Hi, and welcome to our third quarter results presentation. My name is Liv Malvik, and I am the CEO of KMC Properties. With me today, I have Kristoffer Holmen, our CFO, who will take us through our financials a bit later. First, let's go through the highlights from the third quarter. Our operating performance was stable, while a moderate adjustment to the portfolio, to the portfolio values, resulted in a slight increase in net yield and LTV. Our WALT is steady and strong, 11.1 years at the end of Q3. More important going forward is the announcement of the final part of the transformative BEWI transaction. This NOK 625 million acquisition is accretive to KMC on all parameters and is yet another example of the growth leverage that lies in our platform.
Importantly, this transaction will bring in a new strategic owner, Nordika, which we expect will provide strong support for our growth ambitions going forward. It also gave us the possibility of adding another bank to our financial universe, Nordea Kredit in Denmark. The final part of the BEWI transaction completes a NOK 1.9 billion agreement that has further diversified our portfolio and brings us closer to our target of NOK 8 billion gross asset value by the end of 2024. Since the end of 2020, we have grown our asset base 2.1 times at increasing EBITDA yields. This shows the growth leverage inherent in our platform. We see an attractive buyer's market ahead and expect our investors and lenders to continue providing strong support for our growth ambitions.
The value of our platform is further demonstrated by annualized rental income, post-transaction, increasing by 2.3 times since we started out in December 2020. While growing a higher income level, we are also building a longer rental backlog. The combination of 7.2% net yield, 11.7 years WALT, and 100% CPI coverage, puts us in a great position to deliver high and stable returns over time. Despite the macroeconomic turn, BEWI acquisition brings in an attractive financing that lowers the interest margin further through a margin of 1-1.25%, while also improving our debt maturity profile. Going all the way back to 2020, we are proud to have reduced our interest margin by more than one percentage point, while doubling our asset base. This demonstrates the continued backing of a widening base of lenders.
Our new strategic owner, Nordika, is a leading Nordic real estate specialist with an approach to value creation that is fully aligned with ours. Nordika has demonstrated strong returns historically and has recently completed a successful capital raise. As a part of the BEWI transaction, Nordika has subscribed for and will be allocated shares amounting to 12.7% of the post-transaction shares, with a call option to further increase to 17.4%. We believe a more diversified shareholder base will be of great value going forward, and we are very pleased to welcome Nordika to KMC Properties. We have been talking for quite a while, quite some time, about the value of our platform, and the BEWI transaction is a perfect illustration of this. The transaction, transaction brings in an increase in the annual rental income of approximately 13%.
However, the total cost for KMC Properties will only increase by approximately 5.2% due to a very limited increase in administration and property expenses, as well as very attractive financing terms. As a result, we expect the increase in net income from property management to be approximately 26%. We believe we can still continue to grow our asset base substantially without significant increase in our administration cost. We intend to utilize the benefit of scale going forward to grow value for our shareholders. Kristoffer, will you please take us through the financials?
Yes. Thank you so much, Liv. Let's go over to the P&L. In the second quarter, our rental income increased by 58% compared to the same period last year. Seven and a half percent of the top-line growth came from CPI adjustments, and the rest came from value accretive acquisitions and investments, all with a gross yield above 7.7%. We have had more or less flat operating expenses, resulting in a 63% increase in EBITDA year-over-year. Despite significant increased floating interests and a NOK 5.5 million non-recurring interest expense, due to the NOK 2.05 billion refinancing completed in July, interest expenses are still quite stable in Q3 compared to the last quarter.
That's due to the refinancing we did in July, where we managed to reduce the overall interest margin by 0.43 percentage points in a challenging market. Net income for property management came in at NOK 36 million, up 29% year-on-year, which is in accordance with our guidance last quarter. Despite the strong profit from property management, we suffered a net loss before tax of NOK 125 million, primarily explained by unrealized costs. We have built a bridge to explain these items. As you can see on the current slide, from our NOK 36 million net profit from property management, interest and currency swaps added NOK 29 million in unrealized gains. This was, however, offset by NOK 22 million of amortized loan costs, of which approximately NOK 40 million is non-recurring.
