UAB Capitalica Baltic Real Estate Fund I
Capitalica has appointed and Šiaulių bankas and Luminor Bank AS to issue up to €8 million notes for its real estate fund
Investment management company Capitalica Asset Management will distribute the second public three-year bond issue, from the real estate fund. This transaction is expected to raise up to €8 million for the development of the Verde business office complex in Riga. The public offering of the first €5 million bond issue in 2019 was extremely successful for the company - it was distributed three months earlier than expected.
“The decision to distribute the new issue was taken after the successful issuance of the bonds last year. High demand for these securities and rapid redemption have confirmed that investors are interested in long-term, targeted investments in sustainable real estate,” said Andrius Barštys, CEO of Capitalica Asset Management.
According to him, private and institutional investors’ interest in green business centers is growing, and the low-interest environment encourages the search for higher-yielding investment solutions. As high-end commercial real estate projects are one of the most lucrative investments in the world, this year is also expected to see strong demand for bonds.
The final annual interest rate on the bonds will be determined by auction, and investors will be able to bid in the 5,5-6.5% interest rate range. Interest rate will be the same for all investors and will be paid –on quarterly basis. Investors will be able to purchase up to 80,000 of the company’s bonds in total, with a nominal value of €100 per bond.
The distribution is planned to take place in several stages, with up to €3 million expected to be raised in the first two-week stage. Debt securities are offered for purchase to private and institutional investors, the first-phase issue will be complete by 30 October. The distribution of the bond issue will start on 22 October. Capitalica Asset Management has selected the banks AB Šiaulių bankas and Luminor Bank AS as the organizers and distributors of the issue.
Capitalica Asset Management will use the proceeds from the bond issue to finance the green concept business office complex currently being developed in the center of Riga. The construction of a Class A office complex is expected to begin this autumn. The total area of the complex, the underground garage included, will reach 45 thousand square meters. More than €60 million is to be invested in the construction. It will be one of the largest office complexes in the Latvian capital.
The European Investment Bank (EIB) has provided a €22 million loan for the construction of the Verde green office complex, with funding from the investment package to combat climate change, as the business center is planned to be a nearly zero-energy building.
The uniquely designed Verde office complex, developed by Capitalica Asset Management, is planned to be built to the BREEAM Excellent standard. The completion of the first phase of construction is expected in the second half of 2022.
SBA Group company Capitalica Asset Management, which manages commercial real estate in the Baltic States, already manages the real estate fund Capitalica Baltic Real Estate Fund I. The fund manages business center 135 in Vilnius, the business center Kauno dokas in Kaunas, and the shopping center Luizė located in Klaipėda. According to the audited data, in 2019, Capitalica Baltic Real Estate Fund I made €4.4 million in profits. The controlling shares (70%) of the company Capitalica Asset Management, established in 2016, belongs to one of the largest Lithuanian capital business groups SBA, another 30% of the shares belong to Mr Barštys’s company Fox Holdings.
CEO of Capitalica Asset Management“
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