Twino’s property business reports profit
Twino’s property business has reported a net profit of €67,973 (£57,836) for 2023, after just a few months of operations.
The European peer-to-peer lending platform launched a real estate securities business in August last year, which allows investors to fund short-term rental properties in Riga, Latvia.
By the end of the year, €655,444 had been raised in funding to acquire three apartments. The total value of the properties was €702,147.
“The initial performance of the rentals product has met our expectations, reflecting the stability and potential of the short-term rental market in Latvia,” said Helvijs Henšelis, chief executive of Twino.
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“Despite a late start in rental season last year, the demand for our properties has been strong. With our ongoing acquisitions, we are not only expanding our portfolio but also improving our cost efficiency, thus, expecting improved performance going further.”
Henšelis added that the short-term rentals market in Latvia continues to grow, with a growth rate of 21.6 per cent in 2023 compared to 2022.
Twino’s rental income began accruing in September from platforms such as Airbnb and Booking.com, generating €7,224 during the reporting period.
Twino noted that while the company turned a profit of €67,973, €73,254 of this profit came from the revaluation of the investment properties.
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Excluding the revaluation of acquired properties, the company’s financial result is a loss of €5,410. This is due partly to lower occupancy and rental rates during the winter season, and the costs of maintaining the properties.
“Despite this, the company’s management reports that overall operations are progressing successfully,” added Henšelis.
“Although the rental income has not been sufficient to cover all costs, this aligns with the company’s initial 10-year business plan. The costs of acquiring the properties typically do not allow to generate high returns in the first years of the operations.
“Looking ahead, positive financial results are expected as the acquired properties will generate income for a full calendar year, particularly maximizing rental income during the high (summer) season. Additionally, the company continues to acquire new properties, which reduces administrative costs per property.”
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