M&A Announcement

Oct 1, 2021

Hi and welcome. Today, you will take part of a presentation on the public bid on Kungsleden. In end of this hearing, there will be time for a Q and A session. And there will also be participating, our CFO, Lika Darnjessson and our Head of Sustainability, the Filip L Land. You will ask your questions by writing them in the chat here below. Now I will hand over to our Chairman, Rutger Anhalt. So please, Rutger, go ahead. Thank you. Well, thank you for joining in and I will give you a presentation of The bid, Castellum bid on Kungsleden. I'll give you a glance of how Castellum looks today and also how Kungsleden looks today And what the merged company will look like and what our ambitions are. So my name is Rutger Arnold. I became the Chairman of the Board in end of March this year. I've been a long term owner in the company. Before I came to The Board, I have worked in the real estate sector for more than 30 years now. So Quite a long history in the sector. The deal, I need to use my glasses, otherwise I can't See my notes. So in October, in the 1st October today, We have started the acceptance period. It started this spring by taking contact with Kungsleden. After we tried to do the Entra deal, we looked around and we have been watching Kungsleden for a long time. And we announced a bid this summer and it's the structure is 70% Paid by shares and 30% paid by cash. Could I have notes in front of me here maybe? Just say a bit. And the bid, the value of I can't can I move it a little bit closer? Sorry. Here we go. Here we go. 2 week glasses, sorry. So The bid consists of cash bid and a share bid. And the price on the bid level was 124.9 Neide, that's which amounts to a total bid of SEK 26,900,000,000. Sorry, it's hard when I can't see it. Sorry, it's too small. Can you change the picture so I can see here? Okay. And the offer represents approximately 20% premium on the NAV in Kungsleden And it's about SEK 7.5 premium on the share price at the time of the bid. We got the recommendation from the Board of Directors in Kungsleden that anonymously Recommended to Kungsley and shareholders to accept the offers. We also got this supported by a fairness opinion from Svenske Handelsbanken. To clear to get the deal most likely to go through, we managed to get Juste Wennensson, Ilje Bertrand and Ole Frein that together approximately owns 26% of the outstanding capital and votes in the company to irrevocably undertaking to accept the offer. We also have had an extraordinary general meeting held the 26 27 August in Castellan, where we got the allowance from the shareholders in Castellan to go through with the bidder bid. On the 10th September, we got competition, the clearance from the competition Authority in Sweden to go through with the bid also. And Castellum has after the announcement acquired another Not another, but acquired 21.3% of the shares in Kungsleden. And that corresponds To 9.9 percent of the outstanding shares and boats. The offer It's not subject to any financial conditions. It's totally fully financed by Castellum's Available funds. The value creation, we are looking forward to unlock shareholder value through the scale, best practice and a combined focus on growth markets. We will create the largest listed Commercial company commercial property company in the Nordics region with a strong balance sheet and we will maintain the strong Moody's rating that will enable us to get attractive financing terms and enhance the competitiveness. In total, we assume that the annual synergies will be about SEK 285,000,000. The commitment from Kristallen's Board Continue to retain the financial policy approached and embedded in Castellerman and Kungsleden. Also following the completion of the offer, the Board of Directors Neste Castellum will offer Bjorna Persson And Ilve Saxby, the same positions in Castellum as they hold in Kungsleden today as the CEO and as the CFO in the company. It's an attractive offer. It's premium on the NAV Of about depending on what kind of metrics you use, but it's about 20% premium. And it's Also premium 7.5% of the last price paid for this year. The combined portfolio of Castellum's SEK 122,000,000,000 and Koonsleden is approximately SEK 43,000,000,000 We'll together end up with a portfolio of SEK 165,000,000,000 in the combined company. In that figure, We include the ownership indirect part of the ownership in Entra, which is about SEK 19,000,000,000. In total, it will be 5,800,000 square meters and it will enable us to a lot of synergies due to the big scale. It's and it will be the Nordic number 1 the largest Nordic number 1 listed company. We do have an attractive financial And dividend policy, we will never have an LTV above 50%. Today, it's 38. And due to our ambition to withhold our nice and strong rating of Baa2 from Moody's, We will not nearly come near to the €50,000,000 in reality if we would like to maintain that. So and also, we have an ambition to never exceed 2 point 0 times in interest covering ratio, ICR