Castellum — Call Transcript 2024

Good morning, everyone, and welcome to this presentation of Castellum's Q3 report. My name is Christoffer Strömbäck, and I'm Head of Investor Relations here at Castellum since the beginning of this year. Please feel free to contact me at any time should you have any questions. There will be a Q&A session at the end of the webcast, and if you would like to ask a question by phone, please dial pound key five on your telephone keypad and ask your question. It's also possible to ask questions in the chat function. Please keep the questions few and brief so that everyone has a chance to ask. Let's start. Please go ahead, Joacim. Thank you, Christoffer. Hello, everyone, and good morning. This is Joacim Sjöberg, I'm CEO of Castellum. First, let me give you a very brief introduction to those of you who don't know us that well. We are one of the largest listed property companies in the Nordic region. We're a fully integrated company with local hands-on presence, where our assets are located. The property portfolio is in attractive growth regions in the Nordics, and we're exposed to the robust market in Norway via Entra, which is an associated company. You can see on this map the location of our property portfolio. As of last September, our asset value sums up to SEK 155 billion, including our share in Entra. Of those 155 billion, over 74% is located in the Nordic metropolitan areas, meaning urban areas with at least one million people. The remaining is in growing regional cities in Sweden. We have a yearly contract value of approximately SEK 9.5 billion. So, summary of the year so far, we have an overall stable result. Our net operating income is up 3.9%, and the income from property management is up 11.7%. We will look into these figures in more detail later in the presentation. Our net leasing for the period is negative after two quarters with positive net leasing. The net leasing does not include the net leasing of 45,000 sq m logistics project in Gothenburg, which we are developing in a joint venture with the Port of Gothenburg. We own the joint venture fifty-fifty, and hence, it will not be included in our consolidated figures. We have continued to sell non-strategic properties. The proceeds will be used for new investments. We will also come back to this, but I want to highlight that this should be seen as a streamlining of our portfolio and not strengthening of the balance sheet in particular. Some recent events. In August, Moody's announced a strengthening of our credit rating when adding a positive outlook to our Baa3 rating. The change to positive outlook reflects the continued good operation and the financial performance that we have been very focused on over the last quarters. On the back of Moody's positive outlook, we decided to re-enter the Eurobond market with a new bond of EUR 500 million. We had a very strong interest, the largest demand ever for a Nordic real estate company, according to our advisors. The maturity was 6.25 years, and the credit margin was 175 basis points. We also bought back Eurobonds with shorter duration, with a total nominal value of EUR 186 million. Sustainability is at the core of everything we do, and earlier this year, we reached our target of one hundred solar panel systems, which was intended to be reached by 2025, so we reached it two years in advance, and now we've set new targets, being an installation of a further one hundred solar panels by 2030. As mentioned, one of our leasing activity is the signing of a rental agreement with OneMed for a logistic project in Halvorsäng in Gothenburg. This is the joint venture with Gothenburg Harbor that I mentioned earlier, and we have the capacity to develop further projects at the same location. Briefly about our tenants. Our tenants represent a cross-section of Nordic business and authorities, and our exposure to individual tenants is very low. Our ten largest tenants represent less than 15% of our total contract value, and no tenant generates more than 2.5%. We have a strong tenant base, and many of our larger tenants being publicly funded operations. 25% of our total contract value stems from public sector tenants, and the largest is the Swedish Police Authority. And, as of last of September, the remaining average length of our contract was 3.7 years. So very briefly, our P&L. Jens will cover this in greater detail, but from a helicopter perspective, the total income increases. We, the divestments affect our income negatively. We have reduced property costs, we have reduced admin costs, we have a lower debt volume, thus lower interest costs. Summing up, we report income from property management up 11.7% compared to last year. So Jens will walk you through this on the following slide. Over to you, Jens. Hi, everyone, and thank you, Joacim. Stable quarter with no significant changes or new one-off effects. Vacancies are still increasing, however, at a slower pace compared with the first two quarters. Transactions continue to boost loan-to-value, though reducing NOI growth, still 3.9% for the period. Looking at development of operating income during the period and excluding the insurance compensation in Finland, the like-for-like portfolio income increased by SEK 78 million, equivalent to 2.8%. The change in the like-for-like portfolio is mainly driven by indexation, amounting to SEK 303 million or 5.3%. For the like-for-like portfolio, the direct property cost decreased by SEK 30 million, equivalent to -1.9%, of which electricity cost decreased by SEK 115 million. As many of you already know, this is due to unusually high electricity cost earlier last year. Excluding one-off effects, the electricity cost like-for-like increased by 7%, equivalent to SEK 83 million. Tariff-bound costs for water and heating continue to increase, though passed on to our tenants to a large extent. Regardless, we keep a strong focus on our energy projects. Central administrative costs were reduced by SEK 101 million, excluding SEK 63 million in one-offs from last year, the remaining SEK 38 million is due to a reduced headcount and general and continuing cost review. Renegotiations corresponding to an annual rent of SEK 293 million, which translates to 15.5% of total lease stock up for negotiation, were conducted during the period, with an average positive change in rent of 1%. Additionally, contracts with an annual rent of almost SEK 1.2 billion were extended during the period with no change in terms, equivalent to 63%. Looking at leasing activity, we are reasonably satisfied with the gross leasing in that it reflects the effort to create new business, though the high termination rate hit us harder than earlier and resulting in a net negative leasing of minus SEK 10 million for the period. Economic occupancy rate only down with 0.1 point during the quarter and for office unchanged since March. Bankruptcies still low, SEK 22 million for the period, and tenant quality seem to be very stable, and outstanding receivables are low and decreasing compared to the same period last year. Looking at rental income and net leasing, this is an old slide, but it's worth to mention it again. When we look at net leasing over a longer time period, it continues to be volatile on a quarterly basis. Income, on the other hand, is much more stable and increasing over time. However, affected negatively by two years of divestment and the general slowdown in the economy. I've said this before, but it's worth mentioning again. It is clear that we have been holding back on new projects since 2022. Hence, net leasing mainly derives from existing properties rather than new projects, which has been a strong driver of net leasing in the past. Joacim will tell you more on the topic of new projects later in the presentation. Looking at property values, during the period, Castellum has written down property values with approximately SEK 1.6 billion, equivalent to -1.2%. The value changes during the period is mainly driven by cash flow expectations. However, only looking at the third quarter, the change in property values were close to neutral, perhaps a signal that property values have bottomed out. Valuation yields is still in line with year-end at 5.62% and also seems to have stabilized. Property sales continue to confirm our book values. Jumping into highlights financing for the third quarter, loan-to-value now at 36.6%, down by 0.8% during the year, despite a slight downward pressure on property values. ICR at 3.3, expected to be relatively stable around this number going forward. Average interest currently at 3.4%, up by 0.4% during the quarter. Increase during the third quarter is driven by expiring interest swaps with low fixed coupon, and also the new Eurobond issue at 4.1%, combined with a tender of a short European bond running at the fixed interest rate of 0.75%. As Joacim mentioned, we have also received a positive outlook from Moody's, which is very positive for us. Jumping into debt maturity structure, and also already mentioned by Joacim, because it's very important for us that the Eurobond market has opened up at reasonable terms, and we will come back and issue more Eurobonds next year. It's also very comforting to see that we can reach and issue bonds with an expiry of six years from now. No bank loans refinanced during the quarter, though terms continue to improve regarding price and offering of longer duration. Close to SEK 29 billion of cash and unutilized credit facilities available at the end of the quarter, and we will gradually reduce the RCF volume going forward. All in all, a very good financial position for Castellum. Over to you, Joacim. Thank you, Jens. So looking at our projects, we have nine larger ongoing projects, and that means projects that are larger than SEK 50 million. It's a mix of the metropolitan areas and regional cities. As you can see from the list, the average occupancy rate is 91%. The rental value of the ongoing projects is SEK 181 million, and the average lease duration is approximately 13 years. Just a few words about the two projects on the pictures. Tusenskönan 2 in Mölndal. I've mentioned this before, but it's a new construction of a fully let veterinary hospital. And the second picture below is Gullbergsvass. It's a project on behalf of Scandic Hotel at Lilla Bommen in Gothenburg. It's an existing office space now being converted into a new hotel, creating a vibrant area in the middle of Gothenburg. Another project that I like to mention is Gladan in Stockholm, the only of our ongoing project that is not 100% rented. That is a multi-tenant project, where client demand always comes closer to completion, but we see a strong local market for such a product. Looking at what we're doing on the transaction side, we've invested almost SEK 1.6 billion so far this year. Almost everything is in projects. That includes new construction, as well as in extensions and reconstructions. The one point six is split approximately half in larger projects and half is CapEx or tenant improvements. We continue to sell non-strategic properties, we're thereby streamlining the portfolio. No particular desire to further strengthen the balance sheet by selling, but it will continue to strengthen itself, the balance sheet that is, through our operations. Proceeds will be used for new investments, and we're constantly trimming the portfolio. Assets, markets, and allocation will vary over time, and we will constantly monitor where we will create long-term shareholder value. However, we aim for an increase of the portfolio value and project that we'll be net investors going forward. Few words on our sustainability performance. We work towards clear sustainability targets in the short and the long term to continue our sustainable development. We are actively engaged in reducing our climate impact through enhancing energy efficiency, and that was the energy efficiency, minus 2.3% in the like-for-like yearly normalized way we measure. We have a continued focus on sustainability certified buildings, and 64% of the portfolio was sustainability certified at the end of the third quarter. As mentioned earlier, we also invest in solar power, and we have prolonged and extended the 100 on solar project to include another 100 solar panel systems by the end of 2030. This is a good investment, both from a sustainability point of view, and it also it's also very profitable, with a margin return of 8-10% on the solar investments. Just summarizing, it's important to safeguard the cash flow by retaining tenants and to fill vacancies. The rental market is stable in our regional cities, but still a bit more cautious in the capital, Stockholm, Helsinki, and Copenhagen. Some of the summer optimism has faded now when we move into winter, but we have increased our focus on new investments, both on projects and acquisitions, because we have a solid financial position, a strong underlying business, and feel comfortable that 2025 will be a stronger year for the Swedish economy. So, with that, and with a picture from the interior of our office project, Erskine & Friends in Stockholm, I leave the floor open for questions. Christoffer? Thank you. So if you have a question, please dial pound key five, and the first question comes from Lars Norrby at SEB. Good morning, all three of you. Just sort of- Good morning ... a question tied to, I think you mentioned something about the summer optimism fading or something like that. Is it, so is it the case today, compared to say, let's say, three months ago, that the market, the letting market is a bit more challenging? Is that the right reading? No, I would say rather that the optimism that we felt at