East Capital, the largest owner of logistics property in the Baltics, enters real estate development and acquires a 30-hectare plot near Tallinn
With a portfolio of over 200 thousand square meters of logistics space, East Capital Real Estate is the largest owner of logistics real estate in the Baltics.
About a year ago, East Capital Baltic Property Fund III acquired a 23 thousand square meter Lidostas Parks logistics park in the immediate vicinity of Riga Airport. Now the fund is launching real estate development project as East Capital acquired a 30-hectare plot of land near Tallinn at the intersection of several main traffic arteries to build a new logistics and industry park.
The management company East Capital Real Estate, so far mostly focused on investments in complete objects, is entering real estate development and acquired a 30-hectare plot in Rae municipality near Tallinn. The planned logistics park located in the area of the intersection of Tallinn beltway and Tartu Highway, also the IKEA center will be built in its vicinity in the coming years. Including the new logistics park, East Capital's logistics real estate portfolio would grow to 350 thousand square meters.
"We are purposefully focusing on the logistics sector, because recent years and the pandemic have changed and are changing the business models of many companies. Thus we see a growing demand for logistics space and solutions to address the needs of growing e-commerce and last-mile logistics management,” explains Martin Otsa, East Capital's Investment Manager.
According to Otsa, both developers and investors are increasingly active in logistics real estate, because compared to other real estate segments, logistics and light industry real estate offers higher profitability and fosters faster growth of asset value. Recent reports also demonstrate, that investors prefer real estate related to healthcare and logistics as their asset classes. "This trend will definitely describe the future movements of many market participants in our region as well," said Otsa.
Otsa admits that for a management company, so far focused on complete real estate, entering real estate development is a new chapter. "Traditionally we have invested in objects that already have tenants. As there are fewer and fewer sufficiently attractive and modern objects in this segment, we decided to launch a development project ourselves," said Otsa, who added that East Capital's long-term and extensive experience in commercial real estate provides solid foundation for development.
The land plot in Rae municipality was acquired through a public auction organized by the municipality and the transaction was financed by East Capital Group.
East Capital Real Estate is one of the leading real estate manager that focuses on commercial real estate investments the Baltics and Central Europe, primarily in the office, logistics and retail segments. We manage four funds and one investment mandate, with a total property value of EUR 460 million, distributed across 25 properties with a lettable area of 400,000 square metres. East Capital Real Estate is part of East Capital Group − an independent asset management group that comprises several strategies and specialisations to offer active management solutions in equities, bonds and real estate assets with a clear ESG framework. Founded in Sweden in 1997, East Capital Group manages a total of EUR 3.8 billion for a broad range of international investors including leading institutions, companies and private investors.