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London & Prague

Jones Lang LaSalle advises VGP to find strategic partner for its €300 million logistics portfolio

Largest industrial portfolio sale to transact in the Czech Republic

London & Prague, 24th March 2011 Jones Lang LaSalle has announced that European Property Investors Special Opportunities, L.P. (EPISO Fund), a fund co-advised by AEW Europe and Tristan Capital Partners, has entered into a 80:20 joint venture with VGP in respect of a logistics portfolio in the Czech Republic. The transaction is valued at approximately €300 million and is the largest industrial property sale to complete in the Czech Republic. VGP was both the developer and the vendor.

The portfolio, which is made up of modern semi-industrial logistics complexes concentrated in and around Prague, comprises over 368,000 sq m of completed logistics assets with a further nine buildings totaling 62,000 sq m to be developed.  The buildings are currently 99% let to a diversified tenant base of over 110 tenants including MD Logistika, První novinová společnost a.s., LEKKERLAND Česká republika, s.r.o., ACTIVA spol. s.r.o., WAVIN Ekoplastik s.r.o., IKEA and Coca Cola.  VGP’s flagship park in Horni Porcernice, north east Prague, accounts for 85% of the acquired portfolio value and is considered one of the best prime logistics parks in the CEE region and Europe.

George Lewis, head of Jones Lang LaSalle’s Capital Markets team in the Czech Republic and Slovakia, commented: “To work with VGP on this transaction gave us the opportunity to market the most attractive industrial portfolio ever openly offered in the Czech Republic. This is the largest industrial property sale in the Czech Republic and ranks among the 15 largest European industrial transactions to have been concluded in the past five years. There was extremely strong interest from investors during the sales process given the quality of the real estate, the strength of the developer combined with the positive outlook for the industrial sector. The sentiment among investors is improving and Central Europe and the Czech Republic are viewed as highly attractive."

In addition to providing development management services to the EPISO Fund for the development pipeline, VGP will be retained as asset manager, responsible for property management, facility management and leasing.

Jan Van Geet, CEO of VGP NV added: "VGP has enjoyed an excellent long term relationship with Jones Lang LaSalle. When we decided to appoint an investment agent to market our portfolio they were the number one choice given their team, track record, professional approach and unrivalled investor relationships with key decision makers. We are delighted with the support, quality of service and results which they have delivered."

Jones Lang LaSalle was instructed by VGP in September 2010 to identify and approach all the potential partners that would be interested in the portfolio. The assignment included evaluating and exploring how to achieve the best results for VGP. The Czech Capital Markets team of Jones Lang LaSalle prepared a detailed strategy to achieve this and involved Jones Lang LaSalle’s Investment professionals from Prague, London, Dubai, New York, Singapore and Sydney to present and discuss this unique opportunity to investors across the globe.

George Lewis added: “We have worked closely with our colleagues in our International Capital Group to ensure that the opportunity was presented to serious investors worldwide in order to identify and select the most suitable JV partner for our client VGP.”

Investment activity in the industrial segment in the Czech Republic has been historically low due to the fact that the majority of the major developers have focused on increasing their market share and not divesting their portfolios. Other than the corporate acquisitions of Parkridge by Prologis in 2007 and Pinnacle by Arcapita in 2008, industrial sales in the Czech market over the past 5 years totalled circa €280 million