Management Board of Northern Horizon Capital AS has approved the unaudited financial results of Baltic Horizon Fund (the Fund) for the six months of 2025.
Challenges in Executing our Strategy
Our strategy emphasizes developing governmental and social tenant concepts and centrally located, multi-functional properties with adaptable spaces designed to inspire, uplift, and enhance the lives of modern citizens and communities that holds potential for long-term value appreciation. We believe, that central locations represent a sound long-term investment, as their strategic positioning ensures sustained demand and strong potential for capital appreciation over time.
Review of the KPIs:
- Occupancy target of 90% has been more difficult to achieve, as both leasing to new tenants and retaining existing ones have become increasingly challenging. At the end of Q2, occupancy rate (based on handover date) was 84.2%. However, despite the progress made, we continue facing more expiries than new letting in some of our properties, such as Upmalas and Lincona.
- We have made some progress with NOI per sq. m., increasing from 107 in Q1 to 109 in Q2. However, achieving an NOI per sq. m. of EUR 130 remains a medium-term challenge, given the rising triple net surcharges and pressure on rent levels due to strong competition for tenants across the markets.
- Loan-To-Value (LTV) ratio of 50% could only be attainable short-term in combination of significant property disposals and/or new equity. Mid-year valuations have been postponed whereas the valuations at year-end remain uncertain and highly depend on leasing activity and investment market.
- Given the lack of potential buyers at acceptable price levels, we will continue the disposal of non-strategic assets — primarily the smaller properties in the portfolio — as there may still be greater liquidity in that segment.
The Fund management team will communicate adjusted strategic plans and measures to achieve those during the course of 2025.
Leasing performance
During the 6 months of 2025, the Fund signed new leases for approx. 9,250 sq. m. Moreover, leases of approx. 6,600 sq. m. were prolonged. 30 new tenants have been attracted to our buildings, in many cases to replace more problematic ones, while 22 existing tenants have decided to continue their cooperation with us.
As one of the key events in Q2 2025, a newly developed restaurant zone was opened on the first floor in Europa SC, facing Konstitucijos Avenue, featuring renovated Fortas and Miyako concepts. With the relocation and change of tenants the occupancy of SC has temporarily decreased, however it is expected to improve in the upcoming quarters. Lease agreement was also signed with a sports facility operator for a 2,316 sq. m space on the third floor with a strong pipeline for approx. 800 sq. m. of sport and related activity operators anticipated to be signed in Q3. In Galerija Centrs, the main lease agreement terminated was with Massimo Dutti, who will be replaced by expanding Mango, Gant and other tenants. Upcoming additions to the tenant mix also include a newly signed 500 sq. m. Sinsay store and a laser entertainment area exceeding 1,900 sq. m., both scheduled to open in summer 2025.
After intensive negotiations, we have further extended our long-term partnership with Latvian State Forestry by renewing the irrevocable lease through 2034. In this connection, the property cash-flows are being affected from Q3 2025 and starting Q4 2026, the leased area will be reduced to 5,300 sq. m in line with government cost-saving measures and global office downsizing trends. The building will be refurbished, with 2,600 sq. m allocated for a second anchor tenant. We’ve already begun active negotiations with private schools and healthcare providers for the future vacant area.
As of the end of June 2025, the portfolio occupancy rate based on handover date stood at 84.2%, while occupancy calculated according to lease signing date reached 85.6%. That being said, our primary challenge and focus for the upcoming quarters will be addressing the remaining and upcoming vacancies in our properties. While International School of Riga is moving in to 3,689 sq. m in S27, the largest tenant who is expected to depart our portfolio end of 2025 is Swedbank in Lincona currently occupying 2,568 sq. m.
Recent leasing activity is reflected in the increase in the weighted average unexpired lease term until the first break option, which was 3.5 years as of 30 June 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 finding solutions to repay the bonds.
The Fund has initiated the delisting process of its Swedish Depository Receipts (SDRs) from Nasdaq Stockholm by October 2025. In addition, the management team has conducted multiple tenders and evaluated various cost-saving measures related to audit, legal, translation, and other administrative services. Through ongoing reviews of overhead expenses, investments in technology upgrades, and strategic fee negotiations, the Fund is working to improve operational efficiency and enhance long-term investment performance. These additional initiatives will benefit the Fund starting from Q4 2025.
Further property disposal attempts have been undertaken during H1, including Postimaja and Apollo Plaza, as well as some non-core assets. However, given prevailing market conditions, for many of our properties there is a lack of potential buyers overall, and lack of buyers willing and able to pay prices at or around the current valuations not reflecting the long-term value especially of our strongest assets. We will continue the disposal of smaller non-strategic assets as there may still be greater liquidity in such segment.
Given the requirements for capital expenditure into the ongoing turnaround of the properties and the level of debt, the net cash flow of the Fund has remained negative. Therefore, the management is developing a new refinancing strategy which may involve a combination of selling an appropriate asset and raising additional funds from other sources in order to find a definitive solution for strengthening its capital structure in the second half of 2025.
