HB REAVIS GROUP, the largest commercial real estate developer in Slovakia, has joined forces with the largest listed European retail sector property investor, Rodamco Europe N.V.
The Slovak developer and European investor announced on December 14 that Rodamco was taking a 50 percent stake in HB Reavis' flagship shopping centre, Aupark in Bratislava, for €75 million and a guaranteed return of 7.75 percent for the first three years, with the intention of expanding their cooperation to other projects in Slovakia and beyond.
Rodamco, with roots in The Netherlands, owns 80 shopping centres and has total assets of about €9 billion; HB Reavis manages assets of about €500 million and has €1 billion worth of projects in the pipeline.
Rodamco's CIO for asset selection, Willem Ledeboer, said the Aupark deal flowed from his firm's recent focus on Central Europe.
"Over the past five years we have invested in shopping centres in Warsaw, Prague, Budapest and Vienna, and we've been looking at the Slovak market for over a year," he said. "That's how long it took us to convince HB Reavis to sell us part of Aupark, which we believe is the best shopping centre in Slovakia."
Ledeboer described Aupark as "well-designed with a good mix of retailers", and said it was well positioned to take advantage of the larger international retailers now entering the Slovak market, such as Marks & Spencer and Zara.
"We chose Aupark above all because of its flexibility, its ability to cater for new retailers who come in," said Ledeboer.
Aupark was opened in 2001 as a three-level, 43,900 square metre shopping centre. It now houses over 200 shops and is located on the Bratislava ring road in the suburb of Petržalka.
Štefan Duchoslav, the managing director of Aupark, said the mall was planning an extension that would be able to offer larger retailers the space and dimensions they wanted. "This is not a speculative development, it is a targeted strategy to help Aupark retain its clientele and position," he said.
HB Reavis plans further Aupark shopping malls in Žilina and Košice, although no dates have been set for the start of construction, and is currently building the City Business Centre complex on Karadžičova Street near the main bus station that will contain 106,000 square metres of administrative and residential space in five buildings.
From 1995 to 1999 HB Reavis developed the Bratislava Business Centre buildings I through IV, and from 2002 to 2004 the city's largest office complex, the Apollo Centre.
Ivan Valent, chairman of the board at HB Reavis, said his firm had a "gentleman's agreement" with Rodamco to work together on other projects in the future.
"This is more of a strategic than a financial transaction for us, and we hope the marriage will be a long one," he said. "Our strategies are a perfect match, and it's a match that can bring Slovakia new real estate projects."
Bratislava already has several similar shopping malls, such as the Polus Centre, Avion and the Soravia Shopping Palace, a massive development near the airport that Austrian investor Soravia Group expects to swell to 300,000 square metres by 2008.
In addition, Irish developer Ballymore is planning a 250,000 square metre mixed use project called Eurovea in the docklands area east of the Old Town and across the river from Aupark. It is expected to be completed by 2009.
Asked if he wasn't afraid of the competition, Ledeboer said that "these other developments serve different markets, and at the end of the day, Aupark stood out because it could be extended to a critical mass to deal with the competition."
