Platzer Fastigheter Holding AB (publ)

Welcome to Platzer Q3 2025 report presentation. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key five on their telephone keypad. Now I will hand the conference over to the speakers, CEO Johanna Hult-Wrench and CFO Jakob Nielsen. Please go ahead.

To begin with, I would like to welcome everyone who's tuning in and extend an especially warm welcome to you, Jakob, our new CFO.

Thank you.

And we will be co-presenting this presentation together. So my name is Johanna Hult-Rensch and we will take you through this presentation. We are in a fairly similar market and economic climate as we were in the previous quarter. Over the summer, the tariff agreement has been financed, providing greater predictability towards the Gothenburg export intensive business community. My assessment is that when the economic turnaround does come, it will also be reflected in the rental market, albeit with some delay, of course. In this environment, we have improved our property management result by 30% since the start of the year, and this outcome remains steady. Our industry and logistics segment continue to be the driver with the strong demand. This week, we have signed a major lease agreement for just about 10,000 square meter at Arendal Port View, our future development of Port of Gothenburg. We are continuing to grow in the industry and logistics segment, which is now approaching the size of our office segment in terms of square meters. This segment drives the portfolio and diversifies us and complements us to the slower pace of the office market. We have accelerated the pace of our transactions and completed several deals so far this year, which gives us a great leverage and flexibility for future investments. We have acted both as sellers and buyers, all part of actively rotating our assets and managing our portfolio. We continue to strengthen our financial situation and in terms of flexibility. And last quarter, we had a positive net letting and announced that we would be receiving the lease termination from Nordea. And that has now happened and Nordea has given formal notice. This is the major impact of the quarter's negative net letting, 30 million out of the 41. Our work with our customers is major focus in the company right now. And our team is working really hard and have so far this year generated a 7% increase in rental income and a 6% increase in operating income. Our new asset addition to our portfolio, MIMO, has made a significant contribution to this result. So here we present the summary of the third quarter in numbers. In this single quarter, income from property management was 9%. This development is explained by an increase of operating surplus mainly from MIMO and we have also improved the financial net. the comparable portfolio is also contributing positively. What differentiates quarter three from quarter two is that the rental income growth declines due to Melike Healthcare's termination on the 1st of July, as well as the fact that the comparison period in 2024 had a rental income from the English school, which was sold during the beginning of this year. And Jacob will dive a little bit deeper into these figures shortly. We have also, as I mentioned, after the end of this period, made this letting of 10,400 square meters in Arendal port view. That will be added to the net letting of Q4. Looking into the net letting and elaborate a little bit further on these figures, as I know that you would be interested in this topic, the net letting of minus 41 million Swedish crowns is built up in this way. So 30 million is the Nordea lease termination. And if we look then into what the rest contains, you can see that 10 million Swedish crowns is renegotiations with tenants that remain in our portfolio. And it also includes garage, construction, site establishment, etc. 2 million is bankruptcy. It's actually a restaurant in one of our joint ventures. And it's 4 million that is vacating our portfolio, tenants that will actually leave us. And 5 million is new lettings and new leases that we have signed. Q3 is a very short quarter, it's only seven weeks of actual work and on average the quarter usually accounts for just about half the office lettings compared with other quarters when I look at the historical figures in the entire Gothenburg office market. So we are of course pleased to have been able to announce another excellent letting in the industry and logistics segment after the end of this quarter. So what has happened? What are the major events in this quarter then? As mentioned, Nordea has terminated their lease, but we have also extended parts of the current lease agreement and they will vacate their premises only in March, end of March, 2027. The net effect for us is positive about 4 million Swedish crowns. And we also taken the opportunity when Nordea will vacate to transform this building and the entire block. And we have already started and we have opened a new restaurant, adding to the service to the tenants. And the building will also later connect to Skanska's new office block and open up internally towards the station entrance of Gothenburg. Nymo in Möndal has now reached 88% occupancy rate after several new lettings during the summer. It was 80% when we took over the property here last December. We have also successfully concluded and secured a large renegotiation with Folktandvården at Medicinarberget. It's about 15,500 square meter. Extending the agreement and securing income for another six years with the same rental level. We have given the tenant a rental discount of about 7 million Swedish crowns, but that's accrued over the rental period. Hence, given to the size agreement, there will be a negative impact on the rental development for regurgitations due to this rental discount. No capex or tenant fitters will be due. If you then look into our customer structure and our 10 largest customers, we have a very well diversified rental structure in terms of both geographical distribution and the mix between offices and industrial warehouse tenants. The 10 largest tenants account for 35% of the total contract value. And as you can see here, the majority are the customers in the public sector, municipalities and authorities and so on, as well as the industrial and logistics and one hotel group. The average remaining contract period was four years. And what we also can comment here is that we have an occupancy rate that is 91.5 in the portfolio and the retention rate that we measure continuously on 83%. Our office portfolio and industrial and logistic portfolio are approximately the parity in terms of area right now. And we can also see here that we have really nice building opportunities going forward. I will dive in a little bit more into the industrial and logistics. The activity in this segment remains high. Demand is strong and vacancies are low, it's about 4%. And thanks to the limit supply of zoned land and the absence of speculative developments, Gothenburg as a logistic position with its port, railway and airport makes Gothenburg the Sweden leading logistic hub. And our portfolio, partly situated in the actual port, enjoys a stable rent development and low vacancy rates. And this segment is prioritized for our continued growth. And we have been very active in this sector. in the recent month, and we intend to remain this momentum going forward. Here are a few examples. We have acquired an industrial property in Tuve, which contributes with a strong cash flow and future development opportunities. We have also initiated a new project with Speed Group, who is the main tenant in Södert Logistik Park, our joint venture with Catena. We have divested another project that was completed in Södert logistic park. And as announced this week, we secured this lease with a major industrial player. We will kick off this