Welcome to Platzer Q3 2025 report presentation. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key five on their telephone keypad. Now, I will hand the conference over to the speakers: CEO Johanna Hult Rentsch and CFO Jakob Nilsson. Please go ahead.
To begin with, I would like to welcome everyone who is tuning in and extend an especially warm welcome to you, Jakob, our new CFO.
Thank you.
We will be co-presenting this presentation together. My name is Johanna Hult Rentsch, and we will take you through this presentation. We are in a fairly similar market and economic climate as we were in the previous quarter. Over the summer, the tariff agreement has been finalized, providing greater predictability towards the Gothenburg export-intensive business community. My assessment is that when the economic turnaround does come, it will also be reflected in the rental market, albeit with some delay, of course. In this environment, we have improved our property management result by 30% since the start of the year, and this outcome remains steady. Our industry and logistics segment continue to be the driver with the strong demand. This week, we have signed a major lease agreement for just above 10,000 sq meters at Arendal Port View, our future development of the Port of Gothenburg.
We are continuing to grow in the industry and logistics segment, which is now approaching the size of our office segment in terms of square meters. This segment drives the portfolio and diversifies us and complements us to the slower pace of the office market. We have accelerated the pace of our transactions and completed several deals so far this year, which gives us greater leverage and flexibility for future investments. We have acted both as sellers and buyers, all part of actively rotating our assets and managing our portfolio. We continue to strengthen our financial situation in terms of flexibility. Last quarter, we had a positive net letting and announced that we would be receiving the lease termination from Nordea. That has now happened, and Nordea has given formal notice.
This is a major impact of the quarter's negative net letting, SEK 30 million out of the SEK 41 million. Our work with our customers is a major focus in the company right now, and our team is working really hard and has so far this year generated a 7% increase in rental income and a 6% increase in operating income. Our new asset addition to our portfolio, Mimo, has made a significant contribution to this result. Here we present the summary of the third quarter in numbers. In this single quarter, income from property management was up 9%. This development is explained by an increase of operating surplus, mainly from Mimo, and we have also improved the financial net. The comparable portfolio is also contributing positively.
What differentiates quarter three from quarter two is that the rental income growth declines due to Mölnlycke Health Care lease termination on the 1st of July, as well as the fact that the comparison period in 2024 had a rental income from the English School, which was sold during the beginning of this year. Jakob will dive a little bit deeper into these figures shortly. We have also, as I mentioned, after the end of this period, made this letting of 10,400 sq meters in Arendal Port View. That will be added to the net letting of Q4. Looking into the net letting, and to elaborate a little bit further on these figures, as I know that you will be interested in this topic. The net letting of -SEK 4 million-SEK 1 million is built up in this way.
30 million is the Nordea lease termination, and if we look then into what the rest contains, you can see that SEK 10 million is renegotiations with tenants that remain in our portfolio, and it also includes garage, construction, site establishment, etc. 2 million is bankruptcy. It's actually a restaurant in one of our joint ventures, and it's 4 million that is vacating our portfolio, tenants that will actually leave us, and 5 million is new lettings and new leases that we have signed. Q3 is a very short quarter. It's only seven weeks of actual work, and on average, the quarter usually accounts for just about half the office lettings compared with other quarters when I look at the historical figures in the entire Gothenburg office market.
We are, of course, pleased to have been able to announce another excellent letting in the industrial and logistics segment after the end of this quarter. What has happened? What are the major events in this quarter then? As mentioned, Nordea has terminated their lease, but we have also extended parts of the current lease agreement, and they will vacate their premises only at the end of March 2027. The net effect for us is positive, about SEK 4 million . We have also taken the opportunity when Nordea will vacate to transform this building and the entire block. We have already started, and we have opened a new restaurant, adding to the service to the tenants. The building will also later connect to Skanska's new office block and open up internally towards the station entrance of Gothenburg.
Mimo in Mölnlycke has now reached an 88% occupancy rate after several new lettings during the summer. It was 80% when we took over the property here last December. We have also successfully concluded and secured a large renegotiation with Folktandvården at Medicinaberget. It's about 15,500 sq meters, extending the agreement and securing income for another six years with the same rental level. We have given the tenant a rental discount of about SEK 7 million, but that's accrued over the rental period. Hence, given the site agreement, there will be a negative impact on the rental development for renegotiations due to this rental discount. No CapEx or tenant fee will be due. If we then look into our customer structure and our 10 largest customers, we have a very well-diversified rental structure in terms of both geographical distribution and the mix between offices and industrial warehouse tenants.
