REAL ESTATE: Heimstaden Bostad (BBB- neg / BBB- neg): 2Q24 Results

Stable results but funding is still a concern as is declining Interest Coverage. 

HEIBOS has EUR 1.25bn maturing in October. It managed to extend a EUR725m Secured Loan based on Dutch assets at the beginning of the month from 2026 to 2031 resulting in a net EUR 200m inflow. 

The company is focused on getting S&P and Fitch to change the outlook to Stable and is pursuing a disposal strategy to meet this goal. 

• Rental Growth 5.1% like-for-like exceeding Core CPI of 2.3%
• S&P ICR 1.6x (vs 2.1x FY23) is concerningly low. Guiding for 1.5-1.6x full year
• S&P LTV 58.2% vs 56.6% FY23. Guiding for 57-58% full year
• Secured Debt guidance 32-35%
• Real Economic Occupancy 98.3% remains stable and healthy. Guiding for >98% 
• Total sales SEK 2.8bn at a 29% premium to book value. 

YTD portfolio valuation increased by 1.1% vs a fall of -5.8% in 2023.  It is good to see stability here and the fundamental strength of the housing market combined with high occupancy bodes well for the disposal programme.