Polish property owner EPP released third quarter results for the nine months ended September 2018 indicating net property income is up 37% year on year to €102.2 million.
The JSE-listed company said earnings available for distribution per share were at €8.75 cents, and the company is on track to meet its stated guidance of €11.6-11.8 cents per share.
Hadley Dean, CEO of EPP, said: “Operationally the business continues to perform well with like-for-like net rental income (NRI) growth for the nine months of 4.2%”.
EPP CFO Jacek Baginski added: “We are pleased with the results and expect to deliver strong returns to our shareholders for the full year.”
EPP’s net asset value for the period was €990.8 million, equalling NAV per share of €1.33, and up from a NAV of €1.20 in the comparable quarter in 2017.
The company completed the acquisition of the Marcelin shopping centre in Poznan during the quarter, and together with the completion of the first tranche of M1, this added 240 000 sq m of high-quality retail space during the first nine months of the year. Total investment properties in EPP’s portfolio now exceed €2 billion in value.
During the quarter, Poland became the 25th country in the world to be awarded developed economy status by FTSE Russell. This puts the country on equal footing with the United States, the UK, Japan and Germany.
Dean said: “The results show that the company’s retail-focused strategy is paying off as Polish consumers become more affluent. All the statistics indicate that the Polish population is becoming wealthier throughout the country. With low unemployment and the country’s fundamentals strong, we don’t expect this to change in the near future. As the leading owner of shopping centres in Poland we are well positioned to capitalise on the increased spending by Polish consumers.”
RPA Perspective FTSE Russell also added EPP to its FTSE EPRA Nareit Global Emerging Market Index. EPP, although it is a purely Polish company, has been included on the FTSE EPRA Nareit Emerging Index because it is traded on the JSE in South Africa which FTSE Russell still considers an emerging market.
“The addition of EPP to the trading index is recognition that the company has become a key player in the European property landscape,” Baginski said.
EPP is the largest owner of retail real estate in Poland. It operates like a REIT, with a current portfolio of 19 retail properties, six office buildings and two development sites in Warsaw, with one currently under construction, offering a total of over 835,000 sq m in Poland’s 20 biggest cities.
Separately, a joint venture between the Meyer BergmanFund, Meyer Bergman European Retail Partners I and the Healthcare of Ontario Pension Plan (HOOPP has sold Nova Karolina shopping centre in Ostrava in the Czech Republic to the country’s largest mutual fund, S nemovitostní, managed by REICO. The purchase price was not disclosed.
Nova Karolina has over 58,000 sq m GLA and is the dominant regional shopping centre in Ostrava, the Czech Republic’s third largest city, with a catchment area of 1.2 million people. The centre comprises of 277 retail units . The centre also benefits from excellent urban transport links and its close proximity to the local tram network and bus station.
Since the opening of the shopping centre six years ago, the headline results of the asset management programme have included a 73% growth in annual sales and an 87% rise in the number of visitors.
Mark Gamble, Head of Asset Management at Meyer Bergman, said: “The Meyer Bergman and HOOPP joint venture acquired the Nova Karolina new development just prior to its opening in 2012 and we have successfully established it as the dominant regional shopping centre since. On every key metric of investment value from turnover to footfall, management of leases and the introduction of new tenants and brands, we have achieved significant year-on-year growth and quality improvement in the asset.”
