Diligent property management has been a key focus across the BPT portfolios, particularly in the past three years. In 2011 this focus led to more than 40.000 sqm.s being re-let. At the same time occupancy rates have climbed to above 90% in almost all markets compared to the same period last year. At the core of this success lies a pro-active strategy of strong client relations, tenant pipeline and a constant eye for rethinking and optimizing the current tenant mix.

"Reletting an office building where an anchor tenant has left is not just about finding another large replacement tenant," comments Indrek Hääl, Head of Group Asset Management, "it gives us the opportunity to rethink the entire floor planning of a building in order to find additional revenue streams".

The intensive local dialogue with current and potential tenants often leads to innovative solutions that optimizes building performance and keeps the tenants happy for years to come. The Property Managers in BPT all draw on several years of international experience in tenant relations and good internal knowledge sharing structures ensure that best practices are shared across borders between teams. 

Retail is a hands-on business
Especially the retail segment requires continuous property and tenant management because a shopping center must be actively managed and upgraded in order to keep customers coming back. Indrek Hääl explains:

 - "If you're not able to offer the customers a shopping environment they can relate to, they'll do their shopping elsewhere, especially in a market as competitive as the one we see now". He adds, "customers' expectations and preferences change and we have to be able to change with them in order to constantly offer the right mix between fast moving consumer goods, top quality brands, and attractive restaurants."

Increasing competition among tenants
- "While the lease negotiations in the crisis years of 2008-2010 were all about hanging on to tenants, we can now see that competition is picking up and tenants are competing for the most attractive locations in our shopping centres. We are once again seeing examples of competing retailers outbidding each other, which in some cases has resulted in a significant increase in the annual rental price per sqm", says Indrek Hääl.

For additional information on this release, please contact:

• Indrek Hääl, Head of Group Asset Management, click here to e-mail, +372 6 309 420
• Bettina Knudsen, Director of Investor Relations & Marketing, click here to e-mail,  +45 33 69 21 75

We have managed to fill up the floors with well-known quality tenants and the building is now 100% occupied. "The process took place according to our long-term strategy", states property manager Ülari Niinemägi, "and the full re-letting/conversion process has come to a successful finish after more than 2 years."

Interesting facts:

• A desired efficient room program was kept in mind and as a result 5 out of 6 floors now have a single tenant per floor.
• 250 m² of common used premises was converted into modern office space, thus effectively increasing the lettable area by 5%
• The key tenants are: Nordea Bank (their largest branch in Tallinn), KredEx (state credit export institution), Viking Line & Hurtigruten (cruise line operators)
• All lease agreements were signed according to BPT standards, i.e. triple net, reasonable guarantees, indexations and step-up rents.

Europa Shopping Centre, Vilnius

Triggered by major new openings in 2010, the tenant mix reform gathered momentum from the beginning of 2011. The year featured a number of replacement and reconstruction projects - totally, one third of the lettable area was converted into new or upgraded shops, which are able to offer the customers an extravagant environment, top quality goods and collections, as well as the highest standard service and personalized attention.

The ground floor had been accommodating an excessive versatility of retail operations, therefore during 2010/2011, the floor was restructured by re-enforcing relevant segments. The floor is now a good destination for fast-and-daily-consumption goods and services: restaurants, bakery, coffee-shops, grocery, cosmetics, sweets, gourmet, accessories, pharmacy, optician, etc.

A number of apparel stores were opened on the second floor:  Laurel, Guess by Marciano, More&More, Ralph Lauren, Baldessarini, Otto Kern. Together with the existing Gant, Marc O'Polo, Stefanel, Samsonite, Lancel, Gerry Weber and a number of other stores, the floor now is an attractive destination for fashion shoppers.

In 2011, a number of re-arrangements were completed also on the 3rd floor of Europa. The tenant mix was strengthened by a large sportswear concept, a new 350 sqm bookstore with an integrated library and café, as well as three new shops for kids and parents and a new restaurant to replace the former concept very much in need of an upgrade.

All the afore-said functional improvements in the tenant mix shall generate an extra rental income of approx. EUR 140'000 per year. Moreover, this significant upgrade of the tenant mix resulted in annual growth of footfall (+15% in 2011 vs. 2010) and a marked upward trend in aggregate centre turnover (+12 % in 2011 vs. 2010).

