Investment from 1 M € : Commercial Real Estate Fund in the Baltic States
The Nordic Baltic Business Community (B2BALTIC) recommends this specific commercial real estate fund in the Baltic States as smart safe alternative investment opportunity in the emerging fast growing Northern East European markets, based on the positive trends of the commercial real estate and retail development.
– The Fund has been managed by a trustworthy Baltic Partner and a competent property manager.
– A blend of over 20 years outstanding previous experience in Real Estate, fist-hand access to market
opportunities and solid over 10 years fund management track record.
– Targeting conservative Baltic core Real Estate.
– Opportunity to capitalize on yield compression towards Western European levels and macro plus market
driven rental rate increase.
– Investments in 4-8 stable cash-flow commercial properties in the Baltics.
– IRR in the range of 10-14% (significantly exceeding returns compared to traditional investments).
– Yearly dividend of 4-5%.
– 5+2 year horizon.
– Target fund equity (unleveraged) size of EUR 20-30 million, with a founders co-investment of up to 25%
Leverage c.a. 50%.
– Fund will be registered as Alternative Investment Fund (AIF) fully compliant with EU Law on
Alternative Investment Funds i.a. directives 2011/61/EU, 2013/14/EU, EU regulation 231/20123.
– Effective Tax structure (AIF is not a subject to CIT; holding regime for non-residents; capital gains and
dividends not taxed).
Fund typical investments
Cinemas (mix use), hypermarkets (retail).
Overview: Opportunities and trends in the Baltic States 2015
– Total stock has not changed significantly during the last four
– The A/B class rent level has shown an average, but stable growth
tendency since the crisis, but rents are still below the pre-crisis
peak and significantly lower than in the Nordics, Russia & CIS
and even largest CEE cities.
– Market segmentation has taken place: the better office buildings
have close-to-zero vacancy and increasing rent rates.
– Except for built-to-suit office buildings, the average office tenant
mix includes companies from various sectors with an average
tenant occupying 200 m2.
– Market can be divided into two sectors – large fashion malls and
small-to-medium convenience shopping centers/supermarkets. No
well functioning street retail.
– Larger shopping centers are competing for customers while there is
still room for additional local convenience S/C, supermarkets.
– Vacancy is low and best projects enjoy steady queues of tenants.
– Rent rates are expected to increase due to economic growth, and
low vacancy rates.
– Strongest pan-Baltic grocery retailers RIMI and Maxima.
Industrial & Logistics
– New development in logistics has been mainly formed by built-to-suit
projects during the last four years.
– Rent rates have gradually recovered and vacancies have reduced
and are close-to-zero in most successful projects.
– Typical tenant is looking for a 500-1,000 m2 space; the next most
common tier consists of 3,000-4,000 m2 occupiers.
– Sustainable rents are still 20-30% below the pre-crisis peak,
suggesting room for growth.
– The most active segment for last 5 years.
– Russia & CIS investors prevail.
– Big hotel chains have entered the market since 2013.
– The risk is on the side of developers and local partners – most of
the operators have entered the market very recently and are yet to
understand its depth and resilience.
– Numbers of city visitors is steadily increasing over 3 Mln a year.
Commercial Real Estate Development & European Retail Network
B2Baltic Alliance Nordic & Partners have been developed real estate, also building and restructuring shops, shopping centers, hospitals, and hotels. Partners in development and investments, looking forward to meeting new partners and investors for reconstruction of the Baltic States.
You can contact us to receive more details about the fund and assets. We will reply you asap: