Earnings call transcript: Castellum AB sees stock dip in Q3 2025

Castellum AB, a $6.1 billion market cap real estate company, reported its third-quarter 2025 earnings on October 23. While the company did not disclose its actual earnings per share (EPS) or revenue, the stock experienced a decline of 2.03%, closing at 113.65 USD. This movement brings the stock closer to its 52-week low of 95.9 USD. The market reaction appears to be influenced by a decrease in net operating income and property value write-downs, despite positive strides in energy efficiency and leasing. According to InvestingPro’s analysis, the company maintains a "GOOD" overall financial health score of 2.58 out of 5.

Key Takeaways

• Castellum’s stock fell by 2.03% post-earnings announcement.
• Net operating income decreased by SEK 226 million.
• Property values were written down by SEK 1.4 billion.
• The company improved energy efficiency by 7%.
• Positive net leasing reported at SEK 16 million.

Company Performance

In Q3 2025, Castellum faced financial pressures, with net operating income falling by SEK 226 million. Despite this, the company maintained a stable economic occupancy rate of 90% and achieved positive net leasing of SEK 16 million. Castellum’s strategic emphasis on owning properties in prime locations and enhancing energy efficiency reflects its commitment to sustainability amidst challenging market conditions.

Financial Highlights

• Net Operating Income: Decreased by SEK 226 million
• Property Values: Written down by SEK 1.4 billion
• Economic Occupancy Rate: 90%
• Net Leasing: Positive at SEK 16 million
• Average Interest Rate: Reduced to 3.1% from 3.2%

Market Reaction

Following the earnings call, Castellum’s stock price decreased by 2.03%, closing at 113.65 USD. This decline places the stock nearer to its 52-week low of 95.9 USD, reflecting investor concerns over the company’s financial performance and property value write-downs.

Outlook & Guidance

Looking ahead, Castellum aims to achieve a 10% return on equity over the business cycle. The company plans to focus on leasing and reducing vacancies, with potential for higher asset rotation and smarter capital expenditure strategies. Future guidance includes EPS forecasts of 0.23 USD for the next quarters and annual forecasts of 0.92 USD and 0.95 USD for FY2025 and FY2026, respectively.

Executive Commentary

CEO Paul Alcén emphasized the need for Castellum to enhance profitability, stating, "Castellum needs to become more profitable." He highlighted the company’s strategic shift towards leasing over yield compression, noting, "Back to basics... instead of yield compression, it’s leasing."

Risks and Challenges

• Property Value Write-downs: Continued declines could impact financial stability.
• Macroeconomic Pressures: Economic fluctuations may affect real estate investments.
• Interest Rate Changes: Variations in interest rates could influence borrowing costs.
• Market Competition: Intense competition in the Nordic real estate market.
• Regulatory Changes: Potential changes in real estate regulations could pose challenges.

Q&A

During the Q&A session, analysts inquired about the potential for a company split and the emphasis on market growth potential over efficiency. The management expressed openness to asset swaps and transactions, as well as considering potential share buybacks.

Full transcript - Castellum AB (CAST) Q3 2025:

Christoffer Strömbäck, Head of Investor Relations, Castellum: Good morning, everyone, and welcome to this presentation of Castellum’s Q3 report. My name is Christoffer Strömbäck, and I’m Head of Investor Relations. There will be a Q&A session at the end of the webcast, and if you’d like to ask a question by phone, please dial #KEY5 on your telephone keypad and ask your question. Let’s start. Please go ahead, Paul Alcén.

Paul Alcén, CEO, Castellum: Good morning. The mission from the owners and from the board to all at Castellum is crystal clear. Castellum needs to become more profitable, and I think that’s an exciting and fun assignment, a fun mission, but I don’t think it will be a walk in the park. I think everyone knows that the heydays of real estate are over for this time, so now it’s back to basics for Castellum in the day-to-day business. Instead of yield compression, it’s leasing. Instead of interest rates, which were almost zero, it’s turning over every stone to find ways to become more efficient and more cost-efficient. It’s also in the day-to-day business making sure that we are owning the right properties in the right locations and consequently seizing the opportunities we see in the transaction market.

