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Rating action

Scope Ratings GmbH (Scope) has today affirmed the issuer rating of Fastpartner AB at BB/Positive. Scope has also affirmed the senior unsecured debt rating at BB and the short-term debt rating at S-3.

The affirmation and Positive Outlook reflect Scope’s expectation that the decline in interest rates in Sweden will lead to improved interest cover and cash flow for the company. However, these improvements have yet to materialise on a sustained basis, while the low share of fixed-rate debt and hedges still poses a risk.

The full list of rating actions and rated entities is at the end of this rating action release.

Key rating drivers

Business risk profile: BBB- (unchanged). The company’s business risk profile remains robust, underpinned by its stable profitability, and position in the Swedish real estate market. However, the geographical concentration and low weighted average lease term constrain the credit assessment of the company.

Fastpartner is a medium-sized European real estate company, shown by its Scope-adjusted total assets* of EUR 3.0bn as at end-June 2025, gross lettable area of 1,570m square metres, and a business strategy that benefits from prime property locations and high occupancy rates. Its assets are located across six Swedish metropolitan areas and are high quality given their modern premises that meet modern standards. The portfolio’s occupancy rate is stable, at 91.8% as at end-June 2025. The weighted average unexpired lease term of 4.2 years at year-end 2024, is below European averages, and a continued downward trend could indicate increased lease rollover pressure. The company is top five in most of its regional markets, a position which translates into resilience to cash flow volatility across economic cycles, industry developments and regulatory changes.

Fastpartner’s tenant portfolio is spread across a range of industries. As at Q2 2025, the top tenant accounts for 3.7% of rental income, the top three for 9.4% and the top 10 for 19%. Tenants also have investment grade credit quality, which reduces the risk of cash flow deterioration due to re-letting risks, single tenant defaults or delayed payments. Overall tenant diversification is moderate.

The types of properties are also relatively diversified. Office space accounts for the largest share by rental value (46%), with the remainder a good mix of shops, restaurants, logistics, healthcare and industry. The main risk to the business risk profile is the lack of geographical diversification given the portfolio’s high concentration in Sweden, especially Stockholm, which accounts for 71% of rental income and 76% of market value. The resulting vulnerability to the economic developments of this region is partially mitigated by Stockholm’s status as an ‘A’ location through its large and liquid property markets and by Sweden’s mature and stable economy.

Profitability further supports the rating, with EBITDA margins stable at 68%. Scope expects rental growth to mitigate inflationary pressures, keeping profitability stable over the medium term.

Financial risk profile: BB (unchanged). The financial risk profile reflects the gradual improvement of credit metrics and cash flow. This is supported by the improved EBITDA interest cover to 2.2x as at Q2 2025 from 1.8x in 2024 and the leverage as measured by loan/value (LTV) of 48%. However, the high sensitivity to interest rate risk due to a high share of floating-rate debt continues to constrain the assessment. In addition, the improvements to credit metrics must be sustained to warrant a higher assessment.

Scope expects the company’s interest cover to reach 2.4x at year-end 2025 and further improve to 2.6x for the next years. This is thanks to the high exposure to floating-rate debt, as the recent drop in interest rates is reducing the interest burden. Interest rates in Sweden have been cut in quick succession by the central bank from their peak of 4% in Q1 2024. The rate is now 2% after the latest interest rate meeting in June 2025. One more cut is possible in the next six months based on the current trajectory, with the level expected to stabilise thereafter.

However, this high floating-rate exposure also constitutes a risk, creating a vulnerability to shifts in the interest rate. Fastpartner acknowledges this, seeking to fix interest rates for at least three years on at least 30% of outstanding debt by year-end 2025. The issuer has been waiting for the rate to stabilise to avoid fixing it higher than necessary. Even so, the 30% target, while an improvement, is low by peer standards. The fixed and hedged portion of debt is also still low, at 25% as at end-June 2025.

