Strategic objectives of Ovaro Kiinteistösijoitus oyj for 2021

Ovaro Kiinteistösijoitus Oyj
Stock Exchange Release on 29 October 2018 at 12:00 am


After the change in corporate structure took place on 1 October 2018 and the new management started its work, the Board of Directors of Ovaro Kiinteistösijoitus has determined the strategic objectives for the period 2019–2021.

Ovaro will primarily strive to increase shareholder value and seek a total return of at least 10 per cent for its shareholders. The total return consists of the development of share value and the distribution of profits. The distribution of profits may take place as payment of dividends or as purchase of own shares.

During the strategy period, the first goal is to first carry out restructuring of the company and then to start development actions.

The objective in restructuring activities is to improve profitability so that the reasons for decrease in the net asset value of the share are eliminated.

During the restructuring period, the company’s holdings of approximately 1,600 apartments will be divided between core business assets and other business assets. Among other things, the core business assets will be developed by acquisitions, property development and sales. The other business assets are better suited for owner occupancy, and the different alternatives for selling them will be surveyed and implemented in order to achieve the best possible outcome. Profitability will also be improved by enhancing the efficiency
of administration.

In the future, Ovaro will report its core business assets and other business assets in separate parts so that the implementation can be monitored. The goals are open communications and improved transparency of investor information. The company only has one business area, real estate investments.

Once the restructuring process has sufficiently advanced, the company will initiate growth investments with the aim of constantly improving the result in terms of cash flow and the net asset value per share. The company aims to maintain an equity/assets ratio of at least 45 per cent. The purpose of developing the core business holdings and divestment of other holdings as well as the actions for enhancing the administration and financing is to increase the operative result (EPRA) many times over the 2017 level. The guidance provided by the company will also in the future concern its operative result (EPRA).

During the restructuring process, more apartments may be sold than before and loans with higher rates of interest may be repaid. The restructuring process may also cause non-recurring expenses or write-downs. The company will estimate their amounts during Q4/2018.

Orava may carry out real estate and corporate arrangements, if they support increasing the shareholder value.

“We have carefully studied the company’s holdings with the Management Team. We have divided the portfolio of approximately 1,600 apartments into two categories: apartments providing a good return or having ample development potential as well as apartments providing a modest return. The latter are mainly large family apartments completed in the 2010s, better suited for owner occupancy than for tenancies, and therefore we intend to sell them of in a systematic manner.”

“Finland provides excellent possibilities for successful rental apartment and real estate investment business. After the modifications, Ovaro will have a portfolio for which we can expect a good return and increase in value.”

Helsinki, 29 October 2018
Ovaro Kiinteistösijoitus Oyj
Additional information: CEO Kari Sainio, tel. +358 400 209 147
Distribution: Nasdaq Helsinki Oy,, major media