KUNGSLEDEN SECOND QUARTER EARNINGS REPORT AND NEW SHARE ISSUE 15 Augusti 2014 Biljana Pehrsson, CEO Anders Kvist, Deputy CEO, CFO

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IMPORTANT INFORMATION

■ This material is not an offer regarding shares or other securities issued by Kungsleden AB (“Kungsleden”).

■ This material may not be distributed in or into Australia, Hong Kong, Japan, Canada, Singapore, South Africa, the United States or in any other jurisdiction where such action is wholly or partially subject to legal restrictions, or would require additional prospectuses, registration or other measures than those required by Swedish law. Nor may the information in this material be forwarded or reproduced in a manner that contravenes such restrictions or gives cause to such requirements.

■ No securities issued by Kungsleden have been or will be registered under the United States Securities Act of 1933, as amended (“Securities Act”) and may not be offered, sold or otherwise transferred, directly or indirectly, in or into the United States except under an available exemption from, or in a transaction not subject to, the registration requirements under the Securities Act. No public offering will be made in the United States.

■ This material may contain certain forward-looking statements that reflect Kungsleden’s current views on future events as well as financial and operational performance. Words such as “intend”, “assess”, “expect”, “may”, “plan”, “believe”, “estimate” and other expressions entailing indications or predictions of future development or trends, and which are not based on historical facts, constitute forward-looking statements. Forward-looking statements inherently involve both known and unknown risks and uncertainties as they depend on future events and circumstances. Forward-looking statements information is not a guarantee of future results or performance, and the actual outcome may differ materially from the information set forth in the forward-looking statements.

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New share issue Second quarter summary Financial performance and key figures Business plan with growth targets Outlook

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■ The Board of Directors has decided to carry out a new share issue of approximately SEK 1.5 billion with preferential rights for the current shareholders.

■ The new share issue is aimed at creating greater financial flexibility to implement

Kungsleden’s new strategy and business plan.

■ The company's goal is to achieve an attractive total return, and the ambition is to grow its property portfolio to about SEK 30 billion over time.

■ The capital from the new share issue will be used for real estate investments and to expand the real estate portfolio to approximately SEK 25 billion.

■ The target is to achieve a profit before tax of SEK 1-1.2 billion by 2017.

■ Shareholders representing approximately 17 percent of the shares in Kungsleden, including Gösta Welandson, Olle Florén and the Second AP Fund, have announced that they are positive towards the new issue with preferential rights and have expressed their intention to vote in favor of the proposal during the extraordinary general meeting and subscribe for shares corresponding to their pro rate share of the new share issue.

New share issue of approx. SEK 1.5 billion and a profit before tax target of SEK 1-1.2 billion by 2017

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Preliminary time plan 2014

12 September Complete terms and conditions, including the subscription price and subscription ratio determined by the BoD are made public 16 September Extraordinary general meeting to approve new share issue 16 September Last trading day for the share including the right to participate in the new share issue 17 September First trading day without the right to participate in the new share issue 19 September Record date, shareholders registered in the share register on this date will receive subscription rights that entitles them to participate in the new share issue 19 September Estimated date for publication of the prospectus 23 Sep – 3 Oct Trading period for subscription rights 23 Sep – 8 Oct Subscription period 13 October Announcement of preliminary outcome of the new share issue

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Second quarter summary

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Second quarter summary

■ Refinement of Kungsleden’s property portfolio accelerated. During and after the second quarter, properties were divested for SEK 1.7 billion. The year’s divestments thus far total just over SEK 2.2 billion with a total profit of approximately SEK 190 million.

■ A continued focus on active management. Gross profit increased by 35 per cent and profits from property management increased by 62 per cent to SEK 215 million.

■ A successful refinancing of the company’s syndicated bank credit of SEK 4.5 billion was executed. The average interest rate was reduced to 5.1 per cent, compared to 5.4 per cent on 31 March (5.8 per cent at the beginning of the year).

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The second quarter in figures

■ Net sales increased to SEK 691 million (564) and gross profit rose to SEK 423 million (313).

