Earnings Call: Q4 2025

Jan 30, 2026

Summary

FY2025 income from property management rose 11%, with Q4 positive net letting of SEK 15m. Industrial and logistics led growth as portfolio rotation and refinancing strengthened financial metrics, while office vacancies remained a challenge.

I would like to warmly welcome everyone listening in. My name is Johanna Hult Rentsch, and I will be sharing this presentation with my CFO, Jakob Nilsson. 2025 has been an intense year for us. We have been operating in a challenging market, and we have had a high focus on close customer engagement and letting amid strong competition in the office segment. Vacancies has been both our biggest challenge and our biggest opportunity, and across the organization, we have worked actively with customer dialogue and letting. We have been completing twice as many renegotiations as in the previous year, and towards the end of the year, market conditions improved as such. We closed the fourth quarter with a positive net letting of 15 million Swedish crowns. I will come back to our net letting in more detail later in the presentation. At the same time, we have maintained a high transaction pace throughout the year, both on the acquisition and divestment side, and this has supported our portfolio rotation. It has improved our leverage and strengthened our overall financial position. Our credit metrics, rating, and financial flexibility have all improved during the year. 2025 has also been marked by uncertainty, including tariff threats and slower-than-expected economic growth in Sweden as such. Against this backdrop, it is particularly encouraging that we have delivered an 11% increase in operating profits for the full year. I would especially like to highlight the strong performance of our industrial and logistics segment. With several projects underway and a very good letting activity, this segment has been a key growth engine for us. It now represents close to half our portfolio by area, and it is a business that we intend to continue growing going forward. If we look at the major events during this quarter, we have been particularly active on Hisingen. We secured the largest office lease agreement of the year with a global IT company, and we let out 6,700 sq m. This office lease is actually the largest lease of the year in our wholly owned portfolio. We also let 10,400 sq m to an international industrial player, and we have also obtained the building permit for Arendal Port View. Also the transfer of ownership of the previously communicated Tuve Östergärde acquisition that we made during the summer. If we stay in the area of Hisingen a little bit longer and look at this part of our portfolio, which is located directly in the Port of Gothenburg, including Arendal and Torslanda. This is prime Nordic logistic locations with strong connectivity to shipping terminals, rail infrastructure, and logistic flows. With Stena Line's relocation of the ferry by 2030, the area is further strengthened as a transport hub, offering development potential of up to 70,000 sq m of modern logistic space within the current detailed development plan. If we summarize 2025 in numbers, we have increased our rental income and net operating income by 5%, while the income from property management grew by 11%, and this is a strong result given the uncertain economic environment. Net letting for the year amounted to minus 14 million Swedish crowns, and we have worked intensely with the leasing and renegotiating while maintaining a strong cost control within the property management. If we look at the specific quarter, this is what that looks like, and Jakob, we will come back to this later in the presentation. I will also like to mention the letting that we did of an office unit of 3,300 sq. m. in Gamlestaden. This was closed after the end of the period, and this marks the first step of letting the former head office of Mölnlycke Health Care that was vacated in the summer. If we dive into the positive net letting of the quarter, it is actually the strongest level of new letting in the existing portfolio since one and a half year back. This was driven by, of course, a strong activity with 23 new leases signed, and it is also a positive rental effect from the renegotiations corresponding to 4% increase. This is actually the strongest quarter of the year. This is not including the letting of Tuve Torset that I just mentioned. That lease agreement was closed after the quarter closed. This gives us a strong and positive momentum heading into 2026, which feels really, really good. If we then look at the net letting for the whole year, it amounted to minus SEK 14 million, including associated companies. More than half of the new office leases were actually signed with existing customers or clients. That proves that we have a very close dialogue with our existing customers, the way we should have as a local player. The renegotiated volume was about the same level as last year, but nearly double the number of negotiations compared to last year. The rental income from these renegotiations declined slightly by 2% over the year, but that is mainly due to the large renegotiation with Folktandvården last quarter, where a rental rebate was exchanged for a six-year lease extension. That was a balanced decision to secure a long-term income for us. The rental level is actually on the same level, however, in that specific lease. However, we [Foreign language] Accrete. Accrete, yes. So in this case, you should start again from. Should I take this whole slide first? Yes. Yes, okay, then we take it. Okay. Okay, the net letting for 2025 amounted to minus SEK 14 million. I would like to mention that more than half of the new office lease agreements were signed with existing customers. That shows that we managed to have a good dialogue with our clients, as we should as a local player. We renegotiated a volume that is about the same volume as last year, but with nearly double the number of lease agreements compared to last year. The rental income