Good morning, everyone, and welcome to this presentation of Castellum's Q2 report. There will be a Q&A session in the end of the webcast, and if you like to ask a question by phone, please dial pound key 5 on your telephone keypad and ask your question.

Let's start. Go ahead, Paul.

Thank you, Christoffer, and let's start with some highlights from the second quarter. Divestment to Wihlborgs, we sold all our properties in the Öresund region minus Copenhagen to Wihlborgs.

Sales price was 13.3 billion. We also sold a portfolio here in Stockholm with two buildings, and we sold it to Alecta, and the sales price was 5 billion.

Sort of common denominator for both of those transaction were that we received a good price, and we think and that we will not be able to meet our return targets given the price we achieved in those two transactions. We have conducted, continued to conduct share buybacks.

For the first 6 months of 2026, we've purchased 39 million shares for 4.6 billion. On the leasing side, we Ericsson did not use its option to not lease the full Infinity, but they would rather lease the full Infinity.

We also made a leasing contract with Ericsson for two additional buildings in Hagastaden: Emerald House and Jubileumshuset. There are some conditions to that those two agreements, these two lease agreements are not a part of our net leasing this year, and probably not until the end of next year, in 2027.

Short introduction of Castellum. We have a property portfolio of 134 billion.

We also own 37% of the listed Norwegian company Entra. Currently, we have 5.2 million square meters and 650 properties and around 500 employees, but that will reduce as we have the closing on the announced transactions.

We are working quite diligently with sustainability, and not the least, with reducing our energy consumption. This first half year, we have reduced our energy consumption with 2 percentage point.

Net leasing, obviously, very important for a commercial real estate company, and it's very nice to see a positive net leasing for the first 6 months of 2026, despite quite big terminations in the last quarter. Net leasing is 110 million, and a lot of that is obviously driven by the Ericsson leasing of Infinity, which is around 140 million.

If we move on to the next slide, you can see the net leasing excluding projects, and what you can see here is that it's still negative when we remove the projects we are doing, but perhaps a bit better than it has been for the past 3 years. This picture also gives us a nice bridge to next slide where we can see our vacancy, which is today is 87.5%, it has increased a bit also in this quarter.

What what we can see is that the vacancy rate or the occupancy rate has has gone down, and this is all due to the net leasing that has been negative for quite a long time, actually. Here is some some some some key figures regarding the contracts.

Roughly 1/3 in annualized terms, there has been action in the contracts. 9% annualized figures has just been prolonged with no change in rent level, and roughly only 3% has been renegotiated, and those terms have then been 4% lower rent level than than before the renegotiation.

Quite a big chunk has been terminated, 11% in annualized terms. That's a lot of that is actually driven by AFRY.

It was a pretty big contract that was terminated during during the quarter. If you weigh in on prolonged and renegotiated leases, the the change in rent level is -1 -1%.

Here here on the next slide, you can see the in-place rent, the contractual value of our rent levels, how how that has changed during the past year. We have disposed assets, and we have removed assets from the like-for-like where we are making projects.

The like-for-like in-place rents have declined with - declined with 1.3%, and that's mainly driven by an increased vacancy. Of course, with increasing vacancy, you get a negative income growth in the like-for-like portfolio, and it has been -2%, basically the same as we reported in the first quarter.

NOI is also negative for for the quarter, for for the period, the full period, -4 -4.8% negative income growth, but also a bit higher costs mainly driven by a pretty cold winter. More costs for snow removal and heating and and and so on.

Over to you, Christoffer.

Thank you. As Paul mentioned, we have been quite active on the transaction market the first 6 months of this year, and we have signed deals totaling 24 billion of value, which the large one being the divestment to AP7, signed in February, 5.6 billion of public properties; the divestment to Alecta, signed a couple of weeks ago, 5 billion of office properties in Stockholm; and the divestment of our assets and our organization in Skåne, south of Sweden, to Wihlborgs, 13.3 billion, also signed a couple of weeks ago.

In addition to that, we have signed a couple of smaller transactions, totaling close to 400 million in property value. Also this is a mix, but mostly offices: one small one in Copenhagen, one small one in Malmö, one small one in Stockholm, a couple of ones in Linköping, different categories and different geographies.

