Good morning, ladies and gentlemen, and welcome to Kojamo's first quarter's results news conference here at Helsinki. My name is Maija Hongas, and I'm Manager Investor Relations here at Kojamo. Today's result will be presented by CEO Jani Nieminen and CFO Erik Hjelt. After the presentation, we have some time for questions. First, we're going to take questions here from Helsinki, then from the conference call line, and after that, it is also possible to ask questions with a web chat function. Let's get started. The stage is yours, Jani.
Thank you. Good morning, everybody. It's nice to start in Helsinki, where the sun is shining. If we start with the operating environment and the summary of what's been going on during Q1, of course, an easy understanding to start with is that the operating environment has been positive and looks quite good. Of course, the most important megatrend is the urbanization going on, and that creates demand for new apartments in growth centers here in Finland. At the same time, the positive development of employment rate and increase in income levels are providing, according to estimates, they are maintaining growth. If we look at the chart on the right-hand bottom side, of course, in urbanization Finland, the biggest winners are Helsinki region, Turku region, and Tampere region, the three biggest city areas here in Finland.
As well, the other major cities are getting more and more new people from other parts of Finland. As this urbanization goes on, as I said, it creates a lot of demand for new housing. What has been going on during the last months is that we see the rolling number of last 12 months with the number of new building permits going down. It is declining during the last months more rapidly than last year. The production of new housing is returning to normal level. Even after saying that, there will be a lot of new supply in the market during this year, and the declining of the building permits will provide less supply in the market during 2021, 2020 at the earliest.
Still, during this year, there will be a lot of new supply in the market, but as well, a lot of demand in the biggest cities. This urbanization creating a lot of demand is reflected to both housing prices and rents here in the capital region especially. The estimate is that the increase in both the rents and housing prices will be somewhere around 2.5% compared to the rest of Finland, where it's roughly 1.8%. There's a game going on here in Finland that some of the city areas are really the winners, and some of the city areas are not the winners. The divergence is going on. It's jumping. As the trend of regional divergence is accelerating, it's a combination of urbanization going on and the development of different household sizes that creates a lot of demand for rental homes.
The biggest demand for rental homes is in the biggest cities for households of two and one person. Studios and one-bedroom apartments are those apartments needed in the biggest cities. The number of households living in rental apartments has been increasing in all the major city areas and our focus areas. Especially, as I've been saying, there is a global trend that most often households tend to choose rental apartments in the biggest cities throughout the world. It's quite visible here as well that the three biggest cities, Helsinki, Turku, Tampere, roughly half of the households already choose rental living. The number of households living in rental apartments has been increasing in all our main regions where we operate, so all the growth centers.
If we take a look at what creates a situation that people more and more often choose rental living instead of buying the apartment, in my eyes, it's a combination of two different types of attitudes. Of course, in the rental market, there are part of households who are not capable of buying the apartment. They don't have the money. They don't have the access for loans, so they choose rental living. What we've been seeing in the market is that as the prices are increasing and the loan terms are getting more stricter, it's getting more difficult for this type of people to buy the apartment in the inner city areas, and that creates more demand towards rental homes.
The other aspect is that there are more and more people who are choosing to rent the apartment instead of buying the home, even though they would be able to buy the apartment. The reasoning behind there is at least two factors. One factor is that they choose not to take the loan. They do not like the loan. The other factor is that there has been a change in the attitudes, the values in people's minds towards owning different things. It is no longer a status thing to own the apartment. If we look at the Q1 figures, it is easy to say that the year has started as we expected. Things have been going as planned, and our strong performance is visible in all the key figures.
The total revenue was increased by 3.7%, and there an important factor was the like-for-like growth of 2.6% compared to the comparison period where the like-for-like growth was 2.2%. The net rental income was increased by 5.7%. It tells a story that the strategy of us being growing and being able to increase the average quality of our portfolio has been successful. We are more and more efficient. The FFO was increased by more than 20% compared to last year. Of course, it's a combination of the increase of the net rental income and less taxes paid compared to last year. The occupancy rate is on a good level, and it's a matching pair to the like-for-like growth. We've been able to increase the rents. What happened during the Q1 was that the increase in the fair value of the investment properties was smaller.
