JSE-listed Polish property company EPP successfully bought the first tranche of the M1 portfolio, comprising four properties in sought after regions, adding 194 000 m² in gross lettable area (GLA) and taking total income producing assets to over €2-billion in the quarter ended March 31.
The M1 transaction will be concluded in three tranches and will result in EPP owning 27 shopping malls with almost one million square metres of GLA across Poland by 2020. Tenant sales remained steady, with footfall across the company’s portfolio up 2.2%. The new M1 properties – M1 Czeladź, M1 Kraków, M1 Łódź and M1 Zabrze – performed solidly and key performance indicators remain strong, with further improvement expected following the opening of DIY retailer OBI in Kraków, Łódź and Zabrze in the next few months.
In line with EPP’s strategy to increase existing assets through extensions and refurbishments, the company advanced a number of refurbishment projects during the quarter. These include architectural designs for the upgrade of the food court area in Pasaż Grunwaldzki, as well as exploring extension possibilities at Twierdza Zamość. Construction of Galeria Młociny, EPP’s flagship Warsaw development, is ahead of schedule and on budget, with pre-letting at 75%.
In addition, the development is currently ahead of its budgeted rental income by more than €500 000 a year. Looking ahead, EPP will focus on integrating the recent acquisitions into the portfolio, exploring asset management opportunities in the portfolio and will continue to recycle its office assets. Distributable earnings increased by 48% to €23.7-million and increased 9% on a per share basis to €2.98 compared with the first quarter.
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