Wihlborgs Fastigheter AB (publ)

and welcome to the presentation of Hlbor's first half report 2026.

So let's start with the future and the acquisition of 95 properties in Malmö, Lund and Helsingborg. 635,000 square meters, initial yield including property management costs at 5%, just in line with the Swedish portfolio. And this is before we have done any efficiency improvement that we expect from ourselves. Additional upside is 50% vacancy to give development possibilities ahead. The total portfolio suits us almost like a tailor-made glove. The location is right into our most appreciated areas. The mix with both offices and industrial logistics is perfect. If we look at the location of our properties in Malmö City, including part of Dokkan and Nyhandeln, Vilborg owns the black colored buildings in this map, And here we can add on 11 properties in the same area, located as the red dots. In the area of Fosie in Malmö, we can add on Valentine's properties. In Lund, at the Ideal site, here is four properties from Castellum. Two of them are land for development. In the city center of Helsingborg, we have several large properties. And here is the location of 14 additional properties. And in the various locations in Helsingborg, we can add on 10 properties. So, almost like yin and yang for these portfolios. Now we can work with a larger portfolio for our tenants, but also to make room for the other investors that might be a better owner for some of the areas or properties. The interest for investments in the region is high. This is a way to create possibilities for future growth of income and growth of operating surplus for our shareholders. If we can choose, we are totally convinced that if you can get growth in the market you already know very well, you can perform better. And if you combine a large acquisition with both higher operating surplus immediately and larger possibilities for future development, it's a perfect match. We have done things like this several times before. The acquisition of Ideon from Econo 2013 increased the LTV to 63% initially, and the acquisition of Nya Vattentornet 2019 gave us a quite large additional vacancy in an area where the vacancy in our own portfolio was already high. Now the Ideon area is very successful and filled with tenants in different sectors. Our plan is to do the same thing with the Castellum portfolio and it will demand hard work and some time. But for us, this is a very well-known business in a very well-known market. The price of the portfolio is agreed to 13.3 billion, 5% under Castellum's valuation. And let's remember that Castellum from 2022 and ahead decreased the valuations of the property significantly. We think that Castellum's valuation can be fair. The price should be a bit lower than a valuation property by property, just in accordance with the agreement. And what about timing? Is summer 2026 not the time for cautiousness? Our call is that business is best done when a shop is open, and it's better to be ahead of the queue. Running a property portfolio means to look far ahead. We put some plants in the soil and be prepared to harvest in the long run. We think the opportunities for velroids improve significantly with this inspection, and there is no opportunistic thought behind that, just a dry, data-driven investment model. Let's go to our report, and we start with a summary of Q2 26. Rental income up 7% compared to a year ago, a new record level. Operating surplus plus 6%, also a new record. Income for property management plus 6%, net lasting positive of 5 million, but most important that the number of discussions and possibilities ahead have improved after the frosty start of the year. Market rents as well as rental income in like-for-like portfolio continue to develop positive. Net debt to ABTA at 10.7 times. And of course, we signed the agreement with Castellum, as I just mentioned, but high focus on daily business, which continues to be our strong core. With some more figures on that for the full period, rental income up 8% to 2,324,000,000. The operating surplus plus 8%, 1,664,000,000. And income from property management plus 9% to 1,077,000,000. New record for all of them. The result for the period was 850 million, corresponding to 2.76 kronor per share, and EFRA NRV has increased by 9% to 99.66 kronor per share adjusted for paid dividend. A comparison of the rental income, first halves 35 and first halves 26. Indexation, plus 22 million. Acquisition, plus 59 million. Currency effect, minus 16. Additional charges, plus 26. And, not at least, Completed project, new leases and renegotiation plus 91 million, which means that our investments and activities pays off. And a net lasting positive with 5 million, lower activity on both new leases and termination than a year ago, but most important, much better activity now than in the beginning of the year. So, positive signals for the fall, but us, as usual, no promises ahead. The number of discussion is higher and the volume of possible new areas per tenant has also increased. Now we also see signs of tenants who decreased their areas a few years ago. They're coming back and ask for additional areas. An upgrade that we like. And to comment on something that happens on other markets, the large Ericsson agreements in Stockholm which I see as a clear sign that the trend we have seen among small attendants for quite a long time also is in line with how larger companies make their decisions. Location, yes, attractiveness for the employees matters. Design, all the projects in Hagastaden have in common that they focus on human needs. And what about time? The leases signs clearly that airs on things that they would need off their spaces also in 20 years' time. And all of us understand that the Ericsson employees will do totally different things in 20 years, but they still think that they will have people working in common areas. And something about the price. Yes, they are willing to pay. It will be very interesting to see where this trend continues. Here are some of the tenants that we have signed new leases with during Q2. The defense industry continues to be interesting with the lease with Babel Scientific at Solte Mosevej for the full property and the medtech sector are represented by Campaglia. Here we have the net letting in a historical perspective. Lettings in green, terminations in light blue and dark blue stacks are the net letting. We know that we have attractive products to offer and when the market grows, which I will come back to. We will be a part of that growth on both the Swedish and Danish side of Öresund. And the list of 10 largest tenants in Hobartic order, strong customers and they contribute with 90% of rental income. 