BIG Shopping Centre, Klaipeda

Shopping centre BIG achieved several significant lease agreements in 2011. The most important deal was made with an existing pharmacy operator. A new agreement was signed after severe competition between the two strongest pharmacy chains in Lithuania and the result increased Shopping Centre BIG's annual income from pharmacy operations more than three times.

A similar situation took place with the optician operator, and using the same methods the annual income almost trippled.

In total Shopping Centre BIG signed new or renewed agreements in 2011 for more than 4'000 sqm - 3'000 of them stemming from new operators. The biggest vacancy, which has not been occupied for more than 3 years (750 sqm on the second floor) was in December 2011 opened as a unique youth entertainment centre. With this initiative, Shopping Centre BIG reached a record occupancy level of 98%.

Molas Shopping Centre, Kaunas

One of the most significant relettings in 2011 in shopping centre Molas, took place after tough negotiation with a well-known international shoe retailer. A new key tenant store of 450 sqm was opened in November, and for the coming years will increase rent income by 7.5% from turnover, but not less than EUR 35'000 in first trading year, EUR  37'000 in the second operating year, and the remaining period not less than EUR 42'000 per year, according to the step rent conditions in the contract valid till 2018.

In 2011 over 35 contracts (4'000 sqm) were renegotiated and prolonged with existing well known tenants as Mosaic, C&D style, Forto dvaras, Eurokos, Viva batai, Zaislų planeta, Triumph and other, which let to a 98% occupancy of the shopping centre and an expected 5% increase in the net rental income for 2012.

In June 2011, long-term lease agreements with well-known quality tenants were signed - United Agencies' companies within communications, advertising and web design agencies, such as VRP|Hill&Knowlton, Box, The Chocolate, Experiential Communications, Small talk ideas and Inspired UM. After fit-out will be finished in the beginning of 2012, the United Agencies will occupy 2'100 sqm for 7.5 years.

Major fit-out works are done intensively, changing the interior completely and converting the old school business centre into a modern and attractive domicile building. Simultaneously 165 sqm of common use premises was converted into office space, thus effectively increasing the lettable area by 5%.With three United Agencies, the National Audit Office and Oracle the building is now 100% occupied. All lease agreements were signed according to the BPT standards, i.e. triple net, reasonable guarantees, indexations, etc.

Constructed in 2002, the Moniuszki Tower is a prominent office building in the center of the Polish capital. The 11,589 sq. m. building currently houses the Polish telecommunications operator Telekomunikacja Polska S.A (TP SA) and is one of several buildings occupied by the telecom group. The property is set to undergo a complete recommercialization during 2013 when TP SA is expected to relocate to their new campus.

Both parties have agreed not to disclose the transaction value. However, the sale is another important step in the medium-term strategy to refocus and deleverage BPT Optima.

- "Moniuszki Tower is an attractive building with a lot of asset management potential. However, at this stage our focus is on tightening the BPT Optima portfolio and limiting any exposure to the possible refurbishment risk which will come with the anticipated expiry of the lease term with single tenant TP SA. To that end, we are happy to see the property go to a manager committed to that project", says Antanas Anskaitis, fund manager for BPT Optima.

The Warsaw office market has seen a positive development over the past year with moderate growth in prime rents and decreasing vacancy as occupier demand remains strong. The trend has resulted in falling yields and increased investor activity.

- "This transaction goes to show that there is buyer interest in the market and exits can be performed not only for core assets. Warsaw is a rising office market in Europe in the middle of an economy that has been doing relatively well through the financial crisis, and this is attracting a lot of local as well as international attention", explains Antanas Anskaitis.

BPT Optima intends to continue its divestment strategy in 2012. The fund currently owns five other office buildings in the Polish capital with a total portfolio size of close to 100,000 sq. m. of prime office space.

For further information, please visit www.bptam.com or contact:

• Antanas Anskaitis, BPT Optima Fund Manager, click here to email
• Bettina Knudsen, Director, Investor Relations & Marketing, click here to email, +45 33 69 07 33

Photos of the property are available upon request. Please contact Bettina Knudsen. See contacts above.

Download the full press release in pdf here

Following the transaction, the pan-Baltic retail chain, Rimi Baltic Group, will not only be the anchor tenant and main occupier of this 5,900 sq. m. neighborhood shopping centre but also the sole owner.

Although the transaction price is not disclosed, the sale realizes a satisfactory capital gain to the investors in BPT Optima, both on the original acquisition price and the latest property valuation. The divestment is thus a successful step in the medium-term plan to divest parts of the BPT Optima portfolio.

