Welcome to this live quarterly report presentation for the first quarter of 2025 with real estate company Atrium Ljungberg. Presenters today are CEO Annika Ånäs and CFO Anna Jepson. Please go ahead with the presentation, Annika.
Thank you very much. The headline for this report is "Stable Performance and Strong Financial Position in an Unpredictable World." I would like to begin by summarizing the main content of this report. Overall, it's a quarter in line with our own expectations as well as the market expectations. Our net letting amounted to positive SEK 23 million in the first quarter. I will come back to this in more detail later. Our profit from property management decreased by 12%. The biggest effect is that we last year sold properties to strengthen our balance sheet and that our interest rates have increased. The operating surplus in the like-for-like portfolio increased by 2%. The property value increased by SEK 179 million or 0.3%. The change consists of increased cash flows as we have not adjusted the yield requirements during the quarter. The property value was SEK 59 billion in the end of the quarter.
We have ongoing projects with an investment of SEK 9.5 billion, of which SEK 6.1 billion remains to be invested. During the first quarter, we invested SEK 600 million in our own properties. Our focus is primarily Stockholm, with 80% of the property value. If we look at the portfolio composition, it consists of 66% of the value of offices and 20% retail. Vacancy was 9%, and our LTV was 42%. Some comments on the market. The uncertainty in the world naturally affects everything and everyone. Companies find it difficult to plan and make investment decisions under current conditions. Consumption started relatively well in January but slowed down in February as households also became cautious in uncertain times, which of course also affects the residential market. We also see that few transactions have been made in the real estate transaction market.
There is a lot of talk about vacancies increasing in Stockholm. That's true. What is talked about less is why. Statistics show that 44,000 office jobs have disappeared in Stockholm since 2022, which corresponds to a drop of 7%. This is the same trend as we saw during the IT crisis, where the decline was also 7%, and the 1990s crisis, where the decline was as much as 12%. The important thing is that we also see the recovery is very fast when it's going when it gets going and lands in a growth. We started selling our first residential project in Wood during the first quarter. Interest has been high, and we have booked 24% of the apartments in the project. Finally, the deal with Stockholm University of the Arts was completed, our largest deal to date.
The agreement covers a total of 20,400 sq m, a 20-year agreement. The leasing fits perfectly with the vision of the area. We have now landed two agreements in Mälarterrassen in Slussen, Urban Italian Group, which will develop a Spanish concept. Additionally, restaurant actor who runs Boqueria and other well-known restaurants in Stockholm is creating a destination that will become a hub for a unique experience of Swedish food and drink. Other examples of leases include Sustera, which has signed an agreement in Hammarby Sjöstad, and Immedica Pharma, which has expanded its space in Life City in Hagastaden. During the quarter, we had two major terminations, including Convendum, which has moved out of Slussen, 5,000 sq m, and H&M, which has terminated its office space in Liljeholmen of 7,900 sq m. The agreement runs until the end of July in 2026, so the termination came earlier than we expected.
A reminder regarding our tenants. We have a well-diversified contract portfolio where our 10 largest customers account for 21% of the contract value. Of this 21%, 9% of contract value is from state and municipalities. The average contract period was 4.9 years. Offices are our largest source of revenue with 53%. Consumer durables, our second largest share, account for 15% of the total revenue. If we look at our maturity structure for our leases, we now see that termination, we hardly have any revenue impact on 2025. 37% have their maturity from 2030 onwards. I think it's good that we only have five leases, of which two are offices of more than 10,000 sq ft. Overall, we have over 2,000 contracts excluding parking. An update on our biggest customer, Ericsson. Their lease is under negotiation, and I think we have a good dialogue.
We have extended their possible termination until middle of May to be able to finish the last things, but nothing is, of course, settled until it's settled. Let's take a closer look at our retail portfolio. We have a wide range in our retail portfolio. Fashion accounts for 10% in sales in our retail locations. I think we have a very attractive retail portfolio. As I mentioned in the beginning, we had a good start in the beginning of the year, but the uncertainty in the world pushed the consumers to be cautious in February. Food, alcohol, and pharmacies account for 44% of the turnover at our retail locations. With that, I hand over to our CFO, Anna.
Thank you, Annika. We begin 2025 with a stable first quarter in line with our expectations. Rental income amounted to SEK 735 million, a decrease of 3% compared to the same quarter last year. However, like-for-like rental income increased by 3%. The overall decrease is mainly due to disposal of properties and a reduction in non-recurring payments of SEK 6 million to SEK 4 million. The letting rate decreased from 92% to 91% due to Convendum moving out. The operating surplus amounted to SEK 519 million, which is also an increase in like-for-like, but a total decrease due to the disposals. I will return to the effect of these disposals later. The net interest increased by 15% to minus SEK 153 million due to maturing fixed-rate loans and expiring interest rate swaps being replaced with new ones at higher levels in the second half of 2024.
The average interest rate in the portfolio rose by 50 basis points in the second half of 2024, but remained unchanged in the quarter. Overall, this means that the profit from property management decreased by 12% to SEK 328 million. Changes in value of properties were positive, amounting to SEK 179 million, and the yield requirements remained unchanged at 4.7%. Rather, the value change is due to increased cash flows in valuations, thanks to the adjustment of the index assumption for 2025 from 1% to 1.5%, in line with what our evaluators do. Additionally, project profits of SEK 20 million have been reported in our project Palatset, which will be completed in Q4. Earnings per share increased by 12% to 3.59 before the stock split. Looking at like-for-like, rental income increased by 3.2% and the operating surplus by 2.2%.
