Carlton Group Tapped to Sell Bulgarian Solar Property Portfolio
The Carlton Group has landed a contract for the sale of six green energy properties under construction in Bulgaria. The client, an experienced turnkey developer of photovoltaic solar assets, took the contract to Carlton with an asking price of €150 million, or approximately $190 million. Barbra Murray, Contributing Editor
In terms of the price tag on the portfolio, nothing is set in stone. “In fact, it will trade lower based on the new tariff for this year that was just confirmed,” a Carlton official told Commercial Property Executive. The facilities, which Carlton’s client will complete in autumn 2012, bring a lot to the table. Together, they will have the ability to generate 98 megawatts.
Also, for any property, there is nothing like a fixed income stream to lure investors, and the Bulgaria portfolio provides just that, with a 20-year commitment from the Bulgarian government. “Real estate properties that have their revenues driven by guaranteed-offtake contracts perform similarly to credit-lease or net-lease properties, where in this case the tenant is the National Electric Utility that is providing the guaranteed cash flow,” the Carlton official explained. “The returns that this project can offer an investor are extremely high for credit-quality transactions, in excess of 10 percent annual cash returns on an unleveraged basis.”
And there’s more. In addition to a high-generation capacity and guaranteed income, the assets will benefit from the all-important location factor. “They are all in northeastern Bulgaria, near the city of Varno, where the country receives its highest concentration of annual solar radiation, in the range of 1225 to 1240 hours of sunlight per year,” he added.
Additionally, to further entice potential investors, the seller is offering to maintain a minority stake in the portfolio, and is also willing to sweeten the deal with its project management and operations and maintenance services.
Solar properties are likely to become increasingly coveted, as the energy market is headed for big change in Europe. As noted in a European Commission document, the European Union has enacted a program with climate and energy-efficiency objectives known as the 20-20-20 targets. One of the targets, all of which are to be met by 2020, calls for 20 percent of EU energy consumption to come from renewable sources.