Lumo Kodit Oyj ($LUMO)

Good morning. Welcome to Lumo Homes Q1 Results Webcast. I am Niina Saarto, Treasury and Investor Relations Director. Today, we'll present you first quarter figures, and we will also give an update on the acquisition of nearly 4,800 apartments, which we completed after the review period on 1st of April. CEO, Reima Rytsola will start the presentation; and then CFO, Erik Hjelt, will continue. In the Q&A, we will open the phone lines for questions. We also take questions via chat. So all is set, gentlemen, now it's your turn.

Thank you, Niina, and a very good morning on behalf of myself as well. And welcome to this inaugural Lumo Homes plc interim report. So fantastic to be here under this Lumo brand. Going a little bit of true of our first quarter results, and we have shared with the CFO, Erik Hjelt, so that Erik will go more thoroughly the figures, and I will have a kind of an overview of the market conditions and overall situation. But all in all, our like-for-like rental income grew and occupancy rate improved from previous year. And that was kind of, I would say, consistent development for us, even though the kind of the total revenue and net rental income decreased, and that was mainly due to the sale of a portfolio of approximately 2,000 apartments, which was closing in last July. We had especially the people who are living in Finland remember that we had the extraordinary cold January, February here in Finland, and that affected our FFO as well, which declined due to that cold weather and of course, the revenue decline as well. Our liquidity position remained very good, and our balance sheet is strong and loan-to-value improved and came down to 42.5%. The market situation, I will come back in a minute. We also published our strategy, and we had our Capital Markets Day in March where we released our new strategy and where the customer experience is in the core of our strategy. And happy to notice that even though it's early days, but already now, we hit a record high in NPS at 60 this quarter. So going to the right direction, although having said that, that it's early days. And of course, the NPS figure might show some volatility, but at least a promising start in a sense that strategy start to work and we have already took a lot of measures to kind of improve our capabilities to focus on customer experience. And a big part of that was, of course, the -- as I said, that this is an inaugural interim report for Lumo Homes plc. So a big part of the new strategy is also the brand change that we will operate under the brand name of Lumo Homes plc and Annual General Meeting kind of approved that proposal in last March. And as Niina told already, so I will give a glance of acquisition that we bought 4,761 apartments, and that deal was closed after the review -- right after the review period on 1st of April. But I give some glance of how -- what are the first takeouts after 1 -- a little bit over 1 month of owning those apartments. The market environment, the operating environment has stayed muted. Of course, there's a lot of volatility in global economy and not the least because of the Iran war and through that rising interest rates. The last year already was in Finnish GDP growth close to 0 at the moment, different offices expect GDP growth to 1%. We had a very promising pre-GDP figure from Q1, which was 0.9 statistics of Finland, but it remains to be seen what's the kind of a final figure, but it was kind of a promising sign anyhow. When talking about the rental apartments and oversupply of rental apartments, so we still face oversupply and the market conditions haven't improved significantly yet. Although having said that, we kind of repeat ourselves that in the medium and long term, the outlook looks very promising. And the main reason is that the new start-ups for residentials are coming down even more rapid pace than anticipated. And the current estimate or forecast is even lower for this year than it was previous year. And the Confederation of Finnish Construction Industries just revised their forecast to 15,000 apartments. And my personal view is that we won't even reach that. And the main reason is that actually the subsidized part of new start-ups will probably be lower -- even lower than in this forecast, which was 11,600 apartments. And the -- how would I say, main reason is that actually, the math is not working at the moment for starting new start-ups and especially now when there's still oversupply, but also the kind of current price level for existing apartments are much lower than the new buildings. So that's the main reason. Although the -- and combined with the kind of very low level of new start-ups, so still the urbanization carries on and I would say, population is growing all the time in biggest cities in Finland. So that's why we are confident of a medium- and long-term outlook on supply and demand balance. I won't clean the table for the figures, so I'll let Erik to go through the figures more thoroughly. Just one word that our carbon neutral target is well in line and intact, and we are ahead of our plan and reaching the kind of carbon neutrality by apartment in 2030. This is, of course, one key component for us for our cost efficiency as well. And that's why we -- it's kind of double-sided, so to say, the target. So it's beneficiary, of course, for a climate change as such, but also for our profitability. And then about the acquisition, as I said that we acquired 4,761 apartments from Varma Mutual Pension Insurance Company and that deal closed right after the review period, so 1st of April. So we have roughly a little bit over 1 month behind us now that owning those apartments. And the start has been very promising. As you remember, the occupancy rate of the portfolio was very low, 83% on the time of signing and we said that we are confident that we are able to rise that occupancy rate to our kind of a stabilized level. And at the moment, the kind of the first month of April look very promising and even above our expectations. So the lease-up plan is progressing very well. Also the kind of overall, the takeover has gone very smoothly. So I would like to here also thank our own people that they have worked very hard, and this is a big portfolio to acquire. So it has so far went very smoothly and the lease-up plan has progressed really well. So we are even more confident on the signing of this deal that we are able to raise the occupancy to more of a stabilized level. I think this was all in my first stint. So as Niina said, that we are ready to answer the questions after Erik's financial development and outlook part. So I ask Erik to join on the stage.

