Welcome to the Cibus Q3 2024 report presentation. For the first part of the presentation, participants will be in listen-only mode. During the Q&A session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. If you are listening to the presentation via webcast, you can ask written questions using the form below. Now, I will hand the conference over to CEO Christian Fredrixon and CFO Pia-Lena Olofsson. Please go ahead.
Good morning, everyone. Thank you for dialing in, and for those of you listening at a later time, thank you for listening. Welcome to Cibus' Q3 2024 results presentation. Presenting today, as always, from our Stockholm office is our CFO, Pia-Lena Olofsson. We'll be hearing shortly, and I, Christian Fredrixon. So, what have we been up to this quarter? Quite a lot, actually. Every quarter is busy for Cibus, but this one has been especially busy. We focused on delivering shareholder value in several ways this quarter, including talking from the left to the right here. We carried out a directed share issue in September. We used the board's 10% mandate and issued approximately 5.7 million new shares. That was done at a 20% premium to NAV, and we thank our investors for their support in our growth ambitions going forward.
Talking of growth ambitions, we see attractive acquisition opportunities in the market, and we have a strong pipeline, which we've been building since early 2024, and we continue to add on it daily. So far, in 2024, we have made acquisitions for about SEK 500 million . That's about EUR 43 million , whereof about SEK 410 million was done now in the second half of the year. And then we, of course, are using the cash resources from the directed share issue for further acquisitions going forward. That's the plan. During the quarter, we've continued to increase our earnings capacity per share. That's the fifth consecutive quarter.
We have managed to increase earnings capacity, which we're very happy about, but we're calculating that, you know, on the old number of shares, i.e., before the directed share issue, and we're doing that because we haven't, at the end of the quarter, had time to deploy new funds from the directed share issue on the 10th of September. During the quarter, we have also been working actively with refinancing and hedging. As you know, we aim to create stable cash flows, and we've actively used the low interest rate dip we saw during Q3 to enter into new hedging. So we've hedged about EUR 84 million of interest rate hedging. Among other things, we've done two new swaps at 1.86% and 1.99% fixed rate, respectively.
We have also refinanced the bank loan of EUR 83 million with a senior bank, and that was at a lowered margin than we had previously for this loan and portfolio, and that old margin was from 2020, which was pre-COVID, and also was at an attractive or competitive bank market at the time. So I think this proves that the banks are supporting us and find our asset class and our company an attractive borrower. During the quarter, we've also paid out the quarterly dividends, paid out on a monthly basis. So this quarter's share of the EUR 0.9 per share annual dividend. So we paid out EUR 0.22 per share during the quarter. So we've kept ourselves busy. So a bit of some financial summary for the quarter. Rental income increased about 2%. Net operating income increased about 3%.
That's excluding non-recurring income in the comparative quarter from Q3 2023. Profit for property management was about EUR 14.2 million, excluding non-recurring items and FX rate changes. Profit for the period was a - EUR 5.5 million, mainly due to unrealized changes in property values and, of course, a big movement in derivatives moved. As you know, we have a large share of our rates hedged. So my favorite slide, or one of my favorite slides, it says exactly what we do: convert yield, and that's what we continue to do. Then a bit about Cibus. We convert food into yield. We're a real estate company focused purely on daily goods properties. We aim to create stable cash flows. Listed in Stockholm since 2018. We have a market cap of around EUR 1 billion as it stands now.
We're the only listed pure daily goods real estate vehicle in the Nordics. We have several non-listed and private real estate vehicles, many of them institutionally owned, especially in Sweden, which I'll get back to later. We've grown from Finland, and they've grown into Sweden, Denmark, and Norway, and on the map, you can see the new additions to our portfolio during Q3 and the acquisitions we've done post the end of Q3. I'll tell you more about those later. Our expansion timeline from a Finnish supermarket portfolio company in 2018 to a Pan-Nordic player where we are today, and then we are back in acquisition mode since early part of this year. Just to flick through some of our around 450 assets, we've selected a number of photos here from each country. In Finland, these are some of our approximately 260 assets in Finland.
