2015-05-13 07:00:00 CEST
2015-05-13 07:00:10 CEST
REGULATED INFORMATION
Orava Asuntorahasto Oyj - Interim report (Q1 and Q3)
ORAVA RESIDENTIAL REIT’S FINANCIAL RESULT 1 JANUARY – 31 MARCH 2015
Orava Residential REIT plc
INTERIM REPORT 13 May 2015 at 8:00 a.m.
ORAVA RESIDENTIAL REIT'S FINANCIAL RESULT 1 JANUARY - 31 MARCH 2015
1 January - 31 March 2015
- Revenue EUR 4.6 million (1 January - 31 March 2014: EUR 4.2 million)
- Comprehensive profit EUR 2.3 million (EUR 2.4 million)
- Earnings per share EUR 0.41 (EUR 0.57)
- Economic occupancy rate 89.8% (82.1%)
- Gross rental yield 6.8% (6.4%)
- Net rental yield 4.0% (3.3%)
- Profit from sales and changes in value: EUR 2.4 million (EUR 3.0 million)
- Total dividends distributed during the period under review: EUR 0.30 per
share (EUR 0.28 per share)
Net assets per share of Orava Residential REIT plc was EUR 12.01 from EUR 12.02
(adjusted) at the beginning of the year. The company has continued growing, and
the value of its investment properties totalled EUR 152.1 million at the end of
the period (31 December 2014: EUR 130.7 million).
CEO's comments:"Orava Residential REIT's financial result for the first quarter was in
accordance with its objectives.
The state of the Finnish housing market has continued to be weak in the first
half of the year, and the fair value of the apartments owned by the Residential
REIT for the entire quarter fell by 0.7% over the period under review. However,
we managed to compensate the weak value development by income arisen from
wholesale discounts of successful apartment acquisitions. During the period
under review, the company agreed on the acquisition of 162 apartments from
eleven different properties at a total of EUR 20.7 million. The fair value of
the investment properties owned by the Residential REIT increased from EUR
130.7 million at the end of 2014 to EUR 152.1 million at the end of March.
Immediately after the end of the period, Orava Residential REIT issued a
covered bond of EUR 20 million. Involvement in the bond market enables the
Residential REIT to obtain diversified liabilities in the future, and, for its
part, contributes to the achievement of the REIT's strategic growth target.
The rental income of the portfolio remained at the same level as a year before.
We managed to slightly increase the economic occupancy rate, even though half
of the apartments acquired during the period were without tenants at the time
of purchase.
The difficult situation in the housing market was reflected in apartment sales,
the number of which remained low in the period under review.
The maintenance and repair costs of investment properties in relation to the
value of the portfolio were 2.7% converted to the annual level, i.e. 0.2
percentage points higher than the figure for the entire previous year. The
difference is explained in its entirety by seasonal variation.
The number of Orava Residential REIT's shareholders increased from
approximately 5,800 at the end of January to about 6,500 at the end of April.
Trading in the company's shares on the Helsinki Stock Exchange has continued to
be active; the average daily turnover in January-April 2015 was over EUR
330,000 (EUR 280,000 a year before).
The Annual General Meeting of 19 March 2015 decided to pay a dividend of EUR
0.30 per share in each quarter. This year as well, the dividend will always be
paid on the last business day of the quarter. A total of EUR 1.20 per share
will be paid in dividends in the current year, or approximately 10 per cent of
net assets per share at the beginning of 2015.
The Company continues to estimate that it has reasonably good prerequisites for
maintaining good profitability and achieving the targeted total return of 10
per cent on shareholders' equity this year."
Operating environment
National economy
According to advance information, the change in the Finnish GDP remained at
-0.1% in the previous year, and it is forecasted to be in the range of +0.1% -
+0.9% during the current year. The change in private consumption that has a key
impact on the housing market was -0.2% for the past year according to advance
information, and the growth forecasted for 2015 is 0.0% - +0.7%. Market
interest rates in the euro area have continued to fall, and short-term rates
are also expected to remain at less than 1% for approximately the next five
years. The estimate is based on the most recent economic forecasts by 15
parties drawing up forecasts on the Finnish economy and the market interest
rate expectations calculated on the basis of the euro interest rate curve
published by the European Central Bank.
The housing market is estimated to start strengthening slowly as a result of
overall economic activity picking up in 2015.
