Morning, everyone, and welcome to the quarterly results of Echo Investment Group. We're going to summarize today nine months of our activity this year and give you an insight into what's going to happen in the following months. My name is Weronika Ukleja-Sałak. I'm the company spokesperson, and as usual, I'm here with the management of our group. And please welcome Nicklas Lindberg, our CEO.
Thank you.
Hi, Nicklas. CFO of our company, Maciej Drozd?
Hello.
We're going to start with the presentation, then we're going to host a quick Q&A session, as usual, so stick around until the end. Maciej, the floor is yours.
Thank you. So let's start because we have great info to share with you. I would like to start from saying that yesterday we signed an agreement to sell React. That is an office building in Łódź, 15,000 square meters, great location, fantastic tenants, and we sold it for EUR 32.5 million, which is consistent with our book value for this asset. So we are happy because it shows that we are leading the market. As I think everybody knows, the investment market in offices was slow during last year, but it's getting accelerated, and we are part of this wave, and we expect more to come this year, but mainly next year, and we'll talk about this a little bit more later. We are continuing work on Towarowa, which is a fantastic destination project in the city center of Warsaw.
The first office building is under construction, is actually closed, it's financed, it's leased in around 70%, so we are very, very happy with the progress here. We also started recently the building of the first residential building. It's being done by Archicom. It's around 150 apartments. The sale process is going great, and we are very, very happy with the product that we are going to deliver to the market, and again, Nicklas will talk a little bit more about this project in detail because it's a huge project and a fantastic project, and we would like to share with you more info on that. We are very happy how Student Space is developing. It's our joint venture where we intend to build 5,000 beds within three to five years, and we started very, very fast.
We are already building 1,200 beds to be delivered next year, and more is coming. We have many, many projects in preparation, and again, there will be more details about that. We are very excited about how it's progressing quickly and according to our plans. Commercial segment, as I already mentioned, Towarowa is performing very, very well. We have also some other projects which are under construction and which are being leased, and we are happy with how the leasing activity goes and also how the assets are performing overall, and again, Nicklas will share with you more details on the performance of office and retail assets. Resi4Rent, the largest PRS operator in Poland, is progressing very, very well.
We will have over 6,000 units completed and yielding and operating at the beginning of 2025, and we are on track to have over 10,000 within two years, which is a plan, and they are being leased fully at very good rents, so we are very, very happy with the performance of that project. We also started a sale of individual units in our first project at Warsaw Browary, and we do this to boost returns, and again, Nicklas will give you more details on that project. Residential wholesale market, that's very interesting because we are doing extremely well. Archicom sales grew by 19% in Q3 compared to last year, which is against the whole market, much, much weaker performance because actually the whole market dropped, and the whole market stabilized with sales at a lower level than last year, but we are overachieving.
We already sold more this year than we sold last year, in the entire year last year, and we are on track to have a fantastic best-ever result in sales. We are also committed to achieve our target of 4,000 units sold annually in the next few years. Of course, in the more challenging market, that will take a little bit more time than we planned a year ago, but we are confident that we are getting there because, as I mentioned, our growth is unprecedented, and compared to other developers, of other residential developers, we are very, very happy with the results. We are also working on developing existing land bank that we have, and in particular to convert land which is currently zoned for commercial purposes to residential purposes, and again, this is a project that we'll share more details later during this presentation.
Again, what were the highlights for the third quarter? Strong residential sales with a high growth year on year, as I already mentioned, very good handovers, again, much more than a year ago, start of Student Space projects with 1,200 beds, and with very good progress and very good outlook to realize, to implement our plan of building 5,000 beds in three to five years. Towarowa 22 is progressing extremely well. It's being financed, and it's already recognized by tenants and clients as the landmark project which it will be. On the financing part, we already rolled over during this year bond issues maturing in 2025. The only issue which was not rolled over will be repaid in January, so we have a very, very clean space ahead of us in terms of our financing needs in 2025.