the end of summer has perhaps not materialized in the way that we foresaw. So I wouldn't say that the market is more challenging now than it was in August, but the inspiring optimism that we felt has perhaps not materialized in the way that we predicted. Okay, so the market situation, if anything, is pretty much unchanged compared to, let's say, when you, when you rolled out your second quarter report. I'd say so, yes. Okay. And then second question, which is then I'd like to ask you about the start button. You're mentioning in the CEO statement shifting into growth mode, as I put it. I think one, you in some sense pushed the start button by starting that project or announcing that project in Gothenburg with OneMed. So looking forward, is it very much dependent on you being able to sign new leasing contracts in order to grow through projects? Or, and if you cannot do that at the pace that you're hoping, are you more prone to go for acquisitions in that case? I would say we're still focusing on development of our existing portfolio, because that will give us both a better yield on cost, and we also have a higher certainty in our operation when we already have the asset at our hands. However, we are dependent on a market being able to absorb projects. So we are focusing on that, but we are also looking at a much higher degree now on investments of standing on the market. So we have only made smaller acquisitions in terms of land, but we will be reviewing whether we should increase our volume by adding also standing assets to our portfolio. Okay, thank you. Thank you, Lars. The next one is Nadhir Kheriji from UBS. Hello, good morning. Can you hear me clearly? Yes, we can. Wonderful. Good morning. Thank you very much for this morning's presentation. Good morning. Yes, so the first question is on the negative relettings. So obviously, as you mentioned in the presentation, there's a downward trend now in Q3, which I guess could be due to volatility. But the first question is, going forward into Q4 and then perhaps into 2025 as well, could you provide some guidance as to what a realistic target or direction of travel could be for this figure? And my second question is on you becoming a net investor going forward. Could you provide a timeframe? Perhaps would that be in the first half of 2025 or later than that? Do you have any insights and guidance on where that net investment could begin? Thank you. Yep. Thank you. Well, the first one on guidance on net leasing, we of course will aim at being net positive in every quarter. We do feel, however, that there is a pressure, especially in the metropolitan markets- ... which we cannot ignore. So it would be wrong of me to promise I did that a quarter in 2023. I will not repeat that mistake. So but we aim definitely at being net positive. When that will happen is partly due to what happens, especially in the Swedish economy. So I don't think we should make too much of a promise. In terms of our net investments, our goal is definitely to be net positive on the investment sides already in 2025. And that will be mainly us investing in existing projects, but it may also be from as I mentioned to Lars Norrby earlier, in acquisitions of standing assets. Got it. Very clear, thank you. And one final question on the debt situation. So it's good to see the leverage starting to tick down. Could you provide some guidance on the average cost of debt going forward? And given there's a number of refinancings, I guess, to be done, not in this quarter, but going forward, could you provide some guidance going forward from here? And will this increase before decreasing? I mean, the average interest cost increased during the quarter, but we believe it will remain relatively stable throughout this year and next. Of course, it's highly dependent upon how underlying interest cost will develop, but we have taken that into account in our internal analysis, of course, so rather stable. Perfect. Thank you very much. Very clear. Thank you. Next one is Markus Henriksson from ABG. Thank you. Good morning, everyone. First, a question on investments levels. What levels are you seeing in 2025, given the outlook you have given us today? Well, what we have communicated is that we have a sort of a minimum investment level of SEK 2.5 billion annually. That was a number that we presented when we had a much higher interest rate in general, not paid interest by us, but in the market in general. So I'd say that the minimum is SEK 2.5. We aim at increase that, but it depends also, of course, if we find both the tenants and the right opportunities. So SEK 2.5 is a minimum. I'd say that it could be a billion or so, or a billion and a half more, but the base case is SEK 2.5. Very clear. Thank you for that. And then if we take that into account and then look at the outstanding hybrid bond you have, could you update a bit on how you're thinking? Are you looking to repurchase part of it or issue a new one ahead of time? Or would you then hoard the cash flow to be able to handle the first call in 2026? How are you taking a stance on the hybrid bond? Good question, and right now we haven't taken any decision how to handle it. Of course, we note this, that the demand for the hybrid is increasing and it's trading very close to par. And therefore, a year ago, it could have constituted some difficulties or challenges. Right now, we have all the possibilities to handle it the way that will suit our needs, but also taking into account our stakeholders on the equity side and on the debt side. All right. Fair enough, then coming back to the investment levels again, and could you help us a bit on what type of yield on cost you underwrite in logistics or the hotel project? You talked about the conversion or other office projects. What type of yield on cost are you underwriting? We have communicated that historically we have had a yield on cost of 8%-10%. That, of course, was on average in a very strong market. So maybe it's a bit too optimistic to keep believing that we will always be on those levels, but the internal hurdle is, of course, 7.5%, because that will, on unleveraged basis, that would give us our target of a 10% return on equity. Very clear. Thank you. Last question: Have you entered any new swaps during the quarter? I see a few of them have matured. And what do you think about the current levels of the five-year swap? Is it something we should expect into Q4 and forward at the current five-year swap levels? Yes, thank you. I mean, we issued the EUR 500 million Eurobond, and in connection with that one, we have bought some derivatives. I think that the underlying interest rate and also the five-year swap rate, I mean, it has, the latter has come up or close to 50 basis points, and therefore, for the time being, we are more or less fully invested in swap derivatives for the time being. And I think that we have the luxury of being able to wait for a while. We think that it will come down again on more reasonable levels. But I mean, we have been buying derivatives throughout the high interest rate environment in order to keep a healthy amount of our loans secured. Thank you. Very clear. You've been right on that before, so let's hope you're right again. Take care. Thanks. Thanks, Markus. The next one is Jan Ihrfelt from Kepler Cheuvreux. Hi, good morning. Thanks for taking my questions. Just coming back to the letting market, you start off your CEO letter by mentioning that rents in large cities were already high prior to indexation- Yeah -and that you're in much more dialogue than usual with your customers. So taking that together, what's your thoughts on reversion in your portfolio? And do you see needs to provide incentives to retain tenants? In general, I'd say that we are less exposed to the super high rent levels that you can see in CBD areas in metropolitan areas. I'd say that there is, of course, some discussions with tenants that have been subject to very high indexation from a high rent level. We have less of that compared to some of our colleagues in the business. It does occur, of course, that we have those discussions, but we have also a substantial portion of our assets in areas where the rent levels are not that high. Thus, the indexation, of course, is in percent just as high, but in absolute numbers is less challenging. So we don't foresee a downward pressure on our total rent levels, but of course, it may happen here and there. But our aim is to be able to absorb that through our very diverse tenant base, and also the fact that we are located in a substantial number of markets. Okay, that's clear. Then moving on to investments. When you're talking about ramping up the pace, as well as growing the portfolio, how should we think about funding? Does this imply that you're moving closer towards the upper boundary of your LTV policy? Well, that really depends on what type of assets and what type of investments we're looking at. So, investments that will create sort of an immediate cashflow is, of course, financed through our more or less cash at hand. If we're looking at very long investment projects that have a considerable time to when they start generating cash, we need to make sure that we don't overload our balance sheet once again, making ourselves vulnerable to changes in the market. So, it really, I, I'm not at liberty to say because I simply don't have the entire investment opportunities for us going forward several years. But, yeah, I can assure you that we will be very prudent in terms of what kind of risk we assume, going forward. Okay, that's fair. And then just on capital recycling, it's fair to assume, I suppose, that you continue the shaping off of your tail end of the portfolio? Yeah, that's true. But we are now using those proceeds for investment purposes and not in particular to amortize debt. That may happen over a single quarter back and forth, but we're quite satisfied with the look of our balance sheet at the moment. Okay, that's clear. That's it from my side. Thank you. Thanks. Thank you, Jan. Next question from Albin Sandberg at Kepler. Hi there. Three questions for me. The comment on the cost of finance being stable, I took it from current level through 2025. What base assumptions do you have on the policy rates in that sense? Because I guess you haven't hedged all of your debt, right? Yes. I mean, it's not really Castellum's view, but rather, the general view in the market that we make use of, and we look at the forward yield curve. ... Great, thanks. And then on the actual tax as a percentage of your income from property management, looking at the year-to-date numbers, is that a relevant number to assume for Castellum going forward? In the short run, yes, but it will increase over time, but at a slow pace. We've been looking at this and comparing it with our peers, and I think we will all be moving in the right direction over time. Okay. And, the final question I have, I mean, it's not a lot, I guess, 10 basis points that occupancy drops quarter on quarter, which I guess might have to do with the mix, and also, I guess, the negative net leasing last year. But, is that now stabilizing? I mean, obviously, the net leasing has been quite, well, overall flattish, I would say, this year. Or, are there any, let's say, late cycle impact one should be aware of, if we're getting close to the floor? I hope that we are getting closer to the floor, at least that we can sort of touch the bottom. The thing is that as Jens mentioned in the slide where we show the quarterly net leasing figure compared to the bars showing the contract value, this is super volatile. And there might be quarters where some terminations accumulate, and then you have another quarter where we take some projects into operation. And so net leasing will continue to be volatile on a quarterly basis. And but I think we should all view the aggregated number as a basis for us going forward rather than quarterly numbers. Great. Thank you very much. Thank you. Thank you, Albin. So I have a few questions on the chat as well. Do you expect to lower the amount of unutilized credit facilities available now that you are back in the Euro bond market? I believe in the past you mentioned that would be the catalyst for lowering your RCF volume. Absolutely. That's very true, Christoffer. And I mean, we need to keep a certain amount of rolling credit facilities in order to keep our rating, and in the future, even improving it. Of course, everything is connected to our possibility to issue Eurobonds and also to issue longer Eurobonds. And now we've been able to issue one Eurobond, and the first bond for a very long period of time. I think it's reasonable to believe the next time we issue a benchmark bond, most likely beginning of next year, we will be in a situation where we can start cutting down on the rolling credit facilities, but still a very cheap life insurance for us, and I think it's advisable to do this very cautiously. Super. We have one more question. I guess it's for you, Jens. Can you please give me some color on the implied cost for interest rates maturing within twelve months? That stands at 6.9% as of Q3. What does this include? What's behind the 1.8% delta from Q2, despite approximately forty basis points lower STIBOR? I mean, it's actually a lot of this is explained by cross-currency interest rate swaps. It's, I mean, I would say that that is a large portion of the explanation. Thank you, Jens. And I think that's, that's all questions for today. So thank you all, and thanks for the questions. Thank you for listening. We see you all again, at the latest on February nineteen, for our year-end report. Thank you.

