Welcome to the presentations of Wihlborgs Q1 2025. A world with new conditions almost every day. Så känns. Things have to be done. Wihlborgs keyword since many years is "handlingskraft." Best translated to. We continue to act where we find possibilities, and we are prepared for new actions whenever the time is right. During 2024, we had record high volume of new leases, and that strong trend has continued during 2025. High quality, good locations in the region, with leases fast, fast also ahead. And strong cash flow gives opportunities for action. Continues. Let's go to our report and the summary of Q1. Rental income: SEK 1,045,000,000. Income from property management: up 9% to SEK 400 million. Net letting positive with SEK 35 million and good activity. Debt to EBITDA at 10 times. Agreed an acquisition of SEK 2.4 billion from Granitor, completed in April.
Good quality and good location continues to be attractive, and we continue with our project investments with good results. The result for the period: small increase of rental income to SEK 1,045,000,000. Let's remember that the comparison period 2024 had one-offs over SEK 20 million. The operating surplus increased to SEK 731 million, and income from property management, as mentioned, increased by 9% to SEK 463 million. The result for the period amounts to SEK 431 million, corresponding to 1.4% per share, and EPRA NRV increased to SEK 95.08 per share, adjusted for paid dividends. A comparison of the rental income Q1 2024 and Q1 2025. Indexation gives SEK 10 million. Termination fees plus minus SEK 21 million. Acquisition plus SEK 3 million. Currency effect minus SEK 1 million. Additional SEK 7 million. Completed projects, new leases, and renegotiated plus SEK 7 million. Q1 2024 was a record level on new leases, and I then got questions if we and the market could keep that volume.
The market can share. I'm very confident that our skilled organization keeps both focus and tempo. Now the numbers also give proof that the market is there. Q1 2025 is the third highest volume of new leases ever, SEK 134 million, and net letting of plus SEK 35 million. You never know ahead what will affect each quarter, but seen over time, 40 positive quarters in a row is our new record. Very grateful to the whole organization for this. It's interesting to see how we can sign new leases in both existing premises and in the new build projects. The conclusion is a strength. Without new areas, we wouldn't be able to have positive net letting in all these quarters. On a yearly basis, the net letting is positive also in the existing portfolio, both for 2023 and 2024. 2025 also looks positive so far, including April.
Here are some of the tenants that we have signed during Q1. The largest leases for Malmö University. As always, we see a mix of different businesses. It's companies in IT, construction, civil engineering, recruitment, and more governmental tenants as Myndigheten för tillgängliga medier. The wide diversity is always a strength. Here we have the net letting in historic activity. Lettings in green, termination in light blue, and dark blue stacks are the net letting. Now 40 positive quarters in a row, and the high volume with new and high demand seems to continue. Q2 has also started well with a new lease with Per Aarsleff in Copenhagen of 24,000 sq m at AB Industrivej. Good potential also ahead. Happy with 40 quarters. The next goal is to beat that. And the list of our 10 largest authentic orders.
Strong customers, and they contribute with 20% of our rental income. Eight out of ten are governmental tenants, and the public sector contributes with 23% of total rental income. Rental value as of 1st of April. Our acquisition is SEK 4,596,000,000 per year plus 3.1%, and rental income SEK 1 billion. The rental. We also see a bit higher vacancy in line with the rest of the market. Looking at the like-for-like figures, all the properties we own. Project is 4%, and rental income is down 0.8%. The growth in rental value is supported by indexation of 1.6% in Sweden and approximately 1% in Denmark. Lower rental income as an effect of higher vacancy, and that comes both from a timing effect with many new leases where we can see a gap between moving out and new signed tenants moving in.
That means that will improve in end 2025 and continues good effect 2026. We also see higher vacancy in the market in some areas, as in the industrial portfolio in Helsingborg. I think that higher vacancy will follow us for a bit longer time, and in other areas, as offices in Malmö, occupancy will pick up quite quickly when the market turns. We see very few new projects from competitors, and my best estimate is that we can continue to take advantage of that. Let's look at changes in market value of our properties. We started the year with SEK 59,168,000,000 in accordance with our external valuation, and we let them evaluate 100% of the portfolio every year end. No acquisition during the period.
