Earnings Call: Q3 2021

Oct 22, 2021

Welcome to the Wibblad's 1st Hyattar Audiocast with Teleconference Q3 2021. For the first part of this call, all participants will be in listen only mode. And afterwards, there will be a question and answer session. Today, I am pleased to present Ulrike Hallengern, CEO and Arvid Litte, CFO. I'll now hand the floor to our speakers. Please begin your meeting. Thank you. So welcome to The presentation of the Novo Nordisk 9 months report 2021, and we start with a summary. Since March, the activity is good and accelerating. We have good discussions and decisions are made. Being close to our customers pays off. We have signed leases for SEK 65 Swedish krona in 1,000,000 Swedish krona in Q3. And also this year, Q3 includes summer. So that's a good level. And it continues to be the sum of needs from a diversity of companies, which together represent our largest combined business opportunities. Rent levels continue to develop in a positive direction, A bit more flat in logistics, but when the quality is right, the rents go up. We see that both in reconfinations and in new leases. Most important of all, the tenants are ready to take Action. Not in all places. There is much more to be done. But our customers have changing needs and they take action. It seems like the main part of what you can call a moisture blanket is lifted from all of us. I wouldn't say that it has been a wet blanket because we have been able to do business also during the pandemic, but It has been a bit too moisty for our taste. We like actions. We have been able to sign several new leases with public tenants. This brings more stability. And of course, it also tightens our relationship with these tenants. Cash flow and earnings is our focus. And the strong cash flow also creates opportunities. We continue to start projects with when the timing and the location is right. And good access to capital continues to be the base from which we take off. We are ready for investment possibilities. Continue to Page 3 with a summary of the figures for the 9 month period 2021. Rental income is affected by our divestment in Malmo last December, but also from a one off compensation in Malmo last December, but also from a one off compensation from Danske Bank of SEK 64,000,000. As pointed out in Q2, activity also give us terminations. And terminations create opportunities and in some cases, some extra income. The income summarized to SEK 2.290 billion. The operating surplus to SEK 1.6 €158,000,000 and income from property management amounts to SEK 1,372,000,000. The net results amount to SEK 1,680,000,000, which corresponds to SEK 10.93 per share And EPRA NRV increased to SEK 159.68. Page 4. We have had a high level of new leases, SEK 65,000,000 in the quarter and SEK 207,000,000 for the period. One large determination at the end of the Industry 41 in Copenhagen of minus SEK 29,000,000 and that leaves us with a net letting of SEK 3,000,000 for Q3 and SEK 48,000,000 for the period. We have new leases of SEK 132,000 square meters And terminations of 143,000 square meters. So measured by square meters, the terminations are a bit larger. But we have plus SEK 48,000,000 in positive net letting. So the signals of increased rent levels are definitely there. The picture of this slide is from the city center in Lund. And we have signed new leases in Raffenander Desert That's new top levels in this location. But it's at Ibyon and the Grundshergs side village area alone that shows the largest Activities lately. Governmental tenants such as Verceknefklaasen and the Institute For Human Rights It's new at this site. And of even greater importance, the number of square meter per lease is up for this location. We have been waiting for this since we bought Neurvassa Thonet 2 to 4 a few years ago, convinced that if we do the right things with the area, the Demand is there. But even if we have been confident, it's still a special kind of joy when it's happening. Our strategy is working, and now it starts to pay off. We have more vacancy in the area. So I'm also convinced that we will be able to feel that joy many more times and for quite some time. The net letting in the historical perspective at Page 5, positive figures for the last 26 quarters, Letting in light blue and termination in dark. The black line is the net letting. The number of new leases, 111 during Q333, 183 during the period, It's strong as well as volume in new lending. Still no guarantee that we will never be below 0, but I see many positive signals in our organization. Page 6 And a list of our 10 largest tenants, the rental income for public tenants continues to be high, 24%, and we signed new leases in this sector, as mentioned. But I also as I say every quarter, it's a wide diversity across many In a region that is the strength that brings stability over time. Page 7, rental value It's SEK 3,322,000,000 per year and rental income SEK 2,000,000,000,000 after our divestment. And I expect a positive development going forward. And looking at like for like figures, we can see that rental value is up