Current report no. 4/2022
Current report no. 4/2022

Conclusion of the agreement for the sale of the real property "West4Business HUB Building A” in Wrocław

The Management Board of Echo Investment S.A. (Issuer) informs you that on 20.01.2022, a subsidiary of the Issuer, i.e. Projekt 17 - "Grupa Echo" spółka z ograniczoną odpowiedzialnością – spółka komandytowo akcyjna with its registered office in Kielce, as the seller (Seller) and Barcarrota spółka z ograniczoną odpowiedzialnością with its registered office in Warsaw, as the buyer (Buyer, with the Buyer and the Seller jointly referred to as the Parties), concluded an agreement for the sale of a real property located in Wrocław which is owned by the Seller (Agreement).

On the basis of the concluded Agreement, the Buyer purchased the Seller's real property and other assets, including in particular:

  1. the ownership right to the plot of land bearing registration number 33/1 located in Wrocław at ul. Na ostatnim groszu 3, precinct 0027, for which the District Court for Wrocław - Krzyki  in Wrocław, 4th Land and Mortgage Register Division, maintains land and mortgage register no. WR1K/00135531/6 developed with the office-services building known as "West4Business HUB Building A” consisting of one underground storey and 5 overground storeys (Building), and any and all structures, small architecture objects, installations and other objects serving the building (Real Property);

(b)        the ownership of the specified movable property.

As part of the transaction, the Parties have also concluded a building quality guarantee agreement (Quality Guarantee Agreement), a rental guarantee agreement (Rental Guarantee Agreement), a fit-out agreement (Fit-Out Agreement) and a good neighbourhood agreement (Good Neighbourhood Agreement). The basic provisions of the Quality Guarantee Agreement provide for granting the Buyer a quality guarantee for the Building and structures located on the Property. The basic provisions of the Rental Guarantee Agreement provide for a guarantee to the Buyer that the Seller will cover rent payments and service charges for individual parts of the Building that have not been rented to third parties as at the date of signing the Agreement and those that have been rented, but for which no additional conditions are fulfilled (such as, for example, delivery to tenants, payment of the first rent).The basic provisions of the Fit-Out Agreement provide for appointing the Seller as a contractor for certain fit-out works in the premises of the Building.  The basic provisions of the Good Neighbourhood Agreement provide for the regulation of certain rights and obligations of the Parties in connection with the future operation of the Property and other plots owned by the Seller.

The value of the transaction (Transaction Value) at the conclusion of the Agreement (Closing) was ca. EUR 39,025,000.00 plus VAT. The Transaction Value was reduced by the value of the rent-free periods, rent reductions and other costs, and amounts to EUR 38,158,000.00 plus VAT.

The amount to be paid at the Closing was additionally reduced by the value of arrangement works and the value of the defects’ removal works. As a result, the price payable at Closing was ca. EUR 35,380,000.00 plus VAT.

In addition, after the Closing, as part of the amount of the Transaction Value, the Seller will receive a separate fee related to the completion of arrangement works on the tenants' premises and the repair of defects in the total amount of EUR 2,778,000.00 plus VAT.

The provisions of the Agreement do not differ from the provisions used in these types of transactions. The Agreement contains standard provisions for this type of transaction regarding representations and warranties of the seller and the buyer and regarding the Parties’ liability.

Legal basis: Art. 17.1 MAR - inside information

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