Thank you very much. We can start with slide two, period highlights. We see that we are continuing to increase our income base. For the first nine months, we have a rental income of SEK 1.4 billion and NOI of SEK 903 million. Profits before tax landed at SEK 1.526 billion, and after tax SEK 1.337 billion. Important here is that we see that profits from property management is increasing very strong and adjusted for non-recurring costs compared to the third quarter of 2018, we see the profit from property management increased with 59% and it should be adjusted SEK 658 million for the first nine months. In this sense, the third quarter of 2019 is the best quarter ever in terms of profit from property management, which in presented numbered more than doubled for Q3.
Cash flow from operating activities, before change in working capital is also increasing very strongly for the first nine months by 99% to SEK 507 million. Even more positive is that we are continuing to deliver recurring profits from our three value creating areas. From renovations, investments in our properties, from building rights and from transactions. Our renovation rate is now even better than the plan because we have started renovation of 476 apartments, and at the same time, we have signed agreements for renovations to commence in the fourth quarter for 232 apartments. This in total may be that we land this year at 700 apartments started renovation, which is above our target of 600 apartments a year. In the first nine months, we have been also very active in transaction market.
We have done transactions for SEK 16 billion. Transactions are continuing to deliver the profit for the company. Property development continue to deliver. At the end of the third quarter, we had more than 1 million sq m on building rights in different development phases. Also after the end of the quarter, we sold additional building rights for SEK 150 million in Nyköping. If you look at our financial position, it is being stronger for every day. In the last 12 months, we have lowered our average interest rates from 2.49%-1.75%. At the same time, extended our fixed interest coverage. Today, 100% of our loans are interest hedged with average duration of 4.9 years. Our debt maturity is actually among the longest at the market at 4.9 years.
If you look at net debt in relation to total capitalization, according to S&P's definition, we landed at end of Q3 at 55%, which is also a strong sign of strength. Actually, the days after quarter, we are selling some assets and continuing to improve our financial metrics. At the beginning of September, SBB was the first private property company to become an associated member of Public Housing Sweden, which is an additional quality stamp on our long-term commitment to this very, I should say, very unique in broad sense, very unique combination of low-risk assets in terms of elder care homes, schools, municipal buildings, and Swedish rent-regulated residentials.
Finally, our estimated owned capacities, adjusted for cost of cash rolling 12 months landed at SEK 1.141 billion, which is increased with 48% to the end of 2018 where we were at SEK 770 million. Cost of cash in this case is that we have SEK 8.5 billion at balance sheet in cash. On top of that, we have cash equivalents, or we replaced excess cash of SEK 1.5 billion. On top of that, we have more than SEK 4 billion in unutilized backup facilities. That means that we had actually available SEK 14 billion in cash at the end of Q3. This is completely unique and never seen, at least in Swedish property market. This pure cash that we are not, how to say, having any return on, but paying for it of SEK 8.5 billion. This is what we use in this adjustment of earnings capacity.
Next slide, please. A few numbers on financial performance. As I already mentioned, continuing increase in rental income of SEK 1.4 billion at the end of Q3. Strong NOI of SEK 903 million and surplus ratio of 65%. It is better than that because we had SEK 10 million, probably more, using to move to completely 100% renewable electricity, and we have some other costs. Interim profit of SEK 1,337 million, still one of the strongest yield in property market at all, not only in the Nordics. 4.7% in yield for this kind of low-risk assets is amazingly low and gives very nice potential for upside. As we pointed out in the introduction, very strong increase in cash flow and landing at SEK 507 million despite using SEK 130 million for repayment of relatively expensive bonds.
I used to say that this is cost of success, we are happy to repay everything that is expensive because our journey is still continuing towards lower interest rates. Property value SEK 30.8 billion, in this quarter, we have actually sold more than we have bought. Adjusted EPRA NAV, adjusted for D-shares and perpetuals, SEK 17.3 billion EPRA NAV long-term net asset value of SEK 9.9 billion. Earnings capacity SEK 1.1 billion. Loan-to-value ratio 38%. Equity ratio 36%. Both of those measures are, of course, affected by this big cash that we have on the balance sheet. Adjusted equity ratio 39% and strong earnings per ordinary shares of SEK 1.41 per share. Next slide, please. For you that have not been listening before, slide four, we are showing our assets. Important message here, 94% of total value is coming from social infrastructure in the Nordics.
