EfTEN United Property Fund earned a net loss of 16 thousand euros in the 3rd quarter of 2023, and 87 thousand euros in 9 months of 2023. The loss was due to the market value change in listed EfTEN Real Estate Funs AS shares, which fell by almost 6% during the Q3. In a situation where the balance sheet net asset value of the EfTEN Real Estate Fund AS shares would be used as a basis for determining the net value of the EfTEN United Property Fund, the fund would have earned 330 thousand euros of net profit in the 3rd quarter.
Due to the low level of financial leverage and relatively large uninvested capital, the increase in interest rates has had a smaller negative impact on the EfTEN United Property Fund compared to many other European and Baltic investment property funds. With the persistent weak economic activity in the Eurozone, business cycle recovery in the Baltic countries is unlikely in the coming quarters. In such a situation, maintaining the occupancy and rental income levels are becoming more and more important in the commercial real estate sector. Finding new tenants and retaining existing ones is increasingly time-consuming and costly (often requiring reconstruction of objects, etc.). Various office spaces are under the greatest pressure, where the increasing trend of working from home keeps demand at its lowest level in recent years. EfTEN United Property Fund’s portfolio is spread across 45 commercial investment property buildings based on the so-called look-through principle (in addition, the Fund has invested in the development of the Uus-Järveküla residential district and in three rental houses through the EfTEN Residential Fund), the vacancy rate of which was less than 5% at the end of the third quarter.
In the III quarter of 2023, EfTEN United Property Fund did not make new investments and continued to manage the existing investment portfolio. In the development of the Uus-Järveküla residential district, which is owned by the Fund’s subsidiary, customers continued to show great interest in the semi-detached houses that went on sale in May and June in the third quarter. As of the end of September, customers had booked 11 of the 16 semi-detached houses on sale. The completion of the 86 terraced houses in the first stage of the development is planned for the end of the IV quarter and the beginning of the I quarter.
The volume of assets of EfTEN United Property Fund as of 30.09.2023 is 26,355 thousand euros (31.12.2022: 27,472 thousand euros), of which, as of the end of September, 79% are long-term investments (31.12.2022: 67%).
As of 30.09.2023, EfTEN United Property Fund has raised a total of 25.466 million euros of capital, of which 6.8 million euros are uninvested as of 9 months of 2023. All existing investments are performing well and do not currently appear to require higher capital injections than usual.
Statement of the comprehensive income
| 3rd quarter | 9 months | |||
| 2023 | 2022 | 2023 | 2022 | |
| € thousand | ||||
| INCOME | ||||
| Interest income | 143 | 80 | 384 | 220 |
| Dividend income | 0 | 0 | 352 | 212 |
| Net profit / loss from assets recognised in fair value through profit or loss | -105 | 281 | -634 | 909 |
| Investments in subsidiaries | 46 | 23 | -30 | 182 |
| Underlying funds | -151 | 258 | -604 | 726 |
| Total income | 38 | 361 | 102 | 1 341 |
| COSTS | ||||
| Operating expenses | ||||
| Management fee | -31 | -25 | -85 | -68 |
| Costs of administering the Fund | -23 | -22 | -104 | -88 |
| Other operating expenses | 0 | -6 | 0 | -31 |
| Total operating expenses | -54 | -53 | -189 | -186 |
| Profit / loss for the period | -16 | 308 | -87 | 1 155 |
| Total profit / loss for the period | -16 | 308 | -87 | 1 155 |
| Ordinary and diluted earnings / loss per share (EUR) | -0,01 | 0,12 | -0,04 | 0,56 |
Statement of financial position
| 30.09.2023 | 31.12.2022 | |
| € thousand | ||
| ASSETS | ||
| Current assets | ||
| Cash and cash equivalents | 5 018 | 8 769 |
| Other receivables and accrued income | 599 | 385 |
| Total current assets | 5 617 | 9 154 |
| Non-current assets | ||
| Financial assets at fair value through profit or loss | 12 548 | 12 942 |
| Investments in subsidiaries | 1 122 | 1 152 |
| Real estate funds | 11 426 | 11 790 |
| Loans granted | 6 395 | 5 376 |
| Non-current receivables | 1 795 | 0 |
| Total non-current assets | 20 738 | 18 318 |
| TOTAL ASSETS | 26 355 | 27 472 |
| LIABILITIES | ||
| Current liabilities | 7 | 586 |
| Total liabilities, excluding net asset value of the fund attributable to shareholders | 7 | 586 |
| NET ASSET VALUE OF THE FUND | ||
| Net asset value of the fund attributable to shareholders | 26 348 | 26 886 |
| Total liabilities and net asset value of the fund attributable to shareholders | 26 355 | 27 472 |
