VALUATION REPORT ASUNTO OY VUORIKATU 6 (SHARES 1-142) OFFICE UNIT LH2, 142 sq m VUORIKATU 6 00100 HELSINKI Value Date: 3.2.2021 The Date of the Report: 9.2.2021 CONTENTS DESCRIPTION OF THE ASSIGNMENT • Contents and Description of the assignment • The valuation report is ordered by Harri Saravuo, PKS Retail Oy for • Property Description financing purposes. • Location and Area • The purpose of the valuation is to define the market value of the office unit. • Site and Town plan The valuation currency is Euro. • Building, Pictures and Floor plans • The valuation object is the shares 1-142 of Asunto Oy Vuorikatu • Rental income • 6, located at the address Vuorikatu 6, 00100 Helsinki. The shares • The Property Compared to Market entitle the holder to control an office unit LH2 with lettable area • Market review of 142 sqm. The valuation object is described more detailed on • Economy page 7. • Corona – Material Valuation Uncertainty • The valuation report is conducted by Tiina Kykyri as the • Investment Market responsible valuer and Kaj Söderman as the controller of the valuation. They both act in this valuation in the capacity of an • HMA Office Market independent valuer. • Comparable transactions • Tiina Kykyri has visited the valuation object and made an external • Valuation and internal inspection on 3.2.2021 and gives more information • Valuation assumptions and parametres about the report: • Market Value and Summary [email protected], • Basic principals, Terminology and Liability +358 50 530 4664. • Data used in the valuation • The valuers are qualified and have the required experience. • The valuation is based on information regarding the property and Due to the outbreak of the Novel Coronavirus (COVID-19), at the valuation date its surroundings received from the client, from public registers we do not consider that we can rely upon previous market evidence to fully and from other information sources. inform opinions of value. Our valuation is therefore reported on the basis of This valuation has been conducted in accordance with the rules ‘material valuation uncertainty´. • of the Property Valuation Board of Finland Chamber of Please also note our commentary on the ongoing COVID-19 situation on page 10- Commerce, Good valuation practice (Finnish regulations) and 13 of this report. International Valuation Standards (IVS 2020). 2 PROPERTY DESCRIPTION LOCATION AREA • The valuation object is an office unit located in Kluuvi district in • Kluuvi is a district which covers majority of the Helsinki Helsinki, on the street level at the address Vuorikatu 6. commercial centre. The district is bordered by Mannerheimintie • Vuorikatu is located in Helsinki city centre. Distance to the main on the west side, Pohjoisesplanadi on the south side, Unioninkatu railway station is ca. 500 meters. on the east side and water areas on the north side. • The property is easily reached with public transportation. Nearest • Majority of the buildings on the area are in commercial use metro station is Helsinki University, located ca. 50 meters north including shopping centres, offices, high street retail and hotels. from the property. Several bus and tram line stops available in There are also some residential properties, and some commercial immediate vicinity. properties have residential units in the upper floors. • All the Helsinki centre services are located in immediate vicinity • On the west side of Vuorikatu the buildings are in residential and within walking distance. Kluuvi shopping centre is located only office use. On the east side the properties are mainly occupied by few steps away. University of Helsinki. 4 PROPERTY CITY PLAN PROPERTY INFORMATION CITY PLAN Address Vuorikatu 6, Helsinki Valid from 6.11.2009 Register no 91-2-2-2 Planning symbol AK, site for residential buildings Site area 1,288 sq m Building right 5,400 sqm above ground and 300 sq m underground. Possession Freehold, owner Asunto Oy Vuorikatu 6 In addition 250 sq m reserved for warmed and covered pedestrian areas. Easements Easements concerning common wall, ways in the wall and structures. The easements are typical for the city Other In the buildings with street facades the first floor centre asset. must be reserved for commercial use. Encumbrances The property has mortgages worth 900,000 €. Building protection Sr2, protected building that can not be demolished, or repaired so that the style of the street side façade Description of the The rectangularly shaped site is bordered by or roof is altered. site Vuorikatu on the east side, and neighbouring properties on other sides. 