Welcome to this live broadcasted report presentation regarding the third quarter of 2025 with real estate company Atrium Ljungberg . Presenting is Annica Ånäs, CEO, and CFO Anna Jepson. Please go ahead with your presentation, Annica.
Yes, thank you very much. As a start, I would like to summarize a few things from this report. The headline for the report is "Our high-quality property portfolio delivers results." Our net letting amounted to SEK 3 million in the third quarter, but if we take into consideration also contracts canceled due to upcoming projects, the number is SEK 9 million. For the first nine months, it was SEK 16 million or SEK 23 million. Our net operating income, like-for-like, increased by 4.3%, which is a good number for the quarter, and 2.6% during the first nine months. Profit from property management decreased by 3.7% this quarter, and the biggest effects are that we last year sold some properties, but also that the interest rates have increased. A good part is that overall we see a very good cost control in the company.
We see unchanged yields in the market, but have increased changes in the value mainly due to project gains. Anna will talk about this more later. We have invested SEK 2.1 billion during the first nine months, and the property value adds up to SEK 61 billion at the end of the quarter. We have ongoing projects with an investment of SEK 9.8 billion, of which SEK 5.3 billion remains to be invested. We have completed one project, and we have a new decided one, so still 11 ongoing projects. If we look at the overall portfolio, it looks very similar to last quarter with 80% of the value in Stockholm, and that we have 64% of the portfolio as offices. The LTV is stable at 42%, and the occupancy rate is 90%. A few words about the market.
After a quite long period of uncertainty and waiting, we are actually now seeing signs of some stabilisation, and the confidence in the Swedish economy is beginning to return. The recovery is expected to pick up in 2026 after a prolonged recession, mainly driven then by the household consumption. The optimism is also based on interest rate cuts and large government spending boosts, factors that guarantee increased activity and the confidence in the future. This also improves the conditions for the companies, which is of course very important for our business. We also see that many companies cannot stay still any longer. They need to do some kind of change when it comes to their business, and that they need new space. They are actually looking for more functional and attractive environments also for their business. Given this background, I'm cautiously positive about the market development in the near future.
If we look at the tenant-owned housing market, it has been stable during the third quarter, but still characterized by some waiting. Activity has increased, but buyers are selective, and the price levels are being held back despite improved interest rates. Conditions from buyers are better than it has been for a long time. The new conditions market has had a clear restart after the summer, with projects with strong offers attracting the most customers. In our own project at Nobelberget, we see interest activity and greater determination among stakeholders, which is very gratifying, despite some concerns among consumers about their own sales. In the quarter, we can see that we have done some business, and the project sales are now 35%. In the quarter, we have done some important lettings. As I said, the net letting was SEK 3 million.
Haglöfs have signed a contract in Slakthusområdet, which means a new project start for us, and I will come back to this a bit later. Life City in Hagastaden continues to be a really attractive place for knowledge-intensive businesses. Here we have signed leases for a total of 1,700 square meters with Bristol-Myers Squibb and ProPharma. With these latest rentals, Life City is now fully let. Interest in office space in Slussen remains very strong. During the quarter, we welcomed new tenants such as MyNewsDesk and the law firm Kahn Pedersen, while several existing companies chose to grow with us. Among other things, Gullers Group and GeoGuessr have expanded their premises and extended their agreements. Sony Music Group also has a new lease with Music Studios in Katarinahuset.
This really confirms Slussen's attractiveness and the high demand, both for modern office solutions and for the vibrant urban environment that emerges here. In total, the new expanded agreements cover over 2,000 square meters. Another major lease during the quarter is the agreement of 1,100 square meters in Bas Barkaby in Järfälla. A lot of things have also happened in the restaurant side. Last spring, Mata teljén opened in Slakthusområdet. The restaurant has also signed an agreement for Ateljén's Pizza in the neighborhood. That is also the last premises in House 26 in Slakthushallarna. The new Södrah allarna will be inaugurated next autumn with several years of renovation and will house a market hall and restaurants in the new version, a cinema, as well as a newly renovated office and roof terrace.
At the end of September, we signed an agreement with the restaurateur behind Grand, a brand new destination for food and drink experiences with a focus of draft beer and international food. I think it's going to be a very good addition to this building. A reminder of our tenant portfolio: we have a well-diversified contract portfolio where our 10 largest customers account for 21% of the contract value. Of this 21%, 9% of the contract value is from state and municipalities. We have an average contract period of 4.8 years. Offices is our largest source of revenue with 53%, and Consumer Durables, our second largest, accounts for 20% of the total revenue. 44% of the total maturity is from 2030 and onwards. To take a quick look at our retail portfolio also, fashion accounts for 13% of the sales in our retail locations.
Food, alcohol, and pharmacies stand for 40% of the turnover in the retail locations. We see a positive trend when it comes to sales in our retail hubs. We think that we will see a start of the consumption to start to pick up in the beginning of 2026. That of course will have a positive effect in the retail segment as well. With that, I would like to hand over to Anna to talk about the figures for the quarter.