Demand in the housing market
During January-March 2015, households drew down EUR 3.7 billion in new
mortgages, or 14% more than a year previously, according to statistics from the
Bank of Finland. The euro-denominated mortgage base totalled EUR 89.9 billion
at the end of March, and the annual growth in the mortgage base amounted to
1.7%.
The average marketing period for old apartments in the country overall,
according to the Finnish Etuovi.com marketing service, decreased from 135 days
in December to 110 days in April, while it was 96 days in April in the previous
year.
The demand for apartments has picked up slightly in the spring, mainly due to
normal seasonal variation.
Supply in the housing market
According to the economic review of the Confederation of Finnish Construction
Industries RT for March, housing starts of non-subsidised terraced houses and
apartment block apartments are anticipated to remain at 10,500 housing units,
i.e. 7% lower than a year before. As a whole, the construction volume is
forecasted to reduce by 0.5% year-on-year.
According to the May confidence indicator survey of the Confederation of
Finnish Industries, the balance figure for construction production for the past
three months was -12 points in the first quarter of the year, while it was the
same -12 points in the previous quarter and -17 points a year before. The
balance figure for the three-month production expectation was +20 points,
compared to -10 points in the previous quarter and +18 points a year before.
The number of unsold residential apartments compared to normal fell from +30 in
the last quarter of the previous year to +24; a year ago, the balance figure
was -13 points.
Supply in the housing market has continued at a low level, even though some
signs of a potential turnaround can be seen.
Prices, rents and return in the housing market
In the first quarter of 2015, the rents of non-subsidised apartments increased
by 2.8 % year-on-year. The change in the prices of apartments during the first
quarter was -1.1% compared with the situation a year previously. The ratio of
housing prices to rents is slightly below the long-term average; the ratio
calculated from the square metre prices and rents of the first quarter was
15.4. The 40-year average for the ratio of square metre prices to annual rents
in Finland is 16.7.
We expect housing prices throughout the country to start rising slightly during
the next 12 months and the growth rate in rents of non-subsidised apartments to
remain approximately the same if the market interest rate expectations and
economic forecasts prove to be accurate with regard to their essential
components affecting the housing market.
Rental operations
The occupancy rates of rental operations rose slightly in the period under
review compared with the turn of the year. We have managed to increase the
occupancy rate as planned with regard to the apartments without tenants
acquired during 2014. In the future, any increase in the occupancy rate will be
slowed down by the acquisition of apartments without tenants at the end of the
period under review and the rental market in Salo, which has continued to be
weak.
1 Jan - 31 Mar 2015 1 Jan - 31 Mar 2014
Gross rental yield, % 6.8 6.4
Net rental yield,% 4.0 3.3
Economic occupancy rate, % 89.8 82.1
Operational occupancy rate, % 90.8 82.3
Tenant turnover/month, % 2.2 1.9
The economic occupancy rate, adjusted so that the acquisitions of the past six
months have been eliminated, was 94.1%.
At the end of the period, the company had a total of 1,456 residential
apartments (Q1 2014: 860). There were 1,208 leases at the end of the period (Q1
2014: 720), and 105 apartments were for sale (Q1 2014: 29). Approximately 97%
of the entire lease base for residential apartments is in agreements valid
until further notice. A total of 78 agreements were terminated during the
period (Q1 2014: 43).
Acquisitions
Acquisitions implemented during the period under review
Debt-free Directed
purchase price Debt issues (1,000 Apartments
Time Property (EUR million) (EUR million) shares) (qty)
9 Feb 2015 Apartments 4.6 3.7 0 22
from 2 properties
(Mikkeli and Pori)
31 Mar 2015 Apartments 11.7 9.1 0 53
from several properties
(Tampere, Turku, Oulu,
Rovaniemi, Vaasa, Kokkola
and Savonlinna)
31 Mar 2015 2 properties 4.4 1.6 244 87
(Kaarina, Raisio)
TOTAL 20.7 14.4 244 162
On 9 February 2015, the company acquired 22 apartments through a transaction
made with Skanska Talonrakennus Oy. Their aggregate debt-free purchase price
was EUR 4.6 million. The apartments are located in a total of 2 properties in
Mikkeli (12 apartments) and Pori (10).
