Kojamo plc’s Financial Statements Release 1 January–31 December 2025

Kojamo reported 2025 revenue of EUR 455.2m (+0.6%) and net rental income of EUR 307.7m (+1.6%), while FFO fell to EUR 140.9m (-4.9%) and EPS was EUR 0.08. Result before taxes was EUR 26.8m, pressured by a EUR -120.4m fair value valuation on investment properties; financial occupancy improved to 94.8% and the portfolio fair value stood at EUR 7.621bn. Management proposes a EUR 0.11 dividend, issued a EUR 500m bond and refinanced bank loans, Moody’s affirmed Baa2 (stable), and the company agreed post-period to acquire 4,761 apartments (closing estimated 1 Apr 2026), underpinning growth guidance for 2026 (total revenue EUR 484–497m, FFO EUR 147–157m).

Analysis

Market structure: Kojamo’s improving occupancy (full-year 94.8%, Q4 96.3%) and announced acquisition of 4,761 apartments (closing ~1 Apr 2026) shift supply/demand dynamics in favour of large, scale players with strong balance sheets. The company's LTV 42.3%, EPRA NTA €18.61 and Moody’s Baa2/stable coupled with a €500m bond issue imply financing access that will pressure smaller landlords and selective sellers; expect upward rent bargaining power in regional markets (Tampere/Turku) already normalised while capital-region pricing lags. Cross-asset: stronger credit profile supports tighter corporate spreads for Finnish residential debt; equity upside is idiosyncratic to Kojamo while FX and commodities impact is negligible.

Risk assessment: Key tail risks are (1) acquisition execution or integration failure by Apr 2026 causing FFO shortfall versus guided €147–157m, (2) a renewed cap-rate repricing (-200–400bps) reducing fair value further from €7.62bn, and (3) regulatory rent-controls. Time horizons: immediate risk around Q1 liquidity and financing terms (days–weeks), short-term sensitivity to acquisition close and Q1 metrics (weeks–months), long-term to city-level supply (quarters–years). Hidden dependencies: cash flow accretion assumes stable tenant mix and low vacancy churn; higher interest rates would compress FFO quickly despite scale.

Trade implications: Tactical long exposure to KOJAMO (HEL:KOJAMO) ahead of Apr 2026 close captures accretion; credit investors should look at senior bonds 3–6yr given Baa2. Relative plays favour Kojamo vs smaller/less-levered Finnish residential names (e.g., SATO: HEL:SATO) where operational improvements lag. Use option structures (12-month call spreads or cash-secured puts) to skew risk/reward and size positions to 1–3% of portfolio.

Contrarian angle: Market may underprice the acquisition’s cash-flow accretion and operational synergies; consensus FFO decline y/y (FFO -4.9% to €140.9m) masks 2026 uplift to €147–157m in guidance. If cap-rate compression of even 50–100bps occurs as transaction market resumes, NAV upside could be >10–15%. Conversely, overpay risk exists if financing costs re-escalate; prefer structures that cap downside (spreads, covered calls).

Key Decisions for Investors

• Establish a 2–3% long position in KOJAMO (HEL:KOJAMO) before 1 April 2026 to capture acquisition accretion; target 12–18% upside if 2026 FFO meets guidance (€147–157m); set stop-loss at -12% of entry and reassess on Q1 results (expected April earnings/prior to close).
• Implement a 1:1 relative-value pair trade: long KOJAMO vs short SATO (HEL:SATO) sized 1–2% notional each for 3–6 months — rationale: Kojamo’s occupancy rebound and portfolio scale vs Sato’s slower operational leverage; close on Q2 2026 releases or if occupancy divergence narrows <1ppt.
• Allocate 1–2% of credit sleeve to KOJAMO senior unsecured bonds (3–6yr) if spread to Finnish government or swap >150bps or outright yield ≥4.0%; monitor Moody’s commentary and covenant terms; take profits or reduce if LTV rises >47% post-acquisition.
• Use options to define risk: buy a 12-month KOJAMO call spread (debit) sized 1% portfolio to capture upside from Apr 2026 close, and concurrently sell 6–9 month cash-secured puts ~10% below current market price to lower basis if comfortable acquiring additional exposure.