What happened after the end of the quarter, because it's already a few days that passed? We continue to have strong sales in residential, and we continue to start new projects. Archicom started its activity on a new market in Katowice with very good results, very good response to this new project. We continue to sign leases, and as I mentioned, we are happy with the performance of leasing activity in all our projects. We sold React, which is very, very important because the market was not really that active for the last year, but we see that activity is coming back, so the investment market is getting more and more interesting.
And also in Q3, we already repaid bonds expiring in the last quarter over EUR 200 million, which is a part of our plan to reduce our indebtedness, which will follow the disposal of the assets that we own, I mean the commercial assets that are completed, yielding, and they are ready for sale. If we look in a little bit more detail on our segments, once again, residential for sale, what we see in the market is that the prices did grow a lot. They stabilized recently. What we expect is that the prices will stay on the current level, except that there will be more and more promotional activity coming from developers, and this will be a tool to incentivize clients to buy more.
But we don't expect overall repricing, despite the fact that the market overall is not performing that great, but we are doing very, very well because our sales are growing. What we are doing, again, is we focus on pushing the sales up, on starting new projects, which is very important. We keep our eyes on the target of selling 4,000 units per year in the coming years. We focus, of course, on all projects, but in particular on Warsaw projects and Wrocław projects, which produce very high margins and contribute a lot to the result of this segment. And we are looking for new projects as well. At the same time, we are converting the land we already own, which is currently zoned for commercial purposes, to residential use. Resi4Rent, it's a clear market leader.
We have very good performance in terms of rental, of project completion, because we are delivering many, many projects this year and will continue to deliver during next year. That's extremely important that we keep our position of market leader in terms of market share, in terms of number of units operating under construction, and we want to keep it that way for the next couple of years. Our target of over 10,000 is something that we want to achieve in 2026, and we are very, very close to actually hitting even 11,000 in this year. Student housing, I already mentioned that we started 1,200 beds in Kraków. Why we do that? Because the market is extremely interesting. There's a huge need and huge deficit of space for students.
So what happens right now is that students are renting space, renting apartments, renting rooms from the general market, but the offer for them in specific, in designated buildings is extremely limited. And when we compare Poland, Warsaw, Kraków to other cities in Europe, we see that the deficit of beds can easily be assessed at being at around 400,000 beds compared to what would be a more average European level. So we see a huge potential in this area. We see increasing rents, not only in Poland, but everywhere. We see a growing number of students, in particular international students, coming to Poland. So in this environment, we believe that our plan is extremely important and will be delivered on time or even before the time that we originally planned to implement it. On the office market, as I already mentioned, the leasing activity is strong.
There is very little development activity, so not many projects are coming to market, both in Warsaw and in regional cities. We focus currently on Warsaw, Kraków, and Wrocław only, and we see a good response, a very good response, very interesting demand from the clients, so we are very happy on that. At the same time, we are focusing on selling already completed assets, and that's a plan for 2025. In retail, again, the performance is good. It's improving year on year for the last couple of years. We see stabilizing footfall, stabilizing tenant results, and very clearly improving net operating income, and that's our target to stabilize and achieve and maximize net operating income before disposal of these assets on a much stronger market that we see coming. Construction is very favorable, and we expect it to stay like that for at least a few more quarters.
Currently, the level of activity overall on the market is not satisfactory to the construction companies, so they are looking for jobs. They are very much willing to work for us. They are very much willing to negotiate because they really need to have something to do on the market that is not offering them many opportunities. So what it means to us is that we can build, we can construct our buildings on good terms at good pricing, and this is, of course, helping our margins in all the segments. Let's look at high-level financial data. So what I would like to say is that our profit for the quarter was consistent with the consensus, so it is as expected by the market.
Of course, we are working to improve the results, and this is going to come with more handovers because, as I mentioned, we are happy with the level of handovers that we had in Q3, but typically Q4 is higher, and this is the pattern that we see in many years, so there is some seasonality, of course, in the results that we have. I would like to spend a little bit more time on this slide, which is showing how we look at different segments of our activities. So, of course, currently the most important segment in terms of contribution to the result, but also in terms of value from our shareholders' perspective, is residential for sale.
