Hi, and very warm welcome to Eastnine's Q1 result presentation. With me, I have today Britt-Marie Nyman, and we will go through our Q1 together with you. Before we start, I would like to remind you that there is a chat function just below my picture where you can pose questions during the time of the presentation, and they will be answered at the end of the presentation. Let's start. If we move into the highlights of the quarter, we actually continue growing, and that is the most important thing. We continue growing our top line by 22%. We continue growing our profit from property management by 9%.
We also strengthened our cash position during the quarter, and today we have a very strong cash position allowing us to continuously exploit the growth opportunities that there are in the market. We received strong dividends from Melon. We refinanced Uptown Park, and we also received repayment from Baltic Property Fund II investment. We also enjoy higher occupancy rate, and we see a continuous, very strong trend in our market with our clients mainly growing, and returning back to the offices, in a strong way. Of course, we also have a holding in Russian fashion company, Melon Fashion Group, and that has been negatively affected by the war.
Not only that the IPO was postponed, but also the weighted risk of capital has actually increased and hence the valuation we had to take a down valuation. This is a bit of a negative during the quarter, but otherwise the underlying business is performing well. If we look at the market, we also started exploring opportunities in Poland where we see actually huge opportunities. I will come back to this a little bit more during the presentation. If we go back to the Baltic markets and our development, Baltics have actually developed very strongly. We rebounded very strong during last year.
Now we had a very strong first quarter, somewhat revising down the growth expectations as a result of high inflation, high uncertainty, and of course, the war that has created a lot of turbulence in the raw material prices, as well as some supply chain disruptions globally. Baltic economies are global and turning a little bit down. We don't feel that in our portfolio. We see our clients actually continuously growing, and most of our clients are actually not so much Baltic-related businesses. We see inflation spike in the Baltics much faster than most of the European countries. Again, in this turbulent environment, for us, it's not negative.
As it pushes up the rental prices, it pushes up revenues in the future or expected revenues in the future for us. At the same time, Baltic markets have very, very little effect on the Euro bond market as such. We will be following sort of financing costs probably more related to the average European levels. Property yields have been stable. They have been declining over the years, especially in the last two years, but now we see a certain stability. Of course, we believe that if you look on our portfolio as well and the revaluations, we haven't seen any changes basically there. During the last year, we made three acquisitions. We increased our property portfolio or the floor space by around 19%.
This gives us approximately similar type of revenue growth. Now in this quarter, everything is included. If you look on all those acquisitions, now they are fully paying off. The last acquisition was done in December, on the very last days of December. We changed our parameters in terms of balance sheet, but actually revenues start ticking only from the beginning of this year. If you look on our overall portfolio today, we have a very strong position in Vilnius today. We are the largest player in office market in Vilnius with approximately 83% of our portfolio being there, 121,000 square meters of modern offices. They're quite big ones. On average, we have properties of 13,500 square meters.
We have also experienced very high occupancy rate in Vilnius throughout the pandemic and throughout the years. We still see very strong demand for the leasing properties as well. This year we report this quarter we report also strong growth in net leasing as well. In Riga, 13, almost 70% of our portfolio is actually in Riga today. There we have a bit slower development, but still we notice a number of positive venues actually during the quarter, despite all these worries that have been connected to the war in Ukraine. If you look on our overall picture, there are not so much changes quarter to quarter.
We see some of our tenants continuously growing, Invada taking more space. Among these major names that you see on the list, all of them or basically all of them are continuously employing. This of course will in the future result in a higher demand for properties. All of our properties are very centrally located. You see it on the map on the left-hand side. Where you can see actually the dots mean different number of properties where we have them. Now to Melon. Of course it is probably the biggest value change that we have in our portfolio. It's very sad to do a write-down during the quarter.
