Swedish property company Sagax AB on Friday reported a rise in third-quarter rental revenue but a sharp drop in net profit, as it confirmed a major investment into the retail sector.
The company, which focuses on warehouse and light industrial properties, said profit after tax for the three months to Sept. 30 was 895 million Swedish kronor, down from 2.2 billion kronor a year earlier.
According to the report, the result was impacted by a negative property revaluation of 127 million kronor, compared to a positive revaluation of 254 million kronor in the same period last year.
Rental revenue for the quarter grew 6% to 1.37 billion kronor, while profit from property management, a key measure of operating performance, rose 1% to 1.17 billion kronor, the company said.
The report highlighted a significant strategic move during the period, with an investment of 1.19 billion kronor in Retail Estates NV, a Benelux-focused retail property owner.
This investment marks a notable diversification for Sagax, whose business concept is primarily to invest in the warehouse and light industrial segment.
Despite the valuation headwinds, Sagax raised its full-year forecast for profit from property management to 4.45 billion kronor from a previous estimate of 4.40 billion kronor.
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