ECONOMIC ENVIRONMENT AND MARKET DEVELOPMENT
The second half of 2025 in Estonia was characterized by economic stabilization following the downturn of the previous period. Imprrovements in the interest rate environment and the decline of Euribor supported the real estate market by enhancing access to financing and reducing the debt burden of households. This, in turn, had a positive impact on buyer confidence and contributed to increased transaction activity in the second half of the year, particularly in the fourth quarter.
However, the real estate market remained selective. Buyers continued to be price-sensitive, and purchase decisions were made more cautiously and over a longer period. At the same time, cost pressures persisted in the construction sector, driven by rising labor costs and the level of construction material prices. In such an environment, there was and increasing need to focus on cost efficiency and risk management in projects to maintain development profitability.
Overall, the second half of 2025 can be seen as period of stabilization in the real estate market, where demand began to recover, but market activity remained balanced and prudent.
BUSINESS ACTIVITIES AND KEY EVENTS
For Everaus Kinnisvara, the second half of 2025 was an active period of construction and investment. In residential real estate, the implementation of previously launched developments continued, while new projects were prepared for the coming periods.
In residential real estate, construction continued the second and third phases of Luige Kodud and the first phase of Kindluse Kodu, as well as the development of infrastructure across the entire Kindluse Kodu area. These projects form the core of the group’s sales revenue for the coming years. In parallel, preparations were made to launch the Kangru Kodu and Kõrveringi Kodud developments, expanding the portfolio both geographically and in terms of product offering.
In the commercial real estate segment, several important milestones were achieved in the second half of the year. By the end of the year, the Haabersti mini-storage complex was completed, adding 341 new storage units to the group’s portfolio. In addition, two new stock-office buildings were completed as part of the Lennuradari development. These projects lay the foundation for growth in the group’s rental income starting from 2026.
On the financing side, the group successfully carried out the second issuance under its bond program in October 2025, raising a total of 3 million euros. The issuance was nearly twice oversubscribed, confirming investor confidence in the company’s business model and growth strategy. The capital raised enabled the continuation of development activities at the planned scale and strengthened the group’s financial position.
FINANCIAL RESULTS AND FINANCIAL POSITION
In the second half of 2025, the group’s revenue amounted to 2,29 million euros (of which 0,39 million euros was rental income from commercial real estate), operating profit reached 3,96 million euros, and net profit totaled 1,55 million euros. The relatively modest level of revenue is directly attributable to the development cycle phase in 2025, during which all new projects were under construction. As a result, no new properties were completed and brought to market, and therefore no sales (transfer of ownership) were realized. The focus on constructing ongoing projects created a strong foundation for revenue growth in subsequent periods. Profitability reflects the group’s ability to manage costs and generate value even during an active development phase, including through other operating income and increases in the value of the real estate portfolio.
As of the end of 2025, the group’s total assets amounted to 66,3 million euros (31 December 2024: 45,6 million euros), representing a year-on-year increase of 45,4%. Inventories totaled 30,3 million euros (31 December 2024: 16,2 million euros), and investment property amounted to 32,5 million euros (31 December 2024: 26,6 million euros). The growth in assets primarily reflects active development activities and investments in projects whose economic benefits will materialize in future periods.
The group’s total loan liabilities amounted to 42,6 million euros. The loan structure is predominantly long-term and tied to specific development projects, which is typica in the real estate development sector. Approximately 10 million euros of loan obligations are due within the next 12 months. The servicing of thes obligations is directly linked to the realization of the group’s development portfolio and is covered by cash flows from the sale of projects to be completed in 2026, as well as the refinancing of commercial real estate projects.
From a cash flow perspective, operating cash flow was negative at 4,1 million euros, which is typical for a real estate developer in an active development phase. The negative cash flow is primarily due to the financing of construction costs prior to the realization of sales revenue. Cash flow from investing activities amounted to -4,7 million euros, mainly reflecting investments in commercial real estate development projects. Cash flow from financing activities totaled 8,0 million euros during the same period, reflecting successfully raised capital.
DEVELOPMENT PORTFOLIO AND SALES POSITION
The group’s development portfolio is clearly moving into the realization phase, where investments made in previous years are beginning to be reflected in revenue.
In 2026, a total of 116 homes will be completed across the Luige Kodud, Kindluse Kodu, and Kangru Kodu developments. By 2027, the portfolio will expand with more than 70 additional completed homes located in the Kangru Kodu and Kõrveringi Kodud projects. The completion of the first phase of Kangru Kodu is planned for the end of 2026, although it may shift to early 2027 depending on development in the construction market and supply chains.
As of now, 50 preliminary sales agreements (contracts under the law of obligations) have been concluded for projects to be completed in 2026, with a total value of 14,6 million euros (excluding VAT). Of this, 4,7 million euros relates to Luige Kodud; 7,6 million euros to Kindluse Kodu, and 2,3 million euros to Kangru Kodu sales agreements.
Pre-sales provide the group with visibility into future cash flows and confirm demand for the developments under construction. At the same time, a significant portion of the sales volumes for 2026 and 2027 remains unrealized, allowing for further growth in sales going forward.
COMMERCIAL REAL ESTATE AND RECURRING INCOME
In the commercial real estate segment, the group is moving towards building stable rental income streams. The Haabersti mini-storage complex completed at the end of 2025, along with the new buildings in the Lennuradari development, will begin to impact the group’s financial results from 2026 onwards. By May 2026, the final two buildings of the Lennuradari development will be completed, bringing the project to its final stage.
According to forecasts, the impact of completed and upcoming assets on commercial real estate income will be approximately 0,4 million euros in 2026 and 0,6 million euros in 2027. This will increase the share of recurring income with the group and help balance the cyclical nature of development-driven sales.
SUMMARY
The second half of 2025 marked a clear culmination of the investment and construction phase of Everaus Kinnisvara. Although revenue remained modest due to the timing of projects completion, the group’s development portfolio expanded significantly, creating a strong foundation for revenue growth in the comin years.
The group enters 2026 and 2027 in a positon where a substantial volume of residential real estate is nearing completion, and the commercial real estate portfolio continues to expand. This means that investments made in previous years will gradually begin to materialize in both increased sales revenue and growing recurring cash flows.
Overall, the group’s position is strong, and its development is clearly moving into the realization phase, where financial results will increasingly reflect the development activities of recent years.
Additional information: Janika Roots, CFO of Everaus Kinnisvara, janika@everaus.ee