KAITA Development successfully places EUR 4.5 million in bonds
KAITA Development, the subsidiary of KAITA Group, one of the largest real estate development groups in Lithuania and currently developing residential projects in Vilnius’ Naujamiestis, Žirmūnai and Viršuliškės districts, has successfully issued EUR 4.5 million in two-year bonds with an annual interest rate of 10.5 percent. The bonds will be listed on the Nasdaq First North alternative market.
The company initially planned to issue EUR 4.5 million in two tranches, placing EUR 3 million in bonds during the first tranche. However, due to demand exceeding supply, the first tranche was increased to EUR 4.5 million. The issue was organized and carried out by the investment services company Orion Securities.
“The bonds attracted strong interest from retail investors. The average investment amounted to EUR 8.5 thousand. This is an important signal for us we are constantly expanding our activities in cooperation with banks in Lithuania and abroad, as well as large investors, but the confidence of small investors once again confirms the sustainability of our chosen strategy.,” says Ugnius Latvys, head of KAITA Group and one of its partners.
More than half of the amount, EUR 2.7 million, was raised by investors from Lithuania. Investors from Estonia contributed EUR 1.3 million and investors from Latvia EUR 600 thousand.
“The Vilnius real estate market is currently very active, housing affordability has returned to pre-pandemic levels, and demand is expected to continue growing next year due to both the reduced down payment requirement and the possibility to withdraw funds from the second pension pillar. We achieved our planned sales target for this year in 10 months and are among the companies that sold the most housing in the capital. All these indicators encourage us to further expand the supply of residential real estate in the city. The funds raised will be used for refinancing obligations and for ensuring continued financing of our ongoing projects,” says U. Latvys.
KAITA Development, which has successfully completed 26 real estate projects over the past eight years, is currently developing a EUR 31 million modern residential complex called Off in Naujamiestis. The project will include 242 housing units, among them the last newly built lofts in the capital.
“A balanced ratio of investment risk and potential return contributed to the higher investor demand in this issuance. In Lithuania, interest in these bonds was also driven by the strong activity in the residential real estate sector. This shows that investors view the alternative financing opportunities offered by real estate companies favorably and choose to participate in their growth,” says Mykantas Urba, Head of Investment Banking at Orion Securities.
Orion Securities recommends consulting with your financial advisor before making an investment decision and evaluating all risks related to securities (bonds) and/or any other circumstances that may be relevant to you.
