Palmer turns around Euro fund

FINANCE: Palmer Capital has turned around its Emerging Europe Property Fund, converting a €133,000 (£95,906) loss in 2013 to a profit of €1.12m in 2014.

The fund, originally part of the 2012 takeover of Middle Europe Investments, divested itself of a number of underperforming assets, reduced costs by 41% and cut loan to value ratios by 14 percentage points to 44% over the course of three years to the end of 2014.

As a result, the NAV of the fund increased from €26.81m to €28.55m.

Palmer Capital secured a new long-term facility from Tatra Bank for the Slovak portfolio, a new facility from Raiffeisen Bank on the Czech portfolio and a new revolving credit facility from Sberbank.

Guy Barker, head of fund management at Palmer Capital, said: “We were able to achieve significant progress in operations, asset-quality and financing during the last year, and this has given us confidence to return to our overall strategic objective – assembling a larger portfolio of higher-quality property assets where our team’s superior management skills can deliver enhanced returns for our investors.

“While our expectations of occupier demand remain prudent, there is no doubt that the financing environment has improved substantially over the past nine months, which is having a positive effect on yields. It is anticipated that both prime and secondary property will show significant yield compression during the year ahead. There is also encouragement in the asset purchase programme of the ECB.”

Author: Mike Cobb, Estates Gazette