Operator

Good morning, welcome to the presentation of Wihlborgs first half report 2026. Let's start with the future and the acquisition of 95 properties in Malmö, Lund, and Helsingborg.

635,000 sq m. Initial yield, including property management cost, at 5%, just in line with our Swedish portfolio.

This is before we have done any efficiency improvement that we expect from ourselves. Additional upside is 15% vacancy to give development possibilities ahead.

The total portfolio suits us almost like a tailor-made glove. The location is right into our most appreciated areas.

The mix with both offices and industrial logistics is perfect. If we look at the location of our properties in Malmö City, including part of Dockan and Nyhamnen, Wihlborgs own the black colored buildings in this map.

Here we can add on 11 properties in the same area, located as the red dots.

In the area of Fosie in Malmö, we can add on 17 properties. In Lund at the Ideon site, here are four properties from Castellum.

Two of them are land for development. In the city center of Helsingborg, we have several large properties, here is the location of 14 additional properties.

In the Berga location in Helsingborg, we can add on 10 properties. Almost like yin and yang for these portfolios.

Now we can work with a larger portfolio for our tenants, but also to make room for the other investors that might be a better owner for some of the areas or properties. The interest for investments in the region is high.

This is a way to create possibilities for future growth of income and growth of operating surplus for our shareholders.

If we can choose, we are totally convinced that if you can get growth in the market you already know very well, you can perform better. If you combine a large acquisition with both higher operating surplus immediately and larger possibilities for future development, it's a perfect match.

We have done things like this several times before.

The acquisition of Ideon from Ikano 2013 increased the LTV to 63% initially. The acquisition of Nya Vattentornet 2019 gave us a quite large additional vacancy in an area where the vacancy in our own portfolio was already high.

Now the Ideon area is very successful and filled with tenants in different sectors. Our plan is to do the same thing with the Castellum portfolio, it will demand hard work and some time.

For us, this is a very well-known business in a very well-known market.

The price of the portfolio is agreed to SEK 13.3 billion, 5% under Castellum's valuation. Let's remember that Castellum from 2022 and ahead decreased the valuations of the properties significantly.

We think that Castellum's valuation can be fair, but the total portfolio and including the whole business, the price should be a bit lower than their valuation property by property, just in accordance with the agreement.

What about timing? Is summer 2026 not the time for cautiousness?

Our call is that business is best done when the shop is open, it's better to be ahead of the queue. Running a property portfolio means to look far ahead, to put some plants in the soil and be prepared to harvest in the long run.

We think the opportunities for Wihlborgs improve significantly with this transaction, there are no opportunistic thoughts behind that. Just a dry, data-driven investment model.

Let's go to our report, and we start with a summary of Q2 2026. Rental income up 7% compared to a year ago, a new record level.

Operating surplus plus 6%, also a new record. Income from property management plus 6%.

Net letting positive at SEK 5 million. Most important that the number of discussions and possibilities ahead have improved after the frosty start of the year.

Market rents as well as rental income in like-for-like portfolio continue to develop positive. Net debt to EBITDA at 10.7 times.

Of course, we signed the agreement with Castellum, as I just mentioned, but high focus on daily business, which continues to be our strong call.

With some more figures on that for the full period, rental income up 8% to SEK 2 billion 324 million. The operating surplus plus 8%, SEK 1 billion 664 million.

Income from property management plus 9% to SEK 1 billion 77 million. New record for all of them.

The result for the period was SEK 850 million, corresponding to SEK 2.76 per share, and EPRA NRV has increased by 9% to SEK 99.66 per share, adjusted for paid dividend.

indexation plus SEK 22 million, acquisition plus SEK 59 million, currency effect minus SEK 16 million, additional charges plus SEK 26 million, and not least, completed project new leases and renegotiation plus SEK 91 million, which means that our investments and activities pay off.

The net letting positive with SEK 5 million. Lower activity on both new leases and termination than a year ago, but most important, much better activity now than in the beginning of the year.

Positive signals for the fall, but as usual, no promises ahead. The number of discussions is higher, and the volume of possible new areas per tenant has also increased.

We also see signs of tenants who decreased their areas a few years ago. They're coming back and ask for additional areas, an upgrade that we like.

yes, they're willing to pay. It will be very interesting to see where this trend continues.

Here are some of the tenants that we have signed new leases with during Q2. The defense industry continues to be interesting with the lease with Saab Danmark at Sortemoset for the full property, and the MedTech sector is represented by Cantaria.

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 know that we have attractive products to offer.

