Announcement from the exchange
Nasdaq welcomes Capitalica Baltic Real Estate Fund I second bond issue to First North
Vilnius/Riga/Tallinn, Nasdaq Baltic Market, November 30, 2020 – Nasdaq (NDAQ) announces that a second bond issue of the Capitalica Baltic Real Estate Fund I, which is managed by Capitalica Asset Management, was included on trading on the Nasdaq Baltic First North bond market by Nasdaq Vilnius on November 30, 2020. Proceeds raised in the second public bond issue will be used to finance the development of the VERDE class A sustainable business center in Riga.
The size of the second bond issue is EUR 3 million. The nominal value of one bond is EUR 100. The three-year bonds have an annual interest rate of 6.5% and mature on October 30, 2023.
“It is a great to see that Capitalica Asset Management is actively using financing opportunities that the Nasdaq Baltic securities market offers. This is company’s second bond issue listed on the Nasdaq Baltic First North market,” says Saulius Malinauskas, the President of Nasdaq Vilnius. “We wish company success and look forward to supporting them in the future”.
“We are active supporters of a strong stock exchange since the capital market increases the opportunities for both investors and business developers, including real estate. The success of our offering shows that the bonds are attractive to investors, and we believe this alternative investment opportunity will promote greater liquidity on the exchange. At the same time, our example will help other real estate developers discover and more confidently take advantage of bonds as an atractive alternative financing instrument,” says Andrius Barštys, the CEO of Capitalica Asset Management.
According to him, the successful bond issue also confirmed the forecast that in an environment where growing inflation and low interest rates are expected, investors are particularly interested in alternative investments in securities linked to business centers, which have long been a privilege available only to professional investors.
“Investors’ exceptional interest in these bonds confirms the attractiveness of our VERDE green office complex project in Riga and the extremely good return opportunities. Although COVID-19 poses challenges for the office market, detailed calculations and high demand for the bonds show that the new complex fills a large niche for class A offices in the Latvian capital, and accordingly will ensure proper income for investors in the fund's bonds,” Andrius Barštys adds.
The fund managed by Capitalica Asset Management in October signed a EUR 49 million agreement with the Latvian construction company Velve, which won a tender for the role of general contractor at VERDE. It is planned that the distinctively designed office complex will be built to comply with the BREEAM Excellent standard, with construction set to begin in November and completion of the first phase scheduled for the second half of 2022.
The European Investment Bank (EIB) has provided a EUR 22 million loan for construction of the VERDE green office complex, with funding from the investment package to combat climate change, given that the business center is planned to be a nearly zero-energy building.
About Capitalica Baltic Real Estate Fund I
Through Capitalica Baltic Real Estate Fund I, Capitalica Asset Management, which was established in 2016, manages commercial real estate in the Baltic countries. A controlling stake in Capitalica Asset Management (70 percent) is owned by the SBA Group, one of the largest Lithuanian-owned business groups, while the remaining 30 percent is held by Fox Holdings, an enterprise of Andrius Barštys.
Capitalica Baltic Real Estate Fund I also owns the Kauno Dokas business center beside the Neris River in Kaunas, the Luizė shopping center in Klaipėda, and the 135 business center in Vilnius. In 2021 in the Latvian capital of Riga, the VERDE complex of two top-class office buildings owned by Capitalica Baltic Real Estate Fund I is due to open. Total investments in the complex in Riga are planned at over EUR 65 million. The planned business center with a BREEAM Excellent rating will have total floorspace of 45 000 sq. m., including underground parking.
About First North
First North is a multilateral trading facility (MTF) tailored to support smaller, growing companies that want to raise capital and get the visibility and credibility of being a public company. Respectively, for investors, First North offers an opportunity to invest in companies that are in relatively early stages of their growth. First North is an alternative market and is often seen as a first step towards trading on the regulated market.
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