Management Board of Northern Horizon Capital AS has approved the unaudited financial results of Baltic Horizon Fund (the Fund) for the three months of 2025.
Our strategic ambitions
Over the past years, our focus has been on reshaping our strategy to foster sustainable value in a very demanding environment, concentrating efforts on avenues that promise reliable and consistent growth for our investors.
We firmly believe that the execution of the ‘Modern City Life’ strategy, introduced to investors in 2024, is paramount to their best interests. This strategy emphasizes developing centrally located, multi-functional properties with adaptable spaces designed to inspire, uplift, and enhance the lives of modern citizens and communities. Our value proposition is built on quality, flexibility, sustainability, and exceptional service, supported by strategic locations that cater to the evolving needs of our tenants, visitors and neighbours.
The Fund management team has implemented and specified its key performance indicators (KPIs) as a means to effectively measure and track performance because we acknowledge 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.
In 2025 the Fund will focus on four KPIs:
- Occupancy of not less than 90% by the year end. We aim to decrease the current vacancies across the portfolio. At the end of Q1 occupancy rate (based on handover date) was 82.3%
- Attaining a net operating income (NOI) of EUR 130 per square meter by 2027. Due to possible divestments, from 2025 the management has a new target of NOI/sq.m. rather than total NOI p.a.
- Loan to value ratio not exceeding 50%. The Fund recently introduced its divestment strategy with the aim to reduce financing costs and decrease LTV levels. In March 2025 the Fund disposed the Meraki business centre in Vilnius. Proceeds of the disposal were used to repay the outstanding loan and early repay the bonds in the amount of EUR 3 million.
- Optimizing the property portfolio by considering the disposal of non-strategic assets if deemed strategically beneficial.
Leasing performance
During the 3 months of 2025, the Fund signed new leases for approx. 2,000 sq. m. Moreover, leases of approx. 5,500 sq. m. were prolonged. 7 new tenants have been attracted to our buildings, while 8 existing tenants have decided to continue their cooperation with us.
As of the end of March 2025, the portfolio occupancy rate based on handover date stood at 82.3%, while occupancy calculated according to lease signing date reached 86.9%, marking significant progress toward the target of 90%.
Notably, less than 14% of leases are set to expire during the next 9 months, while the vast majority expire in 2026 and later. We aim to spread our lease terms evenly so that no more than 20% of our leases expire each year.
Recent successful leasing activity is reflected in the increase in the weighted average unexpired lease term until the first break option, which was 3.6 years as of 31 March 2025 (compared to 3.4 and 2.9 years as of 31 December 2024 and 2023).
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.
In 2025, we will continue advancing our social and environmental commitments. All our assets have been BREEAM-certified, and by the end of Q1 2025, we achieved 95% green leases across our portfolio, with a target to further increase this share in the coming year.
In a challenging leasing market, the Baltic Horizon Fund is focusing on minimizing administration expenses to offset reduced income. By regularly reviewing overhead costs, investing in technology upgrades, and negotiating fees, the fund aims to enhance operational efficiency and improve long-term investment returns. These strategies are essential for maintaining financial health and maximizing results despite limited income opportunities.
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
Our portfolio is 100% BREEAM certified.
GRESB benchmarking
In 2024 the Fund received a 3-star GRESB rating. 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
The Group earned consolidated net rental income of EUR 3.0 million in Q1 2025 (Q1 2024: 2.8 million). The results for Q1 2025 include two months of net rental income of the Meraki office property (EUR 0.2 million), which was sold on 13 March 2025.
The portfolio net rental income in Q1 2025 was 6.3% higher than in Q1 2024, mainly due to higher occupancy in Galerija Centrs since the complex was undergoing a transition period of certain tenants in the buildings in Q1 2024, as well as higher occupancy in Meraki as the international office furniture company NARBUTAS fully moved in to the premises at the end of 2024.
In Q1 2025, the Group recorded a net loss of EUR 968 thousand compared with a net loss of EUR 624 thousand for Q1 2024. The result was mainly driven by the losses on disposal of investment properties. Earnings per unit for Q1 2025 were negative at EUR 0.01 (Q1 2024: negative at EUR 0.01).
Investment properties
At the end of Q1 2025, the Baltic Horizon Fund portfolio consisted of 11 cash flow generating investment properties in the Baltic capitals. The fair value of the Fund’s portfolio was EUR 226.2 million at the end of March 2025 (31 December 2024: EUR 241.2 million) and incorporated a total net leasable area of 110.7 thousand sq. m. During Q1 2025 the Group invested approximately EUR 1.4 million in tenant fit-outs.
Gross Asset Value (GAV)
As of 31 March 2025, the Fund’s GAV was EUR 243.2 million (31 December 2024: EUR 256.0 million). The decrease compared to the prior year was mainly related to the disposal of the Meraki office building, which had contributed approx. EUR 16.4 million to the GAV.