7 out of 10 are governmental tenants and the public sector contributes with 22% of rental income. Rental value as of 1st of July 26 is 5,167,000,000 and Rental Income 4,562,000,000 plus 6%. Strong figures, and this is an effect from acquisitions, indexation, but not the least new projects and tenants willing to pay for the right quality. Looking for like-for-like figures, all the properties we owned a year ago excluding projects compared with updated figures, we can see that rental value is up 2.6% and rental income is up 1.5%. Better than indexation of 0.9 and still with a high vacancy. That means that rents continue up. Changes in the market value of our properties. We started the year with $64,440,000,000 in accordance with the external valuation of 100% of our portfolio. We made acquisition, which adds on 534 million. Investment, 1,042,000,000. Divestment, minus 4. Changes in valuation, plus 28. And together with currency and foundations of 212 million. That's summarized to a value of 66,226,000,000 Swedish kronor. Valuation parameters are without changes since year-end, including assumed indexation of 1%. So very small changes in valuation. The growth comes mainly from investments and the transaction we made in Copenhagen. Here's the long-term trend for portfolio growth from 7 billion to 66.2 billion in 21 years' time and growth every year. These figures, the running yield, show how we actually perform in relation to the valuation, so not the valuation yield. Some of the projects, like HomeNet 1 in Malmö and PostHomeNet in Lund, have moved from project line to the running portfolio. So even if they're not fully completed and occupied, that's the main reason for occupancy dropping one percentage point to 89% excluding project and land. With an operating surplus of 3,389,000,000, that gives a running yield of 5.4%. Fully let, the portfolio would give a running yield of 6.3%. In the office portfolio, the market value is 53,241,000,000 with an occupancy rate of 89%, 88% in Malmö, 90% in Helsingborg, 88% in Lund, and 91% in Copenhagen. The operating surplus from offices summarized to 2,809,000,000 and a running yield of 5.3%, 6.1% fully left. And as mentioned, the occupancy in Malmö and Lund are affected by moving the project, Project line to the running portfolio. In Helsingborg, the occupancy has strengthened, and most of all, the ongoing discussion in the office market have improved. The logistic production portfolio has a value of 9,378,092% occupancy in Malmö, 82% in Helsingborg, 96% in Lund, and 99% in Copenhagen. In all, 87% occupancy with a running yield of 6.2%, 7.3% full of it. Development of total portfolios running yield 5.4% still brings stability, not least since the portfolio overall has a high quality and good locations, an increase of the running yield since 2021, but the vacancy has a negative impact and we aim to turn that around in line with improvements of the market. So, what about the market? In the last report from Öresundsinstitutet, we can once again remind us of Malmö as the driving city of employment growth in the Öresund region, Malmö in yellow, Stockholm as the ruled grey line, and also interesting to see the pickup in Lund the last years, the green line. We can also see that the number of unemployed decreases quicker, from a higher level though, and the number of newly started companies is also higher than elsewhere. As usual, it's most important to be in the right places. Almost all of the development in Skåne is in the western part, so Lund, Malmö, Landskrona and Helsingborg continue to be the places to invest for us in Sweden. On the Danish side, we note the record high GDP growth for the first quarter of 6.2% compared to the same quarter last year. And it's also worth mentioning that the infrastructure investments continue with, for example, these three completed projects. Kyrgyz Station, a new bridge across Storslöman, and now four tracks with new platforms passes through Copenhagen Airport. A catalogue of our value and properties in our four cities and Q2 2026. 39% of the value is in Malmö, 22% in Helsingborg, 17% in Lund, and 22% in Copenhagen. The region continues to attract attention from investments, for example SAAB and SAS. It will continue to be positive for the region, for Lilleborgs and for Sweden. Some sustainability highlights. We continue to improve our figures and have also got some international sustainability recognition, for example being one of three Swedish property companies on Time's list of world's most sustainable companies, which also includes business models and financial performance. We also got the approval for our updated science-based target. And some figures showing improvement here. Maybe I'm most proud of the figure for low climate impact from our latest completed projects. 202 kilograms per square meter carbon dioxide equivalents. Really low levels from successful projects, but more on that topic in the report. And time for finances. Over to you, Arvid. Thank you.

