Fabege FY25: Profit Up, Vacancy Rate Rises to 14%

Fabege Reports Mixed FY25 Results Amid Leasing Challenges

Swedish property company Fabege AB (STO:FABG) announced mixed financial results for fiscal year 2025, highlighting an increase in earnings and dividends while simultaneously facing significant operational headwinds, including a rising vacancy rate and declining property values.

Financial Performance Overview

The company reported a 1.2% year-over-year increase in gross rental income, reaching SEK3,480 million. Profit from property management saw a notable 5.7% rise to SEK1,421 million. In a sign of confidence, Fabege announced a 10% increase in its dividend to SEK2.20 per share, surpassing analyst expectations. The residential development business also showed strong recovery, generating SEK280 million in revenue for the fiscal year.

Operational Headwinds and Market Impact

Despite positive earnings, Fabege is navigating a difficult leasing environment. The company's vacancy rate increased by 200 basis points to 14%. Furthermore, like-for-like gross rental income declined by 3.2%, and rental uplift turned negative at -0.8% in the fourth quarter. These challenges were reflected in property valuations, with like-for-like asset values falling 1.6% and EPRA Net Tangible Assets per share decreasing by 2.4% to SEK135.

Summary

Fabege's FY25 results present a dual narrative of financial resilience against a backdrop of operational stress. While increased profits and dividends may appeal to investors, the rising vacancy rate and falling property values signal persistent challenges in the Swedish property market that will require close monitoring.

FAQ

Q: What was Fabege's vacancy rate in FY25?
A: Fabege's vacancy rate increased to 14%, a rise of 200 basis points year-over-year.

Q: Did Fabege increase its dividend for FY25?
A: Yes, the company announced a 10% dividend increase to SEK2.20 per share.

Q: How did property values perform?
A: Like-for-like asset values declined by 1.6% in FY25, contributing to a 2.4% decrease in EPRA Net Tangible Assets per share.

Source: Investing.com