Over PLN 70 million of net profit, increasing assets value, in particular in the residential sector, as well as decreased debt level – this is a brief summary of Q3 2021 results in Echo Investment Group. The group is satisfied with the pace of Resi4Rent development and a large landbank, that allows building around 15,000 apartments.
As of the end of Q3 2021, the value of Echo Investment’s assets amounted to almost PLN 6.8 billion and was 25 percent higher than at the end of last year. This is mainly a result of the acquisition of the Archicom group. The value of residential assets was almost twice as much as at the beginning of the year.
“We are focused on maintaining a healthy business. The Group maintains a high level of cash: at the end of September, it was PLN 739 million. Having observed changing economic environment, since the beginning of 2021 we reduced the net debt to assets ratio from 47 percent to 37 percent. By 2022 we expect a further decrease of this indicator”, says Maciej Drozd, Echo Investment’s CFO.
In Q3 2021 the Group has earned PLN 70 million of net profit. That was mainly the result of handing over to customers 757 apartments, an increase in the value of office buildings and stronger performance of Libero shopping centre.
After three quarters of the year, the Echo-Archicom Group sold 2,322 apartments and appeared in the top 5 residential developers in Poland. Both companies have started construction of 1,300 apartments, and in Q4 2021 another 1,400 is planned to be launched.
“The market is very favourable for us: supply of new apartments is limited, demand remains high and prices grow. We are convinced that this situation will translate into the increased scale of our operation and profitability of our projects. Our common landbank, which was mainly secured before or during the pandemic, allows us to build another 15,000 apartments. This is an exceptionally favourable situation on the currently hot land market”, says Nicklas Lindberg, CEO of Echo Investment.
Apart from the apartments for sale, at the same time, Echo Group focuses on the development of Resi4Rent, the company offering apartments for rent. Today projects with 8,300 apartments are already in operation, under construction or secured. Next year Resi4Rent will have 3,700 units in operation, in 2023 – 6,000 units and finally at the end of 2024 – 10,000.
“The professional residential rental sector in Poland has only just begun to develop, but it already gains interest from global investors. This has been proven by multiple transactions concluded on the market last year at yield level similar to other attractive real estate assets”, adds Nicklas Lindberg.
Echo Investment Group also has office buildings under construction with a total leasable area of around 100,000 sqm.
“After the pandemic year we can observe tenants taking decisions on leasing the space, changing office or extending it. This year we acquired new, reputable tenants, such as Playtika, 3M GSC Poland, PepsiCo or ABB, which shows the strength of the office sector. We are happy with the high leasing level in our buildings under construction,” says Nicklas Lindberg.
Since the beginning of 2021 Echo Investment has sold three office buildings in Warsaw for over €290 million in total. The buildings sold were Villa Offices and Malthouse Offices being part of the Warsaw Breweries complex, as well as Moje Miejsce I in the four quarter.
