Earnings Call: Q1 2019

Apr 24, 2019

Thank you. Thank you, everyone. Welcome to the Q1 report plan from Casella. I will start with shortly going through the report. So if we can just take the next slide, please. We can summarize that this quarter has been a very active one for Castellan. We have done a portfolio shift and started new businesses in 2 working. What we have done, we have done it by actually then buying United Spaces, the co working company with 20 years of experience in the Nordics. We have sold out, shipped out of Sonnsfeld and with that left the northern part of the portfolio in one deal. So that's now done then. Then we bought ourselves into 50% of that volume into Linkoping at more than actually the same deal, approximately 5%. We also strengthened our position in the CBD of Gothenburg by buying an asset from almost SEK 1,000,000,000 next door to our best located assets. And the last part, we sold our retail, the big retail part of Uppsala, and with that have no more malls. And with that also lowered our exposure to retail. That means that we invested in new services like space or co working, whatever they want, and we continue to develop our brand. We moved the portfolio to more growth and lowered the retail exposure and everything is going according to capital. If we look at the markets, we can then conclude that the rental markets are now more normal than it was in the last year, so it's absolutely 2018. But there are lack of space and that still creates opportunities for us as a developer. And we have today a stronger development portfolio than ever. And I can tell you there is more to come. If you get to next slide, please. Both activity and the market can be seen in our results, of course, historically as well as during the last quarter. We're showing this quarter a strong one with a 9% growth of income from property management. That is built up by a rental income increase. If you look at like for like, it's almost now 5%, and the vacancies are still dropping. But the growth was also affected by the fact that we was also net seller this quarter and would have, without selling, absolutely reached our objective of 10% growth on the cash flow side. If you look at the increases of property values, our portfolio value increased during the period approximately 1%, due primarily by lowering the required yields in the market and the logistic portfolio was standing for the absolute majority of that value change. This contributed so that the EPR now increased by 16% up to 178 per ounce a share. And even though we paid out the dividend during this period, And this affected the LTV level that is now on 45% and that we have a total net income for the period of SEK 1 point 4,000,000,000 or if we want to SEK 4.9 a share. And with that, I think we should go through the results more in a little bit more in detail. So I So now let's go to the next slide, the income statement. The Q1 this year showed an increase in income from property management with 9 percent, and that is made up by renegotiations that was made and with the IRS, which has increased the rental value. We have lowered the vacancies. We have had a mild Q1 that has kept, you could say, the OpEx in control despite high unit prices for electricity and lower timing costs. There is two lines that shows a little bit higher cut this Q1 compared to last year, that is maintenance and administration. For both of them, I would say that this year's pace is more normal than the last year's pace. We also showed a value uplift of roughly 1.1%, which was mainly due to yield movements in the logistic portfolio. However, we showed some realized value changes due to selling tonsil and leading retail of COVID-nineteen, which means that the net figure is 0.8. And this negative figure from selling is, however, offset from a P and L account perspective since we also had a positive deferred tax income of roughly SEK 500,000,000 due to selling those assets. But the selling of SunTrust has also resulted in depreciation of goodwill of roughly 179,000,000 and that goodwill was connected to buying our North Porton in 2016 and the deferred taxes that followed. We have had a negative change in derivatives due to lower market interest rates and finally, positive tax of roughly SEK 226,000,000 of which SEK33,000,000 is paid taxes. The last one can be explained mainly by that the tax losses carried towards that we still have in the group are locked in the former North Porton and are not available for the whole group. Worth mentioning in this Q3 results are that there is new accounting rules in place. And for Castellum, that means that the ground rents that were had as well as leases in the acquired co working companies in the United States is must be valued and put in the balance sheet both on the asset side and the liability side. And the cost on the ground rent going forward will be looked at by financial costs and not earlier as a profit cost. We have not made any adjustments of restructuring in the case of regulation rather complex. So we will apply this going forward. And however, if we go to the NOI on the next slide, please, we can see that, that was increased by €39,000,000 and the growth in like for like continues to be very strong with the contribution of €48,000,000 On top of that, our development contributed with €31,000,000 and the transaction since YMS study contributed negative with €9,000,000 this quarter. And top of that, we had a new co working company that contributed with SEK 1,000,000 this quarter and then the increase of the administration compared to 1 year ago. So if we go to the next slide and talk about the rental market and Castello's rental income, I will go to the next slide again, please. So if we start with the history, the rental market has, as I said, been very good the last year, and that, together with the hard work made by the organization