and today's is 5.3. So it's very, very strong. Our ambition is also to grow annually our income from property management by 10% yearly. That's That's not a very ambitious goal, but we have the possibility to reach us as far as we analyze the situation. We also have an ambition to distribute 50% of our income from property management to our shareholders as a dividend. We have a long, strong history of distribute dividend to our shareholders, actually the longest among the listed Companies in Sweden. The combined company will unlock possibilities to Take advantage of properties take advantage of economies of scale, best practice and will be focused continued focus on growth markets. We will have a strong and we will maintain a strong balance sheet. That's one of our more competitive parts. We also focused on the ESG and the sustainability. That will it's very important going forward. We are one of the companies included in the Dow Jones Sustainable Indexes, 1 of I think 6 Nordic companies, 6 or 7. We also have been ranked number 1 by Grespe for several years. I think it's now 5 years in a row actually. And as I mentioned, the synergies SEK 285,000,000 annually. SEK 185,000,000 comes from operational Synergies and about SEK 100 comes from financial synergies. This is the indicative time plan. We are now at the 1st October. The acceptance period started yesterday. Next In line here is our interim report to the Q3 from us, from Kungsleden. That's the 19th October. And the acceptance period ends at 29th October. And we will get the final result of the 1st November. And we expect to start the settlement at the 4th November. That's our time plan. Looking at Castellum, it's a big company. We have 440 employees. It's about Sorry, 3,800,000 square meters. It's 558 properties, 26% of the volume comes from the income comes from Governmental and authorities. The volume at half the year 2nd quarter was SEK 97,000,000,000 as you can see here. But since then, we have bought some. I will come I'll show that in a picture later. And we do have a BAA rating from Moody's. What's happened this year? We have bought 9.9% in Kungsleden over the stock market. We have also bought 31% of Entre. We didn't go through. We didn't manage to buy the whole of Entre, but we have at least managed to buy 31% without any dilution in Castellum, which we consider is a very good position in the Nordic market through Entre. And it also ticks in the box on our ambition to be a Nordic focused company. We have also expanded in Finland. We bought a portfolio of SEK 6,500,000,000 in around Helsinki Called the Kieva portfolio. And directly after, we sold off SEK 2,100,000,000 out of that properties. We didn't really That fit into our existing portfolio. We also acquired 2 office buildings in Stockholm and sold 1 in Copenhagen. 1 in Copenhagen that will be fully vacant and we bought 1 in Stockholm for the same amount of money that's Fully left actually, so a good switch there in our view. And then also we sold off in 2 transactions SEK 10,000,000,000 of properties of logistics to Blackstone during the spring. So that's what we have done so far this year, some acquisitions and some sell offs. Quite big volumes, but we have really, really focused the portfolio to the markets we would like to be in. Kungsleden as a glance, approximately 133 employees. It's approximately 2,000,000 square meters, Has 207 properties valued at SEK 43,000,000,000. 90% Of the portfolio actually has an overlap on the Castellan portfolio. So it's hard to find something that fits even better together with Castello. And approximately 18% is governmental and authorities. And it's a high quality portfolio mainly focused on Stockholm and it actually increases the Castellan portion in Stockholm. I'll Show that later on in the table. Some pictures, some examples from Stockholm, Gothenburg And it shows investors and shows some of the properties. This is, you can see, commercial focus, Its office, but also a small portion of logistics fits us well. So it's rational. It will strengthen Castellum as a leading commercial property company in the Nordics. We have a leading position and we further strengthen it. And since the portfolios are matching so well. The combined experience will also, In my view, create a very, very strong team. We'll get the strongest and most forceful team in the Nordics. We also become stronger on the development side. The combined development portfolio will be amazing And even bigger than we have today in Castel. So we add on interesting things into our existing portfolio. And as you know, we have a very strong A development how do you say, property development department within Castello. It gives us a very diversified base of tenants in different sectors and that really gives us a stable Base for continued strong and stable cash flows. We also have a joint agenda on being the Europe's Most sustainable company or one of the most sustainable, why not the most sustainable? This becomes more and more important each day. And I think going