Wihlborgs Fastigheter AB (publ)

Welcome to the presentations of Billboards Q1 2025. A world with new conditions almost every day. Virgins. Things have to be done. Keyword since many years is handlingskraft. Best translated to. We continue to act where we find possibilities and we are prepared for new actions whenever the time is right. During 2024, we had record high volume of new leases, and that strong trend has continued during 2020.

High quality, good locations in the region, with new leases and cash flows also ahead.

And strong cash flow gives opportunities for action. The action continues. Let's go to our report and the summary of Q&A. Rental income, 1 billion 45 million. Income for property management, 9% to 400 million. Net letting positive with 35 million. Good activity. Debt to EBITDA at 10 times. Agreed and acquisition of 2.4 billion from Granitor, completed in the 1st of April. Good quality and good location continues to be attractive. And we continue with our project investments with good results. The results for the period, small increase of rental income to 1 billion 45 million. But let's remember that the comparison period 2024 had one offs over 20 million. The operating surplus increased to 731 million and income from property management, as mentioned, increased by 9% to 463 million. The result for the period amounts to 431 million, corresponding to 1.4 share and EPRA. 3,295.08 krona per share adjusted for paid dividends. A comparison of the rental income Q124 and Q125. Indexation gives 10 million. Termination fees minus 21 million. Acquisition plus 3 million. Currency effect minus 1 million. Additional 7 and completed projects, new leases and re-negotiations. plus 7 million. Q124 was a record level on new leases. And I then got questions if we and the market could keep that volume. The market can shift. I'm very confident that our skilled both focus and tempo. And now the numbers also give proof that the market is there. Q125 is the third highest volume of new leases ever. 134 million and net letting of plus 35 million. You never know ahead what will affect each quarter, but seen over time, 40 positive quarters in a row is our new record. Very grateful to the whole organization for this. It's interesting to see how we can sign new leases in both existing premises and in the new build projects. The is a strength. Without new areas, we wouldn't be able to have positive net letting in all these quarters. But on a yearly basis, the net letting is positive also in the existing portfolio, both for 2023 and 2024. And 2025 also looks positive so far, including April. Here are some of the tenants that we have signed during Q1. The largest leases for Malmö University. But as always, we see a mix of different businesses. It's companies in IT, construction, civil engineering, recruitment, and more governmental tenants as myndigheten för tillgängliga medier. The wide diversity is always a strength. Here we have the net letting in historic Lettings in green, termination in light blue and dark blue stacks are the net letting. Now 40 positive quarters in a row and the high volume with new and higher demands seems to continue. And Q2 has also started well with a new lease with Per Oslepp in Copenhagen of 24,000 square meters at AB Industrivet. So good potential also ahead. Happy with 40 quarters. So next goal is to beat that. And the list of our 10 largest automatic orders. Strong customers, and they contribute with 20% of our rental income. Eight out of 10 are governmental tenants, and the public sector contributes with 23% of total rental income. Rental value, as of 1st of April, our acquisition is 4,596,000,000 per year, plus 3.1% of rental income. But we also see a bit higher vacancy in line with the rest of the market. Looking at the like-for-like figures, all the properties we own is up 2%, and rental income is down 0.8%. The growth in rental value is supported by indexation of 1.6% in Sweden and approximately 1% in Denmark. Lower rental income as an effect of higher vacancy. And that comes both from a timing effect with many new leases where we can see a gap between moving out and new signed tenants moving in. That means that will improve in end 25 and continuous good effect 2026. But we also see higher vacancy in the market. In some areas, as in the industrial portfolio in Helsingborg, I think that higher vacancy will follow us for a bit longer time. And in other areas, as offices in Malmö occupancy will pick up quite quickly when the market turns. We see very few new projects from competitors, and my best estimate is that we can continue to take advantage of that. Let's look at changes in market value of our properties. We started the year with 59 billion, 168 million in accordance with our external valuation. And we let them evaluate 100% of the portfolio every year end. No acquisition during the period. Investment 638 million. Divestment minus 13. Changes in valuation plus 69 million. And together we currently translate. of minus 736 million that summarized to a value of 59 billion 126 million Swedish kronor. The value of the portfolio has developed as you can see on this slide since 2005 without raising any new equity. With investments, new leases and a few transactions we have also during the last years been able to increase the value bit by bit. Or 25, the transaction made 1st of April, will contribute in a good way. But we will see that in the next report. These figures, the running yield, show how we actually perform in relation to the valuation. So this is not the valuation yield. For the whole portfolio, the occupancy rate is 9%, excluding project and land. And with an operating surplus of 3,140,000,000, that gives a running yield of 5.6%. Fully left, the portfolio would give a running yield of 6.4%. Good earnings capacity in relation to the value of the portfolio and good cash flow generation is the foundation for further expansion. If we look in the office portfolio, the market value is 47.1 billion and overall the occupancy rate is 91%. 92% in Malmö, 87% in Helsingborg, 91% in Lund and 92% in Copenhagen. Same numbers as year end. A bit higher vacancy than last year, mostly affected by the gap between moving out and new coming in. These figures will improve later this year, but the largest effect from many new leases will come 2026. Occupancy for offices in Helsingborg is estimated to increase 2% in October, for example, from new leases we have signed so far. The operating surplus from offices summarized to 2,572,000,000 and a running yield of 5.5%, 6.2% fully let. The demand for logistic production continues to be good in Malmö with an occupancy of 96% in Malmö, lower in Helsingborg at 82%, 99% in Lund and 96% in Copenhagen, 88% rate as a whole with a running yield of 6.5%, 7.6% fully let and total value of 8,383,000,000. For us, the combination of businesses with production development and logistic will be the best tenant in the industrial portfolio. We continue to see harder competition in the third part logistic segment, quick changes in needs, a higher vacancy as an effect of a lot new build facilities. Worth mentioning is that our portfolio in Helsingborg still gives a decent running yield of 6.5%, even with a higher vacancy. Also good that tenants in our best segment continue with good demands. The development of our total portfolio running yields, 5.6%, brings stability, not least since the portfolio overall has a high quality and good locations. As noticed before, a high increase of the running yield since 2020. ESG results from Q1 certification in Swedish offices are now at 91% and Denmark have started the process in a good way. Energy consumption continues to decrease and we have a new target of maximum 75 kilowatt hours per square meter.

