Comment from Fund Manager Viljar Arakas
Comment from Fund Manager Viljar ArakasExcluding revaluations of investment properties, EfTEN Real Estate Fund AS achieved the strongest operating results in its history in 2025. The Fund’s consolidated rental income increased by 3.1% compared to the previous year, driven primarily by the addition of new logistics centres and elderly care facilities to the investment portfolio. Overall vacancy across the Fund’s property portfolio remained at a low level.
In addition to revenue growth, the Fund’s results were positively affected by a decrease in interest expenses resulting from the decline in EURIBOR. At the end of 2025, the weighted average interest rate on the Fund’s bank loans amounted to 3.99%, which is 0.9 percentage points lower than a year earlier.
As a result of higher rental income and lower interest expenses, EfTEN Real Estate Fund AS generated a record level of free cash flow. In accordance with the Fund’s dividend policy, this would allow for the distribution of gross dividends of 91 cents per share, representing an increase of 17% compared to the previous year. The cash balance held by the Fund’s subsidiaries, together with refinancing opportunities, enables the Fund’s management to propose to the General Meeting of Shareholders the payment of an even 8% higher dividend, compared to last year – EUR 1.2 per share. At the same time, the share of bank loan refinancing planned to finance dividend payments is lower than in the previous year.
Financial overview
Based on unaudited results, EfTEN Real Estate Fund AS generated consolidated rental income of EUR 32.036 million in 2025 (2024: EUR 31.079 million) and EBITDA of EUR 26.805 million (2024: EUR 26.454 million). Compared to the previous year, rental income increased by 3.1% and EBITDA by 1.3%.
In 2025, the Fund’s consolidated EBITDA exceeded interest expenses by 4.0 times (2024: 3.0 times). By year-end, the weighted average interest rate on bank loans decreased to 3.99%, which is 0.9 percentage points lower than as at 31 December 2024. The debt service coverage ratio (DSCR) of the investment portfolio amounted to 2.01 in 2025 (2024: 1.7).
During 2025, the Fund invested EUR 11.3 million in real estate projects, including EUR 6.5 million in care homes, EUR 2.5 million in the Paemurru logistics centre and EUR 0.567 million in the reconstruction of office premises at Pärnu mnt 102 in Tallinn. The remaining EUR 1.7 million was invested in the Fund’s existing investment properties.
As at the end of 2025, the Fund’s consolidated vacancy rate was 3.2% (31 December 2024: 2.6%). The highest vacancy was in the office segment (14.4%), while vacancy in the logistics segment was 1.4% and in the retail segment 0.4%.
In 2025, EfTEN Real Estate Fund AS generated adjusted cash flow (EBITDA less interest expenses and loan principal repayments) of EUR 13.1 million, representing an increase of 18% compared to the previous year. According to management’s assessment, the free cash held by the Fund’s subsidiaries and available refinancing options allow for an increase in the dividend payment of up to EUR 1.2 per share (net), which is 8.1% higher than in the previous year.
In December 2025, EfTEN Real Estate Fund AS earned consolidated rental income of EUR 2.956 million, which is EUR 253 thousand higher than in November. EBITDA for December amounted to EUR 2.355 million, increasing by EUR 79 thousand month-on-month. The increase in rental income was mainly driven by turnover-based rents in shopping centres.
In December, an independent valuer, Colliers International, carried out the regular valuation of the investment properties, as a result of which the fair value of the Fund’s real estate portfolio decreased by EUR 4.005 million (1%). The decrease in value was mainly related to DSV Estonia logistics center, where the departure of the anchor tenant in the fourth quarter of 2026 is likely to require future reconstruction of warehouse premises.
As at 31 December 2025, the net asset value (NAV) per share of EfTEN Real Estate Fund AS was EUR 20.3217 and EPRA NRV EUR 21.2676. In December, the NAV per share was negatively impacted by the loss from the non-monetary revaluation of investment properties and by the recognition of deferred income tax expense related to the planned dividend distribution. As a result, NAV and EPRA NAV decreased by 1.9% and 1.6%, respectively, during December. Excluding the aforementioned exceptional impacts, the Fund’s NAV per share would have increased by 0.8% in December.
