Hello, good afternoon, my name is Tarmo Karotam, Fund Manager of Baltic Horizon Fund, and I welcome you to the quarterly webinar of the fund. So, let us begin. The plan of today's webinar is to give you another repeat overview of our key strategic goals with what we believe that the fund will become a long-term dividend payer again. This is the way how we see the fund if, you know, when achieving these goals, then the full recovery of the fund will be happening. As you have probably noticed, our occupancy of the fund has been recovering from the lowest point in September last year.
We have made some very good progress with leasing in many properties. And we do believe, and we do foresee, that we are able to increase the occupancy of our portfolio to 90%, hopefully even higher, before the year end of 2024. Now, I will discuss a bit more later on in the presentation, but many of the large anchor leases that we are signing, the contracts have been signed. However, the tenants are doing their fit- out works and moving in later on this year, and early next year. So, the NOI of the fund will be increasing then gradually as the tenants move in and then start paying.
We believe that loan-to-value of our fund should be below 50%. It remains higher currently in the last quarter because of the valuations. But we have been amortizing our loans and then paying back the bond; we'll continue to do that. So our year-on-year- end goal is still definitely 50% or lower. And hopefully with the new leases that allows us as well to expect solid valuations going forward in 2024. Now as you know, ESG is part of our DNA, and this is something that we have been working on for several years.
And the reports that we have prepared, we continue to prepare them, and as was expected, this is now becoming mandatory for many real estate companies, such as ourselves. It is important to follow those rules in order to secure also financing in the future and also tenant interest. The focus with ESG for us is, has been mainly at first to pick the fruits which are low-hanging fruits first, and then plan the investments into our properties over a long-term period of time.
Currently, a lot of our fit-out investments are going into fit-outs, but we're happy as well to see many of our tenants investing themselves also following the principles set out by the ESG norms. We do have 100% certified portfolio, and we believe as well, again, that allows us to get best financing terms in the future and tenant interest, secure tenant interest as well. In order to go forward with Baltic Horizon, then we have deemed that some of our assets are not fitting into our long-term strategy.
We are, in that sense, planning to consider disposal of one or two assets going forward, this year or next year, in order to streamline our focus. And we definitely believe in our centrally located properties, as it is taking a bit more time to get them fully leased out with the right tenants, but we believe that we are on a right path there as well.
Financial results of the first quarter for the fund, in that sense, were not what we expected and hoped for, because of, first of all, some of the disposals last year, but also increased vacancies and the recovery of the properties is still taking time, but we're confident that, going forward in the quarters, these numbers will improve. And, I think the past quarters, we're going through a period of the lowest income point for the fund. But, still going forward, we do see the rental income, month- on- month basis start to increase, based off the contracts that we have signed.
In regards to the like- for- like rate of comparison without the occupancies or vacancies considered, we are indexing our rents. So, even though the change overall is negative, but that comes from the increased vacancies. So, this is just to assure that we are contractually increasing the rents through indexations as we've done also in the past years. We believe these like- for- like rental changes will be positive over the next quarters as well. In regards to our balance sheet, it has been affected by the valuations, but overall, we have managed to keep quite a good liquidity balance.
The achievement in that sense was the refinancing of Europa, North Star with from Šiaulių Bankas. And we used those proceeds to partially pay back the bonds in April. So, the cash position has decreased somewhat, but we are also in the process currently of refinancing Meraki. We were able to, in the first quarter, increase Meraki's occupancy above 90% and that's where better opportunities, possibilities opened up for better refinancing. And we plan to complete this exercise over the second quarter. And as we have still EUR 8 million of bond outstanding, then we need to pay back that in the beginning of July.
So that is currently in the works, and we expect this to be completed as planned. Now, I think, the most important part for our work, and hope this slide visualizes it better than it has, maybe before. But there is a lot of rental activity in our portfolio. You know, we have about 120,000 square meters of leasable area in our portfolio. So, lots of activity in prolonging lease agreements, as you can see in the renewals column.
First quarter was very successful for us in the office segment side, as we signed several new leases in Meraki, including the anchor lease with Narbutas. And in retail as well, several new leases were signed and prolonged. However, during the economic downturn and still some volatility in among retail tenants, there are tenants who are you know terminating. But many of these tenants we have replaced with tenants that are you know more suitable for our concept. So one example was IKI replacement.
We replaced Maxima with IKI in Europa, and they opened their doors. And as we can see from the turnovers and the tenant is better performing. So lots of activity. And if you look at now the period since September 2023, where our fund had the lowest occupancy point, 77%, we have signed close to, yeah, 40,000 square meters of prolongations and new leases. And overall are net positive by more than 7,000 square meters. That shows the occupancy also grows to 83.5%. And given the challenges in the market, I think we have had very successful several months. So in addition to...
To IKI, we have signed Apollo Group now in the Coca-Cola Plaza building. So, and now the property is again fully let. There has been inquiries that what will be here in the cinema building now going to the future. So we also prolonged the cinema agreement for 10 years. So we will definitely continue to have the cinema in the upper floors. But what we hear from Apollo is that they are considering other supportive concepts and brands. So it's not final yet, but definitely a few restaurants and perhaps a bookstore. So they are making their investments now over the next several quarters, and plan to move in then by beginning of next year.
