UNI Centrum re-loaded

After a year of inactivity and a change of hands, the Katowice UNI Centrum building site will be bustling again soon. Indeed it should be ready in November. But will it find tenants?

Despite the quiet holiday season, Katowice seems more buoyant than Warsaw at the moment. In the last issue we reported that the Moonfleet fund had acquired the Silesia Park retail and leisure centre project. Then rumours of Mostostal Zabrze's successful battle for survival and its first negotiations with creditors over debt reduction, followed in July. Soon after that, Reliz became the new owner of UNI Centrum, a 66,400 sqm mixed use complex.
"Having new owners means we can conduct talks with prospective tenants more easily," says Piotr Gawlikowski, Head of UNI Centrum's Leasing Department, acting on behalf of Business Centre 2000, a company founded by Mostostal Zabrze management and then placed in charge of UNI Centrum. "We are finally certain of completing the investment and in all likelihood, it'll be launched this November."

Debt collected
A few years ago construction firms such as PIA Piasecki, Exbud, Polnord and Budimex, took up development, similarly to Mostostal Zabrze. UNI Centrum's initial blueprint was to comprise offices, retail and service units, a multiplex and a four-star hotel and MZ reserved for itself the role of general contractor. The cornerstone was laid in April 2001.
Alas, hard times fell on construction firms and Mostostal Zabrze was no exception. As a last resort, the debt-ridden company considered offloading its shares in Business Centre 2000, but ultimately desisted.
The turning point came in December last year. "When Mostostal stopped paying the sub-contractors, the latter left the [UNI Centrum] site, and the scheme was discontinued," says Gawlikowski. "To make matters worse, Kredyt Bank, who'd loaned money to UNI Centrum started demanding re-payments. Finally, last Spring, the Kredyt Bank Capital Group took over Business Centre 2000's shares."

Mysterious merchant
According to John Banka of Colliers International, who were originally to mediate the sale of UNI Centrum, the owners entered into negotiations with five prospective buyers, but eventually struck a deal with another player and without CI's involvement. In mid July Reliz, part of Warsaw developer Dom JMJ, was announced as the new owner of the project, though it was agreed that all contracts signed by Business Centre 2000 prior to the take-over, would be honoured.
Neither the agents nor market analysts Eurobuild talked to had any knowledge of Dom JMJ's activities. Both BC 2000 and Kredyt Bank refused to comment on the new UNI Centrum owner, preceding an official statement from the buyers.

Four-star prestige
The change in ownership, cessation of construction and lack of a fixed completion date scared off potential tenants, while those who'd already signed lease agreements, such as Kinoplex and Noma 2, decided to withdraw from them. The previous contract with the hotel operator is now invalid for other reasons but negotiations with the InterContinental Hotel Group and Six Continents have resumed. According to Gawlikowski, the hotel is practically ready and will be launched as soon as it's furnished.
"The presence of a four-star hotel will certainly help UNI Centrum as the market for this standard of hotel is still rather barren in Katowice. In fact, there is no competition to speak of," says Gerard Mikina of Ober-Haus.

Getting them in
Sub-contractors are currently flocking back to the UNI Centrum construction site, 96 per cent of which has been completed, according to Gawlikowski. Only the finishing and installation work remains to be done, and in the meantime the agents in charge of the building are bracing themselves for a big job.
"We're continuing to talk with those tenants who were interested in the building before construction ceased earlier on," says Marcin Kania of Colliers International. "Two major lease agreements have already reached the advanced stages of negotiation but I'd rather not divulge details."
"A marketing strategy for UNI Centrum has as yet not been developed," says Gerard Mikina. "A lot will depend on the new owner's expectations, and the action plan will have to be agreed on by all the tenants. If the truth be told, leasing UNI Centrum won't be that easy as there's little demand for high standard office space in Katowice."