Polish billionaire Mariusz Świtalski wants to expand his Czerwona Torebka chain of strip malls, but due to difficulties in obtaining funds has turned to a somewhat unorthodox financing model.
To raise sufficient capital for the investment Czerwona Torebka is looking for investors willing to buy individual units in the malls, whose prices start at zł.350,000. The group would later lease them from the owner for a period of 15 years. The company guarantees investors annual return of 8 percent.
Czerwona Torebka would later sublease the units to retailers. It is a business model not unlike the increasingly popular condo hotels.
“Purchasing a unit in Czerwona Torebka mall is an ideal alternative to investing in residential units and renting them out or in other financial and investment products, like deposits and bonds,” the company wrote in its internet ad.
This is the most recent in several attempts the company has made to raise capital for its expansion. Its WSE debut in December of last year brought the company a mere zł.19 million, far below its target of zł.250 million. Its stock price has barely moved since the listing. In June the company’s board decided to issue bonds worth zł.100 million. This plan fell through as well and the group managed to raise only a little over zł.14.6 million.
The WSE-listed company, primarily engaged in the construction and management of strip malls, wants to open 1,900 new malls by 2021. By comparison, the largest retail chain in Poland, the Żabka network of convenience stores, comprises 2,800 units.
From Warsaw Business Journal
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