When the market grows, which I will come back to, we will be a part of that growth on both the Swedish and Danish side of Öresund.

The list of 10 largest tenants in alphabetic order, strong customers. They contribute with 90% of rental income.

Seven out of 10 are governmental tenants. The public sector contributes with 22% of rental income.

Rental value as of 1st of July 2026 is SEK 5,167,000,000 per year plus 7.4%. Rental income, SEK 4,562,000,000 plus 6%.

Strong figures. This is an effect from acquisitions, indexation, but not least new projects and tenants willing to pay for the right quality.

we started the year with SEK 64,440,000,000. In accordance with the external valuation of 100% of our portfolio, we made acquisitions, which add on SEK 534,000,000, investment SEK 1,042,000,000, divestment minus SEK 4 million, changes in evaluation plus SEK 28 million.

Together with currency translations of SEK 212,000,000, that is summarized to a value of SEK 66,226,000,000. Valuation parameters are without changes since year-end included assumed indexation of 1%.

Very small changes in valuations. The growth comes mainly from investments and the transaction we made in Copenhagen.

Here is the long-term trend for portfolio growth from SEK 7 billion to SEK 66.2 billion in 21 years' time. Growth every year.

These figures, the running yield, show how we actually perform in relation to the valuation, so not the valuation yield. Some of the projects, Bläckhornet 1 in Malmö and Posthornet in Lund have moved from the project line to the running portfolio.

Even if they are not fully completed and occupied, that is the main reason for occupancy dropping one percentage point to 89%, excluding project and land.

With an operating surplus of SEK 3,389,000,000, that gives a running yield of 5.4%. Fully let, the portfolio would give a running yield of 6.3%.

In the office portfolio, the market value is SEK 53,241,000,000 with an occupancy rate of 89%, 88% in Malmö, 90% in Helsingborg, 88% in Lund, and 91% in Copenhagen. The operating surplus from offices summarized to SEK 2,809,000,000.

A running yield of 5.3%, 6.1% fully let. As mentioned, the occupancy in Malmö and Lund are affected by moving the project Bläckhornet and Posthornet from project line to the running portfolio.

In Helsingborg, the occupancy has strengthened. Most of all, the ongoing discussions in the office market have improved.

The logistic production portfolio has a value of SEK 9,378,000,000, 92% occupancy in Malmö, 82% in Helsingborg, 96% in Lund, and 99% in Copenhagen. In all, 87% occupancy with a running yield of 6.2%, 7.3% fully let.

The development of the total portfolio's running yield, 5.4% still brings stability, not least since the portfolio overall has a high quality and good locations. An increase of the running yield since 2021.

The vacancy has a negative impact. We aim to turn that around in line with improvements of the market.

What about the market? In the last report from Öresundsinstitutet, we can once again remind ourselves of Malmö as the driving city of employment growth in the Öresund region.

Malmö in yellow, Stockholm as the ruled gray line. Also interesting to see the pickup in Lund the last years, the green line.

We can also see that the number of unemployed decreases quicker from a higher level, though, and the number of newly started companies is also higher than elsewhere. As usual, it's most important to be in the right places.

Køge Station, a new bridge across Storstrømmen, and now four tracks with new platforms passing through Copenhagen Airport.

39% of the value is in Malmö, 22% in Helsingborg, 17% in Lund, and 22% in Copenhagen. The region continues to attract attention from investments, for example, Saab and SAS.

It will continue to be positive for the region, for Wihlborgs, and for Sweden.

we continue to improve our figures and have also got some international sustainability recognition, for example, being one of three Swedish property companies on TIME's list of world's most sustainable companies, which also includes business models and financial performance. We also got the approval for our updated science-based target.

Some figures showing improvement here. Maybe I'm most proud of the figure for low climate impact from our latest completed projects: 202 kilograms per square meter carbon dioxide equivalent.

Really low levels from successful projects, but more on that topic is in the report. Time for financials.

Over to you, Arvid.

Arvid Liepe

Thank you very much, Ulrika. If we look at the income statement for the second quarter isolated, we had rental income of SEK 1,174 million.

That's up 7%, corresponding to a SEK 77 million increase on the second quarter of 2025. I think it's important to highlight also that out of the increase of 77, 57 actually comes from renegotiations, new leases, and projects.

That is the core business showing growth, which is positive.

The operating surplus amounted to SEK 864 million, up 6%, representing a surplus ratio of 74%. The income from property management amounted to SEK 556 million, up 6%, and that includes transaction costs of about SEK 5 million stemming from the acquisition from Castellum, which Ulrika talked about earlier.

