Good morning, and welcome to Fabege's Q3 report 2026. My name is Bent Oustad, and I am the CEO of the company. Together with me, I have Åsa Bergström, our CFO. We are also so lucky to have Viktor Byrenius from Pareto together with us in the studio as a moderator for the questions afterwards. With that, we kick off today's presentation. I always start to repeat just a short glance over who Fabege are. We have a modern portfolio with focusing on Stockholm, and it is occupied by high-quality tenants. We own, develop, and we also manage all the properties with focusing on creating attractive working places and a good living in the superb locations in Stockholm. Our key strengths that is always important for us is our customers.
We have a very high customer satisfaction index, and it is highlighted by strong track record in serving our customer needs. 95% of the tenants say they will recommend Fabege as a landlord, and that is important for us in the daily work we are doing all the day. We also have the long-term lease contracts as a foundation, and I will get a little bit back to that later on in the presentation. We have our own employees across the entire value chain, and that also gives us further advantages. All the properties are also located in clusters, it gives us some economies of scales. We have the opportunity to create engaging meeting places, and by that I mean more or less focusing on creating the 15-minute city in all our core areas. We have excellent capabilities to deliver large and complex projects from start to finish.
We have done that several times, and we will do it forward as well. Right now, the larger projects are a little bit smaller or less than it used to be, but we have the projects in the portfolio. We also have strong capabilities, and we are best in class when it comes to ESG initiatives and environmental results. That is also highlighted by our customers in different surveys. If I just look at the Q3 numbers separately, and not yet to date figures, only the Q3 figures. The net letting ended at SEK +55 million for the quarter. We are happy with that result, and the rental income increased by 2.3% from second quarter to third quarter. The surplus ratio for the third quarter was 76%, and profit from our residential development ended at SEK +33 million.
The year to date, it is SEK 112 million from the residential development. Value changes from the property portfolio. Also, I will get back to that a little bit later. It ended at SEK 259 million in the quarter. The occupancy rate stayed at 87%. During the quarter, we also made some changes to the executive management team, and everything in accordance with that is booked in our books and the P&L this quarter. With that, Åsa, I hand it over to you.
Thank you, Bent. To go through the P&L income statement. The rental income came in at SEK 2.7 billion. That is an increase of almost 4%. Divided into separate items. We had a negative rental growth in the identical portfolio, - 1.2%, relating to previous year's negative net letting. On the other hand, we had a positive impact from projects that were finalized during last year and the beginning of this year, contributing with approximately SEK 132 million during this period. The net operating income, as Bent mentioned, from the residential development came in at SEK 112 million, and the net operating income from property management at almost SEK 2 billion, as you can see here in the P&L. Central administration was in line with last year, SEK 78 million. The net interest expenses increased a little bit to SEK 741 million, mainly due to higher STIBOR during the year.
Ground rents in line with previous years. The share in associated companies also decreased to SEK -82 million, of which SEK -74 million is related to Arenabolaget, and roughly SEK 9 million relating to a transaction of building rights, residential building rights within Birger Bostad. Thus, we saw in total profit from property management of SEK 1.166 billion, up around 11% in comparison to previous years. As Bent also mentioned, we see unrealized value changes of a total of SEK 120 million during the year. We have had now two quarters of positive valuation uplifts. Also this quarter, we saw a value uplift in the derivatives portfolio relating to increases in long-term interest rates. So a profit before tax of SEK 1.4 billion.
The tax came in at SEK -225 million, also impacted by some positive items relating to a transaction previous in the year, and also the valuation of some carry-forward losses that we could recognize after a court ruling previous this year. So in total, SEK 1.2 billion. This quarter, we have valued roughly 45% of the property portfolio externally with the appraisers, Newsec and Cushman & Wakefield. As Bent mentioned, a value change in the quarter of SEK 259 million. We saw the yield coming down to 4.55%, a decrease of 4 basis points since year-end. If we look at how it is divided between the different market areas, we can see that city provided SEK 500 million plus during this nine months, while Solna and Hammarby are still on the minus side. Residential, also a little bit on the positive side.
