Quarterly Report • Apr 26, 2021
Quarterly Report
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2021 2020 2020
| Jan-Mar Jan-Mar Jan-Dec | |||
|---|---|---|---|
| Rental income | 707 | 711 | 2,806 |
| Net operating income | 506 | 520 | 2,112 |
| Profit from property management | 346 | 369 | 1,474 |
| Profit before tax | 1,094 | 1,979 | 4,007 |
| Profit after tax | 863 | 1,574 | 3,167 |
| Net lettings | 36 | 15 | -45 |
| Surplus ratio,% | 72 | 73 | 75 |
| Loan-to-value ratio, properties, % |
35 | 32 | 35 |
| EPRA NRV, SEK per share | 154 | 152 | 155 |
¹ The comparison figures for income and expense items relate to values for the January–March 2020 period and for balance sheet items on 31 December 2020.
² For key performance indicator definitions, see page 23.
Profit after tax for the period was SEK 863m (1,574), corresponding to earnings per share of SEK 2.64 (4.78).
Net lettings in the fourth quarter totalled SEK 36m (15).
Target: SEK 2,500m per year over a business cycle
SURPLUS RATIO
Target: 75%
Despite a continued high spread of infection and continuing restrictions, the beginning of the year has been better than feared and many companies are reporting a good start to 2021. Of course there are sectors, such as hotels, restaurants and the experience industry that have faced an extremely difficult time. The start of the vaccine roll out and continued powerful stimulus measures have created the potential for a rapid recovery once the pandemic releases its grip on the global economy.
We are starting to see light at the end of the tunnel. Meanwhile, the extreme support policies will leave high public debt burdens in their wake and many question marks regarding inflation and interest rates. Rising long-term interest rates, particularly in the US, and sluggish vaccine deliveries were also a cause for concern during the quarter. The best assessment in this turbulent and slightly unreal situation is that in 2021 we will see a continued recovery of the global economy and stable inflation.
In connection with the pandemic, we have recognised SEK 5m in provisions and rebates. This together with properties being vacated for projects, was the main reason that rental income in an identical portfolio decreased by 1 per cent. The relatively cold and snowy winter has reduced net operating income and the surplus ratio was 72 per cent.
The letting market was relatively cautious early in the year, but became increasingly active during the quarter, primarily in line with the start of the vaccination programme. The number of viewings for potential tenants increased significantly during March. In January, we completed a major letting to Convendum on Kungsgatan in central Stockholm, which contributed to positive net lettings of SEK 37m during the quarter. Meanwhile, at the end of March, we saw that some companies with which renegotiations have been initiated are opting to terminate leases for further negotiation. The renegotiations completed during the quarter resulted in an increase in rents of 12 per cent. The completed new lettings have been at rent levels that are well in line with what we saw before the pandemic. Our vacancy rate in the investment property portfolio increased during 2020. We have strengthened our lettings team and a high level of activity is currently focused on reducing the vacancy rate. Meanwhile, the work with larger lettings is still taking longer than we have been used to for many years. However, most of the initiated discussions are continuing in a positive spirit.
The transaction market has continued to be strong in early 2021. However, there have been relatively few transactions for offices in our areas, but those completed are at very good levels.
NET LETTINGS
Target: SEK 80m per year
During the year, we signed two land allocation agreements with Solna Municipality and Huddinge Municipality, respectively. Both agreements strengthen and complement our, pre-existing, large and attractive development rights portfolio in the Stockholm area, totalling more than 1 million square metres, of which almost half relate to housing development rights. Construction is currently underway of almost 500 apartments in the joint venture companies we are running in Solna. During the quarter, we established a new position with responsibility for the strategy for our housing development rights in order to also optimise our value creation from these rights. It is important for us at Fabege that with our focus on urban development in Stockholm and on offices in particular, to have knowledge of and work with the opportunities we are creating in housing, nursing and healthcare, education etc.
One of the most common questions during the past year is naturally how the offices of the future will be designed. The driving forces that we have as a basis for working with our customers are:
All of this and much more must exist in order to create the offices and meeting places of the future that meet new behaviours and needs. Our belief that we will see more remote working, less business travel and more digital meetings has grown
stronger and is not unique. We have to continually develop in order to meet our customers' needs. Meanwhile, we must, with humility, safeguard the strengths of our business model and our values that extend far beyond the pandemic. How we deliver; business-oriented, with agility and close to customers is just as important as what we deliver. Dialogue and collaboration with our customers is more important than ever. All to create the offices that help to develop companies, in order to build culture and togetherness and to have efficient and inspiring work and meeting areas.
We work according to a long-term, target-based and integrated approach in order to create more sustainable properties and cities. We are continually raising the bar for what we can and must do. Now our overriding long-term goal is to have zero net emissions from our property management operations by 2030 and to halve our carbon footprint in our project development work. It is also important that we as a major property owner contribute to creating greater security and wellbeing in our main areas through various initiatives. Among other ways, this occurs by trying to contribute to improved education, leisure activities and job opportunities.
Fabege has a strong balance sheet, a stable customer base, a good property portfolio in great locations and many development opportunities. During the quarter, we also utilised this strength to repurchase almost 3 million shares. All with the ambition of creating additional shareholder value.
Stefan Dahlbo, CEO
During the first quarter, Fabege and Huddinge Municipality signed an agreement on land allocations in the Flemingsbergsdalen area. The area covers around 220,000 sqm, of which 190,000 sqm is for commercial premises and 30,000 sqm for housing.
• Around 5,300 lunches were donated to Stadsmissionen in Stockholm during the period January to April.
The majority of Fabege's customers are large, stable companies. Some customers, mainly in the service sector, have asked for postponements and discounts due to the pandemic. All such assessments are made on an individual basis with a focus on transition to monthly payments and postponements with repayment. Discounts and provisions related to the pandemic during the first quarter of the year amounted to SEK 5 million, which has reduced the rental income for the period. We estimate that some of our customers will still need support in the second quarter of 2021. Rental discussions are taking longer and
we have noticed that a few clients have requested less floorspace during renegotiations. Net lettings have not met our expectations but we are confident that we will not see structural vacancies in our modern properties in attractive locations. Rental levels in the Stockholm market are stable.
Access to finance is good both in the capital market and via banks. Refinancing of bank debt is going according to plan and we have been active in both the commercial paper and bond markets during the first quarter. Fabege has good financial preparedness. Unutilised credit facilities amounted on 31 March 2021 to SEK 3.9bn.
Fabege is a strong brand, both with the banks and on the capital market, and our strategy of allocating financing across several different sources, spreading refinancing over time and relying exclusively on green financing is a strength.
All our projects are proceeding according to schedule. Property values
The property portfolio is valued on the basis of a well-established process. After having a large proportion of properties independently valued several times in 2020, we have now returned to normal procedures, where around 25-30% of the portfolio is independently valued each quarter. We do not see any noticeable effects on property values as a result of the pandemic.
All employees continue to work from home to the greatest extent possible. Technical operations have been divided into teams working in shifts, with the aim being to reduce the risk of spreading infection. Meetings and collaboration are largely taking place digitally and we are providing various forms of support to make it easier for employees to work from home. We conduct regular temperature measurements among employees. The latest information shows that our employees are healthy, and that working from home works well, but that we miss meeting each other in the office.
As for so many other companies, the coronavirus pandemic is having a negative impact on the business, albeit to a limited extent for Fabege. Our stable financial position provides reassurance and a firm foundation.
Profit after tax for the period was SEK 863m (1,574), corresponding to earnings per share of SEK 2.64 (4.78). Profit before tax for the period amounted to SEK 1,094m (1,979). Slightly lower earnings from property management and lower changes in value meant that profit before tax declined in comparison with the same period in the previous year.
Rental income totalled SEK 707m (711) and net operating income amounted to SEK 506m (520). In an identical portfolio, rental income decreased by approximately - 1 per cent (6), mainly due to Glädjen 12 being vacant for project development and a provision of SEK 5 million for bad debts related to the pandemic. The increase in property costs mainly related to winter costs such as heating and snow removal. Net operating income in an identical portfolio decreased by approximately 4 per cent (+9). The surplus ratio was 72 per cent (73). The increase in central administration was attributable to one-off costs for Fabege's new head office.
Net interest items amounted to SEK -118m (111). The increase was mainly due to a higher volume of loans. Ground rent amounted to SEK -9m (-6). The share in profit of associated companies was SEK −1m (−11) and related to the period's capital contribution to Arenabolaget.
Unrealised changes in the value of properties amounted to SEK 514m (1,829). The unrealised change in the value of the investment portfolio of SEK 402m (1,687) was mainly due to improved cash flows and lower yield requirements. The average yield requirement declined by 0.02 percentage points to 3.86 per cent (3.88).
The project portfolio contributed to an unrealised change in value of SEK 112m (141), primarily due to development gains in the major project properties.
Unrealised changes in value in the derivatives portfolio totalled SEK 234m (-243).
The Property Management segment generated net operating income of SEK 496m (518), representing a surplus ratio of 75 per cent (75). The occupancy rate was 92 per cent (94). Profit from property management totalled SEK 357m (384).