At the same time, we noticed that Melon actually performed despite all the turbulences and difficulties, and the logistical difficulties, and currency difficulties, quite well during Q1, with growth of 4%. Actually, if you look on the like-for-like EBITDA, it actually increased almost 27%. This is still a strong underlying business and, of course, we are now looking at different type of exits. As you all know, there was a plan to IPO the company. Of course, this is not possible today, but we will look for other ways to exit this holding in the future. The Baltic Property Fund II is now fully exited. We receive majority of the cash from it.
We expect some more cash coming during the year once all these technical practicalities are done. Basically, this holding will not change. Would not expect any changes in additional values. We are continuously working on our sustainability efforts. If you look on average, or in total, I mean, we increased our share of green financing. We continuously working to increase that share even more. Other than that, I mean, we score very high in GRESB. We score very high in terms of gender equality, and we continuously working in these areas and leading the way, I think in the whole market. We also started looking at Polish market.
Poland actually is very interesting. The reason why we started looking is that we now have a very strong position in Vilnius. We are very clear about how we will reach our position, strengthen our position to the at least minimum level in Riga. We start looking, okay, so what's really next and how do we grow this business further? One way is to go up northwards towards Tallinn, and the other way is to actually look a little bit south. When we compare this market, we actually found that in Poland we have nine cities that are as large as our capital cities in the Baltics. Those are including regional cities in Poland.
Of course, the Polish market as such is much bigger, compared to the Baltic region. It's actually, in terms of population, bigger than Nordics and Baltics combined. Still, lower transaction volumes, lower GDP compared to the Nordics. If we look in sort of overall market perspective for us from the Baltics, we see a better growth opportunities there. The conditions in Poland are also very similar to what we see in our core market, Vilnius. We recognize the tenants, we recognize the structure, we recognize the businesses that there are. We recognize very much the conditions and so on. From that perspective, it's very alike. What is also important to know that actually rents in Poland are set in euros.
Financing is also very much in euros, despite that we have other underlying currency in the market. There is a significantly lower kind of currency risk, and is probably perceived. At the same time, yields are higher, so there are more opportunities. Market is much more liquid. It is very, very exciting for us to look into this market more deeply, and we hope to come back with some news from there as well. With this, Britt-Marie.
Thank you, Kestutis. We continue with some strong financial highlights, and start with the annual rent. Can we switch? Sorry.
Yeah.
Thanks. We continue with some strong financial highlights and start with the annual rent. The annual rent increased to 185 EUR per sq m. If you compare that in a Swedish context, in Sweden there is around 8,000 SEK for these nice premises. If you take that rent, it's 2,000 SEK. We have extremely nice office premises, and they are at much lower rent than in Sweden. This was mainly due to the rent indexation from January 1, 2.8%. The occupancy rate increased to 91.1%. It increased both in Riga and Vilnius. In Riga, it increased by 2 percentage points to 76%, and in Vilnius with 1 percentage point up to 94%, which is a very, very high level.
The surplus rates here increased to 88%. This was both due to higher rental income and lower property costs. This is also a very high level, but we still can expect it to improve a little bit in the future, up to around 90% perhaps. The property yield in the earning capacity improved to 4.9%, compared to 4.8%, and this is excluding development projects, and it's mainly due to improved NOI. The net LTV properties decreased to 41% due to improved cash position, and this is a very low level. The equity asset ratio decreased due to the negative value investment in MFG. Fifty-five is still a very, very high figure in a Swedish context. We continue with the income statement and the positive development.
We compare the first quarter this year with the first quarter last year. As Kestutis mentioned before, we acquired three properties last year and took possession of them in May, June, and December. They are not included in last year's figures, and they affect this year's figures. The rental income also increased due to the inflation indexation from first of January, and the property expenses increased also due to increased energy costs and maintenance costs during the quarter. The NOI increased by 19%. The central administration was slightly lower than during the first quarter last year since we had some one-off costs during that quarter.
