Earnings Call: Q3 2020

Nov 3, 2020

Thank you very much. And let me start with emphasizing SVB's strength in social sustainability field. Today, as largest owner of social infrastructure, SUB is one of Europe's most socially sustainable company And that has been underlined during Q3 where we offered 1 134 young persons summer jobs. We do have as a target to offer 100 jobs every year. However, this year, we did extra investments in that in order to tackle or support young people through pandemics. However, if we go to the Slide 2 and look at our financial performance, this is showing why SVB is Europe's most resilient assets, no matter if it's pandemic or if it's economic crisis or whatever it is. And we are probably the only company in Europe that have had 99.8 percent rent collection last 2 quarters. If you do look at the numbers for the period, you will see that we delivered strong interim profit of SEK 4.5 per share, which is related to our assets that still have a large potential. So you should or you should look at our profit per share that is SEK 4.15 per share. And also at the same time, look that we have a yield of 4.5%, which is among the highest yield in Nordic real estate despite the lowest risk in the asset. We delivered EPRA NAV or long term net asset value of €30,900,000,000 which is €24.36 per share. And across the line, no matter if you look at rental income, if you look on NOI and or if you look at our profit from property development that is delivering amazing. This year, we are already as you know, we have as a target €500,000,000 to €700,000,000 already after 3 quarters. We have a profit of €852,000,000 that is largely affected our value changes and contributing to the strong profit. Then if we go to the next slide showing our 12 months rolling, you will see that we do have a rental income of SEK 4,800,000,000 and after all the costs, including financing costs, we do have adjusted operating profit of SEK2.9 billion, which is SEK2.29 per share. On top of this, you could add that we already have improved those numbers with additional €130,000,000,000 through acquisitions. And when I said EUR 130,000,000, then I talk of fully financed numbers. So operating profit, given the announced acquisition, is already today higher and passing EUR 3,000,000,000 on 12 months rolling. And after dividends and I used to say you should observe that those dividends are not indexed, those are D shares and other equity like instruments that have fixed to coupon. You will see that we are landing at including our extra income streams from property development, as I mentioned before, from refurbishments and from transactions at the profit the total profit on Fairmont's rolling of SEK 2.86 per share plus the SEK 130,000,000 that I mentioned in the introduction. And this is, of course, supported with strong profit after tax that was delivered for the 1st 9 months this year of EUR 5.7 billion. One important ingredient here is that we are continuing to decrease our financing costs. In the quarter, we decreased financing costs with 20 basic points and which of course affect cash flow. So cash flow for the 1st 9 months adjusted for non recurring costs amounted to SEK 1,800,000,000. Next slide please, Slide 4. As I mentioned before, we deliver strong operating profit for SEK 4.15 per share. And at the same time, an important message for the quarter is, how to say, emphasis on even more low risk for the assets because we prolong our growth from 7 years to 9 years, which is really strong. You can also see that despite the prolongation of the world, despite very strong operating profit, we still do have a net yield of 4.5%. And for our international listeners, this is important message, net yield of 4.5%, which is among the strongest yields in the Nordic real estate market. That also mean given and you can find some examples in the report, given the demand for our assets and given our low risk assets that we will still have large upside potential on our valuations. Next slide, please. Slide 5. This is just to summarize pillars of our strategy. We have unique and difficult to replicate long term relationship with municipalities. And this is, of course, helping us now when everyone wants to have this kind of assets as a consequence of pandemics and when everyone wants to move to safety by buying community sized properties. Our relationships and our platform in terms of our team are a great advantage. We have properties for €81,200,000,000 and are still fast despite the size still faster going low risk Nordic Social Infrastructure Property Portfolio. In this quarter, we also showed that we already have a credit matrix for BBB plus and we demonstrate strong financial position. And then the numbers are talking by themselves. We have been delivering very strong NAV growth almost since inspection. And you can see NAV growth of 64% CAGR and at the same time growing portfolio by 51% CAGR. So it is strong growth story with value creation. Next slide please. At the next slide, we are giving you some more flavor on the numbers that we follow and that we focus on. And the first, as I mentioned before, strong increase in earnings per share. Earnings per share for the 9 months, SEK 4.15 per share. And