Rental income of EfTEN Capital funds grew by 27% year-on-year
In the first half of 2022, the rental income of EfTEN Capital’s seven funds amounted to 36 million euros, a growth of 27% year-on-year. The value of all assets under management by EfTEN Capital now amounts to nearly 1.1 billion euros.
In the first half of this year, EfTEN funds earned a net profit of 34 million euros, and as of the end of June, the annual return on equity earned for investors was 13%.
“The results of EfTEN’s portfolio that consist of Baltic commercial real estate remain on a growth path. At the turn of the year, the value of assets exceeded the billion-euro mark and has continued to grow, both due to the increase in real estate values and the acquisition of commercial real estate objects,” said Viljar Arakas, CEO of EfTEN Capital.
Arakas added that the assets managed by EfTEN Capital are performing very well: “At times, even we are surprised by how much interest tenants show towards our properties. For example, despite the summer season, in early August we signed new rental agreements for our office buildings in Lithuania, where the rent level is significantly higher than before.”
In May, EfTEN Capital listed its second fund on the Tallinn Stock Exchange – EfTEN United Property Fund – which raised 7 million euros from investors.
“For some time, we have been preparing for the possibility of difficult times in the real estate sector. The leverage in all funds is below 50%, and we have been keeping the capital raised during the last six months uninvested (including almost 10 million euros in the EfTEN United Property Fund), pending the emergence of more lucrative assets to buy. When assessing the current situation, it is likely that we will not make any new major purchases in the coming months. At the moment, real estate sellers still expect that interest rate levels will remain close to zero and that the economy will not cool down in the autumn. At EfTEN, we are clearly more pessimistic regarding the overall economic outlook. Latvia and Lithuania already entered the recession in the second quarter in quarter-on-quarter comparison. The rise in energy prices and interest rates, as well as the slowdown in economic growth in Europe, will certainly have an impact on Estonia as well,” Arakas said.