Holding onto to the number one spot

Jumping onto the podium

In 2011 the company hit a rather cautious note, forecasting the sale of 1,000 apartments – and just about managed to do this. However, the appetite of Oscar Kazanelson, the president of Robyg’s supervisory board, was far from satisfied. The subsequent purchases of new plots and putting new projects onto the market resulted in the sale of more than 1,700 apartments in 2013 – and in 2014 it expects to sell over 2,000 apartments. And the developer looks likely to succeed. In the first three quarters of 2014, the company considerably exceeded the level of 1,500 pre-sold apartments, which considering that over 500 apartments have been sold per quarter, indicates that doubling the number of contracts signed within three years now seems likely to happen.

Bigger land bank

Thus it should come as no surprise that the stock-exchange listed developer has had no problems with subsequent bond issues, with stock-exchange analysts eager to recommend buying the company’s shares. Investors expect that the group’s winning streak will continue and that it will not abandon its growth path. “The Robyg group is planning to reach and maintain pre-sales at a level of 2,000–2,500 apartments per year. The company is already selling most of its apartments on the Polish market and is planning to remain the number one residential developer in the future,” Oscar Kazanelson has declared.
But to maintain such rapid growth, the company needs new land. In November 2013, Robyg drew up its investment plan for 2014–2016, which earmarked app. 150 mln for the purchase of real estate for new projects. Since that time it has managed to buy two plots in Warsaw. One of the purchased sites is located in Żoliborz district. The Modern Żoliborz Residence project is planned on land acquired for PLN 8.9 mln. This will comprise app. 140 apartments in two buildings. The estate will be located at ul. Przasnyska 6, near the developer’s first project in the district – City Apartments. Construction work is scheduled to begin in
Q1 2015. Another, much larger parcel has been purchased by the company in Warsaw’s Mokotów district. For PLN 68.5 mln the company has acquired an 8.5 ha plot from Landia Investments. It will be carrying out the project out together with NCRE II Investments Limited, which has contributed PLN 40 mln to the enterprise. Around 1,000 apartments and a commercial area of 6,000 sqm are to be developed. Robyg is also planning to build 500 apartments on a plot it is buying in Gdańsk. At the beginning of November, the company signed a preliminary agreement for the purchase of a 2 ha site in the Piecki-Migowo district (known locally as Morena). The total net price for the property exceeds PLN 13 mln. This will be the developer’s fourth project in Gdańsk.

Setting their sights

This is certainly not the end of Robyg’s purchases. There is still app. PLN 100 mln in the kitty and it is not out of the question that the amount will be increased. At the end of October the company raised PLN 60 mln from the issue of ‘L’ series bonds, the redemption date of which falls in autumn 2018. The company announced that this would enable it to flexibly adjust the financing structure to the current market situation and make it possible to continue its strategy of replenishing its land bank. Oscar Kazanelson has made it clear, however, that the decision on what the funds raised from the last issue will be spent on has yet to be made, but the group is looking to acquire land in Warsaw, including on the right bank of the Vistula river, and in Gdańsk. The company is interested in plots where it is possible to carry out projects for 500–1,000 apartments,” says Oscar Kazanelson. However, he does not want to disclose the precise location of the properties before the end of negotiations. The president of the company’s supervisory board has ruled out new investment in office buildings. “The office market is currently very competitive and is operating with a large oversupply of office space. The residential market has better prospects and Robyg has been successful on this market for many years. The firm is focusing on this market and this should not change in the near future,” insists Oscar Kazanelson, who goes on to add that in order to take a bigger slice of the residential cake for itself, the company has decided to introduce a new scheme for home buyers. Under the Smart House programme, the company will offer electronic control systems in all its projects, which include sensors, gauges and other devices for remotely programming and controlling electronic and electrical equipment in each of the apartments.