Timo Nurmi

The executive director of the Lappeenranta Student Housing Foundation (LOAS) will change on 1 April 2012 with the retirement of Seppo Muukkonen, the foundation’s long-time leader. Timo Nurmi, who currently works as LOAS’ development director, has been appointed as the new executive director. Nurmi will assume the executive director’s tasks at the beginning of 2012.

“A new executive director is a visible change in the foundation’s operations, but I think our operating methods will remain very much the same. The good student housing situation in Lappeenranta is an excellent starting point,” says Nurmi.

According to Nurmi, in proportion to its student population, Lappeenranta has the highest number of student apartments in Finland. In addition, the town has a well-functioning rental market. However, the Saimaa University of Applied Sciences (UAS) has moved beside the Lappeenranta University of Technology (LUT) in Skinnarila, which has raised concerns and question among students.

“Students want to know whether we will build more in Skinnarila, or if we will take other measures to cater for the increased need for student housing in the area. We will take action by building a high-rise on the plot at Skinnarilankatu 28. The building is intended to be completed in late 2012 or early 2013, and will have 72 studio apartments, which are in the highest demand.”

The total number of apartments will not rise
According to Nurmi, the number of applications clearly reflects the move of Saimaa UAS to Skinnarila. In the autumn of 2010, only 10 per cent of first-year students applied for a rental apartment in Skinnarila. This autumn, the proportion rose to 70 per cent.

LOAS has approximately 1,800 apartments, accommodating some 3,000 students. According to Nurmi, the foundation has no need to increase the total number of apartments, because the balance between supply and demand is good at the moment. Moreover, a higher number of apartments might translate into a higher underutilisation rate in the summer.

“If we decide to build even more in Skinnarila, we will have to consider the situation in the city centre. One option is to make our locations in the centre more attractive to families, because our older apartments have not been designed for family use. Nonetheless, all our locations have good bus connections to the Skinnarila campus.”

Well-designed and suitable apartments
The new executive director says that the foundation is currently adapting to a number of changes. In addition to the move of Saimaa UAS to Skinnarila, the foundation’s operations are affected by the lower number of places for new students, the increasing number of foreign students and the growth of the rental market in general.

“We have to focus even more on our basic tasks – that is, leasing and marketing – in order to maintain sufficient utilisation rates under the changing circumstances. Our basic product is an apartment that is well-designed, suitable for the target group, in good condition and situated near appropriate transportation connections.”

The annual utilisation rate of LOAS’ rental apartments is approximately 94 per cent. According to Nurmi, larger cities have higher utilisation rates, around 98 per cent. In towns of the same size as Lappeenranta, the rate is usually 95–97 per cent.

“At worst, we have some 800 vacant apartments, which is 20 per cent of our capacity. Compared with other towns, the student housing situation in Lappeenranta is excellent, but the low utilisation rate inevitably affects the foundation’s finances. After all, we should be able to keep our rents reasonable,” Nurmi says.

Temporary leases have increased
Temporary leases have increased with internationalisation, which has an impact on the utilisation rate. Currently, the foundation has about 600 foreign tenants. Approximately 250 of them are exchange students, and the rest are degree students.

“Exchange students’ apartments are vacant all through the summer, and our year-round tenants cover these losses in the rents. This is not fair, and we are trying to find a better solution. In Helsinki and Tampere, for example, universities compensate for this financial loss to ensure housing for exchange students,” says Nurmi.

LOAS has discussed the situation with the rectors of the universities in Lappeenranta.

“Under no circumstances do we want to find ourselves in a situation where exchange students have difficulty in finding housing.”

Student input is invaluable
Despite changes in its business environment, LOAS focuses on its core task of creating well-being through housing. Planning is always based on customers’ needs.

“It is important to anticipate, to walk one step ahead, rather than respond to what has already happened. We must remember to think about what our customers need tomorrow and further in the future. The importance of student input in our Executive Committee and other administration cannot be stressed enough. Tenants voices are heard in the Board of Directors. Throughout our history, students have been very active, proactive and responsible.”