(Información remitida por la empresa firmante)
Given the current market conditions, the return requirements on our properties have increased, leading to lower valuations. Despite this, we manage to report positive value growth, which is a sign of strength. Once again, I would like to emphasize that this is due to our unique business model in which project development and construction at a production-to-value of 72 percent allows us to meet declining values in our management portfolio. How this develops in the future will depend on whether inflation can be pushed down and how much the Riksbank (Swedish central bank) needs to raise interest rates in the future. It is reasonable to assume that valuations will fall further in the short term for the industry. In the long term, as I previously mentioned, I believe that investing in rental property is a wise move. Especially for a company like K-Fastigheter, which builds at costs that are below market value. K–Fastigheter aims to have an average growth in long-term net asset value per share of 20 percent over a business cycle. On a year-on-year basis for 2022, we reached 16 percent compared to 36 percent for both 2020 and 2021. In the current market, I consider 16 percent to be a strong figure and can confirm that we are able to adapt in response to changing market conditions.
As I highlighted in the previous CEO comments, it is incredibly important to actively work on the credit and derivatives portfolio. Our credit portfolio comprises traditional bank loans spread across dozens of Nordic banks. Successful and long-term partnerships with many banks are crucial in times of market unrest.
Since 2019, a large proportion of our credit portfolio has been hedged with interest rate derivatives. At the end of the year, these interest rate derivatives had a market value of slightly more than SEK 400 million. As a result, we can continue to restructure the derivatives portfolio and increase the degree of hedging at interest rates below current market interest rates. At the end of the year, our interest rate hedge stood at 73 percent, against 70 percent on 30 September 2022. The average interest rate at the end of the year was 2.72 percent, against 2.29 percent at the end of the third quarter. Our active work on the credit and derivatives portfolio and the fact that K-Fastigheter has no bond financing, with the associated refinancing risk, gives us a sense of security and confidence.
Even though market conditions have deteriorated over the past year, I strongly believe that K-Fastigheter, with its unique business model, will be able to continue to launch construction projects and generate good business even in the current market situation. There is an underlying need for new housing, and K-Fastigheter wishes to contribute to social progress by offering attractive rental housing in Sweden and Denmark.
— Jacob Karlsson, February 2023
A complete Year end report January–December is attached and published on: k-fastigheter.com/en/investors/financial-reports
A presentation of the earnings and operations will be published on: k-fastigheter.com/en/investors/presentations
For more information, please contact:Johan Hammarqvist, Head of Investor Relations and Communications
-e-mail: johan.hammarqvist@k-fastigheter.se, telephone: +46 (0)10-167 60 99
This disclosure contains information that K-Fast Holding AB is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the agency of the contact person, on February 16th, 2023, 9 AM CET.
As a property company, K-Fastigheter’s objective is to add value for tenants by creating attractive homes with superior comfort. The Group’s operations encompass active property management, project development and proprietary construction operations. To enhance cost efficiency and cut construction times, K-Fastigheter has chosen to work with three concept buildings, developed in-house and constructed for proprietary management. K-Fastigheter provides some 3,700 homes in several locations in the Öresund region, in the province of Småland and in western Sweden, and is assessing new markets as production capacity increases. The Group’s property portfolio has a book value SEK 13.1 billion, with an annual rental value of about SEK 490 million. Since November 2019, the company’s Class B shares have been traded on Nasdaq Stockholm under the (NASDAQ: KFAST B). Read more at k-fastigheter.com
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