Thank you, and welcome to Catena. Please, slide number two. In today's presentation, we will start off by giving a short introduction to Catena as a company. We will then proceed to give a summary of the quarter, and after that, I give an overview of current standing and updates of growth initiatives within our company. Today, we'll then walk through our financials, and we will then open for questions. Next slide, please. In this slide, I would like to give the short introduction to those who are new to Catena. We are the leading logistics property company in Sweden with a modern portfolio located in key logistics hubs, which are key to deliver necessary goods which we enjoy in our everyday life. Property types we own are cross-dock terminals, distribution centers, and warehouses. We grow by acquisitions of new properties, property development, and efficient property management.
Recently, we expanded into Denmark, where we see great potential of our customer proposition. Adding to our standing properties, we have a large land bank located in attractive logistics hotspots where we can offer customers modern and sustainable properties, attractive locations, which is unique through the shortage of land within these areas. This, together with our long-standing history, has attracted a broad and attractive customer base within, for example, 3PL, e-commerce, and food service companies. Many of these companies you see here are growing at a high pace, and we are proud that we can assist them in growth journey. We have a strong financial position with attractive and resilient cash flow, which together with our investment grade rating, set the foundation for our continued sustainable growth. Next slide, please. We will now proceed to a summary of the latest quarter. Next slide, please.
During Q1 2022, we continued our growth journey by recording higher rental income driven by acquisitions, new projects, and indexation. We acquired two highly effective logistics properties from Halmslätten for a total property value of about SEK 1.5 billion. Both properties, which are located in Halmstad and Umeå, have Martin & Servera, Sweden's leading restaurant wholesaler and tenant. We are happy to be a long-term partner to them and support their growth journey ahead. During the quarter, we announced the first tenant on our new development area, Position Landvetter. Menigo, a leading food service company, will rent 42,250 square meters cold storage property, which construction will start later this year and will be ready for Menigo in 2024.
Lastly, we announced the very exciting news that WDP, the leading Belgian logistic property company, has become a principal owner in Catena through a direct rights issue. Their CEO, Joost Uwents, joins Catena board of directors, and both companies will explore potential collaborations and synergies. All in all, an eventful quarter where Catena has taken a big leap forward. Next slide, please. Here I will give short overview of our current portfolio and standing. Next slide, please. In comparison with the same period last year, we have increased the lettable area by 4% and the rental value by 7%, while keeping our high letting ratio of about 95%. This has been the result of a high pace with regard to new projects and acquisitions through the year.
I'm very happy to show an increase in our surplus ratio, which shows how effective our property management is, and I would like to compliment our team for continued great performance. Next slide, please. As always, we are very happy to have some of the biggest and most attractive customers within the logistics segment here in the Nordics. Many of these companies, particularly within 3PL and e-commerce, are supported by numerous global mega trends and are projected to grow their business for many years to come. We are happy to assist them in the journey and looking forward to growth with them for the coming years. Next slide, please. Here we will take a closer look at some of our initiative for further growth and events that took place during the quarter. Next slide, please.
Currently, we are active with a number of projects located in key logistics hubs in Sweden. Since Catena buy land at the early stage and work with the local municipalities with regards to the zoning process, Catena unlocks great value, which has historically led to an attractive yield on cost of about 2%-3% above market yields. While we are seeing inflation within construction costs and confidence, the margin of safety in our projects are still attractive. Next slide, please. As I mentioned before, we announced during this quarter the first tenant on a land area close to Gothenburg in Härryda municipality, Logistic Position Landvetter. Menigo, a leading food service company, lease over 42,000 square meters, and this will be ready in 2024. This deal showcases the demand for our land areas and for modern, sustainable logistics properties.
It also shows the speed and efficiency in our organization, where we got the zoning approvals in December 2021 and then announced Menigo as the first tenant in March 2022. The building will adhere to high sustainability demand with regards to biodiversity and energy efficiency, with us aiming for a BREEAM Excellent certification. We are very, very happy to welcome Menigo to the Logistic Position Landvetter. Next slide, please. Here we show the potential in the long term regarding our land bank. Size of the land bank is now about 5.2 million square meters and a total investment potential of SEK 60 million. Next slide, please.
Here we show the potential in near-term, maybe in 12-24 months, that sums up to about 300,000 new square meters of an investment of about SEK 2.5 billion-SEK 3 billion. Next slide, please. As I said before, during the quarter, we made significant acquisitions from Halmslätten Fastigheter AB. We acquired two properties, and they are in the Mölndal and Halmstad. It is a very, very strong and reputable customer, the Martin & Servera, and we are very happy to work with them and to support their future growth. Next slide, please. With regards to our letting activities, we continue to register a very strong demand for our properties. During the quarter, net lettings totalled SEK 35 million. Our maturity profile continues to be attractive with long maturity for our leases.