If we look at how we present it on our balance sheet, it's presented at cost, which means that actually the value of the assets, the value of the business as such, is not immediately visible on the balance sheet. So what we did on this slide, we revalued this business based on the market share price of Archicom, and of course, then we see that what is contributing PLN 1.16 per share at book value in the eyes of the market is valued at PLN 3.44, so it's a huge uplift that we can see in this segment if we look at this from the market value perspective.
Other segments are being revalued, but of course, according to certain rules and principles, which really mean that we are actually before actual revaluation of Student Space and revaluation of Towarowa, where we only started to revalue the first office building, but of course, the project, as Nicklas will explain in detail shortly, is much, much bigger. So we only recognized a very small part of growth of pickup in value in Towarowa, and much more is ahead of us. So clearly, we see potential of value creation next few years, coming from Resi4Sale, where, as I mentioned, we target to sell 4,000 units per year with maintaining good margins. Of course, in Resi4Rent, which is a clear market leader, Student Space, obviously, because we are at the beginning of our journey, Towarowa, again, first building only, is reflected in its full value.
The rest of the project is at cost. And commercial assets, excluding Towarowa, these are mainly assets for sale, so here we don't really see that much upside potential. We look at that more as a source of future liquidity, but I will talk about this a little bit later in the financial part, how we want to allocate the proceeds from the disposals. But before that, Nicklas will guide you through our segments in more detail.
Thank you, Maciej. I will now start from the living part of our segment of our business, as we have two parts of our business. One segment that we call the living segment, and in the living segment, we're having our Resi4Sale. And as Maciej highlighted before, we had strong sales in Q3.
We'll continue having a target of getting up to the 4,000 units in the future, and already next year, we will exceed 3,000 apartments being sold. And here we see we have a strong land bank for many years ahead. We are continuing to fill up our land bank, both by buying land and also, like Maciej said before, by converting land that is already today on commercial land bank that will be converted into residential land bank in very good spots on the market. We're also looking now at how will we be able to adapt to all parts of the market. So now we are specialized in a lot going forward, how we will be able to serve the first-time buyers with creating projects that are very, very attractive to them, where we see a potential of growing further in the segments of Archicom.
What you see here in the market, you see stable sales in the big cities where you see a big demand from buying apartments. What has happened over the years, if we go back, is you see that the land bank of Archicom is now much more centralized to the bigger cities. You see we have grown dramatically in Warsaw, where we see that the projects are the ones that are selling quickest, with a high margin and with a huge interest, where we are creating a lot of destination projects that have a huge interest on the market to continue investing from buyers of residential. What you see here is a little bit of our journey, where we started from back in 2023, 2022, and before that, from 500, 800 units up now to 2,400-2500 units, next year up to 3,000 units.
This growth has been dramatic over all these years. What is important to highlight, like me and Maciej have always stressed out, we are keeping the profitability when we're growing, so it's still in line with our strategy of profitable growth, so we grow and still keep very strong margins on our projects. For 2025, 2026, we will increase the share that we're having here in the first-time buyers part of the segment, which is for us very, very important. This is where we see a huge growth, and we are adapting the projects to that part of the market, which means smaller apartments built at lower cost to be able to sell at a lower sales price. We have a lot of projects ongoing, and we continue buying projects all the time to be in line with our strategy of exceeding 4,000 units in 2025 and beyond.
You see here how the land bank is inside the sales of the Archicom Group, and here especially what I want to highlight is you see the growth of sales that are happening in Warsaw, and this is something that will lead to future profits in our organization. As you know, we only take the profit in our books once the apartments are handed over, so all the sales we're today seeing in Warsaw will lead to future good results going forward in the Archicom Group. Handovers are a consequence of the apartments being sold earlier, so as we will increase sales now going forward year on year, we will increase the profit for the coming years, which will also then be reflected in the Archicom books. We have a strong offer in all our markets. We are selling very well in our markets.
