We’re heading out for acquisition hunting, such an opportunity comes once in a decade
Lubor Svoboda, co-founder of the investment group ARETE, summarizes in an interview for the magazine Týdeník Ekonom how the group’s business has been affected by COVID and the war in Ukraine, and reveals plans for the next few years. We are the only entity on the Czech real estate market that has twice closed an investment fund and settled all investors, moreover, during very challenging times and exceptionally successfully. The first sub-fund was closed in 2017 with a gross yield of 39% p.a., and the closing of the second sub-fund followed in 2021 with an average gross yield of 11% p.a. Third close-end fund, focused on European industrial real estate, was opened at the end of COVID and is currently in an extension phase to monetize on recent real estate repricing. And our longer-term plans? Within few years we would like to manage assets exceeding one billion euros, which will be divided into multiple strategies and spread across multiple countries. We are working on transforming from an investment group focused on the Czech Republic and Slovakia into a European group that will attract capital to this continent from around the world. With several new, institutional-grade strategies being shortly introduced, we’re extending presence to new capital markets in Europe and APAC. The current situation in the industrial real estate market is playing into our hands. The market is experiencing a significant investment and price slump. As acquisition seekers, we face little competition, currently holding cash and with low indebtedness as a group. Moreover, in the coming months, we anticipate further corrections in property prices, making acquisitions even more advantageous. Such a favorable combination of conditions arises once in a decade. You can find the full interview below. More information about the ARETE INDUSTRIAL fund, which focuses on income-generating industrial properties from the European region and is still open to qualified investors, can be found here.
The time is right to reassess portfolios
Lubor Svoboda, co-founder of the ARETE investment group, explains in an interview for Euro magazine why the time is right to reassess portfolios. The financial market has shown an imbalance over the past year. The “old rules” no longer apply, investors are trying to find a safe haven for their capital, while eliminating the losses suffered during the covid crisis. This pressure on demand is causing prices to rise rapidly and US stock markets in particular have experienced meteoric growth over the past year. However, this high growth in share prices has also been accompanied by a significant increase in the P/E ratio, which indicates the ratio of share price to earnings and also the potential return on investment in a given share title. With share prices at their highs while real assets (and commercial real estate among them) have become significantly cheaper, an investment opportunity is opening up. This opportunity is particularly attractive to investors who want to invest for the long term and are looking for long-term stability. When investing in real estate, it is of course important to keep an eye on macroeconomic trends, regulation and the political environment, but also on asset-specific factors. Investors should focus primarily on the long-term performance and stability of the issuer, as well as the value of the LTV, which shows the proportion of equity and external financing and the risk arising from over-indebtedness. “A current view of equities suggests they are highly priced, while real assets appear relatively more affordable, and in some distressed situations, undervalued. One can infer that the time is gradually right to reassess portfolios and buy real assets such as commercial real estate.” The full interview is attached. For more information on the ARETE INDUSTRIAL fund, which focuses exclusively on income-generating industrial real estate in the CEE region and is still open to qualified investors, follow here.
Jiří Król joins the Supervisory Board of the ARETE Industrial Sicav Fund
Jiří Król, an expert in alternative investments and manager with more than 20 years of experience in international leadership positions in investment institutions, will join the Supervisory Board of its investment fund, ARETE INDUSTRIAL, as of 1st February 2024. Jiří Król, currently Deputy CEO and Global Head of Government Affairs of the London-based ALTERNATIVE INVESTMENT MANAGEMENT ASSOCIATION (AIMA), brings a wealth of experience in strategic investment management, policy making and financial services regulation to ARETE INDUSTRIAL SICAV Supervisory Board. His accomplishments in international negotiations and leadership of strategic asset management initiatives will be a valuable asset in the development and implementation of ARETE INDUSTRIAL’s fund strategies. Lubor Svoboda, co-founder of ARETE Group, said: “I am delighted to welcome Mr. Jiří Król to the Supervisory Board of the Fund. His expertise and broad insight into global investments will provide us with a valuable impulse for the further development of our fund specializing in industrial real estate. We are confident that his presence will be a key factor in achieving our strategic objectives.” ARETE INDUSTRIAL is the third investment product of the ARETE Group. It focuses on investments in completed industrial properties and the construction of new industrial and logistics parks. With the addition of Jiří Król to the Supervisory Board, the fund has secured an additional layer of professional oversight and leadership.
Is real estate still a good way to protect your investments from inflation?
