Catena AB Q1 2026, Summary

Catena AB Q1 2026: Strategic Expansion with Nordic Acquisition and Strong Financial Performance

Catena AB, the Scandinavian logistics property company, has reported its interim results for January–March 2026, showcasing solid growth amid an ambitious expansion into Finland and continued strength in its core markets. The company's strategic focus on sustainable logistics facilities serving metropolitan regions has positioned it well for future opportunities, even as global geopolitical uncertainties persist.

Financial Performance: Revenue and Profitability Gains

Catena delivered strong financial results for the first quarter of 2026:

• Rental income increased 9% year-on-year to SEK 701 million (SEK 644 million in Q1 2025)
• Net operating surplus rose 6% to SEK 567 million (SEK 536 million)
• Profit from property management grew 7% to SEK 424 million (SEK 398 million)
• Profit for the period increased to SEK 464 million (SEK 426 million)
• Earnings per share from property management reached SEK 6.53 (SEK 6.60)
• EPRA NRV (long-term net asset value) per share climbed to SEK 454.28 (SEK 429.48)

The surplus ratio stood at 80.9%, slightly down from 83.3% in the prior year, primarily due to a larger portion of planned maintenance being executed in the first quarter. The company's rental income per square meter increased to SEK 896 (SEK 875), reflecting both portfolio quality improvements and market dynamics.

Transformative Nordic Portfolio Acquisition

The most significant development during the quarter was Catena's agreement to acquire a portfolio of 20 logistics properties from Urban Partners. This transaction, completed on 1 April 2026, represents a strategic milestone for the company:

• Total lettable area: 612,000 m²
• Geographic footprint: Sweden, Denmark, and Finland
• Finnish market entry: 153,000 m² of space
• Portfolio characterization: High-quality properties with reputable tenants

CEO Jörgen Eriksson described this acquisition as "a unique opportunity" that represents "an optimal development of our property portfolio." The Finnish market entry is particularly noteworthy, as it expands Catena's geographic reach beyond its traditional Swedish and Danish strongholds and opens opportunities for further growth in a market the company views as highly attractive.

Fitch Ratings confirmed Catena's BBB credit rating with stable prospects following the announcement, underscoring the financial soundness of the transaction and the company's overall financial position.

Strengthened Capital Position Through Share Issue

To support its expansion strategy, Catena executed a directed share issue on 20 January 2026, raising SEK 2.8 billion. The issue involved 6,036,010 new shares at a subscription price of SEK 456.00 per share, representing a 3.8% discount to the closing price on that date.

The share issue increased the total number of shares to 66,396,114, resulting in dilution of approximately 9.09%. Notably, the company's two largest shareholders, Backahill and WDP NV/SA, participated in the issue and continue to hold 18.6% and 10.0% of shares respectively, demonstrating strong shareholder support for the company's strategic direction.

Property Portfolio: Quality and Scale

As of 31 March 2026, Catena's property portfolio comprised:

• 138 properties with a total value of SEK 45,226 million
• 3,247,000 m² of lettable space
• Economic occupancy rate of 95.1% (down from 96.7% at year-end 2025)
• Weighted average lease expiry (WALE) of 6.3 years
• 78% of properties environmentally certified

The slight decrease in occupancy rate was primarily attributable to the acquisition of a new-build project in Denmark (Idunsvej 2, which is vacant) and a completed building at Logistics Position Ramlösa with 50% vacancy. These properties offer near-term leasing opportunities to further enhance portfolio performance.

Catena's portfolio is geographically distributed with Sweden representing 82% of property value and Denmark 18%. By rental value, Sweden accounts for 83% and Denmark 17%, with Finland expected to contribute following the Urban Partners acquisition completion.

Tenant Diversification and Lease Structure

Catena's tenant base has expanded to 279 customers (up from 261) with 496 leases (461). The top ten tenants account for 55% of rental income, with the three largest being:

1. DSV (18% of contracted rent) - Catena's largest tenant following the 2024 acquisition of major logistics facilities
2. DHL (8% of contracted rent) - Partly state-owned with stable operations
3. ICA (6% of contracted rent) - Leading Nordic retail company

The company's lease structure provides stability, with 52% of contracted annual rent extending beyond 2032. Most Swedish leases include full CPI indexation clauses, while Danish leases typically contain floor-ceiling clauses linked to CPI, providing inflation protection while managing tenant cost concerns.

Tenant diversification by sector shows a healthy mix: logistics and transport (49%), durable goods (18%), non-durable goods (17%), and various other sectors including healthcare, construction, and public sector tenants.

Sustainability Leadership: Reduced Carbon Footprint

Catena continues to demonstrate industry leadership in sustainability, with significant progress toward its ambitious climate goals:

• Greenhouse gas emissions (Scope 1–3, R12) declined dramatically to 19,426 tonnes CO₂e from 41,264 tonnes CO₂e
• Environmental certification now covers 78.5% of lettable area (up from 73.1%)
• Installed photovoltaic capacity reached 75,911 kWp
• Renewable energy generated totaled 43,203 MWh on a rolling 12-month basis
• Fossil-free energy comprised 99% of Scope 1–2 consumption

The substantial reduction in Scope 3 emissions was primarily due to a decreased pace of new construction during the period. The company is actively working toward its target of net-zero greenhouse gas emissions by 2040 and a net-positive biodiversity portfolio by 2030.

Catena's green financing framework aligns with EU directives, and as of the reporting date, 79.9% of the loan portfolio was classified as green financing, well above the company's >50% target.

