EfTEN United Property Fund acquires the office building in Vilnius as the first direct investment in commercial real estate
EfTEN United Property Fund acquired an office building in Vilnius, Menulio Street 7. This is the fund’s first direct investment in commercial real estate.
“Recently new investors have entered the Baltic real estate market. This has led to the appreciation of property prices and increased competition between buyers. In light of this, we are satisfied to note that EfTEN can continuously sign transactions with an attractive expected return. The transaction with Menulio 7 office building was closed at a stage before the objects was offered for sale to the wider market, ” said Kristjan Tamla, Head of Retail at EfTEN Capital.
The building is a 9-storey office building completed in 2006-2008. It has 3,710 sqm of leasable area and a parking area. The largest tenants are GlobalNetint, a payment and financial solutions company, and Saint-Gobain, an international manufacturer of building materials. The estimated annual rental income of the investment is 460k euros. The transaction is financed with 50% bank loan leverage. The expected return on equity for the investment is approximately 14%, which does not include any potential change of property yield.