Luxury office in Tallinn

F. R. Kreutzwaldi 3, Tallinn, Estonia (Show on map) Office

Object overview

Kreutzwaldi 3-27 is 87,1 m2, 2 bedrooms property on the second floor rented as office space with the valid rental contract.

The luxury design of Kreutzwaldi building is unique and attractive for this area. It is well noticeable modern style building made of glass and polished stone. The building has expensive decorations inside and well-presented both from inside and outside. The House is new and was built in 2014. First floors are rented out to a commercial area to eye clinics, dentists, and notary agencies. Other rooms are rented as residential flats.

The property is located in a modern residential building in Tallinn city center which combines everything a city dweller values in a residential property – functional and stylish apartment, beautiful view, high-quality building materials, innovational design.

Its location in the center of Estonia’s capital gives the tenants easy access to transportation and city infrastructure with strategical destinations, like the airport and seaport. Within 300 meters is situated the Tallinn University, Tallinn Music school within 100 meters and within 5 minutes walk are banks, shopping malls, restaurants, and schools. Within 10 minutes walk lies the Tallinn Old Town.

The property’s quality and superb location allow for it to be used as both residential and office space. Currently, it is rented out as an office space, allowing for higher rental yields annually.

Tallinn is the capital of Estonia with the population of 426 000 people. It is the biggest city of Estonia, main business, and logistics hub in the country. According to the latest report, which is published by The Financial Times, Tallinn is ranked 4th among the ten European mid-size cities that are most attractive for future inward investment. Urbanisation level is rising and during the last 7 years, Tallinn got more than 5% of population growth, which reflects on high demand for property in the capital region.

Investment case

The Property for investment with the address Kreutzwaldi 3-27, Tallinn, Estonia is a Residential / Commercial – apartment. The property benefits from long-term contract rent and used as an Office for Norwegian IT company, offering stable and growing income stream.

Kreutzwaldi apartment is located in City center, on the border with the greenest district of Tallinn – Kadriorg. Location of the apartment creates interest both for business customers and City dwellers after our analysis renting to commercial customers provided better yield and more stable contract.

Tallinn is a developed city with high urbanization rate. It attracts more and more people and comparing to 2010 the population growth was 5%. Tallinn was visited by 4,5 million of tourists in 2017 and this number is going up. Many foreign investors find this market attractive for investments which will make demand higher in future.

Reinvest24 is listing 2 387 000 shares with the price of 0.1 EUR per share, min. investment - 100 EUR.

Reinvest24 investors have an opportunity to invest up to 238 700 EUR into Kreutzwaldi 3-27 property and receive the proportional part of the Project rental profit and capital growth, paid out as variable interest. The investment will be secured by mortgage of property held by Collateral Agent.

The property has an existing contract with Norwegian IT company for long term rent.

Reinvest24 investors will purchase the property without any loan obligations and the strategy for profit maximization will be to rent it out as an office, providing a better income and sell as a residential apartment on the exit. Additional profit will be gained from renting parking space.

Property is with high liquidity and can be sold quickly, as the house is new, built with high quality and the price we buy it at the moment is lower than the average market price. The financial situation in Estonia is described as stable with moderate growth with positive looking at future. During last years we have seen incoming of new square meters in residential apartments, which stabilized the price growth on the market. Future prognosis forecast the price growth as the demand for quality property will increase. Tallinn has an increase of 10% in residential real estate sales compared to the same period of previous year and tendency is not going down. The average price in Tallinn has hit record at 1800 EUR /m2. 10 years ago, before the crisis, it was at the level of 1706 EUR/ m2. The tendency of purchasing new property is also going up - it is 27% now from all deals, compared with 23%, which was a year ago. Kesklinn district, where our property is located has the biggest growth of the deals in Tallinn last year (+207 pc)

The prices in Kesklinn are rising during the last 9 years in a row and the forecast is that they will continue growing in nearest future. During the last 15 years, the price growth equals to +167% - from 885 EUR/m2 in 2003 to 2360 EUR/m2 in 2018. We forecast stable growth of 4-6% every year which will create total Net Yield up to 12,1% per year in 5-year investment horizon.

As a conclusion, we expect stable and secure profit from this property. Its location and high attractiveness among tenants minimize the risks to our investors.

Amortised Purchase Costs - detailed description:

Property Value - 237000 EUR
Operational Costs and Notary Fee- 1500 EUR
Collateral Agent - 200 EUR

Annual Rental Yield Calculation:

Expenses:
Commission - 1584 EUR
Service Expenses (SPV) and taxes - 552 EUR
Amortization Fee - 300 EUR

Income:
Rent (Gross) - 15840 EUR

Squaremeter price during last 5 years in given region:

2012 - 1738,69 EUR

2013 - 1820,54 EUR

2014 - 2013,29 EUR

2015 - 2051,98 EUR

2016 - 2107,78 EUR

2017 - 2126,43 EUR

Total growth - 16,8%


Financials

€238,700 Latest Valuation
2,387,000 Shares
=
€0.10 Latest Share Valuation
Latest Property Value €237,000
Amortised Purchase Costs €1,700
Latest Valuation €238,700

Documents

Appraisal Report Download
Land Register document Download
Apartment Plan Download

For all other information about this investment, see the attached documents.

Safety guaranteed

This object has passed Reinvest24 test and secured by Collateral Agent mortgage.

Object price €238,700
100% funded
Net Rental Yield 5.61%
Gross Rental Yield 6.63%