EfTEN Real Estate Fund III AS, a fund investing in Baltic commercial properties, announced via the stock exchange the launch of the fund’s new share offering, with the subscription going on from May 16 and to May 31. The offering price per share is €16, the fund announced.
“The maximum volume of the share issue is €16m and existing shareholders will have a pre-emptive right in the subscription on the shares. EfTEN Real Estate Fund III will use the equity collected in the share issue to pay back the bridge financing related to the acquisition of ABC Motors sales and service centre in Tallinn, in the amount of €1.5m, as well as for the construction of Hortes garden centre at Tähesaju industrial park in Tallinn and in vast majority for new investments in Baltic commercial properties”, said Viljar Arakas, Member of the Management Board of EfTEN Real Estate Fund III AS.
According to Arakas, the fund is investing only in properties with a stable cash-flow, the emphasis being on the expression “stable”. “We prefer commercial buildings with a strong tenant base, where we see long-term good performance, not only over the next few years. I believe that we can use the equity collected in the share issue for acquiring and developing suitable commercial spaces”, Arakas told.
Of EfTEN Real Estate Fund III AS’s portfolio, retail properties constitute 42%, logistics and production spaces 30% and office buildings 28%. Across the countries, 68% of the fund’s portfolio is in Lithuania, followed by Estonia (24%) and Latvia (8%).
To the fund’s investment portfolio belong DSV logistics centres in Tallinn, Riga and Vilnius, a sales and service centre of ABC Motors in Tallinn, two Hortes garden centres and Laagri Selver retail centre in Tallinn, Evolution business centre in Vilnius, Saulės Miestas retail centre in Šiauliai, as well as Laisves 3 and Ulonų office buildings in Vilnius.
According to the dividend policy, the fund will pay dividends of 80% of the fund’s free cash-flow in the previous business year. For 2018, the fund paid out 100% of free cash-flow or €3.1m, meaning a net dividend of €0.95 per share.
In total, up to 1 million new shares are offered in EfTEN Real Estate Fund III AS’s share issue. The shares are offered to all private and legal persons in Estonia, in accordance to the prospectus of the public offering of shares. The shares can be subscribed on in all Estonian commercial banks. The fund’s shareholders as of the end of business of Nasdaq CSD on May 7, 2019 have a proportional pre-emptive subscription right. According to this, every current shareholder can subscribe on up to 31% of currently held shares. Whereas current shareholders do not have a subscription obligation and every current shareholder can subscribe less or more. Minimum subscription is one share at the price of €16, of which €10 is nominal value and €6 is share premium of the offered share. Offered shares are eligible for dividends starting from the business year 2019.
The fund’s shareholders decided the share issue in the annual general meeting on April 17 and the Estonian Financial Supervision Authority (EFSA) registered the share issue’s prospectus on May 13. New shares will be listed in the Baltic Main List of Nasdaq Baltic.
EfTEN Real Estate Fund III AS is an alternative investment fund founded in 2015, which is listed in Nasdaq Baltic Main List from December 01, 2017. The fund’s assets are managed by EfTEN Capital AS, an asset management company, regulated by the Estonian Financial Supervision Authority. 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 where over 1,100 tenants are operating. Total market value of the real estate assets under management is about €700m.