Hepsor reaches record construction volumes and issues bonds yielding 9,5%

Property developer Hepsor will begin accepting subscription orders for new bonds carrying an interest rate of 9,5% tomorrow on August 25. The subscription period ends on September 4, and the company plans to use the capital raised primarily to fund development projects in Estonia and Latvia.

Hepsor’s new bonds have a fixed interest rate of 9,5% per annum with interest paid quarterly. The nominal value of each bond is 1000 euros, and the bonds mature in September 2029.

“Hepsor’s development portfolio has grown significantly over the past year. Several of our projects are concurrently in the active construction phase, and Hepsor currently has a total of 513 homes under construction in Tallinn and Riga. We plan to increase output even further by the end of the year and launch the construction of another 119 homes. In addition, we are building commercial premises in Veski Centre in Peetri. The bond issue gives us flexibility in financing these developments whilst maintaining our readiness to launch new projects,” says Hepsor’s CEO, Martti Krass.

As homebuyers have become more active in the real estate market, sales of new build homes by Hepsor have also increased. In the first half of this year, Hepsor signed 129 initial sales contracts for apartments with a total value of 25.7 million euros. The number of homes sold has risen by nearly 40 per cent over the past year.

Previously, the limited stock of completed apartments has restricted sales, but Krass says that the record level of construction activity puts the company in a strong position for the coming quarters, when several projects currently under construction will be completed and handed over to clients.

In Estonia, Hepsor will complete 49 apartments in the Manufaktuur quarter of Tallinn this year, 27 of which have already been sold. In addition, the company plans to begin construction of the 3,551 m² Veski Centre in Peetri with 97% of its lettable premises already covered by commercial lease agreements. A further 88 homes are due to be completed in the Paevälja quarter in 2027, in collaboration with Eften Capital.

In Latvia, 103 apartments will be completed this year as part of the Dzelzavas project in Riga, 42 of which have already been sold. Hepsor is also getting ready to build 290 new homes in Riga as part of the Starta iela and Braila iela developments. In July, the company signed a preliminary agreement to purchase a registered immovable for a development project comprising 48 apartments on Meža iela, whilst over 400 homes are planned for Ganibu Dambis 17A in the Veidama district, replacing the former stock-office concept. Construction on both of these last two projects is due to begin in the second half of 2027.

In addition, Hepsor continues to seek out new registered immovables suitable for development in Estonia and Latvia. In July, the company signed an agreement to acquire the registered immovables at Meža iela 6, Riga, where it plans to build a residential complex with 48 apartments. Construction is scheduled to begin in the second half of 2027. Negotiations are ongoing for a number of other projects as well.

This is the second issue under Hepsor’s €20 million bond programme, launched in 2025, since the company was admitted to trading on the Nasdaq Tallinn main list. The base amount for the programme’s first issue was €6 million, which investors oversubscribed by placing orders worth €8.5 million.

According to Silver Kalmus, Debt Securities Area Manager at LHV, the oversubscription of the previous issue confirmed investors’ confidence in Hepsor. “The company has proven itself on the stock market, and its historic construction volume lends a clear purpose to the new issue. I encourage all investors – both new ones and those who are already familiar with Hepsor’s progress – to take part in the webinar introducing the company’s bond offer,” says Kalmus.

The webinar in Estonian will take place on 27 August 2026 from 13:00 to 14:00; register via Teams. The webinar in English will take place on 27 August 2026 from 15:00 to 16:00; register via Teams.

Once again, the offering is intended for retail and institutional investors in Estonia, Latvia and Lithuania. Hepsor is applying for its bonds to be admitted to trading on the Baltic bonds list of the Nasdaq Tallinn Stock Exchange, which will enable investors to trade them on the secondary market. The first trading day is expected to be September 14 or a date close to that. The issue is organised by LHV Pank.

Hepsor AS (www.hepsor.ee) develops residential and commercial property. The group operates in Estonia, Latvia and Canada. During our fifteen years in business, we have built over 2,000 homes and nearly 44,000 m² of commercial premises. Hepsor is the first developer in the Baltics to use several innovative engineering solutions, making buildings more energy efficient and thus more environmentally friendly. Altogether, the company’s project portfolio includes 29 developments with a total area of 195,000 m². In addition, the group is involved in five projects in Canada, where its main activity is the preparation of detailed zoning plans to secure more extensive building rights. 

This is an advertisement for securities issued by Hepsor AS and does not constitute a prospectus or an annex to one for the purposes of EU Regulation 2017/1129/EU. Investment decisions should be made solely on the basis of the prospectus approved by the Estonian Financial Supervision Authority and its supplement, which are available at hepsor.ee/volakirjad and www.fi.ee. The Financial Supervision Authority’s approval of the supplement to the prospectus does not constitute approval of the securities. The public offering will take place in Estonia, Latvia and Lithuania.