Kungsleden’s business model focuses on continuously developing the property portfolio’s composition and quality, with the goal of improving risk-adjusted return. In practice, this involves Kungsleden working actively on property management and portfolio enhancement.
Active portfolio enhancement can result in purchases and sales of properties with the aim of increasing the risk-adjusted returns of the portfolio. Maximising portfolio risk-adjusted return means Kungsleden systematically evaluating different possibilities. An evaluation sets potential purchases and existing holdings on an equal level, where the property’s yield is compared with its cost of capital. Properties are then set against each other to determine how the portfolio’s risk-adjusted returns could be improved through changes to composition and/or management actions.
Kungsleden does not limit its evaluation of potential purchases and sales to one or several geographical markets, nor to certain types of property. For Kungsleden, diversification is a way to achieve the company’s objective of maximising the property portfolio’s risk-adjusted return. Through our broad geographical diversity, location-specific risk is reduced. By having many different types of property, property-specific risk, i.e. changes in an individual property type and risk affecting the returns of the whole portfolio, are also reduced.