Speakers, please begin.
Thank you. Thank you, everyone. Welcome to the Q1 report then from Castellum. I will start with shortly going through the report. If we can just take the next slide, please. We can summarize that this quarter has been a very active one for Castellum. We have done a portfolio shift and started new businesses in co-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, who have sold out shortly after Sundsvall, and with that, left the northern part of the portfolio in one deal. That's now done with them. Then we bought ourselves into 50% of that volume into Linköping at more or less the same yield, approximately 5%.
We also strengthened our position in the CBD of Gothenburg by buying an asset for almost SEK 1 billion next door to our best-located asset. 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 then invested in new services like space or co-working, whatever they want, and continue to develop our brand. We moved the portfolio to more growth and lowered the retail exposure, and everything is going according to plan. If we look at the markets, we can then conclude that the rental markets are now more normal than it has been the last years, it's absolutely 2018. There are lack of space, and that still creates opportunities for us as a developer.
We have today a stronger development portfolio than ever, and I can promise you there is more to come. If we get the next slide, please. Both the 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. 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 Castellum 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 absolutely majority of that value change. This contributed so that the EPRA NAV increased by 16% up to SEK 178 a share. Even though we paid out a dividend during this period, this affected the LTV level that is now on 45%. We have a total net income for the period of SEK 1.4 billion or if you want to, SEK 4.9 a share. With that, I think we should go through the results and look a little bit more in detail.
If we go to the next slide, the income statement. The first quarter this year shows an increase in income from property management with 9%, that is made up by the negotiations that was made and with the IFRS, which has increased the rental value. We have lowered the vacancies. We have had a mild first quarter that has kept, you could say, the OpEx in control despite high unit prices for electricity and heating and lower funding cost. There are 2 lines that show a little bit high cost this first quarter 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 movement in the logistic portfolio.
However, we show some realized value changes due to selling Sundsvall and leaving retail portfolio in Uppsala, which means that the net figure is 0.8. This negative figure from selling is however offset from an P&L account perspective, since we also had a positive tax income of roughly SEK a half billion due to selling those assets. The selling of Sundsvall has also resulted in depreciation of goodwill of roughly SEK 179 million, and that goodwill was connected to buying of Norrporten in 2016 and the deferred taxes that followed.
We have had a negative change in derivatives due to lower market interest rates, finally, a positive tax of roughly SEK 226 million, of which SEK 53 million is paid taxes. The last one can be explained mainly by that the tax losses carried forward that we still have in the group are locked in the former Nordbohusen and are not available for the whole group. Worth mentioning in this first quarter is also that there are new accounting rules in place, and for Castellum, that means that the ground rents that we have, as well as leases in the acquired co-working company United Spaces must be valued and put in the balance sheet, both on the asset side and liability side. The cost on the ground rent going forward will be looked at as a financial cost and not earlier as a profit cost.
We have not made any adjustments of retrospective cases. This regulation is rather complex. We will apply this going forward. If we go to the NOI on the next slide, please. We can see that was increased by SEK 39 million. The growth in like-for-like continues to be very strong, with a contribution of SEK 48 million. Our development contributed with SEK 21 million, and the transaction since [YMS Sellgren] contributed negative with SEK 9 million this first quarter. We have a new co-working company that contributed with SEK 1 million this quarter, and then the increase of the administration compared to one year ago. If we go to the next slide and talk about the rental market and Castellum's rental income. I will go to the next slide again, please.
If we start with the history, the rental market has, as Henrik said, been very good the last years, and that together with the hard work made by the organization in letting and renegotiation is the reason for the like-for-like growth of 4.8%, apart from the CPI that is roughly 2%. If you split that growth in different parts, you can see that 4.9% is from increased rental levels, 0.3% is from lower vacancies, and the same is for lower incentive given by the group. However, we do have a negative impact that due to that we had income from early termination leases last year that we don't have this year. Another value-creating part is development pipeline and the projects. If we add that, the total growth is 6.6%. Taking into account the transaction, we end at 6%. That is the Castellum result.
If we go into the rental market, Henrik, on the next slide.
Yes. If you look at this, 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, but it is still a limited supply of office premises. In the first quarter 2019, the average rent compared with 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 office rents was also generally stable or somewhat increasing. 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. That conclude us to see that it's a stable to positive market. We can go to the next slide, please. Then the net leasing.
