M7 Real Estate (“M7”), a pan-European investor and asset manager, has announced that it has acquired a portfolio of 11 light industrial assets in Hungary and the Czech Republic, on behalf of M7 CEREF I (the “Fund”), from a joint venture between Partners Group and Cromwell Property Group.
M7 has now acquired 19 properties with a total value of circa EUR 127.5 million on behalf of the Fund, which invests in Core Plus and high yielding regional opportunities across CEE, since the final close was completed in April 2017. The target raise of EUR 60 million of investor capital was reached and a senior debt facility of EUR 68.5 million entered into with Starwood European Real Estate Finance.
This latest portfolio comprises 209,832 sqm across 276 units, with a 23.6 percent vacancy. Seven of the assets are located in Hungary, while the remaining four are in the Czech Republic.
The portfolio provides M7 CEREF I with both stable income from an existing tenant base, and also offers significant opportunities to create further value through the leasing of vacant units, targeted capital expenditure and lease extensions with existing tenants to enhance the WAULT (weighted average unexpired lease ter).
David Ebbrell, Chief Investment Officer at M7 said: “We believe that a revitalised asset management strategy for this portfolio will enable us to capitalise on current occupier conditions in the region. The equity we raised in April has been efficiently deployed as we continue to secure properties where significant capital and income upside can be achieved which will deliver strong returns for the Fund.”
Karol Pilniewicz, Head of CEE at Cromwell Property Group, commented: “We are delighted to have completed the disposal of the Hungarian and Czech portfolio. The sale of this portfolio is in line with the business plan we had agreed with our investor prior to the acquisition of the fund. Since acquiring the portfolio in early 2016, we have generated an attractive 26 percent return for our partner on this portfolio.”