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Investment in Baltics Opportunities in fastest growing EU markets


Latvia & Estonia About countries Latvia and Estonia are countries located at the heart of the Baltic Sea Region - Europe’s fastest-growing market of more than 90 million people. It is a region described by political and economic stability, accessibility, ease and low cost of doing business and investor equality. Since joining the European Union and NATO, both countries have experienced phenomenal economic growth. Today, Estonia’s government debt is among the lowest in Europe and the economy has shown considerable endurance to the global economic crisis. After being severely affected by the global financial crisis, Latvia implemented extensive austerity measures as a result the economics as well as the confidence of foreign investors and FDI inflows are on the rise again. Countries have a unique geographical and cultural position, providing a strategic location for business operations targeting developed economies of the EU and emerging markets of eastern neighbors and are easy accessible, both from a logistical and social point of view - Riga(Latvia) and Tallinn (Estonia) are within 3-4 hours flight from major European capitals.

Economic indicators LATVIA

2009

2010

Why invest? 2011

2012

• The fastest improving economies in European Union

Real GDP growth, %

-18.0

-0.5

4.0

4.2

• Incentives of government to attract foreign investors / residence permit

Average annual CPI

3.5

-1.1

3.0

2.5

• Growing and transparent real estate markets

Unemployment, %

16.9

18.9

16.5

14.5

• Developed infrastructure • Macroeconomic and political stability • Business Friendliness

. ESTONIA

2009

2010

2011

2012

Real GDP growth, %

-14.1

-3.3

8.3

3.2

Average annual CPI

-0.1

3.0

5.0

3.9

Unemployment, %

13.8

16.9

12.5

10.2

• Skilled and motivated workforce • Cost Effectiveness • Quality of Life • Euro as official currency in Estonia. In Latvia starting from 2014


CF / Office / Riga

CF / Retail / Riga

Single tenant office building

Modern single tenant retail building

• Low Risk Tenant: G4S Latvia, a subsidiary of world’s leading security company Group 4 Securior. G4S Latvia is the biggest Latvian security company with over 15 years of experience; • Easy Management, No Vacancy: the property is 100% leased out to one single tenant; • Institutional Lease Agreement: 10+5 year binding lease agreement, in Euros, indexed at 3% p.a.; • Superb Technical Condition: The property is in an excellent condition and satisfies all the tenant’s specific needs; • Favorable Type of Transaction: The property is owned by an SPV, thus it is possible to acquire the ownership of the SPV without changing lease and credit

•One of latest modern retail projects in Riga; •Location in prestigious and growing business and residential area; •One of largest regional retailers PRISMA as single tenant; •10 year unbreakable lease agreement; • Triple net lease. leasgreement, inEuros, indexed at 3% p.a. •Gross building area: 8 630 m2; •Gross leasable area: 7 971 m2; •Parking: 385 p/p;

• • • • • •

GBA: 5,972 m2; GLA: 4,292 m2; Term of lease: 10+5 (from 2009); Indexation: 3% p.a.; Break clauses: No breaks possible; Utilities/side expenses: All servic-

•Parking on neighboring Sporta 8: 120 p/p;

es, maintenance, running repairs and

•Security - 12 month rental guarantee;

land tax are tenant’s cost and responsibility (except insurance costs).

•Building commissioned : November 2012; • Tenant (100% of the building) - AS Prisma Latvija; •Lease term - 10 years with no break option; •Indexation starting from 2017 - Euro-zone CPI; •NOI of 2013 - EUR 0,7 mln; •Contractual NOI in 2016 - EUR 0,9 mln.


CF / Office / Riga

CF / Residential / Riga

Modern office building in centre the the city

Cash flow apartment building in the Old Town

• The Class A office building in Riga, Baznicas (Baznīcas) Street 20/22, was built in 2003. It was the first building in Latvia with a double-glass/wooden facade and a roof garden. In recognition of its original design, the building was awarded a prize by the Latvian Association of Architects; • Location in the very heart of Riga, next to the St. Gertrude Old Church, in a central business district that offers convenient access and a developed transport infrastructure; • High class tenants : Canadian Embassy,Latvia Green Dot, Hauska & Partner, and the MAQS law firm. • The property joins two buildings: a six-story office 3 600 m2 building wand a multistory parking garage accommodating 250 cars. Retail spaces are located on the first floor of the building, and offices on the upper floors.

• • • • • • • •

Location in the top location- Old Town; Complete inside and facade renovation finished in 2004; View to the green park; Location on the opposite of Latvian parliament (thus building is under security of the Parliament); Existing rental cash flow- 95% of the building is leased out; Tenant profile- diplomats, top managers of international companies; All the apartments are fully equipped with furniture and household appliances Clear legal status of the building. • • • • •

Total area 3,121 m2; GLA (apartments): 2,017 m2; GLA (retail): 497 m2; 95% of the building is let; Landmark building, constructed in 1898, fully reconstructed in 2004.


