Good morning and welcome to Fabege's year-end report 2025. My name is Bent Oustad.

I'm the CEO of Fabege, and I'm lucky to have with me the experienced CFO, Åsa Bergström, here today. We run through the report, quite well-known structure on the report today.

Just to start with Fabege in brief, we have a modern portfolio with focus on Stockholm. We own, we develop, and we manage our properties with focus on attractive working places and good living in superb locations in Stockholm.

As you all know, Sweden is the capital of growth region in the Nordics. If you distribute the rental value of 4.3 billion to different segments, office stands for 84% of the portfolio.

That's office in a broader definition, including also educations. Industry, logistic 4%, retail 4%, hotel 4, and other segments 4%.

If you allocate the square meters into the same segments, office is 72%, and industry and logistic up to 9%, the others more or less the same. The market value of the portfolio, 78.5 billion, 37% to the inner city, and that also explains the differences from the rental value and the square meters because a lot of the properties are in central locations in Stockholm, and there the rents per square meter are quite substantially higher than rest of the city.

Solna stands for 48%, Hammarby Sjöstad 10%, and Flemingsberg 4%. If we try to summarize the fourth quarter '25, rental income came in at 899 million, up 4.4% from last year.

Profit from property management ended at 371 million, up 11%. The surplus ratio was 75% for the quarter.

As we have commented on the report, quite lucky with the weather at least at the end of the year, so that's why we had a quite good surplus ratio. Profit from residential development came out at 35 million in the quarter, 23% margin.

Shouldn't expect that high margin going forward, but close to 20% is something you can count on. Net value changes of 711 million downwards, and earnings before tax then came in at 293 million.

Net lettings for the quarter was 33 million, ending the total year at plus 36 million. We see increased activity in the leasing market.

I will get a little bit back to that later on. Large projects enter the management portfolio during the quarter, also coming back to that, and large refurbishments are ongoing.

That's how we try to secure also future value creation for the total portfolio. The quarter has proven our capability to capitalize on Birger Bostad's business model.

We are then converting our residential land bank into shareholder return, and we will have more reporting on that also going forward. The last point, not on the summary slide, is the board has proposed a dividend per share of 2 SEK and 20 öre per share.

With that, hand over to you, Åsa.

Thank you, Bent. Yes, I'll go through the income statement.

Rental income, as you can see here, amounted to almost 3.5 billion, a little uptick from last year. We had a negative impact in the identical portfolio of minus 3.2%, mainly due to the negative net lettings of the previous year.

We also sold one property that impacted on the negative side, but on the other hand we have several projects that have been finalized during the year and that are now producing income for us. Property expenses, a little bit higher than last year.

We have an uptick in property tax, but as Bent also said, there were lower winter-related costs, very good both beginning of the year and end of the year. Thus we had a surplus ratio in property management of 74%.

This year we also had a positive impact from Birger Bostad's residential development. They have finalized just over 100 apartments during the year and produced an income of 280 million and a result of plus 55 million, which is included in the gross profit as you can see here.

Net interest expense was slightly lower than last year. We have borrowed roughly the same amount during the year, but the average interest rate has come down from 2.98 to 2.82 during the year.

The share in profits in associated companies increased. All of it roughly is related to our share in Arenabolaget.

There was a one-off included in this figure of 63 million, where we have taken down the value of the shares that we have in Arenabolaget. That's 63 million of the 130 is more a one-off item.

All in all, profit from property management increased by roughly 5.5% to 1.4 billion. The impairment development properties relates to Birger Bostad future potential projects, and the realized changes in value is related to the sale of Gamen in the first quarter, so that's the same figure as in the first quarter.

Unrealized values came at 1.7 billion for the full year. I will come back to that a little.

Then changes in the derivatives were positive in the fourth quarter, but all in all over the year a little negative number. We have a result before tax of minus 508 million, and then a positive tax impact 160 million, of which 128 million relates to the sale of Gamen in the first quarter.

We have externally valued roughly 50% of the portfolio this quarter, and the property value came at 78.5 billion as you can see here. There's been a shift upwards in the average yield from 4.55 in the first quarter to 4.59 in the fourth quarter.

