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Management Board Report on operations of Echo Investment S.A. and its Group in 2020
centres’s closing assumed the possibility of further
closings, but they only applied to 2020. Currently,
Echo Investment is focusing on signing short-term
1-2 month agreements, based on the current situa-
tion of tenants and their individual standings. Both
managers of both shopping centres and their ten-
ants are aware of the unpredictability of the situation
in the long term. Both parties assume to return to
negotiating long-term annexes in the middle of the
year, when the situation regarding the end of the
epidemic should be more predictable. Then it will be
easier to assess the situation of individual tenants,
their restructuring and development plans.
Both facilities are focused on marketing activities to
strengthen their brand awareness. Marketing actions
in the first stage (until about the middle of the year)
will focus only on increasing the turnover value, while
only in the later stage they will be focused on activ-
ities to support footfall. It is important that the vast
majority of tenants focus on maintaining existing
stores and innovative sales approaches.
In order to minimize operating costs of shopping
centres, steps have been taken to defer or cancel
some payments (e.g. perpetual usufruct or real es-
tate tax, principal and interest instalments on loans)
and to optimize operating costs.
Residential for sale and apartments for
rent sectors
Although regulations related to the pandemic did
not limit the operation of sales oces, notaries and
authorities, in practice, the sale of apartments was
almost completely stopped during the second half of
March. Clients returned to the analysis of the housing
market and submitting their inquiries in the second
week of April. Due to the already advanced work
related to the digitalization of sales processes, Echo
Investment’s salesmen were prepared for remote
customer service: they could present their oers at
online meetings and with the help of virtual reality
tools, negotiate contract provisions in the CRM sys-
tem or present the progress of construction work
through cameras. The introduction of the pandemic
state accelerated the implementation of further ele-
ments of on-line service: a system for signing binding
booking agreements or initial customer service using
artificial intelligence.
Taking into account new trends and customers’
needs, Echo Investment’s designers and vendors
have introduced new solutions and facilities to their
projects, which support sales. Depending on the
project, these include applications allowing for con-
tact-free entry into apartments (from the housing
estate gate, in front of the main door and the eleva-
tor), the services of architects (who help arrange an
apartment in such a way that oce space can be
made easily accessible), special marking and training
materials, washbasins or disinfectants in common
areas (e.g. at playgrounds). Balconies, terraces, log-
gias and gardens have also become more important
for customers.
Since June, the number of inquiries and meetings
with potential customers has remained at a level
similar to before the pandemic. However, custom-
ers are still more cautious when making purchasing
decisions. There is a noticeable increase in the num-
ber of transactions for investment purposes, with no
or little credit, which involves the desire to protect
the capital after a series of interest rate cuts. Ready
apartments and apartments with near commission-
ing dates are bought more willingly. Clients pay more
attention to security of transactions, which works
in favour of large and capital-stable entities such
as Echo Investment. The most sensitive group are
clients buying their first apartment, who depend on
obtaining a credit, with relatively low income and
low own contribution. Because of the uncertainty
about macroeconomic developments and, therefore,
about their personal financial situation, these clients
prefer suspending transactions. The housing sector
is also strongly aected by the tightening of banks’
lending policies. The initially tightened credit pol-
icy of banks was also of great importance for the
housing sector, but this turned out to be tempo-
rary. Despite the introduction of restrictions in the
economy, the sale of apartments in Echo Investment
and the number of inquiries since summer 2020 has
remained at a satisfactory level. Despite the increase
in the number of cases and the introduction of re-
strictions, the activity of customers is constant.
As a consequence of the economic downturn, great-
er caution and Echo Investment’s conservative poli-
cy, new projects were being started on the condition
of achieving certain level of pre-sale. On spring 2020
the company reduced its annual sales target to 1,400
apartments. Finally the company has sold (by pre-
liminary agreement) 1,570 apartments and handed
over to clients 1,505 units.
Restrictions related to the pandemic did not have
a significant impact on the operation of the Resi-
4Rent residential platform, in which Echo Investment
has a 30% stake. Although in the first weeks of the
restrictions introduced, the process of renting pro-
jects was almost completely stopped, very quickly
the interest of potential clients returned to normal.
In line with the Management Board expectation, Re-
si4Rent benefits from the pandemic situation, with
slight decrease of rent rates expectations. Due to
the increased uncertainty in the economy and high-
er requirements for taking out mortgage loans, a
signicant number of potential apartment buyers
postpone the purchase decision and take advantage
of institutional apartment rental.