forward With more climate crisis and so on, it will just be more and more focused on this. So try to be on top, try to be in front of sustainability So that we turn over a very clean and nice company to our kits in the future. And there is a significant value creation through synergies In the deal, the SEK 285,000,000 business saved can be transferred into the yield calculation and you can figure out what kind of value creation we can make From that, so that's very interesting. It has we have an attractive financial policy. We'll stay we will make sure that we keep our ratings and keep our ability to borrow at very, very attractive levels on the Eurobond market and from The Nordic banks, of course, and international banks. And we do get a very, very nice team, strong team of experienced management That will that we now hopefully at the beginning of November can start to form so that we get the best team to execute on our strategy going forward. The combined company, it's interesting to see this picture shows The largest commercial property company in the Nordics. Castellium is the largest with SEK 97,000,000,000 and Kugnzelden is one of the largest And also with 43. The combined company, EUR 140,000,000. And then adding on the acquisitions we have made and a Proportion of the Entre portfolio. So indirectly, since we own 31% of Entre, We look upon it as we have a position in Norway of SEK 19,000,000,000 We also will account it as a company of interest, so you will see What kind of income that part of our investment gives us in the Castellanos figure. So that's really good. Improves our ICR then. And profit per share, of course. Combined, it's SEK 165,000,000,000. So we are more than double the size of our 2nd largest competitor in this table here. This picture shows how we complement each other. The green dots that shows the overlapping citizens. And as you can see, it's only more or less only in Jable. Kungsli doesn't own any properties. Otherwise, we have an overlap on each in each city. And this picture also shows that the Stockholm market increases. You can see the light blue part of the Stockholm line really Increases. So actually in value, Stockholm is becoming larger than the Gothenburg, but in square meter, Gothenburg still is the leader. So they can compete together in the future about who's the largest and then the Gothenburg team can always go for the square meters and the Stockholm team will probably A focus on market value. So it's 90% overlap and this really will Strengthen our customer offering in each and every market. Showing this picture also, see that we will probably most likely sell off A few buildings at the bottom list here to make sure that we are focused and also to make sure that we Keep our low LTV and an attractive LTV level in the company going forward. This is an example of how we fit Together in Stockholm, you can see that we add in a portfolio that really strengthens our position in Stockholm With a handful of really, really nice real estate assets coming in from Kungsleden. And we get a much, much, much better Combined portfolio in Stockholm. Now we are in the most interesting markets and areas in Stockholm with a significant amount of square meters. So our offer to our tenants will be really, really much better. This shows that we are focused on in strong regions. The left, the scale It's population growth and right is growth in income. And you can see that the major citizens in Sweden, Stockholm, Gothenburg and Malmo Are all in top based upon income growth and you can see that we are well above average with more or less whole portfolio, 90% of the portfolio is above the average, which is very, very strong. And This is only because the company has been working hard on focus on strong growth areas for many, many years. And the same situation Has been in Kungsleden. That's why the portfolio is like it is today. They have sold off less regions with less growth. The combined portfolio, as you can see, Castellum and Kungsleden has a large portion of office, a neat portion of industrial and warehouse also. So the combined company will have 14% warehouse, but 58% office and only 6% retail. I think 6% retail is Something you should have in an office company. Retail is not so favorable these days, but you need some of the retail to have an attractive offer to your tenants Because the tenants are using the shops and coffee shops and services provided by the retail sector. So that's important. You can't have 0 and then you have misunderstood how it works. And then we have a lot of development and land. Going forward, we will have a very strong pipeline of more than 20 big projects going on in the combined company. And the Stockholm part here in this picture shows that it's 34% of the value in the company of the SEK 140,000,000,000 of value. Finland is slightly stronger now after the last acquisition. It doesn't show in this picture, but that's because it's after happened after. So we have a slightly stronger position in Finland, but the else is more