We continue our value is limited but for the most of the areas we have found a way where reporting actually can contribute

as possible carbon footprint free we have reached a goal of reducing climate impact with more than 50 percent construction of office buildings the last five years but even further balancing system will be necessary and to be able to work with that in a local way also contribute over history

that will be the best way for us and seeing materials as much as possible that will continue most fundamental way of working we have to kind of collaboration we have it

Here's a catalog of our value and properties in our four cities in Q1. 40% of the value in Malmö, 22% in Helsingborg, 17% in Lund and 21% in Copenhagen. As mentioned before, the diversity of different businesses in the region is a strength, but also the diversity in volume is interesting. Both in Q1 and Q2, we have signed leases, single leases of more than 20,000 square meters each in the office segment. And especially in the Copenhagen area, we see more potential of interesting volume also ahead. The combination of small and larger tenants, this will also contribute to our strength.

As of April, we add on property management work, in total contributing with £51,000.

area, 8,000 square meters of land for industrial development in Lund, and 12,000 square meters building rights for offices also in Lund. This portfolio will contribute with an estimated yearly operating surplus of 130 million Swedish kronor at the start. And here's the land areas included in the portfolio. At Bryssel Kålen, we estimate that we can build between 40 and 50,000 square meters industrial building, And we'll see what time for that will be right. And time for financials. Over to you, Arvid.

