The Company intends to invest in and develop a portfolio of high quality property assets spread across the capital cities of the three Baltic States (although principally Tallinn in Estonia and Riga in Latvia) and St Petersburg, Russia. In contrast to certain other property investment funds investing in the region and across emerging Europe, the Company, through the Investment Manager has a strong local development capability rather than just a passive investment mandate focused on the region’s limited existing property stock.
The Company’s investment portfolio will primarily focus on prime office, residential and retail development and investment opportunities which the Investment Manager and Investment Adviser believe can generate a target minimum internal rate of return of 25%. At present the Investment Manager anticipates there being significant property investment opportunities in the region particularly for prime office and residential developments in the Riga and St Petersburg markets. The Company may also invest selectively in land acquisition and in joint ventures with other reputable developers. The Company expects to immediately dispose of any completed residential developments but may lease out and keep any developed commercial properties as parts of its investment portfolio and by maximizing the cash flow yield of such properties further enhance shareholder returns.