Thank you very much. Welcome to our presentation. I'm the CEO, P-G Persson.
Yes, I'm Fredrik Sjudin, the CFO.
We will lead you into our report and start with the summary for the year-end. These are the bullet points from the year-end in the report and also in our presentation. We have had focus on cash flow and secure financing, and that has led to a strong foundation for the future. We have a strong financial position as financing cost has increased. We also had a record high in athletics and increased earnings capacity. We will all come into this a little bit later in the presentation and fill it up with numbers and more communication. We're also the sole owner of the high-profile property Kineum since we bought from NCC in the 20th of December.
The board has proposed a dividend of SEK 2.3 per share to be paid in 2 installments of SEK 1.15 each. Last but not least, we have a new CEO coming in Platzer Johanna. She's been appointed by the board of directors after the year end.
If we look at the numbers, we will go into those a little bit closer when Fredrik comes into later in this. We have a rental income that is increasing. We also have an income from property management that has increased, and we have a record profit for the year end with SEK 3.2 billion. The value of the property portfolio amounted to, for us, only SEK 1 billion up. It's been more the couple of years. This is also part of what we are strategically have been done in 2022, focusing on the cash flow and the secured financing. The earnings per share was also high, 26.67.
If we look at the market situation, of course, the benchmark rate has affected the market. We can see a decrease in Gothenburg in the index, and the index looks like this right now, and the economic activity in Gothenburg. There's been a decrease from to down to 91.5, which is a normal but weak level from that point of view, the ones that have put the report in. This is the Q3 report. We haven't had any report from Q4 yet. We see although the index is down, we can see that the employment is stable. It's still stable, but we see an increase in redundancy level and a number of companies going bankrupt. This is on the negative side.
The positive side is that the unemployment is stable. We also see on the positive side that there's still a high level of activity in the Port of Gothenburg, which is good for Gothenburg. You know all about the CPI levels, was the highest since 1990 on October-October basis. If we look at December to December base, it was even higher. I think it was 12.3 or something. We will see what happens. Of course, there's been the negative with the war in Ukraine. We also saw the National Bank increasing the management rate, which I said before, up to 2.50. Also a lot of write-downs in economic growth by IMF and the National Institute of Economic Research.
We also see on the positive side, a change in component shortage and constructions prices are flattening. Construction prices are flattening out from a very high increase. If we look at the office market in Gothenburg, and now this is from both a full year perspective but also from right now, the vacancies is on a high level, has been on high level in 2022 but are stable. We don't see an increase of vacancies. We saw in all 2022 was an increase in prime rents and was much driven by the new office projects, a lot of new office projects in Gothenburg. We haven't seen any slowdown yet, but we expect that we will see a slowdown after the CPI increase.
We will, w e think that we will have a slowdown because of the CPI increase. We also have, as I said before, had a large volume of office projects due 2022, which all those have had a very good occupancy rate. We will see that 2023 is a normal year again. I mean, we had a lot of around 170,000 square meters coming out, new office projects in Gothenburg, 2022, and we will go back to around 40,000 square meters again, which is more of a normal year in 2023. If we look at the property market for offices, we have seen the prime yields beginning to increase.
We haven't seen it so much in transactions, but since we are doing property valuations, we can see that especially in the property valuations, there is an increase in prime yields. We have still very few transactions in Gothenburg, it's not many transactions that proves the, the increase of the prime is more, it's more in to the, to the financing situation that it should be, the yields should go up if the finance situation. I will go into that a little bit later in the presentation. There's, of course, a very great uncertainty going forward on the magnitude of the yield compression. The only thing we can know is we can learn from the history, and the history shows slow-moving yields.
We will have to see and wait and see what happens in 2023 going forward. If I go into the industrial and logistics market in Gothenburg, there's still a situation where we have almost no vacancies, still prime rents increasing. Although demand is a little bit weaker now from e-commerce, we have a demand from e-commerce and need for storage. We also see a product development close to Volvo VCC plant and the Gothenburg Port. All those three are drivers for demand for industrial and logistics locations. The prime rates have increased. We have, we were more sure on the industrial logistics market.
If we can see the yields have increased, there has been transactions, although there are few transactions also in the industrial and logistics market. There's also an uncertainty going forward on the magnitude of the decompression. This is all a slide on what we, where we have our property. You can see that, of course, it's a lot of office in the central Gothenburg, also in the northeast, southwest, and they're all mostly our industrial logistics properties in, is in the west, in Arendal and Torslanda. You can also put all the projects on the map here. If we look on the numbers in the earnest capacity, there is... Today we have in central Gothenburg, the fair value is now up to 58% of the office buildings in office property in central Gothenburg, and the operating surplus SEK 606.