during last almost 4 years, 46% CAGR, which is probably without competition, not only in Europe, but worldwide. And this has been combining with messaging from the Board for the next general meeting that they are aiming to propose the dividend of SEK1 per A and B shares. And that means that we will have 70 almost 78 percent CAGR last 4 years. And the same line is if you look at EPS earnings per share, it is almost the same development across the line. And this is, as I mentioned in my CO letter, this is combined with BBB plus credit matrix. Next slide, please. And when talking about BBB plus we have been asked among many investors to provide the numbers. And now we are providing detailed numbers concerning our LTV, where you can follow line for line how we are counting that we will have or that we already have at Belmont's forward looking net adjusted LTV below 50%, which is SPB pro form a net debt and which should give us BBB plus given that we still on top of that also have stronger assets that our peers. And that is important. In this way, pandemic, despite being despite being tragedy has also given opportunity to people to see where you can find safe assets. And we not only deliver on low net adjusted LTV below 50%, but we deliver across the line. We had at the end of the period ICR of 3.3x. I see in presentation, it is 3.3% It is 3.3x, and it's expected to end up at 3.7x for the full year to then pass 4x early next year. And on top of that, we have more than SEK 60,000,000,000 in unencumbered assets. We do have cash of SEK 6,000,000,000 plus liquidity from sold properties and financial assets totaling SEK 9,600,000,000 and on top of that SEK 9,100,000,000 in available credit commitments. So our target to achieve BBB- is now visible and we are expecting to move to BBB plus after we have fulfilled the key figures and given those being backed by probably Europe's most safe assets. Next slide, please. And why are those assets Europe's most safe? That you can see at Page 8. You can see that of our income of SEK 4,800,000,000 or we have added extra elderly care homes after that. So probably our income is passing right now passing €5,000,000,000 So you can see that of €5,000,000,000 in rental income, 98%, almost 99% is coming from social infrastructure, is backing by Nordic Western States and tax finance income and Swedish and regulated residential. Those assets are also the assets that are highly affecting development goals and highly affected highly affecting social development in the Nordic countries. And we are the most important private delivery team on infrastructure in the Nordics and safety in the assets and safety in having almost 19% government backed income at the end of the day is what is giving us this kind of very high rent collection that we have been able to deliver through pandemics. Next slide, please. Concerning our portfolio, slightly more assets in Norway after acquisition of after acquisition of Laelingsa Stedel, a transaction that we're very happy for and we are very happy to be the largest provider of properties for preschools, in the Nordics and the Lai preschools, those are probably one of the most important impact on gender equality and also affecting poverty at the end of the day. And we are happy to deliver to this important welfare services. We are also today the largest owner of elderly care homes and LSS in the Nordics. And after the quarter ended, we did a large transaction in Finland following by long lease with municipality of Terelevoy. Next slide, please. Then to summarize, as you know, I used to say that SWB is not only real estate business, SWB is a platform with Nordic most experienced property development and M and A team and based on the sound efficient property management that is today managing passing rent of, as I mentioned before, of €5,000,000,000 and with almost 100% rent collection. So on top of this strong passing rents, we are delivering profits from property development. We are targeting €500,000,000 to €700,000,000 We should probably need to increase that target because we already for the 1st 9 months are delivering €852,000,000 in profits from property development. We do have strong renovation in investment teams that are delivering according to plan, euros 600,000,000 in refurbishments and the large potential with 75% of the rent regulated residential portfolio not being refurbished yet. And finally, M and A, I mean, the last 3 years, we have done deals for €90,000,000,000 and the year is not ended yet. So €400,000,000 is very conservative, but just as a placeholder to remind the Investor Day about the experience and the executive strength in M and A team. Next slide, please. Slide 11, I mentioned before, property development. In the quarter, we have got decision from the municipal council in knee shaping for 1 of the most urban development in the Nordics, rebuilding a quarter of central city districts with only entrance to central station and delivering 165,000 square meter in residential properties and community service properties. So very, very strong position and in total 2,200,000 square meters building rights, approximately 29,000 Apartments. And as you can see at the next slide, Slide 12, you can see proportions. This