or less the same. To show you some of The projects, we have 17 projects going on in Castellum and there is 6 major projects going on in Kungsleden. The combined project portfolio is nearly coming up to SEK 10,000,000,000, 7.4% in Castellum and 1.4% in Kungsleden. It's a really, really nice portfolio. And also as you can see in the project portfolio coming From Castellum. It's a large proportion of governmental. The 2 largest ones in Malmo are more or less. As you can see, E. ON is Public or government or more or less and then goodsfinken, of course it is. Tenant base, it's amazing. So many tenants from so many different sectors. This shows top 10 tenants in Kungsleden. There is no single tenant that stands for more than 4% of the combined rental value. The combined company, the income has been stable and growing in both companies for many, many years and will continue. Lower to the right here, you can see the dividend from Castellum over the years. Amazing. And this is something that's really key for us to maintain this continuous growth in dividend year after year. We are the leading company in that respect And we will continue that to try to continue to keep that position going forward. Sustainability, it's key for us. We have Philipp on board who can ask specific questions afterwards, but this is key. I think it will be more and more focused on this going forward from everybody. It's been focused within the company for many, many years. And as you know, in the sector, real estate sector, cost side is electricity, it's heating, it's water, Maintenance, if you are a little bit more structured and you're focused on this, you can save a lot of money and that has been the case in the sector for many, many years. Now it's focused from everybody what we're doing and what we can do going forward. And we will, of course, try to become a 0 company as well as some others. And that's the focus to turn over a very clean company going forward. Every new construction is always certified. Otherwise, we don't start them. So everything new will be So it's fair going forward, of course. Segura and Fenneries, SEK 185,000,000,000 from operational. Big company, big possibilities to be efficient, get better deals with everybody and so on. Also on financials becoming an attractive, more attractive company, keep the ratings and the volume will attract Be attractive. So I look forward to see the next time we do something on the market if we can even Get better margins than last time. And then of course, there are also synergies In the market position, the offering will become stronger, but it's hard to calculate on how much that is. We're also losing one of our biggest competitors. How much will that help us to not fight, to work together Towards and we get rid of 1 competitor, so that's important. And the offer will become better. The combined companies, SEK 85,000,000,000 in asset value, net asset value, you have it at the bottom right here, 765 buildings, it's a big company. Rental value of almost SEK 9,000,000,000 And lettable area of 5,800,000 square meters. It's a huge company. It's a company that every delivery firm, every seller of ours, try to sell us stuff, we'd like to have as a customer and we will use that volume to get the best deals in the market and become the strongest company. Growth target, mentioned before, We have a target of grow by 10% annually. It's a tough, tough test to grow the income by 10% year. Been focused for many years and we have succeeded. And this deal with Kungsleden will help us to succeed. And for a year, it will take well, you know, it will increase our figures for next coming years. We'll never exceed the LTV of 5.50, F38 today, as mentioned. Never below 2.0 in interest carbon ratio. It's 5.3 today And it will remain just below SEK 5 billion in the combined company. We'll continue to distribute 50% of the income to the shareholders as a dividend going forward And 4.7 to be exactly. And the LTV past combination is 42, I should mention that as well. The timeline is here. We have gone through it, so I pass skip through that. Pictures on me, Good one, I would say. Bilhana, magnificent. Ilva, fantastic. And this is I'm not in the team, I'm just a Chairman. So, Ilva and Bjeljanne will form the team, the strong Nordic team Together with the team from Kungsleden and with the team from Castellum, we will welcome them in And welcome all of Kungsleden in and then we start working together and becoming the best and strongest company in the Nordics. Do you have any more pictures? This is just rep repeating. So we go to the Q and A session if we have any questions. I hope so. Yes, there are a lot of questions coming in. Thank you so much, Roke, for going through presentation. Thank you. I will start reading some questions that we had got in our chat. So the first one looks like this. Do you see any risk of the acquisition not going through? And what happens if Castellan fails to obtain 90%? We're quite well, you never know. You never know. Our ambition is, of