Castellum, Inc.

Welcome to the Castellum Q4 Report 2023. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answer session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now I will hand the conference over to CEO Joachim Schoberg and CFO Jens Andersen. Please go ahead.

Good morning everyone and welcome to this Q4 and full year 2023 presentation from Castellum. I will start by saying that our core business continues to deliver stable results for which we are both proud and happy. Our total income increases by 9.8% mainly due to indexations and completed projects. More on that later. The income from property management increases mainly due to higher interest costs, of course, while the NOI increases by 12.5%. Financial costs increases by approximately 42%. And in addition, the central administration and results from EMTRA negatively affects our results. In total, we have had changes in the property values over the year of minus 9.5%. That corresponds to the amount 14.5 billion. Those changes are for the last quarter 6.3 billion. The average yield requirements is now down up to 5.62% compared to 5.01 at the beginning of the year. So it's an increase of 61 bps over the year. Our net leasing was negative, minus 67 million, mainly due to increased terminations during the last quarter. And for those of you who have heard me predict the positive figure, I can only say that I did not really expect the high number of terminations towards the end of the year. More on leasing trends later on in this presentation. We see a slightly decreased occupancy rate that is negatively affected by divestments of fully let properties. So the statistical effect is already given. So for those of you who are new to us, Castellum is one of the largest listed property companies in the Nordic region. We're a fully integrated company with local hands-on presence where our assets are located. The property portfolio is located in attractive growth regions in the Nordics, and we're exposed to the robust market in Norway via our holding in Entra. On the map you see the locations of our property portfolio and the size of the circles represents somewhat of our property size. Property values as of last December sums up to 160 billion SEK including our share in Entra. Of those 160, 73% are located in the main metropolitan areas, i.e. Stockholm, Oslo, Gothenburg, Malmö and Copenhagen. And Helsinki, of course. 50% of our square meters, that is about five and a half million square meters, are sustainability certified. And that has actually taken us through the goal for 2025, more on that later. And we have a yearly contract value of approximately 9.2 billion. So the income is showing good growth with an 8.9% increase in like-for-like holdings. There's some currency effects on our portfolios in Denmark and Finland. And if we exclude them, those are adding about a percent. So the net is some 7.9%. The completed projects have made a significant contribution boosting the income by 374 million compared to the same period last year. The notable projects include E.ON's new headquarters in Malmö and the new court building next to that also in Malmö. and a police building in Örebro. The completed projects together with the Life4Life portfolio are the key drivers increasing the income. However, growth is weighted down by transaction. We are, as you may know, net sellers throughout 2023. The direct property costs have risen 4.2% and as in the light for light portfolio. The increase is significantly lower for the fourth quarter, mainly due to lower electricity costs in that quarter. The increase in property and central administration is mainly attributable to one offs and more on that later as well. So there's very little changes in our top tenant list and the list represents a cross-section of Nordic business and authorities and our exposure to individual tenants is very low. Our 10 largest tenants represent less than 14% of our total contract value. and no tenant generate more than approximately 2.3% of our rental income. We have a very strong tenant base and some of our larger tenants are publicly funded. Approximately 25% of our total contract value derives from public sector tenants. The largest Individual tenant is the Swedish Police Authority. We have an average lease duration as of the year end of 3.8 years. ABB, our third largest tenant, has indicated that they are leaving some of the assets in our portfolio in Västerås. We have a good dialogue and we expect to prolong some of that. And in addition, ADD continues to be an important tenet for us in the future. I think I'll stop there and hand over to Jens.

