Pepco targets CEE for majority of planned store openings

Pepco Group is set to open 300 new stores by the end of 2025, with a primary focus on expanding its presence in Central and Eastern Europe (CEE). The majority of these openings will feature the Pepco brand, aligning with the company’s strategy to strengthen its foothold in the region, the company announced.

This approach builds on the momentum of 2024, during which Pepco launched 331 new stores, including 232 in CEE countries. Poland accounted for 83 of these locations, representing more than 25% of the total.

“Our strategy focuses on markets we know well, where we are confident in achieving strong returns. Most of the new stores will be in the CEE region, where we already hold a strong market position,” said Marcin Stańko, Chief Operating Officer for Eastern Europe. “We aim to expand across a range of locations, including shopping malls, retail parks, and high streets, ensuring convenience for our customers in all settings.”

Pepco is also prioritizing improvements in product assortment and customer service to enhance shopping experiences. “Deepening our understanding of customer needs is a critical part of our strategy,” the company emphasized. Regular research and analysis of consumer trends, brand value, and macroeconomic factors guide decisions across various departments, from purchasing to store design, ensuring offerings are tailored to customer preferences.

Marcin Stańko, who has been instrumental in Pepco’s growth since its inception in 2004, returned to the company in 2024 as Chief Operating Officer for Eastern Europe. With nearly 30 years of retail experience, Stańko is leading network expansion and operational strategies across the region.

In Poland, Bożena Pekowska, a long-time member of the Pepco team, has resumed her role as Head of Expansion after a brief hiatus. Pekowska, who has been with the company since its early days, is expected to play a pivotal role in driving growth within the Polish market.

Pepco continues to see significant potential in the retail sector and plans to sustain its growth by focusing on market-specific strategies and customer satisfaction. By prioritizing research-driven decisions and adapting store formats to meet local needs, the company is positioned to strengthen its dominance in the CEE region while delivering a high-quality shopping experience.

Source: Pepco and ISBnews

REALIA Fund closes 2024 with strategic acquisition in Pilsen region

REALIA FUND SICAV, a qualified investor fund specializing in retail park investments, concluded a successful 2024 with the acquisition of a retail park in Stod, located in the Pilsen region. This latest purchase increased the fund’s portfolio value to CZK 2.35 billion and brought its total number of retail parks to 19.

The Stod retail park houses four tenants: PENNY, TETA drogerie, Mountfield, and Press Media tobacco, all operating under long-term leases. “This acquisition aligns perfectly with our investment strategy, which prioritizes high-quality, fully leased retail parks with stable long-term rental agreements,” said Tomáš Oplíštil, a member of the fund’s investment committee and Commercial Director of REALIA GROUP. “With this property, we can immediately generate steady rental income and further solidify our position in the Czech market.”

REALIA FUND SICAV adheres to a conservative investment approach, focusing on properties with creditworthy tenants, long-term leases, and fixed interest rates on all loans. According to Oplíštil, this strategy has been a cornerstone of the fund’s success and will continue to guide its future investments.

The fund’s portfolio, now comprising 19 fully leased retail parks, features lease agreements typically ranging from five to ten years. This consistent approach underscores the fund’s commitment to stability and predictable income generation, securing its position as a trusted player in the Czech retail real estate market.

The acquisition in Stod marks a strong finish to the year for REALIA FUND SICAV, further reinforcing its reputation for prudent and strategic investments in the retail sector.

S&P: Protectionism could drive automotive nearshoring to Central and Eastern Europe

Rising global trade protectionism and nearshoring trends in the European Union may encourage Western European automotive manufacturers to shift more production to Central and Eastern Europe (CEE), according to a report by S&P Global Ratings. This shift is seen as a strategy to mitigate geopolitical risks and reduce operational costs, which could, in turn, boost business activity for local banks in the region.

S&P highlighted that structural changes in global trade and the transition to electric vehicles present significant opportunities for CEE countries. Increased nearshoring could position the region as an attractive destination for production relocations, strengthening its industrial base and benefiting local financial institutions.

