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First half of year 2019 financial results of the EfTEN Real Estate Funds
The total value of real estate investments of the four real estate funds managed by EfTEN Capital was 617 million euros as of 30. June 2019, which grew by 2% in the first half of year 2019. The total equity of the funds was 336 million euros (2018: 323 million euros) and it grew 4% in the first six month of the year. Total net profit of the three funds reached to 17,3 million euros (2018: 15,3 million). The first three funds paid as dividends in total 20,5 million euros. EfTEN Capital is managing 44 commercial properties with more than 1 100 tenants.
The financial results of all four real estate funds meet management expectations. Our first two funds, EfTEN Kinnisvarafond AS and EfTEN Kinnisvarafond II AS have ended its investment period and are currently in holding phase. The most important event of the first half of year 2019 was the second public offering of the shares of the EfTEN Real Estate Fund III AS, which is listed in Nasdaq Baltic Main List. In total 16 million euros of new equity was raised by SPO. The total demand from investors reached 49 million euros – the share offering was oversubscribed by 3,2 times. Other notable development was the fact that EBRD joined as the investor of our newest, EfTEN Real Estate Fund 4.
Thanks to the shrinking competition and the anti-money laundering scandals among the Scandinavian banks the terms of new corporate lending have worsened for companies. This development will hinder the future rise of real estate valuations in the Baltics and should offer suitable investment opportunities into new real estate assets. EfTEN funds are well capitalized to use those opportunities and we will continue our investment activities in the second half of the year. In July EfTEN Real Estate Fund 4 acquired in the second largest city in Lithuania, in Kaunas, River Hall office building together with River Mall retail property where one of the largest tenant is IKEA.
Below short financial overview of 6 months of 2019 of our four real estate funds:
| EfTEN Kinnisvarafond AS | |
| Fund’s year of founding: | 2009 |
| Gross asset volume: | EUR 196,8 million |
| Number of investments: | 19 |
| Owner’s equity: | EUR 101,7 million |
| Sales revenue: | EUR 7,9 million (2018 – EUR 7,7 million) |
| Net profit: | EUR 3,9 million (2018 – EUR 4,5 million) |
| ROIC (return on invested capital)1: | 18,1% |
| 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 | |
| Fund’s year of founding: | 2015 |
| Gross asset volume: | EUR 244,3 million |
| Number of investments: | 6 |
| Owner’s equity: | EUR 136,8 million |
| Sales revenue: | EUR 14,6 million (2018 – EUR 13,9 million) |
| Net profit: | EUR 6,6 million (2018 – EUR 7,6 million) |
| ROIC (return on invested capital)1: | 13,6% |
| 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 | |
| Fund’s year of founding: | 2015 |
| Gross asset volume: | EUR 109,7 million |
| Number of investments: | 11 |
| Owner’s equity: | EUR 67,1 million |
| Sales revenue: | EUR 4,6 million (2018 – EUR 4,1 million) |
| Net profit: | EUR 3,7 million (2018 – EUR 3,2 million) |
| ROIC (return on invested capital)1: | 18,4% |
| Status of the fund: | active investment phase |
1 ROIC is the total annual rate of return on equity invested in the fund
| Usaldusfond EfTEN Real Estate Fund 4 |
|
| Fund’s year of founding: | 2018 |
| Gross asset volume: | EUR 65,9 million |
| Number of investments: | 2 |
| Owner’s equity: | EUR 30,4 million |
| Sales revenue: | EUR 2,9 million |
| Net profit: | EUR 3,2 million |
| Status of the fund: | active investment phase |