Significant improvement in results for Arcona Property Fund N.V. in Q3
19 November 2024
Arcona Property Fund N.V. (the Fund) – a listed fund that invests in commercial real estate in Central Europe, achieved a positive after-tax result of EUR 1.24 million for the third quarter of 2024. This represents a significant improvement compared to EUR 430,000 in the same period last year. This increase is largely attributed to successful sales and a positive currency result. The Fund also announces that it has received a lease termination notice from Danone, the tenant of the EOS building in Bucharest.
The Fund achieved gross rental income of EUR 4.89 million and net rental income of EUR 3.40 million during the first nine months of 2024. Adjusted for the sales of the Záhradnícka office building in Bratislava and the Karlin office building in Prague in the second quarter, net rental income rose by EUR 37,000, or 1.2%, compared to the same period last year. Net operational profit before taxes and financial expenses increased by 20.5% to EUR 3.55 million, compared to EUR 2.94 million in the same period last year.
In the third quarter, the remaining portion of the Boyana Residence project in Bulgaria was successfully sold. This contributed to a substantial increase in pre-tax profit, which reached EUR 1.42 million for the first nine months of 2024, compared to EUR 705,000 in the same period last year.
The intrinsic value as of 30 September 2024, including the result of the Tender Offer, stands at EUR 11.16 per share. This represents an increase of 2.1% compared to EUR 10.93 per share as of 31 December 2023.
The portfolio occupancy rate as of 30 September 2024 was 85.2%, compared to 85.8% at the end of June 2024. This slight decline resulted from vacancy turnover in the Palmovka office building in Prague and the Maris office building in Poland.
As of 30 September 2024, the Fund's loan-to-value ratio stood at 35.4%. Interest expenses for the same period decreased by 5.1% to EUR 2.12 million but remain relatively high due to persistently elevated EURIBOR and PRIBOR rates.
Lease termination in Romania
The Fund has received a lease termination notice from Danone. Danone, which has occupied the modern EOS office building in Bucharest, with a rentable area of 3,386 m² and 90 parking spaces, since 2008, has notified its termination of the lease agreement with effect from May 2025, against payment of a termination fee of 3 months rent. Danone's gross rental income accounts for 12.8% of the current Fund’s rent roll. The bank loan on the EOS property is EUR 2.6 million and the appraised value is EUR 5.2 million.
Outlook
The Fund anticipates making further progress in its sales programme over the coming months and aims to resume the reverse bookbuilding programme after repaying high-interest loans, with the goal of returning substantial value to shareholders.
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Significant improvement in results for Arcona Property Fund N.V. in Q3 19 November 2024 |
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