Performance of REDSIDE funds in January 2024

Monthly reporting of REDSIDE funds for the period 01/2024

NOVA Real Estate

In January 2024, the NOVA Real Estate Fund's appreciation reached 0.15% and therefore the total appreciation for 2024 is 0.15%.

Therefore, in line with the previously announced strategy, the Fund approached a leading international real estate agent to help the Fund prepare a public tender for the sale of the remaining part of the portfolio. Despite the relative size of the portfolio, the Fund will attempt to sell all of the properties this year so that, ideally, the Fund can be opened and all holders of investment shares paid out before the end of the year.

At the moment, the investment process is being prepared - investment teaser, financial underwriting or dataroom documents so that potential buyers of the real estate portfolio can be approached at the end of February.

In the area of leases, a lease agreement has been concluded with the insurance company VZP, which will lease commercial premises in the Smíchov Gate building, where it will open its new branch. The attractiveness of the location is confirmed by the extension of the existing contract by Oresi, which operates one of its showrooms on the ground floor.

Report NOVA Real Estate

NOVA Green Energy

The valuation of Subfund 2, which holds a portfolio of photovoltaic power plants in the Czech Republic, Hungary and Slovakia, reached 0.5% in January. 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 is now having 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 there. A 0.5 MW rooftop PV plant was then connected to the grid as part of the Sub-Fund 2 portfolio. As part of the asset management, long-term contracts for the servicing and maintenance of the PV plants were terminated and subsequently recontracted to significantly more flexible contracts that will be more palatable to future buyers of the power plant portfolio.

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 advisable to reduce exposure to 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 market-based PV in Moravia. At the same time, we are having the possibilities of expanding the existing PV portfolio, e.g. by adding battery storage, worked out. Subsequently, we will approach interested parties again with the intention of selling the portfolio and paying out cash to investors. The now unneeded non-operating cash in the higher orders of millions of EUR, 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 Sub-Fund'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 those thermal power plants, when J&T Group sold its secured loans to Natland. The latter immediately realised the lien at a price that probably reflected the unprofitable operation of the thermal power plants. It is therefore 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, in the context 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