Risk and risk management

Owning and managing properties means that operations are exposed to a variety of risks, both internal and external – or to uncertainties that may affect the Group’s ability to achieve objectives. Castellum therefore works with a regular and structured process to identify and actively monitor the full range of financial and non-financial risks that the Group encounters or has to take on. The Group’s risk management involves a structured process of decision-making with the aim of establishing a balance between the desire to limit uncertainty or risk and the task of generating growth and shareholder value.

Risks, exposure and risk management

Castellum defines risk as an uncertainty factor that may affect the ability to achieve company goals. Risk management involves a structured decision-making process with the aim of balancing the desire to limit uncertainty with achieving the objective. In order to assess the effect of identified risks, an internal risk rating is carried out where each risk is assessed, both from the perspective of impact and probability. This process determines whether the risk should be further monitored (Monitor), corrected (Focus) or handled through the standard review and management (Review).
To facilitate risk management, Castellum has chosen to classify risks into the following categories:

  • External environment – risks due to the influence of external factors and events
  • The real estate portfolio – risks associated with the ownership of Castellum’s real estate portfolio
  • Employees – risks associated with recruiting, training and retaining engaged and competent employees
  • Management – risks associated with everyday management of Castellum’s real estate holdings
  • Financing – Castellum’s financing risks
Risk categoryRiskimpactProbabilityPriorityDevelopment
External environment
Macroeconomic risks 1. Macro – crises Serious Low Focus
Crises 2. Crises Medium Possible Monitor
Change in legislation 3. Changes in legislation Large Safe Focus
4. Regulatory compliance Serious Uncommon Focus
Real estate portfolio
Composition of the real estate portfolio 5. Composition of the real estate portfolio Large Uncommon Monitor
6. Obsolete product/property Medium Likely Monitor
7. Size – too big in a submarket/area Lower Uncommon Review
Investments 8. Investments Large Possible Focus
9. Strategic acquisitions Serious Possible Focus
Change in value 10. Changes in value – real estate Serious Safe Focus
Management
Rental income 11. Rental income Medium Uncommon Monitor
12. Disgruntled customers/tenants Serious Low Focus
Property costs 13. Property costs Insignificant Possible Review
Tax 14. Tax Insignificant Possible Review
Sustainability 15. Operational environmental risks Serious Low Focus
16. Risks attributable to climate change Medium Possible Monitor
17. Violation of Code of conduct Serious Low Focus
Liability risks 18. Liability risks Large Possible Monitor
Reporting 19. Reporting Serious Uncommon Focus
Employees
Employees 20. Employees Serious Likely Monitor
Financing
Financing 21. Financing Serious Possible Focus
Change in value 22. Change in value – derivatives Medium Likely Monitor

Increased focus on risk area since latest previous year.
Reduced focus on risk area since previous year.
Unchanged focus on risk area since latest previous year.