Resi developers doing well

POLAND The major residential developers active in Poland generally registered healthy sales results in H1 2015, when most of them enjoyed increased apartment sales.

Better margin, ambitious plans

In the first half of the year, Dom Development found buyers for 1,065 residential units, with 467 being sold in Q1 and 598 in Q2. This represents a growth of 20 pct on the same period in 2014. “The March reduction in the interest rate to the historically low level of 1.5 pct has given an additional boost to the residential market. The low cost of money means buyers have a higher debt carrying capacity on the one hand and on the other hand is encouraging people to move their savings from deposits with low interest rates into real estate investment. The low rates are affecting both these groups in a similar way, thanks to the proportion of ‘cash’ and ‘mortgage’ shopping being maintained at a level of app. 30:70, along with a simultaneous considerable growth in the transaction volume,” explains Jarosław Szanajca, the president of Dom Development, in his summary of the results.

In H1 2015, Atal development sold 806 apartments, 236 more than in H1 2014 and 314 more than in 2013, which was the record year for the company with 492 apartments sold in H1. Most of the contracts were signed in Kraków – 326, followed by Wrocław (204 apartments), Warsaw (115), Łódź (103) and Katowice (58). In the last six months the Warsaw-listed developer’s offer was enlarged by new eight projects, which will include a total of 1,242 apartments and 65 retail and services units.

J.W. Construction Holding closed H1 with 723 apartments sold. This constitutes a growth of 46 pct compared to the same period a year earlier, when the company sold 496 apartments. In Q2 alone the company had sales of 352 apartments compared to 248 apartments sold in the second quarter last year. The group’s revenue in H1 amounted to PLN 127.5 mln, its operating profit was PLN 14.3 mln and its net profit was PLN 5.1 mln with a gross sales margin of 23 pct. “We are continuing the process of utilising of our large land bank to construct over 4,700 apartments. We have just started the construction of the third stage of Bliska Wola in Warsaw and have obtained a building permit for the Zielona Dolina II estate. Thanks to these projects and others carried out by the company, we have the chance for some very good annual sales and financial results in the near future,” declared Małgorzata Szwarc-Sroka, a member of the supervisory board of J.W. Construction Holding, who supervises its economic division and the investor relations office of the group. In H1 the company carried out seven residential projects with a total of 1,683 apartments as well as detached houses; it also intensified its operations on the hotel market and continued work on the renovation of the Stara Dana hotel in Szczecin.

In H1 2015 Polnord sold a total of 833 apartments, a significant increase compared to H1 2014 when the developer sold 625 apartments. The vast majority of the contracted apartments include those developed in Warsaw and TriCity projects. In Q2 2015 the company saw healthy sales as it signed a net amount of 487 contracts. In Q2 2014 the number came to 318. “As we have announced, we plan on contracting app. 1,500 apartments over the entire 2015,” said Piotr Wesołowski, the president of Polnord.

Increasing sales

Vantage Development signed off more than 200 apartment sales contracts in H1 2015 – the best result in the history of the company. Its sales over the first six months of 2015 were more than twice as high as in the same period of 2014 (202 vs. 97). This was despite selling 45 apartments and one house in H1 compared to over 100 apartments and one house in the first half of 2014. But the improved figure was due to the developer’s newly completed projects this year and the resulting increase in revenue from the lease of office and retail space by over 60 pct (to almost PLN 6 mln). In total, the consolidated revenue of Vantage Development in the January to June 2015 period amounted to PLN 20.5 mln compared to PLN 28.3 mln a year earlier. The group’s operating profit came to almost PLN 1 mln and H1 closed with a consolidated loss of PLN 1.6 mln.

Inpro, which develops residential projects in and around the TriCity, saw its revenue increase by almost 18 pct y-o-y to PLN 79.9 mln in the first half of the year. Its gross profit amounted to PLN 20.7 mln – 55 pct more than the same period of 2014. The group generated a net profit of 
PLN 7.8 mln in H1, compared to PLN 1.9 mln a year earlier. “The improvement in our results is due to the progress of projects under construction and the reasonable unit price per sqm,” explained representatives of the company. In H1 Inpro handed over a total of 198 apartments to their new owners, representing a growth of 25 pct y-o-y. Over the first six months of 2015 the company also saw improved net presales, signing 237 preliminary contracts net – 10 pct more than in H1 2014.

Robyg signed 1,131 sale agreements (including withdrawals) in H1 2015. This represents a growth of 7 pct compared to the same period in 2014, with the apartments sold being located in Warsaw and Gdańsk. The management board of the group is planning to maintain the trend in H2, provided the market conditions are favourable, and sell app. 2,200 net apartments over the entire year. In Q2 2015 alone the company sold a net amount of 597 apartments (including withdrawals) – a 24 pct improvement on Q2 2014, when 480 units were sold. In 2014 the group secured contracts for 2,118 apartments, 1,056 of which were in H1.