"Valdemāra Rimi Hypermarket is a classic example of the kind of neighborhood shopping centre with a strong submarket location in which BPT has a long track record of investing. The sale goes to show not only the solidity of the original investment case but also the options to exit in the current market environment," says BPT Optima Fund Manager, Antanas Anskaitis.

The Valdemāra Rimi Hypermarket is conveniently located with no immediate competition and the strategic nature of the location was one of the main arguments for the tenant to secure this location under direct ownership. This investment transaction is among the largest in the Latvian capital this year and the interest for the property has been strong from both local Baltic and Scandinavian institutional investors.

The Valdemāra Rimi Hypermarket was originally acquired in 2003 by the first BPT real estate investment fund, BPT A/S. Upon exit of the fund in 2007, the asset was taken over by BPT Optima. Through active asset management, the revenue from the property has grown by more than 30% and the value more than doubled since the original acquisition, leaving both the investors in BPT A/S and BPT Optima with a satisfactory return on investment.

BPT Optima continues to own two retail properties in Riga; the Barona Centrs on Kr. Barona Street and Olimpia Shopping Centre on Ķīpsala Island.

For further information, please visit www.bptam.com or contact:

• Antanas Anskaitis, BPT Optima Fund Manager, Click her to email
• Bettina Knudsen, Head of Investor Relations & Marketing, Click here to email, +45 28 14 59 33

Photos of the property are available upon request. Please contact Bettina Knudsen. See contacts above.

Download the full press release in pdf here

The new partnership means BPT/Evli will become the third largest real estate asset manager in the region in terms of assets under management. The combined real estate assets under management in the new partnership total approximately EUR 1.5 billion and are located across Finland, the Baltics, Russia, Poland and Northern Germany. They cover primarily office, retail, logistics and health care assets.

The transaction
As part of the transaction, BPT will take over Evli's current real estate business, Evli Property Investment (EPI) including management of its three real estate funds. Evli will in return become a major shareholder in BPT Asset Management A/S.

The existing EPI team based in Helsinki, Finland will become part of BPT and EPI's current Managing Director Petteri Nurminen will enter into BPT's executive group. In addition, Evli Bank's CEO Maunu Lehtimäki and Forbia Oy's CEO Petri Olkinuora will be appointed as Evli's representatives on BPT's Board of Directors. BPT founder Lars Ohnemus will remain as Chairman of the Board and Mikael Hyttel Runegaard Thomsen will remain as CEO of BPT Asset Management A/S.

BPT will as part of the transaction look to separate its internal asset and property management functions in order to create an even stronger focus on value creation in both areas.

A strong platform
The expanded geographic scope of operations combined with the extended real estate asset and property management expertise means BPT will have a uniquely strong platform from which to service investors on an international level going forward.

- "The strategic alliance with Evli and the acquisition of the EPI funds makes BPT the only real estate asset manager that can offer clients a uniquely broad real estate investment platform in the Nordic and Baltic region, ranging from mature markets like Finland and Northern Germany to emerging markets like Russia and the Baltic States. The asset management team alone will consist of more than 30 senior real estate professionals from more than 10 different nationalities all focused on creating value for our investors," says Chairman of the Board and founder of BPT Lars Ohnemus.

- "This transaction strengthens Evli's position within real estate asset management in the Nordic countries. Through the transaction we can offer our clients new resources and the long time experience BPT has in investing in real estate. The position and expertise of the new combined team will help attracting more international investors into the funds," states Evli's CEO Maunu Lehtimäki.

For further information, please visit www.bptam.com or contact:

• Lars Ohnemus, BPT Chairman of the Board, Click her to email, +45 33 69 07 33
• Bettina Knudsen, Head of Investor Relations & Marketing, Click here to email, +45 28 14 59 33

About BPT
BPT is an international real estate asset manager specialising in Northern and Eastern Europe with approx. EUR 1.1 billion in assets under management. The portfolio consists of more than 1 million square meters of prime commercial real estate. A key part of the investment philosophy is to be present where the investments are made. BPT is headquartered in Copenhagen with local offices in Berlin, Warsaw, Vilnius, Riga, Tallinn and Moscow. The company has approximately 100 employees. BPT is a member of INREV and SIPA. Visit us at www.bptam.com.

