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edition 3 (218)
March 2017
Retail & leisure

Easy rider

A sporty attitude towards real estate

Anna Pakulniewicz

Easy rider
Rafał Sonik, president of Gemini Holding

Rafał Sonik, the head of Gemini Holding and one of the most unconventional personalities on the real estate market, reveals not only some of the secrets behind a successful retail project, but also of the sports challenges he faces

Anna Pakulniewicz, Eurobuild Central & Eastern Europe: Gemini Holding has been operating on the Polish development market for over 20 years. A few years ago you made the decision to build shopping centres under the Gemini Park brand. Now there are two malls in operation: in Bielsko-Biała and in Tarnów, and one in Tychy is under construction. What are you focusing on at the moment?

Rafał Sonik, president of Gemini Holding: We are currently working intensively on the third stage of the Power Center project in Tychy, which involves the construction of a 36,000 sqm shopping centre. The first two phases have been completed by Tesco, Obi and Saturn, which built facilities with a combined area of 25,000 sqm. We are already seeing a great deal of interest from tenants and we are aware that a shopping centre of such a size is going to be too small to satisfy this. This is excellent news for a developer, right? We will probably increase the area to more than 40,000 sqm. Time will tell whether the decision is too revolutionary or too conservative – perhaps a retail area of 40,000 sqm will not be enough to satisfy the growing demand. I actually hope that it will turn out that we were too conservative! We are also working on the extension of Gemini Park Tarnów; however, we are struggling with the current zoning plan for the area around the project, which does not allow us to extend the centre at this time. But this does not mean we are not looking for other solutions. Due to the evolution of the market and retail formats there have been requests and motions from large-format tenants for reductions in the size of their units – and this has given us the opportunity to improve our tenant mix and as a result do something that will be a positive surprise for our customers. Such expectations will meet Tesco’s request for a reduction in the area occupied by the company.

I think that Gemini Holding and Tesco could both benefit from such an approach...

Absolutely right. This is a result of the evolution of the market and the objective processes that have taken place over the last few years. Changes in consumer preferences are leading hypermarkets to reduce their space. There are still a few players that have large areas, such as E.Leclerc or Auchan, but the majority of chains are reducing the size of their largest stores. Tesco occupies as much as 11,000 sqm in Gemini Park Tarnów. We will also be working on changes for Castorama, to give their store a separate outdoor entrance. We are treating the introduction of this modification as an advantage and an excuse for further improvements to the centre, which will not only fulfil tenants’ but also customers’ needs. ‘Big Box’ shops had already played out their role a few years ago – they were then the anchors, but the structure of retail has been transformed over the last few years. To summarise this, the modifications carried out in response to the evolution of the market and customers’ expectations have been beneficial to us – they have made us hopeful of gaining a few thousand square metres in a short period of time, while the amendments to the zoning plan could take one, two or even three years. We are in talks with the city authorities, but such a process takes a long time. However, we are very happy to have the support of the local community – as many as 45,000 residents of Tarnów have signed a petition for the extension of Gemini Park in Tychy.

We will keep our fingers crossed too! And are there any significant changes planned for the Bielsko-Biała shopping centre, which had a leasable area of over 40,000 sqm after its last extension almost two years ago?

In 2017 we will finish the commercialisation of the shopping centre. We have been constantly working on improving the tenant mix and adjusting it to customers’ needs. It should be bone in mind that the hypermarket in this centre is large, which is why it is not out of the question that we will be reducing its size in the future. New tenants are emerging all the time and it might soon turn out that we will be a few thousand square metres short.

I remember some time ago that you were planning a department store in Kraków.

We still plan to do this. We have been encouraged by a few important factors. The location would be on the other side of the city’s Old Town to a shopping centre, so there is no issue of any overlap of catchment areas. Secondly, as many as 180,000 people walk past the site every day. The store will be located at the end of ul. Szewska, at the junctions of five streets: ul. Dunajewskiego, ul. Karmelicka, ul. Szewska, ul. Podwale and ul. Krupnicza. This could be regarded as giving it accumulated purchasing power – that is, that it’s a sure bet. I do not want or need any additional confirmation of the quality of this location, because shops have been operating on the ground floor since 1990 and they are doing great. We assume that a building of several storeys will be developed on it in the future – a classic department store. We are refining the formula to turn it into a city centre project.

And what will it look like?

The first and second floors will include an extensive range of retail and services, while the other floors will extend this into a hotel section. We are already in negotiations with hotel chains and would like to create a hotel that would have four or five stars. It is a beautiful location, which gives us reason to believe that a superior standard hotel would work well there. We are focused on getting the right chain operator because we want to guarantee the high quality of hotel services offered.