The interest expenses increased due to the new loan related to the acquisition of Uptown Park, but also due to the other acquisitions during the year and the bond issue in July last year. We had negative value change in MFG and positive in derivatives, and that's due to the increased market interest rates. We continue with the improved earning capacity, and as we normally say, this is a very interesting page. It shows the possibility to earn money in the future, different from the income statement which include historic figures. We compare the situation by the end of March with the situation by the end of December. It's not a prognosis. It's a theoretical assessment based on current agreements and certain assumptions. As you see, the rent indexation and higher occupancy meant that the rental income increased by 4%.
Higher energy and maintenance cost means that the property expenses increased by 7%. A new loan increased the interest expenses by 9%, and the profit from property management only by 2%, but that's because we didn't invest the money from the loan yet and the money is in cash. We continue with the financing base which broadened during the quarter. Total interest-bearing liabilities increased by EUR 20 million to EUR 261 million because of a new loan in Luminor, which also meant that current banks increased from three to four. SEB is still the largest one, followed by Swedbank, OP, and then Luminor. Bank loans total EUR 260 million and the bond is EUR 45 million, and the new loan from Luminor matures 2027. Continue with the share development and the ownership.
The long-term NAV decreased by 8% during the quarter to 167 SEK. During the first quarter, the share price decreased a little bit more, 32%, and the share price by the end of the quarter was 107 SEK. We haven't seen any major changes to the top seven on the shareholder list, and the total number of shareholders is also more or less unchanged during the quarter. Kestutis, will you continue, please?
Yeah. Briefly, coming back to why we think that Eastnine story is compelling, and it's actually very much about the very rapidly growing business. As you can see on the historical chart, I mean, we've been gradually growing each year our revenues. We are growing our profit from property management. If you look now on the earning capacity at the end of this quarter, basically representing how it will look 12 months ahead of us, given the current status of the contracts and current status of the properties that we have. We continue delivering on our growth, and of course, this growth is bringing us profitabilities.
As we add more properties, we actually are able to grow profit from property management faster, and that we see very clear trend over time. If we look at our key ratios, they also improve all the time. Profit from property management per share is actually expected to grow even compared to last year. If you look over a longer period of time, of course, we've performed very well. Long-term equity, of course, negatively affected by the value change in MFG. Still, it is not a realized value change. Still, it's very difficult to value this asset. From that perspective, we might see moves in the opposite direction as well in the future. Dividend per share stable at 3 SEK, sorry.
Share price development, of course, we've been heavily hit during the quarter, as most of the real estate companies, but also since we have a holding in Russia as well. If we summarize a little bit, we have a very, very high quality portfolio concentrated in the most vibrant place today in the Baltics in Vilnius. We also have very strong cash position, balance sheet to continue on growing and exploiting the future opportunities. The underlying businesses that we have are actually generating very, very strong cash flows. We are in the region that is actually expanding and growing by itself quite rapidly.
If you look on historical development of the Baltics over the last five years, 15 years or even 30 years, the growth has been surpassing the Nordics very, very significantly. We have this transition taking place, and now it's actually even accelerating. We also work very, very hard on sustainability, driving the sustainability agenda. If you want to invest sustainably, this is actually the place to do. We also continuously have a very exciting journey ahead. Again, we also include now Poland in our market. We've widened during the year our geography in terms of the asset classes, but also in terms of physical geography for the future. Hence we see actually quite exciting opportunities ahead of us.
On this, we are finishing our presentation, and you're very welcome to ask questions.
We are still waiting for a lot of interesting questions. Please. It must have been clear.
Okay. Since no questions are coming in, so we will finish this presentation. Thank you very much.
Thank you very much. No, we have some questions. Are we still online? Okay.
Sorry, we have some questions. Okay.
Yeah. Now they are popping in. This is question. Oh, a lot of questions. Can you comment what you expect to be able to do with MFG in the current environment?
Of course, very difficult to say as environment is changing day by day. There is new regulations and so on. At the moment, there are regulations imposing that in order to transfer your ownership, you have to receive the permissions. In order to convert currency, you have to receive the permissions from the authorities right now. It's a bit more complicated, but we are looking at alternatives. Of course, the equity market is not really functioning from that perspective. The possibilities would be only as private transactions in the future.
