Due Diligence services were crucial in the transaction of Jyväskylä’s health and social care real estate deal
The city of Jyväskylä sold the majority of its social and healthcare service properties for a purchase price of approximately 84 million euros on December 19, 2022. The properties were acquired by the Nordic infrastructure investment company Infranode, with Sustera acting as the advisor in the real estate transaction, providing TDD, EDD, and ESG services.
A Significant Transaction of Thirteen Properties
The real estate transaction is linked to the reform of welfare areas, which transferred the responsibility for organizing social and healthcare services from the city of Jyväskylä to the Central Finland welfare area. The sale was justified by the city’s aim to strengthen its finances and reduce risks.
The transaction involved thirteen properties: two health centers, five facilities for people with disabilities, five youth and child welfare units, and one elderly care facility. The use of the facilities remains unchanged after the ownership transfer.
Advisory Services at the Core of the Arrangement
The long-term infrastructure investor Infranode prepared the arrangement together with Raksystem (now Sustera), other advisors, and the city of Jyväskylä. After the first phase of the competition, the focus shifted to more detailed condition inspections with site visits. Based on the inspections, a comprehensive overview was created along with future repair and maintenance plans. The work done was central to the success of the arrangement and enabled the efficient completion of the transaction.
Through TDD services, the client received a clear picture of the buildings’ technical condition, future repair needs, and associated technical risks. The EDD inspection provided the client with a comprehensive description of environmental risks related to the properties and the responsibilities tied to them. The ESG inspection, on the other hand, focused on responsibility aspects, assessing the current state, risks, and potential of the properties’ sustainability practices.
A Well-Executed Project
Sustera supported Infranode throughout the entire transaction process, from the offer phase to the conclusion of the process.
We prepared a 25-year maintenance plan for the client in line with their strategy. Building components were summarized in a table based on technical lifespans. During the process, the table was refined based on the observations from site visits and additional information. The site visits were conducted in late July and early August 2022.
“The execution of the process went smoothly from start to finish. Infranode’s longer-than-usual inspection period provides more comprehensive predictability for investment activities, and the preliminary studies conducted at the beginning streamline the entire process,” says Mika Blom, Sustera’s condition assessor who coordinated the project.