Hemsö Fastighets AB

This report does not constitute a rating action. Overview Key strengths Key risks A reasonably large property portfolio worth Swedish krona (SEK) 86.9 billion as of Sept. 30, 2025, comprising stable community service properties such as nursing homes (37% of gross asset value [GAV]), educational facilities (37%), health care facilities (14%), and the justice system (12%). Relatively high leverage compared to rated European peers, with debt to debt plus equity of 63.4% as of Sept. 30, 2025, and debt to EBITDA of 14.3x. Positive underlying demographic trends such as the expanding and aging population, supporting high occupancy rates of 97%-98% and a long average lease duration of nine years, providing cash-flow stability and predictability. High geographical concentration, with 65% of

...Hems÷'s development pipeline should support growth in cash-flow generation over the coming 24 months, offsetting potential moderate indexation. We forecast Hems÷'s EBITDA will grow gradually to SEK3.7 billion-SEK4.1 billion over 2025-2027, from SEK3.7 billion last year, mostly on the company's ongoing development projects. These include new developments and investments in existing properties, particularly in new schools and nursing homes. These projects will likely contribute around SEK350 million to EBITDA over 2025-2027, compensating for potentially limited growth in rental income over the coming 24 months. In the first nine months of 2025, Hems÷'s rental income declined by SEK1 million on a like-for-like basis because of negative currency effects. Most lease agreements are linked to inflation, which has eased considerably in the past couple of years, and we therefore forecast revenue growth will be muted over the coming 24 months, compared to 5% on a like-for-like basis for full-year...

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