BREF – Q1 2025 cons review – A quarter with new tenants and rising revenues

Bulgarian Real Estate Fund AD

A quarter with new tenants and rising revenues

• Rental income increased 22.3% to BGN 3.1mln, which is largely the result of new tenants to their Synergy Tower location, which at the end of Q1 2025 had 78.45% occupancy. 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 an increase of 15% to BGN 1.3mln, which was driven by the slight rise in Management Fee and the larger areas, where tenants should be accommodated (Synergy Tower).
• Total expenses marked an increase of 9.6% YoY to BGN 1.5dmln. The largest contributor for that was the growth of the repair and maintenance cost account, which is a consequence of the more lettable areas.
• Expenses to the servicing company increased 14.7% to BGN 0.382mln as a result of the increased assets under management. Interest expense decreased by 14.8% to BGN 0.21mln as a result of the decrease of LT debt by BGN 4.4mln.
• Net profit was BGN 1.6mln, reflecting a 37.1% increase YoY. The increase in rent and property management revenue played a major role here.
• Total assets grew YoY by 12.1%, while net debt decreased by 15.6%. Simultaneously, the company reduced its long-term debt significantly. The drop YoY was 17.6%, or BGN 4.4mln to reach BGN 20.6mln.
• Cash increased in Q1 2025 from BGN 5mln to BGN 6.45mln 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 accessed here.