2024/02/09
Real estate development company Realco has invested a total of 32 million euros in projects in 2023. For 2024, the company plans to invest almost 2.5 times more - 78 million euros in projects in Lithuania and abroad. The largest part of the investments this year will be directed to the Hero business centre in the capital city, as well as prestigious and higher-class residential projects in Vilnius and luxury villa projects in the Spanish Marbella area.
"The past year can be called a stable year. Our company's results reflected the situation in the stagnant real estate market, where transactions were slower than in previous years due to rising interest rates and the geopolitical situation. Last year we started with a stock of 109 flats and sold a total of 63 of them. Our main goal this year is the development of the already launched projects that include the prestigious and higher-class residential projects Algirdo 3, Vileišio 27 and the business centre Hero in the central part of the capital city, as well as two very luxurious villa projects in Spain," comments Julius Dovidonis, the CEO of Realco.
Completion of one project leads to the start of another
In 2023, Realco completed the construction of project 7 Vakarai in the western part of the capital with the sale of 286 flats, as well as the fully completed project Go Life in Ozo Park, where the company offered 279 apartments to the market.
According to J. Dovidonis, last year's focus was also on the company's "paper" stage mid and economy class residential projects Baltupis in the Baltupiai district and Just-in in Justiniškės.
"The first phase of the Baltupis project, with a total of 368 flats and commercial premises, was granted a building permit last year (168 apartments), and the second phase is expected to be granted a building permit shortly. The 499 flats project Just-in is also working on obtaining a building permit, which is expected in March. The company will then be ready to inject almost 900 apartments into the capital's primary real estate market.
The company recorded 295 notarial sales in 2023 and the value of notarial contracts concluded was 42.3 million euros. Last year, the value of the preliminary sales contracts signed amounted to 10.6 million euros.
Focus on offices and prestige housing segments
This year Realco plans to focus its investments and attention on the business centre Hero and the prestigious residential project Algirdo 3.
The company has planned investments of 46.4 million euros for the Hero project this year. In total, 112 million euros will be invested in the development of this business centre, of which around 60% is expected to be borrowed through bonds. Last year, two private issues of bonds were organized, and the company is planning its first public issuance in May this year.
"The two private issues of bonds in 2023 were very successful and showed that the market finds this project attractive. In total, we have issued 13.5 million euros worth of securities. We are planning a public bond issue in spring this year," says J. Dovidonis.
According to J. Dovidonis, the Hero business centre project is being developed according to the plan - its benefits are being refined, the team is being strengthened, the project is being prepared to be presented to the market and the active search for tenants for the future office space is planned to start soon. The construction works on the business centre site are planned to be completed by mid-2025.
At the same time, the prestigious residential project Algirdo 3 is being prepared for the start of apartment sales. The prestigious low-rise building complex located in Naujamiestis has 91 apartments and commercial premises. The project will offer a choice of 1-4 room flats of different types, ranging from 35 to 140 sqm.
"It has become common for developers to start selling flats as soon as they start construction of a residential project, so our strategy of not announcing the start of sales of this prestigious project until construction is completed may seem unexpected. From the beginning of the development, we have emphasized that the project is unique, and so we have a different sales strategy. Our aim is to complete the work and only then invite clients to see the finished project. We want the clients to see the project not from drawings, visualizations or unfinished constructions, but only after it is fully completed," explains the CEO of the company.
The work on the higher-class residential project Vileišio 27 in Antakalnis is also nearing completion, the owners of the apartments will be invited to sign notarial contracts in March. One third of the apartments have been sold in the building, which is being constructed on a plot of almost half a hectare.
This year, Realco will also start working on its first projects abroad - the construction of prestigious villas on plots of land acquired last year on the Costa del Sol in Marbella, Spain. On the first 35-acre plot, 3 very luxurious villas of 700 sqm will be built, while on the second 105-acre plot, 11 prestigious villas of around 400 sqm each will be constructed. Both projects are scheduled to start in spring 2024 and to be completed in 2025.