EfTEN Capital to acquire Bergi LC in Riga from Lords LB Baltic Fund III in a record deal in Latvia
An agreement between EfTEN Real Estate Fund 4 and Lords LB Baltic Fund III has been signed where EfTEN will acquire Bergi LC in Riga. This is the largest logistics deal in Latvia since 2018. The transaction is expected to be closed within several months.
Bergi LC is ca. 50,000 sq m in size and is located in Riga, on Sigulda street. The property was built in 2008 and is leased to 2 main tenants: DO IT, a Danish importer and distributor of home furniture operating under the retail name JYSK, and Orkla Logistics, a supplier of branded consumer good to the grocery, specialized retail, pharmacy and bakery sectors.
The property was acquired by EfTEN Real Estate Fund 4, a fund managed by EfTEN Capital AS, the largest commercial real estate fund management company in the Baltics. According to EfTEN Capital Latvia CEO Viktors Savins, „Logistics segment currently provides for one of the most interesting return stories. Bergi LC suits our institutional portfolio well, due to its strategic and rapidly developing micro location in Riga city, quality tenants and acquisition yield. In the post Covid world, logistics is the growing trend. Bergi municipality is an ideal location for a logistics centre intending to supply the north/east regions (Scandinavia and CIS), and represents one of the best prime locations for logistics in Riga. In addition, the High Bay Warehouse and modern build of the property, combined with its ideal location ensure its future against alternative uses”.
The seller of the property is Lords LB Baltic Fund III, managed by one of the largest commercial real estate fund management companies in the region. According to Lords LB Baltic Fund III fund manager Efim Hiterer, “Bergi LC disposal is an important milestone in our Baltic Fund III exit process. Agreeing on divestment of already the second asset in recent few months shows that our managed assets have a positive demand in the market, and we are aiming to proceed with successfully exiting the fund.”.
Bergi LC is the largest logistics transaction in Latvia during the last 3 years. During 2020 there have already been over 50M EUR of logistics transactions, which constitute ca. 40% of the total transaction volume in Latvia.
“We are currently observing a great pick up of interest for logistics assets in the Baltic market by both local and regional players. Due to Covid19 impact on other RE segments the sentiment towards logistics and industrial is very strong. We expect more capital to be allocated to L&I segment, which will inevitably result in larger transaction volumes and yield compression”, says Andrius Svolka, head of transactions at Newsec.
Newsec acted as an advisor of this deal to Lords LB Baltic Fund III. Sorainen legal firm represented the seller, whereas Henrihs Damroze represented the buyer. The acquisition will be financed by SEB Latvia.