Thank you very much, Ulrika. If we look at the income statement for the second quarter isolated, we had rental income of 1 billion 174 million. That's up 7%, corresponding to 77 million increase quarter on the second quarter 2025. I think it's important to highlight also that after the increase of 77, The operating surplus amounted to $864 million, up 6%, representing a surplus ratio of 74%. The income from property management amounted to $556 million, up 6%, and that includes transaction costs of about 5 million stemming from the acquisition from Casellum which Ulrika talked about earlier. But rental income and operating surplus and income from property management actually show record levels historically for Hvillborgs which also of course is very satisfying. With positive value changes in the quarter of plus 10 million, so very small, but still on the positive side. Negative value changes of the derivatives, but all in all, a profit for the period of 301 million. Looking at the balance sheet, investment properties amounted to 66.2 billion Swedish kronor, up 3.5 billion versus 12 months previously. Equity amounted to 24.2 billion, up 1.2 billion. And loans or borrowings amounted to 35.7 billion, up 2.4 billion versus 12 months previously. On the next slide, we can see how that translates into key figures. The equity ratio now stands at 35.4%. Leverage is at 53.9, worth noting that the dividend that we paid in Q2 affects the LTV by approximately 1.5 percentage points. And the interest cover ratio stands at 2.9 times. We had with these ratios a strong enough balance sheet to finance the acquisition from Castellum with debt. Thank you very much. versus 12 months previously adjusted for paid dividend. On the next slide, you can see the historic developments of EPRA NRV over this long time period since 2009. We can actually still show an average growth of 15% on a yearly basis adjusted for paid dividends. On the next slide, you can see our key financial ratios in the long-term perspective. The graph starts year end 2011. Equity ratio well above the 30% threshold that we set for ourselves. LTB still before the acquisition, of course, well below the 60% threshold. I think it's also worthwhile noting that although The interest cover ratio has varied a lot over this period. 2.9 times is a strong ratio, and I think it's also worth remembering that in 2022-2023, when interest rates went up sharply, we still had a low point of the interest cover ratio of 2.5 times, which I think is still a very healthy level. Looking at the next slide, you can see the historic developments of the net debt to EBITDA, which now stands at 10.7 times, a level where we're quite comfortable. Looking at our sources of financing as of end June, we have increased the portion of bond financing slightly over the quarter, now representing 20% of our borrowings. About a third comes from the Danish real mortgage system, and a bit less than half of the borrowings from bilateral bank agreements. And I think it's worthwhile repeating that the access to capital on attractive terms is still good, both from the banking system and from the bond market. Look at the structure of our loan portfolio. You can see the details on this slide. The average interest rate excluding costs for credit agreements is 3.25%. It's a very small change over the quarter. The average fixed interest period is now 2.5 years, and the average loan maturity is 4.9 years. And on the next slide, you can see the development over a five-year period of the fixed interest period and loan maturities. And it's no drama in those two graphs, I would claim. And on the next slide, you can see our available funds. That is unutilized credit facilities as of end June plus liquid funds. And we now have access to a bit over 4 billion Swedish kronor in unutilized facilities as of end June. And that also, of course, is a good starting point for the second half of the year. And with that, I hand the word back to you, Ulrika.

