Thank you. Welcome to today's Q3 presentation. The content is as usual. Start with highlights and results, balance overview, operational review, capitalization, capital deployment, and market and outlook. We finalize this with a question and answer session. Please move forward to slide four. Highlights. Catena has performed well in the third quarter, and despite the uncertainties caused by COVID-19, the structural trends fueling high demand in the sector is yet outweighing negative economic impact from the pandemic. NAV per share is 8% higher in the third quarter alone, indicating further demand for our asset class, both from customers and investors. We acquired a newly built property in Borås, east of Gothenburg, and signed an agreement with the e-commerce fashion company, Nelly.com for 15 years with expected NOI of SEK 16.5 million a year.
We have experienced another period of strong letting activity, helping us to grow stable cash flow. We keep working hard to obtain future interesting developments. Slide five, please. COVID-19. We have been fortunate enough to experience only a limited negative impact on revenue caused by COVID-19 so far. In total, SEK 6 million year to date has been expensed as total rent loss corresponding to well below 1% of total headline rents. The market sentiment in the quarter has recovered as uncertainties about the long-term impact of pandemic remains clouded. In many countries around the world, the virus spread has yet again, unfortunately, started to increase.
Our net debt to value position of 54.3% in combination with our durable cash flow operations makes me feel comfortable going forward. We keep monitoring the situation and continue to explore ways to address the challenges faced by our communities, our customers, and employees. Slide six, results and balance overview, and I hand over to Sofie for taking action on slide seven.
Thank you very much. From the income statement, you can tell that the net operating income was 10% higher year to date compared with the same period last year, and income from property management was 13% higher. That's SEK 14.39 per share compared to SEK 12.68 a year ago. NOI ratio was reported at over 80% in comparison to last year's 77%, in part due to lower maintenance costs caused by limited access to some of our properties during the pandemic. During the period, rental income was affected by a positive one-off related to an early redemption of rental contracts in the amount of SEK 40 million, and a negative SEK 6 million was related for reserves for expected credit losses. Unrealized changes in property value amounted to SEK 480 million, corresponding to almost 3% of fair value. We go over to slide eight. About our financial position.
The balance has grown by almost SEK 2 billion since last year, where unrealized value changes from properties contributed SEK 679 million, and investments in standing assets by SEK 969 million. Net asset value per share was reported at SEK 223, which is an upturn by 13% year-over-year. We go into slide number nine, an operational review, and handing over to Benny on our rental growth.
Slide 10. Rental income amounted to SEK 937 million in the period. The total growth in rental income was 5.9% year-over-year. Project developments contributed 2.4% and net transactions 1.1%. Like-for-like, the growth contributed 1.5% and there was also one-off effects related to prepayment of an early lease expiry, as well as reserved losses net amounting to 0.9% in the period. Slide 11. As indicated by the diagram, our cash flow has been growing consistently since 2015. From the last nine months, we performed another strong cash flow where we retained 58% from revenues in property management income. Cash flow is key to stability and to enable continued focus on a stable and profitable development pipeline. Our target is to maintain a level above 50%. Next slide, Sofie, please. 12.
Yeah. Slide number 12. Going to talk a bit our portfolio characteristics. We hold a diversified portfolio, both in terms of geography, asset size, and tenant concentration. Approximately 44% of our contractual income is derived from our 10 biggest tenants. Many of them, such as DHL or PostNord, we hold several contracts attached to a variety of properties. Above all, third-party logistics suppliers like these provide critical services to society. Handing over to Benny. Slide 13.
A little bit more about our diversified customer base. Simply put, our success is mirrored by the success of our customers, and we are proud to acknowledge the long-term relationships we tend to keep with all of our customers. This slide is displaying an essential part of a customer portfolio with the majority is experienced growth and/or are part of an industry experienced growth. With over 40% of rental value being represented by well-recognized firms within third-party logistics, transport and recycling provide stability. Another 23% is related to food and beverage, where for some customer growth due to online grocery expansions currently is very high. Almost 15% is related to home construction, packaging, and healthcare, all of whom at various degrees are witnessing a state of growth. Slide 14, Sofie.
