In the field, conditions in the third quarter were stable. “Despite the expected drop in occupancy, on a constant currency basis and excluding contract termination fees, earnings were up 3.5%. We expect occupancy overall to rise in the fourth quarter. The main drivers behind the company’s rising earnings trend are the high-occupancy completion of our Tampere campus in the city center, as well as the July acquisition of the Gårda campus in Gothenburg, Sweden,” says Keith Silverang, CEO of Technopolis.
Technopolis successfully completed a rights issue in the third quarter. The net proceeds raised through the offering were approximately EUR 124 million. “The purpose of the rights issue was to strengthen our balance sheet after the investments made in the summer and to provide firepower for upcoming organic growth projects, as well as new acquisitions. We have a clear growth strategy and we will keep executing it in a disciplined way,” says Silverang.
In the third quarter, Technopolis started to work on its new growth projects, first launching the expansion of the Helsinki Ruoholahti campus, and shortly thereafter the next expansion phase on the Tallinn campus, Lõõtsa 12. The building permits for the Tallinn project were received this week. The company is also looking at opportunities for organic expansion in Vilnius, as well as in the Greater Helsinki area.
Technopolis will continue to expand also through acquisitions. “The deal flow is improving as we work with the pipeline. Our search area covers the entire Nordic-Baltic region and we are concentrating on campuses that provide the optimal strategic fit, the best upside potential and a healthy risk-adjusted yield,” says Silverang.
Services Boost Customer Satisfaction
Services continue to play an increasingly important role in Technopolis’ operations. Year-on-year, the service business grew by 10% and the share of services in total revenue is now at 12.5%. The company’s EBITDA margin for services was up to 7.6% from 4.8% in January-September 2015. Silverang highlights that Technopolis’ goal is to significantly increase the service margin as the scale of its operations grows.
“We are committed to adding value for our customers through services. Continued service growth indicates that our customers see the clear benefits of entrusting services to us. Providing first class service has had a proven impact on our customer satisfaction throughout our campus network,” says Silverang.
Technopolis’ interim report for 1-9/2016 is available at www.technopolis.fi/investors.
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