Business Model
Kungsleden’s business model focuses on developing the composition of its property holding in response to tendencies on the Swedish property market. Its objective is to increase portfolio risk-adjusted returns continuously. Kungsleden can achieve its established objectives by conducting multiple, rapid transactions and by managing its properties efficiently. Its work is based on a control model which provides a continuous stream of decision support data for every property.
The company's ambition for cash flows from operating activities is to always be high and stable. The company works actively to enhance the risk-adjusted returns of its property portfolio. Operational risk is minimized by diversifying within property types, geographical markets and tenants, and by spreading rental contracts over time. A significant portion of revenues are sourced from public sector tenants, or from tenants whose operations are publicly financed. These property types typically have high risk-adjusted returns.
The actual figure of 4 (-12) per cent is below the 15 per cent target. Average annual returns in the latest five and ten years have been 20 per cent and 21 per cent respectively.