Financial results for 2018 Q4

BALTIC HORIZON

FUND

Q4 WEBINAR

MAIN EVENTS 2018

� Apr 2018 – S&P mid-market rating of MM3 (corresponding to BB+/BB on a global scale)

� Apr 2018 – 30mln EUR unsecured bond maturing in 5y placed at 4,25% fixed coupon;

→ subscribed by 8 Baltic institutional investors (59% - LMV, 19% - INVL, 17% - SEB);

� May 2018 – c.a. 17mln EUR of bank loans repaid from bond proceeds; better margins and

non-amortizing structures obtained as a result;

� May 2018 – Q1 2018 financial results published;

� May 2018 – 0,024 EUR dividend declared for Q1 2018 (0,023 EUR previous quarter);

� June 2018 – AGM for buyback approval (up to 5mln EUR in 12 months);

� May 2018 – 0,87ha land plot adjacent to Domus Pro SC acquired for 1,7mln EUR for

development;

� August 2018 - 0,025 EUR dividend declared for Q2 2018

� August 2018 - Q1/M1 2018 financial results published;

� August 2018 – LNK acquisition in Riga completed

� October 2018 - 0,026 EUR dividend declared for Q3 2018

� December 2018 – Duetto II Office building signed (Vilnius heating, Sweco, Astra Zeneca,

Coca-Cola, Rimi)

Sustainable growth of

portfolio is expected

Sustainable dividend

story (Q4 12 m

rolling is 7,8%)

GNCF Q4 12m rolling

yield increased to

8,4%

BuybacH program on

hold

RECENT DEVELOPMENTS - 2018

2019Jan Feb Mar Apr May Jun Jul Aug

13 February:

Postimaja Shopping

Centre in Tallinn

acquisition for EUR

34.4m at 5.4%

completed

25 April:

Baltic Morizon EUR

30m EUR unsecured

bond issue assigned

'MM3' Mid-Market

Rating by S&P

Global

24 May:

Dividend of

EUR 0.024

per unit for

Q1 2018 paid

out

27 April:

30mln EUR

unsecured bond

maturing in 5y

placed

successfully at

4.25% fixed

coupon

19 February:

Dividend of

EUR 0.023 per

unit for Q4

2017 paid out

Sep Oct Nov Dec2018

12

November:

Private

placement

of new units

with the EUR

20m target

announced

16 May:

0,87ha land plot

adjacent to

Domus Pro SC

acquired for

1.7m EUR for

development

15 August:

LNK Centre

office building in

Riga acquisition

for EUR 17m at

6.5% yield

completed

5 September:

Dividend of

EUR 0.025

per unit for

Q2 2018 paid

out

22

November:

Dividend of

EUR 0.026

per unit for

Q3 2018 paid

out

Februarb

week 7:

Dividend of

EUR 0.027

per unit for

Q4 2018 to

be paid out

18 December:

Signed agreement to

acquire Duetto II

office building in

Vilnius for EUR

18.3m at 7.1% yield

3

PREPARING FOR NEW MARKET

OPPORTUNITIES

� Diversified cash flow Baltic listed REIT with key focus on high dividends and

long term value creation through active asset management

� Flexible market adjusted strategy following the main RE market trends

� Main focus on capital cities and retail / office segments

� Stabilized growth of fund by first and foremost focusing on value added

expansion opportunities within BM portfolio

� Further equity buffering through private placement for targeted acquisitions

Difficulties in getting

banH financing has

created marHet

opportunities

Investment yields at

a stand still

Growth by off-marHet

(in-Hind)

opportunities

New portfolio

manager and analyst

have joined the

management team

Property Europa SCUpmalas

BirojiDomus Pro G4S HQ Lincona Duetto I Duetto 1I

Coca-Cola Plaza

PiiritaSky

Supermarket

VainodesPostimaja

SCLNK

CentreTotal

CityVilnius CBD

Riga Vilnius Tallinn Tallinn Vilnius VilniusTallinn CBD1

Tallinn Riga Riga TallinnRiga

CBD1

Type Retail Office Retail/Office Office Office Office Office Cinema Retail Retail Office Retail Office

Rentablearea sq.m.