The fair value change was smaller than last year. Of course, that is reflected in the profit before taxes. The most important key figures are the ones showing the operating performance. In the big picture, our strategy is proceeding as planned, and the fair value of the investment properties is increasing as planned. We are well on the way towards the amount of being a EUR 6 billion company by the end of 2021. If we look at the regional data, as I said, the urbanization is focusing mainly on the three biggest regions: Helsinki region, Tampere region, and Turku region. Even though the other growth cities are growing as well, these are the main areas. More than two-thirds of our assets are located in the Helsinki region.
If we combine the Helsinki region with Tampere and Turku regions, it is more than 83% of our assets located in those areas. If we go through the regional data, of course, we are doing really nicely here in the Helsinki region, as expected. On the other hand, if we pick up another area, in the Jyväskylä area, our occupancy rate is the lowest. Even though the city is doing good, the expectations concerning the urbanization in the Jyväskylä area are positive. There has been a situation, and there is a situation that there is a lot of supply in the market at the moment compared to the growth rate of the Jyväskylä city. A good example is that I looked at the numbers both in Jyväskylä and in Helsinki at the beginning of this week. In Jyväskylä, there were 122 just newly completed apartments available in the rental market.
The number is not huge, but in Helsinki, there were 102 newly completed apartments available in the market. More new apartments are available in Jyväskylä than in Helsinki. That being said, it's easy to understand that it will take a bit of time before the new housing stock is absorbed by the market in the Jyväskylä region. The apartment portfolio is growing, and we are proceeding in line with our strategy. For example, what has been happening during the last 12 months, because it's not the game of what's been happening during the last three months only. After Q1 last year, during 2018, we sold 1,900 apartments. We completed 1,258 apartments. We bought roughly 1,000 new apartments. We've been improving the average quality of the portfolio.
The strategy is that we are going to be a EUR 6 billion company by the end of 2021 by providing 1,000 new apartments a year with the aim of buying 500 apartments a year. At the end of Q1, we had 1,280 new apartments under construction. During Q1, we have made a decision, and we have started 277 new apartments under construction. We are trying to find portfolios to buy. There's a lot of interest in the market towards portfolios, and we have been seeing acquisitions with quite low yields. I have to say that we are financially really strong at the moment. We are able to move fast if and when we will find a portfolio according to our parameters. We will find the 500 apartments from the market on average a year, either by buying a portfolio or by finding one property at a time.
It can be done both ways. For example, this year, we have already bought 99 apartments. After Q1, we bought a property here in Helsinki. It seems that we are well on track with the strategy, and we will be able to proceed with our strategy. An important part of our strategy is that we want to provide an easy and effortless customer experience at all times. We really want to be the customer's number one choice. If we take a look at our thinking concerning the service platform, it's a combination of two things. First, the kind of services we provide for the potential customers and customers entering the Lumo homes. Of course, an important thing there is the Lumo web store, but also a variety of different services available. Then, on the other hand, there are services, an increasing amount of services for people living in the apartments.
Services during the tenancy. Also, on that part, it's important to create the experience of easy and effortless living, to be able to provide better urban living. Lumo web store has been a great success. Today, more than 10,000 apartments are already done through the web store. Today, close to 11,000. It's a fully automated service operating 24/7. Tenants are able to choose the apartment they like, pay the first month's rent, and move in even tomorrow. Here in Helsinki, more than half of all the new tenants are coming through the web store. It's really helping our business. Actually, what it's providing, it's providing an easy and effortless experience for those people moving inside Finland towards the biggest cities. On the other hand, providing services for the existing clients is as important. We launched a new service, MyLumo, during Q1.
