Valad Europe, the leading independent diversified real estate investment manager, has entered into a joint venture agreement with a new investor to build a portfolio of Central European retail assets called the Valad Central Europe Retail Partnership (VCERP). It has also completed the Partnership’s first investment by purchasing the Galeria Butovice shopping center in Prague, Czech Republic, from ING Real Estate Finance.
With an initial target gross asset value of €500 million, VCERP will invest in Value Add assets in Central Europe, predominantly focussed on Poland and the Czech Republic. Seeded with €200 million of equity, VCERP will employ 60% to 70% leverage, with strong cash-on-cash yields. Debt financing will be sourced from a pool of lenders with whom Valad Europe already has strong existing relationships.
VCERP will invest in first and second generation shopping centers, retail parks and retail outlets in primary and secondary macro locations in Poland and the Czech Republic. It will seek to acquire good quality, well located real estate, targeting both single assets, primarily in lot sizes ranging from €10 to €60 million, and portfolios in excess of €50 million.
The joint venture has already acquired the 36,500 m² Galleria Butovice in Prague, Czech Republic. The shopping center was built in 2005 and is let to around 100 tenants, including supermarket chain, Albert, Intersport and H&M. The majority of the Center’s income is secured against regionally well-established, international covenants and supplemented by significant income from local covenants.
Christian Bearman, Valad Europe’s Head of Corporate Development and Operations, commented: “We are pleased to be partnering with a new investor who shares our desire to capitalize on this window of opportunity in Central Europe. Poland and the Czech Republic have shown some of the strongest GDP growth within the EU in recent years and present an attractive counter cyclical opportunity, with well-located assets in need of strong local asset management skills.”
Source: Valad Europe