Welcome to Our Presentation of Q1 2025. As usual, I have our CFO, Åsa Bergström, with me. After our review, there will be, as usual, the opportunity to ask questions. First slide, please. Next slide, please. As you know, we have a modern portfolio with a focus on Stockholm. I do not have to repeat that too much, I think. What is new on this slide is that we only have 99 properties since we have been selling off Ynglingen and this. The property value of almost SEK 80 billion. What is important here is that all the focus is on the Stockholm area sub-areas. Next slide, please. With all this happening now in the world, we are all in turbulence. From day to day, you do not know really what will happen.
We said that we thought we're coming from a tough 2024, or we really had a tough start of the 2020s. We thought maybe it could be a brighter 2025. We were quite optimistic until maybe a couple of weeks ago when we saw when the turbulence started. We all know what's happening in the world right now. What are we doing? We're really focusing on what we can impact. We can impact our areas. We can impact or have close relations with our tenants. We can focus on nothing and the daily work. We can focus on Stockholm. We really believe, and I like to say that we believe, continue to believe in Stockholm. Stockholm as the growth area of Sweden. It is the engine of the Swedish economy. It's more volatile when you have a struggling economy.
Both Swedish and international companies have many of their main quarters or their Nordic headquarters here in Stockholm. I am convinced that Stockholm will continue to be Sweden's largest growth region for the foreseeable future. Like all metropolitan areas, there are challenges and the potential for improvements. It is also there, of course, and we work with that. Next slide, please. We also continue to believe in the future of the office. The trend is that the office occupancy is increasing. Companies increasingly perceive the value of having a dynamic workplace where employees can meet, collaborate, and develop. It is becoming increasingly clear that the role of the office is a meeting place, more of a meeting place and a gathering point. It is very extremely important as that.
If the economic cycle returns to more or less normal, or we can see as a normal state, we would have, we think, and I think, maybe two to three years of very favorable development ahead of us. With that said, still, the world is challenging. We also continue to believe in the future of the office. The trend is that the office is even more important for the companies, not maybe only as a working place, but as a meeting place where you can meet, you can collaborate, and you can develop. We think this has been increasingly clear over the last years after the pandemic. Maybe you're working from home one day or two days a week, but the office is important.
If you see the economic cycle returns to a more or less normal state, I think there can be a favorable development of offices ahead of us.
Thank you, Stefan. Rental income for the first quarter amounted to SEK 865 million, just below the same period of last year. On a like-for-like basis, income decreased by SEK 20 million, equivalent to -2.7%, which mainly related to relocations as a result of the previous year's negative net letting. Occupations in completed projects were partly offset by reduced income related to divested properties, but the net was SEK 18.6 million. Property expenses include a non-recurring item of SEK 7 million. Other deviations mainly relate to somewhat higher maintenance costs and higher property tax. The surplus ratio thus amounted to 69%. Adjusted for non-recurring items, it was 70%. As no projects were completed in Birger Bostad, no turnover was reported. Birger Bostad's gross profit amounted to -SEK 6 million, all related to administration costs. Central administration amounted to -SEK 33 million.
This cost is front-loaded as Q1 includes the annual bonus payment. Net interest income expense ended up in line with the previous year. Higher debt early in the year was offset by a slightly lower average interest expense. The result in associated companies amounted to minus SEK 24 million and related to the period's capital contribution to Arenabolaget . Shares of profits in other associated companies only amounted to minor amounts. This meant a profit from property management of SEK 285 million compared to SEK 329 million in the previous year. The changes in value turned negative again after two quarters with essentially unchanged valuations. Unrealized changes in the value amounted to minus SEK 565 million. I will come back to this very soon. Realized changes in value of minus SEK 37 million related to the sale of Ynglingen.
The property was valued according to IFRS at a sales value of SEK 960 million in the Q4 accounts. The negative result that was now recognized in connection with vacation of the property related to deductions for deferred tax and sales costs. The valuation of derivatives portfolio followed long-term interest rates, which varied during the quarter. Measured on the last of March, the surplus value increased by SEK 27 million. Finally, the tax expense, which related to deferred tax only, amounted to SEK 141 million, of which plus SEK 128 million related to a reversal of deferred tax in connection with the sale of Ynglingen. Next slide, please. In the quarter, we have once again independently valued a large proportion of the portfolio, just over 50%, and the rest of the portfolio has been internally valued. Yield requirements leveled off and have been essentially unchanged since the last quarter.