plus 1.4% and rental income up plus 2.1%, again beating our ambition to exceed index by at least 1 percentage point. The vacancy will improve further when our new tenants move in. Page 8. A summary of our office portfolio. The market value is €38,787,000,000 and overall the occupancy rate is 92%. In Malmo, it's 94%, 88% in Helsinki and Boris, 89% in loans and 93% in Copenhagen. And as I said, this figure will continue to improve when our new tenants move in, for example, in Ursula 1 and Hermes 10 in Helsingborg. The operating surplus from offices summarized to SEK 1,895,000,000 and a running yield at 4.9%. Page 9. The demand for logistic in production continues. And here, the occupancy is still very high in Malmo, 97%, improved to 91% in Helsinki and 93% occupancy rate as a whole. With a running yield at 6.4% and a total value of SEK 6,149,000,000. And demand continues to be strong throughout this sector in all our cities. For the entire property stock, also including projects and land, the total value is SEK 47,741,000,000. The occupancy rates, excluding projects and land, are 92% and operating surplus, SEK 2,290,000,000, which gives us a running yield of 5.1%, excluding project and land. Page 11. Changes in market value of our properties. We started the year with the SEK 46,720,000,000 in accordance with our external valuation, which once a year values 100% of the stock at the same time. We have made acquisitions for SEK182,000,000 invested SEK 755,000,000 Divested SEK 3,000,000, just a small piece of land at the Wersted in Lund. Changes in valuation of plus €591,000,000 half from leases and half from lower yields in some properties, for example, Harel and Metzen Helsinki and the Industrial segment, Together with current Swiss translation of SEK 144,000,000 that summarize the property value of SEK 47,000,000,741,000,000. Page 12. The value of the portfolio has developed, as you can see on this slide, since 2,005. And even if we still can see the effects from our industrial divestment last year, the overall value is moving up, But more to come, of course. And the catalog of our value and properties in our core cities at Page 13, 42% of the value is in Malmo, 23% in Lund, enhancing volumes, 17% in Lund and 18% in Copenhagen. These cities belongs to the same region, but they also have differences that contribute and interact With a hold. And especially in Sweden, we have noticed the rising number of discussions and leases the last 6 months, Perhaps a bit more hesitant in Copenhagen, Lund and Helsingborg have a pace that I really cannot remember ever seen before. The tap through companies working with the best engineers is growing in Lund. And now we also See interest of building an industrial cluster between larger companies for development and research from a common platform in Lund. And Oggske is the company that we signed the lease with in June so that we could start the project Space at Science Village. And what about the future? How are we any new signals about the future way of working? Page 15. Now we see people again. There is now queue outside the restaurants at lunch, And we have not liked them before, but now it's a joy to see people who meet wherever you look. People are coming back to the offices, but we also see different solutions for the way of working, of course. Flexibility is needed to meet the needs We see both from Tenens employees and when it comes to companies' future growth. I'm also convinced that Companies see a benefit in meeting employees. And when you want to attract people back to the workplace, that contributes to setting up higher demands for the workplace, more warm, welcoming, home like and design environments and of course, more space for meetings. Overall, higher demands and workplace in focus that creates opportunities for us. And over to Arvind for some more figures. Thank you very much, Ulrika, and good morning, everyone. Moving to Slide 17, looking at the income statement for Q3 isolated. You can see that the rental income amounted to SEK 813,000,000, up 5%, but that, as Ulrika mentioned, has of course been affected by the termination fee of SEK 64,000,000 accounted for in the quarter. Operating surplus amounted to SEK612 1,000,000 and income from property management SEK 5 13. In the quarter, we had positive value changes of just over SEK 300,000,000. We have positive change in value of derivatives of €34,000,000 And all in all, this amounted to a profit for the period of SEK673 1,000,000 Moving to Slide 18. You can see the bridge of the rental income for the 1st 9 months in 2020 and how that has evolved to the rental income 9 months 2021. The comparison has then been affected by minus €67,000,000 in divestments A minor effect of SEK 7,000,000 from COVID discounts. We've had a negative currency effect of SEK 17,000,000 And we have SEK 20,000,000 in lower service income. We also have SEK 58,000,000 more in vacancies in 2021. Then we've had a lease the lease termination payment of CHF 64,000,000 affecting the comparison positively. And we have had other increases in rental income from index