Fund to sell Duetto offices for €37million

Duetto offices, Vilnius

Baltic Horizon Fund has agreed with East Capital Real Estate to sell 100% shares of BH Duetto UAB, which owns the Duetto I and II offices in Vilnius, Lithuania.

The two modern 10-storey office buildings, which are also known as Duetto A and Duetto B, have a total lettable area of 17 260 square meters.

The sales price of the Duetto offices is approximately €37 million, which is close to the latest valuation. The exact sales price will be calculated on the closing date, however, the price may be subject to post-closing adjustments.

The fund first acquired the properties in 2017 and 2019 from the international developer and over the period earned an Internal Rate of Return of approximately 13.7% and an equity multiple of 1.8.

The proceeds of the transaction will be used mainly to partially redeem the new bond and invest in the centrally located assets of the Fund. Closing of the transaction is expected to take place at the latest by 12 June 2023.

Convenient and accessible Duetto offices

Albin Rosengren, Partner and Head of Real Estate, East Capital Group, says, “We are very pleased to add the Duetto business complex to our growing Fund IV portfolio The new acquisition continues to follow our investment strategy – convenient and easily accessible locations in the capital city together with modern and environmentally friendly office spaces that have a strong tenant mix. We appreciate Vilnius city’s efforts to make this one of the most attractive business locations in the city with continuous investments in transportation and pedestrian/bicycle infrastructure. We look forward to adding to the success of this location through continued co-operation with the city, our tenant community, and neighbouring businesses.”

Baltic Horizon Fund manager Tarmo Karotam, says, “We continue to implement the investment strategy of Baltic Horizon Fund. Taking into account economic cycles, financial markets and the opportunities provided by the development of capital cities, we shall reduce the financial obligations of the Fund and redirect investment flows towards the upgrade of the unique properties in the Fund’s portfolio. The changes implemented in our central properties in recent years, including the Europa center in Vilnius and the Galerija Centrs in Riga, along with the approved future strategies, ensure the achievement of long-term goals for the assets and for the Fund.”

The business complex was completed by a leading Baltic developer; YIT Lithuania. Conveniently located next to Vilnius Western Bypass, which connects Vilnius suburbs to the city center, the complex provides easy access to both Kaunas and Riga highway exits.

Fully leased

Both Duetto A and Duetto B are fully leased and provide convenient, cost-effective, and environmentally sustainable office space that meet the demands of modern working. Among the tenants choosing the complex for their Lithuanian headquarters are well-known global and local brands such as RIMI Lithuania (part of ICA Gruppen), BASF, Intrum, Schneider Electric, as well as municipal heating and water companies.

Both buildings are BREEAM New Construction certified and will be financed with a green loan from Swedbank.

East Capital Real Estate was advised on this transaction by FORT Legal, KPMG and Projector.