Report 2025. Another year comes to an end, and we can conclude that despite limited support from the economic climate, and with the rental market that has remained a bit slow and cautious, we have once again delivered growth across almost all key metrics. Vacancy has also increased slightly, but we have higher rental values, higher rental income, higher operating surplus, higher income from property management, and property values have all strengthened once again. This marks 20 consecutive years of growth, a track record we are fully committed to continuing, and I claim that our region has never been more positively perceived than it is today, which makes me generally excited about the years to come. Let's go to our report. We start with a summary of the last quarter, October to December. Rental income up 5%, a new record at SEK 1,111 million.
Income from property management +23%, and excluding revaluation from joint venture +8%. Net letting positive at SEK 12 million. Net debt to EBITDA at 10.4x. We have good access to financing, and as I said many times before, but this still stands, demands remains for good quality and good locations, and our tenants are willing to pay for that. We are proud to be able to continue with our project investment that gives continued good potential for growth. The board proposes a dividend of 3.30 SEK per share. Looking at the full year 2025, rental income up to SEK 4,354 million +4%.
The operating surplus increased also with 4% to SEK 3,107 million, and income from property management increased by 14% to SEK 2,038 million, or 11%, excluding joint venture revaluations. The result for the period amounts to SEK 2,220 million, corresponding to 7.22 SEK per share, and EPRA NRV has increased by 10% to 99.36 SEK per share, adjusted for paid dividend. A comparison of the rental income, full year 2025 and 2024. Indexation gives +41 million, acquisition, +132 million, currency effect, -33 million, additional charges, +37, and completed projects, new leases, and renegotiation, +3 million.
Here is included higher vacancy, as well as higher property tax of approximately SEK 20 million, plus SEK 53 million from new projects, and plus SEK 20 million from new leases in the existing portfolio. The net letting is positive again, plus SEK 12 million in the quarter, plus SEK 77 million for the full year, and in total, new leases at a yearly value of SEK 399 million signed for the year. For the last quarter, the volume of new leases of SEK 92 million is good, and a large amount have lease commencement during first half of 2026 or in the fall for Skrovet 6 in Malmö. 43 quarters in a row with positive net letting, but let's not take anything for granted.
A quarter is a short period, but looking over time, I'm very proud of how we have found good opportunities over the past years. Here are some of the tenants that we have signed during Q4. A combination of headquarters, defense development, industrial and governmental tenants, as examples. New tenants, expanding tenants, but also Ericsson, with no change in areas, and thereby not included in the net letting, but still very important for us. Six additional years, a bit higher rent, and a small investment for improvements in the property, approximately SEK 1,650 per square meter. Here we have the net letting in a historical perspective. Lettings in green, terminations in light blue, and dark blue stacks are the net letting. We don't win every lease opportunity, which is annoying, but we think the hit rate is quite okay.
The list, our 10 largest tenants in alphabetic order, strong customers, and they contribute with 20% of our rental income. Seven out of 10 are governmental tenants, and the public sector contributes with 22% of total rental income. Rental value as of January 1, 2026 is SEK 4.99 billion per year, +7.4%, and rental income, SEK 4.405 billion, +6%. Strong figures, and this is an effect from acquisitions, indexations, investments, and tenants willing to pay for the right quality. Looking at like-for-like figures, all the properties we owned a year ago, excluding projects, compared with updated figures, we can see that rental value is up 2% and rental income is up 0.8%.
It's good with the growth, also in the like-for-like stock, but to get the growth we aim for, acquisitions and investments will continue to be important, especially in times of higher vacancy. The growth in rental value is supported by indexation of 0.9% in Sweden and approximately 2% in Denmark, taking effect this year. Changes in market value of our properties. We started the year with SEK 59 billion, 168 million, in accordance with the external valuation of 100% of our portfolio. We have made acquisitions, which add on SEK 2 billion, 604 million, investment, SEK 2 billion, 738 million, divestment, minus SEK 156 million. Changes in valuation-...