Thank you, Reima, and good morning, everybody, from my side as well. So Page 11, total revenue side, so it declined EUR 3.5 million from the corresponding period, but it's good to keep in mind that in July 2025, we disposed almost 2,000 apartments. And those old apartments actually contributed EUR 5.4 million for the top line last year. So if you exclude that, so actually, the top line growth was EUR 1.9 million. And main contributor there was improved occupancy. Net rental income came down by EUR 2.9 million. Of course, the total revenue plays there a role. Repairs came down by EUR 0.6 million. And despite of a slightly smaller portfolio, the maintenance expenses moved sideways. And main reason there is actually the heating cost. So the winter was very harsh in Finland, and the heating expenses was EUR 2.4 million more compared to last year -- Q1 last year. On the positive side, cleaning and outdoor maintenance came down by EUR 0.8 million and property taxes down by EUR 0.6 million. On Page 12, on the right-hand side, FFO down by EUR 2.1 million. Of course, net rental income plays a role there as well. SSG expenses increased EUR 1.1 million. Finance expenses came down by EUR 0.3 million, mainly because of the smaller loan portfolio. And it's good to keep in mind that the closing of the acquisition, big acquisition was 1st of April. So it has no impact in any of our figures during Q1 this year. And current taxes came down by EUR 0.8 million. Occupancy rate improved from previous year. Q1 figure year-to-date figure is, of course, in Q1, the same, so 95.6%, and it's up by 2.8 percentage points from Q1 last year. Tenant turnover slightly up by 0.6 percentage points. We showed very strong like-for-like rental income growth, mainly driven by the improved occupancy, very strong figure there, so 4.3% impact of rent and water charges negative side, 1.1%. We are still increasing the rents for existing tenants. At the moment, the monthly increases are on average between 1.4% and 1.5%. And we are still flexible in rents was come to the vacant apartments, and that flexibility brings the impact of rents and water charges on a negative territory. Altogether, like-for-like rental growth, very strong 3.2%. Investments were on a low level in first quarter. We had one ongoing development project, 119 apartments that was completed in February located in Helsinki. And modernization investments increased from the comparison period because we started a few larger modernization investment project. We sold during the first quarter 166 apartments. And of course, after the period, we completed the acquisition almost 4,800 apartments. Modernization investments up by 2.5% because of this couple of bigger modernization investment project we started. Fair value on investment properties down by EUR 42.6 million. We didn't change any valuation parameters in Q1 valuation. There was 4 transactions during Q1 and including ours and all these are taken into account our valuation Q1. And the main reason for the negative impact of the valuation was due to the change in calculation parameters as properties age. So that's embedded in our model, our valuation model. The change in yield requirement is based on age of the properties. So when it turns -- when the property turns 16 years or 30 years after completion or renovation, we increased the yield requirement and 15 years point where we increased the yield requirement between -- by 12.5%. And that was the main reason the value change in Q1. There was unusually amount of aging properties. So most of these properties that we changed the yield requirement because of the aging was assets turned to 16 years old. Remaining part of this year, we anticipate no major impact because of this aging question. So Page 17, loan-to-value, strong 42.5%, well in line with our new target to keep our loan-to-value below 45%. So there's quite sizable buffer against that level. And equity ratio quite stable as well. On Page 18, our financial position remains strong. After the reporting period, we signed a EUR 600 million acquisition finance related to the portfolio acquisition. And the idea there is to refinance that with debt from the capital markets. In March, we paid back the remaining part of our 2026 maturing bond, EUR 135 million. And now the 2026 maturing loans are already covered or paid back actually. And now the focus is to refinance 2027 maturing loans, and we will address that in some point during this year. Financial key figures remained strong. So hedging ratio very high, 96% average interest rate, 3.3% and coverage ratio, excluding repair expenses as our peers are calculating this, so 2.6. Key figures per share remains strong. No major changes there. So EPRA NTA pretty much in line with the previous figures and the same goes with equity per share. As we revised our strategy, we released our new financial targets for 2026 to 2028. We have 4 cornerstones, if you like, there. So growth, customer satisfaction, profitability and risk management. And the growth, the target is to grow 5% to 7% annual customer satisfaction to have Net Promoter Score about 65, profitability, average annual growth FFO per share, 3% to 5% and loan-to-value to keep below 45%. Now we have the figures for Net Promoter Score and loan-to-value because growth and profitability figures are annual figures, so we didn't calculate it linked to this Q1 report. Of course, the whole year figures will be included when we are there. Then Page 21, our outlook. We kept our outlook unchanged. So we estimate that the total revenue will amount between EUR 484 million to EUR 497 million and an FFO between EUR 147 million to EUR 157 million. If you look at the midpoint of the top line growth guidance, so there we penciled in slightly improvement in occupancy, moderate rent increases and flexibility in new rents, but reducing amount compared to last year and beginning of this year and then successful implementation of the acquired portfolio, and we are proceeding well there, as Reima already discussed. Then if you look the FFO guidance, so that, of course, the range reflects the top line outlook there. And if you take the midpoint of the FFO guidance, so there, we assume the average weather and then the cost of refinancing on a constructive level. And now back to Reima.

