EfTEN Real Estate Fund AS has reported significant financial improvements in the third quarter of 2025, driven by strategic investments and reduced operational costs. The fund's net profit saw a substantial increase, and management has signaled the potential for a record dividend payment to shareholders in early 2026.
The positive results come from a combination of lower portfolio vacancy rates, successful expansion into the elderly care and logistics sectors, and decreased interest expenses. These factors contributed to a 19% rise in adjusted cash flow over the first nine months of the year compared to the same period in 2024.
Key Takeaways
- Consolidated net profit for Q3 2025 reached EUR 5.251 million, a significant increase from EUR 3.854 million in Q3 2024.
- The portfolio's vacancy rate decreased for the second consecutive quarter, settling at 3.6% by the end of September.
- Strategic investments in care homes and logistics centers have bolstered rental income and diversified the fund's assets.
- Management projects a net dividend of EUR 1.20 per share for 2025, an 8.1% increase from the previous year, pending a planned loan refinancing in early 2026.
Robust Financial Performance in Q3
EfTEN Real Estate Fund AS announced strong financial results for the third quarter and the first nine months of 2025. Consolidated sales revenue for the quarter grew by 4.4% year-over-year to EUR 8.359 million. For the nine-month period, revenue increased by 2.1% to EUR 24.427 million.
The fund's profitability showed even more significant growth. Consolidated net profit for Q3 2025 was EUR 5.251 million, a notable rise from the EUR 3.854 million recorded in the same quarter of the previous year. For the first nine months, net profit reached EUR 13.443 million, up from EUR 10.104 million in 2024.
Financial Highlights (9 Months 2025)
- Sales Revenue: EUR 24.427 million
- Net Rental Income (NOI): EUR 22.678 million
- Net Profit: EUR 13.443 million
- Adjusted Cash Flow: EUR 9.53 million (up 19% YoY)
A key driver of this increased profitability was a 23% reduction in interest expenses over the nine-month period. This was largely due to a decline in EURIBOR rates, which directly impacted the fund's floating-rate loans. Interest expenses in Q3 2025 totaled EUR 1.603 million, compared to EUR 2.171 million in Q3 2024.
Strategic Expansion Fuels Growth
The fund's management attributes the steady performance to a clear strategy focused on high-demand sectors. Recent investments have centered on elderly care facilities and modern logistics centers, which have proven resilient and provided stable rental income.
Focus on Elderly Care and Logistics
In the third quarter, rental income from the care home segment grew to represent 4.7% of the portfolio, nearly double the figure from a year ago. This increase was supported by several key projects:
- The completion of the second phase of the ERM care home in Tartu, which reached full contractual rental income by August.
- The addition of the Hiiu care home in Tallinn in April.
- The completion of a new phase at the Valkla care home.
In March, a subsidiary acquired a property in Tallinn for EUR 4 million, which is being redeveloped into the "Nõmme Südamekodu" elderly home. This facility is expected to accommodate up to 170 residents under a long-term lease agreement.
The fund also invested an additional EUR 1.743 million in the first half of the year to complete the Paemurru logistics centre, which was acquired in late 2024.
The Significance of Interest Rate Hedging
With the two-year downward trend in EURIBOR rates halting in the third quarter, EfTEN has proactively moved to manage future interest rate risk. The fund entered into interest rate swap agreements to fix the rate on a portion of its loans. By the end of September, EUR 22.7 million, or 15% of the consolidated loan portfolio, was covered by these agreements at fixed rates of 1.995% and 2.2%.
Improving Occupancy and Portfolio Health
A positive trend for the fund has been the consistent decrease in its overall property vacancy rate. For the second quarter in a row, the rate has fallen, reaching 3.6% at the end of September 2025. This reflects strong demand for the fund's logistics, retail, and care home properties.
"In a prolonged period of low economic activity, financial results of the EfTEN Real Estate Fund AS have gradually improved. This is due to the fund's strong focus on maintaining low vacancy rates, new successful investments in the elderly care and logistics segments, as well as reduced interest costs," the fund's management stated.
However, the office segment remains a challenge. The vacancy rate for office properties stood at 16.8%, indicating that leasing available space in this sector has been slower than in other parts of the portfolio. Despite this, the overall health of the 37-property portfolio, valued at EUR 382.268 million, remains strong.
Outlook for Shareholders
The fund's strong cash flow and healthy balance sheet have positioned it to deliver increased returns to its investors. As of September 30, 2025, the fund had earned potential gross dividends of EUR 0.6666 per share for the nine-month period, a 12.6% increase from the prior year.
Looking ahead, management is planning a significant move to unlock further value. By refinancing bank loans in early 2026, the fund expects to increase its capacity to pay dividends.
Shareholder Return Projections
- Projected 2025 Net Dividend: EUR 1.20 per share
- Increase vs. 2024 Dividend: 8.1%
- Increase vs. 2023 Dividend: 20%
This refinancing, combined with strong operational performance, is expected to allow management to propose a net dividend of EUR 1.20 per share for the 2025 financial year. This would represent a 20% increase over the dividend paid in the spring of 2024.
As of September 30, 2025, the Net Asset Value (NAV) per share was EUR 20.44. The fund’s total assets amounted to EUR 403.493 million, with investment properties making up 95% of that total. The fund's Loan-to-Value (LTV) ratio remained stable at 41%, indicating a healthy leverage level.
