In the first half of 2025, in both Q1 and Q2, the market continued to recover. In addition to the contracts under the law of obligations (sales contracts), there was also strong interest in paid reservations in new projects. During Q2, we signed a total of 31 sales contracts (Q1 2025: 25; Q2 2024: 47) and in total we have signed 52 sales contracts in six months of 2025 (2024: 63). The largest contribution to new contracts signed during the second quarter came from the soon-to-be-in-construction Luuslangi project, and from the Regati development under construction. The biggest contribution to the sales revenue in the Q2 came from the completed and delivered Iseära apartments. Sales of previously completed homes took place in the Luuslangi project.

The weekly sales ratio, which reflects the number of homes going out of supply through either sales contracts or paid reservations reached its highest level in recent years during the second quarter, exceeding 4% in May. The average performance for the Q2 (2.6%) exceeded both the Q1 2025 average (1.8%) and the long-term average. The long-term average is considered to be 1.5-2.0%.

Sales contracts signed during the period that are not transferred under a real right contract within the same period are recognised as presales. At the beginning of the quarter, the estimated value of previously recognised presales was EUR 40.7 million (EUR 35.6 million at the beginning of 2025), all related to projects scheduled for completion in 2025. During the quarter, we signed new contracts totalling EUR 7.8 million in sales revenue, of which EUR 5.9 million were recognised as presales. This includes contracts for buildings scheduled for completion in 2026. Including earlier presales, we enter the second half of 2025 with 88 sales contracts in projects completing in 2025, amounting to EUR 38.2 million in sales revenue.

In Q2 of 2025, the apartment buildings of the II phase of the Iseära project were completed and 32 homes were delivered to customers. In addition, we sold 3 previously completed homes in the Luuslangi development. In total, we handed over 35 apartments during the period (Q1 2025: 6; Q2 2024: 29). The sales revenue for the second quarter was EUR 7 388 thousand (Q1 2025: EUR 1 931 thousand; Q2 2024: EUR 8 546 thousand) and the net profit for the quarter was EUR 974 thousand (Q1 2025: EUR -705 thousand; Q2 2024: EUR 443 thousand).

During the first 6 months, we delivered a total of 41 new homes (2024: 41), generated sales revenue of EUR 9 319 thousand (2024: EUR 12 045 thousand) and a net profit of EUR 269 thousand (2024: EUR 293 thousand).

The balance of cash and cash equivalents decreased by EUR 342 thousand during the quarter to EUR 9 574 thousand. Total assets increased by EUR 6 340 thousand during the quarter to EUR 95 149 thousand at the end of the period. The increase in assets was mainly due to the construction of the Regati project.

Total borrowings increased by EUR 1,856 thousand to EUR 59,540 thousand. New construction loans of EUR 7,078 thousand were drawn during the quarter (including EUR 5,390 thousand for the Regati project), resulting in a net increase of EUR 3,693 thousand after repayments. Other loan commitments were reduced by EUR 1,800 thousand. While no significant changes in total borrowings are expected next quarter, the balance is set to decline notably by year-end as construction completes and homes are delivered.

Consolidated statement of financial position

Consolidated statement of comprehensive income

The customer satisfaction score for the last 12 months, collected at different stages of the customer journey, remained to 9.5 out of 10 at the end of the quarter (Q1 2025: 9.5; Q2 2024: 8.0).

Key events in development projects
In April, Liven AS signed a cooperation agreement with Oma Grupp OÜ for the first phase of the Peakorter development at Erika 6a and 6b in Põhja-Tallinn. PIN Arhitektid OÜ designed two six-storey residential buildings and a nine-storey building combining a reconstructed water tower and a new extension, forming a quarter with approx. 5,000 m² of saleable area and 68 homes. Pre-sales began during the quarter, construction is planned for autumn 2025, and completion is scheduled for 2027. The project is being developed by EK 6 OÜ, a joint venture between Liven AS and Oma Grupp OÜ, with Oma Ehitaja AS as the general contractor. Liven AS will acquire its stake in the joint venture in Q3 2025.

In April, we started pre-sales of homes in the Virmalise development project in the Uus Maailm neighborhood in central Tallinn. The Virmalise project will include 28 homes, with construction scheduled to start in the third quarter of 2025 (building permit issued in July) and finish in 2026.

During the quarter, Iseära second phase apartment buildings were completed and during May-June we handed over 89% of the completed homes to our customers.

In June, we signed a contract under the law of obligations for the transfer of part of the commercial property at Kadaka 88. Due to the transaction and the reclassification of the part of the property to be disposed of as investment property, the impact of the transaction is included in other operating income.

During the summer, key milestones were reached in the Wohngarten project: the first obligation contracts were signed with future homeowners, and a general construction contract was concluded. After the reporting date, a contract was also signed with Mitt & Perlebach OÜ for the construction of Luuslangi phase II. Building will begin on 1 August 2025, with completion of 39 new homes expected in autumn 2026.

Annual General Meeting of Shareholders
The annual general meeting of shareholders of Liven AS was held on 14 May. The meeting was attended by 22 shareholders representing 99.3% of the total votes. The shareholders approved the annual report for the year 2024, decided to pay dividends of EUR 180 thousand (25% of the profit before income tax for 2024) in accordance with the dividend policy and appointed KPMG Baltics OÜ as auditor for the years 2025-2026.

Significant developments in the economic environment in the period under review
The downward trend in the 6-month Euribor (Euribor) rate seen throughout the previous year continued in the second quarter of 2025. By the end of the quarter, the Euribor rate had fallen to 2.05% (31.03.2025: 2.34%; 31.12.2024: 2.57%).

