Benny Thögersen. Please go ahead with your meeting.
Okay. Thank you, and please move ahead to slide two. I would like to welcome you all to today's presentation of Catena and the interim report, January, June 2020. Today, we'll be a little bit larger team than normally, and I would like to introduce Sofie Bennsten, our CFO. We have Anna Wallander , our sustainability manager, and Peter Andersson. Please move on to slide three. Here you see the content, and we will walk you through the topics, and we could then move on to slide four. Some highlights. Against the backdrop of the ongoing coronavirus outbreak, Catena delivered a strong and resilient second quarter, with key numbers overall satisfying. The ever so critically important supply chain industry, the swift moving change in consumption behavior in combination with a strong and healthy mix of customers, have yet proved to be a favorable source of factors in this otherwise challenging environment.
In the second quarter, several projects became finalized, and I'm glad to find the pace of ongoing investments steady. Sentiment within markets had fluctuated during the quarter, and even though concerns about the economic recovery have amplified during the last part of the quarter, investor sentiment has proved to be strong enough to keep leads down. Next slide, please. So far, the backdrop of COVID-19 has limited impact on Catena regarding revenue. In total, SEK 7 million was the expense of rent loss during the first half year. We entered the COVID-19 crisis in a position of financial strength, and we feel comfortable about the overall financial situation. As investors and economists are trying to assess mixed data on the global economy amid concerns over the coronavirus spread, we continue to explore ways to address the challenges faced by our communities, customers, and employees. Next slide, please.
Here, we will move over to the results and balance overview, and I will hand over to Sofie.
Thank you very much, Benny. We're going to slide seven and talk a bit about our income statement. Our net operating income was 10% higher year to date compared with the same period last year, and income from property management was 13% higher. During the period, our rental income was affected by a positive one-off. It was related to an early redemption of rental contracts in the amount of SEK 14 million, and a SEK -7 million was related to credit losses on receivables. Property expenses were approximately SEK 10 million to SEK 14 million lower during the period, influenced by a mild winter in combination with lower maintenance measures due to the coronavirus and the fact that we have had limited access to some properties. Changes in property value were reported slightly positive, above all as a net effect of rental negotiations and finalized projects.
Going to slide eight, statement of financial position, we can comment that the balance has expanded by approximately SEK 1.7 billion since last year, where unrealized value changes on properties were SEK 485 million and investments amounted to SEK 952 million. Net asset value was reported at SEK 208 per share, an upturn by 14% year- over- year. Now, we'll go into the operational review and handing over to Benny.
Please move on to slide 10. Rental growth. The rental income amounted to SEK 622 million in the period. The total growth in rental income was 6.4% year-on-year. Project developments contributed 2.2% and net transactions with 1.9%. Like- for- like, the growth contributed 1.9%. There was also one-off effects related to prepayment of an early lease expiry, as well as reserve losses, net amounting to 1.2% in the period. Slide 11. Share of income retained. Our strong first quarter operating performance was accomplished by an equally sound second one. Before value changes, we retained 58% of all income during the period. Historically, this is a high report number, in part influenced by the pandemic and the limitation it has posed visiting some of our properties. Our target is to maintain a level above 50%.
Overall, I feel we are very well positioned given the current situation, and I have great confidence in our team and our strategy going forward. Slide 12. Our strong performance is reflected in our customer and specifically our long-term focus on top consumption markets. This slide is displaying some industry segments where our portfolio has experienced growth, and for some of these customers, even in the midst of this ongoing pandemic outbreak. With over 40% of rental value being represented by well-recognized firms within logistics, transport, and recycling, it provides for stability. Another 23% is related to food and beverage, where for some customers, 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 13. May I hand over to Sofie?
Yes. And on balance date, our property value was appraised at approximately SEK 7.2 billion, with an EPRA NIY of 5.9%. During the period, several transactions have been spotted in the market, indicating unmodified yields since the end of 2019. Going to slide 14, Benny.
With rental market, with several ongoing projects related to efficiency improvements, we continue our focus on raising the quality in our portfolio, translating in the growth of rental value per square meter. So far and generally, occupier demand has been characterized as fairly robust, even in the midst of the pandemic. Rents have been held broadly steady during the period with geographical discrepancies. With overall letting rating of 96%, we currently feel we are in a comfortable position. Slide 15. The quarter provided for SEK 22 million worth of new leases and a net of SEK 19 million. By example, DHL has obtained access to an extended space of 2,000 sq m in Sunnanå, Malmö, and PostNord has obtained access to a newly constructed terminal in Katrineholm, also 2,000 sq m. The maturity of our contracts remained well-distributed over time, averaging approximately five years.
And I would also like to add that we now have a full house at the multi-tenant warehouse down in Sunnanå. That happened after the quarter. Capitalization, please, Sofie.
