03.09.2021 - Real estate

BTA and YIT agree upon the rental housing deal

Proceeding with implementation of its investment strategy in the real estate field in the Baltics, BTA Baltic Insurance Company AAS (hereinafter – BTA) has concluded a significant deal with the construction company YIT on development of 5 rental apartment housing projects in the Baltic States, which is the largest transaction in this sector so far.

The investment deal between BTA and YIT is on construction of two rental apartment buildings in Riga, two in Vilnius and one in Tallinn, with a total of 479 apartments in these buildings. Completion of all these rental apartment housing projects is scheduled for 2022/2023, then starting to offer them to the potential tenants. All buildings are expected to achieve very good rating by the rating scale of the internationally recognized sustainability assessment certificate BREEAM. Adherence to BREEAM standards provides a marketing edge to these construction projects in the private real estate rental market, contributes to the availability of sustainable housing options to population, as well as increases the return on investment in such buildings by reducing their running costs.

“With this investment deal, BTA wants to strengthen positions in the Baltic insurance market. Thus, we contribute to the development of the sector and demonstrate a stable long-term strategy, offering a competitive product to everyone in Latvia, and soon in Lithuania and Estonia. This investment, sensing a great future potential, is also supported by BTA shareholders – Vienna Insurance Group AG, who have extensive experience in investing in the development of various fields. We are proud to be the first to conclude such an investment deal in the Baltics with stable, recognized and reliable partners,” indicates Wolfgang Stockmeyer, Chairman of BTA Management Board.

The Baltic real estate market has swiftly recovered after a slight decline last year and booming now – an influencing factor that promotes the development of new, up-to-date housing that meets the current needs of population on a pan-Baltic level.

“YIT’s strategy is to sell part of its housing project portfolio to institutional investors as rental projects to speed up execution of area projects and to accelerate growth in a capital efficient way. I am very pleased that YIT is able to create a long-term partnership, which such a professional player like BTA. It is also great that our Baltic subsidiaries can produce rental apartments for Baltic consumers as an alternative for owned apartments,” says Tom Sandvik, Senior Vice President, Housing CEE YIT.

Investment management and housing services of the new rental apartment buildings have been entrusted to an experienced partner – Estonian real estate investment management company Lumi Capital.

The partners have agreed not to disclose the total amount of the investment.

Source: bta.lv

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