We have also heard about your plans for Zakopane. A modern shopping centre in the winter capital of Poland could be a hit. Could you tell us whether and when we should expect this to happen?

We are planning a retail and services project there, but we are not pushing for a quick construction launch. The project is developing at its own pace and could still be evolving for some time, so we do not want to speed anything up. If you hear ‘air-conditioned, covered promenade alongside Krupówki’, it probably sounds like a good thing? The weather in Zakopane is often unsuitable for outdoor shopping, which is why a project like that could become very popular with tourists and local residents. With our project, Zakopane could gain an additional huge attraction. I would like it to include cafés, restaurants, bars, shops, a cinema and some conference rooms. The promenade could be built between the buildings, parallel to Krupówki, and would develop the back of the street, which requires renovation and modernisation. We do not want to demolish tenement buildings or enter the ‘front’ of Krupówki.

So what is in the way?

So far I have not heard any significant, content-related arguments against the project. However, there could be objections from e.g. restaurant operators and shopkeepers on Krupówki – they could be wary of the competition. I am not concerned about such objections, because we are approaching this project calmly and patiently, without any stress, which is important due to the fact that this kind of approach is often more successful. I believe that our project will be an additional attraction for Zakopane. Some local pistes have been closed down, which has reduced the tourist attractiveness of the town. Places such as Białka, Bukowina and Szczyrk, which have been developing, are now absorbing a lot of the region’s tourist traffic, so it is probably worth working on an additional attraction for Zakopane... However, there is another significant project that we have been focusing on. Some time ago we purchased a plot in Zabrze that has substantial potential. We are currently trying to work out the best concept for the development of the site.

What are your long-term plans?

We are still working on three next projects in southern Poland, which I will be able to discuss in more detail soon. Our business will continue to be conducted in such a way that everyone faces realistic challenges and senses the balance between professional and private life.

Indeed: private challenges... what are your sport-related plans?

The ninth Dakar Rally is now behind us, which was completed by myself and Kamil Wiśniewski as a team. We both finished in leading positions and carried out our plan for two Polish quads to ride up onto the ramp in Buenos Aires. In 2015 I achieved the greatest success of my life because I won the World Cup and the Dakar Rally in the same year. This time, in 2017, I was not on the podium, but it should be remembered that 2016 was also my ‘double’ year. I won the World Cup in two categories and, interestingly, I only found out about the second one at the finish line. Furthermore, I recently received a letter from the Federation of Motor Sports stating that the two medals should be treated separately as two World Cups rather than one victory in two categories. Why is this important for me? Because my goal is to break the record of Sebastien Loeb in WRC and this involves winning more than nine titles in the course of the career. There are fifteen of us now who hold six titles or more. This group includes Loeb, who does not ride anymore, with nine titles, and Michael Schumacher with seven. Thanks to the two titles in 2016, I am one of the fifteen top motor riders in history and this is an achievement! If I win another title next year, I will be one of the top ten, which brings me closer to my lifetime goal. To sum up: in sport I am in pole position; in business I am calm, and in life I am fulfilled.

It seems that sport helps you in business. It has given you fortitude, perseverance and it relaxes you...

Of course. For example, a few years ago if I discussed the attitude of town councillors to the extension of the shopping centre in Tarnów, you would see a tense or perhaps angry, dissatisfied, frustrated, possibly irritated person. I’m not this person these days. Sport has given me this calm. I can see that there is no point getting frustrated. Nothing changes when you are tense, you can only make things worse.

Sportsman and entrepreneur

Rafał Sonik was born in Kraków, thus his business interests in the retail market are in the south of Poland. In motor sport he rides quads in off-road rallies. He has won the Dakar Rally and is a six-time winner of the FIM World Cup. Prior to this he was the enduro rally champion of Poland five times. In 2009 he was the first Pole to enter the quad category at the Dakar Rally, where he came third – the highest position in the history of Polish participation in any category at Dakar. In business he is the president of Gemini Holding, which has been operating on the Polish development market since 1993. During its lifetime, the company has built facilities for foreign chains such as Castorama, Carrefour, Tesco, Lidl, Bricomarché, Géant and McDonald’s. In 2009 the company completed the Gemini Park shopping centre in Bielsko-Biała, followed in 2010 by Gemini Park Tarnów. It is currently building a third centre – Gemini Park Tychy. The company is both an investor and developer.

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