It means that we will become a more entrepreneurial company, I would say, and a less bureaucratic company. Although the net leasing in the first quarter, the third quarter, this quarter was positive with SEK 16 million, we know that the net leasing for the previous quarters has been negative. In terms of vacancy rate, we know that our performance will become slightly worse going forward than it is right now due to this negative net leasing in previous quarters. In the property management for us right now, it’s mainly one focus, and that’s leasing, leasing, and leasing. It means that we have to become more flexible and faster in our leasing activities. At this stage, I’ve been CEO now for almost two months.

I’ve seen almost all properties, not all our properties yet, and just a personal reflection, I think what I’ve seen so far of the property portfolio is actually a bit better than I had expected. Of course, that statement has to do with what I thought before I started, but at least it’s slightly better than I thought, and I’m very happy about that. The locations are good and suit the type of purposes the buildings have. We have nice locations for office in the inner cities, but also nice locations, but in B locations in the office segment. We have lots of industry and warehouse and logistics also in the right locations given the purpose of those buildings. I also think that the property portfolio is a bit more well-kept than I had thought before. That’s a nice starting point, I think, for my new assignment here in Castellum.

The other reflection I would like to do is I met most, but not all of the staff, and I’m meeting quite competent staff that know their property portfolio by heart. I think we have a nice starting point for not turning the ship around, but really to get to where the owners and the board want us to, more profitability. As I suppose most of you know, we are a commercial real estate company with most of our holdings in the southern part of Sweden, but we also have properties in Copenhagen and in Finland, mainly in Helsinki. Most of our assets are office properties. We have lots of public tenants, governmental tenants, and then we have a large proportion also of warehouse and light industry.

Most of you also know that we have a significant share of the in Norway called Entra ASA, which owns mostly AAA-located office buildings in Oslo, and we own almost 40% of that company. All in all, we have almost, and including Entra ASA, we have almost properties for SEK 160 billion and directly own SEK 137 billion.

Christoffer Strömbäck, Head of Investor Relations, Castellum: Thank you, Paul. Jumping into the summary of the results. The results compared with the same period last year are negatively affected by divestments and high vacancies. In addition, income from property management is impaired by higher financial costs due to one-off profit from our bond repurchase last year. Net leasing the third quarter is positive, SEK 16 million, and minus SEK 166 million for the period. Still happy to report two consecutive quarters with positive net leasing. Occupancy rate stands at 90%, which is somewhat lower than last quarter. Net investments of SEK 3.5 billion compared with minus SEK 327 million the same period last year. Going into details, looking at development of income during the period, the like-for-like portfolio income is unchanged. Indexation contributes, but is offset by high vacancies.

The vacancies in the coming quarters will continue to increase due to our weak net leasing in the first quarter. The direct property cost for the like-for-like portfolio is increased by SEK 40 million, equivalent to 2.5%. Direct property cost decreased at the beginning of the year due to the warm winter, though increased in the second and third quarter primarily due to the high rental losses, which increased by SEK 25 million. Divestments decreased income with SEK 125 million, however, partially mitigated by acquisitions in the second quarter, contributing to the income with SEK 29 million. Central administrative and property administrative cost is in line with previous years. On an aggregate level, NOI decreased by SEK 226 million with divestments, increasing vacancies, and one-off insurance claims recorded during the second quarter of the previous year as key drivers.

Looking at renegotiations corresponding to an annual rent of SEK 197 million, which translates to 9% of total lease stock up for renegotiation were conducted during the period, with an average positive change in rent of 1.6%. Limited investments on average to secure the renegotiated leases. Additionally, contracts with an annual rent of SEK 1.345 billion were extended during the period with no change in terms, equivalent to 60% of total lease stock up for renegotiation, which is up from 50% in the second quarter, indicating that a good portion of our tenants are comfortable continuing paying their current rent of the indexation. Net leasing for the quarter amounts to SEK 16 million for the period. The net leasing amounts to minus SEK 166 million. The economic occupancy rate amounts to 90%, a decline of 1.2% since third quarter 2024.

