Develia unveils new strategy - target in annual sales of more than 4,500 flats

Develia has published its new strategy for 2024-2028. The developer's priority is to continue its dynamic growth in the residential sector and increase its market share in the cities where it currently operates to 7-8%. This will be achieved by achieving annual sales of more than 4,500 units. As part of its business diversification, Develia will also grow in the PRS and dormitory segments. The Group also aims to complete the divestment of commercial assets by 2028.

"In connection with the achievement of most of the goals from the strategy for 2021-2025, as well as the acquisition of the group of Polish companies Nexity last year, which significantly strengthened Develia's position on the residential market, we present a new strategy for 2024-2028. Its aim is to increase the value of the company and the dividend potential while providing a base for further dynamic development of the company," says Andrzej Oślizło, President of Develia. "We aim to increase the scale of operations in the residential segment from sales of nearly 2,700 units to 4,500 in 2028. We assume that this will allow us to increase our share to 7-8% in the markets where the company operates. We want Develia to become the leader of the residential market in Poland within four years and we have the necessary resources, including an experienced team, know-how and financial conditions to achieve this goal," adds Andrzej Oślizło.

As part of its strategy for 2024-2028, the Develia group plans to:
- Achieve annual sales of more than 4,500 units and increase its share in the residential market to 7-8% in its current markets of operation.
- Systematically replenish and secure a land bank providing an average of more than 4 years of housing sales. Increase the base of conditionally secured land.
- Continue to grow the business by entering into joint venture partnerships with landowners as well as equity partners to develop new Develii projects and further M&A transactions.
- Diversify the business by delivering PRS and dormitory projects.
- Develop in-house general contractor competencies.
- Increase Develia's brand recognition and awareness and actively build a brand as an attractive employer.
- Implement an ESG strategy and model ESG solutions in residential construction.
- Complete the divestment of commercial assets (the Arkady Wrocławskie facility and the property on Kolejowa Street in Wrocław) and implement the warehouse project in Malina as part of the joint venture.
- Maintain a secure financing structure at the level of industry benchmarks
(net debt/equity 0.20-0.40).
- Produce a dividend of approximately 1.35 billion over the period 2024-2028, or 75% of adjusted net profit.

Develia will continue to pursue dynamic growth in the residential market, including further strengthening its position in the cities in which it currently operates with the option to enter selected new markets - preferably through partnerships or M&A. An essential element for achieving these goals is the systematic replenishment of the land bank. Develia aims to build its land bank to approximately 16,000 units in 2028, taking into account conditionally secured land. The developer plans to allocate more than PLN 500 million a year on average for land purchases for new projects and M&A.

The core segment within Develia's residential business will remain the popular segment with the intention of clearly emphasising the added value of the product through the use of eco-friendly solutions, functionality, modernity and harmonious integration into the surroundings. Develia's portfolio will also include investments in the elevated and premium segments, allowing the developer to respond to the diverse needs of buyers.
Develia will further expand its competence in the PRS (Private Rented Sector) and PBSA (Purpose-Built Student Accommodation) segments, i.e. rental flats and student accommodation with the option of active operational participation in the construction and management of the PRS/PBSA platform. The developer is preparing several scenarios for the development of these segments, including acquiring business partners for larger-scale joint ventures, cooperating with funds specialised in these market areas or realising investments on its own. The assumption is to develop a minimum of two PRS projects and dormitories on average per year.

By 2028, Develia intends to complete the divestment of assets in the office and retail segments, including Arkady Wrocławskie and the property on Kolejowa Street in Wrocław, and to realise the first stages of the warehouse project in Malina as part of a joint venture.

"Thanks to the systematic and successful implementation of the strategy to date, Develia is in a very good financial position. Over the past three years, we have significantly increased the scale of our operations, including sales, land bank and offerings, shared our profit with shareholders at a dividend yield of 11% and at the same time secured the means for further growth, including by exploiting market opportunities to which we remain open. According to the new strategy, our goal is to provide attractive returns on capital while maintaining a secure financing structure at the level of industry benchmarks," says Paweł Ruszczak, vice-president of Develia. "In the coming years, we want to provide shareholders with attractive dividend potential, we plan to generate approximately PLN 1.35 billion in dividends between 2024 and 2028," adds Paweł Ruszczak.

Over the past few years, Develia has significantly increased the scale of its operations from approximately 1,400 flats per year in 2020 to nearly 2,700 in 2023, thanks to which it is now among the top residential developers in Poland. Reaching the sales target set in the 2021-2025 strategy is expected one year ahead of schedule. Thanks to the successful implementation of the previous strategy, the company achieved an increase in residential market share from 2.6% in 2020 to 4.7% in 2023 in its current markets of operation. Develia also carried out divestments in the commercial segment, including the sale of Sky Tower in Wrocław and Wola Retro in Warsaw despite the difficult market environment, and reinvested the capital raised in the residential segment. The company has significantly improved the efficiency of its operations, as evidenced by its ROE, which has increased from 7% in 2020 to approximately 18% in 2023.