Fabege AB (publ)

Good morning and welcome to FabG's Q1 Report 2026. My name is Bent Austa, I'm the CEO of FabG and with me today I have Åsa Bergström, our CFO. We run through some presentation first and then we go over to a Q&A after the presentation. Just a short recap from last quarter. We still own a modern portfolio with focus on Stockholm, occupied by high quality tenants. And as you all know, we own, we develop, and we manage our properties with in-house personnel. We are focusing on creating attractive working places and a good living in superb locations in Stockholm. And as you also know, very much aware of, that's the best growing region in Sweden. Our rental value at the end of Q1 is 4.4 billion in the portfolio, and the number of square meters is 1,300,000 approximately. The property value is at 78.6 billion at the end of the quarter. Just to go through again some of our strengths in the company that I see after my first month. It's definitely our customers. We have a very high customer satisfaction index. It's highlighted there by strong track record in serving our customers' needs, and that's important also going forward and in all our renegotiations. 95% of our tenants say that they would recommend FabG as a landlord. That's positive for us, and we have to keep that number up. And we have long-term lease contracts as a foundation for our business with our customers. We have our own staff across the entire value chain, meaning we have property caretakers, we have the leasing departments, we have the project team, it's everyone employed by FabG, and we even have CFO and CEO in the company also. That's great. Our properties are in clusters, giving us some advantages. I really see a lot of economies of scale like that when we are doing the management of them, and it makes it possible for us to create engaging meeting places in our portfolio, and that's important also going forward. We have an excellent capabilities to deliver large and complex projects from start to finish. We have done that several times and we will do it in the future as well. So if you then go to the Q1, just a short summary, positive numbers on most key figures, rental income, surplus ratio, profit from residential development, and net letting, all positive, and I more or less flattish on the value change. Also, I will come back to those figures later on. On the positive, very good positive side, we have signed a lease contract with Stockholm Sjukhem for an elderly care facility in Haga Norra in Arenastaden. They sent out a press release yesterday with that. It was signed in Q1 and are included in our figures. Permobil has also moved into Arenastaden. That makes us a little bit pride because they have consolidated all its operations from Greater Stockholm to one location in Arenastaden. It's a very nice premises there. The vacancy rate is unchanged from last quarter at 14 percent. Then also,

Thank you very much. So I will go through the figures in a little bit more detail. As you can see here, the rental income came in at 892 million Swedish crowns. That's an uplift of 27 million in comparison to last year. We have a negative impact from identical portfolio relating to negative net letting from the previous years. We also sold one property in Lingen, which we had some income from in the first quarter last year. But on the other hand, we have a lot of new income from finalized projects during last year, for example Saab, who occupied in Q4 last year. The net operating income came in 39 million above last year. We had higher winter costs, but on the other hand, we have managed to reduce property tax and also some lower maintenance costs. And that meant that we had a surplus ratio of 72%, which is really, really good for a first quarter. We could also see that there were some finalized apartments in Birger Bostad that contributed to an income of 172 million and also a surplus of 40 million. And in total, that also contributed to the income from property management, which ended up at 370 million. So that's almost 30% up from last year. As Bent mentioned, we also saw some negative value changes. I will come back to that very shortly. And we had some positive impact from value changes in the derivatives portfolio relating to higher interest rates. Tax is only carry-forward losses, so it's not paid tax. The big positive amount from last year was related to the sale of Ynglingen and reversal of tax in that case. Property valuation, we ended up with a property value of 78.6 billion. We have externally valued 44% of the portfolio. The average yield in the portfolio was unchanged at 4.59% from year end. But there were some changes in the city properties, a little bit reduced. But on the other hand, in the sub-applications, we saw a little bit higher yield in the valuations. So here you can see a split from value changes in the management portfolio, minus 191 million, and value changes in the improvement and product portfolio of minus 68 million. You can also see the division between the different market areas where both residential and inner city provided positive value changes this quarter. The key ratios, not so much change, but equity per share, as you can see, came out at 120 crowns per share and the NRV at 145. We saw a positive total return in spite of the negative value changes. So plus ratio, as I mentioned, which is the best I think we have ever reported in the Q1, actually. Equity ratio and loan-to-value ratio remain at the same level as the year end, but we also saw an improvement in the debt ratio to 13.1, and I don't know if you're familiar with the target that we have to be below 13, so we are very close to that target now these days. On the financing side, the year started really, really strong. We saw very, very good access to financing from both banks and from the capital market. We also saw reduced margins, especially in the beginning of the year. It's been a little bit more volatile after the conflict in the Middle East started, but we still see that we have very good access to financing. We were lucky to do some bond issues in mid-February where we could come out on three-year maturities at around 84-85 basis points. We did another bond issue last week where the same three-year maturities came at 97 basis points. So I would say that we are more or less back to the levels where we were at the year end. The ongoing