This next slide gives a little bit more transparency to unrealized value changes over the year. We can say that during the first half-year, the negative value changes were mainly related to increased yield and lower expected cash flows, longer vacancy periods expected from the external valuers, and also a write-down of building rights mainly in Flemingsberg.

In the second half of the year, we saw increased yield requirements in suburb location, a little decrease actually in the most central CBD location. We also took a write-down on the building rights in Flemingsberg since the land allocation agreement with Huddinge has expired at year-end.

What you can also see in this slide is that actually the projects have contributed on the positive side in all the three first quarters. Key ratios: we landed at 119 Swedish crowns per share and an EPRA NRV of 145 per share.

Total return of the properties after the write-downs amounted to plus 1.1. The surplus ratio, as I mentioned before, 74.

Equity ratio and loan-to-value ratio remains on the strong side. As you can see here, the debt ratio has actually improved as well as the interest coverage ratio.

We feel that we are still in a strong position going forward. Financing has been on the positive side all over the year, maybe getting even more positive during the second half of the year.

We see continued strong access to financing both from banks and from the capital market. We have some ongoing refinancing with banks that will hopefully be finalized during the first quarter.

We have done some refinancing for maturities in 2026 already. We did bond issues of 850 million during January, short of three years, and as you can see here on margins of 89 and 84 basis points.

Those are maturing in November 2028. We still have the undrawn facilities of 6 billion, which provides safety, security going forward.

There has not been any change in fixed rates. As I said, the average interest rate cost has come down during the year.

Approximately 47% of the portfolio is fixed, and with an interest rate fixation of 1.5 year, and if we include the callable swap, it increases to 2.1 years. We have some safety for increasing interest rates should that happen, although it seems that the opposite now is more likely, at least in the near term.

This is also a new slide that we just wanted to show how rental income and results have developed over the last 10 years. You can see that rental income and gross profit from property management has increased, while the profit from property management, including interest cost, is more variable depending on the level of the market interest rates.

The surplus ratio is fairly stable. We still have the target to reach 75%.

What this figure shows most apparently is the occupancy rate, which has come down, and we will come back to that a little later. Also finally from me, a few words on sustainability.

We keep working very hard in order to reduce energy consumption. We are now very well below the target of maximum of 70 kilowatt-hours per square meter, with the outcome which was in 2025 only 65.

Also, of course, due to very mild winter conditions over the year, but nevertheless a target and a result which we are very proud to present. We also achieved the goal to reduce CO2 by 35% in comparison with 2018.

Finally, the Fabege share is again confirmed green by Nasdaq Stockholm, which I believe is also a good sign for all the work that we are doing on the sustainability side. That's from me, and back to you, Bent.

Thank you. The work done in the sustainability department is very important for us, and it reduces our costs, keep up the surplus ratio for the company as very well.

If you look at the occupancy rate, it has fallen down to or increased up to to 14%, as we said. That's driven by the two previous projects, Ackordet 1 and Påsen 1, that has now been transformed into the management portfolio, increasing the vacancy.

As the the one of you that's really following us, you know that some tenants are moving into Ackordet this spring, for instance Atea moving from Kista to our property, it will start to increase again. We also have improvement portfolio, not part of the occupancy rate.

There we have a total 156,000 square meter, of which 127,000 is let. That's future potential projects for us, and are on short-term lease contracts without any right to possession when it expires.

If we go a little bit more into the net lettings and the renegotiations for the whole year, the net lettings came in at plus 36 million. It's new lettings of 236 million and terminations of 200.

That's in our historical view on the lower side for for us, and it also shows that we have a a year without any major new lease agreement signings, so that's a goal for 2026. The renegotiations, in total 618 million, decline in rents of 0.3%, with 2 million downs for the whole year as a as a whole.

That also shows more stability in the in the leasing market. Bear in mind, 360 million of maturities in '26 and onwards has now already been renegotiated and are part of these figures, the tenants are forward-looking.

That's that's great news for us. If we dive a little bit deeper into the renegotiations, I said 618 million.

You can divide that into 341 million extended on unchanged terms and 277 million with a 0.7% decline, total 618. As said, they're dominated by several small- and medium-large tenants.

We don't have any of the really large one this this year. For the total 2025, we only had six tenants with a yearly base rent above SEK SEK 10 million a year.

