Listen to this summary of our second quarter of 2018. Thank you for listening in this lovely weather outside. Hope you have that in your city as well. Here in Gothenburg, the sun is almost shining now. Next slide. Let's start with a quick look from our second quarter. The main thing is that you can see that we have a more efficient property holding than before. You can see that in the income from property management, which had increased by 18% compared to last year, also in the surplus ratio, which amounts to 75% compared to 74% last year. We have also completed record number of new constructions of 850 in total this half year, and have an LTV of 46%. It looks good. Turn to next slide.
We have our investment properties in the most attractive regions in Gothenburg and Stockholm, one-third in Stockholm and two-thirds in Gothenburg. We have both residentials and commercials in Gothenburg. That's why it's doubled compared to Stockholm. We have a property value of SEK 43 billion, and they are split into 217 properties, and we have an occupancy rate of 99%. Half of the area is almost residentials, and the other part is for commercials. The main part for the commercials are offices. Now turning to next page four. This second quarter, what has happened then? The most important thing that we did was to restructure our interest rate derivative portfolio. That's because the new corporate taxation rules. I will come back to this later because that affects many things for our future.
The AGM in April decided that we can start a new synthetic options scheme for all our permanent employees. It will be for until the last 31 of May 2024, or when the share price reach 140 kroner. We also think it's very important to care about the sustainability and therefore, we think it's good to have a sustainability manager to focus even more on this thing. Karin Mizgalski took up this role in June, and this will be very good for our future as well. One more important thing is to have a cost efficiency in our new construction and also quality thinking, but also in our existing properties. Patrik Persson will take the role as the Technical Director from the 1st of September.
He will also be a member of the group management from that time. Turn to next page five. I guess all of you know about the new corporate taxation rules. It's a reduce of the deductibility of the interest costs at 30% of EBTA. They have also reduced the corporate tax rate in two steps from 22% and down to 21.4% the next two years, and then down to 20.6% from 2021. This means that we have to reevaluate our deferred taxes, which we have done in this second quarter, and that affects in one-time tax revenue by SEK 272 million. Turn to next page six. Something about the restructuring of our interest rate derivative portfolio.
We realized the swap volume of SEK 8 billion with a deficit of SEK 776 million. We did this to have a better position for the future when we have this reduced deductibility of interest costs. The one that we sold was had an interest rate of 2.55%, and the one that we entered have an interest rate of 1.1%, it's a huge difference. The maturity of the one that we realized was almost five years, and the one that we entered had almost just about nine years. This SEK 776 million doesn't affect the total profit because we have to reevaluate our derivatives all the time, so it's a zero-sum game in total. Turning to page seven. We have completed 500 apartments this second quarter.
In total, 850 apartments in total this half year. It's a record number for our operation. We have good employees who can take care of this in a perfect way. I will show you some examples or show you the one that we have occupied. Start on next page eight. Trädgårdsporten in Tyresö. It's our second rental apartment project here. Of those 184 rental apartments, the most of them were occupied in this half year and this second quarter. We started with a few already at the end of 2017. Next page. Orangeriet, phase I. Maybe many of you recognize this property because it's been mentioned a lot in media.
This was one of the projects that we decided to switch from co-op into rental. This was the first project. This first phase is 90 rental apartments, which are now occupied. Phase two of 80 rental apartments will be occupied next quarter. Next slide. Here is Rödklövern in Mölndal. It's a modular housing concept of almost 90 rental apartments. Hopefully, in the future, we can build some other properties at this area for permanent rental apartments. That's for the future. Now turn to next page 11. Stallbacka Allé. It's the fourth project that we have completed in this area. This project was also one of the projects that we decided in December 2017 to switch from co-op into rentals. It's 133 rental apartments and are now fully occupied.
It's a popular area to live in here in Åby Stallbacken. Now turning to page 12. We have started 160 apartments during this second quarter. In total, this half year, 660 apartments. We have also started some commercials, commercial property in Sturefors in the city center of Gothenburg on the avenue, where we refurbish an old property and also construct new premises of total 3,500 square meters. Now turning to next page 13. Österåker, it's a new municipality for Wallenstam. It's around 30 minutes from with car from Stockholm City. We started here in the second quarter of 130 rental apartments. We will start even more here later this year of 300 more rental apartments. Now turning to next page. Stens Stures Kröningar.