The average yield increased by 0.01 percentage points to 4.55%. As I mentioned earlier, the changes in value were negative in the quarter, minus SEK 565 million. This was mainly related to the fact that values now expect longer vacancy periods and slightly lower rent levels, primarily in Solna, where we have some vacancies. In addition, we anticipate longer implementation periods for future project opportunities in Flemingsberg, and we have thus written down the value of the older existing properties, including existing building rights. The total property value thus amounted to SEK 77.8 billion. In addition, there is a property value of the development property portfolio in Birger Bostad of SEK 860 million. Next slide, please. Reported equity amounted to SEK 122 per share, like at the year-end of 2024. Long-term EPRA NRV amounted to SEK 146 per share.
The equity-asset ratio was unchanged at 46%, and the loan-to-value ratio was also unchanged at 43%. Both of these key performance indicators confirm our continued strong balance sheet. The interest coverage ratio amounted to 2.5 on a rolling 12-month basis, which is also in line with the previous year. Next slide, please. The access to and pricing of financing is still very good. This applies to both the capital market and banks. Both the commercial paper market and bond market are continuing to function well. In early March, the Ynglingen property was vacated, and we received almost SEK 1 billion in cash. In connection with this, we settled the bond maturity, and we have also slightly reduced the outstanding volume of commercial paper.
In March, we issued a total of SEK 400 million in new bonds, and in connection with this, almost SEK 300 million of bonds that mature in the autumn of 2025 were repurchased. The new issues were made for two and three years, respectively, and at margins of 74 and 97 basis points. Falling market interest rates after the Riksbank's cut in January and lower margins have meant that we are now reported an average interest rate of just 2.91% at the end of the quarter. Undrawn revolving credit facilities totaled SEK 6 billion at the end of the quarter. Overall, we continue to have good preparedness for upcoming financing needs and refinancing. We have facilities in place to cover the upcoming loan maturities. In total, we have bond maturities now of SEK 1.8 billion during the second half of 2025.
We intend to refinance our bond maturities with new bonds, whereas the bank facilities are continually refinanced through extensions. Next slide, please. Of the loan portfolio, 52% is now fixed, mainly based on long-term maturities and mostly through straightforward interest rate swaps, supplemented by some fixed-rate bonds. In addition, there are callable interest rate derivatives totaling SEK 7 billion, which are still running. Straightforward interest rate derivatives run with fixed interest rates between 0.11% and 2.18%, and the callable interest rate derivatives run with an interest rate between 1.82% and 2.5%. The average fixed term amounts to 1.7 years, and adjusted for the estimated maturity of the callable swaps, the fixed-rate term increases to 2.5 years. Our interest rate strategy provides predictability with fixed-rate terms that offer protection against rising market interest rates.
At present, we see greater uncertainty about inflation and the economic cycle, and the Riksbank has paused its interest rate cuts, although the market is now expecting further rate cuts ahead. Long-term interest rates have risen, and we have held off on entering into new fixed-rate terms. The levels that we have managed to fix that, both for straightforward interest rate swaps and for the callable swaps, are levels that we think work even in the longer term. For a moving 12-month period ahead, an increase in the market interest rate of 1 percentage point will generate a higher interest expense of approximately SEK 146 million, all else unchanged. A corresponding reduction in the market interest rate by 1 percentage point will result in a reduced interest expense of SEK 72 million. During the quarter, we have continued the sustainability work in line with our environmental and sustainability targets.
The main targets are energy consumption, maximum 70 kilowatt-hours per sq m, 100% renewable energy, 100% environmental certification of investment properties and new construction, 20% circularity index during conversions, and 35% lower CO2, Scope 3 emissions during new construction for new projects, and also sustainability audit of suppliers. We have also initiated the work on upgrading our green framework, and like before, we will obtain a second-party opinion from S&P. With that, I leave back to Stefan.
