Having followed an aggressive strategy and compled five acquisitions in the three months ended March 31, JSE-listed real estate investment trust (Reit) Echo Polska Properties (EPP) is set for strong distribution growth in the year ahead, having reported distributable income a share of €2.74 for the quarter.
This amounted to €23.95-billion in profit attributable to EPP shareholders, with the company believing there is further opportunity for growth in the underlying net asset value per EPP share.
In an interview with Engineering News Online, EPP CEO Hadley Dean said the company’s aggressive acquisition strategy in its focus country Poland stemmed from its belief that there would be significant growth in the retail sector.
“Poland is developing closer to Western European standards and is at a tipping point with a rapidly growing middle class, with rising lifestyle expectations."
Looking ahead, the property play might selectively acquire high-quality, well-located office assets in major Polish cities and let to strong international and domestic tenants where the management team believes there is scope for further value uplift.
However, the Reit would not exclusively focus on garnering growth through acquisitions, with Dean noting that organic growth represented growth opportunities that are already built into the EPP portfolio.
This included filling vacancies in newly developed properties; 18 000 m2 of retail extensions to two of EPP's existing retail centres currently under way; the 25% stake in seven right-of-first-offer assets acquired by EPP; and the Reit’s 70% stake in two of the “last and best sites” for retail development in Warsaw with a planned retail development of 192 000 m2, where there have been “no new developments since 2007.”
By 2020, Dean noted, the Reit aimed to double its retail footprint in the market with assets worth €3-billion.