Ambitious plans of Tower Investments

The company’s goal is moving shares listed on NewConnect to the regulated Warsaw Stock Exchage market along with a new issue of shares. The company expects that the income from the issue of shares will be app. PLN 37.2 mln net. The acquired funds will be earmarked to purchase a few properties, which will make it possible for the developer to increase the number projects executed at the same time. “We are adjusting the portfolio of projects to market’s expectations – we have determined a few goals on this basis (...). The most important ones include the purchase of land properties as well as retail and service premises in Warsaw. Our strategy for the next few years can be described in one word ‘more’,” reports Bartosz Kazimierczuk, president of the company. “Our business is practically devoid of risk. Our growth always fluctuates around 1.5 pct per year,” adds the president of Tower Investments. Among the projects which are to be developed in this and next year, there are six in Warsaw: three projects for Biedronka and Burger King, a BP petrol station, a Ferrari showroom as well as one project in Tychy – the first Multi Tower projects. The project will include over 80 apartments, four office floors and the ground floor which will be earmarked for retail trade. The commercialization of the project is currently in progress. The construction of the facility will only start when the sale of apartments reaches 30 pct with a simultaneous commercialization of the retail area of minimum 60 pct and the lease or sale of 60 pct of office space – the risk threshold is high. Offices in Multi Tower are also for sale because, as it turned out, there is a demand for own offices in Tychy,” said the president of the company. The project is at the design stage and apartments are being presold. Another Multi Tower project is to be constructed in Warsaw, but it is to be built by the Yit development company. Tower is the owner of the plot in this project. When the project has been granted a building permit, it is to be sold to Yit and then only its retail part on the ground floor is to be repurchased by Tower. Meanwhile 20 parks under the name of Shopin are to be constructed by 2022. One of them is in the course of construction – City Shopin on ul. Szwedzka in Warsaw. The Shopin concept is mostly addressed to smaller towns. The City Shopin concept will be developed in larger cities. The first one has been opened in Warsaw. “We have also secured a plot in Poznań for a slightly different project which will, however, be developed under the Shopin brand. It is a plot which neighbours Agata Meble and our tenants will mostly represent the interior design and furnishing sector instead of the grocery one or other standard ones,” explained the president of the company. As far as Shopin is concerned the brand is only to be developed in five cities: Warsaw, Poznań, Kraków, Wrocław and Gdańsk. “The grocery chains have priority in our projects. If a discount decides that they would like to open a larger shop or rent our entire project e.g. 1,500 sqm we rent it to the retail chain. If it wants to rent e.g. 800 sqm, then there will be a mini retail park under the Shopin brand. Four facilities have been built so far under the Shopin brand: in Garwolin, Łódź, Płock and the City Shopin in Warsaw. The following retail parks under the Shopin brand are planned in Mrągowo, Tychy and Pleszew. Tower Investments has already concluded a sales contract concerning three projects in Warsaw – on ul. Dereniowa and ul. Szwedzka, which have already been opened and on ul. Konstruktorska, which is under construction. “This transaction closes this year. There is still a project for Biedronka on ul. Modlińska, near Selgros, but it is a building for sale. “Biedronka will not rent but buy the facility from us,” summed up the president of Tower Investments. “We have to use the fact that the market of discount shops is a kind of race at the moment, mostly in Warsaw. It will finish in a few years’ time so we have to act now. Rents are very high. Biedronka and Lidl are the main competitors in the race. They have recently been joined by Aldi, which won against Biedronka in few place, and the rent rates sometimes exceed EUR 100 per sqm” said the president of Tower. He also added that the Dino chain is likely to become a monopolist in some smaller towns, with 2,000-3,000 residents. “So far large players do not enter towns with such a low number of residents. Tower mostly signs leases for 15 years at this time and we are able to reach profitability with the sale of projects at the level of 30-40 pct,” explained Bartosz Kazimierczuk. On the 29th of November the company is starting a road show. Meetings with investors will last until the 6th of December. Subscriptions for shares in the retail tranche will be carried out from the 8th until the 13th of December, and from the 8th until the 14th of December in the tranche for institutional investors. The offering party will be the brokerage house of the BOŚ bank. Tower Investments published the prospectus in connection with its public offer of up to 500,000 newly-issued C-series shares. On this basis the company is also planning to introduce 121,329 A-series shares on the regulated market as well as 250,250 B-series shares, up to 500,000 C-series shares and up to 500,000 allotment certificates for C-series shares.