Bonds – with a significant return
„We offer investors 2.5-year bonds with a fixed annual interest rate of 8%, payable every six months. The balanced returns, promising project and strong backing of the project developers will attract retail and professional investors. Given the increased demand, we reserve the right to increase the total amount of bonds issued,“ says Kasparas Juška, Head of Investments at SBA Urban.
According to him, the bonds are secured by a pledge of the primary project real estate and the issuer's shares, and the debt-to-investment ratio cannot exceed 75 percent. The company's shareholders' capital finances the remaining project investments.
The nominal value of a single bond and the minimum investment amount are EUR 1,000.
The first tranche of bonds will be distributed from May 12 to May 26. Luminor Bank organises the distribution, with Ellex law firm acting as legal advisor. Investors can purchase bonds by opening a securities account at any major bank operating in Lithuania or other institutions providing investment services.
„Bond issues for financing real estate development are often offered on the market, so there is a choice. When choosing, it is important to consider the security provided to bondholders, the overall level of the project, and the specifics of the project. In the case of Hermanas' business centre issue, we ensured that investors' interests were properly protected and that the return on investment was in line with market levels,“ said Gints Belēvičs, Head of the Markets Department at Luminor Bank.
The bonds are expected to be listed on the Nasdaq Baltic First North bond list no later than one month after the first tranche is distributed. Subsequent tranches will be distributed depending on the project's progress and financing needs.
Response to limited supply
The construction of Hermanas business centre is scheduled to be completed by the end of 2025. The total investment in the project will amount to EUR 35 million.
Andrius Mikalauskas, Head of SBA Urban's Urban LIVE investment division, which is developing Nemunaičiai district, says the market eagerly awaits the new Hermanas business centre.
„With a limited supply of Class A office space in Kaunas and growing interest in the city among businesses, the project opens up new opportunities to establish a presence in the fastest-growing district of the city. We see a strong desire among investors to take advantage of this unique opportunity and contribute to the future of the city, not only in terms of more beautiful architecture, but also a more convenient everyday life for those who will study, work, and live here,“ says A. Mikalauskas.
The project – exceptional
According to the Head of Urban LIVE, Hermanas business centre is being developed in one of Lithuania's most promising new city centres – Nemunaičiai district in the centre of Kaunas.
„SBA Urban and its partner, TABA Invest, plan to develop over 600 flats and 30,000 sqm of commercial space on a six-hectare site on the banks of Nemunas River. The first phase, comprising nearly 170 flats, has already been completed and sold out. The second phase of Nemunaičiai is currently under development, which includes Hermanas business centre with a multi-storey car parking lot and Pasaka residential project,“ emphasises A. Mikalauskas.
He concludes that there is currently a shortage of modern Class A offices in the Kaunas office market, with vacant premises in business centres remaining stable at below 5% for several years. According to the Head of Investments at SBA Urban, Hermanas business centre is being built at the right time, when there are almost no other offers on the Kaunas office market.