Welcome to Kungsleden. Chief Executive Thomas Erséus Deputy Chief Executive Johan Risberg 21...

Welcome to Kungsleden

Chief Executive Thomas ErséusDeputy Chief Executive Johan Risberg

21 October 2010

Kungsleden in brief

■ Owns and manages properties generating high and stable long-term returns– Returns more important than property type and location– Returns cannot be judged without considering risk levels

■ 559 properties reported at SEK 21.8 (21.9) bn as of 30 September 2010 – Commercial properties 43% (46)– Public properties 43% (39)– Modular buildings 7% (7)– Retirement homes Germany 7% (8)

■ 24,700 shareholders. 45% of shares held by private individuals and approximately a quarter by foreign shareholders.– Ten largest shareholders control 19.1% of capital and votes

Profit for calculating dividends

2010 2009

SEK m Jan-Sep Jan-Sep

Gross profit 1,160 1,398

Sales and administration costs -191 -210

Net financial position -555 -650

Sub-total 414 538

Realised items

Trading net at divestment 12 -126

Realised value changes, properties 2 1,171

Realised value changes, financial instruments -4 -167

Sub-total 10 878

Taxes payable -45 -400

Profit for calculating dividends 379 1,016

Third quarter in brief

■ Profit for the period generally stable

■ Acquisition of 12 properties for a value of SEK 839 m and a property yield of 7.5%

■ Divestment of 41 properties for SEK 1,028 m and a property yield of 6.5%

■ Rental revenues remain stable despite increased vacancies in six commercial properties.

■ Average fixed-interest term extended from 2.6 to 5.2 years

Customers and lettings

■ New tenants include Mechanum, Isringhausen and Fraktkompaniet

■ New lettings with annual rental value of SEK 53 m

■ Vacancies mainly concentrated on six commercial premises in Burlöv, Kungsbacka, Botkyrka, Sollentuna, Gävle and Umeå

■ Average vacancy of 8.7% for the group (6.2) and 7.0%, excl. the above properties

■ Project Manager hired, upscaled marketing, addressing municipalities, considering potential partnerships, tenant adaptations or conversions

■ Generally positive momentum in letting operations

Current market conditions

■ Kungsleden’s lettings market– Generally stable lettings– Slight increase in vacancies from low levels

■ Financial market– Continued easing on credit market– Strong capital flows to the property sector– Alternative funding sources attractive

■ Transaction market– Recovery with surprisingly high volumes– Continued firm competition over properties– Clearer trend of price increases on properties

Property portfolio

Our properties—by type

Kungsleden’s Q3 2010 in figures

Income Statement

SEK m 2010

Jan-Sept2009

Jan-Sept

Rental revenues 1,577 1,841

Sales revenues, modular buildings 128 174

Net sales 1,705 2,015


Trading net 12 -126



Unrealised value changes -20 -103

Profit before tax 405 309

Tax -88 30

Profit after tax for the period 317 339

Income Statement

SEK m 2010

Jan-Sept2009

Jan-Sept



Net sales 1,705 2,015


Trading net 12 -126





Tax -88 30


• Reduction due to part-sale of Public Properties and negative rental indexation for 2010.

• Rental revenues reduced by 2% in like-for-like terms.

• Reduction due to part-sale of Public Properties and negative rental indexation for 2010.

• Rental revenues reduced by 2% in like-for-like terms.

Income Statement

SEK m 2010

Jan-Sept2009

Jan-Sept



Net sales 1,705 2,015


Trading net 12 -126





Tax -88 30


• Reduced demand due to recession

• Reduced demand due to recession

Income Statement

SEK m 2010

Jan-Sept2009

Jan-Sept



Net sales 1,705 2,015


Trading net 12 -126





Tax -88 30


• Down 17%, or 5% excluding Hemsö transaction.

• Indexation and higher snow clearance and heating costs the main reason

• Down 17%, or 5% excluding Hemsö transaction.

• Indexation and higher snow clearance and heating costs the main reason

Income Statement

SEK m 2010

Jan-Sept2009

Jan-Sept



Net sales 1,705 2,015


Trading net 12 -126





Tax -88 30


• Sales price above book value.

