2015-11-12 07:00:01 CET
2015-11-12 07:00:05 CET
REGLERAD INFORMATION
Orava Asuntorahasto Oyj - Interim report (Q1 and Q3)
FINANCIAL RESULT OF ORAVA RESIDENTIAL REIT FOR JANUARY-SEPTEMBER 2015
Orava Residential REIT plc
STOCK EXCHANGE RELEASE 12 NOVEMBER 2015 AT 8:00 a.m.
FINANCIAL RESULT OF ORAVA RESIDENTIAL REIT FOR JANUARY-SEPTEMBER 2015
1 July - 30 September 2015
- Revenue EUR 3.8 million (1 July - 30 September 2014: EUR 4.4 million)
- Comprehensive profit: EUR 2.0 million (EUR 1.9 million)
- Earnings per share: EUR 0.25 (EUR 0.41)
- Economic occupancy rate: 91.1% (89.7%)
- Gross rental yield: 6.7% (7.0%)
- Net rental yield: 4.0% (4.0%)
- Profit from assignments and changes in fair value: EUR 1.2 million (EUR
2.6 million)
- Total dividends distributed during the period under review: EUR 0.30 per
share (EUR 0.28 per share)
1 January - 30 September 2015
- Revenue: EUR 13.1 million (1 January - 30 September 2014: EUR 12.8
million)
- Comprehensive profit: EUR 6.1 million (EUR 6.7 million)
- Earnings per share: EUR 0.81(EUR 1.55)
- Economic occupancy rate: 90.6% (88.2%)
- Gross rental yield: 6.8% (6.7%)
- Net rental yield: 3.9% (4.1%)
- Profit from assignments and changes in fair value: EUR 5.8 million (EUR
8.2 million)
- Total dividends distributed during the period under review: EUR 0.90 per
share (EUR 0.84 per share)
Net assets per share of Orava Residential REIT plc amounted to EUR 11.88
(adjusted), while they were EUR 12.02 (adjusted) at the beginning of the year.
The company has continued growing, and the value of its investment properties
rose to EUR 178.9 million at the end of the period under review (31 December
2014: EUR 130.7 million).
CEO's comments:"Orava Residential REIT's financial result for the third quarter was almost in
accordance with its objectives.
The status in the housing market continued to be listless in Finland and, as a
whole, the value of apartment holdings in the portfolio of the Residential REIT
in the quarter turned from the zero growth in the second quarter into a decline
of 0.8% in the third quarter. However, the market situation enabled profitable
acquisition of new apartments, and the wholesale discounts for acquisitions
compensated for the fall in the value of the old portfolio. In the third
quarter, the company agreed on the acquisition of 42 apartments in 13 different
properties at a total value of EUR 10.3 million. The fair value of the
investment properties owned by the Residential REIT increased from EUR 166.2
million at the end of June to EUR 178.9 million at the end of September. The
financial result was also improved by the cancellation of performance-based
management fees expensed in advance in the first two quarters, because at the
level of the stock exchange price of the Residential REIT at the end of
September, no performance-based management fee will be paid for the current
year.
In the third quarter, the gross rental yield of the portfolio fell by a tenth
of a per cent compared with the second quarter to 6.7%, net rental yield
increased to 4.0%, and the economic occupancy rate continued growing to 91.1%.
The situation in apartment sales has continued to be stagnant, as a result of
which apartment sales were supplemented by selling the plots of five housing
companies owned by the Residential REIT. Sales from the investment portfolio
have totalled EUR 4.8 million during the current year.
The maintenance and repair costs of investment properties in relation to the
value of the portfolio were 2.7 per cent converted to the annual level.
The number of Orava Residential REIT's shareholders increased from
approximately 6,800 at the beginning of August to over 7,200 at the end of
October. Trading in the company's shares on the Helsinki Stock Exchange has
continued to be active; the average daily turnover in January-September was EUR
285,000 (EUR 251,000 a year before).
Shareholders have been paid a total of EUR 0.90 per share in dividends on the
last business days of March, June and September according to the decision of
the Annual General Meeting. The next dividend payments will take place at the
end of December.
The company continues to estimate that it has reasonable preconditions for
maintaining good profitability and achieving the targeted total return of 10
per cent on shareholders' equity."