new development in Arendal port view. In total, the whole development is 55,000 square meters. This specific lease is 10,400 square meters. We have really highly set climate targets here and very ambitious goals to reduce our footprint within scope three of about 200 kilos CO2 equivalents per square meter. Here we see where our development of Portview is located, and we can also see the location of our portfolio on this photo. Arendal and Torslanda, that's the Nordic region's most attractive locations for industry and logistics, and I think this picture actually explains that. Stena Line will relocate its ferry operation in the area in 2030, and we are pursuing continued development here. And in this first phase, there is an opportunity to develop an additional 80,000 square meters of modern logistics space in the proximity of this land. The port then, the port of Gothenburg actually carries a third of Sweden totals export and more than half of the country's container traffic passes through Gothenburg's harbor. It is the only transatlantic port and it's growing in importance. And our property is located in this unique area in Sweden's primary logistic hub. A little bit about the office market. The transaction volumes in the Swedish property market as such has increased significantly during the first three quarters of the year. According to recent analysis from Svefa, the total transaction volume is up 27% in Sweden. The recovery was particularly noticeable in the third quarter with the volume, which is the strongest quarter since 2021. The recovery is broad, but not really evenly distributed. Stockholm County is continuing to dominate. Greater Gothenburg area is catching up and shows the strongest recovery since 2020, and now represents about 18% of the transaction volume. However, no major office property transactions were carried out in Gothenburg during the third quarter. The transactions that have been taking place at the end of 2024 and beginning of this year have confirmed the market assessed yield requirements. My impression is that there are more prospects to evaluate at the moment. There are plenty of available capital in the system and considering the spreads, transactions in the office segment should pick up also in Gothenburg going forward. Prime rental remain stable. Office vacancy in Gothenburg stands around 13%, mainly due to large volumes of new production of offices added a couple of years ago. And I will return to this shortly. The proportion of internal relocations, in other words, agreements where tenants move within the existing landlord's portfolio, is higher than last year. almost 30% up, which is a signal that competition for tenants has intensified. It is an advantage for us as a major landlord in Gothenburg with local knowledge to our customers. The trend of tenant demanding location with good transport links and high standards, that continues. And we know that there is a willingness to pay high rentals for quality amenities. The take-up in the central Gothenburg office rental market has decreased over the last three years, but remains at a relatively high level. From the peak, it was around 130,000 square meters in 22, and take-up is expected to reach just under 100,000 square meters by end of this year, according to Citymark. The average rental trend for the central parts of Gothenburg shows that rents have increased by around 4% per year since 2020, and rental levels have remained stable over the last year, which is also the primary outlook for 2025. Thereafter, rents expected to rise about 1% per year during 26 and 27. In 28, the improved vacancy rate should contribute to a further small increase in rents, according to CityMax. And if we look at the increase of vacancy rates in Gothenburg, it is primarily due to addition of new offices that has been brought into the market rather than the pronounced trend of tenants reducing the space requirements. The median letting in the in Gothenburg is currently 300 square meters per agreement, which means that the effect of space reduction is not as pronounced as in Stockholm, as each agreement is smaller and both rental levels and the potential of cost savings are not that high. Over the past five years, the stock of offices in central Gothenburg has grown from just about 1.8 million square meters to about 2 million square meters, corresponding to an average annual growth rate at about just over 2%. as you can see here such large addition have been difficult to absorb i would say that this one and a half percent is the uh the uh normal economic during your normal economic conditions this is what what the market can absorb this is what it has been looking like the last five years and going forward on average the addition should be around one percent up to 2027 and after that no new construction have been initiated and for anything else to be completed after 2028 construction needs to begin now so with this conclusion we will see that the vacancy rates most likely will will go down Standing out in Gothenburg compared to other cities is that the vacancy rate in the central business district is one of the highest in the market despite location and connectivity. It's approximately 15%. And this is primarily due to infrastructure investments which have caused traffic issues and prompted many to relocate from areas such as Lillebomen and Central Station District. Examples of such projects include bridge work, the Westlink railway project and district heating upgrades. Market activity has been concentrated in the two day central parts of the city with about 60% of all new letting taking place in CBD during this year. So my assessment is therefore that we will see continued competition for office tenants for some time before the situation turns around. However, I do believe that the change will come. And let us look at some of the fundamentals behind the future expansive drivers of our region. Since 2009, the economy in Gothenburg region has grown by 67% in real terms. This is almost twice as strong as the Swedish average and more than three times as strong as your area average. It's almost on par with China. In terms of percentage, Gothenburg has grown more than the capital over the last 10 years. We continue to see population growth, albeit in a low rate. Over the last 12 months, the number of inhabitants has increased by 0.9%. That is higher than Stockholm of 0.7% and Malmö almost 0.1. So the population is also younger with the highest population proportion in the average age group of 20 to 39 years. Gothenburg is cementing its position as Swedish innovation engine. The R&D intensity in the Gothenburg region is more than twice as high as in Stockholm and the rest of Sweden. And Gothenburg also stands out internationally with the world's 12th highest density of inventors and researchers. And this should be put into the context that Sweden is ranked number two in the Global Innovation Index, which is extraordinary for such a small country as we are. Another driver is the Port of Gothenburg. A third of Sweden total exports and more than half of the country's container traffic passes through this port. And the container volumes continue to rise. A seabed dredging is ongoing, and that is to accommodate the world's largest fleet of vessels, as well as more environmentally friendly, such as the harbour expands its electrification and charging points to strengthen the city's role as a logistic hub long term. So with these strengths together with SAAB that is expanding, they are, for instance, opening a new facility in Møllykke that will create 500 new jobs. And these are examples of fundamentals that underpin the long term growth of our region. So with those words I will hand over to you Jakob who will take us from this helicopter view and into a little bit more detail about our specific growth of Katzer.