Thank you, Annica. Let's take a look at the numbers. We are very happy to report a strong result for the third quarter, the best quarter for us in 2025. Rental income in Q3 amounted to SEK 736 million, which is a decrease of 1% compared to Q3 in 2024. However, just like in Q1 and Q2, rental income in the like-for-like portfolio increased, which I will return to shortly. In 2024, we received larger non-recurring payments of SEK 18 million in Q3. This year, the figure is only SEK 1 million. This is a positive development as we prefer tenants to stay rather than pay one-off fees and move out early. Adjusted for these non-recurring items, rental income increased by 2%. The occupancy rate decreased by 1.8 percentage points to 89.7%, mainly due to IBM and Fujitsu, whose previously announced lease terminations took effect on September 30.
Property costs decreased by 5% in the quarter, reflecting strong cost control and targeted efforts to reduce expenses, particularly related to energy consumption. It's encouraging to see this reflected in both our sustainability metrics and our financial results. Overall, the operating surplus increased by 1% to SEK 550 million and by 4% when excluding non-recurring payments. The surplus margin rose in the quarter and now stands at 71.8% on a rolling 12-month basis. Looking at the period of January to September, the operating surplus is slightly down overall, which is entirely attributable to the sale of two properties in Sundbyberg in June 2024. In the like-for-like portfolio, however, we see an increase for the full period. Net financial items rose by 11%, and the average interest rate in Q3 remained stable at 3.2%, including commitment fees.
The increase in net interest expense is due to the adjustment to the current interest rate environment, which took place in the second half of 2024. Profit from property management in Q3 amounted to SEK 352 million. We also recorded positive value changes of SEK 79 million in the quarter, of which SEK 62 million relates to yield adjustments. The average yield remains unchanged at 4.7%, with minor adjustments for a few properties, primarily a large mixed-use property where we applied a more granular segmentation of yield requirements in the property. Cash flow was positive at SEK 84 million, despite a negative impact of just over SEK 100 million due to a downward adjustment of the index assumption for 2025 from 1.5% to 1%, in line with market practice. Commercial project gains amounted to SEK 57 million in Q3, bringing the year-to-date total to SEK 105 million.
Including gains from residential projects, the total reaches SEK 144 million. Earnings per share for the period were SEK 1.33. Q3 was our strongest quarter of the year. At the same time, we know that Q4 tends to be weaker with a higher cost base. In addition to that, the positive net letting seen during the year has been driven by project leasing, which will of course impact the occupancy rate in the short term. Looking at the like-for-like portfolio for the period, rental income increased by 2.2% and operating surplus by 2.6%. This growth is driven by indexation, increased charges for property tax and tenant improvements, as well as turnover-based rent for certain tenants, primarily in the office segment. What is particularly encouraging is that the operating surplus increased more than the rental income, meaning that revenues grew faster than costs. Total costs increased by just over 0.8%.
Within these figures, we see a positive impact from reduced customer losses of SEK 13 million and a negative impact from increased property tax costs of SEK 17 million, as 2025 is a property tax reassessment year. Adjusted for these items, costs remain flat, which reflects strong cost control and active efforts to optimize operations and reduce consumption and manage our properties efficiently. In the third quarter alone, costs decreased by 3.8%, resulting in a 4.3% increase in operating surplus. This is a figure that we are very pleased with. Looking at the different segments, both offices and retail showed an increase in operating surplus, and in both cases, the surplus grew faster than revenues, which is positive. However, the drivers differ. In the office segment, the increase is driven by higher revenues, with positive effects from indexation, additional charges, and turnover-based rent.
In the retail segment, the increase is driven by cost savings. We don't see the same effect from indexation as more contracts are turnover-based in the retail segment. Consumption has not yet picked up in 2025, as we know, but the conditions are in place, and we hope to see improvement toward year-end. On the cost side, we're seeing the impact not only of strong cost control, but also lower customer losses, which is also a very positive sign. In June last year, we sold two properties in Sundbyberg, and the purpose was to free up capital for investments in our project portfolio. Starting in Q3, these disposals no longer affect quarter-on-quarter comparisons, but they do impact the year-to-date figures. In the first half of 2024, the sold properties generated rental income of SEK 61 million and an operating surplus of SEK 47 million.
This is the reason for the decrease in operating surplus for the first period, Q1 to Q3. There is also a minor effect from newly acquired project properties, specifically Mälarterassen in Slussen and Kvarter Ångqvarn in Uppsala. Moving on to our financial position, the value of our property portfolio increased by approximately SEK 700 million in the quarter, reaching SEK 60.6 billion. This is the result of SEK 652 million in investments in our projects and SEK 79 million in value changes. So far this year, we have invested SEK 2.0 billion or SEK 2.1 billion, including acquisitions. We currently have 11 ongoing projects, and one project was completed and another started in Q3. The total investment volume is SEK 9.8 billion, of which SEK 5.3 billion remains to be invested. Seven of these 11 projects will be completed in 2025 and 2026.