in our listing and renegotiation, is the reason for the like for like growth of 4.8%, apart from the CPI that is roughly 2%. But if you split that growth in different parts, you can see that 4.9 percent is from increased rental level, 0.3% from lower vacancies and the same is below intensive given by the group. And however, we do have a negative impact that we had income from early termination leases last year that we don't have this year. And another value creating part is development pipeline and the projects. So if we add that, the total growth is 6.6%. And taking into account the transaction, we ended 6%. So that is the Castellum result. So if you go into the rental market, Henrik, on the next slide. Yes. If you look at this, it's now we're talking offices. We can conclude that there are more or less no big changes. It's a stable market because it's still a good demand and but it's still a limited supply of office furnaces. So in the Q1 2019, the average rents compared with the INTR, Stockholm, Gothenburg were stable and have increased in average with 5% from the last year. If you look at the regional cities, the group in the off the events was also generally stable or somewhat increasing. So as I said from the beginning, we are in more a normal rental market at this position, and there is still record low vacancy rates in all of our markets. So that's conclude us to see that it's a stable to positive market. And we can go to the next slide, please. Then the net leasing. Now we're back in Castello figures again. The net leasing is weaker than it was 1 a year ago. But profit gross leasing in the existing portfolio was almost the same level as it was last year. But we have seen larger contracts given notice of moving, and the leasing of the developments are weaker than last year. So this is not, you can say, boring, though the potential vacancies are attractive and the development also in the market that generally is still in the lack of space. But we are, of course, affected that we have less space to rent out than we had 1 year ago. To this, we must add, as we've done earlier, that we have signed contracts with the Swedish courts, with national courts, and we have also a new contract with E. ON that is not in these numbers. These are 2 agreements with net leasing that's up approximately EUR 150,000,000 in grand family rental value. We can take the next one. If you look at the regions, you can conclude that it's no leading star and actually no bearing market either. And the regional cities or central, as we signed here, continue to deliver like in 2018 a little bit better than the rest of the region. We can also conclude in this quarter that Stockholm and Arizona was standing for the drop, but we can also see that this was this is not reflecting the market situation. It's more depending on special contracts that are giving notice for moving than anything else in this moment. Okay, we can take the next slide, please. And then if we look into the interest rates, regarding the average interest rate, it's still around 2% and the duration is 2.9 years. We are, at the moment, rather comfortable with the duration and to be in an interval of, I would say, 2.5 to 3 years since our general view is that the interest rate in near term still will be on lower levels. And we have to have in mind also that higher LIBOR, which increases the interest rate cost for CP and floating left, is compensated by lower total cost for the derivatives as a whole. So if you go to the next slide, please, and then we have another cost item, that is the taxes. As you are well aware of the January 1 this year, the new tax legislation around interest rate debitability restriction was applied, and that means that our tax calculation has been changed. So this Q1, we estimate approximately €27,000,000 of our interest rate will not be deductible. That can be changed and this is dependent on where our tax losses are located, the capitalization of each unit within the group and how changes in derivatives goes. Since negative changes will be treated as interest rate cost and positive one as a possibility to get more deductibility, so to say. And the peer taxes, as I said, even if we do have a lot of tax losses going forward, they cannot be used in all the group so far. So if we leave that and go to the property market on the next slide, please, We'll talk about the market, but start first with the balance sheet. So if we turn the page to the balance sheet, I would say that we have still a strong balance sheet with an LTV of 45%, a valuation yield of 5.1%. And this balance sheet gives a NAV of SEK 128 per share. And that in 1 year's time indicates a growth of 60% compared to the year 1%. And then we have to have in mind that we have given dividends during this time to our shareholders. And for the next slide, looking to the portfolio and the valuation. As you know, we focus on office, public sector and logistic warehouses, and we're in Chicago stands for 86% of the portfolio from a valuation point of view. And like Industry and Retail, that is a smaller part of the business, have decreased since Q4, and the last one is driven mainly by selling retail assets in the Q1. If you look, the valuation yield has gone down from some asset classes such as office and public properties. It is mainly yield driven regarding ticket location, land leases and changes in the portfolio with selling and buying offices. For logistics, it is yield driven due to transactions made in the market. And for the retail part, it is due to selling assets with higher yields? So if we can sell them and go to the property market on the next slide. Yes. And Enrique and Klune can talk a little bit. We have seen that it's still a great demand in the investor market. If you go to the CBDs of Stockholm, Gothenburg, HealthInfo and Copenhagen, you can see that we have at least the stable