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First REIT with Polish properties

Echo Investment SA and African REIT – Redefine – signed a sales agreement on 1st March this year. The contract concerns selling 75 per cent of shares by Echo Investment that belong to company controlling all commercial assets of Echo Investment (both office and commercial buildings).

Echo Investment SA and African REIT – Redefine – signed a sales agreement on 1st March this year. The contract concerns selling 75 per cent of shares by Echo Investment that belong to company controlling all commercial assets of Echo Investment (both office and commercial buildings). The concluded agreement will be in force after receiving a permission from European Commission for this transaction.

 

A formula of the partnership with the participation of Redefine and Echo Investment will be similar to REIT. At the beginning it will manage the assets with the value of 1.18 billion euro. According to the concluded contract, within three years the established company will have a chance to submit first offer concerning sales of office and commercial projects of Echo Investment which are under construction or which are currently being devised. In result, the value of their assets may increase up to more than 1.7 billion euro. However, it is not over. The company, which will be managed by Griffin Real Estate, will concentrate their activities on further extending of the portfolio by attractive commercial areas.

 

It is another global investor who decided to trust our company. After Oaktree and PIMCO, it is the third global fund which entrusted us the management of their Polish assets. This fact – in connection with a plan of further gaining capital on one or more renowned stock exchanges – give completely new investment possibilities which are now considered by us – Przemysław Krych, CEO of Griffin Real Estate, says.

 

We have been working on this transaction with Redefine for several months. During talks with our new partners we created a plan of further development of the company basing on newly gained capital. Our objective will be to create a dominant investment fund on the Polish market of office and commercial real estates. Redefine is a good partner for this undertaking, a one with long-term investment horizon and strong pro-increase approach – Maciej Dyjas, co-CEO of Griffin Real Estate, adds.

 

The Management Board in Echo Investment also points out that the cooperation with the new investor provides the company with new possibilities of development and expansion. Firstly, we received a satisfactory appraisal for 75 per cent of our commercial portfolio. Secondly, the company with the participation of Redefine has a big growth potential of value. Finally, the gaining of such partner as Redefine as well as potential purchaser of our next structure in terms of the so called law to submit the first offer allows us to concentrate more on designing and building of new commercial structures. We will also extend, rent and manage common assets. Therefore, we believe that the relation with our new partner will be long-term – Piotr Gromniak, Chairman of the Board of Echo Investment SA, says.

 

We are planning to be a long-term investor in the Polish fund. We notice a huge potential to further growth and we are convinced about good cooperation with our partners, i.e. Echo and Griffin – Marc Wainer, Executive Chairman of Redefine, says.
 

During the transaction process Echo Investment was advised by JLL and UBS bank – responsible for transaction consultancy, Weil, Gotshal & Manges – responsible for legal consultancy, EY – responsible for tax consultancy, as well as Linklaters, Gleed, Hill and WSP – responsible for vendor due diligence. Moreover, CBRE did the appraisal of assets owned by Echo Investment for the purpose of the transaction.

 

Redefine Properties Limited is an African REIT, which is also a part of the TOP 40 index of the stock exchange in Johannesburg. This entity manages assets with the value amounting to about 4 billion euro. The company has office, commercial and industrial real assets in their portfolio. Except for the Republic of South Africa, the company operates on the Australian market where it is i.a. a significant shareholder of Cromwell Property Group recorded on the Australian stock exchange.

 


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