Unrealised changes in the value of properties amounted to SEK 402m (1,687). The Property Development segment generated net operating income of SEK 9m (2), giving a surplus ratio of 20 per cent (12). Profit from property management totalled SEK -12m (-15). Unrealised changes in the value of properties amounted to SEK 112m (142).
Earnings from transactions totalled SEK 0m (25).
The tax expense for the period amounted to SEK −231m (-405). Tax was calculated at a rate of 20.6 per cent on taxable earnings. The interest deduction limitations are not expected to have a material effect on taxes paid in the current year.
Equity at the end of the period amounted to SEK 40,882m (41,542) and the equity ratio was 51 per cent (52). The dividend decided by the Annual General Meeting reduced the equity. Equity per share attributable to Parent Company shareholders totalled SEK 126 (126). EPRA NRV was SEK 154 per share (144).
Cash flow from operating activities before changes in working capital amounted to SEK 335m (395). Changes in working capital had an impact on cash flow of SEK 91m (3). Investment activities had an impact on cash flow of SEK -452m (3,014), while cash flow from financing activities amounted to SEK 293m (-3,241). In investment activities, cash flow is driven by property transactions and projects. Overall, cash and cash equivalents increased by SEK 267m (171) during the period.
Fabege employs long-term credit facilities subject to fixed terms and conditions. The company's creditors mainly comprise the major Nordic banks and investors on the capital market.
BREAKDOWN OF SOURCES OF FINANCING
The company is striving to achieve a balance between different forms of financing on both the capital and banking markets, with long-term relationships with the major financiers having high priority.
Fabege has a firm belief in the ability of the financial market to contribute to a more sustainable society, and is keen to play an active part in its transition towards greater accountability. At the end of last year, the target of 100 per cent green financing was reached, and the opportunities to take the next step towards increasingly sustainable financing are being actively monitored.
Fabege's fixed-rate period at the end of the quarter was 3.9 years. The derivatives portfolio comprised interest rate swaps totalling SEK 17,150m with terms of maturity extending through 2030 and carrying fixed interest at annual rates of between –0.18 and 1.35 per cent before margins.
2021-03-31 2020-12-31 Interest-bearing liabilities, SEKm 27,321 26,669 of which outstandning MTN, SEKm 8,943 7,950 of which outstandning SFF, SEKm 1,524 1,524 of which outstandning commercial paper , SEKm 1,925 2,025 Unutiluzed facilities, SEKm 3,935 3,867 Capital maturity, year 5.0 5.2 Fixed-rate period, year 3.9 4.1 Fixed-rate, share of the portfolio,% 73 74 Derivative market value, SEKm -362 -597 Average interest, inclu. facilities, % 1.75 1.77 Average interest excl. facilities, % 1.66 1.67 Unsecured assets, % 38.9 36.5 Loan-to-value, % 35.0 34.8
The capital markets continue to be affected by the current pandemic situation. With great hopes regarding upcoming vaccinations, the first quarter offered a number of opportunities for bond issues at attractive price levels in line with the prepandemic situation, and strong demand, especially for green bonds. This was confirmed in the case of Fabege by a successful issue of SEK 700m at the end of January and a further issue of SEK 500m in February. At the end of March, an outstanding bond maturing in early June was extended.
Net financial items included other financial expenses of SEK 9m, which mainly related to accrued opening charges for credit agreements and costs relating to bond and commercial paper programmes. During the period, interest totalling SEK 6m (6) relating to project properties was capitalised.
Other liabilities 15%
Pledged assets 61% Unpledged assets 39%
| Amount SEKm | rate,% | Share,% | |
|---|---|---|---|
| < 1 year | 6,995 | 3.79 | 26 |
| 1-2 years | 1,800 | 0.57 | 7 |
| 2-3 years | 2,150 | 0.92 | 8 |
| 3-4 years | 2,850 | 0.69 | 10 |
| 4-5 years | 2,000 | 0.96 | 7 |
| 5 -6years | 3,650 | 0.89 | 13 |
| 6-7 years | 2,914 | 1.28 | 11 |
| 7-8 years | 2,962 | 1.37 | 11 |
| 8-9 years | 2,000 | 0.44 | 7 |
| 9-10 years | 0 | 0.00 | 0 |
| Total | 27,321 | 1.66 | 100 |
| Credit | ||
|---|---|---|
| agreement | Drawn, | |
| SEKm | SEKm | |
| Commercial paper programme | 5,000 | 1,925 |
| < 1 year | 965 | 805 |
| 1-2 years | 11,897 | 8,997 |
| 2-3 years | 5,200 | 2,400 |
| 3-4 years | 1,950 | 1,950 |
| 4-5 years | 2,405 | 2,405 |
| 5-10 years | 4,056 | 4,056 |
| 10-15 years | 3,529 | 3,529 |
| 15-20 years | 1,253 | 1,253 |
| Total | 36,256 | 27,321 |
Fabege's Board of Directors has adopted the following financial targets for the business.
| Credit lines | Outstanding loans and bonds |
|
|---|---|---|
| Green MTN-bonds, SEKm | 8,943 | 8,943 |
| Green bonds vis SFF, SEKm | 1,524 | 1,524 |
| Green commercial paper, SEKm | 5,000 | 1,925 |
| Green loans, other, SEKm | 20,789 | 14,929 |
| Total green financing, SEKm | 36,256 | 27,321 |
| Share of green financing, % | 100 | 100 |
| Total green facilities,SEKm | 58,085 | |
| of which free green facilities, SEKm | 21,146 |
The projects progressed according to plan. Acquisitions and investments amounted to SEK 652m. Net lettings totalled SEK 36m. The volume of renegotiations remained low but these contributed positively to the rental value of renegotiated contracts by 12 per cent.
Fabege's property management and urban and property development activities are concentrated on a few selected submarkets in and around Stockholm: Stockholm inner city, Solna, Hammarby Sjöstad and Flemingsberg. As of 31 March 2021, Fabege owned 89 properties with a total rental value of SEK 3.3bn, lettable floor space of 1.2m sqm and a book value of SEK 77.2bn, of which development and project properties accounted for SEK 10.9bn. The economic occupancy rate for the entire portfolio, including project properties, was 91 per cent (94).The occupancy rate for the investment portfolio was 92 per cent (94).
During the period, 34 (37) new leases were signed with a total rental value of SEK 101m (65), and 98 per cent of the space pertained to green leases. Lease terminations amounted to SEK -65m (-50). Net lettings totalled SEK 36m (15). Leases totalling SEK 46m (50) were renegotiated, with an average rise in rental value of 12 per cent (11). However, the volume of renegotiations was still low, due to several negotiations being postponed because of the pandemic. The retention rate during the period was 71 per cent (73).
During the first quarter, Sadelplatsen 1 was divested. Four properties relating to housing development rights in Haga Norra were sold to the joint venture company that Fabege owns together with Brabo, which is developing tenant-owned apartments on the properties. Fabege also entered into two land allocation agreements, with the City of Solna and Huddinge Municipality. In connection with this, an additional purchase price of SEK 270 million was paid for previously acquired properties in Flemingsberg.
The property portfolio is valued using a wellestablished process. The entire property portfolio is independently valued at least once a year. Approximately 30 per cent of the portfolio was independently valued in
the first quarter, while the remaining properties were internally valued based on the most recent independent valuations. The total market value at the end of the period was SEK 77.2bn (76.6). Unrealised changes in value totalled SEK 514m (1,829). The average yield requirement declined by 0.02 per cent to 3.86 per cent (3.88) during the period. The change in the value of the investment property portfolio amounted to SEK 402m (1,687). The project portfolio contributed to an unrealised change in value of SEK 112m (142). The change in value of the project portfolio was mainly due to development gains in major project properties.
The purpose of Fabege's project investments in the investment property portfolio is to reduce vacancy rates and increase rents in the property portfolio, thereby improving cash flows and value. During the period, investments in existing properties and projects totalled SEK 382m (457), of which investments in projects and development properties accounted for SEK 276m (344).
The capital invested in the investment property portfolio, which amounted to SEK 106m (113) and encompassed, for example, energy investments and tenant customisations, also contributed to the total growth in value.
During the first quarter, construction of Bilia's new premises at the property Hagalund 2:11, Solna, was completed and the tenant moved in.
The project to construct a hotel, long-stay accommodation and offices at the Nationalarenan 3 property in Arenastaden has also been completed, with Choice taking up occupancy in April. The total investment is SEK 772m.