+859 million, and together with currency translations of -SEK 799 million, that summarized to a value of SEK 64.44 billion. Our external appraisers, one in Sweden and one in Denmark, they value 100% of the portfolio as of year-end. No cherry-picking. A bit higher valuation yields for Swedish offices market and a touch lower for industrial. The growth come mainly from investments and new leases. Here's the long-term trend for our portfolio growth, from SEK 7 billion to SEK 64 billion in 20 years, and growth every year, without taking in any new equity from our shareholders. These figures shows the running yield, and it shows how we actually perform in relation to the valuation, so not valuation yield.
For the whole portfolio, the occupancy rate is 90%, excluding project and land, and with an operating surplus of SEK 3.304 billion, that gives a running yield of 5.5%. In the project volume, now Bläckhornet is included, with a quite high volume of new areas, but not completed yet. Fully let, the portfolio would give a running yield of 6.3%. Good earnings capacity in relation to the value of the portfolio, and good cash flow generation is the foundation also ahead. Compared to a year ago, the occupancy rate is down 0.3 percentage point, but we see areas which have improved, offices in Helsingborg, for example, and everything points in the direction that rental income will improve further during the year.
In the office portfolio, the market value is SEK 50.401 billion, with an occupancy rate of 91%. 91% in Malmö, improved to 90% in Helsingborg, 90% in Lund, and 91% in Copenhagen. The operating surplus from offices summarized to SEK 2.731 billion, and running yield of 5.4%, 6.2% fully let. The demand for logistic and production continues to be good. In Malmö, especially, with an occupancy of 94% for us, lower occupancy in Helsingborg at 83%, 91% in Lund, with a small portfolio, and 96% in Copenhagen. 86% occupancy rate as a whole, with a running yield of 6.2%. A total value of SEK 9.181 billion.
As mentioned before, we continue to see harder competition in the third-party logistics segment, with quick changes in need, and that also means that occupancy can improve quickly, when market has new needs. As mentioned before, I assume that vacancy in the southern parts of Helsingborg will be a bit sticky, since the area will go through a makeover, and that will take a number of years. But once again, let's remember that even if the vacancy is high, the running yield of 6.3% is decent, especially in location, where the market as such continues to be interesting. The development of our total portfolio's running yield, 5.5%, brings stability, not least since the portfolio overall has a high quality and good location. As noticed before, a good increase of the running yield since 2021.
Some follow-up on the sustainability metrics. This is some of our overall goals for 2025. We managed to reach over 90% certification in the office portfolio in Sweden, a bit ahead, and we have continued with the rest of the portfolio. Evaluation of suppliers have not reached the 100% goal, since there are always a few on the way in, but we will continue to improve. Carbon dioxide emissions from Scope 1 and 2, now at 0.933 kg/sq m, and energy use, 76 kWh/sq m, below the target of 85. New goals have been set for 2026 and forward. More on that topic in the next report. But also some sustainability highlights from Q4 2025.
Our project at Vätet 1 in Lund for our tenant, ARM, is the first project to be certified according to an updated manual, Miljöbyggnad 4.0 renovation, and reached the highest level gold. Let's remember that every upgrade of the manual makes it more difficult to be certified. The demands increase for every update. In Malmö, we have installed charging infrastructure for heavy-duty traffic for one of our tenants, and we continue with our energy efficiency improvements. Yes, you can find the Janus solution among them. So minus 50% at energy use at Syre 3, minus 27% at Cylindern in Helsingborg, and minus 10% at Kranen 8 in Malmö, as examples. A catalog of our value and properties in our four cities: 39% of the value in Malmö, 23% in Helsingborg, 17% in Lund, and 21% in Copenhagen.
The region, and especially these four cities, continue to be of high interest for future growth, both regarding population growth, which will be a challenge in many places, and regarding the number of workplaces, which is important for us. Supported by Danish infrastructure and a young and well-educated population in Sweden. Time for financials. Over to you, Arvid.
