Baltic Horizon Fund · OMXTSE:NHCBHFFT
Baltic Horizon Fund — Shareholder Meeting (June 2023)
36 slides from Baltic Horizon Fund's shareholder meeting presentation, Jun 2, 2023
Slide 1: Annual General Meeting
CONFIDENTIAL Annual General Meeting Baltic Horizon Fund 2 June 2023
Slide 2: Agenda
Agenda • Latest financial results 3 • Background 10 • Main events 13 • The investment strategy 14 • Financing strategy 31 • Financial goals 33 • Execution plan 34 Baltic Horizon Fund Strictly confidential 2
Slide 3: Financial results
Financial results
Slide 4: Disposal of Domus PRO Retail & Office
Disposal of Domus PRO Retail & Office • On 8 February 2023, the Fund signed a share sale and purchase agreement with UAB PREF III to sell 100% shares of BH Domus Pro UAB which owns a retail park and an office building in Vilnius, Lithuania. The agreed price of the property was approximately EUR 23.5
Slide 5: Disposal of Duetto I / II
Disposal of Duetto I / II • On 16 May 2023, the Fund signed a share sale and purchase agreement with East Capital to sell 100% shares of BH Duetto UAB. The agreed price of the property was approximately EUR 37 million. • Originally developed by YIT and acquired by Baltic Horizon in 2017 and 2019. •
Slide 6: Portfolio performance
Portfolio performance As of 31 March 2023 Direct property Net initial Fair value NLA Property name Sector yield yield Occupancy rate (EUR ‘000) (sq. m) Q1 2023 Q1 2023 Vilnius, Lithuania Duetto I Office 18,845 8,587 8.4% 6.7% 97.6% Duetto II Office 20,253 8,674 7.6% 6.9% 100.0% Europa SC Retail 35,7
Slide 7: NOI development
NOI development As of 31 March 2023 Property Date of acquisition 2018 2019 2020 2021 2022 Q1 2022 Q1 2023 Postimaja & CC Plaza complex 8 March 20131 2,447 2,495 1,932 1,805 2,044 450 522 Upmalas Biroji BC 30 August 2016 1,710 1,701 1,661 1,740 1,763 454 438 North Star 11 October 2019 - 315 1,419 1,2
Slide 8: Financial results for Q1 2023
Financial results for Q1 2023 Profit and loss 01.01.2023- 01.01.2022- EUR ‘000 31.03.2023 31.03.2022 Change (%) • The Group recorded a net profit of EUR 22 Rental income 5,274 4,959 6.4% thousand against EUR 1,996 thousand for Q1 1,442 1,304 2022. Service charge income 10.6% Cost of rental activitie
Slide 9: Financial results for Q1 2023
Financial results for Q1 2023 Financial position EUR ‘000 31.03.2023 31.12.2022 Non-current assets • At the end of Q1 2023, the Fund’s GAV was Investment properties 309,047 333,123 EUR 321.3 million (31 December 2022: EUR Intangible assets 6 6 Property, plant and equipment 1 1 344.0 million), 6.6% l
Slide 10: Strategic background
Strategic background
Slide 11: Background of Baltic Horizon Fund
Background of Baltic Horizon Fund • Baltic Horizon Fund and its predecessor BOF started investing in Baltic commercial real estate since 2011. • The Fund has been a long-term player in the real estate sector in the Baltics providing local and international investors access to the Baltic commercial r
Slide 12: Background of Baltic Horizon Fund
Background of Baltic Horizon Fund New reality: • Iron curtain with Russia potentially for decades. • Higher constructions costs are here to stay. • Higher interest rate environment for the known future. • Shift in working patterns with 60-70% of people back in the offices with remote working. • Cons
Slide 13: Main events
Main events • Since Q4 2021, the Fund has been executing an asset disposal program. Some of the asset disposals are expected to be closed in Q2 2023. • The previous bond was refinanced on 8 May 2023 with a new EUR 42 million bond including a call option for EUR 20 million during 12 months and furthe
Slide 14: The investment strategy
The investment strategy
Slide 15: Unleashing potential through new customer focused retail concepts
Unleashing potential through new customer focused retail concepts • The new retail concepts responds to the needs and behaviors of the modern, urban customers. • The retail concepts are based on a ‘three-in-one’ strategy that brings together shopping, beauty and health services and leisure, adding v
Slide 16: Europa Service Center
Europa Service Center About the location • Vilnius CBD has developed faster than any of the city’s districts the past 5 years with a lot of development potential over the next 5 years. • 40,000 office workers every day + 40,000 visitors every day • Additional 10,000 new office workers are expected b
Slide 17: Europa Service Center
Europa Service Center Concept and Unique Sales Proposition • In 2022 completed refurbishment of the shopping centre. • Reconstruction of Europa with EUR 6m invested. The Fund refurbished common areas, set up an amphitheater, introduced a new coffee/bakery area and food hall. • In Q1 2023 – signed 9
Slide 18: Europa won Baltic Real Estate Forum award for best renovation
