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Fast. Balder

Annual Report Mar 25, 2021

2887_10-k_2021-03-25_4a042974-a203-4dd1-ac20-0f86ebd6fb7b.pdf

Annual Report

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ANNUAL REPORT 2020

CONTENTS

INTRODUCTION

  • 2 This is Balder
  • 3 CEO's comments
  • 5 Covid-19
  • 6 Balder's share and owners

OPERATIONS

  • 11 Value creation and business model
  • 12 Trends
  • 13 Market
  • 14 Operations

FINANCE

  • 20 Current earning capacity
  • 21 Financing

SUSTAINABILITY

  • 24 The UN Sustainable Development Goals
  • 25 Framework and sustainability work
  • VALUATION

28

30 Property portfolio

Coworkers

ASSOCIATED COMPANIES

34 Associated companies

FINANCIAL INFORMATION

  • 37 Contents
  • 38 Report of the Board of Directors
  • 42 Opportunities and risks
  • 46 Financial statements
  • 54 Accounting policies and notes
  • 84 Audit Report

CORPORATE GOVERNANCE

  • 87 Chairman's statement
  • 88 Corporate Governance Report
  • 93 Auditor's statement
  • 94 Board of Directors
  • 95 Management

SUSTAINABILITY INFORMATION

  • 96 Detailed sustainability information
  • 103 GRI index
  • 105 Auditor's statement

ADDITIONAL INFORMATION

  • 106 Property list
  • 121 Project list
  • 124 Definitions
  • 125 Contact details, Annual General Meeting and calendar

The cover photo shows Hovås Höjd, an area south of Gothenburg where Balder is building 138 apartments and 10 town houses.

SEKm 4,244

1) Refers to profit from property management attributable to the parent company's shareholders.

1

Fastighets AB Balder is a listed property company which aims to meet the needs of different customer groups for commercial premises and housing based on local presence. The Group owns, manages and develops homes and commercial properties in Sweden, Denmark, Finland, Norway, Germany and the UK, creating attractive, secure areas for people to live and where new businesses can be developed.

NUMBER OF EMPLOYEES 824

NEWLY BUILT PROPERTIES WITH ENVIRONMENTAL CERTIFICATION

100%

NUMBER OF SQ.M. UNDER CONSTRUCTION

225,765

MARKET CAPITALISATION, SEK MILLION

79,990 The Balder share is listed on Nasdaq Stockholm, Large Cap.

PROJECT LÅNGSTRÖMSALLÉN, GOTHENBURG

"WE HAVE A LARGE PORTFOLIO WITH EXTREMELY ATTRACTIVE BUILDING RIGHTS AND WILL BE LAUNCHING SEVERAL EXCITING PROJECTS DURING THE YEAR AHEAD."

CEO COMMENT

CONTINUED BOOM IN HOME-BUILDING DURING THE PANDEMIC

The past year has been eventful in many different ways. The outbreak of the Coronavirus pandemic has had an extremely strong impact on society and on global stock markets and unfortunately, we have not seen the end of it yet.

For Balder, the most important financial goal is to increase our profit from property management and our earning capacity on a long-term basis. This requires both that the existing property portfolio develops positively and that we find new investments with a good balance between risk and reward.

Despite the turbulence and uncertainty, we continued to develop the operations during the year. During 2020, profit from property management increased by 5% and the net asset value by 13%. The profit was weighed by lower revenue from hotel properties, lower earnings from Collector and rent discounts due to the pandemic. Smaller changes in value in respect of our investment properties meant that profit after tax decreased to SEK 36.79 per share (49.77). Current earning capacity per share improved by 12 % compared to the previous year-end.

The impact of the pandemic

Since early in the spring of 2020, the world has been dominated by the ongoing pandemic. Apart from those who are directly impacted and become sick, it is very sad on the economic front to see everyone who is affected, through no fault of their own, with businesses in particularly badly hit parts of the economy.

Balder has taken a number of measures to handle the current situation. We are trying as far as possible and in different ways to support those of our tenants that are experiencing most difficulties. The future development is uncertain and it is very important that the operations are flexible and prepared for new challenges.

The rental income during the quarter has been received on the same level as the previous quarters. For the first quarter 2021 approximately 99 % of the rents due on 31 December have been paid.

Continued access to financing

The investments in our residential projects continued according to plan during the year. We perceive strong demand for rental apartments in all of our markets and also for tenant-owner's apartments in Sweden. We have a large number of apartments under construction and many where construction will start in the coming years.

Access to financing on good terms remained favourable during the year and the Group has a strong liquidity position. At the end of the year, we carried out a directed share issue of 6,500,000 Class B shares. Subscribers to the issue consisted of a large number of Swedish and international institutional investors.

To date, we have made the assessment that the best total return for Balder's shareholders is achieved by reinvestment of the profits generated. The goal is also the same going forward and during the year we also invested in a number of interesting projects and companies.

A number of excellent acquisitions

During the year, we entered into an agreement to acquire Masmästaren with properties in Falun/ Borlänge, Västerås, Uppsala and Nacka. The portfolio consists of approx. 250,000 sq.m., with a property value of approx. SEK 5 billion, which is evenly divided between residential properties and commercial properties.

Among other larger investments, I would like to mention the strengthening of our position in Norway, due to investments in Entra equivalent to 18% of the total share capital and in 50% of Anthon B NiIsen Eiendom. The latter has a very good property portfolio in the Oslo region consisting of both investment properties and future projects, and a really excellent organization with competent employees.

Another positive transaction I would also like to highlight is the structural transaction we carried out with Serneke at the end of the year. It feels very gratifying to be able to contribute to the realisation of such a unique urban development project as Karlatornet. The investment in Karlatornet is included as part of a long-term transaction between Balder and Serneke, which comprises almost 1,400 rental apartments and just over 12,000 sq.m. of commercial premises.

Development of associated companies

The profit from property management decreased compared to last year but the net profit for the year increased slightly, over time though I believe that this group of companies will also continue to generate increasing profit from property management.

Focus on sustainability

Balder has signed the Global Compact, which is the UN's principles for companies in the areas of human rights, labour, anti-corruption and the environment and we are working to comply with these principles and to help meet the global sustainable development goals. We also notice a continued increased

engagement on sustainability issues from our stakeholders, for example from investors, customers and employees. We are proud of the initiatives we are pursuing in this area, including certifying all new buildings and working actively with social issues in our residential areas.

Internal engagement

The day-to-day operations have obviously needed to be adapted to the prevailing circumstances. Our employees contribute in many different ways and during the past year, all colleagues have participated and made a great number of extraordinary efforts, many times over and above their own job descriptions. I want to take this opportunity to thank all of our excellent employees that help out when needed in order to support both our tenants and one another.

A different anniversary

In the middle of the pandemic and during this very unusual period, we have also passed Balder's 15th anniversary. I look back on the past 15 years on all we have accomplished together in the Balder family with great happiness and enthusiasm. Today, we have more than 800 employees and we are operating in many places in several countries. Balder as a company and investment platform is continuing to develop well over time.

Future outlook

On my own behalf and on behalf of our shareholders, I want to take this opportunity to express a big and warm thank you to all of you in the Balder family for your really amazing efforts during the year. I look forward with great curiosity to Balder's continued journey. In spite of the difficult times right now we are trying to see over the brow of the next hill and to continue developing the business together. The future is always uncertain but it is bright and filled with opportunities.

Erik Selin

Chief Executive Officer

IMPORTANT EVENTS IN 2020

  • Balder invests together with Anthon B Nilsen Eiendom in Norway through the acquisition of 50% of the company.
  • Masthuggskajen, which includes Balder's Draken project, is awarded for sustainable urban development and is named Citylab Project of the Year.
  • Balder agrees to acquire Masmästaren, taking up occupancy in Q1 2021.
  • Eva Sigurgeirsdottir is appointed new Director of Economy for the Group.

  • Through a structural transaction with Serneke Balder acquires 50% of the shares in Karlatornet AB.

  • Balder acquires just over 18% of the shares in Entra ASA.
  • Balder undertakes a directed share issue of 6.5 million Class B shares, raising approx. SEK 2,930 million.

HOW BALDER HAS HANDLED COVID-19

In 2020, the world changed in a way that no one could have predicted. Like all companies, Balder was affected by the ongoing pandemic during the year.

Future developments are uncertain, and it is important that the business is flexible and prepared for any new challenges that arise. Balder follows the advice and guidelines issued by the government and authorities, and during the year has taken a number of measures to deal with the prevailing situation. Balder has a stable organisation, and during the year continued to maintain a high tempo, and has therefore not needed to take any action, for example in the form of temporary or permanent layoffs.

RESIDENTIAL CUSTOMERS

Around 60% of the property portfolio consists of homes. Balder is constantly carrying out a large number of activities in the company's areas, not just during the pandemic. In order to support both tenants and society at large in the prevailing situation, the ordinary activities have been supplemented by adapted activities.

One example of this was that when upper secondary schools went over to remote teaching in the spring, Balder provided premises at several locations for upper secondary school students to use for their studies. At some places the company also provided lunch for the students. Residential tenants were also given information about where they can turn for help or to become involved themselves in lending a hand.

PROPERTY DEVELOPMENT

Balder continues to develop its property portfolio through new production and renovation. Projects where construction is under way are running to plan. For those projects where construction has not yet started, planning is continuing as before. During the spring, some construction launches were put on hold temporarily, but later on in the year production started once more according to plan, and all projects that were on hold have started.

INVESTORS

The strong impact that the pandemic has had on society has so far had a limited effect on the company's financing. In these times, good liquidity and the fact that the company's financing needs are secured is of the utmost importance. Balder continued to have good access to financing during the year, and during the second half of the year bonds were issued to a total value of just over SEK 1 billion. At the turn of the year, Balder has available liquidity and loan commitments of SEK 20,500 million, which can be used if the need were to arise.

SOCIETY

As well as offering support to tenants, during the year Balder carried out a number of activities to support society at large during the ongoing pandemic. At the Östra Hospital in Gothenburg, where many of Region Västra Götaland's Covid-19 patients are being cared for, Balder provided parking spaces where healthcare staff could park for free during the spring. Balder also took part in an initiative in May in which several major companies took turns to pay for lunch for healthcare staff at the Östra Hospital.

COMMERCIAL CUSTOMERS

Since the pandemic began, Balder has maintained an ongoing dialogue with rental tenants and has striven as far as possible to support those experiencing cash flow problems as a consequence of the pandemic.

A number of requests for rental reductions were received in the commercial portfolio, and these cases have been dealt with on an ongoing basis to find the best possible solution and to support these tenants. In many cases, agreements were reached on a transition to monthly payments or the postponement of rental payments. Of the total property portfolio, about 8% consists of hotels, an industry that was hard hit during the pandemic.

To support commercial tenants, Balder has also collected special offers from them and is helping to market the businesses.

COLLEAGUES

Day-to-day activities have been adapted to the prevailing circumstances and employees are contributing in many different ways by doing jobs different to their normal ones. Employees have been given information relating to the pandemic on an ongoing basis, and those who are able have also been given the conditions to work from home. Other measures have also been taken, such as extended cleaning in the offices and reduced numbers of business trips and physical meetings.

BALDER'S SHARE AND OWNERS

Balder's Class B share is listed on Nasdaq Stockholm, Large Cap. The net asset value per share reported positive development during the year and increased by 13%.

Balder's market capitalisation as of 31 December totalled SEK 79,990 million (77,976). The price of Balder's Class B share was SEK 428.90 (433.20) at the year-end, representing a fall of 1% during the year.

Share capital

Balder carried out a directed share issue during November of 6,500,000 Class B shares, which brought in SEK 2,930 million after issue costs. For existing shareholders, the issue means a dilution effect of 3.61% in relation to

the number of shares and 2.31% in relation to the number of votes. After the share issue and as of 31 December, the share capital in Balder totalled SEK 186,500,000 distributed among 186,500,000 shares, of which 11,229,432 shares are Class A shares and 175,270,568 are Class B shares. Each share has a quota value of SEK 1.00. The total number of outstanding shares is 186,500,000. Each Class A share carries one vote and each Class B share carries one tenth of one vote.

ANALYSTS FOLLOWING BALDER

David Flemmich, Nordea Erik Granström, Carnegie Fredric Cyon, Carnegie Tobias Kaj, ABG Sundal Collier Jan Ihrfelt, Kepler Cheuvreux Albin Sandberg, Kepler Cheuvreux Philip Hallberg, Danske Bank Johan Edberg, Handelsbanken Stefan Andersson, SEB Markus Henriksson, Pareto Simen Mortensen, DNB

THE BALDER SHARE'S PERFORMANCE

2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
Data per share
Average number of shares, thousand 180,515 180,000 180,000 180,000 173,598 162,753 161,786 159,537 159,537 158,656
Net profit for the year, SEK 36.79 49.77 51.71 38.71 30.38 28.98 18.10 10.11 6.69 4.87
Profit from property management before
tax, SEK
23.51 22.35 18.35 14.74 11.89 9.71 6.64 4.57 3.73 3.00
Outstanding number of shares, thousand 186,500 180,000 180,000 180,000 180,000 172,397 162,397 159,537 159,537 159,537
Equity, SEK 312.12 272.28 223.03 173.86 139.23 103.24 70.10 52.14 42.15 35.57
Long-term net asset value (NAV), SEK 387.38 341.70 277.60 218.10 180.09 134.35 86.33 60.50 50.37 41.84
Share price on closing date, SEK 428.90 433.20 252.00 219.40 184.10 208.70 110.25 66.00 37.30 25.30
Change in share price, % –1 72 15 19 –12 89 67 77 47 –14
Dividend, SEK
Market capitalisation
Market capitalisation, SEKm 79,990 77,976 45,360 39,492 36,371 39,099 21,404 13,889 7,800 5,104

WHY INVEST IN BALDER?

1. THE BALDER SHARE HAS SEEN STABLE GROWTH SINCE ITS STOCK EXCHANGE LAUNCH

Balder's most important goal is to increase the profit from property management per share over time. Over the past five years, the profit from property management has increased by an average of 19% per year and the net asset value by an average of 24% per year. During the same period, the share has been traded at an average of 106% of the net asset value and 16 times the profit from property management.

Positive development during the year

Equity per share totalled SEK 312.12 (272.28) as of 31 December, representing an increase of 15% (22) during the year. The net asset value per share (NAV) during the same period increased by 13% (23) to

SEK 387.38 (341.70). The difference between equity and net asset value is that derivatives, net of deferred tax liabilities and deferred tax assets are reversed in net asset value.

The share price/net asset value ratio was 111% (127) at the year-end. The profit from property management before tax attributable to the parent company's shareholders totalled SEK 4,244 million (4,023), which represents an increase of 5% (22) compared with the previous year. The profit from property management per share increased by 5% (22) during the year.

135 million shares were traded during the year (78), representing an average of 537 thousand

shares per trading day (319) or SEK 219 million (106) based on the average price during the year. This turnover represents an annual turnover rate of 73% (43), and if Erik Selin Fastigheter AB's shares are excluded, the annual turnover represents approx. 112% (68) of the outstanding shares. The proportion of foreign-owned shares is 33 % (25).

At the end of the year, Balder carried out a directed share issue of 6,500,000 Class B shares. Subscribers to the share issue were a large number of Swedish and international institutional investors.

SHARE PRICE/NET ASSET VALUE AND SHARE PRICE/PROFIT FROM PROPERTY MANAGEMENT

SHARE PRICE PERFORMANCE, NET ASSET VALUE AND PROFIT FROM PROPERTY MANAGEMENT

THE SHARE'S PERFORMANCE OVER TIME

The charts show the development of the share price in relation to net asset value and profit from property management. The chart on the right provides an illustration of the price per share, net asset value per share and profit from property management per share. The chart on the left shows the price per share in relation to net asset value per share and profit from property management per share.

2. BALDER HAS LONG-TERM, ENGAGED OWNERS DIVIDEND POLICY

The principal owner of Fastighets AB Balder is Erik Selin Fastigheter AB, which owns 35.1 % of the capital and 48.8 % of the votes together with Arvid Svensson Invest AB and a number of institutional investors.

At the end of 2020, the total number of shareholders was approximately 22,000 (17,000), and 45% (47) of the share capital was held by the Board and Management.

CARRYING AMOUNT PER REGION total property portfolio, %

Balder's goal is to generate the best long-term total yield for its shareholders. The assessment continues to be that this is best achieved by reinvesting the profits in the business in order to create further growth. The dividend will therefore remain low or will not be declared at all in the next few years.

Balder will instead continue to grow by investing in existing properties, new construction and the acquisition of new properties. The Board proposes to the Annual General Meeting that no dividend for the share should be paid for the financial year 2020.

OWNERSHIP LIST, 31/12/2020

Owners Class A shares Class B shares Total number of shares Capital, % Votes, %
Erik Selin via company 8,309,328 57,210,900 65,520,228 35.1 48.8
Arvid Svensson Invest AB 2,915,892 13,542,540 16,458,432 8.8 14.8
Swedbank Robur fonder 8,123,128 8,123,128 4.4 2.8
SEB Investment Management 6,846,649 6,846,649 3.7 2.4
Handelsbanken Fonder AB 5,649,972 5,649,972 3.0 2.0
Länsförsäkringar fondförvaltning AB 5,326,134 5,326,134 2.9 1.9
AMF Försäkring och Fonder 3,674,461 3,674,461 2.0 1.3
Vanguard 3,303,843 3,303,843 1.8 1.1
CBNY Norges Bank 2,338,549 2,338,549 1.3 0.8
Livförsäkringsbolaget Skandia 1,857,429 1,857,429 1.0 0.6
Others 4,212 67,396,963 67,401,175 36.1 23.5
Total 11,229,432 175,270,568 186,500,000 100 100

3. BALDER HAS A WELL-DIVERSIFIED PORTFOLIO

CARRYING AMOUNT PER PROPERTY CATEGORY total property portfolio, %

4. WITH FOCUS ON CAPITAL CITIES AND MAJOR CITIES WITH GROWTH POTENTIAL

LETTABLE AREA PER REGION

total property portfolio, %

PORTFOLIO WITH GREAT POTENTIAL

UNDER CONSTRUCTION

GROSS AREA WITH ESTIMATED CONSTRUCTION START 2022 AND ONWARDS

5. A COMPREHENSIVE PROJECT 6. A STRONG BALANCE SHEET AND LOW FINANCIAL RISK

MULTI-YEAR SUMMARY

2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
Rental income, SEKm 8,134 7,609 6,714 5,915 5,373 2,711 2,525 1,884 1,701 1,466
Profit from property management, SEKm1) 4,244 4,023 3,304 2,804 2,265 1,780 1,275 854 691 516
Changes in value of investment properties, SEKm 3,453 9,577 8,007 5,336 4,932 3,388 3,050 854 812 990
Changes in value of derivatives, SEKm –141 –180 –34 144 –114 227 –624 433 –71 –520
Net profit for the year, SEKm1) 6,641 8,958 9,308 7,118 5,474 4,916 3,128 1,738 1,162 812
Investment properties, SEKm 149,179 141,392 116,542 98,360 86,177 68,456 37,382 27,532 22,278 17,556
Development properties, SEKm 2,803 2,344 1,598
Property-related key ratios
Rental value full year, SEK/sq.m. 1,893 1,921 1,802 1,724 1,583 1,508 1,325 1,216 1,247 1,163
Rental income full year, SEK/sq.m. 1,809 1,850 1,737 1,651 1,507 1,455 1,254 1,148 1,166 1,088
Economic occupancy rate, % 96 96 96 96 95 96 95 94 94 94
Vacancy rate, % 4 4 4 4 5 4 5 6 6 6
Surplus ratio, % 76 74 73 71 68 72 70 68 68 68
Carrying amount, SEK/sq.m. 32,114 31,613 28,013 24,952 21,473 18,622 17,172 13,985 14,439 12,467
Number of investment properties 1,362 1,298 1,185 1,148 1,220 1,177 486 498 432 433
Lettable area, thousand sq.m. 4,502 4,304 4,025 3,739 3,806 3,430 2,177 1,969 1,543 1,408
Financial key ratios
Return on equity per share, % 12.4 20.1 26.1 24.7 24.6 32.3 29.7 21.5 17.0 14.3
Interest coverage ratio, times 5.3 5.2 4.6 4.3 3.7 5.1 3.4 2.9 2.4 2.1
Equity/assets ratio, % 38.6 38.3 38.4 35.5 36.1 34.1 35.5 37.3 34.8 35.2
Debt/equity ratio, times2) 1.3 1.4 1.4 1.5 1.5 1.6 1.6 1.5 1.7 1.6
Net debt to total assets, %2) 46.1 48.4 50.1 51.8 51.8 54.6 54.6 53.3 57.3 56.0
Net debt/EBITDA, times2) 13.2 13.0 12.9 12.9 13.2 18.1 12.1 12.2 11.8 11.1

1) Attributable to parent company's shareholders.

2) The key ratios for 2020 include SEK 3,009 million that is included in Other liabilities and relates to a commitment in respect of the purchase of shares in Entra ASA.

BALDER 2020 OPERATIONS

10 FASTIGHETS AB BALDER ANNUAL REPORT 2020

PROJECT HOTEL DRAKEN, GOTHENBURG

HOW BALDER CREATES VALUE

In close collaboration with customers and other actors in society, Balder contributes to the long-term development of areas and city districts. This creates value for everyone who spends time every day in the company's homes, offices, premises and hotels, and for other stakeholders.

DRIVING FORCES

Aside from global trends such as urbanisation, digitalisation and sustainability, Balder's operations are also affected by a number of more industry-specific trends, which differ to some extent depending on, for example, property category and geography.

> Read more on page 12

Balder's stakeholders consist of, for example, tenants, business partners, employees and society at large, and there are to some extent different issues that are important for each group. Operations are developed by continuously analysing the issues that are most important.

> Read more on page 96

STRATEGY & GOALS OPERATIONS VALUE CREATED

Balder aims to be a long-term owner with satisfied customers and employees, and stable cash flows. The company generates good profits from property management by means of a high level of activity and efficient management.

FINANCING

Balder secures financing that is sustainable in the long term through a diversified financing structure.

> Read more on pages 20 –22

FINANCIAL GOALS

NET DEBT TO TOTAL ASSETS

< 50%

> 40%

INTEREST COVERAGE RATIO >2.0 times

Balder continues to build up a significant portfolio of building rights and in the longer term is producing both apartments and com-PROPERTY DEVELOPMENT

PROPERTY MANAGEMENT

mercial properties.

Balder's own employees are responsible for property management, finance, letting and operations, creating proximity to the customer and good awareness of both the area and the property.

TRANSACTIONS

Balder makes acquisitions continuously in capital cities and major cities that are developing positively in order to further enhance the property portfolio.

> Read more on pages 14–16

A FOCUS ON SUSTAINABILITY IN ALL OPERATIONS

Work on sustainability is carried out throughout the organisation, and is divided into five overarching focus areas.

> Read more on pages 24–28 and 96 –104

average

increased net

OWNERS 13%

number of homes completed during the year.

new employees started work at Balder during the year.

sq.m. homes

181,472

SOCIETY

EMPLOYEES

40

CUSTOMERS 1,850

A CHANGING EXTERNAL ENVIRONMENT

Like all companies, Balder is affected by developments in the external environment. The company works continuously to monitor trends and take advantage of the opportunities that arise.

GLOBAL TRENDS

SOCIETAL DEVELOPMENT AND URBANISATION

Growing cities are contributing to higher demand for homes and commercial premises. Recent years have seen a constant increase in people moving into major cities. This trend will probably continue, with medium-sized cities also growing at the same time with more people moving in.

DIGITALISATION

Digitalisation and AI bring opportunities for connected properties and greater transparency, alongside new kinds of services. This can also bring a risk of increased vulnerability and inadequate security, and it places greater demands on security when it comes to the information infrastructure and IT.

CLIMATE CHANGE

Buildings account for a significant proportion of emissions in society, both from existing buildings and from the construction process in new production. Financial risks associated with climate change are also becoming evident in many places, for example the negative impact of floods, fires or extreme heat and cold.

INDUSTRY-SPECIFIC TRENDS

STRONG HOUSING MARKET

Low interest rate levels in recent years have contributed to a strong housing market. As a consequence of the pandemic and uncertainty about how the global economy will develop, demand may fall, although there are no signs of this yet. There may instead be an increase in demand for larger homes, further away from city centres, as more people continue to work from home.

Balder owns properties in the metropolitan regions and other major cities with continued growth. Balder's property portfolio consists to 60% of homes, and the Group has a strong project portfolio for the production of new homes in attractive locations in both big cities and many regional towns. This gives the Group large potential to meet increased demand for both homes and premises.

CHANGED SHOPPING PATTERNS

E-commerce has increased steadily in recent years, and this year received another significant boost as a consequence of the pandemic. This means increased demand for logistics properties, while demand is falling for central retail locations.

Balder has both centrally located properties and large logistics and retail properties in outer areas. Like all property owners, the company has seen a degree of slowdown in demand for central retail premises, and is working continuously to identify solutions and new areas of application.

NEW TECHNOLOGY BRINGS NEW OPPORTUNITIES

The development of digital solutions for smart houses is very much on the move and will bring new opportunities to property owners. By investing in digital solutions and new technology, companies can achieve better opportunities, for example to monitor properties.

Balder works continuously to increase the degree to which properties are digitalised, partly to improve security and to realise the opportunity for better control and optimisation. There are also major opportunities to enhance service to customers by being able to offer new kinds of services.

NEW WAYS OF WORKING

Recent years have seen the emergence of the concept of coworking, in which companies share offices and communal areas and functions. This, combined with an increase in remote working as a consequence of the ongoing pandemic, may result in reduced demand for large office premises in future.

Balder has stable, long-term partnerships with office tenants, and also has a diversified contract structure in which no customer accounts for more than 4.0% of the total rental income.

INCREASED DEMANDS FOR GREEN PROPERTIES

Requirements for sustainable and environmentally certified properties continue to increase. In recent years, increasing demands have been made from the financial market, where green properties are also favoured when it comes to loans and other financing solutions. Increased demands are also evident among customers for sustainable homes and offices.

Balder adopts a structured approach to reduce the company's climate impact, for example by continuously optimising the running of its properties, increasing the proportion of renewable energy, reducing waste and increasing recycling and reuse. This also reduces the costs of consumption and waste management, while at the same time acquiring greater knowledge of physical and financial exposure to climate risks. All electricity purchased for the Swedish and Finnish properties is green electricity, and all properties built on behalf of the company must be certified as a minimum according to the Miljöbyggnad Silver rating or equivalent. The company monitors the development of rules and guidelines in order to adapt the business, for example, to the upcoming EU taxonomy.

POSITIVE DEVELOPMENT IN THE PROPERTY MARKET

There was a very high level of interest in the Nordic property market in 2020. A continued low interest rate, a high level of liquidity in the global capital market, increased rental levels for office and logistics properties as a consequence of profitable enterprise and demand for high standards, low vacancy rates and a very strong residential market, where there is a housing shortage in virtually all major cities, all mean that the outlook for the property market in the Nordic region will probably remain positive during 2021.

Another important reason for a strong property market is the volatility prevailing in the stock exchanges as well as very low capital returns from interest-bearing securities. This is contributing to investments in directly-owned properties being viewed as a better, more secure alternative to capital investment.

The market was affected by the ongoing pandemic during the year. The biggest effect was seen among hotel and retail properties, the latter category being affected by the increase in e-commerce in both the food and non-food retail sectors.

The residential market

A high rate of population growth and virtually nonexistent vacancies in strong sub-markets has caused demand to invest in both newly produced residential properties and existing property portfolios to increase strongly in recent years. All in all, it is believed that the market conditions for residential properties continue to be good, on the condition that the properties are located within a growth region.

Stricter repayment requirements and tougher rules on providing credit have had a major impact on the market for tenant-owner's homes, even though demand remains strong in many markets. This, combined with the general housing shortage and urbanisation, has increased the demand for

newly renovated and newly produced rental apartments with relatively high rent levels.

The office market

Demand in the office rental market was considered good at the end of the year, with a high level of activity, strong rental growth and low vacancy rates especially in the major cities. The objects that attract both tenants and investors are characterised by flexible, space-efficient, environmentally certified buildings with high technical standards and proximity to public communications.

The strong rental development in recent years in attractive city centre locations has also affected rents outside CBDs1). As rental levels rise in more central locations, so does interest among tenants to locate outside city centres. This is in turn resulting in increased interest among investors who see rental potential in properties in locations on the edge of cities.

Outlook

The good rental development of recent years in the office market in central locations will probably level out as a consequence of an economy that is slowing down and the ongoing pandemic. One possible scenario is a transition to other ways of utilising the premises, for example by creating more open, creative spaces combined with cellular offices for individual work.

As far as demand for housing is concerned, the economic risks are limited. In this context it is rather adjustments to the granting of credit that may continue to change the market for both owned and rented housing.

Interest rates are expected to remain at historically low levels during the years ahead. Access to capital remained good at the end of the year, underpinning high demand for property investments, despite the ongoing pandemic.

KEY RATIOS 2020

Sweden Denmark Finland Norway
Transaction volume, SEK billion 188 91 63 99
Yield from office properties, CBD1) in capital cities, % 3.25 3.75 3.50 3.40
Rental levels, CBD1) in capital cities (SEK/sq.m./year) 8,200 3,200 4,550 5,500
Foreign buyers, % 27 62 52 13

1) CBD = Central Business District.

Source: Pangea Property Partners

CONTINUED DEVELOPMENT OF THE BUSINESS

Balder's property portfolio is developed through transactions, property development and customer-oriented property management. The company has a diversified portfolio of residential properties, commercial properties and projects in capital cities and other large cities, primarily in Sweden, Denmark, Finland and Norway.

Having satisfied customers is one of Balder's most important goals, and there is a major focus on this work in the organisation. The objective is that commercial customers shall develop in Balder's properties and that their various needs in terms of the size of premises and geographical location shall be met over time. For residential customers, the objective is that they shall be happy in their homes and in their residential area, and live in Balder's properties for a long time.

SALES

Every other year a CSI (Customer Satisfaction Index) survey is conducted, the results of which form the basis of future activities and prioritisations. CSI surveys are also conducted among new occupants in completed projects. In addition to this, Balder has continuous dialogues with customers, for example in the form of regular meetings with tenants.

ACQUISITIONS

per property category, SEKm

LEASE STRUCTURE, 31/12/2020

Maturity
date
Number of leases Proportion, % Contracted rent, SEKm Proportion, %
2021 1,276 37 342 4
2022 834 24 409 5
2023 559 16 370 5
2024 418 12 318 4
2025– 399 11 1,809 22
Total 3,486 100 3,247 40
Residential1) 41,296 4,872 59
Car park1) 5,503 23 0
Garage1) 5,249 72 1
Total 55,534 8,214 100

1) Normally has a period of notice of three months.

PROPERTY MANAGEMENT 1,850

Balder offers a wide range of premises and homes in different locations and at different rental levels. In all areas where Balder owns properties, the company has its own employees who are responsible for property management, letting and operations. This produces fast decision-making paths, proximity to the customer, good awareness of areas and properties, and the opportunity to adopt a long-term approach to property management.

Balder's property portfolio consists of approximately 60% homes, and the company offers apartments in both central locations and on the outskirts of cities, both in the form of newly produced rental apartments and rental apartments in older properties. At the end of the year the Group had about 41,000 residential contracts in total.

Balder's property portfolio also includes a wide variety of commercial premises. In total, Balder has approximately 2,400 commercial customers and the total floor space is approximately 1,800,000 sq.m. The occupancy rate in the commercial portfolio is around 94%.

TOTAL OCCUPANCY RATE 96%

BALDER'S TEN LARGEST CUSTOMERS

  • The municipality of Gothenburg
  • I.A. Hedin Bil AB
  • ICA Sverige AB
  • Kesko Oyj
  • Ligula Hospitality Group
  • Scandic Hotels
  • City of Stockholm
  • Stureplansgruppen
  • The municipality of Sundbyberg
  • Winn Hotel Group

TOTAL ACQUIRED 3,491 SEKm

As a large, long-term property owner, Balder develops both small projects involving individual properties and larger areas and city districts.

PROPERTY DEVELOPMENT

Within the framework of property development there is both new production of homes and premises and a large number of projects involving the renovation of existing properties.

For Balder, it is important to control the whole value chain from land acquisition to the long-term management of completed projects. Development takes place in the form of long-term work in close collaboration with municipal authorities and other stakeholders. The development process extends over different phases and often takes several years. During the year, Balder has continued to strengthen its organisation, not only in

production, but also in sales and marketing.

The company has built up a significant portfolio of building rights for the production of not only rental and tenant-owner's apartments, but also commercial properties. In many areas, new homes are being built where Balder already owns properties, contributing to a densification of areas and an increased range of mixed forms of housing, thus contributing towards sustainable and responsible urban development.

COMPLETED HOMES IN 2020

In 2020, Balder completed just over 1,850 homes, of which 1,420 for own management and 430 for sale. At year-end approximately 2,900 homes were under construction in Sweden, Denmark and Finland as well as a total of approximately 44,000 sq.m. of commercial properties.

Balder strives to own centrally located properties in capital cities and cities showing positive development. Investments are being made in particular in areas where the company is already active, with an emphasis on Stockholm, Gothenburg, Helsinki and Copenhagen. The rates of growth and new occupancy have remained high in these markets, which is increasing demand for both homes and commercial premises.

During the year, Balder also expanded its presence in Norway, by the acquisition of 50% of Norwegian

company Anthon B Nilsen Eiendom AS. This transaction included the Anthon B Nilsen Group's entire property portfolio, with properties in Oslo and at Lahaugmoen, and a development portfolio of 170,000 sq.m. in Eastern Norway. At the end of the year, Balder also owned approximately 18% of the shares in Entra ASA, a company that owns and develops office properties in Norway, with a focus on centrally located properties in Oslo, Bergen, Stavanger and Trondheim.

PROJECTS UNDER CONSTRUCTION FUTURE PROJECTS Q1 2021–Q1 2022

PROJECT PROPERTIES FOR OWN MANAGEMENT

Lettable
area, sq.m.
Number of
apartments
Estimated total
investment, SEKm
Sweden commercial 44,293 1,841
Sweden residential 14,149 265 470
Finland 33,329 958 1,439
Denmark 85,691 1,053 3,108
Total 177,462 2,276 6,859

PROJECT PROPERTIES FOR OWN MANAGEMENT

Lettable
area, sq.m.
Number of
apartments
Estimated total
investment, SEKm
Sweden commercial 14,899 306
Sweden residential 26,858 454 1,015
Finland 71,054 1,926 3,242
Denmark 30,978 456 1,170
Total 143,789 2,836 5,734

FUTURE PROJECTS WITH ESTIMATED CONSTRUCTION START 2022 AND ONWARDS

DEVELOPMENT PROPERTIES FOR SALE

Lettable
area, sq.m.
Number of
apartments
Estimated total
investment, SEKm
Sweden 39,233 556 1,892
Finland 2,277 55 105
Norway 6,793 46 292
Total 48,303 657 2,288

Danmark, 20 DEVELOPMENT PROPERTIES FOR SALE

Lettable
area, sq.m.
Number of
apartments
Estimated total
investment, SEKm
Sweden 64,722 938 3,819
Norway 24,776 276 1,207
Total 89,498 1,214 5,026

> Read more about projects on pages 121–123

LAVETTEN MODERN BUILDING WHERE NATURE MEETS THE URBAN ENVIRONMENT

In Ørestad Syd, which is Copenhagen's new green district with a blend of homes, businesses, education and culture, is Balder's property Lavetten, which was completed at the end of 2019. Lavetten is what is known as a low-energy building, which meets the requirements of the energy label A2020. The building is also certified in accordance with DGNB level Silver, which means, among other things, that great emphasis has been placed on the indoor climate, choice of materials, high standard of outdoor areas, good facilities for cyclists, security and safety, and high-class architecture.

FIXFABRIKEN URBAN DEVELOPMENT ON HISTORICAL SITE

Balder is involved in refurbishing the old Fixfabriken factory in Majorna in Gothenburg, where the company is building around 250 tenant-owner's apartments. Fixfabriken is a densification project that forms part of the City of Gothenburg's anniversary initiative BoStad2021, which aims to develop the detailed planning process and complete 7,000 homes by 2021. Fixfabriken's architecture has gained recognition on many occasions, and has been praised by, among others, the City of Gothenburg's municipal architect. Construction started on the district in 2019, and the plan is for the first occupants to move in during 2021.

ATLANTIKATU INNOVATIONS THAT REDUCE NEED FOR RENOVATION

Atlantinkatu 12 consists of two buildings in a modern urban block in Jätkäsaari in Helsinki, and is owned by SATO. The apartments have bathrooms furnished with a totally new kind of interior, with a significantly longer useful life than the standard range of bathroom fixtures and fittings. The collection, which goes underthe name of Kide, was developed by SATO's

product development expert in partnership with the Finnish company Kankarin Kaluste Oy. Thanks to the Kide range, the amount of waste generated because of furniture being replaced has been reduced by a total of 12,500 kg a year, and residents also avoid disruption in the form of bathroom renovations and maintenance visits.

SATISFIED CUSTOMERS IN FINISHED PROJECTS

Having satisfied customers is one of Balder's most important goals and a precondition for the company's financial sustainability and development. During the year, occupants moved into a number of completed tenant-owner's property projects. As part of Balder's work on customer satisfaction, buyers of tenant-owner's properties have the chance to respond to a survey, which produces a Customer Satisfaction Index (CSI) and also provides an understanding of which measures should be prioritised for increased customer satisfaction. The goal is to develop homes and areas with high levels of well-being and security.

CURRENT EARNINGS CAPACITY

The earning capacity is based on the property portfolio's contracted rental income, estimated property costs during a normal year as well as administrative expenses.

Balder presents its earning capacity on a 12-month basis in the accompanying table. The earning capacity is based on the property portfolio's contracted rental income, estimated property costs during a normal year as well as administrative expenses. The costs of the interest-bearing liabilities are based on the Group's average interest rate level including the effect of derivative instruments. Tax is calculated using the effective tax rate during each period.

The current earning capacity should not be placed on a par with a forecast for the next twelve months. The earning capacity does not contain, for example, an estimate of rental, vacancy, currency or interest rate changes.

Balder's income statement is also impacted by the development in the value of the property portfolio as well as future property acquisitions and/or property divestments. Additional items affecting the net profit are changes in value of derivatives. None of this has been considered in the current earning capacity.

CURRENT EARNING CAPACITY ON A 12-MONTH BASIS

SEKm 2020
31 Dec
2019
31 Dec
2018
31 Dec
2017
31 Dec
2016
31 Dec
2015
31 Dec
Rental income 8,545 8,000 7,000 6,240 5,800 5,045
Property costs –2,225 –2,080 –1,885 –1,720 –1,695 –1,635
Net operating income 6,320 5,920 5,115 4,520 4,105 3,410
Surplus ratio, % 74 74 73 72 71 68
Management costs and administrative expenses –675 – 670 –595 –550 –490 –425
Profit from property management from
associated companies
1,110 785 735 640 505 340
Operating profit 6,755 6,035 5,255 4,610 4,120 3,325
Net financial items incl. ground rent –1,450 –1,330 –1,125 –1,060 –1,040 –880
Minus non-controlling interests –630 –675 –565 –525 –445 –410
Profit from property management1) 4,675 4,030 3,565 3,025 2,635 2,035
Tax 2) –970 –875 –750 –650 –570 –439
Profit after tax 3,705 3,155 2,815 2,375 2,065 1,596
Profit from property management per share, SEK 25.06 22.39 19.81 16.81 13.52 10.64

1) Attributable to parent company's shareholders.

2) Refers primarily to deferred tax, which has no effect on cash flow.

Current earning capacity as of 31 December 2020 includes the acquisition of Masmästaren, with possession taken at the beginning of January 2021. In the current earning capacity, the following exchange rates were used to translate foreign subsidiaries' income statement items: EUR: 10.10 DKK: 1.36 NOK: 0.98 GBP: 11.47

FINANCING

Balder secures financing that is sustainable in the long term through a diversified financing structure.

Balder has assets in Sweden, Denmark, Finland, Norway, Germany and the UK, which means that the Group is exposed to currency risks. To reduce the risks and secure financing that is sustainable in the long term, the company therefore has a welldiversified financing structure with bonds and bank financing in several different currencies. Balder values long-term relationships with its credit providers and collaborates with a number of Nordic banks.

When a credit provider assesses the credit risk, factors considered include the properties' location and the diversification of the property portfolio with regard to geography and asset types. Balder's assets consist primarily of residential properties, which are characterised by cash flows that are stable in the long term since the risk is spread among a large number of customers. The long-term security in the cash flow from residential properties means these assets can be pledged to a higher degree than commercial properties.

Balder's property portfolio currently consists of around 60% residential properties, and a large proportion of these are located in Copenhagen, Helsinki, Stockholm, Gothenburg and some other growth areas in Sweden and Finland. The majority of Balder's commercial properties are located in the central parts of Stockholm, Gothenburg and Malmö.

Several financing sources

The single largest financing source is euro bonds issued in the European bond market, under Balder's EMTN programme, followed by bank loans in various currencies, a domestic MTN programme and a commercial paper programme in euros and Swedish kronor. Aside from these financing sources, Balder has also issued hybrid capital with a maturity of 60 years. The hybrid capital is subordinate to other financial liabilities and therefore half of it is treated as equity by credit rating agencies when calculating key ratios.

During the year, Balder also broadened the funding base by taking out loans to a total value of SEK 2,000 million with a term of ten years from Brunswick Real Estate Capital, through their third real estate credit fund Brunswick Real Estate Capital III (BRECIII).

Balder has a green framework that provides an opportunity to issue green bonds, for the purpose of financing in particular green and energy-efficient buildings, but also investments in measures to improve energy efficiency and in renewable energy.

Balder's green framework has been developed in line with the industry standard Green Bond Principles 2018. The framework has undergone an independent evaluation by Cicero Shades of Green and been awarded the rating Medium Green.

FINANCIAL GOALS

Goal Outcome
Equity/assets ratio, % min. 40.0 38.6
Net debt to total assets, % max. 50.0 46.1
Interest coverage ratio, times min. 2.0 5.3

NET DEBT TO TOTAL ASSETS

46%

AVAILABLE LIQUIDITY

20,500

SEKm

FINANCIAL KEY RATIOS

2020
31 Dec
2019
31 Dec
Interest-bearing liabilities excl. Hybrid capital, SEKm 85,476 77,590
Hybrid capital, SEKm 3,513 3,652
Available liquidity including confirmed loan commitments, SEKm 20,509 11,925
Average fixed credit term, years 5.9 5.8
Average fixed interest rate term, years 3.5 3.1
Net debt to total assets (financial covenant1) < 65), % 46.1 48.4
Interest coverage ratio (financial covenant1) > 1.8), times 5.3 5.2
Secured debt/Total assets (financial covenant1) < 45), % 15.6 16.2
Net debt/EBITDA, times 13.2 13.0
Credit rating S&P BBB Stable
outlook
BBB Stable
outlook
Calculation of net debt
Interest-bearing liabilities excl. Hybrid capital, SEKm 85,476 77,590
Other liability2) 3,009
Hybrid capital (50% is treated as equity by rating agencies), SEKm 1,757 1,826
Cash and cash equivalents and financial investments, SEKm –7,127 –2,902
Net debt 83,115 76,514

1) Financial covenants refer to obligations that Balder has to its financiers in the form of financial key ratios. 2) Other liability SEK 3,009 million relates to obligation regarding purchase of shares in Entra ASA.

In addition to green bonds, Balder also has green loans with Swedish banks, both within the Balder Group and in associated companies, and a green loan agreement with the European Investment Bank (EIB) for EUR 100 million for the development of two residential projects in Copenhagen with nearly zero-energy building (NZEB) standards.

Balder's MTN programme has a framework of SEK 15,000 million, and three issues were carried out during the year within the programme to a total value of SEK 1,150 million. The EMTN programme has a framework of EUR 2,000 million, within which an issue of EUR 300 million was carried out at the beginning of the year. At the year-end, a total of SEK 11,550 million was outstanding within the MTN programme and EUR 800 million was outstanding within the EMTN programme.

The proportion of bonds in the loan portfolio increased during the year from 53% to 57%, and the proportion of secured debt dropped in line with the recent years' issues of euro bonds and hybrid capital. At the year-end, secured debt as a proportion of total assets was 15.6%.

The net debt to total assets has also fallen in recent years and totalled 46.1% at the year-end.

DEBT MATURITY STRUCTURE, 31/12/2020

At the same time, the fixed credit term has been gradually extended, totalling 5.9 years at the year-end.

The financial commitments, covenants, that Balder has towards its financiers are a net debt to total assets of 65%, an interest coverage ratio of 1.8 times and secured debt in relation to total assets of 45%. All commitments were fulfilled with a comfortable margin at the year-end.

Investment grade rating

Balder has an investment grade rating from S&P of BBB with a stable outlook. The rating reflects, among other things, the fact that Balder has a large property portfolio that is well-diversified in terms of both property types and geography, and that Balder has stable rental income, a high and stable occupancy rate and a well-diversified loan maturity structure with a modest proportion of secured debt.

An investment grade rating from S&P means that Balder can continue to access both European and domestic capital markets, obtain long terms for tying-up of capital, diversify its funding base and thus secure long-term capital for continued growth. Balder's subsidiary SATO also has an investment grade rating from S&P of BBB with a stable outlook.

INTEREST MATURITY STRUCTURE, 31/12/2020

Year SEKm Share, % Year SEKm Interest, % Share, %
2021 9,038 10 2021 34,277 1.0 39
2022 12,029 14 2022 6,556 1.4 7
2023 11,602 13 2023 9,548 2.4 11
2024 11,170 13 2024 4,126 1.6 5
2025 9,567 11 2025 7,566 2.1 9
2026 7,717 9 2026 7,063 2.3 8
2027 5,234 6 2027 6,169 1.2 7
2028 6,647 7 2028 6,503 0.6 7
2029 928 1 2029 2,875 1.6 3
2030 2,792 3 2030 1,174 1.4 1
2031– 12,265 14 2031– 3,133 1.8 4
Total 88,989 100 Total 88,989 1.5 100

FINANCING SOURCES, %

Unsecured bonds, 56 Secured bank loans, 31 Commercial papers, 2 Unsecured bank loans, 10 Secured bonds, 1

DISTRIBUTION OF SECURED AND UNSECURED

4

6 5

FIXED INTEREST TERM, YEARS

1 2 3

22 FASTIGHETS AB BALDER ANNUAL REPORT 2020

BALDER 2020 SUSTAINABILITY

PROJECT HALLONBERGEN, SUNDBYBERG

BALDER'S WORK ON GLOBAL SUSTAINABLE DEVELOPMENT GOALS

Balder strives to contribute to achieving the UN's Global Sustainable Development Goals and has selected six of the 17 goals that are considered most relevant to the company's business activities and where the company has the greatest opportunity to have an influence.

To link these more closely to the company's operations, the associated targets have also been analysed. Balder has interpreted goals and targets in

order to identify the areas where the company has the greatest opportunity to contribute to the goals being achieved.

SUSTAINABLE CITIES AND COMMUNITIES

Sustainable cities have a very strong link to Balder's business, and the Group plays an active role in the development of entire areas and city districts. By building new homes with varied forms of tenure, Balder contributes to developing residential areas and improving security. A blend of workplaces and homes also creates more job opportunities in the local environment and creates new meeting places. Solutions for increased mobility, such as proximity to public transport, cycle paths and electric car pools are also given priority in the development of properties and areas, as are green areas for sport and recreation. Balder is also striving to promote effective waste management and to keep the areas clean and tidy.

