Here is a round-up of the latest European commercial real estate deals.

Eleven Metro and Makro stores in CEE are involved in a sale and leaseback deal

Metro and Makro stores in sale and leaseback deal

Eleven Metro and Makro cash and carry stores in Central and Eastern Europe (CEE) have been sold and leased back in a deal worth more than €250million.

The stores, in Poland, Hungary and also the Czech Republic, will continue to operate on the basis of long-term lease contracts.

The portfolio consists of five Cash & Carry stores in Poland (Warsaw, Wroclaw, Krakow and Lublin). There are also three Metro Cash & Carry properties in Hungary (Budapest) as well as three Makro Cash & Carry markets in the Czech Republic (Prague).

FLE GmbH, Vienna, has acquired the Metro Properties portfolio. It is a subsidiary of French LFPI Group, investing on behalf of an AIF regulated fund.

The transaction was finalized in August 2019 and was worth more than €250million, says Metro AG.

Metro Properties retains the ownership of several adjacent plots in Poland and also Czech Republic to develop mixed-use projects.

Increasing the value of real estate

By applying real estate competence, Metro Properties says it increases the value of METRO’s real estate. This includes investments in new locations, their sustainable development as well as sale-and-leaseback transactions with long-term commitments.

Jürgen Schwarze, Chief Financial Officer of Metro Properties, explains, “Real estate markets are close to historical low yields. Many of our assets have been fully developed.

“Taking advantage of a healthy real estate market, we can capitalize on our strong operational standing, thereby crystallizing value to make new investments and pursue further projects.”

The sale of selected assets from the real estate portfolio in the Central Eastern European region is just one example of the group’s global portfolio strategy, says Wolfgang Baumgartinger, Director Transactions for Metro Properties.

“We unlock real estate value built up and fostered by continuous successful operations. With FLE GmbH, we have found a matching partner, sharing both our passion and our vision for the wholesale business.

Real estate in prime CEE cities

Alexander Klafsky, managing partner of FLE, says, “With the acquisition of eleven Cash & Carry properties in Poland, Hungary and the Czech Republic, we have not only acquired real estate in prime CEE cities, but also see ourselves as a highly committed new long-term partner of METRO AG.

“We appreciate Metro as a very sophisticated and pioneering market leader in the international wholesale business. Just like our new partner, we strive to create long-term sustainable values through our business model and our investments. Metro and Makro Cash & Carry have carefully established their markets and all properties are excellently located with very good accessibility and visibility. We see this investment as an important milestone for our investment strategy in CEE countries.”

In the Polish transaction, METRO PROPERTIES was advised by DLA Piper Giziński Kycia sp.k. (legal services) and Colliers Poland (broker services). In Hungary, advisory services of Oppenheim (legal services) and also Colliers Hungary (broker services) were engaged. For the Czech Republic, METRO PROPERTIES was advised by PRK Partners (legal), PwC (financial). It was also advised by Colliers Czech Republic (broker services). 

In all three jurisdictions, TPA Group has undertaken financial due diligence as well as tax advice for FLE GmbH. Legal services for the purchaser were rendered by Allen & Overy in Poland, Novalia in the Czech Republic and also DLA Piper in Hungary.

FLE GmbH is based in Vienna and part of the French LFPI group, an independent international multi-asset manager. It has almost €5 billion of equity under management in private equity, real estate, debt as well as other fields.

It is investment advisor of several real estate funds. They target office, retail assets as well as low budget hotels. These have purchase prices from €5 million-€50 million in Germany, Austria, and CEE.


Nowy Targ in Wroclaw, Poland

Offices sold for 214 million

Swedish development and construction company, Skanska, has sold three office buildings in Poland for €214 million (SEK 2.3 billion).

The offices, in Wroclaw and also Krakow, have been sold to real estate funds managed by Credit Suisse Asset Management Global Real Estate.

The transaction includes 60,300 square meters. The High5ive office complex in Krakow consists of 37,500 square meters. Two buildings at the seven-storey Nowy Targ project in Wroclaw, which has just been completed, make up the rest.

Hihgh5ive is one of the city’s most successful office developments. It is close to Krakow’s main railway station as well as the Galeria Krakowska shopping center

The two buildings are highly efficient. Around them, 1,900 square meters of ‘green concrete’ will be constructed. This cleans the air from harmful substances such as car exhaust fumes.

All three office buildings are expected to receive LEED Platinum and also Building without Barriers certificates.

The transfer of Nowy Targ is expected in the fourth quarter of 2019, while the High5ive complex buildings is set for the first quarter of 2020.

Francisca Fariña Fischer, Head of Real Estate International at Credit Suisse Asset Management, says, “This portfolio of three prestigious office buildings in Wroclaw and Krakow is characterized by sustainable, high-quality construction and are in very attractive locations. Furthermore, Poland is a dynamic and liquid real estate market.”

Skanska is one of the leading development and construction companies in Europe. Outside the Nordics, the company has European operations in building construction and civil engineering in Poland, Czech Republic, Slovakia and also the UK.

