Teknologiakiinteistöt's business remained profitable in 2022 despite the challenging economic situation. Last year, Teknologiakiinteistöt continued its strong expansion.
Last year, Teknologiakiinteistöt continued its strong expansion. The company's revenue grew by 15 percent, from 32.3 million euros to 37.0 million euros. Revenue was boosted by new buildings commissioned in 2022: InfraCity A, completed for Turku Energia's premises, and CivilCity, which serves as an office building for Kela, Wärtsilä, and Nordea. The company's service business also increased its revenue.
Changed interest rate environment reflected in operating profit
High inflation caused by Russia's war of aggression and the rise in financing costs were reflected in Teknologiakiinteistöt's operating profit, which fell into a loss of -3.2 million euros (2021: 27.3 million euros).
– The rise in interest rates has challenged the entire real estate sector. During the era of negative interest rates, property yield requirements varied between 3–6 percent depending on the location. However, as interest rates rose, the yield percentages of bonds comparable to deposits in terms of risk profile climbed to four, which also led to an increase in property yield requirements, says Jan-Peter Hautaniemi, who became Teknologiakiinteistöt's CFO in March.
At Teknologiakiinteistöt, property values decreased by 22.1 million euros. Excluding the property devaluation, the operating profit would have been 18.9 million euros (2021: 15.8 million euros).
– Although the values of properties owned by Teknologiakiinteistöt fell last year, their value development remains positive when viewed over the long term. In just over a decade, Teknologiakiinteistöt has succeeded in significantly increasing the value of its holdings by investing in the properties and their surroundings, Hautaniemi continues.
One-off expenses weighed on earnings
The company's earnings were weighed down not only by property revaluations but also by interest rate swaps terminated during the year, for which Teknologiakiinteistöt paid banks a termination cost equal to the then-current market value of the contracts, amounting to 7.1 million euros. As a result, the group's financial income and expenses rose to -12.9 million euros (2021: -8.4 million euros), and the result fell into a loss of -13.9 million euros (2021: 14.2 million euros).
– Despite the negative result and the one-off interest rate hedging termination cost, the company's cash flow remained strong. The company's loan-to-value ratio, i.e., the ratio of total debt to the market value of properties, also remained at a moderate level, enabling additional borrowing in the future.
Overall, however, it was a good year, because most importantly, the company's growth was achieved profitably.
– With revenue growing by 15 percent, the company's EBITDA, measured in absolute values adjusted for property devaluation, increased by 19 percent, which is an excellent result.
Balance sheet exceeded half a billion
During 2022, Teknologiakiinteistöt made investments totaling 41.5 million euros. The investments consisted of construction projects, changes to customer premises, and repairs. The largest projects were the parking facility ParkCity, which opened in January 2023, InfraCity, which started the transformation of the Itäharju industrial area into a Science Park, and IndustryCity, created from an old element factory.
The company's balance sheet total was 501.5 million euros (2021: 476.7 million euros).
Premises full, customers satisfied
The company's economic occupancy rate remained high in 2022 (97.1%), and there were no major terminations. The most significant of the new lease agreements was a 23-year lease signed with Turun Vesihuolto regarding office spaces and depot areas in Itäharju. Teknologiakiinteistöt also signed a 10-year lease agreement with the design and consulting company Rejlers for approximately 1,300 square meters of office space in the new InfraCity B office building.
According to the customer satisfaction survey conducted at the end of the year, overall customer satisfaction increased from 3.99 to 4.03 on a scale of 1–5. As many as 93 percent of customers were willing to recommend Teknologiakiinteistöt as a landlord.
– Overall, it was a good year. Customers were more satisfied with Teknologiakiinteistöt than ever before, the occupancy rate of the premises remained high, and the balance sheet total grew to over half a billion, concludes Hautaniemi.