[Blanka Dżugaj/Retail Journal spoke with Jacek Wesołowski, Managing Director of Trei Real Estate in Poland | Original-Source]
The cooperation with Patron Capital is a very important step in building Trei Real Estate’s position in Poland. How long did the negotiations last and which party initiated this undertaking?
The joint venture we have created with Patron Capital is the next step in Trei's long-term development strategy in Poland. Market analyses clearly show that the retail park sector is still in a phase of rapid growth, of which our Vendo Parks are a perfect example. Initially, we imagined that 40 retail parks in Poland would be an impressive figure. But today, as we get closer and closer to this number, we can safely say that now 60 Vendo Parks are highly probable, and maybe even more. Above-average expansion opportunities in smaller retail formats have led us to map potential locations for future projects and look further afield for additional capital. We began discussions with Patron Capital in February of this year and in October we signed an agreement that provides us with financing and the ability to build another 15-20 retail parks.
In your press release you stated that demand for retail parks in small towns is greater than you initially anticipated. Are you going to focus on small towns in this project? Do you already know which locations will be included?
The first location in the pool of joint projects is Vendo Park in Chorzów, while the other four locations are Otwock, Łapy, Skarżysko-Kamienna and Siedlce. Although smaller towns, which show growing purchasing power potential but still suffer from a low supply of modern retail space, are our main investment targets, they are not the only ones. We are also looking for plots for the construction of retail parks in major metropolitan areas with our planned investments in Szczecin and Wroclaw being examples of this strategy. In large cities, we choose neighborhoods far from downtown, sometimes called "bedroom communities," where we don't have to compete directly with large shopping malls. Regardless of the size of the potential location, we look for the best business opportunities and currently receive more attractive proposals from small towns.
You announced that together with Patron Capital you will build between 15 and 20 facilities. What does the final number depend on?
The capital of 140 million euros that we acquired from Patron Capital will allow us to realize certain operational costs. The exact number of Vendo Parks depends among other things, on the size of the plot acquired for construction and, consequently, the facility itself. If we have the opportunity to build large retail parks, such as the one in Szczecin with a leasable area of 10,600 sqm, we will be able to complete about 15 such investments. If these are smaller facilities like Vendo Park in Łapy, with a leasable area of 6,100 sqm, we can talk about 20 locations.
In cooperation with Patron Capital, five Vendo Parks are already being prepared. Will the speed of development be maintained?
The first of the jointly planned retail parks has just been opened in Chorzów. The next two projects, in Otwock and Skarżysko-Kamienna, are under construction. The remaining facilities that we will build together are in the design phase while others are in the building permit procedure. As far as the pace of development of the Vendo Park chain is concerned, we want to maintain the cycle of eight facilities per year, which is exactly the number we will deliver by the end of December 2021.
After announcing this information, have more prospective tenants approached you, or is the tenant mix already mostly established?
We conduct advanced negotiations with tenants practically all year round. The great interest in our parks is best illustrated by the fact that in our 28 facilities that we have so far opened in Poland, we do not have a single vacant unit. Stable relationships and good cooperation with our long-standing tenants mean that companies such as KiK, TEDi, Martes Sport and Media Expert stores often expand their chains in subsequent Vendo Parks. At the same time, we are open to new brands that have not previously considered this type of retail facilities. For example, small format DIY stores such as Castorama and Jula are opening branches in Vendo Parks. A health clinic has recently opened in one of the Vendo Parks in Łódź. Stores previously associated with large galleries, such as Empik, Sinsay and Reserved, have also opened shops in our retail parks.