We're back in Castellum figures again. The net leasing is weaker than it was one year ago, the gross leasing in the existing portfolio was almost the same level as it was last year. We have seen larger contract given notice for moving, and the leasing of the developments are weaker than last year. This is not because of [COVID]. The potential vacancies are attractive and the development also in the market that generally is still in the lack of space. We are, of course, affected that we have less space to rent out than we had one year ago. To this, we must add, as we 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 two agreements with net leasing that adds up approximately to SEK 150 million in current annual 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 bear market either. The regional EPIS, or Central, as we see here, it 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 Öresund was standing for the drop. We can also see that this is not reflecting the market situation. It's more depending on special contracts that are giving notice for moving than anything else at this moment. Okay, we can take the next slide, please.
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, 2.5-3 years, since our general view is that the interest rates in near time still will be on lower levels. We have to have in mind also that higher STIBOR, which increases the interest rate cost for CP and floating debt, is compensated by lower total cost for the derivatives as a whole. If you go to the next slide, please, we have another cost item, that is the taxes.
As you are well aware of, the 1st of January this year, the new tax legislation around interest rates deductibility restriction was applied, and that means that our tax calculation has been changed. This first quarter, we estimate approximately SEK 27 million of our interest will not be deductible. That can be changed, and it is dependent on where our tax losses are located, the capitalization of each unit within the group, and how changes in derivatives goes. Negative changes will be treated as interest rate cost and positive one as a possibility to get more deductibility, so to say. The paid taxes, as I said, even if we do have a lot of tax losses carried forward, they cannot be used in all the group so far. If we leave that and go to the property market on the next slide, please.
We'll talk about the market, but start first a little bit with the balance sheet. 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. This balance sheet gives an NAV of 178 SEK per share, and that in one year's time indicates a growth of 60% and compared to the year, 1%. We have to have in mind that we have given dividends during this time to our shareholders. If we on the next slide, look into the portfolio from the valuation. As you know, we focus on office, public sector, and logistics warehouses, and they together stand for 86% of the portfolio from a valuation point of view.
Light industry and retail, that is a smaller part of the business, has decreased since Q4, and the last one is driven mainly by selling retail assets the first quarter. If you look, the valuation yield has gone down. Some assets classes, such as office and public properties, it is mainly yield driven regarding city location, long leases, and changes in the portfolio with selling and buying offices. For logistics, it is need-driven due to transactions made in the market, and for the retail part, it is due to selling assets with high yield. If we leave Castellum and go to the property market on the next slide.
Yes. Ulrika can you come a little bit, we have seen that it is still a great demand in the investor market. If you go to the CBDs of Stockholm, Gothenburg, Helsinki, and Copenhagen, you can see that we have at least the stable yields or a little bit push still downwards on the yields. Properties with secure cash flow, such as public sector and combined properties portfolios, have generated a very high attractivity from the investor side. We can also see that more everything is possible to sell in the Nordic market. We have also seen that the sub-markets outside the metropolitan areas, that the yields of the offices have been stable in the first quarter this 2019. If we take the next slide, please. Moving down to the logistics.
Here we can see that there has been a change on the yields and has been a very big demand on domestic and international investors, driven largely by the growth of e-commerce. 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 also reflected also in our balance sheet. The required yield in the Castellum logistics tranches was adjusted downwards then on this quarter. We have seen deals done lower than 5% in large portfolios on two large portfolios done in this quarter. Ulrika, you can take the next one, please. We're moving into the development side. As we stated from the beginning, we have a stronger development pipeline than we have had ever.
Projects approximately up to SEK 4 billion that is under production with SEK 1.6 billion that is still to come on that one. We also already know that we have ongoing larger projects that we expect to start within next coming two years that already stands for approximately SEK 8 billion. In this volume, of course, we also have the large developments in Malmo, for example, that are already leased out 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 billion and including that is of course, Säve Airport and the one Hagastaden that we will come to on north part of Stockholm. We can take some examples on the next slide, please. Here we see a picture of Hagastaden, the future Hagastaden. It's a district of Stockholm.