Hungary and Serbia, in particular, are positioned to attract increased investment from Chinese companies in battery production for electric vehicles (EVs). However, EU tariffs on EVs may act as a barrier to these opportunities. Notably, some large Chinese banks operating in the CEE region are actively monitoring these developments, signaling potential growth in investment flows.

Despite the opportunities, the automotive sector faces considerable challenges. Uncertainty around potential U.S. tariffs on imported light vehicles, stricter EU CO2 emissions regulations for passenger and commercial vehicles from 2025, and intense competition from Chinese manufacturers in Europe are expected to weigh on the sector’s prospects.

S&P anticipates that CEE banks will closely monitor credit exposure to the automotive sector and related industries. While further tensions in the automotive sector could result in additional credit losses, particularly among suppliers, the agency noted that most Original Equipment Manufacturers (OEMs) in the region maintain strong balance sheets and solid debt servicing capabilities. Credit activities in the sector are expected to remain stable due to well-defined risk limits and robust risk management practices, often aligned with the standards of Western European parent banks.

Direct exposure of CEE banks to the automotive industry accounts for about 3-5% of total corporate loans, but a significant downturn could indirectly affect the region’s broader economy and the quality of bank assets. However, S&P emphasized that banks in the region are well-capitalized, profitable, and equipped with improved asset quality, providing a strong foundation to weather potential shocks.

The automotive industry remains vital to the CEE region, contributing approximately 5-10% of GDP and accounting for 4.1% of gross value added (GVA) in 2023, compared with 3.1% in the EU overall. About 5% of the region’s working-age population is employed in the sector, highlighting its economic significance.

Countries such as Slovakia (6.6% of automotive GVA in 2023), the Czech Republic (5.6%), Hungary (4.5%), and Romania (4.5%) play critical roles as key exporters of vehicles and components to Western Europe. The report underscored the importance of Western European OEMs’ large-scale production facilities in sustaining the region’s industrial and economic landscape.

S&P concludes that while the CEE automotive sector faces headwinds, the region’s strong banking systems and potential government support in times of stress—similar to measures taken during the COVID-19 pandemic—will likely cushion the impact of any disruptions. The growing trend of nearshoring and EV production investments further underscores the region’s strategic importance in the global automotive landscape.

Source: S&P and ISBnews

WING’s industrial portfolio embraces renewable energy in strategic partnership

WING is advancing its sustainability agenda through a strategic cooperation agreement with ALTEO Energiakereskedő Zrt., the energy trading arm of the ALTEO Group. Under this agreement, ALTEO will supply electricity from 100% clean, renewable sources to all industrial properties managed by WING Industrial, the company’s industrial and logistics division, throughout 2025 and 2026.

This partnership builds on a long-standing relationship between WING and ALTEO, which has consistently supported WING’s sustainability goals by facilitating the procurement of green electricity. ALTEO will continue providing energy for WING’s industrial parks, including Airport City Business Park, East Gate Business Park, East Gate PRO Business Park, and Login Business Park. The agreement also extends to office buildings Liget Center and Liberty, and the hotels at Budapest Liszt Ferenc International Airport, including the ibis and TRIBE Budapest Airport Hotel.

Under this expanded collaboration, ALTEO will meet the energy needs of WING Industrial’s entire portfolio using power sourced from an ALTEO-managed solar park. Additionally, 50% of the total electricity used across WING’s corporate group in 2025 will come from renewable sources, representing a significant step forward in the company’s commitment to sustainability.

WING’s dedication to ESG principles and sustainability is reflected in its long-term strategy to modernize facilities, improve energy efficiency, and adopt green energy solutions. The company prioritizes measuring and analyzing energy consumption, modernizing outdated systems, and creating energy-efficient buildings that align with both present-day environmental standards and tenant needs.

This initiative is another milestone in WING’s broader commitment to building a greener future while maintaining its position as a leader in industrial and logistics development in the region.

KNF Poland Reports 4.1% annual growth in loans and 7.5% growth in deposits at November end

The gross credit volume in Poland’s non-financial sector reached PLN 1,208.5 billion in November 2024, reflecting a monthly increase of PLN 5.7 billion (0.5%) and an annual growth rate of 4.1%, according to data released by the Polish Financial Supervision Authority (KNF). Meanwhile, the value of deposits in the sector rose by PLN 10.1 billion to PLN 1,972.4 billion, recording a 0.5% monthly increase and 7.5% annual growth.

