Real estate companies have two main property related financial risks
Akelius mitigates the property risk by investing in
Real estate companies main debt related financial risks are
A low property risk mitigates debt related financial risk, because
Akelius has a policy to mitigate liquidity and re-financing risks
cash uses and cash sources 12 months forward, 2019-09-30, MEUR
Akelius prioritizes long-term loans to mitigate
The average debt maturity is 5.5 years.
Short-term loans amount to 10 percent of total loans.
debt maturities per year, 2019-09-30, MEUR
Akelius policy is to be able to withstand a
25 percent decrease in property values.
Such a decrease would increase loan-to-value from 40 to 54 percent.
Akelius' bond terms stipulate that no additional debt may be incurred or no net dividend may be paid if loan-to-value exceeds 60 percent.
loan-to-value, 2019-09-30, percent
current and with 25 percent lower property values
Akelius policy is to be able to withstand a five percentage point increase in interest rates.
Akelius secures interest rates for long periods.
This reduces the effect of sudden interest rate increases.
A five percentage point increase in interest rates on loans with variable interest rates will lower the interest coverage ratio to 1.9 commencing twelve months.
Akelius' bond terms stipulate that no additional debt may be incurred or no net dividend may be paid if the interest coverage ratio is below 1.5.
interest coverage ratio, 12 months forward, per 2019-09-30
The risk for not being able to pay interest is mitigated by liquidity and low leverage.
interest costs and liquidity, 2019-09-30, MEUR
To mitigate negative effect of change in capitalization rate,
property holdings are diversified across countries.
value change, percent, due to increased capitalization rate, percentage points, 2019-09-30