The Arete Group of investment funds completed the entire transaction and transferred ownership of the complete portfolio of the Arete Invest CEE II subfund in the amount of €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 an almost 100% occupancy rate leased to 17, mainly international tenants. The portfolio has a total leasable area of 125,000 sqm and an 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) 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 fulfil 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 €400 million. At the end of the investment cycle, we want to offer the portfolio to the institutional buyers again."
