Almost EUR 77 million was invested in 2023 in projects managed and developed by the Eika Group. A further EUR 216 million will be invested in these projects, including EUR 76 million in 2024.
Steady development and growth
According to Domas Dargis, CEO of Eika, ‘in 2023, we fell a little short of our investment plan set for the year. On the other hand, we have been recording consistent investment growth for a number of years. For the third year in a row, our investments in managed and developed projects have grown by more than 20% annually. This growth reflects the confident and stable development of the Group’s businesses, taking into account the risks of both market and global events or economic changes’.
Confidence in the stability of the Group’s companies is reflected in the 2023 financing agreements. ‘Eika attracted almost EUR 50 million in financing for projects managed by Group companies, including the financing of the military town in Šiauliai’ (EUR 8 million bond and EUR 28.4 million credit agreement).
In 2023, for the first time in the Group’s history, more was invested in commercial and public real estate development than in residential projects, accounting for 65% of the total investment.
From 2024, an even clearer Group management structure
Eika Development, a company specialising in real estate services and project management, started operations in 2024, taking over the Group’s extensive 30-year experience in real estate management and becoming perhaps the largest project management company in the Baltic states.
2023 was a very productive year for Eika Development’s current operations. During the year, thirteen different projects were under construction, of which eight were completed – five apartment buildings and three non-residential projects: Flow Business Centre, Solo Society City House Vilnius and Monist Hotel in Palanga. The company also coordinated the design of eight buildings, four of which obtained building permits.
At present, the company manages 43 buildings or projects at the design, construction and operation phases. The total area of the managed objects at the operational stage is 103,000 sq. m. This year’s goal of Eika Development is to become a full-fledged manager of real estate projects in the open Lithuanian market, i.e. to expand the portfolio of managed projects not related to the shareholders of the Group.
Strong positions in a shallow housing market
Sales of new housing in Vilnius fell for the second consecutive year to the level of 2014–15, but Eika Group regained its position as one of the market leaders this year, with 173 apartments and commercial premises sold in Vilnius for almost EUR 31 million and a market share of almost 8%.
In 2023, sales took place in eight projects. In one project, Šv. Stepono Baltas Lapas, all apartments were sold. Three new projects were launched during the year – Užupio personos in Filaretai street, Saulės namai in Pilaite and Nauji peizažai in Naujininkai. The largest number of apartments was sold in the projects Mėlyni vilkai – 61 apartments and Metų laikai – 45 apartments. According to Domas Dargis, in 2024, ‘if the “permit cards” are drawn successfully, we will sell apartments in nine projects in Vilnius during the year. This year we plan to offer apartments in three new projects – in Žvėrynas, Senamiestis and Pašilaičiai. Most of these projects will be developed by funds managed by UAB Eika Asset Management (EAM)’.
Accommodation services are becoming an increasingly important part of the Group’s activities
2023 is by far the most successful year for Hilton Garden Inn since its opening in 2019, with the highest occupancy and revenue. The hotel has been internationally recognised with the Connie Award and the EMEA Brighter Together Award, awarded to only 1 out of 120 Hilton Garden Inn hotels in EMEA (Europe, the Middle East and Africa).
Solo Society Student House Kaunas, now in its sixth year of operation, also achieved record occupancy and revenue in 2023. Solo Society City House Vilnius, a new group accommodation project launched in the autumn, is rapidly increasing its occupancy. It has already attracted young professionals and students from half a dozen countries.
Sustainability code activated
The Eika Group has evaluated the carbon footprint of its managed commercial assets during 2023 (within Scope 2). The remote solar park managed by the Group, which was commissioned last year, covers almost 90% of the current year’s electricity demand of these assets and is one of the measures to reduce the carbon footprint of commercial assets.
Currently, all commercial assets managed by the Group are BREEAM certified, and the BREEAM certification process for Metų Laikai, the first apartment building in Eika’s history, was initiated in 2023.
The company’s innovation programme includes experimentation with sustainable products. Last year, a sustainable apartment, built using sustainable local materials, energy-efficient solutions and second-hand furniture, was introduced to the market. This year the wooden apartment project will continue, and a deconstruction plan will be drawn up for the buildings to be demolished with a view of reusing materials and calculating how much the reuse of materials will save in terms of carbon footprint.
In the area of social sustainability, Eika has signed a long-term support contract with the Children’s Support Centre of the Second Step programme. The programme aims to develop the emotional competence of kindergarten children by providing knowledge and tools for educators.
Contract revenues grow
Eikos statyba increased its turnover in 2023 to around EUR 50 million. The most impressive, completed projects are Japoniškas sodas (the Japanese Garden), some residential projects and a further project that cannot be named for security reasons. In 2024, the company will continue with the construction of the VU Faculty of Medicine, the airport’s T4 departure terminal and the maintenance works of Tauras Hill.
New funds on the horizon for EAM
For EAM-managed funds, 2023 was not very active in terms of acquisitions, as it was not possible to agree transaction prices with sellers due to significant changes in the investment environment. However, active searches in 2023, particularly in Poland, will bear fruit in the first half of 2024. The occupancy rate of the commercial property portfolio is as high as 99%.
In line with the expectations of its investors, in 2023 it was decided to launch two new funds: one to give smaller, informed investors the opportunity to invest in a strong fund in the US, and the other to invest in the development of student housing and co-living properties in the Baltic states, Poland and Sweden. The incorporation documents are currently being finalised with the Bank of Lithuania.