Swedbank's arm acquires nearly half of Estonian real estate developer
07.03.2011, 14:41FR&R Invest AB, subsidiary of Swedbank AB, has agreed to acquire half of the shares minus one of Estonian real estate developer Arealis as financial investment for 3-5 years.
“It’s no secret that the economic downturn managed to freeze most of Estonia’s real estate developments, not that we no longer needed them, but the developers just run out of liquidity,” explained Toomas Luman, chairman of the supervisory council of Nordic Contractors that unilt now was 100% owner of Arealis.
Following the transaction, the equity capital of Arealis is 49 million euros.
Among other objects, Arealis owns and manages the headquarters of Estonian Railway, the main building of Nordea Bank in Tallinn, the headquarters of Skype, and the ECE Office Building, where Arealis currently has its main office. The rental area of Arealis’ cash-flow projects is 36,100 square meters, which makes the company one of the largest in Estonia.
“FR&R Invest has special competence to manage ownership of restructured assets for Swedbank Group. We believe that combining our experience together with Arealis will put the company in a stronger position as the market recovers,” added CEO of FR&R Invest AB, Jan Åberg.
“We see this as an opportunity to stabilise the company. After restructuring the loans, FR&R Invest AB further reduces the leverage of AS Arealis by taking an equity position in the company. This agreement enables the company to continue the growth and development path,” says Priit Perens, CEO of Swedbank Estonia.