Issue link: https://maltatoday.uberflip.com/i/1414163
17 maltatoday | SUNDAY • 26 SEPTEMBER 2021 COMMERCIAL Hili Properties explores fast-growing European markets to expand €115m portfolio STRATEGIC real estate invest- ment company Hili Properties constantly monitors evolving trends shaping the property in- dustry in fast-growing European markets to calibrate its strategy to grow the return of its invest- ments, according to Chairman Pier Luca Demajo. The company, a member of wholly Maltese-owned mul- ti-disciplinary group Hili Ventures, focuses its strat- egy on providing attractive, risk-adjusted total returns to shareholders. The returns are derived from stable yield sup- ported by its current portfo- lio's long-term contracted cash flows and income growth em- bedded in contractual rent es- calations. Hili Properties' current port- folio comprises six grocery-an- chored shopping centres across Latvia's capital Riga, a private hospital in Bucharest, Roma- nia, 11 properties housing restaurants in key commer- cial districts in Estonia, Latvia, Lithuania and Malta, and three dedicated business blocks and office space in Sliema, Marsa and Floriana. Its tenants in- clude Premier Restaurants, the operator of McDonald's in these markets, Swedish-owned supermarket giant Rimi, and Norwegian newsagent/conven- ience chain Narvesen. In total, the assets accommodate more than 80 business tenants. The current assets total 75,500 square metres of rent- able real estate, enjoying an occupancy level of 99% with a highly favourable weighted av- erage unexpired lease term of 8.8 years. "Hili Properties is active in territories which have exhib- ited advantageous investment potential in real estate over the past few years," Mr Dema- jo continues. "Despite restric- tions on trade and services at the height of the COVID-19 pandemic, Hili Properties did not experience significant im- pact on its business in Latvia, and the tenants occupying our shopping centres in the market are very strong. As commercial centres become larger, shopper habits are changing. This has led brands and service provid- ers to favour malls and shop- ping centres as a location for their stores. The circumstanc- es brought about by COVID-19 that led consumers to seek more convenience seems to have accelerated this trend." In Romania, the real estate market is carving a new direc- tion for itself as it emerges from the COVID-19 situation. Hili Properties Managing Director George Kakouras says forecasts for 2021 are "cautiously posi- tive" and sizable transactions involving office space have tak- en place while several high pro- file transactions involving in- dustrial property are underway across the Romanian territory. "Our tenant activity in Ro- mania is stable," Mr Kakouras adds. "This is our second larg- est market and even here we have not experienced a nega- tive impact. Late last year, we acquired a tract of land in Bras- ov on which a restaurant was opened in 2021. Meanwhile, Malta's market continues to experience high demand for quality commercial property that drastically exceeds supply. As a result, most high quality commercial developments are currently fully let. Hili Proper- ties' position in the local mar- ket is extremely stable." As a subsidiary of Hili Ven- tures, the group present in nine Central and Eastern European countries with many long-es- tablished and high profile re- tail and commercial activities, Hili Properties is considerably advantaged. Its senior execu- tives can leverage the market intelligence and knowledge of each host country held by their colleagues around the group as they shape and review business strategy and mirror its foot- print. "Our parent company Hili Ventures has been particular- ly successful in its pursuit of growth over the years because it is a group of companies that truly acts like a group," Mr Kakouras explains. "It is a community of highly talented, driven people working within a collaborative culture that holds a wealth of knowledge about the markets it operates in." Now Hili Properties is cur- rently in advanced discussions to acquire an industrial proper- ty in Lithuania and real estate housing a major retail opera- tion in Warsaw. The acquisi- tion of the latter, Hili Proper- ties' first asset in Poland, will support its strategy to ven- ture into more EU countries that present stable economic growth and potential. Going forward, Hili Prop- erties' growth strategy will continue to focus on building a portfolio of attractively-lo- cated, institutional and high quality, income-producing in- vestment properties to deliv- er income and capital growth through active asset manage- ment. By understanding the needs of current and future tenants, city planners and communities, its teams are able to rejuvenate and remodel its assets into attractive shop- ping destinations and desira- ble business addresses under a programme of committed and consistent investment. The company sources its investment opportunities through its extensive network of relationships with corporate and private landlords, brokers and domestic banks to deliver sustainable income and strong capital returns. Hili Properties' targets for its acquisition pipe- line includes shopping centres and high street retail outlets, commercial real estate such as warehousing, industrial and distribution facilities, and of- fice properties in prime loca- tions with a high potential of attracting demand for space from top tenants. During the first six months to June 2021, Hili Properties registered stable total reve- nues of €3.8 million. Profit- ability between January and June 2021 improved over the preceding period thanks to im- proved cost management. The company's profitability will be strengthened further thanks to its planned investments in the short and medium term. Hili Properties' €115 million portfolio includes 'Nineteen Twenty Three', the imposing office block in Marsa which houses its parent company Hili Ventures and its other Malta-based subsidiaries Right: Hili Properties Chairman Pier Luca Demajo (left) and Managing Director George Kakouras