Fabege AB (publ)

to our presentation for the third quarter 2024. The first slide you have seen before, it's about the focus we have on Stockholm, that we only have 100 properties from Storaplan to Flemingsberg. We have a little bit more than 1,000, 1 billion square meters and a total value of 79, 58 billion. And as you know, I've seen in the report, the valuation this quarter was positive. During the quarter, we had the pleasure of officially welcoming some positive happenings and developments. We have welcomed the Royal Swiss Opera and the Royal American Theatre to Flemingsburg. We have opened a restaurant in Regulaarten in Flemingsburg. We have started the tenants to move in to a quarter in Hagenora. The garage in Hagenora is finished and so on and so on. The list can be quite long. But with that said, there are also some challenges. Next slide, please. You see some of the figures for the third quarter. We have almost the same level of rental incomes, even after the divestments we made in 2023. For the first nine months, we have increasing and rental incomes and in the like for life you can say the incomes increased about five percent for the first nine months and the surplus ratio is a good very good very good for the third quarter it depends of course on the weather for the for the nine plus nine months it's at the same level And as I said, of the seven quarters of negative value changes, we had a positive small one, but a positive one in the third quarter. And we will tell you more about the figures later here. And I can also say for the third quarter we saw as a whole lower interest rates. We had a stronger Swedish krona and that of course has been positive for the market. But we will start also to go a little bit deeper into the figures, so please.

Thank you Stefan. Yes, rental income amounted to almost 2.6 billion, which is slightly higher than the previous year. It decreased due to property divestments. As you mentioned, Stefan, last autumn was offset by indexation increases and the taking of possession in previous project properties. And since this summer, the Swedish Royal Opera and Theatre have also moved into Flemingsburg. In a like-for-like portfolio, income increased by 5%. Expirating costs are in line with the previous year after a strong third quarter with a surplus ratio of 77% in total. The surplus ratio for the entire period ended up at 75%, the same as the previous year. Bostad's gross profit loss amounted to minus 17 million, with two projects completed during the period where the final recognition occurred. Excluding administration costs, the profit came in at plus 3 million. And total central administration amounted to minus 80 million. With falling market interest rates, interest expenses decreased in the third quarter. Cumulatively, net interest expense was in line with the previous year. The average interest rate was 3.16% at the end of the quarter. Lower market interest rates are gradually having an impact, and our active work with interest rate derivatives have delivered good results. In addition, loans are now being refinanced at better and better margins. The result in associated companies amounted to minus 57 million, of which minus 71 million related to the capital contribution to Ariana Bolaget. and 11 million related to a profit from the JV project in Haga-Norra. And we therefore reported profit from property management of just over 1 billion, approximately 100 million lower than the previous year. Impairment of development properties relates to a change of value of residential building rights in Bioborstad. Realized changes in value amounted to almost minus 1.2 billion after we reported a positive change in value of 224 million in the third quarter. I will come back to this very soon. We also reported a small realized profit of 4 million, which related to a time lag from the transaction with NREP last autumn. As a result of falling market interest rates, the surplus value in the derivative continued to decrease in the third quarter. In total, the surplus value decreased by 444 million during the nine-month period. And finally, the tax expense, which related to the deferred tax only, was positive and amounted to 30 million. Next slide, please. Yield requirements leveled off and were essentially unchanged during the quarter and even slightly lower for a few of the most central