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Swedish real estate company Eastnine reported a decline in its first-half profit from property management and net income, mainly due to higher vacancy levels at the beginning of the year and operational changes. Despite the weaker earnings, rental income remained stable, supported by growth in its comparable property portfolio. The company also announced the acquisition of a major office property in Warsaw for EUR 300 million, a transaction expected to strengthen its earnings and expand its presence in the Polish market once completed later this year.
Swedish real estate company Eastnine reported lower financial results for the first half of the year, as higher vacancy levels during the early part of the year and operational changes affected its earnings. However, the company maintained stable rental income and continued to expand its portfolio with a major office acquisition in Poland.
The company posted first-half rental income of EUR 30.70 million, remaining broadly unchanged from the previous year. Its comparable property portfolio recorded rental income growth of around 3%, reflecting stable leasing performance across its existing assets despite challenges in some properties.
Net income for the first half stood at EUR 12.46 million, while operating income reached EUR 28.17 million. Profit from property management came in at EUR 14.92 million, declining from the previous year as higher vacancy rates at the beginning of the year and operational adjustments weighed on earnings.
Eastnine said property expenses declined compared with the first quarter, leading to an improvement in its surplus ratio during the reporting period. The company added that the higher vacancies experienced earlier in the year were one of the key reasons for the lower profit from property management.
The company's balance sheet strengthened during the period following the sale of two properties in Riga, which increased cash reserves and reduced its loan-to-value ratio. The divestments form part of Eastnine's ongoing portfolio management strategy, allowing it to recycle capital into larger office investments in its core markets.
After the reporting period, Eastnine agreed to acquire The Bridge, a landmark office property in Warsaw, for EUR 300 million. The acquisition is expected to be completed in the fourth quarter of 2026, subject to financing and the fulfilment of closing conditions.
The company expects the acquisition to increase profit per share from property management by around 20%. Once the transaction is completed, Warsaw is expected to become Eastnine's largest market, with Poland contributing approximately 64% of the company's rental income, further strengthening its focus on high-quality office assets in Central and Eastern Europe.
The company has steadily expanded its presence in Poland over recent years as demand for modern office space in Warsaw has remained comparatively resilient. Eastnine has also continued to optimise its portfolio by disposing of non-core assets while investing in premium office properties with long-term rental potential.
According to available analyst coverage, the stock currently carries a 'buy' recommendation. The broader consensus for companies in the real estate rental, development and operations sector also remains at 'buy'. Eastnine's shares were recently trading at around 11 times expected earnings over the next 12 months, compared with a price-to-earnings multiple of 10 about three months earlier.
Source Reuters
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