Nuve Partners buys grocery centres in 11 Latvian cities

Nuve Partners, a Baltic retail-property investor with a portfolio worth about €135 million, has bought shopping centres anchored by Rimi in Riga, Jūrmala, Ādaži, Bauska, Gulbene, Kuldīga, Liepāja, Madona, Olaine, Valmiera and Ventspils. The purchase covers about 9,000 square metres and is the first transaction financed by Rietumu Banka, described as Latvia’s largest locally owned business bank.

The firm is one of the leading Baltic retail real-estate investors and is often among the first buyers approached when significant retail assets come up for sale. Across the Baltics its centres are typically anchored by grocery chains such as Rimi, Maxima and Selver, with smaller shops and service providers alongside them. It also manages money for institutional investors, including pension funds of major Nordic banks.

Lauri Henno of Nuve Partners said people shop for food every day, so grocery stores are a stable business and a sound long-term investment. He said buying a property and collecting rent is not enough: shoppers come for milk and everyday goods, which the owner cannot substantially change, while the building, its surroundings and how it fits the local community matter more, including outside the largest cities.

Henno recalled that around 2017, before the Covid-19 pandemic, industry professionals worried about how Lidl’s arrival and the growth of e-commerce might affect retail. In his view, grocery stores proved resilient through the pandemic and the economic pressures that followed. Residential, logistics, office and industrial property have each been treated as the most attractive Baltic asset class at different times, yet retail’s stability has remained appealing to long-term investors. That stability led Nuve Partners to look beyond Riga, Latvia’s largest and most competitive property market.

He said the business is based on mathematics, and that outside the capital it is often possible to find more attractive opportunities, with lower purchase prices, less competition and solid long-term returns. The firm is aware of demographic trends, he said, but such changes take decades, and a good store in the best location in Madona, Bauska or Olaine is often a more valuable investment than a property in a Riga district. Capitals offer greater liquidity, while the company focuses on strategically important assets with long leases and services that local communities need every day.

Henno is also optimistic about Latvia’s economic development, including in the regions. In his view, Latvia has in recent years become the most active Baltic state in attracting foreign direct investment, and municipalities increasingly recognise that business growth is tied to local welfare. From an investor’s perspective, he said, Latvia currently offers more attractive property prices than Estonia and especially Lithuania.

He said Baltic societies have become more demanding, so property must develop outside the big cities as well. Retail space now needs to be attractive, well kept and well lit, and energy efficiency is a basic standard rather than an advantage. Across the Baltic portfolio the firm looks for green-energy solutions, electric-vehicle charging, better connectivity and other improvements. Being a landlord is no longer enough, he said: the owner has to help tenants grow their businesses, take an active part in the local community and create a place where people want to spend time. Satisfied customers mean satisfied tenants, and that in turn means satisfied investors.

Although Nuve Partners has access to institutional and private capital, it also uses bank finance to grow faster. Henno said that without bank financing the portfolio would most likely be about half its present size. Borrowing has a cost, he said, but bank capital lets the firm take market opportunities more quickly, and he valued Rietumu Banka’s partnership through the deal. Bank requirements were broadly similar, and working with Rietumu Banka was no more difficult than with other lenders. Experience with cross-border deals, competence across the Baltics and an understanding of local markets were important advantages. He said the firm always compares offers from several banks, that the first cooperation was very successful, and that he expects further opportunities to work together as new investments appear.

Henno confirmed that Nuve Partners plans to keep expanding while focusing on retail properties that generate stable cash flow. He said there are many potential acquisition targets across the Baltics, especially in Latvia. Local capital is becoming stronger and more mature, and some investors are already looking at markets such as Poland, but the firm’s main advantage is its knowledge of the Baltic market. He said the company believes in these countries and hopes that further announcements of investments, in the largest cities and beyond them, are only a matter of time.