So I'm very much looking forward to that. Then we have also signed a new lease agreement, anchor lease agreement with MyFitness until 2038, and we have prolonged their also lease agreement in Pirita for considerable number of years. And we're happy that in Galerija Centrs now the top floor, this floor, we have found and completed the final solution there. And we can continue focusing on third and fourth floor vacancies. There are several negotiations ongoing. However, it takes a bit more time to get the final agreements in place.
Now, let's say the main focus of our property and asset management activities still goes, you know, with the focus on Europa and Galerija Centrs, but also S27, an office building which currently is vacant. But we have also some discussions with a new anchor tenant who is interested in taking five out of eight floors. I would say that overall the office market in Riga, you know, it is maybe more active than one would think. And we have had several tenants visit the property.
S27 is located in Skanste area, so I think it's only a matter of time when we find a solution, and then hopefully we're already in the second quarter, end of the second quarter, we can announce a new anchor tenant in the property. So today, our segments still include retail, office, and leisure. Overall, percentage-wise, hasn't changed that much. Around 50% retail, 40% office, and then the remainder being leisure, the cinema property. Our allocation geographically currently is more in Riga, in Latvia, and that's why we have the main focus also on the Latvian properties.
That we are able to soon announce similar results like we have in Postimaja and Coca-Cola Plaza in the centrally located property in Tallinn, where we have achieved 100% occupancy. The tenant mix, there are some new names when it come to the tenant mix, like State Police of Latvia and Narbutas, and MyFitness has also now increased in importance in our portfolio after signing a new anchor in Galerija Centrs. But we continue to have the main players in the public sector, Latvia's State Forests and then State Tax Inspectorate in our properties.
We have modeled something, what we call NOI potential, and this is where maybe a more elaborate way of showing that how EUR 18 million of NOIs is possible with full occupancy. So, we are making good progress in the office properties with the leasing, especially now in Meraki. So North Star as well remains quite close to 92% occupancy. And it's good to see also that even though we have one or two movements of tenants, then the replacement can be found quite fast and at quite good conditions.
There has been a question, I told in the past that, you know, if we are signing these new leases and, at what terms are we actually signing these leases? And you know, are these terms attractive? Then I can assure you, even though we cannot reveal confidential, you know, details about the rental levels, but I can assure you that, on average, they are better than what they were before. And also we have, in many cases, been able to negotiate attractive terms, you know, the rental side, but also minimized our investment commitment. And mainly for the to continue to make sure that structurally our properties are well-maintained and well-managed.
But given the responsibility for tenant fit-outs, mostly for our tenants, so it has definitely positively affected our liquidity and cash management. So however, the biggest, let's say, potential we still see in Europa and in Galerija Centrs, as the NOI is recovering, but recovering slower than we have anticipated. And as well, you know, signing in some one or two cases, we have declined a tenant because of negative, you know, return on investment. So we're not signing leases that don't make sense for us.
So, we'd rather, you know, negotiate a few months more, find, well, an alternative, because the solutions that are put in place today are put in place for several years, in some cases more than 10 years. So, we need to make sure that it makes sense for us and our and the investors on a long-term basis. But we do have several properties that are working very well. Sky and definitely now Vainodes 1 with 100% occupancy and Lincona also remaining highly occupied, at least until the end of next year. So moving forward, another side, of course, is our financing and the prolongation of several loans.
We mentioned that we're able to refinance North Star and Europa with our new partner, prolonged also loan S27 and Galerija Centrs. So, the work continues. Obviously, our main goal is to reduce our bonds and we have been doing that. So, from the end of first quarter, EUR 12.5 million that has now been reduced by another EUR 4.5 million, so EUR 8 million is remaining. And the refinancing of Meraki then should allow us to complete the repayment of the bond, the first bond in full. Another overview of our loan maturities and then hedges.
So we do, we do have some more hedges now, ending this year, but we, we do have many caps still in place, until next year, so allowing us to manage the cost of debt as much as we can. So the loan-to-value is currently above what we feel comfortable with, and that we are continuously amortizing our loans, and hopefully with the repayment of the bond, that will also affect positively our cost of debt. But overall, we would like to have still higher weighted debt maturity than 2.6 years.
Four or five years is something that we target, and, and also cost of debt lower, lower than 5%, 4.5% is our current target. So in that sense, you know, it's quite straightforward what we want to do and what we want to focus on in the coming quarters. So, we are coming from the lower occupancy periods, but we do see tenant interest, so we do see interest from strong tenants, and we have signed several leases, where income will start in the second half of this year and beginning of next year.
So we are going through a few quarters now with that low income for the fund, and we need to manage our cash very prudently in order to do that. We will pay down the remaining EUR 8 million bonds in July. That should be expected as some activity going forward. We have signed approximately two-thirds of all leases that are needed to get to the 90% occupancy, so we still have some work to do and some new leases to sign. Many of them are in negotiations. So we are confident in being able to achieve 90% by year-end. Overall, continue to reduce the leverage of the fund in several ways.
