Q2 2026 Wihlborgs Fastigheter AB Earnings Call

July 6, 2026

Speaker #2: This call is being recorded.

Speaker #1: You're line is muted.

Speaker #3: Arshakul.

Speaker #4: And welcome to the presentation of Wihlborgs' first half report 2026. So let's start with the future, and the acquisition of 95 properties in Malmö, Lund, and Helsingborg.

Ulrika Hallengren: Welcome to the presentation of Wihlborgs H1 report 2026. Let's start with the future and the acquisition of 95 properties in Malmö, Lund, and Helsingborg. 635,000 square meters, initial yield including property management cost at 5%, just in line with our Swedish portfolio. This is before we have done any efficiency improvement that we expect from ourselves. Additional upside is 15% vacancy to give development possibilities ahead. The total portfolio suit us almost like a tailor-made glove. The location is right into our most appreciated areas. The mix with both offices and industrial logistics is perfect. If we look at the location of our properties in Malmö City, including part of Dockan and Nyhamnen, Wihlborgs own the black-colored buildings in this map. Here we can add on 11 properties in the same area, located as the red dots.

Speaker #4: 635,000 square meters, initial yield including property management cost at 5%, just in line with our Swedish portfolio. And this is before we have done any efficiency improvements that we expect from ourselves.

Speaker #4: Additional upside is 15% vacancy, which gives development possibilities ahead. The total portfolio suited us almost like a tailor-made glove. The location is right in our most appreciated areas, and the mix of both offices and industrial logistics is perfect.

Speaker #4: If we look at the location of our properties in Malmö City, including parts of Dockhamn and Nyhamnen, Wihlborgs owns the black-colored buildings on this map.

Speaker #4: And here we can add on 11 properties in the same area, located as the red dots. In the area of Fosie in Malmö, we can add on 17 properties.

Ulrika Hallengren: In the area of Fosie in Malmö, we can add on 17 properties. In Lund at the Ideon site, here is four properties from Castellum. Two of them are land for development. In the city center of Helsingborg, we have several large properties. Here is the location of 14 additional properties. In the Berga location in Helsingborg, we can add on 10 properties. Almost like yin and yang for these portfolios. Now we can work with a larger portfolio for our tenants, but also to make room for the other investors that might be a better owner for some of the areas or properties. The interest for investments in the region is high. This is a way to create possibilities for future growth of income and growth of operating surplus for our shareholders.

Speaker #4: In Lund, at the ideal site, there are four properties from Castellum; two of them are land for development. In the city center of Helsingborg, we have several large properties, and here is the location of 14 additional properties.

Speaker #4: And in the Berga location in Helsingborg, we can add on 10 properties. So, almost like yin and yang for these portfolios. Now we can work with the larger portfolio for our tenants, but also make room for other investors that might be a better owner for some of the areas or properties.

Speaker #4: The interest in investments in the region is high. This is a way to create opportunities for future growth of income and growth of operating surplus for our shareholders.

Speaker #4: If we can choose, we are totally convinced that if you can get growth in the market, you already know very well you can perform better.

Ulrika Hallengren: If we can choose, we are totally convinced that if you can get growth in the market you already know very well, you can perform better. If you combine a large acquisition with both higher operating surplus immediately and larger possibilities for future development, it's a perfect match. We have done things like this several times before. The acquisition of Ideon from Ikano 2013 increased the LTV to 63% initially, and the acquisition of Nya Vattentornet 2019 gave us a quite large additional vacancy in an area where the vacancy in our own portfolio was already high. Now the Ideon area is very successful and still with tenants in different sectors. Our plan is to do the same thing with the Castellum portfolio, it will demand hard work and some time. For us, this is a very well-known business in a very well-known market.

Speaker #4: And if you combine a large acquisition with both higher operating surplus immediately, and larger possibilities for future development, it's a perfect match. We have done things like this several times before.

Speaker #4: The acquisition of Ideon from Ikano in 2013 increased the LTV to 63%, initially, and the acquisition of Nya Vattentornet in 2019 gave us a quite large additional vacancy in an area where the vacancy in our own portfolio was already high.

Speaker #4: Now the Ideon area is very successful and filled with tenants in different sectors. Our plan is to do the same thing with the Castellum portfolio, and it will demand hard work and some time, but for us, this is a very well-known business in a very well-known market.

Speaker #4: The price of the portfolio is agreed to SEK 13.3 billion, 5% under Castellum's valuation. And let's remember that Castellum, from 2022 and ahead, decreased their valuations of the properties significantly.

Ulrika Hallengren: The price of the portfolio is agreed to SEK 13.3 billion, 5% under Castellum's valuation. Let's remember that Castellum from 2022 and ahead decreased the valuations of the properties significantly. We think that Castellum's valuation can be fair. The total portfolio and including the whole business, the price should be a bit lower than a valuation property by property, just in accordance with the agreement. What about timing? Is summer 2026 not the time for cautiousness? Our call is that business is best done when the shop is open, and it is better to be ahead of the queue. Running a property portfolio means to look far ahead, to put some plants in the soil, and be prepared to harvest in the long run. We think the opportunities for Wihlborgs improve significantly with this transaction, and there is no opportunistic thoughts behind that, just a dry, data-driven investment model.

Speaker #4: We think that Castellum's valuation can be fair, but for the total portfolio, and including the whole business, the price should be a bit lower than the valuation property by property.

Speaker #4: Just in accordance with the agreement. And what about timing? Is summer 2026 not the time for caution? Our call is that business is best done when the shop is open, and it's better to be ahead of the queue.

Speaker #4: Running a property portfolio means to look far ahead, to put some plants in the soil, and be prepared to harvest in the long run.

Speaker #4: We think the opportunities for Wihlborgs improved significantly with this transaction. And there are no opportunistic thoughts behind that—just a dry, data-driven investment model.

Speaker #4: Let's go to our report, and we start with a summary of Q2. Rental income is up 7% compared to a year ago, reaching a new record level.