5 BUILDING HOUSING COMPANY BASIC INFORMATION The housing company Asunto Oy Vuorikatu 6 ownes two mainly Year of construction 1922, refurbished 1997, new part contructed 1998 residential buildings located at the address Vuorikatu 6. AB-building Type of use Residential, office and retail building is completed in 1922 and renovated in 1997. C-building is completed Number of floors 5 ja kellari in 1998. The premises controlled by the shares are divided as Area 4,001.4 sq m according to articles of association follows: Parking spaces The building doesn’t have parking spaces. However TYPE UNIT AMOUNT AREA, sq m there are several private parking halls operating in immediate vicinity (closet Kluuvi within 50 meters Residential 57 3,025.4 from the building). Other 1 22 Retail 3 191 TECHNICAL DATA Office 8 763 Frame Concrete, brick TOTAL 69 4,001.4 Facade Concrete, brick In addition the company has control of the basement, storage and Roof Goblet roof covered with bitumen/steel technical facilities. Heating District heating Ventilation Natural ventilation According to the housing manager’s certificate the fees are as follows: Water and sewage Municipality • Maintenance fee: 5.0 €/share/month CONDITION AND LONG TERM REPAIR PLAN • Capital fee no 1: 0.8 €/share/month The building has been totally renovated in 1997-1998, including Capital fee no 2: 0.5 €/share/month heating and plumbing, electrical engineering, facades, interior • construction work and elevator cars. The company has two loans concerning roof renovation (capital fee no 1) and attic repairs/renovations (capital fee no 2). At the time of According to the long term repair plan confirmed in the general meeting valuation, the exact amount of loans was not known. According to in 18.5.2020 the planned renovations for the next 10 year equal to house manager’s certificate dated 31.10.2017 the total amount was 764,000 € (ca. 1.6 €/sqm/month). The largest renovations needs 298,888.67 €. concern the roof coating (30,000 € in 2020-2021), façade, window and In this valuation we have not taken into account the balcony renovations (350,000 € in 2022-2023) and bathroom/shower company loans which are the responsibility of the shareholder. room renovations (300,000 € in 2024-2028). 6 VALUATION OBJECT RENTAL INCOME AND EXPENCES The valuation object is the shares 1-142 of Asunto Oy Vuorikatu 6, The unit is currently leased to Unigrafia Oy. The Rating Alfa status of entitling the holder to control an office unit LH2 with lettable area of the company as at 9.2.2021 is AAA, excellent. The agreement is valid 142 sqm. The unit is located on first floor with direct access from until further notice with 4 months notice period. The monthly rent is Vuorikatu and from inner yard. The floor plan is presented below. 4,200 € (29.58 €/sqm/month). The rent is tied to changes in cost of living index, and adjusted annually (upwards only) starting in 2022. The office unit consists of open office with one conference room, According to KTI the average market gross rent in the Helsinki city kitchenette and two toilets, of which one is equipped with shower. centre offices, in new lease agreements (size 51-200 sqm) was 30.9 The walls are painted white and the floor is covered with grey €/sqm/month in September 2020. The median level was 30.0 carpet. The unit has been totally refurbished (including the €/sqm/month and the lower-upper quartile range 27.0-33.4 ventilation unit and tubes, electricity, lightning, toilet and shower €/sqm/month. premises, kitchen and surfaces) during the summer 2020, and is in excellent condition. The office unit is equipped with cooling. In the prime CBD locations (Aleksanterinkatu, Eteläesplanadi, Pohjoisesplanadi and the immediate side streets) the asking rents in fully refurbished offices are roughly 40.0 €/sqm/month, even higher in some particular assets. Although the distance to Aleksanterinkatu is only some 100 meters, the location of the valuation object is clearly more modest and remote compared to the prime locations. Also it is located on the street level, and the windows on Vuorikatu side are rather small. However the condition of the unit is excellent Therefore we believe the accurate market rent level in the target unit to be close to the average and median level, 30.0 €/sqm/month. In our calculations we have adopted the current maintenance fee of 5.0 €/sqm/month as operating and maintenance cost. In addition a capex reservation of 1.6 €/sqm/month, based on the current long term repair plan, is adopted for the cashflow period of 10 years. For terminal value a slightly lower reservation of 1.0 €/sqm/month is adopted. We have adopted a long term vacancy rate of 3% through the cashflow, which reflects the tenant rotation (average 3 year lease agreement with 2 months void in between). 7 PICTURES 8 MARKET REVIEW CORONA - MATERIAL VALUATION UNCERTAINTY RICS MATERIAL VALUATION UNCERTAINTY CLAUSE The Coronavirus (COVID-19) pandemic rapidly changed the outlook The outbreak of the Novel Coronavirus (COVID-19), declared by the for the world economy, the Finnish economy and, of course, the real World Health Organisation as a “Global Pandemic” on 11 March estate market.