Fabege AB (publ)

Good morning and welcome to FABG's Q3 report 2026. Together my name is Bent Ørstad and I'm the CEO of the company and together with me I have Åsa Bergström our CFO and we are also so lucky to have Viktor Byrenius from Pareto together with us in the studio as a moderator for the questionnaires afterwards. With that, we kick off today's presentation. And I always start to repeat just a short glance over who Fabege are. We have a modern portfolio with focusing on Stockholm, and it's occupied by high quality tenants. We own, develop, and we also manage all the properties with focusing on creating attractive working places and a good living in the superb locations in Stockholm. So, our key strengths that's always important for us is our customers. We have a very high consumer satisfaction index, and it's highlighted by strong track record in serving our customer needs. 95% of the tenants say they will recommend FabG as a landlord, and that's important for us in the daily work we are doing all the day. We also have the long-term lease contracts as a foundation, and I'll get a little bit back to that later on in the presentation. We have our own employees across the entire value chain, and that also gives us further advantages. While all the properties are also located in clusters, it gives us some economies of scales. We have the opportunity to create engaging meeting places, and by that I mean more or less focusing on creating the 15-minute city in all our core areas. We have excellent capabilities to deliver large and complex projects from start to finish. We have done that several times and we will do it forward as well. Right now, the larger projects are a little bit smaller or less than it used to be, but we have the projects in the portfolio. And we also have strong capabilities and we are best in class when it comes to ESG initiatives and environmental results. That's also highlighted by our customers in different surveys. So if I just look at the Q3 numbers separately, not year-to-date figures, only the Q3 figures, the net letting ended at plus 55 million for the quarter. We're happy with that result and the rental income increased by 2.3% from second quarter to third quarter. The surplus ratio for the third quarter was 76%, and profit from our residential development ended at plus 33 million. And year-to-date, it's 112 million from the residential development. Value changes from the property portfolio, Åsa will get back to that a little bit later, ended at 259 in the quarter, and the occupancy rate stayed at 87%. And during the quarter, we also made some changes to the executive management team, and everything, according to that, is booked in our books and the P&L this quarter. So with that, Åsa, I hand it over to you.

Thank you, Bent, to go through the P&L income statement. The rental income came in at 2.7 billion. That's an increase of almost 4%, divided into separate items. We had a negative rental growth in the identical portfolio of minus 1.2%, relating to previous year's negative net letting. On the other hand, we had a positive impact from projects that were finalized during last year and the beginning of this year, contributing with approximately 132 million Swedish crowns during this period. The net operating income as mentioned from the residential development came in at 112 million and the net operating income from property management at almost 2 billion as you can see here in the P&L. Central administration was in line with last year, 78 million, and the net interest expenses increased a little bit to 741 million, mainly due to higher cyber during the year. ground rents in line with previous years and the share in associated companies also decreased to minus 82 million of which 74 million minus 74 million is related to Arenabolaget and roughly 9 million relating to a transaction of building rights residential building rights within Birje Bostad. And thus we saw in total profit from property management of 1.166 billion, up around 11% in comparison to previous years. As Bent also mentioned, we see unrealized value changes of a total of 120 during the year. We have had now two quarters of positive valuation uplift. And also this quarter, we saw a value uplift in the derivatives portfolio relating to increases in long-term interest rates. So a profit before tax of 1.4 billion. And the tax came in at minus 225 million, also impacted by some positive items relating to a transaction previous in the year and also the valuation of some carry forward losses that we could recognize after a court ruling previous this year. So in total, 1.2 billion. This quarter, we have valued roughly 45% of the property portfolio externally with the appraisers, Newsec and Cushman Wakefield. And as Bent mentioned then, a value change in the quarter of 259 million. We saw the yield coming down to 4.55, a decrease of four basis points since year end. And if we look at how it's divided between the different market areas, we can see that Citi provided 500 million plus during these nine months, while Solna and Hammarby are still on the minus side. Residential also a little bit on the positive side. In total, we have invested 1.5 billion almost in the management portfolio together with projects and also development properties, which are the residential development within Birjebostad. And a few comments to the key ratios, equity per share 121 and the EPRA NRV 147 crowns per share. Positive return on the property portfolio of course, since we now have also recognized positive value changes. the surplus ratio in line with last year, also equity ratio and loan-to-value in line with previous year, and the debt ratio improved to 12.8 in line with our long-term target, and also we could see the interest coverage ratio increase to 2.7, good signs. On the financing side, it's continued to be a very good market. We have very good access to financing from both the capital market and from our banks. We have refinanced everything that is up for refinancing this year and we have initiated also next year's refinancing with banks. There's been some volatility on the capital market when it comes to margins, but we took a very good opportunity in August to make some new bond issues where we came out with a five-year bond, 600 million at the margin of 103 basis points. This would be somewhat higher in today's environment, but a very good opportunity for us. And we have also entered some new swaps. During the second quarter, we entered some plain vanilla swaps of 1.9 billion, five-year swaps. And now, after the summer, we have done some of the new callable interest rate swaps, 1.5 billion at levels below 2%, which provides us as long as they remain with a positive cash flow as it looks now. And we are happy with the undrawn credit facilities of 6 billion, which gives us safety and we feel very secure that we will refinance everything that comes up in the near future. So a very stable financial position. And then when it comes to interest rate swaps, we have seen an uplift in the average interest cost of 2.91 now compared to 2.82 at year end, but actually today back at below 2.9%. around 44% of the portfolio is fixed, and with a fixing period of 1.3 years. And if we include the callable swaps, that increases a little bit to 1.6 years. So I think we are happy with the situation as it looks today. And I think that's all I have for the time being. So back to you, Bent.

