In its fourth acquisition, the BPT Baltic Opportunity Fund is in the process of acquiring a retail development project in Vilnius, Lithuania, from Danish developer TK Development A/S. The project known as Domus Pro Retail Park has substantial pre-letting in place and is scheduled to be completed by spring 2014.
Located in the expanding residential district in Vilnius with over 70,000 inhabitants, on the arterial Ukmerges road leading to Riga, the Domus Pro Retail Park includes more than 11,000 sq m of soon-to-be-developed modern retail space. Structured as a typical box retail centre, the project includes approx. 80% pre-leased space with supermarket chain RIMI as anchor tenant.
The acquisition is the fund’s first in Lithuania:
-“We have been looking to diversify into Vilnius as part of the fund’s pan-Baltic strategy and this project had the characteristics we were looking for in addition to the attractive risk-return relationship which was negotiated with TK. Also, with retail assets we have a great deal of previous experience and success with, therefore retail continues to be the Fund’s preferred asset class aside from offices” explains fund manager Tarmo Karotam.
Acquired at an 8.5% net initial yield and with the standard conditions to a forward funding project, Domus Pro falls in two stages with the first stage scheduled to be completed in spring 2014 and stage II conditional upon sufficient pre-letting. The project will be developed by TK Development A/S.
By completing the acquisition of Domus Pro, BPT Baltic Opportunity will reach a total portfolio size of approx. EUR 50 million.
-“This ends our initial mission to build a portfolio with exposure to all three Baltic markets and a good mix of assets in their capital cities. The Fund is now aiming to materialize its remaining soft commitments and raise new equity from investors in order to make its final investments and close the Fund until its exit at the end of 2017,” says Tarmo Karotam.
BPT Baltic Opportunity Fund is the fifth pan-Baltic real estate investment fund managed by BPT Asset Management A/S. The fund is structured as a tax and cost efficient Estonian REIF structure eligible for both domestic and international investors.