Realia Group grew and developed strongly in 2016

The year 2016 was a strong period of growth for Realia Group, the largest provider of property management and brokerage services in the Nordic countries.

The recovery of the Finnish economy at the end of the year and the development of the Group's functions increased Realia Group's turnover and improved its profitability. In Finland, the construction industry and private consumption demand lead the way for the recovery of the economy and growth of Realia Group.

For the second year in succession, the apartment market grew after three years of decrease. In 2016, the trading volumes of existing apartments were 3.0%* higher than in 2015 in the whole of Finland. The prices per square metre of existing apartments in multi-storey buildings increased by an average of 1.0%* in Finland compared with the previous year.

Property management and brokerage, Realia Group's business areas in Finland, grew profitably. In addition to organic growth, business acquisitions played a significant part in property management services. Three business acquisitions were completed in 2016. On 12 January 2016, Realia Management Oy acquired all shares in Päijät-Hämeen Kiinteistö-Isännöinti Oy based in Lahti. This acquisition strengthened Realia Group's housing company management services in the Päijät-Häme region. At the end of 2016, housing company management services were strengthened in the Helsinki metropolitan area by the acquisition of Isännöitsijäkonttori Oy. On 30 August 2018, Realia Group Oy acquired all shares in Corbel Holding Oy. This significantly strengthened Realia Group's facility management services and housing company management services in the Pirkanmaa and Keski-Uusimaa regions.

Realia Group's turnover in 2016 increased by 14.9% from the year before to EUR 114.5 million (2015: EUR 99.6 million). The business acquisitions completed in 2015 and 2016 supported organic growth.

The profitability of Realia Group improved in 2016 as a result of the positive impact of business acquisitions and the measures carried out in 2015 to improve the efficiency of the service network. These measures reduced profitability in 2015 but increased it in 2016. EBITDA was EUR 13.3 million (2015: EUR 7.7 million), comprising 11.6% of turnover (2015: 7.8%). In 2016, taxes for the period stood at EUR 1.4 million.

Change in Realia Group's ownership structure

Sponsor Fund III, Nordea and Varma, the Group's main shareholders, sold all of their shares in Realia Holding Oy to Altor Fund IV, a Nordic capital investment fund, through a sales agreement signed on 1 June 2016.

Business structure supports profitability, also in the future

Realia Group's business structure and focus areas support the development of profitability, also in the future. The valuation of the Group's brands is high. An even better utilisation of the existing customer understanding and the possibility to develop industrial functions, for example, regarding digital solutions are important development areas. In addition, the Group's companies have focused especially on developing and measuring the customer experience, and the results will mainly be visible in the future.

Realia Group has extensively focused on the Finnish and Baltic markets, but it is investigating opportunities to expand to all Nordic countries. In March 2017 after the 2016 financial period, Realia Group acquired Hestia, a Swedish property management company.

It is expected that the Finnish economy will develop very moderately in 2017. The unemployment situation is expected to improve, while the income of households will increase more slowly than in 2016. The Confederation of Finnish Construction Industries RT estimates an increase of 1.5% in construction in 2017. The volume of apartment construction is expected to decrease slightly from the 2016 level. With regard to brokerage activities, the year 2017 is expected to be a little more active than the previous year. Consumers have more confidence in their financial standing and the positive development of the unemployment situation.

It should be noted that the wealth of Finnish households mainly lies in housing assets and the Finnish building stock is fairly old. The significantly high costs of property repairs today and their increase in the future set major challenges when it comes to housing assets. General requirements in the property industry will become stricter due to the increased need for repairs, energy efficiency goals and changes in the legislation.

Realia Group's turnover and profitability are expected to increase from the closed financial period as a result of business acquisitions and the recovered markets.

 

*Price monitoring service of the Central Federation of Finnish Real Estate Agencies (KVKL) to which all major property brokerage companies report their sales information.

 

Additional information:

Matti Bergendahl, CEO, Realia Group Oy, tel.: +358 40 833 5461
 

Realia Group Oy is the largest expert service group specialising in the brokerage and management of apartments, properties and commercial facilities in the Nordic countries. Companies in Realia Group include Huoneistokeskus, SKV Kiinteistönvälitys, Huom! Huoneistomarkkinointi, Realia Isännöinti and Realia Management. Ober-Haus and Hestia operate in the Baltic region, Sweden and Norway. Realia Group’s annual turnover is approximately EUR 114 million, and it employs more than 1,900 professionals. All of the companies share an emphasis on customer satisfaction, which is created with tailored products and active, professional service. www.realiagroup.fi