EPP Invests $818M in Polish Shopping Center Portfolio

The M1 portfolio encompasses 12 retail assets totaling 4.8 million square feet across 620 stores. The properties are all single level, fully-leased and grocery-anchored.

One of the M1 portfolio shopping centers acquired by EPP
One of the M1 portfolio shopping centers acquired by EPP

Echo Polska Properties has acquired 12 major shopping centers and retail parks in Poland, in three tranches, in the course of three years. The purchase, from a consortium with 25 percent owned by Redefine Properties, totals €692 million or around $818 million. This acquisition is part of a larger 28-property portfolio that was taken over by the consortium. 

The M1 portfolio encompasses 12 retail assets totaling 4.8 million square feet across 620 stores. Eight of those regional shopping centers range from 322,000 to 592,000 square feet, attracting more than 40 million annual visitors, whereas the four retail power parks range from 215,000 to 376,000 square feet. The properties are all single level, fully-leased and grocery-anchored. All centers are anchored by Auchan Hypermarkets as well as other major brands including MediaMarkt, TK Maxx, H&M and C&A. 

The portfolio is subject to a master lease from Metro AG, set to expire in April 2024. The properties being acquired by EPP have extension opportunities and also have asset management initiatives. The entire portfolio was secured at a yield of 7.1 percent and will be closed in 3 tranches: January 2018, June 2019 and June 2020. Upon the transaction’s completion in mid-2020, EPP’s portfolio will include 27 shopping centers totaling 10.7 million square feet. 

“This deal is based on a ‘up to 30 minute drive time’ measurement, which will treble our portfolio catchment to 34 percent of Poland’s total population, increasing to 39 percent after Młociny in Warsaw is opened,” said Hadley Dean, CEO of EPP, in prepared remarks. “These stats speak to EPP becoming a derivative of Poland’s burgeoning consumer market.”

Image courtesy of Echo Polska Properties