Thank you very much, Ulrika, and good morning, everyone. Looking at the Q4 income statement. As Ulrika mentioned, rental income during the quarter amounted to SEK 1,111 million, up 5%, and actually a record figure for a single quarter when it comes to rental income. Operating surplus was up 3% to SEK 773 million, and income from property management was actually also a record for a single quarter at SEK 556 million. However, as Ulrika mentioned, that number was affected by a positive revaluation within one of our JVs of SEK 68 million. So, the growth of 23% in income from property management, excluding the JV revaluation, was +8%, which, in my opinion, is also actually quite a good figure.
We had positive value changes in the quarter of SEK 444 million, and in total, a profit for the period of SEK 850 million. On the next slide, you have the balance sheet as of year-end 2025. Property value of SEK 64.4 billion, up SEK 5.2 billion versus 12 months previously. Equity stood at SEK 24.3 billion, up SEK 1.2 billion versus the year previously, despite paying almost SEK 1 billion in dividend during 2025. And borrowings increased by SEK 3.2 billion to SEK 33.2 billion in total.
Looking at some key figures relating to the balance sheets and the PNL, the equity assets ratio stands at 36.9%, slightly down versus the previous year, and the LTV stands at 51.6%. I think you should bear in mind, though, looking at those two numbers, that during 2025, we invested more than we have ever done in projects, SEK 2.7 billion. And we also actually concluded the largest single acquisition that we've ever done with a property value of SEK 2.4 billion. That is, of course, a way for us to continue to build for growth. Bearing that in mind, we are quite comfortable with those financial metrics.
We're also happy to see that the interest cover ratio is now gradually strengthening and stands at a good 2.9 times. The EPRA NRV as of year-end is at 99.36 SEK per share, up 10%, adjusted for the paid dividend during the year. The historic development of the EPRA NRV, you can see on this slide. And in the long-term perspective, since 2009, the annual average growth in EPRA NRV actually is at 15%, adjusted for paid dividends. On the next slide, you can see the long-term developments of the financial metrics, equity ratio, LTV, as well as interest cover ratio. And as I stated before, in relation to the targets we've set for ourselves, we are at comfortable levels.
And particularly, I would like to stress that the Interest Cover Ratio is improving, and at 2.9 times, that is a good reflection of our ability to generate a good cash flow. On the next slide, the earnings relative to borrowings or net debt to EBITDA now stands at 10.4 times. We are comfortable with the ratio. It has gone up slightly during the year, basically due to, as I've stated before, high investments and debt financing of the acquisition made during 2025. On the next slide, you can see the sources of financing. Total borrowings of SEK 33.2 billion. Half of it comes from bilateral bank agreements with Nordic banks, 33% from the Danish real mortgage system, and 17% from the bond market.
Excuse me. Nordic banks are still very much willing to lend, and the terms are probably unchanged over the past few months, but access to financing from the banking system, I would say, is good. The bond market is also both active and attractive. We have over the past few weeks issued a 3-year bond under our own MTN program at a margin of 98 basis points, and a 4-year bond at a margin of 117 basis points. And for us, those are competitive levels. Looking at the structure of our loan portfolio, you can see the details on this slide. The average interest rate stands at 3.25%. That becomes 3.29% if you include costs for unutilized credit facilities.
With the STIBOR at basically 2.0, and a margin of an average margin in our loan portfolio of a touch above 100 basis points, you can see that the loan portfolio is pretty much we're paying what the current market rates actually is or pretty close to it. We have an average fixed interest period of 2.7 years, an average loan maturity of 4.7 years in the loan portfolio as of year-end 2025. On the next slide, you can see the historic development over the past five years of the fixed interest period, and the loan maturity, and there are no dramatic changes in the development of those numbers over the past few quarters.
Lastly, on the number crunching slides, we can look at available funds, that is unutilized credit facilities, plus liquid funds as of year-end, which stands at SEK 3.2 billion. That gives us a good flexibility to seize potential opportunities in the market. You can also put it into perspective; the SEK 3.2 billion is that we have bond maturities in Q1 of approximately SEK 1.2 billion, but we've also issued bonds amounting to approximately SEK 1 billion since year-end. So with that, I'll hand the word back to you, Ulrika.