Now let's start Q&A. And let's start with the audience question.

Timo Nyman from Nordea Bank. I was just wondering the occupancy rate, considering that you took over the Varma portfolio with a relatively low occupancy. You have still been able to improve the occupancy. Does that go hand-in-hand with lots of incentives? Or how did you manage that one?

You mean the Varma acquired portfolio. I think it was very much in line with the business case that we calculated with the rent levels. So -- and we calculated some, we noticed that there were some kind of overpricing in the portfolio, which partly explained the kind of very low occupancy rate. So -- but it's well in line with our business case plan, the rent levels.

So now we can move on to phone line questions.

[Operator Instructions] The next question comes from Anssi Raussi from SEB.

It's Anssi Raussi from SEB. I have 3 questions, and I go one by one. First, I continue on occupancy. So if you exclude this Varma acquisition, occupancy came down a bit quarter-over-quarter. So how much of this decline was maybe due to seasonality and how much due to underlying market conditions? That's the first one.

Okay. If I take that. So it's, of course, very difficult to kind of make that divide or divide those components. But I would say that it's for sure that there's a true seasonal effect on first quarter. So I would say that the kind of a tiny decline from quarter-to-quarter is mainly of a seasonal effect. So as I said, that market conditions seem not to have improved, but I think it's fair to say that the market conditions haven't worsened either. So in that sense, I think it's mainly kind of a seasonal effect.