16,856 10,458 16,0782 9,179 10,870 8,498 8,509 8,664 5,427 3,254 8,052 9,141 7,453 122,439

Vacancy 4.4% 0% 1.6% 0% 1.5% 1,3% (0%3) 0%3 0% 6.2% (0%3) 0.7% 0% 4% 0% 1.5%

Rent,EUR/sq.m./month

14.5 12.7 9.5 10.59 10.22 11.5 12.3 9.7 12.5 11.0 13.2 16.8 12.0 12

NOI, EURm 2.4 1.7 1.7 1.2 1.2 1.1 1.3 1.0 0.9 0.4 1.5 1.5 1.1 17

Fair value, EURm

41.1 25.7 26.595 17.2 17.2 16.3 18.3 14.5 10.0 5.4 21.2 32.5 17.5 263.56

No. ofleases

72 9 37 1 13 7 6 1 18 18 3 14 4 203

WAULT4 3.9 3.0 3.9 3.9 4.7 3.3 5.2 4.2 6.4 3.7 14.9 6.4 6.6 5.14

Major tenants

STRONG PORTFOLIO WITH A TOTAL

VALUE OF EUR 260+ MILLION

5

Details of existing propertyportfolio

Source: Northern Morizon Capital

1 Central Business District 2 Retail: 11,247 sqm, MV: €17.46m; Office: 4,759 sqm, MV: €7.46m. 3 Pirita, Duetto I and Duetto II effective occupancy rate is 100% due to a rental guarantee. 4 Weighted average unexpired lease term weighted by lettable area. (WAULT

for the property portfolio weighted by income is 5.24 years.). 5 Includes land plot next to Domus Pro (Meraki). 6 Value including Duetto II, transaction expected to close by the beginning of March 2019

37%

29%

34%

Geographical allocation

Estonia

Latvia

Lithuania

43%

51%

6%

Segment allocation

Retail

Office

Leisure

BALTIC HORIZON’S 12 PROPERTY

PORTFOLIO BREAKDOWN

Geographical and

Segmental

diversification

5 properties with

expansion potential

5

RENTAL CONCENTRATION – 10

LARGEST

Largest tenant

accounts for only

7.8% of the portfolio

6

8%

7%

7%

6%

6%

4%

3%

2%2%2%

53%

Rimi

Latvian State Forestry

G4S Eesti

Forum Cinemas

SEB

Intrum Global Business Services

Exigen Services Latvia

M&M

New Yorker

Swedbank

Others

0%

5%

10%

15%

20%

25%

30%

35%

2021

Q1

2021

Q2

2021

Q3

2021

Q4

2022

Q1

2022

Q2

2022

Q3

2022

Q4

2023

Q1

2023

Q2

2023

Q3

2023

Q4

2024

Q1

2024

Q2

2024

Q3

2024

Q4

2025

Q1

Loan and hedge maturity

Loans Medges

Cocal cola Plaza

and Postimaja

Lincona Pirita

G4S

Europa

Upmalas Biroji Domus Pro Vainodes

SKY

Duetto

LNK

Bonds

0

5 000 000

10 000 000

15 000 000

20 000 000

25 000 000

30 000 000

35 000 000

40 000 000

45 000 000

2021.03 2021.09 2022.03 2022.09 2023.03 2023.09 2024.03 2024.09 2025.03

Maturity by separate loan

FINANCING SUMMARY

AS OF 31 DECEMBER 2018

57.3%

LTV

2.4%

Cost of debt

0.1%

Annual debt amortization

4.0 years

Weighted debt maturity

46%

18%

8%

28%

Diversification by creditor

SEB

Swedbank

Luminor

Bonds

57

,33

55

,83

51

,83

45

,83

39

,00

37

,00

36

,00

34

,17

33

,00

31

,00

27

,60

26

,50

25

,83

23

,50

22

,50

22

,00

21

,00

20

,83

20

,50

17

,50

16

,00

16

,00

15

,50

11

,37

-

10,00

20,00

30,00

40,00

50,00

60,00

Ge

ne

ve

Du

bli

n

Sto

ckh

olm

Mil

an

Osl

o

Mu

nic

h

Me

lsin

ki

Am

ste

rda

m

Be

rlin

Ma

dri

d

Mo

sco

w

Vie

nn

a

Bru

sse

ls

Kie

v

Co

pe

nh

ag

en

Wa

rsa

w

Pra

gu

e

Ath

en

s

Lisb

on

Ta

llin

n

Viln

ius

Bra

tisl

ava

Rig

a

Ba

ltic

Mo

rizo

n

OFFICES. TME BALTIC MARKET MAINTAIN LOW VACANCIES AND RENT

PRICES WMILE YIELDS EXCEED TMOSE IN OTMER EUROPEAN CAPITALS

� Baltic office market is fundamentally sound. Despite rapid economic growth and robust FDI, rental rates and vacancy remain relatively low while yields are above European and even CEE averages.

