STOCKHOLM, Sept 7 (Reuters) – Alecta, Sweden’s largest pension fund provider, said on Thursday Swedish property firm Heimstaden Bostad is in need of more cash, and that it may participate in any refinancing round.
Large debts, rapidly rising interest rates and a wilting economy has produced a toxic cocktail for Sweden’s property groups with several companies, mainly in the commercial property sector, cut to “junk” status by rating agencies.
House prices are also down by around one-fifth since their March 2022 peak, according to the Organisation for Economic Cooperation and Development (OECD), reflecting soaring mortgage costs.
Heimstaden Bostad, an owner of residential properties across Europe with Sweden its main market, on Monday told Swedish business daily Dagens Industri it expects to both sell assets and raise capital to reduce debt.
“Alecta shares the assessment that Heimstaden Bostad is in need of additional capital,” Alecta CEO Peder Hasslev said.
“We are prepared to participate constructively and contribute to a refinancing, but of course it is entirely dependent on the conditions,” he said in an email.
Heimstaden did not immediately reply to a request for comment.
Heimstaden Bostad’s property portfolio totals 340 billion Swedish crowns ($30.60 billion) and its main owners are Heimstaden (HEIMpref.ST) and Alecta with 38% of shares each, according to its website.
($1 = 11.1124 Swedish crowns)
Reporting by Marie Mannes, editing by Anna Ringstrom and Terje Solsvik
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