Thank you very much, Ulrika. And good morning, everyone. Looking at the... As Ulrika noted earlier in the presentation, rental income amounted to 1 billion 45 million Swedish kronor, up half a percentage point versus the same quarter 2024. Q1 24, we had termination fees of 21 million Swedish kronor, so that you should bear that in mind in the comparison between the quarters. And that income, of course, fed through downwards in the P&L during 24. The operating surplus in Q1 25 amounted to 731 million, 2% up versus the previous year. Happy to note that the operating surplus margin thereby was one percentage point higher than the corresponding quarter previous year. And income from property management amounted to 463 million, up 9% as financial costs have improved during the quarter. But positive value changes in the quarter, plus 69 million Swedish kronor. Also a slight positive effect from change of valuation of our derivatives portfolio, plus 38. And all in all, a profit for the period of 431 million. Looking at the balance sheets. Investment properties have, on a 12-month basis, increased in value by 0.4 billion Swedish kronor to 59.1 billion. At the same time, equity increased by 0.8 billion Swedish kronor approximately to 23.5 billion Swedish kronor. And borrowings increased by 0.6 billion Swedish kronor to 29.3 billion. Translating these numbers into two key ratios on the next slide. The equity assets ratio now stands at 38% unchanged versus 12 months previously. Our LTV. stands at 49.5%, slightly lower than 12 months previously. And the interest cover ratio in the quarter has improved to 2.8 times. 5 Q1 2024. And the APRA, and you see the per share numbers on the lower part of the slide. APRA NRV now stands at 95.08, which is an increase of 9% if you paid dividend previously. And on the next slide, the long-term developments of the APRA NRV. And despite this, for the past few years, the long-term trend is actually still very strong, with an average growth of 15% adjusted for paid dividends.

On the next slide, you can see that the long-term trend is very strong. ...versus the previous few quarters. Our record... ...past few quarters... ...come down a bit.

And just looking at the LTV, bear in mind that... ...as Ulrika said, from Granito...

which is debt financed. So momentarily, that, of course, affects the LTV upwards. In relation to EBITDA, and this ratio now stands at 10.0 times, which is a comfortable.

See also. in the Villeborg's history.

On the next slide, we see our sources of financing as of end March 25.

The Danish real mortgage system.

I think it's worthwhile noting that

that during Q1, the bond activity was reasonably high and over the past month, note that the bond market is volatile and sensitive to financial, economic, and political events around the globe.

you can see the deal with the average interest in 30 and that is fairly close to where the the marginal cost of debt would be for us with the current cyber of about And on the next slide, you can see how the development of our fixed interest periods and our loan maturities have evolved over the past five years. Fixed interest period now is on average 2.3 years, and the average loan maturity is 5.3 years. This is the previous quarter. This slide shows you our available funds, unutilized credit facilities, plus liquid funds as of end March. The number is high. It's at 4.6 billion Swedish kronor. But as you're all aware, on the 1st of April, we acquired properties from Greneter for an amount of approximately 2.4 billion kronor. That's, of course, good for us to have a preparedness to be able to conclude such a without any major activities having to take place on the financing side. But so obviously the 4.6 will decrease also and with the expected payment of approximately 1 billion, which will come in about a week's time. And with that, I hand back the word to you, Ulrika.

I'll give you an update on our investments in progress and a quick overview of our largest project. During Q1, we have invested 638 million and it remains 3,463,000 to invest in approved projects. A good volume also ahead. A quick improvement of the yield on cost continues and the ongoing portfolio secures also decent gain from projects. As always, a good mixture of refurbishment and new build. Let's start with the latest announcement made now in April, a 15-year lease with Per Årslöf in Copenhagen. But the project that AB Industry survey started earlier this year and will give a total refurbishment of one of the buildings that Dan C. Bank bought years ago. 24,000 square meters now fully lit, investment 231 million Swedish krona and yield on cost a bit above 6%. Completion in Q1 26. Another announcement is the lease with Malmö University at Arbitrita in Malmö. Arbitrita is the name of the goddess of the sea. But the building will be located right between the sea and central station. So it's the best possible location in Malmö. A bit above 20,000 square meters for Malmö University. And we won a competition a few years ago for developing this project together with the university and the municipality. Now the final agreement for construction and a 10 years lease is signed. Completion in Q4 27 and procurement of contractors is ongoing. In Lund, we are building a new modern office right beside the central station, posthorn at phase 2, 10,100 square meters, completion Q126, approximately 40% pre-let, and yield on cost 6.5%. And at Vätet 1, also in Lund, we will refurbish and add on areas for our new tenant arm. 5,700 square meters and a seven years lease, investment 144 million, excluding value of the land and yield on cost a bit over 10%, and over 6.6% yield on cost, including ingoing property value. A new modern facility, and we also improved the impression and the attractiveness of the whole Ideon area. In Malmö and Hylje, we have Black Hornet One, Vista, 884 million investment, The mobility has already been completed and has a good occupancy. The offices will be completed end 25 and during 26. Yield on cost 6.2% and 25% pre-let for the office part. A bit lower than we aim for, but the product is the best with great flexibility and the competition from new built in the area is low. An example of a map. This is an almost iconic building right beside the train station. 6,000 square meters restaurant.

