Bigger loan limit will allow INVL Baltic Real Estate to balance its capital structure
“INVL Baltic Real Estate’s gearing ratio is currently too small – at the end of 2017 the debt-to-asset ratio was only 39 per cent. That’s why, in order to increase shareholders’ return on equity, we’re increasing that leverage”, said Vytautas Bakšinskas, the Real Estate Fund Manager at INVL Asset Management, which manages INVL Baltic Real Estate.
He said access to some of the loan amount would depend on INVL Baltic Real Estate’s need for cash flow for investments. Under current legislation, the company can borrow up to 50 per cent of the value of the assets it directly holds.
“We react to clients’ needs and try to help them realize their business ambitions. In working together with INVL Baltic Real Estate we see that a bigger loan will give it more opportunities to grow as one of the country’s most professional real estate management companies. This will also provide the company with more flexibility in planning investments,” says Rimvydas Mockus, Head of Vilnius Region at Šiaulių Bankas.
INVL Baltic Real Estateowns real estate in Vilnius and Riga: office and commercial premises at the Vilnius Gates complex in the Lithuanian capital, the IBC Business Centre near Konstitucijos Avenue, office buildings in the Old Town on Vilniaus Street and in Šiaurės Miestelis, and the Dommo Business Park manufacturing, warehouse and office complex beside the Riga bypass. As at 31 December 2017, INVL Baltic Real Estate’s property holdings had a total area of 56 900 square metres and a total value of 56.3 million euros.
Since 22 December 2016, INVL Baltic Real Estate has operated as a closed-end investment company. Management of the company was assumed by INVL Asset Management, one of Lithuania’s leading asset management firms. The company will operate as a closed-end investment company until 2046, with extension possible for another 20 years.