The company Jeronimo Martis Polska S.A., the owner of Biedronka – has created the largest retail chain in Poland. The company has been present on the market for 25 years, and at the end of the third quarter of 2021, it can boast with 3,154 facilities located in 1,100 towns and cities. In the first quarter of the year, the revenues of the popular Polish discount food store amounted to 3.4 billion EUR, which means a 4 % increase in comparison to the same quarter last year. In 2021, the company allocated 700 million EUR for capital expenditure, 60 % of which will concern Biedronka chain. Brand expansion plans include 100 new stores in a smaller format and modernization of 250-300 outlets.
THE MOST POPULAR INVESTMENT ASSETS DURING RECESSION
Currently, the Polish discount stores Biedronka are one of the most popular investment asset, chosen by both institutional and private investors. This year is record-high. Since January, Polish investors have finalized over a dozen Polish commercial real estate transaction. Most of them concerned Polish Biedronka, followed closely by retail parks. The most attractive properties are the ones purchased in portfolios, where the main leasees are the food chain and, for example, a pharmacy, drugstore or a bank. These are usually small retail parks with an area of up to 5.000 m2. The investors are also eager to choose large-format food hypermarkets such as Tesco, Carrefour or Kaufland with an area of 10.000-20.000 m2 or individual commercial premises with an area of 100-2.500 m2, commercialized for food stores, e.g. chains such as Stokrotka, Lidl, Piotr i Paweł or Lewiatan; commercial premises with an area of 100-500 m2 commercialized for chain leasees such as Rossman or Pepco and small business units or last mile warehouses, leased within a radius of 20 km from city centers.
Shops with the following leasees: Hebe and Apteka Na Zdrowie, owned by the Portuguese company Jeronimo Martins Polska S.A., are also very popular, especially among private investors.
HOW MUCH CAN YOU EARN ON COMMERCIAL PROPERTIES LEASED TO BIEDRONKA CHAIN?
Investing in commercial real properties leased to Biedronka is a very lucrative activity. The rents of premises commercialized for discount food stores equal to approximately 30.000 – 120.000 PLN per month. With an annual interest rate of around 7%, you can precisely calculate the rent on such an investment.
Investing in commercial premises has many advantages. This form of investment ensures long-term and regular profits. The leasee’s well-established market position guarantees contracts for 10-15 years. It also needs to be said that the leasee takes cares of the premises, as each of the premises are a flagship of the brand, which directly results in minimization of owner’s expenses on modernization of facilities. The contract concluded with the network leasee also means security in case of need to pursue possible claims for overdue payments.
WHAT SHOULD BE TAKEN INTO ACCOUNT WHEN DECIDING TO INVEST IN COMMERCIAL PROPERTIES?
When investing in commercial real properties, the most important aspects to take into account before making a business decision are:
Duration of the lease agreement,
Catchment,
Location of the investment
Expected rate of return on investment,
Leasee’s economic exit options,
The amount of rent,
Availability of parking spaces,
Good access to the investment,
The ways for securing the payment of rent from the leasee.
IS DINO CHAIN A THREAT TO BIEDRONKA?
In August, the price of Dino shares on the stock exchange market reached record highs. The Investors were ready to pay as much as 318 PLN for each security, which means that the valuation of this Polish chain stores reached 31.1 billion PLN. Dino Polska is developing very dynamically. However, can it become a threat to Biedronka – the queen of Polish trade and covid transactions? Right now, Dino is undertaking big offensive actions. At the end of the first half of the year, Dino’s chain comprised of 1,622 stores and it was far behind it’s Portuguese competitor with it’s 3,154 facilities, but the pursuit is becoming more and more noticeable. In the first half of the year, Dino Polska opened 150 new stores, while Biedronka opened only 53, while closing 14 of them at the same time. When comparing the market valuations of Dino – 31 billion PLN and Jeronimo Martins, the owner of Biedronka – 11 billion EUR, which is almost 50 billion PLN, it is clear that the difference is smaller than the number of stores. Polish Dino has very promising prospects.
OTHER DISCOUNTS FOOD STORES IN POLAND
According to the latest forecasts, in the next 5 years, discount food stores will be the fastest growing format on the Polish food market. It is not only the convenient location, but also the wider and wider offer of fresh products and convenience foods that gets them on top of their competitors. In every voivodeship, new discount food stores such as Netto, Aldi or Lidl are popping up like mushrooms. There are currently 4600 discount food stores operating in Poland.
If you are going to sell or buy a Biedronka store or another discount food store, do not hesitate to contact us. We will conduct the entire sales process in a safe and efficient way.
If you are going to sell or buy a Biedronka store, do not hesitate to contact us. We will conduct the entire sales process in a safe and efficient way.
