Lumi Retail Property Fund is a real estate fund which is specialising in investing in neighbourhood shopping centres and grocery stores in the Baltic countries of Estonia, Latvia and Lithuania. The total volume of the fund's investments will amount to EUR 100 million with a time period of 20 years.
According to Kristjan Tamla, the chairman of the board of Swedbank pension funds in Estonia, pension funds in Scandinavian countries have been investing in such projects in Nordic countries for years already.
"A bigger share of peoples’ everyday purchases is moving towards neighbourhood shopping centres both in Estonia and elsewhere. A business model of stores with one anchor tenant and a couple of smaller satellite tenants located close to residential areas is also less sensitive to economic cycles than big shopping and entertainment centres," Tamla described.
Lauri Henno, the manager of the new fund, worked as a real estate director in Maxima Estonia, the biggest grocery retailer in the Baltic States. This experience enables the fund team to better understand the retail market and to select the most suitable investment objects, as well as to be a good long-term partner for retailers.
"We can see that this is a niche which has not yet been covered in many aspects," Lauri Henno said, a partner of Lumi Capital. "Since the segment of owners of neighbourhood shopping centres is very fragmented in the Baltics, we see a clear opportunity to become a market leader."
"Consumer behaviour of the last years has shown that the attendance of neighbourhood shopping centres is increasing and this trend is stable. Customers more and more like to purchase as comfortably and quickly as possible, and this is an advantage of small shops with respect to big centres," Henno described.
The first investment of the fund is Aardla Selver located in Estonian second biggest town Tartu.
Lumi Capital is a real estate investment management firm operating in the three Baltic States by developing and investing in all real estate sectors with investors that include both local and international real estate investors. The company has previously also cooperated with pension funds: in the summer of 2017 Lumi Capital together with LHV pension funds started investing in purpose built rental apartment buildings in Tallinn.