In a cautious market, Catella continued to invest in long-term value creation during 2023. We expanded Investment Management in
Focus on growth in a cautious market
Following a long period of soft market activity, 2023 closed on a cautiously optimistic note, with inflation appearing to be under control and stock markets rising, driven by the hope of earlier-than-expected interest rate decreases. While the swap markets are pricing in interest rate cuts, increased geopolitical risks could affect this fragile optimism.
In European properties, we believe that most of the asset price adjustments are probably behind us, although this is likely set to continue to some extent during early 2024. Although the transaction market remained slow in 2023, the gap between prime assets with a solid sustainability profile and other parts of the property market widened. While this trend was most pronounced in the office segment, it is likely to spread to other segments as tenant preferences evolve. Industrial and logistics properties recovered faster in
Although we expect it to remain challenging to raise capital, at least during the early part of 2024, a renewed focus on fundamentals by investors should increase interest in active asset management, high-yielding investment strategies and opportunities to acquire resilient assets – factors that are to Catella’s advantage.
As previously mentioned, 2023 was a challenging year for the entire property sector and fourth-quarter transaction volumes in
The changing market conditions led to adaptations in the organization throughout the year, with a reduction in full-time headcount by close to 30 or over five per cent (adjusted for acquisitions and divestments). Most of the cutbacks were the result of natural resignations and recruitment freezes, although restructuring programs also contributed, reducing profit for the year by close to
At the same time as making adjustments to the organization, we have also completed some forward-looking initiatives. One example includes building up a central capital-raising function aimed at improving access to global institutional investors.
Growth in a weaker market
Investment Management’s assets under management increased by
Profit for the quarter was
Towards the end of the quarter, we completed major transactions in
A hesitant year for Principal Investments
After the end of the quarter, we signed an agreement relating to the sale of a logistics property in Jönköping. This was the final property in the Infrahubs partnership, which added
Other development projects are progressing according to plan, albeit at a slower pace. We are in the process of finalizing the last commercial leases for the Kaktus property in
Principal Investments’ investments totalled around
Continued weak transaction market
Although revenues in the Corporate Finance business area reached their highest level in eight quarters, we are still a long way off normalized levels. However, the outlook brightened a little in the fourth quarter with a stronger position in the Finnish, French and Spanish markets. We have also seen increased demand for advanced debt and restructuring advice, and we acted as advisor on major complex transactions in
Outlook
Despite a somewhat brighter outlook and a slightly more active market, in combination with falling inflation and a lower interest rate outlook, we plan for the relatively subdued trend to continue during the first half of 2024.
Given our strong financial position, both for Catella and in our funds, we continue the work of launching new products to meet the changing market conditions and reinvesting in long-term value creation throughout 2024.
Catella presents the Interim Report and answers questions today at
https://ir.financialhearings.com/catella-q4-report-2023
For further information, please contact:
Michel Fischier
CFO
+46-8-463 33 86
michel.fischier@catella.se
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