Orava Residential REIT

The company name is Orava Asuntorahasto Oyj (Orava Bostadsfond Abp in Swedish and Orava Residential REIT plc in English). The company is a Finnish public limited company whose registered office is in Helsinki and whose business ID is 2382127-4.

The company was established on 30 December 2010 on the initiative of the management company as a real estate fund as referred to in the Real Estate Funds Act. Its rules for real estate investment operations were approved by the Finnish Financial Supervisory Authority on 28 January 2011. The rules were amended in the winter of 2016, and the General Meeting confirmed the amendments on 22 March 2016. According to article 3 of the company’s Articles of Association, the purpose of the company as a real estate fund under the Real Estate Funds Act is to let apartments and real estate which it owns or possesses due to its shareholding, to engage in ordinary housing management and maintenance focusing on its own property, to exercise construction contracting on the company’s behalf and to finance all these operations. Orava Residential REIT plc is a REIT (Real Estate Investment Trust). This is an internationally used abbreviation for a listed fund operating in limited liability company form and investing in real estate that is exempted from income tax on certain conditions. The purpose of the company’s rental and investment operations is to produce good dividends and increase in value for its shareholders. The company owns, rents, develops, constructs and sells residential apartments and properties or entire housing companies. The company seeks to invest mainly in leased apartments producing a good rental income in cities and large towns as well as medium-sized Finnish towns. The company’s financial result is generated from apartment rental income and apartment value changes, from which the costs of liabilities and costs related to apartments and management are deducted.


Orava Residential REIT plc was established on 30 December 2010 (until 30 March 2015, the name of the company was Orava Residential Real Estate Investment Trust plc), slightly more than a month after the Tax Exemption Act entered into force that enabled residential funds in limited liability company form. In the establishment stage, its shareholders’ equity was approximately EUR 5,000,000, which the company received as an assignment of a contribution in kind comprising the entire share capital of two housing companies located in Lahti. Orava Funds plc has, from the start, operated as the management company of the Residential REIT, and Newsec Management Oy was responsible for its technical and administrative housing management and rental until the summer of 2014, at which time Ovenia Oy became a second real estate manager alongside Newsec Asset Management Oy.

During the first year of operations, three transactions were implemented. In March 2011, properties were purchased in Hamina, Hämeenlinna and Tornio. In September 2011, properties in Sipoo and Nurmijärvi were added to the portfolio. In November 2011, a transaction was implemented for the apartments of a new property to be completed in Kauniainen at the end of 2012. During the first calendar year, seven apartments were sold.

The company has been exempt from the payment of income tax since its establishment. In 2012, the company purchased two investment properties in Vantaa and one in Kotka. In addition, four offices were acquired in Jyväskylä and 19 apartments in Tornio. During the year, 25 apartments were sold, the aggregate debt-free transaction price of which was approximately EUR 1.9 million.

During the first quarter of 2013, the company purchased half of the shares in Lahden Vuoksenkatu 4. The technical and administrative housing management of this partly owned property was transferred to Realia Management. In the second quarter of the year, the company purchased the entire share capital of Lohjan Koulukuja 14 and the share capital of Salon Ristinkedonkatu 33. In July 2013, the residential apartments of As Oy Keravan Ritariperho were acquired in the portfolio. In the third quarter of the year, the company acquired a total of five entire properties in Heinola, Kotka, Pori and Varkaus. In the fourth quarter in December, the company purchased three whole properties, two of which were located in Porvoo and one in Oulu. In addition, a transaction was implemented to acquire 85 apartments in 18 different new properties.

In 2013, 41 apartments were sold, the aggregate debt-free transaction price of which was EUR 3.4 million. At the end of 2013, the company owned slightly less than 800 apartments.

The company was listed on the Nasdaq OMX Helsinki in October 2013. The trading code for the company’s shares is OREIT.