In total, we have invested almost SEK 1.5 billion in the management portfolio, together with projects and also development properties, which are the residential development within Birger Bostad. A few comments to the key ratios. Equity per share, SEK 121, and the EPRA NRV SEK 147 per share. Positive return on the property portfolio, of course, since we now have also recognized positive value changes. The surplus ratio in line with last year. Also equity ratio and loan to value in line with previous year. The debt ratio improved to 12.8x, in line with our long-term target. Also we could see the interest coverage ratio increased to 2.7x. Good signs. On the financing side, it is continued to be a very good market. We have very good access to financing from both the capital market and from our banks.
We have refinanced everything that is up for refinancing this year. We have initiated also next year's refinancing with banks. There's been some volatility on the capital market when it comes to margins. We took a very good opportunity in August to make some new bond issues where we came out with a five-year bond, SEK 600 million at a margin of 103 basis points. This would be somewhat higher in today's environment, but a very good opportunity for us. We have also entered some new swaps. During the second quarter, we entered some plain vanilla swaps, so SEK 1.9 billion, five-year swaps. Now after the summer, we have done some of the new callable interest rate swaps, SEK 1.5 billion at levels below 2%, which provides us, as long as they remain, with a positive cash flow as it looks now.
We are happy with the undrawn credit facilities of SEK 6 billion, which gives us safety. We feel very secure that we will refinance everything that comes up in the near future. So, a very stable financial position. Then when it comes to interest rate swaps, we have seen an uplift in the average interest cost of 2.91% now, compared to 2.82% at year-end. Actually today, back at below 2.9%. Around 44% of the portfolio is fixed, and with a fixing period of 1.3 years. If we include the callable swaps, that increases a little bit to 1.6 years. I think we are happy with the situation as it looks today. I think that's all I have for the time being. So back to you, Bent.
Thank you. Yes. If you look at the occupancy rate in the management portfolio at end of Q3, it's at the same levels as in Q2, so it's 87% occupied. We very well know that the easiest way for us to create shareholder value is to rent out the existing vacant premises. If you go over to the net lettings, the net letting for the quarter ended at SEK +55 million. The larger new lettings, we sent a separate press release on that one during July. New lettings ended at SEK +93 million, and terminations at SEK 38 million. The large termination was more or less mentioned in the media in Q3 2025, when SOS Alarm said they would move out of our premises and to a new location in the city. The lease contract runs out in second quarter 2028.
Come a little bit back to that later on. The renegotiations for that third quarter is total SEK 90 million. It's an uplift of SEK 1.9 million. If you look further into the figures, renegotiated rents rose up to SEK 60.4 million. It was an increase of 3%, and prolonged existing terms was SEK 31 million. So, we're quite happy with the result this quarter. Year to date, the total renegotiated amount is SEK 320 million, and that's a slight decrease of 0.6% for the total portfolio. Renegotiated with different terms, SEK 165 million, and prolonged on existing terms, SEK 152 million. Total SEK 320 million. So that brings the total net lease for the year-to-date figures to SEK -7 million. As I mentioned in my CEO letter this morning, we have had a nice kickoff over fourth quarter. So we are quite enthusiastic and ambitious for the last quarter.
Also, SEK 136 million of the maturities in 2026 and onwards have already been renegotiated within these figures and earlier quarters. If you dive a little bit further into the renegotiations we have done, it is a healthy mix among all market areas and all segments. Very often when we listen to media and we hear different roundtable discussions, it is a lot happening among governmental tenants, et cetera. We feel we are in all kind of markets and segments. Also that is what you see on the right side here, is a nice mix of different tenants. Two contracts above 1,000 sq m during Q3. The same with the new leases, are also in all kind of categories. One contract above SEK 10 million, and then you all know that is, of course, the DNB Carnegie contract. If you divide it into the different segments we have, different areas.