Industrial and logistics is 16% of the investment properties, but 20% of the operating surplus. We have a really high increase in the operating surplus. That's because of the CPI index, of course, but also because that we have now, we are finishing projects and those rental values will come into the books starting now and going forward. Project properties are 5%, so that would be a total of the 27% in our fully owned properties. We have the associates, and I will switch slides.
The associates on the investment property side is three buildings. It's Merkur, it's Hålaberg, and it's Gårda Vesta, that's SEK 2.7 billion. Gårda Vesta is an investment property that is fully let. Merkur, we're doing projects, but we have finished one part and are doing a project in the old part. I will go into that later in this presentation. The associates with Bockasjö, the Sörred Logistikpark, SEK 1.2 billion in the fair value. Given this dimension, we are, as we said in the beginning, that if we look the change, we have done a lot in 2022, that's differs.
We have focused more on the keys, on the ownership. We're still focusing a lot on development, but we have not focused as much as on transactions. We've been more on the selling side than on the buying side in 2022. That's a big difference for us. We have been growing with transactions now for a lot of years. Since the change in the climate, macro climate, we have been a little bit more careful with the transaction and keeping the LTV lower than we usually. We usually want to be on the around 50 in the LTV. Now we're down to 44. That's a little bit of a secure measure for the company. This is how the 2022 looks.
You can see that we are still investing in our properties. SEK 1.4 billion 2022 compared to SEK 1 billion in 2021. We haven't done any acquisitions, it's 0, but we've done a lot of sales. Mostly, the sales are mostly because of the Södra Änggården that we was legally enforced, and that triggered us to start the selling. It has been really good for the key ratios for 2022, given the climate. Also good for the changes in value for the company. If you see on the historical part, we can see that there is a change.
The average, if we look at the value changes, average in 2014, 2021, you can see that usually around 40% comes from yield compression, 20% from operating surplus, and 40% from projects. That's been completely different in 2022, where the yield has is a negative value changes, and operating surplus is more positive than usually. That's because of the CPI indexes and also from the renegotiations, but mostly from the CPI index increase. Then you can see the project is a very important part of the value changes.
I think that will be a key success for Platzer in the beginning, that we can generate our own growth and therefore do our own value changes that will if the deals are moving up for increasing more, then we can the projects can be the ones that we are lowering the gap between the value decreases of from yield can lower, we can lower that with the projects value up in the projects.
This of course is an increased value in the portfolio, although it's been not as a high pace in 2022, but we still have a nice curve that takes us from 2013 when we got listed to 2022. I think that we can continue to increase, although we will have to look at the pace every year now to see on the circumstances of market circumstances. I will hand over to you, Fredrik.
Yes, thank you. This is a spreadsheet over the rental income, 2022 compared to last year, where we have in comparable properties, we have an increase of 5%, and for the whole company, it's about 2%. We have in the properties that are diverging year on year, we have those singled out as for property transactions and so on. It will be easier to follow what's the going concern and what is diverting from that. Our economic occupancy rate has increased for the year, which is really good, talking about keeping our cash flow tight. We go from 91% to 92%.
Our income statement as a whole, as P-G mentioned, we are hard focusing on our cash flow. We have a good increase in our operating surplus for the year from SEK 923 million to SEK 939 million. We have a moderate increase in our income from property management. There we are, of course, we are limited because of the financing costs that are increasing. If you compare year-over-year, more than SEK 20 million more for the last quarter alone. It's a challenging time to keep the pace there.
We have a good year in... really good year regarding the change in value of properties, as you see, SEK 2.6 billion for the year, mostly due to our project and project development pipeline. We also have a positive year regarding the financial instruments. If we look at the last quarter alone, we still generate a good cash flow. The income from property management, as I mentioned, is affected by the financing costs, of course. It's not the same pace as 2021. The big difference is that we have the negative value changes regarding our properties and financial instruments, which delivers a negative result for the quarter. In those financial instruments, there's also the... Where we adjust for the buyback agreement, connected to Kineum, which is, which was the last time we will have that on that row.
Going forward, it will only be the derivatives portfolio on that row. Positive net letting. It's not just now we have a good situation and deliver a good cash flow for the year. We have a positive net letting which tells us that it's still a comfortable period for our tenants or potential tenants. They still want to sign lease agreements and want to increase the square meters that they will rent from us. We have a really good year in our lettings in investment properties as well as the project properties.