Actually two of these six were concluded in Q4, both with an unchanged rent level, and one in Arenastaden and one in the city portfolio. That shows also for us, even though there are small a number of renegotiations, that's it's stabilizing in our view.

If you distribute the new leases above 10 million, 45% are in the office, 35% in education, and 20% in the hotel. If you take all the renegotiations per area, 72% are in the inner city, 25 in Solna, 2 in Hammarby, and 1 in Flemingsberg, just to give you a little bit more flavor on the figures.

Rental development for the existing leases and existing contracts we have put in place, so that's definitely not a forecast, but that's what we have secured so far. As you see, all all numbers a little bit better than last quarter, and that's kindly more or less reflected by the positive net lease in the last quarter.

I really like this heading: stable customers. What we are talking about is high-quality customers with long long lease contracts.

To just to remind you, we have in total around 700 customers in our portfolio. It's it's a lot, and it's an important work for us.

If you look on the right side, the 10 largest tenants, they stand for 30% of the of the total rent. They the 10 largest tenants have a WAULT of 10 of 9.2 years, which is very, very good as a base for the whole company.

If we go further into it, the 25 largest customers have close to 50% of the total rent, meaning 670 customers more or less stand for 50% of the rent, so that also takes down the the big risk of of many of those customers. They are more or less flexible customers, also when it comes to better market conditions and to adjust the portfolio to what the larger tenants also would like to rent of us.

In total, the average lease contract length is 5.1 years. We're very happy to welcome two new tenants on the top 10 board during 2025.

The Saab contracts is the second largest one, and Alfa Laval are in place number nine there. It's very nice to see.

Also, as we've seen several quarters, some some questions about the parking business. We have increased our parking business.

We have specialized personnel taking care of that for us in in our company. We have total 12,500 parking spaces approximately, can be 501, I'm not quite sure, of which 2,700 have a separate charging station for electrical vehicles.

We see that's a key factor for some of the largest larger customers we have. It's important for them to have access to parking spots.

We see increased demand for day-to-day permits instead of monthly agreements, and that also increased the flexibility in the portfolio for us as a company. It's easier to to book a a spot up to 120, maybe 130% when you have day-to-day permits instead of monthly reservations.

In total for 2025, approximately 210 million in parking revenues. If we look a little bit at the completed projects, think they're well-known for most of you, but in May Alfa Laval took occupancy in the premises in in their premises in Flemingsberg, very nice property.

In September and and November, Saab took occupancy in Nöten 4 in Solna strand, also a nice property, even though I'm not allowed to go into that property yet, I haven't seen it from the inside, but it's it's nice. As I said, Ackordet 1 and Påsen 1, tenants have gradually moved in during the last quarter as well, and some more tenants will move in during spring 2026, and that's also the reason why the vacancy in the management portfolio have increased slightly this last quarter.

If we look at the ongoing projects, we have the Farao Kairo. We have also talked about that earlier.

For me, Arenastaden as a whole is a sweet spot. This is the sweet spot in the sweet spot, 20 meters from the metro station.

We have have board approval for investments up to 613 million. We have dismantled the existing buildings, and we are doing ground and foundation work, and also preparation for construction works these days.

Why are we doing this right now? This was more or less decided 10 years ago when we entered Arenastaden.

Now Solna municipality are doing their last work on all the roads, the infrastructure in this area, and then to be cost-efficient for us, we do this work on the plots at the same time, being ready for that. It's an it's an interesting spot for and we have a lot of interest in that spot, but as as of today, we haven't concluded any leases on it so far.

We also have Ormträsket 10, the Wenner-Gren Center, investments approved for up to 609 million. Rental value in this part will be approximately 58 million, and it's pre-let 20%.

That's a little bit down from last quarter, and it's due to when they started the construction work there or the refurbishment, we had to move out all the tenants to other buildings we have in the neighborhood. Some of them are very satisfied in the new locations.

They have signed new leases there instead of going back to this one, and someone had even found other other premises in our portfolio, other places in in Stockholm. Right now it's 20% let.