properties. However, the average yield requirement remained at 4.54%, same as last quarter. In the quarter, we have once again independently valued a large proportion of the portfolio, approximately 45%. The rest of the properties have, as usually, been valued internally. Since the values peaked in Q3 2024, we have written down the property value by approximately 15% in total. In Q2, we reported a small lagging impairment of minus 80 million. And now in Q3, there has been a turnaround and we have revalued the properties upwards by 224 million. The total change in value for the entire period amounted to minus 1.2 billion, and we are now reporting a property value of 78.2 billion. In addition, there is a property value of the development property portfolio in Birjebostad of 0.7 billion. Next slide, please. Reported equity was unchanged from the previous quarter and amounted to 121 crowns per share. And the long-term EFRA NRV amounted to 147 crowns per share. The equity asset ratio amounted to 46% and the loan-to-value ratio was 43%. Both of these key performing indicators confirm our continued strong balance sheet. The interest coverage rate has strengthened slightly and amounted to 2.5, which is in line with year ends. Please turn to slide financing. The access to and pricing of financing has continued to improve. This applies to both the capital market and banks. even though the biggest improvement has taken place in the capital market with significantly lower margins. The commercial paper market is continuing to function well. We have lowered the margin in a couple of steps and are now issuing three months commercial papers at 40 basis points compared with 70 basis points at year end. And as stated, the bond market is functioning well. We have been active through several issues, both before the summer and in the autumn. Since year end, the outstanding bond volume has increased by 2 billion. The margins have continued to improve. Examples are a two-year bond at the margin of 82 basis points and a three-year bond at margins just under 100 basis points. Undrawn revolving credit facilities and unpaid term loans amounted at the end of the quarter to 8.5 billion, of which about 2.4 billion was used for repayment of other loans after the end of the quarter. Overall, we continue to have a good preparedness for upcoming financing needs and refinancings. We have facilities in place to cover the upcoming loan maturities. In total, we have bond maturities of 2.7 billion in 2025, of which 2.1 billion matures during the second half of the year. We intend to refinance bond maturities with new bonds, whereas the bank facilities are continually refinanced through extensions. Next slide, please. Of the loan portfolio, 54% is fixed, mainly based on long-term maturities and most through straightforward interest rate swaps, supplemented by some fixed rate bonds. During the autumn, we have replaced maturities with several new long straightforward interest rate swaps with maturities of five to seven years. Approximately 45% of the current loan portfolio is matched by fixed rate terms beyond 2025. In addition, there are callable interest rate derivatives of 7 billion In total, that now looks to set to continue running. Straightforward interest rate derivatives run with a fixed interest rate between 0.11 and 2.18%. And the callable interest rate derivatives run with an interest rate between 1.82 and 2.5%. The average fixed term amounts to 1.8 year and adjusted for the estimated maturity of the callable swaps, the fixed rate term increases to 3.1 years. Our interest rate strategy provides predictability. Fixed rate terms provide protection against rising market interest rates. Now, however, we believe more in falling market interest rates. The levels that we have been able to fix at now, both for straightforward interest rate swaps and callable swaps, are levels that we think work for us even in the long term. For a moving 12-month period ahead, an increase in the market interest rate of 1 percentage point will generate a higher interest expense of approximately 148 million, all else unchanged, and a corresponding reduction of the market interest rate of 1 percentage will generate a lower interest expense of 91 million. The average interest rate was 3.16 at the end of the quarter, and it has subsequently fallen slightly after that. And now back to you, Stefan.