Household receivables experienced a 4% year-on-year increase, totaling PLN 766.2 billion, while receivables from enterprises grew by 4.5% to reach PLN 433.9 billion. The gross loan portfolio for households expanded by PLN 1.8 billion to PLN 473.8 billion in November, representing a monthly increase of 0.4% and an annual rise of 4.4%.

Zloty-denominated housing loans for households grew by PLN 2.4 billion to PLN 441.8 billion in November, marking a 0.5% monthly increase and a robust 9.2% annual growth. These loans now constitute 93.2% of all household housing loans. In contrast, the gross currency housing loan portfolio for households contracted to PLN 32 billion, down 1.7% from the previous month and 34.9% year-on-year.

Consumer loans also expanded in November, growing by PLN 0.7 billion to PLN 205.1 billion, with a monthly growth rate of 0.3% and an annual increase of 7.9%. For non-financial enterprises, the gross operating loan portfolio rose by PLN 0.5 billion to PLN 171.7 billion, reflecting a 0.3% monthly rise and a 2.2% annual growth. Investment loans for the sector increased by PLN 2.9 billion in October to PLN 162.8 billion, with growth rates of 1.8% monthly and 2.8% annually. By November, these portfolios had further expanded, with operating loans reaching PLN 172.4 billion (up 0.4% monthly and 4.1% annually) and investment loans totaling PLN 165.2 billion (up 1.5% monthly and 4.6% annually).

The total non-performing loan portfolio in the non-financial sector fell to PLN 62.6 billion in November, a decrease of 2.7% from the previous month and 2.6% year-on-year. Consumer loans and operating loans comprised the largest segments of this portfolio, valued at PLN 13.4 billion and PLN 18.6 billion, respectively. The majority of these loans were attributed to private individuals, with PLN 21.5 billion, and SMEs, with PLN 18.1 billion.

The loan-to-deposit ratio remained stable at 60.4% in November, unchanged from the previous month but 1.6 percentage points lower year-on-year. Household deposits, which account for 70.5% of all deposits, increased by PLN 10.6 billion in November to a total of PLN 1,358.5 billion, growing by 0.8% monthly and 9.9% annually.

These figures highlight the ongoing growth in both credit and deposits, reflecting strong economic activity and continued consumer and enterprise confidence in the financial sector.

Source: KNF and ISBnews

Czech energy sector adds 44,633 new power sources in 2024, a 25% increase year-on-year

The Czech electricity grid expanded significantly in 2024, with 44,633 new power sources connected, representing a combined output of 1,008 megawatts (MW)—comparable to one nuclear unit of the Temelín power plant. The total number of sources now exceeds 213,000, marking a 25% year-on-year increase and a fourfold growth compared to three years ago.

Amid rising system demands, network operators have ramped up investment, allocating a record CZK 40 billion last year. This trend reflects the growing need to modernize and expand infrastructure to accommodate the rapid growth in power generation sources, according to representatives from the Czech Association of Regulated Electrical Power Companies (ČSRES) at a press conference today.

The ČSRES Association includes key players in the sector: the state-owned transmission system operator ČEPS and distribution network operators ČEZ Distribuce, EG.D, and PREdistribuce. Collectively, they manage a sprawling network of 253,000 kilometers of power lines.

This surge in new sources underscores the Czech Republic’s transition towards a more decentralized and renewable-focused energy system, requiring significant upgrades and investment in grid infrastructure to ensure reliability and efficiency.

Source: CTK

CK Investments fined PLN 1.25 million for unfair investment practices

The President of the Office of Competition and Consumer Protection (UOKiK), Tomasz Chróstny, has imposed a penalty of nearly PLN 1.25 million on CK Investments for violating consumer protection laws. The Warsaw-based company, which promoted “investment bills” as a safe and reliable alternative to traditional financial products, was found to have misled consumers about the security and returns of their investments.