An absolute Malmö perspective. And continue during 26. For University of Malmö. And invest 100%.

I've been able to continue this project for BPC completion Q2 26 and investment 79 million 3,600 square meters and yield on cost, 7%. Next to that, at Stora Råby, 3222, 11,900 square meters for note, completion in Q3, 26. Investment, 263 million and yield on cost also here is 7%. At Galoffen in Malmö, we build a facility for Kaldik, completion in Q3, 25, approximately 10,000 square meter production, logistic and office. Total investment, 264 million, and yield on cost, 7%. And at Sunna Noa, 1254, we built 70,000 square meters logistic, 100% pre-let, a 15-year lease with completion in Q4-25. 280 million invest and yield on cost improved close to 7%. Copenhagen, we invest in a new school for NGG, 25 years lease, 11,600 square meter and investment 290 million. Completion is expected at end 25. And at Gilosdrag, Gittenhöje tossed up the refurbishment for Novo Norge continues, 62,000 square meters. Our investment is limited to 423 million NGG. and completion is expected in Q4-25, but Norvo pays rent also during the refurbishment period. That was some of the ongoing projects. Let's also mention something about future investment. Here we have four possible projects in Lund and Helsingborg. We can develop some 70,000 square meters in the future. Zoning plans are approved first and on Västerbro in Lund. And here is some of the office possibilities in Malmö in the area of continues to have high attention, of course. And our summary of Q1 again. Rental income, 1 billion 45 million. Income from property management up 9% to 463 million. Letting positive with 35 million and continued high activity. EBITDA at 10 times. The acquisition of 2.4 billion from Granitor will be completed now on 1st of April. Good quality and good location continues to be attractive and we continue with our product investment with good results.

So by that, we are open for questions. To answer your question, please dial pound key six on your telephone keypad.

The next question comes from John Vong from Van Lanshot Kempen. Please go ahead.

Hi. Good morning, team. Thank you for taking my questions. You mentioned that occupancy is set to improve over the end and well into 2026. What's a more normalized occupancy rate in your view once all these lag between terminations and move-ins settles?

I think if you look at the long-term development, And looking at our whole portfolio, which now excluding projects and land, which now is at 90 percent. I mean, long term, being at 92 is probably close to the long term average. 93 is good. 94 is rare. So we're a touch below where we would like to be. but see good potential for improving the occupancy end 2025 and during 2026.

Let's also keep in mind that as long as the rents are continuing picking up, I mean, the demand is there and our tenants are willing to pay for good quality and good location.

So if we have some vacancy for some time.

Okay, that's clear. And would 92% be a reasonable number for 2026?

It depends on many things. So I think it's.

But also. Cost.

We buy vacancy because we want to develop things over time, so we probably.

Vacancy.

isn't the only thing that points that possible for growth.

Sorry, the net letting side, you mentioned high activity. Is that both on the positive and the negative side, or how should we read this?

And maybe also on the, how long can you, feasible target.

I think that at the moment we know that we would have a large termination now in Q1 from SAG and now when we have that I think number of is lower but we see good

new leases to these numbers it's i mean it takes years to to uh before you

are very important for our business as a whole so the answer to a question how many quarters in a row that what do you say about life it would be tricky to have this this type of track record if

and properties with vacancies gradually can fill up.

