18 December 2018
Bonava and Lumi Capital have concluded an investor transaction, as a result of which two new rental buildings with all conveniences will be established in the future residential district of Uus-Mustamäe, on the outskirts of Mustamäe. The rental buildings will be completed in the second half of 2021.
The rental buildings to be built in the Uus-Mustamäe residential district will feature 84 one-, two- and three-room apartments. The rental buildings form a part of the comprehensive living environment developed by Bonava, in which 750 new homes will be completed over the next 5-7 years. Also, a diverse park with playgrounds, a community garden, patches of grass and a picnic area, outdoor fitness and pump track for skateboarders, roller skaters and cyclists of nearly 7,000 square metres will be built and given to the inhabitants to use. “Bonava’s strategy is to offer affordable and high-quality homes for many people. While in Scandinavia and Germany one part of this strategy is the establishment of rental buildings, in the Baltics and Estonia, this is the first deal of this kind for us. We are happy to give our contribution to increasing the market share of institutional investors on the Estonian rental apartment market and offer high-quality apartments and professional management to customers, who do not want to tie themselves up with a home loan,” Timo Riismaa, CEO of Bonava Eesti said.
The transaction is the second investment in rental buildings in the cooperation of Lumi Capital and LHV Pension Funds. The Lumi Kodud rental buildings, with 127 apartments acquired in the Manufacture district, will be completed next spring.
The fund manager of LHV pension funds, Kristo Oidermaa, confirmed that the pension funds continue to invest in professionally managed rental buildings. “The level of current offers on the Tallinn rental market is uneven. The selection for those interested in long-term rent is limited and whenever you manage to get a good offer, there is no guarantee that the increase in rent will remain transparent, and the rental home that you were pleased with once will remain such for the entire desired period,” Kristo Oidermaa explained. “The capital is growing year by year together with expectations about the quality and pricing of rental property, which is why we believe that the development pattern of Tallinn is similar to other bigger Nordic cities,” the fund manager added.
Martin Rekor, partner at Lumi Capital noted that the rental buildings of Lumi Kodud at Uus-Mustamäe are a suitable addition to the corporate portfolio, as these are located in a peaceful inner district in the heart of the residential regions of West Tallinn. “The houses are just a short walk from many shopping centres, schools and kindergartens, and you can quickly get downtown as well as to the region of TalTech,” he added, talking about the recent investment. “We are happy to create new rental buildings in cooperation with the leading Nordic residential developer Bonava, who has ample experience in similar types of transactions and cooperation in the Nordic countries,” Rekor added. “Lumi Capital will continue looking for investments all over Tallinn, to create brand new rental apartments, for which there is a great demand. In cooperation with LHV pension funds we plan to increase the portfolio of rental houses to 500 apartments,” Rekor said.
Bonava is a leading residential developer in Northern Europe. The company operates in Sweden, Finland, Denmark, Norway, Germany, St. Petersburg, Estonia and Latvia with a turnover of 1.45 billion euros in 2017. Bonava has sold more than 1,900 homes in the course of the 14 years of operation in Estonia. Lumi Capital is a company engaged in managing property investments, that has established a business strategy for investing and leasing rental buildings, implementing it together with LHV’s pension funds. The pension funds of LHV Varahaldus have nearly 170,000 clients. LHV offers second and third pillar pension funds that are managed actively as well as passively. The volume of LHV’s pension funds totals 1.2 billion euros.
Read more