The manager of Cromwell European REIT (CEREIT) has commenced its first €15 million ($22.0 million) logistics development in Czech Republic with four leases secured for approximately 40% of the new warehousing development, including two pre-leases for two of the five new units.
The development spans over 25,600 sqm in the country’s Lovosice ONE Industrial Park I and II.
The leases have been secured with the REIT’s new and existing tenant-customers. They are AutoMax, an importer and distributor of car oils, lubricants and auto parts focused on the Czech Republic and Slovak markets; Fiege, a subsidiary of German-headquartered Fiege Group, one of the leading 3PL and transport service providers in Europe; Lorenc Logistics s.r.o., a Czech-Republic-based international transportation company; and CTE Cargo s.r.o, a provider of logistics, e-commerce and warehousing services, customs clearance and last-mile delivery between China and Europe.
According to the REIT manager, Lovosice ONE Industrial Park I would be CEREIT’s first-ever greenfield logistics development. The manager adds that it is on track to commence the construction of the 14,679 sqm logistics warehouse in mid-2022. The development is expected to provide accretive returns in line with normal market logistics development margins.
“In just over a year since CEREIT’s initial investment in the Czech Republic, we continue to build on the strong logistics leasing momentum in this market. We are therefore pleased to announce the commencement of CEREIT’s first €15 million logistics development at Lovisice ONE Industrial Park I with 40% pre-leases already secured, a project identified in our recently revealed €250 million development pipeline,” says Simon Garing, CEO of the manager.
“Through this two-phase development project, we aim to maximise the asset’s long-term rental income and enhance its value in an area with high demand for modern logistics facilities. The 3.5 hectares development site is near the D5 highway, connecting Prague with major German cities such as Dresden and Berlin… At completion, we expect the total development to provide over 30,000 sqm of modern logistics facilities,” he adds.
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Further to his comment, Garing has indicated that the REIT will “continue to pivot towards a majority weighting to light industrial / logistics sector for CEREIT’s portfolio via acquisitions and now via new developments.”
“Overall, we continue to see good business activity taking place across Western and Central Europe, despite the ongoing Russian invasion in Ukraine as the European economies continue to open up post Covid-19 restrictions,” he says.
“We keep a close watch on the evolving situation. While there has been limited immediate impact on CEREIT’s business operations so far, we expect that rising energy, agricultural commodity and consumer prices will affect the financial markets and investor sentiment globally.”
Units in CEREIT closed at €2.16 on May 9.
