Senate Group’s financial statements 2023: Construction investments at record level, good success with cost management
Senate Group, which is responsible for state-owned properties and premises, has published its financial statements and annual report. The Group successfully implemented the service targets set by Parliament, the Ministry of Finance and the Ministry of Defence. Construction project management rose to an all-time record high, and the agencies’ savings in premises costs exceeded targets. The Group’s cost management was very successful.
Government construction investments were record high, with investments focusing particularly on the facilities of the security authorities. Senate Group spent €657 million on real estate investments and construction, of which Senate Properties accounted for €502 million and Defence Properties Finland for €155 million. Senate Group’s construction project management and the development of ways of working received significant recognition when, after the review period, industry organisations selected the Group to receive the Developer of the Year 2024 award.
The Group’s profit for the year was €30.1 million, which was slightly lower than budgeted, especially due to significant write-downs in real estate assets. Due to the weak market situation, real estate transactions fell slightly short of target. Senate Properties’ real estate transactions totalled €79.2 million and Senate Station Properties Ltd’s €14.9 million.
Significant savings in facility costs for agencies and Group costs
In 2023, we agreed together with the agencies on facility projects to achieve annual savings totalling €18.8 million in facility costs for agencies. Senate Properties accounted for €16.3 million of this figure and Defence Properties Finland for €2.5 million. The €9.5 million savings target set for 2023 was clearly exceeded.
The Energy Saving Programme launched by Senate Group in October 2022 was implemented extensively and successfully in state-owned properties. During the programme, a total of 100,000 MWh of energy had been saved by year-end 2023, which corresponds to savings of around €12 million.
In order to achieve cost savings, the Group launched a procurement development programme in summer 2023. The aim of the extensive programme is to reach savings of €100 million by the end of 2029.
Senate Group’s investments are almost entirely focused on use-specific special facilities, which have their own particular requirements in terms of security and technology, for example. In order to curb the growth of investment costs and to identify better and more cost-effective solutions, a new model for construction project management was developed in cooperation with clients. Curbing construction costs has a direct impact on the future leasing costs of state actors and, consequently, on government spending.
President and Group CEO Jari Sarjo: despite the savings, significant investments in security increase the costs of premises
”We are well on track with implementing our strategic goals. Senate Properties invested around €3.3 billion in state-owned properties in 2015–2023. At the same time, almost €800 million has been spent on facility maintenance. In practice, government facility costs have not risen at all in 2015–2022. In 2023, facility costs rose only slightly faster than inflation due to a record-breaking investment programme in the premises of the security authorities.
The transition to shared work environments in accordance with the Government Premises Strategy will enable agencies and institutions to phase out underused office facilities and thereby achieve significant savings in facility costs. Shared work environments are currently being implemented in different parts of Finland. Switching to them promotes emission reduction targets, improves preparedness in premises and enables facilities that support the work and wellbeing at work of employees.
We have managed to curb the increase in property, energy and interest costs, but significant investments in the premises of security-critical authorities and investments related to the preparedness of government agencies will increase central government expenditure on premises. In the difficult situation of the Finnish central government’s finances, we must find ways to curb the increase in costs.”
Read the financial statements and annual reports:
Senate Properties’ financial statements and annual report (in Finnish, pdf)
Defence Properties Finland’s financial statements and annual report (in Finnish, pdf)
Senate Group is an internal government service unit and an unincorporated state enterprise group under the Ministry of Finance which provides premises and related services centrally for central government administration. Senate Group consists of Senate Properties and Defence Properties Finland. Senate Properties is tasked with acting as the work environment and facilities specialist of the Finnish government. Defence Properties started operations on 1 January 2021 as a subsidiary unincorporated state enterprise of Senate Properties and focuses the properties, functions and services serving the Finnish Defence Administration.
Under the government leasing system, rents charged by Senate Group are based on a cost-price principle and Senate Group makes no profit from the rents charged to central government clients. Rental income covers all the costs arising from the properties.