Good morning, everyone. Jumping straight into rental income and how it relates to net leasing. In our opinion, a relatively weak correlation. Stable increase in rental income despite the quarterly net leasing figures being volatile over the quarters. Net leasing minus 51 million for the fourth quarter standalone and for the full year minus 67 million SEK. Bankruptcies higher than previous year, however, remains on low levels. Tenant quality is being very stable and outstanding receivables are insignificant. Continued stable demand from tenants. Contracts, however, take longer to negotiate, and economic vacancy is down somewhat compared to last year. No clear trend on tenants taking smaller spaces, rather a combination where some expand and some decrease space. Coming quarters will give better guidance. Examples of good leases signed during the fourth quarter are a six-year lease with the Swedish Police Authority in Norrköping, 6,400 square meters, and also a 14-year lease with a non-disclosed healthcare tenant in Stockholm, 2,100 square meters. Over to valuations. On an annual basis, Castellum has written down property values with approximately 14 billion, equivalent to 9.5%. since the peak in 2022, down with close to 21 billion. Approximately 85% of the write-down this year relates to higher yield requirements in our valuations. The rest is related to building rights, projects, and a negative cash flow change, especially due to low rent expectations on vacant premises. The valuation yield has been raised As already mentioned by Joakim, with 62 bits during the year and 97 bits since the peak in 2022. All properties have been externally valued in Q1 and approximately 45% in Q4. The majority was done by Cushman and Wakefield and approximately 10% double assessed with the help from CBRE. In addition, we have also divested properties during the year for approximately 5.4 billion, which is in line with book value and hopefully gives extra credibility for our valuation process. Nominal valuations are down to 2019 levels. However, looking at the yield shift isolated, we're back at the levels we had 2017. The difference is explained by high cash flow mitigating some of the negative effects from the yield expansion. With falling inflation end of 2023, we have also seen a sharp decline in underlying interest rates. However, something that do not present itself in lower yields yet, but rather the opposite. However, all normal considering well-known lag effects in property valuations. Inflation, however, seems to be going up and down and now up again however long-term interest rates are still well below the peak levels of last year and perhaps an early indicator that valuation yields are stabilizing however too early to say for sure is the fact that the yield gap between underlying interest rates and valuation yields are now at around 3.6% compared to just around 2% not too long ago, which starts to resemble the situation before the zero interest regime, especially if also taking into account the quality transition of Castellum's property portfolio during recent years. And now into some financial key figures. Loan to value is probably the lowest we've seen in Castellum since we started operating our business, which is very comforting. But starting with ICR, that is still stable at three times in line with our financial policy. Rights issue lower interest rates will most likely strengthen the ICR already during this year. liabilities amounts to 62 billion down from 77 billion at the beginning of the year average debt maturity has also improved quite a lot to 4.2 years thanks to repayment of short-term bonds and refinancing bank loans on longer tenure during the year and mood this has confirmed our baa3 credit rating with stable outlook during the fourth quarter Also looking at the loan-to-value again, that I couldn't resist to mention already on the previous slide, has improved over the year. The rights issue has been the main contributing factor, followed by funds from operation and divestments. Changes in property values of minus 14 billion have, on the other hand, put upward pressure on the loan-to-value. However, only with 3.7 percentage points. Erik Sundell, Average Interest 3% up from 2.6% at the end of 2022 despite increasing underlying interest rates during the year by almost 140 bits, excluding cross currency swaps, average interest rates amounts to 2.6%. Erik Sundell, Backed by strong Nordic banks, we have successfully increased our secured borrowing during the year at reasonable prices well below the bond curve. In addition, we see continued good interest from the banks and even start seeing a downward shift in pricing. In addition to positive science and secured financing, domestic bond market is also more liquid with new bond issues during the quarter. In Q1, we issued another bond of CEC 1 billion with a five-year tenure at 230-bit spread. Bonds spreads have tightened gradually during the fourth quarter and have continued to tighten in 2024. Easy to forget, but as late as in July 2023, our two-year SEC bond was trading at a spread of 300 bits, and now we see our bonds being traded at around 120 bits in the secondary market for the equivalent term. Our expectation is that the debt capital market continues to recover and hope to return to the euro bond market during 2024. Spreads are still wider than in the CRF market. However, with continued repayment of euro bonds by us and other Nordic names, resulting in decreasing supply, we expect the gap to close. available cash and unutilized revolving credit facilities amounts to to amazing sick 27.3 billion uh reduced project investment and no dividend this year will free up further funds in 24 till 26 we have bonds maturing totaling 25 billion of which we expect the majority to be refinanced with new bonds over to you again

