I2 projects to speed up thanks to flotation
ResidentialThe new funds are to be used to accelerate its launched and planned projects as well as to finance the companies of the group. The flotation is to take place in mid-April, following the approval of the company’s prospectus by the Financial Supervision Authority on March 30th. The company will offer 2 mln new shares constituting 20 pct of its increased share capital – the majority addressed to institutional investors. “10 pct will be earmarked for individual investors,” reveals Marcin Misztal, the vice-president of I2 Development. Today (April 11th) the price range of the shares is to be published. The funds from the issue will mostly be invested in payments for land and own contributions for investment loans. “We want to use the funds from the issue to finance the Bulwar Staromiejski and Ogrody Jordanowskie II projects, in which we want to make additional payments for the land, as well as the Księcia Witolda, Piękna 58 and Legnicka projects, where we already have building permits,” said the vice-president of the company.
The total cost of the projects amounts to just under PLN 300 mln, while the additional financing for each will amount to app. PLN 10 mln. The funds raised will also be used for the financial support of KPB, a general contractor within the group which currently has eight contracts worth PLN 177.5 mln. The additional financing will go into projects that are under construction and at an advanced stage, thus minimising the risk due to them. “We want to make them more independent,” explains Marcin Misztal. The developer’s strategy involves residential projects that take from two to five years and include up to 1,000 housing units. “This will enable the company to sell faster and obtain a faster return on the invested equity,” told us Marcin Misztal claims. “We prefer to engage in two or three projects at the same time rather than to focus on one very large one,” adds the vice-president.
The company also plans to buy plots on an ongoing basis with existing concepts in place – it will not be building up its land bank without an actual plan. “These are mostly plots in city centres, often with buildings listed as historic monuments,” added the board member at I2. This year the company is to put on sale app. 1,250 apartments with a useable and residential area of 52,800 sqm. Its current offer includes 440 apartments.
So far the company has only been operating in Wrocław. “We are also analysing other markets, but we are staying in Wrocław for now. The development market is a very local business,” Marcin Misztal explains. One of these projects in the city is Księcia Witolda, across the canal from Bulwar Staromiejski in the Old Town. “There is currently a historic granary on the site and we will develop two new buildings. These will contain app. 200 apartments as well as services and offices in the granary. We are close to completing negotiations concerned with the interior design of the granary, which will have an area of 5,000 sqm,” explains the vice-president of the company.
I2 Development was founded in 2012 and 75 pct of its projects are residential with the remainder including offices and business premises. In 2015 the company sold 420 units. It currently has more than 20 projects under construction or preparation and on its present land bank can develop over 1,600 apartments and a commercial area of app. 30,000 sqm over the next two years. I2 is currently carrying out the Bulwar Staromiejski project in the centre of Wrocław on a plot that includes former hospital buildings. The project involves the construction of a complex of 14 separate buildings with apartments and offices as well as services, while the comprehensive development of the area and the construction of underground car parks is also planned. Investment costs will come to PLN 120 mln. A residential area of app. 20,000 sqm and almost 9,000 sqm of service and office space is to be created. “The average price per sqm of the apartments will be in the range of PLN 11,000–12,000,” reveals Marcin Misztal.
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