Meta Estate Trust secures an investment pipeline of 4 commercial projects to be leased to Penny's retail chain
Bucharest, September 18, 2024:
Meta Estate Trust (ticker symbol MET), a holding company active in the real estate sector and acting as a portal between the real estate and capital markets, announces the securitization of an attractive pipeline of four major commercial projects to be developed in partnership with international food retail brand Penny. These projects will make a significant contribution to strengthening the company's position in the market by generating recurring revenues and expanding the asset portfolio.
Meta Estate Trust has signed memorandums of understanding for the acquisition of four commercial premises to be developed in various locations across Romania. They will be leased on a long-term basis (10-15 years) on the basis of an inflation-indexed contract with no early termination option.
Alexandru Bonea, CEO of Meta Estate Trust: "To grow this company - faster than the 10% organic growth we are already delivering to our shareholders - we need to build an attractive pipeline of projects and raise the capital needed to realize it. These four projects give us solid revenue predictability and help reduce our exposure to market risks. At the same time, recurring revenues of €1m annually, plus the ability to raise over €6m in debt financing, will enable us to achieve our ambitious growth targets."
The estimated timeline foresees that the four commercial spaces will be developed with separate start and completion dates. Each transaction will be individually approved by the company's board of directors. The construction of the four retail spaces totaling approximately 6,000 square meters will begin at different times between August and December 2025, with completion planned for December 2026.
A new strategic direction for the Meta Estate Trust portfolio
Securing this pipeline brings a new strategic direction for the investment portfolio. Such transactions will be designed to minimize risks and operating costs for Meta Estate Trust, while providing long-term predictability and stability. Specifically, for these transactions, Meta Estate's management team has capitalized on the steady demand in the food sector, even in difficult economic times, as well as the strong business track record of the prospective tenant.
Strategic and financial benefits the transactions will bring to Meta Estate Trust shareholders:
- Long-term revenue predictability: non-cancellable, inflation-indexed contracts provide stable revenues in a sector resilient to economic change.
- Minimal operational costs : The management team can manage a large number of these assets with minimal resources, by securing long term tenants who are also operators of the premises and thereby reducing management costs.
- Positive leverage opportunities: In the current market environment, the net rental yield is higher than the interest rate at which the company can finance itself, which significantly increases the return on equity.
- Debt financing: Leases with an international brand and long term leases will make these assets eligible for bank financing and covered bond issues.
About Meta Estate Trust:
Meta Estate Trust is a holding company, active in the real estate sector, founded in March 2021 by a group of Romanian entrepreneurs with experience in real estate and capital markets. As of August 29, 2022, Meta Estate Trust is listed on the Bucharest Stock Exchange, in the AeRO market, with the stock ticker symbol MET. As of March 20, 2023, MET's share is included in the BETAeRO index.
The investment policy is based on a mix of investment typologies with different return and risk profiles, with a diversified and flexible portfolio that can easily adapt to market cycles.
