Fabege AB (publ)

Welcome to Fabergé's presentation for the second quarter and the first half year of 2023. As usual, we will finish up with the question and answering session. And it's also, as usual, possible to submit questions by email to irn.fabergé.se. And you can do that during both the question and answering session. So please go to slide number two. I will not use up much time to go through this slide, but as you know, I'd like to stress the focus we have on Stockholm and especially some suburbs in Stockholm, where we have the modern portfolio in rain-bound locations. So very good public locations in focused areas. So next slide, please. To summarize the first part, we say It's a strong half year. We have increased rental income. We have an operating surplus. We have, of course, negative values in the property portfolios. I think there was a lot we could expect, but we have a positive net debt in the second quarter and in total of the first half year of 22 million. And on top of that, we have signed, as you know, the LOE regarding the rental of the entire net and so on and so on. In total, that is 66,000 square meters. And we will give more information about that when the contract is signed and that will be free what we're planning. But of course, to report you also increased interest costs. And also we'll now tell you a little bit more about the figures in more detail.

Thank you, Stefan. Please turn to slide four. In the first six months of 2023, we reported increased rental income and improved net operating income, which was not fully covered by increased interest expenses. However, we reported a higher profit from property management for the second quarter specifically compared to the previous year. Increased yield requirements in the property portfolio have continued to put pressure on property values. Rental income amounted to 1.7 billion, corresponding to an increase of 12% in an identical portfolio. The increase in income was mainly due to the index length increase that entered into effect at year end, high parking revenue and positive net occupations during the period, of which Conventum's move into Bakken 39 at Kungsgatan was the largest one. And this was partly offset by a negative effect of the Swedish tax agency's relocation from Nöten 4 on the last of March last year. Increased operating expenses were mainly due to higher costs for energy and snow clearance, and the surplus ratio came in at 74%, which was in line with expectations. Biljärbostad's gross profit amounted to 27 million as five projects were completed and where final recognition took place during the second quarter. Central administration costs came in at minus 55 million in line with the previous year. Interest expenses increased compared to the previous year, which was due to a slightly increased loan volume and higher average interest rate. The average interest rate increased from 2.39 at the year end to 3.1 at mid-year, as high market interest rates are gradually having an impact on our average interest rate. The result in associated companies amounted to minus 27 million, of which minus 36 million related to capital contributions to Arenabolaget during the period. and 9 million, positive 9 million related to contributions from BE Bostad's co-owned projects. And we therefore reported profit from property management of 703 million, a slight decrease compared to the previous year, which was due to higher interest expenses, but as stated somewhat higher in Q2 specifically. Unrealized changes in value amounted to minus 3.8 billion, and I will come back to this very shortly. The surplus rate in the derivatives portfolio decreased by 100 million. The tax expense, which only related to deferred tax, was positive and amounted to plus 687 million. Please turn to page five. During the first six months, the increased market interest rates continued to have an impact on yield requirements and valuations. There were still only a few transactions in our market and the valuations have also been influenced by transactions that were not completed. During the quarter, we have independently valued approximately 60% of the portfolio and the other properties have been internally valuated. The average yield requirement in our portfolio increased by six basis points during the quarter to 4.17%. The increased yield requirements were possibly offset by higher inflation assumptions. Both Newsec and Cashman Wakefield now expect an inflation rate of 6% in 2023. And the average yield requirement is now back at a level equivalent to what we reported at year end 2018. Total unrealized value changes in value then amounted to minus 3.8 billion. Please turn to page six. The simulation shows that we can withstand write downs of a further almost 20% based on today's market valuation without impacting our internal targets. And the margin is even higher in relation to the covenants in our bank agreements. Next page, please. Reported equity decreased during the quarter and amounted to 134 crowns per share. The long-term net asset value, the IPRA NRV, amounted to 161 crowns per share. The loan-to-value ratio increased to 40% and the equity asset ratio decreased to 47%. However, both key ratios continue to indicate a very strong balance sheet. The interest coverage ratio as expected has decreased in line with increasing interest expenses and amounted to 2.6. Calculated on a moving 12-month basis, the interest coverage ratio was 2.9. Next slide, please. Financing. Financing continues to remain in focus in the current market situation. The commercial paper market is functioning well and the banks continue to show that they have more capital to lend to the sector. The bond market is still volatile with high prices. In connection with the bond maturity of 1 billion in February, we carried out a small issue of 250 million. The spreads had then come down to a level which was as a first step felt sufficiently okay to show the market that we would like to be active. Since then, the spreads have widened again and we have continued to prioritize bank debt. During the first six months of 2023, we have raised new bank facilities of 2.9 billion and we have repaid bonds of 1.2 billion. We are now in the process of refinancing bank maturities in Q2 and Q3 2024. And we are also increasing our bank facilities in connection with this by a further 1 billion. Taken together at mid-year, we had 5.9 billion in unutilized facilities, including the backup facility for outstanding commercial papers. Slide 10, please. We have worked for many years to spread our loan maturities. The slide here shows how the maturity profile looks. The strategy of long-term fixed rate periods is unchanged, and we aim for a distribution of our loan stock among several funding sources. The short-term funding via commercial paper, the green bar chart, is fully covered by backup facilities. During 2023, we have remaining bond maturities of 1.2 billion in total during the second half of the year. We are prepared to change over these maturities to bank financing if the market does not improve. And as I just mentioned, we are also in the process of refinancing upcoming bank maturities, including raising increased bank facilities to manage upcoming maturities. Page 11, please. Just over 60% of the loan portfolio is fixed, mainly based on long-term maturities and mostly through straightforward interest rate swaps, supplemented by some fixed rate bonds. Just over 40% of the current loan portfolio is matched by fixed rate terms beyond 2025. We are currently holding off on entering into further fixed rate terms, but the longer term plan is to replace maturities with new long-term fixed rate periods. The high proportion of fixed rates terms today provides us with protection against rising market interest rates. In the short term, the high market interest rates will thus have a more limited effect on our interest expenses. For a moving 12-month period ahead, an increase in the market interest rate of 1% generates an increased interest expense of approximately 127 million, all else unchanged. And now back to Stefan.