Thanks, Jens. Those are comforting figures for sure. We'd like to draw some attention to the other part of our business, not only the financing business, but actually leasing properties. And during 2023, we have completed eight projects with a yearly rental value of 326 million. The average occupancy rate for these completed projects is 93%. The first picture down to the left is E.ON's new headquarters in Malmö. The building is called Sju Stjärnan and it's almost 32,000 square meters and an investment of 1.36 billion SEK. has a 12-year rental agreement and is located very close to the central station in Malmö. The second picture shows the new court building in Malmö, which is one of Northern Europe's largest workplaces for legal professionals. This is one of Castellum's largest and most complex construction projects of all times. We're very proud and the building is called Gudsfinkan and has an area of 26,500 square meters. An investment volume almost equal to that in Eons headquarter, 1.38 billion SEK, I'm sorry, with a 20-year rental agreement with the Kingdom of Sweden. Both projects are fully left with very stable customers. The remaining percentages are actually occupied by Castellum. I cannot stress the importance to us and to our tenants of these projects. The Swedish Minister of Justice and myself participated in the inauguration and all officials were extremely happy with their new workspace, including the courtrooms. We're very pleased to say that we have built these projects within budget and within the set time, despite the fact that the majority of the construction time was during the pandemic. We have a very interesting potential in our portfolio. And despite the fact that we have been in net sellers during 2023, we have retained the growth potential in our project portfolio. The challenging market conditions have, of course, caused us to pause some of the projects. At the same time, we have initiated new projects as part of our ongoing business. One of them is called Erskine and Friends in Swedish. That's Gladorna in Stockholm. It's three vacant office buildings in Kungsholmen. One of them is an award-winning Ralph Erskine design with lots of details preserved. A really cool building. Leasing is starting now and our first tenants to move in in about 18 months. The total area is 3.9 thousand square meters and the investments are done in three phases to accommodate leasing activities. Another one is Amparen in Finnsletten in Västerås. It's a new logistics building. We're densifying on existing land for an existing client, thus reducing risks. And we're building 36,000 square meters at the price of approximately 400 million SEK. And as Jens mentioned earlier, we have a vacant office building in Norrköping now being refurbished for the Swedish police authority. 6,500 square meters with an investment of 125 million SEK. All these three investments and projects are examples of what we prioritize. We're refining existing or vacant properties that has a short time to cash flow, very limited risk since we already know the buildings and we are turning assets that could be partly vacant from negative cash flow to positive. Turning the attention to one of the most important issues of our time sustainability. We have achieved two of our main sustainability targets two years ahead of annual. One is the solar power initiative that we have called 100 on Solar, where we reached the goal two years ahead of time. By the end of 2023, we had 106 solar panels installed. and they're now generating 70% of our annual energy consumption. The other sustainability goal that we have set up and which we have already achieved is to certify 50% of our um square meters uh and and we reached that also during 2023 and we are very proud of that so finally some some some key takeaways we are focusing on our core business we are left in properties we are reducing costs we are being more efficient efficient, thus improving our net operating income. This is a never-ending process and we will sort of never be finished with that. We still apply a strict capital discipline and through that, supported by our shareholders chipping in, has allowed us to amortize 16 billion SEK during 2023. and at the same time to invest. The LTV is down. Jens mentioned that a couple of times. We're super proud of that and shows a very stable business going forward. We have a very resilient business model and measures are taken to withstand whatever negative effects there might be from the slowdown in the general economy. That gives us also power to take some of the opportunities that might arise in the market. And despite the investment volume being lower than previous years, we still have a good growth potential with approximately 43 billion SEK in existing projects in our portfolio. So that sort of summarizes this part of the presentation, and we now open up for questions.