Thank you, and I'll give you an update on our investments and progress and a quick overview of our largest project. During 2025, we have invested SEK 2,738 million. It's still a record. And it remains SEK 2,144 million to invest in approved projects. Highest investment level ever in our history, and this makes us prepared for coming years. A reasonable yield on cost with 6% or a bit above 6% for new build offices and 7% or a bit above that for industrial, and a good mix of refurbishment and new build in the portfolio. In Copenhagen, we're about to complete our project at Industriholmen 41 for Per Aarsleff.
In the beginning, we planned this project for a multi-tenant transformation, but with a 15-year lease with Per Aarsleff, it has been turned into a single-tenant building. 24,000 square meters investment, SEK 231 million, and a yield on cost a bit above 6%. Completion now in Q1 2026. The large project at Amfitrite 1 in Malmö for Malmö University is running well in accordance with plans. A bit above 20,000 square meters for Malmö University in a 10-year lease. Investment, SEK 1.13 billion, and completion is planned to late Q4 2027. In Malmö and Hyllie, we continue with Bläckhornet 1, Ystad. SEK 884 million investment. The mobility hub has already been completed since a year ago, and the offices will be completed from now and during 2026.
Yield on cost 6.2% and approximately 40% pre-let. The attractiveness of the product shows clearly now when tenants are starting to move in, and we work hard at the coming leases. From first of January, the total areas in the building are included in Malmö offices are classified as projects, since the areas are not ready for moving in yet. Still too much raw concrete, but completion is ongoing. Last Friday, we opened Börshuset in Malmö after the large refurbishment. It's an almost iconic building right beside the train station. 6,000 square meters offices, restaurant, and coworking, and top rents in a Malmö perspective. Completion now in Q1 2026, and moving in will continue during 2026. Pre-let 95%. At Kranen 7 in Malmö, we will invest approximately SEK 136 million in a preschool for the municipality.
2,900 square meters, zoning plan approved, and completion is expected to Q3 2027. Public procurement act for the contractor is ongoing. At Skrovet 6 in Malmö, we refurbish 11,000 square meters, 50% pre-let to Cloetta and Media Evolution, with completion start in Q3 2026. So a quick refurbishment. Investment, SEK 149 million for a total technical shift in the building and a quick change from the quite closed building, which were the result from the Saab, the former tenant, and now open up to be a new entrance to the whole Dockan area. In Lund, we're building a new modern offices, office, right beside the central station, Posthornet 1, phase two. 10,100 square meters, yield on cost, 6.5%, and completion starts in Q2 2026.
Pre-let, 70%, a very successful project. In the southern parts of Lund, we continue the development of Tomaten. This project is for Inpac. Completion Q2 2026, and investment, SEK 79 million. 3,600 square meters, and the yield on cost, 7%. And next to that, at former Stora Råby 32:22 , now named as Sulkappen 1. We have been able to improve since the project started. Tenants will be both NOTE AB and Lund University, so well-used land area and long leases. In total, 14,500 square meters. Completion in Q2 and Q4 2026. Investment, SEK 260 million, and yield on cost, 9.2%. In Hørsholm, Copenhagen, we have invested for a new school for NGG. 25-year lease, 11,600 square meters, and investment SEK 390 million.
Completion now in January, and at Ravnsbjerg in Hillerød, the refurbishment for Novo continues. 62,000 square meters, our investment is limited to SEK 423 million, and completion is expected now in Q1 2026, but Novo pays rent also during refurbishment period. That was some of the ongoing project and just a touch of possible future projects. Here are four possible projects in the Nyhamnen area in Malmö. We own the land for Kranen 15, Slakthuset, and Polstjärnan 1 and 2. Zoning plan are ongoing, and we actually see some progress. Some more possibilities in Malmö, both the industrial at Spännbocken, for example, housing at Kranen 5, and offices at Nabolandet. Zoning plan approved for Spännbocken and Nabolandet. In Lund, we continue the work in southern part at Hasslanda, where we bought Brysselkålen 25. We bought it 2025 from Granitor.
