Preliminary agreement regarding the consolidation of Echo Investment's and Archicom’s residential business, high level of cash amounting to PLN 778 million, PLN 11.5 million in net profit which was mainly the result of the revaluation of Resi4Rent projects and handing over to customers nearly 300 apartments – this is a brief summary of Q1 2023 results of Echo-Archicom Group.
By the end of March 2023, Echo-Archicom Group sold 374 apartments and had 2,863 units under construction. The companies plan to jointly start another 2.5 thousand still this year. Resi4Rent, a platform with subscription apartments that has been developing fast, strengthened its position as the leader of the PRS market in the first quarter of 2023. Resi4Rent currently has over 3.3 thousand ready and fully leased premises, while over 5.8 thousand is under construction or planned to start later this year.
In April 2023, Archicom has concluded a preliminary agreement according to which Echo Investment is to contribute to Archicom its residential business – in particular development projects and employees.
“With Echo Investment as a main shareholder with over 80% stake, the combined residential business will give Archicom a nationwide scale with greater growth potential, synergies and wider recognition on the market. It will also organize the structure of the Group, in which Echo Investment will focus on developing the commercial real estate segment, apartments for rent and creating multifunctional "destination" projects. This action is in line with the Group's strategy, which assumes achieving the leading position on the residential and commercial market,” says Nicklas Lindberg, CEO of Echo Investment.
Commercial real estate continues to be a strong pillar of Echo Investment’s business. The developer started the first quarter with the sale of Moje Miejsce II in Warsaw, the second office building of our Mokotów multifunctional project. The building is fully leased with strong tenants which confirms the interest in sustainable, high quality destination projects. Currently, Echo Investment is conducting advanced negotiations on the sale of further buildings, and looking to the future – it is preparing new investments, from which projects in Warsaw, Wroclaw and Krakow are to be kicked off still this year.
Libero shopping centers in Katowice and Galeria Młociny in Warsaw operate at full capacity and strengthen their position on local markets. The beginning of 2023 has been a continuation of growth in both locations. Libero's turnover in the first quarter of 2023 was 27% higher than in the first quarter of 2022, while footfall – by 7%. An equally good situation is observed in Warsaw's Galeria Młociny. Here, turnover increased by 25%, while footfall – by 20%.
“During this quarter, our net profit attributable to shareholders of the parent company amounted to PLN 11.5 million and was mainly the result of a hand over of nearly 300 apartments with a margin of 33% and the valuation of new Resi4Rent projects for which the demand is still strong. The value of our assets is close to PLN 6 billion and the company maintains a high level of cash – at the end of March 2023 it was PLN 778 million that is creating comfortable conditions for the future development,” comments Maciej Drozd, CFO of Echo Investment.
In March 2023, the Group announced the ESG Echo - Archicom 2030 strategy. It is a step-by-step road leading the Echo-Archicom Group to decarbonisation, zero-emission investments, further increasing the role of greenery in investments and supporting proper urban development. The companies also intend to provide their employees with equal development opportunities, maximize safety on construction sites and strengthen corporate governance.