If you add to that our terminations is more less than previous years. It's a really good situation regarding our net lettings. That gives us comfort going forward. In our key figures, if we should focus on something, as PG mentioned, we have a low loan-to-value ratio. We are down to 44%. We were at 40% at the lowest, and that's the record low ratio for Platzer. It gives us comfort to have that leverage. We have up to 50% loan-to-value, and if you look at the surrounding market conditions, it's a good safety margin.
We are a growth company, so the trend is that will increase because we still want to invest and do good projects going forward. It's a comfortable level, and we will use that to our advantage. If we look at the cash flow impacts and the financing costs impact on our cash flow, you can look at the interest coverage ratio, which is going downwards. It was 4.1 last year, now we are down at 3.5. If you look at the interest rates all around, it's not a bad guess that will still go down before it turns up. What do I mean about that? It's going to be a bit worse before it gets better. That we all know.
We will see what the Riks Swedish Riksbank, Swedish National Bank will do here in February and April, and we will see what the market conditions in financing will give us. Our substantial value is a good increase. We got a real good boost this year with a SEK 2.6 billion in value change in properties, but we also deliver good results. We have a 21% increase in our EPRA NRV, which is close to net asset value. And that's a real solid trend. It's going to be challenging next year, but we will still deliver our cash flows and deliver in our project development. We will see about the next year's chart. This is a comparison with the share price.
As you see, when we look back historically, we have a solid trend with the value we create on our own, the blue line. Then we have the share valuation that tends to divert from time to time, but it still follows the same trends. We will continue to deliver on an upwards trend, and then the share price will follow. Though we have these challenging times, we can't stop focus on sustainability and see to it that our impression in climate changes is as small as possible. We are committed to the SBTI targets, the Science-Based Target initiative, where we will diminish the Scope 1 and 2's CO2 emissions, and we will start measuring the Scope 3.
That's a challenge to get the good measure and the good solid data and start reducing those going forward. What we are doing for coming year, we are increasing our investments in solar power. We are, I think it's about 16 of those out in our property portfolio we will install during 2023. We will have more solar-powered properties during the year and going forward. Our green financing share in the portfolio, it's up to 67%. It's not a huge increase if you look year-over-year. We were above it, 70%. Due to the transaction in Q4, the financing and we haven't done the end financing yet, we will start delivering on increasing the green financing going forward.
The tax-taxonomy, EU taxonomy will make it harder and which is good, which will challenge all the companies to deliver better and more less climate challenging development going forward. It will be more focused on sustainability-linked financing and green financing, of course, where it is possible. If you look at the portfolio and our loan maturities the coming year and you take the into concern of the capital market, which is interesting for all of us. We have the commercial paper market which has gone down to a all-time low for Platzer during the year, but we are trying to keep pace and deliver to all interested investors. We have about SEK 0.3 billion, which is part of the first gray column in the chart.
The other part there is 1 secured bond which has been refinanced, which will go over to bank financing in February. The next bond, capital market refinancing is in Q4 2024. Our exposure to the capital market is really, really, really, really low, and we are dependent on our good relations with our banks, which keep good interest in financing Platzer's journey forward. One part of our loan-to-value ratio is our delivery on the transactions in Söder and Gården, which came into play when we had the plan was legally binding in Q2.
We have sold and delivered properties from stage... All of the properties that was already sold in stage one and one of the properties in stage two already, which has given us good cash flow, and we have increased our loans in the company during the year with this. It strengthened our balance sheet. We were down to 40% loan-to-value, and now we are at 44. One part of that is the acquisition of Kineum. If you remember what P-G said, we have no acquisitions. Regarding Kineum, it's because of the financial reporting in IFRS that Kineum has never left Platzer's balance sheet regarding property value. Therefore it says 0 transactions there. We have 1 acquisition.
We bought back our part, the 50% that NCC owned, we bought in December from NCC at the agreed property value. We had preset the conditions for that transaction, therefore it's SEK 3 billion, but the market value we present in the report is at SEK 3.2 billion. That we have now fully owned, and most of the tenants has already moved in, and there was a grand opening for the hotel in November. The property is looking good, and our tenants, I think, are happy to be in that beautiful building in Gothenburg. With that, I hand over back to you, PG.