Thank you all. If, as Åsa has told us, the financial market, the financing market has been good during the quarter, and we have issued some bonds on very good margins. The transactions market has been, in our view, quite healthy. Not that many transactions in our market, but at good levels. Some of them you see here as some examples that have been in Hagastaden, at Lidingö, for example, and in the old town of Stockholm. I do not think we have the transactions that have been completed has confirmed our valuations well. As Åsa also said, the yield is moving sideways. Next slide, please. As we said, this is probably the last time you see this property in our slideshow because it is Ynglingen at Östermalm, which we sold and we left during the quarter. We consider to see transactions as one of our adding value parts.
It's part of our business model to sell off from time to time some of the properties that we think or consider to be outside of our core areas, and that we see less potential for development. Next slide, please. We also have during the quarter signed a letter of intent with the city of Solna to sell Solna Hörnan 1 property. The plan is to sell it at latest 2028. As I said, at latest, we have told this before, is that we will plan that this property will become the Solna new city hall. Telenor, who has it as a Swedish headquarter, they have been there since 2018. Our ambition is to find a new solution for them so all three parties will be satisfied. That can take some time. That's why we talk about 2028 as latest.
The property is located, as you know, between Arenastaden and Solna Business Park, and we do not think it will be a fantastic city hall for Solna. That is the main reason for selling it. Next slide, please. When we talk about the rental markets, there are a little bit more question marks. The Stockholm office rental market has been weak for several quarters now. We have seen increasing vacancy rates in all the submarkets of Stockholm. Especially, this is true in Kista, where it continues to increase, but also in the CBD. In the CBD, we can see it coming up, but it is also an effect of what you can call hidden vacancies over the last year since some of the tech companies rented more space than they needed some years ago. They have contracts on that.
Now we also see good demand in the CBD. This figure, I think, will be many companies see it as an opportunity to move into and find new locations in the CBD and inner city. The number of employees in the office-intensive industries in Stockholm and the Stockholm region has been flat for the last years. We can't see any rise in or any growth in that yet. I think it will need some more better economy and a better macroeconomic situation before we see that. If you go to the next slide, please, we can see that the office supply of offices in Stockholm is also flat since many years. That is what we have. Very new products are started. I think very few are started on speculation.
There are some few in Skanska has one at Kungsholmen, for example, but very, very few more projects are finalized over the next right now, but they also have signed many cases signed contracts. Next slide, please. Our occupancy rate in the management portfolio has been coming down even further to 87%. We have said that before, that it will come down before it will get better. This is an effect of what the net letting figures from 2023 and also 2024. That's the effect we see right now. Also during this year, as you know, we will have finalized some of the projects that will have an impact, for example, SAP and Alfa Laval, but I will come back to that later. Please, next slide. During the first three months of this year, 2024, we had a positive net letting of SEK 6 million.
We have also renegotiated almost SEK 90 million that are extended on unchanged terms. We have SEK 60 million that we have renegotiated at minus 5%. Also, we have some contracts that are maturing during 2025. We already have been renegotiated before and the current agreement expires. We can say that we have, and we said that also before, that some contracts are, thanks to the indexation of the last years, maybe a little bit over-rented. That is the fact we see now, but it is for SEK 60 million and 5%. It is some special contracts, especially one with a larger one in Solna that we have building where we all said that we knew it was a little bit over-rented. This is not a surprise for us. I am happy that the net letting is, again, a positive, a plus. Next slide, please.
This we used to show you the rental development in existing lease portfolio. This is what we this is based on what we know today. This year, the beginning of the year is impacted, as we said before, with net leasing figures for 2023, 2024. The third and fourth quarter this year, and especially the first quarter next year, is impacted by that in Solna. We get the SAP moving in in the Nöten. Alfa Laval are moving in during the summer in Flemingsberg. That will have a positive impact. We are coming closer to SEK 900 million in the beginning of the quarter in the beginning of next year. Next slide, please. Now, that we have now been surprised in this list, it will be added during the year with some of our new tenants or in the new products.
When talking about Convendum, we can't say that much more than we said in the Q4 report or the presentation. We will know more in a couple of weeks' time when the, if you call it chapter 11 phase, we will know where reconstruction phase will be set up. We have said that we will have an agreement with them, hopefully. I think we will be positive for both, although it will be positive for them making it, giving them the opportunity to, during the first year, have a discount from us to be able to take the business into positive figures and then prolong the contract a little bit, but on existing terms. More about this later this quarter. Ongoing projects. We invested a little bit less than SEK 500 million this quarter, SEK 447 million.
