Trei Real Estate GmbH (Trei), a German developer and property asset holder specialised in residential and retail real estate, successfully expanded its business even in 2020, the year of the pandemic. The development portfolio grew by 33 percent to 1.2 billion euros (2019: 900 million euros). The sum total breaks down into 1.0 billion euros in residential real estate and c. 200 million in retail real estate. The proprietary portfolio of Trei maintained its total of c. 1.2 billion euro. It includes 349 assets.
Pepijn Morshuis, the CEO of Trei Real Estate, commented the year-end result: “We continued to pursue our expansion trajectory in 2020 despite all the constraints imposed by the coronavirus pandemic. Our three developments in Berlin, which will deliver roughly 550 flats overall, are progressing as planned. A major milestone for Trei was the completion of the Port-o-Prenz project on Pappelallee. In addition, we are either preparing or already moving ahead with projects in Hamburg, Mainz, Munich and Düsseldorf.”
In regard to Trei’s activities in Poland, Morshuis said: “One of our focal points is on residential construction activities because we still see serious potential in this housing market. We were able to launch our project in Łódź with around 550 apartments and to keep moving forward with the Bacciarellego project of roughly 280 apartments in Wrocław. Further projects in Poznań and Warsaw are in preparation. All things considered, around 1,350 apartments are either under construction or in planning.”
About Trei’s third major market, the United States, Morshuis had this to say: “In addition to the residential project in Charlotte, North Carolina, we were able to kick off a project in Charleston, South Carolina, in 2020. Both projects are progressing on schedule, with parts of the project in Charlotte already completed and the first tenants having moved in. Another development is in preparation in Cary, North Carolina. We were also able to secure another two pieces of land, one in Charlotte, North Carolina, and the other in Nashville, Tennessee. The way things look at the moment, the US appears to be putting the pandemic faster behind them than Europe. With this in mind, I’m optimistic about the imminent lettings.”
Retail Park Construction an Important Mainstay of Trei’s Strategy
Aside from the construction of residential real estate, retail properties account for c. 200 million euros of the development portfolio. Matthias Schultz, the CFO of Trei Real Estate, elaborated: “The construction and management of retail parks under the Vendo Park brand in Poland, in the Czech Republic and in Slovakia is an important mainstay of our strategy. In 2020, we managed to complete and open seven new Vendo Parks. This brings the number of Vendo Parks now in Trei’s portfolios up to 31. In addition, we have secured 19 plots where new projects are already under development. Trei is planning to open another seven retail parks in 2021.”
Trei’s transaction volume in 2020 added up to 280 million euros (2019: 90 million euros). The focus was clearly on acquisitions, which accounted for 268 million euros of the total. These were matched by sales worth 12 million euros. The acquisitions represent essentially land for further developments – such as residential developments in the United States, the plot in Hamburg, and seven new plots for Vendo Parks in Poland.
Pepijn Morshuis, the CEO of Trei, faces 2021 with optimism: “The economic development will be strongly influenced by the way the pandemic evolves going forward. I have every hope that we will see a visible improvement in the second half of the year. In Germany, we are in the process of screening our large portfolio of standing retail real estate for assets that could be overbuild with apartments. In the United States, we are looking into new residential projects in the South, while in Poland the market for rental housing construction is picking up steam.”
CFO Schultz added: “Despite the coronavirus crisis and the increased reticence among banks, we managed to secure new financing arrangements in a combined volume of 171 million euros last year. By the end of the year, Trei’s gearing ratio stood at 31 percent. We intend to keep raising the ratio to finance new developments. Our medium-term goal is an LTV of 45 to 50 percent. In fact, we are planning to finalise several large-scale finance packages in the coming months.”