Echo Polska Properties ends six-month period ahead of target
On Tuesday, JSE-listed Echo Polska Properties (EPP) released interim results for the six-month period ended June 2017 with distributions of 5.192 euro cents a share, 3.2% ahead of budget. During the period, EPP successfully concluded ¤262m in acquisitions boosting its portfolio to ¤1.7bn.
Net profit for the period totaled ¤39.6m with distributable income of ¤36.6m, ahead of the ¤35.5m target.
EPP’s retail-focused portfolio consists of 13 retail and nine office assets throughout Poland and two retail development sites in Warsaw. Vacancies for the period stood at 1.6% for the retail portfolio and 2.8% for offices.
CEO Hadley Dean said the results were helped by positive Polish macro-economic conditions, which are helping fuel a boom in the retail sector. "Poland has one of the lowest unemployment rates in Europe, annual GDP growth of 4%, and stable inflation, all of which have contributed to retail sales increasing 6% year on year by June."
With increased consumer spending power and an under-serviced market there remains room for growth in the Polish retail sector. "This is evidenced in our centres with demand for space from international retailers."
While the Polish retail sector is largely unaffected by e-commerce, EPP is adapting to changing shopper trends. "EPP malls have introduced gaming areas and ‘relax rooms’ and we have noticed that food is the new fashion, and fitness is the new food. We are adapting accordingly," Dean said.
"We continue to execute our investment strategy and both acquisitive and organic growth opportunities, underpinned by our active asset management, which leverages our platform with retail tenants to achieve economies of scale, ensure we remain on track for solid growth, " he said. "In addition, driven by solid economic fundamentals, Poland’s economic health is expected to continue being a key driver of ongoing retail growth."