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Doing what they sayEastnine this morning announced that is has agreed with "Ghelamco" to acquire the property "The Bridge" in Warsaw for EUR 300m. Eastnine has acquired from Ghelamco before, and has for a long time been clear in its intentions to continue to grow in Warsaw through M&A. Just recently, Stena acquired a large building from Skanska, which we understand that investors have been speculating about Eastnine acquiring. The Bridge comprise 55,000 sqm, is 92% occupied, the two largest tenants (Erste Bank Polska and Visa) together lease 76% of the property, and other tenants include e.g. Grant Thornton. The rental value is EUR 18.2m and leases are generally triple-net. No equity neededThe transaction will be financed with existing cash, adding additional debt to the existing property portfolio, and a EUR 180m secured bank debt on a 5Y-term. The company specifically states that no equity raise is needed. All else equal, we believe the transaction will push LTV by ~14pp (we forecast year-end 2026 LTV of 43%, this deal would increase that figure to 56%). Larger than expectedGiven the company's clear communication on its plans to continue to acquire assets in Warsaw, we argue that investors have been expecting a deal. Any deal would basically add to both leverage and earnings. However, this one is larger than we have anticipated, EUR 300m. The company states that IFPMps will increase by 20%, compared to the Q1'26 earnings capacity. In summary, we argue that the deal makes much sense, Eastnine is acquiring in Warsaw as it has said, from a developer it has done business with before. The deal is larger than we expected, is financed without raising equity, and adds 20% to earnings. We expect a positive reaction today. |