Geneba offloads €87m Baltic portfolio to Northern Horizon, Partners

Amsterdam-based property company Geneba has sold its Baltic property portfolio last valued at €87 mln to a joint venture between Northern Horizon and Partners Group for a price in line with the assets' balance sheet value.

The package includes 42 assets located in Lithuania, Latvia and Estoniato Laurus, offering 84,000 m2 of lettable space with an occupancy rate around 73%. The major tenant is the Swedish bank SEB, which has a lease agreement on most of the assets with an average term of nine years.

The disposal of the portfolio, which has a loan-to-value ratio of more than 100%, will have a positive effect on Geneba’s overall debt and performance ratios, the company said in a statement.

Geneba Properties was formed from the insolvent European firm Homburg Invest. The company is largely owned by Canada's second-largest private equity firm Catalyst Capital Group through its Catalyst RE Coöperatief arm.

'Through this transaction we have achieved yet another milestone in realigning our investment portfolio to our chosen strategy, which is “to give corporate businesses in core Europe a home”,' said Wulf Meinel, CEO Geneba Properties. 'By investing in logistics and light industrial assets, which are crucial to the operations of industrial businesses, we are focused on our core markets in Germany and the Netherlands. The Baltic portfolio did not match our strategy.'

SEB sold this portfolio in a sale and lease back transaction in 2007. The assets were transferred to Geneba in March 2014 following a credit restructuring and insolvency procedures over the assets of the former owner. SEB continues to be the major tenant of the portfolio and continues to provide the debt and hedging to the structure.

'We look forward to start engaging the best asset management competences available to us to finally turn this complex portfolio around and start unlocking its value for our investors over the medium term,' commented Antanas Anskaitis, manager of Laurus at Northern Horizon.

The deal comes hard on the heels of Partners' first foray into the Baltics with the €163 mln BPT Optima acquisition, also in joint venture with Northern Horizon Capital.

Zug-based Partners Group in February last year created a new investment vehicle to acquire the package which comprises seven office and retail properties in the Baltic cities of Tallinn, Riga, Vilnius, Kaunas and Klaipeda, totalling 112,000 m2 of lettable space. The portfolio also includes the Young City urban regeneration site in the Polish city of Gdansk, including the former shipyards on the city's waterfront.