The end of the year marked by positive news from the ARETE group
The ARETE Group fund has again been the most profitable real estate fund in the Czech Republic for a long time (data as of 31.12.2020) According to independent evaluation of Hospodářské noviny monitoring data of real estate funds operating in the Czech Republic, the fund of the ARETE Group has long brought the highest appreciation to its investors. The ARETE INVEST Sub-fund CEE II reigns supreme in the overall long-term statistics – it has the highest average annual return throughout the fund’s existence (17,66%). Combined with one of the lowest loan-to-value ratio (LTV) of 53 % and with a strategically diversified portfolio, the ARETE INVEST Sub-fund CEE II is also clearly the most stable fund of all the funds assessed. The sub-fund confirmed its profitability by successful divestment of the entire portfolio in March 2021. It results from the common project of Hospodářské noviny and the Institute for Strategic Investments at Faculty of Finance and Accounting at the University of Economics, Prague. Since 2017, it provides an overview of data on real estate funds available to Czech investors. Newly published data processed financial information valid at the end of 4H2020. The ARETE Group currently has a new fund of qualified investors, ARETE INDUSTRIAL SICAV open, which focuses on industrial properties in the CEE region. Its goal is to build on the success of the previous two funds and right now it allows investors to subscribe the investment shares of the fund. An overview of all independent evaluation results is available on the website: https://top-realitni-fondy.ihned.cz/
The third fund of the ARETE group has secured bank financing from the Raiffeisen banking group
On July 1, the ARETE Investment and Real Estate Group signed an agreement with Raiffeisenbank to draw a EUR 30 million umbrella credit line. The funds will be used to accelerate the growth of the ARETE INDUSTRIAL SICAV fund’s portfolio through prepared acquisitions and new construction of industrial real estate while maintaining a safe and conservative LTV ratio. “We are building a new portfolio of the fund and the quality of the purchased properties is reflected in the financing actually provided. The EUR 30 million credit line confirms the successful strategy of our funds, which is currently continuing in our third fund – the confidence of the Raiffeisen Group clearly underlines this. Funding in this amount is only the first step, which is rather a foreshadowing of the fund’s ambitions to manage assets totalling over EUR 400 million. Due to ongoing acquisitions of investment projects, I believe in increasing this credit line at the turn of this year, “said Lubor Svoboda, co-founder of the ARETE Group. “The financing provided by the strong Raiffeisen banking group is a continuation of our cooperation, which began with the financing of our second sub-fund. The bank’s trust brings our fund high stability and the security of sufficient capital resources. It enables the smooth completion of prepared acquisitions and the acceleration of the pace of forming the fund’s portfolio. We can thus make good use of all the opportunities we currently have on the market. At the same time, we want to continue to maintain a safe ratio of bank loans to the value of assets (LTV). Especially at present, we clearly consider our lower debt strategy to be our competitive advantage,” adds Robert Ides, the second co-founder of the ARETE Group. The aim of the concluded contract is sophisticated portfolio financing of all new transactions in the fund and ensuring greater flexibility in financing of new developments. The entire transaction was legally supervised by renowned law firms – on behalf of ARETE it was a legal office Kocián Šolc Balaštík. Třetí fond skupiny ARETE má zajištěno bankovní financování od bankovní skupiny Raiffeisen | Hospodářské noviny (iHNed.cz)
Production halls are bursting at the seams
The economy is booming and modern industrial estates are making money like never before. They have historically the highest occupancy, a record volume of concluded leases and the construction of other new warehouses and production halls continues rapidly. For investors, this is one word… euphoria. “The pandemic has led manufacturers to struggle with a shortage of components from Asia. This will lead to the fact that supply and logistics routes must be shortened,” commented Lubor Svoboda for Novinky.cz. Full article here (only in Czech): https://www.novinky.cz/ekonomika/clanek/ekonomika-roste-vyrobni-haly-praskaji-ve-svech-40362481#seq_no=2&source=hp&dop_id=40362481&dop_ab_variant=0&dop_req_id=tYyvaZGC4Zi-202106080601&dop_source_zone_name=novinky.sznhp.box&utm_campaign=&utm_medium=z-boxiku&utm_source=www.seznam.cz
With our long-term annual return above 10% we are better than the most funds on the Czech real estate market
With our long-term annual return above 10% we are better than the most funds on the Czech real estate market. “Those who invested in the fund with us first doubled their money. However, even those who entered last will still be paid about twice the annual return, which is achieved by money market funds in the Czech Republic, for example, ”says ARETE Group co-founder Lubor Svoboda. “These are real numbers that are not artificially prepared by any revaluations or other opinions of fund managers. We are following the path of confirming fair value by selling entire portfolio on the market,” he adds. We are now launching another real estate fund, which again relies on logistics, warehouses and light production halls, which, however, will be many times larger than in the previous fund. We should thus significantly beat the expected rate of inflation within the investment horizon. The interview was published in a printed version of today’s Hospodářské noviny. You can also read the whole interview under this link (only in Czech): https://lnkd.in/dE4mpKr
We, in ARETE, are his proud partner.
