BREF – 2024 review – A very successful 2024 with increased leased areas and plans to sell an asset

• Rental income increased 34.5% to BGN 10.8mln, which is largely the result of new tenants to their Synergy Tower location, which at the end of 2024 had 68.63% occupancy. After the end of the year, another rental contract was signed – with TechnoLogica EAD for 8 years for 3,367 sqm. With that total occupancy grew to 78.45%. We are expecting further utilization of the spaces in Synergy Tower in 2025.
• The BoD made a decision to sell the Mr Bricolage asset in Sofia (15,174 sqm area, lettable area 7,868 sqm, annual rental income BGN 1,243,900 (EUR 636,000)) for EUR 18mln (bought in 2006 for EUR 6mln). 10% of the price was received as a deposit (BGN 3.5mln under short term liabilities) and BREF will continue to receive the rental income until deal finalization (deadline 10.11.2025).
• Operating Expenses on assets marked a slight increase of 5.7% to BGN 3.3mln, which was driven by the slight rise in Management Fee.
• Total expenses marked a slight decline of 1.5% YoY to BGN 5.1mln. This was possible due to changes in Value of Assets sold (BGN 0.468mln difference).
• Expenses to the servicing company increased 15% to BGN 1.362mln as a result of the increased assets under management. Interest expense also increased only marginally by 1.1% BGN 0.95mln. Total debt as of the end of Q2 is BGN 26.2mln.
• Net profit was BGN 20.4mln, reflecting a 23.5% increase compared to the previous year. The increase in rent and property management revenue played a major role here, as well as the profit from changes in the value of assets.
• Total assets grew YoY by 12.4%, while net debt decreased by 29.8%. Simultaneously, the company reduced its long-term debt significantly. The drop YoY was 18%, or BGN 4.7mln to reach BGN 21.4mln.
• Cash increased in 2024 from BGN 4.1mln to BGN 7.5mln as the finishing works at Synergy Tower have practically concluded and the company is actively looking for tenants for the remaining spots.
• Even though the deal with Mr. Bricolage will likely be completed in Q3 and its profit will be reflected in 2025, we expect that BREF can distribute ca. BGN 0.10 per share dividend based on retained earnings.

Notable events:

• Ontotext AD – 5 yr rental agreement for 1,322.40 sqm at Synergy Tower
• Wiser Technology AD – additional 629 sqm for 5 yrs, thus taking the whole 15 floor of Synergy Tower
• INSAIT at Sofia University – additional 1,322.40 sqm for 5 yrs at Synergy Tower
• Redis Bulgaria EOOD – 1,353.84 sqm for 5 yrs at Synergy Tower
• TechnoLogica EAD – 3,367.27 sqm for 8 yrs at Synergy Tower. Occupancy at 78.45%

Full report can be viewed here.