declined from these renegotiations with about 2% over the year, but that is mainly due to one large lease, and that is with Folktandvården, where a rental rebate was spread out over the whole six-year lease period. That is a balanced decision that we made to secure a long-term income. The main drivers during the year for the net letting, it is really clear that the industry and logistics segment contributes really well. Also we have contributions from Mimo, the property that we bought end of 2024. That has now an occupancy rate of 88%, and the rental levels that we have signed are considerably above the rental guarantee. The rental guarantee has now run out, which means that Mimo is fully on its own, so to say, but it is going really well. While we are talking about Mimo, and that remains an important growth engine, we have signed about five leases, and the rental level consistently is above the guaranteed rental. Why I mention this is because this is the main driver for the occupancy rate that has gone down 2% during the year. About 1% is due to Mimo. The rental guarantees that run out. If we look at the tenant retention, that remains really strong, 85%. That is reflecting strong customer relationships and a very active asset management from our property management. I would like to mention how we work with our clients. I will give you a few examples. For instance, we work through cross-functional teams that are meeting weekly under a new initiative. That means that we, on all levels in the company, are engaged in the customer dialogues. We also offer ready-to-move-in premises through a concept called Here and Now. We also provide pre-qualified and climate-calculated fit-out packages to our clients. During the year, our management team has also been strengthened, most recently with the appointment of our Head of Office Business, with Anders Woodall. These are our 10 largest customers. It gives a broad mix of businesses that reflects how we operate in Gothenburg, and also our role as a landlord and city development of the city's business community. We know our market, and we are committed to truly understand our customers. If you look at our tenant mix here, you can conclude that we have hotels, public authorities, and that creates a resilience and stability. I find that the work from the past year is a very good example, where we see that 65% of the renegotiations during the year were concluded with public sector, for instance. This is our mix on the total. If we then look at the office market in Gothenburg, we have a high vacancy rate due to new offices that have been brought into the market, mainly during 2021 and 2022, where about the supply of 10 years was brought into the market over two years. We have no new office project started this year or 2025, which means that there will be no new completions behind 2028 that we are aware of right now. When we look at this, we can see that this will, by time, will the vacancy rate go down, and the rental levels are also stable. What is driving the economic situation in Gothenburg? The cycle has strengthened noticeable during the autumn, and we saw, of course, this downturn following the tariff chaos during the spring. But we are now back to a normal economic cycle, and the recovery in the economy has been driven strongly this time by households and retail, which has improved since last time with about 10 units. In addition to this, the service sector has also been strengthened. The construction industry remains challenged with continued weak activity, and the manufacturing sector still sits at a subdued level of 95. It is still weak, but it is showing some resilience and significant cost-saving measures that is running through here. I think that's really interesting if we also look at the unemployment rate that has gone down slowly. It's now 6.4%, and Gothenburg remains with the lowest unemployment rate in the country. The labor market in Sweden shows signs of gradual improvement as whole. If we dive a little bit into these two pictures, Gothenburg is, as you know, Sweden's export hub, and that's why I bring these pictures up. If we look at how last year actually looked like, we can see that the export-orientated economy has shown surprising resilience in 2025, despite these tariff threats and the uncertainty. We should also remember that about 10% of Swedish exports go to the U.S., and roughly 70% goes to Europe. It's also reflecting close integration with the major global markets, and the global trade patterns are currently shifting, as we have heard the last few days. The automotive industry, on the right-hand side, we can also see that after having an industry that has faced high pressure from China and also, of course, a stronger Swedish currency, despite this headwind, business confidence has rebounded to normal levels again, although the demand, of course, for labor is still not fully returned. Sweden is one of the world's leading innovation nations, and we are ranked second globally in the Global Innovation Index. The Gothenburg area is Sweden's foremost R&D hub, and we are accounting for around 35% of the private R&D investment. That's supported by a highly skilled talent base with a strong concentration of engineers and scientists. Actually, the most common role is actually engineer. Every 10th person in Gothenburg is an engineer. The region benefits from this diverse business landscape, which is, of course, not only cars or vehicles, but it's spanning from defense, life science, and advanced manufacturing. We have had a very strong population growth, and we have also had major investments in rail and public transport since that has significantly expanded the labor market from about 900,000 people in year 2000, and now it's up to 1.6 million. That's supporting long-term urban growth. So, we benefit from a diverse and broad business landscape, everything from Saab's expansion within the defense industry to a growing life science focus. Our region reflects so much more than just to build cars, even though