About Evli Property Investments Ltd
Evli Property Investments Ltd has been a fully-owned subsidiary of Evli Bank Plc. The main function of Evli Property Investments Ltd is to manage, develop and innovate Evli's real estate fund business. EPI established the first Finnish real estate fund in April 2005. The company manages a total of three property funds totaling EUR 400 million in assets under management.

Click here to download as pdf

Photos:

Photo Maunu Lehtimäki (CEO Evli Bank Plc.) and Mikael Thomsen (CEO BPT Asset Management A/S)

Photo Evli and BPT team

from left to right: Maunu Lehtimäki CEO Evli Bank Plc., Johanna Lamminen CFO Evli Bank Plc., Henrik Andersin Chairman of the Board Evli Bank Plc., Lars Ohnemus Chairman of the Board BPT Asset Management A/S, Mikael Thomsen CEO BPT Asset Management A/S, Algis Vaitiekunas Partner BPT Asset Management A/S.

Photos by Martin Kaufmann

Lincona Office Complex
The Lincona Office Complex, is located on the arterial Pärnu road, just 4 km from Tallinn Old Town. The location is known as a strong office submarket location. The complex has a net lettable area of 11 336 sq. m. divided as 75% office space and 25% retail space (ground floor). The complex consists of 3 connected office buildings and 1 standalone retail unit with redevelopment potential. The complex also includes a 5-floor parking house for approx. 400 vehicles.

The anchor tenant is Swedbank. On the retail side the complex has established itself as the preferred location for high quality home decor stores.

Proven location and large upside potential
Head of Asset Management for the BPT Group, Mr. Indrek Hääl comments on the acquisition:

"This acquisition has significant importance for BPT and the new fund and is in line with our strategy to invest in high quality real estate assets, which bring stable income at very attractive starting yields. Lincona is a proven business location and the property has a significant rental upside potential as the Estonian economy continues to recover.

BPT has been a leading institutional real estate asset manager in the Baltic States for more than 10 years. The acquisition sets a benchmark for the future transactions of the new BPT Baltic Opportunity Fund. The fund is currently in the process of acquiring other projects in the Baltic States and is further preparing for the next round of fund raising which is taking place through the remainder of 2011.

"The real estate market has corrected significantly after the crisis hit in 2008 and BPT is excited to position the new fund at the start of the next Baltic real estate cycle", says Tarmo Karotam, Fund Manager of the new fund. "Our target is to deliver an annual rate of return above 15% by acquiring solid assets with a clear upside potential and realizing this potential by applying active, hands-on asset management. Lincona sets us on a promising path to achieving just that. "

About the BPT Baltic Opportunity Fund
The BPT Baltic Opportunity Fund (Estonian REIF) is a direct real estate fund investing in commercial properties in the Baltic States (Estonia, Latvia and Lithuania). The fund mainly targets institutional investors and should be seen as a medium-term dividend yielding investment with a corresponding risk. BPT Baltic Opportunity focuses on a core-plus to value-added strategy aiming to acquire and actively manage primarily core cash-flow generating office and retail assets centrally and strategically well-located in the Baltic countries. The fund has a return target of 15% IRR and a maximum fund size of 200 million after 50% leverage. 

A Baltic expert in real estate asset management
BPT is the leading real estate asset manager in the Baltics with a proven track record of four funds in the region and a total portfolio of 500,000 sq. m. under management. Established in 2001, BPT has been involved in some of the most noticeable transactions in the Baltics in the past decade. The spectrum of expertise covers everything from experienced real estate asset managers, analysts, and finance staff to property managers and centre planners, all with a blend of local and international know-how.

"The Baltic countries are our historic home territory. We have an on-ground staff of more than 50 professionals and uniquely strong local asset and property management teams in each country. They know these markets intimately. Our constant focus is to provide the best integrated services to all our clients and by that increasing the overall value of our investments," says Tarmo Karotam.

For further information, please visit see the Lincona webpage or contact:

• Tarmo Karotam, Fund Manager for BPT Baltic Opportunity
  Click here to Email, +372 630 9427
• Bettina Knudsen, Head of Investor Relations & Marketing, BPT Asset Management A/S
  Click here to Email, phone +45 33 69 21 75

After a couple of years of practically no transactions in the Baltic real estate markets, BPT is looking to change the scene with the launch of a new real estate fund for the Baltic countries, BPT Baltic Opportunity. The new fund has a maximum equity base of EUR 100 million equivalent to an investment capacity of EUR 200 million.