The Pool project is progressing according to plan. The basic structure is complete and work on the facade and waterproofing is underway. The acquisition of the
| Changes in property value | 2021 |
|---|---|
| Opening fair value 2021-01-01 | 76,648 |
| Property acquisitions¹ | 270 |
| Investments in new builds, extensions and conv | 382 |
| Changes in value | 514 |
| Sales and disposals¹ | -604 |
| Closing fair value 31/03/21 | 77,210 |
¹Refers to additional purchase price Flemingsberg.
| Total investments | 382 |
|---|---|
| Investments in management properties | 106 |
| Investments in project- & development prope | 276 |
| Average yield, % |
|---|
| 3.58 |
| 3.99 |
| 4.22 |
| 5.15 |
| 3.86 |
| Lettable | |||
|---|---|---|---|
| Categor | area.sq | ||
| Property name | Area | y | m |
| Quarter 1 | |||
| Sadelplatsen 1 | Frösunda | Kontor | 6,368 |
| Total | 6,368 |
development right was implemented as planned in September 2020. The property includes approx. 29,000 sqm of lettable office space, and will be constructed in a 3D reallotment above the swimming pool being built by Solna Municipality. The investment is estimated at SEK 1,103m. The occupancy rate is 79 per cent, which is the rental to TietoEvry.
The renovation of Stigbygeln 2, Arenastaden is in the final stages and will house, for example, Fabege's new head office. The investment is estimated at SEK 195m. The first tenants have moved in and the project will be completed in the second quarter. The occupancy rate is 83 per cent.
Redevelopment work at Glädjen 2, Stadshagen, is ongoing, following the premises being vacated by former tenant LRF. The investment is estimated at SEK 177m. The occupancy rate is 12 per cent, as Electrolux have signed a lease.
The project regarding the development of part of Bocken 39, Kungsgatan, for Convendum has started, with the design and demolition work. The investment is expected to amount to SEK 194m and the premises will be completed in time for Convendum to occupy them in July 2022.
Another project will start in 2021, with design and procurement. This is for part of Regulatorn 2, Flemingsberg, where Fabege will build premises for the Royal Swedish Opera and the Royal Dramatic Theatre.
Fabege and Svenska Hyreshus AB are leading a housing development project in Kista via co-owned Selfoss Invest AB. The total investment amounts to SEK 570m, excluding purchase of the land. The project comprises 276 apartments. All 69 apartments in stage 1 have been sold and were taken over on 1 April. Phase 2 was completed in the autumn and 60 of the 77 apartments have been sold. Phase 3, comprising 130 apartments, was divested in the first quarter of 2021 to Patrizia, for use as rented accommodation.
The housing project being conducted in cooperation with Brabo in Haga Norra is proceeding according to plan. The project includes 418 apartments that are being produced in a 3D reallotment above the facility that Fabege has built for Bilia. The reallotment process was completed during the first quarter and Fabege sold the four properties covered by it to the joint venture company. The estimated investment totals approximately SEK 1.1bn. The basic structure is complete and work on the completion of the frame, installations and furnishings is ongoing. In the first tranche of sales, which involves 153 apartments, leases have been signed on 150 apartments via non-binding booking agreements. The sale of the second tranche of 115 apartments is expected to start in May. The project is financed by owner loans and external construction loans.
The development of the property Lagern 3, Råsunda into tenant-owned apartments is proceeding according to plan, with the first occupancy scheduled for November 2021. The project is being managed together with the TB Group in a 50/50 per cent joint venture company. The investment is estimated to be SEK 288m, excluding purchase of the land. 111 (83 per cent) of the project's 134 apartments have been sold via binding preliminary contracts.
The current joint venture projects will be recognised in accordance with the equity method. Income recognition will not take place until completion of the projects.
| Property listing | Property type Area | Completed | Lettable area, sqm |
Occupancy rate, area, %¹ |
Rentel value² |
Booked value, SEKm |
Estimated investment, SEKm |
of which, worked up. SEKm |
|
|---|---|---|---|---|---|---|---|---|---|
| Stigbygeln 2 | Offices | Solna | Q2-2021 | 8,400 | 83% | 30 | 593 | 195 | 150 |
| Nationalarenan 3 | Hotel | Arenastaden | Q2-2021 | 19,100 | 100% | 55 | 961 | 772 | 720 |
| Poolen 1 | Offices | Arenastaden | Q1-2022 | 29,000 | 100% | 96 | 850 | 1,103 | 381 |
| Glädjen 12 | Kontor | Stadshagen | Q4-2022 | 11,000 | 12% | 44 | 537 | 177 | 17 |
| Bocken 39 (part of) | Kontor | Norrmalm | Q3-2022 | 7,600 | 100% | 66 | 1,343 | 194 | 6 |
| Total | 75,100 | 85% | 291 | 4,284 | 2,441 | 1,274 | |||
| Other land and project properties | 2,597 | ||||||||
| Other development properties | 5,385 | ||||||||
| Total projects, land and development properties | 12,266 |
¹ Operational occupancy rate 31 Mar 2021.
² Rental value including additions. The annual rent for the largest projects in progress could increase to SEK 291m (fully let) from SEK 4m in annualised current rent as of 31 Mar 2021.
| Commercial, sqm | Residential, sqm | ||
|---|---|---|---|
| Inner city | 32,500 | Inner city | 1,100 |
| Solna | 344,900 | Solna | 269,200 |
| Hammarby Sjöstad | 58,700 | Hammarby Sjöstad | - |
| Flemingsberg | 331,000 | Flemingsberg | 237,000 |
| Others | 80,500 | Others | - |
| Total | 847,600 | Total | 507,300 |
| Legal binding, % | 15 | Legal binding, % | 18 |
| Booked value, SEK/sqm | 5,400 | Booked value, SEK/sqm | 7,080 |
Areas and carrying amount relate to additional development rights area. Development will in some cases require demolition of existing areas, which will impact the project calculation. The volumes are not maximised. Ongoing planning work aims to increase the volume of future development rights. All agreed land allocations have been included.
| Lettable area, '000 | Rental | Financial | ||||
|---|---|---|---|---|---|---|
| Property holdings | No. of properties | sqm | value SEKm | value² | occupancy rate % | |
| Investment properties ¹ | 60 | 1,030 | 66,288 | 3,077 | 92 | |
| Development properties ¹ | 13 | 168 | 5,384 | 159 | 72 | |
| Land and Project properties ¹ | 16 | 23 | 5,538 | 32 | 66 | |
| Total | 89 | 1,221 | 77,210 | 3,268 | 91 | |
| Of which, Inner city | 27 | 325 | 29,174 | 1,218 | 87 | |
| Of which, Solna | 46 | 691 | 38,577 | 1,607 | 94 | |
| Of which, Hammarby Sjöstad | 11 | 137 | 7,627 | 380 | 89 | |
| 4 | 68 | 1,802 | 63 | 90 | ||
| Of which, Other | 1 | 0 | 30 | 0 | 0 | |
| Total | 89 | 1,221 | 77,210 | 3,268 | 91 |
¹ See definitions.
² In the rental value, time limited deductions of about SEK 101m (in rolling annual rental value at 31 Mars 2021) have not been deducted.
| 2021 | 2021 | 2021 | 2021 | 2020 | 2020 | 2020 | 2020 | |
|---|---|---|---|---|---|---|---|---|
| Jan-Mar | Jan-Mar | Jan-Mar | Jan-Mar | Jan-Mar | Jan-Mar | Jan-Mar | Jan-Mar | |
| SEKm | Förvaltning Developme Transaction | Total Management Developme Transaction | Total | |||||
| Rental income | 661 | 46 | 707 | 694 | 17 | 711 | ||
| Property expenses | -164 | -37 | -201 | -176 | -15 | -191 | ||
| Net operating income | 497 | 9 | 0 | 506 | 518 | 2 | 0 | 520 |
| Surplus ratio, % | 75% | 20% | 72% | 75% | 12% | 73% | ||
| Central administration | -27 | -5 | -32 | -20 | -3 | -23 | ||
| Net interest expense | -101 | -17 | -118 | -97 | -14 | -111 | ||
| Ground rents | -10 | 1 | -9 | -6 | 0 | -6 | ||
| Share in profits of associated companies | -1 | 0 | -1 | -11 | 0 | -11 | ||
| Profit from property management activities | 358 | -12 | 0 | 346 | 384 | -15 | 0 | 369 |
| Realised changes in value of properties | 0 | 0 | 0 | 0 | 0 | 25 | 25 | |
| Unrealised changes in value of properties | 402 | 112 | 514 | 1,687 | 142 | 0 | 1,829 | |
| Profit/loss before tax per segment | 760 | 100 | 0 | 860 | 2,071 | 127 | 25 | 2,223 |
| Changes in value, fixed income derivatives and equities | 234 | -244 | ||||||
| Profit before tax | 1,094 | 1,979 | ||||||
| Properties, market value | 66,288 | 10,922 | 77,210 | 64,682 | 8,314 | 72,996 | ||
| Occupancy rate, % | 92% | 71% | 91% | 94% | 92% | 94% |
¹ Explanation of classifications and also the reclassifications during the period between the Property Management and Property Development segments are stated in the note on Segment Reporting on page 18.
Our ambition does not stop at developing sustainable city districts, properties and premises. We aim to contribute to a sustainable Stockholm. Our sustainability strategy is an integral part of our business concept, business model and corporate culture.
Work is underway, with the help of Citylab, to ensure a sustainable Arenastaden, in partnership with the City of Solna and Sweden Green Building Council. Citylab is Sweden's first certification system for sustainable urban development, and it includes an evaluation element that answers the question: How sustainable has it been made?
