T
he decrease in euro interest rates is having a positive impact on the Baltic real estate market, with transaction activity increasing quietly. This has also benefited EfTEN Real Estate Fund AS, as its consolidated interest expense decreased by more than 60 thousand euros in the third quarter of 2024 compared to the previous quarter. From a transactions perspective, the third quarter was the most active in recent years, with the fund's subsidiary selling the Tähesaju Hortes property and establishing two new subsidiaries to acquire logistics centers Paemurru and Härgmäe.
The acquisition cost of these properties will be almost 15 million euros upon completion. The construction work on the ERM elderly care home was completed in the third quarter, and it was also opened next to Tartu. A further decline in interest rates is expected, which has already had a positive effect on listed share and bond prices of real estate sector companies on the Scandinavian stock exchange.
Banks with Nordic owners operating in the Baltics are again looking more positively at financing the real estate sector, creating a good basis for overcoming the decline of the past few years in the Baltic commercial real estate market. However, local major real estate investors lack capital at the moment, and there is no sign of foreign investors entering the local market, so the recovery will not be quick.
The fund announced its intention to launch a new share issue in the fall of 2024, with the aim of raising additional equity of up to EUR 30 million. The consolidated sales revenue of EfTEN Real Estate Fund AS for the third quarter of 2024 was 8.006 million euros, and the group's net rental income in the 9 months of 2024 was a total of 22.203 million euros.
The group's net profit in the same period was 10.104 million euros, with a consolidated net rental income margin of 93% (2023: 94%). The volume of the Group's assets as of 30.09.2024 was 377,723 million euros, of which the fair value of investment properties made up 96% (31.12.2023: 94%).
As of the end of September 2024, the Group owns 34 commercial investment properties, with a fair value of EUR 358.577 million as of the balance sheet date and an acquisition cost of EUR 356.156 million. The net value of the share of EfTEN Real Estate Fund AS as of 30.09.2024 was 20.15 euros (31.12.2023: 20.21 euros), decreasing by 0.3% in the 9 months of 2024.
In April 2024, the Fund paid dividends in the total amount of 10.82 million euros. Without profit distribution, the net value of EfTEN Real Estate AS shares would have increased by 4.6% during the nine months of the year. As of 30.09.2024, the Fund has 10,819,796 shares.
The consolidated statement of comprehensive income for the third quarter and 9 months of 2024 shows a revenue of 8,006 thousand euros and 23,924 thousand euros respectively, with an operating profit of 6,106 thousand euros and 17,700 thousand euros. The net profit for the reporting period was 3,854 thousand euros and 10,104 thousand euros.
The consolidated statement of financial position as of 30.09.2024 shows total assets of 377,723 million euros, with a share capital of 108,198 million euros and retained earnings of 22,264 million euros. The net value of the share of EfTEN Real Estate Fund AS was 20.15 euros (31.12.2023: 20.21 euros).