course, to reach 90% and then it just Goes through. If we don't need reach a 90%, we'll probably most likely prolong the acceptance period That's a first step and then we see what's happened after that. That's up to the Board to decide if we would like to Go through with the deal. If we don't receive 90%, we haven't we don't have an answer on that. We have to wait and see. All right. But we are owner and owner also. We have 9.9%. So anyway, we'll be an owner a part owner at least of Kungsleden. Yes. So the next question, what is Castellum's view on Kungsleden's current book asset values? Does Castellan consider the book values fair? Or do you see the value upside potential near term due to deal compression? Yes. The book values in Kungsleden is based on asset to asset valuation. And it's not made by Kungsleden itself. It's I'm back external evaluators and they are cautious and precautious. And they do it house by house, property by property. And today, you have a premium on portfolios. So if you can buy 4 buildings in an area like what Kungsleden called Kluster, They're using that word a lot cluster and that's because they have a lot of clusters. So a group of properties in one area, A cluster. And that cluster is actually as a group worth a little bit more. So that creates a small in today's market, A small premium. So what I see, I think a portfolio like Kungslin is worth a premium. And we pay like 7%, 8% premium if you back the bid down to the property portfolio. And I think that's quite That's not too much to get the volume because if you buy piece and piece, then you will probably have to pay a lot more. So I think it's if you have the possibility to buy a portfolio of SEK 40,000,000,000, SEK 50,000,000,000 like this is, then you have an advantage to make there. So you can get this portfolio. And then also with the synergies we get we create, we can always pay a little premium because the synergies Create value. So there is room for a small premium if there wasn't in the valuations. But we just Assume that it looks like that the and then we do our own estimate. It looks like the values are fair and we trust the external valuation firms so That they have done their job. And this is something you do frequently. So it's not the once in a while job. You do it frequently. Good. Next question. What is the plan with Entra? The plan with Entra the plan was to buy Entra, the whole of Entra And so that we would have a position in Norway of SEK 60,000,000,000. Now it's 2019 and it's not too bad. It's not too bad. We have 31% and another friend of ours, a competitor of ours Has SEK 32 or something. So together, if we can just speak to each other and be helpful to Entre, We can support the company going forward and that's the way we go for now. Long term, I don't know, but it's hard Now since we are 2 major owners, it's hard to do something else. We're happy about our position and it gives us indirectly SEK 19,000,000,000 will soon be SEK 20,000,000,000. They grew all the time. So that's a nice position in Norway. It's not SEK 60,000,000,000, but it's SEK 20,000,000,000 And it's better than 0. And it's hard also to buy piece by piece in the Norwegian market. That would be very tough To buy SEK 20,000,000,000 in Norway. And another thing I like with the position is that if we can just Support and stand behind the management team through the board in Entre so that they make the best. We get the economies of scale in that market also because the synergies between properties in Norway and Sweden, if we buy SEK 20 SEK 1,000,000,000 in Norway are not big. Financial wise, they are but not in daily management. But in this portfolio, you have SEK 60,000,000,000. So you have the economies of scale. So that's good. So it's not it's actually really good. I would like to instead of so now we can instead focus on trying to get a larger portfolio in Denmark and Finland. So because we're quite small in Copenhagen. We are quite small in Helsinki. It's 5% 55.5% and 7% 7.5% in Helsinki. So I would like to enlarge this portfolio so we get a stronger position there. So that's our focus now. Now we can kind of Forget Norway for a while. We don't need to go there and see on single assets. If we get prospectus, we can send them to Entre. Easy ownership. All right. There's a lot of questions in the chat, so I will push it a little quicker. We're working it more about Centra. We can buy more shares, but we can only buy a few more because now with 31, we can't go above 1 third, 33.33, because then we have to bid for the company. So that's the roots in Norway. Some people some investors thought when we passed 30 That we needed to bid, but that was a misunderstanding because the routes in Norway are slightly different. So 33.3 percent, that's the maximum. So We're almost there. We will stay before that. Yes, yes, yes. We will not pass that limit. All right. I have another question. Will you leave the Kungsleden debt outstanding? Or will you refinance the debt? No, we will over the coming years refinance. That's