Despite the fact that the office building was sold only in the course of the third round of sale, a strong interest was shown during the entire sale. A number of site visits were arranged for prospective buyers such as Scandinavian investment funds, investors from the Baltic States and CIS representatives.
„Colliers International” Latvia branch managing director Deniss Kairans: “We are pleased to acknowledge that owing to our past experience and successful cooperation with a commercial law firm TARK GRUNTE SUTKIENE and other parties involved, both auctions and the free sale were executed smoothly. As a result, the office building at J. Dalina 15 got a new owner in the name of LNK Group. The sale of this property is a notable case in the Latvian real estate market, as it is a great opportunity to assess the market's readiness for development of new office projects, without getting involved in a long and risky construction process.”
The transaction was financed by ABLV bank. One of the bank’s policy priorities is financing of qualitative commercial real estate assets and support of developers which ensured fast solution to all financing issues related to the transaction.
Antons Marčenko, ABLV Bank Head of Project Financing: “Bank’s capital and credit policy allows offering up to 50 million euro financing to a single borrower. When reviewing the applications, ABLV bank pays a lot of attention to the experience of the investor, quality of the building and market situation. In the case of Dalina street office building, we were ready to finance this property and prepared preliminary financing offers to all main professional investors before the buyer was even confirmed. The fact that LNK Group will use part of the building for their own needs and has a notable experience as a developer and as a responsible borrower enabled us to offer even better individual financing conditions.”
Upcoming realization plans of “LNK Centre” give new perspectives in the RE market.
According to Colliers market analysis data there is a lack of vacant A and B class office premises in Riga. In spring 2014 there was only 5.3% A class and 4.9% B class available premises on the market. Due to current rent rate level construction of new office objects is not viable.
“LNK Centre” is already in a good condition and has a favourable location in Riga downtown area, which is developing fast and will definitely become a business district. LNK Group expressed their intention to invest in the office building development and its premises amelioration so as to correspond to A class office standards.
LNK Group business organizations such as LNK Industries, LNK Properties and LNK Aerospace will proceed with using the building for their own business processes and as well as develop it into a modern office space in the nearest future. Meanwhile 5 000 m2 of the “LNK Centre” area will be offered for lease to other interested parties hence reducing pressure caused by a lack of vacant office space on Riga market.
"Colliers experience shows that currently large-scale enterprises which plan to grow or ameliorate their working conditions find it difficult to find appropriate office space in the city centre. The biggest challenge have faced the enterprises which looked for office space greater-than 1 000 m2. Providing that the area of each floor “LNK Centre” is almost 1000 m2, large companies will be able to conveniently locate in the building and thus will have a real opportunity to relocate. If the building leasing progresses successfully, then it could become a positive sign for both developers and banks, and hopefully triggers further office market development in Riga", explains Deniss Kairans.
ABOUT COLLIERS INTERNATIONAL
Colliers International is a global leader in commercial real estate services, with over 15,800 professionals operating out of more than 485 offices in 63 countries. Colliers International has been operating in the Baltics since 2004 and provides a full range of services to its customers, starting from the development of an overall real estate concept, investment consultations and corporate services to project supervision, assessment, management and broker services. The influential finance magazine Euromoney declared Colliers International the best real estate consultancy company in Latvia in 2013 for the ninth year in a row.
The latest annual survey by the Lipsey Company ranked Colliers International as the second-most recognized commercial real estate firm in the world.
For the latest Baltic States and international news from Colliers International, visit http://www.colliers.com/lv-lv/latvia/insights or follow us on Linkedin
About LNK Group
The LNK Group holding company is comprised of companies that strategically operate in three principal directions: construction and production, aircraft engineering services and real estate development.
All business areas within the holding company are consolidated into a highly functional interactive system to provide customers with complex construction, production, and engineering services.
Since its establishment in 1988, the holding company has maintained the best industry traditions: a creative approach to design, high accuracy in production of structures and devices, as well as responsibility for the result. LNK Group pays particular attention to innovative solutions as well as the ability to introduce the most advanced technologies and production practices, thus ensuring operational precision and quality corresponding to the best European standards.
Kristine Spundina, Marketing Coordinator, +371 29444169 or firstname.lastname@example.org
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