Apartment buildings. Photo: Emmi Korhonen / Lehtikuva
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Nineteen housing companies owned by the same developer are facing bankruptcy proceedings in Finland, with unpaid debts exceeding €4.4 million, according to filings submitted this week to the District Court of South Ostrobothnia.
All the companies are owned by Lakea, a property developer based in western Finland. The bankruptcy petitions were filed by Kuntarahoitus, a publicly owned credit institution that finances state-supported housing construction.
The housing companies are located in cities including Espoo, Vantaa, Jyväskylä, Turku, Kuopio, Järvenpää, Riihimäki, Vaasa, and Seinäjoki.
The affected buildings were developed under Lakea’s omaksi financing model. In this structure, residents pay an initial 7% of the property’s total price, followed by monthly payments that include rent and a partial contribution toward ownership. After 20 years, residents can purchase the apartment by paying the remaining balance.
Timo Mantila, CEO of Lakea, confirmed that the company has failed to make required payments to Kuntarahoitus on behalf of the housing companies. He cited prolonged financial difficulties and slow property sales as key causes.
“The housing market has been weak, and units in the omaksi model have had to be rented rather than sold,” Mantila said. “In better market conditions, we would sell more apartments than we have to take back. Now it’s the opposite.”
Mantila also noted that when omaksi contracts are terminated early, the resident’s paid capital must be refunded, putting additional strain on the company’s cash flow. He emphasised that tenants have generally continued paying rent on time and that the financial issues stem from the broader real estate market.
Lakea currently operates 24 omaksi model housing companies. Five of these are financed through other lenders and have not been included in the current bankruptcy filings, but Mantila acknowledged that similar financial challenges exist across the entire portfolio.
To avoid bankruptcy, Lakea is attempting a corporate restructuring through a planned acquisition by investment firm Korpi Capital. Mantila said finalising that deal is now critical.
“We are still pushing to complete this voluntary business arrangement,” he said.
Mantila said it is too early to fully assess the implications of potential bankruptcies for residents or their invested capital. “What I can say is that bankruptcy would be the worst outcome for the residents as well,” he added.
HT
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Source: www.helsinkitimes.fi
