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EfTEN Capital’s assets under management reached EUR 700 million
As of December 31, 2018 EfTEN real estate funds gross asset value totalled EUR 650 million. Adding to the value of the funds the gross assets of private mandates and smaller real estate portfolios managed by EfTEN Capital group, EfTEN Capital´s total assets under management reached EUR 700 million, which marks a new record. Below is an overview of the initial, unaudited financial results of all funds.
EfTEN Kinnisvarafond AS
During the past financial year, the fund successfully completed the enlargement of Viljandi UKU Center and the RAF Center in Jelgava. Both centers are covered with lease contracts and are fully opened to visitors. In the first half of the year of 2018, the fund made its tenth successful individual asset exit by selling Laki 24 office building in Tallinn. In the second half of the year, the fund’s investors decided to extend the fund’s term by 5 years until 2027. In addition to the annual dividend payment, the share capital of the fund will be reduced by 14% compared to the paid-in share capital. In total, the fund plans to pay to shareholders dividends in year 2019, and through the reduction of the share capital 25% compared to the fund´s paid-in share capital.
EfTEN Kinnisvarafond AS
| Fund’s year of founding: | 2009 |
| Gross asset volume: | EUR 215,2 million |
| Number of investments: | 18 |
| Owner’s equity: | EUR 105,3 million |
| Sales revenue: | EUR 15,6 million (2017 – EUR 16 million) |
| Net profit: | EUR 10,8 million (2017 – EUR 9,5 million) |
| ROIC (return on invested capital)1: | 17,8 % |
| Status of the fund: | investment period has ended; holding phase |
1 ROIC is the total annual rate of return on equity invested in the fund
EfTEN Kinnisvarafond II AS
In 2018, the fund made its last single investment by acquiring Marienthal business center in Mustamäe, Tallinn. At the end of the year, the fund´s portfolio includes 6 individual investments with a total fair value of EUR 243 million. As the fund has reached its target size, the fund will no longer acquire new objects and the fund entered the holding phase. According to the Fund’s dividend policy (dividends form 80% of annual free cash flow, including taxes), the fund plans to pay a gross dividend EUR 10.2 million, which is 10.5% compared to the paid-in equity.
EfTEN Kinnisvarafond II AS
| Fund’s year of founding: | 2015 |
| Gross asset volume: | EUR 263,2 million |
| Number of investments: | 6 |
| Owner’s equity: | EUR 138,3 million |
| Sales revenue: | EUR 29,2 million (2017 – EUR 24,4 million) |
| Net profit: | EUR 14,4 million (2017 – EUR 19,9 million) |
| ROIC (return on invested capital)1: | 15,2% |
| Status of the fund: | investment period has ended; holding phase |
1 ROIC is the total annual rate of return on equity invested in the fund
EfTEN Real Estate Fund III AS
The most important events of the year 2018 for EfTEN Real Estate Fund III AS were the acquisition of Evolution office building in Vilnius, the completion of the DSV Riga logistics center and starting the construction of the Hortes garden center in Tähesaju business district, Tallinn. In the last month of the year, the fund signed a contract to purchase via sale-and-leaseback transaction Renault sales and service center rented by ABC Motor. The transaction will be completed in January 2019. In the spring of 2019, the fund plans to issue additional new shares via public offering to finance the acquisition of new investments planned for the future. The fund successfully completed its first full year on the Nasdaq Baltic Main List as publicly listed company. The Fund will continue its investment activities based on an opportunistic and value-adding investment strategy. After listing the fund is termless, evergreen.
EfTEN Real Estate Fund III AS
| Fund’s year of founding: | 2015 |
| Gross asset volume: | EUR 108,5 million |
| Number of investments: | 10 |
| Owner’s equity: | EUR 50,5 million |
| Sales revenue: | EUR 8,7 million (2017 – EUR 7,3 million) |
| Net profit: | EUR 6,3 million (2017 – EUR 6,5 million) |
| ROIC (return on invested capital)1: | 17,6% |
| Status of the fund: | active investment phase |
1 ROIC is the total annual rate of return on equity invested in the fund
EfTEN Real Estate Fund 4
Since EfTEN Kinnisvarafond II AS´s investment period has ended, EfTEN Capital established a new Baltic commercial real estate fund with core and core plus investment strategy, EfTEN Real Estate Fund 4. The fund manager raised EUR 95 million of equity in the first closing, which will be invested in the Baltic commercial real estate during the 5-year investment period. At the beginning of December 2018, the fund completed the acquisition of two first investment objects – a modern office complex in Tallinn, Kadrioru Business Center, and a RYO shopping center in Panevežys. As the fund started its business activity only in December 2018, we will publish the fund´s more detailed financial results in the first half of 2019.
Fund manager’s comment:
We are satisfied with the financial results of all four funds in year 2018. We made a total of EUR 100 million in new real estate investments. In addition, we completed the expansion work of the RAF Center and the UKU Center – both shopping centers have been developed by EfTEN Capital from scratch. We hoped to see more new investment opportunities in the opportunistic and value-added strategy that we are pursuing through EfTEN Real Estate Fund III AS, but unfortunately the market did not offer them enough. We believe that the expected cooling of Baltic real estate market in 2019 will create new investment opportunities, that we are planning to use through our third and fourth funds, which are in active investment phase. We continue our conservative investment policy, which is the basis for long-term success.
Viljar Arakas
EfTEN Capital, CEO
Fund manager of EfTEN real estate funds