K-Fast Holding

Annual Report • Mar 2, 2020

"K-Fastigheter's operational targets appear realistic and achievable – these include at least 5,000 apartments under management by the end of 2023 and a project volume of 1,000 apartments commencing construction annually by that time."

Erection of the framework for the first of two Apartment Blocks at the Nyponrosen 4 property in Helsingborg.The two Apartment Blocks will hold a total of 64 apartments distributed between nine stories, with commercial premises on the ground floor. Tenants will move into the first stage in December 2020 and into the second stage in August 2021.

K - F A S T I G H E T E R IN ONE MINUTE

With commitment at all levels, K-Fastigheter creates attractive homes offering a high degree of comfort. The Group has developed its own housing concepts meeting demands for high-quality housing from tenants and social planners. To increase cost efficiency and shorten construction times, the Group works with three concept buildings that are constructed solely for long-term ownership and active property management: Low-Rise, Lateral Low-Rise and Apartment Block

The Group holds a strong position in the Öresund region and in selected towns and cities in southern and western Sweden. Our vision is to become one of the Nordic region's largest players and a leading property owner of sustainably constructed, innovative and cost-efficient concept buildings meeting the wishes and requirements of tenants seeking to establish a home for many years to come. The housing offered by the Group is to be distinguished by the best combination of high standard, home comfort and security in the market.

Responsiveness in our dialogue with customers, suppliers and employees generates conditions for continued development towards better and more efficient homes in all regards, forming the foundation of K-Fastigheter's business model. In this way, the Group's combined experience and knowledge is applied and re-used in project development, construction processes and property management alike. Standardization, implementation of smart and sustainable solutions, as well as skills and relationships with key stakeholders are crucial factors for K-Fastigheter's continued growth.

K-Fastigheter's property portfolio encompasses a lettable area of approximately 130,000 square metres distributed between more than 1,700 homes and 110 commercial contracts with a rental value of slightly less than SEK 200 million. The project portfolio comprises more than 2,000 apartments under construction and in project development.

Based in Hässleholm, Sweden, and with local offices in strategically selected locations, K-Fastigheter currently has 68 employees.

OVERARCHING OBJECTIVES

K-Fastigheter's overarching objective is to generate value for the Company's shareholders. Over a business cycle, the generation of value is measured as growth in long-term net asset value per share.

OPERATIONAL TARGETS

• In the long term, rental income from housing is to comprise at least 80 percent of K-Fastigheter's total rental income.
• The number of apartments to be managed by the Company and on which construction has commenced is to amount to 1,000 annually in 2023.
• At the end of 2023, K-Fastigheter is to manage at least 5,000 apartments in the Nordic region.

FINANCIAL TARGETS

• Over an economic cycle, growth in long-term net asset value per share is to average at least 20 percent annually, including any value transfers.
• Over an economic cycle, annual growth in profit per share from property management is to average at least 20 percent.

The target is for growth in net asset value and profit from property management to be generated while maintaining a stable and sound financial position and with balanced financial risk-taking, meaning that:

• Over time, the equity/assets ratio is not to be less than 25 percent.
• Over time, the interest coverage ratio is not to be less than a multiple of 1.75.
• Over time, the loan-to-assets ratio is not to exceed 70 percent.

NUMBER OF HOMES UNDER MANAGEMENT

NUMBER OF HOMES IN PRODUCTION

700 541 ITEMS Q4 2019 ITEMS Q4 2018

INVESTMENT PROPERTIES

4,396.7 3,018.1 SEK MILLION Q4 2019 SEK MILLION Q4 2018

LONG-TERM NET ASSET VALUE

MORE THAN A PROPERTY COMPANY

K-Fastigheter is a project development, construction and property company that, applying a cross-functional approach, achieves profitability at each stage. For the period January to December 2019, the Group reports 55 percent of its profits in the propertyrelated operations, meaning that as much as 45 percent is related to other operations, the most significant of which are project development and construction.

K-Fastigheter has a strong business model affording the company a unique position compared to most property companies. The Group maintains proprietary project development and construction operations, ensuring a continuous flow of building rights and cost-efficient construction. The result is K-Fastigheter's own concept buildings, offering favourable operating finances and high-quality rental apartments and also some commercial premises. Through standardization and by implementing intelligent and sustainable solutions, as well as being responsive in our dialogue with customers, suppliers and employees, we foster the conditions needed for continued development towards homes that are better and more efficient in all regards.

T H E Q U A R T E R A N D FULL-YEAR 2019 IN BRIEF

THE QUARTER IN BRIEF

October – December

• Rental income for the fourth quarter increased to SEK 44.7 million (28.6), an increase of 56 percent compared with the corresponding period in the preceding year.
• Expenses for property management amounted to SEK 16.3 million (12.0) and gross profit from property management amounted to SEK 28.1 million (16.8).
• Profit from property management rose to SEK 8.6 million (7.1) in the fourth quarter.
• Unrealized changes in the value of investment properties amounted to SEK 148.0 million (78.3), SEK 94.2 million of which derived from completed investment properties and SEK 53.8 million from investment properties under construction.
• Earnings per share amounted to SEK 5.94 (2.00).

