Hello and very warm welcome to Eastnine's second quarter results presentation. My name is Kestutis Sasnauskas, and with me, Adela Colakovic, our new CFO.

We will together guide you through this quarterly results and the latest news in the company. Before I start, I kindly ask you to post questions during our presentation, and once the presentation is over, we will respond to your questions.

If we move to our second quarter, we deliver stable results. Our rental income is up slightly.

We're coming from very high occupancy levels, it's very difficult to increase our earnings significantly from 96.5% occupancy, which also increased during the quarter. Our net operating income, again, stable, somewhat lower over the first half year, but it's also the same for the profit from property management.

It's a result of us actually building up organisation to take our next step, and this is probably the main explanatory reason why the net results are somewhat lower. Otherwise, the business is doing extremely well.

Our surplus ratio back again at 92.5%. We have achieved now 8 times debt-to-EBITDA ratio and 45% loan-to-value, which actually enables us to do the acquisitions that we just announced this morning.

Of course, during the quarter, we divested two properties in Latvia, and today, we announced acquisition of The Bridge, and I will go into that acquisition in more detail further on in our presentation. Just briefly, we have approximately 258,000 square meters of leasable area, around a billion euros in total assets.

The new transaction will add additional €300 million approximately in asset value and another 55,000 square meters, we will be around 300,000 square meters of prime, prime office in our markets. You can see the gradual build-up of our portfolio.

We actually went from first acquisition back in 2014, and now in this quarter, we have, of course, first effect of first divestment that we had in Riga. Actually, if you look on the profit from property management per share, it's actually continues performing very strongly.

Of course, there's a slight dip during this quarter, again, build-up of the organisation, sell-off of Riga assets, but when we look into the new acquisition, you will see the enormous positive effect coming from it in the future. What are the long-term trends?

It's all about the very strong economic development in our markets. Baltic states, Lithuania, and of course, Poland were the leaders in economic growth over the last 25 years, 10 years, 5 years, and continue actually performing.

When you put the graph like this, it doesn't look that actually there is very big difference between the growth. If you look on the accumulated basis, this additional 1% to 2% of extra growth gives an enormous actually scale build-up.

If you look on the index, actually, you can compare over the last 10 years, you see how much faster and how much more wealth is being created in that region. That's what we believe is extremely compelling when you look into the future and when you invest in real estate.

We also see that the regions where we are are among the fastest growing regions and expected to be the fastest growing regions. Even the submarkets where we are in, in Warsaw, in Poznan in Poland, in Vilnius, and in Riga, those are actually developing quite nicely and expected to develop quite nicely.

Even if you measure on the top 20 European cities over the last 10 years, 15 years, or even 5 years, actually among the top 20 European cities, 10 of them, half of them, are Polish. We're very happy that all of the cities where we are in, they are among those top growing cities.

Again, the very strong underlying macro picture in our universe. This is, of course, our favorite graph.

It's the average rent in each market and average yield that you get when you buy properties. This enormous divergence of being in the market with lower rents and higher yields, in our view, is somewhat mispriced.

Of course, over time, this gap should close. We don't know when, how long it will take, but this movement should definitely be there.

Looking at the economic development, again, GDP per capita, etc., etc., etc., how fast this region is actually catching up. What does it mean?

If you look on practical terms, you can see that this very low yield in combined with very high rent results in a very high capital values of property. Stockholm peaks at €22 approximately, whilst Warsaw is at 5.9.

Our latest acquisition announced today came at 5.4, slightly below the top level, even though this is a top top prime asset and brand-new one. What is also important to note, that in our now main market, which Warsaw actually just will become after the completion of this transaction, we see a record low offering of new supply of office.

This decreased post-pandemic. There's been a lot of concerns about the offices.

We see, actually, the opposite. We see that the prime office demand is very, very strong, whilst secondary locations are struggling.

This is a global trend where we see, basically, everywhere. It doesn't need to be entirely our markets.

