Arete investment group opening its third real estate fund to follow on from the success of the two preceding funds
The Arete investment and real estate group today announced the opening of now its third qualified investor fund, based in the Czech Republic and operating under the supervision of the Czech National Bank. This third fund is to follow on from the successful history of the preceding funds, with the first fund having been closed three years ago and investors paid off with a total gross appreciation of 120%, while the second fund has fulfilled its strategy with its current gross appreciation of over 90%. The new Arete fund will both invest into completed industrial real estate in Central and Eastern Europe and also itself construct new logistics and manufacturing buildings. Its portfolio target value should approach EUR 500 million during the anticipated six-year investment cycle. “After six years of operation of the Arete group, we can be proud of the successes we have achieved. We significantly appreciated the funds invested in the first fund within a very short time, and succeeded in formally closing it, something quite exceptional in the Czech market. We subsequently focused all our energy on the second fund, focused on industrial real estate, and this is continuously achieving above-standard results. We believe that our third fund will follow on from these successes,“ stated Lubor Svoboda, one of the two Arete group co-founders. “In spite of the slowing of industrial growth in the Czech Republic and the short-term volatility of the stock markets, the overall economic situation in Central Europe is conducive to the further development of logistics and manufacturing. Hence the investment strategy underpinning our new fund once again focuses precisely in this direction. Through combining an aggressive investment strategy into already existing revenue-generating industrial real estate with the construction of new sites, we want to follow on from our historical performance in this next fund. More and more investors consider investment in funds focusing purely on industrial real estate to be a far more profitable alternative to unsecured corporate bonds, and so interest in this type of investment is significantly growing. The attractiveness of this type of asset in the Czech Republic and Slovak Republic is also demonstrated by the severalfold greater interest from global players and investment groups,” added Robert Ides, the second Arete group co-founder. The third Arete group fund is to focus on industrial real estate with stable yields in combination with construction, specifically of class-A logistics and manufacturing real estate in Central and Eastern Europe. The anticipated investment horizon is six years. The portfolio target value should approach CZK 12 billion and the portfolio should include over 600 000 m2 of leasable area and over 300 000 m2 of building land for further construction. The new fund was formally established last year, but new investor entry is only commencing now. The investment cycle of the first Arete fund culminated at the end of 2016 with the sale of the whole residential portfolio, made up of several hundred apartments, to a foreign financial investor. The financial and legal closing process for this fund was completed in early 2017, and it was one of the first ever successfully closed funds in the Czech Republic. The fund achieved gross appreciation of 120% over the two years of active management. The second Arete fund was established in 2016, and gradually built up a homogenous portfolio of industrial real estate. Its objective is to continuously appreciate the invested funds of its investors at over 11% per year, while the actual rate of return far exceeds this announced value. The most recent, unaudited results for 2019 show total gross appreciation of over 90%. The entry of investors into this fund was closed in 2018.
New Arete real estate group fund to purchase and construct warehousing space worth billions
The domestic Arete group is launching its third real estate fund. It is planning the purchase of warehousing space and industrial halls in both the Czech Republic and throughout Central and Eastern Europe. It will also be launching its own developer projects for the first time. The portfolio target value should approach CZK 12 billion. “In spite of the slowing of industrial growth in the Czech Republic and the short-term volatility of the stock markets, the overall economic situation in Central Europe is conducive to the further development of logistics and manufacturing. Hence the investment strategy underpinning our new fund once again focuses precisely in this direction,” stated Arete co-founder Robert Ides.The new fund will be targeted at private and institutional investors. The minimum investment is to be EUR 200 000 (CZK 5 000 000). The first investors have already placed tens of millions of euros into the fund. Arete is also anticipating the use of bank loans of approximately the same amount as the total volume of own funds.Specialists in commercial real estate say that the new fund’s strategy and focus make sense. “The market has sufficient reserves of both capital and demand from both foreign and domestic investors for this type of real estate. If we leave aside the acquisition of any already existing larger portfolio, the indicated volume can only be invested in several countries at once, and so the focus on the Central and Eastern Europe region is a logical one,” commented Alexander Rafajlovič of the investment team at the consultants Cushman & Wakefield.The new fund plans with a six-year investment cycle. Its ambition is to accumulate 600 000 square metres of halls for leasing and 300 000 square metres of land for further construction. Arete’s Ides anticipates the completion of the initial acquisitions this summer.