Castellum — Call Transcript 2026

Good morning, everyone, and welcome to this presentation of Castellum's Q1 report. There will be a Q&A session in the end of the webcast, and if you'd like to ask a question by phone, please dial pound key five on the telephone keypad and ask your question. Let's start. Please go ahead, Pål. Good morning. As you probably all know by now, our main target in Castellum is to achieve a return on equity of 10% over the business cycle. During the autumn we launched a new strategy, one could say, which we called Back to Basics. One of the main principles in Back to Basics is to increase the transaction pace. During the quarter we conducted two transactions, one smaller in Linköping and one bigger with the disposal of nine properties to AP7, with a profit of SEK 750 million. Another principle in Back to Basics is to be very prudent with the capital that the shareholders have given us, and if we can't earn it, we will return it. During the quarter, we have repurchased almost 24 million shares. Another principle of Back to Basics is to have a tight grip on costs. During the autumn, we sold our co-working operation called United Spaces, and we've made a reorganization and cost cuts at the headquarters. The administrative costs, both in property management and in central administration, is lower this quarter compared to the first quarter one year ago. It's almost SEK 100 million lower. Of course, leasing is also one of the main principles in Back to Basics. It's still slow, but we have positive net leasing during the quarter, SEK 82 million, whereof SEK 72 million was the leasing to Ericsson in Hagastaden. Still slow but positive. Castellum, our property portfolio valued to SEK 138 billion, but we also have two joint ventures, or one joint venture in Gothenburg, Halvorsäng. It's logistics together with the harbor in Gothenburg. Then we own 37% of the shares of the listed Norwegian office company, Entra. We have a mixed-use portfolio, mainly with office, but also a large proportion of warehouse and light industry and public sector properties, 5.3 million sq m lettable area and a high sustainability focus. Now down to the details. I'll hand over to you, Christoffer. Thank you. Looking at income and net operating income, both are down by some 3% compared with Q1 last year. This is mainly due to higher vacancies, but also higher direct property costs. However, with lower central administration, SEK 24 million this quarter, SEK 66 million last quarter. In addition to that, somewhat lower interest costs, some SEK 10 million, and a better contribution from Entra of SEK 17 million. This at least leaves us at positive territory in terms of income from property management. Property values were positive, SEK 416 million or 0.3%. As Pål mentioned, the net leasing for the period is SEK 82 million, whereof the large leasing in Hagastaden to Ericsson is most of that. Occupancy now at 88.0%, somewhat lower than the last quarter. On the investment side, we have net investments in the quarter of SEK 679 million. Of this, SEK 886 million investments in existing properties, and then we sold properties for SEK 214 million. Not including the large AP7 transaction, but this was transactions we made and communicated in the end of last year. The biggest one is one that's in Örebro. Into more details, income in the like-for-like portfolio decreased by SEK 47 million, and that corresponds to 2%. That is mainly due to the higher vacancies of SEK 60 million compared to the quarter last year. Both income and costs are affected by this divestment of our co-working business. This is the first full quarter without that business. Income decreased by some SEK 45 million, and costs decreased by some SEK 53 million. That is a quarterly net positive effect of SEK 8 million, in line with what we announced in October when we sold the company, where we indicated a positive yearly effect of SEK 30 million. That's quite spot on. On the cost side, the like-for-like property costs increased with SEK 45 million, and of this, SEK 38 million was due to higher costs for heating and snow due to the colder winter than the year before. As Pål mentioned also, looking at administration costs, and if we add both property administration and central administration, costs are down SEK 99 million. However, half of that, SEK 53 million, is related to this sold co-working business. Then please also note that we have SEK 22 million of costs that we have moved from central administration to property administration, and this is part of that change that we did in the autumn, where we both reduced costs on the headquarters, but we also moved some staff to the regions. I would also say that we, in this quarter, have no material one-off, which we of course had quite a lot of in Q4. Looking at the leasing side, 14% of the total lease stock that were up for renegotiation, we negotiated during the period, with an average negative change in rent of 7.1%. It's quite small volume, and it's no specific or individual rental agreement behind it. It's actually a couple of them. As usual, the largest proportion are extended, but no changes in terms. This quarter, about half of the volume, 49% or SEK 249 million, is sort of rolled over with no changes in terms. Net leasing, as mentioned, SEK 82 million. In addition to the Ericsson deal that we have talked about, we can also mention that we have some positive net leasing in Denmark of SEK 20 million, and we have some positive net leasing in the Mälardalen region of SEK 18 million, and that is roughly the amount of a new leasing to Light Industries. Looking at property values, as mentioned, they are up with SEK 400 million, mainly due to the Infinity project in Hagastaden, SEK 300 million+, and also the divestment of nine properties to AP7, approximately SEK 250 million up. That was also communicated in the press release in that transaction. If we take those two away, the remaining part is actually a little bit lower than the last quarter. SEK 138 billion of fair value, and this then of course includes the SEK 5.6 billion transaction with AP7, as that one is closing in Q2. A smaller part of it is actually in Q3, but the big part in Q2. Also in this quarter, we have actually lower cash flow expectations in our valuations, and that's the downward pressure on rental levels. That's the explanation to this smaller negative value changes if we exclude Infinity and AP7 transactions. Looking at the financing side, market conditions remain favorable despite increased volatility. We saw some credit spreads widening during the quarter as the conflict in the Middle East escalated, but we have recovered continuously during the quarter and now in the beginning of Q2, and spreads in the bond market are some 10, 15 basis points wider than the lows before the conflict started. Nordic banks continue to offer very competitive pricing and are willing to increase volumes. It's also on this side that we have been active in the quarter, so on the secured side with the refinancing of in total SEK 6.8 billion in bank loans. The average duration of those loans has been just over eight years, so quite long credit duration in the bank loans that we offered currently. That is, of course, contributing to the increase in our average debt maturity. We still have some SEK 18 billion in cash and unutilized credit facilities, providing us with sort of comfortable backup to the upcoming maturities, which are not very big. Financial key ratios are broadly stable compared to previous quarter. However, a slight increase in the loan-to-value, now at 37.5%, mainly explained by the fact that we have bought shares in the quarter of some SEK 2 billion, while the proceeds from the transactions comes in Q2. ICR stable at 3.2x and a comfortable headroom against policies of 40% LTV and 3.0x ICR. As mentioned on the previous slide, average debt maturity is now slightly higher, 4.5 years, and the average fixed interest term is three years. Interest-bearing liabilities slightly up, same explanation, a bit higher due to the mismatch in acquiring shares in the quarter and proceeds from the transactions in the next quarter. Looking at the divestments, we have done, as mentioned, one large transaction and one with a small transaction. The large one we have talked about quite a lot already. SEK 5.6 billion public assets, 100% leased out, sold to AP7. Fair value as of Q4 was SEK 5.15 billion. The total earnings effect was SEK 715 million. That one is closing now in Q2 and Q3. The smaller one, maybe not small for the Linköping market, SEK 256 million, sold to the Åhman family. A big difference, 25% vacancies. From our perspective, quite a lot of investment needs in the portfolio going forward, and a good transaction from our perspective. An update on the share buybacks that we are conducting. After the divestment of the portfolio to AP7, the board announced that we are initiating a share buyback program, a total of SEK 3.4 billion. Of that, we have so far acquired for SEK 2.7 billion. That is up until today or yesterday evening, at least. Out of that, some SEK 2 billion was acquired during the quarter, and then the remaining one now in April. Average price, SEK 113 per share. The large lease during the quarter, 24,000 sq m in Hagastaden. The entire building, and with a 15-year duration. It includes an option for the tenant up until 1st of June this year. Roughly in a month, we will know if they have the optionality to decrease it to a five-year tenant with approximately half of the volume. To wrap things up, some words on our sustainability performance. The day-to-day work to decrease our energy consumptions goes on as previously. During the quarter, we have reduced the energy consumptions in the like-for-like portfolio with 4%, and roughly one-fourth of our electricity is self-generated, mostly by solar panels. Before we let all the questions in, let me just summarize a bit. We have positive net leasing, SEK 82 million, whereof SEK 72 million from Ericsson. It's the fourth quarter in a row with positive net leasing, but very low figures, one could say. It remains slow in the leasing market. We made two transactions very successfully, I would say, and that's part of the Back to Basics principle to remove everything that we don't believe will give a 10% return on equity. The cost savings program we conducted during the autumn now comes into the figures. With that, I think we can hand over to questions. Yes, we do. If you'd like to ask a question by phone, please dial pound key five and ask your question. The first question comes from Tobias Kaj, Nordea. Good morning. Thank you for presentation and for taking my questions. First, I have a couple of general questions. Regarding your portfolio, is it possible to, in some way, quantify how large proportion that you think that doesn't meet your return requirements? Not really. I think we are looking at that continuously, and one thing that's very important in that equation is actually what prices you can achieve. It's difficult to answer that question. I would say there's a big proportion that actually can achieve 10%, and there's a proportion also that I would say is borderline, and then there's a proportion that probably not, depending on prices, that not will meet our 10% return requirement. I cannot give you a figure on that right now. That's fair. Can I follow up? How does that view impact your view on projects? If you complete a project with a long lease to a stable tenant, and it's fully let, is it possible to continue to own those kind of properties, or should those properties be sold, as they are completed? Or do you give promises to the tenant that you will remain as a long-term owner, so you can't sell it? The last question, that's very uncommon, that you have to promise tenants that you keep something forever and ever. I wouldn't say that that's a question. If we complete something and obviously then the property is in its prime, so the demand for those type of properties may very well in different markets, depending on the market and interest rate, may be very high. It's from case to case, I would say. Okay, thank you. Regarding your renegotiations, even though it's a small number, is it related to some specific region or some specific category? No, actually not. It's quite a lot of the different underlying rental agreements, and actually different categories and different geographies. That's unfortunately not. Okay, regarding your admin expenses, both the level of expenses for central admin in Q1 and the movement from central admin to property admin in Q1, is that a reasonable level also for coming quarters, or are there some seasonal variations in those numbers? No seasonal variations. That's roughly in line with the expectations, although we of course do not guide on it, but it's quite clean, so to say. No one-offs in it. Okay, perfect. That's all from me. Thank you. Thank you. The next question, Lars Norrby, SEB. Good morning. Question about buybacks. By the way, love your comment there. If we can't earn it, we will return it. You still have some way to go on the SEK 3.4 billion buyback program that you have, and on top of that, I guess you have the capital distribution for 2025, a few hundred million on that one. To do even more than that, but does that necessitate more divestments of properties? At least we do not have any plans for more than that, should we not do any more divestments. You've done some quite sizable divestments, the SEK 5.9 billion and the close to SEK 300 million or so, but still your total portfolio is something like SEK 138 billion. Why haven't you been able to do more? I guess you want to do much more than that. Isn't that true? What we see right now, I would say that we see quite a big interest in general on the property transaction market to make transactions. That's quite clear. More in detail than that, I don't think we can answer more in detail than that. We have discussions with interested parties, and as soon as we have something to tell, we will definitely tell. Okay. Thank you. Next question, Nadir Rahman, UBS. Hello. Sorry, can you hear me now? Yeah. Sorry, I think I was muted. Apologies. Sorry, I'd already started. Yes. I have two questions from me. The first one is, in your report, if we look at the value decline in the markets that you mentioned have a lower expected cash flows, I'm assuming this is firstly the Kista in Finland, which you said you took value declines on in Q4. Could you give some more color as to where this decline was concentrated? Then I can ask my second question after this. Not really any concentration to that. You are correct that Kista in Finland was more Q4, so this is more broadly across the portfolio. Okay. The second question is on the slight decline in rental income. Of course, an opportunity as well, and you're mentioning that this is largely due to the effect of the legacy, like negative net lettings from last year. When do we expect this to start to inflect, and we start to see a more positive effect from any positive net lettings from the last four quarters? Do you have perhaps an indication of when we see that inflection? We don't really have that indication. Maybe we have that indication, but we don't guide on it. What we could mention is, of course, that Q1 last year was very negative, net leasing was, and then it was positive, very small figures, but positive Q2, Q3, and Q4, and now positive again in Q1 this year. We can't give more details than that. Okay. Very clear. Just to come back to my initial question on the value decline. Instead of any regional concentration, is there any asset class, for example, offices or any other sector that you see this value decline occurring in more? Not really there either. It's actually in different asset classes. Quite small volume in the big perspective, I would say. Okay. Very clear. Thank you. Thank you. Next question from John Wong, Keppel. Hi, good morning. In the previous energy crisis, Castellum wasn't really fully hedged against electricity costs. With the war ongoing, could you provide a bit more color on how well you're now protected against a surge in electricity prices? Yes. We changed that a couple of years ago to a more, maybe more normal, I don't know, but at least a different hedging strategy, more classic, 80%/60%/40%/20% strategy. I would say better hedged. Not fully hedged, but better hedged and quite evenly over the couple of the years. Okay, that's clear. Thank you. Just on the share buyback, I think in your latest press release from this week, I noticed that there were no repurchases done on Friday and Monday. I suppose that also coincides with the share price above 125. Could you provide a bit more color on this? That's correct. As of lately, we have bought back shares through this safe harbor procedure as we have been in close period, and then we instructed the bank of that share price maximum. Okay, thank you. Just lastly on the occupancy, I noticed you restated several numbers. Could you highlight what has changed and why it has changed? Could you repeat the question? On your occupancy definition, I noticed you restated some historical numbers in the quarterly reporting. What has changed in the definition of occupancy, and why did you change it? What we have changed is that previously our occupancy was for the full period, where now we have changed it into end of period. The reason for that is that we think that's more accurate, especially when you come to the end of the year, when you are very much affected by the vacancy level in the first quarters of the year. I think that's more common that the vacancy figure or occupancy figures are end of period figures. Okay, that's clear. Thank you. Thank you, John. Next question, Paul May, Barclays. Hi, guys. Thanks for the presentation. Just a couple quick ones from me. You mentioned obviously looking at disposals and selling assets where you don't hit your return requirements. Just wondering who would be the buyers of those assets, because there's not many buyers or much capital out there that's looking for the low returns that you would anticipate on those assets and hence you're trying to sell them? Just wondering if you could give some color on that would be great. And then secondly, on the operating environment, appreciate it's not particularly easy out there, and as you've highlighted, it's quite tough. I think you've talked about improving the leasing environment, improving the operating metrics. When should we expect those to actually flow through into real numbers in terms of occupancy and NRI growth, which seems to be getting worse rather than better? Is it to do with your weaker assets or weaker locations, or do you just think it's a market-wide soft leasing market that just requires time before that starts to improve? Thanks. I can start with the first question. We actually disagree a bit. We think it's plenty of interests out there, plenty of capital out there interested in a very large proportion of our assets. And I would say that's from different kinds of capital or investors as well, local and foreign, institutional and private, listed real estate companies and private equity firms, and not at least the Swedish institutions. We think it's very much interest in the transaction market. Regarding the operational figures, vacancy and like-for-like growth, I would imagine, we're not guiding, but I would imagine that we will continue to see a pretty slow market for a while. We haven't seen any turnaround as of yet anyways. Until we reach sort of a new equilibrium where we are, we probably will see figures that are a bit on the downslope before it turns. This was also, I think we indicated that during the autumn that it will get a bit worse before it can improve. Now we at least have positive net letting even if it's dancing around the zero, but it's still positive. We are not seeing a rapid increase in demand for our properties in the rental market as it is. Cool. Thank you. Thank you. Thanks. Next question, Pranava Boyidapu, sorry if I'm pronouncing it wrong. Also Barclays. Hello. Thank you for taking my question. I'm [Pulmi] Credit Analyst. On that note, I would like to get a little bit more clarity on what your, if you can't earn it, we'll return it policy means for the bondholders. Because, again, at the cost of sounding repetitive, there are some loose ends with the consent solicitation that didn't go through specifically for the Castellum 2029 Eurobonds. I was just wondering at what point in your business plan does it seem like you could potentially consider the bondholders on the side of a cessation of business event? Same answer that we have said before, that if and when we come to that point in time that we are having such transactions sort of on the table, then we will handle it at that point in time. Then I have a second question. Regarding your hybrid debt, which is, I believe, SEK 1 billion with the first call next year. I was wondering if you had any plans in terms of how you expect to refinance it, because considering the size of it. I assume that the hybrids will remain a part of your capital structure. If there are potentially different currencies you might consider or is it going to be euros? Also on that one, we will announce our plans sort of when we have decided on our plans. All right. Thank you very much. Thank you. That seems to be the last question of today. Thank you all for listening and thanks for the questions. Yes, thank you, and until next time.