That's helpful. And then about your refinancing this year. So have you changed your plans in terms of timing? Or are these initial plans still in place?

So we are, of course, monitoring the market very carefully and try to figure out whether this is special circumstances in the short term. But definitely, we want to approach the refinancing of '27 maturing loans. We can tap the market even before the summer or we can postpone it after the summer depending on the market conditions.

Got it. And finally, on your possible discussions with the credit raters. So have you had any discussions or of course, you're maybe planning to have at some point because we know what has happened in geopolitical situation and interest rates have gone up. So any changes on this situation?

We have set a meeting -- management meeting with Moody's in August. And we discussed with Moody's several occasions when we prepared ourselves for the acquisition. So they were well informed and they knew our plans there. So since that, the normal liquidity discussions. But other than that, we haven't lately discussed with Moody's.

The next question comes from Jonathan Kownator from GS.

I just wanted to follow up on the cold winter. Do you see any risk to your guidance of being towards the lower end of the guidance? Was that more than you expected at the beginning of the year? And again, to go back to the occupancy question, I think generally speaking, what are you expecting later in the year? And what was -- what is your view on pricing as well? There was obviously a negative impact on pricing in your like-for-like rent growth. How do you expect to move your pricing going forward this year? And what do you expect it to be the impact on occupancy?

Okay. If I take the occupancy, you can then have an answer on the first one. But we actually expect the occupancy to improve going further this year. And we need to stay flexible over pricing. But as Erik already said during the first quarter. So we see that there's less need in the future to kind of -- to be as flexible on pricing for new tenants. And as Erik already communicated, so we have been already risen the existing tenants rents from 1.4% to 1.5%. Of course, this is not the whole stock, but it's kind of a rolling process. So all in all, so we kind of stay optimistic of occupancy rate. And of course, that's what we think that we have room to improve occupancy also in our legacy portfolio, but especially when combining the new portfolio where there's a lot of potential to improve the occupancy. So in both sides, we expect to improve the occupancy.

And it comes to the impact of the heating cost, of course, that's on the negative side. But when you look at our outlook, there's still many, many moving pieces there. So we estimated what is going to be the remaining part of this year, we don't know the weather factor, of course. And on the positive side, there are some savings we achieved already. And then the acquired portfolio occupancy has been quite strong starting from leasing up that, of course, on the positive side. And then the question mark is when we do the refinancing and what is the price for refinancing. So there's many moving pieces still, and we didn't find any reason to change the outlook at this stage.

The next question comes from Andres Toome from Green Street.

So a couple of questions from my end. Firstly, could you maybe give some more color just around how the sort of the rental market is trending in terms of how in the last few months, the stock of advertised apartments in the whole market has been trending? Is it still going down? Or has there been some hiccups just also looking how the occupancy has trended recently?

Well, I would say that the market supply hasn't come down so far. Of course, as we discussed already earlier that there's definitely a kind of a seasonal effect as well, and that seasonal effect will turn on the landlord's favor in coming months. So that's for sure. So -- but we are not kind of guessing that how will the seasonally adjusted supply will react in coming quarters. But as I said in the very beginning, so we are confident that will ease up in the medium term.

Understood. And then on the Varma portfolio, just wondering just how that portfolio is placed? And could there be any cannibalization to your own existing Lumo stock as you start ramping up Varma occupancy with maybe a bit more aggressive pricing?

I think it's -- if you can see now here, so the split of breakdown of acquired portfolio is 75% of -- in Helsinki region and Tampere region, close to 18% and Turku region, 4.2%. So it's very well located. We don't see kind of a meaningful cannibalization effect or threat as such. So at the moment, it looks like so that the asset is -- as we already we're convinced and when we released the deal that after our DD process that we like the asset pool very much, and it has been kind of verified already in the first weeks of when owning the apartments. So it's -- there's definitely a demand for that. And given the fact that still our overall market share is relatively limited. So we don't see kind of a significant or meaningful cannibalization threat in that sense.

