Capitalica Baltic Real Estate Fund I, managed by SBA Group’s investment management company Capitalica Asset Management, has successfully completed the placement of public bonds issued in 2020.
In October, bonds were issued in the amount of an additional 5 million euros with a yield of 5.5%, thus the total amount of issued bonds reached 8 million euros. In total, the project of the greenest office complex “Verde” in Riga with a bond issue has attracted 13 million euros and after its commissioning will be one of the largest office complexes in Riga.
“The strategy to be the first in the capital market to offer the opportunity to invest in bonds related to business centers has fully proven itself. “The clear progress of the project is also boosting investor demand for the securities. Nine of the first ten floors of the building have already been completed and negotiations with a significant number of potential tenants have reached the final stage,” said Andrius Barštis, Verde’s developer and head of Capitalica Asset Management.
Capitalica Asset Management Fund will use the proceeds from the bond issues to finance the environmentally friendly concept office complex “Verde”, which is currently in the development phase and is located in the most advanced business district of Riga – Skanste. The partially completed Class A business center, including an underground car park, will provide a total area of 45,000 square meters and is expected to attract investments of approximately 65 million euros. This will be one of the largest office complexes in the capital of Latvia.
Verde bonds have attracted the interest of both individual and professional institutional investors. The success of the bond distribution encouraged the participation of other market participants. This opens new opportunities for investors, increases the financial diversification of developers and at the same time contributes to the development of the Lithuanian capital market. The second bond issue stage of Capitalica Baltic Real Estate Fund I has been organized by AB Šiaulių Bankas.
“Significant interest in the bond issue has shown that investors are attracted to exclusive business center projects that generate stable returns and are implemented by reliable developers with open communication that maintains a clear vision. Demand for real estate developers’ securities is also driven by high inflation, as Bonds offer opportunities to maintain and increase equity, “explains Toms Varenbergs, Director of Markets and Securities at AB Šiaulių Bankas.
Last year, in the first stage, Capitalica Baltic Real Estate Fund I raised three million euros with an annual return of 6.5%. In total, Capitalica Asset Management Fund has successfully placed two bond issues in the total amount of 13 million euros.
A € 22 million loan was obtained from the European Investment Bank (EIB) for the construction of the Verde office complex, which approved funding from an investment program to combat climate change, as the business center is expected to be a near-zero energy building.
Last October, Capitalica Asset Management Fund signed a general contract worth 49 million euros with the winner of the tender – the Latvian construction company “Velve”. The first stage of construction works is planned to be completed in June 2022, but the complex is planned to be fully completed in 2023.
SBA Group company Capitalica Asset Management, which manages commercial real estate in the Baltic States, manages Capitalica Baltic Real Estate Fund I. The fund owns a business center 135 in Vilnius, a business center Kauno Dokas in Kaunas and a shopping center Luizė in Klaipeda. The controlling stake (70%) in Capitalica Asset Management, which was acquired in 2016, belongs to SBA, which is one of the largest business groups in the Lithuanian capital, while another 30% belongs to A. Barštisa’s company Fox Holdings.
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