Towards new heights

2025 was a big year for Pandox. We celebrated our 30th birthday in fine style with the acquisition of Dalata Hotel Group, which is our largest ever acquisition. This consolidated our position as Europe’s leading hotel property owner.

Liia, tell me why 2025 was so special for Pandox?

The past year was filled with milestones. Pandox celebrated 30 years – and did it in the best possible way, with the largest acquisition in the Company’s history. A birthday present worthy of such a celebration!

For those who don’t know our history: Pandox was established in 1995 by the state-owned company Securum. This was against the background of the deep financial and property crisis that hit Sweden in the early 1990s. Its mission was to gather hotel properties that were having problems into a portfolio and prepare them for sale. Once the worst of the storm had subsided, it became clear that the business – then consisting of 18 hotel properties in Sweden – had the potential to stand on its own two feet. That’s how Pandox was born. With the benefit of hindsight, there are many who are pleased with that decision.

Since then Pandox has grown steadily, both geographically and financially, but with the same basic idea: specialising in hotel properties through active, long-term and engaged ownership. 

Just in time for our 30th anniversary in November, we made our largest acquisition to date: Dalata Hotel Group, with operations in Ireland and the UK – making the UK our largest individual market, and the UK and Ireland together our largest region.

The hotel market has continued to grow, and Pandox has grown with it. What were the drivers in 2025?

The hotel market’s growth has primarily been driven by active leisure travel and many major events. There is great demand for experiences and travel, which time after time outweighs the impact of new geopolitical challenges. In 2025 the hotel market once again demonstrated this strong resilience. Occupancy rates rose during the year, while average room rates remained stable. As usual, there is some variation between different markets and segments: performance by economy and budget hotels was weaker, while higher price segments – where Pandox is mainly active – continued to grow.

Geographically, the Nordic region performed best – especially Norway, along with Sweden and Denmark. In the UK growth was lower than in previous years, but gradually strengthened during the year. In Germany, although underlying demand was stable, growth was negative due to a strong comparison year when the 2024 UEFA European Championships were held in several major cities. Despite this, the year ended on a very strong note, supported by a packed trade fair calendar.

The positive market trend was also reflected in our results, with revenue and net operating income increasing by 5 and 10 percent respectively. Cash earnings adjusted for transaction costs and preparatory financial expenses for the acquisition of Dalata amounted to MSEK 2,206 – an increase of 13 percent, or 8 percent per share.

I am very pleased with our performance – with Dalata, with the add-on acquisitions we made during the year in the form of Hotel Pullman Cologne and Elite Hotel Frost in Kiruna, as well as with the profitable investments we are making all the time in our existing portfolio. Several major projects were finished during the year, including Scandic Malmen and Scandic Alvik in Stockholm, The Hotel in Brussels and Leonardo Royal Hotel Frankfurt. Our pipeline of ongoing projects is extensive and will contribute to continued growth in net operating income in the years ahead.

Divestments are also important, as they free up capital that can be reinvested in properties with a higher return. Quality Hotel Winn in Gothenburg, Scandic Imatra and Crowne Plaza Antwerp (which was divested on 2 February 2026) are some examples from the past year.

During the year you acquired Dalata Hotel Group plc – your largest acquisition ever. What were the reasons behind this?

The hotel properties fit well into Pandox’s acquisition strategy – they are profitable, are in strong locations and belong to attractive price segments. Since 2017 we have built up a strong market position and knowledge base in the UK and Ireland. Dalata offered a historic opportunity to substantially expand our presence in one of Europe’s largest and most dynamic hotel regions.

Scandic was our operator partner in the transaction and, after splitting Dalata’s business into a property ownership side and a hotel operations side, we are retaining 31 investment properties in Ireland and the UK. The intention is that, after the split, Scandic will acquire the operating platform with its total of 56 hotel businesses for MEUR 500, and that it will continue to operate the 31 investment properties under long-term revenue-based leases with a guaranteed minimum level and shared investments – the core of Pandox’s business model.

This is a clear example of Pandox’s ability to carry out complex and value-creating transactions in international markets.

The acquisition is expected to increase rental income by MSEK 1,145, net operating income by MSEK 1,115 and cash earnings by MSEK 430, measured on an annual basis using the current exchange rate (EUR/SEK 10.55). In the fourth quarter we reported an acquisition result of MSEK 1,598 from the anticipated sale of the operating activities to Scandic, which together with deferred tax of MSEK 1,847 corresponds to a contribution to EPRA NRV of SEK 17.70 per share.

It’s also worth mentioning that our loan-to-value ratio at the end of the year was 52.7 percent. 

How does Pandox ensure that science-based targets drive both climate and business benefits?

Our SBTi targets are integrated into the business strategy. In the Own Operations segment our green investment programme provides an expected return of around 10 percent while reducing carbon dioxide emissions by 42 percent for 13 properties. For Scope 3 emissions, which are those linked to leases and which account for around 90 percent of our total emissions, we have established a transition plan that relies on working with the tenant to analyse sustainability in each business case. This has resulted in initiatives such as: battery storage and solar panels in Luleå with planned implementation in a further six properties; energy efficiency proposals in several properties that are currently being evaluated; and a new bathroom concept that has been tested in two pilot projects and will be scaled up throughout the Group from 2026.

What are the benefits of CSRD reporting and green financing?

This has strengthened our ability to integrate sustainability into the business. By reporting according to the framework early, we have built robust processes and internal controls that create clarity between strategy, goals and implementation. The share of green financing future-proofs our portfolio and strengthens our long-term access to capital. In 2025 the share of green financing was 41 percent, and our ambition is for all loan agreements to be sustainability-linked.

What is your view on Pandox’s position and capital allocation in the coming years? With the acquisition of Dalata, Pandox is now one of the largest hotel property owners in Europe. We have a fantastic platform with 193 hotel properties in 11 countries, in over 90 cities, with strong partners and well-known brands.

That platform gives us considerable scope for value creation. Through investments that increase cash-flow – such as renovation, repositioning and extensions – we can continue to develop our properties and strengthen our tenants’ competitiveness. This type of investment is a central part of Pandox’s DNA, and creates both growth and value over time.

We have shown that our business model works in all weathers. Over the period 2015–2025, excluding the Dalata acquisition, we invested around SEK 38 billion in acquiring and refining hotel properties. These investments have increased net operating income by a total of around SEK 2.9 billion per year, corresponding to an average annual return of 7.7 percent. Adjusted for the pandemic effects in 2020, the average return increases to 11.7 percent. This return is a result of our focused business model, the talent and proactiveness within our organisation, and a long-term perspective in which we share risk with our tenants. It is a model we will build on – and which creates value in both the short and the long term.

I would like to extend my great and sincere gratitude to all my colleagues for your commitment and hard work in 2025. You drive Pandox forward every day with your professionalism, creativity and desire to make a difference. Thank you also to our partners for your constructive collaboration and great results – as well as to our shareholders for your valued trust which enables us to continue developing our properties, our destinations and our company.

And as tradition dictates, I would like to say a special thank you to our office dogs – the Pandogs. Your energy, playfulness and unbridled joy contribute more than you will ever know to our work environment. You are a natural and appreciated part of the Pandox family.

Stockholm in March 2026
Liia Nõu, CEO Pandox