Eastnine is a Swedish long-term real estate manager of modern, sustainable offices and logistics premises at prime locations in the Baltics and Poland. A majority of the property value is located in Vilnius, where EAST is the largest prime office owner. Roughly 20% of the company’s holdings comprise other investments. The Baltics are growing faster than the Nordics and both the office and logistics markets are picking up speed. The region is also technically advanced and has an attractive tax regime.
Historical growth has come chiefly through acquisitions, and we expect that to continue in the next couple of years. The net LTV target cap of 60% is safely above current levels, which we believe supports growth. Attractive yield levels in both the Baltic and Polish real estate markets for offices and logistics provide good business opportunities. Also, a successful divestment of the unleveraged Russian retail holding could provide additional value.
Real estate companies are subject to macro risks, supply of premises risk, supply of capital risk, debt availability risk, forex risk, regulatory risk, rental income risk, property cost risk, property value risk and ownership risk. We argue that the key specific risks related to Eastnine are macro risks, forex risks and portfolio risks.