East Capital Property Fund to Pay Special Dividend after Completing EUR 200m Investment Programme
East Capital Baltic Property Fund III’s Board has recommended starting to make regular 3% dividend payments twice a year, supplemented by a one-off payment equivalent to a 4.5% return on the capital committed by investors to the fund established in 2015. This follows the purchase last week of “Lidostas Parks,” a fully leased logistic park near Riga International Airport, for around 19 million euros.
Madis Raidma, CEO of East Capital Real Estate, said: “The performance of the portfolio and our asset management initiatives have enabled the fund to generate a surplus beyond what is needed to sustain dividends and repay loans. Now that the fund’s equity is fully deployed, the Board and management team want investors to start receiving the rewards from the dynamic Baltic market, where strong economic fundamentals have translated into very attractive returns.”
The fund’s management team forecasts that the dividend yield may increase in coming years as property enhancement projects under way lift rental income and as a result of lower loan amortisations. The purchase of Lidostas Parks increased the portfolio’s exposure to the attractive logistic sector in the Baltic region.
The logistic park was the fund’s sixth and final investment in a programme focused on acquiring income-producing properties in or around the Latvian and Estonian capital cities, Riga and Tallinn. The other assets owned by the fund in Riga are the P5 Logistic Complex and the Galleria Riga shopping centre, while its properties in or around Tallinn are the Vesse retail centre, the first Hilton hotel in the Baltics and Nehatu Logistics Park.
Raidma concluded: “Completing this investment phase means our attention turns to how we can continue to offer investors access to real estate opportunities in a region which provides attractive income returns and capital appreciation prospects. Our management team will be working on sourcing new investment opportunities for East Capital Real Estate IV, a fund for institutional investors set to be launched before the end of the year.”
About East Capital Baltic Property Fund III
East Capital Baltic Property Fund III is a real estate fund established by East Capital in 2015. It invests in high-quality commercial properties with well-established tenants in attractive locations in Tallinn, Riga and Vilnius. The fund raised equity from institutional investors and deployed it to assemble a 200 million-euro portfolio of assets. Previous investments in the fund include three properties in Estonia and two in Latvia: Vesse retail centre, the first Hilton hotel in the Baltics and Nehatu Logistics Park located in and around Tallinn, as well as P5 Logistics Complex and the Galleria Riga shopping centre in Riga.
East Capital Real Estate
East Capital Real Estate is a leading active real estate manager that focuses on commercial real estate investments in the Baltic region, primarily in office space, logistics and retail. We manage three funds and one investment mandate, with a total property value of EUR 423 million, distributed across properties with a lettable area of 380,000 square metres. East Capital Real Estate is part of East Capital Group, which was founded in Sweden in 1997 and has offices in Stockholm, Dubai, Hong Kong, Luxembourg, Moscow, Oslo and Tallinn. East Capital Group manages EUR 4.9 billion for a broad range of international investors including leading institutions, companies and private individuals.