11.1 Safe and affordable housing 11.3 Inclusive and sustainable urbanisation 11.6 Reduce the environmental impact of cities

Sustainable energy for all

Environmental sustainability is an important element of Balder's long-term value creation. In addition to maintaining a strong focus on efficient energy utilisation, the company is adapting to the increased use of renewable energy. All electricity purchased for the properties in Sweden and Finland is green electricity, and Balder also owns several wind farms in Sweden. Several properties also have solar panels and charging stations installed, and the company is working continuously on operational optimisation and efficiency improvement, by such means as additional insulation, replacing windows and so on.

7.2 Increase the share of renewable energy in the world. 7.3 Double the rate of improvement in energy efficiency.

Decent working conditions and economic growth

Balder strives to achieve greater diversity and equality, and a good work environment. A number of young people who live in the company's areas are hired as summer workers every year, and Balder also offers possibilities for work experience and work placements to students on propertyrelated study programmes, and within the framework of various local initiatives. Balder strives to achieve sustainable purchasing, following up on suppliers and buying local wherever possible.

8.4 Improve resource efficiency in consumption and production. 8.6 Promote employment, education and training for young people. 8.8 Protect labour rights and promote a safe and secure work environment for all.

Sustainable industry, innovation and infrastructure

Balder supports sustainable industrialisation and innovation, and works continuously with more efficient resource utilisation. The company also strives to increase the proportion of recycled and reused material in both renovation and new construction, and to increase the use of new technology by such means as increased digitalisation of properties.

9.2 Promote inclusive and sustainable industrialisation. 9.4 Upgrade all industry and infrastructure for increased sustainability.

Sustainable consumption and production

To promote sustainable consumption and production, Balder strives to be prudent in its consumption of materials, with a focus on increased recycling. Tenants are also encouraged in various ways to increase their recycling. The company will also continue to increase the level of reuse and recycling in renovation projects, for example, to contribute to increased circularity, and to strive to increase levels of sorting at source and reuse.

12.4 Responsible management of chemicals and waste. 12.5 Substantially reduce waste generation.

Climate action

Buildings account for a large proportion of the overall climate impact in society, and reducing this is an important issue for Balder. This includes both the management of properties and the construction phase. In Balder's business activities, transport operations also account for a large impact on the environment and climate, and various measures are being taken to reduce this. The company's travel policy, for example, supports more environment-friendly means of transport, and alternatives to business trips such as videoconferencing and phone meetings are encouraged. The company has also initiated work to map out climate-related risks and opportunities.

13.1 Strengthen resilience and adaptive capacity to climate-related disasters. 13.3 Improve knowledge of and capacity for climate change mitigation.

SUSTAINABILITY FRAMEWORK

Balder's framework for sustainability comprises five general elements that bring together the company's material topics in respect of social, environmental and economic sustainability. Examples of activities linked to this framework are presented on the following pages. In addition to this, more detailed information about sustainability may be found on pages 96–104.

PROPERTIES | ACTIVITIES

Reduced energy consumption

Balder works continuously to optimise day-to-day operations in order to reduce energy consumption in the properties. In addition to this, major projects are also undertaken in selected properties, such as replacing windows and renovating façades in order to improve energy performance. Energy use fell by 7.9% during the year.

Lunches for healthcare staff

During the spring, Balder took part in an initiative in which a number of large companies joined forces to fund lunches for employees working in intensive care and at the infection clinic at the Östra Hospital in Gothenburg, where Covid-19 patients are being treated. During one week, Balder provided around 1,400 lunches, which were served free of charge at the restaurant next to the hospital.

Focus on gender equality and diversity

Balder aims to have a good work environment based on gender equality and diversity, where the privacy of employees is safeguarded. The company strives to increase the blend of employees with different backgrounds and to improve the balance in the distribution between men and women in all positions in the company.

Brighter windows with the Rainbow Bridge

The Rainbow Bridge is an initiative that has attracted attention in many countries during the year, and is based on children painting a rainbow and taping them to their window at home. The intention is to spread hope with the message that everything will turn out fine, creating a sense of community in otherwise gloomy times. During the year Balder initiated a campaign in the company's residential areas, with the aim of spreading hope to children during the pandemic.

Green financing

For several years, Balder has had green loans as an element of financing for new projects. Green loans are arranged using a green asset as security, which in the property sector usually consists of buildings that have been built with a low environmental impact and have certification. In addition to this, the company also has a framework for green bonds in order to finance projects that contribute to a reduced environmental impact. This relates primarily to green and energyefficient buildings, but also investments in energy efficiency improvement measures and renewable energy.

Green electricity only

All electricity purchased for Balder's properties in Sweden and Finland is green electricity from renewable sources.

Production of renewable electricity

Balder owns two wind farms, one to the north of Falkenberg and one on Öland. Every year, the ten wind turbines contribute with renewable energy corresponding to the domestic electricity for about 7,800 apartments.

Continuous checks

In addition to the regular inspections conducted in all properties, a large proportion of employees gather once a year to carry out what is known as a Night Run. This involves in-depth inspections of the properties to investigate how they are running and how security is perceived at night.

AREAS | ACTIVITIES

Partnerships with municipalities

Every year, Balder hires a number of young people as summer workers in the company's areas. The number was increased this year at many locations, as Balder took in summer workers who were recruited by municipalities and organised employment for them, as they were unable to work in many municipal operations due to the pandemic.

Summer activities and swimming lessons

Despite the ongoing pandemic, it was possible to organise plenty of summer holiday activities for children in Balder's areas. Events organised during the summer included various sporting activities, swimming lessons in partnership with the Swedish Life Saving Society, study visits from the Equality Academy and various kinds of summer games.

Training initiative for the unemployed

Balder organised a training course during the year in Bergsjön in Gothenburg for forklift truck drivers. Ten unemployed tenants, most aged 18–25, took part. Participants were given the opportunity to take a driving license for forklift trucks and were also introduced to potential employers that were looking for forklift truck drivers.

Increased opportunities for sustainable transport

Balder works continuously to increase the opportunities to cycle and travel by public transport to and from the company's properties. In Denmark, Balder has initiated a unique partnership with Bycyklen, which provides electric bikes for hire via a sharing service. Bycyklen has set up a bike sharing station with six charging stations at Balder's Faelledkanten property in Ørestad, with Balder providing the electrical connection and paying for the electricity used for charging.

Activities in the areas

During the year, Balder organised a large number of activities adapted for the pandemic in the company's areas. These included outdoor exercise sessions, balcony bingo and musical performances.

Hallonbergen Runners' Academy

During the year, Balder collaborated with the Runners' Academy in Sundbyberg and Botkyrka. The Runners' Academy is a non-profit organisation for children and young people that promotes equal health and social inclusion. It organises running events 2–3 times a week with the aim of running 10 km.

Parking spaces and events

In many parts of the country, during the year Balder re-targeted letting events and the like that had been intended for potential customers, to offer support instead to healthcare staff in various ways. For example, the company handed out boxes of chocolates and coffee at several hospitals. Balder also provided temporary parking spaces free of charge at Smörslottsgatan, which is close to the Östra Hospital in Gothenburg, to healthcare staff during the spring.

Food boxes in partnership with Lidl

Together with Lidl in Frölunda, Balder distributed food boxes to tenants who were aged 70+ and thereby defined as being in the at-risk group for Covid-19.

Certification of properties

Balder is striving to increase the proportion of properties that are certified. The goal for new in-house production is that the properties shall be certified as a minimum in accordance with the Miljöbyggnad Silver rating or equivalent, which means, for example, BREEAM Very Good, LEED Excellent, DGNB or Nordic Swan Ecolabel.

Support for organisations

Balder has for many years been supporting the organisation Giving People. By means of donations, the organisation can distribute food boxes and other necessities to families in need. The company also has a partnership with Mitt Livs Val, which offers programmes to encourage study and a mentoring programme for new arrivals and unaccompanied young people.

Property-related training courses

Through its involvement in Fastighetsakademin, a vocational training college in Gothenburg, Balder has a great opportunity to support students who show an interest in learning more about different professions in the property sector. Balder contributes with knowledge about its business activities, giving the training courses a clearer connection to working life. The company also offers a number of work placements in various occupational roles.

Coworkers

Engaged coworkers who are happy and develop in their day-to-day work are a prerequisite for Balder's success. The company works continuously to create the conditions for both retaining existing colleagues and recruiting new ones to contribute to continued growth and development.

During the year, Balder has continued to develop by recruiting new employees, which has further strengthened the organisation.

Continuous skills development

Balder is dependent on employees with the right competence in order to continue to run and develop the business. Training and development are an important factor in retaining employees and creating internal engagement. The Balder Academy is the company's digital training tool and offers, among other things, induction courses for new employees, to provide them with an insight into how Balder works, what values the company has and what different functions within the company work with.

All employees also get an adapted training package, depending on which role in the company the individual will be taking on. The training courses are available as a knowledge database in which employees can access the content at any time. The Balder Academy is also responsible for skills development when, for example, new roles and functions arise in the company.

Career path and a focus on wellness

There are major opportunities to build a career in the company, and many employees change position internally. Balder collaborates in different ways with different propertyrelated training courses, and every year the company offers a number of students both work placements and a chance to do degree projects.

All employees are offered a wellness grant and have ongoing employee appraisals in order to promote health and personal development. Every year a large number of colleagues take part in the Göteborgsvarvet Half Marathon, which is held in May. This event was cancelled in 2020 because of the pandemic, so Balder organised a number of internal exercise challenges instead. These included Balder Return Trip, a joint step counting competition, in which colleagues were encouraged to join forces and either walk or run a distance equivalent to that between Malmö and Sundsvall and back again. Other exercise challenges were also held, with different departments within the company challenging each other.

Responsible travel

When it comes to travel, Balder has a travel policy that aims to simplify booking and the choice of environmentfriendlier means of transport. Alternatives to business trips, such as video conferences and phone meetings, are also encouraged in order to reduce emissions. During the ongoing pandemic, there has been a significant increase in the use of digital meetings, while travel has decreased. There has also been a reduction in commuter journeys, as most employees have been working from home.

BALDER'S PROPERTY PORTFOLIO

PROPERTY PORTFOLIO AS OF 31/12/20201)

Number of
investment
properties
Lettable
area, sq.m.
Rental
value,
SEKm
Rental
value,
SEK/sq.m.
Rental
income,
SEKm
Economic
occupancy
rate,%
Carrying
amount,
SEKm
Carrying
amount, %
Distributed by region
Helsinki 601 1,144,971 2,671 2,333 2,601 97 40,938 27
Stockholm 83 698,543 1,391 1,992 1,321 95 27,364 18
Gothenburg 185 1,064,183 1,690 1,588 1,606 95 30,863 20
Copenhagen 19 270,404 703 2,601 659 94 15,272 10
South 80 404,432 636 1,573 583 92 10,439 7
East 308 711,294 1,125 1,582 1,081 96 14,448 10
North 86 207,739 303 1,458 293 97 5,238 3
Total excluding projects 1,362 4,501,566 8,520 1,893 8,144 96 144,562 95
Projects for own management 70 70 4,617 3
Total investment properties 1,362 4,501,566 8,590 1,893 8,214 96 149,179 98
Development properties 2,803 2
Total property portfolio 1,362 4,501,566 8,590 1,893 8,214 96 151,982 100
Distributed by property category
Residential 1,068 2,658,192 5,127 1,929 4,947 96 83,021 55
Office 101 617,472 1,508 2,441 1,379 91 28,208 19
Retail 113 660,673 847 1,283 811 96 12,478 8
Other 80 565,229 1,038 1,837 1,007 97 20,855 14
Total excluding projects 1,362 4,501,566 8,520 1,893 8,144 96 144,562 95
Projects for own management 70 70 4,617 3
Total investment properties 1,362 4,501,566 8,590 1,893 8,214 96 149,179 98
Development properties 2,803 2
Total property portfolio 1,362 4,501,566 8,590 1,893 8,214 96 151,982 100

1) The above table refers to properties that Balder owned at the end of the year. Properties sold have been excluded and acquired properties have been adjusted to full-year values. Other properties include hotel, educational, nursing, industrial and mixed-use properties.

30 FASTIGHETS AB BALDER ANNUAL REPORT 2020

INCREASED VALUE OF PROPERTY PORTFOLIO

Balder owns around 1,360 investment properties, more than 1,060 of them residential properties. At the end of 2020, the market value of these investment properties was SEK 149 billion.

The value of the investment properties is based on internal valuations. The valuation assumes that the rental trend for the property portfolio will reflect inflation over time. Commercial contracts contain an index clause, which means that the rent develops at the same rate as the consumer price index (CPI) during the term of the contract.

Residential properties have performed a little better that the CPI historically, but in its valuations Balder has assumed that rents develop in line with inflation. The total rental value of Balder's property portfolio as of 31 December was SEK 8,590 million.

Valuation methods

Two different valuation methods are used primarily in the internal valuations. These are the yield method and the acquisition cost method. Properties in Sweden, Denmark, Finland, Norway, Germany and the UK are valued using the yield method. In Finland, the acquisition cost method is used in addition to the yield method. The properties in Russia are valued using the sales comparison method.

The yield method

When valuing according to the yield method, the market value of the properties reflects the future cash flow, which is calculated at current value using a yield requirement. The more predictable the future cash flow, the easier it is to determine the market

value of the properties. The cash flows of residential properties are usually very predictable, as the income is divided among a large number of customers, which makes it easy to determine at what rent an apartment will be let out at in the event of a vacancy. Balder's commercial properties have an average lease term of 6,7 years. The ten biggest leases represent 4.5% of the total rental income, with an average lease term of 10.9 years. These circumstances mean that a large proportion of Balder's future cash flows that form the basis of the market value are known.

The properties where the future cash flow is least predictable are mainly concentrated in the central areas of the major cities of Stockholm, Gothenburg and Malmö. It is in these properties that Balder is most dependent on future lettings and it is also here where an estimate must be performed in the valuations of what level of rent an object can command if it becomes vacant. The major cities offer good transparency for a comparison of rental rates, which means that rental rates can be determined with high degree of certainty. The timing of subsequent letting is, however, more difficult to determine, which means that an assumption has to be made based on market demand, historical interest and similar premises. An assessment is also made of the future development of the immediate surroundings as well as the property's position within its market segment.

Properties under construction and project properties for own management are valued at market value minus estimated contracting expenditure and project risk, which usually corresponds to a valuation at cost.

The acquisition cost method

The acquisition cost method is applied for properties subject to rent control in Finland. Initially, these properties are valued at cost of acquisition plus transaction costs and subsequently at cost of acquisition minus depreciation and impairment losses. See also Note 12, Investment properties.

Operating and maintenance payments

When valuing properties, assumptions are made regarding future operating and maintenance payments. These assumptions are based on historic outcomes and future projections as well as estimated standardised costs. Operating and maintenance payments are adjusted annually in line with inflation.

Yield requirement and cost of capital

The yield requirements and cost of capital used in valuations have been derived from comparable transactions in the property market. Important factors in choosing a yield requirement are location, rental rate, vacancy rate and the condition of the property. Market assessments of properties always involve a certain degree of uncertainty in the assumptions and estimates made. The uncertainty in respect of individual properties is normally considered to be in the range of +/– 5–10%. Balder continually monitors transactions completed in the market in order to substantiate and guarantee the internal valuations. Balder also conducts continual discussions with external actors regarding the acquisition and divestment of properties, which provides additional guidance.

As of 31 December, Balder's average yield was 4.5% (4.5). The average yield requirement for commercial properties was 4.7% (4.7) and for residential properties 4.3% (4.3).

Change in value of investment properties

In 2020, Balder acquired properties for a total of SEK 3,491 million (8,439). Divestments during the year totalled SEK 366 million (1,050), generating a profit of SEK 24 million (14). According to Balder's internal valuations, the carrying amount of the investment properties at year-end totalled SEK 149,179 million (141,392), representing an unrealised change in value of SEK 3,429 million (9,562).

The largest proportion of the market value is found in the Stockholm, Helsinki and Gothenburg regions, which between them represent a property value of SEK 99,165 million, excluding projects.

External valuations

In order to quality-assure its internal valuations, the company allows parts of the portfolio to be valued externally on an ongoing basis and obtains second opinions1) on the internal valuations. Historically, deviations between Balder's internal and external valuations have been insignificant. During the year, external valuations or second opinions were obtained for approximately 21% of the property portfolio excluding projects, equivalent to approximately SEK 31 billion, and second opinions were obtained for approximately 31% of the property portfolio excluding projects, equivalent to approximately SEK 45 billion. The difference between the external valuations and the internal valuations was less than 1%.

The external valuations were carried out during the year by Newsec, Cushman & Wakefield, CBRE and JLL. Second opinions were obtained during the year from JLL.

Development properties

A development property is a property that is owned for refinement with the intention of being divested. These properties are recognised at cost on an ongoing basis, and a profit/loss is recognised when each property is completed, sold and handed over to the buyer. As of 31 December, the value of Balder's development properties totalled SEK 2.8 billion (2.3).

1) Review performed by external valuation company of used valuation method.

RESIDENTIAL AND COMMERCIAL PROPERTIES

Region Mean value of yield requirement for
estimation of residual value, %
Helsinki 4.84
Stockholm 4.16
Gothenburg 4.48
Copenhagen 3.66
South 4.79
East 4.89
North 4.36

RENTAL VALUE, RESIDENTIAL, SEK/SQ.M.

RENTAL VALUE, COMMERCIAL, SEK/SQ.M.

BALDER 2020 ASSOCIATED COMPANIES

STABLE DEVELOPMENT IN ASSOCIATED COMPANIES

Balder is co-owner of associated companies that manage properties, associated companies that are project developers and the bank Collector.

The 50%-owned associated companies that manage properties Trenum AB, Fastighets AB Centur, Tulia AB and the Norwegian property company acquired during the year, Anthon B Nilsen Eiendom AS and Balder's holding in Serena Properties and Sinoma Fastighets AB between them own 188 investment properties (170) and project properties with a total carrying amount of SEK 30,084 million (23,682), a total lettable area of approximately 1,172 sq.m. (1,038) and a total rental value of SEK 1,654 million (1,418).

The profit from property management for all associated companies, i.e. profit excluding changes in value and tax, totalled SEK 2,612 million (1,749), of which Balder's share totalled SEK 663 million (787). The company's profit after tax totalled SEK 7,899 million (1,940), of which Balder's share totalled SEK 897 million (876). Balder's profit was affected by changes in value in respect of properties and derivatives to the order of SEK 489 million (297) before tax. For more information about Balder's associated companies, see Note 14, Participations in associated companies/joint ventures.

CARRYING AMOUNT PER REGION associated companies, %

CARRYING AMOUNT PER PROPERTY CATEGORY

associated companies, %

The chart above relates to Balder's share of the property portfolio of 50%-owned associated companies.

SUMMARY OF BALDER'S ASSOCIATED COMPANIES

Company Operations Geographical focus Balder's
holding, %
Other
owners, %
Number of
investment
properties
Lettable area,
thousand
sq.m.
Rental value,
SEKm
Number
of project
properties
Properties
carrying
amount, SEKm
Trenum AB Owns and manages residential
properties
Apart from the three metro
politan regions, there is also a
focus on growth locations with
a positive population trend
50% Third Swedish National
Pension Fund 50%
37 (34) 225 (216) 381 (363) 24 (18) 8,774 (7,223)
Fastighets AB Centur Owns and manages commercial
properties and project
development
Stockholm, Gothenburg and
Öresund regions
50% Peab 50% 35 (34) 327 (327) 402 (385) 1 (2) 7,011 (6,621)
Tulia AB Owns and manages commercial
properties
Central locations in
Stockholm
50% André Åkerlund AB 50% 39 (35) 115 (102) 261 (233) 5,174 (4,527)
Anthon B Nilsen Eiendom AS Owns and manages commercial
properties and project
development
Oslo 50% Anthon B Nilsen AS 50% 6 57 113 4 2,789
Brinova Fastigheter AB Owns and manages public
properties and homes
Southern Sweden/
Öresund region
22% Listed in Stockholm 111 (84) 305 (240) 404 (313) 3 (5) 6,048 (4,321)
Tornet Bostadsproduktion AB Owns and manages residential
properties and project
development
Stockholm, Gothenburg and
Öresund regions
33% Peab 33%
Folksam 33%
24 (21) 106 (83) 214 (161) 4 (7) 5,019 (4,298)
Serena Properties AB Owns and manages retail
properties in the Nordic region
Finland 56% Varma 43%
Redito 1%
30 (26) 260 (207) 305 (247) 3,974 (3,081)
Sinoma Fastighets AB Owns and manages office, ware
house and logistics properties
Stockholm and Gothenburg 49% Folksam 50%
Redito 1%
41 (40) 187 (186) 195 (193) 2,363 (2,231)
Rosengård Fastigheter AB Owns and manages residential
properties
Rosengård in Malmö 25% Heimstaden 25%
MKB Fastighets AB 25%
Victoria Park AB 25%
10 (10) 134 (134) 150 (146) 1,639 (1,443)
Entra ASA Owns and manages
commercial properties
Oslo 18% Listed in Oslo 73 1 053 2 392 17 54,252
Net sales, SEKm Profit after
tax, SEKm
Total
assets, SEKm
Market
capitalisation,
SEKm
Collector AB Niche bank offering financing
solutions for private and business
customers
The company has offices in
Gothenburg, Stockholm,
Helsinki and Oslo
44% Listed in Stockholm 2,529 (2,430) 291 (–8) 37,977 (37,436) 4,980 (5,186)
SHH Bostad AB Housing development National coverage in Sweden 20% Company management 80% 382 (407) 7 (12) 792 (862)
Sjælsø Management ApS Project development and
construction management
Denmark 49% Company management 51% 103 (104) 35 (62) 120 (116)
Karlatornet AB Project development and
construction management
Gothenburg 50% Serneke Group 50% Ongoing
construction

BALDER'S SHARE OF 50%-OWNED ASSOCIATED COMPANIES' PROPERTY PORTFOLIO 1, 2)

31/12/2020 investment
properties3)
Lettable area,
sq.m.
Rental value,
SEKm
Rental value,
SEK/sq.m.
Rental income,
SEKm
Economic occu
pancy rate, %
Carrying
amount, SEKm
Carrying
amount, %
Distributed by region
Stockholm 89 227,125 346 1,522 327 95 6,276 41
Gothenburg 42 157,259 184 1,167 172 94 2,399 16
Öresund 22 65,058 101 1,551 88 88 1,587 10
East 29 121,232 157 1,291 154 98 2,144 14
Oslo 6 28,684 57 1,965 55 97 1,239 8
Total excluding projects 188 599,357 843 1,406 796 94 13,646 89
Projects for own management 1 1 1,611 11
Total property portfolio 188 599,357 844 1,406 796 94 15,257 100
Distributed by property category
Residential 45 78,027 152 1,942 148 98 3,208 21
Office 35 123,178 197 1,600 183 93 3,574 23
Retail 65 266,781 323 1,212 310 96 4,313 28
Other 43 131,371 171 1,301 155 91 2,551 17
Total excluding projects 188 599,357 843 1,406 796 94 13,646 89
Projects for own management 1 1 1,611 11
Total property portfolio 188 599,357 844 1,406 796 94 15,257 100

1) The above table refers to properties that the associated companies owned at the end of the year. Properties sold have been excluded and acquired properties have been adjusted to full-year values. Other properties include hotel, educational, nursing, industrial and mixed-use properties.

2) Refers to Balder's holding in Trenum AB, Fastighets AB Centur, Tulia AB, Sinoma Fastighets AB, Serena Properties AB and Anthon B Nielsen Eiendom AS.

3) Refers to the entire associated companies' portfolio.

SEKm 31/12/2020 31/12/2019 31/12/2018
Assets
Properties 15,257 12,004 10,356
Other assets 361 243 50
Cash and cash equivalents 202 204 111
Total assets 15,819 12,450 10,517
Equity and liabilities
Equity/shareholders' loans 7,290 5,635 4,499
Deferred tax liability 898 657 529
Interest-bearing liabilities 6,875 5,671 5,199
Other liabilities 756 488 290
Total equity and liabilities 15,819 12,450 10,517
SEKm 2020 2019 2018
Rental income 725 659 521
Property costs –120 –115 –96
Net operating income 605 543 425
Report of the Board of Directors38
Opportunities and risks42
Consolidated statement of comprehensive income46
Consolidated statement of financial position47
Consolidated statement of changes in equity48
Consolidated cash flow statement49
Parent Company income statement50
Parent Company balance sheet51
Parent Company statement of changes in equity52
1 Accounting policies54
2 Segment reporting56
3 Revenue distribution58
4 Employees and staff costs58
5 Remuneration to auditors60
6 Operating costs distributed according to function
and type of expense60
7 Specification of property costs60
8 Leases61
9 Financial income and expenses63
10 Income tax63
11 Earnings per share66
12 Investment properties66
13 Other property, plant and equipment68
14 Participations in associated companies/joint ventures69
15 Other non-current receivables71
16 Development properties71
17 Trade receivable71
18 Prepaid expenses and accrued income72
19 Financial investments72
20 Equity72
21 Non-controlling interests 73
22 Financial risk management74
23 Credit facility79
24 Accrued expenses and prepaid income79
25 Pledged assets and contingent liabilities80
26 Cash flow statement80
27 Participations in Group companies 81
28 Receivables from/liabilities to Group companies 82
29 Significant events after the end of the financial year82
30 Related parties82
31 Parent Company information82
32 Other income/expenses82

REPORT OF THE BOARD OF DIRECTORS

The Board of Directors and the CEO of Fastighets AB Balder (publ), corporate registration number 556525-6905, hereby submit the following annual accounts and consolidated accounts for the financial year 2020.

Fastighets AB Balder is listed on Nasdaq Stockholm, Large Cap segment. All amounts in SEK million unless otherwise stated. Comparisons stated in parenthesis refer to the corresponding period of the previous year.

Operations

Balder's business concept is to create value by acquiring, developing and managing residential properties and commercial properties based on local presence and to create customer value by meeting the needs of different customer groups for commercial premises and housing.

Balder shall strive to achieve a position in each region whereby the company is a natural partner for potential customers that are in need of new commercial premises and/or housing. Growth shall take place on the basis of continued profitability and positive cash flows.

Financial goals

Balder's goal is to achieve a stable, good return on equity, while the equity/assets ratio over time shall be no less than 40% and the interest coverage ratio shall be no less than 2.0 times and the net debt to total assets should not exceed 50%. The outcomes for 2020 were 38.6% (38.3), 5.3 times (5.2) and 46.1% (48.4).

Employees and organisation

Balder's business areas consist of the regions Helsinki, Stockholm, Gothenburg, Copenhagen, South, East and North. The regional organisations follow the same basic principles, but differ depending on the size and property holdings of each region. The regional offices are responsible for letting, operations, environmental matters and technical management.

The Balder Group, with Fastighets AB Balder as Parent Company, is composed of a large number of limited liability companies and limited partnership companies. Balder's operational organisation is supported by a central accounting, property management and finance function.

On 31 December the Group had a total of 824 employees (784), of which 351 were female (327). Balder's management team consists of six people, two of whom are female. For information regarding adopted guidelines for remuneration to senior executives, see Note 4, Employees and staff costs. The Board will not propose any changes in the guidelines to the Annual General Meeting 2021.

Significant events during the financial year Financing

During the year, Balder issued bonds within the framework of the MTN programme totalling SEK 1,150 million. EUR 300 million was also issued within the framework of the EMTN programme.

A directed share issue of 6,500,000 Class B shares at a total value of SEK 2,930 million after issue costs was carried out during the year.

Acquisitions

During the year a total of 19 properties were acquired at a property value of SEK 3,491 million. In terms of value, the biggest acquisitions during the year are Balder's purchases of 11 retail properties in Finland.

Divestments

During the year, Balder sold owner apartments and land for a sales value of SEK 366 million. The profit from the sales totalled SEK 24 million.

Other information

During the year Balder acquired 50% of the shares in Anthon B Nilsen Eiendom AS, 50% of the shares in Karlatornet AB and 17.7% of the shares in the Norwegian listed real estate company Entra ASA. Balder also agreed to acquire Masmästaren taking up occupancy in Q1 2021. The property portfolio consists of 250 t sq.m. and is evenly divided between residential and commercial properties, at a total property value of approx. SEK 5 billion.

Investment properties

Balder's commercial properties are located primarily in the central areas of big cities, and the residential properties are located in metropolitan areas and in places that are growing and developing positively. On 31 December, Balder owned 1,362 development properties (1,298) with a lettable area of 4,502,t sq.m. (4,304) at a carrying amount of SEK 149.2 billion (141.4), including project properties for own management. During the year, 19 investment properties (44) and land with a lettable area of 104 t sq.m. (222) were acquired for SEK 3,491 million (8,439). Sales of owner apartments and land amounted to a value of SEK 366 million (1,050), which generated a profit of SEK 24 million (14). When allocating the total property portfolio's carrying amounts by region, the share for Helsinki totalled 28% (28), Gothenburg 22% (21), Stockholm 19% (19), Copenhagen 12% (11), South 7% (7), East 10% (10) and North 4% (4). Of the carrying amount, 41% (41) relates to commercial properties and 59% (59) to residential properties.

Development properties

A development property is a property that is owned for upgrading with a view to being divested. These properties are recognised at cost on an ongoing basis, and a profit/loss is recognised when each property is completed, sold and handed over to the buyer. As of 31 December 2020, the value of Balder's development properties totalled SEK 2,803 million (2,344).

Profit from property management

Profit from property management for the year totalled SEK 4,900 million (4,604), of which the effect of exchange rate fluctuations totalled SEK –26 million (55). The profit from property management attributable to the parent company's shareholders increased by 5% and totalled SEK 4,244 million (4,023), representing SEK 23.51 per share (22.35). Profit from property management includes SEK 663 million (787) in respect of associated companies, which is included in the income statement in participations in profits from associated companies.

Profit after tax

Net profit after tax totalled SEK 7,275 million (11,526). Profit after tax attributable to the parent company's shareholders totalled SEK 6,641 million (8,958), corresponding to SEK 36.79 per share (49.77). Profit before tax was impacted by changes in the value of investment properties of SEK 3,453 million (9,577), profit from sales of development properties of SEK 174 million (95), changes in value in interest rate derivatives of SEK –141 million (–180) and profit from participations in associated companies of SEK 897 million (876).

Rental income

Rental income increased by 7% to SEK 8,134 million (7,609), of which the effect of exchange rate fluctuations totalled SEK –50 million (124). This increase is due primarily to acquisitions, new lettings and completed projects for own management. The lease portfolio was estimated to have a rental value on a full-year basis of SEK 8,590 million (8,304) as of 31 December. The average rental level for the whole property portfolio totalled SEK 1,893/sq.m. (1,921) excluding project properties.

The rental income in a comparable portfolio increased by 1.0% (3.8) after adjustment for exchange rate fluctuations. The rental income shows a considerable diversification of risk with regard to tenants, sectors and locations. The economic occupancy rate as of the closing date was 96% (96). The total rental value of unlet areas on 31 December totalled SEK 376 million (304) on an annual basis.

Property costs

Property costs for the year totalled SEK –1,919 million (–1,966), of which the effect of exchange rate fluctuations totalled SEK 12 million (–36). Net operating income increased by 10% to SEK 6,216 million (5,643), representing a surplus ratio of 76% (74).

Operating costs usually vary with the seasons. The first and fourth quarters have higher costs than the other quarters, while the third quarter usually has the lowest cost level.

Management costs and administrative expenses

Management and administrative expenses for the year totalled SEK – 676 million (– 664), of which the effect of exchange rate fluctuations totalled SEK 4 million (–13).

Shares in profit from associated companies/ joint ventures

Profit from participations in associated companies amounted to year to SEK 897 million (876) and Balder's share of the associated companies profit from property management amounted to SEK 663 million (787).

Profit before tax has been affected by unrealised changes in value regarding real estate and interest rate derivatives with SEK 489 million (297). Tax expense for the year amounted to SEK –254 million (–209).

Other income /expenses

Other income/expenses during the year amounted to SEK 371 million (7), of which unrealised change in value of long-term financial assets amounted to SEK

462 million (–) and refers to the unrealised revaluation that has taken place during the fourth quarter of the shares in the Norwegian listed real estate company Entra ASA. See also note 32, Other income/expenses.

Net financial item and changes in the value of derivatives

Net financial items, excluding changes in the value of derivatives, totalled SEK –1,212 million (–1,170), of which the effect of exchange rate fluctuations totalled SEK 7 million (–21).

Changes in value in respect of interest rate derivatives totalled SEK –141 million (–180). The negative change in value during the year in respect of derivatives was due to the decrease in the level of interest rates during the year, which means that the difference in relation to the contracted interest rate level of the interest rate derivatives has increased.

Derivatives are recognised on an ongoing basis at fair value in the balance sheet. Changes in value from derivatives arise when there are changed interest rate levels/exchange rates and do not affect cash flow, as long as they are not sold during the term. Balder has protected itself against higher interest rate levels, which means that the market value of derivatives falls when interest rate levels fall. The deficit in respect of derivatives (interest and currency) totalled SEK 1,540 million (1,210) at yearend. The deficit on derivatives will be released during the remaining term and recognised as income. The average interest rate was 1.5% (1.5) on the closing date and 1.6% (1.7) for the year.

Changes in value of investment properties

Balder performed internal valuations of all investment properties as of 31 December. The investment properties in Sweden, Denmark, Finland, Norway, Germany and the UK were valued using the yield method, which is based on a ten-year cash flow model.

Each property is individually valued by computing the present value of future cash flows, i.e. future rental payments minus estimated operating and maintenance payments. The cash flow is adapted

to the market by taking account of any changes in letting levels and occupancy rates, as well as operating and maintenance payments.

The valuation is based on an individual assessment for each property of both future cash flows and the required yield.

In Finland the acquisition cost method is used in addition to the yield method. The properties in Russia are valued using local price method.

Investment properties for own management are valued at market value minus estimated contracting expenditure and project risk, which usually corresponds to a valuation at the cost of acquisition. For a more detailed description of Balder's property valuation, see Note 12, Investment properties.

Market assessments of properties always involve a certain degree of uncertainty in the assumptions and estimates made. In order to quality-assure its internal valuations, the company allows parts of the portfolio to be valued externally on an ongoing basis and obtains second opinions on the internal valuations. This means that the used method of valuation is reviewed by an external valuation company.

During the year, external valuations were obtained for approx. 21% (23) of investement properties, excluding project properties for own management, equivalent to SEK 31 billion (31) and second opinions were obtained for 31% (32) of the investment properties excluding internally managed project properties, equivalent to SEK 45 billion (44). The difference between the external valuations and the internal valuations was less than 1%. Historically, deviations between external and internal valuations have been insignificant.

As of 31 December, Balder's average yield requirement was 4.5% (4.5) excluding project properties for own management. The change in value during the year was attributable to improved net operating income and completed projects.

On 31 December, the carrying amount of the investment properties according to the individual internal valuation totalled SEK 149,179 million (141,392), which includes an unrealised change in value during the year of SEK 3,429 million (9,562). Of the unrealised change in value during the year

Sensitivity analysis

Factor Change Profit before tax, SEKm
Rental income +/– 1 % +/– 82
Economic occupancy rate +/– 1 percentage point +/– 86
Interest rate level of interest-bearing liabilities + 1 percentage point – 257
Property costs +/– 1 % –/+ 22
Changes in value of investment properties +/– 5 % +/– 7 459

70% is attributable to residential properties and of the total unrealised change in value 40% is attributable to completed projects.

Profit from divestment, development properties

The profit from the divestment of development properties is recognised in connection with the buyer taking possession of the property. In addition to the cost of acquisition, sales and marketing expenses are also included, which are recognised as expenses as they arise, during the year these amounted to SEK –20 million.

The results of in total six projects has been recognised during the year. The net profit from sales for the period totalled SEK 174 million (95) after deduction of costs for marketing and sales.

Tax

The Group's total tax expense was SEK –1,807 million (–2,659), of which the effect of exchange rate fluctuations totalled SEK 8 million (–52). The current tax expense for the year totalled SEK –388 million (–259), which is attributable primarily to SATO Oyj and Balder Danmark A/S. The current tax expense attributable to the parent company's shareholders totalled SEK –261 million (–157).

Deferred tax expense for the year amounted to SEK –1,419 million (–2,400).

Tax has been calculated using the current tax rate in each country. In Sweden, tax was calculated at 21.4% of ongoing taxable net profit. Deferred tax liabilities and tax assets were calculated at the lower tax rate of 20.6% that will apply as of 2021.

Deferred tax is calculated on the temporary differences arising after the acquisition date. The Group's deferred tax liability has been calculated as the value of the net of fiscal deficits and the temporary difference primarily between the carrying amounts and values for tax purposes of properties and interest rate derivatives. The deferred tax liability totalled SEK 12,497 million (11,285). For more detailed information, see Note 10, Income tax.

Cash flow and financial position

Balder's assets as of 31 December amounted to 180,401 million (157,928). These were financed by equity of SEK 67,885 million (58,725) and liabilities of SEK 112,516 million (99,203), of which SEK 88,989 million (81,242) are interest-bearing.

Cash flow from operating activities before changes in working capital totalled SEK 3,986 million (3,288). Investing activities charged cash flow with SEK –16,993 million (–15,867).

During the year, acquisitions of development properties of SEK –3,491 million (–7,972), investments in existing properties and projects of SEK –5,572 million (–8,133), investments in property plant and equipment, financial investments, associated companies and transactions with non-controlling interests of SEK –10,129 million (–1,315), dividend to non-controlling interests of SEK 0 million (–137 and amortisation of lease liability of SEK –19 million (–26) totalled SEK –19,211 million (–17,583).

These were financed through cash flow from operating activities of SEK 6,520 million (3,209), by divestments of investment properties of SEK 366 million (1,050), development properties of SEK 1,253 million (387), financial investments of SEK 561 million (60), dividend from associated companies of 20 million (42), sale of shares in associated companies of SEK 0 million (15), shareholder contribution from non-controlling interests of SEK 18 million (–), issue of new shares after issue costs of SEK 2,930 million (–) and net borrowing of SEK 10,634 million (13,641), which totalled SEK 22,300 million (18,404). Total cash flow for the year was SEK 3,089 million (821).

Liquidity

Apart from unutilised credit facilities of SEK 13,032 million (8,673), the Group's cash and cash equivalents, financial investments and unutilised credit facilities totalled SEK 7,477 million (3,252) as of 31 December.

Equity

Equity totalled SEK 67,885 million (58,725) on 31 December, of which non-controlling interests totalled SEK 9,676 million (9,714), corresponding to SEK 312.12 per share (272.28) excluding noncontrolling interests. The equity/assets ratio was 38.6% (38.3).

Interest-bearing liabilities

The Group's interest-bearing liabilities totalled SEK 88,989 million (81,242) as of 31 December. The proportion of loans with interest maturity dates during the coming 12-month period totalled 39% (44) and the average fixed credit term was 5.9 years (5.8). Derivatives contracts have been concluded in order to limit the impact of a higher market interest rate.

The above-mentioned derivatives are recognised at fair value on an ongoing basis in the balance sheet with changes in value recognised in the income statement. Changes in value during the year totalled SEK –141 million (–180). Interest-bearing liabilities are described in greater detail in Note 22, Financial risk management.

Rating

Balder has an investment grade rating from the S&P credit agency of BBB with a stable outlook. The rating from S&P means that Balder can continue to access the European capital market, obtain long terms for tying-up of capital, diversify its funding base and thus secure long-term capital for continued growth. Credit ratings from credit agencies have a major impact on Balder's financing costs, and therefore it is important to maintain an investment grade rating.

Investments

Property investments during the year totalled SEK 7,545 million (15,006), of which SEK 3,491 million (8,439) relates to acquisitions and SEK 4,054 million (6,567) relates to investments in existing investment properties and projects for own management. Of total investments in the investment property portfolio, SEK 2,598 million (3,398) relate to Helsinki, SEK 297 million (2,260) to Stockholm, SEK 1,411 million (5,225) to Gothenburg, SEK 1,722 million (1,590) to Copenhagen, SEK 91 million (1,607) to South, SEK 925 million (472) to East and SEK 500 million (454) to North.

Associated companies/joint ventures

Balder owns 50% of a number of property companies in which Balder handles management and administration. For more information, see Note 14, Participations in associated companies/joint ventures. In addition to the 50%-owned associated companies, Balder owns, among others, 44.1% (44.1) of Collector AB (publ), 33.3% (33.3) of Tornet Bostadsproduktion AB, 21.8% (25.5) of Brinova Fastigheter AB (publ), 49% (49) of Sjaelsö Management ApS, 20% (20) of SHH Bostad AB, 56% (56) of Serena Properties AB, 49% (49) of Sinoma Fastighets AB and 25% (25) of Rosengård Fastighets AB.

During the fourth quarter Balder invested in Anthon B Nilsen Eiendom AS, Balder's share amounts to 50%. The transaction includes the Groups entire property portfolio, with properties in Olso and at Lahaugmoen, and a development portfolio of 170,000 sq.m. in Eastern Norway. The market value of the properties included in the acquisition amounted to approx. SEK 2,800 million.

During the fourth quarter Balder also acquired 50% of the shares in Karlatornet AB. The company is the owner of the properties where the highest skyscraper in the Nordic region, 245 metres high with 73 floors, is going to be built. The properties include approx. 600 apartments, 300 hotel rooms and 8 t sq.m. of offices.

During the last quarter of the year Balder also acquired 17.7% of shares in the Norweigan listed company Entra ASA, for more information see entra.no.

On pages 34–36, Balder's participations in the balance sheets and property portfolios of the 50% owned property-managing associated companies are reported and presented in accordance with IFRS accounting policies. The 50%-owned associated companies own a total of 188 investment properties (170) and 30 project properties (20). Balder's share of the property portfolio's lettable area is approximately 599 t sq.m. (530) with a rental value of SEK 844 million (722). The economic occupancy rate was 94% (94).

Parent Company

The parent company's operations consist primarily of the performance of Group-wide services. Balder has centralised the Group's credit supply, risk management and cash management through the parent company having an internal bank function. Net sales in the parent company totalled SEK 349 million (361) during the year, of which intra-Group services represented SEK 251 million (266) and the remainder related primarily to management assignments for associated companies.

Net profit after tax totalled SEK 1,615 million (1,025). A dividend from subsidiaries was included at SEK 975 million (800), net interest items totalled SEK 1,599 million (194) and exchange rate differences totalled SEK 785 million (–251) and unrealised change in value in long-term financial asset amounted to SEK 462 million (–), changes in value in respect of interest rate derivatives totalled SEK –141 million (–180) and Group contributions received/paid totalled SEK –821 million (–229). Recognised exchange differences related primarily to the translation of euro bonds, which from a Group perspective are used for the hedging of net investments in euros and Danish kroner.

The parent company's financial investments and cash and cash equivalents, including unutilised credit facilities, totalled SEK 3,787 million (2,345) on 31 December. Receivables from Group companies totalled SEK 43,368 million (41,680) on the closing date and interest-bearing liabilities SEK 46,366 million (43,862).

Sustainability Report in accordance with the Swedish Annual Accounts Act

In accordance with Chapter 6, Section 11 of the Annual Accounts Act, Fastighets AB Balder has chosen to produce the sustainability report as a separate report from the Annual Report. The scope of the sustainability report is described on page 102 of this document.

Multi-year summary

See page 9.

The share and the owners

As of 31 December, the share capital totalled SEK 186,500,000 distributed among 186,500,000 shares. Each share has a quota value of SEK 1. The shares are distributed across 11,229,432 Class A shares and 175,270,568 Class B shares. Each Class A share carries one vote and each Class B share carries one tenth of one vote.

The largest owners are Erik Selin via company with 48.8% of votes and Arvid Svensson Invest AB with 14.8% of votes. There are no restrictions in the articles of association as to the form of transfer of shares or voting rights at the shareholders' general meeting.

Since Balder will be prioritising growth, capital structure and liquidity over the next few years, the dividend for the share will be low or will not be declared at all.

Report on the Board's work during the year

The Board held 18 board meetings during the financial year, one of which was the statutory meeting. The work follows a formal work plan adopted by the Board. The formal work plan regulates the Board's working methods and the allocation of responsibility between the Board and CEO, as well as the forms of ongoing financial reporting. During the year, strategic questions and other important matters for the company's development were discussed, as well as ongoing financial reporting and decision-making matters. The company's auditors participated in one board meeting and reported on their completed audit of the management's administration and of the accounts.

Corporate governance

Balder is governed by the corporate governance rules prescribed in the Swedish Companies Act, the Articles of Association and the listing agreement with Nasdaq Stockholm. The Board aims to make it easy for the individual shareholder to understand where in the organisation responsibility and authority lie. Corporate governance in the company is based on Swedish legislation, principally on the Swedish Companies Act, the listing agreement with the Swedish Stock Exchange, the Swedish Code of Corporate Governance as well as other rules and guidelines. Some of the Code's principles are about creating a good basis for exercising an active balance of power between owners, the Board and Management, which Balder views as a natural element of the principles for the operation. See pages 88–93 for the Corporate Governance Report.

Remuneration to the CEO and other senior executives

Guidelines for remuneration to senior executives were adopted at the last Annual General Meeting. The guidelines essentially state that competitive market salaries and other terms of employment shall be applied for company management. Remuneration shall be paid in the form of a fixed salary. Redundancy pay and severance payment shall not exceed 18 monthly salaries in total for the company's CEO, and for other members of company management the figure is a maximum of six months with no severance payment. Company management comprises the CEO and other members of Group Management. The Board shall have the right to depart from the guidelines if in a single case there are specific reasons for this.

The Board's proposal on guidelines for the next AGM corresponds with the current guidelines and shall apply until the 2024 AGM unless circumstances arise that necessitate an earlier revision. See also Note 4, Employees and staff costs.

Covid-19

Since the beginning of spring 2020, the world has been marked by the ongoing pandemic in a way that no one has been able to predict.

Balder has taken a number of measures to deal with the current situation. Since the start of the pandemic, Balder has had an ongoing dialogue with the tenants and strived to support those who have liquidity problems as a result of the pandemic as far as possible. In some cases, rent reductions have taken place, but mainly agreements on transition to monthly payments or postponement of rent payments have been made.

The Group has tenants who conduct hotel operations and has thus been affected both directly and indirectly by the ongoing pandemic. The hotel business has a significantly lower occupancy rate, which has had a negative effect on tenants. Of the total property portfolio, approximately 8% consists of hotels.

The pandemic affected Balder's development of the property portfolio through new production and redevelopment temporarily during the spring, but the projects where construction is underway are progressing according to plan. For those projects that have not yet started construction, planning continues as before.

To date, the pandemic has had a limited effect on the company's financing. In these times, good liquidity and ensuring the company's financing needs are of paramount importance. During the year, Balder continued to have good access to financing. At the turn of the year, Balder has available liquidity and loan promises of SEK 20,500 million that can be used should the need arise.

The continued development is uncertain and it is important that the business is flexible and prepared for new challenges that arise. Balder follows the advice and guidelines given by the government and authorities.

Significant events since the end of the financial year

See Note 29 Significant events since the end of the financial year.

Expectations regarding the future trend

Balder's objective is to grow with maintained profitability by means of direct or indirect acquisitions together with our partners in locations that are considered to be of interest.

