News Article Echo Investment financial report investment office Poland residential retail
by Property Forum | Investment

Echo Investment has had another successful year. The obtained net profit of PLN 189 million mainly results from handing over to customers 1,622 apartments built by Echo Investment, as well as 1,128 apartments of Archicom, an increase in the value of office buildings and stronger performance of the Libero shopping centre.

Reaching the strategic goal of becoming a nationwide leader in the residential sector, in April 2021 Echo Investment acquired a 66% stake in the Wrocław-based developer Archicom. After the transaction, Echo-Archicom-Resi4Rent Group is one of the largest residential developers in Poland, taking into account the total sales result of 4.5 thousand apartments for sale and rent. The sellers of Echo Investment and Archicom sold nearly 3 thousand apartments. In addition, Echo Investment contracted and started construction of nearly 1.5 thousand units for Resi4Rent, the largest company with apartments for rent in Poland.

“We are completing our ongoing projects according to the plan. We constantly observe development of rents and sales prices, as well as monitor price changes in the construction market so that the start of the next construction is scheduled at the very best time. We place smaller orders and choose packaging of construction works, which allows us to keep costs at a reasonable level. Currently, the land bank belonging to the entire Group allows for the construction of over 14 thous. apartments for sale and rent in the coming years. This is an exceptionally favourable situation on the currently hot land market,” comments Nicklas Lindberg, CEO of Echo Investment.

In 2021, Echo Investment sold two office buildings which are part of the Warsaw Breweries complex, as well as the historic Malthouse and Villa, Moje Miejsce I office building, which is part of a multifunctional ‘destination’ investment in Warsaw’s Dolny Mokotów district. The company signed a preliminary sale agreement for office buildings in the Fuzja complex in Łódź. All four transactions amounted to almost €350 million and are proof that mixed-use ‘destinations’ projects – places that attract people - are more than ever in demand by investors. Echo Investment Group is also in advanced negotiations on the sale of other office buildings. Among them are the second building of the city-forming project, i.a. Moje Miejsce in Warsaw, Face2Face Business Campus in Katowice and MidPoint71 in Wrocław, which received an occupancy permit at the beginning of this year.

Since restrictions on trading were lifted last spring, in retail segment the company focused on strong marketing efforts and strengthening Libero and Galeria Młociny shopping centers as they return to their normal operations. The facilities are almost fully leased and attract new retail brands. Both projects record an increase in footfall compared to 2019, and more importantly – an increase of tenants’ turnover – by 19% in Galeria Młociny and 33% in Libero.

“We have always been focused on maintaining a healthy business. Observing changing economic environment, in 2021 we reduced the net debt to assets value from 47% to 39%. During 2022 we expect further decrease of this indicator,” says Maciej Drozd, CFO of Echo Investment.

The Group maintains a high level of cash: at the end of December it was PLN 589 million. The value of our assets amounted to almost PLN 6.4 billion and is 14% higher than at the end of 2020, and 34% than in 2019. This is mainly a result of the acquisition of Archicom group. The value of the Group’s residential assets is almost twice higher than at the beginning of 2021.