Vasakronan – summary of 2023

Sweden’s leading property company

Vasakronan is one of Sweden’s largest property companies and one of the world’s most sustainable. The company is owned by the First, Second, Third and Fourth Swedish national pension funds. We own, manage and develop 2.4 million square metres across 166 high-quality properties in prime locations and areas in Sweden’s four largest growth regions – Stockholm, Uppsala, Gothenburg and Malmö.

Vasakronan’s assignment

Is to generate a high, risk-weighted return for our owners, the First, Second, Third and Fourth Swedish national pension funds. Though never at the expense of the environment and people. A return that will benefit Sweden’s current and future pensioners.

We take responsibility

For our environmental impact and for all of the people who are affected by our business. We do so by creating good work and urban environments and by applying fair work conditions. It goes without saying that we also say no to any form of discrimination.

We create value

By developing our properties, neighbourhoods and areas with the goal of making them attractive and sustainable. We work strategically over the long term and take responsibility for creating environments that people want to be in. This creates significant value for our customers, our owners and society at large.

Strong credit rating

Moody’s affirmed Vasakronan’s rating of A3 with a stable outlook during the year. The rating is motivated by factors such as the strong ownership structure, good access to liquidity and the property portfolio’s high quality as well as by the high proportion of public sector tenants.

The rating is an important precondition for ensuring access to financing and reaching our goal of a diversified financing structure, and during the year a total of SEK 10 billion was raised in the bond market. Even though interest expenses increased due to higher interest rates, the interest coverage ratio amounted to a multiple of 3.8 with a loan-to-value ratio of 42%.

New green framework

November marked ten years since Vasakronan issued the world’s first green corporate bond. The market and Vasakronan have both evolved in the past decade and we have now seen the addition of the EU Taxonomy. For these reasons, we decided during the year to launch a new green framework. It is adapted to the Taxonomy’s more stringent criteria for energy efficiency in existing property portfolios and includes thresholds for carbon emissions from the building phase in new construction and redevelopment projects.

Improved income from property management

The year was impacted by nervous financial markets, high inflation and raised interest rates in combination with geopolitical turmoil in the operating environment. Demand for Vasakronan’s products has been strong despite the prevailing uncertainty among many businesses and individuals. This means that we continued to deliver stable figures in the underlying operations, with increases of 15% in the operating surplus and 8% in income from property management.

Sustainable urban development

Project operations remain an important component of business and we have continued to work on our major development areas. In Gothenburg, our focus is on Lilla Bommen, where we have several excellent lettings. Not least with SEB, which led to construction starting for the project development Kaj 16. With 12 of 16 floors made entirely of wood, Kaj 16 will be Vasakronan’s second – and largest to date – new construction project with a focus on construction in wood.

Södra City in Uppsala is another one of our major urban transformation projects. Construction continues of the Lumi property, the first stage of which is now fully let and will be completed in 2024. Lumi is one of Sweden’s most ambitious reuse projects where we have successfully investigated opportunities for large-scale reuse in order to guide the market towards more circular business models.