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Eastnine Interim / Quarterly Report 2021
3037_10-q_2021-11-10_d1e75db2-d868-4ded-b51d-644c2f62d404.pdf
Interim / Quarterly Report
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EASTNINE INTERIM REPORT JANUARY – MARCH 2020
Interim report January-September 2021
Eastnine's rental income and net operating income increased due to a larger property portfolio. The issue of a bond, entailing higher interest expense during the quarter, will lead to a larger property portfolio and higher earnings. The positive development of sales entailed a positive value change of the holding in MFG during the third quarter.
The period January-September 2021
- Rental income increased by 15 per cent to EUR 16,079k (13,936), as a result of a larger property portfolio. In a comparable portfolio rental income decreased by 6 per cent, due to higher vacancies in Riga.
- Net operating income increased by 17 per cent to EUR 14,625k (12,514).
- Profit from property management increased by 12 per cent to EUR 7,785k (6,951) due to a larger property portfolio. During the third quarter, profit from property management has been negatively affected by increased interest expense after a bond issue, the capital of which is yet to be invested.
- Unrealised value changes amounted to EUR 15,009k (-6,826). Of this change, EUR 2,349k (2,386) is attributable to properties, EUR 11,999k (-8,539) to other investments and EUR 661k (-673) to derivatives.
- Dividend from other investments was EUR 3,906k (-).
- Profit/loss for the period amounted to EUR 25,085k (-1,349), corresponding to EUR 1.13 per share (-0.06).
- The average rent level was EUR 15.0 per sq.m. and month (14.9) and the economic occupancy rate amounted to 89.6 per cent (92.1). Net letting was
EUR -1,022k. The rent level for new lease agreements and renegotiated agreements, EUR 15.2 and 15.4 respectively per sq.m. and month, was higher than the average rent level in the portfolio.
Key events during the third quarter
• Eastnine issued a green bond of EUR 45m at the beginning of July.
Key events after the end of the period
- A new larger letting has been made to the Norwegian IT company Pearl at the property Valdemara Centrs in Riga. The lease agreement has a term of six years with moving-in in the spring of 2022.
- For the second year running, Eastnine obtained the highest number of stars, five, in GRESB's annual global assessment of the real estate industry. Eastnine was awarded 92 points (87).
- The property S7-1 in Vilnius has obtained the sustainability certification BREEAM In-Use Outstanding.
- The Board of Directors has decided that the net loan-tovalue ratio on properties may amount to at most 60 per cent (the previous wording referred to the loan-tovalue ratio on properties).
| 2021 | 2020 | 2021 | 2020 | |
|---|---|---|---|---|
| SELECTED KEY FIGURES | Jan-Sep | Jan-Sep | Jul-Sep | Jul-Sep |
| Rental income, EURk | 16,079 | 13,936 | 5,558 | 4,993 |
| Profit from property management, EURk | 7,785 | 6,951 | 2,496 | 2,519 |
| Profit from property management per share, EUR | 0.35 | 0.33 | 0.11 | 0.12 |
| Net profit/loss for the period, EURk | 25,085 | -1,349 | 13,292 | 11,163 |
| Earnings per share after dilution, EUR | 1.13 | -0.06 | 0.60 | 0.53 |
| Return on equity, % | 10.5 | -0.7 | 16.5 | 17.5 |
| SELECTED KEY FIGURES | 2021 30 Sep |
2020 31 Dec |
|---|---|---|
| Net loan-to-value ratio, % | 34 | 31 |
| Net loan-to-value ratio properties, % | 43 | 40 |
| Sustainability-certified properties1 , % of sq.m. |
88 | 87 |
| Equity per share, EUR | 14.8 | 14.0 |
| Equity per share, SEK2 | 150 | 141 |
| Long-term NAV per share, EUR | 15.5 | 14.6 |
| Long-term NAV per share, SEK2 | 157 | 147 |
Comparative figures in brackets in the interim report refer to the period January - September 2020 for income statement items and as per 31 December 2020 for balance sheet items. The Company refers to the Eastnine Group. 1 Area with sustainability certification as a proportion of total area (excluding area expected to undergo significant redevelopment). 2 EUR = SEK 10.14 as of 30 September 2021 (source: Reuters).
This is Eastnine
Swedish real estate company
The Company is listed on Nasdaq Stockholm Mid Cap and headquartered in Stockholm.
Nordic tenants
Tenants are primarily large and stable Nordic companies with international operations.
Baltic high-yielding, prime office properties
Investing in modern, sustainable and high-yielding office and logistics properties in first-class locations in the Baltics.
TARGET IN 2023 BUSINESS PLAN
| Operational |
|---|
| Operational | Status 30 September 2021 |
|---|---|
| Property portfolio of at least EUR 700m by the end of 2023 | EUR 416m |
| Profit from property management in Q4 2023 (recalculated as an annual figure) shall amount to EUR 25m. | EUR 10.0m (annualised Q3 2021) |
| Financial | |
| Dividend to amount over time to at least 50 % of profit from property management less applicable tax. | 66 %1 |
| Return on equity should be at least 10 % over time. | 21.2 % (twelve-month rolling) |
| The net loan-to-value ratio on properties should be at most 60 %.2 | 43 % |
| The equity/asset ratio should be at least 35%. | 55 % |
| Sustainability | |
| The property portfolio should have obtained sustainability certificates at least at the level of LEED Gold or BREEAM | |
| Excellent.3 | 88 % |
Proportion of green financing of total interest-bearing liabilities. 26 %
1Based on the dividend resolved by the 2021 Annual General Meeting of SEK 3.00 per share. 2 A new target has been set after the end of the period. 3 Refers to area of all properties that are not expected to undergo significant redevelopment.
Focus on growth in the property portfolio
Eastnine's bond issue in July enables continued growth of the property portfolio, with the focus on high quality office and logistics properties in all three Baltic countries. In 2021 to date, we have acquired two office properties. Further acquisitions will improve the profit from property management.
Earnings affected by higher interest expense
Rental income and net operating income continued to develop positively during the third quarter after taking possession of two additional properties at the end of the second quarter. Higher interest expense after the bond issue in July had a negative impact on profit from property management, however, as the capital has not yet been invested. We are now focusing on enlarging the property portfolio and are working with several different potential acquisitions in the office and logistics sectors. Net letting was negative during the quarter and the period, which is primarily due to the announced vacation of Danske Bank from 3Bures-1,2. Vilnius's letting market is very strong and we have several ongoing discussions relating to the vacant premises. It is positive that the rent level for both renegotiated and new lease agreements is higher than the average rent level for existing agreements. It is also gratifying that we have signed a lease agreement for letting 1,300 sq.m. of offices with the Norwegian IT company Pearl at Valdemara Centrs in Riga, with moving-in planned for the spring of 2022.
Strong optimism in the Baltics
The Baltics are characterised by strong optimism with a high growth rate in all of the Baltic countries' economies as well as high growth forecasts for the coming years. It is reported in Vilnius that letting of newly built office space is at a record-high level and that not so much new office space will be produced 2022. A high level of economic activity is basically positive although there are some areas of concern that merit special attention. There is a great demand for labour in certain highly qualified occupations, which has led to a high rate of wage increases. If the shortage of labour persists for a longer period, this may check growth to some extent. Unfortunately, the lower vaccination rate, particularly in Latvia, has led to a sharp increase in Covid-19 cases and additional pressure on the health service. The authorities have announced a new "lock-down", with a curfew imposed during evenings and nights for a duration of four weeks, which may have a negative effect on the occupancy rate in Latvia. Lithuania has also seen increased infection, although the increased restrictions mainly apply to those not vaccinated.
Investments and value development
The value development of the property portfolio, excluding acquisitions and investments, was almost zero during the quarter. Market yields in the Baltics, for both office and logistics properties, have continued to decrease during the autumn, however. The value of Eastnine's holding in Melon Fashion Group (MFG) and East Capital Baltic Property Fund II rose during the third quarter. In MFG's case, this is due, inter alia, to the change to a higher sales forecast for the full year 2021, based on the outcome to date this year, and in the case of the fund due to higher property values. The strong growth and EBITDA development for MFG opens up divestment opportunities, which may take the form of an IPO and, depending on market conditions, could occur before summer 2022.
BREEAM In-Use Outstanding and the future of the office In mid-October, Eastnine was awarded 92 points in GRESB's global comparison of sustainability in the real estate industry. We are for the second consecutive year among the best 20 per cent of the companies, this time with a still higher point score than last year. At about the same time, Eastnine's property S7-1 in Vilnius, was the second property in the Baltics to be awarded the grade Outstanding according to the BREEAM In-Use sustainability certification standard. There are some factors which to a very great extent have contributed to the high mark. The basic idea of the building is to put the emphasis on people. S7-1 is designed to offer the maximum opportunities for health and well-being where open spaces, integration with the surroundings and abundant daylight in every part of the building. Taking also account of many employee friendly facilities such as gym, play room for children, games room, restaurant, rest room and library. We are working hard to offer the highest quality on our properties and services and thus create a competitive advantage for our tenants. The demand for creative and efficient meeting places takes over where the demand for traditional and outdated offices is slowing.
Kestutis Sasnauskas, CEO
We are focusing on expanding our property portfolio and are working with several different potential acquisitions in the office and logistics sectors.
Q3 Business concept EASTNINE INTERIM REPORT JANUARY-SEPTEMBER 2021 4
Eastnine is to be the leading long-term provider of modern and sustainable office and logistics premises in first-class locations in the Baltics.
Market
Economic growth in the Baltic countries is back at the same or higher levels as before the pandemic and the high growth rate is expected to be maintained. Demand for office premises is good and there were a number of major lettings during the third quarter both in Vilnius and Riga, despite the offices not yet being fully occupied.
Market development
The economic recovery is strong both globally and in the Baltic economies, where GDP is already back at or above the levels prior to the pandemic. GDP growth can be expected to land at around four per cent for 2021 both in Lithuania and in Latvia. In Estonia, GDP is expected to rise by as much as eight per cent in 2021, clearly affected by changes in the pension system which have led to increased private consumption and private investments in, among other things, housing. The main explanations for the global recovery are successful vaccinations against Covid-19 and economic support measures at the same time as the Baltics have had the support of a strong export sector.
There has been an increasing shortage of labour and the growth of real wages has accelerated in the Baltics, which strengthens households and is expected to make domestic consumption a future growth motor. Until at least 2024, the GDP growth of the three Baltic countries is assessed to exceed three per cent annually, which is higher than the trend prior to the pandemic. Inflation has at the same time risen to around 3.0 per cent in the Baltics compared with around 1.5 per cent in the eurozone. Real wage increases and aspects of the business environment play a role. In the coming period, it will be important to monitor the risks of overheating while the lower rate of vaccination in Estonia, Latvia and Lithuania of 55, 49 and 61 per cent, as of mid-October, compared with 67 per cent in Sweden, increases the risk of further and longer restrictions.
Rental market
During the third quarter, the return to the office has accelerated, although office use in the Baltics, as on other markets, is far from the levels from before the pandemic. In spite of this, the demand for offices is good. In Riga, where the market has been hesitant since the outbreak of the pandemic, letting activity has revived, with a large letting to SEB in the developer Galios' new project Gustavs and new establishment of the Norwegian IT company Pearl in Eastnine's property Valdemara Centrs. In Vilnius, letting
Source: Eurostat, Swedbank Economic Outlook Source: Eurostat, Swedbank Economic Outlook
activity continues to be strong, with major lettings to Girteka Logistics, Dexcom and Amber Grid between June and September. In Riga, the vacancy rate for offices decreased from 16.2 per cent to 15.1 per cent, while it rose from 8.7 per cent to 9.1 per cent in Vilnius. Development activity is high both in Vilnius and Riga with construction of 190,000 sq.m. and 121,000 sq.m. respectively at the end of September, which will increase the offering of office space by around 20 per cent in both cities in the coming two years. Vilnius reports record new demand for offices at 100,000 sq.m. so far this year, which is a positive sign although, in the absence of large new establishments in Riga, there is a risk of excess supply. The rent levels for modern offices in good locations are in the interval EUR 14-17 per sq.m. and month both in Vilnius and Riga.
Transaction market
The transaction market is on the way to a record year in the Baltics, not least in Latvia, after a number of large transactions. During the third quarter, the Alfa shopping centre has been acquired by the Baltic sector giant Akropolis and the office cluster Jauna Teika has been sold to the regional fund manager Eften Capital, both in Riga. At the same time, the insurance company BTA has acquired a portfolio of Baltic rented housing, structured in a jointly owned company with the developer YIT. The latter is a new type of transaction and a new segment in the Baltic property market.
