Kojamo plc: Navigating the Finnish Residential Real Estate Market in 2024

Kojamo plc, Finland's largest private residential real estate company, has released its Interim Report for the first nine months of 2024, providing valuable insights into the company's performance and the broader Finnish residential real estate market. This article will delve into the key takeaways from the report and analyze Kojamo's strategic positioning in the market.

Kojamo's total revenue and net rental income have both increased year-over-year, with total revenue rising by 3.1% to EUR 338.8 million and net rental income increasing by 3.1% to EUR 228.4 million. This growth is driven by a 1.5% increase in total revenue during the July-September 2024 period, with net rental income rising by 3.1% to EUR 85.7 million. The net rental income margin remained stable at 75.8%.


The company's Funds From Operations (FFO) decreased by 11.8% in the first nine months of 2024 compared to the same period in 2023. This decline can be attributed to a significant decrease in gross investments, which fell by 86.6% to EUR 21.6 million, representing a substantial reduction in capital expenditure. Additionally, the financial occupancy rate dropped to 91.5% from 92.7%, indicating a slight decline in rental income. The company's return on equity (ROE) also decreased to -0.4% from 0.2%, suggesting a lower profitability. These factors contributed to the decline in FFO, despite an increase in total revenue and net rental income.


Kojamo's investment properties remained relatively stable, with a fair value of EUR 7.9 billion in September 2024, a 3.0% decrease from the previous year. The financial occupancy rate also saw a slight decline, from 92.7% in 2023 to 91.5% in 2024. Despite these minor changes, Kojamo's investment properties and occupancy rates remain strong, indicating the company's resilience and continued growth potential.


Kojamo's gross investments decreased significantly from EUR 45.0 million in the first nine months of 2023 to EUR 2.2 million in the same period of 2024, representing a 95.1% decrease. This reduction in investments could be attributed to various factors, such as changes in the company's growth strategy, market conditions, or a shift in focus towards operational efficiency. The equity ratio also decreased from 45.0% in 2023 to 43.1% in 2024, indicating a potential increase in debt financing or a decrease in the company's equity value.


In conclusion, Kojamo plc's Interim Report for the first nine months of 2024 provides valuable insights into the company's performance and the broader Finnish residential real estate market. Despite a decline in FFO and gross investments, Kojamo's total revenue and net rental income have both increased, indicating a strong underlying business. The company's investment properties and financial occupancy rates remain stable, demonstrating resilience in the face of market fluctuations. As an investor, it is essential to monitor Kojamo's performance and the broader market trends to make informed decisions about the company's future prospects.