60% community service properties, elder care homes, schools, municipal buildings in the Nordics, 34% Swedish rent-regulated residentials. In total, 94% social infrastructure in the Nordics. Unique combination of assets. 100% in the Nordics, of which 84% in Sweden and 10% in Norway, or 9% in Norway, 6% in Finland, and 1% in Denmark. 91% of income coming from either Nordic welfare states in terms of government direct or indirect or municipalities, and Swedish rent-regulated residentials. Only 9% coming from commercial tenants, which is unique position in this time when we are heading to recession. That means that we are not affected by economic downtown, having this direct access to tax-funded income. 60% or more, exactly 58% of total property value in the Nordic largest cities. Next slide, please. More information about the portfolio.
18.3 billion or 60% includes school, elderly care, LSS housing, and municipal and government buildings. SEK 10.3 billion Swedish rent-regulated residentials. After the quarter, we announced the deal with Amasten that is strengthening our residential portfolio and actually making us number 1 independent-listed Swedish residential player. This is additional, how to say, flavor to our low-risk activity. However, at the end of the third quarter, 34% of portfolio, then you have our add-value business from property development or development of building rights value with that balance sheet SEK 2.1 billion or 7%, as you can read in the report with beautiful upside potential. Next slide, please. Slide six, giving you more flavor on our income and our relationship with municipalities. We have done deals with Swedish largest municipalities. Our biggest tenant is actually Norwegian government, then some Swedish large cities and regions.
We look forward to announce more municipal deal in times to come. If you look at our income, you will see, as I mentioned before, that 91% is coming either from government direct or indirect, mainly from government direct or Swedish rent-regulated residentials. Next slide, please. Our business is very stable and, as I'm pointing out in CEO letter, completely different than the rest of commercial real estate and supported by strong underlying mega-trends of demographic change and urbanization, and underpinned by focusing on sustainability and energy efficiency. Next slide, please. Q3 strong net operating income and main message, strong profit from operations. Our net income after tax for the period amounted to SEK 404 million, slightly lower than last year, mainly related to derivatives because the rents or swaps were very low at the end of Q3.
That means that we have the strong net income after tax for the period for Q3 and almost double operating profit to SEK 254 million before one-off costs. We also delivered a strong cash flow that is continued to be supported by long-term reduction of financing costs and cash flow from operations before changes in working capital amounted to SEK 263 million comparing to SEK 99 million last year. Finally, on this slide, our estimated earnings capacity landed adjusted at SEK 1.1 billion which is an increase of 48% from SEK 770 million at the end of 2018. All in all, our strongest quarter ever. Next slide, please. This just to give you a flavor how our earnings capacity is counted. You see all the different position here that are resulting in adjusted operating profit on 12 months rolling of SEK 1,141 million.
Observe that this is when taking cost of capital for the cash that is on the balance sheet of 175%. As you know, we are buying properties at higher yields than that. There is a strong potential to continue to grow earnings capacity and combine that with strong credit metrics. Another important message for our international listeners is that in property costs, we have relatively big chunks of maintenance. The difference to some of our international competitors is that we are not capitalizing maintenance. We are taking it through the balance sheet. If we should capitalize the maintenance, our adjusted operating profit will probably be almost SEK 100 million higher. This is important to know. Next slide, please. Our property development is continued to deliver. As you can see at the end of Q2, we had 1,020,000 sq m building rights.
We have strong cash flow from those properties where we are developing building rights. Also after the quarter end, we succeeded to sell the building rights for SEK 150 million. We have strong inflow on cash in next 24 months coming from already sold building rights. Next slide, please. Trying to summarize, sustainable and predictable cash flow remains the foundation of our activities. Cash flow from operating activities before changes in working capital increased by 99% to SEK 507 million for the first nine months this year. Adjusted for non-recurring costs for, among other things, the repayment of expensive loans. Cash flow for the nine-month period lands at SEK 657 million. Profit before tax amounted to SEK 1.5 billion. Profit after tax was SEK 1.3 billion.
Important here is that adjusted for non-recurring costs for repayment of expensive loans, the nine months earnings per ordinary A and B-shares after profit paid to preference shares, class D shares and hybrid. This is important. After profit paid to preference shares, class D shares, and hybrids were SEK 1.61 per share. Then you can just do your math and compare what is the multiplier on current share price. After all payments done, SEK 1.61 per share for the first nine months. Number 3 point sustainability is a central part of our business model, and we are happy that we now are moving 100% of our electricity consumptions to origin-certified renewable electricity. This is unseen change. If you look at CO2 footprint, the carbon dioxide emissions will be around 16,000 tons lower per year than if the energy according to so-called Nordic residual mix were used.