FULL-YEAR 2019 IN BRIEF

January – December

• Rental income amounted to SEK 156.8 million (96.6) for the year, an increase of 62 percent compared with the preceding year. Of the SEK 60.2 million increase, 40 percent is attributable to properties acquired during the full-year and completed proprietary construction projects. The remaining 60 percent is attributable to full-year effects of properties completed and acquired in 2018 and increased rents in comparable holdings.
• External project and contracting sales amounted to SEK 28.6 million (26.8). At the same time, SEK 273.3 million (285.3) was invested in new construction, extensions and remodelling through the Company's proprietary project and contracting operations.
• Consolidated gross profit for the full-year amounted to SEK 111.0 million (54.7), of which operating surplus attributable to property management amounted to SEK 107.3 million (62.2).
• Profit before changes in value for the full-year amounted to SEK 79.3 million (52.7).
• Profit from property management amounted to SEK 52.9 million (41.1), corresponding to SEK 2.05 per share (1.64), representing an increase in profit from property management per share of 25 percent compared with the corresponding period in the preceding year.
• Unrealized changes in value for investment properties amounted to SEK 339.8 million (243.6) and for derivatives and others to SEK 12.7 million (negative 8.6).
• Profit after tax for the full-year amounted to SEK 365.3 million (244.8), corresponding to SEK 14.14 per share (9.79), which is an increase of 44 percent compared with full-year 2018.
• At the end of the year, the value of the investment properties amounted to SEK 4,396.7 million (3,018.1), which is an increase of 46 percent compared with 31 December 2018.
• At the end of the year, the long-term net asset value (NAV) amounted to SEK 2,540.2 million (1,213.4), corresponding to SEK 74.96 per share (48.54), which is an increase of 54 percent compared with 31 December 2018. Adjusted for the net proceeds of SEK 892.1 million from the new share issues implemented in the third and fourth quarters, the increase in net asset value per share was 36 percent.

Significant events in the fourth quarter of 2019

• In the fourth quarter, the following were completed, with tenants moving in:
  • Kristianstad / Hammar 9:195 stage 3 comprising 52 Lateral Low-Rise and Low-Rise apartments with a rental value of SEK 6.3 million.
  • Helsingborg / Brigaden 7 & 8 stage 3 comprising 30 Lateral Low-Rise apartments with a rental value of SEK 3.0 million.
• On 13 December 2019, K-Fastigheter took possession of the Nocken 2 property in the Vikaholm area of Växjö. The property comprises 67 apartments with a rental value of SEK 6.6 million. Purchase consideration, SEK 114.0 million.

Financial ratios (see definitions on page 28)	2019 Oct–Dec	2018 Oct–Dec	2019 Jan–Dec	2018 Jan–Dec
Rental income, SEK million	44.7	28.6	156.8	96.6
Profit from property management, SEK million	8.6	7.1	52.9	41.1
Profit after tax for the period, SEK million	167.9	50.0	365.3	244.8
Net investments in investment properties, SEK million	351.5	221.2	1,061.1	835.7
Investment properties, SEK million	4,396.7	3,018.1	4,396.7	3,018.1
Long-term net asset value (NAV), SEK million	2,540.2	1,213.4	2,540.2	1,213.4
Number of apartments under management	1,711	1,220	1,711	1,220
Number of apartments under construction	700	541	700	541
Number of apartments under project development	1,340	688	1,340	688
Interest coverage ratio, multiple	2.2	2.1	2.6	3.5
Equity/assets ratio, %	41.8%	29.3%	41.8%	29.3%
Loan-to-value ratio, %	40.2%	60.4%	40.2%	60.4%
Profit from property management, SEK per share	0.30	0.29	2.05	1.64
Growth in profit from property management per share, %	6.6%	9.5%	24.6%	23.8%
Long-term net asset value (NAV), SEK per share	74.96	48.54	74.96	48.54
Growth in long-term net asset value (NAV), per share, %	26.1%	5.5%	54.4%	29.5%
Earnings per share, SEK*	5.94	2.00	14.14	9.79

* Since the number of shares has not been diluted, the earnings per share apply both before and after dilution.

• During the fourth quarter, the following building rights were acquired:
  • Extension of the transaction regarding part of the Burlöv / Arlöv 17:10 property: Raw land in Arlöv for which K-Fastigheter will apply for a detailed development plan for a total gross area of approximately 24,000 square metres for some 316 Lateral Low-Rise and Apartment Block apartments. Possession of the site is to take place when the detailed development plan has gained legal force.
  • Kävlinge / Saltmästaren 2: Building rights in central Kävlinge for a Lateral Low-Rise of approximately 3,700 square metres distributed between 70 apartments. Rental value, approximately SEK 6.8 million. Purchase consideration, SEK 14.0 million. Construction scheduled to commence during 2020.
  • Höganäs / Viken 39:5: Building rights in Viken, just north of Helsingborg, for Low-Rise buildings with a gross area of approximately 25,000 square metres distributed between some 300 apartments. Purchase consideration, SEK 53.0 million. Construction of approximately 90 apartments scheduled to commence during 2020. Rental value, approximately SEK 10.8 million.
  • Växjö Örnen 28 och 32: Building rights at Folkets Park in Växjö with a gross area of approximately 7,620 square metres distributed between some 94 apartments. Rental value, approximately SEK 11.4 million. Purchase consideration, SEK 20.0 million. Construction scheduled to commence during 2020.
• Växjö Taket 2: Building rights for Low-Rise buildings of 2,862 square metres divided between 36 apartments in the Vikaholm area of Växjö. Rental value SEK 4.8 million. Purchase consideration, SEK 80.0 million (including construction). Construction commenced in December 2019. Tenants scheduled to move in during September 2021.
• During the fourth quarter, construction began of:
• Höganäs / Stubbarp 33:27: Construction in Viken, just north of Helsingborg, of 6,745 square meters, divided between 93 Low-Rise apartments. Rental value SEK 10.8 million. Tenants scheduled to move in during the third quarter of 2021. - Växjö / Taket 2: See above.
• During the fourth quarter, eight apartments were completed within K-Fastigheter's K-Fast 2.0 programme for renovating older apartments. The increase in rental value resulting from the upgrades amounts to SEK 0.1 million. In total, 40 apartments were renovated in 2019, increasing their rental value by SEK 0.8 million.
• On 3 December 2019, K-Fastigheter's associated company, Novum Samhällsfastigheter AB, completed its second transaction for the year with the sale of a retirement home project in Hässleholm. K-Fastigheter's share of the proceeds from the sale amounts to SEK 22.0 million.
• On 29 November 2019, shares in K-Fast Holding AB began trading on the main list of Nasdaq Stockholm. With 8,625,000 new shares being issued, a large number of new shareholders were added through the stock exchange launch. The issue raised SEK 905.6 million for the Company before expenses for the share issue.

