Platzer Fastigheter Holding AB (publ)

Hello and welcome to Platzev's Q1 presentation. Today we have PG Persson, CEO, and the CFO, Fredrik Schodin. My name is Marcus Henriksson. I'm an equity analyst at ABG Sundal Collier. I will come back with some Q&A. We will also have the possibility at the floor here today and also on the teleconference. We also have so you can send in questions via the webcast and then I will try to read them up as well. So that's all from me. Over to you guys. Thank you. Thank you.

I'm Fiji Persson. I'm the CEO at Platze. And I'm Fredrik Schorin, the CFO. Yeah, and we will try to lead you through this presentation. And I will start and then you will come in, Fredrik, and then I will finish. If we look at the summary on Q1, it's a lot about rental income. We have increased rental income, but it's also a lot about financing costs. We have mitigated the financing costs with the rental income and a lot of our projects are now soon to be finished. So you can see that the rental income will come up and we will try to mitigate the financial costs. We know that the financial costs will increase. because of the interest rate situation. We had a strong net letting and a large number of new contracts in Q1. Also, our model, which we are working with, we're still working, and we have the same model for a lot of years. And Platzer has been there for a very long time, and we are going to be there for a long time going forward. And we're also reducing the energy consumption all the time, also in the Q1. And we have been nominated in our, what we are doing in our architectural way, we have been nominated now three times with our office buildings, Vesta, the Vesta project, the Kinneum project and the Mercure project. And we didn't win in Vesta, we didn't win in Kineum, but we won the largest and the best prize of all, if you speak to an architect, the Kasper Salin Prize for our house, the building, the Mercure building. And also we are now starting to move, the tenants are starting to move in in Söder Logistikpark. So in Q2, all those projects will be finished. So now in Q1, we only had one tenant moving in, it was Schenker. So in the books, there is no area, no square meter from the Surrey logistic by still projects in Q1. And they will be investment properties in Q2. So keep up and look out for that in Q2. We will have those transformed from project properties to investment properties. If you look at the numbers, Fredrik will come back to those. I will not talk so much about them. I will leave that to you, Fredrik. But I will say something about the market situation. And I will go from this slide to that slide. So if we start with this slide, you can see that we have a second quarter. It's been very double and it is very double in Gothenburg. We have a second quarter where it's clearly that the situation in the environment is declining. There is a declining activity in the economic activity in Gothenburg. And if you look at the indicators, you can see that it's clearly now 89 is below where we say that it's a downturn. It's not a recession, but it's a recession-like situation. But still, there's very low unemployment. And the weak Swedish krona, of course, keeps up the export industry. So the situation in Gothenburg is that we have in the numbers... like a recession-like situation. But if we look at the demand in our offices and demand in our logistics, it's still good. And I will go into that a little bit later. We also saw maybe a turning point in the CPI. where the level now in March 2023 were the lowest since August, August 22. So from September until now, we have had higher year-on-year increase in CPI. And we don't know if that's a turning point, but there's some indicators that there could be a turning point. And of course, there's still the uncertainty with the war. We have the benchmark rates that have been increased to 3.0 now in Q1. And we will probably be even higher in April. We don't know that yet. And we also, the writing downs of the economic growth is still very much done. If we look at the two markets that we are operating on, the office market and the logistic market, I will start with the office market. And if we start with the rental market, we still see high vacations and vacancies. since we had a lot of projects due in 2022. But now we can see that those projects are now finished. And 2023, there will be not as much office projects in Gothenburg. It will be more of a normal situation where we have maybe 30,000-40,000 square meters, where in 2022 we had 170,000 square meters. So, of course, the vacancies level are quite high compared to maybe six, seven