Ulrika Hallengren: Let's go to our report. I will start with a summary of Q2 2026. Rental income up 7% compared to a year ago, a new record level. Operating surplus, +6%, also a new record. Income from property management, +6%. Net letting positive at SEK +5 million, but most important that the number of discussions and possibilities ahead have improved after the frosty start of the year. Market rents as well as rental income in like-for-like portfolio continue to develop positive. Net debt to EBITDA at 10.7x. Of course, we signed the agreement with Castellum, as I just mentioned, but high focus on daily business, which continues to be our strong core. With some more figures on that for the full period, rental income up 8% to SEK 2,324 million. The operating surplus, +8%, SEK 1,664 million.

Speaker #4: Operating surplus up 6%, also a new record. Income for property management up 6%. Net letting positive at SEK 5 million. But most important is that the number of discussions and possibilities ahead have improved after the frosty start of the year.

Speaker #4: Market rents, as well as rental income in the like-for-like portfolio, continue to develop positively. Net debt to EBITDA is at 10.7 times. And of course, we signed the agreement with Castellum, as I just mentioned. But there is a high focus on daily business, which continues to be our strong core.

Speaker #4: With some more figures on that for the full period: rental income was up 8% to SEK 2,324 million. The operating surplus was up 8% to SEK 1,664 million, and income for property management was up 9% to SEK 1,077 million.

Ulrika Hallengren: Income from property management, +9% to SEK 1,077 million. New record for all of them. The result for the period was SEK 850 million, corresponding to SEK 2.76 per share. EPRA NRV has increased by 9% to SEK 99.66 per share, adjusted for paid dividend. A comparison of the rental income H1 2025 and H1 2026. Indexation, SEK +22 million. Acquisition, SEK +59 million. Currency effect, SEK -16 million. Additional charges, SEK +26 million. Not at least, completed project, new leases, and renegotiation, SEK +91 million, which means that our investments and activities pays off. The net letting positive with SEK +5 million. Lower activity on both new leases and terminations than a year ago, but most important, much better activity now than in the beginning of the year. Positive signals for the fall, but as usual, no promises ahead.

Speaker #4: New record for all of them. The result for the period was SEK 850 million, corresponding to SEK 2.76 per share, and EPRA NRV has increased by 9% to SEK 99.66 per share, adjusted for paid dividend.

Speaker #4: A comparison of the rental income first half 25 and first half 26. Indexation plus 22 million, acquisition plus 59 million, currency effect minus 16, additional charges plus 26, and not at least, completed project new leases and renegotiation plus 91 million, which means that our investments and activities pays off.

Speaker #4: And the net letting was positive with SEK 5 million. There was lower activity on both new leases and terminations than a year ago, but most importantly, much better activity now than at the beginning of the year.

Speaker #4: So, positive signals for the fall, but as usual, no promises ahead. The number of discussions is higher, and the volume of possible new areas per tenant has also increased.

Ulrika Hallengren: The number of discussions is higher, and the volume of possible new areas per tenant has also increased. Now we also see signs of tenants who decreased their areas a few years ago. They are coming back and ask for additional areas. An upgrade that we like. To comment on something that happens on other markets, the large Ericsson agreements in Stockholm, which I see as a clear sign that the trend we have seen among smaller tenants for quite a long time also is in line with how larger companies make their decisions. Location, yes, attractiveness for the employees matters. Design. All the projects in Hagastaden have in common that they focus on human needs. What about time? The leases signed clearly that Ericsson thinks that they will need office spaces also in 20 years' time.

Speaker #4: Now, we also see signs of tenants who decreased their areas a few years ago—they're coming back and asking for additional areas. An upgrade that we like.

Speaker #4: And to comment on something that happens in other markets, the large Ericsson agreements in Stockholm, which I see as a clear sign that the trend we have seen among smaller tenants for quite a long time is also in line with how larger companies make their decisions.

Speaker #4: Location: yes, attractiveness for the employees matters. Design: all the projects in Hagastaden have in common that they focus on human needs. And what about time?

Speaker #4: The leases signed clearly show that Ericsson thinks they will need office spaces also in 20 years’ time. And all of us understand that the Ericsson employees will do totally different things in 20 years, but they still think that they will have people working in common areas.

Ulrika Hallengren: All of us understand that the Ericsson employees will do totally different things in 20 years, but they still think that they will have people working in common areas. Something about the price. Yes, they are willing to pay. It will be very interesting to see where this trend continues. Here are some of the tenants that we have signed new leases with during Q2. The defense industry continues to be interesting with the lease with Weibel Scientific at Sortemosevej for the full property, and the MedTech sector are represented by Cantargia. Here we have the net letting in a historical perspective. Lettings in green, terminations in light blue, and dark blue stacks are the net letting.

Speaker #4: And something about the price—yes, they're willing to pay. It will be very interesting to see where this trend continues. Here are some other tenants that we have signed new leases with during Q2.

Speaker #4: The defense industry continues to be interesting, with the lease with Weber Scientific at Saltemossevej for the full property. The MedTech sector is represented by Kantargia.

Speaker #4: Here we have the net letting in a historical perspective: lettings in green, terminations in light blue, and the dark blue stacks are the net letting.

Speaker #4: We know that we have attractive products to offer, and when the market grows—which I will come back to—we will be a part of that growth.

Ulrika Hallengren: We know that we have attractive products to offer. When the market grows, which I will come back to, we will be a part of that growth on both the Swedish and Danish side of Øresund. The list of 10 largest tenants in alphabetic order, strong customers, and they contribute with 90% of our rental income. Seven out of 10 are governmental tenants, and the public sector contributes with 22% of rental income. Rental value as of 1 July 2026 is SEK 5 billion, 167 million per year, +7.4%, and rental income, SEK 4 billion, 562 million, +6%. Strong figures. This is an effect from acquisitions, indexation, but not at least new project and tenant willing to pay for the right quality. Looking for like-for-like figures, all the properties we own a year ago, excluding projects, compared with updated figures.

Speaker #4: On both the Swedish and Danish side of Öresund. And the list of 10 largest tenants in alphabetical order—strong customers—and they contribute with 90% of rental income.