Okay. Thank you very much. Going to slide 17. We maintain our cost of debt at 2.4% on average, and LTV was reported at 55.7%, down 30 basis points from a year ago. Equity ratio was reported at 34%, with sufficient headroom from our minimum target of 30%. Going to slide 18. For funding structure, during the first half year, we have, among other things, utilizing our backup facility to cover capital market funding at maturity. The share of financing coming from traditional bank loans amounted to 85% on balance date. Specifically, capital credit markets have witnessed a higher degree of stress the first half year, with wider spreads than what would typically have been the case with channels through the banking system. Ongoing discussions with our creditors are going well. On balance date, we reported a debt maturity of 2.4 years and an average interest maturity of 3.4 years.
As stated in our first quarter report, we have entered new interest rate swaps and prolonged old ones at a total nominal volume of SEK 2.3 billion, the result being a longer interest maturity kept at a lower interest rate. We entered the transactions when interest rates were hitting record low levels. Going to slide 19 for capital deployment and moving on to slide 20, and Benny.
Thank you, Sofie. Capital deployment year- to- date. During the first half year, we have invested a total of SEK 878 million. Three properties were acquired, totaling over SEK 307 million and adding almost 30,000 sq m and SEK 20 million in rental value. Development capital expenditures amounted to SEK 571 million. Slide 21, please. Projects in progress. On balance date, we have six larger projects under construction, pre-let to customers such as PostNord, DHL, Boozt Fashion, Nowaste Logistics, and Seafrigo Nordic. With only minor adjustments, all of our projects are on schedule. Overall, there is over SEK 530 million left to invest during the existing development pipeline, which, when finalized, will add another 110,000 sq m to our portfolio. And then I'm very happy to introduce Anna, who will talk a little bit on our focus on sustainability. Please, Anna.
Yes. Thank you. I would like to start on slide 23 and present our key sustainability figures for the first half of 2020. As you can see, we are continuing to reduce our energy consumption per square meter. From last year, it's down by 6%. Most of our energy is fossil-free, and we are actively working with installation of solar power as well and planning many more installations on our roofs. We have reduced our greenhouse gas emissions compared to the same period last year with 15%, and we are working with our environmental building certification and currently working on 10 more to be certified with Miljöbyggnad, and I would like to take this opportunity to talk a bit more about Miljöbyggnad, as some of you might not be so familiar with this certification standard.
If we move on to slide 24, you can see on the left-hand side, there's some key facts about Miljöbyggnad 3.0, which is the one we have been talking about a lot, the one we're working with now. It's a tool to create sustainable buildings, primarily directed at new buildings, and on the right-hand side, you can see a new certification standard that I would like to present. It's called Miljöbyggnad iDrift, meaning Miljöbyggnad in operation, so it's for buildings that already exist. It was released a couple of weeks ago, and it's a tool to improve the existing portfolio, and the Sweden Green Building Council released this certification standard because they saw that most companies were focusing on certifying new buildings but didn't do anything about the existing portfolio, and, well, obviously, the majority of buildings already exist and will do so for many decades to come.
This standard is very much needed. As you can see, it's also possible to certify existing buildings with Miljöbyggnad 3.0, and we're currently doing so with seven existing buildings. But it's quite complicated. It's time-consuming, and it's not always possible if you didn't build according to the manual from the start. But most importantly, it doesn't always add that extra value that we're looking for from a sustainability perspective. So if you apply this manual on a building that's been in operation for a couple of years, it doesn't get the same value as if you would have done it from the start. And we're currently working with one project where we're applying Miljöbyggnad iDrift. And from our experience, we can see that it's much more appropriate for existing buildings and get that extra value that we're looking for.
So just to summarize, we will continue with the project as our progress, but then the best way forward is to certify all new production with Miljöbyggnad 3.0 or 3.1 and existing portfolio with Miljöbyggnad iDrift in order to get the most out of both standards, both from a sustainability and also from an economic perspective. Thank you. That's all from me, and I'll go back to Benny.
Thank you, Anna. Please go on to slide 26. I would like to address a few voices from the market during the second quarter. PostNord announces that e-commerce is growing at a record pace with 44% during April in comparison to last year. This is, of course, due to corona. Element Logic, which is one of the automation providers of AutoStore, is announcing about Boozt their efforts to expand the world's largest AutoStore equipment and thereby cementing their position. In June, Boozt also made an advisement on its earnings to significantly increase in the light of accelerated online shopping. Cainiao, an affiliate to the Alibaba Group, announces their efforts on doubling the floor space of its overseas warehouses to 2 million sq m.
The point is that the signs of the transformation supply chain is found everywhere, and it's important for us to stay ahead of this changing environment to be able to deliver the best possible service to our customers. Some cases. Slide 27, please. During the period, several smaller volume projects have been completed. By example, we completed the construction of a terminal adopted for PostNord located in Katrineholm in proximity to the Stockholm area. The investment amounted to SEK 36 million and provides a yield of approximately 6.5%. The lease agreement is for 10 years. 28. Next case. In early April, we signed an agreement to acquire a plot of land in the municipality of Jönköping. The plot covers approximately 190,000 sq m and is well located in one of Sweden's largest logistics sites adjacent to standing properties we already own.