If you wish to ask a question, please dial pound key 5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key 6 on your telephone keypad. The next question comes from Lars Norby from SEB. Please go ahead.

Morning, Joachim. Morning, Gals. Morning. first a few questions about the rental market and a couple of questions about one-offs obviously the rental market you're talking about i quote preparing for a tougher rental market so my first question is if you look at the market situation today compared to in october when you released our q3 numbers is it pretty much the same or is it a bit more negative

I'd say pretty much the same, but as Jens mentioned, we have had some kind of a catch-up effect on terminations in the last quarter. Those things happen, and we try to illustrate that by the volatile quarterly net leasing figures that summarizes in the stable upward-going trend on our total rental income. I'd say there's very little changes from last quarter to this one, but we do sense that the general downturn in the economy is slowly, as I mentioned, transforming into the real economy, thus affecting tenants' appetite going forward.

And as you mentioned earlier on the call here, you expected or you indicated or you guided for, if anything, slightly positive full year net leasing figures. Obviously, that did not materialize. You mentioned determinations. If you look into 2024 and just looking at the full year, what can you say? What are your expectations? Are you expecting around zero?

We're not guiding on that, but the fact that we have a significantly slower project development going on, and those projects have significantly contributed to the net leasing historically, and that we are still trimming our portfolio There might be negative changes in the total leasing portfolio, but it's way too early to say now early February what the year will look like.

Okay, thank you. And then I'm turning to non-recurring items, or some people call them buy-nots. I think you mentioned in the CEO statement that you had 180 million in total. I guess that's for the full year. Just isolating. If I remember correctly from the nine-month report, you had 63 million on the CA line. So my question is, for the fourth quarter, is it an additional 117 million? And if so, how is that broken down on the three lines? maintenance expenses, lease and property expenses and CEA?

I think central administration, Lars, amounts to roughly 50 million the fourth quarter and remainder is split up between different categories that I don't think we want to dive into. But property management and other categories spring to mind.

And then it's correct that it is 117 in the fourth quarter, which means if you say it's around 60 on the CA line, it's close to 60 on those two other lines. Is that correct? That's correct. Okay, thank you. Those are my questions.

The next question comes from Jonathan Carnator from Goldman Sachs. Please go ahead.

Good morning, thank you for taking my question. Coming back to the leasing to follow up, what was the reversion captured on re-leasing over 4Q, i.e. do you have reversionary potential at this stage or perhaps a bit flatter? That's question number one. Question number two, I think you mentioned ADB. Was that including in the net leasing already 4Q4 or not? how much of the space given it's your number three tenant has been included in this in this termination yeah I mean let's start by that thank you I'm not sure I got the first question the line was breaking up slightly so so could you repeat the first question please yes of course it's the releasing spreads when you do releasing and what was the premium captured or not, there's just the existing in-place rent.

Okay, we do not really disclose the catch-up there. I mean, there's been a total of 17% increase due to indexation over the last year and a half. And that means that the new contracts are entered into on significantly higher levels Are we always able to catch that? Well, that depends very much on the demand in the individual location. So it's very hard to give an exact figures and we don't do that broken down on the individual areas. In terms of ABB, some of their, I mean, ABB is a huge tenant of ours and we have a constant dialogue, more or less a partnership in Västerås. Some of the figures are included, some are not. Some will be probably prolonged of these 40,000 square meters that we have announced already in Q3. And some are included, some are not. So that's just a very small portion of what's happening.

Okay, so I have to ask another way. Are you able to give us the impact of inflation or indexation on the like like when growth for 2023.

Yeah, I think I mentioned that. I think we have a let me just go back to my initial slide. So we have an increase by 9.8% mainly due to these indexations and then the completed projects. And I think that if we take out the new projects, we have like a 7.9, sorry, 8.9% increase in the like for like.