Fabege's objective is for the company's entire property portfolio to be certified to BREEAM-SE/BREEAM In-Use standard. Fabege's new builds are certified in accordance with BREEAM-SE, and our aim is to achieve the level of 'Excellent'. Of Fabege's 89 properties, 59 were certified at the end of the period. Overall, this represents 83 per cent (81) of the combined floorspace of Fabege's existing portfolio. The properties that have not yet begun certification relate to land and development property for future project development. In 2021, work will continue on upgrading several certifications in the existing portfolio and during the period one additional property will be upgraded to the Very Good level.
Fabege's new energy efficiency targets are divided into phases. Already in 2019, we surpassed the Swedish Energy Agreement's target of 50 per cent more efficient energy use in 2030 compared to 2005. In 2020, Fabege's average energy use was 74 kWh/sqm (cumulative 12-month result). 2020 was an unusual year, with a mild winter and low energy consumption due to the fact that many offices were not used because tenants decided to let their employees work from home. The target for 2023, of average energy consumption of 77 kWh/sqm, remains the same. The portfolio is divided into two parts: newer properties that have received planning permission
since 2012 and have a target of 50 kWh/sqm, and older properties that have a target of 85 kWh/sqm. In the first quarter, the average energy consumption was 29 kWh/sqm, which due to the more normal winter is slightly higher than the same period last year.
In 2020, we began retroactively calculating our climate impact from Scope 3 emissions during the base year of 2019, which is a major challenge. We have also set up the ambitious target of cutting our climate footprint within Scope 3 in half by 2030. Achieving this target will require us to use innovative approaches in our project development, involving reuse, choice of materials, new technology and imposing stringent requirements during procurement processes. Work has begun on the design of the so-called Park House in Solna Business Park, which is a pilot project that aims to halve the climate impact during construction.
Fabege has a long-term, target-based and integrated approach towards creating more sustainable properties. Our overriding longterm goal is to have zero net emissions from property management by 2030. By this we mean that we will have control over all the emissions associated with our operations, and that we will minimise emissions to the greatest possible extent using the tools available. We will compensate for emissions over which we have no control via carbon offsetting, for example investments in carbon sinks such as forests, or wind and solar parks.
Fabege has been connected to the Science Based Targets initiative since 2019, and has thus taken an initial step in reorganising the business to help achieve the 1.5-degree target
I In the sustainability survey for 2020 conducted by GRESB, Fabege achieved 93 points, which means that we are ranked as a global leader in the Office sector in the category listed real estate companies.
In the autumn of 2020, CICERO Shades of Green carried out an assessment of Fabege. The results revealed that 95 per cent of Fabege's revenue and investments for 2020 were classified as green. Furthermore, Fabege received CICERO's highest rating, 'Excellent', in an assessment of the company's sustainability governance.
| System | Target | ||
|---|---|---|---|
| BREEAM-In-Use | 45 | 654,298 | 64 |
| BREEAM-SE | 9 | 250,699 | 24 |
| BREEAM Bespoke | 1 | 7,460 | 1 |
| Green building | 1 | 6,164 | 1 |
| Miljöbyggnad | 3 | 109,432 | 11 |
| Total certified properties | 59 | 1,028,053 | 100 |
| 2010, Q1 | 2020 | 2019 | Target | |
|---|---|---|---|---|
| Energy performance, KWh/sqm Atemp | 29 | 74 | 81 | verage max. 77 kWh/sqm Atem |
| Proportion of renewable energy, % | 96 | 96 | 91 | 100 |
| Environmetal certification, numer of properties | 59 | 59 | 56 | |
| Environmetal certification, of total area, % | 83 | 82 | 83 | 100 |
| Green lease, share of total office space | 98 | 96 | 94 | 100 |
| Green lease, share of newly signed area,% | 78 | 73 | 75 | 100 |
| Green financing, % | 100 | 100 | 84 | 100 |
| Satisfied employees, confidence rating , % | 79 | 79 | 74 | 2021 minst 85% |
| GRESB, points | 93 | 93 | 94 | >90 |
Our green framework allows us to issue green bonds and green commercial paper and to link other loans to the framework. Green financing offers Fabege better conditions both with banks and on the capital market, and access to more financing alternatives. The green framework has increased the proportion of green financing sources. All Fabege's creditors can now offer green financing, and the aim of 100 per cent green financing was achieved just before year-end.
• Find out more about Fabege's green financing at
www.fabege.com/greenfinancing, where investor reports are also available.
Fabege collaborates with municipalities, authorities, other property owners and associations to create safe and attractive areas. The focus is on education, spare time, health and work.
Examples of measures:
This is a quarterly follow-up of Fabege's work with sustainability issues. The starting point is Fabege's annual Sustainability Report. The quarterly report has not been prepared in accordance with the GRI guidelines and therefore does not address certain issues. An overall picture of the sustainability work is published once a year in the Sustainability Report; more information is available at www.fabege.com/sustainability.
| Change in value, % | tax profit, SEKm |
Equity/as-sets ratio, % |
Loan-to-value ratio, % |
|---|---|---|---|
| +1 | 607 | 51.0% | 35.2% |
| 0 | 0 | 50.7% | 35.4% |
| -1 | -607 | 50.4% | 25.5% |
Earnings and key performance indicators are affected by realised and unrealised changes in the value of properties. The table shows the effect of a 1 percentage point change in value after deferred tax deduction.
| ChangeEffect, SEKm | ||
|---|---|---|
| Rental income, total | 1% | 28.3 |
| Rent level, commercial income | 1% | 27.2 |
| Financial occupancy rate | 1 percentage point | 32.8 |
| Property expenses | 1% | 7.0 |
| Interest expense, rolling 12 months ¹ | +/-1 percentage point | 33 / 8 |
| Interest expenses, longer term perspective | 1 percentage point | 273.2 |
| The sensitivity analysis shows the effects on the Group's cash flow and Profit on an annualised basis after taking into account the full effect of Each parameter. |
The graph above shows the development of contracted rental income, including occupancies and vacations that are known about and renegotiations, but excluding letting targets. The graph therefore does not constitute a forecast, but rather aims to demonstrate the rental trend in the existing contract portfolio on the balance sheet date.
At the end of the period, 191 people (191) were employed by the Group.
Sales during the period amounted to SEK 74m (97) and earnings before appropriations and tax amounted to SEK 130m (328). Net investments in property, equipment and shares totalled SEK 2m (0).
| Annual value, | |||
|---|---|---|---|
| Maturity, year | No. of leases | SEKm | Share, % |
| 2021 | 387 | 377 | 13% |
| 2022 | 423 | 709 | 24% |
| 2023 | 244 | 367 | 12% |
| 2024 | 165 | 207 | 7% |
| 2025 | 79 | 271 | 9% |
| 2026+ | 112 | 908 | 31% |
| Commercial | 1,410 | 2,839 | 95% |
| Residentals | 118 | 11 | 0% |
| Garage and parking | 679 | 124 | 4% |
| Total | 2,207 | 2,975 | 100% |
¹ Of which just over SEK 223m has already been renegotiated for 2020.
| Share¹, % | Valid to year | |
|---|---|---|
| SEB Banken | 7% | 2037 |
| The Swedish Tax Agency | 5% | 2022 |
| Telia Company AB | 5% | 2031 |
| ICA Fastigheter Sverige AB | 4% | 2030 |
| Swedbank | 2% | 2029 |
| Carnegie Investment Bank AB | 2% | 2022 |
| The Swedish Migration Agency | 2% | 2028 |
| Bilia | 2% | 2041 |
| The Swedish Agency for Education | 1% | 2024 |
| Telenor AB | 1% | 2028 |
| Total | 30% | |
| ¹Share of contracted rent. |
EVENTS OCCURRING AFTER THE BALANCE SHEET DATE No significant events occurred after the balance sheet date.
Risks and uncertainties relating to cash flow from operations relate primarily to changes in rents, vacancies and interest rates. The effect of the changes on consolidated profit, including a sensitivity analysis, and a more detailed description of risks and opportunities, are presented in the section on Risks and opportunities in the 2020 Annual Report (pages 48–57).
Properties are recognised at fair value and changes in value are recognised in profit or loss. Effects of changes in value on consolidated profit, the equity/assets ratio and the loan-tovalue ratio are also presented in the section on Risks and opportunities and the sensitivity analysis in the 2020 Annual Report. Financial risk, defined as the risk of insufficient access to long-term funding through loans, and Fabege's management of this risk are also described in the Risks and opportunities section of the 2020 Annual Report (pages 48–57).
Fabege's aims for the capital structure are to have an equity/assets ratio of at least 35 per cent and an interest coverage ratio of at least 2.2. The target for the loan-to-value ratio is a maximum of 50 per cent. The debt ratio will amount to a maximum of 13.
Apart from the effects of Covid-19 that have been described on page 3, no material changes in the company's assessment of risks have been made since publication of the 2020 Annual Report.
Expenses for the running and maintenance of properties are subject to seasonal variations. For example, cold and snowy winters give rise to higher costs for heating and snow clearance, while hot summers result in higher cooling costs. Activity in the rental market is seasonal. Normally, more business transactions are completed in the second and fourth quarters, whereby net lettings in these quarters are often higher.
