Fabege (FABG) Q2 2025 earnings summary

Executive summary

• Rental income for H1 2025 was SEK 1,717m, slightly down year-over-year, with a like-for-like decrease of SEK 53m (-3.3%) mainly due to relocations and prior negative net lettings.

• Net operating income fell to SEK 1,233m, impacted by higher maintenance costs and property tax.

• Profit from property management was SEK 657m, but the period ended with a net loss of SEK -267m due to negative property value changes of SEK -650m.

• The occupancy rate in the management portfolio is 87%, with expectations for further short-term decline before recovery.

• Portfolio focused on Stockholm with 99 properties valued at SEK 78.3bn and 1.3 million sqm lettable area.

Financial highlights

• Surplus ratio was 72% for the half-year.

• Realised and unrealised property value changes were SEK -687m for the half-year.

• Earnings per share improved to SEK -0.85 from SEK -2.17 year-over-year.

• Tax expense was SEK 116m, mainly from deferred tax reversal on a property sale.

• EPRA NRV per share at SEK 147; equity per share at SEK 119.

Outlook and guidance

• Net letting target of SEK 80m for 2025 remains, with optimism for improved activity in H2.

• Focus on increasing occupancy to 95% over several years and completing existing projects.

• Most future contract renewals expected at unchanged terms; market rents generally align with contracted rents.

• Market activity in Stockholm is showing early signs of improvement, with increased inquiries and viewings.

• The company expects stable yields and interest rates below 3% for the remainder of 2025.