A Nordic residual mix is much lower than European residual mix. In this sense, all SBB is like green bond, and I should say like green municipal bond. On top of delivering the strong cash flow and strong earnings capacity from property management, we are continuing to deliver from three recurring value-creating areas. Renovations, investments in our properties, development of building rights and transactions. In the first nine months, we began renovating 476 apartments, and together with planning 232 apartments that we have signed the deals to commence in Q4. That should be 700 apartments which is 100 apartments more than our target. I'm very happy that this business line is continuing to develop well. Of course, as always, we have the strongest transactions team in Northern Europe, and we are delivering strong profit from transactions.
The same is true from property development, that is continuing to deliver the profit. If you look also that in the quarter or more precisely on 24th of September, the board presented new targets for the company, both focusing on strengthening financial metrics or credit metrics by increasing target for equity ratio to higher than 35%, and also targets on the interest coverage ratio to be no less than three times. The important thing here is that you can see from our numbers that our interest coverage ratio is improving very fast. According to my estimate, we will pass three times already in the beginning of the next year. We also launched the new growth target expressed as a property portfolio of SEK 55 billion in 2021 with retained BBB+ rating.
Important here is that the board is committed to focus on achieving a BBB+ rating in the next 12 months. We see also this as a prerequisite for strong growth. We also announced our new dividend policy saying that goal is to generate a steadily increasing annual dividend. In connection to that, the board of director is expected to propose an initial dividend according to the new dividend policy of SEK 0.6 per ordinary A and B-shares, which is much higher than the market has been expected for the next year. It's additional message of strength of this strong cash flow-producing assets.
Finally, as when writing in CEO letter our secure cash flows are only marginally affected by the economy and external factors and our focus on social infrastructure in the Nordics that the need for investments in social infrastructure in the next 10 years period are the highest ever is amazing strength. That is also why for 2019-2021, my assessment is that we will be able to deliver the highest annual increase in EPRA NAV among all Swedish-listed property companies. This strong journey of growth will also be supported by the fact that our B-shares and D-shares have been trading on Nasdaq Stockholm's large-cap list since 3rd of September this year. It's just slightly more than one month old. Also the potential growth fueled by attracting new investors will be following the inclusion of SBB's B-shares in EPRA index.
My expectation is that when the next quarter index review will be published on 5th of December 2019, that we will be part of the index because according to my view, we belong there, and we will be there in connection with the next index review. I will stay there and thank you very much for listening, and please questions.
Thank you. Ladies and gentlemen, if you do wish to ask a question, please press zero one on your telephone keypad. If you wish to withdraw your question, you may do so by pressing zero two to cancel. Our first question comes to the line of Niclas Höglund from Nordea. Please go ahead. Your line is now open.
Yes. Good morning. Niclas Höglund here from Nordea. A couple of questions from my side. If you could maybe start a little bit on the sort of, give us a market update on how you view the pending transactions. You've talked a lot about municipality deals previously, that might be pending on the school side and things like that. Also in connection with that talk a little bit about your investment capacity short and medium term.
We see that we are preferred among the largest municipalities in the Nordics, we are looking forward to announce the new deals in that space. That is very good development for us. At the same time, we are doing that by also continuing to strengthen our balance sheet, and we do continue to produce building rights that we sell. We can summarize that with our target that at the end of 2021, we will be SEK 55 billion with BBB+ rating, and we used to deliver what we said.
Right. A follow-up on that. How do you view these sort of yield requirements at this point? Are you still expecting to do a follow-up buying these municipality deals around 5% or have yields come off a bit down at this point?
We used to say that we buy in the space between 4% and 6%, and that is a space that we are targeting, and we feel pretty good that we can continue to do our deals in that space.
Okay. Another question on the D-share issue that you announced for [SEK 1 million]. Could you maybe elaborate a little bit on it? The premium kind of way. Is it a one-time, or do you see further opportunities to do these kind of directed issues in order to meet your targets?
No, Niclas, I think that NAV is completely misleading for our company. If you look here that we are delivering SEK 1.61 for the first nine months after payment for the hybrids, for B-shares, and preference shares, you can just do your math. That means that this direct issue that we did, it was done at multiplier of 10. I should say in a normal business, it is very difficult to find a company where you can buy shares at multipliers at 10 or below 10. We are very happy to have a new shareholder, a long-term shareholder, and one of the Swedish super entrepreneurs, Jesper Waldersten. As you know, all of our shareholders are very focused entrepreneurs and we are happy to broaden that base.
