Nuve Partners launches real estate fund with fixed-income style risk profile
Estonian real estate investment company Nuve Partners has launched a new fund, Net Lease for Future Fund, the first in the Baltics to focus on single-tenant properties with long-term net lease agreements. The fund aims to assemble €100 million worth of assets in Estonia, Latvia, and Lithuania within two years.
Mihkel Oja, who joined Nuve Partners earlier this year, added that now is an excellent time to bring such a model to market. ‘Interest rates have fallen, the market is activating, and opportunities are growing. It’s a good time for investors to be on the buy side,’ said Oja, who previously led LHV Asset Management for 12 years.
One quarter of portfolio in place
The fund starts with a functioning portfolio of two investments worth around €25 million. It has just completed a sale-and-leaseback transaction for Amserv’s car dealerships in Latvia, where Amserv will remain as the long-term tenant. Amserv is one of the largest automotive sales and service groups in the Baltics, with its flagship dealership located on Krasta Street in central Riga, the busiest road in the region. The fund’s second investment consists of three Møller Auto dealerships in Estonia.
Over the next two years, the fund plans to quadruple the portfolio by raising additional capital from investors. Investments will cover industrial, logistics, and specialized retail real estate. “The key criterion is that the property must be mission-critical for the tenant — essential for their operations,” Uri emphasized.
The fund targets properties with a single strong tenant, long-term inflation-protected leases, and minimal operating costs for investors. From the investor’s perspective, the strategy resembles bonds, but with the additional security of real estate ownership.
A key part of the fund’s strategy is sale-and-leaseback transactions, in which companies sell their properties but remain as tenants under long-term leases. This allows companies to free up capital to grow their businesses while retaining full control over the use of the buildings.
Future-proof portfolio
The fund has a term of five to seven years: within two years it will assemble a portfolio of about €100 million and upgrade the assets to future-proof standards. “Many buildings are in good condition today but no longer meet modern expectations for energy efficiency or ESG principles,” Uri explained.
“When real estate is not a company’s core business, they often lack the competence and focus to address these issues. For us, it’s daily work — we bring assets to a level that makes them attractive to banks, tenants, and investors for the next 20 years,” he added.
At maturity, the entire portfolio will be sold to an institutional investor. “Individual properties would be too small for international funds, but a consolidated portfolio of well-managed, future-proofed assets is attractive to them,” Oja noted.
Net Lease for Future is starting with ten investors from Estonia and Lithuania, with Nuve Partners also committing significant capital. “For investors, it is important that we are in the same boat,” Uri stressed.