Operating environment
National economy
GDP growth is estimated to remain at between -0.2% and +0.3% in Finland this
year and to settle at 0.7-1.2% next year. The growth in private consumption - a
key factor from the point of view of the housing market - is estimated to be
0.3-0.8% during the current year and at approximately the same level in 2016,
i.e. 0.3-0.9%. Market interest rates in the euro area are exceptionally low,
and short-term market rates are also expected to remain below 1% for
approximately 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.
We continue to estimate that the housing market will slowly start to strengthen
as of next winter.
Demand in the housing market
During July-September 2015, households drew down EUR 4.0 billion in new
mortgages, 5% more than a year previously, according to statistics from the
Bank of Finland. The euro-denominated mortgage base totalled EUR 91.4 billion
at the end of September, and the annual growth in the mortgage base was 2.2%.
The average marketing period for old apartments in the country overall
according to the Finnish Etuovi.com marketing service increased from 111 days
in June to 117 days in September, while it had been 112 days in September in
the previous year.
No material change has taken place in the demand for apartments in the third
quarter.
Supply in the housing market
According to Statistics Finland, building permits for apartment blocks were
granted for 2,213 apartments in August, which was 76% more than a year
previously. Correspondingly, in January-August, building permits for apartment
blocks were granted for a total of 13,053 apartments, or 7% more than a year
previously. The annual change in the sliding annual sum of building permits
granted for apartment blocks was +12%.
The three-month change in the housing construction volume index that describes
the value of ongoing new construction was +32% in August, and the change
year-on-year was -6%.
According to the August confidence indicator survey of the Confederation of
Finnish Industries, the balance figure for construction production for the past
three months was +32 points in the second quarter of the year, while it was -12
points in the previous quarter and +15 points a year before. The balance figure
for the three-month production expectation was +27 points, compared to +20
points in the previous quarter and +2 points a year before. The number of
unsold residential apartments compared to normal fell from +24 in the first
quarter of the year to +9; a year ago, the balance figure was +29 points.
The supply in the housing market has recently begun to show signs of
improvement.
Prices, rents and returns in the housing market
In the third quarter of 2015, the rents of non-subsidised apartments increased
by 2.9 per cent year-on-year. The change in the prices of apartments during the
third quarter was -0.5% compared with the situation a year previously. The
change in housing prices from the previous quarter was 0.0%, which we estimate
to correspond to an increase of approximately 1.2% when converted seasonally
adjusted to the annual level. 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 third quarter was 15.3. The 40-year average for the ratio of
square metre prices to annual rents in Finland is 16.7.
We expect housing prices in the whole country to start rising slightly during
the next 12 months and the growth rate in rents for non-subsidised apartments
to start accelerating slightly if the market interest rate expectations and
economic forecasts prove true with regard to their essential components
affecting the housing market.
Rental operations
The occupancy rates of rental operations rose in the third quarter compared
with both the first half of the year and the corresponding period in the
previous year. We have managed to increase the occupancy rate as planned with
regard to apartments acquired without tenants during 2014 and the first half of
2015. The economic occupancy rate of the third quarter was 91.1%. In the
future, any increase in the occupancy rate will be hindered by the acquisition
of apartments without tenants and the rental market, which has continued to be
weak in various locations.
1 Jan - 30 Sep 2015 1 Jan - 30 Sep 2014
Gross rental yield, % 6.8 6.7
Net rental yield, % 4.0 4.1
Economic occupancy rate, % 90.6 88.2
Operational occupancy rate, % 90.3 88.8
Tenant turnover/month, % 2.8 2.2
The economic occupancy rate, adjusted so that acquisitions in the past six
months have been eliminated, was 91.4%.
At the end of the period, there were a total of 1,639 residential apartments
(2014: 1,081). There were 1,294 leases at the end of the period (2014: 963) and
117 apartments were for sale (2014: 43). Approximately 98% of the entire lease
base for residential apartments is in agreements valid until further notice. A
total of 149 agreements were terminated during the period under review (2014:
70).
