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“Hadovka out-performs the market”
INVESTMENT OPPORTUNITY Hadovka Office Park is an investment opportunity with an attractive risk-weighted yield and impressive financial performance. The relocation of its anchor tenant in 2010 prompted a change of control and a new strategy focussed on long-term stable underwriting, tenant relations and lifestyle amenities. Some 18,000m2 have been leased to bring the property to full occupancy with strong commercial terms during a 3 year workout period. Hadovka has managed to draw tenants from established submarkets demonstrating the buildings quality and the strong attributes of Prague 6 as an office sub-market.
Located in Prague 6 on the Evropska corridor within close proximity to the airport and city center. A Hochtief development completed in two phases, 1999 and 2000. Comprehensively restructured by Resolution Capital Management from 2010 to 2013. Fully occupied with weighted average unexpired lease term of circa 2.91 years and average headline rents of € 13.23/m2/mo. Recent lease extensions demonstrate the tenant retention power and competitive strength of the asset post restructuring. Diversified credit tenant rent roll, a resilient stacking plan and coherent long-term strategy for full occupancy. Extensive improvements have been made to M&E systems, the building and lifestyle amenities. Hadovka is managed by an on-site (in-house) operating platform organized and resourced to run the asset at full occupancy and cash flow.
PROPOSAL Hadovka Property s.r.o. is a Czech registered SPV. Offers are invited subject to contract for 100% of the share capital of the Czech SPV. Contact the seller for pricing guidance, data-room access and transaction procedure information.
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Contact the seller:
GEORGE LESLIE george.leslie@hadovka.com
“A precedent setting workout success”
ONE OF PRAGUE'S MOST RECOGNIZABLE OFFICE BUILDINGS Attractive investment volume › Full cash flow in-place › Attractive yield opportunity
Strong releasing history › Ca 18 000m2 leases signed in ca 36 months › Robust stacking plan › Excellent tenant relationships and goodwill in-place › Impressive post-workout lease extension performance
Diversified income stream › Credit-tenant rent roll › 12 core-strategic tenants › 40 tenants in-place › Smallest office tenant ca 18sqm
Extensive investments › New air cooling system › New building management system › New food services facilities › Extensive new tenant improvements › Extensive other property improvements › Detailed long-term capex plan in-place
“Hadovka is positioned to outperform the market on a long-term basis." 4
In-house management team › High-performance tenant service team › Strong new branding in-place › Focus on tenant services & amenities to promote tenant retention
LOCATION “Prague is a low-cost European service center and gateway to CEE” Address Evropska 2589/33, Prague 6, Czech Republic Relative location: North-west of city center
Situated on a high profile arterial route between and within close proximity to both Prague’s international airport and city center in a prime neighborhood of executive residences, universities, embassies and commercial services. Prague 6 office sub-market, until recently, has been a relatively under developed, representing less than 10% of the city’s office stock, though it has strong office location attributes.
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Improving transportation infrastructure development and complimentary on-going office development at Dejvicka is bringing the Prague 6 office market into focus as one of the established office hubs in city. In particular, regional tenant offices increasingly look to Prague 6 for office space.
“Major infrastructure expansion improving Prague 6 communications”
COMMUNICATIONS INFRASTRUCTURE EXPANSION Extensive transportation infrastructure development and improvements including inner ring road tunnels, metro Line A expansion and Evropska tram line improvements shall significantly enhance Prague 6 communications. Ring road tunnel connections: Strahovský tunnel connecting Prague 6 with Prague 5 opened in 2011. The Blanka tunnel, opening scheduled for 2014, shall connect Prague 6 to Prague 8 to complete the inner city ring. Metro line connections: Line A shall be extended north-westward from Dejvicka by four stations: Borislavka, Nádraží, Veleslavín, Petriny and Nemocnice Motol.
Vehicle access to the Property is excellent as Evropska Street is 4-lanes (2 in either direction) and the principal arterial route from the city center to the airport. The side and rear streets bordering the property facilitate efficient traffic access and egress from rear underground parking entrances. A lane at the frontage of the property, off Evropska, facilitates drop-off areas and parking.
