2015-02-12 07:30:03 CET
2015-02-12 07:30:37 CET
REGULATED INFORMATION
Orava Asuinkiinteistörahasto Oyj - Financial Statement Release
FINANCIAL STATEMENTS BULLETIN OF ORAVA RESIDENTIAL REAL ESTATE INVESTMENT TRUST PLC 1 JANUARY – 31 DECEMBER 2014
Orava Residential Real Estate Investment Trust plc
Financial Statements Bulletin 12 February 2015 8:30 a.m.
FINANCIAL STATEMENTS BULLETIN OF ORAVA RESIDENTIAL REAL ESTATE INVESTMENT TRUST
PLC 1 JANUARY - 31 DECEMBER 2014
1 October - 31 December 2014
- Revenue EUR 2.8 million (1 October - 31 December 2013: EUR 4.9 million)
- Comprehensive profit EUR 1.7 million (EUR 4.0 million)
- Earnings per share EUR 0.35 (EUR 0.94)
- Economic occupancy rate 88.4%
- Gross rental yield 6.6%
- Net rental yield 3.6%
- Profit from sales and changes in value EUR 0.8 million (EUR 4.0 million)
- Total dividends distributed during the fourth quarter EUR 0.28 per share
(EUR 0.27 per share)
1 January - 31 December 2014
- Revenue EUR 15.6 million (1 January - 31 December 2013: EUR 9.7 million)
- Comprehensive profit EUR 8.4 million (EUR 6.9 million)
- Earnings per share EUR 1.87 (EUR 3.19)
- Economic occupancy rate 89.4% (93.8%)
- Gross rental yield 6.7% (8.0%)
- Net rental yield 4.0% (4.5%)
- Profit from sales and changes in value EUR 9.1 million (EUR 6.5 million)
- Total dividends distributed during the period under review EUR 1.12 per
share (EUR 1.08 per share)
The adjusted net asset value per share of Orava Residential Real Estate
Investment Trust plc ("Orava Residential REIT") increased to EUR 12.07 (+5%)
from EUR 11.54 at the beginning of the year. The unadjusted net asset value per
share is EUR 13.57 (+18%). The company has continued growing, and the value of
its investment properties totalled EUR 130.6 million (31 December 2013: EUR
79.2 million) at the end of the period. The Board of Directors proposal to
Annual General Meeting for dividends to be paid in 2015 is EUR 0.30 per share
in each quarter, or a total of EUR 1.20 per share.
CEO's comments:"Orava Residential REIT achieved its targeted financial result in 2014. In the
fourth quarter, the company decided on acquisitions that increased the fair
value of its investment properties to more than EUR 130 million.
The general price development of apartments declined in 2014, but the
prevailing market conditions offered a wholesale purchaser an opportunity to
make profitable acquisitions. During the year, we acquired a total of 552
apartments from 20 different properties. The debt-free purchase prices totalled
EUR 46.2 million. In the fourth quarter, we made agreements to acquire 164
apartments from a total of three different properties at a debt-free purchase
price of EUR 10.2 million. The impact of successful apartment acquisitions on
the accrual of financial result for the whole year was significant.
The sales of individual apartments proceeded fairly slowly in 2014, even though
the market picked up slightly towards the end of the year. In addition to
apartment sales, the sales from the investment portfolio were supplemented by
sales of plots during the year; accordingly, the sales from the portfolio
during the period totalled EUR 5.7 million.
In the fourth quarter, the economic occupancy rate fell to 88.4% from 89.7% in
the previous quarter. The fall was primarily due to the impact of new
apartments acquired without tenants in the autumn.
The maintenance and repair costs of investment properties remained at the same
level in 2014 as the year before in relation to the average value of the
investment properties.
In connection with the company's strategy work, the regional and age
distribution targets were updated, and growth criteria were set for the target
towns in addition to size criteria.
The number of Orava Residential REIT shareholders continued to grow and doubled
year-on-year. At the end of January 2015, the residential REIT had over 5,800
shareholders. Trading in the company's shares on the Helsinki Stock Exchange
has also continued to be lively; the average daily turnover in 2014 was
approximately EUR 254,000. During the period, the company issued a total of
891,729 new shares.
The company estimates that it has reasonably good preconditions for maintaining
good profitability in 2015 and achieving the targeted total return of 10 per
cent on shareholders' equity."