Already during the first month, more than 8,000 customers took it in use. Today, more than 10,000 customers are already using the service. They are able to pay the rent, follow the rents, make announcements that something could be wrong, get information, and things like that. It's an important and growing service. I think one of the unique qualities in MyLumo service is that it's a really open platform. We will be able to bring in new kinds of service providers in the future. That development is going on at the moment, and we are collecting data and wishes from our customers as well. If I now would provide the opportunity to our CFO, Erik Hjelt, to provide more detailed information.
Thank you, Jani. Good morning, everybody, from my side as well. On page 13, that shows the revenue growth of EUR 3.3 million, representing 3.7%.
That growth was mainly driven by completed apartments by EUR 3.9 million, and that's offset by the disposals. The impact of the disposal, EUR 3.9 million as well. Acquisition contributed EUR 0.9 million for the top line growth. Rental increase is EUR 1.8 million and improved occupancy EUR 0.6 million. During the Q1, actually, disposal was only one apartment, and acquisitions 16, 16 apartments, and completed apartments 61. For total revenue, of course, impacted by disposals, acquisitions, and completions during 2018. Profit before taxes contributed by net rental income increased EUR 2.7 million, and SGA expenses EUR -0.2 million, and financial expenses saw some growth. In financial expenses, there are actually two lines that changed. One is that, of course, the underlying loan portfolio is bigger than in the corresponding period, but there was roughly EUR 1 million negative impact for interest rate derivatives.
We do apply hedge accounting, but when the fair value or interest rate derivatives is changing, then it has a minor impact for the P&L side as well. IFRS 16 implementation of that had a EUR 0.6 million impact for financial expenses. If you look at this impact of implementation of IFRS 16, it improved the net rental income by EUR 0.9 million, and it increased the financial expenses by EUR 0.6 million, and it increased EUR 0.3 million, the change in fair value of investment properties. On the profit before taxes, of course, the impact is zero. The main impact for us for implementing IFRS 16 is coming through land leases. Land lease agreements are now shown on the balance sheet side, and the impact in P&L leases is in the different lines.
If we then look at the profit excluding the change in fair value of investment properties, that grew. If you look then at the total profit before taxes, that showed a 20% decline, mainly due to the fact that the change in fair value of investment properties was still a positive figure, but smaller than in the corresponding period. The total change was EUR +10.4 million, and that includes the modernization investments, the negative figure EUR -2.6 million. For the positive figure, roughly half of the impact was due to the fact that there were apartments that their restrictions ended. Another part came from the changes in transaction prices in the market. The impact for transaction prices was rather moderate, and the fact there was that during Q1 this year, the amount of corresponding transaction prices was rather limited.
We applied this transaction price-based valuation technique, and there has to be a minimum of four transactions that are comparable for each apartment in our portfolio. There was a limited amount of these corresponding transaction prices during Q1 this year. Page 14, net rental income grew EUR 2.7 million, representing a growth of 5.7%. The growth rate is bigger than in top line, and that shows that the net rental income margin is improving. There are two different lines that are moving in a different way. One is that maintenance expenses was EUR 1.4 million, a higher level than in the corresponding period. There are basically two drivers behind that. One is that property taxes was EUR 1.1 million, higher than in the corresponding period, and the winter was harder than in the corresponding period.
It's good to note that the interpretation on IFRIC 21 was changed last year, and the property taxes are recognized as expenses in Q1, the whole year's property taxes. On the positive side, repairs are lower, EUR 0.9 million compared to the corresponding period. This is the main factor why we revised slightly our outlook for FFO for this year. The repairs are on a lower level compared to the corresponding period, and we made an estimation of how these repairs are going to be going forward this year as well. On the FFO side, there's, of course, a positive figure, net rental income contributing EUR 2.7 million for the FFO. Interest rate expenses have some negative impact. It's good to note that the current tax expenses were EUR 3.5 million less than in the corresponding period. That's mainly due to the reason of allocation of taxes.