The 10 largest tenants account for 35% of the total contract value. As you can see here, the majority of the customers are in the public sector, municipalities, authorities, and so on, as well as the industrial and logistics and one hotel group. The average remaining contract period was four years. What we also can comment here is that we have an occupancy rate that is 91.5% in the portfolio and a retention rate that we measure continuously at 83%. Our office portfolio and industrial and logistics portfolio are approximately at parity in terms of area right now. We can also see here that we have really nice building opportunities going forward. I will dive in a little bit more into the industrial and logistics. The activity in this segment remains high. Demand is strong and vacancies are low. It's about 4%.
Thanks to the limited supply of zoned land and the absence of speculative developments, Gothenburg, as a logistics position with its port, railway, and airport, makes Gothenburg Sweden's leading logistics hub. Our portfolio, partly situated in the actual port, enjoys a stable rent development and low vacancy rates. This segment is prioritized for our continued growth. We have been very active in this sector in the recent months, and we intend to remain this momentum going forward. Here are a few examples. We have acquired an industrial property in Tuve, which contributes with a strong cash flow and future development opportunities. We have also initiated a new project with Speed Group, who is the main tenant in Sörred Logistics Park, our joint venture with Catena. We have divested another project that was completed in Sörred Logistics Park.
As announced this week, we secured this lease with a major industrial player, where we will kick off this new development in Arendal Port View. In total, the whole development is 55,000 sq meters. This specific lease is 10,400 sq meters. We have really highly set climate targets here and very ambitious goals to reduce our footprint within scope three of about 200 kg CO2 equivalents per sq meter. Here we see where our development of Port View is located, and we can also see the location of our portfolio on this photo. Arendal and Torslanda, that's the Nordic region's most attractive locations for industry and logistics, and I think this picture actually explains that. Stena Line will relocate its ferry operation in the area in 2030, and we are pursuing continued development here.
In this first phase, there is an opportunity to develop an additional 80,000 sq meters of modern logistics space in the proximity of this land. The port then, the Port of Gothenburg actually carries a third of Sweden's total export, and more than half of the country's container traffic passes through Gothenburg's harbor. It is the only transatlantic port, and it's growing in importance. Our property is located in this unique area in Sweden's primary logistics hub. A little bit about the office market. The transaction volumes in the Swedish property market as such have increased significantly during the first three quarters of the year. According to a recent analysis from SWEFA, the total transaction volume is up 27% in Sweden. The recovery was particularly noticeable in the third quarter with a volume which is the strongest quarter since 2021. The recovery is broad but not really evenly distributed.
Stockholm County is continuing to dominate. Greater Gothenburg area is catching up and shows the strongest recovery since 2020 and now represents about 18% of the transaction volume. However, no major office property transactions were carried out in Gothenburg during the third quarter. The transactions that have been taking place at the end of 2024 and beginning of this year have confirmed the market-assessed yield requirements. My impression is that there are more prospects to evaluate at the moment. There is plenty of available capital in the system, and considering the spreads, transactions in the office segment should pick up also in Gothenburg going forward. Prime rental remains stable. Office vacancy in Gothenburg stands around 13%, mainly due to large volumes of new production of offices added a couple of years ago. I will return to this shortly.
The proportion of internal relocations, in other words, agreements where tenants move within the existing landlord's portfolio, is higher than last year, almost 30% up, which is a signal that competition for tenants has intensified. It is an advantage for us as a major landlord in Gothenburg with local knowledge to our customers. The trend of tenants demanding location with good transport links and high standards continues, and we know that there is a willingness to pay high rentals for quality amenities. The take-up in the central Gothenburg office rental market has decreased over the last three years but remains at a relatively high level. From the peak, it was around 130,000 sq meters in 2022, and take-up is expected to reach just under 100,000 sq meters by the end of this year, according to Citymark.
The average rental trend for the central parts of Gothenburg shows that rents have increased by around 4% per year since 2020, and rental levels have remained stable over the last year, which is also the primary outlook for 2025. Thereafter, rents are expected to rise about 1% per year during 2026 and 2027. In 2028, the improved vacancy rate should contribute to a further small increase in rents, according to Citymark. If we look at the increase of vacancy rates in Gothenburg, it is primarily due to the addition of new offices that have been brought into the market, rather than a pronounced trend of tenants reducing the space requirements.
The median letting in Gothenburg is currently 300 sq meters per agreement, which means that the effect of space reduction is not as pronounced as in Stockholm, as each agreement is smaller, and both rental levels and the potential of cost savings are not that high. Over the past five years, the stock of offices in central Gothenburg has grown from just about 1.8 million sq meters to about 2 million sq meters, corresponding to an average annual growth rate at about just over 2%, as you can see here. Such large additions have been difficult to absorb. I would say that this 1.5% is the normal economic. During normal economic conditions, this is what the market can absorb. This is what it has been looking like the last five years. Going forward, on average, the addition should be around 1% up to 2027.
