We advised LHV pension funds on acquiring a production building from Ensko Ensek AS

20.09.2021 We advised LHV pension funds on acquiring a production building from Ensko Ensek AS

The purpose of the transaction was to grow the rental property portfolio of LHV pension funds, managed by LHV Asset Management, incl. to increase the percentage of storage and industrial area in the current property portfolio. 

The acquired building has rental space of approximately 10,000 m2. The entire building has been rent out under a long-term contract to Plastone OÜ, an enterprise with a Scandinavian background that manufactures plastic accessories for businesses operating in the field of medicine, electricity, and electronics.

This was LHV’s sixth direct investment in property. “Rental property as an asset class is of great interest to us. This type of direct investment provides a good opportunity to diversify the portfolio and earn above-average returns,” said Fund Manager Kristo Oidermaa when introducing LHV’s investment principles.

According to the Head of Real Estate Investments of LHV pension funds Rait Riim, the biggest advantage of this object is its great location immediately next to Tallink Tennis Centre. “Storage and production real estate in Lasnamäe are always in demand thanks to the proximity of the labour force. This specific location is also easily accessible for both cargo traffic and employees,” Riim added.

In addition to the production building in Lasnamäe, LHV pension funds own the Valge Maja office building in Tallinn city centre, Microsoft office building in TalTech science park, three stock office commercial buildings in Jüri Small Town, and 127 rental apartments called Lumi Kodud in the Northern Tallinn city district. Additional 164 rental apartments will be completed for pension funds by the end of this year at Mustamäe Road in Tallinn.

According to the Head of Real Estate Investments of LHV pension funds Rait Riim, LHV intends to further grow its rental property portfolio. In addition to Tallinn, they actively seek investment opportunities also on the real estate markets of Tartu, Riga, and Vilnius. In addition to purchasing completed and rent-out buildings, they are also interested in plots of land in good locations to construct buildings for rental purposes.

TGS Baltic’s team assisted the client during the entire process, from conducting legal due diligence and merger control to preparing transaction documents. The team was led by Sander Kärson and included counsel Triinu Järviste and senior associates Kärt Raud and Merli Mäesalu.

References to media coverage in Estonian:

LHV pensionifondid ostsid tootmishoone Lasnamäel

LHV pensionifondid ostavad Ensto Taevakivi tehase