Many question marks remain and there is a great deal of uncertainty regarding what 2021 has in store. We don't know how quickly the vaccination programme will be rolled out, and what the pace of recovery will be like, or what the 'new normal' will be, post pandemic. The impact of the pandemic on Fabege is reported on page 3.
Fabege enjoys a strong financial position, which means we are able to cope well even in difficult times, and also exploit any opportunities that may arise. Several of our key performance indicators are stronger at the start of 2021 than they were in 2020. Our properties are modern and well-managed, and situated in attractive locations. We have stable customers. Fabege's employees are motivated and capable. We are well prepared to take on the challenges and opportunities open to us on the market over the coming year.
Fabege prepares its consolidated financial statements according to International Financial Reporting Standards (IFRS). This Interim Report has been prepared in accordance with IAS 34 Interim Financial Reporting and the Swedish Annual Accounts Act.
Disclosures in accordance with IAS 34 Interim Financial Reporting are submitted both in the notes and in other sections of the Interim Report.
The company has received government support in the form of the rent support package, which is recognised as a reduction in rental income. This is recognised in profit or loss in the same period as the decline in income for which the support is intended, to the extent it is deemed reasonably likely that the conditions have been satisfied and the support has been received/will be received. There are no contingent liabilities linked to the government support. The Group has not received any other forms of government support.
The Group applies the same accounting policies and valuation methods as in the latest annual report. Other new or revised IFRS standards or other IFRIC interpretations that came into effect after 1 January 2021 have not had any material impact on consolidated financial statements. The Parent Company prepares its financial statements according to RFR 2 Accounting for Legal Entities and the Swedish Annual Accounts Act, and applies the same accounting policies and valuation methods as in the latest annual report.
Stockholm, 26 April 2021
Stefan Dahlbo Chief Executive Officer
This Interim Report has not been reviewed by the company's auditors.
Fabege's shares are listed on NASDAQ Stockholm, in the Large Cap segment.
Fabege had a total of 44,698 known shareholders on 31 March 2021, including 59.2 per cent Swedish ownership. The 15 largest owners controlled 43.2 per cent of the total number of shares and votes.
Fabege aims to pay a dividend to its shareholders comprising the part of the company's profit that is not required for the consolidation or development of the business. Under current market conditions, this means that the dividend is expected to sustainably account for at least 50 per cent of profit from continuous property management and realised gains from the sale of properties after tax.
LARGEST SHAREHOLDERS, 31.03.2021
The 2021 AGM passed a resolution mandating the Board, for a period extending up until the next AGM, to acquire and transfer shares in the company. Share buybacks are subject to a limit of 10 per cent of the total number of shares outstanding at any time. During the first quarter, 2,999,953 shares were repurchased. The company held 7,577,355 treasury shares on 31 March 2021. The repurchases were made at an average price of SEK 118.75 per share. The holding represents 2.3 per cent of the total number of registered shares.
| Fabege | |
|---|---|
| Lowest price, SEK | 114.75 |
| Highest price, SEK | 134.85 |
| VWAP, SEK | 122.04 |
| Average daily turnover, SEK | 101,968,673 |
| Number of traded shares, no | 51,801,980 |
| Average number of transactions, no | 2,523 |
| Number of transactions, no | 156,429 |
| Average value per transcation, SEK | 40,415 |
| Daily turnover relative to market capitalization | 0.25 |
| Capital & | ||
|---|---|---|
| Number of shares | votes,% | |
| Foreign institutional owners | 98,546,023 | 29.8 |
| Swedish institutional owners | 69,773,531 | 21.1 |
| Other owners | 72,978,883 | 22.1 |
| Swedish private individuals | 46,937,104 | 14.2 |
| Anonymous ownership | 34,970,248 | 10.6 |
| Holding own shares | 7,577,355 | 2.3 |
| Total | 330,783,144 | 100 |
* Source: Holdings by Modular Finance AB. Compiled and processed data from various sources, including Euroclear, Morningstar and the Swedish Financial Supervisory Authority (Finansinspektionen).
| SEKm | 2021 Jan-Mar |
2020 Jan-Mar |
2020 Jan-Dec |
Rolling 12 m Apr-Mar |
|---|---|---|---|---|
| Rental income ¹ | 707 | 711 | 2,806 | 2,802 |
| Property expenses | -201 | -191 | -694 | -704 |
| Net operating income | 506 | 520 | 2,112 | 2,098 |
| Surplus ratio, % | 72% | 73% | 75% | 75% |
| Central administration | -32 | -23 | -93 | -102 |
| Net interest/expense | -118 | -111 | -462 | -469 |
| Ground rent | -9 | -6 | -30 | -33 |
| Share in profits of associated companies | -1 | -11 | -53 | -43 |
| Profit/loss from property management | 346 | 369 | 1,474 | 1,451 |
| Realised changes in value of properties | 0 | 25 | 49 | 24 |
| Unrealised changes in value of properties | 514 | 1,829 | 2,715 | 1,400 |
| Unrealised changes in value, fixed income derivatives | 234 | -243 | -229 | 248 |
| Changes in value of shares | 0 | -1 | -2 | -1 |
| Profit/loss before tax | 1,094 | 1,979 | 4,007 | 3,122 |
| Current tax | 0 | 25 | 24 | -1 |
| Deferred tax | -231 | -430 | -864 | -665 |
| Profit/loss for period/year | 863 | 1,574 | 3,167 | 2,456 |
| Items that will not be restated in profit or loss | ||||
| Revaluation of defined-benefit pensions | - | - | -1 | -1 |
| Comprehensive income for the period/year | 863 | 1,574 | 3,166 | 2,455 |
| Off which attributable to the minority | 0 | 0 | 0 | 0 |
| Total comprehensive income attributable to Parent Company shareholders | 863 | 1,574 | 3,166 | 2,455 |
| Earnings per share, SEK | 2:64 | 4:78 | 9:65 | 21:70 |
| No. of shares at period end, millions | 323,206 | 328 283 | 328,283 | 330,783 |
| Average no. of shares, thousands | 327,110 | 329,533 | 329,211 | 330,783 |
¹ Additional payment, service and other income amounts to SEK 31m for the period January - March 2021.
² Earnings per share are the same before and after the dilution effect.
| 2021 | 2020 | 2020 | |
|---|---|---|---|
| SEKm | Mar 31 | Mar 31 | Dec 31 |
| Assets | |||
| Properties | 77,210 | 72,996 | 76,648 |
| Right of ground use | 897 | 942 | 897 |
| Other tangible fixed assets | 14 | 6 | 15 |
| Derivative instrument | 60 | 31 | 20 |
| Financial fixed assets | 1,536 | 911 | 1,108 |
| Current assets | 528 | 479 | 350 |
| Short-term investments | 95 | 130 | 108 |
| Cash and cash equivalents | 287 | 195 | 20 |
| Total assets | 80,627 | 75,690 | 79,166 |
| Equity and liabilities | |||
| Shareholder's equity | 40,882 | 41,343 | 41,542 |
| Deferred tax | 8,519 | 7,853 | 8,288 |
| Other provisions | 182 | 181 | 183 |
| Interest-bearing liabilities¹ | 27,321 | 23,472 | 26,669 |
| Lease liability | 897 | 942 | 897 |
| Derivative instrument | 422 | 641 | 617 |
| Non-interest-bearing liabilities | 2,404 | 1,258 | 970 |
| Total equity and liabilities | 80,627 | 75,690 | 79,166 |
¹ Of which short-term SEK 805m (2,925).
