Yahoo Finance

Release Date: February 19, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Castellum AB (FRA:TEX) has announced a new project in Stockholm called Infinity, which involves developing 20,000 square meters of top-class office space.

• The company has acquired more shares in Entra, surpassing the 1/3 threshold, indicating a strong investment strategy.

• Castellum AB (FRA:TEX) has received a new credit rating from S&P, complementing its existing Moody's rating, which is expected to improve financing opportunities.

• The board has proposed a dividend of 2.48 kronor per share, marking a return to dividends after two years of focusing on balance sheet strengthening.

• The company's net operating income is up by 3.4%, and income from property management has increased by 10.2%.

Negative Points

• The changes in property value remain negative for the full year, with a decline of approximately 1%.

• Higher vacancies and increased discounts have partially offset income growth, indicating challenges in maintaining occupancy.

• The economic occupancy rate has only improved slightly by 0.3% during the quarter, suggesting ongoing challenges in tenant retention.

• Property values have been written down by approximately 1.6 billion, equivalent to a 1.2% decrease.

• The company faces challenges in some submarkets, with renegotiations showing a negative change in rent of 1%.

Q & A Highlights

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Q: Can we still see continued capital recycling of non-core assets here? A: Unidentified_2: We have internal targets of 40% loan to value and will stay within those boundaries. It might go up or down slightly depending on market opportunities.

Q: On the question of cap recycling, could you still see yourself being a seller in this market? A: Unidentified_1: We will continue to trim our portfolio by selling non-strategic assets to ensure effective management and focus on growth regions, but not for balance sheet adjustments.

Q: Regarding the Infinity project, what kind of rents or yield on cost do you expect? A: Unidentified_1: We expect rents above 6,000 kronor per square meter for top floors, with a yield on cost around 7.5% unleveraged, meeting our internal threshold.

Q: Do you expect the cost of debt to be flat in 2025? A: Unidentified_2: We expect it to be flat at the current level.