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Castellum aims to break down borders to become the pre-eminent Nordic listed player

Castellum CEO Henrik Saxborn is a man in a hurry. He wants Sweden’s largest listed real estate company to establish first mover advantage in the e-commerce logistics and co-working office space sectors, which are expected to transform the traditional retail and office markets in the Nordic countries. Castellum should be the natural first port of call for domestic and international investors seeking exposure to this dynamic Scandinavian property landscape of the future.

Henrik Saxborn

Chief Executive Officer Castellum AB, Henrik Saxborn has been employed in Castellum since 2006. Along with his Master of Science, Henrik has extensive industry experience from the construction business, management and acquisition of properties and as CEO for a property management company. A former Chairman of CMB and Chalmers University of Technology, his other assignments include Board member of EPRA.

But despite the people of the Nordics’ reputation for being technology savvy and flexible in their approach to working life, these perceptions aren’t yet being reflected in the structure of local real estate investment markets, which lag behind other major European centres in the supply of properties tailored to the needs of the emerging e-commerce and co-working industries. Therein lies both the challenge and the great opportunity, Saxborn noted.
“It is going to be exciting and a lot of fun going for this new business, but there is also a danger. We cannot risk losing our focus on our existing core office portfolio, or the organisation of skilled people we have in place across 20 cities and their networks of close client contacts. We are aiming to adapt this key account approach to logistics and co-working because the market is going to be even more about the quality of the services you offer to clients in the future, rather than just managing assets,” he said.
Castellum was formed in the Swedish banking crisis of the 1990s when, like several other real estate companies, it was carved out of the then distressed property portfolio of Nordea, the Nordic region’s largest financial services group.
Since Saxborn became CEO five years ago, after serving as Deputy CEO for the previous seven years, Castellum’s net asset value has grown from SEK 34 billion to SEK 84 billion (EUR 8.0 billion), spread across 4.4 million m2 with around 700 individual assets and 6,500 corporate tenants. Nearly a quarter of the portfolio is occupied by public sector clients, such as government, police and the legal system.
Castellum’s strong expansion was driven by three main factors, Saxborn said:

  • A strategic re-positioning of the Swedish portfolio from smaller urban centres to the larger faster-growing cities in line with accelerating urbanisation trends.

  • A focus on the development of high-quality office assets, which has made Castellum one of the leading developers in the market with around SEK 4.0 billion in projects currently under construction.

  • The acquisition of two non-listed real estate companies over the period, particularly Norrporten with its SEK 23 billion portfolio.


The robust performance of the Swedish economy, with its solid growth, stable banking system and government, has also underpinned Castellum’s success over the past half-decade.
Visualisation of an up-coming property Castellum is building that will be the first WELL-certified building in the Nordics
“We are now ready to take down borders, whether that’s national borders to focus on cities, as we’ve done with our move into Helsinki, or property sectors, such as retail to logistics, and co-working within the office market,” Saxborn said.
“Investors are going to see turnover in the portfolio because I am a firm believer in never wasting a strong market tailwind, and we’ve got a fantastic urbanisation tailwind behind Castellum at the moment. Stockholm is absolutely one of the fastest growing cities in Europe, and the other Nordic capitals are not far behind it. We also have smaller university towns that are easily outpacing their peers at an international level. These trends are definitely going to benefit the e-commerce market and the move from retail to logistics assets,” he added.
The Swedes, Norwegians and other Nordic nations have been quick adaptors to e-commerce, but this hasn’t been followed by the development of the usual supporting logistics distribution system, Saxborn noted. With only ten million people in Sweden, between six and seven million in Finland and Norway, and four million in Denmark, it has been possible to remain sub-optimal in the e-commerce logistics distribution much longer than in more heavily and denser populated markets.
“We thought we would have to tear down the older warehouse stock, but it is still providing extremely good cash flow that is only getting better as tenants increasingly use the space for ‘last mile’ deliveries. However, that is going to change as e-commerce volumes continue to rise because the existing space is not designed to handle this and it is the wrong locations. In fact, there is virtually no really suitable last mile transit hubs in the main city markets and the same applies to tailor-made co-working space in the office sector as urbanisation grows,” Saxborn said.
Castellum is developing its own co-working concept, which is to be launched from 2019.
The company set-up an external Digital Laboratory about 1-1/2 years ago to improve its knowledge of the co-working market and supplement the information it garners from its existing tenants in the space. To-date the penetration of the co-working concept has been very low in the Swedish office market, despite the proliferation of creative media and tech companies in the main urban centres.
E.On’s new headquarter in Malmö Sweden, that will be built by Castellum
“Until now the market has been rather ‘un-mutual,’ with a lot of local players that have been around for ten years or so, but the volume has been low. That is going to change. WeWork, for example, said they are coming into the market and have contracted for 10,000 m2 in Stockholm. We are going to become a normal European co-working market,” he added.
In the logistics and storage spaces, Castellum has established a self-storage company called Beambox and Handly, a type of Nordic small-scale ‘Amazon’ that facilitates deliveries to pick-up areas in the entrances of its offices.
“Castellum’s transformation is all about connecting better to our clients. It comes from the realisation that I’m a 54-year old guy and that the company and I need to have much more contact with the 250,000 people going to work in our buildings every day, and to understand what the upcoming generations really want,” Saxborn said.
As part of its drive to become the leading Nordic listed real estate player, Castellum has actively engaged through its membership of EPRA in adopting both the best practices in financial reporting and also the sustainability reporting. The company was ranked as the number one sustainable developer in the world by GRESB this year and also tops the league in the office and industrials investment sectors. Castellum is additionally the only Nordic real estate firm, and one of only seven Swedish companies overall, to qualify for the global Dow Jones Sustainability Index.
Despite Castellum’s strategy to be as transparent as possible towards investors in its business and align with international best practice in the industry, the Swedish listed real estate sector, as Europe’s fourth largest market, remains something of an outsider in not having its own REIT regime.
“In the long-term, I think we will have a REIT regime, but it is all about timing. We have a lot of smaller listed real estate companies in Sweden, and you have to convince them through the local federation that REIT status will benefit their businesses, particularly on issues such as the level of any conversion charge to change their tax positions and free-float equity. It has got to be generally seen as an attractive proposition to all the main stakeholders before Sweden will take the REIT step,” Saxborn concluded.