Performance of REDSIDE funds in November 2023

Monthly reporting of REDSIDE funds for the period 11/2023

NOVA Real Estate

In November 2023, the appreciation of the NOVA Real Estate fund reached a value of 0.46% and thus the total appreciation since the beginning of the year is 3.96%.

The final annual performance may be affected by the annual value from Colliers, when the results will be known and booked at the end of the calendar year

In the third quarter of the year, there was a slight decrease in turnover (-2.4%) of all tenants in the Orlice Park Shopping mall. With stable attendance (+ 0.4% y-o-y), this means that consumer visits are just as numerous, but the buyer slightly more chooses or buys goods of a different category. The center remains stably leased by a mix of tenants who complement each other with a focus on comfortable daily shopping within the given locality of Hradec Králové and the immediate surroundings.

In terms of leases, lease extensions have been agreed with two existing retailers. In total, there are 1,730 square meters of space, which are extended by another five years of rent under the existing rental conditions, i.e. after the increase for the last inflationary period.

We continue to negotiate with a strategic investor who is conducting an in-depth review of the Fund's portfolio. 

Report NOVA Real Estate

NOVA Green Energy

In November, work continued on the long-term development of several PV plants in the Czech Republic. For investment in these PV plants we are considering investment subsidy support from a subsidy program of the Ministry of Environment or the Ministry of Industry and Trade. The remaining applications for connection of the plants to the distribution grid are being submitted, discussions are currently underway with tenants on the purchase or sale of electricity at the site of the PV generation/installation, and the first applications for building permits have been submitted.

For the two Czech-owned PV plants, a decision has been made on a feed-in scheme for 2024. For one PV plant, thanks to a favourable offer from the electricity buyer, we will remain in the form of a green bonus. For the other PV plant, the buyout offers were lower relative to the buyout prices and it was therefore not economically viable to stay with the green bonus support. This plant is therefore returning to the feed-in tariff support it received until 2022.

The replacement of inverters at two power plants in Slovakia has been completed and we expect a significant increase in the efficiency of these PV plants in the coming years. The valuation of Sub-Fund 2 was 0.12% in November 2023 and reached 4.69% YTD. Interest rates in Hungary have been gradually falling, with the central bank there deciding to further reduce them by 75bps to 10.75%. In view of the economically unprofitable operation of biomass power plants, where the cost of generating electricity from biomass far exceeds the potential revenue from its sale, production was curtailed during the year and at the same time bankruptcy of this source in Krnč was initiated at the request of the Fund. Claims have been filed, but due to the unprofitable operation of the thermal power plant and the amount of liabilities, no significant performance can be expected.

A similar problem was also faced by the biomass thermal power plants TeHo Topolčany and TeHo Bardějov, where, due to the unprofitability of the operation, the financing JT Bank sold its claims to the Czech investment group Natland, which immediately started to enforce the lien. Despite the efforts and involvement of a leading Austrian law firm, a negative impact on the value of this asset for Sub-Fund 1 can be expected.

Early next year, we will inform investors in detail about the outlook and timing of the announced sale of the Fund's assets, in particular the large portfolio of photovoltaic power plants in the Czech Republic, Slovakia and Hungary, and the subsequent payment of the liquidation balance to investors.

Report NOVA Green Energy