Castellum's value-creation strategy

Investment in, and development and administration of commercial premises, as well as service offerings in a decentralised and customer-centric organisation. Castellum focuses on cash flow and operates with low financial risk – all to optimise the conditions for delivering on the company’s overall growth targets and to create shareholder value.

Property management

Through customer-centric management built on good business conduct, sustainability and innovation, we enable our tenants to reach their business goals.

Project development

Castellum will continually invest in existing portfolios and develop new portfolios, resulting in a quality shift to a more sustainable and stable portfolio, as well as increased earning power. In addition, Castellum will be an active player that promotes urban development and growth.

Transactions

Castellum continually develops its property portfolio in order to strengthen the company’s position as the leading player in Nordic growth cities.

Strategy – Customers

Castellum will offer existing and potential tenants premises, meeting spaces and services that are best suited for their objectives. Castellum will be recognised as an innovative player in selected product and customer segments, by making clear investments in project development, system support, technological development and sustainability that strengthens our business. Services, platforms and payment methods will be developed to meet our tenants’ needs and make it possible for them to find out about our services easily. Castellum promotes long-term, close customer relationships, local presence and service that exceeds customer expectations.

Castellum’s tenants come from all branches of the business community, as well as public sector authorities and civil service. The company is to have a highly diversified customer base with a good risk spread as regards geographies, premises type, scope of contract and lease terms.

Strategic tool

  • High customer satisfaction index (CSI).
  • 1st to 3rd largest property company in the respective cities.

Outcome 2020

  • 74 out of 100 on the CSI in the latest pulse measurement (autumn 2020)
  • Castellum is the largest, second largest or third largest property company in 15 of the 17 cities in Sweden where the company was established in 2020.

Strategy – Asset and development portfolio

Castellum will develop and manage an asset portfolio that supports targets set for growth in income from property management, thus creating shareholder value over time. Castellum’s portfolio shift is continuously toward greater quality and density through new construction, extensions and reconstructions, acquisitions and sales in the Nordic growth markets. The portfolio will constitute a property exposure alternative for Castellum’s shareholders. The portfolio turnover should be actively managed, with a net investment volume of approximately 5% per year.

Castellum will be a leading player in urban development, and the preferred choice of both municipalities and tenants when they are looking for a partner to develop new projects.

Strategic tool

  • At least 5% of the property value in net investments per year, equivalent to SEK 5 billion.

Outcome 2020

  • MSEK 4,267 in net investments, of which MSEK 2,646 pertained to acquisitions, MSEK 2,512 to new construction, extensions and reconstructions, and MSEK 891 to sales.

Strategy – Financing

Castellum must maintain a low level of financial risk; the chosen key ratios for risk are loan-to-value ratio and interest coverage ratio. Castellum’s financing strategy will support the business operations and manage the Group’s financial risks while working for an open and transparent climate. The strategy will be reflected in the financial policy in order to ensure risk management through close monitoring.

Castellum’s financial strategy can be summarised by five cornerstones: diversification, liquidity, strength, transparency and flexibility.

Castellum’s goal is for the company’s share over the long term to yield a competitive return in relation to risk, and to have a high level of liquidity.

Strategic tool

  • Loan-to-value ratio – not to permanently exceed 50%.
  • Interest coverage ratio – at least 200%.
  • Dividend – at least 50% of pre-tax income from property management in dividend pay-outs.

Outcome 2020

  • The loan-to-value ratio amounted to 44% as of 31 December 2020
  • The interest coverage ratio for 2020 was 530%

  • SEK 6.90 per share in proposed dividend for 2020, equivalent to a payout ratio of 56%

Strategy – Organisation and employees

Castellum is to be an attractive employer with committed, motivated employees and managers, all of whom work towards the same goal, thereby meeting high expectations. The company works actively to attract, recruit, develop and retain the right employees and managers. Castellum is building a goal-oriented organisation in which its employees constantly challenge themselves and their colleagues to strengthen both the organisation and individuals.

The organisation continually strives to become better, clearer and more open as regards expectations, and sees constructive monitoring as a natural part of management and employeeship.

Strategic tool

  • High satisfaction index, eNPS (employee Net Promoter Score).

Outcome 2020

  • 34 on the eNPS

Strategy – Sustainability

Castellum will be the most sustainable property company in Europe and a major player in the construction of a sustainable society. Sustainability should be integrated into business operations and yield tangible results. This work should characterise the entire business from ownership, property management and asset portfolio development to customer relationships, employees and financing.

Castellum’s sustainability agenda, “The sustainable city,” is divided into four areas of focus: The planet, Future-proofing, Well-being and Social responsibility. Complete reporting on the goals is compiled on Focus area: The planet.

Strategic tool

  • 15% energy savings per square metre by 2025, cf. 2015.
  • Net-zero carbon emissions and 100% non-fossil fuel energy by 2030.
  • 50% of the property portfolio in square metres will be environmentally certified in 2025.
  • Equality among all occupational categories by 2025.
  • 4% of all employees annually will be apprentices.

Outcome 2020

  • 15% (8) reduction cf. 2015 and 12% reduction (8) in the like-for-like portfolio; 85% (77) less carbon emissions in Scope 1 and 2 since 2007. 95% (96) renewable energy
  • 39% of the property portfolio in square metres is environmentally certified, and certification of a further 7% is in progress. Castellum owns the greatest number of environmentally certified buildings out of all the Swedish listed property companies.
  • For performance concerning equality and international background, read more on Focus area: Well-being.
  • In total, 47 young people had internships or holiday work at Castellum in 2020.