Arete Invest, a Czech fast growing fund focused on investments in the field of real estate, completed its first acquisition of this year. It is a purchase of an industrial estate right by the D1 highway in Vyškov, which is fully leased to Rompa, a supplier of plastic components. The financial volume of the transaction was about EUR 10 million.
“Completion of this transaction took us more than two and a half years but all the effort will surely be rewarding to us as well as to our investors. Clearing old disputes and further planned development should considerably increase the value of the entire estate which newly belongs to our portfolio. We presume that the appreciation has already reached 20 %, now that the transaction has been completed says Lubor Svoboda, Co-founder and Chairman of the Administrative Board of the Arete Invest fund.
The A-class industrial estate covers 10,400 m2 of the leasable area with the option to enlarge it by an additional 3,700 m2; the commencement of further construction in a part of the premises is planned for. The premises are 100 % leased to the multinational company Rompa, which focuses on the processing of plastics for the automotive and other industries and plastics for household products or packaging material. The company´s clients include brand names such as Siemens, Braun, Philips and Bosch. “The real estate is very well situated right next to the highway; it is a part of the local industrial park, and there is a sufficient quality labour force in the region, which, in itself, increases the value of the transaction,“ says Tomáš Novotný, Member of Investment Committee of the Sub-fund Arete Invest CEE II in charge of asset management.
The acquisition of the industrial estate was commenced in June 2015. In the first stage, it involved an overall restructuring of legal and economic relations between the owner, the developer providing the construction and third parties. Only after all the legal and trade disputes had been settled was real estate itself purchased into the fund portfolio. Several law and consultancy firms and banks (e.g. Kocián Šolc Balaštík, Kinstellar, Contractis, Knight Frank, Raiffeisenbank and Havel & Partners) were involved due to the complexity of the whole process.
Like in case of other real estate in the portfolio, the objective of the Arete Invest fund is to actively manage the purchased industrial estate and appreciate it further, for example by means of extending lease agreements, deepening relationships with the lessee or using lots that are still vacant for future construction.
The new real estate in Vyškov has become a part of the the sub-fund of Arete Invest CEE II, which is currently open. The anticipated value of the administered assets of this sub-fund in the course of an expected five-year investment cycle is EUR 200 million. The sub-fund aims at the continuous appreciation of the invested investors´ funds in an amount up to 11 % per year; of which up to 6 % per year is monetary distribution paid out on a quarterly basis. The current return significantly exceeds these notified values. According to the results published most recently, the cumulated gross return of the sub-fund Arete Invest CEE II reached 40.5 % at the end of the third quarter of 2017. As of the same date (i.e. before further appreciation and now before the announced acquisition), the value of the managed real estate in the possession of the fund increased to EUR 54.8 million.
