M7 Real Estate (“M7”), the pan-European investor and asset manager, announces the acquisitions of two modern urban logistics assets, both on Slavonska Avenue, Zagreb, Croatia, on behalf of M7 CEREF II (the “Fund”).
Slavonska Avenue is one of Zagreb’s main arterial roads and is therefore a prime last mile location. The first asset which comprises a total of c. 14,000 sq m GLA, is located just to the north of Slavonska Avenue, 5km east of Zagreb city centre. It is fully let to four tenants with a weighted average lease term of 5.76 years.
The second asset is located to the south of Slavonska Avenue and comprises a total of c. 8,000 sq m GLA. It is fully occupied by three tenants with a weighted average lease term of 2.35 years.
Both acquisitions are in line with the Fund’s strategy of targeting value-add and core plus logistics, industrial and office investments in the key Central European markets of Poland, Hungary and Croatia, where the favourable market dynamics and diverse tenant profile provide solid rental income and upside potential.
These are the first acquisitions on behalf of the Fund in Croatia. M7 CEREF II has so far acquired seven assets totalling c. 85,000 sq m across Croatia, Hungary and Poland.
Mirta Ceranac Poljak, Managing Director, Croatia at M7, commented: “Given the challenging market environment due to the pandemic, we are very pleased to have concluded these transactions quickly and efficiently. They demonstrate our commitment to the Croatian market and our ability to successfully execute acquisitions. Since establishing our presence in Croatia at the end of 2016, when we acquired MANI Business Park, Zagreb on behalf of M7 CEREF I, M7 Croatia now has c. €50 million of assets under management.
“There is continued demand for modern urban logistics assets, especially when combined with office space, and these acquisitions provide a strong addition to the M7 CEREF II portfolio. We are seeing a structural shift in the Central European office and logistics markets, particularly in expanding urban centres where vacancy rates have significantly reduced due to limited supply. This provides an attractive opportunity for growth that we are seeking for our investors.”