Business model, strategies and goals

With clear
goals in focus

Vasakronan is owned in equal shares by the First, Second, Third and Fourth Swedish national pension funds. The owners are to ensure long-term financing of the pension system and invest their capital in various types of assets for a high and stable return. Property investments are made through Vasakronan, among others. Requirements for the companies that the Swedish national pension funds invest in are not only good returns, but also sustainable operations.

Our ambition

In addition to the mandate from our owners, Vasakronan’s ambition is to be Sweden’s leading property company. That is achieved by:

  • Generating a high total yield, that should also exceed that of the industry in general.
  • Being the preferred choice for tenants looking for office or retail premises.
  • Being perceived as the most attractive employer in the industry.
  • Assuming social responsibility and striving for long-term sustainable development.

To succeed, sustainable values need to be created in operations. Vasakronan therefore has a continuous dialogue with its stakeholders to survey and understand their expectations of the company. Value is created in operations through property management and development, and supplemented by active transactions.

Vasakronan's business model

Long-term goals

Vasakronan has ambitious goals for its operations, both short- and long-term. Vasakronan’s CEO and Management Team have overall responsibility for steering operations toward the targets and following up on quarterly results and internal steering parameters.

Financials

A total yield of at least 6.5% per year (rolling average over 10 years)

A total yield of at least 0.5 percentage points higher than the industry.

ENVIRONMENT

Our properties are self-sufficient and do not require any energy to be purchased.

We have halved our power requirements.

Our business and those of our customers generate no waste that is unable to be recycled or reused.

Our business is climate-neutral.

We build our properties using renewable, recycled or reused materials.

All of our financing is green.

In the top 10 globally of the GRESB sustainability survey

SOCIAL

All employees act in accordance with our values and our code of conduct.

We have a positive work environment free from negative stress.

Discrimination and harassment do not occur at our workplaces.

The design of our properties contributes to the security, safety and health of those who spend time in and around them.

Suppliers work in accordance with our code of conduct for suppliers.

We reflect the society in which we work in terms of gender, ethnicity and age.

We have no workplace accidents at our construction sites.

STRATEGIES

To ensure that Vasakronan lives up to the assignment set by its owners while also managing the conditions in the market, the Board adopts a strategic plan every year. The plan is preceded by an analysis of the market trends assessed to have the greatest impact on the company and its operation over a five-year period. The trends identified in this year’s strategic plan are described in more detail on pages 10–14 in Vasakronan’s annual report. The direction the company will pursue over the coming 1–3 years is established based on this trend analysis. The long-term direction is managed by five strategies..

1. Attractive properties

Vasakronan’s property holdings should focus on offices and city retail in growth areas in the Nordic region, that is markets with healthy conditions for rent growth and where we see that we can be one of the largest property owners with a critical mass.

The portfolio (in swedish) should consist of properties that have premises that are, over time, attractive in the rental market. Consequently, holdings are currently concentrated to Stockholm, Gothenburg, Malmö, Lund and Uppsala – strong economic growth markets. There is also healthy demand for properties with strong turnover and liquidity.

Vasakronan’s properties should be located in attractive office and retail locations that have good public transport connections, and offer efficient, modern premises. Retail properties are concentrated to city retail. The properties in the portfolio should also have qualities that meet our high sustainability requirements.

The current property portfolio is continuously expanded to match tenant and market demand, and new buildings are constructed as needed in locations with strong demand.

2. Secure money

Securing access to capital is necessary for our financial stability. We do this in different ways, for example through forecasting borrowing needs in good time, spreading loan maturities and striving for an efficient capital structure. Altogether, this means we reduce risk and increase opportunities to keep financing within the financial policy framework with good margins.

To further reduce risk, we make sure to have a broad borrowing structure from several funding sources. We meet with investors and other financiers proactively and keep constantly updated on changes in the market. We also take care to create growth in the market. We do this through, for example, leading growth in green financing where we participate in collaborations with other parties in the capital market. In 2013, we issued the world’s first green corporate bond, and in 2018 the world’s first green commercial paper. A significant portion of our funding is already green, which is the goal for the rest of our funding. Through stringent requirements for ourselves, we are raising the standard in the market.

3. Dedicated employees

Cultivating dedication and motivation among employees is not just the key to a successful property business, but also a responsibility that Vasakronan has as an employer. That is why Vasakronan offers good opportunities for development and a work environment where skills development, well-being and activities for collaboration are natural parts of daily life.

Vasakronan’s five values should permeate the entire organisation:

  • Openness binds us together
  • Enthusiasm drives us forward
  • We get things done
  • Fair and honest
  • A holistic approach

These values, along with the UN Global Compact principles, lay the groundwork for the company’s code of conduct. This means that all employees and job applicants must be treated equally, given equal opportunities for growth, development and promotion and receive equal pay for equal work.

4. Good landlord

Vasakronan should be the preferred choice when looking for premises in the selected markets. The offering therefore includes a broad range of attractive and environmentally friendly premises coupled with a higher degree of service than other property companies. Our broad range increases possibilities for tenants to locate new premises when their needs change without having to change landlord.

A close, open dialogue with the tenants is a prerequisite for long, healthy relationships. This gives us extensive knowledge of the properties and the tenants’ needs for premises. We offer different services that make our tenant’s daily lives easier, such as telephony, reception, security and catering. Moreover, our active sustainability agenda enables Vasakronan to help the tenants achieve their own sustainability goals.

It is becoming more common to view the premises as a tool for change and development of a business. Vasakronan can advise when potential or existing tenants are deciding on layout and modifications of their premises. Correctly designed, premises can enhance productivity and creativity as well as workplace satisfaction.

5. The wonders of technology

Technology is developing faster than ever. This gives us good conditions to change the entire business through and through. At Vasakronan, we are constantly working with new technological solutions, both on our own and with other parties. We test new technology in pilot projects and we involve customers and other parties when developing new solutions. We use technology to reduce energy consumption in our buildings and we produce an ever-growing portion of energy ourselves with the help of solar photovoltaics.

Smart technological solutions, where we combine knowledge and data to securely connect our properties, give us full control over the data in our buildings and make it possible for us to deliver new service to our tenants. By sharing data with others and taking an active role in jointly developing solutions in logistics, stream and access management, we contribute to the development of smarter cities.

Do you have any questions about our business model or goals?
Contact Stina Carlson for help.

Stina Carlson
Head of Group Controlling Stina Carlson 076-784 88 43 stina.carlson@vasakronan.se