Stockholm is dominated by Stockholm in the city this time. But we see activity in all our clusters, and that is important for us. So the rental development we gave, this is not a guiding, but this is what is in our book, already decided. So the forthcoming quarters, and we want to, of course, accelerate this. If you next quarter, when you also see a fourth quarter here, you have the full effect of the DNB Carnegie contract. You have the full effect of the Mimer project, and you have the full effect of Wenner-Gren Center that we come back to a little bit. I have mentioned there, slightly drop in Q4 2026. That is a one-off effect, more or less an IFRS effect, auditing effect.
Meaning we have had some rebates to some customer that we now are renegotiating the whole contract, and then we take the full effect of the planned discount there. The new contract will increase our cash flow effect, and we will try to focus on that this time. So I mentioned in the beginning, our customers, it is the most valuable we have in the company. The 10 largest tenants, you have on the right side here. Still, the DNB Carnegie is renegotiated, but this is the old contract because the new one runs into effect from the third quarter 2027. So we will update it then, and there will be a number three on this side. The WAULT on the top 10 tenants will then go close to 10 years, and in total, we have 700 customers. But the 10 largest accounts for approximately 30% of the total rent.
They have a long WAULT. I think that takes it. If you look at the trends, and this is Fabege's view and my view on the market trends, what we see. The rental market, last quarter I said was slightly strong, in the CBD. This quarter I said stronger, and it is a good continued activity in the CBD portfolio. Rent levels have started to increase in areas where low vacancies and less alternatives on new productions. There is more tempo in the leasing activities as well. We also see a stable rent levels in the Greater Stockholm that is also reflected in the figures we have shown you here today. We see a more mix of tenants behaviors. Still, some tenants are reducing square meter in existing leases. But also more and more tenants changing their policy to be in the office at least four days a week.
I see someone do the analysis and say they will be in the office four days, but the policy start to be more and more at least four days in a week. That's also, we see that on activity on ground levels, activity in the parking lots, et cetera. That's a good sign for us. Suppliers to all the industries in Sweden are really growing. Even if it's in the space industry, if it's in the data center industry, if it's in different industries. Suppliers there, some of them have quite high activity. We see them around now looking for future relocation and opportunities. Not all of them, but some of them. Still we see also the growth in startups, AI/Tech companies also being in the market. It feels comfortable.
Also back my comment on that we are quite enthusiastic and ambitious for the last quarter. When it comes to the construction market, we see free capacity among the construction companies. When we are handing out contracts, we see a good competition to get our potential building contracts. We feel the market is healthy for us. Transactions markets, quite limited numbers during third quarter. But we see as well as, I guess, most of the city is seeing increased interest to investigate potential of market opportunities. Sometimes it's from a specific real estate company, but even more often from the advisers, and that's their job, so it should be like that. But we see more interest these days. The financing market, just to add on Åsa's run-through, it's a healthy activity there, and we see competition among all kind of investors and different markets.
It's up running and well-functioning. Going forward, what are we seeing? We have a lot of projects that will contribute to the top line growth. As I mentioned earlier on here, with full effect from the fourth quarter 2027, Wenner-Gren Center, Mimer also with full effect from fourth quarter, but it start to kick in during the third quarter of 2027. They are running in accordance to the timeline that we started the project with. So it looks good. This year in June, we bought a land plot from the municipality of Stockholm, the Gadden 1 in Sveaplan. This is a fantastic area, and it's very important for us. We have approximately 90,000 sq m here.
This new building right is approximately 8,800 sq m, and we have done a lot of work in a short period of time, and we will have the possibility to start the construction works quite early. Total investment, approximately SEK 370 million, including stamp duty, et cetera, and all kind of accumulated costs. Yeah, we are enthusiastic with this as well. It's a positive and attractive location for possible tenants. Quite high interest in a short period of time. Planned move-in end of 2028, beginning of 2029. The area, just to put it in the bigger picture, I showed this last quarter as well, but from now on, I will focus on our properties. But kind of the interest is also the white circles are where Ericsson signed the contracts for their new relocation. We have all the red circles or squares here.