Both rental income and operating surplus and income from property management actually show record levels historically for Wihlborgs, which also, of course, is very satisfying. We had positive value changes in the quarter of +SEK 10 million, so very small, but still on the positive side.

Negative value changes of the derivatives, but all in all, a profit for the period of SEK 301 million.

Looking at the balance sheet, investment properties amounted to SEK 66.2 billion, up SEK 3.5 billion versus 12 months previously. Equity amounted to SEK 24.2 billion, up SEK 1.2 billion.

Loans or borrowings amounted to SEK 35.7 billion, up SEK 2.4 billion versus 12 months previously. On the next slide, we can see how that translates into key figures.

The equity ratio now stands at 35.4%. Leverage is at 53.9%.

Worth noting that the dividend that we paid in Q2 affects the LTV by approximately 1.5 percentage points. The interest cover ratio stands at 2.9 times.

We had with these ratios, a strong enough balance sheet to finance the acquisition from Castellum with debt without exceeding the limits that we've set for ourselves for certain key metrics or key ratios. Over time, leverage shall be brought down.

How and when remains to be seen, but we will continue to act in the best interest of both the company and our shareholders, of course.

Looking at the EPRA NRV, that stands at SEK 99.66 per share, up 9% versus 12 months previously, adjusted for paid dividend. On the next slide, you can see the historic development of EPRA NRV over this long time period since 2009.

We can actually still show an average growth of 15% on a yearly basis, adjusted for paid dividends. On the next slide, you can see our key financial ratios in the long-term perspective.

The graph starts year end 2011. Equity ratio well above the 30% threshold that we've set for ourselves.

LTV still before the acquisition, of course, well below the 60% threshold.

It's also worthwhile noting that although the interest cover ratio has varied a lot over this period, 2.9 times is a strong ratio, and I think it's also worth remembering that in 2022, 2023, when interest rates went up sharply, we still had a low point of the interest cover ratio of 2.5 times, which I think is still at a very healthy level. Looking at the next slide, you can see the historic development of the net debt to EBITDA, which now stands at 10.7 times, a level where we're quite comfortable.

Looking at our sources of financing as of end June, we have increased the portion of bond financing slightly over the quarter, now representing 20% of our borrowings. About a third comes from the Danish mortgage-credit system and a bit less than half of the borrowings from bilateral bank agreements.

It's worthwhile repeating that access to capital on attractive terms is still good, both from the banking system and from the bond market.

Look at the structure of our loan portfolio. You can see the details on this slide.

The average interest rate, excluding cost for credit agreements, is 3.25%. It's a very small change over the quarter.

The average fixed interest period is now 2.5 years, and the average loan maturity is 4.9 years. On the next slide, you can see the development over a 5-year period of the fixed interest period and loan maturities, and there is no drama in those two graphs, I would claim.

On the next slide, you can see our available funds. That is unutilized credit facilities as of end June, plus liquid funds.

We now have access to a bit over SEK 4 billion in unutilized facilities as of end June. That also, of course, is a good starting point for the second half of the year.

With that, I hand the word back to you, Ulrika.

Ulrika Hallengren

Thank you. An update on our investments in progress and a quick overview of one of our newest projects and one of our largest projects.

During the period, we have invested SEK 1.042 billion, and it remains SEK 1.608 billion to invest in approved projects. We continue to expect 6% or a bit above 6% yield on cost for new build offices and 7% or a bit above for industrial.

It's a good mix of refurbishment and new builds in the portfolio. This time just a short list of projects.

You can see more on that topic and investment possibilities in the last report from April.

We have a new project at Värtan Ett for a company in the automotive tech industry, just beside the project we have completed for Arm. We invest SEK 82 million and get a 7.4% yield on cost, including the value of the property, and a 13% yield excluding the value of the property.

Completion is in Q1 2027.

The large project at Amfiteatern 1 in Malmö for Malmö University is running well, in accordance with the plan. A bit above 20,000 sq m, 100% pre-let to Malmö University in a 10-year lease.

Investment, SEK 1.13 billion, and completion is planned for late Q4 2027. Discussions continue regarding a possible prolonging of the lease to 20 years.

With that, we summarize the quarter again. A number of new records.

Rental income up 7%, operating surplus +6%, income from property management +6%, and net letting positive. Most important is the list of ongoing discussions is good and at more positive levels ahead.

Also worth mentioning again that the rent levels continue to develop, especially on the Swedish side. Net debt to EBITDA at 10.7 times.