Speaker 1: Good morning, everyone, and welcome to this presentation of Castellum's Q1 report. There will be a Q&A session in the end of the webcast, and if you'd like to ask a question by phone, please dial pound key five on the telephone keypad and ask your question. Let's start. Please go ahead, Pål. Good morning, everyone, and welcome to this presentation of Castellum's Q1 report. good morning everyone and welcome to this presentation of castellum's q1 report There will be a Q&A session in the end of the webcast, and if you'd like to ask a question by phone, please dial pound key five on the telephone keypad and ask your question. there will be a q&a session in the end of the webcast and if you'd like to ask a question by phone please dial pound key five on the telephone keypad and ask your question Let's start. let's start Please go ahead, Pål. please go ahead pål

Speaker 7: Good morning. As you probably all know by now, our main target in Castellum is to achieve a return on equity of 10% over the business cycle. During the autumn we launched a new strategy, one could say, which we called Back to Basics. One of the main principles in Back to Basics is to increase the transaction pace. During the quarter we conducted two transactions, one smaller in Linköping and one bigger with the disposal of nine properties to AP7, with a profit of SEK 750 million. Another principle in Back to Basics is to be very prudent with the capital that the shareholders have given us, and if we can't earn it, we will return it. During the quarter, we have repurchased almost 24 million shares. Another principle of Back to Basics is to have a tight grip on costs. Good morning. good morning As you probably all know by now, our main target in Castellum is to achieve a return on equity of 10% over the business cycle. as you probably all know by now our main target in castellum is to achieve a return on equity of 10% over the business cycle During the autumn we launched a new strategy, one could say, which we called Back to Basics. during the autumn we launched a new strategy one could say which we called back to basics One of the main principles in Back to Basics is to increase the transaction pace. one of the main principles in back to basics is to increase the transaction pace During the quarter we conducted two transactions, one smaller in Linköping and one bigger with the disposal of nine properties to AP7, with a profit of SEK 750 million. during the quarter we conducted two transactions one smaller in linköping and one bigger with the disposal of nine properties to ap7 with a profit of sek 750 million Another principle in Back to Basics is to be very prudent with the capital that the shareholders have given us, and if we can't earn it, we will return it. another principle in back to basics is to be very prudent with the capital that the shareholders have given us and if we can't earn it we will return it During the quarter, we have repurchased almost 24 million shares. during the quarter we have repurchased almost 24 million shares Another principle of Back to Basics is to have a tight grip on costs. another principle of back to basics is to have a tight grip on costs During the autumn, we sold our co-working operation called United Spaces, and we've made a reorganization and cost cuts at the headquarters. The administrative costs, both in property management and in central administration, is lower this quarter compared to the first quarter one year ago. It's almost SEK 100 million lower. Of course, leasing is also one of the main principles in Back to Basics. It's still slow, but we have positive net leasing during the quarter, SEK 82 million, whereof SEK 72 million was the leasing to Ericsson in Hagastaden. Still slow but positive. Castellum, our property portfolio valued to SEK 138 billion, but we also have two joint ventures, or one joint venture in Gothenburg, Halvorsäng. It's logistics together with the harbor in Gothenburg. Then we own 37% of the shares of the listed Norwegian office company, Entra. During the autumn, we sold our co-working operation called United Spaces, and we've made a reorganization and cost cuts at the headquarters. during the autumn we sold our co-working operation called united spaces and we've made a reorganization and cost cuts at the headquarters The administrative costs, both in property management and in central administration, is lower this quarter compared to the first quarter one year ago. the administrative costs both in property management and in central administration is lower this quarter compared to the first quarter one year ago It's almost SEK 100 million lower. it's almost sek 100 million lower Of course, leasing is also one of the main principles in Back to Basics. of course leasing is also one of the main principles in back to basics It's still slow, but we have positive net leasing during the quarter, SEK 82 million, whereof SEK 72 million was the leasing to Ericsson in Hagastaden. it's still slow but we have positive net leasing during the quarter, sek 82 million whereof sek 72 million was the leasing to ericsson in hagastaden Still slow but positive. still slow but positive Castellum, our property portfolio valued to SEK 138 billion, but we also have two joint ventures, or one joint venture in Gothenburg, Halvorsäng. castellum our property portfolio valued to sek 138 billion but we also have two joint ventures or one joint venture in gothenburg halvorsäng It's logistics together with the harbor in Gothenburg. it's logistics together with the harbor in gothenburg Then we own 37% of the shares of the listed Norwegian office company, Entra. then we own 37% of the shares of the listed norwegian office company entra We have a mixed-use portfolio, mainly with office, but also a large proportion of warehouse and light industry and public sector properties, 5.3 million sq m lettable area and a high sustainability focus. Now down to the details. I'll hand over to you, Christoffer. We have a mixed-use portfolio, mainly with office, but also a large proportion of warehouse and light industry and public sector properties, 5.3 million sq m lettable area and a high sustainability focus. we have a mixed-use portfolio mainly with office but also a large proportion of warehouse and light industry and public sector properties 5.3 million sq m lettable area and a high sustainability focus Now down to the details. now down to the details I'll hand over to you, Christoffer. i'll hand over to you christoffer