Speaker #4: Seven out of ten are governmental tenants, and the public sector contributes 22% of rental income. Rental value as of July 1st, 2026, is SEK 5,167 million per year, up 7.4%. Rental income is SEK 4,562 million, up 6%.

Speaker #4: Strong figures, and this is an effect from acquisitions, indexation, but not least new projects and tenants willing to pay for the right quality.

Speaker #4: Looking for like-for-like figures, all the properties we owned a year ago, excluding projects, compared with updated figures, we can see that rental value is up 2.6% and rental income is up 1.5%.

Ulrika Hallengren: We can see that rental value is up 2.6%, and rental income is up 1.5%. Better than indexation of 0.9%, and still with a high vacancy. That means that rents continue up. Changes in the market value of our properties. We started the year with SEK 64 billion, 440 million. In accordance with the external valuation of 100% of our portfolio. We made acquisition, which adds on SEK 534 million. Investment, SEK 1 billion, 42 million. Divestment, SEK -4. Changes in valuation SEK +28, and together with currency translations of SEK 212 million. That is summarized to a value of SEK 66 billion, 226 million. Valuation parameters are without changes since year-end, included assumed indexation of 1%. Very small changes in valuations. The growth comes mainly from investments and the transaction we made in Copenhagen.

Speaker #4: Better than an indexation of 0.9, and still with a high vacancy—that means that rents continue up. Changes in the market value of properties.

Speaker #4: We started the year with SEK 64,440 million, in accordance with the external valuation of 100% of our portfolio. We made acquisitions, which add SEK 534 million; investments, SEK 1,042 million; divestments, minus SEK 4 million; changes in valuation, plus SEK 28 million; and, together with currency and translation effects of SEK 212 million, that summarizes to a value of SEK 66,226 million.

Speaker #4: Valuation parameters are unchanged since year-end, including an assumed indexation of 1%. So, there are very small changes in valuations; the growth comes mainly from investments and the transaction we made in Copenhagen.

Speaker #4: Here's the long-term trend for portfolio growth from SEK 7 billion to SEK 66.2 billion in 21 years' time, with growth every year. These figures, the running yield, show how we actually perform in relation to the valuation.

Ulrika Hallengren: Here is the long-term trend for portfolio growth from SEK 7 billion to SEK 66.2 billion in 21 years' time, and growth every year. These figures, the running yield, show how we actually perform in relation to the valuation, so not the valuation yield. Some of the projects, Bläckhornet 1 in Malmö and Posthornet in Lund have moved from project line to the running portfolio. Even if they're not fully completed and occupied, that is the main reason for occupancy dropping 1 percentage point to 89%, excluding project and land. With an operating surplus of SEK 3 billion, 389 million, that gives a running yield of 5.4%. Fully let, the portfolio would give a running yield of 6.3%. In the office portfolio, the market value is SEK 53 billion, 241 million with an occupancy rate of 89%. 88 in Malmö, 90 in Helsingborg, 88 in Lund, and 91 in Copenhagen.

Speaker #4: So, not the valuation yield—some of the projects, Blackhornet One in Malmö and Posthornet in Lund, have moved from the project line to the running portfolio. So, even if they're not fully completed and occupied, that's the main reason for occupancy dropping 1 percentage point to 89%, excluding project and land.

Speaker #4: With an operating surplus of SEK 3.389 billion, that gives a running yield of 5.4%. Fully let, the portfolio would give a running yield of 6.3%.

Speaker #4: In the office portfolio, the market value is SEK 53,241 million, with an occupancy rate of 89%—88% in Malmö, 90% in Helsingborg, 88% in Lund, and 91% in Copenhagen.

Speaker #4: The operating surplus from offices totaled SEK 2.809 billion, with a running yield of 5.3%, or 6.1% if fully let. As mentioned, the occupancy in Malmö and Lund is affected by moving the projects Blackhornet and Posthornet from the project line to the running portfolio.

Ulrika Hallengren: The operating surplus from offices summarized to SEK 2,809 million and a running yield of 5.3%, 6.1% fully let. As mentioned, the occupancy in Malmö and Lund are affected by moving the projects Bläckhornet and Posthornet from project line to the running portfolio. In Helsingborg, the occupancy has strengthened. Most of all, the ongoing discussion in the office market have improved. The logistic production portfolio have a value of SEK 9,378 million, 92% occupancy in Malmö, 82% in Helsingborg, 96% in Lund, and 99% in Copenhagen. In all, 87% occupancy with a running yield of 6.2%, 7.3% fully let. The development of total portfolio's running yield, 5.4%, still brings stability, not least since the portfolio overall has a high quality and good locations.

Speaker #4: In Helsingborg, occupancy has strengthened, and most importantly, the ongoing discussions in the office market have improved. The logistics portfolio has a value of SEK 9.378 billion, with 92% occupancy in Malmö, 82% in Helsingborg, 96% in Lund, and 99% in Copenhagen.

Speaker #4: In all, 87% occupancy with a running yield of 6.2%, and 7.3% when fully let. The development of the total portfolio's running yield, at 5.4%, still brings stability—not least since the portfolio overall has high quality and good locations. This is an increase in the running yield since '21, but the vacancy has a negative impact, and we will aim to turn that around in line with improvements in the market.

Ulrika Hallengren: An increase of the running yield since 2021. The vacancy has a negative impact, and we aim to turn that around in line with improvements of the market. What about the market? In the last report from Öresundsinstitutet, we can once again remind us of Malmö as the driving city of employment growth in the Öresund region. Malmö in yellow, Stockholm as the ruled gray line, also interesting to see the pickup in Lund the last years, the green line. We can also see that the number of unemployed decreases quicker from a higher level, though, the number of newly started companies is also higher than elsewhere. As usual, it is most important to be in the right places. Almost all of the development in Skåne is in the western part.

Speaker #4: So, what about the market? In the last report from Öresundsinstitutet, we can once again remind ourselves of Malmö as the driving city of employment growth in the Öresund region.

