SBA Urban group company has successfully issued bonds for EUR 8 million
The SBA Group company Urban Hub Investments has successfully completed public bond issuance of EUR 8 million. The proceeds will be deployed in the Phase I development of Urban HUB Kaunas, the largest stock-office project in the Baltic States with over 70 000 sqm building space to be developed by 2027.
Attractive investment opportunity for various investors
“The debut of SBA Urban in the bond market was a success. As expected, the Urban HUB issue has received significant interest from both private investors and investment companies. In the first tranche of the bond issuance, we aimed to attract 5 million Euros, but after strong demand shown by the investors, we decided to issue the entire 8 million Euros. Successful bond issuance signals positive outlook for the stock-office segment from the investor community, and reflects confidence in Urban HUB Kaunas project as well as SBA development team behind it,” says Kasparas Juška, Investment Manager at SBA Urban.
Over 100 investors participated in the bond issuance. According to K. Juška, bond market provides attractive medium for investors seeking to deploy capital and developers seeking flexible project financing and diversification of financing sources. More investment opportunities linked to exclusive SBA Urban projects are planned to be offered in the future.
Urban HUB Kaunas bonds provide an annual coupon rate of 10.75%, paid quarterly, with a maturity of 2 years. Minimum investment sum is 10 000 EUR. The bonds were distributed by Šiaulių Bankas and Redgate Capital. Legal advisor in the issuance was Ellex Valiunas.
“The issuance of bonds by Urban Hub Investments surprised financial market participants by of the demand and exceptionally short period in which the issuance was completed in full. It’s heartening to see that investors are increasingly investing their funds in capital markets, and we have seen that strong companies have actively contributed to this. We believe that such examples will inspire more market participants to utilise different sources of financing effectively,” said Eglė Džiugytė, Head of the Financial Markets Department at Šiaulių Bankas.
Bond proceeds to be invested in the Phase I of Urban HUB Kaunas
The funds raised in the bond issuance will be deployed in the Phase I development of Urban HUB Kaunas, located in the strategic intersection of A1 and A6 highways. Four buildings comprising over 22 000 sqm of leasable space as well as related project infrastructure will be developed during the Phase I. Construction has been started in May 2023 and is planned to be finished in April 2024. General contractor is YIT Lithuania. Currently, all four buildings have been raised and installation works of the façade are ongoing.
It is planned that, more than 100 companies with over 800 employees from various sectors, including specialized retail and wholesale, services, and groceries, will reside in the project.
In parallel with the project in Kaunas, SBA Urban is also developing a Urban HUB Vilnius, which will provide 22,000 m2 of office, warehouse, and commercial space already in 2024.
In addition to the leading project investor and developer SBA Urban, EUR 11 million equity investment was attracted to Urban HUB projects from investment the TABA Invest, owned by Tautvydas Barštys family.
SBA Urban, part of SBA Group, is a leading real estate developer in Lithuania, focused on the development of sustainable office, industrial, logistics, and residential projects. For more than 15 years, the company has collaborated with global architectural leaders and has successfully developed more than 220,000 m². SBA Urban invests in four strategic directions – stock offices through Urban HUB, mixed-use and residential development through Urban LIVE and seaside wind-sports resort development through Urban WIND. SBA Urban core portfolio assets include landmark Green Hall office complex in Vilnius and BLC Kaunas. SBA Urban has also developed assets for SBA Group companies, such as Kauno Dokas (Kaunas) and Verde (Riga) offices, as well as Inno Line industrial centre.
SBA is one of the largest business groups in Lithuania. It consists of more than 30 companies operating in the real estate, furniture manufacturing, textile manufacturing, and investment management sectors. The consolidated group sales reached 440 million Euros in 2022.