Thank you, Åsa. A little bit short about the transaction on the Stockholm market. In the beginning of the year, we saw a couple of transactions done mainly between institutional investors. There were pension funds buying, there were pension funds or listed companies selling. In the second quarter, we haven't seen that many transactions, but the few that have been done has been on good levels. There are some also done with family offices that has been on buying side. But next slide, please. A little bit more on the run development at Liksdaka. The contracts we are signing has been on good levels. The whole market are still stable levels. Even in the CBD, we can see record levels on some Not in our, and we haven't signed any of those levels, but I think we are big. In our context, I've seen so much, even 10, 11,000 per square meter in the CPE. So it is a stable market. And when talking about the, we got the index, indexation of 11%. I can say that we haven't had, or we haven't had very few discussions with tenants. And also in renegotiating, we are, I think the levels we have, as you can see. It's a good stable rental market. Next slide, please. The take-up is beginning of the year, a little bit lower. It's less activity, but even here we see good demand, but longer decision. process, so it takes longer time to get a signed contract. Next slide, please. The offices in Stockholm have in the last 10 years been growing, but they are flattening out for the last almost five years now. But the number of offices has continued to grow, even if it's now seeing a little bit more down, but it's a very good very high levels and that we see that will continue and with that said we go to next slide please the vacancies we have seen a little bit increasing vacancies over the last years in especially in some part of Stockholm in the inner city and the CBD it has been very low but in some other parts of Stockholm, for example, Siesta, and we have larger vacancies. But we see also now, we continue to grow a little bit in the beginning of this year, continue to grow, but it's surprising, I would say, stable, and it's a good market here. The next slide. But of course, with all the tenants, potential tenants, and I think all companies, and tenants are discussing how will the future of the office look like. We are seeing more and more people coming back to the office. We see more and more companies saying that the office is the base for the business. Of course, as the digital transformation changed how we're working, of course, both from how we travel and how we have the meetings. But we see, that means also we have, there will be refurbishment, we're doing more smaller rooms, for example, so they can have smaller meeting rooms for teams meetings themselves. Another trend is that the sustainability is even higher up, not only for the owners, the property, real estate owners, but also for the tenants. I think there is much, much discussions about how we can help them to be sustainable. The need for flexibility, simplicity of service is also one of those issues that we are discussing now. So, of course, it's changing. Of course, it's a lot of discussions, but it's positive discussions that the office is still even more important. But the public transportation, that the availability is even more important than three, four years ago. Next slide, please. As you know, we had negative net letting during the first quarter. In the second quarter, we have a positive net letting. And in total for the first half year, we're up plus 22 million. On top of that, we had the LOA we signed with a tenant for NetA4, and we will announce more details when the contract is signed for free. So it has been a lot of activity. There have been positive discussions, and I think it's still a good market here. Next slide, please. We used to show you this slide, and I think it's important that you do so at every presentation we have to stress the quality of the tenants we have. The 25 largest tenants represents more than 40% of the rental value, but it's long contracts, it's good quality tenants. So next slide, please. The renegotiations. As we said before, we got the uptake with 11%. the first of January, and we extended last year a relatively large amount, unchanged terms, and we continue to do so. And on the ones we really have in negotiations, discussions, we are up about one and a half percent. So I think it's quite natural for us now also when we see the index may be up 6% for next year to act or to extend on those terms. So next slide, please. When positive trend of the occupancy rate, we have said this before, our goal is to increase this to 95. It will take some time. But during the beginning of this year, since we are increasing, And we're working with this. We have focused on the rental or the letting discussions, as you know, the letting work. So we are happy that we have a trend that is in the right direction. Next slide, please. We have since a couple of years given you this slide about the rental development in the existing lease portfolio. And it looks like this today. As you know, or we also said before, the Q2 was a little bit better than we said before, but that's mainly because of the parking income we had. So this is, you see this as a help to know what we see as what we know today and in the, as I said, existing lease portfolio. Next slide, please. There's a couple of years we try to show this picture of this slide to give you our view of what we know today about the rental development on the existing lease portfolio. And it's about what we know about the locations and regurgitations we've had so far this year and before. But there's no index. So you can add maybe another extra from the first year of equity. So it's just to show what is on the contracts today. I think the Q2 this year is a little bit better than, as I said before, than we said in the beginning of the year because of the incomes and the parking has been better than we expected it to be. So please, next slide. CapEx, this year, as I said, we will end up with approximately 2.9. And next year will be a little bit lower. I don't think I have to comment on this that much more. So next slide, please. In the project portfolio, the positive