Four reasons to invest in Wihlborgs
1. Attractive region
Wihlborgs operates in a region with strong population growth, a young and well-educated demographic, a robust innovation structure, high sustainability ambitions, good transport links and shrinking distances to the continent through, for example, the Fehmarn Belt connection. These are the factors that make businesses flourish and attract global corporations to locate their regional headquarters here. Our involvement in everything from urban development to social issues, keeps us in close contact with tenants, local communities and regional players.
2. Concentrated property portfolio
Wihlborgs’ properties are located in selected sub-markets that provide growth and development potential. We create clusters of properties, industries and networks that enable tenants to relocate, grow and develop within our portfolio. We know the market and the region well and can quickly identify new needs and trends. Wihlborgs is the leading property company in Malmö, Lund and Helsingborg. Our customers include private and public sector players, and represent many different industries.
3. Long-term and sustainable property owners
Wihlborgs is a long-term owner and develops properties under its own auspices with its own knowledgeable staff, a high level of service and local suppliers. We invest in flexible premises with stringent requirements for quality and sustainability with respect to architecture and building materials, as well as low operating costs. We take the economy, people and the environment into account in all our decisions, and our goal is to halve emissions in the entire value chain by 2030. We strive to make a genuine difference through tangible efforts.
4. Stable growth and financing
Wihlborgs has had strong growth for many years and raised the dividend for 16 consecutive years. This was made possible by our focus on continuously improving our cash flow. Our strong operating profit relative to our lending creates good financial stability, which allows us to maintain an attractive portfolio of ongoing and planned projects, and to capture new business opportunities as they arise. By conducting good business, we also contribute to the development of the entire region.
Wihlborgs' financing
How has Wihlborgs financing strategy turned out the last few years?
At Wihlborgs, we have been striving to diversify our sources of capital and not to be dependent on one and the same source. We don’t want to take any extraordinary measures nor change our policy just because the operating environment changes. When for an example access to the bond market deteriorated and prices rose ever higher a few years ago, we stood strong with a high share of financing from Nordic banks and Danish mortgage institutions. We also were able to redeem maturing bonds with existing facilities.
What are the advantages of financing via Nordic banks and the Danish mortage-credit system?
We have chosen to have bilateral agreements with Nordic banks because their prices fluctuate less and there is more stable access to capital than in the bond market, and because it is an opportunity to build long-term relationships. The Danish mortgage market has also been a stable source of funding with small variations in the margins, and the loans come with the opportunity for very long maturities. The loans that we signed for in Denmark the last few years were at very attractive levels. If the conditions for our funding sources should change, we will naturally have to take a position on that.
How will the interest-rate environment develop going forward and how prepared is Wihlborgs?
Our basic philosophy is that we do not know better than anyone else what the interest rate will be tomorrow. However, we have had a policy in place for several years, which entails that we have fixed shares of our interest maturities during different time periods.
To achieve this, we use interest-rate derivative instruments. Our goal is to improve cost predictability and reduce cost volatility. At present, roughly half of the loan portfolio is exposed to changes in interest-rates, which we deem a reasonable level, given that our cash flow is strong enough that we can accept a certain amount of fluctuation.
What is Wihlborgs' perspective on changes in value and the loan-to-value ratio?
The loan-to-value ratio is largely impacted by changes in value, which in turn depend on a number of assumptions in the valuation models. Recent developments with inflation and interest rates are making it more difficult to make these assumptions. In our opinion, a more useful key metric to look at is debt in relation to EBITDA (operating profit). After all, the operating surplus is what can be used for interest payments. A variant of this key metric is the interest coverage ratio, which is high for Wihlborgs and indicates that we are resilient even in a significantly tougher interest-rate environment.
How does Wihlborgs view debt refinancing on the capital market?
The bond market works significantly better in 2024 than in recent years. We have therefore made bond issues again when the margins have come down to acceptable levels. That the bond market works is good for us and the industry.Wihlborgs has managed to develop for many years without needing to utilise alternative financing instruments such as hybrid bonds, D shares or preference shares, and without issuing ordinary shares. This makes our financing clean and transparent, and facilitates the analysis of our company’s value, which we believe is important!
We know the market well thanks to our geographical focus and our headquarters in the region. We manage the properties with our own staff who, with a high level of service and a strong customer focus, create long-term relationships with the tenants. Our involvement in everything from urban development to infrastructure, skills supply and inclusiveness helps us contribute to the ongoing development of the Öresund region.
Wihlborgs – a sustainable investment
An investment in Wihlborgs is also a sustainable investment. In every part of our operations, we work to minimise negative impact and contribute to positive development. Nobody says that sustainability is easy, but we want to be able to say that we are doing all that we can, now and for the future.
Our sustainability results are also noticed by several independent analysts and rating institutes that review us regularly, including GRESB, CDP, ISS and Sustainalytics. The European industry organization for the real estate industry, EPRA, also evaluates our annual sustainability reporting, which is included in the annual. report.
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