or Russia?

David Tejml: We have been looking at both these markets, but we do not have any such plans at this time. I think there is still a lot of room for development in the CEE countries that are members of the European Union.

And what about the Baltic States?

These markets are too small and their retail markets are also saturated.