GE Lands $687M Casino Hypermarkets in Poland

GE Real Estate Central Europe just acquired 16 Casino hypermarkets throughout Poland from Groupe Casino, the French supermarket chain in a 100-percent equity transaction. At €550 million (U.S. $687 million), it represents the largest GE Real Estate deal in Central Europe and the second richest property transaction overall in the region. The deal is part of Groupe Casino’s exit from Poland, in which it sold nearly all its real estate to GE and its retail operations to Metro Group. “Casino tendered its real estate and operations separately and there was strong competition for the hypermarkets, which we managed to win last week,” Karim Habra, managing director of Central Europe for GE, told CPN. "Our hypermarket tenant for the next couple of months will be Casino and then the lease transfers to Metro and will become Metro’s Real hypermarket brand, which already operates in Poland, subject to approval from Metro’s board.” The leases with Metro will run for 10 years. Habra noted the significance of this deal is that it follows GE’s transaction in 2003 with Casino in which it bought 13 separate retail galleries, or centers, connected to the Casino hypermarkets in Poland for €220 million (U.S. $275 million). GE currently owns nine of the galleries. “That was a landmark deal for us, the largest in Central Europe at the time,” he said. “We tried hard to buy the hypermarkets then. It’s been a very good investment as cap rates have compressed significantly.” He added that by owning 100 percent of the hypermarket centers today, GE can better reconfigure the retail space, which currently is close to 100-percent leased, and can achieve better liquidity synergies. The 16 hypermarket centers have a total lettable space of 339,686 meters. Three are located in Warsaw, with the remainder in well-populated secondary cities around Poland, including Gdansk, Krakow, Lodz, Wroclaw and Zabrze. GE’s Central European portfolio now has reached $1.7 billion, with retail comprising 80 percent of the properties. “We believe retail offers significant growth opportunity in the region,” Habra said. “Spending per capital in Poland and in Central and Eastern Europe is increasing and rents are below those in Western Europe.”
Source: cpnonline.com