We have a big offer in Warsaw. We have a big offer in Wrocław, and we have a big offer in Łódź. In all these three markets, we are really now pushing to take a stronger and stronger part of the market. We are the market leaders both in Wrocław and in Łódź, and we are pushing strong to take even more market share in Warsaw, where we have acquired this fantastic project like Empark, which is a destination project. We have Towarowa, another destination project. And this is what we see. This is really what the buyers are looking for: something unique, something different. We just don't deliver a building. You deliver a full lifestyle. You deliver a place where you don't need to leave this area for the full day. You see the land bank. We are keeping the land bank across Poland.
We are focusing on continuing to grow our land bank in Kraków, where we are now putting most of our effort to buy more land, which is happening already this year and early next year. We are still evaluating Tri-City, which we have said for some time, and we are looking for the right opportunity to enter that market. We will not enter a new market unless we see that it's fitting into our strategy. We find the right way to enter, and it will continue facilitating our growth, keeping the same margins as we're having today. So this is something that we will keep you updated, and we are constantly looking for the right time to enter, but at the same time, the focus is continuing to grow already in the cities where we're being present today. We are active on the five different markets.
We just entered now into Katowice, and Katowice is a great example where we converted a land bank that was earlier in Echo. We converted its ownership, transferred it to Archicom, creating a city center location that is selling very, very well. And that's how we've been able to relocate land within the group to get the best use of every individual land plot, which I think is a very, very big strength of the Archicom Group that you cannot find in many other companies on the market. If you look at the second part of our living segment, Resi4Rent, we are by the year-end now up to 6,200 apartments under operation. We have another almost 4,000 under construction. We have leased 99% of the units.
Like Maciej said before, the first project we started up, which is Warsaw Browary, we're now selling unit by unit as the residential market for sale in the city center of Warsaw is extremely strong. So here we are benefiting from that part of the market to be able to even more facilitate the returns of our investors and shareholders to be able to give the ultimate return looking at every given point of the market. By selling off individual projects, it doesn't mean that we are not focusing on the growth, as we are starting five to six times as many new projects as what we are selling off. So it's really a small part, and it's only to boost further returns. We will start another 1,000 projects in Q4 or early Q1 next year, and this is mainly Warsaw projects.
If you look through all our projects, all our pipelines that we're having in the segments, we are focusing on the big cities, and especially in Resi4Rent, we focus on getting more projects in Warsaw where we see we're getting the best returns of our investments. Here you see the segments of the market. We are today on this slide, 5,000. If I show this slide at the next presentation, we will be up to 6,200. We are constantly keeping the market-leading position on the market. We are continuously growing, and we are focusing on always making sure that we give the best service to the renting community in Poland. Here's what we talked about. Like Maciej said before, we have almost 11,000 units already today in the pipeline.
We will have by the year-end over 6,000 under operation and another 4,000 in construction, which is showing like this is a really dramatic growth, and you're seeing that we continue delivering fantastic projects to the market. Student housing, which is the third leg of our living segment, is something we started up as early. We started to tell you about this in March, April when we signed the JV with Signal Capital Partners. Now we are already now up and running with 1,200 beds, which is really, really a quick ramp-up, which I think we have never seen before in the Polish market. This 1,200 beds will be delivered in September next year, which will be that we are exactly at the right time to hit the school season for 2025, 2026.
During 2025, we're going to start another 2,000 beds that will be ready to be delivered in September 2026 for the season 2026, 2027. So it's really here what we're focused on here, rapid growth. You're also focusing on delivering it by using construction methods that are more including prefab and other elements to be able to deliver a very, very good quality in a very short timing. You see on the Polish PBSA market that there's a lot of students, and it's both domestic students, international students coming into the Polish market. When we saw you started the semester of 2024, 2025, there was a dramatic lack of beds for people who want to study in Poland, and what we are delivering is a unique quality that we have not seen on the market, and we will be able to facilitate this.
