Current report no. 40/2022
Current report no. 40/2022

Conclusion of the agreement for the sale of the real property "MidPoint71” in Wrocław

The Management Board of Echo Investment S.A. (Issuer) informs you that on 30 June 2022 a subsidiary of the Issuer, i.e. Midpoint 71 – Cornwall Investments spółka z ograniczoną odpowiedzialnością – S.K.A. with its registered office in Kielce, as the seller (Seller), and SER Poland spółka z ograniczoną odpowiedzialnością with its registered office in Warsaw, as the buyer (Buyer, whereby the Buyer together with the Seller shall hereinafter be jointly referred to as the Parties), concluded an agreement for the sale of a real property located in Wrocław, 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 property located in Wrocław at ul. Powstańców Śląskich 9, comprising evidential plots No. 62/6 and 17/1, precinct 0022 Południe, for which the District Court for Wrocław-Krzyki, 4th Land and Mortgage Register Division maintains land and mortgage register No. WR1K/00288398/8 and evidential plot No. 62/5, precinct 0022 Południe, for which the District Court for Wrocław-Krzyki, 4th Land and Mortgage Register Division maintains land and mortgage register no. WR1K/00288399/5, developed with the office, services and retail building under the name "MidPoint71", consisting of two underground storeys and fourteen overground storeys (Building) and all structures, landscaping, installations and other facilities serving the Building (Property);

(b)        the ownership of the movable property specified in the Agreement.

As part of the transaction, the Parties have also concluded a quality guarantee agreement with respect to the Building (Quality Guarantee Agreement) and a rental guarantee agreement (Rental Guarantee 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 granting the Buyer a guarantee that the Seller will cover the rental payments and service charge payments for individual parts of the Building that have not been leased to third parties as at the date of signing the Agreement and those that have been leased but for which additional conditions (such as, for example, delivery to lessees) have not been fulfilled.

The value of the transaction (Transaction Value) at the conclusion of the Agreement (Closing) was EUR 109,265,359 plus VAT. The Transaction Value was reduced by the value of the rent-free periods, rent reductions and other costs, and amounts to EUR 103,863,244 plus VAT.

The amount to be paid at the Closing was reduced by, among others, the value of the fit-out works in the vacant premises in the Building. The value of such works will be released to the Seller in parts after leasing of vacant premises and performance of the fit-out works in favour of new tenants. As a result, the price payable at Closing was EUR 100,547,081 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 as well as the provisions relating to appointment of the Seller as the contractor of certain fit-out works in the premises in the Building.

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