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EfTEN Real Estate Fund news

EfTEN acquired new Selver supermarket development on the outskirts of Tallinn

A public closed-end alternative investment fund EfTEN Real Estate Fund III AS acquired from Oma Ehitaja AS a property at Pärnu maantee 554 and company Projekt 554 OÜ, developing new Selver supermarket to Laagri borough, located on the outskirts of Tallinn. Total investment amounts to 6.2 million euros, including the land for development and construction.

According to EfTEN Real Estate Fund III AS’ fund manager Viljar Arakas, the close proximity to fast-developing Laagri residential area, location right next to busy intersection and strong anchor tenant makes Selver development an attractive investment, fitting for the portfolio. „The location is great for any commercial activity, but first and foremost for grocery store. Selver supermarket to be developed is located at Pärnu maantee, one of the main highways connecting Laagri to the capital and making it conveniently accessible for people commuting home after work,“ added Arakas.

According to Oma Ehitaja AS’ chairman of the management board Kaido Fridolin, the company is focused on residential developments for private persons as well as commercial developments targeted at funds and investors interested in long-term cash-flow. „Based on successful joint projects in the past, we have developed a great cooperation with EfTEN – continuing it is a logical course of action for us,“ said Fridolin.

The property acquired is 11 308 square metres in total with 6 696 square metre building to be developed, including 3 077 square metres of leasable area. Property shall have sufficient number of parking spaces, including 100 parking spaces in 2 800 square metre underground parking lot. The design and construction is carried out by AS Oma Ehitaja and the building will be handed over in December 2017. Construction is supervised by Ehituskorralduse OÜ.

Alternative investment fund EfTEN Real Estate Fund III AS organised third public offering of shares in Spring 2017, raising 6.3 million euros. In addition to Selver grocery store to be opened in Laagri, Tallinn, the capital raised with the third public offering will be invested into Hortes gardening centre also located in Laagri. Additionally, reconstruction work at DSV logistics centre in Riga is planned.

The capital raised with the first two public offerings of shares in 2015 and 2016 has been invested in the following investment objects in the Baltic States: Saules Miestas shopping centre, Ulonu business centre in Vilnius and Laisves 3 office building, also DSV logistic centres in Riga, Vilnius and Tallinn. As of March 31, 2017, the Fund’s gross asset value is 76.3 million euros, with 29.9 million euros of owner’s equity.

EfTEN Real Estate Fund III AS is the only fund, managed by EfTEN Capital, that makes investments to the large-scale commercial real estate projects accessible to retail investors, characterized by attractive returns from stable and predictable cash flows and moderate capital growth. The Fund’s leverage, according to prospectus confirmed by Estonian Financial Supervision Authority, is limited to a maximum of 65 percent of the real estate acquisition value. Annual expected equity return is 15%. EfTEN Real Estate Fund III AS is not a guaranteed fund.

From annual free cash flow the Fund pays 80 percent out in dividends. Annual expected dividend rate is 4 – 8 percent. For 2016 shareholders received net dividend of 63 cents per share – in total 1 502 716 euros (in 2015, 29.7 cents per share).

Regulated by Estonian Financial Supervision Authority, EfTEN Real Estate Fund III AS term is 10 years, divided into 3-year investment period, 5 years holding and 2 years for exit. The Fund will potentially be listed in Baltic Stock Exchange market after investments period.

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