Near-term risks and uncertainties

According to the Lumo Homes plc’s Interim Report 1 January–31 March 2026

Lumo Homes estimates that the most significant near-term risks and uncertainties arise from geopolitical tensions and changes in the international security situation, which may have an impact on the global economy and financial markets. The war with Iran that the United States started in February has created significant uncertainty and increased energy prices and market interest rates. If the crisis in the Middle East is prolonged or escalated, it may accelerate inflation more broadly and weaken economic growth. The above-mentioned factors may affect central banks’ interest rate decisions and other measures. Although housing markets are local, these factors can also impact Finland’s economic development and the housing and property markets, including apartment prices, rents and yield requirements as well as on the operations of the construction companies. Increased costs and persistently high loan interest rates may affect Lumo Homes’ result and cash flow as well as the fair value of apartments

The situation in the real estate market and the development of the housing demand and supply situation may pose risks in the near future. Although urbanisation is expected to continue in the longer term, there is uncertainty with the recovery of the property market. The oversupply of rental apartments may continue in the main areas in which Lumo Homes operates, and the changes in supply and demand could have an impact on Lumo Homes’ rents, tenant turnover or the financial occupancy rate and, thereby, rental income.

The development of the Finnish economy may affect the housing and financial markets as well as the demand of rental apartments. These factors may have an impact on Lumo Homes’ profit and cash flow as well as the fair value of apartments. A general downturn may lead to unemployment and reduce household purchasing power, which in turn may affect the ability of residents to pay rent and, subsequently, the company’s rental income.

The weakening of the property and financial markets or the increase of market interest rates may lower Lumo Homes’ credit rating and increase the price of financing as well as weaken financial key figures. These factors may affect Lumo Homes’ profit and cash flow as well as the fair value of the apartments.

Cyber attacks and various other data security threats have generally increased. These data security breaches could impact Lumo Homes’ business operations and the reliability of information systems.