• Rental Income: SEK865 million for Q1 2025, slightly below the same period last year.
• Like-for-Like Income Decrease: SEK20 million, equivalent to -2.7%.
• Surplus Ratio: 69%, adjusted for nonrecurring items at 70%.
• Profit from Property Management: SEK285 million, compared to SEK329 million in the previous year.
• Unrealized Changes in Value: -SEK565 million.
• Realized Changes in Value: -SEK37 million.
• Property Value: SEK77.8 billion.
• Equity per Share: SEK122.
• EPRA NRV: SEK146 per share.
• Equity Asset Ratio: 46%.
• Loan-to-Value Ratio: 43%.
• Interest Coverage Rate: 2.5% on a rolling 12-month basis.
• Average Interest Rate: 2.91% at the end of the quarter.
• Net Letting: Positive SEK6 million for Q1 2025.
• Occupancy Rate: 87% in the management portfolio.
• Investment in Projects: SEK447 million for the quarter.

• Warning! GuruFocus has detected 8 Warning Signs with FBGGF.

Release Date: April 14, 2025

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

Positive Points

• Fabege AB (FBGGF) maintains a strong focus on the Stockholm area, which is considered the engine of the Swedish economy.
• The company continues to believe in the future of office spaces, with increasing office occupancy and the role of offices as dynamic meeting places.
• Fabege AB (FBGGF) reported a positive net letting of SEK6 million for the first quarter of 2025.
• The company has a strong balance sheet with an unchanged equity asset ratio of 46% and a loan-to-value ratio of 43%.
• Fabege AB (FBGGF) has good access to financing, with successful bond issuances and undrawn revolving credit facilities totaling SEK6 billion.

Negative Points

• Rental income for the first quarter decreased by SEK20 million on a like-for-like basis, equivalent to a 2.7% decline.
• The surplus ratio was slightly impacted by nonrecurring items, resulting in a decrease to 69%.
• The company experienced negative changes in property values, with unrealized changes amounting to minus SEK565 million.
• The occupancy rate in the management portfolio decreased to 87%, reflecting challenges in the rental market.
• The Stockholm office rental market has been weak, with increasing vacancy rates in all submarkets.

Q & A Highlights

Q: Can you provide an overview of Fabege AB's financial performance for Q1 2025? A: Asa Bergstrom, CFO, reported that rental income for Q1 2025 was SEK865 million, slightly below the same period last year. On a like-for-like basis, income decreased by SEK20 million, mainly due to relocations from previous negative net letting. The surplus ratio was 69%, adjusted to 70% for nonrecurring items. The profit from property management was SEK285 million, down from SEK329 million the previous year.

Q: How has the property value changed in the recent quarter? A: Asa Bergstrom, CFO, noted that the total property value amounted to SEK77.8 billion, with a negative change in value of SEK565 million due to expectations of longer vacancy periods and slightly lower rent levels, particularly in Solna. The average yield increased slightly to 4.55%.

Q: What is the current status of Fabege AB's financing and interest rates? A: Asa Bergstrom, CFO, stated that access to financing remains strong, with new bonds issued totaling SEK400 million. The average interest rate at the end of the quarter was 2.91%. The company has undrawn revolving credit facilities totaling SEK6 billion and plans to refinance upcoming bond maturities with new bonds.

Q: What are the current trends in the Stockholm office rental market? A: Stefan Dahlbo, CEO, mentioned that the Stockholm office rental market has been weak, with increasing vacancy rates across submarkets. However, there is good demand in the CBD, and some companies see opportunities to relocate there. The number of employees in office-intensive industries has been flat, and economic improvement is needed for growth.

Q: What are Fabege AB's future development plans? A: Stefan Dahlbo, CEO, highlighted ongoing projects such as Pasen in Hammarby Sjostad and Alfa Laval in Flemingsberg, which are expected to be completed this year. The company is also preparing for future projects in Arenastaden and Haga Norra, with a focus on securing tenants before starting new commercial developments.

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