Kojamo plc Announces Acquisition of Housing Portfolio
Kojamo plc, along with its subsidiary Lumo Kodit Oy, has entered into a significant agreement to acquire a housing portfolio owned by Varma Mutual Pension Insurance Company. This strategic acquisition marks a crucial step in reinforcing Kojamo's position in the Finnish residential real estate market.
Details of the Acquisition
The housing portfolio includes 60 residential properties, totaling 4,761 apartments, primarily located in the metropolitan areas of Helsinki, Tampere, and Turku. The transaction's estimated value is approximately EUR 900 million and will be financed with a mix of cash and new shares issued by Kojamo at the time of closing.
Financial Highlights
Kojamo anticipates that the acquired portfolio will generate a stabilized annual rental income of around EUR 63 million. This income is projected to increase as the occupancy rate improves from the current 83 percent to the targeted occupancy aligned with Kojamo's existing rates. The potential for increased occupancy and rental income underlines the value of this acquisition.
Operator Efficiency and Market Positioning
The acquisition is expected to optimize Kojamo's operational efficiency and contribute positively to its EPRA Cost Ratio. By integrating the new properties into the Lumo brand and leveraging its advanced customer service capabilities, Kojamo aims to enhance the customer experience and ultimately boost shareholder value.
CEO Insights on the Acquisition
Reima Rytsölä, CEO of Kojamo plc, stated, "This transaction presents a unique opportunity for Kojamo to return to growth by acquiring a portfolio of significant size and strategic importance. These properties are situated in prime locations that are key growth areas in Finland. We are excited to strengthen our commitment to delivering value to our shareholders and improving our FFO per share as we enhance our portfolio. We welcome Varma's belief in Kojamo's capabilities and their participation in our journey. We also look forward to welcoming our new customers to Lumo services."
Varma's Perspective
Markus Aho, Deputy CEO of Varma, commented, "We have carefully reviewed our investment portfolio to determine efficient ways to invest in the Finnish residential market, especially in light of the upcoming pension reform. This transaction allows us to reinforce our ownership in Kojamo while continuing to support a stable and professional management of the housing portfolio. We trust that Kojamo will enhance the portfolio's performance moving forward."
Funding the Acquisition
Kojamo has issued 24,666,667 special rights to Varma, enabling them to subscribe for new shares at an agreed price of EUR 11.8090 each, reflecting a noteworthy premium over the share's recent trading average. Varma's total subscription price is set at EUR 291 million, which will be fulfilled by transferring a portion of the housing portfolio to Lumo Kodit and making a cash payment for the remainder.
Acquisition Financing
The funding for this substantial purchase also includes a senior unsecured acquisition financing facility worth EUR 600 million, arranged through major financial institutions. This acquisition facility is expected to be utilized through capital market debt financing, providing Kojamo with the necessary funds to manage this significant transition.
Transaction Conditions and Conclusion
The successful completion of the transaction is contingent upon meeting standard real estate transaction conditions, including regulatory approvals. Both parties aim to finalize the acquisition by April 2026, signaling a strategic commitment to enhancing the Finnish residential market.
Contact Information
For media inquiries, please reach out to Reima Rytsölä, CEO of Kojamo plc, by phone at +358 20 508 5077. Ville Raitio, Executive Vice President of Investments, can be contacted at +358 20 508 3012 for additional details on this transaction.
About Kojamo
Kojamo is Finland's largest private residential real estate company, committed to creating better urban housing solutions. With a focus on environmentally friendly practices, Kojamo strives to provide quality living experiences for city dwellers. Through the continuous development of its property portfolio, Kojamo aims to lead the market in providing optimal residential solutions while enhancing the value of its investments.
Frequently Asked Questions
What is the significance of Kojamo's acquisition?
The acquisition strengthens Kojamo's position in the market, enhances profitability, and supports growth in the Finnish residential sector.
How many properties are included in the portfolio?
The portfolio comprises 60 residential properties with a total of 4,761 apartments, located mainly in metropolitan areas.
What is the expected rental income from the portfolio?
Kojamo anticipates an annual rental income of around EUR 63 million once stabilization occurs.
What are the financing details of the acquisition?
The acquisition will be financed through a combination of cash, share issuance, and a EUR 600 million senior unsecured financing facility.
When is the acquisition expected to close?
The transaction aims to be finalized by April 2026, pending regulatory approvals.