In total, 90,000 sq m. Moving over to the residentials. We are creating Haga Norra from being nothing and be an attractive meeting place. It is a parking. It is a garage underneath the ground floor. We have all the green squares here we have completed. Right now, we are doing the last cleaning of the last flats in Block 4. Block 5, I mean. That will be also completed this year. Block 4 has started up. We have done the planning. We have done the construction. We have decided on the construction company, and we start the sale of the first flats during October, actually. That is on the way. Block 3, we have done a lot of lease-out. We have leased out an elderly care facility, approximately 5,000 sq m to Stockholms Sjukhem.
We will have a preschool that will be rented from Solna Municipality, and we are doing residentials. That will come after Block 4 is finalized, but the construction work will start a little bit in parallel. There is also a potential for a potential office, approximately 20,000 sq m at the last corner of the quarter. Haga Norra Block 4 will be 133 apartments. Project started during October, as I mentioned. Estimate investment SEK 600 million, including purchase of land, and the completion will be 2028- 2029 in there with the move-in. The next phase, Block 3 are on the way, and in total, approximately 20,000 gross leasable areas. Investment up to SEK 860 million. But as I mentioned, a lot of the commercial premises are already leased out.
The last one, Solna Municipality press release this quarter that the building rights for more residentials in Arenastaden on the doorstep to the new metro station are in place. The first building will be approximately 200 apartments. This is still in the planning phase, doing a lot of calculations, both when it comes to construction cost, pricing of the units, et cetera. The metro station, unfortunately, one year delayed. We take the time and do all the calculations and try to lock in as much as possible just to finalize the potential in this project for us. To summarize the quarter and what we are looking for going ahead. We are, as I mentioned several quarters now, we have to conclude on ongoing leasing initiatives and to reduce vacancy. Top priority. Definitely to continue to be the preferred partner for all of our customers.
We have to be available, accessible, and always solution-orientated. When I see all those different surveys, I am so happy to see we are ranked number one in these questions all the time, and that is valuable for us. Second or third point is to secure the value creation in ongoing projects and our land bank. We have to do the calculation exactly, how to be strict on cost, and how we are using all our resources. That is both in commercial building rights and also in the residential portfolio. We will always continue to be active in the financing market. Also, I showed a nice picture of the activity during the third quarter, and it continues going forward. The last one, search for opportunities to create shareholder value. I know a lot of investors are asking for that, and believe me, it is top priority.
With that, we hand it over to you, Viktor.
Thank you very much, Bent, and thank you also for having me. My name is Viktor Byrenius . I am an equity research analyst at Pareto Securities, and I will help you through today's Q&A session. I will have some questions for myself, but then I will let the audience in for questions through the telephone line. Before jumping into the details of the quarter, could you just very quickly mention one thing that you feel satisfied about this quarter and one thing that you need to improve going forward?
Leasing activities, I am happy with that. I am happy with enthusiasm among younger talents in Fabege. We are doing some smaller changes on the executive team, and we see enthusiasm coming up immediately, and that is very encouraging for me as a partly new CEO in the company.
Yeah. You mentioned the net letting came in at SEK 55 million for the quarter. Obviously, it had a very positive effect from the DNB Carnegie lease. Excluding that lease, how would you say that the current leasing market, as you mentioned, that the CBD is going strong, how is it overall?
We have done new leases in all areas, but then also, as said, we have had a nice kickoff of our fourth quarter. This signing often goes some more weeks or something, and if you had closed the books today, it will have been positive for the year-to-date figures. We have kicked off good. We see nice activity in all our areas, so I am quite optimistic.
Do you have any larger ongoing discussions?
We always have. Some very large and some in more middle range. The pipeline is we have a lot to do.
Good to hear. About interest rates, you have decreased your fixed-rate periods from an average of 2.2 years in Q3 last year, now down to 1.3 years. Given that the market rate curves are rather volatile at the moment, how will you work and operate to minimize the damage from this and to keep the interest costs on good levels?