Acquisitions
Acquisitions in the third quarter
Debt-free Directed
purchase price Debt issues (1,000 Apartments
Time Property (EUR million) (EUR million) shares) (qty)
30 Sep 2015 Apartments from 13 10.3 7.9 - 42
properties
(Helsinki, Espoo,
Hyvinkää, Turku,
Raisio, Oulu, Kuopio,
Rovaniemi, Vaasa)
TOTAL 10.3 7.9 - 42
On 30 September 2015, the company acquired a total of 42 apartments from YIT
Construction Ltd through a binding agreement at a debt-free purchase price of
10.3 million. The apartments are located in a total of 13 properties in
Helsinki (3 apartments), Espoo (2), Hyvinkää, Turku, Raisio, Oulu, Kuopio,
Rovaniemi and Vaasa (2). The apartments were without tenants at the time of
acquisition.
Apartment sales
In the difficult market conditions, the apartment sales did not quite reach the
level of the first half of the year. In the third quarter, the company sold a
total of nine apartments from eight different housing companies. The debt-free
selling prices of the apartments totalled EUR 0.7 million. The brokerage fees
for the sales amounted to EUR 29,000. The total sales in the first half of the
year, EUR 2.2 million, exceed the sales in the corresponding period in the
previous year (1 January - 30 September 2014: EUR 2.0 million).
Apartment sales were supplemented by selling five plots at a selling price
totalling EUR 2.6 million. The plots were located in Kerava, Lahti (2 plots),
Kaarina and Riihimäki. The housing companies located on the plots concluded
leases with the new owner. The total sales from the investment portfolio at the
end of the period under review were EUR 4.8 million (1 January - 30 September
2014: EUR 5.5 million).
Investment properties on 30 September 2015
The fair value of investment properties at the end of the period totalled EUR
178.9 million (31 December 2014: EUR 130.7 million). Orava Residential REIT had
a total of 1,639 apartments on 30 September 2015 (31 December 2014: 1,318); the
aggregate surface area of the apartments was approximately 102,000 m² (31
December 2014: EUR 82,200 m2). The apartments were located at 93 different
housing companies, and the company's holding was 100% in 17 of the cases. More
detailed information on the investment properties is presented in the tables
section.
Age and regional distributions of the investment portfolio
30 Sep 2015 30 Sep 2014
Newer (1990 onwards) 64% 61%
Older (up to 1989) 36% 39%
Helsinki Region 37% 43%
Major cities 31% 24%
Medium-sized towns 32% 33%
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.
The Group's financial result for the third quarter
The Group's revenue for the third quarter totalled EUR 3.8 million (2014: EUR
4.4 million). The revenue was divided into income from ordinary operations of
EUR 2.6 million (2014: EUR 1.8 million) and capital gains of EUR 1.2 million
(2014: EUR 2.6 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 1.1 million (2014: EUR 1.9 million), of which
maintenance costs and annual repairs amounted to EUR 1.3 million (2014: EUR 0.7
million).
Operating profit amounted to EUR 2.7 million (2014: EUR 2.5 million).
Financial income and expenses totalled EUR -0.7 million (2014: EUR -475,000),
and taxes for the period totalled EUR -24,000 (2014: EUR 6,000).
Profit for the third quarter was EUR 2.0 million (2014: EUR 2.0 million).
Comprehensive income items amounted to EUR 0 (2014: EUR -77,000), and the
comprehensive profit for the period totalled EUR 2.0 million (2014: EUR 1.9
million).
Financing
Financial expenses (net) totalled EUR 2.0 million during the period 1 January -
30 September 2015 (2014: EUR 1.2 million).
Orava Residential REIT issued a EUR 20 million bond on 1 April. The bond will
fall due on 1 April 2020, and it has a fixed coupon of 4.25% In the same
connection, the parent company repaid the variable-rate loans of EUR 16.9
million taken out from Danske Bank and concluded a credit limit agreement of
EUR 15 million with Danske Bank.
The interest-bearing loans of Orava Residential REIT and the company loans
allocated to the shares in housing companies totalled EUR 84.7 million on 30
September 2015 (31 December 2014: EUR 60.0 million).
In addition to the loans, the long-term liabilities in the statement of
financial position also include EUR 591,000 in rental deposits paid by tenants
(31 December 2014: EUR 478,000).
