Management Board of Northern Horizon Capital AS has approved the unaudited consolidated interim financial statements of Baltic Horizon Fund (the Fund) for the twelve months of 2023.

Leasing activity
Throughout 2023, the Fund secured important lease extensions with anchor tenants in retail assets. Particularly noteworthy is the extension of leases with anchor grocery tenant Rimi, which were maintained on favourable terms at both Postimaja and Galerija Centrs. Furthermore, lease prolongations were achieved with major fashion brands operated by Inditex, LPP, and Apranga Group, reinforcing the foundation of our tenant base. Additionally, strategic efforts were made to enhance the H&M store at Postimaja, incorporating the H&M Home concept to strengthen the long-term partnership between the Fund and this key tenant.

Meanwhile, Europa SC demonstrated a surge in letting activity during 2023, with the Fund successfully securing deals for a total of 2,941 sq. m with 13 tenants, including prominent names like Pi Pilates, Optometrijos Centras, Codekus and others. In addition, the Fund recently finalized a new lease agreement with the prominent anchor tenant IKI at Europa SC, signing a ten-year lease for an approximate total lettable area of 1,900 sq. m.  The opening of the new anchor tenant’s store, which will be at the heart of the upgraded concept of the shopping centre, is anticipated to take place in early 2024.

The increased leasing activity at Europa SC, coupled with the robust performance of Pirita in 2023, resulted in a notable rise in the NOI of the retail segment compared to the 2022 figures. The Fund is actively engaged in negotiations for over 8,000 sq. m of retail space, with the intention of finalizing these agreements in early 2024.

The office segment witnessed a shift in working practices during the pandemic, with many tenants adopting remote working arrangements where possible. However, there is a growing eagerness among employees to return to offices for social interaction and productive collaboration in physical settings. To address the evolving office reality, Baltic Horizon has been revitalizing larger vacant office areas, transforming them into flexible working spaces to cater to smaller tenants’ needs. Initiatives like the office hotel in North Star and similar concepts in Meraki have yielded favourable results.

In response to evolving market dynamics, the Fund is actively engaged in reletting current and forthcoming office vacancies, particularly in light of EMERGN’s decision to reduce their rented area in LNK and the SEB exit from Upmalas Biroji. Proactive measures are being taken to fill these vacancies, with the Fund securing the Latvian State Police as a tenant for approximately 4,128 sq. m in Upmalas Biroji to partially offset the vacancy from SEB premises. The agreement with the Latvian State Police was signed in November 2023.


An important milestone in our financial journey was the refinancing of our EUR 50 million bond issue in Q2 2023. We initiated a new bond issue, raising EUR 42 million to optimize our capital structure. The first tranche, amounting to EUR 20 million, matures in May 2024. Following the disposal of the Duetto properties, the Fund proactively redeemed EUR 7.5 million of the first tranche in August 2023. The Fund’s management team remains resolute in reducing financial leverage at the earliest viable opportunity.

Our management team remains committed to exploring additional divestment and refinancing opportunities aimed at repaying the outstanding EUR 12.5 million of the first tranche before its maturity date. In line with this commitment, we have successfully negotiated new loans with Šiaulių bankas for Europa and North Star, resulting in an increase in the outstanding loan amounts for these assets by EUR 8.6 million. The majority of the proceeds from these loans will be allocated towards bond redemption and lowering the overall cost of financing.

Looking ahead, the Fund is determined to execute multiple early redemptions of bonds in early 2024 through a combination of refinancing activities and potential asset disposals. These actions are aligned with our overarching strategy to gradually reduce leverage levels, with the ultimate goal of reaching a leverage ratio of approximately 50-55% following all planned refinancing activities in 2024.