Speaker #4: Malmö in yellow, Stockholm as the ruled gray line, and also interesting to see the pickup in Lund in the last years, the green line. We can also see that the number of unemployed decreases quicker from a higher level, though, and the number of newly started companies is also higher than elsewhere.

Speaker #4: As usual, it's most important to be in the right places. Almost all of the development in Skåne is in the western part, so Lund, Malmö, Landskrona, and Helsingborg continue to be the places to invest for us in Sweden.

Ulrika Hallengren: Lund, Malmö, Landskrona, and Helsingborg continue to be the places to invest for us in Sweden. On the Danish side, we note the record-high GDP growth for Q1 of 6.2% compared to the same quarter last year. It is also worth mentioning that the infrastructure investments could continue with, for example, these three completed projects: Køge Nord Station, a new bridge across Storstrømmen, and now four tracks with new platforms pass through Copenhagen Airport. A catalog of our value and properties in our four cities and Q2 2026. 39% of the value is in Malmö, 22% in Helsingborg, 17% in Lund, and 22% in Copenhagen. The region continues to attract attention from investments, for example, Saab and SAS. It will continue to be positive for the region, for Wihlborgs, and for Sweden. Some sustainability highlights.

Speaker #4: On the Danish side, we note the record-high GDP growth for the first quarter of 6.2%, compared to the same quarter last year. It's also worth mentioning that infrastructure investments continue with, for example, these three completed projects.

Speaker #4: Kyrgyzstation, a new bridge across Storströmmen, and now four tracks with new platforms pass through Copenhagen Airport. A catalogue of our value and properties in our four cities, and Q2 2026.

Speaker #4: Thirty-nine percent of the value is in Malmö, 22 percent in Helsingborg, 17 percent in Lund, and 22 percent in Copenhagen. The region continues to attract attention from investments—for example, Saab and SAS. It will continue to be positive for the region, for Wihlborgs, and for Sweden.

Speaker #4: Some sustainability highlights: we continue to improve our figures and have also received some international sustainability recognition—for example, being one of three Swedish property companies on Time's list of the world's most sustainable companies.

Ulrika Hallengren: We continue to improve our figures, have also got some international sustainability recognition, for example, being one of three Swedish property companies on TIME's list of world's most sustainable companies, which also includes business models and financial performance. We also got the approval for our updated Science-Based Targets. Some figures showing improvement here. Maybe I am most proud of the figure for low climate impact from our latest completed projects. 202 kilograms per square meter carbon dioxide equivalence. Really low levels from successful projects, more on that topic in report. Time for finances. Over to you, Arvid.

Speaker #4: This also includes business models and financial performance. We also received approval for our updated size-based target, along with some figures showing improvement. Perhaps what I’m most proud of is the low climate impact from our latest completed projects: 202 kilograms per square meter of carbon dioxide equivalents.

Speaker #4: Really low levels from successful projects, but more on that topic in the report. And now, time for financials—over to you, Arvid.

Speaker #2: Thank you very much, Ulrika. If we look at the income statement for the second quarter in isolation, we had rental income of 1 billion 174 million. That's up 7%, corresponding to a 77 million increase compared to the second quarter 2025.

Arvid Liepe: Thank you very much, Ulrika. If we look at the income statement for Q2 isolated, we had rental income of SEK 1,174 million. That is up 7%, corresponding to SEK 77 million increase on Q2 2025. I think it's important to highlight also that out of the increase of 77, 57 actually comes from renegotiations, new leases, and projects. That is the core business showing growth, which is positive. The operating surplus amounted to SEK 864 million, up 6%, representing a surplus ratio of 74%. The income from property management amounted to SEK 556 million, up 6%, and that includes transaction costs of about SEK 5 million stemming from the acquisition from Castellum, which Ulrika talked about earlier. Both rental income, operating surplus, and income from property management actually show record levels historically for Wihlborgs, which also, of course, is very satisfying.

Speaker #2: I think it's important to highlight also that, out of the increase of 77, 57 actually comes from renegotiations, new leases, and projects. So that is the core business showing growth, which is positive.

Speaker #2: The operating surplus amounted to 864 million, up 6%, representing a surplus ratio of 74%. The income from property management amounted to 556 million, also up 6%, and that includes transaction costs of about 5 million stemming from the acquisition from Castellum, which Ulrika talked about earlier.

Speaker #2: But rental income, operating surplus, and income from property management actually show record levels historically for Wihlborgs, which also, of course, is very satisfying.

Speaker #2: We had positive value changes in the quarter of plus SEK 10 million—so very small, but still on the positive side. There were negative value changes of the derivatives, but all in all, a profit for the period of SEK 301 million.

Arvid Liepe: We had positive value changes in the quarter of SEK +10 million, so very small, but still on the positive side. Negative value changes of the derivatives, but all in all, a profit for the period of SEK 301 million. Looking at the balance sheet, investment properties amounted to SEK 66.2 billion, up SEK 3.5 billion versus 12 months previously. Equity amounted to SEK 24.2 billion, up SEK 1.2 billion, and loans or borrowings amounted to SEK 35.7 billion, up SEK 2.4 billion versus 12 months previously. On the next slide, we can see how that translates into key figures. The equity ratio now stands at 35.4%. Leverage is at 53.9. Worth noting that the dividend that we paid in Q2 affects the LTV by approximately one and a half percentage points. The interest cover ratio stands at 2.9 times.

Speaker #2: Looking at the balance sheet, investment properties amounted to SEK 66.2 billion, up SEK 3.5 billion versus 12 months previously. Equity amounted to SEK 24.2 billion, up SEK 1.2 billion.

Speaker #2: And loans or borrowings amounted to SEK 35.7 billion, up SEK 2.4 billion versus 12 months previously. On the next slide, we can see how that translates into key figures.

Speaker #2: The equity ratio now stands at 35.4%. Leverage is at 53.9%. It’s worth noting that the dividend we paid in Q2 affects the LTV by approximately 1.5 percentage points.