The next question, what's the latest status on the planned project in Riga, The Pine? Will this project be postponed given the rise in construction prices? In which segments do you see best acquisition opportunities? That's another question. Perhaps start with those.
Okay. If we start with The Pine, we are at the sort of late stage of discussing with the construction companies. We are experiencing higher construction prices right now, so we're looking actually at what can be changed, what can be adjusted to match a little bit the environment, underlying environment, because we haven't seen that strong growth in rents yet. We are a little bit reviewing the project. From that perspective, the project will be slightly delayed. We still believe that we will start with it within well foreseeable future.
It's very difficult to say exactly when, but we're now looking a little bit back into how we can adjust it.
The next one.
The next question was about.
In which segments do you see the best acquisition opportunities?
We see actually very exciting opportunities in office segment. I think office segment is still very underestimated right now. We see very strong demand for offices all across the region. It comes from two parts. Number one is that we see kind of more nearshoring businesses going in the future. Probably the businesses will be closer to European countries for the sort of outsourcing. At the same time, we see that coming back to offices has been stronger. We see most of our clients actually growing very fast. We see a positive rent development in the market.
Of course, we will be lagging with this because we have longer contracts and so on. Overall, we see a positive dynamics in the market, and especially, Vilnius stands out as very strong, but also a number of Polish regional cities stand out very, very strongly.
There was also a question regarding what's a likely portfolio split in a three- to five-year, both in terms of regions and property types? Little bit difficult to answer perhaps.
Yeah, it's a little bit difficult to answer right now. I think we will see a significant portion of Poland most likely coming into in the near future. Later how the split will look like, it depends a little bit on how and a number of other factors will evolve. We still continue on our leadership in the office segment.
Next question. Maybe you can comment on the WALT and whether you expect it to increase forward in the future?
I think you know a lot's some remain to mature, and what we see probably a slight shift in the trend because during pandemic the more flexibility was discussed and more uncertainties around how long-term commitments we could receive from our tenants. Now with the rising inflation, we see the opposite trend, that we see that people actually would like to lock in contracts for a longer time. There is a shift and less discussion of flexibility and more discussion on sort of regular kind of terms of five years and so on. We'll probably see with renegotiated leases a bit more longer durations than probably in the last quarter or so.
Uh-
We've signed a number of longer leases actually, longer than five years, in just the last quarter.
In a scenario where MFG is developing well, will you still be able to receive any dividends despite the current situation with sanctions, et cetera?
We are looking into this, and it's changing again on a daily basis. Right now there is regulation on how much dividends can be received by foreign entities, especially the entities that belong to the so-called unfriendly countries to Russia, you know, countries that impose sanctions, and of course we are from that domicile as well. This is changing, but we are looking into this and I wouldn't exclude that we will receive something, but those will probably be not as significant as we just did.
Next question. What segment would be the most interesting in the Polish market?
We look in the Polish market at two segments. Again, it's the offices and logistics. Both are actually exciting. If you look on Poland as a country, it's a much bigger country with much bigger infrastructure. Only Amazon alone has 11 distribution centers, et cetera. So we have a completely different volume in that market. Of course for us it will be easier to grow in both. To start with, we still are better experts in the offices, and we will probably do the first acquisition in the office segment.
The next question was, "Have you included the two larger leases in your occupancy rate and earnings capacity?" That's Workland and Ondato, I guess you'd say Ondato. No, we haven't since they haven't moved in yet. They are not included. Are you planning to sell MFG?
We have communicated that, longer term we will seek exit from MFG. Of course, our plans that have been communicated have been disturbed. Nevertheless, we still will seek an exit from that holding.
The next question, "What is the share of floating rate loans in your financing base?" It's. We have 63% with fixed, so 37%.
37, yes.
I guess, that's all the questions.
Okay. Good that we didn't finish before.
Yeah. We still be a little bit impatient perhaps. Need to wait.
Okay.
Thank you very much.
Thank you for your questions, and thank you for today.