(Sept 24): Swedish landlord SBB will publicly offer up to 49% of the shares in its residential unit Sveafastigheter AB, the latest sign that the nation’s real estate funding crunch is beginning to thaw.

Following the listing on Nasdaq First North Premier Growth Market, SBB will remain a substantial shareholder in Sveafastigheter, according to a statement on Tuesday. The plans to list the unit — with a portfolio of 14,000 apartments worth about US$2.7 billion (RM11.35 billion) — confirmed an earlier report by Bloomberg News.

Samhallsbyggnadsbolaget i Norden AB — as the company is formally known — has been working on a plan to spin off the housing division for the past 12 months as part of a broader strategy to split the group into three along its community, education and residential portfolios. Chief executive officer Leiv Synnes was brought in to lead the real estate group after its share price went into freefall last year following a surge in borrowing costs and a spate of costly credit-rating downgrades.

That made the Stockholm-based group one of the most high profile casualties of a financing crunch in Sweden’s real estate sector, which was particularly sensitive to a jump in interest rates given the industry had financed much of its operations using floating-rate, short-term notes during the era of cheap money.

To boost its cash levels and help trim a 55.4 billion kronor (RM22.84 billion) debt pile the company has already sold a majority stake in its eduction unit, Nordiqus AB, to Canada’s Brookfield Asset Management Ltd. Deals have also been done with Castlelake LP and Morgan Stanley.

DNB Bank ASA and Skandinaviska Enskilda Banken AB are joint global coordinators and joint bookrunners on the housing unit’s IPO, which is planned for the fourth quarter of this year. Danske Bank A/S, Nordea Bank Abp and Swedbank AB are also joint bookrunners.

The spinoff of Sveafastigheter underscores the more receptive attitude to both bond and equity investors as interest rates begin to trend downward. That’s easing the pressure on the balance sheets of the country’s property firms.

So far this year, Swedish landlords have raised 15.7 billion kronor on the equity market in Sweden, including the IPO of Prisma Properties AB, according to data compiled by Bloomberg. It’s been a similarly positive development on the corporate bond market with a total of US$7.7 billion sold in all currencies in 2024, exceeding the US$3.9 billion that priced in the whole of 2023.

“We have an entirely new situation now,” Sveafastigheter CEO Erik Havermark said by phone. “Many macro factors have fundamentally changed compared to where we were two years ago.”

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