here is, for example, in quarter one, where we have now signed even more contracts. And I think this will be up to about 67%, almost 70% after the last signed contracts. hopefully we will have the whole house on that contract later this quarter it will be a little bit larger area but because it's a whole even the common area so we will be including that complex if well so only that will add quite a lot to the total so after that it will be out more than 75% I think in Clemmingsburg, they are moving on. It's less than a year when the Opera and the Royal Dramatic Theatre will move in. Posen 1 is still low occupancy rate here, but we have very good discussions about the contents there. So I feel very positive for all those projects, actually. Semaphore, we have to remember, that is our parking house. So that will be a little bit different. So we will now not have any signs. Next slide, please. When talking about our subareas, I'd just like to say some few words. We are on journeys. We are on a journey from, for example, in Arenastaden, the industrial area that was less than 15 years ago to what we are today. We know that France, the offices, and on top of that, we have more of Scania. We lost actually 50 million visitors, and it's owned, as you know, by Westfield. We have 2,000 people living in Arena Staden, and we're only halfway, as we used to say. We are on a journey. And in Håkanora, we're also at a journey. Five years ago, the Bilja facilities looked like, you can see here in the middle of the picture. Right now, we're halfway to the vision for 2028. We have the first accord, as we said before, Under constructions, we have the first 400 apartments that have moved in. We have the new Fertilio Foppilio. It's a journey. And if you go to the next slide, please. In Solna Business Park, we also have a journey, but with much more existing buildings. But during this quarter, we have opened a new food court, which increased the activities. In the area, we have new gyms, we have other facilities for an active life. We have signed a couple of new contracts with, for example, Miele and Mekonomen. And we have the hub for recycling. We have a hub for recycling. also here in Sørland Business Park. So a lot is going on. It's a journey. If we go to the next, also to Havande Sjöstad, I can say the same. It's a journey. We have been working with this for more than 20 years. It started as an industrial area, and it's now an area full of activity. We have some of the houses or the buildings that are old, that have been developed, but also a lot of new build. build both residential and offices. It's a really attractive area and it will continue. And as you know, we have a couple of future projects even here. And in all those areas, we are the number one of real estate owners. So it's really attractive and interesting areas. In Flemingsburg, the journey has already started. But the whole of Flemmingsberg started 60 years ago, when there were only 350 inhabitants in the area. Here you can see the first building. It's our building, Regulaarten, which was built in 1964. Next slide, please. You can see what we have today in Flemmingsberg. It's 15,000 workers, 15,000 residents. It's 80,000 students. It's the eighth largest student campus in Sweden, actually. And also here, we are now taking the next step for the vision of Flensburg, as you can see on the next, with the 50,000 residents, the 50,000 workers, and the 50,000 students. And we are right now in the planning process. It will not look exactly like this, but it's a vision of which direction we work in. Next slide. Here you can see that you know about the project in Alfa Laval, you know about the Royal Opera and Royal Dramatical Theatre project. We are now also, you can see here, a new, and we are talking about Regulator 3. It's an old building, the first in the area, as I said, where we now work and we will keep this. It will be developed and it will be part of the future Flemingsberg. So we will invest in even in this one, for new tenants, we have signed some new contracts, and to take this, modernize it. If you look really close to this picture, to this slide, you can also see that it's a new small light in this down, lower end of the slide, you can see a small, small building, which we have acquired during the quarter. It is a neighbor to the rest, and we thought it was important to have control over this for the future development. It's a small, it's an investment of about 20 million Swedish kronor, but can be an important part of that for the future. Next slide, please. We hear a lot about the residential market in Sweden, and it's tough. It's tough for many, especially in the now new projects, or almost very few very few, at least very few, new projects started. But the ongoing projects for Birgerbostad, they are running as expected. We have completed five projects during the period, and what maybe will surprise you, we have sold 21 apartments since the year end, and this is especially mainly in the south of Stockholm. In the joint venture, we have a Bravo at Hagenora. We have since the first of January sold 34 apartments and we now have only 10 left but if we had 418 when we started some years ago and we had no 10 left and to sell and 34 has been sold so in total we have sold 55 apartments since the first of january and with that one we're very happy and satisfied with and but it also means that if they're ready if they're ready to be almost ready to move in there's still a market for for residential apartments in Stockholm. And on this next slide, you can see also where, just to summarize, the building rights we have, both for commercial and residential. And talk about the construction costs. Unfortunately, nothing new, I would say. They're still at the same high levels as we saw a year ago. Some of them, for example, concrete Wood, some steel has been coming down. On the other hand, the weak Swedish kronors have impacted the price of electronics, for example, and some also on labor forces. But we see now more problems for the construction industry. We hope it will come down during the next six months, but still at very high levels. Next slide, please. Åsa, please tell us a little bit more about your sustainability work.