and renegotiations, etcetera, amounting to SEK 58,000,000, arriving then at the rental income for the 9 month period of SEK 2,290,000,000. Moving to Slide 19, looking at the balance sheet. This is the balance sheet and Q3 compared to the same point in time 1 year previously. During this 12 month period, the property value has increased by SEK 700,000,000 approximately. And at the same time, loans have decreased by SEK 1,600,000,000 and equity has increased by SEK 1,600,000,000. So I think that in rather rough terms still shows that we've done something positive for our shareholders. Translating the balance sheet into key figures on Slide 20. You can see that the equity assets ratio now stands at 41.5% and the LTV at 48 point 2%. The interest cover ratio remains on a very strong level at 6.7 times. The EPRA NRV, as I believe you'll recall, also related to stands at SEK 159.68 versus 12 months previously, that is actually up 12% adjusted for the dividend paid during Q2. Moving to Slide 21, you can see the historic development since 2009 of EPRA NRV. And Notable, I think that the average annual growth in EPRA NRV has been 17% adjusted for dividend during this time period. The historic development of financial Ratios, you can find in graphic form on Slide 22, We see the historic development of the equity assets ratio, the loan to value and the interest to cover ratio. And looking at the equity assets ratio and the loan to value, and I believe that is actually true for the interest cover ratio also, The balance sheet key figures have actually never been stronger for us. Moving to Slide 23. Another important metric to illustrate financial stability is looking at net debt in relation to EBITDA. During the year, we have improved that ratio and brought it down slightly and it now stands at On Slide 24, you can see the Split of our sources of financing. A bit less than half of our financing comes from bilateral bank loans, 37% we financed via the Danish mortgage system and 17% Of the total debt portfolio of NOK 23,000,000,000 is financed via the bond market, both via our own MTN program and via SFF, Svernsk Fastihets Financiering. On Slide 25, You can see the details of our loan portfolio. The average interest rate It's 1.28%. It's actually 1.33%, including costs of on utilized credit facilities. The average fixed interest period is 3.1 years, which is fully in line with the financing policy that we have. And the average loan maturity stands at 6.4 years. The historic development of these two numbers, you can find on Slide 26. And not least, the average loan maturity at above 6 years It's a stable puts us in a stable financing position. Moving to Slide 27. You can see the historic development of available funds that is Unutilized credit facilities plus liquid funds at the end of each respective quarter. Available funds, we've brought them we've consciously brought them down slightly during Q3 As we basically see the whole economy moving out of The pandemic situation and thereby reducing the uncertainty in the economy overall. And as you are all aware, unutilized credit facilities also cost money. With that, I'll hand back the word to you, Ulrika. Thank you. So let's say a few words about sustainability. Page 29. We continue with certification of existing properties now at a higher speed. These are the properties that we have been certified during 2021, the 3 last one during Q3. And we reached silver level in all of them, which is certifying. We have been focusing for many years on investing in Sustainable new properties, of course, with a higher certification level, but also in improving things that we Mean really matters in the other stock, like reducing energy consumption in existing buildings. And that it will pace off now when we add on the administration for certifications. Page 30. We have also during 2021 invested in solar cells at 8 premises, In total, 1 megawatts. We have the 70 new electric charging stations in Helsingborg. But of Even more important, changing existing cooling systems into machines and gas with lower climate impact. By that, we have actually reduced the risk of emissions with 6.46 tonnes of carbon dioxide gases. And still, Scope 3 is, of course, our largest challenge by far. We are already carbon oxide neutral in our Swedish property management, whatever that means. But regarding the impact from new billings, it's hard to find the right way of action. Therefore, it's satisfying that Now we have one of the first projects in Sweden where we can meet the demands for 0 carbon dioxide in PULPETLAN 5, Cartetta, this building will achieve triple certifications and we it's especially satisfying, I would say, that We have reached this by working very hard, finding the right solutions, but also by investing in existing properties. That is a competitive advantage when we talk to our customers. So let's go to investments in progress, Page 32. We have during the 1st 9 months, 2021, invested SEK 755,000,000 in ongoing projects, And it remains SEK 1,333,000,000 to invest in already approved projects. We have projects ongoing