K-Fast Holding AB (publ): Interim Report January-March 2025
*In March an Extraordinary General Meeting approved the transaction with Brinova where K-Fastigheters property portfolio in Region South was divested to Brinova om April 1st, 2025. Payment has occurred with new issued shares in Brinova which makes K-Fastigheter the largest owner in Brinova with an ownership share of 57.6 percent.
*Occupancy rate of 96.4% contributes to an improved profit from property management of SEK 34.1 million for the first three months of the year.
*In April, after the end of the period, a transaction was made where K-Fast Kilen AB acquires all K-Fastigheters properties in Gävle and Uppsala. In total 288 apartments under management, 133 apartments in construction, 176 apartments with building permits yet to be construction started and an additional 242 building rights.
Financial ratios for the period 1 January–31 March 2025
(corresponding period in 2024 in brackets)
- Rental income: SEK 161.2 million (146.8)
- Profit from property management: SEK 34.1 million (25.3)
- Profit from property management per share: SEK 0.14 per share* (0.11)
- Growth in profit from property management per share: 32%* (-26)
- Result in business segment Construction before taxes: SEK 49.1 million (140.2)
- Earnings per share in business segment Construction: SEK 0.20 per share* (0.58)
- Growth in earnings per share in business segment Construction: -66%*
(58) - Profit for the period: SEK -5.3 million (35.5)
- Earnings per share*/**: SEK -0.02 per share (0.15)
- Long-term net asset value (NAV): SEK 6,233.0 million (Dec 31, 2024: 6,206.5)
- Long-term net asset value (NAV) per share: SEK 25.34 per share* (Dec 31, 2024: 25.23)
- Growth in long-term net asset value (NAV) per share: 0.4%* (-0.3)
- Interest coverage ratio (year): 1.6 multiple (1.6)
- Equity/assets ratio: 29.6% (Dec 31, 2024: 30,4)
- Debt-to-equity ratio: 59.4% (Dec 31, 2024: 59.1)
- Number of construction starts, apartments: 0 (341)
- Number of apartments under construction: 1,956 (1,729)
- Number of apartments under project development: 1,860 (2,693)
- Number of apartments under management: 5,082 (5,037)
- Net investments in investment properties: SEK 487.9 million (466.0)
- Investment properties: SEK 16,062.3 million (Dec 31, 2024: 15,616.5)
* Adjusted for new issues during 2024.
** There are no potential shares (e.g. convertibles in the company, and accordingly no dilution effect).
A message from the CEO
Since its inception in 2010, K-Fastigheter has focused on independently developing and building some of the market’s most attractive rental apartments at a cost level significantly below the industry standard. This is the very core of the business we have built from virtually nothing since the fall of 2010.
By challenging conventional methods, integrating a larger share of the ecosystem into our own operations, and consistently pushing the boundaries of an otherwise underdeveloped industry—where construction site efficiency has, in fact, declined over the past 20 years*—we have succeeded in completing projects at cost levels 25–30 percent below market value.
Even today, after years of high inflation and challenging conditions, we continue to launch projects based on rental calculations that deliver a direct return of 6 percent on total acquisition costs. There are differing opinions about long-term market values, but I have an unwavering belief that the direct return requirement for attractive rental apartments is well below 6 percent. If the market’s direct return requirement is 5 percent, we still maintain a margin of nearly 20 percent, and if the return requirement is 4.5 percent, our margin rises to 25 percent.
This describes the foundation of the business model we have built since our inception in December 2010.
From the end of 2014 until May 2022, Sweden experienced negative or zero interest rates—a period that disrupted many fundamental economic theories. During this period, we were able to retain completed properties to strengthen our earnings. Not only were we able to build a strong financial foundation by developing projects with margins of up to 25 percent, but once the buildings were completed, we had the luxury of retaining them—and with them, the earnings they generated.
As we built a larger property portfolio, the market increasingly came to view our Balance Sheet and property holdings as the core identity of our business. But those who look back—or who have been part of the journey over a longer period—know that we built our company and earned our profits through efficient project development and the ability to industrialize large parts of the construction process. As much as 80 percent of our earnings since the 2019 listing have come from this area. At the same time, the market and many observers have focused on property management, which has accounted for 20 percent of our earnings since our 2019 listing.
Following the transaction we completed with Brinova, we are returning to our roots. Our focus on profitable and efficient project development and construction processes will now be able to shine through, without our property management operations overshadowing the strong key figures generated by the part of our business we call Construction. The return on invested capital in Construction far exceeds that tied up in investment properties.