Okay, and inflation out of that was about that or was it a bit higher?

Inflation was slightly higher. So we have some contracts mainly with public tenants. Nearly all our contracts have some kind of indexation, but not all of them follow the official CPI. There's a big variety. of indexation clauses, and some of them are entered into, were entered into 10 or 15 years ago, and there might be variances in the individual indexes.

And I mean, a ballpark figure is 80% of the CPI. That is what we are able to catch usually.

Okay, very clear. Perhaps one last question, if I may. Obviously, you've been very successful in selling assets. this year. Is it your intention to continue selling assets or at this stage you think you've reached a level, obviously you've reduced LTV, a level at which you feel a bit more comfortable and could slow down on disposals from here?

We were very clear on 2023 that we will be net sellers. We did that for a number of reasons. Some of those reasons do not prevail anymore. That means that we are not comfortable in stating either that we are net sellers or net buyers. But what we are doing is that we are constantly trimming our portfolio and selling assets that either have reached their full potential, where we see limited upside under our management, or assets that are located in sort of non-strategic areas, those transactions will continue more or less forever. The aggregated amount for that, frankly, we don't know yet.

Okay, cool. Sorry, one last question. On the bonds, you said that you wanted to access again You're a bond market, you have a number of bonds to refinance. How do you see that versus your discussions with the rating agencies? Do you see that the market opened? Do you see any changes perhaps in their assessments upcoming, positive or negative, by the way?

A difficult question. We really don't know how the EM10 market will develop for Nordic names, but we feel a very strong interest in Castellum from the bond market. It opened up in the Swedish market first. And we see reasonably good spreads being presented to us. The liquidity is healthy. However, in the euro market, very few transactions have been done. over the last 12 months. And I think that maybe we will be one of the first names coming out. But we hope to see the spreads tightening, especially we have been repaying bonds for quite some time. Other Swedish names are also repaying the bonds. And at some stage, your investors will be underweight in the Nordic names. And therefore, we believe that the spreads will tighten up and resemble what we are able to issue bonds at in local currency.

It's important, I'm sorry for my breaking in here, but it's important to note that we are not reliant upon the bond market reopening. We have 27 billion of liquidity, so we will be able to cover bond maturities but that is not always what we want to do because we'd like to keep investing in our portfolio and of course uh bond market is is more attractive because it retains our our liquidity but if the bond terms are uh less favorable then we of course have the opportunity to simply repay So we are not in the hands of the bond market anymore. That has been sort of the aim for our entire process during 2023. Thank you very much.

And also coming back on what I understood as a question relating to Moody's, and I think that We have a very sound discussion with them. And of course, we want to safeguard as much of our untainted volume of underlying assets so we can issue unsecured bonds, giving strong comfort for those investors. And I think that we have good headroom in the covenant package delivered to us from all this.

Thank you.

The next question comes from John Vong from Kempen. Please go ahead.

Hi, good morning. Thank you for taking the questions. Another follow-up on the Latin markets. Are there any specific sub-markets where you're seeing the the toughest conditions?

We see basically these slightly sort of stochastic developments happening throughout the country. So no, we don't see a clear trend. Of course, the volatility is higher in the larger cities. That is always the case. And I think that that affects us as well. So the volatility in Stockholm and in Gothenburg and Copenhagen is higher than it is in Örebro or Norrköping. um but but there's no no segment and no geography that stands out okay that's clear also not outside uh sweden no well finland is is struggling as everybody knows and and and and our participation is is is relatively low in the Helsinki market. We'd like to be larger in the future, but for now, you can say that we're happy that we aren't. But the demand is slightly weaker in Helsinki. You have to study the Entra report on Entra's demand. It's better that Entra comments that themselves. And the Copenhagen market in general is quite strong. They have not had the downturn nearly at all that we've seen in the Swedish market in Copenhagen. So Copenhagen is a strong market.

