Management Board of Northern Horizon Capital AS has approved the unaudited financial results of Baltic Horizon Fund (the Fund) for the twelve months of 2024. The financial results remained unchanged compared to the preliminary disclosure on 17 February 2025.
Executing our strategy
In 2024, the Fund’s management team made the strategic decision to implement key performance indicators (KPIs) as a means to effectively measure and track performance. This decision stems from the recognition that clear and measurable benchmarks are essential for evaluating progress towards the Fund’s objectives. By defining specific KPIs, the team aims to enhance transparency, accountability, and facilitate decision-making processes.
The focus of the Fund management team will be on these major objectives:
- Actual portfolio occupancy of at least 90% by end of 2025;
- Loan-to-Value target at 50% or lower;
- To consider disposing of non-strategic assets over the next 12 months;
- Clear ESG and refurbishment strategy for the next 1-2 years with an aim to reach the portfolio’s NOI potential of 130 EUR/sq.m. by 2027.
As we recap our goals for 2024, we are pleased to report the following achievements:
- We have successfully achieved 100% portfolio BREEAM certification.
- Despite receiving a 3-star GRESB rating in 2024, we have thoroughly analysed the assessment results and developed an action plan to achieve a 4-star GRESB rating in 2025.
- Although we did not reach our target of 90% portfolio occupancy by the end of 2024, we made significant progress, achieving an 86.5% occupancy rate based on lease signing date with actual occupancy subsequently increasing as tenants move in.
- We have recently announced our disposal strategy to reduce LTV levels. Some disposal processes have commenced as of February 2025, with the possible closing of transactions planned for later in the year.
- Looking ahead to 2025, we will continue with the same solid strategy and goals that will stabilize the Fund’s financial position and maximize the potential of its portfolio.
Outlook
In 2025 the Fund will focus on flexible and sustainable solutions to meet tenant demands and market conditions. Our key goals are increasing the occupancy of the portfolio and decreasing the LTV by way of repaying part of the bonds.
The Fund’s management has taken proactive measures to enhance financial stability by reducing leverage through partial bond repayment. This strategy aims to alleviate financial pressure, positioning the Fund for more sustainable financial performance.
In 2025, we will continue advancing our social and environmental commitments. We achieved 98% green leases across our portfolio, with a target to further increase this share in the coming year.
Simultaneously, to reinforce its financial position, the Fund is committed to improving its debt service ratio and reducing loan-to-value levels. By focusing on increasing occupancy rates and optimizing property concepts, we aim to enhance asset performance and maximize net operating income. Adaptive leasing strategies, property repositioning, and targeted investments in high-demand segments will remain key priorities. These initiatives are designed to create long-term value for investors while ensuring the Fund remains resilient in a dynamic market environment.
Baltic Horizon achieves a 100% BREEAM certified portfolio
During 2024, Baltic Horizon achieved its first BREEAM Excellent certificate, when Meraki business center received its final certification. During 2025 the Fund will focus on renewals of the relevant certifications to maintain 100 % of certification coverage.
GRESB benchmarking
In 2024 the Fund received a 3-star GRESB rating. The Fund increased its scoring in the management section from 27 points to 29 points (out of 30) but the score in the performance section decreased from 55 points to 50 points (out of 70) due to lack of data from the properties that were sold during the reporting period and the review of data by an external party. During 2024, the Fund has implemented a GRESB improvement plan and aims to receive 4-stars again in the year 2025.
Net result and net rental income
In 2024, the Group recorded a net loss of EUR 16.8 million compared with a net loss of EUR 23.0 million for 2023. The result was mainly driven by the property valuation loss. Earnings per unit for 2024 were negative at EUR 0.13 (2023: negative at EUR 0.19).
The Group earned consolidated net rental income of EUR 11.6 million in 2024 (2023: 14.6 million). The results for 2023 include two months’ net rental income of the Domus Pro Retail and Office property (EUR 0.3 million) and five months’ net rental income of the Duetto properties (EUR 1.2 million), which were sold in February and May 2023, respectively.