We are starting the marketing toward end of second quarter 2026 on this building, and it will enter the market one year from now or between first and second quarter 2026. Each floor plan is 400 square meters, it's a little bit early for us to be in the market already, but we see good interest.

We have also completed and had some and have some ongoing projects in Birger Bostad, our residential company. Haga Norra, the block 5 up there, is processing according to plan.

It's in total 288 units. Completed in 2025, we had the BRF Alma, which is a which is a cooperative apartments, 23 out of 20 are sold, as we have two showroom apartments there, and they are not for sale yet, and we have one that's not sold at the time being.

We also finalized 78 rental apartments in Q4. That's what's reported in in the numbers in Q4.

To be completed in 2026, 50 owner-occupied apartments, of which 44 are sold when we wrote this yesterday, and today it's 45 actually, possession of this will be during Q1 this year. We're coming with BRF Mathilda and Inga Tånge also later on in 2026, in total 137 apartments, of which 35 are sold.

On the on the marketing during last Sunday, more than 17 interested parties showed up, it's looking good for us. We also have the preparations underway for projects to start in the next phase in Haga Norra, it's block 4 and block 3.

Totally 132 cooperative apartments in block 4 and 260 rental apartments and senior housing, plus a preschool actually, in in the block 3. When it comes to the senior housing, the preschool, and also a grocery store, we have signed LOIs on those on those units already, but they're not signed contracts and not part of the net lease at this time.

Remaining investment in that one is 860 million, completion in '28 and '29. With that, we complete the the residential buildings in Haga Haga Norra.

If you look at our building rights, commercial building rights of 550 million square meters, approximately 60% legally binding of those, and it's has a book value of 7,000 per square meter. That's a little bit down from earlier quarters, and as Åsa mentioned, we we have not or it's been a termination of the land allocation in Flemingsberg.

We haven't agreed on the terms with the Huddinge kommun. We have ongoing negotiations, have a a positive tone, we will report to the market when things changes.

We have 500,000 square meters of residential building rights in addition in our portfolio. The last land allocation that we received is the Sveaplan.

It was legally binding in January 2026. Preliminary possession date around mid-April 2026, and building rights are approximately 8,800 square meter gross floor area, also taking into account the floor plans under underground.

Purchase price is 208 million SEK, should be index-linked and start to be close to 230 million, and a plan move-in during 2029 on this property. That more or less completes our one of our core areas in Sveaplan going forward.

We will have 55,000 square meter square meters of gross leasable area in that area, having ground floor activities including food and beverage, having high-class conference centers, parking, and other services to be a be a center for our portfolio that can have some extra services going forward. Project opportunities in the near term, as I mentioned, Farao Kairo, with a with commercial units coming in addition approximately 500 apartments, and in phase one we have 185 apartments there.

We see apartments in this area is more or less bought or let by the larger tenants in this area, it's very, very popular, and that's really give us give us a well-functioning urban urban area. That's good for us.

Haga Norra, as I said, already produced 519 units, in production 137, and decided to produce another 390 units, already with LOIs on a lot of them. We have the Västra Kungsholmen, Tegelterassen.

It's 36,000 square meter office. Partly demolition has started in January 2026.

Not not and we don't have any lease contracts in place, but the interests and the pipeline is quite good, quite promising. That's a big ambitions for 2026.

We have the Solna Business Park, the Parkhusen, is a land allocation for 22,000. That's in the purple purple line on on the screen here.

We have Yrket next to it with 320,000 residential units and 2,200 square meter premises, more or less ground floor activities there. The last one, we already own and have in our books 60% of the land plot, but 40% is a land allocation from the municipality.

If we try to summarize and our main short-term priorities, we are working every day, every night, every second to decrease vacancy in our portfolio. We have to continue to be the preferred partner for our customers.

It's so good for me as a new CEO to come into this company, meeting a lot of the larger larger tenants, and everyone talking good about the the Fabege employees. That's very, very nice to hear.

We have always to be available, accessible, and be solution-orientated. In my my view, we are that, and that's what I hear, it's very good.

We have to secure value creation in ongoing projects. We have to analyze value creation in our land bank, and to be very exact about that going forward, that both in the commercial and residential land bank.

We have to continue to be active in the financing markets, which started well already first day in January, so that looks good. As a company, we always have to search for opportunities, and we're searching for opportunities to build a company, and not to do a single transaction.