Today, we are starting a project in Warsaw, in Kraków, which is the two cities where there's the biggest lack of beds, so I think going forward, we're going to tell you much, much more about the growth here, but we are just in the beginning of the journey, but this can be a very interesting segment for us to continue growing, and here is the same target that we're having in Resi4Rent to be able to come up and take the market-leading position on the market, and you see here as well is another one, how much potential there is in Poland to continue growing up both with international students, but also to be able to grow up and take a stronger leader in this segment of the market and to be able to come up to other big cities like the UK, Germany, France, Turkey, Netherlands.
There's a very, very good education system in Poland that we think that we will benefit from growing our student base organization. Here you see the pictures of the projects that are either started or planned to be started that you see now going forward. It's super interesting here what we will be able to deliver, and this will also be a new quality on the market. Here you see the project that we have under construction. One of the projects is here with traditional construction on Kraków Vita. On the 29 Listopada we're doing with prefab. This is very, very interesting for us because we will be up with a full structure in prefab in six months, which is we cannot be able to do it in the same pace with traditional construction.
This is something that we're going to look much, much closer in how we do it in student housing. Why we do more prefab in student housing versus other parts of our business is student housing is much more standardized as every room is exactly the same. If you look from a commercial segment, office and retail, Towarowa leased up to 70%. We will hand over the building in April next year, March, April, and here you will see that at that point it will be close to 100% leased. We have a lot of interest for the remaining 30% of the building. We are starting up two more projects in Wrocław and Kraków, and here you will see already LOIs and leases being signed during Q4 to be able to deliver these projects as well going forward.
Even on these local markets where you see there's very little construction ongoing, but there's a strong interest from tenants to move into the newly built buildings that we're delivering with totally new standards and up to date with the requirements of the tenants of today. You see tenants are moving from bigger space to smaller spaces that they're having today as still the working from home is a part of the business that we're going to continue living with, but we see really our buildings are attracting people back to the office, and also we are delivering the fit-out and the community around that you're looking for. And if also looking at what Maciej said at the beginning, we had a successful sale in Łódź, which shows that the investment market is living in Poland.
We are selling in the regional cities, and to be able to sell our first building in Łódź, make sure that we are having bigger things ahead of us, and we're looking here for how to be able to continue divesting, like Maciej said before, to continue getting this commercial standing asset to be generated into cash and then do the best use we can out of the free cash that we're freeing up for these sales. We had a big interest, like Maciej will talk later about, about financing Towarowa, which is a fantastic project that both banks and tenants are looking very optimistic on. What we are doing is less of the standalone projects. We do more of the destination projects. And we see here the unique strengths of the Echo Group is that we can deliver more than one use on each one of our sites.
So what you will see here now is that the tenants are looking for spaces where they don't only have an office. They have so many other functions. So when you come there, there's a restaurant, there's a coffee shop, there's somewhere you can live. So what we are creating is really the places that we've been talking for many years about, places where we both work, live, and entertain. And that is why we see a lot of interest in our offices and our assets that we are delivering. Towarowa is a unique project. We did a Warsaw Browary that was really transforming the city center of Warsaw. Now we're going to do the next one, Towarowa, that is twice the size of Browary, and it's just going to deliver a fantastic quality to the city center of Warsaw.
Here we have Archicom owning the whole residential part of the project, which is around 50,000 sq m, and we have a JV on the remaining 150,000 sq m with AFI Europe, where AFI Europe owned 70 and we owned 30. Here is really what we're going to deliver, state-of-the-art project in the city center of Warsaw. We own a seven-hectare plot where we have now got the master plan. We were going to now go in full speed to be able to deliver this project to the market. All of you who remember when we did the Browary, how quickly the construction went once we started, and you will see the same thing here on Towarowa. It's a 190,000 sq m mixed-use project with a two-hectare park. We are not really going to do only a project here.