CK Investments, operating in the real estate sector, began offering its so-called “investment bills” in July 2019, advertising them as a straightforward and fast alternative to bank deposits, government bonds, or investment funds. The company claimed that these promissory notes provided guaranteed returns and secured capital. However, the UOKiK investigation revealed that these guarantees were unfounded.

“Our law does not recognize the term ‘investment bills.’ This was a term invented by entrepreneurs to describe a product that allowed them to raise capital, bypassing traditional methods such as bank loans or issuing financial instruments,” explained UOKiK President Tomasz Chróstny.

CK Investments assured investors of guaranteed financial benefits at the end of the investment period, but the investigation revealed that the funds raised through these bills were primarily used to finance the company’s operations.

“The promise of guaranteed returns likely influenced consumers to entrust their savings to CK Investments. In reality, there were no guarantees of profit or even reimbursement of funds. Without these misleading assurances, consumers might have chosen to manage their money differently,” said Chróstny.

The UOKiK decision mandates that, if finalized, CK Investments must notify affected consumers who purchased the investment bills between July 8, 2019, and January 1, 2023. Additionally, the company will be required to publish details of the penalty on its website.

The case against CK Investments is part of a broader UOKiK crackdown on companies offering misleading financial products under the guise of “investment bills.”

In April 2023, UOKiK issued a consumer warning about Assay Management Alternative Investment Company (Assay ASI), highlighting the risks of such practices. Subsequently, in February 2024, Assay ASI and its management faced penalties exceeding PLN 1.3 million for similar violations.

Other notable cases include:
• Aforti Holding, fined over PLN 790,000 in 2023.
• BREWE Leasing, fined PLN 150,000 in 2022.
• Yanok Mortgage Fund, fined nearly PLN 400,000 in 2021, a decision later upheld by the Court of Competition and Consumer Protection.

CK Investments retains the right to appeal UOKiK’s decision to the Court of Competition and Consumer Protection. However, if the decision is upheld, it will set a precedent for addressing misleading practices in the financial sector, reinforcing consumer protection in Poland.

This case underscores UOKiK’s commitment to combating deceptive financial practices and ensuring that consumers are not misled by false guarantees or unregulated investment schemes.

Source: UOKiK

AIF Capital Group expands portfolio with acquisition of Nokia Arena car park in Finland

AIF Capital Group has broadened its Parkhausfonds Europe portfolio with the acquisition of the Nokia Arena car park in Tampere, Finland. The investment of approximately €11.5 million aligns with the fund’s strategy to diversify within politically and economically stable markets. The car park is part of a cutting-edge urban development project and represents a significant addition to the fund’s strategic growth.

Completed in 2021 as part of the ‘Asemakeskus’ urban development project, the underground car park is located in Tampereen Kansi, a district that benefits from strong demographic and economic growth. Tampere, Finland’s third-largest city, is a hub of scientific and economic activity and the country’s most sought-after place to live, with a steadily increasing population. The car park, operated by AIMO Park, offers significant growth potential due to its prime location and proximity to a diverse target audience.

AIMO Park, a leading mobility provider in the Nordic region, leverages over 50 years of expertise in car park management. The company integrates innovative mobility solutions, including car sharing and electric vehicle charging infrastructure, across more than 250 cities in Scandinavia. This positions the Nokia Arena car park as a forward-looking asset, bridging traditional parking services with modern urban mobility needs.

Daniel Wolf, Managing Director of AIF Management GmbH, highlighted the importance of this acquisition:
“This transaction posed unique challenges that we successfully addressed through collaboration with our team and partners. By acquiring this prime property in a central urban location, we not only enhance our Parkhausfonds Europe portfolio but also establish a foothold in a promising new market.”

The transaction was facilitated by Tampereen Tornit KY, with legal advisory provided by DLA Piper, a leading commercial law firm in Scandinavia. Brokerage services were managed by OrangeIM.

Wolf further emphasized the strategic importance of the investment:
“The evolving landscape of urban mobility and the growing scarcity of parking in European cities underscore the value of this acquisition. It reinforces our position as a leader in parking property investments and aligns with our commitment to future-oriented, diversified real estate strategies.”

The acquisition of the Nokia Arena car park reflects AIF Capital Group’s ongoing efforts to address the changing dynamics of urban mobility while delivering sustainable growth for its investors.

