Redefine’s Polish Mall Owner Pegs JSE Value at 850 Million Euros

  • Echo Polska plans to start trading shares early next month
  • Rand’s rally against dollar creates gap to invest abroad: CEO

Echo Polska Properties, an owner of malls and offices in Poland, expects to be valued at 850 million euros ($949 million) when it starts trading on the Johannesburg Stock Exchange on Sept. 12, according to Chief Executive Officer Hadley Dean.

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

The company expects to benefit from the U.K.’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 percent 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 percent 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 U.S. pension funds are attracted to EPP because it’s negotiated 25 percent profit on some developments and may gain as much as an 8 percent yield on retail property rents, Dean said. Its six office buildings and 10 shopping centers were valued at 1.2 billion euros in June, he said.

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