The volume of investment for the first nine months of the year totalled EUR 1.2 billion, which is already a record for the full year. No office property in the class A segment changed owner during the quarter and to date this year only Eastnine's portfolio acquisitions of the properties Uniq and Zala 1 have been noted. Yields for top properties in both the office and logistics segments are assessed to have decreased by approximately 25 points since 30 June, to 5.25 and 5.60 per cent respectively for offices in Vilnius and Riga respectively and 6.75 per cent for logistics properties in both markets.
GDP, ANNUAL CHANGE INFLATION, ANNUAL CHANGE
The period January-September 2021
Rental income and net operating income increased during the period due to a larger property portfolio. Profit from property management has not grown as much in percentage terms due to higher interest expense after the bond issue. The property value and the value of other investments have increased during the period.
Rental income
Rental income increased by 15 per cent during the period to EUR 16,079k (13,936), mainly due to a larger property portfolio. Rental discounts have, as a consequence of the coronavirus pandemic, been granted during the period at approximately EUR 125k. Rental income in a comparable portfolio decreased by 6 per cent during the period, due to a higher vacancy rate in Riga. The average rent level amounted at the end of the period to EUR 15.0 per sq.m. per month (14.9).New lease agreements have been signed at an average level of EUR 15.2 per sq.m. and month and the average level for renegotiated contracts has been EUR 15.4 per sq.m. and month. Net letting was negative and amounted to EUR -1,022k, see also the section Tenants.
Property expenses
The property expenses only include the part of the costs that is not subsequently charged to the tenants. Eastnine's lease agreements are mainly triple-net agreements, meaning that the reported expenses are affected by changes in the vacancy rate. Due to the larger portfolio, property expenses increased to EUR -1,454k (-1,422). Property expenses in a comparable portfolio decreased by 4 per cent during the period.
Earnings
Net operating income was EUR 14,625k (12,514), and the surplus ratio amounted to 91 per cent (90) during the period. The high surplus ratio is attributable to the fact that a majority of the tenants, in addition to rent, also pay for e.g. electricity, heating, cooling, water and wastewater, as well as repairs, maintenance and property management. The increase in net operating income of 17 per cent is chiefly related to acquisitions. Central administration expenses increased to EUR -2,854k (-2,681), primarily due to one-off expenses during the first quarter.
RENTAL INCOME OCH PROFIT FROM PROPERTY MANAGEMENT
Profit from property management, which during the quarter was negatively affected by increased interest expense after the bond issue, increased by 12 per cent to EUR 7,785k (6,951).
Unrealised value changes in properties amounted to EUR 2,349k (2,386). Unrealised value changes in other investments amounted to EUR 11,999k (-8,539), of which EUR 10,399k (-9,716) is attributable to MFG and EUR 1,600k (1,177) to the fund investment. Unrealised value changes in derivatives amounted to EUR 661k (-673). Dividends of EUR 3,906k (-) have been received during the period, no value changes have been realised. Profit before tax amounted to EUR 26,699k (125) and net profit or loss for the period to EUR 25,085k (-1,349).
Segment Reporting
As of 2021, the segment reporting has changed and now comprises the following segments: Properties in Lithuania, Properties in Latvia and Other investments, the comparative period has been recalculated.
Properties in Lithuania generated a profit from property management of EUR 10,383k (8,000) and a net profit for the period of EUR 10,175k (10,267). Properties in Latvia generated a profit from property management of EUR 907k EUR (1,662) and a net profit for the period of EUR 2,511k (-366). Latvia's profit from property management is affected by higher vacancies. The segment Other investments generated a net profit for the period of EUR 15,904k (-8,539), of which dividend amounted to EUR 3,906k (-) and unrealised value changes to EUR 11,999k (-8,539). Unallocated central administration expenses and other financial income and expenses amounted to EUR -3,505k (-2,712).
UNREALISED CHANGES IN VALUE ON PROPERTIES
Reports in summary
A summary income statement report for January-September 2021 and 2020 respectively and a balance sheet report for September 2021 and 31 December 2020 are presented below.
EARNINGS AND FINANCIAL POSITION
| 2021 | 2020 | |
|---|---|---|
| Summary, EURk | Jan-Sep | Jan-Sep |
| Rental income | 16,079 | 13,936 |
| Property expenses | -1,454 | -1,422 |
| Net operating income | 14,625 | 12,514 |
| Central administration | -2,854 | -2,681 |
| Financial income/expenses | -3,987 | -2,882 |
| Profit from property management | 7,785 | 6,951 |
| Unrealised value changes | 15,009 | -6,826 |
| Realised value changes and dividends from investments | 3,906 | - |
| Tax | -1,614 | -1,474 |
| Net profit/loss for the period | 25,085 | -1,349 |
| 2021 | 2020 | |
| Summary, EURk | 30 Sep | 31 Dec |
| ASSETS | ||
| Investment property | 415,531 | 372,400 |
| Long-term securities holdings | 114,150 | 102,152 |
| Cash and cash equivalents | 63,575 | 24,278 |
| Other assets | 5,352 | 3,395 |
| TOTAL ASSETS | 598,608 | 502,225 |
| EQUITY AND LIABILITIES | ||
| Equity | 328,692 | 309,942 |
| Interest-bearing liabilities | 242,711 | 173,151 |
| Derivatives | 2,084 | 2,745 |
| Deferred tax liabilities | 12,469 | 10,855 |
| Other liabilities | 12,652 | 5,532 |
| TOTAL EQUITY AND LIABILITIES | 598,608 | 502,225 |
Summary segment reporting
Below is a summary of segment reporting for January-September 2021 and 2020, respectively.
EARNINGS BY SEGMENT
| 2021 | 2020 | |
|---|---|---|
| EURk | Jan-Sep | Jan-Sep |
| Properties in Lithuania | ||
| Profit from property management | 10,383 | 8,000 |
| Unrealised changes in value of properties | 604 | 4,415 |
| Unrealised changes in value of derivatives | 803 | -673 |
| Deferred tax | -1,614 | -1,474 |
| Profit/loss, properties in Lithuania | 10,175 | 10,267 |
| Properties in Latvia | ||
| Profit from property management | 907 | 1,662 |
| Unrealised changes in value of properties | 1,746 | -2,028 |
| Unrealised changes in value of derivatives | -142 | - |
| Deferred tax | - | - |
| Profit/loss, properties in Latvia | 2,511 | -366 |
| Other investments | ||
| Unrealised value changes | 11,999 | -8,539 |
| Dividends | 3,906 | - |
| Profit/loss, other investments | 15,904 | -8,539 |
| Unallocated | ||
| Central administration and other operating expenses | -2,854 | -2,681 |
| Unallocated net financial income/expenses | -652 | -31 |
| Profit unallocated | -3,505 | -2,712 |
| Net profit/loss for the period | 25,085 | -1,349 |
Financing
Eastnine's activities are primarily financed with equity, bank loans and bond loans. Eastnine has set risk measures for financing that entail that the net loan-to-value ratio for properties shall not exceed 60 per cent (set by the Board after the end of the period, the previous wording being loanto-value ratio for properties) and that the equity/asset ratio should be at least 35 per cent. The net loan-to-value ratio for properties amounted to 43 per cent (40) and for all assets it was 34 per cent (31). The equity/asset ratio amounted to 55 per cent (62) at the end of the period.
Equity amounted to EUR 328,692k (309,942) and interest-bearing liabilities to EUR 242,711k (173,151), of which 26 per cent was for green financing. During the period, new bank credits of EUR 29,277k have been raised and EUR 26,055k refinanced, the latter in their entirety with previous lenders. At the beginning of the third quarter, Eastnine issued a green bond of EUR 45,000k with a three-year term. At the end of the period, unutilised overdraft facilities amounted to EUR 3,000k (3,000).
The average rent level amounted to 2.8 per cent (2.3) at the end of the period. The average fixed interest term was 1.6 years (2.3) and the average capital tie-up period 2.8 years (3.0). All interest-bearing liabilities, except the unutilised overdraft facility, carry variable interest indexed to Euribor 3M, of which 60 per cent (75) of the total interest-bearing liabilities have been fixed using derivatives.
During the period, repayments have been made amounting to EUR 4,717k. The annual repayment rate according to the agreements amounted to EUR 6,510k, corresponding to 2.7 per cent of the interest-bearing liabilities at the end of the period. Eastnine's derivatives comprised, at the end of the period, EUR 145,033k (129,375)
in interest rate swaps, of which 40 per cent mature in 2023, 39 per cent in 2024, 16 per cent in 2025 and 5 per cent in 2026. The derivatives are measured at fair value and the change in value is recognised through profit or loss, with no effect on the cash flow. The fair value of the derivatives amounted to EUR -2,084k (-2,745) at the end of the period. At the end of the term, the value of derivatives is always zero.
Tax
The tax expenses for the period amounted to EUR -1,614k (-1,474), all of which relates to deferred tax in Lithuania where a corporate income tax of 15 per cent is applied. The stated deferred tax liability is primarily attributable to the difference between the stated value of properties and their tax value, as well as tax losses carried forward. No income tax is reported in Estonia or Latvia, where a 20 per cent corporate income tax is levied only on distributed profits.
Net asset value and equity per share
Long-term net asset value per share was EUR 15.5 (14.6) corresponding to SEK 157 per share (147). Equity per share was EUR 14.8 (14.0) corresponding to SEK 150 per share (141).
Cash flow
Cash flow from operating activities before changes in working capital amounted to EUR 12,016k (7,147) during the period. Change in working capital was EUR -598k (-560). Cash flow from investing activities amounted to EUR -38,326k (-64,309) and from financing activities to EUR 66,222k (34,133). Cash flow for the period amounted to EUR 39,314k (-23,588). Cash and cash equivalents at the end of the period amounted to EUR 63,575k (24,278).
NET LOAN-TO-VALUE AND EQUITY/ASSET RATIOS DISTRIBUTION OF INTEREST-BEARING LIABILITIES
CAPITAL TIE-UP AND FIXED-INTEREST TERMS CREDIT MATURITY AND LEASE AGREEMENTS TERM
Property portfolio
During the year, Eastnine has acquired two fully let office properties in Riga and Vilnius, respectively. Property value increased by EUR 43.1m to EUR 415.5m during the period through acquisitions, investments and unrealised value changes.
Property portfolio
Eastnine's property portfolio consists of twelve modern office properties in Riga and Vilnius. Total lettable area amounted at the end of the period to around 130,500 sq.m.
The average age of all properties, excluding development projects, amounted to around eight years. The value has increased by EUR 43.1m during the period to EUR 415.5m, primarily due to acquisitions. Rental value has increased to EUR 25.0m (22.8) and the economic occupancy rate amounted to 89.6 per cent (92.1) at the end of the period.
Vilnius
Eastnine's property portfolio in central Vilnius can be divided into three clusters of office properties. Two of the clusters are concentrated to the business district, along the street Konstitucijos prospektas, north of the river Neris. A large part of Vilnius portfolio of A class offices is located in this central business district. The third cluster is located adjacent to the parliamentary district and includes Eastnine's properties Vertas-1, Vertas-2 and Uniq. Eastnine's total lettable area in Vilnius amounted to over 108,000 sq.m., corresponding to a market share of approximately twelve per cent of the office market.
The property portfolio in Vilnius includes site leaseholds as well as property rights. Vertas-1, Vertas-2 and Uniq are held with ownership and other properties as leaseholds. The remaining lease term for the site leaseholds varies between 21 and 79 years. The total property value amounted at the end of the period to EUR 336.8m (311.7).
Riga
Riga does not as yet have a clearly delineated central business district and modern office buildings are being developed in a number of micro-areas. All of Eastnine's properties in Riga are located in the centre of the city, along .ULVMDĈD 9DOGHPDUD LHOD RQH RIWKH FLW\ɥV PRVW SURPLQHQW streets, as well as the adjacent Zala iela. The property portfolio, comprising almost 22,500 sq.m. lettable area is estimated to correspond to an office market share of around four per cent. In Riga, all properties are held with ownership rights. The total property value, including project properties, amounted to EUR 78.7m (60.7) at the end of the period, of
which the value of the project properties was EUR 11.4m (8.8).
Property development
At the end of the period, Eastnine had three development projects, two located in Riga and one in Vilnius.