Some examples of our approximately 40 assets in Denmark. And these are figures from year-end, by the way, our year-end report. Some examples of our assets in Sweden. Not always that sunny in Sweden, unfortunately, not year-round. And some of our examples of our smallest portfolio in Norway. We have about 20 properties. And then moving on to the acquisitions we've done this year. So far this year, we've acquired properties for about SEK 500 million. That's about EUR 43 million. All transactions which we do are cash earnings per share accretive transactions. And that means that the yield we receive is higher than our financing costs, including costs on dividends. We've acquired 15 assets, and the WALT for this portfolio of assets that we buy on average is about nine years.
Total area about 32,000 sq m and an average price of about EUR 1,350 per square meter, which is a low average price. Then moving into a bit more detail on each of the portfolios per country, we've acquired in Denmark for about EUR 14.5 million. It was a sale and leaseback from the grocery chain Dagrofa, which is one of our largest tenants and the largest tenant in Denmark. These assets were five Aldi stores. Aldi is a German retailer which withdrew from the market after many years, withdrew from the market in Denmark after many years, and most stores were sold to Rema 1000, but a number of stores were due to competitive reasons sold to other grocery retailers. For example, these were sold to Dagrofa, which has then turned them from Aldi stores into their own concept stores, Spar and Meny.
Average size, 1,280 sq m, which is kind of a supermarket size in Denmark. Newly converted, as mentioned, with long leases, 100% daily goods, and an acquisition price of about EUR 2,300 per sq m. And I think the two main takeaways from this acquisition are that it was a sale and leaseback that proves that we are an appreciated partner to our grocery tenants and a liked owner for their very important operational infrastructure, which is, of course, their store network. I think this transaction also proves that the stickiness in locations for our kind of real estate, our supermarket real estate, that when a chain or a grocer leaves, as Aldi did in this case, in most cases, someone else steps in. If you had a good retail and grocery location, then what the actual sign is, that doesn't really matter that much for the local customers.
They will find their way to this store again if the new tenant is a good and active grocer who has and can support, and their offering is suited for the local market. So I think those are the two main takeaways from this deal, of course, and also that we can do nice cash earnings per share accretive transactions in Denmark. Moving on to Finland. In Finland, we have bought three modern or newly built or about to be built properties in urban locations, 5,500 sq m, average size of 1,830. The average size is pulled down a bit due to the small urban location in Helsinki, which is the K-Market Nihti. As you can see there, that's a data-generated picture, but the building is actually built now. That's an urban redevelopment in central Helsinki.
It's an old harbor area now converted into a very attractive waterfront residential location with railbound traffic. Looking through this as a portfolio, the WALT is high, almost 13 years, and that's usual when you build a new store. It's usual in our markets to get a 10- to 15-year lease, and then that after a while reverts to maybe a three- to five-year kind of rolling lease. 100% daily goods, acquisition price of EUR 2,700 per square meter, which is a slightly higher price, but of course, newly built assets. Looking at the three, K-Market Nihti we've talked about, S-Market Imatra Imatra in Swedish, that was built in 2022 for S-Group. Then the third asset is an asset in Kauhajoki in Södra Österbotten, a property which is being built right now and completed in 2025.
And I think the main takeaway from these assets we bought and this acquisition is that we have the opportunity to buy modern assets for us at attractive yields and cash earnings per share accretive levels. And speaking of long leases, I think it's important to stress that long leases are nice and new, and everyone likes new shiny assets, but that doesn't mean that we're shying away from shorter leases. Our average WALT is five years and has been throughout the company's history, and we foresee that to be stable over time because what happens in a grocery location is that even if leases become a bit shorter after a while, then the market is in equilibrium. The local market has found its place. The local supermarket has found its place. Customers find their way to the store.
Competitors know what other competitors are doing, and things settle down to a very stable turnover development. That's my picture of most locations in the Nordics for supermarkets and grocery. Then we've carried out one acquisition in Sweden for about EUR 6.5 million. It's a modernized City Gross, which is a privately held chain which was recently acquired by the listed retail and grocery group Axfood. City Gross market share in Sweden was about 3.7%, but now taken over by Axfood. And Axfood have said that they are looking to keep the City Gross brand, and they've been looking for a hypermarket format in their portfolio. Axfood has been very successful lately with especially the Willys concept, which is a discount food location and concept, and they've been looking for a hypermarket concept for quite some time, which they've now managed to get their hands on.