During 2014, the company continued growing by acquiring 552 apartments in 20 properties. In the first quarter of 2014, the company purchased two properties (Helsinki, Vantaa) and apartments in one other property in Tampere. A total of 118 apartments were acquired. In the second quarter, the company purchased four properties (Kotka, Riihimäki, Savonlinna, Varkaus) and apartments in three other properties (one in Tampere and two properties in Jyväskylä). Altogether, 157 apartments were purchased from the properties. In the third quarter, a total of 113 apartments were purchased in seven properties, one of which was an entire property in Kotka. In the last quarter, the company purchased three properties (one in Kirkkonummi and two in Rovaniemi), which altogether included 164 apartments.

In 2014, 29 apartments were sold, in addition to two plots. The aggregate debt-free transaction price of the sales was EUR 5.7 million. At the end of 2014, the company owned slightly more than 1,300 apartments.

In the summer of 2014, the company concluded its first convertible bond agreement worth EUR 1.0 million. Altogether, the company concluded convertible bond agreements worth EUR 5.0 million in 2014. The convertible bond agreements were almost wholly converted into the company’s shares by the end of 2014.


The company complies with Finnish legislation, its Articles of Association and the governance principles determined by its Board of Directors, as well as the rules for real estate investment operations confirmed by the Financial Supervisory Authority. In addition, the company follows the rules and guidelines of the Nasdaq OMX Helsinki and the Finnish Corporate Governance Code for listed companies published by the Securities Market Association. The Corporate Governance Code is available to view at www.cgfinland.fi.

In deviation from the recommendations of the Corporate Governance Code, the Board of Directors has not appointed any committees. Taking into account the size of the Group and the scope of its operations, the the Board of Directors has considered that, at least as yet, no separate committees are needed.

Articles of Association

Under the Limited Liability Companies Act, the governance of the company is divided between the General Meeting, the Board of Directors and the CEO. The shareholders exercise their rights primarily at the General Meeting, which is usually convened by the company’s Board of Directors. In addition, a General Meeting shall be held if the auditor or shareholders whose shares represent at least one tenth of all shares issued by the company demand it in writing.
The Board of Directors manages the company’s administration and the appropriate organisation of its operations. Under the Articles of Association, the Board of Directors is composed of at least three (3) and at most eight (8) members. The General Meeting elects the members of the Board of Directors. The term of office of the Board of Directors terminates at the close of the following Annual General Meeting. The Board of Directors elects a chairman and a vice chairman from among its members.

The company complies with Nasdaq Helsinki Guidelines for Insiders.

Nasdaq Helsinki Guidelines for Insiders

Guideline – Notifications of Manager’s Transactions

Under the Limited Liability Companies Act, the Board of Directors manages the company’s administration and the appropriate organisation of its operations. In addition, the Board of Directors is responsible for ensuring that the supervision of the company’s accounting is appropriately organised. The tasks of the Board of Directors also include deciding on strategy, confirming the action plan and the budget, and processing and approving interim reports, financial statements and the Board of Directors’ report. The Board of Directors decides on strategically or financially significant investments as well as corporate acquisitions and contingent liabilities, approves the financing policy, confirms the company’s risk management and reporting practice and decides on the remuneration and incentive system. The Board of Directors also decides on the company structure, is responsible for the dividend policy and the development of shareholder value, appoints the CEO and decides on his or her employment benefits, decides on the appointment of a deputy CEO and is responsible for other tasks laid down for the Board of Directors in the Limited Liability Companies Act or other Acts. In addition, the Board of Directors decides on the following matters related to investment operations:

i. Acquisition or assignment of investment assets if the contract price exceeds 10% of the REIT’s entire capital;

ii. Acquisition or assignment of real estate;

iii. Taking out liabilities;

iv. Entering into administrative and service agreements related to the acquisition and management of the investments and amending them.

Corporate governance statement

Rules of procedure of the Board of Directors

The company’s Board of Directors may authorise the CEO and the management company to make decisions concerning the investment operations referred to in sections ii)–iv) within certain limits. The CEO or a person appointed by the CEO is responsible for other investment decisions and the operational management of investment operations, unless otherwise provided in the legislation applicable to the company.

