Creating better urban housing Jani Nieminen, CEO Kojamo plc SEB Real Estate & Financials Conference | 14 November 2019
Kojamo – Largest residential real estate company in Finland Kojamo’s portfolio as at 30 Sep 2019 5.4 72% 100% EUR Bn, fair of portfolio value of residential studios and one- investment portfolio bedroom properties apartments • Kojamo focuses on the seven Finnish growth centres and high-quality Oulu 4% Other areas in rental apartments, marketed under the Lumo brand Finland 2% Kuopio region 4% • Target to increase value of the investment portfolio to EUR 6 billion by the end of 2021 by building, converting, renovating and acquiring Jyväskylä region 4% properties Tampere region 11% Turku region 5% • Strong role in digital transformation of the housing industry Lahti region 3% Helsinki region 68% 2 Kojamo plc | Creating better urban housing | Jani Nieminen, CEO
Operating environment Business environment key figures 7.4 6.5 6.3 6.2 General operating environment 1.7 1.7 1.5 1.4 • Urbanisation proceeds and the significance of the 1.1 largest urban areas will increase 1.1 1.0 0.9 2018 2019E 2020E 2021E • Economic growth is forecasted to continue, but to slow GDP growth, % Unemployment, % Inflation, % down due to the weakening of the global economy. The slower growth of international trade and the economy is expected to be reflected in the growth of Finnish Population growth forecast 2019 – 2030 exports. Investments in residential construction are Helsinki expected to contract, but to remain at a good level 11.7% Capital region* 13.0% Helsinki region** 10.5% • The growth of private consumption is expected to Jyväskylä 7.1% continue, supported by the increasing income level and Kuopio 2.9% high employment. Growth will, however, be slowed by Lahti 0.3% the moderate acceleration of inflation Oulu 7.3% Tampere 11.7% Turku 8.5% Other areas -8.1% 3 Kojamo plc | Creating better urban housing | Jani Nieminen, CEO * Helsinki, Espoo, Kauniainen, Vantaa ** Capital region, Hyvinkää, Järvenpää, Kerava, Kirkkonummi, Mäntsälä, Nurmijärvi, Pornainen, Sipoo, Tuusula, Vihti Sources: General operating environment, Business environment key figures: Ministry of Finance, Economic Survey 10/2019; Population growth forecast: Statistics Finland, Population forecast 2019
Operating environment Industry key figures 2019E 2018 38,000 45,600 Residential start-ups, units 37,660 47,829 Building permits granted, annual*, units 1.2 2.2 Construction costs, % Residential production and price development Prices of old dwellings in the whole country, change, % 1.2 1.2 • The number of residential start-ups is estimated to decline Prices of old dwellings in the capital from record-high levels towards more normal production region, change, % 2.2 – 3.5 2.5 – 3.2 volumes, the majority of the drop in the volume of residential Rents of non-subsidised rental dwellings in construction will take place in the latter half of 2020 1.8 1.6 the whole country, change, % • As the rate of economic growth declines, new construction is Rents of non-subsidised rental dwellings in 2.0 – 2.8 2.3 – 2.6 the capital region, change, % estimated to focus increasingly on the largest urban areas In spite of slower economic growth, the continued trend of • Housing production need 2015 – 2040 urbanisation will maintain the need for new apartments. The level of residential production is estimated to be sufficient in Helsinki 16% Finland’s growth regions in 2019 and 2020, but there are Tampere 2% concerns regarding the adequacy of supply thereafter 3% Oulu 4% Turku 48% Accelerated urbanisation increases the demand for • Jyväskylä 7% apartments, which puts upward pressure on prices in growth Kuopio 9% Lahti centres Rest of Finland 11% 4 Kojamo plc | Creating better urban housing | Jani Nieminen, CEO * Rolling 12 months, August 2019 and 2018. Sources: Residential production and price development: Pellervo Economic Research PTT, Housing market 2019 forecast and Confederation of Finnish Construction Industries RT’s business survey, October 2019; Industry key figures: PTT, Tilastokeskus: Statistics Finland: Building and dwelling production 2019, August, RT; Housing production need: VTT, Need for housing 2015-2040