With that, I conclude our presentation, and maybe you have some questions for us, Albin. You were so shocked about the presentation, everything...

Thank you very much for that, Bent and Åsa. My name is Albin Sandberg, and I'm representing Kepler Cheuvreux as sell-side analyst, and I will be moderating this Q&A, and all of you will have the opportunity to ask questions as well.

I want to start with you, Bent. Obviously, you provided us and the market with an update a few weeks before Christmas about your first thinking and so on.

Now you've been through a Q4 results. I just wonder if there's anything that has come across your mind that either better or worse with the company compared that you thought initially.

You were always on the board before. Maybe also you're Norwegian, and now we're coming to Sweden, any cultural differences that you have encountered so far?

Definitely some cultured differences, it is, but on the good side. You see Stockholm as a city is much more vibrant.

It's much more happening here. You see also in the papers, you see on the stock exchange, things are happening.

You are taking all the opportunities, and that's something we also have to grab in this market that we are right now. On the very, very positive side is to be around meeting all our employees, see how they are burning for Fabege, really want Fabege to do well.

That's important for us. They are the one that always meet the customers first.

That's a good sign. On the negative side, we have some vacant space, and I've been around visiting most of the vacant spaces.

I can't believe that we don't have tenants for them, they are very nice, superb locations. That's what we have to achieve going forward.

Yeah. Now, obviously, the numbers that we're seeing that you're reporting today, on the one hand, a positive net letting, on the other hand, a little bit higher vacancy, which I understand is a bit of mix.

You're also saying that key focus is to reduce this kind of vacancies. From a broader market perspective in this cycle where we are now, do you think that it's the same as previous cycles, once we get the economy running demand should pick up, or is there anything else because of work-from-home habits, AI, and so forth that would sort of impact this, let's say, potential recovery differently than what we've used in the past?

What do you see?

I'm not sure if it's that much actually. Now the vacancy in total in Stockholm, the bigger Stockholm is quite high, so that's why it will take a little bit longer time.

If you look at the pipeline, look at the leases being out there, the competition, I think the pipeline is growing only the two months I've been on board. That's positive.

What kind of tenants are growing? You see within the defense industry, you see within municipalities tenant, a linked tenant, they are growing.

You see some tech investors are growing. More or less, I think you take some more opportunities in Sweden than I saw in Norway that time.

I think more is happening here, and this is more or less the capital of Scandinavia. Someone is talking about Copenhagen, but yeah, I think more will happen here.

I'm quite positive about that. When it comes to all the other things you are mentioning, and I hear that all the time, yeah, all talents have if you need talents you have to be in CBD, I don't think it's like that.

I've been in my company now in Fabege, talented people all over, but maybe in my view we are more or less in the center. It's very nearby, nice locations.

I think what you're searching as a young employee today is you want to be where things happen. You want to be in the office that you can be creative, that can meet your older colleagues.

You want to grow within the company, you want to be motivated. That's up to us as landlords.

Are the premises good enough? If I hear someone, "No, I have to stay home to be efficient."

Then you really have to move because that's the landlord's responsibility to give you the right location, give you the right premises.

Yeah. The positive net letting that you managed now in Q4, can you say anything about were these negotiations that had been going on for a long time that finally made it?

Also, given that the high vacancy rate we're seeing in the Stockholm office market, do you need to offer extra rental rebates or something like that in order to sign these leases?

It's on the both sides actually. As I said, this time it was no major leases, the leases we took now are not being going on for so long time.

We had ambitions of higher numbers, but someone came in early January instead of this. It can be both ways.

This time that was not the reason. On the other side, the period to conclude the leases are getting longer and longer.

This is much longer than I'm used to, but still I see they are getting concluded. We listen about all possible leases in the media two or two years before they are really concluded on the larger ones.

Things happening in the market, quite positive. As I said now during the presentation, the signs in our numbers they are for real, but it's not a lot of them.

It's only 36 million in total in positive net lease. If it really recovers, should be much higher.

Definitely we don't have any major new leases during the whole year, and that we have to step up the gas.

I know that in the past you've referred to an annual net letting target. I don't know if that's still valid or if you have one, what would that be for 2026?