Fifty-one million of unrealized currency losses, mostly related to intergroup loans, where we have limited cash effects due to our currency swaps. The reduction in value of our investment properties of a hundred and sixteen million represent an adjustment of minus 1.9 from Q2. Year to date, the reduction is minus 2.6%, which is modest compared to adjustments made in many other real estate companies, which underlines the strength of logistic and light industry portfolios in today's market. All in all, these items resulted in the net loss before tax of hundred and twenty-five million. The annual run rate at Q3 is relatively stable compared to the Q2 run rate.
The small reduction in rental income is due to sale of assets and currency translations, and net realized financials are up due to increased interest-bearing debt and floating interests. However, the announced BEWI transaction will have a significant effect on the run rate figures. As Liv also said, even though the rental income increased by 13%, net income for property management increases by an impressive 26%, due to the low operational and financial expenses related to the acquisition. Net income for property management after tax, representing the net cash earnings, was at NOK 0.37 per share the last 12 months, up from NOK 0.33 last quarter. So NOK 0.37 per share the last 12 months, yes, up from NOK 0.33 last quarter, which is a 12.1% increase.
The adjusted EPRA earnings per share was at NOK 0.39. However, the challenge with the EPRA earnings is that it recognizes some currency gains and losses without taking into account fair value adjustments of currency swaps, which offset these currency effects. When recognizing these fair value adjustments, the earnings per share would be NOK 0.44 per share, which gives a 8.2% return on our current trading price of approximately NOK 5.4 per share. So over to more details on our interest-bearing debt. In the table to the left, you see our interest-bearing debt with interest rates at the end of June, before the refinancing, at the end of September, after the refinancing, however, with the higher floating interest rates and the pro forma figures showing the effects of the coming BEWI transaction.
Both the refinancing and the BEWI transaction significantly reduces our interest expenses due to the reduced interest margins. And since part of the financing of the BEWI transaction is a bank loan from Nordea, Denmark, a new bank in our bank universe, as Liv also mentioned, with a very favorable... And the bank loan has a very favorable interest margin, and it is refinancing our Danish properties. We are now delivering on the interest margin that we guided on during our refinancing this spring, which we are obviously very happy about. So as you can see from the graph to the right, after the BEWI transaction, we continue to increase the EBITDA to interest expense gap significantly, which puts us in a very good financial position.
If you look at the debt maturity profile on the next slide, you see that the weighted average debt maturity, or the weighted debt maturity is expected extended by the BEWI transaction. As you can see in our interim report, our swap agreements have a long duration. Our current EPRA LTV, LTV is at 59.6%. However, when we take into account the value of our interest rate and currency swaps, the LTV is at 56.3%, and this will be further reduced through the BEWI transaction. So if you look at the interest coverage ratio, you see that we have a comfortable headroom to our covenants going forward, given the current forward interest rates. As you can see on the next slide, this is a result of a contin...
on our continuous work on improving our financial position. Despite significant increase in floating interest rates since the second half of 2021, accretive investments and improved financial terms has kept the interest coverage ratio stable and well above our covenant of 1.5. This headroom will increase further once we close the BEWI transaction. Over to you, Liv.
Thank you, Kristoffer. KMC Properties drive our value creation through four key areas: acquisitions, CapEx projects in our existing portfolio, greenfield projects for existing and new tenants, and finally, capital optimization. We have built a strong platform to continue our journey towards our goals, which will be further strengthened by the last part of the BEWI transaction. Following this, we will have a total of 70 properties with 680,000 square meters in 8 countries, a very diversified industry exposure, spanning 17 tenants, and a WALT of 11.7 years. We are convinced that this represents an ideal basics to create further value growth for our stakeholders in the coming years. We are getting closer to our long stated goal to reach NOK 8 billion gross asset value by the end of 2024.
We see an attractive buyer's market ahead, where we are well placed to capture opportunities with the latest BEWI transaction, demonstrating what can be achieved. Our efficient and scalable operating platform, as well as access to attractive financing from strong lender relationships, gives us a clear advantage when sourcing accretive investments. Thank you for listening in. We will now open for Q&A. Kristoffer, will you please join me?
Yes. Thank you, Liv. Are there any questions out there? Feel free to type them into the question field. There is a slight delay on the questions, so we will give it one minute more. Okay.
Okay.
Seems like there's no more questions, so, thank you so much.
Thank you.