Investment SEK 638,000,000, divestment minus SEK 13 million, changes in valuation plus SEK 69 million, and together with currency translation of minus SEK 736,000,000, that summarized to a value of SEK 59,126,000,000. The value of the portfolio has developed, as you can see on this slide, since 2005, without raising any new equity. With investments, new leases, and a few transactions, we have also during the last bit more than years been able to increase the value bit by bit. For 2025, the transaction made 1st of April will contribute in a good way, but we will see that in the next report. These figures, the running yield, show how we actually perform in relation to the valuation. This is not the valuation yield. For the whole portfolio, the occupancy rate is 9%, excluding project and land, and with an operating surplus of SEK 3,140,000,000, that gives a running yield of 5.6%.
Fully let, the portfolio would give a running yield of 6.4%. Good earnings capacity in relation to the value of the portfolio and good cash flow generation is the foundation for further expansion. If we look in the office portfolio, the market value is SEK 47,100,000,000, and overall the occupancy rate is 91%. 92% in Malmö, 87% in Helsingborg, 91% in Lund, and 92% in Copenhagen. Same numbers as year end. A bit higher vacancy than last year, mostly affected by the gap between moving out and new coming in. These figures will improve later this year, but the largest effect from many new leases will come 2026. Occupancy for offices in Helsingborg is estimated to increase 2% in October, for example, from new leases we have signed so far. The operating surplus from offices summarized to SEK 2,572,000,000 and a running yield of 5.5%, 6.2% fully let.
The demand for logistic production continues to be good in Malmö, with an occupancy of 96% in Malmö, lower in Helsingborg at 82%, 99% in Lund, and 96% in Copenhagen. 88% rate as a whole, with a running yield of 6.5%, 7.6% fully let, and total value of SEK 8,383,000,000. For us, the combination of businesses with production, development, and logistic will be the best tenant in the industrial portfolio. We continue to see harder competition in the third-party logistic segment. Quick changes in needs, a higher vacancy as an effect of a lot of new build facilities. Worth mentioning is that our portfolio in Helsingborg still gives a decent running yield of 6.5%, even with a higher vacancy. Also good that tenants in our best segment continue with good demands.
The development of our total portfolio running yields, 5.6%, brings stability, not least since the portfolio overall has a high quality and good locations. As noticed before, a high increase of the running yield since 2020. ESG results from Q1 certification in Swedish offices are now at 91%, and Denmark has started the process in a good way. Energy consumption continues to decrease, and we have a new target of maximum 75 kilowatt hours per sq m. We continue with. For most of the areas, we have found a way where reporting actually can contribute. A goal of reducing climate impact with more than 50% construction of office buildings the last five years. Even further balancing system will be necessary. To be able to work with that in a local way, also contribute lower districts will be the best way for us. The.
Seeing materials as much as possible, that will continue the most fundamental way of working. We have kind of collaboration. Here is a catalogue of our value and properties in our four cities in Q1: 40% of the value in Malmö, 22% in Helsingborg, 17% in Lund, and 21% in Copenhagen. As mentioned before, the diversity of different businesses in the region is a strength, but also the diversity in volume is interesting. Both in Q1 and Q2, we have signed leases, single leases of more than 20,000 sq m each in the office segment. Especially in the Copenhagen area, we see more potential of interesting volume also ahead. The mix of small and larger tenants, this will also contribute to our strength. As of April, we add on.
In total contributing with 51,000 area, 8,000 sq m of land for industrial development in Lund, and 12,000 sq m building rights for offices also in Lund. This portfolio will contribute with an estimated yearly operating surplus of SEK 130 million at the start. Here is the land areas included in the portfolio. At Brussels Kolen , we estimate that we can build between 40,000-50,000 sq m industrial building, and we will see when the time for that will be right. Time for finances. Over to you, Arvid.
Thank you very much, Ulrika, and good morning, everyone. Looking at the. As Ulrika noted early in the presentation, rental income amounted to SEK 1,045,000,000, up half a percentage point versus the same quarter 2024. Q1 2024, we had termination fees of SEK 21 million, so that you should bear that in mind in the comparison between the quarters.
