Newsec in the Baltics advised on the sale of an office building located in Vilnius, Lithuania. The property owned by Prosperus Asset Management RE fund will be sold to Baltic Horizon Fund for EUR 20.75 million. This has been the largest Class B office deal in the Baltic states and the second acquisition of a Class B office building in Vilnius by Baltic Horizon Fund this year.
North Star is a B class business centre built in 2009 with total area of 10,800 sqm. The property is located in a growing Vilnius neighbourhood situated in between Vilnius CBD (c.a. 2km) and largest B class office park Technopolis.
“The 10 year lease cycle since North Star openied has come to an end and therefore in the last 1-2 years we were busy prolonging lease agreements with the main tenants, the vast majority of whom decided to remain in the property. We are glad that our efforts have been appreciated by the market and the buyer as our Prosperus fund is entering its asset realisation stage. Through this transaction we are selling the business centre acquired in 2014 and thus validating our business model. Thanks to our team of professionals, we have achieved and exceeded the fund’s ROI targets. At this moment, our company owns two RE funds and will introduce a new investment opportunity soon,” said Gediminas Baltakis, CEO of Prosperus Asset Management.
“We are pleased to bring North Star into our Vilnius office portfolio and are in general content to strengthen the fund’s position in the Baltic office segment,” commented Baltic Horizon fund manager Tarmo Karotam.
According to Andrius Švolka, Head of Transactions at Newsec in the Baltics, this has been an important office deal in the Baltics: “The sale of this objects has shown that investors have not forgotten B class office segment and the interest for commercial RE outside CBD remains strong too. This is due to the fact that B class offers higher yields as compared to CBD location, however, fundamentals of B class offices look very good and are supported by strong demand from international and growing local tenants.”
The expert has noted that the North Star business centre is the second acquisition of B class office building in Vilnius by Baltic Horizon Fund this year. “Previous acquisition of Baltic Horizon was Duetto II, B class office in the other part of Vilnius. Both buildings have State owned anchor tenants: Duetto II is the headquarters of Vilniaus Vandenys (State controlled water provider), while North Star is home to the State Tax Inspectorate. The acquisition of these business centres shows trust in micro B class locations and State-owned tenants,” explained Mr Švolka.
Law firm COBALT represented the real estate fund managed by Investicijų valdymas Prosperus, Baltic Horizon Fund was represented by the law firm Walless.
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