We continue to focus on our earnings in daily business, even if we from time to time also make good deals for future growth of our cash flow. With that, we are open for questions.

Operator

If you wish to ask a question, please dial #5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial #6 on your telephone keypad.

Speaker 3

Good morning, thank you for the presentation. I have a couple of questions, starting off with the SEK 13 billion acquisition.

First, the initial yield is 5%. Where do you see that yield going over the next two to three years?

Ulrika Hallengren

Our goal is, of course, to improve that in several ways. I think it's a good platform to start with, of course, we shall improve that.

I have no numbers on exactly how quick we can make changes. It's a good platform for the start.

Speaker 3

Okay, thank you. When it comes to the vacancy rate in the portfolio of 15%, do you have a view of what is a likely normalized vacancy rate over time for that portfolio?

Ulrika Hallengren

I think that's the same level as the market, around 7%-8% in a better market than today. Around that level.

Speaker 3

Okay. On LTV, on the ambition to reduce your LTV to 55% over the next two years, you also comment potentially on reducing LTV via divestment.

Can you give some flavor on what kind of assets you would be willing to sell if it's fully developed, certain geographies, pocket segments, et cetera?

Ulrika Hallengren

I think we have several possibilities in that, what will come first has not been decided yet. First, we wait for Konkurrensverket to make their approvals, we can take action after that.

We have possibilities in both different geographical areas and different segments, of course. We think it's good that we have several possibilities.

Speaker 3

Okay. I see.

What is your view on dividend distribution considering that LTV comes up quite close to your policy?

Arvid Liepe

We will, of course, take that decision in February in connection with the full-year report for 2026. Our dividend policy so far has always been to distribute approximately 50% of the income from property management, but applying full tax on the income from property management.

We will, of course, look at both the cash flow generation capacity, the future outlook, and what the valuations actually are at year-end before taking such a decision.

Speaker 3

Okay, thank you. A final question from me, and that is based on the occupancy rate on the signed leases and terminations that you know about today.

Do you expect the occupancy rate to improve or deteriorate over the next two quarters?

Ulrika Hallengren

I think that we should expect it to be quite flat, in a shorter perspective, and improve during 2027. Yeah.

Speaker 3

Okay. Yeah.

All right. Thank you.

Those were my questions.

Speaker 4

Good morning. Just some follow-up questions on the acquisition.

Just as it stands today, all things considered, what is your view on the best way to manage the balance sheet going forward?

Arvid Liepe

The best way to manage the balance sheet is to work, as we always do, very hard on improving our cash flow and our earnings. That's of course the starting point.

We have, of course, a number of tools in the toolbox as we've stated, and as Ulrika already talked about also when it comes to possible divestments. Other capital structure measures could, of course, be taken if the time is right and the market is right.

Speaker 4

You mentioned—

Arvid Liepe

Sorry?

Speaker 4

Yes, you mentioned the portfolio composition. Have you sort of identified any share of the portfolio or a specific segment or something like this that you would consider divesting?

Ulrika Hallengren

We have several possibilities with products and areas that are interesting in the market today. No decision is made on that.

It's good to have different kinds of possibilities.

Speaker 4

Yep. Good.

Just on central admin costs in the quarter. Roughly SEK 5 million is related to transactions, M&A, the remaining increase, what should we expect on an annual basis going forward?

Ulrika Hallengren

You should expect a bit higher than before. We have a bit higher costs on IT, regulations, and of course, higher levels of technical demands, but not any higher expenditures than we see now.

Speaker 4

Okay. Maybe one final question on the acquisition.

I understand you initially have some bridge financing. Could you comment on the initial terms and the structure you expect more long-term?

Arvid Liepe

I won't comment in detail on the exact terms of the bridge financing, but we've secured bridge financing for the full amount within an 18-month term. We have basically 18 months to put in place long-term financing, which can, of course, take different forms.

Speaker 4

Okay, thank you. That's all from me.

Speaker 5

Good morning. Can you hear me?

Arvid Liepe

Yes.

Ulrika Hallengren

Yes.

Speaker 5

Okay, thank you. I didn't get a notification, so I didn't know that it was my turn.

My apologies. I just want to follow up on the acquisition.

You mentioned that you believe that this portfolio yields about the same as Wihlborgs today, but if I look at what you're yielding, at least in Sweden, it seems to be a bit above 5%, whereas this portfolio is around 5%. Obviously, there are differences in occupancy.

