Monthly reporting of REDSIDE funds for the period 6/2022
In June 2022, the appreciation of the NOVA Real Estate fund reached a value of 0.60% and thus the total appreciation since the beginning of the year is 3.46%. The positive trend in office space rentals continues. Negotiations on the extension of two existing leases were successfully completed. The Smíchov Gate building will continue to house the technology platform of the international corporation, which rents approx. 2,000 m2 in the building. For the Panorama building, it was possible to extend the existing rental contract to approx. 500 m2 with a Czech financial institution. After half a year, we positively evaluate the turnover development of the Orlice shopping center. First six month turnover growth, for the entire centre, is 4.8% compared to 2021 and 19.7% compared to 2019. The center remains steadily leased with a mix of tenants that complement each other, with a focus on the convenience of daily shopping within the locality of Hradec Králové and the immediate surroundings.
NOVA Green Energy Sub-Fund 1
The appreciation of Subfund 1 NOVA Green Energy for the month of June 2022 was +0.54%, and for the year 2022 +2.83% YTD.
The structure of the assets of Subfund 1 is gradually taking its final form, as the implementation of the announced restructuring of the NOVA Green Energy fund, which resulted in the division of the assets of the NOVA Green Energy fund between two subfunds, is being successfully completed. In addition to the technical completion of the "Side-pocket" transaction, which will be completed by the end of the investment activity of Subfund 1 and its entry into liquidation, we focus primarily on the development of Hungarian projects within the framework of asset management.
The above-average illumination of both our installations in Barcsi and Csabrendek positively affects the performance of the projects. Purchase prices are annually adjusted for inflation, which in Hungary reaches double-digit values this year. However, the growth of basic interest rates is acting in the opposite direction, when the local central bank recently increased the basic interest rate to 9.75% as part of the fight against inflation, which, especially in Csabrendek, is currently significantly increasing the cost of bank financing of the project.
Important information in the context of the implementation of the "Side-pocket" transformation is the fact that in June, finally after 6 months, the court approved the reorganization of Arca Capital Slovakia, a.s., and thus also the reorganization plan, which, according to our assumptions, would help gradually unblock the transaction in relation to the biomass heating plants in Topoľčany and Bardejov, and to further reduce the risks related to the acquisition of Hungarian projects into Subfund 1 from Arca Capital Slovakia, a.s..
NOVA Green Energy Sub-Fund 2
We are very pleased to be able to present to you the first monthly reporting of the newly created Subfund 2 of the NOVA Green Energy fund, which was created as part of the reorganization of the NOVA Green Energy Fund called "Side-pocket". The core vision of this Sub-Fund is to continue to develop the assets of the NOVA Green Energy fund worth EUR 47 million and thus smoothly follow the existence of Sub-Fund 1.
After months of work, focused mainly on optimizing the current portfolio, we are now again fully concentrating on the development of new energy projects. We are currently analyzing several projects in the region of Central and Eastern Europe.
We moved beyond the standard fund projects in cooperation with a sister fund, where we started the analysis of PV installation options on 11 properties of the NOVA Real Estate fund in the Czech Republic. At the same time, we received the first positive indications about the possibility of connecting PV plants to the industrial hall in Trenčín in the range of 2 MW.
The performance of Subfund 2 achieved an appreciation of +0.54% for the first month in June.
