What potential risks or downside scenarios could cause the share price to fall below the €22.86 fair value?

Key downside risks that could push EFT1T below the €22.86 fair‑value

1. Macroeconomic & financing headwinds – The fund’s assets are heavily exposed to the Nordic and Baltic office‑ and retail‑property cycles. A rise in European interest rates (or a flattening of the yield curve) would increase the cost of debt for new acquisitions and refinancings, tightening the fund’s leverage capacity. If borrowing costs stay high, the portfolio’s cap‑rate compression could reverse, leading to lower asset‑price re‑ratings and a drag on NAV. A slowdown in regional GDP or a rise in unemployment would also depress occupancy and rental growth, eroding cash‑flow yields that underpin the €22.86 valuation.

2. Fund‑specific operational and valuation pressures –

   • Asset‑quality concentration: A significant share of the portfolio is still in legacy office assets that are vulnerable to the “work‑from‑home” trend. Persistent vacancy or tenant downgrades would directly cut distributable cash flow.
     
   • Liquidity & redemption risk: As a listed REIT, EFT1T must meet quarterly redemption requests. A surge in redemptions could force asset sales at distressed prices, crystallising a discount to NAV.
     
   • Regulatory or tax changes: Any tightening of real‑estate investment‑trust (REIT) rules in Estonia or the EU—e.g., higher dividend‑payout caps or stricter leverage limits—could compress earnings and force a re‑valuation.

3. Technical and market‑sentiment triggers – On the Tallinn exchange the stock is trading near a key resistance level around €23.5. A break below the recent swing low (~€21.8) would open a technical down‑trend, inviting short‑covering and margin‑call selling. Moreover, a broader equity pull‑back in the “Nordic property” sector—driven by a risk‑off move in global equity markets—could depress the fund’s relative valuation irrespective of its fundamentals.

Trading implications

- Watch the 21.8 € support: A breach could signal the start of a downside swing, making a short‑position or a protective put spread attractive.

- Monitor macro data: Euro‑zone inflation, ECB rate‑decisions, and Baltic GDP releases are early warning signals for financing stress.

- Stay alert to NAV updates: Any downward revision of the fund’s NAV per share (e.g., due to higher cap‑rates or lower occupancy) would quickly translate into price pressure.

In short, the fair‑value assumption hinges on stable financing conditions, resilient occupancy, and a supportive macro environment. Deterioration in any of these pillars—combined with a technical breach of key support—creates a plausible scenario for the share to slip below €22.86.