Swedish property company Atrium Ljungberg AB posted a first-quarter net profit of 202 million crowns, down from 453 million crowns in the same period a year earlier. The drop was driven largely by unrealised valuations and higher costs, a combination that prompted the company's shares to fall more than 5% on Friday.
Income from property management, the group's principal operating indicator, decreased to 316 million crowns from 328 million crowns in the comparable quarter of 2025. Earnings per share also slipped slightly to 0.50 crowns from 0.52 crowns year-on-year.
Net letting - defined as new contracted rents less terminated contracts - turned negative, registering a net outflow of 8 million crowns compared with a positive 23 million crowns a year earlier. New letting during the quarter totalled 33 million crowns while customer terminations amounted to 42 million crowns, with a large share of those lease exits occurring in Stockholm office properties.
The company recorded unrealised property value losses of 215 million crowns for the quarter, a marked reversal from a 179 million crown value gain in the prior-year period. Management attributed these valuation movements to higher yield requirements on two properties in Kista and one office building in Malmö, in addition to cash flow effects at two Slakthusområdet properties that are being readied for forthcoming projects.
Rental income increased 3.3% to 759 million crowns for the quarter. That rise was supported by income from completed project properties and additional coworking revenue following the February 2026 acquisition of the remaining 50% stake in coworking provider A house. On a comparable-portfolio basis, however, rental income declined by 1.5%, reflecting persistent vacancies from major office tenants that left in 2025 and have not yet been re-let. The net operating income margin narrowed to 69.3% from 70.6% year-on-year.
On the balance sheet, interest-bearing debt climbed to 26.87 billion crowns, and the loan-to-value (LTV) ratio rose to 43.7% from 41.8% a year earlier - approaching the company's self-imposed 45% ceiling. The interest coverage ratio remained at 3.1 times, above the policy minimum of 2.0 times.
The company issued green bonds totalling about 1.5 billion crowns in January and February, at margins of 80 and 110 basis points respectively, while repurchasing 450 million crowns of short-term bonds. Excluding underwriting fees, the average closing interest rate was 2.9%.
"The increased geopolitical uncertainty during the first quarter has contributed to greater uncertainty, making it difficult for companies and businesses to predict their need for premises," Chief Executive Annica Ånäs said.
Net asset value per share was reported at 53.90 crowns, while the stock traded around 29.70 crowns, implying a discount to NAV of approximately 45%.
Investments during the period amounted to 568 million crowns. The company currently has eight active projects under development, with a combined investment volume of 8.4 billion crowns.
Summary
Atrium Ljungberg's first-quarter results showed a significant decline in net profit to 202 million crowns, driven by negative unrealised valuation changes and rising costs. Rental income rose on a headline basis but fell on a comparable-portfolio basis as office vacancies persisted. The group's leverage inched closer to its self-imposed LTV cap while interest coverage remained above policy minimums. The market reacted with a share price drop of over 5% and a wide discount to reported NAV.
Key points
- Net profit fell to 202 million crowns from 453 million crowns a year earlier; shares declined more than 5%.
- Unrealised property valuation losses of 215 million crowns reversed a prior-year gain and were tied to yield changes and cash-flow effects at specific projects.
- Comparable rental income fell 1.5% as office vacancies from large tenants remain unfilled; headline rental income rose to 759 million crowns.
- Sectors impacted: commercial real estate, financial markets linked to property valuations, and credit markets due to higher leverage.
Risks and uncertainties
- Geopolitical uncertainty has increased market unpredictability, complicating tenant demand forecasting and lease commitments - impacting the commercial property sector.
- The company’s loan-to-value ratio is close to its 45% limit, which could constrain financing flexibility if valuations or debt levels move unfavourably - relevant to lenders and real estate investors.
- Persisting office vacancies from major tenants may continue to pressure comparable rental income and operating margins until re-letting occurs.