Thank you, Åsa. So please go to the next slide. A year ago, a lot of the questions were about the financial market, and as Åsa said, we feel that it's very stable now. And there were also a lot of questions about the transaction market. During the whole period, the transactions that has been made in our market, has been made on very good levels, and are supporting also the valuation we have had, and with that we have. The last quarter, we have seen some transactions within our markets, for example, both in Sorna in the city and also in the CBD. But last week, they were really one of the largest ones announced. It was at Pallastam, acquired from AMF, the pension fund, the fifth Høytorget in the middle of the CBD in Stockholm. They acquired it for 2.8 billion Swedish kronor. It is 16,000 square meters of space area, and it's but they have also to renovate it in the future. So I think that transaction is equating in many ways. But as we said, the transaction has to be made in the Stockholm market, and supported more than well by our variations. If we look at the office market in Stockholm, next slide, please. Here you can see that the total market of office space hasn't been growing that much over the last almost 15 years. It has been changed since many of you have been visiting Stockholm and Seenholz, in a Brunke Bay store, for example. We have office space that has been, today are the hotels, we have some other uh transformation has been done but the the new building has been mainly but made by us for example in sauna new modern office space and if you look at the next slide please um you we have some more figures on the how the market has been developing you can see that we know that the rents has been improving or up to very good levels or at record levels. We had a number of employees that during the same period have been growing, but the last quarters we have seen it stabilizing or even at some small, coming down a little bit. The vacancy rates have been stable, but have been coming up the last year. But as you said, very few new spaces are coming to the market. So this means that the square meters per employee has been decreasing. And I think that's also the trend we will continue to see, that we are using the office more efficiently. We have seen during a period some companies continue to downsize. Mainly also because of the economy. If you look at the next slide, please. We have our largest tenants. We know that the ICA Ontario has been working with the operations to make it more efficient. And last week, last Friday actually, we got the message that the convent of filing for Chapter 11 What does this mean for us? We can say we feel very confident that we have the best areas for the 4K working that they had in Rottinggatan and Kungsgatan. We have discussions with them going on right now. We will inform you more when we have something to tell you. But the conventions are have a very good operation, but has been taking a little bit too much risk, in my view, at the same time. So that's also why they're now having those discussions for chapter 11. But both Konskatan and the Rottengatan space are doing well, as we know what we know about. But this we have to follow up, of course, later on. Next slide. Netlifting. That's a disappointing figure. I said that last quarter, and I will say it this quarter too. Unfortunately, we have a minus, even this quarter, of about 11 million. We have, for the first nine months, 85 million. The last quarter is two small new contracts signed. We have also a net effect of the work we're doing now with the Vandegrind Center. which we have to vacate for, among other things, replacement of the facade. In this quarter, I think it's about 7 million negative. But we have two new contracts signed. Everything takes time. We have a lot of, as we said before, a lot of good discussions. We have a lot of good showing and interest in the market, but everything takes time. And unfortunately, also part of the game right now. But we probably will get some questions about that later on too. Talk about the renegotiations on the next slide. As we said before, many of the contracts we just extend on unchanged terms. We are... set away within the levels we have the contracts on uh the ones we're negotiating this uh so far this year 60 million we have about two percent negative uh decrease your contract with two percent but uh many of the contracts also has been very uh already been negotiated so um We think most of the contracts are market levels. Some, of course, still we have a potential in, but also some of them, as we said before, are over-rented. The occupational rates are negatively impacted by the negative net letting we have had even some years ago. And we haven't seen the positive effect still yet on the projects. coming up, but we still have the goal of coming up to 95%, but it will take longer time than I hoped. Today we're right a little bit lower than 90%. This potential, as we said before, about 150 million in incomes, This next slide, you have seen this before, we try to show you how the rental development will be on the existing lease portfolio for the next four quarters and this is taking into account both the uh in what we know about the people moving out of companies moving out and also the people moving in so so this is the best way so now i guess a q4 2025 with an effect also among i think uh alpha for example at the beginning of especially beginning of 2026 but we will show you that next quarter investments coming down and we will still we have some of the large ones in going on but especially for 2025 we're seeing this investment in the portfolio and for new products coming down on the next slide you see the projects accorded awesome regulator separator and earthen are the ones we are have an ongoing right now. Some of them are quartered, or the company or tenants moving in right now. Portsen, the same. We have handed over the key to some of the first tenants, but it will be in the beginning of next year. And separate often, it's only maybe more than six months to Alfa Laval will move in, and a year to Saab will move into Britain. So it's moving, and it's moving on. I think also maybe it could be interesting on this to see that when those projects are finalized, we will have another six million whether we generate the cash flow. That's today not cash flow positive, although we are still under projects. Next slide, please. Birger Bostad. We had a residential project in Hagenora. It's ongoing. It's in total 288 apartments, of which 78 rental apartments. We have started during the quarter to sell them. Here we have nine of the first 23 sold. I think today I can say we can add a couple of more sold. And we have a very good interest for the project. So I think I'm very positive to how this will continue to develop. Also, a little bit about the sustainability and what we're doing there. And what feedback we're getting from both the market and some