Customer portfolio and business focus

Castellum has a comprehensive contract portfolio consisting of approximately 5,700 commercial contracts. The single largest lease accounts for 2% of the Group’s total rental income, while the corresponding figure for the single largest customer is 3%. This means that Castellum’s exposure to credit risk from a single customer is very low.

Castellum’s tenants are found in every industry, and the company is represented in many different segments. This means a healthy risk spread as regards geography, type of premises, contract size and tenor. The remaining average length of contract in Castellum is 4 years.

One of Castellum’s largest and growing customer groups is government agencies and departments, which provides a stable and secure income based on tenant type and their longer average lease tenors. The logistics segment also has a broad, strong customer portfolio with a healthy spread of longer and shorter leases. The breadth of Castellum’s property types ensures opportunities for growth in its existing property portfolio for its tenants, and enables strong rental growth.

Castellum’s exposure to the retail segment currently represents 7% of income value, but this segment includes grocery stores and car dealerships. The latter can be found in locations that are becoming more attractive from a logistics perspective as the need for “last mile” premises (i.e. the last stretch in the delivery chain) in our cities is growing.

Close to the tenants – a key to success

Local presence in 14 cities in Sweden as well as Helsinki and Copenhagen, provides Castellum with close tenant relationships and short decision-making processes. Castellum employees work close to the market, which means natural opportunities for keeping up to date on all its tenants’ current and future needs. Castellum can thus offer premises adapted to needs, optimal personal service and quick answers. As one of the largest property owners in its respective local markets, the company collaborates with municipalities and involves itself in local networks – corporate associations, for example – to be an active urban developer that can create attractive work environments for its tenants.

Green leases for increased sustainability

Leases are generally signed for three to five years with a nine-month notice period, and are paid quarterly, in advance. As a consequence of the pandemic, Castellum has introduced greater flexibility into its leases as regards, for example, tenor and options. The rental level can change when the lease in question is due for renegotiation.

Leases usually include a base rent – that is, the rent agreed upon when signing the contract – and an index clause that provides an annual adjustment of the rent corresponding to a certain percentage of the previous year’s inflation. A lease commonly contains an addendum for the tenant’s share of the property’s total heating, cooling and property tax costs.

In line with the company’s sustainability profile, both new and existing tenants are offered the opportunity to sign green leases. These are collaboration agreements aimed at reducing the total environmental impact of the premises. At present, Castellum has 143 green leases covering 336,000 square metres.

5,700

contracts

5,699MSEK

lease value

Castellum listens actively to all its tenants

Positive, long-term customer relationships are of crucial importance for creating growth. That is why Castellum regularly conducts customer surveys. A more comprehensive survey, the Customer Satisfaction Index (CSI), is conducted every year using outside expertise. In 2020, the annual CSI survey was replaced with quarterly pulse surveys (short questionnaires via SMS) to more quickly capture tenants’ various needs in the uncertain existence that the coronavirus pandemic brought with it early in the year. The pulse surveys were targeted toward tenants in the office, retail, warehouse and logistics segments and covered the majority of Castellum’s larger tenants in all regions. The pulse surveys showed continued consistent high marks: 74 out of 100, which is in line with the industry benchmark of 75 (75).

The survey shows tenants’ general perception of Castellum and also how attentive and flexible the company has been during a period of major concern in the business environment.

As in previous CSI surveys, Castellum received its highest marks in service-mindedness. The category includes parameters such as personal interaction, service and accessibility. Seven out of ten tenants who responded to the survey stated that they would be happy to continue their partnership with Castellum.

Lease maturity structure
Distributed by contract size

Commercial leases distributed by sector
Customer Satisfaction Index

1. The figure for 2020 is based on the quarterly pulse surveys that
were made during the first three quarters of the year.