� Large gap in office stock per capita ratios between Baltics and the rest of Europe shows that office development in the region still has significant growth potential.

� Performance efficiency – lower than Baltic average rentrates transformed into higher thanBaltic average yields.

30.3

Source: Colliers International, SEB

Prime Office Yields, %

Prime Office Rent Rates €/sq. m./month Office Vacancy, %

12

,00

%

9,5

0%

8,0

0%

6,7

5%

6,5

0%

6,5

0%

6,2

5%

5,1

5%

4,8

5%

4,7

5%

4,6

0%

4,0

0%

4,0

0%

3,9

0%

3,7

5%

3,7

0%

3,7

0%

3,5

0%

3,4

0%

3,2

5%

3,0

5%

3,0

5%

3,0

0%

2,9

0%

2,5

0%

7,3

0%

0,00%

2,00%

4,00%

6,00%

8,00%

10,00%

12,00%

Kie

v

Mo

sco

w

Ath

en

s

Rig

a

Ta

llin

n

Viln

ius

Bra

tisl

ava

Wa

rsa

w

Pra

gu

e

Lisb

on

Bru

sse

ls

Du

bli

n

Co

pe

nh

ag

en

Vie

nn

a

Osl

o

Me

lsin

ki

Am

ste

rda

m

Mil

an

Sto

ckh

olm

Ma

dri

d

Lon

do

n

Pa

ris

Mu

nic

h

Be

rlin

Ge

ne

ve

Ba

ltic

Mo

rizo

n

14

,00

%

12

,00

%

11

,70

%

10

,30

%

10

,20

%

9,2

0%

8,6

0%

8,5

0%

8,5

0%

8,3

0%

8,1

0%

7,5

0%

7,4

0%

7,0

0%

6,6

0%

6,5

0%

6,2

0%

6,2

0%

6,0

0%

5,7

0%

5,5

0%

5,2

0%

3,4

0%

3,3

0%

2,0

0%

2,4

0%

0,00%

2,00%

4,00%

6,00%

8,00%

10,00%

12,00%

14,00%

Me

lsin

ki

Wa

rsa

w

Mil

an

Am

ste

rda

m

Ma

dri

d

Mo

sco

w

Lisb

on

Ath

en

s

Ta

llin

n

Bru

sse

ls

Du

bli

n

Pra

gu

e

Osl

o

Kie

v

Rig

a

Pa

ris

Bra

tisl

ava

Lon

do

n

Sto

ckh

olm

Co

pe

nh

ag

en

Ge

ne

ve

Vie

nn

a

Viln

ius

Mu

nic

h

Be

rlin

Ba

ltic

Mo

rizo

n

7.5%

Average

4.9%

9

RETAIL. TME BALTIC MARKET MAS LOW VACANCIES AND MIGM YIELDS

COMPARED TO OTMER EUROPEAN COUNTRIES

� Baltic population likes shopping centers with some entertainment inside. Impressive disposable income growth of more than 50% over the last decade in Baltics has predominantly benefited large shopping centers which remain a preferred pastime activity in the Baltics.

� Segment is experiencing some changes. Some new supply beingintroduced to market, but no major impact expected. The impact of e-trade on performance of shopping centers is slowly being monitoredand ease of access and adapting retail/entertainment offering at the major retail schemes is now a must. Center city shopping centers alsoenjoy growing number of tourists.

