Report 2019. Today, I am pleased to present CEO Ilija Batljan. For the first part of this call, all participants will be in listen-only mode, and afterwards, there'll be a question and answer session. I will now hand the call over to your speaker. Please begin.
Hello, everyone. My name is Ilija Batljan, and I'm CEO of SBB. Thank you very much for attending. Let me start to point out that SBB is today the largest player in most safe asset class in the world in Nordic social infrastructure. The largest in Nordic, and we are probably among the largest in Europe. Slide two, please. If you look here at the development last 12 months, I think the best way to describe it and the best way to understand where SBB is heading is to first look what we have been delivering. Last quarter, we are delivering profit of SEK 1.3 billion, which adjusted for non-recurring costs relating to transaction refinancing and the repurchase of bonds amounts to SEK 1.4 billion, which is strong increase compared to the corresponding quarter of the previous year.
At the same time, you can see that we are delivering strong net operating income that is following by increase in cash flow for the last 12 months with more than 200%. On top of that, the most important message is our earnings capacity rolling 12 months with very strong performance. You can see that we have a rental income of SEK 5.2 billion and NOI of SEK 3.7 billion. At the end of the day, adjusted operating profit of SEK 2.8 billion or SEK 2.29 per share.
If you look here and take into account dividends to the shares and preference shares, and take into account the run rate synergies after tax from Hemfosa, you will see that we will be able to deliver at the end of the year a profit after all dividends, excluding dividends to A and B shares of SEK 3.34 per share on 12 months rolling. Next slide, please. We are, as you know, long-term reliable partner for municipalities throughout the Nordics. Just two weeks ago, we did our first deal in Denmark with a Danish municipality. You see that still nine of 10 of our crowns are coming either from government direct or indirect or Swedish rent-regulated residentials. Next slide, please. Financial performance, SEK 596 million in income in the quarter. Strong increase comparing to the Q4 2018. Continuing increase in net operating income.
Still relatively very high yield. Yield 4.8%, I could sell all of the assets probably at a value that is between 20%-30% over this. 4.8% is not appropriate yield for this kind of asset. Property value, SEK 79 billion, SEK 70.5 billion, SEK 24.9 billion in EPRA NAV. As I said before, very strong earnings capacity on 12 months rolling. We still continue to improve our credit metrics. Earnings per share for last quarter after all dividends, SEK 1.51 per share. Next slide, please. Just two slides about the assets. As I said before, 94% of the portfolio is social infrastructure, 77% community service properties, and 17% residentials, 6% mainly our land bank. I will come back to that. That is very important point. Very strong portfolio of the building rights.
If you look at our presence in our four countries, you will see that 65% of our assets is in the largest regions and largest cities in the Nordic, with Stockholm on the top with 27% of total property value. Next slide, please. Just a deep dive slightly deeper in the different parts of portfolio, social infrastructure or community service properties, which means elderly care homes, schools, LSS housing. We are largest player in the Nordics in these spaces. Municipal and governmental agencies, 77% of total value or SEK 61.5 billion, in Swedish crowns. Rent-regulated residentials, 17% of total value. We own those assets only in Sweden because of the low rent and regulated market and good upsides from refurbishments. The SEK 13.2 billion in total value, 17% of the value. Finally, as I said, an amazing portfolio.
I will come back to comment that even more. Amazing portfolio of building rights in the best locations. You have a slide of City of Nyköping where we own quarter of city center with own entrance to central station. You can just get thrilled about how much upside potential there is. Next slide, please. What is then in the long run, the main driver behind our business? Those are three underlying mega trends that are shaping our business now, and it will continue to shape in next 30 -50 years. The first one is, of course, demographic change combined with urbanization. We see that our cities are growing. Stockholm and Oslo, that are our largest cities, are the most growing cities in Europe last five years.
On top of that, we see a force that is going to change the industry, that is also going to change financing and which is issue of sustainability. We have been pioneer of working very hard with sustainability across the perspectives, both ecological and social and economic. Now we are also launching our sustainability vision 2030, where we are promising to be 100% climate neutral, but also focusing on different areas of social sustainability, both in our neighborhoods but also within our space. For example, we will do investments in providing shelter for refugees, but at the same time, we will continue to invest mostly in our neighborhoods, among others, offering young kids summer jobs, and in that way, connecting them to the labor market.
