Global Courant
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Heimstaden Bostad is struggling with rising interest rates and falling real estate values. Real estate values have been further reduced in the past quarter.
The value of real estate was depreciated by SEK 4.9 billion, corresponding to a decrease of 1.5 percent compared to the second quarter, when the value was depreciated by SEK 7.4 billion.
residence
The Heimstaden Group owns 162,000 rental properties in several European countries, including Sweden, Germany and Norway, with a value of NOK 347 billion as of second quarter 2023. The vast majority of properties and debts in the Heimstaden Group are located in the subsidiary Heimstaden Bostad. Heimstaden Bostad has approximately 220 billion in debt, including hybrid capital, while the debt at parent company Heimstaden is approximately 20 billion. Heimstaden Bostad is owned by Heimstaden (38 percent) and Swedish pension and insurance companies, such as Alecta and Folksam. just over 62 percent). Ivar Tollefsen controls Heimstaden via Fredensborg.The entire property portfolio is now valued at SEK 331 billion, down from SEK 344 billion at the turn of the year. In Norwegian krone the real estate portfolio amounts to 334 billion.
Heimstaden Bostad has the ambition to maintain the triple B rating from S&P. Then the interest coverage ratio, operating result (EBITDA) divided by interest expenses, must be at least 1.8. As of the third quarter, this core figure is exactly 1.8, compared to 2.1 in the previous quarter.
Willing to sell real estate
In an interview with DN, Ivar Tollefsen said that the rating must be defended when selling real estate. In the quarterly report, CEO Helge Krogsbøl repeats that it is not necessary to have new equity to deal with the impending maturing debts, but he also writes that it is an alternative.
The article continues below the advertisementHeimstaden believes that about a quarter of the portfolio, worth 85 billion Swedish krona, is suitable for sale. Heimstaden writes that the sales process will be accelerated in the coming quarters and that real estate will have been sold for up to 20 billion by the end of 2025.
The idea is that the homes are sold piecemeal and divided, and that the company can therefore achieve better prices. Despite higher interest rates and higher return requirements, investment director Christian Fladeland believes and hopes that Heimstaden will be able to sell at prices 20 percent above book value.
Tollefsen can sell
Heimstaden Bostad had a Loan-to-Value ratio (LTV) of 57.2 percent at the end of the third quarter, compared to 56.6 percent in the previous quarter.
In the third quarter, the company secured bank loans worth a total of SEK 13 billion and a total of SEK 50 billion in the past 18 months, the report said.
Heimstaden Bostad is owned by Ivar Tollefsen’s Heimstaden (38 percent) and Swedish pension and insurance companies, such as Alecta and Folksam (just over 62 percent). Ivar Tollefsen controls Heimstaden via Fredensborg.
The parent company Heimstaden has also faced major challenges after the interest rate increase. On Sunday, DN wrote that it is now open for Heimstaden to sell the Heimstaden Bostad shares, so that it can get rid of a hybrid loan of 4.5 billion with ten percent interest.(Conditions)Copyright Dagens Næringsliv AS and/or our suppliers. We would like you to share our cases via links that lead directly to our pages. Copying or other use of all or part of the contents may only be made with written permission or as permitted by law. For further conditions see here.
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02:58
Published: 20.08.23 — 01:58
Heimstaden Bostad: Reduces real estate value by 4.9 billion
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