EUR 11 million to SRV from Pearl Plaza
This deal wasn’t very impressive, but luckily they got rid of this burden.
Indeed, it has no impact on adjusted operating profit, but it does bring some cash flow to the company.
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Well,
11 million euros from the ownership, and 16,982 thousand shares
→ 64.8 c/share in money from Russia, I wouldn’t have believed this
Pretty good even if it’s just some random money…
Right, this was already written down to zero in the balance sheet, if I recall correctly
Edit: the company’s share price was 4.80 eur/share, so 64.8c/share would be about 13.5%, which is a tiny bit less than 1/7.
Hopefully the past calculations are correct…
This is written on page 84 of the 2023 financial statements, meaning it was valued at zero, but something cryptic immediately follows it
After the completed transaction, SRV’s only remaining asset in Russia is a 50
percent ownership of the Pearl Plaza shopping center in St. Petersburg, which is valued at zero
euros in SRV’s balance sheet. The shopping center is consolidated into the group’s figures
using the equity method. The balance sheet value is compared to the value obtained through a cash flow calculation
to test for possible impairment. SRV’s investment in the shopping center
constitutes an equity investment in associated companies. The shopping center’s
owning companies also have senior debt from local
banks
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Excellent result after a long struggle.
Good money into the company’s coffers to await the payment of the VVK loan.
Today has only brought excellent news from SRV. Hopefully, the Oulu hotel project could still be finalized before Christmas. That would also bring significant amounts into the coffers in the form of bankruptcy supervision and the final contract.
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So indeed, 34 MEUR must be available by summer 2026 to pay off the VVK, or the holder gets the right to subscribe for shares at a price of 4.0 EUR, significantly diluting.
Yep, the Oulu Market Hotel should also be sold, so that both overdue receivables and the money tied up by continuing construction can be brought into cash.
According to Kaleva, the man and his companies had left SRV with as much as 13 MEUR in arrears… That would also be a tidy sum to extract…
https://keskustelut.inderes.fi/t/srv-hinnoitellaanko-rakennusalalle-taantumaa/831/367?u=opa
https://keskustelut.inderes.fi/t/srv-hinnoitellaanko-rakennusalalle-taantumaa/831/201?u=opa
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In my opinion, this can be compared to a business transaction where the company sells a business deemed worthless for €11 million.
If the company could pay/finance the vvk loan in another way, Srv could distribute the entire net sale price as dividends.
As for the Oulu hotel, it’s possible that in addition to the capital, there will also be four years of interest, bringing the total sum to nearly €20 million.
Srv has a significant interest in getting the best possible price for the already leased property. A declining interest rate nicely aids these efforts.
In total, these two “one-off items” would amount to approximately 36%, or over 1/3, of the company’s current value.
“One-off items”, especially when they have a cash impact, are real and should not be overlooked, for better or worse.
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Regarding the Market Hotel, in both SRV’s H1 and Q3 reports, the amount of receivables has risen to 16 million euros and remained there. Operators for the premises have been found: Scandic Go and the 2 Fam restaurant company (two family companies that have run locally significant restaurants in Oulu together), meaning completely credible operators.
However, an investor has not yet been found who would buy the property and complete its construction.
For the city of Oulu, the situation is embarrassing when construction work is stalled in a prime location next to the recently renovated market hall and market square. The European Capital of Culture year is approaching, and in the neighborhood, the pier structures on the shore will be completed, possibly a small sauna world, and likely a massive renovation of the main library. The city seems highly motivated to help complete the project, especially after the regional newspaper Kaleva had previously taken a rather critical stance on the unfinished hotel.
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The amount of the receivable has been 16 million euros since at least Q3/2023. Based on this, one could conclude that the said sum does not include default interest, so the amount to be recovered could be significantly higher if the price obtained from the sale is sufficiently high and/or if the collateral obtained before bankruptcy would also cover default interest.
News regarding the investor can come at any time, and it should not extend beyond Q1/25 at the latest.
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Project in Tampere
SRV and the Pirkanmaa wellbeing services county have signed an agreement for the construction of a new children’s and adolescent psychiatry building at Tampere University Hospital. The contract value for SRV is 31.7 million euros (VAT 0%). The project will be recorded in SRV’s order book for January.
The project will be implemented as a divided contract, with SRV acting as the main contractor and main implementer for the building engineering works. The project will commence with the demolition of the Y-building located on the site of the new building, which will start immediately in January. The new children’s and adolescent psychiatry building will be taken into use in early 2028.
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SRV could be expected to announce the start of the Niittykumpu new development project next week. The project’s reservation rate has risen to 23 out of 53 apartments. There are 5 preliminary reservations. Pre-campaigns conclude on Tuesday. The project’s completion is announced for June 2026. So, all signs seem to point to an imminent start announcement.
Regarding Kokardi, located in Pasila, 3 apartments have been sold since the turn of the year (57 unsold apartments remaining).
I’m not entirely sure, but it appears 2 apartments have been sold from Vantaan Lentue since the turn of the year (I believe there were 20 available before and now 18).
