Trei Real Estate GmbH (“Trei”), a property developer and property asset holder for residential and retail real estate, increased its development volume to 960 million euros during the first half year of 2020. This implies an increase by 60 million euros since year-end 2019 (December 2019: 900 million euros). Compared to the prior-year figure (H1 2019: 730 million euros), the growth actually amounted to 230 million euros, which equals an increase by 31 percent year on year. A breakdown of the 960 million euros by type of use shows 175 million euros in the retail segment (year-end 2019: 170 million euros) and 785 million euros in the residential segment (year-end 2019: 730 million euros).
Overall, Trei currently has around 3,800 residential units under development or in planning in Germany, the Czech Republic, Poland and the United States. Out of this total, 40 percent are located in Poland, 35 percent in Germany, 20 percent in the United States and the remaining five percent in the Czech Republic. The total value of Trei’s existing portfolio remained unchanged at 1.2 billion euros by mid-year 2020 (year-end 2019: 1.2 billion euros). All in, Trei had 392 standing properties under management as of 30 June 2020. Thereof, 36 percent are located in Poland (144 assets), 31 percent in Germany (123 assets) and 17 percent in the Czech Republic (68 assets).
Pepijn Morshuis, CEO of Trei Real Estate, commented: “Despite the coronavirus crisis, we managed to continue and expand our development activities during the first half-year of 2020. All projects that were already under construction continued in spite of lockdown measures in the various countries, and did so without major disruptions. We keep concentrating on the implementation of our housing strategy. Our developments in Germany are making steady progress and our “Zollhafen Mainz” project entered its next phase this spring with the selection of an architectural firm. In April, we initiated another project in Hamburg with the acquisition of a plot. Aside from Germany, the most important market for Trei is Poland. We stepped up the effort to complete our developments in Poland, and our projects in Wrocław, Łódź, Poznań and Warsaw made good progress as a result. On the whole, Trei is developing 1,600 residential units in Poland. In the beginning of the year, we also kicked off our second US development in Charleston/South Carolina.”
The development activities in the retail property segment still concentrate strongly on retail parks of the Vendo Park brand in Poland. Overall, Trei owned 27 Vendo Parks as of 30 June 2020, thereof 17 in Poland. This year alone, Trei is planning to open another five retail parks in this country just east of Germany. Pepijn Morshuis commented by saying: “We intend to become the biggest retail park investor in CEE, especially in Poland. The potential for retail parks is still considerable, and far from exhausted.”
The transaction total by the end of H1 2020 amounted to 64 million euros. The sum total accounts entirely for acquisitions, whose focus is clearly on plots for Vendo Parks and multi-family residential real estate in Poland.
With respect to the second half year of 2020, Morshuis commented: “In the United States, we are currently weighing our options to engage in joint projects with new partners while pursuing our residential developments in the Carolinas at the same time. In Germany, we are reviewing our relatively large retail real estate portfolio to identify assets with overbuild potential for residential units.”
Matthias Schultz, CFO of Trei, added: “We are financing the expansion and continuation of our development activities by increasing our gearing ratio, among other strategies. In the ongoing year, we intend to secure a total of c. 205 million euros in new bank financing. It is planned to raise our leverage to somewhere between 40 and 45 percent by the end of this year. We even have a little more room to manoeuvre in the medium term, and are aiming to go as high as 50 percent.”