He is still experiencing significant career progression. Last year after significant improvement, golfer Ondřej Lieser finished 179th in the World golf rankings. After the triumph on the Challenge Tour, this year he owns full playing card on the most prestigious tour of the old continent, the European Tour, and what’s more, in July he should represent the Czech colours at the Olympic Games in Tokyo. He told Czech Television what was behind his improvement. You can watch the whole interview with Ondřej at this link (only in Czech): https://lnkd.in/gGjeEnd
Industrial real estate is built on solid foundations
The real estate market across Europe was under pressure last year, but not all segments declined due to crisis. The most resilient class of real estate in the crisis proved to be the industrial ones. “For example, compared to the office or shopping center markets, where there was a decline last year, the industrial real estate segment continued to grow steadily,” said our colleague Igor Šnirc for the Slovak magazine Trend. Information about volume of investments in 2020 compared to previous year and what was the total volume of executed transactions, you can read in this article (only in Slovak): https://lnkd.in/d2HgcTq
ARETE Group awarded CIJ Awards Slovakia 2020 for new industrial park near Košice, Slovakia
The investment group ARETE, which includes real estate investment funds, won the 2020 CIJ Awards Slovakia in the category Best Warehouse Development category above 10,000 sqm. ARETE Park Veľká Ida is an excellent industrial park near the second largest Slovak city, Košice, which was completed last year. This highly specialized hall with a unique architecture of the industrial and administrative part was built according to the assignment of the tenant, Dominion Steelcon A / S Slovakia, a member of the Dominion Group, which is a global manufacturer of demanding technological equipment. The property with an area of 12,000 sqm represented an investment of EUR 13 million. You can read the full article here (only in czech): https://tiskovezpravy.ihned.cz/c1-66901290-skupina-arete-ocenena-cij-awards-slovakia-2020-za-novy-prumyslovy-areal-u-slovenskych-kosic
CIJ Awards Slovakia Best Warehouse Development Over 10 000 Sqm Of The Year 2020
“And the CIJ Award Slovakia 2020 in the category Best Warehouse Development over 10,000 sqm goes to … ARETE” As part of the annual CIJ Awards Slovakia ceremony, we won the very prestigious category Best Warehouse Development over 10,000 sqm. This is the second CIJ Award, which was awarded to us for the year 2020, and this time in a category in which there has been unprecedented competition for a long time. CIJ Awards are longest-running and also the most important commercial property event for Slovakia, this year for the sixteenth time. Due to the pandemic situation, co-founder of our ARETE Group Robert Ides accepted the award in a more intimate atmosphere. Immediately after the announcement of results, the co-founder of our ARETE Group Lubor Svoboda shared his impressions: “The award, we were given today for the project in Veľká Ida, is extremely prestigious. We won the competition of the most important development companies. I would like to thank the entire team that participated in the project. We have shown that in addition to the responsible management of existing parks, we are able to implement the new development project in accordance with the highest standards and at the same time to bring interesting architectural elements to otherwise somewhat monotonous industrial buildings.” https://cijeurope.com/en/cij-awards-slovakia-2020-winners/post.html?ct=t(CIJ_Daily_News_CZ10_29_2014)
One of the largest real estate transactions completed: ARETE INVEST CEE II portfolio for 3 billion already in the hands of Cromwell!