Leverage as measured by LTV is expected to remain below 50% in the medium term and slightly decline to 46% in 2027 thanks to EBITDA growth and increased cash generation. This improvement follows the company’s net LTV target of <45%. Leverage as measured by debt/EBITDA also improved to around 11.0x in 2025 and is expected to drop to 10.3x in 2027, also due to better cash generation.

Capex cover, as measured by the capacity to finance from free operating cash flow (FOCF), has returned to positive after the major investments in 2022. FOCF has settled at above SEK 400m a year since 2023 and is expected to remain at this level in the next years, resulting in a stable FOCF/debt of around 3%.

Resilient rental income growth as well as robust operating cash flow on the back of lower interest costs should limit the need for additional debt issuances. This will be despite capex estimations of around SEK 350m a year and dividends being maintained at existing levels, followed by a 10% assumed increase by 2027 based on financial targets. The assessment is further supported by potential yield compression as interest rates decline as this could lead to fair value appreciation of the portfolio.

Liquidity: adequate (unchanged). Fastpartner’s liquidity is adequate as sources of liquidity cover uses for the next 12 months by 1.2x.

Sources of liquidity are SEK 157m in cash and SEK 2.9bn in committed undrawn credit lines as at Q2 2025, and SEK 450m of forecast FOCF until June 2026. These can cover the SEK 2.9bn in maturing debt (as at Q2 2025) for the next 12 months. Coverage is also adequate on all upcoming capital market maturities until Feb 2027. However, secured bank debt maturing in H2 2026 will need to be refinanced externally.

Liquidity risk in the short to medium term is manageable. Scope’s view is based on: i) the low LTV of 33% on secured debt, which provides ample headroom to increase secured debt; and ii) the company’s continued access to capital markets, as shown by its commercial paper issuances and good relations with a range of financial institutions.

Supplementary rating drivers: credit-neutral (unchanged). The rating has no adjustments related to financial policy, governance and structure, parent support, or peer group considerations.

Outlook and rating sensitivities

The Positive Outlook reflects Scope’s expectation of improved debt protection, as measured by EBITDA interest cover, now at 2.2x at Q2 2025 and likely to increase above 2.5x over the next few years. This could be supported by sustained lower interest rates. Together with expected capex of around SEK 350m a year, this will lead to positive FOCF and reduce the need for more debt. The Outlook also reflects Scope’s expectation that the company will achieve the fixed interest rate target of at least 30% by year-end 2025.

The upside scenarios for the ratings and Outlook are (collectively):

1. Interest cover to improve above 2.2x on a sustained basis
    
2. Reduced share of floating-rate debt on a sustained basis

The downside scenarios for the ratings and Outlook are (individually):

1. Interest cover to remain at or below 2.2x on a sustained basis
    
2. Lack of reduced share of floating-rate debt

Debt ratings

The senior unsecured debt rating is affirmed at BB, in line with the issuer rating.

At Q2 2025 Fastpartner had SEK 5.24bn of senior unsecured debt outstanding, which comprises SEK 393m in commercial paper and SEK 4.85bn in senior unsecured bonds. These senior unsecured obligations benefit from a property pool of SEK 8.1bn in truly unencumbered assets in addition to SEK 4.3bn in unencumbered parts of secured properties (with a difference of secured LTV of up to 60%). Scope assesses the pool of unencumbered assets at SEK 12.5bn, which provides around 240% coverage of unsecured debt.

Scope has derived an excellent recovery for senior unsecured debt in a hypothetical default scenario in 2027, based on a distressed liquidation value of SEK 36bn. The analysis includes a 33% market value decline on investment properties and a 10% deduction for liquidation costs. Inherent uncertainties around advance rates and recovery expectations in the case of a hypothetical default, together with the likely increased share of secured debt, led to Scope maintaining the senior unsecured debt rating in line with that of the issuer at BB.

The S-3 short-term debt rating is based on the BB/Positive issuer rating and supported by the adequate liquidity cover, good banking relations, and access to secured bank and commercial paper funding sources as shown by regular issuances of various equity share classes and bonds.