Notable sustainability initiatives during the quarter included completion of a biodiversity project at Vångagärdet 20 in Helsingborg and groundwork optimization at Stockholm Syd that reduced climate impact by more than 80% through the transition to HVO100 fuel instead of traditional diesel.

Development Pipeline: Significant Growth Potential

Catena's land bank represents a substantial competitive advantage and future growth opportunity:

• Total potential land bank: Approximately 4.5 million m²
• Estimated lettable area potential: 1.6 million m²
• Estimated investment volume: SEK 16.3 billion
• Zoned area: 40% of land bank
• Zoning in progress: 52%

The company's major ongoing project is Vipparmen 1 in Helsingborg for ICA Fastigheter, comprising 34,800 m² with an estimated investment of SEK 675 million and projected completion in Q4 2026. This project is 100% leased, demonstrating Catena's strategy of securing tenants before commencing construction to minimize risk.

Potential projects with immediately available ready-to-build land include Stockholm Syd (450,000 m²), Logistics Position Sunnanå in Burlöv (120,000 m²), and several other strategically located sites across Sweden.

Financial Position: Strong Balance Sheet and Manageable Leverage

Catena maintains a robust financial position that provides flexibility for continued growth:

• Loan-to-value ratio: 33.6% (well below the <50% target)
• Equity ratio: 54.5% (above the >40% target)
• Interest coverage ratio: 4.1x (above the >2.0x target)
• Net debt/EBITDA (R12): 7.1x (below the <9x target)
• Average interest rate: 3.3%
• Interest maturity: 2.3 years
• Debt maturity: 4.3 years
• Cash and unutilized credit: SEK 5,324 million

The company's financing sources are well diversified: bank loans (40%), Danish mortgage bonds (21%), unsecured bonds/MTN (23%), secured bonds/SFF (11%), and commercial papers (5%). Green financing represents 79.9% of the total loan portfolio, reflecting the company's commitment to sustainable finance.

Catena published a supplemental prospectus to its MTN programme during the quarter in connection with the Urban Partners acquisition, ensuring adequate capital market access for its expansion plans.

Market Outlook: Navigating Uncertainty with Strength

The logistics property market continues to be supported by long-term megatrends including e-commerce growth and supply chain complexity. However, near-term dynamics present both challenges and opportunities:

In Sweden, the transaction volume for warehouse and logistics reached SEK 12.2 billion in Q1 2026. Prime logistics yields were unchanged during the quarter after declining in 2025, indicating continued strong investor interest in the sector. Similar trends were observed in the Copenhagen region.

The market is experiencing higher vacancy rates in some locations due to previous speculative construction, which has created differentiation among market participants. CEO Eriksson noted that "in this context, Catena stands out as a well-positioned, dominant actor in sustainable, future-oriented logistics development."

The macroeconomic environment became more uncertain toward the end of the quarter due to geopolitical developments, particularly the conflict in Iran, which contributed to rising energy prices and increased interest rate volatility. Despite these headwinds, Catena's strong financial position and low leverage provide significant room for maneuver.

Strategic Priorities and Management Changes

During the quarter, Catena announced changes to its management team. Amanda Thynell, Head of Sustainability, departed, and Johan Jaxell assumed the role of Head of Technology and Sustainability, consolidating these functions within the management team.

Looking ahead, CEO Eriksson emphasized the importance of the company's collaborative culture: "Our ability to work together to drive development is crucial for our success and one of Catena's biggest competitive advantages."

The company is also exploring innovative energy solutions, including a partnership at properties in Morgongåva with local operators and universities to investigate opportunities for harnessing surplus energy from solar panels and converting electricity to heating for direct societal use.

Post-Period Events and Portfolio Optimization

Following the end of Q1 2026, Catena completed the acquisition of the Urban Partners portfolio on 1 April 2026, immediately adding substantial scale and geographic diversification to the company's operations.

Additionally, Catena signed an agreement to sell ten Swedish properties for a purchase price of SEK 614 million. This divestment represents ongoing portfolio optimization, allowing the company to recycle capital from non-core assets into higher-growth opportunities aligned with its strategic objectives.

Outlook and Investment Considerations

Catena's current earnings capacity, incorporating the completed Urban Partners acquisition and planned divestments, shows annual profit from property management potential of SEK 1,889 million, or SEK 28.45 per share. This represents a significant increase from the SEK 24.69 per share capacity at year-end 2025.

The company's long-term financial targets remain in place:

• Generate average annual compounded growth of at least 12% per share in net asset value (NRV) over a five-year period
• Achieve at least 10% annual compounded growth rate per share in profit from property management over a five-year period
• Pay dividends of at least 50% of profit from property management less standard rate tax

With a share price of SEK 439.20 as of 31 March 2026 (down 2.6% from year-end 2025), the stock trades at a modest premium to book value but below the long-term net asset value per share of SEK 454.28, potentially offering value for long-term investors who believe in the company's growth trajectory and market position.

Conclusion

Catena AB's first quarter 2026 results demonstrate a company executing on its strategic vision while maintaining financial discipline. The transformative Nordic portfolio acquisition positions Catena for accelerated growth across an expanded geographic footprint, while the company's strong balance sheet, high-quality tenant base, and substantial development pipeline provide multiple avenues for value creation.

Despite near-term macroeconomic and geopolitical uncertainties, Catena's focus on essential logistics infrastructure serving major metropolitan areas, combined with industry-leading sustainability practices, positions the company well for long-term success. As supply chain resilience and e-commerce continue to drive demand for modern logistics facilities, Catena's strategic assets and development capabilities should enable it to capitalize on these secular trends while delivering stable cash flows and growth for shareholders.