Residential redevelopment / Riga Redevelopment project in the centre of the city • Unique Historical residential building in the city centre of Riga; • Elegant design of the facade representing a synthesis of vertical Art Nouveau and Neo-Classicism; • Large size of the building providing a critical mass for solid development of a landmark, lively multifunctional building (with prime residential or hotel function) rare for Riga centre; • Location with facade on the major traffic artery of Riga - Brivibas street and excellent visibility; • Easy access by public and private transport; • Excellent possibility to buy at historical market low (below substitution costs) and benefit from future capital appreciation as well as to earn through redevelopment; • Possibility to benefit from increasing interest for city center residential from non-residents; • Operating costs during the planning stage are covered from ground floor retail existing rent income.

Gross building area - 12706,4 m2 + 1 522 m2 Gross useful area - 10 121,7 sq.m, incl: - Residential -8 627,4 m2; - Retail - 1 494,3 m2; Number of floors - 6 + basement; Number of apartments (existing) - 69; Size of apartments (existing) - 28 - 217 m2; Number of ground retail premises - 6 (20,8-249,5 m2); Parking Inside yard - 1040 m2 (ca 25 lots).


Residential building 1 : • 33 apartments; • Area: 4,547 m2. Residential building 2: • 36 apartments; • Area: 5,765 m2. Office building: • Area: 2,254 m2. 5 star hotel: • 165 keys; • Area: 15,451 m2.

Development / Mixed-use / Riga Tango Square - exclusive real estate development project Tango Square is the most ambitious regeneration project in the Central Riga in years and foresees conversion of almost 1 ha of centrally located land plot into a vibrant “City Within A City” multifunctional area. The project includes: • Offices; • Retail function; • Residential function; • 5 start hotel. •Unique location in the prestigious central part of Riga; •Existing hotel management agreement with a leading global hotel network operator; •Significant asset appreciation potential; •All permissions and approvals granted; •Underground parking ready; •Flexible acquisition opportunities negotiable. •

Two-level underground parking: • 362 parking spaces; • Area: 16,152m2.


CF / Office & Retail / Tallinn Unigue cash flow generating project in the heart of the city •Unique architectural design of the project combining reconstruction of historical building and construction of new one; •A class location and quality of the building in modern mixed-use quarter in the centre of city; •High class office and retail tenants: Danske Norske Veritas, Servier, Bershka, Stardivarius, Pull & Bear. The redevelopment of 1,5 century-old Rotermann Quarter took place between the existing historical limestone buildings, including the Old Flour Storage from 1904. The New Flour Storage was aimed to form a plaza as a new focal point of the quarter. The project consists of three volumes; the Old Flour Storage with 2 additional stories, the New Flour Storage and the Atrium connecting the two. Ground floor is for retail and all upstairs are for offices.

Gross Building Area: 7 300 m2; Gross Leasable Area: 5 014 m2; In operation from: 2009; Average rent - EUR 12/m2; Occupancy - 90%; Building class - A.


CF / Office / Tallinn

Redevelopment / Office / Tallinn

Modern office building in centre of the city

Redevelopment opportunity next to CBD

•Location is directly in the city center with excellent access and visibility;

•The building currently is B class office located on the border of CBD; •Property is generating cash flow in the same time provides good opportunity for redevelopment or cash low optimization; •62% of the property is currently covered with rental agreements; •Location next to CBD allows redevelopment in A class; •Property has excellent access by both - public and private transport.

•Numerous local and international tenants with indexed rent and realistic indexation schedule. •The building was fully renovated in 2006; •Consists of: 1st (ground) floor - shops, restaurants, beauty salons; 2nd to 6th floor - offices, medical facilities, service halls; 7th and 8th floor - apartments. •Net space: 16 351 m2; •Rented area: 12 334 m2; •Offices rented : 7 400m2 •Average rent: 11,0 EUR/m2 AVG Yield 7% at the moment of transaction; Expected Yield 8% in the end of 2015

• • • • • •

Land plot area: 2 245 m2; Footprint - 1 662 m2; Net area: 8 789 m2; Leasable area: 7 069 m2; Parking spaces: 83; The property involves 2 buildings - 9 storey office building and 4 storey building.


Development / Office / Tallinn AGE PLAZA - modern A class office development

CF / Office / Tallinn

Upcoming modern A class office building •A class location in the city center area;

•Modern construction project with open-space planning; •Already made reservations for spaces in project; •Location is developing office region with good concentration of modern offices, retail and services; •Adjacent to one of the most intensive inner-city gateways and has an excellent access with both private and public transport; •Most liquid size of the project for exit. Well demanded by corporate and institutional investors.