Shares and shareholders of Orava Residential REIT
In the third quarter, the company implemented directed issues of a total of
69,717 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). On 31
July 2015, the company allocated 69,717 shares to Suomen Vuokrakodit Oy related
to an acquisition communicated on 30 June 2015, of which 35,926 shares do not
provide entitlement to dividends to be paid from the result for 2014 during
2015, but they will provide entitlement to dividends in 2016 and subsequent
years.
The company has allocated and will allocate shares to itself in charge-free
share issues, which it may use 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. During the period 1 January - 30
September 2015, the company concluded 29 convertible bond agreements worth in
total EUR 12.5 million, of which EUR 12.0 million was exchanged for 1,061,618
shares in the company and recognised in the company's shareholders' equity. In
addition to these agreements, the company's equity has grown in the period
under review by EUR 9.5 million through directed issues. The company's
shareholders' equity is EUR 91.2 million (31 December 2014: EUR 69.9 million).
At the end of the period, the company had 282,366 shares in its possession that
it had allocated to itself. More detailed information on the shareholders'
equity and convertible bonds is presented in the tables section.
The trading codes of the company's shares are OREIT and OREITN0115. During the
period under review, the average turnover of shares was approximately EUR
285,000.
The company had more than 7,200 shareholders at the end of October.
LIST OF OWNERS ON 30 OCTOBER 2015, TEN LARGEST
Shareholder Number of shares %
Royal House Group*** 489,701 6.2
Maakunnan Asunnot Oy* 436,640 5.5
Godoinvest Oy** 229,360 2.9
Yli-Torkko Erkki 135,205 1.7
Osuusasunnot Oy 103,769 1.3
Vähävara Oy 92,000 1.2
Rannikko Reino 91,500 1.1
Head Nordic Select Dividend Sijoitusrahasto 58,644 0.7
Orava Funds plc**** 45,639 0.6
Ström Leif 45,100 0.6
Total 1,727,558 21.7
* Company 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 under review 1
January - 30 September 2015 amounted to EUR 694,000 (2014: EUR 427,000).
On the basis of the company's net assets per share, share price and dividend
distribution realised in 2015, no performance-based management fee has been
booked (2014: EUR 1.6 million). The performance-based management fee will be
paid after the end of 2015 on the basis of the company's realised net assets
per share or the adjusted share price in March 2016.
During the period, Newsec Asset Management Oy and Ovenia Oy were paid a total
of EUR 519,000 for financial administration and other support activities and
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
The Board of Directors of Orava Residential REI is composed of six members:
Tapani Rautiainen, Veli Matti Salmenkylä, Jouni Torasvirta, Timo Valjakka,
Mikko Larvala and Patrik Hertsberg (as of 19 March 2015) as well as 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
sixteen times during the period under review. The Board members' rate of
attendance at Board meetings was 96%.
Orava Residential REIT's auditor is PricewaterhouseCoopers Oy, with Tuomas
Honkamäki, 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 30 September
2015, a total of 4,548,426 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 current rules for real estate investment operations are available on the
company's website at www.oravaasuntorahasto.fi, and they are included as an
appendix.
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 - 30 September 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 5 January 2015. The trading
code of the shares is OREIT, and the ISIN code is FI4000068614. After the
listing, the number of the company's listed shares totalled 5,253,923.
On 23 January 2015, the Financial Supervisory Authority approved the company's
prospectus, which was related to the listing of a total of 1,056,122 shares.
The shares were 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 since 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 real estate 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 real estate investment operations (section
11, paragraph 3) were specified with regard to the determination of the
performance-based 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 shall provide entitlement to dividends as of 1 April 2015 and 4,500,000
shares shall 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 nine 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 to 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 OMX Helsinki preceding the subscription.
Orava Residential REIT issued a EUR 20 million bond 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 it has a fixed coupon of 4.25%. 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 totalled 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
company 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 since 21 April 2015. After the
listing, the number of the company's listed shares totalled 6,754,238.
The transaction of 53 residential apartments agreed with Skanska Talonrakennus
Oy in March 2015 was completed on 28 April 2015.
