Remark from Fund Supervisor Viljar Arakas:
This week, EfTEN Actual Property Fund III AS and EfTEN Kinnisvarafond AS will maintain an Extraordinary Normal Assembly to resolve on the merger of the 2 funds into the biggest business actual property fund within the Baltics. Along with EfTEN Actual Property Fund III AS’s odd monetary ends in gentle of the deliberate merger, he additionally presents the unaudited consolidated monetary outcomes of his EfTEN Kinnisvarafond AS for the 11 months of 2022 and different key indicators. To do. We imagine that the publication of the outcomes of the 2 mixed funds previous to the shareholder assembly will give shareholders a great alternative to match the newest monetary metrics of the funds and their dynamics.
We imagine the merger of the funds is in one of the best curiosity of the shareholders of each funds. This ensures higher diversification of belongings each by enterprise phase and by area, thereby lowering the share and ensuing danger of particular person actual property investments. Out of the utmost 20 tenants of the 2 funds, there may be just one overlapping tenant. Rimi (his UKU Middle in Viljandi, RAF Centrs in Jelgava, Saules Miestas in Siauliai). The merger would additionally create a bigger market capitalization, presumably pushing the mixed fund into the ten largest firms listed on the Nasdaq Baltics.
In November, Colliers Worldwide carried out a particular valuation of each funds’ actual property investments. The outcomes of the Particular Valuation are mirrored within the monetary statements of each funds as of November 30, 2022. This may make sure that the belongings and web asset values of each funds will embody the newest outcomes by the shareholders’ assembly. Latest valuations are significantly vital, as each funds account for greater than 90% of complete belongings in funding properties. Each funds are managed by his EfTEN Capital AS and we will verify that the belongings of each funds are valued based mostly on the identical standards and related market assumptions. The newest valuation outcomes verify as soon as once more that the 2 funds behaved equally in several financial cycles. Valuations resulted in a 0.3% to 0.4% decline within the worth of each funds’ actual property portfolios in November. Additional info on the distinctive analysis carried out by Colliers Worldwide is supplied within the connected transient.
Outcomes of EfTEN Actual Property Fund III AS
Within the 11 months of this yr, EfTEN Actual Property Fund III AS generated a turnover of €12.9 million (11% greater than the identical interval final yr) and an EBITDA of 10.7 million (10%, €998,000 greater than final yr). 12 months). 37% of the fund’s EBITDA development is expounded to the addition of recent funding properties, and 63% of the expansion is expounded to raised efficiency of comparable actual property portfolios, each associated to decrease vacancies and year-end. It’s triggered. Reductions in Covid instances.
As of November 30, 2022, EfTEN Actual Property Fund III AS had a complete funding property quantity of EUR 168.5 million (93% of asset quantity) and an 11-month NOI (Internet Rental Earnings) of its property portfolio of This yr it’s 12.3 million euros. As of November 30, 2022, the fund’s property emptiness charge was 0.6%. The fee conduct of the fund’s tenants is sweet: on the finish of November, the fund’s subsidiary had solely €15,000 of excellent invoices that have been overdue by greater than 30 days.
The weighted common rate of interest on the Fund’s financial institution loans was 3.13% as at 30 November 2022. Euribor’s rise since June this yr has pushed financial institution mortgage charges up by 0.83 share factors.
This yr, EfTEN Actual Property Fund III AS generated €5.5 million in free money movement underlying dividend funds (21% greater than final yr). Contemplating the fund’s dividend coverage, the shareholder might be entitled to obtain a dividend of 87.4 euro cents (gross) per share in his first 11 months (final yr: 72.35 euro cents per share).
Along with the above, the mortgage settlement for the Laagri Selver property permits for a rise within the mortgage quantity of EUR 1 million, which may also be distributed as a dividend to shareholders in spring 2023. His 6.5% of the 11-month fund, together with funds from free money movement refinancings, make up his 6.5% of his EfTEN Actual Property Fund III AS common fairness this yr.
As at 30 November 2022, EfTEN Actual Property Fund III AS had a NAV of €20.449 and an EPRA NRV of €21.79. The fund’s NAV decreased by 0.05% in November in comparison with October, whereas EPRA’s NRV elevated by 0.13%.
Outcomes of EfTEN Kinnisvarafond AS
EfTEN Kinnisvarafond AS’s consolidated actual property portfolio contains 15 actual property investments with a complete worth of €196.15 million and one property owned by an affiliate (Resort Palace) with a 50% possession curiosity. Actual property investments accounted for 93% of the fund’s complete belongings, and the worth of associates accounted for his 1.2% of the fund’s belongings. The Fund’s complete belongings stood at EUR 210.41 million as of November 30, 2022. His EfTEN Kinnisvarafond AS consolidated NOI for the 11 months of this yr totaled €13.57 million.
EfTEN Kinnisvarafond AS’ funding portfolio had a emptiness charge of 1.9% as at 30 November 2022. As of the top of November, the subsidiary of the fund had greater than 30 days excellent invoices totaling €39,000, which is the conventional stage for the fund.
Within the 11 months of this yr, EfTEN Kinnisvarafond AS generated consolidated income of €14.8 million (3.6% increased than final yr) and EBITDA of €12.5 million (2.9% increased than final yr).
The weighted common rate of interest on financial institution loans of subsidiaries of EfTEN Kinnisvarafond AS was 3.11% as at 30 November 2022. His Euribor rise since June of this yr has elevated EfTEN Kinnisvarafond AS financial institution mortgage rates of interest by 0.8 share factors.
EfTEN Kinnisvarafond AS’s adjusted free money movement (EBITDA minus curiosity expense and mortgage funds) totaled €7.84 million this yr (€800,000 greater than final yr). EfTEN Kinnisvarafond AS’s money movement elevated by €36 million from a rise in his EBITDA from the rental of vacancies and better rental earnings, the rest associated to decrease curiosity expense and mortgage funds.
Along with the above, a mortgage settlement with Rakvere Police and Rescue Constructing, a subsidiary of EfTEN Kinnisvarafond AS, permits for a rise within the mortgage quantity of EUR 1 million, which may also be distributed as a dividend. 2023 Spring Shareholders Assembly. The fund’s free money movement over the 11 months, together with funds from refinancings, has accounted for his 7.5% of his EfTEN Kinnisvarafond AS common fairness this yr.
As at 30 November 2022, EfTEN Kinnisvarafond AS had a NAV of EUR 3.1384 and an EPRA NRV of EUR 3.1558.
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