Fausto Capital Continued Growth Wave in First Half
Fausto Capital, which develops, leases, and manages office and commercial properties, reported first-half 2022 sales revenue of 4.56 million euros, an increase of 13% compared to the same period of the previous year. Fausto Capital's earnings before taxes and depreciation, or EBITDA, grew to 2.15 million euros.
According to Fausto Capital owner Kenneth Karpov, the growth resulted from the occupancy of buildings built in Fahle Park with new tenants and the establishment of one of Tallinn's most prestigious residential and business quarters. "What has been surprising is the consistent activity in the rental market, despite the uncertainty caused by the war. From a development perspective, the focus is on continuous analysis of construction input prices. Construction prices have increased significantly over the past year, but rental price levels have also risen somewhat. Risks from coronavirus are no longer visible, and tenant payment behavior is currently very strong," said Karpov.
Fausto Capital's first half is characterized by the sale of four shopping centers – Vironia Keskus, Ahtme Keskus, Rappeli Keskus, and Tartu Raadi Maxima XX supermarket were realized. According to Karpov, the sales were driven by a desire to focus more on commercial real estate development, particularly the development of Tallinn properties – Fahle Park and downtown office buildings. "We are directing investments into downtown Tallinn developments, as the business spaces we have created are well-received and have become some of the most popular areas on the commercial real estate market in Tallinn. We want to continuously invest in the quality of office spaces and technical systems in our office buildings, as well as offer various ancillary services. For example, we have created comprehensive rest areas, parking areas, and we are installing solar panel parks on the buildings to ensure more favorable ancillary costs for our tenants," commented Karpov on the use of investments from the sales.
Fausto Capital's largest lease agreements were concluded in the previous half-year in Fahle Park. "Workland is opening a 3,200 square meter office in Fahle, Betsson Group recently opened a 1,500 square meter office, and LPP Estonia, Bestwine and others will be added in the fall. Our downtown Tallinn project Maakri HUB is also being filled with new tenants, we recently signed a lease with furniture retailer Lartus. Additionally, Fausto Capital has as many as 5 anchor tenant agreements at the signing stage for rental space exceeding 4,500 square meters," said Karpov.
Real estate investment valuation raised the value of Fausto Capital's assets to 216 million euros at the end of 2021, and the portfolio includes over 110,000 square meters of commercial and office space, including the well-known Fahle Park, Maakri HUB, Kompassi Maja, Tartu Telia business building, and others.
Fausto Capital remains well capitalized, the average interest rate on the group's loan agreements fell to 2.0%, and Fausto continues active development activities in several directions. According to Karpov, Fausto has as many as 3 new office buildings in Fahle Park in the active design phase. "Currently, active design work is underway on the property at Tartu mnt 84B, which will house Estonia's first environmentally friendly high-rise building with wooden structures. The Fahle Boiler House with its chimney also awaits renovation and will be transformed into Tallinn's new viewing platform, and behind it a new building with a parking garage and office spaces," said Karpov. Also, according to current plans, the 17-story Maakri HUB will open its doors by the end of this year, bringing 10,000 square meters of A-class office space to the commercial real estate market and offering competition to office buildings in Tallinn's CBD area.
