Time has proven the stability of investments in industrial real estate
The challenging year of 2022, when bonds or stocks suffered record losses, was, on the contrary, a very positive period for industrial real estate. We are pleased that ARETE decided to invest in this real estate market segment several years ago. In an interview with TREND.sk, our colleague Igor Šnirc explains what led us to invest in this segment, what the current market situation is, and also what investors can expect in the near future. “We believed that there was great potential in this real estate market segment and that demand in the Central European region would need to be satisfied in the coming years. Our assumptions are being fulfilled so far. The rise of e-commerce as the world’s largest market, the inclusion of logistics properties in critical state infrastructure, record construction, and the relative resilience of this segment during times of worsening economic and geopolitical conditions have shown us that we have taken the right path,” describes Igor. https://lnkd.in/ehi7Jv5z
The land is not deteriorating and the industrial business is progressing today
The return of industry to Europe, together with the building of logistics and manufacturing real estate, is bringing skilled jobs back to the less developed regions. It is also a segment of the real estate market that is driving technological innovation and sustainable construction. “Today, industrial parks are full of modern technology, research centers, and offices, which in many cases also revitalize old brownfields. And if we are already building on greenfield sites, we try to follow ESG principles. Of course, sustainability and energy self-sufficiency of our business is important to us,” says Lubor Svoboda, co-founder of ARETE, in an interview with TREND.sk. We have unlocked the full interview from the series, of which we were an expert partner, for you to read. https://lnkd.in/gru_rPty
Is the real estate market facing really tough times? And can some segments of it resist?
The only segment of the real estate market that managed to withstand the combination of higher interest rates, inflation, and high energy prices last year, was industrial real estate. “At the same time, to assume this segment is immune would be naive. Increased construction cost, yield shifts due to inflaction-driven rental rates and long-term high land prices brings significant challenges to underwriting and risk mitigation. Tenants in dire need of manufacturing or warehouse space are confronted with the market reality of higher rents. However, as this is an essential part of their business, they are trying to find savings elsewhere, for now” explains ARETE co-founder Robert Ides in a text for Wealth Magazín. The low vacancy rates within this segment, record construction volume, and ongoing demand, have so far made logistics and light construction assets the most resilient within all RE asset class allocations. https://lnkd.in/gCsEBnkq
The return of industry to Europe represents an important opportunity for less developed regions
The return of industry to Europe represents an important opportunity for less developed regions. It is a chance to reverse negative trends, such as the depopulation of border regions. Industry can provide attractive job opportunities that have disappeared with deindustrialization. “We are not talking about manual labor. These jobs will disappear within a few years thanks to automation and robotization. I mean positions with higher added value for people with technical education,” explains Lubor Svoboda, co-founder of ARETE, in a January article for the Slovak magazine TREND.sk. Thanks to global trends, investors and real estate funds sense an opportunity that may not be repeated. Moreover, if declining regions damaged by the departure of industry thrive, the whole economy will also benefit. “Our job is to find suitable investment opportunities or sites and land for new development,” Svoboda adds. We unlock for you the full article from TREND.sk, of which we have become an expert partner. https://lnkd.in/ebCQDZkt
Industrial building boom pulled up industrial fund yields
As a result of the pandemic and the war in Ukraine, industrial and logistics real estate is now perceived as a critical infrastructure of the state. In addition, thanks to high demand and low vacancies of around 1%, this segment of the real estate market can maintain its value even in times of crisis. “At the same time, there is a lot of potential for growth. Due to the energy crisis, lessors are forced to look for cost savings and focus on sustainability and energy efficiency in properties. Older industrial parks are being renovated and modernized,” says Lubor Svoboda, co-founder of ARETE. Thanks to their resistance to crises, industrial real estate can thus play a stabilizing role in an investment portfolio and become a suitable complement to shares or bonds. This is why we invest in stable industrial real estate in Central Europe in our ARETE INDUSTRIAL fund. Over the years, we have built up a broad portfolio of premium tenants and industrial properties, which we continue to expand through acquisitions and our own development. Read more in the unlocked text from the Slovak TREND.sk, of which we were an associate partner. https://lnkd.in/e_nyqCTb
Industrial real estate is a new port of call for investors
The pandemic, supply chain crisis, and the war in Ukraine are reflected in the economy in terms of unprecedented inflation, rising debt, and interest rates unseen in the last 10 years. Meanwhile, the industrial real estate segment is reflecting this trend in increased construction costs, labor, and rising transportation and production costs. Nevertheless, demand for new industrial parks, halls, and logistics facilities is still unsatisfied even as both investors and tenants consider their investments and costs more carefully. Current market developments are still opportunities to be seized. “The development of modern technology and automation will be key. Technologically advanced companies need a background of educated and capable employees, who in our case also draw on the historical traditions of our countries. The Czech Republic and Slovakia are attractive locations, we just need to take advantage of this and create favorable and, above all, stable conditions for companies,” explains Robert Ides, co-founder of ARETE, in an interview with TREND.sk. The attached article is the first in a series of texts on alternative investing, of which we have become a partner. https://lnkd.in/ecRbWx_Q
