Baltic Horizon Fund plans to acquire Postimaja Shopping Centre located in the heart of Tallinn, Estonia
Northern Horizon Capital AS as the management company of Baltic Horizon Fund (the Fund) announces the signing of an agreement with Osaühing Letona Properties (the Seller) to acquire an immovable located in the heart of Tallinn, Estonia at Narva road 1, the Postimaja Shopping Centre (Postimaja) to Fund’s portfolio.
The key strategical considerations for the Fund making the transaction is the synergy opportunity arising from Postimaja immovable being located next to Coca-Cola Plaza immovable, already belonging to the Fund’s portfolio and the Tallinn’s Main Street project. To achieve that synergy, HG Arhitektuur OÜ with its work The „Rotermann Passage“ has been selected as the partner to work out the architectural solution. It includes a new exterior design as well as increasing the leasable area and aims to improve functionality between the two buildings and in respect to Rotermann Quarter.
The rounded total purchase price to be paid at Closing is EUR 34.4 million (+ VAT) whereas the management company has allocated EUR 30.8 million to be paid for the existing cash flow from Postimaja and EUR 3.6 million to be paid for the potential additional cash flow deriving from the possible extension.
The expected acquisition yield for the existing cash flow is approximately 6%, the expected acquisition yield for the total purchase price is approximately 5,4%. The total current leasable area of Postimaja is 9 141 m2. The anchor tenants are Rimi, H&M, New Yorker, Estonian Post and MyFitness.
Closing of the acquisition (the Closing) is dependent on receipt of merger clearance from the Estonian Competition Authority.
CA i Estland AB, a company belonging to the same group with the Seller, has agreed to subscribe for Fund units for the amount of EUR 2.35 million (the Subscription Amount) as part of the transaction. The management company has undertaken to arrange issuance of new Fund units, the number of which is equal to the Subscription Amount divided by the latest net asset value per Fund unit preceding to Closing by way of private placement. The issuance and listing of new units of the Fund is expected to take place shortly after Closing.