Tristan JV sells Czech logistics portfolio to P3 for €523m

Tristan Capital Partners and its joint venture partner VGP have carried out the long-awaited sale of the Bora Bora portfolio of Czech logistics assets to P3 for €523 mln.

The sale is the biggest single deal for Tristan since the firm was established by CEO Ric Lewis just five years ago and the fourth-largest logistics portfolio transaction in Europe since the start of 2012, when activity in the market began to gather pace, according to Real Capital Analytics (RCA) data.

Tristan's CCP III and EPISO funds are selling 58 modern logistics buildings with a total of 627,000 m2 of lettable space that were acquired in a joint venture with VGP in 2011. The transaction includes 36 hectares of development land, primarily around Prague. The sale to European logistics specialist P3 is scheduled for completion in the fourth quarter of 2014, subject to the finalisation of contract terms and regulatory approval.

The Tristan funds were advised by JLL, while CBRE advised P3.

Rui Tereso, head of portfolio & asset management at Tristan, said: 'This exit follows closely on the heels of a €472 mln sale we did in the same sector of assets in Germany, Poland and France to Segro a few months ago. It means Tristan has sold over €1 bn in logistics assets in 2014 alone, representing the culmination of a structural market investment opportunity our research first identified 10 years ago.'

The portfolio of existing assets includes the logistics park (Horni Poèernice) in Prague totalling 390,000 m2 of lettable area and 26 hectares of land. The remaining assets are in key strategic hubs including Plzen, Liberec, Hradec Kralove and Olomouc and total 237,000 m2 of lettable space and 10 hectares of land.

These properties, which have all been built within the last seven years, are occupied by tenants such as MD Logistika, Ontex CZ, Knorr Bremse, Activa Spol and Grupo Antolin Bohemia.

Jean-Philippe Blangy, executive director of portfolio and asset management at Tristan, added: 'Working with our local partner VGP, we have successfully repositioned the portfolios to maximise occupancy. We have maintained an average lease term in excess of four years and added further value through the development of additional grade A space.'

CCP III raised a total of €420 mln from institutional investors by February 2012, while EPISO raised around €800 mln with a final close in May 2008.

VGP
Euronext Brussels-listed VGP said it will primarily reinvest its part of the sales proceeds in its core markets located in the mid-European region and especially Germany.

For VGP this deal will have a significant positive impact on its growth strategy which is concentrating more and more on the German market. While this market has already emerged as a new core market for VGP during the last two years with substantial amounts invested in the acquisition and build-up of a strategically located land bank i.e. located in proximity of important urban centres, the sales proceeds of the transaction received by VGP will enable VGP to accelerate the nationwide investment and project development activities of VGP in Germany.

Jan Van Geet, CEO of VGP, said: 'This deal underlines the quality of what we have realised in the past and allows us to accelerate considerably our ambitious growth plans in the future. As we have been recording an increasing demand for high-end and modern industrial properties in Germany and Eastern Europe, now is an optimal time to sell and to re-invest the sales proceeds in new greenfield development projects.'

VGP has been retained by P3 to continue providing property and facility management services to the disposed portfolio.

P3
Commenting on the acquisition, Ian Worboys, P3 CEO said: 'This investment continues our expansion strategy as it strengthens the company's position in the top rank of European logistics warehouse owners. The Czech Republic is a strategic market for us because it sits at the crossroads of the main transport routes between Western, Central and Eastern Europe.

'The assets we acquired in this transaction are situated in prime logistics locations and are amongst the most modern facilities in Europe. Combining the acquired facilities with our existing holdings means P3 now owns one of the largest networks of logistics parks across Europe and we can offer our extensive customer base even more real estate options.'