Catella strengthens market position amidst stabilization in 2024, eyes growth in 2025

Catella has reinforced its standing as a leading pan-European real estate investment company, successfully navigating a challenging market in 2024 despite ongoing weakness in the real estate sector. The company reported stable assets under management (AUM), strong liquidity, and a solid operating profit, even as variable income saw a significant decline. With a strong balance sheet and a recovering transaction market, Catella remains well-positioned to capitalize on emerging opportunities in 2025.

The fourth quarter marked a turning point, benefiting from an improving market environment and operational efficiency measures. Total income for the quarter reached SEK 1,045 million, significantly higher than the previous year, and operating profit increased to SEK 69 million. For the full year, total income stood at SEK 2,307 million, while AUM climbed to SEK 155 billion, an increase of SEK 3 billion year-over-year. The company also maintained a proposed dividend of SEK 0.90 per share for the financial year.

CEO Knut Pedersen emphasized that the European real estate market showed cautious signs of recovery, with transaction volumes rising 22% year-over-year in Q4. As interest rates declined and financing conditions improved, the market started to price in a lower cost of capital, suggesting that the downward trend in property values may have reached its lowest point. With buyer and seller expectations aligning, real estate acquisitions are becoming more attractive as part of diversified investment portfolios.

Investment Management: Resilience and Growth

Catella’s Investment Management division successfully balanced capital flows in 2024, maintaining positive AUM growth despite market uncertainty. Residential property funds were the strongest-performing segment, with increased transaction activity. A key highlight was the Article 9 Catella European Residential III Fund, which completed its first acquisition in Spain—a newly constructed 235-unit residential complex in Madrid, adding nearly SEK 700 million to its portfolio and bringing total fund assets to SEK 9 billion.

Following the year-end, Catella merged its two fund management companies, Catella Residential Investment Management (CRIM) and Catella Real Estate AG (CREAG), to form Catella Investment Management GmbH (CIM). This strategic move is designed to increase operational efficiency and expand fund management capacity, consolidating SEK 115 billion in assets across 25 funds and 420 properties in 15 European countries under a unified structure.

Further investment activity included SEK 6 billion in Catella Logistic Deutschland Plus, alongside the launch of Catella APAM Strategic Equities in the UK, backed by SEK 1.4 billion from an institutional investor. Meanwhile, Catella Aquila, which acquired a majority stake in 2023, took over the management of Catella’s French fund assets, previously handled externally.

Principal Investments: Focused Value Creation

Catella’s Principal Investments segment continued its focus on developing and divesting strategic projects. A major milestone in Q4 was the sale of the Polaxis development project in France, freeing up capital and strengthening liquidity for new investments.

The company is also preparing for the potential sale of Kaktus Towers in central Copenhagen, a landmark project with a high capital value. While no immediate rush is anticipated, Catella is prioritizing securing an attractive deal given the asset’s significance. Looking ahead, the firm plans to diversify its investment strategy, leveraging capital for seed investments in new funds, co-investments with external partners, and development projects with majority-owning capital investors.

Corporate Finance: Market Recovery Driving Growth

The Corporate Finance division saw an uptick in transaction activity, advising on a growing number of deals in Q4. Market sentiment improved as transaction volumes increased, and Catella took the opportunity to strengthen its organization and optimize operations during the slowdown. With market conditions gradually improving, the company is well-positioned to capitalize on renewed investor confidence and higher deal flow in 2025.

Outlook for 2025 and Beyond

Catella has refined its long-term strategy, focusing on three key priorities:
1. Diversifying and sharpening investment strategies in Principal Investments to grow AUM and establish long-term revenue streams. By shifting capital toward new funds and strategic development projects, the company aims to enhance stability and shareholder value.
2. Enhancing profitability and harmonizing Corporate Finance services to leverage strengthened platforms and create greater value for clients as transaction volumes recover.
3. Accelerating AUM growth in Investment Management by expanding existing funds and launching new investment strategies, ensuring a stable and value-driven cash flow for the company.

With an improved financial position, a growing investment pipeline, and a recovering real estate market, Catella is confident in its ability to drive sustainable and profitable growth in 2025. By continuously assessing promising investment opportunities and optimizing its capital structure, the company remains committed to enhancing shareholder value and strengthening its position as a pan-European real estate leader.

Photo: Knut Pedersen, CEO, Catella