On an EPRA like-for-like basis, the portfolio net rental income in 2024 was 11.8% lower than in 2023, mainly due to vacancies in office properties in Latvia due to the expiry of the agreement with the main tenant in Upmalas Biroji BC and 100% vacancy of S27, as well as lower rental income in Europa due to the new anchor tenant IKI equipping the premises and opening in March.
Portfolio properties in the retail segment contributed 53.3% (like-for-like 2023: 43.6%) of net rental income in 2024, followed by the office segment with 41.7% (like-for-like 2023: 50.9%) and the leisure segment with 5.0% (2023: 5.5%).
Retail assets located in the central business districts (Postimaja, Europa and Galerija Centrs) accounted for 42.2% of total portfolio net rental income in 2024. Total net rental income attributable to neighbourhood shopping centres was 11.1% in 2024.
In 2024, investment properties in Latvia and Lithuania contributed 44.4% (like-for-like 2023: 41.8%) and 22.8% (like-for-like 2023: 31.1%) of net rental income, respectively, while investment properties in Estonia contributed 32.8% (like-for-like 2023: 27.1%).
Investment properties
At the end of 2024, the Baltic Horizon Fund portfolio consisted of 12 cash flow generating investment properties in the Baltic capitals. The fair value of the Fund’s portfolio was EUR 241.2 million at the end of December 2024 (31 December 2023: EUR 250.4 million) and incorporated a total net leasable area of 118.3 thousand sq. m. The change in portfolio value was mainly driven by the changes in exit yields and upward adjustments of the weighted average cost of capital (WACC). During 2024 the Group invested approximately EUR 6.0 million in tenant fit-outs.
Gross Asset Value (GAV)
As of 31 December 2024, the Fund’s GAV was EUR 256.0 million (31 December 2023: EUR 261.1 million). The decrease compared to the prior year was mainly related to the negative revaluation of the Fund’s investment properties of approx. EUR 15.6 million and was partly offset by the private placement of new units which took place in September and resulted in a cash increase of approx. EUR 6.29 million.
Net Asset Value (NAV)
As of 31 December 2024, the Fund’s NAV was EUR 98.1 million (31 December 2023: EUR 109.5 million). The NAV decrease was mainly due to the revaluation of investment properties. At the end of September 2024 23,927,085 new units were issued resulting in approx. EUR 6.29 million of new equity. As of 31 December 2024, IFRS NAV per unit amounted to EUR 0.6833 (31 December 2023: EUR 0.9156), while EPRA net tangible assets and EPRA net reinstatement value were EUR 0.7267 per unit (31 December 2023: EUR 0.9546). EPRA net disposal value was EUR 0.6797 per unit (31 December 2023: EUR 0.9122).
Interest-bearing loans and bonds
As of 31 December 2024, interest-bearing loans and bonds (excluding lease liabilities) were EUR 149.0 million (31 December 2023: EUR 143.5 million). Annual loan amortisation accounted for 1.5% of total debt outstanding. In July 2024, the Fund successfully signed the Meraki loan with Bigbank for a total amount of EUR 10.3 million. A major part of the loan was used to repay short term bonds in the amount of EUR 8.0 million maturing in July 2024. As of 31 December 2024, the Fund’s consolidated cash and cash equivalents amounted to EUR 10.1 million (31 December 2023: EUR 6.2 million).
Cash flow
Cash inflow from core operating activities in 2024 amounted to EUR 9.9 million (2023: cash inflow of EUR 11.4 million). Cash inflow from core operating activities decreased mainly due to the sale of Duetto and Domus Pro properties in H1 2023 and higher vacancies, mostly in S27 and Upmalas Biroji. Cash outflow from investing activities was EUR 7.0 million (2023: cash inflow of EUR 19.9 million) due to investments in existing properties and transaction costs. Cash inflow from financing activities was EUR 1.0 million (2023: cash outflow of EUR 30.5 million). In Q4 2024, the Fund prepaid loans in the amount of EUR 2.7 million and paid regular amortisation and interest on bank loans and bonds.