refinancing with the bank facilities is according to plan, so we are moving some securities, changing some securities, which has taken some more time, but everything is according to plan. And we still have the undrawn facilities of six billion, which is good for us and gives us a lot of stability looking forward. The average interest cost came up a little from 2.82 at the year end up to 2.85. It's actually been below 2.80 at some time during the quarter, but higher STIBER is of course reflected in these figures. A little less than 50% of the portfolio is fixed according to plain vanilla swaps. And if we include the callable swaps, the fixing rate is nearly 70%. You can see also that the older swaps are at very good levels, most of them, so they are, of course, contributing to the positive cash flow for Fabi Gea. Higher Stiber has had a little negative impact during the quarter. On the other hand, when we are Refinancing debt, most of them come in at lower margins than we had before. Most of those debts are signed three to four years ago at margins that were at that time higher than what we see today. So that will continue to have a positive impact. Also, to conclude, a few words on sustainability. Energy consumption remains in focus. We were very, very lucky last year with a mild winter to come down at 65 kilowatt hours per square meter. This year, we've had a much more wintry, lots of snow, much colder, but the 23... Kilowatt hours per square meter as you see reflected in Q1 is actually the same figure as we had last year. So we are on a good level also for that. Now, last week, here in April, we actually sold the recycling hub that we have produced to Rang Cells. The hub was in itself established in 2023, and we have used it for most internally to... reuse materials that are taken from one property into another property. And the idea from the beginning was to ensure that we can scale up this business, and with rank cells and a number of other property owners also connected to these rank cells, this will be a system that can have a lot more impact going forward. So I think that's what I'll say for now, and I'll leave that to you, Bent. Thank you.

So if we then move on and look into the occupancy rate, it's at the same level as last quarter, and it's, as we said then, including the previous projects, Accorded 1 and Posen 1, that was included in the portfolio from year end. As I mentioned earlier on, in the beginning, Pahen Mobil has moved into the properties, into our portfolio, and as I mentioned earlier on as well, Atea is moving in at 1st of April, so that will be reflected in the second quarter. We also have an improvement portfolio that's properties partly or fully vacated for potential project development. It's 102,000 square meters of which 31,000 is let out. They are properties for future projects for us. Look at the net letting in Q1. It's ended at a positive of 24 million. New lettings ended at 69 million and terminations at 45 million. Some of you have mentioned in different reports that Max Mathisen will terminate the lease with us. They haven't terminated it yet, and as you all are aware of, there are some special Swedish laws around that, so we include the figures when we have a termination or when we have a signed contract. So normally we will not comment on these speculations, but we have read that in the press as well, and we think they will move, but just to point out, it's not terminated yet. That said, we would be very happy to have Max Mathisen as a tenant. We have had them for a long time, and they are a good tenant. On the other side, it's maybe also good that they are moving out of that building in this time. I don't want to comment much more on that right now. When it comes to the renegotiations, we have renegotiated for a total of 100 million in the quarter. and 104 million of the maturities in 2026 and onwards has also already been renegotiated. So if you then dive into the renegotiated numbers of 100 million, the rents are minus 0.4% of that, 65% extended on unchanged terms, and 35 million with a small decline. That means that the reduced yearly rent is 375,000. So it's more or less flat-ish. As I said, the renegotiated rents are still above the estimated rent levels used in the external valuations, so we are quite happy with the renegotiation we have done. They have been dominated by several smaller tenants. Only one contract is above 1000 square meter in the quarter. So this is back to what we also said before. It's the bread and butter that's been renegotiated this quarter. New leases is a mix of all kind of categories. We have two contracts above 10 million in yearly rent and the rest are on the smaller side. So if you see all these figures divided by the different areas, Stockholm inner city is 59% of the renegotiations, Solna is 29%, and Hammarby Sjøstad is 12%. And it's a note on the Solna figures, it's not included, the Stockholm Sjukhem contract is not included in these figures. It's in the figures, but not in the percentage for each area. The new leases is also divided by the same area. 36% in Stockholm, 49% in Solna, and Hammarby Sjøstad, 14%, and Flemingsberg, 1%. What we find very healthy for us is the mix of renegotiations and new customers. Saab is, from early days, a large tenant for us. They have signed also a new lease in another building. So we are very happy with that. And we have Atea has signed some more areas and Skistar has moved within our area. Willem is a new tenant. So we have a nice mix of different customers this quarter. That also underlines what I tried to comment on in my CEO letter, that we see decisions being taken, especially in the smaller, more or less better leasing. So this is the rental development, and it's just to point out, it's only for the existing leases that we have in the portfolio at the end of Q1. So if nothing happens, the rental income will be like this. But we have higher ambitions, and we want to improve this throughout the year. One of our key strengths is our customers, and we have very long agreements, lease contracts with them. On the right side, you see the 10 largest tenants. They account for 30% of our contracted rent, and we have a vault of close to 10 years for those tenants. And that's more or less the foundation. And the 25 largest customers represent 43% of the rental value. And in total, 700 customers, so it's a busy, busy