The Pine project will be built directly adjacent to the existing building at the property Alojas Biroji. Eastnine intends The Pine to be the Baltic's first wooden office building and for the property will be one of the finest office properties in the Baltics, both in terms of sustainability as well as tenant experience. The building comprises of around 18,000 sq.m. lettable area and is expected to be climateneutral when completed. Eastnine plans for The Pine to obtain double sustainability certificates: LEED Platinum for the building itself and WELL which concerns the well-being of the people spending time in it. The final building permit has been obtained in 2021.
The development property Kimmel, comprising a development site in central Riga, was previously the site of the eponymous brewery. The site comprises nearly an entire city block along the Krisjana Valdemara iela main street. At present the site is occupied by 4,000 sq.m. of buildings which will be preserved and refurbished. In addition, there is an opportunity to develop an estimated further 34,000 sq.m. White arkitekter and ARHIS arhitekti were judged to be the winners of Eastnine's architectural competition for the Kimmel quarter. The vision for the architectonic sketch design competition, which took place during the spring of 2021, is to transform the historical building into a new central meeting place, including offices, cafés, restaurants, shops, cultural spaces and green rooms. The area shall be friendly to pedestrians and cyclists with attractive green areas, and require few transports with environmental impact.
Eastnine has also carried out an open, international architectural competition for the 3Bures-4 project in Vilnius, which is planned to be built adjacent to other 3Bures buildings. The winner is planned to be announced during the fourth quarter of 2021.
PROPERTY PORTFOLIO
| Lettable area, sq.m. | ||||||||
|---|---|---|---|---|---|---|---|---|
| City | Offices | Retail and service |
Others | Total area | Vacant area, sq.m. |
Economic occupancy rate, % |
Property value, EURm |
Share of value, % |
| Vilnius | 104,066 | 3,628 | 351 | 108,045 | 7,124 | 93.3 | 336.8 | 81 |
| Riga | 19,580 | 2,471 | 435 | 22,486 | 6,377 | 72.9 | 78.7 | 19 |
| Total | 123,646 | 6,099 | 786 | 130,531 | 13,501 | 89.6 | 415.5 | 100 |
Value changes in properties
The value of the properties increased during the period to EUR 415,531k (372,400) as a result of acquisitions and investments in existing properties, as well as unrealised value changes. The unrealised value change of EUR 2,349k, corresponds to 0.6 per cent of opening property values at the beginning of the year. The unrealised positive value change during the period is primarily due to higher future cash flows, attributable to higher rental income than previous assessments.
Acquisitions and investments in the property portfolio
During the year, Eastnine has acquired two properties for a total purchase consideration of EUR 38,479k, of which EUR 35,500k is the purchase price, EUR 479k is transaction expenses and EUR 2,500k for future, potential and
conditional additional purchases. Both properties complement Eastnine's existing portfolio in the respective city where the property Zala 1 in Riga of 3,600 sq.m. is centrally located, close to Valdemara Centrs. The property Uniq in Vilnius of 6,900 sq.m. is adjacent to Vertas-1 and Vertas-2.
Investments in project properties amounted to EUR 1,241k and in other properties to EUR 1,062k.
CHANGE IN PROPERTY VALUE, EURk
| 2021 | 2020 | |
|---|---|---|
| Jan-Sep | Jan-Dec | |
| Property value at the beginning of the year | 372,400 | 290,256 |
| Property acquisitions | 38,479 | 62,461 |
| Investments in existing properties | 2,303 | 2,300 |
| Unrealised value changes | 2,349 | 17,383 |
| Property value at the end of the period | 415,531 | 372,400 |
PROPERTY VALUE BY CITY PREMISES AREA PER CATEGORY
95% 5% <1% Offices Retail and service Others 81% 19% Vilnius Riga
Tenants
Eastnine offers flexible and high-quality office premises in central business locations to tenants, with the emphasis on the indoor environment, working climate, reception and services available. Eastnine has a considerable focus on matching the location and sustainability of the premises with the tenants' own values. Cafés, restaurants, drycleaning and tailoring services as well as parking are available in some of the buildings.
Eastnine's tenants are primarily large and stable Nordic companies with international operations. Around 71 per cent of all tenants operate in the Finance and ICT industries. Eastnine, as a landlord, as well as our tenants have strict expectations for sustainable, modern and efficient offices. In order to meet these demands, Eastnine works actively to obtain sustainability certifications for its properties.
Danske Bank is the largest tenant with around 28 per cent of total annual rent. The ten largest tenants lease ca. 78,400 sq.m. for a total annual rent of EUR 13,970k, corresponding to 67 per cent of the contracted annual rent. At the end of the period, the average remaining lease term for all tenants amounted to 3.7 years (4.4), and for the ten largest tenants 3.6 years (5.1).
Lease agreements
The rental market in the Baltics is different from the Sweden in terms of the way lease agreements are formulated. The
majority of lease agreements have fixed terms and expire at the end of the term. Agreements may, however, include clauses conferring a right to the tenant to renew leases and a preferential right conferred to the tenant to renegotiate leased areas and to expand the area under contract when the term is up. An extension, therefore, requires both parties to actively renegotiate.
The rent on all offices leased from Eastnine is due monthly. The average rent level amounted at the end of the period to EUR 15.0 per sq.m. per month (14.9). The total rental income under contract, for all tenants and the entire lease terms, amounted to EUR 98.9m, of which EUR 39.4m expire in 2026 or later.
Lettings
During the period, 4,300 sq.m., corresponding to annual rent of EUR 802k, has been renegotiated, at an average rental level of EUR 15.4 per sq.m. and month, which exceeded the average level of EUR 15.0 in the portfolio. For new leases, the average rent level was EUR 15.2 per sq.m. and month.
Net letting, i.e. new leases minus terminated leases, was negative during the period and amounted to -5,700 sq.m., corresponding to EUR -1,022k. The largest single termination has been Danske Bank's agreement in 3Bures-1,2 for just over 4,300 sq.m on 31 July 2021.
LARGEST TENANTS
| Share of annual | Lease | Break option in | ||||
|---|---|---|---|---|---|---|
| Annual rent, | rent under | Number | agreement | lease agreements2 , |
||
| Tenant | EURk | contract, % | Sq.m. | of agreements | term1 , years |
years |
| Danske Bank | 5,914 | 28 | 33,495 | 3 | 1.9 | 1.9 |
| Telia | 2,876 | 14 | 15,952 | 1 | 7.5 | 7.5 |
| Swedbank | 1,843 | 9 | 11,266 | 4 | 10.0 | 4.0 |
| Visma | 970 | 5 | 5,571 | 3 | 2.3 | 2.3 |
| Citco | 660 | 3 | 3,009 | 7 | 5.8 | 5.8 |
| Webhelp | 538 | 3 | 2,726 | 5 | 0.9 | 0.9 |
| Cobalt | 331 | 2 | 1,816 | 4 | 3.3 | 3.3 |
| Europos Socialinio fondo agentura | 287 | 1 | 1,769 | 3 | 0.1 | 0.1 |
| Invalda INVL | 281 | 1 | 1,532 | 3 | 4.3 | 4.3 |
| Aviva | 270 | 1 | 1,306 | 2 | 0.6 | 0.6 |
| Total | 13,970 | 67 | 78,442 | 35 | 3.6 | 3.0 |
1Weighted average of remaining lease term.
2Weighted average remaining lease term calculated up to "break option" date.
ECONOMIC OCCUPANCY RATE AND SURPLUS RATIO PROPERTY VALUE AND NET LOAN-TO-VALUE RATIO
Market value, property portfolio
The market value amounted at the end of the period to EUR 415.5m (372.4). Unrealised value changes on properties amounted to EUR 2,349k.
Eastnine values its properties quarterly, with an external valuation taking place at least once over a rolling 12-month period. External and internal valuations are carried out using the same valuation methodology and software, so that the same observable and non-observable input data can be included each quarter. See Note 10 (Investment properties) in the Annual Report 2020 for more information about the valuation model, assumptions made and property values. As in previous years, external valuations have been carried out by Colliers International Advisors in Latvia and Lithuania.
Valuation method and application
The valuation model is based on the present value of future cash flows calculated for a five or ten-year calculation period with supplements for the present value of the residual value at the end of the calculation period. The cash-flow determinations with a longer calculation period than five years is normally applied to properties with only one or a handful of tenants with long lease terms, where the cash flow is more predictable. In the case of development properties where the total cost is uncertain and in the absence of future lease agreements, the fair value is estimated to correspond to the costs incurred, unless other information is available at the time of valuation. The external valuations are carried out in accordance with international valuation standards (IVS 2020). When external valuations are carried out, the properties are inspected on site.
Future cash flows from the property during the calculation period are calculated according to the following model:
-
Rental income, including rent supplements
-
Operating costs
-
Maintenance costs
Total net operating income - Less investments Total cash flow
Valuation assumptions
Property valuations are based on assessments and assumptions, made at the time of the valuation, of both observable and non-observable input data. Observable data which have a considerable impact on the value are current rent levels, past and budgeted property expenses, determined and known future investments and actual inflation. Non-observable data are yield requirements as well as expected future market rents, vacancies and inflation.
The estimated market rent in the valuations amounted on average to EUR 15.1 per sq.m. The majority of the lease agreements are so-called triple-net leases, which is why property costs chiefly have an effect during vacancies.
Tenant-specific customisations and investments made for new letting is calculated as EUR 180 per sq.m. in Latvia and EUR 190 per sq.m. in Lithuania. Other property investments have been calculated at 2.2 per cent on average.
The long-term vacancy rate is generally set at 4.5 per cent in the valuation models. Inflation for market rents has been considered to be zero for the current year, to increase to 0.5 per cent in 2022 and is thereafter expected to be 1.5 per cent annually. The average discount rate was 7.1 per cent and the weighted yield requirement in the valuation model is unchanged since the turn of the year at 5.8 per cent.
| VALUATION MODEL | 2021 30 Sep |
2020 31 Dec |
|---|---|---|
| Weighted yield requirement, % | 5.8 | 5.8 |
| Average property investments, % | 2.2 | 2.2 |
| Average rent, EUR/sq.m./month | 15.1 | 15.0 |
| Average discount rate, % | 7.1 | 7.2 |
| Investment for new letting, EUR/sq.m. | 180-190 | 180-190 |
| Long-term inflation market rents, % | 1.5 | 1.5 |
| Long-term vacancy rate | 4.5 | 4.5 |
RENTAL VALUE AND OCCUPANCY RATE PER TYPE OF PREMISES
| Rental value, | Economic occupancy | |||
|---|---|---|---|---|
| Type of premise | Sq.m. | Rental value, EURm | EUR/sq.m. | rate, area, % |
| Offices | 123,646 | 22.4 | 15.1 | 90.0 |
| Retail and service | 6,099 | 1.0 | 13.4 | 90.0 |
| Parking | - | 1.3 | - | 81.8 |
| Other1 | 786 | 0.3 | 7.3 | 84.7 |
| Total | 130,531 | 25.0 | 15.0 | 89.6 |
1 Includes rental value for other premises and e.g. advertising boards and aerials. Rental value EUR/sq.m. is calculated using solely the rental value attributable to other premises.
Current earning capacity
In order to facilitate the assessment of the Company's current position, Eastnine reports on current earning capacity. Earning capacity is a theoretical assessment to describe the Company's current earnings on 30 September 2021.
Earning capacity provides a snapshot
Earning capacity is not to be regarded as a forecast for the coming twelve months, but as a snapshot of the potential earnings Eastnine can generate under given circumstances. It is based on the property portfolio held on the reporting day.
Earning capacity does not take into account an assessment of the development of rent levels, vacancy, property expenses, interest rates, value changes or other factors that may affect earnings.
Eastnine's calculated earning capacity is based on the following assumptions about income and costs:
- Rental income comprises contracted income including rent supplements, with deductions for any rental discounts, on the reporting day.
- Property costs (rounded) are based on an assessment of a normal year's operating expenses, maintenance costs, property taxes, site leasehold feeds as well as property management expenses.
- Central administration expenses (rounded) have been calculated based on the existing organisation and the current property portfolio on the reporting day.
- Financial income and expenses have been calculated based on the interest-bearing liabilities as on the reporting day and the average rent level and other financial income and expenses that are applicable as at the end of the period.
Comments to earning capacity
- The rental value has decreased as a result of adjustment of lettable area.
- Lower economic occupancy rate has increased the vacancy value.
- Rental income has decreased mainly as a result of increased vacancies. Assessed property costs are unchanged.
- Interest expense and average interest rate level are increasing due to raising a bond loan.
- Profit from property management has decreased mainly because the bond financing has not yet been invested in properties at the end of the period.