Well, we took some opportunities in June to do some plain vanilla interest fixing, as I mentioned during the presentation, to secure some of those earlier taken swaps that are maturing over the years. One reason is entering these kinds of callable swaps that are on very good levels for us that provide a positive cash flow. We have a number of those swaps that actually provide a good cash flow for us now. I think today with where the long-term interest rates are, it's a little bit too expensive for us to do a lot of more fixing. It's always a balance to see. What we do is we follow the markets, and when we find opportunities good or good enough, then we take action.
Yeah. Okay. One question that you have heard many times before, some of your sector peers have sold non-core assets, enabling them to use the proceeds to reduce debt and buy back shares. Given the current 50%+ discount to reported NAV, what's the rationale behind not buying back shares at these levels?
The rationale to not buy is that we don't have a lot of excess capital in the company these days, so we have to prioritize where to invest. That said, I will not be referred to as I say we will never buy back shares. We ask for a power of attorney to do it, and it's on the agenda. Also this time, as you saw, I changed a little bit on the last slide there. We are really thinking about creating shareholder value. It's always on the agenda.
Yeah. With that, I will open up the telephone conference for any of the audience questions.
To ask a question via the phone, press star five to enter the queue. When it is your turn to speak, press star six to unmute your microphone. The first question comes from Fredrik Stensved at ABG Sundal Collier. Please go ahead.
Morning. Can you hear me?
Yes.
Yes.
Perfect. Very good. First, a couple of questions on the forward guidance or projection of rental income. Bent, you mentioned in the presentation that Q4 was impacted by what I understood at least, a rental discount for a renegotiated contract being fully considered in that quarter. Is that the full effect for Q4 and I guess, Q1, Q2 2027, also down sequentially? Is that linked to the same change or something else?
No, the one contract I mentioned, that fourth quarter 2026, that is a one-off. We are changing the tenant in this building, so the future cash flow will be higher. The yearly rent will be higher than it is today. But it is a long lease contract that we want to end earlier on, and they have had a rebate. It is booked a rebate for a short period of time, and it is booked all over the total lease length. That is why it is in our books, but divided over the total lease length. But we finalized this lease in advance. When it comes to the other thing you said, or you asked for there, Fredrik. As we mentioned in the press release in July, we have a large rebuild or refurbishment of our property in the CBD.
The tenants are operating in the premises while we are doing the refurbishment. So, some smaller rebates on that tenants as well. You can account for that until third quarter 2027.
Understood. On the third quarter, which we see in the table, does that fully reflect full rent from DNB or do they have discounts or sort of phasing in of rents already as of Q3?
It is full effect in Q3 2026, I think.
There is a small discount also in Q3.
Okay. A small discount.
Yeah.
Sorry.
Okay. Very good. Mimer sort of partly in Q3 and then full in Q4?
Yes.
Right.
Mimer first phase partly in Q3 because we are renovating the second phase in the building. So full effect is not until August 2027.
Full effect in the fourth quarter.
Yeah.
Yeah. That's clear. Then I guess Wenner-Gren Center is the last sort of large one. I think you said Q4. What's your expectations on occupancy trajectory in that property next year and looking, I guess, into 2028 as well? Is that going to be half let at completion and then gradually increasing from there, or what's sort of
I think your projections are quite good. My team is much more in a rush. They want to sign it up as quick as possible. But, yeah, we have to think of this is our total refurbishment. It will be so nice when it's finalized next summer. So we can't be too eager to sign everything now. It's 400 sq m per flat. So, the decision making, if you want to lease 400 sq m, you are not leasing up now to move in 12 months. A lot of viewings there, a lot of tenants looking at the building, and they see the potential, and they know they can take the decision in much shorter time. I really want to finalize the entrance to the building, the lobby area, see all the services we are putting in there, see how it will be. I have the good feeling.
Then we think it's easy for us to exceed our expectations when it comes to rent levels.