Speaker #2: And the interest cover ratio stands at 2.9 times. With these ratios, we had a strong enough balance sheet to finance the acquisition from Casellum with debt, without exceeding the limits that we've set for ourselves for certain key metrics.

Arvid Liepe: We had with these ratios a strong enough balance sheet to finance the acquisition Bronkstallen with debt, without exceeding the limits that we've set for ourselves for certain key metrics or key ratios. Over time, leverage shall be brought down. How and when remains to be seen, but we will continue to act in the best interest of both the company and our shareholders, of course. Looking at the EPRA NRV, that stands at SEK 99.66 per share, up 9% versus 12 months previously, adjusted for paid dividend. On the next slide, you can see the historic development of EPRA NRV over this long time period since 2009. We can actually still show an average growth of 15% on a yearly basis, adjusted for paid dividends. On the next slide, you can see our key financial ratios in the long-term perspective. The graph starts year end 2011.

Speaker #2: Or key ratios. Over time, leverage shall be brought down. How and when remains to be seen, but we will continue to act in the best interests of both the company and our shareholders, of course.

Speaker #2: Looking at the EPRA NRV, that stands at 99.66 kronor per share, up 9% versus 12 months previously, adjusted for paid dividend. On the next slide, you can see the historical development of EPRA NRV.

Speaker #2: Over this long time period, since 2009, we can actually still show an average growth of 15% on a yearly basis, adjusted for paid dividends.

Speaker #2: On the next slide, you can see our key financial ratios from a long-term perspective. The graph starts at year-end 2011. Equity ratio is well above the 30% threshold that we set for ourselves; LTV, still before the acquisition of course, is well below the 60% threshold.

Arvid Liepe: Equity ratio well above the 30% threshold that we set for ourselves. LTV still before the acquisition, of course, well below the 60% threshold. I think it's also worthwhile noting that although the interest cover ratio has varied a lot over this period, 2.9 times is a strong ratio, and I think it's also worth remembering that in 2022, 2023, when interest rates went up sharply, we still had a low point of the interest cover ratio of 2.5 times, which I think is still at a very healthy level. Looking at the next slide, you can see the historic developments of the net debt to EBITDA, which now stands at 10.7 times, a level where we're quite comfortable. Looking at our sources of financing as of end June, we have increased the portion of bond financing slightly over the quarter, now representing 20% of our borrowings.

Speaker #2: I think it's also worthwhile noting that although the interest cover ratio has varied a lot over this period, 2.9 times is a strong ratio. I think it's also worth remembering that in 2022 and 2023, when interest rates went up sharply, we still had a low point for the interest cover ratio of 2.5 times, which I think is still a very healthy level.

Speaker #2: Looking at the next slide, you can see the historic developments of the net debt to EBITDA, which now stands at 10.7 times.

Speaker #2: A level where we're quite comfortable. Looking at our sources of financing, as of end June, we have increased the portion of bond financing slightly over the quarter.

Speaker #2: Now representing 20% of our borrowings. About a third comes from the Danish real mortgage system, and a bit less than half of the borrowings from bilateral bank agreements.

Arvid Liepe: About a third comes from the Danish realkredit mortgage system and a bit less than half of the borrowings from bilateral bank agreements. I think it's worthwhile repeating that the access to capital on attractive terms is still good, both from the banking system and from the bond market. Look at the structure of our loan portfolio. You can see the details on this slide. The average interest rate, excluding cost for credit agreements, is 3.25%. It's a very small change over the quarter. The average fixed interest period is now 2.5 years, and the average loan maturity is 4.9 years. On the next slide, you can see the development over a five-year period of the fixed interest period and loan maturities, it's no drama in those two graphs, I would claim. On the next slide, you can see our available funds.

Speaker #2: And I think it's worthwhile repeating that access to capital on attractive terms is still good, both from the banking system and from the bond market.

Speaker #2: Look at the structure of our loan portfolio. You can see the details on this slide. The average interest rate, excluding the cost for credit agreements, is 3.25%. This is a very small change over the quarter.

Speaker #2: The average fixed interest period is now 2.5 years, and the average loan maturity is 4.9 years. On the next slide, you can see the development, over a five-year period, of the fixed interest period and the loan maturities.

Speaker #2: And it's no drama in those two graphs, I would claim. And on the next slide, you can see our available funds. That is unutilized credit facilities as of end June, plus liquid funds.

Arvid Liepe: That is unutilized credit facilities as of end June, plus liquid funds. We now have access to a bit over SEK 4 billion in unutilized facilities as of end June. That also, of course, is a good starting point for the H2 of the year. With that, I hand the word back to you, Ulrika.

Speaker #2: And we now have access to a bit over SEK 4 billion in unutilized facilities as of the end of June. And that also, of course, is a good starting point for the second half of the year.

Speaker #2: And with that, I hand the word back to you, Ulrika.

Speaker #1: Thank you. And an update on our investments in progress, and a quick overview of one of our newest projects and one of our largest projects.

Ulrika Hallengren: Thank you. An update on our investment in progress and a quick overview of one of our newest project and one our largest project. During the period, we have invested SEK 1,042 million, and it remains SEK 1,608 million to invest in approved projects. We continue to expect 6% or a bit above 6% yield on cost for new build offices and 7% or a bit above for industrial. It's a good mix of refurbishments and new build in the portfolio. This time, just a short list of projects. You can see more on that topic and investment possibilities in the last report from April. We have a new project at Värtat One for a company in the automotive tech industry, just beside the project we have completed for Arm. We invest SEK 82 million and get 7.4% yield on cost, including value of the property, and 13% yield excluding value of property.

Speaker #1: During the period, we have invested SEK 1.042 billion, and there remains SEK 1.688 billion to invest in approved projects. We continue to expect a 6% or a bit above 6% yield on cost for new-build offices.

Speaker #1: And 7 or a bit above for industrial. It's a good mix of refurbishment and new build in the portfolio. This time, just a short list of projects—you can see more on that topic and investment possibilities in the last report from April.

Speaker #1: We have a new project at Vätet 1 for a company in the automotive tech industry, just beside the project we have completed for ARM.