Speaker 1: Good morning, everyone, and welcome to this presentation of Castellum's Q3 report. My name is Christoffer Strömbäck, and I'm Head of Investor Relations here at Castellum since the beginning of this year. Please feel free to contact me at any time should you have any questions. There will be a Q&A session at the end of the webcast, and if you would like to ask a question by phone, please dial pound key five on your telephone keypad and ask your question. It's also possible to ask questions in the chat function. Please keep the questions few and brief so that everyone has a chance to ask. Let's start. Please go ahead, Joacim. Good morning, everyone, and welcome to this presentation of Castellum's Q3 report. good morning everyone and welcome to this presentation of castellum's q3 report My name is Christoffer Strömbäck, and I'm Head of Investor Relations here at Castellum since the beginning of this year. my name is christoffer strömbäck and i'm head of investor relations here at castellum since the beginning of this year Please feel free to contact me at any time should you have any questions. please feel free to contact me at any time should you have any questions There will be a Q&A session at the end of the webcast, and if you would like to ask a question by phone, please dial pound key five on your telephone keypad and ask your question. there will be a q&a session at the end of the webcast and if you would like to ask a question by phone please dial pound key five on your telephone keypad and ask your question It's also possible to ask questions in the chat function. it's also possible to ask questions in the chat function Please keep the questions few and brief so that everyone has a chance to ask. please keep the questions few and brief so that everyone has a chance to ask Let's start. let's start Please go ahead, Joacim. please go ahead joacim

Speaker 2: Thank you, Christoffer. Hello, everyone, and good morning. This is Joacim Sjöberg, I'm CEO of Castellum. First, let me give you a very brief introduction to those of you who don't know us that well. We are one of the largest listed property companies in the Nordic region. We're a fully integrated company with local hands-on presence, where our assets are located. The property portfolio is in attractive growth regions in the Nordics, and we're exposed to the robust market in Norway via Entra, which is an associated company. You can see on this map the location of our property portfolio. As of last September, our asset value sums up to SEK 155 billion, including our share in Entra. Thank you, Christoffer. thank you christoffer Hello, everyone, and good morning. hello everyone and good morning This is Joacim Sjöberg, I'm CEO of Castellum. this is joacim sjöberg i'm ceo of castellum First, let me give you a very brief introduction to those of you who don't know us that well. first let me give you a very brief introduction to those of you who don't know us that well We are one of the largest listed property companies in the Nordic region. we are one of the largest listed property companies in the nordic region We're a fully integrated company with local hands-on presence, where our assets are located. we're a fully integrated company with local hands-on presence where our assets are located The property portfolio is in attractive growth regions in the Nordics, and we're exposed to the robust market in Norway via Entra, which is an associated company. the property portfolio is in attractive growth regions in the nordics and we're exposed to the robust market in norway via entra which is an associated company You can see on this map the location of our property portfolio. you can see on this map the location of our property portfolio As of last September, our asset value sums up to SEK 155 billion , including our share in Entra. as of last september our asset value sums up to sek 155 billion including our share in entra Of those 155 billion, over 74% is located in the Nordic metropolitan areas, meaning urban areas with at least one million people. The remaining is in growing regional cities in Sweden. We have a yearly contract value of approximately SEK 9.5 billion. So, summary of the year so far, we have an overall stable result. Our net operating income is up 3.9%, and the income from property management is up 11.7%. We will look into these figures in more detail later in the presentation. Our net leasing for the period is negative after two quarters with positive net leasing. Of those 155 billion, over 74% is located in the Nordic metropolitan areas, meaning urban areas with at least one million people. of those 155 billion over 74% is located in the nordic metropolitan areas meaning urban areas with at least one million people The remaining is in growing regional cities in Sweden. the remaining is in growing regional cities in sweden We have a yearly contract value of approximately SEK 9.5 billion . we have a yearly contract value of approximately sek 9.5 billion So, summary of the year so far, we have an overall stable result. so summary of the year so far we have an overall stable result Our net operating income is up 3.9%, and the income from property management is up 11.7%. our net operating income is up 3.9% and the income from property management is up 11.7% We will look into these figures in more detail later in the presentation. we will look into these figures in more detail later in the presentation Our net leasing for the period is negative after two quarters with positive net leasing. our net leasing for the period is negative after two quarters with positive net leasing The net leasing does not include the net leasing of 45,000 sq m logistics project in Gothenburg, which we are developing in a joint venture with the Port of Gothenburg. We own the joint venture fifty-fifty, and hence, it will not be included in our consolidated figures. We have continued to sell non-strategic properties. The proceeds will be used for new investments. We will also come back to this, but I want to highlight that this should be seen as a streamlining of our portfolio and not strengthening of the balance sheet in particular. Some recent events. In August, Moody's announced a strengthening of our credit rating when adding a positive outlook to our Baa3 rating. The net leasing does not include the net leasing of 45,000 sq m logistics project in Gothenburg, which we are developing in a joint venture with the Port of Gothenburg. the net leasing does not include the net leasing of 45,000 sq m logistics project in gothenburg which we are developing in a joint venture with the port of gothenburg We own the joint venture fifty-fifty, and hence, it will not be included in our consolidated figures. we own the joint venture fifty-fifty and hence it will not be included in our consolidated figures We have continued to sell non-strategic properties. we have continued to sell non-strategic properties The proceeds will be used for new investments. the proceeds will be used for new investments We will also come back to this, but I want to highlight that this should be seen as a streamlining of our portfolio and not strengthening of the balance sheet in particular. we will also come back to this but i want to highlight that this should be seen as a streamlining of our portfolio and not strengthening of the balance sheet in particular Some recent events. some recent events In August, Moody's announced a strengthening of our credit rating when adding a positive outlook to our Baa3 rating. in august moody's announced a strengthening of our credit rating when adding a positive outlook to our baa3 rating The change to positive outlook reflects the continued good operation and the financial performance that we have been very focused on over the last quarters. On the back of Moody's positive outlook, we decided to re-enter the Eurobond market with a new bond of EUR 500 million. We had a very strong interest, the largest demand ever for a Nordic real estate company, according to our advisors. The maturity was 6.25 years, and the credit margin was 175 basis points. We also bought back Eurobonds with shorter duration, with a total nominal value of EUR 186 million. The change to positive outlook reflects the continued good operation and the financial performance that we have been very focused on over the last quarters. the change to positive outlook reflects the continued good operation and the financial performance that we have been very focused on over the last quarters On the back of Moody's positive outlook, we decided to re-enter the Eurobond market with a new bond of EUR 500 million. on the back of moody's positive outlook we decided to re-enter the eurobond market with a new bond of eur 500 million We had a very strong interest, the largest demand ever for a Nordic real estate company, according to our advisors. we had a very strong interest the largest demand ever for a nordic real estate company according to our advisors The maturity was 6.25 years, and the credit margin was 175 basis points. the maturity was 6.25 years and the credit margin was 175 basis points We also bought back Eurobonds with shorter duration, with a total nominal value of EUR 186 million. we also bought back eurobonds with shorter duration with a total nominal value of eur 186 million Sustainability is at the core of everything we do, and earlier this year, we reached our target of one hundred solar panel systems, which was intended to be reached by 2025, so we reached it two years in advance, and now we've set new targets, being an installation of a further one hundred solar panels by 2030. As mentioned, one of our leasing activity is the signing of a rental agreement with OneMed for a logistic project in Halvorsäng in Gothenburg. This is the joint venture with Gothenburg Harbor that I mentioned earlier, and we have the capacity to develop further projects at the same location. Briefly about our tenants. Our tenants represent a cross-section of Nordic business and authorities, and our exposure to individual tenants is very low. Sustainability is at the core of everything we do, and earlier this year, we reached our target of one hundred solar panel systems, which was intended to be reached by 2025, so we reached it two years in advance, and now we've set new targets, being an installation of a further one hundred solar panels by 2030. sustainability is at the core of everything we do and earlier this year we reached our target of one hundred solar panel systems which was intended to be reached by 2025 so we reached it two years in advance and now we've set new targets being an installation of a further one hundred solar panels by 2030 As mentioned, one of our leasing activity is the signing of a rental agreement with OneMed for a logistic project in Halvorsäng in Gothenburg. as mentioned one of our leasing activity is the signing of a rental agreement with onemed for a logistic project in halvorsäng in gothenburg This is the joint venture with Gothenburg Harbor that I mentioned earlier, and we have the capacity to develop further projects at the same location. this is the joint venture with gothenburg harbor that i mentioned earlier and we have the capacity to develop further projects at the same location Briefly about our tenants. briefly about our tenants Our tenants represent a cross-section of Nordic business and authorities, and our exposure to individual tenants is very low. our tenants represent a cross-section of nordic business and authorities and our exposure to individual tenants is very low Our ten largest tenants represent less than 15% of our total contract value, and no tenant generates more than 2.5%. We have a strong tenant base, and many of our larger tenants being publicly funded operations. 25% of our total contract value stems from public sector tenants, and the largest is the Swedish Police Authority. And, as of last of September, the remaining average length of our contract was 3.7 years. So very briefly, our P&L. Jens will cover this in greater detail, but from a helicopter perspective, the total income increases. We, the divestments affect our income negatively. We have reduced property costs, we have reduced admin costs, we have a lower debt volume, thus lower interest costs. Summing up, we report income from property management up 11.7% compared to last year. Our ten largest tenants represent less than 15% of our total contract value, and no tenant generates more than 2.5%. our ten largest tenants represent less than 15% of our total contract value and no tenant generates more than 2.5% We have a strong tenant base, and many of our larger tenants being publicly funded operations. 25% of our total contract value stems from public sector tenants, and the largest is the Swedish Police Authority. we have a strong tenant base and many of our larger tenants being publicly funded operations 25% of our total contract value stems from public sector tenants and the largest is the swedish police authority And, as of last of September, the remaining average length of our contract was 3.7 years. and as of last of september the remaining average length of our contract was 3.7 years So very briefly, our P&L. so very briefly our p&l Jens will cover this in greater detail, but from a helicopter perspective, the total income increases. jens will cover this in greater detail but from a helicopter perspective the total income increases We, the divestments affect our income negatively. we the divestments affect our income negatively We have reduced property costs, we have reduced admin costs, we have a lower debt volume, thus lower interest costs. we have reduced property costs we have reduced admin costs we have a lower debt volume thus lower interest costs Summing up, we report income from property management up 11.7% compared to last year. summing up we report income from property management up 11.7% compared to last year So Jens will walk you through this on the following slide. Over to you, Jens. So Jens will walk you through this on the following slide. so jens will walk you through this on the following slide Over to you, Jens. over to you jens

