East Capital Real Estate acquires major logistics centre in Baltics

Property owner and developer East Capital Real Estate has acquired the Rimi Baltic Distribution Center in a landmark deal for the Baltic region.

The acquisition represents the largest real estate transaction for a logistics facility in the Baltics in 2023 and the largest property deal in Latvia this year.

Located in Riga, Latvia, the modern 94,000 m2 complex comprises both logistical and office space. East Capital Real Estate Fund IV acquired the property from Rimi Baltic, a leading Baltic retailer owned by ICA Gruppen, for a total of SEK 1 bn (€88.8 mln).

The Rimi Baltic Distribution Center is the company's regional headquarters and distribution hub. Situated on 17 hectares of land, it offers convenient public transportation, cars, and truck access. Ample parking and excellent connections to Riga's ring road further enhance its strategic location.

Rimi Baltic will remain the sole tenant under a long-term 15-year lease agreement with East Capital Real Estate.

Albin Rosengren, partner and head of real estate, East Capital Group, said: ‘The property has a top location from both logistics and workplace perspectives. The local area has undergone a transformation over the past few years and is set to continue to develop as a mixed-used area. A lot of new residential housing has been built with more in the pipeline and the establishment of a new Ikea department store and Saga shopping center has added to the area’s attractiveness. The location together with the long-term lease with Rimi Baltic makes this property a perfect fit for East Capital Real Estate fund IV.’

Rimi Baltic CEO, Giedrius Bandzevicius, added: ‘We are pleased about the transaction and look forward to a good long-term cooperation with East Capital Group. Importantly, the transaction also frees up capital to reduce the net debt for ICA Gruppen, the owner of Rimi Baltic. Rimi Baltic continues stable logistics operations in the Deglava distribution center and central office.’

The Rimi Baltic Distribution Centre underwent a comprehensive renovation and expansion in 2020, including upgrades that significantly improved energy efficiency and resulted in an upgraded energy classification. Additionally, a 2 MW solar park project is slated for completion on the rooftop in 2024.

Swedbank financed the transaction, with Vilgerts law firm, Ernst & Young, and Industry Service Partner as advisors to the buyer. Sorainen law firm advised the seller.

This acquisition strengthens East Capital Real Estate's presence in the Baltic logistics market and significantly enhances its portfolio.

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