Approximately 50,000 square meters gross floor area, and at the Ideon area, we can continue with project, both at the Ideontorget and Delta 2, and we also have more building rights at the eastern side of the highway. At Västerbro, in the western part of Lund, it will be mostly housing, and one way for us is to use these building rights as a trade for other possibilities. And in Helsingborg, we can add on areas for offices at Polisen and several industrial and logistic possibilities, both as fill-in and standalone projects. It's very important for us to be ready for different kind of times and tenants, and I think we have very good opportunities. So let's summarize Q4 once again. Rental income, up 5%. Income from property management, +23%, and excluding revaluation from joint venture, +8%.
Net letting positive at SEK 12 million. Net debt to EBITDA at 10.4x, so we see continuously good access to financing, and the board proposes a dividend of SEK 3.30 per share. And it goes without saying, we will continue with our focus on cash earnings and our future growth. With that, we are open for questions.
If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Erik Granström from DNB Carnegie. Please go ahead.
Thank you, and good morning, Ulrika and Arvid. I had a few questions following the report. I'm wondering if you could perhaps talk a little bit about your outlook for the rental market in 2026, how it's started so far, and where do you see vacancy rates moving, given what you know in terms of project completions and so on?
Hello, Eric. I think, yeah, the year started quite slow. January was not too exciting. But after that, things have started moving on, and good discussions are ongoing. And we have quite strong rental income growth from already signed leases coming in during 2026. So I think, yeah, there's quite many positive signals ahead. But it took some weeks in the early year before things started to move along. I said many times before, high quality is in everybody's focus, and we have that in our portfolio, so confident about the future, but a little help from economic growth, of course, looking forward to see that. Would you complete it?
Yeah, no, I just want to comment also on that tenants are willing to pay for quality and location. And it is, it's not a new trend in this quarter. We've seen it over the past few years. But we continue to see that there is a willingness to pay for good location and good quality in the premises. And you can see that also in that the top market rents in our markets are increasing. Not dramatically, but a little bit.
Okay, and given the project completions that you have now in the first half of 2026, do you think that those will improve the overall vacancy or vice versa? I'm thinking about the fact that Bläckhornet will be completed in Q2, and then carries a little bit higher vacancy than the rest of the project portfolio to be completed.
Yeah. So from now, from this report, Bläckhornet is, the areas are included in the project volume, so they are completed into a very raw standard. So that can, of course, affect the figures, but the rental income will continue to increase. And you never know what happens ahead. I mean, our main focus is to have a good growth in the cash flow. And of course, I'm very happy of how we have been able to be quick on the changes for Skrovet 6, for example.
We will have 10 months of vacant 100%, but after that, we have signed leases, and they move in from 50%, so 10 months for total refurbishment, and we have done this kind of quite quick shift in quite high volumes the last years. So that is a good, good thing. And I also think that Bläckhornet now, when the moving in have started, and you can see the quality in the areas, that will continue to help the new leases coming place in that area as well.
But I think if I may add something, looking at occupancy, Q4 versus Q3, it was down by, I think it was 0.2%, so if we go into decimals. So a slight decrease, but nothing dramatic. Given our projects being completed and given the rental agreements that we've signed, it's fair to assume that that will have a positive effect on occupancy during the coming few quarters. On the negative side, you have when Bläckhornet is completed, that is... There's still too high vacancy for our liking in that property, of course.
But exactly the timing of those effects over the coming few quarters is a bit tricky to say. But I think that the net effect should not be significant, but we see a potential for a slight improvement in the occupancy rate.
Okay, thank you. And then perhaps switching over to investment opportunities for 2026. You mentioned, and we can see that in the numbers, SEK 2.7 billion invested in projects and the portfolio. What's your outlook for 2026? Because if I look at what's left to be invested in your project portfolio, it stands at around SEK 2 billion now, and it was about SEK 3 billion a year ago. So I was just wondering what, how you view the pace in terms of investments, and the amount for 2026. If you can give us some color on what you're planning.