it's really exciting that we can develop and build the XC60 right here in Gothenburg. With that, I would like to give the word for you, Jakob, for the results and the financing. Thank you, Johanna, and good morning, everyone. Platzer continues to deliver solid growth in income from property management. This quarter, 5% growth, and for the full year, 11%. If we look at the rental income, we had a slightly lower level of rental income than Q4 2024. However, a little bit slight higher than previous quarter, Q3 this year. Main reason for lower income this year was that in Q4 2024, there was a high impact on add-on in rents for tenant fit-outs. But of course, also the higher vacancy we have now has an effect. Gladly, we continued to keep the costs on a very good level, which means that we can show a continued growth in the NOI this quarter with 1%. And actually, the NOI margin for the full year 2025 was 79%, which is one of the highest ever for Platzer. Financial net, of course, plays an important role for the income from property management, and in the fourth quarter, our financial cost, which was SEK 8 million better than the same quarter 2024, despite higher debt. We have continued to focus the work with the finances, and I will come back to that a little bit later in the presentation. But all in all, as said, income from property management increased by 5% in the quarter and 11% full year. Going to the property valuation and property values, they remain stable, the property values, at around SEK 30 billion. In the quarter, we report an unrealized value change of SEK 107 million. That's basically driven by cash flow changes. The net investments during the quarter was SEK 285 million, whereof SEK 169 million was the acquisition of the industrial property called Östergärde in Tuve. If we look at the full year for net investments, we have been working with the capital structure during the year and had a high activity, especially first half year with a number of sales. So for the full year, net investment is minus SEK 448 million. The combination of the strong underlying earnings and the stable property values and the divestments carried out has strengthened our financial KPIs in the bottom. If we look at the interest cover ratio, it's now at the level of 2.5, and net debt compared to EBITDA is around 11%, and loan-to-value calculated on total assets is 47%. If you calculate that on the properties, it's 49%, and these are levels that we are comfortable with and in line where basically where we want to be. To sum up, we continue to show a solid growth, albeit a little bit slightly lower pace than previous quarters, but that's according to expectations. We have stable property values and strong improving financial KPIs. Finally, the bottom line for the quarter profit after tax was SEK 309 million, and that result was positively impacted by the value changes on derivatives of SEK 49 million. In our reports, we present our earning capacity, which represent a snapshot of earnings based on the current lease agreements we have, but also on the cost side, on the current financing costs, et cetera. To illustrate how our revenues may fluctuate, I would like to use this bridge to illustrate that. Based on the earning capacity in our Q3 report, that is as of October 1st, the SEK 423 million, the rental incomes we had on October 1st indicated a rental revenue of that in Q4. As mentioned, the earning capacity is a snapshot, and we have other incomes that come during the quarter. As you can see here, one item is the accrued rent for add-ons, that is for tenant fit-outs, et cetera, that we accrued, and that amounted to SEK 6 million during the quarter. The said acquisition that we had during the quarter in the industrial property contributes with SEK 2 million. Then we have other items amounting to SEK 7 million, and that is, for example, parking income, insurance income, rapid move-ins, conference income, et cetera. All in all, that sums up to the quarter's income of SEK 438 million. If we sum up those total add-ons during the quarter, except for what we have in the contracts, is SEK 50 million, and basically at the same level as in Q3. Let us take a closer look at the key drivers behind our performance this quarter, broken down across the areas, the like-for-like portfolio, the projects and project development, and transactions. Starting with the revenues, the rental income, we have decreased the revenues from the existing portfolio and also in project. As said, one reason is high add-ons last year, but also higher vacancies this year. For example, Mölnlycke Health Care that moved out last summer, that has had a negative impact. Then encouraging that we already have leased out part of those areas, which we press released earlier this week. The growth is primarily driven by transactions, and that is the Mimo property in Mölndal that is the main contributor. As Johanna mentioned, we are signing new leases at attractive levels in that property, and that grounds well for future earnings and major tenants such as Kappahl, Siemens move in. Overall, revenue decreased by 1% in the quarter, but increased 5% for the full year. On the middle line, we have the property costs, and they decreased with SEK 8 million during the quarter compared to the corresponding quarter 2024. That is mainly within the existing portfolio and explained by several items, such as lower credit losses, lower utility costs, and maintenance costs, but also recovered property tax during the quarter. Overall, if you look at the net operating income, it decreases by 2% both in like-for-like and projects, but transaction contributes with 5% growth. That results in a total growth in the quarter of 1% and 5% in the full year. During the quarter, we carried out internal valuation, as we do every quarter for the full portfolio. In Q4, we have also done external valuation of approximately 60% of the total value, and our internal valuations exceed the external valuations by 1.4%, and that was 2024, 1.7%. The yield that we apply in