Kojamo Oyj’s aggressive share‑buyback strategy raises questions
Kojamo Oyj, the Helsinki‑based real‑estate investment group that split its operations into the commercial‑housing Lumo arm and the non‑commercial VVO segment, has announced a series of share‑repurchase programmes that have rattled analysts and investors alike. Between 15 September and 17 September 2025, the company confirmed two separate buy‑back initiatives—one on 15 September and another on 17 September—each targeting a sizeable tranche of its own equity.
The decision to repurchase shares is publicly disclosed through the Finnish regulatory portal and the NASDAQ OMX Nordic website, where the company’s filings specify “Omien osakkeiden hankinta” (purchase of own shares) for the 17 September program and “Share repurchase” for the 15 September event. While the exact monetary value of each tranche has not been released, the sheer frequency and proximity of the announcements suggest a deliberate attempt to influence the market price of the €10.85 closing share price, which has already traded within a narrow band—its 52‑week high reached €11.52 on 23 June, and its low dipped to €8.215 on 18 March.
With a market cap of approximately €2.68 billion and a price‑earnings ratio of 51.67, Kojamo’s valuation sits on the upper side of its sector peers. The high P/E hints at a market that is willing to pay a premium for the company’s steady rental income streams. Yet, a buy‑back programme of this scale can be interpreted in two starkly different ways:
Signal of confidence – The board may be signalling that it believes the shares are undervalued and that the cash generated from its real‑estate portfolio can be effectively redeployed to reward shareholders. This narrative aligns with the company’s long history since 1969 and its reputation as a stable provider of rental housing in Finland.
Erosion of cash for future growth – Conversely, the repurchase consumes liquid assets that could have been invested in new development projects, acquisitions, or debt reduction. Given the highly competitive Finnish real‑estate market—where firms like Castellum, Vonovia, and NP3 are constantly vying for prime properties—diverting funds to buy back shares may blunt Kojamo’s ability to seize upcoming opportunities.
The timing of the buy‑backs is telling. The 15 September programme coincides with a broader market dip, as noted in a recent Avanza report where Länsförsäkringar Fastighetsfond experienced a 1.56 percent decline in August, partly due to weaker performance in the real‑estate sector. That report highlighted that holdings in Kojamo contributed positively to the fund’s relative return, indicating that market participants are not entirely dismissing the company’s prospects. Yet, the same report also warned that an absence of exposure to other high‑growth developers could limit upside, subtly underscoring the risk that Kojamo’s own share repurchases might curtail its future earnings potential.
From a shareholder’s perspective, the buy‑back offers an immediate return in the form of capital gains if the market price rises post‑purchase. However, investors should weigh this against the company’s long‑term cash‑flow generation capacity and its strategic need for growth capital. A more balanced approach—perhaps a smaller, more transparent repurchase schedule coupled with a clear plan to reinvest surplus cash in high‑yield properties—would likely better serve both the shareholders and Kojamo’s overarching objective of sustaining a robust rental portfolio.
In an industry where asset quality and cash‑flow stability are paramount, Kojamo Oyj’s latest share‑buyback manoeuvre could either reinforce its market position or signal a shortsighted prioritisation of short‑term gains over long‑term resilience. The market will be watching closely to see whether the company can maintain its dividend payouts while still advancing its real‑estate footprint in Finland’s competitive landscape.