2026 will not be a new record year. It is my estimate, but we will continue with a good pace, also during 2026. I can't give a exact figure, but around, not as high as 2025. But of course, we are always looking for new investment possibilities and exactly when the timing is right for that. We have the portfolio, so that's good. I think we have good preparation, both for offices and industrial, not least. Lund is very interesting. Maybe we will see something more in Landskrona adding on to this, and also industrial in Malmö is interesting. So we have things going on for 2027 as well.
But, for the moment, the building for Amfitrite for Malmö University will be our largest project, of course. That will go on until end 2027.
Okay, thank you. And then my final question regards the property valuations in Q4 and for the full year. You mentioned that 100% is externally evaluated. Could you say something about what, in terms of CPI and indexation, what is assumed for 2027? The effect on 2026 is already known, but what's now assumed for 2027 and on, and also in terms of valuation yields, and I do know that you do not report that, but you mentioned some changes. But overall, what do you see any major shift in yield requirements in 2025 versus 2024?
We commented on slight changes in the valuation yields, and as usual, we will not give exact figures for the full portfolio with the same logic that we've had before, that it's one aspect out of many to be judged in combination of many different assumptions. Regarding the CPI assumptions in the valuations, for 2027 and onwards, the assumption is 2%. But again, I would like to stress that you cannot look at one or even two parameters alone in the assumptions in the property valuations. You have to look at all the variables in order to be able to make up your mind if something is reasonable or not.
We are comfortable that our external appraisers are doing a reasonable judgment when it comes to the balance between different parameters in the model.
Okay, thank you. Those were my questions.
The next question comes from Oscar Lindqvist from ABG Sundal Collier. Please go ahead.
Good morning. Yes, so, a couple of questions from, you mentioned on new lettings that you expect some contribution from Q2, Q3, this year. I was wondering on terminations, is there anything you can highlight here? Did you have any larger terminations on the—what could we expect in terms of impact in the coming quarters?
We have... I mean, the largest termination we had, Saab, as we have reported on, before, that was from now on, from first of January, this year. We have a few, terminations that starts, I think, first of January 2027, but they are quite-- I mean, for the total volume, it's, SEK 12 million and SEK 12 million, something like that. So not, not as large as, Saab, were. And, I mean, we also have a year to work with that, especially in the industrial portfolio. We have good potentials, to find new solutions for that. So not at any larger, extent, I would say.
Okay. I also believe that WSP has signed the lease with Vasakronan in Malmö. Has that termination come through in your numbers for this quarter, or is it
Yes
... expected in Q1, or can you say anything about that?
No, we have that message in December, so that is part of report for 2025. And they are one of the tenants that will move.
I believe that contract will be terminated in Q2 or something, so it's not the full-
Oh, okay.
They will not pay rent the full year 2026.
Okay, so a bit earlier then.
Mm-hmm.
Okay.
I think that would... That is one of-
And then,
The least.
Mm-hmm. Yes. And then on financials, you have SEK 2 billion in swaps maturing in 2026, average rate of 1.53. You say that, or you mentioned that you're currently paying around market terms. What sort of effect could we expect from swaps maturing and net of new financing?
Those swaps expiring in 2026, I would expect that we have... I mean, it will have a slight negative effect on the average interest rate for the group, but we actually, of those swaps, have examples of swaps being both in the money and out of the money. So, the effect, it's not that all those swaps are on extremely attractive levels, but it will have a slight negative effect on the average interest rate. And at the same time, we still have both bonds, and we have bank agreements, where the margin we're paying is slightly above where the market is currently.
So, I don't expect the net effect on the group's average interest cost to... the effect will not be very large.
Okay, thank you. That's all for me.
The next question comes from Lars Norrby from SEB. Please go ahead.