| Other contributed |
Retained earnings incl. Profit/loss for |
Total equity attributable to Parent Company |
Non-controlling | total shareholders´eq |
||
|---|---|---|---|---|---|---|
| SEKm | Share capital | capital | the period | shareholders | interests | uity |
| Shareholders' equity, 1 January 2020, according to adopted Statement of financial position | 5,097 | 3,017 | 31,880 | 39,993 | 74 | 40,068 |
| Profit for the period | 3,167 | 3,167 | 0 | 3,167 | ||
| Other comprehensive income | -1 | -1 | -1 | |||
| Total income and expenses for the period | 3,166 | 3,166 | 0 | 3,166 | ||
| TRANSACTIONS WITH SHAREHOLDERS | ||||||
| -541 | -541 | -541 | ||||
| Cash dividend | -1,050 | -1,050 | -1,050 | |||
| -26 | -26 | -74 | -100 | |||
| Total transactions with shareholders | -1,617 | -1,617 | -74 | -1,691 | ||
| Shareholders' equity, 31 December 2020, according to adopted Statement of financial pos | 5,097 | 3,017 | 33,428 | 41,542 | 0 | 41,542 |
| Profit for the period | 863 | 863 | 0 | 863 | ||
| Other comprehensive income | ||||||
| Total income and expenses for the period | 863 | 863 | 0 | 863 | ||
| TRANSACTIONS WITH SHAREHOLDERS | ||||||
| -359 | -359 | -359 | ||||
| -1,164 | -1,164 | -1,164 | ||||
| Cash dividend | ||||||
| Total transactions with shareholders | -1,523 | -1,523 | 0 | -1,523 | ||
| Shareholders' equity, 31 Mars 2021 | 5,097 | 3,017 | 32,768 | 40,882 | 0 | 40,882 |
| 2021 | 2020 | 2020 | |
|---|---|---|---|
| SEKm | Jan-Mar | Jan-Mar | Jan-Dec |
| Operations | |||
| Net operating income | 506 | 520 | 2,112 |
| Central administration | -32 | -23 | -93 |
| Reversal of depreciation | 1 | 0 | 4 |
| Interest received | 4 | 5 | 16 |
| Interest paid | -144 | -132 | -550 |
| Income tax paid | 0 | 25 | 24 |
| Cash flow before changes in working capital | 335 | 395 | 1,513 |
| Change in working capital | |||
| Change in current receivables | -179 | -164 | -34 |
| Change in current liabilities | 270 | 167 | -130 |
| Total change in working capital | 91 | 3 | -164 |
| Cash flow from operating activities | 426 | 398 | 1,349 |
| Investing activities | |||
| Investments in new-builds, extensions and conversions | -376 | -451 | -1,826 |
| Acquisition of properties | -270 | 0 | -1,370 |
| Divestment of properties | 604 | 3,566 | 3,589 |
| Other tangible fixed assets | -410 | -101 | -411 |
| Cash flow from investing activities | -452 | 3,014 | -18 |
| Financing activities | |||
| Dividend to shareholders | - | - | -1,050 |
| Transfer of treasury shares | -359 | -299 | -541 |
| Loans received | 4,312 | 800 | 10,117 |
| Amortization of debt | -3,660 | -3,742 | -9,861 |
| Cash flow from investing activities | 293 | -3,241 | -1,335 |
| Cash flow for the period | 267 | 171 | -4 |
| Cash and cash equivalents at beginning of period | 20 | 24 | 24 |
| Cash and cash equivalents at end of period | 287 | 195 | 20 |
| 2021 | 2020 | 2020 | |
|---|---|---|---|
| Financial ¹ | Jan-Mar | Jan-Mar | Jan-Dec |
| Return on equity, % | 8.4 | 15.5 | 7.8 |
| Interest coverage ratio, multiple | 3.9 | 4.4 | 4.3 |
| Equity | 51 | 55 | 52 |
| Loan-to-value ratio, properties, % | 35 | 32 | 35 |
| Debt ratio, multiple | 13.7 | 11.4 | 13.2 |
| Debt/equity ratio, multiple | 0.7 | 0.6 | 0.6 |
| Share related ¹ | |||
| Earnings per share, SEK ² | 2:64 | 4:78 | 9:65 |
| Equity per share, SEK | 126 | 126 | 127 |
| Cash flow from operating activities per share, SEK | 1:30 | 1:21 | 4:11 |
| Average no. of shares, thousands | 323,206 | 329,533 | 328,317 |
| No. of outstanding shares at end of period, thousands | 327,110 | 328,283 | 326,206 |
| Property-related | |||
| No. of properties | 89 | 86 | 94 |
| Carrying amount, Properties, SEKm | 77,210 | 72,996 | 76,648 |
| Lettable area, sqm | 1,221,000 | 1,189,000 | 1,245,000 |
| Financial occupancy rate, % | 91 | 94 | 91 |
| Total return on properties, % | 1.3 | 3.3 | 6.6 |
| Surplus ratio, % | 72 | 73 | 75 |
¹ Unless otherwise stated, the key figure is not defined under IFRS. Please see page 21 for definitions. ² Definitions according to IFRS.
| 2021 | 2020 | 2020 | |
|---|---|---|---|
| Jan-Mar | Jan-Mar | Jan-Dec | |
| EPRA Earnings (income from property mgmt after tax), SEKm | 305 | 329 | 1,285 |
| EPRA Earnings (EPS), SEK/share | 0:93 | 1:00 | 3:92 |
| EPRA NRV (long term net asset value), MSEK | 49,763 | 49,806 | 50,427 |
| EPRA NRV, SEK/share | 154 | 152 | 155 |
| EPRA NTA (long term net asset value), SEKm | 47,348 | 47,865 | 48,217 |
| EPRA NTA, SEK/share | 146 | 146 | 148 |
| EPRA NDV (net asset value), SEKm | 40,882 | 41,343 | 41,542 |
| EPRA NDV, SEK/share | 126 | 126 | 127 |
| EPRA Vacancy rate, % | 9 | 6 | 9 |
| 2021 | 2020 | 2020 | |
|---|---|---|---|
| Defered tax attributable to: | Mar 31 | Mar 31 | Dec 31 |
| - tax loss carryforwards, SEKm | -600 | -759 | -693 |
| - difference between book value and tax value in respect of properties, SEKm | 9,200 | 8,677 | 9,166 |
| - derivatives, SEKm | -77 | -52 | -128 |
| - other, SEKm | -4 | -13 | -57 |
| Net debt, deferred tax, SEKm | 8,519 | 7,853 | 8,288 |
Derivatives are measured at fair value in accordance with Level 2. The derivatives portfolio is measured at the present value of future cash flows. Changes in value are recognised in profit or loss. Changes in value are of an accounting nature and have no impact on cash flow. At the due date, the market value of derivative instruments is always zero. The valuation assumptions have not changed significantly compared to the last annual report.
On the balance sheet date, contingent liabilities comprised guarantees and commitments in favour of associated companies of SEK 358m (531) and other 0 (0).
In the first quarter, the project at Hagalund 2:11 (the Bilia project) was completed and the property was reclassified from a project property to an investment property.
In accordance with IFRS 8, segments are presented from the point of view of management, divided into the following segments: Property Management, Property Development and Transactions. Rental income and property expenses, as well as realised and unrealised changes in the value of properties, are directly attributable to properties in each segment (direct income and expenses). In cases where a property changes character during the year, earnings attributable to the property are allocated to each segment based on the period of time that the property belonged to each segment. Central administration and items in net financial expense have been allocated to the segments in a standardised manner based on each segment's share of the total property value (indirect income and expenses). Property assets are directly attributed to each segment and recognised on the balance sheet date.
Details are provided below regarding reconciliation of the financial key performance indicators that Fabege continually monitors and for which established financial targets are in place. The following financial targets have been established by the Board of Directors:
| 2021 | 2020 | 2020 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Equity/assets ratio | Mar 31 | Mar 31 | Dec 31 | ||||||
| Equity, SEKm | 40,882 | 41,343 | 41,542 | ||||||
| Total assets, SEKm | 80,627 | 75,690 | 79,166 | ||||||
| Equity/assets ratio | 51% | 55% | 52% | ||||||
| Loan-to-value ratio, properties | 2021 | 2020 | 2020 | ||||||
| Mar 31 | Mar 31 | Dec 31 | |||||||
| Interst-bearing liabilities, SEKm | 27,321 | 23,472 | 26,669 | ||||||
| Booked value properties, SEKm Loan-to-value ratio, properties |
77,210 35% |
72,996 32% |
76,648 35% |
||||||
| 2021 | 2020 | 2020 | |||||||
| Debt ratio | Mar 31 | Mar 31 | Dec 31 | ||||||
| Operating surplus, SEKm | 2,098 | 2,155 | 2,112 | ||||||
| Central administration, SEKm | -102 | -87 | -93 | ||||||
| Total, SEKm | 1,996 | 2,068 | 2,019 | ||||||
