We advised Stockmann on the sale of its department store properties in Tallinn, Estonia, and Riga, Latvia to the investment arm of Viru Keemia Grupp (VKG).

Notable transaction

This was one of the biggest real estate transactions in the Estonian and Latvian markets in 2021. The sale is a part of the corporate restructuring program and proceeds will be used to reduce secured restructuring debts. Stockmann will continue its department store operations in Tallinn and Riga under long-term leaseback agreements made with the new owner.

Stockmann built the Tallinn department store property in 1996 and expanded it from a two-story to a five-story department store in 2000, to become the largest department store in the Baltics. The net leased area of the Tallinn department store property is 22,980 square meters. The department store property in Riga was built in 2003 and has a net leased area of 15,965 square meters.

Stable future

“We are pleased to have found a stable and reliable Baltic owner for the properties, that wants to develop the properties and our department stores in cooperation with us. Our department stores will continue their operations as normal”, says Jari Latvanen, CEO of Stockmann.

“We are excited to be partnering with Stockmann in the Baltics. Both landmark properties are exceptionally well-positioned in the growing capital cities of Estonia and Latvia, and we are looking forward to exploring follow-on investment opportunities to support the core business of Stockmann going forward”, says Sten Pisang, CEO of VKG Invest.

VKG Invest is the independent investment arm of VKG, focusing on standalone financial investments unrelated to the group’s core activities and with a primary focus on real estate. Viru Keemia Grupp is a privately owned Estonian industrial corporation with a history dating back to 1924.

Our services and client team

We advised Stockmann at all stages of the transaction, including preparations of the transaction, negotiations, and preparation of transaction documents, as well as on finalizing the transaction.

Our international client team was led by partner Paul Künnap, who was supported by:

In Estonia: senior associate Mirjam Vichmann and associate Andra Grünberg;

In Latvia: partner Lelde Laviņa, counsel Jānis Bite and senior associate Viktorija Smirnova-Čerkasa.

More information: Nasdaq and ERR.