The total signed divestments has been done at a value just below 400 million 500 million, or 2% above fair value the quarter before the transaction was signed. We are, of course, more interested in the return we expect from the properties to give us in relation to the price we get, rather than price versus fair value, but still worth mentioning, and especially given the size, totaling 24 billion.

As I said, also a mix of property categories and a mix of geography, interesting, I would say. In this table, we have also highlighted both the total profit, that is including sort of all effects including in the income statement, also value changes in goodwill, tax effects, etc., bottom-line results.

We have also one line here, profit included in the report, which is what we have recorded in the income statement up until this report. The difference, of course, will come in later reports.

Looking at our property value, it's 134 billion as of this report. In this figure, then the Alecta and the Wihlborgs transactions are included, as they have not been closed yet.

If we exclude them, we have approximately 116 billion of asset value. Please also notice that we in the balance sheet in this report have reported the properties sold to Wihlborgs as assets held for sale, they are not included in the line investment properties.

During the period, we have invested 2 billion in our existing properties. Of this, 1 billion is new construction, roughly 600 million is tenant adaptations, approximately 300 million is maintenance, and then some smaller amounts, energy investments and other investments.

This is something new that we have added to the report. A couple of you guys have asked for it, and here you go.

Value changes in the period: +236 million. If you divide that, it was +401 million in the first quarter and -165 million in this quarter.

It's roughly the value change in this quarter from the signed transactions. Then the rest, there is some big positive ones and a couple of minuses.

The Infinity property is up quite a lot after the signing of the lease agreement with Ericsson. The cap rate in our valuations is 5.7%.

It has been quite stable over the last couple of years, and the value decline over those years has rather been lower cash flow expectations. Loan-to-value: 37.3%, healthy headroom, I would say, against our financial policy, which is not to exceed 40%.

We have during the quarter terminated our S&P rating, and the reason for that is that we believe that one credit rating is sufficient to support our new strategy. Debt maturities, on average, 4.5 years, unchanged during the quarter.

We have during the quarter refinanced 2.3 billion of secured RCFs. We have issued 3.9 billion of unsecured SEK bonds, a mix of two, three, and 5 years, average credit margin 99 bps.

We have also repurchased a number of shorter SEK bonds, 1.7 billion in total value. Stable to decreasing margins, I would say, in both the bond and the banking system during the quarter, still good financial markets.

Interest-bearing liabilities: 57.3 billion, down from 59.5 billion in Q1. We expect this to come down even further, of course, when we close the transactions later in the year, and that we will reach somewhere 49 to 51 billion, given that we will amortize approximately 40% of the Wihlborgs and Alecta transactions.

Average interest rate currently at 3.5%. That one is up from 3.1% in Q1, and that is driven by the redemption of two eurobonds with low fixed coupons.

This was something that we had to do to be able to fully execute on our strategy, and including the divestments of properties to Wihlborgs and Alecta. We would not have been able to do those with the previous bond documentation.

The total increase in running financial net will be approximately 200 million on an annual basis. That's approximately 50 in the shorter bond and approximately 150 in the longer bond.

ICR: 3.2 times, it's unchanged. Our policy is to have at least three times, headroom there as well.

The ICR is stable to slightly decreasing due to the higher interest rates following this redemption of eurobonds that I just mentioned. In the financial net, we can also highlight that we in Q2 had one-offs of 48 million.

31 of those relates to this redemption of eurobonds. Most of that is actually not a cash flow effect, but rather only income statement effect.

We have during the first 6 months bought back shares, as Paul mentioned, for 4.6 billion, and with that we concluded the share buybacks relating to both the AP7 transaction and results for 2025. Average price has been roughly 117 SEK.

As you might have seen, this morning the board decided upon a new share buyback program of up to 3 billion, and that equals 40% of the proceeds from the Alecta transaction, 60% of the proceeds from the Alecta transaction. That is roughly equal to the remaining part of the authorization that the board has from the AGM, because as of today, we hold approximately 5% of our own shares.

