UAB Capitalica Baltic Real Estate Fund I
Capitalica Fund successfully issued bonds amounting to EUR 3 million for Verde green office complex in Riga
Capitalica Baltic Real Estate Fund I, managed by the investment management company Capitalica Asset Management, has successfully completed the first phase of a three-year bond issue, issuing EUR 3 million worth of securities for the development of the Verde green office complex in Riga. In 7 days, the issue attracted more than 80 private and institutional investors.
"The exceptional interest of investors in the bonds confirms the attractiveness of the Verde office green complex project in Riga and the extremely good return opportunities. Although COVID-19 poses a challenge to the office market, detailed calculations and high demand for bonds confirm that the new complex aptly fills a large Class A office niche in the Latvian capital, and accordingly ensures a proper income for investors in the fund's bonds,” commented Andrius Barštys, CEO of Capitalica Asset Management.
According to him, the successful first phase of the issue also confirmed, as planned, the forecast that in an environment of expected higher inflation and low interest rates, investors are particularly interested in alternative investments in securities linked to business centers, which have long been a privilege available only to professional investors.
At present, Capitalica Baltic Real Estate Fund I is the only issuer that has publicly issued bonds for EUR 8 million only in the Lithuanian capital markets. The company has earned great confidence from local investors through consistent work in the capital markets, excellent communication and a clear business strategy,” said Tomas Varenbergas, Director of the Markets and Treasury Department at Šiaulių bankas.
The final annual interest rate on the bonds of the first phase of the issue was determined by auction and amounted to 6.5 percent. Interest will be the same for all investors and will be paid regularly, i.e. quarterly. Investors bought a total of 30,000 units of the company's bonds, with a nominal value of EUR 100 per bond. "As it is usually possible to invest in our fund only from EUR 125 thousand, low-denomination bonds created an opportunity for a much wider circle of investors to purchase an attractive product and become our partners," said Barštys.
In the future, investors will be offered to buy bonds for another EUR 5 million. Issue organizers and distributors are Šiaulių bankas AB and Luminor Bank AS.
This is the second issue of Capitalica Baltic Real Estate Fund I. The public offering of the first EUR 5 million bond issue in 2019 was also successful for it the company – it was distributed three months earlier than planned.
"We are pleased to be able to contribute to the successful development of the Capitalica fund in Riga, as well as to provide our customers with the opportunity to choose this attractive investment alternative," said Paulius Žurauskas, Head of Financial Markets Department of Luminor.
The funds received from the bond issue will be used by the fund managed by Capitalica Asset Management to finance the green concept business office complex currently being developed in the center of Riga. It is planned to invest more than EUR 60 million in the construction of a Class A office complex, the total area of which, together with the underground garage, will reach 45 thousand square meters, is planned to start this year. It will be one of the largest office complexes in the Latvian capital.
The European Investment Bank (EIB) has provided a EUR 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 fund, managed by Capitalica Asset Management, signed a EUR 49 million general contract in October with Latvian construction company Velve, which won the tender for the position of the general contractor. Construction of the exclusive design Verde green office complex, planned to be built according to the BREEAM Excellent standard, is scheduled to begin in November, with the completion of the first phase scheduled for the second half of 2022.
SBA Group company Capitalica Asset Management, which manages commercial real estate in the Baltic States, manages the real estate fund Capitalica Baltic Real Estate Fund I. This fund includes the 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 EUR 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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