2011 was a favourable year for Fabege!
Strong demand in the rental market and our focus on retaining customers contributed to high net lettings, resulting in an increased occupancy rate and rental growth, while also enabling us to create significant value through project development. During the year, we reduced the project risk by signing several major and important leases and by maintaining a fast pace in the development of the project portfolio. Positive net lettings and development of the property portfolio enabled us to create the foundation for strong income and value growth ahead. I am particularly pleased to see that our employees’ initiatives make a difference.
The year’s investments and property transactions allowed Fabege to continue to focus on its prioritised sub-markets, all of which experienced a positive trend in 2011. The favourable trend in Arenastaden was particularly gratifying. In 2012, Swedbank Arena will be completed and Vattenfall will relocate to the area.
The recently signed agreement concerning the establishment of the Mall of Scandinavia will more clearly define the neighbourhood and we anticipate increased interest in building office space in the area. For Fabege, this entails faster expansion of the area and higher value growth, thus creating the foundation for Arenastaden to be a competitive alternative to the inner city. The economic outlook deteriorated during the year and uncertainty regarding the trend moving forward is considerable. However, at the time of writing, I still perceive strong demand in the rental market. Stockholm’s growth and on-going discussions are paving the way for favourable net lettings also in 2012. We will experience strong growth in rental income and management profit in the coming two years. Fabege is well equipped with a Adding value Property development in properties with growth potential is a key element of Fabege’s business model, helping to add value. In addition to developing and improving acquired properties, Fabege already has a number of development and project properties in its portfolio, and seeks to develop its potential as market conditions permit. The volume of projects is adapted to market demand. New builds and more extensive development projects are always based on the principles defined in the EU GreenBuilding programme.
Close to the customer Property management is Fabege’s main business area. The properties are managed by an efficient in-house organisation, which is divided into separate property management areas. Each area has a large degree of individual responsibility to ensure a high degree of commitment and proximity to the customer. The company’s customer-facing property management activities are designed to support a high occupancy rate and encourage customers to remain with Fabege. Satisfied customers help to improve our net operating income.
Concentrating the portfolio Fabege aims to sell properties that are located outside its concentrated property management units or have limited prospects for further growth. Location, condition and vacancies are key factors determining the growth potential of a property. A fully let property with modern and efficient premises that is deemed to have limited potential for rent increases and capital growth could thus become a candidate for divestment.
Create growth Fabege aims to acquire properties that offer better growth opportunities than existing investment properties in its portfolio. As a significant player in a number of select sub-markets, Fabege has acquired in-depth experience and knowledge about the markets, plans for development, other players and individual properties. The company continuously monitors and analyses developments with a view to exploiting opportunities to develop its property portfolio.