Terra Catalyst Fund‘s sole remaining material holding is its 72.4% holding in Spazio Investments NV, an Italian registered Fund which invests in Italian property. This follows on from the sale of TCF’s holdings in the Tamar European Industrial Fund and Rugby estates earlier this year. Spazio is being held on TCF’s balance sheet at €6.43, unchanged from th2 31 March 2014 carrying value. This is reflects Spazio’s own valuation of €7.04 adjusted for a recent tax settlement.
According to TCF’s recent interim results, Spazio is focused on improving the marketability of its portfolio through asset refurbishment and re-leasing. The manager’s expect that the portfolio will also benefit from an ambitious government reform package, which includes new REIT legislation, that aims to bring Italian legislation more into line with other EU REIT regimes. Importantly, for annual rents over €250k, the model is expected to move from being one that is “tenant friendly” to one that is more “free market”. The manager reports that Spazio is, “making good progress with leasing vacant space and extending the lease length profile of the portfolio presently leased to tenants” and that they, “anticipate that the majority of lease re-negotiations will be concluded well in advance of the expiry of the Fund’s debt facilities”.
TCF : Italian property fund is Terra Catalysts’ last material holding