The Accolade fund thrived last year despite challenging circumstances and ranked among the largest funds in Central Europe
Accolade Industrial Fund achieved a return of 9.33% in euros and 8.49% in Czech crowns. It reached its expected appreciation level despite unpredictable economic conditions.
The fund’s success is also demonstrated by these further data points:
- a) Thanks to the inflation clauses included in lease contracts, rental income increased by 5.3%, reaching 85 million EUR (around 1.9 billion CZK).
- b) The value of the portfolio, which includes 29 parks in four countries, exceeded 1.5 billion EUR (approximately 33 billion CZK).
- c) In the past year, the fund surpassed 1.6 million m² of premium industrial space, making it one of the largest funds in Central Europe.
Property markets across Europe are contending with rising yields, which puts pressure on the value of property. But this is not true of all market segments. The industrial property sector has continued to thrive over the last year. “There is still a shortage of warehouse and manufacturing space on the market. Clients continue to come to us from a range of logistics and manufacturing companies, not to mention e-commerce firms. Although the data is showing a slight year-on-year decline in this sector, we are not seeing this in terms of interest in new spaces,” said Milan Kratina, Accolade CEO.
Thanks to record low vacancy rates and historical rent growth, the portfolio’s value is showing no signs of decreasing. This is due, among other factors, to the inflation clauses included in the lease contracts, which allow rents to continue to rise. “Nevertheless, all the rent from the fund’s parks has been paid, and the spaces are fully occupied, with the exception of premises in the Polish Minsk Mazowiecki site previously used by a company which specialised in the production of respirators and PPE during the coronavirus pandemic,” added Kratina, explaining that the fund now has a suitable opportunity with a new tenant to enter into more favourable terms than was the case with the former.
The fund once again meets its predicted annual return
Over the past year, Accolade Industrial Fund achieved a return of 9.33% in euros, 8.49% in Czech crowns, thus meeting its forecasted level of appreciation. The fund’s portfolio also grew significantly last year. By September, it had passed the milestone of 1.5 million m² of premium industrial space. Noteworthy additions include a number of sites across Poland, such as the Štětín and Gorzow Wielkopolski parks, or the first multi-story distribution centre in Kojetín, Czech Republic for global e-commerce giant, Amazon.
Today the portfolio’s value is up to around 1.5 billion EUR, which is roughly 33 billion CZK. In the last quarter alone, two new projects were added to the fund in south and south-west Poland, specifically in the cities of Częstochowa and Legnica. As a result, the fund ranked among the largest and most stable property funds in Central Europe over the past year.
The positive direction of the fund, into which more than 3,000 investors have already committed resources, is also well-regarded in the financial sphere. The fund was able to successfully refinance a portfolio of five completed and fully leased industrial parks in Poland. Polish bank Helaba, one of Europe’s largest banking houses, provided more than 129 million EUR (approximately 1.3 billion CZK) for the refinancing. Thanks to this loan, the fund can increase the portfolio’s profitability in the coming years.
The forecast for this year’s development appears favourable for the moment. In the first half of the year, the most significant inflation clauses will be included in the fund’s performance so far, and its portfolio will be bolstered by a first property in Spain. “If we take into account the new level of rents from industrial properties across markets, it is significantly higher than what we currently have written into our contracts, and I believe that we will continue to fight successfully to maintain the value of the properties in our portfolio as it stands. Or it could even bring with it further acquisition opportunities with higher returns than in 2021 and part of 2022,” concluded Kratina.