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Due to the ongoing debate about Akademiska Hus

Right now, there is an ongoing discussion about Akademiska Hus, our mission and our rents. In the debate, there are data and comparisons that risk giving a misleading picture. Here we sort out some of the most common questions and explain how our rent setting and our mission work.

Claim: The rent paid by the departments at a higher education institution is the same rent as charged by Akademiska Hus.  

Our answer: Akademiska Hus agrees on and charges rent to the university. The university then distributes its premises costs internally between, for example, departments and research groups. The internal rent paid by the departments often also includes other costs that Akademiska Hus does not charge, such as costs for common areas, cleaning and security. 

The internal rent, sometimes referred to as unit rent, can therefore be significantly higher per square metre than the rent that Akademiska Hus has agreed with the university. It is therefore important to distinguish between Akademiska Hus' rent to the university and the internal rent that the university in turn charges its departments. 

Claim: Akademiska Hus should not have market rent but instead utility rent or cost rent.  

Our answer: At the beginning of the 1990s, the central government's provision of premises was reformed. A fundamental principle was to separate the management of state-owned properties from the activities that use the premises. At the same time, the authorities were given greater responsibility for their own provision of premises and the opportunity to rent premises on the market. 

Akademiska Hus was formed in 1993 and, according to the state's mandate, is to conduct its operations on a commercial basis and charge market-based rents. This means that our rents must correspond to the rent level for comparable premises. The principles for the state's property supply have subsequently been discussed and confirmed on several occasions. 
 
There are many higher education institutions that do not rent premises from Akademiska Hus, and there are other property owners who rent out premises to higher education institutions. Therefore, it is important that Akademiska Hus, just like other property owners, has market rents. This is so as not to distort competition between the universities and against other real estate companies and thus violate competition law. 

Claim: Akademiska Hus should lower its rents when the higher education institutions are having a tough time financially.

Our answer: It is Akademiska Hus' task to charge market-based rents. This means that the rent must correspond to the rent level for comparable premises on the market. The rent level is affected by, among other things, location and location, type of property, condition of the premises and contract period. 

We cannot unilaterally set rents below market level in order to financially support individual higher education institutions. This would risk distorting competition with other property owners and also creating different conditions between higher education institutions depending on who they rent their premises from. It would thus violate current competition law.

Claim: It would be much better if the higher education institutions themselves own their premises.  

Our answer: At present, public authorities, as the majority of the country's universities and colleges are, generally cannot own real estate. The state's property supply is instead based on the authorities renting their premises.

Claim: Akademiska Hus does not care about the universities' tough financial situation and has no interest in the universities having lower premises costs.  

Our answer: We are well aware that many of the country's higher education institutions are in a strained financial situation and are affected by the cost increases of recent years, where rents have also risen as a result of inflation. That is why Akademiska Hus works actively with our customers to contribute to more efficient use of premises. With the help of analyses, sensor data and collaboration, we see that many higher education institutions have the potential to use existing premises more efficiently and adapt the premises to the actual needs of the organisation. This can reduce the higher education institutions' overall premises costs and free up resources for education and research.  

Claim: It is not possible to determine market rent for Akademiska Hus' premises because in practice only higher education institutions can rent them.

Our answer: Market-based rent means that the rent must correspond to the rent level for comparable premises. In the assessment, several factors are taken into account, including location, location, type of property, condition of the premises and contract period. 

In other words, not all premises need to be identical in order to be comparable. By weighing up relevant comparison objects and the factors that affect the value of the premises, it is possible to assess a market-based rent level even for specialised university and college premises. Akademiska Hus also conducts regular analyses with the support of external valuation companies. If the parties cannot agree on the terms of the tenancy, it is possible under the tenancy legislation to have the rent reviewed by the rent tribunal.

Claim: The owners' demands for profit/return for Akademiska Hus lead to high rents. 

Our answer: It is important to distinguish between the owner's financial goals for Akademiska Hus and how the rent for an individual premises is determined. Our rents should be in line with market conditions and determined on the basis of what applies to comparable premises – not by adding a certain required rate of return on top of the rent. 

At the same time, the state has set financial targets for Akademiska Hus, including returns, equity ratio and dividends. These targets mean that operations need to be conducted in a commercial and cost-effective manner, but they do not determine the market rent for an individual premises. 

Claim: Akademiska Hus has a monopoly/does not operate in an open competitive market. 

Our answer: Akademiska Hus has an average market share of about 60 percent in the higher education segment. We are thus the largest player, but there are many more. Far from all higher education institutions rent exclusively from Akademiska Hus, and in some study locations we do not exist at all. Around 200 property owners rent out premises to universities and colleges in Sweden. Our rents correspond to the rent level of comparable premises on the market. If the parties do not agree on the rent level, it can be reviewed by the rent tribunal.