Following another interim dividend payment in late December 2013, BPT Baltic Opportunity has made good on its promise to deliver 7 percent in annual dividends and 15 percent in overall return.
The Baltic real estate markets are improving and producing attractive cash-flows. This is the conclusion following the latest 3.5 percent interim dividend distribution made by BPT Baltic Opportunity in December 2013 and a pre-audited result of 15 percent total return for the year.
The December distribution combined with payments earlier in the year brings the total distribution to 7 percent p.a. on the average paid in capital for 2013. Combined with the independent portfolio valuation from Colliers International establishing a slight capital gain of 4 percent on the assets, the fund delivers a return of 15 percent in total for the year.
“We have always believed there is attraction in the Baltic real estate markets, not just in the diversification factor but in the high yields and basic cash flows. Now we have proved it,” said fund manager Tarmo Karotam. “The attractive bank financing conditions achieved with our finance partners at LTV of 50 percent have also played a positive role in this process.”
BPT Baltic Opportunity has been working to build up the asset portfolio to an attractive size in order to accumulate and distribute competitive cash flows from the rental revenues. The fund has an annual dividend target of 7-8 percent once fully invested. Yet even though there is still capacity to take on more capital, the fund is already making good on its promise to investors.
“We are very pleased to deliver on our targets and get cash out to the investors. It is a clear testament to the skill of the team in carefully selecting established assets in the Baltic capitals and the value of hands-on asset management. A commendable return like this underwrites both our strategy and long-term ability to operate and understand the Baltic real estate markets,“ said Karotam.
“In a few months we are looking to complete our latest transaction in Vilnius, bringing the fund’s gross assets close to €50 million, and it is rewarding to see the current investments perform well and new successful investments coming into the portfolio,” explained Karotam.
For 2014 the fund is expecting continued moderate growth in rent levels and the team stands by to pursue promising investment opportunities, which have just come to the market.
“We believe 2014 represents the last year of recovery for the Baltic States and thus this year will also be the last opportunity to time the market and add final investments to the portfolio after which a 3-year holding period kicks in,” concluded Tarmo Karotam.