PL

Czeching out the opportunities next door

Investment & finance
Accolade is a Czech investor with a commercial property portfolio valued at over EUR 800 mln. You have 1.1 mln sqm of properties across the Czech Republic, Poland and Germany. Could you tell us something about how your business started out?

Lukáš Répal, chief operating officer, Accolade Group: Since 2011, we have basically been making space for another industrial revolution. That maybe sounds weird, but our core business since 2011 has been ‘on key’ land development for light production, logistics and e-commerce companies. We simply prepare class A modern halls from A to Z. We started in the Czech Republic, where the permitting process takes between 12 and 24 months – and in certain cases can take even longer. But of course, clients can’t wait that long. So to be competitive and to satisfy the demand we, together with our developer partners, install really good internal infrastructure for preparing the whole process. So now we can basically offer standard halls that can then be easily be adapted to the client’s needs. Our goal is to create logistics and industrial hubs in a variety of locations depending on the demand; and we have many locations prepared that can be developed in the future.

In Poland your business model is a bit different. You are acting as a pure investor without the land development aspect?

We work together with our development partner to search for opportunities and then our partner develops the buildings and, once they are developed, Panattoni stays on as the property manager while we are the full owners of the property.

When do you exit your investments?

At this stage our aim is to develop our portfolio and we are focusing on searching for attractive new plots. As a long term holder we don’t see any reason to sell. So we are not selling and not planning to sell.

Building up such a portfolio must consume a great deal of capital. Where does your equity come from?

The equity for development comes from our parent company and in the fund phase from private investors. The completed projects, which are fully leased, are then held in the fund.

Are these private investors European or exclusively Czech?

At the moment we are only marketing the fund in the Czech Republic; however, the investors are from other EU countries too.

You entered Poland in 2015. Why did you decide to expand your business into this market?

We always knew that this market had a lot of potential and we were especially amazed by how Poland had improved and built up its infrastructure. It was obvious that there is a lot of demand and so our plan is to build quality hubs here to satisfy this. We now have parks in Szczecin, Zielona Góra and also locations in the east of Poland, such as Białystok, Kielce and Lublin. We aim to cover the whole of Poland and build more in the country.

You tend to invest in smaller markets. Is it part of your strategy to operate in such smaller markets, rather than core ones like Warsaw, Łódź or Poznań?

In our view these are not small markets. They might not be core locations, but they are already quite significant. What happened with our first location in Szczecin basically confirms this. We saw big players like Amazon following us to this location. When we entered that market three years ago, we knew that it was going to change. It’s very close to Germany and has a port connecting it to Scandinavia. We really feel that this is going to happen to our other locations as well. So, all in all, we don’t regard these as small markets and feel that the perception of them can change, as it already has with Szczecin.

With 600,000 sqm developed in Poland, your Polish portfolio is now approximately the size of your Czech assets. Have you set yourselves any goals for further expansion in Poland and into other countries?

We are building a healthy, balanced portfolio of industrial real estate. With our new investment pipeline, Poland might soon be slightly bigger for us than the Czech Republic, but at the moment it’s about equal. No, we haven’t set ourselves any targets. We are very flexible and we act on the amount of investment from the current situation and the possibilities available. As long as we see that clients are coming, we will try to serve their needs.

How long will we have such a good market for development as we have now?

There’s still a lot of demand coming in, so I don’t see anything bad happening soon. I feel that the market is very positive and from our perspective it’s all going very well.

So, if everything is going as well as it’s going now, how big will Accolade be in two years’ time?

How about double in size? If the demand is there, why not!

Categories