23. November 2020
LHV Pension Funds are in the process of purchasing three stock office-type commercial buildings in Jüri in Rae municipality in which the biggest lessee is the Tanker brewery.
The sales agreement was signed last week and will be completed upon receipt of the merger clearance from the Competition Authority.
The purchase represents the fifth direct investment made in real estate by LHV. “We’re still very interested in commercial property as an asset class,” explained LHV fund manager Kristo Oidermaa. “We see investing in it as an opportunity to diversify our portfolio and earn higher-than-average returns. Two of the decisive parameters for us have always been the location of the property and whether it has reliable, long-term lessees.”
Rait Riim, the head of real estate investments with LHV Varahaldus, says that from the point of view of logistics and regional development, the facilities are very well located. “They’re right on the Tallinn-Tartu highway and next to the Jüri ring road,” he said. “The area’s already home to a large number of logistics centres, and they’re about to be joined by Estonia’s first Ikea store, which we obviously see as added value.”
Riim added that the company’s focus in commercial property investments to date has been on office buildings and big lessees with an international background, but that with this investment it can be a partner to small but innovative Estonian companies that need modern, multi-functional leased space.
The three stock office-type buildings at Kesk tee 10, 10a and 12 in Jüri boast a total of ca 6400 m2 of enclosed net space. It is characteristic of such buildings that the sales showrooms, offices, production facilities and warehouses belonging to small companies are situated in the same location. Two of the buildings were completed in 2007 and one in 2019. The biggest lessees are the Tanker brewery and biotechnology device manufacturer Artesyn.
In addition to the commercial buildings in Rae municipality, LHV Pension Funds owns the Valge Maja office building in the centre of Tallinn, the Microsoft office building in the TalTech science park and the 127 rental apartments in the Lumi Kodu building in North Tallinn. A further 164 rental apartments which the company will also own are currently being constructed on Mustamäe Road, due for completion in Q4 2021.
Riim says that LHV’s ambition is to expand its rental property portfolio further, with investment opportunities also being sought outside of Tallinn – on the property markets of neighbouring Baltic capitals Rīga and Vilnius.
LHV purchased the buildings from Kesk Estates OÜ. The transaction was mediated by Catella Corporate Finance. LHV was advised on the transaction by FORT Advokaadibüroo and Projector. Kesk Estates OÜ was advised on the transaction by Law Firm LEVIN.
The parties have chosen not to reveal the value of the transaction.
LHV pension funds are managed by LHV Varahaldus and have more than 185,000 clients. LHV offers both actively and passively managed II and III pillar pension funds valued at more than 1.5 billion euros in total.
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