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Ettevõte EfTEN Real Estate Fund AS
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Kategooria Juhtkonna vaheteadaanne või kvartaalne finantsaruanne
Avaldamise aeg 13 juuli 2021 08:00:00 +0300
Manused
EREF_III_reports_monthly_06_2021.pdf
EfTEN-Real_Estate_Fund_III_VALUATION_SUMMARY_090721.pdf
EREF_III_reports_monthly_06_2021.pdf
EfTEN-Real_Estate_Fund_III_VALUATION_SUMMARY_090721.pdf
Keeleversioonid
Keel English
Valuuta
Pealkiri Comment of the fund manager of EfTEN Real Estate Fund III AS and net asset value of the share as of 30.06.2021
Tekst
Comment by Fund manager Viljar Arakas:

The  financial results  of EfTEN  Real Estate  Fund III  AS in the first half of
2021 have  been better than expected. The fund's EBITDA for the first six months
of  this year totals 4.89 million euros, which is 27% higher than the EBITDA for
the  same period last year.  By the beginning of  the year, the alarmingly rapid
spread of the coronavirus had severely limited business in Latvia and Lithuania,
and  the outlook was pessimistic.  In Estonia, significant movement restrictions
came  into force in February. Nevertheless, we  were able to keep all the fund's
assets  running successfully  - as  far as  restrictions allowed, and we applied
very strict controls on running costs.

In  terms of  management, the  first half  of the  year focused primarily on our
customers  /  tenants.  Client-specific  solutions  were  found for all kinds of
business  interruptions caused  by the  pandemic, and  the occupancy rate of the
fund's  rental space has been very good. As of the end of June, the vacancy rate
of the fund's real estate portfolio is only 0.7%. Despite the delays in payments
due  to the corona  crisis (mainly in  the Saules Miestas  shopping center), the
payment  behavior  of  tenants  has  also  been good. In connection with payment
behavior  issues, we  have also  made agreements  with the  tenants to defer the
payments  mostly until the end of August, and we have managed to keep the change
of tenants to a minimum.

It  is also worth noting the successful issue of shares in the first half of the
year  in the total amount of  15.13 million euros. A total of 4,564 subscription
orders  were submitted in the issue  and the issue was oversubscribed 3.6 times.
The  costs of share issue were again minimal for the fund's investors, amounting
to  only approximately  0.4% of the  issue volume.  The offer  was made  only in
Estonia and external advisers were minimally involved.

In the first half of 2021, we made additional investments in the fund's existing
portfolio,  mainly in  the territory  of the  Saules Miestas  shopping center in
Shiauliai,  Lithuania, where the fund's subsidiary built a separate KFC fast food
restaurant  building. As  fund managers,  we are  constantly looking for ways to
increase the value of our existing assets through additional developments. As an
additional  example of such investments, we can cite the construction of a solar
park on the roof of Laagri Selver shopping center.

In  the  first  half  of  the  year,  we  made one new investment, acquiring two
industrial  and industrial buildings in Panevezys, Lithuania, for a total of 10
million  euros. The unleveraged entry yield  of the transaction was 8.0% and the
purchase  price of the building  was 500 euros per square  meter, which is below
the  reconstruction value. The building is leased by  ADAX UAB on the basis of a
16-year  lease agreement. The  transaction was financed  by Siauliu banka in the
amount of 6 million euros.

The  successful first half year of the fund allows us to look at the second half
2021 with an optimistic look.

Financial overview

The  net asset value (NAV) of EfTEN Real Estate Fund III AS as of 30.06.2021 was
17.6021 euros, increasing by 3.6% in June. The net asset value of the EPRA share
(net  book  value  excluding  deferred  income  tax  liability and fair value of
interest  rate derivatives) as of 30.06.2021 was 18.60 euros. EPRA NAV increased
by 2.6% in June.

In June, the fund conducted its usual valuation of investment properties, during
which  the value  of the  fund's real  estate portfolio increased by 1.4% (2.020
million  euros).  The  change  in  value  was  mainly  due to improved cash flow
expectations  in Saules Miestas  and the Ulonu  office building. The increase in
the  value of other objects was mainly due to the decrease in exit yield by half
or a quarter of a percentage point.

In June, EfTEN Real Estate Fund III AS earned a total of 1,097 thousand euros in
consolidated  sales  revenue,  which  is  57 thousand  euros  more  than in May,
including  15-day rental  income from  industrial buildings  acquired in June in
Panevezys,  Lithuania.  In  addition,  due  to  the  phasing  out  of  Covid-19
restrictions  in June,  rental income  from the  Saules Miestas  shopping center
increased, which is now still on average 4% below normal levels.

The  fund's consolidated  EBITDA was  827 thousand euros  in June,  which is 26
thousand  euros  lower  than  in  May  due to the acquisition of the  industrial
buildings  in Panevezhys  and the  related expenses  and expenses  related to the
share issue.

During  the six months of this year,  the fund has earned EBITDA of 4.89 million
euros  (2020: 3.83 million euros) with sales revenue of 5.96 million euros (2020
6 months:  4.86 million euros). EBITDA has increased  by a total of 1.06 million
euros  compared  to  the  previous  year,  of  which 740 thousand euros has been
brought  about by the addition of new real estate investments. The EBITDA of the
existing  real estate  portfolio before  new investments  during the 6 months of
this  year (like-for-like)  has been  3.8 million euros  , which is 0.32 million
euros  (9%) more than in the same period last year.

The  consolidated overdue debt of the fund was 148 thousand euros as of 30 June,
decreasing  by 43 thousand  euros, compared  to May.  The overdue  debt is fully
related  to the  deferred debt  of Saules  Miestas, which  will continue in part
until the end of August.

The  consolidated cash balance  of the fund  increased by 3.574 million euros in
June  and was 9.9 million euros  as of 30.06.2021. In June, we repaid the parent
company's  bank loan of  3.1 million euros ,  that was taken  for Pirita elderly
home  investment in December 2020. Also, we partly repaid the EfTEN Riga Airport
SIA  bank loan of 0.9 million euros from the funds received from the share issue
to  comply  with  bank  loan  covenants  and  made  an  investment  in Panevezys
industrial  buildings, which required 4,011 thousand euros  of equity. As of the
end of June, the fund has 7.1 million euros of uninvested capital.

The  consolidated equity  of EfTEN  Real Estate  Fund III  AS was 89.287 million
euros as of 30.06.2021 (31.12.2020: 71.483 million euros).

Marilin Hein
CFO
Phone 655 9515
E-mail: marilin.hein@eften.ee (mailto:marilin.hein@eften.ee)