- The prospective yield decreased slightly due to the lower occupancy rate.
| Current earning capacity, EUR Thousands | 30 Sep 24,966 |
30 Jun | Change, % |
|---|---|---|---|
| Rent value | 24,999 | 0 | |
| Less vacancy values | -2,604 | -1,913 | +36 |
| Sum rental income | 22,362 | 23,086 | -3 |
| Property expenses | -2,100 | -2,100 | 0 |
| Net operating income | 20,262 | 20,986 | -3 |
| Central administration expenses | -3,800 | -3,800 | 0 |
| Interest expenses | -6,910 | -4,710 | +47 |
| Other financial income and expenses | -52 | -52 | 0 |
| Profit property management | 9,500 | 12,424 | -24 |
| 2021 | 2021 | Change, | |
|---|---|---|---|
| Key figures, current earning capacity | 30 Sep | 30 Jun | unit |
| Surplus ratio, % | 91 | 91 | 0 |
| Interest coverage ratio, x | 2.4 | 3.6 | -1.2 |
| Average interest rate, % | 2.8 | 2.3 | +0.5 |
| Prospective yield excluding development properties, % | 5.0 | 5.2 | -0.2 |
| Prospective yield, % | 4.9 | 5.1 | -0.2 |
| Investment properties, EURk | 415,531 | 414,986 | +545 |
Other investments
Other investments comprise holdings in Melon Fashion Group (MFG) as well as East Capital Baltic Property Fund II (EC BPFII). The value of these holdings increased by EUR 11,999k during the period and Eastnine has received dividends of EUR 3,906k. The strong development for MFG opens up divestment opportunities.
Melon Fashion Group
MFG is one of the leading players in the Russian fashion industry with a business model based on in-house design with production in Asia. The retail network consisted of a total of 815 stores (809), of which 238 (240) were franchises. MFG markets the brands Sela, Befree, Zarina and Love Republic, each with a specific target group.
The period January-September 2021
MFG reported a strong development in sales during the first nine months of the year. Sales increased by 66 per cent to RUB 28,267m (17,026). EBITDA increased by 98 per cent to RUB 6,723m (3,394) and the EBITDA margin was 23.8 per cent (19.9). EBITDA, excluding the effects of IFRS 16, increased by 119 per cent and amounted to RUB 3,647m (1,662) and corre-sponding EBITDA margin was 12.9 per cent (9.8). Online sales rose by 46 per cent and amounted to 31 per cent (35) of total sales. The fact that share of online sales were even higher in 2020 is explained by a general closure of stores for a period, due to restrictions related to the coronavirus pandemic. MFG has continued to have good liquidity and has paid dividends of RUB 860m (-) during the period.
Eastnine's holding in MFG
Eastnine owns 36 per cent of MFG, the holding is unburdened. The value of the holding in MFG increased by EUR 9,537k during the quarter and EUR 10,399k (-9,716) during the period. The value amounted to EUR 89,719k (79,320) at the end of the period. Positive sales development and strengthening of the rouble in relation to the euro during the period had a positive effect on the valuation of the holding in MFG at the same time as higher WACC affected the valuation negatively both during the quarter and during the period. During the period, Eastnine has received EUR
| MFG | EC BPF II | |||||
|---|---|---|---|---|---|---|
| Key figures, | 2021 | 2020 | 2021 | 2020 | ||
| Eastnine's holding | Jan-Sep | Jan-Sep | Jan-Sep | Jan-Sep | ||
| Unrealised value change, | ||||||
| EURk | 10,399 | -9,716 | 1,600 | 1,177 | ||
| Received dividends, EURk | 3,266 | - | 640 | - | ||
| Total return, % | 17.2 | -14.5 | 9.8 | 5.4 |
| MFG | EC BPF II | ||||
|---|---|---|---|---|---|
| Key figures, | 2021 | 2020 | 2021 | 2020 | |
| Eastnine's holding | 30 Sep | 31 Dec | 30 Sep | 31 Dec | |
| Eastnine's share, % | 36 | 36 | 42 | 43 | |
| Fair value of Eastnine's | |||||
| holding, EURm | 89,719 | 79,320 | 24,431 | 22,831 | |
| Proportion of Eastnine | |||||
| assets, % | 15.0 | 15.8 | 4.1 | 4.5 | |
3,266k (-) in dividends from MFG. Total yield for the holding amounted to 17.2 per cent (-14.5) during the period.
The strong growth- and EBITDA development for MFG opens up divestment opportunities, which may take the form of an IPO and, depending on market conditions, could occur before summer 2022.
East Capital Baltic Property Fund II
EC BPF II was started in 2012. The fund, a so-called "closedend fund" is fully invested and is currently in its final extension period maturing in May 2022. The fund has a total of four properties in Tallinn in logistics, retail trade and offices.
The period January-September 2021
The fund reports a continued positive value change during the period, despite dividend paid during the second quarter.
Eastnine's holding in the fund
Eastnine holds a 12 per cent ownership and voting stake in East Capital (Lux) SCA, SICAV-SIF, (an umbrella fund), the holding is unburdened. This holding means that Eastnine receives a 42 per cent share of the returns from the sub-fund EC BPFII. The value of the holding in the fund consists of Eastnine's share of the fund's total value. Eastnine's holding increased by EUR 1,600k (1,177) during the period and amounted to EUR 24,431k (22,831) at the end of the period. During the period, Eastnine has received dividends from the fund of EUR 640k (-). The total return on the holding was 9.8 per cent (5.4) during the period.
Eastnine intends to release its capital in the fund, which can take place in various ways, for example, by sales of ownership shares or by selling properties in the fund and terminating the fund.
PROPORTION OF EASTNINE'S ASSETS
Other information and accounting principles
General information
Eastnine AB (publ), corporate ID no. 556693-7404, is a Swedish limited company, listed on Nasdaq Stockholm, with its registered office in Stockholm. The Group's real estate operations are managed through the Estonian subsidiary Eastnine Baltics OÜ, with subsidiaries in Latvia and Lithuania, which together comprise the Eastnine Group. At the end of the period, the Eastnine Group employed 23 fulltime employees, of which nine were employed at the head office in Stockholm, nine in Vilnius and five in Riga. The Company's and the Group's interim report concerns the SHULRG -DQXDU\ʠ6HSWHPEHU \$OO ILJXUHV DUH SUHVHQWHG LQ EUR thousands unless otherwise stated. Rounding differences may occur.
Risks and uncertainties
The dominant risks in Eastnine's operations are commercial risks in the form of changes in rent levels, vacancies and interest rates, as well as changes in the economic or business climate, and exchange rates in the markets where Eastnine operates. A more detailed description of Eastnine's material risks and uncertainties is provided in the Company's Annual Report 2020 on pgs. 49-54. Effects of the coronavirus pandemic are described on p. 8 in the Annual Report 2020. A current analysis of market conditions is provided in the Market Section on p. 5.
Parent company
Net profit/loss for the period amounted to EUR 13,371k
(-9,725). The result is primarily attributable to dividend received from, and an unrealised value change in, Melon Fashion Group totalling EUR 13,665k (-9,716). For the Parent Company's income statement and balance sheet, see p. 26.
Dividend
The Annual General Meeting 2021 has decided on a dividend of SEK 3.00 per share (2.70) for the 2020 financial year, distributed over four payments. In May and August, SEK 0.75 per share was paid out. For upcoming dividend payments, please refer to the calendar on p. 32.
Sustainability
Eastnine undertakes active sustainability efforts. At the end of the period, 88 per cent of the property area (excluding properties expected to undergo significant redevelopment) was environmentally certified, attaining either LEED Platinum or BREEAM Excellent. Eastnine's goal is that 100 per cent of certifiable area should have obtained sustainability certificates on the level of at least LEED Gold or BREEAM Excellent.
As for Eastnine's planned new development of the first all-wooden office building in the Baltics, The Pine in Riga, this building is planned to receive double sustainability certificates: LEED Platinum and WELL. The goal for the Kimmel project in Riga is a LEED Platinum certificate. The sustainability report in the Annual Report 2020, which was produced according to the Global Reporting Initiative's guidelines, contains information about the Company's primary concerns, sustainability goals and indicators.
Selection of other sustainability issues:
- Eastnine's property S7-1 in Vilnius obtained in October the sustainability certificate BREEAM In-Use Outstanding.
- In 2021, Eastnine, for the second consecutive year, received five stars in GRESB's inspection of sustainability work among the world's real estate companies and is thus included in the group with the 20 per cent highest ranked real estate companies globally.
- In 2021, Eastnine was awarded the U.S. Green Building Council Leadership Award in the category Europe for work with development of green buildings.
- In conjunction with a new project to promote biodiversity, beehives have been placed on the roof of Vertas-1 and 3Bures-1,2 in Vilnius.
- All lease agreements in six out of a total of twelve properties are now "green leases".
- At the end of the period, Eastnine had carried out a review of 28 of 30 selected strategic suppliers.
- Green financing now accounts for 26 per cent of interest-bearing liabilities.
- The green financing framework has obtained the highest possible rating, Dark Green and Excellent from CICERO.
- Eastnine was awarded a shared third place in the foundation Allbright's comparison of gender equality in listed companies in Sweden 2020.
- In the employee survey carried out in 2020, 100 per cent of employees considered Eastnine to be a "Great Place to Work", and the "Trust Index" amounted to 95 per cent.
Accounting principles
Eastnine AB (publ) prepares its consolidated accounts according to the International Financial Reporting Standards (IFRS), approved by the European Union as well as interpretations of these (IFRIC). The interim report has been prepared in accordance with the International Accounting Standards (IAS) 34 Interim Financial Reporting and the Swedish Annual Accounts Act
(Årsredovisningslagen). Accounting principles, calculation methods and valuation methods correspond to those that were applied in the Annual Report 2020 as well as the Interim Report for January-June 2021. The interim report is to be read together with the annual report. New or revised IFRS standards or other IFRIC interpretations approved by the EU and applying from 1 January 2021 have not had a material effect on the Group's financial statements.
The Parent Company prepares its accounts in accordance with RFR 2, Reporting of a legal entity, as well as the Swedish Annual Accounts Act (Årsredovisningslagen) and apply the same accounting principles, calculation methods and valuation methods as at the last annual report. For valuation of Eastnine's assets and liabilities, see Note 1 in the 2020 Annual Report and the information below.
Valuation of derivatives
Derivatives are valued at fair value in accordance with level 2 of the IFRS value hierarchy.
Valuation of interest-bearing liabilities
Eastnine's interest-bearing liabilities are valued at amortized cost, which is considered to be a good approximation of fair value.
Segment Reporting
Eastnine classifies its various segments according to geography as well as the nature of the investments. The Company's senior management follow up on the following segments, which corresponds to the reporting provided to the Board of Directors: Properties in Lithuania, Properties in Latvia and Other investments. The segment reporting is changed in comparison to the previous year, and the comparative period has been recalculated.
Related parties
Eastnine AB has a related party relationship with its subsidiaries, see Note 31 in the Annual Report 2020, as well as with Board members and employees. Eastnine's management, Board members and their close relatives and related companies controlled, at the end of the period, 29 (29) per cent of voting rights in the Company.
Key events after end of period
- A new major letting has been signed with the Norwegian IT company Pearl at the property Valdemara Centrs in Riga. The lease agreement has a term of six years with moving-in in the spring of 2022.
- For the second consecutive year, Eastnine obtained the highest number of stars, five, in GRESB's annual global assessment of sustainability in the real estate industry. Eastnine was awarded 92 points (87).
- The property S7-1 in Vilnius has obtained the sustainability certification BREEAM In-Use Outstanding.
- The Board of Directors has decided that the net loan-tovalue ratio on properties may amount to at most 60 per cent (the previous wording referred to the loan-tovalue ratio on properties). The net loan-to-value ratio entails that cash and cash equivalents reduce the interest-bearing liabilities and the key figure thus better describes the risk level in the Company's financing.
Assurance from the CEO
The CEO certifies that the interim report provides a true and fair view of the Parent Company's and the Group's operations, financial position and profits and describes significant risks and uncertainties facing the Parent Company and the Group.
Stockholm, 10 November 2021
Kestutis Sasnauskas CEO
Review report
To the Board of Eastnine AB (publ)
Corporate ID no. 556693-7404
Introduction
We have reviewed the condensed interim financial information (interim report) of Eastnine AB (publ) as of 30 September 2021 and the nine-month period then ended. The Board of Directors and the Managing Director are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.