What is, actually, a result of this concern, and also very, very high competition from demand from residential pricing or residential properties, is that land prices went up. Developers see much bigger opportunity to develop resi, and we see that drop in supply for office.

This is a very important factor, actually, driving the rental growth in Warsaw. We are seeing record low vacancies, especially in the region where we are, and we see very strong demand for premises.

If you look on our portfolio, I will run through those pictures very fast, but I would like you to just to show where we are in each of the city, but also the quality of the buildings that we own. This is top top prime, very modern offices with very modern technology in them, all of them highly environmentally certified.

Here, we see headquarters of Vinted, a Lithuanian start-up is a platform for trading secondary clothes in Europe and globally. Here, we see our properties in Poznan, top properties in very heart of Poznan, actually located in the best place with amazing tenants like Allegro, McKinsey, Rockwool, etc., etc.

We have top top locations even in Poznan. Of course, our Warsaw UNIT, which is the largest property, single property, in our portfolio, it's our jewel, and it's also still 100% occupied in very high demand.

We see actually a lot of people willing to come to our office, even though today, we don't have anything to offer. If we look on our portfolio overview today, around a billion in assets, €62 million in rental revenue, which is a rolling 12 months.

If we look on the rental value, which is a contracted rent looking forward, is around €63 million. The average value of the portfolio is €3.6 thousand per square meter.

Current yield requirement is around 6.7 and average property age of 8.5, which is actually one of the youngest portfolios, I would say, if you look in general. Warsaw stands for 33%, Poland today at 51% in total, no, 55% in total, Vilnius at 42%, and, actually, post-sale in Riga, we only have one property, one smaller property in the heart of Riga and one development land plot, it stands only for 3% of our portfolio.

What is also very important to look back is actually how consistent and strong the underlying business is. This is our occupancy on the now I would say I see it on my left-hand side, it's probably so on your right-hand side, is the occupancy rate, which is at 94% on average, and today we have 96.5% of the last quarter, and you see that it's always moving like a little bit like a wave, and it will be moving like a wave, because at this kind of lease-out ratios, it's almost impossible to offer anything else.

Today, we have vacancy in Riga in one property, which is now being totally refurbished, and now we start offering parts of it to the market. At the same time, in Vilnius, we only have around 2,500 square meters of free office in the portfolio of 100 close to 130,000 square meters, it's basically almost nothing to offer, and, of course, occupancy remains very high and demand is very strong.

On the other hand, if we look on the surplus ratio, we are higher than our average over the last again now it's almost 6 years at over 92%, it's 92.5% at this quarter. Of course, we see quite strong, again, strong development, and after some other movements expected to come during Q3, we will even expect somewhat higher occupancy.

In our portfolio. If we look on the environmental part, we have 100% sustainable and certified portfolio.

We only own BREEAM Outstanding and LEED Platinum buildings, even Valdemara that was Gold is now actually re-certified to Platinum. 97% of our turnover is considered to be EU Taxonomy-aligned.

We have 5 stars in GRESB, and green financing stands for 88% of our total financing, and of course, this figure will grow as we refinance our debt. We also aim for net zero target by 2040, which is now SBTi aligned, and we follow this Science Based Targets initiative.

Over to you, Adela.

Thank you. Let's go over the first half-year financials.

As Kestutis mentioned earlier, the results are stable, and rental income are in line with the period both for the quarter and first half-year. There are some underlying changes, and those relate to a couple of things.

One is the divestment of the two properties in Riga, which led to an income loss in Q2 of approximately €300,000. Lower average occupancy rate in the beginning of the period had a negative effect on the year-to-date income.

Both of these effects were mitigated by rent indexations, both in the beginning of the year and some in Q2. Looking at net operating income, it's basically flat in Q2.

Compared to last year and for the period, it's a small negative effect mainly related to the cold weather in the beginning of the year. Overall, there are small movements in the operating income.

As we mentioned before, and as Kestutis highlighted before, we're growing our company, and especially the team in Poland, where we will have some extra and double cost during a limited period of time, building our own organisation and moving from external administration to internal, which we do believe will be both more cost-efficient and also add more value to our tenants in the future. Also the organisation that we have built, and are still building, in Poland will also be able to take on the new property, The Bridge.