| Interest-bearing liabilities, SEKm | 27,321 | 23,472 | 26,669 | ||||||
| Debt ratio, multiple | 13.7 | 11.4 | 13.2 | ||||||
| 2021 | 2020 | 2020 | |||||||
| Interst coverage ratio, multiple | Mar 31 | Mar 31 | Dec 31 | ||||||
| Net operating income, SEKm | 506 | 540 | 2,112 | ||||||
| Ground rent | -9 | -6 | -30 | ||||||
| Central administration, SEKm | -32 | -23 | -93 | ||||||
| Total, SEKm | 465 | 491 | 1,989 | ||||||
| Net intrest/expense, SEKm | -118 | -111 | -462 | ||||||
| Interst coverage ratio, multiple | 3.9 | 4.4 | 4.3 | ||||||
| 2021 | 2020 | 2020 | |||||||
| Return on equity | Jan-Mar | Jan-Mar | Jan-Dec | ||||||
| Profit for the period, SEKm | 863 | 1,574 | 3,167 | ||||||
| Average shareholders' equity, SEKm | 41,212 | 40,706 | 40,805 | ||||||
| Return on equity | 8.4% | 15.5% | 7.8% | ||||||
| 2021 | 2020 | 2020 | |||||||
| Total return on properties Net operating income, SEKm |
Jan-Mar 505 |
Jan-Mar 520 |
Jan-Dec 2,112 |
||||||
| Unrealized and realized value changes properties, SEKm | 514 | 1,869 | 2,764 | ||||||
| Market value including captal investment during the period, SEKm | 77,210 | 71,167 | 73,933 | ||||||
| Total return on properties | 1.3% | 3.4% | 6.6% | ||||||
| 2021 | 2020 | 2020 | |||||||
| Jan-Mar | Jan-Mar | Jan-Dec | |||||||
| EPRA NRV, EPRA NTA & EPRA NDV | NRV | NTA | NDV | NRV | NTA | NDV | NRV | NTA | NDV |
| Shareholders' equity, SEKm | 40,882 | 40,882 | 40,882 | 41,343 | 41,343 | 41,343 | 41,542 | 41,542 | 41,542 |
| Inclusion of decided not paid dividend, SEKm | - | - | - | - | - | - | - | - | - |
| Inclusion of fixed-income derivatives according to the balance sheet, SEKm | 362 | 362 | 362 | 610 | 610 | 610 | 597 | 597 | 597 |
| Inclusion of deferred tax according to the balance sheet, SEKm | 8,519 | 8,519 | 8,519 | 7,853 | 7,853 | 7,853 | 8,288 | 8,288 | 8,288 |
| Exclusion of actual deferred tax, SEKm | - | -2,415 | -2,415 | - | -1,941 | -1,941 | - | -2,210 | -2,210 |
| Exclusion of fixed-income derivatives according to the balance sheet, SEKm | - | - | -362 | - | - | -610 | - | - | -597 |
| Inclusion of deferred tax according to the balance sheet after adjustment of actual deferred tax, SEKm |
- | - | -6,104 | - | - | -5,912 | - | - | -6,078 |
| NAV | 49,763 | 47,348 | 40,882 | 49,806 | 47,865 | 41,343 | 50,427 | 48,217 | 41,542 |
| Number of shares at period end | 323.2 | 323.2 | 323.2 | 328.2 | 328.2 | 328.2 | 326.2 | 336.2 | 326.2 |
| NAV per share, SEK | 154 | 146 | 126 | 152 | 146 | 126 | 155 | 148 | 127 |
| 2021 | 2020 | 2020 | |||||||
| EPRA EPS | Jan-Mar | Jan-Mar | Jan-Dec |
| EPRA EPS | Jan-Mar | Jan-Mar | Jan-Dec |
|---|---|---|---|
| Profit from property management, SEKm | 346 | 369 | 1,474 |
| Tax-deductable depreciation, SEKm | -148 | -142 | -593 |
| Sum, SEKm | 198 | 227 | 881 |
| Nominal tax (20,6%), SEKm | 41 | 40 | 189 |
| EPRA earnings in total, (Profit from property management minus nominal tax) | 293 | 329 | 1,474 |
| SEKm | |||
| Number of shares, millions | 327.1 | 330.5 | 328.3 |
| EPRA EPS, SEK per share | 0:93 | 1:00 | 3:92 |
| 2021 | 2020 | 2020 | |
|---|---|---|---|
| EPRA Vacancy rate | Jan-Mar | Jan-Mar | Jan-Dec |
| ERV of vacant space, SEKm | 298 | 202 | 289 |
| Rental value, yearly, entire portfolio, SEKm | 3,268 | 3,116 | 3,242 |
| EPRA Vacancy rate, % | 9% | 6% | 9% |
| 2021 | 2020 | 2020 | |
|---|---|---|---|
| SEKm | Jan-Mar | Jan-Mar | Jan-Dec |
| Income | 74 | 97 | 320 |
| Expenses | -174 | -170 | -351 |
| Net financial items | -4 | 651 | 618 |
| Share in profits of associated companies | 0 | -6 | 0 |
| Changes in value, fixed-income derivatives | 234 | -243 | -229 |
| Changes in value, equities | 0 | -1 | -2 |
| Group Contribution | 0 | 0 | 0 |
| Profit before tax | 130 | 328 | 356 |
| Current tax | 0 | - | 0 |
| Deferred tax | -29 | -80 | 48 |
| Profit for the period | 101 | 248 | 404 |
| 2021 | 2020 | 2020 | |
|---|---|---|---|
| SEKm | Mar 31 | Mar 31 | Dec 31 |
| Participation in Group companies | 12,517 | 12,516 | 12,517 |
| Other fixed assets | 45,050 | 41,633 | 44,547 |
| of which, receivables from Group companies | 44,771 | 41,463 | 44,188 |
| Current assets | 64 | 607 | 108 |
| Cash and cash equivalents | 265 | 181 | 1 |
| Total assets | 57,896 | 54,937 | 57,083 |
| Shareholders' equity | 12,095 | 14,666 | 13,517 |
| Provisions | 70 | 71 | 70 |
| Long-term liabilities | 44,031 | 38,982 | 43,292 |
| of which, liabilities to Group companies | 17,696 | 17,087 | 17,533 |
| Current liabilities | 1,700 | 1,218 | 204 |
| Total equity and liabilities | 57,896 | 54,937 | 57,083 |
| 2021 | 2020 | 2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| SEKm | Quarter 1 | Quarter 4 | Quarter 3 | Quarter 2 | Quarter 1 | Quarter 4 | Quarter 3 | Quarter 2 | |
| Assets | |||||||||
| Properties | 77,210 | 76,648 | 75,399 | 73,565 | 72,996 | 74,250 | 71,591 | 71,821 | |
| Right of ground use | 897 | 897 | 942 | 942 | 942 | 942 | 942 | 942 | |
| Other tangible fixed assets | 14 | 15 | 15 | 15 | 6 | 6 | 6 | 6 | |
| Derivative instruments | 60 | 20 | 11 | 19 | 31 | 58 | - | - | |
| Financial fixed assets | 1,536 | 1,108 | 1,011 | 948 | 911 | 813 | 758 | 690 | |
| Current assets | 528 | 350 | 396 | 457 | 479 | 342 | 559 | 652 | |
| Short-term investments | 95 | 108 | 108 | 107 | 130 | 134 | 126 | 126 | |
| Cash and cash equivalents | 287 | 20 | 727 | 282 | 195 | 24 | 16 | 15 | |
| Total assets | 80,627 | 79,166 | 78,609 | 76,335 | 75,690 | 76,569 | 73,998 | 74,252 | |
| Equitites and liabilities | |||||||||
| Shareholders' equity | 40,882 | 41,542 | 40,844 | 40,278 | 41,343 | 40,068 | 37,582 | 36,868 | |
| Deferred tax | 8,519 | 8,288 | 8,045 | 7,875 | 7,853 | 7,431 | 7,162 | 6,956 | |
| Other provisions | 182 | 183 | 179 | 180 | 181 | 182 | 167 | 167 | |
| Interest-bearing liabilities | 27,321 26,669 | 26,205 | 24,694 | 23,472 | 26,414 | 26,001 | 27,544 | ||
| Leasing Debt | 897 | 897 | 942 | 942 | 942 | 942 | 942 | 942 | |
| Derivative instruments | 422 | 617 | 695 | 679 | 641 | 426 | 851 | 636 | |
| Non-interest bearing liabilitis | 2,404 | 970 | 1,699 | 1,687 | 1,258 | 1,106 | 1,293 | 1,139 | |
| Total equity and liabilities | 80,627 | 79,166 | 78,609 | 76,335 | 75,690 | 76,569 | 73,998 | 74,252 |
| 2021 | 2020 | 2019 | ||||||
|---|---|---|---|---|---|---|---|---|
| Quarter 1 | Quarter 4 | Quarter 3 | Quarter 2 | Quarter 1 | Quarter 4 | Quarter 3 | Quarter 2 | |
| Financial¹ | ||||||||
| Return on equtiy, % | 8.4 | 10 | 5.7 | -0.1 | 15.5 | 25.8 | 7.7 | 18.0 |
| Interest coverage ratio, multiple² | 3.9 | 4.3 | 4.3 | 4.3 | 4.4 | 4.4 | 4.4 | 4.2 |
| Equity/assets ratio, % | 51 | 52 | 52 | 53 | 55 | 52 | 51 | 50 |
| Loan-to-value ratio, properties, % | 35 | 35 | 35 | 34 | 32 | 36 | 36 | 38 |
| Debt ratio, multiple | 13.7 | 13.2 | 12.9 | 12.1 | 11.4 | 12.8 | 13.0 | 14.2 |
| Debt/equity raio, multiple | 0.7 | 0.6 | 0.6 | 0.6 | 0.6 | 0.7 | 0.7 | 0.7 |
| Share-related¹ | ||||||||
| Earnings per share, SEK² | 2:64 | 7:65 | 1:75 | -0:05 | 4:78 | 7:56 | 2:16 | 4:97 |
| Total earnings per share, SEK | 126 | 127 | 124 | 123 | 126 | 121 | 114 | 111 |
| Cash flow from operating activities per share, SEK | 1:30 | 0:61 | 1:40 | 0:89 | 1:21 | 1:34 | 0:56 | 1:40 |
| No. of shares outstanding at the end of the period, thousands | 323,206 | 326,206 | 328,206 | 328,283 | 328,283 | 330,783 | 330,783 | 330,783 |
| Average no. of shares, thousands | 327,110 | 328,317 | 329,211 | 329,533 | 329,533 | 330,783 | 330,783 | 330,783 |
| Property-related | ||||||||
| Financial occupancy rate, % | 91 | 91 | 91 | 92 | 94 | 94 | 94 | 94 |
| Total return on properties, % | 1.3 | 1.8 | 1.3 | 0.3 | 3.4 | 3.3 | 1.8 | 3.5 |
| Surplus ratio, % | 72 | 77 | 77 | 76 | 73 | 74 | 79 | 76 |
¹ Unless otherwise stated, the key figure is not defined under IFRS. Please see page for definitions.
