Orco makes a splash in CEE

Orco Property Group has announced net profits of E96.7 (zł.366) million worldwide in 2006, of which the group's real-estate operations in Poland comprised R16.4 (zł.62.1) million. This was a 77-percent increase in profits over the previous year, and Orco aims to continue its bullish strategy of acquisition and development on all real-estate markets, focusing on Poland and the CEE region.

The group's Polish activities accounted for close to 17 percent of the company's net profits, while its activity in the Czech Republic, Orco's biggest market, accounted for close to half. The company is currently stepping up its activity in Russia, with its second property acquisition in the country - a logistics center outside Moscow and adjacent land - in a deal worth E85 (zł.322) million.

Orco's current investments are mainly based in Warsaw, including several residential developments throughout the city. The exclusive Mokotowska 59 development in the city center and Daniel Libeskind's Złota 44 are the company's flagship investments. Orco has reported that 70 percent of apartments in Złota 44 are already sold. Last week, about 60 apartments were sold overnight at a special event held by Orco, however, the building won't be completed for another three years.

Orco's management expects the steady increase in real-estate prices in the CEE region will contribute to even greater profits in 2007. In terms of commercial activity in 2007, Orco will complete renovations on the Orco Tower, which it acquired last year. The company recently reported that 80 percent of the 14,400 sqm of available space has been leased, and it expects to reach full occupancy by summer. Orco's retail fund has also acquired Ożarów Business Center in a transaction with the property's bankruptcy trustee. Jones Lang LaSalle was the advisor on the acquisition of the 35,300 sqm distribution center 16 km outside of Warsaw.