Speaker 1: Thank you. Looking at income and net operating income, both are down by some 3% compared with Q1 last year. This is mainly due to higher vacancies, but also higher direct property costs. However, with lower central administration, SEK 24 million this quarter, SEK 66 million last quarter. In addition to that, somewhat lower interest costs, some SEK 10 million, and a better contribution from Entra of SEK 17 million. This at least leaves us at positive territory in terms of income from property management. Property values were positive, SEK 416 million or 0.3%. As Pål mentioned, the net leasing for the period is SEK 82 million, whereof the large leasing in Hagastaden to Ericsson is most of that. Occupancy now at 88.0%, somewhat lower than the last quarter. On the investment side, we have net investments in the quarter of SEK 679 million. Thank you. thank you Looking at income and net operating income, both are down by some 3% compared with Q1 last year. looking at income and net operating income both are down by some 3% compared with q1 last year This is mainly due to higher vacancies, but also higher direct property costs. this is mainly due to higher vacancies but also higher direct property costs However, with lower central administration, SEK 24 million this quarter, SEK 66 million last quarter. however with lower central administration, sek 24 million this quarter, sek 66 million last quarter In addition to that, somewhat lower interest costs, some SEK 10 million, and a better contribution from Entra of SEK 17 million. in addition to that somewhat lower interest costs some sek 10 million and a better contribution from entra of sek 17 million This at least leaves us at positive territory in terms of income from property management. this at least leaves us at positive territory in terms of income from property management Property values were positive, SEK 416 million or 0.3%. property values were positive, sek 416 million or 0.3% As Pål mentioned, the net leasing for the period is SEK 82 million, whereof the large leasing in Hagastaden to Ericsson is most of that. as pål mentioned the net leasing for the period is sek 82 million whereof the large leasing in hagastaden to ericsson is most of that Occupancy now at 88.0%, somewhat lower than the last quarter. occupancy now at 88.0% somewhat lower than the last quarter On the investment side, we have net investments in the quarter of SEK 679 million. on the investment side we have net investments in the quarter of sek 679 million Of this, SEK 886 million investments in existing properties, and then we sold properties for SEK 214 million. Not including the large AP7 transaction, but this was transactions we made and communicated in the end of last year. The biggest one is one that's in Örebro. Into more details, income in the like-for-like portfolio decreased by SEK 47 million, and that corresponds to 2%. That is mainly due to the higher vacancies of SEK 60 million compared to the quarter last year. Both income and costs are affected by this divestment of our co-working business. This is the first full quarter without that business. Income decreased by some SEK 45 million, and costs decreased by some SEK 53 million. Of this, SEK 886 million investments in existing properties, and then we sold properties for SEK 214 million. of this sek 886 million investments in existing properties and then we sold properties for sek 214 million Not including the large AP7 transaction, but this was transactions we made and communicated in the end of last year. not including the large ap7 transaction but this was transactions we made and communicated in the end of last year The biggest one is one that's in Örebro. the biggest one is one that's in örebro Into more details, income in the like-for-like portfolio decreased by SEK 47 million, and that corresponds to 2%. into more details income in the like-for-like portfolio decreased by sek 47 million and that corresponds to 2% That is mainly due to the higher vacancies of SEK 60 million compared to the quarter last year. that is mainly due to the higher vacancies of sek 60 million compared to the quarter last year Both income and costs are affected by this divestment of our co-working business. both income and costs are affected by this divestment of our co-working business This is the first full quarter without that business. this is the first full quarter without that business Income decreased by some SEK 45 million, and costs decreased by some SEK 53 million. income decreased by some sek 45 million and costs decreased by some sek 53 million That is a quarterly net positive effect of SEK 8 million, in line with what we announced in October when we sold the company, where we indicated a positive yearly effect of SEK 30 million. That's quite spot on. On the cost side, the like-for-like property costs increased with SEK 45 million, and of this, SEK 38 million was due to higher costs for heating and snow due to the colder winter than the year before. As Pål mentioned also, looking at administration costs, and if we add both property administration and central administration, costs are down SEK 99 million. However, half of that, SEK 53 million, is related to this sold co-working business. That is a quarterly net positive effect of SEK 8 million, in line with what we announced in October when we sold the company, where we indicated a positive yearly effect of SEK 30 million. that is a quarterly net positive effect of sek 8 million in line with what we announced in october when we sold the company where we indicated a positive yearly effect of sek 30 million That's quite spot on. that's quite spot on On the cost side, the like-for-like property costs increased with SEK 45 million, and of this, SEK 38 million was due to higher costs for heating and snow due to the colder winter than the year before. on the cost side the like-for-like property costs increased with sek 45 million and of this, sek 38 million was due to higher costs for heating and snow due to the colder winter than the year before As Pål mentioned also, looking at administration costs, and if we add both property administration and central administration, costs are down SEK 99 million. as pål mentioned also looking at administration costs and if we add both property administration and central administration costs are down sek 99 million However, half of that, SEK 53 million, is related to this sold co-working business. however half of that, sek 53 million is related to this sold co-working business Then please also note that we have SEK 22 million of costs that we have moved from central administration to property administration, and this is part of that change that we did in the autumn, where we both reduced costs on the headquarters, but we also moved some staff to the regions. I would also say that we, in this quarter, have no material one-off, which we of course had quite a lot of in Q4. Looking at the leasing side, 14% of the total lease stock that were up for renegotiation, we negotiated during the period, with an average negative change in rent of 7.1%. It's quite small volume, and it's no specific or individual rental agreement behind it. It's actually a couple of them. As usual, the largest proportion are extended, but no changes in terms. Then please also note that we have SEK 22 million of costs that we have moved from central administration to property administration, and this is part of that change that we did in the autumn, where we both reduced costs on the headquarters, but we also moved some staff to the regions. then please also note that we have sek 22 million of costs that we have moved from central administration to property administration and this is part of that change that we did in the autumn where we both reduced costs on the headquarters but we also moved some staff to the regions I would also say that we, in this quarter, have no material one-off, which we of course had quite a lot of in Q4. i would also say that we in this quarter have no material one-off which we of course had quite a lot of in q4 Looking at the leasing side, 14% of the total lease stock that were up for renegotiation, we negotiated during the period, with an average negative change in rent of 7.1%. looking at the leasing side 14% of the total lease stock that were up for renegotiation we negotiated during the period with an average negative change in rent of 7.1% It's quite small volume, and it's no specific or individual rental agreement behind it. it's quite small volume and it's no specific or individual rental agreement behind it It's actually a couple of them. it's actually a couple of them As usual, the largest proportion are extended, but no changes in terms. as usual the largest proportion are extended but no changes in terms This quarter, about half of the volume, 49% or SEK 249 million, is sort of rolled over with no changes in terms. Net leasing, as mentioned, SEK 82 million. In addition to the Ericsson deal that we have talked about, we can also mention that we have some positive net leasing in Denmark of SEK 20 million, and we have some positive net leasing in the Mälardalen region of SEK 18 million, and that is roughly the amount of a new leasing to Light Industries. Looking at property values, as mentioned, they are up with SEK 400 million, mainly due to the Infinity project in Hagastaden, SEK 300 million+, and also the divestment of nine properties to AP7, approximately SEK 250 million up. That was also communicated in the press release in that transaction. If we take those two away, the remaining part is actually a little bit lower than the last quarter. This quarter, about half of the volume, 49% or SEK 249 million, is sort of rolled over with no changes in terms. this quarter about half of the volume 49% or sek 249 million is sort of rolled over with no changes in terms Net leasing, as mentioned, SEK 82 million. net leasing as mentioned, sek 82 million In addition to the Ericsson deal that we have talked about, we can also mention that we have some positive net leasing in Denmark of SEK 20 million, and we have some positive net leasing in the Mälardalen region of SEK 18 million, and that is roughly the amount of a new leasing to Light Industries. in addition to the ericsson deal that we have talked about we can also mention that we have some positive net leasing in denmark of sek 20 million and we have some positive net leasing in the mälardalen region of sek 18 million and that is roughly the amount of a new leasing to light industries Looking at property values, as mentioned, they are up with SEK 400 million, mainly due to the Infinity project in Hagastaden, SEK 300 million+, and also the divestment of nine properties to AP7, approximately SEK 250 million up. looking at property values as mentioned they are up with sek 400 million mainly due to the infinity project in hagastaden sek 300 million+ and also the divestment of nine