The company acquired a total of 140 apartments through transactions made and an
agreement concluded on 31 March 2015. Their aggregate debt-free purchase price
was EUR 16.1 million. A residential property of 36 apartments at Hoviherrankatu
3 in Kaarina and a residential property of 51 apartments at Kunnaankatu 7 in
Raisio were purchased from Osuusasunnot Oy. The transaction was partly financed
through a directed issue allocated to Osuusasunnot Oy, where Osuusasunnot Oy
subscribed for 244,193 new shares issued by the company. Of these shares,
128,461 do not provide entitlement to dividends paid in 2015. The subscription
price of the shares was the weighted average price during the five days of
stock exchange trading on the NASDAQ Helsinki preceding the subscription. In
addition, the company concluded a binding agreement with Skanska Rakennus Oy on
a transaction of 53 apartments, which are located in a total of 9 properties in
Tampere (11 apartments), Turku (5), Oulu (7), Vaasa (5), Rovaniemi (13),
Kokkola (3) and Savonlinna (9). The transaction according to the agreement was
implemented on 28 April 2015.
Apartment sales
During the period under review, the company sold a total of nine apartments
from eight different housing companies. The debt-free selling prices of the
apartments totalled EUR 0.8 million. The sales commissions totalled EUR 31
thousand. In the difficult market situation apartment sales increased compared
with the first quarter of 2014, although not in accordance with the growth in
the size of the investment and sales portfolio.
In accordance with the company's investment strategy, the company sells
apartments at about 10 per cent of the value of investment properties on the
company's opening statement of financial position annually so that apartments
released from rental use are sold one by one.
Investment properties on 31 March 2015
The fair value of investment properties at the end of the period totalled EUR
152.1 million (31 December 2014: EUR 130.7 million). Orava Residential REIT had
a total of 1,478 apartments on 31 March 2015 (31 December 2014: 1,318), the
aggregate leasable surface area of which was approximately 91,800 m2 (31
December 2014: 82,200 m2). The apartments were located in 76 different housing
companies, where the company's holding was 100% in 16 of the cases. More
detailed information on the investment properties is presented in the tables
section.
Age and regional distributions of the investment portfolio
31 Mar 2015 31 Mar 2014
Newer (1990-present) 60% 56%
Older (up to 1989) 40% 44%
Helsinki Region 37% 46%
Major towns 27% 18%
Rest of Finland 36% 36%
The values of the apartments owned by the REIT are measured at fair value at
least on a monthly basis, and are published at least on a quarterly basis, and
always when a change in the REIT's economic situation requires it, or when
changes in the condition of the real estate have a material impact on the value
of the holdings of the REIT. A more detailed account of the apartment price
measurement model is presented in the 2014 financial statements.
Consolidated profit for the period
Consolidated revenue for the period totalled EUR 4.6 million (Q1 2014: EUR 4.2
million). The revenue was divided into income from ordinary operations of EUR
2.2 million (Q1 2014: EUR 1.2 million) and capital gains of EUR 2.4 million (Q1
2014: EUR 3.0 million). Income from ordinary operations includes rental
income, compensation for use and other income. Capital gains are made up of
profit from sales of investment properties less sales commissions for sold
apartments, as well as the change in the fair value of apartments.
Operating expenses totalled EUR 2.0 million (Q1 2014: EUR 1.4 million), of
which maintenance costs and annual repairs accounted for EUR 1.0 million (Q1
2014: EUR 0.6 million). The increase in expenses results from the increase in
the investment portfolio.
Operating profit amounted to EUR 2.6 million (Q1 2014: EUR 2.9 million)
Financial income and expenses stood at EUR -332 thousand (Q1 2014: -372
thousand) and taxes for the period at EUR 26 thousand (Q1 2014: EUR 16
thousand).
Profit for the period amounted to EUR 2.3 million (Q1 2014: EUR 2.5 million).
Comprehensive income items totalled EUR -10 thousand (Q1 2014: EUR -64
thousand) and comprehensive profit for the period totalled EUR 2.3 million (Q1
2014: EUR 2.5 million).
Financing
In the period 1 January - 31 March 2015, financial expenses (net) totalled EUR
322 thousand (Q1 2014: EUR 372 thousand), and the repayments of the parent
company's financial institution loans amounted to EUR 115 thousand (Q1 2014:
EUR 58 thousand). The parent company's financial institution loans are hedged
in their entirety in terms of interest rates through interest rate swaps
concluded with Danske Bank.
The interest-bearing loans of Orava Residential REIT and the company loans
allocated to the shares in housing companies totalled EUR 74.3 million on 31
March 2015 (31 December 2014: EUR 60.0 million).
In addition to these, the long-term loans on the statement of financial
position also include EUR 532 thousand in rental deposits paid by tenants (31
March 2014: EUR 478 thousand).