We continue with the development of Porcelain Hammarby Börssnack, a quarter deal in Haga Norra, for SAP, Nöten, and Alfa Laval in Flemingsberg. All those projects will be finalized this year. It's fantastic projects, I must say. You're so welcome to visit them. It's a residential development portfolio. We are moving on or continuing with the project at Haga Norra , which you see right down in the middle of the picture. At the back, you have a quarter, but it's a fantastic Haga Norra will be a fantastic area. We are continuing with the investments in the residentials. In the first phase, there are 23 apartments of which 19 are sold. They are actually moving in right now. You see it down to the right, it's a red corner. It's a fantastic project.
In the owner apartments, we have now sold 39, and they will get signed contracts, I should say, and they will get access in the end of this year. Rental apartments are being completed for occupancy during the autumn. The next phase for starting, we will sell more of the next phases after the summer, so it is closer to moving in. I think this is a really great project by Fabege to start. Next slide, please. We, as you know, we have a little more than 700, about 700,000 sq m of building rights. We are for the commercial portfolio, whereof about approximately 45% are legal binding. Talking about the residential building rights, it is more than 500,000 sq m, whereof 37% are legal binding.
As we said before, we will not start any of these speculations, but this is a potential for the future and for the development of our existing areas where we're active. Next slide, please. What has been important during the quarter is that we have started in Arenastaden with the road infrastructure in Faro, Cairo. We will invest about SEK 200 million for preparing for future projects. The opportunities in the future are to build about 70,000 sq m of office and a couple of hundred apartments. We will not start the commercial project before we have signed contracts. We are also working with to try to find the potential tenants for that fantastic project. In Hagastaden, we can continue to develop the residential, but we also have a potential commercial project in Hagastaden to continue to develop that area. Next slide.
Some other project opportunities for the future are, for example, Kungsholmen, where we got the legally binding plan for Tegelt errassen or Paradiset. It is a little bit more than 35,000 sq m of offices or commercial area. It is also some residentials. We are right now discussing how to take that to the next step. In Solna Business Park, Yrket got a legally binding plan. It is more than 20,000 sq m of office and more than 20,000 sq m for residential for us. Maybe even more important is that Entity now can start to construct or to build the house for Svenska Kraftnät. I think that will be really important for the development of Solna Business Park. As you know, we own most of the other properties in that area. We have some vacancies there. SAP will move in close to this area.
I think it's really what's happening in the next years will be very positive and also an opportunity for us to fill up the vacancies we have in Solna. Next slide, please. To the right, you see what we expect of Solna Business Park in five years' time and where we are today in the middle. It will, as I said before, the Svenska Kraftnät or the Entity building is in the middle. Our potential projects are close to that. I think this really could be a great development for this area, which is the second best commuting area or center in Stockholm. You have the trains, you have the subway, you have very good infrastructure. I think the potential in this area is really exciting. In a tough world, in a turbulent world, in a challenging world, we believe in our markets long-term.
Of course, we are not vaccinated by poor economy and turbulent times. We see that with the strong market share positions we have in Stockholm, in Solna, and with a modern portfolio in good commuting locations, I'd say also the long-term opportunities are there. What we will have focus on now is, of course, to fill up the existing buildings. We have the target to increase the occupancy rates to 95%. I do not expect it to go fast. I think it will take a couple of years. We said it will be at latest 2030. We will complete existing projects. As we said before, the larger ones are Nöten and Alfa Laval at Northside Quarter. It will add a couple of hundred million SEK of new rental income for the next year.
We will continue to not start new projects, but be able to, when we find the timing right, to start new or take the opportunities in the building right portfolio. We will continue to do value-creating transactions. Of course, we always have focus on the costs. This, the targets, will, of course, the cash flow, the growth of management profit per share, and to be the total return, the best property portfolio, looking at the total return in Sweden. Thanks for listening and questions.
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Thank you very much, and thank you for listening. As always, you're welcome to give us a call and ask questions or have a dialogue. Please give us a call, and I hope to see you soon. Bye. Have a nice day.