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Investment opportunity into a modern retail park in Piešťany and an innovative investment structure with protective instrumentsfor Crowdberry investors.Retail Park Piešťanyis 100% occupied with lease agreements with established brands Pepco, dm drogerie and Super zoo. Tenant agreements started in autumn 2019 when the park received use approval.

Retail Park Piešťany has a net leasable area of ca. 1 500 sqm and is located on a land plot of ca. 4 100 sqm situated right next to a Lidl grocery store and near Tesco and Kaufland supermarkets, 4 min by car from the city centre and with direct access to the D1 motorway. 

3-year investment horizon with stable returns

Standard length of lease contracts (weighted average unexpired lease term is 5.1 years, no possibility of termination)

Tenants are reputable companies with high revenue growth

Financing partner is Tatra banka and general contractor is construction company Keraming

Inflation protection: rent will be increased every year by 75% of inflation

Liquidity preference for Crowdberry investors and other protective instruments

Developer is KLM real estate (“KLM’) who has 17 years of experience in real estate development, a strong team and an impressive portfolio of 33 completed projects of which 16 involved the development of retail parks. In total 41 tenants and 112 retail units for lease

KLM has successfully exited from number of their retail park developments. In 2018 and 2019, KLM sold a portfolio of 10 retail parks with a total leasable area of 39,000 sqm to Tatra Asset Management

The value of retail parks in Slovakia has risen every year over the past five years. Retail park yields have decreased from 8.0% in 2015 to 7.25% in first half of 2020. This represents a growth in value of ca. 10.3% due to a compression in yields alone. 

Increases in retail sales also benefit retail parks owners. Retail sales in September 2020 exceeded the sales of the previous year – an annual growth of 5.8% was the highest annual growth since October 2018. We also saw a 5.9% y-o-y growth in sales in the category "other household products in specialized stores”.

Retail parks mainly benefit from good transport accessibility, free parking and easy access to groceries and consumer goods.

COVID 19: The store units in retail parks typically have their own entrances and are accessible directly from the parking lot (same for Retail Park Piešťany), which to a certain degree limits contact with other shoppers and creates an advantage for retail parks compared to an enclosed shopping centre. 

MARKET

1. Acquisition of an 80% ownership share 

The investment will be used to purchase an 80% share in the company that owns the retail park. KLM cooperates with multiple financial partners and decided to further its cooperation with Crowdberry after previous positive experiences with projects such as KLM Nitra and KLM Trnava. Crowdberry investors have an opportunity to become co-owners of a retail park in Piešťany and receive the profit from lease agreements as well as the profit from sale of the property in the future. The business plan is to hold the building for a period of 2–3 years and thereafter sell the property for a higher price included within a larger portfolio of retail parks/industrial buildings owned by KLM together with projects that are currently in preparation. In case the retail park is not sold within 3 years, KLM real estate a.s. is obliged to buy back the shares from Crowdberry investors at a predetermined price.

2. Preliminary investment timeline 

Sale of retail park on the market / exit of Crowdberry investors: 2023–2024  

3. Status of the project at the time of investor entry

Building approved for use, ongoing 5 – 7 year lease agreements with Pepco, dm drogerie and Super zoo (signed in autumn 2019)

Retail park is located right next to a Lidl grocery store, with direct access to the D1 motorway and next to a main road to the city centre which all help to generate footfall (customers) for the retail park. The park is in a strong catchment area, e.g. only 50 m from the Juh housing estate, 1.6 km away from the city centre and close to Tesco and Kaufland supermarkets. More information about the location can be found in the gallery at the bottom of this page and in the “Information on Investment” document. 

Lidl Slovakia owns 100% of the building they occupy, which increases the probability of them keeping their presence at this location over the long term and hence the location maintaining its attractive position as a destination for buying food and other typical daily products.

5. Security of investment and control:

Crowdberry investment will be repaid before any money is paid to KLM, limiting the downside risk of your invested capital.

All changes to the business plan are subject to the approval of the Supervisory Board ensuring oversight and an influential position for the Crowdberry investors.

If the property is not sold within 3 years, KLM real estate a.s. is obliged to buy back shares from the Crowdberry investors.