Finally concluding with an important goal for us that we are heading to BBB+, within short time and having emphasizing our long-term goal to be A- rated company. Next slide, please. I have been talking about our bond-like, or I should say municipal bond-like income from property management, which represent is after all dividends, SEK 2.2 per share, which is giving you sense about what kind of multipliers we are trading on. On top of that, we have an amazing team working with property development that has been delivering last 10 years, every year. Right now we have, after the acquisition of Hemfosa, 1.8 million sq m building rights. This is corresponding to 20,000-24,000 new residentials. Please compare that with, for example, JM. JM is having 30,000-32,000. On top of this municipal bond, we have JM in-house.
Just think about that. Please contact us, please email us, and we will be happy to provide you with more information on that. We will be happy to provide you that those building rights are already this year going to deliver extra income from us. I think we right now are running seven to 10 LSS buildings, few elderly care homes that are going on top of the profit from building rights, also going to deliver recurring income. Next slide, please. To try to summarize, SBB is now the social infrastructure champion in the Nordics and being one of the largest player in Europe. We are not going to stop here. We are a growth company. We see that this kind of social infrastructure is needed in the Nordics, and we see large opportunities to continue to grow our relationship with municipalities.
We also see that municipalities want us to help them to have a long-term player investing in social infrastructure. If you look at the bullet number one, as I started with, which is, I should say, most amazing performance in this report is strong increase in 12 months rolling earnings capacity that is landing at SEK 2.855 million, corresponding to an increase of 126% ordinary A and B shares since the end of 2018. Next bullet showing that in the past 12 months, we have had one of the largest increase in NAV for the large real estate businesses ever seen, increasing NAV with SEK 16.1 billion corresponding to 73% ordinary A and B shares. Net asset value after NAV was at the end of the year SEK 20.04, the ordinary A and B shares at the end of the fourth quarter. We also continued to deliver a strong profit.
Profit before tax was SEK 3.1 million, and the profit after tax, SEK 2.6 million. If we adjust for non-recurring cost and adjust for dividend paid to D shares and hybrid bonds, we are delivering at the last line, earnings for 2019 of SEK 3.36 per ordinary A and B shares. Bullet number three, we are continuing to build the cash flow machine. As I said, municipal bond like increasing cash flow for the year with more than 200%. On the top of this cash flow machine, we have this amazing performance, building a new company inside SBB that is doing very strong delivery on building rights. We have today building rights of 1.8 million sq m, which can be compared to or corresponds to 20,000-24,000 homes.
As I said before, and I'm going to repeat this next few weeks because I was stuck with this myself, comparing this to JM having 30,000 homes in their portfolio. Number four, we are launching our sustainability vision 2030 today. We are very proud of this. We are also in the board, have a committee that we will continue to focus with sustainability, and this committee is chaired by one of the most experienced people in Swedish real estate, general a few months on. This is, from our point of view, very important space. We are going to be leading this, and we see us to be the leading company in the world delivering on sustainability.
We are presenting goals on every perspective, ecological, social, and economic, and emphasizing overall goals of to manage the company in accordance with the UN's global sustainability goals five, seven, eight, 11, 13, and 15. Minimize the climate risk for our assets. That is the job that we are actively investing in, being 100% climate neutral by 2030. That is job that is fully in the way, but also regularly improve, follow up, and report our sustainability efforts, and making sure that company's code of conduct, which is based on the UN Global Compact, must be followed and understood by all employees and partners. Two last bullets. The first one, of course, very important for us.
We see that we already by today, according to our measurement as I'm writing in my CEO award, we are at 54%, according to S&P's measurement, debt to equity, which should give us already today BBB, but that is not our target. We are targeting to be BBB+ within short time, and that is important prerequisite for our continuing growth. The board is emphasizing that in the long term, SBB is an A-rating company. Finally, just to remind you, SBB has been delivering from the day one. Last year, we communicated in CEO letter that we put 2019- 2021. Our assessment is that we will be able to deliver the highest annual increase in net asset value among all Swedish-listed property companies.
Now we have the outcome for 2019, and it is amazing, 73% increase per ordinary A and B shares. We see the strong quarter, we see the strong market, we see the still undervalued assets in SBB. We see company in company as regards to our huge land bank and huge player within building rights space that is going to deliver extra value to SBB many years forward. Thank you very much for listening, and please questions. Thank you.
