Round Hill Capital sells Czech residential portfolio to Heimstaden Bostad AB for EUR1.3 billion

Funds advised by Blackstone Tactical Opportunities and Round Hill Capital have exchanged contracts to sell the shares of a residential property portfolio in the Czech Republic owned and operated by RESIDOMO to Heimstaden Bostad AB for a total purchase price of EUR1.3 billion.

This well-invested and responsibly managed portfolio, the largest privately held residential portfolio in the Czech Republic, provides high-quality affordable homes and consists of approximately 4,515 assets with 42,584 residential units and 1,675 commercial units.

 
In 2015, funds advised by Blackstone Tactical Opportunities and Round Hill Capital acquired the portfolio. Through multiple capital investments including significant refurbishment and maintenance expenditure and corporate and social responsibility (CSR) programmes, Round Hill Capital, working closely with local and central government and tenant associations, has significantly and responsibly improved the quality of the underlying assets and neighbourhoods for the long term and consolidated them into an enhanced in-house management platform.
 
There has been a significant investment into people and services, including the opening of a number of community centres, the digitalisation of the tenant experience, the roll-out of caretaker services, the increased responsiveness of maintenance and an increased focus on the needs of more senior tenants. This scaled, sustainable and efficient operational platform, which was rebranded as RESIDOMO in 2017, includes in-house property, asset and facilities management capabilities. As a result of these intensive programmes, both the efficiency and performance of the portfolio have improved for tenants, neighbourhoods and investors alike.
 
This portfolio is focused mainly in the Moravia-Silesia region, which has over 1.2 million inhabitants and is the most densely populated region in the Czech Republic after the capital city Prague. Approximately one-third of the portfolio is in Ostrava, which is the second largest urban area in the Czech Republic and located approximately 350km East of Prague.
 
With established expertise and capabilities across Europe and the U.S., Round Hill Capital will continue to focus on making further investments in residential property in these geographies.
 
Round Hill Capital was advised by Evercore, Arcadis, PWC, Simpson Thacher and Dentons on the transaction.
 
Heimstaden was advised by JPMorgan, Clifford Chance, Sentient and EY on the transaction.
 
The transaction is subject to customary anti-trust clearance and is expected to close in Q1 2020.
 
Michael Bickford, founder and CEO of Round Hill Capital, says: “This sale is in line with Round Hill Capital’s strategy of investing in high-quality portfolios and improving the value and enhancing the quality of the underlying assets for the long term by optimising their operational performance in a responsible manner. Round Hill Capital’s proven track record and our professional, hands-on residential property management expertise ensures that we provide our tenants and wider neighbourhoods with well-invested and improved homes, communities and management platforms and services that are sustainable over the long term.
 
“Round Hill Capital remains committed to investing in, developing and managing residential property across Europe and the US in a responsible manner, and we look forward to expanding our presence across these geographies.”
 
Patrik Hall, CEO of Heimstaden, says: “Heimstaden is a value-driven organisation that believes in engaging and involving employees, customers and society in general in our business. We know we play an important role in peoples’ lives, that’s why our vision is Friendly Homes. In RESIDOMO, we see a great opportunity to live out the vision of Heimstaden with a well-managed and fully insourced platform, and we look forward to continuing to strengthen the work that has been done to improve the quality of offerings to the customers and society over the last years.
 
“Heimstaden’s investment in the Czech Republic and the Moravian-Silesian Region is a lifetime investment. We are a long-term owner that invest in our customers’ homes and neighbourhoods. And we´re not just buying into a portfolio of apartments, but rather many individuals and important homes. We also invest into the work ethics and thriving business community of this country. We believe strongly in the future of the Czech economy and are here to stay.”
 
Jan Rafaj, CEO of RESIDOMO, says: “Heimstaden share our values and from what we have seen from them up to now, we are truly impressed. We are a perfect match and are very much looking forward to getting to know and work closely with Patrik and his team.
 
“The standing of RESIDOMO and the quality of our properties and services have improved greatly over the last five years. I am grateful that Round Hill Capital and Blackstone have supported massive investment projects in the Moravia-Silesia region, which have led to improvements in the quality of our apartments and tenant services and also increased the value of RESIDOMO. With Heimstaden as our owner, we expect these improvements to continue.”