It's in Gothenburg, close to Scandinavium, so it's a very good location. Finally, we can start this because we worked with this plan for many years. It will be in total 100 apartments. You can see on this picture that we have three buildings, and we start with the one in front. It's the we build on the existing property. We create four more floors with in total 33 rental apartments. Now turning to next page 15. Now, I will talk little about our profit from this second quarter and this half year. We turn to next page and start with the income from property management. It's a record year for Wallenstam. We have never had this high income from property management in one half year.
It amounted to SEK 462 million, which is almost SEK 70 million higher compared to last year, 18% higher. The mainly thing is that we have our new construction coming into management. As I've said before, it's an efficient property holding and also efficient property management in our existing properties. We have a very successful letting operation. We have a low vacancy in our commercials, Our residentials are fully let. The total occupancy rate is 99%. About the financial expenses, they are quite higher compared to last year, the interest rate, the average interest rate are lower with 29 basis points. It's 1.71 this first half-year compared to two last year. The reason is that we have more interest-bearing liabilities compared to last year, on average SEK 3 billion more loans.
Now turning to next page 17. I guess some of you recognize this picture, but I think it's good to remember this for you all. This is just an average of the 308 apartments that we have decided to switch from co-ops into rentals. You can see that, after six years, we are breakeven compared to the profit we should have done at the co-op. After the six years, we will keep the properties in our management. It's a good business from us. We don't get the money day one, in the long term, it's a good business for us. You can also see this in our income from pro-property management, this half here from the one that we have occupied. Next slide, please. Page 18.
The net operating income has increased by SEK 90 million. It's 15% higher compared to last year. The rental income has increased 14%, SEK 13 million. The main part from this is our new construction coming into management. Also you can see that the successful letting of SEK 31 million affect positively. The main part is from our commercials, which I said we have a low vacancy rate of 3%, and it's a huge demand for CBD premises. We have also, the negotiation with the Tenants Association in Stockholm is now ready or complete, and it ended with 1.2% in higher rents from first of April this year. That affect in this second quarter. The operating expenses has increased by SEK 22 million.
The main reason is that we have a bigger property holding compared to last year or a larger property holding of 120,000 square meters more. Per square meter, we have reduced our expenses by SEK 5 per share, per square meters, not per share. We also had a colder climate the first quarter. You don't remember that quite now when it's so hot outside, but it was very cold the first quarter. The property maintenance is SEK 4 million higher compared to last year, it's also hard to say for every quarter because in, it can be high one quarter and be lower one other quarter. In property maintenance, it's easier to see after one whole year. In total, SEK 91 million better compared to last year. Turning to next page.
Page 19. Here you can see the effect of our realized financial instruments of 776 million SEK. This affects negatively here on the realized profit, you can see further on that we have the opposite cost. It's a zero-sum game in total. The income from natural energy is 16 million better compared to last year. The main reason is that the energy prices are higher than since many years ago, both energy price and energy certificates. We have also lower production in our from our wind turbines because it hasn't been so windy outside, so we have a less production of 30 GW hours. We have sold a few apartments, co-op apartments this quarter, it's nothing to mention really. Now turning to next page 20.
We can start in the middle here with the unrealized changes in value of financial instruments. Here you can see the opposite cost from the one who was recognized in the realized SEK 779. It's, you can see that it's a zero-sum game in total. We can go up to the unrealized changes in value of investment properties, we can see huge demand for CBD properties. That's why we have reduced our yield requirements for some of the city center commercial properties. On average, we have 4.6% in our commercial property holding compared to 4.8%. A third of the unrealized changes comes from our new construction. Also, of course, better NOI in our property holding that affect the unrealized value changes positively.
We have also, like I said, started a synthetic options scheme to all our permanent employees. This affected this quarter by SEK 15 million in unrealized costs. In total, it will not exceed a cost of SEK 330 million when the synthetic options schemes is completed. Here also on this, if you just look at April to June, you can see a tax revenue of SEK 50 million. That's because we have this one time post of SEK 270 in tax revenue. Turning to next page. Here is the surplus value of the completed new construction. In total almost 40% for the one that we have completed this half year. It's investment cost of almost SEK 1.7 billion and a surplus value of SEK 650 million.
That's also why it's very important for us to have a cost focus because to reach this it's a lot of work behind those figures. Now turning to next page 22. We have pushed our plans forward during this first half-year. 1,800 apartments are further in the project process. Here are some examples. Up to the left it's Kallebäck, where the zoning plan is approved on almost 500 apartments. On top in the middle it's New York on Gärdet in Stockholm, where we received a building permission. Down to the left it's Godhemsberget in Gothenburg, in Majorna where the plan has gained legal force. We have to work with also to fill up our product portfolio. We try to get as many land allocation as we can.
