Translation: Original published in Finnish on 7/28/2026 at 9:17 am EEST.

Toivo Group announced on Monday that it has started a ~14 MEUR residential construction project in a joint venture with Westons in Verkkosaari, Helsinki. The project was originally intended to be implemented as a group construction project before it was converted into an own-development (RS) project and acquired by Toivo and Westons. The project supports our expectations for new project launches weighted towards the second half of the year and demonstrates Toivo's ability to find good projects in this housing market downturn, but the announcement does not cause immediate changes to our forecasts.

Background: a group construction project that failed due to housing market weakness

The background of the project located in the Kalasatama area of Helsinki is unusual. The project was originally a group construction project by Koti kaupungissa ry, and its planning began already in 2021. However, due to weak demand for new apartment buildings, it was not possible to implement the project in its original form. As a result, the plot reservation was transferred to Toivo and Weston Group, and the project was converted into a conventional RS-protected project. From the perspective of investor and project profitability, we believe it is essential that the project plans were largely completed during the group construction phase. With the new operating model, future residents will still benefit from the advantages of the original plan, such as more extensive common areas than usual and a reasonable price per square meter. However, we do not yet have a more precise understanding of their significance at this time. In our assessment, these factors, along with the excellent location by the sea, will also facilitate the salability of the property in the current market.

Completion will support 2027 volumes

A self-developed RS project worth around 14 MEUR would be quite significant for Toivo's size (2026e revenue 74 MEUR), although it is worth noting that it is a joint project with Westons, with whom Toivo has successful experiences from previous joint projects in a difficult market situation. Construction at the site has already begun and is estimated to be completed in early fall 2027. We had previously expected Toivo's project initiations to be weighted towards the second half of the current year, so the project aligns well with our expectations. The recovery of the housing market has been very slow overall, and the observed rise in interest rates is once again challenging the market. However, Toivo has been able to operate against the market current quite well and also implement carefully selected owner-occupied housing projects. The occupancy rate of Verkkosaaren Poiju is likely already reasonable due to its group construction background. Toivo's Sompasaaren Gemma project, also located in Kalasatama, Helsinki, also appears to have gotten off to a good start, with 32/34 apartments already reserved according to the project's website.

In June, Toivo also announced a significant residential project for an investor in the current market situation. Toivo is developing a 15 MEUR project in Puistola, Helsinki, for Premico's housing fund, which has been developed through Toivo's own zoning development process. Construction began immediately, and the property will be handed over to the buyer in September 2027.