Heimstaden Triumphs in 2025 with Record Sales and Arbitration Victory

STOCKHOLM, SWEDEN – February 27, 2026 – Heimstaden AB has showcased a year of remarkable financial resilience and strategic execution, posting strong 2025 results that defied a complex European economic landscape. The residential real estate giant reported robust rental growth, significantly improved credit metrics, and successfully navigated a high-stakes legal dispute, solidifying its position as a market leader.

The company's performance provides a compelling case study in navigating market headwinds, underscored by a massive SEK 10.7 billion in property sales at a significant premium and a decisive win in an arbitration case initiated by institutional investor Alecta.

A Picture of Financial Health

Heimstaden's operational backbone proved exceptionally strong throughout 2025. The company achieved a like-for-like rental growth of 4.9%, a figure that outpaces the broader European Union's average rent increase, which hovered around 3.2% in early 2025 according to Eurostat data. This performance indicates sustained, high demand for its more than 156,000 homes across nine countries.

Coupled with this growth, the company maintained a near-perfect real economic occupancy rate of 98.5%, demonstrating its ability to keep its vast portfolio filled. This operational efficiency translated directly to the bottom line, with the Net Operating Income (NOI) margin climbing to an impressive 72.1% for the year, up from 70.3% in 2024.

Property values also saw a healthy appreciation of 2.9% year-on-year. This increase was not merely a reflection of a buoyant market—where EU house prices saw strong growth—but was also driven by Heimstaden's own value-accretive capital expenditures and the strong demand within the owner-occupier market where it strategically divested assets.

Strategic Divestments and Deleveraging

A cornerstone of Heimstaden's 2025 strategy was its highly successful privatization sales program. The company sold 2,466 residential units, generating SEK 10.7 billion in proceeds. Critically, these sales were executed at an average premium of 28.9% above their book value, a testament to the quality of the assets and the company's astute market timing.

This performance stands in sharp contrast to some market competitors, who reported disposals at or near book value during the same period. The substantial premium achieved by Heimstaden highlights a particularly effective asset realization strategy, turning portfolio assets into significant liquidity.

The cash infusion from these sales was instrumental in strengthening the company's balance sheet. Heimstaden reported a significant improvement in its key credit metrics, with its Net Loan-to-Value (LTV) ratio decreasing to 52.2% from 56.4% a year prior. Its Interest Coverage Ratio (ICR), a key measure of its ability to service debt, also strengthened to 2.0x. While these figures show a clear path of deleveraging, the company still maintains a higher leverage profile than some more conservatively financed peers, indicating that balance sheet management remains a key focus.

Navigating Legal and Financial Hurdles

Beyond strong financial performance, 2025 was a year in which Heimstaden demonstrated its capacity for navigating significant off-market challenges. The most notable of these was the successful resolution of arbitration proceedings initiated by Alecta, a major shareholder in its subsidiary, Heimstaden Bostad.

The dispute, which began in late 2024, centered on Alecta's allegation that Heimstaden's principal owner had breached a non-compete clause in the shareholders' agreement. In December 2025, an arbitral tribunal delivered a final, non-appealable award in favor of Heimstaden, confirming no such breach had occurred. The ruling decisively removed a cloud of legal and governance uncertainty that had been looming over the company, bolstering investor confidence and allowing management to move forward with a clear mandate.

Simultaneously, the company was highly active in the financing markets, securing its capital structure for the future. Its subsidiary, Heimstaden Bostad, executed an impressive SEK 44.9 billion in asset-backed financing and raised a further SEK 14.6 billion through capital market issuances. To further extend its debt maturity profile, the parent company, Heimstaden AB, also issued SEK 750 million in floating-rate notes and a total of EUR 830 million in fixed-rate notes.

Tapping into Green Capital

A significant portion of Heimstaden's financing strategy is now intrinsically linked to its environmental, social, and governance (ESG) goals. Of the seven capital market transactions undertaken by Heimstaden Bostad in 2025, six were designated as green issuances. This included multiple successful green bonds, such as a SEK 1.25 billion issue in June and a EUR 500 million issue in September.

These funds are raised under the company's Green and Sustainability-Linked Financing Framework, which has been validated by the independent ESG rating firm Sustainalytics. The proceeds are earmarked for financing or refinancing energy-efficient buildings and other green projects, aligning the company’s funding with its commitment to sustainability.

This strategic focus on green finance allows Heimstaden to tap into a deep and growing pool of capital from investors who prioritize ESG compliance. By embedding sustainability into its financial operations, the company not only contributes to environmental goals but also secures a competitive advantage in attracting investment.

This proactive capital management continued into the new year. After the balance sheet date, Heimstaden Bostad moved to replace an upcoming perpetual hybrid maturity by issuing a new EUR 500 million perpetual hybrid in January 2026, demonstrating its ongoing commitment to optimizing its financial structure and ensuring long-term stability.