EUROPE The Bridge to future expansion – Kestutis Sasnauskas of Eastnine

At the end of 2024, Eastnine entered the Warsaw office market with the sensational EUR 280 mln acquisition of the Warsaw Unit – the biggest single-asset real estate transaction of the year in Europe (never mind Poland!). And now you have announced a similar agreement to acquire The Bridge in the same city. Why do you have such confidence in the Warsaw office market, in these days of shrinking supply and demand for office space in general?

We are strong believers in high-quality, modern, and well-located office properties. Warsaw is particularly attractive because of its strong economic growth, which we believe will continue to support structural demand for office space. The fundamentals are also particularly compelling when compared to a city like Stockholm. Warsaw’s total office stock is around half that of Stockholm, despite being a larger city. At the same time, Stockholm has some of the highest office rents in Europe, whereas Warsaw's rents remain comparatively low. Prime office yields in Stockholm are in the 3.5–4.0 pct range, compared with around 6 pct in Warsaw. This combination of relatively low and rising rental levels and attractive yields creates an appealing entry point for investors.

A good proportion of the finance for the deals for both The Bridge and Unit is being provided by the likes of Erste Group. I take it that lenders are keen to finance Eastnine’s acquisitions because those you have made have been performing well, and that this is being reflected in your company's results?

We enjoy very strong and constructive relationships with our financing partners, including Erste Group and other leading banks. More broadly, Eastnine has a well-performing portfolio characterized by high occupancy levels, stable tenant demand, and strong cash flow generation. Our properties continue to deliver solid operational results, which naturally contributes to the confidence shown by lenders in supporting our growth ambitions.

Warsaw is now Eastnine’s biggest market and you also own Nowy Rynek D and E in Poznań. What are your plans for these assets in the long-term?

Eastnine is not a fund with a predefined investment horizon. We invest with a long-term ownership perspective and focus on creating sustainable value over time. Our ambition is therefore to continue owning and developing these assets while strengthening our market position. A key priority is to provide the highest possible level of service to our tenants and ensure that our properties remain attractive for both existing and future customers.

You have also recently divested your Latvian properties and closed your office there. Is it your strategy now to focus firmly on Warsaw and Poznań? Or are you also open to opportunities elsewhere? And are you planning any major new additions to your portfolio in the near future?

Our primary focus is to continue growing our presence in Warsaw, which is our largest and most strategic market. At the same time, we see attractive opportunities to further strengthen our positions in Poznań and Vilnius. For the foreseeable future, we do not plan to enter any new markets.