Net financials have decreased by 2%, and both for the quarter and the period, and is related to lower average interest rate. The average interest rate is, however, the same as a year ago, approximately 4.4%, but last year we came from a higher interest rate level in the beginning of the year, which we don't have this year.

Profit from property management decreased by 9% and 5% respectively for the quarter and period. The main reason for that is higher cost due to additional employees.

Let's go ahead and look a bit at our earnings capacity, where we can see that rental income has decreased due to the earlier mentioned divestments in Riga, while lower occupancy ratio and indexation had an opposite effect. Property expenses have decreased due to the divestments.

However, the unusual cold winter in the beginning of the year and higher personnel costs related to new employees in Poland has offset that effect. However, the property cost will be lower going forward since we have closed our office in Riga, and will replace the internal management there with external, which will be a bit more cost-efficient since we don't have the same property stock in Riga.

Central administration increases due to higher personnel cost. Interest income has increased as a result of increased cash.

Interest expenses have decreased due to the divestment of the properties in Riga. Overall, the profit from property management is a bit lower now in Q2 compared to Q1 based on the explanations that were given, but going forward expected from Q3, we see it will be a bit higher again.

Looking at the property value development, from beginning of the year, it has changed -4%. During the period, we have invested €4.3 million in tenant improvements in several buildings.

There has also been a small positive effect in the unrealised changes in the value due to increased market rent, but that was mitigated by a slight yield decrease during the period. The biggest change in the portfolio is, of course, the two divestments that decreased the value by €39 million, leading us to a property value of €926 million by the end of Q2.

Like-for-like, the development is flat. The yield in the valuations is 6.7%, up from 6.6% in Q1, and the average growth for the past years in the property portfolio has been 19%, and The Bridge will grow the portfolio by approximately 30%.

Let's look a bit closer at the Eastnine's financing situation, and we can start at the top left corner that shows loan-to-value, average interest rate, and interest coverage ratio. The loan-to-value decreased this quarter to 45 due to the divestments in Riga, which both increased the liquidity and decreased the debt since we amortised the debt related to those properties, leading us to the average interest rate, which has increased slightly this quarter because we realised some interest rate swaps that were connected to those loans to the divested properties and were at some good levels.

We do, however, see potential for the interest rate going down since we do have a few refinancings to do, and we can see that they're coming in at a competitive level. Looking at the debt maturity, the next refinancings of approximately 80 million is due in February and May next year, and we have already began the discussions with our banks.

The interest maturity is visible in the same chart, and 80% of the interest is fixed with interest rate swaps. Overall, the financing is very stable and solid.

LTV and average interest has been trending down over the past 4 years, and as said, overall, all prepared for future growth. Eastnine as a long-term investment: looking at the Eastnine stock, the total return in the Eastnine share for the past 12 months was a bit negative, 7%, but during the same period, the OMX Stockholm Real Estate Index declined by -16%.

Over the recent 5-year period, Eastnine's total return averaged 11% per year compared with a decline of 7% for the real estate index. Let's go over to the acquisition of the day.

Wonderful. Thank you.

I hope this is more cheering to discuss than the stock prices over the last half a year on the market. The Bridge, we're working on this transaction for quite a while.

It's an amazing asset. It adds to our portfolio in Warsaw, both in terms of market share, but also in volume and in quality.

This is top top asset with all the certifications you can mention, very high-tech, again, as all of our properties in Poland. The property was completed 2025.

It's a 40-story building with a lettable area of 55,300 square meters. Today, the property is let to 92%, but we expect that occupancy level to actually increase before we complete transaction.

Today, the building is anchored by Erste Bank Polska, which used to be Santander Polska, and Erste acquired Santander Bank, which was Polish largest private bank, and Visa, which is a Visa technology center, the Visa card technology center. Rental value is expected to be at around €18.2 million, and average lease term in excess of 10 years.