It's a large asset, almost above 11,000 sq m. City Gross is the largest tenant, but there are other tenants in there as well. There's a WALT of almost six years, but City Gross is in a much longer lease than that, and the acquisition price was very low, as seen here, EUR 480 per sq m, and that's a combination of low rents and high yield. It's our first hypermarket in Sweden, which increases our diversification in our Swedish portfolio, and the main takeaway here is that a very interesting level of accretiveness for us, and there's more potential in the building and on the site as it has a large land plot, so this slide, many of you will recognize. This is our properties at the end of Q3, 452 properties, property value of approximately EUR 1.8 billion.
Our earnings capacity has increased, as we mentioned, to EUR 115.1 million and just shy of a million sq m of leasable area. Our tenant share of NOI hasn't changed much, but in each country, we still have the largest grocery tenants in each market as our tenants. We talk about we create stable cash flows, and what do we mean by that? Well, it means that we on every single line, if this were an income statement, we try and create stability. So we focus purely on daily goods properties, which are a non-cyclical business type, a business area. We focus on daily goods tenants. 84% of our rental income is from daily goods tenants. 97% of our properties are anchored by daily goods tenants, and when we say anchored, it's most often the only tenant.
As you see, our average size of our assets is 2,200 sq m, which is a supermarket size, and most of the other rental income is from something adjacent to a supermarket, i.e., maybe hairdressers, dry cleaners, or a flower shop or something similar, which you'll find in kind of adjacent to a supermarket, alcohol monopolies which we have in the Nordics, or a pharmacy, etc. 99% of our rents are linked to CPI, and we have a steady WALT, as mentioned, and we have a very stable store location stability, and then we also create stable cash through diversification, geographical diversification within each country. In four countries, we have a very diversified portfolio when no asset is larger than 1.7% of our net operating income, and then we have a small average property size.
On the cost side of things, we have 90% of our leases are either net or triple net, which shelters us from property cost increases. And then on the financing side of things, 97% of our interest rate hedging is interest rate hedged, and we use diverse funding sources. Earnings capacity, we are proud and happy to show that our earnings capacity per share has continued to grow now for the fifth consecutive quarter, and it is now EUR 0.99 per share when counting the previous number of shares before the share issue on the 10th of September. And why is earnings capacity growing? Top line indexation growth, which Pia-Lena will get back to a bit later.
The outcome of the bond refinancings we did earlier this year, where we have started to call and repay the old, more expensive bonds, and then now we're also carrying out cash earnings per share accretive acquisitions. In these results, we had our Swedish acquisitions, which we did in May in the figures. Looking at our share price performance, happy to see the share price performing so well, up 55% since our Q4 report in early this year. Very liquid share, SEK 51 million traded daily and about 2,500 transactions per day. Looking at our shareholder list, it is more or less unchanged. You recognize these names, both well-known institutions, equity funds, index funds, and real estate equity specialists, along with a few generalists we see starting to pop up in our shareholder list, and we're proud to have almost 54,000 shareholders.
So over to Pia-Lena and the financial overview.
Thank you. So let's start with some of the significant events during the quarter. The 22nd of July, we updated our MTN program, which we do every year. The 13th of August, we announced that we redeemed our September 2025 green SEK bond as of the 6th of September. The 10th of September, we completed our directed share issue, raising SEK 927 million. The subscription price was SEK 162 per share and was to a 20% premium to net asset value EPRA NRV. The 23rd of September, we acquired five grocery stores in Denmark, and after the period, we have acquired additional properties, three in Finland, which we announced the 23rd of October, and one grocery store in Sweden, which we announced the 29th of October. We have some key figures for the quarter. Rental income grew with 2% to EUR 30.4 million.