The decline is driven by increasing vacancies corresponding to 0.8% and a general review of vacancy rents, which explains an additional 0.4%. Looking at property values during the period, Castellum AB has written down property values with approximately SEK 1.4 billion, equivalent to 1%. The value change is partly driven by the default of Northvolt, the fact that OFFRE will leave approximately 24,000 square meters in Solna, and generally lower cash flow expectations in our valuations due to downward pressure on rental levels and/or increasing tenant investments to uphold lease levels in some of our markets. The valuation yield is in all essence the same as the second quarter 2025 at 5.63%. In addition, our projects continue to show positive value add.

Looking into the transaction market in Sweden, the investment volume in the Swedish real estate sector ended up at approximately SEK 104 billion in the period compared with SEK 82 billion in 2024 and SEK 83 billion in 2023. Our investment volume of approximately 20% was office properties, which is higher than 2024 and 2023, indicating growing interest into the office segment. However, on aggregate, a bit lower than the historical average. Looking at financial highlights, market conditions are very favorable. Credit margins are at historically low levels and with attractive term premium. Current credit spreads in the domestic market for a three-year bond is at around 90 bps and for a five-year bond around 120 to 125 bps. The European market is at the lower end of this range. Nordic banks continue to offer competitive pricing and are willing to increase volumes.

S&P confirmed our BBB rating with stable outlook during the quarter. Also, we hold a Ba2 rating with stable outlook from Moody’s. Low refinancing activity during the quarter. In total, we refinanced SEK 1 billion in secured debt on a 10-year tenor. No activity in the bond market and limited bond maturities in the coming six months. Average interest rate currently at 3.1%, down from 3.2% during the second quarter. We see a potential to further reduce the average interest rate in our debt portfolio by refinancing loans and bonds on better terms. Looking at financial key ratios, very small changes in financial key ratios compared to the previous quarter. Loan-to-value now at 36.5% and ICR currently at 3.2 times. Comfortable headroom against policy levels and covenants. Average debt maturity and average fixed interest term stable at 4.6 and 3.6 years respectively.

We would like to highlight that our interest rates hedging exclusively comprises plain vanilla interest rate swaps. Interest-bearing liabilities amount to SEK 57.5 billion, down by SEK 1 billion since the beginning of the year. Over to you, Paul.

Paul Alcén, CEO, Castellum: Thank you, Jens. As most of you know, we have a very sustainable portfolio and a high focus on sustainability. Here I would like to highlight the energy efficiency, which has improved by 7%. That’s what I meant previously, that we have a very good staffing in the company because it’s not easy to reduce the energy consumption by 7%, which is needed since the costs of energy are normally increasing quite heavily from the municipalities since we buy a lot of energy from them. This is a very good performance, I would say, improving in energy efficiency. We have made some acquisitions this year. We bought a couple of properties from Kåre during the summer, also sold some properties, mostly single assets, and we made investments. I think going forward, as I foresee it at least, we will have more transactions going on in Castellum.

Even if the net investments may remain the same, we will have higher figures both on the acquisition and property sales side of things because that’s, I think, one driver of profitability for a property company in owning exactly the right properties at the right moment in time. I think that sums up our presentation, and we are happy to answer questions.

Christoffer Strömbäck, Head of Investor Relations, Castellum: Yes, thank you very much. If you’d like to ask a question by phone, please dial #KEY5 on your telephone. The first question comes from Fredrik Stensved, ABG.

Thank you very much. Good morning, thanks for taking my questions. Firstly, Paul, when you took the CEO position almost two months ago, at the end of August, I believe you stated that the management and the Board of Directors would sort of formulate a strategic update or a strategic review. Would you say that the communication today where it’s back to basics, it’s focused on leasing, leasing, leasing, etc., is that the strategic review all said and done, or should we expect anything more in sort of a formal strategy update going forward?

