Management Report and Real Estate Progress
Real Estate Development
In the recent quarter, construction efforts have been robust across multiple projects, particularly at the Uus-Kindrali site in Tallinn. The White Building, featuring 91 residential units, has seen significant progress. Most apartments are close to completion, with final inspections about to commence, and buyer occupancy expected to increase. By quarter's end, approximately 73.1% of this project has been sold, showcasing a promising sell-out rate.
Additionally, a new seven-storey building with 90 units is under construction adjacent to the White Building. Current progress indicates the prefabricated concrete elements have reached the top floor, with roof installations anticipated early next month. This building is set to be completed by late 2026. The design and building permit processes for four more projects in Kristiine City are also advancing, projected to add around 35,000 square meters of Gross Building Area (GBA), largely residential, which will further enhance our urban footprint.
By the end of the third quarter, the final phase of the Kalaranna development, comprising 146 units, is nearing completion with the sell-out currently at about 60.9%. Marketing efforts for unsold units are being amplified to boost sales.
Development in Riga and Vilnius
Over in Riga, after the successful sale of units in River Breeze Residence, we have kicked off the Blue Marine project in Kliversala. This new endeavor, which will offer 96 residential units, is underway as construction works commenced earlier this quarter. Key initial tasks, like installing retaining wall piles and ongoing excavation, have already been achieved. Sales activities are front and center, as we also work to secure construction financing from local banks.
Meanwhile, progress continues in Vilnius, particularly at the Šaltini? Namai Attico project, where we are at nearly 43% sell-out on the city villas and just above 21% for the commercial space, while maximizing record prices in the local real estate market. We are also repurposing a former school on Naugarduko Street into an upscale residential complex, featuring approximately 50 luxury apartments, with permits anticipated by year-end.
Hotel Operations Outlook
This past quarter’s hotel performance has aligned reasonably well with our expectations, albeit slightly under the initial budgeted targets. Individual leisure bookings drove demand notably in July and August, but September witnessed decreased occupancy due to weaker corporate and MICE bookings. Despite this shortfall, we maintain an optimistic outlook as the year progresses, even as we navigate current softness in corporate demand.
Operations Beyond Our Core Focus
In Italy, operations remain steady through Preatoni Nuda Proprietà (PNP) and Preatoni Intermediazioni Immobiliari (PII). Despite broader market challenges, the innovative bare ownership investment model continues to gain traction and attention from both private and institutional investors. PNP has successfully reinforced its market presence and broadened partnership opportunities. As market conditions stabilize, growth in brand visibility and transactional volume is expected through 2025.
Financial Overview
During the initial nine months of 2025, Pro Kapital's Group reported total revenues reaching EUR 34.3 million, a significant increase from EUR 10.6 million during the same timeframe in 2024. The realization of revenue in real estate sales hinges on the completion of units, thus reflecting the dynamic construction cycles. This past quarter netted EUR 5.7 million in revenue compared to EUR 3.7 million in the previous year.
With sales progressing in Kalaranna, actual revenues have increased as delivered apartments concluded their phases in the previously slower provincial markets of Riga and Vilnius. Gross profits surged to EUR 11.9 million for the initial nine months in 2025, a marked rise from EUR 2.9 million in 2024. The operating results transitioned to a profit of EUR 7.7 million compared to a loss of EUR 1.7 million during the previous year.
Cash generated from operations stands at EUR 6.8 million against EUR 10.0 million used in 2024, indicating swift recovery trajectories. The emphasis remains on maintaining our liquidity while executing strategic initiatives amid evolving market landscapes.
Conclusion and Forward-Looking Strategy
The concluding segments of 2025 promise stability intertwined with potential growth. Despite external bureaucratic challenges and market uncertainties, our focus remains on constructive momentum and ongoing project deliveries. Our commitment to expand our footprint in urban locales like Tallinn, Riga, and Vilnius sets a foundation for sustainable growth. I'm gratified by our team’s efforts, which resonate deeply with our long-term strategic vision.
Thank you to all our stakeholders and team members for your unwavering support and trust as we navigate the future together towards excellence.
Ann-Kristin Kuusik
CFO
+372 614 4920
prokapital@prokapital.ee
Frequently Asked Questions
What key financial metrics were reported for the first nine months?
For the first nine months of 2025, revenues reached EUR 34.3 million, with gross profits at EUR 11.9 million and operating profits at EUR 7.7 million.
What new projects are underway within the real estate segment?
Key projects include the Blue Marine project in Riga and the development of upscale residential units in Vilnius, along with several new developments in Tallinn.
How have hotel operations performed in the recent quarter?
Hotel operations met expectations during leisure-heavy months but saw a decline in September due to weaker corporate demand. However, the outlook remains optimistic.
What is the outlook for operations in Italy?
Italian operations are steady, and the bare ownership model is gaining traction, garnering renewed interest amidst market normalization.
What improvements are seen in the construction progress across projects?
Construction in all locations is on schedule, with substantial completions anticipated in the upcoming period, further solidifying Pro Kapital's market position.