Thank you. Ladies and gentlemen, if you do wish to ask a question, please press zero and then one on your telephone keypad now. The first question is from Simen Mortensen from DNB Markets. Please go ahead. Your line is open.
Hi, [Ilija]. Congratulations with the solid results. It seems I just have a few questions in terms of some technicalities to the report you just released. I will start off with the NAV. I'm just wondering, how are you treating in reported NAV, your goodwill, which is now on the balance sheet, and the D shares, which is deducted. Is it deducted on the issue price or on the market value?
I can start with D shares. D shares are not included in NAV. So what is the-
How are they deducted? Is it on the issue price or is it on the market price?
They are deducted at the balance sheet value.
Okay. How are you handling the goodwill in your reported NAV?
This is important, SEK 4.3 billion of the goodwill. That is goodwill that is going to be there forever, and it is related to extra cash delivered from the company is part of NAV, and it is the same as in all other businesses.
The goodwill is part of the reported NAV, if I understand you correctly.
The goodwill is not the part of NAV, Simen Mortensen . The total goodwill is SEK 6.7 billion. Of this SEK 6.7 billion, SEK 4.3 billion that is going to stay there forever is part of NAV, and that goodwill is going to be impairment tested every time as it's for all other businesses.
Thank you for clarifying that. The other one is on your earnings capacity guidance. How does that include the sale of 46 LSS homes? I've seen you buying some schools in Stockholm recently as well. Are they included in the Q4 earnings capacity guidance?
Nothing of this including our earnings capacity is strictly mathematical. That is what we have at the balance sheet at the end of the quarter that is included. I should say that in that way, our earnings capacity is very conservative.
Okay. Thank you. Just a few other questions. We see in the Swedish local media in real estate world that you have had some vacancies in a few properties, a police house in Eskilstuna.
We have properties for SEK 80 billion. Some of those properties, I never comment properties one for one with respect to other companies. Our focus is not these kind of properties as we have been very clear in our communication. You can understand what that message is.
Yeah. My question was, if the Eskilstuna property and the Försäkringskassan vacancies, are they part of what is sold to Nyfosa? That was my question.
I'm not going to comment the property level, but as I said before, that kind of office-like properties is not SBB's core business.
Okay. Can you give us a few details on what you have actually sold to Nyfosa in terms of the assets and expected rental levels on those assets?
I'm not going to comment the properties because we have not sold only to Nyfosa. We have doing larger sales than that. We have communicated that we are selling the total portfolio of over SEK 11 billion on 15% over latest valuation. I should say without any comment on Nyfosa, but from SBB's perspective, the total value of sales is affecting very marginally our earnings in 2020. The main reason for this is that Hemfosa has had relatively high financing costs. We will give more the details when different companies that we have sold to announce that they have bought from us.
In terms of the yields on those SEK 11 billion, which is sold, is it above or below the company's average?
I'm not going to comment on that. My message is that the effect of sales is marginally affecting our earnings capacity, and probably if we recycle a part of it, probably our earnings capacity will increase. The math is yield minus financing cost, and we will summarize that after the different companies that we have sold to announce that they have bought from us.
My last question, in terms of the share count, which you used in the report, you have one element which you have in the listed share count, and you used a different number of B shares in the EPRA NAV calculations. Based on this, first of all, my question.
Different counts of I didn't hear. B shares or?
No, different number of A and B shares. You list A and B shares in the report at the end of the quarter, at 839 million, while in the EPRA calculation you use one.
We do not do that. I will explain that. We do not do that. The total number of registered shares is the number of the shares that are used for EPRA and used for the ratios, and that numbers you can find in our key ratio, and that is 1,240,526,587 shares. That is the number of registered shares registered by Swedish company registration office. However, we didn't have the name of the shareholders because of distribution, because Euroclear didn't have the name of the shareholders at the end of the year. That is, how to say, the information of the shareholder is just for illustrative purposes, because that has not been possible technically, because Euroclear didn't have information who were the shareholders holding shares through selling or through acquiring shares through Hemfosa.
Okay. I assume then the 1,241,000 billion shares is the completely issued shares after the Hemfosa settlement, adjusted for what you bought directly in the market. That was my last question on it.
That is exact number of the shares that was by 30th of December. Exactly.
Exactly. Can you say something about the B shares versus what you have in the report versus what will be issued in total also there?