Paul Alcén, CEO, Castellum: I think that’s what I’ve said regarding back to basics is certainly part of the day-to-day business of a commercial real estate company. We are still working and thinking a bit about how to exactly formulate a strategy. We will come back to that in a more formal way than this.

Okay. Perfect. Sorry. I think it’s mentioned in the CEO letter that maybe Castellum will be more about entrepreneurship, decreased bureaucracy, and selling and buying when good opportunities arise, and so on. Is it possible to make any more concrete comments about what this means? Which type of properties are you looking to sell and buy, etc.?

No, not at this stage, I would say. What I can say, though, is that I’m also surprised by this. Our colleagues in the industry have reached out to see if there are any swaps we could make with properties or that they are interested in buying certain parts of our property portfolio or in general making transactions. There’s definitely opportunities in the market.

Okay. Thanks. Final question from me, Paul. What’s your view on share buybacks given where your share is trading and implied yield as you see it in the direct transaction market versus buying shares?

Personally, I’m all in favor of that. We’re not there yet in our discussions internally, but I’m in favor of buying back shares, at least when we have such a huge discount as we have today.

Thank you. That’s all for me.

Thank you.

Christoffer Strömbäck, Head of Investor Relations, Castellum: Thank you. Next one is Johan Wong Campen. Please go ahead.

Hi. Good morning. Thank you for taking my questions. In the media, there were talks about you considering splitting up the company, or at least the shareholders talking about that. What are your thoughts on that now?

Paul Alcén, CEO, Castellum: It’s too early to answer that specifically, but that’s obviously something many people are speaking about, the possibilities of splitting Castellum into smaller parts, and that would sort of show value on the stock market. That’s obviously one option that we have, and we are looking on continuously all options we have for driving profitability. I can’t really say more than that at this stage.

Okay. When you’re talking about owning the right properties in the right locations, how do you see the current pace of non-core asset sales? Is there a change in what you designate as non-core?

What I mean with owning.

Perhaps also following up on that.

Yeah?

How do you see assets outside of Sweden as well?

Yeah. What I mean with owning the right properties in the right locations is owning those properties that will contribute to our mission to, over the business cycle, giving a return on equity of 10%. That’s exactly what I mean with that. That doesn’t mean that we should have specific locations, only AAA locations in downtown cities, or that we should only have office buildings. I think we will have a mix of different types of properties that we believe that in the long term will support us in our mission to get 10% return on equity.

Okay. That’s clear. You were talking about asset swaps, that colleagues of your view in the industry were considering asset swaps with you. What’s your view on non-yielding assets in your portfolio, like the SEVA airport? Could you consider swapping that into, say, a higher-yielding asset?

This was more a comment that there are transactions being made in the market and that there’s a big interest for our portfolio in the market. All our business, all our activities here at Castellum are aiming to reach our target of 10% return on equity. If a swap with some other owners is supporting that, we would obviously look into that in acquisitions as well and disposals as well.

Okay, that’s clear. Thank you.

Christoffer Strömbäck, Head of Investor Relations, Castellum: Thank you, Jan. Next one is Lars Norrby, SEB.

Thank you. Just to follow up on the strategy and the portfolio composition in particular, when you’re looking at it, are you particularly thinking about parts that are subscale in terms of achieving efficiency? Are those most likely to be on the divestment list?

Paul Alcén, CEO, Castellum: I mean, efficiency, that ends up in the cash flow from the property, right? When we are looking at this, we are not looking at efficiency in that manner. A property can be very inefficient in some sense, but very profitable. We are not saying that just because this property is a bit messy to deal with or is expensive in some sense, that’s reflected in the cost of the property, right? We are looking at this from a strict expected return on equity perspective.

In that sense, just still thinking about, let’s say, the portfolios in Finland and in Denmark. Yeah, are they big enough or are they efficient enough to warrant the position within Castellum?

