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Swedish real estate company Wallenstam reported higher profit for the first half of the year, supported by gains in the value of its investment properties despite flat rental income. The company maintained a strong occupancy rate of 97% and achieved a 91% commercial lease renewal rate, reflecting stable tenant demand. Wallenstam also increased investments in new construction and reconstruction projects while maintaining a strong financial position. The company said it expects continued progress across its property portfolio and development projects during the remainder of the year.
Swedish real estate company Wallenstam AB reported an increase in its first-half profit after tax, supported by positive changes in the value of its investment properties, even as rental income remained largely unchanged compared with the same period last year.
The company posted rental income of SEK 1.56 billion during the first half of the year. Profit after tax stood at SEK 652 million, while pre-tax profit reached SEK 781 million. Income from property management came in at SEK 631 million, and the net asset value per share was reported at SEK 63.10.
The improved earnings were mainly driven by higher valuations of Wallenstam's investment properties. Property value gains continued to support profitability at a time when rental income remained stable, reflecting the company's consistent operational performance.
Occupancy levels remained strong at 97%, while the commercial lease renewal rate stood at 91%. Chief Executive Officer Hans Wallenstam said the company's stable financial performance was supported by high occupancy and strong tenant retention, indicating continued demand across its portfolio.
Wallenstam also increased investment in its development pipeline during the reporting period. Spending on new construction and reconstruction projects rose to SEK 1.388 billion, compared with SEK 1.052 billion in the corresponding period last year. The higher investment reflects the company's continued focus on expanding and upgrading its residential and commercial property portfolio.
The company said its financial position remained strong and that its key performance indicators continued to be stable. It also expects further progress across its ongoing property developments and projects during the rest of the year, supported by its active investment strategy.
From a market perspective, analysts continue to maintain a cautious view on the stock. The average analyst recommendation currently stands at "hold," with one analyst recommending a buy, three suggesting hold, and three recommending sell or strong sell. In comparison, the broader real estate rental, development and operations sector continues to carry an average consensus recommendation of buy.
The median 12-month analyst price target for Wallenstam shares is SEK 42.00, representing an upside of around 4.5% from the previous week's closing price of SEK 40.18. The stock is currently trading at approximately 21 times its expected earnings over the next 12 months, unchanged from its valuation three months earlier.
Source Reuters
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