how we can create the financial synergies Because we borrow slightly cheaper. So in that way, we can save more save €100,000,000 or maybe more, but €100,000,000 Yes. Are you looking to raise even more hybrid capital after the combination? That's nothing on our agenda, but the hybrids are attractive. You get the equity at attractive levels. So if that market continue to be in the same situation as it is today, that's Not unlikely. But today, we did issue the amount we needed You know, strengthen our balance sheet. And we don't need to use the hybrid anymore today, but you never know if Kungsleyen is probably not the last acquisition we make. I think you will see in the Nordic market a lot of M and A activity. And we will, of course, in the future, take you try to be involved. Now we have to focus on Kungsleden, but I mean, Further down the line. And in a situation similar to this one, we will most likely, if it's a similar situation, use hybrids. All right. Another a little bit longer question. Assuming the Kungsleden bid is successful, will Castellan remain active as A consolidator on the Nordic commercial space or would you be more focused on the organic growth potential, including development projects post the Kunstlje then deal If you want to continue to grow via larger M and A deals, what are other segments or geographicals that you look what would you look for? Not many questions. We will we always try to grow organically. Growth with projects is the best way to grow. We get the best yield. Then adding on single assets nearby are strengthen our local positions is also always interesting. But they don't come up so often. So when they do, we will try to use the opportunities. And then it's always a matter of price. If the price is right or if it's not. If it's not, we don't buy. So it depends. Sometimes we have An advantage of being large and sometimes we have an advantage of being big in an area. So we are maybe the only one interested in a particular property. So we'll see. And then M and A, as I mentioned, we will be if there are opportunities, We will calculate and figure and see if it's attractive. Should always be attractive for the shareholders, value creating And profit creating in every way. So Should you say that is a trend in the business overall? Looking for acquisitions, yes, it is. Going back the last years now, it's been a trend, definitely. And going forward, I think most of our competitors will become larger and larger by acquisitions and M and As. Going outside the Nordic, Yes. Was that also a question? Yes. It's not on the agenda. We have so much more to do in the Nordics. Yes. As I mentioned, we have only SEK 5,000,000,000 in Kopenhagen. That's a very small position. We love to grow there, lovely city. Same thing in Helsinki, SEK 7,500,000,000. We love to grow in Helsinki. But the deals must be right. We're not and there's always a lot of house, Not always a lot of properties for sale and they're always expensive. So you have to find the situations where you can live with the expensive price. You can see an upside. So that's what we're always looking for. All right. What is your view on the future of office and distance working? Will it affect the market Absolutely. Of corona. Yes, absolutely. It has already and we did work a lot from home even before. I think in average, people worked like one day a week And now we will probably 1.5 or maybe 2, but you will still need an office. People go crazy in my view By working from home all the time, but the flexibility will be key for people or companies. I would like to attract The best teams to give them the possibility to be flexible. But To sum up your business and to meet up in the office, I think it's so key, but you don't need to meet up 5 days a week, But you need to meet frequently to experience ideas and promote to discuss And come up with deals. And if you don't meet people, you don't come up with the greatest ideas. And you will not create a new Huge company from the kitchen table. I don't think so. You need colleagues and you need to Sit and discuss. Have you seen any effects on the rental levels or the vacancy rates or No, we've seen some vacancies coming up because company has been worried about where we're going. And when leases are terminated, then they wait, some smaller companies. But we have also seen the opposite, companies needing more space because they need to bring in everybody a few days a week And they also need more space and they're not fit for that. Normally, they're not everybody in the space at one time. But now when people are more, I coming in on Tuesday, then everybody might come in. You become more flexible and then you can't regulate that You can't come in on Tuesday. It's only him. So you need space for everybody. You need to meet everybody. Sometimes we can then you need space and you need more space and you also have more creative space. That's a trend we have seen for many years. It's like you create your own co working space within your company, within your