Prime returns

Orco Property Group has announced a 270-percent increase in revenues for its H1 performance this year over the same period of 2006. Revenues rose to E124.8 (zł.476.5) million, up from E33.7 (zł.128.6) million last year, primarily due to residential activity in the Czech Republic, Germany and Poland.

Orco sold 705 housing units in the Czech Republic between January and the end of June, compared with a mere 46 in Poland. However, Poland appears to be catching up with regard to pre-sale agreements, with 526 contracts signed this year in Poland and 667 in the Czech Republic. The company's latest project in Poland is a housing estate in Szczecin. Its most high-profile development is the Złota 44 apartment building in Warsaw.

Over the H1 period, Orco also saw a capital injection of E172 (zł.656.8) million. With a current market capitalization of E1.2 (zł.4.58) billion, the company is the fifth-largest company on the Budapest Stock Exchange and among the biggest on the Warsaw Stock Exchange. Jean-Franćois Ott, Orco's president, attributes the success of the company's strategy to "the dynamic increase in each segment of our activity: real-estate investment, residential development and asset management."

Orco's asset portfolio has been estimated at E2.15 (zł.8.2) billion. This figure is based on a revaluation by DTZ, which indicates an increase of E96.8 (zł.369.5) million in value. According to Kacper Żak, an analyst with the investment arm of BRE Bank, "Rising prices for sales and lease transactions in the booming economies where Orco invests have driven up the value of its property portfolio."

Żak noted, however, that these estimates are only paper assets, "but it's important to remember that revaluation of a certain property is based on an actual rise in leasing rates. He added, "Orco is consistently and aggressively investing in new projects."