our valuation in average was 5.9% now in Q4. It was 5.8% in Q3, but the difference there is basically the new property that goes in with a higher yield than the average, and the rest is on the same level. During the quarter, we invested SEK 118 million in existing properties. We had the SEK 167 million for the acquisition, and then we have unrealized value changes of SEK 107 million, and that is 0.4% of the value. Virtually the entire value change there is driven by increased cash flow, ending up at the property value of SEK 30 billion. Moving to our financing, which have continued to strengthen this year. We feel strong support from the banks that want to grow with us, and we also see continued strong capital market. During the fourth quarter, we continued to take advantage of the strong capital market by, for example, issued a new MTN bond of SEK 300 million on a five-year period on good levels, 145 basis point. On the banking side, we have been very active with refinancing of loans, 2.4 billion during the quarter. As a result of this, the average interest rate decreased by eight points during the quarter, at the same time as our average debt maturity increased from 2.2 to 2.7 during the quarter. As shown in the lower chart on the right-hand side, we have now 22% of credits that mature within 12 months. If we go back to Q3 report, that figure was 35%, so quite a good movement there. On that basis, we increased the debt slightly during the quarter. Interest rate maturity, we did not do any new derivatives during the quarter, but we have SEK 500 million that matured. Our average interest fixing period is now 2.8 compared to three last quarter. Overall, average interest rate 345, as said, 8 basis points lower than September 30th, and 23 basis points lower than year-end last year. The decrease of the interest rate is 45% explained by lower credit margins and 55% on lower STIBOR on the unhedged loan volume. In summary, we have strengthened the financial position during the year significantly, and the growth in earnings and larger liquidity buffer and rating upgrade makes us much better prepared to actively manage the capital we have. We see ahead of us that we will be still active in the transaction market, both in acquisitions and divestments. Platzer have a long track record of growth since its listing in 2013 that this chart shows. On average, we have increased the income from property management per share by 13% over the period. Over the same period, the dividends per share has grown by an average of 12%. Also not included here, but if you look at the net asset value per share, it has increased by 15% during this period. We continue to create value for the shareholders throughout three pillars of property management, projects, and transactions. The Platzer share. During the quarter, the board of directors decided to exercise the mandate from the AGM to repurchase shares for up to 600 million. That is the aim to increase the shareholder value, but also enabling delivery under incentive programs. To date, at year-end, the share purchase amount was approximately 40 million out of the mandate of 100. This year, the board proposes the AGM to make a dividend of SEK 2.20 per share, and that you can compare with the dividend of last year on SEK 2.10 per share. Sustainability. Our sustainability transition continues and is fully integrated into our business and operations. We are very pleased to see that, once again, we have a very strong improvement in the energy efficiency, 4% in 2025, which is higher than our own internal goal of 3%. If we look at going back to 2013 again, we see that we have total 40% lower energy usage. That, of course, benefits both the environment, but also the clients and also our bottom line. In addition to focus on energy, we are now placing strong emphasis on reducing our climate emissions, which largely come from our refurbishment projects, the fit-outs. Here, we apply our own concept in Swedish, Självklara inredningsval, under which we calculate, manage, and minimize the climate impact. Sustainable financing, 73%, which is an increase by 6 percentage points compared with 2024. Back to you, Johanna. Thank you, Jakob. I would like to summarize how we focus on our growth going forward. Our absolute highest priority, and to be continued, is our letting, our renegotiations, handling our vacancies together with our property team. This is where we deliver results and cash flow Here and Now. Together with our DNA and history of good cost control, this gives a very efficient property management that Jakob highlighted in the former slides. At the same time, we continue to actively work on our portfolio rotation and strategic transactions. That means that we are both buyers and sellers in the market with a clear objective, to enhance the quality of our portfolio and to create long-term value. When it comes to project, which is our third base where we grow our business, industrial and logistics remains to be prioritized growth area for us. It is relatively short construction lead times and limited risks in terms of letting in these projects, and we generate a quick cash flow and a really strong value growth, leveraging our key driver for us. This is also a very strong market in Gothenburg with a low vacancy rate and a good demand. Energy efficiency projects, as Jakob mentioned, is also important for us and helps us our ability to manage and control cost efficiency, for instance. Together, of course, our willingness to act in a sustainable way. At the same time, we are also laying the groundwork for the next phase of the company's growth, advancing, for instance, the detailed development plans. We are securing project opportunities for gradual and profitable growth in the office segment as the market will normalize when the economic growth in the country and in the region as such improves. These are the growth areas that we are focused on for now. With that, I would like to thank you for your attention, and we herewith open up for questions. Thank you.