NPC

News

01 December 2004

Following a management buyout, the Baltic agency chain makes plans for further expansion across the region, and into new sectors and products

NPC, owner of the Ober-Haus agency chain and Schlössle Hotels across central Europe and the Baltic regions, has just completed a management buyout. Chairman Paul Oberschneider, Ober-Haus employees and managers are acquiring the shares of Ober-Haus Property Advisors from controlling shareholder Apollo Real Estate Investment Fund III.

The deal was financed through a private placement of notes arranged by local Parex banka and Hansa Bank and from equity provided by NPC and managers. The issue was oversubscribed three times.

The decision to buy the agency group was based on the right market conditions occurring at a time when Apollo’s investment in the company had matured. According to Oberschneider: “We worked on this transaction for a year and felt it was best if the management and some employees owned the business in its next growth stage.”

Ober-Haus was set up by US entrepreneur Oberschneider in 1994 when he saw the opportunities on a visit to explore his Estonian origins, with backing from US investor Apollo Real Estate Advisors. Now it is the largest single branded estate agency service company in the Baltic region and in Poland in terms of coverage and brokers on the ground.

It has 31 offices in total and plans to grow its agency operations in Poland. It will expand into the Czech Republic early next year from a base in Prague.

Oberschneider has another partner, the Norwegian fund Industrifinans Baltikums, and together they are acquiring from Apollo the majority shares of the Schlössle Hotel Group, a portfolio of three luxury hotels in the Baltic region. “Because there are a number of low-cost airlines serving the regions, the hotel sector is turning so we will keep them for several more years.” The boutique-type hotels are in the historic parts of the Estonian capital Tallinn, where NPC has two, and Latvian capital Riga.

Oberschneider also has a portfolio of five hypermarket-anchored retail schemes, with another three under way enabled by debt provided by Hansa Bank. “Retail in the Baltics is pretty much overbuilt now. Once our three latest schemes are completed we’re probably done in the sector. We were fortunate to have land banked good sites and had anchor tenants lined up,” says Oberschneider.

The buyout gives NPC a new platform and Oberschneider has decided to branch out into residential development. The company has acquired a 12ha site in Tallinn, where it plans to build 2,000 units over the next two years. In addition, it has obtained planning consent for 805 apartments in the city’s suburbs. Both these projects are fully funded and NPC plans to work on them over the next two years.

Also, the company has created a €50m equity platform to build housing in the Polish and Baltic markets with the UK’s Grainger and Austrian bank Immo East. “We see a lot of growth over the next five years in the residential cycle. There is huge demand and low supply and most of the property built is being bought off-plan,” says Oberschneider.

The venture is focusing on the lower end of the market with apartments of 50m2 and 65m2 costing €40,000 to €50,000. In time, Ober-Uaus may start to offer mortgage products.

NPC

53 Nava mnt

Tallinn

Estonia

Tel 372 6659 700

Fax 372 6659 701

Following a management buyout, the Baltic agency chain makes plans for further expansion across the region, and into new sectors and products NPC, owner of the Ober-Haus agency chain and Schlössle Hotels across central Europe and the Baltic regions, has just completed a management buyout. Chairman Paul Oberschneider, Ober-Haus employees and managers are acquiring the shares of Ober-Haus Property Advisors from controlling shareholder Apollo Real Estate Investment Fund III. The deal was financed through a private placement of notes arranged by local Parex banka and Hansa Bank and from equity provided by NPC and managers. The issue was oversubscribed three times. The decision to buy the agency group was based on the right market conditions occurring at a time when Apollo’s investment in the company had matured. According to Oberschneider: “We worked on this transaction for a year and felt it was best if the management and some employees owned the business in its next growth stage.” Ober-Haus was set up by US entrepreneur Oberschneider in 1994 when he saw the opportunities on a visit to explore his Estonian origins, with backing from US investor Apollo Real Estate Advisors. Now it is the largest single branded estate agency service company in the Baltic region and in Poland in terms of coverage and brokers on the ground. It has 31 offices in total and plans to grow its agency operations in Poland. It will expand into the Czech Republic early next year from a base in Prague. Oberschneider has another partner, the Norwegian fund Industrifinans Baltikums, and together they are acquiring from Apollo the majority shares of the Schlössle Hotel Group, a portfolio of three luxury hotels in the Baltic region. “Because there are a number of low-cost airlines serving the regions, the hotel sector is turning so we will keep them for several more years.” The boutique-type hotels are in the historic parts of the Estonian capital Tallinn, where NPC has two, and Latvian capital Riga. Oberschneider also has a portfolio of five hypermarket-anchored retail schemes, with another three under way enabled by debt provided by Hansa Bank. “Retail in the Baltics is pretty much overbuilt now. Once our three latest schemes are completed we’re probably done in the sector. We were fortunate to have land banked good sites and had anchor tenants lined up,” says Oberschneider. The buyout gives NPC a new platform and Oberschneider has decided to branch out into residential development. The company has acquired a 12ha site in Tallinn, where it plans to build 2,000 units over the next two years. In addition, it has obtained planning consent for 805 apartments in the city’s suburbs. Both these projects are fully funded and NPC plans to work on them over the next two years. Also, the company has created a €50m equity platform to build housing in the Polish and Baltic markets with the UK’s Grainger and Austrian bank Immo East. “We see a lot of growth over the next five years in the residential cycle. There is huge demand and low supply and most of the property built is being bought off-plan,” says Oberschneider. The venture is focusing on the lower end of the market with apartments of 50m2 and 65m2 costing €40,000 to €50,000. In time, Ober-Uaus may start to offer mortgage products. NPC 53 Nava mnt Tallinn Estonia Tel 372 6659 700 Fax 372 6659 701