We are seeing that customers are interested in longer contracts. Lastly, our letting ratio remains high, standing at 95.2%, showcasing the strong demand for our properties. Next slide, please. As I mentioned before, we got a new strong owner in WDP, a colleague in Europe, bigger than Catena, but the same kind of case, with a very successful journey in terms of developing logistics facilities. We are pleased to welcome Joost to the board and the directed share issue amounted to SEK 2.138 billion. Next slide, please. I'm also very happy to report additions to our management team. In August, Johan Franzén and Annie Nyblom will join the management team. Now, I would like to give the word over to Sofie, who will comment on our work within ESG and walk you through the numbers. Go ahead, Sofie.
Hi, all, and thank you very much, Jörgen. Starting this quarter, we now show some key sustainability related goals together with our financial key figures in our report. This be able to follow the way to our goals to net zero emissions by 2030. To promote biodiversity, we made ecology inventories of 20% of our total land of approximately 8.7 million square meters. Both in existing properties and in our new projects, we actively work to promote biodiversity and the well-being for the people working in the area. Catena has also identified 100% of its operation as eligible in accordance with the EU taxonomy. Moving over to slide 19 for the financial update and further on slide 20. In this quarter, Catena continues its growth journey, driven by our property development acquisitions and a great demand for our properties.
Rental income for the quarter amounted to SEK 377 million, compared to SEK 329 million same period last year. Rental income increased mainly due to projects finalized and acquisitions. The increase in inflation had a positive effect and will, through the year, lead to higher rental income since most of our leases are CPI-linked. Net operating surplus increased 14% to SEK 295 million, compared to SEK 259 million in Q1 2021. The higher property expenses are related to our increased number of properties in our portfolio, which has over one year increased by 87,000 square meters in rental space. The property cost per square meter amounted to SEK 153 per square meter during the quarter, which is an increase from SEK 143 last year.
The reason for the higher square meter cost is the increase in electric prices, which the majority will be carried over to our customers. Lastly, we registered a 21% increase in our profit from property management, which is due to a higher rental income, higher letting ratio, and lower financial cost. Going over to slide 21. During the quarter, we registered a strong like-for-like for the quarter mainly by increased inflation, which due to our CPI-linked rental contract is carried over to our customers. Furthermore, our project developments and acquisitions add to the rental growth for the quarter, which together total 9%. During the quarter, we registered a one-off effect which was due to a tenant relocation to a new property ahead of its current leasing agreement, which triggered a positive effect of 1.9%. Going to slide 22.
Total interest-bearing liabilities totals SEK 10.8 billion, which is a small increase from same period last year of SEK 10.5 billion. The majority of our debt is through bank financing, which share is now 54% compared with 64% same period last year. The decreased share is mainly due to our MTN program, which we launched last year, which now totals 13% of our total interest-bearing debt. Looking at debt maturity, we currently renegotiating a larger share of our total debt the coming years. While financial costs are expected to increase due to increased market interest rates, we have over the years expanded our sources of financing and thereby have a variety of financial options to support our growth strategy. Going over to slide 23. As stated in the previous slide, Catena is in a strong financial position.
Our loan to value is approaching 40% with a decreased cost of debt, mainly due to a more diversified financing and our investment-grade rating that was achieved in 2021. With a strong interest coverage ratio, high hedge ratio, and available liquidity, we are ready to act upon our growth opportunities for the coming years. Going to slide 24. During the quarter, we acquired three land properties, two on our current project in Kånna and one in Logistic Position Landvetter for a total of SEK 482 million. There were no divestments made during the period. Regarding projects, we invested SEK 249 million during the quarter. The main sum went towards our current project in Hövdala outside Helsingborg, where we're currently constructing 15,000 square meters distribution center.
Furthermore, we invested in groundwork at our property Hyltena outside Jönköping and continued investing in our new development at Bunkargården in Helsingborg, where Catena is constructing a 16,000 sq m property built for PostNord. Going over to slide 25. For Q1, we added SEK 1.5 billion in value to our portfolio in comparison with last year. As stated in the previous slide, SEK 731 million related to acquisitions and CapEx. The remaining sum of SEK 757 million is related to unrealized property valuation changes, which is a 3% increase in comparison with our portfolio valuation in start of the year. Going to slide 26. Here I want to give the word back to Jörgen for closing remarks. Thank you.
Thank you, Sofie. Next slide, please. What should you take away from today? First of all, we have a strong rental growth during the quarter, driven by projects, acquisitions, and indexations. We took a significant leap forward through WDP partnership and Halmslätten acquisitions. We continue to execute on the project pipeline for an attractive growth, and we have a strong financial position and resilient cash flows ready to act on future opportunities. Thank you very much. We can go over to the Q&A.
Thank you. If you wish to ask a question, please press zero one on your telephone keypad. If you wish to withdraw your question, you may do so by pressing zero two. There will now be a brief pause while questions are being registered. Our first question comes from Markus Henricson from ABG. Go ahead.
