“The current market environment presents both challenges and opportunities for the commercial real estate sector. Through the proposed rights issue, Castellum will consolidate its position as one of the leading commercial real estate companies in the Nordic region with continued ability to capitalise on value-creation opportunities whilst continuing to be an attractive investment for shareholders as well as a solid counterparty to banks and debt investors”, says Joacim Sjöberg, acting CEO of Castellum.

The rights issue is fully underwritten through subscription undertakings and guarantee commitments.

Akelius Residential Property, the Company's largest shareholder, representing 12.8 per cent of the shares and votes in Castellum (excluding treasury shares), has undertaken to vote for the Board of Directors' proposal at the Annual General Meeting and to subscribe for its pro rata share (12.8 per cent) of the rights issue. In addition, Akelius Residential Property has entered into a guarantee undertaking to subscribe, subject to certain terms, for an additional 29.1 per cent of the rights issue without subscription rights.

Citigroup Global Markets Europe AG and Nordea Bank Abp, filial i Sverige have entered into a so-called standby underwriting agreement, subject to customary terms, for the remaining part of the rights issue, which commitment is envisaged to be replaced by an underwriting agreement upon launch of the rights issue. Hence, the rights issue is fully covered by subscription undertakings and guarantee commitments.

A detailed time plan and the terms and conditions for the rights issue will be announced at a later stage. However, it is expected that the rights issue will be carried out during the second quarter of 2023. The proposal for the Board of Directors' authorisation will be included in the notice to the Annual General Meeting, which will be published separately.

Castellum's year-end report:

• Income for the year totalled SEK 8,996 M (6,353), and income for the quarter amounted to SEK 2,264 M (1,916).

• Net lettings for the year totalled SEK 161 M (162), while net lettings for the quarter totalled SEK 8 M (45).

• Income from property management totalled SEK 4,510 M (3,522), corresponding to SEK 13.63 per share (12.45) and an increase of 9.5 per cent. Income from property management for the quarter totalled SEK 912 M (1,019), corresponding to SEK 2.78 per share (3.29).

• Changes in value on properties amounted to SEK -3,537 M corresponding to 2 per cent (SEK 7,185 M).

• For the fourth quarter, changes in value on properties amounted to SEK -6,394 M, corresponding to 4 per cent.

• Net income for the year amounted to SEK 1,750 M (11,828), corresponding to SEK 5.29 (41.81) per share.

• Long-term net reinstatement value (EPRA NRV) amounted to SEK 242 per share (251).

• After new construction, extensions and reconstructions totalling SEK 5,548 M (3,799) in existing portfolios, acquisitions of SEK 363 M (56,147) and divestments of SEK -3,080 M (-17,228), net investments for the year totalled SEK 2,831 M (42,718) for the year.

“The Nordic property market was heavily impacted in 2022 by high levels of inflation, rapidly rising interest rates, a cautious bond market, and an economic slowdown. At the same time, the rental market and demand for offices and warehouse/logistics properties were strong, and Castellum delivered increased net lettings for the twelfth consecutive quarter. The acquisition of Kungsleden led to an increase in earnings capacity and contributed 28 per cent growth in income from property management for 2022. The prospects for 2023, however, are divided, and we will face the challenges ahead with humility. Operationally speaking, Castellum’s properties and projects are moving along at a good pace while the finance market is marked by continued uncertainty,” says Joacim Sjöberg, acting CEO of Castellum.