Gross investments illustrate the total volume of investments, including investments in new development, converting properties for residential purposes, housing stock acquisitions, modernisation investments and capitalised borrowing costs.

EPRA (European Public Real Estate Association) has developed performance measures, Best Practices Recommendations Guidelines, for the comparable analysis of property investment companies. More information on the EPRA indicators is provided in the Financial Statements.

EPRA supports the sustainability reporting of companies in the real estate industry and has created industry-specific sustainability indicators known as the Sustainability Best Practices Recommendations (EPRA sBPR). Lumo has reported in accordance with EPRA sBPR since 2019. Our goal is to report on our sustainability efforts at the gold level.

The taxonomy is the European Union’s sustainable finance regulation, which establishes financing and investment targets that can be considered sustainable. We are not subject to mandatory EU taxonomy reporting requirements, but we have voluntarily disclosed taxonomy-related information for our business since 2021. The taxonomy information is presented in the sustainability report is provided for informational purposes and has not been assured.

GRI (Global Reporting Initiative) is an internationally used standard for sustainability reporting. It is aimed at describing operations from the perspectives of environmental responsibility, social responsibility and governance. Lumo has reported its sustainability information with reference to the GRI framework since 2020.

Funds From Operations (FFO) is an indicator of profitability. Unlike operating profit, FFO does not take into account changes in fair value or the gains and losses arising from asset sales. FFO is one of the two indicators used in our guidance. The dividend payout objective is also linked to this performance indicator.

Property maintenance and repair expenses arise from the regular and continuous maintenance of properties, and they are recognised in the income statement above net rental income. Maintenance expenses are primarily related to heating, electricity, waste management, water, estate management, property taxes, real estate insurance and other maintenance costs. Modernisation investments that improve the revenue-generating capacity of properties, such as pipe renovation projects, are recognised in gross investments and their impacts are reflected in fair value changes in the income statement.

Total revenue comprises rental income and charges for utilities collected by Lumo, with the latter mainly consisting of water and sauna fees as well as fees for parking spaces. Total revenue is one of the two performance indicators referred to in our guidance.

Operating profit includes net rental income as well as other other operating income and expenses, capital gains and losses, fair value changes and administrative expenses as well as depreciation and impairment.

Like-for-Like growth (LfL) illustrates the change in rental income for apartments owned for two consecutive years in the past 12 months compared to the previous 12-month period. LfL rental growth is influenced by changes in the financial occupancy rate, rent increases, the rents of new tenancy agreements compared to concluded agreements and the period of time between new and concluded tenancy agreements. LfL growth is also affected by changes in maintenance and repair expenses.

Loan to Value (LTV) (%) is an indicator of indebtedness. It is calculated by dividing net debt by the value of investment properties. The figure illustrates the amount of debt the Group has in relation to the fair value of its investment properties. Our strategic objective is to keep Loan to Value below 50%.

Net rental income illustrates what is left of the rental income after deducting the maintenance and repair expenses of the properties.

NPS is an indicator of customer satisfaction. We ask customers at various stages of the customer relationship to indicate how likely they would be to recommend the company on a scale of 1–10. Scores of 1–6 have a negative effect on NPS, scores of 7–8 have no effect and scores of 9–10 have a positive effect. The overall score thus obtained can range from -100 to 100. Our strategic objective is to achieve a Net Promoter Score of 40.

Specific consumption measures the consumption of electricity or water, for example, per square metre or cubic metre. As the housing portfolio grows, specific consumption is a better illustration of the efficiency of electricity or water consumption and changes therein.

Investment properties comprise apartments, business premises, land plots and ongoing projects and certain assets owned through shares, such as parking spaces, that are owned by us.

The fair value of investment properties is changed by the acquisition and sale of investment properties as well as modernisation investments, capitalised borrowing costs, transfers to own use and valuation gains or losses on fair value measurement. The value of investment properties is assessed on quarterly basis, and an external independent expert issues a statement on the valuation.

The financial occupancy rate is calculated by dividing actual rental income by potential rental income.

TR index is a means of observing occupational safety at construction sites, with the aim of monitoring key factors affecting on-site accidents.

Lumo is committed to the real estate sector’s voluntary Energy Efficiency Agreement (VAETS). The target for the agreement period (2026–2035) is to improve energy efficiency by 10 per cent compared to the 2024 baseline level.

The tax footprint illustrates the distribution of the taxes and tax-like charges paid by the Group. Lumo pays all of its taxes to Finland.

The proceeds from a green bond issue are used to finance or refinance investments that promote the energy efficiency of buildings in accordance with Lumo´s Green Finance Framework.

Lumo launched a framework in 2021, which sets up the criteria for investments that can be financed of refinanced with green bonds, green loans or other green debt instruments.

Investment properties are initially measured at their acquisition cost. Subsequently, they are measured at fair value, and the resulting changes in fair value are recognised in profit or loss as they arise. In our reporting, fair value refers to the price that would be received from selling an asset, or paid to transfer a liability, in an ordinary transaction between market participants on the measurement date. Fair value is determined quarterly. More information on fair value measurement principles is provided in the Financial Statements.

In 2015, UN member states agreed on Sustainable Development Goals and an action plan aimed at guiding the world’s development efforts until 2030. Lumo is committed to four of the SDGs that we have identified as areas we can influence the most through our business operations.