Operating environment
National economy
Finland's GDP growth is estimated to have settled in the range -0.4% - 0.0% in
2014, and it is forecasted to remain in the range +0.1% - +1.0% in the current
year. The change in private consumption that has a key impact on the housing
market is estimated to have been approximately -0.4% - +0.2% in the ended year
and to be -0.2% - +0.9% in 2015. The market interest rates in the euro area
have continued to fall, and short-term rates are also expected to remain at
less than one per cent for the next four to 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
the picking up of overall economic activities in 2015.
Demand in the housing market
During October-December 2014, households drew down EUR 3.9 billion in new
mortgages, or 6% more than a year previously according to statistics from the
Bank of Finland. The euro-denominated mortgage base totalled EUR 89.8 billion
at the end of December, and the annual growth in the mortgage base was 1.7%.
The average marketing period for old apartments in the country overall
according to the Finnish Etuovi.com portal increased from 112 days in September
to 135 days in December, while it was 109 days in December in the previous
year.
The demand for apartments has continued to be weak during the end of the autumn
and beginning of the winter.
Supply in the housing market
According to Statistics Finland, building permits for apartment blocks were
granted for 816 apartments in October, which was 15% less than a year
previously. Correspondingly, in January-October, a total of 14,840 building
permits were granted for apartment block apartments, or 22 % more than a year
previously. The annual change in the sliding annual sum of building permits
granted for apartment blocks was +25 %.
The three-month change in the housing construction volume index that describes
the value of on-going new construction was +12% in August, and the change
year-on-year was -17%.
The supply in the housing market has continued at a low level, even though some
signs of a potential turn are visible.
Prices, rents and return in the housing market
In the fourth quarter of 2014, the rents of non-subsidised apartments increased
by 3.0% year-on-year. The change in the prices of apartments during the fourth
quarter was -1.0% year-on-year. 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 fourth quarter was 15.5. The 40-year average for
the ratio of square metre prices to annual rents in Finland is 16.7.
During the next 12 months we expect housing prices throughout the country to
remain approximately the same or at the end of period start rising slightly and
the growth rate in rents for 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
Over the period under review, occupancy rates in rental operations were at a
lower level year-on-year. This was primarily due to the acquisitions made
during the period, where the share of new apartments without tenants was higher
than in the comparison period. In addition, the prolonged poor economic
situation has made letting slightly more difficult.
The economic occupancy rate for the fourth quarter was 88.4%, while it was
89.4% for the entire period under review.
At the end of the period, the company had a total of 1,294 residential
apartments (2013: 772) and a total of 1,318 apartments. There were 1,017 leases
at the end of the period, and 62 apartments were for sale (2013: 29).
1 Jan - 31 Dec 2014 1 Jan - 31 Dec 2013
Gross rental yield, % 6.7 8.0
Net rental yield, % 4.0 4.5
Economic occupancy rate, % 89.4 93.8
Operational occupancy rate, % 88.7 92.5
Tenant turnover/month, % 2.1 2.3
Of the entire lease base for residential apartments, 25 were agreements valid
for a fixed term. A total of 237 agreements were terminated during the period
(2013: 119).
Acquisitions
Acquisitions implemented or agreed during the period under review
Debt-free Company Directed Apartments
purchase loan issues (number) price (MEUR) (shares)
Time Property (MEUR)
January-September 7 properties 36.2 16.0 425,929 388
and apartments from
10 properties
28 Nov 2014 A property from 6.2 3.5 235,922 84
Kirkkonummi
31 Dec 2014 2 properties 4.0 - 368,000 80
from Rovaniemi
TOTAL 46.4 19.5 1,029,851 552
In the fourth quarter, the company acquired a property from Osuusasunnot Oy in
Kirkkonummi at a debt-free price of EUR 6.2 million through a binding agreement
concluded on 28 November 2014. The property includes 84 apartments. The
transaction was implemented according to the agreement on 5 January 2015. The
transaction was financed through a directed issue allocated to Osuusasunnot Oy,
where Osuusasunnot Oy subscribed for 235,922 new shares issued by the company.
The subscription price of the new shares was EUR 11.33 per share, which was the
weighted average price during the five days of stock exchange trading preceding
the day the agreement was concluded.
