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1. Company Snapshot

1.a. Company Description

Castellum is one of Sweden's largest listed real estate companies with a property value of SEK 98 billion.We are active in 17 Swedish growth regions as well as in Copenhagen and Helsinki.Every day, 250,000 people go to work in our premises.


We develop flexible workplaces and logistics solutions in close proximity to city centers and with a lettable area of 4.3 million square meters.One of our sustainability goals is to be completely climate neutral by 2030.Castellum is the only Nordic real estate company selected by the Dow Jones Sustainability Index (DJSI).


The Castellum share is listed on the Nasdaq Stockholm Large Cap.

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1.b. Last Insights on CAST

Castellum AB's recent performance was hindered by the Northvolt bankruptcy, which had a significant impact on the company's Q1 2025 results. The bankruptcy led to a challenging quarter, with the company navigating through the aftermath of this event. Furthermore, the company's efforts to drive growth through strategic investments and sustainability initiatives were overshadowed by the short-term disruptions caused by Northvolt's bankruptcy.

1.c. Company Highlights

2. Castellum's Q3 Earnings: A Step in the Right Direction

Castellum reported an EPS of 2.28, beating analyst estimates of 1.98. The company's revenue growth is expected to be 2.2% next year, according to analyst estimates. The direct property costs increased by SEK 40 million, equivalent to 2.5%. The company's net investments were SEK 3.5 billion, compared to minus SEK 327 million in the same period last year. Castellum's loan-to-value ratio stands at 36.5%, and the interest coverage ratio is 3.2x, indicating a stable financial position.

Publication Date: Oct -27

📋 Highlights
  • Positive Net Leasing Turnaround: Castellum achieved SEK 16 million net leasing in Q3, ending two consecutive quarters of negative net leasing.
  • High Vacancy Rate: Vacancy remains elevated at 90%, though slightly lower than the previous quarter.
  • Portfolio Valuation & Focus: The property portfolio is valued at SEK 160 billion, concentrated in office properties across southern Sweden, Copenhagen, and Finland.
  • Property Write-Down: The company wrote down property values by SEK 1.4 billion (1%) due to lower cash flow expectations and declining rental levels.
  • Cost Optimization & Strategic Shift: Direct property costs rose by 2.5% (SEK 40 million), while the CEO emphasized cost-cutting (e.g., SEK 0.5 million saved on newspaper subscriptions) and a more entrepreneurial strategy to boost profitability.

Operational Highlights

The company's operational performance showed signs of improvement, with a net leasing of SEK 16 million in Q3, a positive trend after two quarters of negative net leasing. However, the vacancy rate remains high at 90%. The CEO, Pal Ahlsen, emphasized the need for Castellum to become more profitable, with a focus on leasing, efficiency, and owning the right properties in the right locations. As he mentioned, the company will "use all tools in the toolbox, being faster and more flexible than competitors, to achieve this goal."

Property Portfolio and Asset Rotation

Castellum's property portfolio is valued at SEK 160 billion, with a focus on office properties in southern Sweden, Copenhagen, and Finland. The company wrote down property values by approximately SEK 1.4 billion, equivalent to 1%, due to lower cash flow expectations and downward pressure on rental levels. The CEO believes that Castellum should be more strategic in owning properties during their life cycle, which may lead to a higher asset rotation pace than historically.

Valuation and Outlook

Castellum's P/E Ratio stands at 21.0, indicating that the company's stock is trading at a premium. The P/B Ratio is 0.72, suggesting that the company's shares are undervalued relative to its book value. With a ROE of 3.39% and a ROIC of 3.76%, Castellum's profitability metrics are relatively low. However, the company's efforts to reduce costs and increase occupancy may lead to improved profitability in the future.

Dividend Yield and Cash Flow

Castellum's Dividend Yield stands at 1.64%, which is relatively low. However, the company's Free Cash Flow Yield is 7.42%, indicating a healthy cash flow generation. The Net Debt / EBITDA ratio is 11.89, which is relatively high, but the company's interest coverage ratio is comfortable at 3.2x.

3. NewsRoom

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How Investors May Respond To Entra (OB:ENTRA) Board Changes Requested by Castellum

Sep -22

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Castellum (OM:CAST): Exploring Whether Recent Valuation Reflects True Potential or Lingering Sector Risks

Sep -13

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Castellum AB (CWQXF) Q1 2025 Earnings Call Highlights: Navigating Challenges with Strategic ...

May -07

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Castellum AB (FRA:TEX) Q4 2024 Earnings Call Highlights: Strategic Investments and Dividend ...

