YIT Invests in a New Finnish Joint Venture That Focuses on Rental Apartments
Finland YIT is involved in founding a joint venture that invests in rental apartments the company has constructed in Finland. The investors in the joint venture are YIT (49 percent) and a group of Finnish private investment companies, including Oma Säästöpankki as well as LähiTapiola Etelä-Pohjanmaa. At the same time, YIT is selling almost 600 completed apartments or apartments that are in the final stage of construction throughout Finland to the new joint venture. The total value of the sold apartments
The joint venture that is founded will lease the apartments it owns, and YIT’s rental apartment team will be partly responsible for the leasing. Administration of the apartment portfolio and the reporting of the joint venture is outsourced to FinCap Group. By strengthening its rental apartment offering, YIT follows its strategy by investing in non-cyclical businesses that are based on long-term service contracts and lease agreements as well as on the demand that is growing at a trend rate. The objective of the rental apartment portfolio is to give YIT a steady cash flow and to create potential for value increase by optimising the sales timing. The efficient use of the apartment base and new types of ownership models will also increase the company’s investment capacity and increase the capital circulation speed.
“We want to offer the suitable way of living for each of our customers. Founding the joint venture and creating a wide rental apartment portfolio are a part of our strategic investment in living services and our customers. The apartments that the joint venture owns will be sold when the moment is suitable,” explains Pekka Helin, Senior Vice President of Living Services and Customer Relationships.
The joint venture’s ownership, rental income and potential sales profit from reselling the apartments will be reported in YIT’s Partnership properties segment. The now realised unit sales of the apartments will be reported as investor sales in Housing Finland and CEE segment. The majority of the sold apartments are completed. YIT will recognise 51 percent of the revenue and profit for the completed sold apartments in its first quarter result. For YIT’s ownership share (49 percent), the construction revenue and profit will be recognised in Housing Finland and CEE segment when the apartments are resold.