Yeah, that's clear. Makes sense. Then, second and final topic. Also, you mentioned, if I'm not mistaken, that you did another SEK 1.5 billion of callable swaps now in Q4. Is that correct?
Q3 and Q4.
Okay.
Yeah.
Okay. What is the sort of addition from Q3? What we see in the report?
Yeah, you see some impact from that, but not so much. It will kick in mainly from Q4.
Understood. What is your sort of general thinking on how much volumes you can take in terms of callable swaps? I guess, there is some kind of tail risk that the counterparty actually calls them.
We do not regard them as sort of long-term interest rate swaps like the plain vanilla swaps. These are mainly taken to provide a good cash flow in the meantime. If they are closed, they are closed. We see it as the risk we take is that we will stay with these swaps at the levels that they are taken. These latest callable interest rate swaps, they are taken at levels that are a little bit below 2%, and that is interest rate level that we think that we can live with for a long time should they not be called upon.
How long do these run if they are not called, the below 2%?
Between five and 10 years.
Yeah, that sounds like a good instrument. Okay. Thank you very much.
The next question comes from Nadir Rahman at UBS. Please go ahead. Nadir, please unmute your microphone via star six.
Is that working now?
Yes.
Yes.
Hello. Sorry, thought it just took me a bit of time to work that out. Thank you for taking my questions. I've got two, and I'll ask them in turn. The first one is rental levels on the leasing you've seen year to date and also in Q3. How does that compare between Solna and the inner city? And a follow-up to that is, how much discounting are you offering, and how many rent-free incentives underlie these rents? That's my first question.
It is difficult to say some percentage of differences. Just within Solna, in Arenastaden, it varies from building to building and micro location within Arenastaden as well. Arenastaden, you have rents higher than we have in CBD. But when it comes to CBD, it's of course higher. More or less twice the rent in CBD as we see in Solna. More or less that. You said incentives to move in, you ask about that?
Yes, correct. What sort of incentive levels are you offering at the moment across your leasings in the past quarter? Has that changed since the start of the year?
I haven't really looked into it, just my feeling now. I'm a little bit even closer to the operations. I think I have some feeling on it. It's not increasing, maybe a little bit tightening. I would say, and if you do analyze this, it's the same level.
Okay, that's fair. My second question would be on your sector allocation. Of course, you mentioned towards the end of your presentation earlier that shareholder value is a focus to you, and you are looking at ways to optimize and maximize that. When you look at your sector allocation now, of course your majority offices, there's some residential as well. Which of those two sectors do you see the most value being unlocked for shareholders? Do you consider any other sectors as an opportunity, given the way the macro environment has changed perhaps, to everyone's surprise this year, given various geopolitical events?
Yes, it's a little bit less risk on the resi side since they were doing full, what do you call it in English? Full enterprise contract. We lock in all the costs. We do the drawings of the separate flat. We do all the planning in advance before we handle up the building contract. So they are more or less the sales risk. If you do lease out resis, we also know more or less the rent level before we start the construction work. On the other side, the potential are maybe more into, you mentioned now offices. We see more and more creating working places. So it's not pure offices. A lot of tenants have some special needs. Could be labs, could be some data centers. They all have some special needs.
What we see in the contracts, maybe 10%-20% in average are some special needs. We feel quite happy with that because they lock themselves into the buildings for longer time. I think that give us excess value because the position as the preferred partner of a tenant. So I see it as a good strength for us, and we try to focus on that in all the lease outs we are doing.
Okay, sure. There was a second part of the question, which is about maybe other sectors as well, and if they look more attractive now given the macro environment has changed.
Yeah. It's always, you see the companies really kicking off here in Sweden. They are, of course, attractive. Some of them have more production in their businesses. But, for us, the short value creation is to lease out the vacant space. So more focusing on that than just what kind of tenants we are approaching. But, yeah, we are approaching all kind of tenants that want to have a place to want to create a new work environment for themselves.
