3 March 2022
LHV pension funds made the first direct investment in real estate outside Estonia, acquiring five rental apartment buildings in Riga with the aim of earning long-term rental income. The volume of the investment is 9 million euros.
“Rental properties are an asset class that is of great interest to us, and this is already our seventh direct investment of this kind,” explained LHV Fund Manager Kristo Oidermaa. “Firstly, it’s a good way to diversify your portfolio and secondly, we earn above-average returns. Compared to Tallinn and Vilnius, the apartment prices in Riga are still by up to a third lower today, so we’re hoping to take advantage of this market situation even more. Our long-term plan is that up to 40% of our real estate investments could be located in Riga and Vilnius.” The investment in rental apartments in Riga will start to earn a return for the clients of LHV pension funds M, L and XL.
According to Rait Riim, Head of Real Estate Investments at LHV Pension Funds, the biggest advantage of rental apartment buildings in Riga is their quiet and green location right next to the Ziedondarzs Park. The buildings are less than 2 kilometres from the Old Town of Riga. “The buildings have been designed for rental, they are in a very good condition,” Riim added.
Three of the five buildings were completed in 2021. The other two buildings of architectural value have recently undergone major renovation. There are a total of 109 apartments in the five buildings, almost all of which are rented out. The properties also have additional building rights for the construction of another 6-storey apartment building. The rental properties of LHV pension funds in Riga are located at: Spargelu iela 10, Matisa iela 52 and Matisa iela 65a.
In addition to the Riga rental apartments, LHV pension funds own 293 rental apartments called Lumi Kodud in Manufaktuuri Street, Northern Tallinn and in Aiandi Street, Mustamäe, the Valge Maja office building in the centre of Tallinn, the Microsoft office building in the TalTech research campus, three stockoffice-type commercial buildings in Jüri and a production building in Taevakivi Street, Lasnamäe.
LHV pension funds are managed by LHV Varahaldus. LHV pension funds have over 165,000 clients. The volume of the funds managed by LHV is more than €1.3 billion.
Head of Real Estate Investments, LHV Pension Funds
Tel: 5621 5105