■ Profits from property management improved to SEK 215 million (133), corresponding to SEK 1.58 (0.98) per share.

■ Profit before tax, excluding fair value changes of financial instruments improved to SEK 427 million (136).

■ Realized and unrealized changes in property values amounted to SEK 212 million (3).

■ Unrealized changes in value of financial instruments amounted to SEK -125 million (196).

■ Profit/loss for the period amounted to SEK -1,465 million (261), corresponding to SEK -10.73 (1.91) per share.

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Financial performance and key figures

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INCOME STATEMENT, 6 MONTHS 2014 2013SEK m Jan - Jun Jan - Jun ΔRental revenue - properties 1 247 921 326Rental revenue - modular buildings 151 130 21Net sales 1 398 1 051 347Property costs - property -426 -339 -87Property costs - modular buildings -141 -118 -23Gross profit/loss 831 594 237Selling and administrative costs -69 -84 15Net financial items -352 -289 -63Profits from property management 410 221 189Gains/losses on properties

Profit/loss on property sales 65 4 61Unrealised gains/losses 167 -18 185

Unrealised gains/losses financial instruments -249 361 -610Profit (loss) before tax 393 568 -175Tax -1 790 -123 -1667Profit /loss for the period from continuing operations -1 397 445 -1842Discountinued operations, profit/loss from Hemsö holding 0 24 -24Profit/loss for the period -1 397 469 -1866

Income statement 1 January – 30 June 2014

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Interest coverage ratio 2.7x (1.9)

Equity/asset ratio 30.8% (37.3). Adjusted for

completed, but not vacated divestments: 32.4%

Loan/value 60.3% (57.2)

SEKm 30 jun -14 31 dec -13ASSETSGoodwill 172 201Investment properties - properties 19,972 20,339Investment properties - modular buildings 1,512 1,509Property used in business operations 24 22Equipment 14 15Deferred tax receivable - 35Other non-current receivables 11 239Total non-current assets 21,703 22,359

Inventories 14 15Current receivables 214 272Cash and bank balances 433 323Total current assets 660 610

Total assets 22,364 22,968

SHAREHOLDERS EQUITY AND LIABILITIESShareholders equity 6,888 8,453

Interest-bearing liabilitiesLiabilities to credit institutions 11,278 10,579Bond loans (unsecured) 1,699 2,299Interest-bearing liabilities 12,978 12,879

Non interest-bearing liabilitiesProvisions 14 60Deferred tax liability 114 -Derivatives 956 708Income tax liability 463 -Other non interest-bearing liabilities 951 869Non interest-bearing liabilities 2,498 1,637

TOTAL SHAREHOLDERS EQUITY AND LIABILITIES 22,364 22,968

Statement of financial position

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Available liquidity (cash balance and non utilized credit facilities) as per 30 June 2014: SEK 1,973 million

Tax issues

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Nordic Modular

Flexator, production

Temporent modulbyggnad

H1-14 H1-13

Area, Sqm 235 000 231 000

Book value modular buildings, SEK m 1,512 1,509

Rental revenues, SEK m 130 131

Operating net, SEK m 73 76

Occupancy rate, % 76.9 80.3

Yield, % 10.3 11.3

Revenues, SEK m 151 130

Gross profit, SEK m 9 12

Process initiated to divest Nordic Modular

EBITDA (Q2-14) 93Mkr (102)

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■ The loan portfolio amounted to SEK 12,978 million at the end of the quarter, compared with SEK 12,557 million at the beginning of the quarter.

■ Successful refinancing of the company’s syndicated bank credit of SEK 4.5 billion.

■ The average interest rate was reduced to 5.1 per cent , compared to 5.4 per cent at the end of the first quarter (5.8 per cent at the beginning of the year).

■ The average maturity of Kungsleden's entire loan portfolio, including unutilized credit facilities, was extended to 3.1 years from 1.7 years as of 30 June.

