Favorte Real Estate Investment Fund

Stock-office real estate
cash flow fund in Estonia

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About the fund

Favorte Real Estate Investment Fund (Favorte REIF Usaldusfond) is a real estate fund that focuses on investing in cash flowing stock-office buildings.

+ The volume of the fund’s assets is currently 25.5M, including 6 stock-office type buildings with a leasable area of 22,297m2. (as of 19/07/2024, occupancy is 99.72%)

+ Goal for 2024 is to increase fund’s assets by 10M with adding new stock-office buildings to portfolio, which are already finished and fully leased out to tenants.

Minimum investment 100 000€.
Projected return (IRR) 12% per year.
Quarterly payouts from cash flow.
Planned exit in 2030.

The innovative stock-office concept has been developed in Estonia and is therefore most suited to the needs of the Baltic market, fostering local entrepreneurship and a rapidly expanding community of growth companies.

The manager of a small fund operates on the basis of registration and does not have an activity license of a fund manager or a manager of a small fund, and that the Financial Supervision Authority does not supervise its activities.

The stock-office concept

Stock-offices are characterised by the fact that they combine warehouse, production, office and showroom spaces.

This concept allows both medium-sized and fast-growing companies to keep their teams together, which increases the efficiency and flexibility of business processes. In today’s fast-changing business environment, the possibility to bring teams together under one roof to create agility and synergy can give a significant advantage over large companies with inflexible, cumbersome and often fragmented processes and logistics.

 

Stock-offices in Harju County and the Baltics

In 2024, 106,000 m2 of modern stock-office type commercial space will be added to the Baltic commercial real estate segment, of which 51,000 m2 will be in Tallinn, Estonia.

In Estonia, the buildings are largely concentrated in Tallinn and its surroundings, but the concept is also gaining popularity in other Baltic countries.

The demand for stock-office real estate is driven by the rapid development of e-commerce. Since e-shoppers in the Baltics consider fast delivery time important, a sufficiently sized intermediate warehouse and its proximity to the end consumer give the company a great competitive advantage. Also, the entire staff of the company works under one roof in the stock-office, thus the building must simultaneously have convenient accessibility for both employees and logistics service providers.

Customers of the stock-office space solution

The sizes of the buildings in the fund’s portfolio range from 800 to 6500 m2, and 45 different tenants operate on the entire 22 297 m2 leased area. Stock-office spaces are suitable for different size companies, whether they are growth or large companies. Their space requirement is mostly between 100-1000 m2, and the company can choose the size of the space according to its needs. Thanks to the functionality of the building, it is possible to increase the leased space over time and to reshape it according to the needs of the customer. This allows the company to expand comfortably its operations without changing its location, thus avoiding unnecessary additional costs and work stoppages.

About 60% of the tenants of stock-office business premises are engaged in retail or wholesale trade, but the premises are also popular among various light manufacturing and service companies. Therefore, it can be said that stock-office solution covers up to 70% of the space needs of the Baltic business sector. In addition, modern and energy-efficient stock-office buildings offer entrepreneurs the opportunity to contribute to a more sustainable world and at the same time save energy, natural resources and cut back on their ancillary costs.

Investment strategy

The objects of the fund’s investments are commercial buildings with an existing cash flow. Commercial buildings suitable for investment are mainly stock-office (warehouse-office-representative) and with logistics and production functions. We invest in properties witch have low vacancy.

All Favorte REIF stock-office buildings:

are located in an environment that is easily accessible and has a good logistical location

are designed considering environmental requirements

have a high level of energy efficiency

bring all of the company’s business under one roof, creating synergy and an inspiring working environment

consume and produce green energy and promote waste recycling and recovery

are designed to be easily convertible at minimum cost to meet the tenants’ rapidly changing needs

Our team

Rainer Hinno

Partner

Hendri Hinno

Partner

The fund's objects

Härgmäe 21, Haabersti

Location:

Tallinn, Harju County

Type:

Stock-office

Volume:

Gross area of 6336.1 m2

Occupancy:

100% | 9 companies

Härgmäe 22, Haabersti

Location:

Tallinn, Harju County

Type:

Stock-office

Volume:

Gross area of 4236.9 m2

Occupancy:

100% | 7 companies

Härgmäe 24, Haabersti

Location:

Tallinn, Harju County

Type:

Stock-office

Volume:

Gross area of 5433.4 m2

Occupancy:

100% | 6 companies

Laki 4, Mustamäe

Location:

Tallinn, Harju County

Type:

Stock-office

Volume:

Gross area of 2111.3 m2

Occupancy:

97% | 13 companies

Veldi tee 5, Rae parish

Location:

Rae parish, Harju County

Type:

Stock-office

Volume:

Gross area of 3406.3 m2

Occupancy:

100% | 5 companies

Kanarbiku 15, Rae parish

Location:

Rae parish, Harju County

Type:

Stock-office

Volume:

Gross area of 763.5 m2

Occupancy:

100% | 5 companies

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