Broader customer offering, more efficient financing
Klövern is consolidated in Corem since 15 June. Through the acquisition, the customer offering has been broadened at the same time as financing opportunities have been improved. Corem is now one of the Nordic region’s leading real estate companies with over 500 properties with a value of SEK 83 billion. The Klövern brand will now be gradually phased out and completely replaced by Corem.
The goals formulated for the coming years aim at – in a long-term sustainable way – creating good value growth through property management close to the customer, project development and strategic property transactions. At the financial level, the focus is on complementing the BBB-rating from Scope with an additional investment grade-rating from one of the three large rating agencies at the latest during 2023. This means that we always need to give priority to the most profitable and value-creating transactions in combination with cost-effective financing. It can also be noted that we under the fourth quarter reduced loan to value by two percentage points to 53 per cent.
Strong net letting, good earnings development
Activity in the office rental market continued to increase during the last quarter of the year, at the same time as there was high demand for city logistics. This was reflected in Corem’s net letting that amounted to SEK 98 million during the fourth quarter and SEK 129 million for the year as a whole. Among other things, a 15-year lease has been signed with A24 films for around 3,800 sq.m. in New York, while in the Swedish market, an 11-year lease for approximately 11,000 sq.m. has been signed with Bilia and a 15-year lease has been signed with Statens Försvarshistoriska Museer for new construction and letting of around 3,500 sq.m..
Earnings have developed well despite the fourth quarter being affected by higher energy prices, colder weather and temporarily higher costs for repairs and maintenance. During the full year, profit from property management, excluding the portion that comes from Klövern and acquisition costs, increased by 21 per cent.
Good prospects for 2022
Now that most of the restrictions related to the pandemic have been lifted, we are pleased to see how the return to workplaces has started in earnest. This creates good prerequisites for further economic recovery, including favourable demand for premises.
Rising inflation, including energy prices, is creating some uncertainty. The rise in inflation during 2021 will at the same time have a positive effect on rental income as 84 per cent of Corem’s Swedish leases are indexed in relation to October’s consumer price index (CPI), which rose by 2.8 per cent. This will have a positive effect on rental income of around SEK 90 million in 2022.