properties to ap7 approximately sek 250 million up That was also communicated in the press release in that transaction. that was also communicated in the press release in that transaction If we take those two away, the remaining part is actually a little bit lower than the last quarter. if we take those two away the remaining part is actually a little bit lower than the last quarter SEK 138 billion of fair value, and this then of course includes the SEK 5.6 billion transaction with AP7, as that one is closing in Q2. A smaller part of it is actually in Q3, but the big part in Q2. Also in this quarter, we have actually lower cash flow expectations in our valuations, and that's the downward pressure on rental levels. That's the explanation to this smaller negative value changes if we exclude Infinity and AP7 transactions. Looking at the financing side, market conditions remain favorable despite increased volatility. We saw some credit spreads widening during the quarter as the conflict in the Middle East escalated, but we have recovered continuously during the quarter and now in the beginning of Q2, and spreads in the bond market are some 10, 15 basis points wider than the lows before the conflict started. SEK 138 billion of fair value, and this then of course includes the SEK 5.6 billion transaction with AP7, as that one is closing in Q2. sek 138 billion of fair value and this then of course includes the sek 5.6 billion transaction with ap7 as that one is closing in q2 A smaller part of it is actually in Q3, but the big part in Q2. a smaller part of it is actually in q3 but the big part in q2 Also in this quarter, we have actually lower cash flow expectations in our valuations, and that's the downward pressure on rental levels. also in this quarter we have actually lower cash flow expectations in our valuations and that's the downward pressure on rental levels That's the explanation to this smaller negative value changes if we exclude Infinity and AP7 transactions. that's the explanation to this smaller negative value changes if we exclude infinity and ap7 transactions Looking at the financing side, market conditions remain favorable despite increased volatility. looking at the financing side market conditions remain favorable despite increased volatility We saw some credit spreads widening during the quarter as the conflict in the Middle East escalated, but we have recovered continuously during the quarter and now in the beginning of Q2, and spreads in the bond market are some 10, 15 basis points wider than the lows before the conflict started. we saw some credit spreads widening during the quarter as the conflict in the middle east escalated but we have recovered continuously during the quarter and now in the beginning of q2 and spreads in the bond market are some 10 15 basis points wider than the lows before the conflict started Nordic banks continue to offer very competitive pricing and are willing to increase volumes. It's also on this side that we have been active in the quarter, so on the secured side with the refinancing of in total SEK 6.8 billion in bank loans. The average duration of those loans has been just over eight years, so quite long credit duration in the bank loans that we offered currently. That is, of course, contributing to the increase in our average debt maturity. We still have some SEK 18 billion in cash and unutilized credit facilities, providing us with sort of comfortable backup to the upcoming maturities, which are not very big. Financial key ratios are broadly stable compared to previous quarter. Nordic banks continue to offer very competitive pricing and are willing to increase volumes. nordic banks continue to offer very competitive pricing and are willing to increase volumes It's also on this side that we have been active in the quarter, so on the secured side with the refinancing of in total SEK 6.8 billion in bank loans. it's also on this side that we have been active in the quarter so on the secured side with the refinancing of in total sek 6.8 billion in bank loans The average duration of those loans has been just over eight years, so quite long credit duration in the bank loans that we offered currently. the average duration of those loans has been just over eight years so quite long credit duration in the bank loans that we offered currently That is, of course, contributing to the increase in our average debt maturity. that is of course contributing to the increase in our average debt maturity We still have some SEK 18 billion in cash and unutilized credit facilities, providing us with sort of comfortable backup to the upcoming maturities, which are not very big. Financial key ratios are broadly stable compared to previous quarter. we still have some sek 18 billion in cash and unutilized credit facilities providing us with sort of comfortable backup to the upcoming maturities which are not very big. financial key ratios are broadly stable compared to previous quarter However, a slight increase in the loan-to-value, now at 37.5%, mainly explained by the fact that we have bought shares in the quarter of some SEK 2 billion, while the proceeds from the transactions comes in Q2. ICR stable at 3.2x and a comfortable headroom against policies of 40% LTV and 3.0x ICR. As mentioned on the previous slide, average debt maturity is now slightly higher, 4.5 years, and the average fixed interest term is three years. Interest-bearing liabilities slightly up, same explanation, a bit higher due to the mismatch in acquiring shares in the quarter and proceeds from the transactions in the next quarter. Looking at the divestments, we have done, as mentioned, one large transaction and one with a small transaction. The large one we have talked about quite a lot already. SEK 5.6 billion public assets, 100% leased out, sold to AP7. However, a slight increase in the loan-to-value, now at 37.5%, mainly explained by the fact that we have bought shares in the quarter of some SEK 2 billion, while the proceeds from the transactions comes in Q2. however a slight increase in the loan-to-value now at 37.5% mainly explained by the fact that we have bought shares in the quarter of some sek 2 billion while the proceeds from the transactions comes in q2 ICR stable at 3.2 x and a comfortable headroom against policies of 40% LTV and 3.0 x ICR. icr stable at 3.2 x and a comfortable headroom against policies of 40% ltv and 3.0 x icr As mentioned on the previous slide, average debt maturity is now slightly higher, 4.5 years, and the average fixed interest term is three years. as mentioned on the previous slide average debt maturity is now slightly higher 4.5 years and the average fixed interest term is three years Interest-bearing liabilities slightly up, same explanation, a bit higher due to the mismatch in acquiring shares in the quarter and proceeds from the transactions in the next quarter. interest-bearing liabilities slightly up same explanation a bit higher due to the mismatch in acquiring shares in the quarter and proceeds from the transactions in the next quarter Looking at the divestments, we have done, as mentioned, one large transaction and one with a small transaction. looking at the divestments we have done as mentioned one large transaction and one with a small transaction The large one we have talked about quite a lot already. SEK 5.6 billion public assets, 100% leased out, sold to AP7. the large one we have talked about quite a lot already. sek 5.6 billion public assets 100% leased out sold to ap7 Fair value as of Q4 was SEK 5.15 billion. The total earnings effect was SEK 715 million. That one is closing now in Q2 and Q3. The smaller one, maybe not small for the Linköping market, SEK 256 million, sold to the Åhman family. A big difference, 25% vacancies. From our perspective, quite a lot of investment needs in the portfolio going forward, and a good transaction from our perspective. An update on the share buybacks that we are conducting. After the divestment of the portfolio to AP7, the board announced that we are initiating a share buyback program, a total of SEK 3.4 billion. Of that, we have so far acquired for SEK 2.7 billion. That is up until today or yesterday evening, at least. Fair value as of Q4 was SEK 5.15 billion. fair value as of q4 was sek 5.15 billion The total earnings effect was SEK 715 million. the total earnings effect was sek 715 million That one is closing now in Q2 and Q3. that one is closing now in q2 and q3 The smaller one, maybe not small for the Linköping market, SEK 256 million, sold to the Åhman family. the smaller one maybe not small for the linköping market, sek 256 million sold to the åhman family A big difference, 25% vacancies. a big difference 25% vacancies From our perspective, quite a lot of investment needs in the portfolio going forward, and a good transaction from our perspective. from our perspective quite a lot of investment needs in the portfolio going forward and a good transaction from our perspective An update on the share buybacks that we are conducting. an update on the share buybacks that we are conducting After the divestment of the portfolio to AP7, the board announced that we are initiating a share buyback program, a total of SEK 3.4 billion. after the divestment of the portfolio to ap7 the board announced that we are initiating a share buyback program a total of sek 3.4 billion Of that, we have so far acquired for SEK 2.7 billion. of that we have so far acquired for sek 2.7 billion That is up until today or yesterday evening, at least. that is up until today or yesterday evening at least Out of that, some SEK 2 billion was acquired during the quarter, and then the remaining one now in April. Average price, SEK 113 per share. The large lease during the quarter, 24,000 sq m in Hagastaden. The entire building, and with a 15-year duration. It includes an option for the tenant up until 1st of June this year. Roughly in a month, we will know if they have the optionality to decrease it to a five-year tenant with approximately half of the volume. Out of that, some SEK 2 billion was acquired during the quarter, and then the remaining one now in April. out of that some sek 2 billion was acquired during the quarter and then the remaining one now in april Average price, SEK 113 per share. average price, sek 113 per share The large lease during the quarter, 24,000 sq m in Hagastaden. the large lease during the quarter 24,000 sq m in hagastaden The entire building, and with a 15-year duration. the entire building and with a 15-year duration It includes an option for the tenant up until 1st of June this year. it includes an option for the tenant up until 1st of june this year Roughly in a month, we will know if they have the optionality to decrease it to a five-year tenant with approximately half of the volume. roughly in a month we will know if they have the optionality to decrease it to a five-year tenant with approximately half of the volume