Once fully let, these projects will generate rental income of approximately SEK 360 million. We're not yet there, but these will still be valuable additions to both rental income and operating surplus. Annica will return to this shortly. Interest-bearing debt increased by SEK 350 million in Q3 and by SEK 1.4 billion year-to-date, totaling SEK 25.7 billion in interest-bearing liabilities. This increase is solely to finance investments in our projects. We are investing at a pace that allows us to maintain stable financial key ratios at healthy levels. The loan-to-value ratio remained unchanged at 42%, which is a very good level for us. The interest coverage ratio on a rolling 12-month basis is 3.1. That's down 0.1 in the quarter. This remains a solid level, even though it has gradually declined during the year as we have adjusted to higher interest rates.
The debt ratio increased by 0.2 to 12.6 in the quarter. This relatively high figure is due to a combination of low-yielding properties and large project investments. Many of our projects are in late stages, which adds debt but not yet earnings. We expect the ratio to rise slightly before turning downward as our ongoing projects begin to generate rental income. Net asset value per share adjusted for dividends has increased by 5% during the year to SEK 55.21. On the financing side, we continue to have good access to funding on favorable terms, both from banks and the capital market. Credit spreads in the bond market tightened during the quarter. In September, we issued a five-year bond at 120 basis points, which is 10 basis points lower than earlier this year. Commercial paper is back at 40 basis points for a three-month tenor.
Our financing portfolio remains secure and stable. The average capital duration is 3.4 years with a well-balanced maturity profile for both bonds and bank loans. We only have SEK 300 million in bond maturities to refinance this year and a relatively limited volume next year as well. Available liquidity amounts to just under SEK 10 billion, primarily in the form of undrawn revolving credit facilities. We also have a secure position on the interest rate side. The average interest rate duration is 3.0 years, and 95% of our interest exposure is fixed through swaps or fixed-rate loans. The average interest rate in the portfolio is 3.0%, excluding commitment fees, and 3.2%, including them. That is unchanged in the quarter. In early September, we received the welcome news that Moody’s confirmed our Baa2 rating and upgraded our outlook from negative to stable.
They also lowered our ICR requirements from 3.0 to 2.5. What was particularly encouraging was that Moody’s raised their assessment of our asset quality from BAA to A. This is really a clear recognition of the quality of our property portfolio, a property portfolio that delivered strong results in the third quarter. With that, I will hand over to you, Annica, to continue with an update on transactions and projects.
Thank you, Anna. Yes, during the quarter, we signed an agreement to sell our development rights of co-ops in Hagastaden, the project quarter Stanford Ett. The purchase price is based on a total underlying property value of SEK 818 million. Before the transaction will take place, we will complete the underground garage. The property will be occupied in two stages, the first of which is in December 2026 and the second in August 2027. We are one of the largest property owners in Hagastaden, and our ambition is to contribute to the long-term development in the area, with a focus on the offices that we have in our portfolio. Given our extensive investment pipeline totaling more than SEK 40 billion, we have therefore chosen to step away from this specific residential project in favor of other investments that we believe will create greater value for the company.
The transaction is expected to be revenue-neutral for us. A few words about the completed project that we have in Sickla. It is Campus Sickla. It's a very fine project in many ways. One part is that it's the first completed project within our Stockholm Wood City. The project is both wood frame and wood facade. The students started after summer and have made the neighborhood full of life and activity. It's not the biggest project, but adds to our rental income of SEK 7 million. I'm very pleased to announce that Haglöfs has chosen Slakthusområdet for the new headquarter. It is a brand with a strong identity and high ambitions, exactly the kind of player that helps us shape the character of the area. Occupancy is planned for autumn 2026.
The premises will be located in building 48 in Lilla Marknadshallen, one of the area's original buildings with a unique industrial historical architecture, which is currently undergoing a careful renovation. In connection with the lease, we will start the project and have a total lettable area of approximately 1,950 square meters and an annual rental value of approximately SEK 10 million, excluding add-ons. The occupancy rate is now 72%. All in all, 11 ongoing projects with a total investment of almost SEK 10 billion, where SEK 5.6 million remains to be invested. We have seven projects that will be completed during the end of this year and during 2026. Given the current occupancy rate, we have secured annual rents of SEK 175 million, but of course, they will not have an effect directly during 2026 since it's depending on when the project is completed.
Sickla Central currently has an occupancy rate of 20%. The house has just opened with a house on the ground floor and a water house. It's really fantastic qualities with a panoramic view over Stockholm. After a successful campaign, we have had about 15- 20 viewings the recent week, and the response is very positive. The size of the space is aimed to attract small and medium-sized companies with a time horizon of six to nine months, which means that it's only now when there is actually an interest in line with our completion, which is expected to be in Q1 to Q2 next year. There's still a lot of interior work to be done before the customers can move in.
Just a quick reminder of the very big pipeline we have of projects, where we have a plan to invest SEK 40 billion in places in Stockholm where there is a subway today or will be one in the future. That's Sickla, Slakthusområdet, Hagastaden, and Slussen. That's all for this report. In conclusion, I can state that it has been a very strong quarter if you look in the like-for-like figures, which is very good. Thank you and goodbye. If you have any questions, you can email me or Anna, so we will respond for you as quickly as we can. Thank you very much.