After that, no new construction has been initiated. For anything else to be completed after 2028, construction needs to begin now. With this conclusion, we will see that the vacancy rates most likely will go down. Standing out in Gothenburg, compared to other cities, is that the vacancy rate in the central business district is one of the highest in the market, despite location and connectivity. It's approximately 15%. This is primarily due to infrastructure investments, which have caused traffic issues and prompted many to relocate from areas such as Lilla Bommen and Central Station district. Examples of such projects include bridge work, the Westlink railway project, and district heating upgrades. Market activity has been concentrated to the central parts of the city, with about 60% of all new letting taking place in the CBD during this year.
My assessment is therefore that we will see continued competition for office tenants for some time before the situation turns around. However, I do believe that the change will come. Let us look at some of the fundamentals behind the future expansive drivers of our region. Since 2009, the economy in the Gothenburg region has grown by 67% in real terms. This is almost twice as strong as the Swedish average and more than three times as strong as the euro area average. It's almost on par with China. In terms of percentage, Gothenburg has grown more than the capital over the last 10 years. We continue to see population grow, albeit at a low rate. Over the last 12 months, the number of inhabitants has increased by 0.9%. That is higher than Stockholm at 0.7% and Malmö at almost 0.1%.
The population is also younger, with the highest population proportion in the age group of 20 to 39 years. Gothenburg is cementing its position as a Swedish innovation engine. The R&D intensity in the Gothenburg region is more than twice as high as in Stockholm and the rest of Sweden. Gothenburg also stands out internationally with the world's 12th highest density of inventors and researchers. This should be put into the context that Sweden is ranked number two in the Global Innovation Index, which is extraordinary for such a small country as we are. Another driver is the Port of Gothenburg. A third of Sweden's total exports and more than half of the country's container traffic passes through this port. The container volumes continue to rise.
A seabed bridging is ongoing, and that is to accommodate the world's largest fleet of vessels, as well as more environmentally friendly, such as the harbor expands its electrification and charging points to strengthen the city's role as a logistics hub long term. With these strengths, together with Saab that is expanding, they are, for instance, opening a new facility in Mölndal that will create 500 new jobs. These are examples of fundamentals that underpin the long-term growth of our region. With those words, I will hand over to you, Jakob, who will take us from this helicopter view and into a little bit more detail about our specific growth of Platzer.
Thank you, Johanna, and good morning, everyone, listening in. It's a pleasure to be here presenting my first quarterly report as CFO at Platzer. Let's dig into the numbers. The company continues to deliver solid growth in the quarter. If we look at the income from property management, the growth in this quarter is 9% compared to the same quarter last year. If we compare it to the previous quarter, Q2 this year, we had a growth of 16%. The main reason for the lower growth this quarter compared to Q2 is that our tenant, Mölnycke Health Care, vacated its premises on July 1st, which we have communicated earlier. In addition to that, last year we had rental income from the English School, a property that was sold in Q1 this year. Despite this, we are still showing good growth in both rental income and net operating income.
That's mainly driven by two factors. One is a positive performance in the like-for-like portfolio and contributions from, in particular, the acquisition of the Mimo property in Mölndal. Of course, the financial net also plays an important role in the income from property management. In the third quarter, our financial net was SEK 10 million better than the same quarter last year. This is a result of focused work with the finance function leading to both lower average interest rates as lower credit margins and also, of course, supported by declining market rates. All in all, this translates into an income from property management of SEK 198 million, corresponding, as said, to 9% growth compared to the same quarter last year. For the first nine months of this year, we have a growth in income from property management of 13%.
Moving from cash flow to property valuation, our property values are remaining stable and just under SEK 30 billion. We report a small unrealized value change of SEK 20 million, and that's driven by cash flow changes. The yield remains the same as last quarter, 5.1%. As we said before, the economic downturn continues, and you can see it's also reflected in the investment volumes, which are low, SEK 60 million in the quarter. That's basically driven by the fact that we have not initiated any major projects and also tenant fit-outs that are progressing at a lower pace. As Johanna said, and as you know, the company has worked hard to adjust its capital structure following the acquisition of Mimo in Mölndal that was done in the end of last year. The transaction activity was high during the first half of the year.
If we look at the net investment so far this year, the first nine months, net investment amounts to -SEK 733 million. The transaction this quarter is the only transaction that we completed, the previously communicated sale of a logistics property in our JV with Catena, and that's an underlying property value of SEK 385 million. If we look into next quarter, quarter four, we will close the acquisition of the industrial property in Tuve, which we acquired in Q2, and that's an investment of SEK 174 million. The combination of the strong underlying earnings, the stable property values, and the divestments that have been carried out during the year has strengthened the credit-related KPIs. The interest coverage ratio has improved to 2.5% in the quarter. Net debt to EBITDA is at the quarter 10.9% and rolling 12%, 10.8%. The loan-to-value ratio calculated for the total assets is 47%.