Proposed distribution of earnings

The following amount in SEK is at the disposal of the Annual General Meeting:

Retained earnings 14 996 163 560
Net profit for the year 1 615 390 152
Total 1) 16 611 553 712

1) See change in parent company's equity, page 52.

The Board proposes that the amount be allocated as follows:

Carried forward 16 611 553 712
Total 16 611 553 712

OPPORTUNITIES AND RISKS

Like all business Balder's organisation and business are exposed to a number of risks. These risks are to varying degrees within the company's control and are therefore managed differently to some extent. The main strategy, however, is to strive as far as

possible to identify both risks and opportunities and to draw up action plans on this basis.

The risk analysis is performed continuously, at several levels within the company, depending on where different risks and opportunities arise

and which parts of the business might be affected. Below is a summary of the main opportunities and risks that have been identified, together with a brief description of how Balder assesses and manages them.

AREA DESCRIPTION APPROACH ASSESSMENT
>> OPERATIONAL RISKS
The risk of reduced occupancy
rate, reduced rental income and
negative rental development
Balder's income is affected by the occupancy rate of the properties, the possibility of charg
ing competitive market rents and the ability of customers to pay. The occupancy rate and
rental levels are determined largely by the economic trend. Naturally, the risk of major fluc
tuations in vacancies and loss of rental income increases when the property portfolio con
tains more large individual customers.
Balder's ten largest contracts account for 4.5 % of the total rental income, and their average con
tract term is 10.9 years. No single contract accounts for more than 0.7% of Balder's total rental
income, and no single customer accounts for more than 4.0% of total rental income. Balder's
leases for premises are usually wholly or partly linked to the consumer price index. Residential
properties in Sweden are subject to regulations, the effects of which include rental levels being
determined by what is known as the utility value principle.
During 2020 Balder, like all property companies, was affected by the ongoing pandemic, as
commercial customers in particular experienced increasing problems in their businesses. Balder
has developed solutions for many of these in the form of deferred payments or a switch from
quarterly to monthly rent. The hotel industry is one of the hardest hit. Hotels account for around
8% of Balder's total property portfolio.
Risk of increased property costs
due to increased operating and
maintenance costs
Property costs include direct costs such as costs of operation, media, maintenance and
property tax. Extensive needs to perform repairs can have a negative impact on profits.
Operating costs are primarily tariff-based costs of electricity, cleaning, water and heating.
Many of these goods and services can only be purchased from one actor, which can affect
the price. Regulatory factors such as stricter demands for reduced emissions and the transi
tion to fossil-free types of energy can also affect energy costs. Other consequences of cli
mate change, such as an increased risk of flooding and extreme weather conditions, can
also generate increased costs when insuring properties in risk areas. Cost increases that are
not compensated by regulation in leases or rental increases through re-negotiation can
have a negative impact on profits. A change of +/–1% in property costs would affect the total
cost figure by SEK –/+ 22 million.
Balder works constantly to achieve continuous improvement in cost-efficiency with the aid of
rational technical solutions, practical initiatives and continuous follow-up. Each region is respon
sible for ensuring that the property portfolio is well-maintained and in good condition. Having a
local presence increases the knowledge of each property's needs for preventive measures, which
is more cost-efficient in the long run that extensive repairs. All electricity purchased for the prop
erties in Sweden is green electricity from renewable sources. Balder has also initiated an analysis
of the property portfolio based on the possible effects of climate change, in order to draw up
action plans for properties where the risks of an impact are considered the greatest.
Risk of incorrect assessment of
the rental market's development
and the execution of projects
One way of increasing the yield is to produce new properties and develop existing ones
through investments. Project development risks exist in assessments of the market's devel
opment, but also in the design of the product and the execution of the project itself.
Quality-assured internal processes and a high level of competence in the project organisation
guarantee high quality in both execution and the product itself. When new commercial buildings
are constructed, it is always a requirement that large parts of the property must be let before the
investment commences. Most of the commercial projects in progress therefore have a high occu
pancy rate. The risks are also limited by the fact that investments are only made in markets where
Balder has good market knowledge and where there is high demand for homes and commercial
premises.

Risk level assessment

Low Medium High

AREA DESCRIPTION APPROACH ASSESSMENT
>> IT AND DIGITALISATION
Risk of inadequate digital
development
Digitalisation in the property sector is primarily about digitalising the properties themselves
in order to, for example, improve follow-up on consumption, etc., and to build smarter
homes and offer commercial customers digital services that promote business.
The digitalisation process is relatively simple to undertake in connection with new production,
where a lot can be integrated during the planning phase, for example fibre networks and sensors.
Work to digitalise an existing property is a bigger challenge, but Balder is equipped for this. The
company has continued to expand its operations by creating more roles with a focus on digitalisa
tion in order to drive developments forward.
Risk of inadequate IT security Inadequate IT security can have major consequences, for example in the form of data being
destroyed or lost, confidential information being leaked, etc. There is also a certain risk of
infringing statutory provisions on the processing of personal data.
Balder works with the layered security principle in order to minimise the areas for intrusion and
in recent years has continuously extended the level of protection. Apart from tried and tested
technologies such as firewalls, antivirus and backup systems, Balder has also supplemented its
protection with sandboxing systems, advanced email filtering and virtualisation to secure the
internal IT environment. Balder has also carried out extensive internal work in order to guarantee
compliance with the requirements of GDPR, in terms of both internal systems and structures as
well as employee training.
>> FINANCIAL RISKS
Refinancing risk Balder's greatest financial risk is a lack of financing. Refinancing risk refers to the risk that
financing cannot be obtained at all, or only at a significantly increased cost.
Balder conducts ongoing discussions with banks and credit institutions aimed at securing long
term financing and also renegotiating loans and diversifying the maturity structure of loans.
Meanwhile, this work ensures that competitive long-term financing is maintained. Balder's aver
age fixed credit term was 5.9 years (5.8).
Interest rate risk The interest expense is Balder's single largest cost item. Interest expenses are affected
primarily by the current level of market interest rates and the credit institutions' margins,
and also by what strategy Balder chooses for fixed terms for interest rates. A higher market
interest rate means an increased interest expense, but this often also coincides with higher
inflation and economic growth.
Higher interest expenses are partly offset by lower vacancy rates and higher rental income through
increased demand, and by the fact that rents are indexed. Balder has also chosen to use interest
rate derivatives to limit the risk of financing costs increasing significantly in the event of higher
market interest rates. In the event of an increase in the market interest rate of one percentage point
and assuming an unchanged loan and derivative portfolio, the interest expense would increase by
SEK 257 million. Of Balder's total loan stock at the year-end, 61% (56) had a fixed interest rate
period of more than one year.
Credit risk Credit risk is defined as the risk that Balder's counterparties cannot fulfil their financial obli
gations towards Balder. Credit risk in financial operations arises, for example, in connection
with the investment of excess liquidity, on entering into interest rate swap contracts and in
Balder conducts the customary credit checks before entering into a new lease and calculates the
credit risk in connection with new letting and the adaptation of premises for an existing customer.

The translation differences are mainly handled through borrowing spread among different currencies based on the net assets in each currency. Loans taken out in the same currencies as the net assets in the Group reduce these net assets and thereby reduce translation exposure.

Risk level assessment

Low Medium High

connection with the issuing of credit agreements.

Currency risk Balder owns properties via subsidiaries in Denmark, Finland, Norway, Germany and the UK.

pany's currency.

The companies have income and expenses in local currency and are thereby exposed to exchange rate fluctuations from the Group's perspective. Exchange rate fluctuations also occur when translating the foreign subsidiaries' assets and liabilities into the parent com-

AREA DESCRIPTION APPROACH ASSESSMENT
>> CHANGE IN VALUE
Risk of negative development
in value of properties
The value of the properties is affected by a number of factors, including property-specific
factors such as occupancy rate, rental level and operating costs, as well as market-specific
factors such as yield requirements and cost of capital. Both property-specific and market
specific changes affect the value of investment properties, which in turn impacts on the
Group's financial position and profits. 81% of the value of Balder's property portfolio is in the
four metropolitan regions of Helsinki, Stockholm, Gothenburg and Copenhagen. The value
of these properties can also be adversely affected if the technical obstacles to development,
for example conversion to reduce emissions and manage climate change, are too high and
expensive.
Balder carries out an internal valuation of the property portfolio in connection with quarterly
reports. Parts of the property portfolio are also valued externally and compared with the internal
valuation. Market assessments of properties always involve a certain degree of uncertainty in the
assumptions and estimates made. The profit before tax would be affected by SEK +/–7459 million
if there were a change in value of the investment properties of +/–5%. The equity/assets ratio
would be 40.2% in the event of a positive change in value and 36.8% in the event of a negative
change in value. See also Note 12, Investment properties. Balder has also initiated an analysis of
the impact of climate change on the properties, including the value trend, and this will become
more detailed in future.
>> TAX
Risk of changes in tax legislation The possibility cannot be ruled out that tax rates will change in the future or that other
changes will occur in the state system that affect property ownership. Changes in tax levels
and tax legislation, for example new rules in respect of depreciation, a ban on the packag
ing of properties and the opportunity to utilise loss carryforwards can affect Balder's future
tax expense and thereby affect the profit.
Balder monitors the development of legislation in markets where the company is active and
where relevant prepares the business and the financial statements for any adaptations that may
be necessary.
>> EXTERNAL ENVIRONMENT
The risk of serious incidents in
the external environment that
change the conditions for the
business
In 2020, the world was hit by a global pandemic that had unforeseen consequences. The
way out remains uncertain, with a risk of the impact being felt for several years to come.
Balder has been dealing constantly with issues relating to the ongoing pandemic and the compa
ny's stakeholders. For more information see page 5. Experiences from the past year will also con
tribute to a stronger organisation that is better equipped for similar incidents in the future.
>> ENVIRONMENT
Risk of hazardous substances
and choice of materials
The main challenges that Balder has identified in connection with the environmental area
are hazardous substances built into the properties such as PCB and asbestos, increased
radon values and transport operations to and from the properties.
Ongoing inventory is kept of the existing portfolio, and action plans are drawn up to manage
the risks in connection with planned measures or as separate projects. As new buildings become
more energy-efficient, the construction phase accounts for a bigger part of the total environmen
tal impact of buildings. These issues are taken into account in connection with new production,
both internally and in dialogue with external parties such as business partners, city planning
offices, consultants' or architects' offices and contractors.
Risk of increased impact
from transport operations
Both Balder's internal transport operations and customer transport operations to and from
the properties have a major environmental impact.
When developing areas, opportunities for more efficient transport are considered, and in many
areas car pools and bike pools, for example, are offered. Together with suppliers, Balder's internal
transport and logistics solutions are being reviewed so that the number of transport operations to
the properties is minimised and streamlined. This work will be further developed in future, as
Balder's increased project portfolio means increased construction, bringing a risk of increased
transport operations. The company's travel policy regulates business travel, and all local offices
have video equipment to minimise the number of trips for meetings.

Risk level assessment

Low Medium High

AREA DESCRIPTION APPROACH ASSESSMENT
Climate risks Rising sea levels, heavier rainfall and increased risks of landslides are climate risks that have
been highlighted and need to be dealt with in planning processes in order to reduce the
risks of damage to properties and infrastructure going forward. In the event of floods there
is a risk that vermin will find their way into properties, resulting in a risk of the spread of con
tagion and damage.
Investigations into which climate adaptations might be necessary are conducted in the planning
process and managed in detailed development plans. Aside from this, Balder strives to review
work on climate risks, including the preparation of plans for how existing properties that may be
in the risk zone should be registered and what action plans need to be prepared. This work entails,
among other things, plans to further reduce emissions from the business, as well as plans describ
ing, for example, how properties situated in areas where the risk of flooding is considered to be
high are to be equipped to deal with this. To increase transparency in this work, Balder is also
continuing to develop the company's reporting of emissions and other climate-related metrics,
and during the year has also incorporated the climate issue into the risk management process in
accordance with the recommendations issued by the Task Force on Climate-related Financial
Disclosures (TCFD). Potential effects of climate change have been identified in terms of both
property costs and value growth, and work has started on action plans to manage these.
Read more on page 101.
>> SOCIAL CONDITIONS AND EMPLOYEES
Risk of deficiencies in the skills
supply, work environment and
respect for human rights
As Balder has grown, both geographically and in terms of the number of colleagues, challen
ges have arisen, including the new recruitment and retention of existing colleagues, identi
fying and utilising Group-wide resources and developing common work methods. Another
challenge resulting from the company's strong growth is to get every colleague to feel that
they are part of Balder's corporate culture.
Balder's Code of Conduct is based on the principles of the UN's Global Compact and deals with
issues relating to the work environment and human rights. Balder is striving to continue to increa
se equal opportunity and diversity in the organisation, in order to reflect society in the best way
possible. In order to attract new employees, Balder continuously participates in job fairs at insti
tutes of higher education, and offers work placements and opportunities for students to do their
degree projects.

>> ETHICS AND ANTI-CORRUPTION

Risk of fraud and bribery For property companies processes such as those in the areas of letting, recruitment and
supplier selection are particularly important.
Balder has a Code of Conduct as well as policies and procedures, which are intended to guide
and ensure respectful and business-like relationships, while minimising risks of, for example, dis
crimination and corruption. When selecting suppliers and during follow-up on delivered quality,
internal criteria are used to guarantee compliance with laws and regulatory requirements and also
with the company's adopted policies and guidelines. There is an independent whistleblowing
function for the reporting of infringements.
--------------------------- ------------------------------------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- --

Low Medium High

FINANCIAL STATEMENTS

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

SEKm Note 2020 2019
Rental income 2, 3 8,134 7,609
Property costs 2, 6, 7 –1,919 –1,966
Net operating income 6,216 5,643
Management costs and administrative expenses 4, 5, 6 – 676 –664
Participation in profits of associated companies/joint ventures 14 897 876
– of which profit from property management 663 787
– of which changes in value 489 297
– of which tax –254 –209
Other income/expenses 371 7
– of which unrealised change in value of long-term financial asset 32 462
Profit before net financial items 6,809 5,863
Financial items
Financial income 9 299 395
Financial expenses 9 –1,511 –1,565
– of which lease expense/ground rent 8 –64 –63
Net financial items –1,212 –1,170
Profit including changes in value and tax in associated companies/joint ventures 5,597 4,693
– of which Profit from property management 2, 3, 4, 5, 6, 7, 8, 9 4,900 4,604
Changes in value
Changes in value of investment properties, realised 12 24 14
Changes in value of investment properties, unrealised 12 3,429 9,562
Changes in value of derivatives 22 –141 –180
Income from divestment of development properties 16 1,253 387
Expenses from divestment of development properties 16 –1,079 –292
Changes in value, total 3,486 9,492
Profit before tax 9,083 14,185
Income tax 10 –1,807 –2,659
Net profit for the year 7,275 11,526
Net profit for the year attributable to
The parent company's shareholders 6,641 8,958
Non-controlling interests 21 634 2,568
7,275 11,526
SEKm Note 2020 2019
Other comprehensive income – items that may be reclassified
to profit or loss
Translation difference relating to foreign operations
(net after hedge accounting)
–705 8
Cash flow hedges after tax –20 –55
Participation in other comprehensive income from associated
companies/joint ventures
–37 3
Total comprehensive income for the year 6,513 11,482
Total comprehensive income for the year attributable to
The parent companys shareholders 6,273 8,865
Non-controlling interests 240 2,617
6,513 11,482
SEKm Note 2020 2019
Profit from property management 4,900 4,604
Of which non-controlling interests' participation in the profit from
property management
–657 –581
Profit from property management attributable to parent
companys shareholders
4,244 4,023
Profit from property management per share, SEK 23.51 22.35
Profit after tax per share, SEK 11 36.79 49.77

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

SEKm Note 31 Dec 2020 31 Dec 2019
Assets
Non-current assets
Investment properties 12, 25 149,179 141,392
Leases; right of use 8 1,532 1,541
Other property, plant and equipment 13 160 166
Participations in associated companies/joint ventures 14 15,593 7,018
Other non-current receivables 15 2,302 1,448
Total non-current assets 168,765 151,565
Current assets
Development properties 16 2,803 2,344
Trade receivables 17 343 241
Other receivables 713 399
Prepaid expenses and accrued income 18 650 478
Financial investments 19 2,659 1,523
Cash and cash equivalents 26 4,468 1,379
Total current assets 11,636 6,363
Total assets 180,401 157,928
SEKm Note 31 Dec 2020 31 Dec 2019
Equity and liabilities
Equity 20
Share capital 187 180
Other contributed capital 10,729 7,806
Translation differences –789 –432
Reserves 15 26
Retained earnings including net profit for the year 48,068 41,432
Equity attributable to the parent company's shareholders 58,209 49,011
Non-controlling interests 21 9,676 9,714
Total equity 67,885 58,725
Liabilities
Non-current liabilities
Non-current interest-bearing liabilities1,2) 22 79,814 69,436
Other non-current liabilities 828 542
Lease liability 8 1,487 1,494
Deferred tax liability 10 12,497 11,285
Derivatives 22 1,155 1,108
Total non-current liabilities 95,781 83,865
Current liabilities
Current interest-bearing liabilities1) 22 9,175 11,806
Trade payables 505 660
Lease liability 8 49 49
Derivatives 22 384 102
Other liabilities3) 4,076 605
Accrued expenses and prepaid income 24 2,546 2,115
Total current liabilities 16,735 15,338
Total liabilities 112,516 99,203
Total equity and liabilities 180,401 157,928

1) Interest-bearing liabilities that formally mature within one year and one year of agreed amortisation are recognised as current interestbearing liabilities.

2) The line item Non-current interest-bearing liabilities includes Hybrid capital of SEK 3,513 million (3,652). 50% of the Hybrid capital, or equivalent to SEK 1,757 million (1,826), is treated as equity by the ratings agencies and thereby reduces interest-bearing liabilities when calculating the debt/equity ratio and net debt to total assets, and increases equity when calculating the equity/assets ratio.

3) The line Other liabilities per 31 dec 2020 includes SEK 3,009 million which relates to a commitment in respect of the acquisition of shares in Entra ASA.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Attributable to parent company's shareholders
SEKm Share capital Other
contributed
capital
Reserves Translation
differences
Retained earnings
incl. net profit for
the year
Total Non-controlling
interests
Total
equity
Opening equity, 01/01/2019 180 7,806 56 –369 32,473 40,146 7,262 47,408
Net profit for the year 8,958 8,958 2,568 11,526
Other comprehensive income –30 –63 –93 49 –44
Total comprehensive income –30 –63 8,958 8,865 2,617 11,482
Transactions with non-controlling interests –35 –35
Dividends to non-controlling interests –137 –137
Non-controlling interests arising from the acquisition of subsidiaries 8 8
Total transactions with the company's owners –164 –164
Closing equity, 31/12/20191) 180 7,806 26 –432 41,432 49,011 9,714 58,725
Opening equity, 01/01/2020 180 7,806 26 –432 41,432 49,011 9,714 58,725
Net profit for the year 6,641 6,641 634 7,275
Other comprehensive income –11 –357 –368 –394 –763
Total comprehensive income –11 –357 6,641 6,273 240 6,513
Transactions with non-controlling interests –5 –5 –296 –301
Share issue, after issue costs 7 2,923 2,930 2,930
Shareholder contributions from non-controlling interests 17 17
Total transactions with the company's owners 7 2,923 –5 2,925 –278 2,647
Closing equity, 31/12/20201) 187 10,729 15 –789 48,068 58,209 9,676 67,885

1) For more information, see Note 20, Equity.

CONSOLIDATED CASH FLOW STATEMENT

SEKm Note 2020 2019
Operating activities
Net operating income 6,216 5,643
Other income/expenses –91 7
Management costs and administrative expenses – 676 –664
Sales expenses development properties –20
Reversal of depreciation and amortisation 41 42
Interest received 26 267 176
Interest paid 26 –1,442 –1,596
Tax paid –310 –321
Cash flow from operating activities before change in working capital 3,986 3,288
Cash flow from changes in working capital
Change in operating receivables –901 –262
Change in operating liabilities 3,435 183
Cash flow from operating activities 6,520 3,209
Investing activities
Acquisition of investment properties –3,491 –7,972
Acquisition/divestment of property, plant and equipment –36 –85
Acquisition of financial investments –1,665 –594
Acquisition/capital contribution/borrowing from and lendning to
associated companies/joint ventures
–8,128 –601
Investments in existing properties and projects –5,572 –8,133
Transactions with non-controlling interests –301 –35
Divestment of investment properties 366 1,050
Divestment of delvelopment properties 1,253 387
Divestment of financial investments 561 60
Divestment of shares in associated companies/joint ventures 15
Dividend paid from associated companies/joint ventures 20 42
Cash flow from investing activities –16,993 –15,867
SEKm Note 2020 2019
Financing activities 26
Share issue, after issue costs 2,930
Dividend paid to non-controlling interests –137
Amortisation of lease liability –19 –26
Shareholder contribution from non-controlling interests 18
Borrowings 20,472 25,169
Amortisation/redemption of loans –9,838 –11,527
Cash flow from financing activities 13,563 13,479
Cash flow for the year 3,089 821
Opening cash and cash equivalents 1,379 558
Closing cash and cash equivalents 26 4,468 1,379
Available liquidity, SEKm Note 2020 2019
Cash and cash equivalents 4,468 1,379
Unutilised overdraft facilities 23 350 350
Unutilised credit facilities 13,032 8,673
Financial investments 19 2,659 1,523
Available liquidity including confirmed credit commitments 20,509 11,925

PARENT COMPANY INCOME STATEMENT

SEKm Note 2020 2019
Net sales 3 349 361
Administrative expenses 4, 5 –353 –363
Operating profit –4 –2
Profit from financial items
Dividends from subsidiaries 975 800
Interest income and similar profit/loss items 9 2,705 1,420
– of which exchange rate differences 785
– of which unrealised change in value of long-term financial asset 32 462
Interest expenses and similar profit/loss items 9 –1,106 –1,226
– of which exchange rate differences –251
Changes in value of derivatives 22 –141 –180
Profit before appropriations and tax 2,429 812
Appropriations
Group contribution –821 229
Profit before tax 1,608 1,042
Income tax 10 7 –16
Net profit for the year/comprehensive income 1) 1,615 1,025

1) The Parent Company has no items that are recognised in Other comprehensive income and therefore total comprehensive income corresponds to net profit for the year.

PARENT COMPANY BALANCE SHEET

SEKm Note 31 Dec 2020 31 Dec 2019
ASSETS
Non-current assets
Property, plant and equipment 13 22 23
Financial assets
Participations in Group companies 25, 27 10,376 10,111
Participations in associated companies/joint ventures 14, 25 8,426 1,972
Other non-current receivables 15 1,817 1,190
Receivables from Group companies 28 57,787 52,646
Total financial assets 78,406 65,919
Deferred tax assets 10 91 74
Total non-current assets 78,519 66,016
Current assets
Current receivables
Other receivables 52 70
Prepaid expenses and accrued income 18 133 137
Total current receivables 184 206
Financial investments 19 2,078 1,051
Cash and cash equivalents 26 1,359 944
Total current assets 3,621 2,201
TOTAL ASSETS 82,140 68,217
SEKm Note 31 Dec 2020 31 Dec 2019
EQUITY AND LIABILITIES
Equity 20
Restricted equity
Share capital 187 180
Non-restricted equity
Share premium reserve 7,289 4,366
Retained earnings 7,707 6,681
Net profit for the year 1,615 1,025
Total equity 16,798 12,253
Non-current liabilities
Liabilities to credit institutions1,2) 22 40,260 39,449
Derivatives 22 735 624
Liabilities to Group companies 28 14,419 10,966
Total non-current liabilities 55,414 51,038
Current liabilities
Liabilities to credit institutions1) 22 6,106 4,414
Trade payables 7 19
Derivatives 22 32 2
Other liabilities3) 3,329 96
Accrued expenses and prepaid income 24 454 396
Total current liabilities 9,928 4,926
TOTAL EQUITY AND LIABILITIES 82,140 68,217

1) Interest-bearing liabilities that formally mature within one year and one year of agreed amortisation are recognised as current interestbearing liabilities.

2) The line item Non-current interest-bearing liabilities includes Hybrid capital of SEK 3,513 million (3,652). 50% of the Hybrid capital, or equivalent to SEK 1,757 million (1,826), is treated as equity by the ratings agencies and thereby reduces interest-bearing liabilities when calculating the debt/equity ratio and net debt to total assets, and increases equity when calculating the equity/assets ratio.

3) The line Other liabilities per 31 dec 2020 includes SEK 3,009 million which relates to a commitment in respect of the acquisition of shares in Entra ASA.

PARENT COMPANY STATEMENT OF CHANGES IN EQUITY

Restricted equity Non-restricted equity
SEKm Number of shares Share capital Share premium reserve Retained earnings Net profit for the
year
Total equity
Opening equity, 01/01/2019 180,000,000 180 4,366 5,091 1,590 11,227
Net profit for the year/comprehensive income 1,025 1,025
Appropriation of profits 1,590 –1,590
Total transactions with the company's owners 1,590 –1,590
Closing equity, 31/12/20191) 180,000,000 180 4,366 6,681 1,025 12,253
Opening equity, 01/01/2020 180,000,000 180 4,366 6,681 1,025 12,253
Net profit for the year/comprehensive income 1,615 1,615
Share issue, after issue costs 6,500,000 7 2,923 2,930
Appropriation of profits 1,025 –1,025
Total transactions with the company's owners 6,500,000 7 2,923 1,025 –1,025 2,930
Closing equity, 31/12/20201) 186,500,000 187 7,289 7,707 1,615 16,798

1) For more information, see Note 20, Equity.

PARENT COMPANY'S CASH FLOW STATEMENT

SEKm Note 2020 2019
Operating activities
Operating profit –4 –2
Reversal of depreciation/impairment 6 4
Interest received 26 158 137
Interest paid 26 –840 –783
Tax paid –9 –5
Cash flow from operating activities before change in working capital –689 –649
Cash flow from changes in working capital
Change in operating receivables 260 –78
Change in operating liabilities 3,042 5
Cash flow from operating activities 2,612 –722
Investing activities
Acquisition of property, plant and equipment –5 –9
Acquisition of participations in Group companies/shareholder
contributions paid
–265 –1,662
Acquisition of financial investments –966 –73
Change in lending to Group companies –1,138 –6,819
Change in lending to associated companies/joint ventures –595 –367
Divestment of financial investments 60
Acquisition of shares in associated companies/capital contribution –5,992 –91
Cash flow from investing activities –8,962 –8,961
SEKm Note 2020 2019
Financing activities 26
Share issue, after issue costs 2,930
Borrowings 7,524 12,127
Amortisation/redemption of loans –3,689 –1,729
Cash flow from financing activities 6,765 10,398
Cash flow for the year 415 714
Opening cash and cash equivalents 944 230
Closing cash and cash equivalents 26 1,359 944
Available liquidity, SEKm Note 2020 2019
Cash and cash equivalents 1,359 944
Unutilised overdraft facilities 23 350 350
Unutilised credit facilities 9,519 4,500
Financial investments 19 2,078 1,051
Available liquidity including confirmed credit commitments 13,306 6,845

NOTES ON THE FINANCIAL STATEMENTS

NOTE 1 Accounting policies

General information

The financial statements for Fastighets AB Balder, as of 31 December 2020, were approved by the Board of Directors and Chief Executive Officer on 18 March 2021 and will be submitted for adoption by the Annual General Meeting on 12 May 2021.

Fastighets AB Balder (publ), corporate identity number 556525- 6905, with its registered office in Gothenburg, constitutes the parent company of a Group with subsidiaries according to Note 27, Participations in Group companies. The company is registered in Sweden and the address of the company's head office in Gothenburg is Fastighets AB Balder, Box 53121, 400 15 Gothenburg, Sweden. The visiting address is Parkgatan 49. Balder is a listed property company which aims to meet the needs of different customer groups for commercial premises and housing based on local presence.

The accounting policies are described in association with each note in order to provide a better understanding of each accounting area. The general accounting policies and information about the consolidated financial statements are set out below. Accounting policies, risks, estimates and assessments are then presented more specifically for each note in order to provide the reader with a greater understanding of each income statement and balance sheet item.

– Accounting policies are indicated by

– Risks are indicated by

– Estimates and assessment are indicated by

Accounting policies

The consolidated accounts have been prepared in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and statements on interpretations announced by the International Financial Reporting Interpretations Committee (IFRIC) as adopted by the EU. The Swedish Financial Accounting Standards Council's recommendation RFR 1, Complementary Accounting Rules for Groups, was also applied.

The annual accounts of the parent company have been prepared in accordance with the Swedish Annual Accounts Act, the Swedish Financial Accounting Standards Council's recommendation RFR 2 (Accounting for Legal Entities) and statements from the Swedish Financial Reporting Board. The parent company applies the same accounting policies as the Group except in the cases specified below in the section entitled "Parent Company accounting policies". The deviations that occur between the parent company and Group accounting policies are due to limitations in the possibilities of applying IFRS in the parent company as a consequence of the Annual Accounts Act.

The parent company's functional currency is the Swedish krona (SEK), which is also the presentation currency of the parent company and the Group.

Unless otherwise specified, the financial statements are presented in Swedish kronor rounded off to millions of kronor.

Preparation of financial statements in conformity with IFRS requires company management to make estimates and assumptions that affect the application of the accounting policies and the recognised amounts of assets, liabilities, income and expenses.

The estimates and assumptions are based on historical experiences and a number of other factors that are considered reasonable in the prevailing circumstances. The result of these estimates and assumptions is subsequently used to estimate the carrying amounts of assets and liabilities that are not otherwise clear from other sources. The actual outcome may diverge from these estimates and judgements.

Estimates and assumptions are reviewed regularly. Changes in estimates are recognised in the period in which they arise if the change affects that period alone or, alternatively, in the period in which they arise and during future periods if the change affects both the period in question and future periods.

Assumptions made by company management in the application of IFRS, which have a material impact on the financial statements, and estimates which may give rise to significant adjustments in subsequent financial statements are presented in more detail in Note 10, Income tax and in Note 12, Investment properties.

Unless otherwise stated below, the accounting principles set out for the Group have been applied consistently for all periods presented in the Group's financial statements. The Group's accounting policies have been applied consistently in the reporting and consolidation of subsidiaries.

Classification, etc.

Non-current assets and non-current receivables essentially consist of amounts that are expected to be recovered or paid after more than twelve months, calculated from the end of the reporting period. Current assets and current liabilities essentially consist of amounts that are expected to be recovered or paid within twelve months, calculated from the end of the reporting period. Current liabilities to credit institutions include the interest-bearing liabilities that formally mature within one year and one year's agreed amortisation. The company's interestbearing liabilities are non-current in nature, as they are continually extended, see Note 22, Financial risk management. In the parent company, receivables and liabilities from/to Group companies are recognised as non-current, as there is no approved amortisation plan.

Basis of consolidation

Subsidiaries are all companies (including structured companies) over which the Group has control. The Group controls a company when it is exposed to or has the right to a variable return from its holding in the company and can affect the return through its control of the company. When determining whether control exists, potential voting shares that can be called upon or converted without delay should be considered.

Subsidiaries are reported according to the acquisition method. This method means that acquisition of a subsidiary that is classified as a business combination is treated as a transaction by which the Group indirectly acquires the subsidiary's assets and assumes its liabilities and contingent liabilities. The analysis establishes the cost of the shares or entity, as well as the fair value on the acquisition date of the company's identifiable assets, liabilities assumed and contingent liabilities. The consideration also includes the fair value of all assets or liabilities which are a result of an agreement on contingent consideration. Expenses relating to the

acquisition are recognised as expenses as they arise. For each acquisition, the Group determines if non-controlling interests in the acquired entity are recognised at fair value or at the non-controlling interest's proportionate share of the acquired company's net assets. The cost of acquisition of a subsidiary's shares and operations consists of the fair values of the assets on the date of exchange, liabilities incurred or assumed and equity instruments issued as consideration in exchange for the acquired net assets, as well as transaction costs that are directly attributable to the acquisition.

In business combinations where the cost of acquisition exceeds the net value of acquired assets, and liabilities and contingent liabilities assumed, the difference is recognised as goodwill. When the difference is negative, this is recognised directly in the income statement. When a company is acquired, the acquisition constitutes either the acquisition of an entity or the acquisition of an asset. An acquisition of an asset is identified if the acquired company only owns one or more properties. There are leases for these properties, but no members of staff are employed in the company who can conduct business. In a business combination based on joint control, de facto control, the acquisition is recognised at historical cost, which means that assets and liabilities are recognised at the values they have been carried at in each company's balance sheet. In this way, no goodwill arises.

When an acquisition occurs of a group of assets or net assets which do not constitute an entity, the cost for the Group is allocated according to the individually identifiable assets and liabilities in the Group based on their relative fair values on the acquisition date.

The subsidiaries' financial statements are included in the consolidated financial statements from the date on which control arises until the date on which control ceases.

Transactions with non-controlling interests and eliminations

Transactions with non-controlling interests that do not result in a loss of control are recognised as equity transactions, i.e. transactions with owners in their capacity as owners. In the case of acquisitions from non-controlling interests, the difference between the fair value of consideration paid and the proportion of the carrying amount of the subsidiary's net assets actually acquired is recognised in equity. Gains and losses on divestments to non-controlling interests are also recognised in equity.

Intra-Group receivables and liabilities, income or expenses, and unrealised gains or losses arising from transactions between Group companies, are eliminated in full on preparation of the consolidated financial statements.

Foreign currency Financial statements of foreign operations

Assets and liabilities in foreign operations are translated to Swedish kronor at the exchange rate prevailing at the end of the reporting period. Income and expenses in a foreign operation are translated into Swedish kronor at an average rate that represents an approximation of the prevailing exchange rates on the date of each transaction.

Contd. Note 1 Accounting policies

Translation differences arising on currency translation of foreign operations are recognised via other comprehensive income as a translation reserve.

Transactions in foreign currency

Transactions in foreign currencies are converted to the functional currency at the exchange rate prevailing on the transaction date. The functional currency is the currency used in the primary economic environments where the companies conduct their operations. Monetary assets and liabilities in foreign currency are translated into the functional currency at the exchange rate prevailing at the end of the reporting period. Exchange differences are recognised in the income statement, apart from non-current internal balances, which are treated as a part of the net investment in subsidiaries and are recognised via other comprehensive income. Non-monetary assets and liabilities that are recognised at historical cost are translated at the exchange rate prevailing on the transaction date. Non-monetary assets and liabilities that are recognised at fair value are translated into the functional currency at the rate prevailing on the date of fair value measurement.

Impairments

The carrying amounts of the Group's assets, with the exception of investment properties, financial instruments and deferred tax assets, are tested on each balance sheet date to determine if there is any indication of an impairment requirement. If any such indication exists, the asset's recoverable amount is estimated. For exempted assets, as above, the carrying amount is tested in accordance with each standard.

If it is impossible to determine significant independent cash flows to an individual asset, the assets should be grouped, in conjunction with impairment testing, at the lowest level at which it is possible to identify significant independent cash flows – this is known as a cash generating unit. An impairment is recorded when the carrying amount of an asset or a cash-generating unit exceeds the recoverable amount. An impairment loss is recognised in the income statement.

Assets with short maturities are not discounted. The recoverable amount of other assets is the higher of the fair value minus selling expenses and the value in use. In calculating value in use, future cash flows are discounted using a discount factor that takes into account the risk-free rate of interest and the risk associated with the specific asset. For an asset that does not generate cash flows, which is significantly independent of other assets, the recoverable amount is estimated for the cash generating unit to which the asset belongs.

Provisions

A provision is recognised in the balance sheet when the Group has an existing legal or informal obligation as a result of past events, and it is probable that an outflow of financial resources will be required to settle the obligation and that the amount can be reliably estimated. In cases where the effect of payment timing is significant, provisions are calculated by discounting the expected future cash flow at an interest rate before tax that reflects current market assessments of the time value of money and, if applicable, the risks specific to the liability.

New and amended standards applied for the first time in 2020

From 1 January 2020, the amendment to IFRS 3 will be applied, which means, among other things, that a voluntary concentration test can be applied to simplify the assessment of whether the transaction is not a business/operation. The amendment to IFRS 3 is not considered to be significant any significant impact on the Group's classification of acquisitions as asset acquisitions or acquisition of business/operation. Other new and changed standards and interpretations which have entered into force on 1 January 2020 and which have been applied for the first time the time for the financial year has not had any significant impact on the company accounting.

New and amended standards that have not yet been applied by the Group

A number of new standards and interpretations come into force for the financial year that commences on 1 January 2021 or thereafter and have not been applied in the preparation of this financial statement. It is not considered that any of the published standards that have not yet come into force will have any significant impact on the Group.

Parent Company accounting policies

The parent company has prepared its annual accounts in accordance with the Swedish Annual Accounts Act and the Swedish Financial Reporting Board's recommendation RFR 2, Accounting for Legal Entities. This recommendation means that the parent company in the annual accounts for the legal entity should apply all rules of the International Financial Reporting Standards and interpretations approved by the EU as far as possible within the framework of the Swedish Annual Accounts Act, and taking into account the connection between recognition and taxation. The recommendation states which exemptions and amendments are applied with regard to IFRS.

Differences between the accounting policies of the parent company and the Group

The accounting policies set out for the parent company have been applied consistently for all periods presented in the parent company's financial statements. In those instances where the accounting policies deviate from the Group's accounting policies, this is specified in the notes or below.

Classification and presentation

The parent company's income statement and balance sheet are prepared in accordance with the layout described in the Swedish Annual Accounts Act. The difference from IAS 1 Presentation of Financial Statements, which is applied in the presentation of the consolidated financial statements, relates primarily to recognition of financial income and expenses and of equity.

Anticipated dividends

Anticipated dividends from subsidiaries are recognised in cases where the parent company has the exclusive right to decide on the size of the dividend and the parent company has made a decision on the size of the dividend before having published its financial statements.

Group contributions and shareholders' contributions

The company recognises Group contributions and shareholders' contributions in accordance with the Swedish Financial Reporting Board's recommendation RFR 2. Shareholders' contributions are recognised directly in equity at the recipient and are capitalised as shares and participations at the donor, if impairment is not required. Group contributions are recognised as income in the income statement of the recipient and as an expense for the donor. The tax effect is recognised in accordance with IAS 12 in the income statement.

Income

Recognised in accordance with the principles described in Note 3, Distribution of income.

Leases

Recognised in accordance with the principles described in Note 8, Leases.

Taxes

Recognised in accordance with the principles described in Note 10, Income tax.

Associated companies/joint ventures

Recognised in accordance with the principles described in Note 14, Participations in associated companies/joint ventures.

Subsidiaries

Recognised in accordance with the principles described in Note 27, Participations in Group companies.

Financial guarantees

Recognised in accordance with the principles described in Note 25, Pledged assets and contingent liabilities.

NOTE 2 Segment reporting

ACCOUNTING POLICY

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decisionmaker is the function responsible for allocation of resources and evaluation of the operating segments' results. In the Group, this function has been identified as the Management team, which takes strategic decisions. Management primarily follows up on operating segments in terms of their operating surplus, where the distribution of shared property administration expenses has taken place through the cost principle. The Group's internal reporting of the operations is divided into the segments Helsinki, Stockholm, Gothenburg, Copenhagen, South, East and North, which are harmonised with the Group's internal reporting system. SATO's property portfolio distributed between the Helsinki and East regions. Property holdings in Norway is classified under region North, the properties in Denmark under region Copenhagen and the properties in Germany and the UK under the South region.

Regions Helsinki Stockholm Gothenburg Copenhagen South East North Group
SEKm 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019
Rental income 2,495 2,433 1,338 1,234 1,561 1,426 657 566 584 589 1,218 1,083 282 277 8,134 7,609
Property costs –675 –686 –243 –261 –324 –327 –159 –130 –124 –118 –330 –366 –64 –78 –1,919 –1,966
Net operating income 1,820 1,747 1,095 973 1,237 1,099 499 436 460 471 888 717 218 199 6,216 5,643
Changes in value of properties
Commercial properties 7 647 319 253 1,390 12 76 112 398 –8 26 24 113 1,047 2,322
Residential properties 1,229 5,423 111 192 187 244 1,156 669 141 132 –561 498 142 98 2,406 7,255
Development properties 145 95 29 174 95
Net operating income including changes in value
Non-allocated items:
3,056 7,169 1,853 1,484 1,822 2,828 1,696 1,181 713 1,000 319 1,241 384 411 9,842 15,315
Other income/expenses 371 7
Management costs and administrative expenses – 676 –664
Participations in profits of associated companies 897 876
Operating profit 10,435 15,534
Net financial items –1,212 –1,170
Changes in value of derivatives –141 –180
Income tax –1,807 –2,659
Net profit for the year 7,275 11,526
Other comprehensive income –763 –44
Comprehensive income for the year 6,513 11,482

Contd. Note 2 Segment reporting

Regions Helsinki Stockholm Gothenburg Copenhagen South East North Group
SEKm 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019
Assets
Commercial properties 852 647 22,304 21,016 24,243 22,881 2,441 2,504 8,340 8,290 2,650 1,640 1,520 1,552 62,349 58,530
Residential properties 41,542 40,064 5,327 5,368 7,073 6,490 14,948 12,902 2,099 1,906 11,883 12,722 3,958 3,410 86,830 82,862
Investment properties 42,394 40,711 27,631 26,383 31,315 29,371 17,388 15,407 10,439 10,196 14,533 14,362 5,478 4,962 149,179 141,392
Development properties 812 448 1,594 1,422 250 265 145 42 11 3 156 2,803 2,344
Total property portfolio 42,394 40,711 28,443 26,831 32,910 30,794 17,638 15,672 10,583 10,238 14,533 14,373 5,480 5,117 151,982 143,736
Non-allocated items:
Property, plant and equipment 160 166
Leases; right of use 1,532 1,541
Other receivables 4,007 2,566
Participations in associated companies 15,593 7,018
Cash and cash equivalents and financial investments 7,127 2,902
Total assets 180,401 157,928
Equity and liabilities
Non-allocated items:
Equity 67,885 58,725
Lease liability 1,536 1,543
Deferred tax liability 12,497 11,285
Interest-bearing liabilities 88,989 81,242
Derivatives 1,540 1,210
Non interest-bearing liabilities 7,955 3,923
Total equity and liabilities 180,401 157,928
Investments (including company acquisitions)
Commercial properties 449 120 167 1,664 990 4,593 108 1,367 60 1,444 752 24 4 87 2,530 9,300
Residential properties 2,149 3,278 130 596 421 632 1,614 223 30 162 173 448 496 368 5,015 5,707
Investment properties 2,598 3,398 297 2,260 1,411 5,225 1,722 1,590 91 1,607 925 472 500 454 7,545 15,006
Development properties 427 299 741 950 228 177 123 28 7 1 104 1,518 1,566
Total property portfolio 2,598 3,398 724 2,559 2,152 6,175 1,950 1,767 213 1,635 925 479 501 558 9,063 16,572

The Group's registered office is in Sweden. Income from external customers in Sweden totals SEK 3,734 million (3,481) and total income from external customers in Denmark, Finland, Norway, Germany and the UK totals SEK 4,400 million (4,127). The total of non-current assets, other than financial instruments and deferred tax receivables that are located in Sweden, is SEK 7 7,425 million (73,023) and the total of such non-current assets located in other countries is SEK 74,718 million (70,878).

NOTE 3 Distribution of income

ACCOUNTING POLICY

Group – Rental income and service income

Rental income refers to income from leases in which the Group is the lessor. Rental income includes rent, supplements for investments and property tax, as well as other additional charges such as heating, water, air conditioning, waste management, etc. as it is not considered necessary to report these separately. Both rental income and additional charges are recognised on a straight-line basis in the consolidated income statement based on the terms and conditions of the lease. The aggregated cost of discounts provided is recognised as a reduction in rental income on a straight-line basis over the lease term. Rental income and additional charges are paid in advance and recognised as prepaid income in the balance sheet.

Group – Income from divestments of investment properties and development properties

For policies in respect of income and profits from divestments of investment properties and development properties, see Note 12, Investment properties and Note 16, Development properties.

Parent company – Service assignments

The parent company's net sales consist of property management services for subsidiaries and associated companies. This income is recognised in the period to which it relates.

There is no division between rental income and income from contracts with customers, as this income is not significant. The categories of rental income presented below include service income.

Balder has granted discounts of SEK 28 million in accordance with the state rent support package linked to covid-19, of which Balder accounts for 50%. Thus, for reasons of simplification, the net amount of SEK 14 million reduced rental income.

Group Parent Company
SEKm 2020 2019 2020 2019
Rental income 8,134 7,609
Service assignments 349 361
Total 8,134 7,609 349 361

RENTAL INCOME DISTRIBUTED BY COUNTRY

Group
SEKm 2020 2019
Sweden 3,734 3,481
Denmark 657 566
Finland 3,547 3,354
Norway 75 76
Germany 45 51
UK 77 80
Total 8,134 7,609

RENTAL INCOME DISTRIBUTED BY PROPERTY CATEGORY

Group
SEKm 2020 2019
Residential 4,899 4,600
Office 1,365 1,249
Retail 803 674
Other 998 1,050
Projects for own management 69 35
Total 8,134 7,609

RENTAL INCOME DISTRIBUTED BY REGION

Group
SEKm 2020 2019
Helsinki 2,495 2,433
Stockholm 1,338 1,234
Gothenburg 1,561 1,426
Copenhagen 657 566
South 584 589
East 1,218 1,083
North 282 277
Total 8,134 7,609

NOTE 4 Employees and staff costs

ACCOUNTING POLICY

Employee benefits

Short-term benefits

Employee benefits are calculated without discount and recognised as an expense when the related services are received.

Pensions

Pension plans are classified as either defined contribution or defined benefit. Most of the plans are defined contribution plans. Defined benefit plans only occur in exceptional cases.

Defined contribution plans

For defined-contribution pension plans, the Group pays contributions to privately managed pension insurance plans on a voluntary basis. The Group has no other payment commitments once the contributions have been paid, i.e. the individual bears the risk. The contributions are recognised as staff costs when they fall due for payment. Prepaid contributions are recognised as an asset to the extent that cash repayment or a reduction of future payments may be credited to the Group.

Redundancy compensation

A provision is recognised in connection with redundancies of staff only if it can be proven that the company is obliged to terminate a period of employment before the normal time or if compensation is paid in order to encourage voluntary redundancy.

At the year-end, the Group had 824 employees (784), of whom 351 were female (327). The number of employees in the parent company at the year-end was 379 (360), of whom 129 were female (111).

During 2020, Fastighets AB Balder had 5 Board members (5) including the Chairman, of whom 1 (1) was female. The Group together with the parent company had 6 senior executives (6) including the CEO, of whom 2 (1) was female.