That income, of course, fed through downwards in the P&L during 2024. The operating surplus in Q1 2025 amounted to SEK 731,000,000, 2% up versus the previous year. Happy to note that the operating surplus margin thereby was one percentage point higher than the corresponding quarter previous year. Income from property management amounted to SEK 463,000,000, up 9% as financial costs have improved during the quarter. Positive value changes in the quarter, plus SEK 69 million also a slight positive effect from change of valuation of our derivatives portfolio, plus SEK 38 million. All in all, profit for the period of SEK 431 million. Looking at the balance sheets, investment properties have on a 12-month basis increased in value by SEK 0.4 billion to SEK 59.1 billion. At the same time, equity increased by approximately SEK 0.8 billion to SEK 23,500,000,000. Borrowings increased by SEK 0.6 billion to SEK 29.3 billion.
Translating these numbers into key ratios on the next slide, the equity assets ratio now stands at 38.8%, unchanged versus 12 months previously. Our LTV stands at 49.5%, slightly lower than 12 months previously. The interest cover ratio in the quarter has improved to 2.8 times in Q1 2024. The EPRA, and you see the per share numbers on the lower part of the slide. EPRA NRV now stands at SEK 95.08, which is an increase of 9% if you pay dividend previously. On the next slide, the long-term development of the EPRA NRV. Despite the, over the past few years, the long-term trend is actually still very strong, with a growth of 15% adjusted for paid dividends. On the next slide. Improvement versus the previous few quarters. Our past few quarters, loans come down a bit.
Just looking at the LTV, bear in mind that we may, as Ulrika said, from Granitor, which is debt financed. Momentarily, that, of course, affects the LTV upwards. Looking at in relation to EBITDA. This ratio now stands at 10.0 times, which is comfortable. See also in the Wihlborgs history. On the next, our sources of financing as of end March 2025. The Danish real mortgage system market. I think it's worthwhile to note that during Q1, the activity was reasonably high. Over the past, note that the bond market is sensitive to both financial, economic, political around the globe. You can see the with the average interest 38. That is fairly close to where the marginal cost of debt would be for us, with the current STIBOR of about 0.3%.
On the next slide, you can see how the development of our fixed interest periods and our loan maturities have evolved over the past years. Fixed interest period now is on average 2.3 years, and the average loan maturity is 5.3 years. Slightly the previous quarter. This slide shows you our available funds, unutilized credit facilities, plus liquid funds as of end March. The number is high. It is at SEK 4.6 billion. As you are all aware, on the 1st of April, we acquired properties from Granitor for an amount of approximately SEK 2.4 billion. For us to have a preparedness to be able to conclude such a transaction without any major activities having to take place on the financing side. Obviously, the SEK 4.6 billion will decrease also with the expected dividend payment of approximately SEK 1 billion, which will come in about a week's time.
With that, I hand back the word to you, Ulrika.
I'll give you an update on our investments in progress and a quick overview of our largest project. During Q1, we have invested SEK 638 million, and it remains SEK 3,463 million to invest in approved projects. A good volume also ahead. A quick improvement of the yield on cost continues, and the ongoing portfolio secures also decent gain from projects. As always, a good mixture of refurbishment and new build. With the latest announcement made now in April, a 15-year lease with Per Aarsleff in Copenhagen. The project at the Ebbe Industrivej started earlier this year and will give a total refurbishment of one of the buildings that Danske Bank had years ago. 24,000 sq m now fully let, investment SEK 231 million and yield on cost a bit above 6%. Completion in Q1 2026.
Another announcement is the lease with Malmö University at Amphitrite in Malmö. Amphitrite is the name of the goddess of the sea. The building will be located right between the central station, so it's the best possible location in Malmö. A bit above 20,000 sq m for Malmö University, and we won a competition a few years ago for developing this project together with the university and the municipality. Now the final agreement for construction and a 10-year lease is signed. Completion in Q4 2027 and procurement of contractor is ongoing. In Lund, we are building a new modern office right beside the central station, Posthornet Phase 2, 10,100 sq m, completion Q1 2026, approximately 40% pre-let and yield on cost 6.5%. At Vätet 1, also in Lund, we will refurbish and add on areas or our new tenant Arm.