We acquire this property for €300 million valuation. Preliminary purchase price will be lower, and you might ask why is like that.

The reason for that is actually that the building is not fully moved in and commenced, but it's the leases are signed, and we have a price reduction related to certain periods of vacancy during this time as well as some rent frees and some fit-out contributions that will be necessary to complete the building. When it's completed and it's fully operational, we expect the profit from property management to reach 37 euro cents, which is 20% up from today's level.

This build-up will happen gradually depending on the schedules for tenants moving in and, of course, starting occupying the building and starting paying the rent. This 20% increase is related to the last quarter reported to this quarter report.

Now I just wanted to share with you some nice pictures just to get you a little bit of a feeling of the high quality of this building. You can see there some elements from the lobby, which is truly amazing and very inspiring.

It's a true wow feeling when you enter the building. Also architecturally, it's a very, very attractive building.

Again, something that we always work with, that we want to create feelings when people look at our buildings. This acquisition fits our values very, very well.

Last, but not least, I would like to show you where it's situated on the map. Actually, in the background, with a light text on the top, you see Warta, it's actually Warsaw UNIT.

This building is just around approximately 500 meters from our current building, and in between, we have Warsaw Spire, which is one of the landmarks of Warsaw and headquarters of PZU. We are extremely well-located, extremely high quality, and it will be another jewel in our portfolio.

With this, I open up for questions. Thank you.

Yes. We have received a couple of those.

"What market position will Eastnine have in Warsaw's office market following the acquisition of The Bridge with the AAA-class office segment?"

If we look on the total market position, once we acquired Warsaw UNIT was about 1%, and with addition of Bridge, we would be around 2% in the total Warsaw market. If we look in the prime segment, we would be at around 5% in this very central in Warsaw CBD.

In Vilnius, we have approximately 10% market share of the whole market. In Poznan, we have 10% market share.

We'll also would like to continue building, of course, strong position in the CBD area going forward as well.

We have a couple of more. "Even though the market sentiment for offices has been weaker in recent years, Eastnine's portfolio has consistently performed strongly.

What is the secret, and what is the feedback you receive from your top tenants?"

You saw on the figures that actually our occupancy is consistently very high. It is tough, to be honest, to keep tenants because of a different reason than and the reason is that most of those companies actually growing.

We have managed to do some expansions for Rockwool, for instance, in 100% leased-out building, but that implies that we need to create some vacancy to be able to play the chess game of moving around. We see remaining very strong demand.

In general, what we see is that centrally located, high-quality buildings are in very high demand. We see that rents are actually growing in this, and companies are paying maybe for less square meters, but they're paying for much higher quality of square meters.

We truly believe that this trend will continue. It will continue even with the AI expansion, because the most profitable companies, the winners of the AI race, will want to have the best product.

That's why we also continue moving up the quality ladder when we buy new properties. Actually, everything that we buy has to be of absolutely top quality.

Let's mix it up with a Riga question. "Congratulations on the deal in Warsaw.

My question concerns the sale of Riga assets and the decision to close the Riga office. What was the decisive factor behind that decision: market fundamentals, asset-specific limitations, underperformance of local management, or better expected risk-adjustment returns in Warsaw?"

It's a combination of us willing to relocate capital towards Warsaw, but we also cannot hide and say that actually the Riga market was weaker over the years. We have been talking about it.

It's actually the biggest vacancy we had in our portfolio has always been in Riga. It's very difficult to say, because vacancy overall in Riga was quite high, and the market was relatively weak.

By making decision not to develop because we didn't feel very confident about the market fundamentals, we also came to a conclusion that it's probably better to allocate the capital towards Warsaw, where we see higher rental potential simply. We see that this is a much more dynamic market, much more liquid market.

Closing of the Riga office is purely related that we have actually too little volume of the business. It is cheaper to run it externally today.

It's only one building. We cannot have a full team working only on one building.

"Are you surprised that not more Swedish companies invest in the Polish office market?"

