Pandox’s business concept, which is based on expertise within hotel properties, hotel operations and business development, is to actively own and lease hotel properties.

Based on financial data per 31 December 2016.

Pandox's business model is built around a number of key competitive strengths:

1. Large, high quality portfolio of premier hotel properties in strategic locations

With 120 hotels and 26,240 hotel rooms in eight countries, Pandox is a leading hotel property owner in Northern Europe.

2. Income stability from renowned tenant base with long leases

98 hotels are leased to third party operators, constituting approximately 80 percent of the total market value of all properties. Lease maturities are staggered with a WAULT of 13.9 years ensuring long-term rental income.

3. Focus on solid economies and ability to capture market growth

Pandox owns and operates hotels in solid economies, where six out of ten countries maintaining an AAA credit rating by S&P, and the remaining four countries maintaining ratings above AA. Within the individual country focus is on strong cities, with high GDP per capita.

4. Tangible organic growth from refurbishment and repositioning

Refurbishement and repositioning of hotels offer tangible organic growth potential over time.

5. Attractive yield, resilient cash flow generation and potential for lower interest rates

From 1997 to 2016, Pandox’s strategy and business model delivered an annualised total return on equity of approximately 18 percent [1]. The pre-tax cash earnings grew from MSEK 53 in 1997 to MSEK 1 289 in 2016. Given the current low interest rate environment, fixings have been made at significantly higher interest rates, thus potential exists for lower interest rates once these instruments mature.

6. Active ownership drives value and creates optionality

Pandox’s management team provides the property and hotel operations expertise that enables Pandox to implement its business strategy. Commitment to analysing the local hotel market and hotel assets, on an asset-by-asset basis, in order to derive and implement a situation-adapted strategy as well as commercial hotel operating capabilities, are the pillars of Pandox’s active ownership business model. The model provides Pandox with value creation potential and optionality, such as by allowing the company to take advantage of industry trends, including the fact that international hotel companies increasingly focus on brand management as opposed to property and hotel operations. Pandox is able to source investment opportunities as these companies divest real estate, and / or exit the hotel operation. The ability to take over the operation of a hotel can further reduce operational risk when, for instance: (i) lease agreements mature, (ii) tenants default, or (iii) hotels are significantly refurbished and leasing to third parties is not financially attractive. Pandox also believes hotel operational capabilities allow for better monitoring of tenant performance.


[1] The calculation is from 1997 to 2004 based on total shareholder return of the shares listed on Stockholm Stock Exchange. From 2004 until 2014 the calculation is based on equity internal rate of return for the ultimate owners based on contribution and distribution of equity and a net asset value consideration per year-end 2014, which is based on EPRA NAV. During the period certain factors, such as market conditions and the company’s debt/equity ratio, have fluctuated. Due to these fluctuations, the calculated historical return cannot be seen as an indication of expected future return.

Two business segments

Pandox’s business is organised into two business segments:

  • Property management, which includes 98 hotel properties leased on a long-term basis to market leading regional hotel operators and leading international hotel operators
  • Operator activities, which includes hotel operations executed by Pandox in its 22 owner-occupied hotel properties

Each segment is further divided into five geographic areas: Sweden, Norway, Finland, Denmark, and International. The latter comprises the Pandox's business in Belgium, Germany, Switzerland, Austria, the Netherlands and Canada.