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[Idea note] - Hufvudstaden: Unleash the Share Buyback

Richard Bråse argues that Hufvudstaden has a unique opportunity that no other Swedish real estate company can seize: meaningful share buybacks from

Author

Kristoffer Lindström
June 16, 2025

Idea note

This is an Idea note; It’s a collection of early signals – companies mentioned in fund letters, blogs, or by sharp investors online. Not a full pitch, just a starting point for ideas that might be worth a more in-depth look.

Premium Stockholm Real Estate Fortress Trading at Deep Discount - Share Buyback Catalyst Imminent

Hufvudstaden AB - Premium commercial real estate owner focused on Stockholm and central Gothenburg, with SEK 47.1 billion property portfolio.

Ticker: HUFVA | Timeframe: 12-18 months | 💼 Special Situation

Richard Bråse argues that Hufvudstaden has a unique opportunity that no other Swedish real estate company can seize: meaningful share buybacks from a position of exceptional financial strength. Bråse believes that the company’s ultra-conservative capital structure, with only a 21% loan-to-value ratio and a 59% equity ratio, provides unparalleled flexibility to repurchase shares that are trading at over a 30% discount to net asset value. Bråse contends that, due to limited expansion opportunities—given the company’s focus on prime locations in Stockholm and Gothenburg—share buybacks represent the most logical capital allocation strategy. He notes that Chairman Fredrik Lundberg has recently opened the door to discussions on buybacks, suggesting that this catalyst may finally materialize. Hufvudstaden is Aktiesparfonden’s largest real estate holding, reflecting high conviction in this thesis.

  • Setup: Ultra-conservative balance sheet meets significant NAV discount in illiquid premium property market

  • Latest Development: Fredrik Lundberg signals openness to share buyback discussions in May 2025 interview

  • Mispricing Reason: Market undervalues defensive qualities during real estate downturn, focusing on growth limitations

  • Timing: Swedish real estate recovery beginning, Kvarteret Johanna project completion approaching

  • Value Catalysts: Share buyback announcement, Gothenburg project completion, dividend increases

  • Upside Potential: 50%+ returns from NAV convergence plus buyback-driven scarcity value

  • Risks: Continued office market weakness, management reluctance on buybacks, interest rate volatility

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