Remark from the fund supervisor, Viljar Arakas:
Throughout this week, the extraordinary basic conferences of EfTEN Actual Property Fund III AS and EfTEN Kinnisvarafond AS are happening, deciding on the merger of the 2 funds into the most important industrial actual property fund within the Baltic States. In mild of the deliberate merger, along with the common monetary outcomes of EfTEN Actual Property Fund III AS, we additionally current the consolidated unaudited monetary outcomes of EfTEN Kinnisvarafond AS for the 11 months of 2022 together with different vital metrics. We imagine that publishing the outcomes of each funds to be merged earlier than the overall conferences offers shareholders a superb alternative to match the newest monetary indicators of the funds and their dynamics.
We’re satisfied that the merger of the funds is in the very best curiosity of the shareholders of each funds. It ensures a greater diversification of property, each by enterprise segments and geographically, thereby lowering the share of every particular person property funding and the ensuing dangers. Among the many 20 largest tenants of the 2 funds, there is just one overlapping tenant – Rimi (UKU Centre in Viljandi, RAF Centrs in Jelgava and Saules Miestas in Šiauliai). The merger will even create a bigger market capitalization, which presumably will raise the merged fund to the ten largest firms listed within the Nasdaq Baltics.
In November, Colliers Worldwide performed a rare valuation of the property investments of each funds. The outcomes of the extraordinary valuations are mirrored within the monetary statements of each funds as of 30.11.2022. This in flip ensures that by the point of the overall conferences, the property and web asset worth of each funds will embody essentially the most up-to-date outcomes. As funding properties account for greater than 90% of the entire property in each funds, the latest valuation is especially vital. The supervisor of each funds is EfTEN Capital AS, and we are able to verify that the property of each funds are valued on the identical foundation and based mostly on comparable market assumptions. The newest valuation outcomes verify as soon as once more that the 2 funds have behaved in the identical method in several financial cycles – the worth of the true property portfolios of each funds decreased by 0.3%-0.4% in November because of the valuation. Extra detailed details about the extraordinary valuations carried out by Colliers Worldwide could be discovered within the hooked up summaries.
Monetary outcomes of EfTEN Actual Property Fund III AS
Within the 11 months of this 12 months, EfTEN Actual Property Fund III AS has earned 12.9 million euros in gross sales income (11% greater than on the similar time final 12 months) and 10.7 million euros in EBITDA (10% and 998 thousand euros greater than final 12 months). 37% of the fund’s EBITDA development is expounded to the addition of recent funding properties, and 63% of the expansion comes from the higher efficiency of the like-for-like actual property portfolio, each in reference to the decreased emptiness and the tip of Covid-era reductions.
As of 30.11.2022, the amount of funding properties of EfTEN Actual Property Fund III AS totals 168.5 million euros (93% of the amount of property), and the NOI (web rental revenue) of the true property portfolio for the 11 months of this 12 months is 12.3 million euros. The emptiness fee of the fund’s properties was 0.6% as of 30.11.2022. The fee habits of the tenants of the fund is nice – as of the tip of November, the fund’s subsidiaries had solely 15 thousand euros of unpaid invoices that exceeded greater than 30 days their due dates.
The weighted common rate of interest of the fund’s financial institution loans was 3.13% as of 30.11.2022. As a result of enhance in Euribor since June this 12 months, rates of interest on financial institution loans have elevated by 0.83 proportion factors.
This 12 months, EfTEN Actual Property Fund III AS has earned 5.5 million euros in free money circulation, which is the premise of dividend funds (21% greater than final 12 months). Contemplating the fund’s dividend coverage, shareholders may very well be paid 87.4 euro cents (gross) dividends per share for the primary 11 months (final 12 months: 72.35 euro cents per share).
Along with the above, because of the mortgage settlement of Laagri Selver property, it’s potential to extend the mortgage quantity by 1 million euros, which we additionally plan to distribute as dividends to the shareholders within the spring of 2023. The free money circulation of the fund for 11 months, together with the funds from refinancing, constitutes 6.5% of the common fairness capital of EfTEN Actual Property Fund III AS this 12 months.
As of 30.11.2022, the NAV of EfTEN Actual Property Fund III AS was 20.449 euros and the EPRA NRV was 21.79 euros. The fund’s NAV decreased by 0.05% in November in comparison with October, and EPRA’s NRV elevated by 0.13%.
Monetary outcomes of EfTEN Kinnisvarafond AS
Within the consolidated actual property portfolio of EfTEN Kinnisvarafond AS, there are 15 property investments with a complete worth of 196.15 million euros and one property owned by an affiliated firm with a 50% possession (Lodge Palace). Property investments make up a complete of 93% of the fund’s property, and the worth of the related firm makes up 1.2% of the fund’s property. The entire quantity of the fund’s property was 210.41 million euros as of 30.11.2022. The consolidated NOI of EfTEN Kinnisvarafond AS for the 11 months of this 12 months is a complete of 13.57 million euros.
The emptiness fee of EfTEN Kinnisvarafond AS’ funding portfolio was 1.9% as of 30.11.2022. As of the tip of November, the fund’s subsidiaries have unpaid invoices for greater than 30 days totaling 39 thousand euros, which is the fund’s common degree.
Within the 11 months of this 12 months, EfTEN Kinnisvarafond AS has earned consolidated gross sales income of 14.8 million euros (3.6% greater than final 12 months) and 12.5 million euros of EBITDA (2.9% greater than final 12 months).
The weighted common rate of interest of financial institution loans of subsidiaries of EfTEN Kinnisvarafond AS was 3.11% as of 30.11.2022. As a result of enhance in Euribor since June of this 12 months, rates of interest on financial institution loans of EfTEN Kinnisvarafond AS have elevated by 0.8 proportion factors.
The adjusted free money circulation of EfTEN Kinnisvarafond AS (EBITDA minus curiosity expense and mortgage funds) is a complete of seven.84 million euros this 12 months (0.8 million euros greater than final 12 months). EfTEN Kinnisvarafond AS’ money circulation has grown by 0.36 million euros from the rise in EBITDA because of the renting out vacancies and because of the enhance in rental revenue, and the remainder is expounded to decrease curiosity bills and mortgage funds.
Along with the above, because of the mortgage settlement of the Rakvere Police and Rescue Constructing, which is a subsidiary of EfTEN Kinnisvarafond AS, it’s potential to extend the mortgage quantity by 1 million euros, which we additionally plan to distribute as dividends to the shareholders within the spring of 2023. . The free money circulation of the fund for 11 months, together with the funds from refinancing, constitutes 7.5% of the common fairness capital of EfTEN Kinnisvarafond AS this 12 months.
As of 30.11.2022, the NAV of EfTEN Kinnisvarafond AS was 3.1384 euros and the NRV of EPRA was 3.1558 euros.
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