By focusing on increasing occupancy rates and optimizing property concepts, we aim to enhance asset performance and maximize net operating income. In a challenging rental market 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 that the Fund remains resilient in this dynamic market environment, not being forced to sell its stronger properties for cents on the dollar and lose its valuable assets permanently.
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 6.1 million in H1 2025 (H1 2024: 6.0 million). The results for H1 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 H1 2025 was 1.6% higher than in H1 2024, mainly due to higher occupancy in Galerija Centrs since the complex was undergoing a transition period of certain tenants in the buildings in H1 2024.
In H1 2025, the Group recorded a net loss of EUR 891 thousand compared with a net loss of EUR 12,849 thousand for H1 2024. Excluding last year’s interim valuation loss, net loss for the prior year period was EUR 325 thousand. The result was mainly driven by the losses on disposal of investment properties. Earnings per unit for H1 2025 were negative at EUR 0.01 (H1 2024: negative at EUR 0.11).
Investment properties
At the end of H1 2025, the Baltic Horizon Fund portfolio consisted of 11 investment properties in the Baltic capitals. The fair value of the Fund’s portfolio was EUR 227.5 million at the end of June 2025 (31 December 2024: EUR 241.2 million) and incorporated a total net leasable area of 111.2 thousand sq. m. During H1 2025 the Group invested approximately EUR 2.7 million in tenant fit-outs.
Gross Asset Value (GAV)
As of 30 June 2025, the Fund’s GAV was EUR 238.8 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 30 June 2025, the Fund’s NAV was EUR 97.1 million (31 December 2024: EUR 98.1 million). The NAV decrease was mainly due to losses on disposal of Meraki. As of 30 June 2025, IFRS NAV per unit amounted to EUR 0.6766 (31 December 2024: EUR 0.6833), while EPRA net tangible assets and EPRA net reinstatement value were EUR 0.7223 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 30 June 2025, interest-bearing loans and bonds (excluding lease liabilities) were EUR 135.7 million (31 December 2024: EUR 149.0 million).
As of 30 June 2025, the Fund’s consolidated cash and cash equivalents amounted to EUR 7.1 million (31 December 2024: EUR 10.1 million).
Cash flow
Cash inflow from core operating activities in H1 2025 amounted to EUR 2.7 million (H1 2024: cash inflow of EUR 3.7 million). Cash inflow from investing activities was EUR 12.9 million (H1 2024: cash outflow of EUR 2.5 million) mainly due to the sale of Meraki in March 2025 for EUR 16 million and higher capital expenditure on investment properties. Cash outflow from financing activities was EUR 18.6 million (H1 2024: cash outflow of EUR 2.0 million). In H1 2025, the Fund repaid the BH Novus UAB (previously BH Meraki UAB) loan amounting to EUR 10.3 million, redeemed early bonds in the amount of EUR 3 million, prepaid EUR 0.6 million of loans, and paid interest on bank loans and bonds.
Key earnings figures
| EUR ‘000 | H1 2025 | H1 2024 | Change (%) |
| Net rental income | 6,078 | 5,983 | 1.6% |
| Administrative expenses | (1,069) | (1,114) | (4.0%) |
| Other operating income (expenses) | 26 | (16) | 262.5% |
| Losses on disposal of investment properties | (1,096) | (447) | 145.2% |
| Valuation losses on investment properties | (9) | (12,524) | (99.9%) |
| Operating (loss) profit | 3,930 | (8,118) | 148.4% |
| Net financial expenses | (5,008) | (5,135) | (2.5%) |
| (Loss) profit before tax | (1,078) | (13,253) | (91.9%) |
| Income tax | 187 | 404 | (53.7%) |
| Net (loss) profit for the period | (891) | (12,849) | (93.1%) |
| Weighted average number of units outstanding (units) | 143,562,514 | 119,635,429 | 20.0% |
| Earnings per unit (EUR) | (0.01) | (0.11) | (90.9%) |
Key financial position figures
| EUR ‘000 | 30.06.2025 | 31.12.2024 | Change (%) |
| Investment properties in use | 227,474 | 241,158 | (5.7%) |
| Gross asset value (GAV) | 238,789 | 256,048 | (6.7%) |
| Interest-bearing loans and bonds | 135,660 | 148,989 | (8.9%) |
| Total liabilities | 141,650 | 157,953 | (10.3%) |
| IFRS Net asset value (IFRS NAV) | 97,139 | 98,095 | (1.0%) |
| EPRA Net Reinstatement Value (EPRA NRV) | 103,690 | 104,333 | (0.6%) |
| Number of units outstanding (units) | 143,562,514 | 143,562,514 | – |
| IFRS Net asset value (IFRS NAV) per unit (EUR) | 0.6766 | 0.6833 | (1.0%) |
| EPRA Net Reinstatement Value (EPRA NRV) per unit (EUR) | 0.7223 | 0.7267 | (0.6%) |
| Loan-to-Value ratio (%) | 60.7% | 61.8% | (1.1%) |
| Average effective interest rate (%) | 6.3% | 6.7% | (0.4%) |
During Q2 2025, the average actual occupancy of the portfolio was 82.6% (Q1 2025: 82.7%). The occupancy rate increased to 84.2% as of 30 June 2025 (31 March 2025: 82.3%).