In addition, the company acquired two properties from Royal House Oy in
Rovaniemi at a debt-free purchase price of a total of EUR 4.0 million through a
binding agreement concluded on 31 December 2014. The properties include a total
of 80 apartments. The transaction was implemented according to the agreement on
9 February 2015. The transaction was financed through a directed issue
allocated to Royal House Oy, where Royal House Oy subscribed for 368,000 new
shares issued by the company. The subscription price of the shares was EUR
10.60 per share, which was the weighted average price during the five days of
stock exchange trading preceding the day the agreement was concluded.
Apartment sales
During the period under review, the company sold a total of 29 apartments from
twelve different housing companies. The debt-free selling prices of the
apartments totalled EUR 2.9 million. The sales of apartments picked up slightly
during the autumn, and the apartment sales during the fourth quarter totalled
EUR 0.9 million. In addition, the company sold two plots during the period, the
aggregate selling price of which was EUR 2.75 million. The housing companies
located on the plots concluded leases with the new owner. The sales from the
investment portfolio totalled EUR 5.7 million. The brokerage fees for the sales
amounted to EUR 115,000
In accordance with the company's investment strategy, the aim is to annually
sell apartments for 10 per cent of the value of the investment properties on
the company's opening statement of financial position. The sales of apartments
are implemented by selling apartments released from rental use individually. In
2014, the sales of investment properties corresponded to slightly more than 7%
of the value of investment properties on the opening statement of financial
position.
Investment properties on 31 December 2014
The fair value of investment properties at the end of the period totalled EUR
130,6 million (31 December 2013: EUR 79.2 million). Orava Residential REIT had
a total of 1,318 apartments on 31 December 2014 (31 December 2013: 791), the
aggregate leasable surface area of which was approximately 82,200 m2 (31
December 2013: 50,100 m2). The apartments were located at 63 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 (EUR at fair values)
31 Dec 2014 31 Dec 2013
Newer (1990 ->) 58% 56%
Older (- 1989) 42% 44%
Helsinki Region 43% 38%
Major towns 23% 19%
Medium-sized towns 34% 43%
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, but
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 2013 financial statements.
Consolidated profit for the period
Consolidated revenue for the period totalled EUR 15.6 million (2013: EUR 9.7
million). The revenue was divided into income from ordinary operations of EUR
6.5 million (2013: EUR 3.2 million) and capital gains of EUR 9.1 million (2013:
EUR 6.5 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 5.4 million (2013: EUR 2.2 million), of which
maintenance costs and annual repairs accounted for EUR 2.8 million (2013: EUR
1.5 million) and the performance-based management fee EUR 0.8 million (2013:
EUR 0.0 million). The growth in costs is mainly due to the expansion of the
operations.
Operating profit amounted to EUR 10.2 million (2013: EUR 7.4 million)
Financial income and expenses stood at EUR -1.4 million (2013: -639,000) and
taxes for the period at EUR 94,000 (2013: EUR 48,000).
Profit for the period amounted to EUR 8.7 million (2013: EUR 6.8 million).
Comprehensive income items totalled -270,000 (2013: EUR 183,000), and
comprehensive profit for the period was EUR 8.4 million (2013: EUR 6.9
million).
Major events 1 January - 31 December 2014
A total of 1,366,558 shares in Orava Residential REIT, the dividend rights of
which became equal to those of the listed shares in connection with the
dividend payment of December, were combined with the old shares in the
book-entry system and admitted to trading on 3 February 2014. The total number
of the company's shares subject to public trading after the combination was
4,288,707; the trading code is OREIT and the ISIN code is FI4000068614.
After the shares listed in February and admitted to trading, 25,687 shares
subscribed in the March 2013 share issue, the dividend rights of which differ
from the aforementioned shares, still remained unlisted. The company applied
for them to be admitted to public trading on the stock exchange list of the
Helsinki Stock Exchange after their dividend rights became equal to those of
the listed shares in December 2014.
On 6 February 2014, Orava Residential REIT's Board of Directors elected Pekka
Peiponen, M.Sc. (Econ.), as the CEO.