² Definitionen according to IFRS.
Fabege is one of Sweden's leading property companies, focusing mainly on letting and managing office premises as well as city district development. The company offers modern premises in prime locations in fast-growing submarkets in the Stockholm region: Stockholm inner city, Solna and Hammarby Sjöstad.
Fabege offers attractive and efficient premises, mainly offices but also retail and other premises. The concentration of properties to well-contained clusters leads to greater customer proximity and, coupled with Fabege's extensive local expertise, creates a solid foundation for efficient property management and high occupancy.
On 31 March 2021, Fabege owned 89 properties with a total market value of SEK 77.2bn. The rental value was SEK 3.3bn.
Fabege works with sustainable city district development, with a primary focus on commercial properties within a limited number of submarkets in good locations in the Stockholm area.
Fabege aims to create value by managing, improving and actively adjusting its property portfolio through sales and acquisitions.
Fabege conducts activities in three business areas: Property Management, Property Development and Transactions.
Fabege's strategy is to create value by managing and developing the property portfolio and through transactions, acquiring and divesting properties with the aim of increasing potential in the property portfolio. Fabege's properties are located in the most liquid market in Sweden. Attractive locations lead to a low vacancy rate in the investment property portfolio. Modern properties permit flexible solutions and attract customers. With its concentrated portfolio and high-profile local presence, investments aimed at enhancing the appeal of an area benefit many of Fabege's customers.
A number of external factors affect Fabege's operations and these, together with the transaction volume and the office market trend in Stockholm, represent the prerequisites for the company's success.
Stockholm is growing
Stockholm is one of the five metropolitan areas in Western Europe where the population is increasing at the fastest rate. Forecasts suggest that by the year 2030, Stockholm County will have half a million more inhabitants than it currently has. The most significant growth is among people in the active labour force, which is boosting demand for office premises.
New technology and new working methods are fuelling demand for flexible and space-efficient premises in prime locations. Excellent peripheral services and good
communication links in the form of public transport are in increasing demand, as are environmentally certified offices and green leases.
The property market is impacted by trends in both the Swedish and the global economy. Lower vacancy rates in central Stockholm and a stronger economic climate have historically meant rising rents for a number of years. The long-term effects of the pandemic are still uncertain.
Sustainability issues are becoming increasingly important in terms of both individual properties and entire areas. Interest in environmental considerations involving choice of materials and energy-saving measures is on the rise. Demand is increasing for premises in areas with a favourable mix of offices, retail, service and residential units, as well as excellent transport links and interest in the environment.
The essence of Fabege's operations is finding the right premises for a customer's specific requirements and ensuring that the customer is content. This is accomplished through long-term work and based on close dialogue with the customer, thus building mutual trust and loyalty.
High-quality property development is the second key cornerstone of our business. Fabege has long-standing expertise in pursuing extensive property development projects, with the aim of attracting long-term tenants to properties that have not yet been fully developed and can be redesigned based on the customer's specific requirements.
Property transactions are an integral part of Fabege's business model and make a significant contribution to the company's earnings. The company continuously analyses its property portfolio to take advantage of opportunities to generate capital growth through acquisitions and divestments.
The company presents certain financial performance measures in the Interim Report that are not defined according to IFRS. The company considers that these measures provide valuable supplementary information for investors and company management, as they enable an assessment and benchmarking of the company's presentation. Since not all companies calculate financial performance measures in the same way, these are not always comparable to measures used by other companies. These financial performance measures should not therefore be regarded as substitutes for measures defined according to IFRS. The following key performance indicators are not defined according to IFRS, unless otherwise stated.
Estimated actual deferred tax has been calculated at approximately 4 per cent based on a discount rate of 3 per cent. Furthermore, it has been assumed that loss carryforwards are realised over four years with a nominal tax rate of 21.4 per cent, which gives a net present value for deferred tax assets of 19.7 per cent. The calculation is also based on the property portfolio being realised over 50 years, with 10 per cent being sold directly with a nominal tax rate of 20.6 per cent and the remaining 90 per cent being sold indirectly via companies with a nominal tax rate amounting to 6 per cent, which gives a net present value for deferred tax liabilities of 4 per cent.
Interest-bearing liabilities divided by shareholders' equity.
Interest-bearing liabilities divided by rolling twelve-month net operating income less central administration.
Properties in which a conversion or extension is in progress or planned that has a significant impact on the property's net operating income. Net operating income is affected either directly by the project or by limitations on lettings prior to impending improvement work.
Cash flow from operating activities (after changes in working capital) divided by the average number of shares outstanding.
Parent Company shareholders' share of earnings after tax for the period, divided by average number of shares outstanding during the period. Definition according to IFRS.
Profit from property management less tax at a nominal rate attributable to profit from property management, divided by average number of shares. Taxable profit from property management is defined as profit
from property management less such amounts as tax-deductible depreciation and remodelling.
Shareholders' equity according to balance sheet.
Shareholders' equity according to balance sheet following the reversal of fixed-income derivatives and deferred tax according to the balance sheet. Adjusted for actual deferred tax instead of nominal deferred tax.
Shareholders' equity according to balance sheet following the reversal of fixed-income derivatives and deferred tax according to the balance sheet.
Estimated market rent for vacant rents divided by the annual rental value for the entire property portfolio.
Shareholders' equity including non-controlling interest divided by total assets.
Parent Company shareholders' share of equity according to the balance sheet, divided by the number of shares outstanding at the end of the period.
Lease value divided by rental value at the end of the period.
Net operating income including ground rent less central administration in relation to net interest items (interest expenses less interest income).
Properties that are being actively managed on an ongoing basis.
Land and development properties and properties in which a new
construction/complete redevelopment is in progress.
Stated as an annual value. Index-adjusted basic rent under the rental agreement plus rent supplements.
Interest-bearing liabilities divided by the carrying amount of the properties at the end of the period.
New lettings during the period less terminations to vacate.
Proportion of leases that are extended in relation to the proportion of cancellable leases.
Profit for the period/year divided by average shareholders' equity including non-controlling interest. In interim reports, the return is converted into its annualised value without taking account of seasonal variations.
Change in value of project and development properties, divided by invested capital (excluding initial value) in project and development properties during the period.
Dividend for the year divided by the share price at year-end.
Net operating income divided by rental income.
Net operating income for the period plus unrealised and realised changes in the value of properties, divided by market value at start of period plus investments for the period.
*This key performance indicator is operational and is not regarded as an alternative performance measure according to ESMA's guidelines.
Interim Report Jan–June 2021 9 July 2021, 7.30 am CET Interim Report Jan–Sep 2021 20 October 2021, 7.30 am CET Year-end report 2021 7 February 2022, 12.00 noon CET
12.01.2021 Nominating Committee's proposal concerning Board of Directors and Chair of Fabege AB (publ) 14.01.2021 Green Fabege pursuant to CICERO 15.01.2021 Convendum signs agreement with Fabege for its own building at Stureplan
26.01.2021 Klaus Hansen Vikström leaves his consulting role at Fabege 27.01.2021 Nationalarenan 3 – Scandinavia's first 'Plushus' hotel 04.02.2021 Year-end report 2020 05.02.2021 Fabege launches share buyback 15.02.2021 Fabege appoints Fred Grönwall as its new Head of Technical Operations 23.02.2021 Notice of Annual General Meeting of Fabege AB (publ) 01.03.2021 Fabege publishes its Annual Report and Sustainability Report for 2020 10.03.2021 Monika Mundt-Petersen to develop strategy for Fabege's large housing development rights 12.03.2021 Fabege signs land allocation agreement in Flemingsberg 18.03.2021 Parkhuset – the innovation project with only half the climate impact
19.03.2021 Fabege acquires land for further long-term urban development in Solna 24.03.2021 Fabege appoints Johan Zachrisson as its new Business Development Manager and member of the Executive Management Team
25.03.2021 Resolutions made by Fabege's Annual General Meeting on 25 March 2021 31.03.2021 Fabege and SHH divest rental apartments in Kista
There will also be an online video presentation on the Group's website, in which Stefan Dahlbo and Åsa Bergström present the report on 26 April 2021.
Box 730, SE 169 27 Solna Visitors: Gårdsvägen 6, top floor, SE 169 70 Solna, Sweden
Phone: +46 (0)8-555 148 00 Email: [email protected]
Corporate registration number: 556049-1523 Registered office of the Board of Directors: www.fabege.com
STEFAN DAHLBO President and CEO
+46 (0) 8 555 148 10 [email protected]
ÅSA BERGSTRÖM Vice President and CFO
+46 (0) 8 555 148 29 [email protected]
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