B shares are also exactly 104,425,359 is exact number of B shares that was issued on the 30th of December. Also there, we didn't have the names, but the shares for the offer that was pronounced unconditional on 23rd of December were registered by last of December. Those are also the assets used in the report.
Thank you. Thank you for taking my questions, and congratulations on the solid result.
Thank you. Next, please.
Next question is from Niclas Höglund from Nordea. Please go ahead. Your line is open.
Yes, good morning. It's Niclas Höglund, Nordea here. A couple of questions from my side. Please start off with revaluations. Could you comment on the share of the sort of external and internal valuations in the end of the year, and then maybe split the valuations between SBB and Hemfosa, and possibly between segments, please?
Just to be clear, in SBB profit, there is no revaluation from Hemfosa. That is important. SBB profit is just revaluation of SBB. If you look at the segments, you will see that we provide the information on this at page nine. You will see that we have SEK 1.2 billion in value changes on residentials, SEK 1.1 billion on community service properties, and SEK 122 million on other properties. If you look at our published results, you will see that we have delivered profit from building rights for the year at a level of SEK 338 million.
Okay. It's only SEK 338 million for the full year in building rights.
Yeah.
And the external-
All our properties are externally valued. It has been 2019 every quarter, because we have been in different processes and almost under auditing every day a year and publishing prospectus almost every month, I should say. That is why all of the properties are being valued by external valuers. I think the building rights important message there is that this is profit from the building rights, and there is additional profit from those building rights that are in delivering LSS and delivering other community service properties that will deliver cash to the company.
Looking at the sort of consolidated numbers on NAV and assets, could you clarify if the evaluators have sort of taken into account the pending transactions? You're talking about 15% above book values for the SEK 11 billion properties that are pending to be sold.
Our numbers are the numbers that are in the properties, as I said, the SBB profit and that is what it was at the end of the year. I said this morning, and I will repeat that our assets should not be valued at 4.8%, and you can never buy our assets at 4.8%. That may give you a flavor what will happen going forward.
Ilija, I mean, the 4.8% implied yield at the moment, that's clearly including Hemfosa as part of the consolidated numbers, right? I mean, it used to be 4% before.
That is including Hemfosa as a part of consolidated numbers. I'm saying that on top of those numbers, there is still a large potential. We have to follow up to see that. That is my sense of where the market is right now.
Right. Just to be clear that we don't double count the upside here. In the SEK 80 billion plus property value, have the evaluators taken the conditional divestments of the SEK 11 billion revaluation into account?
Yeah. Absolutely.
Okay. Right.
That is absolutely right. That is also, Niclas, affecting 4.8% in yield.
Exactly. Yeah. I hear you, just wanted to sort of, b ecause I was sort of expecting that in the first quarter. Okay, fair enough. Then going over to the goodwill. I mean, you were clear now that you have sort of allocated the goodwill-
Important point to coming back to this stage, that those sales are not affecting SBB's profit. Those sales are affecting SBB's value of the acquired company. That is important. When SBB is reporting according to, as I summarized before, for the full year SEK 2.4 billion in increased value, there is not 1 SEK there coming from Hemfosa.
Okay.
We're not there either.
Yeah. Okay. Moving over to goodwill. You were clear now that you have allocated the goodwill to synergies from lower funding and administration costs. If I understand it.
Part of the SEK 4.3 billions of the goodwill.
4.3 billion. Yeah.
2.4 billion of the goodwill is deferred tax goodwill, and that will be resolved when we sell the assets.
What will be the sort of entitlement criteria here to sort of evaluate these SEK 4-point-plus billions going forward? Is it related then to your underlying funding costs, or is it also to the success in this sort of reducing central and admin costs? How should we evaluate this goodwill?
It is related to our performance on delivering on underlying financing costs. Yeah.
Okay. We should not expect you to allocate part of the goodwill then to asset values?
This goodwill is treated in the way as goodwill is treated for the other companies. That means that it will be there forever until we do something. That means that it should be tested, what is the value that is delivered.
Okay. Moving over to your vision, the Sustainability Vision 2030. Do you have an understanding what will be the investment and return requirements here? What's the potential?
Our sustainability vision is, as I said, underlying our main part of our business model. This is not for us something that we are adding to get some short-term profit in something. We have been working with sustainability, and as you know, we became the first-ever private member of Public Housing Sweden. We are, with the vision, emphasizing our commitment to deliver on those targets, and that is the main message.
Do you see a potential for even lower funding costs here via the issue of the green bond?
