Six office buildings sold, another five buildings with occupancy permits, nearly 45,000 sqm of offices leased, the development of the food & beverage segment and the strengthening of the diverse offer of Libero Katowice and Galeria Młociny - these are the developer's key commercial sector successes in 2022. Thanks to its stable position in the market, Echo Investment effectively manages and develops its portfolio in the face of the challenges experienced by the real estate market.
Commercial real estate continues to be a strong keystone of Echo Investment's business. In 2022, the developer completed 104 thousand sqm of modern office space. In the past year, occupancy permits were granted for Wrocław-based MidPoint71 (over 37 thousand sqm), the Łódź-based REACT (15 thousand sqm), two office buildings at Milionowa Street (M4 and M4A) in Fuzja (nearly 22 thousand sqm) and the first phase, including segments A and B, of the Cracow-based Brain Park complex (nearly 30 thousand sqm).
- In 2022, the real estate market faced further challenges: the war across our eastern border, the unstable political situation in the region, inflation, the supply chain crisis, rising construction costs, reduced mortgage availability. Our strong performance in the commercial real estate business is the result of hard work of our experienced design, development and leasing team. Hundreds of hours of analysing and constantly modifying our portfolio allow us to respond even more strongly to the fast-changing needs of investors and tenants. The standard of our projects and our stable position on the market, resulting from our previous attention to the quality of the products and services we provide, earns the trust of our clients. As a result, we can be proud of such successes as the sale of six office projects for a total of more than EUR 200 million. This proves that good commercial real estate, despite the turmoil all around, will stand strong as a great investment product - sums up Rafał Mazurczak, Echo Investment's Management Board Member responsible for the commercial real estate sector.
The projects sold in 2022 include: West 4 Business Hub (15,500 sqm) and MidPoint71 (37 tys. sqm) in Wrocław, three office buildings as part of the 'destination' Fuzja project in Łódź and two office buildings in the Face2Face Business Campus complex (nearly 46,000 sqm) in Katowice.
Tenants still believe in offices
Two years of the pandemic have taken a heavy toll on the health of the office sector. Nevertheless, according to reports prepared by consultancy agencies, the activity of tenants in terms of offices is on the rise. Although companies have not completely given up on remote working, moving to a hybrid mode, the availability of well-designed spaces that reflect the brand spirit or corporate culture has not lost its importance. Echo Investment finished the year 2022 with nearly 45,000 sqm of leased office space. Among a dozen great lease contracts, it is worth mentioning the largest transaction of 8.5 thousand sqm for EPAM Polska in Brain Park in the Cracow-based Grzegórzki district.
Echo Investment's relations with tenants do not end with the signing of a contract. The internal fit-out team supports companies that choose spaces from Echo in coordinating the office fit-out process. It is responsible for coordinating the preparation of office space for our tenants. Turnkey completed offices are their speciality and the team delivered 40 fully arranged co-working spaces with a total area of over 65,000 sqm in 2022. These include offices for brands such as PepsiCo, CodeLab, 3M, PwC, Fujitsu Poland and CitySpace.
- In recent years, the criteria for selecting offices has tightened up considerably. The increased importance of ESG in business, the search for safe and healthy living and working spaces, services and amenities available at fingertips and even sometimes exclusively are mainly points on our clients' "must have" list. The satisfactory rental rate achieved by our team allows us to plan 2023 with optimism. Further bold projects lie ahead of us. Thanks to many years of experience, our broad perspective and, above all, our prudent decision-making, we can raise the bar, even in difficult times - highlights Rafal Mazurczak.
The developer's portfolio also includes flexible office space offered as part of the activities of the operator CitySpace, which includes currently 12 locations with a total area of 25,000 sqm, and which operates actively in 5 cities in Poland: Warsaw, Wrocław, Cracow, Katowice and Gdańsk, and will soon expand to Łódź. The availability of such space is a great addition that complements what Echo Investment has to offer in its Class A office complexes.
- The synergy of efforts in the areas of offices, shopping centres, food & beverage, which we started by executing ambitious destinations strategy, yields visible results. Warsaw Breweries, our flagship project in this category, has already won the hearts of more than just the residents of Warsaw and visitors to the capital. The project was appreciated by the jury of the prestigious MAPIC Awards competition, when we received an award in the Best Urban Regeneration category. This is a great distinction for us, but also motivation not to rest on our laurels. We see 2023 as the year of destinations. We are still working on Fuzja in Łódź. We have further destinations projects planned at Wita Street in Cracow and Towarowa Street in Warsaw. When planning the office complex at Swobodnia Street in Wrocław, we also would like to embed the values that were successful in these mixed-use, city-building projects, such as Breweries and Fuzja in Łódź - says Rafał Mazurczak.
At the heart of each destinations project is a strong food & beverage and service component that complements the offer of mixed-use projects. Great restaurants, cosy cafés, top-level services, well-supplied shops, patisseries, bakeries and delicatessens are the domain of the food & beverage team. Echo Investment signed 30 lease contracts in this segment in 2022.
Shopping centres are easy to like
The strategy of strengthening the Libero Katowice and Galeria Młociny shopping centres, based on further diversifying what they offer to respond even more to the needs of visitors and strong marketing support, keeps bringing success. Both centres are almost 100 percent leased and enjoy steady increases in footfall while tenants' turnover rises. Libero, as a 'convenience' shopping centre, has become a 'neighbourhood shopping mall' - nearby, all-round, offering a wide range of possibilities.
- The year 2023 will not be easy for many sectors of the economy, including the real estate industry. There are still many challenges that our industry has to cope with, but we are ready to face them. We are being prudent with our upcoming projects. The current market situation requires a strategic and broad-based perspective. We talk a lot about sustainability, returning to nature, mindful designing with concern for the well-being of users. Our clients expect from us not just declarations, but actual solutions. That is why we pay so much attention to designing our developments, modifying them, defining trends, which in 4-5 years, when the project becomes fully functioning, will be our everyday reality" declares Rafał Mazurczak.