There are no specific tax savings compared to the corresponding period, but it's related to allocation of taxes. Page 15, gross investments, EUR 38 million, representing mainly ongoing development activities. We sold one apartment, showing EUR 0.3 million there. If you look at modernization investment and repairs, they are both below the level in the corresponding period, modernization investment with EUR 0.3 million and repairs with EUR 0.9 million, as discussed. The value of investment properties increased in line with the strategy. IFRS 16 had a EUR 60 million , a little more than that impact if you compare the amount of investment properties at the end of last year to the amount of investment properties at the end of Q1 this year. Ongoing development contributed EUR 35 million, and change in fair value of investment properties, EUR 10.4 million.
On the right-hand side, it shows the amount of apartments under each valuation classes, and these two upper parts show the amount of apartments that are still under restriction related to valuation. In total, 6,225 apartments, and they will come out of the restrictions gradually between 2019 and 2025. On average, we have got an uplift in values when apartments come out of the restriction of EUR 40,000 per apartment. On page 17, we saw a slightly new breakdown of plots and real estate development reserve. Hopefully, this is more informative than what we used to have. On the upper side of the picture shows plots and real estate development sites that the company owns, and plots representing pure land. There we have 78,000 sq m of plots and existing residential buildings, meaning they are still cash flow-generating buildings.
The idea is to demolish the existing building and build a new one. There we have 40,000 sq m. Conversions mean mainly so-called metropolia properties, and on top of that, so-called Eerik 7 properties in the heart of Helsinki. It's a conversion project as well. These have a sq m amount of 85,000. These, of course, depending on what is the average size of the apartments, but these are providing us roughly 3,500 apartments. The lower part of the picture shows binding agreements and reservations for plots and real estate developments. This one is including preliminary agreements with the construction companies, agreement for the construction and acquiring the land, EUR 123 million. We estimate that the portion of land included in that figure is EUR 24 million, representing 37,000 sq m.
These agreements and reservations for plots, that's again pure land, 73,000 sq m, and these two put together roughly 1,700 apartments. At the end of Q1, we had ongoing development projects for 1,280 apartments, invested already EUR 125 million, and to be invested to complete this project, EUR 103 million. Occupancy rate stayed stable compared to the end of last year, but showed improvement from the corresponding period and tenant turnover. These levels seem to be the new normal, if you like, for commercial residential market here in growth areas of Finland. Equity ratio well in line and loan to value well in line with the financial targets. Equity ratio target for us is to be above 40% level and loan to value to be below 50% level, and we are well in line with these targets.
It's good to note if you compare the equity ratio at the end of last year and the equity ratio at the end of Q1, that the dividend was paid EUR 71.7 million, meaning roughly 1.3 percentage points impact for the equity ratio. Implementation on IFRS 16 had an impact of 0.5 percentage points for equity ratio because from the asset side and the liability side, roughly EUR 60 million was booked. The implementation on IFRS 16 had a 0.2 percentage point impact for loan to value as well. Equity per share and EPRA NAV improved nicely. EPRA NAV stood at 11.55 at the end of Q1. We still have a versatile capital structure. We didn't make any new loan arrangement during Q1. Half of the loan portfolio from the bond market and the other half from the Nordic banks and local commercial paper market.
On top of these figures, we have a commercial paper program, EUR 250 million, outstanding commercial paper, EUR 50 million, and we have committed credit lines, EUR 300 million. We have still strong financial key figures, average interest rate 1.8%, including the cost of derivatives, and we are quite conservative when it comes to the interest rate hedging. The hedging ratio was 93% at the end of Q1. There are no major refinancing needs for the next coming years. Now, back to Jani.
Thank you. At this last section, we will go through the financial targets and our outlook and, of course, the dividend policy. If we start with the strategy, we are progressing towards our strategy targets as planned. We have to keep in mind that our strategy has different elements, so it's a combination of different aspects.
The first strategic goal and target is that we are going to be a EUR 6 billion company by the end of 2021. That tells that we want to grow and we are able to grow. In order to get there, we are providing roughly 1,000 new apartments a year and buying an average of 500 apartments a year. The other aspect tells that in order to get there, we are not willing to grow at any cost. We want to keep the FFO level above 32% of the turnover. Actually, we want to grow in order to be even more efficient. At the Q1 situation, the FFO percentage of the total revenue was below the strategy target just because the property taxes are recognized as full for the whole year during Q1. This number will increase throughout the year and is above the strategy.
