Czech Jet Industrial Lease fund grows portfolio by 50 percent

The Jet Industrial Lease real estate fund, part of the portfolio of the Czech investment firm Jet Investment, is having one of the best years in its history. Thanks to the completion of two major projects in Poland, the value of its portfolio will grow by half — to roughly seven billion crowns.

This was reported by Pavel Drabina, the fund's executive director. According to him, this autumn the first phase of a 42,000-square-metre industrial complex will open in the Polish city of Rzeszow, with potential to expand by a further 100,000 square metres. In spring next year, near the Baltic's largest container port, by Gdansk, two industrial buildings totalling 67,000 square metres will be ready for tenants.

“These are our two most significant projects to date, and thanks to the new construction they will add roughly €100 million to the value of our real estate portfolio,” says Drabina. The qualified-investor fund he manages is currently valued at around 4.6 billion crowns.

The fund's team is simultaneously working on new deals: an industrial building in Warsaw with room for rents to rise, and a project to build a 30,000-square-metre hangar in Nowy Modlin. Three more due-diligence processes are under way, including entry into an interesting development project in Austria that already has a tenant locked in.

For new opportunities the fund has about half a billion crowns from investors, and, including bank loans, up to two billion crowns. At the same time, the fund plans to keep its loan-to-value (LTV) ratio below 40%. By year-end the fund expects to raise another 300–400 million crowns from investors.

“After last year, when there weren't many opportunities on the market, we're having one of the most interesting years in our history — both in the volume of investments made and in the number of projects,” the 54-year-old manager notes with a smile.

Jet Industrial Lease has been operating for six years and specialises in industrial complexes — unlike residential or office property, such assets are leased under 10–15-year contracts, which provides more stable returns. Over the fund's history its average annual return has been 10.5%, with a future target of 8.5–11% a year.

The fund originally focused on finished buildings bought from their owners with a leaseback arrangement — a model little known among Czech entrepreneurs and used mainly by multinational companies. Today its strategy has shifted partly toward development: despite the higher risks of building from scratch, Jet Industrial Lease mitigates them by partnering with well-known developers such as Panattoni and Garbe.

The fund also diversifies its tenants by sector — among them light-engineering manufacturers and logistics groups — while avoiding heavy engineering and the automotive industry. Geographically, the fund's projects span Czechia, Slovakia, Poland, Austria and Germany, with Drabina seeing the greatest prospects in Poland, thanks to strong demand from local companies and interest from German manufacturers considering relocating production.