yields or a little bit push still downward on the yields. Properties with secure cash flow, such as public sector and compounded properties portfolios, has generated a very high attractivity from the investor side. So we can also see that more everything is possible to sell in the Nordic market. We have also seen that in submarkets outside the metropolitan areas, that the yields of the offices have been stable in the Q1 of this 2019. If we take the next slide, please. Moving then to the logistics. Here, we can see that there has been a change on the yields, and it has been a very big demand from domestic and international investors, driven largely by the growth of e commerce. So the required investment yield is falling. Since the demand on the investor side is high and we are more or less going for European yields on this side, as you can see, it was attractive also in our balance sheet. The required yield in the Castello statistics, which I'm hoping was adjusted downwards then on this quarter. And we have seen deals down lower than 5% in large portfolios on 2 large portfolios down in this quarter. We then can take the next one, please. Then we're moving into the development side. As we stated from the beginning, we have a stronger development pipeline than they have had ever. We have projects approximately up to SEK 4,000,000,000 that is under production with SEK 1,600,000,000 that is still to come on that one. But we also know already know that we have ongoing larger projects that we expect to start with the next coming 2 years. That already stands for approximately SEK 8,000,000,000 In this volume, of course, we also have the large developments in Malmo, for example, that are already leased up to 100%. To this, we can add number of planned projects that will be started later. The estimate is that total of that could be approximately SEK 12,000,000,000 and including that is, of course, Serbia Airport and the one, Hagastar, that will come to on north part of Sibylia, Stockholm. We can take some examples on the next slide, please. Here we see a picture of Hagast Garden, the future Hagast Garden. It's the district of Stockholm. Castellum has stepped in as a partner in this construction of total 5 blocks. They contain both working cases and residentials. West Elm committed office of we will build approximately 30,000 square meters with an investment of approximately SEK 1,300,000,000. This will start, of course, later than 2 years from now because of the construction that are undergoing there with the highway. Hagerstarden is on the way to become in a city district with a focus of light science and are planned for 2025 to be holding, fully completed, approximately 50,000 workplaces and 6,000 clients. And we can take another investment going to the next slide, please. Then United States, what will happen now? We are, right now, continue to develop our new company, United States. We are convinced that this acquisition will gain in tempo and that Castello will increase both profitability and growth opportunities for existing operations. The most important part, however, is the possibility synergies. Now Castello, of 1000 of business consumers, both small and large, can be immediately offered a flexible and cost efficient office and meeting space already in Stockholm, Gothenburg, Malmo and now in coming days also at the Arnanda Airport. And I promise you, this is just the beginning. Can we go to the next slide, please? Then we'll have the last market, and that is the funding market or the credit market. So if we go to the next slide. As I used to say, Castello likes flexibility. We want to have many tools in the toolbox in order to match the property portfolio's needs for money and at the same time have some sort of independence here. Therefore, we are active in 3 markets: the banks, the bond market and the CP market. Regarding banks, Castellum experienced good access to funding within the Nordic Bank. However, we did a big overview and renegotiated most of our bank funding last year and prolongs the SEK 2,400,000,000 in the beginning of this year. So at the moment, we have no big need. However, we have slightly note that the credit margins at bank margins at the moment is stable, that they may be higher in the future, and that is due to that the increased margin in the bond market can spillover on the banks. And third, we have got signals that the banks expect to get higher capital requirements for lending to the real estate sector. So our main scenario is therefore that maybe bank funding will have somewhat increased margins going forward. However, we are still interested to increase our presence of volume in the bank market and have in March this year increased the train for our Swedish NTM program to SEK 20,000,000,000 from 2018. And on top of that, the Swedish bond market on top of the Swedish bond market, we can also issue bonds in other currencies if we will find the commercial terms attractive. And the margins in the bond market have gone down after another, you could say, big or major increase in the end of last year. However, it is still to be seen how long this trend or levels will continue. But in the short term, it looks rather positive. And today, if I should take an example at the moment, we pay roughly 10 basis points to 15 basis points more for a 5 gs bond today than we did 1 year ago. In the CP market, the margin of Kinstaba is not much higher for Castellum than earlier, but Kinstaba has increased after Rixbankers increased in the end of last year. And of what we can understand, the impact on the adjustment requirement for liquidity to Swedish banks, We now pay some higher margins for the CPL interest, but it's still a very cost efficient arbitrage to have. So if we go to the next slide, please, what have we done? We have, as I said earlier, prolonged EUR 2,400,000,000 in the bank. We have increased