AVERAGE NUMBER OF EMPLOYEES WITH GEOGRAPHIC DISTRIBUTION PER COUNTRY

Group Parent Company
2020 2019 2020 2019
Average number of employees 795 725 366 325
of whom women 340 267 122 99
of whom male 455 458 244 226
of which Sweden (of whom men) 502 (330) 459 (354) 366 (244) 325 (226)
of which Finland (of whom men) 229 (96) 223 (85)
of which Denmark (of whom men) 64 (29) 43 (19)

Contd. Note 4 Employees and staff costs

SALARIES, FEES AND BENEFITS

Group Parent Company
SEKm 2020 2019 2020 2019
Chairman of the Board 0.2 0.2 0.2 0.2
Other Board members 0.3 0.3 0.3 0.3
Chief Executive Officer
Basic salary 0.9 0.9 0.9 0.9
Benefits
Deputy CEO
Basic salary 0.7 0.7 0.7 0.7
Benefits
Other senior executives
Basic salary 6.2 6.7 6.2 6.7
Benefits 0.3 0.4 0.3 0.4
Other employees
Basic salary 366.4 339.1 159.6 145.2
Benefits 4.0 3.8 2.6 2.7
Total 379.0 352.1 170.8 157.1

STATUTORY SOCIAL SECURITY CONTRIBUTIONS INCLUDING PAYROLL TAX

Group Parent Company
SEKm 2020 2019 2020 2019
Board of Directors 0.1 0.1 0.1 0.1
Chief Executive Officer 0.4 0.4 0.4 0.4
Deputy CEO 0.2 0.2 0.2 0.2
Other senior executives 2.2 2.6 2.2 2.6
Other employees 105.7 103.6 54.1 49.5
Total 108.6 106.9 57.0 52.8

CONTRACTUAL PENSION EXPENSES

Group Parent Company
SEKm 2020 2019 2020 2019
Chief Executive Officer 0.3 0.3 0.3 0.3
Deputy CEO
Other senior executives 0.8 1.4 0.8 1.4
Other employees 40.1 39.0 12.8 10.0
Total 41.2 40.7 13.9 11.7
Total staff costs 528.8 499.6 241.7 221.6

REMUNERATION TO SENIOR EXECUTIVES AND OTHER BENEFITS DURING THE YEAR

01/01/2020 – 31/12/2020 01/01/2019 – 31/12/2019
SEKm Basic salary,
directors' fee
Benefits Pension
expense
Total Basic salary,
directors' fee
Benefits Pension
expense
Total
Christina Rogestam, Chairman of the Board 0.2 0.2 0.2 0.2
Fredrik Svensson, Board member 0.1 0.1 0.1 0.1
Sten Dunér, Board member 0.1 0.1 0.1 0.1
Anders Wennergren, Board member 0.1 0.1 0.1 0.1
Chief Executive Officer 0.9 0.3 1.2 0.9 0.3 1.2
Deputy CEO 0.7 0.7 0.7 0.7
Management team (4 persons) 6.2 0.3 0.8 7.3 6.7 0.4 1.4 8.5
Total 8.3 0.3 1.1 9.7 8.8 0.4 1.7 10.9

No variable remuneration is paid to any of the company's senior executives.

A defined benefit pension plan agreement has been entered into with the CEO which means that an amount of SEK 0.3 million (0.3) will be paid annually to the CEO from the age 55 until he reaches the age of 65. Future payments will be limited according to agreement by the fund's assets. The payments are not dependent on future employment. The current value of the commitment totalled SEK 3.4 million (3.4). The commitment has been secured by a provision to a pension fund, whose plan assets totalled SEK 3.4 million (3.4). The value of the pension commitment has been calculated in accordance with the Swedish Pension Obligations Vesting Act, which does not correspond with IAS 19. The difference in cost according to the two methods of calculation is not, however, significant.

Remuneration to senior executives follows the guidelines adopted at the latest Annual General Meeting. The remuneration must be at competitive market rates.

Remuneration is paid in the form of a fixed salary. Pension terms must be at competitive market rates and based on defined contribution pension solutions. Other benefits relate to car benefits. Redundancy pay and severance payment shall not exceed 18 months' salary in total. The CEO's salary and benefits are determined by the Board. Salaries and benefits of other senior executives are determined by the CEO. In the event of termination of the CEO's employment, a mutual period of notice of six months applies. In the event of termination by the company, a severance payment of 12 months' salary is paid (not qualifying for pension or holiday pay). A mutual period of notice of six months applies for other members of the management team. There is no severance payment.

The Board has the right to depart from the guidelines adopted by the Annual General Meeting for remuneration to senior executives, if special grounds exist.

NOTE 5 Remuneration to auditors

The audit assignment refers to the review of the financial statements and accounting records as well as the administration of the Board of Directors and CEO. This item also includes other duties that the company's auditors are obliged to perform as well as advice or other assistance that is occasioned by review or implementation of such other duties. Everything else is consultancy. Audit expenses are included in Group-wide expenses, which are levied on the subsidiaries.

Group Parent Company
SEKm 2020 2019 2020 2019
PwC
Audit assignment 5.4 5.0 3.1 3.1
–of which to ÖhrlingsPrice
waterhouseCoopers AB
3.1 3.2 3.1 3.1
Auditing work apart from the
audit assignment
0.6 1.2 0.6 1.2
–of which to ÖhrlingsPrice
waterhouseCoopers AB
0.6 1.2 0.6 1.2
Tax advice 0.4 0.9 0.4 0.9
–of which to ÖhrlingsPrice
waterhouseCoopers AB
0.4 0.9 0.4 0.9
Deloitte
Audit assignment 2.5 2.1
Tax advice 0.1 0.1
Other services 0.9 0.9
Total 9.9 10.1 4.2 5.2

NOTE 6 Operating costs distributed according to function and type of cost

ACCOUNTING POLICY

Property costs

The Group's property costs comprise costs that arise in connection with property management such as media (electricity, district heating, air conditioning, gas, water), property maintenance, cleaning, repairs, maintenance, property tax and other operating costs. These property costs are recognised in the period to which they relate.

Management costs and administrative expenses

Management costs and administrative expenses comprise the Group's administrative expenses such as HR, office, property, IT, consultancy and marketing expenses as well as the depreciation of equipment. These costs are recognised in the period to which they relate.

Group, SEKm 2020 2019
Property costs 1,919 1,966
Management costs and administrative expenses 676 664
Total 2,594 2,629
Group, SEKm 2020 2019
Staff costs 529 500
Depreciation 41 40
Media expenses 655 665
Property tax 342 338
Maintenance and other costs1) 1,028 1,086
Total 2,594 2,629

1) Refers to operating costs and administration excluding staff costs.

NOTE 7 Specification of property costs

Group, SEKm 2020 2019
Operating and maintenance costs1) 922 963
Media expenses2) 655 665
Property tax 342 338
Total 1,919 1,966

1) Operating costs include staff costs relating to property maintenance. 2) Includes depreciation of wind farms.

NOTE 8 Leases

ACCOUNTING POLICIES – Leases where the Group is the lessor

Leases in which a significant element of the risks and benefits of ownership are retained by the lessor are classified as operational leases. Lease payments received during the lease term are recognised in the statement of comprehensive income on a straight-line basis over the lease term.

Leases in which the financial risks and benefits associated with ownership are essentially assigned from the lessor to the lessee are classified as finance leasing. A finance lease is recognised in the balance sheet at the beginning of the lease term at the lower of the lease object's fair value and the current value of the minimum lease charges.

At present the Group only has leases that are classified as operating leases.

The Group lets out its investment properties under operating leases. The future non-retractable lease payments are as set out in the table below.

Commercial leases are usually entered into for 3–5 years with a period of notice of 9 months. Residential leases usually have a period of notice of 3 months.

The average lease term in the portfolio's commercial leases totalled 6.7 years (7.1).

Group, SEKm 2020 2019
Residential, parking lots, car park, etc.
(within one year)
4,967 4,822
Commercial premises
Within one year 3,247 3,178
1–5 years 10,727 10,739
>5 years 11,941 13,126
Total 30,881 31,866

ACCOUNTING POLICIES – Leases where the Group is the lessee

Accounting policies for the Group

The Group's leases consist essentially of site leasehold agreements and leases. There are also a number of leases relating to the renting of offices within the Group. In addition to these leases, there are smaller leases in the form of leases for cars and office equipment, etc. These leases have been defined by the Group as agreements in which the underlying asset is of low value. For these agreements, the practical exemption in IFRS 16 has been applied, which means that the lease charge is recognised as an expense on a straight-line basis over the lease term in the income statement and no right of use asset or lease liability is thus recognised in the balance sheet. There are no leases shorter than 12 months (short-term leases) in the Group.

A right of use asset and a lease liability are recognised in the balance sheet attributable to all leases that have not been defined as agreements in which the underlying asset is of low value.

Site leasehold rights and leases

Site leasehold rights and leases are treated as perpetual leases and a recognised at fair value. A right of use asset will thus not be depreciated, but its value will remain until renegotiation of each ground rent takes place. Right of use assets attributable to site leasehold agreements do by definition form part of the value of the investment properties, but the Group has chosen to recognise these in a separate line item in the balance sheet in the item "Leases: right of use". A non-current liability is recognised in the balance sheet in the item "Lease liability" corresponding to the value of the right of use asset. The lease liability is not amortised, but the value remains unchanged until renegotiation of each ground rent takes place. Leases are recognised as rights of use or a lease liability on the date on which the leased asset became available for use by the Group, which normally takes place on the date of taking possession. The cost of ground rents is recognised in full in the income statement as a financial expense, as these are considered to constitute interest according to IFRS 16.

Rent of office premises

For all leases, a right of use asset and a corresponding lease liability are recognised on the date on which the leased asset is available for use by the Group. The lease liability includes the current value of lease payments in the form of fixed charges. When valuing the liability, options to extend are included if it is very likely that these will be exercised.

Each lease payment is divided between amortisation of the liability and financial expense. The financial expense must be divided over the lease term so that each accounting period is charged with an amount corresponding to a fixed interest rate for the debt recognised during each period.

Right of use assets are initially recognised at the cost of acquisition and include the following:

  • Initial value of lease liability
  • Lease charges paid at or before the start of the lease term
  • Initial direct expenses
  • Expenses for restoring the asset to the condition prescribed in the terms of the lease

Right of use assets are depreciated on a straight-line basis over the shorter of the asset's useful life and the lease term. Leases run for periods of 2–10 years, but there are options to extend or terminate.

Reporting in subsequent periods

The lease liability is revalued if there are any changes to the lease or if there are changes in cash flow that are based on the original terms of the lease. Changes in cash flow based on original terms of the lease arise when: the Group changes its initial assessment of whether options to extend and/or terminate will be exercised, there are changes in previous assessments if an option to purchase will be exercised or lease charges changed because of changes in an index or interest rate. A revaluation of the lease liability results in a corresponding adjustment of the right of use asset. If the carrying amount of the right of use asset has already been reduced to zero, the remaining revaluation is recognised in the income statement. The right of use asset undergoes impairment testing whenever events or changes in conditions indicate that the carrying amount of an asset cannot be recovered.

Accounting policies for the parent company

The parent company essentially has leases in respect of cars. IFRS 16 is not applied in the parent company, but RFR 2 is applied instead (IFRS 16 Leases p. 2–12). In instances where the parent company is the lessee, this means that lease charges are recorded as an expense on a straight-line basis over the lease term. The cost of the lease is recognised in the item "Administrative expenses". The right of use and the lease liability are thus not recognised in the balance sheet.

Contd. Note 8 Leases

Leases; right of use 31/12/2020 31/12/2019
Ground rent/leases 1,465 1,460
Office premises 66 81
Total 1,532 1,541
Lease liability
Long-term lease liability 1,487 1,494
Current lease liability 49 49
Total 1,536 1,543

Site leasehold agreements

Use of right assets – site leasehold rights are by definition part of the value of the investment properties. The Group has chosen to recognise data linked to use of right assets and site leasehold rights separately from other data about the development properties in both the notes and the balance sheet. In the balance sheet, site leasehold rights are included in the item "Leases: right of use". For information about other development properties, see Note 12, Development properties. The change in the right of use asset attributable to site leasehold rights is set out in the table below:

Use of right assets – site leasehold rights 2020 2019
Beginning of the period (introduction of IFRS 16) 1,460 1,456
Acquisitions 25 22
Divestments –20
Change in ground rent and effect of changed
exchange rates
–1 –18
Fair value of site leasehold rights at end of period 1,465 1,460

Lease liabilities to site leasehold rights total SEK 1,469 million (1,461) and is recognised as a lease liability under the item non-current liabilities at SEK 1,432 million (1,425) and current liabilities at SEK 37 million (36).

Rent of premises

Use of right assets in respect of rent of premises total SEK 66 million (81). The change in use of right assets associated with office premises, including the effect of changed exchange rates, totalled SEK –15 million (3) during the year. Leases run for periods of 2–10 years, but there are options to extend

or terminate.

Information about all leases 2020 2019
The following amounts relating to leases
are recognised in the income statement:
Management costs and administrative expenses
Amortisation of rights of use (office premises) –12 –19
Total –12 –19
Financial expenses
Interest expenses, rent of premises –1 –1
Interest expenses – ground rent –63 –62
Total –64 –63

Total cash flow in respect of leases was SEK –89 million (–91), of which amortisation of lease liability totalled SEK –18 million (–26).

For information about the lease liability's maturity linked to rent of premises, see Note 22, Financial risk management.

The part of the lease liability attributable to site leasehold rights comprises contractual non-discounted cash flows of annual ground rents of SEK – 63 million (– 62), which are paid annually in perpetuity. The annual ground rent that will be paid in future will be affected by changes in the ground rent.

NOTE 9 Financial income and expenses

ACCOUNTING POLICY

Financial income and expenses consists of interest income on bank balances and receivables as well as interest expenses on liabilities.

Interest income from receivables and interest expenses from debts are calculated using the effective interest method. The effective interest is the interest that means that the current value of all future payments received and made during the fixed-rate interest term are equal to the reported value of the receivable or debt. Interest income and interest expenses include allocated amounts of transaction costs and possible discounts, premiums and other differences between the initial carrying amount of the receivable or liability and the amount that is settled at maturity. The interest component in financial lease payments is recognised in the consolidated statement of comprehensive income by application of the effective interest method.

Borrowing costs directly attributable to the construction or production of an asset that requires a significant time to complete for use or sale are included in the cost of the asset. Capitalisation of borrowing costs takes place provided that it is likely to lead to future economic benefits and that the costs may be measured in a reliable manner.

Interest income is primarily attributable to receivables from associated companies. Other financial income relates primarily to dividends and both realised and unrealised changes in value of listed shares.

FINANCIAL INCOME Group Parent Company
SEKm 2020 2019 2020 2019
Interest income 132 114 70 72
Interest income, subsidiaries 1,096 978
Other financial income1) 167 281 754 370
Exchange rate differences2) 785
Total 299 395 2,705 1,420

1) Other financial income in the parent company amounted to SEK 754 million, of which unrealised change in value of long-term financial asset amounted to SEK 462 million and refers to the unrealised revaluation of the shares in the Norwegian listed real estate company Entra ASA, see also Note 32, Other income/expenses.

Other financial expenses are attributable to interest-bearing liabilities.

FINANCIAL EXPENSES Group Parent Company
SEKm 2020 2019 2020 2019
Interest expenses, borrowings 1,342 1,327 697 595
Interest expenses,
interest rate derivatives
105 139 105 139
Interest expenses, subsidiaries 218 178
Leases/ground rent 64 63
Other financial expenses 36 86 62
Exchange rate differences2) 251
Total 1,511 1,565 1,106 1,226

2) Reported exchange rate differences mainly relate to the translation of Eurobonds, which from a group perspective is used to hedge net investments abroad.

NOTE 10 Income tax

ACCOUNTING POLICY

Group – Taxes

Income tax comprises current tax and deferred tax. Income tax is recognised in the income statement when an underlying transaction is recognised in other comprehensive income or directly in equity, in which case the associated tax effect is recognised in other comprehensive income or in equity. Current tax is tax that must be paid or received in respect of the current year, using the tax rates which are enacted or which in practice are enacted on the balance sheet date. This also includes adjustment of current tax attributable to previous periods.

Deferred taxes are estimated in accordance with the liability method, based on temporary differences between the tax bases of assets and liabilities and their carrying amounts. The following temporary differences are not considered: temporary differences arising on the initial recognition of goodwill, the initial recognition of assets and liabilities that are not business combinations and which on the transaction date did not affect the recognised or taxable result. Furthermore, temporary differences are not taken into consideration that are attributable to investments in subsidiaries and which are not expected to be reversed within the foreseeable future. The measurement of deferred tax is based on how the carrying amounts of assets or liabilities are expected to be realised or settled. Deferred tax is measured using the tax rates and tax regulations which are enacted or are in practice enacted on the balance sheet date. Deferred tax assets and liabilities are recognised net if they concern the same tax authority (country).

Deferred tax assets relating to deductible temporary differences and loss carryforwards are only recognised to the extent that it is probable that they can be utilised. The value of deferred tax assets is reduced when it is no longer considered probable that they can be utilised.

When a company is acquired, the acquisition constitutes either the acquisition of an entity or the acquisition of an asset. An acquisition of an asset is identified if the acquired company only owns one or more properties. There are leases for these properties, but no members of staff are employed in the company who can conduct business. When recognising an asset acquisition, no deferred tax is recognised. All of Balder's completed acquisitions during the year were classified as asset acquisitions and therefore no deferred tax is recognised relating to properties in respect of these acquisitions.

Parent company – Taxes

In the parent company, untaxed reserves are recognised including deferred tax liability. In the consolidated financial statements however, untaxed reserves are allocated between tax liability and equity.

Contd. Note 10 Income tax

Deferred tax

Balder has loss carryforwards at its disposal, which it is estimated can be utilised against future profits, under current tax rules. However, Balder cannot provide any guarantees that current or new tax rules will not restrict the possibilities of utilising the loss carryforwards. When measuring loss carryforwards, a judgement is performed of the probability that the loss can be utilised in future and at which time. Confirmed losses that can, with a high degree of certainty, be utilised against future profits form the basis of calculating the deferred tax asset. For an asset acquisition, no deferred tax attributable to the acquisition is recognised.

RECOGNISED IN THE INCOME STATEMENT

Group Parent Company
SEKm 2020 2019 2020 2019
Current tax expense (–)/tax revenue(+)
Current tax –388 –259 –9 –5
Deferred tax expense (–)/tax revenue (+)
Deferred tax related to temporary differences in properties –1,120 –2,325
Deferred tax related to temporary differences in derivates 26 50 17 –10
Deferred tax on changes in loss carryforwards –126 –138 –2
Change in other temporary differences –235 –25
Remeasurement of deferred tax due to new tax rate 37 37 0
Total deferred tax –1,419 –2,400 17 –11
Total recognised tax –1,807 –2,659 7 –16

RECONCILIATION OF EFFECTIVE TAX

Group, SEKm 2020, % 2020 2019, % 2019
Profit before tax 9,083 14,185
Tax according to applicable tax rate for the parent company 21.4 –1,944 21.4 –3,036
Difference between profit for tax purposes and the recognised profit on sale of property –0.3 30 – 0.1 15
Tax on participations in profits from associated companies/joint ventures –2.1 192 –1.3 180
Tax attributable to previous years 0.3 –30 0.0 –5
Differences in foreign tax rates –0.3 25 – 0.7 98
Non-taxable income/non-deductible expenses, etc. 1.3 –117 –0.4 53
Remeasurement of deferred tax due to new tax rate –0.4 37 –0.3 37
Reported effective tax 19.9 –1,807 18.7 –2,659
Parent Company, SEKm 2020, % 2020 2019, % 2019
Profit before tax 1,608 1,042
Tax according to applicable tax rate for the parent company 21.4 –344 21.4 –223
Non-taxable income/non-deductible expenses, etc. –9.1 147 –3.4 35
Tax-exempt dividend –13.0 209 –16.5 172
Tax attributable to previous years 0.3 –4 0.1 –1
Remeasurement of deferred tax due to new tax rate 0.0 –1 –0.0 0
Reported effective tax –0.5 7 1.6 –16

The Swedish Parliament has decided that corporation tax shall be reduced in two stages. The first reduction took place in 2019 to 21.4% and the second reduction will take place in 2021 to 20.6%. Deferred taxes are remeasured based on the tax rate that applies at the time when the deferred tax is expected to be settled.

Contd. Note 10 Income tax

Recognised in the balance sheet

DEFERRED TAX ASSETS AND TAX LIABILITIES

Group 2020, SEKm Deferred
tax assets
Deferred
tax liabilities
Net
Deferred tax assets and tax liabilities
relate to the following:
Properties –12,497 –12,497
Derivatives 226 226
Loss carryforwards 93 93
Other temporary differences –319 –319
Set-off –319 319
Total –12,497 –12,497

No non-capitalised assessed loss carryforwards exist. The measured deficit totals SEK 451 million (1,140).

Parent Company 2020, SEKm Deferred
tax assets
Deferred
tax liabilities
Net
Deferred tax assets and tax liabilities
relate to the following:
Derivatives 158 158
Other temporary differences –67 –67
Set-off –67 67
Total 91 91

No loss carryforwards exist.

CHANGE IN DEFERRED TAX IN TEMPORARY DIFFERENCES AND LOSS CARRYFORWARDS

Group, SEKm Balance as of
01/01/2020
Recognised in the
income statement
Acquisitions and
divestments of
companies
Balance as of
31/12/2020
Properties –11,609 –1,095 208 –12,497
Derivatives 199 24 2 226
Capitalisation of the value of loss carryforwards 235 –121 –20 93
Other temporary differences –110 –227 17 –319
Total –11,285 –1,419 207 –12,497
Group, SEKm Balance as of
01/01/2019
Recognised in the
income statement
Acquisitions and
divestments of
companies
Balance as of
31/12/2019
Properties –9,295 –2,292 –22 –11,609
Derivatives 149 48 2 199
Capitalisation of the value of loss carryforwards 359 –133 8 235
Other temporary differences –70 –24 –16 –110
Total –8,857 –2,400 –28 –11,285
Parent Company, SEKm Balance as of
01/01/2020
Recognised in the
income statement
Balance as of
31/12/2020
Derivatives 129 29 158
Other temporary differences –54 –12 –67
Total 74 17 91
Parent Company, SEKm Balance as of
01/01/2019
Recognised in the
income statement
Balance as of
31/12/2019
Derivatives 92 37 129
Capitalisation of the value of loss carryforwards 2 –2
Other temporary differences –8 –46 –54
Total 85 –11 74

NOTE 11 Earnings per share

ACCOUNTING POLICY

Earnings per share before dilution are calculated by dividing the profit for the year attributable to the parent company's shareholders by the parent company's weighted average number of outstanding shares for the financial year. Earnings per share after dilution are calculated by dividing the profit for the year attributable to the parent company's shareholders by the weighted average number of outstanding shares after dilution.

EARNINGS PER SHARE WERE COMPUTED IN THE FOLLOWING WAY:

Parent Company, SEKm 2020 2019
Net profit for the year attributable to
the parent company's shareholders 6,641 8,958
Total 6,641 8,958
Weighted average number of shares
Total number of shares on 1 January 180,000,000 180,000,000
Weighted average number of shares
before dilution
180,000,000 180,000,000
Effect of newly issued shares 515,027
Weighted average number of shares
after dilution
180,515,027 180,000,000
Earnings per share before dilution, SEK 36.90 49.77
Earnings per share after dilution, SEK 36.79 49.77

NOTE 12 Investment properties

ACCOUNTING POLICY

Investment properties

Investment properties are properties that are held with the aim of receiving rental income or appreciation in value or a combination of both. Investment properties are initially recognised at cost, which includes expenses and borrowing costs directly related to the acquisition. Investment properties are recognised according to the fair value method. The fair value is based on internal valuations which are reconciled as required with external independent valuation institutes. Fair value is based on the market value, which is the estimated amount that would be received in a transaction on the valuation date between knowledgeable parties that are independent of one another and that have an interest in completing the transaction after customary marketing, where both parties are assumed to have acted discerningly, wisely and without compulsion. Both unrealised and realised changes in value are recognised in the income statement. Valuations are performed at the end of each quarter.

Revenue from the sale of properties is recognised when the control of the property has been transferred to the buyer. However, an enforceable right to payment does not arise until ownership has been transferred to the buyer. Revenue is therefore recognised at the time when ownership is transferred to the buyer. Ownership of the property (regardless of whether the property is sold separately or via a company transaction) is normally transferred on the date of taking possession. The revenue is valued at the contractual transaction price as the consideration usually falls due for payment when ownership has been transferred.

If the Group starts a conversion of an existing investment property for continued use as an investment property, the property will continue to be recognised as an investment property. The property is recognised according to the fair value method and is not reclassified as property, plant and equipment during the conversion period.

Additional expenditure is added to the carrying amount only if it is probable that the future economic benefits associated with the asset will accrue to the company and the cost can be measured in a reliable way. Other additional expenditure is recognised as a cost in the period in which it arises. The assessment of whether additional expenditure is added to the carrying amount depends on whether the expenditure concerns the replacement of identified components, or parts thereof, whereupon such expenditure is capitalised. Even in cases where new components are created, the expenditure is added to the carrying amount.

The part of financial costs that pertains to major new construction, extensions or conversions is capitalised. The capitalised interest rate is based on the weighted average borrowing cost for the Group.

Development properties, such as, for example, new construction of tenantowner's apartments with the intention of being sold are not included as part of the investment properties. For information on development properties, see Note 16, Development properties.

Investment properties

When valuing investment properties, estimates and judgements can have a significant impact on the Group's recognised profit and position. Internal valuations of investment properties require estimates and judgements of and assumptions about, for example, future cash flows and definitions of yield requirements for each individual property. Judgements made affect the carrying amount in the balance sheet for the item Investment properties and in the income statement for the item Changes in value of investment properties, unrealised. When a transaction is completed, Balder performs a reconciliation with judgements made. Balder also monitors relevant property transactions completed on an ongoing basis. Internal valuations of the whole property portfolio are conducted in connection with each quarterly report. In order to reflect the uncertainty that exists in assumptions, estimates and judgements performed, the values normally include what is known as a valuation range of +/– 5–10%. In order to ensure the quality of Balder's internal valuations, Balder continuously performs external valuations of parts of the portfolio and obtains second opinions1) on internal valuations. The external valuations were carried out during the year by CBRE, Cushman & Wakefield, JLL and Newsec. Second opinions were conducted by JLL during the year. The discrepancies between external and internal values have historically been insignificant.

Classification of acquisitions

For each acquisition, an assessment is made of whether the acquisition is to be classified as a business acquisition or an asset acquisition. An individual assessment is made of each individual transaction. From 1 January 2020, the amendment to IFRS 3 is applied, which means, among other things, that a voluntary concentration test can be applied to simplify the assessment of whether the transaction is not an activity/business. For all of this year's acquisitions, the assessment has meant that the transactions have been classified as asset acquisitions. See also Note 1, Accounting principles, under the heading Consolidation principles.

1) Review performed by external valuation company of used valuation method.

Group, SEKm 2020 2019
Opening fair value 141,392 116,542
Acquisitions 3,491 8,439
Investments in existing properties and projects 4,054 6,567
Changes in value, unrealised 3,429 9,562
Divestments –342 –1,036
Currency changes –2,845 789
Reclassification from/to development properties 528
Closing fair value 149,179 141,392

Contd. Note 12 Investment properties

Right of use assets attributable to site leasehold agreements and leases do by definition form part of the value of the investment properties. The Group has chosen to recognise these in a separate line item in the balance sheet and also to recognise these separately in disclosures. Disclosures about the change in value of site leasehold rights may be found in Note 8, Leases.

Valuation model

Investment properties are recognised at fair value in the consolidated statement of financial position and changes in value are recognised in the consolidated income statement. All investment properties are deemed to be at Level 3 in the fair value hierarchy according to IFRS 13 Fair Value Measurement. The fair value of the properties is based on internal valuations. Properties in Sweden, Denmark, Finland, Norway, Germany and the UK are valued using the yield method.

In Finland, in addition to the return method, valuation of acquisition cost is also used. The properties in Russia are valued using the sales comparison method.

The Group's building rights are valued at acquisition cost.

Properties under construction and project properties for own management are valued at market value reduced by estimated construction costs and project risk which usually coincides in a valuation at acquisition cost. Fair value is the estimated amount that would be obtained in a transaction at the time of value between knowledgeable parties who are independent of each other and who have an interest in the transaction being carried out after customary marketing, where both parties are presumed to have acted insightfully, wisely and without coercion.

As of the balance sheet date, Balder has carried out an internal valuation of the entire property portfolio.

The yield method

When valuing using the yield method, each property is valued by computing the present value of future cash flows, i.e. future rental payments minus estimated operating and maintenance payments as well as the residual value in ten years. Estimated rent payments as well as operating and maintenance payments have been derived from current rental income as well as operating and maintenance costs. The cash flow is adapted to the market by taking account of any changes in the occupancy rate and letting levels, as well as operating and maintenance payments. An inflation rate of 2% has been assumed in all cash flow calculations. Properties equivalent to about 98% of the total market value were valued by the yield method.

The acquisition cost method

The acquisition cost method is applied for properties subject to rent control in Finland. Properties equivalent to about 1% of the total market value were valued at cost. Initially, these properties are valued at cost of acquisition plus transaction costs and subsequently at cost of acquisition minus any impairment losses.

The sales comparison method

When valuing with the sales comparison method, quoted prices on the market are used for comparable objects. The sales comparison method is used for the properties in Russia. Properties corresponding to about 1% of the total market value are valued using the sales comparison method.

Internal and external valuations

Market value assessments of properties always involve a certain degree of uncertainty in assumptions and estimates. The uncertainty in respect of individual properties is normally considered to be in the range of +/– 5–10% and should be regarded as the uncertainty, which is part of the assumptions and estimates made. The range can be greater in a less liquid market. For Balder, a range of uncertainty of +/– 5% means a value range of SEK +/– 7,459 million, equivalent to a range of SEK 141,720–156,638 million.

To ensure the quality of Balder's internal valuations, Balder performs external valuations on an ongoing basis on parts of the portfolio and obtains second opinions on internal valuations.

During the year, external valuations were obtained for approximately 21% (23) of the investment properties excluding projects for own management, corresponding to SEK 31 billion (31) and second opinions were obtained for 31% (32) of the investment properties excluding projects for own management, corresponding to SEK 45 billion (44). The difference between the external ones valuations and internal valuations were less than 1%. The discrepancies between external and internal values have historically been insignificant. For more information on Balder's valuation methods, see pages 31–32.

Changes in value

Balder performed an individual internal valuation on the entire property portfolio as of 31 December. Unrealised changes in value during the year totalled SEK 3,429 million (9,562) of which 70% is attributable to residential properties. Of the total unrealised the change in value is 40% related to completed projects. Realised changes in value amounted to SEK 24 million (14).

Rent payments

The rental trend is estimated to follow inflation taking account of prevailing index clauses in leases during their terms. When leases expire, an assessment is made of whether the lease is deemed to be extended at the prevailing market rent level and whether there is a risk of the premises becoming vacant. Vacancies are considered on the basis of the current vacancy situation with a gradual adjustment to expected market-related vacancy rates taking account of the property's individual conditions.

Operating and maintenance payments

Outcomes, budgetary and projection data as well as estimated standardised costs have been used in the assessment of the property's future property costs.

Yield

Yield requirements and cost of capital used in calculations have been derived from comparable transactions in the property market. Important factors in choosing a yield requirement are location, rental rate, vacancy rate and the condition of the property. The yield requirement is shown in the table below.

The average yield as of the closing date was 4.5% (4.5).

As of 31 December 2020, according to Balder's valuation, the total property value was SEK 149,179 million (141,392). For more information, see the Report of the Board of Directors and the Sensitivity Analysis on page 39.

Projects for own management

Balder had projects for own management totalling SEK 4.6 billion (5.3) as of 31 December. Projects for own management that are under construction has an estimated total investment of SEK 6.9 billion (7.2), of which SEK 3.8 billion (4.7) is invested and SEK 3.1 billion (2.5) remains to be invested. Most of the ongoing projects refers to housing projects with owner apartments for rental use. The projects include about 2,300 apartments (2,200) and mainly refers to about 1,100 apartments in Copenhagen and about 600 apartments in Helsinki.

Other investment commitments

Balder has signed an agreement to, with access in January 2021, acquire the real estate group Masmästaren. As of the financial statements, there is an investment commitment of SEK 2,698 million.

SENSITIVITY ANALYSIS, EXCLUDING PROJECT PROPERTIES

Effect on value, SEKm Change Change in value,
SEKm
Yield requirements +/– 0.25 %-points – 7,639/+ 8,541
Rental income +/– 5 % + 9,077/– 9,077
Property costs +/– 5 % – 1,841/+ 1,841
Impact on value, SEKm Residential
properties
Commercial
properties
+/– 5 % change in value +/– 4,151 +/– 3,077
Region Mean value of yield requirement for
estimation of residual value, %
Helsinki 4.84
Stockholm 4.16
Gothenburg 4.48
Copenhagen 3.66
South 4.79
East 4.89
North 4.36
Property category Mean value of yield requirement for
estimation of residual value, %
Residential properties 4.3
Commercial properties 4.7

The yield requirement is the single most important parameter during valuation. Generally speaking, residential has a lower yield requirement, mainly due to a secure cash flow and low risk.

NOTE 13 Other property, plant and equipment

ACCOUNTING POLICY Property, plant and equipment

Owned assets

Property, plant and equipment are recognised as an asset in the consolidated statement of financial position if it is probable that future economic benefits will accrue to the company and the cost of the asset can be reliably measured.

Property, plant and equipment are recognised in the Group at cost minus accumulated depreciation and any impairment losses. The purchase price is included in the cost as well as expenses directly attributable to the asset in order to bring it to the location and in the condition to be used in accordance with the aim of the acquisition.

The carrying amount of an item of property, plant and equipment is derecognised on retirement, disposal or when no future economic benefits can be expected from use of the asset. Gains or losses arising from disposal or retirement of an asset consist of the difference between the selling price and the asset's carrying amount minus directly related selling expenses. Gains and losses are recognised as other operating income/expenses.

Additional expenditure

Additional expenditure is added to cost only if it is probable that the future economic benefits associated with the asset will accrue to the company and the cost can be measured in a reliable way. Other additional expenditure is recognised as a cost in the period in which it arises. The assessment of whether additional expenditure is added to cost depends on whether the expenditure concerns the replacement of identified components, or parts thereof, whereupon such expenditure is capitalised. Even in cases where new components are created, the expenditure is added to the cost. Repairs are recognised as expenses on an ongoing basis.

Deprecation methods

Assets are depreciated on a straight-line basis over their estimated useful lives.

3–10 years
10 –20 years

There is an annual review of an asset's residual value and useful life.

Group Parent Company
SEKm 2020 2019 2020 2019
Cost
Opening balance 257 200 31 28
Purchases 24 66 5 9
Disposals and retirements –4 –9 –2 – 6
Closing balance 277 257 34 31
Depreciation

EQUIPMENT

Closing balance –121 –98 –12 –8
Depreciation –27 –21 – 6 –4
Disposals and retirements 4 8 2 6
Opening balance –98 –85 –8 –11
Depreciation

Carrying amount equipment 155 159 22 23

WIND FARMS
Group Parent Company
SEKm 2020 2019 2020 2019
Cost
Opening balance 164 164 30 30
Closing balance 164 164 30 30
Depreciation and impairments
Opening balance –158 –156 –30 –30
Depreciation –2 –2
Closing balance –160 –158 –30 –30
Carrying amount windfarms 5 7
Total carrying amount
equipment and windfarms
160 166 22 23

Depreciation is recognised in administrative expenses and media expenses.

NOTE 14 Participations in associated companies/joint ventures

GROUP HOLDINGS OF PARTICIPATIONS IN ASSOCIATED COMPANIES/JOINT VENTURES 2020

ACCOUNTING POLICY

Group

Associated companies

Associated companies are companies over which Balder has significant influence. Significant influence means the opportunity to participate in decisions relating to the company's financial and operational strategies, but does not imply control or joint control. Normally, ownership equivalent to at least 20% and up to 50% of the votes means that a significant influence is held. Circumstances in the individual case can result in a significant influence even with ownership of less than 20% of the votes.

Joint ventures

A joint venture is a joint arrangement whereby the parties that exercise joint control over the arrangement are entitled to the net assets from the arrangement. Joint control exists when the joint exercise of control over an operation is regulated through an agreement. It only exists when the parties that share control must give their consent in connection with decisions regarding the operation.

Associated companies and joint ventures are recognised in the Group according to the equity method. The equity method means that participations in an associated company are recognised at cost at the date of acquisition and are subsequently adjusted by the Group's participation in the change in the associated company's net assets. Dividends received from associated companies are deducted from the carrying amount. Profit participations in associated companies are recognised on separate lines in the consolidated statement of comprehensive income and in the consolidated statement of financial position. Participations in the profits of associated companies are recognised after tax. The equity method is applied until the date when the significant influence ceases.

Parent Company

Participations in associated companies are recognised in the parent company in accordance with the cost method. Received dividends are only recognised as income provided that they pertain to profits earned subsequent to the acquisition. Dividends which exceed this earned profit are treated as a repayment of the investment and reduce the carrying amount of the participation.

Company Corporate
ID number
Reg. office Number
of shares
Share, % Type of holding Value of share
of equity in the
Group, SEKm
amount in
Parent
Company,
SEKm
Collector AB 556560-0797 Gothenburg 90,501,180 44 Associated company 2,326 1,196
Tulia AB 556712-9811 Gothenburg 50,000 50 Joint venture 1,001
Fastighets AB Centur 556813-6369 Stockholm 5,000 50 Joint venture 863 4
Fixfabriken Holding AB 556949-3702 Gothenburg 50,000 50 Joint venture 1
Chirp AB 556915-7331 Stockholm 17,000 34 Associated company 6
Tornet Bostadsproduktion AB 556796-2682 Stockholm 1,666,667 33 Joint venture 644
Brinova Fastigheter AB 556840-3918 Helsingborg 18,420,302 22 Associated company 420
Fastighets AB Tornet 559008-2912 Gothenburg 500 50 Joint venture 164
Trenum AB 556978-8291 Gothenburg 500 50 Joint venture 1,288 400
Norra Backaplan Bostads AB 556743-0276 Gothenburg 33,333 33 Joint venture 170
Sjaelsö Management ApS 35394923 Copenhagen 392 49 Associated company 65
SHH Bostad AB 559007-1824 Stockholm 808,088 20 Associated company 99 100
SB Bostad i Stockholm AB 559094-8914 Stockholm 250 50 Joint venture 2
Serena Properties AB1) 559023-2707 Stockholm 2,799,998 56 Joint venture 578 309
Rosengård Fastighets AB 559085-4708 Malmö 25,000 25 Joint venture 195
Sinoma Fastighets AB 559161-0836 Stockholm 245 49 Associated company 649 434
Grunnsteinen AS 919 424 427 Asker 1,000 50 Joint venture 0
Zenit AS 918 773 924 Asker 180,000 50 Joint venture 98
Bostadsutveckling Kungens Kurva AB 559056-7888 Solna 250 50 Joint venture 2
Homestate AB 559179-2253 Jönköping 167 33 Joint venture 0 0
Heimdal Sentrum Utvikling AS 822 336 752 Trondheim 15,000 50 Joint venture 0
Steinan Holding AS 822 404 502 Oslo 30,000 50 Joint venture 85
Boo AS 921 580 614 Oslo 850,000 33 Associated company 1
Ängsladan Fastighetsförvaltning i Lund AB 559148-5783 Vetlanda 25,000 50 Joint venture 21
White Peak IV Limited 126219 Jersey 21 20 Associated company 163
iBoxen Infrastruktur Sverige AB 559254-3705 Stockholm 350 35 Associated company 3 3
AMW Gruppen i Götaland AB 559218-0433 Växjö 270 50 Joint venture 20
Anthon B Nilsen Eiendom AS 885857582 Oslo 4,377 50 Joint venture 614
Karlatornet AB 559185-8526 Gothenburg 250 50 Joint venture 0
Entra ASA2) 999 296 432 Oslo 32,261,713 18 Associated company 5,981 5,981
MAJLLBPN AB 559272-6318 Stockholm 125 50 Joint venture 0
MILLENNIUM HoldCo ApS 38252283 Nordhavn 50,000 50 Joint venture 137
HE Prosjektinvest AS 918 984 186 Trondheim 500,000 50 Joint venture 0
Total 15,593 8,426

Carrying

1) Balder owns 56% of Serena Properties AB. Balder exercises joint control through an agreement, and the company is thus recognised according to the equity method in the Group. 2) Balders share has increade to over 25% during January 2021. For further information see Note 32 Other income/expenses.

Carrying

Contd. Note 14 Participations in associated companies/joint ventures

ACCUMULATED COST

Group Parent Company
SEKm 2020 2019 2020 2019
Opening balance 7,018 6,219 1,972 1,880
Acquisition of associated companies/joint ventures1) 6,954 4 5,981 0
Divestment of associated companies/joint ventures –15 –73 –15
Associated companies/joint ventures that were reclassified as subsidiaries2) –471
Dividend from associated companies/joint ventures –20 –41
Participations in the profits of associated companies/joint ventures after tax 897 876
Change in equity of associated companies/joint ventures (shareholders' contribution) 743 446 546 106
Closing balance 15,593 7,018 8,426 1,972

1) Acquisitions of associated companies during the year referred primarily to participations in Entra ASA och Anthon B Nilsen Eiendom AS. 2) This item during 2019 referred to Första Långgatan Fastigheter i GBG HB and Balder Skåne AB.

GROUP HOLDINGS OF PARTICIPATIONS IN ASSOCIATED COMPANIES/JOINT VENTURES 2019

Company Corporate
ID number
Reg. office Number
of shares
Share, % Type of holding Value of share
of equity in the
Group, SEKm
amount in
Parent
Company,
SEKm
Collector AB 556560-0797 Gothenburg 45,250,590 44 Associated company 1,752 744
Tulia AB 556712-9811 Gothenburg 50,000 50 Joint venture 901
Fastighets AB Centur 556813-6369 Stockholm 5,000 50 Joint venture 775 4
Fixfabriken Holding AB 556949-3702 Gothenburg 50,000 50 Joint venture 3
Chirp AB 556915-7331 Stockholm 17,000 34 Associated company 6
Tornet Bostadsproduktion AB 556796-2682 Stockholm 1,666,667 33 Joint venture 500
Brinova Fastigheter AB 556840-3918 Helsingborg 18,420,302 25 Associated company 384
Fastighets AB Tornet 559008-2912 Gothenburg 500 50 Joint venture 162
Trenum AB 556978-8291 Gothenburg 500 50 Joint venture 1,022 350
Norra Backaplan Bostads AB 556743-0276 Gothenburg 33,333 33 Joint venture 170
Sjaelsö Management ApS 35394923 Copenhagen 392 49 Associated company 63
SHH Bostad AB 559007-1824 Stockholm 808,088 20 Associated company 95 100
SB Bostad i Stockholm AB 559094-8914 Stockholm 250 50 Joint venture 1
Serena Properties AB 559023-2707 Stockholm 2,799,998 56 Joint venture 437 268
Rosengård Fastighets AB 559085-4708 Malmö 25,000 25 Joint venture 158 73
Sinoma Fastighets AB 559161-0836 Stockholm 245 49 Associated company 582 434
Grunnsteinen AS 919 424 427 Asker 1,000 50 Joint venture 0
Zenit AS 918 773 924 Asker 180,000 50 Joint venture 2
Bostadsutveckling Kungens Kurva AB 559056-7888 Solna 250 50 Joint venture 3
Homestate AB 559179-2253 Jönköping 167 33 Joint venture 0
Heimdal Sentrum Utvikling AS 822 336 752 Trondheim 15,000 50 Joint venture 0
Steinan Holding AS 822 404 502 Oslo 30,000 50 Joint venture 1
Boo AS 921 580 614 Oslo 850,000 33 Associated company 1
Total 7,018 1,972

ASSOCIATED COMPANIES/JOINT VENTURES STATEMENT OF COMPREHENSIVE INCOME

Total (100%) Balder's holding
SEKm 2020 2019 2020 2019
Rental income 4,423 1,864 892 816
Property costs –682 –442 –178 –173
Net operating income 3,741 1,422 714 643
Management costs and
administrative expenses
–358 –145 –66 –64
Participations in the profits of
associated companies
139
Other operating income1) 496 860 213 385
Operating profit 4,018 2,137 862 964
Net interest –991 –385 –197 –175
Changes in value 7,362 679 489 297
Profit before tax 10,389 2,431 1,153 1,087
Of which non-controlling
interests
–234 –4 –1 –2
Tax –2,256 –488 –254 –209
Net profit for the year
– of which Profit from
7,899 1,940 897 876
property management 2,612 1,749 663 787

1) Mostly relates to Collector AB. Of which the profit from property management from Collector totals SEK 174 million (341).

ASSOCIATED COMPANIES/JOINT VENTURES STATEMENT OF FINANCIAL POSITION

Total (100%) Balder's holding
SEKm 2020 2019 2020 2019
Investment properties 96,143 33,745 28,073 14,898
Other assets 8,661 4,796 3,218 2,118
Equity/shareholders´loans 51,721 18,299 15,613 8,236
Liabilities 53,083 20,242 15,677 8,780

Entra ASA and Anthon B Nilsen Eiendom AS are included as associated companies as of 31 December 2020. The companies were acquired at the end of December and has therefore not affected the year's profit regarding Balder's ownership share of the income statement above.

NOTE 15 Other non-current receivables

ACCOUNTING POLICY

Other non-current receivables are recognised in accordance with the principles described in Note 22 in respect of financial assets measured at accrued cost.

Group Parent Company
SEKm 2020 2019 2020 2019
Receivables from the Group's
associated companies
2,077 1,392 1,817 1,189
Other non-current receivables 224 56 1 1
Total 2,302 1,448 1,817 1,190
Group Parent Company
SEKm 2020 2019 2020 2019
Opening balance 1,448 1,293 1,190 904
Changes in loans to associa
ted companies/joint ventures
686 333 627 286
Changes in other non-current
receivables
168 –178
Closing balance 2,302 1,448 1,817 1,190

The Group has receivables from associated companies/joint ventures on which interest is calculated on market conditions. See also Note 30, Related parties.

NOTE 16 Development properties

ACCOUNTING POLICY

A development property is a property that is held for processing with the intention of being sold, either in its entirety or per apartment, upon completion. Development properties consist partly of land where construction has not begun and partly of projects where construction has begun. Ongoing construction essentially refers to new production of tenant-owner's apartments with the intention of being sold at completion. These properties are reported on an ongoing basis at acquisition value on the line "Development properties" among current assets in the balance sheet and are valued at the lower of acquisition value and net sales value.

Revenues from the sale of development properties refer to compensation from the sale of condominium projects, condominium shares and development properties. In connection with the sale of condominiums, compensation received as income and as an expense the apartment's assessed share of the production cost, or for externally acquired condominium shares, the apartment's book value is reported. Revenue from the sale of development properties is reported as compensation received and as a cost incurred production cost. Income and expenses are reported in the income statement in connection with the home/property being completed, sold and handed over to the buyer. Marketing and sales costs are reported on an ongoing basis in the income statement as they arise.

Investments and divestments are reported during investing activities in the Group's report on cash flows.

In addition to investment properties, Balder owns development properties to a value of SEK 2,803 million (2,344).

Development projects that are under construction have an estimated total investment of SEK 2.3 billion (2.3), of which SEK 1.2 billion (1.1) has been closed and SEK 1.1 billion (1.2) remains to be invested. All of the projects relate to housing projects that are sold to end customers. The projects comprise approximately 660 apartments (700) and mainly concern approximately 550 tenant-owner's apartments in Sweden.

During the year, a total of six projects were recognized in the income statement. The acquisition cost for all the divested projects for the year amounted to SEK –1,079 million (–292) and the results from the sales amounted to SEK 174 million (95), including marketing and sales costs of SEK –20 million.