5,700 sq m and a seven-year lease, investment SEK 145 million, excluding value of the land and yield on cost a bit over 10% and over 6.6% yield on cost, including ingoing property value. A new modern facility, and we also improve the impression and the attractiveness of the whole ideal area. In Malmö and Hyllie, we have Blekhornet 1, Vista, SEK 884 million investment. The mobility has already been completed and has a good occupancy. The offices will be completed end 2025 and during 2026. Yield on cost 6.2% and 25% pre-let for the office part. A bit lower than we aim for, but the product is the best with great flexibility and the competition from new build in the area is low. An example of this is an almost iconic building right beside the train station, 6,000 sq m restaurant and absolute Malmö perspective. Completion and continue during 2026.
For University of. And invest 100% pre-let and yield on. Eight years lease, completion in Q2. Have been able to continue. This project is for BPC, completion Q2 2026 and investment 79,3600 sq m and yield on cost 7%. Next to that, at Stora Råby 32:22, 11,900 sq m for NOTE, completion in Q3 2026, investment SEK 263 million and yield on cost also here is 7%. At Galoppen in Malmö, we build a facility for Caldic, completion in Q3 2025, approximately 10,000 sq m production, logistic and office. Total investment SEK 264 million and yield on cost 7%. At Sunnanå 12:54 , we build 17,000 sq m logistic, 100% pre-let, a 15-year lease with completion in Q4 2025. SEK 280 million invest and yield on cost improved close to 7%. In Copenhagen, we invest in a new school for NGG, 25 years lease, 11,600 sq m and investment DKK 290 million.
Completion is expected at end 2025. At [audio distortion] we tossed up the refurbishment for. Continues 62,000 sq m. Our investment is limited to SEK 423 million and completion is expected in Q4 2025, but Novo pays rent also during the refurbishment period. That was some of the ongoing projects. Let's also mention something about future investment. Here we have four possible projects in Lund and Helsingborg. We can develop some 70,000 sq m in the future. Zoning plans are approved first and on Västerbro in Lund. Here is some of the office possibilities in Malmö in the area of. Continues to have high attention, of course. Our summary of Q1 again. Rental income SEK 1,045 million, income from property management up 9% to SEK 463 million, net letting positive with SEK 35 million and continued high activity. EBITDA at 10 times.
The acquisition of SEK 2.4 billion from Granitor will be completed now on 1st of April. Good quality and good location continues to be attractive, and we continue with our project investment with good results. By that, we are open for questions.
If you wish to ask a question, please dial pound key five. To ask your question, please dial pound key six on your telephone keypad. The next question comes from John Vuong from Van Lanschot Kempen.
Please go ahead. Hi, good morning, team. Thank you for taking my questions. You mentioned that occupancy is set to improve over 2020 end and well into 2026. What's a more normalized occupancy rate in your view once all these lag between terminations and movements settles?
I think if you look at the long-term development and looking at our whole portfolio, which now excluding projects and land, which now is at 90%, I mean, long-term being at 92% is probably close to the long-term average. 93% is good, 94% is rare. We're a touch below where we would like to be. I see good potential for improving the occupancy end 2025 and during 2026.
Let's also keep in mind that as long as the rents are continuing picking up, that's, I mean, the demand is there for and our tenants are willing to pay for good quality and good location. If we have some vacancy for some,
okay, that's clear. Would 92% be a reasonable number for 2026?
It depends on many things. I think it's a, but also cost.
We buy vacancy because we want to develop things over time. We develop vacancy. Isn't the only thing that points the possible for growth. The net letting side, you mentioned high activity. Is that both on the positive and the negative side, or how should we read this? Maybe also on the, how long can you, feasible target. I think that at the moment, we know that we would have a large termination now in Q1 from SGU. Now when we have that, I think number of long-term is lower. We see good new leases. The interest, but it's out to these numbers. I mean, sometimes it takes years before you are very important for our business as a whole. The answer to your question, how many quarters in a row, what do you say?