As decided by the General Meeting, a new condition was added to the rules for
real estate investment operations concerning the payment of the
performance-based management fee (a "high watermark" condition). According to
the new condition, the performance-based management fee will only be 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 company acquired a total of 118 apartments through transactions made and an
agreement concluded on 31 March 2014. Their aggregate debt-free purchase price
was EUR 12.7 million. A residential property of 74 apartments at Maauunintie 14
in Vantaa was purchased from VATROhousing Oy included in the SATO Group. Twenty
apartments at Asunto Oy Tampereen Ruuti completed in June 2014 were acquired
from Lujatalo Oy In addition, on 30 April 2014, a binding agreement was
concluded with Varma Mutual Pension Insurance Company on the purchase of the
share capital of Asunto Oy Helsingin Koirasaarentie 1 (24 apartments).
The company concluded a service agreement with Ovenia Oy at the end of June.
The service agreement covers housing management, property manager and apartment
rental services. Some of the properties acquired at the end of the period and
the apartments located in them were given for management by Ovenia Oy according
to the agreement.
The company acquired a total of 131 apartments from A. Ahlström Real Estate Ltd
and its subsidiaries through transactions implemented on 25 June 2014. Their
aggregate debt-free purchase price was EUR 4.1 million. The transaction
included the assignment of a contribution in kind of EUR 1.34 million, which
was paid with 104,415 new shares issued by the company and the subscription of
206,708 new shares in a directed issue allocated to the seller. The
subscription price of the new shares, EUR 12.82 per share, was the average
price of the company's share on the Helsinki Stock Exchange during the five
trading days preceding 25 June 2014, the date of implementation of the
transaction, weighted by share turnover, adjusted for the dividends decided by
the Annual General Meeting but not paid (EUR 0.56 per share). On 26 June 2014,
the company concluded a binding agreement on the acquisition of a total of 26
apartments from Pohjola Rakennus Oy Sisä-Suomi at a debt-free purchase price of
EUR 4.4 million.
The company concluded a convertible bond agreement of EUR 1 million with
Erikoissijoitusrahasto UBView on 26 June 2014. The convertible bond is
primarily intended for financing acquisitions of investment properties, and
secondarily for the company's general working capital purposes. Under the
agreement, both parties have the right to convert the capital of the
convertible bond into new shares in the company. The subscription price of the
share is the average stock exchange price weighted by the share turnover on the
date of presentation of the subscription notice for the new share in trading on
NASDAQ OMX Helsinki.
At the end of June, the company implemented directed issues of 418,923 shares,
prepared a prospectus and applied for the shares to be admitted to trading on
the main list of the Helsinki Stock Exchange (trading code OREITN0114). Trading
in the new shares started on 30 June 2014. In the directed issues, A. Ahlström
Real Estate Ltd subscribed for 311,123 shares and Nordea Bank Finland Plc for
7,800 shares at the subscription price of EUR 12.82 per share. In addition, the
company allocated a charge-free share issue of 100,000 shares to itself.
The acquisition of 26 apartments from Pohjola Rakennus Oy agreed in June 2014
was implemented according to plan on 27 August 2014. The apartments purchased
are located in three new properties: As Oy Tampereen Vuoreksen Emilia (14
apartments), As Oy Jyväskylän Ahjotar (8 apartments) and As Oy Jyväskylän
Kyläseppä (4 apartments). The apartments were without tenants at the time of
the acquisition.
An agreement on the market guarantee for new shares (trading code: OREITN0114)
was concluded with Nordea Bank Finland Plc, and the market guarantee according
to the agreement began on 7 July 2014. Under the agreement, Nordea Bank Finland
Plc will provide a purchase and sale offer for a new share in Orava Residential
REIT so that the largest allowed difference between the purchase and sale offer
is 4% of the purchase offer. The offers shall include at least a number of
shares the value of which corresponds to EUR 4,000.
On 6 August 2014, Orava Residential REIT signed a second convertible bond of
EUR 1 million in accordance with the terms and conditions of the previous bond
(26 June 2014) with Erikoissijoitusrahasto UBView. The 80,000 new shares
allocated by Orava Residential REIT to itself in a charge-free issue on 7
August 2014 were recorded in the Trade Register on 15 August 2014. After the
issue, the number of the company's shares totalled 4,813,317 shares.
On 29 September 2014, Orava Residential REIT signed a convertible bond of EUR 1
million in accordance with the terms and conditions of the previous bond (26
June 2014) with Erikoissijoitusrahasto UBView.
The company acquired 58 apartments from Skanska at a debt-free price of EUR
13.5 million through a binding agreement concluded on 30 September 2014. The
apartments acquired are new and located in Espoo, Kirkkonummi, Järvenpää,
Tampere, Lempäälä and Raisio. The apartments were acquired without tenants.
