Investments and real estate development

VVO committed to the construction of 1,553 apartments during 2014, and these sites will be developed over the coming years.

750 (252) rental apartments were completed for VVO in 2014. 517 apartments were constructed in Helsinki and 233 elsewhere in Finland. 630 (252) of these completed apartments were privately financed Lumo brand apartments and 120 (0) were long-term state-subsidised VVO brand homes.

In 2014, VVO decided to invest approximately EUR 300 million in new construction, property acquisitions, and repairs and renovations. There were more new construction start-ups than in the previous year, mainly in the Helsinki Metropolitan Area. VVO launched the construction of 856 (638) Lumo apartments in 2014. A total of 1,127 (1,020) Lumo apartments at 16 (15) sites were under construction at year-end. Of the apartments under construction, 733 (787) are located in the Helsinki region and 394 (233) in other Finnish growth centres.

In 2014, VVO decided that, for the time being, it will not construct any rental housing governed by the legislation on non-profit operations. One of the reasons for this decision stems from changes in official interpretations of the legislation on non-profit operations.

On 29 August 2014, VVO signed an agreement worth EUR 112 million with Rakennusosakeyhtiö Hartela for the development of rental apartments in Helsinki, Espoo, Tuusula and Lahti. The agreement covers the construction of over 500 Lumo apartments for VVO in 2015–2018.

During 2014, VVO acquired rental apartments in Helsinki from the Helsinki Deaconess Institute (Etu-Töölö district), Signe and Ane Gyllenberg Foundation (Munkkiniemi district) and Paavo Nurmi Foundation (Lauttasaari district). In addition, VVO acquired rental apartments from Tapiolan Lämpö Oy in Pohjois-Tapiola, Espoo. All the acquired apartments – a total of 172 (443) – are privately financed. The total value of the completed acquisitions was EUR 30.4 million.

During the review period, VVO sold 291 (446) rental apartments in Rovaniemi, Kuopio, Salo, Janakkala, Imatra, Rauma, Joensuu, and Vantaa. A total of EUR 9.8 (8.7) million in capital gains and losses was registered from these divestments. On 8 April 2014, VVO-group plc sold its holding in Suomen Asumisoikeus Oy to Asuntosäätiön Asumisoikeus Oy, a subsidiary of Asuntosäätiö.

The Group's gross investments during the period totalled EUR 200.4 (223.2) million, and cash flow from investment activities totalled EUR 200.4 (208.2) million. The VVO Non-subsidised segment accounted for EUR 186.2 (186.0) million of this cash flow from investments, and the VVO State-subsidised segment for EUR 14.3 (22.2) million. EUR 29.1 (35.3) million of the investments was allocated to capitalised renovation costs. Total repair costs were EUR 78.7 (83.7) million, of which EUR 49.6 (48.4) million was recognised as expenses in the income statement. EUR 142.1 (117.2) million of these investments was allocated to new construction.

VVO's property maintenance costs (excluding repair expenses) changed by -2.3 (-2.7) per cent on the previous year. This fall was attributable to a general boost in the efficiency of operations and the broader scale of tendering.