Yes. I will lead you through our projects. Now, we talked about the ownership, and we talked about the transaction part, and I will now talk about development part. One of the development we have in the future is Gamlestadens Fabriker. We have talked about it before, and so I won't be going for a long while, but this is the next area, one of the next area on the office side of Platzer that we will start to develop now that we're working on renting out. Hopefully we will be able to have some good communication about this in 2023. We will see that.
As we now, it's the last time, this is the major projects underway on the page, I think 19 in the report. This is the last time that we are having Kineum in this chart. Now since we have bought it, and it's a fully an investment property, we will put it out. This is how it looks in the Q4. We have office buildings for a total investment of SEK 4.35 billion, a rental value on SEK 255 million, and a yield on cost that is 5.0% if you take into account that the buildings had a fair value when we started, and you take that value into account.
If you put that value out of account and just take the investments, and that's not part of the 4.35, we will have a yield on cost around 6.3%. If you look in our industrial and logistics projects that are not on the same way with what we started with fair values from buildings, but we start on gravel from a gravel level. It's more a development project. In those projects we have now invested, we are investing SEK 2 billion, and the rental value is up to SEK 120 million. You can all read about that in the report.
The yield on cost is up to 5.9, and we are trying to increase the yield on cost on the industrial logistics with higher rents. The aim is to go above 6%. There's good occupancy rates in the projects. This is the chart which I think everybody can read after the presentation. What this shows you is how the comparison between the major projects and the earning capacity. That's sometimes difficult to read those charts and to translate them. You will find all the numbers in this chart and the numbers in the report.
Hopefully this gives you a little bit better opportunity to look and to translate what's in the project report side and in the earnings capacity in the report side. Fredrik talked about Kineum, so this is the last time we will have it as a project in this. This will put this away in the future. Today, the last project report now, we report 93% occupancy rate, and that's in the old building. The new building is fully fully let. Working on the old building. We have high environmentally certificate. It's a BREEAM in Excellent and also BREEAM In-Use Excellent. This is a really good building from all points of view.
Arenaskullen, 7,000 square meters. I won't say very much on each projects because it's a lot of projects and you can read about also in the report. It's a 100% occupancy rate. Tenant is Etex and is being completed now in Q2 2023. Aria, which is the largest after Kineum, is the largest office project. Is an old building that we are redeveloping, and the investment is not SEK 1.2 billion because the fair value from start was SEK 843 million. The new rental value we are aiming on is SEK 61. Today, we have an occupancy rate on 47%, and the completion will be in Q3. And we are aiming for BREEAM In-Use Very Good. Hopefully, we can...
We are aiming for Excellent, but there's some difficulty to get to Excellent. We are now in the very, very good level, and hopefully we can do a little bit better than that. No promises. Another industrial logistics or project is Sörhåla, the phase one, which is close to the Northvolt and VCC electrical plant. This is also for Etex, 100% full, it's fully let 100%, and it's being completed in the Q3 2023. Next to that, we have the phase two, which is 59% today occupancy rate, and the tenant there is VCC, and they are now, it has been VCC.
We are now moving, switching the tenant to World of Volvo, which is a joint venture between VCC and AB Volvo. Here we have still some location on to rent out, but we are confident that we will do that before the completion. The English school, it's being now in the building mode. We are doing that project is on the way. It's due to completion in Q3 2024 for the starting at school. This is gonna be one of the, their top schools in Sweden. They're really happy with the, with this, the architectural and everything on the school.
This will be a really nice school to for them and also for us too. Now moving to the associates, the JV projects. The first one is started 721. It's, it's with Bockasjö, the JV with Bockasjö. This one is also 100% fully let. Tenant is Volvo Cars, it's due for completion in Q2 2023 or Q3, maybe. We hope we are aiming for BREEAM Excellent. The next is the 812 project, which is 4 buildings. It's going to be 4 properties also, but today it's 1 property and 4 buildings. The first part of it, V1, is 100% fully let to Schenker and AB Volvo. It's being completed in Q2. Next building in that property is V2.
Also 100% fully let to Sportshopen and will also be completed in Q2. We have decided also, this is all the buildings in Gårda 8:12. We have decided to start even the V4 project, although we don't have any tenant yet. This is the next step in the 8-12. We are waiting with the V3 project and starting the V4 project. Finally, the office project that is, we really think is a really fantastic project where we have built a new building next to the old building. The new building is was finished 2021, and now we're working on the old building as a project. This is...
will be a really nice building in the future. It's really interesting project where the old house is not as straight as you should think. It's in the clay, so it has been moving during the years. That's also a nice challenge. Will be a really nice whole building in the future, where this will be one building, not two buildings. This is how it looks. The old building on the left side and the new building on the right side. You can see they are connected. You can see it on the right side there. They are connected. Yeah. Finally then, why should you invest in Platzer?