These are a level on the LTV ratio that we are comfortable with and in line with where we want to be. To sum up, we continue to show solid growth, albeit at a slightly lower pace than previous quarters, with stable property values and strong improving financial KPIs. Finally, also just mentioning the bottom line, the profit after tax for this quarter is SEK 210 million. The result is impacted by value changes on derivatives of SEK 72 million+ . Let's take a closer look at the key drivers behind our performance this quarter, broken down across the like-for-like portfolio, the project portfolio, and the transactions. We will start with the revenues and rental income on the top. We continue to see growth in the existing portfolio, but the largest impact is from transactions, where Mimo is the main driver.
The decline in revenues within projects, that's mainly reflected by Mölnlycke Health Care's move out on July 1st. Overall, revenues are up 4% in the quarter, compared to 6% the previous quarter, and year to date, we have an increase of 7%. If we look at the property costs in the middle, these are higher compared to the same quarter last year. However, only SEK 1 million higher from the like-for-like portfolio. The remainder is mainly from transactions reflecting the larger property portfolio. In total, the net operating income in the like-for-like portfolio increases the NOI by 1%. Last quarter, it was an increase by 2%. If you look at projects and transactions combined, they also add 1% in growth, resulting in a total 2% growth for the quarter. If we look at the year-to-date figure, the growth is 6% in NOI.
Moving on to our financing and credit KPIs, as said, they continue to strengthen over the year. We experience a strong support and good collaboration with our banks, and we also see good access to the capital markets. During the quarter, we took advantage of the strong capital market by being active issuers on the bond market. We issued two new MTN bonds, SEK 700 million+ SEK 200 million. In addition to that, through Svensk Fastighets Finansierng, we raised another SEK 195 million. We think all of those were done on an attractive level. The total of those issuings, a little bit above SEK 1 billion, you can say around SEK 600 million of those were refinancings. On the bank side, we repaid a bank loan of SEK 330 million, which was refinanced then by lower margins in the capital market.
We also, during the quarter, reduced our RCF volumes. Overall, this gave that the net debt decreased by around SEK 200 million in the quarter. If we look at the capital duration, virtually no change since last quarter. It's 2.2 years now. It was 2.3 years last quarter. If we look at how that is spread, it's the graph on the down-left side. You can see that there's 35% that matures during the next 12-month period. To be noted, there is that 5% of those basically certificates. Given the strong credit market, our solid relations with the banks, and also the flexibility we have built in our financing, we don't see that as a concern for us, and we have dialogues ongoing with banks. On the interest rate side, we entered into a new swap this quarter of SEK 250 million, and our average duration remains at three years.
In total, if we look at the average interest rate, it's now three basis points lower than the end of June and 15% lower than at the year-end, basically driven by lower market rates or STIBOR. As mentioned, Platzer has significantly strengthened its financial position this year. Combined with the larger liquidity buffer and the recent credit rating upgrade, this gives us a much stronger position to deploy the capital actively, and we hope to be even more active in the transaction market going forward. Let's move from financing to sustainability. I'm going to highlight a few areas where we are working continuously in the business. First, we continue to work actively with the energy efficiency in the portfolio. During the first three quarters, we reduced the energy consumption in the like-for-like portfolio by 4% compared to last year.
The forecast to reach our target of 70 kW-hours per sq meter looks promising. A good performance in the first nine months. We have also implemented a new interior concept for tenant fit-outs. If we look at reference projects, we can see by that that we can reduce the climate impact up to 40%. We calculate the climate impact on all our fit-out projects going forward. Finally, the green and sustainable financing, we are now up to a level of 73%, which is an increase of 12% during the past 12 months. We hope to, and I think we will, increase that even further going forward. Thank you.
Thank you for that, Jakob. What is our focus going forward? Of course, our core business, our customers, and focus on our vacancies remain one of our greatest potentials for cash flow growth and earnings. We also continue to develop our industrial and logistics projects, which are quickly generating operating income and leverage and helping us to grow our portfolio. In today's call, I have provided you with several examples of how we do this and how we create this leverage and what we are planning going forward. During the years so far, we have also been very active in the transaction market, and we will continue with these strategic transactions on both purchases and sales to reposition our portfolio.
We have started a new development with the Speed Group, and we have divested another project in Sörred Logistics Park, and we have also started this project here shortly now in Port View Arendal . A piece of another good news is that we are, in September, recognized with this award, Listed Company of the Year by Catena. This is a testament to the expertise and commitment within the company and all employees who contribute every day to drive us forward, as well as to improve our operational development and our success. With this, I would like to thank my team and also thank you all for listening in. We are open for questions.
If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. There are no more questions at this time, so I hand the conference back to the speakers for any written questions.
We don't have any written questions coming in to us at the moment, and we would like to thank you for listening in. When you come to the end of this day, I hope you will have a good weekend. Thank you.
Thank you.