Okay, that's clear. And talking about the Eurobond market, when you're talking about stepping back, Are you looking at plain vanilla bombs or could you also be looking at more exotic options?

I think that the plain vanilla is where we want to be. Of course we might look at other products but I think that looking at our balance sheet we want to keep things as clean as possible.

Okay, that's clear. And on the dividend, it has already been two years now of no dividend. What has to change for you to be more comfortable about making statements about perhaps even reinstating again, assuming at least that it is the intention to reinstate at some point?

I mean, that's really a question for the shareholders and for the board. I think that we are preparing the company for all eventualities. So that means that we need a solid balance sheet and we need a stable business. And what the shareholders want us in management to do with the surplus is a question for them rather than for us, actually. So we sort of just repeat the fact that we're uh not proposing any any dividend for uh the fiscal year 2023 and what lies in the future we have to come back to okay thank you the next question comes from marcus henriksen from abg sundal collier please go ahead

Thank you, good morning both. First a question on electricity costs. Do you expect them to be lower, all else equal, and continue to impact the property costs positively in the first half of 2024 and even into Q3 next year, or this year?

I mean, we had a very positive development during the fourth quarter and we expect it, or we are sure that it will continue the following quarters this year.

Thank you. Then you report interest income of 39 million in Q4. What is that and how should we think about this line item into 2024?

I think you should see it as a one-off effect.

All right. And then if we look a bit to you, you give a very, very nice table on split up of all type of financial costs. And then just looking purely at interest expense, we exclude ground cost, capitalized interest, etc. You end up at 567 here in the quarter in interest expense. And you state an interest rate of around 3% year end 23%. I'm perfectly clear here that the Euro SEC has been in favor, so your net debt is down, but it's still a very large deviation. If I would take the 3% interest rate and just looking at your interest expense in Q4, it doesn't add up. It implies an interest rate well above 3.5%. Any one-offs or should we... take this interest income as part of that you are not netting this or what do we have behind this deviation?

I can assure you it's correct. However, I mean the last quarter of the year is somewhat more turbulent when you want to prolong loans. You work a lot with derivatives and also during the fourth quarter we had a relatively large euro bond expiring at the coupon of 2% being um refinanced with bank loans and and seek bonds at much higher levels uh there's always a lag effect also on the fact that in the beginning of the quarter and the year, the total loan amount is much higher. But I truly understand that there is a difference here that could be somewhat difficult to understand. But also know that we are trying to prolong the duration of our loans, which will come at the cost. We also have a situation where we want to safeguard quite a significant portion of ungrown revolving credit facilities that continue to cost us money while we are actually issuing bonds and drawing down on secured financing when we increase the amount of secured financing from the banks. I mean, it's really a tricky question that we could most likely discuss for hours. I think we are on the right track, and I truly understand that the numbers look a bit high, but over time and during this quarter when spread hopefully continue to come down, underlying interest rates and the derivatives that we buy will be on much lower levels than the floating rates that we took in the fourth quarter. I think I stopped there.

As you say, we could go on for hours. Thank you for the reasoning. Then one thought on the euro bond. You have the one billion euro. size is huge relative to your annual cash flow. At the same time, the kind of longer term interest rates if we get the step up of four and a half percent total is not too bad. So any reasoning on how you might handle this bond?

I mean, I think we are working very proactively in the SEAC market and most likely in the Euro market during the coming quarters. I cannot give you an exact answer, but as Joakim said previously, we are not any longer dependent upon issuing in the bond market. However, of course, we will be issuing in the bond market, trying to keep a sound balance between the Secured bank financing and your bond financing and I think we are moving very much in the right direction issuing Significant amounts at least in in the SEC market over the last few quarters and into this year All right, thank you for that, thank you for taking my question

The next question comes from Fredrik CYON from Carnegie. Please go ahead.

Good morning, gentlemen. A few questions from my side. Let's start off with net leasing. Negative in the quarter, you indicated that there were a couple of large terminations at the end of the quarter. Can you specify the amount? We're talking about significant volumes?