But our ambition or our strategy on continuing to grow remains. So, I mean, as you know, we continue to develop new properties and occasionally we acquire properties.

So, from there,

obviously aim to continue this trend as long as possible.

I have mentioned this before, but the most important thing with net letting on a daily basis is actually for our own organisation, so that we have the tempo and the awareness that it's very important for us, but But for the total business, looking at a longer period should be more relevant, maybe. But for us, we like the net letting measurement quarterly because it's, I mean, we like the tempo.

Okay, clear. Thank you.

The next question comes from Kayvan Shervenpour from SEB. Please go ahead.

Okay, thank you. It's rather lost Norby here from SEB, but the line was provided by a colleague of mine, so thank you for that. Some details on the Saab termination. Those were, in fact, weren't those four different contracts, and were all those terminated as expected and what was the value of that?

I think the total value was 31 or 34.

32 I believe.

So yes, the termination came in as we expected. They had the possibility to add on some areas, but that is not definitely yet. I think they will stay with a hub in Malmö as well.

Just so I understand correctly, that was the effect, but are they going to stay for a while on some areas or did I catch that wrong way?

All these leases, they will move in the early 2026 something. I think that they will stay with one hub in Malmö as well. But the largest portion of employees will move to Lund.

Okay, good. And then Malmö University, in that press release that you put out, I think you mentioned a basic rent of some 69 million. What about that other lease that was signed in early April in Denmark with, if I pronounce it correct, Orslas? What's the basic rent of that one?

Per Årslöf. And that is not included in the report numbers because that was signed in April.

Right.

Remember that. So the rest of the volume in signed leases for Q1 is without Per Årslöf.

Absolutely. But what's the basic rent of the Årslöf, the 24,000 square meters in Denmark?

Let's see if I can find it here.

It's in Swedish kronor is just above 30 million.

Okay, thank you. And just a final question, quick one on transactions. You obviously made a big transaction, that portfolio of 2.4 billion coming on board on the 1st of April. So are you done for 2025, or what do you expect for the rest of the year? You never know. On transactions?

No, you never know. We continue to look at different kinds of interesting things. So let's be open-minded.

Okay. Thank you.

The next question comes from Marcus Henriksen from ABG Sundal Collier. Please go ahead.

Thank you. Good morning. First, the question on, you have your table with rental income as of 1st of April, the one excluding projects. It's at 4,050 million and it declined 1.3% Q1Q. And your policy rate declined 30 basis points Q1Q. The question is, is this all FX driven or also driven by renegotiation?

I mean, you have quite a large, I don't have the exact number in my head, but you have quite a large FX effect in this table. Because the Swedish krona to the Danish krona was, I believe, 154 at the end of December and 145 at the end of March. So that makes out the bulk of, I mean, if you look at the Copenhagen portfolio in this table, you will see quite large differences driven by FX.

Yes, I see a decline there. So it's not driven by renegotiations, mainly. No. Clear? Yeah. Then a follow-up on the Per Årslöf. Just curious on the whole project. It used to be leased out, as you mentioned, to Danske Bank. And the rent was 29 million back then. And then you rented out to Byggningsstyrelsen and now Per Årslöf. And you mentioned a rent of around 30 million or just above 30 million in Swedish krona. And my, of course, 29 million is Danish krona. What type of total refurbishments will you do for the remaining part? You have around 36,000 square meters leased out now. And how can you see such a huge lift? What type of investments are you doing there, since the rent per square meter used to be very low?

I think that this... moment we're in today, when that area has really developed well and the attractiveness has raised, we started this project late 24, early 25, aiming for maybe to a multi-tenant building. So this is just one of the buildings that Danske Bank left. And Sometimes, after a few months in that project, Parallels have decided to be interested in the whole area.

And I, for the rest of the, approximately the same, you just have to do, tempo.

total we get a good yield on cost for the refurbishment cost we put in there.

