A positive decision during an exceptional year – no rent increases for next year
The coronavirus has caused different kinds of challenges for the daily life of both students and our office staff. The situation has also affected the finances of TOAS by, for example, decreasing rental income and causing new expenses. However, our long-term operating method has helped us prepare for unexpected changes and crisis situations, such as the coronavirus.
Our core task continues to be that of making the life of students easier, also during these challenging times. For this reason, we want to help you in whatever way we can. We have decided not to make any rent increases next year. We hope this will help you in your daily life and when making plans for the future.
The occupancy rate will decrease from the planned 96.5 % for this year to 93.5 %. The biggest factor contributing to this is the fact that the normal number of exchange students did not come to live with TOAS in the autumn of 2020. This is reflected in a decrease in income of more than one million euros for TOAS. In this situation, TOAS’s long-term financial management comes into play. The problems of one year are not reflected in TOAS’s core business, ie the construction and maintenance of real estate and housing of appropriate quality and price. In the 2021 budget, the occupancy rate is projected to increase slightly to 95 %. The normal level of TOAS is 97 %.
With zero increases we compete in the increasing competition of rental housing providers in Tampere, but it is equally important to offer the widest possible range of different housing options. The cheapest small studios with a shared common kitchen cost only 125e/month, while at the other end you can find a studio in the city centre that costs 550e/month. In addition, we have locations from which the apartment can be rented without a deposit fee.
TOAS average rent per square metre, comparable to the housing market, is 12.1 €/m2/month in the end of 2019, and rent varies between 8.4 and 18.3 by building. Compared to the housing market in Tampere, TOAS rents are about 23% lower, based on information from Statistics Finland from the year 2019. According to the TOAS strategy, we aim to have rental level 20 % less than the market in general.
The property management expenses are expected to stay as they are, but it is always necessary to prepare for a cold winter. A little less than half of TOAS’s expenses are financing costs: debt instalments and interest payments. The construction of new houses has been reflected in a significant increase in TOAS’s loan volumes in recent years, but with low interest rates, the loan management costs have not increased. The new investments will ensure that the living standards of students in Tampere are improving.
The main figures from the budget 2021:
- Earnings 41 million euros
- Management expenses 22 million euros
- Financing costs 16 million euros
- Surplus 2.9 million euros (for investments)