Wihlborgs Fastigheter AB (publ)

Welcome to the presentation of Wihlborgs' first 3 months report 2026. Growth, cash flow and core business is our mission.

And even if the world gives us some challenges, our region continues to deliver not only [Audio Gap] quarter in 11 years, but I see no new trend in this, just a reminder that a quarter is a short period. Net debt to EBITDA at 10.5x, good access to financing continues, and we have acquired our first premises in Carlsberg Byen in Copenhagen.

And with some figures on that, the rental income was SEK 1.150 billion, a new record, the operating surplus SEK 800 million and in terms of property management SEK 520 million. The result for the period increased to SEK 548 million, corresponding to SEK 1.78 per share and EPRA NRV has increased by 10% to SEK 101.14 per share adjusted for paid dividend.

A comparison of the rental income Q1 '25 and Q1 '26, indexation, plus SEK 13 million; acquisition, plus SEK 46 million; currency effect, minus SEK 12 million; additional charges, plus SEK 23 million, and completed projects, new leases and renegotiation plus SEK 35 million. And the net letting was negative with minus SEK 35 million, the first negative quarter after 43 quarters in a row with positive numbers.

New leases of SEK 49 million and terminations of SEK 84 million. Even if every single termination is a loss, the volume of termination as such is close to last year and no drama in that, but the amount of new leases in Q1 are too low to meet that.

The year started quite slowly, picked up a bit. But then when the war in the Middle East was a fact, all discussions were pushed forward.

Over 50% of the termination was in Denmark, and we know that the market there is quite strong, so I expect that we will see a pickup. We also had SEK 8 million in Sweden from bankruptcies that affected the result with minus SEK 1 million, but terminations had a yearly rental value of SEK 8 million.

Now, in April, things have changed, and I think the list of possibilities and the ongoing discussions actually are quite good. That doesn't mean that things will be easy ahead, and I cannot promise positive net lettings in the coming 4 to 3 quarters, but at least we have a number of good discussions ongoing.

Here are some of the tenants that we have signed during Q1, the defense industry, which, for example, the new and expanded lease with MilDef is a growing sector. And we also see some examples of interesting and growing tech companies like Intermail and the tech hub Hedge in Helsingborg also continues to attract innovative AI companies.

Here, we have the net letting in a historical perspective, lettings in green, terminations in light blue and dark blue stacks are the net letting. We don't win every lease opportunity, which is annoying, but the hit rate over time is good, and let's see how we can develop this further on.

And the list of our 10 largest tenants in alphabetic order, strong customers, and they contribute with 90% (sic) [ 9% ] 90% of rental income, 7 out of 10 are governmental tenants and the public sector contributes with 22% of rental income. The rental value as of 1st of April '26 is SEK 5.157 (sic) [ 5.127 ] billion per year, first time over SEK 5 billion, plus 11.6% and rental income, SEK 4.523 billion, plus 10.3%.

Strong figures, and this is an effect of acquisitions, indexation, investments and, of course, tenants willing to pay for the right quality. Looking at the like-for-like figures, the properties we owned a year ago, excluding projects compared with updated figures, we can see that rental value is up 2.2% and rental income is up 1.1%.

Like-for-like does not include the large acquisition we did 1st of April '25. As said last report, it's good with the growth also in the like-for-like stock, but to get the growth we aim for, acquisition and investments will continue to be important, especially in times of higher vacancy.

Changes in the market value of our properties, we started the year with SEK 64.414 billion in accordance with the external valuation of 100% of our portfolio. We have made acquisitions, which add on SEK 534 million; investments SEK 562 million; divestment, minus SEK 4 million; changes in valuation, plus SEK 19 million and together with currency translations of SEK 117 million, that summarized to a value of SEK 65.642 billion.

Valuation parameters haven't changed since last -- since year-end, and that includes assumed indexation of 1%. So very small changes of valuations that growth comes mainly from investments and the transaction we made in Copenhagen.

Here's a long-term trend for portfolio growth from SEK 7 billion to SEK 65.6 billion in 21 years and growth every year without taking in any new equity from our shareholders. These figures, the running yield show how we actually perform in relation to the valuation, so this is not the valuation yield.

For the whole portfolio, the occupancy rate is 90%, excluding project and land, and with an operating surplus of SEK 3.356 billion that gives a running yield of 5.5%. Fully let, the portfolio would give around a running yield of 6.3%.

Good earnings capacity in relation to the value of the portfolio and good cash flow generation is the foundation also ahead. The occupancy has improved in some areas and lost a bit in others.

