30 Oct 2020
M7 Real Estate supports Croatia’s largest pension fund as it diversifies into real estate
€21 million logistics investment marks first real estate acquisition
M7 Real Estate (M7) the pan-European investor and asset manager specialising in multi-tenanted real estate, has been advising Croatia’s largest pension fund, AZ, which is diversifying into real estate for the first time. Under the terms of the agreement M7 will source commercial property investment opportunities in Croatia and act as a real estate advisor and asset manager. AZ has made its first investment for the new strategy having acquired shares in M7 Primo, an SPV which has acquired a 33,000 sqm logistics and distribution centre in Zagreb for €21 million.
In the current low interest rate and bond yield environment, AZ has taken the decision to expand into commercial real estate attracted by the asset backed nature of the opportunity and its ability to generate stable long term income returns which meet its returns targets, while continuing its prudent risk management policy.
M7 will continue to source investment opportunities and manage the growing property portfolio with the intention to significantly grow the AUM in Croatia over the next few years. M7’s current AUM in the CEE region is c. €240 million, including third party mandates, and is managed by a team of 13 experts.
“Market circumstances have changed significantly and AZ pension funds is therefore actively seeking alternative stable and secure investment opportunities. The primary goal of all our investments is to deliver optimum returns for our members while maintaining an acceptable level of risk. While meeting all these prerequisites, this latest investment strategy focused on commercial real estate will also further diversify our portfolio. We believe that the growing logistics and distribution sector, particularly in the circumstances created by the COVID-19 pandemic, offers an excellent initial opportunity to expand our investments. The M7 Real Estate team in Croatia are seasoned professionals in real estate portfolio management and will provide us with the expertise and support we require,” said Mario Staroselčić, Member of the Management Board and CIO of AZ d.o.o., pension fund management company.
Mirta Ceranac Poljak, Managing Director of M7 Real Estate Croatia said: “To be selected to help AZ pension funds, one of Croatia’s leading institutional investors, expand its investment strategy into real estate for the first time underscores the progress we have made in establishing oursleves as a market leader since our first investment here a little over four years ago, particularly given the competitive nature of the process. Croatia is a growing market with significant potential and we look forward to working with AZ, deploying our deep expertise and on-the-ground team to support the development and growth of this important investment platform.”