Lehto Group Plc
30 April 2019 at 2.45 p.m.
Lehto Asunnot Oy (“Lehto”), a fully owned subsidiary of Lehto Group Plc, has today signed an agreement with DWS, on behalf of one of its residential real estate funds to build and sell a residential property portfolio consisting of 542 apartments to DWS. The portfolio consists of six different buildings located in the cities of Espoo, Turku, Kirkkonummi, Riihimäki and Jyväskylä in Finland. Some of the buildings are already under construction and all buildings will be completed during the years 2019-2020.
According to the agreement Lehto is in charge of letting the apartments and the final transaction price is dependent on the actual rent (euros) and actual letting rate (number of apartments let) at each closing. The parties do not publish the transaction value.
The properties are handed over to the purchaser after their completion, when the purchase price shall also be paid. Lehto will finance the construction from its cash reserves and by bank loans.
“We are delighted to have a significant customer as DWS and it shows that there is demand for affordable quality residential properties with good location”, says investment director Mikko Jalava from Lehto Asunnot Oy.
”We are happy with our first residential investment in Finland and we look forward to increasing our Nordic portfolio further in the residential sector”, says Martin Weikamp, responsible for Transactions Northern Europe at DWS.
The main risks related to the agreement are the achievement of the agreed letting rate and realization of targeted rent. If the building specific letting rate is not achieved on the agreed date, the buyer has the right to not buy the property in question.
Sales incomes and cost accrual of the portfolio shall divide fairly evenly between the years 2019-2020. The agreement does not have effect on Lehto’s 2019 financial outlook, which has been announced earlier.
Veli-Pekka Paloranta, CFO, Lehto Group Plc
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