Echo Investment releases results

Last year Echo Investment started work on nearly 200,000 sqm of office, residential and retail space, and completed almost 170,000 sqm, twice as much space as in 2015. The company leased 80 pct more space than in the previous year and 925 apartments were sold, 56 pct more than in the previous year. “In 2016, Echo Investment became a pure developer. Based on our completed assets, we created Echo Polska Properties, attracted a respectable co-investor to the new company and successfully listed it on Luxembourg and Johannesburg stock exchanges. Later, we sold Q22 to Invesco Real Estate and three office buildings to EPP, for a total price of EUR 397 mln. Sales for almost our entire commercial property pipeline for 2017 and 2018 have already been secured by preliminary agreements with their eventual owners. This gives us a very stable outlook for future business growth and future returns,” says Nicklas Lindberg, Echo Investment CEO.

In 2016, Echo Investment Group generated PLN 480 mln revenue, with PLN 605 mln in operating income, and a net profit of PLN 388 mln. It had assets worth PLN 3.4 bln and the ratio of its net debt to total assets less cash decreased to 24 pct from 50 pct in 2015. For the first time in its history Echo Investment shared its profits with its investors. The total return on Echo’s shares in 2016 came to 62 pct, together with the share price and dividends paid or declared. “Having secured the sale of almost all the projects in our pipeline, the management board has decided to adopt a dividend policy. In 2017, Echo Investment will pay its shareholders PLN 0.5 per share, and after that – up to 70 proc. of the net profit will be shared. The remaining profit will become the foundation for the company's future growth. We want Echo Investment to be a stable and attractive investment target,” stated Maciej Drozd, Echo Investment's CFO.

Set to work
In 2017 the company intends to launch construction of projects with a combined office, retail and residential area totalling 182,000 sqm, and to complete over 150,000 sqm. of space. The company is planning to start construction work on the first stage of the office section of its flagship Browary Warszawskie mixed-use poject in Warsaw. Echo has also revealed some details regarding its project at ul. Towarowa 22 in Warsaw’s Wola district, at the site of former Jupiter shopping centre. The company is to develop 110,000 sqm of retail space with work on the project to begin in the second quarter of 2018. Additionally the developer is planning to build 15,000 sqm of residential space and 60,000 to 70,000 sqm of office space.

At the end of the year work on the next phases of its office projects on ul. Beethovena in Warsaw (17,800 sqm) and ul. Grundmanna in Katowice (23,000 sqm) should also start.

Hungry for land
Echo is also in negotiations for a number of land plote. “Since the beginning of 2016, we have bought several plots, which will be used to develop 123,000 sqm of residential, office and retail space. We are also well advanced in negotiations regarding acquisitions of areas with the potential to build over 500,000 sqm. These activities, together with our Towarowa 22 and Galeria Młociny projects that we are going to develop with EPP, secure the implementation of our investment plan for the next few years,” adds Nicklas Lindberg. Echo has also divested land on ul. Degtyarivska in Kiev (4,3 ha) and is looking for a buyer for a plot in Budapest (6.8 ha), Brașov (5 ha), Słupsk (6,6 ha) and Koszalin (3,9 ha).