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TOP 10 real estate deals in 2020

At the beginning of 2020, no one could have predicted the scale of the Covid-19 pandemic and how it would affect the economy and investment. A year ago, Colliers forecasted that investment activity in the field of Latvian real estate would reach EUR 300 million for the third year in a row. After the first half of the year, and the first wave of Covid-19, respectively, the investment amounted to only EUR 86 million, but a mid-year investor survey showed that 75% of investors were ready to buy properties in the second half of the year. The amount of investments in 2020 exceeded EUR 320 million. Investors in the Baltic States took care of the investment activity, providing more than 80% of the total amount of investments in real estate (for comparison, the proportion of Baltic investors did not reach 30% in the preceding year).

Unexpectedly, this year, transactions with retail facilities took the leading position in terms of the volume of investments, with total investments reaching almost EUR 150 million. The largest transactions in this segment were the sales of shopping centres Riga Plaza and Olimpia. Forecasting 2021, we see that the investor interest will remain more than consumer goods retailers, with a grocery store as the main anchor tenant, and we expect more transactions in this segment in the future.

Investors remain interested in purchasing office buildings, but the tenants of the buildings and the impact of Covid-19 on their business are being assessed more than before. In general, Riga has a limited supply of good quality office buildings, which often influences investors' choice in favour of Tallinn or Vilnius. After several years, if the projects currently announced are implemented, investors may have access to appropriate investment property The most significant transaction of this year was the sale of the Citadele banka office building, the purchase value of which exceeded EUR 50 million. Grinvest also acquired the SEB banka building in Valdlauči. This year, Corum Asset Management purchased its second office building in Riga, supplementing the Toma 4 office building with Kungu 1 office building.

Covid-19 has significantly increased investor interest in the logistics sector, as it has proven to be the least affected real estate sector. This year, Eften actively supplemented its portfolio with logistics centres, the funds managed by which acquired 3 logistics centres (Dominante, Suburban, LC Bergi), which were also the most significant transactions in this segment. We expect more future activity in this segment.

A new and uncharacteristic participant in the investment market is the grocery store chain LIDL, which has, so far, purchased plots of land for the construction of its own stores. However, in 2020, we saw a couple of transactions where existing retail buildings were purchased with other grocery stores as tenants. In total, in 2020, LIDL purchased properties for more than EUR 30 million, twice exceeding the total amount of transactions registered in 2019.

Returning to the TOP 10 transactions, it should be noted that, in total, they account for almost 80% of the total amount of investments in 2020. New investors in the market include Riga Plaza buyers (Summus Capital and Ivar Vendelin), as well as Grinvest, which bought the Olimpia shopping centre and SEB office building, in Valdlauči, from the Laurus Fund.

 

TOP 10 real estate investment deals in 2020

no.

object

city

type

total area, sqm

investor

1

Raadiku municipal rental apartments

Tallinn

Residential

107,880

Intermediate Capital Group (ICG)

2

SC Riga Plaza

Riga

Retail

66,700

Zenith Family Office

3

Citadele HQ

Riga

Office

32,550

Lords LB

4

SEB HQ

Vilnius

Office

19,030

REInvest Asset Management

5

Park Town BC, stage II

Vilnius

Office

22,500

PT Rytai

6

SEB HQ

Tallinn

Office

18,925

East Capital

7

IBC BC

Vilnius

Office

24,810

Lords LB

8

SBA logistics centre and production facility

Klaipeda

Industrial

44,000

EfTEN Capital

9

Portfolio – SEB HQ & SC Olimpia

Riga

Office & Retail

29,415

Grinvest

10

LC Berģi

Riga

Industrial

45,020

EfTEN Capital

  


Related Experts

Angela Kolesnikova

Partner | Director | Investment

Riga

My area of expertise includes, but is not limited to:

• Real estate investment advisory;
• PanBaltic Asset disposal process coordination and property marketing organization;
• Analysis of cash flow and development projects for investment purposes;
• Financial and competition analysis; 
• Risk and overall performance evaluation; 
• Strategy development and negotiations;
• Real estate auction organization.

View expert