Income from property management per share increased 7.3% when comparing the first 6 months of this year with the same period last year. Then we have, of course, bought back shares during this period for proceeds from the AP7 transaction, but that transaction was closed on 15th of June, almost fully in the income from property management during the period.

Looking at the last 12 months comparing with 2025, it's instead 3.5%. Net asset value per share, here measured as EPRA NRV, has increased 4.6% since year-end.

Roughly half of it is due to profit, and roughly half of it is due to the share buybacks that we have executed below net asset value. As most of our overall financial target is a return on equity over a business cycle above 10%.

Taking the first half of 2026 and annualizing that figure, we are at 5.2%, far from the goal, but at least a step in the right direction. We will continue to fully focus on this in everything we do.

With that, it's time for questions. I repeat, if you like to ask a question by phone, please dial pound key 5.

The first question comes from Staffan Bülow, SB1 Markets.

Good morning and thank you for the presentation. I have a couple of questions starting off with the AP7 divestment.

How much did that impact rental income in Q2?

I have actually got that figure somewhere here. As I said, it's almost the full year, the full quarter, as we closed it on 15th of 15th of June.

I think in the press release, it was a preliminary closing date of 29th of April. Then, as I said, in the end, it was 15th of June, almost a full full quarter.

If you give me 1 minute, I can perhaps I'll I have to come back on on that one.

No worries. I can move on to the next question, a bit more on capital allocation.

At what share price level would share buybacks no longer be an attractive use of capital in your view?

We haven't really discussed that in the board. It's quite a big difference still between the share price and the NAV, I think is around 40 SEK.

It has not been a topic, but of course, when approaching the net asset value, share buybacks won't be as attractive as it is right now. I think we have some headroom still.

Yeah.

Thank you. Following the Wihlborgs divestment, what distribution alternatives are you considering for the excess capital?

Could you consider a mix of dividends, buybacks, or, yeah, what options are you considering?

I think we are considering all options, but also as we have said, I think we wrote it in the press release today as well, that today we have decided upon the proceeds from the Alecta transaction, and the proceeds from the Wihlborgs transaction will be at a later stage. Then, of course, we will sort of take all options into the equation and decide what's best at that point in time.

Yes, and since the closing is a couple of months ahead, we don't know where share price is moving and so on, it's a bit stupid to make that decision right now. We have to come back when we actually know where the markets are when we are receiving the proceeds.

Understood, makes sense. Next question, after the announced divestments that you have made here, what share of the remaining portfolio still fails to meet your return requirements?

It's extremely difficult to answer that. It's much dependent on what prices we may achieve on the transaction market.

If we would look at the fair values we have today, it's I wouldn't say it's a big proportion, but it's a significant proportion of the portfolio where we probably would be better off if we could sell them at fair value. As I think I write in the letter or in the CEO comment, it's tricky with fair values because there are very few comparables in the market.

They are guestimates. That's why we are discussing a lot with other property companies and other interested investors in what prices may be achievable actually in the transaction market.

We do absolutely have a big chunk of our portfolio where if we would receive the fair value, we would probably be better off selling them. That's remains to be seen how much we will get for different type of properties.

Thank you. One final question from me.

Do you see a broader base of buyers of your assets versus the beginning of the year, or is it the same conditions?

I think already in the beginning of the year actually was very large and broad interest in transaction market. Perhaps it's increased a little bit since then, but as I said, I think it was very large interest already at that point in time.

Thank you. Those were my questions.

Thank you. Next one, Lars Norrby, SEB.

Hello,

thank you. Question regarding net leasing.

Obviously positive in the quarter, but negative excluding previously announced lease with Ericsson. You're also I think saying something like conditions in the rental market remains sluggish.

Looking ahead at the remaining two quarters of the year, what's your aim in terms of net leasing?

The aim can only be to work as hard as we can to get as many signed contracts as possible. Forecast for the demand is something that we can't do.

We don't have that glass ball, to say, or so we don't know. We can only do our best to sign as many lease contracts as possible.

Are conditions pretty much unchanged from a quarter ago in the market?