Yes. On balance day, our property value was appraised at approximately SEK 17.8 billion, with a reported EPRA NIY of 5.7%. During the third quarter, unrealized value adjustments amount to approximately SEK 400 million, reflecting a market yield compression, but it's also due to projects being finalized and a favorable leasing activity. Going to slide 15, Benny.
Rental market. We continue to perform well on leasing, reflected in the high utilization of our facilities, leading to continued high occupancy of 96.1%. The rental market can be characterized as strong, particularly in prime locations with good means of transportation, mainly driven by high demand coming from a structural shift in supply of goods and scarcity of land and standing assets. In other parts where land is not an issue, the market is more stable. It remains too early to draw any long-term conclusion with regards to the pandemic. In Sweden, restrictions have been discussed and partially implemented. The critical function of supply chains, in combination with steps away from traditional brick-and-mortar, however, makes logistics real estate very resilient.
Leasing activity and contract maturity. With continued strong leasing performance, we welcome SEK 33 million worth of new leases in the quarter, a net of SEK 28 million. In the third quarter, we have completed over 36,000 sq m of new development, capable of generating SEK 25 million of NOI. The maturity of our contracts remains well-distributed over time, averaging approximately five years. We move forward to capitalization and slide 18. Sofie.
Yes. We maintain our cost of debt at 2.4% on average, and LTV was reported at 56%, down 50 basis points a year back from now. Equity ratio was reported at 34.9%, with sufficient headroom from our minimum target of 30%. Going to slide 19 and our funding structure. Here are some details about our loan portfolio. Access to financing has gradually improved from late second quarter, reflected in credit spreads being tightened. During the third quarter, we have successfully printed SEK 414 million in two separate bond issues, one, four-year floating rate, and one, two-and-a-half year fixed rate, both with just a slight increase in pricing compared with the beginning of the year.
The commercial paper market has also picked up pace in the quarter, and therefore, we also have been using that window of opportunity to shift some source of funds. Ongoing discussion with our bank creditors are going well. On balance day, we reported a debt maturity of 2.2 years and an average interest maturity of 3.1 years. We're going to slide 20, which is about our capital deployment. Handing over to Benny on slide 21.
Capital deployment year to date. We continue to focus the majority of our investment into development. During the first nine months, we have invested a total of just over SEK 1 billion. With three additional acquisitions of standing properties earlier this year totaling SEK 307 million, the rest of SEK 722 million has been directed towards our development pipeline, including investments in our standing properties. Slide 22, development projects in progress. At September 30th, 77,000 sq m of space was under construction, of which all is pre-let, equating to remaining SEK 430 million to invest.
The value of projects in progress was SEK 1.125 billion. During the quarter, we have finalized two major development projects in Helsingborg, adding almost SEK 25 million of net operating income to our earnings. Market and outlook. Can please move forward to slide 24. A little bit about the market and a short notice about some interesting news.
PostNord, who is the leading parcel service provider in Sweden, announced in August that e-commerce was growing at a pace of 25% compared to last year. That indicates a declining growth in contrast to the number reported this spring, summer, which is quite expected given the extraordinary circumstances that prevailed at that time, notably caused by all restrictions. The big difference from last year lies in whom is utilizing online shopping. Now, young, as well as old, has found its way to the digital platforms, that progress is here to stay. No one has probably missed out the news flash about Amazon earlier this quarter. Actually today, they launched their new Swedish homepage. From a logistics point of view and a Catena viewpoint in particular, I think this will only add and accelerate what has already been in place for quite some time.
Goods derived, typically from certain mid-price segments, have been struggling for a while, and with a giant like Amazon establish puts further pressure on the speed of the digital transformation. Slide 25. In late September, we announced the agreement to acquire 38,000 sq m lettable area located in Borås, strategically set next to Gothenburg. The newly constructed facility offers a state-of-the-art efficiency. Catena has signed a 15-year lease agreement with Nelly, a well-known e-commerce fashion company, including an option for expansion of another 13,000 sq m. The contract generates an NOI of approximately SEK 16.5 million. Of course, the raise will be prepared for solar cells. Slide 26. When we first started to develop Sunnanå Logistikposition in the fringes of Malmö in 2015, our goal was to create a modern, expedient, and sustainable cluster of logistics operations serving the greater Copenhagen area.
