Swedbank’s affiliate company bought Merirahu real estate development (ERR, in Estonian)

05 May 2010

Banks have stated that they are not interested in owning real estate, but there is a contrary sign – Swedbank’s affiliate company that deals with real estate, Ektornet, recently bought Merirahu real estate development with 66,6 million EEK, which is more than private investors were willing to offer.

Private investors were willing to offer 65 million EEK, but the bank outbid them. Ektonet Residential Estonia manager Meelis Shokman said that they had offered more because they saw that in the long-term the project’s value could be bigger.

 “There is only one criterion that is very important when dealing with real estate – location. This location and quality was something that matched our needs,” explained Redgate Capital’s Senior Partner Veikko Maripuu.
 Banks have already stated that they are not interested in buying real estate and so far banks have only bought real estate that no one else wanted.

Maripuu said that in some cases there might be a conflict of interest for banks. “They are involved with the process in every way. Quite another matter is the question of whether their money buffer is as well-calculated as those of private investors!”

Shokman replied that they do not get any information from Swedbank, only from public sources.

Read full article here.