Okay, good morning. Talking about expansion and record CapEx in 2025, and as far as I understand it, you're not expecting the same kind of level in 2026, not fully SEK 2.7 billion. Now, how about acquisitions? I think you did some net SEK 2.5 billion in 2025. In 2026, what is-- what... Can you handle the same kind of volume with your existing balance sheet if something comes up? And are you, are you looking at something of any size at the moment?
If I start with the financial capacity, I think that, as I mentioned, our access to liquidity, we feel is good, and we're comfortable with the financial metrics of the LTV, the equity ratio, the net debt to EBITDA that we have. As stated before, if an attractive acquisition opportunity of a well, significantly large would come up, we have the tool or the mandate from the AGM to issue equity. We have never used that tool, and we've had it over all the years, but it is a tool in the toolbox for if the right opportunity would come up.
Without giving any prognosis about what will happen, I said many times before, we look into all kind of possibilities, both small, with which add-on things, piece by piece, but of course, also possibilities with larger portfolios. But it's really important that we think that we can add on some value to that. It has to be—I mean, I think it's good for us that we are a bit picky when we choose things. It should both be the right quality or possibilities and the right price, of course. So but, of course, we see possibilities. I mean, Copenhagen continue to be interesting, and also on the Swedish side, there is possibilities, so. But you can never say ahead.
If you're looking at Copenhagen, what type of properties and what kind of yield level are you looking at? Is it similar to what you have in the portfolio right now, meaning higher yields than in central Copenhagen?
Yes. We don't want to go too low on the earnings. Of course, they are important for us, but we think there is some possibilities in a bit of a better location than we are today, so that we can transform a bit, but still get a decent yield for us. So that is mostly the kind of thing that might be of interest to us.
Just, just to wrap it up from my side, for example, if Castellum would be willing to sell some of their properties in more central locations, you wouldn't be looking at them. Is that correct?
I don't think we will be the one that are prepared to pay the price that they are expecting.
Okay, thank you.
The next question comes from John Vuong from Van Lanschot Kempen. Please go ahead.
Hi, good morning. Thank you for taking my questions. You mentioned something about rental income growth for signed leases. Are you referring to capital reversion? And if so, what reversion potential are you seeing in your portfolio?
I think if you talk about, I mean, reversion potential, generally speaking, as has basically been the case over many years, the rents that we have in our rental contracts today are fairly close to where the market rents are. Our markets have rarely, if ever, seen any huge reversion potential, that is being able to sign or to renegotiate rents at completely different levels.
But when I mentioned higher rental income, I was pointing at leases that we have signed, but where tenants haven't moved in yet, but they will move in during the year. So that will give some extra income, of course.
Okay, that's clear. Thank you. And then just looking at your Malmö office portfolio, it seems that the vacancy has increased by 80 basis points over the quarter. Is this an issue of timing, given that leveling, or have new leases been skewed to other regions?
I would say that looking at Malmö offices in the quarter, I mean, that has, of course, been affected by Saab moving out as of this past year end. So there you would have... And that was actually four leases out of three were terminated, if I remember correctly. And that was actually a significant chunk. So the Malmö office occupancy effect would mainly be driven by Saab in this quarterly report.
We have also added on areas from Börshuset. So Börshuset, it's completed, but the tenants haven't moved in yet. They will continue to move in until August. That is vacant in the economic terms at the moment, but the tenants are eager to move in.
... Okay, and then on that, on the Saab leases, what's the percentage point impact on your occupancy? And maybe just looking at the number overall, is it skewed to any specific sub-market within Malmö or, say, building age?
No, I mean, nothing different from what we tried to communicate earlier, that there's still a good demand for good quality, good location. Predominantly, our office portfolio is good quality, good location, with only a few exceptions. So, there's no real change in that picture, I would say.
The decision from Saab to move to Lund to a new premises there was that they wanted to combine both all the offices area and their development area, which also is a part of industrial classification in that. So that was the reason why they moved to Lund, and we have seen very good effects from that in the Lund areas, affecting all the things we own at the area, not least. So for the region, that decision from Saab has been a boost, I think, actually.