It would be excellent to have this type of track record if properties with vacancies gradually can fill up. Our ambition or our strategy on continuing to grow remains. I mean, as you know, as portfolio, we continue to develop new properties. Occasionally we acquire properties. From that, obviously aim to continue this trend as long as possible.
I have mentioned this before, but the most important thing with net letting on a yearly basis is actually for our own organization so that we have the tempo and the, I mean, the awareness that it's very important for us. For the total business, looking at a longer period should be more relevant maybe. For us, we like the net letting measurement quarterly because it's, I mean, we like the tempo.
Okay, clear. Thank you.
The next question comes from Keivan Shirvanpour from SEB.
Please go ahead.
Okay, thank you. It's rather Lars Norrby here from SEB. The line was provided by a colleague of mine, so thank you for that. Some details on the SOG termination. Those were, in fact, weren't those four different contracts? Were all those terminated as expected? What was the value of that?
I think the total value was 31 or 34.
32, I believe.
32. Yes, the termination came in as we expected. They had the possibility to add on some areas, but that is not definite yet. I think they will stay with the hub in Malmö as well.
Just so I understand it correctly, that was the effect, but are they going to stay for a while on some areas, or did I catch that wrong way?
All these leases, they will move in early 2026 something.
I think that they will stay with one hub in Malmö as well. The largest portion of employees will move to Lund.
Okay, good. Malmö University, in that press release that you put out, I think you mentioned a basic rent of some SEK 69 million. What about that other lease that was signed in early April in Denmark with, if I pronounce it correct, Per Aarsleff? What's the basic rent of that one?
Per Aarsleff. That is not included in the report numbers because that was signed in April. Remember that. The rest of the volume in signed leases for Q1 is without Per Aarsleff.
Absolutely. What's the basic rent of the Aarsleff, the 24,000 sq m in Denmark?
Let's see if I can find it here. I think I will.
In Swedish kronor, it's just above SEK 30 million.
Okay, thank you.
Just a final question, quick one on transactions. You obviously made a big transaction, that portfolio of some SEK 2.4 billion coming on board on 1st of April. Are you done for 2025, or what do you expect for the rest of the year?
You never know on transactions.
No, you never know. We continue to look at different kinds of interesting things. Let's be open-minded.
Thank you.
The next question comes from Markus Henriksson from ABG Sundal Collier. Please go ahead.
Thank you. Good morning. First, the question on you have your table with Rental Inc. as of 1st of April, the one excluding projects. It's at SEK 4,050 million, and it declined 1.3% Q1Q. Your pencil rate declined 30 basis points Q1Q. The question is, is this all FX-driven or also driven by renegotiations?
I mean, you have quite a large—I do not have the exact number in my head, but you have quite a large FX effect in this table. Because the Swedish krona to the Danish krone was, I believe, 1.54 at the end of December and 1.45 at the end of March. That makes out the bulk of—I mean, if you look at the Copenhagen portfolio in this table, you will see quite large differences driven by FX.
Yes, I see a decline there. It is not driven by renegotiations, mainly FX.
No. Clear. Clear.
A follow-up on the Per Aarsleff. Just curious on the whole project. It used to be leased out, as you mentioned, to Danske Bank, and the rent was SEK 29 million back then.
You rented out to Bygningsstyrelsen, and now Per Aarsleff, and you mentioned a rent of around SEK 30 million or just above SEK 30 million. My, of course, DKK 29 million. What type of total refurbishments will you do for the remaining parts? You have around 36,000 sq m leased out now. How can you see such a huge lift? What type of investments are you doing there since the rent per sq m used to be very low?
I think that this moment we're in today, when that area has really developed well and the attractiveness has raised, we started this project late 2024, early 2025, aiming for—made it to a multi-tenant building. This is just one of the buildings that Danske Bank left. Sometimes, after a few months in that project, Per Aarsleff decided to be interested. Area.
I think the rest of the—approximately the same. You just have to do tempo. We get a good yield on cost for the refurbishment cost we put in there. I'll be happy with that also for the rest of the property. At the same time, we are working further with the possibility to give a higher density to the area as a whole with more building opportunities at the land that we own. That thing also has to go in the tempo that fits the municipality and the surroundings, of course. We have had help from the Letbanen with a new station just inside. Things are moving. When investments come to an area, things happen there. I don't have any prognosis on timing effect for the last buildings there, but good interest.