Key earnings figures
| EUR ‘000 | 2024 | 2023 | Change (%) |
| Net rental income | 11,588 | 14,617 | (20.7%) |
| Administrative expenses | (2,373) | (2,617) | (9.3%) |
| Net other operating income | 18 | 44 | (59.1%) |
| Losses on disposal of investment properties | (863) | (4,047) | (78.7%) |
| Valuation gains (losses) on investment properties | (15,581) | (21,876) | (28.8%) |
| Operating profit (loss) | (7,211) | (13,879) | (48.0%) |
| Net financial expenses | (10,344) | (9,750) | 6.1% |
| Profit (loss) before tax | (17,555) | (23,629) | (25.7%) |
| Income tax | 774 | 656 | 18.0% |
| Net profit (loss) for the period | (16,781) | (22,973) | (27.0%) |
| Weighted average number of units outstanding (units) | 126,303,633 | 119,635,429 | 5.6% |
| Earnings per unit (EUR) | (0.13) | (0.19) | (31.6%) |
Key financial position figures
| EUR ‘000 | 31.12.2024 | 31.12.2023 | Change (%) |
| Investment properties | 241,158 | 250,385 | (3.7%) |
| Gross asset value (GAV) | 256,048 | 261,138 | (1.9%) |
| Interest-bearing loans and bonds | 148,989 | 143,487 | 3.8% |
| Total liabilities | 157,953 | 151,606 | 4.2% |
| IFRS NAV | 98,095 | 109,532 | (10.4%) |
| EPRA NRV | 104,333 | 114,205 | (8.6%) |
| Number of units outstanding (units) | 143,562,514 | 119,635,429 | 20.0% |
| IFRS NAV per unit (EUR) | 0.6833 | 0.9156 | (25.4%) |
| EPRA NRV per unit (EUR) | 0.7267 | 0.9546 | (23.9%) |
| Loan-to-Value ratio (%) | 61.8% | 57.3% | – |
| Average effective interest rate (%) | 6.7% | 5.2% | – |
Overview of the Fund’s investment properties as of 31 December 2024
| Property name | Sector | Fair value1 | NLA | Direct property yield | Net initial yield | Occupancy rate |
| (EUR ‘000) | (sq. m) | 20242 | 20243 | |||
| Vilnius, Lithuania | ||||||
| Europa SC | Retail | 35,946 | 17,092 | 2.3% | 2.8% | 80.6% |
| North Star | Office | 19,548 | 10,734 | 6.5% | 7.0% | 91.8% |
| Meraki | Office | 16,3804 | 7,833 | 1.2% | 1.5% | 86.3% |
| Total Vilnius | 71,874 | 35,659 | 3.0% | 3.6% | 85.2% | |
| Riga, Latvia | ||||||
| Upmalas Biroji BC | Office | 19,224 | 11,203 | 3.7% | 4.2% | 64.1% |
| Vainodes I | Office | 15,900 | 8,128 | 8.8% | 8.8% | 100.0% |
| S27 | Office | 11,360 | 7,303 | (0.6%) | (0.9%) | – |
| Sky SC | Retail | 4,900 | 3,260 | 8.6% | 8.5% | 100.0% |
| Galerija Centrs | Retail | 60,020 | 19,423 | 3.2% | 4.1% | 84.7% |
| Total Riga | 111,404 | 49,317 | 3.7% | 4.5% | 71.0% | |
| Tallinn, Estonia | ||||||
| Postimaja & CC Plaza complex | Retail | 21,800 | 9,232 | 3.7% | 6.7% | 100.0% |
| Postimaja & CC Plaza complex | Leisure | 13,190 | 7,869 | 4.8% | 4.3% | 97.7% |
| Lincona | Office | 13,100 | 10,767 | 6.4% | 7.4% | 88.5% |
| Pirita SC | Retail | 9,790 | 5,425 | 6.7% | 9.2% | 97.1% |
| Total Tallinn | 57,880 | 33,293 | 4.9% | 6.7% | 95.3% | |
| Total active portfolio | 241,158 | 118,269 | 3.8% | 4.7% | 82.1% |
- Based on the latest valuation as of 31 December 2024 and recognised right-of-use assets.
- Direct property yield (DPY) is calculated by dividing annualized NOI by the acquisition value and subsequent capital expenditure of the property.
- The net initial yield (NIY) is calculated by dividing annualized NOI by the market value of the property.
