Echo Polska Properties N.V. and Echo Investment S.A. are pleased to announce the conclusion of a formal and binding agreement in terms of which they will purchase the 22 Towarowa Street property from Griffin Real Estate, Poland’s leading real estate fund on which retail development will be undertaken. In terms of the purchase agreement, EPP will acquire a 70% interest in a special purpose vehicle that owns the property, with Echo Investment acquiring the remaining 30%.
The Towarowa property consists of a number of plots acquired through five separate transactions. As a result, the property is the biggest commercial area located in the center of Warsaw, with a total area of about 6.5 ha and development capacity of over 100 000 m 2 gross lettable area.
Hadley Dean, EPP’s CEO said: “The property – because of its location and attractiveness – will be the perfect fit in EPP’s portfolio.” He added that it was probably the last site of this nature available in Warsaw and noted further that despite seemingly high retail space saturation in Warsaw, when compared to other cities, the average retail area per 1,000 inhabitants is still relatively small at 450 m 2 in Warsaw, compared to over 600 m 2 in Poznań or Wrocław. He also commented on Varsovians’ high purchasing power, being 80 % higher than the national average.
In terms of the purchase agreement, EPP will acquire a 70% interest in a special purpose vehicle that owns the property, with Echo Investment acquiring the remaining 30%. Echo Investment has also been appointed to develop the property, with EPP appointed to manage the property. The total purchase price payable for the property is up to EUR 120 million, EUR 5 million of which was paid as security upon signature of the purchase agreement. EUR 78 million (including EUR 5 million already paid) is payable upon the completion of the purchase of the property, with payment of an additional amount of up to EUR 42 million dependent on the timing of satisfaction of various conditions. EPP and Echo will each be liable for only their pro rata portion of the purchase price. The purchase agreement remains conditional upon receipt of consent from Poland’s anti-monopoly office, UOKiK.
“We are very happy to sell the property to Echo and EPP. This way we can be sure it will be in good hands,” said Piotr Fijołek, a partner at Griffin. “We had a lot of similar offers from other investors, but we decided to keep Towarowa in the family.”
Nicklas Lindberg, CEO, Echo Investment: “The Towarowa project fits perfectly with our strategy. Echo Investment is aiming to develop big projects which supplement local urban planning vision and also meet the expectation of habitants. There are plans to deliver around 1 million m 2 of offices in this area as well as the district of Wola which are the most active areas in terms of new residential developments. The Towarowa project will add new retail, entertainment and restaurant functions to this part of the city. The retail development on the property is expected to be one of Echo’s flagship projects, similar to Browary Warszawskie and equally unique.”
Additionally as announced on SENS earlier, EPP is very pleased to announce the conclusion of the preliminary purchase agreements as outlined in its pre-listing statement, between subsidiaries of EPP (as purchaser) and Echo Investment S.A. (as seller). “ROFO” Properties in the purchase agreement include four office projects: O3 Business Campus, A4 Business Park, Tryton Business House and Symetris Business Park. The completion of each purchase remains conditional upon the satisfaction of certain conditions precedent in respect of the relevant ROFO property within a period of three years.