In another sale and lease-back transaction BPT Baltic Opportunity Fund, the most recently launched real estate fund from BPT, has acquired its third asset, the Coca-Cola Plaza in the central business district of Tallinn, Estonia.
The Coca-Cola Plaza is the largest combined cinema and retail complex in Estonia. Constructed in 2001 the complex has approx. 9,930 m² of usable space. Its anchor tenant, Finnkino, is the market leading cinema operator in Finland and the Baltic States. The property is located in the central part of Tallinn on Hobujaama Street. It is located within the CBD in the area between the medieval Old Town, the City Harbour and Viru Square.
With this acquisition, BPT successfully closes its third acquisition for its latest Baltic real estate fund, BPT Baltic Opportunity, bringing the total acquisitions so far to €32 million: “Adding the Coca-Cola Plaza we now have a strong seed portfolio in place for the Fund. The acquisition also demonstrates that for an experienced local buyer it is possible to acquire core assets close to development costs at square meter prices between €1,000-1,300 and starting yields around 8-8.5%. This has been our focus all along and it’s great to be able to show it to the market,” says fund manager Tarmo Karotam.
The area surrounding the Coca-Cola Plaza is the core part of Tallinn, hosting many modern office buildings, hotels and retail areas. Much of it has been developed in recent years and the area is now a mix of old industrial buildings that have been converted to high-end residential, retail or office premises. The neighboring building, a former Tallinn Central Post Office, is scheduled to be completely reconstructed within 6 months into a 10,600 m² shopping center galleria presenting a great deal of synergy potential with the Coca-Cola Plaza.
Cash-flow generating investments such as the Coca-Cola Plaza and the other seed investments in BPT Baltic Opportunity–a tax and cost efficient Estonian REIF structure–are estimated to generate a flow of 7-8% dividends p.a. This is also the target for the Fund as a whole.
BPT Baltic Opportunity will continue to invest in central cash-flow generating properties with prime characteristics and strong business concepts across the Baltic capitals. The focus is on retail and office properties which hold long-term tenants and opportunities for active asset management.
Asset management of the building will be performed by BPT Real Estate Services, one of the biggest independent asset and property management companies in the Baltic States. BPT Real Estate Services is part of the BPT Group and is providing services to the BPT funds and third party clients in the Baltic’s, Poland and Russia.
The transaction was advised by Catella Corporate Finance. The legal advisors of the transaction where Borenius law office from the seller side and Glikman Alvin & Partners law office from the buyer’s side.