over SEK 2,000,000,000. Overall, the projects continue according to plan in a good way. We are well protected, especially in the larger projects Against higher prices of materials, we see indications of a slowdown in price increase meant during this autumn. But Access to concrete is suddenly a topic, and I'm sure that we will see consequences as we speak. Laws and regulations Are actually changing. But overall, it might also come some good out of this. If all projects invest A bit more in engineering and calculation, less material will be needed, and we will save both money and climate. Problems will always come up, and we will solve them. Page 33. Let's do a quick review of our largest projects. Channel 2 is soon to be finished. In total, we invest NOK 237,000,000 for the left and strong leases for Regional Council of Skovane and Malmo University. Completion in Q4 2021. Page 34, Our largest investment ongoing SEK 696,000,000 kartestan Akselpietan in Hulian With 16,000 square meters lateral floor area, and it's now rising to the sky. Great efficiency, A warm inner core, the highest sustainable standard as mentioned, just the right products for the future office. We have signed the 1st leases with the Mainpark, a co working actor and Spill, a very popular restaurant with sustainability in focus. Extracting for coming tenants. Ongoing and intensifying discussions for approximately 80% of the area. So good detention for this project, which will be finished in Q2 2023. And we have no other vacancy in this area. Page 35, At Pivde Gordon 7, we are doing a project for the lead to back half atomization, a state of the art project Our office has a good transport location in Malmo, not the largest one, but a good product. Completion in Q3 'twenty two. Page 36. In Raffenander de le three in Lund, we continue with the conversion project. We have signed several leases and now at top levels in Lund over NOK 3,000 per square meter. Completion, a bit delayed to Q4 'twenty two. And I also think that the investment will go up a bit, but still with a yield on cost at approximately 6%. This investment will give us 5,800 5,800 square meters modern offices with this industrial touch besides the central station. And maybe of even more interest is that now we are convinced that the timing for next project next to this one, Postona Phase 2 is getting closer. Page 37. We have also decided to start project Hoegh Jahn S 13 in Helsinki Moor. It will be a facility for multi 10 months in logistics, and we'll build it in 2 phases. The first one will be completed in Q4 'twenty two. And Page 38, back to Lund, right beside and between the research facilities, Maxfor and ESS, We have now started this project space where Oakleigh will be the main tenant with the research and development team. They have options for the whole building, and we have more building rights beside this project. The food tech Sextor is interesting, also in Lund, and we will invest SEK 244,000,000. And what about future investments? Let's go to Page 40. Blackkonet 1 in Malvern, the project we call Vista. This might be our next larger project that we put in production. Procurement is ongoing, and we are planning for the possibility Start the first phase with 400 parking spaces and a great spot hub late 2021. In it's a unique opportunity To offer both good parking and direct access to the train station, and that includes both this project, Blackbore 1 and Ulpreeten 5. Page 41. Four possible projects in our 3 Swedish cities. Castrolijk 1 is just the side of the Albertshire. And that will provide the city center with larger areas than Dassault Vanderes, idiom Torien, Besides the tram station at the idian area, to listen 7 in Helsinki Boru and a bit of a redesign of Draughtligen 2015, where we now can offer up to 22,000 square meters gross floor area in logistics. On Page 42, a few other possibilities from the Industrial segment. The outscore 21 I see more interesting area for combination of office and logistics. We can both build and service here. Approximately 20,000 square meters. Girooz Target 1 also in Helsinki Moor, also here approximately 20,000 square meters. This is just 5 in Nafkrona, 14,000 square meters logistic with 20 meters up to the ceiling and right beside the highway. And in Sullanha Nua where we have built for the Regional Council of Skouane and Viadur, we can add on 17,000 square meters logistic oil production. Page 43, Of course, Nehalanden, which was the area for logistics in the old days, as now will be in the city center. This picture and this land area will follow us for many years. And at the moment, it's a challenge with future rising sea level that shows That slows down the process with the zoning planning, but this area will be built. Page 44, Smartagen. It's one of the zoning plants that we work with in the area in Lhamdan. And we will at least be able to produce 10000 to 13000 square meters offices in this first project. And Page 45, Keranen fifteen just at the entrance to the Dokken area from Llantern. Our application for planning permission It's still being proceed, but