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Founding of a subsidiary of EfTEN Real Estate Fund III AS and entering the aged care home segment with the acquisition of Pirita Pansionaat

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EfTEN SPV19 OÜ, a subsidiary of EfTEN Real Estate Fund III AS, signed a contract
under  the law of obligations  to acquire a property  located at Hunditubaka tee
12 / Karukella tee 5 in Tallinn from OÜ Arca Varahaldus. By the end of 2020, the
construction  of an aged care home will be completed in the property and it will
be  given to a long-term rent to Pirita Kodu  OÜ. It will be the first aged care
home in the fund's portfolio.

?With  Pirita  Pansionaat,  EfTEN  enters  a  segment with clear future outlook,
because  the demand for care services is facing a continuous growth. We are glad
that the first transaction concerns a home that is brand-new and can be found at
a  perfect location for clients from  Tallinn and its surroundings", said Viljar
Arakas, Member of the Management Board of EfTEN Real Estate Fund III AS.

The  construction works of the Pirita  Pansionaat started in the autumn 2019 and
will  be  completed  in  December  this  year.  The aged care home's property is
located  close to the Pirita  River and a new  residential area. The size of the
property  is 13,270 sq m. The total area  of the building under the construction
is about 6,000 sq m.

The  home will have beds for 250 clients.  In addition, in a separate section of
the  building, therapy services will be provided  as well for the elderly as for
the  children, with  two special  rooms with  pools, for  conducting sessions of
gymnastics, yoga, water gymnastics, etc.

Pirita  Kodu OÜ  will operate  the Pirita  Pansionaat, based  on a signed rental
agreement  for 10 years, with an option to  prolong it for another 10 years. The
tenant  will start making  the rental payments  from 1 April 2021 and during the
launch  period the rental fee will  gradually increase, reaching the full amount
as of 1 January 2022.

The  price of the transaction without VAT is 6.2 million euros and half of it is
an  investment in the fund's  equity and the other  half - 3.1 million euros - a
loan  taken by  EfTEN SPV19  OÜ. The  transaction is  financed by  Swedbank. The
financial  volume of the  transaction makes up  4% of the fund's current assets.
The yield on non-leveraged rental income for the first full year of operation is
7% per  annum. In order to  complete the transaction, a  consent of the Estonian
Competition  Authority is  required, after  which a  real right contract will be
singed for the transfer of ownership of the property.

As EfTEN Real Estate Fund III AS has previously fully invested the equity raised
in  the previous  share issues,  the parent  company of  the fund  will lend the
equity  required for the transaction, as a bridge financing from Swedbank in the
total  amount of 3.1 million euros. The respective  loan will be repaid with the
proceeds  from the share issue to be  organized in the spring of 2021. The exact
volume  of the  share issue  and other  commercial terms  will be decided by the
management  of  the  fund  by  the  end  of  the  first  quarter  of  2021 and a
corresponding  proposal  will  be  submitted  to  the Annual General Meeting for
approval.

After   the   acquisition,  the  fund's  investment  portfolio  encompasses  15
properties:  in addition to Pirita Pansionaat, DSV logistics centres in Tallinn,
Riga  and Vilnius,  a sales  and service  centre of  ABC Motors  in Tallinn, two
Hortes  garden centres and  Laagri Selver retail  centre in Tallinn, Piepilsetas
Logistics  Centre and airBaltic headquarters in Riga, Evolution business centre,
Saul?s  Miestas retail centre in Shiauliai, as  well as three office buildings in
Vilnius: Laisves 3, Ulon? and Rutkausko.

Before  the transaction, in the  EfTEN Real Estate Fund  III AS portfolio retail
properties constitute 37%, office buildings 35%, and logistics and manufacturing
spaces  28%. Across the countries, 60% of the  fund's portfolio is in Lithuania,
followed  by  Estonia  (23%)  and  Latvia  (17%).  After the transaction, retail
properties  constitute  35%, office  buildings  34%, logistics and manufacturing
spaces  27% and aged care homes 4%; by  countries 57% of the fund's portfolio is
in Lithuania, followed by Estonia (26%) and Latvia (17%).

EfTEN  SPV19 OÜ that acquired  the property is a  100% subsidiary founded in the
Republic  of Estonia. The Management Board Members  of EfTEN SPV19 OÜ are Viljar
Arakas and Tõnu Uustalu. The private limited company does not have a Supervisory
Board.  The foundation of a  subsidiary is not considered  to be the purchase of
significant  share for the purposes of the "Requirements for Issuers" section of
the  Rules of NASDAQ OMX Tallinn Stock  Exchange. Members of the Council and the
Management  Board of EfTEN Real  Estate Fund III AS  also have no other personal
interest in the transaction.

EfTEN  Real Estate  Fund III  AS is  an alternative  investment fund  founded in
2015, which  is listed  in Nasdaq  Baltic Main  List from December 01, 2017. The
fund's  assets are  managed by  EfTEN Capital  AS, an  asset management company,
regulated  by the Estonian Financial Supervision  Authority. The company is also
managing  EfTEN  Kinnisvarafond  AS,  EfTEN  Kinnisvarafond  II  AS  and limited
partnership  funds PEFoF, EdTEN Residential Fund  and EfTEN Real Estate Fund 4.
EfTEN  Capital  group  of  companies  (EfTEN  Capital  AS with its subsidiaries)
manages  50 commercial  real  estate  buildings  where  over  1,200 tenants  are
operating.  Total market  value of  the real  estate assets  under management is
about 750 million euros.

Viljar Arakas
CEO
Phone 655 9515
E-mail: [email protected] (mailto:[email protected])