• Sales price above book value.

Income Statement

SEK m 2010

Jan-Sept2009

Jan-Sept



Net sales 1,705 2,015


Trading net 12 -126





Tax -88 30


• Lower admin. mainly because of part-sale to AP3

• Lower admin. mainly because of part-sale to AP3

Income Statement

SEK m 2010

Jan-Sept2009

Jan-Sept



Net sales 1,705 2,015


Trading net 12 -126





Tax -88 30


• Positive change mainly explained by lower loan volume in 2010.

• Positive change mainly explained by lower loan volume in 2010.

Income Statement

SEK m 2010

Jan-Sept2009

Jan-Sept



Net sales 1,705 2,015


Trading net 12 -126





Tax -88 30


• Positive value change on properties of SEK 106 m, or 0.5% of book value.

• Negative value change on financial instruments of SEK -127 m, due to falling long yields.

• Positive value change on properties of SEK 106 m, or 0.5% of book value.

• Negative value change on financial instruments of SEK -127 m, due to falling long yields.

Income Statement

SEK m 2010

Jan-Sept2009

Jan-Sept



Net sales 1,705 2,015


Trading net 12 -126





Tax -88 30


• Includes positive effect of property divestments.

• Includes positive effect of property divestments.

Income Statement

SEK m 2010

Jan-Sept2009

Jan-Sept



Net sales 1,705 2,015


Trading net 12 -126





Tax -88 30


• Lower figure mainly due to a smaller portfolio after divestments over the past year.

• Lower figure mainly due to a smaller portfolio after divestments over the past year.

Balance Sheet

SEK m 2010 2009

Assets 30 Sep 31 Dec

Goodwill 201 193

Properties 21,800 21,860

Receivables, etc. 1,701 1,466

Cash and cash equivalents 636 689

Total assets 24,338 24,208

Equity and liabilities

Equity 6,818 7,079

Interest-bearing liabilities 13,898 14,437

Non-interest-bearing liabilities 3,622 2,692

Total equity and liabilities 24,338 24,208

Maturity structure, interest fixings

As of 30 September 2010Loan, SEK

m

Interest derivatives,

SEK mAve.

interest, %Average fixed interest

term, years

2010 13,888

2011 – –

2012 400 4.4

2013 3,800 4.1

2014 2,100 4.2

2015 3,600 4.2

2016 1,000 4.3

2017 300 4.5

2018 3,550 4.3

Total derivatives 14,750 5.2

Total loans 13,888 5.2

Market value of loans and derivatives 1,275

Total 15,163

Maturity structure, credits (including un-utilised credit facilities)As of 30 September 2010

Utilised credits, SEK

m Un-utilised

credits, SEK mTotal

credits, SEK m

2010 580 310 890

2011 1,503 344 1,846

2012 8,607 3,300 11,907

2013 2,166 2,166

2015 399 399

2018 633 633

Total 13,888 3,954 17,841

Average conversion term, years 2.2 2.0

Equity ratio30 Sep 10

28%31 Dec 09

29% 30 Sep 09

30%

Mortgage ratio 64 66 64

Underlying profits, 2000-Q3 2010

10 largest shareholders (% of votes & capital)

■ Nordea fonder 3.3■ Länsförsäkringar fonder 2.8■ SHB fonder 2.3■ Olle Florén and companies 2.3■ Norwegian Government 1.9■ Danske Invest fonder (Sweden) 1.4■ AP4 1.4■ Swedbank Robur Fonder 1.3■ AP2 1.3■ Avanza Pension Försäkring AB 1.1

19.1

Source: SIS Ägarservice

Focus for the remainder of 2010

■ Focus on cash flow, enhancing the portfolio and long agreements■ Measures ongoing in a limited number of properties with somewhat

higher vacancy levels■ Financial room to act—broader base of alternative funding sources■ Work on creating a standalone Hemsö continues as planned■ Sharp increase in activity and interest in properties should benefit

Kungsleden

The share to end of October 2010

Total yield to end of October 2010

Any questions?

Welcome to Kungsleden. Chief Executive Thomas Erséus Deputy Chief Executive Johan Risberg 21...

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