Orco Property Group SA, a real-estate developer that operates in central and eastern Europe, said 2006 revenue will probably exceed its target by as much as a third as it expands in Germany, mainly in Berlin. The company’s 2006 sales will probably be about € 120 million ($154 million), compared with the € 90 million to € 100 million previously forecast by Orco officials, Orco Senior Vice President Ales Vobruba said in an Aug. 25 interview in Prague. Orco’s 2005 revenue was € 50.4 million. „We see a window of opportunity in Germany,” Vobruba said. The company is looking at acquisitions „mainly in Berlin, where real-estate prices are at the bottom level. We see their purchase and their long-term possession as a great opportunity for us as an investor and a developer.” Orco, based in Luxembourg, has focused on central and eastern Europe since it entered the region in 1991 to benefit from booming property prices after the fall of communism there.

Orco has properties in the Czech Republic, Budapest, Moscow, Berlin, Warsaw, Bratislava and on Hvar Island in Croatia. Vobruba reiterated that 2007 sales will be about € 200 million. Revenue will probably remain at about € 200 million in 2008, he said. The company will present a more precise 2006 sales forecast in September, Vobruba said. In May, the company said sales may rise to as much as € 140 million for this year. The shares reversed earlier losses, gaining 0.8% to 2,508 koruna as of 4:56 p.m. in Prague. The stock outperformed the Czech Republic’s PX benchmark index, which fell 0.9%.

Orco plans to set up a Luxembourg-based residential property fund in September with „equity of around € 100 million and assets worth € 300 million,” the executive said. „It makes sense to buy a residential portfolio in Germany” for this fund, he said. The company’s main acquisition this year to date was German Viterra Development, which it bought for € 75 million in June. Orco sold convertible bonds and shares earlier this year to fund expansion. Orco plans to concentrate on growing in markets where it is already established, such as in Croatia, where Vobruba said the company is considering „residential developments on the coast.” He declined to elaborate. In the Czech Republic, which accounts for less than half of its activities, the company in July bought property in Prague’s Bubny district for its biggest ever project.

Overall investment in Bubny will exceed 20 billion koruna ($908 million) over the next 10 to 15 years. The company plans to build some 2,000 apartments there, as well as commercial, office space and possibly hotels. Construction will start in three or four years, he said. The company, whose shares traded in Prague and Paris, may list them in Warsaw and Budapest as well, Vobruba said, adding that the listing in Poland may come in as early as in 2007. Introducing the shares there could in the future bring „other capital and other possibilities of bonds.” Listing in Warsaw and Budapest „might have some positive impact,” Milan Vanicek, an analyst at Atlantik Financial Markets AS, said in an e-mailed statement. „On the other hand, Warsaw especially is a market where there is higher competition and much higher number of stocks than in the Czech Republic.” (Bloomberg)