A historic investment after the review period contributes to the strategic growth targets
VVO Group’s financial development remained good during the review period. We have proceeded systematically in the implementation of our strategy and sought growth in market-based operations by investing strongly both in new development and in acquisitions of existing housing stock. The acquisition of ICECAPITAL Housing Fund II and the transactions with Y-Foundation are an excellent contribution to the implementation of our strategy. Now the Lumo segment already accounts for nearly 90 per cent of the Group’s housing stock. In May, we specified our strategy, extending it until 2021. It still focuses on offering an excellent customer experience and investing in growth in urban centres.
On 4 July 2016, we acquired ICECAPITAL Housing Fund II which owns 2,274 rental apartments. The apartments covered by the transaction are market-based, and most of them are located in Helsinki, Espoo, Vantaa and Tampere. The fund is an excellent match with the Group’s existing housing stock: the apartments are new and on the best locations in each city. This transaction contributes to the implementation of our strategic growth targets.
ARA made decisions in the transaction between VVO Group and Kiinteistö Oy M2-Kodit, owned by Y-Foundation. ARA’s tasks were the buyer designation and the determination of the maximum sales price according to the principles specified in law. The first phase of the transaction was executed on 31 March 2016 and the remaining phase on 20 June 2016. The sales price might be raised later as a result of the appeal. VVO Asunnot Oy will appeal ARA’s decision on the maximum transfer price by necessary means.
We also developed a new housing concept, Lumo Kompakti, that was published during the review period. It has been designed for the needs of urbanising Finland, especially the Helsinki Metropolitan Area. In terms of overall rent, Lumo Kompakti is a more affordable option than what is generally available on the market. Lumo Kompakti has also been developed through crowdsourcing among young people. Currently, we are looking for suitable plots for the concept.
The demand for rental apartments that are located close to good traffic connections and services is growing constantly. We aim to continue to invest in rental housing in Finnish growth centres, particularly in the Helsinki Metropolitan Area. Our investments during the review period totalled EUR 89.9 million and we had 1,303 rental apartments under construction.
Have a nice autumn!
Jani Nieminen
CEO