Castellum has stepped in as a partner in this construction of total five blocks. They contain both working places and residentials. Castellum committed office of we will build approximately 30,000 sq m with an investment of approximately SEK 1.3 billion. This will start of course later than two years from now because of the construction that are undergoing there with the highway. Hagastaden is on the way to become inner city district with a focus of life science and are planned for 2025 to be holding fully completed approximately 50,000 working places and 6,000 lives. We can take another investment going to the next slide, please. United Spaces. What will happen now? We are right now continue to develop our new company, United Spaces. We are convinced that this acquisition will gain in tempo and that Castellum will increase both profitability and growth opportunities for existing operations.
The most important part, however, is the possibility synergies. Now Castellum have thousands 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 Arlanda Airport. I promise you, this is just the beginning. Can we go to the next slide, please?
We have the last market, and that is the funding market or the credit market. If we go to the next slide. As I used to say, Castellum likes flexibility. You 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 independency. Therefore, we are active in three markets, the banks, the bond market, and the CP market. Regarding banks, Castellum experiences good access to funding within the Nordic banks. However, we did a big overview and renegotiated most of our bank funding last year and prolonged SEK 2.4 billion in the beginning of this year. At the moment we have no big needs.
We have signals that the bank margins at the moment is stable, but that they may be higher in the future, and that is due to that the increased margin in the bond market can spill over on the banks. Third, we have got signals that the banks expect to get higher capital requirements for lending to the real estate sector. Our main scenario is therefore that maybe bank funding will have somewhat increased margins, going forward. We are still interested to increase our presence or volume in the bond market and have in March this year increased the frame for our Swedish MTN program to SEK 20 billion from SEK 18 billion. On top of the Swedish bond market, we can also issue bonds in other currencies if we find the commercial terms attractive.
The margins in the bond market have gone down after you could say big or major increase in the end of last year. It is still to be seen how long this trend of levels will continue. In the short term, it looks rather positive. Today, if I should take an example at the moment, we pay roughly 10 to 15 basis points more for a five-year bond today than we did one year ago. In the CP market, the margin with STIBOR is not much higher for Castellum than earlier, but since STIBOR has increased after Riksbanken increase in the end of last year, and of course we can understand the impact on the adjustment requirement for liquidity for Swedish banks. We now pay some higher margins for the CP interest, but it is still a very cost-efficient arbitrage to have.
If we go to the next slide, please. What have we done? We have, as I said earlier, prolonged SEK 2.4 billion, in the banks. We have increased the Swedish MTN program. So far, SEK 1.6 billion and had also SEK 1 billion that fell due to maturity. We have still SEK 2.3 billion that falls due with different time frames this year. 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 one year ago in the CP market, and we calculate to be on SEK 3.5 billion 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. This is something that we prioritize. We would like to get our average capital duration up to at least 3.5 years, and we can use NOK and Euro as we see it, but we also evaluate other alternatives. With that said, we go to the next slide.
We are in 2019, looking into the future. In the short-term, we will see a strong to stable rental market. That is built up by that we still see an undersupplied office market. We have simply produced too little office space here in Sweden. We have a stronger to stable rental market in Copenhagen, and we have a positive development in Helsinki. From my standpoint, I see the rental income being stable current market going forward. We are seeing still very large interest in the Nordic market from the investors. We cannot see anything changing on that side. For the next coming months, we expect that to continue, and we also think that we will be stable to attractive deals on that one going forward. We also know that we will have access, as Ulrika is saying, to the financing.
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. 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 businesses. With that said, I conclude this and hand over for questions.
Thank you. Ladies and gentlemen, if you have a question for the speakers, please press 01 on your telephone keypad. If you wish to withdraw your question, you may do so by pressing 02 to cancel. There will be a brief pause while questions are being registered. Our first question comes from the line of Tobias Kaj from ODIN. 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 leasing and the relatively big terminations in Stockholm and in the regions. Is it some specific tenant that explains the figures? Can you give some more information also about when those tenants are moving out?
Yeah. We have some large tenants that we're moving, exactly like you're saying, actually in Copenhagen and in Stockholm, if we take the two biggest ones. That will be leased out. They will leave in nine months in one case and 12 months in another case. They are due to two 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 lease out. The other one is because of a merge in Copenhagen with two international companies that they're moving headquarters. That will not either be a problem with leasing out that space here. Of course, we will have a back time and investments in there.