Okay. My next question would be more related to revaluations and your project properties and land. I appreciate more clarity on the sort of book values per share and what have you. Maybe, we continue to see maybe slightly lower revaluations per quarter than your full year guidance. It was SEK 25 now in the quarter and SEK 60 million for nine months. Could you help us a little bit on how the timeline looks on the sort of planning permits and when will you get planning in place for the conditionally sold units?
As you know, Niclas, we have like SEK 1.2 billion or more than that in cash that is waiting on us. In this business we have, how to say, now focusing to get all of this cash out. That is why you have a slightly lower evaluations from the building rights. In the average sense, we are pretty confident that we used to say that we deliver as a target SEK 250 million-SEK 400 million. If we look right now, since the beginning, we are still at the levels that we have been delivering about SEK 500 million on yearly average since start. That will always be the case for this property development business. That is why also our target is expressed as average.
I'm very happy to see continuing focus on cash deliveries, and we see that we will have very strong cash deliveries in the next nine months.
Okay, a follow-up on that. You're talking about a surplus value of SEK 750 million. As the book goes right now, the book values are around SEK 1.8 billion on your projects, including the cash properties that you need to tear down in order to get access to the building rights. While you already sold conditionally for SEK 1.5 billion in building rights, how much of the SEK 750 is actually related to, you can say, conservative accounting of the conditionally sold building rights, i.e., already given on just waiting for the planning permits to come in place?
It is a relatively big part of it that is related to the value that are higher than in the book. Also connected to that we use these building rights in different joint ventures where they were, how to say, valued and sold with discount. I should say this is the potential that we see will be delivered. This is not on the book right now.
Okay. I'll step back in line then. Those were my questions for now. Thank you.
Thank you.
Thank you. Our next question comes to the line of Martin Nilsson from Carlsquare. Please go ahead. Your line is now open.
Martin Nilsson, actually. I imagine that when you have cash on SEK 10 million, it will be relatively easy to reach your target of SEK 55 million in property value. When I look in the report, I think it's on page 18 or something. 18, yes. When you illustrate the construction shortage in the social infrastructure, I get the impression that you are tilting even more towards new construction. Is that a correct assumption?
No, Martin, we are partners to Swedish municipalities. This means that we will both buy the new buildings, but also help municipalities with this big demand. Those graphs are also to show how big demand here it is, in the situation where the other commercial real estate is expressing concern for netting. We are in completely different division. We cannot deliver what is needed. Despite working together with municipalities, the other message from the page 18 is how low rents we have at our balance sheet. If you just look at elderly care homes or educational facility, you will see that our rents are like a half of the price for the newly built.
There is large potentials from both streams, both from helping municipalities, providing them with new properties and, of course, we are always concerned of the construction risk, and we do not want to take the construction risk. We are long-term owners of the new properties for the municipalities and at the same time having very large upside from the rents.
If you compare now in the current market where you get return on residential development, selling building rights, or perhaps even compared to the ordinary yield from properties, would you say that that gap has changed somewhat?
This is a combination of us having a large number of building rights in central location, as you are saying, also giving us opportunity to deliver the new schools, the new elderly care homes to municipalities. Of course, that will also deliver better profit from the building rights. That is completely true. At the same time, this will also strengthen our relationship with municipalities, giving us opportunity to even buy more properties. This will also help to drive increasing earnings capacity going forward. That's all.
Okay. Thank you.
Thank you. Just as a reminder, if you would like to ask a question, please press 01 on your telephone keypad. Our next question comes to the line of Louis Landeman from Danske Bank. Please go ahead. Your line is now open.
Yes. Hi, thank you. I was wondering if you could clarify because I think you said that you don't capitalize any of your renovation costs. You take everything up front on the income statement. Is that so?
No, Louis, we do capitalize the direct investments because this is investment in refurbishments of the apartments.
Yeah.
The rest of the planned maintenance that is improving quality of the properties, which, for example, in Germany often is capitalized, we do not capitalize that part. That is in our case because we are long-term owners, so we are investing a lot of money in our properties that is improving quality of the properties, and this is taken through P&L. This is big difference, for example, because you are doing credit analysis, and if you compare it, no matter if it's Aroundtown or Vonovia or Grand City Properties or whoever you want to look at.
Yeah. Okay. Out of this SEK 978 million that you invested in your properties in Q3, how much was transaction and how much was, let's say, renovations or upgrades, or what do you call it?
