Divestment of Kaktus Towers strengthens position for new investments

Swedish investment company Catella has successfully completed the sale of Kaktus Towers in Copenhagen, providing a significant boost to its cash reserves and paving the way for new investment opportunities in Europe’s recovering property market. The divestment, finalized last week, comes as the company navigates continued uncertainty in the global economy and early signs of improvement in the European real estate sector.

Catella announced that it signed an agreement on 1 May with Quantum, acting on behalf of a client, for the sale of Kaktus Towers. The transaction is based on an underlying property value of approximately SEK 2.1 billion and is expected to contribute nearly SEK 260 million to Catella’s operating profit after transaction costs. Completion is anticipated during the second quarter.

“We are pleased to have reached an agreement to divest Kaktus Towers at attractive levels for both seller and buyer,” said Mattias Persson, Group Chief Economist at Catella. “This iconic, award-winning project reflects our strategy of creating high-quality assets. The sale strengthens our financial position and enables us to pursue new, value-creating investments.”

The residential component of Kaktus Towers, completed in September 2022, is fully leased and has achieved 15 percent rental growth since opening, underscoring its market appeal.

Despite global economic uncertainty following the escalation of trade tensions earlier this year, Catella sees a cautiously improving outlook for European property. The European Central Bank’s recent interest rate cut and signals of further easing, combined with stabilizing inflation and improving credit conditions, are bolstering confidence in the market. First-quarter transaction volumes in Europe rose 4.3 percent year-on-year, Catella reported.

However, the company’s first-quarter results were affected by lower transaction-based income, weaker fund valuations, and restructuring costs, leading to an operating loss of SEK 44 million compared with a SEK 4 million profit in the same period last year. Adjusted for one-off factors, Catella said its underlying performance remains in line with expectations.

In the Principal Investments division, Catella maintained its focus on completing and selling development projects while evaluating new opportunities, including partnerships and mandates with institutional investors. The sale of Kaktus Towers aligns with this strategy and frees up capital for future investments. The company also highlighted its co-investment in the Vega residential project in Copenhagen, announced in April, where it is partnering with global investor Barings to develop 269 affordable apartments.

Catella’s Investment Management division reported SEK 148 billion in assets under management at the end of the first quarter, a slight decrease from year-end 2024 due to currency effects. Adjusted for these, assets grew by nearly SEK 2 billion, driven by new mandates. The recent merger of Catella’s fund management arms into Catella Investment Management GmbH is already delivering benefits, the company said, including recent acquisitions of logistics properties in France within its Catella Logistik Deutschland Plus fund, which closed at EUR 500 million in late 2024.

Looking ahead, Catella said it remains optimistic despite global economic headwinds. Interim CEO and President Mattias Persson emphasized the company’s strong liquidity and capital base following the Kaktus Towers sale, positioning it to seize opportunities as the market improves. Persson also welcomed incoming CEO Rikke Lykke, who will assume leadership in August.

“Our strategy is clear: to grow assets under management, enhance recurring income, and create long-term shareholder value,” Persson said. “With a strengthened financial position, we are well equipped to make new investments, develop projects, and expand mandates across Europe’s property markets.”