Currently, 12.99% of the shares in SBB are shorted, according to Holdings. The troubled company has long been the most shorted stock on the Stockholm Stock Exchange.
But short sellers believe in a downturn in several companies with ties to real estate.
According to Holdings, there are currently 15 companies in the sector where at least 1% of the shares are shorted.
Business analyst Otto Klaar from Affärsvärlden believes it is “quite expected” for SBB to top that list and that “darling Sagax is the least shorted.”
“I am a bit surprised that Castellum and Balder are so heavily shorted. But perhaps these are mostly foreigners who see them as derivatives to bet against the Swedish real estate market overall,” he says.
“What do you think short sellers see in SBB?”
“No confidence in key personnel and the main owner Ilija Baltjan. If it turns out that the assets SBB has not yet sold are worth less than what SBB has valued them at in its accounting, the intrinsic value of SBB could even be zero.”
“And in Corem?”
“Rutger Arnhult’s office and logistics real estate company Corem is, like SBB, also in a very vulnerable position. With current interest costs, Corem is barely staying afloat. At the same time, the quality of the portfolio seems questionable, with a large exposure to an area like Kista that is losing business.”
The analyst also shares his thoughts on what short sellers might see in JM.
“I was somewhat surprised that JM is so heavily shorted. It has started to thaw in the Stockholm housing market, which will eventually lead to a turnaround for JM as well. Presumably, it is foreign institutions using JM as a derivative to bet against the Swedish housing market.”
“Do you think any of the short sellers’ favorites are worth buying? Why?”
“Fabege is far too cheap at the current level. The company has one of Sweden’s finest office portfolios and also has an exciting project development pipeline. The stock is now trading at a discount to its intrinsic value or around a P/E of 20 based on earnings potential,” says Otto Klaar and continues:
“Atrium Ljungberg is a very well-managed real estate company focused on office and retail properties in Stockholm. Atrium also has an exciting project portfolio focusing on the Slakthus area, which is currently being inaugurated. The stock is not cheap, but it is not overly expensive compared to other Stockholm-based real estate companies.”
“On the flip side, is there any stock you think should be sold or is overvalued?”
“In Corem, I think short sellers may be onto something. The company’s finances are already under pressure today, and there is a looming risk of rising vacancies and falling property values in Kista.”
### The Most Shorted Real Estate Stocks
| Stock | Short Interest |
|————————|—————-|
| SBB Norden B | -12.99% |
| JM | -7.40% |
| Castellum | -3.69% |
| Balder | -3.40% |
| Cibus Nordic Real Estate| -2.96% |
| Wallenstam | -2.63% |
| Catena | -2.45% |
| Fabege | -2.41% |
| Hufvudstaden | -2.24% |
| Nyfosa | -1.69% |
| Wihlborgs Fastigheter | -1.41% |
| Pandox | -1.38% |
| Corem Property Group | -1.12% |
| Atrium Ljungberg | -1.09% |
| Sagax A | -1.00% |
Source: Holdings
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