CEO review

August 19, 2021

CEO Jani Nieminen

CEO’s review

The first half of the year went as expected and our total reve-nue increased, supported by our strong housing stock. The fair value of our investment properties reached EUR 7.5 billion. The increase in fair value during the review period was particularly attributable to yield compression. In addition, 441 new apartments were completed in the capital region during the review period.

As expected, the first half of the year was characterised by the temporary impact of the COVID-19 pandemic and related restrictions on the market and migration. In addition, the supply of rental apartments has been at a high level. For these reasons, our financial occupancy rate decreased, tenant turnover increased and the growth of Like-for-Like rental income was moderate. 

Achieving sufficient vaccination coverage remains a key factor in the reopening of society and the recovery of migration. There are, however, positive signs in this respect. COVID-19 vaccinations in Finland have progressed as expected, and it has been possible to lift certain restrictions related to the pandemic during the summer. One indication of the gradual reopening of society is that we signed a record-high number of new agreements in July. As expected, many of these leases involved students who are returning to contact instruction in the cities where universities are located.  

In spite of the positive developments, it should be noted that the fourth wave of COVID-19 began in Finland during the summer. In particular, the more infectious Delta variant has increased its share of new infections. According to statements issued by the authorities, this may require a higher vaccination coverage than previously thought.

We are confident that apartments in growth centres, with good transport connections and proximity to services, will continue to attract customers. The new population forecast published by MDI in the summer also suggests that the capital region will continue to attract people in all three forecast scenarios. The supply of rental apartments has been at a high level, but we believe that the attributes and locations of our apartments and the customer experience we offer will continue to provide us with a competitive advantage and a unique housing experience in the future.

Our project pipeline is strong and we started construction of 610 new apartments during the period under review. After the review period, we also announced the construction of nearly 600 apartments in the capital region within the framework of our existing cooperation agreements. Our strong project pipeline has also protected us from the rise in construction costs seen in the market during the year. Our contracts have been drawn up at fixed prices and the net initial yields of our project portfolio are at a good level. Our investments are made according to carefully defined criteria with regard to location, condition, attributes and financial requirements.

In May, we issued our first green bond. The demand for this EUR 350 million bond issue was excellent. The proceeds from the bond issue will be used to finance or refinance investments that promote the energy efficiency of buildings in accordance with the Green Finance Framework we published in the spring. The green bond links Kojamo’s strategy, sustainability targets and financing. Our financial position is very strong and we will not have any significant refinancing needs in the near future.

Jani Nieminen

Page updated 19 August 2021