From management to project development
During 2010, Catena changed its strategy, which has led to a large sale of properties.
The CEO Peter Hallgren looks back on a successful year.
How successful has the business been in 2010?
– We have secured long leases and the occupancy rate has continued to be high, almost 98 per cent. During the year, we have also carried out a number of successful property sales.
Have the financial targets been met?
– After the extraordinary dividend in October, the equity/assets ratio was over 35 per cent, which exceeds our target of 25–35 per cent. The interest coverage ratio is 4.8, which is definitely the highest the company has ever had. Catena is a stable and secure company with a loan-to-value of approximately 50 per cent. Income from property management has improved, greatly assisted by low interest rates.
What investments have you made during the year?
– Almedal in Gothenburg is a good example. We are building a wholesale outlet of just over 2,000 square metres for Ahlsell AB, an investment of SEK 28 million. Moving-in is expected to take place in July 2011. Another example is Svågertorp in Malmö where we have started work converting ordinary repair shop space into attractive shop premises, wholly in line with our improvement strategy. This is an investment of approximately SEK 7 million kronor.
Catena sold properties in Norway and Denmark at the beginning of the year?
– I Norway, we had improved the properties to a relatively high extent, with investments of SEK 150 million. The recovery after the financial crisis was more rapid in Norway than in Sweden, which made it an advantageous time to sell. The location of the property on Jagtvej in Copenhagen became strategically important with the development of a new campus for Copenhagen University, which had a positive impact on the price level and made it a good time to sell. We can note that the sales were successful; we sold at considerably higher levels than the valuations.
You changed strategy during the autumn?
– The difficulty of finding high-quality properties in good locations at the right price led us instead to assess the conditions for selling. The Board came to the conclusion that the conditions were favourable. After the financial crisis, the car industry developed well, not least Bilia, our largest customer. This has increased the property value. In September therefore, we made a decision to investigate the possibility of divesting parts of our portfolio and focusing more clearly on the property at Haga Norra. The company therefore changed its -focus from management to project development.
The focus on Haga Norra was reinforced at the end of the year?
– In November, we decided to go further and sold all of the remaining portfolio. This process took place between December 2010 and January 2011.
You are resigning at the Annual General Meeting in 2011?
– I have been involved since the start in 1998. Catena has now been a listed company for five years and will now move into a new phase with more focus on project development of housing, offices and retail premises. It is a good time to hand over to someone else. However, I will remain as CEO until the end of April.
What are your most satisfied with during your period as CEO?
– Our strategic choices have been good and Catena has had a continuous improvement in income from property management and a healthy development of value. We have improved our properties in a good way and made divestments at the right time in the business cycle. There has been a favourable development for the shareholders, which is gratifying.