What we know is that of the total vacancy, approximately 14% are already signed, but not entered yet and for additional 6% of the vacancy, we have ongoing discussions with possible tenants. So a lot of positive work in that, but we will also add on vacancy from terminations.

Additional new build projects will move from the project line to the running portfolio line and possible transaction may also affect vacancy, so no exact guiding ahead. But I expect occupancy numbers for the portfolio to be relative flat next quarter, but with somewhat increased income from the base rent figure.

Parking and additional charges may vary. In the office portfolio, the market value is SEK 51.451 billion with an occupancy rate of 90%, 90% in Malmo, continue with small improvements in Helsingborg to 91%, 89% in Lund and 91% in Copenhagen.

The operating surplus from offices summarized to SEK 2.781 billion and a running yield of 5.4%, 6.2% fully let. The logistics production portfolio have a value of SEK 9.315 billion, 92% occupancy in Malmo, 83% in Helsingborg, 95% in Lund and 97% in Copenhagen.

In all, 88% occupancy with a running yield of 6.2%, 7.3% fully let. The development of our total portfolio running yield, 5.5% brings stability, not least since the portfolio overall has a high quality and good location.

As noticed before, a good increase of the running yield since 2021. Some sustainability highlights.

We have improved from 0% to 35% certified area in our Copenhagen portfolio within 1 year, and there is more to come. We have also new sustainability targets from 1st of January and we will report on a wider spectrum with focus on energy efficiency, carbon dioxide emissions and climate adaptation as well as important social and governance measurement.

More on that topic in the report, but I'll show you some figures here. It was a cold start of the year but to be able to compare how we improve our energy use, we also present figures normal year corrected, and of course, also in kilowatt hours per square meters.

Here you can see the improvements quarter-by-quarter and year-by-year. We present the carbon dioxide emissions from Scope 1 and 2 in the same way.

Here, we have higher emissions in Q1 according to more gas used in Denmark during this period of energy uncertainty in the world. We also compare energy production from solar cells and not at least, we have a new goal till 2020 (sic) [ 2030 ] to replace refrigerants in our cooling systems to more environmental neutral gases, and this work continues.

A catalog of our value and properties in our 4 cities end Q1 '26, 38% of the value is in Malmo, 23% in Helsingborg, 17% in Lund and 22% in Copenhagen. Commuting across the Oresund Strait continues to increase and the entire region benefits from the fact that Sweden and Denmark complement each other's economic cycles.

The increased focus on defense and resilience also contributes to investments in the region, not only correlated to industries such as Saab and MilDef, but also due to the fact that 90% of the important food to Sweden passes through our region. That means that Sweden depends on the infrastructure in the region and harbors, highways, railways and of course, the Oresund Bridge must be in good condition and well protected.

The region as such benefits from that also in a long-term perspective. During the first quarter, we have acquired 10,300 square meters office and retail in Caroline Hus in Carlsberg Byen, property value of DKK 370 million and location that attractive both for living and working.

A high density close to the city center, interesting mix of older refurbished building and new build, and as we see it, potential for growth rent in the area. And time for financials.

Over to you, Arvid.

Thank you very much, Ulrika, and good morning, everyone. If we look at the income statement for the quarter, Ulrika has touched upon the figures already, but I would like to highlight that the rental income of SEK 1.150 billion is actually a record for the fourth quarter in a row when it comes to rental income in an individual quarter, up 10% versus the same quarter 2025.

And as we write in the report, we had a positive one-off effect of SEK 15 million coming from a terminated lease in the Danish portfolio, which was settled with a so-called termination fee. But nevertheless, we had a good growth of 10% of the rental income.

The operating surplus amounted to SEK 800 million, up 9%, and that is despite, as you can imagine, having higher costs for snow removal and for heating during Q1. For those of you living in Sweden, you know that the winter was colder and longer than most winters, not least so here in Southern Sweden.

Income from property management amounted to SEK 520 million, which is up 12% versus the same quarter previous year. Value changes in the property portfolio were basically flat, plus SEK 19 million, so no big changes at all.

And the underlying assumptions, as Ulrika mentioned, was also basically the same as at year-end. We had positive value changes in our interest rate derivatives portfolio, plus SEK 191 million and in total, a profit for the period of SEK 548 million.

On the next slide, looking at the balance sheet, investment properties versus 12 months previously went up by SEK 6.5 billion and stood at SEK 65.6 billion in total. Is the presentation of the slides working or not?

Not sure. Let's see again.

