Fund management company Redside has closed the largest industrial transaction of 2018 in Slovakia by purchasing Trencin Industrial Park for a sum close to €90 million. With this acquisition, Redside enters the Slovak industrial real estate market.
Trencin Industrial Park was developed for AU Optronics in 2010 and is currently leased to a portfolio of premium automotive and electronics tenants except for the area used by itself.
The purchaser, Redside investicni spolecnost, a.s., manages assets worth over €500 million in five funds.
„After an extremely successful built-up of Subfund I within Nova Real Estate Fund structure, managed by our company, Trencin is our first acquisition on the Slovak market. For Redside, this is also a first step in the creation of a new Subfund II, focused on CEE industrial and logistics properties. We are pleased to become an owner of such a unique and technologically advanced property as Trencin Industrial Park. This is a great flagship property of our new industrial subfund portfolio,” Rudolf Vrestal, CFO and Chairman of the Board at Redside said.
„Currently, the existing Subfund I provides the investors with a chance to participate in a well-established and stable investment vehicle with €250 million of AUM, distributed equally between grade “A” office buildings in Prague and regional retail shops in the Czech Republic, generating over 7 % p.a. net returns to its investors. The structure of the subfund allows for business-sector as well as geographic diversification, with long-term secured rental inflow in mind. Building on these fundaments, we launched a new subfund, focused on yet another business sector, so as to broaden the palette of investment products we want to offer to our investors.” adds Tomas Berka, Real Estate Fund Manager at Redside.
ASB Slovakia (part of ASB Group) provided financial and tax advice for the buyer. The seller AU Optronics Slovakia was represented by the investment team at JLL Slovakia who facilitated the transaction.
“Trencin Industrial Park received an extremely positive reception from the market coming from a broad variety of investors, local and international. The structured sale process resulted in the highest number of bidding parties that Slovak real estate market has so far experienced. The disposal will have a dramatic impact on industrial yield levels in Slovakia.“ adds Rudolf Nemec, Capital Markets at JLL.
Trencin Industrial Park offers 120,000 sqm of prime industrial premises. Sitting on the D1 highway in Western Slovakia, the European hub of automotive production, the park is well cross-connected via European highway network. Western Slovakia, which has gained a flattering reputation of being the production and manufacturing hub of CEE, brings 6 car producers within 150 km radius (Kia, Hyundai, PSA Peugeot Citroen, Volkswagen, Jaguar Land Rover, Audi) and intensive network of suppliers thanks to tens of 1st tier and hundreds of 2nd and 3rd tier producers and approximately 250 industrial/logistics prime tenants located across the region and high number of stand-alone owner-occupiers.
In contrast to share deals typical for real estate transactions in Slovakia, Trencin Industrial Park saw the sale of an asset. “Many investors in Slovakia consider asset deals as a no-go option, and fear from opening a Pandora Box of lease renegotiations. However, with proper legal preparation, lease agreements automatically continue under the new owner and remain unconditionally valid into the future,” says Martin Manina, who facilitated the transaction as vendor’s legal representative. “Asset deals provide several benefits to the buyers, such as limited legal, commercial and accounting risks, and allow for full depreciation of purchase price,” adds Manina.
