Castellum Ab Adr Stock Earnings Reports

Key points for investors:

- Major portfolio transactions: Castellum signed divestments totaling ~SEK 24 billion in H1 2026, highlighted deals are SEK 14.3b sale to Wihlborgs (Skåne portfolio), SEK 5.0b sale to Alecta (Stockholm offices), and SEK 5.6b sale to AP7 (public properties). These large disposals are mostly closed or signed and will materially reduce portfolio size and secured debt when closed.

- Shareholder returns / capital allocation: Completed SEK 4.6b of share buybacks in H1 2026 (39m shares). Board approved a new buyback program up to SEK 3b (amounting to ~60% of Alecta proceeds). Management is considering all distribution options (buybacks/dividends) for remaining disposal proceeds and will decide when proceeds are received.

- Leasing and operations: Net leasing for the first six months was positive SEK 110m, driven mainly by Ericsson leasing the Infinity property (and additional Ericsson leases signed for two Hagastaden buildings). Excluding projects and large new leases, net leasing remains negative and occupancy has declined (occupancy now 87.5%). Like‑for‑like in-place rents fell ~1.3% year-on-year and NOI for the period was -4.8%, driven by lower income (higher vacancy) and higher operating costs (cold winter effects).

- Balance sheet & financing: Investment properties reported SEK 134b (including signed but unclosed Alecta and Wihlborgs deals); excluding those, ~SEK 116b. Loan-to-value 37.3% (policy <40%). Interest‑bearing liabilities down to SEK 57.3b (from 59.5b); expected to fall to SEK 49–51b after closings and allocations. Average interest rate rose to 3.5% (from 3.1%), and management expects an annualized increase in running financial net of ~SEK 200m (one-offs in Q2 related to bond redemptions ~SEK 48m). ICR 3.2x (policy >=3x). Castellum has terminated its S&P rating, maintaining one rating only.

- Strategy / deployment: Management states limited attractive reinvestment opportunities at suitable yields within their existing asset classes and markets; therefore a meaningful portion of disposal proceeds is earmarked for distributions and debt reduction. They continue to prioritize meeting a return on equity target (>10% over cycle), noting current annualized return ~5.2% (H1 run rate).

- Market commentary: Management describes Stockholm leasing activity improving, Gothenburg weak but stable, and regional markets sluggish. Large known tenant terminations (e.g., AFRY) have already been reflected in reported figures. Valuation cap rate remains ~5.7%; recent value changes reflect signed transactions and lower cash flow expectations across parts of the portfolio.