East Capital launches Baltic Property Fund III
East Capital, a specialist in emerging and frontier markets, has announced the launch of the East Capital Baltic Property Fund III, which is the company’s third vehicle to target the real estate sector in the Baltic States since 2005.
The Fund will invest in high-quality commercial properties within retail, office and logistics, with well-established tenants in established and sought after locations in Tallinn, Riga and Vilnius. The Fund’s term is eight years with a possible extension of two years.
The Fund is a Luxembourg based SIF-fund with an expected size of up to €100 million, targeting institutional investors, and has over €70 million in commitments at the time of launch.
Kestutis Sasnauskas, Head of Private Equity and Real Estate at East Capital, commented: "We are very encouraged by the prospects of good long-term growth in value for properties in the Baltic countries. High yield, recovering rent levels and decreasing vacancy rates make the sector very attractive. East Capital’s total real estate assets under management stand at around €300 million, 250,000 sqm and more than 500 lessees in all three Baltic countries. This reconfirms our position as one of the leading investors in the Baltic real estate market.”
The market, especially in Tallinn, Riga and Vilnius, shows yield levels of seven to eight percent, which is two to three percentage points higher than in the Nordic capitals. The fact that rents have recovered and lending terms from primary Nordic banks are favourable ensure the continued attractiveness of the Baltic real estate sector.
“We are equally encouraged by the increased interest in the sector among international investors, with transaction volumes returning to pre-crisis levels. This is further underpinned by the stable economies, which represent the highest growth in the Eurozone, with low unemployment and low inflation,” added Kestutis Sasnauskas.