Net operating income grew with 3% to EUR 29.2 million , if you exclude the non-recurring income from the Q3 2023 figures. We have called two out of our three bonds that mature 2024 and 2025. Until the last bond is called, we have doubled interest costs since the bonds were refinanced in advance. The interest cost for the old bonds amounted to minus EUR 759,000 during the third quarter, and this is not classified as a non-recurring item. So when all the bonds are called, we will not have this cost. Profit from property management in Q3 2024, excluding non-recurring costs and exchange rate effects, amount to EUR 14.2 million .
If we go into details, as said before, the Q3 2023 figures include a non-recurring income of EUR 2.7 million, which was attributed to compensation from product developers in Denmark, as well as compensation in connection with a canceled acquisition in Finland. Net financials include a non-recurring expense of minus EUR 527,000 for early redemption of a bond maturing in September 2025, as well as an exchange rate change of minus EUR 475,000. Unrealized change in property value was minus EUR 6.3 million, and it's attributed to Finland and Denmark. And the main reason, however, why we have a negative earning for the quarter is due to the unrealized changes in value of the derivatives, and this was due to sharply falling market interest rates at the end of the quarter.
Our current earnings capacity shows a net operating income of EUR 115.1 million, which is an increase of 2% since 1st of October last year. Profit from property management minus the expense for the hybrid bond and adding back the non-cash items amounts to EUR 56.5 million or EUR 0.99 per share, which is an increase of 6% since 1st of October 2023. Earnings capacity has increased with EUR 0.02 per share since last quarter. Looking at the net operating income in a comparable portfolio, indexation and other increases amount to 3.7%. Indexation, though probably in a lower pace, will increase net operating income in a comparable portfolio going forward. The other segments is countries. Finland is still the largest market with 68% of NOI. Sweden and Denmark both contribute with 14% each, and Norway is the smallest market with 4% of NOI.
Looking at the balance sheet, property value was slightly below EUR 1.8 billion. Secured debt was EUR 886 million, giving a loan-to-value on secured debt of 50.2%. Unsecured bonds were EUR 212 million, giving a net loan-to-value of 54.6%, which is below our finance policy target of between 55% to 65% LTV. LTV is expected to rise as we grow through acquisitions. Other net assets include our large cash position of EUR 134 million at the end of the third quarter. Net asset value EPRA NRV was EUR 749 million or EUR 11.9 per share. The WALT continues to be stable around five years and was 4.8 years at the end of the third quarter. As you've seen, as Christian said, the acquisition we've done after the quarter has longer WALTs.
If we look at funding, bank financing continues to be the largest part of Cibus external funding, which close to 80% of funding. The average credit margin was 1.6% at the end of the third quarter. During the quarter, we have refinanced a bank loan of EUR 83 million at a lower margin. The new margin is in line with the average credit margin. Other bank loans that mature within 12 months are expected to be refinanced in the fourth quarter this year. Regarding bonds, we're able to call the third and last bond that matures in December 2025, which has a margin of 7% per year or more. After it has been called, the next maturity for our senior unsecured bond will be in February 2027. For Cibus, stable cash flows are very important.
Cibus has a high degree of hedging, and during the third quarter, we made use of the inverted interest rate curve and did additional hedging of EUR 84 million at attractive levels. Even if it looks like market interest rates are falling, we do like stability. Considering if there would be an increase of the market interest rates with one percentage point, this would affect Cibus profits with -EUR 660,000 on an annual basis. Looking at our key credit metrics, net LTV was 54.6% and net debt to EBITDA at 9.3 times. These metrics are lower due to the directed share issue that was made the 10th of September. These ratios, as we have said before, are expected to rise as we grow through acquisitions. Interest coverage ratio is still stable at 2.2 times, and this is due to the high degree of hedging.
Cibus generates stable cash flow so we can pay out dividends on a monthly basis to our shareholders. Cibus receives its rents on a monthly or quarterly basis in advance, and part of this cash flow is distributed to our shareholders. Dividend yield was 5.8% with the share price at the end of the quarter, which was SEK 176.10 per share. Over to you, Christian.
Thank you, Pia-Lena, and then looking a bit into the future, but let's start by looking at the market for our tenants, where they are right now, and the competitive landscape they have every day, so just looking at the grocery market in the Nordics, one can see here that there are, in each market in the Nordics, there's three main types of retailers or grocery tenants. There are the independent retailers like ICA, Kesko, Dagrofa, and Rema 1000.
