SBB and KlaraBo to combine residential property portfolios

SBB and KlaraBo have agreed to combine their residential property portfolios, strengthening SBB's core asset, Sveafastigheter.

Leiv Synnes

SBB is divesting SBB Residential Property, valued at SEK 5.86 bn (€517 mln), and residential properties within SBB Development, valued at SEK 973 mln (€86 mln), to KlaraBo. In exchange, SBB will receive 32,600,001 Class A shares and 74,997,402 Class B shares in KlaraBo.

Following this, Sveafastigheter and KlaraBo will merge, with Sveafastigheter as the surviving entity. This will consolidate all residential properties of the combined companies under Sveafastigheter, increasing its property value by 60% to SEK 47 bn (€4.15 bn).

The merger creates a larger property company with a wider geographic presence, which is expected to reduce operational risk, create a more resilient asset base, and improve risk-adjusted returns.

Sveafastigheter's financial metrics will improve, solidifying its position as the largest listed residential property company on Nasdaq Stockholm, more than doubling the property value of its closest competitor.

SBB's core holdings will increase by 10 percentage points to 81% of gross assets (adjusted for cash), focusing on market leaders like Sveafastigheter, Public Property Invest, and Nordiqus.

The combined SEK 47 bn (€4.15 bn) property portfolio will benefit from Sveafastigheter's investment-grade financing.

The larger portfolio is expected to generate SEK 120 mln (€10.6 mln) in annual savings.

The previous joint venture between SBB Residential Property and Morgan Stanley, which incurred a 13% annual cost, will be terminated.

Post-transaction, SBB's consolidated investment properties will increase by 47% to SEK 52.2 bn (€4.6 bn).

SBB CEO, Leiv Synnes, commented: “We continue SBB’s transformation towards a more transparent company with full focus on our three core holdings. As the largest owner in capital terms in KlaraBo, Sveafastigheter and SBB Residential, it is natural to try to create a joint company with better conditions for continued value creation – with more business opportunities, increased scale and improved access to financing. My assessment is that the joint company can achieve higher profitability and, as a market leader, generate better risk-adjusted returns than smaller industry peers.”

The proposed merger will be put to a vote at special general meetings for both Sveafastigheter and KlaraBo, expected around 26 June 2026. The deal also needs to clear standard competition approvals. If all goes smoothly, the transaction is anticipated to wrap up in September 2026.