Speaker 7: Hi, everyone, and thank you, Joacim. Stable quarter with no significant changes or new one-off effects. Vacancies are still increasing, however, at a slower pace compared with the first two quarters. Transactions continue to boost loan-to-value, though reducing NOI growth, still 3.9% for the period. Looking at development of operating income during the period and excluding the insurance compensation in Finland, the like-for-like portfolio income increased by SEK 78 million, equivalent to 2.8%. The change in the like-for-like portfolio is mainly driven by indexation, amounting to SEK 303 million or 5.3%. For the like-for-like portfolio, the direct property cost decreased by SEK 30 million, equivalent to -1.9%, of which electricity cost decreased by SEK 115 million. As many of you already know, this is due to unusually high electricity cost earlier last year. Hi, everyone, and thank you, Joacim. hi everyone and thank you joacim Stable quarter with no significant changes or new one-off effects. stable quarter with no significant changes or new one-off effects Vacancies are still increasing, however, at a slower pace compared with the first two quarters. vacancies are still increasing however at a slower pace compared with the first two quarters Transactions continue to boost loan-to-value, though reducing NOI growth, still 3.9% for the period. transactions continue to boost loan-to-value though reducing noi growth still 3.9% for the period Looking at development of operating income during the period and excluding the insurance compensation in Finland, the like-for-like portfolio income increased by SEK 78 million, equivalent to 2.8%. looking at development of operating income during the period and excluding the insurance compensation in finland the like-for-like portfolio income increased by sek 78 million equivalent to 2.8% The change in the like-for-like portfolio is mainly driven by indexation, amounting to SEK 303 million or 5.3%. the change in the like-for-like portfolio is mainly driven by indexation amounting to sek 303 million or 5.3% For the like-for-like portfolio, the direct property cost decreased by SEK 30 million, equivalent to -1.9%, of which electricity cost decreased by SEK 115 million. for the like-for-like portfolio the direct property cost decreased by sek 30 million equivalent to -1.9% of which electricity cost decreased by sek 115 million As many of you already know, this is due to unusually high electricity cost earlier last year. as many of you already know this is due to unusually high electricity cost earlier last year Excluding one-off effects, the electricity cost like-for-like increased by 7%, equivalent to SEK 83 million. Tariff-bound costs for water and heating continue to increase, though passed on to our tenants to a large extent. Regardless, we keep a strong focus on our energy projects. Central administrative costs were reduced by SEK 101 million, excluding SEK 63 million in one-offs from last year, the remaining SEK 38 million is due to a reduced headcount and general and continuing cost review. Renegotiations corresponding to an annual rent of SEK 293 million, which translates to 15.5% of total lease stock up for negotiation, were conducted during the period, with an average positive change in rent of 1%. Additionally, contracts with an annual rent of almost SEK 1.2 billion were extended during the period with no change in terms, equivalent to 63%. Excluding one-off effects, the electricity cost like-for-like increased by 7%, equivalent to SEK 83 million. excluding one-off effects the electricity cost like-for-like increased by 7% equivalent to sek 83 million Tariff-bound costs for water and heating continue to increase, though passed on to our tenants to a large extent. tariff-bound costs for water and heating continue to increase though passed on to our tenants to a large extent Regardless, we keep a strong focus on our energy projects. regardless we keep a strong focus on our energy projects Central administrative costs were reduced by SEK 101 million, excluding SEK 63 million in one-offs from last year, the remaining SEK 38 million is due to a reduced headcount and general and continuing cost review. central administrative costs were reduced by sek 101 million excluding sek 63 million in one-offs from last year the remaining sek 38 million is due to a reduced headcount and general and continuing cost review Renegotiations corresponding to an annual rent of SEK 293 million, which translates to 15.5% of total lease stock up for negotiation, were conducted during the period, with an average positive change in rent of 1%. renegotiations corresponding to an annual rent of sek 293 million which translates to 15.5% of total lease stock up for negotiation were conducted during the period with an average positive change in rent of 1% Additionally, contracts with an annual rent of almost SEK 1.2 billion were extended during the period with no change in terms, equivalent to 63%. additionally contracts with an annual rent of almost sek 1.2 billion were extended during the period with no change in terms equivalent to 63% Looking at leasing activity, we are reasonably satisfied with the gross leasing in that it reflects the effort to create new business, though the high termination rate hit us harder than earlier and resulting in a net negative leasing of minus SEK 10 million for the period. Economic occupancy rate only down with 0.1 point during the quarter and for office unchanged since March. Bankruptcies still low, SEK 22 million for the period, and tenant quality seem to be very stable, and outstanding receivables are low and decreasing compared to the same period last year. Looking at rental income and net leasing, this is an old slide, but it's worth to mention it again. When we look at net leasing over a longer time period, it continues to be volatile on a quarterly basis. Income, on the other hand, is much more stable and increasing over time. Looking at leasing activity, we are reasonably satisfied with the gross leasing in that it reflects the effort to create new business, though the high termination rate hit us harder than earlier and resulting in a net negative leasing of minus SEK 10 million for the period. looking at leasing activity we are reasonably satisfied with the gross leasing in that it reflects the effort to create new business though the high termination rate hit us harder than earlier and resulting in a net negative leasing of minus sek 10 million for the period Economic occupancy rate only down with 0.1 point during the quarter and for office unchanged since March. economic occupancy rate only down with 0.1 point during the quarter and for office unchanged since march Bankruptcies still low, SEK 22 million for the period, and tenant quality seem to be very stable, and outstanding receivables are low and decreasing compared to the same period last year. bankruptcies still low, sek 22 million for the period and tenant quality seem to be very stable and outstanding receivables are low and decreasing compared to the same period last year Looking at rental income and net leasing, this is an old slide, but it's worth to mention it again. looking at rental income and net leasing this is an old slide but it's worth to mention it again When we look at net leasing over a longer time period, it continues to be volatile on a quarterly basis. when we look at net leasing over a longer time period it continues to be volatile on a quarterly basis Income, on the other hand, is much more stable and increasing over time. income on the other hand is much more stable and increasing over time However, affected negatively by two years of divestment and the general slowdown in the economy. I've said this before, but it's worth mentioning again. It is clear that we have been holding back on new projects since 2022. Hence, net leasing mainly derives from existing properties rather than new projects, which has been a strong driver of net leasing in the past. Joacim will tell you more on the topic of new projects later in the presentation. Looking at property values, during the period, Castellum has written down property values with approximately SEK 1.6 billion, equivalent to -1.2%. The value changes during the period is mainly driven by cash flow expectations. However, only looking at the third quarter, the change in property values were close to neutral, perhaps a signal that property values have bottomed out. However, affected negatively by two years of divestment and the general slowdown in the economy. however affected negatively by two years of divestment and the general slowdown in the economy I've said this before, but it's worth mentioning again. i've said this before but it's worth mentioning again It is clear that we have been holding back on new projects since 2022. it is clear that we have been holding back on new projects since 2022 Hence, net leasing mainly derives from existing properties rather than new projects, which has been a strong driver of net leasing in the past. hence net leasing mainly derives from existing properties rather than new projects which has been a strong driver of net leasing in the past Joacim will tell you more on the topic of new projects later in the presentation. joacim will tell you more on the topic of new projects later in the presentation Looking at property values, during the period, Castellum has written down property values with approximately SEK 1.6 billion, equivalent to -1.2%. looking at property values during the period castellum has written down property values with approximately sek 1.6 billion equivalent to -1.2% The value changes during the period is mainly driven by cash flow expectations. the value changes during the period is mainly driven by cash flow expectations However, only looking at the third quarter, the change in property values were close to neutral, perhaps a signal that property values have bottomed out. however only looking at the third quarter the change in property values were close to neutral perhaps a signal that property values have bottomed out Valuation yields is still in line with year-end at 5.62% and also seems to have stabilized. Property sales continue to confirm our book values. Jumping into highlights financing for the third quarter, loan-to-value now at 36.6%, down by 0.8% during the year, despite a slight downward pressure on property values. ICR at 3.3, expected to be relatively stable around this number going forward. Average interest currently at 3.4%, up by 0.4% during the quarter. Increase during the third quarter is driven by expiring interest swaps with low fixed coupon, and also the new Eurobond issue at 4.1%, combined with a tender of a short European bond running at the fixed interest rate of 0.75%. Valuation yields is still in line with year-end at 5.62% and also seems to have stabilized. valuation yields is still in line with year-end at 5.62% and also seems to have stabilized Property sales continue to confirm our book values. property sales continue to confirm our book values Jumping into highlights financing for the third quarter, loan-to-value now at 36.6%, down by 0.8% during the year, despite a slight downward pressure on property values. jumping into highlights financing for the third quarter loan-to-value now at 36.6% down by 0.8% during the year despite a slight downward pressure on property values ICR at 3.3, expected to be relatively stable around this number going forward. icr at 3.3 expected to be relatively stable around this number going forward Average interest currently at 3.4%, up by 0.4% during the quarter. average interest currently at 3.4% up by 0.4% during the quarter Increase during the third quarter is driven by expiring interest swaps with low fixed coupon, and also the new Eurobond issue at 4.1%, combined with a tender of a short European bond running at the fixed interest rate of 0.75%. increase during the third quarter is driven by expiring interest swaps with low fixed coupon and also the new eurobond issue at 4.1% combined with a tender of a short european bond running at the fixed interest rate of 0.75% As Joacim mentioned, we have also received a positive outlook from Moody's, which is very positive for us. Jumping into debt maturity structure, and also already mentioned by Joacim, because it's very important for us that the Eurobond market has opened up at reasonable terms, and we will come back and issue more Eurobonds next year. It's also very comforting to see that we can reach and issue bonds with an expiry of six years from now. No bank loans refinanced during the quarter, though terms continue to improve regarding price and offering of longer duration. Close to SEK 29 billion of cash and unutilized credit facilities available at the end of the quarter, and we will gradually reduce the RCF volume going forward. All in all, a very good financial position for Castellum. As Joacim mentioned, we have also received a positive outlook from Moody's, which is very positive for us. as joacim mentioned we have also received a positive outlook from moody's which is very positive for us Jumping into debt maturity structure, and also already mentioned by Joacim, because it's very important for us that the Eurobond market has opened up at reasonable terms, and we will come back and issue more Eurobonds next year. jumping into debt maturity structure and also already mentioned by joacim because it's very important for us that the eurobond market has opened up at reasonable terms and we will come back and issue more eurobonds next year It's also very comforting to see that we can reach and issue bonds with an expiry of six years from now. it's also very comforting to see that we can reach and issue bonds with an expiry of six years from now No bank loans refinanced during the quarter, though terms continue to improve regarding price and offering of longer duration. no bank loans refinanced during the quarter though terms continue to improve regarding price and offering of longer duration Close to SEK 29 billion of cash and unutilized credit facilities available at the end of the quarter, and we will gradually reduce the RCF volume going forward. close to sek 29 billion of cash and unutilized credit facilities available at the end of the quarter and we will gradually reduce the rcf volume going forward All in all, a very good financial position for Castellum. all in all a very good financial position for castellum Over to you, Joacim. Over to you, Joacim. over to you joacim

