Diös is the largest private property company in northern Sweden and defines its market 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 the portfolio, the company has a very dominant market position in, for example, cities with underlying growth like Östersund, Umeå, Luleå and Sundsvall. The markets that Diös operates in are characterized by relatively low rental rates and high yields.
Generally, there is an increased demand for highly efficient and flexible office space, with excellent location and good communication opportunities. Office makes up around 50% of Diös' rental value so there are opportunities. Moreover, Diös has identified building rights of approximately 150,000 sqm BTA with a total investment in new construction projects of approximately SEK 4,000m. About 50% of these are residential building rights and approximately 50% are commercial building rights.
The main risk for a real estate company is the macro development in the markets in which it operates. Around 15% of NOI is within retail properties, where an increased online penetration is a threat to the off-line segment. Moreover, Diös has historically acquired property portfolios via rights issues, with dilution as a negative consequence for shareholders. It might be harder to find meaningful acquisitions going forward since Diös dominates the property market in northern Sweden.
