US-run Portico Development plans to build up to 20 urban entertainment centres in the next five years
Aggressive US fund manager Apollo has revealed it is backing a $220m drive by Warsaw-based Portico Development to build a chain of 20 entertainment centres across Poland in five years.
Apollo is the majority investor, alongside its European investment specialist Pelham Partners. Portico and Gda«nsk-based developer Syrena will also inject cash, bringing the total equity to $55m, with debt taking the figure to $220m.
Portico is run by two Americans – Vinton Frost and Frank Stork – who have been researching the market’s potential and scouring Poland for sites over the past seven years. The company is split into two sections with Frost running the real estate division and Stork handling the cinema arm.
The first two projects to open are the $20m, eight-screen cinema complex in the Europlex building in central Warsaw and a $30m, eight-screen cinema with 5,000m2 of retail in Gdynia. Other sites set for schemes include Gdansk, Wroclaw and Krakow. Healey & Baker is the letting agent.
The average size of the projects will be 15,000m2 with a 10-screen cinema, 5,000m2 of retail and 400 to 600 parking spaces. The retail will consist of lifestyle shopping such as music, books, fashion and sports.
All the projects will be based in urban locations. Frost is convinced this is the best approach with the cities needing regeneration and the limited car ownership in the country. “The out-of-town concept is not going to work,” he said. Each project will have a different design but will be branded under the same name.
The company may then extend the concept to target cities in Poland with a population of around 100,000. “There could be a second wave of the concept to be made more affordable for these cities,” says Frost.
Roger Orf, managing director of Pelham Partners, said the concept could also be rolled out across the rest of central Europe, through link-ups with other Pelham partners.
Orf said Pelham and its investors were heavily committed to central Europe, particularly the leisure sector in Poland. “We have interests in Russia, Estonia, Latvia and Lithuania and invest in the Polish office and retail sectors. Poland is a dynamic and industrious population with extremely limited entertainment. There are a lot of young people with disposable income who want to spend it.”
Meanwhile, Apollo, together with Rolf Nordstrom’s Swedish company Columna, has also secured an important letting at its shopping and office complex, the 50,000m2 Manhattan Center in Brussels.
Financial services firm AG Fortis has agreed to take half the office element – around 18,000m2 – the biggest letting in the city this year.
The building has been let on a three-and-a-half-year lease and rent is understood to be around the average for good secondhand space of €149 (BFr6,000) per m2 a year.
The property in Quartier Nord was bought by Columna and Apollo with Pelham Partners in 1997 as part of a bank loan portfolio. Apollo and Columna own the podium building and one of the three towers.
Pelham has another 3,000m2 of offices under offer in the Manhattan Center and is considering bringing a UK health club operator into the building.
