Eastnine AB (publ)

Hello and very warm welcome to EAST9's Q3 presentation. My name is Kestutis Sasnauskas, I'm CEO of EAST9 and with me Adela Colakovic, CFO. Today we will guide you through the presentation and please do not forget to put questions online whilst we are speaking and we will respond to them at the end of the presentation. So, of course, Acquisition of the bridge is the main event that took place during the quarter. This is also one of our probably major acquisitions, strategic acquisitions during the year. And an amazing property in the central Warsaw, just a couple of hundred meters from our previous acquisition, Warsaw Unit. You see both of them in the picture. First the bridge and then the third building or fourth building in the row at the end of the picture is Warsaw Unit. It's a 40-story high-rise landmark in Warsaw, 55,000 square meters, 98% leased out. It's actually 100% booked, so there is no space available in it anymore. But the building is totally new and only 57% moved in. The remaining tenants will be moving in during the next year. And this, of course, has some implications on our multiples. So actually when you read our presentation, when you read our report, please make a bigger note on the notes that we put because we try to explain it in very detail how different effects, implications of this acquisition. The property value at the acquisition is, underlying value is 285 million euros. We paid 240. There is an explanation to that. There's compensation for rent fees for the periods until the rents are commencing and some fit-out contributions to be made. However, the total implication of this acquisition is very significant and it actually will bring our earnings or profit from property management per share up to €0.36 per share, which is a significant increase in our results. We have 3% like-for-like growth in our portfolio and our revenue over the quarter, 1.4% growth like-for-like during the first nine months of the year. Net operating income slightly lower compared to the previous periods, again affected by the build-up of the organization that we have. Thank you very much. Actually, our occupancy in the underlying portfolio or like-for-like portfolio is up to 97.2%, which is a record high. This is unique for office players today in this market. And again, it shows how strong the underlying portfolio is. Both the properties but also the service that we provide. We will go into more detail during the presentation and various points of these figures. So just briefly, East 9 today is a 313,000 of prime, prime, prime properties in Vilnius, Warsaw, Poznań and Riga. Property value of 1.2 portfolio is 97%. It's just because the bridge has not moved in. It's leased, but it's not moved in. That's why we have economic occupancy of 88.3%. Our annual rental revenue is at 62. We expect the yield of 6.2% in our earnings capacity. and a somewhat higher LTV just because of we financed the acquisition in tariff both quarter and that will reduce to 50 below or 55-50% approximately depending on where we are. We will go into that as well during the presentation. On the bottom you see some names of our top tenants. If you look at these nine, actually, it's important to see our growth story. We have actually grown very rapidly in our portfolio. If you look over the 10 in euros in property value, and now we are 1.2 billion. So it's been a tremendous growth. If you look on our earnings, profit from property management per share, It also continued growing. We have a slight dip during this quarter and we'll have it a couple of quarters before the bridge will start generating revenue. But actually, when the bridge is fully moved in, we will reach 36 euros per share. And that's contracted rents, very stable rents for the next coming periods. Poland, over the last 10 years, has grown 42% in its GDP, followed by Lithuania, 37%, Latvia, 90%, whilst EU averages around 17% growth and Sweden is 16%, just for comparison. Not only the countries are growing, actually the cities where we operate are growing very rapidly. And you see that actually Vilnius is on top of our list. But if you look on... They're in the top 20 list, all of them. So it's, again, amazing, amazing development that is taking place in our region. If you look even further in the future, There is a big expectation that actually regions like Poznań but we see it and we witness it every day actually that the growth is very, very strong in our region, which also fuels the demand for commercial properties, especially offices in prime locations. We're also in a different universe when it comes to yields and rent levels. If you look on comparable markets, our markets still enjoy the lowest yields. And of course, this balance will somehow, over time, will disappear. Rents probably need to be pushed up and will go up, and the prime yields will probably, over time, have to merge towards European levels. Both of these moves would imply quite significant value changes in our portfolio. But as a result of this, it's very important to note that Thank you for watching! And if you go to Hamburg, Düsseldorf or any other German cities, it's actually more than double the price. Our total portfolio is three point, I don't remember exactly, but we'll see that figure later on. So this is a huge discrepancy, this huge opportunity for value growth. What has been keeping this and the rental levels? It's actually a very big supply of office historic in Warsaw. As demand was growing, there was huge take-up, but there was also a lot of new construction taking place. That's subsided significantly. So there is very little construction coming out. The demand remains very strong, and this of course drives square meter prices and rents upwards. And that we experience in this market. And you can also see it very clearly on our very high occupancy levels. In our portfolio, in the Vilnius, we're in the very central part. of Vilnius CBD, very close to the old town, bordering in some places the parliament, etc. We also have one location where all the tech companies are. This is uptown park property. It's a headquarters of a Lithuanian startup called Vinted. and they extended with us last year and actually take possession of the full building now. Continuously growing. Vacation roads in the city, next to the railway station, next to the old town, etc. This is the most attractive location in Poznań today and we have Thank you very much. And in Warsaw we have two amazing properties in the very heart of Rondo Daszyńskiego area in the intersection of Prost. Two amazing properties comprising now 115,000 square meters of prime office. which again creates a very strong market position in this area. It's actually 9% market share in this VOLA district of top-top quality properties, but also it brings a market position. And I didn't mention it, but actually in Vilnius we have 10% market share and in Potsdam we have approximately 10% market share. So very strong positions in each city. If we look at the portfolio, 1.2 billion in value. We have a rental value of around 81 million euros per square meter. This is for the average portfolio. Of course, the Polish Warsaw properties are valued higher and the Baltic properties are valued lower. Yield requirement and valuation is 6.7%, somewhat up compared to previous periods. Average property and we see that actually the cash flow generation from it is extremely strong. Occupancy, again, 88.3%, but this is mainly due to the premises that are not taken in possession by the tenants yet in the bridge. Average rent of 240 euros per square meter and year. Average vault is 4.1 years and share of top 10 tenants is approximately 55%. You see below some of the names of top tenants that we have in our portfolio and you will probably be able to recognize all of them. Thank you very much. Left-hand side, it's actual vacancy if you look in like-like portfolio and 88% is after implications of the bridge. So again right now, again somewhat affected by the higher costs of personnel recruited to take over the properties over time. If we look back to sustainability, we have 100% of the portfolio sustainability certified. All of our properties either bring outstanding or lead platinum. There is no lower level than that. 97% this year in GRASP evaluation, and green financing stands for 92% of our portfolio. So, over to financials and to you, Adela.