It's 50 million in net lease. We need that, and we have some extras in new leases.

In the management portfolio, it's plus 50.

Yeah. You were referring to your tenant list saying you were very happy with that, and still there are some that account for a little bit more.

Are there any specific one that you are already now working with and so on in order to make sure that they stay, or anything that we should watch out for here in the near term?

We are always working with our tenants, we try to keep all of them. We try to have them growth, and if they don't want to grow or they maybe as Sweden has been down in a little downturn in generally, they have to adapt their business to the reality.

If they can't increase the prices, they have to look at the cost side. If it's possible, among other things, they also try to reduce some of the space.

We think we have high-quality tenants, and we're working with them every day, 24 hours a day, and that's our main priority as a landlord.

Yeah. Out of these, let's say, 14% of vacancy that you have now, what would you say is a normal level for vacancy in Fabege's portfolio and across the cycle level?

Across the cycle, it's always difficult to be 100%, we should be high in the 90s actually, mid-90s, 95 maybe. That's a goal, and it's absolutely reachable.

Yeah. Do you want to say any target year for that number?

No, in my head, it's only one year ahead, but you have to be a little bit realistic, we need some time. As I said, to conclude a lease takes some time,

and

for them to move in, it also takes time. The larger tenants, they are planning 5 to 10 years ahead, bear that in mind.

Are you in a situation now where some of these vacancies are close to structural, you believe, that you're looking into alternative use for some of these assets that you have?

Not yet. If you think you only have pure office, then it can be some alternatives.

Within the education sector, within the health sector, et cetera, things are growing.

Yeah. I also wonder a little bit about your potential to start new projects.

Obviously, you're very much focused on getting the vacancy numbers down. You have your balance sheet where I guess your LTV is well below target, but you still have a debt ratio that is a little bit high.

How do you envision the development CapEx going forward here? 2026 specifically, maybe?

As we went through some of the projects, larger projects we have now, and I think the CapEx for 2026 would be around 2 billion, but it's a little bit on the way to go down. Some of the CapEx are also for the residentials, and that's more or less a sale, so that will be in a future sale.

When you see the result from the residentials, the cash flow is much better of course when it comes to that. Going forward, if we are a potential tenant, we always have space.

We always have potential projects. We're talking about the portfolio of 150,000 square meter that now running on shorter leases, that's also a potential projects going forward, but in the meantime they run on shorter lease lengths, et cetera.

So... A new potential commercial project start this year 2026, that would require a tenant in place, would you say, or could you imagine starting anything on speculative grounds?

We can start on speculative grounds, the balance sheet. We're not worried about that, but we like to have tenants in place before we start any larger at least.

Yeah.

Then on the property valuation side was negative in Q3, was negative now again in Q4. If you just could clarify a little bit what was happening in your own assumption and maybe in the discussion with the valuers, anything that struck your mind in one way or another, delta-wise?

I'm just wondering what happened that needed you to take down values yet again in Q4. Also before Åsa, are we reaching the real trough here now?

Do you think we can see the numbers in black for '26?

I hope so. It also depends on what's happening on the market.

Specifically in this quarter, the expected indexation or inflation for next year was taken down by the valuers from 2% to 1.5%, so that has a negative impact. We also saw increasing yields in the suburb locations still coming from the deal Vasakronan did, and there has not been any other deals in these kind of suburb locations, so that has had maybe too much of an impact, I believe.

Then we have, because the land allocation, the agreement with Huddinge regarding the land allocation in Flemingsberg was terminated by the year-end, which made us take down the values for you can say extra value that we had allocated to those building rights that we're not at least sure that we will have them anymore. As Bent said, also there are ongoing discussions with Huddinge, so that might change in the coming months.

I think no major changes, but small changes that had this impact.

Just to be clear, the 1.5% indexation, that's for 2026?

Correct, yes. Then onwards it's still 2%.

Then

also, obviously, the financing market continues to be strong is my feel. As a CFO, I guess you can confirm that your interest rate duration is a little bit on the low end in my view at least.

Are you happy with it, or are there any plans to extend it, and what would it mean for your average cost of debt?