I can answer generally on that question. I think more important than size and more important than efficiency in some sense is the markets as such. Are there markets that will support rental growth? Are there markets where vacancy in 10 years from now or 5 years from now will be lower or higher than today? Those questions are significantly more important than if we can reduce the cost of property management by 10 or 15 crowns per square meter per year. The rental growth and the demand are significantly more important. I think that’s something that shows up very well when you do a portfolio analysis like this, that it’s the long-term vacancy and the long-term growth possibilities in rents that are the most important factors when owning real estate. Obviously, the price, the price of the properties, that’s the starting point, obviously.

Okay. Final question from my side. I brought up Finland, brought up Denmark. Let’s talk about Norway just briefly. I was thinking about Entra.

Yeah.

You’re holding in Entra ASA some 37%, and at the same time, Balder is close to 40%.

Yeah.

Are you, I mean, my impression is that Balder may be interested in looking for some kind of solution to that ownership situation. What’s your view on Entra going forward?

I think what I can say regarding Entra ASA, I think they are facing somewhat of the same challenges that we are facing in Castellum AB. They also have a financial target of trying to reach 10% return on equity over the business cycle. To reach that in an environment where yields are not compressing, you need to have significantly better growth in the net operating income with as low investments as possible. They are facing, I would say, the same challenges as us. How can we be growing net operating income on a like-for-like basis with as low investments as possible to come close to the target? They are facing the same challenges as we do. Regarding our position there, we haven’t discussed that much, and I have no further to say rather than that we as owners really want to see profit, obviously, in the company to increase.

The only way forward is increasing net operating income by working by leasing, optimizing costs, and not just minimizing CapEx. Making smarter CapEx.

Okay. Thank you.

Thank you.

Christoffer Strömbäck, Head of Investor Relations, Castellum: Next one is Nadir Rahman from UBS.

Hello. Good morning, and thank you for taking my questions. It’s good to hear from you, Paul, on your first conference call.

Paul Alcén, CEO, Castellum: No worries.

Looking at the like-for-like rental growth, I know that was, I think, around -0.3% on a total basis and -2.4% on a net basis. Could you give a bit more color on the contributions from indexation versus vacancy, given that the vacancy did reduce slightly? Sorry, the vacancy increased slightly during the quarter. That’s my first question.

I think we’ve managed to increase sort of the rental levels in the portfolio, but the vacancy increase is sort of wiping that away. I think the rental levels have increased somewhat around 2% in the portfolio, but the vacancy effect is bigger, plus we have a bit more rent losses than we’ve had in previous periods. That explains the sort of flat like-for-like growth in rental income.

What kind of percentage were you seeing during the quarter for your indexation?

During the quarter, we get it once every year. What we see right now is if the CPI, if we get 0.8%, we believe that from the first quarter, we will achieve slightly below 1%. We have fixed step-ups in some of our contracts. Of course, some of our public sector tenants have below 100% CPI indexation. On average, when CPI is low, we usually get a bit higher.

Okay. That’s very clear. My second question is on the net lettings. Like you mentioned, it’s been positive in Q3. I know that for the year to date, it’s been negative overall. How do you see this trending in Q4? I know that Q4 generally is a more active quarter for lettings and general transaction activity in the Nordics and in Sweden in particular.

I’m reluctant to speculate, but what I can say is that this is our main focus. It’s leasing, leasing, leasing to get to turn this around, so to say. We don’t want to present a flat like-for-like growth rate. We don’t want to present an increasing vacancy. This is our focus. It’s leasing, leasing, leasing to turn that ship around, so to say.

In order to achieve all the leasing that you need to maintain vacancy and prevent that from rising any further, do you feel like you’re willing to change your rental strategy and perhaps offer more rent-frees or incentives to tenants? Do you think you’ll need to compromise on rents in order to achieve a higher level of leasing?

I think we need to use all the tools in the toolbox, being faster and more flexible. It’s very dependent on the specific square we’re talking about. We really need to use all tools in the toolbox in a market where in some markets there’s a slight oversupply of offices, for example. You have to be faster and smarter and more flexible than your competitors. At least in the long term, having the right locations where there actually is a long-term demand for the square meters. Using all the tools in the toolbox, being faster, more flexible than our competitors, we can turn this around.

