Newsec brokered the sale of a shopping centre in Liepaja
The international real estate advisory firm Newsec brokered the sale of a shopping centre belonging to the Lords LB Baltic Fund III. The client that acquired the property at a central location in the Latvian city of Liepaja, and the transaction amount, are not being made public.
Among the shopping centre’s 25 tenants, the largest are the Rimi retail chain and a JYSK home furnishings store. Its total leasable area is approximately 6,300 square metres.
“This is one of the most popular shopping centres in Liepaja, liked by residents and guests of the city for its developed infrastructure, strategically convenient location, and parking lot well-suited to the needs of shopping centre visitors. The broad assortment of goods and services at the shopping centre is also valued,” notes Newsec Senior Investment Advisor Linas Žilevičius.
Resilience to market shocks is important
In Žilevičius’s words, this property segment remains attractive among both consumers and investors: “During the COVID-19 pandemic it became clear that shopping centres whose leased area is largely occupied by food retailers remain attractive to investors as an investment that generates a stable financial flow, since they demonstrate resilience to market downturns or other market shocks.”
An estimated 2.5 million shoppers visit this shopping centre each year, though Liepaja also has another five shopping centres of its type. During the quarantine, the shopping centre did not close and Rimi continued to operate. Despite the impact of COVID-19 on the retail market, the shopping centre’s tenants did not change.
According to the advisor, the shopping centre’s successful activity will be continued with no need for additional investments. The client that acquired the property does not plan to change its shopping centre status and the same tenants will remain.
Investments in secondary cities
“In Latvia, like in other countries, large retail centres generally focus on the capital – Riga, but the quarantine drew attention to the fact that retail trade in food products is a segment that’s essential for consumers and is resilient. That’s why, for this segment, location is not so important – demand will be felt both in the capital and in the country’s secondary cities,” Žilevičius says.
The expert notes that an investment of this size in a shopping centre outside the capital city shows the market’s liquidity. Characteristics of a property like good accessibility, stable long-term tenants and sustainable operations are the key indicators for investors.