On 29 May 2015, the company agreed with Rakennusliike Leimarakentajat Oy on the
construction of 52 apartments in Hämeenlinna. The apartments to be built will
be completed by the end of 2016. The company is financing the building project
with directed issues allocated to Rakennusliike Leimarakentajat Oy and company
loans taken out for the company established. The total value of the directed
issues allocated to Rakennusliike Leimarakentajat Oy during the building period
is approximately EUR 1.8 million. At the time of the agreement, Rakennusliike
Leimarakentajat Oy had subscribed to a total of 50,450 shares at EUR 0.6
million. The subscription price of the shares was the weighted average price
during the five days of stock exchange trading on the NASDAQ OMX Helsinki
preceding the subscription. The remainder of the directed issues will be
subscribed after the project has been completed.
The 200,000 shares that Orava Residential REIT plc allocated to itself in the
charge-free share issue on 4 June 2015 were recorded in the Trade Register on 9
June 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 recorded in the Trade
Register totalled 6,954,238. Of the shares allocated to the company itself, the
ISIN code of 150,000 shares is FI400068614 (trading code OREIT), and the ISIN
code of 50,000 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 company submitted a listing application to the Helsinki Stock Exchange
concerning the aforementioned 200,000 shares, and the new shares have been
subject to trading on the stock exchange list since 10 June 2015. After the
listing, the number of the company's listed shares totalled 6,954,238.
The 500,000 shares that Orava Residential REIT plc allocated to itself in the
charge-free share issue on 17 June 2015 were recorded in the Trade Register on
23 June 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 recorded in the
Trade Register totalled 7,454,238. Of the shares allocated to the company
itself, the ISIN code of 350,000 shares is FI400068614 (trading code OREIT),
and the ISIN code of 150,000 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 50,450 shares allocated by the company to Rakennusliike Leimarakentajat Oy
in May 2015 and the 377,502 shares assigned by the company on the basis of
convertible bond agreements concluded between 1 March and 31 May 2015 were
recorded in the company's shareholders' equity items on 23 June 2015. The
increase in share capital is EUR 4.3 million, in addition to which EUR 0.8
million was booked in the company's reserve for invested unrestricted equity.
After the increases, the company's share capital was EUR 67,057,020.00.
Through a transaction concluded on 29 June 2015, the company acquired 46
apartments from Asunto Oy Vantaan Kaakkoisväylä 4 at a purchase price of EUR
4.15 million. The transaction was financed through a directed issue allocated
to Maakunnan Asunnot Oy, where Maakunnan Asunnot Oy subscribed to 369,218 new
shares issued by the company. Of these shares, 192,889 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 OMX Helsinki preceding the subscription.
On 30 June 2015, the company concluded a binding agreement to acquire a total
of 44 apartments from Asunto Oy Lahden Jukolan Aapo and Asunto Oy Lahden
Jukolan Tuomas at a debt-free purchase price of EUR 7.1 million. The
transaction will be financed through a directed issue allocated to Suomen
Vuokrakodit Oy, where Suomen Vuokrakodit Oy has undertaken to subscribe to
138,163 new shares issued by the company. Of these shares, 71,684 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 OMX Helsinki preceding the subscription.
On 30 June 2015, the Financial Supervisory Authority approved the company's
prospectus, which is related to the listing of a total of 937,664 shares. The
shares are related to the directed issues to Maakunnan Asunnot Oy (369,218
shares) communicated on 29 June 2015 and Suomen Vuokrakodit Oy (68,446 shares)
communicated on 30 June 2015, and the charge-free directed issue allocated to
the company itself (500,000 shares) communicated on 23 June 2015 . In the
directed issues allocated to Maakunnan Asunnot Oy and Suomen Vuokrakodit Oy,
the subscription price of the new shares was the average stock exchange price
on the Helsinki Stock Exchange weighted by the share turnover during the five
trading days preceding 29 June 2015. The subscription prices of the shares were
EUR 11.65 per share (trading code OREIT) and EUR 10.65 per share (trading code
OREIN0115).
On 1 July 2015, the company submitted a listing application to the Helsinki
Stock Exchange concerning the admission of the shares subscribed in the
directed issue allocated to Maakunnan Asunnot Oy on 29 June 2015 and the shares
allocated to the company itself and communicated on 23 June 2015, i.e. a total
of 869,218 shares, to trading on the stock exchange list of the Helsinki Stock
Exchange. Trading in the new shares started on 6 July 2015. Of the shares,
526,329 were applied to be admitted to trading on the stock exchange list with
the trading code OREIT (ISIN code FI4000068614) and 342,889 with the trading
code OREITN0115 (ISIN code FI4000148036).
