INTERVIEW – Croatia’s Tulipan Group To Redevelop Split Brownfield Site into Multi-use Complex
ZAGREB (Croatia), June 3 (SeeNews) – Croatia’s Tulipan Group is redeveloping a downtown site in the city of Split into a multi-purpose complex in a bid for a firm foothold on one of the Adriatic country’s key regional property markets, a senior company executive said.
“We decided to develop our projects in the Split area, because we noticed that the real estate development Business was not as present here as in some other parts of Croatia, which proved to be an advantage and a good opportunity,” Tulipan director Kristijan Gelo told SeeNews in a recent emailed interview.
Zone P26, located on Split’s main entry/exit roads with a daily traffic intensity of more than 65,000 vehicles, is a brownfield project that involves redevelopment of an abandoned and underused part of the town which requires comprehensive revitalisation and re-urbanisation, Gelo said.
“Driven by the fact that the entire district needs improvement and a new concept, we had planned mixed-use residential, office, retail and public facilities, which consequently, imposed the need for additional amenities, such as a shopping centre […]. Zone P26 […] will become the city’s new Business, residential and entertainment centre, open 24 hours a day. A team of international investors is involved in this project, as the development of the entire zone implies considerable financial resources,” the company official said.
The first phase of the multi-use complex will cost 300 million euro ($365.4 million) and will involve the construction of a shopping centre, an office tower, a mixed-use office and residential tower and 250 housing units.
The concept for Tulipan’s Split shopping centre is being developed in partnership with ECE International, a leading European company in shopping centre management and development managing over 120 shopping centres in Europe and worldwide, Gelo said.
“Tulipan’s retail centre in Split has been in the works for the past two-three years which is a good head-start on the competition,” Gelo said.
The 170 million euro shopping centre project will comprise of 60,500 square metres (sq m) of gross leasable area, offering 3,000 parking spaces and accommodating 225 shops as well as a variety other amenities such as entertainment venues, sport facilities, and a food court.
The start of construction is planned for the fourth quarter of 2010 of this year with the grand opening expected at the end of 2012, Gelo said.
The Croatian retail market saw the opening of three shopping centres in Zagreb in 2009, leading to a supply increase of 70%, data of real estate consultancy CB Richard Ellis indicated.
According to Gelo, the spike in deliveries in the Croatian capital could have been anticipated, because a great number of investors, in particular from Austria, rushed to pour money into residential and retail projects there. “Consequently, there was overdevelopment and even if the global crisis had not happened I think Zagreb would have been in crisis anyway, simply because too many residential as well as retail projects were in the pipeline and launched on the market. We are not present on Zagreb market, as we concentrated on other Croatian cities, choosing their top locations.”
Tulipan Group is currently also developing a residential project in Dubrovnik, and a holiday-home community in Seget, near the town of Trogir. The company’s Split area portfolio also includes one more residential scheme, an office tower and a hotel project in Kastel Stari.
“As for better development potential I would say that mixed-use projects definitely have an advantage, although one cannot claim that for sure, because it, in fact, depends on location […] I am of the opinion that office projects have a very good potential all over Croatia as there is a demand for such projects and A class vacancy is 6.0%, despite today's difficult circumstances.” Gelo said.
According to CB Richard Ellis data, other than a limited amount of owner-occupied space, there were practically no completions of Class A office space in Zagreb in 2009. The total modern office stock continues to be below 600,000 sq m and as such one of the lowest throughout Central and Eastern European capitals