The Great Unwind: Castellum Sells SEK 24B and Buys Back Its Own Stock
A return-of-capital pivot meets a sluggish office market as Wihlborgs takes the Öresund portfolio
CAST.ST · Earnings Call · 2026-07-15
The seller's windfall
Castellum's Q2 2026 report is defined by a single word: divestment. In the space of a few weeks the Swedish developer sold its entire Öresund presence (ex-Copenhagen) to Wihlborgs for SEK 13.3B and two Stockholm buildings to Alecta for SEK 5B. Combined with the AP7 public-property sale signed in February (SEK 5.6B), signed transactions total SEK 24B — executed at "just below" prior-quarter fair value. But CFO Christoffer Strömbäck is careful to shift the frame: the point isn't price versus fair value, it's the return the price implies going forward.
The common denominator for both of those transaction were that we received a good price, we think that we will not be able to meet our return targets given the price we achieved in those two transactions.
This is the financial-logic version of a strategic pivot, and CEO Pål Ahlsén makes clear the sell side is far from finished. Asked what share of the remaining portfolio still fails return hurdles, he concedes the obvious:
We do absolutely have a big chunk of our portfolio where if we would receive the fair value, we would probably be better off selling them.
The Alecta transaction and the Wihlborgs transactions are the quarter's defining themes in Castellum's own keyword trajectory — company-unique, not sector boilerplate. Tellingly, "Sweden" was the single biggest momentum decliner, signaling the strategy is consolidating into fewer, higher-return markets rather than growing the footprint.
The buyback arithmetic
The other side of the reallocation is aggressive return of capital. H1 2026 saw SEK 4.6B of buybacks (39M shares at roughly SEK 117 each), and the board this morning authorized a fresh up-to-SEK 3B program funded by proceeds from the Alecta deal:
“The board decided upon a new share buyback program of up to SEK 3 billion, that equals 40% of the proceeds from the Alecta transaction. Actually, 60% of the proceeds from the Alecta transaction.” — Christoffer Strömbäck, CFO · 2026-07-15
The gap between price and asset value makes the choice almost mechanical. NAV runs about SEK 40 above the share price, and the CEO says there's "headroom still" before buybacks lose their appeal. That is a deliberate break from the prior regime — in February 2025, then-CEO Joacim Sjöberg was defending a dividend over repurchases: “It looks very cheap to repurchase shares at the moment… the Board just announced that it's proposing a rather substantial share dividend.” — Joacim Sjoberg, CEO · 2025-02-19 Pål Ahlsén had already telegraphed the shift on his very first call in October 2025: “I'm in favor of buying back shares, at least when we have such a huge discount as we have today.” — Pal Ahlsen, CEO · 2025-10-23
On the liability side, Castellum terminated its S&P rating ("one credit rating is sufficient"), refinanced SEK 2.3B of secured RCFs, issued SEK 3.9B of unsecured bonds at an average 99bp margin, and — at a cost — redeemed two cheap eurobonds, lifting the average interest rate to 3.5% and adding roughly SEK 200M of annual running financial net. Loan-to-value sits at 37.3% against a 40% policy, and ICR at 3.2x against a 3x floor. The December hybrid reset is the next decision point; the CFO says proceeds will go to "more traditional debt," with the first call date in December and reset in March.
The leasing grind
The urgency behind this recycling is visible in the operating numbers. Occupancy fell to 87.5% as increasing vacancy dragged like-for-like rents down 1.3% and NOI down 4.8% (a cold winter didn't help costs). Net leasing for the half came in positive at +SEK 110M — but only because Ericsson took the full Infinity building plus two more Hagastaden properties; strip out projects and it's still red. AFRY's termination, roughly SEK 95M of annual rent, hit the quarter directly.
“In Stockholm, they say that there's more activity… in other markets, in Gothenburg, it's still pretty weak, but it's not declining. Perhaps it has bottomed out.” — Pål Ahlsén, CEO · 2026-07-15
The net lease figure — positive for the first half despite the terminations, dominated by the Ericsson leasing over Infinity at around SEK 140M — is the quiet hero of the quarter. Yet the CEO refuses to extrapolate: "The aim can only be to work as hard as we can to get as many signed contracts as possible." Regional cities remain "sluggish."
What it means
Castellum is doing something genuinely unusual: using a surprisingly liquid transaction market to exit assets it no longer believes can hit a 10% ROE target, then handing the proceeds straight back to shareholders at a ~28% discount. First-half annualized ROE of 5.2% — far from the goal, as the CFO concedes — explains the urgency. Income from property management per share rose 7.3%, but much of that is buyback arithmetic rather than organic growth. Net asset value per share is up 4.6% since year-end, again roughly half profit and half repurchases. If the leasing market stays soft, more Wihlborgs-style exits at "good prices" may be the fastest credible route to the target — and the market's best hope is that management keeps finding buyers as deep-pocketed as that.