Significant events after the end of the year

• On 2 January 2020, K-Fastigheter took possession of the Växjö / Örnen 34 property, the first of two acquisitions agreed with the Boro Group during 2019. The acquisitions encompass a total of 13,091 square metres distributed between 171 apartments situated in the former Folkets Park in central Växjö and have a total rental value of SEK 23.2 million. The purchase consideration totals SEK 484.0 million. Tenants will move into the newly built apartments in five stages between December 2019 and August 2020. The buildings of which K-Fastigheter took possession on 2 January encompass a total of 5,650 square metres distributed between 70 apartments and have a rental value of approximately SEK 10.0 million. K-Fastigheter is scheduled to take possession of the second part of the acquisition on 1 May 2020.

• On 15 January 2020, K-Fastigheter took possession of the Helsingborg / Amerika Norra 54 property. The property, which is situated adjacent to K-Fastigheter's student accommodation Amerika Södra 27 in the Söder district of Helsingborg, comprises 1,878 square metres of housing, distributed between 28 apartments, and 759 square metres of commercial space distributed between five commercial agreements. Rental value, approximately SEK 3.7 million. Purchase consideration, SEK 58.0 million.

• On 31 January 2020, K-Fastigheter took possession of the building rights for the Gothenburg / Sävenäs 131:13 property adjacent to the Östra Sjukhuset hospital in Gothenburg. On a neighbouring property, K-Fastigheter commenced construction of 103 Lateral Low-Rise apartments in the third quarter of 2019. The acquired building rights comprise construction of 192 Lateral Low-Rise apartments with a total area of approximately 12,250 square metres. Construction scheduled to commence during 2020. Estimated rental value, approximately SEK 23.9 million. Purchase consideration, SEK 80.0 million.
• On 12 February 2020, K-Fastigheter took possession the building rights for the Hässleholm / Hässleholm 88:1 property, which is located in the T4 area of Hässleholm. The building rights encompass an Apartment Block with a gross area of approximately 1,450 square metres distributed between 18 apartments. Construction scheduled to commence during 2021. Rental value, approximately SEK 2.5 million. Purchase consideration, SEK 2.5 million.
• In February, the Board of Directors resolved that the Company should establish operations in Denmark.
• The Board of Directors intends to propose to the Annual General Meeting that no dividend be paid.

4 K-Fast Holding AB Year-end report 2019

A M E S S A G E FROM THE CEO

Chief Executive Officer

With the final days of 2019 now having been laid to the record, it can only be said that things do not always turn out as planned – sometimes, they turn out much better! What a year we had! "

At K-Fastigheter, we always try to build something more than just apartments. Together with our tenants, we seek to build homes, because there is definitely a difference between a home and an apartment. There is a difference between four walls and a home in which we experience well-being, security and love... Human values are part of that difference and these are also the values that set K-Fastigheter apart from many other property companies. We design the homes that we build and manage in accordance with the motto "HOMES where we ourselves want to live" – which we actually do, as about 15 percent of our employees are tenants of our portfolio. This engenders credibility, and we live as we preach. At the same time, we always keep an ear on the ground to learn how we can further improve. Because we are never completely satisfied!

K-Fastigheter's operational targets appear realistic and achievable – these include at least 5,000 apartments under management by the end of 2023 and a project volume of 1,000 apartments commencing construction annually by that time. We enter 2020 with 1,711 apartments under management, 700 apartments currently in production, 1,340 apartments currently at the project planning stage and 199 apartments of which we will be taking possession gradually by September 2020. Consequently, our property and project portfolios amounted to a total of 3,950 apartments as of 31 December 2019. Rental income for full-year 2019 amounted to SEK 156.8 million, compared with the rolling 12-month rental value of SEK 196.6 million at the end of the year, reflecting a 25 percent increase.

We take an optimistic and opportunistic attitude, which I am convinced will bring us continued success. We seek to work closely with landowners, municipalities, tenants and partners. K-Fastigheter strives to be a long-term partner, meaning that we take all of our stakeholders seriously.

Crucial to achieving our goals is pursuing K-Fastigheter's existing business model, with a focus on acquiring building rights in the growth locations that we prioritize. This is a long-term process, largely involving numerous small-scale acquisitions that are often achieved through established relationships with land and property owners. In December 2019 alone, we acquired building rights equivalent to 496 apartments with a market value of almost SEK 1 billion on completion.

The increase in volumes we aim to achieve will require geographical expansion. During the year, we commenced construction projects on Sweden's west coast, acquiring building rights for almost 300 apartments in Gothenburg, of which 103 commenced construction the third quarter of 2019, and we have applied for building permits for just under 200 more apartments, the construction of which we aim to commence in 2020. We have several major projects in Växjö, where we have acquired building rights and completed properties, and where we already have 90 apartments

under construction in the Pelikanen and Taket urban blocks. At current production levels and agreed dates of possession, Växjö will, within a few years, be our second-largest location after Helsingborg in terms of the number of apartments under management.

Profit for full-year 2019 amounted to SEK 365.3 million, of which 42 percent relates to project development and construction of our own concept buildings. What I want to emphasize in saying this, is that we are so much more than simply a property company.

In the future, I anticipate further initiatives in the markets where we already operate and we believe the near-future conditions favourable for us to take the step across the Sound to Copenhagen and its environs, and, in the long term, to expand in and around the Mälardalen region, inland from Stockholm. Organizationally, we are already well-equipped to achieve an annual production volume of 1,000 apartments. By adding a new production unit in Hässleholm in 2020, supplementing our existing one in Osby, we will have the internal production capacity to meet the above volumes with a margin.

In addition to the above targets, we will continue to focus on increasing efficiency in the construction phase, not only during 2020, but also in the longer term. For although we can certainly build high-quality homes at an attractive cost level, the fact remains that the homes we produce ourselves are also more efficient to manage in terms of cost and the environment. Although we are pleased with a surplus ratio of 68 percent after property management expenses for a portfolio consisting predominantly of housing, it should be added that we are extremely satisfied and proud that our concept buildings, produced in-house, generate even higher surpluses. At present, our concept buildings, produced in-house, show a surplus ratio of slightly more than 80 percent, compared with our portfolio of purchased properties, which reports a surplus ratio of slightly less than 60 percent. And that, my friends, is where you have the difference that makes a difference. Just think – from the concept buildings we produce in-house, we shareholders actually get to keep 20 percent more of the rent compared with the rent from our older buildings. The earnings that take five years for our older portfolio to produce we achieve in four years with our concept buildings produced in-house.

