Insider Information: Kojamo has agreed to acquire a housing portfolio and issued special rights entitling to shares

Kojamo will acquire a Varma-owned Finnish housing portfolio of 60 properties (4,761 apartments), primarily in the Helsinki, Tampere and Turku metro areas, in a debt-free transaction valued at ~EUR 900m and representing a stabilised net yield of ~4.9%. Kojamo estimates stabilised annual rental income of EUR 63.0m (current occupancy 83%), expects accretion to FFO per share and EPRA cost ratio improvement, and has issued 24,666,667 special rights allowing Varma to subscribe new shares at EUR 11.8090 (total EUR 291.29m to be covered by portfolio transfer) while securing a EUR 600m 12-month senior unsecured acquisition facility with Goldman Sachs, Nordea and SEB; closing is subject to customary conditions including competition approval and targeted by 1 April 2026.

Analysis

Market structure: Kojamo’s purchase (≈€900m debt-free; 4,761 units; stabilised NI €63m; implied stabilised net yield ~4.9%) directly benefits Kojamo (scale, FFO/share accretion, EPRA cost ratio) and Varma (partial payment in premium shares €11.8090 each, €291.3m). Competing private landlords with smaller platforms lose relative pricing/letting efficiency as Kojamo can push occupancy and unit-level returns; short-term rental pricing pressure in Helsinki/Tampere/Turku is possible as Kojamo brands and relets ~17% vacancy (~83% current). Cross-asset: expect knee-jerk equity bid for KOJAMO (Nasdaq Helsinki), short-run widening in Kojamo credit spreads given €600m 12-month bridge; FX/commodities immaterial but Nordic bank lenders’ loan pipelines modestly impacted.

Risk assessment: Key tail-risks are: (1) competition authority blocks/divestiture (transaction aimed to close by 1 Apr 2026), (2) failure to refinance the €600m facility within 12 months if credit markets tighten, and (3) occupancy fails to lift (no >5–8ppt improvement in 6–12 months). Interest-rate shock (risk-free +200bps) would lift cap rates and could reduce NAV by roughly 8–15% on acquisition properties. Hidden dependencies: Varma’s continued active ownership/alignment and systems integration of lettings platform are execution-critical.

Trade implications: Tactical entry: partial long equity in KOJAMO sized to 2–3% portfolio with staggered buys (50% pre-clearance, 50% post-clearance), hedged with 6–9m puts 10% OTM to cap downside if refinancing or regulator issues occur. Credit trade: buy Kojamo senior debt if 3y-equivalent spread widens >150bps vs Nordic IG (target absolute pickup ≥200bps). Relative-value pair: long KOJAMO / short Finnish retail/commercial landlord exposure (e.g., Citycon CTY1V:HE) to play residential outperformance over 6–12 months.

Contrarian angles: The market will likely celebrate FFO accretion but underprice refinancing/dilution risk from the 24.67m-share special issuance and the 12-month bridge. If Kojamo can demonstrably lift occupancy by ≥5ppt within 9 months, upside to NAV and FFO could be 10–20%; conversely, if capital markets tighten and Kojamo must raise equity below €11.81, downside >15% is plausible. Historic parallels: large bolt-on residential portfolios often outperform only after 9–18 months of operational work—act with staged risk and trigger-based reweights.

Key Decisions for Investors

• Establish a 2–3% portfolio long position in Kojamo (KOJAMO:HE) within 10 trading days, deploying 50% of the allocation now and 50% after competition approval (~target close by 1 Apr 2026), and buy 6–9 month protective puts 10% OTM to limit downside risk.
• If Kojamo 3y-equivalent senior spread widens >150bps versus Nordic IG peers, buy Kojamo senior bonds (target yield pickup ≥200bps) sizing to 1–2% of fixed-income sleeve; exit or trim if spread compresses below +100bps within 6 months.
• Implement a pair trade: long KOJAMO (1.5–2% portfolio) / short Citycon (CTY1V:HE) (1% portfolio) to capture residential operational leverage over commercial retail; rebalance after 6 and 12 months depending on occupancy delta.
• Hard triggers: fully liquidate equity exposure within 3 trading days if the competition authority blocks the deal; reduce exposure by 50% if Kojamo has not refinanced the €600m facility with longer-term capital markets issuance within 9–12 months of closing.
• Monitor operational KPIs: require at least a 5 percentage-point occupancy improvement in the acquired portfolio within 9 months; if not achieved, close long equity and unwind pair trades within 30 days.