I think, though that, of course, the majority is, of course, normal turnover in the leasing portfolio that we will see in the future if this is just the time lag that we are experiencing right now in the existing portfolio. The most important part for us is that the gross leasing in the existing portfolio is more or less the same volume that we had one year ago.
Can you say anything about the start in Q2 and your backlog for Q2, whether you expect to catch up in net leasing for this quarter?
I'm sorry. We don't give prognosis in that respect. That said, is that of course, we now increase our activity on the portfolios, on the leasing activity.
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. We haven't really seen anything since that. Should we expect that you will find some acquisitions in Helsinki near term, or what's your view on that?
I agree with you. Our view is that we shall expand in Helsinki. As we always said, we are cautious buyers. We have also seen that it's very important to buy the right stuff, and we haven't had the opportunity to do that yet. We are not stressed. We have changed a little bit strategically in Helsinki and have started our own office just with one person. 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 up in Helsinki.
Can you indicate something about what kind of yields you want to be able to acquire at?
We can't change the world. We need to buy at market yields. That's one aspect. It's also important that what we buy will move in with our experience. What I've seen in front of me is that we're using 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. The deals is one question, is another one what we can achieve in two to three years time on the deal side.
Okay, thank you. One final question regarding your paid tax. Should we expect that it will be at roughly the same level as a % of your recurring income going forward, or will it increase further?
That is a good question, it's a little bit tricky since it is due also to how the change in value of derivatives goes according to the new regulation. 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 %.
The same development, does that mean the continued decline in derivatives or stable from this level?
If the derivatives is not more negative, then it will be better. If the derivatives will get more negative, so to say, more negative changes in value, that means that will have an impact on paid taxes. If it goes positive, that will mean that I will pay lesser paid taxes also. That is a connection.
Yeah.
It's a more complex puzzle. We will see the further we go down into this year, the more we can change the capitalization within each unit in the group. We will struggle to have low paid taxes as we can, this is the third quarter. 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 Tumi from Green Street Advisors. Please go ahead. Your line is now open.
Hi, good morning from my side. I just wanted to ask whether you can elaborate more on the office rental market, 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 a sub-market story? Additionally, if you look ahead, which markets or sub-markets do you see as the weakest? 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. Yes, you can see it like the first and most important part as I see it is supply. What have you on the vacancy rate in the existing towns? We have never been lower if you look at it generally. That's the first part. I should say it's a more general question all over Sweden looking at the tenants. We can see that one part is for us that we can't supply some tenants then won't have growth with new spaces. At the same time, you also see that a lot of changes has been done, for example, by mergers that we are affected by.
The third part is that if you see that the government is in this case, it's both growing and restructuring their office portfolio. There's a lot of puzzles that's ongoing. From my standpoint, I'm generally, or I am very calm in this because we have this undersupplied market on the office side for the last five years. In the last part, 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. That was also what I have in mind going forward.
Okay. Very clear. Thank you.
Thank you. Our next question comes from the line of Niklas Hageback from Nordea. Please go ahead. Your line is now open. Hello, Niklas. Please go ahead with your question.
Can you hear me? Niklas Hageback here. Yeah, super. I had some problem. I had a couple of questions, if I may. If we come back and discuss the rental market again. 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 potential here? Also with the contracts which you see in the cancellations. What are the delta in rental levels in the ongoing renegotiations and the magnitude in the portfolio?
If I take the renegotiations, it may sound strange, but it's two different things because the negotiations is still going very well. We still have a good headroom from existing rental levels up to existing market levels, so to say.
Right.
There is a lot of renegotiations that is being made, and so far we have the same trend this first quarter of the deals we have done as we saw last year. That is not slowing down. However, we don't see that the market level increases still so much as it maybe did earlier. Even if we're having negative news since 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 tenant 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 pay when you tried to renegotiate it?
Yeah. To start with, the normal case is that the tenants stay. We have to start there.
Yeah.
That we work with their efficiency per square meter and lease. There also United Spaces coming in as a complement to start with. If you take this special case, they didn't want to pay approximately around SEK 6,000 a square meter. They could find more efficient space just outside the CBD area. That's of course because Stockholm has the large change of square kilometers with their square meter price to change it. This is extremely unusual for us. I must say that it's extremely unusual that we have this. Normal decision is from tenants to stay to work with efficiency, and here we helping them out. To give you data, that's the SEK 6,000 in comparison with the difference.