give us position as one of the largest property developers in the Nordic region. It's only Norwegian corporation, UBOSS, that have higher number of apartments, and I should say that is right now. So strong delivery from property development team, and you can see also proportion to some smaller Swedish and Nordic players. Next slide, please. I mentioned before, our M and A team, we deliver across the line long leases, 35 years with landings sustained at next year Q2, it's time for the most sustainable building in Europe to be presented in the initial left of 26, 28,000 square meter completely building the wood for cultural center. We are the largest delivery organization to police in the Nordics. We own a police station in all 3 Nordic countries. And last few months, we have announced or in the quarter, we have announced 5 or 6 different deals both in Finland and in Sweden. And finally, this continues to strengthen our position in elderly care space by signing new 25 years lease with Esteros Municipalities. And also after the quarter ended, we have started new contracts, 15 years contracts for 2 or 3 additional LSS properties. And those are build us very environmentally friendly buildings, 0 energy consumption house. Next slide, please. To summarize, as I mentioned in the introduction, strong quarter and profit after tax per ordinary share of Class A and B increased to SEK 4.15 per share for the 1st 9 months. But even more important continuing increase in 12 months rolling earnings capacity that is summing to 2.8 €1,000,000,000 and given what I said before, probably passing €3,000,000,000 in this quarter. And this has been underlined by new leases that are helping to prolong our average lease duration for community service properties from 7 to 9 years, and it is the fact of much, much longer than that. We also show strong potential from organic growth and continue to have high NOI margins, adjusted NOI margins, as I mentioned last quarter are at 71% and like for like NOI increase 3.4%, which is very strong given that our contracts are indexed by inflation. Number 2, profit before tax amounted to SEK 6,100,000,000 and after tax, SEK 5,700,000,000. Pay tax was about €90,000,000 and adjusted for nonrecurring costs and after deduction for all dividends for the D shares and hybrids, profit for the period amounted to SEK 4.39 per A and B ordinary shares. We continue to deliver strong cash flow from operations and at the end of 1st 9 months, we landed at €1,800,000,000 decurring or I should say for some non decurring costs. I mean, we have given the large amount of transactions, we have nonrecurring costs that are both affecting central administration and affecting NOI, but we don't spend time to qualify those because we do have strong profits without spending time on that, and that is also tax efficient. And number 4, property development. I'm really happy to see the delivery from the team delivering like almost 70% or 60% over target that is €500,000,000 to €700,000,000 and they are delivering €852,000,000 for the period and very strong in the quarter €594,000,000 and continuing to have high or large potential from 2,200,000 square meters building rights for social infrastructure. I should just repeat that because this is very important number, 2,200,000 square meter for social infrastructure, mainly in Stockholm and Gothenburg regions, 29,000 apartments. And please spend a few minutes to look at the Appendix 3 in the report that is, how to say, illustrating the potential from that. Our renovation and refurbishment continues and despite the pandemics continues to deliver according to plan. And finally, one of the things that I'm most proud of is that the 3 pandemics have been staying up for our communities, have been helping both in our communities. I've been trying also to support UN HR, but also offering 134 young people summer jobs, which is one of the best investments in our common future. Number 5, as I mentioned in the introduction, we already have the credit matrix in place to achieving a BBB plus rating, and we are not going to stay there. We will see that SPB with this safe asset should have A- rating. However, we are happy to show, as you can see in the last paragraph, paragraph 6, that we already before having higher rating have interest rate costs that are decreasing continuing to decrease very fast. Our average interest rate ended up at 1.4%, percent, which is 35 basis points lower than 12 months ago, 20 basis points lower than 3 months ago. And we do see that we have higher potential to higher rating. We also succeeded despite that we lowered our interest rate cost to increase average fixed interest rate duration to 4.9 years and average debt maturity to 4.7 years. And those 4.9 years average fixed interest rate duration means that we don't have any exposure to variable interest rates, and we have probably the longest fixed interest rate in the Nordics. And finally, given how we are performing, given the nature of our assets, we are looking also to continue to invest more in sustainability. And part of that is that we are planning to launch a framework for social sustainable bonds because as I said before, sustainability is basic of our business and that