"The Baltic economies were amongst the quickest in Europe to politically embrace the economic challenges of the financial crisis, making the necessary changes and budget cuts. The reward now shows in their macroeconomic progress fuelled by rising exports and gradually decreasing unemployment numbers. The recent economic correction has naturally echoed in the real estate markets where prices have dropped as much as 40%. These days the market has stabilized at very attractive yield levels presenting some of the best investment opportunities in a decade," states fund manager Tarmo Karotam.

Focusing on core properties with international tenants and benefiting from a recovering market, attractive yield and rent levels, BPT Baltic Opportunity is targeting strong cash-flow investments in good locations with a projected IRR at fund level of above 15%.

Seed capital in place
BPT has already secured seed capital stake in the new fund with additional pool of capital expected to be raised at the next closing on the 16th of March 2011. Investments are expected to come primarily from the Nordic region as well as the Baltic countries themselves.

"Many Nordic investors understand the long-term potential in the Baltics and they recognize the timing is now. The interest towards the product has been increasingly positive both from private and institutional investors", explains Tarmo Karotam.
BPT Baltic Opportunity is structured as an unlisted closed-end Estonian Real Estate Investment Fund (REIF) under supervision of the Estonian FSA.

A Baltic expert in real estate asset management
BPT is a market leader in real estate asset management the Baltics with a history of four funds in the region. Established in 2001, BPT has a solid track record of some of the most noticeable transactions in the Baltics in the past decade. The spectrum of expertise covers everything from experienced real estate asset managers and finance staff to centre planners, all with a blend of local and international know-how.

"The Baltic countries are home territory to us. We have an on-ground staff of approx. 45 professionals and a very strong local asset and property management teams in each country who know these markets intimately," says Tarmo Karotam.

• Tarmo Karotam, Fund Manager for BPT Baltic Opportunity
  Click here to Email, +372 630 9427
• Bettina Knudsen, Head of Investor Relations & Marketing, BPT Asset Management A/S
  Click here to Email, phone +45 33 69 21 75

Download the full press release in pdf here

Although the agreement encompasses the entire line of BPT funds, the cooperation will focus firstly on raising funds for the German market through BPT Hansa Lux SICAV-SIF; a Luxembourg-based closed-ended vehicle focusing on commercial real estate in Northern Germany.

"Many Asian investors have equity to place and they are looking for core to value-added products with dedicated managers who can present a solid track record. BPT can provide this through funds such as BPT Hansa," explains Corporate Finance Director Kelly C. Hayes.

The fact that Asian investors have an appetite for European core markets - Germany in particular - has recently been highlighted in the press. Unlike the Japanese market, the German funds can offer yield levels around 6-7% in line the return targets of many Asian institutional investors looking for core exposure.

For BPT the agreement presents an opportunity to expand the capital sourcing network.

"Savills has an impressive brand and presence in the Asia Pacific region. Their relations are strong and for someone like us, they provide a very professional platform for reaching out to Asian investors," says Head of Investor Relations and Marketing Bettina Knudsen.

Bridging the gap and adding value

Sourcing capital from Asia is currently at the top of many European and US asset managers' wish lists. But despite the interest, European managers often experience difficulty in attracting Asian investors.

"Through our market research we have found that there is a significant demand from international investors to source equity from the Asian markets, Japan in particular. But many investors fail in their attempt because they don't understand the culture and processes of capital raising in the region. As a leading player in the Asian real estate markets, with strong ties to the institutional investors in the region, Savills can help asset managers to bridge the gap," says Kelly C. Hayes.

To secure stability, focus and steady income flows, international investors have also begun raising the bar on asset managers, i.e. they have a strong preference towards quality over quantity. This provides an opening to niche managers with very focused strategies.

"BPT is leading regional player within the real estate asset management industry in the Baltic Sea region, namely Germany, Nordics, Poland, the Baltic States and Russia. With a clear geographical focus and a strong on-ground presence we can offer the niche qualities and dedicated approach that many investors are looking for today", says Bettina Knudsen.

For further information on this release, please contact:

• Kelly C. Hayes, Director of Corporate Finance, Savills Japan Ltd.
  Click here to Email, phone +81 3 5562 1760
• Bettina Knudsen, Head of Investor Relations & Marketing, BPT Asset Management A/S
  Click here to Email, phone +45 33 69 21 75

Download the full press release in pdf here