“Considering last year’s construction of almost four million square metres in the Central and Eastern Europe region, the ambition of 600 000 square metres is definitely possible,” said Ferdinand Hlobil, responsible for international industrial transactions at Cushman & Wakefield.The investment cycle for the second fund is currently coming to an end in the Arete group. It has appreciated investors’ capital by 90 percent since its opening in 2016. This second fund manages 125 000 metres of leasable space in the Czech Republic and Slovak Republic, including the international logistics headquarters of the C&A clothing chain.According to information on the E15.cz server, Arete is currently finalising negotiations for the sale of this portfolio to the American investment giant CBRE Global Investors. Neither Arete nor CBRE GI have commented on this information.The industrial real estate market is very active. The German Garbe Industrial Real Estate has announced its entry into the Central and Eastern Europe market. This company has constructed halls for Amazon in Germany, for example. Star Capital is one of the new Czech players to begin constructing industrial halls.More at https://www.e15.cz/byznys/reality-a-stavebnictvi/novy-fond-realitni-skupiny-arete-bude-nakupovat-a-stavet-sklady-za-miliardy-1367431
Results HN – 3Q2019
The fund of the Arete Group is the most profitable real estate fund in the Czech Republic. According to independent statistics 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 sub-fund CEE II of Arete Invest reigns supreme in the overall long-term statistics – it has both the highest average annual return throughout the fund’s existence (20.43 %) and the highest average annual return over the last three years (25 %). At the same time, the sub-fund CEE II has one of the lowest loan-to-asset ratios out of all the monitored funds of qualified investors with loans. This is based on data from the web portal Investujme – a joint project of Hospodářské noviny and the Institute for Strategic Investments at the University of Economics in Prague. Since 2017, it provides an overview of data on all types of real estate funds available to Czech investors. The newly released data processed financial information valid at the end of the third quarter of 2019. An overview of all independent evaluation results is available on the website: www.ihned.cz/investujme.
Arete Group starts construction of a new manufacturing hall for leading european manufacturer of steel chimneys near Košice
At the beginning of November, Arete Epsilon SK, member of real-estate investment group Arete, completed acquisition of land plots in an industrial park in Veľká Ida at the border of Košice city, a regional capital of East Slovakia region. This industrial park allowing investors to draw governmental subsidies has been very appealing to international manufacturing companies long term. The Arete group has started construction of the new production hall for the Danish company Steelcon Slovakia shortly after the acquisition. It should start production of steel industrial chimneys mainly for export during the second half of 2020. This highly customized production hall worth almost 13 million EUR confirms attractiveness of Slovak investment market. After completion of the hall, Arete group will expand its presence on the Slovak market and will grow its portfolio of production and logistic properties to 125,600 sqm in total. „Steelcon Slovakia is a very reputable and stable partner to us, who understands Slovak market benefits and considers its decision to stay in the region for at least next 15 years as very strategic,“ says Tomáš Novotný responsible for strategic development and asset management within Arete group.
Fashion e-shop will get a new warehouse in western Slovakia
The new warehouse will provide 60,000 square metres on several levels. The Czech investment fund Arete Invest, focusing on investment in real estate, is building a new warehouse for the international chain of fashion e-shops Factcool in the industrial park at Nové Mesto nad Váhom. “The Slovak market is an advantageous investment destination for our fund and our investors,” said Lubor Svoboda, co-founder and chairman of the administrative board of Arete Invest, as cited by the SITA newswire, adding that the investors are expecting upper standard yields. https://spectator.sme.sk/c/20905939/fashion-e-shop-will-get-a-new-warehouse-in-western-slovakia.html
Arete Invest Is Expanding A Hall For Forschner In Uherské Hradiště
the Arete investment group, which includes the newly established Arete Industrial fund, has commenced construction work to expand the existing production hall by approx. 4200 m2in the industrial and logistics park in Uherské Hradiště. “With this development in Uherské Hradiště we are fulfilling our strategy to broaden this site on the expansion lands we have had since the start of the acquisition,” comments Lubor Svoboda, co-founder of the Arete group, adding: “This will provide us with another modern hall which is being built according to the latest technological and environmental standards, which will enable the tenant to maintain the high standard of its production process, optimise operating costs and improve its economic results.” The new hall should be completed at the turn of the first and second quarter of 2020. The project includes, amongst other things, the construction of modern clean operations for the manufacture of components for electric vehicles in accordance with the strictest international standards, covering an area of approx. 680 m2, including LED lighting, with constant temperature and humidity. The construction project naturally includes rainwater infiltration and air recovery. Other integral parts of the hall include modern office and sanitary facilities for employees. The expansion for Forschner will cover a total area of 4 300 m2. The Class A industrial complex in Uherské Hradiště with its excellent transport links to Slovakia and south Moravia has been part of the Arete Invest portfolio for three years now and its 100% leased by Forschner, which has grown from a German family firm to become a multinational company. It specialises in electromobility, the production of cable and electromechanical systems and other components intended especially for the automotive industry. Its clients include Audi, Continental, Daimler, Volkswagen, Philips and Bosch.
