Echo Investment reported that concluded the final sale agreement concerning real property located at 46 Francuska St. along with a building situated thereon which is a part of A4 Business Park. Echo Polska Properties is a buyer. The company also purchased first two stages of the office complex last year.
As part of the transaction envisaged under the agreement, the seller and the buyer concluded a rental guarantee agreement. The basic provisions of this agreement envisage a guarantee provided by the seller to the buyer as regards the payment of rent fees and average operating costs for individual parts of the building which were not leased to third parties on the day of the signing of the agreement and parts of the building which were leased but in relation to which the rent was discounted or rent-free periods were introduced.
Furthermore, the seller and the buyer concluded an escrow account agreement, a fit-out works agreement under which the seller shall conduct fit-out works on the real property in favour of the buyer for an additional remuneration and a profit participation loan agreement regarding the repayment of the loan granted by EPP.
The ultimate sale price was EUR 27,5 million increased by VAT. Taking into consideration additional payments which the seller could obtain on the basis of the fit-out work agreement, the total value of the income involving the sale of the Real Property could increase to up the estimated amount of EUR 28,47 million (increased by VAT).
Echo Polska Properties (EPP) was created on base of Polish commercial projects built and held by Echo Investment, listed on Warsaw Stock Exchange (WSE) developer company controlled by consortium of Griffin Real Estate together with Oaktree and PIMCO funds. Apart from owning and managing former Echo Investment’s projects, EPP invests in Poland’s based commercial properties.
On 1 January 2016, a South African REIT headquartered in Johannesburg – Redefine Properties – acquired a 75% stake in EPP’s issued ordinary share capital, subsequently reducing its shareholding to just under 50% through the on-sale of EPP ordinary shares to a consortium of selected co-investors.