Okay. And then finally, just on the refinancing side as well, you sort of -- Erik, you sort of mentioned that you have a sort of an assumption for your cost of debt there. How is the cost of debt right now in the marketplace versus that assumption? Is it higher? And what are the sort of spreads you're talking about here?

In big picture, it's in line.

It's in line. Okay. And then maybe finally, just on the guidance as well for this year, I guess, not putting words in your mouth, but it sounded like revenue, you see good odds of getting to the midpoint, but maybe on FFO, just because it's been more difficult winter in Q1 and maybe the financing costs have gone up this year, it could be lower than the midpoint.

Yes. It's your assumption. So the building blocks are, of course, there. So the top line growth is proceeding nicely so far. And on the expenses side, some savings can be achieved. And of course, the cost of refinancing plays a role there. But it's too early. I said there are so many moving pieces. It's too early to say in which position in that range we are going to land. But these are the building blocks, if you like.

But we appreciate, Jonathan, your words that you don't try to put words in our mouth.

The next question comes from Celine Huynh from Barclays.

I got 2 questions for you. The first one is on tenant retention. So remember, we've talked about tenant retention at your CMD. And I'm noticing that your tenant turnover ratio has gone up. So if you could please comment on this number? And second question is about your guidance. I'll follow up on the previous question. The Q1 results are quite below expectations. So how confident are you on your guidance? Should we expect FFO to be more on the low end than on the higher end?

Yes. I think it's the latter one, I would say immediately kind of repeat Erik's answer already. So there's many moving points, and we won't give you kind of a guidance for guidance, so to say, or kind of specify more of the guidance. So that will be kind of -- wouldn't make sense at this point. But then on the churn of a tenant, so that's correct that it has increased a little bit, but I would say that it's more linked to the seasonal effect as such than anything else. So not being super worried about that at this moment.

Okay. Sorry, can I follow up on your point about the guidance? Put it in other words, is there a risk that you might miss this guidance?

No. We released our guidance. So I think it tells that we are -- with our best knowledge of the future, which is, of course, limited in our side as well. But with our best knowledge, so we are kind of confident that we will stay in the band of guidance.

The next question comes from Stephanie Dossmann from Jefferies.

I was just trying to reconcile the FFO in euro million and the per share basis. Am I right saying that the FFO per share decreased by something like 6.4%? And is there a reason that you don't guide on a per share basis for the full year? And what's your expectations? I know it's hard for you to reply to this because of the previous questions about the guidance, but that would be because you have per share guidance as well. Maybe this will be the first question. I have a couple of others.

Yes. So we discussed internally whether we should give the guidance total FFO, FFO per share. And we felt that the total FFO is quite prudent. And of course, we released the amount of shares. So of course, it depends on whether we ask you guys to do the math or do we do it for you because we don't anticipate any changes in the amount of shares. So it's pretty much quite easy to calculate that. So that's why we felt that the FFO as we've been giving the guidance in history as well, total FFO. So we felt that we keep giving guidance in that form.

Fair enough. But in your disclosures, it's a bit misleading to see that the FFO per share is flat in Q1, while it's down mid-single digits. So that was my point. The second question is much related to the modernization CapEx. So you launched a modernization program last year. So we see the impact in Q1. What would be the impact for the full year, please?

So we estimate that the full year amortization investment is going to be somewhere between EUR 30 million and EUR 40 million.

And maybe a last one regarding, you said math don't work for new builds. And could you quantify the spread between new builds and existing homes? And I suspect you would not launch new development anytime soon due to the market oversupply. But I just wanted to clarify your strategy going forward on that, please.

Yes. I would say that, of course, it's difficult to give a kind of a precise figure, but in a range of 15% to 20%, it's more expensive to start the new buildups in -- it's 15% to 20% more expensive than the existing ones. And your question that -- or assumption that we are not going to start a new buildup. So definitely not in a meaningful scale. Of course, there might be some kind of a single individual cases where there's, for example, kind of some kind of additional construction or building rights that needs to be utilized or something like that. But apart from that, not any major new developments.

