Establishment of subsidiary and acquisition of two industrial buildings in Panevezys, Lithuania
EfTEN Real Estate Fund III AS established a subsidiary EfTEN Ramygalos UAB, which acquired two industrial buildings in Panevezys, Lithuania. The buildings will be used by the electrical systems manufacturer AQ Wiring and UAB ADAX on the basis of lease agreements.
EfTEN Ramygalos UAB, a subsidiary of the Fund, entered into a purchase and sale agreement with UAB Adax and UAB BSP Industrial Property for the acquisition of three registered immovables in Panevežys, Lithuania, at Matininkų 9B, Ramygalos 190E and Ramygalos 194E, where two industrial buildings are located. The transaction price without VAT was 10 million euros, of which 4 million euros was equity and 6 million euros a loan taken from Šiaulių bank. The unleveraged initial yield of the investment properties is 8.0% annually. The transaction was completed on 15.06.2021. The financial volume of the transaction is 6.9% of the Fund's current investment properties.
The buildings are located right next to Via Baltica, within the limits of Panevėžys, which means very convenient access both for the employees and for the transportation of goods. Gross leasable area of buildings constructed in 2007–2008 amounts to over 20,000 square meters and they are very suitable for most light production or assembly type of business activities. According to the general plan of Panevėžys, the territory around the property is planned as industrial and warehousing zone.
After the transaction, there are two tenants operating in the buildings: AQ Wiring, an electrical systems manufacturer, and ADAX UAB. ADAX UAB manufactures household and commercial electric heating products. ADAX UAB started moving all of its production to Panevėžys in 2002 and has developed and owned a building since then. As of the summer 2022, ADAX UAB will be the sole tenant of the properties and the lease term will be 16 years from the moment of acquisition.
The founder and 100% shareholder of EfTEN Ramygalos UAB is EfTEN Real Estate Fund III AS. The share capital of the subsidiary is 3,500 euros. The purpose of establishing the subsidiary was to acquire the above-mentioned properties and to management of the properties after the acquisition. Founding the subsidiary cannot be interpreted as acquisition of a major holding for the purposes of the Nasdaq Tallinn Stock Exchange rules. The members of the Management Board and Supervisory Board of EfTEN Real Estate Fund III AS have no other personal interest in the transaction. The director of the company is Laurynas Žilys, who is also the CEO of EfTEN Capital Lietuva UAB.
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