Emira Property Fund has acquired an effective 25% initial stake in Luxembourg-headquartered Polish property developer and investor, DL Invest Group, through a €55.5 million investment.
DL Invest Group has a gross asset value of approximately €730 million with a net asset value (NAV), prior to Emira’s investment, of €278 million. The REIT’s equity interest has a face value of €101.5 million, with the option to acquire a further interest of €45.5 million. If exercised, this second tranche will result in Emira holding 45% of the issued shares of DL Invest Group.
This move has increased Emira’s international investments to 32% of its portfolio, with 19% in the US and 13% in Poland, while 68% remains in South Africa.
“We’ve taken the time to find the right partner, and for us, this is the right way to enter this economy at the right time. This method of capitalising on opportunities in the growing Polish economy aligns with Emira’s co-investment model, which the market is familiar with, where we mitigate risk as a minority partner with solid protections paired with an established local specialist seeking similar outcomes, resulting in informed investment decisions and improved returns,” comments Geoff Jennett, CEO of Emira Property Fund.
Emira’s investment offers an attractive return profile, with a minimum Internal Rate of Return (IRR) on a five-year basis of approximately 20.9% in Euros, yielding at least 7.2% in cash per year, escalated annually by the Harmonised Index of Consumer Prices for the European Area (HICP) of between 2% and 4%, with the balance on redemption.
The capital injection provided by Emira, from its current balance sheet using available debt facilities and proceeds from recent disposals, will fuel DL Invest Group’s logistics warehouse development pipeline and propel it towards becoming a €1 billion business.
“For Emira, taking a stake in DL Invest Group provides security of sector, country, company, and returns – we’re not only excited about the diversification for Emira but we are also very excited about co-operating with DL Invest Group to maximise what we can achieve by playing to our strengths together,” says Jennett.