Thank you Johanna and good morning everyone listening in. It's a pleasure to be here presenting my first quarterly report as CFO at Platza. So let's dig into the numbers. The company continues to deliver solid growth in the quarter. If we look at the income from property management, the growth in this quarter is 9% compared to the same quarter last year. And if we compare to the previous quarter Q2 this year, we had a growth of 16%. And the main reason for the lower growth this quarter compared to Q2, is that our tenant Manlyke Healthcare vacated its premises on July 1st, which we have communicated earlier. In addition to that, last year we had rental income from the English school, a property that was sold in Q1 this year. Despite this, we are still showing good growth in both rental income and net operating income. And that's mainly driven by two factors. One is a positive performance in the like-for-like portfolio and contributions from, in particular, the acquisition of the MIMO property in Möndal. And then, of course, the financial net also plays an important role in the income from property management. And in the third quarter, our financial net was 10 million SEK better than the same quarter last year. And this is a result of a focus work with the finance function leading to both lower average interest rate as lower credit margins and also, of course, supported by declining market rates. All in all, this translates into an income from property management of SEK 198 million Swedish, corresponding, as said, to 9% growth compared to the same quarter last year. For the first nine months of this year, we have a growth in income from property management of 13%. Moving from cash flow to property valuation, our property values are remaining stable and just under 30 billion Swedish crowns. We report a small unrealized value change of SEK 20 million, and that's driven by cash flow changes. The yield remains the same as last quarter, 5.1%. As we said before, the economic downturn continues. And you can see it's also reflected in the investment volumes, which is low, 60 million in the quarter. And that's basically driven by that we have not initiated any major projects and also tenant fit-outs that are progressing on a lower pace. And as Johanna said, and as you know, the company has worked hard to adjust its capital structure following the acquisition of MIMO in Möndal that was done in the end of last year. The transaction activity was high during the first half of the year. So if we look at the net investment so far this year, the first nine months, net investment amounts to minus 733 million Swedish. And the transaction this quarter is the only transaction was that we completed the previously communicated sale of a logistic property in our JV with the Catena. And that's an underlying property value of 385 million. If we look into next quarter, quarter four, we will close the acquisition of the industrial property in Tyve. which we acquired in Q2 and that's an investment of 174 million. The combination of the strong underlying earnings and the stable property values and the divestments that has been carried out during the year has strengthened the credit related KPIs. So the interest coverage ratio has improved to 2.5 in the quarter Net debt to EBITDA is at the quarter 10.9 and rolling 12, 10.8. And the loan to value ratio calculated for the total assets is 47%. And these are a level of on the LTV ratio that we are comfortable with and in line where we want to be. To sum up, we continue to show a solid growth. All by slightly lower pace than previous quarters, with stable property values and strong improving financial KPIs. Finally, also just mentioning the bottom line and the profit after tax for this quarter is SEK 210 million Swedish crowns. And the result is impacted by value changes on derivatives of SEK 72 million plus. So let's take a closer look at the key drivers behind our performance this quarter, broken down across the like-for-like portfolio, the project portfolio, and the transactions. If we start with the revenues and rental income on the top, we continue to see growth in the existing portfolio, but the largest impact is from transactions, where MIMO is the main driver. The decline in revenues within projects, that's mainly reflected by Manlyke Healthcare's move out on July 1st. Overall revenue is up 4% in the quarter, compared to 6% the previous quarter and year to date, we have an increase of 7%. If we look at the property costs in the middle, These are higher compared to the same quarter last year. However, only one million higher from the like for like portfolio. The reminder is mainly from transactions reflecting the larger property portfolio. And in total, the net operating income in the like for like portfolio increases the NOI by 1%. Last quarter it was an increase by 2%. If you look at projects and transactions combined, they also add 