Orco Property Group to sell luxury residential skyscraper Z≥ota 44
March 31, 2014
Real estate developer Orco Property Group intends to sell its central-Warsaw luxury residential project Zlota 44, designed by famous architect Daniel Libeskind, in the coming months as part of the restructuring of its Central European portfolio, the firm said on Friday.
"The luxury residential project Zlota 44 was exposed as a major financial failure for the Group in the fall of 2013," Orco said citing lack of bank financing, termination of the general contractor and unsuccessful sales re-launch on the local Warsaw residential market.
"Therefore, late in 2013 the Board of Directors decided to terminate this strategy, suspend the works and later to sell the entire project as is and not to complete the development."
Orco granted a short term option to OTT Properties (related entity to the former management) to acquire the project and believes that "no new losses would be generated for the Group in case of exercise of that short term option."
Over 2013 Orco recorded a total of EUR 252 million provisions, impairments and valuation adjustments, with the impairment on the Zlota 44 representing "more than half of that amount."