Net result and net rental income
In 2023, The Group recorded a net loss of EUR 23.0 million against a net profit of EUR 3.9 million for 2022. The net result was strongly impacted by the negative valuation result of EUR 21.9 million. Meanwhile in 2022, the valuation resulted in a net fair value loss of EUR 2.9 million. The sale of the shares in BH Domus Pro UAB, which owns a retail park and an office building, and BH Duetto UAB, which owns two office buildings, resulted in the loss on disposal of EUR 4.0 million. The net result was also impacted by the higher financial expenses. Earnings per unit for 2023 were negative at EUR -0.19 (2022: positive at EUR 0.03).

The Group earned net rental income of EUR 14.6 million in 2023 (2022: EUR 17.4 million). The results for 2023 include two months’ net rental income of the Domus Pro Retail and Office property (EUR 0.3 million) and five months’ net rental income of the Duetto properties (EUR 1.2 million), which were sold in February and May 2023, respectively. The net rental income of the same portfolio mix (like-for-like portfolio) remained at a level similar to the previous year.

On an EPRA like-for-like basis, portfolio net rental income was slightly below the previous year (-0.2%), mainly due to vacancies in office properties in Latvia due to expiry of the agreement with the main tenant in Upmalas Biroji BC and EMERGN’s decision to reduce their rented area in LNK Centre.

Baltic Horizon achieves a 100% BREEAM certified portfolio
Baltic Horizon Fund announced the successful BREEAM certification of its remaining retail assets thus becoming member of an elite group of Baltic real estate investment companies to certify its entire portfolio according to the highest international environmental standards. The portfolio currently consists of 12 properties. The last to receive its certification was the historic building of Galerija Centrs in Riga that received an impressive BREEAM Very Good certification.

GRESB benchmarking
In Q3 2023, Baltic Horizon maintained the GRESB 4 star rating for the second year in a row. In the assessment, the fund achieved a total score of 82 out of 100, representing the third highest GRESB score in the ‘Northern Europe | Diversified – Office/Retail | Listed’ peer group. The GRESB Real Estate Assessment is an investor-driven global ESG benchmark and reporting framework for listed property companies, private property funds, developers and investors that invest directly in real estate. The achievement of GRESB ratings confirms the Fund’s continuous efforts in the ESG field.

Gross Asset Value (GAV)
At the end of Q4 2023, the Fund’s GAV was EUR 261.1 million (31 December 2022: EUR 344.0 million), 24.1% lower than at the end of the previous period. The decrease is mainly related to the sale of the shares in BH Domus Pro UAB and BH Duetto UAB and the negative property revaluation.

Net Asset Value (NAV)
At the end of 2023, the Fund’s NAV was EUR 109.5 million (31 December 2022: EUR 133.7 million). Compared to the year-end 2022, the Fund’s NAV decreased by 18.0%. The operational performance result was offset by the EUR 21.9 million loss on property valuations and EUR 4.0 million loss from the disposal of the BH Domus Pro UAB and BH Duetto UAB shares. These were the main factors behind the fall in the Fund’s NAV. Excluding the impact of valuations, the NAV at the end of 2023 would have been EUR 131.4 million or EUR 1.098 per unit. As of 31 December 2023, IFRS NAV per unit decreased to EUR 0.9156 (31 December 2022: EUR 1.1172), while EPRA net tangible assets and EPRA net reinstatement value were EUR 0.9546 per unit (31 December 2022: EUR 1.1865). EPRA net disposal value was EUR 0.9122 per unit (31 December 2022: EUR 1.1143).

Investment properties
At the end of 2023, the Baltic Horizon Fund portfolio consisted of 12 cash flow generating investment properties in the Baltic capitals. The fair value of the Fund’s portfolio was EUR 250.4 million (31 December 2022: EUR 333.1 million) and incorporated a total net leasable area of 119.7 thousand sq. m.  During 2023 the Group sold the Domus PRO buildings for approximately EUR 23.5 million and the Duetto I and Duetto II buildings for approximately EUR 37 million, invested EUR 1.1 million in reconstruction projects and EUR 2.3 million in the existing property portfolio.

