Lokum Deweloper has no plans to launch new projects this year, CEO Bartosz Kuźniar said. According to the board, high financial costs today make it impossible to build apartments “for stock” when the pool of buyers is too narrow.
“The year 2022 was very difficult for potential apartment buyers. High interest rates and strict creditworthiness screening criteria prevented most of them from obtaining mortgages. Today, apartments are only available to those with cash or very high incomes. Unsurprisingly, apartment sales have fallen sharply. In our case, it was down as much as 42% year-on-year. In 2022, we launched the construction of less than 150 units, compared to nearly 1,000 units in 2021. We open the new year with a still relatively attractive offer for customers. Half of it consists of completed apartments, and the other half of it consists of those we will complete within 2-3 quarters. Naturally, it will become more modest with each passing month. Despite having a rich land bank and several building permits, we do not plan to launch new investments this year,” Kuźniar said..
“High financial costs today make it impossible to build apartments ‘in stock’ when the pool of buyers is too narrow, while development costs exceed the prices of apartments expected by customers. We hope that with the drop in inflation and interest rates, the financial situation of customers will improve enough for them to be able to obtain loans sufficient to purchase apartments, which will enable new investments to take off,” the CEO explained.
Earlier today, the developer reported that last year it concluded 435 development and preliminary contracts, recording a 42% year-on-year drop in sales. Over the past year, the developer handed over 727 units to customers (+28% y/y).
In Q4 2022 alone. Lokum Deweloper Group contracted 155 units: 82 in Krakow and 73 in Wroclaw, 30% less than in the same period a year earlier. In addition, as of the end of the year, there were 25 units under reservation agreements (-58% y/y). From October to December 2022, the developer issued keys to 453 units (+138% y/y). Most of these were from the Lokum Porto and Lokum Verde developments in Wroclaw, as well as phase IIIa of the Lokum Vista project in Krakow.
In 2022, the group was expanding its offerings with the next phases of the Lokum Porto and Lokum Verde developments in Wroclaw, and Lokum Vista and Lokum Salsa in Krakow. At the end of 2022, the developer had a total of 772 units on offer.
In the past year, Lokum Deweloper completed the Lokum Monte project in Sobótka, near Wroclaw, and Lokum Salsa in Krakow. Occupancy permits were also granted for stages I-III of the Lokum Porto development, stages I-II of the Lokum Verde development and stage IIIa of the Lokum Vista development. At the end of December, the developer had 696 units under construction.
The Lokum Deweloper Group has an extensive land bank in Wroclaw and Krakow, with a total area of about 80 hectares, which allows the developer to plan the construction of another 14,000 units, it also said.
Source: Lokum Deweloper and ISBnews
Photo: Lokum Vista