is giving us strong position to continue to deliver strong profit to our shareholders. Thank you. Thank We have a question from Fredrik Syon from Carnegie. Please go ahead. Your line is open. Good morning. A couple of questions So starting off with the value changes of SEK 3,500,000,000 in the Q3, can you break that down into various components, how much is related to projects? How much is yield and etcetera? I should say that more than 70% of that is related to new leases by prolonging new leases and that is the biggest effect. And the 2nd biggest is profit from property development, and that is building rights. Concerning yields, we still do have relatively high yields And if you look at 4.5%, that is in the same space as commercial real estate despite that those are very safe government backed assets. So the main explanation behind the value increases are longer leases and profits from property development. Thank you. And you're specifying in the report how to calculate the rating or at least the net debt to EBIT, how the rating institutes will look at it. Based on that table, I would assume that a rating upgrade is is just around the corner. What's your gut feeling on when that might occur? You never know particularly because the rating agencies, they tend to be, how to say, more conservative when the markets are shaky. However, we do think that this should lead to higher rating in their future. And in this way, we are also giving investors opportunity to do the math by themselves. So we do think that we have a rating matrix for BBB plus and we are expecting to be upgraded in the first step at least to BBB plus And then moving over to the balance sheet. You had cash of about SEK 6,000,000,000 by the end of the quarter. I acknowledge the deals that you have announced since then. But still, that leaves you with a large cash position. Should we expect that, that cash will be mainly used to buy back bonds or to make further acquisitions? We do like cash. So we are in the first line focusing on achieving higher rating, but we will always do the deals. So but I should say that in first line, we are focusing on higher rating. Two more questions. Number 1, in since the end of the quarter in the report, one can read that you did an externalization post the quarter, which should lead to SEK 624,000,000 in write ups. How much should we expect of that to take place already in the Q4? We do not we did put in those numbers only if they will be effective in next 3 to 4 quarters. But we do not specify more than that. And as you could see, we did the same in Q2 and have a large part of that that was announced in Q2 already in Q3. So we are trying to put in the numbers and the values that are important for investors right now. And then my final question on the earnings capacity. Since the end of the quarter, as I mentioned earlier, you've both sold and acquired assets. If those have not yet been taken over possession, they have not been accounted for in the earnings capacity. I, one, has to adjust for the transaction post quarter, right? Yes, absolutely. And as I said, you should easy way to adjust these to round up our earnings capacity of EUR 2.8 billion, EUR 2.9 billion to EUR 3 billion adjusted operating profit because I think the net, including financing, is €130,000,000 for the transactions that will be in the balance sheet given or in P and L given how it looks right now. Okay. Yes, Aurelio. Yes, SEK130,000,000 plus on operating profit after quarter end. Okay. Thanks for clarifying. Our next question from the line of Simon Mortensen from DNB Markets. Please go ahead. Your line is open. Yes. Hi. I have a few questions on my part as well. Just to understand, also my first question was on the cutoff on the homes that had are included in the earnings guidance capacity. I'm under the standard by Gladding, but if portfolio is included on the portfolio in Finland is not included, the cutoff date is October 1 in terms of that guidance. Is that correct? Yes. It's cutoff is 30 September, and we take in position learnings as stated by last August and the Pingland transaction has been signed after 30th September. Okay. And also in terms of the convertible bond, I see there's SEK 2,100,000,000 in accounted roughly SEK 2,148,000,000 as equity, which, as a moment in time, is supposed to be roughly 70,000,000 to 87,000,000 shares issued in 2023. My question is how are that equity treated in the current NAV, which is reported that EUR 2,100,000,000? Because based on what I see on Page 40, it seems not to be adjusted that it's going to be an increase in the share count. I am correct in that observation. Yes, you are correct in that. And in the same way, we are not even adjusted that we are already taking through the balance sheet all dividends despite that they are not paid out. So there are opportunities to do adjustment on both sides. Yes, yes. But that's the debt. But in the equity, you have 2,100,000,000 No, that is not issue on debt. That is issue equity because we decrease our equity with the dividends that are planned for the quarters that are going forward up to next Annual Meeting. Yes. But that is just a flavor how the adjustments can be done on different ways, but that is this is how