BREF 2023 Q4 review – Steady increase in rental revenues in 2023

• Revenues from renting and managing properties have risen 12.7% to BGN 8mln. BREF had lost some clients at the end of 2022, but were able to find new ones and fill up some of the vacancies in the newly constructed Synergy Tower. The Total Revenues account dropped more than 22% to BGN 22.6mln. This, however, was the result of 2 opposing effects- first it was the decline due to the base effects of an outsize gain in Q2 2022 when they sold their Bricolage Varna property for BGN 13.3mln and a land plot in Mladost district in Sofia for BGN 0.7m. The second was the gain from the increase in value of the newly operational Synergy Tower.
• As a result of the above disinvestments, operating expenses fell considerably (67%) to BGN 5.2mln. This resulted also in a 24% decrease in expenses to the servicing company to BGN 1.2mln.
• In the past year, total expenses decreased by 63.1% compared to the previous reporting period. Again, this was mainly due to the sale of the Bricolage property. That also prompted the decrease in other accounts, such as Operational expenses of assets, expenses to the servicing company and other expenses.
• Net profit was BGN 16.5mln, reflecting a 31.6% increase compared to the previous year. The increase in the value of the Synergy Tower project, as well as the increase in rent and property management revenue played a major role here.
• Total assets grew YoY by 10.4%, while net debt decreased by 12%. The company reduced its long-term debt by 14.4%, or BGN 4.53mln to reach BGN 27.3mln.
• The decline in cash from BGN 11.5mln to BGN 4.2mln is explained by the continuing finishing works on the Synergy Tower project. The company expects that cash will be used further in the following trimesters for the same purpose and cash reserves will be further decreased.

Notable events:

• For their Synergy Tower 3 new tenant agreements were reached in Q4:
• “Stage Coworking” OOD for 2,763.98 sqm for 10 years. The company expects that the tenant will be offering services to already existing tenants, as well as outside clients.
• “Bianor Holding” AD for 660.93 sqm for 5 years.
• INSAIT – extension to the existing rental agreement with 660.08 sqm for the booming IT and AI department of Sofia University.
• After 31.12.2023 the following tenant agreement was reached:
• MSG Global Solutions Bulgaria – a 5 year agreement for 662.31 sqm at their Synergy Tower location. With that, total occupancy there stands at 53.79%.

Full report can be downloaded here.