Kojamo plc Inside information 1 November 2019 at 12:15 p.m. EET
Change in the valuation technique used to assess the fair value of investment properties to improve Kojamo’s result for 2019
On 6 June 2019, Kojamo announced it will shift from a transaction-based valuation technique to a yield-based valuation technique in the valuation of its investment properties in the financial statements of 31 December 2019. The change in the valuation technique will make the company more comparable with its relevant international peer group. Kojamo’s external valuation partner in the shift to the new valuation technique will be Jones Lang LaSalle Finland Oy (JLL). The preparations for shifting to the new valuation technique have now progressed to the point where Kojamo can estimate the impacts of the change on the fair value of the company’s investment properties and result for 2019.
Kojamo estimates that the shift to the new valuation technique will increase the fair value of Kojamo’s investment properties. The impact of the change will be recognised through profit or loss, and the change will improve Kojamo’s result for the financial year 2019. If the fair value of Kojamo’s investment properties were to be assessed using the new valuation technique at the end of September 2019, the fair value would be an estimated EUR 760–840 million higher than it is under the transaction-based valuation technique used currently.
The change will have no impact on Kojamo’s total revenue, Funds From Operations (FFO), investments in new development and acquisitions of housing stock, for which Kojamo has issued guidance for 2019.
The change is a change in accounting estimates by nature, and its effects will be recognised in the consolidated income statement and balance sheet starting from the period in which the change takes place. The change will not be applied retrospectively. Kojamo will publish its Interim Report for January–September 2019 on 6 November 2019 and the fair value of investment properties will still be reported in accordance with the old valuation technique in that report.
Further information:
Jani Nieminen, Chief Executive Officer, Kojamo plc, jani.nieminen@kojamo.fi, tel. +358 20 508 3201
Distribution:
Nasdaq Helsinki, key media
Kojamo is Finland’s largest private residential real estate company and a frontrunner in the housing business. Our mission is to create better urban housing. Our Lumo brand provides environmentally friendly housing and services in Finland’s largest growth centres. We actively develop the value of our investment properties by developing new properties, acquiring properties and developing our existing property portfolio. We want to be the property market frontrunner and the number one choice for our customers. Kojamo’s shares are listed on the official list of Nasdaq Helsinki. https://kojamo.fi/en