Real estate developer Hepsor has announced a fixed interest rate of 9,5 % per annum for its latest bond issuance, with quarterly coupon payouts. The bonds carry a nominal value of €1,000 each and feature a maturity date set for September 2029, supporting the company’s ongoing residential and commercial construction pipeline across Tallinn and Riga.
The Bottom Line
- Yield & Structure: The bonds offer a 9,5 % annual fixed return with quarterly interest payments, maturing in September 2029.
- Program Scope: This offering represents the second tranche of a 20 miljonu eiro bond program launched in 2025.
- Deployment of Capital: Funds are earmarked to finance active developments, including 513 housing units currently under construction in Tallinn and Riga.
Scaling Development Amid Rising Baltic Housing Demand
According to Hepsor vadītājs Martti Krass, the company’s development portfolio has expanded significantly over the past year. The developer is managing active construction on 513 residential units across the Baltic capitals, with plans to break ground on an additional 119 units before the end of the year. Here is the math: higher presale activity has directly fueled operational scale, supported by a 40% year-over-year increase in unit sales.
During the first half of the year, Hepsor secured 129 apartment pre-sale agreements totaling 25,7 miljoni eiro. But the balance sheet tells a different story regarding inventory constraints; management noted that a historical shortage of completed homes had previously capped sales volume. Record construction activity is designed to clear that bottleneck as projects reach completion over the coming quarters.
Project Pipeline Across Riga and Tallinn
In Riga, the 360° Dzelzavas Residences project will deliver 103 completed apartments this year, with 42 units already sold. Additional active sites include Zaļā Jugla on Braila iela, upcoming developments on Starta ielā, and a recently contracted 48-apartment project on Meža iela secured via a July preliminary land purchase agreement. Furthermore, the Veidama kvartāls development on Ganību dambis will add more than 400 units, with construction slated for the second half of 2027.
| Metric / Project Identifier | Volume / Value | Timeline / Status |
|---|---|---|
| H1 Pre-sale Contracts | 129 apartments (25,7 miljoni eiro) | Completed (First Half) |
| Active Baltic Construction | 513 residential units | Ongoing (Tallinn & Riga) |
| Bond Tranche Parameters | €1,000 nominal, 9,5 % yield | Maturity: September 2029 |
| Veski Keskus Commercial Space | 3,551 m² (97% pre-leased) | Scheduled for completion |
Across the Gulf of Finland, Hepsor is finalizing 49 apartments in Tallinn’s Manufaktuuri quarter, where 27 units are already sold. Commercial operations are also scaling at the Veski Keskus retail center in the Peetri district, spanning 3,551 square meters of commercial space with 97% of the area already tied down via lease agreements. An additional 88 units are scheduled for completion in Tallinn’s Paevälja quarter by 2027, executed in partnership with Eften Capital.
Institutional Appetite for Baltic Real Estate Paper
Listed on the main list of the Nasdaq Tallinn stock exchange, this offering marks the second issuance under a 20 miljonu eiro framework initiated in 2025. The program’s initial tranche targeted 6 miljoni eiro and drew 8,5 miljonu eiro in investor subscriptions, signaling healthy market depth for corporate debt in the region.
Silver Kalmus, Head of the Bond Division at LHV Bank, pointed out that the oversubscription of the previous round reinforced investor confidence in the issuer. According to Kalmus, the company’s established track record on the exchange combined with record construction volumes gives the new issuance a clear operational purpose.
Beyond the Baltics, Hepsor maintains exposure to North American markets through five active projects in Canada focused on detailed planning and zoning rights acquisition. With 29 total development projects encompassing 195 000 m2 in its portfolio, the group continues to evaluate contiguous land parcels in Estonia and Latvia to sustain its forward pipeline.