Speaker 2: Thank you, Jens. So looking at our projects, we have nine larger ongoing projects, and that means projects that are larger than SEK 50 million. It's a mix of the metropolitan areas and regional cities. As you can see from the list, the average occupancy rate is 91%. The rental value of the ongoing projects is SEK 181 million, and the average lease duration is approximately 13 years. Just a few words about the two projects on the pictures. Tusenskönan 2 in Mölndal. I've mentioned this before, but it's a new construction of a fully let veterinary hospital. And the second picture below is Gullbergsvass. It's a project on behalf of Scandic Hotel at Lilla Bommen in Gothenburg. Thank you, Jens. thank you jens So looking at our projects, we have nine larger ongoing projects, and that means projects that are larger than SEK 50 million . so looking at our projects we have nine larger ongoing projects and that means projects that are larger than sek 50 million It's a mix of the metropolitan areas and regional cities. it's a mix of the metropolitan areas and regional cities As you can see from the list, the average occupancy rate is 91%. as you can see from the list the average occupancy rate is 91% The rental value of the ongoing projects is SEK 181 million , and the average lease duration is approximately 13 years. the rental value of the ongoing projects is sek 181 million and the average lease duration is approximately 13 years Just a few words about the two projects on the pictures. just a few words about the two projects on the pictures Tusenskönan 2 in Mölndal. tusenskönan 2 in mölndal I've mentioned this before, but it's a new construction of a fully let veterinary hospital. i've mentioned this before but it's a new construction of a fully let veterinary hospital And the second picture below is Gullbergsvass. and the second picture below is gullbergsvass It's a project on behalf of Scandic Hotel at Lilla Bommen in Gothenburg. it's a project on behalf of scandic hotel at lilla bommen in gothenburg It's an existing office space now being converted into a new hotel, creating a vibrant area in the middle of Gothenburg. Another project that I like to mention is Gladan in Stockholm, the only of our ongoing project that is not 100% rented. That is a multi-tenant project, where client demand always comes closer to completion, but we see a strong local market for such a product. Looking at what we're doing on the transaction side, we've invested almost SEK 1.6 billion so far this year. Almost everything is in projects. That includes new construction, as well as in extensions and reconstructions. The one point six is split approximately half in larger projects and half is CapEx or tenant improvements. We continue to sell non-strategic properties, we're thereby streamlining the portfolio. It's an existing office space now being converted into a new hotel, creating a vibrant area in the middle of Gothenburg. it's an existing office space now being converted into a new hotel creating a vibrant area in the middle of gothenburg Another project that I like to mention is Gladan in Stockholm, the only of our ongoing project that is not 100% rented. another project that i like to mention is gladan in stockholm the only of our ongoing project that is not 100% rented That is a multi-tenant project, where client demand always comes closer to completion, but we see a strong local market for such a product. that is a multi-tenant project where client demand always comes closer to completion but we see a strong local market for such a product Looking at what we're doing on the transaction side, we've invested almost SEK 1.6 billion so far this year. looking at what we're doing on the transaction side we've invested almost sek 1.6 billion so far this year Almost everything is in projects. almost everything is in projects That includes new construction, as well as in extensions and reconstructions. that includes new construction as well as in extensions and reconstructions The one point six is split approximately half in larger projects and half is CapEx or tenant improvements. the one point six is split approximately half in larger projects and half is capex or tenant improvements We continue to sell non-strategic properties, we're thereby streamlining the portfolio. we continue to sell non-strategic properties we're thereby streamlining the portfolio No particular desire to further strengthen the balance sheet by selling, but it will continue to strengthen itself, the balance sheet that is, through our operations. Proceeds will be used for new investments, and we're constantly trimming the portfolio. Assets, markets, and allocation will vary over time, and we will constantly monitor where we will create long-term shareholder value. However, we aim for an increase of the portfolio value and project that we'll be net investors going forward. Few words on our sustainability performance. We work towards clear sustainability targets in the short and the long term to continue our sustainable development. We are actively engaged in reducing our climate impact through enhancing energy efficiency, and that was the energy efficiency, minus 2.3% in the like-for-like yearly normalized way we measure. No particular desire to further strengthen the balance sheet by selling, but it will continue to strengthen itself, the balance sheet that is, through our operations. no particular desire to further strengthen the balance sheet by selling but it will continue to strengthen itself the balance sheet that is through our operations Proceeds will be used for new investments, and we're constantly trimming the portfolio. proceeds will be used for new investments and we're constantly trimming the portfolio Assets, markets, and allocation will vary over time, and we will constantly monitor where we will create long-term shareholder value. assets markets and allocation will vary over time and we will constantly monitor where we will create long-term shareholder value However, we aim for an increase of the portfolio value and project that we'll be net investors going forward. however we aim for an increase of the portfolio value and project that we'll be net investors going forward Few words on our sustainability performance. few words on our sustainability performance We work towards clear sustainability targets in the short and the long term to continue our sustainable development. we work towards clear sustainability targets in the short and the long term to continue our sustainable development We are actively engaged in reducing our climate impact through enhancing energy efficiency, and that was the energy efficiency, minus 2.3% in the like-for-like yearly normalized way we measure. we are actively engaged in reducing our climate impact through enhancing energy efficiency and that was the energy efficiency minus 2.3% in the like-for-like yearly normalized way we measure We have a continued focus on sustainability certified buildings, and 64% of the portfolio was sustainability certified at the end of the third quarter. As mentioned earlier, we also invest in solar power, and we have prolonged and extended the 100 on solar project to include another 100 solar panel systems by the end of 2030. This is a good investment, both from a sustainability point of view, and it also it's also very profitable, with a margin return of 8-10% on the solar investments. Just summarizing, it's important to safeguard the cash flow by retaining tenants and to fill vacancies. The rental market is stable in our regional cities, but still a bit more cautious in the capital, Stockholm, Helsinki, and Copenhagen. We have a continued focus on sustainability certified buildings, and 64% of the portfolio was sustainability certified at the end of the third quarter. we have a continued focus on sustainability certified buildings and 64% of the portfolio was sustainability certified at the end of the third quarter As mentioned earlier, we also invest in solar power, and we have prolonged and extended the 100 on solar project to include another 100 solar panel systems by the end of 2030. as mentioned earlier we also invest in solar power and we have prolonged and extended the 100 on solar project to include another 100 solar panel systems by the end of 2030 This is a good investment, both from a sustainability point of view, and it also it's also very profitable, with a margin return of 8-10% on the solar investments. this is a good investment both from a sustainability point of view and it also it's also very profitable with a margin return of 8-10% on the solar investments Just summarizing, it's important to safeguard the cash flow by retaining tenants and to fill vacancies. just summarizing it's important to safeguard the cash flow by retaining tenants and to fill vacancies The rental market is stable in our regional cities, but still a bit more cautious in the capital, Stockholm, Helsinki, and Copenhagen. the rental market is stable in our regional cities but still a bit more cautious in the capital stockholm helsinki and copenhagen Some of the summer optimism has faded now when we move into winter, but we have increased our focus on new investments, both on projects and acquisitions, because we have a solid financial position, a strong underlying business, and feel comfortable that 2025 will be a stronger year for the Swedish economy. So, with that, and with a picture from the interior of our office project, Erskine & Friends in Stockholm, I leave the floor open for questions. Christoffer? Some of the summer optimism has faded now when we move into winter, but we have increased our focus on new investments, both on projects and acquisitions, because we have a solid financial position, a strong underlying business, and feel comfortable that 2025 will be a stronger year for the Swedish economy. some of the summer optimism has faded now when we move into winter but we have increased our focus on new investments both on projects and acquisitions because we have a solid financial position a strong underlying business and feel comfortable that 2025 will be a stronger year for the swedish economy So, with that, and with a picture from the interior of our office project, Erskine & Friends in Stockholm, I leave the floor open for questions. so with that and with a picture from the interior of our office project erskine & friends in stockholm i leave the floor open for questions Christoffer? christoffer

Speaker 1: Thank you. So if you have a question, please dial pound key five, and the first question comes from Lars Norrby at SEB. Thank you. thank you So if you have a question, please dial pound key five, and the first question comes from Lars Norrby at SEB. so if you have a question please dial pound key five and the first question comes from lars norrby at seb

Speaker 6: Good morning, all three of you. Just sort of- Good morning, all three of you. good morning all three of you Just sort of- just sort of-

Speaker 2: Good morning Good morning good morning

Speaker 6: ... a question tied to, I think you mentioned something about the summer optimism fading or something like that. Is it, so is it the case today, compared to say, let's say, three months ago, that the market, the letting market is a bit more challenging? Is that the right reading? ... a question tied to, I think you mentioned something about the summer optimism fading or something like that. a question tied to i think you mentioned something about the summer optimism fading or something like that Is it, so is it the case today, compared to say, let's say, three months ago, that the market, the letting market is a bit more challenging? is it so is it the case today compared to say let's say three months ago that the market the letting market is a bit more challenging Is that the right reading? is that the right reading

