Switched Castellum with Sagax

Switch from lower risk Castellum AB to more opportunistic AB Sagax

Castellum AB may be a safer real estate play, but AB Sagax has far superior returns on equity, higher yield spread and a tilt towards warehouses which I find more interesting going forward with increasing E-commerce and possible less demand for office rental.

Today I sold all holdings in Castellum (177.6 SEK per share) and initiated a position in Sagax (109,2 SEK per share).


AB Sagax is a property company whose business concept is to invest in commercial properties, primarily in the warehouse and light industry segment. Sagax has exposure to industrial/mixed-use properties in Sweden, Finland, Paris and the Netherlands as well as Spain, Germany and Denmark.

Current yield spread of 4.5%, average Return on Equity the past 10 years has been ~20 % and a revenue CAGR ~ 13%. The company has an impressive track record with highest return on capital in the industry.

In Q1 2020:

  • Rental revenue increased 13% to SEK 703 M (622 for the preceding year)
  • Profit from property management increased 22% to SEK 565 M (464)
  • Profit after tax for the period amounted to SEK 749 M (854)
  • Cash flow from operating activities before changes in working capital rose 29% to SEK 416 M (323)

Authors own calculations (data from Borsdata.se)


Investment in, and development and administration of commercial premises, as well as service offerings in a decentralized and customer-centric organization. Current yield spread 3.1%, average Return on Equity the past 10 years has been 13.5 % and a revenue CAGR ~ 7 %.

The company has increased its dividends every year since its IPO in 1997 and will most likely keep on increasing its dividends, though not at the same pace as previous years.

Authors own calculations (data from Borsdata.se)

Some background info: Mapping the Swedish real estate universe (Pareto)

Core: Those companies with a low-risk/low-potential return strategy with low leverage and stable cash flows. Companies using this strategy focus on fully leased prime real estate in growing and varied urban areas.

Core+: The strategy Core+ originates from Core but includes leverage. In
general, Core+ is mistaken for value-added property allocation strategies.

Value-add: A medium/high-risk and medium/high-return strategy. Broadly
associated with the repositioning of properties and acquisitions of building
rights, for example not fully leased and/or those that require physical
enhancement. Value-added strategies are typically leveraged between 40%
and 60%.

Opportunistic: This is a high-risk/high-return strategy and the properties will require a great degree of enhancement. The strategy can additionally include investments in raw land, property development and niche sectors.
Opportunistic strategies may operate with leverage levels of 50% or more.

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A Norway-based investor with a background from finance and accounting. I'll use this site to share and to document my journey of becoming a full-time private investor.

6 thoughts on “Switched Castellum with Sagax”

    1. Som du kan lese av siste månedsrapporter så er det noen endringer i min investereringsstrategi. Dette kommer det ett lengre innlegg om i løpet av kort tid, men fokuset fremover vil bevege seg fra DGI og over mot selskaper av høyere kvalitet. Jeg ønsker eksponering mot eiendom i min portefølje og da forsvinner CAST ut og SAGAX inn.


  1. Ja, såklart. Vad jag egentligen menar är att jag inte håller med. Du gör givetvis som du vill, önskar dig all lycka med investeringarna!


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