Through a transaction concluded on 30 September 2014, the company acquired 54
apartments from A. Ahlström Real Estate Ltd in Kotka at an aggregate debt-free
purchase price of EUR 1.45 million. The transaction was financed through a
directed issue allocated to A. Ahlström Real Estate Ltd, where A. Ahlström Real
Estate Ltd subscribed for 114,806 new shares issued by the company. The
subscription price of the new shares was EUR 12.63 per share, which was the
weighted average price during the five days of stock exchange trading preceding
the beginning of the subscription period. In addition, the company allocated a
charge-free share issue of 80,000 shares to itself. The new shares did not
entitle their holders to dividends paid during 2014.
The 114,806 shares allocated by Orava Residential REIT to A. Ahlström Real
Estate Ltd on 30 September 2014 in connection with a property acquisition and
the 80,000 new shares allocated to the company itself in a charge-free issue
were recorded in the Trade Register on 8 October 2014. After the issues, the
number of the company's shares totalled 5,008,123. NASDAQ OMX Helsinki Oy ("the
Helsinki Stock Exchange") approved Orava Residential REIT's listing application
concerning the issued shares. The shares became subject to trading on 10
October 2014. The trading code of the shares on the stock exchange list of the
Helsinki Stock Exchange was OREITN0114.
The shares assigned by the company in accordance with the convertible bond
agreements concluded by the company in June and August were recorded under the
company's equity items on 8 October 2014. The increase in the share capital was
EUR 1.6 million, in addition to which the company's reserve for invested
unrestricted equity was increased by EUR 0.4 million. After the increases, the
company's share capital was EUR 49,057,130.00. After the registration of the
number of shares, the imputed net asset value per share was EUR 12.27
calculated using figures at the end of September.
The transaction including 59 apartments agreed with Skanska Rakennus Oy in
September 2014 was paid according to plan on 29 October 2014 The apartments
purchased are located in six new properties: As Oy Espoon Albert (4
apartments), As Oy Kirkkonummen Tammi (14), As Oy Järvenpään Saundi (8), As Oy
Härmälänrannan Nalle (3), As Oy Lempäälän Tikanhovi (17) and As Oy Raision
Valonsäde (13). The apartments were without tenants at the time of the
acquisition.
On 28 November 2014, the company concluded a binding agreement on the
acquisition of Asunto Oy Kirkkonummen Kummikallio. The property includes 84
apartments. The purchase price of EUR 2.7 million will be paid in its entirety
with new shares in the company's directed issue allocated to Osuusasunnot Oy.
The subscription price of the shares, EUR 11.33 per share, was the weighted
average price of the share during the five days of trading on the Helsinki
Stock Exchange preceding the date of concluding the agreement.
The company updated its strategy for 2015 on 17 December 2014. The strategic
financial objectives remained unchanged: the targeted total return on the share
shall be at least 10% p.a., the targeted dividend return shall be 7-10% p.a. on
net assets per share, and the crediting rate shall be approximately 50%. In
addition to the financial targets, the main strategic targets are: increasing
shareholders' equity to EUR 90 million in 2015 and to EUR 200-300 million in
the medium term, diversifying the acquisition of debt financing, raising the
economic occupancy rate to more than 95%, dropping property management costs to
5% and repair costs to 10% below the statistical benchmark, and increasing the
amount of apartment sales to approximately 10% of the value of investment
properties on the opening statement of financial position. In addition, the
regional and age distribution targets for portfolio management were updated,
and the acquisition criteria for apartments were specified further.
On 31 December 2014, the company concluded a binding agreement on the
acquisition of Asunto Oy Rovaniemen Rekimatka 16-18 and Asunto Oy Rovaniemen
Rekimatka 29. The properties include a total of 80 apartments. The purchase
price of EUR 4.0 million was paid with new shares issued by the company in a
directed issue allocated to Royal House Oy. The subscription price of the
shares, EUR 10.60 per share, was the weighted average price of the share during
the five days of trading on the Helsinki Stock Exchange preceding the date of
concluding the agreement.
In the fourth quarter, the company continued concluding convertible bond
agreements in accordance with the terms and conditions of the previous
convertible bond agreements. Convertible bond agreements were concluded to a
total amount of EUR 2.0 million, of which EUR 1.99 million was converted by 31
December 2014. Under the terms and conditions of the convertible bonds
concluded by the company, the company has assigned a total of 418,614 of its
shares in conversions of its convertible bonds during the period under review.
