‘We will continue to navigate the challenges that commercial real estate currently faces’ – Hili Properties MD

Amid an improved financial performance in 2023, Hili Properties Managing Director George Kakouras contends that the company will continue to face the current challenges in the commercial property market, and is optimistic for the year ahead due to a stabilisation of interest rates:

“We will continue to navigate the challenges that commercial real estate currently faces, safe in the knowledge that we own a solid portfolio of property assets, which provide a steady revenue stream.  With interest rates now stabilised, we expect renewed interest in real estate transactions and will continue to monitor the market to identify opportunities for divestment or potential acquisitions in an agile manner.”

Hili Properties, a subsidiary of Hili Ventures, announced its financial statements for the year ending December 2023, registering increased revenues across its varied portfolio of properties across Estonia, Latvia, Lithuania, Malta and Romania.

The company, which invests in high-quality property assets such as shopping centres, restaurants, office space and healthcare facilities, generated €15.7 million in revenue, compared to €12.2 million the previous year, an increase of over 28 per cent.

This was primarily the result of realising income for a full reporting period from two recently acquired properties, Stirnu Shopping Centre in Latvia and MIRO Office in Romania, which is the company’s most valuable asset to date. The company also finalised the reconstruction of the second floor at the DOLE Shopping Centre in Riga, which attracted top-tier retailers that contributed to increased footfall.

As for expenditure, the company’s operating costs remained relatively stable at €4.2 million.

Hili Properties also made headway on its plan to invest in more renewable energy sources. Last year, solar panel installations at MIRO (Romania) and DOLE (Latvia) were concluded – adding 650,000 KWH of clean energy to the grid.

Last year, the company’s EBITDA reached €12.1 million, compared to €8.4 million in 2022, and profit before tax totalled €7.6 million compared to €6.8 million last year. At the end of 2023, the portfolio value of Hili Properties stood at €229 million, from 22 investment properties. 

The company’s entire portfolio was 99 per cent occupied as at 31st December 2023, with an average lease term of 8.3 years. This growth was achieved despite the significant challenges faced by the commercial real estate market globally over the last year.

Commenting on the results, Hili Properties Chairman Pier Luca Demajo remarked:

“Inflation and interest rates rising to unprecedented levels impacted all industries, including the property market, presenting hurdles such as increased borrowing costs and financial pressure on our tenants, which fall on property managers in turn. Despite these challenges, proactive management strategies and strong stakeholder relationships ensured stability when faced with uncertainties throughout the year.”