Although Kempen covers 54% of the market cap of the EPRA Sweden, we feel there are more gems to be found. Over the past seventeen years Swedish property stocks have outperformed European property shares on average by 9%+ p.a. as the sector has benefitted from a strong occupational market, enhanced by higher leverage and reinvesting high retained earnings. Even though a key concern for the Swedish growth story remains its sensitivity to interest rate changes (given the average leverage and high exposure to floating rate debt), Sweden remains the most popular region by a landslide. The EPRA Sweden Index showed a total return of 46% YTD, compared to 4.1% for the EPRA Europe Index.
How well do you know Catena, Diös, Hemfosa, NP3, Platzer, SBB, Stendörren and Wallenstam? We believe these are companies certainly worth knowing, if it was only for their strong track record: all of them have shown high double-digit shareholder returns, both over the past twelve months as over the past five years. It is therefore that we are pleased to invite you for Kempen’s Swedish Property Days in Stockholm on 8 November, preceded by an asset tour on 7 November.
- Wednesday 7 November - property tour in and around Stockholm
- Thursday 8 November - property seminar in Stockholm
Please reach out to your regular Kempen contact, or fill in the contact form below if you are interested in joining us at our Swedish Property Days.
| ||Catena (CATE SS) |
Catena is a 100% logistics and warehouse player operating in the Stockholm, Göteborg, Örebro, Helsingborg and Jönköping area. Going forward, the company aims for external growth through both acquisitions and developments; currently Catena has a land bank of c.1.7m sqm with associated development rights and options. Last year, Catena started a joint venture with, among others, Fabege: Urban Services, creating a collective hub for all incoming and outbound transportation in Arenastaden. The move will create opportunities to transform areas that are currently exposed to heavy traffic into districts with spaces that are more usable. Catena returned 17% pa over the past 5 years (39% past 12 months).
| || Diös (DIOS SS) |
Diös own and operate a diversified portfolio (50% offices, 22% retail, 7% residential) in the CBDs of ten growth cities in the north of Sweden. With a significant standing portfolio of c.SEK 20bn they create additional value through urban development: creating attractive meeting places, shops, offices and homes in cities with positive demographic trends. Diös have a development pipeline of c.SEK 4bn, where historical ROI is 10.3% compared to their average NIY of 6.0%. Diös are starting, within 9 month, two new hotels, both with a SEK c.400m investment volume, and also expect to start new production for residential in one or more cities. The company’s share has returned 18% pa over the past 5 years (26% past 12 months).
| ||Hemfosa (HEMF SS) |
Hemfosa own a 46bn SEK portfolio that can be viewed as two distinct businesses: their community services portfolio (schools, governmental offices, judicial institutions and care facilities, 67% of portfolio) and their commercial portfolio focusing on offices and logistics/storage (33%). The company has shown a very rapid external growth; it has expanded from SEK 220m in 2009 to SEK 46bn. As strategy going forward, Hemfosa is planning to split the company in two in 18Q4. The newly formed Nyfosa will consist of the commercial portfolio, where the community services portfolio will continue under the Hemfosa flag. The company has generated an average of 30% shareholder return pa since IPO (of which 27% in the past 12 months).
| || NP3 (NP3 SS) |
NP3 is a cash-flow oriented company and unique mainly by the geography of its portfolio, as their SEK 8.7bn portfolio is situated in the six business centres in the north of Sweden: Sundsvall, Gävle, Dalarna, Östersund, Umeå and Luleå, providing higher yields than an average portfolio (but a consistently high occupancy rate – currently 92%). The portfolio is mostly industrial by nature (66% commerce/industry/logistics) with 19% offices. NP3 is characterised by large growth; since 2013 the company’s portfolio showed a 100%+ CAGR, while EPS showed a CAGR of 36% in the same period. Since IPO in 2014 the share has returned 27% on average pa (31% over the past 12 months).
| || Platzer (PLAZB SS) |
Platzer is the only listed company that is fully committed to commercial properties in the Gothenburg area (55% offices and 32% industrial/warehouse assets). The company has a strong focus on developments: they have a development pipeline of SEK 17bn (700k sqm), of which 1.9bn already invested, where they specialize in redeveloping entire areas. On the medium term, Platzer's strategy is to grow the business c.SEK 2bn - 50% coming from project development and 50% from net acquisitions. Platzer has returned an average of 26% pa since IPO in 2013 (29% past 12 months).
| || SBB (SBBB SS) |
SBB own and operates a SEK 25.6bn portfolio, mainly focused on community service properties (60% of portfolio) and residential (30% of portfolio). Their community service properties include properties let to tenants who are directly or indirectly tax-funded, where the residential portfolio focuses on c.30 growth cities throughout Sweden. SBB is actually also one of the largest healthcare resi owners in the Nordics, and owns student resi through their 22% stake in Studentbostäder i Sverige. Lastly, c.10% of the portfolio are building rights: SBB is active in the planning and zoning of resi and community buildings, but does not take up development risk by selling the rights before construction starts. Since IPO the company returned 28% pa on average (with a stellar 66% over the past 12 months).
| || Stendörren (STEFB SS) |
Stendörren mainly own warehouses and light industrials in the Greater Stockholm and Mälards region. The company predominantly invests in assets with reversionary potential: e.g. rent levels below market, vacancies and potential planning permission. As such, Stendörren managed to create a total average shareholder return of 28% pa over the past 5 years (and a stellar 66% past 12 months). Last April, Stendörren got listed on the main market of Nasdaq Stockholm to meet increasing demand from institutional investors and funds.
| ||Wallenstam (WALLB SS) |
With a market cap of SEK 29.5bn, Wallenstam is one of the larger listed property companies in Sweden with 56% exposure to resi and 39% exposure to commercial assets in Stockholm and Gothenburg. They are a big residential developer, predominantly for their own rental portfolio (currently c.2k units under construction). Also, Wallenstam has a strong focus on sustainability; they own 64 wind-turbines and aim to reduce their carbon footprint by 15% by year-end 2018. Wallenstam have an excellent track-record with shareholder’s return at 18% pa over the past 5 years (16% past 12 months).