Funds, Investments, Latvia, Real Estate

The share purchase agreement for the acquisition of 1 Vainodes and the neighboring land plot at 1 Telts, Riga was signed with the sellers SIA NULE 4 and SIA NM 2 on Tuesday, Northern Horizon Capital AS, the management company of Baltic Horizon Fund said.

The total purchase price for the properties under the agreement is approximately EUR 21.3 million, corresponding to an approximate acquisition yield of 7 percent. Closing of the acquisition is subject to customary conditions and is expected to take place in December.

"We are glad to include such an attractive property to our cash flow portfolio and are satisfied about being able to deploy most of the capital raised in the offering of the second quarter of this year. The process towards execution of the agreement took more time than usual as additional legal and tax due diligence was needed due to changes in tax regulations applicable in Latvia as of January 2018," fund manager Tarmo Karotam said.

The 1 Vainodes office building is situated on the left bank of the River Daugava next to one of the main arterial roads of Riga - Karla Ulmana Avenue. The office building located within a 10 minute drive from the city center of Riga is fully occupied.

The complex consists of a new office building, built in 2014, which is connected to a smaller reconstructed building. The total leasable area of the building is 8,052 square meters. The anchor tenant is JSC Latvian State Forests, taking up about 90 percent of gross leasable area. Other tenants include pharmaceutical company Abbvie and a cafeteria. The current detail plan for the land plots sets out a possibility to build up to 18,262 square meters of additional office space and a parking house.

Baltic Horizon Fund is a registered contractual public closed-end real estate fund that is managed by the alternative investment fund manager license holder Northern Horizon Capital AS. Trading in units of the fund started in the funds list of Nasdaq Baltic on July 6, 2016.