Estonia, Funds, Good for Business, Real Estate
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Thursday, 28.03.2024, 11:43
EfTEN to buy the property of ABC Motors sales and service centre in Tallinn
Until now,
the properties were owned by ABC Vara AS
and once the contract goes into effect, EfTEN
Real Estate Fund III will lease the purchased properties back to ABC Motors
AS. The total area of sales and service centre is 2400 square meters and the
overall size of the property is 9008 square meters.
According
to Viljar Arakas, member of the board of EfTEN Real Estate Fund III, the centre
is very well located, especially for the customers of the car service who don’t
need to spend their valuable time on logistics while taking their car to and
back from the service. “In addition - almost all space of the compact centre is
being used and it has a reliable tenant who has been operating on the premises
for over 15 years,” added Arakas.
“As the
experience of food stores has shown – our business objective is not to own the
real estate, where ABC Group is operating, so we prefer to invest our assets
into our core business activities,” said chairman of the supervisory board
of ABC Grupp Mart Vips.
The
purchase price of the properties is 3 mln euros, VAT excluded. “The net
entrance yield is 8%, not considering the bank loan - which is an appropriate
level for the fund. We also plan to use up to 65% of loan capital to finance
the deal which will further increase the operational return of the equity
capital. The transaction size of the deal makes less than 3% of the total
assets of the fund,” said Arakas.
The deal
goes into effect once it has been approved by Estonian Competition Authority and
will be concluded in January 2019.
EfTEN
Real Estate Fund III AS is public closed alternative investment fund founded in
2015 by fund manager EfTEN Capital AS, which is listed in Nasdaq Baltic Main
List. The fund invests in the commercial real estate in the Baltic States.
EfTEN Capital AS is an asset management company, founded in 2008, specializing
in commercial real estate investments in the Baltic States. The company is also
managing EfTEN Kinnisvarafond AS, EfTEN Kinnisvarafond II AS and EfTEN Real
Estate Fund 4. EfTEN Capital group of companies (EfTEN Capital AS with its
subsidiaries) manages 43 commercial real estate buildings and more than 1100
tenants. Total market value of the real estate assets under management is above
600 million euros. EfTEN Capital is authorized and regulated by Estonian
Financial Supervision Authority.
ABC
Motors AS is a subsidiary of ABC Grupp whose core business is the sales of new
and used cars, sales of spare parts and servicing the vehicles. ABC Motors AS
represents Renault and Dacia trademarks. ABC Motors has been active for 16
years and currently operating with two car centres and one sales site. The
sales profit of ABC Motors in 2017 was 40 mln euros, which exceeded the
sales profits of the previous year by 14%. In 2017, altogether 2407 new
vehicles were sold.