Average

Retail Yields, %

Disposable income growth, 2009-2017Retail Trade Volume Growth, 2010-2017

80,0

90,0

100,0

110,0

120,0

130,0

140,0

150,0

160,0

2010 2011 2012 2013 2014 2015 2016 2017

European Union Estonia Latvia Lithuania

9,5

0%

8,5

0%

8,0

0%

7,0

0%

6,5

0%

6,5

0%

6,4

0%

6,0

0%

6,0

0%

5,3

0%

5,0

0%

5,0

0%

5,0

0%

5,0

0%

4,8

0%

4,7

0%

4,5

0%

4,3

0%

4,1

0%

4,0

0%

4,0

0%

3,0

0%

6,1

7%

0,00%

1,00%

2,00%

3,00%

4,00%

5,00%

6,00%

7,00%

8,00%

9,00%

10,00%

Mo

sco

w

Be

lgra

de

Ath

en

s

Bu

cha

rest

Rig

a

Vil

niu

s

Ta

llin

n

Bu

da

pe

st

Bra

tisl

ava

Wa

rsa

w

Mila

n

Pra

gu

e

Vie

nn

a

Ma

dri

d

Du

bli

n

Mu

nic

h

Sto

ckh

olm

Co

pe

nh

ag

en

Be

rlin

Osl

o

Lon

do

n

Pa

ris

Ba

ltic

Mo

rizo

n

5.6%

-

20

40

60

80

100

120

140

160

2009 2010 2011 2012 2013 2014 2015 2016 2017

European Union Lithuania Latvia Estonia

Source: Eurostat, Colliers International

10

FINANCIAL RESULTS FOR Q4 2018

FINANCIAL PERFORMANCE

• In Q4 2018, NOI

amounted to EUR 3.9

million and was

higher than in Q4

2017 (EUR 2.9

million).

*The number of units excludes 255,969 units acquired by the Fund as part of the unit buy-back program

9

Euro ‘000 2018 Q4 2017 Q4 Change (%)

Net rental income 3,929 2,922 34.5%

Valuation gains / (loss) on investment

properties1,534 3,337 (54.0%)

Operating profit 4,685 5,357 (12.5%)

Net financing costs (806) (403) 100%

Profit before tax 3,879 4,954 (21.7%)

Net profit for the period 3,535 5,277 (33.0%)

Weighted average number of units

outstanding78,637,645* 69,011,121 13.9%

Earnings per unit (EUR) 0.04 0.08 (50%)

FINANCIAL RESULTS FOR Q4 2018

ASSETS AS OF 31/12/2018

• Total investment

value increased

from EUR 189

million to EUR 245

million after

Postimaja SC, LNK

BC acquisitions and

revaluations in

December

10

Euro ‘000 31.12.2018 31.12.2017

Non-current assets

Investment properties 245,160 189,317

Derivative financial instruments 9 89

Other non-current assets 596 146

Total non-current assets 245,765 189,552

Current assets

Trade and other receivables 2,734 1,568

Prepayments 154 108

Cash and cash equivalents 12,225 24,557

Total current assets 15,113 26,233

Total assets 260,878 215,785

FINANCIAL RESULTS FOR Q4 2018

EQUITY & LIABILITIES AS OF 31/12/2018

• In Q4 2018, the Fund

NAV to EUR 109,8

million. The increase

is related to an

increase in property

valuation and the

fund also made a EUR

2.04 million cash

distribution to its

unitholders (EUR

0.026 per unit).

11

Euro ‘000 31.12.2018 31.12.2017

Equity

Paid in capital 93,673 91,848

Own units (335) -

Cash flow hedge reserve (1,005) (56)

Retained earnings 17,472 15,184

Total equity 109,805 106,976

Non-current liabilities

Interest bearing loans and borrowings 140,401 96,497

Deferred tax liabilities 5,844 5,206

Derivative financial instruments 1,069 88

Other non-current liabilities 905 859

Total non-current liabilities 148,219 102,650

Current liabilities

Interest bearing loans and borrowings 106 1,590

Trade and other payables 2,397 4,202

Income tax payable - 14

Derivative financial instruments - 15

Other current liabilities 351 338

Total current liabilities 2,854 6,159

Total liabilities 151,073 108,809

Total equity and liabilities 260,878 215,785

FINANCIAL RESULTS FOR Q4 2018

SUMMARY

• IFRS NAV per unit

EUR 1.3988 (EUR

1.3862 as at

30/09/2018).

• EPRA NAV per unit

EUR 1.5101 (EUR

1.4853 as at

30/09/2018).

