On 6 December 2013 LC Corp S.A. closed a deal to buy 100 per cent of shares in Sky Tower S.A., the company managing the shopping centre and office space of the Sky Tower complex. In line with the strategy of the LC Corp S.A. Group, the idea behind the transaction was to ensure further diversification of the Group’s revenue sources and to give a boost to its commercial projects. The value of the transaction is PLN 259m payable by 2019.
Located in the heart of Wrocław, Sky Tower is Poland’s tallest building. The complex combines commercial, office and residential uses. It is 212 metres high and its total area is 171,000 square metres. The project is located in Powstańców Śląskich street (one of Wrocław’s thoroughfares) and is close to the main train and bus stations. Featuring a Building Management System, Home Management System, Security Management System and access control system the complex is one of Poland’s most technologically advanced projects. Visitors of the shopping centre and of the office space can use the underground parking lot with around 1,000 parking places.
The transaction involves commercial space (29,700 sqm) and office space (18,700 sqm). Currently, close to 80% of Sky Tower’s commercial space has been leased. The three levels of Sky Tower’s shopping centre house retail and service establishments run by a carefully selected tenant mix. The top level houses an entertainment area featuring Wrocław’s largest billiards hall, Poland’s most modern bowling alley with 24 lanes on which international competitions are held, top equipped fitness club, a SPA and a beauty institute of Dr Irena Eris.Sky Tower also boasts Poland’s highest viewing point located around 200 metres above ground level. It will shortly become a major tourist attraction.
The strategy for further development of the centre is to create a commercial mix complementary to the one offered by Arkady Wrocławskie also owned by LC Corp S.A.
The deal also included 18,700 square metres of Class A office space. With Wrocław’s office space vacancy rate low (7.8% of total office space) and high interest expressed by well-established businesses, leases for all the remaining space in the facility are expected to be signed shortly.
“The transaction will reinforce the Group’s commercial property business enabling further diversification of revenue sources and reducing the risk associated with potential changes on the residential property market,” said Dariusz Niedośpiał, President of the Management Board LC Corp S.A. “In the opinion of the Management Board, the implementation of the contract will help increase shareholder value and will add stability to further development of the Group,” he added.
In connection with the transaction in question, the Supervisory Board of LC Corp S.A. has appointed Ms. Małgorzata Danek to the Company’s Management Board. So far serving as President of the Management Board of Sky Tower S.A. and of Arkady Wrocławskie S.A., Ms. Danek will be responsible for the development of the commercial facilities of the Wola Center office building in Warsaw (owned by the LC Corp S.A. Group), the Silesia Star office building under construction in Katowice, and in particular for Arkady Wrocławskie and Sky Tower in Wrocław.
“Today’s transaction and the future common management of the buildings of Arkady Wrocławskie and of Sky Tower will help us leverage on the synergy of both projects located in close proximity to one another by causing a natural migration of customers, diversification of the tenant mix and creation of a complementary retail and entertainment offer,” said Małgorzata Danek, new Member of the Management Board of LC Corp S.A. “In line with the adopted strategy, our goal will be to additionally increase business efficiency of both shopping centres,” she added.
The LC Corp S.A. Group is involved in construction projects on the broadly understood property development market, including both residential and commercial projects. Among the Company’s flagship commercial projects are Arkady Wrocławskie in Wrocław (shopping centre and office space), Wola Center in Warsaw (office use) and Silesia Star currently under construction in Katowice (office space). The Company is also very active on the residential property development market, among others in Wrocław (with a market share of around 10%), Warsaw, Cracow and Gdańsk. Plans for 2014 include further growth, mainly on the Warsaw residential development market, where the Company will start the construction of five new projects.