Thank you, Kestutis. Thank you very much. Thank you for watching! Moving along to net operating income, it is a bit lower than last year, mainly due to the effects from higher energy costs in the beginning of the year for the period. And for the third quarter, it relates mainly to this cost will decrease. Net financials have decreased quite a lot, but the main reason is positive currency effects in Poland, related to a volatile Zloty Euro development, but also many transactions related to the acquisition of the bridge. And excluding that effect, the expenses are in line with last year. Looking at the profit from property management, the quarter increase of 4% is mainly related to the mentioned currency effect this quarter since it's only been in the portfolio for six days in Q3. During the quarter, we've had some positive effects from property revaluations, but I will get into those a little bit further along in the presentation. So, looking at our earnings capacity, there is quite a lot to talk about this time. You can see that we have added a column adjusted for the full effect of the signed rental agreements in the bridge. So, rental income has increased by 16% due to the new property. The current occupancy rate in the bridge is 57%. Moving on to property expenses, we can see that they have increased. One of the reasons is the already mentioned build-up of our own organization and the lower occupancy rate, which was 88% in total this year. Since we have almost expenses to the tenant, but given that the occupancy rate is quite low right now, it means that a higher portion of those costs stay with us. But it also means that as the vacancy shrinks, the property costs will follow. Central admin increased slightly due to higher personnel costs. Interest income is higher as a result of increased cash, which is also a result of debt as a result of financing of the bridge, but also refinancing that we have done during the quarter in the comparable portfolio. We have excluded the temporary VAT loan here. Overall, compared to Q2, it is a decrease in profit from property management by 13%. And the reason is the mentioned occupancy rate in the bridge, which is low right now. But we know that it is expected to be fully occupied by Q4 next year. And this is visible in the column to the left. Thank you very much. Thank you very much. Values will look closer at the property value development. During the period we have invested almost 8 million in tenant improvements in several buildings. One of the biggest ones... A whole premise for themselves in Vilnius where they have their headquarters. There has also been a positive effect of the unrealized changes in value due to increased market trends in Warsaw, but it was slightly mitigated by a yield increase mainly in Vilnius. In Q2, we divested two Riga properties, which brought down the value by 39 million and the bridge, which has increased the portfolio by 22% since last year. And the average yield in the valuations is 6.7% at the same level as in Q2. And the average growth over the past five years is 25%. So let's look a little bit more in average interest rate and interest coverage ratio in the top left corner. The loan-to-value increased this quarter to 58%, mainly due to the new acquisition, which we had to take a VAT loan, because that will be repaid during this quarter when we get reimbursed from the taxes authorities. But even though we get those money back, the LTV would drop theoretically to 53%. But Simultaneously, our cash will decrease by approximately 50 million during the next one and a half years, over 60% and maybe stay between 55 and 57% in the foreseeable future. Thank you very much. Thank you very much. After the refinancings, our debt duration increased to 3.5 from 2.9 years and the fixed interest period went up to 2.6 from 2 years. The interest coverage ratio is remaining at 2.4 and has been at a stable and good level for a while. and Lilia Kouzmina are already being discussed with our banks. The interest maturity is visible in the same chart and C79 is fixed with the interest rate swaps. Looking at our cash position, it has actually increased since last quarter, despite the acquisition. And the other part is related to tenant fit-out contributions and deferred payments for the bridge acquisition of approximately $50 million. Thank you for watching! So looking at the ETH9 share, we can see that in the long term it has had a positive development and the annual average return is at almost 7%, which outperforms the real estate index, which is minus 8%. Thank you. Now we can go on to questions. Will there be any move-ins in the bridge in Q4 2026 or are they all occurring in 2027?

Most of it is actually a visa and it will take place in the beginning of 2027. So there will be no more moves in during 2026.