Speaker 2: No, I would say rather that the optimism that we felt at the end of summer has perhaps not materialized in the way that we foresaw. So I wouldn't say that the market is more challenging now than it was in August, but the inspiring optimism that we felt has perhaps not materialized in the way that we predicted. No, I would say rather that the optimism that we felt at the end of summer has perhaps not materialized in the way that we foresaw. no i would say rather that the optimism that we felt at the end of summer has perhaps not materialized in the way that we foresaw So I wouldn't say that the market is more challenging now than it was in August, but the inspiring optimism that we felt has perhaps not materialized in the way that we predicted. so i wouldn't say that the market is more challenging now than it was in august but the inspiring optimism that we felt has perhaps not materialized in the way that we predicted

Speaker 6: Okay, so the market situation, if anything, is pretty much unchanged compared to, let's say, when you, when you rolled out your second quarter report. Okay, so the market situation, if anything, is pretty much unchanged compared to, let's say, when you, when you rolled out your second quarter report. okay so the market situation if anything is pretty much unchanged compared to let's say when you when you rolled out your second quarter report

Speaker 2: I'd say so, yes. I'd say so, yes. i'd say so yes

Speaker 6: Okay. And then second question, which is then I'd like to ask you about the start button. You're mentioning in the CEO statement shifting into growth mode, as I put it. I think one, you in some sense pushed the start button by starting that project or announcing that project in Gothenburg with OneMed. So looking forward, is it very much dependent on you being able to sign new leasing contracts in order to grow through projects? Or, and if you cannot do that at the pace that you're hoping, are you more prone to go for acquisitions in that case? Okay. okay And then second question, which is then I'd like to ask you about the start button. and then second question which is then i'd like to ask you about the start button You're mentioning in the CEO statement shifting into growth mode, as I put it. you're mentioning in the ceo statement shifting into growth mode as i put it I think one, you in some sense pushed the start button by starting that project or announcing that project in Gothenburg with OneMed. i think one you in some sense pushed the start button by starting that project or announcing that project in gothenburg with onemed So looking forward, is it very much dependent on you being able to sign new leasing contracts in order to grow through projects? so looking forward is it very much dependent on you being able to sign new leasing contracts in order to grow through projects Or, and if you cannot do that at the pace that you're hoping, are you more prone to go for acquisitions in that case? or and if you cannot do that at the pace that you're hoping are you more prone to go for acquisitions in that case

Speaker 2: I would say we're still focusing on development of our existing portfolio, because that will give us both a better yield on cost, and we also have a higher certainty in our operation when we already have the asset at our hands. However, we are dependent on a market being able to absorb projects. So we are focusing on that, but we are also looking at a much higher degree now on investments of standing on the market. So we have only made smaller acquisitions in terms of land, but we will be reviewing whether we should increase our volume by adding also standing assets to our portfolio. I would say we're still focusing on development of our existing portfolio, because that will give us both a better yield on cost, and we also have a higher certainty in our operation when we already have the asset at our hands. i would say we're still focusing on development of our existing portfolio because that will give us both a better yield on cost and we also have a higher certainty in our operation when we already have the asset at our hands However, we are dependent on a market being able to absorb projects. however we are dependent on a market being able to absorb projects So we are focusing on that, but we are also looking at a much higher degree now on investments of standing on the market. so we are focusing on that but we are also looking at a much higher degree now on investments of standing on the market So we have only made smaller acquisitions in terms of land, but we will be reviewing whether we should increase our volume by adding also standing assets to our portfolio. so we have only made smaller acquisitions in terms of land but we will be reviewing whether we should increase our volume by adding also standing assets to our portfolio

Speaker 6: Okay, thank you. Okay, thank you. okay thank you

Speaker 1: Thank you, Lars. The next one is Nadhir Kheriji from UBS. Thank you, Lars. thank you lars The next one is Nadhir Kheriji from UBS. the next one is nadhir kheriji from ubs

Speaker 5: Hello, good morning. Can you hear me clearly? Hello, good morning. hello good morning Can you hear me clearly? can you hear me clearly

Speaker 2: Yes, we can. Yes, we can. yes we can

Speaker 5: Wonderful. Wonderful. wonderful

Speaker 2: Good morning. Good morning. good morning

Speaker 5: Thank you very much for this morning's presentation. Good morning. Yes, so the first question is on the negative relettings. So obviously, as you mentioned in the presentation, there's a downward trend now in Q3, which I guess could be due to volatility. But the first question is, going forward into Q4 and then perhaps into 2025 as well, could you provide some guidance as to what a realistic target or direction of travel could be for this figure? And my second question is on you becoming a net investor going forward. Could you provide a timeframe? Perhaps would that be in the first half of 2025 or later than that? Do you have any insights and guidance on where that net investment could begin? Thank you. Thank you very much for this morning's presentation. thank you very much for this morning's presentation Good morning. good morning Yes, so the first question is on the negative relettings. yes so the first question is on the negative relettings So obviously, as you mentioned in the presentation, there's a downward trend now in Q3, which I guess could be due to volatility. so obviously as you mentioned in the presentation there's a downward trend now in q3 which i guess could be due to volatility But the first question is, going forward into Q4 and then perhaps into 2025 as well, could you provide some guidance as to what a realistic target or direction of travel could be for this figure? but the first question is going forward into q4 and then perhaps into 2025 as well could you provide some guidance as to what a realistic target or direction of travel could be for this figure And my second question is on you becoming a net investor going forward. and my second question is on you becoming a net investor going forward Could you provide a timeframe? could you provide a timeframe Perhaps would that be in the first half of 2025 or later than that? perhaps would that be in the first half of 2025 or later than that Do you have any insights and guidance on where that net investment could begin? do you have any insights and guidance on where that net investment could begin Thank you. thank you

Speaker 2: Yep. Thank you. Well, the first one on guidance on net leasing, we of course will aim at being net positive in every quarter. We do feel, however, that there is a pressure, especially in the metropolitan markets- Yep. yep Thank you. thank you Well, the first one on guidance on net leasing, we of course will aim at being net positive in every quarter. well the first one on guidance on net leasing we of course will aim at being net positive in every quarter We do feel, however, that there is a pressure, especially in the metropolitan markets- we do feel however that there is a pressure especially in the metropolitan markets- ... which we cannot ignore. So it would be wrong of me to promise I did that a quarter in 2023. I will not repeat that mistake. So but we aim definitely at being net positive. When that will happen is partly due to what happens, especially in the Swedish economy. So I don't think we should make too much of a promise. In terms of our net investments, our goal is definitely to be net positive on the investment sides already in 2025. And that will be mainly us investing in existing projects, but it may also be from as I mentioned to Lars Norrby earlier, in acquisitions of standing assets. ... which we cannot ignore. which we cannot ignore So it would be wrong of me to promise I did that a quarter in 2023. so it would be wrong of me to promise i did that a quarter in 2023 I will not repeat that mistake. i will not repeat that mistake So but we aim definitely at being net positive. so but we aim definitely at being net positive When that will happen is partly due to what happens, especially in the Swedish economy. when that will happen is partly due to what happens especially in the swedish economy So I don't think we should make too much of a promise. so i don't think we should make too much of a promise In terms of our net investments, our goal is definitely to be net positive on the investment sides already in 2025. in terms of our net investments our goal is definitely to be net positive on the investment sides already in 2025 And that will be mainly us investing in existing projects, but it may also be from as I mentioned to Lars Norrby earlier, in acquisitions of standing assets. and that will be mainly us investing in existing projects but it may also be from as i mentioned to lars norrby earlier in acquisitions of standing assets

Speaker 5: Got it. Very clear, thank you. And one final question on the debt situation. So it's good to see the leverage starting to tick down. Could you provide some guidance on the average cost of debt going forward? And given there's a number of refinancings, I guess, to be done, not in this quarter, but going forward, could you provide some guidance going forward from here? And will this increase before decreasing? Got it. got it Very clear, thank you. very clear thank you And one final question on the debt situation. and one final question on the debt situation So it's good to see the leverage starting to tick down. so it's good to see the leverage starting to tick down Could you provide some guidance on the average cost of debt going forward? could you provide some guidance on the average cost of debt going forward And given there's a number of refinancings, I guess, to be done, not in this quarter, but going forward, could you provide some guidance going forward from here? and given there's a number of refinancings i guess to be done not in this quarter but going forward could you provide some guidance going forward from here And will this increase before decreasing? and will this increase before decreasing

Speaker 2: I mean, the average interest cost increased during the quarter, but we believe it will remain relatively stable throughout this year and next. Of course, it's highly dependent upon how underlying interest cost will develop, but we have taken that into account in our internal analysis, of course, so rather stable. I mean, the average interest cost increased during the quarter, but we believe it will remain relatively stable throughout this year and next. i mean the average interest cost increased during the quarter but we believe it will remain relatively stable throughout this year and next Of course, it's highly dependent upon how underlying interest cost will develop, but we have taken that into account in our internal analysis, of course, so rather stable. of course it's highly dependent upon how underlying interest cost will develop but we have taken that into account in our internal analysis of course so rather stable

Speaker 5: Perfect. Thank you very much. Very clear. Perfect. perfect Thank you very much. thank you very much Very clear. very clear

Speaker 1: Thank you. Next one is Markus Henriksson from ABG. Thank you. thank you Next one is Markus Henriksson from ABG. next one is markus henriksson from abg

Speaker 3: Thank you. Good morning, everyone. First, a question on investments levels. What levels are you seeing in 2025, given the outlook you have given us today? Thank you. thank you Good morning, everyone. good morning everyone First, a question on investments levels. first a question on investments levels What levels are you seeing in 2025, given the outlook you have given us today? what levels are you seeing in 2025 given the outlook you have given us today

Speaker 2: Well, what we have communicated is that we have a sort of a minimum investment level of SEK 2.5 billion annually. That was a number that we presented when we had a much higher interest rate in general, not paid interest by us, but in the market in general. So I'd say that the minimum is SEK 2.5. We aim at increase that, but it depends also, of course, if we find both the tenants and the right opportunities. So SEK 2.5 is a minimum. I'd say that it could be a billion or so, or a billion and a half more, but the base case is SEK 2.5. Well, what we have communicated is that we have a sort of a minimum investment level of SEK 2.5 billion annually. well what we have communicated is that we have a sort of a minimum investment level of sek 2.5 billion annually That was a number that we presented when we had a much higher interest rate in general, not paid interest by us, but in the market in general. that was a number that we presented when we had a much higher interest rate in general not paid interest by us but in the market in general So I'd say that the minimum is SEK 2.5. so i'd say that the minimum is sek 2.5 We aim at increase that, but it depends also, of course, if we find both the tenants and the right opportunities. we aim at increase that but it depends also of course if we find both the tenants and the right opportunities So SEK 2.5 is a minimum. so sek 2.5 is a minimum I'd say that it could be a billion or so, or a billion and a half more, but the base case is SEK 2.5. i'd say that it could be a billion or so or a billion and a half more but the base case is sek 2.5