Thank you. And an update on our investment in progress and a quick overview of one of our newest projects and one of our largest projects. During the period we have invested 1,042,000,000 and it remains 1,608,000,000 to invest in approved projects. We continue to expect 6 or a bit above 6% yield on costs for new built offices and 7 or a bit above for industrial. It's a good mix of refurbishments and new builds in the portfolio. This time just a short list of projects. You can see more on that topic and investment possibilities in the last report from April. We have a new project at VATAT 1 for a company in the automotive tech industry, just beside the project we have completed for ARM. We invest 82 million and get 7.4% yield on costs including value of the property and 30% yield excluding value of the property. Completion in Q1 2017. And the large project at Amplit is the one in Malmö for Malmö University is running well in accordance with the plan. A bit above 20,000 square meters, 100% pre-let to Malmö University in a 10-year lease, investment 1,130,000,000, and completion is planned to late Q4 27. Discussion continues regarding a possible prolonging of the lease to 20 years. And with that, we summarize the quarter again. A number of new records, rental income up 7%, operating surplus plus 6%, income from property management plus 6%, And net letting positive, but most important is the list of ongoing discussion is good and the more positive levels ahead. Also worth mentioning again that the rent levels continue to develop, especially in the Swedish side. Net debt to EBT at 10.7 times. And we continue to focus on our earnings in the daily business, even if we from time to time also make good deals for future growth of our cash flow. If you wish to ask a question, please dial pound key 5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key 6 on your telephone keypad.

Good morning and thank you for the presentation. I have a couple of questions starting off with the 13 billion acquisition. So first, the initial yield is 5%. Where do you see that yield going over the next two to three years?

Our goal is of course to improve that in several ways. I think it's a good platform to start with, but of course we shall improve that. But I have no numbers on exactly how quick we can make changes, but it's a good platform for the start.

Thank you. And when it comes to the vacancy rate in the portfolio of 15%, do you have a view what is the likely normalized vacancy rate over time for that portfolio?

I think that's the same level as the market around 7-8% in a better market than today, but around that level.

And then on LTV, on the ambition to reduce your LTV to 65% over the next two years, and you also comment potentially on reducing LTV via divestment. Can you give some flavor on what kind of assets you would be willing to sell? Is it fully developed, certain geographies, broker segments, etc.?

I think we have several possibilities in that, and What will come first has not been decided yet. First, we wait for the congrats budget to make their approvments, and then we can take action after that. But we have possibilities in both different We think it's good that we have several possibilities.

Okay, I see. And what is your view on dividend distribution considering that the LTV comes up quite close to your policy?

We will of course take that decision in February in connection with the full year report for 2026. And I think, I mean, our dividend policy so far has always been to distribute approximately 50% of the income from property management by applying full tax on the income from property management. We will of course look at both the cash flow generation capacity, the future outlook, what the valuations actually are at year-end before taking such a decision.

Okay, thank you. And a final question for me, and that is based on the occupancy rate, on the signed leases and terminations that you know about. Today, do you expect the occupancy rate to improve or deteriorate over the next few quarters?

I think that we should expect it to be quite flat becoming, in a shorter perspective, improved during 2027. Yeah. Okay.

Yeah, all right, thank you. Those were my questions.

Good morning. Just some follow-up questions on the acquisition. So just as it stands today, all things considered, what is your view on the best way to manage the balance sheet going forward?

Well, The best way to manage the balance sheet is to work, as we always do, very hard on improving our cash flow and our earnings. That's, of course, the starting point. Then we have, of course, a number of tools in the toolbox, as we've stated, and as Ulrika already talked about also, when it comes to possible divestments. and other capital structure measures which could of course be taken if the time is right and the market is right. Sorry.

You mentioned the portfolio composition. Have you identified any share of the portfolio or a specific segment or something like this that you would consider divesting?

We have several possibilities with products and areas that are investing at the market today. But no decision is made in that. But it's good to have different kind of possibilities.

Yeah. Good. And then just on central admin costs in the quarter. So roughly 5 million... The remaining increase, what should we expect on an annual basis going forward?

You should expect a bit higher than before. We have a bit higher costs on IT. Regulatory and of course higher levels of technical demands, but not any higher expenditures than we see now.

