Orco informed on Friday about acquisition of Polish warehouse and distribution centre called Ozarow Business Centre (OBC) for its Endurance Fund. The property provides 35,300 sqm of letable space and is located 15 km to the west of central Warsaw on main transport routes. The acquisition price has not been disclosed.
We see the acquisition positively based on its good location. Logistic’s rents in Warsaw were in the range of EUR 4.5-5.0/sqm/month in 2006 and yields close to 7%. However Orco
holds only c10% in the Endurance Fund, thus the upside for Orco
is rather small. This acquisition is in line with bringing the value of the portfolio to targeted value of EUR 500m, which should secure stable stream of cash flow for Orco
as it charges 2.0% management fee. Overall we see the news as neutral for today’s trading.