Spondas result in 2005 was a clear improvement on the previous year in terms of both leasing operations and the value of its property portfolio. The year was again a challenging one for office premises, where the economic occupancy rate remained at the same level in 2004.
Highlights (comparison year January-December 2004):
- Spondas total revenue increased to €103.1 (99.2) million.
- Cash flow per share from operations €0.57 (0.53).
- Operating profit rose to €65.5 (17.0) million due to the result of leasing operations and an increase in the value of the property portfolio.
- Net profit for the year improved to €29.6 (3.2) million.
Earnings per share were €0.37 (0.04).
- The market value of Spondas properties was €1,259.7 (1,221.5) million; net assets per share were €7.25 (7.44).
In 2006 the result of leasing operations and cash flow from operating activities are expected to remain at last years level. Investments in property development will increase Spondas property portfolio. The economic occupancy rate of the companys investment properties will decrease slightly in the first half of 2006 due to the expiry of several large leasing agreements. However, the economic occupancy rate is forecast to improve towards the end of the year compared to the ituation at the end of 2005.
President and CEO Kari Inkinen
Competition in Spondas core property investment market, the Helsinki Metropolitan Area, has intensified in recent years and for this reason the company reviewed its strategy in 2005. Spondas new strategy is to seek growth and profitability in the years ahead mainly through property development coupled with expansion into Russia and the Baltic countries.
In property development Sponda will exploit the potential offered by the land and building rights it already owns. The company has set a property investment target of roughly EUR 50 million for 2006, and EUR 190 million over the next three years. The largest development project is the City-Center complex in the heart of Helsinki.
The company is studying the property investment opportunities presented by Russia and the Baltic countries. The emphasis will be on the retail and logistics property markets in and around Moscow and St. Petersburg. The plan is to start investments during 2006. The total volume of investments committed to projects in Russia and the Baltics may not exceed 10 20 % of the total value of the companys property portfolio.
In Finland, Sponda will also expand outside the Helsinki Metropolitan Area as a partner in real estate investment funds, where the company will take responsibility for managing the properties acquired by these funds. In January 2006 Sponda established a real estate fund with JER Europe Fund II Holdings S.Á.R.L.. Spondas holding in the fund is 20 %.