The next question comes from Neeraj Kumar from Barclays.

A few questions on my side. So starting with your LTV, you mentioned that you have a sizable buffer to the LTV threshold of 45%. But may I confirm that this reported number of 42.5% is excluding the recent acquisition, which has EUR 600 million debt associated with it. So how much buffer do you have if you were to include that transaction? And how well you're positioned for a potential valuation decline? So that would be my first question.

So we made a pro forma calculation when we prepared ourselves for the acquisition. And based on that pro forma, we should be still below 45%. And that's our long-term target, and we want to definitely be below 45%, but it's good to keep in mind that from Moody's Baa2 threshold is 50%, 5-0 percent. So we have even bigger buffer for that level. But as I said, our target is to be below 45%.

Sorry, because I was just adding the current transaction and the number I reached was 45.1%. So it looks like you're bang around 45%. So if there was to be any valuation decline, you are kind of reaching your internal threshold?

In that sense, yes, but we don't anticipate that. And we are not giving any guidance for future value changes. And of course, given the dividend policy, the FFO -- big portion of the FFO is left inside the company, and we can use that to pay back loans. So there's a path to bring down the loan-to-value without any actions. And then it remains to be seen where the values goes in the future.

Got it. That makes sense. Also, you mentioned that you have a strong liquidity position. Again, I confirm that the EUR 750 million debt maturing in 2027 is excluding that EUR 600 million bridge loan. So you have nearly EUR 1.5 billion of debt maturing by end of next year?

Correct. And our plan is to approach that refinancing this year, obviously, and perhaps even some part before the summer and some part after the summer, but that's something that we are considering. And in our case, it's good to keep in mind that we have access for different sources of financing. So the bond market is there and it's open and indications are well in line with what our expectations are today. And we have access to bank financing as well. And we've been discussing with the banks to look there as well. So we are confident that we are able to refinance or needs what we have.

Got it. You mentioned that the bond market is open. I was looking at your current 6-year bond, which is trading at a yield of over 4.3%. So is that the kind of refinancing you're using in your assumptions when you're providing a guidance on your FFO? Or are you assuming a bit lower number than that?

So we looked at the different indications. And of course, the tricky part is that today it is something else than it's tomorrow and it was yesterday. But in our calculations, we penciled in a coupon of slightly north of 4%.

North of 4%. That's helpful. And just an associated question with it, like how do we see the impact of this on your ICR going forward given material debt maturities in the next couple of years? You mentioned about Moody's. So the ICR at Moody's was 2.28% for full year 2025. That's much lower than their downgrade threshold of 2.5x. And given the recent increase in interest rates and material refinancing needs, do you see a risk of negative rating action from Moody's in the future?

So of course, we've been discussing with the Moody's, the matrix and ICR is one important KPI there, but it's not the only one. And actually, they are not today looking 1 or 2 specific KPIs and they replace the ICR requirement. And now they are talking about financing strategy, and they take into account in their view all factors. And in our case, they communicated clearly that all other KPIs in our case is strong. And the only one that is slightly under pressure is ICR. And taking all the actions by the company, they estimate that the ICR will go below 2.5x, but they start to improve afterwards. And they say that, that's fine. Of course, they can change their view, but this was the latest discussion with Moody's.

The next question comes from Alex Kolsteren from Van Lanschot Kempen.

A couple of questions at this point. Maybe first on the Varma portfolio, you commented that the leasing is progressing really well. Could you quantify that a bit more?

Actually not -- we are not willing to quantify it anymore, but try to kind of give you an impression with the qualitative measure that it's -- as you said, it's progressing very well and even above our expectations. So we, of course, can quantify the figures then after the Q2 -- in Q2 release. But at the moment, we stay on qualitative measures.

