Senate Group’s half-year report 2025: rent reductions for agencies and record investments in security

Senate Group revenue was €499.3 million, which was as budgeted. At €48.8 million, the Group result was higher than budgeted due to lower than expected realised costs, depreciation and impairments. Successful cost control was supported by a mild late winter with little snow, saving energy and maintenance costs. The full-year profit forecast is clearly lower, due, among other things, to the weak state of the property market.

The exceptionally challenging market situation makes property sales difficult. During the first half of the year, Senate Properties realised just €5.5 million in property sales, returning a loss of €0.9 million. In the corresponding period last year, property sales totalled €49.8 million. Property sales are forecast to be €55 million for the full year. This is well below the €78 million budgeted. The rapidly declining use of office space and the downturn in the property market will make it challenging to reach the profit targets for property sales going forward.

Highlights in H1/2025

• Senate Group will reduce the annual premises costs of government agencies and institutions by a total of approximately €43 million during 2025–2026, rising to €53 million by the end of 2027. These savings will help government agencies and institutions reach the targets set by the central government productivity programme. The Group reduced the rents of its government customers by approximately €19 million as of 1 January 2025. In addition, cost savings of €5.5 million were delivered by agencies through premises projects during the first half of the year.
• Government building investments remain at record levels. Investments are focused particularly on facilities for security authorities such as the Finnish Defence Forces, the Police, and the Finnish Security and Intelligence Service. During the first half of the year, Senate Group spent €327 million on property investments and construction. Senate Properties accounted for €190 million of this and Defence Properties Finland for €137 million. It is estimated full-year building investments will reach €770 million.
• The state’s gross rent model means that investments directly affect rental costs. Senate Group has introduced a new construction project management model as a way of curbing cost increases and finding better and more cost-effective solutions. The basic idea behind the model is to work with customers to determine solutions that meet their facility requirements as sensibly as possible while minimising costs. The most cost-effective design solution possible forms the basis for project management and implementation. Project management has delivered savings of €29.1 million were achieved in investment costs in January–June. The target for the full year is €50 million.
• Government shared work environment projects were carried out in various parts of Finland. The first half of 2025 saw the completion and bringing into use of shared work environments in Joensuu, Kouvola, Lahti, Lappeenranta and Pori. Projects are currently underway in several cities across Finland. Approximately 8,700 full-time equivalents are now being worked in shared work environments, the transition to which is the key means of achieving savings in the facility costs of agencies and institutions.

President and Group CEO Tuomas Pusa:

”A dualistic situation continued in the first half of 2025, with significant savings in the facility costs of agencies and institutions being planned and implemented at the same time as more new facilities are being built than ever before, especially to meet the needs of security actors.

One of Senate Group’s missions for many years has been to generate savings by improving the efficiency of the government’s use of facilities and by supporting agencies in reforming their ways of working. Hundreds of facilities conversion projects have delivered cumulative savings of over €900 million between 2015 and 2024.

To support reaching the savings targets set by the Finnish government, we at Senate Group have enhanced our own productivity by, among other things, improving energy efficiency and implementing an extensive Procurement Development Programme. These improvements have enabled us to reduce rents by €19 million from the beginning of 2025. Besides this, we are implementing new savings in premises costs in cooperation with government agencies and institutions. The aim is to reduce central government’s annual premises costs by a total of €53 million during 2025–2027. The Group is able to cover approximately 10% of the government’s savings target of €530 million in operating expenses through savings in premises. This is an excellent achievement considering that premises costs account for an average of approximately 7% of the government’s operating expenses.

Senate Group’s investments in construction, especially in the facilities of security actors, continued at a record level. Compared to Senate’s previous normal level, the volume of construction is roughly double, and Defence Properties Finland’s building investments have tripled.

The exceptionally large amount of government construction has coincided with the economic downturn in the construction industry, which has enabled better tenders and more cost-effective implementations. At the same time, the projects employ companies in the field and thousands of professionals across Finland.”

Senate Properties’ and Defence Properties Finland’s half-year reports:

Senate Properties’ H1 report contains information about the Group’s financial performance and key events as well as descriptions of how Senate Properties has met the goals set by Finnish Parliament and the Ministry of Finance. Defence Properties Finland’s H1 report describes how Defence Properties Finland has met the goals set by Finnish Parliament and the Ministry of Defence and the performance targets set by the Ministry of Finance.

Senate Properties’ H1 report (in Finnish, pdf)

Defence Properties Finland’s H1 report (in Finnish, pdf)

For more information:

Tuomas Pusa, President and Group CEO, tel. +358 50 390 2143, firstname.lastname@senaatti.fi

Defence Properties Finland, Matias Warsta, CEO, tel. +358 294 831 000, firstname.lastname@puolustuskiinteistot.fi