it's done according to IFRS. Yes. So but those shares will come in 2023 and it will be roughly on the same amount of equity adjusted for that dividend, if I'm correct? Yes, yes, yes, absolutely. My second question comes to the guiding also earnings which is extremely good. Although when I look at the Q3, you have 70.8%, roughly, to 110 basis points lower. And you look at rolling 12 months, you're at 6% to 8% NOI margin. It's quite well below. The question I'm asking is, in the guidance, it seems it's a very high level compared to what we have seen in the reported figures. And this quarter, you have also reported below what consensus had expected. Could you please give us some flavoring in terms of the NOI margins and the guiding or index capacity versus the reported figures on that figure? Absolutely. I can give you more flavor on that. If you look a year ago, then we were at 63%. So you can frame it in different phase. As I said, our annual margin is in the dividend annual margin is in line with our earnings capacity. So that is I said in the Q2, we had this EUR 40,000,000 that we spend time because we are tracking in detail the tax the different heating and electricity and that kind of numbers. And we were just that is why we announced those extra costs, but we don't care to announce the extra cost. It is part of those are relatively small numbers for the numbers that we deliver, and it should be understood that if we have large number of transactions that we probably could have some cost for those. And I used to talk more about this 3 years ago because I don't know if you have bought property anytime, but it's not only buying the property, you have people that have to push the numbers in the system and you have to have the lawyers and you have to do a lot of other things that are affecting. So but in short, our earnings capacity is in line with what we are delivering. That is how. Yes. So then consensus might be too high then. On in terms of On your admin cost, you have €150,000,000 again, but you have a few times been over, you touched upon this because of tax reason and doing a lot of transactions, etcetera. But how representative do you feel that $150,000,000 based on that you have been well above this level for 4 quarters in a row now, the central admin cost? €150,000,000 is our normalized central admin cost that if we are doing like average and all the clear estate. So that is given the people that we have on salary, given that we do that we pay for our how to say for our leases and given all costs, that is the normalized number. And then, of course, I mean, we have done prospectus. I don't know if you have been in that space sometimes, but I can tell you that lawyers are making money. And we have doing a prospectus almost every quarter. The latest prospectus were in August this year. So but we don't how to say, we don't complain about that. But that is what is explaining the difference. Yes. Fair enough. In terms of your payable tax, I see that's not part of your operating profit to your ordinary shareholders in terms of you just talked about the guiding that you make €160,000,000 per A and B shares on Page 41 in the report. But I can't see payable tax in any way of this report. And in the GNL, I see you have had €92,000,000 in payable tax year to date. If I analyze that, that's 6% of that figure. Can you please elaborate a bit on your table tax ratios and talk about those year to date figures in table tax? Yes. We like to pay tax that is good for the welfare systems. So we have paid €92,000,000 up to now. And as we have said before that our payable tax should be between 8 percent to 10%, and we have not changed that. Okay. Also in terms of CapEx, based on I just look here that you aim for a dividend of SEK1 per share and your earnings capacity is or earnings capacity guidance is EUR 160,000,000. You're going to have a 61% payout ratio, which means roughly €760,000,000 left for CapEx and investments. How do you look at that for both doing the CapEx level, which is based on my estimate, 4.9% of your asset values and combine that with doing so much investments as you're doing based on the cost? Yes. We can just remember, Simeon, we do not have any CapEx. So that is very easy one. We do not have any CapEx. That means that we can tomorrow stop refurbishments and no one will complain, rather people will some people will probably be happy because they will have lower ends. So we do not have any penny of CapEx outside of that you can see in our report that we do take all of the maintenance cost, which are included in this EUR 1,300,000,000 in property cost before the accounting operating profit. So on top of that, we don't have any penny of CapEx. No CapEx, no reservishment for us like whatsoever? No CapEx, no refurbishment, no whatsoever if we don't want to do. So it is the same like assuming that if we want to buy new properties, that all investments have to fight in the same how to say, in the same space. They have to fight for the money to be invested no matter and the money to be invested in our case is we are saying that if we do have below 50 percent net debt to total capitalization and if we do a profit of I mean, here we have, as I said before, SEK 3,800,000,000 