Market announcement

Title

The net value of EfTEN Real Estate Fund III AS shares as of 30.11.2022

Message

Comment from the fund manager, Viljar Arakas:

During  this week, the extraordinary general  meetings of EfTEN Real Estate Fund
III  AS and EfTEN Kinnisvarafond AS are  taking place, deciding on the merger of
the two funds into the largest commercial real estate fund in the Baltic States.
In  light of the planned merger, in addition to the regular financial results of
EfTEN  Real  Estate  Fund  III  AS,  we  also present the consolidated unaudited
financial  results of  EfTEN Kinnisvarafond  AS for  the 11 months of 2022 along
with  other important  metrics. We  believe that  publishing the results of both
funds  to  be  merged  before  the  general  meetings  gives shareholders a good
opportunity  to compare the  latest financial indicators  of the funds and their
dynamics.

We  are convinced that  the merger of  the funds is  in the best interest of the
shareholders  of both funds. It ensures a better diversification of assets, both
by  business segments  and geographically,  thereby reducing  the share  of each
individual  property investment  and the  resulting risks.  Among the 20 largest
tenants  of the  two funds,  there is  only one  overlapping tenant  - Rimi (UKU
Centre  in Viljandi, RAF Centrs in Jelgava  and Saules Miestas in Shiauliai). The
merger  will also create  a larger market  capitalization, which presumably will
lift the merged fund to the ten largest companies listed in the Nasdaq Baltics.

In  November, Colliers International conducted an extraordinary valuation of the
property  investments of both funds. The results of the extraordinary valuations
are  reflected in the financial statements  of both funds as of 30.11.2022. This
in  turn ensures that  by the time  of the general  meetings, the assets and net
asset  value  of  both  funds  will  include  the  most  up-to-date  results. As
investment  properties account  for more  than 90% of  the total  assets in both
funds,  the most recent valuation is particularly important. The manager of both
funds  is EfTEN Capital AS, and we can confirm that the assets of both funds are
valued  on the same  basis and based  on similar market  assumptions. The latest
valuation results confirm once again that the two funds have behaved in the same
way  in different economic cycles  - the value of  the real estate portfolios of
both funds decreased by 0.3%-0.4% in November as a result of the valuation. More
detailed  information about the extraordinary valuations carried out by Colliers
International can be found in the attached summaries.

Financial results of EfTEN Real Estate Fund III AS

In  the 11 months of this  year, EfTEN Real Estate  Fund III AS has earned 12.9
million  euros in sales revenue  (11% more than at  the same time last year) and
10.7 million  euros in EBITDA (10% and  998 thousand euros more than last year).
37% of  the fund's EBITDA  growth is related  to the addition  of new investment
properties, and 63% of the growth comes from the better performance of the like-
for-like  real estate portfolio, both in connection with the reduced vacancy and
the end of Covid-era discounts.

As  of 30.11.2022, the volume of investment properties of EfTEN Real Estate Fund
III  AS totals 168.5 million  euros (93% of  the volume of  assets), and the NOI
(net  rental income) of the real estate portfolio for the 11 months of this year
is  12.3 million euros. The vacancy rate of the fund's properties was 0.6% as of
30.11.2022. The  payment behavior of the tenants of the fund is good - as of the
end  of November, the  fund's subsidiaries had  only 15 thousand euros of unpaid
invoices that exceeded more than 30 days their due dates.

The  weighted average  interest rate  of the  fund's bank  loans was 3.13% as of
30.11.2022. Due  to the increase in Euribor since June this year, interest rates
on bank loans have increased by 0.83 percentage points.

This  year, EfTEN Real Estate  Fund III AS has  earned 5.5 million euros in free
cash  flow, which is the  basis of dividend payments  (21% more than last year).
Considering  the fund's  dividend policy,  shareholders could  be paid 87.4 euro
cents (gross) dividends per share for the first 11 months (last year: 72.35 euro
cents per share).

In  addition to the above, due to  the loan agreement of Laagri Selver property,
it  is possible to  increase the loan  amount by 1 million  euros, which we also
plan  to distribute as dividends to the  shareholders in the spring of 2023. The
free  cash flow of the fund for 11 months, including the funds from refinancing,
constitutes  6.5% of the average equity capital of EfTEN Real Estate Fund III AS
this year.

As  of 30.11.2022, the NAV of EfTEN Real Estate 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
compared to October, and EPRA's NRV increased by 0.13%.

Financial results of EfTEN Kinnisvarafond AS

In  the consolidated real estate portfolio of EfTEN Kinnisvarafond AS, there are
15 property  investments  with  a  total  value  of 196.15 million euros and one
property  owned by  an affiliated  company with  a 50% ownership (Hotel Palace).
Property  investments make up a total of 93% of the fund's assets, and the value
of  the associated company makes up 1.2% of  the fund's assets. The total volume
of the fund's assets was 210.41 million euros as of 30.11.2022. The consolidated
NOI  of EfTEN  Kinnisvarafond AS  for the  11 months of  this year is a total of
13.57 million euros.

The vacancy rate of EfTEN Kinnisvarafond AS' investment portfolio was 1.9% as of
30.11.2022. As  of  the  end  of  November,  the fund's subsidiaries have unpaid
invoices  for more than 30 days totaling  39 thousand euros, which is the fund's
usual level.

In  the 11 months of this year,  EfTEN Kinnisvarafond AS has earned consolidated
sales  revenue of 14.8 million euros (3.6% more than last year) and 12.5 million
euros of EBITDA (2.9% more than last year).

The  weighted  average  interest  rate  of  bank  loans of subsidiaries of EfTEN
Kinnisvarafond  AS was  3.11% as of  30.11.2022. Due to  the increase in Euribor
since June of this year, interest rates on bank loans of EfTEN Kinnisvarafond AS
have increased by 0.8 percentage points.

The  adjusted free cash  flow of EfTEN  Kinnisvarafond AS (EBITDA minus interest
expense  and loan  payments) is  a total  of 7.84 million  euros this  year (0.8
million euros more than last year). EfTEN Kinnisvarafond AS' cash flow has grown
by  0.36 million  euros  from  the  increase  in  EBITDA  due to the renting out
vacancies  and due to the increase in rental  income, and the rest is related to
lower interest expenses and loan payments.

In  addition to the above,  due to the loan  agreement of the Rakvere Police and
Rescue  Building,  which  is  a  subsidiary  of  EfTEN  Kinnisvarafond AS, it is
possible  to increase the loan amount by  1 million euros, which we also plan to
distribute  as dividends to  the shareholders in  the spring of 2023. . The free
cash  flow  of  the  fund  for  11 months, including the funds from refinancing,
constitutes  7.5% of the average equity capital  of EfTEN Kinnisvarafond AS this
year.

As  of 30.11.2022, the NAV  of EfTEN Kinnisvarafond  AS was 3.1384 euros and the
NRV of EPRA was 3.1558 euros.

Marilin Hein
CFO
Phone +372 6559 515
E-mail: [email protected] (mailto:[email protected])