Interest-bearing loans and bonds
As of 31 December 2023 interest-bearing loans and bonds (excluding lease liabilities) were EUR 143.5 million (31 December 2022: EUR 194.6 million). Outstanding bank loans decreased due to the repayment of the Domus Pro and Duetto loans, part of Europa and Kontor SIA loans and regular bank loan amortisation. Also, the Fund redeemed a part of the bonds in the amount of EUR 7.5 million on 1 August 2023. The redemption was accompanied by the reduction of the nominal value of the bonds to EUR 82,142.85 per bond. The total nominal amount of the bonds before the redemption was EUR 42,000,000 and after the redemption is EUR 34,499,997. Annual loan amortisation accounted for 1.4% of total debt outstanding.
Cash flow
Cash inflow from core operating activities in 2023 amounted to EUR 11.4 million (2022: cash inflow of EUR 15.3 million). Cash inflow from investing activities was EUR 19.9 million (2022:  cash outflow of EUR 9.7 million) due to the sale of the shares in BH Domus Pro UAB and BH Duetto UAB. Cash outflow from financing activities was EUR 30.5 million (2022: cash outflow of EUR 16.4 million). In 2023, the Fund redeemed and issued bonds, repaid the Domus Pro and part of the Europa loan, and paid regular interest on bank loans and bonds. In March 2023, the Fund repaid the Domus Pro loan (EUR 11.0 million) and EUR 6.0 million of the Europa loan using the proceeds from the sale of the shares in BH Domus Pro UAB. In May the Fund redeemed its EUR 50 million unsecured 5-year bond issue, completed a private placement of 5-year bonds and issued bonds in the total volume of EUR 42 million. In August the Fund early redeemed a part of the bonds in the amount of EUR 7.5 million. During August, the Fund successfully refinanced the Kontor SIA loan until 2028, reducing the original Kontor SIA loan by EUR 1.2 million. At the end of 2023, the Fund’s consolidated cash and cash equivalents amounted to EUR 6.2 million (31 December 2022: EUR 5.3 million).

Key earnings figures

EUR ‘000 Q4 2023 Q4 2022 Change (%)
Net rental income 2,894 4,457 (35.1%)
Administrative expenses  (631)  (996) (36.6%)
Losses on disposal of investment properties  (237)  (423) (44.0%)
Valuation gains (losses) on investment properties  (7,250)  (3,072) 136.0%
Operating profit (loss)  (5,195)  (34) 15179.4%
Net financial expenses  (2,509)  (1,849) 35.7%
Profit (loss) before tax  (7,704)  (1,883) 309.1%
Income tax  (53)  (310) (82.9%)
Net profit (loss) for the period  (7,757)  (2,193) 253.7%
Weighted average number of units outstanding (units) 119,635,429 119,635,429
Earnings per unit (EUR) (0.06) (0.02)

Key financial position figures

EUR ‘000 31.12.2023 31.12.2022 Change (%)
Investment properties in use 250,385 333,123 (24.8%)
Gross asset value (GAV) 261,138 343,963 (24.1%)
Interest-bearing loans and bonds 143,487 194,569 (26.3%)
Total liabilities 151,606 210,308 (27.9%)
IFRS Net asset value (IFRS NAV) 109,532 133,655 (18.0%)
EPRA Net Reinstatement Value (EPRA NRV) 114,205 141,943 (19.5%)
Number of units outstanding (units) 119,635,429 119,635,429
IFRS Net asset value (IFRS NAV) per unit (EUR) 0.9156 1.1172 (18.0%)
EPRA Net Reinstatement Value (EPRA NRV) per unit (EUR) 0.9546 1.1865 (19.5%)
Loan-to-Value ratio (%) 57.3% 58.4%
Average effective interest rate (%) 5.2% 3.0%

During Q4 2023, the average actual occupancy of the portfolio was 78.4% (Q3 2023: 79.5%). The occupancy rate as of 31 December 2023 was 81.1% (30 September 2023: 77.1%). The overall occupancy rate increase was influenced by the new tenants in the office segment (Upmalas Biroji BC and Meraki). The Fund signed a long-term lease for 4,128 sq. m in the renowned Upmalas Biroji building with the anchor tenant Latvian State Police, which partially filled the space vacated by SEB in August 2023. Some new lease agreements were also signed in Meraki office building in Q4 2023 for a total area of 1,223 sq. m.

