Aros is one of the larger residential developers in the greater Stockholm region. It mainly develops apartments for the mid+ segment but also for the affordable housing segment. Aros operates a relatively slim organisation with e.g. outsourced construction. Aros’ projects are increasingly being developed on its own balance sheet, compared to in fund structures and joint ventures as it has mainly been historically. The company intends to develop a portfolio of investment properties to secure steady income streams. Aros ordinary shares were listed on First North in 2021: the main shareholders are Vencom and ALM (since H2’22).
As a residential developer, Aros is exposed to several key external macro factors such as interest rates, inflation and employment growth. There is a risk that lower and/or declining residential prices lead to lower/reduced profits. Additionally, Aros has a capital structure with interest bearing debt and preference shares, both of which require annual payments. Should interest rates quickly increase, it might put pressure on refinancing opportunities.