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DIFA enters Czech and Hungarian markets by acquiring significant holding in Europolis’ Central European portfolio
Partnership between DIFA and Europolis paves the way for further investment in Central Europe
The following release was published today by Investkredit.
Starting with a substantial investment in the Czech and Hungarian markets,
DIFA Deutsche Immobilien Fonds AG is expanding into Central and Eastern
Europe. The Hamburg-based open-ended real estate fund manager has acquired a
significant stake in an existing portfolio built up by Europolis, the real
estate arm of the Investkredit Group, Vienna. An ongoing relationship with
Europolis will also facilitate further property acquisitions in CEE countries.
As announced today in Vienna by DIFA board member Dr. Frank Billand, Klaus
Gugglberger of the Board of Management of Investkredit Bank AG and Noreen
Doyle, First Vice President of the European Bank for Reconstruction and
Development (EBRD), DIFA has acquired a 49% stake in a total of seven property
companies operated by Investkredit Bank AG and the EBRD. DIFA has also taken
over 100% of Hadovka, another property company, bringing their total
investment in the Czech Republic and Hungary to 180 million euros. The
weighted initial yield after finance costs is 13%. The investment package
comprises four office buildings in Prague and Budapest, two shopping centres
in Teplice and Mladá Boleslav, as well as two logistics sites on the outskirts
of Budapest with total floor space of some 230,000 sq m. These new portfolio
holdings also mark DIFA’s international debut in the logistics segment. Shares
in seven of the associated companies will become part of the open-ended real
estate fund DIFA-GRUND, while Hadovka Park in Prague will be assigned to
DIFA-Global.
Elegant architecture
DIFA is committed to building a carefully selected property portfolio which is
well-diversified in terms of regions and sectors and where the quality of
locations, tenants and properties is all equally high. Across all types of
use, the distinguishing features of these properties are their elegant
architecture, efficient layouts and good links to airports or public
transport. The Prague portfolio (totalling three properties) includes the
striking, multi-award winning Danube House in the up-and-coming River City
area, the Hadovka office park situated between the city centre and airport,
which received a national award in 2000 for best office building, plus the
Technopark in Prague’s 5th district, completed in 2003. The two office parks
are fully let on long-term leases, as are the Olympia shopping centres in
Mladá Boleslav and Teplice. This acquisition of two shopping centres in the
Czech Republic reflects DIFA’s strategy of ensuring significant exposure to
the retail segment in both its domestic and foreign investments.
The Budapest portfolio (also totalling three properties) consists of the
Infopark Research Center, the logistics-focused Airport Business Park, which
features approximately 65,000 sq m of modern offices and logistics space
meeting Western European standards and is situated near the Hungarian
capital’s international airport, as well as a second logistics investment in
the form of the M1 Business Park in Páty to the west of Budapest. Completed in
2003, the latter property enjoys excellent transport links with Budapest and
(via the M1 motorway) Vienna, while providing international-standard
construction quality and facilities.
Domestic demand for high-quality office space on the increase
“Budapest and Prague both offer very positive economic conditions combined
with above-average growth potential. Our holdings mean that we are ideally
placed to benefit from rising domestic demand for high-quality office space in
the most exciting Central European markets over the next few years,” said Dr.
Frank Billand, the DIFA board member responsible for CEE markets. “With prices
for high-quality commercial properties trending upwards to Western European
levels, our portfolio can be expected to deliver attractive value growth.”
Europolis Real Estate Asset Management GmbH, headquartered in Vienna, will
continue to manage the eight properties.
This transaction and the agreeing of an ongoing partnership with Europolis,
the real estate investment specialist within the Investkredit Group, are
central to DIFA’s expansion into Central and Eastern Europe. According to
Billand, “This tie-up facilitates DIFA’s entry into CEE markets and provides
the framework for further investments in the Czech Republic, Hungary, and
possibly also Poland and the emerging markets of Eastern Europe. In addition,
joining forces with an experienced market player like Europolis reduces the
risks associated with going it alone.”
“This is a winning combination for everyone concerned. As early as 1997, when
we were planning our future real estate investments, we envisaged a big
international fund acquiring a stake in our investments after about 10 years,
enabling it to tap into a new region and paving the way for shared future
growth,” said Klaus Gugglberger at the press conference.
“Supporting the development of the property market is an important part of the
EBRD’s work, allowing countries throughout the region to complete their
transition to free market economies. The involvement of DIFA represents a
significant contribution to that process,” added Noreen Doyle, EBRD First Vice
President.
This collaborative venture by DIFA, Europolis and the EBRD will lay the
foundations for further growth in quality real estate projects across Central
Europe.
About DIFA
Hamburg-based DIFA Deutsche Immobilien Fonds AG is a capital investment
company subject to the German Investment Companies Act. The company is part of
both the Union Investment Group and the FinanzVerbund der Volksbanken
Raiffeisenbanken alliance, and currently manages five open-ended real estate
funds. More than 600,000 private investors have entrusted around 16 billion
euros to DIFA. Within the commercial real estate market, DIFA is active as an
investor and project/property developer, service provider, landlord and
property seller. The portfolios of DIFA’s open-ended real estate funds include
some 210 properties and projects in Germany, the UK, the Czech Republic,
Hungary, Belgium, France, Spain and the USA.
About Europolis
Europolis manages the real estate activities of Investkredit, which is
positioned as a long-term specialist banking group in Central Europe. The
Investkredit Group also specialises in corporates and local government. In
less than seven years, Europolis has become one of the most important real
estate companies in the CEE region. Its core values include professionalism,
high standards of quality and transparency. The Europolis portfolio has
received numerous real estate prizes and is regarded as one of the best in the
region in terms of quality. Europolis partly owes its rapid success to the
participation of the EBRD in its investment programme. The E1 real estate
portfolio currently comprises 21 properties in the Czech Republic, Hungary,
Poland, Croatia and Romania. At the end of 2004 the total value of the
portfolio was estimated to be 900 million euros. Virtually all the equity
capital in the E1 Central European fund has been fully invested some 2 years
earlier than expected. In November 2004, Investkredit and the EBRD made a
further 300 million euros available for real estate projects. This money is
earmarked for an E2 real estate portfolio of around 15 to 20 properties in
Bulgaria, Serbia, Montenegro, Bosnia-Herzegovina, Macedonia, the Ukraine and
Russia. The objective is to reach the 1 billion euro mark by 2009.
About the EBRD
The European Bank for Reconstruction and Development was set up in 1991 to
foster the transition towards open and democratic market economies in Central
and Eastern, Europe, South-Eastern Europe and the Commonwealth of Independent
States. The Bank is the single largest investor in its 27 countries of
operations. Since its foundation (and until end-2003) the EBRD has not only
invested 22.7 billion euros of its own funds, but also mobilised an additional
45.8 billion euros by co-investors. The Bank is a market leader in the
property sector in the region, with investments, as of December 2004, of 963
million euros in over 49 projects including office centres, shopping malls,
logistic and warehouse centres, hotels and residential housing.
For further information please contact:
Fabian Hellbusch, DIFA, Deutsche Immobilien Fonds AG
Tel. +49 40 3491
9160, fabian.hellbusch@difa.de, www.difa.com
Alexander Bosak, Europolis Real Estate Asset Management GmbH
Tel. +43
131 972 0060, a.bosak@europolis.at, www.europolis.at
Hannah Rieger, Investkredit Bank AG
Tel. +43 153 135 112, rieger@investkredit.at,
www.investkredit.at
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