Speaker 7: To wrap things up, some words on our sustainability performance. The day-to-day work to decrease our energy consumptions goes on as previously. During the quarter, we have reduced the energy consumptions in the like-for-like portfolio with 4%, and roughly one-fourth of our electricity is self-generated, mostly by solar panels. Before we let all the questions in, let me just summarize a bit. We have positive net leasing, SEK 82 million, whereof SEK 72 million from Ericsson. It's the fourth quarter in a row with positive net leasing, but very low figures, one could say. It remains slow in the leasing market. To wrap things up, some words on our sustainability performance. to wrap things up some words on our sustainability performance The day-to-day work to decrease our energy consumptions goes on as previously. the day-to-day work to decrease our energy consumptions goes on as previously During the quarter, we have reduced the energy consumptions in the like-for-like portfolio with 4%, and roughly one-fourth of our electricity is self-generated, mostly by solar panels. during the quarter we have reduced the energy consumptions in the like-for-like portfolio with 4% and roughly one-fourth of our electricity is self-generated mostly by solar panels Before we let all the questions in, let me just summarize a bit. before we let all the questions in let me just summarize a bit We have positive net leasing, SEK 82 million, whereof SEK 72 million from Ericsson. we have positive net leasing, sek 82 million whereof sek 72 million from ericsson It's the fourth quarter in a row with positive net leasing, but very low figures, one could say. it's the fourth quarter in a row with positive net leasing but very low figures one could say It remains slow in the leasing market. it remains slow in the leasing market We made two transactions very successfully, I would say, and that's part of the Back to Basics principle to remove everything that we don't believe will give a 10% return on equity. The cost savings program we conducted during the autumn now comes into the figures. With that, I think we can hand over to questions. We made two transactions very successfully, I would say, and that's part of the Back to Basics principle to remove everything that we don't believe will give a 10% return on equity. we made two transactions very successfully i would say and that's part of the back to basics principle to remove everything that we don't believe will give a 10% return on equity The cost savings program we conducted during the autumn now comes into the figures. the cost savings program we conducted during the autumn now comes into the figures With that, I think we can hand over to questions. with that i think we can hand over to questions