Now, five years later, we have successfully done just that. It's been a fantastic collaboration, I'm proud to announce that in the third quarter, we signed leases for the remaining space in our multi-tenant warehouse. From February 2021, the entire position will become fully let. Slide 27. Next to this position just described, we hold a piece of land where they expected have a final decision on zoning plan within the next six months-12 months. It comprises 110,000 sq m of land and enables another 50,000 sq m-55,000 sq m of lettable area, which could potentially generate another SEK 15 million in headline rent. From the experience with first part of Sunnanå, we know this is an attractive location for logistics purpose. Slide 28, potential future development projects. The search of new promising land continues, along with ongoing detailed development plans in progress.
On balance days, we held a potential of about 5 million sq m of land, where almost 1 million square meter are consolidated and with development plans in place. Rest of the land bank is conditional on various contractual agreements, such as detailed development plans having to gain legal force. Slide 39, 29, sorry. Moving forward. Welcome some questions, and we will try to answer those.
Thank you. If you would like to ask a question, please press star zero one on your telephone keypad. If you wish to withdraw your a question, you may do so by pressing zero two to cancel. That is zero one to ask a question. Our first question is from Pieter Runneboom from Kempen. Please go ahead.
Hi. Good morning, all. Thanks for the presentation. It's clear the current market is driven by high demand from e-commerce. Could you also shine a light on which type of tenants for which you see a lower demand, and for which you expect a low demand going forward?
Looking at the demand all in all, we must understand that we are very heavily within the Swedish retail ecosystem. Within that segment, we see actually that it's the brick-and-mortar part of sales that are suffering in those days. From the e-com perspective, we don't see that. As said, looking into the fashion segment and sports segments, they have been suffering a little bit, but that is especially related to brick-and-mortar sales. If you're looking at Catena now, where we have some losses or risk related to COVID-19, I would say we have some square meters of what you call climbing center, where you have event handling and so forth, but that is really on the margin.
Thank you. Do you also expect maybe a rise in bankruptcies from next year onwards with the economic recession maybe hitting some tenants?
That's very hard to foresee. I think that is very much related to much more global situation and linked to a second, third wave of COVID-19. I don't want to sit here guessing about that.
Okay, clear. Thanks.
Just as a reminder, if you do wish to ask a question, please press zero one on your telephone keypad. Our next question is from Jan Ihrfelt from Kepler Cheuvreux. Please go ahead.
Okay, thanks for that. I have a couple of questions. I just start with my first one, and that is regarding your property uplifts. You mentioned in the report that there are built in some kind of uncertainty in these valuations. Could you quantify a little bit about the actual amount or estimated amount that is put into some kind of uncertainty in your valuation at the end of September?
Well, we're not going to quantify. It's hard to put a number on it, but we see the compression of the yields, both in our own external values and our internal, and also from the big acquisitions or the big transactions that have been made in the market around us during this last half year. To put a number on it would be to forego coming valuations, and I don't want to do that.
But is it a small-
We follow the market on our fair value.
Is it a small impact or a rather large one?
No, I would say it's a small impact. It's not that big.
Okay.
We can't foresee where the market is going. Here in Skåne, it's now closing down. We got restrictions for three weeks going forward, we can't foresee where the pandemic takes us. Right now, we don't have any big issues.
Okay. Just a question on yields then. You probably are involved in some kind of bidding process for logistics properties and so on. Are you expecting yields to come down further from this level?
Well, in some areas, we might still see a yield compression where there is a scarcity of land. The yields are going to go down to follow as they are in Europe. In Sweden, we have a lot of land, and there are areas that you got land easily accessible, and there we see the yields going the other way. In the major areas of the big cities, I would expect some yield compression still going forward.
Okay. Just another topic. Your paid tax has been rather low during the last years. Are you expecting it to be in such a low amount going forward also, or how do you look upon your paid tax in 2021 and 2022?
I would expect us to, during these ränteavdragsbegränsning. You should say that. You know what I mean.
Yeah.
These new regulations have made it a lot more difficult. We want to pay taxes, but we don't want to pay it all at once. Yes, we are going to pay taxes, and I think we're going to hold the same amount as we have been the last year. I don't expect to see a big increase on paid taxes during the coming years.
