Financial targets

In the financial targets of Fabege we are listing; return of equity, loan-to-value ratio, equity/assets ratio, interest coverage ratio, surplus ratio, return of projects and transaction profit.

Targets

Results 2016

Return on equity

 
Fabege aims to consistently be one of the most profitable listed property companies in terms of return on equity. The return on equity was 36 per cent, with contributions made by all parts of the business, i.e. Property Management, Property Development and Transactions. The return for 2012 includes a provision of SEK 1.9bn for ongoing tax cases.

Loan-to-value ratio

 
The loan-to-value ratio shall be no more than 55 per cent.
The loan-to-value ratio dropped to 46 per cent as a result of rising property values and value-generating investments.

Equity/assets ratio

 
The target is to maintain an equity/assets ratio of at least 35 per cent.
The equity/assets ratio increased to 46 per cent in 2016 as a result of the strengthening of the balance sheet through strong earnings from operations and rising property values.

Interest coverage ratio

 
The interest coverage ratio shall amount to at least 2.0.
The interest coverage ratio is well above the target of 2.0, an effect of strong net operating income combined with low market interest rates.

Surplus ratio

 
The aim is to increase the surplus ratio to 75 per cent by 2020.
The surplus ratio has improved steadily, owing to growing revenue, an increasingly modern portfolio and continued efforts to boost cost efficiency. The result for 2016 was consistent with the target of 72 per cent.

Return on projects

 
Fabege aims to annually invest at least SEK 1.5bn in the company’s own project portfolio. In the years immediately ahead, annual investments are estimated to amount to at least SEK 2bn. New projects are to generate a return on invested capital of at least 20 per cent through value growth. In 2016, investments in projects and development properties slightly exceeded SEK 2bn, generating a yield of 87 per cent. This mainly derived from value growth in major ongoing projects.

Transaction profit

 
Fabege aims to increase efficiency in the portfolio through sales. Transactions are to generate a return of at least 10 per cent in relation to the carrying amount. Five properties were divested in 2016 for a total purchase consideration of SEK 3.7bn. This generated a return of 13 per cent in relation to the carrying amount.