1% in growth, resulting in a total 2% growth for the quarter. If we look at the year-to-date figure, the growth is 6% in NOI. Moving on to our financing and credit KPIs. As said, they continue to strengthen over the year. We experienced strong support and good collaboration with our banks. And we also see good access to the capital markets. And during the quarter, we took advantage of the strong capital market by being active issuers on the bond market. We issued two new MTN bonds, 700 plus 200 million Swedish. And in addition to that, through Svensk Fastighetsfinansiering, we raised another 195 million. And we think all of those was done on an attractive level. So the total of those issuings, a little bit above CEC 1 billion, you can say around 600 of those was refinances. On the bank side, We repaid a bank loan of 330 million Swedish, which was refinanced then by lower margins in the capital market. And we also, during the quarter, reduced our RCF volumes. So overall, this gave that the net debt decreased by around 200 million in the quarter. And if you look at the capital duration, virtually no change since last quarter. It's 2.2 now, it was 2.3 last quarter. And if we look at how that is spread, it's the graph on the down left side. And you can see that there's 35% that matures during the next 12 months period. To be noted there is that 5% of those basically certificates. But given the strong credit market, our solid relations with the banks and also the flexibility we have built in our financing, we don't see that as a concern for us and we have dialogues ongoing with banks. On the interest rate side, we entered into a new swap this quarter of 250 million and our average duration remains at three years. In total, if you look at the average interest rate, it's now three basis points lower than the end of June and 15% lower than at the year end. Basically driven by lower market rates or STIBOR. As mentioned, Platzer has significantly strengthened its financial position this year. Combined with the larger liquidity buffer and the recent credit rating upgrade, this gives us a much stronger position to deploy the capital actively, and we hope to be even more active in the transaction market going forward. Let's move from financing to sustainability. Just to highlight a few areas where we are working continuously in the business. First, we continue to work actively with the energy efficiency in the portfolio. And during the first three quarters, we reduced the energy consumption in like-for-like portfolio with 4% compared to last year. And the forecast to reach our target of 70 kilowatts hours per square meters looks promising. So good performance first nine months. We have also implemented a new interior concept for tenant fit-outs. And if we look at reference projects, we can see by that that we can reduce the climate impact up to 40%. And we calculate the climate impact on all our fit-out projects going forward. And finally, the green and sustainable financing, we are now up to a level of 73%, which is an increase of 12% during the past 12 months. And we hope to, and I think we will, increase that even further going forward. Thank you.

Thank you for that, Jakob. So what is our focus going forward? Of course, our core business, our customers and focus on our vacancies remains one of our greatest potentials for cash flow, growth and earnings. And we also continue to develop our industrial and logistic projects, which is quickly generating operating income and leverage and helping us to grow our portfolio. In today's call, I have provided you with several examples of how we do this and how we create this leverage and what we are planning going forward. During the year so far, we have also been very active in the transaction market and we will continue with these strategic transactions on both purchases and sales to reposition our portfolio. So we have started a new development with the Speed Group and we have Diverst, another project in Södra Logistikpark. And we have also started this project here shortly now in Portview Arendal. And a piece of another good news is that we are in September. We're recognized with this award, Listed Company of the Year by Canton. This is a testament to the expertise and commitment within the company and all employees who contribute every day to drive us forward as well as to improve our operational development and our success. And with this, I would like to thank my team and also thank you all for listening in. And we are open for questions.

If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. There are no more questions at this time, so I hand the conference back to the speakers for any written questions.

We don't have any written questions coming in to us at the moment, and we would like to thank you for listening in. And when you come to end of this day, I hope you will have a good weekend. Thank you.

Thank you.