The real estate fund Capitalica Baltic Real Estate Fund I managed by the investment management company Capitalica Asset Management has filed an application for the bonds issued by the fund to be admitted to trading on the Baltic First North alternative marketplace for debt securities managed by Nasdaq Vilnius. The bonds trading is scheduled to launch on 30 July of this year. The public bond issue is designed to fund the development of two class A business centres to be known as VERDE in Riga.
“Listing of the bonds on the stock exchange is a natural and planned step forward following the bond issue. We see added value and an appealing yield investment vehicle. So it would be surprising if we did not take advantage of the opportunities offered by the capital market. Our presence on the stock exchange not only reflects the liquidity of our financial instruments, but it is also one of the transparency elements of our business, the basis for our relationship with investors,” says Andrius Barštys, the CEO of Capitalica Asset Management.
The size of the bond issue by Capitalica Baltic Real Estate Fund I, which manages business centres in Vilnius and Kaunas and is planning the construction of class A business centres VERDE in Riga, is EUR 3 million. 70 investors have purchased its bonds during the initial public offering of the issue. The second round of bond offering will continue until 3 September. It is expected to raise EUR 5 million in total through public offering.
The bonds issued by the real estate fund will yield an annual fixed interest rate of 5% with the interest being paid on a quarterly basis. The nominal value of one bond is EUR 100. The bonds will be redeemed on 3 June 2022. The issue is offered and managed by AB Šiaulių bankas. The prospectus can be accessed on the Capitalica Asset Management website.
“Compared with the Scandinavian countries or Western Europe, the commercial real estate sector is somewhat quiet in the Baltic states with new or expanding service centres being the main drivers behind the Baltic commercial real estate market. Hence, our energy is specifically directed at it. Since the first round of offering of the real estate linked bonds has been highly successful, while the demand and interest have surpassed our expectations, we will consider continuing the use of bond issue as an additional financial instrument to fund commercial real estate properties,” says Mr Barštys.
The funds raised will be invested in the EUR 60 million facility of two class A business centres VERDE, which will be erected in Riga’s Skanste district. The building permit for the facility of 45 thousand square meters in area, including an underground garage, had been received back in June. At present, paperwork is being prepared for a contractor’s tender, which is scheduled to be published at the end of summer. It is planned to start the construction in autumn this year, while the first business centre is to open in 2021.
In addition to the project to be developed in Riga, Capitalica Baltic Real Estate Fund I also manages the 135 business centre in Vilnius, the business centre Kauno dokas, which is being developed near the Neris river in Kaunas, the second largest city in Lithuania, and the Luizė shopping centre based in Klaipėda, the port city of Lithuania. Along with the SBA Group, Lithuanian and Latvian pension funds managed by the investment company INVL Asset Management and other professional investors have already invested in Capitalica Baltic Real Estate Fund I.
Capitalica Asset Management, which manages Capitalica Baltic Real Estate Fund I, is in the business of managing commercial real estate in the Baltic states. The investment management company was incorporated in 2016. A controlling stake in Capitalica Asset Management (80%) is owned by one of the largest Lithuanian capital business groups, SBA, with the remaining 20% of the shares owned by Mr Barštys’ enterprise Fox Holdings.
Apart from Capitalica Asset Management, the SBA Group also owns the real estate innovation company Urban Inventors, which is developing the Green Hall business valley in Vilnius, the business centre BLC, and the BLC2 soon to be completed in Kaunas. Furthermore, the SBA Group controls the largest furniture manufacturing group in the Baltics, which consists of SBA baldų kompanija, Klaipėdos baldai, Šilutės baldai, Germanikas, Visagino linija, and Mebelain. The SBA furniture sector owns soft furniture manufacturer Kauno baldai. SBA also controls the largest textile corporate group in the Central and Eastern Europe, Utenos trikotažas, including the following companies: Šatrija and Mrija. Finally, the SBA Group also owns the robotic solutions company Robotex.