Let's see, if we can get a signal from somebody if the slides are visible. Looks okay over there.

Equity end of March stood at SEK 24.9 billion, up SEK 1.4 billion versus 12 months previously. And then we've, of course, during that period, paid almost SEK 1 billion in dividends.

The borrowings stood at SEK 34.2 billion, up SEK 5 billion versus 12 months previously. And as you remember, we have made acquisitions of approximately SEK 3 billion during that period.

And also, we've had a high investment level in our project portfolio. Moving to the next slide, looking at our key numbers, the equity assets ratio now stands at 36.8%, the LTV has gone up slightly to 52.1% and the interest cover ratio continues to be at a strong level at 2.9x.

Looking at per share numbers, the EPRA NRV stands at SEK 101.14 per share, which adjusted for paid dividend is up 10% versus 12 months previously. Looking at the next slide, the long-term development of EPRA NRV is visible in this graph and the average annual growth still stands at 15% adjusted for dividends, so a strong long-term growth trend in EPRA NRV.

On the next slide, you see the long-term trend for the other financial ratios that we continuously monitor. On the left-hand side, you see the interest cover ratio.

And as you remember, it was on extremely high levels during the 0 interest rate period 2019, 2020, 2021. But the 2.9x level where we are currently is well above the long-term goal of or the goal that we have of a minimum of 2.0x.

On the right-hand side, you can see the equity assets ratio, well above our threshold of 30%, stands at 36.8% currently. And the loan-to-value is well below our limit of 60% at 52.1%.

On the next slide, you can see our net debt in relation to EBITDA. Also there, we have a long-term stable development; this ratio now stands at 10.5x.

And we think it's a very relevant number since it reflects the cash flow that we actually generate in our core business. On the next slide, you can see our sources of funding as of end March.

Half of our funding comes from bilateral bank agreements with Nordic banks, 16% from the bond market, 34% from the Danish real mortgage system. The bond market is, of course, more sensitive to the geopolitical development than the bank market is.

But I would still claim that the bond market works in a quite okay way also over the past month or so. The beginning of the year, the bond market was actually quite strong, and we issued some new bonds in January, beginning February on attractive levels, I would claim.

Our ongoing discussions with our banking relationships tells us that the banks are continuously willing to lend money. So a positive sentiment from that front.

And the Danish real mortgage system, I would claim has a stable positive development as always. On the next slide, you can see the structure of our loan portfolio with lots of details.

The average interest rate that we're paying currently is 3.21%, 3.24% if you include the cost of committed credit agreements. This means that our marginal cost of debt is actually pretty close to the average cost of debt that we're paying currently.

On the next slide, you can see the development of the fixed interest period, which now stands at 2.6 years and the average loan maturity, which stands at 4.8 years. No drama in the development of these numbers, and we continue to work according to our financial risk management policy.

On the next slide, you can see the development since 2019 of available funds, currently SEK 2.6 billion, which gives us day-to-day flexibility to manage our operations in a good way. And with that, I hand the word back to you, Ulrika.

Thank you. I'll give you an update on our investments and progress and a quick overview of our largest project.

During Q1, we have invested SEK 562 million, and it remains SEK 1.738 billion to invest in approved projects. We continue to expect yield on cost at 6% or a bit over 6% for new build offices and 7% or a bit above for industrial and a good mix of refurbishment and new build in the portfolio.

Let's start with projects soon to be completed. In Malmo and Hyllie, we continue with Blackhornet 1, Vista, an SEK 884 million investment.

The mobility hub was completed end '24 and now the first tenants are in place. One new lease signed in Q1, but we work hard for the next ones, yield on cost 6.2% and approximately 40% pre-let.

From 1st of January, the total area of the building are included in Malmo offices best classified as project. And during Q2, we will count the project as completed even if adaptations for tenants will continue, of course.

In Lund, Posthornet Phase 2, a new modern office right beside the Central Station will also be completed in Q2, but moving in continues rest of '26, 10,100 square meters, SEK 448 million, yield on cost 6.5%, a very successful project. In the southern part of Lund, we continue the development of Tomaten; this project is for BPC, will also be completed in Q2 '26, and we invest SEK 79 million, 3,600 square meters and yield on cost 7%.

And next to that at Surkalen 1, Note have started to move in and Lund University will move in, in Q4. Well-used land area and long leases in total, 14,500 square meters, investment SEK 260 million and yield on cost 9.2%.