At the moment we are negotiating about some more to fill up our portfolio with. Next page 23. The investment properties has gone up with SEK 5 billion compared to last year. The main reason is our investments in our new construction. Also because a good market of course on the proper market. Turning to next page 24. We have invested around SEK 1.2 billion this half year, and mainly in new construction. The only thing that isn't new construction is the acquisition of the office property in Uppsala. Otherwise it's land and construction costs. We have 1,760 apartments now under construction. Turning to page 25. Here you can see that the interest bearing liabilities compared to last year are higher.
It's on average SEK 3 billion higher compared to last year. We have also some longer capital compared to last year. We can turn to next page 26, and talk a little bit more about our financing. We keep our strong financial position with an equity ratio of 44% and an LTV of 46%. Here up to the right you can see why we did this restructuring of our interest derivatives. Now at the end of our closing day, we have 1.01 on average interest rate. If we compare that where we have our closing day at the end of March, it was 1.9%. We have almost half of our interest costs for the future.
Because we did this because we can have deductibility this year, but not next year. We are well positioned for our future. Down to the left, you see that we are still mainly financed through bank loans. It's almost 70%, but we have also bonds. We established an MTN program last year of SEK 5 billion frame, which where we have issued around SEK 2.6 billion. We have also commercial papers. The interest maturity has increased to 38 months from 34 months. Now turning to next page. We have one goal, and we are on the last half year now. We start now. For this time, we had 11% value growth. Our goal is to have an value growth of at least 10% on average every year.
For this latest 12 months period, it's 10.5%, and it's SEK 2.4 billion. As far in this business plan, we have created around almost 17% in value growth. You can see on the graph to the right that it's, it has increased a lot during the years. Now turning to next page. Now I'm ready with the presentation, and I would just say that we are well positioned for our future, and we look forward to see what happens next half year of this 2018, but also from 2018, 2019 and so on. We will also re-release a new business plan at the end of this year, and it will be very exciting to follow. I'm now ready for some questions.
Thank you. Ladies and gentlemen, if you do have an audio question for the speaker, please press zero one on your telephone keypad, and you will enter the queue. After you are announced, please ask your question. Our first question comes from the line of Albin Sande from Please go ahead. Your line is open.
Yes. Hi there. I have two questions. The first one is on the residential starts that obviously dropped quarter-over-quarter and can be very lumpy. My feel was after Q1 that you said that you were possibly, you know, looking into some slower movement in the starts, maybe looking at what contracting costs are doing and so forth. I just wonder if that is still the strategy or you kind of start the gap as much as you can, I guess specifically on the rental residential side?
Yes. Hi, Albin. Answer to your question is that, for example, Kallebäck, we thought that we should have started, but that's why we haven't started that is because of the planning process. We have also some projects that we have waited for some better prices, and we will start them soon because now we have recalculated on these projects, and we think that we can have not so much better prices, but it also costs to wait. We will start them soon.
Yeah. I know we've discussed that target before, that your overriding target is the 10% NAV growth, and by doing that, you have a certain, you know, goal.
Yeah.
How should I put it? Yeah, ambition to start a certain amount of units. Is that still valid, that number?
We have almost started 3,900 at the moment, and it's 3,600 left. It will be very hard to reach those 7,500. We start many more now this third quarter and the fourth quarter. Those properties and then those apartments plan properties, we will have them for our future, for our next business plan. We work with many properties already now to start in the future. For example, Kallebäck is a huge project that we had to wait for that we will start this year. It's a problem for all that the planning process takes a lot of time.
On the demand side, you see no weakening on the rental residential side?
No, the opposite because it's a huge demand. For example, the one that we switched from co-ops into rentals, it's very popular to rent those apartments. It was just to buy them which was hard. It's a huge demand.
Great. My other question relates to the tax proposal and what you're doing there on the interest rate derivatives. I understand that you take advantage of getting them tax deductible this year. If you look, if you've had more time to analyze this proposal, you know, heading into 2019 and 2020, what do you see on your paid tax level? Any meaningful change? I guess the reason for asking is obviously with the kind of lower yielding assets that maybe residential rental is, then you could be hit more than others. Have you seen anything in that proposal that would make you worried about paid tax levels going forward?
No. Like Hans said in this last quarter, we if we shouldn't have done anything, it should have affected us with SEK 60 million. Now we have reduced our interest expenses by half. We are not ready. We go through our operation now to have the best position as we can. It's very hard to say how much it should have it will affect us, but hopefully as less as we can do.