Feb -20

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (12.36%)

6. Segments

Like-for-like Portfolio

Expected Growth: 12%

Castellum AB's 12% like-for-like portfolio growth is driven by strong demand for logistics and office spaces, particularly in Sweden and Denmark. Rising e-commerce and urbanization trends support growth in logistics, while a thriving startup scene and increasing demand for flexible workspaces boost office demand. Effective asset management, strategic acquisitions, and a solid balance sheet also contribute to the company's growth momentum.

Development Properties

Expected Growth: 15%

Castellum AB's 15% growth in Development Properties is driven by increasing demand for sustainable and modern offices in Sweden, Norway, and Denmark. Strong economic growth, urbanization, and a shortage of high-quality properties fuel the demand. Additionally, Castellum's focus on energy-efficient and environmentally certified buildings, as well as its strategic acquisitions and partnerships, contribute to its growth momentum.

Coworking

Expected Growth: 18%

Castellum AB's coworking segment growth of 18% is driven by increasing demand for flexible workspaces, rising popularity of remote work, and growing need for community-driven offices. Additionally, the company's strategic expansion into new markets, investments in digital infrastructure, and focus on sustainability also contribute to its rapid growth.

Transactions

Expected Growth: 10%

Castellum AB's 10% growth is driven by strategic acquisitions, expanding presence in Nordic markets, and a strong focus on sustainable property development. Additionally, the company's diversified portfolio, efficient cost management, and increasing demand for logistics and e-commerce facilities contribute to its growth momentum.

Group-wide

Expected Growth: 13%

Castellum AB's 13% group-wide growth is driven by strategic acquisitions, increasing rental income from a diversified property portfolio, and a strong Swedish economy. Additionally, the company's focus on sustainable and energy-efficient properties, as well as its proactive management of properties, contributes to its growth momentum.

7. Detailed Products

Office Properties

Castellum AB (publ) offers office spaces for rent, providing modern and flexible work environments for businesses of all sizes.

Industrial and Logistics Properties

Castellum AB (publ) provides industrial and logistics properties for rent, offering customized solutions for businesses with specific storage and production needs.

Retail Properties

Castellum AB (publ) offers retail properties for rent, providing prime locations for businesses to connect with customers.

Residential Properties

Castellum AB (publ) develops and manages residential properties, offering comfortable and convenient living spaces for individuals and families.

Project Development

Castellum AB (publ) offers project development services, providing customized solutions for businesses and organizations with specific property needs.

Property Management

Castellum AB (publ) provides property management services, ensuring that properties are well-maintained and optimized for tenants.

8. Castellum AB (publ)'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Castellum AB (publ) is medium due to the availability of alternative real estate investment options for investors.

Bargaining Power Of Customers

The bargaining power of customers is low as Castellum AB (publ) has a diversified tenant base and long-term contracts, reducing the negotiating power of individual customers.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium as Castellum AB (publ) relies on a few large contractors and suppliers for its development projects, giving them some negotiating power.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the Swedish real estate market, including regulatory hurdles and the need for significant capital investment.

Intensity Of Rivalry

The intensity of rivalry is high in the Swedish real estate market, with several large players competing for market share and tenants.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 51.74%
Debt Cost 3.95%
Equity Weight 48.26%
Equity Cost 9.91%
WACC 6.83%
Leverage 107.21%

11. Quality Control: Castellum AB (publ) passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Develia

A-Score: 7.5/10

Value: 5.7

Growth: 8.8

Quality: 7.5

Yield: 10.0

Momentum: 9.0

Volatility: 4.0

1-Year Total Return ->

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Stock-Card
CTP

A-Score: 6.6/10

Value: 4.8

Growth: 6.8

Quality: 6.7

Yield: 6.2

Momentum: 6.5

Volatility: 8.3

1-Year Total Return ->

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Stock-Card
Emilshus

A-Score: 6.0/10

Value: 2.9

Growth: 7.1

Quality: 6.2

Yield: 5.6

Momentum: 4.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Deutsche Wohnen

A-Score: 4.2/10

Value: 7.2

Growth: 2.7

Quality: 5.8

Yield: 0.0

Momentum: 2.5

Volatility: 7.3

1-Year Total Return ->

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Stock-Card
Castellum

A-Score: 4.2/10

Value: 4.2

Growth: 2.8

Quality: 5.7

Yield: 3.8

Momentum: 1.5

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
Atrium Ljungberg

A-Score: 3.6/10

Value: 3.0

Growth: 2.3

Quality: 5.4

Yield: 5.0

Momentum: 1.5

Volatility: 4.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

106.9$

Current Price

106.9$

Potential

-0.00%

Expected Cash-Flows