The large project at Amphitrite 1 in Malmo for Malmo University is running well in accordance with plan, a bit above 20,000 square meters for Malmo University at a 10-year lease, investment SEK 1.130 billion and completion is planned to late Q4 '27. Discussion is ongoing regarding a positive -- a possible prolonging of the lease to 20 years, both positive and possible.

At Kranen 7 in Malmo, we will invest approximately SEK 136 million in a preschool for the municipality, 2,900 square meters zoning plan approved and completion is expected to Q3 '27. Public Procurement Act for the contractor is still ongoing.

And at Skrovet 6 in Malmo, we refurbished 11,000 square meters, 50% is pre-let to Cloetta and Media Evolution with completion starting Q3 '26, investment SEK 149 million for a total technical shift in the building and a quick change from a quite closed building for Saab and now open up to being the new entrance to the Dockan area. Good interest from tenants and several ongoing discussions.

A new project in Helsingborg at Muskoten 20, where we invest for our tenant MilDef, a combination of refurbishment of an existing vacant building of 2,400 square meters. We have new build 3,400 square meters and adding on the existing lease of 4,400 square meters.

So in total, 10,200 square meters and SEK 97 million investment, including value of the land. Yield on cost, 7.2% and completion in Q3 '27.

And the new project started at Sunnana 12:26. It will be a mix of tenants and a flexible building for smaller industrial logistics.

It's a good product where we have very low vacancy in Malmo, pre-let 30% to one tenant, investment SEK 87 million, and completion is planned to Q4 '27. That was some of the ongoing project and just to touch on future possibilities, just as a reminder that we always look for new opportunities and are ready to start when we think the timing is right.

Here are some office possibilities in Malmo in the area of Nyhamnen and Dockan, where we continue to work with the zoning plans, high interest for the future, of course and even if the figures on gross floor area are estimates, the volume are interesting as a part of the other development in the area. And 4 other possibilities in Malmo, industrial at Spannbucklan, research and offices at Medeon site, housing at Kranen 5 and offices at Naboland 3.

In Lund, we continue to develop the land at Brysselkalen in the southern part of Lund. At the Ideon site, we have 3 project possibilities for offices and laboratories, 2 of them on these pictures, Ideontorget and Delta 2.

And at Vasterbro, the work with the zoning plan continues. In Helsingborg and Landskrona, we also have a mix of different possibilities and the main part is in the Logistics and Industrial segment.

And just a summary of Q1 again. Rental income up 10%; operating surplus plus 9%; income from property management plus 12%; negative net letting minus SEK 35 million; net debt to EBITDA at 10.5x.

We see good access to financing, and we continue to grow this quarter an acquisition in Carlsberg Byen. And it goes without saying we continue with our focus on cash earnings and our future growth.

And with that, we are open for questions.

First question regarding the EU income in Q1 in Denmark. How large was the annual rental income in that contract?

And did that already impact the occupancy rate in Q1? Or will we see the effect first in Q2?

Let me think if I have that number off the top of my head. It relates to Slotsmilen [indiscernible], where ATP have left the building.

So it is vacant currently. I don't have the annual rental income off the top of my head, but giving a bit more flavor of what -- the way it works in the Danish market is that when a tenant terminates a lease, they're obliged to restore the premises to the shape the premises were when they moved in, which basically means that when a tenant leaves, you end up in a negotiating position to see how much should they actually pay to restore the premises to the original shape.

And it's that type of payment that these SEK 15 million relates to in this quarter.

Okay. I understand.

Also regarding the general occupancy rate, I think you previously have said that you expect some improvement during this year, and you write in the report that 14% of the vacancy is already pre-leased. Does that indicate that we should expect roughly a 1 percentage point increase in occupancy rates during the remainder of the year?

Or will it take longer time to see that positive effect?

You should not expect that it's too early to say that because we also have terminations, of course. So what I see now is that we will be quite flat until Q2.

And then it depends on what will happen with project completions and terminations ahead. But I definitely see as we have also given some notice before that the rental income continues to increase.

Yes. Regarding your interest expenses, how much do you capitalize related to project?

And should we expect a significant increase in coming quarters as you expect lots of projects, both in the first quarter and in the second quarter?

SEK 9 million were capitalized in interest in the first quarter this year. And given that the project volume was very high during 2025, and it will still be reasonably high in 2026, but probably not as high, I wouldn't expect that number to go up.

Okay. And one final question.

I think you have a swap contract of SEK 1.25 billion with very low interest rates that matures during this year. Is that like one contract in one single quarter?

Or will it be a gradual effect in [indiscernible]?

No, it's spread out over Q2, Q3, Q4. It's not one contract.