One of the reasons for the higher surplus ratio in the newly produced concept buildings is that their overall energy consumption was 32 percent lower and their water consumption 16 percent lower in 2019, compared with our purchased portfolio.

A sustainable future is a profitable future, for the environment and for us as shareholders!

We find ourselves at the beginning of a marathon race with an eternal investment horizon. Despite the race ahead being long, I can see that we maintained a high pace in 2019 with net asset value growing by 54 percent per share, including the new shares issued in the autumn, and by 36 percent excluding them. In addition, profit from property management grew by 25 percent, corresponding to our financial target of 20-percent growth per share and year in relation to profit from property management and net asset value. We seem to be in good shape, suggesting that we will maintain a rapid rate of growth in 2020.

We ended 2019 with our class B shares being launched on Nasdaq Stockholm's Mid Cap list. There was tremendous interest, with more than 40,000 applications, far exceeding the number of shares we had to allocate. What was most heartwarming was that most K-Fastigheter employees chose to subscribe for the issue, joining me as shareholders alongside many others. Our team spirit and sense of belonging have never been stronger, as we now progress united towards new and more ambitious objectives. We enter 2020 with approximately 3,700 shareholders. We hope to retain the confidence of these new partners on a journey that has only just begun. "

– Jacob Karlsson, February 2020

P R O P E R T Y P O R T F O L I O A S P E R 31 DECEMBER 2019

On 31 December 2019, the Group's property portfolio comprised 64 completed investment properties1 , as well as three out of four stages now being occupied in the Helsingborg Brigaden 7 & 8 project, distributed between a total 104,622 square metres of housing and 25,864 square metres of commercial space, and 13 ongoing construction projects, distributed between 43,897 square metres of housing and 588 square metres of commercial space. In addition, K-Fastigheter has 17 projects in progress at the project development phase at various stages of building permit application or project planning, of which eight are projects for which K-Fastigheter has yet to take possession of the land.

Of the property stocks, 77 percent was constructed after 2010 and 99 percent is assessed by Newsec to be in category A or B locations within the communities in which the Group operates. As of 31 December 2019, the contractual rent amounted to SEK 190.5 million, with an estimated operating surplus of SEK 138.6 million, corresponding to a surplus ratio of 73 percent. For our newly produced concept buildings, the corresponding surplus ratio is about 80 percent, and, for other properties in the portfolio, it is about 60 percent. Of the contractual rent, 85 percent pertains to housing or related rentals (such as parking) divided between the 1,711 apartments under property management at the end of the year. Contractual rent from commercial tenants is distributed between about 110 commercial contracts, with the largest tenant accounting for about 3 percent of the total contractual rental income.

At the end of the year, the book value of completed investment properties totalled SEK 3,606.9 million (2,404.8), with an average direct return requirement of 4.25 percent (4.46). The book value of new construction projects in progress amounted to SEK 447.7 million (482.2) and of undeveloped land to SEK 335.1 million (131.1) at the end of the year. On completion, the estimated market value of the new construction projects in progress amounts to SEK 1,618.5 million and to slightly more than SEK 3,400 million for properties currently in project development.

Of the property stocks, 92 percent of the property value is to be found in Skåne, with most of that, 43 percent, being located in Northeast Skåne (Hässleholm, Kristianstad, Osby), followed by Northwest Skåne (Helsingborg, Landskrona) at 41 percent.

1 Investment properties are properties that are held for the purpose of generating rental income or increased value or a combination of these.

Completed investment properties		Number		Lettable area, m2		Property value		Rental value			Property costs		Operating surplus
	Properties	Housing	Housing		Premises SEK million		SEK/m2 SEK million	SEK/m2	Letting ratio	Contractual rent, SEK million	SEK million	SEK/m2	SEK million	SEK/m2
Distribution of concept buildings
Low-Rise	23	435	32,718	0	1,060.8	32,423	51.1	1,562	98.7%	50.5	4.7	143	45.8	1,400
Lateral Low-Rise	6	625	31,564	543	1,300.4	40,503	62.0	1,931	92.3%	57.2	8.4	263	48.8	1,520
Apartment Block	3	91	5,955	0	195.6	32,846	10.5	1,760	98.9%	10.4	1.5	257	8.8	1,483
Other residential properties	23	553	34,018	2,935	644.4	17,438	44.2	1,195	99.3%	43.9	16.1	435	27.8	753
Commercial properties	9	7	367	22,386	405.7	17,831	28.8	1,267	99.1%	28.6	6.2	273	22.4	982
Total/average	64	1,711	104,622	25,864	3,606.9	29,885	196.6	1,507	96.9%	190.5	36.9	283	153.6	1,177
Geographic distribution
Northwestern Skåne	20	750	42,224	7,057	1,498.1	30,400	79.6	1,614	99.0%	78.8	16.6	337	62.1	1,261
Northeastern Skåne	38	709	47,574	18,661	1,541.7	23,276	89.1	1,346	94.3%	84.1	16.8	253	67.3	1,016
Southwestern Skåne	2	114	5,866	146	290.9	48,387	13.5	2,239	100%	13.5	1.6	269	11.8	1,970
Gothenburg	1	14	990	0	32.2	32,525	1.6	1,654	100%	1.6	0.2	159	1.5	1,495
Southern Småland	3	124	7,968	0	244.0	30,622	12.8	1,604	98.6%	12.6	1.7	219	10.9	1,362
Total/average	64	1,711	104,622	25,864	3,606.9	29,885	196.6	1,507	96.9%	190.5	36.9	283	153.6	1,177
Property administration											15.0	115
Total after property administration										190.5	51.9	398	138.6	1,062
Construction in progress, project properties		700	43,897	588	555.5
Construction in progress, other					10.5
Projects on properties in possession		630	41,267	0	178.6
Projects on properties not in possession		710	44,709	0
Undeveloped land					38.2
Site leaseholds					7.0
Total		3,751	234,495	26,452	4,396.7

