Diös Fastigheter Q2 2025 slides: 12% growth in property management income

Introduction & Market Context

Diös Fastigheter AB (STO:DIOS) presented its Q2 2025 interim report on July 4, 2025, highlighting strong growth in income from property management despite ongoing challenges in the Swedish real estate market. The company, which focuses on commercial and residential properties in Northern Sweden, reported a 12% increase in income from property management compared to the same period last year, demonstrating resilience in a market still adjusting to higher interest rates.

The company’s stock closed at SEK 70.15 on July 3, 2025, up 0.21% from the previous close, and has traded between SEK 56.45 and SEK 91.95 over the past 52 weeks. This performance comes amid continued economic uncertainty but growing optimism about Northern Sweden’s development prospects.

Quarterly Performance Highlights

Diös reported income of SEK 666 million for Q2 2025, representing a 5% increase from SEK 634 million in Q2 2024. The company’s operating surplus grew by 7% to SEK 479 million, while income from property management reached SEK 268 million, up 12% from the previous year’s SEK 240 million.

As shown in the following financial performance summary:

The economic occupancy rate remained stable at 90% by the end of Q2 2025, unchanged from Q1 2025 but down from 92% year-over-year. The company maintained a strong surplus ratio of 73% during the quarter, reflecting efficient property management despite challenging market conditions.

Net letting amounted to SEK 2 million for Q2 2025, marking the 24th positive quarter out of the last 26, demonstrating consistent leasing performance even in a more challenging rental market.

Detailed Financial Analysis

Diös’s rental income diversification remains a key strength, with a balanced portfolio across different property types and business areas. Residential properties account for 56% of rental value, followed by industrial/warehouse (14%), healthcare/education (9%), and retail (7%), providing stability to the company’s income stream.

The company’s refinancing efforts have yielded positive results, with SEK 5 billion refinanced at lower margins during the quarter. The average interest rate cost decreased to 4.0% at the end of Q2 2025, down from 4.2% at the end of Q1 2025, reflecting improved financing conditions.

Diös maintains a conservative financial approach with key metrics within target ranges. The loan-to-value (LTV) ratio stood at 54.0% in June 2025, up slightly from 52.9% in December 2024 but still below the company’s long-term target of 55%. The interest coverage ratio (ICR) improved to 2.4 from 2.2 in December 2024, exceeding the target of 2.2.

Property valuations remained stable with yields at 6.15% in Q2 2025. The company reported unrealized value changes of SEK -130 million related to a few properties, though management noted that recent transactions confirm overall property values.

Strategic Initiatives

Diös continues to execute its asset rotation strategy, disposing of non-core and fully developed properties while acquiring centrally located offices in cities with positive growth outlooks. The company has disposed of assets worth SEK 3 billion while acquiring new properties of similar value, resulting in a net reduction of 34 properties but an increase of 20,000 square meters in leasable area.

The company’s investment strategy focuses on tenant improvements and acquisitions, with all major projects built to BREEAM standards and with no speculation. This approach aligns with Diös’s commitment to sustainability and risk management.

Diös highlighted the favorable economic growth conditions in its Northern Sweden markets, including advantages such as hydropower, wind power, available land, cold climate (beneficial for data centers), and solid governing structures. The region is positioned to benefit from green steel production, electro fuel development, forestry, and data center expansions.

Forward-Looking Statements

Looking ahead, Diös management expressed confidence that increased vacancies are set to be reversed, though no specific timeline was provided. The company emphasized that the long-term outlook for the green transition remains robust, with the rental market showing resilience despite economic headwinds.

CEO David Carlsson, who assumed the role in 2025, reiterated the company’s strategic focus on Northern Sweden’s growth potential, while CFO Rolf Larsson highlighted the company’s prudent financial management. The company maintains its commitment to keeping the interest coverage ratio above 2.0 and LTV below 55% long-term.

Diös appears well-positioned to capture long-term growth opportunities in its markets, supported by a diversified tenant base dominated by government entities, a conservative balance sheet approach, and strategic focus on regions with favorable economic development prospects.

Full presentation:

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