At the end of the period, the company possessed 39,386 treasury shares.
Events after the financial period
The 500,000 shares allocated to the company itself in a charge-free directed
issue on 17 December 2014 were recorded in the Trade Register on 5 January
2015. The company may use the shares allocated to it to strengthen the capital
structure, develop its business operations and expand its ownership base
through both acquiring investment properties and issuing convertible bonds.
After the issue, the number of the company's shares totalled 5,706,123. On 19
January 2015, the company 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. After the listing, the total number of the
company's listed shares was 5,253,923.
On 23 January 2015, the company specified the result estimate for the fourth
quarter. Orava Residential REIT estimated in its interim report for the third
quarter published on 7 November 2014 that the financial result for the fourth
quarter is expected to remain weaker than that for the third quarter. The
comprehensive profit for the third quarter was EUR 1.9 million. The company's
further specified estimate of the result for the fourth quarter was EUR 1.7-2.3
million.
On 23 January 2015, the company announced that it is investigating
possibilities for the implementation of a financing arrangement of an estimated
EUR 40 million. The arrangement would consist of a credit facility of an
estimated EUR 15 million, which would be used to finance the acquisition of new
properties, and a covered bond of an estimated EUR 25 million, which would
mainly be directed to domestic institutional investors and whose purpose would
be to refinance the company's existing loans and promote the expansion of the
company's business operations.
The Financial Supervisory Authority approved the company's prospectus, which is
related to the listing of a total of 1,056,122 shares, on 23 January 2015. 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). The company also filed an application with the Helsinki Stock Exchange
concerning the admission to trading of the shares subscribed in the directed
issue allocated to Osuusasunnot Oy and the charge-free shares allocated to the
company itself, in total 688,122 shares, on the stock exchange list of the
Helsinki Stock Exchange with the trading code OREIT. Trading in the shares in
question started on 27 January 2015. The ISIN code of the shares listed is
FI4000068614.
The 368,000 shares allocated to Royal House Oy were recorded in the Trade
Register on 11 February 2015 and applied to be admitted to trading on the
Helsinki Stock Exchange in connection with the implementation of the
transaction on 9 February 2015. In addition, the company allocated a
charge-free share issue of 200,000 shares to itself. The shares allocated to
the company itself do not entitle their holders to dividends to be paid from
the result for 2014 in 2015. After the aforementioned shares have been
registered, the number of the company's registered shares totals 6,510,045, and
the company's registered share capital is EUR 56,376,500.
On 10 February 2015, the company implemented a transaction for 22 apartments
with Skanska Rakennus Oy at a debt-free purchase price of EUR 4.6 million. The
apartments purchased are located in two new properties, one in Mikkeli (12
apartments) and the other in Pori (10). The apartments were without tenants at
the time of the acquisition.
At its meeting on 11 February 2015, the Board of Directors allocated 39,952
shares to the management company Orava Funds plc. The subscription price of the
shares was the weighted average price during the last five days of stock
exchange trading in 2014. Orava Funds plc set off the payment of the
subscription price against its performance-based management fee receivable of
EUR 423,491.20 to be paid in shares.
Dividend
2014
The Board of Directors proposes to the Annual General Meeting that a total of
EUR 1.20 per share be distributed from the result for 2014 in dividends and
that the Board of Directors be authorised to decide on the amounts of dividends
to be paid in each quarter.
Future outlook
Orava Residential REIT estimates that it has reasonably good preconditions for
maintaining good profitability in 2015 and achieving the targeted total return
of 10 per cent on shareholders' equity.
The value of the apartments in the investment portfolio is expected to remain
at the same level or at the end of period to start increasing moderately as a
result of the predicted strengthening of the overall economy. The rental income
is estimated to rise slightly, as we believe that we can increase the economic
occupancy rate compared with the previous year. The result impact of the
acquisition of properties 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, 11 February 2015
Orava Residential Real Estate Investment Trust plc
Board of Directors
Additional information
Pekka Peiponen, CEO, tel. +358 (0)10 420 3104
Veli Matti Salmenkylä, CFO, tel. +358 (0)10 420 3102
Appendix: Finnacial Statements Bulletin 2015
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