CEE property developer and investor Orco Property Group is seeking to sell a number of projects after reporting losses widened to EUR 259 mln in the first nine months of 2009. In its third-quarter financial statement posted on Friday, the company said it is 'in the process' of disposing of a number of projects across CEE including Stein, a 88,000 m[sup]2[/sup] mixed-use development in Bratislava, Slovakia; Bubenska, a 26,500 m[sup]2[/sup] office and retail scheme in Prague's Holesovice district and the 37,000 m[sup]2[/sup] Cumberland Haus redevelopment in Berlin. The disposals are part of a major restructuring of the company's development portfolio, the company said.
CEE property developer and investor Orco Property Group is seeking to sell a number of projects after reporting losses widened to EUR 259 mln in the first nine months of 2009. In its third-quarter financial statement posted on Friday, the company said it is 'in the process' of disposing of a number of projects across CEE including Stein, a 88,000 m2 mixed-use development in Bratislava, Slovakia; Bubenska, a 26,500 m2 office and retail scheme in Prague's Holesovice district and the 37,000 m2 Cumberland Haus redevelopment in Berlin. The disposals are part of a major restructuring of the company's development portfolio, the company said.
Orco noted that it had failed to pay down EUR 13.3 mln of debt on its Stein project in Slovakia and is currently working with the bank to sell the asset. 'It is Orco's strategy to proceed with an orderly strategic asset disposal programme over 2009 and 2010, and benefit from the Procédure de Sauvegarde to avoid sale of assets at distressed prices,' the company added. Orco said its priority during the period has been to avoid breaches of loan covenants and to ensure smooth financing of the projects currently under development.
Net losses for the first nine months of 2009 rose almost tenfold to EUR 259 mln from EUR 26 mln in the same period a year before. The bulk of the losses were reported in the second quarter of the year (EUR 200 mln) with the third-quarter loss totalling just EUR 2 mln. Revenues for the period amounted to EUR 187 mln, a 17% decrease compared to the EUR 226 mln reported in the corresponding period a year before.
'I see this quarter as the inflexion point showing the result of our restructuring efforts,' said Jean-François Ott, CEO of Orco Property Group. 'Our improved operating performance led our company to be almost break-even this quarter. We have also advanced on our bond rescheduling plan which over the first years shall allow necessary investments for value creation and cash generation over the long term.'
During the third quarter the company made 'significant progress' on its commercial projects including Phase II of Palace Archa in downtown Prague which was delivered on time with an occupancy rate of 55%; the Sky Office, a 33,000 m2 class A office tower which opened in August with a 65% occupancy rate and the H2 Office, a 12,000 m2 office development in Duisburg, Germany scheduled for delivery by the end of 2009.