I think, when I speak with people within the organization working with leasing every day, I think in Stockholm they say that there's more activity. We have signed more lease agreements than we did a year ago.

In other markets, in Gothenburg, it's still pretty weak, but it's not declining. It's perhaps it has bottomed out.

In our regional cities, it's seems like it's a bit sluggish still, but it's not declining at least. That's sort of the message I get when I speak with people.

Then regarding

you had AFRY affecting the Q2 net leasing figure by -95 million, is that correct?

Yes.

I understand previously it was known that that was upcoming. Is there anything else, remind us, that you're waiting to come in terms of termination from any other tenant of size?

No, not in that size. No.

Then

finally, jumping to different figure in the report, the 84 million non-recurring item in income in Q2. I think that was related to one of the property divestments, wasn't it?

Is there anything more non-recurring that you know now coming up in Q3, Q4 on that line?

No, smaller ones. There are often smaller ones, but typically they are so small that we don't mention it and you don't notice them.

That one was, of course, quite big. As you said, that one was related to one of the properties in the AP7 transaction.

In the Wihlborgs and Alecta transactions, no such effects, or at least not of any size.

Perfect. Thank you.

Next question, Nadir Rahman, UBS. Yes,

good morning. Thanks for taking my question.

Three from me. The first one, I'll ask in turn.

You mentioned in the report that you see no reinvestment opportunities at suitable yields. Could I ask, where are you looking for these reinvestment opportunities?

In all our markets.

Is that across offices, logistics, other asset classes as well?

It's within the asset classes that we are operating.

Are there any that you're more interested in at this stage that you see are more likely to become suitable in the near term?

To be honest, no. We are looking broadly.

Okay.

My second question then is, you also mentioned that part of the value changes in the existing portfolio, excluding the disposals, you see the assumption of lower cash flows for parts of these portfolio. Is this due to softer rents or is this due to occupancy declines, or any other factors that's worth noting?

I would say it's a mix of both. We see no actual real growth in rent levels.

It's rather flat. Then slightly what one could say pushing forward of the decline in vacancy ratios in the property fair valuation discounted cash flows.

It's a mix of rental levels and occupancy.

Do you see these value changes concentrated in any particular region or asset class, again?

No, not really. It's across the line, I would say, both office and light industry and logistics.

Might be a bit better for retail, and we do have a small proportion there, but it's too small differences to say that it's a significant difference between the asset classes. Right.

Okay.

My final question is regarding the hybrid reset date that is upcoming in December, and of course, you've also terminated the S&P ratings in Q2. From the 40% of the disposal allocation that you've assigned to debt, could we see any of this being used for the hybrids, or is this purely going to be used for more traditional debt?

We have seen it as more traditional debt. Okay.

What is your thinking on the hybrids given the current market conditions, given that we are now less than half a year half a year away, sorry, from the from the reset dates?

As you said, first call date is in December, and first reset date March next year. Something we are evaluating, and we'll come back with both how and when.

Okay. Perfectly.

Thank you.

Thank you. Next question, Fredrik Stensved, ABG.

Thank you very much. Two questions, if I may.

First, on the new table that you show in the presentation today of the sort of proportion of leases being renegotiated and terminated and the change in rental levels, etc. It seems like a fairly large change this year versus previous years when it comes to the change in rent level.

Would you argue that this is due to a strategy shift, a new management team, etc.? Are you more open to the idea of lowering rents to keep the properties occupied than previously, or is there a change in the market?

Difficult to answer exactly what proportion you should put on what account, to say, but I would say that majority is about the market.

Understood. Then secondly, on leasing and occupancy.

You've previously stated, I think several times, that it will get worse before it gets better, and occupancy has come down. Have all the major terminations primarily from last year now are all of those reflected as of today, or are there any significant move-outs that still remains for upcoming quarters and years?

All of the large ones from the beginning of last year is in these figures.

Very good. Thanks.

Thank you, Fredrik. Next question, James Cattell, Green Street.

Good morning. I just had a question on the hybrid bonds, but that's already been answered.

Thank you.

Thank you, James. I think that was the last question for today, thank you all for listening in, and have a great summer.