PARIS—Feeding a plan for growth in Eastern Europe, French supermarket giant Casino Guichard Perrachon has launched a joint venture with the Whitehall Street Real Estate Funds to foment construction of shopping centers in Poland and neighboring countries. A division of Goldman Sachs & Co., Whitehall is relying on Casino GP’s experience to identify locations, coordinate permitting and erect the properties. The value of those skills and contacts in the emerging region led New York City-based Whitehall to pledge 75% of the development costs for the entity.

Having entered Poland in 1996 in opening a Warsaw store, Casino GP last year harvested a portfolio of 19 supermarkets in the country under the “Geant” brand to Metro AG, and another package of 200 convenience stores to Tesco PLC, reaping a total of $1.1 billion. Upon those sales, part of a strategy to divest non-core assets, Casino GP subsequently secured several additional parcels to restock its presence in Poland.

From those, three retail properties are already under construction that will yield 1.36 million sf. Whitehall says it is investing a minimum of $680 million in those assets and others to be developed during the next five years. One of Goldman’s primary funds, Whitehall Street touts itself as the leading real estate investment vehicle globally after buying $92 billion of product overseas since 1991.

The contribution of Casino GP will be facilitated from the transfer of outstanding projects to the partnership, as further investments are expected to be financed using proceeds generated from construction. Casino GP will hold the majority of the voting rights and receive up to 70% of the development margin. The Eastern European real estate arm of Casino GP, known as Mayfield, hopes to ramp up retail construction throughout Poland, and utilizing partners such as Whitehall can accommodate expansion while limiting investment risk, company officials say in the release.

Despite Casino GP’s previous—and future— activity in Poland, the firm has been heretofore concentrated in France, Asia and Latin America. A subsidiary of French business conglomerate Rallye, and large enough to generate its own line of food products, Casino GP controls more than 10,000 discount stores, “hypermarkets” and supermarkets in 20 countries, operating under such names as Casino, Franprix, Leader Price and Vival. The retail developer expects its Whitehall venture will impact results beginning in 2009 and then continue to contribute positively going forward.

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