Echo Investment Group generated a net profit of PLN76 million in Q2 2018, resulting predominantly from 104 apartments handed over to clients and the increased value of commercial projects under construction. The company continues to divest office buildings and achieves very good leasing levels in retail projects – Libero in Katowice and Galeria Młociny in Warsaw.
In the second quarter of 2018 Echo Investment closed the sale of the West Link office building in Wrocław, and two other buildings afterwards: Symetris II in Łódź and Sagittarius in Wrocław. In October the developer will open Libero shopping centre in Katowice consisting of 45,000 sqm of fashion, entertainment and food, reflecting the new way of designing and developing shopping centres. The project is fully leased upon opening. Galeria Młociny in Warsaw is on the best way to repeat this success story: it is 87 percent leased out over half a year before the opening. From the leasing and income point of view, both projects are recording results better than expected.
“I am happy to see the progress of works on our flagship investment, i.e. Warsaw Brewery. This year all buildings making up this new part of the city will be under construction. By 2020 they will be ready and occupied, and nicely arranged public space around will be open for all residents. This is going to be the destination: a perfect place to live, work and spend free time with friends or family. I would also like to share some excellent news concerning our next destination project: a local masterplan for the area at Tymienieckiego street in Łódź has been approved. Here we have another multifunctional, city-forming project,” says Nicklas Lindberg, CEO of Echo Investment.
The margin achieved on residential sales in Q2 2018 was high and it grew from 28 percent recorded in Q1 2018 to 33 percent. On today’s market both levels are excellent.
‘To be able to defend this margin with increasing costs, high demand for apartments and decreasing supply, we have adjusted our strategy in the sector. In line with this new strategy, up to 80% of apartments in each project will be sold before completion of construction, and the remaining 20 percent within the coming six months after occupancy permit. Our experience proves that the margin on finished apartments is higher, as clients can see them inside before transaction and move in almost immediately’ comments Waldemar Olbryk, Board Member responsible for residential segment.
This year Echo’s sales department is targeting to hand over 1,000 apartments to clients and to conclude preliminary agreements for the sale of 1,100 premises.
Echo Investment has divested 35 million of shares in EPP that created around EUR40 million of positive cash flow to the business. Divestment of remaining 15 million shares is still the target of the company.
“Our cash position remains strong, and the net debt-to-assets value ratio is stable at 29 percent. Strong financial situation provides a good starting point for the future development and further growth of our Group,” says Maciej Drozd, Echo Investment’s CFO.
