Newsec in the Baltics advised on the sale of the Valdemara office building in Riga. The pro-perty owned by the Estonian real estate investment firm Capital Mill was acquired by the Swedish listed real estate company Eastnine for approximately EUR 25 million.
“We are happy with our successful exit from Valdemara BC investment made by Capital Mill in 2013. Since it’s acquisition, we focused on turning the property around and adding value through active management. We are proud that our job was appreciated by international and local investment community”, says Marko Kull, partner at Capital Mill.
The Valdemara business centre is Eastnine’s second acquisition in Riga, Latvia. The company continues focusing on prime office properties in the Baltic capitals with Valdemara BC being the sixth office asset in Eastnine’s portfolio.
Located in the heart of the old town of Latvia’s capital city, Valdemara is an eight-storey class A business centre with a total area of roughly 8 500 sq. m. Office space is leased to more than 10 international ten-ants, including well-known names such as Rimi, Workland, Colliers, Oracle, Sorainen, PwC and others. It’s one of very few old town office properties enjoying the availability of underground parking.
This business centre in the old town is one of the first modern office buildings in Riga and has always at-tracted best-in-class tenants. The building is situated near the National Museum of Art, the Congress Hall, Central Park, an Art Nouveau district, embassies and other key attractions. It is also barely a kilometre away from the central bus station and the Port of Riga.
According to Andrius Švolka, Head of Transactions in the Baltics at Newsec, which advised the seller, the sale of Valdemara will round out the top-3 of the largest property transactions completed in Latvia this year, which also includes the Galerija Centrs shopping centre and Luminor Bank’s head office building.
“Compared to Vilnius and Tallinn, Riga’s office supply took somewhat longer to materialize, thus the choice of modern offices in the city is relatively limited both for tenants and investors/buyers. In the context of the Baltic capitals, Riga office properties (especially modern ones) remain one of the segments investors most highly desire. This has been proven by interest received in the sale process of Valdemara BC. Overall, commercial assets in central Riga in our view remain undervalued if compared to other segments and simi-lar micro locations in European capital cities. The yield gap of 300-350 basis points is not justified in our view”, Švolka notes.