day for the leasing department within Faberge. On the project side, ongoing projects, we have Faro Cairo. It's taken a decision to invest up to 613 million. We have dismantled the existing buildings. Ground and foundation work are on the way. And we are doing the preparation for construction documents to the municipality, et cetera. So we have taken the decision to do construction work up to the ground floor level. It's just 20 meters from the new metro station arriving in Arenastaden. We have Vennigren Center, an investment up to 609 million. We are doing the facades, the roofing, and also doing the refurbishment of the different floors. If you have visited Stockholm or if you live in Stockholm, I'm sure you've seen it. You see the building from all over the city. It's pre-lit 30% and marketing to be started now during Q2 2026. It will be finalized and moved in in second quarter 2027. And a new project on this list is the project Mimer 5. It's 100% pre-let on a long lease to Academedia. That's a school building investment up to 217 million and a rental value of close to 50 million. It will be finalized next summer, summer 2027. So that's ongoing projects. In the ongoing projects within Birger Bostad, we have talked about this also last quarter, but block five is then progressing according to plan. It's a total of 288 units. Completed in 25 and Q126 are the cooperation Alma, 23 apartments, 20 are sold. The three remaining are used as showrooms when potential buyers are visiting this area. We have produced and rented out 78 rental apartments and 50 owner-occupied apartments have been finalized, of which 47 are sold. Possession to the final owner during Q1 was 42 of the units. So five is still to be delivered there. Also to be completed in 2026, that's the Cooperation Residential. It's BRF Matilda and Inga Torja, 137 apartments in total, which actually this morning, 60 are sold, but he said 57 that was yesterday. So it's a good area. It's progressing according to plan. We have the last block there in the next phase. It's block four. We are doing the construction work or are handling up the construction work in these days. Looks promising. In total, 132 cooperative apartments there. An investment of approximately 350 million, and we have 260 rental apartments, elderly care facility, as I mentioned in Stockholm Sjukhem, and a preschool, and total of close to 20,000 gross lease bill area in block three coming up. That will be an investment up to 860 million. Estimated completion for the whole Haga Norau, block four and three, will be end of 2029. We also have the land allocation at Sveaplan. No more is totally agreed there. Possession date will be mid-June 2026. Building rights, 8,800 square meter gross area. And the purchase price of 210 million. Plan moving there could be in during 2029. And this is definitely one of FABG's core areas. And that's the entrance to Stockholm inner city. As you see on the picture on the right-hand side, you see in the red lines, that's our existing portfolio in this area, and the purple one is the new building in Sveaplan. In addition to this, we also have the quarter with the Mimer, as I just mentioned, the school is also in this area. So in total, we have more than 100,000 square meter gross area in this area. We will have office, co-working, ground floor activities, food and beverage, high class conference center, looking into different training facilities, et cetera, all kind of services in this area. So this will be important for us. We have high ambitions here. When it comes to our building rights in our balance sheet, we have commercial building rights of a little bit above 500,000 square meters. 65% of them are legally binding, and it's booked at 8,100 per square meter. And the residential building rights is 445,000 square meters, approximately 43% legally binding. Also booked at the same price per square meter. As you can see, the reduction, there are some reduced numbers from last quarter, and that's more as we did last quarter when we took down, when we had terminated the land allocation in Flemmingsburg. We have also looked over the building rights in the same area and reduced those according to what we think is most likely that we will develop. Of the project opportunities in the near term, we have the Faro Cairo, just mentioned, 77,000 office gross leaseable area. And there we also in the same area have approximately 500 units of residentials. And in phase one of the resits, there will be 185 apartments in one of the far-off buildings. And Haga Nora already produced 519 units. In production, 187 units and another 390 units on the way. That also includes the elderly care facility that we have mentioned several times now. We have the Tegeterrassen in Vesterakungsholmen. That's 36,000 square meter office. It's partly demolition has started during Q1. And we see nice interest in the market for this building. A handful of good discussions. So also high ambitions there. There will be more decisions taken just after the summer in this building. Solna Business Park, we have the Parkhuset, that's an office building. We have the land allocation, 22,000 square meters, and we have Yrket next to it, the one in the red line, 320 residential units. These are a little bit on hold just because the other building marked there with the green roofing has to be finalized before we can start doing a construction work on our plots. But they are on the way. So to summarize up, our short-term priorities, also long-term priorities, is definitely to decrease the vacancy, is to continue to be a preferred partner for our customers. We have to be always available, accessible, and try to be solution-orientated. We have to secure value creation in our ongoing projects. It's important when we are starting projects and we don't have the final tenants already in place, we have to do some extra work there then. We have to analyze our land bank, like we hope you can see we have done the last quarter as well, and made this elderly care facility, have to look through it and try to create value for both our customers and our investors. We will continue to be active in the financing markets. As Åsa mentioned, we have already done some work there during the second quarter, and we're always looking for opportunities to further develop our company. And then, conclude our presentation, and we go over to the Q&A.