Operating environment Development of household sizes (% of all households) 45% 40% The popularity of rental housing increases 35% • The trend of regional divergence will accelerate in 30% the coming years and the significance of the 10 largest 25% urban areas will increase 20% • A growing number of households are choosing rental 1985 1996 2007 2018 housing, and living in non-subsidised rental apartments 1 person 2 persons 3+ persons will see the highest relative growth Development of rental household-dwelling • Urbanisation increases the demand for rental housing. units (% of all households) Those who move to growth centres increasingly see rental housing as an easy, safe and flexible choice 49.3% 48.3% 48.2% 47.1% • The growing demand for services is also reflected in 43.8% 43.0% 42.2% living preferences. Living-related needs can be 40.6% 40.7% 40.4% 40.2% 39.6% 37.7% increasingly satisfied by services instead of owning 37.3% 36.5% 36.7% Helsinki Helsinki Jyväskylä Kuopio Lahti Oulu Tampere Turku region* 2010 2018 * Helsinki, Espoo, Kauniainen, Vantaa, Hyvinkää, Järvenpää, Kerava, Kirkkonummi, Mäntsälä, Nurmijärvi, Pornainen, Sipoo, Tuusula, Vihti 5 Kojamo plc | Creating better urban housing | Jani Nieminen, CEO Sources: The popularity of rental housing increases: MDI’s population forecast 2040 and Pellervo Economic Research PTT, Housing markets 2019 forecast; Development of household sizes and rental household-dwelling units: Statistics Finland, Dwellings and housing conditions 2018
Key figures 1 – 9/2019 net rental income funds from operations (FFO) total revenue 187.2 106.1 280.3 M€ M€ M€ (EUR 267.7 million, (EUR 174.0 million, (EUR 81.8 million, +7.6%) +29.8%) +4.7%) fair value of investment profit excluding properties changes in value 1) profit before taxes gross investments 5.4 120.4 191.4 175.6 Bn € M€ M€ M€ (EUR 5.0 billion, (EUR 305.8 million, (EUR 112.1 million, (EUR 199.5 million, +7.6%) +7.5%) -42.6%) -4.1%) 6 Kojamo plc | Creating better urban housing | Jani Nieminen, CEO 1) Changes in value = Profit/loss on fair value of investment properties
Of the apartments ’ fair value 98.5 in the seven largest Finnish growth centres Apartment distribution, % Helsinki region 4.1% 2.3% 4.8% Fair Fair value Fair Tampere 4.9% Number of Financial value, (EUR value region Region apartments, occupancy 6.3% (EUR thousand / (EUR / units rate, % million) unit) sqm) Turku region 5.3% Helsinki 2,990 20,398 3,420 168 97.9% region 14.1% Oulu 58.2% Tampere 2,273 4,942 568 115 96.6% region Jyväskylä Fair value distribution, % 2,142 Turku region 1,848 225 122 97.3% 3.1% 1.5% 1,685 Oulu 2,220 197 89 96.1% 3.6% Kuopio region 4.1% 2,244 Jyväskylä 1,727 205 119 93.0% 3.9% Lahti region 4.5% Kuopio 2,023 1,674 179 107 93.9% region 11.3% Others Lahti region 1,963 1,436 158 110 95.1% 1,746 68.0% Others 816 77 94 95.3% 35,061 5,376* 143 2,619 97.1% Total 7 Kojamo plc | Creating better urban housing | Jani Nieminen, CEO * Includes EUR 348 million of fair value related to ongoing projects, plots owned by the company and ownership of certain assets through shares and IFRS 16 right-of-use assets
Co-operation agreements on the construction of 905 apartments to strengthen the future growth • On 30 August 2019, Kojamo Apartments related to the co- announced to have signed operation agreement on map agreements with SRV and Hausia on the construction of apartments on map 905 apartments in total railway track metro track • 42 apartments were completed already in Q3/2019 Separate contracts to be • signed on the rest of the apartments Estimate of completion of the apartments included in the contracts 47 units 470 units 2020 2022 The apartments are located in the Helsinki region close to good transportation connections 2023 2021 255 units 91 units 8 Kojamo plc | Creating better urban housing | Jani Nieminen, CEO Source of the map: Google Maps
Lumo builds customer experience in a new way Services of a new customer Services during tenancy Key courier Easy pick up service service Installation service Personal Personal Pets are Lumo open trainer welcome janitors house Car- 0 – Affordable Broadband Benefits from sharing security included partners 250 € deposit in rent Customer Versatile Move and Interior events for service paints for installation center free tenants service 9 Kojamo plc | Creating better urban housing | Jani Nieminen, CEO
Electronic services make every day life easier New rental agreements from webstore Over 13,000 49% rental agreements via 37% webstore by the end of September 35% 24% Fully automated service, where tenant can • choose his or her apartment and rent it at 7% once 2016 2017 2018 1 – 9/2018 1 – 9/2019 • Accessible with Nordic banking access New rental agreements from webstore codes, also used for checking credit information Share of all agreements, % • Majority of rental agreements in the Capital The share has been calculated based on the value of the rental region are made already online agreement (initial rent) 10 Kojamo plc | Creating better urban housing | Jani Nieminen, CEO
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