Construction projects						Number		Lettable area, m2		Property value		Rental value		Investment (including land), SEK million1
in progress	Concept Municipality Category building	Construction	commenced Completed			Housing Premises	SEK	million SEK/m2	SEK	million SEK/m2	Estimated	Developed	Carrying amount
Hovrätten 20	Kristianstad	Housing	Other res. prop.	Jan '18	May '20	17	1,039	0	40.1	38,595	1.9	1,861	34.8	29.0	33.6
Intendenten 4 & 5	Hässleholm	Housing	Low-Rise	Apr '19	Jun '20	21	1,701	0	53.0	31,158	2.7	1,583	39.2	31.6	37.0
Tygelsjö	Malmö	Housing/T-O ass.	Low-Rise/T-O ass.	Feb '19	Jul '20	30	2,236	0
Brigaden 7 & 8	Helsingborg	Housing	Lateral Low-Rise	Dec '17	Sep '20	47	2,731	0	114.4	41,879	5.0	1,816	72.8	30.2	57.0
Pelikanen 27	Växjö	Housing	Apartment Block	Dec '18	Nov '20	54	3,495	0	126.0	36,052	6.3	1,814	108.1	82.1	80.8
Lyckan 1	Älmhult	Housing	Apartment Block	Mar '19	Dec '20	32	2,072	0	60.8	29,344	3.6	1,720	51.3	18.5	12.5
Magasinet 4	Hässleholm	Housing	Apartment Block	Feb '19	Dec '20	66	4,293	0	134.0	31,214	7.4	1,718	110.7	42.8	60.2
Björksäter 5	Hässleholm	Housing	Low-Rise	Sep '19	Feb '21	40	2,776	0	85.2	30,692	4.3	1,550	75.4	35.2	30.2
Höfånget 1	Malmö	Housing	Lateral Low-Rise	Sep '19	Jun '21	97	4,840	0	230.0	47,521	10.0	2,071	166.0	74.9	79.8
Nyponrosen 4	Helsingborg	Housing	Apartment Block	Dec '18	Aug '21	64	4,236	390	179.0	38,694	8.6	1,863	134.6	32.2	55.2
Stubbarp 33:27	Höganäs	Housing	Low-Rise	Dec '19	Sep '21	93	6,745	0	240.0	35,582	10.8	1,601	168.1	15.6	30.2
Taket 2	Växjö	Housing	Low-Rise	Dec '19	Oct '21	36	2,862	0	100.0	34,941	4.8	1,663	82.9	0.3	3.8
Sävenäs 131:12	Gothenburg	Housing	Lateral Low-Rise	Sep '19	Dec '21	103	4,871	198	256.0	50,503	11.5	2,278	157.7	45.3	75.2
Total						700	43,897	588	1,618.5	36,382	76.9	1,729	1,201.5	437.6	555.5

Construction projects and in project development		Lettable area, m2 Number				Property value		Rental value	Investment (including land), SEK million1
in progress	of homes	Housing	Premises	Total	SEK million	SEK/m2	SEK million	SEK/m	Estimated	Developed	Carrying amount
Distribution of concept buildings
Low-Rise	455	34,226	0	34,226	1,153.9	33,713	54.5	1,593	864.1	143.6	162.0
Lateral Low-Rise	1,040	59,296	198	59,494	2,577.8	43,330	115.1	1,934	1,776.8	248.1	309.8
Apartment Block	498	33,076	390	33,466	1,235.7	36,923	60.0	1,794	924.5	195.6	228.7
Other residential property	17	1,039	0	1,039	40.1	38,595	1.9	1,861	34.8	29.0	33.6
Low-Rise/T-O ass.	30	2,236	0	2,236	0.0	0	0.0	0	0.0	0.0	0.0
Total/average	2,040	129,873	588	130,461	5,007.5	38,383	231.6	1,775	3,600.2	616.2	734.1
Geographic distribution
Northwestern Skåne	384	25,818	390	26,208	977.1	37,281	44.7	1,706	701.1	110.1	174.5
Northeastern Skåne	422	29,016	0	29,016	940.9	32,427	48.1	1,658	725.8	218.0	240.4
Southwestern Skåne	675	39,330	0	39,330	1,598.1	40,634	71.2	1,810	1,102.7	121.9	126.8
Gothenburg	295	17,128	198	17,326	838.6	48,401	35.4	2,044	553.5	45.3	75.2
Southern Småland	216	14,861	0	14,861	536.6	36,108	26.1	1,757	423.4	120.9	117.1
Other	48	3,720	0	3,720	116.2	31,223	6.0	1,621	93.5	0.0	0.0
Total/average	2,040	129,873	588	130,461	5,007.5	38,383	231.6	1,775	3,600.2	616.2	734.1

1 Accrued investment refers to the total costs incurred in each construction project. The carrying amount refers to the consolidated value adjusted for Group eliminations and includes the calculated change of SEK 165.4 million in the value of investment properties.

Information in the interim report on completed investment properties includes assessments and assumptions. Contractual rent refers to the contract value on the balance sheet date recalculated at annual rate. Rental value refers to contractual rent plus estimated rent for vacancies and discounts recalculated at an annual rate. Property costs refer to budgeted property costs on an annual basis and are exclusive of property administration. The assessments and assumptions involve uncertainties and the disclosures above should not be viewed as a forecast.

7 Details in the interim report regarding construction projects and project development in progress are based on assessments of the size, focus and scope of construction projects and project development in progress, and of when projects are scheduled to commence and be completed. These details are also based on assessments regarding future investments and rental value. These assessments and assumptions should not be viewed as a forecast. The assessments and assumptions entail uncertainties regarding the execution, design and scale, scheduling, project costs and future rental value of the projects. Details of projects in progress are reviewed regularly and assessments and assumptions are adjusted as a result of projects in progress being completed or new ones being added, as well as due to changes in conditions. Financing has not been secured for projects where construction has yet to commence, meaning that financing of construction investments in project development represents a source of uncertainty.

