Back from the brink
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In March 2009, in the darkest days of the credit crunch, Delin Capital bought out the troubled Belgian build-to-suit warehouse developer Immo Industry Group (IIG) and its portfolio of properties across Europe, including 18 industrial parks – mainly in Central and Eastern Europe. A new company was established from the ruins of IIG: Ulogis. At the time a press release from London-based Delin spoke of an intention to carry on with the company’s 29 build-to-suit projects, as well as moving into a new area for IIG – speculative development. It also mentioned a future intention to expand outside Europe. But although 18 months is a long time in real estate, almost nothing has been heard from Ulogis since. In fact, the new company has been embroiled over this period in sorting out the legal and financial issues it inherited from its former incarnation. With the process nearly complete, we spoke to the CEO of Ulogis, Bart De Sitter, about what the company plans to do next. “Ulogis has spent quite a lot of time over the last year and a half cleaning up the history from the bankruptcy of IIG, paying off debts to parties such as brokers, financial partners and contractors. Very recently we were able to refinance all the company’s bank loans for our Polish portfolio… So now all the financing for our assets has been taken care of,” explains Mr De Sitter.
According to the company’s CEO, the strategy now is to restart acquisitions in Poland and Ukraine. In Poland Ulogis currently holds six producing and two non-producing assets. In Ukraine the situation is rather different, where it owns undeveloped land and is not just involved in development and acquisitions, but property management for other parties. “In Ukraine we have around half a million square metres of land plots in varying stages of development, which were bought before the crisis. But as the Ukrainian market vacancy is still very high, we have no fixed timetable for developing these sites at the moment. We have started to manage of couple of properties for other people, again in different stages of development. Finally, as for development, we are involved in the design of a large new building for a client in the agriculture business in the south of Ukraine.”
It almost goes without saying that if Ulogis is retraining its focus on Poland and Ukraine, it must also be turning away from other markets that IIG had been active in. Indeed, the company is currently in negotiations to sell three properties outside the two countries. “We also own properties in Italy, France and the Czech Republic which are in the process of being sold. The facilities are all completed with happy tenants, but for us it makes no sense having only one asset in a non-core country, so we are trading them and will concentrate on our core markets – Poland and Ukraine,” says Mr De Sitter.
As well as the change in strategy to concentrate on just two countries, there has also been a significant shift in the company’s modus operandi resulting from its activities during the financial crisis. Despite what was said in last year’s press release, the plan now is for Ulogis to utilise the experience it has gained from sorting out its own affairs over the last 18 months to focus on acquisitions of properties faced with similar issues. As Bart De Sitter explains: “Our general idea is to buy properties that require work in terms of vacancy or legal issues. We are not looking to buy, for example, a ProLogis-type warehouse that is fully-let. We have a specialist in-house financial, legal, technical and commercial team that we have built to deal with the problems that we inherited from IIG. It is quite expensive to have such a highly skilled team and therefore we want to use the knowledge as much as possible.”
And how much is the new company planning to invest is such projects? “In terms of acquisitions we are not limited by financial resources, only by the size of our team, which currently only has ten people.” claims Mr De Sitter. “We have a target in mind that we would like to achieve. However, everything depends on the health of the market, so we will see what the future holds.”
Nathan North
According to the company’s CEO, the strategy now is to restart acquisitions in Poland and Ukraine. In Poland Ulogis currently holds six producing and two non-producing assets. In Ukraine the situation is rather different, where it owns undeveloped land and is not just involved in development and acquisitions, but property management for other parties. “In Ukraine we have around half a million square metres of land plots in varying stages of development, which were bought before the crisis. But as the Ukrainian market vacancy is still very high, we have no fixed timetable for developing these sites at the moment. We have started to manage of couple of properties for other people, again in different stages of development. Finally, as for development, we are involved in the design of a large new building for a client in the agriculture business in the south of Ukraine.”
It almost goes without saying that if Ulogis is retraining its focus on Poland and Ukraine, it must also be turning away from other markets that IIG had been active in. Indeed, the company is currently in negotiations to sell three properties outside the two countries. “We also own properties in Italy, France and the Czech Republic which are in the process of being sold. The facilities are all completed with happy tenants, but for us it makes no sense having only one asset in a non-core country, so we are trading them and will concentrate on our core markets – Poland and Ukraine,” says Mr De Sitter.
As well as the change in strategy to concentrate on just two countries, there has also been a significant shift in the company’s modus operandi resulting from its activities during the financial crisis. Despite what was said in last year’s press release, the plan now is for Ulogis to utilise the experience it has gained from sorting out its own affairs over the last 18 months to focus on acquisitions of properties faced with similar issues. As Bart De Sitter explains: “Our general idea is to buy properties that require work in terms of vacancy or legal issues. We are not looking to buy, for example, a ProLogis-type warehouse that is fully-let. We have a specialist in-house financial, legal, technical and commercial team that we have built to deal with the problems that we inherited from IIG. It is quite expensive to have such a highly skilled team and therefore we want to use the knowledge as much as possible.”
And how much is the new company planning to invest is such projects? “In terms of acquisitions we are not limited by financial resources, only by the size of our team, which currently only has ten people.” claims Mr De Sitter. “We have a target in mind that we would like to achieve. However, everything depends on the health of the market, so we will see what the future holds.”
Nathan North
