Lumi Capital and Bonava have entered into an agreement to construct two buildings for rental apartments in the future New Mustamäe residential development area in the Mustamäe City District of Tallinn. The buildings will be completed in the second half of 2021.
The apartment buildings to be constructed in the New Mustamäe residential area will feature 168 one-, two-, and three-room apartments. The buildings will serve as a part of an integrated living environment, with 750 new homes to be created in the area within the next 5-7 years. The residents will also be able to enjoy a diverse park with an area of approximately 7,000 m2 with playgrounds, a community garden, lawns and a picnic area, an outdoor sports facility, and a pump track for skaters, rollerbladers and cyclists.
“Bonava’s strategy is to offer affordable and high-quality new homes for numerous people. While constructing buildings for rental apartments is a part of this strategy in Scandinavia and Germany, this transaction is our first of this kind in the Baltics and in Estonia. We are delighted to contribute to the increase in the market share of institutional investors on the Estonian rental apartments market and to offer high-quality apartments and professional administration for clients who do not wish to be bound to a home loan,” said Timo Riismaa, CEO of Bonava Eesti.
“It is our pleasure to create new apartment buildings in cooperation with Bonava, a leading residential development company in the Nordics, who has ample experience with similar transactions and cooperations in the Nordic countries. The Lumi Kodud apartment buildings at the New Mustamäe complement our portfolio perfectly as they are located in the centre of the residential areas of Western Tallinn in a calm and peaceful district. The buildings are just a short walk away from several shopping malls, schools, and kindergartens. The location provides swift access via public transport to the City Centre and the TalTech university campus,” commented Martin Rekor, Managing Partner of Lumi Capital.
This transaction marks the second investment in buildings for rental apartments within the framework of the cooperation between Lumi Capital and LHV Pension Funds. The first acquisition, Lumi Kodud apartment buildings in the Manufaktuuri Quarter with 127 apartments, is due to be completed next spring.
“Lumi Capital will continue seeking investments in apartment buildings all over Tallinn with the aim of creating new buildings for rental apartments as the respective demand is high. In cooperation with LHV Pension Funds, we are planning to increase the portfolio of apartment buildings to 500 apartments,” said Mr Rekor.
Lumi Capital is a real estate investment management company who has founded a business strategy to invest and develop purpose designed rental residential buildings, and is implementing the said strategy in cooperation with LHV Pension Funds.
The pension funds of AS LHV Varahaldus have approximately 170,000 clients. LHV offers both actively and passively managed 2nd and 3rd pillar pension funds. The total value of the pension funds of LHV is 1.2 billion euros.
Bonava is a leading residential development company in Northern Europe. The company operates in Sweden, Finland, Denmark, Norway, Germany, St Petersburg, Estonia, and Latvia. The turnover of the company in 2017 was 1.45 billion euros. During its 14 years of operation in Estonia, Bonava has developed and sold more than 1,900 new homes.