- Meraki value measured at disposal price. Market value according to independent property valuators Newsec is EUR 17,490,000.
Consolidated statement of profit or loss and other comprehensive income
| EUR ‘000 | 01.01.2024 | 01.01.2023 | ||
| – 31.12.2024 | – 31.12.2023 | |||
| Rental income | 15,136 | 17,743 | ||
| Service charge income | 4,744 | 6,008 | ||
| Cost of rental activities | (8,292) | (9,134) | ||
| Net rental income | 11,588 | 14,617 | ||
| Administrative expenses | (2,373) | (2,617) | ||
| Other operating income (expenses) | 18 | 44 | ||
| Losses on disposal of investment properties | (863) | (4,047) | ||
| Valuation losses on investment properties | (15,581) | (21,876) | ||
| Operating profit (loss) | (7,211) | (13,879) | ||
| Financial income | 196 | 104 | ||
| Financial expenses | (10,540) | (9,854) | ||
| Net financial expenses | (10,344) | (9,750) | ||
| Profit (loss) before tax | (17,555) | (23,629) | ||
| Income tax charge | 774 | 656 | ||
| Profit (loss) for the period | (16,781) | (22,973) | ||
| Other comprehensive income that is or may be reclassified to profit or loss in subsequent periods | ||||
| Net gain (loss) on cash flow hedges | (1,003) | (1,273) | ||
| Income tax relating to net gain (loss) on cash flow hedges | 52 | 123 | ||
| Other comprehensive income (expense), net of tax, that is or may be reclassified to profit or loss in subsequent periods | (951) | (1,150) | ||
| Total comprehensive income (expense) for the period, net of tax | (17,732) | (24,123) | ||
| Basic earnings per unit (EUR) | (0.13) | (0.19) | ||
| Diluted earnings per unit (EUR) | (0.12) | – | ||
Consolidated statement of financial position
| EUR ‘000 | 31.12.2024 | 31.12.2023 |
| Non-current assets | ||
| Investment properties | 241,158 | 250,385 |
| Intangible assets | 4 | 11 |
| Property, plant and equipment | 5 | 4 |
| Derivative financial instruments | 1 | 295 |
| Other non-current assets | 1,225 | 647 |
| Total non-current assets | 242,393 | 251,342 |
| Current assets | ||
| Trade and other receivables | 2,800 | 2,591 |
| Prepayments | 802 | 402 |
| Derivative financial instruments | – | 621 |
| Cash and cash equivalents | 10,053 | 6,182 |
| Total current assets | 13,655 | 9,796 |
| Total assets | 256,048 | 261,138 |
| Equity | ||
| Paid in capital | 151,495 | 145,200 |
| Cash flow hedge reserve | (420) | 531 |
| Retained earnings | (52,980) | (36,199) |
| Total equity | 98,095 | 109,532 |
| Non-current liabilities | ||
| Interest-bearing loans and borrowings | 98,491 | 64,158 |
| Deferred tax liabilities | 1,898 | 2,774 |
| Other non-current liabilities | 1,446 | 1,079 |
| Total non-current liabilities | 101,835 | 68,011 |
| Current liabilities | ||
| Interest-bearing loans and borrowings | 50,736 | 79,584 |
| Trade and other payables | 4,473 | 3,343 |
| Income tax payable | 14 | 6 |
| Other current liabilities | 895 | 662 |
| Total current liabilities | 56,118 | 83,595 |
| Total liabilities | 157,953 | 151,606 |
| Total equity and liabilities | 256,048 | 261,138 |
For additional information, please contact:
Tarmo Karotam
Baltic Horizon Fund manager
E-mail [email protected]
www.baltichorizon.com
The Fund is a registered contractual public closed-end real estate fund that is managed by Alternative Investment Fund Manager license holder Northern Horizon Capital AS.
Distribution: GlobeNewswire, Nasdaq Tallinn, Nasdaq Stockholm, www.baltichorizon.com
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This announcement contains information that the Management Company is obliged to disclose pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the above distributors, at 22:00 EET on 31 March 2025.
- BHF Annual Report_2024_EN
- Baltic_Horizon_Fund_2024-12-31_EN_audited
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