Yes, we are as it is right now, we are quite happy with it. Of course we are monitoring long-term interest rates and the levels of them in order to be ready to act when we find it more favorable than it is right now.

We have some older swaps that will mature during this year, also next year, that will increase interest rates costs going forward. We also see when we are renegotiating both banks and refinancing bonds this year, margins are substantially lower today than they were when these were signed before, approximately say three two three three to four years ago.

There are ups and downs, and I'm quite confident about more or less sideways development of the average interest rate this year.

Compared to this outgoing rate as of Q4?

Yeah.

That's clear. I think the discussion about share buybacks is a topic for a lot of Swedish property companies trading at a discount to NAV.

You have carried out buybacks in the past, and my understanding is that you have referred maybe a little bit to underlying cash flow and the debt ratio in order not to continue buybacks. Is that's correct understanding, and is that still valid, or are you considering buybacks maybe ahead of investment starts?

We are always considering everything. When it comes to the capital structure, that's the main priority.

We have also the dividend policy more or less as a base for how the board is thinking these days. And Åsa and I, we are not deciding this.

This is a discussion in the board, how should the capital structure be, and it's part of this discussion actually.

You don't rule out share buybacks for 2026?

We never rule out anything actually. As I said, priority is the dividend policy we have in place.

After that, we look at the cash flow and the key metrics for the company.

Yeah. Then I have one one last question before I hand over to the telephone conference and also questions on the web.

Now, Bent, you obviously have a bit of connection, I must say, with the main owner in Fabege. You used to be the head of or CEO of Norwegian Property.

Would a merger between Fabege and Norwegian Property make sense in your view?

Never say never. I'm not spending too much time on that actually.

In my view, at least the two of us, we are synergies. We don't need two CFOs or two CEOs.

On the other side, we have better financing here in Sweden, so that's also a synergy. Beyond that, I'm not sure about the synergies.

No. Great.

Thank you very much. With that, we open up for the telephone conference.

You can also send questions via online, and we will see if we can take them here. Operator, please go ahead.

Hi, good morning. Thanks for taking my questions.

You mentioned that lettings in Q4 was skewed to SMEs. Looking at your leasing discussions, are they also skewed the same way?

Do you expect new lettings to gain momentum over '26?

It was a little bit difficult to hear.

Yes.

Can you please repeat the question? The line wasn't that good here actually, sorry.

Oh yeah, just on your leasing discussions, do you see the same skew towards small- and medium-sized companies?

Going forward, I think that's more or less the bread and butter for us in Fabege. As I mentioned, we have 670 customers/tenants in our portfolio, and we are always looking for smaller and larger tenants.

That's part of our portfolio. We have some very large tenants.

The top 10 stands for 30%, and they take more time, take longer time. They are also in the market.

There are companies growing. There are different segments growing.

We have this mix. It's actually not a clear view what's happening forward.

If you just look at Solna, Solna Business Park in that area, we had a large contract with Saab. Our neighbor had a large contract with Svenska kraftnät, and the social government has also moved to this area, large tenants.

Large tenants are in the market, and unfortunately, we didn't have too much succeed in 2025, but that's top of the agenda going forward.

Clear. Just how well is your current vacancy positioned to capture this demand?

Do you still need to spend some CapEx to reposition these assets?

It's very different. A lot of the vacancies are very, very nice, more or less the CapEx will be maybe to do something at the entrance.

Just if it's a single-tenant building converting to a multi-tenant, we have to look a little bit to the entrance for the whole building to be for a multi-tenant building. We have the examples at Stjärntorget 1, where Telia is the main tenant.

Approximately 8,200, 300 square meters are now rented out to two new tenants in that building during '25. Things are moving.

Clear. Thank you.

Sorry, just on the near-term project opportunities, what returns do you see, and how does this stack up against your cost of capital?

Cost of capital are around 10% is cost of capital. As you see, we haven't really succeeded the last years, but as I try to summarize, to really look into the value creation in the land bank and in the projects, it's a top priority.

Thank you.

Thanks. I have a couple of questions here.

The first one regards if you look at the central administration on a year basis, it's up 14%. Are there any extraordinary costs in that increase?

Sorry, Jan. It seems to be a very bad line here.

I couldn't understand your question.