All right. Understood. Then on your reported disposals in Q1, is it correct to assume you sold at an 8% discount to the book value?

In a ballpark, yes.

All right. And lastly, it's been discussed a bit already, the seasonality, which you commented on. If I look back into Q3, Q4 numbers, then you say that typically, let's say, towards the end of the year is when the seasonality effect is worse on your occupancy and now you say it's Q1. So what has led to that change?

I think it hasn't changed that much. The exception was beginning of '25, where our actually occupancy was higher in Q1 than Q4 '24. But apart from that, the Q1s have been a bit lower than Q4.

[Operator Instructions] The next question comes from Anssi Raussi from SEB.

Yes, it's Anssi from SEB again. One follow-up from me. I think you mentioned that you're increasing your rents from 1.4% to maybe 1.5% for your existing tenants. But I guess you're still facing quite significant pressure to keep your rents unchanged for new tenants or even declining year-over-year. So how do you manage this spread? And I guess you might be receiving some angry feedback from existing tenants. So how long you can continue increasing your rents for existing tenants without inflation in new tenant rent?

Yes, you're right that, of course, it can't continue from here to eternity. So that's for sure. So it requires that market improves. We already see that the kind of -- how would I say, the amount of flexibility when pricing the new tenants are decreasing at the moment. So that's very kind of encouraging in a sense. But as you mentioned that if they are going to kind of 2 different directions, the existing and new tenants rent, so it can't carry on for a very long time. But at the moment, we are -- I think -- I would say that we are managing the issue fairly well. And it's, of course, in some cases, you might get -- receive feedback. But on the other hand, as we all know that it's a bit of a cumbersome to move as well. So you might -- if you are happy with your -- if you have a good customer experience as such, so you're willing to accept a bit higher rent than moving to a different location.

One additional note, if I may. So this 1.4%, 1.5% is average the whole portfolio. And we look, of course, how much we increase the rents for existing tenants property by property and apartment by apartment. And already, for example, in Tampere, the rent increases are between 2% and 3% and in some subareas in Helsinki, 0 because of the very reason that the sub area, they are not the same. And that, of course, plays an important role in how much we are able to increase the rents compared to what we do with vacant apartments.

The next question comes from Alex Kolsteren from Van Lanschot Kempen.

Yes. One follow-up question actually on the disposals on that 8% discount. Is that reflective of your wider portfolio in your view?

Actually, no. So all transactions from the market Q1 and all our own transactions taken into account in the valuation and the valuation is made property by property and these 2 were well in line what is our valuation. So no impact in our valuation.

There are no more questions at this time. So I hand the conference back to the speakers.

Thank you. I think we covered so many topics. We only have one left. So it's about the transaction market. So have you seen that there would be a lot of interest from international investors who are actively seeking portfolios in Finland?

Well, there are some foreign interests, and it has somewhat picked up at least in the very beginning of the year. Of course, at the moment, due to the fact that there's a clear uncertainty of interest rate market as such. So that has probably cooled down the transaction market as well. But we definitely have seen kind of during the first quarter already, the kind of picking up the foreign investor interest. And coming back to the transaction market, so -- and perhaps related to the last question as well. So we have seen in kind of some transactions on the market portfolio transactions, which yield requirements have been kind of encouraging as such. So for example, much lower than the one that we released from our acquisition of 4,761 apartments yield requirements. So that's why we it seems so that it's getting healthier, the transaction market.

Okay. Thank you. That was the very last question. So thank you, everyone, for joining us today. We will publish our half year results on August 13. So hope to see you all then. Thank you very much, and have a lovely spring.

And maybe, Erik, this was your last interim report. Maybe you would like to add.

Yes, this is my last interim report and more than 60 altogether on my belt right now. So I really want to thank you all guys participating in these calls and in meetings, and it has been great to work with you and good discussions, good dialogue. So thank you very much for all these years and meetings.

Thank you.

Bye-bye.