A large part of our focus during the first quarter was on bringing the transaction we announced in December 2024—the reverse acquisition of Brinova—across the finish line. As of 1 April, we have transferred our South portfolio—comprising approximately 75 percent of K-Fastigheter’s total property portfolio—to Brinova. Payment was made with just over 132.5 million Brinova shares, corresponding to 57.6 percent of all shares in Brinova. As K-Fastigheter has nearly 246 million shares, this means that as a shareholder in K-Fastigheter, you own 0.54 Brinova shares for every share you hold in K-Fastigheter. In other words, SEK 18 of Brinova’s net asset value per share in K-Fastigheter, or SEK 9 based on Brinova’s share price as of 31 March 2025, depending on how you choose to view it.
Not everyone has understood the logic behind the transaction, and there have been many questions. Both as CEO and as one of the largest shareholders in K-Fastigheter, I am firmly convinced that the transaction is in the best interests of all shareholders who believe in fundamental analysis and whose investment strategy is grounded in more than pure speculation. It is often said that the numbers speak for themselves, and that is certainly the case here. In the table to the left, you can see that K-Fastigheter’s earnings ability in Property Management as of 31 March, 2025, amounted to SEK 0.81 per share—meaning K-Fastigheter before the transaction with Brinova was completed. In the table, you will also find that K-Fastigheter’s earnings ability for investment properties, including our share of the new Brinova, amounts to SEK 1.07 per share as of 1 April, 2025—an overnight increase of 32 percent. That is the logic that appealed to us—combined with the fact that the new Brinova achieves a perfect geographical fit, and the industrial logic that when working with low-margin products such as residential properties, size is crucial to achieving efficiency and economies of scale.
Dedicated and focused work has delivered results, with the vacancy rate reduced to 3.6 percent by the end of the first quarter, and the trend indicating continued positive net letting even after the end of the quarter. During the quarter, we did not launch any new construction projects but instead focused fully on driving progress in the 928 apartments we started during 2024. In total, we have 1,956 apartments under construction. It is particularly gratifying that Prefab has secured its largest external order to date, with the order backlog reaching an all-time high and the internal share of the backlog dropping to an all-time low. At the end of the first quarter, only 27 percent of Prefab’s order backlog consisted of internal projects.
After the end of the period, we announced a transaction in which we are selling our entire portfolio in Gävle as well as a property in Uppsala Municipality to K-Fast Kilen AB. The transaction includes 288 apartments under management, 133 apartments under construction, 176 building-permitted but not yet started apartments, and building rights for an additional 242 apartments. The transaction further strengthens our already strong partnership with Kilenkrysset. With this transaction, K-Fast Kilen—51 percent owned by K-Fastigheter and 49 percent by Kilenkrysset—becomes a significant company in terms of size. With fully completed projects, the company owns properties worth approximately SEK 4.7 billion in the Mälardalen region.
The transaction with K-Fast Kilen AB is part of the implementation of K-Fastigheter’s new business plan, where divestments in favor of reinvestments in new projects, a higher degree of self-financing, and a strengthened Balance Sheet will continue throughout the 2025 financial year and the remaining period of the business plan, which runs until 2028.
In closing, I would like to thank all the amazing colleagues across the Group who work tirelessly and with great dedication to make us a little better every day. I would also like to extend my sincere thanks to everyone at K-Fastigheter and Brinova for their excellent work in connection with the transaction, and I look forward to continuing our efforts to develop Brinova within the K-Fastigheter family.
- Jacob Karlsson, April 2025
A complete Interim report for January-March 2025 is attached and published on: k-fastigheter.com/en/investors/financial-reports
A presentation of the earnings and operations will be published on:
k-fastigheter.com/en/investors/presentations
For more information, please contact:
Johan Hammarqvist, Head of Investor Relations and Communications
e-mail: [email protected], telephone: +46 (0)10-167 60 99
This disclosure contains information that K-Fast Holding AB is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the agency of the contact person, on April 30th, 2025, 8 AM CET.
K-Fastigheter is much more than a property company. Through an integrated process, we build our business in the two business segments Construction and Property Management. In the Construction business segment, completed homes are delivered, where K-Fastigheter has chosen to work with three in-house developed concept houses for homes in order to enhance cost efficiency and cut construction times. Furthermore, through the subsidiary K-Prefab, K-Fastigheter delivers complete frame solutions internally as well as to external customers. The Property Management business segment manages the Group's property portfolio with a focus on housing and since April 2025, K-Fastigheter owns 57.6 percent of Brinova Fastigheter AB, which is a leading property company in southern Sweden with a focus on the Öresund region. Since 2019, K-Fastigheter's B shares have been traded on Nasdaq Stockholm (short name: KFAST B). Read more at k-fastigheter.com