As inflation in the euro area has fallen close to the European Central Bank’s long-term target (2%) and to support economic growth in the European Union by reducing the negative impact of the US tariffs, the Governing Council of the European Central Bank continued to ease monetary policy by lowering its key interest rates four times in the first half of 2025 (by a total of 100 basis points). According to economic analysts, a few more rate cuts could follow in the second half of the year, but with inflation remaining close to target, a stabilisation or moderate decline in interest rates is more likely.

In Estonia, the annual consumer price growth in the second quarter of 2025 was faster than in the euro area, with prices rising by 4.8% year-on-year (Q1 2025: 4.4%; Q2 2024: 2.5%). According to Eesti Pank’s latest forecast, average inflation in 2025 will be around 5.4%, reflecting the impact of production costs, tax increases and continued wage growth. The consumer price index has risen by 2.9% over the past six months.

According to the latest data from Statistics Estonia, average gross wages rose by 7.5% year-on-year in the Q2 of 2025, outpacing consumer price inflation. However, consumer confidence remained very low and has been so for a long time. From 2022 onwards, consumers are more likely to consider buying durable goods in the next 12 months as a bargain than they do now, so the general mood is to continue to be on hold and delay purchasing decisions. According to the latest data from the Institute of Economic Research, the consumer confidence indicator remains very low in the second quarter. Average gross wages have risen by 7.3% over the past six months in two quarters. At the same time, consumer confidence has remained stable at a very low level.

According to the Land and Spatial Development Board’s purchase and sales statistics, the number of transactions of apartments in Tallinn increased by 6.9% in the second quarter of 2025 compared to the previous quarter (Q2 2025: 2 291; Q1 2025: 2 133 transactions). Compared to the same period of the previous year, the increase was 15.6%, indicating an increase in home buyer activity. The number of transactions in the first half of 2025 reached 4 424, up 16.8% on the same period of the previous year (first half of 2024: 3 682 transactions). Transaction activity has increased mainly in the secondary market, but there has also been a pick-up in the new developments segment, pointing to a gradual market recovery.

Compared to the first quarter of 2025, the supply prices of new developments remained at a similar level in the second quarter of 2025, increasing by only 0.65%. Based on data collected from the market, the number of transactions completed increased by 29% compared to the previous quarter (Q1 2025: 407 transactions; Q4 2024: 559 transactions), remaining at a similar level to the sales results of Q2 2024 (513 transactions). Compared to the first half of 2025, the number of offers has increased by 9.7% and the average price per square meter by 2.6%, indicating a moderate increase in supply and prices. The increase in the VAT rate from 1 July 2025 (from 22% to 24%) will increase the price burden for end-users, with a negative impact on the market for new developments in the upcoming quarters.

The stock of unsold ready-to-move-in apartments was estimated at 1 008 apartments at the end of Q2 (2025 Q1: 990; 2024 Q2: 904). The stock has remained relatively stable over the last 10 months at around 1 000 apartments. This means that homebuyers continue to have a wide range of options, and market competition remains elevated.

Outlook for the future
Since the spring of this year, Liven has added a number of new projects to its portfolio, which have seen active interest and a high number of paid reservations by the clients. In the second half of the year, we therefore expect the number sales contracts under the law of obligations to increase and construction works on new projects to begin.

Similar to Q1 2025, we expect continued recovery in the economic environment and demand for new residential real estate in the upcoming months. However, market activity and demand remain largely dependent on external factors, particularly interest rates, geopolitics, the tax environment, and consumer confidence. Expectations for interest rates and real wages suggest that improvements will continue in the second half of 2025, supporting increased affordability — although at a slower pace. Additionally, the income tax rate increase at the beginning of 2025, new taxes, the VAT rate increase from July, and persistently high inflation are expected to further slow the pace of affordability improvement.

We are still waiting for the drawn-out processes for adoption of the detailed spatial plans for Kadaka tee 88, Juhkentali 48 and Erika 12 to finalised in 2025.

The financial results for Q2 and for the first half of 2025 were largely in line with expectations, taking into account the timing of construction completions in development projects and the volume of sales. In 2025, we can still deliver up to 194 residential and commercial units in total (of which 41, or 21%, were handed over in the first 6 months), with a maximum potential revenue of up to 75 million euros (of which 9.3 million euros, or 12%, was recognised in the first 6 months).

If the pace of sales seen over the past six months continues, we continue to expect revenue to reach around 55 million euros in 2025 and assume that this will be sufficient to achieve the 20% return on equity target. Construction will be completed and homes handed over in the second half of 2025 in the terraced houses of the Iseära project and in the Regati project. The majority of revenue and profit will be generated in the second half of the year, especially in the final quarter. For the projects to be completed during 2025 we had 88 units with a revenue value of 38 million euros sold under contracts under the law of obligations by the end of the second quarter. (31.03.2025: 104 and 41 million euros; 31.12.2024: 86 and 36 million euros).

With construction completions and home deliveries, we forecast that the balance of borrowings will decrease by the end of the year to a level below that at the beginning of 2025. As is characteristic of Liven’s business model, construction loan volumes are cyclical and depend heavily on the composition of the development portfolio. Therefore, we anticipate loan volumes to increase again in the first half of 2026, primarily due to the financing needs of new construction projects.

Real estate development is characterized by a long-time lag in results and higher marketing costs in the periods before sales volumes start to grow. In addition to the ongoing constructions, we are working hard on pre-sales and construction starts of new projects and phases that will have an impact on 2026 results. This also includes the development project at Erika 6a and 6b, the impact of which will be seen in the results of 2027.

Liven’s development portfolio has sufficient volume for the next 4–5 years. However, we continue to seek new sites and actively negotiate acquisitions or joint developments with landowners to expand the portfolio.