Speaker 3: Very clear. Thank you for that. And then if we take that into account and then look at the outstanding hybrid bond you have, could you update a bit on how you're thinking? Are you looking to repurchase part of it or issue a new one ahead of time? Or would you then hoard the cash flow to be able to handle the first call in 2026? How are you taking a stance on the hybrid bond? Very clear. very clear Thank you for that. thank you for that And then if we take that into account and then look at the outstanding hybrid bond you have, could you update a bit on how you're thinking? and then if we take that into account and then look at the outstanding hybrid bond you have could you update a bit on how you're thinking Are you looking to repurchase part of it or issue a new one ahead of time? are you looking to repurchase part of it or issue a new one ahead of time Or would you then hoard the cash flow to be able to handle the first call in 2026? or would you then hoard the cash flow to be able to handle the first call in 2026 How are you taking a stance on the hybrid bond? how are you taking a stance on the hybrid bond

Speaker 2: Good question, and right now we haven't taken any decision how to handle it. Of course, we note this, that the demand for the hybrid is increasing and it's trading very close to par. And therefore, a year ago, it could have constituted some difficulties or challenges. Right now, we have all the possibilities to handle it the way that will suit our needs, but also taking into account our stakeholders on the equity side and on the debt side. Good question, and right now we haven't taken any decision how to handle it. good question and right now we haven't taken any decision how to handle it Of course, we note this, that the demand for the hybrid is increasing and it's trading very close to par. of course we note this that the demand for the hybrid is increasing and it's trading very close to par And therefore, a year ago, it could have constituted some difficulties or challenges. and therefore a year ago it could have constituted some difficulties or challenges Right now, we have all the possibilities to handle it the way that will suit our needs, but also taking into account our stakeholders on the equity side and on the debt side. right now we have all the possibilities to handle it the way that will suit our needs but also taking into account our stakeholders on the equity side and on the debt side

Speaker 3: All right. Fair enough, then coming back to the investment levels again, and could you help us a bit on what type of yield on cost you underwrite in logistics or the hotel project? You talked about the conversion or other office projects. What type of yield on cost are you underwriting? All right. all right Fair enough, then coming back to the investment levels again, and could you help us a bit on what type of yield on cost you underwrite in logistics or the hotel project? fair enough then coming back to the investment levels again and could you help us a bit on what type of yield on cost you underwrite in logistics or the hotel project You talked about the conversion or other office projects. you talked about the conversion or other office projects What type of yield on cost are you underwriting? what type of yield on cost are you underwriting

Speaker 2: We have communicated that historically we have had a yield on cost of 8%-10%. That, of course, was on average in a very strong market. So maybe it's a bit too optimistic to keep believing that we will always be on those levels, but the internal hurdle is, of course, 7.5%, because that will, on unleveraged basis, that would give us our target of a 10% return on equity. We have communicated that historically we have had a yield on cost of 8%-10%. we have communicated that historically we have had a yield on cost of 8%-10% That, of course, was on average in a very strong market. that of course was on average in a very strong market So maybe it's a bit too optimistic to keep believing that we will always be on those levels, but the internal hurdle is, of course, 7.5%, because that will, on unleveraged basis, that would give us our target of a 10% return on equity. so maybe it's a bit too optimistic to keep believing that we will always be on those levels but the internal hurdle is of course 7.5% because that will on unleveraged basis that would give us our target of a 10% return on equity

Speaker 3: Very clear. Thank you. Last question: Have you entered any new swaps during the quarter? I see a few of them have matured. And what do you think about the current levels of the five-year swap? Is it something we should expect into Q4 and forward at the current five-year swap levels? Very clear. very clear Thank you. thank you Last question: Have you entered any new swaps during the quarter? last question have you entered any new swaps during the quarter I see a few of them have matured. i see a few of them have matured And what do you think about the current levels of the five-year swap? and what do you think about the current levels of the five-year swap Is it something we should expect into Q4 and forward at the current five-year swap levels? is it something we should expect into q4 and forward at the current five-year swap levels

Speaker 2: Yes, thank you. I mean, we issued the EUR 500 million Eurobond, and in connection with that one, we have bought some derivatives. I think that the underlying interest rate and also the five-year swap rate, I mean, it has, the latter has come up or close to 50 basis points, and therefore, for the time being, we are more or less fully invested in swap derivatives for the time being. And I think that we have the luxury of being able to wait for a while. We think that it will come down again on more reasonable levels. Yes, thank you. yes thank you I mean, we issued the EUR 500 million Eurobond, and in connection with that one, we have bought some derivatives. i mean we issued the eur 500 million eurobond and in connection with that one we have bought some derivatives I think that the underlying interest rate and also the five-year swap rate, I mean, it has, the latter has come up or close to 50 basis points, and therefore, for the time being, we are more or less fully invested in swap derivatives for the time being. i think that the underlying interest rate and also the five-year swap rate i mean it has the latter has come up or close to 50 basis points and therefore for the time being we are more or less fully invested in swap derivatives for the time being And I think that we have the luxury of being able to wait for a while. and i think that we have the luxury of being able to wait for a while We think that it will come down again on more reasonable levels. we think that it will come down again on more reasonable levels But I mean, we have been buying derivatives throughout the high interest rate environment in order to keep a healthy amount of our loans secured. Thank you. But I mean, we have been buying derivatives throughout the high interest rate environment in order to keep a healthy amount of our loans secured. but i mean we have been buying derivatives throughout the high interest rate environment in order to keep a healthy amount of our loans secured Thank you. thank you

Speaker 3: Very clear. You've been right on that before, so let's hope you're right again. Take care. Very clear. very clear You've been right on that before, so let's hope you're right again. you've been right on that before so let's hope you're right again Take care. take care

Speaker 2: Thanks. Thanks. thanks

Speaker 1: Thanks, Markus. The next one is Jan Ihrfelt from Kepler Cheuvreux. Thanks, Markus. thanks markus The next one is Jan Ihrfelt from Kepler Cheuvreux. the next one is jan ihrfelt from kepler cheuvreux

Speaker 8: Hi, good morning. Thanks for taking my questions. Just coming back to the letting market, you start off your CEO letter by mentioning that rents in large cities were already high prior to indexation- Hi, good morning. hi good morning Thanks for taking my questions. thanks for taking my questions Just coming back to the letting market, you start off your CEO letter by mentioning that rents in large cities were already high prior to indexation- just coming back to the letting market you start off your ceo letter by mentioning that rents in large cities were already high prior to indexation-

Speaker 2: Yeah Yeah yeah

Speaker 8: -and that you're in much more dialogue than usual with your customers. So taking that together, what's your thoughts on reversion in your portfolio? And do you see needs to provide incentives to retain tenants? -and that you're in much more dialogue than usual with your customers. -and that you're in much more dialogue than usual with your customers So taking that together, what's your thoughts on reversion in your portfolio? so taking that together what's your thoughts on reversion in your portfolio And do you see needs to provide incentives to retain tenants? and do you see needs to provide incentives to retain tenants

Speaker 2: In general, I'd say that we are less exposed to the super high rent levels that you can see in CBD areas in metropolitan areas. I'd say that there is, of course, some discussions with tenants that have been subject to very high indexation from a high rent level. We have less of that compared to some of our colleagues in the business. It does occur, of course, that we have those discussions, but we have also a substantial portion of our assets in areas where the rent levels are not that high. Thus, the indexation, of course, is in percent just as high, but in absolute numbers is less challenging. In general, I'd say that we are less exposed to the super high rent levels that you can see in CBD areas in metropolitan areas. in general i'd say that we are less exposed to the super high rent levels that you can see in cbd areas in metropolitan areas I'd say that there is, of course, some discussions with tenants that have been subject to very high indexation from a high rent level. i'd say that there is of course some discussions with tenants that have been subject to very high indexation from a high rent level We have less of that compared to some of our colleagues in the business. we have less of that compared to some of our colleagues in the business It does occur, of course, that we have those discussions, but we have also a substantial portion of our assets in areas where the rent levels are not that high. it does occur of course that we have those discussions but we have also a substantial portion of our assets in areas where the rent levels are not that high Thus, the indexation, of course, is in percent just as high, but in absolute numbers is less challenging. thus the indexation of course is in percent just as high but in absolute numbers is less challenging So we don't foresee a downward pressure on our total rent levels, but of course, it may happen here and there. But our aim is to be able to absorb that through our very diverse tenant base, and also the fact that we are located in a substantial number of markets. So we don't foresee a downward pressure on our total rent levels, but of course, it may happen here and there. so we don't foresee a downward pressure on our total rent levels but of course it may happen here and there But our aim is to be able to absorb that through our very diverse tenant base, and also the fact that we are located in a substantial number of markets. but our aim is to be able to absorb that through our very diverse tenant base and also the fact that we are located in a substantial number of markets

Speaker 8: Okay, that's clear. Then moving on to investments. When you're talking about ramping up the pace, as well as growing the portfolio, how should we think about funding? Does this imply that you're moving closer towards the upper boundary of your LTV policy? Okay, that's clear. okay that's clear Then moving on to investments. then moving on to investments When you're talking about ramping up the pace, as well as growing the portfolio, how should we think about funding? when you're talking about ramping up the pace as well as growing the portfolio how should we think about funding Does this imply that you're moving closer towards the upper boundary of your LTV policy? does this imply that you're moving closer towards the upper boundary of your ltv policy