I'll be happy with that also for the rest of the property and in the same time we are

We are working further with the positive to give a higher density to the area as a whole with more building opportunities at the land that we own. But also that thing has to go in the tempo that fits the municipality and the surroundings, of course. I've had help from the Lettbanan with a new station just side you know things are moving and when investments come to an area things happen there so I don't have any prognosis on timing effect for the last buildings there but good interest thank you for the caller was just very interested in fairly good development there and then on

eight million here in q1 that's a very high level for a q1 in a historical perspective can you usually share a guidance for 25 should we expect similar seasonal patterns as historically any help in

in q1 or q4 that is not uh i mean it's more in in the tempo in the in the process on the ongoing project so i i expect the volume to continue approximately at this uh this level all right thank you for that what is the latest from

the Danish mortgage system and the bond market for Vilborgs?

Of those markets, I'd say that the market is favorable. The banks are willing to lend and margin is six months ago is a bit tighter, a bit lower bank margins than six months ago. The Danish mortgage system system continues to work six month period in my presentation and I think it happens somewhere else in the world and suddenly everybody gets worried and spreads go wider but Generally, the bond market versus a year ago, of course, works a lot better and is also a financing option for us, the way markets work today.

And for the Danish system, that was similar as for the banks?

I mean, the system works well.

Okay, okay. Then last question. You highlight increased vacancies you're seeing in .

You used to be above 9% on both offices and logistics. So first, what has happened? What is the current status? And are you initiating any type of measures, more personnel for leasing or? Or is the competition just high because of new construction? What's going on? What's your type of measures?

I think on the logistics side, the competition is high because of new constructions.

We have been able to increase the quality of some properties, as we did for Nedermans, for example.

Very good investment. And I think that we will see more of that transform areas into a higher level of quality and suiting different kind of businesses in that. We also see transforming parts of the portfolio areas that will be something else in the future, more house-informed industrial areas. We can just keep that going for a couple of years until that development can start. So it's a bit of this and that.

The Berger area continues to be very good and continues to work both with fittings for new tenants in the cases we have today.

And regarding vacancies in the office portfolio in Helsingborg.

We have also been affected consciously by acquiring a few years back the Hermes property, which is a large property where we have some vacancies, which we're working with. But at the same time, we're confident that we are the right owners of such a property and that we over time can develop that for the benefit both of ourselves and the market as a whole.

And we have been quite successful filling that up with new tenants.

Kia have moved out from.

So I think that.

working well but um okay just a quick follow up there is so so if i get this correctly that's if we split it up in kind of structural um problem with demand versus uh that we have been and are in a recession uh we see from either supply driven or demand driven and then maybe you have a structural tilt towards the demand as well that's something you experience in Helsingborg or is it mainly in accordance with yeah particularly I think in a very small local perspective properties could be in a more of a

Maybe you could call that a structural problem when you're taking an area into a new development phase. Otherwise, I think if you look at the whole city, it's a part of a normal transforming. But of course, if you look into the total needs of... especially storage, Helsingborg will continue to be attractive. No end to that. But there has also been a quite large volume added to the market. And maybe the time for picking that up takes some time.

Thank you for that. Those were my questions. Thank you.

Thank you. The next question comes from Frederick Sion from Carnegie. Please go ahead.

Good morning, Ulrika and Arvid. I only have two questions for you this morning. So starting off with the guarantee acquisition, will that in any meaningful way impact your average cost of debt, i.e. the new loans will be done at higher or lower than the 3.45 that you have at the end of the quarter.

It will not impact the average cost of debt materially? In any direction. In any direction.

That's clear. Okay. And then the second question relates to income from JVs. It was fairly high for being a Q1. Were there any impacts from property revaluations in the quarter?

No. It was slightly higher profits in one of our JVs. But it's not a huge amount, I would claim. I agree. That's all for me.

Thank you.

There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

So thank you for questions and your attention. Does we have any written questions?

No, I have not received anything via email.

Good. So then just got a message that there was some problem with the sound, but the version that will be presented on the website afterwards will be corrected with a good sign. So sorry for that. But thank you for attention and wish you a continuously sunny day.

Thank you very much.