Net Asset Value (NAV)
As of 31 March 2025, the Fund’s NAV was EUR 97.2 million (31 December 2024: EUR 98.1 million). The NAV decrease was mainly due to losses on disposal of Meraki. As of 31 March 2025, IFRS NAV per unit amounted to EUR 0.6769 (31 December 2024: EUR 0.6833), while EPRA net tangible assets and EPRA net reinstatement value were EUR 0.7209 per unit (31 December 2024: EUR 0.7267). EPRA net disposal value was EUR 0.6736 per unit (31 December 2024: EUR 0.6797).
Interest-bearing loans and bonds
As of 31 March 2025, interest-bearing loans and bonds (excluding lease liabilities) were EUR 138.9 million (31 December 2024: EUR 149.0 million).
As of 31 March 2025, the Fund’s consolidated cash and cash equivalents amounted to EUR 12.8 million (31 December 2024: EUR 10.1 million).
Cash flow
Cash inflow from core operating activities in Q1 2025 amounted to EUR 1.3 million (Q1 2024: cash inflow of EUR 1.9 million). Cash inflow from investing activities was EUR 14.3 million (Q1 2024: cash outflow of EUR 1.3 million) mainly due to the sale of Meraki in March 2025 for EUR 16 million. Cash outflow from financing activities was EUR 12.8 million (Q1 2024: cash inflow of EUR 5.7 million). In Q1 2025, the Fund repaid the BH Novus UAB (previously BH Meraki UAB) loan amounting to EUR 10.3 million and paid interest on bank loans and bonds.
Key earnings figures
| EUR ‘000 | 2025 Q1 | 2024 Q1 | Change (%) |
| Net rental income | 2,970 | 2,794 | 6.3% |
| Administrative expenses | (548) | (585) | (6.3%) |
| Other operating income (expenses) | 18 | 10 | 80.0% |
| Losses on disposal of investment properties | (905) | (367) | 146.6% |
| Valuation losses on investment properties | (5) | (4) | 25.0% |
| Operating (loss) profit | 1,530 | 1,848 | (17.2%) |
| Net financial expenses | (2,673) | (2,497) | 7.0% |
| (Loss) profit before tax | (1,143) | (649) | 76.1% |
| Income tax | 175 | 25 | 600.0% |
| Net (loss) profit for the period | (968) | (624) | 55.1% |
| Weighted average number of units outstanding (units) | 143,562,514 | 119,635,429 | 20.0% |
| Earnings per unit (EUR) | (0.01) | (0.01) | – |
Key financial position figures
| EUR ‘000 | 31.03.2025 | 31.12.2024 | Change (%) |
| Investment properties in use | 226,220 | 241,158 | (6.2%) |
| Gross asset value (GAV) | 243,208 | 256,048 | (5.0%) |
| Interest-bearing loans and bonds | 138,914 | 148,989 | (6.8%) |
| Total liabilities | 146,035 | 157,953 | (7.5%) |
| IFRS Net asset value (IFRS NAV) | 97,173 | 98,095 | (0.9%) |
| EPRA Net Reinstatement Value (EPRA NRV) | 103,496 | 104,333 | (0.8%) |
| Number of units outstanding (units) | 143,562,514 | 143,562,514 | – |
| IFRS Net asset value (IFRS NAV) per unit (EUR) | 0.6769 | 0.6833 | (0.9%) |
| EPRA Net Reinstatement Value (EPRA NRV) per unit (EUR) | 0.7209 | 0.7267 | (0.8%) |
| Loan-to-Value ratio (%) | 61.4% | 61.8% | (0.4%) |
| Average effective interest rate (%) | 6.5% | 6.7% | (0.2%) |
During Q1 2025, the average actual occupancy of the portfolio was 82.7% (Q4 2024: 81.0%). The occupancy rate increased to 82.3% as of 31 March 2025 (31 December 2024: 82.1%).
