SBB, a debt-laden landlord, ends its losing streak in the first quarter with a profit

SBB, a Swedish landlord, announced on Tuesday that it had turned a profit before tax in the first quarter 2025, after 11 consecutive quarterly losses. Separately, Aker Property Group, a Norwegian company, was named as its largest shareholder.

The real estate group that owns hospitals and care homes, but is heavily indebted, has reported a profit of 1.9 billion Swedish crowns (194 million dollars) between January and March, compared to a loss of 1,18 billion crowns a year ago. SBB is one of the many European real estate companies that have had to restructure and cut their debt during a period when interest rates were high and the economy was weak, especially in Sweden. However, market conditions began to stabilize last year.

Net operating income dropped to 510 millions crowns from 736 million crowns a year ago. The metric rose 4.3% for comparable portfolios due to lower costs.

Leiv synnes, CEO of SBB, said that the company is allocating resources to focus on occupancy and rental levels to increase income.

SBB announced in a separate release that it had acquired the right to purchase another 39,8 million shares of its associate company Public Property Invest from Aker Property group (APG), a part of Norway’s Aker.

APG would then be its largest shareholder, by capital, with a stake of 9.08%. PPI issued new shares to TRG Real Estate in exchange for a portfolio of industrial infrastructure worth 2,33 billion Norwegian crowns (223.73 millions dollars) that is controlled by Aker chair Kjell Inge Rokke.

TRG has agreed that it will transfer a part of its PPI shares to SBB for 164.6 millions new B-shares within the Swedish group. Aker stated that it would transfer the rights to APG to receive both its remaining PPI and SBB shares.

SBB is still the largest shareholder of PPI. APG will become its second largest shareholder.

Bertil Nilsson, analyst at Carlsquare, said: "Rokke clearly sees the great potential in this as non-cash issuing companies are valued... at net asset value discount."

SBB shares rose by 20% at the opening of trading in Stockholm. Since 2021, they have lost around 90% of their original value. Oslo saw PPI shares gain 5.9%.

(source: Reuters)