I have said this before, Niclas, My sense that in 5- 10 years from now, it's not going to be issue of lower funding costs. It's going to be issue if you are not green, if you are not sustainable, you will not get any funding. We are a low-risk company, and we see sustainability as a natural part of our business. We are not seeing this as delivering a few basis points in funding costs. We see that this is going to be big crossroads between those that will succeed and those that will not.
Right. My final question related to, maybe if you could help us here to understand the sort of underlying maintenance and CapEx guidance for the year. What should we expect in investments?
As we used to say, we don't have any CapEx. All of our maintenance is taken into account on its capacity, and this is particularly for our international listeners, an important message when you compare it with, for example, German companies. We take the maintenance through the P&L. On top of that, we are counting to do SEK 600 million in investments and SEK 600-700 million in investments and deliver double the money on those. That is how we see.
Okay. Maybe a final question, if I may. When you look at your impressive building rights portfolio, could you help us out sort of triggers here to get higher values out of it? We've previously talked about a substantial potential here related to market revaluations and planning permits coming into effect.
Niclas, this is very important. I like that question because I see it as very important, and I think no one is valuing JM on what the building rights are valued. As I said, we have right now 1.8 million sq m, which is like 20,000-24,000 homes, and JM has 30,000 homes. We see this like a company within our company. We see this year that these building rights are not only delivering profits from the building rights, they are also delivering new LSS housing, where we have amazing margins. They are delivering new elderly care homes at the end of this year and beginning of next year. We see that this is going to be strong driver of the growth going forward.
I hear you. Previously, you've been also very successful in divesting the building rights, especially on the resi new build side. Substantially higher value, and the triggers have been related to planning processes and zoning being granted. Should we expect those kind of triggers to be more tilted towards 2021-20 22, or should we see any potential for that to be triggered already?
We will see already this year strong cash inflow from the sold building rights. I think even more important is that we have undervalued building rights, that we have great potential from selling parts of those. They have even greater potential converting some of those to new LSS housing and elderly care homes. That is what we're seeing now that we will be able to start deliver already in 2020.
Okay. That's one question.
Thank you.
Next question is from Lou Landeman from Danske Bank. Please go ahead, your line is open.
Yes. Hi, it's Louis here. I just had a question on the cash on your balance sheet. I'm trying to understand, you said that you paid the cash portion of the bid in early January.
Yes.
That's reported, so it's under other current liabilities. It's actually not part of the cash position.
Yes.
It's more like on the short term.
Yes, Louis, we had a cash position of SEK 14 billion and probably, I think SEK 14.5 billion. Then we had on this quarter, as you said, SEK 7.9 billion, that is used for cash position to have full. That is why in our earnings capacity, you can find the exact number there, that we are saying that this difference of SEK six billion is our real cash position or was our real cash position.
Okay. Out of the SEK 13 billion in cash reported, you say six would be the.
Yes
so to say, after the payment.
As I said, if you look at our cash position that is SEK 14.5 because we are putting some of this money in some short bonds because the banks don't like to have money off the balance sheet.
Yeah.
We need to hide some of the money. If you look at our real cash position is SEK 14.5 billion, SEK 14.6 billion and then Hemfosa is SEK 7.970 billion and that means that SEK 6.5 billion in cash is the real cash that we had at the end of the year.
Okay. In addition to the 7.9, then you bought shares in the market, so we should extract that as well, another SEK 2 billion or three or something?
First bond bought in the market were paid, as you know.
Okay. It was already paid at year-end.
Yeah.
Perhaps to buy the remaining to get 100%, it would be another SEK 1 billion maybe then, or?
There are two steps in this. One is those 88%.
Yeah
At the end of the year, this has been bought by the issued shares that are registered on last December and by the cash, as I explained.
Yeah.
After that, we bought additional 5% that has been paid after the year-end. That is not fixed in any numbers, because that is after the year-end.
Yeah.
We had 93.8 or 93.5% of the capital after that. That means that the remaining 7% is like SEK 1.5 billion, something like that. That is in the process.
Okay. I understand. Following that, since you say you have repaid bank debt, that's with the part of the remaining cash then that has been used to repay bank debt and some proceeds from a hybrid bond issue or something like that, or?
Yeah, we issued a large bond, seven point five years, SEK 750 billions at 1% fixed interest rate coupon that we have been using that money to repay the bank loans. We will continue with that.
