WSE proving attractive to cash-hungry property companies
This week Echo Investment of Kielce becomes the first real estate developer to be traded on the WSE's main market. The company plans to move its shares from the parallel market on May 18.
Echo officials hope the move will increase the public's awareness of the firm and enable it to raise funds for its retail, apartment and hotel projects across Poland.
"Nothing against the banks, but they're very, very conservative. It would be impossible for us to fund all of our projects without a move (to the main exchange)," said Michal Kubicki, director of development at Echo, which has an estimated zl. 900 million ($257.14) million worth of commercial projects either planned or under construction.
Several other firms will be watching this move with a close eye. The largest commercial real estate developer and development adviser in the Krakow area, Super Krak, plans to go public on the WSE within the next two years, an official within that firm said last week.
Super Krak shares would be a hot commodity: The company's revenue from real estate operations jumped 1,000% last year, to zl. 21.2 million ($6.625 million). In addition to several ongoing projects, the firm has plans - and permits - to construct Business Centre Super Krak, a mixed-use development on the outskirts of Krakow that will contain a bank, two office buildings, a hotel and conference center.
"We are certainly looking at a public offering as part of our long-term strategy," said a high-level official with Super Krak, who did not want to be named.
Going public also appeals to John Kontrabecki, president and chief executive officer of TKG International, a California-based developer responsible for the Warsaw Distribution Center, a 10-building warehouse and distribution center on ulica Szyszkowa. Last month Kontrabecki signed a deal with Heitman Financial Ltd. to form the Central European Industrial Development Co. (CEIDCO), which plans to develop business parks throughout the region.
Though CEIDCO has already raised $75 million worth of equity and debt, the firm will need more capital to fulfill its goal of becoming the "largest developer of business parks in Central and Eastern Europe," Kontrabecki said.
"Going public is certainly one way of increasing our notoriety among investors."
He added that CEIDCO might go public after reaching its "critical goal" of building 100,000 square meters of warehouse and distribution space.
Going public on the WSE certainly didn't hurt Echo or the shareholders who invested in it. The firm's share price has soared to zl. 85 per share from its original price of zl. 5, when it went public on the WSE's parallel exchange in 1995.
Big banks and brawls
Brawling construction workers didn't prevent the Warsaw Financial Center (WFC) from announcing several major lease deals at the building's topping out ceremony last Thursday.
The Polish bureaus of the World Bank, International Monetary Fund (IMF), International Finance Corp. (IFC) and the European Bank for Reconstruction and Development (EBRD) have agreed to take space in the WFC when the building opens in November. With Bank Austria Creditanstalt already scheduled to take five floors, or 11,000 square meters, the 50,000 square-meter building is now more than 60% pre-let.
"We're very proud of these lease deals, especially since they fulfill our goal to turn this building into a true, financial center," said Maciej Raczkiewicz, president of Epstein Development, which developed the 33-story building along with Golub Europe. "We've developed strong relationships with some very significant financial institutions."
But that feeling of commercial goodwill didn't seem to rub off on the WFC construction workers who gathered at the celebration.
As Golub and Epstein officials announced their new deals on the eighth floor of the building - and praised their crew of 350 construction workers - two brawls broke out among workers gathered near the ground floor of the new office building.
According to witnesses, the fights involved about 20 construction workers who gathered for free beer - a tradition at topping out ceremonies. Workers were seen repeatedly kicking one drunken and bleeding construction worker until security officials stepped in. Another short brawl broke out several minutes later. In more pressing news, the WFC's leasing successes could spell trouble for the owners of the Intraco Building, a 37-story office building on ulica Stawki in Zoliborz. Three of WFC's future tenants - the IMF, World Bank and IFC - already lease space with Intraco. Intraco officials said they are unsure whether those tenants will remain once the WFC is complete.
So far only the World Bank, which rents a single floor in the Intraco building, has given notice, said Marek Dynarzewski, the building's commercial director. "Even if they leave, we're confident that we can win back more tenants. We're still charging lower rates," said Dynarzewski.
