Emira Property Fund has announced a strategic investment in the Luxembourg-headquartered Polish property developer and investor DL Invest Group. With a €55.5 million investment, Emira has acquired an effective 25% initial stake in DL Invest Group, which has a gross asset value of approximately €730 million and a net asset value prior to Emira’s investment of approximately €278 million. Emira’s equity interest has a face value of €101.5 million. Emira has also secured the option to acquire a further interest for €45.5 million. If exercised, this second tranche will result in Emira holding 45.0% of the issued shares of DL Invest Group.
This move will immediately increase Emira’s international investments to 32% of its portfolio — with 19% in the US and 13% in Poland — while 68% remains in South Africa, further strengthening its investment diversification.
Geoff Jennett, CEO of Emira Property Fund, notes the company has timed its market entry with the right deal. “We’ve taken the time to find the right partner, and for us, this is the right way to enter this economy at the right time. This method of capitalising on opportunities in the growing Polish economy aligns with Emira’s co-investment model, which the market is familiar with, where we mitigate risk as a minority partner with solid protections paired with an established local specialist seeking similar outcomes, resulting in informed investment decisions and improved returns.”
DL Invest, a wholly owned subsidiary of the DL Invest Group, controlled by Dominik Leszczyński, has been active in the Polish commercial real estate market for 17 years, since 2007. It boasts a portfolio of circa 50 properties, including large logistics facilities (75%), small retail parks (15%), and mixed-use office/retail spaces (10%), with a strong multinational tenant base.
The capital injection provided by Emira will fuel DL Invest Group’s logistics warehouse development pipeline and "propel it towards becoming a €1 billion business".
For Emira, the investment has an attractive return profile, with a minimum Internal Rate of Return (IRR) on a 5 year basis of approximately 20.9% in Euros, yielding at least 7.2% in cash per year, escalated annually by the Harmonised Index of Consumer Prices for the European Area (HICP) of between 2% and 4%, with the balance on redemption. Emira will fund the investment from its current balance sheet using available debt facilities and proceeds from recently announced disposals.
Emira will have a director’s seat and an observer’s seat on the DL Invest Group board. Emira has committed to a minimum five to six-year initial investment period but, if both parties agree, the partnership can continue beyond this timeframe.
“For Emira, taking a stake in DL Invest Group provides security of sector, country, company, and returns – we’re not only excited about the diversification for Emira but we are also very excited about co-operating with DL Invest Group to maximise what we can achieve by playing to our strengths together,” says Jennett.