Speaker #1: We invest 82 million and get 7.4% yield on cost, including value of the property. And 13% yield excluding value of the property. Completion in Q1 2027.

Ulrika Hallengren: Completion in Q1 2027. The large project at Amphitrite in Malmö for Malmö University is running well, in accordance with the plan. A bit about 20,000 square meters, 100% pre-let to Malmö University in a 10-year lease. Investment, SEK 1,130 million, and completion is planned to late Q4 2027. Discussion continues regarding a possible prolonging of the lease to 20 years. With that, we summarize the quarter again, a number of new records. Rental income up 7%, operating surplus plus 6%, Income from property management plus 6%, net letting positive, most important is the list of ongoing discussion is good and more positive levels ahead. Also worth mentioning again, that the rent levels continue to develop, especially in the Swedish side.

Speaker #1: And the large project at Amfitrita 1 in Malmö for Malmö University is running well and in accordance with the plan. A bit above 20,000 square meters, 100% pre-let to Malmö University on a 10-year lease, investment SEK 1,130 million, and completion is planned for late Q4 2027.

Speaker #1: Discussion continues regarding a possible prolonging of the lease to 20 years. And with that, we summarize the quarter again: a number of new records—rental income up 7%, operating surplus up 6%, income from property management up 6%, and net letting is positive. But most important, it's a list of ongoing discussions, which is good.

Speaker #1: And more positive levels ahead. Also, worth mentioning again that the rent levels continue to develop, especially on the Swedish side. Net debt to EBITDA is at 10.7 times.

Ulrika Hallengren: Net debt-to-EBITDA at 10.7 times, we continue to focus on our earnings in the daily business, even if we from time to time also make good deals for future growth of our cash flow. With that, we are open for questions.

Speaker #1: And we continue to focus on our earnings in the daily business, even if we, from time to time, also make good deals for future growth of our cash flow.

Speaker #1: And with that, we are open for questions.

Speaker #3: If you wish to ask a question, please dial pound key 5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key 6 on your telephone keypad.

Operator 3: If you wish to ask a question, please dial #5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial #6 on your telephone keypad.

Operator: If you wish to ask a question, please dial #5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial #6 on your telephone keypad.

Speaker #2: Good morning, and thank you for the presentation. I have a couple of questions, starting with the $13 billion acquisition. First, the initial yield is 5%.

[Analyst 1]: Good morning, and thank you for the presentation. I have a couple of questions, starting off with the SEK 13 billion acquisition. First, the initial yield is 5%. Where do you see that yield going over the next two to three years?

Speaker #2: Where do you see that yield going over the next two to three years?

Speaker #1: Our goal is, of course, to improve that in several ways. So I think it's a good platform to start with, but of course, we shall improve that.

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

Speaker #1: But I have no numbers on exactly how quickly we can make changes. But it's a good platform for the start.

Speaker #2: Okay, thank you. And when it comes to the vacancy rate in the portfolio of 15%, do you have a view on what is the likely normalized vacancy rate over time for that portfolio?

[Analyst 1]: Okay, thank you. When it comes to the vacancy rate in the portfolio of 15%, do you have a view what is the likely normalized vacancy rate over time for that portfolio?

Speaker #1: I think that's the same level as the market, around 7–8%, in a better market than today. But around that level.

Ulrika Hallengren: I think that's the same level as the market, around 7% to 8% in a better market than today. Around that level.

Speaker #2: Okay. And then on LTV, on the ambition to reduce your LTV to 55% over the next two years, can you also comment potentially on reducing LTV via divestment?

[Analyst 1]: Okay. On LTV, on the ambition to reduce your LTV to 55% over the next two years, and you also comment potentially on reducing LTV via divestment. Can you give some flavor on what kind of assets you would be willing to sell if it fully developed certain geographies, pocket segments, et cetera?

Speaker #2: Can you give some flavor on what kind of assets you would be willing to sell, if they're fully developed—certain geographies, pocket segments, et cetera?

Speaker #1: I think we have several possibilities in that, and what would come first has not been decided yet. First, we wait for the Konkurrensverket to make their approval.

Ulrika Hallengren: I think we have several possibilities in that. What would come first has not been decided yet. First, we wait for the Konkurrensverket to make their improvements, and then we can take action after that. We have possibilities in both different geographical areas and different segments, of course. We think it's good that we have several possibilities.

Speaker #1: And then we can take action after that. But we have possibilities in both different geographical areas and different segments, of course, so it's good.

Speaker #1: We think it's good that we have several possibilities.

Speaker #2: Okay, I see. And what is your view on dividend distribution, considering that LTV comes up quite close to your policy?

[Analyst 1]: Okay, I see. What is your view on dividend distribution, considering that LTV comes up quite close to your policy?

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

Speaker #4: We will, of course, take that decision in February, in connection with the full-year report for 2026. And I think, I mean, our dividend policy so far has always been to distribute approximately 50% of the income from property management, but applying full tax on the income from property management.

Speaker #4: We will, of course, look at both the cash flow generation capacity, the future outlook, and what the valuations actually are at year-end before taking such a decision.

Speaker #2: Okay, thank you. And a final question from me: based on the occupancy raised on the signed leases and terminations that you know about today.

[Analyst 1]: Okay, thank you. A final question from me, and that is based on the occupancy rate on the signed leases and terminations that you know about today. Do you expect the occupancy rate to improve or deteriorate over the next two quarters?

Speaker #2: Do you expect the occupancy rate to improve or deteriorate over the next two quarters?

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

Speaker #1: I think that we should expect it to be quite flat in the shorter perspective, and improved during 2027. Yeah.

Speaker #2: Okay, yeah. All right, thank you. Those were my questions.

[Analyst 1]: Okay. Yeah. All right. Thank you. Those were my questions.

Speaker #5: Good morning. Just some follow-up questions on the acquisition. So, as it stands today, all things considered, what is your view on the best way to manage the balance sheet going forward?

[Analyst 2]: Good morning. Just some follow-up questions on the acquisition. Just as it stands today, all things considered, what is your view on the best way to manage the balance sheet going forward?