Arete Park Nové Mesto has expanded with a new hall for almost EUR 12 million
Nové Mesto nad Váhom / Prague, 3 June 2019 – Arete Invest, a fast-growing Czech fund focusing on investments in real estate, obtained the occupancy permit for a new hall in its Slovak industrial and logistics site in Nové Mesto nad Váhom in May. This investment into a new central warehouse for the Central and Eastern Europe region for the Factcool group, an international network of internet fashion stores controlled by the HB Reavis group, reached almost EUR 12 million. The new warehouse, in which Factcool will operate from June, offers 17 300 m2 of storage area. Together with the construction of the new hall, the infrastructure of the whole Nové Mesto site was also expanded, meaning 49 000 m2 is now prepared for further immediate construction. “The Slovak market is strategic for the further development of our fund. After the acquisitions we made here in the past two years, we have started down the road of our own development. We completed the new storage hall for Factcool on time, without exceeding the budget and at the required level of quality. This shows we also understand how to expand our real estate portfolio through our own construction efforts. This is important for us because we are an active investment fund, and this is how we are succeeding in significantly increasing value for our investors,” said Lubor Svoboda, co-founder and chairperson of the administrative board of the Arete Invest fund. “We chose Arete Park Nové Mesto as the centre for our further expansion because of its fantastic location. The locality is unique thanks to workforce availability as well as access to the motorway network. Our new central warehouse in addition reflects all the modern trends in industrial real estate,” says Jan Skopeček, director of FC ecom, s.r.o. in the Factcool group. The Factcool group will operate in the new, modern warehouse by the D1 motorway in Nové Mesto nad Váhom from 1 June, and will gradually consolidate its operations for the Central and Eastern Europe market to this locality. Construction of the building was commenced last July. With an area of 17 300 m2 the hall offers a usable storage height of up to 17.3 metres. The lease contract has been concluded for 10 years from the completion of the hall. The new tenant will create over 100 jobs in the park. Arete Park Nové Mesto is to expand further Demand for storage and production spaces in Slovakia is showing stable growth, and in the Nové Mesto na Váhom region the leasable space vacancy rate is actually significantly lower than in the rest of the country. Arete Park Nové Mesto therefore now has another 49 000 m2 of space with a building permit, ready for immediate construction. All the necessary infrastructure for new buildings was also built together with the construction of the hall for Factcool. “Talks are already under way with other tenants who could occupy the remaining free areas for construction,” said Tomáš Novotný, member of the investment committee of the Arete Invest CEE II Sub-fund responsible for asset management. The site at Nové Mesto nad Váhom was purchased by the Arete Invest fund from Prologis two years ago. The financial value of this transaction ranked it among the largest real estate transactions of 2017 in the industrial sector in Slovakia. The completed part of the site is 100% leased by C&A, Raben Logistics and Vetropak Nemšová with an average lease duration of 5.3 years, a unique value for a purely logistics locality.
Arete Invest CEE II – a fund with the highest average yields
Arete Invest got ahead of the competition with its subfund Arete Invest CEE II and placed first as a fund with greatest average yields over the period of last 3 years amounting to 30% p.a. Carefully selected portfolio and its diversification, low debt ratio, ever-expanding assets and its own construction projects with presence in two countries – this combination makes Arete Invest the most profitable and stable investment fund, which is able to withstand competition of older and bigger funds. https://sdeleni.idnes.cz/ekonomika/arete-invest-cee-ii-fond-s-nejvyssi-prumernou-vynosnosti.A190530_140129_zpr_sdeleni_rest
New member of Arete team strengthening link to Slovakia will be Igor Šnirc
Arete reality group expanded its team with a new colleague Igor Šnirc. He will be in charge of Slovakian market in regard to existing and future assets and acquirements. Already during his studies, he held position in the international advisory firm of Jones Lang LaSalle as a consultant for the whole of Slovakia where he realized transactions with Lidl, Continental AG or Orange among others. https://www.investujeme.cz/tiskove-zpravy/posilou-tymu-arete-a-spojkou-pro-slovensko-se-stal-igor-snirc/
Arete Invest and EY held conference for investors
The conference for investors was held in the EY company headquarters of which Arete transparent fund is a partner. The main theme this year was „Financing and Costs of Investment Capital“ which was taken up by Robert Ides, the cofounder of Arete Invest, with partners from the EY David Zlámal and Lucie Říhová and other fellow experts on capital, debt and fiscal investment. „I think we have successfully followed up on the last year’s conference and established a tradition of an expert conference applying global lenses to development and behavior of the Czech market. Very open discussion aiming to offer knowledgeable opinion on the reality market and various financial instruments is probably an aspect most appreciated by the participants and we believe this will continue. https://finparada.cz/zprava_banka.aspx?ID=17600