Okay. That’s very clear. Final question from me, directed to Paul, is that you mentioned earlier in the call that the situation at Castellum and the portfolio and so on were, quote-unquote, "better than you expected" when you came in. What was your expectation before you joined Castellum?

That’s a good question. As I said, I think what I’ve seen so far, the locations are slightly better than I thought they were. I think that the upkeep of the buildings is slightly better than I thought. As I said, it’s difficult to, it’s just my feelings around this. It’s difficult to put words on it. It feels a bit like a 100-meter sprinter with the target running below 10 seconds on 100 meters. I thought we were starting at 103 meters with the goal of running below 10 seconds, but it’s actually starting from 100 meters. To give some color on that, it’s slightly easier than I thought, given a slightly better portfolio and a very dedicated staff in the company.

That’s very interesting to hear. Thank you for taking my questions.

Thank you.

Christoffer Strömbäck, Head of Investor Relations, Castellum: Thanks. Next one is Stefan Andersson, Danske Bank.

Thanks. Three quick ones from me. First one on reducing costs. You’re talking about that, and we see that in your report as well. You mentioned that. Just trying to understand the magnitude of this. I mean, it’s one thing to cut newspapers and be prudent of whatever you do, but is there any, do you see any bigger opportunities here? I mean, is there still synergies from Kungsleden merger to take out, or is it, I mean, just trying to understand if we’re talking about small, small things here and there, or if there’s any bigger ones.

Paul Alcén, CEO, Castellum: I’m sorry to have to ask this, but could you repeat the question and speak a bit louder because I didn’t hear the full question?

Okay. Sorry. Hope this is better. Do you hear me now?

Yeah, go on.

Yeah. My question is really on reducing costs. You talk a little bit about that, but just to understand the magnitude, is there any bigger things that could be done with efficiency? Heritage from Kungsleden merger or what? I don’t know. Is it just smaller items here and there and gnista, as we say in Swedish, daily?

Okay. I got the question now. Your question regards if I could give any estimate how much costs we could cut when we are turning over every stone. I cannot give a forecast cost about that. What I can say is that we are really turning over every stone. That’s why I mentioned the newspaper subscriptions. I think I mentioned that in the CEO letter. When you’re turning over every stone, you will find things like that. Just to be specific, when it comes to newspaper subscriptions, I think we can save SEK 0.5 million there. That’s perhaps not money, but a large, many stones being turned over, I think we can save a lot of money. I cannot give an estimate of that at this stage.

Okay. Good. Thanks. We talked a little bit about renegotiated rents that is up. I imagine there is some investments in CapEx associated with that. Could you maybe give us a flavor of what kind of direction you have on the spot market? I mean, do you actually see rents coming up, or is it actually going down?

I mean, looking at the renegotiations, I must admit that I was actually surprised myself when we dug into it. We do not invest that much money into the renegotiated deals, and we do not see any clear sign that it’s increasing or decreasing.

Okay. Thanks. The final one is SEVA airport, which I mean, I thought I’ve seen it as a very attractive asset that you have within a very nice segment and all. I understand that you’ve had some planning issues there with other potential use of the airport and all that. Maybe could you elaborate on your hopes for that now with the new situation, if you could get compensation somehow, or if you could alter the use in some way, whatever you might have on that?

Cannot give so much details, but it’s, in my mind, a very valuable asset going forward, especially given the huge investments that will be done in the defense industry. I think that’s an extremely valuable asset as it is. It’s not yielding too much right now. Not too much, but that’s more of a value play than anything else. It’s a very valuable asset.

Okay, thank you.

Thank you.

Christoffer Strömbäck, Head of Investor Relations, Castellum: Next one is Adam Shepton from Green Street.

Good morning. I hope you can hear me okay. A couple of questions, Paul. Coming back to your comments on buying and selling of assets, I just want to ask you to be clear. Are you talking about sort of one strategic repositioning of the portfolio and then back to business as usual? Or do you mean to say that the business model will permanently shift to much higher asset trading over the cycle? I have another question, but maybe we could start with that one.

