Balder - Is it time for real estate stocks?

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Hey! I’m curious about your general thoughts on the real estate sector, but especially on a Swedish listed company called Balder. Briefly, my thoughts: The real estate sector has undergone a significant transformation in recent years. After several years of record-low interest rates, rising property values, and high leverage, conditions changed rapidly when central banks began raising interest rates in 2022 and 2023. But now, in 2024 and 2025, the market has started to stabilize somewhat. Inflation has fallen back, and is it a good time for real estate stocks?

Balder was founded in 2005 and has since grown into a significant Nordic real estate group. The company operates as a long-term owner with local roots in residential, commercial properties, and new production in larger towns. Since its listing on Nasdaq Stockholm in 2005, Balder has transitioned from a smaller player to owning nearly 2,000 properties with a property value of over SEK 220 billion. The company’s strategy has been to combine its own management, local presence, and growth through acquisitions and development.

The CEO of Balder is Erik Selin, who has been with the company since its early days and is also a significant owner and a person many investors in Sweden are familiar with. It’s worth noting that Selin, through his large ownership and influence, has a strong commitment, which can be both a strength and an aspect to monitor from an ownership perspective.

A brief summary of Balder’s Q3 report:

  • Rental income: SEK 10,269 million (compared to SEK 9,543 million the previous year)

  • Profit from property management: SEK 5,176 million (previous year SEK 4,838 million), corresponding to SEK 4.03 per share (compared to SEK 3.84) for the parent company’s shareholders.

  • Profit after tax attributable to the parent company’s shareholders: SEK 5,851 million (SEK -117 million the year before) corresponding to SEK 4.92 per share.

However, there’s still a bit to prove after the report. For example, the solidity was below the company’s own target (38.2% vs target 40%) and Net Debt/EBITDA was also slightly above the target (11.9x vs target maximum 11x), which indicates some leverage risk.

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And it’s a sensitive industry where the differences between companies are significant: players with high leverage or exposure to office properties in major cities have had a tougher time, while companies focusing on residential and community properties, like Balder, have fared better.

I’ve invested in the company this year as I think it’s an interesting position for the industry as a whole. Is there anyone here on the forum who has looked at Balder or any other competing company? :smiley:

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I have kept an eye on Balder, among other reasons because they also have holdings in Finland. However, I encounter the same issue here as with all other real estate investment companies, namely, that there isn’t enough transparency. I don’t doubt that Erik Selin is competent in his field, but it would require enormous work and expertise to gain sufficient clarity on the company’s real estate investments and their expected returns. Ultimately,

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Speaking of banks: Balder owns 44.1% of Norion Bank. The value of that ownership is currently about 6 billion SEK.

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Balder owns 57% of Satosta, and through this, Balder may gradually become increasingly known to Finns.

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Thank you very much for all the answers here!

I read a new real estate report from Handelsbanken in Sweden which was somewhat positive with the heading “Light at the end of the tunnel”.

“We see a glimmer of hope for both households and property owners. The construction industry is gradually strengthening, and the rapid rearmament of total defense is driving the construction of shelters, ports, and training facilities. However, the general housing shortage in the country has decreased, and population growth is slowing down, which limits the increase in residential construction,” says Christina Nyman, Chief Economist at Handelsbanken.”

For Balder specifically, this might not say much, but my focus was more on the real estate sector in general. Handelsbanken mentions that they expect housing prices to rise by about 6 percent in 2026.

This might not say much in the grand scheme of things, but I choose to see the positive in that the sector might have a slightly better period ahead.

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