ARETE Group’s third fund completed the construction of a new hall within the ARETE Park Rokycany I industrial park
ARETE Group’s third fund completed the construction of a new hall within the ARETE Park Rokycany I industrial park. The long-term tenant of the facility will be Raben Logistics Czech s.r.o., one of the world’s leading players in the logistics market. The total value of the development is 7 million EUR (approximately 165 million CZK). The facility will be occupied by Raben Logistics Czech, a company that has been operating in the Czech market for fifteen years and offers comprehensive and customized logistics services. The new facility, with a leasable area of more than 6,700 m2, boasts technical specifications that meet the highest requirements of environmental certifications. The entire facility is being built with the ARETE Group’s ESG strategy in mind. At the same time, the newly completed warehouse is the first building within the ARETE Industrial portfolio to be completely warmed by heat pumps. “Our fund is strengthening the share of new logistics and warehouse properties in the portfolio. We are pleased that we have managed to complete the construction of a new modern hall. For this, we must thank our development team, who have worked hard and demonstrated their high level of expertise over the last few months. At the same time, ARETE Park Rokycany I is attractively located right next to the D5 highway, which is an important transportation route connecting Prague and Germany. The proximity to the city of Rokycany also means a sufficient pool of skilled workforce. Soon, we will start further construction within this industrial park. When fully completed, the industrial park will offer tenants an area of more than 20,000 square meters,” said Robert Ides, co-founder of the ARETE Group. “As a tenant, we appreciate the high level of expertise demonstrated by the ARETE Group development team in recent months. The vision with which ARETE intends to continue to manage the property and develop the site was a key factor in our decision to build a modern transshipment facility in Rokycany, which will significantly speed up the connection between Central Europe and Germany,” added George King, Lease & Facility Manager at Raben Logistics Czech s.r.o.
Invest In A Shopping Mall From 20 Euros?
Our colleague Dr. Josef Vojta was a guest of Lenka Buchláková in the programme Ekonomika+ on Televízia TA3. The following topics were discussed: why start investing, basic differences in investing in an investment apartment and an investment fund, what to pay attention to when choosing an investment fund, investing in real estate versus investing in shares. You can watch the full session here: https://www.ta3.com/relacia/27628/investovat-do-nakupneho-centra-od-20-eur
Industrial real estate operates in all phases of the business cycle
Industrial real estate can bring stability to a portfolio as well as interesting gains during all phases of the business cycle. It is a unique sector that grows as one of the fastest in a conjuncture and at the same time can withstand recession very well. Additionally, it is the real estate segment that is driving the new green building industry.More in the text of our co-founder Lubor Svoboda for Wealth Magazín https://lnkd.in/e2ccrKDf
New development in ARETE Park Rokycany 2
The third fund of the ARETE group has started the construction of a modern hall within ARETE Park Rokycany 2 industrial park. The investment will reach a total amount of 40 million euros. This is equivalent to just under one billion Czech crowns. The long-term tenant will be the Duvenbeck Group, which is an international active, full-service logistics provider. ARETE group’s third fund focused on attractive and stable industrial and logistics assets in the Central and Eastern Europe region has started construction of a modern logistics hall within ARETE Park Rokycany 2. The facility is planned to be completed within one year and the Duvenbeck Group will become its long-term tenant. The complex will offer nearly 30,000 square meters of modern warehouse and office space. The project will also comply with ESG standards in line with ARETE group’s strategy. The tenant will benefit from the strategic location of the facility, which is close to the D5 highway. “The launch of construction at ARETE Park Rokycany 2 is an important step towards building a stable portfolio for our third fund ARETE INDUSTRIAL. The complex is attractive for logistics companies due to its close proximity to the D5 motorway, which is the main highway linking the Czech Republic to Germany. Thanks to our own team handling the entire development process, we can be more flexible and can meet all the requirements of the tenant. We greatly appreciate the fact that the long-term tenant will be a reputable logistics service provider Duvenbeck. A group with more than 90 years of tradition, annual turnover of more than EUR 920 million, the best D&B Rating and currently more than 6,000 employees working at over 35 locations in 8 European countries,” said Lubor Svoboda, co-founder of the ARETE group, on the start of construction. The Czech branch of Duvenbeck was founded in 1996. The current Managing Director Oliver Röhl has been with the company since the beginning and has held the position of Managing Director himself since 2004. “For the Duvenbeck Group, this is a strategic project that will be one of the most important in the Central European region. We are delighted that a fund from the ARETE group is the developer and owner of the industrial park. We appreciate the high expertise of the entire ARETE group team, which was able to prepare a project that met all our requirements in a relatively short time. The excellent location of the park fits precisely into the network of key European warehousing and distribution centers of the group,” said Oliver Röhl, Managing director Duvenbeck Czech Republic.