Overview of the Fund’s investment properties as of 31 March 2025
| Property name | Sector | Fair value1 | NLA | Direct property yield | Net initial yield | Occupancy rate |
| (EUR ‘000) | (sq. m) | 20252 | 20253 | |||
| Vilnius, Lithuania | ||||||
| Europa SC | Retail | 36,106 | 17,127 | 2.7% | 3.1% | 81.6% |
| North Star | Office | 19,550 | 10,740 | 5.6% | 6.2% | 90.3% |
| Total Vilnius | 55,656 | 27,867 | 3.9% | 4.7% | 85.0% | |
| Riga, Latvia | ||||||
| Upmalas Biroji BC | Office | 19,241 | 11,204 | 3.4% | 4.3% | 64.1% |
| Vainodes I | Office | 15,936 | 8,128 | 6.2% | 8.5% | 100.0% |
| LNK Centre | Office | 11,641 | 7,452 | (2.4%) | (3.7%) | 0.0% |
| Sky SC | Retail | 4,910 | 3,260 | 8.7% | 9.3% | 100.0% |
| Galerija Centrs | Retail | 60,863 | 19,441 | 3.4% | 4.5% | 84.7% |
| Total Riga | 112,591 | 49,485 | 3.3% | 4.4% | 70.8% | |
| Tallinn, Estonia | ||||||
| Postimaja & CC Plaza complex | Retail | 21,876 | 9,232 | 3.1% | 5.2% | 100.0% |
| Postimaja & CC Plaza complex | Leisure | 13,195 | 7,877 | 6.4% | 5.8% | 100.0% |
| Lincona | Office | 13,110 | 10,767 | 6.7% | 8.3% | 92.6% |
| Pirita SC | Retail | 9,792 | 5,425 | 6.6% | 8.5% | 97.1% |
| Total Tallinn | 57,973 | 33,301 | 4.9% | 6.6% | 97.1% | |
| Total portfolio | 226,220 | 110,653 | 3.9% | 5.0% | 82.3% |
- Based on the latest valuation as of 31 December 2024, recognised right-of-use assets and subsequent capital expenditure.
- 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.
Consolidated statement of profit or loss and other comprehensive income
| EUR ‘000 | |||
| 01.01.2025 – 31.03.2025 | 01.01.2024 – 31.03.2024 | ||
| Rental income | 3,794 | 3,846 | |
| Service charge income | 1,332 | 1,048 | |
| Cost of rental activities | (2,156) | (2,100) | |
| Net rental income | 2,970 | 2,794 | |
| Administrative expenses | (548) | (585) | |
| Other operating income | 18 | 10 | |
| Losses on disposal of investment properties | (905) | (367) | |
| Valuation losses on investment properties | (5) | (4) | |
| Operating profit (loss) | 1,530 | 1,848 | |
| Financial income | 42 | 4 | |
| Financial expenses | (2,715) | (2,501) | |
| Net financial expenses | (2,673) | (2,497) | |
| Profit (loss) before tax | (1,143) | (649) | |
| Income tax charge | 175 | 25 | |
| Profit (loss) for the period | (968) | (624) | |
| Other comprehensive income that is or may be reclassified to profit or loss in subsequent periods | |||
| Net gain (loss) on cash flow hedges | 51 | (219) | |
| Income tax relating to net gain (loss) on cash flow hedges | (5) | 27 | |
| Other comprehensive income (expense), net of tax, that is or may be reclassified to profit or loss in subsequent periods | 46 | (192) | |
| Total comprehensive income (expense) for the period, net of tax | (922) | (816) | |
| Basic and diluted earnings per unit (EUR) | (0.01) | (0.01) | |
Consolidated statement of financial position
| EUR ‘000 | 31.03.2025 | 31.12.2024 | |
| Non-current assets | |||
| Investment properties | 226,220 | 241,158 | |
| Intangible assets | 2 | 4 | |
| Property, plant and equipment | 2 | 5 | |
| Derivative financial instruments | – | 1 | |
| Other non-current assets | 845 | 1,225 | |
| Total non-current assets | 227,069 | 242,393 | |
| Current assets | |||
| Trade and other receivables | 2,848 | 2,800 | |
| Prepayments | 444 | 802 | |
| Cash and cash equivalents | 12,847 | 10,053 | |
| Total current assets | 16,139 | 13,655 | |
| Total assets | 243,208 | 256,048 | |
| Equity | |||
| Paid in capital | 151,495 | 151,495 | |
| Cash flow hedge reserve | (374) | (420) | |
| Retained earnings | (53,948) | (52,980) | |
| Total equity | 97,173 | 98,095 | |
| Non-current liabilities | |||
| Interest-bearing loans and borrowings | 83,896 | 98,491 | |
| Deferred tax liabilities | 1,742 | 1,898 | |
| Other non-current liabilities | 1,143 | 1,446 | |
| Total non-current liabilities | 86,781 | 101,835 | |
| Current liabilities | |||
| Interest-bearing loans and borrowings | 55,259 | 50,736 | |
| Trade and other payables | 3,331 | 4,473 | |
| Income tax payable | – | 14 | |
| Derivative financial instruments | 303 | 317 | |
| Other current liabilities | 361 | 578 | |
| Total current liabilities | 59,254 | 56,118 | |
| Total liabilities | 146,035 | 157,953 | |
| Total equity and liabilities | 243,208 | 256,048 |
For additional information, please contact:
Tarmo Karotam
Baltic Horizon Fund manager
E-mail tarmo.karotam@nh-cap.com
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 17:45 EET on 08 May 2025.
Attachment
- 2025 Q1 report ENG
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