space. So that's what we have seen for many years. What do you think about the demand for office spaces in, for example, Stockholm, Gothenburg, Malmo? Is that That's a growing demand. Well, it's a growing economy And it's a growing demand. And I think it's I think we will also see some negative things about people working from home: depression, Alcohol, I've heard a lot of problems with people who had the possibility to drink Several times a week now in the midweek and having problem coming back to the office. So we will note that there has been some negative and depression we I've heard a lot of. So you need to get out of the house, get to the office, meet your colleagues, which is often your friends. Yes. Conclusion, the office space is still needed. So Definitely. And we have a strong economy. We have a lot of new companies coming out all the time. There's a super trend in Sweden and in the Nordics of new companies coming out and they need new space and they got the capital To rent and so on. So there is a huge and strong demand also. And we do have a positive letting. Don't forget that. So our actual fact figures are positive. Very good. A totally different question. Might issuing D shares be a way of ensuring a high rating after the combination? D shares in Stellum should be a very attractive offer to the market. To the market, but not for Stellum. It's too expensive. Since we can borrow at so attractive levels, I can't argue that we should issue these shares. These shares are traded at 6%, 6.5% yield. We can then we can use hybrids. That makes much more sense. To a certain extent, there is limitation with hybrids. The rating authorities, Moody's and S&P and Fitch and Scope and so on, they don't allow you to have Endlessly portion of hybrids. So there's certain limitations. But within those, we'll work rather work with hybrids Or something else, much more it's too expensive for a company, Castello. Yes. Will this transaction change Castello's strategy in any way? Not really, not really. Maybe Not really, but maybe we'll focus a little bit more on Helsinki and Copenhagen now because we've become so big in Sweden. So we don't we can always become larger, but we are really small in Helsinki and Copenhagen. So that Much because we since Kungslaer only has properties in Sweden, so that's where we grow by this deal. Yes. Good. Otherwise, financial targets, dividend targets, Nordic focus, everything stays put. Good. Under what circumstances would a merger between Castellum and Korem make sense? They're quite similar, makes sense. But now we're focused on the Kungsleden deal. It's a huge deal For us, lots of people now need to work together. We're going to create this joint team. Going forward, never know if it makes sense, why not. If it doesn't, then we shouldn't. If it's value creating, We shouldn't miss a deal. It doesn't matter what company it is. So we're open for discussion, but it's for the best of Castellum's shareholders always. Okay. Thank you for this presentation. Here is my question. There are currently lots of worries about inflation. How do you see this treat affecting the commercial property sector and the profit margins of Castellum? I think we need inflation. That's not a bad thing. And we don't need this super low interest rate either. We can do very well with slightly higher interest rates. But now we and they will increase if we get inflation, of course, but we're talking We haven't had any inflation more or less, but now we see some signs of it. I think stable inflation, 2%, 3%, that's healthy. We can live with slightly higher. We have an ICR of more than 5%. And after the year, 4.7 So we are super strong. With inflation, we get better value creation on our portfolio. So it makes actually lives easier. So value just come by itself if you inflate the rental levels. So inflation is sometimes you say inflation is the real estate owner's best friend because their loans just disappear over the years. Let's just go to your parents. If they bought a house back in the days, borrowed, they thought it was a lot of loan, the loan is gone. Not through amortization necessarily, but through inflation. Okay. One of the last questions, will Bjorna Persson join Castellum even if the deal falls through? If not, what is the backup solution for the CEO position? If the deal doesn't go through, I'm sure She's loyal to Kungsleden. As sure as that's I'm sure. But the deal will go through. If not, we started a recruitment process in the spring. We just need to restart that And employ a new CEO and also a new CFO in that case. But I don't see that happen. All right. There is still some minutes left for new questions to be written in the chat below. And don't forget, we have also the opportunity to ask questions for our CFO, Lika Danielson and Filip Elland. And also think about the CEO, we do now have announced that we have a new CEO coming in. And if this Deal stretches out, takes longer than we thought than we are than we do have a team on board. But we look forward to get ilver