When you state that it's about the same in terms of yield, how do you come up with that? Could you give us a little bit more information as to how you view this portfolio versus your own?

Ulrika Hallengren

The 5% on the portfolio in the acquisition is including all admin costs as well, and that is in line with the Swedish portfolio.

Speaker 5

Okay. It's including admin, and that's the difference, basically, towards what you usually report yourselves.

Yeah, okay.

Ulrika Hallengren

Yeah.

Speaker 5

All right, good. Regarding potential divestments, you mentioned that you need to wait, obviously, for the Swedish Competition Authority in order to finalize the acquisition.

Could you consider doing divestments before year-end that are not related to that from the existing portfolio?

Arvid Liepe

We always look at the structure of the portfolio. It's part of the day-to-day work to look at both acquisitions and divestments and try over time to optimize the composition of our total portfolio.

That cannot be ruled out.

Speaker 5

Basically the way that we should look at it is that your efforts to lower LTV over time, obviously, a large part of that is operational. In terms of divestments, you could make divestments before year-end, for example, in order to achieve this, even before you've completed the transaction.

Ulrika Hallengren

Absolutely possible.

Speaker 5

All right. Thank you.

Again on these assets, I assume that you know these assets quite well. It's been a competitor of yours for, I don't know, 20 years.

How do you feel the quality of these assets versus the ones you own now? Do you believe that this has been really strong competition versus your tenants, or do you feel that competition in the market is such that this doesn't really move the needle, or do you think you get clearly a stronger hold on some of these areas compared to what you have today?

Ulrika Hallengren

I would say that I think the quality is good. Very much in line with what we have today.

Modern offices, good location. The area for industrial and logistics is a perfect match.

I think that on that side, it's very compatible. Maybe Wihlborgs has been a bit more active in the market and thereby more successful in doing business.

I think that is what we first of all will add to this portfolio.

We also know that when we have many tenants that have changing needs, we can do this puzzle, moving tenants around. With a larger volume of possibilities, a greater menu of different things that our tenants can choose from, the fitting will be even better.

We have been very successful in doing these things, and I think this will be great also for our tenants ahead.

Speaker 5

Okay. Could you say something about how much of the portfolio that you're acquiring is related to land or projects in terms of size?

You mentioned that there are project opportunities, but in another phrasing, how much is non-yielding other than the vacancy in the buildings in terms of the total portfolio today?

Ulrika Hallengren

The largest project possibilities are the two properties in Lund that were on the map, in a very good location and have project possibilities. Then there are another number of project possibilities, but more adding on to already existing buildings.

Speaker 5

There's one larger ongoing project.

Ulrika Hallengren

Yes.

Speaker 5

In Malmö?

Ulrika Hallengren

Correct. A logistics project with no tenants today.

Speaker 5

Okay. In Lund, what's the size of that land bank in terms of the projects?

Ulrika Hallengren’

Oh, I don't have the square meters on that. Roughly around 10,000 square meters, I would say.

Speaker 5

Okay. No, that's fine.

My final question is regarding your comments on sort of the activity in the market and net letting. You're stating that you've witnessed increased activity in general from tenants, obviously, that could be a positive, I guess it could be a negative as well.

In terms of your net letting for the rest of the year, by stating that you see increased activity, does that mean that you expect net letting to be positive as well? Is it sort of a positive trend, or do you run the risk of tenants actually terminating to a larger extent as well?

Ulrika Hallengren

I would say that the number of larger leases that we thought were possible terminations that we have seen the last years, where the volume has been quite high on moving around and having new needs, I think that has slowed down. What we see now on higher activity is definitely new leases.

The volume is much better ahead. Also let's remember that the start of the year was very poor.

Now the list of ongoing discussions is much better, both in Sweden and Denmark. I'm actually quite positive ahead for signing new leases.

You never know ahead where the market is going. Definitely more activity and really good discussions.

Speaker 5

Okay. Thank you.

Those were my questions.

Operator

Thank you. As a reminder, if you wish to ask a question, please dial pound-key five on your telephone keypad.

There are no more questions at this time, I hand the conference back to the speakers for any written questions and closing comments.

Ulrika Hallengren

Bye.

Arvid Liepe

There are no questions coming in via the email function.

Ulrika Hallengren

Okay. By that, thank you for today, and you're always welcome to come back with questions and yeah.

Arvid Liepe

We wish you all a nice summer.

Ulrika Hallengren

Absolutely.

Arvid Liepe

Okay.

Ulrika Hallengren

Bye.

Arvid Liepe

Bye.