2018-12-18date:

17.253.067.480net assets value:

1,3819rate:

Official Information Actual Monthly Report Announcements

Investment policy

'Europa' Real Estate Investment Fund is managed by the Fund such that its portfolio includes a diverse range of European countries’ real estates. The aim of the Fund is that the buyers of investment shares achieve returns from investments that are over the rate of inflation and bank interest. The fund would primarily like to invest in real estate situated in Budapest and its surroundings, secondly in larger country towns, and to a lesser extent, in smaller towns.

To a lesser extent investment targets, having adequate yield and risk feature, of other European countries can be found in the portfolio. The Fund manager considers, as primary priority, the yield and risk feature of the given real estates and their influence on the portfolio. The Fund manager would like to avoid real estates differing aesthetically or functionally at a large extent from the average. The Fund manager aims at making reliable partners carry out the adminsitration and technical operation of the real estates being of its property. In all likelihood the Fund manager can transact hedge on currency basis in the case of incomes in currency.

Strategic thinking is essential when selecting real estate. The Fund manager considers all factors geographical, demographical, infrastructural and economic influencing the value of the real estate, as well as the likely mid- and long-term changes of these factors. The Fund manager aims at making decisions independently and objectively. In selecting investments its aim is to choose from the largest possible database, using its wide network of contacts. In selecting real estate agencies the Fund manager takes into consideration not only the estate capability of the agency, but their capability of analysis and background support, that can help to the Fund in making right decisions.

The Fund primarily invests its capital in real estate yielding rent, capital gains being of secondary importance. Dividend payouts are financed from the incoming rental fees. When leasing real estate, the fund always makes sure that the leasing is long term and there is sufficient deposit for the rent. In addition, real estate is selected for purchase with special regard to best preserve or increase their value in the long run considering also Hungary's future EU convergence.

In the portfolio you can find the following types of real estate:

Real estate yielding rent

Real estate already rented out. - From the investment's point of view, this group has the lowest risk factor, since, according to long term leasing contracts its profitability can be calculated and its value assessed easily, based on widely used real estate assessment models.

Real estate that can be leased easily. - Such real estate is either empty, or partially rented. The Fund manager buys these in two cases:

Based on previous negotiations before purchase, the Fund manager is convinced that the real estate can be leased profitably in a short time.

Minor aesthetic reparations or smaller alterations need to be done, following which the real estate is likely to be leased favourably with the additional cost also taken into account.

Real estate bought for capital gain

Various sites (empty or with buildings to be demolished), buildings to be renovated, or buildings purchased with the intention of resell fall in this category. These kind of real estates are managed actively by the fund. It either makes profitable developments on it, such as minor refurbishings or full project investments, or it benefits from special legal conditions or the proprietor's liquidity problems, whereby the real estate can be obtained below market price. The real estate thus purchased and refurbished is either leased or resold depending on the actual market conditions.

The capital invested in such real estate cannot surpass 40% of the fund's total equity.

Composition of the portfolio according to the real estate sectors

The fund would like to invest its capital along the following minimum/maximum lines:

  Min./max Expected percentage
of investment
Offices (categories A, B, C) 0 - 50% 25%
Industrial (warehouses, industrial park, logistical centre, etc.) 0 - 50% 25%
Residential (rental houses, condominiums, detached houses) 0 - 50% 10%
Other, building sites 0 - 50% 20%
Liquid assets 15 - 30% 20%
Total   100%

Investment rules

No real estate's value can surpass at its purchase 20% of the fund's equity. A real estate is counted as one single real estate, if it is a real estate registered under one land registry number in the real estate registration.

The price of no real estate that is under construction can surpass 25% of the fund's capital. A real estate under construction is such that has not yet been given the permission for permanent use.

The portfolio of the Fund, beyond the real estates, can contain only demand deposits or fixed bank deposits, or government securities issued by the OECD member states with term of maximum 1 year as regards of expiration, or forward deals effected for covering currency risk of the real estate business fixed to currency rate income. The total value of the government securities from the same run issued by the OECD member states cannot surpass 35% of the fund’s capital.

For the sole purpose of redeeming its shares, the Fund is authorised to borrow up to 10% of its equity for a maximum term of 60 days.

The Fund is not allowed to mortgage its assets, nor is it allowed to issue bonds or other debentures. The Fund is not allowed to provide loans.

On behalf of the Fund, for the sole purpose of redeeming its shares, the Fund is authorised to borrow up to 50% of its equity.