Verdion secures additional €100 million for its Verdion European Logistics Fund 2

Verdion has secured an additional €100 million for its Verdion European Logistics Fund 2 (VELF 2), raising total closed capital for its second value-add fund to over €300 million.

This latest commitment, finalized at the end of 2024, follows a €150 million investment made in September by CBRE Investment Management, acting on behalf of its Indirect Private Real Estate Division. The initial closings of €75 million were sourced exclusively from investors in Verdion’s inaugural VELF 1 fund, launched in 2020. The fundraising process for VELF 2 is ongoing.

VELF 2 focuses on acquiring and repositioning under-capitalized and under-managed logistics assets in established markets across Northern Europe. Leveraging Verdion’s vertically integrated team and in-house technical expertise, the fund undertakes refurbishment and development projects aimed at transforming properties into high-performing, ESG-compliant assets.

Recent activity includes:
• A second acquisition and major pre-let to cosmetics distribution brand Sæther, near Helsingør, Denmark.
• Completion of a €33.5 million, DGNB Gold-certified distribution center in Horsens, Denmark, in mid-2023.

Further acquisitions are planned, with a strong pipeline focusing on Germany, alongside Sweden, Denmark, and the Netherlands.

Track Record of Success

Verdion’s first fund, VELF 1, closed in 2020 after raising €158 million. Together with debt financing, the fund invested over €300 million across 11 logistics assets in Germany, the Netherlands, Denmark, and Czechia. Notable transactions include:
• The 2022 sale of a facility for UPS near Prague Airport.
• Ongoing disposals of assets in Germany and the Netherlands, expected to close in Q1 2025.

Simon Walter, Executive Director – Investment Management at Verdion, stated: “Securing this additional commitment is a clear endorsement of our strategy, particularly in a challenging capital-raising environment. Our focus on creating and repositioning market-leading assets, underpinned by technical innovation and strong ESG credentials, continues to resonate with investors from the US, Northern Europe, and Asia-Pacific.”

Verdion’s value-add strategy and robust pipeline underscore its leadership in the logistics real estate sector, positioning VELF 2 for continued growth and success across Northern Europe.

Colliers appoints Grzegorz Sielewicz to Lead Economic and Market Analysis for CEE

Colliers has announced the appointment of Grzegorz Sielewicz as Head of the Economic and Market Analysis Department for Central and Eastern Europe (CEE). His role will cover Bulgaria, the Czech Republic, Hungary, Poland, Slovakia, and Romania.

Grzegorz brings two decades of expertise in economic research and market analysis, specializing in the commercial real estate sector across the CEE region. His work has focused on macroeconomic trends, sector insights, and market dynamics. At Colliers, Grzegorz will lead the development of the company’s research platform at both regional and local levels, offering clients forward-looking insights and analysis.

In his role, he will provide detailed evaluations of the effects of macroeconomic, political, and social developments on the real estate market. This approach aims to support Colliers’ clients in making informed, strategic decisions. Grzegorz will also collaborate with local market intelligence teams to ensure the delivery of timely and consistent data across the region.

“Grzegorz is a recognized expert in economics and risk assessment, with a wealth of publications and a reputation as a sought-after speaker at global events,” said Monika Rajska-Wolińska, CEO of Colliers for CEE. “His appointment is a strategic move to enhance our management team and operations in the region. With his expertise, we can offer our clients deeper insights into market trends and the factors shaping business strategies.”

Prior to joining Colliers, Grzegorz served as Chief Economist for CEE at Coface, a global leader in credit insurance. His career also includes positions as Chief Specialist in the International Capital Markets Department at the Ministry of Finance and roles at Deutsche Bank and UniCredit Brokerage House.

“As an analyst, I am deeply committed to exploring all facets of the real estate market and understanding the factors driving or hindering its development,” said Grzegorz Sielewicz. “I look forward to working with the regional Colliers team to provide clients with thorough, actionable insights that empower them to make the best decisions for their businesses.”

This appointment underscores Colliers’ commitment to delivering market-leading intelligence, ensuring clients across the CEE region benefit from expert guidance in navigating the complexities of the real estate industry.

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