EuroBusinessMedia (EBM): Orco Property Group, a leading investor, developer and asset manager in the Central European real estate market, reports its annual revenue and earnings for 2010. Jean-François Ott, welcome. You are the CEO of Orco Property Group. Your revenues in 2010 reached a record high. How do you explain it?
Jean-François Ott (JFO): Well, 2010 was definitely a decent year, a year of resilience in all our markets and in all our segments. We are reaching €315 million of turnover, mainly in €200 millions of developments and €100 m of rental incomes. But on top of that we also have done more than €200 million of disposals. Those numbers have allowed us to reduce our debt significantly, by €364 million, so it was also a year of deleverage for the group and as such, as we are leasing during 2010 more than 200,000 m² in all our markets, we have managed to raise the net asset value per share from 8 euros to 28 euros.
EBM: Your new strategy for the Group seems to be the expression of your own personal vision. What is that vision?
JFO: You know for the last 20 years - Orco turned 20 in 2011 by the way - we are client focused. We build apartments for people to live in. We build and own office space or commercial space for people to work in, for people to go shopping to, and we build hotels for people to stay in, obviously. So we are client focused and our vision, throughout the group - I would say the entire management shares the same opinion as me - is to be focused on the satisfaction of those people and give them good value for money. We also have, as we are working through these new times and new changes, we have another vision; it’s the one that people are moving to big cities. They are leaving small villages or smaller towns and capital cities such as Berlin, Prague and Budapest or Warsaw are getting bigger and bigger and as such, the value of real estate goes up. So fundamentally our land bank, and the land bank that we have financed throughout the crisis for the last two or three years at an expensive price, this land bank today is our springboard for success. And fundamentally, how are we going to do this? We are going to do this with the union of us and our partners; our partners, our clients, our banks and our employees.
EBM: More specifically, how are you currently implementing this strategic vision for the company?
JFO: We are implementing our strategic vision with three pillars. It’s very simple. We have the residential and commercial business on one hand, the rental properties on the other hand and the hospitality. With those three pillars today, we are set to grow and grab all the opportunities we have with our own land bank. We have a land bank that we have been financing for the last three years at an expensive cost, but this land bank is our springboard for the future. Because you know a land bank without permitting is worth nothing. What we have been working on during the crisis is obtaining permits to be set to grow and build quality homes or quality offices for our clients and that’s what we are going to do with my teams in every city where we are active today.
EBM: Regarding the Outlook now, what are your convictions for 2011 and the future of Orco?
JFO: You know, for the last 20 years I’ve been mainly an investor and fundamentally an investor of properties in prime locations. I believe in this. I believe in this focus. I believe Orco, with its very specific focus on Berlin and Warsaw and Prague and Budapest, for example, is set to grab some value, not only because those real estate markets will do better, but also because the properties are better. Equally, you have to notice that Orco is involved in two of the most sexy markets, if I could say that, for the investors for the moment, namely Germany and Poland. Those two markets are today the most attractive for investors from around the world and it just happens that Orco is the largest private property owner in Berlin, with almost 1 million square meters and that we are building right now the highest high rise residential building in Europe, in Warsaw, with Zlota44. So I do have the conviction that we will grab value for shareholders, but also that we will deliver for our clients good value for money and there I want to encourage all our colleagues, all our associates to continue their efforts for that single goal.
EBM: Jean-François Ott, CEO of Orco Property Group, thank you very much.
JFO: Thank you.