It's really a park for inhabitants of Warsaw. There's an old printing house from Dom Słowa Polskiego, where we are really going to deliver a new quality, both with exhibition of the printing from the past, but also what we're doing in all our project, really creating a space where people want to come. What we are doing here is really building the new city center of Warsaw. The whole Wola is where everybody today goes for office. They go there for the Browary. They go there for Norblin. And now there will be another attraction to come to this area. We are just in the beginning here, and you will see quickly now for our coming presentations how we continue growing this. And like Maciej said, we have just started reevaluating this project.
Going forward, there is so much more value in this project that will be released as we're going along with our development. So here we're just in the early stage, but this is a fantastic project that I am super excited what we're going to continue delivering. We're doing two more projects, Kraków Vita and Swobodna that are offices, and where we're also going to do this in a mixed use and a function between the two different uses, both from residential and from the living segment. We have seen in all our projects that it's a very, very successful mix of doing both these things in one plot. Here you see Vita, another example, and all these things are ongoing and will be ready during 2025. So here you see offices, you see student housing, you see residential sale.
And by doing what we're doing here, we are putting a new benchmark on the sale of the offices where we're selling at prices that are new benchmark for Kraków and offices. There's a huge interest for these locations, and students are going in full speed with the construction and will be delivered for September next year. Here you see that the buildings that we have shown you before, we have now sold off React. We're going to target to selling the remaining part of our projects during 2025, 2026, and here we're going in full speed to be able to sell off our buildings and then relocate this capital to where it's the best use for the company as we want to continue growing. We want to continue being a stable dividend payer to our shareholders.
So this is crucial for us, and this will be a big part of me and Maciej's focus for 2025 to unlock the capital here to be put into new use inside our organization. CitySpace, continue growing in our location, continue being a big part of our business where the flexibility in office is more important than ever. As you need to have both, you need to have your office that is not adapted for everybody coming back to the office. So you need to have this overflow where you can use for people being in office from time to time. And this is something that all our tenants are asking for in all our buildings to be able to have that flexibility inside your building. Libero continue growing, which is really, really nice to see. We have rolled over a lot of the leases.
We have signed TK Maxx instead of MediaMarkt, which is really showing the quality of the center. And we continue getting this as really the best project that we're doing here for this convenience retail. We see we have playgrounds, we have activities, there's everything happening in this project. So we are really seeing that both in turnovers and footfall, it all is paying off. Galeria Młociny, we're doing the same. We are all back now to record footfall. We have Saturdays close to 50,000 visitors. Turnovers is going up. Tenant mix is improving. We are doing a lot of activities here. And this is really the retail is coming back on the market. And we see with our two centers that we're having here, we are facilitating the future growth of the retail part of the market.
The ESG part of our business is a crucial part of our business going through both the living segment, but also for the commercial segment. Here we are complement, we are focusing on implementing our ESG strategy. We are focusing on measuring emissions, and we continue having this as a very, very integrated part of the strategy of the Echo Archicom Group to be able to be the market leader on the market. And here you can read more about the whole report on our homepage to be able to learn more what we're doing because there's very, very big work put behind all of this.
Okay, so once again, let's look at the financials. As I already mentioned, the net profit figure was within the consensus. You can see on the slide that we continue to have good margins both in residential and commercial segment.
I'm talking about margin on sale that in residential segment in third quarter was over 30%. The margin is mainly driven in particular segments, in particular quarters by handovers. I mean, in which projects these handovers happened because some projects are having higher margins, some are less strong. But overall, on average, our target is to maintain the margin over 30%. I mean, gross margin because, of course, net margin is something entirely different. Fair value change, fair value gain on investment properties. You can see here a negative figure, which is mainly impacted by exchange rate movement. You can see that the impact of the exchange movement was bigger than the number of fair value change. So it means this is the main factor that influenced this number.
I would like to focus on the balance sheet because I think looking forward, this is something very, very important for us. The size of our balance sheet increased compared to the last year and mainly in two positions. One is investment properties, including properties held for sale, and as we already repeated a few times during this presentation, of course, you see React, which will disappear from the balance sheet shortly, but you also see here Libero, Brain One and Two, its project in Kraków and City 2. And these assets are earmarked for disposal in 2025. Another area of growth is inventory, and of course, this is our residential segment where we show our projects, our ongoing projects in development, so we can see very, very rapid growth of that segment when we bought a lot of land and we started many projects during 2024.