the Swedish MPM program. We have issued so far $1,600,000,000 and had also $1,000,000,000 Blackfell due to maturity. We have still EUR 2,300,000,000 that was due with different time frames this year. And as we experience right now, the possibility to do the refunding is very good. We have also more than half in our volume compared to 1 year ago in the CP market, and we calculate to be €2,000,000,000 to €5,000,000,000 in outstanding CPs this quarter. It is, like I said, still a very cost efficient market, And all our outstanding volume is fully backed up by unutilized bank facilities. I earlier said that we are comfortable with our interest rate duration, we instead have a very strong focus on prolonging our capital duration and in that way also secure the price of lending. And this is sometimes something that we prioritize. So we would like to get our average capital duration up to at least 3.5 years, and we can use NUK and Evro as we see it, but we also evaluate other alternatives. So with that said, we go to the next slide. Okay. So we are in 2019 looking into the future. In the short term, we will see a strong to stable rental market space. That is built up by that we still see an undersupplied office market. We have simply produced too little office space in Sweden. We have a stronger to stable rental market in Copenhagen, and we have a positive development in Helsinki. So from my standpoint, I see the rental income being stable in the market going forward. We are seeing still very large interest in the Nordic market from the investors. We can't see anything changing on that side. So for the next coming months, we expect that to continue. And we also think that will be stable to attractive deals on that one going forward. We also know that we will have access, as a weak asset, to finance it. That gives us opportunities, of course, if that's needed. We will, that said, of course, continue to create shareholder value by achieving growth in income from property management during 2019. And on top of that, we know that we are having a very strong position now on new developments as well as the existing portfolio going forward and would like to continue to develop our new business. So with that said, I conclude this and leave And our first question comes from the line of Tobias Cargi from OTE. Please go ahead. Your line is now open. Yes, good morning and thank you. I would like to start to ask you regarding the net lease and the relatively big terminations in Stockholm and in the areas and regions. Is it some specific tenant that explains the figures? And can you give some more information also about when those tenants are moving out? Yes. We have some large tenants that we're moving exactly like saying in actually in Copenhagen and in Stockholm, if you take the 2 biggest ones that will be out. They will leave in 9 months in one case and 12 months in that one case. They are due to totally different effects. One is a government tenant in Stockholm that want to now move out of CBD areas because of pricing. That will, of course, not be any problem to result. The other one is because of a merge in the company again with 2 international companies that move in the next 2nd quarter. That will not either be a problem with leasing out the SBCL. But of course, we will have a back time and investments in there. I think though that, of course, but the majority is, of course, normal turnover in the leasing portfolio that are that we will see in the future. This is just the time lag that we are experiencing right now in the existing portfolio. And the most important part for us is that the gross net gross leasing in the existing portfolio is more or less the same volume that we had 1 year ago. Ago. Anything about the start in Q2 and your backlog for Q2, whether you expect to catch up in that lease for this quarter? I'm sorry, we don't give prognosis in that respect. But that said is that, of course, we now increase our activity on the portfolios on the leasing out, but no. Okay. Regarding transactions, after your acquisition in Helsinki, at least I had the impression that you would like to continue to buy more and build up a larger portfolio, but we haven't really seen anything since that. Do you should we expect that you will find some acquisitions in Helsinki in near term? Or what's your view on that? I agree with you. Our view is that we shall expand in Helsinki. And as we always said, we are cautious buyers. We have also seen that it's very important to buy the right stock. And we haven't had the opportunity to do that yet. So we are not stressed. We have changed a little bit flat heated in Helsinki and have started our own office just with 1 person. But we will be definitely active in the Helsinki market going forward. And hopefully, we will be right, both of us, that we will have a portfolio coming at the moment. And can you indicate something about what kind of yields you want to be able to acquire at? We can't change the world. So we need to buy at market yields. That's one expect. But it's also important that what we buy, we move in now with our experience. So what I see in front of me is that reducing the existing teams when we do the acquisitions as well as knowledge from the asset management in Sweden and Denmark to use that knowledge when we buy and when we start to set up the teams. That means that we want to bring value in the portfolio that we're buying. So the deal is one question. It's another one what we can achieve in 2 to 3 years' time on the deal side. Okay. One final question regarding your paid tax. Should we expect that it will be at roughly the same level as a percent of your recurring income going forward? Or will it increase further? That is a good question, and it's a little bit €0.50 is due also to how the change in value of derivatives goes according to the new regulation. So I could say if