Speaker 1: Yes, we do. If you'd like to ask a question by phone, please dial pound key five and ask your question. The first question comes from Tobias Kaj, Nordea. Yes, we do. yes we do If you'd like to ask a question by phone, please dial pound key five and ask your question. if you'd like to ask a question by phone please dial pound key five and ask your question The first question comes from Tobias Kaj, Nordea. the first question comes from tobias kaj nordea

Speaker 8: Good morning. Thank you for presentation and for taking my questions. First, I have a couple of general questions. Regarding your portfolio, is it possible to, in some way, quantify how large proportion that you think that doesn't meet your return requirements? Good morning. good morning Thank you for presentation and for taking my questions. thank you for presentation and for taking my questions First, I have a couple of general questions. first i have a couple of general questions Regarding your portfolio, is it possible to, in some way, quantify how large proportion that you think that doesn't meet your return requirements? regarding your portfolio is it possible to in some way quantify how large proportion that you think that doesn't meet your return requirements

Speaker 7: Not really. I think we are looking at that continuously, and one thing that's very important in that equation is actually what prices you can achieve. It's difficult to answer that question. I would say there's a big proportion that actually can achieve 10%, and there's a proportion also that I would say is borderline, and then there's a proportion that probably not, depending on prices, that not will meet our 10% return requirement. I cannot give you a figure on that right now. Not really. not really I think we are looking at that continuously, and one thing that's very important in that equation is actually what prices you can achieve. i think we are looking at that continuously and one thing that's very important in that equation is actually what prices you can achieve It's difficult to answer that question. it's difficult to answer that question I would say there's a big proportion that actually can achieve 10%, and there's a proportion also that I would say is borderline, and then there's a proportion that probably not, depending on prices, that not will meet our 10% return requirement. i would say there's a big proportion that actually can achieve 10% and there's a proportion also that i would say is borderline and then there's a proportion that probably not depending on prices that not will meet our 10% return requirement I cannot give you a figure on that right now. i cannot give you a figure on that right now

Speaker 8: That's fair. Can I follow up? How does that view impact your view on projects? If you complete a project with a long lease to a stable tenant, and it's fully let, is it possible to continue to own those kind of properties, or should those properties be sold, as they are completed? Or do you give promises to the tenant that you will remain as a long-term owner, so you can't sell it? That's fair. that's fair Can I follow up? can i follow up How does that view impact your view on projects? how does that view impact your view on projects If you complete a project with a long lease to a stable tenant, and it's fully let, is it possible to continue to own those kind of properties, or should those properties be sold, as they are completed? if you complete a project with a long lease to a stable tenant and it's fully let is it possible to continue to own those kind of properties or should those properties be sold as they are completed Or do you give promises to the tenant that you will remain as a long-term owner, so you can't sell it? or do you give promises to the tenant that you will remain as a long-term owner so you can't sell it

Speaker 7: The last question, that's very uncommon, that you have to promise tenants that you keep something forever and ever. I wouldn't say that that's a question. If we complete something and obviously then the property is in its prime, so the demand for those type of properties may very well in different markets, depending on the market and interest rate, may be very high. It's from case to case, I would say. The last question, that's very uncommon, that you have to promise tenants that you keep something forever and ever. the last question that's very uncommon that you have to promise tenants that you keep something forever and ever I wouldn't say that that's a question. i wouldn't say that that's a question If we complete something and obviously then the property is in its prime, so the demand for those type of properties may very well in different markets, depending on the market and interest rate, may be very high. if we complete something and obviously then the property is in its prime so the demand for those type of properties may very well in different markets depending on the market and interest rate may be very high It's from case to case, I would say. it's from case to case i would say

Speaker 8: Okay, thank you. Regarding your renegotiations, even though it's a small number, is it related to some specific region or some specific category? Okay, thank you. okay thank you Regarding your renegotiations, even though it's a small number, is it related to some specific region or some specific category? regarding your renegotiations even though it's a small number is it related to some specific region or some specific category

Speaker 1: No, actually not. It's quite a lot of the different underlying rental agreements, and actually different categories and different geographies. That's unfortunately not. No, actually not. no actually not It's quite a lot of the different underlying rental agreements, and actually different categories and different geographies. it's quite a lot of the different underlying rental agreements and actually different categories and different geographies That's unfortunately not. that's unfortunately not

Speaker 8: Okay, regarding your admin expenses, both the level of expenses for central admin in Q1 and the movement from central admin to property admin in Q1, is that a reasonable level also for coming quarters, or are there some seasonal variations in those numbers? Okay, regarding your admin expenses, both the level of expenses for central admin in Q1 and the movement from central admin to property admin in Q1, is that a reasonable level also for coming quarters, or are there some seasonal variations in those numbers? okay regarding your admin expenses both the level of expenses for central admin in q1 and the movement from central admin to property admin in q1 is that a reasonable level also for coming quarters or are there some seasonal variations in those numbers

Speaker 1: No seasonal variations. That's roughly in line with the expectations, although we of course do not guide on it, but it's quite clean, so to say. No one-offs in it. No seasonal variations. no seasonal variations That's roughly in line with the expectations, although we of course do not guide on it, but it's quite clean, so to say. that's roughly in line with the expectations although we of course do not guide on it but it's quite clean so to say No one-offs in it. no one-offs in it

Speaker 8: Okay, perfect. That's all from me. Thank you. Okay, perfect. okay perfect That's all from me. that's all from me Thank you. thank you

Speaker 1: Thank you. The next question, Lars Norrby, SEB. Thank you. thank you The next question, Lars Norrby, SEB. the next question lars norrby seb

Speaker 3: Good morning. Question about buybacks. By the way, love your comment there. If we can't earn it, we will return it. You still have some way to go on the SEK 3.4 billion buyback program that you have, and on top of that, I guess you have the capital distribution for 2025, a few hundred million on that one. To do even more than that, but does that necessitate more divestments of properties? Good morning. good morning Question about buybacks. question about buybacks By the way, love your comment there. by the way love your comment there If we can't earn it, we will return it. if we can't earn it we will return it You still have some way to go on the SEK 3.4 billion buyback program that you have, and on top of that, I guess you have the capital distribution for 2025, a few hundred million on that one. you still have some way to go on the sek 3.4 billion buyback program that you have and on top of that i guess you have the capital distribution for 2025 a few hundred million on that one To do even more than that, but does that necessitate more divestments of properties? to do even more than that but does that necessitate more divestments of properties

Speaker 1: At least we do not have any plans for more than that, should we not do any more divestments. At least we do not have any plans for more than that, should we not do any more divestments. at least we do not have any plans for more than that should we not do any more divestments

Speaker 3: You've done some quite sizable divestments, the SEK 5.9 billion and the close to SEK 300 million or so, but still your total portfolio is something like SEK 138 billion. Why haven't you been able to do more? I guess you want to do much more than that. Isn't that true? You've done some quite sizable divestments, the SEK 5.9 billion and the close to SEK 300 million or so, but still your total portfolio is something like SEK 138 billion. you've done some quite sizable divestments the sek 5.9 billion and the close to sek 300 million or so but still your total portfolio is something like sek 138 billion Why haven't you been able to do more? why haven't you been able to do more I guess you want to do much more than that. i guess you want to do much more than that Isn't that true? isn't that true

Speaker 7: What we see right now, I would say that we see quite a big interest in general on the property transaction market to make transactions. That's quite clear. More in detail than that, I don't think we can answer more in detail than that. We have discussions with interested parties, and as soon as we have something to tell, we will definitely tell. What we see right now, I would say that we see quite a big interest in general on the property transaction market to make transactions. what we see right now i would say that we see quite a big interest in general on the property transaction market to make transactions That's quite clear. that's quite clear More in detail than that, I don't think we can answer more in detail than that. more in detail than that i don't think we can answer more in detail than that We have discussions with interested parties, and as soon as we have something to tell, we will definitely tell. we have discussions with interested parties and as soon as we have something to tell we will definitely tell

Speaker 3: Okay. Thank you. Okay. okay Thank you. thank you

Speaker 1: Next question, Nadir Rahman, UBS. Next question, Nadir Rahman, UBS. next question nadir rahman ubs

Speaker 4: Hello. Sorry, can you hear me now? Hello. hello Sorry, can you hear me now? sorry can you hear me now

