Swedish property company Wallenstam AB on Wednesday cut its long-term growth target, citing persistent economic headwinds including high inflation and interest rates.
The landlord revised its 2030 business plan, lowering its net asset value goal by 20% to 80 Swedish kronor per share from a previous target of 100 kronor set in December 2022.
"Developments in our external environment subsequently became significantly more challenging than our expectations," Lars-Åke Bokenberger, Chairman of Wallenstam’s Board of Directors, said in a statement.
He added that rising costs for construction and management, coupled with deteriorating household finances, have persisted for longer than expected.
As a result of inflation, the company has started construction on fewer new apartments than planned, according to CEO Hans Wallenstam.
Despite the slowdown in construction, Mr. Wallenstam said the company's letting and management operations have performed well, with all apartments let and a high commercial occupancy rate.
To bolster its financial position, Wallenstam also raised its minimum equity-to-assets ratio requirement to 40% from 35%, the company said.
At the end of June, Wallenstam's net asset value stood at 58.30 kronor per share.
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