First Property Group plc has acquired a further 7,171m² (or 32.1%) in Blue Tower, an office building in Warsaw, taking its ownership in the building to 17,937m² or 80.3%. First Property already owned 90% of the management company tied to managing Blue Tower. The company, therefore, now has effective total control of this landmark property. The consideration for this new investment amounts to €8.5m(£7.2m) and is payable in seven instalments over a six-year period. The first instalment has been paid and ownership of the property transferred to the group.
Of the space being acquired, 2,012m² is let to Pekao Bank on a lease with rolling termination provisions subject to 6 months' notice with the first such notice being served no earlier than 12 August 2023. Whilst the economic environment across Europe is challenging, the Polish economy is doing relatively well. The company expects occupational demand and office rents in Poland to be buoyed due to a substantial increase in the cost of building (materials and labour) and a resultant decline in the construction of new office space in Warsaw.
Ben Habib, the Company's Chief Executive, said: "I am excited by the Group's acquisition of a further 32.1% interest in Blue Tower, taking our total interest in the building to 80.3%. Our first investment in this office block was in 2008 and it has made a major contribution to our profits over the years. I expect this to continue and grow. It is a landmark building in Warsaw, centrally located, opposite the City Hall, above a metro station and at the junction of major bus and tram routes. There is a substantial programme of refurbishment and leasing ahead but I anticipate this should go well."