at least we might it's a possibility now that we get the Decision to start the planning process now in November, but let's see. And we will have an architectural competition in this project as well. Page 46, Nabolandri in Dokan, just a few 100 meters from Channel 15. Here, the planning permission is ready, and we can submit Building permit application whenever we think that the timing is right. That can give us 8,000 square meters. And Page 47, let's go to Denmark. It's Engvi in the Stryvei, 41, where Danske Bank has left the building. And it's a great land area, well worth developing into new use. The rents have been very low here, But it's a large area, very close to the new tram station, Lepton. And it's housing just beside this area, and we already have More building rights in this site. So we put this property in a process of urban development, and I expect value creation to come with a mix of living and working for this area. On Page 48, also Denmark in Harikare. It's another example of ongoing city development project with a mix of housing and offices. The offices are already built. But by increasing the density and combining offices with housing, This will be a more attractive area. We own Part B2S. In this picture, the zoning plan is expected to be approved in Q4 2021. And by that, let's summarize again. We see positive net lifting. Rent levels continue to develop, also positive. Tenants are ready for action. Several new leases from public sector, And we will continue to invest, focus on our earnings capacity and do so with continued stability. And by that, we are open for questions. Thank you. Our first question comes from the line of Markus Henriksen of ABG. Please go ahead. Your line is open. Good morning. A few questions from my side. Regarding the Danske Bank Termination, when do they leave their premises? They have left. All right. So did it hit the figures already in Q3? No. They paid rent for all of September. Okay. Perfect. So net leasing was SEK 3,000,000 here even with that large Termination. And you seem to talk about a very positive outlook. Do you believe that will result in A relatively strong net listing going forward as well, all else equal? I definitely think that the activity is high and we have Several good discussions. So I expect us to continue in a very positive way. But as mentioned, of course, no guarantees. But I feel that things are really working well. Okay. Thank you. There's never any guarantees, I guess. No. And of course, we'll continue to see terminations as well. But overall, it's definitely more positive things ongoing. Discounts around SEK 2,000,000 here in Q3. Net, what's your view going forward? Basically fading out. Okay. Thank you. And then extremely strong balance sheet, as you show in the presentation. What's your current view on non transactions? Should we expect you to be active? What do you currently see on the direct market in your submarkets? Active definitely on If the property is right for us, but we're Not the large portfolio figure at the moment, but definitely, I think that we will find Things that we can add on to our portfolio in a positive way. Okay. So you expect that this to be a net buyer in the next 12 months? Yes, definitely. I hope so. Okay. Last question regarding financing. You had around SEK 10,000,000,000 in debt maturing in Q2. Now it's down to SEK 6.9 Interest rate, 1.17. Could you walk us through what margins you expect or what you see at the moment in the financing market? We have interest maturities. Basically, the portion of our debts, which are not covered by interest rate swaps. Well, so I mean, for that portion, you should, of course, well, make your own guess of where STIBOR or how STIBOR will develop over the coming months. Regarding the margins that we pay On our bilateral bank loans, the latest renegotiations that we've done have meant decreasing margins. And you could say that on the bond market, And that is basically public information. You can also say that margins are in a historical perspective quite favorable at the moment. Perfect. Thank you. Those were my questions. Thank you. And our next question comes from the line of Jacob Just a Couple of follow ups then. Going to the Copenhagen premises there, I understand You will develop the whole site with new builds. But if we look at the actual buildings that then are available now, Are you thinking about doing adjustments on them before you go out to the market? Or are they available to rent out already? And I'm just trying to understand how quickly you can actually put them to the market. I think that one of the things we can do with this site is to do a city planning project, Totally changing of the area actually. It's the building today is Very much dark areas, underground and a very low building. So we need high density and a mixture of housing and workplaces for this area. It's an excellent large plot, but So it will be filled with more density. And I think that's the best thing to do with this. And of course, we have seen The really low price For this lease for a long time, it's