Then you have the cooperatives, COOP, who are present in all markets. In Finland, they're called S-Group, the cooperative. And then there's the integrated chains like Axfood in Sweden and Lidl in several countries. So that's the kind of tenants that we have and who we let our buildings to. And characteristics in these markets are that the markets are dominated by a handful of large daily goods chains, operators, who have bargaining power towards their suppliers, strong store networks, and efficient logistics chains. Because if you boil down grocery retail in a very easy way, and I'm sure the retailers wouldn't agree on me that it's this easy, but what it's about is buying things and procuring items cheaply, transporting them through a logistics chain in an efficient manner and price-effective manner, and then selling the goods at a good margin in an extensive store network.
That's really what grocery retail is about. And that's so store networks are, of course, very important for all grocery players. And what's important to say is that even if there's a few players with high bargaining power on the procurement side and on the store network side of things, there's very high competition on a local store level in all of our markets. They're very mature markets towards the customer. Customers can choose from in very, very many locations for almost a handful of grocery stores in their local market. Another trend we also see is that the grocery retailers seem to be winning the race for online shopping for grocery.
It seems to be very difficult to make money and good profits and sustainable profits if you are a pure online player, as we've seen a number of the restructurings going on, for example, in Mathem right now in Sweden. But the grocery players themselves seem to be managing to make at least profits, or maybe if they're not making money, then they're still supplying the omnichannel experience to their customers because they have a store network, they have the logistics, etc., which seems to be the way that works. Click and collect seems to be a good way forward, and also home delivery from stores seems to be a chosen route for e-commerce in all but the very, very most urban locations and densely populated capital regions, so that was a bit about the market.
For us, the future outlook on ESG is still very important, of course, for us. Within daily goods, sustainability is high on the agenda for consumers, retailers, and for us. We're working towards our CO2, our carbon dioxide neutral target in 2030. Where we feel we can do the most good is energy consumption. We have very many net leases, as you know, so we're working side by side with our tenants for energy efficiency and solar production and installing more and more solar panels. To the right, top right, you can see a picture of our property in Boxholm, where we have our tenant, Coop, who is buying the electricity created from the new solar panel production plant on the roof. That's about 71,000 kWs per hours per year in production from that site. Within ESG, we're also working on the reporting and financing side of things.
We've completed our double materiality analysis, and we aim to include CSRD reporting in our 2024 sustainability report. We have our green framework and sustainability linked framework in place, and the new bonds we've issued during 2023 have been under the green framework. As mentioned before, grocery, real estate, and grocery is an important social infrastructure. Daily goods are an important part of a sustainable and resilient society. Getting people food on the table in all times is very, very important, but it's also a physical meeting place in the modern world. It's a place where mental health is upheld and where you can meet people and have a chat, and an interesting phenomenon we see now amongst a couple of chains is the slow cashier. So it's a cashier where there's a sign which says basically, "Here, you can take it slow. No need to rush.
Have a chat with the cashier before you leave." That kind of shows the importance of the store network and grocery retail. And we aim to create accessible and safe marketplaces together with our tenants as part of the social infrastructure. And then moving forward, the last slide for today. Overall, we want to and we continue to grow earnings capacity per share, not only by acquisitions, but acquisitions is a big part of that, of course, going forward. But we work in all parts of the business in order to create more earnings capacity per share. We're carrying out cash earnings per share created transactions. We have a strong pipeline with interesting opportunities in existing markets, and we're actively evaluating new markets in Continental Europe.
We are looking at the markets which remind us of our Nordic markets, i.e., markets where there's a handful of strong tenants and retail players and grocery players who are fighting it out over the customer's market share. We continue to work with balance sheet optimization, refinancing, and hedging. As Pia-Lena mentioned, looking to refinance bank loans. We're working on that right now. I feel there's a strong interest from senior banks for our assets and to finance us. We have competent, experienced employees who are taking action daily, and we're committed to deliver shareholder value by converting food into yield. That was the final slide for us. Time for some Q&A if there are any questions. Thank you.
