Discover what ZDR Investments SG VCC fund is about
Singapore-based Euro Asia Asset Management partners ZDR Investments Group to seek investment opportunities in European grocery retail parks.
– Partnership seeks to realise untapped growth potential in grocery retail parks in Central and Eastern Europe.
– Newly-launched ZDR Investments SG VCC in Singapore is feeder to the European Master Fund which has a track record of 39 properties invested, market value of 428 million EUR and average of 10% annual returns since its 2018 inception.
– ZDR Investments SG VCC is managed by Euro Asia Asset Management, a team with over 40 years of combined experience in capital markets and corporate finance.
Capitalising on demand for grocery and discounter-anchored properties in Europe, Singapore-based fund manager Euro Asia Asset Management (“Euro Asia”) is partnering European ZDR Investments Group (“ZDR Investments”) to seek investment opportunities in grocery retail parks in the Central and Eastern Europe (CEE) region.
For this purpose, Euro Asia has recently launched ZDR Investments SG VCC (“ZDR SG VCC”) in Singapore that leverages on the country’s Variable Capital Company (VCC) structure and enables participation in the European ZDR Investments SICAV (“Master Fund”). With the VCC framework a key initiative by the Monetary Authority of Singapore to position Singapore as the leading pan-Asian fund management and domiciliation hub and a mature and competitive fund ecosystem established around it, the decision for adopting the VCC structure is seen as the most appropriate and natural choice1. The VCC structure was also selected as the preferred fund structure choice due to its confidentiality for investors, tax incentives to investors and ease of entry and exit for investors. The Master Fund is one of the leading real estate funds specialising in grocery stores and retail properties in its region and managed by ZDR Investments.
The Master Fund is licensed by the Czech National Bank as an Alternative Investment Fund and has recorded an average annual return of 10.2% since inception in 2018. With 39 properties invested to date and a total market value of 428 million EUR, the Master Fund won the TOP 100 award two years running in 2020 and 2021 respectively.
The new ZDR SG VCC feeder fund is managed by Euro Asia’s management team with over 40 years of combined experience in capital markets and corporate finance. ZDR SG VCC is authorised by the Monetary Authority of Singapore (MAS) and has launched its first share subscription in September 2023. The subscription is targeted exclusively for Accredited Investors and institutions, with a minimum investment amount of 100,000 EUR.
Retail park developments have evolved in recent years across Europe. Besides offering the usual benefits of affordability, flexibility, convenience, and accessibility, many new retail parks now also include leisure and F&B choices to enhance their attractiveness as retail destinations.
Across Europe in 2021, retail parks and retail warehouses accounted for over 33% of the total retail investment activity, up from a five-year average of 18%2. Compared to a more saturated Western Europe, the retail park market in CEE region is in a relatively nascent stage, with approximately 45% of total parks less than 10 years old3. Even with a significant amount of development, there is relative under-supply of such spaces, especially in smaller towns.
Unlike prime shopping centres in big cities, retail parks are relatively easier and quicker to construct, and at lower costs. With lower rents and service charges, the retail park concept is proving attractive to retailers and these also translate to lower costs for the shoppers, who are increasingly turning to discounted groceries due to rising inflation. According to McKinsey Survey (2023) 4, 53% of European consumers surveyed mentioned they want to save more money on food and 36% mentioned they want to buy more private labels than they did in 2022. The weighted average revenue growth of European discounters is 22% in 2022, compared to 2019.
Ondřej Sychrovský, Member of the Board of Directors of ZDR Investments commented “We seek investment opportunities in politically and economically stable areas in Europe, with the goal of creating long-term value for our investors, partners and communities. We favour investment opportunities in grocery and discounter-anchored properties, due to their ability to provide sustainable income and resiliency even in unfavourable economic conditions. In particular, we invest in long-term leased properties and occupied by tenants with strong credit profiles.”
Some notable property investments by the Master Fund include retail park VORUM Voitsberg I-III at Austria, Voitsberg, with leasable area of 12,783 sqm and runs on solar energy. Photovoltaics have been instrumental in reducing carbon emissions for this project, with savings of 95 tonnes of CO2 in 2022, which corresponds to electricity consumption of 278 households per year.
“The collaboration with ZDR Investments allows sophisticated accredited investors in Southeast Asia to participate in these investment opportunities in Europe. We will utilise the experience, knowledge and capital of the team to facilitate our clients in achieving geographical and sector portfolio diversification between European and Asian financial markets,” said Karol Piovarcsy, CEO of Euro Asia Asset Management.
