The company will be the third largest quoted property firm in Sweden.
Swedish property company Castellum, which owns around SKr 8bn of assets, is due to be listed on the Stockholm stock exchange next month. Around 65% of the shares in Castellum will be floated by Securum, the government-backed vehicle set up in 1993 to handle the bad property loans of Nordbanken.
The company will be the third largest quoted property company in Sweden, behind Hufvudstaden and Diligentia.
The decision to float Castellum follows a change of strategy on the part of the Securum management; last autumn, Castellum entered into negotiations with US investment bank Morgan Stanley regarding a direct sale of 60% of the equity but decided that in a rising equity market, a public issue would be more profitable. (EuroProperty, March 1997, p1)
Morgan Stanley is continuing to back Castellum, however. In an extensive note, London-based analyst Floris van Dijkum says: “We think the company has strong internal growth prospects, due to substantial vacancy in its portfolio, a rising rental market and the possibility of cost savings.”
Castellum was set up in September 1994, when Securum transferred about 1,100 properties to the vehicle. It has rationalised its holdings during the last two and a half years, and now owns 582 properties concentrated in five areas of Sweden: Gothenburg, Stockholm, Oresund, Western Smaland and Malardalen.
The vacancy rate in the 2m m2 portfolio is 13%, which represents “easy income” for an investor, says Morgan Stanley since this space “essentially comes for free”. The bank also believes there are good prospects for external growth through portfolio acquisitions.
Castellum has pledged to pay out at least 50% of its net income as a dividend, and Morgan Stanley expects a minimum dividend of SKr 2 per share.