Group
SEKm 2020 2019
Carrying amount at beginning of year 2,344 1,598
Reclassification to/from investment properties –528
Accrued project costs 1,518 1,566
Divestments –1,059 –292
Book value of development properties 2,803 2,344

NOTE 17 Trade receivables

ACCOUNTING POLICY

Trade receivables are recognised in accordance with the principles described in Note 22 in respect of financial assets measured at accrued cost.

Trade receivables are recognised and measured at the amount that is expected to be received minus the provision for credit losses. Earnings in 2020 were impacted by SEK –22 million (–12) in respect of actual and expected bad debt losses. Trade receivables are of a short-term nature, which means that they are recognised as current assets, corresponding to fair value.

Age distribution of trade receivables

Group, SEKm 2020 2019
–30 days 301 216
31– 60 days 33 20
61–90 days 8 4
91 days– 72 51
Total 414 291
Provision for credit losses –72 –51
Trade receivables, net 343 241

Provision for credit losses

Group, SEKm 2020 2019
Opening balance –51 –34
Reclassifications –8
Confirmed bad debts during the year 1 3
Change in credit loss provision during the year –22 –12
Closing balance –72 –51

NOTE 18 Prepaid expenses and accrued income

Group Parent Company
SEKm 2020 2019 2020 2019
Insurance policies 4 4
Interest income 5 2
Interest expenses 84 113 78 107
Rental income 17 11
Property costs 477 303
Other financial income 53 29 53 29
Other items 10 15 1 0
Total 650 478 133 137

NOTE 19 Financial investments

ACCOUNTING POLICY

Financial investments are recognised in accordance with the principles described in Note 22 in respect of financial assets measured at fair value via the income statement.

Group Parent Company
SEKm 2020 2019 2020 2019
Securities
Shares and bonds 2,659 1,523 2,078 1,051
Total 2,659 1,523 2,078 1,051

NOTE 20 Equity

Share capital

In November, Balder carried out a directed new issue of 6,500,000 Class B shares, which brought in SEK 2,930 million after issue costs. For existing shareholders, the issue had a dilution effect of 3.61% in relation to the number of shares and 2.31% in relation to the number of votes. After the issue and as of December 31, the share capital in Balder amounted to SEK 186,500,000 divided into 186,500,000 shares. Each share has a quotient value of SEK 1, of which 11,229,432 of Class A and 175,270,568 of Class B. The total number of outstanding shares as of December 31 amounted to 186,500,000. Each share of Class A entitles to one vote and each share of Class B entitles to one tenth of a vote. The holder of ordinary shares is entitled to a dividend that is determined gradually. The shareholding entitles the holder to vote at the AGM.

Other contributed capital

Other contributed capital refers to equity contributed by the owners. This includes share premiums paid in connection with new issues.

Translation differences

Refers to currency translation differences arising due to translation of foreign operations.

Reserves

This item refers to cash flow hedges after tax. Cash flow hedges mainly refer to interest rate hedges.

Retained earnings including net profit for the year

Retained earnings including net profit for the year includes profits earned in the parent company and its subsidiaries. This item also includes previous transfers to statutory reserves.

Non-controlling interests

The item refers to the minority's share of equity in non-wholly owned subsidiaries and mainly refers to SATO Oyj where Balder's ownership share amounts to 56.0% (54.7), and Asuntoyhtymä Group Oy where the ownership share amounts to 75.0% (75.0). For further information, see Note 21, Non-controlling interests.

Dividend

The Board proposes to the Annual General Meeting that no dividend (–) be declared for the financial year 2020.

Appropriation of profits

The Board has proposed that the profit at the disposal of the annual general meeting of SEK 16,611,553,712 shall be appropriated as follows; to be carried forward SEK 16,611,553,712.

Share capital development Change in Total number of Quota value Change in Total share
Day Month Year Event number of
shares
Total number
of shares
outstanding
shares
per share,
SEK
share capital,
SEK
capital,
SEK
27 June 2005 Start date 75,386,104 75,386,104 1.00 75,386,104
18 August 2005 Issue in kind 2,000,002 77,386,106 77,386,106 1.00 2,000,002 77,386,106
18 August 2005 Reduction of the share capital
by decreasing nominal amount
77,386,106 77,386,106 0.01 –76,612,245 773,861
18 August 2005 Issue in kind 1,287,731,380 1,365,117,486 1,365,117,486 0.01 12,877,314 13,651,175
18 August 2005 Set-off issue 18,846,514 1,383,964,000 1,383,964,000 0.01 188,465 13,839,640
18
27
August
January
2005 Consolidation of nominal
amount to SEK 1
2006 Issue in kind
–1,370,124,360
1,000,000
13,839,640
14,839,640
13,839,640
14,839,640
1.00
1.00

1,000,000
13,839,640
14,839,640
9 October 2006 Issue in kind 1,380,000 16,219,640 16,219,640 1.00 1,380,000 16,219,640
2008 Repurchase of own shares –476,600 16,219,640 15,743,040 1.00 16,219,640
28 August 2009 Issue in kind 9,171,502 25,391,142 24,914,542 1.00 9,171,502 25,391,142
4 June 2010 Bonus issue 76,173,426 101,564,568 99,658,168 1.00 101,564,568
1 February 2011 New share issue 6,700,000 108,264,568 106,358,168 1.00 6,700,000 108,264,568
20 May 2011 Bonus issue 54,132,284 162,396,852 159,537,252 1.00 162,396,852
16 June 2011 Directed new issue
of preference shares
4,000,000 166,396,852 163,537,252 1.00 4,000,000 166,396,852

Contd. Note 20 Equity

Change in
number of
Total number Total number of
outstanding
Quota value
per share,
Change in
share capital,
Total share
capital,
Day Month Year Event shares of shares shares SEK SEK SEK
31 January 2012 Set-off issue of preference share 1,000,000 167,396,852 164,537,252 1.00 1,000,000 167,396,852
11 October 2012 Set-off issue of preference share 1,000,000 168,396,852 165,537,252 1.00 1,000,000 168,396,852
24 May 2013 Directed new issue
of preference shares
500,000 168,896,852 166,037,252 1.00 500,000 168,896,852
22 October 2013 Directed new issue
of preference shares
3,500,000 172,396,852 169,537,252 1.00 3,500,000 172,396,852
19 March 2014 Disposal of repurchased shares 2,859,600 172,396,852 172,396,852 1.00 172,396,852
18 December 2015 Directed new issue
of ordinary shares
10,000,000 182,396,852 182,396,852 1.00 10,000,000 182,396,852
23 September 2016 Directed new issue
of ordinary shares
3,000,633 185,397,485 185,397,485 1.00 3,000,633 185,397,485
16 December 2016 Set-off issue 4,602,515 190,000,000 190,000,000 1.00 4,602,515 190,000,000
12 October 2017 Redemption of preference capital –10,000,000 180,000,000 180,000,000 1.00 –10,000,000 180,000,000
30 November 2020 Directed new issue of ordinary
shares
6,500,000 186,500,000 186,500,000 1,00 6,500,000 186,500,000
31 December 2020 186,500,000 186,500,000 186,500,000

NOTE 21 Non-controlling interests

Below is a summary of financial information for significant holdings without a controlling influence in the Group. The amounts reported are based on the amounts included in the consolidated financial statements. Only net assets in which non-controlling interests have a share are included.

SATO Oyj (corporate identity number 0201470 -5) is one of Finland's largest real estate companies focusing on housing. The company invests primarily in homes located in Greater Helsinki, Tampere and Turku. Non-controlling interests in SATO Corporation amount to 44.0% (45.3).

Asuntoyhtymä Group Oy (corporate identity number 2808794-5) is a growing real estate company focused on newly produced homes in the largest cities in Finland. The company attaches great importance to optimizing the size and efficiency of the apartments' floor plans. Non-controlling interests in Asuntoyhtymä Group Oy amount to 25.0% (25.0).

Both subsidiaries operate in Finland and are based in Helsinki.

SATO Oyj Asuntoyhtymä
Group Oy
Holding 2020 2019 2020 2019
Balder, share, % 56,0 54,7 75,0 75,0
Non-controlling interests, % 44,0 45,3 25,0 25,0
Total 100,0 100,0 100,0 100,0
SATO Oyj Asuntoyhtymä
Group Oy
Balance sheet in summary, SEKm 2020 2019 2020 2019
Investment properties 47,193 48,080 3,558 2,109
Other non-current assets 837 900 0 1
Current assets 3,208 248 39 64
Total assets 51,238 49,228 3,597 2,173
Liabilities 25,673 22,562 2,956 2,118
Current liabilities 3,927 5,217 26 26
Total liabilities 29,600 27,779 2,982 2,144
Net assets 21,638 21,449 614 29
Reported value non-controlling
interests
9,472 9,690 154 7
Statement of comprehensive income SATO Oyj Asuntoyhtymä
Group Oy
in summary, SEKm 2020 2019 2020 2019
Income 3,181 3,130 189 118
Net profit for the year 1,069 5,664 613 26
Other comprehensive income –21 –56 0 0
Comprehensive income for the year 1,048 5,609 613 26
Net profit for the year related to
non-controlling interests
470 2,564 153 7
Dividend paid to non-controlling
interests
135
SATO Oyj Asuntoyhtymä
Group Oy
Cash flow statement, SEKm 2020 2019 2020 2019
Cash flow from operating activities 1,240 982 38 35
Cash flow from investing activities –1,551 –1,969 –753 –1,251
Cash flow from financing acitvities 2,965 981 722 1,230
Increase/decrease in cash and cash
equivalents
2,654 –5 7 14

NOTE 22 Financial risk management

ACCOUNTING POLICY

Financial instruments

Financial instruments are measured and recognised in the Group in accordance with the rules in IFRS 9. Financial instruments on the asset side that are recognised in the consolidated statement of financial position include cash and cash equivalents, financial investments, trade receivables and other non-current receivables (receivables from associated companies) as well as derivatives with a positive value. Liabilities include trade payables, borrowings and derivatives with a negative value.

A financial asset or financial liability is carried in the consolidated statement of financial position when the company becomes a party to the contractual terms of the instrument. Trade receivables are carried in the balance sheet when the invoice has been sent. Rent receivables are recognised as a receivable in the period when performance, which corresponds to the receivable's value, has been delivered and payments corresponding to the value of the receivable have still not been received. A liability is recognised when the counterparty has performed a service and a contractual payment obligation exists, even if the invoice has not yet been received. Trade payables are recognised when the invoice has been received.

A financial asset is derecognised when the contractual rights are realised or expire or the company no longer has control over them. The same applies to a portion of a financial asset. A financial liability is derecognised when the contractual liability is discharged or otherwise expires. The same applies to a portion of a financial liability.

The acquisition or disposal of financial assets is recognised on the transaction date, which represents the day when the company committed to acquire or dispose of the asset. Borrowing is recognised when the funds have been received, while derivative instruments are recognised when the contract has been entered into.

Balder divides its financial instruments into the following categories in accordance with IFRS 9; amortised cost, fair value through other comprehensive income and fair value through the income statement. The classification is based on the cash flow characteristics of the asset and on the business model the asset is held within.

Financial assets measured at amortised cost

Interest-bearing assets (debt instruments) which are held for the purpose of recovering contractual cash flows and where these cash flows consist only of principal amounts and interest are measured at amortised cost. The carrying amount of these assets is adjusted with any expected credit losses recognised (see paragraph on Impairment testing of financial assets). Interest income from these financial assets is recognised using the effective interest method and is recognised as financial income. The Group's financial assets that are measured at amortised cost consist of other non-current receivables (mainly receivables from associated companies), trade receivables, and cash and cash equivalents.

Financial assets measured at fair value via the income statement

Investments in debt instruments that do not qualify for recognition at amortised cost or at fair value through other comprehensive income are measured at fair value via the income statement. Equity instruments held for trading, equity instruments where the Group has chosen not to report fair value changes through other comprehensive income and derivatives that do not qualify for hedge accounting are included in this category. A gain or loss on a financial asset (debt instrument) that is recognised at fair value via the income statement and which is not part of a

hedging relationship is recognised net in the income statement during the period in which the gain or loss arises. This category includes the Group's derivatives with positive fair value and the Group's financial investments.

Financial assets measured at fair value through other comprehensive income

This category includes equity instruments that are not held for trading and for which the Group, on initial recognition, made an irrevocable decision to report the holding at fair value through other comprehensive income. The changes in value of these investments are recognised on an ongoing basis in other comprehensive income. In the event of a divestment, the accumulated profit or loss is not transferred to the income statement. Holdings of unlisted shares that are included in the item other non-current receivables are recognised in this category.

Financial liabilities measured at fair value via the income statement

Financial liabilities measured at fair value via the income statement comprise derivatives with negative fair values that are not included in what is referred to as hedge accounting. Financial liabilities measured at fair value via the income statement are also recognised in subsequent periods at fair value and the change in value is recognised in the net profit for the year.

Liabilities in this category are classified as current liabilities if they fall due within 12 months of the balance sheet date. If they fall due after more than 12 months from the balance sheet date, they are classified as non-current liabilities.

Financial liabilities measured at amortised cost

The Group's other financial liabilities are classified as measured at amortised cost by application of the effective interest method. Financial liabilities at amortised cost consist of interest-bearing liabilities (current and non-current), other non-current liabilities and trade payables. Borrowing is initially carried at fair value, net after transaction costs. Borrowing is subsequently recognised at amortised cost and any difference between the amount received (net after transaction costs) and the amount of repayment is recognised in the statement of comprehensive income allocated over the term of the loan using the effective interest method. Borrowing is classified as short-term in the balance sheet if the company does not have an unconditional right to postpone the settlement of the debt for at least twelve months after the reporting period. Declared dividends are recognised, where applicable, as liabilities after the shareholders' general meeting has approved the dividend. Trade payables and other operating liabilities have short expected maturities and are measured at their nominal value with no discounting.

Derivative instruments

Derivative instruments are recognised in the balance sheet on the transaction date and are measured at fair value, both on initial and subsequent remeasurement in each reporting period. Balder holds derivatives that hedge certain risks relating to cash flow (currency swaps and interest rate swaps), and derivatives that hedge investment in a foreign operation (net investment hedges). Derivatives related to net investments in foreign operations, currency swaps and certain interest rate swaps have been identified as hedging instruments and are deemed to meet the requirements for hedge accounting in IFRS 9. For more detailed descriptions of hedge accounting, see the following paragraph. All other derivative instruments are not considered to meet the criteria for hedge accounting in IFRS 9. Derivatives are also contractual terms that are embedded into other agreements. Embedded

derivatives should be accounted for separately if they are not closely related to the host contract. At present, no embedded derivatives have been identified. Changes in the value of derivative instruments identified as hedging instruments are recognised in other comprehensive income, while changes in value of other derivative instruments are recognised in accordance with the applicable category above.

Hedging of variable interest on loans

Some of the Group's interest rate swaps have been identified as hedging instruments and are deemed to meet the requirements for hedge accounting. The interest rate swaps hedge loans with variable interest rates by replacing variable rates with fixed interest rates. The effective portion of changes in fair value on these interest rate swaps is recognised through other comprehensive income in reserves in equity. The ineffective portion of the change in value is recognised immediately in net profit for the year and is included in the line item Changes in value of derivatives. Amounts accumulated in the hedging reserve in equity are reclassified to profit or loss in the periods in which the hedged item affects earnings.

Hedges of net investments in foreign operations

The Group hedges a significant proportion of the net investments in foreign operations through loans in the same currency as the foreign operations and through currency swaps. The Group considers that the criteria for hedge accounting in IFRS 9 are met for net investments in foreign operations. Translation differences on loans and changes in fair value of hedging instruments are recognised in "Other comprehensive income" insofar as the hedge is effective. The cumulative changes in translation differences and fair value are recognised as separate components in equity. Gains or losses arising from the ineffective portion of the hedging instrument are recognised in net profit for the year. When divesting foreign operations, the gain or loss that is accumulated in equity is transferred to net profit for the year, thus increasing or decreasing the profit/loss of the divestment.

Cash and cash equivalents

Cash and cash equivalents consist of cash in hand and directly accessible balances at banks and similar institutions as well as short-term highly liquid investments with original maturities of less than three months which are only subject to an insignificant risk of fluctuation in value.

Impairment testing of financial assets

At each reporting date, the Group assesses the future expected credit losses, which are linked to assets recognised at amortised cost based on forward-looking information. The Group's financial assets for which credit losses are expected, consist essentially consist of trade receivables (rent receivables) and other non-current receivables (mainly receivables from associated companies). The Group chooses a provisioning method based on whether or not there has been a significant increase in credit risk. The Group recognises a provision for credit losses for such expected credit losses at each reporting date. For the Group's financial assets (largely trade receivables and receivables from associated companies), the Group applies the simplified approach for credit loss provisioning, in other words, the provision will correspond to the expected loss over the entire life of the trade receivable. In order to measure the expected credit losses, trade receivables have been grouped based on distributed credit risk characteristics and days overdue. The Group uses forward-looking variables for expected credit losses.

Balder is financed by equity and liabilities, where the majority of the liabilities consist of interest-bearing liabilities. The proportion of equity is impacted by the chosen level of financial risk which in turn is impacted by lenders' equity requirements for offering financing at competitive market rates. Balder's long-term goals for the capital structure are that the equity/assets ratio should not be less than 40% over time, that the interest coverage ratio should not be less than 2 times and that the net debt to total assets should not exceed 50%.

Financial policy

The Group is exposed to six different kinds of financial risks through its operations. Financial risks refer to interest rate risk, liquidity risk, refinancing risk, price risk, credit risk and currency risk. The financial policy prescribes guidelines and rules for how the financial operations shall be conducted and establishes the division of responsibilities and administrative rules. Departures from the Group's financial policy require the approval of the Board. Responsibility for the Group's financial transactions and risks is managed centrally by the parent company's finance department. Financial risk is managed at a portfolio level. Financial transactions shall be conducted based on an assessment of the Group's overall needs relating to liquidity, financing and interest rate risk. The equity/assets ratio shall not fall below 40% over time.

Financial policy goals:

  • the equity/assets ratio should exceed 40% over time,
  • the interest coverage ratio should not be less than 2 times,
  • net debt to total assets should not exceed 50% over time,
  • secure the short-term and long-term supply of capital,
  • achieve a stable long-term capital structure.

The goals are followed up regularly in reports to the Board prior to presentation of the company's interim reports.

Balder has obligations to its financiers in the form of financial key ratios, so-called covenants. At the year-end, Balder had financing obligations with an interest coverage ratio of 1.8 times, secured debt/total assets of 45% and a net debt to total assets ratio of 65%. All covenants were met at the year-end. SATO also has covenants in its loan agreements and all of them were fulfilled as of the yearend.

Duration analysis of financial liabilities

The tables show the cash flow per year in respect of financial liabilities assuming the current size of the Group. The cash flow refers to interest expenses, amortisation, trade payables and settlement of other financial liabilities. Net financial items have been calculated based on the Group's average interest minus interest income. Refinancing takes place on an ongoing basis, so no interest expense for a longer period than 10 years is indicated.

Duration analysis of financial liabilities

Group, 31/12/2020

SEKm Within one year 1–2 years 2–3 years 3–4 years 4–5 years >5 years Total
Maturity structure, loans 9,174 12,026 11,585 11,150 9,567 35,487 88,989
Interest expenses1) 1,385 1,382 1,380 1,378 1,375 6,840 13,740
Trade payables 505 505
Lease liabilities (rent of premises) 12 12 10 9 9 19 72
Other liabilities 4,076 4,076
Total 15,152 13,421 12,975 12,537 10,951 42,346 107,382

For non-discounted cash flows attributable to site leasehold rights, see Note 8, Leases.

Group, 31/12/2019

SEKm Within one year 1–2 years 2–3 years 3–4 years 4–5 years >5 years Total
Maturity structure, loans 11,806 8,041 8,587 8,080 10,664 34,064 81,242
Interest expenses1) 1,265 1,262 1,259 1,256 1,253 6,221 12,518
Trade payables 660 660
Lease liabilities (rent of premises) 13 13 13 10 10 30 89
Other liabilities 605 605
Total 14,350 9,316 9,859 9,346 11,928 40,315 95,114

Parent Company, 31/12/2020

SEKm Within one year 1–2 years 2–3 years 3–4 years 4–5 years >5 years Total
Maturity structure, loans 4,291 8,475 6,245 5,268 6,696 15,392 46,366
Interest expenses1) 694 694 694 694 693 3,462 6,932
Trade payables 7 7
Other liabilities 3,329 3,329
Total 8,322 9,169 6,939 5,962 7,389 18,854 56,634

Parent Company, 31/12/2019

SEKm Within one year 1–2 years 2–3 years 3–4 years 4–5 years >5 years Total
Maturity structure, loans 4,414 2,624 7,667 5,546 4,576 19,035 43,862
Interest expenses1) 667 666 666 665 665 3,319 6,648
Trade payables 19 19
Other liabilities 96 96
Total 5,195 3,291 8,333 6,212 5,241 22,354 50,625

1) Refers to interest expenses during the period 0 –10 years.

Sensitivity analysis

Factor Change Profit effect
before tax, SEKm
Interest rate level for interest
bearing liabilities
+ 1 percentage point –257
Financial goals Outcome
Goal 2020 2019
Equity/assets ratio, % min. 40.0 38.6 38.3
Net debt to total assets, % max. 50.0 46.1 48.4
Interest coverage ratio, times min. 2.0 5.3 5.2

Maturity structure interest rate derivatives 1)

Year Nominal amount, SEKm Interest, %
2021 2,677 2.25
2022 1,634 0.78
2023 3,052 0.44
2024 631 1.29
2025 2,253 1.24
2026 2,054 1.81
2027 1,151 0.14
2029 2,201 0.84
2030 1,004 1.04
2037 1,500 2.00
2040 251 0.67
Totalt 18,407 1.21

1) Relates to interest rate derivatives where a fixed interest rate is being paid.

RISKS

Capital risk

The Group's goal in respect of the capital structure is to secure the Group's ability to continue its operations, in order to continue to generate a return to shareholders and value for other stakeholders.

Liquidity risk

Liquidity risk refers to the risk of a lack of sufficient cash and cash equivalents to be able to fulfil the company's payment obligations relating to operating costs, interest and amortisation. According to the financial policy, there should always be sufficient cash in hand and guaranteed credit facilities to cover the day-to-day liquidity requirements. Regardless of long-term goals, the Board can decide to temporarily boost liquidity, for example, to be better prepared for major transactions. As of the closing date, Balder's cash and cash equivalents, financial investments and unutilised credit facilities totalled SEK 7,47 7 million (3,252). Balder's financial policy, which is updated at least once each year, prescribes guidelines and rules for how borrowing should be conducted. The overall objective of financial management is to use borrowing to safeguard the supply of capital to the company in the short and long run, to adapt the financial strategy and management of financial risks to the company's business so that a long-term and stable capital structure is achieved and maintained and to achieve the best possible net financial income/expense within given risk limits.

Refinancing risk

Refinancing risk refers to the risk that Balder may not be able to obtain refinancing in the future or only at a significantly increased cost. As of the year-end, Balder had credit facilities of SEK 13,032 million (8,673), of which SEK 13,032 million (8,673) were unutilised. Balder works continually on raising new loans and on renegotiating existing loans. Over time, 50% of the loan portfolio shall have a credit term of more than 2 years and not more than 20% of the loans should mature within one year.

Interest rate risk

Interest rate risk refers to the risk of fluctuations in cash flow and earnings due to changes in interest rates. The key factor affecting interest rate risk is the interest rate refixing period. Long interest rate refixing periods ensure predictability in cash flow, but in most cases also mean higher interest expenses. The Group's interest rate exposure is centralised, which means that the central finance function is responsible for identifying and managing this exposure. The interest rate risk shall be managed using risk hedging instruments such as interest rate swaps, interest rate ceilings and interest rate floors. The overriding key ratio used is the interest coverage ratio. On each measurement date, the interest coverage ratio shall exceed 2.0 times. To manage the interest risk cost-effectively, an assessment of the interest rate risk is made when raising loans with short interest rate refixing periods based on the Group's overall loan portfolio. Interest rate derivative transactions are entered into as required to achieve the desired interest risk in the overall borrowing.

Balder has mainly used swaps and fixed-rate loans to manage its interest rate risk, which mature between 2021 and 2040. As of the year-end, about 67% of the loans were hedged using interest rate swaps and fixed-rate loans and for 7% hedge accounting is applied. Fluctuations in market interest rates give rise to theoretical surpluses or deficits in respect of these financial instruments, which do not directly affect cash flow. Derivatives are recognised on an ongoing basis at fair value in the balance sheet and changes in value are recognised in the income statement. Derivatives are measured based on quoted prices in the market. Changes in value during 2020 totalled SEK –141 million (–180). As of the year-end, the fair value of interest rate derivatives totalled SEK –1,253 million (–1,113). The fair value of financial instruments is based on measurements by the intermediating credit institutions. The reasonability of the measurements has been tested by engaging another credit institution to value similar instruments at the end of the reporting period, see the sensitivity analysis.

SATO's interest rate derivatives meet hedge accounting requirements, as the term of the derivatives is matched with the underlying financing. This means that the change in value of the derivatives is recognised in other comprehensive income. The interest rate derivatives (interest rate swaps) entered into by SATO have the same critical terms as the hedged item. Critical terms may be the reference rate, interest rate conversion days, payment dates, due date and nominal amount. Inefficiency in interest rate swaps may arise due to differences in critical terms between the interest rate swap and the loan. There were no inefficiencies attributable to SATO's interest rate swaps in 2020.

Currency risk

Balder owns properties through subsidiaries in Denmark, Norway, Finland, Germany and the UK and through SATO in St Petersburg. The companies mainly have revenue and costs in local currency. The Group is impacted by exchange rate fluctuations when translating the assets and liabilities of foreign subsidiaries into the currency of the parent company. The Group is exposed to EUR, DKK, GBP and NOK through net investments in foreign operations.

Translation exposure

When the subsidiaries' statement of financial position in local currency is translated into Swedish kronor, a translation difference arises, which is due to the fact that the current year is translated at a different closing rate than the previous year and that the statement of comprehensive income is translated at the average rate during the year, while the statement of financial position is translated at the exchange rate as of 31 December. The translation difference is posted to other comprehensive income and is carried forward in reserves in equity. The translation exposure consists of the risk that the translation difference represents in terms of the impact on other comprehensive income and equity. The risk is greatest for the currencies in which the Group has the largest net assets and where the price movements in relation to Swedish kronor are the largest. The net assets in Finland and Denmark have the greatest impact on the Group. Balder issued a total of EUR 2,650 million in the European bond market, which helped to reduce the currency exposure of the Group's net assets in EUR and DKK. At the turn of the year, there were also currency swaps of NOK 445 million (–) and EUR –492 million (–348), the fair value of these amounted to SEK –287 million (–97).

The assets and liabilities in EUR and DKK are aggregated as the DKK rate is pegged to the EUR. The translation differences are mainly handled through borrowing spread among different currencies based on the net assets in each currency. Loans raised in the same currency as there are net assets for in the Group, reduce these net assets and thus reduce the translation exposure. These hedges of net investments in foreign operations operate in the following way. Exchange gains and losses on loans in foreign currency, which finance acquisition of foreign subsidiaries, are recognised as part of other comprehensive income to the extent that the loan functions as a hedge for the acquired net assets. In other comprehensive income, they meet the translation difference arising from the consolidation of the foreign subsidiaries. In the Group, net exchange differences of SEK 714 million (–226) relating to liabilities in foreign currency were transferred to other comprehensive income as hedging of net investments in foreign operations. There was no inefficiency to be recognised from hedges of net investment in foreign operations. The loans that hedge net investments in foreign operations are in EUR and DKK, since these foreign currencies have the greatest impact on the statement of financial position. Of the Group's total net investments in foreign operations, 100% are hedged.

Since the Group uses parts of its cash flow to amortise the loans to improve net financial items, the extent of this hedging tends to decrease over time. A change in the foreign subsidiary's net assets over time can have the same effect.

Price risk

Balder's income is affected by the occupancy rate of the properties, the level of competitive market rents and the ability of customers to pay. A change in the rental rate or economic occupancy of +/– 1% has an effect on profit before tax of SEK +/– 82 million and SEK +/– 86 million respectively.

Credit risks

Trade receivables

The risk that the Group's customers will not fulfil their obligations, i.e. that payment will not be received for trade receivables, constitutes a customer credit risk. The credit of the Group's customers is assessed by obtaining information about the customers' financial position from various credit rating agencies.

An estimate of the credit risk is made in conjunction with new leases and conversion of premises for existing customers. Bank guarantees, deposits or other security are required for customers with low creditworthiness or unsatisfactory credit histories.

Credit is monitored continually to follow developments in the creditworthiness of customers.

Financial operations

Balder's financial operations give rise to credit risk exposure. The risk is mainly counterparty risk in connection with receivables from banks and other counterparties that arise in the trading of derivative instruments. Balder's financial policy includes special counterparty rules which stipulate the maximum credit exposure for different counterparties.

Borrowing, maturity structure and interest rates

At the year-end, Balder had binding loan agreements totalling SEK 88,989 million (81,242). Loans are raised in Swedish kronor, Danish kroner, Norwegian kroner, British pounds and euros. At year-end, loans in Danish kroner totalled DKK 6,183 million, loans in Norwegian kroner NOK 622 million, loans in British pounds GBP 49 million and loans in euros EUR 5,230 million. The single largest financing source is euro bonds issued in the European bond market. As of 31 December, the outstanding commercial paper volume was SEK 1,870 million (3,836), the commercial paper programme totals SEK 6,015 million (6,173). Net interest-bearing liabilities minus cash and cash equivalents and financial investments of SEK 7,127 million (2,902) totalled SEK 83,115 million (76,514).

Agreements can be divided into four categories:

  • loans against security pledged in the form of promissory note receivables from subsidiaries. The security has been augmented by collateral in the shares of subsidiaries/limited partnership shares,
  • loans against pledging of mortgage deeds on property,
  • commercial paper programme,
  • bond loans, including Hybrid capital.

Short-term interest bearing liabilities that formally mature within one year and one year of agreed amortisation are recognised as current interest-bearing liabilities.

In certain cases, the security is augmented by covenants. Balder satisfies all of its covenants. Credit agreements contain customary termination conditions.

The average fixed credit term in loan agreements totalled 5.9 years (5.8) on 31 December 2020. The maturity structure of loan agreements, presented in the table showing the loan terms, indicates when loan agreements are due for renegotiation or repayment. The average effective interest as of the closing date totalled 1.5% (1.5) including the effect of accrued interest from Balder's interest rate derivatives. The average interest rate refixing period on the same date was 3.5 years (3.1). The proportion of loans with interest maturity dates during the coming 3-year period was 57% (57).

Other commitments

During the year Balder acquired 50% of the shares in Karlatornet AB and has a commitment to provide SEK 500 million as a shareholder's loan to the company.

Carrying amount and fair value of financial instruments, 2020

Group, SEKm Fair value Fair value hierarchy
Assets and liabilities
measured at
Assets and liabilities
measured at fair value via
via other
comprehen
Total
carrying
Total fair value 2020
amortised cost the income statement sive income amount Level 1 Level 2 Level 3
Other non-current receivables 2,291 102) 2,302 2,302
Trade receivables 343 343 343
Financial investments 2,659 2,659 2,659
Cash and cash equivalents 4,468 4,468 4,468
Total receivables 7,102 2,659 10 9,771 2,659 7,112
Non-current interest-bearing
liabilities
79,814 79,814 42,403 38,302
Other non-current liabilities 828 828 828
Derivatives1) 767 773 1,540 1,540
Current interest-bearing liabilities 9,175 9,175 2,409 6,769
Trade payables 505 505 505
Total liabilities 90,322 767 773 91,861 44,811 47,944

Interest rate refixing period

Carrying amount, SEKm Interest, %
Year 2020 2019 2020 2019
2021 34,277 35,789 1.0 0.9
2022 6,556 4,493 1.4 2.4
2023 9,548 6,279 2.4 1.4
2024 4,126 4,712 1.6 3.0
2025 7,566 4,285 2.1 1.6
>2026 26,917 25,684 1.5 1.9
Total 88,989 81,242 1.5 1.5
Share, % Fair value, SEKm
Year 2020 2019 2020 2019
2021 38 44 34,287 35,811
2022 7 6 6,615 4,532
2023 11 8 9,770 6,374
2024 5 6 4,257 4,785
2025 9 5 7,815 4,386
>2026 30 32 27,138 26,018
Total 100 100 89,883 81,906

Carrying amount and fair value of financial instruments, 2019

Fair value Fair value hierarchy
Assets and liabilities
measured at
Assets and liabilities
measured at fair value via
via other
comprehen
Total
carrying
Total fair value 2019
Group, SEKm amortised cost the income statement sive income amount Level 1 Level 2 Level 3
Other non-current receivables 1,436 122) 1,448 1,448
Trade receivables 241 241 241
Financial investments 1,523 1,523 1,523
Cash and cash equivalents 1,379 1,379 1,379
Total receivables 3,055 1,523 12 4,590 1,523 3,067
Non-current interest-bearing liabilities 69,436 69,436 33,924 36,166
Other non-current liabilities 542 542 542
Derivatives1) 626 584 1,210 1,210
Current interest-bearing liabilities 11,806 11,806 1,054 10,763
Trade payables 660 660 660
Total liabilities 82,444 626 584 83,654 34,977 49,340

1) Derivative instruments have been recognised net as a liability. The liability includes positive values in the Group of SEK 18 million (0).

2) No changes in value were recognised in 2020 or 2019.

Level 1 – measured at fair value based on quoted market values on active markets for identical assets.

Level 2 – measured at fair value based on other observable inputs for assets and liabilities than market values under level 1.

Level 3 – measured at fair value based on inputs for assets and liabilities that are not based on observable market inputs.

Carrying amount and fair value of financial instruments, 2020

Fair value Fair value hierarchy
Assets and liabilities Assets and liabilities
measured at fair value via
the income statement
via other com Total fair value 2020
Parent Company, SEKm measured at
amortised cost
prehensive
income
Total carry
ing amount
Level 1 Level 2 Level 3
Other non-current receivables 1,817 1,817 1,817
Receivables from Group companies 57,787 57,787 57,787
Financial investments 2,078 2,078 2,078
Cash and cash equivalents 1,359 1,359 1,359
Total receivables 60,963 2,078 63,041 2,078 60,963
Non-current liabilities
to credit institutions
40,260 40,260 28,536 12,460
Derivatives1) 767 767 767
Liabilities to Group companies 14,419 14,419 14,419
Current liabilities
to credit institutions
6,106 6,106 901 5,206
Trade payables 7 7 7
Total liabilities 60,792 767 61,559 29,437 32,860

NOTE 23 Credit facilities

Group Parent Company
SEKm 2020 2019 2020 2019
Approved credit limit 350 350 350 350
Utilised portion
Unutilised portion 350 350 350 350

NOTE 24 Accrued expenses and deferred income

Group Parent Company
SEKm 2020 2019 2020 2019
Staff costs 88 124 22 21
Interest expenses 603 507 427 370
Rent paid in advance 1,209 1,090
Property costs 571 329
Other items 73 65 5 5
Total 2,546 2,115 454 396

Carrying amount and fair value of financial instruments, 2019

Fair value hierarchy
Assets and liabilities Assets and liabilities
measured at
measured at fair value via
the income statement
Fair value
via other com
Total fair value 2019
Parent Company, SEKm amortised cost prehensive
income
Total carry
ing amount
Level 1 Level 2 Level 3
Other non-current receivables 1,190 1,190 1,190
Receivables from Group companies 52,646 52,646 52,646
Financial investments 1,051 1,051 1,051
Cash and cash equivalents 944 944 944
Total receivables 54,780 1,051 55,831 1,051 54,780
Non-current liabilities
to credit institutions 39,449 39,449 27,819 12,131
Derivatives1) 626 626 626
Liabilities to Group companies 10,966 10,966 10,966
Current liabilities
to credit institutions 4,414 4,414 4,414
Trade payables 19 19 19
Total liabilities 54,847 626 55,473 27,819 28,155

1) Derivative instruments have been recognised net as a liability. The liability includes positive values in the parent company of SEK - million (1).

Level 1 – measured at fair value based on quoted market values on active markets for identical assets.

Level 2 – measured at fair value based on other observable inputs for assets and liabilities than market values under level 1.

Level 3 – measured at fair value based on inputs for assets and liabilities that are not based on observable market inputs.

NOTE 25 Pledged assets and contingent liabilities

ACCOUNTING POLICY

Contingent liabilities

A contingent liability is recognised if there is a possible obligation for which it has yet to be confirmed if the Group has an obligation that could lead to an outflow of resources, alternatively, if there is a present obligation that does not meet the criteria to be recognised in the balance sheet as a provision or other liability as it is not probable that an outflow of resources will be required to settle the obligation or as it is not possible to make a sufficiently reliable estimate of the amount.

Parent company – Financial guarantees

The parent company's financial guarantee contracts mainly consist of loan guarantees on behalf of subsidiaries and associated companies. Financial guarantees mean that the company has an obligation to compensate the holder of a debt instrument for losses that they incur because a particular debtor does not complete payment on maturity according to the terms of the agreement. For recognition of financial guarantee contracts, the parent company applies RFR 2 paragraph IFRS 9, which implies relief compared to the rules in IFRS 9 as regards financial guarantee contracts issued on behalf of subsidiaries and associated companies. The parent company recognises financial guarantee contracts as a provision in the balance sheet when the company has an obligation for which payment is likely to be required to settle the obligation.

NOTE 26 Cash flow statement

ACCOUNTING POLICY

Cash flow statement

The cash flow statement was prepared using the indirect method, by which the result is adjusted for transactions that do not result in incoming or outgoing payments during the period, as well as for any income or expenses attributable to investing or financing activities.

Cash and cash equivalents

The Group's cash and cash equivalents consist of cash and bank balances. Cash and cash equivalents are recognised in accordance with the principles described in Note 22 in respect of financial assets measured at accrued cost.

Cash and cash equivalents

Group Parent Company
SEKm 2020 2019 2020 2019
The following components
are included in cash and
cash equivalents:
Cash and bank balances 4,468 1,379 1,359 944
Total according to
Balance Sheet
4,468 1,379 1,359 944
Total according to
cash flow statement
4,468 1,379 1,359 944

Interest and derivative expenses paid

Group Parent Company
SEKm 2020 2019 2020 2019
Interest received 267 176 158 137
Interest paid –1,337 –1,456 –735 –644
Derivative expense paid –105 –139 –105 –139
Total –1,174 –1,419 –682 –646

Intra-Group interest income and interest expenses for 2020 and 2019 do not affect the cash flow.

Pledged assets

Group Parent Company
SEKm 2020 2019 2020 2019
Property mortgages 31,039 27,755
Shares in Group companies 12,100 8,976
Promissory notes 3,203 3,175
Total 43,139 36,730 3,203 3,175

Contingent liabilities

Group Parent Company
SEKm 2020 2019 2020 2019
Guarantees for subsidiaries 16,555 15,532
Guarantees for
associated companies
1,647 1,451 1,647 1,451
Other guarantees1) 1,597 1,712 189 546
Total 3,244 3,162 18,391 17,529

1) As the project portfolio grows and the number of tenant owner property projects in progress increases, so do other guarantee commitments towards housing associations, contractors and municipalities.

Reconciliation of liabilities related to financing activities

Changes not affecting cash flow
Group, SEKm 31/12/2019 Cash flow Exchange
differences
Other items not
affecting cash flow
31/12/2020
Interest-bearing liabilities 81,242 10,634 –2,847 –40 88,989
Lease liabilities (rent of office premises) 81 –19 5 67
Total liabilities related to financing activities 81,324 10,615 –2,847 –36 89,056
Changes not affecting cash flow
Group, SEKm 31/12/2018 Cash flow Exchange
differences
Other items not
affecting cash flow
31/12/2019
Interest-bearing liabilities 67,205 13,641 458 –63 81,242
Lease liabilities (rent of office premises) –26 107 81
Total liabilities related to financing activities 67,205 13,616 458 44 81,324

Contd. Note 26 Cash flow statement

Reconciliation of liabilities related to financing activities

Changes not affecting cash flow
Parent Company, SEKm 31/12/2019 Cash flow Exchange
differences
Other items not
affecting cash flow
31/12/2020
Interest-bearing liabilities 43,862 3,835 –1,331 46,366
Total liabilities related to financing activities 43,862 3,835 –1,331 46,366
Changes not affecting cash flow
Parent Company, SEKm 31/12/2018 Cash flow Exchange
differences
Other items not
affecting cash flow
31/12/2019
Interest-bearing liabilities 33,275 10,398 190 43,862
Total liabilities related to financing activities 33,275 10,398 190 43,862

NOTE 27 Participations in Group companies

ACCOUNTING POLICY

Shares in subsidiaries are recognised in the parent company in accordance with the cost method. The book value is tested on an ongoing basis against the subsidiaries' Group equity. If the book value falls below the subsidiaries' Group value, there is an impairment that is charged to the income statement. In those cases where a previous impairment is no longer justified, this is reversed.

Parent Company, SEKm 2020 2019
Accumulated cost
Opening balance 10,111 8,449
Acquisitions 265
Shareholder contributions paid 1,662
Closing balance 10,376 10,111

Specification of parent company's direct holdings of participations in subsidiaries

Subsidiaries Corporate ID number Reg. office Number of
participations
Share, % 2020 2019
Balder Storstad AB 556676-4378 Gothenburg 100,000 100 2,046 2,046
Balder Mellanstad AB 556514-4291 Gothenburg 1,938,000 100 5,782 5,782
Din Bostad Sverige AB 556541-1898 Gothenburg 1,000,000 100 626 626
Egby Vindkraftverk AB 556760-5919 Gothenburg 1,000 100 0 0
Balder Danmark A/S 34058016 Copenhagen 5,000 100 158 158
Balder Fastigheter Norge AS 916755856 Oslo 120 100 319 319
Balder Bilrum Fastighet AB 556730-4059 Gothenburg 100,000 100 1,179 1,179
Balder Germany GmbH 194177B Berlin 23,725 95 1 1
SATO Oyj1) 0201470-5 Helsinki 619,300 0 265
Total 10,376 10,111

1) The Balder Group owns a total of 31,696,745 shares in SATO Oyj, corresponding to an ownership interest of 56.0% (54.7). 619,300 shares are owned by Fastighets AB Balder and the remaining 31,077,455 shares are owned by the subsidiary Balder Finska Otas AB (559000-0369).

The Balder Group owns 100% of 510 additional companies (480) in Sweden, Denmark, Finland, Norway, Germany and the UK via the above-mentioned subsidiaries, as presented in each subsidiary's annual accounts. For companies in SATO Oyj, see SATO Oyj's annual accounts at sato.fi.

NOTE 28 Receivables from/liabilities to Group companies

Receivables Liabilities
Parent Company, SEKm 2020 2019 2020 2019
Opening balance 52,646 38,337 10,966 5,282
Change in lending to
subsidiaries
5,141 14,309 3,453 5,683
Closing balance 57,787 52,646 14,419 10,966

There is no fixed amortisation plan.

NOTE 29 Significant events after the end of the financial year

After the end of the year, Balder continued to acquire shares in the Norwegian listed real estate company Entra ASA. Balder's ownership share amounts to just over 25% of capital and votes.

Otherwise, no events of significant importance for Fastighets AB Balder's position occurred after the end of the reporting period.

NOTE 30 Related parties

ACCOUNTING POLICY

Related parties are both legal and physical persons as defined in IAS 24. Transactions with related parties shall be conducted on commercial terms and conditions, just like other transactions. In connection with transactions, special attention shall also be paid to the guidelines on conflicts of interest. The following are defined as related parties:

  • All companies within the Balder Group
  • Board members and company management
  • Close family members of Board members or company management
  • Companies controlled by Board members or company management
  • Shareholders in control of more than 10% of the shares or votes in the company

Related party relationships Group

The Group is under the control of Erik Selin Fastigheter AB, which holds 48.8% (49.9) of the votes in the parent company Fastighets AB Balder. The parent company in the largest Group of which Balder is part is Erik Selin Fastigheter AB.

Parent Company

Apart from the related parties shown for the Group, the parent company exercises control over subsidiaries according to Note 27, Participations in Group companies.

Summary of related party transactions

Group

Erik Selin Fastigheter AB purchased property-related administrative services from Balder for SEK 4 million (3). Balder purchased services from the law firm Glimstedt for SEK 1 million (3), where the Board member Anders Wennergren is a partner. During the year, construction services were purchased from Tommy Byggare AB to the order of SEK 4 million (17), which is a related company to Erik Selin Fastigheter AB. The services were priced on competitive market conditions.

Parent Company

The parent company performed property-related administrative services on behalf of its subsidiaries totalling SEK 251 million (266). The parent company functions as an internal bank. On the closing date, receivables from subsidiaries totalled SEK 57,787 million (52,646). Both administrative and financial services were priced on competitive market conditions.

Associated companies/joint ventures

Apart from the related parties described above, the Balder Group owns associated companies according to Note 14, Participations in associated companies/joint ventures.

During the financial year, associated companies purchased management and administrative services for their organisations from Balder totalling SEK 78 million (70). In addition to this, services were purchased from Collector AB (publ). Net receivables from associated companies totalled SEK 2,07 7 million (1,392) on the closing date. Both administrative and financial services were priced on competitive market conditions.

Transactions with key people in executive positions

The company's Board members and companies owned by these members control 63.7% (65.8) of the votes in Balder. With regard to the Board, CEO and other employees' salaries and other remuneration, expenses and agreements relating to pensions and similar benefits as well as agreements in respect of severance pay, see Note 4, Employees and staff costs.

NOTE 31 Parent Company information

Fastighets AB Balder (publ) is a Swedish-registered limited liability company with its registered office in Gothenburg. The parent company's shares are listed on Nasdaq Stockholm, Large Cap segment. The address of the head office is Box 53121, 400 15 Gothenburg, Sweden. The visiting address is Parkgatan 49.

The consolidated accounts for 2020 comprise the parent company and its subsidiaries, together referred to as the Group.

NOTE 32 Other income/expenses

During the fourth quarter, 17.7% was acquired in the Norwegian listed real estate company Entra ASA and the holding was classified as a financial asset valued at fair value via the income statement. At the end of the fourth quarter, an agreement was made for the purchase of additional shares (new holding over 20%) and a significant influence is thus estimated to have been achieved as of December 31, 2020. Change in the fair value of the holding in Entra ASA from the time of acquisition until significant influence was achieved amounts to SEK 462 million and is reported in the item Other income/expenses in the income statement for the Group and in the item Interest income and similar income items in the parent company. For further information on the holding in Entra ASA, see Note 14, Participations in associated companies/joint ventures.

The annual accounts and the consolidated accounts were approved for issuance by the Board of Directors and CEO on 18 March 2021. The consolidated income statement and balance sheet and the Parent Company income statement and balance sheet will be subject to adoption by the Annual General Meeting on 12 May 2021. The Board will propose to the Annual General Meeting that no dividend (–) be declared for the financial year 2020.

The annual accounts have been prepared in accordance with generally accepted accounting principles in Sweden and the consolidated financial statements have been prepared in accordance with the international accounting standards IFRS referred to in Regulation (EC) No 1606/2002 of the European Parliament and of the Council of 19 July 2002 on the application of international accounting standards. The annual accounts and consolidated financial statements provide a true

and fair view of the parent company's and Group's financial position and results of operations. The Report of the Board of Directors for the Group and the parent company provides a true and fair review of the development of the Group's and the parent company's operations, financial position and results of operations and describes material risks and uncertainties facing the parent company and the companies forming the Group.