The third aspect is how we handle the risk factor. We want to keep the equity ratio above 40% and the LTV ratio below 50%. That is, at the moment, very solid. Both figures are really strong. The last aspect is, of course, we want to provide good service to our customers, and the aim is that our net promoter score will be 40 at the end of 2021. The number at Q1 was lower; it was 28, and we made a big questionnaire to existing clients during January, actually during the same week when they received the letter concerning the rent increases this year. Probably the timing was not the best possible. Of course, we are measuring the NPS all the time from different angles, so I do believe that the number will increase throughout the year.
As Erik already said, we have made calculations and estimates concerning 2019, and we have specified our outlook. We are keeping our outlook the same concerning the increase of the total revenue being somewhere between 2% and 7%, and the target that we will be investing in new development and housing stock acquisitions at least EUR 300 million this year. We made a change and specified the outlook for FFO based on the fact that we do have a strong operating performance, and our estimate is that we are spending slightly less money on renovations and modernization investments than estimated before. These factors created a situation that we specified the FFO range is a bit more narrow and a bit upwards. The dividend policy, there are no changes.
We want to be a stable dividend payer with annual yield of payment being at least 60% of the FFO, provided that the equity ratio is above 40%. During Q1, the dividend from 2018 was paid, and it was EUR 0.29 per stock and 62% of the FFO. If we move to summary, as I've been saying, we have been proceeding in line with our expectations. The operating performance is strong. There have been no surprises. We are really confident concerning this year. We are proceeding as well in line with our strategy. It's on a solid base, even though some sounds. We are providing new homes, close to 1,300 apartments under construction at the moment. We are improving the average quality of our housing stock. Our aim is to sell roughly 500 apartments till this year. Non-core apartments, according to our strategy, don't fit our strategy.
We are, of course, trying to find portfolios available or making off-market deals like we bought 83 apartments here in Helsinki, Somerontie, one-bedroom apartments and studios. We have to find all the time new ways in order to create organic growth. At the moment, we are in a process with a reverse tendering process, asking the construction companies what they would be able to provide with roughly EUR 100 million. After we get their ideas, of course, then we move to possible making decisions concerning the investments if there are projects available according to our parameters. The third aspect in a summary, of course, we want to be the front runner providing excellent services and easy and effortless living. We do believe that being able to provide services and high-class customer experience and new kind of digital services is one of the key issues for our success.
Not the only one, but one important part of our success. That being said, I think we are closing the presentation, moving towards the questions. As I understand, we are starting here.
Good morning, Harri Paakkola from Nordea . First of all, regarding the FFO guidance, it was raised due to the lower repair costs. Is that something that is being pushed to the next year, or what was the reason behind that?
There are, of course, some uncertainties concerning the timing, whether the project will be ready this year or whether we will have the time to start it. Overall, the change was EUR 2 million, so not that big. It was our best estimate at the moment.
That is something that could be pushed into the next year?
Yeah, could be.
Most often things happen in such a manner that we do have the plan, and then it gets postponed a bit.
How do you see the staff cost saving potential if the web store is getting more popular? Do you believe you could reduce some staff cost if you get more of the rental agreements made through the web store?
That question has not been on the table yet. Being able to provide web store services, it makes a big difference on your processes. You have to be able to provide high-quality information concerning the apartments, high-quality photos. The processes are changing, and still at the moment, even though here in Helsinki more than half of the tenants are coming through the web store, we are providing services the old-fashioned way as well.
It's not the question of today, but in the long run, of course, it will change the industry and the way we operate.
Our aim is to keep the euro-wise to SGA expenses on the current level despite the growth of the company. In total, we are looking to be more effective going forward.
I think it provides an efficient way for us to grow and be able to take care of a bigger portfolio without hiring much more new people.
Regarding VVO conversions, they were clearly lower now in Q1. How are they distributed throughout the year?