you have the same trend or the same development rest of the year, then you could expect the same development or percent And the same development, does that mean the continued decline in derivatives or stable from this level? If you have even if the derivatives is not more negative, then it will be better. But if the derivatives will get more negative, so to say, more negative change in value, that means that, that will have an impact on paid taxes. But if it goes positive, that will have means that I will pay less the paid taxes also. So that is a connection. It's a more complex puzzle. So we will see the further we go down into this year and the more we can change the capitalization within each unit in the group, we will struggle to have low CapEx as we can, but this is the Q3. So it's an assessment based on how it looks like now. Okay. Thank you very much for taking my questions. Thank you. Our next question comes from the line of Andres Toomey from Queen Street Advisors. I just wanted to ask whether you can elaborate more on the office rental market. And more particular, is the comment about the weaker office rental market broadly applicable to all markets that Castellum is present? Or is it more of a specific city or submarket story? And additionally, if you look ahead, which markets or submarkets do you see as the weakest? And conversely, where do you see the best rent outlook on a relative basis? Yes. I will try to do this shortly. It's a very interesting question, and we could spend an hour on this one. But yes, you can see it like it's the first and most important part, as I see, is supply. What have you on the vacancy rate in the existing towns? And we have never been lower if you look at it generally. That's the first part. Then I should say it's a more general question all over Sweden looking at the tenants. And we can see that one part is for us that we can't supply. Some tenants then want to have growth with new spaces. At the same time, you also see that a lot of changes is done has been done, for example, by mergers that we are affected by. And the third part is that if you see that the government is, in this case, is both growing and restructuring their office portfolio. There's a lot of puzzles that's ongoing. But from the standpoint, from my standpoint, I'm generally or I am very calm in this because we have this undersupplied market on the off-site for the last 5 years. And in the last part, I mean, we know that the most volatile part in Sweden is the CBD of Stockholm. We are more or less not there. We have one portfolio in Stockholm. The rest of Sweden is a stable market historically. And so that also has I didn't have in mind going forward. Okay, very clear. Thank you. Thank you. Our next question comes from the line of Nicholas Hagelin from Nordea. Please go ahead. Your line is now open. Hello, Nicholas. Please go ahead with your question. Can you hear me? A couple of questions, if I may. If we come back and discuss the rental market again. I mean you are seeing a couple of contracts. You're losing some contracts right now, and you're talking in your annual report that you have a pretty big share of renegotiations ahead of you in 2019. Could you elaborate on the sort of potential here also with the contracts which you've seen in cancellations, I mean, what are the sort of delta in rental levels in the ongoing negotiations and the sort of magnitude in the portfolio? If I take the renegotiations and the I think this is too it maybe sounds strange, but it's 2 different things because the negotiations is still going very well. And we don't feel I mean, we still have a good headroom from existing rental levels up to existing market levels, so to say. So there is a lot of renegotiations that is being made. And so far, we have the same trend this quarter of the deals we have done, as we saw last year. So that is just slowing down. However, we don't see that the market level increases still so much as it's painted out. So in Limerick, we're having negative investments. We don't see any spilling over, so to say, on the negotiations that the group is doing. Can I have a follow-up on that? You're talking about one of the large tenants moving out in Stockholm is a government tenants that want to get their rate down for moving out of the CBD level? What kind of rental levels do you have today? And what did they not want to sort of pay when you try to renegotiate it? Yes. To start with, the normal case is that the tenants stay. We have to start there. They have to work with their efficiency per square meter and employees. There's also United States is coming in as a complement to start with. If you take this special case, they didn't want to pay approximately around 6,000 grams a square meter. They could find more efficient space just outside the CBD area. And that's of course because the Stockholm has large in kilometers per square meter price to change the schooling aspect. But this is extremely unusual for us. But I must say it's extremely unusual that we have this normal decision is from tenants to stay and work with efficiency. And here, we haven't done that. But to give you data that's the 6,000 is currently contracted with the dealer costs. And Henrik, what are they paying today? Were they coming from 4,000 then up to 6,000 or Yes. I think it was approximately so far So and then in new tenants, they have to pay SEK 7,000 or something like that then? No, no. I think you should you could look at the 6,000 as its objective over this space. But that's of course depending on what we're pushing into that space and what we have to invest. Right. That will come back to that, yes. Even if they're sitting there, we have to do some investment. And then I would like to move to external valuations. You mentioned very briefly in the report that it's very much aligned with external valuations, while the internal