In pandemic, it is more profitable to invest in warehouses, retail real estate – Dragon Capital
In a pandemic, warehouse and retail real estate is the most promising and profitable for investment, founder and CEO of Dragon Capital Tomas Fiala has said.
"COVID-19 has changed the calculation. Office real estate, which before COVID-19 had the greatest hopes and prospects, has lost a lot. Therefore, given the pandemic, warehouse real estate and shopping centers are, of course, the most profitable," he said in an interview with Interfax-Ukraine.
Fiala noted that rental rates in the warehouse market are quite stable – about $5 per square meter, whereas in the retail segment, tenants who were closed during the quarantine were not charged.
"We had done a lot of work with shopping centers, invested, reconstructed, and changed the mix of tenants. Therefore, we were able to greatly increase their income. Although, of course, they also endured hardships these last 1.5 years, were closed during lockdowns," he said.
At the same time, the head of the investment company noted the rapid recovery of retail real estate. "The solvency of Ukrainians has not suffered much, incomes still continue to grow," he explained.
According to Dragon Capital, the company's portfolio includes 778,000 square meters of area, of which 391,000 square meters – warehouses, 183,000 square meters – retail real estate, and 204,000 square meters – office real estate. In the structure of income of these assets over 2020, some 30% were warehouses, 33% – retail space, and 37% – office space.
Some assets purchased in 2016-2018 have doubled or tripled, Fiala said. At the same time, he did not name the overall evaluation of Dragon Capital's real estate assets. "More than $500 million," he said.
As reported, as of September 2021, Dragon Capital Property Management manages 31 commercial properties, including 14 office properties, six retail properties and 11 logistics complexes.