SRV has big plans for Helsinki metropolitan area

SRV Group (HEL: SRV1V) has quietly become one of the major players in the capital area construction business. In 2011 it won city of Helsinki’s competition for implementation of Kalasamata metro block. The plan is to build a total floor area of 176,000 square meters, nearly half of which will be residential housing, around the axis of Itäväylä. Six skyscrapers are planned, the tallest of which should reach 126 meters and have up to 33 floors. In total the area will have apartments for 20 000 residents.

In addition to residential space, there will be a hotel tower and an office tower for a total of 8 high-rise buildings. Municipal social services and a health centre will be built. Kalasatama Centre is estimated to bring one billion Euros in revenues to SRV between 2011 and 2021. The first phase is expected to be completed in 2015 and the whole area in 2021.

A residential tower project is also getting started in Keilaniemi, Espoo. Four 27-35 storey residential towers will be built near Ring I road (Kehä 1). The tallest of them shall reach 140 metres and thus become the tallest residential building in Finland. In total 72,000 square meters of residential housing and some 9000 square meters of commercial premises will be built.

Keilaniemi is well known as a place of corporate headquarters. The project is timed to coincide with the Western Metro Extension with a Keilaniemi metro station to be in the vicinity. An area development project with pension insurance company Varma and corporate housing investors Sato as partners develops the project adjacent to future Niittykumpu metro station, where SRV has a portion of the project and has acquired Niittytori shopping centre area.

Both of the high-rise projects need to pass an amendment to urban planning schemes, which can mean some delays. The location near metro stations should help travel congestions. SRV says that there is considerable interest in the apartments and a corporate official tells newspaper Kauppalehti that it is possible to see all the way to Tallinn from the top.

SRV is also building Derby Business Park in Espoo. This will border a new Turku motorway intersection. SRV’s own head quarters and head quarters of Siemens, Finland will be located in the buildings. SRV and Varma Mutual are also planning bulky goods retailing area in Kivenlahti, SRV also will also develop North Pasila employment district and has other projects in Tapiola, Espoo and Hämeenkylä, Vantaa.

Finally Stora Enso (OMX: STE1RV) and SRV Group have reserved two sites in Jätkäsaari, for a planned Wood City project. The total area is 27 000 square meters with office, residential and hotel constructions on the agenda, is to be entirely built of wood. There will also be multi-storey buildings and special attention will be paid to energy efficient solutions. The companies have engaged top national companies to take part in an architectural competition for area design.

In 2011 SRV’s revenues grew by 38.8 to 672 million Euros and orders received totaled over 800 million. Operating profit was 12.5 million and EPS 17 cents. The Board is suggesting a dividend of 12 cents. The 2012 revenue is expected to be at or above 2011 number. Profit before taxes is expected to exceed 2011 number of 11.3 million. The group is targeting over 1 billion in annual revenues by 2016.