INVL Baltic Real Estate proposes more than doubling dividends

The real estate investment company INVL Baltic Real Estate proposes more than doubling the size of the dividends envisaged in its dividend policy – from EUR 0.012 to EUR 0.026 per share. This and other decisions will be submitted for approval to a meeting of the company’s shareholders to take place on 29 December.
“As we promised during the share offering at the start of 2016, over the last year and a half we’ve given a lot of attention to the development of real estate holdings. That’s also reflected in the results that the company has achieved, and the enlarged stream of leasing income permits an increase in the dividends paid to the company’s shareholders. We believe the decision to increase the dividends will make it possible to further boost the attractiveness of the company’s shares when considering alternatives for investing in real estate,” said Vytautas Bakšinskas, the Real Estate Fund Manager at INVL Asset Management, which manages INVL Baltic Real Estate.
He said it’s also planned for a business owned by INVL Baltic Real Estate to next year take over the management of real estate belonging to INVL Baltic Real Estate. “We think that by rearranging the current asset management structure and transferring the management of properties to the company group, we’ll be able to more flexibly and more operatively oversee property holdings and so create greater value,” Bakšinskas said.
That will reduce the scope of the services for which until now INVL Baltic Real Estate has paid a management fee to the management company INVL Asset Management. For that reason, it’s planned to correspondingly reduce the management fee that INVL Baltic Real Estate pays to the management company from 1.5 per cent to 1 per cent. If the meeting of shareholders approves the proposed decision, INVL Baltic Real Estate’s agreement with INVL Asset Management will be changed and its new version would take effect as of 1 January 2018.
Additionally, seeking greater liquidity and functionality of trading in INVL Baltic Real Estate shares, the possibility is being considered of raising the company’s nominal share value five times, to EUR 1.45. This and other proposed changes to the company’s Articles of Association are being submitted for approval to the meeting of shareholders. The proposal to increase the nominal share value will take effect after receiving the permission of the Bank of Lithuania’s Supervision Service and the approval the meeting of shareholders. Depository agreement amendments will also be submitted to the meeting of shareholders for approval.
INVL Baltic Real Estate’s consolidated net profit for the first three quarters of this year was EUR 2.1 million and was 2.3 times larger than in the same period last year. The company’s consolidated equity value per share increased 19.5 per cent from a year earlier to EUR 0.49 per share at the end of September 2017 (equity per share at the end of September 2016 was EUR 0.42, also accounting for dividends of EUR 0.012 per share that were paid).INVL Baltic Real Estate’s consolidated net operating income from the properties it owns was EUR 1.9 million in three quarters of this year and compared to the same period last year increased 5.1 per cent.
INVL Baltic Real Estate manages 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 September 30 of this year, the company’s property holdings had a total area of 55 000 square metres and a value of EUR 54.5 million.
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.