Scope of the Review
We conducted our review in accordance with International Standard on Review Engagements ISRE 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matter, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and other generally accepted auditing practices. The procedures performed in a review do not enable us to obtain a level of
assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. The conclusion based on a review does not therefore have the level of assurance of an explicit opinion based on an audit.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, for the Group in accordance with IAS 34 and the Annual Accounts Act, and for the Parent Company in accordance with the Annual Accounts Act.
Stockholm, 10 November 2021
KPMG AB
Peter Dahllöf
Authorised Public Accountant
The share
Eastnine's share price rose by 15 per cent during the first nine months of the year to SEK 144.0 at the end of the period. The long-term net asset value per share rose by 7 per cent to SEK 157 (147), due to a positive profit from property management, positive unrealised value changes, dividend from other investments and appreciation of the euro in relation to the krona.
Share price development and volume
Eastnine's share price rose by SEK 19 during the period to SEK 144.0 (125.0) on 30 September. The highest closing price was measured on 28 July at SEK 150.4 and the lowest closing price on 28 January at SEK 117.2.
Eastnine's market capitalisation amounted at the end of the period to SEK 3.2 billion (2.8). The average daily volume on Nasdaq increased to 16,662 shares (15,104) during the period. The free float amounted to 62.8 per cent (62.8) at the end of the period.
Net asset value
The long-term net asset value per share increased by SEK 10 during the period, corresponding to 7 per cent, to amount to SEK 157 (147) at the end of the period. The value in EUR rose by 6 per cent to 15.5 (14.6). Equity per share rose by SEK 9, corresponding to 7 per cent (rounded off), to SEK 150 (141). The value in EUR rose by 6 per cent to 14.8 (14.0).
Positive profit from property management, unrealised value changes, dividends from investments and strengthening of the euro in relation to the krona were contributory factors to the increase in net asset value per share. The discount to net asset value has reduced during the year and amounted to 8 per cent at the end of the period.
SHARE PRICE JAN-SEP 2021 SHARE PRICE AND NET ASSET VALUE
| 2021 | 2020 | |
|---|---|---|
| Data per share | 30 Sep | 31 Dec |
| Equity, EUR | 14.8 | 14.0 |
| Long-term net asset value, EUR | 15.5 | 14.6 |
| Share price, EUR | 14.2 | 12.4 |
| Equity, SEK | 150 | 141 |
| Long-term net asset value, SEK | 157 | 147 |
| Share price, SEK | 144.0 | 125.0 |
Number of shares
Eastnine's share is listed on Nasdaq Stockholm Mid Cap, Real Estate. The total number of shares in Eastnine AB amounted to 22,370,261 on 31 October 2021. Adjusted for repurchased shares held in treasury, the number of shares amounted to 22,149,061.
The number of known shareholders has increased during the year and amounted to 5,268 (4,990) on October 31. Three owners, Peter Elam Håkansson, Bonnier Fastigheter Invest and Arbona, had at least ten per cent of the total number of shares in the Company. Bonnier acquired their shares during October 2021. The proportion of shares that are Swedish-owned amounted to 76.5 per cent (73.9).
On 8 October, Rytu Invest notified that the company had distributed its shareholding in Eastnine, amounting to 733,599 shares to its three shareholders Eastate, Schkval and Wedelian. Behind Eastate is Eastnine's largest shareholder Peter Elam Håkansson, behind Schkval is Eastnine's CEO Kestutis Sasnauskas and behind Wedelian is Karine Hirn.
Buy-back
As of 30 September 2021, the Company held 221,200 repurchased treasury shares, corresponding to around 1.0 per cent of the total number of shares. Repurchased shares may be used for Eastnine's long-term incentive programme (LTIP). The dilution effect of repurchased shares that at the end of the period are judged to be used for current LTIP programme, is reported for the key ratio earnings per share.
At the AGM 2021, the Board received a new mandate to decide on share buy-back, providing that the company's holding of treasury shares does not exceed at any time 10 per cent of all shares in the Company.
Dividends
The Annual General Meeting has decided on a dividend of SEK 3.00 per share (2.70) for the 2020 financial year, evenly distributed over four payments. The first two payments have taken place in May and August 2021, respectively. For further dates, please refer to the calendar on p. 32.
LARGEST SHAREHOLDERS AS AT 31 OCTOBER 2021
| Shareholders | Number of shares | % |
|---|---|---|
| Peter Elam Håkansson1 | 5,800,859 | 25.9 |
| Bonnier Fastigheter Invest AB | 3,060,450 | 13.7 |
| Arbona AB (publ) | 2,240,328 | 10.0 |
| Lazard Asset Management | 1,380,698 | 6.2 |
| Patrik Brummer | 832,930 | 3.7 |
| Kestutis Sasnauskas1 | 663,095 | 3.0 |
| Avanza Pension | 443,707 | 2.0 |
| ICA-handlarnas Förbund | 400,000 | 1.8 |
| Nordnet Pensionsförsäkring | 386,017 | 1.7 |
| Karine Hirn1 | 360,506 | 1.6 |
| Dimensional Fund Advisors | 330,942 | 1.5 |
| CARN Capital | 267,108 | 1.2 |
| Jacob Grapengiesser | 167,861 | 0.8 |
| Albin Rosengren | 155,418 | 0.7 |
| Staffan Malmer | 147,808 | 0.7 |
| 15 largest | 16,637,727 | 74.4 |
| Eastnine AB (repurchased shares) | 221,200 | 1.0 |
| Other | 5,511,334 | 24.6 |
| Total | 22,370,261 | 100.0 |
1 Privately and via company. Source: Monitor
.standing.
Q3 EASTNINE INTERIM REPORT JANUARY-SEPTEMBER 2021 21
Financial Reports
in summary
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
| EUR thousands | 2021 Jan-Sep |
2020 Jan-Sep |
2021 Jul-Sep |
2020 Jul-Sep |
2020 Jan-Dec |
2020/2021 Oct-Sep |
|---|---|---|---|---|---|---|
| Rental income | 16,079 | 13,936 | 5,558 | 4,993 | 19,186 | 21,330 |
| Property expenses | -1,454 | -1,422 | -471 | -510 | -1,689 | -1,721 |
| Net operating income | 14,625 | 12,514 | 5,087 | 4,483 | 17,497 | 19,609 |
| Central administration expenses | -2,854 | -2,681 | -795 | -992 | -3,515 | -3,688 |
| Interest expenses | -3,851 | -2,674 | -1,729 | -959 | -3,703 | -4,880 |
| Other financial income and expenses | -136 | -208 | -68 | -14 | -268 | -195 |
| Profit from property management | 7,785 | 6,951 | 2,496 | 2,519 | 10,011 | 10,845 |
| Unrealised changes in value of properties | 2,349 | 2,386 | -567 | -198 | 17,383 | 17,346 |
| Unrealised changes in value of investments | 11,999 | -8,539 | 11,050 | 9,139 | 13,443 | 33,980 |
| Unrealised changes in value of derivatives | 661 | -673 | 300 | -12 | -782 | 552 |
| Realised value changes and dividends from investments | 3,906 | - | - | - | 640 | 4,546 |
| Profit/loss before tax | 26,699 | 125 | 13,279 | 11,448 | 40,695 | 67,269 |
| Current tax | - | - | - | - | - | - |
| Deferred tax | -1,614 | -1,474 | 13 | -285 | -4,540 | -4,680 |
| Net profit/loss for the period/year1 | 25,085 | -1,349 | 13,292 | 11,163 | 36,155 | 62,589 |
| Number of shares issued, adjusted for repurchased shares, thousand | 22,149 | 21,149 | 22,149 | 21,149 | 22,149 | 22,149 |
| Weighted average number of shares before dilution, thousand | 22,149 | 21,149 | 22,149 | 21,149 | 21,269 | 22,018 |
| Weighted average number of shares after dilution, thousand | 22,221 | 21,196 | 22,232 | 21,195 | 21,319 | 22,089 |
| Earnings per share before dilution, EUR | 1.13 | -0.06 | 0.60 | 0.53 | 1.70 | 2.84 |
| Earnings per share after dilution, EUR | 1.13 | -0.06 | 0.60 | 0.53 | 1.70 | 2.83 |
1Total comprehensive income for the period/year corresponds to net profit/loss for the period/year.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
| EUR thousands | 2021 30 Sep |
2020 31 Dec |
2020 30 Sep |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Intangible assets | 2 | 2 | 2 |
| Investment properties | 415,531 | 372,400 | 356,940 |
| Right-of-use assets, leaseholds | 1,314 | 1,197 | 1,225 |
| Equipment | 176 | 174 | 183 |
| Long-term securities holdings | 114,150 | 102,152 | 80,170 |
| Other non-current receivables | 137 | 465 | 175 |
| Total non-current assets | 531,311 | 476,389 | 438,695 |
| Current assets | |||
| Other current assets | 3,723 | 1,557 | 6,956 |
| Cash and cash equivalents | 63,575 | 24,278 | 13,804 |
| Total current assets | 67,297 | 25,836 | 20,761 |
| TOTAL ASSETS | 598,608 | 502,225 | 459,456 |
| EQUITY AND LIABILITIES | |||
| Equity | |||
| Share capital | 3,660 | 3,660 | 3,660 |
| Other contributed capital | 251,515 | 257,850 | 246,914 |
| Retained earnings including net profit/loss for the period/year | 73,517 | 48,432 | 10,928 |
| Total equity | 328,692 | 309,942 | 261,502 |
| Non-current liabilities | |||
| Interest-bearing liabilities | 236,201 | 153,208 | 168,568 |
| Derivatives | 2,084 | 2,745 | 2,636 |
| Deferred tax liabilities | 12,469 | 10,855 | 7,789 |
| Lease liability | 1,295 | 1,175 | 1,201 |
| Other non-current liabilites | 3,752 | 1,790 | 1,772 |
| Total non-current liabilities | 255,801 | 169,772 | 181,966 |
| Current liabilities | |||
| Interest-bearing liabilities | 6,510 | 19,943 | 6,111 |
| Other liabilities | 5,447 | 1,703 | 8,835 |
| Accrued expenses and deferred income | 2,158 | 865 | 1,042 |
| Total current liabilities | 14,115 | 22,510 | 15,988 |
| TOTAL EQUITY AND LIABILITIES | 598,608 | 502,225 | 459,456 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
| EUR thousands | Share capital |
Other contributed capital |
Retained earnings |
Total equity |
|---|---|---|---|---|
| Opening equity 1 January 2020 | 3,660 | 252,252 | 12,280 | 268,192 |
| Net profit/loss for 1 January-30 September | - - |
-1,349 | -1,349 | |
| Dividend to shareholders | - -5,403 |
- | -5,403 | |
| Long-term incentive program | - 62 |
- | 62 | |
| Closing equity 30 September 2020 | 3,660 | 246,914 | 10,928 | 261,502 |
| Net profit /loss for 1 October-31 December | - - |
37,504 | 37,504 | |
| Sale of treasury shares | - 10,872 |
- | 10,872 | |
| Long-term incentive program | - 64 |
- | 64 | |
| Closing equity 31 December 2020 | 3,660 | 257,850 | 48,432 | 309,942 |
| Net profit/loss for 1 January-30 September | - - |
25,085 | 25,085 | |
| Dividend to shareholders | - -6,520 |
- | -6,520 | |
| Long-term incentive program | - 185 |
- | 185 | |
| Closing equity 30 September 2021 | 3,660 | 251,515 | 73,517 | 328,692 |
CONSOLIDATED STATEMENT OF CASH FLOW
| 2021 | 2020 | 2021 | 2020 | 2020 | 2020/2021 | |
|---|---|---|---|---|---|---|
| EUR thousands | Jan-Sep | Jan-Sep | Jul-Sep | Jul-Sep | Jan-Dec | Oct-Sep |
| Operating activities | ||||||
| Profit/loss before tax | 26,699 | 125 | 13,279 | 11,448 | 40,695 | 67,269 |
| Adjustments not included in cash flow from operating activities | -14,683 | 7,022 | -10,678 | -8,716 | -29,694 | -51,400 |
| Income tax paid | - | - | - | - | - | - |
| Cash flow from operating activities before changes in working capital | 12,016 | 7,147 | 2,600 | 2,732 | 11,001 | 15,870 |
| Changes in cash flow from changes in working capital | ||||||
| Increase (-)/decrease(+) in other current receivables | -1,838 | -4,602 | -1,009 | 4,495 | 508 | 3,272 |
| Increase (+)/decrease(-) in other current payables | 1,240 | 4,042 | 1,216 | -3,694 | -549 | -3,351 |
| Cash flow from operating activities | 11,418 | 6,587 | 2,808 | 3,533 | 10,960 | 15,791 |
| Investing activities | ||||||
| Investments in existing properties | -2,303 | -1,837 | -1,119 | -865 | -2,300 | -2,766 |
| Acquisition of properties | -35,979 | -62,461 | 7 | -20,072 | -62,461 | -35,979 |
| Purchase of equipment | -44 | -11 | -42 | -8 | -17 | -50 |
| Cash flow from investing activities | -38,326 | -64,309 | -1,154 | -20,946 | -64,778 | -38,795 |
| Financing activities | ||||||
| Issue bond | 45,000 | - | 45,000 | - | - | 45,000 |
| New loans | 29,277 | 40,950 | - | 11,000 | 40,950 | 29,277 |
| Repayment of loans | -4,717 | -4,042 | -1,628 | -1,442 | -5,570 | -6,245 |
| Payment of lease liabilities | -78 | -73 | -26 | -25 | -99 | -104 |
| Dividend to shareholders | -3,260 | -2,702 | -1,630 | - | -5,403 | -5,961 |
| Sale of treasury shares | - | - | - | - | 10,872 | 10,872 |
| Cash flow from financing activities | 66,222 | 34,133 | 41,716 | 9,533 | 40,750 | 72,839 |
| Cash flow for the period | 39,314 | -23,588 | 43,370 | -7,880 | -13,068 | 49,835 |
| Cash and cash equivalent at the beginning of the period | 24,278 | 37,406 | 20,218 | 21,688 | 37,406 | 13,804 |
| Exchange rate differences in cash and cash equivalents | -18 | -13 | -13 | -4 | -60 | -65 |
| Cash and cash equivalent at the end of the period | 63,575 | 13,804 | 63,575 | 13,804 | 24,278 | 63,575 |
KEY FIGURES
| 2021 Jan-Sep |
2020 | 2021 | 2020 | 2020 | 2020/2021 | |
|---|---|---|---|---|---|---|
| Jan-Sep | Jul-Sep | Jul-Sep | Jan-Dec | Oct-Sep | ||
| Surplus ratio, % | 91 | 90 | 92 | 90 | 91 | 92 |
| Interest coverage ratio, multiple | 3.0 | 3.6 | 2.4 | 3.6 | 3.7 | 3.2 |
| Return on equity, % | 10.5 | -0.7 | 16.5 | 17.5 | 12.5 | 21.2 |
| Cashflow per share from operating activities, EUR | 0.52 | 0.31 | 0.13 | 0.17 | 0.52 | 0.72 |
| Cashflow per share, EUR | 1.77 | -1.12 | 1.96 | -0.37 | -0.61 | 2.26 |
| Profit from property management per share, EUR | 0.35 | 0.33 | 0.11 | 0.12 | 0.47 | 0.49 |
| Earnings per share before dilution, EUR | 1.13 | -0.06 | 0.60 | 0.53 | 1.70 | 2.84 |
| Earnings per share after dilution, EUR | 1.13 | -0.06 | 0.60 | 0.53 | 1.70 | 2.83 |
SEGMENT REPORTING
Eastnine classifies and evaluates the various segments based on geography and the nature of the investments. Segments are presented from the point of view of management and are divided into the following segments: Properties in Lithuania, Properties in Latvia and Other investments.