Gothenburg, 18 March 2021

Christina Rogestam Chairman of the Board

Sten Dunér Board member Fredrik Svensson Board member

Anders Wennergren Board member

Erik Selin Board member and CEO

Our audit report was submitted on 19 March 2021 Öhrlings PricewaterhouseCoopers AB

Bengt Kron Authorised Public Accountant Auditor in charge

Konstantin Belogorcev Authorised Public Accountant

83 FASTIGHETS AB BALDER ANNUAL REPORT 2020

AUDIT REPORT

To the Annual General Meeting of Fastighets AB Balder (publ), corporate identity no. 556525-6905

Report on the annual accounts and consolidated financial statements

Opinions

We have audited the annual accounts and consolidated financial statements of Fastighets AB Balder (publ) for 2020. The company's annual accounts and consolidated accounts are included on pages 38–83 of this document.

In our opinion, the annual accounts have been prepared in accordance with the Swedish Annual Accounts Act and present fairly, in all material respects, the financial position of the parent company as of 31 December 2020 and of its financial performance and its cash flows for the year in accordance with the Annual Accounts Act. The consolidated financial statements have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the Group as of 31 December 2020 and of its financial performance and cash flows in accordance with International Financial Reporting Standards (IFRS), as adopted by the EU, and the Annual Accounts Act. The Report of the Board of Directors is consistent with the other parts of the annual accounts and the consolidated financial statements.

We therefore recommend that the Annual General Meeting adopt the income statement and balance sheet of the parent company and the statement of comprehensive income and the statement of financial position for the Group.

Our opinions in this statement on the annual accounts and consolidated financial statements are consistent with the content of the supplementary report that has been submitted to the Board of Directors of the parent company and the Group in accordance with Article 11 of the Auditors Ordinance (537/2014).

Basis for opinions

We conducted the audit in accordance with the International Standards on Auditing (ISA) and generally accepted auditing standards in Sweden. Our responsibilities under those standards are described in further detail in the section entitled Auditor's responsibility. We are independent in relation to the parent company and the Group according to generally accepted auditing standards in Sweden and in other respects have fulfilled our professional ethical responsibilities according to these requirements. This means that, based on our best knowledge and belief, no prohibited services referred to in Article 5 (1) of the Auditors Ordinance (537/2014) have been provided to the audited company or, if applicable, to its parent company or its controlled companies in the EU.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions.

Our audit approach

The focus and scope of the audit

We designed our audit by determining materiality and assessing the risks of material misstatement in the financial statements. We conducted in particular those areas where the CEO and the Board of Directors have performed subjective assessments, for example important accounting estimates made on the basis of assumptions and forecasts about future events, which are uncertain in their nature. As in all of our audits, we also addressed the risk of the Board of Directors and the CEO overriding internal controls, including, among other matters, consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.

We tailored our audit in order to perform a proper review to enable us to provide an opinion on the

financial statements as a whole, taking into account the structure of the Group, the accounting processes and controls, and the industry in which the Group operates.

The Group operates in six countries and the properties are owned by separate companies, which through centralised accounting functions and uniform routines are compiled in sub-groups. The Finnish sub-group SATO Oyj and the Danish and Norwegian companies are audited by local unit audit teams, which report to the Group audit team.

We have evaluated the work performed by the local unit auditors to determine whether sufficient audit evidence has been obtained as the basis for our opinions in the audit report for the Group.

The audit of the sub-group Sato Oyj was performed by Deloitte, Finland. According to generally accepted auditing standards, it is the responsibility of the Group auditor to ensure that the unit auditors have performed the right work and with sufficiently high quality regarding the identified audit risks. Since Sato Oyj accounts for a substantial part of the Balder Group and thus the Group audit, and since we and the unit auditors are not part of the same network, this task is particularly important. We have therefore drawn up special instructions to Deloitte Finland and ensured via continual communication and meetings as well as written confirmations that they followed and considered the instructions. We have read, discussed and evaluated the risk assessment and materiality assessment that the unit auditor planned for and also used in the audit. We also visited Deloitte, Finland digitally and reviewed significant audit items.

Apart from the parent company accounts and consolidated financial statements, the Swedish companies were also audited by the Group audit team.

All in all, this means that we have assured ourselves that there is sufficient evidence for our Group audit and audit report.

Materiality

The scope and direction of the audit was influenced by our assessment of materiality. An audit is designed to obtain reasonable assurance as to whether the financial statements are free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in aggregate they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.

Based on our professional judgement, we determined certain quantitative thresholds for materiality, including for the consolidated financial statements as a whole. These and qualitative considerations helped us to determine the emphasis and scope of our audit and the nature, timing and scope of our audit procedures, and to assess the effect of misstatements, both individually and in aggregate, on the financial statements as a whole.

We chose total assets as a benchmark of our overall assessment of materiality for the financial statements as a whole, given that the value of the investment properties has a significant impact and significance for the Group's financial position, and constitutes a particularly important area for the audit. We also defined a specific materiality for the audit of the profit from property management including the working capital related balance sheet items.

Key audit matters

Key audit matters are the matters which, in our professional judgement were the most significant for the audit of the annual accounts and consolidated financial statements for the current period. These matters were addressed in the context of our audit of, and in forming our opinion about, the annual accounts and consolidated financial statements as a whole, but we do not provide a separate opinion on these matters.

KEY AUDIT MATTER

HOW OUR AUDIT CONSIDERED THIS KEY AUDIT MATTER

Valuation of investment properties

We refer to the Report of the Board of Directors, description of accounting policies in Note 1 and Investment properties in Note 12.

Investment properties were recognised at a fair value of SEK 149,179 million as of 31 December 2020 and account for a significant part of the Balder Group's balance sheet.

The fair value of the Group's property holdings is based on internal calculations, mainly by applying the yield method. Properties under construction and internally managed project properties are valued at market value minus estimated contracting expenditure and project risk, which usually corresponds to a valuation at cost.

To quality-assure the internal valuations, external valuations and second opinions were obtained for about 31% of the property portfolio's value.

The significance of the estimates and assumptions included in determining fair value, together with the fact that only a small difference in the individual properties calculation parameters, such as estimates of future net operating income, occupancy rate and yield requirements, can lead to significant errors, means that the valuation of investment properties, is a key audit matter.

We arranged for our valuation specialists to review and assess the measurement techniques that Balder applies and the reasonableness of the assumptions made.

  • Our audit included the following audit procedures: • Follow-up to ensure that the valuations comply with
  • Balder's guidelines for property valuation • Audit sampling to follow up on the model's mathematical calculations
  • Assessed inputs through audit sampling and follow-up in relation to historical outcomes, compared with available market inputs
  • Audit sampling of inputs in the calculation models in relation to information in the property system
  • Consideration of external valuations and audit sampling compared to internal calculations
  • Review of the audit approach and external documentation with the Finnish audit team regarding the valuation of the subsidiary SATO's property portfolio.

Our work focused on the largest investment properties, the most significant assumptions and the properties where there were the largest variations in value compared to previous years. In cases where the assumptions about future net operating income, occupancy rate and yield requirement deviated from our initial expectations, these deviations were discussed with the Group's representatives and, if necessary, supplementary documentation was obtained.

Finally, we checked that the models used, that the assumptions and sensitivity analyses Balder made were properly described in Note 12.

Other information than the annual accounts and consolidated accounts

This document also contains other information than the annual accounts and consolidated financial statements, and this is found on pages 1–37 and 106–125, respectively. Other information also consists of the Remuneration Report for 2020, which we obtained for the date of this audit report. The Board of Directors and the CEO are responsible for this other information.

Our opinion on the annual accounts and consolidated financial statements accounts does not cover this other information and we do not express any form of assurance regarding this other information.

In connection with our audit of the annual accounts and consolidated financial statements, our responsibility is to read the information identified above and consider whether the information is materially inconsistent with the annual accounts and consolidated financial statements. In this procedure we also consider the knowledge otherwise obtained during the audit and assess whether the information otherwise appears to be materially misstated.

If we, based on the work performed concerning this information, conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Board of Directors and the CEO

The Board of Directors and the CEO are responsible for the preparation of the annual accounts and consolidated financial statements and for ensuring that they give a fair presentation in accordance with the Annual Accounts Act and, concerning the consolidated financial statements, in accordance with IFRS as adopted by the EU, and the Annual Accounts Act. The Board of Directors and the CEO are also responsible for the internal control they deem necessary to prepare annual accounts and consolidated accounts that do not contain material misstatements, whether due to fraud or error.

In preparing the annual accounts and consolidated financial statements, the Board of Directors and the CEO are responsible for the assessment of the company's and the Group's ability to continue as a going concern. They disclose, as applicable, matters related to the ability to continue as a going concern and using the going concern basis of accounting. The going concern basis of accounting is, however, not applied if the Board of Directors and the CEO intends to liquidate the company, to cease operations, or has no realistic alternative but to do so.

The auditor's responsibility

Our goal is to achieve a reasonable degree of certainty as to whether the annual accounts and consolidated accounts as a whole do not contain any material misstatement, whether due to fraud or error, and to submit an audit report that contains our statements. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISA and generally accepted auditing standards in Sweden will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these annual accounts and consolidated accounts.

A further description of our responsibility for the audit of the annual accounts and consolidated financial statements is available on the website of the Swedish Inspectorate of Auditors: www.revisorsinspektionen.se/revisornsansvar. This description forms part of the audit report.

Recognition of property transactions

We refer to the Report of the Board of Directors, description of accounting policies in Note 1 and Investment properties in Note 12.

During the year, a number of property transactions took place, acquisitions to a value of SEK 3,491 million, which in respect of the amount and contractual terms were particularly important to consider in the audit.

In the case of each significant property transaction, we estimated that the accounting treatment was in accordance with Balder's accounting principles and IFRS.

For all significant acquisitions and divestments, we obtained and reviewed the underlying agreements and terms of entry. Furthermore, we examined the calculations, to ensure that pro forma statements, entry balances and, where appropriate, that settlement notes were in accordance with the agreement and that the transaction was recognised correctly.

We followed up to ensure that the property transactions were correctly recognised and disclosed in the annual accounts.

Report on other legal and regulatory requirements

Opinions

In addition to our audit of the annual accounts and consolidated financial statements, we have also performed a review of the administration of the Board of Directors and the CEO of Fastighets AB Balder (publ) for the year 2020 and the proposed appropriation of the company's profit or loss.

We recommend that the Annual General Meeting allocate the profit in accordance with the proposal in the Report of the Board of Directors and discharge the members of the Board and the CEO from liability for the financial year.

Basis for opinions

We conducted the audit in accordance with generally accepted auditing standards in Sweden. Our responsibility in this respect is described in further detail in the section entitled The auditor's responsibility. We are independent in relation to the parent company and the Group according to generally accepted auditing standards in Sweden and in other respects have fulfilled our professional ethical responsibilities according to these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions.

Responsibilities of the Board of Directors and the CEO

The Board of Directors is responsible for the proposal for allocating the company's profit or loss. In connection with a proposal for dividend, this involves, inter alia, an assessment of whether the dividend is defensible in view of the requirements imposed by the type, scale and risks of the operations on the size of the parent company's and the Group's equity, need to strengthen the balance sheet, liquidity and financial position generally.

The Board of Directors is responsible for the company's organisation and the administration of the company's affairs. This includes among other things continuous assessment of the company's and the Group's financial situation and ensuring that the company's organisation is designed so that the accounting, management of assets and the company's financial affairs otherwise are controlled in a reassuring manner. The CEO shall manage the ongoing administration according to the Board of Directors' guidelines and instructions and, among other things, take measures that are necessary to fulfil the company's accounting in accordance with the law and handle the management of assets in a reassuring manner.

The auditor's responsibility

Our objective concerning the audit of the administration, and thereby our opinion about discharge from liability, is to obtain audit evidence to assess with a reasonable degree of assurance whether any member of the Board of Directors or the CEO in any material respect:

  • has undertaken any action or been guilty of any omission which can give rise to liability to the company, or
  • in any other way has acted in contravention of the Swedish Companies Act, the Swedish Annual Accounts Act or the Articles of Association.

Our objective concerning the audit of the proposed appropriations of the company's profit or loss, and thus our opinion about this, is to assess with a reasonable degree of assurance whether the proposal is in accordance with the Swedish Companies Act.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with generally accepted auditing standards in Sweden will always detect actions or omissions that can give rise to liability to the company, or that the proposed appropriations of the company's profit or loss are not in accordance with the Swedish Companies Act.

A further description of our responsibility for the audit of the administration is available on the website of the Swedish Inspectorate of Auditors: www.revisorsinspektionen.se/revisornsansvar. This description forms part of the audit report.

Öhrlings PricewaterhouseCoopers AB, Skånegatan 1, 405 32 Gothenburg, Sweden, was appointed as Fastighets AB Balder (publ)'s auditor by the general meeting of shareholders on 8 May 2019 and has been the company's auditing company since 2009.

Gothenburg, 19 March 2021 Öhrlings PricewaterhouseCoopers AB

Bengt Kron Authorised Public Accountant Auditor in charge

Konstantin Belogorcev Authorised Public Accountant

COMMENTS BY THE CHAIRMAN OF THE BOARD

Christina Rogestam Chairman of the Board

Balder is a long-term property owner that assumes responsibility for the business's impact on not only the economy and the environment, but also on social issues. The company continues to work on the development of our own areas and has a high level of social engagement with a focus on security and well-being, children, young people and employment. Balder has several strategic partnerships linked to the company's social engagement, and every year engages a large number of people on work placements, summer workers and students to contribute to increased employment but also in order to develop the property industry.

By signing up to the Global Compact, Balder has adopted a stance and is working actively to follow the UN's ten principles for companies with regard to human rights, labour, the environment and anticorruption. In implementing this work, the company also strives to contribute to achieving the global sustainable development goals.

Focus on risks and opportunities

It is the task of Balder's Board of Directors, within the framework of current laws, rules and practice, to work on the long-term development of the company. This work includes, among other things, following up on the management team's operational activities and assuring themselves that everything is as it should be in the company.

One recurring topic of discussion for the Board is risk assessment, in which matters such as the state of the economy and the impact of interest rate trends on the company are analysed. Other matters discussed by the Board are the company's development in the form of access to competence, and how the company is working to contribute towards socially and environmentally sustainable social development.

Balder has also initiated work to analyse in greater depth risks associated with climate change. This work is being undertaken in accordance with the recommendations issued by the Task Force on Climate-Related Financial Disclosures (TCFD) and will continue to be developed in future.

A challenging year

The year has seen the company's operations challenged in many ways. For Balder, it is self-evident to maintain laws and rules and not to act unethically in any way. The past year has shown that the organisation has been built up in a way that is sustainable in the long term with clear backup structures. This provides peace of mind in the business's future progress, even if employees are missing temporarily or for longer periods.

The ongoing pandemic has also generated questions about the future development of Balder's markets, for example the office market. There has certainly been a significant increase in remote working during the year, and many analysts believe that this will to some extent also continue in future. This may affect demand for offices as they look at present.

Balder has already made changes in view of this fact and is working actively, for example, to identify new areas of application for offices and premises, and to present solutions that are suitable for new ways of working. Companies will still need offices, but it is possible that they will be designed differently, for example with larger areas for creative meetings and fewer separated workplaces for individual work.

All in all, the Board considers that Balder has dealt well with this year's challenges. All employees have contributed in various ways to meeting these challenges, and it is my feeling that the company is wellequipped to continue developing the business in the future.

CORPORATE GOVERNANCE REPORT

Corporate governance in Swedish listed companies is governed by a combination of written rules and practice, by which the owners directly and indirectly control the company. The rules and regulations have been developed through legislation, recommendations, the Swedish Corporate Governance Code and through self-regulation.

The Code is based on the principle comply or explain, which means that all rules do not always have to be complied with if there is a reason and it is explained. Some of the Code's principles are to create a good basis for exercising an active and responsible ownership role and to create a welladjusted balance of power between owners, the

Board and the executive management, which Balder views as a natural part of the principles for its operations. The Code also means that certain information should be made available on the company's website.

The Swedish Corporate Governance Code is administered by the Swedish Corporate Governance Board and is available on bolagsstyrning.se, where the Swedish model for corporate governance is also described. Balder applies the Code, which is intended to serve as part of the self-regulation within the Swedish business community. In the view of the Board, there are no deviations to report or explain.

The company's name is Fastighets AB Balder and the company is a public company (publ). The registered office of the company is in Gothenburg. The company's purpose shall be directly or indirectly, through wholly-owned or part-owned companies, to acquire, manage, own and divest real property and securities, and to conduct other associated activities.

The articles of association, which are available on Balder's website, contain, among other things, information regarding share capital, number of shares, class of shares and preferential rights, number of Board members and auditors as well as provisions regarding notice and agenda for the annual general meeting.

1. THE SHARE AND THE OWNERS

The Balder share is listed on Nasdaq Stockholm, Large Cap segment. At the year-end, the number of shareholders was approximately 22,000. Of the total share capital, 33% was owned by foreign owners. The principal owner of Fastighets AB Balder is Erik Selin Fastigheter AB, which owns 35.1% of the capital and 48.8% of the votes.

Balder's share capital as of 31 December 2020 totalled SEK 186,500,000, distributed among 186,500,000 shares. Each share has a quota value of SEK 1.00. The shares are distributed across 11,229,432 Class A shares and 175,270,568 Class B shares. Each Class A share carries one vote and each Class B share carries one tenth of one vote.

Each shareholder at the general meeting is entitled to vote for the number of shares held and represented by him/her. Further information regarding shares and share capital may be found on pages 6–9, Balder's share and owners.

Information to the stock market

Balder issues interim reports for the operations three times per year: as of 31 March, as of 30 June and as of 30 September. In addition to this, Balder's reports its full-year accounts on 31 December in its year-end report and publishes its annual accounts in good time before the AGM.

The annual accounts for 2020 are now available for distribution and on Balder's website. All documents, press releases and presentations in connection with reports are available at balder.se.

2. ANNUAL GENERAL MEETING

The Annual General Meeting (AGM) is the company's highest decision-making body in which the shareholders exercise their rights to decide on the affairs of the company. The Board and auditors of the company are elected by the AGM according to the proposal of the nomination committee. The annual AGM also passes resolutions, including on amendments of the articles of association, on change of the share capital and decides on the company's distribution of profits and discharge from liability for the Board and the CEO.

To participate in passing resolutions, the shareholder must be present at the meeting, either in person or by proxy. In addition, the shareholder must be registered in the share register at a certain date prior to the meeting and notification of participation must be given to the company within certain determined period. Shareholders who wish to have a special matter dealt with at the AGM can normally request this if the request is made in good time to Balder's Board of Directors prior the meeting. Due to the prevailing pandemic the 2021 AGM has been adapted with the support of temporary legal rules. The meeting will therefore be carried out without the possibility for shareholders to attend in person or by proxy. For further information see page 125.

Notice to attend the Annual General Meeting is given through the Official Swedish Gazette (Postoch Inrikes Tidningar) and on Balder's website. It shall also be announced in Svenska Dagbladet that notice has been given.

Resolutions at the general meeting are normally passed by a simple majority. In certain questions, the Swedish Companies Act prescribes that proposals must be approved by a larger proportion of the shares represented and cast at the meeting.

Annual General Meeting 2020

At the AGM on 11 May 2020 411 shareholders were represented, holding around 81% of total number of votes. Because of the measures taken by the company in connection with the ongoing pandemic, and with due consideration of the behavioural guidelines issued by government agencies, Chairman of the Board Christina Rogestam and Board members Fredrik Svensson and Sten Dunér were not present at the meeting, but were available by phone. The AGM adopted the financial statements for 2019 and discharged the Board and CEO from liability for the financial year 2019.

The following resolutions were passed at the AGM on 11 May 2020:

  • that no dividend shall be declared for the shareholders,
  • the Board shall, during the period until the next AGM has been held, be composed of five ordinary members without deputy members,
  • directors' fees of a fixed amount of SEK 560,000 should be paid to the Board, of which SEK 200,000 to the Chairman of the Board and SEK 120,000 to the other Board members who are not permanently employed by the company. The amount includes remuneration for committee work,

  • re-election of Board members Christina Rogestam, Erik Selin, Fredrik Svensson, Sten Dunér and Anders Wennergren. All members are elected up to and including the 2021 AGM. Christina Rogestam was re-elected as Chairman of the Board,

  • approval of the Board's proposed guidelines for remuneration to senior executives,
  • amendment to the articles of association regarding the deadline for registration for the meeting, and additions regarding postal voting and proxies,
  • a mandate for the Board, during the time until the next AGM, on one or more occasions, to decide on a new issue of Class B shares, with or without departure from the preferential rights of shareholders. The number of shares issues with the support of this mandate may be a maximum of 20,000,000 Class B shares. The new issue shall be used by the company for payment of acquisitions of properties or acquisition of shares or participations in legal entities that own property or in order to capitalise the company ahead of such acquisitions or to capitalise the company in other respects,
  • a mandate for the Board to decide on repurchase and transfer of the company's own shares for the purpose of adjusting the company's capital structure and for transferring own shares as payment or for financing of property investments.

Minutes taken at the AGM on 11 May 2020 are available on the company's website. The 2021 AGM will take place on 12 May at 16:00. For further information see page 125. Information concerning the AGM will be published at balder.se.

3. NOMINATION COMMITTEE

The AGM passes resolutions on the procedure for election of the Board and, when applicable, auditors. The 2020 AGM resolved that a nomination committee should be established before the 2021 AGM in order to submit proposals on the number of Board members, election of Board members including the Chairman of the Board and election of auditors and remuneration for Board members as well as for auditors. The nomination committee's proposals shall be announced no later than in conjunction with the notice convening the AGM. Shareholders are given the opportunity to submit nomination proposals to the nomination committee.

The 2020 AGM adopted the nomination committee's proposal that the nomination committee should be composed of one representative for each of the two largest shareholders or ownership spheres in addition to Lars Rasin, who represents the other shareholders. The chairman of the nomination committee shall be Lars Rasin. The names of the other two members and the owners they represent shall be announced no later than six months before the AGM. The nomination committee's term of office extends until a new nomination committee has been appointed. If Lars Rasin resigns as chairman of the nomination committee, the company's Chairman shall appoint a new chairman of the nomination committee until the next general meeting of the company.

The nomination committee ahead of the 2021 AGM is composed of Jesper Mårtensson, representing Erik Selin Fastigheter AB, Rikard Svensson, representing Arvid Svensson Invest AB, and chairman Lars Rasin.

The nomination committee has decided to propose the re-election of the current Board members Christina Rogestam, Fredrik Svensson, Sten Dunér,

Anders Wennergren and Erik Selin. It is proposed that Christina Rogestam be re-elected as Chairman of the Board.

4. AUDITORS

The company's annual accounts and the administration of the CEO and Board are reviewed by the company's auditor, who submits an audit report for the financial year to the AGM. The auditor reports to the Board on his audit plan for the year and his views on the accounts, annual accounts and administration.

At the 2019 AGM, Öhrlings Pricewaterhouse-Coopers AB was elected as the company's auditor, with Bengt Kron as auditor in charge, for the period until the end of the 2023 AGM.

5. BOARD OF DIRECTORS

The Board of Directors is elected by the AGM and according to the articles of association shall consist of at least three and at most seven members. The members are elected at the AGM for the period until the end of the first AGM that is held after the members were elected. During 2020, the Board was composed of five members and is responsible for the company's organisation and administration (more information about the company's Board is available on page 94 and at balder.se). The Board works according to an established formal work plan with instructions concerning division of responsibilities between the Board and the CEO.

New Board members receive an introduction to the company and its operations and participate in the stock exchange's training according to the stock exchange agreement. The Board subsequently receives continual information, including about regulatory changes and such issues concerning the operations and the Board's responsibility in a listed company.

The rules of the Swedish Companies Act apply to resolutions in the Board, to the effect that more than half of the members present and more than one third of the total number of members must vote for resolutions. The Chairman has the casting vote if there is no majority.

The Board's work is governed by the Swedish Companies Act, the articles of association, the Code and the formal work plan that the Board has adopted for its work. Balder's Board of Directors is composed of persons who possess broad experience and competence from the property sector, business development, sustainability issues and financing. Most of the Board members have experience of board work from other listed companies.

Both of the major owners Erik Selin Fastigheter AB and Arvid Svensson Invest AB are represented on the Board through Erik Selin and Fredrik Svensson. Balder's authorised signatories, apart from the Board, are any two jointly of Chairman Christina Rogestam, CEO Erik Selin or any one of them in combination with Director of Economy Eva Sigurgeirsdottir or Head of Personnel and Administration Petra Sprangers.

The Board's duties and responsibilities

The Board's overriding duty is to manage the affairs of the company on behalf of the owners so that the owners' interest in a good long-term return on capital is satisfied in the best possible way. The Board has responsibility for ensuring that the company's organisation is appropriate and that the operations are conducted in accordance with the articles of association, the Companies Act and other applicable laws and regulations and the formal work plan of the Board. The Board shall perform the board work collectively under the leadership of the Chairman.

The Board shall also ensure that the CEO fulfils his duties in accordance with the Board's guidelines and directions. These may be found in the instructions to the CEO drawn up by the Board. The Board members shall not be responsible for different lines of business or functions. Matters relating to compensation and remuneration for the CEO are prepared by the Chairman and presented to the rest of the Board prior to decision.

The Board's duties include, but are not limited to, the following:

  • establishing business plans, strategies, significant policies and goals for the company and the Group that the company is parent company of,
  • determining the company's and Group's overall organisation,
  • appointing and dismissing the CEO,
  • ensuring that there is a functioning reporting system,
  • ensuring that there is satisfactory control of the company's and Group's compliance with laws and other regulations that apply to the operations,
  • approving a new formal work plan and instruction to the CEO annually,
  • approving financial reporting in the form of interim reports, year-end reports and annual accounts that the company must publish,
  • ensuring that the company has a functioning approvals list and approvals process,
  • approving necessary guidelines for the company's conduct in society with the aim of ensuring long-term value creation and a sustainability perspective,
  • ensuring that the company has an appropriate system for follow-up and control of the risks associated with the company and its operations.

Chairman of the Board

It is the duty of the Chairman to ensure that the Board's work is conducted effectively and that the Board fulfils its duties. The duties of the Chairman thus include, but are not limited to:

  • organising and leading the Board's work and creating the best possible basis for the Board's work,
  • ensuring that the Board's work occurs in accordance with the provisions of the articles of association, the Companies Act and the formal work plan of the Board,
  • monitoring that the Board's decisions are executed effectively,
  • continually monitoring the company's development through contact with the CEO and acting as a discussion partner,
  • ensuring that the Board members, through the agency of the CEO, receive sufficient information and decision data for their work,
  • making sure that each new Board member is given a proper introduction upon joining the Board.

The formal work plan of the Board of Directors

The Board adopts a formal work plan for the Board's work each year. This formal work plan describes the duties of the Board and the division of responsibilities between the Board and the CEO. The formal work plan also describes what matters shall be dealt with at each board meeting and instructions regarding the financial reporting to the Board. The formal work plan also prescribes that the Board shall have an audit committee and a remuneration committee. The Chairman of the Board shall serve as the chairman of the committees.

Board meetings

The Board shall, in addition to the statutory meeting, hold board meetings on at least four occasions

annually. The CEO and/or CFO shall as a general rule present a report to the Board. The company's employees, auditor or other external consultants shall be called in to board meetings in order to participate and report on matters as required. The Board has a quorum if more than half of the Board members are present. The Chairman has the casting vote in the event that there is no clear majority.

The work of the Board

Balder's Board held 18 board meetings during 2020, one of which was the statutory meeting. Board meetings are held in connection with the company's reporting. Matters of significant importance to the company are dealt with at each ordinary board meeting, such as acquisition and divestment of properties, investments in existing properties and financing questions.

In addition, the Board is informed about the current business situation in the rental, property and credit markets. The regular matters dealt with by the Board in 2020, included acquisition strategies, capital structure and financing position, sustainability work, common corporate policies and the formal work plan for the Board.

Composition of the Board

The Board, for its work in Balder's Board of Directors, shall have appropriate experience and competence for the operations that are being conducted in order to be able to identify and understand the risks that can arise in the business and the rules and regulations governing the operations that are being conducted.

The composition of the Board shall be characterised by diversity and breadth in terms of the chosen members' competencies, experience, age, gender or ethnic background. The diversity policy applied

by the nomination committee follows item 4.1 of the Code. It is the duty of the nomination committee to consider the policy, with the objective of achieving an appropriate composition in the Board.

When electing new Board members, the suitability of the individual members shall be examined with the aim of achieving a Board with a combined level of expertise that is sufficient for ensuring appropriate governance of the company.

The composition of the Board provides a good basis for well-functioning Board work with a good spread among individual members that represents diversity according to the Board's diversity policy.

Evaluation of the Board's work

The intention of the evaluation is to further improve the Board's working methods and efficiency, and to clarify the main direction of the Board's future work. The evaluation also serves as a tool for ensuring the right competence and knowledge in the Board. In connection with the annual evaluation, Board members are asked, based on their own perspective, to discuss various areas relating to the Board's work

with other Board members. These conclusions are documented in a report.

The areas discussed and evaluated in 2020 related to the Board's composition, competence, efficiency and focus areas going forward. The areas covered by the Board evaluation may vary from one year to another to reflect the development of the Board's work. The evaluation showed constructive board work conducted in a positive spirit.

Remuneration committee

The remuneration committee has a preparatory function in relation to the Board in questions regarding principles for remuneration and other terms of employment for the CEO and other senior executives. The remuneration committee shall monitor and evaluate the application of the guidelines for remuneration and levels of compensation to senior executives that the AGM has determined and shall also draw up proposals for new guidelines for principles of remuneration and other terms of employment. Before the resolution of the AGM, at least every four years the Board shall propose new prin-

Composition of the Board of Directors, number of meetings and attendance

Name Elected Independent1) Board meetings Audit committee Remuneration
committee
Christina Rogestam 2006 Yes 18/18 1/1 1/1
Erik Selin 2005 No 18/18
Fredrik Svensson 2005 No 17/18 1/1 1/1
Sten Dunér 2007 Yes 18/18 1/1 1/1
Anders Wennergren 2009 Yes 18/18 1/1 1/1

1) The independence is based on both independence in relation to the company and the company management as well as to larger shareholders (>10%).

ciples for remuneration and other terms of employment for the CEO and other senior executives. Based on the resolution of the AGM, it is the duty of the remuneration committee to decide on remuneration to the CEO and other officers. The Board shall be entitled to deviate from the guidelines if there are special reasons in an individual case to justify this. The remuneration committee is composed of all independent Board members and shall meet at least once every year. For further information see Note 4, Employees and staff costs.

Audit committee

The audit committee shall be responsible for preparing the Board's work by quality-assuring the company's financial reporting, assisting the nomination committee in drawing up proposals for auditors and their fees and ensuring a qualified independent audit of the company.

The audit committee shall meet the company's auditor at least once per calendar year and have the opportunity to meet with the auditors without any members of company management being present. During 2020, the audit committee, which was composed of all independent Board members, met the company's auditor on one occasion and received an audit plan for 2020 and a report on the audit performed.

Disqualification

Board members or the CEO may not deal with issues concerning agreements between themselves and the company or Group. Nor may they deal with issues regarding agreements between the company and a third party, if they have a material interest that can conflict with that of the company. Lawsuits or other

actions are on a par with the agreements referred to above. Where applicable, it is incumbent on the Board member or CEO to disclose if a disqualification situation would arise.

6. CEO AND MANAGEMENT

The CEO is responsible for day-to-day administration pursuant to the guidelines and policies adopted by the Board. The CEO shall report on Balder's development to the Board and prepare the order of business at Board meetings according to an approved agenda. The CEO shall ensure that the required material is compiled and distributed to the Board members prior to board meetings.

The management team normally meets once every month with a standing agenda, including property transactions, finance and general management issues. Group Management consists of six persons and includes resources such as the CEO, accounting, finance, management, property transactions and HR. More information about the company's CEO and management team may be found on page 95.

INTERNAL CONTROL IN RESPECT OF FINANCIAL REPORTING

The Board is responsible for internal control under the Swedish Companies Act and under the Code. This description has been prepared in accordance with the Swedish Annual Accounts Act and the Code and is thus limited to internal control over financial reporting. Financial reporting refers to interim reports, year-end reports and annual reports. The description does not constitute a part of the formal annual accounts.

Balder's internal control follows an established framework, Internal Control – Integrated Framework, which consists of five components. The components are control environment, risk assessment, control activities, information and communication, and follow-up.

Control environment

The control environment constitutes the basis for the internal control over financial reporting. A good control environment is built on clearly defined and communicated decision-making procedures and guidelines between different levels of the organisation, which together with the corporate culture and shared values establish the basis for managing Balder in a professional manner.

Balder's internal control is based on a decentralised organisation with 1,362 properties, each with its own profit centre, which are administered from regional offices. To support the control environment and provide necessary guidance to different officers, there are a number of documented governing documents such as internal policies, guidelines, manuals, the formal work plan of the Board, decision-making procedures, rules for approvals as well as accounting and reporting instructions. Governing documents are updated as required in order to always reflect applicable laws and rules.

Risk assessment

The focus is on identifying the risks that are considered most significant in Balder's income statement and balance sheet items in the financial statements and what measures can reduce these risks. Risk management is integrated into the above-mentioned document for the control environment.

Different methods are used to measure and minimise risks and to ensure that the risks that the company is exposed to are handled according to Balder's current policies and rules. The Board conducts an annual review of the internal control in accordance with the formal work plan of the Board. The risk assessment is continually updated to cover changes that have a material impact on the internal control over financial reporting.

The most significant risks that have been identified in connection with the financial reporting are errors in the accounts and in the valuation of the property portfolio, deferred tax, interest-bearing liabilities, refinancing, tax and value added tax as well as the risk of fraud, loss or embezzlement of assets.

Control activities

A number of control activities are built-in to ensure that financial reporting provides a true and fair view at each point in time. These activities involve different levels in the organisation, from the Board and company management to other employees.

The control activities are aimed at preventing, discovering and correcting errors and deviations. The activities consist of approval and reporting of commercial transactions, follow-up on decisions and approved policies of the Board, general and application-specific IT controls, checking of external counterparties and follow-up on results at various levels in the organisation.

Other activities are follow-up on reporting procedures, including the annual accounts and consolidated financial statements and their conformity with applicable rules and regulations, approval of reporting tools, accounting and valuation principles, as well as power of attorney and authority structures.

Balder's regional offices participate in basic control, follow-up and analysis in each region. To guarantee the quality of the regions' financial reporting, an evaluation is performed in conjunction with the Group's controllers.

Follow-up at regional level combined with the controls and analyses at Group level are an important part of the internal control, to make sure that financial reporting essentially does not contain any errors.

Information and communication

Balder has determined how information and communication in respect of the financial reporting should occur so that the company's information disclosure should take place in an effective and correct manner. Balder has guidelines for how financial information should be communicated between management and other employees.

Guidelines, updates and changes are made available and known to the employees concerned by means of oral and written information and on Balder's intranet. The Board receives further information about risk management, internal control and financial reporting from meetings and reports from the company's auditors.

Follow-up

There is an appropriate process for continual followup and annual evaluation of the observance of internal policies, guidelines, manuals and codes and of

the appropriateness and functionality of the established control activities.

Different methods are used to measure and minimise risks and to ensure that the risks that the company is exposed to are handled according to Balder's current policies and rules. The Group's accounting and controller function has the day-today responsibility for ensuring follow-up and reporting to the company management of possible shortcomings. Follow-up takes place at both property level and at Group level.

The Board regularly evaluates the information submitted by company management and the auditors. The company's auditors report their observations from the audit and their opinion about internal control over financial reporting on at least one occasion each year.

Need for internal audit

Balder has a decentralised organisation that manages 1,362 properties from regional offices. Financial operations and the finance function for the entire Group are conducted in the parent company. There is a controller function in the parent company which, together with controllers in Denmark and Finland, monitors the administration of the regional offices and financial operations in the parent company. Balder's size and decentralised organisation together with the controller function in the parent company mean that a special internal audit function is not justified at present.

AHEAD OF THE 2021 AGM

Ahead of the AGM on 12 May 2021, the Board proposes:

  • no share dividend to be declared,
  • decision approving the report regarding remuneration of senior executives,
  • guidelines for remuneration of senior executives,
  • a renewed mandate for the Board, before the next AGM, on one or more occasions, to resolve on the new issue of Class B shares corresponding to no more than 20,000,000 shares. It shall be possible to subscribe for the shares in cash, in kind or through right of set-off,
  • a mandate for the Board, before the next AGM, to repurchase and transfer Class B shares in Balder equivalent to no more than 10% of all shares in the company.

Ahead of the AGM on 12 May 2021, the nomination committee proposes:

  • re-election of the current Board members Christina Rogestam, Fredrik Svensson, Sten Dunér, Anders Wennergren and Erik Selin. It is proposed that Christina Rogestam be re-elected as Chairman of the Board,
  • it is proposed to pay directors' fees of SEK 200,000 to the Chairman of the Board and SEK 120,000 to the other Board members who are not permanently employed by the company. The amounts include remuneration for committee work,
  • that the general meeting resolves that the nomination committee shall be composed of one representative for each of the two largest shareholders or ownership spheres in addition to Lars Rasin, who represents the other shareholders. The chairman of the nomination committee shall be Lars Rasin. The names of the other two members and the owners they represent shall be announced no later than six months before the AGM. The nomination committee's term of office extends until a new nomination committee has been appointed.

Fredrik Svensson Board member

AUDITOR'S STATEMENT REGARDING THE CORPORATE GOVERNANCE REPORT

To the Annual General Meeting of Fastighets AB Balder (publ), corporate identity no. 556525-6905

Engagement and allocation of responsibility

The Board of Directors is responsible for the Corporate Governance Report for 2020 on pages 88–93 and for ensuring that it is prepared in accordance with the Annual Accounts Act.

The focus and scope of the review

Our examination has been conducted in accordance with FAR's auditing standard RevR 16 The auditor's examination of the corporate governance statement. This means that our review of the corporate governance report has another aim and direction, and is substantially less exhaustive in scope,

than an audit conducted in accordance with International Standards on Auditing (ISA) and other generally accepted auditing standards in Sweden. We believe that this review provides us with a sufficient basis for our opinion.

Opinion

Gothenburg, 19 March 2021 Öhrlings PricewaterhouseCoopers AB

A corporate governance statement has been prepared. Disclosures according to Chapter 6 Section 6, second paragraph, items 2– 6 of the Annual Accounts Act and Chapter 7 Section 31, second paragraph of the same Act are consistent with the annual accounts and consolidated financial statements and are in compliance with the Annual Accounts Act.

Gothenburg, 18 March 2021

Christina Rogestam Chairman of the Board

Sten Dunér Board member

Anders Wennergren Board member

Erik Selin Board member and CEO

Bengt Kron Authorised Public Accountant Auditor in charge

Konstantin Belogorcev Authorised Public Accountant

BOARD OF DIRECTORS

Sten Dunér Board member since 2007

Education and experience B.Sc. (Economics).

Garbo and Humlegården. Shareholding in Balder No shareholding in Balder.

Born 1951

Chairman of the Board since 2006

Education and experience B.A. Social Studies.

Born 1943

Christina Rogestam

Former President and CEO of Akademiska Hus AB. Chairman of the Board at Länsförsäkringar Liv. Board member at

Shareholding in Balder 20,000 Class B shares.

Anders Wennergren

Board member since 2009

Born 1956

Education and experience Bachelor of Law.

Lawyer and partner at Advokatfirman Glimstedt.

Shareholding in Balder 210,000 Class B shares held via company.

Fredrik Svensson Board member since 2005 Erik Selin Board member since 2005

Born 1961

Education and experience B.Sc. (Economics).

Chairman of the Board at Arvid Svensson Invest AB, Board member at SBB, Samhällsbyggnadsbolaget, Chairman of the Board at ABB-Gymnasiet.

Shareholding in Balder

2,915,892 Class A shares and 13,542,540 Class B shares, all held via company.

Born 1967

Education and experience Business school economist.

CEO of Fastighets AB Balder, Chairman of the Board at Brinova Fastigheter AB, K-fast Holding AB and Collector AB, Board member Hexatronic Group AB, I.A. Hedin Bil AB and Ernström & Co AB.

Shareholding in Balder

10,500 Class B shares, and 8,309,328 Class A shares and 57,200,400 Class B shares held via company.

Auditor

Öhrlings PriceWaterhouseCoopers AB. Auditor in charge: Bengt Kron, born 1965. Öhrlings PriceWaterhouseCoopers AB was elected at the AGM held on 8 May 2019 for the period until the AGM in 2023.

MANAGEMENT

DETAILED SUSTAINABILITY INFORMATION

In this section additional information about Balder's sustainability work is presented, including goals, key ratios and information about the materiality analysis and the company's analysis on climaterelated risks. Included is also the GRI index and information to the company's Communication on Progress to the UN Global Compact.

STAKEHOLDERS AND MATERIAL TOPICS

Continuous dialogues with stakeholders combined with regular reviews of the materiality analysis define which topics are the focus of Balder's work on sustainability.

The main groups of stakeholders defined comprise Customers, Employees, Owners and Society. The latter group includes, for example, government agencies and municipal authorities, business partners and suppliers, and the Tenants' Association.

Dialogues with stakeholder groups take place

in many different forums. Dialogues with customers take place, for example, both on an ongoing basis and in connection with the CSI survey that is conducted every one and a half to two years. All employees have employee appraisals with their line manager at least once a year.

Different topics are important for each stakeholder group, and these different topics have been weighted to contribute to the materiality analysis that forms the basis of Balder's work on sustainability and this report.

EXAMPLES OF MATERIAL TOPICS

CUSTOMERS

Well-being and security Development of homes/premises – Material selection – Energy consumption Influence Service

CHANNELS FOR DIALOGUE

Tenants' meetings Tenants' Association Dialogue meetings

OWNERS

Financial stability Yield Customer satisfaction Certification of properties

CHANNELS FOR DIALOGUE

Financial statements Meetings with analysts and investors

Work environment Diversity Social engagement

Secure employment CHANNELS FOR DIALOGUE

EMPLOYEES

Employee appraisals Suggestion box Intranet Status meetings

SOCIETY

Long-term, ethical relationships Urban development Environmental impact – Waste and recycling

  • Transport operations Communication

CHANNELS FOR DIALOGUE

Website and social media Urban planning processes Dialogue meetings

Material topics

  • Minimise use of energy, water and chemicals
  • Select renewable energy sources and less harmful materials
  • Minimise waste and increase degree of sorting

Policies

• Sustainability Policy

Goals

  • Energy efficiency improvement 2% per sq.m. per annum
  • Reduced water use 2% per sq.m. per annum
  • All newly produced properties must fulfill the Miljöbyggnad Silver rating or equivalent

Key ratios

  • Energy use
  • Water use

GRI indicators

302-1 305-2
CRE1 307-1
CRE2

UN's global sustainable development goals

Material topics

  • Security and well-being in the company's property portfolio
  • Responsible, efficient transport operations

Policies

  • Sustainability Policy
  • Code of Conduct

Goals

  • Create jobs in the property management organisation for young people
  • Implement initiatives for sustainable travel to and from the properties

Key ratios

  • Number of jobs for young people per annum
  • Number of car and bike pools at new properties per annum

GRI indicators

305-1

305-2

UN's global sustainable development goals

Material topics

  • Good, ethical external relationships
  • Responsible suppliers

Policies

  • Code of Conduct
  • Sustainability Policy

Goals

  • No reported incidents of corruption
  • No reported incidents of discrim
  • ination

Key ratios

  • Number of reported incidents of corruption
  • Number of reported incidents of discrimination

GRI indicators

205-2 205-3 419-1

UN's global sustainable development goals

97 FASTIGHETS AB BALDER ANNUAL REPORT 2020

PROPERTIES AREAS PARTNERSHIPS COWORKERS FINANCES

Material topics

  • Satisfied employees and a good work environment
  • Responsible, efficient travel

Policies

  • Health and Safety Policy
  • Code of Conduct
  • Sustainability Policy

Goals

  • All employees must be trained in the Code of Conduct
  • Encourage environment-friendly travel

Key ratios

  • Number of employees trained in the Code of Conduct
  • Number of business trips made by train instead of air, and estimated saving in emissions

GRI indicators

  • 404-3
  • 405-1
  • 406-1

UN's global sustainable development goals

Material topics

  • Continued customer satisfaction
  • Long-term financial stability and profitability

Policies

  • Code of Conduct
  • Sustainability Policy

Goals

  • Financial goals, see page 21
  • Improvement in CSI results

Key ratios

  • CSI
  • Economic performance

GRI indicators

201-1

UN's global sustainable development goals

KEY RATIOS

Employees

Gender distribution by age group, number Number of employees, female/male distribution, number

Employees per employment form, number

Other employee information

2020 2019
Number of summer
workers
261) 56
Number of work
placements
26 20
Number of reported cases
of corruption
0 0
Number of reported cases
of discrimination
0 0

1) In addition to the summer workers employed by Balder the company provided jobs for a large number of young people employed by municipalities throughout Sweden during the summer of 2020.

Energy and water

2020 2019 2018
Total energy use)
degree day-based, kWh
463,053,880 433,907,253 452,292,474
Energy use)
kWh/sq.m. degree day-based
116.90 126.92 145.21
Water use m3/sq.m. 1.04 1.07 1.19

1) Refers to electricity, heating and district cooling.

Wind power production Emissions
2020 2019 2018 2020 2019
Total, MWh 21,047 18,274 15,816 Scope 1, tonnes 10.58 11.37
Scope 2, tonnes 13,870.25 14,715.85
Intensity kg/sq.m. 6.57 8.05

Goals and outcome

Goal Outcome
Properties
Energy efficiency improvement 2% per sq.m. per annum During the year the energy use decreased by 7.9%
Reduced water use 2% per sq.m. per annum During the year the water use decreased by 2.8%
All newly produced properties must fulfill the
Miljöbyggnad Silver rating or equivalent
100% of the properties completed in Sweden during the year were certified
according to Miljöbyggnad Silver.
Areas
Create jobs in the property management organisation
for young people
During the year 26 summer workers were employed by Balder. In addition to
this Balder provided jobs for a large number of young people employed by
municipalities in different parts of the country, when the municipalities could
not provide jobs under the on-going pandemic.
Implement initiatives for sustainable travel to and
from the properties
Several charging stations for electric cars have been installed in Balders
properties during the year, as well as car pools with electric cars at newly
constructed properties.
Partnerships
No reported incidents of corruption During the year 0 incidents of corruption have been reported.
No reported incidents of discrimination During the year 0 incidents of discrimination have been reported.
Coworkers
All employees must be trained in the Code of Conduct Training in the Code of Conduct has started in the organisation, and the num
ber of coworkers that has completed the training will be followed up in 2021.
Encourage environment-friendly travel During 2020 business travel has decreased heavily following the on-going
pandemic, why it is difficult to determine how large the proportion of fewer
and more environment-friendly trips following Balders efforts would have
been in a normal year.
Finances
Finacial goals For outcome, see page 21.
Improved CSI result During the year no new CSI poll has been made among existing tenants, only

in separate newly produced projects, see page 18.