of all the affected of the quality of the building. So of course, If something very special happens, we can rent it to someone. But I think it's better for us to do a city planning project. So just so I understand, then it would be the VINVAT vacancy will be any African projects and in your presentation. And then we I mean, it's like a 2, 3, 4 years before it's back on the market or just so I understand roughly? Yes. I would say that when we if we look at the timing in HOKA, the other projects I mentioned in Denmark, I think the city planning project has been quite quick actually, almost quicker than in Sweden. But it's also very hard to predict The timing of making new zoning plans and such, but expect 2 to 3 years at least. Yes. Okay, good. Thanks. And then on the market, how do you see interest for Looking at the new tenants coming in, interest for already established Premises that are already built versus the discussions on something that are about to be to develop that or further out. Do you see any difference in discussions there? No, not really. Of course, it's very much about the quality and the location and how flexible the areas is for each tenant. So I wouldn't say that We see any special and I also would say that we have very good premises With high quality. So therefore, we do new deals both in the elder stock and in new build. So but it's all about the quality and the location, of course. And also, as I mentioned, flexibility in the whole area. If we can provide possibility for tenants to grow with us For a shorter time than the lease agreement period, that's very positive. And that is one of the things that we try to offer them as much as possible. And then going to the project portfolio a little bit. You mentioned Post Toolnet 2, I think, and Black Toolnet 1 being close to getting them going, so to speak. If you look at those two projects, what is it and it might be different, but what is it lacking for you to go ahead? Are we talking about Tenants coming in or is it more approvals? No, it's not approvals. It's more about the timing for us when we for if we look at Electronics, for example, I think that the timing for starting building This parking space and Sport Hub will be very soon coming up because that's a service to also to Pulpietam V. We want those two projects to be finished Almost at the same time, it's a good thing. But when we start to do Phase 2 In this it's depending on the situation. How does we feel that The interest for additional 20,000 square meters in Hillierville will be so when we sign leases in For PSM5, then we think that the right time is to start the next project. So it's more a part of timing. And it's the same thing with Posthonet in Lund. And what I mentioned is that I think that, that Time when we make the decision is getting closer, maybe a bit closer than I Would expect it to be actually because the demand is there. So it's a good thing. So, Ernesto, when you say timing, what you mean is that Signing up subpoena, that's really what we're talking about, the pace of getting those in. It doesn't necessarily mean that we need to have signed leases at this exact building, but we have Feel that the competition in the area and the product that we can offer is right for the moment. But of course, it's not you cannot only calculate this timing. You have To feel about this rate. So you would also be willing to start a project if you don't have anything Any channel at all, if you think it's in the area where there's a good demand and you're very confident, that's really also if you're signing it. Yes, we do that as well when we think it's the right thing, the right product and the right location and the right time. And my final question then, when it comes to we're talking about using different materials in Construction and scope 2, 3 and all this coming in, we're seeing Lots of trials and early moves in using more wood in the material on the fundamental of the buildings. And there's pros and cons of that, of course. But what is your do you have any insight and view on that development to replace concrete to some extent. Yes, I have a lot of actually, I have been working with these questions some years ago. It's one of my special areas. So I really like these questions, I must say. And I think it's interesting that we that discussion on these areas is A bit all over the place today because I really they really interest me. I think that different kind of materials and different kind of products, You have to find the right place for them to use the material the best way it can be. Concrete and steel It's excellent products, but you have to use them where they do their best. And it's the same thing with Wood. For PPM5, I'm really thrilled that we have Done the work very properly to find solution for this to getting the certification 0 carbon dioxide neutral. And we have done that Still with slabs in concrete, we have a frame in steel. We have Really large flexibility with not so many structure in the office areas, for example. And that's an important factor for the long term perspective. So