Strategy

Strategy

From 2019 to 2023, the company operated under a development-construction-ownership business model. In operating under this business model, the company has made the following observations:

• Development: The typical duration of the development stage is 2–4 years. This stage ties up approximately 0–5% of the equity required for the project. The return on equity in the development stage is 0–50%.
• Construction: The typical duration of the construction stage is one year. This stage ties up approximately 20–50% of the equity required for the project. The return on equity in the construction stage is 20–50%.
• Ownership: The typical duration of the ownership stage is over 50 years. This stage ties up approximately 40% of the equity required for the project. The return on equity in the ownership stage is 5–10%.

Toivo’s change in strategy is a matter of using equity more efficiently and allocating it to the most productive purposes. The new strategy also provides better protection from changes in interest rates.

The change in strategy in practice

Business strategy:

Development, construction, ownership/selling of apartments and community properties.

Business volume:

EUR 100 million by the end of 2026.

Target distribution:

• Approximately 50% of the volume will produced for the company itself
• Approximately 50% of the volume will produced for others

Selling:

Most of the company’s own annual production will be sold.

Investment criteria for apartments:

• Only in the Helsinki metropolitan area, Turku and Tampere
• Energy efficiency class A
• Ordinary apartment buildings and area development projects
• Aligned with Toivo’s concept and business model.

Criteria for community properties:

• Only long leases (over 10 years)
• For the best tenants in the industry
• Properties characterised by Toivo’s expertise in building technology
• Aligned with Toivo’s concept and business model.