REALIA investment fund outperformed inflation with an eleven percent appreciation to investors
REALIA FUND SICAV, a qualified investor fund that focuses exclusively on investments in regional retail parks, ended 2023 with an annual appreciation of 11.23% (CZK investment shares) and 10.10% (EUR investment shares), respectively. The Fund's favourable performance is mainly due to inflation and the financial instruments used to keep credit costs under control. The total number of investors grew to 369 in 2023 and the fund's assets reached CZK 1.125 billion. The value of the fund's real estate exceeded the two billion mark. Annual rental income amounts to 146 million crowns.
The Fund's performance last year is the result of a conservative strategy. Regular rent collections increased mainly due to inflation clauses in all lease agreements. However, what has also contributed to the Fund's favourable performance, and what sets the Fund apart, is its strategy of funding at fixed interest rates, typically for a five-year period. As a result, the fund is not under pressure from rising borrowing costs in terms of its current property portfolio. "Since its inception, the fund has gone through periods affected by various stress tests. Covid, high energy prices, rising interest rates, high inflation and the ensuing cooling of retail consumption. We are pleased that all of these tests have confirmed that the Fund is set up correctly. At the same time, retail parks have proven to be one of the most resilient segments within real estate. I am convinced that our investors appreciate our clearly set investment strategy and exclusive focus on retail parks," says Tomáš Oplíštil.
The positive development of the REALIA Fund in 2023 was also due to the expansion of the portfolio by a retail park in Moravská Třebová last year. "This acquisition perfectly follows REALIA's investment strategy, which invests investors' funds in completed and fully leased retail parks. The regular rental income generates an appreciation of the fund immediately after their acquisition. In addition, all lease agreements are subject to an inflation clause, which helps to maintain or increase the value of the invested property. Thanks to this strategy, the fund has delivered its investors an appreciation of 11.23% in the crown class and 10.10% in the euro class of investment shares for 2023," explains Tomáš Oplíštil, a member of the fund's investment committee and the group's commercial director.
The REALIA fund has entered 2024 with a new acquisition, this time of the retail park Hustopeče. ROSSMANN, SPORTISIMO, PEPCO, KiK, SUPER ZOO, DATART, Orion and Wiky. All tenants benefit from the direct vicinity of the adjacent KAUFLAND hypermarket. The retail park is fully leased with an average lease length exceeding 6 years. The acquisition brings the fund's portfolio to 16 properties with a total value of over CZK 2 billion. "We have one more acquisition in the pipeline for the first half of this year and are looking at others. The priority still remains a good location and a quality, meaning a resilient, tenant mix. We are therefore continuing our acquisitions and we want to continue to deliver attractive and stable value for our investors," concludes Tomáš Oplíštil.
