Eika Real Estate Fund (EREF), a real estate fund managed by the fund management company UAB Eika Asset Management (EAM), has invested in Business Centrum Tesla2 (BCT2), a Class A business centre in Košice, the second-largest city in Slovakia. EREF acquired a 50% stake in Kosice HoldCo SRO, which owns the business centre, from the European City Estates (ECE) group. The transaction amounted to EUR 35 million.
Slovakia and the city of Košice are at the centre of an economic hub between four European countries - Poland, the Czech Republic, Austria and Hungary. The region is home to world-class brands, and Košice is one of the most attractive locations in the region for the development of its service centres. In addition, it has a highly developed ecosystem of IT companies and professionals and as many as six universities. According to Viktorija Orkinė, CEO of EAM, the decision to expand EREF's investment portfolio abroad and to this Central European region was made due to the strong market knowledge of its partner ECE and the very favourable conditions for bank financing.
"Entering a new market usually takes several years, as it requires a detailed analysis and familiarity with the country or region and its specificities. Our partner ECE, which has been working in this market for many years, helped us shorten this process and added security and confidence. In addition, the conditions for bank financing in the region are very attractive, which allows us to achieve the desired returns for our investors. Although the Baltic States are still our priority, I believe that there can be more investments in Slovakia or other Central European countries - it is no coincidence that when we created Eika Real Estate Fund, we strategically planned our territory to be Central and Eastern Europe," says V. Orkinė.
The location of the BCT2 business centre, built at the end of 2017, is strategically attractive as it is situated between the Old Town of Košice and the central shopping district. The seven-storey business centre has an area of over 15,000 sqm and is Leed Gold certified. The main tenants include international IT and insurance companies such as T-Systems, Diebold Nixdorf, Colonnade and Dovera.
“ECE had the opportunity to sell the BCT2 business centre to institutional investors, but as this project is important to me personally, this joint venture deal is much more acceptable, with EREF becoming a 50% partner in the project. I have already had excellent experiences with both EAM and EIKA Group in the past, so I appreciate this new and close cooperation between two complementary partners," says Dejan Mansfeld-Rupnik, CEO of ECE. Business Centrum Tesla2 is EREF's seventh investment. EREF's investment portfolio also includes the Highway Business Centre and Audi and Volkswagen car dealerships in Vilnius, the DHL Lietuva terminal at Vilnius Airport, a logistics centre for Tamro, the manager of BENU pharmacies, in Kaunas FEZ, as well as a production base for ViaCon Baltic in Kaunas district.
EREF is the second real estate fund managed by EAM investing in commercial real estate. EREF invests in classic commercial property - office buildings, shopping centres and logistics or light industrial facilities in the CEE region. The fund is designed for informed investors and EIKA Group’s capital is invested alongside external investors.