In its first half-year since listing on the JSE, international real estate investment trust Echo Polska (EPP) has posted distributable earnings of €34-million, while declaring a dividend per share of €0.31, 2.2% ahead of its forecast.
"We are building a national champion that leverages its scale and relationships to provide a leading cash generating Polish property group with a weighted focus towards retail properties in key locations, supported by strategic office sites. Europe is currently navigating a period of uncertainty. This may have a positive impact on Poland as it highlights the country's attractiveness as an investment and business destination," said CEO Hadley Dean.
EPP was listed on the JSE on September 13 and since then, has grown its portfolio from 16 to 19 properties through acquisitions worth €418-million.
The Netherlands-based company now owns a €1.4-billion diversified portfolio of nine office, ten retail projects and one retail development site in the centre of Warsaw, totaling 498 575 m2. The portfolio is located throughout 14 major cities in Poland, characterised by their economic strength, increasing purchasing power and attractiveness as an investment destination.
At a presentation of the company’s results, in Johannesburg, Hadley added that the company hoped to close a deal for an 80 000 m2 property in Warsaw by the close of business on Thursday, but he could not give any further information.
Meanwhile, the company reported a vacancy rate of only 1.7% in its retail portfolio, while its offices had a higher rate of 4.3%.
Net asset value for the period totalled €683-million.
Discussing the company’s prospects, Hadley said the company’s policy was to be a pure Polish property play. “We think of Poland as a young Germany . . . a Germany of the 70s, it is booming. It has low labour costs and a well-skilled workforce who are motivated and want to build their country,” he stated.
He further noted that between 2007 and 2015, the country experienced a 45% growth in gross domestic product, based on purchasing-power-parity per capita. “The next country in Europe to achieve such high growth was Sweden, at only 11%,” said Hadley.
Poland was also expected to be the fastest growing large economy in the European Union by 2050.
Further, Poland was experiencing strong consumer sentiment which was expected to drive retail turnover. It is also in the top ten countries in terms of adding more new retail space relative to existing space at 1.3%. This would be further supported by the country’s 500+ social programme, which supports families with more than one child with a grant of €125 for each child.
“This disproportionally increases the percentage of disposal incomes in regional cities,” said Hadley.