Dragon Capital Group plans to finalize deals worth $250 million by the end of 2019, Dragon Capital CEO Tomas Fiala has said.
“We have several deals at the completion stage that we will finish anyway. Before the [presidential] elections we closed deals that we already had on the pipeline for six months or a year. We did not work on the new pipeline because we wanted to see what the outcome of the elections will be. So far, everything that President [Volodymyr] Zelensky and his team are doing does not scare us..,” Fiala told Interfax-Ukraine on the sidelines of the RAU Investment Forum 2019 in Kyiv on Tuesday.
He said that the company has now resumed the process of creating a pipeline and plans to close about 10 deals in real estate and private equity by the end of this year.
“Within 12 months, if there are the correct appointments to the government, if the ministers suit investors, if they are clean reformers who can implement key structural reforms, if the president and the government do everything to restore the rule of law in the country, we will close about 10 transactions, and it can be an amount of about $250 million,” Fiala said.
He said that despite the rising cost of real estate offered on the secondary market, the growth potential for the company remains enormous.
“After the [parliamentary] elections, we and our partners can quietly double our investments in real estate and private equity in two or three years. We have invested $500 million in the last three and a half years and this figure can be doubled in two or three years. With the right policy of the state, we can invest up to $1 billion,” he said.
In particular, according to Fiala, Dragon Capital is interesting, first of all, in warehouse and office real estate. He predicts further growth in rental rates in these segments due to limited new supply.
At the same time, in connection with the planned large volumes of commissioning new retail real estate in Kyiv, Dragon Capital is more interested in retail real estate in the regions.
“In the warehouse real estate segment it will not make sense to build new facilities until the rates increase by 20%,” he said.
According to Fiala, since 2015, Dragon Capital has acquired 22 properties with a total area of 620,000 square meters in different segments.
“Half of this portfolio is warehouses, and more than 150,000 are offices, as well as commercial real estate… This is a big load on our resources… We had to create a real estate management team from scratch – more than 100 employees. The portfolio shows an increase in operating income of 10-15%. This year, growth may be even higher,” he said.