Defence Properties Finland’s half-year report: continued brisk defence construction, significant savings from competitive tendering of procurements

Investments in defence facilities were record high, with approximately €76 million spent on investment and construction projects during the first half of the year. The savings required by the state of general government finances have been particularly good in procurement. The €3.5 million savings target set for Defence Properties’ procurements this year has already been exceeded.

Investments are being made in different Finnish Defence Forces’ units in different parts of the country. The largest Finnish Defence Properties’ project, construction of the F-35 fighter infrastructure, progressed to plan during the first half of the year.

“The infrastructure construction projects required by the future F-35 fighters are under construction at the bases in Rovaniemi, Rissala and Tikkakoski. The fighter infrastructure has been designed in excellent cooperation with the Finnish Defence Forces. Careful guidance has kept the total costs of the projects well under control,” says Matias Warsta, CEO of Defence Properties Finland.

Defence Properties Finland has agreed with the Finnish Defence Administration on the responsibilities and roles in NATO investments and has been involved in the preparation of the DCA agreement with the United States. The tightened security situation and Finland’s NATO membership have resulted in a shortening of the usually very long-term planning cycle for property investments as new needs become clear as national and NATO defence planning progresses.

Project guidance model provides cost-effective solutions

Defence Properties Finland introduced a new guidance model for construction projects at the beginning of the year, and cost-effective solutions were identified together with the Finnish Defence Forces. The key objective of the project guidance model is to implement projects in an optimised way in terms of size and costs, and so curb the growth of premises costs. Around €1.3 million of the €3 million annual savings target set for premises costs was achieved during the first half of the year.

Procurements in particular have delivered significant savings. Senate Group launched a procurement development programme in summer 2023. Already in the first half of the year, Defence Properties Finland exceeded the €3.5 million savings target set for 2024. A tightening of tendering processes for construction projects has resulted in particularly significant savings due to bids from more companies being received than earlier.

Preparedness continues, main focus on shelter facilities

Defence Properties Finland has continued to actively develop preparedness and contingency, with a special focus on securing the availability of Finnish Defence Forces’ shelter facilities and improving their capabilities. The development of garrison energy resilience has been carried out systematically, and the first network projects to improve resilience are underway.

The tightened security situation also affects the targeting of Defence Properties Finlands’ own service provision. The accelerated introduction of the preparedness-oriented service model, which started in 2023, and related practical measures in local units continued in the first half of the year. Broader property management packages were transferred to service providers from June onwards.

“The work input of the Defence Properties Finland’s own people is being allocated to the Finnish Defence Forces’ intelligence, surveillance and command facilities that are most important in terms of emergency conditions and serious disruptions. As the total amount of our own work has remained the same, this has meant that property management and cleaning of other facilities are increasingly being carried out by our partner companies,” Matias Warsta says.

Defence Properties Finland reported revenue of €181.7 million and a result of €8.9 million for the first half of 2024. Higher than usual invoicing for investment planning mainly contributed to revenue above that budgeted.

You can download the half-year report (in Finnish) from our websites:

Defence Properties Finland’s half-year report 1–6/2024 (pdf) (in Finnish)
Bulletin: Senate Group’s half-year report