Shares and shareholders of Orava Residential REIT
In the first quarter, the company implemented directed issues of a total of
444,193 shares, and applied for the shares to be admitted to trading on the
main list of the Helsinki Stock Exchange (trading codes OREIT and OREITN0115).
The company allocated 200,000 shares to itself in a charge-free share issue on
9 February 2015. In addition, in a directed issue related to an acquisition,
Osuusasunnot Oy subscribed for 244,193 shares on 31 March 2015. The
subscription price of the shares was the weighted average price during the five
days of stock exchange trading on the NASDAQ Helsinki preceding the
subscription. Of the shares subscribed for in the issues, 328,461 shares do not
provide entitlement during 2015 to dividends paid from the profit for 2014, but
they will provide entitlement to dividends in 2016 and subsequent years.
The trading codes of the company's shares are OREIT and OREITN0115. During the
period under review, the average turnover of shares was over EUR 330 thousand.
The company had approximately 6,500 shareholders at the end of April.
LIST OF OWNERS ON 30 April 2015, TEN LARGEST
Shareholder Number of shares %
Royal House Group*** 547,925 8.1
Godoinvest Oy** 229,360 3.4
Osuusasunnot Oy 227,830 3.4
Länsi-Suomen Vuokratalot Oy* 176,450 2.6
Yli-Torkko Erkki 100,000 1.5
Livränteansttalten Hereditas 81,000 1.2
Pakarinen Janne 78,083 1.2
Maakunnan Asunnot Oy* 69,422 1.0
Alte Invest Oy 45,698 0.7
Orava Funds plc**** 45,639 0.7
Total 1,601,407 23.7
* Companies under the control of Board members Tapani Rautiainen and Timo
Valjakka
** Company under the control of Board member Timo Valjakka
*** Company under the control of Board member Tapani Rautiainen
**** Company under the control of Board member Jouni Torasvirta
Management of the Residential REIT
Orava Residential REIT was established on the initiative of Orava Funds plc.
Orava Funds is responsible for the organisation, management and development of
the operations and administration of the Residential REIT. The Residential REIT
has no personnel of its own.
As compensation for management services, Orava Residential REIT pays the
management company 0.6% of the fair value of the assets of the REIT as an
annual fixed management fee and 20% of the annual return on the REIT exceeding
the hurdle rate of 6% as a performance-based management fee. The stock exchange
price is used in the calculation of the performance-based management fee if it
is lower than net assets per share. The performance-based management fee is
only paid if the closing stock exchange price for the financial period is
higher than the highest closing stock exchange price for the previous financial
periods, adjusted for dividends, issues and splits.
The fixed management fee is calculated on a quarterly basis, and the value is
considered to be the latest fair value of the assets according to IFRS in the
previous quarter. The fixed management fees during the period 1 January - 31
December 2015 amounted to EUR 205 thousand (Q1 2014: EUR 133 thousand),
including value added tax.
On the basis of the company's net assets per share, share price and dividend
distribution realised in 2015, a performance-based management fee of EUR 337
thousand has been booked (Q1 2014: EUR 434 thousand). The performance-based
management fee will be paid at March 2016 on the basis of the company's net
assets per share or adjusted share price realised at the end of the year 2015.
During the period, Newsec Asset Management Oy and Ovenia Oy were paid EUR 105
thousand for financial administration and other support activities and a total
of EUR 123 thousand for apartment rental operations and administrative
services, including value added tax.
Personnel
The personnel of Orava Residential REIT are part of the business organisation
of the management company. The management company is responsible for the
personnel expenses incurred from the operational activities of the Residential
REIT.
Board of Directors and auditors
Orava Residential REIT's Board of Directors is composed of six members: Tapani
Rautiainen, Veli Matti Salmenkylä, Jouni Torasvirta, Timo Valjakka, Mikko
Larvala, Patrik Hertsberg (since 19 March 2015) and Peter Ahlström (until 19
March 2015). The Chairman of the Board is Jouni Torasvirta, and the Vice
Chairman is Tapani Rautiainen. The Board of Directors convened a total of seven
times during the period under review. The Board members' rate of attendance at
Board meetings was 98%.
Orava Residential REIT's auditor is PricewaterhouseCoopers Oy, with Eero
Suomela, APA, as the chief auditor. The auditor is paid a fee in accordance
with the invoice.