I would expect to hear about the buyer of the Oulu tower hotel property in the near future, so that the hotel can be opened for the increased hotel demand in 2026.
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Balance sheet lightening…
But SRV’s share is probably not even 10%, so if so, 1 MEUR from that balance sheet item.
Well, it’s better to park the money in SRV’s balance sheet under ‘liquid assets’ instead of a parking facility in Tampere…
The joint venture owned by LähiTapiola, OP, Ilmarinen, and SRV, Tampereen Tornit Ky, has sold Kiinteistö Oy Kansi ja Areena Pysäköinti (Tampere Deck Arena parking facility) to a fund managed by the German AIF Capital Group. The value of the transaction is approximately 11.5 million euros.
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Perhaps this is a prelude to detaching from the entire Noria Areena complex. What kind of money would then be discussed?
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They would probably divest if they could get a reasonable amount of money…
I don’t know if those Tampere projects are on the balance sheet in the 2023 financial statements under those total 3.8 MEUR stakes (associates and joint ventures). If so, they don’t seem to be subject to significant overvaluation.
One could perhaps always mention some kind of estimate for those deals, what the received purchase price is in relation to the balance sheet value. There also seem to be revenues on the joint venture side.
And according to page 28, for shareholders, in addition to the Kansi and Areena ownership (8.33%), there is also apparently a 5% stake in Tampere Arena… I didn’t realize during the Ice Hockey World Championships that we were in our own arena…
This is how it was reported on 6.2.2020 about the Tampere deals, where
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Four more apartments sold from the Pasila site since the last update.
In Nittykumpu, the number of available apartments has decreased to 29.
Business is good.
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There’s something strange about the Pasila property on SRV’s housing sales websites.
Currently, the landing page shows that 60/62 apartments are unsold. Yesterday, 56/62 apartments were unsold.
When going through the unsold apartments, it can be noted that 10 apartments have been sold, meaning 52/62 apartments should be unsold.
If the latter is true, the company has already sold eight apartments in January, but due to the inconsistency noted above, confirmation of the sold apartments must be awaited.
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Correction to the previous message.
10 apartments have been sold from the range 1-60. In addition to those, apartments 61 and 62 have been sold. So, 12 apartments would have already been sold, 10 of which in January.
Someone correct me if it’s still “off”.
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If I may still briefly return to the peculiarity of SRV’s housing pages.
On the Niittykumpu project’s front page, it states that there are 29 free apartments out of a total of 53 apartments.
However, when checking the occupancy rate apartment by apartment, there are “only” 27 free, and of these, 2 apartments are preliminarily reserved.
There are 26 reserved apartments.
In other words, the number of free apartments reported on the first page of SRV’s housing website is incorrect. There are 27 free apartments, not the 29 apartments stated on the site. Apparently, there’s a bug on the sites, because it can’t be that an employee manually changes the number as sales progress.
In the Pasila project, the corresponding error is 10 apartments.
The good thing about Niittykumpu is that after the next reserved apartment, half of the units will be reserved, and if commercial premises are taken into account (of which there is 1 in this project), this milestone has just been reached, so the company could finally confirm the project’s start.
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Development target, time will tell what this will eventually lead to, but initially, a foot in the door and development work.
800 million euro total.
SRV and Projekti GH Oy, responsible for the development of the Garden Helsinki project, have signed an agreement on the development of a multi-purpose arena and related hotel, office, parking facility, and residential buildings in Töölö, Helsinki.
During the development phases of the Garden Helsinki project, the project’s design will be jointly developed with the client regarding functionality, costs, schedule, and technical boundary conditions, among other things. The development phase aims to ensure the prerequisites for the successful implementation of the project and the achievement of the client’s goals. If the prerequisites are met, the client will make a decision to move the project to the implementation phase. The current estimate for the construction value of the entire complex is approximately 800 million euros. Construction work for the Garden Helsinki arena complex is intended to start in spring 2026. The project schedule will be specified during the development phase.
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Hopefully, the project will also materialize for SRV. It’s unlikely that any other construction company will be able to push SRV out of the project once it’s realized.
Hopefully, the lessons learned from the Tampere Deck Arena project, especially regarding the bottom line, will be applied to this project, and the tuition fees paid will turn into a positive result. The decision to build the Arena planned for Turku has not yet been reported.
Interest in owning the company is very low, as the news of even such a significant project did not cause more than a normal heart rate on paper.
The announcement of the Oulu hotel project is still pending. At least one cannot accuse them of rushing, although the process is certainly slowed down by the structural inspections required by buyers for structures that have been in a long standby state.
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There was an error in my update six days ago, as apartments 61 and 62 were still unsold at that time (they were on the next page).
According to today’s listing, 14 apartments have already been sold, so SRV has sold 4 apartments this week.
The sold apartments are the following: 3, 9, 11, 15, 17, 19, 20, 23, 25, 27, 38, 43, 48, and 50.
So, sales at the Pasila site seem to be going really well.
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Here are Olli Koponen’s comments on SRV’s involvement in the development phase of the Garden Helsinki project. 
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