It's still the same reasons that we have said before. It's an investment in Platzer is also, if you like Gothenburg and you think Gothenburg has a good future, you also think that Platzer is a good investment. We are gonna start or continue focusing on commercial property. We will grow in Gothenburg. We have our clear model for our value creation. We talked about this in the beginning of the report that we are focusing more on the development and the ownership than in transactions. We will see how that will be in 2023. Depends on the market situation. We have our development project portfolio. We will continue to do profitable projects.
That's a good way of having the value changes, generating our own value changes, although the yields will increase. We also, as Fredrik said, we also have a high. We're very keen on the sustainability. It's very important for us to do everything on a sustainable way. I will stop there and leave the room open or the net open for questions.
If you wish to ask a question, please dial star five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial star five again on your telephone keypad. The next question comes from Albin Sandberg from Kepler Cheuvreux. Please go ahead.
Hi there. I have a question about your comment about you're expecting some slowdown in rents after the CPI adjustment. Does that mean negative growth or just a slowdown of the positive growth?
Just a slowdown on the positive growth.
That's despite this, supply that you related to the Gothenburg office market, it feels so strong that it can manage.
Yes. I mean, the new buildings or the new projects have higher rents. They. You will expect. I mean, the old buildings now got 11% up as well. We think that more than that will be challenging, but not less. I don't know.
Yeah. Would you say that those assumptions are also included in your valuation of the properties as of?
Yes
as of Q4? Yeah.
Yes.
I know you write a little bit extra about that, PG, in the report about, you know, having externally valued, I think 2/3 of the portfolio discussed with valuers and so on. Could you share a little bit more light on sort of other assumptions that you're making for 2023? Do you feel.
Yeah
... there's a cushion or. I mean, it's one thing what you're seeing on the yields today. In the presentation, you have a little bit of comments on potentially yields continuing to move up. Would you say that that is also taking into account for what's happening in 2023?
I mean, we're trying to make as good assumptions as ever. All assumptions is always not. We're not putting any cushions up or down. We're trying to make the best guess. Problem is that you don't have any transactions. That's why we have been talking a lot to the external valuators. I mean, Valuation is not a 100%, everything is not 100% set. It's you have to do some valuation all the time. Of course it's, if, and in this type of situation, it's more of a discussion than before.
I would say that we are trying to do the best guess on what the market is today. What we have done to the variables is that we have the, of course, the CPI for 2023, and then we have 4% up index for next year, and then 2% in the future. That's in discussion with the external valuator. That's that we have all both in our internal valuation and in the external. That is one of the things that we have discussed and we think that we have agreed on.
Yeah. That's good. Just one comment, sorry, one question on the financing also. What's your feel if you look at what happened during 2022 in terms of all the bank margins, progression? If you can say anything about that.
Do you wanna answer that question, Fredrik?
Yeah. I can do that. I take that. We have the increase in margin. We have that already during 2022. If you compare where we were in Q1 and where we were in Q3. There we had an increase in basis points, but based on insecurity looking forward. I would say that has stabilized, so it hasn't been any more growth in insecurity or margin. We pretty much know what kind of market we are refinancing in right now. It has stabilized, but in higher levels than we had in Q1 2022.
Yeah. Can you put a firm number-
Was it around 20-30? Wasn't it that? Isn't it that?
Yeah. Yeah, 20 to 30 basis points is what we have indicated.
Yeah. Yeah.
Okay. Thank you very much. Those were my question.
As a reminder, if you wish to ask a question, please dial star five on your telephone keypad.
Yes. There is no question in the queue right now, so I will take a written question from Simen Mortensson at DNB. He's writing that we have SEK 5 billion in credit maturing within 1 year and another SEK 2 billion next year, the year following on that. He wants to know how that will impact our financing costs, what kind of margin hikes is to be expected. It's related to the same question Albin had. We have to look at what kind of financing is maturing as well. We have SEK 1 billion in co-construction credit that we will refinance. There we will have an upside looking at the margin.
disregard of that, it's still the 20 to 30 basis points in hike we had during 2022. That's what we are handling going forward.
There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.
Yes. That was all questions, that's in the queue and on the written questions. I will say thank you very much to all that has called in. PG?
Yes. Thank you very much for listening to our presentation.