And maybe one final question on the acquisition. I understand you initially have some bridge financing. Could you comment on the initial terms and the structure you expect more long term?

I won't come into details on the exact terms of Thank you. That's all from me.

Good morning, can you hear me? Yes. Okay. Thank you. I didn't get a notification, so I didn't know that it was my turn. My apologies. So I just want to follow up on the acquisition. You mentioned that you believe that this portfolio yields about the same as Hvlborgs today, but if I look at what you're yielding, at least in Sweden, it seems to be A bit above 5%, whereas this portfolio is around 5%. Obviously, there's differences in occupancy, but when you state that it's about the same in terms of yield, how do you come up with that? Could you sort of give us a little bit more information as to how you view this portfolio versus your own?

The 5% on the portfolio that we in the acquisition is the 5% is including all All admin costs as well. And that is in line with the Swedish portfolio.

Okay, so it's including admin and that's the difference basically towards what you report yourself. Yeah, okay. All right, good. And then regarding potential divestments, you mentioned that you need to wait obviously from the Swedish competition board. In order to sort of finalize the acquisition. But could you consider doing divestments before year-end that are not related to that from the existing portfolio?

We always look at the structure of the portfolio. I mean, it's part of the day-to-day work to both look at acquisitions and divestments and trying over time to optimize the composition of our total portfolio. So that cannot be ruled out.

Okay, so basically the way that we should look at it is that your efforts to lower LTV over time, obviously it's going to be a large part of that operational, but in terms of divestments, you could make divestments before year-end, for example, in order to achieve this even before you've completed the transaction.

Absolutely possible.

All right. Thank you. And then Again, on these assets, I assume that you know these assets quite well. It's been a competitor of you for, I don't know, 20 years. How do you feel the quality of these assets versus the ones you own now? Do you believe that this has been really strong competition versus your tenants, or do you feel that there are The competition in the market is such that this doesn't really move the needle, or do you think you get clearly a stronger hold on some of these areas compared to what you have today?

I would say that I think the quality is good, very much in line with what we have today. Modern offices, good location, the area for industrial and logistic is a perfect match. So I think that on that side it's very compatible. Maybe we have been, maybe Hylborgs has been a bit more active in the market and thereby more successful in doing business. So I think that is what we first of all will add on to this portfolio. And we also know that when we have Many tenants that have changing needs, we can do this puzzle moving tenants around. And with a larger volume of possibilities, a greater menu of different things that our tenants can choose from, the fitting will be even better. We have been very successful in doing these things, so I I think this will be great also for our tenants ahead.

Okay, and could you say something about how much of the portfolio that you're acquiring is related to sort of land or projects in terms of size? You mentioned that there are project opportunities, but in another phrasing is how much is non-yielding other than the vacancy in the buildings in terms of

The largest project possibilities is the two properties in Lund, that was on the map, in very good location and have project possibilities. And then there is another number of project possibilities, but more adding on to already existing buildings.

And there's one larger ongoing project? Yes. In Malmö?

Correct. A logistic project with no tenants today.

Okay. And in Lund, what's the size of that land bank in terms of the projects?

Oh, I don't have the squamish on that. But... roughly around 10,000 square meters, I would say.

Okay, that's fine. That's fine. My final question is regarding your comments on sort of the activity in the market and net letting. You're stating that you've witnessed increased activity in general from tenants, and obviously that could be a positive, but I guess it could be a negative as well. So in terms of your net letting for the rest of the year, By stating that you see increased activity, does that mean that you expect net letting to be positive as well? Is it sort of a positive trend, or do you run the risk of tenants actually terminating to a larger extent as well?

I would say that the number of larger leases that we sold for possible terminations on that we have seen the last years, where the volume has been quite high on Moving Around and Having New Needs. I think that has slowed down. So what we see now on higher activity is definitely new leases. So the volume is much better ahead. But also let's remember that the start of the year was very poor. But now the list of ongoing discussions Thank you. Thank you.

As a reminder, if you wish to ask a question, please dial pound key 5 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 and closing comments.

There are no questions coming in via the email function.

Okay. Okay. Thank you for today, and you're always welcome to come back with questions.

Wish you all a nice summer.

Absolutely. Bye.

Bye.