That's why our inventory number is going up. I think that's very important to remember and to understand that we expect this number to continue growing. When you look at our other side of our balance sheet, then we see that our short-term debt decreased compared to the beginning of the year. What is even more important to be highlighted is that it decreased even more in Q4 because we did repay EUR 209 million of the maturing bonds in Q4. The balance sheet is from Q3. So of course, it's not yet reflected, but this number will go down. Obviously, a long-term debt is including debt linked to this project, so to React, Libero, Brain, etc., that will disappear together with disposals of these assets. Also, it's very important that our intent is to use the net proceeds coming from the disposals.
So net proceeds means value of the asset less debt to be repaid. So these net proceeds will be allocated between reduction of corporate level of debt. So that's one target. But we also intend to use these proceeds to pay dividends in 2025, 2026, and 2027. So that is a very clear plan that we are determined to implement next year. And as I mentioned before, and Nicklas spoke about this as well, we see investment market really improving. We are part of this improvement. We are leading that improvement with React. And we expect the effect of that to be visible in 2025. And that's why we focus and we stress so much the importance of disposal of the assets that are ready to be disposed and that will be used.
The proceeds of this disposal will be used both to reduce the debt, but also to pay dividends in the coming years. I already mentioned this before, but I think it's good to see this, like we presented here, that in 2025 and 2026, our maturity profile of our indebtedness is quite flat. Actually, the biggest amounts are corporate facilities that we are rolling over and the bonds that are in 2025, that are maturing in 2025. We intend to repay them. So we actually do not plan to have bond issuance next year. In 2026, you can see that again, the amount of bonds is small. But as I already said, with asset disposals, our intent is actually to reduce the indebtedness, so not to refinance the bonds, but actually to reduce them.
And this is, of course, one of the very important reasons is the cost because interest rates, they stay high. Of course, we expect them to go down over time, but we want to be proactive and having liquidity coming from asset disposals. We will proactively reduce debt and, of course, reduce financial cost as a result of that, so again, this is a very important part. It's not only about debt reduction, it's also about improving results and paying dividends out of these proceeds, and of course, also out of the improving results coming from more and more handovers because, as you obviously understand, increasing sales in Archicom, in ready for sale, means that within one or two years, we will have many more handovers and with strong margins.
Of course, the impact on the result is very, very material, and that will be another source of income and dividend in the future years. I think that's all from me.
We are going to start the Q&A session. Yes. Thank you so much. We'll start off the Q&A session, and we'll start it with our hottest news, so React. Our viewers would like to know at what yield was the React project sold?
We never comment yields. We comment the sales price on this transaction. The yield was around 8%.
Okay. That's a quick question, quick answer. Thank you so much, gentlemen. Let's talk about Towarowa for a little bit. We have a question that our viewers would like to know if we can walk them through our residential project that is owned both by AFI and Archicom. And would it be the sole residential developer, the Archicom? And what is the AFI's contribution of this project?
Like we said before, Archicom is owning the 50,000 sq m that is for residential use on this project. On the remaining part that is on commercial use, which is Resi4Rent and offices, is owned 70/30 between Echo and AFI. So from the residential sales on the project, it's 100% Archicom. Everything that is under commercial or what we call living sector with the PRS is done in the JV between Echo and Archicom.
Thank you. Thank you, Nicklas. Let's stay in a little bit for residential sector. Let's talk about it more. And can you comment how many handovers in Echo alone can we expect next year? Maybe? Discuss with Nicklas?
I wouldn't like to go into the details. Actually, if you look at our accounts, you have all projects detailed with completion dates. So you can basically make that calculation. I wouldn't like to go through that. I think it's too detailed. But the answer is actually in our accounts. It's quite easy to look at that. Of course, it's mainly, I mean, the simple answer is really mainly Modern Mokotów and Vita, which are being done. And of course, we have still part of Fuzja in Echo. And that's it, right? So it's not many projects. It's quite easy to make that calculation. To count it.
