Capitalica Baltic Real Estate Fund I, which is managed by the SBA Group’s investment management company Capitalica Asset Management, has successfully completed its placement of a public bond issue launched in 2020. During October, an additional 5 million euros’ worth of bonds issue was placed at a yield of 5.5%, bringing the total value of the issue to 8 million euros. In total, the Verde project has already raised 13 million euros through bonds.
“The strategy to be the first on the capital market to offer the opportunity to invest in bonds tied to business centres has proven amply justified. Massive investor interest and the successful distribution of bonds is testament to trust in Verde, the greenest project in Riga, as well as the prospects of the Latvian capital. The project’s clearly visible progress also drives investor demand for these securities. All nine of the first building’s floors have already been completed, and negotiations with a significant number of upcoming tenants have reached their final stage,” Capitalica Asset Management CEO Andrius Barštys says.
According to him, the bonds dedicated to Verde were of interest to both individual and professional institutional investors. The success of the distribution also encouraged other participants in the market to follow suit. This opens new opportunities for investors, increases developers’ financing diversification, and concurrently contributes to the development of the Lithuanian capital market. The second stage of the Capitalica Baltic Real Estate Fund I bond issue was organized by AB Šiaulių Bankas.
“The vast interests in this issue proved that investors are attracted by exclusive business centre projects, which generate stable returns and which are implemented by reliable, openly communicating developers who maintain a clear vision. The demand for real estate developers’ securities is further boosted by high inflation because funds that are not invested tend to lose value. Bonds offer possibilities to retain and grow one’s capital,” AB Šiaulių Bankas Markets & Treasury Department director Tomas Varenbergas says.
Last year, during the first stage Capitalica Baltic Real Estate Fund I raised 3 million euros at an annual yield of 6.5 per cent. In total, Capitalica Asset Management fund has successfully placed two bond issues totaling 13 million euros.
Capitalica Asset Management fund will direct the funds obtained through bonds to finance the currently under development green concept office complex in central Riga. The halfway completed class A business centre, including underground parking, will span a combined floorspace of 45 thousand square metres and is expected to draw around 65 million euros in investment. This will be one of the largest office complexes in the Latvian capital.
The office complex Verde’s construction drew a 22 million euro loan from the European Investment Bank (EIB), which approved financing from the climate change combatting investment package because the business centre is planned as a nearly zero-energy building.
Capitalica Asset Management’s fund signed a 49 million euro general contracting agreement last October with the contracting competition’s winner, the Latvian construction company Velve. As a result, construction work on the exclusive design Verde office complex, which is being built based on the BREEAM Excellent standard, is already well on its way, with all nine of the first building’s storeys completed already. The first stage of construction work is expected to be completed in the second half of 2022, while the complex should be fully completed in 2023.
Capitalica Asset Management, an SBA Group company engaged in managing commercial real estate in the Baltic States, manages Capitalica Baltic Real Estate Fund I. The fund owns the business centre 135 in Vilnius, the business centre Kauno Dokas in Kaunas and the shopping centre Luizė in Klaipėda. The controlling stake (70%) in Capitalica Asset Management, which was acquired in 2016, is held by SBA, one of the largest Lithuanian capital business groups, and another 30% is owned by A. Barštys’s company Fox Holdings.
For more information:
Andrius Barštys
CEO of Capitalica Asset Management
+370 612 30260