K - F A S T I G H E T E R ' S C O N C E P T BUILDINGS

KRISTIANSTAD

Öllsjö 7:47 – 12 Low-Rise apartments

Low-Rise – flexible buildings offering considerable freedom of choice K-Fastigheter's flexible one to three-storey multi-family dwellings can be constructed either as semi-detached houses, terraced houses or link houses with one or two-storey apartments. The apartments are available in four sizes: one bedroom, living room and kitchen totalling 60 square metres; two bedrooms, living room and kitchen totalling 75 square metres; three bedrooms, living room and kitchen totalling 94 square metres on two storeys. To meet demand in each market, K-Fastigheter offers a free choice of floor plans in connection with each construction project.

Structural details:

Ground level foundation plate, aerated three-layer wooden frame, delivered in prefabricated units.

Lateral Low-Rise – variation and space efficiency

K-Fastigheter's neighbourhood-structure multi-family dwellings can be constructed up to ten storeys in height. There are two standard space-efficient apartment formats within Lateral Low-Rise buildings: one bedroom, living room and kitchen totalling 49 square metres and two bedrooms, living room and kitchen totalling 59 square metres. It is also possible to include apartments that are either larger or smaller. To meet market demand and offer the best possible use of building rights, K-Fastigheter has chosen to make its Lateral Low-Rise as adaptable as possible with regard to floor plans and with opportunities for underground garages and commercial premises on the ground floor.

Structural details:

Supporting concrete structure with flooring units and concrete separating walls between apartments and lightweight external wall units.

17

Apartment Block – the residential building for all locations

K-Fastigheter's square-footprint multi-family dwellings can be constructed with heights of four to ten storeys. K-Fastigheter's apartment blocks have four apartments on each floor: two with one bedroom, living room and kitchen totalling 62 square metres and two with two bedrooms, living room and kitchen totalling 71 square metres. All apartments are equipped with spacious 27 square-metre balconies facing two directions. To enable construction of as many building rights as possible, several designs have been developed for the ground floor. The ground floor can be constructed with a mezzanine or, where the terrain is uneven, with a semi-basement. Apartment blocks can also be adapted to meet the different requirements set for different building rights regarding storey height, any premises, internal/external refuse rooms and storage rooms for the apartments. Regardless of the design of the ground floor, the second storey and upwards are identical in design.

Structural details:

Entirely concrete structure with sandwich exterior walls, uniform walls separating apartments and floor units.

HELSINGBORG

Brigaden 7 & 8 – 179 Lateral Low-Rise apartments

HÄSSLEHOLM

Tre Överstar 7 – 29 Apartment Block apartments

P R O J E C T S C O M P L E T E D A N D C O M M E N C E D I N T H E F O U R T H QUARTER OF 2019

STUBBARP

Helsingborg

Växjö

COMPLETED

Lateral Low-Rise and Low-Rise buildings in Kristianstad

At the Hammar 9:195 property in the C4 area of Kristianstad, K-Fastigheter has constructed 123 apartments, divided between 99 apartments in accordance with our Lateral Low-Rise concept and 24 apartments in accordance with our Low-Rise concept. During the quarter, the third and final stage was completed, with tenants moving into a total of 52 apartments.

Facts:

The third stage was ready for tenants to move in on 1 November 2019. The project has a total lettable area of 7,457 square metres and a total rental value of SEK 13.3 million, of which the third stage accounts for approximately SEK 6.3 million.

Lateral Low-Rise in Helsingborg

At the Brigaden 7 and 8 properties, in the Fredriksdal area of Helsingborg, K-Fastigheter has constructed 179 apartments in accordance with our Lateral Low-Rise concept, with 10,134 square metres of living area distributed between four buildings. During the fourth quarter, the third of the four buildings, with a total 30 apartments, was completed and tenants moved in.

Facts:

The third stage was ready for tenants to move in on 1 December 2019. The project has a total lettable area of 10,134 square metres and a total rental value of SEK 19.9 million, of which the third stage accounts for approximately SEK 3.0 million.

COMMENCED

93 new Low-Rise apartments in Viken

At the Stubbarp 33:27 property in picturesque Viken, just north of Helsingborg, in December, K-Fastigheter commenced construction of 93 Low-Rise apartments close to the beach and recreation areas and at a convenient commuting distance to/from Helsingborg.

Facts:

The 93 apartments will be constructed in accordance with the Low-Rise concept with a total lettable area of 6,745 square metres. The rental value amounts to SEK 10.8 million and tenants are expected to move in during the third quarter of 2021.

36 new Low-Rise apartments in Hässleholm

In December, at the Taket 2 property in Vikaholm, Växjö, K-Fastigheter commenced construction of 36 Low-Rise apartments in collaboration with C4 Hus AB.

Facts:

The interiors of the 36 apartments will be constructed in accordance with the Low-Rise concept with a total lettable area of 2,862 square metres. The rental value amounts to SEK 4.8 million and tenants are expected to move in during the fourth quarter of 2021.