Distance to:
Airport: 8.1 Kms » 14 minutes by car City center: 7.7 Kms » 13 minutes by car in light traffic, 25 minutes peak traffic
2 tram stops from Dejvicka metro station (line A)
Prague 5 (Smicov): 8 minutes by car (Strahovský tunel)
1 tram stop from Borislavka metro station, opening 2014
Prague 8: 8 minutes (Blanka tunnel)
Tram line connections – A tram station is situated in front of the Property:
2 tram stops to Devicka commercial area The Evropska tram line has been substantially improved.
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PROPERTY DESCRIPTION The Property is a Hochtief development completed in two phases in 1999 and 2000. The building reflects good original design and execution. Consistent maintenance and extensive recent improvements have preserved the representative stature of the property.
The building configuration comprises a footprint of 5 256m2, four floors above ground, two underground levels of parking and extensive garden areas on a sloping site of ca 11 260m2. It is partitioned into four sections with individual lobby entrances. Flexible partitioning of space to unit sizes less than 100m2 or contiguous occupation of a floor across the entire building is possible.
Specifications Air cooling throughout Flexible open / cellular space planning 1.35 meters grid partitioning Floor to ceiling clear height of 2.75 meters Suspended ceilings Raised floors / floor boxes Optical cabling 24/7 security / reception services External blinds Openable windows Loading bay / freight elevators Magnetic security card access system Visitor parking CCTV
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Approximate measurement summary Office 22 374 m2 Fitness 558 m2 Canteen 368 m2 Coffee shop 34 m2 Storage 1 667 m2 Parking (UG) 401 spaces Parking (AG) 8 spaces Parking ratio 1/55
Lifestyle amenities have been introduced in recent years to promote tenant retention and the overall competiveness of the property. New canteen and main lobby coffee shop facilities have been developed as well as a fitness facility, dance studio and common terrace areas.
“Major investments have been made to M&E systems and the overall building standard”
CAPITAL EXPENDITURES Major investments have been made to the property in recent years. New cooling systems and BMS throughout (final phase pending completion) Refurbished underground parking levels New food services facilities including kitchen, ventilation systems and seating areas New coffee shop, common terrace and garden areas New health and fitness facility Refreshed and upgraded WCs Entrance lobby reception upgrades New exterior surface parking facilities New signage totems Extensive general upgrades to the property including 18 000m2 of tenant improvements as well as common area and technical improvements
A detailed capital expenditure plan and budget is in-place. Depending on the implementation schedule and preferred technical solutions, this could represent approximately € 200 000 of annual expenditure for the next 10 years. This is not reflected in the NOI stated herein.
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FINANCIAL OVERVIEW
Headline (avg/m2 /mo) €13.23
Trends WAULT improving with robust lease extension pipeline Rolling average net effective rents improving Restacking to accommodate core strategic lease expansions / extensions Qualitative improvement of services and amenities Improvement of building technical standards with on-going capex implementation
WAULT (years) 2.91 NOI € 3 890 137 Occupancy 99.40% Vacant office (m2) 134 Vacant storage (m2) 47 Vacant parking (space) 23 Vacant signage (places) 14 No. key tenants 12
This document is issued by Resolution Capital management Ltd. It is not for general public distribution and any other persons who receive this document should not rely on or act upon its contents. This document may not be distributed or reproduced in any form without the express permission of Resolution Capital Management Ltd. No responsibility or liability is accepted by Resolution Capital Management or by the Seller for any action taken on the basis of the content of this document. This document does not constitute or form part of any offer or solicitation to issue, sell, subscribe or purchase any investment in any state or jurisdiction to any person to where it is unlawful to make such offer or solicitation in such state or jurisdiction. The distribution of this document and the offer and sale of interests in the asset in certain jurisdictions is restricted by law. Taxation will depend on individual circumstances. Property is an illiquid investment and may result in deferment of redemption.
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Total no. tenants 40 Largest tenant area (m2) 3 265 Smallest tenant area (m2) 18,22
* Figures are estimated as at 30-June-2014 and subject to potential purchaser's own due diligence.
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