GOVERNANCE OF SUSTAINABILITY WORK

Sustainability is integrated in Balder's day-to-day operations and is governed by the general sustainability policy and the Code of Conduct. These policies interact with the company's business concept, goals and other policies for governing the company in a way that is sustainable in the long term. The sustainability policy includes the company's environmental policy.

The Board is ultimately responsible for the company's Code of Conduct and sustainability policy, and decides on these issues. The company's management team is responsible for implementing policies and ensuring that they are followed. The CEO and management also have ultimate responsibility for the economic performance, and for ensuring that the company's business is conducted in an ethically correct manner. Managers from the property management organisation and property development are responsible for ensuring that the material environmental topics are taken into account in the day-today operations, as well as topics relating to social sustainability in the company's areas.

All managers with staff responsibility together with HR, are responsible for maintaining a good working environment with satisfied employees. The company has a sustainability manager who coordinates the internal work, as well as the external communications and reporting.

The Code of Conduct and related policies are based on international guidelines such as the UN Global Compact's principles for human rights, labour, the environment and anti-corruption, the UN Guiding Principles on Business and Human Rights, the ILO's Core Conventions and the OECD's Guidelines for Multinational Enterprises. Each employee is responsible for observing the Code of Conduct. The company and those with staff responsibility are responsible for ensuring that all employees understand, can obtain advice and act in accordance with the Code of Conduct.

Compliance with and knowledge of the Code of Conduct and other policies are followed up annually and have been integrated into the company's internal training system. The content of these documents is reviewed annually, in order to correspond with the company's operations and material topics. No cases of corruption have been reported during the year, nor have any cases of infringements of laws and regulations.

Balder strives to create a good work environment based on gender equality and diversity, where the privacy of employees is safeguarded. All forms of harassment are forbidden, as is discrimination. The company distances itself from all forms of forced labour and safeguards employees' freedom of expression and right of association. There were no cases of discrimination reported during the year. There are 363 employees with collective agreements in the Balder Group.

For Balder's wholly-owned subsidiaries, the same sustainability policy and environmental goals apply as for Fastighets AB Balder. For SATO Oyj, see the company's website, sato.fi. For the environmental policies and environmental goals of other subsidiaries and associated companies, see each company's website. For more information about Balder's subsidiaries, see Note 27, Participations in Group companies.

RESPONSIBILITY AND BOUNDARIES

Balder's responsibility primarily covers its own operations, but the company tries as far as possible to contribute to a positive development in a wider perspective, by such means as imposing requirements on suppliers and developing sustainable urban districts and areas.

In order to continue operating and growing, the company depends on long-term economic stability and profitability. This is achieved through solid management of the company's resources, but also depends on satisfied customers that want to continue renting homes and premises from Balder.

For Balder, it is very important to take responsibility for more than just the buildings the company owns, since this creates significant value. This is achieved by promoting security and well-being in the areas where the properties are located. It is also accomplished by maintaining good and ethical external relationships, and also through collaboration with other parties in order to develop districts and areas together. In the same way, the relationship with suppliers is very important, and Balder has zero tolerance of corruption and bribery.

Buildings have a large environmental impact in society, why this is a key issue for Balder. Balder supports the precautionary principle with regard to environmental risks. By minimising use of energy, water and chemicals, Balder aims to reduce the company's environmental impact. For the same reason, the company aims as far as possible to choose renewable energy sources and less hazardous materials, and to apply the precautionary principle in material selection and handling chemicals.

In order to contribute to the circular economy, the company also aims to minimise the volume of waste, and to increase recycling whenever possible. Both in property management and new construction, the company depends on transport operations, and continual work is in progress to optimise these as much as possible to also reduce the environmental impact from these.

It is just as important to work to ensure people's well-being in the company's properties by offering a good indoor environment. Balder is subject to environmental legislation in many areas and works actively to meet the requirements in both new production and in day-to-day management. Some of the company's focus areas are energy, waste management, indoor climate and potential environmental risks such as radon, PCB and asbestos.

Balder does not conduct any operations that require permits according to the Environmental Code. There is, however, a duty to report in respect of refrigerants. Balder's tenants may, however, conduct business operations that require permits or have a duty to report. There were no registered breaches of environmental legislation and regulations during the year.

Calculation methods

The figures reported for energy use refer to the parent company and wholly owned subsidiaries and properties in Sweden and Denmark owned by Fastighets AB Balder throughout the financial year 2020, and SATO's properties in Finland. Other properties owned by partly owned companies and associated companies are not included. Water intensity refers to use in Swedish properties.

Balder's environmental data is based on measurement with the main meters available for each type of media on the properties. These meters report actual energy used in the property. In cases where the tenant is responsible for all the installations and purchases, this is not included in the total.

Consumption of media is compiled by collection of data from Balder's central energy monitoring

system and financial systems. A new energy monitoring system has been installed in recent years, and the quality of the data collected will continuously be refined, to improve follow-up. The data reported is compiled consumption data degree day-corrected.

Balder reports emission data for Scope 1 and 2. Scope 1 includes data from own operating cars, based on standard calculation of actual consumption and emission data from suppliers. Scope 2 includes electricity, heating and district cooling, based on actual consumption and emission factors from the company's supplier of energy monitoring services and energy suppliers. The emission reporting includes operations in Sweden and Denmark. For SATO's emissions, see the company's annual report, see sato.fi.

All electricity purchased for the properties in Sweden and Finland is renewable, as is most of the electricity in Denmark.

Balder strives to that to such an extent as possible report key figures related to the significant issues identified, and also to the areas defined in the Annual Accounts Act. Several areas will be updated in the future both regarding governance and followup. This applies to, for example the use of energy and water, as well the reporting of emissions.

For human rights, issues concerning increased diversity, development of areas and districts as well as a fair rental process are identified as most material. Governance, risks and indicators for follow-up in this area will be developed in the future. The same applies to other social issues, staff, ethics and anti-corruption.

The risk analysis also continues to develop, among other things to ensure that it covers both potential impact on Balder and risks where Balder's business can have an impact.

RISKS AND OPPORTUNITIES

Management and development of properties, just like all business activity, is associated with risks and these must be handled responsibly and in a controlled manner. Balder works continually on identifying and reducing the risks that can impact operations. Handled in the right way, risks can generate opportunities and create value.

During the year, Balder also started an evaluation of risks and opportunities that can arise as a consequence of climate change. This evaluation also included an initial analysis of the organisation's resilience. This work will be supplemented in future by detailed analyses, including scenario-based analyses, to clarify which effects climate change might have for the company and the business.

To evaluate risks and opportunities linked to climate change, Balder follows the recommendations issued by the Taskforce on Climate-related Financial Disclosures (TCFD) and is working to implement the recommendations in the areas included:

  • Governance
  • Strategy
  • Risk management
  • Goals and metrics

Governance and strategy

Governance of the risk process takes place at an overarching level by the Board of Directors and at an operational level by the CEO, management and other employees.

The sustainability function (including energy managers) are responsible for identifying and assessing climate-related risks and opportunities, as well as suggested measures to manage these (e.g. energy efficiency improvement measures). This is done in collaboration with the finance function and those responsible for property development and management.

The Board deals with climate-related issues at least once a year, and if something special occurs

*) Goals and metrics have not been produced.

that requires action in addition to these instances. Before these meetings, the Board receives a report from the sustainability manager/CEO about climate-related issues and other sustainability-related issues.

Managing risks

When new construction takes place, risks of issues such as floods are dealt with in the planning process, in which municipalities and county administrative boards are involved, specifying tough demands for investigations and impact assessments. Analyses need to be performed for existing properties based on, for example, geographical location, type of property, year of construction, etc. When analysing risks, they are divided into the short, medium and long term, which in Balder's analysis corresponds to 5, 25 and 50 years respectively.

Continued work

Balder will continue to work with risks and opportunities in accordance with the TCFD's recommendations. This means above all continued work to identify goals and metrics, as well as detailed analysis of risks with the aid of scenariobased analyses. The objective is also to be able to evaluate the economic consequences that different scenarios and risks may give rise to.

For more information about risks and opportunities, see pages 42–45.

Work undertaken so far in accordance with the TCFD's recommendations has identified the following risks and opportunities:

Risks

  • Increased energy costs, for example as a result of increased emission limits.
  • Official decisions, for example increased taxes and increased requirements for transition.
  • Increased property costs, for example to adapt properties to meet stricter regulations on energy types and emissions, and to replace old technology.
  • Increased insurance costs for properties in risk zones.

Opportunities

  • Less energy use in more efficient buildings.
  • Increased use of energy sources with lower emissions.

  • Increased requirements for reporting of emissions.

  • Increased costs of replacing fossil fuels in operational vehicles.
  • Uncertainty about market development and increased requirements or changed preferences from customers.
  • Physical effects on properties, e.g. floods, raised sea levels, heatwaves and other extreme weather.
  • Increased production of own renewable energy, e.g. solar panels.
  • More efficient transport operations.
  • Increased recycling.

ABOUT THE REPORT

Balder has prepared a sustainability report for the Group in accordance with Chapter 6 of the Swedish Annual Accounts Act. The sustainability report is included in this document, which also contains the company's statutory Annual Report for 2020. The sustainability report also constitutes the company's Communication on Progress, i.e. the annual report to the UN's Global Compact.

The sustainability report consists of pages 23–28, 42–45 and 96–102. Specific areas in the statutory sustainability report are shown in the table below. The auditor's statement on the statutory sustainability report may be found on page 105.

Balder's sustainability report follows the financial year and is published annually. The previous report was published in March 2020. In this years report key ratios have been updated to also include the properties in Denmark and Finland (the latter consisting of Balders's subsidiary SATO Oyj). For comparability, previous years' key ratios have also been updated. Otherwise, no significant changes occurred in operations during the reporting period. This is Balder's fourth sustainability report and it is prepared in accordance with GRI Standards, Core option. The report has not been reviewed by a third party.

Area in Annual Accounts Act UNGC principle Example of Balder's work Page reference
Material topics Annual review of materiality analysis, and ongoing stakeholder dialogues. 24–25, 96 –97
Environment 7, 8, 9 Structured work in order to minimise use of energy, water and chemi
cals, reduce emissions from transport operations and minimise waste.
25–27, 100
Social conditions Initiatives to create vibrant and safe areas and districts where tenants
and others are happy and remain.
25–27, 100
Employees 3, 4, 5, 6 Attract and retain competent employees and continue to develop them.
Combat all forms of discrimination, forced labour and the like.
28, 99
Human rights 1, 2 Continued work for increased diversity both internally and externally,
development of areas and city districts and a fair letting process.
25–28, 99 –100
Anti-corruption 10 Continued training in the Code of Conduct and policies, and follow-up
on suppliers and partners.
28, 99 –100
Business model The processes for management, property development and transac
tions are continually refined, in order to create further value for the com
pany's stakeholders.
11, 14–15
Policies and follow-up Internal training in the Code of Conduct and other policies. Whistleblow
ing function for the reporting of possible breaches.
28, 45, 99
Risks Continuous analysis of risks and action plans for handling these. Balder
has identified risks in the areas environment, social conditions and
employees, as well as ethics and corruption. Development and analysis
has also started in accordance with TCFD.
42–45, 101

GRI INDEX

GRI Standard Disclosure
Page reference
Comments
GRI 102: General Disclosures 2016
Organisational profile
102-1 Name of the organisation 2, 38
102-2 Activities, brands, products
and services
2, 11–16
102-3 Location of headquarters 125
102-4 Location of operations 30
102-5 Ownership and legal form 8, 38
102-6 Markets served 13–15
102-7 Scale of the organisation 9
102-8 Information on employees and other workers 28, 58–59,
98
102-9 Supply chain 97, 99 –100
102-10 Signification changes to the organisation
and its supply chain
102
102-11 Precautionary Principle or approach 100
102-12 External initiatives supported by the organisation 25
102-13 Membership of associations Collaboration and membership are
organised locally as relevant
Strategy
102-14 Statement from the senior decision-maker 3–4, 87
Ethics and integrity
102-16 Values, principles, standards
and code of conduct
99–101
Governance
102-18 Governance structure 99–101
Stakeholder engagement
102-40 List of stakeholder groups 96
102-41 Collective bargaining agreements 99
102-42 Identifying and selecting stakeholders 96
102-43 Stakeholder dialogue 96
102-44 Material topics for stakeholders 96
GRI Standard Disclosure
Page reference
Comments
GRI 102: General Disclosures 2016
Reporting practice
102-45 Entities included in the consolidated statements 100
102-46 Defining report content
and topic boundaries
96 –97, 100,
102
102-47 List of material topics 96–97
102-48 Restatement of information from previous reports
including reason
100, 102
102-49 Changes in reporting 100, 102
102-50 Reporting period 102
102-51 Date of most recent report 102
102-52 Reporting cycle 102
102-53 Contact points for questions regarding the report Camilla Holten, sustainability coordinator
102-54 Reporting in accordance with GRI Standards 102
102-55 GRI Index 103–104
102-56 External assurance 102
GRI 200: Economic standards
Economic performance
GRI 103: Management approach 2016
103-1–103-3 Explanation of the material topic, its boundary and
governance
99–101
GRI 201: Economic performance 2016
201-1 Direct economic value generated and distributed 46–53
Own disclosure Satisfied customers 18
Anti-corruption
GRI 103: Management approach 2016
103-1–103-3 Explanation of the material topic, its boundary and
governance
99–101
GRI 205: Anti-corruption 2016
205-2 Communication and training about anti-corruption
policies and procedures
28, 99
205-3 Confirmed incidents of corruption and actions taken 98
GRI Standard Disclosure Page reference Comments
GRI 300: Environmental standards
Energy
GRI 103: Management approach 2016
103-1–103-3 Explanation of the material topic,
its boundary and governance
99–101
GRI 302: Energy 2016
302-1 Energy consumption within the organisation 98
CRE1 Building energy intensity 98
Water
GRI 103: Management approach 2016
103-1–103-3 Explanation of the material topic,
its boundary and governance
99–101
CRE2 Building water intensity 98
Emissions
GRI 103: Management approach 2016
103-1–103-3 Explanation of the material topic,
its boundary and governance
99–101
GRI 305: Emissions 2016
305-1 Direct greenhouse gas emissions 98
305-2 Indirect greenhouse gas emissions 98
Environmental compliance
GRI 103: Management approach 2016
103-1–103-3 Explanation of the material topic
and its boundary
99–101
GRI 307: Environmental compliance
307-1 Non-compliance with environmental laws 100

and regulations

GRI Standard Disclosure Page reference Comments
GRI 400 Social standards
Education
GRI 103: Management approach 2016
103-1–103-3 Explanation of the material topic, its boundary
and governance
99–101
GRI 404: Training and education 2016
404-3 Percentage of employees receiving regular
performance and career development reviews
28
Diversity and equal opportunity
GRI 103: Management approach 2016
103-1–103-3 Explanation of the material topic,
its boundary and governance
99–101
GRI 405: Diversity and equal opportunity 2016
405-1 Diversity of governance bodies and employees 94–95, 98
Non-discrimination
GRI 103: Management approach 2016
103-1–103-3 Explanation of the material topic,
its boundary and governance
99–101
GRI 406: Non-discrimination 2016
406-1 Incidents of discrimination and corrective actions
taken
98
Socioeconomic compliance
GRI 103: Management approach 2016
103-1–103-3 Explanation of the material topic, its boundary
and governance
99–101
GRI 419: Socioeconomic compliance 2016
419-1 Non-compliance with laws and regulations
in the social and economic area
99

THE AUDITOR'S STATEMENT IN RESPECT OF THE STATUTORY SUSTAINABILITY REPORT

To the Annual General Meeting of Fastighets AB Balder (publ), corporate identity no. 556525-6905

Engagement and allocation of responsibility

The Board of Directors is responsible for the sustainability report for 2020 on pages 23–28, 42–45 and 96–102 and for ensuring that it is prepared in accordance with the Annual Accounts Act.

The focus and scope of the review

Our examination has been conducted in accordance with FAR's auditing standard RevR 12 The auditor's statement in respect of the sustainability report.

This means that our review of the sustainability report has another aim and direction, and is substantially less exhaustive in scope, than an audit conducted in accordance with International Standards on Auditing (ISA) and other generally accepted auditing standards in Sweden. We believe that this review provides us with a sufficient basis for our opinion.

Opinion

A sustainability report has been prepared.

Gothenburg, 19 March 2021 Öhrlings PricewaterhouseCoopers AB

Bengt Kron Authorised Public Accountant Auditor in charge

Konstantin Belogorcev Authorised Public Accountant

Property list

Year of Lettable area, sq.m. Tax
Municipality Name of
property
Address construction
or value
Property
category
Site lease
hold right
Office Retail Industrial/
Warehouse
Education/
Care
Hotel Residential Other Total assessment
value, SEKm
HELSINKI REGION
Finland Espoo Jousenpuistonkatu 2 2019 Retail 1,266 1,266
Finland Helsinki Fredrikinkatu 47 1955 Office 3,669 3,669
Finland Sipoo Gneissikaari 13 2019 Residential 380 380
Finland Sipoo Graniittitie 8 2020 Residential 279 279
Finland Järvenpää Harava 1 2018 Residential 114 114
Finland Vantaa Haravakuja 10 2018 Residential 27 27
Finland Klaukkala Isoseppäla 14 1966 Retail 3,008 3,008
Finland Vantaa Jaspiskuja 6 B 2019 Residential 61 61
Finland Vantaa Jaspiskuja 6 C 2018 Residential 67 67
Finland Vantaa Jokiniemenkuja 7 2020 Residential 81 81
Finland Kerava Juurakkokatu 56 2017 Residential 384 384
Finland Vantaa Kaivokselantie 2020 Other
Finland Vantaa Kaivokselantie 5 C 2018 Residential 122 122
Finland Vantaa Kaivokselantie 5 L 2019 Residential 2,422 2,422
Finland Vantaa Kaivokselantie 5 N-M 2019 Residential 298 298
Finland Espoo Kavallinmäki 13 2019 Residential 423 423
Finland Vantaa Keimolankaarre 1 B 2020 Residential 706 706
Finland Vantaa Keimolankaarre 3 2019 Residential 2,153 2,153
Finland Vantaa Keltasafiirinpolku 3 C-E 2019 Residential 2,797 2,797
Finland Vantaa Keltasafiirinpolku 3 F-H 2019 Residential 748 748
Finland Vantaa Keltavuokontie 4 2016 Residential 418 418
Finland Vantaa Kilterinrinne 3 B 2020 Residential 23 23
Finland Vantaa Kilterinrinne 3 A 2020 Residential 50 50
Finland Espoo Klippinkitie 7 2018 Residential 901 901
Finland Vantaa Korsontie 14 2019 Residential 400 400
Finland Vantaa Kulorastaantie 3 2019 Residential 390 390
Finland Vantaa Kvartsijuonenkuja 1 2019 Residential 71 71
Finland Helsinki Kyytimiehenkatu 1 2018 Residential 495 495
Finland Helsinki Laurinniityntie 17 2016 Residential 353 353
Finland Vantaa Lincolninaukio 1 2019 Residential 2,515 2,515
Finland Espoo Linjaloistonkatu 3 2019 Residential 297 297
Finland Vantaa Lipstikkakuja 1 2020 Residential 113 113
Finland Vantaa Lipstikkakuja 1 A 2019 Residential 147 147
Finland Vantaa Lipstikkakuja 1 B 2020 Residential 105 105
Finland Vantaa Lipstikkakuja 8 2018 Residential 118 118
Finland Helsinki Läntinen Brahenkatu 2 1961 Hotel 3,979 3,979
Finland Vantaa Maamiehentie 15 2017 Residential 172 172
M I
-
٠
Year of Lettable area, sq.m. Tax
Municipality Name of
property
Address construction
or value
Property
category
Site lease
hold right
Office Industrial/
Retail
Warehouse
Education/
Care
Hotel Residential Other Total assessment
value, SEKm
Finland Vantaa Martinlaaksonpolku 6 2019 Residential 779 779
Finland Vantaa Martinpolku 10 2019 Residential 33 33
Finland Kerava Niinikankaantie 9 2019 Residential 1,160 1,160
Finland Vantaa Ohratie 2018 Residential 1,694 1,694
Finland Espoo Paapuuri 4 2019 Residential 203 203
Finland Vantaa Peltolantie 30 2018 Residential 115 115
Finland Nurmijärvi Pikimetsäntie 11 2018 Residential 50 50
Finland Espoo Pikkunevantie 5 2018 Residential 156 156
Finland Helsinki Radiokuja 4 2019 Residential 118 118
Finland Vantaa Rajakyläntie 34 2013 Residential 320 320
Finland Vantaa Rajatie 39 2019 Residential 140 140
Finland Espoo Reviisorinkatu 10 2019 Residential 847 847
Finland Nurmijärvi Ropakkotie 6 A 2018 Residential 168 168
Finland Nurmijärvi Ropakkotie 6 B 2018 Residential 2,122 2,122
Finland Nurmijärvi Ropakkotie 8 D 2018 Residential 113 113
Finland Nurmijärvi Ropakkotie 8 E 2018 Residential 1,099 1,099
Finland Vantaa Rubiinikehä 4 A 2020 Residential 94 94
Finland Vantaa Rubiinikehä 4 B 2020 Residential 134 134
Finland Espoo Runoratsunkatu 3 2019 Residential 252 252
Finland Kirkkonummi Rydmanintie 7 A 2020 Residential 80 80
Finland Kirkkonummi Rydmantintie 7 2020 Residential 71 71
Finland Vantaa Safiirikuja 8 2019 Residential 465 465
Finland Vantaa Sinikuja 3 2015 Residential 336 336
Finland Espoo Sotilastorpantie 1 2014 Residential 500 500
Finland Vantaa Spinellikuja 2 2020 Other
Finland Vantaa Spinellikuja 5 A 2019 Residential 92 92
Finland Vantaa Spinellikuja 5 B 2018 Residential 68 68
Finland Vantaa Spinellikuja 5 C 2019 Residential 69 69
Finland Vantaa Spinellikuja 5 D 2019 Residential 124 124
Finland Vantaa Spinellikuja 9 2019 Residential 69 69
Finland Helsinki Sulhasenkuja 3 2005 Hotel 9,734 9,734
Finland Espoo Suviniitynkatu 4 2018 Residential 579 579
Finland Porvoo Tarkmansintie 11 2018 Residential 2,772 2,772
Finland Kirkkonummi Tarutie 19 2019 Residential 1,951 1,951
Finland Sipoo Tasbyntie 11 2018 Residential 2,224 2,224
Finland Sipoo Tasbyntie 18 2018 Residential 1,448 1,448
Finland Vanda Tikkurilantie 123 2010 Retail 13,102 13,102
Finland Nurmijärvi Tilkankuja 3 B 2020 Residential 134 134
Finland Kirkkonummi Tolsankuja 5 2017 Residential 1,040 1,040
Finland Vantaa Topaasipolku 2 2020 Residential 62 62
Finland Nurmijärvi Tornitie 4– 6 2018 Residential 1,938 1,938
Finland Espoo Tyrskyvuori 4 2007 Residential 630 630
Lettable area, sq.m.
Municipality Name of
property
Address Year of
construction
or value
Property
Site lease
category
hold right
Office Industrial/
Retail
Warehouse
Education/
Care
Hotel Residential Other Tax
assessment
Total
value, SEKm
Finland Espoo Tyyrpuuri 2 2019 Residential 249 249
Finland Vantaa Valtimotie 3 A 2018 Residential 73 73
Finland Vantaa Valtimotie 3 B 2018 Residential 294 294
Finland Vantaa Varikkokaarre 4 2019 Residential 642 642
Finland Kirkkonummi Vernerintie 12 2018 Residential 1,327 1,327
Finland Kirkkonummi Vernerintie 6 2019 Residential 1,320 1,320
Finland Kirkkonummi Vernerintie 8 2019 Residential 1,266 1,266
Finland SATO Oyj, several properties Residential 1,066,844 1,066,844
Total Helsinki Region 17,376 13,713
1,113,882
1,144,971

STOCKHOLM REGION

Botkyrka Freja 2 Balders väg 10 1973 Residential Yes 7,060 220 7,280 68
Botkyrka Freja 3 Balders väg 1 1973 Residential Yes 7,167 220 7,387 65
Botkyrka Hallunda 4:11 Iduns väg 1–16 Other Yes
Botkyrka Hallunda 4:9 Balders väg 1–16 Other Yes
Botkyrka Idun 2 Iduns väg 10 1972 Residential Yes 35 7,060 256 7,351 66
Botkyrka Idun 3 Iduns väg 1 1972 Residential Yes 255 7,060 7,315 67
Haninge Ribby 1:531 Ribby Allé 86 B 2015 Residential 3,140 3,140 39
Huddinge Björkgården 6 Vårby Allé 32 1973 Residential 14,926 14,926 154
Huddinge Bäckgården 8 Vårby Centrum 1974 Other Yes 2,719 2,550 381 2,238 7,888 43
Huddinge Krongården 7 Krongårdsvägen 1 1973 Residential 42,045 42,045 420
Huddinge Vinkeln 7 Geometrivägen 1994 Retail 5,391 5,391 80
Järfälla Säby 3:29 Korpralsvägen 10 2008 Residential 10 622 5,344 8 5,984 105
Karlskoga Fordonet 1 Tibastvägen 10 1975 Retail Yes 1,660 1,660 6
Lidingö Fjällräven 1 Karins Allé 3–7, Vesslevägen 3 1963/1999 Residential 100 4,348 2,561 7,009
Linköping Palmen 3 Gamla Tanneforsvägen 51 2002 Hotel 11,086 11,086 155
Nacka Sicklaön 354:1 Ektorpsvägen 2 1979 Office 6,058 3,871 1,279 5,726 1,385 303 18,622 78
Nacka Sicklaön 363:2 Värmdövägen 84 1986 Hotel 2,392 35 8,365 10,792 142
Nacka Älta 9:130 Ältavägen 170 1992 Retail 960 880 1,840 24
Norrtälje Flygspanaren 8 Stockholmsvägen 39 1959 Retail 1,884 1,884 9
Nynäshamn Loket 5 & 6 Nickstabadsvägen 14 A 2015 Residential 6,394 6,394 103
Nynäshamn Musköten 1 Björn Barkmans väg 1 1968 Residential 206 65 22,494 1,208 23,973 203
Sollentuna Ritmallen 2 Kung Hans Väg 10 1981/1993 Residential 298 1,721 7,844 1,148 11,011 121
Solna Banken 14 Hotellgatan 11 1965 Hotel 93 11,444 11,537 181
Solna Puman 1 Bangatan 21 1972 Hotel 340 145 1,664 2,149 23
Stockholm Alptanäs 1 Haukadalsgatan 3 1981 Retail Yes 2,222 10,409 859 13,490 79
Stockholm Doggen 1 Vinthundsvägen 157 1974 Office 1,650 1,650 9
Stockholm Doggen 2 Vinthundsvägen 159 1984 Office Yes 4,721 4,721 23
Stockholm Domherren 1 Rådmansgatan 12 A 1929 Office 9,719 26 714 10,459 354
Stockholm Fiskaren Större 3 Götgatan 21 1929 Residential 235 993 1,375 2,603 80
Stockholm Granen 21 Floragatan 13 1972 Office 4,304 4,304 145
Stockholm Göta Ark 18 Göta Ark 100 1985 Office Yes 17,761 320 876 559 19,516 529
Lettable area, sq.m.
Municipality Name of
property
Address Year of
construction
or value
Property
category
Site lease
hold right
Office Retail Industrial/
Warehouse
Education/
Care
Hotel Residential Other Total Tax
assessment
value, SEKm
Stockholm Havsfrun 26 Artillerigatan 42 1929 Office 3,267 252 3,519 113
Stockholm Holar 3 Skalholtsgatan 10 1985 Other Yes 6,135 1,072 7,207 74
Stockholm Islandet 4 Adolf Fredriks Kyrkogata 13 1908 Office 1,845 245 125 2,215 73
Stockholm Järnplåten 23 Kungsgatan 37 1937 Office 5,225 440 171 148 2,049 8,033 484
Stockholm Katthavet 8 Näckströmsgatan 8 1863 Other 8,022 8,022 313
Stockholm Kilaberg 1 Kilabergsvägen 1975 Office Yes 7,893 5,009 12,902
Stockholm Kungsbacken 8 Drottninggatan 108 1929 Office 1,787 547 67 25 2,426 74
Stockholm Kvasten 8 Mäster Samuelsgatan 10 1929 Office 1,336 614 81 10 2,041 219
Stockholm Lindansaren 23 Flaggstång, Holländargatan 22 1929 Office 7,120 863 603 293 8,879 267
Stockholm Luftspringaren 10 Saltmätargatan 10 1931 Office 498 18 516
Stockholm Luftspringaren 16 Saltmätargatan 19 A 1929 Office 615 372 80 613 794 2,474 61
Stockholm Lärftet 2 Brommaplan 407 1941 Residential Yes 204 530 143 895 1,772 33
Stockholm Magneten 32 Voltavägen 13 1982 Office 6,539 450 3,118 10,107 84
Stockholm Meteorologen 4 Finn Malmgrens Väg 9 1991 Residential Yes 399 725 1,124 24
Stockholm Meteorologen 5 Finn Malmgrens Väg 11 1991 Residential Yes 1,090 74 1,235 2,399 48
Stockholm Murmästaren 3 Garvargatan 10 1926 Other 16,423 16,423
Stockholm Magneten 32 Voltavägen 13 1982 Office 6,539 450 3,118 10,107 84
Stockholm Meteorologen 4 Finn Malmgrens Väg 9 1991 Residential Yes 399 725 1,124 24
Stockholm Meteorologen 5 Finn Malmgrens Väg 11 1991 Residential Yes 1,090 74 1,235 2,399 48
Stockholm Murmästaren 3 Garvargatan 10 1926 Other 16,423 16,423
Stockholm Murmästaren 7 Hantverkargatan 31 1929 Office 2,448 462 84 83 3,077 105
Stockholm Murmästaren 9 Hantverkargatan 21 1929 Residential 1,419 756 6 2,444 4,625 135
Stockholm Prästgårdsängen 3 Götalandsvägen 218 1986 Office Yes 5,405 847 39 6,291 65
Stockholm Silket 2 Brommabågen 4 1941 Retail Yes 174 602 94 555 7 1,432 28
Stockholm Singeln 9 Sorterargatan 8 1970 Office Yes 5,139 103 5,242 32
Stockholm Skeppshandeln 1 Hammarby Allé 45 2013 Hotel 2,143 3,033 210 8,550 13,936 439
Stockholm Snöflingan 3 Drottningsholmsvägen 59 2009 Hotel 22,000 22,000 489
Stockholm Spelbomskan 14 Gyldéngatan 6, Sandåsgatan 2 1939 Other 147 2,553 2,700
Stockholm Spårvagnen 4 Birger Jarlsgatan 57 1995 Office 18,933 3,084 962 191 23,170 999
Stockholm Tre Vapen 7 Valhallavägen 185 2004 Other 2,390 333 9,018 11,741
Stockholm Tråden 1 Brommaplan 418–420 1941 Retail Yes 555 41 537 1,133 22
Stockholm Varmvattnet 3 Esbogatan 8 1977 Retail Yes 15,000 18,009 33,009 215
Stockholm Vattenkraften 1 Solkraftsvägen 13 1989 Office Yes 6,576 734 25 3,689 4 11,028 46
Stockholm Vilunda 6:48 Hotellvägen 1 1986 Hotel 6,955 6,955 63
Stockholm Årstaäng 4 Fredsborgsgatan 24 1966 Office Yes 1,547 84 4,182 3 5,816 57
Stockholm Årstaäng 6 Fredsborgsgatan 24 2015 Office Yes 16,388 815 849 7 18,059 460
Sundbyberg Bivacken 2 Kavallerivägen 24 1990 Other 4,017 499 95 70 2 4,683 42
Sundbyberg Bollspelaren 1 Lötsjövägen 10 1993 Other 4,028 5,621 9,649
Sundbyberg Kartan 1 Lötsjövägen 2 1971 Other 11,349 1,160 2,414 5,996 2 20,921 149
Sundbyberg Kasernen 1 Kasernvägen 1 1940 Other 1,546 4 1,550
Sundbyberg Kasernen 2 Kasernvägen 5 1940 Other 1,594 1,594
Sundbyberg Kasernen 3 Kasernvägen 3 1940 Other 1,551 1,551
Sundbyberg Kvartermästaren 1 Rissne torg 1 1984 Retail 470 1,657 87 1,916 6 4,136
Sundbyberg Maden 4 Madenvägen 7 1988 Retail Yes 4,314 6,357 466 11,137 110
Sundbyberg Muraren 9 Järnvägsgatan 30 2002 Residential 4,037 19 3,166 1,069 8,291 142
Sundbyberg Terränglöparen 11 Hallonbergsplan 1 1984 Office 7,475 5,845 2,738 3,810 4,871 24,739 155
Year of Lettable area, sq.m. Tax
Name of construction Property Site lease Industrial/ Education/ assessment
Municipality property Address or value category hold right Office Retail Warehouse Care Hotel Residential Other Total value, SEKm
Södertälje Grävmaskinen 23 Morabergsvägen 1 1973 Retail 2,391 2,391 4
Södertälje Yxan 8 Täppgatan 15 1975 Hotel 14,115 14,115 102
Uppsala Berthåga 53:1 Naturstensvägen 101 2007 Residential 3,814 3,814 60
Uppsala Denmarks-Säby 11:1 Kumlagatan 12 2012 Retail 20,727 712 21,439 191
Uppsala Dragarbrunn 16:4 Dragarbrunns torg 18 1962 Hotel 680 51 5,259 5,990 111
Uppsala Kvarngärdet 3:2 Gamla Uppsalagatan 50 1983 Hotel 7,518 7,518 54
Uppsala Årsta 68:1 Fyrislundsgatan 75 1976 Retail 7,558 7,558 61
Uppsala Årsta 94:1 Stålgatan 101 1988 Residential 5,274 39 5,313 83
Uppsala Årsta 95:1 Stålgatan 35 2005 Residential 4,125 8 4,133 62
Örebro Stjärnregnet 1 Otto E Andersens gata 1 1979 Retail Yes 4,341 4,341 30
Total Stockholm Region 189,971 108,976 27,508 62,195 116,621 157,178 36,094 698,543 9,749
GOTHENBURG REGION
Ale Nödinge 38:14 Ale Torg 10 2007 Retail 3,920 10,032 30 13,982 94
Ale Surte 1:245 Gothenburgsvägen 64 B 1967 Residential 215 337 1,216 90 1,858 17
Ale Surte 1:293 Gothenburgsvägen 93 A 1946 Residential 424 356 780
Ale Surte 1:294 Brattåsstigen 6 1992 Residential 455 330 785
Ale Surte 4:119 Gothenburgsvägen 64 1987 Retail 808 1,440 277 462 114 3,101 19
Alingsås Bagaren 14 Hantverksgatan 2 1991 Residential 556 556 8
Alingsås Bagaren 2 Hantverksgatan 4 1992 Residential 424 9 433 6
Alingsås Björkhagen 1 Björkhagegatan 2 A 2008 Residential 3,212 3,212 60
Alingsås Bolltorp 4:13 Bolltorp 2003 Residential 14,166 14,166 249
Alingsås Dryckeshornet 1 Bankgatan 1 1911 Hotel 219 5,362 5,581 36
Alingsås Safiren 1 Safirgatan 6 A 1993 Residential 4,342 4,342 64
Alingsås Skyffeln 2 Aleforsvägen 9 1973 Office 210 5,716 5,926 18

Alingsås Smedjan 3 Malmgatan 6 A 1953 Retail 2,807 15 2,822 7 Borås Bulten 1 Verkstadsgatan 3 1901 Retail 1,815 1,815 6 Borås Plutonen 1 Pickesjövägen 2 2011 Retail 40 12,318 762 13,120 66 Borås Vattnet 4 Elementgatan 8 2018 Retail 7,716 7,716 41 Borås Vindtyget 6 Ödegärdsgatan 2 A 2012 Retail 3,350 3,350 21 Gothenburg Askim 243:20 Askims Torg 1972 Office 1,803 638 553 1,385 4,379 29 Gothenburg Backa 169:2 Södra Deltavägen 3 B 1994 Retail 3,615 3,615 47 Gothenburg Backa 169:3 Södra Deltavägen 3 A 2006 Retail 1,975 1,975 45 Gothenburg Backa 171:3 Backavägen 1 1955 Retail 4,334 4,334 53 Gothenburg Backa 171:4 Backavägen 3 1990 Office 4,932 2,930 308 8,170 108 Gothenburg Backa 21:14 Exportgatan 47 B 1989 Other 608 1,784 108 2,500 13 Gothenburg Bagaregården 5:8 Kungälvsgatan 6 A 1929 Residential 584 584 16 Gothenburg Bagaregården 5:9 Kungälvsgatan 6 A 1929 Residential 588 588 16 Gothenburg Bergsjön 34:1 Atmosfärgatan 1 1970 Residential 115 281 22,336 22,732 204 Gothenburg Bergsjön 9:6 Kosmosgatan 1 1967 Residential 77 162 399 43,993 3,482 48,113 397 Gothenburg Biskopsgården 7:1 Långströmsgatan 26 1967 Residential Yes 388 15,278 15,666 136 Gothenburg Biskopsgården 7:2 Långströmsgatan 14 C 1967 Residential Yes 145 153 13,855 14,153 126

Year of Lettable area, sq.m. Tax
Municipality Name of
property
Address construction
or value
Property
category
Site lease
hold right
Office Retail Industrial/
Warehouse
Education/
Care
Hotel Residential Other Total assessment
value, SEKm
Gothenburg Biskopsgården 7:3 Långströmsgatan 10 A 1968 Residential Yes 161 13,988 14,149 122
Gothenburg Brämaregården 72:4 Hisingsgatan 28 1959 Office Yes 2,495 889 42 20 3,446 29
Gothenburg Bur 134:1 Oxholmsgatan 28 1989 Residential Yes 302 302
Gothenburg Bö 93:2 Sofierogatan 1 1940 Office 8,304 472 316 9,092 119
Gothenburg Gamlestaden 25:11 Marieholmsgatan 4 1990 Office Yes 3,809 178 70 4,057 28
Gothenburg Gamlestaden 26:13 Vassgatan 3 1988 Office Yes 3,803 6,363 3,991 14,157 64
Gothenburg Gullbergsvass 11:2 Gullbergs Strandgata 40 1977 Other Yes 5,865 5,865 27
Gothenburg Gårda 15:1 Fabriksgatan 7 1929 Office 7,144 207 487 7,838 194
Gothenburg Gårda 15:1 (15:12) Drakegatan 2 1937 Residential 1,583 87 6,717 8,387 237
Gothenburg Gårda 70:9 Kobbarnasväg 17 1985 Residential 1,519 1,519 39
Gothenburg Gothenburg Tuve 116:6 Grimbodalen 6 2008 Retail 3,213 3,213 22
Gothenburg Heden 24:11 Engelbrektsgatan 73 1964 Hotel Yes 17,875 17,875 305
Gothenburg Heden 47:3 Parkgatan 49 2015 Office 5,788 472 50 1,231 7,541 271
Gothenburg Högsbo 1:1 J A Wettergrensgata 7 1967 Office 11,165 3,527 124 14,816 66
Gothenburg Högsbo 11:10 Victor Hasselbladsgata 8 1982 Office 4,050 4,050 20
Gothenburg Högsbo 23:4 Gustaf Werners Gata 1 2008 Retail 1,698 31,250 274 94 33,316 451
Gothenburg Högsbo 36:2 Norra Långebergsgatan 2 1974 Retail 5,597 456 6,053 46
Gothenburg Högsbo 36:8 Hulda Mellgrensgata 11 1992 Retail 2,448 2,448 33
Gothenburg Högsbo 38:17 Sisjö Kullegata 5 1986 Office 1,680 26 1,706 15
Gothenburg Högsbo 38:20 Sisjö Kullegata 6 1989 Office 2,010 780 2,790 22
Gothenburg Högsbo 38:8 Sisjö Kullegata 8 1990 Office 5,409 1,340 6,749 62
Gothenburg Inom Vallgraven 1:13 Drottninggatan 62 1986 Hotel 26,656 26,656 460
Gothenburg Inom Vallgraven 14:1 Södra Hamngatan 2 1907 Other 1,732 3,129 4,861 114
Gothenburg Inom Vallgraven 15:3 Drottninggatan 30 1980 Office 3,847 379 169 4,395 124
Gothenburg Inom Vallgraven 16:21 Drottninggatan 10 1882 Office 2,370 352 86 200 3,008 91
Gothenburg Inom Vallgraven 19:4 Drottninggatan 31 1929 Office 859 236 1,095 30
Gothenburg Inom Vallgraven 19:6 Drottninggatan 35 1929 Office 525 510 1,035 25
Gothenburg Inom Vallgraven 2:2 Drottninggatan 69 1853 Office 1,038 254 1,292 42
Gothenburg Inom Vallgraven 20:8 Östra Hamngatan 37 1993 Office 587 514 6 1,107 40
Gothenburg Inom Vallgraven 22:6 Kungsgatan 41 1869 Office 405 468 873 43
Gothenburg Inom Vallgraven 33:7 Magasinsgatan 26 1929 Office 2,189 926 21 258 387 3,781 82
Gothenburg Inom Vallgraven 36:4 Kaserntorget 11 A 1912 Office 3,154 10 9,494 3,840 16,498
Gothenburg Inom Vallgraven 4:2 Lilla Kungsgatan 1 1929 Office 2,068 630 62 1,001 3,761 98
Gothenburg Inom Vallgraven 4:4 Lilla Kungsgatan 3 1929 Office 5,819 5,819 105

Gothenburg Inom Vallgraven 4:5 Bastionsplatsen 2 2019 Office 2,260 770 55 500 3,585

Gothenburg Inom Vallgraven 54:10 Lilla Torget 3 1929 Office 700 175 875 16 Gothenburg Inom Vallgraven 54:9 Lilla Torget 4 1929 Office 757 8 765 18 Gothenburg Inom Vallgraven 58:6 Kungsgatan 34 1989 Office 2,816 328 10 1,374 4,528 159 Gothenburg Inom Vallgraven 8:1 Kyrkogatan 29 –31 1850 Retail 1,526 1,668 5 3,199 137 Gothenburg Inom Vallgraven 8:14 Kungsgatan 54 1929 Office 1,318 1,606 2,924 116 Gothenburg Inom Vallgraven 8:19 Kungsgatan 56 1962 Office 801 509 1,310 66

