Pro Kapital's Ambitious Growth Strategy and Financial Outlook

Management Overview

Real Estate Development Achievements

In an impressive showcase of resilience and vision, Pro Kapital has reached significant milestones in its Kalaranna development, consisting of four buildings and 146 residential units. As of now, over 55% of these units have sold, a testament to our effective construction management strategy implemented in-house, leading to considerable budget savings. The construction market showed signs of stabilization in 2024, particularly in the cost of materials; however, the landscape remains unpredictable concerning general contractors.

We have initiated several exciting projects in Kristiine City, currently under design and permit processes with local authorities. Our listings, including the awaiting building permit for "Dunte" and applications for Sammu 2/4 and Marsi 1, are expected to add approximately 33,000 square meters of gross building area, largely focused on residential units within a thriving neighborhood.

New Developments and Completions

Our ongoing Uus-Kindrali project in Kristiine City has reached full height, compromising 91 residential units, with nearly 50% sold during the initial construction phase. We anticipate completing this project by November 2025. Additionally, we are excited to announce plans for a new seven-story building with 90 units adjacent to this site, with excavation set to commence in early 2025.

In Riga, we have successfully wrapped up sales for the River Breeze Residence project, with almost all units sold and only two parking spots remaining. Our management team is now tasked with exploring a new phase for the Kliversala project, named Blue Marine, which will consist of 101 new residences and is slated to break ground in the first half of 2025, assuming the market conditions align favorably.

Progress in Other Markets

Looking towards Vilnius, our Šaltini? Namai Attico project, featuring five residential buildings with a total of 115 units, has seen the remaining units successfully sold, with only one unit pending finalization, expected to close soon. Furthermore, we are advancing work on the final stage of this development, including city villas and commercial spaces.

Our newest venture involves repurposing a former school on Naugarduko Street into a luxury residential complex with about 50 high-end apartments boasting spectacular views over the Old Town. We anticipate starting the renovation process in 2025 pending the completion of the design and permit phases.

Hotel Operations and Financial Insights

With the hotel industry rebounding, Pro Kapital’s hotel sector remains buoyant, consistently surpassing budget expectations for 2024. Our group continues to hold a significant stake in Preatoni Nuda Proprietà and its affiliate Preatoni Intermediazioni Immobiliari, expanding our foothold in the Italian real estate market.

In the early part of 2024, rising interest rates briefly caused a slowdown in investments in real estate, but this trend reversed towards the end of the year with decreasing rates leading to renewed market confidence.

Financial Performance Overview

Pro Kapital reported a total revenue of 18.2 million euros for 2024, down from 23 million euros in 2023, with the fourth quarter itself generating 7.6 million euros compared to the previous year’s 3.1 million euros. The gross profit for the year was recorded at 5.4 million euros, a decrease from 7 million euros in 2023. Profitability was also impacted, with a net result showing a loss of 2.8 million euros against a loss of 0.9 million euros the previous year.

Despite challenges over the past year, we are planning for 2025 with cautious optimism, especially noting improvements in lending conditions, which are encouraging potential buyers in the residential market.

Conclusion

Reflecting on the past years shaped by global challenges, Pro Kapital has adapted to the changing economic landscape, consequently fostering a newfound stability conducive to growth. As we strategize for the coming year, we see a bright path ahead, illuminated by a recovering real estate sector and heightened confidence from our clientele.

Ann-Kristin Kuusik
CFO
+372 614 4920
prokapital@prokapital.ee

Frequently Asked Questions

What are Pro Kapital's recent developments?

Pro Kapital is advancing several projects, including Kalaranna, Kliversala, and new developments in Kristiine City and Vilnius.

How has the hotel sector performed in 2024?

The hotel sector has seen a resurgence, consistently exceeding budget forecasts throughout the year.

What were Pro Kapital's 2024 financial results?

In 2024, Pro Kapital reported an 18.2 million euros revenue, down from 23 million euros in 2023, with losses noted in net result.

What future projects does Pro Kapital have planned?

Pro Kapital is planning new residential projects and continuing successful developments in various cities, focusing on customer confidence and market stability.

How does Pro Kapital respond to changing market conditions?

Pro Kapital adapts its strategies to market shifts while remaining optimistic about future growth, backed by solid financial planning.

About The Author

Dedicated Author and financial expert Logan Wright here, 29 years old. After earning an economics degree, I spent a number of years working in different financial industries. My great passion is enabling everyone, from any background or experience level, to understand and be literate in financial matters.

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