Authorisations of the Board of Directors
The Board of Directors has an authorisation for a share issue of 6,000,000
shares given by the Annual General Meeting on 19 March 2015. On 31 March 2015,
5,755,807 shares remain of the share issue authorisation.
Management
Pekka Peiponen is the CEO of Orava Residential REIT. The management of Orava
Residential REIT is part of the business organisation of the management company
Orava Funds plc. The management company is responsible for the costs of
personnel and management incurred from the REIT's operational activities.
Regulation
The valid rules for real estate investment operations are available on the
company's website at www.oravaasuntorahasto.fi.
Near-term risks and uncertainties
Orava Residential REIT estimates that the key risks and uncertainties for the
company in the near future will be related to the acquisition of investment
properties, changes in the value of apartments and repair costs.
It may be challenging and difficult for the company to acquire investments that
meet the company's goals. In addition, it may be difficult for the company to
secure debt financing for investments under competitive terms and conditions.
Major unexpected repairs and repair costs would result in a decline in the
occupancy rate of apartments, loss of rental income and a decline in
profitability.
Major events 1 January - 31 March 2015
The 500,000 shares that Orava Residential REIT plc allocated to itself in the
charge-free share issue on 17 December 2014 were recorded in the Trade Register
on 5 January 2015. The company may use the shares allocated to itself to
strengthen its capital structure, develop its business and widen its ownership
base through both acquisition of investment properties and the issue of
convertible bonds. After the issue, the number of the company's shares totalled
5,706,123.
On 19 January 2015, Orava Residential REIT submitted a listing application for
47,800 shares to be admitted to trading on the stock exchange list of the
Helsinki Stock Exchange as of 20 January 2015. The shares are included in the
500,000 shares recorded in the Trade Register on 1 January 2015. The trading
code of the shares is OREIT, and the ISIN code is FI4000068614. After the
listing, the total number of the company's listed shares was 5,253,923.
On 23 January 2015, the Financial Supervisory Authority approved the company's
prospectus, which is related to the listing of a total of 1,056,122 shares. The
shares are related to the directed issue allocated to Osuusasunnot Oy (235,922
shares), communicated by the company on 28 November 2014, the directed issue
allocated to Royal House Oy (368,000 shares), communicated on 31 December 2014,
and the charge-free directed issue allocated to the company itself (500,000
shares, of which 47,800 shares were listed on 20 January 2015), communicated on
5 January 2015. In the directed issues subject to a payment, the subscription
price of new shares was the average stock exchange price on the Helsinki Stock
Exchange weighted by the share turnover during the five trading days preceding
the subscription. The subscription price of Osuusasunnot Oy was EUR 11.33 per
share, and the subscription price of Royal House Oy was EUR 10.60 per share.
The 368,000 new shares allocated by Orava Residential REIT plc to Royal House
Oy in connection with a property acquisition on 31 December 2014 and the
200,000 shares allocated to the company itself in a charge-free share issue on
9 February 2015 were recorded in the Trade Register on 12 February 2015. The
company may use the new shares allocated to itself to strengthen its capital
structure, develop its business and widen its ownership base through both
acquisition of investment properties and issue of convertible bonds. After the
issues, the number of the company's shares recorded in the Trade Register
totalled 6,510,045.
The Helsinki Stock Exchange approved Orava Residential REIT's listing
application concerning the aforementioned 568,000 shares, and the new shares
have been subject to trading on the stock exchange list as of 13 February 2015.
The trading code of the 368,000 shares allocated to Royal House Oy is OREIT and
the ISIN code is FI4000068614. The trading code of the 200,000 shares allocated
by the company to itself is OREITN0115 and the ISIN code is FI4000148036. The
shares with the trading code OREITN0115 do not provide entitlement to dividends
paid from the profit for 2014 during 2015, but they will provide entitlement to
dividends in 2016 and subsequent years. After these issues, the number of the
company's listed shares totalled 6,510,045.
The company's Annual General Meeting was held on 19 March 2015. The AGM decided
to change the company name to Orava Residential REIT plc (previously Orava
Residential Real Estate Investment Trust plc). The related amendment to section
1 of the Articles of Association was recorded in the Trade Register on 31 March
2015.
The AGM decided to make a specification in the rules for investment operations
concerning the payment of the performance-related management fee so that the
stock exchange price of the share shall be used in the calculation of the
management fee if it is lower than net assets per share. According to the
decision of the AGM, the rules for investment operations (section 11, paragraph
3) were specified with regard to the determination of the management fee. The
clause "if the stock exchange price of the share is lower than net assets per
share" was added to the end of the sentence, "After listing, the stock exchange
price of the share shall be used in the calculation instead of net assets per
share." in section 11, paragraph 3.