years ago, but they are stable now. So we will see what happens. The prime rents have increased, mainly, I would say, because of the new CPI level. And we estimate that we will see no further increase above the CPI level 2023. We don't have any problems with the tenants. The tenants have all accepted the new rental levels, but we don't see that it's going to be quite as easy to raise those levels even further, to increase them even further. But we still have a good demand, and Fredrik will go in on our net letting, so you can see that we have a good demand situation on the office market. If we look at the property markets, we can see that the yields are slowly increasing. And why I've written down slowly here is because I will say more rapidly in the logistics. But slowly increasing yields. There's no transactions. It's more a sentiment question that if the interest rates are increasing, the yields should be increasing as well. But we don't see any proof yet of any transactions. But still, we are looking, keeping up very much in the market situation to see if there will be any transactions. And this uncertainty is still going forward. It's still very high. We don't know yet. I think nobody knows what will happen, if the inflation will keep up as high as it is or if it will start to descend. And we don't know where the Riksbank will do. So we will have to keep close Watch on that. If we look at the logistic market, we still don't have any vacancies on that market. The prime rents are still increasing. And what we... What we can see, though, is that the demand for e-commerce is not as high as it's been, but the demand from other tenants that want to be close to the Volvo plants and close to the harbour still have a demand for the logistic locations in our area. and if you look at the property market we had a high increase in the yields from q2 to q4 this month this quarter we have haven't seen any more increase in in the yields but we had a rapidly growing yield situation between q2 where we have prime meals on three and a half until q4 where we The increase, the prime is to 4.5, so 1.0% from Q2 to Q4, but no further increase in Q1. And also, of course, uncertainty situation, no transactions in the logistic market as well. So very few transactions generally in Sweden and extreme few in Gothenburg. This is our area of where we work. It's 20 times 20 kilometers. And the red dots are our offices. The red dots with a little white in is our project opportunities. And the gray dot is our investment properties in industrial releases. And the green one is what we're going to sell in the future. I will have a slide on what is going to happen in Södra Engården. In the earnings capacity, if you look at the chart on the slide I just showed you, we have the central Gothenburg property, where it's 60% of our fair value. And you can see that we have 95% is investment properties today, 5% projects. We're trying, and these are the fully owned properties, and we're trying to have that around 5% project property, between 5 and 10%, no more than 10%. So 5% is quite good. We'll probably maybe have a little bit lower percentage as long as the interest rates are so high that they are right now. It's more difficult to start new projects. And the associates, 4 billion. Most of them are 50% owned by us. So it's 4 billions today. A lot of them are project properties in Surrey Logistics Park. And those will now be investment properties, most of them in Q2. And we'll come back to that in Q2. Our value creation, the model is still the same, but I think we are focusing a lot more on the keys today, the ownership, a little less on the transaction and still a lot on our development. And the goal is always to create sustainable values. If you look at the resource side where we have the competence and the capital is always, of course, important with the competence. But I think we are focusing more right now on the capital side than we have done in many years. Fredrik will also come in to that a little bit later. I think I will do this slide as well. If you look at Q1 on our value, you can see that we have not done any large acquisitions, only a small acquisition, which was already... We had already done that with Göteborgs stad, the municipality. So the investment in existing properties is almost as high as last year. And we are doing our projects. I will go into our projects a little bit later in the presentation. No change in value. Yields are the same. and the goal also is always to increase the value in the portfolio and we've done that since 2013 and we will keep up doing that also in the future I will leave this to you.

