Monthly reporting of REDSIDE funds for the period 7/2022
In July 2022, the appreciation of the NOVA Real Estate fund reached a value of 0.61% and thus the total appreciation since the beginning of the year is 4.09%.
The development of the investment market in the Czech Republic in the second quarter of 2022 confirms the interest of local investors (81% of investment capital comes from the CEE region), after commercial real estate. Despite the slowdown in the second quarter, transactions in the total volume of EUR 1.2 billion were registered for the entire first half of the year, which significantly exceeds the previous year (+35%).
In particular, the local investment appetite keeps the so-called yields at the level of 4.25% for the best office buildings, 5.25% for Slovak industrial real estate and 5.25% for retail real estate.
In terms of leases, a six-year lease agreement was concluded with a Japanese technology company for approximately 300 m2 of office space.
At the same time, we are successfully finalizing negotiations with an Austrian bank regarding the financing of part of the office portfolio, while also taking into account the rise in rates, based on long-term cooperation, we managed to negotiate good terms until the end of 2024.
The appreciation of Subfund 1 for the month of July 2022 was 0.34%, and for the year 2022 it was 3.17% YTD
With regard to the constant growth of interest rates in Hungary, we have entered into negotiations with OTP bank regarding partial hedging in the form of interest rate swaps, or the NOVA Green Energy fund is considering repaying part of the loan, reducing debt and thus taking advantage of the weak exchange rate of the forint against the euro.
Sub-fund 1 also analyzes in detail the possibilities of optimizing production in the Krnča biomass power plant, including the straightening of supplier-customer relations. The current spot prices of electricity are almost three times higher than the state-guaranteed purchase prices, and therefore, with regard to the almost paid-off bank financing, we are considering other options regarding the sale of electricity and heat.
With effect from 1 August 2022, Sub-fund 1 does not formally plan, with regard to the gradual termination of activity, further investments in new resources. However, we are all the more focused on the management and optimization of assets falling into the "side pocket", with the aim of eliminating all risks and transferring these assets to Subfund 2 as soon as possible. Now, within a maximum period of 4 months, an extraordinary financial statement will be prepared, on on the basis of which a decision will be made on 1. the payment of an advance payment for a share of the liquidation balance in non-monetary form, in the form of investment shares of the Subfund 2. We have published detailed information in the form of questions and answers regarding the fund distribution project on the Subfund's website in the section " Information for clients".
