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Introduction & Market Context
Echo Investment SA (WSE:ECH) presented its H1 2025 results on September 18, highlighting a strategic shift toward asset sales and residential development amid evolving market conditions in Poland. The company is executing a dual strategy of divesting commercial properties while expanding its residential portfolio, with plans to reduce corporate debt and reinvest in growth opportunities.
The Polish real estate market showed mixed signals in H1 2025, with €1.7 billion in total investment volume across 63 transactions. The investment landscape featured growing interest in the Private Rental Sector (PRS) with six transactions completed, while local investors increased their market share to 14%.
As shown in the following investment market overview for Poland in 2025:
Strategic Initiatives
Echo Investment’s strategic focus centers on three key areas: commercial asset sales, residential development growth, and financial restructuring. In the commercial sector, the company is selling office and retail assets while focusing on new office projects in Warsaw’s Central Business District. For its living sector, Echo aims to grow apartment sales and handovers while developing new PRS projects and expanding its Student Space platform.
The company’s strategic direction is illustrated in this overview:
A cornerstone of this strategy is the preliminary sale agreement for 18 Resi4Rent projects comprising 5,322 units to TAG Immobilien Group for PLN 2.405 billion (EUR 565 million), implying a 6.3% yield on net operating income. The transaction, signed in Q3 2025 with closing expected in Q4, applies only to completed and operating projects.
The details of this significant transaction are shown here:
Echo Investment also completed the sale of CITI 2 by Archicom for EUR 31 million in H1 2025. The fully leased building hosts tenants including Bank Millennium, Orange, NFZ, Asseco, and CitySpace, and has achieved WELL Health-Safety Rating and LEED O+M Platinum certifications.
Additionally, the company sold its 30% stake in Towarowa 22 Office House to AFI Europe in Q3 2025, with the building valued at EUR 160.5 million for the share price calculation. The 32,500 sqm office building is 90% leased to tenants including Emagine, Crowe Advartis Accounting, and Damco.
Financial Performance
Echo Investment reported mixed financial results for H1 2025, with revenue of PLN 464.9 million, down from PLN 489.0 million in H1 2024. More concerning was the operating profit, which turned negative at PLN -121.1 million compared to a positive PLN 24.2 million in the same period last year. The company attributes this decline to fair value adjustments resulting from asset divestments aligned with its strategic shift.
The detailed financial performance is presented in this comparison with analyst consensus:
Despite the overall financial challenges, Echo Investment maintains that its underlying business remains strong. The company’s balance sheet shows stability with fully leased assets ready for disposal and growing residential inventory financed by client prepayments due to strong sales.
Echo Group is focused on reducing debt through commercial asset sales, with plans to reinvest remaining proceeds into future business growth and dividend payments. The company has targeted several fully leased assets for sale in 2025/2026, including City II, Towarowa 22 B, Brain Park C, Libero, and Brain Park A+B, which are expected to generate approximately PLN 0.8 billion in free cash.
Residential Segment Performance
The residential segment has emerged as a bright spot for Echo Investment, with 632 apartments sold in Q2 2025, representing a 34% year-over-year increase. For the first half of 2025, the company sold 1,162 apartments, a 32% increase compared to H1 2024. Echo Group’s sales target for 2025 is more than 3,000 units, approximately 36% higher than 2024 results.
The company’s quarterly residential sales performance by city is illustrated here:
Echo Investment handed over 380 apartments in Q2 2025, with the majority concentrated in Wrocław and Łódź. The company expects a significant increase in handovers during H2 2025, with 1,260 units planned for Q3 and Q4, and a total of 2,400 units for the remainder of the period.
The company maintains a strong landbank of more than 12,600 units, with almost 3,000 units in offer and 800 in pre-sale. Echo Group is active in six major Polish markets, with projects under construction and land secured in Warsaw, Wrocław, Kraków, Łódź, Poznań, and Tricity.
PRS and Student Housing Growth
Echo Investment’s Resi4Rent platform has achieved 98% occupancy across its portfolio. Following the sale of 18 projects to TAG Immobilien, the company plans to continue developing new PRS projects while withdrawing capital from mature assets through disposals and refinancing.
The company is also expanding its Student Space platform, with 1,200 beds to be delivered in Q3 2025 and plans to develop at least 5,000 beds within the next 3-5 years. Construction of three projects in Kraków is nearly complete, with fit-out works in progress, while development of a 500-bed project in Warsaw started in Q2 2025 with completion expected in Q3 2026.
The growth of the Student Space platform is shown here:
Forward-Looking Statements
Echo Investment has outlined several assets targeted for sale in 2025/2026, including fully leased commercial properties. The company plans to use the proceeds to reduce corporate debt, invest in new projects, and pay dividends to shareholders.
The company is also moving forward with the Towarowa 22 destination project in Warsaw, with construction of a new office tower (53,200 sqm) and residential tower (14,300 sqm) scheduled to begin in September 2025. This mixed-use development represents Echo’s continued commitment to high-quality urban projects despite its broader strategy of commercial asset divestment.
Echo Investment’s share price closed at PLN 5.54 on September 18, 2025, up 0.72% for the day. The stock has traded between PLN 4.08 and PLN 5.98 over the past 52 weeks, suggesting investors are cautiously optimistic about the company’s strategic repositioning despite the current profitability challenges.
Full presentation:
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