They were not that large. There were quite a few of them, actually. I think it was 50... How much was it? In the last quarter, it was something like 50 million compared to 67.

That's the net leasing. Yeah, that's the net leasing.

I was more referring to the terminations. I got the impression there was a couple of larger ones at the end of the quarter.

No, no, no. They were just accumulating. Quite a few of them spread out throughout the portfolio.

Okay. Moving over to occupancy rates then. It's been trending downwards for a while now. Do you see an improvement moving into 2024 or should we expect a continued deterioration during there?

I think it's not unlikely to see a further deterioration on that, to be quite honest. I think that it's important for us to tell you guys what we are actually seeing. We are selling assets and have been selling assets with a higher occupancy rate than our average. And that, of course, mathematically takes down the occupancy rate for the remaining assets. We are also reducing the project, as you know, and typically projects contribute with a very high degree of occupancy rate. So just looking at those two, it's not unlikely that we see a falling trend, which I believe is going to be sort of a general trend for the entire real estate market. But we're quite open with it.

Thank you. And then moving over to unutilized credit facilities, it was more than 25 billion. Given your fairly strong balance sheet, do you think it's appropriate for Castellum to have such large undrawn facilities in place? Do you need it?

I mean, I think, I mean... When you start to refinance certain properties, you have discussions with the banks over a longer period of time. And sometimes they accumulate and perhaps grow beyond the target level you set out. And these things are slow moving. And I think that over time if we can issue longer bonds take up longer financing then it's reasonable to believe that we do not need the same amount of ungrown revolving credit facilities thus being able to actually lower interest costs over time and actually one one thing that i i forgot to mention regarding the somewhat high interest costs for the fourth quarter is and also for the year is when when you actually consider that we are lowering uh the amount of of project investment from 5.2 billion to roughly 3.5. We cannot activate interest costs relating to those projects in the same amount. Maybe 15-20 million in the fourth quarter relates to a lower amount of activation of interest.

Okay, I appreciate the laughter and take that as a hint to the 25 billion. Moving over to investments, have been falling year over year now for quite a while. It was 3.4 billion. What do you believe will be the number for when we summarize the year in 2024 approximately?

Right now. I mean, it's difficult to say. I mean, a part of the project investments is relating to CapEx in existing buildings, and that is pretty much always around one and a half billion. It really is very well connected to the fact if we are able to sell some assets at reasonable levels, maybe we want to transfer that into new, very profitable projects, but it's still way too early to give any guidance.

Okay, and my final question relates to property value changes. You have been fairly transparent and proactive in adjusting down your values, and I would assume you use the same external validators as some of your peers. Despite this, you concluded the fourth quarter with more than 4% downward revisions to property value. What else was significantly more for you versus peers in the fourth quarter, do you think?

I think that looking at Vasa Kronan and FabG, I think we are playing pretty much on similar terms, and we use the same upraisers. So I think maybe it relates to which upraiser that you're using, but we don't want to comment on this.

Okay, thank you. Those were my questions.

There are no more questions at this time, so I hand the conference back to the speakers for any written questions and closing comments.

So I see here in the chat that we've had quite a few questions that we already covered relating to repaying bonds, etc. One question that has arisen is this comment on the hybrid bond. And I would just like to repeat what we said on that topic earlier, and that is that we were one of the last ones out to issue a hybrid bond. And that means that we will be one of the last to actually have to take actions on it. So to us, The question is way too early to try to answer. We will look at the development and the alternatives, and then we'll come back on that. But for now, it remains a very attractive source of financing to us. uh yeah i think we've covered most of of of the the uh the questions in the chat um so but if there's any additional questions uh please uh send send us an email and we'll try to to to cover them So I think that completes our presentation for the fourth quarter and the full year 2023. Looking forward to seeing you all again on May 3rd for the first quarter of 2024. Thank you.