| EUR thousands | Properties | Properties | Other | ||
|---|---|---|---|---|---|
| 1 Jan-30 Sep 2021 | in Lithuania | in Latvia | investments | Unallocated | Total |
| Rental income | 14,048 | 2,031 | - | - | 16,079 |
| Property expenses | -848 | -606 | - | - | -1,454 |
| Net operating income | 13,200 | 1,425 | - | - | 14,625 |
| Central administration expenses | - | - | - | -2,854 | -2,854 |
| Interest expenses | -2,793 | -518 | - | -540 | -3,851 |
| Other financial income and expenses | -24 | - | - | -112 | -136 |
| Profit from property management | 10,383 | 907 | - | -3,505 | 7,785 |
| Unrealised changes in value of properties | 604 | 1,746 | - | - | 2,349 |
| Unrealised changes in value of investments | - | - | 11,999 | - | 11,999 |
| Unrealised changes in value of derivatives | 803 | -142 | - | - | 661 |
| Realised value changes and dividends from investments | - | - | 3,906 | - | 3,906 |
| Profit/loss before tax | 11,789 | 2,511 | 15,904 | -3,505 | 26,699 |
| Deferred tax | -1,614 | - | - | - | -1,614 |
| Net profit/loss for the period | 10,175 | 2,511 | 15,904 | -3,505 | 25,085 |
| Investment properties | 336,800 | 78,731 | - | - | 415,531 |
| of which investments/acquisitions during the period | 24,496 | 16,286 | - | - | 40,782 |
| Long-term securities holdings | - | - | 114,150 | - | 114,150 |
| Interest-bearing liabilities | 164,708 | 33,003 | - | 45,000 | 242,711 |
| EUR thousands | Properties | Properties | Other | ||
|---|---|---|---|---|---|
| 1 Jan-30 Sep 2020 | in Lithuania | in Latvia | investments | Unallocated | Total |
| Rental income | 11,324 | 2,612 | - | - | 13,936 |
| Property expenses | -968 | -454 | - | - | -1,422 |
| Net operating income | 10,356 | 2,158 | - | - | 12,514 |
| Central administration expenses | - | - - |
-2,681 | -2,681 | |
| Interest expenses | -2,178 | -496 | - | - | -2,674 |
| Other financial income and expenses | -177 | - - |
-31 | -208 | |
| Profit from property management | 8,000 | 1,662 | - | -2,712 | 6,951 |
| Unrealised changes in value of properties | 4,415 | -2,028 | - | - | 2,386 |
| Unrealised changes in value of investments | - | - -8,539 |
- | -8,539 | |
| Unrealised changes in value of derivatives | -673 | - - |
- | -673 | |
| Profit/loss before tax | 11,742 | -366 | -8,539 | -2,712 | 125 |
| Deferred tax | -1,474 | - - |
- | -1,474 | |
| Net profit/loss for the period | 10,267 | -366 | -8,539 | -2,712 | -1,349 |
| - | - - |
- | - | ||
| Investment properties | 293,740 | 63,200 | - | - | 356,940 |
| of which investments/acquisitions during the period | 63,505 | 793 | - | - | 64,298 |
| Long-term securities holdings | - | - 80,171 |
- | 80,171 | |
| Interest-bearing liabilities | 147,965 | 26,713 | - | - | 174,679 |
LONG-TERM SECURITIES HOLDINGS
Tables below reflect the long-term securities holdings measured at fair value in level 3. Segment "Other investments" consist of the holdings in East Capital Property Fund II (EC BPF II) and JSC Melon Fashion Group (MFG). The properties in the fund are normally valued internally by fund manager at quarterly basis and externally at year end. JSC Melon Fashion Group is valued internally by Eastnine.
| Other investments | |||
|---|---|---|---|
| Changes in long-term securities holdings measured at fair value in level 3, EUR thousands | EC BPF II | MFG | Total |
| Opening balance 1 January 2020 | 21,812 | 66,897 | 88,709 |
| Unrealised changes in values recognised net in profit/loss | 1,019 | 12,423 | 13,443 |
| Closing balance 31 December 2020 | 22,831 | 79,320 | 102,152 |
| Unrealised changes in values recognised net in profit/loss | 1,600 | 10,399 | 11,999 |
| Closing balance 30 September 2021 | 24,431 | 89,719 | 114,150 |
VALUATION ASSUMPTIONS
| 2021 | 2020 | 2020 | |
|---|---|---|---|
| Investment properties | 30 Sep | 31 Dec | 30 Sep |
| Weighted yield requirement, % | 5.8 | 5.8 | 6.1 |
| Average rent, EUR/sq.m./month | 15.1 | 15.0 | 15.0 |
| Average discount rate, % | 7.1 | 7.2 | 7.5 |
| Long-term inflation market rent, % | 1.5 | 1.5 | 1.5 |
| Long-term vacancy rate, % | 4.5 | 4.5 | 4.5 |
| Long-term securities holdings | Segment | Valuation method1 | Valuation assumptions1 |
|---|---|---|---|
| East Capital Baltic Property Fund II | Other investments | DCF | WACC 7-8%, yield requirement 6-8%. |
| Long-term growth 3.5%, long-term operating margin | |||
| 8.3%, WACC 15,4%, minority and liquidity discount of | |||
| JSC Melon Fashion Group | Other investments | DCF | 25% is applied. |
1Discounted cash flow model (DCF), weighted average cost of capital (WACC).
SENSITIVITY ANALYSIS
30 September 2021
| Investment properties, EUR thousands | Assumptions | Properties in Lithuania | Properties in Latvia | ||
|---|---|---|---|---|---|
| Market rental level, % | +/- 5.0 | 13,283 | -13,146 | 2,516 | -2,497 |
| Long-term floor space occupancy rate, percentage points | +/- 1.0 | 2,851 | -3,460 | 766 | -784 |
| Yield requirement, percentage points | +/- 0.25 | -9,585 | 10,454 | -2,080 | 2,260 |
| 30 September 2021 | Other investments | |||||
|---|---|---|---|---|---|---|
| Long-term securities holdings, EUR thousands | Assumptions | EC BPF II | MFG | |||
| Yield requirement, percentage points | +/- 0.5 | -1,179 | 1,362 | - | - | |
| Weighted average cost of capital, percentage points | +/- 0.5 EC BPF II +/- 1.0 MFG |
-1,100 | 1,154 | -6,726 | 7,971 | |
| Long-term growth, percentage points | +/- 0.4 | - | - | 1,968 | -1,840 | |
| Long-term operating margin, percentage points | +/- 0.5 | - | - | 3,367 | -3,367 |
Market risks, EUR thousands
| Effect on profit/loss | 2021 | 2020 | 2021 | 2020 | ||
|---|---|---|---|---|---|---|
| and equity | Change, % | 30 Sep | 31 Dec | Cash flow and current earning | 30 Sep | 31 Dec |
| Currency rate, EUR/RUB | +/- 10 | 8,972 | 7,932 | Market interest rate, +/- 50 bps | +76 / -76 | +87 / -87 |
| Value of EC BPF II and MFG | +/- 10 | 11,415 | 10,215 | Market interest rate, +/- 100 bps | -377 / -152 | -107 / -173 |
| Cash flow and current earning | |
|---|---|
Assets and debts of foreign currency, EUR thousands
| Cash and liabilities | 2021 30 Sep |
2020 31 Dec |
Long-term securities holdings1 | 2021 30 Sep |
2020 31 Dec |
|---|---|---|---|---|---|
| Currency in SEK | 128 | 270 | Currency in rouble (RUB) | 89,719 | 79,320 |
| Lease liabilities in SEK | 390 | 468 |
1Holdings in JSC Melon Fashion Group.
