In 2023, almost 77 million EUR was invested in projects managed and developed by the Eika Group. It is planned to invest about 216 million EUR in these projects, of which about 76 million EUR in 2024..
Stable development and growth
According to Eika CEO Domas Dargis, 2023 was a little short of achieving the annual investment plan. On the other hand, we have been recording consistent investment growth for several years. “For the third year in a row, our investments in managed and developed projects have grown by more than 20 percent annually. Such investment growth indicates a confident and stable development of the group’s companies, taking into account the risks of both market and global events or economic changes,” says D. Dargis.
The confidence in the stability of the group’s companies is revealed by the financing agreements for 2023. Eika attracted almost 50 million in financing for projects managed by the group’s companies, including the financing of the military town in Šiauliai (EUR 8 million in bonds and EUR 28.4 million in credit agreements).
In 2023, for the first time in the group’s history, more was invested in commercial and public property development than in residential projects, accounting for as much as 65 percent of all investments.
Even clearer group management structure from 2024
In 2024, Eika Development, a company dedicated to real estate services and project management, began operations. Having taken over the group’s substantial 30-year experience in real estate management, it is currently perhaps the largest project management company in the Baltic States.
In 2023, the current scope of Eika Development’s activities was very productive. During the year, the construction of 13 different projects was carried out, 8 of which were completed – five apartment buildings and three non-residential projects: the business center “Flow”, “Solo Society City House Vilnius” and the “Monist” hotel in Palanga. The design of 8 buildings was also coordinated, of which 4 objects received building permits.
Currently, the company manages 43 objects or projects in the design, construction and operation stages. The total area of objects managed in the operation stage is 103 thousand sq m. This year, Eika Development’s goal is to become a full-fledged real estate project manager in the open Lithuanian market, i.e. to expand the portfolio of managed projects that is not related to the shareholders of the group’s companies.
Strong positions in a shallow housing market
Vilnius new housing sales have fallen to the 2014-15 level for the second year in a row, but the Eika group has regained its position as one of the market leaders this year and has preliminarily sold 173 apartments and commercial premises in Vilnius, worth almost 31 million EUR, and has occupied almost 8 percent of the market.
In 2023, sales took place in 8 projects. In one project – “Šv. Stepono Baltas Lapas” all apartments were sold. Three new projects were launched during the year – “Užupio personos” on Filaretų street, “Saulės namai” in Pilaitė and “Nauji peizažai” in Naujininkai. The largest number of apartments was sold in the projects “Mėlyni vilkai” – 61 apartments and “Metų laikai” – 45. According to D. Dargys, in 2024, if the “permit cards” are successfully issued, we will carry out housing sales in Vilnius in 9 projects during the year. This year, we plan to offer housing to the market in three new projects – Žvėrynes, Senamiestis and Pašilaičiai. The majority of these projects are funded by funds managed by UAB “Eika Asset Management” (hereinafter EAM).
Accommodation services are becoming an increasingly important part of the group’s activities
Hilton Garden Inn had its most successful year since opening in 2019, with highest occupancy and revenue. The hotel was recognized internationally with the Connie Award and the EMEA Brighter Together Award, which is awarded to only 1 out of 120 Hilton Garden Inn hotels in the EMEA region.
Solo Society Student House Kaunas, which has been operating for six years, also achieved record employment and revenue in 2023. The group’s new accommodation service project, Solo Society City House Vilnius, which launched in the fall, is rapidly increasing employment. It has already attracted young professionals and students from half a dozen countries around the world.
Sustainability code activated
During 2023, the Eika Group calculated the CO2 footprint of its managed commercial properties (Scope 2). The remote solar park managed by the group, which began operating last year, met almost 90 percent of the current year’s electricity needs of this property and is one of the measures to reduce the pollution footprint of its commercial properties.
Currently, all commercial properties managed by the group have BREEAM certificates, and in 2023 the BREEAM certification process for the first apartment block in Eika’s history, Metų laikai, was launched.
The company is conducting experiments with sustainable products in the context of its innovation program. Last year, a sustainable apartment was introduced to the market, which was created using sustainable, local materials, energy-saving solutions, and second-hand furniture. This year, the wooden apartment building project will continue, and it is also planned to prepare a “deconstruction” plan for buildings being demolished, in order to reuse materials and calculate how much CO2 footprint the reuse of materials saves.
In the area of social sustainability, Eika has signed a long-term support agreement for the Second Step program with the Child Support Center. Through the program, we aim to develop the emotional competence of kindergarten children by providing knowledge and tools for educators.
Contract revenue is growing
“Eikos statyba” increased its revenue in 2023, reaching approximately EUR 50 million. The most impressive completed projects are the “Japanese Garden”, a couple of apartment projects and one secret project that cannot be named for security reasons. In 2024, the company will continue the construction of the Faculty of Medicine of the VU University of Applied Sciences, the T4 departure terminal of the airport, and the renovation of Tauros Kalnas.
New funds on the horizon at EAM
EAM managed funds were not very active in terms of acquisitions in 2023, as they were unable to agree on transaction prices with sellers due to a significant change in the investment environment. However, active searches in 2023, especially in Poland, will yield results in the first half of 2024. The occupancy rate of the commercial property portfolio reaches as much as 99 percent.
Taking into account the expectations of its investors, a decision was made to establish two new funds in 2023: one of them will open the opportunity for smaller informed investors to invest in a strong fund in the USA, the other will invest in the development of student dormitories and Co-living type objects in the Baltic States, Poland and Sweden. The establishment documents are currently being finalized at the Bank of Lithuania.