I guess real estate industry is very conservative, probably not so surprised. There are some other Swedish companies like Stena, which announced their acquisition actually very close to us.

You can actually see their building just behind, if you move the camera a little bit, I can show you. You see this lower parts, and this is our building.

Transactions are happening. Swedes are there, and yeah.

Let's take a final one. Speaking of Stena Fastigheter, "What makes office properties so attractive in this particular microlocations since Stena also invested there?"

No,

again it's a very central location. What we have to remember as well that Warsaw has a completely different history than most of European cities.

It has been totally destroyed, there is no old buildings, there is no historical center. The historical center was rebuilt entirely in almost its entirety.

We are in a different universe, and the offices are very modern. Of course, it's a huge demand for office space.

We can just compare to Swedish measures just to make a very kind of easy parallel. We have as many square meters of total office space in the whole Poland with its 40 million people, it's approximately 13 million square meters of office space.

This is the amount of office space in Stockholm alone. So 40 million and 2 million share the same office space.

The economy is actually a modern economy, the service economy, if you look on the GDP structure. There is an underlying very strong office demand.

Warsaw alone has 6.5 million square meters of office, which is half of Stockholm, and Warsaw alone is twice the size of Stockholm in number of inhabitants. Economy of Poland is actually I don't remember, it's 50% or 75% now larger than the Swedish total economy.

Once again, there is a mismatch, and there is a pending office demand. Then of course, we can debate whether it's too many square meters in Stockholm or it's too few square meters in Warsaw, and I don't have a clear answer to it, but we feel much more confident investing in prime offices in Warsaw rather than doing it somewhere else.

The yields are much higher. We actually get 6% and 6% up to 6.5% yield on those acquisitions.

The last acquisition, yes, is around 6% around 6% in yield. You get an amazing product at a relatively low per square meter price because of a combination of low rents and high yields.

We have a huge value potential going forward. Warsaw being the cheapest Eastern European market or the cheapest European market, it's European Union with its strongest economy, I think it will change over time.

Might take some time, but it will change over time.

We just got some more questions, if you're happy to answer. "After the acquisition of The Bridge, could you elaborate on the long-term plans for Eastnine?

Are we seeing a smaller market to grow in Poland, for example, Warsaw and/or other Polish cities like Wroclaw?"

We probably continue digging where we stand. We will expand our position in Warsaw.

There is still a number of very, very high quality, very nice properties to buy. We would like to do further acquisitions.

Of course, we have to digest. Our acquisitions are quite big, but again, we prefer to buy super high quality, relatively large buildings that allow us to move the tenants or to work with the tenants within the space, because there's always somebody decreasing a little bit and somebody growing a little bit.

When you have space enough to move, you can actually offer always solutions for both. From that perspective, we will continue looking for bigger properties.

I think all of our properties now in Warsaw, if you look at them, could be transformed into residential should the office market disappear, which I don't believe it will, but as an alternative, because residential prices are today 2 to 2.5 times higher per square meter than the office that you can buy in the same area. To me, math is pretty simple.

Yeah. "Can you comment on any potential future new issue?"

I guess it's a share issue.

Share issue. Okay.

You all know how the shares are traded in real estate, and of course, with these kind of discounts, I think we do not want to even consider that. We can see that actually even without necessity to issue new shares, we can do a very significant acquisition today in Warsaw, which is very, very value-accretive.

It's 20% increase in profit from property management per share. We use a very strong cash flow base in our existing portfolio to actually refinance, because we amortise still on some of the debt, and we believe that even with increased LTVs, we will actually be able to come down to very reasonable levels within a reasonable timeframe and continue actually doing our acquisitions.

As you see, they're a bit chunky when they come, but again, quality goes before quantity for us, and we will want to stay this way. Okay.

Thank you for your questions, but I think we'll stop there for this time.

By this, I wish you a very nice summer. Hopefully, it will not be too hot or not too cold, not too rainy, just a perfect one, and see you in October, I think, or September.

Yeah. In the next quarter results.

Thank you very much.

Thank you.