And I'm also very satisfied with the solution that we have found with the Skrovet 6, where Saab had their largest leases before. So we have new tenants there from starting with first of September and adding on also from first of October with a totally refurbished property. So I think that solution will also be good for the Dockan area in Malmö. But of course, the timing for that, it gives us some vacancy at the moment.
Okay, that's clear. Thank you.
The next question comes from Eleanor Frew from Barclays. Please go ahead.
Good morning, team. A couple questions. One will be a slight follow-up. Do you calculate the net letting, excluding leases and new developments, or so just including the completed stock? And can you give some color on how you see that trending, if so?
I'll have to check that number because I don't have that number off the top of my head, the net letting excluding projects.
We have mentioned it before, but not the full year figure. But we have been positive in the net letting for the existing portfolio before. But let's check upon that because... And I don't see we have... Yes, we had some new leases in the new areas in Q4, but I... Let's come back to that.
Okay, great. Thanks very much. And then is there a reason there's a higher vacancy on Bläckhornet? It stands out a bit, given the pre-letting in your other projects. And more broadly, how is the momentum going in the pre-letting discussions?
Good discussions, high interest, but not in the pace that we are aiming for. I mean, it's the best product you can find, but the decisiveness must be there from our tenants. I think what we see in a bit of a cautious market is when you have a high volume with very good quality, you don't need to take the decision now. You can wait, because there's more to choose. You can choose, if not this level, so you can choose another level. So we don't really see the tempo in that yet, but patience is something you need.
Getting back to net lettings, excluding new developments, in Q4, it was still positive, also excluding leases and new developments. It would take a bit more time to look at the full year, but Q4 was still positive.
Okay, great. Thanks very much for that.
The next question comes from James Cattell, from Green Street. Please go ahead.
Good morning. Just had a question on the new, pro CapEx table on page 25, and thank you for including that. I noticed TI increased from SEK 499 million to SEK 802 million. Is this just a temporary increase due to a difficult letting market, or do you expect it to be the runway going forward?
Could you please repeat which figure you're relating to? It was page 25, right?
Sorry, it's... Can you hear me?
Yes.
Yes, yes.
Sorry. I think I'm having some difficulties with my line. Can you hear my question?
Well, I, you referred to a number on page 25 in the report, and I was just uncertain which number. So, if you could repeat that, then we'll see if we can answer.
On the EPRA CapEx table?
Yeah.
The number for tenant incentives-
Yes.
-increased from SEK 499 million to SEK 802 million.
Yeah.
Yeah, I was just wondering if this increase is the difficult letting market, or is this what the rate you expect to be going forward?
Well, to be frank, it's actually the first time that we've calculated this number according to the upper definition of capital expenditure. And we've spent some time together with the EPRA team, defining these different... Well, so the sub sums, meaning that, I'm actually a bit uncertain when it comes to how to project how the different parts of the sum will develop over time. So I'm not quite sure that I, off the top of my head, can answer your question about how that will develop going forward.
Okay, thank you. And do you have any idea of the split between rent freeze and capital contributions on that?
I mean, generally, you could say that our market is characterized by few tenant incentives and few and short rent-free periods. So I mean, we basically come from a market where tenant incentives have been very, very marginal. And...
Thank you.
So we don't expect that to develop in any dramatic way.
Okay, thanks. Do you have any guidance on what caused the increase in the joint venture property values in Q4 ?
Well, I mean, property valuations are what they are and always very tricky to predict. We would not expect that type of property valuation, property revaluations in our joint ventures will come on a regular basis. But property valuations are hard to predict.
Okay. Thanks very much.
There are no more questions at this time, so I hand the conference back to the speakers for any written questions and closing comments.
Thank you. So let's see. Do we have any written questions?
We have received no email questions or questions via email, as I can find.
Okay. But you're always welcome with further questions anytime. So by that, thank you for today, and have a nice day.
Thank you very much.