This article first appeared on GuruFocus .
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Rental Income:899 million SEK for Q4, up 4.4% from last year.
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Profit from Property Management:371 million SEK for Q4, up 11%.
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Surplus Ratio:75% for Q4.
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Profit from Residential Development:35 million SEK for Q4, with a 23% margin.
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Net Value Changes:711 million SEK downwards.
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Earnings Before Tax:293 million SEK for Q4.
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Net Lettings:33 million SEK for Q4, totaling 36 million SEK for the year.
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Dividend Proposal:2.20 SEK per share.
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Annual Rental Income:Almost 3.5 billion SEK.
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Net Interest Expense:Average interest rate decreased from 2.98% to 2.82%.
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Profit from Property Management (Annual):Increased by 5.5% to 1.4 billion SEK.
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Result Before Tax:508 million SEK for the year.
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Property Value:78.5 billion SEK.
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EPRA NRV:145 SEK per share.
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Parking Revenue:Approximately 210 million SEK for 2025.
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Release Date: February 05, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Rental income increased by 4.4% year-over-year, reaching 899 million for the fourth quarter.
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Profit from property management rose by 11%, ending at 371 million for the quarter.
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The surplus ratio was strong at 75%, aided by favorable weather conditions.
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Fabege AB ( FRA:WILC ) successfully converted residential land bank into shareholder returns.
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The company has a stable customer base with high-quality tenants and long lease contracts, contributing to a steady income stream.
Negative Points
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Net value changes were negative, with a downward adjustment of 711 million.
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The occupancy rate increased to 14%, driven by recent project completions, indicating higher vacancy levels.
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The company experienced a decline in rents by 0.3% during renegotiations.
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There was a termination of a land allocation agreement in Flemingsburg, impacting building rights negatively.
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The market value of the portfolio saw a shift upwards in the average yield, indicating potential challenges in maintaining property values.
Q & A Highlights
Q: Bent, you provided an update before Christmas. Now, after Q4 results, is there anything better or worse than you initially thought about the company? Any cultural differences encountered? A: Definitely some cultural differences, but on the positive side. Stockholm is vibrant with many opportunities. The employees are passionate about Fabege, which is crucial. On the downside, we have some vacant spaces that are in superb locations, and we need to fill them.
Q: With the current high vacancy rates in Stockholm, do you think the market will recover similarly to past cycles, or are there new factors like remote work affecting it? A: The vacancy in Stockholm is high, so recovery might take longer. However, the pipeline is growing, and there are opportunities in sectors like defense and tech. The demand for creative office spaces remains, and it's up to landlords to provide suitable premises.
Q: Can you comment on the positive net letting in Q4? Were these negotiations ongoing for a long time, and are rental rebates necessary to secure leases? A: The leases concluded in Q4 were not long-standing negotiations. The time to conclude leases is increasing, but deals are still being made. The positive net letting is a good sign, but we need more significant leases to see a real recovery.
Q: What is your net letting target for 2026, and are there specific tenants you're focusing on retaining? A: The target is 50 million in net lettings for 2026. We are always working with our tenants to retain them and help them grow. If they need to adapt their space due to market conditions, we assist them in doing so.
Q: Regarding property valuations, what led to the negative adjustments in Q4, and are we nearing a stabilization point? A: The expected indexation for next year was reduced, impacting valuations. There were also increased yields in suburban locations and a terminated land allocation agreement affecting values. These are small changes, but they had an impact.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
