Swedish landlord Heimstaden Bostad is speeding up its plan to sell off properties worth a total of SEK 20 bn (€1.7 bn).
Total property sales reached SEK 2.8 bn (€243 mln) in the first half of 2024, surpassing the initial target of SEK 2.3 bn (€200 mln). In the second quarter alone, 363 units were sold across five countries at a premium of 29% over their book value. Since the privatization program began, the company has divested a total of SEK 4 bn (€347 mln) worth of properties, achieving a premium of 30.1% over book value.
The company generated SEK 808 mln (€70 mln) in net proceeds from apartment sales during the quarter, achieving a net profit of SEK 638 mln (€55 mln). A total of SEK 1.1 bn (€95 mln) in properties were categorized as held for sale, with SEK 657 mln (€57 mln) in the Netherlands and SEK 448 mln (€39 mln) in Denmark.
By selling off properties, the company aims to decrease its dependence on traditional bank loans and explore alternative funding sources. Last month, Heimstaden Bostad secured a €750 mln sustainability-linked seven-year loan from ING Bank and Natixis Pfandbriefbank to refinance a portion of its Dutch portfolio.
Rental income in Q2 2024 increased by 6.2% to SEK 3.4 bn (€295 mln), an all-time high, while net operating income climbed to SEK 2.8 bn (€243 mln) from SEK 2.5 bn (€217 mln) in the previous quarter, boosting the net operating income margin to 71.5% from 69%.
In its quarterly review, Heimstaden Bostaden stated: ‘The return to a stable outlook from S&P and Fitch is a key priority for the management and initiatives such as the privatization program are expected to support key metrics. The success of the privatization program reduces the need for secured lending, resulting in additional headroom to the S&P secured lending threshold.’
Co-CEO Christian Fladeland commented: ‘We continue to be cautiously optimistic for the rest of 2024, with interest rate cuts anticipated to gain further momentum in the coming quarter and a recovery of the real estate market on the horizon.’
Heimstaden Bostad manages a SEK 330 bn (€29 bn) portfolio of 162,960 homes across Sweden, Germany, Denmark, The Netherlands, Czechia, Norway, the UK, Poland, and Finland)
