Fabege's Leasing Momentum Builds as Vacancy Tightens and Development Pipeline Advances
Fabege AB (publ), the Stockholm-focused office and residential developer, reported a second quarter that was less about headline numbers and more about steady execution. While net letting was negative — “The net letting was SEK -86 million in the quarter” — 2026-07-06 — the company improved occupancy to 87% and saw property values edge up. CEO Bent Oustad and his team are methodically working through a portfolio that combines high-quality management properties with a deep development pipeline. The key theme of this report: leasing is slowly recovering, especially in prime locations, and the company is positioning itself for that recovery with disciplined capital allocation.
A Quarter of Mixed Leasing, but the Trend Lines Point Up
The negative net letting reflects two large, well-flagged terminations — Telenor and Max Matthiessen — but the granularity of new leases and renegotiations tells a more encouraging story. Solna Business Park was a standout: after a 12-month effort, the company filled nearly 7,000 sq m with two government tenants. Bent Oustad described the process:
That puzzle-solving approach — described as taking “more than one year” versus “two months in the old days” — is emblematic of the current market's slower, more deliberate leasing dynamics.Really, the governmental tenant has cooperated together and leased spaces in Solna Business Park.
Occupancy in the management portfolio rose from 86% to 87% (occupancy), and the surplus ratio reached 74% in the quarter. The CFO, Åsa Bergström, highlighted that rental income grew 5.9% year-over-year, supported by SEK +100 million from finalized projects. While renegotiations were slightly negative (-1.7%), management called this a blip driven by one or two “special” contracts, not a market-wide trend. The mix of new leases was broad across market areas, from hotels to offices, and the CEO noted a healthy pipeline: “We see a better leasing market in that area immediately” — 2026-07-06 — referring to Hagastaden after Ericsson's major commitment.
The Development Engine: Haga Norra and Beyond
The company's long-term value creation sits in its development portfolio. The residential arm, Birger Bostad, is progressing well: Haga Norra Block 5 is nearly complete (193 of 288 units delivered, 20% unsold), and this morning the company announced a construction contract for Block 4, adding 132 units. “We press released this morning that we have signed a construction contract for Block 4 in Haga Norra” — 2026-07-06 — a clear signal that demand for well-located residential remains intact. The project pipeline also includes the Wenner-Gren Center (pre-let 30%) and new opportunities like Tegelterrassen in Kungsholmen.
Beyond Haga Norra, the company is methodically activating its land bank. The acquisition of Gadden 1 in Sveaplan — a core area “at the entrance to Stockholm inner city” — adds 8,800 sq m of building rights, and the CEO emphasized the strategic importance of this location, especially after Ericsson's decision to anchor the neighborhood. Management is also pruning non-core assets: selling plots and signing LOIs on elderly care facilities to market area — a deliberate effort to “clean up the balance sheet.”
Financial Stability and a Focus on Core Assets
Financing remains a pillar of confidence. The average interest cost ticked up to 2.88% (from 2.82% at year-end), but the company has refinanced all 2026 bank loans and plans a new bond issue for the autumn. Åsa Bergström underscored the strength: “We have very good access to financing, both from the banks and the capital market.” — 2026-07-06 The interest coverage ratio stood at 2.6x for the half-year, and the debt ratio improved to under 13%, meeting internal targets. Net letting remains the key metric to watch — the company sees a lag between leasing and occupancy, and management is confident that recent wins will show up in occupancy over the next 6-12 months.
Overall, this was a quarter of quiet progress. The company is not shouting from the rooftops, but the underlying indicators — occupancy, surplus ratio, and a forward-looking project pipeline — suggest that Fabege is steadily positioning itself for the next upcycle. With a strong balance sheet and a clear focus on its core Stockholm assets, the story is one of patience and execution.