but we can reduce The amount of materials by calculation and really be careful where to put different kind of materials. But wood is also an excellent materials, but especially for shorter Spended what now that can be in English. So I follow those questions with different kind of Materials in the right place. And I think that you cannot say that materials disqualify themselves by being just those materials. Many materials are excellent, but you have to use them on the right place. Okay. Thank you. I never thought that I could be able to talk so much about this question in this Q3 report, but I love it. So please come back. We can talk more. Let's pick this up later. I don't think it's the right time. But Yes, it's definitely an interest all over the place. So, yes. Thank you. Our next question comes from the line of Frederic Seel of Carnegie. Please go ahead. Your line is open. Good morning, Olej and Arvid. We'll see if you will rate my questions as highly at the front. But I'll take a question for vacancy, most likely more boring. Vacancy was down 1% quarter on quarter. And that improvement is not You have not taken into account Danske right in the vacancy of 8% because they left at the end of the quarter. The AB Industries Property, we've classified in the table on Page 10 in the report as a project because as Enrique explained during the presentation, our intention is to well, to do something more Value uplifting with our sites. So So that Has, of course, affected the 92% in occupancy rate, excluding projects and land. Yeah. Yes, that makes perfect sense. And with regards to them leaving, have you already reduced your book value for that particular asset. Yes. But we haven't changed the value actually because the value will The racing when we do this the value is quite low according to the low rents that have been paid before. So the value is the same. I would imagine that the land adjustment to those buildings are pretty low. How many resin units do you think could be developed on this site? I have no Calculation for that, but as you can see in the picture, the land area is very large. And I think we have considerable positive effects there to come. So the main thing you are likely to work on is getting zoning permissions for rest of the units. Is that fair to say? Yes. Yes. Okay. Thank you. Those were all my questions. Thank you. Our next question comes from the line of Markus Henriksen at APG. Please go ahead. Your line is open. Thank you. Just one follow-up on projects From Stefan earlier, I was thinking about your logistics projects. Some of these have been in the potential Show future investments for quite some time now. And the market is very strong. What's holding You're back in Hallmerland, Larskona, Helsingborg for these projects. We have started billing in Helsingwall. And I think We have ongoing discussions for refurbishment of 1 a few of these existing Buildings. So it's only a matter of timing when it comes to tenant discussions. Okay. Perfect. Thank you. Thank you. And we've had a follow-up question come through from Jacob Anderson at SEB. Please go Your line is open. Thank you. Sorry, just one thing that popped up as well. You told you have a very Interesting projects, of course, in Malmo in the harbor there in Yamal. Just your comment there about Some delays with discussions with the TC when it comes to sea levels and so on. Maybe could you elaborate on how Severe those discussions are, I mean, we see that the it's not always Easy to deal with these questions, I guess. So if you could No, it's not. And it's not Only in our solar panel project, it's for the whole area. So it's of a great importance for the municipality to solve them as a whole for the whole area. It's more that it, Of course, affects the timing for the zoning plans. But I think that the municipality is active even if we always want more activity. So I know and but it's of course, it's difficult questions, but they will be solved in one way or another The Gotland area will be built, of course. Just to understand, is it about is it just formality? Or is it building in different ways, raising the levels or cost increase and so on? What is the issue here? What is the solution? The issue is it's not only for this area. It's for the whole city of Malmo. So it's the Landsturrenson who It's discussions between Land Surzen and the municipality actually at the moment. Questions like, okay, so it's raining and it's blowing from the right direction and the sea level 0 level is rising, all of those things at the same time. What will happen on the streets? Can the fire The fire brigade. Fire brigade really get access to these buildings, Such questions. So it's not well, it's actually Such questions. Yes. Okay. Okay. Okay. Thank you. Thank you. And as there are no further questions on the line, I'll hand back Our speakers for the closing comments. Okay. In that case, we just want to say thank you very much for listening in. Thank you very much. And please come back and I want to speak more about concrete and the fiber gate As well. Thank you for listening in.