If you look on page 17 in the report, you will find that we have invested SEK 474 million in our properties which is investments in refurbishment of rent-regulated residential and increasing rent, which is investments in building new LSS housing, which is investments in refurbishments or renovations of elderly care homes and municipal houses.
Okay.
That is investments connected to income in terms of either new rents or increased rents. The part of investment that is classified as maintenance, and I think we have invested in maintenance taking it through P&L this year in the first nine months, you will see that is SEK 78 million, which is considerable amount and we are proud of that we invest in quality in our properties but is from comparisons perspective also from credit point of view important to know about it in relationship to, for example, German companies.
Yeah. You mentioned some figure, like an S&P figure for leverage, I guess not that the capital is held like it would be like 55%?
Yes. That is the exact number is 55.3%.
Okay. That would include 50% of the hybrid now?
That includes 50% of the hybrid.
What do you think to get to that? I think they have a target for 50%. Do you expect that you need to do some additional asset sales or similar to get to that number or what's your plan to get to the 50%?
We see that we have, for us, two lines. The one is, I think that we are on the way there for every day as goals and with the portfolio today and with planning to expand the portfolio, we see that we should be in the space that you have a strong business profile and on this road combining with strong business profile, we will go for in next 12 months to be below 50% on debt to total capitalization according to S&P and that should be BBB+. When we said to market that our focus is BBB+ in next 12 months, that means that we mean that, and we have shown that every time when we have put forward the target, we have shown that we really do what is needed to deliver that.
That means also that we will both buy and sell assets and hopefully making additional profits from transactions.
Okay. within 12 months you should get below the 50% basically.
Yeah, that is basically, we count that already at the end of Q4 we will be firmly below 55% and within next 12 months we count that we will be below 50% on S&P terms and that is why the board put this strong message in press release and in the report that we are focusing on BBB+ in next 12 months.
Okay. Thank you.
Thank you.
Thank you. Our next question is a follow-up from Niclas Höglund from Nordea. Please go ahead. Your line is now open.
Yeah. Thank you. A couple of follow-ups. Firstly, you talk about one-off cost in central and administration. Could you maybe elaborate a little bit on what happened there? It's not reflected in your earnings capacity, so I don't expect Well, it doesn't look like you expect any more costs, but could you give us some more on that? Thank you.
There are very high activities, as you said, including change of listing to the main markets, to the large-cap. Those are one of costs for very high activities in the companies during Q3.
Okay. All right. My second follow-up is on the earnings capacity. Could you also clarify the sort of higher joint venture contribution and the higher financial income, which I suspect is related to JVs as well.
Yeah. We have good activities in our joint ventures. One of our joint ventures is pure cash flow, and it is developing well. The others are mainly focusing on residentials, and they've been performing well, also doing renovations. We have, in one of these joint ventures in one of the Stockholm municipalities, have had very high activities on the refurbishment side. That is where the current numbers are.
Is it driven by acquisitions within this joint venture, or is it connected to lower-?
Yeah
financing costs?
It is driven by acquisitions, but also by refurbishment.
Okay. This is income from property management, right? It's not revaluation.
Yeah. If you have refurbished apartments in Q1 and Q2, the money is coming now. We do this very mathematically. What is there per 30th of September, then that is in the numbers.
Fair enough. I have some other follow-ups as well, if I may. You're talking about the pure cash adjustment in your income property management. You have SEK 8.5 billion in cash balance. When will you deploy?
Yeah, we have SEK 8.5 billion in cash balance. On top of that, we have actually SEK 1.5 billion in cash that we have parked. For example, we bought JPMorgan's ETF , which is a short balance. It's cash. We can take it. Our total cash, and this is important, we are reporting SEK 10 billion. We have additional cash that we can pull off from the joint ventures. We have lines of more than SEK 4 billion. We have, without competition, the strongest balance sheet in the Nordics.
Okay. Right. Maybe a follow-up on the Amasten ownership, which you've entered into this quarter. It's a touch below 20%, so I assume you will treat it as associate income. Could you give us some help and guidance on the annual contribution from that investment on the joint venture associate line?
This acquisition has been done after the end of Q3, and we will wait for the Amasten's Q3 report. I think that is fair to wait for that.
My final follow-up, if I may. You announced buybacks of hybrids and bonds, which clearly will let you refinance on a lower level. Do you have an updated number on the costs for doing these redemptions?
