How are rent levels for your premises determined?

Akademiska Hus – a HEI landlord

On average, Akademiska Hus has a market share of about 60 per cent, which means that we are one of many participators on an open market where customers can negotiate a solution that best meets their needs. The centres of education can rent from anyone they want and today there are more than 200 other property companies that also rent premises to the higher education institutions. In other words, far from everyone rents from Akademiska Hus; we do not even have a presence in some college towns.

The grant from the Swedish state to the higher education institutions is adapted to cover the cost of premises, which accounts for approximately 12 per cent of the total costs that colleges and universities have, regardless of who is the landlord.

Market rent

Part of Akademiska Hus’ remit is to charge market rents, which means that they are on a par with other landlords for universities and colleges in Sweden for comparable premises. The rent level is affected by, among other things, location, location, type of property, condition of the premises and contract period.

If a state-owned property company were to start subsidising rents, the result would skew the competition in relation to other private property companies, which cannot deviate from market rents in their operations. This in turn would affect the many higher education institutions that do not rent from us. Such skewing would also be in violation of current competition law.

Transparent rental model

Our rental model has been discussed with representatives from universities and colleges for many years, and we are transparent about how our rental model works. The rental levels in our agreements with universities and colleges are evident in the Swedish National Financial Management Authority's compilation of all governmental lease contracts, which can be accessed here.

Like most property companies, we have a clause in our rental agreements that entails an increase in rental prices based on inflation measured in the consumer price index (CPI). Between 2010 and 2021, when inflation was low, the rent increase based on the CPI has averaged 1 per cent. The increase in inflation since 2022 is having an upward effect on the levels for Akademiska Hus’ rental prices, just as costs and price levels are affected in society at large. The October CPI 2023 was 6.5 percent and that is the figure used as the basis for rent indexation for 2024.

Internal rental arrangements at the centre of education

The rent that Akademiska Hus charges the centres of education is usually divided among the various departments of the colleges and universities within each centre of education, along with other expenses for facilities, which are not charged by Akademiska Hus.

The departments are then charged an “internal rent” that often also includes costs for central premises such as common areas, cleaning, and security. The internal rent that departments pay per square metre can therefore be higher than the price per square metre that Akademiska Hus has agreed with the centre of education.