Rental income. We had a good increase during the quarter. If you look at Q1 2022 compared to this quarter, we have an increase from 311 million to 350 million. And mainly due to the Canadian project you see in the background here, the tenants are moving in there this year. Our economic occupancy rates, which is of the essence for us, it's stable. In the decimal, it's increasing, but it's stable at 92%, which is important for us for every cash flow is will come into use if you look at the whole income statement the rental income increase as i said we have a good increase in the operating surplus the noi But still we have a decrease in our income from property management when you compare quarter on quarter. And that's due to the increase in the financing costs, which are up at 97 million for the isolated quarter this year. And we are managing that going forward, I would say. so we a little profit for the for the period it's a positive number so that's the positive with that it's not on the negative side very little value changes it's it's driven by the derivatives portfolio where the long interest rates has moved in the quarter which has decreased the value in the derivatives portfolio and as pg said no changes in value when you look at the income statement our positive net lettings which are really good for us in the day-to-day business because this is a proof of our good quality in our investment properties and the the locations that build an interest that we still can do good net lettings. We have some terminations but we have 21 million in net lettings for the quarter. No lettings in the project properties and as they decrease the number of projects it's fewer possibilities to let out. But we have still possibilities going forward with new projects in our industrial and logistics and ongoing projects in offices. Our key figures for this quarter, the most focus we have right now, or the market, it's about the interest coverage ratio. We are now standing at 3.2 if you look at rolling 12 months. It's a significant decrease since last year of course and if you look at the isolated quarter it's at 2.6 and that for those who don't know that's how much cash flow we have to pay the interest and as they are increasing of course the and the cash flow doesn't increase in the same ratio then this will deteriorate but we are looking closer closely into that and working with our financing structure and our interest rate derivatives portfolio our interest rate swaps and and of course the day-to-day business with our management property management are contributing to keeping this at bay our surplus ratio is up a notch if you compare it to last year it's up at 76 percent which of course is good in all essence Our net reinstatement value, our EPRA NRV, is increasing still. If you look at the rolling 12 months, it's a 15% increase if you adjust for dividend. But we know as the result goes down, this will be a lower pace going forward. at least at what we know now, but the market can still change if you have a positive outlook. Net asset value, when you compare that to the share price over time, you see it's mainly going the same direction, but now we are in a period where the stock market prices the substance in the company at another level but over time this tends to go to correlate really well so we will see when we will meet again so hopefully soon We are still making good way in our sustainability perspective. We are, as we said before in our earlier conference calls, working with the climate goals and we are in the SPTI initiative where we have committed ourselves to to be in line with the 1.5 degree target the 1.35 degree goal under the paris agreement the the the biggest challenge there for us and other in the business is the scope three of course because it's hard to measure it's not within our grasp but it's we have to rely on contractors, entrepreneurs, our tenants and so on. So we are committed to measure and lower, decrease our scope 3 emissions going forward. we are still at a good rate coming to our environmentally certified properties we are at 92 percent but with the EU taxonomy that's less of an external interest but it's good for us in our property management to have this to work with. It keeps good order in how we manage our properties and we still have a lot of financing that is depending on the certifications. And energy usage, of course, as Peter mentioned, we have a really good decrease in the quarter. We have decreased it with 5.4%, which means that we are on a good track. Coming to financing, 67%. We have been at a higher level, but that depends a little on our transactions and what business we are going into at the moment. We have increased our commercial paper somewhat during the quarter. which is a positive sign. We have even issued an MTN green bond with SFF in the quarter, which is also a positive sign because both of those are in the capital market. But we haven't yet have any unsecured bonds because that market the margins there are about almost twice as high as we would like so we are really looking forward that to that coming down so we have all the instruments in our toolbox when we want to finance our growth journey going forward Our maturity profile, if you look at this slide, the red ones is bank and secured lending from the banks to us and the gray is then the capital market and if you look at the within three months that's our commercial paper only and the the next instance of the capital market is it's a bond that's due in November 2024 an unsecured bond and further on there's some secure bonds that are up for refinancing so hopefully we have a due time to get this in order and hopefully the bond market will get in order and we can come back and meet the investors at good levels so we can increase our exposure to the capital market at a good way. Back to the project.

