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The Warsaw Voice » Business » December 16, 2009
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New Idea for Investors
December 16, 2009   
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Listed developer and builder Lokaty Budowlane, which was formed in a merger of the Fabryka Diet and Osiedle Poniatowskiego companies, has launched work on a hotel and conference center near Warsaw.

Lokaty Budowlane, which is listed on the Warsaw Stock Exchange's New Connect alternative market, also plans a new residential project in Warsaw's Włochy district.

Lokaty Budowlane is putting on the market an innovative business proposal that combines real estate investment with mortgage-secured ownership. The company has started building a hotel with catering facilities, two restaurants and a conference room on an attractive plot of land in the village of ¦więcice, 25 kilometers from downtown Warsaw, along national road no. 2 that runs from the western border town of ¦wiecko to Warsaw via Poznań, on the Polish section of the European E30 route.

The company is selling hotel rooms and suites in the building which it wants to manage but not own. The cheapest room is available at zl.250,000, while the suites are double the price.

The innovative aspect of the project is that after the hotel is completed and opened, the investor will collect rents at a guaranteed level of around zl.1,700 per month and until that time the annualized interest rate on the funds is 9 percent. This means that the investment will pay back in around 10 years.

"This is a very safe investment because it is based on land register entries," says Marek Kwiatkowski, CEO of Lokaty Budowlane. "The financial terms are almost twice as good as those offered by banks on time deposits."

More projects coming soon
Lokaty Budowlane is planning further projects. For example, the company owns a plot of land in the Włochy district on which it wants to construct a residential building. More projects are likely to follow, because Lokaty Budowlane wants to build a chain of hotel and conference centers that it will manage itself, while individual investors will own fully furnished hotel rooms.

Securities issue and WSE listing
Kwiatkowski says the next step in Lokaty Budowlane's development will be entering the main trading floor of the Warsaw Stock Exchange.

"Our business experience, reflected by many successful projects, is sufficient to allow us to declare our resolve to enter the main trading floor of the Warsaw Stock Exchange," Kwiatkowski said. "Our goal is to spend the next year or so drawing investors' attention to Lokaty Budowlane as a serious partner and enter the stock exchange."

Before this happens Lokaty Budowlane may issue securities, Kwiatkowski says. "Both share and bond issues are possible on the basis of the properties held by the company," Kwiatkowski said. "We are studying this option with individual investors in mind."

Elżbieta Wrzecionkowska
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