Glossary for investors

There are several field-specific performance measures illustrating Kojamo’s operations and result, which are particularly interesting for investors. On this page we explain some of the key terms and figures.

Gross investments

Gross investments illustrate the total volume of investments, including investments in new development and for example converting properties for residential purposes, housing stock acquisitions, modernisation investments and capitalised borrowing costs. Investments in new development and housing stock acquisitions are one of three key figures we use in our 2019 earnings guidance.

The performance measure is an indicator of the company’s strategic growth. The objective is to increase the fair value of investment properties to EUR 6 billion by the end of 2021.


EPRA (European Public Real Estate Association) has developed a performance measure for comparable analysis of property investment companies. The EPRA NAV performance measure is widely used in the real estate industry.

NAV (Net Asset Value) roughly translates as the fair value of real estate properties, excluding net debt. EPRA NAV, on the other hand, represents the Group’s net asset value, adjusted by items that are not expected to materialise while the company continues its operations. Such an item would be, for example, a deferred income tax liability that would become payable should the properties be sold. EPRA NAV per share illustrates the net asset value for a single share.

Funds from Operations (FFO)

The Funds from Operations (FFO) measure illustrates the profitability of the business. Unlike operating profit, the FFO excludes changes in fair value as well as gains and losses on sales of assets. FFO is one of the three key figures we use in our 2019 earnings guidance. The objective for dividend payment is also included in this key figure.

Property maintenance and repair expenses

Property maintenance and repair expenses include maintenance and repair expenses arising from the regular and continuous maintenance of the properties and are recorded in the income statement above net rental income.

Maintenance expenses are mainly related to heating, electricity, waste disposal, water use, property management, property taxes, property insurances and other maintenance expenses paid by Kojamo. Modernisation investments that enhance the income formation ability of the property, such as pipeline renovations, are recorded in gross investments and their effects are recognised in the income statement under fair value changes.

Total revenue

Total revenue consists of rental income and service charges. Rental income accrued from the tenancy agreements is recognised on a monthly basis in accordance with the terms of the operative tenancy agreement. Related to the tenancy agreements, we collect service charges that mainly consist of water, sauna and parking space fees. Total revenue is one of the key figures we use in our 2019 earnings guidance.

Operating profit

In addition to net rental income, operating profit also includes other operating income and expenses, profit and loss on sales, changes in fair value, as well as administrative expenses and depreciation, amortisation and impairment losses.

Like for Like growth (LfL)

Like for Like growth (LfL) represents the change of rental income for apartments owned for two consecutive years in the past 12 months compared to the previous 12-month period. LfL rental income growth is affected by changes in the financial occupancy rate, rent increases, the amount of rent of new tenancy agreements compared to those that have ended[MN1] , and the time between new and ended tenancies. LfL rental income growth is also affected by the changes in maintenance and repair expenses.

The company’s total revenue might change significantly due to completion of new apartments and acquisitions and divestments of apartments. Therefore, the change in revenue might not give an accurate picture of the existing apartments. Like for Like growth illustrates the organic rental income growth of the current housing stock.

Loan to Value (LTV)

Loan to Value (%) is a measure of debt, which is calculated by dividing net debt with the value of investment properties. The figure illustrates the Group’s indebtedness in relation to the fair value of the investment properties.

Our strategic objective is to keep Loan to Value below 50 per cent.

Net rental income

Net rental income illustrates what is left of the rental income after deducting the maintenance and repair expenses of the properties.

Investment properties

Investment properties comprise apartments, business premises, land plots and ongoing projects and certain assets owned through shares like parking spaces that are owned by us.

Fair value change of investment properties

The fair value of investment properties is changed by investment properties acquired and sold, modernisation investments, capitalised borrowing costs, transfers to own use and valuation gains or losses on fair value measurement.

Valuation gains or losses on fair value measurement of investment properties

Investment properties are initially measured at their acquisition cost. Subsequently, they are measured at fair value, and the resulting changes in fair value are recognised in profit or loss as they arise. In our reporting, fair value refers to the price that would be received from selling an asset, or paid to transfer a liability, in an orderly transaction between market participants on the measurement date. Fair value is determined quarterly. Read more about fair value measurement principles in the Financial Statements.

Financial occupancy rate

The financial occupancy rate is calculated by dividing rental income with potential rental income. In recent years, Kojamo’s financial occupancy rate has been 96–98 per cent.

Page updated 31 May 2019