The Financial Supervisory Authority approved the supplement to the company's
prospectus on 2 July 2015. The prospectus estimated that the 937,664 shares
will be applied to be admitted to trading on the stock exchange list of the
NASDAQ OMX Helsinki on or around 3 July 2015. The 68,446 shares subscribed by
Suomen Vuokrakodit Oy will be applied to be admitted to trading later.
The 369,128 shares allocated by the company to Maakunnan Asunnot Oy on 29 June
2015 were recorded in the Trade Register on 3 July 2015. The increase in the
share capital was EUR 3.7 million. After the increases, the number of the
company's shares recorded in the Trade Register totalled 7,823,456 and the
company's share capital was EUR 70,749,200.00.
Orava Residential REIT allocated a new share issue to Suomen Vuokrakodit Oy on
31 July 2015. Suomen Vuokrakodit Oy has undertaken to subscribe to 69,717 new
shares issued by the company. Of these shares, 35,926 do not provide
entitlement to dividends paid in 2015. The subscription price of the shares is
the weighted average price during the five days of stock exchange trading on
the NASDAQ OMX Helsinki preceding 31 July 2015. The directed issue is related
to the binding agreement communicated on 30 June 2015, by which Orava
Residential REIT acquired a total of 44 apartments from Asunto Oy Lahden
Jukolan Aapo and Asunto Oy Lahden Jukolan Tuomas at a debt-free purchase price
of EUR 7.1 million.
The company's auditor, PricewaterhouseCoopers Oy, has appointed Tuomas
Honkamäki, APA, as the company's chief auditor as of 11 August 2015.
The Financial Supervisory Authority approved the supplement to the company's
prospectus on 24 June 2015. The prospectus was supplemented with the changed
information concerning the transaction concluded with Suomen Vuokrakodit Oy,
and reference was made in the prospectus to the company's interim report for 1
January - 30 June 2015.
The 138,163 new shares allocated by Orava Residential REIT plc to Suomen
Vuokrakodit Oy in directed issues on 29 June 2015 and 31 July 2015 were
recorded in the Trade Register on 24 August 2015. After the issue, the number
of the company's shares recorded in the Trade Register totalled 7,961,619. The
company submitted a listing application to the Helsinki Stock Exchange
concerning the aforementioned 138,163 shares, and the new shares have been
subject to trading on the stock exchange list since 26 August 2015. After the
listing, the number of the company's listed shares totalled 7,961,619.
On 30 September 2015, the company acquired a total of 42 apartments from YIT
Construction Ltd through a binding agreement at a debt-free purchase price of
10.3 million. The apartments acquired are new, and they are located in
Helsinki, Espoo, Hyvinkää, Turku, Raisio, Oulu, Kuopio, Rovaniemi and Vaasa.
The apartments are not leased.
Through conditional agreements concluded on 30 September 2015, housing
companies owned by Orava Residential REIT sold five plots at a total selling
price of EUR 2.6 million. The plots are located in Kerava, Lahti, Kaarina and
Riihimäki. The completion of the transactions requires that pledge arrangements
are concluded.
Events after the financial period
The plot transactions agreed by the housing companies owned by Orava
Residential REIT on 30 September 2015 were completed in November after pledge
arrangements.
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 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 2015, 1st dividend EUR 0.30
30 Jun 2015, 2nd dividend EUR 0.30
30 Sep 2015, 3rd dividend EUR 0.30
Total EUR 0.90
Future outlook
Orava Residential REIT continues to estimate that it has reasonable
prerequisites for maintaining good profitability in 2015 and achieving the
targeted total return of 10 per cent on shareholders' equity.
The change in the value of apartments in the investment portfolio is expected
to remain close to zero during the rest of the year. Rental income is estimated
to remain at the level of the three first quarters of the year, taking into
account the impact on the occupancy rate of the apartments acquired without
tenants in the autumn. The intention is to increase the impact of the
acquisition of properties on the result during the fourth quarter compared with
the third quarter. The ratio of maintenance and repair costs to the value of
investment assets is expected to remain approximately at the level of the
previous year.
Helsinki, 11 November 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
Appendices
Interim report 1 January - 30 September 2015
© 2024 Nasdaq, Inc. All Rights Reserved |