And also we are looking at some of the divestment opportunities with some properties that we believe will not fit our strategy going forward. I think I can mention one or two. One, we have a small supermarket, Sky, in Riga. And also we have commissioned a partner to look for buyers for a property called Lincona in Tallinn.
There are some other discussions also ongoing, but overall, we want to focus our efforts on more and more on our centrally located properties and properties that carry strong either private sector or public sector tenants going forward, and properties that we believe are going to be attractive for tenants over the next decade, which is ahead of us. Well, I just want to say, and maybe there's some questions as well, I'm happy to take questions, but it's been quite a challenging period for us, for sure. We have been dealing with many external influences to the fund, and as you know, the period many black swans have swum in this past several years.
And on top of everything, we have also seen last year the change of many of our anchor tenants, so it has been somewhat of a perfect storm for us. But having these latest leasing positive results, and having seen, you know, that we can turn our properties around and set them ready for the new cycle, with fully leased occupant, fully leased status, then we're confident that these few properties that still need to be filled out with new tenants, we can do that in the upcoming quarters. Hope to give you some more positive news soon. Okay, I have received one question.
In Lincona, we have our anchor tenant expanding, but it has been, let's say, a bit time-consuming to do the public tender. As I said, they are a public tenant, and as these procurement requirements are much more, let's say, complex than in a normal case. But I can say that by the end of May, we will have a contractor signed ready to do the works and have the tenant to then expand into additional premises, latest by early third quarter.
So the tenant is very eager to expand, and we are also very eager to have a solution there, but it just has taken a bit more time because of the procurement requirements. Are there any more questions? So if not, then thank you for attending... Uh-huh, there is a question about cost of debt going forward. One more question after we pay down the remaining tranche. So the cost of the new loan is of course smaller than the cost of the bond. Mm. So the effect will be visible, but it will not be very large.
I think more important is how Euribor will now be over the next quarters. That is definitely affecting our cost of debt the most. There will be some improvement, but not a lot immediate improvement. But yeah, we're continuously also analyzing whether, you know, any caps or more or hedges will be needed for the future periods as well, but today, the cost of such instruments is too high. So, we're monitoring it very closely. Yes, there is a question on whether when we sell a property, then will that reduce our eventual total turnover or rental target of EUR 18 million. So the answer is yes.
But the question is, yeah, that it should, it shouldn't influence that too much because the properties that we might sell are actually quite small properties. So, but we will see. We're not selling at any price, of course, and we continue to work with all of our properties to maximize income and prolong agreements. So, that's why we have given ourselves 18 months to dispose some of these assets, because many of the leases need to be also prolonged over the coming periods. And that activity is ahead as well.
As to the dividend question, so, internally, you know, we would like to be ready to pay a dividend in 2025. This is not, of course, guaranteed, and this is something that I cannot promise today, today, but we see a path going forward that, with our occupancy increasing, hopefully cost of debt decreasing, also, relatively quickly. And with that, be ready to pay a dividend next year. So that's hope that we can deliver on that thought. There's a question on Meraki, so, and how what how it has actually happened at the Meraki. Now, occupancy has jumped from the end of last year to 90%.
So I can actually comment on that. Meraki, we started the construction of Meraki end of 2019. So right into the COVID years, as well, you know, we had the Ukraine war, energy crisis. So it has delayed, let's say, the occupancy or work, letting work of the fund. But our original sort of thesis that we build a, you know, top-notch quality office building in that area in Vilnius has actually delivered. So many of the tenants that we have found are actually coming from the same area. It's just that it took them time and took us time to find them as many of the leases were also ending over time.
So, in that sense, our property is the newest and of the best quality in that area. So, tenants are moving up the quality curve and we were -- we have been ready to offer them this solution. Not to forget, we actually have two towers there. One tower is built and fully occupied. We do have actually some discussions already, some early discussions with the potential anchor for the second tower. So going forward, you know, we hope to extract more value out of out of Meraki investment. So what has changed?
I think definitely our you know focus has remained to let out Meraki from the beginning, but not all tenants have been ready during these turbulent times to move to expand. But tenants need to offer also quality premises for their workers, and that it has been behind the trading success of Meraki. So let's see if we have more questions. So it's a question on the call premium of this remaining EUR 8 million. So basically the call premium decreases 0.5% every month. So if we pay back as we agreed on the eighth of July, then we pay it back in full. Okay.
Well, thank you for the questions, and hopefully this was informative. Happy to share or answer any questions if you still have over email. We continue the work and manage our liquidity and increase the occupancy of all our properties in the coming periods. There's still quite a bit of work ahead, and hope to give you good news now also next time. There has been one more question. We had disposal losses on disposal investment. We were in the process of selling the property, and this process we terminated because we saw that we had better solutions to manage our bond refinancing.
So, that process entailed some expenses for us, and that is was recorded during the first quarter, under the disposal of investment properties. But those charges should not be recurring in the future.