I understand. But to give our viewers an exact number to come back to handovers and our target for 2024, how many handovers can we expect?
I mean, we keep the original plan, so we are not changing the guidance here.
Okay. Thank you. This is actually to both of you because it's a question about our plans for the future. Where are we going if we plan to build more affordable flats? You know that Archicom entered the more premium sector right now. Our viewers would like to know about the affordable segment.
We are doing a lot more apartments now for the first-time buyers on the market. We are seeing that it's a growing part of the market that is today not being served enough by Archicom, where we think we can both deliver excellent quality but also delivering products that are very well adapted to this segment of the market. We will do it on all the cities where we've been present, where we'll do it in different locations on the market, where we'll serve different parts of the segments of the market.
But what we have said, what we always said before, Archicom will stay in the popular segment of the market where we will serve rather 70% of the Polish population. Lately, what we have focused on seeing now is that we have not attracted enough attention to the first-time buyers, that we are now working much more for 25, 26 to grow that part of our business. Today, this is roughly 30% of the sales in Archicom. Next year, we'll go up to 40, and the year after, it will go up to 50% of the sales that we're doing in our business.
Thank you so much. And maybe last question about residential. Is the 2,600 sales target within reach?
We have changed that target like Archicom presented in their presentation two days ago. But the target is in the range of 2,300-2,400 apartments being sold. That is something we feel confident that we will reach within that target.
Okay, great. Thank you. We are actually receiving congratulations on the React disposal, so it goes to you. We have a question to provide a little bit more color regarding investment scene in CEE. Nicklas, can you tell us more about how assets are looking to realistically sell next year?
We see, first of all, you want to stress that there will be many more transactions happening in Poland this year. So you will see a lot of transactions closing from now until year-end this year on other segments of the market, which is a clear signal that the market is waking up from a pretty steady stage until where we are today in 2024.
We see in 2025 that it will continue growing and there will be much more capital looking to be invested. We see here interest already today in the assets that we put on the market. We are now in the discussion with potential buyers to be able to produce transactions for being closed in 2025. And here we're working full speed on all the assets that we showed on the earlier slides. And we will update going forward as soon as we have something concrete and when we're doing today, yesterday, like when we sold an asset, then of course we will go out to the market and communicate directly to the market.
Okay. Thank you so much. And okay, we have sold a building. And will we propose some extra dividend for this?
I mean, there's no intent to do that in 2024. But in 2025 and following years, that's the plan. Yeah.
Okay, thank you so much. So changing a little bit of subject to our PRS, there is a question about our intent and update on Browary and Kępa Mieszczańska Resi4Rent projects that went for sale for individual clients. Can we comment on that a little bit more?
We have been now actively working on marketing both projects. We are now actively converting apartments on Browary, where we see good interest, we see good sales happening. And what we've decided is first we're going to start now on Browary. And then after that, we will continue with Kępa to continue delivering good sales here. We also see here going forward, we are focusing on continuing growing our PRS platform. So at the moment, we have no next project that we're putting on the market for selling as individual units. This was two projects. We saw that the spread of selling them as PRS versus selling them as individual units was so big, so for us, it was the best shareholder return by doing what we did on these two projects.
Thank you. I think we have time for one last question. Maybe let's stick to Towarowa, and the question is, are we looking to use our put option for Towarowa 22 Office House next year?
Well, yeah, yeah. We are, of course, discussing with our partner already, and there's a clear intent on both sides that, of course, our partner, as part of the strategy, they are long-term. They keep the assets and we are developed and we exit, so we are, of course, confirming that intent, so we do expect this transaction to happen as well in 2025. Yeah.
Thank you. We are done with our Q&A session for today. Thank you, gentlemen. Thank you so much. I would like to thank our viewers for joining us today. And we'll see you soon in March, I guess. So we'll summarize how 2024 then. So once again, thank you and see you then.