White & Case has advised an investment vehicle advised by Macquarie Infrastructure and Real Assets (MIRA) on its EUR 79 million acquisition of a 132,000 square meter portfolio of four logistics and light industrial assets in the Czech Republic and Slovakia from joint sellers HB Reavis Group and HB Reavis CE REIF fund, each of which held two assets.
The portfolio covers four locations in the two countries, including a 14,500 square meter multi-modal logistics facility in Ostrava, Czech Republic, and a 69,500 square meter logistics center in Raca, Slovakia (both sold by HB Reavis Group), as well as a 31,500 square meter Svaty Jur logistics center in Bratislava and a 16,500 square meter Maly Saris logistics center in Presov, Slovakia (sold by the HBR CE REIF fund).
The transaction also includes a development component with established permitting in place, allowing for expansion of the existing adjacent sites within a short timeframe.
M7 Real Estate Ltd, the pan-European investor and asset manager, has been appointed as asset manager for the portfolio, JLL has been selected as property manager, and JLL Capital Markets teams in Bratislava and Prague advised on the acquisition.
HB Reavis is an international real estate developer founded in 1993 in Bratislava, Slovakia. It operates in the United Kingdom, Poland, the Czech Republic, Slovakia, Hungary, and Turkey. Its operations have so far yielded a total of 917,500 square meters of modern offices, shopping, and entertainment spaces in addition to logistics facilities, and it reports over 1 million square meters of developments in the planning, permit, or construction stages. The group has total assets of EUR 2.1 billion, with a net asset value of almost EUR 1.2 billion.
HBR CE REIF is EUR 175 million semi-open commercial property fund managed by HB Reavis Investment Management, the investment management arm of HB Reavis Group. The fund invests in standing, fully-let, income generating property across office, retail, and logistics segments in Central Europe. Since its inception in 2011, the fund reports delivering a total return of 10.9% p.a. to its investors, out of which 5.3% p.a. has been distributed to investors as a dividend. The fund will be looking to reinvest the proceeds from disposal of the logistics assets within the scope of its mandate.
Macquarie Group is a global provider of banking, financial, advisory, investment, and funds management services. Founded in 1969, Macquarie operates in more than 65 office locations in 27 countries and employs more than 13,500 people. Assets under management totaled approximately GBP 234 billion as of September 30, 2015. MIRA — a division of the Macquarie Group — manages EUR 92 billion in infrastructure and real asset investments. It claims to be the world’s largest infrastructure investor, with a growing portfolio in real estate, agriculture and energy. MIRA has over 21 years’ real asset investment experience, with a team of approximately 500 experienced professionals located in 19 countries. It manages 129 portfolio businesses, approximately 300 properties, and approximately 2.8 million hectares of farmland.
According to an HB Reavis press release, “the disposal reflects the strategic decision of HB Reavis Group to divest its industrial development business and focus its development activities entirely on European office and retail projects.”
The transaction marks the first disposal made by HB Reavis CE REIF, a EUR 175 million commercial property fund managed on behalf of institutional and high-net worth investors by HB Reavis Investment management, the investment management arm of HB Reavis Group. The fund acquired the assets at its inception in 2011, and HB Reavis declared its intention to use the capital released from the transaction, along with freshly fundraised equity, for further acquisitions of assets in Central Europe.
Steven Sewell, the Executive Director, Head of Real Estate – EMEA, MIRA, commented: “Our current focus is on niche real estate sectors where we see good relative value. The logistics sector in CEE is showing strong fundamentals and remains one of the most interesting property submarkets in Europe. There is a growing importance of the Czech Republic and Slovakia as key European logistics markets and these assets were available at an attractive price level.”
Marian Herman, CFO at HB Reavis, said: “The successful divestment of this high quality, fully let industrial portfolio to one of the sector’s top international investors reflects not only the quality of the underlying assets but also the success of our asset management strategy. These logistics centers are well-positioned to give the new owners continued upside and this transaction allows us to focus on our core segments of office and retail, while recycling the released capital into new opportunities.”
The White & Case team included Partners Ross Allardice, Petr Panek, Marek Staron, Martin Forbes, and Vaclav Kubr, supported by Associates Robert Hutton, Edward Higbee, Nicola Chapman, Karel Petrzela, Marianna Galusova, Kamila Dankova, Tomas Pazourek, Vladimír Ivanco, Simona Rapava, and trainee solicitors Chiara Luscombe and Elena Ruggiu.
Editor’s Note: After this article was published Allen & Overy informed CEE Legal Matters that it had advised HB Reavis on the transaction. The A&O team was led by Senior Associate Juraj Gyarfas. Partner Hugh Owen provided English law advice on the transaction documents and Senior Associate Vojtech Palinkas provided advice on real estate and construction issues. Tax-related advice was provided by London-based Counsel Tim Harrop, Prague-based Senior Tax Advisor Michal Dusek, and London-based Associate Mark Spinney.
