Strong Performance Amid Challenges
Despite facing a challenging economic landscape, EfTEN Real Estate Fund AS proudly reported an increase in both total rental income and EBITDA for the year. The operational success can be attributed to the fund's strategic portfolio expansion, which now includes two new logistics properties, with plans to further diversify into the care home segment. As a dividend-focused entity, EfTEN Real Estate Fund AS aims to distribute dividends of €1.10 per share for the current year, which translates to an attractive 5.7% yield based on recent closing share prices.
Improving Leverage and Financial Strategy
The management team is committed to optimizing the leverage of investment properties, especially as the current loan-to-value (LTV) ratio sits notably below established financing policy guidelines. While the average leverage ratio for real estate funds in Europe hovers around 50% of asset market value, EfTEN Real Estate Fund AS is maintaining a conservative portfolio-wide LTV of 40% as of the latest reporting.
Financial Overview: Consistent Growth
On point with their unaudited financial results, EfTEN Real Estate Fund AS achieved a consolidated rental income of €31.079 million, slightly up from €30.6 million in the preceding year. EBITDA saw a modest increase, amounting to €26.454 million from €26.143 million last year, marking a year-over-year growth of 1.5% and 1.2%, respectively. Furthermore, the fund's EBITDA comfortably exceeded its interest expenses by a factor of 3.0 times, indicating robust income generation despite rising financial costs.
Investments to Foster Growth
During 2024, the fund was proactive in making significant investments, totaling €12.050 million in acquiring logistics centers in Tallinn, while also advancing care home projects with an investment of €4.467 million. Additionally, €4.931 million was earmarked for various other projects within the real estate portfolio.
Vacancy Rates and Operational Efficiency
The consolidated vacancy rate remained low at 2.6%, consistent with the previous year's figures. The office segment faced higher vacancy challenges at 11.3%, in contrast to the logistics sector, which maintained an impressive 1.0% vacancy rate, alongside the retail segment echoing a meager 0.5%.
Adjusted Cash Flow and Dividend Strategy
In terms of cash flow, Ej nærheten Real Estate Fund AS generated an adjusted figure of €11.108 million, allowing for a preliminary gross dividend projection of €0.7768 per share based on the existing dividend policy. With ongoing plans to refinance several bank loans in 2025, the fund anticipates that enhanced operational cash flows may lead to increased dividend distributions, potentially reaching €1.10 per share, net of costs.
December Results and Insights
December 2024 marked a successful month, with the fund earning €2.861 million in rental income, reflecting positive month-to-month growth. The fund's EBITDA for December stood at €2.448 million. This positive trend in rental income was primarily attributed to higher turnover rents from various shopping center operations.
Annual Valuation and Share Issuance
The annual valuation by independent appraisers, Colliers International, revealed a €831 thousand increase in the fair market value of the fund's properties, reinforcing the brand's stability. Furthermore, the fund issued 620,544 new shares at €19 each, successfully raising €11.790 million to support its financial positioning.
Net Asset Value Insights
As of December 31, 2024, EfTEN Real Estate Fund AS reported a net asset value (NAV) of €20.3729 per share, with the EPRA NRV slightly higher at €21.2213 per share. Notably, several one-off factors influenced the NAV, including the effects of a share issue below the NAV and associated issuance costs. Excluding these factors, the net asset value would have actually increased by 0.8% during December, reflecting underlying asset growth.
Marilin Hein
Chief Financial Officer
Tel. +372 6559 515
E-mail: marilin.hein@eften.ee
Frequently Asked Questions
What is the focus of EfTEN Real Estate Fund AS?
EfTEN Real Estate Fund AS primarily focuses on investing in real estate properties that generate rental income, particularly in logistics and care home sectors.
How much did EfTEN Real Estate Fund AS earn in rental income for 2024?
The fund generated €31.079 million in consolidated rental income for 2024.
What is the intended dividend for shareholders in 2024?
EfTEN Real Estate Fund AS plans to distribute dividends of €1.10 per share, corresponding to a 5.7% yield based on the closing share price.
What was the net asset value (NAV) per share as of December 31, 2024?
The NAV per share was reported at €20.3729, with an EPRA NRV of €21.2213 per share.
How does EfTEN approach its investment strategy?
EfTEN Real Estate Fund AS employs a strategic investment approach, focusing on acquiring income-generating properties while maintaining a conservative leverage strategy.