Environmental, social and governance (ESG) factors

Overall, ESG factors have no impact on this credit rating action.

Nevertheless, Scope acknowledges Fastpartner’s positive efforts in this regard. By reducing emissions and supplying 100% renewable energy, Fastpartner is enhancing the quality of its property portfolio. While this is required by some multinational tenants and an attractive feature for others, it strengthens the appeal of its properties, supports consistently high occupancy, and helps secure stable cash flows, even in a softer economic environment or amid shifting demand patterns.

All rating actions and rated entities

Fastpartner AB

Issuer rating: BB/Positive, affirmation

Short-term debt rating: S-3, affirmation

Senior unsecured debt rating: BB, affirmation

*All credit metrics refer to Scope-adjusted figures.

Stress testing & cash flow analysis
No stress testing was performed. Scope Ratings performed its standard cash flow forecasting for the company.

Methodology
The methodologies used for these Credit Ratings and/or Outlook, (General Corporate Rating Methodology, 14 February 2025; European Real Estate Rating Methodology, 2 June 2025), are available on scoperatings.com/governance-and-policies/rating-governance/methodologies.
Information on the meaning of each Credit Rating category, including definitions of default, recoveries, Outlooks and Under Review, can be viewed in ‘Rating Definitions – Credit Ratings, Ancillary and Other Services’, published on scoperatings.com/governance-and-policies/rating-governance/definitions-and-scales. Historical default rates of the entities rated by Scope Ratings can be viewed in the Credit Rating performance report at scoperatings.com/governance-and-policies/regulatory/eu-regulation. Also refer to the central platform (CEREP) of the European Securities and Markets Authority (ESMA):registers.esma.europa.eu/cerep-publication/. A comprehensive clarification of Scope Ratings’ definitions of default and Credit Rating notations can be found at scoperatings.com/governance-and-policies/rating-governance/definitions-and-scales. Guidance and information on how environmental, social or governance factors (ESG factors) are incorporated into the Credit Rating can be found in the respective sections of the methodologies or guidance documents provided on scoperatings.com/governance-and-policies/rating-governance/methodologies.
The Outlook indicates the most likely direction of the Credit Ratings if the Credit Ratings were to change within the next 12 to 18 months.

Solicitation, key sources and quality of information
The Rated Entity and/or its Related Third Parties participated in the Credit Rating process.
The following substantially material sources of information were used to prepare the Credit Ratings: public domain, the Rated Entity and Scope Ratings' internal sources.
Scope Ratings considers the quality of information available to Scope Ratings on the Rated Entity or instrument to be satisfactory. The information and data supporting these Credit Ratings originate from sources Scope Ratings considers to be reliable and accurate. Scope Ratings does not, however, independently verify the reliability and accuracy of the information and data.
Prior to the issuance of the Credit Rating action, the Rated Entity was given the opportunity to review the Credit Ratings and/or Outlook and the principal grounds on which the Credit Ratings and/or Outlook are based. Following that review, the Credit Ratings and/or Outlook were not amended before being issued.

Regulatory disclosures
These Credit Ratings and/or Outlook are issued by Scope Ratings GmbH, Lennéstraße 5, D-10785 Berlin, Tel +49 30 27891-0. The Credit Ratings and/or Outlook are UK-endorsed.
Lead analyst: Eirik Loevdal Tollefsen, Associate Director
Person responsible for approval of the Credit Ratings: Marlen Shokhitbayev, Senior Director
The Credit Ratings/Outlook were first released by Scope Ratings on 31 August 2020. The Credit Ratings/Outlook were last updated on 30 August 2024.

Potential conflicts
See scoperatings.com under Governance & Policies/Regulatory for a list of potential conflicts of interest disclosures related to the issuance of Credit Ratings, as well as a list of Ancillary Services and certain non-Credit Rating Agency services provided to Rated Entities and/or Related Third Parties.

Conditions of use / exclusion of liability
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