In a recent article for Wealth Magazine, ARETE co-founder Lubor Svoboda discusses strategies for protecting investments from inflationary fluctuations. He estimates how current economic changes will affect traditional portfolios and highlights the benefits of diversification, with an emphasis on real estate. Svoboda explains why real estate can be a key element in times of inflation and how the ARETE INDUSTRIAL fund focuses on industrial real estate in Central Europe, offering stable returns. “In the current macroeconomic environment, it is crucial to adapt investment strategies to new challenges. Diversification, especially real estate investments, can provide stability in periods of inflation and turbulent markets.” Lubor Svoboda also points to changes in monetary policy and recommends monitoring fiscal trends. He mentions that in light of recent events, fiscal authorities play a key role in investment opportunities. Investors should focus on resilient assets, and industrial real estate in particular may offer attractive opportunities in this volatile environment. Read the full article in Czech language can be found below. Jsou nemovitosti stále dobrým způsobem, jak ochránit své investice před inflací? – Wealth Magazín (wmag.cz)
Cooling inflation promises stabilizing markets and interesting purchases
In his text for Wealth Magazine – Premium, ARETE co-founder Lubor Svoboda discusses the current macroeconomic situation affecting investors around the world. Due to the tense situation on the markets and in the world, more and more investors are turning their attention towards alternative investments. These are commonly up to 30% of an investment portfolio. Alternative investments include real estate and real estate funds. “If investors have spare cash for passive investment, they may find it interesting to enter a real estate fund with a medium-term investment horizon. However, currently it will be necessary to differentiate between investment funds. In line with the above, I would prefer funds with a low level of leverage (LTV) and a strategy that focuses on portfolio growth, i.e. new acquisitions. Not on the rehabilitation of existing portfolios. In the European market, the industrial and retail park segments are currently the least structurally challenged,” Lubor explains in the text. Lubor Svoboda’s full text for Wealth Magazine in Czech language can be found below. https://wmag.cz/chladnouci-inflace-slibuje-stabilizaci-trhu-a-zajimave-nakupy/
During times of crisis, investors can rely on real estate funds
Real estate funds are currently an asset that holds its value, and investors can rely on it. In the long term, a bright future awaits. “Real estate, or rather its value, will grow in the long term due to demographics and economic growth. People will need a place to live, companies need a stable headquarters, businesses need to produce. This cocktail creates pressure for the construction of new and new properties and the use of promising locations,” explains Lubor Svoboda, co-founder of the ARETE group, in the Wealth Magazine article. In today’s challenging times, investors are increasingly turning to asset classes that can protect them from negative influences such as increased market volatility or inflation in the long term. “Investments in industrial real estate, due to their nature, can, in some cases, balance traditional, more liquid instruments such as bonds or stocks and serve as a good hedge for the portfolio’s value,” adds Lubor Svoboda. You can find the full text of Lubor Svoboda’s article in Wealth Magazine below: https://wmag.cz/v-dobe-krize-se-muzou-investori-oprit-o-nemovitostni-fondy/
Crises Have Benefited Real Estate
Among the best forms of alternative investments are real estate and real estate funds. The ARETE INDUSTRIAL fund focuses on high-quality industrial real estate as a form of asset with stable returns. Co-founder of the ARETE group explained more in an interview for Hospodárské noviny. You can find the full interview text in the prestigious Slovak newspaper below.
Lubor Svoboda, one of the TOP investors in the Czech Republic according to Forbes magazine
We are delighted that Forbes Czech Republic, in its investment-focused edition, recognized Lubor Svoboda, co-founder of the ARETE Group, as one of the top ten investment figures in the Czech Republic for 2023. Forbes handpicked individuals with the ability to enhance capital from among inspirational personalities deserving of attention. In the accompanying article, the magazine elaborated on and praised the consistent delivery of exceptional returns to fund investors within a closed investment cycle. It also highlighted the high-yield investment strategy and the stability of the presently open ARETE INDUSTRIAL fund for qualified investors. This fund manages a dozen industrial and logistics parks in the Czech Republic and Slovakia. We deeply appreciate being named among the top ten investors in the Czech Republic. This recognition reinforces our belief that ARETE is on the right track, and our distinctive strategy involving a closed investment cycle in high-yield industrial and logistics parks is noteworthy.
Looking to increase the value of your buildings? Bet on renewable resources
Our colleague Tomáš Novotný explains in a text for Wealth Magazín why it is worth betting on renewable energy sources when developing and acquiring industrial real estate. “Installing renewables can dramatically increase the market value of your property. The increased interest of tenants in ESG-compliant energy-efficient buildings has already been discussed, but there are other aspects that increase their value. One of them is, for example, gaining prestigious energy efficiency certifications with good results,” says Tomas in the text. Read the full article below:https://wmag.cz/chcete-zvysit-hodnotu-sve-budovy-vsadte-na-obnovitelne-zdroje/
You can’t fool the market. Real estate will get cheaper if money remains expensive
Co-founder of ARETE, Robert Ides, describes the macroeconomic influences affecting the real estate market in his article for Wealth Magazín. Currently, the real estate market is impacted by factors such as the high cost of money and vastly different expectations of buyers and sellers. However, fluctuations in real estate prices are a natural market phenomenon. Once the high cost of money decreases, the real estate market is likely to pick up momentum, and property values will increase. “Market cyclicality is nothing to fear. It’s natural and helps to balance the market in response to changes in money prices,” explains Robert in the article. Read the entire article below:https://wmag.cz/trh-neosalite-nemovitosti-zlevni-pokud-penize-zustanou-drahe/
