The Odin Fastighet C fund rose 3.43 percent in May, outperforming its benchmark index which gained 1.95 percent. Since the turn of the year, the fund has declined 4.30 percent, remains ahead of the index which has fallen 5.01 percent. This is according to a monthly report from the fund's manager, Nils Hast.

Among the month's corporate news, the announcement that Sveafastigheter and Klarabo are to merge was highlighted, with Sveafastigheter as the acquiring company. The new group will hold properties valued at SEK 47 billion, and synergies are estimated to reach at least SEK 120 million per year.

Furthermore, it was noted that Balder distributed its holding in Norion Bank to shareholders. For the fund, this resulted in the receipt of nearly 240,000 shares. As banking exposure falls outside the mandate, the position will be sold, though the manager views Balder becoming a more pure-play real estate company positively.

The bond market remained favorable for the sector. Wihlborgs raised SEK 500 million over two years at a margin of 0.75 percentage points. NP3 issued the same amount over three years at a credit margin of 2.0 percentage points, shortly after raising nearly SEK 400 million in preference shares.

Within the portfolio, the fund has completely exited Corem. The manager notes that while the company acted during the crisis years of 2022-2023 by selling properties to strengthen its position, these measures have also degraded the quality of the remaining portfolio. The news that Ericsson will eventually vacate Corem's premises in Kista is also deemed negative for both the company and the area.
Against this backdrop, the fund chose to reallocate capital to other opportunities deemed more attractive.

Looking ahead, the manager points out that quarterly reports did not significantly alter the outlook.

'An increasing number of companies trading at a discount to NAV are now starting to use share buybacks as a capital allocation tool. We view this as positive, as it shows that companies are increasingly exploiting available opportunities to create shareholder value', the management writes.

Structural deals, such as Sveafastigheter and KlaraBo, are also considered a positive element. The sector is still seen as offering stable and growing cash flows, but the Stockholm office market is identified as the primary risk, characterized by weaker demand, rising vacancies, and increased uncertainty regarding valuations.

At the end of the month, the fund's three largest holdings were Balder, Sagax, and Emilshus, with portfolio weights of 8.32, 8.08, and 7.27 percent, respectively.

Geographically, Sweden accounted for 92.87 percent of the fund's exposure, followed by Finland and Norway at 4.50 and 2.42 percent, respectively.

Odin Fastighet C, %May, 2026
Fund MTD, percentage change3.43
Index MTD, percentage change1.95
Fund YTD, percentage change-4.30
Index YTD, percentage change-5.01