Industrial real estate segment targeted by ARETE Industrial
Robert Ides, co-founder of ARETE, was a guest on Slovak Televízia TA3’s Biznis programme. The topic was the industrial real estate segment, which is the focus of our fund ARETE INDUSTRIAL. Among other things, Robert explained: ✅️ Why ARETE decided to invest in this part of the real estate market ✅️ Whether real estate can withstand the crises we are going through and retain its value ✅️ And why the Central European region is one of the best places to invest in logistics and manufacturing real estate You can watch the full interview here: https://www.ta3.com/relacia/28571/priemyselne-reality-maju-perspektivu
Time has proven the stability of investments in industrial real estate
The challenging year of 2022, when bonds or stocks suffered record losses, was, on the contrary, a very positive period for industrial real estate. We are pleased that ARETE decided to invest in this real estate market segment several years ago. In an interview with TREND.sk, our colleague Igor Šnirc explains what led us to invest in this segment, what the current market situation is, and also what investors can expect in the near future. “We believed that there was great potential in this real estate market segment and that demand in the Central European region would need to be satisfied in the coming years. Our assumptions are being fulfilled so far. The rise of e-commerce as the world’s largest market, the inclusion of logistics properties in critical state infrastructure, record construction, and the relative resilience of this segment during times of worsening economic and geopolitical conditions have shown us that we have taken the right path,” describes Igor. https://lnkd.in/ehi7Jv5z
The land is not deteriorating and the industrial business is progressing today
The return of industry to Europe, together with the building of logistics and manufacturing real estate, is bringing skilled jobs back to the less developed regions. It is also a segment of the real estate market that is driving technological innovation and sustainable construction. “Today, industrial parks are full of modern technology, research centers, and offices, which in many cases also revitalize old brownfields. And if we are already building on greenfield sites, we try to follow ESG principles. Of course, sustainability and energy self-sufficiency of our business is important to us,” says Lubor Svoboda, co-founder of ARETE, in an interview with TREND.sk. We have unlocked the full interview from the series, of which we were an expert partner, for you to read. https://lnkd.in/gru_rPty
The return of industry to Europe represents an important opportunity for less developed regions
The return of industry to Europe represents an important opportunity for less developed regions. It is a chance to reverse negative trends, such as the depopulation of border regions. Industry can provide attractive job opportunities that have disappeared with deindustrialization. “We are not talking about manual labor. These jobs will disappear within a few years thanks to automation and robotization. I mean positions with higher added value for people with technical education,” explains Lubor Svoboda, co-founder of ARETE, in a January article for the Slovak magazine TREND.sk. Thanks to global trends, investors and real estate funds sense an opportunity that may not be repeated. Moreover, if declining regions damaged by the departure of industry thrive, the whole economy will also benefit. “Our job is to find suitable investment opportunities or sites and land for new development,” Svoboda adds. We unlock for you the full article from TREND.sk, of which we have become an expert partner. https://lnkd.in/ebCQDZkt
Industrial building boom pulled up industrial fund yields
As a result of the pandemic and the war in Ukraine, industrial and logistics real estate is now perceived as a critical infrastructure of the state. In addition, thanks to high demand and low vacancies of around 1%, this segment of the real estate market can maintain its value even in times of crisis. “At the same time, there is a lot of potential for growth. Due to the energy crisis, lessors are forced to look for cost savings and focus on sustainability and energy efficiency in properties. Older industrial parks are being renovated and modernized,” says Lubor Svoboda, co-founder of ARETE. Thanks to their resistance to crises, industrial real estate can thus play a stabilizing role in an investment portfolio and become a suitable complement to shares or bonds. This is why we invest in stable industrial real estate in Central Europe in our ARETE INDUSTRIAL fund. Over the years, we have built up a broad portfolio of premium tenants and industrial properties, which we continue to expand through acquisitions and our own development. Read more in the unlocked text from the Slovak TREND.sk, of which we were an associate partner. https://lnkd.in/e_nyqCTb
Industrial real estate is a new port of call for investors
The pandemic, supply chain crisis, and the war in Ukraine are reflected in the economy in terms of unprecedented inflation, rising debt, and interest rates unseen in the last 10 years. Meanwhile, the industrial real estate segment is reflecting this trend in increased construction costs, labor, and rising transportation and production costs. Nevertheless, demand for new industrial parks, halls, and logistics facilities is still unsatisfied even as both investors and tenants consider their investments and costs more carefully. Current market developments are still opportunities to be seized. “The development of modern technology and automation will be key. Technologically advanced companies need a background of educated and capable employees, who in our case also draw on the historical traditions of our countries. The Czech Republic and Slovakia are attractive locations, we just need to take advantage of this and create favorable and, above all, stable conditions for companies,” explains Robert Ides, co-founder of ARETE, in an interview with TREND.sk. The attached article is the first in a series of texts on alternative investing, of which we have become a partner. https://lnkd.in/ecRbWx_Q
Invest In A Shopping Mall From 20 Euros?