•Active brokerage support of the project by Uus Maa brokerage de-

•Building size: 6700 m2; •Building footprint: 750 m2; •Number of overground floors: 9; •Building underground: 2200 m2(-2); •Density 3.1; •Property has 16 on-surface parking places and 64 underground. There is a park & ride carpark in front of the plot.

•Gross building area: 6 990 m2;

partment with planned leases prior to commissioning; •Planned for completion in 2015; •Potentially high liquidity of the project. High demand for cash flow generating offices; •Attractive yield.

•Land plot: 5 271 m2; •Parking places - 105; •Expected NOI / year: EUR 857 000; •Expected yield - 7,5%.


CF / Warehouse / Tallinn

CF / Office & Warehouse / Tallinn

Small-scale cash flow generating property

Stable cash flow with development opportunity

•Sustainable tenant; •Attractive yield; •Convenient location. •Gross area: 1 954 m2,h • Leased area: 1 954 m2 •Term: 15.04.2013 – 15.04.2023 •Increase of Rent: CPI •Conditions: Triple net (all costs passed on to Tenant) •Guarantee: 6 months rent •Rental payment starts in October 2013 •Lessee: AIM Group AS •NOI 2014: 112 827€ / NOI 2015: 115 346€ •Rent: 4,8(€/m2) •Indexation: 1,5-3% •Yield 9,0% •TProperty urrently being constructed and will be ready in October 2013.

• Good location in the city center area. The area is a developing business district, which holds many former industrial and new commercial buildings; •The property has good access roads to main city regions; •UMPA has a customer that has agreed to lease sales area in case of retail development on the available land plot. •The plot area of the property is 9 751m2; •Existing buildings include a 3-story office building and 1-story office and storage building; •Existing office building: 1 floor – 792,1m2; 2 floor – 848,5m2; 3 floor – 860 m2; •Existing storage building: Closed net: 1619,3m2; Footprint: 1498m2; Rented area: 1468,9m2.


CF / Office / Tallinn

Small-scale cash flow generating property •Building is very popular among tenants, have been fully let app. last 10 years; •Good quality tenants with leases below market and realistic indexations schedules; •Location near the city centre; •Possibility to build up to 9 floors in case of development scenario. •Building area: 529,1 m2; •Floors: 3 floors + attic floor; •Yield at the transaction: 8%; •Yield in 2 years: 10 %

CF / Retail/ Riga Retail property sale and leaseback opportunity •Location in retail area of arterial Ulmana gatve connecting city centre with airport and resort town - Jurmala; •One of largest Latvian retailers as single tenant; • Tenant will implement its successeful retail concept at its own expenses; •10 year lease agreement. • GBA / GLA: 3 484 m2; •Retail area: 3 230 m2; •Offices: 254 m2; •Leased space: 100% of the building; • Lease term: 10 years; • Rental rate: EUR 5,6 / m2; •Yield: 8%.


UMPA has been brought to life to create value for the clients. Investment management and real estate services need thorough knowledge and experience on the market. Our groups more than 100 property professionals have regular training and KPI measuring system to meet changing client needs and market conditions of most dynamically growing countries in EU – the Baltic States. With a history of 20 years Uus Maa group is one of the oldest firms on Baltic markets to provide complex property services. Our Pan Baltic reach and ambition to excellence shall guarantee the value for Your time and money.

Services UMPA provides full range of property services including: * Early stage investment search * Site analysis and Concept development * Highest and Best use analysis * Development consultancy * Due Diligence procedures * Development consultancy * Project Management * Income projections and financial advisory * Income projections and financial advisory * Construction Project Management * Tenant search and brokerage * Seller/Buyer representation and agency * Transaction Management * Appraisals and Evaluations * Asset & Property Management


Contacts Sergey Chikovani Phone +86 159 R1315 8738

LATVIA

Lacplesa 41, LV 1011, Riga, Latvia T +371 6272600 F +372 6272601

ESTONIA

Ravala 6, 10143, Tallinn, Estonia T +372 6272600 F +372 6272601

Ardi Roosimaa

Maksims Odincovs

Chairman

Managing Director UMPA Latvia

ardi.roosimaa@umpa.eu gsm +371 277 804 67 tel +371 661 009 07 fax +371 670 761 99

maksims.odincovs@umpa.eu gsm +371 277 804 67 tel +371 661 009 07 fax +371 670 761 99

Zala str. 1, UMPA Riga, LV-1010, Latvia

UMPA Portfolio Presentation  

Real estate investment opportunities in Latvva & Estonia