Yeah.
We need the bank loans that Hemfosa had, because Hemfosa had very short-maturity debt or very short debt maturity that we don't like.
All right. After this sale that you're planning of the SEK 11 billion, your view is that after that you're in sort of compliance with these numbers you mentioned from S&P. Do you foresee any more sales in the pipeline?
Yeah, we will continue both to buy and to sell. That is what we do on the top municipal bond. According to our numbers, taking into account pro forma sales done, we were at 54% according to S&P's calculation.
Okay. Okay. Great. Thank you.
Thank you.
Next question is from Jan Ihrfelt from Kepler Cheuvreux. Please go ahead, your line is open.
Okay, thanks for taking my question. My first question relates to your reported LTV of 41%, and I don't see how you come to that figure. Of course, you have the interest-bearing debt, and then you deduct the cash pile, and then you divide it with total assets.
Jan, all of that technical math, I will ask Eva-Lotta Stridh to send an email to you.
Okay.
It's very easy. In our view, it's net LTV through the total balance sheet. That is the same way as, for example, Balder reports them. I will ask Eva-Lotta to just send you the table.
Okay, thanks. Second question relates to your average interest rate, which is at 1.7% at the end of December, you also mentioned that it should have been 1.4% for SBB isolated. Do you think it could come down to 1.4% or something like in that range this year?
I've been very clear on this, Jan, before. We are going to be below 1.4 at the end of this year because that is why we have been repaying this highly priced debt in Hemfosa. There's no question about that. That is the way forward.
Okay. This is my last question really. Just to clarify, you have an earning capacity of SEK 2.7, you mentioned in the presentation slides here. Sorry, SEK 2.3 per share.
Yes.
Did you mention that this will not be affected, this SEK 2.3, by the divestment of the SEK 8 billion in assets?
Yeah. As I said, Jan, if I look at 2020 in total, the sales will just marginally affect this because both of our sales, but also because of the, at the same time that we are continuing to repay highly priced debt. The difference is very marginal, and the profit that we will create on the way down the road till end of the year will probably at least match that.
Okay. Thanks for taking my questions.
Thank you.
Next question is from Tobias Kaj from ABG. Please go ahead, your line is open.
Yes. Thank you. Good morning. It's a bit of a follow-up question maybe on the average interest rates. It was almost 1.8% at year-end. If we include the synergies of SEK 260 million that you talked about, it comes down to 1.4%. However, you recently issued 7+ years at 1%. Why is the average interest rate so much higher in your earnings capacity than the actual funding cost in new issues? Is it higher in banks than in the bond market? Is that the reason?
I agree, Tobias. This is because we do this very mathematically because we are very conservative in this. We use the numbers that are on 31st of December. Our financing costs are going to decrease much more than only synergies from Hemfosa. You are pointing exactly right. I agree that.
Sorry. The issue that you recently made at the 1% total interest rate, if you would have had the BBB+ rating at that point, could you indicate what the rate would have been then? Would have been similar or lower?
It will be 0.6- 0.65.
Okay. Thank you. And the final question, w ith the cash that you have and also with the cash that you will receive if you make the SEK 11 billion dispositions, will you use that to amortize on bank loans or also bond loans?
We are amortizing bank loans. That is the main strategy. We are also buying back half a billion of Hemfosa, one of Hemfosa's bonds. That will be closed out at the end of March, and that will also continue to contribute to decrease the financing cost.
Okay. Thank you for taking my questions.
Thank you.
Next question is from Bertil Nilsson from Carlsquare. Please go ahead. Your line is open.
Sorry, just before asking your questions. This will be the last one that we will be able to take because we have an extraordinary general meeting in Hemfosa starting now in five minutes. If there are any other people in line wanting to ask questions, please send us an email at ir@sbbnorden.se, and we will get back to you during the day. Okay? Go ahead.
Okay. Just more follow-up on the building rights if you compare with JM. I assume when you see the Q3 numbers and earning capacity in Q4, that the difference is mainly the Hemfosa portfolio. I interpreted that you identify more of investment returns than building rights in that portfolio. Is that right, or have you made any-
That is right. We identified the 700,000 sq m from Hemfosa portfolio, and we see that there is still potential on that.
Okay. Thank you.
Thank you very much all. Thank you very much for listening. As Adrian said before, please just send us an email and we will respond as soon as possible.
This now concludes the call.