The canary in the coal mine for European real estate just died…
– CRE Crisis Crosses Atlantic: Sweden’s Largest Commercial Landlord SBB Implodes After Getting Junked, Halting Dividend:
The US Commercial real estate crisis – which according to Jim Cramer “isn’t going to destabilize the system” thus guaranteeing another global crash – has crossed the Atlantic and made landfall in Sweden where commercial landlord SBB – one of the most-owned stocks in Sweden – saw its share price crater to the lowest level since 2018 years after the company announced plans to postpone a dividend and cancel a rights issue intended to shore up its finances.
Shares in Samhallsbyggnadsbolaget i Norden AB — as SBB is formally known — plummeted more than 20% and have fallen 14 out of the last 15 trading days. Today’s plunge compounded the losses from Monday when the stock cratered 20% following a credit rating cut to junk by S&P Global Ratings. Its market capitalization has dropped from over $17 billion in late 2021 to less than $1.5 billion, a historic collapse for its more than 260,000 shareholders.
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Similar to their US peers, Swedish landlords must roll over $40.8 billion of maturing bond debt over the next five years, a quarter of which falls due in 2023. They have been viewed as the canary in the coal mine for European real estate because much of that debt is short term and floating rate, making it particularly exposed to interest rates.
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