Yes. We'll go through some of the projects that we have in the report. I will start today with the ARIA project, which is in Lilla Bommen. Yesterday, we announced a new renting out to Capio, their new head. office in this building. And it's good for the numbers, of course, that we are renting out in that building. That project is due in two, maybe in in Q3 2023, but we will do a lot of, we haven't had, it's not fully let in Q3 2023. Depends on the tenants. Yeah, it depends on the tenant. But it's really nice that we now are starting to see that the tenants are coming into this building. Then the McCure project we talked about, I talked about before, this one is the old building. We have an old building and then we have the new building that has won the Kasper Salin Prize. And we are now doing the old building and it's also coming out really good on the rental side. We're up in 70 plus percent now in the old building and around 90 percent in the new building. So this one will be one building in the future. As soon as we have done this project, then those two buildings will be one property. It is one property today.

Merge and be one building. Yes, yes, yes.

And then, of course, we are doing the skola, the skola in Södra Engården. And that one is in progress, working progress. And it's 100% led to the English school. If you look at the logistic projects, those are the ones that will now be finished in Q2. It's the Syrola 3-1 in Torslanda. It's to Entex. And you can see that there will be another building. This is the Phase 1 building up to the left. And you will have the Phase 2 building is also on the way up, which is rented to Volvo. And to the right, we have Arendalskulle. It's also rented out to Entex, same as 4031, 100%. It will also be finished now in Q2. And then we have two buildings in Söred, 8.12, Torslanda. It's rented out to Schenker and Volvo. This one you can see is called the V1 building. And then you can also see a little bit of the V2 building, which is rented out to Sportskoppen. And those will also be finished in Q2. And also the 721 project, which is 100% rented out to VCC Volvo Cars. So all those four projects, or five projects, because Bortshoppet is also one, are being finished in Q2. And of course, the future of Södra Engården. We are doing the school, and the school is the orange building up to the... I have to go and point. This is the building that is Södra Engård's school. Oh, sorry. This is the building that's the school and we also are we also going to do the parking house, but all other buildings around here will is sold to the building rights are sold and that will be residential buildings. Finally, not least, why should you invest in Platzer? Because you are investing in and believing in Gothenburg as a region. And we are very much, the rental market is very much a mirror of how Gothenburg is doing. And if we can have nice locations and we have a good situation in the region, then we'll also be good for Platzer. Gothenburg is still growing. I mean, today you can always... I think if it's not or if it's growing, but Gothenburg is growing. We have talked about our model. Our model is we can focus on the investment properties. We can focus on ownership. We can also focus on the transaction when that will be a better situation. And we have a good financial situation. And we also have our projects that we can keep on developing. And there will be new projects around the corner, but new projects demand rental outs. We will have to have tenants before we start our new projects. And of course, we are doing the sustainable work. And I think we are quite good at the sustainable side. So hopefully all that will trigger you to invest in our company. Marcus.

Thank you for that. I start with a few questions and then we'll introduce to the floor. So you mentioned Capio that you leased out in the project Aria. So now it's leased out around 65%, quite a big lease, 18% of rental value. Yes. I calculated correctly. What's the outlook for that property? You mentioned it's completing Q3. They move in the summer next year, but do you have any more potential lease agreements near term?

It's already an investment property, so it's... I mean, if it's 65% or if it's 85%, I would rather have 85%, but it's very common. The project, even though it's a project, when we are leaving Q3 2023, will be like any investment property, which is empty. Some of the... It will be moving ready.

Yeah.

To rephrase the question, do you have any sharp discussions for that?

Yes, we have more sharp discussions.

I also saw the value changes were zero in this quarter. We had a bit positive from cash flow, 126 million, and then we have negative from projects, 126 million. First question, projects, where did we have write-downs?

In the models, when we do the models, the investment, the return of investment are calculated with models. And when the yields are moving, Now they're moving up. Then sometimes the models don't take fully into account the return of investment. So we take too much return of investment. That's what happened, I would say, in the Q4. We had a little bit too much return of investment from the projects in Q4. And we have to... mitigate that in Q1 and that's due to the model maybe the model is too positive when you have 100% fully let and that that's no problem when the yields are flat or the yields are going down but could be a problem when the yields are coming up like they did in in Q3 and Q4 And also some other projects will have a little bit more costs or the costs are in a periodic way that we should have put them in Q4. So that's why. So it's the same projects.

Do you feel that there is any risk going forward, say that yields would continue to go up, that we would see further projects right now in that respect?

I think we've taken all those measures that we can do and the projects are almost due, most of them.

So the cost for the... They will be included later in the investment properties valuation. they soon to be due you mentioned Q2 and Q3 in our 2023 so the risk will decrease by time

And valuations is not, I mean, it's not fixed. So you have to choose. It's a moving target. You have to choose sometimes in the valuation. I mean, we are valuating every property, every quarter. So we are looking into every rental income, everything. And of course, it could be something that we are a little bit changed between quarters.

Last question from me before I introduce the floor. I saw that JLL and Newsec in the report where you show us rental market and valuation yields, they have put up the valuation yields versus Q4. But in your discussions with, I guess, at least one of them, values are flat. based on transactions. Could you elaborate a bit on that discrepancy?

