New Class A office building in Kaunas

BEI Capital, a company owned by one of the biggest holdings in Lithuania, SBA Concern, has acquired an office building located at Donelaičio g. 60 in Kaunas. According to the new owner's plan, the building will be rebuild and transformed into a 14,000 sqm Class A office. The project is located near Vienybės aikštė in the New City of Kaunas. According to SBA, the building is set to be energy efficient and have some modern technology solutions deployed. The 12-storey building was originally constructed for Pramprojektas, an engineering and architecture design company founded in 1960s, and continues to operate under the company’s name.

Before being sold to SBA, the building belonged to Šiaulių bankas, Swedbank lizingas and Nemora. "The value of the deal signed between Swedbank lizingas, Šiaulių bankas and Nemora was not disclosed," SBA informed. "The transaction was conducted at an acceptable price proposed by the buyer to Šiaulių bankas, and will not have any substantial impact on the bank’s performance result. This deal is one of the steps taken by the bank in order to implement its strategy which assumes the sale of the non-core assets," informed Šiaulių bankas. “The building, before the sale, belonged to several owners, and only part of the building was owned by Šiaulių bankas. This part of the building was taken over by the bank in February 2013 from the bankrupt Ūkio bankas. The remainder of the asset was taken over by other companies as a debt repayment,” says Daiva Grikšienė of Šiaulių bankas.

The companies owned by SBA Concern already have some office buildings in Kaunas (6,700 sqm). They also hold the Green Hall building in Vilnius (10,800 sqm). “We have office buildings in both Vilnius and Kaunas, therefore we understand that we will have to take some risks when implementing our new project. On the one hand, the market of the Class A offices in Kaunas is not as competitive as the Vilnius market: for the time being, supply of the highest class, large office space is considerably lower here. This could be an issue because the city, which is well-situated geographically and offers qualified labour, does not use all the potential it has to attract investment. On the other hand, the investment value of the buildings in Vilnius and Kaunas is practically the same while the rent prices in Kaunas are significantly lower at the given moment. Therefore, the property investment pays off at a significantly lower rate. The SBA Concern is oriented towards long-time investment, therefore, this risk is acceptable for us. However, when trying to attract foreign companies to Kaunas, some effort from the city will need to be made, too,” said Egidijus Valentinavičius, a vice-president of SBA Concern.