STOCKHOLM-A 6% markdown in the property portfolio of Swedish listed firm Hufvudstaden, controlled by the Lundberg group, brought a 2009 net loss of SEK357 million (€36.2 million), its second annual deficit in a row but 20% narrower than 2008. Operating profit ticked 4.6% higher and the group CFO told PIE that prospects for a profit this year are good, with letting activity picking up now.

The group, which manages just over SEK18 billion (€1.82 billion) of office and retail property in central locations of Stockholm and Gothenburg, is to recommend an increase in the ordinary dividend to SEK2.10 per share from SEK1.90 last year. It reported an operating result before changes in value of SEK915 million (€92.7 million), mainly attributable to higher rents and lower maintenance costs. Though the portfolio depreciation, lower than the nearly 9% in 2008, pushed it into loss, the net result was also strongly supported by a sharp decrease in taxation – to just SEK121 million as against SEK576 million for 2008.

Hufvudstaden Head of Finance and board member Magnus Jacobson told PIE that the prospects for 2010 are quite positive: “There are two components for 2010: In yields, we believe they have increased through 2008 and 2009 and that we are at the top of the levels now. The other component is rents and there we think we are at or close to the bottom and there is not that much left for further decreases… We don’t see another loss for 2010. If you take away those value changes the most likely outcome is a return to profit this year.”

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