Europi Property Group has acquired a 12.3% stake in Capital Park, an owner, operator and developer of office and mixed-use assets in Poland, predominantly Warsaw. While EPG had been tracking the company since late 2019, the opportunity to invest arose as a result of the market distress in March, enabling the acquisition at an attractive discount to the net asset value.
The investment provides EPG with exposure to Capital Park’s existing portfolio and platform with an experienced management team and robust sourcing capabilities. Notably, Capital Park is in the final stages of its flagship re-development of the two-hectare former industrial site in Warsaw’s central Wola district (Norblin factory redevelopment). The site is being transformed into an office and mixed-use destination in central Warsaw, with over 65,000 sqm of GLA. Scheduled for completion in Q2 2021, occupier demand in the pre-leasing phase has proven exceptionally strong and remains resilient despite the current market environment.
While EPG had been tracking the company since late 2019, the opportunity to invest arose as a result of the market distress in March, enabling the acquisition at an attractive discount to NAV. Capital Park is controlled by the like-minded private equity group Madison International Realty, who owns 66% and bought its stake from Patron Capital in 2019. Capital Park has been a leading figure in the Polish real estate market since its inception in 2003 and was listed on the Warsaw Stock Exchange in 2013.
The investment in Capital Park provides a debut entrance into Poland for EPG, one of its high-conviction target markets. EPG’s ability to invest across not only sectors and geographies but also across public and private markets showcases its versatility to access attractive real estate market dislocations across a broad spectrum of opportunities. Moreover, EPG’s investment in Capital Park provides a springboard for further growth in Poland, an attractive market with a compelling investment dynamic.
Jonathan Willén, CEO of Europi Property Group, comments: “Poland is one of our target markets due to its compelling fundamentals and demographic trends, as well as continued robust demand from international investors. The country has been quick to respond to the COVID-19 pandemic effectively, and we think its performance coming out of the crises will be among the strongest in Europe.
As we continue to assess investment opportunities in Poland, we’re very pleased to have partnered with one of the country’s most experienced local real estate players. We look forward to selectively expanding our portfolio and working with Capital Park (and Madison) on its current portfolio as well as sourcing further opportunities.
EPG is extremely well-positioned to capitalize on opportunities coming out of the current crisis, and we are constantly assessing dislocations and distressed opportunities in our target markets. While we think there is some further pain to come, interesting opportunities are slowly beginning to emerge, and we’re focused on finding the best risk-adjusted investments for our shareholders.”