More favorable financing terms

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Business plan with growth targets Outlook

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Kungsleden’s strategy and long term targets

■ Concentration to regions with good economic growth and local demand Focus on the customers needs Attractive locations in local markets with good accessibility Concentration to less than 70 locations in the medium term Efficient management of clusters in each sector

■ Three segments of commercial space Offices Industrial and warehouses Retail

■ Quality and size Modern and effective properties Stable earnings Aim to grow the property portfolio to around SEK 30 billion over

time and to significantly increase the profits from property management

To be Sweden’s most profitable and successful real estate company

Kungsleden shall be present where the local

demand is

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Optimization targets of the property portfolio in 2014 Divestment of non-strategic properties from the "old" portfolio (book value SEK 1.1 billion). Divestment of non-strategic properties from the "GE" portfolio (book value SEK 0.9 billion). Concentration through the divestment of real estate in smaller cities or in cities with single properties. Aims to divest properties amounting to SEK 1-1.5 billion and acquire strategic properties for SEK 1.5 billion.

Transactions and investments during the first half of 2014 Divestment of 58 properties for SEK 2.2 billion with profit exceeding SEK 190 million, of which

- Divested from the non-strategic, "old" portfolio (book value SEK 0.5 billion)

- Divested from the non-strategic, “GE" portfolio (book value SEK 0,7 billion)

- Portfolio optimization, (book value SEK 0.8 billion) Investments in existing properties, SEK 150 million. Acquisition of two properties in Malmö for SEK 66 million at a yield of 8%

Improved structure of the real property portfolio over 12 months

The share of properties located in the three metropolitan areas has increased from 29% to 45%. The percentage of offices has increased from 39% to 50% while the share of industrial /warehouse properties

has decreased from 42% to 35%. The Stockholm region has grown from the smallest to the largest region. Economies of scale in management have been achieved with better geographic concentration – number of

municipalities reduced from 110 to 95.

Optimization of the property portfolio

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Danderyd Kontor 100 000 sqm office space 4.3 % vacancy rate 1,600 – 1,900 SEK/sqm

Effective from both customer and management perspective Concentration to regions with good economic growth and

local demand for premises Tenants with changing needs can be offered new efficient

alternatives More efficient management and lower operating costs Local presence and knowledge provides lower vacancies in

the long term Clustered activities in order to increase the attractiveness

of the area: marketing, strategic investments for better service and supply, etc.

Close dialogue with the municipality and other community stakeholders

Examples of clusters:

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Identified acquisition- and investment opportunities ■ Kungsleden's strategy is to acquire properties in identified micro locations, primarily in

Stockholm, Gothenburg and Malmö/Lund as well as selected regional centers by: - single property acquisitions, - acquisitions of real property portfolios, - acquisitions of municipal real property, - acquisitions of strategic portfolios/real estate companies, and by - Investments in development projects

■ Strategic acquisition opportunities of approximately SEK 3-4 billion have been identified.

■ 18 micro locations with growth potential in terms of rental levels and yields with an average total return rate of 9% or higher have been identified.

■ Approximately 20 development projects within the existing portfolio, with a total investment volume of SEK 0.5-1 billion and a total return rate of at least 9% have been identified.

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■ Favorable market conditions - Improved demand for premises in Kungsleden's segments and markets. - Cautiously optimistic rental market. - Opportunities to enhance the earning capacity of the existing portfolio. - Opportunity to acquire good properties with a yield of around 7% and with a low cost of funding

(large yield spread).

■ Continued implementation of Kungsleden's new strategy - Active management. - Build project portfolio. - Refinement and optimization of the current property portfolio. - Acquire strategic properties with high expected total return. - Build effective clusters. - Favorable acquisition opportunities presently that fit well with Kungsleden's long term strategy.

Outlook for the second half of 2014 and onwards

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■ New share issue creates financial conditions to reach at least half way of the long term growth target of a property portfolio amounting to SEK 30 billion.

■ Balanced financial growth - Equity/assets ratio not below 30%

- Continued cost control

- Return on equity of 10-12%,

- Dividends of 50% on profits from property management in the medium term

■ New profit target: to achieve a profit before tax of SEK 1-1.2 billion by 2017

Outlook for the second half of 2014 and onwards

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Questions