If you wish to ask a question, please dial #5 on your telephone keypad to enter the queue.
If you wish to withdraw your question, please dial #6 on your telephone keypad. The next question comes from Svante Krokfors from Nordea. Please go ahead.
Good morning, Christian. I'm Pia-Lena, thank you for the presentation.
Good morning. Good morning.
Start with the question. You had some divestments in the quarter. Could you give some details on that?
Yeah, sure. There were four small, non-strategic, empty buildings in Finland that we divested during the quarter at book value. Yeah.
So something like below EUR 10 million total, or?
Yeah, very small.
Yeah, they're very small. Empty assets which have been empty for quite some time.
Yeah.
Okay. Thanks. Then regarding your expansion plans, I guess the Nordic market is still very fragmented. So what's the actual reason why you're looking at continental Europe? Also, what do you believe your edge is outside of the Nordics?
Yes, the market in the Nordics is still very fragmented, and there's plenty of opportunity to grow. What we see are some interesting opportunities in continental Europe, which we are looking into if that could be something for us. I think our edge is we are a specialist player. We know and we understand the grocery retail side of things. We understand how the markets work for our tenants. We understand our tenants' thinking, why they need to evolve and redevelop, and how to change their concepts to a changing consumer world, and we feel confident that that's something we can move on also in continental Europe. We wouldn't go too far from home where markets may behave in a different way than what we are used to.
We like the markets, as mentioned, where there's a handful of players, tenants fighting it out for market share, but also, of course, stable economies, stable zoning plans, and real estate regulations, and kind of a functioning real estate market from a legal point of view.
Thank you. And what about Norway? It's quite a small part of your portfolio. Is there limited acquisition opportunities? Is competition increasing, or how should we look at it?
No, I would say that there's assets to look at in Norway also. But the yield spreads are not as attractive in Norway as they are in other countries we are present in and looking at. Yields in Norway are about the same as in Sweden, for example, but financing costs are about 100-150 basis points higher. So yield spreads are just smaller. We'd love to grow in Norway as well.
As I said, it's only 4% of our portfolio. We'd love to grow there as well. But what an advantage we have of being pan-Nordic is we can compare on a day-by-day basis where yield spreads are most attractive for us across our markets. And so far, that hasn't been in Norway.
So it's purely a Norwegian interest rate issue then?
Yes, we have nothing against the Norwegians. On the contrary, it's a lovely country.
And it appears that you will put money into work in Q4 already. Is that a fair assumption to make? I think you have SEK 2 billion, a bit below that, EUR 200 million in capacity.
Yes, we are working on our strong pipeline and trying to execute on that as fast as we can, but also doing things in an orderly and a structured manner, of course.
Okay, thank you.
That is all from me.
Thank you, Svante.
The next question comes from Fredrik Skjerven from ABG Sundal Collier. Please go ahead.
Perfect. Good morning, all. Thanks for taking my questions. I would like to start with the recent acquisitions. So maybe if we start with Sweden and Denmark, can you share any figures in terms of rental value or NOI or acquisition yield? Maybe also the occupancy rate in Sweden?
Yeah, if we start with Denmark, we're not announcing anything or mentioning anything about yields or rent levels. But what can be said is for a sale and leaseback, of course, it's important for the local tenant to sign a long lease at levels which are at market levels, in my view, and also at levels which are sustainable for them over time, even with inflation increases.
So we're not shedding any light on the acquisitions more than their cash earnings per share created, and there's nice opportunities in the market to do deals right now. You asked about occupancy. It's 100% occupied in Denmark. In the Swedish acquisition, there is a small expansion area which is vacant, but otherwise, it's fully let.
All right. And then if we move to the acquisitions in Finland, I appreciate there are three of them. So maybe I have a couple of different questions, but maybe if we start with sort of the Kesko in Helsinki, when is that set to open, or when will sort of the rental contribution start? And is there any sort of rental discount in this one or in the other one also scheduled for completion during 2025?
Yeah. When talking about Helsinki, rental income is already coming, but the shop has not yet opened.
So they're paying rent, but they haven't opened the store yet. I believe it's later this year, but I actually don't know the exact opening date. I know they're paying rent.