I can

try to repeat it, maybe taking it a little bit slower. Your central administration costs are up 14% year-on-year for the full year.

Are there any costs that are there that are of extraordinary character?

Last year in 2024, we didn't make any provision for the profit-sharing foundation in Fabege. This year, there is a provision for that, and that pretty much explains the whole difference.

Okay. Then a question on the NOI margin.

You have a target of 75%. How comfortable are you of reaching that already in 2026?

It's definitely a goal to reach it in 2026. I think if we are a little bit more successful in the letting business, adding more rental income to the P&L, we will soon be there.

It's more related to income side than cost side actually.

Okay. Then maybe if you could comment or make any kind of guidance for your associated companies, i.e., the Arenabolaget for 2026.

Do you have any figure there?

Except for the write-down of 63 million that we took in 2025, this is in line with what we have communicated before, and as it looks now it will be the same for 2026. Roughly around 70 million

negative. Right.

Then a question on maybe a clarification. Your net letting target for this year, was it 50 million in the management portfolio?

For 2026, yes.

Yes. Okay.

Then a final question from my side is if you look at the chart with rental income the coming quarters, and if you zoom in to the first quarter, that figure has increased 10 million from the Q3 report. Is that the indexation effect?

Indexation is very low. It's an impact from positive net letting that has had.

Hardly any increase from the indexation?

I think indexation is roughly in total 25 million over 2026, the full year. Of course it has a little impact.

Okay, 20 what did you say, 26 million?

Yes.

Thanks for taking my questions.

Thank you. Hope you hear my line better.

First, a simple question. The headline of the CEO statement is the same as in the Q3 report, I note.

Does this mean that your view on the market is very much the same, or is it looking slightly better now, or the opposite?

I haven't concentrated about the former CEO's view there. This is my view, and it's the view as of today.

I'm quite positive actually, but it's better to try to show you some results before we are too optimistic. It looks better and better in my view.

Then my second and final question. You did not do many transactions during '25, if I remember correctly, just one one centrally located property.

If you would sell something in 2026, would you focus on selling something centrally located, or rather in Solna, Arenastaden? For that matter, are you looking at divesting residential building rights?

We are always looking at opportunities, but in my view with the balance sheet we have, we do transactions when the market are favorable for us. I don't see the markets very favorable to sell assets these days, but that can change quite fast.

We also see the transaction market in the CBD being better, even though it's a low volume. We are looking into that.

When it comes to residentials, we will try to develop the residentials at least in our core areas ourselves. We still own some residential land banks outside Stockholm, and that could be a possible sales going forward, but nothing is concluded as of today.

Just to complement, we sold some building rights for 200 million on the western part of Stockholm City, Västra Kungsholmen, and those will be vacated probably in April or May in 2026. The agreement was signed, they still remain in our balance, but they will be vacated in the spring.

Thank you.

Good morning. When it comes to your land bank and the decision to sell or develop your land rights, what's the required rate of return that you would need to develop a piece of land rather than selling it?

That's also a little bit different. If it's in the core area, then we don't have that high development margin, but it's about other.

We try to achieve 15%. It's difficult these days, to be very honest.

When it comes to residentials, as I mentioned, they are a little bit higher.

That figure, 15%, is that a levered or unlevered return?

Leveraged return, equity return.

Thank you.

We have a few questions left. I think we can make it within the 11.

From Fredrik Stensved, ABG, one question is, are the two remaining floors in Haga Norra leased now, even though tenants have not yet moved in? If so, when are tenants moving in?

There is one tenant moving in in April this year, and there's still some remaining space to be let.

Yeah. The other question refers to the JV.

Fredrik, unless you got the question before, answer before, please reach out to management, but I think you guided for 70 million for this year. Then from Mikael Foncheff from Kempen Investment Management, would you consider rationalizing your location and perhaps tightening the portfolio segments via capital recycling, or are you fully convinced of all your location for the longer term?

We are always looking into all kind of opportunities, but at the time being nothing is decided with that, and I've been on board for two months. It's a little bit early to conclude on all those kind of questions.

I think the final questions has been answered, I think we leave there.

Then we close the call, and thank you for participating. We look forward to next quarter, and see you back in 3 months.

Thank you.