Wihlborgs has signed an agreement with Castellum to acquire all of Castellum's property holdings in Malmö, Lund and Helsingborg. The acquisition comprises 95 properties and 635,000 square metres of lettable space, and is being conducted in the form of a business combination at an underlying property value of SEK 13.3 billion. Wihlborgs purpose with this acquisition is to complement its portfolio in the Öresund region with a broader range of premises. This will create new opportunities for tenants to grow while also improving the conditions for Wihlborgs' long-term growth, also in a period with higher vacancies.
The acquisition
The portfolio consists of 49 properties in Malmö, 13 in Lund and 33 in Helsingborg. The lettable space breaks down as 43 percent office space, 41 percent industrial, 9 percent retail, and 7 percent other. In Malmö, the portfolio is concentrated in Hyllie, Fosie, the city centre, and the harbour; in Lund, in Gastelyckan, Ideon, and the city centre; and in Helsingborg, in the city centre, Berga, and Väla Södra. Wihlborgs has existing well-established property management in all of these areas.
This acquisition is subject to necessary approvals by the Swedish Competition Authority and the Inspectorate of Strategic Products (ISP). Completion is planned for 1 October; however, the exact timing will depend on the regulatory process.
For the full-year 2026, the expected annual rental value of the properties is SEK 1,130 million and, after property management expenses, they are expected to generate net operating income of SEK 661 million with an occupancy rate of 85 percent. This represents an initial yield of 5.0 percent and the portfolio's average lease term is 3.6 years. A deduction for deferred tax is made at 25 percent, corresponding to a preliminary amount of SEK 371 million.
The acquisition will enable Wihlborgs to continue growing despite a period with higher vacancies. Wihlborgs leverages acquisitions and additional investments in existing portfolios to provide future tenants with space without having to add new development projects to the market.
Ulrika Hallengren, CEO of Wihlborgs Fastigheter, comments:
"This acquisition aligns fully with our strategy of continued growth in an attractive region with positive underlying parameters for continued development. This investment means that we can continue to grow by expanding with buildings that are already in place, leveraging our shared strengths and developing our business in the form of efficient processes and a broader offering for our customers."
"An initial yield of 5 percent, despite a 15 percent vacancy rate, entails a significant upside and substantial potential for value creation going forward. On a per share basis, income from property management will increase already in 2027, even given a potential new share issue, which is one capital structure option that could be pursued at the appropriate time. Moreover, compared with the beginning of the year, letting discussions have now gained a completely different momentum, and we expect more activity going forward. Overall, this puts us in a strong position where our cluster strategy, combined with long-term ownership and commitment, can generate significant value over time."
"We have invested more than SEK 20 billion in the Öresund region in the form of new builds and improvements over the past 20 years. While we intend to continue with the above, today's market presents opportunities to develop existing properties and vacant spaces as part of our long-term growth. Castellum's South Sweden portfolio is well-managed and well-organised. It also offers many of the qualities and development opportunities - not to mention risk diversification across different property categories - that we value highly. The operations also have valuable expertise, experience and resources that we will use in our continued operation of the business in line with Wihlborgs' way of working."
Financing and loan-to-value ratio
Financing for the acquisition has been secured by Wihlborgs through Danske Bank, SEB and Swedbank. The acquisition will initially entail a loan-to-value ratio of 59 percent. Through a basket of measures, including improved cash flow, earnings growth, property portfolio restructuring and potential capital structure measures, Wihlborgs' aim is to gradually reduce this debt ratio to about 55 percent within two years and, in the long term, to around 50 percent.
"Our financing strategy utilises several sources for capital and enables us both to finance this acquisition and to continue working with our existing financial partners to ensure solid long-term financing. While the Group's strong cash flow allows for a higher loan-to-value ratio than we have had in recent years, our explicit goal is to once again reduce the ratio. The range of different tools at our disposal means we have the flexibility to act when the time is right," says Arvid Liepe, Deputy CEO and CFO of Wihlborgs.
Organisation
Castellum has 48 employees who will be included in the acquisition. To date, no final decision has been made regarding the future organisational structure and these questions will be addressed at a later stage.
A list is attached of all properties affected by the acquisition.
Wihlborgs Fastigheter AB (publ)
This information is of such a kind that Wihlborgs Fastigheter AB (publ) is legally required to disclose pursuant to the EU's Market Abuse Regulation (MAR) 596/2014. The information was submitted for publication through the agency of the specified contact people at 07:30 CEST on 25 June.
For further information, please contact:
Ulrika Hallengren, CEO, +46 (0)70 541 61 98
Arvid Liepe, Deputy CEO and CFO, +46 (0)40 371 17 31
Wihlborgs Fastigheter AB (publ) is a property company that focuses on commercial properties in the Öresund region. Its property portfolio is located in Malmö, Helsingborg, Lund and Copenhagen. In Malmö, Lund and Helsingborg, Wihlborgs is the leading property company. The book value of the company's properties totals SEK 66 billion, representing an annual property rental value of SEK 5.1 billion. Wihlborgs' shares are listed on the Large Cap List of Nasdaq Stockholm.