S U M M A R Y C O N S O L I D AT E D S TAT E M E N T OF COMPREHENSIVE INCOME

(SEK million)	2019 Oct–Dec	2018 Oct–Dec	2019 Jan–Dec	2018 Jan–Dec
Rental income	44.7	28.6	156.8	96.6
Project and contracting sales	9.5	4.0	28.6	26.8
Other operating income	0.9	1.1	1.9	1.4
Net sales	55.1	33.7	187.3	124.8
Operation	-7.2	-4.8	-23.5	-15.4
Maintenance	-3.5	-1.7	-7.5	-4.5
Property tax	-1.5	-2.2	-3.6	-2.7
Property administration	-4.2	-3.3	-15.0	-12.3
Property management costs	-16.3	-12.0	-49.5	-34.8
Project and contracting costs	-7.4	-12.7	-26.8	-35.3
Gross profit	31.3	9.0	111.0	54.7
Of which, gross profit from property management (operating surplus)	28.1	16.8	107.3	62.2
Of which, gross profit from project and contracting operations	3.3	-7.9	3.7	-7.6
Central administration	-15.7	-7.0	-42.1	-11.6
Depreciation/amortization and impairment	-12.2	-1.3	-15.2	-1.3
Profit from participations in Group, associated and jointly controlled companies	19.6	8.3	61.0	27.7
Net interest income	-10.2	-6.9	-35.3	-16.8
Profit before changes in value	12.9	2.1	79.3	52.7
Of which, profit from property management	8.6	7.1	52.9	41.1
Change in value of investment properties	148.0	78.3	339.8	243.6
Changes in value of derivatives and other	32.2	-19.1	12.7	-8.6
Profit before tax	193.2	61.5	431.8	287.8
Tax on profit for the period	-25.2	-11.4	-66.5	-42.9
Profit for the period	167.9	50.0	365.3	244.8
Other comprehensive income	0.0	0.0	0.0	0.0
Comprehensive income for the period	167.9	50.0	365.3	244.8
Profit for the period attributable to
Parent Company's shareholders	167.9	50.8	365.3	244.8
Non-controlling interests	0.0	-0.9	0.0	0.0
Profit after tax per share, SEK/share	5.94	2.00	14.14	9.79

P E R F O R M A N C E A N A LY S I S JANUARY – DECEMBER 2019

INCOME

Net sales for full-year 2019 amounted to SEK 187.3 million (124.8). For the fourth quarter of 2019, net sales amounted to SEK 55.1 million (33.7). Rental income for the full-year amounted to SEK 156.8 million (96.6), an increase of 62 percent. For the fourth quarter of 2019, rental income amounted to SEK 44.7 million (28.6). Of the increase of SEK 60.2 million for the full-year, 40 percent was attributable to the completion of new construction projects and acquisitions, of which the distribution of the properties in Balder Skåne AB accounted for approximately SEK 10.3 million. The remaining 60 percent is attributable to full-year effects of properties completed and acquired in 2018 and increased rents in comparable holdings. The rental value of the investment properties completed as per 31 December 2019 amounted to SEK 196.6 million (133.4), an increase of 47 percent on the preceding year and of 25 percent compared with rental income for full-year 2019. At the end of the year, the letting ratio was 96.9 percent (99.3) and the average letting ratio during the year was 96.8 percent (98.8). The lower letting ratio for fullyear 2019, compared with full-year 2019, is attributable to a high level of project completions in December 2018 and a sustained high level of project completions during 2019, which generally entails a somewhat lower financial letting ratio initially. In those parts of the stocks that have been under management for a longer time, the financial letting ratio remains very high.

Rental income trend (SEK million)	2019 Jan–Dec	2018 Jan–Dec
Properties owned at start of year	133.0	68.9
Completed properties	12.9	6.0
Acquired properties	10.9	21.7
Divested properties	0.0	0.0
Rental income	156.8	96.6

Income from project and contracting operations amounted to SEK 301.9 million (312.1), of which SEK 273.3 million (285.3) related to construction for Group companies that has been capitalized for the Group's own purposes. Assignments for external clients accounted for SEK 28.6 million (26.8). The change between the periods was primarily due to relatively more projects being at the early construction phase in 2019, at which the rate of production is generally lower, and a couple of projects at later phases of construction being carried out by subcontractors.

OPERATING COSTS

Property management costs totalled SEK 49.5 million (34.8) for the full-year, corresponding to an increase of 42 percent compared with the preceding year. The increase is primarily attributable to full-year effects in direct property costs for properties completed and acquired in 2018, as well as increased costs for property administration and, to a lesser extent (33 percent) to properties completed and acquired in 2019. Property administration amounted to SEK 15.0 million (12.3). The surplus ratio for the year amounted to 68.4 percent (64.4), with the

Property cost trend (SEK million)	2019 Jan–Dec	2018 Jan–Dec
Properties owned at start of year	-29.7	-15.1
Completed properties	-3.1	-1.2
Acquired properties	-1.8	-6.2
Divested properties	0.0	0.0
Direct property costs	-34.5	-22.5
Property administration	-15.0	-12.3
Property management costs	-49.5	-34.8

improvement being driven by a high degree of completion and increased management efficiency.

The costs for the project and construction operations partly comprise direct project-related costs and partly fixed costs for the construction organization. The part of the operations involving external construction is reported in the Income Statement. Project and contracting operations for the Group's own property management activities are capitalized as work for the Group's own purposes and are reported net in the Income Statement under the item Project and contracting costs.

CENTRAL ADMINISTRATION COSTS, DEPRECIATION/ AMORTIZATION AND IMPAIRMENT

Central administration, which includes company management, HR, IT and finance, amounted to SEK 42.1 million (11.6) for the year. Administration costs include costs of SEK 13.3 million (3.4) for the stock exchange launch that was implemented. Adjusted for costs related to the implemented stock exchange launch, the increase is primarily attributable to the expansion of the central organization to meet future growth and the demands imposed on a listed company, costs which are partly non-recurring.

Depreciation/amortization and impairment for the year amounted to SEK 15.2 million (1.3). This includes goodwill impairment that had an impact of SEK 2.3 million (0.0) following assessment. Impairment for the year includes SEK 4.3 million for the scrapping/demolition of older buildings in the T4 area in Hässleholm to prepare for future construction, and SEK 2.4 million for the scrapping of construction components in connection with the company's K-Fast 2.0 renovation programme.

PROFIT FROM PARTICIPATIONS IN GROUP, ASSOCIATED AND JOINTLY CONTROLLED COMPANIES

Profit from participations in Group and associated companies amounted to SEK 61.0 million (27.7), of which SEK 38.0 million consists of K-Fastigheter's participation (50 percent) in the profit of Novum Samhällsfastigheter AB, which sold two public building projects in Falkenberg and Hässleholm in the second and fourth quarters of 2019. The remaining SEK 23.0 million consists of earnings from Balder Skåne AB, the operations of which were discontinued in the first half of 2019 by distributing the assets of the Group to its shareholders as per 1 April 2019. For the corresponding period in 2018, profit mainly comprised earnings from Balder Skåne AB.