Overview of the Fund’s investment properties as of 30 June 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 | 36,374 | 17,252 | 2.8% | 3.2% | 71.0% |
| North Star | Office | 19,628 | 10,705 | 5.6% | 6.2% | 92.2% |
| Total Vilnius | 56,002 | 27,957 | 3.7% | 4.5% | 79.1% | |
| Riga, Latvia | ||||||
| Upmalas Biroji BC | Office | 19,253 | 11,175 | 3.7% | 4.7% | 64.3% |
| Vainodes I | Office | 15,940 | 8,128 | 6.4% | 8.8% | 100.0% |
| LNK Centre | Office | 12,447 | 7,318 | (2.0%) | (2.9%) | 51.9% |
| Sky SC | Retail | 4,910 | 3,260 | 8.7% | 9.3% | 100.0% |
| Galerija Centrs | Retail | 60,949 | 20,015 | 3.7% | 4.9% | 84.4% |
| Total Riga | 113,499 | 49,896 | 3.6% | 4.8% | 78.7% | |
| Tallinn, Estonia | ||||||
| Postimaja & CC Plaza complex | Retail | 21,876 | 9,232 | 3.4% | 5.7% | 100.0% |
| Postimaja & CC Plaza complex | Leisure | 13,195 | 7,877 | 6.7% | 6.0% | 100.0% |
| Lincona | Office | 13,110 | 10,767 | 6.8% | 8.4% | 92.4% |
| Pirita SC | Retail | 9,792 | 5,425 | 6.7% | 8.6% | 94.5% |
| Total Tallinn | 57,973 | 33,301 | 5.2% | 6.9% | 96.6% | |
| Total portfolio | 227,474 | 111,154 | 4.0% | 5.2% | 84.2% |
- 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 | |||
| 01.04.2025 – 30.06.2025 |
01.04.2024 -30.06.2024 | ||
| Rental income | 3,734 | 3,821 | |
| Service charge income | 1,217 | 1,315 | |
| Cost of rental activities | (1,843) | (1,947) | |
| Net rental income | 3,108 | 3,189 | |
| Administrative expenses | (521) | (529) | |
| Other operating income | 8 | (80) | |
| Losses on disposal of investment properties | (191) | (26) | |
| Valuation losses on investment properties | (4) | (12,520) | |
| Operating profit (loss) | 2,400 | (9,966) | |
| Financial income | 18 | 15 | |
| Financial expenses | (2,353) | (2,653) | |
| Net financial expenses | (2,335) | (2,638) | |
| Profit (loss) before tax | 65 | (12,604) | |
| Income tax charge | 12 | 379 | |
| Profit (loss) for the period | 77 | (12,225) | |
| Other comprehensive income that is or may be reclassified to profit or loss in subsequent periods | |||
| Net gain (loss) on cash flow hedges | (109) | (110) | |
| Income tax relating to net gain (loss) on cash flow hedges | (2) | 17 | |
| Other comprehensive income (expense), net of tax, that is or may be reclassified to profit or loss in subsequent periods | (111) | (93) | |
| Total comprehensive income (expense) for the period, net of tax | (34) | (12,318) | |
| Basic and diluted earnings per unit (EUR) | 0.00 | (0.10) | |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
| EUR ‘000 | 30.06.2025 | 31.12.2024 | |
| Non-current assets | |||
| Investment properties | 227,474 | 241,158 | |
| Intangible assets | 1 | 4 | |
| Property, plant and equipment | 1 | 5 | |
| Derivative financial instruments | – | 1 | |
| Other non-current assets | 875 | 1,225 | |
| Total non-current assets | 228,351 | 242,393 | |
| Current assets | |||
| Trade and other receivables | 2,841 | 2,800 | |
| Prepayments | 512 | 802 | |
| Cash and cash equivalents | 7,085 | 10,053 | |
| Total current assets | 10,438 | 13,655 | |
| Total assets | 238,789 | 256,048 | |
| Equity | |||
| Paid in capital | 151,495 | 151,495 | |
| Cash flow hedge reserve | (485) | (420) | |
| Retained earnings | (53,871) | (52,980) | |
| Total equity | 97,139 | 98,095 | |
| Non-current liabilities | |||
| Interest-bearing loans and borrowings | 111,193 | 98,491 | |
| Deferred tax liabilities | 1,732 | 1,898 | |
| Derivative financial instruments | 427 | – | |
| Other non-current liabilities | 1,164 | 1,446 | |
| Total non-current liabilities | 114,516 | 101,835 | |
| Current liabilities | |||
| Interest-bearing loans and borrowings | 24,702 | 50,736 | |
| Trade and other payables | 2,097 | 4,473 | |
| Income tax payable | – | 14 | |
| Derivative financial instruments | – | 317 | |
| Other current liabilities | 335 | 578 | |
| Total current liabilities | 27,134 | 56,118 | |
| Total liabilities | 141,650 | 157,953 | |
| Total equity and liabilities | 238,789 | 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 20:00 EET on 07 August 2025.
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