€100 million allocated to mortgage-to-rent scheme to meet demand

State-owned asset management company Kedipes has repaid €1.47 billion in state aid since the start of its operations in September 2018, according to an announcement released on Thursday.

This includes €310 million repaid in 2024, with €40 million disbursed in the third quarter and an additional €70 million in the fourth quarter.

The repayment reflects the organisation’s ongoing efforts to meet its obligations while managing its extensive portfolio.

In addition, Kedipes increased its reserve for the mortgage-to-rent scheme by €20 million, raising it from €80 million to €100 million, to support future property purchases amid rising applications under the scheme.

Cash inflows for the third quarter of 2024 amounted to €90.4 million, representing a 19.1 per cent decrease from €111.7 million in the second quarter, primarily due to a slowdown in loan repayments and reduced property sales.

This also marks a 3.6 per cent decline from €93.7 million in the third quarter of 2023, reflecting overall market challenges.

Total cash inflows for the nine months ending September 30, 2024, reached €346 million, including €46.3 million generated from the sale of a loan portfolio.

Excluding these proceeds, inflows were on par with the corresponding period in 2023 at €311.2 million.

Since its inception, Kedipes has recorded cumulative cash inflows of €2.45 billion as of September 30, 2024.

Deleveraging, excluding contractual interest on loans, stood at 43.8 per cent, with receipts from loan and property management totalling €2.32 billion, equating to 28.8 per cent of the nominal value of its initial portfolio of €8.05 billion.

Operating expenses in Q3 2024 were €24.1 million, a 12.4 per cent reduction from €27.5 million in the previous quarter and 9 per cent lower than the €26.5 million recorded in Q3 2023.

Net cash flow after expenses in Q3 2024 was €61.3 million, down 22.9 per cent from Q2 2024 and 8.9 per cent lower than Q3 2023.

For the nine months of 2024, net cash flow after expenses amounted to €249.8 million, an 8 per cent increase compared to €231.9 million in the same period in 2023.

Since operations began, net cash flow after expenses has reached €1.49 billion.

The mortgage-to-rent scheme has continued to expand, with 2,417 applications deemed eligible under the initial criteria.

Of these, 1,674 are undergoing technical review, while 386 are in the appraisal stage. To date, 98 approval letters have been issued, and 16 rental contracts signed.

Fifteen of these contracts are awaiting land registry processing for property transfers.

To accommodate the growing number of applications, Kedipes has further increased the scheme’s cash reserve by €20 million, bringing the total to €100 million.

This increase is expected to enable more property purchases under the scheme, ensuring a steady pipeline of support for eligible applicants and addressing the growing demand effectively.

Furthermore, Kedipes is making strides in managing its assets, including the sale of two high-value office buildings, which are being marketed directly for the first time.

Additionally, preparations for the Ledra 2 Project, involving the sale of part of the loan portfolio, have officially commenced.

This initiative stands out as it includes loans under the Estia project and marks a significant step towards streamlining the company’s portfolio, with developments anticipated in early 2025.

The project includes loans under the Estia project and is expected to see developments in early 2025. Borrowers’ rights under the Estia framework will remain unaffected.

The nominal value of loans decreased to €5.7 billion at the end of Q3 2024 from €5.75 billion at the end of Q2 2024 and €6 billion at the end of Q3 2023.

Total assets, valued at €6.3 billion at the end of Q3 2024, include €174 million in cash, €392 million in real estate, and €665 million in performing loans.

Asset deleveraging, excluding contractual interest, reached 43.8 per cent by the end of Q3 2024.

Under the Asset Protection Scheme (APS) with Hellenic Bank, the contractual value of covered assets fell by 54 per cent to €1.2 billion by September 30, 2024, from €2.6 billion at the scheme’s inception.

The reference value of assets covered by the plan dropped by 59 per cent to €920 million from an initial €2.27 billion.

Hellenic Bank has submitted claims totalling €102.8 million under the scheme since its inception, with payments amounting to €103.7 million, including €4.8 million in Q3 2024.

These claims highlight the ongoing adjustments within the scheme, ensuring financial coverage for assets while reducing the exposure of the Cyprus government as guarantor, thereby maintaining the scheme’s financial stability.

Payments made by the bank to Cyprus as the plan’s guarantor have reached €45.1 million, including a €1 million payment in October 2024.