INCOME STATEMENT - PARENT COMPANY
| 2021 | 2020 | 2021 | 2020 | 2020 | 2020/2021 | |
|---|---|---|---|---|---|---|
| EUR thousands | Jan-Sep | Jan-Sep | Jul-Sep | Jul-Sep | Jan-Dec | Oct-Sep |
| Other income | 1,411 | 1,304 | 470 | 435 | 1,738 | 1,846 |
| Central administration expenses | -2,631 | -2,316 | -714 | -866 | -3,104 | -3,419 |
| Operating profit/loss | -1,220 | -1,012 | -244 | -431 | -1,366 | -1,573 |
| Unrealised changes in value of investments | 10,399 | -9,716 | 9,537 | 8,690 | 12,423 | 32,538 |
| Dividend received from investments | 3,266 | - | - | - | - | 3,266 |
| Financial income | 1,580 | 1,034 | 897 | 347 | 1,381 | 1,927 |
| Financial expenses | -655 | -31 | -598 | -9 | -84 | -707 |
| Profit/loss before tax | 13,371 | -9,725 | 9,593 | 8,597 | 12,355 | 35,451 |
| Tax | - | - | - | - | - | - |
| Net profit/loss for the period/year | 13,371 | -9,725 | 9,593 | 8,597 | 12,355 | 35,451 |
BALANCE SHEET - PARENT COMPANY
| 2021 | 2020 | 2020 | |
|---|---|---|---|
| EUR thousands ASSETS Fixed assets Right-of-use asset, leaseholds Equipment Shares in group companies Long-term securities holdings Loans to group companies Total non-current assets Current assets Other current assets Cash and cash equivalents Total current assets TOTAL ASSETS EQUITY AND LIABILITIES Equity Restricted capital Share capital Unrestricted capital |
30 Sep | 31 Dec | 30 Sep |
| 409 | 491 | 518 | |
| 56 | 70 | 74 | |
| 104,004 | 142,447 | 142,430 | |
| 89,719 | 79,320 | 57,181 | |
| 73,027 | 27,527 | 27,527 | |
| 267,217 | 249,856 | 227,732 | |
| 2,046 | 1,398 | 2,427 | |
| 48,893 | 10,995 | 1,842 | |
| 50,939 | 12,393 | 4,269 | |
| 318,156 | 262,248 | 232,001 | |
| 3,660 | 3,660 | 3,660 | |
| Share premium reserve | 251,512 | 257,848 | 246,911 |
| Retained earnings including net profit/loss for the year | 12,880 | -491 | -22,571 |
| Total equity | 268,052 | 261,017 | 228,000 |
| Non-current liabilities | |||
| Interest-bearing liabilities | 45,000 | - | - |
| Lease liability | 390 | 468 | 494 |
| Other non-current liabilites | 205 | 113 | 77 |
| Total non-current liabilities | 45,595 | 581 | 572 |
| Current liabilities | |||
| Other liabilities | 3,465 | 155 | 2,888 |
| Accrued expenses and deferred income | 1,043 | 496 | 541 |
| Total current liabilities | 4,509 | 651 | 3,429 |
| TOTAL EQUITY AND LIABILITIES | 318,156 | 262,248 | 232,001 |
QUARTERLY OVERVIEW
INCOME STATEMENT
| EUR thousands | Q3 2021 | Q2 2021 | Q1 2021 | Q4 2020 | Q3 2020 | Q2 2020 | Q1 2020 | Q4 2019 |
|---|---|---|---|---|---|---|---|---|
| Rental income | 5,558 | 5,423 | 5,099 | 5,251 | 4,993 | 4,467 | 4,475 | 4,161 |
| Property expenses | -471 | -497 | -486 | -267 | -510 | -480 | -431 | -410 |
| Net operating income | 5,087 | 4,925 | 4,613 | 4,983 | 4,483 | 3,987 | 4,044 | 3,751 |
| Central administration expenses | -795 | -936 | -1,123 | -834 | -992 | -865 | -824 | -1,184 |
| Interest expenses | -1,729 | -1,108 | -1,014 | -1,029 | -959 | -852 | -863 | -790 |
| Other financial income and expenses | -68 | -46 | -22 | -59 | -14 | -100 | -95 | -78 |
| Profit from property management | 2,496 | 2,836 | 2,454 | 3,061 | 2,519 | 2,170 | 2,262 | 1,699 |
| Unrealised changes in values: | ||||||||
| Properties | -567 | 1,450 | 1,466 | 14,997 | -198 | 5,322 | -2,738 | 3,914 |
| Investments | 11,050 | -994 | 1,942 | 21,981 | 9,139 | 3,605 | -21,283 | 11,918 |
| Derivatives | 300 | 22 | 339 | -109 | -12 | -426 | -235 | 702 |
| Realised values and dividends from investments | - | 3,906 | - | 640 | - | - | - | 2,588 |
| Profit before tax | 13,279 | 7,220 | 6,201 | 40,570 | 11,448 | 10,671 | -21,994 | 20,821 |
| Deferred tax | 13 | -1,076 | -551 | -3,066 | -285 | -931 | -259 | -1,246 |
| Net profit/loss for the period | 13,292 | 6,144 | 5,649 | 37,504 | 11,163 | 9,740 | -22,253 | 19,575 |
BALANCE SHEET - CONDENSED
| 2021 | 2021 | 2021 | 2020 | 2020 | 2020 | 2020 | 2019 | |
|---|---|---|---|---|---|---|---|---|
| EUR thousands | 30 Sep | 30 Jun | 31 Mar | 31 Dec | 30 Sep | 30 Jun | 31 Mar | 31 Dec |
| Investment properties | 415,531 | 414,986 | 374,200 | 372,400 | 356,940 | 336,200 | 288,020 | 290,256 |
| Long-term securities holdings | 114,150 | 103,100 | 104,093 | 102,152 | 80,170 | 71,031 | 67,426 | 88,709 |
| Other assets | 5,352 | 4,340 | 4,151 | 3,395 | 8,541 | 13,077 | 3,831 | 3,951 |
| Cash and cash equivalents | 63,575 | 20,218 | 24,232 | 24,278 | 13,804 | 21,688 | 43,883 | 37,406 |
| TOTAL ASSETS | 598,608 | 542,644 | 506,677 | 502,225 | 459,456 | 441,996 | 403,160 | 420,322 |
| Shareholders' equity | 328,692 | 315,348 | 315,666 | 309,942 | 261,502 | 250,253 | 245,917 | 268,192 |
| Long-term interest-bearing liabilities | 236,201 | 192,829 | 151,832 | 153,208 | 168,568 | 159,338 | 137,907 | 132,571 |
| Current interest-bearing liabilities | 6,510 | 6,510 | 19,791 | 19,943 | 6,111 | 5,783 | 5,200 | 5,200 |
| Other liabilities | 27,205 | 27,957 | 19,387 | 19,131 | 23,275 | 26,622 | 14,136 | 14,359 |
| TOTAL EQUITY AND LIABILITIES | 598,608 | 542,644 | 506,677 | 502,225 | 459,456 | 441,996 | 403,160 | 420,322 |
QUARTERLY KEY FIGURES
| 100 | 101 | |||||||
|---|---|---|---|---|---|---|---|---|
| PROPERTY-RELATED | Q3 2021 | Q2 2021 | Q1 2021 | Q4 2020 | Q3 2020 | Q2 2020 | Q1 2020 | Q4 2019 |
| Leasable area, sq.m. thousand | 130.5 | 130.7 | 120.2 | 121.0 | 121.1 | 113.9 | 99.5 | 99.5 |
| Number of properties | 12 | 12 | 10 | 10 | 11 | 10 | 9 | 9 |
| Investment properties, EURk | 415,531 | 414,986 | 374,200 | 372,400 | 356,940 | 336,200 | 288,020 | 290,256 |
| Surplus ratio, % | 92 | 91 | 90 | 95 | 90 | 89 | 90 | 90 |
| Occupancy rate, financial, % | 89.6 | 92.3 | 90.4 | 92.1 | 94.0 | 96.3 | 92.5 | 92.0 |
| Average rent, EUR/sq.m./month | 15.0 | 15.0 | 15.0 | 14.9 | 14.8 | 14.9 | 15.0 | 14.7 |
| WAULT, year | 3.7 | 3.8 | 4.2 | 4.4 | 4.6 | 4.7 | 4.9 | 5.0 |
| Weighted yield requirement, % | 5.8 | 5.8 | 5.8 | 5.8 | 6.1 | 6.1 | 6.1 | - |
| Environmentally certified properties, % of sq.m. | 88 | 88 | 87 | 87 | 79 | 84 | 72 | 72 |
| FINANCIAL | Q3 2021 | Q2 2021 | Q1 2021 | Q4 2020 | Q3 2020 | Q2 2020 | Q1 2020 | Q4 2019 |
|---|---|---|---|---|---|---|---|---|
| Rental income, EURk | 5,558 | 5,423 | 5,099 | 5,251 | 4,993 | 4,467 | 4,475 | 4,161 |
| Net operating income, EURk | 5,087 | 4,925 | 4,613 | 4,983 | 4,483 | 3,987 | 4,044 | 3,751 |
| Profit from property management, EURk | 2,496 | 2,836 | 2,454 | 3,061 | 2,519 | 2,170 | 2,262 | 1,699 |
| Loan-to-value ratio, % | 46 | 38 | 36 | 36 | 40 | 41 | 40 | 36 |
| Net loan-to-value ratio, % | 34 | 35 | 31 | 31 | 37 | 35 | 28 | 26 |
| Loan-to-value ratio, properties (LTV), % | 58 | 48 | 46 | 46 | 49 | 49 | 50 | 47 |
| Net loan-to-value ratio, properties (LTV), % | 43 | 43 | 39 | 40 | 45 | 43 | 34 | 35 |
| Capital tie-up period, year | 2.8 | 3.0 | 2.7 | 3.0 | 3.2 | 3.1 | 3.3 | 3.5 |
| Interest tie-up period, year | 1.6 | 2.1 | 2.1 | 2.3 | 2.5 | 2.5 | 2.8 | 3.1 |
| Debt ratio, multiple | 15.2 | 13.2 | 12.0 | 12.4 | 14.1 | 15.2 | 15.0 | 17.1 |
| Equity/asset ratio, % | 55 | 58 | 62 | 62 | 57 | 57 | 61 | 64 |
| Interest coverage ratio, multiple | 2.4 | 3.6 | 3.4 | 4.0 | 3.6 | 3.5 | 3.6 | 3.2 |
| Average interest rate, % | 2.8 | 2.3 | 2.3 | 2.3 | 2.3 | 2.3 | 2.3 | 2.3 |
| Return on equity, % | 16.5 | 7.8 | 7.2 | 52.5 | 17.5 | 15.7 | -34.6 | 30.3 |
| SHARE-RELATED | Q3 2021 | Q2 2021 | Q1 2021 | Q4 2020 | Q3 2020 | Q2 2020 | Q1 2020 | Q4 2019 |
|---|---|---|---|---|---|---|---|---|
| Equity, EURk | 328,692 | 315,348 | 315,666 | 309,942 | 261,502 | 250,253 | 245,917 | 268,192 |
| Long-term net asset value (LT-NAV), EURk | 343,245 | 330,213 | 329,477 | 323,542 | 271,927 | 260,381 | 254,689 | 276,470 |
| Market capitalisation, EURk | 314,569 | 291,768 | 272,424 | 275,527 | 225,289 | 236,472 | 212,439 | 276,546 |
| Market capitalisation, SEK thousand | 3,189,465 | 2,959,115 | 2,790,782 | 2,768,633 | 2,364,465 | 2,474,440 | 2,309,477 | 2,905,881 |
| Number of shares issued at period end, thousand |
22,370 | 22,370 | 22,370 | 22,370 | 22,370 | 22,370 | 22,370 | 22,370 |
| Number of shares issued at period end, adjusted for repurchased shares, thousand |
22,149 | 22,149 | 22,149 | 22,149 | 21,149 | 21,149 | 21,149 | 21,149 |
| Weighted average number of shares, adjusted for repurchased shares, thousand |
22,149 | 22,149 | 22,149 | 21,627 | 21,149 | 21,149 | 21,149 | 21,187 |
| Cashflow per share from operating activities, EUR | 0.13 | 0.31 | 0.08 | 0.20 | 0.17 | 0.06 | 0.08 | 0.22 |
| Cashflow per share, EUR | 1.96 | -0.18 | 0.00 | 0.49 | -0.37 | -1.05 | 0.31 | -0.15 |
| Profit from property management per share, EUR | 0.11 | 0.13 | 0.11 | 0.14 | 0.12 | 0.10 | 0.11 | 0.08 |
| Earnings per share before dilution, EUR | 0.60 | 0.28 | 0.26 | 1.73 | 0.53 | 0.46 | -1.05 | 0.93 |
| Earnings per share after dilution, EUR | 0.60 | 0.28 | 0.25 | 1.73 | 0.53 | 0.46 | -1.05 | 0.93 |
| Equity per share, EUR | 14.8 | 14.2 | 14.3 | 14.0 | 12.4 | 11.8 | 11.6 | 12.7 |
| Equity per share, SEK | 150 | 144 | 146 | 141 | 130 | 124 | 126 | 133 |
| Long-term net asset value per share, EUR | 15.5 | 14.9 | 14.9 | 14.6 | 12.9 | 12.3 | 12.0 | 13.1 |
| Long-term net asset value per share, SEK | 157 | 151 | 152 | 147 | 135 | 129 | 131 | 137 |
| Share price, EUR | 14.2 | 13.2 | 12.3 | 12.4 | 10.7 | 11.2 | 10.0 | 13.1 |
| Share price, SEK | 144.00 | 133.60 | 126.00 | 125.00 | 111.80 | 117.00 | 109.20 | 137.40 |
| OTHER | Q3 2021 | Q2 2021 | Q1 2021 | Q4 2020 | Q3 2020 | Q2 2020 | Q1 2020 | Q4 2019 |
|---|---|---|---|---|---|---|---|---|
| EUR/SEK | 10.14 | 10.14 | 10.24 | 10.05 | 10.50 | 10.46 | 10.87 | 10.51 |
| EUR/RUB | 84.35 | 86.63 | 88.76 | 90.50 | 91.00 | 80.03 | 85.73 | 69.72 |
INTERPRETATION OF KEY FIGURES
| Q3 2021 | Q2 2021 | Q1 2021 | Q4 2020 | Q3 2020 | Q2 2020 | Q1 2020 | Q4 2019 | |
|---|---|---|---|---|---|---|---|---|
| Rental income | 5,558 | 5,423 | 5,099 | 5,251 | 4,993 | 4,467 | 4,475 | 4,161 |
| Net operating income | 5,087 | 4,925 | 4,613 | 4,983 | 4,483 | 3,987 | 4,044 | 3,751 |
| Surplus ratio, % | 92 | 91 | 90 | 95 | 90 | 89 | 90 | 90 |
| Investment properties and | ||||||||
| Long-term securities holdings | 529,682 | 518,086 | 478,293 | 474,552 | 437,110 | 407,231 | 355,446 | 378,965 |
| Interest-bearing liabilities | 242,711 | 199,339 | 171,623 | 173,151 | 174,679 | 165,121 | 143,107 | 137,771 |
| Loan-to-value ratio, % | 46 | 38 | 36 | 36 | 40 | 41 | 40 | 36 |
| Investment properties and | ||||||||
| Long-term securities holdings | 529,682 | 518,086 | 478,293 | 474,552 | 437,110 | 407,231 | 355,446 | 378,965 |
| Interest-bearing liabilities | 242,711 | 199,339 | 171,623 | 173,151 | 174,679 | 165,121 | 143,107 | 137,771 |
| Cash and cash equivalents | 63,575 | 20,218 | 24,232 | 24,278 | 13,804 | 21,688 | 43,883 | 37,406 |
| Net loan-to-value ratio, % | 34 | 35 | 31 | 31 | 37 | 35 | 28 | 26 |
| Investment properties | 415,531 | 414,986 | 374,200 | 372,400 | 356,940 | 336,200 | 288,020 | 290,256 |
| Interest-bearing liabilities | 242,711 | 199,339 | 171,623 | 173,151 | 174,679 | 165,121 | 143,107 | 137,771 |