Speaker 2: Well, that really depends on what type of assets and what type of investments we're looking at. So, investments that will create sort of an immediate cashflow is, of course, financed through our more or less cash at hand. If we're looking at very long investment projects that have a considerable time to when they start generating cash, we need to make sure that we don't overload our balance sheet once again, making ourselves vulnerable to changes in the market. So, it really, I, I'm not at liberty to say because I simply don't have the entire investment opportunities for us going forward several years. Well, that really depends on what type of assets and what type of investments we're looking at. well that really depends on what type of assets and what type of investments we're looking at So, investments that will create sort of an immediate cashflow is, of course, financed through our more or less cash at hand. so investments that will create sort of an immediate cashflow is of course financed through our more or less cash at hand If we're looking at very long investment projects that have a considerable time to when they start generating cash, we need to make sure that we don't overload our balance sheet once again, making ourselves vulnerable to changes in the market. if we're looking at very long investment projects that have a considerable time to when they start generating cash we need to make sure that we don't overload our balance sheet once again making ourselves vulnerable to changes in the market So, it really, I, I'm not at liberty to say because I simply don't have the entire investment opportunities for us going forward several years. so it really i i'm not at liberty to say because i simply don't have the entire investment opportunities for us going forward several years But, yeah, I can assure you that we will be very prudent in terms of what kind of risk we assume, going forward. But, yeah, I can assure you that we will be very prudent in terms of what kind of risk we assume, going forward. but yeah i can assure you that we will be very prudent in terms of what kind of risk we assume going forward

Speaker 8: Okay, that's fair. And then just on capital recycling, it's fair to assume, I suppose, that you continue the shaping off of your tail end of the portfolio? Okay, that's fair. okay that's fair And then just on capital recycling, it's fair to assume, I suppose, that you continue the shaping off of your tail end of the portfolio? and then just on capital recycling it's fair to assume i suppose that you continue the shaping off of your tail end of the portfolio

Speaker 2: Yeah, that's true. But we are now using those proceeds for investment purposes and not in particular to amortize debt. That may happen over a single quarter back and forth, but we're quite satisfied with the look of our balance sheet at the moment. Yeah, that's true. yeah that's true But we are now using those proceeds for investment purposes and not in particular to amortize debt. but we are now using those proceeds for investment purposes and not in particular to amortize debt That may happen over a single quarter back and forth, but we're quite satisfied with the look of our balance sheet at the moment. that may happen over a single quarter back and forth but we're quite satisfied with the look of our balance sheet at the moment

Speaker 8: Okay, that's clear. That's it from my side. Thank you. Okay, that's clear. okay that's clear That's it from my side. that's it from my side Thank you. thank you

Speaker 2: Thanks. Thanks. thanks

Speaker 1: Thank you, Jan. Next question from Albin Sandberg at Kepler. Thank you, Jan. thank you jan Next question from Albin Sandberg at Kepler. next question from albin sandberg at kepler

Speaker 4: Hi there. Three questions for me. The comment on the cost of finance being stable, I took it from current level through 2025. What base assumptions do you have on the policy rates in that sense? Because I guess you haven't hedged all of your debt, right? Hi there. hi there Three questions for me. three questions for me The comment on the cost of finance being stable, I took it from current level through 2025. the comment on the cost of finance being stable i took it from current level through 2025 What base assumptions do you have on the policy rates in that sense? what base assumptions do you have on the policy rates in that sense Because I guess you haven't hedged all of your debt, right? because i guess you haven't hedged all of your debt right

Speaker 2: Yes. I mean, it's not really Castellum's view, but rather, the general view in the market that we make use of, and we look at the forward yield curve. Yes. yes I mean, it's not really Castellum's view, but rather, the general view in the market that we make use of, and we look at the forward yield curve. i mean it's not really castellum's view but rather the general view in the market that we make use of and we look at the forward yield curve

Speaker 4: ... Great, thanks. And then on the actual tax as a percentage of your income from property management, looking at the year-to-date numbers, is that a relevant number to assume for Castellum going forward? ... Great, thanks. great thanks And then on the actual tax as a percentage of your income from property management, looking at the year-to-date numbers, is that a relevant number to assume for Castellum going forward? and then on the actual tax as a percentage of your income from property management looking at the year-to-date numbers is that a relevant number to assume for castellum going forward

Speaker 2: In the short run, yes, but it will increase over time, but at a slow pace. We've been looking at this and comparing it with our peers, and I think we will all be moving in the right direction over time. In the short run, yes, but it will increase over time, but at a slow pace. in the short run yes but it will increase over time but at a slow pace We've been looking at this and comparing it with our peers, and I think we will all be moving in the right direction over time. we've been looking at this and comparing it with our peers and i think we will all be moving in the right direction over time

Speaker 4: Okay. And, the final question I have, I mean, it's not a lot, I guess, 10 basis points that occupancy drops quarter on quarter, which I guess might have to do with the mix, and also, I guess, the negative net leasing last year. But, is that now stabilizing? I mean, obviously, the net leasing has been quite, well, overall flattish, I would say, this year. Or, are there any, let's say, late cycle impact one should be aware of, if we're getting close to the floor? Okay. okay And, the final question I have, I mean, it's not a lot, I guess, 10 basis points that occupancy drops quarter on quarter, which I guess might have to do with the mix, and also, I guess, the negative net leasing last year. and the final question i have i mean it's not a lot i guess 10 basis points that occupancy drops quarter on quarter which i guess might have to do with the mix and also i guess the negative net leasing last year But, is that now stabilizing? but is that now stabilizing I mean, obviously, the net leasing has been quite, well, overall flattish, I would say, this year. i mean obviously the net leasing has been quite well overall flattish i would say this year Or, are there any, let's say, late cycle impact one should be aware of, if we're getting close to the floor? or are there any let's say late cycle impact one should be aware of if we're getting close to the floor

Speaker 2: I hope that we are getting closer to the floor, at least that we can sort of touch the bottom. The thing is that as Jens mentioned in the slide where we show the quarterly net leasing figure compared to the bars showing the contract value, this is super volatile. And there might be quarters where some terminations accumulate, and then you have another quarter where we take some projects into operation. And so net leasing will continue to be volatile on a quarterly basis. And but I think we should all view the aggregated number as a basis for us going forward rather than quarterly numbers. I hope that we are getting closer to the floor, at least that we can sort of touch the bottom. i hope that we are getting closer to the floor at least that we can sort of touch the bottom The thing is that as Jens mentioned in the slide where we show the quarterly net leasing figure compared to the bars showing the contract value, this is super volatile. the thing is that as jens mentioned in the slide where we show the quarterly net leasing figure compared to the bars showing the contract value this is super volatile And there might be quarters where some terminations accumulate, and then you have another quarter where we take some projects into operation. and there might be quarters where some terminations accumulate and then you have another quarter where we take some projects into operation And so net leasing will continue to be volatile on a quarterly basis. and so net leasing will continue to be volatile on a quarterly basis And but I think we should all view the aggregated number as a basis for us going forward rather than quarterly numbers. and but i think we should all view the aggregated number as a basis for us going forward rather than quarterly numbers

Speaker 4: Great. Thank you very much. Great. great Thank you very much. thank you very much

Speaker 2: Thank you. Thank you. thank you

Speaker 1: Thank you, Albin. So I have a few questions on the chat as well. Do you expect to lower the amount of unutilized credit facilities available now that you are back in the Euro bond market? I believe in the past you mentioned that would be the catalyst for lowering your RCF volume. Thank you, Albin. thank you albin So I have a few questions on the chat as well. so i have a few questions on the chat as well Do you expect to lower the amount of unutilized credit facilities available now that you are back in the Euro bond market? do you expect to lower the amount of unutilized credit facilities available now that you are back in the euro bond market I believe in the past you mentioned that would be the catalyst for lowering your RCF volume. i believe in the past you mentioned that would be the catalyst for lowering your rcf volume

Speaker 2: Absolutely. That's very true, Christoffer. And I mean, we need to keep a certain amount of rolling credit facilities in order to keep our rating, and in the future, even improving it. Of course, everything is connected to our possibility to issue Eurobonds and also to issue longer Eurobonds. And now we've been able to issue one Eurobond, and the first bond for a very long period of time. I think it's reasonable to believe the next time we issue a benchmark bond, most likely beginning of next year, we will be in a situation where we can start cutting down on the rolling credit facilities, but still a very cheap life insurance for us, and I think it's advisable to do this very cautiously. Absolutely. absolutely That's very true, Christoffer. that's very true christoffer And I mean, we need to keep a certain amount of rolling credit facilities in order to keep our rating, and in the future, even improving it. and i mean we need to keep a certain amount of rolling credit facilities in order to keep our rating and in the future even improving it Of course, everything is connected to our possibility to issue Eurobonds and also to issue longer Eurobonds. of course everything is connected to our possibility to issue eurobonds and also to issue longer eurobonds And now we've been able to issue one Eurobond, and the first bond for a very long period of time. and now we've been able to issue one eurobond and the first bond for a very long period of time I think it's reasonable to believe the next time we issue a benchmark bond, most likely beginning of next year, we will be in a situation where we can start cutting down on the rolling credit facilities, but still a very cheap life insurance for us, and I think it's advisable to do this very cautiously. i think it's reasonable to believe the next time we issue a benchmark bond most likely beginning of next year we will be in a situation where we can start cutting down on the rolling credit facilities but still a very cheap life insurance for us and i think it's advisable to do this very cautiously

Speaker 1: Super. We have one more question. I guess it's for you, Jens. Can you please give me some color on the implied cost for interest rates maturing within twelve months? That stands at 6.9% as of Q3. What does this include? What's behind the 1.8% delta from Q2, despite approximately forty basis points lower STIBOR? Super. super We have one more question. we have one more question I guess it's for you, Jens. i guess it's for you jens Can you please give me some color on the implied cost for interest rates maturing within twelve months? can you please give me some color on the implied cost for interest rates maturing within twelve months That stands at 6.9% as of Q3. that stands at 6.9% as of q3 What does this include? what does this include What's behind the 1.8% delta from Q2, despite approximately forty basis points lower STIBOR? what's behind the 1.8% delta from q2 despite approximately forty basis points lower stibor

Speaker 2: I mean, it's actually a lot of this is explained by cross-currency interest rate swaps. It's, I mean, I would say that that is a large portion of the explanation. I mean, it's actually a lot of this is explained by cross-currency interest rate swaps. i mean it's actually a lot of this is explained by cross-currency interest rate swaps It's, I mean, I would say that that is a large portion of the explanation. it's i mean i would say that that is a large portion of the explanation

Speaker 1: Thank you, Jens. And I think that's, that's all questions for today. So thank you all, and thanks for the questions. Thank you for listening. Thank you, Jens. thank you jens And I think that's, that's all questions for today. and i think that's that's all questions for today So thank you all, and thanks for the questions. so thank you all and thanks for the questions Thank you for listening. thank you for listening

Speaker 2: We see you all again, at the latest on February nineteen, for our year-end report. Thank you. We see you all again, at the latest on February nineteen, for our year-end report. we see you all again at the latest on february nineteen for our year-end report Thank you. thank you