CEO and the tasks of the CEO

Salary and remuneration statement

Pursuant to article 6 of the Articles of Association, the company shall have a CEO who is appointed and dismissed by the Board of Directors. Pursuant to article 7 of the Articles of Association, the company is represented by the Chairman of the Board of Directors and the CEO, both singly, and any two members of the Board of Directors jointly. In addition, the Board of Directors may grant designated persons the right to represent the company each separately together with a Board member or any two jointly. The REIT’s management company is Orava Funds plc. In accordance with the management agreement between the REIT and the management company, the management fee consists of a fixed part and a performance-based part. The fixed management fee is 0.6% per annum of the fair value of the company’s assets. As a performance-based management fee, the REIT pays the management company 20% of the company’s annual return exceeding 7%. Currently valid value added tax is added to the management fees. The stock exchange price of the share is used for the calculation of the performance-based management fee instead of the net assets per share if the price of the share is lower than the net assets per share. The management company offers, among other things, the following services and rights of use:

(i) The company’s business idea and its development;

(ii) The organisation of the company’s administration and operations;

(iii) The right to use the management company’s Orava name, logo and brand;

(iv) The preparation of the company’s investment strategy, including participation in making investment proposals and proposals concerning abandonment of investments and decisions in accordance with the rules for real estate investment operations;

(v) Planning, guidance and organisation of the company’s investment operations and support function processes;

(vi) Right to use the information systems, such as financial administration, human resources management, portfolio management, value calculation, agreement management and customer management information systems, offered by the management company related to the administration of the company.

The company’s Board of Directors makes decisions on investment operations, but it may also authorise the management company to make decisions on investment operations within certain limits. The management company may, according to a separate decision by the Board of Directors, also act as an intermediary for investment assets and charge a transaction fee from the assignor for its services when the company purchases or receives apartments as a contribution in kind. The management company is responsible for the costs of personnel and office facilities incurred from the REIT’s operational activities. The company has the right to obtain services or rights of use from a third party. The company is itself exclusively responsible for the risks incurred in investment operations and the risks related to apartments and other assets of the company. The responsibility of the management company is restricted to the amount corresponding to the management fee it receives during six months. The management agreement concluded with the management company has been terminated and the period of notice will end on 18 December 2018. The company has signed agreement with Colliers International Finland Oy on apartment management services. The apartment management services include, among other things, real estate administration, rental operations and rental administration, administration of housing companies, financial administration of the company’s subsidiaries and the parent company, management of maintenance activities, and the management and reporting of the technical life cycle. An annual expense budget is drawn up for all managed real properties regarding their maintenance, annual repair and construction contracting activities, approved separately by the company. Members of Colliers International Finland Oy are also members of the Boards of Directors of the company’s subsidiaries and associated companies.

Risk management

Risk management at Orava Residential REIT is based on an ability and willingness to bear risks, knowledge of major risks and the decided risk management policy. Risk management is part of daily operations and part of business management.
The goal of risk management is to identify the main uncertainties associated with achieving targets, to measure and assess the risks identified in advance and to decide on the actions to be taken regarding them. Key risks are classified into strategic and operational risks as well as financial and damage risks. Risks are taken as an inherent part of business, and they are assessed both from the perspective of utilising the possibilities associated with them and from the perspective of mitigating and eliminating them. Risk management is integrated as part of the strategy process, operations management system and business processes of Orava Residential REIT. The ultimate responsibility for risk management rests with the Board of Directors of Orava Residential REIT. It decides on the objectives of risk management, confirms the general principles of risk management, defines the duties and responsibilities and monitors major risks. The Board of Directors approved the valid General Principles for Risk Management on 26 January 2012.
Read the risk management description in its entirety:

Risk management

Mission, vision, values

The mission of Orava Residential REIT is to increase wellbeing by channelling capital to rental apartment investments.

The key parts of the mission are to obtain international capital for the Finnish housing market and to be able to offer Finnish private investors an easy way to invest in apartments. It is the vision of Orava Residential REIT to be the leading residential REIT in Finland in 2025. The implementation of the vision is estimated especially from the perspectives of total return on the share, investor satisfaction and growth of the size of the Residential REIT.

The values of Orava Residential REIT and the related principles are:


  • We do what we promise
  • We act in accordance with acts, rules and good practice


  • We resolve the challenges that we face
  • We invest in learning in order to be the most expert operator in our industry


  • We treat everyone fairly and equally
  • We respect the different values and opinions of our fellow human beings