Understood. Understood.
And you asked about rental discount. Yes, it's market standard when you sign a new long lease and open a new store that there are some rental rebates for a very short period of time. I would say that's market practice.
And so that's true also for the other acquisition where construction is ongoing and the completion is scheduled for Q3?
Yes. Yeah.
Understood. On that theme or sort of the acquisition where there is construction work ongoing, do you assume any development risk in case of delays or overruns, or is this with the seller?
This is with the seller. The lease is designed, we're not taking any development risk.
As long as the project continues to deliver as it should, then we're not taking on any development risk. No.
All right. And then finally, on these transactions, the press release mentions SEK 14.8 million in acquisition. Is that the total spend including the construction cost, or is it the acquisition price only?
Good question. That's the total spend including construction cost.
Understood. Then maybe following up on the previous questions, I mean, you mentioned strong acquisition pipeline ahead. You have SEK 2 billion of headroom. You're working as fast and prudent as possible. When is sort of your best guess on when this SEK 2 billion will be fully deployed?
It's a bit too early to say. What we can say is we have ongoing processes, and if things turn out well, the money will be or the funds will be deployed.
But I don't want to give any promises because transactions do take time, and transactions can fall apart if agreement is not met. So we're in no pressure or hurry to conclude transactions which are not favorable to us.
All right. And then finally, maybe a question for you, Pia-Lena. You mentioned that a recently refinanced bank loan was done at a lower credit margin, but in line with sort of the group average. If we look at the upcoming bank refinancings during the next 12 months, which you are working on now, as you stated, and the credit margins in those, should we expect any changes to where they are right now?
I mean, we haven't finalized the refinancing yet, but we have good discussions with the banks.
So I do hope that we will be in line or below the average margin on the refinancing, but they are not finalized yet.
Right. But I mean, if you end up in line with the group average, would that mean a lower margin for those loans specifically, i.e., are the upcoming 12 months refinancing currently at a higher credit margin than the group average?
Yeah, in total, they have a higher margin. Yeah.
Thank you. That's it for me.
Thank you, Fredrik.
As a reminder, if you wish to ask a question, please dial #5 on your telephone keypad. There are no more questions at this time, so I hand the conference back to the speakers for written questions and any closing comments. The next question comes from Crispin Royle-Davies from Nuveen. Please go ahead.
Good morning. Thank you for the presentation.
I just have a quick question on the rent from comparable portfolios. There's a 190 basis points drag from occupancy, and that's actually, I think, up 60 basis points versus Q2, despite the fact that occupancy was flat quarter on quarter and only, I think, down 60 basis points or 50 basis points year on year. So could you just clarify where that quite large negative occupancy drag is coming from on the like-for-like rental growth? Thank you.
Yeah, sure. I mean, we do have also in the second quarter higher vacancies, and these were due mainly to properties that we have acquired that were vacant, but they had a lease guarantee or rent guarantee that matured, so to say, so we don't receive rent from them anymore. But in the quarter also, we have three smaller lease contracts also with non-food.
Two out of three are non-food lease contracts that have become vacant. And of course, we're working on filling these vacant areas, but those have come during the third quarter.
And to add, I think we have almost 500 assets. There's always a bit of movement, especially among the non-food tenants, the 16%, which is not daily goods. And that's what we see here, as Pia-Lena mentioned. Two out of three of those were non-food tenants.
Thank you.
Thank you. We have a written question from Fastighetssverige, who is asking us, "Can we elaborate and clarify a bit the terms or which new market you are talking about outside in continental Europe?" I think we've answered that question already when Svante from Nordea asked, so I'll stick to that question there.
And the second follow-up question, "Does this mean acquisitions in the Nordics will decrease going forward, or are you still on the hunt in those markets as well?" The answer is yes, we're still on the hunt in those markets as well. Very much so. We'd love to grow in all of our four Nordic markets as well as we're looking at Continental Europe. And then no other written questions. So with that, we want to thank you for listening, and our next presentation will be our Q4 results presentation.
19th of February.
19th of February in 2025. So thank you, everyone, for listening.
Thank you.
Bye.