Blue-chip debut

Last week developer Polnord joined the Warsaw Stock Exchange's WIG20 blue-chip index. The market reacted positively to the news, pushing the company's stock up 1.52 percent on the following day's trade.

"Polnord's entry to the WIG20 will give it greater exposure in the world market, particularly with regard to international investment funds which focus on high-ranking firms in top indices," remarked Kacper Żak, an analyst with brokerage DI BRE. "What is most important, however, is that the precise details of the company's land bank and development plans are now known," he added.

The company holds the largest land bank of any developer on the market, totalling over 1.3 million sqm. The majority of Polnord's interests are residential developments located in a dozen cities across Poland, as well as Russia, Ukraine and Romania. Its biggest investment is a zł.1-billion residential development outside of Poznań.

Polnord enjoys a 50-percent profit margin on most of its residential investments, according to its current projections. Its net profit for H1 2007 reached zł.85.6 million and according to Polnord's president, Wojciech Ciurzyński, it expects to earn between zł.100-120 million in net profit by the end of the year. Polnord has also initiated an agreement for the creation of a Polish-Chinese construction consortium to handle work in preparation for the Euro 2012 games.

"The most interesting bit of information is to come - namely, the details of the company involved in Polnord's takeover bid," said Żak. While little is known about the potential deal, Polnord is expected to acquire a competitor with an international presence, increasing its own land bank by another third and confirming its position among developers active on the global market.