The position is excellent and allows transport to several metropolitan regions within one day. The transaction is conditional on a detailed plan gaining approval. We expect the site to be ready for construction within two to four years. Next slide, please. An investment case in Åstorp. In May, we announced the acquisition of a land plot from the municipality of Åstorp with a signed agreement to construct and lease a 10,800 sq m distribution center to Seafrigo Nordic, an international third-party logistics company that focuses on the handling and storage of food. The rental agreement signed has a duration of 12 years with an estimated net operating income of slightly more than SEK 9 million a year. The facility will have an excellent location next to the E4 highway, not far from Helsingborg in the south of Sweden.
Construction is scheduled to become finalized during the summer of 2021, and the facility is expected to be certified in accordance with Miljöbyggnad Silver, and a photovoltaic cell facility will also be installed on the roof. Slide 30, please. Potential future development projects. The search of promising land continues along with ongoing detailed development plans in progress. On balance date, we hold a potential of about 5 million sq m of land where almost 1 million sq m are consolidated and with development plans in place. The rest of the land bank is conditional on various contractual agreements, such as detailed development plans having to gain legal force. And that was all for today's presentation, and I will now invite you to the question and answer session. Please go ahead.
Thank you. If you do 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 to cancel. Our first question comes from the line of Staffan Bülow from ABG. Please go ahead.
Yes. Good morning, and thank you for the presentation. Staffan Bülow from ABG here. I have a couple of questions. To start off, you mentioned SEK 7 million of rental income reduction from reserve credit losses as a consequence of COVID-19. Are there any other COVID-19 rental income effects, such as discounts or granted deferrals for the first half of 2020 worth highlighting?
No. We really don't have that much other things that affect us. Of course, we've been helping our customers with the cash flow, many of our peers. But otherwise, in our customers, we don't see that they are that much affected. So it's pretty much the losses that we have reserved for and that we help them with cash flow or have been helping them with cash flow over the first and second quarter.
Okay. Thank you, and have you seen an increased demand of the new warehouses and logistics facilities from your existing tenants since the e-commerce sales have grown quickly the last months?
Simple answer, yes, and due to the logistics, we know that there is much more e-commerce that we have moved ahead maybe one, two years compared with what's expected growth of the e-com in Sweden, and for every e-com order, we need more square meters, so we are changing, actually, store square meters to warehouse and logistics terminals square meters, so the answer is yes.
Given that answer, are you planning a lot of starts of projects for the second half of 2020?
We have good-looking sales funnels, and we know due to the corona, they have not been put at the same place as we may have expected, but there will be more to come.
Okay. And regarding property valuation, if I understand you correctly, all value revision will lead to improved cash flows or projects and no yield compressions.
Yes. That's correct.
Okay. That was it for me. Thank you for taking my questions.
The next question comes from the line of Markus Henriksson from Pareto. Please go ahead.
Good morning, Benny, Sofie, and Anna. I'm looking into the maintenance costs. What do we expect there for the second half? We had two quarters in a row now with less since you are trying to not spread the virus.
It's a little bit hard to have an outlook on that one. We expected that we will, in a little bit higher, what you say, pace get into our warehouses and terminals. But I do not foresee any major changes.
All right. So not a normalization, more a little bit higher than in the first half, but not normal compared to last year, for example?
Yeah. Pretty much like that. This is your words.
Looking at like-for-like growth, what could we expect there going forward, looking at and comparing it to the past quarters?
Yeah. We cannot predict that. But on a very generic level, you see the same pattern going into the very dense areas. We do see higher rent levels than looking at the more rural areas. It's more like flat. That is same as usual.
All right. All right. Lastly, looking at zoning plans, could you elaborate a bit more on the larger ones, what we can expect for the different schedules here with Stockholm Syd, for example, and some of the other larger ones when they could be approved?
We have good connections with the municipality. Now, a little bit joking. Things are going pretty well in Nykvarn and with the municipality of Nykvarn, so to tell you, so we are moving forward, but as you know, the logic behind it could always be what you call it, not overruled, but aggregated up to other parties in the systems, but there we are quite faithful that we will have a zoning plan within the next year or two. Absolutely.
Okay, and for the other large one, can you fill in a bit more there as well?
I think you have a table within the annual report where you could see the status of the different plots that we have, but for example, we could expect things to go a little bit faster in Gothenburg and then better if Trafikverket is on our side, and also, I think down in Malmö and Sunnan å , it shouldn't take that long either. We are talking about single years.
All right. All right. Lastly, if we look at acquisitions ahead, are you mainly focusing on Denmark, or what kind of objects are you looking at, and what regions are more interesting for you to expand in?
Denmark is absolutely interesting for us. We have communicated that for a time now. And looking at the yields and what type of capital that is entering Sweden, we need to choose, and we would like to go for those that are a little bit, what you say, acquisition where Catena could, in one or another way, adding value. For example, if there are any cases maybe included with automation or things like that, going head-to-head with the pension funds capital and going for acquisition on 4.5%. That is not the decision we have Catena.
Okay. Thank you for taking my question.
Thank you.
Just as a reminder, if you do wish to ask a question, please press zero one on your telephone keypad now. As there are no further questions, I will hand it back to the speakers.
Okay. I would say thank you for participating in this presentation and looking forward for a good Q3. Thank you.
Thank you very much.
This now concludes.