Yes. Sustainability continues to be a prioritized issue at Fabriken, and we are gradually working to contribute to more sustainable Stockholm. On the energy side, we have set the target to reach an average energy use of maximum 70 kilowatt hours per square meter by 2025. We are currently at an average level of 73, and the goal is to reduce this by one per year over the next three years. Part of this work involves investing in expanded solar cell capacity, and we are also investing in more charging points, which are being increasingly demanded by our tenants. Recycling is also a very topical issue. We introduced the circularity goal for the year, where at least 20% of the material in our projects must be reused material. One part of this work is our recycling hub in Sona Business Park, where we now collect and catalogue material which can be recycled. So far, this only occurs in Fabriquer projects, but in the longer term, we hope that this will become a more general marketplace for recycling. Next slide, please. Here, in this slide, you can see our sustainability house in Haga Norra. The sustainability house, which is constructed by using 70% reused material, has attracted a lot of attention. Technologies for retention and reuse are being developed, and we have a lot to learn from each other in the industry. And you can shift to the next slide, please. And for example, here you can see what different materials have been reused, everything from facades to floors, doors and cooling units. And finally, I will hand over to Stefan, who will say a few words about our social sustainability efforts.

We are summarizing that it's a special focus on Fleming's Glow and what we can do there to increase the trust, the safety, the comfort in working together with other real estate owners, together with the local community. And we are especially focusing on education, the employment and on the leisure time. And there can be activities in sport, in dance, for example, in culture. We have a really big project with the opera. We call Children at the Opera. We had a festival two weeks ago for the young people with the music, and we're helping the schools. But I also can say that the Tallang Academy, which is going to get people out to work, last year helped 62 people, I think it was, to work or to start studying. And that's really made a change for the local community. So please, now time for questions or comments. So please.