Paul Alcén, CEO, Castellum: We can start with that one. No. What I mean is that a property has a life cycle. You build it, you manage it, and then you have a phase where it’s degrading, and then you have an upgrade phase. I think Castellum is, depending on market and depending on which type of asset type, good in all of these phases, but perhaps not good in all cities and in all markets, and all markets are a bit different. Castellum has had a tendency to own properties over the full cycle. I think we need to be a bit more smarter in owning the properties in the lifespan of a property where we are the best. That may vary over time, that may vary over markets, and that may vary over asset types. What properties suit us?

This means that we may very well own a property during one phase of the life cycle of a property in Stockholm, but choose not to own it in another market. That will trigger a higher asset rotation pace than we’ve had historically. That’s actually what I’m meaning with this. Also perhaps seizing a bit more opportunities than we’ve done historically when prices are right, either to sell or to buy. It’s not you should not read into that strategic that we are down because we are not there yet, downsizing office or increasing whatever. It’s just the fact that we cannot be it’s not perfect from a return perspective to own properties forever and ever. We need to we are not the perfect custodian of properties in all their phases everywhere.

Okay. It will be management’s acumen and understanding of the cycle and each individual market that will drive better returns after transaction costs, according to that.

Yes. Exactly.

Okay. Thank you. The second question is on CAPEX. You mentioned one of the things you’d like to do is, I mean, you said spend less on CAPEX, but then I think you sort of corrected yourself to smarter CAPEX.

Yeah.

Is your assessment that Castellum has been deploying CAPEX in the past in a way that doesn’t meet suitable return hurdles? Is that what you found, and you think you can change that in the future?

That’s a good question, and I appreciate that. I think perhaps that was true if we go back 5 or 10 years ago, when money was a bit more cheap and the target actually in Castellum was to invest at least 5% of the property value each year. There might be some merit to that going back a bit further. I don’t think that that has been the case for the past years, but I do think that there are potential to improve where we put in our money. In some cases, we should perhaps invest slightly more, and in some cases, we should perhaps not invest anything right now. I think, and I’m looking forward to having discussions with management where our capital makes the most, where we get the most bang for the buck. I’m sure that there are potential there for improvement.

I would be very surprised if it wasn’t because that’s probably the case everywhere in all real estate companies.

Right. Yes, of course. Okay, that’s very clear. Thank you.

Thank you.

Christoffer Strömbäck, Head of Investor Relations, Castellum: Thanks. Back to Fredrik Stensved, ABG.

Yes. Thank you. Apologies for jumping in twice. I just have a follow-up on the leasing strategy. Listening to this presentation and what you’re saying, Paul, it’s pretty obvious that you’re not happy about the leasing this year. You’re not happy about the lower occupancy in the past couple of years. I think at the same time, you’re saying asset quality or the portfolio quality is better than you were thinking, and the organization is better. They know the properties by heart and so on. Maybe in order to get a feeling about upcoming changes and strategy in terms of leasing, asset quality is better, organization quality is better, what’s your view on why Castellum has underperformed peers in terms of occupancy? Which are the concrete actions you believe are the most important in order to improve going forward?

Paul Alcén, CEO, Castellum: I’m not sure that we have been worse than peers. No idea if that’s the case or not. For a company, for a real estate company, the main mission is obviously to have as many square meters rented as possible. We have roughly 10% at least economic vacancy. That’s a huge, huge potential. I think that amounts to roughly SEK 1 billion in rental revenue. We must do everything we can to catch as much as possible of that potential rental revenue. We are discussing internally in what measures make sense here, and it’s different depending on what type of assets. I wouldn’t say that we have underperformed, but I’ve said that we have perhaps increased the discussions around how can we reduce vacancy faster than given the measurements we’ve done historically.

Okay. Thanks.

Christoffer Strömbäck, Head of Investor Relations, Castellum: Thank you.

Thank you. That was actually the last question for today. Thank you all for listening. Bye-bye.

Paul Alcén, CEO, Castellum: Bye-bye.

Bye.

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