Henrik, what are they paying today? Were they coming from 4,000 then up to six or?
Yeah. I think it was approximately 35% uplift at least. 40% uplift. I think that's where it comes from.
In new tenants, they have to pay SEK 7,000 or something like that then?
No. I think you should look at the SEK 6,000 as objective over this space, that is of course depending on what we're pushing into that space and what we have to invest.
Right. To go back to that, I guess.
Even if they sit in there, we have to do some investment.
I would like to move to external valuations. You mentioned only very briefly in the report that it's very much aligned with external valuations while the internal were slightly ahead of the externals in the fourth quarter. Could you share some numbers on our valuators catching up to your numbers or do we still see this discrepancy there?
We said in the year-end report and the year-end call that we were ahead, you could say, on the external valuators. Or we were more positive towards logistics and more negative towards retail. I think that the transactions that have been made in the market this first quarter shows that our belief was very strong. If external values think different now, I really don't know, but the market has shown that our statement was true.
Okay, fair enough. Moving over to the credit portfolio. You're talking about increasing duration in the portfolio, while it's actually duration on the credit side. It's coming down a little bit in the first quarter. 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? Are we talking about below 10 basis points or what's your opinion?
On the portfolio or on a single transaction on a particular level?
No. On portfolio level.
Yeah. It's of course a timing question and which market you will accept or which tools because we're also evaluating the possibility to have long integration outside the bond market or the capital market. Maybe 10 basis points on a portfolio level. Yeah. That is maybe a good spot at the moment.
Is three and a half year a starting point or would you be comfortable with that level?
I would be rather comfortable, of course, I have talked about the refunding risk or the funding risk for a very long time since the portfolio is bigger and bigger. The price on lending is more expensive than the interest rates in itself. I think this is an important question to address. As I said last year, that was our main driver to access the Euro bond market also.
Okay. Just one question. Thank you very much.
Thank you. Our next question comes from the line, Fredrik Stensved 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 two boots on the ground over there. Today at 45 for the group. How much wiggle room do you have for acquisitions? Are you primarily looking at portfolios rather than single buildings?
No, the headroom, I think you're referring to the balance sheet headroom.
Yes.
We are going to be very cautious, of course, of the balance sheet on the level going forward. To start with that. I think that the most efficient way of doing the Helsinki portfolio is doing both. You need a portfolio because it going to go too slow to buying that asset by asset and to do some compete, also compete that way with some single deal. Absolutely, you need to do at least a small portfolio acquisition to get the volume up because otherwise it's going to take too long time. That's one view.
Okay. Then moving on with value changes. Almost the entire change was driven by yield in this quarter. Considering the like-for-like effects, like-for-like was close to 5% in the first quarter. 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?
Yeah. 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.
Okay.
We did know the cash flow at the year-end valuation, so to say.
Okay. 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.
Yeah, I would say that if we do further renegotiation, now it's a time lag and it takes time. That is true. If we get more, you could say positive net leasing, then you should expect everything else equal valuation uplift driven by cash flow.
That's clear. Then my final question on project investments. We have gotten used to project investment level in the last two years of about SEK 2.8 billion-SEK 3 billion annually. In the report, you're stating that your target is to increase that further. Should we expect that the level will be materially different from SEK 3 billion in the next couple of years?
Yeah, I should say you will have an effect, of course, that is calculable. Just look at the possibility that we think is possible in the Q4 or in the Q1 in one time when we start a large project in Malmo, for example. That could be something that's going through and that will of course affect that investment pipeline. On top of that, we have the normal investments you can call it, that will also increase. Yes, I should say look at that for more next year than 2019. Yes, they will slowly increase during the quarter from August.
Thank you. Thank you again, Henrik.
Thank you.
I've got a question here on the web regarding the duration and the banks demand higher margins, and which impact that will maybe have in the coming two years for Castellum. I would say that then I need to do a lot of speculation, and I don't think that is the best way. I pass on that question.
We got another question. What are your thoughts on entering Norway? 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. We want to be a Nordic player. We have also stated that we will focus on Helsinki first. It need to be very interesting if we go for another city, and this is still the same. 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.
Okay. Should we complete this? Yes. Thank you everyone for listening and have a nice working day. Thank you.
This now concludes