Performance of REDSIDE funds in February 2024

Performance of REDSIDE funds in February 2024

NOVA Real Estate

In February 2024, the NOVA Real Estate Fund's appreciation reached 0.10% and thus, for the time being, the total appreciation for 2024 is 0.25%.

We are continuing with the process of selling the real estate portfolio. Of the potential bidders approached, 17 investment groups have signed non-disclosure agreements at this time. These will receive detailed documents from us regarding the properties and their financial position. Based on these documents, we are expecting binding offers from the interested parties, which we expect in the second half of April 2024. The interested parties include both local entities and representatives of foreign capital. We then intend to select a winner from among the bidders, with whom an exclusivity agreement will be signed with the aim of closing the transaction by the end of 2024.

IDEA Office Building (also known as Angel 16), has signed the basic terms of a lease with a well-known retail company for approximately 400 sqm of retail space on the ground floor. We are also in negotiations with other interested parties for the remaining ground floor space (approx. 200 sqm) and mainly office space. This is the space left by Hello Bank from the BNP Paribas Group, which has decided to close its activities on the Czech market. Due to the termination of the lease of this company, the overall portfolio lease rate dropped to 94.5 %.

Report NOVA Real Estate

NOVA Green Energy

The valuation of Sub-Fund 2, which holds a portfolio of photovoltaic power plants in the Czech Republic, Hungary and Slovakia, achieved a cumulative appreciation of 0.5% for the first two months of 2024. In February, Subfund 2's assets were valued at the same level as in January, mainly due to the significant depreciation of the Hungarian forint and partly due to the settlement of long-term service contracts. However, the price of electricity has been undergoing a significant correction in recent months and is now well below the price before the outbreak of the war in Ukraine. This has now had an impact on the valuation of projects that expect to operate beyond the guaranteed feed-in tariffs. In Hungary, as expected, these were indexed in January to the 2023 inflation rate.

We continue to hold discussions with potential bidders for the sale of the complete PV portfolio, and discussions to date have indicated that it would be appropriate to reduce exposure in Hungary in favour of other countries to increase attractiveness. For this reason in particular, we have decided to strengthen the Czech market with our latest fund acquisition, which is an option to build approximately 40MWp of PV plants in Moravia, which, once the development and construction is completed, will be operated on a purely marketbased basis, i.e. without state-guaranteed feed-in tariffs. We will then approach interested parties again with the intention of selling the portfolio and paying out the funds to investors. The now unneeded non-operating cash in the higher orders of millions of euros, originally intended for further development of the portfolio, will be gradually distributed to investors in Q2 of this year.

Sub-Fund 1 is currently undergoing a portfolio valuation and statutory audit by PwC. A smaller part of the SubFund's assets, apart from the investment shares of Sub-Fund 2, consists mainly of investments related to biomass power plants in Topolčany, Bardejov and Krnč. In view of the already commented development of the thermal power plants, when the J&T Group sold its secured loans to Natland - which in turn realised the lien at a price that presumably reflected the unprofitable operation of the thermal power plants - it is possible (despite the winning verdict of the Austrian court, which awarded Sub-Fund 1 the required performance including all interest) to expect a negative impact on the value of this asset in Sub-Fund 1, within the framework of the regular annual valuation. This will be known together with the annual report of Sub-Funds 1 and 2 on 30 April 2024 at the latest.

Report NOVA Green Energy