Since 2021, shopping centre Aupark Bratislava has earned investors almost 24 percent

by   CIJ News iDesk III
2024-04-25   08:26

The real estate fund AUP Bratislava subfund, whose only asset is the shopping centre Aupark Bratislava, has posted a return of 23.67 percent in the euro class since its establishment in 2021. Despite the difficult conditions during the coronacrisis, it has thus confirmed its ability to generate stable returns for investors. Aupark is characterised by its strategic location, sustainable operations, modern space and appropriate tenant mix, including premium brands, which contributes to its long-term appeal among visitors. Investing in the AUP Bratislava sub-fund therefore attracts both domestic and foreign investors.

The financial and investment group WOOD & Company, as the leader of the transaction together with its joint venture partner Tatra Asset Management, purchased the majority stake in Aupark from Unibail-Rodamco-Westfield in 2021. At that time, it was the largest single-asset real estate acquisition in Slovakia with a total value of EUR 450 million. The acquisition of the shopping centre was planned in three tranches. In the first, the investors acquired a 60 per cent stake, which was increased to 87 per cent in 2022, according to the agreed terms. The last tranche and completion of the purchase is scheduled later this year.

Since its inception, the sub-fund has delivered interesting appreciation. Over the past 12 months, it has delivered returns of 9.48 per cent in the euro class to its investors. "Although theacquisition took place during the coronary crisis, when sceptical views about the future of retail were also heard, time has confirmed the quality of our analysis and in-depth knowledge of the market. The purchase of Aupark proved to be the right step in our strategy of acquiring quality and attractive properties for our sub-funds. Almost 10 percent return over the last year is a clear signal to investors that such properties are worth investing in and have a strong place in their portfolio," said Martin Šmigura, Local Partner at WOOD & Company.

The performance of the AUP Bratislava sub-fund since its inception in 2021. Over the last 12 months, the fund has achieved an appreciation of 9.48 percent in the euro class. Source.

The AUP Bratislava Sub-Fund's income strategy is based on regular dividend payments with a targeted average annual dividend yield of five to six per cent. In addition, the external leverage ratio is set at a conservative level of approximately 50 per cent. "Aupark complements our real estate portfolio appropriately and at the same time represents an exceptional investment opportunity for our clients with stable returns and a favourable risk/reward ratio," adds Šmigura.

The investment benefits from the location or premium tenants Aupark offers 231 units for rent. Neither the pandemic nor inflation has significantly affected the shopping centre's occupancy rate, which stands at 98 per cent.

The location in which Aupark is located is also a significant contributor to the high occupancy rate and tenant interest. "The location gives us a competitive advantage, as we are the only shopping centre on the right bank of the Danube, i.e. in an area where almost 120,000 inhabitants live in Petržalka alone. Add to this the advantage of walking distance to the historical centre of Bratislava and close proximity to the Hungarian and Austrian borders," says Šmigura. Millions of visitors visit the shopping centre every year, whose purchasing power is 42 percent higher compared to the Slovak average.

Illustrative graphic from data available online as of April 2024, showing the growth potential of the Petržalka site.

Aupark, in addition to offering shopping opportunities, also offers them a space for leisure. In the neighbourhood there is the oldest and one of the largest parks in Bratislava, Janka Kráľa Park, connected by a bicycle path or several residential and office buildings. Several development projects are underway or planned in the vicinity, which will strengthen the catchment area of Aupark, as well as the potential for an increase in the value of the asset.

The largest green facade in Slovakia will contribute to sustainable operations.

The expansion of Aupark in the form of a new extension at the front of the shopping centre is also taking shape. Its opening is scheduled for autumn 2024.

As a result, the shopping centre's commercial area will increase by 6 thousand square metres.

This will create space for other global as well as domestic brands .

with a premiere launch on the Slovak market. It is worth mentioning the expansion of the existing brands Bershka, Pull & Bear and Zara. The latter brand will bring with its extension a new, state-of-the-art concept, which will become its flagship on the Slovak market. The globally popular EL&N London café will also present its first store in Aupark this year. The latter has a strong position on social networks thanks to its targeting of the young generation and attractive interior design of the premises.

As part of the expansion, it is also strengthening its sustainability position. The centre has been BREEAM In-Use certified at 2x Excellent since 2014, which is one of the most prestigious in assessing the sustainability of a building. A green façade is scheduled to be installed on the extension at the end of the summer, with nearly 40,000 plants grown specifically for this purpose. With an area of approximately 600 m2, this will be one of the largest implementations in Slovakia and the Czech Republic. In a busy part of the city, it will contribute
improve the microflora, reduce noise and dust pollution, but also increase natural humidity.

The structure consists not only of steel elements, but also reconditioned aluminium frames and glass from the original façade. Additional photovoltaic panels will also be added at Aupark. These currently on the roof of the car park provide an annual electricity production equivalent to the consumption of approximately one hundred thousand cubic metres of natural gas, 250 tonnes of CO2 and hundreds of kilograms of other saved emissions. The extensive infrastructure of charging stations for electric vehicles, or the possibility for charging bicycles and scooters, also contributes to sustainability.

"Not only us, but also the previous owners have systematically invested in the building, which we plan to continue in the coming years. The expansion of the shopping centre offers visitors even more ways to enjoy their leisure time and reasons to come back," concludes Šmigura.

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