If KLM does not perform the above mentioned legal commitment, Crowdberry is able to start the sales process of the retail park without the prior approval of KLM. In this scenario, Crowdberry’s liquidity preference (preferential payment of money) is extended to equity + yearly return of 11%. More information and the minimum price at which the retail park can be sold for can be found in the Information of Investment (IoI) document.

PROJECT

KLM has successfully completed development projects throughout Slovakia. They focus on development of retail parks, logistics parks as well as residential projects.

Over the past 17 years, KLM has successfully completed 33 projects of which 16 projects were development of retail parks (the map of realized and projects in preparation can be found in the gallery at the bottom of this page). KLM generated several investment opportunities for its partners in total combined value of € 250 million. KLM has a similar successful track record in the sale of projects to institutional investors (e.g. Tatra Asset Management, P3 logistics parks and První Penzijní). In 2018 and 2019, KLM sold a portfolio of 10 retail parks with a total leasable area of 39,000 sqm to Tatra Asset Management.

KLM is currently expanding its portfolio and is planning the development of six new retail parks with 63 retail units. KLM signed seven new retailers to its tenant portfolio for these upcoming retail parks.

KLM’s project references include a retail park in Zvolen, a shopping centre in Dunajska Streda and a logistics park in Zilina. Their tenant portfolio includes several well-known retail, logistics and delivery service companies such as Deichmann, BILLA, Slovak Parcel Service, DHL, Volvo, Mountfield, Teta drogerie, Tesco and alza.sk.

For more information please visit KLM’s website: www.klmre.cz/en 

PARTNER

ASB: ASB GALA 2020: Nominácie na ocenenie ASB Developer roka – v segmente retailu 

Webnoviny.sk: Tatra Asset Management je novým majiteľom portfólia retail parkov v SR 

E15.cz: Retailové parky jsou investiční sázka na jistotu 

Retrend.cz: Společnost Trei otevírá již desátý Vendo Park v České a Slovenské republice

Ihned.cz: Portiva zahájila nákup obchodních parků za 2 miliardy. Investice do nemovitostí má představovat třetinu aktiv firmy

Retrend.cz: Retail parky skupiny CPI Property Group jsou kompletně obsazené

MEDIA

The annual return, known as the yield, for retail parks on the Slovak market is slightly above 7.0% p.a. The yield is the return under the condition that only the company’s own resources are used for the investment into the property, i.e., without the use of bank financing. The company that owns Retail Park Piešťany drew on bank financing to the amount of around 50% of the value of the property, which is a conservative degree of debt. The annual expense for the bank loan in this case reaches almost 2.0%. If the money borrowed from the bank at 2.0% is invested into real estate that generates a yield of 7.3% p.a., the return on equity, i.e., your investment, could even reach more than 10.0% p.a.

How can you achieve an annual return above 10% when investing in leased real estate?

Crowdberry investors will purchase a share of KLM real estate from the company, which owns the real estate, thereby acquiring the opportunity to achieve yields typical for owners of retail parks. For KLM real estate, Crowdberry does not represent a form of real estate financing like credit, bonds or other types of loans. KLM real estate is selling the stake with the aim of freeing up equity and investing it in other prepared projects.

Why is KLM cooperating with Crowdberry, when there are less expensive sources of financing? 

The current owner of KLM real estate will remain a co-owner together with Crowdberry. The joint business plan is to sell the property on the market no earlier than in two years, with the goal of maximising profits. If a suitable offer appears in two years, then the real estate will be sold in two years; if it gets an offer in three years, then the sale will take place in three years. Along the same lines, the higher the price for which the real estate is sold, the greater the yield that Crowdberry investors will receive. If the real estate is not sold within three years, then KLM real estate is obliged to buy back the stake from Crowdberry for a previously agreed price. You can find more information about the purchase obligation on pages 23 and 24 of the information memorandum. 

Why is the exact amount of the yield and precise time for payment of the investment to the investors not set?

Retail Park Piešťany

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Fully leased Retail Park near Piešťany city centre 

Crowdberry investors have already invested over €65 million in over 40 companies.

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