Diös is the largest private property company in northern Sweden in terms of property value, and defines its market as consisting of 10 growing cities from Borlänge in the south to Luleå in the north. The majority of Diös' properties are found in the respective cities' central business districts. Given the size of its portfolio, the company has a dominant market position in e.g. cities with underlying growth like Östersund, Umeå, Luleå and Sundsvall. The markets that Diös operates in are characterised by relatively low rental rates and high yields.
As a market leader in northern Sweden, local know-how and close connections with municipalities and entrepreneurs give Diös an advantage over its peers. High cash yields on Diös properties also stand out relative to peers. Diös’ largest property segment is offices, and we see ongoing value-add potential by converting vacant retail premises into offices. A large building rights portfolio implies potential, both via divesting and through in-house project development.
The main risk for a real estate company is the macro developments in the markets in which it operates. Diös has some exposure to riskier segments such as consumer discretionary, restaurants and hotels. Moreover, Diös has historically acquired property portfolios via rights issues, with dilution as a negative consequence for shareholders. It might become harder to find meaningful acquisitions since Diös dominates the property market in northern Sweden.