We got this ILL report on Friday, so we put it in the report because we thought that was the right way to do, but we don't agree and we haven't had the time to talk to them. but we don't agree on their... I mean, it's very much sentimental driven, and that's what they're writing all the time, that it's driven by logic, is their way of putting it. The logic should be that the yields are coming up, but we don't see it in the transactions.

Connected to the financing cost. Yes. But isn't that like the skeptical mind would see that if we have few transactions or see we always have very limited evidence in Gothenburg since it's a bit of a special market, but isn't that partly an evidence? And that's what they are basing their assumptions on.

Yeah, I mean, we have had a couple of external valuations where we have seen that the yields have not been coming up in Q1. So we trust in them more, I think, than JLL's report. But we don't want to hide anything from the market. So if JLL thinks that the yields are what they are, and that's the only report that is on the market right now, we put it in our... Perfect.

Moving over to the floor. Raise a hand and there will be a microphone coming over to you. I'll start with the one that was closest.

Thank you, Tobias Kay from Lannebo Fonder. Starting with the logistic projects that you mentioned that will be completed in the second quarter, will they still be owned in the JV or do you plan to kind of acquire the remaining 50% of those?

we are we are planning to be the long-term owner that's what we have said all the time and we are discussing that right now and we will as soon as as soon as we know what we will what we are doing in in the future we will do come communicate that on to the market but there aren't any like forward agreements that you will just um use and and with the already decided yields or something like that it's yeah there are agreements market value or there are agreements but they're all optional so we don't have nobody has any demo or there's no one there's there's not any uh platzer has the first option to buy and at market conditions so we have no prerequisites regarding yields and so so we have to agree to the terms yes

And when do you expect to be able to give more information about what the price will be and when the transaction will take place?

Hopefully, we'll say in a couple of weeks. Yeah. Yeah. During the quarter. Yeah. We're discussing that right now.

And as a very big part of the development portfolio, especially in the industrial and logistics segment, is about to be completed, are you planning for new starts?

We have started the V4, but we are not going to start the V3 because we have started the V4 on 0% letting out, but we will not start the V3 until we have a tenant.

And do you have like a pre-letting ratio that's required? Is it like 50% or do you want it 100% least?

In the board, in Platzer's board, when we go to the board in Platzer, they usually say 50% on office buildings. But in the JV, we have a separate board. And that board has said that we are not going to do, we're not going to start a V3 until we have tenants in V4 and we get tenants in V3. And if not, we haven't set any percentage yet.

regarding the rental market maybe more on the office side you mentioned that you signed a relatively large contract with capio are they an existing tenant since before and are they leaving some premises as well and How big are those premises compared to the new signs?

They're leaving another premises in Lilla Bommen. And I think that one is smaller. So they are increasing their area, but they are also leaving in the same area, in the same Lilla Bommen area.

When we look at large leases in Stockholm, more or less all companies that have signed large leases this year have reduced the spaces but with maybe 30 to 50%. Do you see the same trending in Gothenburg that you see

Not the same trend as in Stockholm, but that has been in five, ten years time. They have reduced the space per employee, but the total space is more increasing for many companies. I mean it's still a situation I would say that the unemployment rates are very low and many of the companies that are renting from us they need more space they don't need more space per employee but they need more space as a total and you've had a relatively strong net letting in the recent quarters should we expect that the occupancy rate will increase during the rest of this year I mean, if you look at the earnings capacity, it's up, I think, one or two from 92. So hopefully, we think that this will have that effect, but you never know how many terminations you get. The terminations are more difficult to predict than the... Of course, it's difficult to predict renting out as well, but both are sometimes hard to predict if...

you have a lot of terminations then you have negative net letting but but i i can't see that situation right now and one final question regarding co2 emissions you're one of few listed companies that doesn't report the scope three emissions how come you're not reporting that

We are reporting it, but only yearly.

So no, we're not reporting it every quarter, but we are reporting it on... And where we can validate the numbers, because most of it is speculation, even in the reported numbers. So we are increasing the number of segments where we measure the CO2, but we are not there yet. But on a yearly basis, we have reported CO2 in scope three. Thank you.