Speaker 7: Yeah. Yeah. yeah

Speaker 4: Sorry, I think I was muted. Apologies. Sorry, I'd already started. Yes. I have two questions from me. The first one is, in your report, if we look at the value decline in the markets that you mentioned have a lower expected cash flows, I'm assuming this is firstly the Kista in Finland, which you said you took value declines on in Q4. Could you give some more color as to where this decline was concentrated? Then I can ask my second question after this. Sorry, I think I was muted. sorry i think i was muted Apologies. apologies Sorry, I'd already started. sorry i'd already started Yes. yes I have two questions from me. i have two questions from me The first one is, in your report, if we look at the value decline in the markets that you mentioned have a lower expected cash flows, I'm assuming this is firstly the Kista in Finland, which you said you took value declines on in Q4. the first one is in your report if we look at the value decline in the markets that you mentioned have a lower expected cash flows i'm assuming this is firstly the kista in finland which you said you took value declines on in q4 Could you give some more color as to where this decline was concentrated? could you give some more color as to where this decline was concentrated Then I can ask my second question after this. then i can ask my second question after this

Speaker 1: Not really any concentration to that. You are correct that Kista in Finland was more Q4, so this is more broadly across the portfolio. Not really any concentration to that. not really any concentration to that You are correct that Kista in Finland was more Q4, so this is more broadly across the portfolio. you are correct that kista in finland was more q4 so this is more broadly across the portfolio

Speaker 4: Okay. The second question is on the slight decline in rental income. Of course, an opportunity as well, and you're mentioning that this is largely due to the effect of the legacy, like negative net lettings from last year. When do we expect this to start to inflect, and we start to see a more positive effect from any positive net lettings from the last four quarters? Do you have perhaps an indication of when we see that inflection? Okay. okay The second question is on the slight decline in rental income. the second question is on the slight decline in rental income Of course, an opportunity as well, and you're mentioning that this is largely due to the effect of the legacy, like negative net lettings from last year. of course an opportunity as well and you're mentioning that this is largely due to the effect of the legacy like negative net lettings from last year When do we expect this to start to inflect, and we start to see a more positive effect from any positive net lettings from the last four quarters? when do we expect this to start to inflect and we start to see a more positive effect from any positive net lettings from the last four quarters Do you have perhaps an indication of when we see that inflection? do you have perhaps an indication of when we see that inflection

Speaker 1: We don't really have that indication. Maybe we have that indication, but we don't guide on it. What we could mention is, of course, that Q1 last year was very negative, net leasing was, and then it was positive, very small figures, but positive Q2, Q3, and Q4, and now positive again in Q1 this year. We can't give more details than that. We don't really have that indication. we don't really have that indication Maybe we have that indication, but we don't guide on it. maybe we have that indication but we don't guide on it What we could mention is, of course, that Q1 last year was very negative, net leasing was, and then it was positive, very small figures, but positive Q2, Q3, and Q4, and now positive again in Q1 this year. what we could mention is of course that q1 last year was very negative net leasing was and then it was positive very small figures but positive q2 q3 and q4 and now positive again in q1 this year We can't give more details than that. we can't give more details than that

Speaker 4: Okay. Very clear. Just to come back to my initial question on the value decline. Instead of any regional concentration, is there any asset class, for example, offices or any other sector that you see this value decline occurring in more? Okay. okay Very clear. very clear Just to come back to my initial question on the value decline. just to come back to my initial question on the value decline Instead of any regional concentration, is there any asset class, for example, offices or any other sector that you see this value decline occurring in more? instead of any regional concentration is there any asset class for example offices or any other sector that you see this value decline occurring in more

Speaker 1: Not really there either. It's actually in different asset classes. Quite small volume in the big perspective, I would say. Not really there either. not really there either It's actually in different asset classes. it's actually in different asset classes Quite small volume in the big perspective, I would say. quite small volume in the big perspective i would say

Speaker 4: Okay. Very clear. Thank you. Okay. okay Very clear. very clear Thank you. thank you

Speaker 1: Thank you. Next question from John Wong, Keppel. Thank you. thank you Next question from John Wong, Keppel. next question from john wong keppel

Speaker 2: Hi, good morning. In the previous energy crisis, Castellum wasn't really fully hedged against electricity costs. With the war ongoing, could you provide a bit more color on how well you're now protected against a surge in electricity prices? Hi, good morning. hi good morning In the previous energy crisis, Castellum wasn't really fully hedged against electricity costs. in the previous energy crisis castellum wasn't really fully hedged against electricity costs With the war ongoing, could you provide a bit more color on how well you're now protected against a surge in electricity prices? with the war ongoing could you provide a bit more color on how well you're now protected against a surge in electricity prices

Speaker 1: Yes. We changed that a couple of years ago to a more, maybe more normal, I don't know, but at least a different hedging strategy, more classic, 80%/60%/40%/20% strategy. I would say better hedged. Not fully hedged, but better hedged and quite evenly over the couple of the years. Yes. yes We changed that a couple of years ago to a more, maybe more normal, I don't know, but at least a different hedging strategy, more classic, 80%/60%/40%/20% strategy. we changed that a couple of years ago to a more maybe more normal i don't know but at least a different hedging strategy more classic 80%/60%/40%/20% strategy I would say better hedged. i would say better hedged Not fully hedged, but better hedged and quite evenly over the couple of the years. not fully hedged but better hedged and quite evenly over the couple of the years

Speaker 2: Okay, that's clear. Thank you. Just on the share buyback, I think in your latest press release from this week, I noticed that there were no repurchases done on Friday and Monday. I suppose that also coincides with the share price above 125. Could you provide a bit more color on this? Okay, that's clear. okay that's clear Thank you. thank you Just on the share buyback, I think in your latest press release from this week, I noticed that there were no repurchases done on Friday and Monday. just on the share buyback i think in your latest press release from this week i noticed that there were no repurchases done on friday and monday I suppose that also coincides with the share price above 125. i suppose that also coincides with the share price above 125 Could you provide a bit more color on this? could you provide a bit more color on this

Speaker 1: That's correct. As of lately, we have bought back shares through this safe harbor procedure as we have been in close period, and then we instructed the bank of that share price maximum. That's correct. that's correct As of lately, we have bought back shares through this safe harbor procedure as we have been in close period, and then we instructed the bank of that share price maximum. as of lately we have bought back shares through this safe harbor procedure as we have been in close period and then we instructed the bank of that share price maximum

Speaker 2: Okay, thank you. Just lastly on the occupancy, I noticed you restated several numbers. Could you highlight what has changed and why it has changed? Okay, thank you. okay thank you Just lastly on the occupancy, I noticed you restated several numbers. just lastly on the occupancy i noticed you restated several numbers Could you highlight what has changed and why it has changed? could you highlight what has changed and why it has changed

Speaker 1: Could you repeat the question? Could you repeat the question? could you repeat the question

Speaker 2: On your occupancy definition, I noticed you restated some historical numbers in the quarterly reporting. What has changed in the definition of occupancy, and why did you change it? On your occupancy definition, I noticed you restated some historical numbers in the quarterly reporting. on your occupancy definition i noticed you restated some historical numbers in the quarterly reporting What has changed in the definition of occupancy, and why did you change it? what has changed in the definition of occupancy and why did you change it

Speaker 1: What we have changed is that previously our occupancy was for the full period, where now we have changed it into end of period. The reason for that is that we think that's more accurate, especially when you come to the end of the year, when you are very much affected by the vacancy level in the first quarters of the year. I think that's more common that the vacancy figure or occupancy figures are end of period figures. What we have changed is that previously our occupancy was for the full period, where now we have changed it into end of period. what we have changed is that previously our occupancy was for the full period where now we have changed it into end of period The reason for that is that we think that's more accurate, especially when you come to the end of the year, when you are very much affected by the vacancy level in the first quarters of the year. the reason for that is that we think that's more accurate especially when you come to the end of the year when you are very much affected by the vacancy level in the first quarters of the year I think that's more common that the vacancy figure or occupancy figures are end of period figures. i think that's more common that the vacancy figure or occupancy figures are end of period figures

Speaker 2: Okay, that's clear. Thank you. Okay, that's clear. okay that's clear Thank you. thank you

Speaker 1: Thank you, John. Next question, Paul May, Barclays. Thank you, John. thank you john Next question, Paul May, Barclays. next question paul may barclays

