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MERKO in Lithuania sold 2.5 times more apartments last year than in 2019

In 2020, MERKO sold 381 apartments in Lithuania under notarised contracts and earned annual income EUR 48 million from this sale. This was 2.5 times more than in 2019, when 154 apartments were sold under notarised contracts.

Successful sale is the result of consistent purposeful work

“Many years of experience in the market enable us to know well the needs of consumers and to offer them the best matching – modern, high-quality, of high energy class – apartments. This helped us earn clients’ trust. Now, the buyers who have purchased apartments built by MERKO recommend our other projects to their relatives and friends,” says Mr Saulius Putrimas, the head of MERKO company in Lithuania.

Major part of the apartments sold are from the projects that started in 2018–2019: Rinktinės URBAN II, Vilnelės slėnis, a quarter of six apartment buildings, the prestigious Bastėja Life in Vilnius Old Town, or Fizikų II namai near Santara Clinics.

A lot of preliminary sale contracts of these apartments were signed in 2019, and the first quarantine last March came exactly at a time when the construction of many residential houses was nearly completed and notarial contracts for the sale of the apartments were being prepared.

“In March, we had a lot of challenges: it was a time when even notaries had to stop working, so it wasn’t possible to complete the transactions even at the request of both parties. Later, following all the instructions, we made it possible to sign the documents safely. We are glad that despite this difficult period, none of the preliminary contracts has been terminated,” said Mr Putrimas.

He added that after the end of the first quarantine, a rapid recovery in housing demand could be observed in the third quarter.

“Taking into account the rapidly growing demand, in the fourth quarter of 2020 we started selling the apartments of the new Vilnelės skverai project. The market appreciated the project: we signed 50 preliminary contracts for the sale of the apartments in two months. In response to such a great interest, we plan to start the sale of apartments in the second stage of this project in the nearest future,” said Mr Putrimas.

According to the public list of real estate companies that paid the biggest taxes to the account of the State Tax Inspectorate in 2020, companies of the MERKO group are among the leaders with EUR 10.9 million paid in taxes.

Investments decreased by the pandemic grow again in the construction sector

The turnover of UAB Merko statyba from general building contracts in 2020 reached EUR 41.6 million and was 30 per cent lower than in 2019 (EUR 59 million).

Key objects built in 2020 include Kaunas County Police Headquarters, a wind farm in Telšiai district, also the renovation of the cultural heritage – military barracks – building in Kaunas, the reconstruction of Neringa Hotel in Vilnius.

“The pandemic had a strong impact on private investments in construction, with many investors freezing their projects or postponing them to the future. In 2020, we had construction contracts for EUR 40 million. This year, we feel that investors are resuming their investment plans as we have already signed construction contracts for EUR 19 million: one with UAB Tokvila for the construction of a car service facility in Vilnius and the other with UAB Continental Automotive Lithuania for the construction of factory premises in Kaunas district,” said Mr Putrimas.

He says that the company strives to remain a reliable partner for all participants in the construction process; it responsibly assesses and plans its financial resources so that unexpected changes in today’s uncertain market don’t hinder the implementation of the existing commitments.

Investors looking for general contractors this year should carefully assess their reliability as the construction market remains volatile.

UAB Merko statyba solvency and liquidity ratios are among the highest in the market: the current ratio and the quick ratio exceeded 1.5 at the end of 2020. Assets of UAB Merko statyba was equal to EUR 21.3 million, and the equity ratio exceeded 46 per cent on 31 December 2020.

Companies UAB Merko statyba and UAB Merko būstas represent AS Merko Ehitus in Lithuania. The group’s turnover in all the Baltic states and Norway was EUR 316 million, and net profit was EUR 23 million in 2020.