ARETE Group and Cromwell European REIT signed a purchase agreement where ARETE INVEST CEEII sells its overall portfolio for €113.2 million at net operating income yield of 6.7 percent. The transaction is expected to close in Q1 2021, allowing for the full fiscal year 2020 closing and smooth handover period.
The portfolio comprises 11 logistics and light industrial properties in the Czech Republic and Slovakia with almost 100 percent occupancy rate leased to 17, mainly international tenants. Its overall leasable area of 125,000 sqm, additional 140,000 sqm for further development and future growth, ranks this transaction as second largest in the Czech Republic while it represents almost 25 percent of the overall industrial investment transactions volume concluded in the Czech Republic in 2020 to date.
“This step represents a significant milestone in our fund strategy and proves that our defined target in 2016, to build and compile a portfolio of quality logistics and light industrial assets throughout a 5-year investment cycle, is now delivered on. It also clearly demonstrates that through a consistent approach, the portfolio meets high-quality standards demanded by institutional investors such as Cromwell European REIT, a listed and publicly traded REIT on Singapore stock exchange. Consistency and transparency always were and will remain to be key fundamentals of our strategy and we intend to retain and further enhance those in our third fund, ARETE INDUSTRIAL, which currently initiated its investment phase,” commented Robert Ides, co-founder of ARETE group.
“As proven in our second fund, we are confident that again we will confirm our ability to deliver on strategy, meet expectations of our investors’ base in the upcoming years and compile a much larger and coherent portfolio of high quality industrial and logistic assets in the CEE region with its target value of at least €400 million. Our third fund should, even more, elevate the quality of assets and meet the highest standards of institutional investors. I’m really proud we will be delivering on our promise and as the only fund in the Czech Republic and Slovakia, executing on the divestment of an overall fund’s portfolio,” added Lubor Svoboda, co-founder of ARETE Group.
Karol Pilniewicz, Head of Central Eastern Europe (CEE) for Cromwell Property Group said: “We are delighted to be able to support CEREIT on this transaction. We are actively looking for acquisitions for a range of different capital partners, mainly in Poland, the Czech Republic and Slovakia with a particular focus on core-plus, value-add and opportunistic opportunities”.
With JLL‘s forecast volume of €1.66 billion invested into the Czech Republic and Slovakia this year, almost 30 percent of the transacted volume was allocated into logistics and industrial properties.
“It is a trend of recent years that real estate investments in both countries are strongly focused on prime strategically located industrial and logistics properties with a combination of strong covenants and long leases. ARETE INVEST CEE II Portfolio stands out as an investment product and we are proud to have worked closely with the ARETE team ensuring maintaining the momentum of one of the key deals of 2020 through this challenging pandemic year. The transaction represents one of the largest industrial transactions this year and is testament to the solid and resilient nature of the industrial/logistics market in CEE,” commented Mike Atwell, Head of Capital Markets CEE for JLL. JLL team facilitated the transaction for ARETE.