By the vote of the international jury, Europa won the Baltic Real Estate Forum award for the best shopping centre renovation project in the Baltics
Slide 19: Europa Service Center
Europa Service Center New concept of “3 in 1” is being introduced to the shopping center revolving around food spaces, fashion and beauty/medicine. Food spaces and restaurants are concentrated on the ground floor with fresh food outlets to be created. The first floor will have exclusive clothing and
Slide 20: Strictly confidential
Strictly confidential
Slide 21: Galerija Life Style Center
Galerija Life Style Center About the location • Historically the highest tourists’ flow of 38%. Today, only 14% of the visitors are tourists, still highest among all retail centres in Riga. • 40% of the customers live, work or study in the city center. • Historical heart of the Old Town. • High muni
Slide 22: Galerija Life Style Center
Galerija Life Style Center Concept and Unique Sales Proposition • Q1 2023, “BURZMA” food hall opened (4th floor with two terraces), creating an immediate attraction point for customers. • Footfall on the 4th floor +31%, net rent for the whole area >20 EUR/sqm/mo. • Signed agreement with the newest r
Slide 23: Galerija Life Style Center
Galerija Life Style Center Compared to 2019, Latvia still has fewer tourists. The Latvian government expects that 2023 tourism figures will be close to 2019 figures. Galerija Centrs is perfectly suited to re-attract tourists due to its unique location in the Old Town and newly opened fashion anchors
Slide 24: os > pl
os > pl
Slide 25: Postimaja Service and Entertainment Center
Postimaja Service and Entertainment Center About the location • Heart of Tallinn city center – part of the fashion, restaurants, offices and services cluster. • Synergy with the whole Rotermann quarter which is behind these buildings and has a variety of fashion brands incl. COS, Ivo Nikkolo, Bershk
Slide 26: Postimaja Service and Entertainment Center
Postimaja Service and Entertainment Center Concept and Unique Sales Proposition • In 2022 prolonged, enlarged and refurbished Reval Café, opened the new terrace. • Postimaja to be 100% let by August 2023. Prolonged RIMI lease agreement. Signed agreement on H&M refurbishment to refresh the concept. •
Slide 27: Postimaja Service and Entertainment Center
Postimaja Service and Entertainment Center Long-term potential of the property can be extracted by combining Postimaja SC and CC Plaza buildings together by constructing a connection between two buildings to establish a good flow of clients from Postimaja to CC Plaza and adding additional fashion br
Slide 28: Slide 28
Slide 29: Meraki Office Home
Meraki Office Home • Meraki Office Home is located in Pašilaičiai, a growing business area in the Northwestern part of Vilnius. • The building is a modern 8-storey glass building, equipped with a vast range of amenities and the highest quality technology in cooling, ventilation and humidity control.
Slide 30: Slide 30
Slide 31: Financing strategy
Financing strategy
Slide 32: Financing structure Q1 2023 (after Duetto transaction)
Financing structure Q1 2023 (after Duetto transaction) Strong focus on hedging the interest rate risk and maintaining healthy debt service ratios 49.3% 80% 3.4% Hedge ratio against Expected Net LTV ratio Average interest rate interest rate risk target as of 31 March 2023 The Fund is taking initiativ
Slide 33: Financial goals
Financial goals Dividend payment decision • Decision to withhold dividends in 2023 to strengthen the Fund and its asset performance. Equity raising • No new capital calls planned for the next 12 months. The Fund’s financial goals for the future • NOI growth up to 18 mEUR (per annum) • LTV below 50%
Slide 34: The execution plan
The execution plan • Strengthening the balancing sheet through the disposal of assets where the best value can be obtained today. • Manage the interest rate expense by reducing the outstanding bond amount and prolonging loans. • Reducing the LTV ratio below 50 percent. • Execute leasing strategy to
Slide 35: Contact information
Contact information Management board message We declare that, to the best of our knowledge, the information provided in this document is accurate and that the document is not subject to any omissions that may serve to distort the picture of the document provided. Tarmo Karotam Edvinas Karbauskas Fun
Slide 36: Disclaimer
Disclaimer This material is provided to you for information purposes only. You should not rely upon it or use it to form the definitive basis for any decision, contract, commitment or action whatsoever. Northern Horizon Capital AS (NHC) has taken all reasonable care to ensure that the information co
Baltic Horizon Fund — Shareholder Meeting (June 2023) on 6ix