13

Euro ‘000 31.12.2018 31.12.2017 Change (%)

Investment property in use 245,160 189,317 29.5%

Gross asset value (GAV) 260,878 215,785 20.9%

Interest bearing loans 140,507 98,087 43.2%

Total liabilities 151,073 108,809 38.8%

Net asset value (NAV) 109,805 106,976 2.6%

Euro ‘000 30.09.2018 31.12.2018

IFRS NAV 109,345 109,805

Exclude deferred tax liability on investment properties 7,343 7,731

Exclude fair value of financial instruments 473 1,061

Exclude deferred tax on fair value of financial instruments (1) (56)

EPRA NAV* 117,160 118,541

Amount of units 78,878,6921 79.157.0942

EPRA NAV per unit 1.4853 1.5101

1. The number of units excludes 278,402 units acquired by the Fund as part of the unit buy-back program, but not cancelled as of

30/09/2018

2. The number of units excludes 255,969 units acquired by the Fund as part of the unit buy-back program, but not cancelled as of

31/12/2018

FINANCIAL DEBT STRUCTURE OF THE

FUND AS OF 31/12/2018

1. CC Plaza and Postimaja loan has an interest rate cap at 3.5% for the variable interest rate part.

2. Duetto loan has an interest rate cap at 1% for the variable interest rate part.

3. Amortised each month over the term of a loan/bond.

14

Property Maturity Currency

Carrying

amount

Euro’1000

% of

total

Fixed rate

portion

Lincona 31 Dec 2022 EUR 7,188 5.1% 95%

CC Plaza and Postimaja 12 Feb 2023 EUR 17,200 12.2% 100%1

Sky SC 1 Aug 2021 EUR 2,386 1.7% -%

Europa SC 5 Jul 2022 EUR 20,900 14.8% 88%

G4S Meadquarters 16 Aug 2021 EUR 7,750 5.5% 100%

Upmalas Biroji BC 31 Aug 2023 EUR 11,750 8.3% 90%

Pirita SC 20 Feb 2022 EUR 4,944 3.5% 124%

Duetto I 20 Mar 2022 EUR 7,300 5.2% 99%2

Domus Pro 31 May 2022 EUR 11,000 7.8% 66%

Vainodes I 13 Nov 2024 EUR 9,842 7.0% 50%

LNK 27 Sep 2023 EUR 700 0.5% -%

Total bank loans EUR 100,960 71.6% 86%

Less capitalized loan arrangement fees3 (208)

Total bank loans recognized in the

statement of financial positionEUR 100,752

5 year-unsecured bonds EUR 40,000 28.4% 100%

Less capitalized bond arrangement fees3 (245)

Total debt recognised in the statement of

financial positionEUR 140,507 100% 90%

BH UNITS SECONDARY TRADING

Over 4,500 investors

Improving liquidity in the

secondary marHet

OTC transactions

excluded

MarHet cap of approx.

104mln EUR turns around

in c.a. 6.4 years (based on

last 12 months trading

volume).

-

200

400

600

800

1 000

1 200

1 400

1 600

20

16

Ju

l

20

16

Au

g

20

16

Se

p

20

16

Oct

20

16

No

v

20

16

De

c

20

17

Ja

n

20

17

Fe

b

20

17

Ma

r

20

17

Ap

r

20

17

Ma

y

20

17

Ju

n

20

17

Ju

l

20

17

Au

g

20

17

Se

p

20

17

Oct

20

17

No

v

20

17

De

c

20

18

Ja

n

20

18

Fe

b

20

18

Ma

r

20

18

Ap

r

20

18

Ma

y

20

18

Ju

n

20

18

Ju

l

20

18

Au

g

20

18

Se

pt

20

18

Oct

20

18

No

v

20

18

De

c

20

19

Ja

n

20

19

Fe

b

Vo

lum

e,

tho

usa

nd

BH units secondary trading per month

Tallinn Stockholm

This material is provided to you for information purposes only. Before investing in any product managed by Northern Morizon Capital (NMC) or associated

companies, you should inform yourself about legal and tax consequences, foreign exchange restrictions or exchange control requirements that you may

encounter under the laws of your country. NMC has taking all reasonable care to ensure that the information contained in this document is reliable but no

guarantees, warranties or representations are made as to the accuracy or completeness of the information contained in this information document. Past

performance is no guide to future performance. Investors in funds or other products of NMC should be aware that such investments carry risk, that the value

of such investments can vary over time, and that you as investor may not get back the full amount invested. NMC urges all investors to seek professional

advice on the above-mentioned issues as well as other relevant issues before investing in our products.

DISCLAIMER

17