Dom Development sold 3,093 net units (-24% y/y) in 2022, including 831 units in Q4 (+18% q/q), and handed over 3,666 units (+10% y/y), including 1,068 units in Q4, the company announced.
In addition, the construction of 397 units was contracted to an institutional investor in the PRS (Private Rental Sector) segment.
The financial result for Q4 2022 is mainly influenced by the sale of a land property with building permits for the construction of 397 units, to the PRS fund, for a price of PLN 90 million, as well as transfers in projects: Metro Zachód (135 units), Wilno (126) and Stanisława Augusta (111) in Warsaw, Perspektywa (126 units) in the Tri-City, and Przestrzenie Banacha (117 units) in Krakow, according to the company announcement.
In 2022, the group sold in the retail market: 1,738 units in Warsaw, 793 in the Tri-City, 354 in Wroclaw and 208 in Krakow.
Last year, the group handed over 1,068 units in the fourth quarter (386 in Warsaw, 389 in the Tri-City, 163 in Krakow and 130 in Wroclaw).
“Despite the unfavorable market environment, we continue to see significant customer interest in our projects. High inflation and a thriving rental market encourage people to invest their savings in residential real estate, while buyers in a difficult economic environment prefer entities with a strong market and financial position, such as Dom Development Group. Customers looking to protect the value of their capital are eager to invest in higher-standard units – last year we recorded a record 70% share of cash transactions in the sales structure,” said Dom Development CEO Jaroslaw Szanajca.
He stressed that the exclusion from the market of a group of customers with lower creditworthiness had a significant impact on sales of apartments primarily in the popular segment and in smaller cities.
“Thanks to its strong brand, attractive offer and presence in the most prosperous metropolitan areas, Dom Development Group is experiencing a relatively slight slowdown in sales. In addition, in Q4, Dom Development finalized its first transaction with an investor in the PRS (institutional rental) segment, thanks to which we achieved sales close to the level of the very good years of 2018-2019. We are open to further cooperation with PRS funds, but we continue to focus primarily on the offer aimed at individual customers,” Dom Development CEO pointed out.
Szanajca also pointed out that in addition to the incentive to invest funds in real estate, inflation is also affecting construction costs.
“Although the prices of construction materials slowed down at the end of the year, and the reduction in the number of projects on the market increased the availability and price flexibility of subcontractors, the negative effects of rising energy prices are still to be expected. Dom Development Group, thanks to its own general contractors, is able to effectively manage construction costs,” said the CEO.
Dom Development is a residential developer listed on the Warsaw Stock Exchange since 2006. It sold 4,066 units in 2021.
Source: Dom Development and ISBnews