Thank you. Yes, so if we look at the occupancy rate in the management portfolio at the end of Q3, it's at the same levels as in Q2, so it's 87% occupied, and we very well know that the easiest way for us to create shareholder value is to rent out the existing vacant premises. But if you go over to the net lettings, the net letting for the quarter ended at plus 55 million. The larger new lettings, we sent a separate press release on that one during July. But the new lettings ended at plus 93 million and terminations at 38 million. And the large termination was more or less mentioned in the media in Q3 2025 when SOS Alarm said they would move out of over premises and to a new location in the city. And the lease contract runs out in second quarter 2028. Come a little bit back to that later on. So the renegotiations for the third quarter is total 90 million. It's an uplift of 1.9 million. But if you look further into the figures, renegotiated rents rose up to 60.4 million. It's an increase of 3%. And prolonged existing terms was 31 million. So we're quite happy with the result this quarter. Year to date, the total renegotiated amount is 320 million, and there's a slightly decrease of 0.6% for the total portfolio. Renegotiated with different terms, 165 million, and prolonged on existing terms, 152, total 320. So that brings the total net lease for the year-to-date figures to minus seven. And as I mentioned in my CEO letter this morning, we have had a nice kickoff over fourth quarter. So we are quite enthusiastic and ambitious for the last quarter. Also 136 million of the maturities in 26 and onwards have already been renegotiated within these figures and earlier quarters. And if you dive a little bit further into the renegotiations we have done, it's a healthy mix among all market areas and all segments. Very often when you listen to media and we hear different round table discussions, it's a lot happening among governmental tenants, et cetera. We feel we are in all kind of markets and segments, and also that's what you see on the right side here. It's a nice mix of different tenants. Two contracts above 1,000 square meters during Q3, and the same with the new leases are also in all kind of categories. And one contract above 10 million, and then you all know that's, of course, the D&B Carnegie contract. If you divide it into the different segments we have, different areas, Stockholm is dominated by Stockholm in the city this time, but we see activity in all our clusters, and that's important for us. So the rental development, we gave, this is not a guiding, but this is what's in our book already decided. So the forthcoming quarters, and we want to, of course, accelerate this. And if you have next quarter, when you also see a fourth quarter here, you have the full effect of the D&B Carnegie contract. You have the full effect of the MIMIR project, and you have the full effect of Vennergren Center that we come back to a little bit. I mentioned here a slightly drop in Q4 2026. That's a one-off effect, more or less an IFRS effect, auditing effect, meaning we have had some rebates to some customer that we now are renegotiating the whole contract, and then we take the full effect of the planned discount there. The new contract will increase our cash flow effect and we'll try to focus on that this time. So I mentioned in the beginning, our customers, it's the most valuable we have in the company. The 10 largest tenants you have on the right side here, still the D&B Carnegie is renegotiated, but this is the old contract because the new one runs into effect from the third quarter, 2027. So we will update it then and there will be a number three on this side. The vault on the top 10 tenants will then go close to 10 years, and in total we have 700 customers, but the 10 largest accounts for approximately 30% of the total rent, and they have a long vault. Yeah, I think that takes it. So if you look at the trends, and this is FABG's view and my view on the market trends, what we see, the rental market, last quarter I said was slightly strong in the CBD. This quarter I say it's stronger and it's good continued activity in the CBD portfolio. Rent levels have started to increase in areas where low vacancies and less alternatives for new productions. There is more tempo in the leasing activities as well. And we also see stable rent levels in the Greater Stockholm that's also reflected in the figures we've shown you here today. We see a more mix of tenants' behavior still. Some tenants are reducing square meter in existing leases, but also more and more tenants changing their policy to be in the office at least four days a week. And I see someone do the analysis and say they will be in the office four days, but the policies start to be more and more at least four days in a week. So that's also, we see that on activity on ground levels, activity in the parking lots, et cetera, et cetera. So that's a good sign for us. Suppliers to all the industries in Sweden that are really growing, even if it's in the space industry, if it's in the data center industry, if it's in different industries, suppliers there, some of them have quite high activity. And we see them around now looking for future relocation and opportunities. Not all of them, but some of them. And still we see also the growth in startups, AI, flash tech companies also being in the market. So it feels comfortable and also back my comment on that we are quite enthusiastic and ambitious