Okay. Thank you very much.
Thank you.
Thank you. Our next question comes from the line of Marie Scheja from Nordea. Please go ahead. Your line is open.
Hi, thank you for taking my question. I have a question regarding the. I wonder if you could comment the yield on new construction. Can you see a further drop that explains your increase in supply this quarter?
Is that the drop from the construction?
No, I just wonder if you could comment on the yield on the construction?
Oh.
If you can see a further drop in the yields, that explain your increase in supply this quarter.
Before we start a new construction, we require a yield of 6% before we start. We keep that.
Okay. You can see that level holds this quarter as well?
Yes, we want to have that, no matter the interest rate, because it's very low now, we know that. To have this machine, ongoing machine to construct in all times, we have this high, required yield of 6% so that we can build in even in when there is a crisis.
Okay. Yes. Thank you so much.
Thank you. Our next question comes from the line of Erik Güllstrom from Carnegie. Please go ahead. Your line is open.
Thank you very much. I have a few questions as well. Perhaps if I could start with your investment pace. You were noticing that construction accounted for just a little bit below SEK 1 billion in the first half of the year. What could you say about the pace going forward? Do you expect this sort of pace to keep up for the second half, meaning that you will make investments of around SEK 2 billion this year excluding any acquisitions? Is that what we should expect? Could you say something about your expectations for perhaps next year?
Yeah. You can say that I mentioned this before, but our plan is to invest around SEK 3 billion annually, and it can be SEK 2.5 billion one year and SEK 4 billion one year. On average, around SEK 3 billion.
Okay. Is that gonna be sort of , when you say SEK 3 billion, does that include acquisitions as well?
For some land, yes, but no other acquisitions. Just land for our new construction.
Okay. In order for that to keep up, you definitely need to ramp up the pace for the second half of the year, but that's basically what you're saying is the case.
Yes. Yes.
Okay. Good. Good. My, my second question was regarding your yield requirements. You mentioned that you lowered the yield requirements for commercial assets, specifically for some properties in CBD areas in Gothenburg, which obviously makes sense given the market. On the other hand, it seems like you increased yield requirements for the residential part during Q2 as well. I don't really see sort of that movement in the market. Could you just perhaps explain that?
No, that. I thought I should get that question because when we have our new construction coming into management, we value those, and they have higher required yield compared to what we had in our portfolio before. That's the reason. We are cautious in our valuation, that's another thing. That's why it affected in a higher yield this quarter.
Should really new construction, if that goes into property management, I would assume those properties would have perhaps at least the same kind of yield requirements as the one already in the portfolio. I mean, they should be at very high quality and so on.
We are cautious there because we also have a high net operating income in our new construction, which means that the value per square meters, we are cautious there not to have too high value per square meters. That's one reason.
Okay. Okay. All right. I get it. Secondly, I was wondering if you could talk about the financial costs a little bit. Obviously, you've done changes to your derivatives, and that makes a lot of sense. If I, if I look a little bit on what you were talking about in terms of your average interest rate for the first half of the year, being somewhere at, or at least for Q2, I think it was at 1.7%, given your interest rate total debt situation, it seems a little bit like the net financials in this quarter were extremely low. I was wondering, has this anything to do with the project portfolio as well?
Does the project portfolio have an impact on your net financials that sort of is difficult to read through?
This restructuring that we did, this second quarter affect positively this second quarter. We didn't done, we didn't have this effect in the first quarter. That's why quarter two looks much better compared to last quarter. And this 1.71, it's for the total six months. The average for the second quarter was lower.
Okay. Yeah. That's absolutely that's understandable. I'm assuming then what you're guiding is that we should expect somewhere around this kind of level that you reported in Q2 going forward or perhaps even lower. I was also wondering if your project portfolio will have an impact on the net financials as well, or if this is what we should expect.
Because on this second quarter, we don't have the total effect of the restructuring, so it will be lower. We have also invest in our new constructions. In those interest rates, we take those costs to the property value.
Okay. Yeah. Okay. Yep, I got it. Okay.
Yeah.
Okay, good. Those were my questions. Thanks.
Yes. Thank you, Erik.
Thank you. Ladies and gentlemen, once again, if you do have a question, please press zero one on your telephone keypad now. As we currently have no further questions, I'll hand back the conference to you, Susann.
Thank you. We don't have any questions on email either. I will say thank you again, and hopefully you will have a good holiday in the sunny weather, and see you in the autumn. Thank you. Bye.