Real estate companies' two main financial risks related to properties are
Akelius mitigates the property risk by investing in
Real estate companies main financial risks related to debt are
A low property risk mitigates debt related financial risk, because
Akelius has a policy to mitigate liquidity and re-financing risks.
The policy stipulates that Akelius should have
cash uses and cash sources 12 months forward, 2022-09-30, MEUR
Akelius prioritizes long-term loans to mitigate
The average debt maturity is 4.3 years.
Short-term loans amount to 0.8 percent of total loans.
debt maturities per year, 2022-09-30, 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 13 to 29 percent.
Akelius' bond terms stipulate that the company cannot take on additional debt or pay any net dividends if the loan-to-value exceeds sixty percent.
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 increase the interest coverage ratio to 14.5 for the commencing twelve months.
Akelius' bond terms stipulate that the company cannot take on additional debt or pay any net dividends if the interest coverage ratio is below 1.5.
interest coverage ratio, 12 months forward, per 2022-09-30
The risk for not being able to pay interest is mitigated by high liquidity and low leverage.
interest costs and liquidity, 2022-09-30, MEUR
To mitigate negative effects of the change in capitalization rate,
property holdings are diversified across countries.
value change, percent, due to increased capitalization rate, percentage points, 2022-09-30