I'm looking at that net letting chart, Page 7. Looking at the termination volumes, which is, as I think you pointed out, is quite similar to the past few quarters.

It's more an issue of, I guess, the amount of leases signed during the quarters that haven't been high enough to get a positive figure. But just on the termination figures, can you mention, are there any individual contracts of size that you can mention?

And if so far, in that case, where geographically?

We have two leases with PostNord, one in Sweden of SEK 2.5 million and one in Denmark of -- I think it was SEK 7 million or something.

SEK 6 million, SEK 7 million.

In Denmark? No, SEK 4 million in Denmark.

So in total, SEK 6 million, SEK 7 million. And we have Ahlsell here in Malmo with minus SEK 7 million.

And then just a few on minus SEK 2 million. So nothing really large or something like that.

But what we see is that the large portion of these smaller leases that always is a great motor in the business during Q1, the cautiousness was very -- everybody was very worried about what will happen, and we really saw that in the discussion. So we missed that volume in the new leases.

On the termination side, Ulrika also mentioned it during the presentation, but we had tenant bankruptcies, a few different, not one big one. But those bankruptcies have an annual rental value affecting the net lettings of between SEK 7 million and SEK 8 million in the quarter.

That does not mean that we have credit losses of that amount. But in the net letting figure, it affects the numbers negatively.

One more question. You mentioned here earlier on the call, I think, something along the line that after what happened in the Middle East, lease discussions ongoing were prolonged or delayed.

Have you had cases where they've been -- the discussions have actually been terminated without having a signed contract related to what's happened geopolitically?

No, not what I can -- no. And as I mentioned, the list of ongoing discussion have increased significantly since February, March.

So April and ahead looks quite decent, I would say.

I have three questions, if I may. First one is a follow-up to one of the earlier questions about the nonrecurring item in Denmark.

Is -- the way I understand the answer, Arvid was that they moved out in Q1, but is this a large material lease in terms of annual rent? And if so, did they contribute fully throughout Q1 and then moved out in late March?

I'm just trying to...

They moved out earlier, I think, in Q4 or something. So this was just a negotiation about the termination fee that were decided during Q1.

Okay. Very good.

Very clear. Perfect.

Second answer, also, I think, pretty straightforward. Arvid, you talked about the bond market and the banking relationships and they were still sort of eager to lend, et cetera.

Have you seen any moves in terms of margins with bank discussions during these, call it, 2 months of geopolitical uncertainty and the general uncertainty in the market?

We haven't had any refinancings or new financings. So we don't have any, so to speak, hard evidence of the prices.

But my take is that the bank margins during March, April have basically been stable. I have not gotten the impression that they have moved much over the past couple of months.

Very good. Then last question on the project completions that you talked a little bit during the presentation, Ulrika, Blackhornet and Posthornet now completed in Q2.

But the way I understand it, at least Blackhornet, probably some move-ins already in Q1 and then some Q2 and then maybe Q3. How should we think about sort of the contribution in Q1, Q2?

Will the tenants start paying in Q2 or later? And did they contribute anything to Q1 at all?

Yes, we had contribution during Q1, and we will see contribution during the autumn as well. But in a slower pace, no large significant moment where things suddenly will contribute in a more smooth, I would say.

Okay. Is it similar for Posthornet?

Or is that more binary?

Posthornet has the largest contribution during Q2 and -- but also during the autumn continued.

Okay. So a little bit in Q2 and then fully or 70%, at least given the occupancy rate from Q3 and onwards?

Yes. We have something assigned for moving in, in Q4 as well in Posthornet, but most of it is now in Q2.

I had a question on the EPRA CapEx table on Page 25 of the report. I noticed that tenant incentives have increased quite significantly by almost SEK 100 million versus the first quarter last year.

And also on the annualized basis was higher than full year '25. Is this going to be the run rate going forward for the whole of '26?

Or is this just due to some one-off items?

To be open and frank with you, James, predicting the split of CapEx into these different categories is not extremely easy. So the tenant adaptations or the tenant or what EPRA calls tenant incentives will continue to be an important part of our CapEx because into that category falls a number of measures when we adapt premises to new tenants, and that will continue to be an important part of our ongoing business.

But predicting the magnitude of these different parts of our CapEx is still tricky.

Are there any written questions?

I have seen nothing arriving digitally. Okay.

Okay. Thank you for this.

And of course, if you have further questions, you know just reach out to us, and we'll answer. So thank you for today.

Yes. Thank you, everyone, for listening in.