If you wish to ask a question, please dial star five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial star five again on your telephone keypad.

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

Hi, good morning. Thank you for taking my questions. Could you provide a bit more color on what your expectations are for market rental growth? I mean, looking at your numbers last quarter, you were signing some leases at roughly 4% below ERV, but then now it's flipped to 1.5% ERV. Is this reflective of the market or is this more of a sampling issue?

I assume you mean renegotiations, which was slightly negative last quarter and which was slightly positive this quarter. I think last quarter we said that those renegotiations that went minus were dominated by a few contracts on the retail side. And those renegotiations that we have done in the second quarter are mainly just ordinary office rental agreements. So I think the plus 1.5% is more or less zero, which is also what we have communicated before, that we are quite happy just to prolong contracts according to existing terms, which means that there is not really any uplift. But the figure 1.5% is, of course, on the positive side. But on the other hand, there's only a small amount of contracts being renegotiated. More contracts are just being prolonged on existing terms.

Okay, that's clear. And then that essentially means that your reversion in your portfolio is currently zero after the indexation.

I think, as you know, we've got the indexation of uptick of almost 11% from the 1st of January. And now they're expecting the inflation of about 6% for next year. And so I think we have a good rent level now that I think is also the market rents. So some contracts may be still under-rented, but also maybe some that are over-rented because of it. But in general, I think it's a good rent level, and we continue to see the good stable market in Stockholm.

Okay, perfect. Thank you. That's clear. Maybe on the Nöten 4, what exactly does the LOI depend on?

Sorry, I didn't get your question. What exactly...

I mean, it's only an LOI at this point in time, so it's not converted to an lease. Is there any conditions that needs to be met?

We have some discussions to finish, and we will sign the contract during Q3, the lease contract. But we'd like to announce this because we draw the net from the market, and we also had to say no thank you to some other potential tenants. So that's why it was important for us to announce that we have an LOE and that we're going for signing a contract during the lease agreement during Q3.

Okay, fair enough. And in your report, you mentioned that the new approach is being adopted and that the investment will be adjusted. Any quality you could provide on which direction the total investment will go and anything that could be set on yield and cost after this adjustment?

Regarding net and for?

We will announce more figures when we also are announcing the tenant and the contract. So we will give you all information at that time. So today we will not say that much more. But it's included, you can say also that we have, when you look at the investments, we are, the capex for 2024, for example, for about 2 billion, it will be... I think it's around that anyway. There's so much we can say.

Okay, perfect.

Thank you. We can maybe add one more thing about Natan for since there's been some rumors that the potential tenant is only going to be there for a very short time. And so we confirmed earlier today in the Swedish call that it's a long-term contract. It's not a temporary contract.

The next question comes from Kaonator from GS. Please go ahead.

Kaonator from Goldman. Thanks for taking my questions. Just as a quick follow-up on Noten, I think if we calculate the yield on cost from your development pipeline, it's around 5%. Is that bullpile the number or is that number going to evolve? I appreciate you want to comment on the latest conditions, but just be good to comment on that number that is from your release. First question and why don't we start by that and then the second one.

I'm sorry, but even here we like to say we give you more figures and we give you more details when we have signed the contract.

OK, so we shouldn't rely on the on the existing parameters from that slide at this stage, but effectively we should understand.

Yeah, as long as nothing else has been said so yes.

OK, second second question if I may just to to follow up on the interest coverage and the increase in. interest costs, given the hedging that you have also in place, how should we think about the interest coverage ratio? It's 2.6 concurrently for half year. How do you expect that ratio to evolve? Is it going to go down a bit further? And what are the rating agencies tell you about the sort of threshold that you need to maintain not to be downgraded, given you're already on negative watch? Thank you.

I think we can expect the ICR to continue to come down a little bit more. We expect it to be above our own internal target of 2.2 over time. We haven't really had any... in-depth discussion with Moody's regarding rating triggers. They are not announcing any specific rating triggers, but they put the negative outlook on FABG in November, and one of the concerns was the ICR. So we have said earlier today also that it's not unlikely that we will have a downgrade, but we still believe that we will remain on investment grade.

