Heimstaden (HEIM) Company presentation summary

Strategic positioning and platform overview

• Operates the largest private residential platform in Europe with SEK 332 billion in assets under management and approximately 163,000 homes across nine countries.

• Focuses on residential real estate, benefiting from strong market fundamentals and persistent supply-demand imbalances in urban areas.

• Management business provides stable, growing income with seniority in the distribution waterfall and a long-term management agreement valid until 2047.

• Recent divestments, including Danish assets, have accelerated liquidity and reduced capital markets debt, enhancing financial flexibility.

• Strategic focus on urban growth areas and multi-family residential, with a diversified portfolio including student and senior housing.

Financial performance and portfolio metrics

• Like-for-like rental income growth reached 6.3% in Q3 2024, with real economic occupancy above 98% for 13 consecutive quarters.

• Net operating income (NOI) margin improved for the 11th consecutive quarter, reaching 69.3% LTM, supported by disciplined cost control.

• Portfolio fair value increased by 0.8% quarter-on-quarter, reflecting organic growth and valuation resilience.

• Privatisation programme released SEK 4.7 billion YTD for deleveraging, with gross premiums of 27.9% and net premiums of 13.3%.

• S&P ICR stabilized at 1.6x, and S&P LTV declined to 57.7%, indicating improved credit metrics.

Liquidity, funding, and deleveraging

• Liquidity sources include management fees, dividends from Heimstaden Bostad, and asset disposals; management fee is 0.2% of HSTB's GAV, about SEK 660 million annually.

• No dividend paid in 2024 to support rating stability; focus remains on regaining rating and resuming dividends.

• Deleveraging efforts since Q2 2022 reduced debt from SEK 19.2 billion to SEK 10.5 billion, driven by asset sales and reduced capital markets exposure.

• Debt profile includes a mix of bank loans, senior unsecured bonds, and perpetual hybrid bonds, with a balanced maturity schedule.

• Standalone net LTV improved to 20.7% in Q3 2024, with a strong ICR of 5.6x, well within covenant thresholds.