Tonio Fenech is no new face to Malta’s news cycle. Having been responsible for the country’s financial management during the last two Nationalist Party legislatures, he was one of the youngest Ministers to serve.

With the introduction of the Euro and the mitigation of the 2008-2011 economic recession under his belt, Mr Fenech, an accountant by profession called it a day with politics in 2017 and refocused his attention towards the private commercial world.

Today, as Executive Director TIMAN Investment Holdings at Von der Heyden Group, he leads the Group’s Head Office operations, as well as business development. With over 30 years of experience in the field, the group operates in the high-quality niche of the European Real Estate Market, having recorded investment programmes, representations and developments in almost 20 cities around Europe. 

In Malta, VDHG operates the Cugò Gran Macina Hotel in Senglea and is a partner in the Hammet’s restaurant brand, where some exciting projects are on the horizon on the island.

“The secret of the group’s success in a highly competitive market is an unwavering dedication to quality and a long-term vision at every step of the way,” Mr Fenech claims. “From the choice of projects the group decides to embark on, to the way said projects are sustainably financed,– ensures that quality is maintained throughout, while guaranteeing that every project remains a sound investment,” he says. 

“It simply makes no sense to invest in high-end projects, which are then surrounded by an environment which does not reflect the level of the development itself. We make it a point in fact to collaborate with as many stakeholders as possible, in order to bring the community on board our vision from the get-go,” Mr Fenech explains.

In fact, when developing a landmark €350 million four-tower complex at the entrance of Bavaria in Germany, Von der Heyden Group invited the municipality to sit on the selection board for the design before the tendering process.

“Probably, some people in the business may have a hard time wrapping their heads around this notion. However, we believe that having as many stakeholders on board from the very early stages helps us guarantee a high quality product which actually improves the environment it lives in, improving the lives of the community that surrounds it. The formula has worked time and time again, and our effort to build quality developments pays in the long-term,” he notes.

In fact, Von der Heyden Group prides itself in securing the highest standards in the industry for its projects, such as the LEED Standard, which is a green building certification, that provides recognition for efforts to ensure superior environmental management in design, among others. 

“We don’t see it as a conflict,” Mr Fenech remarked, “it is rather one element that compliments the other, as we actively seek to balance investment and community needs.” 

In Poznań, a city on the Warta River in western Poland, Von der Heyden Group is now in the final stages of developing the highest tower in the city – an investment to the tune of €105 million that completes the project done with the Municpailty, developing the cities financial district. The development has already attracted some world-renowned tenants including Spain’s banking giant Santander that occupies one of the two previously completed towers.

Asked about the group’s proven track record of excellent timing when it comes to investment strategy, Mr Fenech explains that it all has to do with the financing of the projects themselves. 

“When developing a project, we do not start selling parts of it on plan, in an attempt to fund the project itself with buyers’ money. Referred to as the ‘developers’ disease’, this practice tends to sell the project for cheap, rendering the developer illiquid, and threatening the entire enterprise to land in some serious hot water, the moment the slightest thing goes wrong. Contrariwise, we secure funding for the entire project through equity and bank financing before the first stone is laid, as this helps us ensure that the project makes business sense from the onset. Banks will analyse a project as meticulously as the developer will – with the added advantage that they will do it in a dispassionate way, so you know for sure that the project works,” Mr Fenech expounds.

At a second stage, as per their philosophy, Von der Heyden Group do not sell any parts of the projects. Instead, they prefer to lease and only sell the asset as a whole in the right time.

“Once the entire development is in fact leased out, we would have created a large revenue-generating asset, which becomes very interesting, for investors, insurance companies, pension funds and the sort.”

As an example of this strategy in action, Mr Fenech mentions the last tower in a complex in Bavaria Towers in Munich which the group sold in December 2019, after a year of climbing property prices, which were suggesting an imminent down-turn. The group decided to sell the fully leased-out 30,000 square metre asset, which initially was targeted to sell for €195 million - an international call and 37 bidders later, the tower was sold for €267 million.

The Group is also busy on the hospitality front, running IBB Hotel Collection and Cugó Gran brands. Transforming the assets into five-star luxury hotels, the group underlines its philosophy of quality and unique experience even in this sector. Upcoming luxury projects on the horizon include a number of exclusive developments in Tuscany, Italy, as well as other exotic destinations.

In conclusion, Mr Fenech also confirms that Von der Heyden Group Finance has issued an unsecured 5% bond of up to €35 million, set to mature in 2032, offering bondholders the opportunity to roll-over their investment of its first bond of €25 million issued five years ago, and switch from a 4.4% coupon to a higher coupon of 5%, in exchange for a longer 10-year period.

“The company shall be calling on bondholders to consider the early redemption of the 2017 VDHG Bonds in terms of the prospectus dated 30th January 2017. Preference shall be given to the existing bondholders,” Mr Fenech concludes.

Subscriptions opened on the 1st November, and through an intermediaries offer from 18 November. Subscriptions will close on 2 December or earlier if the bond issue is over-subscribed.

For more information about the bond issue click here.