After the summer, several Swedish real estate companies have issued new equity through targeted new share issues to raise new capital. This new capital can be used for various purposes, such as investments for future growth or to manage debt maturity. Below, Peter Norhammar, manager of Avanza Fastighet by Norhammar, has compiled the companies that have conducted targeted new share issues after the summer.
In most cases, except for Corem, the capital raising is offensive and aims to increase the companies‘ investments, which are expected to result in rising cash flows and higher value development for the property portfolios in the future. The companies generally signal that they see good opportunities to make value-creating investments in existing and new properties. As the capital is invested, shareholders will benefit.
9.1 billion is a significant amount of money! However, in all cases, the share issues were fully subscribed in a few hours, indicating a strong interest in increasing investments in the real estate sector from funds specializing in real estate as well as from funds and other entities with broader investment mandates.
In four cases (Catena, Cibus, NP3, and SLP), the new shares were issued at prices exceeding the reported net asset value. Mathematically, this means that the net asset value per share immediately increases as a result of the share issue, benefiting existing shareholders. The share issue for Corem, which was conducted at a significantly lower price than the reported net asset value, results in a decrease in the net asset value per share. However, as the company can now repay debt faster, the company’s financial risk decreases, which was rewarded by the stock market.
Given the companies‘ active investments for continued growth, we believe that real estate stocks will continue to perform well on the stock market.
How is Avanza Fastighet by Norhammar performing?
We are pleased to note that Avanza Fastighet by Norhammar is up nearly 20% since the beginning of the year and that we are nearly 7% ahead of the real estate stock index since the beginning of the year and almost 10% ahead since we launched the fund in February 2022.
The fund’s largest holdings include:
– Balder
– Sagax B
– Catena
– Nyfosa
– NP3 Fastigheter
– Pandox B
– Platzer Fastigheter Holding B
– Wihlborgs Fastigheter
– Castellum
– Atrium Ljungberg B
With hopes for a peaceful Europe and rising stock markets, Peter Norhammar, manager of Avanza Fastighet by Norhammar.
*After fees before the real estate index SIX Nordic Real Estate Index as of 2024-09-30.
Remember that investments can fluctuate! Investing in funds, stocks, and other securities has historically been a good way to grow money, but no one knows how it will go in the future. It can go up and down, so there is no guarantee that you will get back the money you initially invested. Real estate indexes have provided a higher chance of return in the last 10 years (compared to OMXS30). Peter Norhammar managed the Länsförsäkringar real estate fund (2016 – 2020), which outperformed the OMXS30. For information, fact sheets, information brochures, and calculations for historical real estate index development, visit avanza.se/avanzafastighet. The opinions and conclusions expressed in the blog are the author’s own and should not be seen as investment advice and/or opinions from Avanza.