for the last quarter. When it comes to the construction market, we see free capacity among the construction companies. When we are handing out contracts, we see a good competition to get our potential building contracts. So we feel the market is healthy for us. Transactions markets, quite limited numbers during third quarter, but we see as well, as I guess most of the city is seeing, increased interest to investigate potential of market opportunities. Sometimes it's from a specific real estate company, but even more often from the advisors and that's their job. So it should be like that, but we see more interest these days. The financing market just add on ÅSA's run-through. It's a healthy activity there and we see competition among all kind of investors and different markets. So it's up running and well functioning. So going forward, what are we seeing? We have a lot of projects that will contribute to the top-line growth. As I mentioned earlier on here, with full effect from the fourth quarter of 2027, Vendegren Center, Mimer also with full effect from the fourth quarter, but it started to kick in during the third quarter of 2027. and they are running in accordance to the timeline that we started the project with, so it looks good. This year in June, we bought a land plot from the municipality of Stockholm, the garden one in Sveaplan. This is a fantastic area. It's very important for us. We have approximately 90,000 square meters here. This new building, right, is approximately 8,800 square meters, and we have done a lot of work in a short period of time, and we will have the possibility to start the construction works quite early. And total investment, approximately 370 million, including stamp duty, et cetera, and all kind of accumulated costs. And yeah, we are enthusiastic with this as well. It's a positive and attractive location for possible tenants. Quite high interest in a short period of time. Plan move-in, end of 28, beginning of 29. The area, just to put it in a bigger picture, I showed this last quarter as well, but from now on I will focus on our properties, but kind of the interest is also the white circles are where Ericsson signed the contracts for their new relocation, and we have all the red circles or squares here. So in total, 90,000 square meter. Moving over to the residentials. We are creating Haga Norra from being nothing and be an attractive meeting place. It's parking as a garage underneath the ground floor. We have all the green squares here we have completed, and right now we are doing the last cleaning of the last flats in block four, block five, I mean, and so that will be also completed this year. Block 4 has started up, we have done the planning, we have done the construction, we have decided on the construction company and we start the sale of the first flats during October actually. So that's on the way. Block 3, we have done a lot of lease-out. We have leased out an elderly care facility, approximately 5,000 square meters, to Stockholm Sjukhem. We will have a preschool that will be rented from Solna Municipality, and we are doing residentials. That will come after Block 4 is finalized, but the construction work will start a little bit in parallel. It's also a potential for a potential office, approximately 20,000 square meters at the last corner of the quarter. So Haga Nordaf Block 4 will be 133 apartments. Projects started during October, as I mentioned. Estimate investment 600 million, including the purchase of land. And the completion will be 28, 29 in there, with the move-in. The next phase, block three, are underway and in total approximately 20,000 gross leaseable areas. Investment up to 860 million. But as I mentioned, a lot of the commercial premises are already leased out. The last one, Solna Municipality press released this quarter that the building rights for more residentials in Arenastaden on the doorstep to the new metro station are in place, and the first building will be approximately 200 apartments. This is still in the planning phase, doing a lot of calculations, both when it comes to construction cost, pricing of the units, et cetera, et cetera. And the metro station, unfortunately, one year delayed. So we take the time and do all the calculations and try to lock in as much as possible just to finalize the potential in this project for us. So to summarize the quarter and what we are looking for going ahead, we are, as I mentioned, several quarters now. We have to conclude on ongoing leasing initiatives and to reduce vacancy, top priority. And definitely to continue to be the preferred partner for all of our customers. We have to be available, accessible, and always solution-orientated. And when I see all these different surveys, I'm so happy to see we are ranked number one in these questions all the time. And that's valuable for us. Second or third point is to secure the value creation in ongoing projects and our land back. We have to do the calculations exactly how to be strict on cost and how we are using all of our resources. That's both in commercial building rights and also in the residential portfolio. We will always continue to be active in the financing market. Also, I showed a nice picture of the activity during the third quarter, and it continues going forward. And the last one, search for opportunities to create shareholder value. I know a lot of investors asking for that, and believe me, it's top of priority. So with that, we hand it over to you, Victor.