Skanska develops commercial properties in selected home markets in Poland, Czech Republic, Romania and also Hungary.

In 2018, Skanska had sales of SEK 40 billion and also about 14,200 employees in its European operations.


Mixed-used site in Cork fetches €36.3 million

Half Moon Street, a prime, city centre mixed-use asset in Cork, Ireland, has been acquired by global real estate investment company Kennedy Wilson and equity partners for €36.3 million.

The deal for one of the most significant mixed-use assets in Cork City, reflects a net initial yield of 6.7%.

Half Moon Street, which was completed in 2009, provides 120,000 square feet of space in a prime waterfront location, overlooking the River Lee.

The building is split between 56,000 square feet of Grade A office and also 63,000 square feet of flagship retail space let to two blue-chip tenants, representing 96% of the income security.

The building is at the corner of Half Moon Street and Lavitt’s Quay and is within walking distance of Cork’s principal shopping streets, Opera Lane and also Patrick Street.

Peter Collins, President of Kennedy Wilson Europe, says, “We are excited by the potential for value-enhancing asset management angles and are confident in Cork’s fundamentals as a top European city, underpinned by its lower occupancy costs relative to Dublin, strong connectivity both for travel and telecoms and future growth prospects.”

Cork is the second-largest city in Ireland and home to over 150 multinational companies with a focus on technology, pharmaceutical, life-sciences and also cyber security.

It also has a highly ranked university and 55% of the population under 39 years old. Cork is projected to grow by 50% by 2040, according to the government and will also benefit from significant investment in infrastructure as part of its “Ireland 2040” strategic national plan.

Kennedy Wilson owns, operates, and also invests in real estate on its own and through our investment management platform. It focuses on multifamily and also office properties in the Western U.S., UK, and Ireland.


Prague hotel sale heads 2019 top 10 real estate deals

The Panorma Hotel, Prague is part of the top 10 real estate deals

The sale of a top Prague hotel is the largest by room size to date in 2019, says leading broker Cushman & Wakefield (C&W).

The four-star Panorama Hotel Prague was sold by the Corinthia Hotel Group to the Austrian investor S+B. Cushman & Wakefield assisted in the transaction. It contains 441 guestrooms, conference facilities, shops, a restaurant, a casino, a swimming pool, fitness and spa area and also parking for 300 vehicles.

The sixth-largest hotel in Prague will still be operated by Corinthia, as it has signed an operating lease with the new owner.

Magsud Rahmanov, C&W’s Senior Hotel Investment Advisor for Continental Europe, says, “Judging from the record number of interested parties and strong offers from a diverse pool of capital the property has received, the appetite for value-add hotel investment opportunities in Prague is high. Therefore, we can expect more hotel transactions to happen in the coming months.”

C&W says the hotel investment market is reaching new heights in the Czech Republic with year to date volumes from 10 hotel transactions at €530 million. This is more than a 100% growth compared to the average yearly transaction volume of €250 million, over the past five years. 

Frédéric Le Fichoux, Partner & Head of Hotel Transactions for Continental Europe at Cushman & Wakefield, says, “The strong interest from investors with diverse source of capital and origin proves again that Prague and the CEE region are increasing their appeal for hotel investors.” 

Of this year’s 10 transactions, six took place in Prague, totalling €483 million. The sale of Panorama Hotel Prague is C&W’s 25th transaction in the region in the past five years. 

The top 10 hotel transactions in the Czech Republic in 2019 (year to date)


Amsterdam offices acquired for €130m

The Queens Towers office buildings in Amsterdam, Netherlands, have been bought for €130 million by Korea’s Kiwoom Asset Management.

Queens Towers is a prominent 28,000 square meter (300,000 square feet) office building on Amsterdam’s West Axis, on the A10 ring road.

It is let on a Weighted Average Unexpired Lease Term (WAULT) of more than nine years. Most income comes from the government agency UWV. The three towers have an ‘A’-energy efficiency rating.

Alexander Klafsky, managing partner of FLE, says, “With the acquisition of eleven Cash & Carry properties in Poland, Hungary and the Czech Republic, we have not only acquired real estate in prime CEE cities, but also see ourselves as a highly committed new long-term partner of METRO AG.”

Kiwoom Asset Management selected Amsterdam because of its strong and stable economic growth and severely constrained new office buildings.

AF Advisory sourced the investment opportunity and also advised on deal structuring and financing. DTZ Investors acted as the European Asset Manager and will continue to provide investment and also asset management services, with AF Advisory providing strategic asset management input.
David Peacock of DTZ Investors says, “This core investment is situated in a location benefitting from excellent transport connectivity and is let off relatively low rental levels, presenting our client with excellent prospects for future growth.”
Alexander Fischbaum, Founder of AF Advisory says: “With Queens Towers, we have secured a highly desirable investment for Kiwoom Asset Management in an area with exceptional long-term prospects. This is a very attractive transaction, giving our client access to long-term government income at a strong yield, while also benefitting from highly competitive financing and future rental uplifts.”

The image is from Wikimedia.


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