Year of Lettable area, sq.m. Tax
Municipality Name of
property
Address construction
or value
Property
category
Site lease
hold right
Office Retail Industrial/
Warehouse
Education/
Care
Hotel Residential Other Total assessment
value, SEKm
Gothenburg Inom Vallgraven 8:20 Kyrkogatan 33 1940 Retail 803 803 21
Gothenburg Järnbrott 145:6 Svängrumsgatan 45 1963 Residential Yes 3,899 8 3,907 82
Gothenburg Kobbegården 6:169 Datavägen 18 1980 Office 1,608 1,608 7
Gothenburg Kobbegården 6:170 Datavägen 16 1985 Office 1,574 1,574 8
Gothenburg Kobbegården 6:259 Datavägen 41 Office 3
Gothenburg Kobbegården 6:261 Datavägen 37 1976/1981 Office 2,896 386 5,670 8,952 52
Gothenburg Kobbegården 6:261 Datavägen 37 1976/1981 Office 2,896 386 5,670 8,952 52
Gothenburg Kobbegården 6:56 Datavägen 12 B 1981 Office 1,530 1,353 2,883 16
Gothenburg Kobbegården 6:725 Datavägen 12 A 1988 Office 3,268 3,268 36
Gothenburg Kvillebäcken 16:10 Färgfabriksgatan 7 1965 Other 100 1,876 527 985 3,488 8
Gothenburg Kvillebäcken 16:11 Gamla Björlandavägen 2 1966 Office 3,152 854 217 4,316 8,539 43
Gothenburg Kvillebäcken 61:5 Ångpannegatan 1 1945 Office 1,505 1,505 2
Gothenburg Kvillebäcken 61:8 Turbingatan 1 1901 Office 2,059 2,059 12
Gothenburg Kålltorp 36:7 Solrosgatan 13 A 1935 Residential 769 105 874 20
Gothenburg Kålltorp 39:1 Råstensgatan 2 A 1936 Residential 791 791 20
Gothenburg Kärra 32:22 Tagenevägen 26 1980 Retail Yes 2,800 2,800 20
Gothenburg Kärra 73:1–2 Tagenevägen 17 A 1971 Retail 192 4,160 220 4,572 28
Gothenburg Kärra 95:3 Orrekulla Industrigata 14 1990 Retail 7,080 129 7,209 56
Gothenburg Lindholmen 29:1 Theres Svenssons Gata 15 2002 Office 11,297 475 86 31 11,889 301
Gothenburg Lindholmen 39:2 Lindholmspiren 4 2013 Hotel 13,299 13,299 299
Gothenburg Lorensberg 45:20 Kungsportsavenyen 6 –8 1971 Hotel 1,357 2,305 3,662 136
Gothenburg Lorensberg 46:1 Kungsportsavenyen 3 1929 Retail 737 1,831 42 316 2,926 66
Gothenburg Lorensberg 46:10 Kungsportsavenyen 17 1944 Office 1,053 572 1,625 48
Gothenburg Lorensberg 46:11 Teatergatan 18 1929 Retail 1,203 1,203 23
Gothenburg Lorensberg 46:12 Kungsportsavenyen 11 1929 Retail 2,394 2,394 66
Gothenburg Lorensberg 46:5 Kungsportsavenyen 7 1929 Retail 201 766 967 27
Gothenburg Lorensberg 46:6 Kungsportsavenyen 9 1950 Retail 1,176 1,176 37
Gothenburg Lorensberg 49:2 Storgatan 33 1983 Hotel 1,500 1,500 23
Gothenburg Lorensberg 55:15 Södra Vägen 23 1969 Office 2,700 8,690 336 13,158 24,884 851
Gothenburg Lorensberg 55:4 Södravägen 27 1968 Office 120 3,308 3,428
Gothenburg Lorensberg 55:8 Lorensbergsgatan 16 1968 Office 24
Gothenburg Lunden 45:2 Platågatan 3 A 1986 Residential 625 625 16
Gothenburg Masthugget 11:13 Andra Långgatan 29 1970 Office 17,632 2,840 945 2,046 7,706 1,445 32,614 546
Gothenburg Nordstaden 10:15 Köpmansgatan 27 1929 Office 1,031 590 36 812 2,469 99
Gothenburg Nordstaden 10:16 & 10:17 Köpmansgatan 29 2008 Hotel 113 7,753 7,866 193
Gothenburg Olskroken 10:5 Olskroksgatan 30 1985 Office 1,920 81 2,532 4,533
Gothenburg Olskroken 25:11 Falkgatan 7 1932 Other 1,969 292 2,261
Gothenburg Rud 8:10 Munspelsgatan 10 1962 Residential 255 614 43,673 988 45,530 729
Gothenburg Rud 8:12 Lergöksgatan 2 AA 2019 Other 2,790 2,790 62
Gothenburg Rud 8:22 Munspelsgatan 18 2019 Other 9
Gothenburg Sannegården 25:1 Säterigatan 20 1971 Office 3,482 192 3,674 24
Gothenburg Sannegården 28:5 Sjöporten 1 1945 Hotel 69 307 1,161 1,537 17
Gothenburg Stampen 7:12 Burggrevegatan 25 1901 Hotel 3,533 3,533 86
Year of Lettable area, sq.m. Tax
Municipality Name of
property
Address construction
or value
Property
category
Site lease
hold right
Office Retail Industrial/
Warehouse
Education/
Care
Hotel Residential Other Total assessment
value, SEKm
Gothenburg Tingstadsvassen 3:6 Krokegårdsgatan 3 1944 Retail 128 3,426 100 6 3,660 77
Gothenburg Tingstadsvassen 3:7 Krokegårdsgatan 7 1987 Retail 5,243 5,243 116
Gothenburg Tingstadsvassen 3:8 Krokegårdsgatan 5 1991 Retail 4,865 4,865 126
Gothenburg Tingstadsvassen 4:3 Krokegårdsgatan 1 1986 Retail 502 3,268 15 3,785 85
Gothenburg Torslanda 153:1 Mossfyndsgatan 15 1989 Residential Yes 362 362
Gothenburg Torslanda 155:3 Mossfyndsgatan 10 1989 Residential Yes 300 300
Gothenburg Torslanda 95:1 Torslanda Torg 2 1973 Retail 231 4,578 26 871 968 6,674 51
Gothenburg Uggledal 408:1 Uggledalsvägen 13 2010 Office 3,200 3,200 23
Gothenburg Utby 39:11 Västra Tvärskedet 3 1990 Residential 116 351 467
Jönköping Visionen 4 Bataljonsgatan 14 2016 Retail 22,448 385 22,833 166
Kungsbacka Bolsheden 1:18 Bolshedens Industriväg 35 2006 Office 2,718 1,745 4,463 26
Kungsbacka Bolsheden 1:48 Bolshedens Industriväg 30 1992 Office 699 3,701 4,400 19
Kungsbacka Hede 4:14 Hedebrovägen 15 2011 Retail 4,177 4,177 29
Kungsbacka Kungsbacka 6:28 Smörhålevägen 1 1993 Other 456 2,219 2,675
Kungsbacka Kungsbacka 6:29 Smörhålevägen 3–5 1993 Other 2,585 603 1,723 4,911
Kungsbacka Spekedal 1:104 Kopparvägen 4–14 1988 Residential 2,519 2,519 27
Kungsbacka Spekedal 1:92 Gottskärsvägen 28 1987 Residential 681 681 6
Kungsbacka Varla 2:367 Energigatan 3 1986 Other 563 563 3
Kungsbacka Varla 2:394 Energigatan 5 A-C 1987 Other 685 685 4
Kungsbacka Varla 2:429 Magasinsgatan 2 A 2004 Other 1,172 1,172 8
Kungsbacka Verkmästaren 10 Hantverksgatan 3 1975 Office 3,471 3,471 15
Kungsbacka Ysby 2:25 Klovstensvägen 13–17 Other
Kungälv Krabbetornet 1 & 35 Västra Gatan 84 1938 Retail 391 840 272 1,503 15
Kungälv Rhodin 19 Strandgatan 77 1967 Retail 2,822 91 7 2,920 30
Kungälv Skatan 1 Christian IV:s väg 1 1976 Office 1,489 1,489 7
Kungälv Skomakaren 10 Fabriksgatan 10 1988 Office 1,781 478 79 1,474 308 4,120
Kungälv Slottsträdgården 5 Gamla Torget 1958 Hotel 6,100 6,100 31
Kungälv Stopet 1 Fräkne Gränd 20 2018 Residential 221 7,869 8,090 126
Lerum Floda 3:121 Gamla Vägen 26 1991 Residential 1,016 1,016 14
Lerum Lerum 43:21 Skattegårdsbacken 10 1991 Residential 1,383 1,383 3
Lerum Torp 1:328 Lindvägen 34 A 1988 Residential 428 11 439 5
Mariestad Enen 23 Viktoriagatan 16 1985 Retail 3,889 1,952 5,841 42
Mariestad Furan 11 Stockholmsvägen 23 1962 Residential 121 1,620 637 2,378 45
Mariestad Furan 12 Stockholmsvägen 25 1962 Residential 6 4,254 4,260
Mariestad Fårtickan 1 Bergsgatan 20 1968 Residential 4,632 4,632 34
Mariestad Granen 8 Viktoriagatan 17 Other
Mariestad Hunden 3 Nya Torget 1 1965 Retail 2,187 260 158 1,251 3,856 16
Mariestad Murklan 1 Bergsgatan 18 1968 Residential 12,597 12,597 91
Mariestad Staren 8 Nygatan 14 1966 Retail 305 1,596 65 46 2,012 8
Mölndal Fallström 14 Fallströmsgatan 1 1996 Office 89 842 931
Mölndal Gaslyktan 2 Argongatan 20 1981 Retail 3,483 81 3,564 31
Mölndal Gaslyktan 8 Argongatan 8 1977 Office 478 5,913 6,391 35
ON O BAI
DER
Year of Lettable area, sq.m. Tax
Municipality Name of
property
Address construction
or value
Property
category
Site lease
hold right
Office Retail Industrial/
Warehouse
Education/
Care
Hotel Residential Other Total assessment
value, SEKm
Mölndal Leoparden 2 Gothenburgsvägen 129 1923 Retail 1,476 20,669 495 22,640 125
Mölndal Pekdonet 1 Betagatan 2 Project, land
Mölndal Pianot 5 Bäckstensgatan 13 2009 Retail 2,493 2,493 22
Mölndal Presenten 1 Flöjelbergsgatan 24 2001 Retail 774 12,726 77 13,577 96
Mölndal Presenten 2 Flöjelbergsgtan 22 1978 Retail 2,250 75 2,325 12
Mölndal Stockrosen 10 Norra Ågatan 26 C 1973 Office 1,520 53 35 1,608 13
Mölndal Stockrosen 3 Norra Ågatan 38 1964 Office 1,073 408 4,548 190 6,219 21
Mölndal Stockrosen 6 Norra Ågatan 34 1948 Office 551 1,212 252 2,015 14
Skövde Dagsländan 10 Barkvägen 10 A 1972 Residential 222 22,212 22,434 172
Skövde Ekoxen 10 Barkvägen 32 1974 Residential 2,406 346 21,927 5,656 30,335 203
Skövde Mellomkvarn 1 Mellomkvarnsvägen 2 1972 Retail 10,959 10,959 37
Skövde Smeden 5 Petter Heléns Gata 2 1976 Office Yes 2,434 2,434 16
Skövde Storängen 13 Kåsatorpsvägen 5 1992 Office 2,205 70 2,275 13
Trollhättan Fullriggaren 1 Sandviksvägen 2 1990 Retail 2,200 2,200 9
Trollhättan Fullriggaren 6 Överbyvägen 29 2020 Retail 2,000 2,000 10
Trollhättan Hoppet 1 Drottninggatan 13, Staveredsg 19 1992 Residential 295 2,341 265 2,901 35
Trollhättan Plogen 1 Lantmannavägen 1969 Residential Yes 32 316 11,166 11,514 82
Trollhättan Plogen 2 Lantmannavägen 1967 Residential Yes 10,555 176 10,731 64
Trollhättan Propellern 7 Saabvägen 1 1992 Office 4,759 9 4,768 14
Trollhättan Sjöfrun 5 Magasinsg 4 A–4 B, Storgatan 35 1936 Residential 193 1,367 161 1,721 19
Trollhättan Strandpiparen 12 Slättbergsvägen 22 1952 Residential 14 640 110 764 8
Trollhättan Svan 7 Storgatan 47 1989 Hotel 11,632 11,632 51
Trollhättan Venus 9 Föreningsg 10 A–10 C,
Österlångg 44–46
1989 Residential 1,250 475 1,594 3,319 29
Uddevalla Bagge 7 Kungsgatan 10 1968 Retail 1,050 1,569 103 2,722 21
Uddevalla Frölandsgärdet 2 Brunegårdsvägen 5 1989 Retail 5,614 136 5,750 20
Uddevalla Kålgården 51 Kyrkogårdsgatan 1, 3, 5 1930 Hotel 1,027 590 500 294 6,500 10 8,921 49
Uddevalla Sälghugget 1 Lillbräckegatan 1972 Residential Yes 243 239 206 14,456 15,144 151
Varberg Kardanen 4 Kardanvägen 6 A 1991 Retail 3,847 3,847 14
Total Gothenburg Region 196,513 269,268 77,054 25,220 120,419 329,411 46,298 1,064,183 12,591
COPENHAGEN REGION
Greve Matr.nr. 6os Ventrupparken 6 2010 Other 4,909 4,909
Copenhagen Matr.nr 1002 d Sundby Overdrev Hannemanns Allé 2018 Residential 7,137 7,137
Copenhagen Matr.nr 1034, 1035, 955a Sundby
Overdrev
Else Alfelts Vej 85–89, 95–101,
Richard Mortensens Vej 84–88
2016 Residential 18,234 18,234
Copenhagen Matr.nr 1041 Sundby øster Lergravsvej nr. 64–76, Øresundsvej
145–159
2017/2018 Residential 232 41,395 139 41,766
Copenhagen Matr.nr 130 & 158 Vestervold Kvarter Colbjørnsensgade 13 1889 Hotel 6,380 6,380
Copenhagen Matr.nr 1565 Udenbys Vester Havneholmen 12 B– G, 14 B– G 2016 Residential 17,286 252 17,538
Copenhagen Matr.nr 2406 Udenbys Klædebo
Kvarter
Marskens Gade 1–35, Borgm. Jensens
Allé 11–41, Serridslevvej 4–22
1996 Residential 43,684 43,684
Year of Lettable area, sq.m. Tax
Municipality Name of
property
Address construction
or value
Property
category
Site lease
hold right
Office Retail Industrial/
Warehouse
Education/
Care
Hotel Residential Other Total assessment
value, SEKm
Copenhagen Matr.nr 274 Vestervold kvarter Jernbanegade 8 1912 Other 5,300 5,300
Copenhagen Matr.nr 329 Vestervold Kvarter Bernstorffsgade 4 1913 Hotel 5,310 5,310
Copenhagen Matr.nr 371 Vestervold Kvarter Vester Farimagsgade 33 1950 Hotel 6,308 6,308
Copenhagen Matr.nr 378 Vestervold Kvarter Vester Farimagsgade 17 1957 Hotel 5 120 5,120
Copenhagen Matr.nr 59o Hillerød Markjorder Studiestræde 3–27, 3400 Hillerød 2020 Residential 10,656 10,656
Copenhagen Matr.nr 938 Østervold Kvarter Oslo Plads 5 1958 Hotel 7,453 7,453
Copenhagen Matr.nr 952 g Sundby Overdrev Else Alfelts Vej 52 –58 2019 Residential 211 21,029 21,240
Copenhagen Matr.nr 954 b, Sundby Overdrev Else Alfelts Vej 80 2017 Residential 15,035 15,035
Copenhagen Matr.nr 957 og 980A Sundby
Overdrev
Richard Mortensens vej 60 2020 Residential 127 21,175 21,302
Copenhagen Matr.nr 964 a, Sundby Overdrev Robert Jacobsens Vej 50 2019 Residential 95 20,830 20,925

Copenhagen Matr.nr 966 Sundby Overdrev Robert Jacobsens vej 93–101 2009 Residential 6,807 6,807 Copenhagen Matr.nr Vestervold kvarter 0273 Niels Brocks Gade 1 2017 Hotel 5,300 5,300

Total Copenhagen Region 665 4,909 35,871 223,268 5,691 270,404

SOUTH REGION

Burlöv Tågarp 16:12 Testvägen 4 1990 Retail 3,174 3,174 14
Gislaved Anderstorp 8:16 Ågatan 35 1970 Retail 1,400 100 1,500 3
Halmstad Eketånga 24:20 Olofsdalsvägen 33 1973 Retail 5,836 5,836 30
Halmstad Eketånga 24:47 Olofsdalsvägen 37 2012 Retail 3,220 3,220 29
Halmstad Stenalyckan 2 Orkangatan 1 1992 Retail 3,750 3,750 17
Helsingborg Amerika Södra 28 Bryggaregatan 7 1950 Residential 561 501 20 5,094 1,363 7,539 111
Helsingborg Huggjärnet 10 Garnisonsgatan 5 1971 Retail 11,144 11,144 30
Helsingborg Skalbaggen 15 Gustav Adolfs Gata 13 1939 Residential 762 19 781 7
Helsingborg Skalbaggen 16 Gasverksgatan 32 A 1935 Residential 195 2,155 65 2,415 22
Helsingborg Skalbaggen 17 Gasverksgatan 34 1935 Residential 83 712 32 827 7
Helsingborg Skalbaggen 18 Gasverksgatan 36 1933 Residential 34 818 66 918 7
Helsingborg Skalbaggen 19 Gasverksgatan 38 1935 Residential 708 57 765 6
Helsingborg Skalbaggen 20 Gasverksgatan 40 1935 Residential 83 632 109 824 6
Helsingborg Skalbaggen 21 Gasverksgatan 42 1935 Residential 711 103 814 7
Helsingborg Skalbaggen 22 Gasverksgatan 44 A 1930 Residential 143 1,905 2,048 17
Helsingborg Skalbaggen 23 Gustav Adolfs Gata 17 1967 Residential 3,685 60 3,745 36
Helsingborg Skalbaggen 24 Gustav Adolfs Gata 15 1983 Residential 2,134 2,134 20
Helsingborg Skalbaggen 7 Drakegatan 5 1929 Residential 688 111 799 7
Helsingborg Verdandi 1 Bifrostgatan 71 2006 Residential 62 3,763 3,825 53
Helsingborg Württemberg 20 Furutorpsgatan 29 1937 Retail 1,392 6,168 15 4,786 1,314 13,675 146
Helsingborg Zirkonen 3 Andesitgatan 18 2016 Retail 5,500 5,500 42
Kristianstad Hammar 9:184 Blekingevägen 104 1989 Retail 5,135 5,135 12
Kristianstad Hovrätten 41 Västra Storgatan 13 1985 Hotel 380 7,075 7,455 40
Kristianstad Topplocket 1 Sävevägen 1 1999 Retail 6,509 6,509 37
Kristianstad Traversen 1 Hedentorpsvägen 14 A 1990 Retail 2,172 2,172 7
Ljungby Linné 9 Fabriksgatan 5 1970 Retail 1,975 1,975 4
Year of Lettable area, sq.m. Tax
Municipality Name of
property
Address construction
or value
Property
category
Site lease
hold right
Office Retail Industrial/
Warehouse
Education/
Care
Hotel Residential Other Total assessment
value, SEKm
Lund Dioriten 1 Brunnsgård, Råbyvägen 1 2001 Office 3,080 3,080 34
Lund Jöns Petter Borg 14 Hedvig Möllers gata 2 2013 Hotel 8,462 8,462 73
Lund Kalkstenen 1 Kalkstensvägen 32 2000 Retail 2,180 2,180 12
Lund Kopparkisen 13 Porfyrvägen 11 1989 Retail 4,732 72 4,804 22
Lund Lagfarten 1 & 2 Magistratsvägen 10 1968 Office 3,472 1,005 289 4,766 35
Lund Porfyren 2 Glimmervägen 3 1991 Hotel 15,711 15,711 105
Lund Rügen 1 Stralsundsvägen 1–25 2006 Residential 3,085 3,085 51
Lund Rügen 2 Stralsundsvägen 29 2006 Residential 5,264 526 5,790 95
Malmö Automobilen 1 Jägersrovägen 100 1985 Retail Yes 10,718 827 11,545 42
Malmö Draglädret 1 Jägersrovägen 179 1994 Retail 2,679 2,679 19
Malmö Grytan 4 Agneslundsvägen 24 A-B 2010 Other Yes 2,400 2,400
Malmö Grytan 9 Agneslundsvägen 22 2010 Other 98 164 185 11,923 1,366 262 13,998
Malmö Hans Michelsen 10 Adelgatan 5 1963 Hotel 1,955 558 1,645 10 4,168 40
Malmö Hästkälken 3 Jägershillgatan 4 1979 Retail Yes 2,290 2,290 11
Malmö Ledebur 15 Amiralsgatan 20 1990 Office 6,113 1,300 7,413 87
Malmö Lejonet 1 Isak Slaktaregatan 2 1991 Hotel 3,849 3,849 72
Malmö Lejonet 2 Lilla Torg 1 1929 Office 4,064 1,256 72 314 5,706 130
Malmö Rosen 9 Engelbrektsgatan 2 1960 Hotel 1,430 9 9,777 11,216 161
Malmö Spinneriet 8 Baltzarsgatan 20 1957 Office 12,070 3,192 2,283 5,540 1,454 24,539 539
Malmö Spännbucklan 12 & 13 Agnesfridsvägen 180 1983 Retail Yes 5,320 5,320 26
Malmö Von Conow 54 Baltzarsgatan 31 1964 Office 9,944 2,409 1,950 2,584 4,135 21,022 464
Trelleborg Lavetten 41 Hedvägen 167–173 1987 Retail 990 990 5
Trelleborg Phylatterion 6 Bryggaregatan 25–39 1991 Retail 3,520 1,563 5,083 17
Trelleborg Snickeriet 16 –17 and Verkstaden 11 Maskingatan 1 1975 Retail 1,600 220 1,820 6
Värnamo Sjötungan 1 Margretelundsvägen 2 1973 Retail 4,924 425 5,349 15
Växjö Elden Södra 17 Biblioteksgatan 7 1985 Hotel 65 6,888 57 7,010 40
Växjö Kocken 3 Hejaregatan 19 1969 Hotel 3,982 3,982 19
Åstorp Asken 14 Esplanaden 15 1952 Residential 167 239 53 771 1,230 8
Åstorp Blåklockan 9 Fågelsångsgatan 32 A 1966 Residential 808 808 6
Åstorp Boken 4 Esplanaden 19 A 1945 Residential 218 1,163 222 7,642 9,245 70
Åstorp Ekorren 27 Skolgatan 7 1929 Residential 162 70 724 956 7
Åstorp Hyllinge 5:122 Postgatan 12 A 1963 Residential 164 120 7,431 134 7,849 34
Åstorp Hästhoven 12 Fabriksgatan 19 A 1960 Residential 704 72 2,633 3,409 23
Åstorp Kastanjen 16 Esplanaden 7 1972 Residential 1,919 833 3,543 161 6,456 42
Åstorp Linden 11 Nyvångsgatan 1 A 1961 Residential 340 340 3
Åstorp Lotusblomman 15 Nyvångsgatan 31 1961 Residential 340 340 3

Åstorp Lungörten 1 Nyvångsgatan 2 A 1961 Residential 792 792 4 Åstorp Lärksoppen 10 Ekebrogatan 100 1972 Residential 28 8,050 165 8,243 33 Åstorp Lärkträdet 10 Ekebrogatan 1 1970 Residential 42 5,799 142 5,983 24 Åstorp Moroten 10 Torggatan 35 A 1954 Residential 776 776 5 Åstorp Resedan 1 Norra Storgatan 10 A 1964 Residential 20 1,073 1,093 7 Åstorp Svärdsliljan 7 Östergatan 16 A 1958 Residential 245 457 16 6,457 7,175 45

Year of Lettable area, sq.m. Tax
Municipality Name of
property
Address construction
or value
Property
Site lease
category
hold right
Office Retail Industrial/
Warehouse
Education/
Care
Hotel Residential Other Total assessment
value, SEKm
Åstorp Tranan 1 Fjällvägen 10 A 1991 Residential 3,820 3,820 33
Ängelholm Skräddaren 5 Verkstadsgatan 5 1973 Retail 1,172 1,172 4
Ängelholm Taktäckaren 6 Midgårdsgatan 11 2015 Retail 583 875 4,780 429 6,667 36
Germany Several properties Hotel 40,381 40,381
United Kingdom London 8 Fenchurch Place Office 9,161 9,161
United Kingdom London 11 Ironmonger Lane Office 1,800 1,800
Total South Region 56,842 78,586 25,915 14,443 103,310 92,165 33,171 404,432 3,222

EAST REGION

Linköping
Nöjet 1
Låsbomsgatan 27
2010
Retail
1,380
1,380
9
Linköping
Paletten 2
Ottargatan 1
1972
Retail
5,202
440
5,642
38
Linköping
Papegojan 1
Vigfastgatan 5
1967
Retail
7,775
15
7,790
36
Norrköping
Gärdet 1
Rågången 71
1958
Residential
491
7
4,609
5,107
68
Norrköping
Lammet 2
Kungstorget 2
1939
Residential
173
1,950
2,405
60
4,588
45
Norrköping
Lokatten 12
Trädgårdsgatan 8 B
1992
Residential
1,586
380
15
5,502
401
7,884
108
Norrköping
Planket 20
Bråddgatan 54
1983
Residential
1,139
1,139
17
Norrköping
Planket 23
Plankgatan 46
1940
Residential
25
60
940
600
1,625
16
Norrköping
Prinsen 18
Hospitalsgatan 42
1967
Residential
30
138
9,603
11
9,782
153
Norrköping
Sprutan 8
Gamla Rådstugugatan 52
1940
Residential
370
12
1,318
145
1,845
25
Norrköping
Stenhuggaren 25
Sandgatan 28
1960
Residential
2,918
2,918
44
Norrköping
Storgatan 10
Drottninggatan 10
1929
Residential
484
1,213
755
2,452
25
Norrköping
Storgatan 9
Nya Rådstugegatan 2
1985
Residential
252
355
20
6,066
248
6,941
110
Norrköping
Stävan 2
Rösgången 32
1959
Residential
Yes
3,639
3,639
49
Norrköping
Tullhuset 1
Gamla Rådstugugatan 11
1929
Residential
273
1,344
1,617
24
Nyköping
Brandholmen 1:72
Idrottsvägen 12 E
2014
Other
16,324
16,324
Västerås
Badelundaåsen 3
Stockholmsvägen 144
1987
Retail
2,796
2,796
18
Västerås
Fältmössan 1
Rönnbergagatan 1
1963
Residential
150
106
14,331
14,587
261
Västerås
Klockarkärleken 2
Rönnbergagatan 4
1962
Residential
260
5,778
6,038
44
Västerås
Rödklinten 2
Bangatan 15
1957
Residential
133
120
7,003
30
7,286
51
Västerås
Sågen 1
Pilgatan 33
1980
Hotel
8,317
8,317
29
Västerås
Vallmon 6
Bangatan 1 A
1968
Residential
84
13,914
13,998
102
Västerås
Vapenrocken 1
Regementsgatan 62
1963
Residential
441
114
19,182
2
19,739
Finland
Hyvinkää
Veikkarinkatu 7
1981
Retail
2,645
2,645
Finland
Hämeenlinna
Tampereentie 169
1970/1978
Retail
5,840
5,840
Finland
Hämeenlinna
Linnaniemenkatu 1
2019
Residential
469
469
Finland
Joensuu
Voimatie 16
1999
Retail
8,282
8,282
Finland
Keminmaa
Joulantie 1–3
2001/2002
Retail
12,337
12,337
Finland
Kotka
Ristikalliontie 41
2014
Retail
3,100
3,100
Gotland Soldaten 1 Volontärgatan 2005 Residential 29 3,050 50 3,129 35
Finland Koupio Leväsentie 2 B 2006 Retail 19,808 19,808
Finland
Kouvola
Taitajantie 4
1967/1986
Retail
3,800
3,800
×
۰.
Year of Lettable area, sq.m. Tax
Name of construction Property Site lease Industrial/ Education/ assessment
Municipality property Address or value category hold right Office
Retail
Warehouse Care Hotel Residential Other Total value, SEKm
Finland Kuopio Leväsentie 33 2010 Retail 7,770 7,770
Finland Kuusamo Loumantie 1–3 1990 Retail 12,617 12,617
Finland Kuusamo Ouluntaival 1 1978 Retail 3,718 3,718
Finland Lahti Ajokatu 261 2008 Retail 7,947 7,947
Finland Lappeenranta Myllymäenkatu 6 2006 Retail 4,400 4,400
Finland Mäntsälä Mäntsäläntie 1 1989 Retail 3,384 3,384
Finland Nokia Välikatu 13 2020 Residential 750 750
Finland Närpes Yhdistyksentie 3 2017 Retail 2,513 2,513
Finland Oulu Mallastie 30 –32 A & B 2020 Residential 3,264 3,264
Finland Oulu Tietolinja 9 2018 Residential 2,003 2,003
Finland Oulu Mallastie 30 –32 C 2020 Residential 1,706 1,706
Finland Oulu Talatie 2 2019 Residential 734 734
Finland Oulu Ukkoherrantie 2 C 2018 Residential 570 570
Finland Oulu Ukkoherrantie 2 D 2018 Residential 406 406
Finland Oulu Satamatie 2–4 2019 Residential 364 364
Finland Oulu Ukkoherrantie 2 B 2017 Residential 268 268
Finland Oulu Limingantie 4 2020 Residential 81 81
Finland Pirkkala Kauppiaankatu 17 A & 21 C 2020 Residential 2,294 2,294
Finland Raisio Kauppakaju 2 1968 Retail 5,504 5,504
Finland Riihimäki Käräjäkatu 8 2019 Residential 198 198
Finland Tampere Hataanpään Valtatie 42 1997 Retail 12,412 12,412
Finland Tampere Puistokuja 32 2005 Retail 5,865 5,865
Finland Tampere Tesoman Valtatie 31 2019 Residential 3,078 3,078
Finland Tampere Tesoman Valtatie 29 2020 Residential 3,078 3,078
Finland Tampere Fleminginkatu 5 2019 Residential 1,969 1,969
Finland Tampere Ruopionkatu 6A-B 2011 Residential 1,555 1,555
Finland Tampere Takamaanrinne 9 B 2019 Residential 1,381 1,381
Finland Tampere Takamaanrinne 9 C 2019 Residential 1,381 1,381
Finland Tampere Ruopionkatu 6 C-D 2011 Residential 1,203 1,203
Finland Tampere Isokuusenkatu 47 2020 Residential 1,134 1,134
Finland Tampere Männistönkatu 2 2019 Residential 769 769
Finland Tampere Tervaskatu 4 2020 Residential 66 66
Finland Tampere Takamaanrinne 14 2020 Residential 44 44
Finland Tampere Kohmankaari 9 2018 Residential 44 44
Finland Tampere Takamaanrinne 16 2020 Residential 44 44
Finland Turku Suksikuja 2 2019 Residential 2,594 2,594
Finland Turku Fatabuurinkatu 2 B 2020 Residential 2,287 2,287
Finland Turku Fatabuurinkatu 2 A 2020 Residential 2,235 2,235
Finland Turku Kalastajankatu 3 2017 Residential 547 547
Finland Turku Fleminginkatu 7 2020 Residential 371 371
Finland Vaasa Hietalahdenkatu 13 B 1948 Residential 7,224 7,224
×
Year of Lettable area, sq.m. Tax
Municipality Name of
property
Address construction
or value
Property
category
Site lease
hold right
Office Retail Industrial/
Warehouse
Education/
Care
Hotel Residential Other Total assessment
value, SEKm
Finland Vanda Härkähaantie 16 Other
Finland SATO Oyj, several properties Residential 385,014 385,014
Total East Region 6,630 138,085 6,107 8,317 533,074 19,081 711,294 1,306
NORTH REGION
Gävle Hemsta 14:2 Skolgången 1 1974 Retail 4,100 4,100 13
Gävle Hemsta 14:3 Skolgången 3 1983 Retail 1,448 1,448 5
Gävle Holmsund 11:1 et al. Korsnäsvägen 104 A 1929 Residential 1,456 50 1,506 2
Gävle Holmsund 7:6 Holmsundsvägen 7, 17–29, (odd no) 1929 Residential 3,002 8 3,010 16
Gävle Kastet 8:1, 12:1 et al. Forskarvägen 27 et al. 1929 Residential 777 57 160 13,166 2,121 16,281 76
Gävle Lillhagen 5:3 Torkarvägen 10 1946 Residential 14 3,029 26 3,069 16
Gävle Norr 18:6 Hattmakargatan 11 1985 Residential 42 408 2,641 385 3,476 40
Gävle Norr 27:2 Nygatan 40 1929 Residential 127 480 2,185 67 2,859 31
Gävle Söder 58:7 Kaserngatan 65 1969 Residential 933 347 2,281 6 3,567 35
Gävle Sörby 10:9 Falkvägen 5 A 1994 Residential 512 512 6
Gävle Valbo-Backa 6:12 Johanneslötsvägen 6 1981 Hotel 7,382 7,382 33
Karlstad Anden 9 Långgatan 65 1983 Residential 1,472 92 1,564 26
Karlstad Braxen 34 Nygatan 1 1944 Residential 322 27 1,198 521 2,067 23
Karlstad Druvan 1 Drottninggatan 22 1929 Residential 459 601 1,443 80 2,583 43
Karlstad Ekorren 9 Sandbäcksg 5/S Klaragatan 1 1929 Residential 715 46 1,811 2,572 30
Karlstad Furan 5 Gillbergsgatan 3 1951 Residential 119 1,710 1,829 28
Karlstad Furan 7 Jössegatan 3 1968 Residential 925 97 1,022 16
Karlstad Granatkastaren 4 Artillerigatan 1 1945 Residential 748 748 9
Karlstad Gruvan 12 Västra Kanalgatan 3 1991 Residential 126 2,525 2,651 47
Karlstad Gruvan 2 Östra Kyrkogatan 4 1929 Residential 1,064 102 1,166 18
Karlstad Grävlingen 3 Herrhagsgatan 43 1929 Residential 138 1,018 32 1,188 18
Karlstad Höken 1 Hamngatan 16 1929 Hotel 5,890 5,890 65
Karlstad Pilbågen 1 Sandelsgatan 2 A 1942 Residential 2,184 2,184 24
Karlstad Registratorn 1 Norra Allén 26 A 1949 Residential 502 56 558 7
Karlstad Registratorn 8 Norra Allén 30 A 1948 Residential 12 456 61 529 6
Karlstad Registratorn 9 Norra Allén 28 A 1946 Residential 100 466 29 595 7
Karlstad Spiran 1– 6 Lignellsgatan 1 1939 Residential 95 4,456 145 4,696 61
Karlstad Trätälja 11 Drottningg 37/Pihlgrensgatan 4 1959 Residential 259 4,567 35 4,861 80
Karlstad Tusenskönan 1 Älvdalsgatan 8 1950 Residential Yes 69 1,288 1,357 21
Karlstad Väduren 3 Rudsvägen 1 1942 Residential 1,344 54 1,398 18
Luleå Skorpionen 9 Hummergatan 8 1978 Retail 1,800 1,800 8
Sundsvall Aeolus 1 Nybrogatan 19 1944 Residential 501 32 957 1,490 13
Sundsvall Bredsand 1:3 et al. Appelbergsvägen 1 A 1950 Residential 158 7,127 119 7,404 29
Sundsvall Bredsand 1:4 et al. Appelbergsv. 14, 16, 18 1950 Residential 4,479 3 4,482 18
Sundsvall Dingersjö 28:27 et al. Appelbergsvägen 26 1989 Residential 37 9,464 56 9,557 40
Sundsvall Dingersjö 3:131 et al. Bergsvägen 3 1964 Residential 16 287 21,208 2,783 24,294 80
Year of Lettable area, sq.m. Tax
Municipality Name of
property
Address construction
or value
Property
category
Site lease
hold right
Office Retail Industrial/
Warehouse
Education/
Care
Hotel Residential Other Total assessment
value, SEKm
Sundsvall Fliten 10 Skolhusallén 7 1990 Office 3,059 5 36 3,100 30
Sundsvall Fliten 11 Rådhusgatan 39 A 1992 Residential 272 66 3,371 3,709 44
Sundsvall Kvissle 2:53 & 2:43 Affärsgatan 26 A-D 1962 Residential 1,468 1,468 5
Sundsvall Kvissle 22:2 & 39:1 Affärsgatan 22 1968 Residential 87 137 75 6,416 45 6,760 19
Sundsvall Lagmannen 10 Esplanaden 18 1962 Residential 757 240 3,985 957 5,939 49
Sundsvall Nolby 1:48, 40:1, 1:108 Affärsgatan 20 1983 Residential 998 62 4,097 725 5,882 20
Sundsvall Nolby 3:268 Brovägen 9 1988 Residential 997 997 4
Sundsvall Nolby 40:2 Affärsgatan 18 1964 Residential 1,071 6 2,243 130 3,450 10
Sundsvall Nolby 41:3 & 37:1 Affärsgatan 14 1974 Residential 1,006 5 5,328 43 6,382 21
Östersund Traktorn 5 Fagerbacken 65 1994 Retail 3,216 3,216 20
Norway Bærum 3024–81/16 Dønskiveien 6 A-E 1970 Residential 2,614 2,614
Norway Elverum 13/1059/0/1 Hamarvegen 112 2010 Other 16,400 16,400
Norway Oslo 230/397 Lakkegata 3 1983 Residential 8,551 8,551
Norway Trondheim 5001/416/105 Hans Nissens gate 3 and Skolegata 5 2016 Residential 3,577 3,577
Total North Region 6,950 17,030 1,293 16,400 13,873 143,331 8,864 207,739 1,230
Total property portfolio 456,906 629,985 142,786 118,258 412,124 2,592,308 149,198 4,501,566 28,099

Project properties for own management Under construction

Country Region Project Property category Lettable area, sq.m. Number of apartments Estimated total
investment, SEKm
Estimated completion
Finland Tampere As Oy Pirkkalan Loiste Residential 2,294 61 78 Q1 2021
Sweden Stockholm Hedin Haninge Retail 3,841 75 Q2 2021
Denmark Copenhagen Agerhusene Residential 13,673 176 479 Q2 2021
Denmark Copenhagen Lerholmen Residential 14,364 186 501 Q2 2021
Finland Helsinki Espoo Iris Residential 2,448 41 103 Q2 2021
Finland Helsinki As Oy Vantaan Ruutulippu Residential 4,181 96 164 Q2 2021
Finland Helsinki As Oy Helsingin Redin Loisto Residential 759 17 47 Q3 2021
Finland Helsinki As Oy Kirkkonummen Manhattan Residential 3,960 165 176 Q3 2021
Finland Oulu As Oy Oulun Mallasmaisteri Residential 4,032 168 135 Q3 2021
Finland Helsinki Kappelitie 5 Residential 3,417 77 165 Q4 2021
Finland Helsinki Sompasaaren Priki Residential 2,888 73 197 Q4 2021
Finland Helsinki Virtakuja 6 Residential 2,865 76 129 Q4 2021
Finland Tampere As Oy Nokian Värjäämö Residential 3,033 105 104 Q4 2021
Denmark Copenhagen Lynghaven Residential 14,835 184 528 Q1 2022
Denmark Copenhagen Ofeliahaven Residential 9,079 110 323 Q2 2022
Denmark Copenhagen HTC A10 Residential 8,854 107 336 Q2 2022
Finland Helsinki Jokiniityntie 28 Residential 3,452 79 141 Q2 2022
Sweden Gothenburg Stenhuggaren Residential 5,233 88 143 Q3 2022
Sweden Gothenburg Hedin HK Office 12,286 496 Q4 2022
Sweden Gothenburg Bergsjön Residential 8,916 177 327 2022–2023
Denmark Copenhagen Green Hills Residential 24,886 290 941 Q2 2023
Sweden Gothenburg Hotell Draken Hotel 28,166 1,270 Q3 2023
Total 177,462 2,276 6,858

Development properties for sale Under construction

Country Region Project Property category Lettable area, sq.m. Number of apartments Estimated total
investment, SEKm
Estimated completion
Sweden South Bovieran Staffanstorp Residential 4,273 54 170 Q2 2021
Sweden Stockholm Berget Residential 1,467 21 162 Q2 2021
Finland Helsinki Virtakuja 4 Residential 2,277 55 105 Q4 2021
Sweden Gothenburg Fixfabriken Residential 19,114 270 897 2021–2022
Norway Sandefjord Sandefjord Residential 6,793 46 292 Q1 2022
Sweden Gothenburg Bergsfallet Residential 5,571 87 242 Q3 2022
Sweden Gothenburg Västra Gatan Kungälv Residential 8,808 124 421 Q1 2023
Total 48,303 657 2,289
Total 225,765 2,933 9,147

Project properties for own management Estimated construction start Q1 2021–Q1 2022

Country Region Project Property category Lettable area, sq.m. Number of apartments Estimated total
investment, SEKm
Construction start
Sweden Gothenburg Bergskristallen Residential 5,078 89 182 2021
Sweden Gothenburg Frölunda Residential 21,780 365 833 2021
Sweden Linköping Mörtlösa Retail 14,899 306 2021
Denmark Copenhagen HTC A17 Residential 8,646 124 316 2021
Denmark Copenhagen Hundige Øst A och D Residential 22,332 332 854 2021
Finland Helsinki Kotkatie 6 Residential 3,791 100 186 2021
Finland Helsinki Runoratsaunkatu 15 Residential 5,397 135 280 2021
Finland Helsinki Jokiniementie 46 och 48 Residential 9,462 222 531 2021
Finland Helsinki Lupajantie 2 Residential 4,321 112 194 2021
Finland Helsinki Lincolninaukio 4 Residential 5,680 158 241 2021
Finland Helsinki Raudikkokuja 7 Residential 6,390 161 262 2021
Finland Tampere Heittoniitynkuja 5 Residential 5,787 132 199 2021
Finland Tampere Hervantajärven Helmi Residential 2,612 52 95 2021
Finland Turku As Oy Turun Montana Residential 2,781 89 107 2021
Finland East As Oy Hämeenlinnan Asemanranta Residential 2,802 100 107 2021
Finland Helsinki As Oy Kirkkonummen Pyssy-Seppä Residential 1,770 74 79 2021
Finland Helsinki As Oy Riihimäen Pesispolku Residential 2,430 100 86 2021
Finland Turku As Oy Turun Kirstinpuisto Residential 3,771 129 165 2021
Finland Helsinki As Oy Kirkkonummen Lukko-Seppä Residential 1,770 74 79 2021
Finland Tusby Pataljoonantie Residential 4,618 90 172 2022
Finland Helsinki Hexagon Residential 3,229 77 228 2022
Finland Helsinki Peijinkuja 3 Residential 4,443 121 231 2022
Total 143,789 2,836 5,733

Development properties for sale Estimated construction start Q1 2021–Q1 2022

Country Region Project Property category Lettable area, sq.m. Number of apartments Estimated total
investment, SEKm
Construction start
Sweden Gothenburg Bastuban Residential 11,000 133 449 2021
Sweden Gothenburg Bohusgatan Residential 19,465 340 1,146 2021
Sweden Gothenburg Hovås Höjd Residential 10,755 144 572 2021
Sweden Stockholm Gladan Residential 7,479 143 643 2021
Sweden Stockholm Basaren Residential 4,428 65 294 2021
Sweden Stockholm Caprea Residential 3,691 28 440 2021
Sweden Gothenburg Bergsjö Glänta Residential 3,619 31 115 2021
Sweden South Bovieran Svedala Residential 4,285 54 160 2021
Norway Drammen Sølfast Park Residential 8,311 107 440 2021
Norway Oslo Ski, Linåskollen Residential 16,465 169 767 2021
Total 89,498 1,214 5,026
Total 233,287 4,050 10,760

Future projects Estimated construction start 2022 and onwards

Country Region Gross area, sq.m. Number of apartments
Sweden Gothenburg 618,160 5,435
Sweden Stockholm 306,329 2,804
Finland Helsinki 225,097 4,083
Finland East 146,630 1,584
Denmark Copenhagen 108,161 1,147
Norway North 47,580 732
Total 1,451,957 15,785

The table above shows Balder's share of projects with ongoing project development distributed by country and region and with an estimated start of construction from 2022 onwards. At the end of the year, Balder's share of projects with ongoing project development comprised of 1,451,957 sq.m. gross area and 15,785 apartments.

DEFINITIONS

Balder presents a number of financial metrics in the annual report that are not defined according to IFRS (so-called Alternative Performance Measures according to ESMA's guidelines). These performance measures provide valuable supplementary information to investors, the company's management and other stakeholders since they facilitate effective evaluation and analysis of the company's financial position and performance. These alternative performance measures are not always comparable with measures used by other companies and shall therefore be considered as a complement to measures defined according to IFRS. Fastighets AB Balder will apply these alternative performance measures consistently over time. Unless otherwise specified, the key ratios are alternative performance measures according to ESMA's guidelines. A description follows below of how Fastighets AB Balder's key ratios are defined and calculated.

FINANCIAL

Return on equity, %

Profit after tax in relation to average equity. The profit was converted to a full-year basis in the interim accounts without taking account of seasonal variations that normally arise in the operations, with the exception of changes in value.

Return on total assets, %

Profit before tax with addition of net financial items in relation to average total assets. The profit was converted to a full-year basis in the interim accounts without taking account of seasonal variations that normally arise in the operations, with the exception of changes in value.

Net debt to total assets, %

Net debt in relation to total assets.

EBITDA

Profit from property management plus the net profit from the sale of development properties with reversal of net financial items. EBITDA has been converted to a full-year basis in interim accounts, with the exception of the net profit from the sale of development properties.

Profit from property management, SEKm

Profit including changes in value and tax in associated companies, with reversal of change in value and tax in participations in profit from associated companies. When estimating the Profit from property management, attributable to the parent company's shareholders, the profit from property management is also reduced by the participation of noncontrolling interests.

Average interest, %

Interest expenses in the period recalculated to annual value in relation to the average interestbearing liabilities.

Hybrid capital

A bond with a maturity of 60 years. The bond is recognised as an interest-bearing liability, but is treated by the rating institutes as 50% equity.

Net debt, SEKm

Interest-bearing liabilities minus cash and cash equivalents, financial investments and 50% of the hybrid capital, which is treated by the rating agencies as 50% equity.

Interest coverage ratio, times

Profit including changes in value and tax in associated companies with reversal of net financial items, excluding ground rent, and changes in value and tax in participations in profits from associated companies, in relation to net financial items excluding ground rent.

Debt/equity ratio, times

Interest-bearing liabilities minus 50% of hybrid capital in relation to equity.

Equity/assets ratio, %

Equity including non-controlling interests plus 50% of hybrid capital in relation to the balance sheet total at the year-end.

SHARE-RELATED

Equity per share, SEK

Equity attributable to parent company shareholders in relation to the number of outstanding shares at the year-end.

Profit from property management per share, SEK

Profit from property management attributable to parent company shareholders in relation to the average number of outstanding shares.

Average number of shares

The number of outstanding shares at the start of the year, adjusted by the number of shares issued during the year weighted by the number of days that the shares have been outstanding in relation to the total number of days during the year.

Long-term net asset value per share (NAV), SEK

Equity per share attributable to parent company shareholders with reversal of interest rate derivatives and deferred tax according to balance sheet.

Profit after tax per share, SEK

Profit attributable to the parent company's shareholders in relation to the average number of shares.

PROPERTY-RELATED

Yield, %

Estimated net operating income on an annual basis in relation to the fair value of the properties at the year-end.

Net operating income, SEKm

Rental income minus property costs.

Economic occupancy rate, % 1)

Contracted rent for leases which are running at year-end in relation to rental value.

Development properties

Refers to properties constructed with the intention of being sold after completion.

Property portfolio

Refers to both investment properties and development properties.

Property category

Classified according to the principal use of the property. There is a breakdown into office, retail, residential and other properties. Other properties include hotel, educational, care, industrial/warehouse and mixed-use properties. The property category is determined by what the property is mostly used for.

Property costs, SEKm

This item includes direct property costs, such as operating expenses, media expenses, maintenance and property tax.

Investment properties

Refers to properties that are held with the objective of generating rental income or an increase in value or a combination of these.

Rental value, SEKm 1)

Contracted rent and estimated market rent for vacant premises.

Surplus ratio, %

Net operating income in relation to rental income.

OTHER

Associated companies/joint ventures

Information in running text about transactions linked to associated companies and joint ventures are for reasons of simplification only named "associated companies", the report refers to both holdings that constitute associated companies and joint ventures.

Second opinion

Review performed by external valuation company of used valuation method.

1) This key ratio is operational and is not considered to be an alternative key ratio according to ESMA's guidelines.

Annual General Meeting

The shareholders of Fastighets AB Balder (publ), (Balder) reg. no 556525-6905, are hereby invited to attend the annual general meeting on Wednesday May 12, 2021.

Implementation of the annual general meeting

Due to the current covid-19 pandemic and in order to minimize risks of infection, the board of directors has decided that the annual general meeting will be held by postal voting, in accordance with temporary statutory provisions. The meeting will therefore be carried out without the possibility for shareholders to attend in person or by proxy.

A presentation of Balder's CEO, Erik Selin, will be provided on Balder's website, balder.se, on May 12, 2021.

Information on the resolutions passed by the annual general meeting will be disclosed on May 12, 2021 as soon as the results of the postal voting have been compiled.

Notification etc.

A shareholder who wishes to attend the annual general meeting by postal voting must be registered as a shareholder in the share register kept by Euroclear Sweden AB no later than May 4, 2021. The shareholder must also announce that he/she/it will attend the annual general meeting no later than Tuesday May 11, 2021, by submitting a postal vote in accordance with the instructions under the headline "Postal Voting" below so that the postal vote reach Computershare AB no later than that day.

Shareholders who have their shares registered in the name of a trustee must, in order to be able to participate in the annual general meeting, re-register their shares in their own name. Such re-registration, which can be temporary, shall be executed at Euroclear Sweden AB no later than Tuesday May 4, 2021. Voting right registrations effected no later than the second bank day after May 4, 2021, will be included in the generation of the share register.

Announcement to attend the annual general meeting can only be made through postal voting.

Postal voting

For postal voting, a certain form must be applied. The form is available at Balder's website, balder. se. The form, completed and signed, is a valid registration to participate in the annual general meeting.

The completed form shall be sent to Computershare AB, "Balder's annual general meeting 2021", Box 610, 182 16 Danderyd or through e-mail to [email protected]. The completed form shall reach Computershare AB no later than Tuesday May 11, 2021.

A shareholder who is a physical person may also, by verification with BankID, submit his/her postal vote electronic by Balder's website, balder. se. To be valid as a registration to the annual general meeting, such electronic signature shall be registered no later than Tuesday May 11, 2021.

If a shareholder who is represented by proxy wishes to submit a postal vote, a written authorization for the proxy shall be enclosed with the postal voting form. A proxy form is available at Balder's website, balder.se. If the shareholder is a legal person a proof of registration or other authorization document shall be enclosed with the form.

Shareholders may not insert any specific instructions or terms to the postal vote. If so happens, the vote (i.e. the entire postal vote) is invalid. The form for postal voting contains further instructions.

Contact information

balder.se [email protected] Corp. ID no.: 556525-6905

Head office Parkgatan 49 Box 53121 400 15 Gothenburg Tel.: +46 31 10 95 70

Letting +46 20 151 151 Customer Service

+46 774-49 49 49

Gothenburg Region

Parkgatan 49 Box 53121 400 15 Gothenburg Tel.: +46 31 10 95 70

Timmervägen 9 A SE-541 64 Skövde Tel.: +46 500 47 88 50

CALENDAR

Annual General Meeting, 12 May 2021 Interim report, Jan–Mar 2021, 12 May 2021 Interim report, Jan–June 2021, 16 July 2021 Interim report, Jan–Sept 2021 11 November 2021 Year-end report, Jan–Dec 2021, 11 February 2022

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Photos: Stina Gränfors, Mathias Løvgreen, Mikaela Alexandersson and others Form: Solberg Kommunikation Printed by: Billes Tryckeri

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