Okay, fair enough. Is there anything you... How are you thinking about this ratio? What do you think? I appreciate you have an official target, but how are you thinking about making this ratio? I appreciate everyone has targets sometimes. People can have temporary leeways to that target. You think it could be acceptable for a while that this ratio could be lower, or how are you thinking about There are different ways that we can work.

One is on the financing side, depending on how much we work with the capital market or going over to bank, which is today cheaper. That's one thing. Another thing is interest fixing using swaps. and the possibility that we have there. Also, of course, reducing the balance sheet by selling properties can be one option. Another option is to work with the vacancies and the daily business to make sure that we are not losing income, but that we are actually increasing the income. And one important part of that is the ongoing projects. and of course natan is an important part of that but there is a potential of more than 350 million just in the project portfolio and another 150 million in rental income from reducing vacancy to a more moderate rate where we have been historically

I think it's also important to stress that part of the project portfolio where, for example, Open Under Martin, it's less than one year before they were moving in and occupied. And it's now non-yielding, so no cash flow in. So there will be step-by-step also from the project portfolio better cash flow.

so is it fair to assume that that the first instance is just to uh obviously to to you know they make that pipeline come to come to market try to increase occupancy so those are the two main priorities of course um are you thinking that at this stage you know you you're thinking about disposals is that too early are you first thinking about

know operational improvements how are you thinking about the sort of priorities within the the you know the number of tools that you've given us uh in the past and for many many years we have support from time to time been selling some some properties that we think are fully uh we we that we think that some some maybe someone else can be a better owner We think we can use the capital maybe in a better way. We are from time to time buying some problems that we're adding to the portfolio, and we will continue with the same strategy. So from time to time, we will see ourselves, yes.

Okay. And are you actively doing that, please, or just too early or not there?

I mean, we will communicate when we have something to communicate, not before.

Okay, fair enough. Appreciate it. Thank you so much for your help.

The next question comes from Paul May from Barclays. Please go ahead.

Hi, it's Paul from Barclays. I've got three questions. I'll probably take them one by one. On the property values in the commentary, you seem to be a bit more confident or seem to think the values have dropped far enough given the commentary in there. I'm just noting your property yield of 4.17% is well below levels where property yields were when swap rates were at current levels previously. I think previously you were up at sort of 5.9%, 6.7% in 2005 and 2010 when swap levels were at similar levels. I appreciate we've got some inflation at the moment, but that's not coming through in market rents from what you're saying. So I just wondered what gives you the confidence that the property values and the property yield at 4.17 is the right level? And could we see further pressure on that, particularly given the recent move in swap rates over the last couple of days? Thanks.

We think, of course, that is the right value today, and especially once we have 60% external value and the rest internal value. Will it continue to be under pressure? I think we have to expect it to do, because what we see in the interest rate market right now with uncertainty and also moving up, maybe there will be more upticks in the yields. Can't say no. And I also, but what we have, that the Stockholm inner city and the Stockholm CBD, it's a strong market where we have a lot of pension fund money, pension funds. So it's difficult to say how much, but the increasing... interest rates will, in my view, at least mean risk for increasing yields. So I think that's the view we have. But we try to be very transparent. We try to be in the forehand when you're working with so much external valuation each quarter here.

I very much appreciate your openness, shall we say, and disclosure relative to potentially some others. Just on the second question, the renegotiations that you've had in the first half, Are those renegotiations on leases that saw the 10.9% CPI uplift, or did they not see that uplift because they were being renegotiated quite soon after? Just trying to sense, is the 1.5% increase that you noted on top of the 10.9% CPI, or is there some adjustment that we need to be aware of?

That's correct. This 1.5% are reflecting renegotiations done during this year, so after the uplift of the 11% of indexation last year.

And also to stress maybe one more time is that since we see so much the inflation and we see the uplift because thanks to the indexation, we prolong a lot of the contracts without negotiations right now.

Yeah. And just to follow on this more general quick discussion, a bit more detail if you could. Most companies are looking to get secured bank financing at the moment in most markets. Sweden's not alone in that. We're hearing in other markets that negotiations are taking a long time, much longer than previously. Banks are being more selective over the properties that they provide security on, given they've got access to pretty much all properties. But also we're hearing that while they are open, the size of deals, so the size of the lending and the debt that's being provided on each individual deal is much smaller than it was previously. This is in other markets. I just wanted to get a sense as to, in Sweden, is it all operating as it was or are we seeing similar issues