Our colleague Dr. Josef Vojta was a guest of Lenka Buchláková in the programme Ekonomika+ on Televízia TA3. The following topics were discussed: why start investing, basic differences in investing in an investment apartment and an investment fund, what to pay attention to when choosing an investment fund, investing in real estate versus investing in shares. You can watch the full session here: https://www.ta3.com/relacia/27628/investovat-do-nakupneho-centra-od-20-eur
CIJ Awards Slovakia 2022 – Best Asset Management Company
On yesterday’s gala evening in Bratislava we won the Best Asset Management Company in Slovakia category at the renowned CIJ Awards! We were delighted to receive the award, as we see it as a reflection of the hard and continuous work of the entire team, which is the core of the ARETE Group. Our third fund is once again the most profitable real estate fund on the Czech-Slovak capital market. The Slovak market also plays an important role in delivering our excellent results, as we have made significant purchases, especially in the last period, to expand the fund’s portfolio. In doing so, we support, among other things, the development of the Slovak economy and contribute to the long-term and sustainable development of the region. We see Slovakia as an attractive destination for investing and together with our existing and future tenants we will continue to strengthen our position in the Slovak market. In a strongly competitive market, the committee appreciated, among other things, our investment strategy, our active approach to portfolio management, the unique competence of our team in purchasing and developing industrial parks, and, last but not least, the repeatedly confirmed appreciation and above-average returns paid to our investors. This is the only way we are able to beat inflation even when it reaches sustained high levels. Success and awards are also a commitment to us. We are doing our utmost to repeat our investment success in the years to come. At the same time, we are confident that ARETE’s investors and partners will continue to stand firmly by our side. Thank you all very much for your support and CIJ EUROPE for the excellent organization. We appreciate the award immensely.
The future of alternative investments belongs to industrial parks
Alternative investments are an increasingly attractive topic for qualified investors. But what is worth investing the saved funds in? Wine? Antiques? Cryptocurrencies? All have their own drawbacks. But what about industrial parks? Dr. Josef Vojta wrote about their importance as an attractive alternative investment in the Slovak magazine TREND.sk.
Real estate funds of the ARETE Group rank at the top of the market in terms of returns
ARETE INDUSTRIAL announced the purchase of a second industrial hall in Slovakia. The Belushi site, like the previous acquisition in Kežmarok, also boasts a long-term tenant with highly specialised production. The fund’s ability to capitalise on its own investments is among the highest in the region. The next strategy will be to look for purchasing opportunities in new markets, says Lubor Svoboda, founding partner of ARETE Group. The target value of ARETE INDUSTRIAL has been communicated at EUR 400 million. Where are you currently on the road to this goal? You are right, we are targeting our fund to have a value of assets under management of EUR 400 million. We are currently about a quarter of the way there. The momentum in terms of capital raising and investment opportunities gives me a clear signal that we should reach our target within the set timeframe. In any case, we always pay attention to the quality of the assets we buy, the tenants and, of course, the return on the fund that we communicate to our investors. And because ARETA’s key managers are also investors in the fund, we want to achieve an appreciation of over 10% p.a. That is our main objective. The demand for industrial real estate is growing and so is the yield on it. Does this complicate the search for acquisition opportunities? Liquidity in the industrial property market is good. The positive mood is also reflected in the massive year-on-year increase in the number of transactions. Objectively, there are fewer buying opportunities on the market. On the other hand, we are recording the highest volume of acquisition opportunities for our fund in recent years. This is due to the fact that we are able to find investment opportunities outside the open market and that we are able to develop new industrial parks ourselves. Our comprehensive approach has benefited greatly from the very strong demand for rental space in industrial properties. What are your fund’s immediate acquisition plans? Unfortunately, I can’t be too specific. In any case, we would like to double the value of the assets in the fund in 2022 compared to the end of 2021. I can also reveal that the Czech Republic and Slovakia will continue to be our key markets. We would also like to add one or two industrial parks in Germany or Austria. How is investor interest in putting money into your funds changing? ARETE funds are among the most profitable in their segment in Central Europe. I am pleased that the interest in investing in our current fund is continuously very good, even after the beginning of the Ukrainian crisis. Investors are looking for products that target above inflation, which our product fulfils. At the same time, it comes with very low volatility and a readable economic prospectus. The combination of the above is attractive to investors. This applies to private and institutional investors at the same time. Has the war in Ukraine affected the perception of Slovakia by foreign investors? We are dealing with various partners and investors from practically all over the EU and so far we have not encountered any of the entities changing their view of the stability and prospects of Central Europe, especially the Czech Republic and Slovakia, in a negative way. What was the Fund’s appreciation in 2021 and what is your forecast for this year? Thanks to the excellent work of the entire portfolio management team, we achieved a high appreciation of more than 24% last year alone. Given the above, it is difficult for me to predict the appreciation for this year, however, all the newly executed transactions and the portfolio as a whole meet the investment parameters and strategy of the fund. Thus, I believe that 2022 will once again be an above-average year in terms of asset appreciation. At the end of last year you established cooperation with Partner Asset Management. Why are institutional investors and distributors important to you? The fund targets both institutional and private investors. The cooperation with Partners Asset Management, which we value very highly, is a logical outcome of our activities aimed at increasing the involvement of institutions both in direct investments in the fund and in the distribution of the fund’s investment shares. In my opinion, we are making the most of the potential of the combination of private and institutional money. Increasingly, we are turning our attention to investors from German-speaking countries. The postcovid time war period and the current crisis in Ukraine have greatly destabilised supply chains. Do you see an increased need to build up safety stocks? Definitely yes. To give an example. Prior to the development of one of our industrial parks, we agreed with the tenant that only the first phase of the project would be implemented and that the second phase would be implemented within approximately two years. Just before signing the contract documents, the tenant’s representatives informed us that they needed to expand the warehouse space immediately. As a result, both phases were implemented at the same time. We have several analogous examples. At the same time, in certain regions, we register a really significant excess of demand for storage space over supply. The consequence is that rents are rising. Do you see the high prices of building materials or the lack of them as a bigger problem? We currently have several industrial parks under construction, and so far the supply companies have managed to secure materials in sufficient quantities. Although we believe that the problems in the materials and raw materials market are short-lived, higher prices are likely to persist. We have already reflected this in our capital budgets. Given the size of our portfolio and the fact that only a portion of our properties are newly developed, higher prices for certain materials will not have a material impact on the performance of the Fund’s portfolio as a whole. How do you implement sustainability principles into your investment strategy? We are preparing a comprehensive ESG