As part of its strategy for the development of existing properties, the Fund has chosen new partners to manage its office and retail properties in Latvia. The management team believes that this change will speed up the leasing process in Latvia.

Expiry of the agreement with the main tenant in Upmalas Biroji BC and EMERGN’s decision to reduce their rented area in LNK Centre had a negative impact on the property yields in Q3 and Q4 2023. The average direct property yield during Q4 2023 was 3.8% (Q3 2023: 4.3%). The net initial yield for the whole portfolio for Q4 2023 was 4.5% (Q3 2023: 5.0%).


EUR ‘000 01.10.2023- 01.10.2022- 01.01.2023- 01.01.2022-
31.12.2023 31.12.2022 31.12.2023 31.12.2022
Rental income 3,755 5,060 17,743 20,482
Service charge income 1,487 1,967 6,008 5,974
Cost of rental activities  (2,348)  (2,570)  (9,134)  (9,026)
Net rental income 2,894 4,457 14,617 17,430
Administrative expenses  (631)  (996)  (2,617)  (3,133)
Other operating income 29 44 278
 Losses on disposal of investment properties  (237)  (423)  (4,047)  (423)
 Valuation gains (losses) on investment properties  (7,250)  (3,072)  (21,876)  (2,914)
Operating profit (loss)  (5,195)  (34)  (13,879) 11,238
Financial income 29 104 1
Financial expenses  (2,538)  (1,849)  (9,854)  (6,312)
Net financial expenses  (2,509)  (1,849)  (9,750)  (6,311)
Profit (loss) before tax  (7,704)  (1,883)  (23,629) 4,927
Income tax charge  (53)  (310) 656  (983)
Profit (loss) for the period  (7,757)  (2,193)  (22,973) 3,944
Other comprehensive income that is or may be reclassified to profit or loss in subsequent periods  
Net gain (loss) on cash flow hedges  (759) 142  (1,273) 2,746
Income tax relating to net gain (loss) on cash flow hedges 64  (19) 123  (236)
Other comprehensive income (expense), net of tax, that is or may be reclassified to profit or loss in subsequent periods  (695) 123  (1,150) 2,510
Total comprehensive income (expense) for the period, net of tax  (8,452)  (2,070)  (24,123) 6,454
Basic and diluted earnings per unit (EUR)  (0.06)  (0.02)  (0.19) 0.03


EUR ‘000   31.12.2023 31.12.2022
Non-current assets      
Investment properties   250,385 333,123
Intangible assets   11 6
Property, plant and equipment   4 1
Derivative financial instruments   295 2,228
Other non-current assets   647
Total non-current assets   251,342 335,358
Current assets      
Trade and other receivables   2,591 2,693
Prepayments   402 273
Derivative financial instruments   621 292
Cash and cash equivalents   6,182 5,347
Total current assets   9,796 8,605
Total assets   261,138 343,963
Paid in capital   145,200 145,200
Cash flow hedge reserve   531 1,681
Retained earnings   (36,199) (13,226)
Total equity   109,532 133,655
Non-current liabilities      
Interest-bearing loans and borrowings   64,158 124,017
Deferred tax liabilities   2,774 7,490
Other non-current liabilities   1,079 1,240
Total non-current liabilities   68,011 132,747
Current liabilities      
Interest-bearing loans and borrowings   79,584 71,094
Trade and other payables   3,343 5,644
Income tax payable   6 10
Other current liabilities   662 813
Total current liabilities   83,595 77,561
Total liabilities   151,606 210,308
Total equity and liabilities   261,138 343,963

For more information, please contact: 

Tarmo Karotam
Baltic Horizon Fund manager

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. Both the Fund and the Management Company are supervised by the Estonian Financial Supervision Authority.

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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 22:10 EET on 15 February 2024.