Union Investment Real Estate AG Acquires Poland’s Largest Shopping Center in Largest Single Retail Asset Deal of the Year in Europe

By Gabriel Circiog, Associate Editor

Poland—Union Investment Real Estate AG has closed on the acquisition of the Manufaktura regional shopping center in Łódź, Poland, for the open-ended real estate fund Unilmmo: Deutschland. Dr. Frank Billand, member of the management board of Union Investment Real Estate GmbH said: “With assets of over EUR 7.5 billion, the fund is the perfect platform for this outstanding investment. We are pleased to be able to expand our excellent UniImmo: Deutschland retail portfolio with the addition of one of the three leading shopping centers in Poland.”

The € 390 million ($505 million) transaction stands as the largest single retail asset deal so far this year in Europe. The sellers are French REIT Foncière Euris, private group Rallye and project developer Apsys, who will continue to manage the shopping center for a period of at least 10 years. The sale transaction relates to 91,000 square meters (979,516 square feet) of the 112,500 rentable square meters (1,210,940 square feet) the shopping center has to offer. The sellers were advised by HSBC, Salans, Deloitte and DTZ, while Hogan Lovell, TPA and Jones Lang LaSalle advised Union Investment.

“The sale of Manufaktura is an illustration of Apsys’ excellence as a developer and manager of shopping centers and a demonstration of long term interest by investors in regional shopping centers in Polish cities. We are proud of this transaction: Union Investment has shown the trust it has in Apsys’ savoir-faire as a developer of centers and long-term manager. The equity generated by this transaction will be reinvested in new projects in France and Poland,” said Maurice Bansay, president and founder of Apsys. The global operator of commercial properties, Apsys Group, was created in 1996 and invests in, creates, develops, markets and runs commercial and leisure spaces. The group currently manages 20 shopping centers, representing over 6.4 million square feet of retail space.

Located at 58 Drewnowska Street, on the site of a former 19^th century textile factory, Manufaktura opened its doors in 2006 and features 307 retail and entertainment venues and 2,955 parking spaces. The main anchor tenants of the shopping center include Real, Cinema City, C&A, H&M and Leroy Merlin. The Leroy Merlin DIY store and Cinema City are not part of the transaction and remain the property of the owner-occupiers. The property is fully leased and is currently the largest shopping center in Poland. In addition to the shopping center, the project includes three museums, a conference center and a four star hotel. Manufaktura has been awarded BREEAM In-Use certification for its sustainable operation.

With around 20 million visitors in 2011 and serving a catchment area of over 2.5 million people, Manufaktura has become a regional center of attraction and also hosts various gatherings and celebrations such as concerts, open-air cinema screenings and other public events. Dr. Billand said: “Manufaktura offers everything we look for in a highly diversified core investment.”