On January 10, 2020, EfTEN Real Estate Fund III AS (the Fund) concluded
conditional purchase agreements to acquire headquarters building of Air Baltic
located in Riga Airport as well as production and storage facility located in
Kekava near Riga. With the transaction the Fund will purchase 100% holding in
the 2 following companies owning real estate corresponding to the investment
principles of the Fund from New Hanza Capital AS:
1. NHC 1 SIA with a share capital of EUR 500 000, owning commercial building
located at Tehnikas 3, Riga Airport, Marupes district, Republic of Latvia.
Building belonging to the company is located on the land, for which the
right of superficies exist, belonging to Riga Airport (VAS 'Starptautiska
Lidosta 'Riga''). The building was completed in 1977 and fully renovated in
2016. The total surface area of the building is 6 556.4 m² and it is wholly
occupied by Air Baltic group under the fixed term rent agreement valid until
2026. There are 77 parking places on the registered immovable.
2. NHC 3 SIA with a share capital of EUR 700 000, owning a registered immovable
located at Krustkalni, Kekava municipality, Kekava district, Republic of
Latvia. The production and storage facility located on the registered
immovable was completed in 2007. The surface area of the building is
14 129.9 m². There are 123 parking places on the registered immovable. 99%
of the building is rented out.
The total cost of the transactions is approximately EUR 15.8 million, of which EUR
7.2 million will be financed by Swedbank and Luminor. Taking into account the
large amount of uninvested capital of EfTEN Real Estate Fund III AS, the
management decided to use the higher equity ratio than usually. The total
unleveraged initial yield of the two projects is 7.5% annually. Considering the
indexing of fixed rental rate, net yield will increase by 8% over three years
compared to the acquisition price. The transactions should be completed after
the pre-conditions of agreements have been met, but not later than on February
28, 2020.
The monetary amount of the transaction with NHC 1 SIA will comprise 5% of the
current volume of assets of the Fund and the monetary amount of the transaction
with NHC 3 SIA will comprise 7% of the current volume of assets of the Fund and
the acquisitions do not constitute acquisition of a qualifying holding in the
meaning of the rules and regulations of Nasdaq Tallinn. The transactions also do
not constitute transactions with associated person and the members of the
Council and the Management Board of the Fund are not personally interested in
the transactions in any other ways.
Viljar Arakas
Member of the Management Board
Phone 655 9515
E-mail: viljar.arakas@eften.ee
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