Most of Kungsleden’s properties are in growth regions, but where growth fluctuations are not extreme. Kungsleden’s holding on the market is primarily in locations where rent levels are fairly stable, which in itself, is a good basis for stable cash flow.
Certain property companies choose to concentrate the property holdings wholly based on geographic location. Others focus their property holding on selected property types. What are considered good properties for Kungsleden may not be the appropriate properties for other players. Kungsleden often goes its own way to get the goodies.
For Kungsleden, diversification is a way to achieve the company’s objective of maximising the property portfolio’s risk-adjusted return. Kungsleden does not limit its evaluation of potential purchases and sales to one or several geographical markets, nor to certain types of property. However, the focus is limited to the Swedish property market.
The majority of Kungsleden’s properties are in growth regions, and where fluctuations in growth are generally more limited. Stockholm is an example of a high growth location, but where rent levels, for example, vary widely over time. Kungsleden does not rule out purchases of properties in smaller locations, which are usually at a higher property yield.
After a positive start, activity on the business transaction market levelled off in the second half-year as debt concerns in Europe resurfaced. Although there was certainly some continued underlying buying interest in properties and portfolios for sale, greater difficulties arranging funding contributed to a more hesitant market. Sweden’s more well-known players, with strong finances, had the best prospects of closing favorable deals.
The lettings market generally remained positive, especially early in the year, and for Kungsleden’s part, very limited bad debt and only a few isolated insolvencies. There was some concern from certain retailers in the retail segment, who were experiencing more difficult conditions. However, this outlook was not consistent, and there were tenants who were not affected to the same degree as others.
For more information on the market we refer to external sources such as those listed below.