The increase is mainly due to index, which landed at 1.6% for the year. The increase is also attributable to the general property taxation in 2025, which means both increased costs for property tax and increased income in the form of supplements. Costs for property tax increased more than the income, leading the operating surplus increasing less than rental income and the operating surplus margin decreasing. If we adjust for the change in property tax, the increase in both rental income and operating surplus is 2.5%, and the operating surplus margin remains unchanged at 72%. Looking at the different segments, our largest segment, offices, is performing strongly. Retail increased its operating surplus slightly thanks to lower customer losses and snow removal costs. In the second quarter of 2024, we sold two properties in Sundbyberg to free up capital for investments in our project portfolio.
These properties had rental income of SEK 32 million and an operating surplus of SEK 24 million in Q1 2024. Hence, the disposal of these properties is the reason for the decrease in the operating surplus in Q1 2025. The property value increased by just over SEK 700 million to SEK 59.1 billion as a result of investments of SEK 626 million in our project portfolio and changes in value of SEK 179 million. We have also had residential buyers move into their new apartments, hence a figure on the sales line in the table. We have 11 ongoing projects with a total investment of SEK 9.5 billion, with SEK 6.1 billion remaining to invest. Annika will return to this later. Interest-bearing debt increased by just over SEK 5 million due to our investments in the projects and paid dividends.
Looking at financial key figures, the interest coverage ratio has decreased from 3.7 to 3.5, and the debt ratio has risen from 11.5 to 11.8, and the loan-to-value ratio has increased from 41.4% to 41.8%. The key figures have weakened slightly, mainly due to the higher average interest rate and higher interest-bearing debt. However, we still have a strong financial position with a low loan-to-value ratio and a high interest coverage ratio. Net asset value per share has increased by 1% to SEK 270 per share before the stock split. Volatility in the financial markets was high throughout Q1, and despite this, access to financing on favorable terms has been good, both in banks and in the capital market throughout the quarter. In April, we have seen big movements in the financial markets in the wake of ongoing trade wars.
In this context, we are pleased that we have stuck to our cautious financing strategy, which means that we have a very stable financing situation today. We have good access to liquidity with undrawn credit facilities of SEK 9 billion, which exceeds the maturities of the next two years by a good margin. We have a good maturity structure in our debt portfolio, and we have good relationships with the big Nordic banks. Additionally, in Q1, we issued green bonds of SEK 2.5 billion, of which SEK 2.3 billion in a large transaction in March. In connection with this, we repurchased bonds of SEK 1.9 billion, which means that we have already refinanced the majority of the 2025 maturities. The issue was also done on very good terms, three years at 95 basis points and five years at 130 basis points.
The average interest rate in the portfolio is unchanged in the quarter at 2.9%, excluding commitment fees. The maturities of fixed-rate loans and interest rate swaps we have during the year all occur in Q2. The average interest rate will move up just about 3% based on today's interest rates. To summarize, we have a stable financing situation and a strong balance sheet, and we deliver a result in the first quarter in line with expectations. With that, I hand the floor back to Annika.
Let me update you on our project portfolio. At the end of Q1, we had ongoing construction with a total investment of SEK 9.5 billion, where SEK 8.5 billion contributes to investment in properties that are developed for ownership. In this picture, you can see our 11 ongoing projects and completion dates. The big upcoming effect from project completions will be in the second half of 2026. A little over a year ago, Atrium Ljungberg signed a lease agreement with Stockholm University of the Arts in the Meatpacking District, conditional on a completed detailed plan. Now the detailed plan for the block has gained legal force. It is clear that the university will move to the Meatpacking District later. Construction is planned to start in spring of 2026. The lease agreement, with a term of 20 years, covered just over 20,000 sq m of lettable area.
In addition, nearly 6,000 sq m of external office space will be created at the top floor of the building and the restaurant on the ground floor. The new block has a total rentable area of just over 27,000 sq m, with an annual value of approximately SEK 134 million, excluding additions, but including estimating indexing until occupancy. After completed leases, the property economic occupation rate amounts to nearly 71%. The project is expected to be fully completed in 2030, and the investment is estimated for just over SEK 2 billion. Finally, a few words about our project portfolio going forward. We will develop four areas in Stockholm where there is a natural growth of people. The potential investment with project startup before 2032 is SEK 40 billion. All locations are selected where there is a metro station today or will exist by 2030.
In Sickla, the plan is to add 250,000 sq m with a total investment of SEK 13 billion. In the Meatpacking District, we are also planning for investments of nearly 200,000 sq m, which gives us a total investment of SEK 13 billion. Hagastaden and Slussen, part of Stockholm's inner city, where we have projects of more than 130,000 sq m, the total investment is more than SEK 10 billion. That was all for this report. In conclusion, we can state that it has been a stable quarter in line with our expectations. I would like to thank you very much for listening. If you have any questions, you can send an email to me or Anna. Thank you very much.