Speaker #4: Well, the best way to manage the balance sheet is to work, as we always do, very hard on improving our cash flow and our earnings.

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

Speaker #4: That's, of course, the starting point. Then we have, of course, a number of tools and a toolbox, as we've stated and, as you'll recall, already talked about also, when it comes to possible divestments.

Speaker #4: And other capital structure measures, which could, of course, be taken if the time is right and the market is right.

Speaker #5: And you mentioned.

[Analyst 2]: You mentioned.

Speaker #4: But I think sorry.

Arvid Liepe: But I think the Sorry?

Speaker #5: Yes, and you mentioned the portfolio composition. Have you sort of identified any share of the portfolio or a specific segment or something like this that you would consider divesting?

[Analyst 2]: Yes. You mentioned the portfolio composition. Have you sort of identified any share of the portfolio or a specific segment or something like this that you would consider divesting?

Speaker #1: We have several possibilities with products and areas that are interesting in the market today. But no decision has been made on that yet. Still, it's good to have different kinds of possibilities.

Ulrika Hallengren: We have several possibilities with products and areas that are interesting at the market today. No decision is made in that. It's good to have different kind of possibilities.

Speaker #5: Yeah, good. And then just on central admin costs in the quarter—so, roughly SEK 5 million is related to transactions and M&A. And then for the remaining increase, what should we expect on an annual basis going forward?

[Analyst 2]: Yep. Good. Just on central admin costs in the quarter. Roughly SEK 5 million is related to transactions, M&A. The remaining increase, what should we expect on an annual basis going forward?

Speaker #1: You should expect it to be a bit higher than before. We have slightly higher costs related to IT and regulatory requirements and, of course, increased technical demands.

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

Speaker #1: But not any higher expenses than we see now.

Speaker #5: Okay. And then maybe one final question on the acquisition. I understand you initially have some bridge financing. Could you comment on the initial terms and the structure you expect more long-term?

[Analyst 2]: Okay. Maybe one final question on the acquisition. I understand you initially have some bridge financing. Could you comment on sort of the initial terms and the structure you expect more long term?

Arvid Liepe: I won't comment in details on the exact terms of the bridge financing, we've secured bridge financing for the full amount within 18 months term. We have basically 18 months to put in place a long-term financing, which can, of course, take different forms.

Speaker #4: I won't comment in detail on the exact terms of the bridge financing, but we've secured bridge financing for the full amount, with an 18-month term.

Speaker #4: So, we have basically 18 months to put in place a long-term financing, which can, of course, take different forms.

Speaker #5: Okay, thank you. That's all from me.

[Analyst 2]: Okay. Thank you. That's all from me.

Speaker #2: Good morning. Can you hear me?

[Analyst 3]: Good morning. Can you hear me, Ulrika and Arvid?

Speaker #4: Yes.

Arvid Liepe: Yes, sir.

Ulrika Hallengren: Yes.

Arvid Liepe: Yes, sir.

Speaker #2: Oh, okay. Thank you. I didn't get a notification, so I didn't know that it was my turn. My apologies. I just want to follow up on the acquisition.

[Analyst 3]: Okay. Thank you. I didn't get a notification, so I didn't know that it was my turn. My apologies. I just want to follow up on the acquisition. You mentioned that you believe that this portfolio yields about the same as Wihlborgs today. If I look at what you're yielding in, at least in Sweden, it seems to be a bit above 5%, whereas this portfolio is around 5%. Obviously, there's differences in occupancy. When you state that it's about the same in terms of yield, how do you come up with that? Could you sort of give us a little bit more information as to how you view this portfolio versus your own?

Speaker #2: You mentioned that you believe this portfolio yields about the same as Wihlborgs today, but if I look at what you're yielding—at least in Sweden—it seems to be a bit above 5%, whereas this portfolio is around 5%.

Speaker #2: Obviously, there are differences in occupancy, but when you state that it's about the same in terms of yield, how do you come up with that?

Speaker #2: Could you sort of give us a little bit more information as to how you view this portfolio versus your own?

Speaker #1: The 5% on the portfolio that we, in the acquisition, is—the 5% is including all admin costs as well, and that is in line with the Swedish portfolio.

Ulrika Hallengren: The 5% on the portfolio in the acquisition, the 5% is including all admin costs as well. That is in line with the Swedish portfolio.

Speaker #2: Okay, so you think—okay, so it's including admin, and that's the difference, basically, compared to what you usually report yourselves. Yeah, okay. All right, good.

[Analyst 3]: Okay, it's including admin, and that's the difference towards what you usually.

Ulrika Hallengren: Yeah

[Analyst 3]: report yourselves.

Arvid Liepe: Right.

[Analyst 3]: Yeah, okay.

Ulrika Hallengren: Yeah.

[Analyst 3]: All right, good. Regarding potential divestments, you mentioned that you need to wait, obviously from the Swedish Competition Board, in order to finalize the acquisition. Could you consider doing divestments before year-end that are not related to that from the existing portfolio?

Speaker #2: And then, regarding potential divestments, you mentioned that you need to wait, obviously, for the Swedish Competition Board in order to sort of finalize the acquisition. But could you consider doing divestments before year-end that are not related to that—from the existing portfolio?

Speaker #4: I mean, we always look at the structure of the portfolio, and so, I mean, it's part of the day-to-day work to both look at acquisitions and divestments and try, over time, to optimize the composition of our total portfolio.

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

Speaker #4: So, that cannot be ruled out.

Speaker #2: Okay, so basically, the way that we should look at it is that your efforts to lower LTV over time—obviously, a large part of that will be operational—but in terms of divestments, you could make divestments before year-end, for example, in order to achieve this, even before you’ve completed the transaction.

[Analyst 3]: Basically the way that we should look at it is that your efforts to lower LTV over time, obviously, it's going to be a large part of that operational, but in terms of divestments, you could make divestments before year-end, for example, in order to achieve this even before you've completed the transaction.

Speaker #1: Absolutely possible.

