Year-end Report 2025
SBB’s loan-to-value ratio is decreasing, and the strategic transformation is reducing dependence on individual sources of capital. At the same time, we are seeing a tailwind in the market for residential and community properties.
Strategic review completed
I am proud to report that SBB has completed the strategic review that was decided upon by the Board in the summer of 2023. SBB now mainly consists of four specialized companies, three of which focus on owning and managing social infrastructure in the Nordic region and are financed with the help of investment grade ratings. The fourth company is SBB Utveckling, which develops building rights, carries out new construction, and runs major rental projects in existing properties. The goal is, to the highest degree, that SBB’s real estate exposure is managed efficiently in transparent and market-leading companies with strong financial positions.
Out of SBB’s real estate exposure, totaling SEK 76 billion, 75 percent is found in the companies Sveafastigheter, Nordiqus, and Public Property Invest, all of which have these characteristics.
Optimism in the market
The market for social infrastructure in the Nordic region showed clear signs of recovery in 2025 after a period of low activity and poorer financing conditions. Today, the financing market is very strong in terms of both volume and price, which SBB’s larger holdings have utilized. Property price trends tend to follow developments in the credit market with a certain lag, so there is reason to be optimistic.
Creation of Europe’s leading company in social infrastructure
The most important event in the fourth quarter was the sale of properties to Public Property Invest (PPI), which created Europe’s leading operator in social infrastructure with assets of SEK 50 billion. This was also the final step in the implementation of the strategic review. Following the transaction, SBB owns just over forty percent of PPI. In the long term, SBB will benefit from PPI becoming a more efficient company with lower administrative costs and better ability to obtain attractive financing. At the time of the transaction, we estimated the value of these future cost savings related to SBB’s share at SEK 3.8 billion. As planned, PPI has had its credit rating raised to BBB+ and secured long-term financing at more favorable levels in 2026. This gives PPI scope to raise its dividend to a level that will generate around SEK 360 million in cash flow per year for SBB. Many factors indicate that PPI will continue to perform well, which means that value will be created for SBB’s shareholders.
Sveafastigheter continues its work
In 2024, SBB’s residential properties were gathered under the Sveafastigheter brand, and the company was listed on the stock exchange in the autumn of the same year. A series of strategic improvements were implemented in 2024 and 2025, which the company will be able to capitalize on going forward.
The company received an investment grade rating in 2025 and is now established in the bond market, which will lead to lower risk and lower financial costs over time.
All property management is now carried out by the company’s own staff, and the property portfolio is concentrated in fewer locations, which will decrease costs and enhance the focus on increased revenues. Property operations are performing well, with a 7.4 percent increase in net operating income in the comparable portfolio in 2025.
“SBB has been working methodically to follow a strategic plan, a plan that we have now completed.”
Nordiqus – leader in education infrastructure
Nordiqus is performing well and made net investments of SEK 1.6 bn in new and existing properties in 2025. Nordiqus has therefore consolidated its position as a leader in educational infrastructure in Europe, with over 600 properties used for educational activities in the Nordics. I have a feeling that Nordiqus will continue to grow profitably in 2026.
Decrease in central costs
SBB has methodically implemented the strategic plan established to strengthen the company’s focus and financial stability. There will also be a gradual decrease in central costs and workforce levels as the Group streamlines and simplifies its organization. This shift is a natural part of our long-term strategy to create a more efficient and sustainable structure. As part of this process SBB’s property management and parts of its central administration will be transferred to PPI in early 2026. This change will bring operations closer to the core business and ensure that resources are used where they are most needed, while we continue our work to strengthen the Group’s operational efficiency.
SBB Utveckling
In 2025, SBB Development was created, which encompasses properties that require greater investment to realize the full potential of each property. Resources have been allocated to create a solid basis for focused and strategic work to convert potential into long-term value.
The plan is for all properties within SBB Development to be either sold or fully developed within a five-year period. Several projects will be completed as early as 2026, and the intention is to realize profits from the development activities on an ongoing basis.
Simple and efficient company structure
In conjunction with the transaction with PPI, SBB dissolved its joint ventures with Castlelake. SBB’s joint venture with Morgan Stanley is expected to be dissolved by no later than the first half of 2027. Either the jointly owned company will be sold, or the existing preference shares will be replaced with senior debt at an estimated total interest rate of four percent at most.
