CBRE has helped a private Austrian group dispose of the Prague 13 office project Metronom. The 34,000 sqm office project has been waiting to happen for at least a decade, but somehow never got built. That’s surprising, on the face of it, considering it sits right on top of the Nove Butovice metro station and across from a shopping mall (granted, not exactly the most successful one ever).
The owners, originally connected in some fashion with Doughty Hanson (which also used to own the Nove Butovice Business Park) seem to have decided the current development environment didn’t suit them and sold it to a company (i.e. HB Reavis) better suited to the times. Originally, the project was being sold along with a 20,000 sqm residential component, but the owners were advised to split the plot into two separate investment packages to increase the final price (and probably its sell-ability). The residential portion could end up being sold soon as well, as it happens.
“I wouldn’t say it’s the best time to sell such projects,” says one market observer. “But it’s a good time to buy. A lot of companies are coming under pressure from the banks, so they have to sell. They’re not selling for the price they wanted to achieve, but the price that the market is telling them.”
This should be music to the ears of agents everywhere, but they’re hoping someone will turn up the volume a bit higher…
HB Reavis continues to make inroads into Poland. The latest scalp was for the Slovak-based developer is a win in a pair of land tenders for over 17,000 sqm of land in central Warsaw. Polcom Investments, part of the HB Reavis Group will take over the land plus buildings on Chmielna Street. The total transaction value was PLN 171m. Cushman & Wakefield organized the tender for the vendor.
In the second major real estate transaction of the year in Slovakia, Unibail-Rodamco has bought out its JV partner in the highly successful Bratislava Aupark for €151m (before the deduction of the debt on the scheme). At the same time, the buyer purchased an adjacent development plot for €3m, land that could be used for the mall’s expansion. In all, the transaction has resulted in €120m in proceeds for HB Reavis. Aupark currently offers 52,300 sqm of retail space.
HB Reavis has worked out an agreement with Polish railways company PKP for the re-development of the Warsaw West train station, along with the construction of an office center complex. The €110m deal was signed June 16 in Warsaw for the project, which is due for completion by the end of 2014. The seven new office buildings will offer 54,000 sqm of space with floor plates of 1,250 sqm and an entrance from the Aleje Jerozolimskie side.
“Already with the first project we have vigorously entered the real estate market in Poland. Therefore, we are glad that shortly after the beginning of construction of the Konstruktorska Business Center and launching of a real estate investment fund in Luxembourg we are able to announce partnership with PKP S.A. in the execution of the Warsaw West Project,” says Stanislav Frnka, Country CEO, HB Reavis Poland.
In what looks like the second phase of its CEE expansion strategy, the Slovak property company HB Reavis has launched a €165m real estate fund that will focus on assets in the core CE markets. It’s seeding the fund with five of its properties: two Bratislava office blocks, one of its Auparks and a pair of logistics parks. So you get some sector diversification as well, and HB Reavis is throwing in 7 year principal protection for good measure.
It hopes to raise €100m in equity commitments and is estimating it will provide 11% returns (50% of which is to be distributed). Spokesman Roman Karabelli explained the rationale:
We see a post-crises come-back of commercial properties, while the economies of core CE countries are expected to achieve growth above the EU average. We therefore believe the time is right for us to launch a new business line of real estate investment management. Our management company is regulated by the Luxembourg authorities and the management team has experience with management of private equity funds in the UK.
Czech industrial vacancy plunged 6% over the last year, according to research by DTZ. More than 18% of all warehouses stood vacant at the end of Q3 in 2009, but the figure fell to 12% as Q4 2010 began. This came against the background of 74,000 sqm completing from July to September this year, including the 42,000 sqm Logistics Park Lovosice by HB Reavis, fully leased to CD Cargo. A 28,4000 building was also finished at CTPark Ostrava. Gross take-up hit 206,100 sqm in Q3 2010 (double the Q3 2009 result), but 62% of that was from renegotiations.
Real Estate Karlin Group (REKG) is reported to have sold its project River Gardens, in Prague’s Karlin district, to the Slovak developer HB Reavis. RB claims it will begin construction on the 19,000 sqm office building (its first project in Prague) in August, which would seem to indicate an appetite for spec. That wouldn’t be unlike HB Reavis, but it’s not exactly standard operating procedure these days.
Milorad Misko, a partner at REKG told the Czech daily Hospodarske noviny (link in CZ) that the prices his company is achieving for its projects are comparable to those before the crisis in 2008.
How strange. We thought prices had gotten overinflated during that whole bubble-thing…