in profit. And if you assume at least value changes in accordance with our like for like growth, then you should land at a profit of around EUR 5,000,000,000 on a yearly basis. So if we do EUR 5,000,000,000 on a yearly basis, then that means that we can do €8,000,000, €9,000,000 in new investments. And those have to be those have to fight. If they are organically or build on our building rights or if we will buy new properties. Yes. But sorry, I understand, none of your assets has natural refurbishment needs. It's all taken through your P and L. Everything is taken through P and L. That is very important. And you can see in in the report now that we for the first 9 months of this year, I've already put EUR 220,000,000 in maintenance. I'll try to run those soon. In terms of the currency impact, in the report, you wrote that the exchange rate differences of EUR 300 or EUR 103,000,000 were reported due to differences in the loans and what has been hedged in terms of euro debt. Could you just please highlight a bit what how does your hedging work? Because you talk about hedging, but in this quarterly report, you write the EUR 100,000,000. Hello? If you muted your line, please unmute it. Simon Mortensen from DNB Markets. Yes, I'm here. Do you hear me? Did you hear me now? Yes, sorry. I had a bad headwind. The currency impact in terms of the hedging, in the report, you have €103,000,000 reported as the difference between what's been hedged and your assets is in the report. How do you do your hedging? And how does it come through as a cost in your P and L? Because, hey, we see EUR 103,000,000 which is kind of hard because you haven't given us that much information on how you do your hedging given that so much of your debt in euros and your assets are in other countries? Yes, I don't have any more information about that than I have said before. Our main focus on hedging is to have natural hedging and mainly through euro assets. And in the next step, we are hedging through FX forward in order to make sure that we always have the best outcome. And we are not as I said before, the reason why we do like to have loans in euro and why we are going to continue to have large euro positions is that the as a large company, we do think that the Nordic is problematic in terms of the crisis. And that has been shown in March, April last year when the Nordic bond markets almost died. So that is and I have said before, those numbers may vary €100,000,000, €200,000,000 up and down. And but usually, they will be close to below 100. Yes. And my last question is, in terms of time lines giving us a property list, more details on your sub segments in terms of yield valuation, rental levels, etcetera, in your portfolio of square meters, you've talked about that is underway. Is there any time line to when we're going to get some more visibility on that and also more perhaps details on your development rights? Yes. We are working already with focusing to give, how to say, extra material in annual report because it is difficult to do it in the quarterly reports to have 10 pages on property development. So in for the annual report, we are publishing all building rights and positions and a lot of information. So that is the date. Okay. Thank you for all my questions for now. And congratulations on the solid value uplift in NAV. Our next question comes from the line of Tobias Kai from ABG. Please go ahead. Your line is open. Yes. Thank you. I have some few questions. First of all, how much do you expect to be able to acquire for next 12 months and still achieve a BBB plus rating? It is around €8,000,000,000 to €9,000,000,000 Okay. Thank you. And both if you look at your acquisition in Norway and in Finland, the yield on the acquisitions were clearly higher than the 4.5% valuation yield. Do you believe that you still can acquire at higher yield than the 4.5? And what kind of average yield do you expect to achieve on those SEK 8,000,000,000 to SEK 9,000,000,000? I mean, as we have said before, in SVB, we have M and A platform and some of those deals we have been working for much longer period than when they are announced. And of course, we have been also sticking with the sellers through pandemics when no other guys were there. So that is, of course, giving us extra advantages. But I mean, 4.5% is not, I should say, it's not where the market is today. I should say, our portfolio should be valued 3.25% to 3.5% if we then to go out to the market today. However, some other companies like Coyamod, they just goes to value add and increase the asset value with 20%. We have seen that before with Hemla. We I mean, we work with municipalities and we are not going to do that kind of exercise, but we still do see that we have a large upside from our valuations. Okay. And then a detailed question. You say that you have SEK 172,000,000 in rental income from building rights for social infrastructure in the earnings capacity. That's 4% of the total income. Is that existing and contracted income? Or is it a potential income after development? No, that is existing contracting income. Okay. Thank you for taking my questions. Our next question comes from the line of Jan Tiersend from Kepler Cheuvreux. Please go ahead. Your