were slightly ahead of the external seen in the Q4. Could you share some numbers on sort of our valuators catching up to your numbers? Or do we still see this sort of discrepancy there? We said in the year end report and the year end call that we were ahead, you could say, the external value just on the or we were more positive towards the dip and more negative towards retails. And I think that the transactions that have been made in the market this Q3 shows that we are our belief was very strong. So if external values seem different now, I really don't know, but the market has shown that our statement was true. Okay. Fair enough. And then moving over to the credit portfolio. You're talking about increasing duration in the portfolio while it's actually or duration on the credit side. It's coming down a little bit in the Q1. So all else equal, what would be the cost of sort of reducing the refinancing risk coming up to the 3.5 year compared with current 3.2 percent? Or are we talking about below 10 basis points? Or what's your On a portfolio or on a single transaction on a level? No, on portfolio level. Yes. It's, of course, the timing question and which market you will accept or which tools because we're also evaluating the possibility to have long integration outside, so to say, the bond market or the capital market. But maybe 10 basis points on a portfolio level, that is maybe a good spot at the moment. And is the 3.5 year starting point? Or would you be comfortable with that though? I would be rather comfortable. But of course, I have talked about the refunding risk or the funding risk for a very long time. It seems the portfolio is bigger and bigger. And the price on lending is more expensive than the interest rate in itself. So I think this is an important question to address. And as I said last year, that was our main driver to address the euro bond market also. Okay. That's one, Christophe. Thank you very much. Thank you. Our next question comes from the line of Frederic Siron from Carnegie. Please go ahead. Your line is now open. Good morning. Three questions from my side. Starting off with going back to Finland. Now you have at least 2 boots on the ground and over there, ultimately today at 45 for the group. How much wiggle room do you have for acquisitions? And are you primarily looking at portfolios rather than single buildings? The headroom, I think you're referring to the balance sheet headroom. But we are going to be very cautious, of course, of the balance sheet on the FTE level going forward, to start with that. And I think that the most efficient way of growing the Helsinki portfolio is doing both. We need the portfolio because the government goes too slow to buying that asset by asset and to do some complete also complete that with some single digit, but absolutely need to do at least a small portfolio acquisition to get the volume up because otherwise, we're going to take too long time. So that's my view. Okay. And then moving over to value changes. Almost the entire change was driven by yield in this quarter. And considering the like for like effects, like for like was close to 5% in the Q1. I would have anticipated that you would have a larger contribution from cash flow. Is this an accrual effect? And we should expect more filtering through from like for like in the next couple of quarters? Yes. But the like for like growth in the income top line is made by leases signed and leases renegotiated and CPI known at the year end when we did the valuation. So we know we did know the cash flow at the year end valuation, so to say. Okay. But if you maintain this kind of level and are able to increase rents throughout the year, then I would expect that there would be more effects. Yes. I would say that if we do further renegotiation, now it's a time lag and it takes time, that it's true. And if we get more, you could say, cost of net lettings, then you should expect everything else equal, a valuation of this driven by cash flow. That's clear. And then my final question on project investments. We have gotten used to project investment level in the last 2 years of about SEK 2,800,000,000 to SEK 3,000,000,000 annually. In the report, you're stating that target is to increase that further. Should we expect that the level will be materially different from SEK 3,000,000,000 in the next couple of years? Yes. I should say you will have an effect, of course, that is calculated. That looks at the possibility that we think is possible in the Q4 or in the Q1, maybe in one of your time that you start to launch projects in Malmo, for example, that could be something that's going through and that will, of course, affect that investment pipeline. For that, we have the normal investments, we can call it, that will also increase. So yes, I should say look at that for more next year than 2019. But yes, they will slowly increase 2.40% going forward. Thank you, Luka and Henrik. And the best demand, higher margins and how that will have, which impact that we may be having in the coming 2 years for Castellan. And I would say that that I need to have to do a lot of speculation, and I don't think that is the best way. So I'll pass on that question. And we've got another question. What are your thoughts on entering Norway? And if that has been affected by new Norwegian tax laws? We have stated earlier that we would like to focus in the Nordics. That still is the same, and we want to be a Nordic player. We have also stated that we will focus on Health and Care first and need to be very interesting if we go for another city. And this is still the same. So focus Helsinki on the expansion outside Sweden right now. Is there any further questions? There are no questions registered over the phone lines at the moment. Should we then complete this? Yes. So thank you, everyone, for listening and have a nice weekend day. Thank you.