Speaker 5: Hi, guys. Thanks for the presentation. Just a couple quick ones from me. You mentioned obviously looking at disposals and selling assets where you don't hit your return requirements. Just wondering who would be the buyers of those assets, because there's not many buyers or much capital out there that's looking for the low returns that you would anticipate on those assets and hence you're trying to sell them? Just wondering if you could give some color on that would be great. And then secondly, on the operating environment, appreciate it's not particularly easy out there, and as you've highlighted, it's quite tough. I think you've talked about improving the leasing environment, improving the operating metrics. When should we expect those to actually flow through into real numbers in terms of occupancy and NRI growth, which seems to be getting worse rather than better? Hi, guys. hi guys Thanks for the presentation. thanks for the presentation Just a couple quick ones from me. just a couple quick ones from me You mentioned obviously looking at disposals and selling assets where you don't hit your return requirements. you mentioned obviously looking at disposals and selling assets where you don't hit your return requirements Just wondering who would be the buyers of those assets, because there's not many buyers or much capital out there that's looking for the low returns that you would anticipate on those assets and hence you're trying to sell them? just wondering who would be the buyers of those assets because there's not many buyers or much capital out there that's looking for the low returns that you would anticipate on those assets and hence you're trying to sell them Just wondering if you could give some color on that would be great. just wondering if you could give some color on that would be great And then secondly, on the operating environment, appreciate it's not particularly easy out there, and as you've highlighted, it's quite tough. and then secondly on the operating environment appreciate it's not particularly easy out there and as you've highlighted it's quite tough I think you've talked about improving the leasing environment, improving the operating metrics. i think you've talked about improving the leasing environment improving the operating metrics When should we expect those to actually flow through into real numbers in terms of occupancy and NRI growth, which seems to be getting worse rather than better? when should we expect those to actually flow through into real numbers in terms of occupancy and nri growth which seems to be getting worse rather than better Is it to do with your weaker assets or weaker locations, or do you just think it's a market-wide soft leasing market that just requires time before that starts to improve? Thanks. Is it to do with your weaker assets or weaker locations, or do you just think it's a market-wide soft leasing market that just requires time before that starts to improve? is it to do with your weaker assets or weaker locations or do you just think it's a market-wide soft leasing market that just requires time before that starts to improve Thanks. thanks

Speaker 1: I can start with the first question. We actually disagree a bit. We think it's plenty of interests out there, plenty of capital out there interested in a very large proportion of our assets. And I would say that's from different kinds of capital or investors as well, local and foreign, institutional and private, listed real estate companies and private equity firms, and not at least the Swedish institutions. We think it's very much interest in the transaction market. I can start with the first question. i can start with the first question We actually disagree a bit. we actually disagree a bit We think it's plenty of interests out there, plenty of capital out there interested in a very large proportion of our assets. we think it's plenty of interests out there plenty of capital out there interested in a very large proportion of our assets And I would say that's from different kinds of capital or investors as well, local and foreign, institutional and private, listed real estate companies and private equity firms, and not at least the Swedish institutions. and i would say that's from different kinds of capital or investors as well local and foreign institutional and private listed real estate companies and private equity firms and not at least the swedish institutions We think it's very much interest in the transaction market. we think it's very much interest in the transaction market

Speaker 7: Regarding the operational figures, vacancy and like-for-like growth, I would imagine, we're not guiding, but I would imagine that we will continue to see a pretty slow market for a while. We haven't seen any turnaround as of yet anyways. Until we reach sort of a new equilibrium where we are, we probably will see figures that are a bit on the downslope before it turns. This was also, I think we indicated that during the autumn that it will get a bit worse before it can improve. Now we at least have positive net letting even if it's dancing around the zero, but it's still positive. We are not seeing a rapid increase in demand for our properties in the rental market as it is. Regarding the operational figures, vacancy and like-for-like growth, I would imagine, we're not guiding, but I would imagine that we will continue to see a pretty slow market for a while. regarding the operational figures vacancy and like-for-like growth i would imagine, we're not guiding but i would imagine that we will continue to see a pretty slow market for a while We haven't seen any turnaround as of yet anyways. we haven't seen any turnaround as of yet anyways Until we reach sort of a new equilibrium where we are, we probably will see figures that are a bit on the downslope before it turns. until we reach sort of a new equilibrium where we are we probably will see figures that are a bit on the downslope before it turns This was also, I think we indicated that during the autumn that it will get a bit worse before it can improve. this was also i think we indicated that during the autumn that it will get a bit worse before it can improve Now we at least have positive net letting even if it's dancing around the zero, but it's still positive. now we at least have positive net letting even if it's dancing around the zero but it's still positive We are not seeing a rapid increase in demand for our properties in the rental market as it is. we are not seeing a rapid increase in demand for our properties in the rental market as it is

Speaker 5: Cool. Thank you. Cool. cool Thank you. thank you

Speaker 1: Thank you. Thanks. Next question, Pranava Boyidapu, sorry if I'm pronouncing it wrong. Also Barclays. Thank you. thank you Thanks. you thanks Next question, Pranava Boyidapu, sorry if I'm pronouncing it wrong. next question pranava boyidapu sorry if i'm pronouncing it wrong Also Barclays. also barclays

Speaker 6: Hello. Thank you for taking my question. I'm [Pulmi] Credit Analyst. On that note, I would like to get a little bit more clarity on what your, if you can't earn it, we'll return it policy means for the bondholders. Because, again, at the cost of sounding repetitive, there are some loose ends with the consent solicitation that didn't go through specifically for the Castellum 2029 Eurobonds. I was just wondering at what point in your business plan does it seem like you could potentially consider the bondholders on the side of a cessation of business event? Hello. hello Thank you for taking my question. thank you for taking my question I'm [Pulmi] Credit Analyst. i'm [pulmi] credit analyst On that note, I would like to get a little bit more clarity on what your, if you can't earn it, we'll return it policy means for the bondholders. on that note i would like to get a little bit more clarity on what your if you can't earn it we'll return it policy means for the bondholders Because, again, at the cost of sounding repetitive, there are some loose ends with the consent solicitation that didn't go through specifically for the Castellum 2029 Eurobonds. because again at the cost of sounding repetitive there are some loose ends with the consent solicitation that didn't go through specifically for the castellum 2029 eurobonds I was just wondering at what point in your business plan does it seem like you could potentially consider the bondholders on the side of a cessation of business event? i was just wondering at what point in your business plan does it seem like you could potentially consider the bondholders on the side of a cessation of business event

Speaker 1: Same answer that we have said before, that if and when we come to that point in time that we are having such transactions sort of on the table, then we will handle it at that point in time. Same answer that we have said before, that if and when we come to that point in time that we are having such transactions sort of on the table, then we will handle it at that point in time. same answer that we have said before that if and when we come to that point in time that we are having such transactions sort of on the table then we will handle it at that point in time

Speaker 6: Then I have a second question. Regarding your hybrid debt, which is, I believe, SEK 1 billion with the first call next year. I was wondering if you had any plans in terms of how you expect to refinance it, because considering the size of it. I assume that the hybrids will remain a part of your capital structure. If there are potentially different currencies you might consider or is it going to be euros? Then I have a second question. then i have a second question Regarding your hybrid debt, which is, I believe, SEK 1 billion with the first call next year. regarding your hybrid debt which is i believe sek 1 billion with the first call next year I was wondering if you had any plans in terms of how you expect to refinance it, because considering the size of it. i was wondering if you had any plans in terms of how you expect to refinance it because considering the size of it I assume that the hybrids will remain a part of your capital structure. i assume that the hybrids will remain a part of your capital structure If there are potentially different currencies you might consider or is it going to be euros? if there are potentially different currencies you might consider or is it going to be euros

Speaker 1: Also on that one, we will announce our plans sort of when we have decided on our plans. Also on that one, we will announce our plans sort of when we have decided on our plans. also on that one we will announce our plans sort of when we have decided on our plans

Speaker 6: All right. Thank you very much. All right. all right Thank you very much. thank you very much

Speaker 1: Thank you. That seems to be the last question of today. Thank you all for listening and thanks for the questions. Thank you. thank you That seems to be the last question of today. that seems to be the last question of today Thank you all for listening and thanks for the questions. thank you all for listening and thanks for the questions

Speaker 7: Yes, thank you, and until next time. Yes, thank you, and until next time. yes thank you and until next time