line is open. Questions? Tobias Heine from ABG. Please could you repeat your question? No, it was Jan, but we don't hear him. In the meantime, our next question comes from the line of Chris Roberts from BNP Paribas. Please go ahead. Your line is open. Yes, good morning. Thanks very much for taking the question. So a couple of things and apologies, they may be just slightly fiddly. If I look at your working capital, you have quite a big swing for well, you had a big swing in the second quarter and you've had a big swing in the Q3 in terms of receivables. It would be very helpful if you could just explain what that is. And then the second question was, is there any guidance you can give us or any sort of parameter you can give us for any further disposal proceeds we should expect for the balance of the year in the Q4? That's it from me. Thank you. We don't care about working you should probably not use your time for that. But if you do that, the main explanation for this is the first at the end of 2019, there was handfuls of transaction. And in Q3, that was cash coming in that is booked at other receivables. So that is why when we presented our Q2 report, we said that we have EUR 7,000,000,000 on cash booked within other receivables and this cash has come in after end of the quarter. Okay, fine. That is cash from sold assets. Thank you. And then any disposal prices we should be thinking about for the rest of the year? We don't need I mean, we will always buy and sell. That is part of our business model. We do have now a portfolio that we want to have and they may come guide that want to pay a lot, and then we'll be happy to consider that. But in essence, the repositioning is done is what you're saying? Our repositioning is done. And you can if you look at the CEO letter, you can find all of the numbers for that. Perfect. That's very clear. Thank you. Thank you. Our next question comes from the line of Jan Yvesfeldt from Kepler Cheuvreux. Please go ahead. Okay. I hope you can hear me now. I was cut off earlier. I actually have four questions, the 2. First one regards your property uplift. And there was a question asked about the split of your property uplifts. And you mentioned that 70% were new leases and maybe 30% were property development. Does that mean that your the effect from the yield shift was rather low in the quarter? Yes. It's still low. As you can see, Jan, we are still reporting yields of 4.5%. So that is and we have been pending between 4.5% and 4.8% since start of the company. So and those numbers, 17% 30%, it's more my assessment from and just to give you an example, we are in this quarter, I mean, this is unrepresented, I should say. In this quarter, we have signed leases with rental value of EUR 462,000,000 with an average contract duration of just over 25 years. So that is telling clear language where the main property uplift is coming. And on top of that, we do in the quarter very strong profit from property development, mainly related new building rights and the projects. In total, almost SEK 600,000,000 in profit from property development in Q3. Could you just quantify the effect from the new shipping project just to get a feeling for the effect from the planning process? It was in Q3, we had profits from property development of CHF594,000,000. Euros And how much of that was knee shopping or? We are not because we do not want to give the numbers on specific properties because that can affect our, how to say, opportunities to get to pay and sell. Okay. And just third question relates to your the investor market for community server properties. You mentioned your net yield is on 4.5 percent and probably your portfolio market value would be below 4%. When you do acquisitions going forward, could you buy below 4%? Or do you think that is too expensive? No, that is not expensive. We could go down to 3% because those assets with long leases and with safe income are still we have seen some deals that have been we do not follow at the deal that was on at 2.2% this month, but we were ready to follow down to 3%. And I mean, if you compare this kind of safe Nordic government backed cash flows with the German offices, then it is a joke that German offices are valued at 3%. Our German rent regulated residential net yield is 275%, which is I mean, we put in this report some population growth. And if you travel to Germany, no city is going. And it is I am how to say, I'm clearly disappointed by myself that I'm not succeeding to explain this for investors when comparing the market. So my problem is not that needs in Sweden are going down. It is rather that it is given how the cash is valued in our competing countries like Germany's direct competitor to us, there is a work that we need to do to show the numbers, to show how development of our market is and to show the safety of our assets. Okay. And my final question regards your split. It's right now about 80 percent community service properties, 16 percent residential. In 3 years' time, will that change materially? Or how do you look upon acquisitions? Are you more targeting the community service properties? Or just some few comments on that. So we do like Swedish Rent A Great Resentiential. We see those as a part of