Got them. Okay, very clear. My third question relates to your points on leasing. So Bent, you've been in the seat for nearly a year now. A year on now, have you had any surprises to where you expected to be at this stage? Perhaps on occupancy or lettings, has it been slower or better than you expected in the last 10-12 months?
My ambitions are sky high, so I will not say we are ahead of my plan. But we are taking step by step. I think we have an organization being ready to run, and they are running a lot. But we can always be around talking about what we intend to do, but we try to focus on signing lease contracts and do the work. That is job number one for us.
Very clear. Thank you for taking my questions. That is all from me.
The next question comes from Philip Hallberg at Nordea. Please go ahead.
Yes. Hello, can you hear me?
Yes.
Yes.
Yes. Thank you. I had a question regarding, does this quarter's renegotiated volume include the old DNB Carnegie contract that you had, or is that to be taken later?
No, it is not included. We did not include that area. We just put in the net lease effect and added them on the former area that Max Matthiessen rented from us. It is not included. It will be totally dominated, the whole overview. A little bit more is, or quite much more is renegotiated, but then it is on the existing terms. We have not divided the rent levels among those 17,000 sq m.
Okay. Also in regards to the Mimer phase two, will that have any positive impact on net letting in Q4, or did you take that effect already in 2025?
It was taken when the contract with AcadeMedia was signed.
Okay. For both phases?
Yeah.
Yeah. Yes.
Okay. Bent, you mentioned in the CEO letter, of course, that you still have a lot of focus on letting out vacant space, and I appreciate that, but you also have a lot of focus on cost for tenant adjustments. Does that mean that you are more flexible in terms of rental levels to rent out vacant space, or how should we view that comment?
You should review it like we try to create an even clearer responsibility within our firm. When we have a tenant, a TI we have to do, one person is responsible, has the total budget, and we have a lot of enthusiastic employees with lot of specialties. But when we have done the calculations and we have said yes to a project, we close all the discussions there, and we move on, and we do the work and have the tenant in. If we can save one month of work, or if we can stop one further survey on the work we're doing, it helps us to create better value going forward.
Okay, should we—
When it comes to the flexibility that you asked for, please, tenants, come to us. We will always discuss and find solutions.
Okay. That is clear. Also just in regards to, have you reviewed the former TIs and sort of seen that you have a low return on invested capital on those sort of improvements, or is this just an ongoing focus in the business?
It is an ongoing focus, but I know how to calculate that as well as all of you do, and we are not satisfied with all the returns we have the last years. But over a period of time, we are proud of what we have achieved, but we want to get back to those historical levels.
Okay. My final question is just regarding the potential divestment of Hörnan 1 to the Solna Municipality. What is the current status of that deal?
That was more than one year ago, and it was stopped there. I don't have any further comments on that, actually.
Okay. But is it still an ongoing discussion in the municipality, or has it been called off entirely?
If they introduce, please call me.
Okay.
Yeah.
Thank you very much for taking my question.
Thank you.
We have no more phone questions in line, so I hand the word back to the speakers.
Thank you very much. Just one final question from me. There has obviously been some turmoil internationally, very uncertain geopolitical environment. What is your view on this, and how will you be working going forward to minimize the negative impact from this?
There's different angles to that question. When it comes to financing, of course, it influences. When it comes to operations, we try to focus on what's happening in the company. We are not that much affected by what happens other places. That's also why I went through the construction work, how we see the construction market. Of course, we are very well aware of what can happen there. We haven't seen the signs yet, but it's always on the agenda. We see a lot of industries going well in Sweden. Try to focus on them and see their future needs. We see more effect from companies changing their policies to maybe be at least four days in the office. That means more for us in the short period of time. I think everyone in Fabege are looking at the news every day and see what's happening.
We try to stay focused on Fabege and our areas.
Sounds great. Well, I think we are beginning to run out of time. Thank you very much for taking my questions, and over to you for any closing remarks.
No, but with that, we conclude the third quarter presentation. We are already well on way in the fourth quarter. Thank you for taking your time being with us today. Thank you, Viktor.