| Loan-to-value ratio, properties (LTV), % | 58 | 48 | 46 | 46 | 49 | 49 | 50 | 47 |
| Investment properties | 415,531 | 414,986 | 374,200 | 372,400 | 356,940 | 336,200 | 288,020 | 290,256 |
| Interest-bearing liabilities | 242,711 | 199,339 | 171,623 | 173,151 | 174,679 | 165,121 | 143,107 | 137,771 |
| Cash and cash equivalents | 63,575 | 20,218 | 24,232 | 24,278 | 13,804 | 21,688 | 43,883 | 37,406 |
| Net loan-to-value ratio, properties (LTV), % | 43 | 43 | 39 | 40 | 45 | 43 | 34 | 35 |
| Equity | 328,692 | 315,348 | 315,666 | 309,942 | 261,502 | 250,253 | 245,917 | 268,192 |
| Add back derivatives | 2,084 | 2,384 | 2,405 | 2,745 | 2,636 | 2,624 | 2,198 | 1,963 |
| Add back deferred tax | 12,469 | 12,482 | 11,406 | 10,855 | 7,789 | 7,504 | 6,574 | 6,315 |
| Long-term net asset value, EURk | 343,245 | 330,213 | 329,477 | 323,542 | 271,927 | 260,381 | 254,689 | 276,470 |
| Net operating income | 19,609 | 19,005 | 18,067 | 17,497 | 16,265 | 14,577 | 13,301 | 11,946 |
| Central administration expenses | -3,688 | -3,885 | -3,815 | -3,515 | -3,865 | -3,699 | -3,770 | -3,873 |
| Total | 15,921 | 15,119 | 14,252 | 13,982 | 12,400 | 10,878 | 9,531 | 8,074 |
| Interest-bearing liabilities | 242,711 | 199,339 | 171,623 | 173,151 | 174,679 | 165,121 | 143,107 | 137,771 |
| Debt ratio, multiple | 15.2 | 13.2 | 12.0 | 12.4 | 14.1 | 15.2 | 15.0 | 17.1 |
| Profit from property management | 2,496 | 2,836 | 2,454 | 3,061 | 2,519 | 2,170 | 2,262 | 1,699 |
| Interest expenses | 1,729 | 1,108 | 1,014 | 1,029 | 959 | 852 | 863 | 790 |
| Profit before interest expenses | 4,225 | 3,943 | 3,468 | 4,090 | 3,478 | 3,022 | 3,125 | 2,489 |
| Interest coverage ratio, multiple | 2.4 | 3.6 | 3.4 | 4.0 | 3.6 | 3.5 | 3.6 | 3.2 |
| Net profit, annualised | 53,166 | 24,576 | 22,598 | 150,016 | 44,652 | 38,960 | -89,012 | 78,302 |
| Average equity | 322,020 | 315,507 | 312,804 | 285,722 | 255,877 | 248,085 | 257,055 | 258,388 |
| Return on equity, % | 16.5 | 7.8 | 7.2 | 52.5 | 17.5 | 15.7 | -34.6 | 30.3 |
Q3
Definitions and glossary
Eastnine applies the European Securities and Markets Authority (ESMA) guidelines on alternative performance measures. The Company considers that these measures provide valuable information to investors and the Company's management as they enable evaluation and comparison of the Company's financial position, financial results and cash flow. These financial measures and key figures shall be regarded as a complement to the measures defined in compliance with IFRS. The following key figures are not defined according to IFRS unless otherwise stated.
PROPERTY-RELATED KEY FIGURES
Average rental income
Average rent at the end of the period.
Lettable area Total area available for letting.
Occupancy rate, by area
Occupancy rate in relation to lettable area.
Occupancy rate, financial
Contracted annual rent at the end of the period in relation to the rent value.
This indicator is used to facilitate the estimation of rental income for vacant premises and other financial vacancies.
Rental value
Contracted annual rents which are current at the end of the period with supplements for discounts and estimated market rent for vacant premises.
Surplus ratio
Net operating income in relation to rental income.
Triple-net rent
Lease agreements where the tenant, in addition to the base rent, also pays costs related to the leased area. These costs include operational and maintenance costs, property taxes, site leasehold fees, insurance and property upkeep.
Vacancy rate, by area
Vacancy rate in relation to lettable area.
Vacancy rate, financial
Annual rent for vacant premises at the end of the period in relation to the rent value at the end of the period.
WAULT
Average remaining agreement term of rental agreements at end of period, weighted according to contracted rental income. The indicator shows the weighted risk of future vacancies.
Yield, earning capacity
Net operating income in relation to the book values of the properties, excluding development properties.
Yield requirement, properties
The yield requirement is used in valuations and relate to the yield requirement at the end of the calculation period. The yield requirement is based on the market return requirement for similar investment objects, with the addition of risks related to real estate, such as geographical location, the condition of the properties and future vacancy risk.
FINANCIAL KEY FIGURES
Average interest rate
Average interest rate on interest-bearing liabilities at the end of the period.
Capital tie-up period
Average remaining term for interest-bearing liabilities by the end of the period.
Debt coverage ratio
Interest-bearing liabilities at the end of the period in relation to the rolling twelve-month net operating income less deductions for the rolling twelve-month central administration expenses.
EBITDA
Earnings before interest, tax, depreciation and amortisation.
Equity/asset ratio
Equity in relation to total assets.
Fixed interest term
Average remaining fixed interest term for interest-bearing liabilities by the end of the period.
Interest coverage ratio
Profit from property management, with reversal of interest expenses, in relation to interest expenses.
Loan-to-value ratio
Interest-bearing liabilities in relation to the sum of the values of investment properties and long-term securities holdings.
Loan-to-value ratio (LTV), properties
Interest-bearing liabilities in relation to the value of investment properties.
Net loan-to-value ratio
Q3
Interest-bearing liabilities after deduction for cash, in relation to the sum of the values of investment properties and long-term securities holdings.
Net loan-to-value ratio (LTV), properties
Interest-bearing liabilities after deduction for cash, in relation to the value of investment properties.
Net operating income
Rental income less property expenses.
Profit from property management
Earnings before value changes, dividends received and taxes.
Rental income
Debited rents, rental accruals, and rental guarantees less rental discounts.
Return on equity
Net profit/loss for the period, recalculated on a 12-month basis, in relation to average equity.
SHARE-RELATED KEY FIGURES
Cash flow per share
Period's cash flow divided by the weighted average number of shares during the period.
Cash flow from operating activities per share
Period's cash flow from operating activities divided by the weighted average number of shares during the period.
Earnings per share (definition according to IFRS)
Profit/loss for the period attributable to the Parent Company's owners in relation to the average number of shares issued (excluding repurchased shares held in treasury).
Equity per share
Total equity in relation to the number of shares issued (excluding treasury shares).
Long-term net asset value
Equity with reversal of derivatives and deferred tax liabilities according to the balance sheet.
Long-term NAV per share
Long-term net asset value in relation to the number of shares issued (excluding treasury shares).
Profit from property management per share
Profit from property management divided by the average number of shares during the period.
GLOSSARY
Break option
Unilateral option allowing the tenant to terminate the lease agreement prematurely. The clause usually refers to a right on the part of the tenant to terminate a lease without additional rent payments.
Fair value
Fair value is the price at which a property transfer may take place between independent and informed parties which have an interest in the transaction taking place. Fair value is considered to be equal to the acquisition value at the acquisition date, after which the fair value may change over time.
Green leases
Lease agreements where Eastnine and the tenant has agreed on proactive efforts to promote and improve the sustainability of the property/premises.
GRESB
Short for Global Real Estate Sustainability Benchmark.
Gross area
Gross area is the sum of the area of all the floors up to the exterior of the surrounding building sections. The term is used e.g. with regards to property valuations.
ICT
Short for Information and Communication Technology.
IFRS
Abbreviation for International Financing Reporting Standard. IFRS is an international reporting standard for the preparation of group statements.
Interest derivatives
Agreements for the purchase and sale of interest, the price and conditions of which depend on factors such as time, inflation rates, and market. Derivative agreements are usually entered into in order to ensure predictable interest rate levels for some part or the entirety of the interest-bearing loans. Interest rate swaps are a type of derivative where the value on balance day is zero and which expires without further payment flows.
Net asset value discount/premium
The difference between net asset value and market capitalisation. If market cap is lower than NAV the shares are traded at a NAV discount; if market cap is higher, shares are traded at a premium.
Net letting
Annual rent income from contracts signed during the period less that of contracts terminated during the period.
Property
Relates to real estate in possession through ownership or site leaseholds.
Share buy-back
Purchasing of own shares on the stock market. Swedish companies have the option to own up to 10 per cent of the total number of shares they have issued, given approval from the AGM.
Sustainability certification frameworks
BREEAM is an abbreviation of Building Research Establishment Environmental Assessment Method.
LEED is an abbreviation of Leadership in Energy and Environmental Design.
Zero-interest floor
Clause in credit agreements meaning that a negative Euribor interest rate is considered as zero.
Q3 EASTNINE INTERIM REPORT JANUARY - SEPTEMBER 2021 31
Financial calendar
Year-end report 2021: 11 February 2022 Annual General Meeting 2022: 26 April 2022 Interim report January-March 2022: 4 May 2022 Interim report January-June 2022: 14 July 2022 Interim report January-September 2022: 9 November 2022 Year-end report 2022: 8 February 2023
Payments of shareholder dividends:
Dividend record date 16 November 2021 Expected date of payment 19 November 2021
Dividend record date 1 February 2022 Expected date of payment 4 February 2022
Subscribe and have financial statements and press releases sent to your e-mail at www.eastnine.com or by sending a message to [email protected].
The information in this interim report is the information which Eastnine AB is required to disclose under the EU Market Abuse Regulation Act. The report was released for publication at 07.00 a.m. CET on 10 November 2021.
Contact information
Kestutis Sasnauskas, CEO, +46 8 505 977 00 Britt-Marie Nyman, CFO and deputy CEO, +46 70 224 29 35
Eastnine AB Kungsgatan 30, Box 7214 SE-103 88 Stockholm, Sweden Tel: +46 8 505 977 00 www.eastnine.com Corporate ID no. 556693-7404
The entire S7-area in Vilnius, three-quarters of which is owned by Eastnine, is appreciated for its architecture and the surroundings. Danske Bank rents three out of four properties and Telia the fourth.