Thank you. Good morning, Sofie and Jörgen. A few questions from me. How large was the extraordinary item on top line from the lease termination you mentioned in the report?
The one-off effect from
You mean the one-off effect was SEK 6 million.
SEK 6 million? Okay, perfect.
Yeah.
Looking at the like for like growth, were you able to get the full CPI figure across the board and then the rest driven by occupancy? Or do you see also strong renegotiations in certain regions where rents are up as well?
I think in this quarter there is in this like full package indexation of course. There is some as you mentioned, we have higher electricity cost that we hand over to the to the tenants that are included in this. There is also a letting job. We have we can see some signals that we have better confidence in in uplift in some regions regarding renegotiations, but they haven't been affected in the first quarter. Maybe in the coming quarters this year, some examples of that.
All right. Yeah. The mix effect from CPI and then occupancy, the rest should be from the electricity, as you said.
Yeah. In this quarter, yeah.
All right. Looking at the average rental level, it's around SEK 700 per sq m. Just curious how you think about project development. Nowadays we have witnessed huge yield compression in the logistics space, and we see several developers that are granting rental levels below SEK 500 or even below SEK 400 sometimes, and still they can keep their project margin. What's your take on this and the risk of falling rents in parts of your existing stock?
We cannot see any risk at the moment. The contrary we see with the cost inflation and so on, I think that it will be very tough for the developers to keep the low offers in the coming 12-24 months. You should also bear in mind our rent level is also included in the electricity and heating and so on that we have. In some cases, maybe you compare apple with carrots.
Fair enough. That sounds very reasonable. Thank you. Two more questions. The table you showed there on the near-term pipeline, very informative, but could you highlight in which of your different project sites where groundworks are about to be done? You mentioned that they are undergoing.
Yeah. I mean, we have groundworks are ongoing on all of those positions. It's Landvetter, Stockholm South, Jönköping, and Södertälje and Malmö. The logistic position on Ramlösa has not started yet. That will be after the summer, the groundworks. This business update near-term pipeline, it's when we can see that there is a potential of starting with the construction works.
Yeah. Right.
We will at the same time, of course then present a new rent agreement also.
Yeah.
This is the
Oh.
This is the near-term potential.
Yeah. Because in the report you mentioned that, for example, Stockholm South could start in Q2 2022. That means that.
Yeah.
You are able if you find a tenant, then you're able to start construction.
Exactly. Because we are good to go then because the groundwork can be completed in Q2 at Stockholm South.
Very clear.
for a part of it.
Okay. Thank you. Last question. Very curious about the partnership with WDP, and I believe that goes for the whole market. Could you elaborate a little bit on any potential drivers for the coming years that you would not have been able to do by yourselves?
I mean, from both sides, from Joost Uwents and me in the two companies, we can see that we of course are strong at different markets. Maybe we can meet up somewhere in between. We can also see that they have been very successful in developments. Maybe they have a better, higher efficiency in construction works than we have in our track record. At the same time, WDP sees that we are ahead in terms of ESG work and so on. There would be some potentials in collaborations going forward. As we speak now, it's in a very early stage. We are also very proud that we can get SEK 1, so to speak, from an operational player.
It's not a financial investment, it's more that they really see the value of the Catena company. That we are very proud of.
Understandably. Thank you. Those were my questions.
Thank you, Marcus.
Currently, there are no additional questions. As a reminder, please press zero-one on your telephone keypad to register a question. There will now be a brief pause to register questions. Thank you. There are no further questions at this time via the telephone line. I will hand over to the speakers. Go ahead.
Yes. We have received one question through an email. The question is, have you revised your target for yield on cost regarding your project development in any way, given increasing construction costs? We could say, of course, it's tougher today. The construction cost has increased. If we cannot manage to increase the rent level, there will be a bit lower margin, but still, it's a very attractive case for us. Next question here is, to what extent are the risk for cost increase and delays in ongoing projects in light of rising construction costs and lack of materials? We have not at the moment identified any bigger risks in delays. We have a quite good control over our ongoing projects and the new projects that we have presented at Menigo.
We have a quite long construction time in mind. At the moment, we feel very confident with that. The risk of cost increases is. That's a tough question. I would say overall, we have control of our ongoing projects. What will happen tomorrow? It's very tough in this market to forecast. Let's see if there is another question. Now, the next question is, you said that the NOI amounts to SEK 6 million. At the same time, you state some SEK 98 square meter in average rental income and 95% occupancy rate require, which implies SEK 359 million in rental income. This question we have to come back with an answer through email. It's a long question with some digits. I'm afraid it's tough to answer right now.
We get back to Tobias. Yeah. Yeah. Tobias Kaj from Handelsbanken has. Then we have no further question on the email, and I don't think there were any questions in the call. We would like to thank you all very much for today for listening in, and we all have a pleasant weekend.
Thank you very much. Take care.
Thank you. Bye.