The AGM decided to grant a share issue authorisation to the Board of Directors
so that, on the basis of the authorisation, the Board may decide to issue no
more than 6,000,000 new shares in the company (of which no more than 1,500,000
shares provide entitlement to dividends as of 1 April 2015 and 4,500,000 shares
do not provide entitlement to dividends during 2015).
The company acquired a total of 140 apartments through transactions made and an
agreement concluded on 31 March 2015. Their aggregate debt-free purchase price
was EUR 16.1 million. The company concluded a binding agreement with Skanska
Talonrakennus Oy on a transaction of 53 apartments, which are located in a
total of 9 properties in Tampere (11 apartments), Turku (5), Oulu (7), Vaasa
(5), Rovaniemi (13), Kokkola (3) and Savonlinna (9). In addition, a residential
property of 36 apartments at Hoviherrankatu 3 in Kaarina and a residential
property of 51 apartments at Kunnaankatu 7 in Raisio were purchased from
Osuusasunnot Oy. The transaction was partly financed through a directed issue
allocated to Osuusasunnot Oy, where Osuusasunnot Oy subscribed for 244,193 new
shares issued by the company. Of these shares, 128,461 do not provide
entitlement to dividends paid in 2015. The subscription price of the shares was
the weighted average price during the five days of stock exchange trading on
the NASDAQ Helsinki preceding the subscription.
Events after the financial period
Orava Residential REIT issued a secured bond of EUR 20 million on 1 April, and
communicated its decision to issue the bond on 26 March 2015. The bond will
fall due on 1 April 2020, and fixed interest of 4.25% will be paid on it. The
bond was listed on the regulated market of the Helsinki Stock Exchange on 2
April 2015. Danske Bank Plc acted as the lead manager in the issue of the bond,
and Castrén & Snellman Attorneys Ltd acted as the legal advisor in the
arrangement.
The 244,193 new shares allocated by Orava Residential REIT plc to Osuusasunnot
Oy in connection with an acquisition on 31 March 2015 were recorded in the
Trade Register on 17 April 2015. After the issue, the number of the company's
shares recorded in the Trade Register totals 6,754,238. Of the shares allocated
to Osuusasunnot Oy, the ISIN code of 115,732 shares is FI400068614 (trading
code OREIT), and the ISIN code of 128,461 shares is FI4000148036 (trading code
OREITN0115). The shares whose trading code is OREITN0115 do not provide
entitlement to dividends paid from the profit for 2014 during 2015, but they
will provide entitlement to dividends in 2016 and subsequent years. The
submitted a listing application to the Helsinki Stock Exchange concerning the
aforementioned 244,193 shares, and the new shares have been subject to trading
on the stock exchange list as of 21 April 2015. After the listing, the number
of the company's listed shares totals 6,754,238.
The transaction of 53 residential apartments agreed with Skanska Rakennus Oy in
March 2015 was implemented as planned on 28 April 2015.
Dividend
The Annual General Meeting of 19 March 2015 decided to distribute a dividend of
EUR 0.30 per share from the profit for 2014 in each quarter of 2015, i.e. in
total at most EUR 1.20 per share in 2015 (100% dividend rights). The dividend
will be paid on the last business day of each quarter.
Dividends per share paid during the period under review:
FI4000068614
(100%)
31 Mar 2014 1st dividend EUR 0.30
Total EUR 0.30
Future outlook
Orava Residential REIT estimates that it has reasonably good prerequisites for
maintaining good profitability and achieving the targeted total return of 10
per cent on shareholders' equity in 2015.
The change in value of apartments in the investment portfolio is expected to
remain close to zero in the second half of the year. Rental income is estimated
to rise slightly, as we believe we can increase the economic occupancy rate
compared with the previous year and the first quarter. The result impact of
property acquisitions is expected to remain at the level of the previous year.
The ratio of maintenance and repair costs to the value of investment assets is
also expected to remain approximately at the level of the previous year.
Helsinki, 12 May 2015
Orava Residential REIT plc
Board of Directors
Additional information:
Pekka Peiponen, CEO, tel. +358 (0)10 420 3104
Veli-Matti Salmenkylä, CFO and administrative director, tel. +358 (0)10 420 3102
Appendix: Interim Report Q1 2015
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