As I said before, that is cost for success that has been serving us very well because if you look at our buybacks that we done last year, we done it at a much lower level, and I'm sure that we will be at even lower level next year. Those buybacks are very beneficial for our company. For the buybacks of the bonds, we have bought back SEK 1.2 billion in the bonds in Q4. As we announced, it's very easy. You can see the more effective prices in the press release there and just do the multiplier. We will continue to do that because that is very beneficial for us. On hybrid side, we have bought back SEK 1.5 billion, but we have also announced yesterday that we will buy back everything of those two old hybrids.
This is very good for our shareholders because we are exchanging the hybrids priced at 7%, SEK 700 million at 10%, and SEK 1.2 billion at 6.35% to a new high bid of 3.5%. 3.5%.
Right. Okay. I'll do the math on the cost for those redemptions, which is, of course, also important. On the average funding cost coming down to 1.75 already in the end of third quarter, given the refinancing you have already undertaken on the bond side, where are you right now on the cost side?
I said last year that we will decrease our costs. I think I said 50 basis points or something like at 50, 60 in levels of SEK 100 million by then. We have done even better than that, despite that we also in this cost have all costs for the swaps. This is very important because we have the longest fixed interest rate in the market and the longest debt maturity in the market. I should say that we already today are on the way to have the lowest interest rate average in the market. We think that it should be expected, given that we have the lowest risk assets in the market, that we should pay the lowest prices in the market. That means that our costs have to continue to be lower. It is crazy how high costs we have had.
That is the part of when you are the new company and the market needs to learn about you and to see that you're delivering. I think that we are now in that position. I'm expecting that those costs will be considerably lower already at the end of this year, but particularly if you look mid-next year.
Okay. Those were my follow-ups. Thank you.
Thank you.
Thank you. Our next question comes to the line of Staffan Bülow from ABG. Please go ahead. Your line is now open.
Good morning. Staffan Bülow from ABG here. A couple of questions. First, the excess cash and the cash equivalents that you have. What is the strategy with this cash position? Would you like to reduce debt or use it for acquisitions?
Yeah, we will combine those two because we have been very successful in growing company and at the same time de-leveraging. We see according to our scenarios that we should be able to achieve our target of SEK 55 billion in property value at the end of 2021 with BBB+ rating. That means, Staffan, the math is also that every step, I'm sure that our bond prices will decrease already today after this report. Every step we take in this direction by decreasing our financing cost is giving us stronger position to buy new properties that are delivering new income, and so on. If you have that combination, on top of that, this is just income from property management. If you on top of that have three recurring areas that are delivering profit almost every day.
The message in the report is very clear. From the plan, the 600 apartments, we are probably in position to start 700 apartments this year, which is very strong. On top of that, strong profit from transactions and continuing strong profits from building rights. You have basic from property management, but on top of that, additional three recurring streams that all of those are delivering profit, and that give us opportunity to continue to grow and at the same time strengthening our credit metrics.
Okay, thank you. My next question. We have seen continued strong appetite for both residential and community service properties. Do you think that you would have to accept lower yields when you acquire going forward?
That has been historically our strength. If you look at our team with Lars Danielsson, Oscar Lekander, Karl Lund, Joakim Bill, Emil Evertås and me helping. You will see that we are the strongest transaction team in Northern Europe, I should say without competition. Our strength has been to do the deal off the markets to work long term to prepare the deals. We have always succeeded to buy at good levels. I see that is continuing, and it is just few months ago when we did probably the largest ever free cash flow deals from a transaction when we sold DNB. We made SEK 1.8 billion in free cash flow from that transaction. That is just giving you flavor on potential and where we are heading.
At the same time, we are selling some assets. We sold an asset here, and we get paid in a small municipality SEK 40,000 per square meter when we are buying at levels that are SEK 12,000 per square meter or SEK 13,000, SEK 14,000 per square meter. If you look at our total portfolio, it is still very highly undervalued, both in the residential portfolio in relationship to the peers, but also in Community Service Properties. In many of our properties. We have a school here in Värmdö, just as an example, there is more value in land than it is in that school. That just gives you a flavor that there is large potential from undervalued assets going forward and also this very crowded market be a long-term partner to municipalities that can continue to do the off-market deals.
All right. Thank you for taking my questions.
Thank you.
Thank you. After no further questions registered at the moment, I will hand the word back to the speaker for closing comments. Please go ahead.
I just want to say thank you very much for listening, we are been happy to present this strong report to you. If you have any more questions, please send to our IR. Thank you very much