Echo Investment announced on Friday that it will acquire a 66% stake in Wroclaw-based development company Archicom from its founders for an undisclosed amount.
The company has a total of 5,700 residential units, of which 3,800 in Wroclaw and Kraków.
Echo, which is listed on the Warsaw stock exchance and is majority owned by Hungarian property developer Wing, said that he acquisition is in line with its strategic goal of becoming a ‘nationwide leader in the residential sector’.
Once the transaction is finalized, the Echo-Archicom group will be the largest residential developer in Poland, it added.
‘Our group is becoming the largest developer building apartments for sale and rent in Poland. Only in 2021, we will start construction of 7,000 apartments and having a joint existing landbank exceeding 15,000 apartments for sale to be able to start projects in the coming years,’ said CEO Nicklas Lindberg. ‘In this transaction, we see many synergies, development opportunities and exchange of know-how. The strong brand of Archicom gives our group a leading position in an extremely attractive market, such as Wroclaw. We fundamentally believe in the potential of the Polish residential market, which is more resistant to cyclical fluctuations and less capital-intensive. It is worth emphasizing that we intend to keep our business diversified. We will remain active in the commercial sector, maintaining our position amongst top 3 office developers.’
‘The transaction is the result of long-term analyses of strategic options review, which shows that joining forces with the nationwide developer Echo Investment is the optimal scenario for Archicom,’ commented Tomasz Slezak, Archicom’s board member.
Archicom has been operating mainly on the Lower Silesian market since 1986, and since 2016 it has been listed on the Warsaw Stock Exchange. It grew out of a family design office with 160 completed investments, including the revitalized Browary Wroclawskie complex and the multi-award-winning Olimpia Port estate.
Together, Echo Investment and Archicom have around 4,000 apartments under construction and over 15,000 in the land bank to be implemented in the next 3-5 years.
‘The Polish residential market is consolidating, large entities are considered more reliable and stable. Moreover, it is much easier for strong companies with ample financial resources to negotiate with suppliers and to successfully compete for large plots of land on which whole city quarters can be built. Acquisition of Archicom
contributes in a major way to building shareholder value through exceptional growth of Echo residential business,’ noted Maciej Drozd, CFO of Echo Investment.
JLL, EY, Dentons and cmT advised Echo Investment on this transaction.