Ulrika Hallengren: Absolutely possible.

Speaker #2: All right, thank you. And then again, on these assets, I assume that you know these assets quite well. It's been a competitor of yours for, I don't know, 20 years.

[Analyst 3]: Thank you. Then again on these assets, I assume that you know these assets quite well. It's been a competitor of you for, I don't know, 20 years. How do you feel the quality of these assets versus the ones you own now? Do you believe that this has been really strong competition versus your tenants, or do you feel that the competition in the market is such that this doesn't really move the needle? Do you think you get clearly a stronger hold on some of these areas, compared to what you have today?

Speaker #2: How do you feel the quality of these assets compares to the ones you own now? Do you believe that this has been really strong competition versus your tenants, or do you feel that the competition in the market is such that this doesn't really move the needle? Or do you think you clearly have a stronghold in some of these areas compared to what you have today?

Speaker #1: I would say that I think the quality is good—very much in line with what we have today. Modern offices, good location, and the area for industrial and logistics is a perfect match.

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

Speaker #1: So I think that on that side, it's very competitive. Maybe we have been—maybe Wihlborgs has been a bit more active in the market and thereby more successful in doing business.

Speaker #1: So, I think that is what we, first of all, will add on to this portfolio. And we also know that when we have many tenants that have changing needs, we can do this puzzle, moving tenants around.

Speaker #1: And with a larger volume of possibilities, a greater menu of different things that our tenants can choose from, the fit will be even better.

Speaker #1: And that is why we have been very successful in doing these things. So I think this will be great also for our tenants ahead.

Speaker #2: Okay. And could you say something about how much of the portfolio that you're acquiring is related to land or projects? In terms of size, you mentioned that there are project opportunities, but another way to phrase it is: how much is non-yielding, other than the vacancy in the buildings, in terms of the total portfolio today?

[Analyst 3]: Okay. Could you say something about how much of the portfolio that you're acquiring is related to land or projects, in terms of size? You mentioned that there are project opportunities, but in another phrasing is how much is non-yielding other than the vacancy in the buildings, in terms of the total portfolio today?

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

Speaker #1: The largest project possibility is the Q2 properties in Lund. That was on the map—in a very good location and with project possibilities. And then there are a number of other project possibilities, but more as additions to already existing buildings.

Speaker #2: And that's one larger ongoing project in Malmö.

[Analyst 3]: There's one larger ongoing project.

Ulrika Hallengren: Yes

[Analyst 3]: in Malmö.

Speaker #1: Correct. Logistic project with no tenants today.

Ulrika Hallengren: Correct. A logistic project with no tenants today.

Speaker #2: Okay. And in Lund, what's the size of that land bank in terms of the projects?

[Analyst 3]: Okay. In Lund, what's the size of that land bank in terms of the projects?

Speaker #1: Oh, I don't have the square meters on that, but roughly around 10,000 square meters, I would say.

Ulrika Hallengren: Oh, I don't have the square meters on that. Roughly around 10,000 square meters, I would say.

Speaker #2: Okay. Oh, that's fine. That's fine. My final question is regarding your comments on the activity in the market and net letting. You stated that you've witnessed increased activity in general from tenants.

[Analyst 3]: Okay. No, that's fine. My final question is regarding your comments on sort of the activity in the market and net letting. You're stating that you've witnessed increased activity in general from tenants, and obviously, that could be a positive, but I guess it could be a negative as well. In terms of your net letting for the rest of the year, by stating that you see increased activity, does that mean that you expect net letting to be positive as well? Is it sort of a positive trend, or do you run the risk of tenants actually terminating to a larger extent as well?

Speaker #2: And obviously, that could be a positive, but I guess it could be a negative as well. So, in terms of your net letting for the rest of the year, by stating that you see increased activity, does that mean that you expect net letting to be positive as well?

Speaker #2: Is it sort of a positive trend, or do you run the risk of tenants actually terminating to a larger extent as well?

Speaker #1: I would say that the number of larger leases that we thought were possible terminations, that we have seen in the last years—where the volume has been quite high on moving around and having new needs—I think that has slowed down.

Ulrika Hallengren: I would say that the number of larger leases that we thought were possible terminations on that we have seen the last years, where the volume has been quite high on moving around and having new needs. I think that has slowed down. What we see now on higher activity is definitely new leases. The volume is much better ahead. Also, let's remember that the start of the year was very poor. Now the list of ongoing discussions are much better, both in Sweden and Denmark. I'm actually quite positive ahead for signing new leases. You never know ahead where the market is going. Definitely more activity and really good discussions.

Speaker #1: So what we see now in higher activity is definitely new leases. The volume is much better ahead, but also, let's remember that the start of the year was very poor.

Speaker #1: But now, the list of ongoing discussions is much better, both in Sweden and Denmark. So I’m actually quite positive going forward for signing new leases.

Speaker #1: But you never know ahead where the market is going. But definitely, there is more activity and really good discussions.

Speaker #2: Okay, thank you. Those were my questions.

[Analyst 3]: Okay. Thank you. Those were my questions.

Speaker #3: Thank you. As a reminder, if you wish to ask a question, please dial the pound key and 5 on your telephone keypad. There are no more questions at this time, so I will hand the conference back to the speakers for any written questions and closing comments.

Operator 3: Thank you. As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. There are no more questions at this time, I hand the conference back to the speakers for any written questions and closing comments.

Operator: Thank you. As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. There are no more questions at this time, I hand the conference back to the speakers for any written questions and closing comments.

Arvid Liepe: There are no questions coming in via the email function.

Speaker #4: There are no questions coming in via the email function.

Speaker #1: Okay, so by that, thank you for today. You're always welcome to come back with questions. And, yeah.

Ulrika Hallengren: By that, thank you for today and you're always welcome to come back with questions.

Speaker #4: Wish you all a nice summer.

Arvid Liepe: Wish you all a nice summer.

Speaker #1: Absolutely.

Ulrika Hallengren: Absolutely.

Arvid Liepe: Okay.

Ulrika Hallengren: Bye.

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