In addition to these major changes, SBB is gradually reducing the number of smaller joint ventures to create a simple and efficient corporate structure.
Diversified capital raising through major holdings
The strategic realignment of SBB reduces dependence on individual sources of capital and has increased scope for new financing in the major holdings. The pricing and availability of different sources of capital vary over time. Having the ability and knowledge to adapt financing as the market evolves is an advantage. Nordiqus has an average maturity of ten years in its infrastructure financing. Counterparties are mainly North American institutions. Sveafastigheter finances itself primarily through secured loans from Nordic banks. These loans are characterized by low refinancing risk and stable margins. Public Property Invest finances itself primarily through the European bond market, which currently offers investment grade companies favorable terms.
Access to equity has increased. Previously, only SBB had access to external share capital, but now Sveafastigheter, Public Property Invest, and Nordiqus also have access. It is a sign of strength that long-term, financially strong, and recognized skilled organizations such as Aker and Brookfield are partners with SBB in larger holdings.
Aker also became the largest shareholder of SBB in terms of capital in 2025 through a directed new issue.
Steady decline in indebtedness
The year 2025 began with the legal dispute concerning bond terms being resolved when the bond investor withdrew the case. A few weeks later, bonds worth SEK 3.6 billion were repaid, with the liquidity mainly originating from Sveafastigheter’s IPO. SBB ended the year with a gain of SEK 0.5 billion when bonds with a nominal value of SEK 4.7 billion were purchased for SEK 4.2 billion. These funds came from divestment of properties to Public Property Invest. The loan-to-value ratio fell from 61 percent to 50 percent in 2025, mainly due to amortization using funds from divestments. Currently, SBB has good relations with its bondholders, who are positive about the reduction in indebtedness and the structural improvements. Several major investors have expressed a willingness to increase or extend their bond investments in SBB, which is encouraging. In addition to the financing available in SBB’s jointly owned companies, SBB primarily has bonds outstanding. SBB’s bonds maturing between 2026 and 2029 have an average coupon of 1.78 percent. The repurchase of bonds will continue in 2026 to reduce indebtedness and improve the financial position. SBB has methodically implemented the strategic plan established to strengthen the company’s focus and financial stability. There will also be a gradual decrease in central costs and workforce levels as the Group streamlines and simplifies its organization. This shift is a natural part of our long-term strategy to create a more efficient and sustainable structure.
As part of this process, SBB’s property management and parts of its central administration will be transferred to PPI in early 2026. This change will bring operations closer to the core business and ensure that resources are used where they are most needed, while we continue our work to strengthen the Group’s operational efficiency.
SBB to appeal administrative fee
The Swedish Financial Supervisory Authority has imposed an administrative fee of SEK 80 million on SBB relating to property valuation and classification of company acquisitions in the 2021 annual report. Compliance with applicable laws and regulations is of utmost importance to SBB. Therefore, SBB routinely seeks the assistance of experts in interpreting difficult and complex accounting issues before transactions are carried out. Both property valuations and the classification of company acquisitions are reviewed by SBB’s auditors. In this case, additional second opinions have also been obtained from other leading accounting firms. With regard to property valuations, SBB engages authorized valuation firms for each quarterly financial statement. It is generally accepted that this is the best method for determining fair value. The classification of company acquisitions is an accounting issue where the different methods, in this and probably in most other cases, do not significantly change the market view of the company. In this case, SBB has followed standard practice and performed the necessary accounting tests. This is our conclusion and that of the experts we have engaged. SBB therefore does not share the Swedish Financial Supervisory Authority’s assessment and will appeal.
Looking ahead
It feels safe and absolutely right to own property in the Nordics. The Nordics are expected to continue to grow in terms of population and demonstrate positive economic development compared with other parts of Europe. SBB’s major holdings have significant potential to continue growing profitably, thereby enabling SBB’s property exposure to increase in 2026. SBB’s holdings are market leading and have a strong financial position. SBB will continue to simplify its corporate structure, cut costs, and reduce indebtedness by divesting non-prioritized assets. I can sense a tailwind for residential and community service properties. Healthy demand from tenants and a stronger investment market should lead to a good total return for SBB’s property exposure in 2026.
Leiv Synnes
CEO