Arete Invest, a fast-growing Czech fund focused on investment in real estate, concluded a new ten-year lease contract in March with plastic components supplier Rompa. This company has fully leased the industrial compound right next to the D1 highway in Vyškov from Arete Invest. Furthermore, work has been launched to expand the building by another 500 m2, which will allow the company to increase capacity, mainly with a development centre and offices.
“It took us two and a half years to include this property into our portfolio, but all the effort is reaping the first results. We have managed to resolve the historical disputes associated with the compound, which undoubtedly increased its value. And now we have extended the contract with the tenant by a full ten years and launched work on further expansion of the building,” said Lubor Svoboda, Co-founder and Chairman of the Administrative Board of the Arete Invest Fund. “We are delighted that almost immediately after taking over management of the industrial compound, we can support the further development of our tenant while increasing the overall value of the property,” added Tomáš Novotný, Member of the Investment Committee of the Arete Invest CEE II Sub-fund responsible for asset management.
Expansion of the compound includes the addition of two office areas for a development centre, social amenities and overall revitalisation of the building. The compound will thus provide Rompa with facilities to increase production capacity, which will cover among other things the delivery of compacts for BRITAX car seats or components for Philips hygienic products.
Arete Invest included the class A industrial compound in Vyškov, right next to the D1 highway, into its portfolio this January; the financial volume of the transaction was about EUR 10 mn. The property currently has a leasable area of 10,400 m2 with the option of expanding by another 3,700 m2, part of which is already under construction. The compound is 100% leased by the multinational corporation Rompa, which operates on plastics processing for the automotive and other industries, as well as household products and packaging materials. Its clients include Siemens, Braun, Philips and Bosch.
The Arete Invest Fund aims to actively manage all the properties in its portfolio and appreciate them through the expansion of tenants, extension of lease contracts, intensification of relations with tenants or the use of as yet vacant land for future construction. The compound is Vyškov is part of the portfolio of the current open-end sub-fund Arete Invest CEE II. The expected value of managed assets in this sub-fund in the course of the forecasted five-year investment cycle is EUR 200 mn. The sub-fund aims for the continuous appreciation of investors’ resources at up to 11% per annum, whereas up to 6% of this makes up the cash distributions paid on a quarterly basis. The current return far exceeds these forecasted values.
