Redefine’s Polish Mall owner pegs JSE value at $949m

Johannesburg - Echo Polska Properties, an owner of malls and offices in Poland, expects to be valued at €850m ($949m) when it starts trading on the Johannesburg Stock Exchange on September 12, according to chief executive officer Hadley Dean.

Echo, which is 49.9% owned by JSE-listed Redefine Properties Ltd, plans to use about €100m to make four acquisitions and contribute 70% to the development of a Warsaw mall, Dean told reporters in Johannesburg. Polish retail sales rose 6.5% in June from a year earlier after the nation’s government began funding families €120 a month for every child after their first.

The company expects to benefit from the UK’s vote to leave the European Union as retail property investors seek higher returns and bank support services chase lower rents, Dean said. Polish officials forecast that country’s economy will expand by 3.8% this year, second only to Ireland in Bloomberg consensus forecasts. Echo can also benefit from investing abroad after the rand gained against the dollar, rallying 16% this year.

“It’s a compelling time to invest using the strength of the rand” to gain a stock paying a high dividend, Dean said. “Two banks that I can’t name began talks for moving their back office operations in Warsaw the day after Brexit.”

European and US pension funds are attracted to EPP because it’s negotiated 25% profit on some developments and may gain as much as an 8% yield on retail property rents, Dean said. Its six office buildings and 10 shopping centers were valued at €1.2bn in June, he said.

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