The ARETE Group, which includes real estate investment funds, completed the entire transaction and transferred ownership of the complete portfolio of the ARETE INVEST CEE II subfund in the amount of EUR 113.2 million (CZK 3 billion) to Cromwell European REIT (CEREIT) a publicly traded real estate investment trust listed on the Singapore Stock Exchange. The Portfolio comprises 11 logistics and light industrial properties in the Czech Republic and Slovakia with almost 100% occupancy rate leased to 17, mainly international tenants. The portfolio has a total leasable area of 125,000 sqm and additional 140,000 sqm for further development and future growth. As at 31 December 2020, Cromwell Property Group had total assets under management of €7.1 billion (CZK 184,6 billion) of across Australia, New Zealand and Europe. “In accordance with the agreements concluded in December, the transaction for the transfer of the entire real estate portfolio of our second subfund was completed today and the ownership passed into the hands of Cromwell European REIT. Although we are still far from standard conditions due to the pandemic, the transaction was completed on time. We thank the entire Cromwell Group team for their very professional cooperation throughout the transaction,” said Robert Ides, co-founder of the ARETE Group. Simon Garing, CEO of the Manager of CEREIT, commented: “We are pleased to be able to complete the acquisition of the portfolio, despite continued pandemic disruptions across Europe. Our current focus is on increasing our weighting towards the logistics and light industrial sector and this acquisition takes us to 38%. Importantly, CEREIT now also has a presence in two new attractive high-growth markets. I’d like to thank the transactions and asset management teams at our sponsor, Cromwell, as well as Robert and everyone at ARETE for working positively to make this transaction happen.” “We have seen almost five years of hard work behind us. Looking back, we made some of the right decisions. Everything was started by a thorough analysis of all real estate segments, from which we correctly selected the segment of quality logistics and light industrial properties. We consistently adhered to the given strategy and performance parameters required by institutional investors,” added Lubor Svoboda, co-founder of the ARETE Group. “I would like to congratulate the entire ARETE team on completing this landmark industrial transaction during the pandemic. We are seeing a continual increase in investor demand into the industrial sector and particularly a high quality portfolio across countries such as the ARETE portfolio. The underlying market dynamics and growth of e-commerce has led to this strong growth of demand from institutional investors. ARETE team has demonstrated the ability to create an investment product that ideally suits large scale international investors. The transaction further reflects investor confidence in the industrial and logistics market in CEE. We really appreciate our long-term close cooperation with the ARETE team and we are glad that we are preparing other interesting transactions for the third ARETE fund together,” commented Mike Atwell, Head of Capital Markets CEE for JLL. “After a careful analysis, we have evaluated that the situation on the light industrial and logistics real estate market is stable and the investment prospectus is interesting for the next investment cycle. In 2015, worldwide industrial real estate accounted for less than 8 percent of the volume of transactions, last year it was almost 25 percent. Last year confirmed the longer-term trend that the price of industrial real estate has become independent of the economic cycle. Although almost 10 million sqm of new rental space was completed across Europe in 2020, occupancy even reached an all-time high in January this year, when 95.5 percent of all available space was leased. This is the most of all monitored real estate segments,” explains Robert Ides and continues: “Our third fund is now in the investment phase, we want to fulfill our strategy and build a much larger and coherent portfolio of high quality light industrial and logistics properties in CEE, with a targeted value of at least EUR 400 million. At the end of the investment cycle, we want to offer the portfolio to the institutional buyers again.”
“And the winner is…ARETE”
We bring you an exclusive video from the non-traditional ceremony of the prestigious CIJ Awards Czech Republic 2020, category the Best Asset Management Company. The award for ARETE was accepted by co-founder Robert Ides. The video also captures his first impressions and emotions after the ceremony. “In the strong competition of Accolade Holding and Mint Investments, I really appreciate this award. This is a great success for all of us,” Robert Ides said immediately after the results were announced. The CIJ Awards are longest-running commercial property awards event in the Czech Republic. This year was the 20th years.
