Press release, 20.02.2013
EfTEN Real Estate Fund and Vello Kunman’s AS Esraven purchased the property and operator of hotel Palace, situated at Tallinn Freedom Square, as a joint investment from Scandic Hotels AB.
Viljar Arakas, the CEO of EfTEN Capital, considers the investment unique. “Hotel Palace is an icon with its long history and unique location. Yet the last thorough renovation dates back to almost a quarter of a century and the life cycle of utility systems is reaching its final end. At this stage the hotel cannot be competitive in today’s market and needs full renovation. Our plan is to completely reconstruct and reopen hotel Palace is its former glory,” Arakas said.
EfTEN Real Estate Fund acquired the property and operator of hotel Palace with investor Esraven AS, part of Silikaat Group. Both parties have agreed to invest 50% of the full cost of the project. EfTEN Real Estate Fund and Silikaat Group have prior good cooperation experience with a joint investment in Pärnu – the Lepa Centre. Also, Vello Kunman is an investor at EfTEN Real Estate Fund and partner in the fund manager EfTEN Capital AS. The deal will close after obtaining an approval from Estonian Competition Authority. The volume of the deal remains confidential. Keystone Advisers as well as Nordeus law office acted as buy-side advisor for the sales transaction and Nordic Hotels Consulting and PwC Legal as sell-side advisor.
Hotel Palace is located in the heart of Tallinn at Vabaduse väljak 3 / Pärnu mnt 14. The building was built in 1937 and was already initially constructed as a hotel. The last full renovation of the building took place in 1989.
The acquisition marks the 15th object in EfTEN Real Estate Fund’s portfolio, with a total 83 000 m2 of rental area, divided into office, service, accommodation, warehousing and public sector of property.
EfTEN Real Estate Fund is established by EfTEN Capital AS, the fund manager, in year 2008. The fund invests in commercial real estate properties; a portfolio of commercial real estate has a total of 15 objects. EfTEN Capital AS is an asset management company founded in 2008, specialising in real estate investments. EfTEN Capital is licensed as a fund manager by Estonian FSA. The company also offers private portfolio management.