Thank you for the color.
Was just very interested in fairly good development there. On SEK 68 million here in Q1, that's a very high level for a Q1 in a historical perspective. Can you usually share guidance for 2025? Should we expect similar seasonal patterns as historically? Any help?
In Q1 or Q4, that is not—I mean, it's more in the tempo in the process on the ongoing project. So I expect the volume to continue approximately at this level.
All right. Thank you for that. What is the latest news from the Danish mortgage system and the bond market for Wihlborgs?
Of those markets. I'd say that the market is favorable. The banks are willing to lend, and margins six months ago is a bit tighter, a bit lower bank margins than six months ago. The Danish mortgage system continues to work in a six-month period.
One margin was touched upon in my presentation. I think it—I mean, one margin happens somewhere else in the world, and suddenly everybody gets worried, and spreads go wider. Generally, the bond market versus a year ago, of course, works a lot better and is also a financing option for us the way markets work today.
For the Danish system, that was similar as for the banks?
I mean, the system works well.
Okay. Okay. Last question. You highlight the increased vacancies you're seeing in the country. Six months ago, you used to be above 90% on both offices and logistics. First, what has happened? What is the current status? Are you initiating any type of measures, more personnel for leasing, or is competition just high because of new construction? What's going on, and what's your type of measures?
I think on the logistics side, the competition is high because of new constructions. We have been able to increase the quality of some properties, as we did for Nederman, for example. Very good investment. I think that we will see more of that transform areas into a higher level of quality and suit different kinds of businesses in that. We also see transforming parts of the portfolio, areas that will be something else in the more house-informed industrial areas. We can just keep that going for a couple of more years until that development can start. It is a bit of this and that. The Berga area continues to be very good and continues to work both with fittings for new tenants in the spaces we have today.
Regarding vacancies in the office portfolio in Helsingborg, some affected that.
We have also been affected consciously by acquiring a few years back the Hermes property, which is a large property where we have some vacancies which we're working with. At the same time, we're confident that we are the right owners of such a property and that we, over time, can develop that for the benefit both of ourselves and the market as a whole.
We have been quite successful filling that Hermes up with new tenants. Kia have moved out from. I think that it's working well.
Okay. Just a quick follow-up there. If I get this correctly, if we split it up in kind of structural problem with demand versus that we have been and are in a recession, we see different. Either supply-driven or demand-driven, and then maybe you have a structural tilt towards the demand as well.
Is that something you experience in Helsingborg, or is it mainly in accordance with particular?
I think in a very small local perspective, some properties could be in more of a maybe you could call that a structural problem when you're taking an area into a new development phase. Otherwise, I think if you look at the whole city, it's a part of a normal transforming. Of course, if you look into the total needs of especially storage, Helsingborg will continue to be attractive. No end to that. There has also been a quite large volume added to the market, and maybe the time for picking that up takes some time.
Thank you for that. Those were my questions. Thank you.
Thank you.
The next question comes from Fredric Cyon from Carnegie. Please go ahead.
Good morning, Ulrika. I'm Arvid.
I only have two questions for you this morning. Starting off with the Granitor acquisition, will that in any meaningful way impact your average cost of debt, i.e., the new loans, will that be done at higher or lower than the 3.45 that you have at the end of the quarter?
It will not impact the average cost of debt materially.
In any direction.
In any direction.
That's clear. Okay. The second question relates to income from JVs. It was fairly high for being a Q1. Were there any impacts from property revaluations in the quarter?
No. It was slightly higher profits in one of our JVs. I mean, it's not a huge amount, I would claim.
I agree. That's all from me. Thank you.
There are no more questions at this time. I hand the conference back to the speakers for any closing comments.
Thank you for our questions and your attention. Do we have any written questions in any form?
No. I have not received anything via email.
Good. I just got a message that there was some problem with the sound. The version that will be presented on the website afterwards will be corrected with good sound. Sorry for that. Thank you for your attention and wish you a continuously sunny day.
Thank you very much.