Orco announced acquisition of 73,000 sqm plot in Szczecin, Poland to build 770 residential units. The project is expected to be realized in four phases, with first one to be finalized in 2009. Approximately 20,000 sqm within the area should be reserved for future retail and service outlets. The price hasn’t been disclosed.
This is the first expansion of Orco into Polish regional cities as historically they have been present only in Warsaw. Increasing disposable income of middle class in the regions and available mortgage financing drives demand for quality residentials. Although Polish house price inflation was over 30% in 2006, following 27% in 2005. We believe that regional cities lags one step behind Warsaw, thus the growth in prices is expected to increase also in 2007. Warsaw’s average price for residentials stand at approx. EUR 1,800/sqm, while the discount in residential cities is in average approx. 20%. We see this news positively, however we don’t expect the impact on today’s price as market will be awaiting 1Q07 figures due out today after Paris market close, which could be dissapointing.