Okay, just digging into your projects. There were two projects that were finalized in the third quarter, the PostNord and Nowaste Logistics. Was it early in the quarter, late in the quarter? Just to get a feeling for how much it was impacted the rental income for the quarter.
Of course, we will see some.
Coming rental growth due to those projects and also others that will be finished, but I won't give you the exact figure.
Okay.
If you're looking at the ongoing project, then you could elaborate and make a back-port calculation on that one.
Okay. Maybe a fair assumption that they moved in in the middle of the quarter and then there will be some extra effect also in the fourth quarter.
Yeah.
Okay. More or less the same question for DHL and Boozt in the fourth quarter. Is it the same there that we could maybe calculate with-
Exactly
The same maths at maybe moving in in the middle of the quarter and you're getting an impact on the first quarter on these approached.
I think you're absolutely correct.
Okay. Is that a fair assumption to make or?
Yeah. Absolutely.
Okay.
That's the same logic.
Yeah. Okay. You also have an impressive utilization ratio. Is this the absolute ceiling or could you raise it even further or how do you look upon vacancies?
What I can say is that the market is still strong and just not going into the details, but we expect the market to be strong going forward.
My final question really regards your financial costs. We could see from the slide here that 45% of the loan portfolio have expiring interest rates agreements in one year time. With your discussion with the banks and so on, do you think that you could come down a little bit on your average interest rates in 2021?
I don't know if we're going to come down. I think it's going to be continued where we are at now. We don't see any big increase or decrease in the margin.
You presume.
Keep it flat.
Okay. Thanks for taking my questions.
Thank you.
Our next question is from Markus Henriksson from Pareto Securities. Please go ahead.
Hi, Benny and Sofie. I have three questions. First one is, the NOI margin in the third quarter. You mentioned last quarter that you have trouble to do some maintenance, so I'm just looking for near term for Q4. Do you still have trouble to do maintenance? Because I guess for next year that we should expect more of a normalized NOI margin, more in line with 2019, plus some efficiency.
In the short run, we know we are about in the same situation due to the COVID-19 pandemic. At the other hand, late on the last quarter is normally one with a slightly higher level. I think you could about the same levels, maybe a little bit up on that side. I do not see that normalized going forward. I think you could calculate with the levels that we have been at, looking the quarters.
Q4 still on the low side and a more normal year. We all hope for that during 2021.
What we need to take into consideration, of course, is that we have had a lot of new projects, new development, which means for the added square meters, it will be for sure lower costs. Exactly. Just calculate them.
Yeah. Do you still feel that there is some maintenance that you were not able to do this year and that will come next year?
I don't expect you to add it on top, so to say. It's just to see it more normalized.
All right. That's okay. I'm looking at the investment levels. You are at an all-time high here at trailing 12 months, almost SEK 1 billion. Many projects are finalized now short term. What do you think we should view? You have earlier years stated a level around SEK 700 million, now we're way above that. What's your view on future project pipeline and investment levels?
Total investment level, absolutely. We will aim for the same levels that we have been at. You know our priority first hand, developing projects on our own land and then we will top it with acquisitions. That is the plan going forward. When it comes to project related, we still aim for this + 700 [data for a year].
All right. That's clear as well. Last question is regarding the follow-up on the revaluations here during the quarter. You mentioned Tostarp and Sunnanå. Is that related to Blackstone Wihlborgs's sale? It's not so close but do you see more revaluations in the Öresund region than you see in your other parts of the portfolio during the quarter?
Yes, we do. We see a higher up on those locations. It's also regarding that the projects now are finished and the tenants have moved in. It's a mix of those two. Absolutely, the south of Sweden is hot.
There are no material positive revaluations in other parts of your portfolio if you exclude projects and the Öresund region?
Yes. There are, but those are the two biggest ones. Especially in Stockholm city area, we can see higher values as well.
The same logic applies to the dense areas, proximity of land, and projects.
All right. Thank you.
Just as a final reminder, if you do wish to ask a question, please press zero one on your telephone keypad now. It seems that we have no further audio questions, so I will hand over back to the speakers.
Do we have any email questions? No. We have no further questions then. Thank you all for this presentation and stay safe in COVID times. Bye.
Bye-bye, everyone.
Bye.