Okay, Lars Narby from SCB, just to follow up on the previous question and more specifically working from home. In Stockholm, it's a factor now. To me, it's starting to have some kind of effect where one can argue that the location of an office is getting even more important to attract people back to the office. How is that playing out in Gothenburg?

We don't see any sign. I mean, they've talked about now that offices is the new retail in New York, but we can't see any signs of that in Gothenburg yet.

It's not the same commute. It's not so dense. So it's not the same problem.

I mean, it's also, of course, I mean, you can always argue, do we have very attractive office buildings? And Fredrik and I will always say, of course we have. We have the most attractive office buildings. So we are, the tenants are moving from other property owners to us. But I think as a general, if I talk to other property owners in Gothenburg, I think they're all pretty happy with the renting situation. Adrenal situation.

And one more question on a different topic. I mean, you have a strong rental growth very much due to CPI indexation, but then profit from property management is being hurt by rising interest costs. I mean, looking forward without, I know you don't give forecasts, but can you give some kind of indication how you expect that to looking into the full year and looking into next year, will you be able to balance the rising interest costs or not?

We are, if you look at the earnings capacity, and if I go back until 2013 and I map the earnings capacity with what actually is the, what we then get, it's pretty correlating. So look at the earnings capacity and what, if you talk to the interest rates, nobody knows, but...

But the ECR, we have a target at 2.0 and we would absolutely want to be so far away from that as possible. So of course, we want to increase the pace. We will increase the cash flow so we can meet the financing costs and hopefully It's going to be worse before it gets better, but hopefully it gets better soon. But we are increasing our cash flow, letting out. But we don't set any prognosis on that.

The only forecast we can give is the earnings capacity. And what we can say is that it's usually pretty close to where we also then deliver.

Okay, thank you.

Hi, Albin Sandberg. You mentioned that you expected the rental growth to equal the indexation as far as I understood it, but also that that's some kind of a maximum. 2023. So assuming next year, you think is there a risk that the market rents will drop or will you be able to compensate for indexation also going forward?

I don't think there is a risk that the market trends 2024 will drop. They will probably, I mean, today, if you take the index, the CPI index for March and compare that to October 22, then you get 3.7%. and that's what i mean in our valuation we have four percent uh uplift in in next year i think the market will will that will won't be any problem for the market i think the market trends will will cope with four percentage

And then, Fredrik, I think you said you were looking into all toolbox within the financing package. Given where interest rates are now and what you see going forward, do you think it's worthwhile to raise your hedging ratio or are you rather

inclining to to go for a higher share of floating rates uh i i i would say we are working with that on a daily basis we are evaluating different options so but but i i would without doing any prognosis the the trend is the hedging is going up okay thank you

if I can do a follow-up on the icr you said that you want to be clearly about two times if you would drop towards two times what would be or how how would you handle the situation what would be most likely to do would you can raise equity or sell assets or any other suggestions

Sell assets is probably more of a CEO and CFO question than equity. So I would say that we will do whatever is necessary. And of course, discuss with the board if necessary is to raise equity. But I would say we're not even close to that situation, but we don't know about the interest rates.

But the first tool in the toolbox, that's to sell some assets.

Hi. I think I have two questions. One regarding the paid average interest rate. I mean, it made a pretty big leap from Q4 up to Q1, below 3% in Q4. Now it's 366 by the end of the quarter. And I think it's 30% or something that's actually maturing regarding rates within the next 12 months. How much is stable and how much is longer maturing, so longer borrowings is actually maturing? And what's your, can you give us any guidance on your expectations on paid interest rate over the next three quarters?

In the next quarters, it depends on the upcoming rate, of course.

But the market has... Spot prices as it looks right now. If we assume that we will at least calculate with the spot prices as it looks right now.

Yeah. But the short-term rate, we got about 50% effect in our finance net due to the hedging. And we had Stybor increasing with 66 basis points during the quarter. And our effect in our portfolio was 35 basis points, if I'm not mistaken. That's 97% of that is STIBOR alone in that increase. But going forward, that's in the same way because the only thing that could change that, that's the margin in refinancing going forward. And then you have to look into the books and look what's the current financing situation and what we are expecting to do the new deal at but we haven't had any signals lately in increasing margins from the bank and we are as I said earlier hoping for the capital market to gain some ground But I would say the pace is mainly due to the short-term rate, the stable rate.