Echo officials hope the move will increase the public's awareness of the firm and enable it to raise funds for its retail, apartment and hotel projects across Poland.
"Nothing against the banks, but they're very, very conservative. It would be impossible for us to fund all of our projects without a move (to the main exchange)," said Michal Kubicki, director of development at Echo, which has an estimated zl. 900 million ($257.14) million worth of commercial projects either planned or under construction.
Several other firms will be watching this move with a close eye. The largest commercial real estate developer and development adviser in the Krakow area, Super Krak, plans to go public on the WSE within the next two years, an official within that firm said last week.
Super Krak shares would be a hot commodity: The company's revenue from real estate operations jumped 1,000% last year, to zl. 21.2 million ($6.625 million). In addition to several ongoing projects, the firm has plans - and permits - to construct Business Centre Super Krak, a mixed-use development on the outskirts of Krakow that will contain a bank, two office buildings, a hotel and conference center.
"We are certainly looking at a public offering as part of our long-term strategy," said a high-level official with Super Krak, who did not want to be named.
Going public also appeals to John Kontrabecki, president and chief executive officer of TKG International, a California-based developer responsible for the Warsaw Distribution Center, a 10-building warehouse and distribution center on ulica Szyszkowa. Last month Kontrabecki signed a deal with Heitman Financial Ltd. to form the Central European Industrial Development Co. (CEIDCO), which plans to develop business parks throughout the region.
Though CEIDCO has already raised $75 million worth of equity and debt, the firm will need more capital to fulfill its goal of becoming the "largest developer of business parks in Central and Eastern Europe," Kontrabecki said.
"Going public is certainly one way of increasing our notoriety among investors."
He added that CEIDCO might go public after reaching its "critical goal" of building 100,000 square meters of warehouse and distribution space.
Going public on the WSE certainly didn't hurt Echo or the shareholders who invested in it. The firm's share price has soared to zl. 85 per share from its original price of zl. 5, when it went public on the WSE's parallel exchange in 1995.
Big banks and brawls
Brawling construction workers didn't prevent the Warsaw Financial Center (WFC) from announcing several major lease deals at the building's topping out ceremony last Thursday.
The Polish bureaus of the World Bank, International Monetary Fund (IMF), International Finance Corp. (IFC) and the European Bank for Reconstruction and Development (EBRD) have agreed to take space in the WFC when the building opens in November. With Bank Austria Creditanstalt already scheduled to take five floors, or 11,000 square meters, the 50,000 square-meter building is now more than 60% pre-let.
"We're very proud of these lease deals, especially since they fulfill our goal to turn this building into a true, financial center," said Maciej Raczkiewicz, president of Epstein Development, which developed the 33-story building along with Golub Europe. "We've developed strong relationships with some very significant financial institutions."
But that feeling of commercial goodwill didn't seem to rub off on the WFC construction workers who gathered at the celebration.
As Golub and Epstein officials announced their new deals on the eighth floor of the building - and praised their crew of 350 construction workers - two brawls broke out among workers gathered near the ground floor of the new office building.
According to witnesses, the fights involved about 20 construction workers who gathered for free beer - a tradition at topping out ceremonies. Workers were seen repeatedly kicking one drunken and bleeding construction worker until security officials stepped in. Another short brawl broke out several minutes later. In more pressing news, the WFC's leasing successes could spell trouble for the owners of the Intraco Building, a 37-story office building on ulica Stawki in Zoliborz. Three of WFC's future tenants - the IMF, World Bank and IFC - already lease space with Intraco. Intraco officials said they are unsure whether those tenants will remain once the WFC is complete.
So far only the World Bank, which rents a single floor in the Intraco building, has given notice, said Marek Dynarzewski, the building's commercial director. "Even if they leave, we're confident that we can win back more tenants. We're still charging lower rates," said Dynarzewski.