and a billion of course. They've made a really, really good job in Kungsleden, cleaned up and structured the company. It was a little bit of a mess a few years ago, in my view. And now it's structured, nice, good portfolio, good projects, super control, Clean up the financial, clean up the debt position. We had some questions about the quality in the portfolio before. So can you say something about the quality? Yes, I think there is a misunderstanding. Kunstler has sold off a lot of less attractive assets over the years and they have also refurbished a lot of assets over the years. Several of them are assets we were trying to buy ourselves, been competing with them. And they also Added on a lot of nice buildings. So in some cases, they have really the top notch building. So it adds Castellum Portfolio of of course, Ask Astellum also has a few Properties are not we don't show them on pictures every day, but they're interesting because strong cash flows, but they don't look the best. But they might be super interesting in the future with the new developments and so on. So that's why we keep them. Otherwise, we would have sold them because the market The transaction market is super strong. So if we want to get something sold, that's the easiest job today. So everything we own, we own it because we want to own it, we want to keep it because it's so easy to sell today. So and that's the same situation with Kungsleden. They of course compare, sell it or keep it. And they rather the reason they kept the properties they have is they like the cash flows and they see the possibilities in them. So but we will sell off, as we mentioned before, A tale of property that doesn't really fit into the joint company. So we will we are working now on a sales process. And we just announced one sell off this other day. So we're working on it. So this looks like a good final question. Where will Castello be in 5 years from now? It will be slightly larger. If we manage to achieve the goal we have with 10% annual growth, In 5 years, we will be more than 50% larger. So SEK 265,000,000,000 growing by 50%. We'll be kind of a large company. And no But that's the way Most every company will be. So it's a but it's a scary figure almost. It's huge. But it's also a Super stable company with so many tenants. So if something should be larger than it's really commercial real estate companies or real estate companies in general, The larger you are, the more stable you are. You are into each and every sector. And if there is one little sector that are doing bad, It will be replaced by something that do better. So it's the same type that the product portfolio in each and every company changes over the time It's also your tenant portfolio changes over time. So we did if we have Tesla today, we don't have you know, There's so many brands going away, new brands coming in. New companies coming up, companies disappearing. But for us, it's just a new tenant. Can you say something about logistic going forward in a longer term? Yes. Now we have about 15% logistic And but we do have a lot of land, so we can build a lot. So we have a huge land bank. So if we can find tenants, we can build a lot, Several hundreds of thousands of square meters of logistics. It's a really strong sector at the moment. So we will, of course, try To use and work in that market as long as it's that strong. Will it stay strong for a longer time, do you think? Logistics, well, it's here. Last mile, huge boxes, small boxes, last mile delivery, just in time. Marmar, if you order something in the morning, you want it before the evening. So logistics in each and every City and market is becoming key. And you need hubs, big warehouses and smaller hubs. So I don't see that trend coming to an end. So rather accelerating more and more solutions and more and more delivery, Pickup and cars and mopeds and bicycles. People are lazy. And if they get it to the door, they want it to the door. So the demand for good logistics won't disappear. No. No. Okay. Sometimes soon you will have like now you have pizza delivery. Tomorrow you will have like a cappuccino delivery because it's too hard to go down to the cappuccino. We'll see where this ends. But we deliver the cappuccinos in within the offices. So if you go to the office, you get a cappuccino. Of course. Okay. That was all questions that we had for today. I will thank you to everyone listening in. Thank you. It was a nervous start because I lost my glasses and I took a pair that didn't work at all. So I couldn't see a thing. So But now I'm mad. I saw some, just most of it From here. Yes. I think most of our listening listener also can read. So you will find this presentation the words at castellen. Se, both the presentation and this video. So please visit our website. So I would say thank you to everyone that's listening and thank Thank you. Thank you all. And you can always text a message. I'm in Lars, I don't answer the phone all the time, but I answer text messages. So send them in. Perfect. Thank you.