social infrastructure because Swedish rent integrated residentials are actually affecting poverty. And there is also a job that we need to explain outside of Sweden how this regulation work and what kind of trends are there. So I think the split will be I mean, we will be much bigger company. We have already announced that we will have SEK 125,000,000,000 in 5 years, but the split will be almost the same. We do have a lot of new buildings, new rent regulated residential in Stockholm, and we are looking to do more in Gothenburg. So it will probably be more rent regulated residential in Stockholm and Gothenburg. Okay. Thank you very much and congrats to a good report. Thank you. We have a question from Bertil Neil Sanson, Carsquare. Please go ahead. Your line is open. Thank you. First, a follow-up on the value increases of SEK 3.5 billion. You mentioned there in your also that something like 70% were due to the prolongation of leases and that's Danning's as expected I assume Because you announced 2.2 It is not only that is very important, Batil. And 70% was my rough assumption. But the real number that is important in this case is that we in the quarter, as we are writing at Page 12, we do sign leases for prolonged leases for SEK462,000,000. That is more than majority of Swedish real estate have in yearly income, I should say. Euros 462,000,000 in new contracts with 25 years average lease. So that is the main explanation. But 70%, does that totally correspond to those 2.2% that you announced in Q2? Or is it part of it just? That is just part of it. How much roughly? We are we never combative detailed information in that space that can affect our opportunities to build business. Okay. Okay. Second question, maybe briefly, you started your new business area for public infrastructure and the SaaS buildings. Have you set any target for this area, this acquisition? You have a total target of about SEK 125,000,000,000 and some years, as you recall? Yes. That is I mean, we are a real estate dealer. We do not target like funds. We do the deals that are most beneficial for our shareholders. The government infrastructure is interesting space where the government needs help. We are already today the largest player in police space, holding 25 police station in Sweden and additional police station in Norway and Finland. So we do think that we can help both with defense properties used in peace and also for detention centers. But all of that all of this is as also to be you have always to be careful concerning sustainability issues and so on. So that has to be managed in a proper way. And we do think that we are the largest player in the Nordics should help government to get efficient properties for those important services for peace and justice. But that is ordinary business for us. Okay. Thank you. There are no further questions registered. So I hand back to the speakers. Good morning. We have received one two questions from Oliver Karubos from Goldman Sachs. Please can you comment on the size of your current acquisition on disposal pipeline at what yields does Espibi aim to acquire at? We do have I mean, we are always doing deals and we are a growth company. However, it is difficult to us to split acquisitions and divestments. As I said before, given the credit metrics, we should be able to do EUR 8,000,000,000 to EUR 9,000,000,000 in net acquisitions on a yearly basis going forward and be partaking in any new capital. And at what yield does this would be able to acquire at? That is as I commented before, that is always depending how the market is and what kind of yield gap we can achieve. So we never think in terms of yields. We think in terms of cash flow. We think in terms of residual value. We think in terms of location and so on. But we should always be able to deliver strong yield, GAAP and strong profit to our shareholders. And the second question, SVB recognized a €3,500,000,000 valuation uplift in the 3rd quarter. How should we think about further portfolio revaluation gains by year end and next year? As I said before, we do see that our average yield of 4.5 percent is not accurate where the market is. And we see large upside potential for the next 4 to 8 quarters going forward. Thank you. And I will now ask Ilya to finalize with a few concluding remarks. Thank you very much all for listening. And our message is relatively simple. We are delivering strong profit to our shareholders. We have the safest assets in Europe. I mean, this quarter, we prolonged our boat with 2 years, which is fantastic for this large portfolio. And as I said before, we are aiming to deliver the largest increase in NAV per share. We put that as a target already 2019. And 2019, we had 73% increase in NIB per share in 2020. After the 1st 9 months, we are up to 32%, which is the largest in Europe. And at the same time, I do think that in those times, it is very important that companies are also responsible for the shareholders. And I do think that SBB Board of Directors doing writing where they stated that they will they aim to propose to Annual Meeting Annual General Meeting 2021 to increase dividend to SEK1 per share because SMB is like municipal bonds, just higher dividend as clean on top. Thank you.