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Swedish real estate group SBB has appointed Andreas Morfiadakis as its new chief executive officer, replacing Leiv Synnes with immediate effect. The leadership change comes as SBB moves forward with its transition from an integrated property company into an investment company focused on social infrastructure businesses. Morfiadakis brings experience in real estate, company building and capital markets, having founded and led residential property company KlaraBo. The appointment follows several years of restructuring at SBB after the Swedish property market downturn put pressure on the company’s finances and business model.
Swedish real estate group SBB has appointed Andreas Morfiadakis as its new CEO, replacing Leiv Synnes, who is stepping down from the position with immediate effect. Morfiadakis takes charge as the company enters a new phase following several years of restructuring and changes to its portfolio and corporate structure.
SBB said the leadership change comes as the company completes its transformation into an investment company focused on leading businesses in the social infrastructure segment. Chairman Lennart Sten said the company was looking for a CEO with experience in building companies, creating shareholder value and working closely with boards and management teams.
Morfiadakis brings extensive experience in the Swedish real estate sector. He founded residential property company KlaraBo in 2017 and has served as its CEO since its establishment. Before founding KlaraBo, he held senior positions in the real estate industry, including roles as CFO and deputy CEO of Victoria Park AB.
His appointment follows a major restructuring at SBB after the Swedish property market downturn earlier this decade. Rising inflation and interest rates put substantial pressure on property values and financing conditions, forcing SBB to restructure its operations and balance sheet. Synnes took over as CEO in 2023, succeeding Ilija Batljan, as the company began a strategic review aimed at addressing the challenges facing the business.
Under Synnes, SBB continued to reduce the size and complexity of its organisation. Following its transaction with Public Property Invest, completed late last year, the company reduced its workforce from 146 employees to 29. SBB said the smaller organisation would focus on SBB Development and central functions, while capital allocation and investment decisions became more important to its strategy.
The company has also been reshaping its property interests. SBB currently has exposure to three major social infrastructure businesses — Sveafastigheter, Public Property Invest and Nordiqus. The company has said these businesses provide exposure to social infrastructure assets across the Nordic region, while SBB focuses on ownership, capital allocation and long-term value creation.
Another major part of the restructuring has been the consolidation of residential assets under Sveafastigheter. SBB and KlaraBo agreed on a transaction involving SBB Residential Property and residential properties within SBB Development, with an underlying property value of about SEK 6.83 billion. The related merger between Sveafastigheter and KlaraBo is expected to increase Sveafastigheter's property value by 60% to around SEK 47 billion.
SBB's latest strategy also places greater emphasis on reducing debt, simplifying its structure and strengthening cash flows. In its latest interim update, the company said its senior bonds carried an average interest rate of 1.73%, while debt reduction would be supported by the performance of its core holdings and the sale of other assets.
The board said Synnes played an important role in stabilising and repositioning SBB during a difficult period. His tenure included efforts to strengthen the company's financial position and prepare it for its next phase. The board and Synnes jointly concluded that the leadership transition was appropriate as the company's restructuring moved further ahead.
Morfiadakis will now be responsible for guiding SBB as its focus shifts from restructuring and balance-sheet management towards active ownership of its core businesses. His background in developing KlaraBo is expected to be relevant to the company's approach as it seeks to strengthen its holdings and improve long-term shareholder value.
Source Reuters
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