If you take that one.
If you look at the number of apartments coming out of the restrictions, Q4 is by far the biggest amount of apartments coming out of the restrictions.
Q1 was clearly lower, but the second biggest, and then Q2 and Q3 are where we have the smallest amount of apartments coming out of the restrictions. The other thing is that the amount of apartments is not directly linked to the amount of positive uplift in the value because the EUR 40,000 per apartment, that's average. Our estimate is that, in any case, the amount of positive uplift is going to be bigger going forward this year.
Regarding, can you say anything about the timing of divestments in 2019?
As I said, our aim is to sell 500 non-core apartments by the end of this year.
You talked about the good transaction market. What kind of yields have you seen in the Helsinki region? Transactions?
Very low.
Low threes?
Low threes.
The last for my part about the cost inflation in construction.
Has that changed significantly?
We were just talking about this yesterday, and the statistics from the last 12 months, as in this presentation as well, show that there has been an increase all the time in the construction cost. Even though there's new information available concerning how the construction companies are doing at the moment, not yet there have been significant changes with the prices. There are more projects available, but still, I would say that the increase of the construction cost, the speed has been turning a bit down, but not like dropping down.
Okay, actually one more still. In the outlook, you talked about the increasing like-for-like rental growth, and that is driven by the strong demand and migration towards growth regions. Do you expect the like-for-like growth to accelerate this and the next year?
I would say that the like-for-like growth at the moment being 2.6% is on a fairly good level, and our estimate has been that it's around 2.5%-2.6%. There have been no surprises for us, and I think that's the level.
Okay, thank you.
Hi, Erkki from Inderes . A couple of questions from me as well. First, okay, all-time high number of apartments completed in Finland this year. You guys seem to ignore, at least for the time being, the risk of oversupply and the impact of that on rental levels. You talk about 2.5%, but how sustainable do you see that this is towards the end of the year and next year?
I think once you enter the commercial rental apartment market, you have to be ready for competition. That's something that I think the players are not used to here in Finland.
We do believe in our processes and in our capabilities and our way of providing customer experience. Of course, we enter in situations where there is a micro-location providing a lot of supply towards the demand, but it will take a bit of time before it is absorbed by the market. In the long run, if you are making investment decisions in apartments, in our eyes, it is a long-term decision based on the demand in the long run, not on the demand for the next couple of weeks or couple of months. We are investing more than EUR 300 million a year, so it is not based on how things are going for the next couple of weeks. There is too much conversation going on about what is at the market this week or next week.
Okay, thanks. Then secondly, could you provide us with an?
Would you provide additional information?
Some addition to that is, of course, it's good to look at the organization as discussed earlier here as well. The organization strength is very strong, and the latest estimate shows that it's even accelerating. People are moving towards these seven growth areas in Finland, especially the Helsinki region. Just yesterday, I heard one good way to look at it, that one omnibus amount of people are moving towards the Helsinki region every day. That creates the demand. This amount of new construction that is ongoing is the highest level that the construction company actually can now do. Their capacity is in full use, and this seems not to be enough to cut down the backlog created here in the Helsinki region during the financial crisis. That is, of course, one of the main drivers for growing demand for apartments.
That was our main decision-making based on long-term information and long-term demand.
Okay, thank you. Then secondly, could you provide us with an update on what kind of new adjacent services do you intend to launch and when? I'm referring to the likes of shared cars, parts of services, etc. How big a business could this become?
Of course, being able to provide services is a long way, but it's an important factor for us. We are all the time scanning, collecting data from our customers and different kinds of companies like startups. I think we will be living in the world where we launch new services and make a pilot project and see whether the clients are appreciating them, whether there's a demand for those kinds of services. It's a different lifecycle thinking and a strategy with services than with portfolio investments.
If we make an investment decision that we are building a new building, it's based on long-term things. Services are a short-term strategy because the demand will be developing and changing. Whether it's going to be a big business as a separate thing, we don't know yet. I don't believe that, but I do believe that it will make our business better, that we will be doing better, and we will be able to provide brand value.