You don't get any prediction.

No. But what you say, in April, it's 3.5. But then I would say before the year is over, it has been up. Their price in the market at 3.75. And I would say it's a good belief, not in a positive way, I would say it would decrease before the year is over. That's what I'm hoping for. And if we can see some significant signals in the KPI development, then hopefully the central bank will turn it down a notch and we'll see where we are ending 2023.

What we could say, Johan, is that we're not worried about the refinancing situation.

I think I'm just more of the kind of development data because it's very difficult to predict what kind of cyber effect you have on a three-month basis and so forth. But okay, thanks. The next question, can you please provide us some kind of breakdown on the like-for-like rental growth year-over-year in Q1? I mean, it's a plus 20% in like-for-like. What's building up that number?

The problem is... with like for like is that if you have investment properties that are projects like Kineum, Aria, then some year when they're emptied, you have a very low like for like. And the next year when you fill them with tenants, they have a very high. And that's what's happening for us. So like for like is not always a good measure.

So... A big chunk of that number is actually products, previous products.

Yes, it's an investment property.

Isolate indexation from Q4 to Q1 now, the indexation effect.

You have to take the capex into account. And that's the weak thing about like for like. That is always something that if you were to put all those properties away, that it's not like for like, it's not very many properties left. So we can put some of them away and then the like for like will probably be more like the CPI index. I would say without having done that.

Okay, thanks. Perfect. Moving back and let's see if we have any questions from the telephone conference.

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Perfect. I can end with a few questions as well. You were discussing it a bit before about potential divestments. Going back a few quarters, you were hoping to be a net buyer. You were very much looking forward to buying properties. Would you say that you're more inclined to divest now? It was not certainly clear, or is it more that the market is very uncertain, so it's more likely that you will do nothing?

I think the second, more of the second than the first.

And we have already agreed divestments in Södraengården that will come into place during next year. So it would be if we should increase the divestment, but that's not in the discussion right now.

All right. And then a bit on investments. You've been investing around 1 billion last few years and now we're at 1.4. Continue to be a high pace. I think we should expect it to come down. But how much? You mentioned that you want to have a project portfolio of 5 to 10%. Did you mean that you will likely go below 5%?

I think we could go below five percent. I mean it depends a lot on the the renting out for instance in Gamlestadens Fabriker we have 65 to 70 000 square meters in in building rights. If we get a good tenant or we then we can start the project and then maybe there's a project on like half a billion or something. And that will start. Otherwise, if it's not starting, then maybe you have a little bit other situations. Of course, it's depending on the renting out situation.

And the 10%, that's an all-time high ratio.

I think we were below... We haven't been above 10 any time. It was 9.7 or something. That was the highest. So I think we could go under. We have been down to 1.5 or 1% in some years.

Do you think it's likely that we will have towards below 1 billion in investments going into 2024-2025? It depends, of course, but with the information you have currently.

Hopefully not. Because the projects are still very profitable. So I think we should do projects. Plotsa should do projects because those are profitable.

And we see that construction have begun for housing in Gamlestadens fabriker. Do you feel that that is something that would be a positive for a potential tenant that they see that the projects are starting or is it all else equal?

No, no, absolutely. It's very positive.

So anything you can share, potentially any starts in 23 or likely 24?

We hope. We hope we have discussions also. We have a lot of discussions right now. And I mean, we had one large renting out in Q1 to the Gothenburg municipality, which we had discussed for one year and took one year. And then when it came, it was really good. It was really good for net letting. But if you would have asked me Q1-22, I would have said, maybe we will finish that in Q2. But it took another four or three quarters. And I think that could be the case for Gamlestadens Fabriker.

Thank you. I will end with our last detailed questions on the Capio. They're moving from another property within Lilla Bommen or Gudbergsvass. Is it your property?

No, it's one of our competitors.

Start with a large C. Too bad. Thank you that you have listened in. Thank you to the floor for all the questions and going back with some concluding remarks to PG and Fredrik.

We will summarize with saying thank you everyone for being here and those of you who are listening in through the webcast.

Yes, thank you everybody.