Okay, thank you very much.
Yes, Svante Krokfors, Nordea. Perhaps a follow-up question on the urbanization and how that drives demand. Have you split up how much the decreasing household size also impacts that demand? Is it an extra boost or?
Yeah, I think, as I said, it's a combination of both things, and it's really hard to say which part has an impact of how much.
On the other hand, these both trends have been going on for some time already, creating a lot of demand for small rental apartments. We see that most often households buying an owner-occupied home are married couples with more than two children or two children at least. These smaller households are most often renting the apartment.
Okay, thank you.
I would still add that one portion of the growing number of smaller households will be the aging people here in Finland. The amount of senior citizens are increasing, and I think that's something that we have to take in account with providing the services and which kind of home we are providing in the future.
Okay. Regarding the transaction market, you said that deals have been done at low yields.
Can you say what's the yield gap between what you would be willing to pay and where the transactions have been made? Is that 50 basis points?
I won't provide an exact figure. I would say that we are trying to find good deals according to our parameters, and I think that our EPRA initially provides information that on average we are doing okay.
Looking at the other way, if you think that deals are too low for you to buy, could you consider selling something bigger, good quality portfolio, or are you restricted by your volume targets?
I would answer in such a manner that we are sticking with our strategy. We want to grow. We will be a EUR 6 million company by the end of 2021. On the other hand, of course, we are following the market really closely, and we are a professional residential investor.
It would be rational to keep on selling some of the properties if the market is hot in order to improve the average quality of the portfolio. I think throughout the years, even after us selling the 500 non-core apartments, we will keep on some level possibly to sell some of the portfolio throughout the years. I think in my eyes it's like a basic thing in an investment company to take care of your portfolio.
I don't know if you can give clarification on that, but the deals where you have not wanted to pay the high price, do you see that the demand is coming from participants that can use more leverage, or is it buyers that pay pension fund-like money that doesn't use any leverage?
It's been already for a couple of years a combination of the local players being interested in finding portfolios, but especially the growing interest from international players. Most of the recent deals have been done by an international investor. Of course, we've been seeing that the yields in Europe have been quite low, and that has been increasing the interest towards the Finnish market. We ourselves sold 1,600 apartments last year to Morgan Stanley-operated funds.
Okay, thank you.
Thank you.
Jussi Nikkanen, Handelsbanken. You mentioned the number of apartments under restrictions to levels of 2,000 and 6,200. How has that developed during the last year, and can you give an estimate on the number of apartments where the restrictions are elapsing during this year and the next?
Would you provide the information?
This year, the amount of apartments that are coming out of the restriction this year in total is a little more than 1,400, and roughly 300, actually 319 already came out of the restriction during the Q1 this year. 319 already came out of the restriction, and a little more than 1,400 is the total amount of apartments coming out of the restriction this year. These apartments coming out of the restrictions going forward, it's coming down gradually between 2019 and 2025. We haven't given exact figures for each year going forward, but that gives an idea of how that goes.
The vacancies, what's the level that you are perhaps targeting for or settling for?
I'm satisfied with the current level, but I do believe that we are able to improve it.
I think in the overall picture, the occupancy rate, if you look at it the other way, is quite often talked about and considered as one of the most important KPIs. In my eyes, it's an important KPI, but not the most important KPI, because at the end of the day, it's quite an easy KPI to improve. You just spend money. You lower the rents and increase the amount of the renovations. I think we are on a fairly good level. In total, the amount being roughly 97, and being around 97 on the total portfolio level, it's okay. Thank you. I'll be moving forward. To the line. Are there any questions online?
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There will now be a brief pause while questions are being registered. There seems to be no questions, so I'll hand the word back to the speakers for any final comments.
Thank you. I'm passing it to you.
Thank you. Actually, it seems that we don't have any questions from the web either. Thank you for coming today or listening to us from the web or the conference call line. We are going to publish our half-year report on the 23rd of August, so hopefully we will see you then. Thank you. Thank you.