NET INTEREST INCOME

Net interest income for the full-year amounted to SEK 35.3 million (16.8). The increase is partly due to increased interest-bearing liabilities attributable to acquisitions of investment properties and new construction, and partly due to the Company having worked actively to reduce its interest rate and refinancing risks. At the end of the year, the average interest level was 1.90 percent (1.71), including the effects of interest rate derivatives.

The interest coverage ratio for the full-year amounted to a multiple of 2.6 (3.5) and was adversely affected by scrappings and goodwill impairment, as well as by costs for the stock exchange launch, that is, non-recurring items. Excluding these items, the interest coverage ratio was a multiple of 2.8 (3.5).

PROFIT FROM PROPERTY MANAGEMENT

Profit from property management for the fourth quarter of 2019 amounted to SEK 8.6 million (7.1) and for full-year 2019 to SEK 52.9 million (41.1). Profit from property management per share amounted to SEK 2.05 (1.64), which is an increase of 25 percent on the preceding year. Profit from property management has been affected positively by the continued sharp increase in rental income and the stable surplus ratio, and negatively by increased central costs, impairment and reduced net interest income, with a large proportion of non-recurring central costs and impairment in connection with the preparations for the stock exchange listing that has been implemented.

CHANGES IN VALUE

For full-year 2019, the unrealized changes in the values of investment properties amounted to SEK 339.8 million (243.6), distributed between SEK 153.4 million (119.5) for properties under management and SEK 186.4 million (124.1) for construction projects in progress. For the fourth quarter of 2019, the unrealized change in the values of investment properties amounted to SEK 148.0 million (78.3), of which SEK 94.2 million (40.8) related to properties under management and SEK 53.8 million (37.5) related to investment properties under construction.

Change in value (SEK million)	2019 Jan–Dec	2018 Jan–Dec
Change in net operating income	26.5	17.3
Construction projects in progress	186.4	124.1
Land and unutilized building rights	12.7	34.4
Change in return requirement	51.2	15.3
Acquisitions	62.9	48.4
Divestments	0.0	4.1
Total	339.8	243.6

Of unrealized changes in value for new construction in progress, properties completed during full-year 2019 accounted for SEK 49.6 million (20.1). The remaining SEK 136.8 million (104.0) is attributable to properties that were under construction at the end of the year. At the end of the year, the direct return requirement in the valuation of new construction in progress amounted to 4.02 percent (4.09)

Of unrealized changes in value for properties under management, SEK 62.9 million (48.4) was related to acquisitions during the year, which were primarily the properties distributed from Balder Skåne AB, which affected unrealized changes in the values of investment properties by SEK 46.3 million for the full year. Of the remaining unrealized changes in the values of investment properties, improved net operating income contributed SEK 26.5 million (17.3), while changed valuation assumptions contributed SEK 63.9 million (49.7). In total, the average direct return requirement for properties under management was 4.25 percent (4.46). The average direct return requirement for the entire property portfolio, including undeveloped land and new construction in progress, amounted to 4.18 percent (4.33) at the end of the year.

Changes in the values of derivatives and other items amounted to SEK 12.7 million (negative 8.6) for the full-year, and amounted to SEK 2019 million (negative 32.2) for the fourth quarter. The trend in the fourth quarter was caused primarily by higher market rates, which had a positive impact on the market value of the Group's interest rate derivatives. The Group's derivatives consist of interest rate derivatives, intended to mitigate the Group's interest rate risk. Unrealized changes in the values of derivatives affected earnings negatively by SEK 6.6 million (5.5) over the full-year. The fair value of the Group's derivatives was negative in the amount of SEK 12.8 million (6.2) at the end of the year. Other changes in value include realized changes in the

values of securities, which amounted to SEK 19.3 million (negative 3.0) for the year, comprising disposals of securities. The Group's securities portfolio, which mainly comprised listed holdings in Swedish property companies, was wound up in the second and third quarters of 2019, with the reported value at the end of the year amounting to SEK 0.0 million (91.6).

For further information on K-Fastigheter's valuation principles, see the 2018 Annual Report (Valuation section or Note 15).

TAX

Current tax for the year amounted to SEK 3.8 million (2.0). Deferred tax amounted to SEK 62.7 million (40.9), affected by unrealized changes of SEK 339.8 million (243.6) in the values of properties.

Tax has been calculated at 21.4 percent on current taxable profit. Deferred tax liabilities and tax receivables have been calculated at the lower tax rate of 20.6 percent, applicable from 2021, since K-Fastigheter estimates that the deferred tax will not be settled until 2021 or later. The new tax rules also entail certain restrictions on the tax deductible for interest costs, which is expected to entail an unutilized net interest deductible of approximately SEK 31.2 million for full-year 2019. Since this effect primarily affects the companies within the Group that had properties under construction during the year (with low or zero earnings relative to interest on construction credits) and the Parent Company, for which the costs of the stock exchange listing contributed to a negative tax result, and since none of these effects are expected to prevail in these companies in the future, the tax deductible for interest expenses has been booked as a deferred tax asset of SEK 6.4 million.

On 31 December 2019, K-Fastigheter's accumulated tax loss carryforwards were estimated at SEK 59.2 million (13.0), which together with interest rate derivatives of SEK 12.8 million (6.6) and the aforementioned deductions for interest expenses comprise the basis of the Group's deferred tax assets, which amounted to SEK 21.4 million (2.2). The deferred tax liability relates primarily to temporary differences between fair value and the residual tax base of the properties. On 31 December 2019, the fair value of the properties exceeded their tax base by SEK 1,864.5 million (1,237.9), of which SEK 544.7 million (302.4) is attributable to the acquisition date. The deferred tax liability amounted to SEK 310.2 million (228.2) at the end of the year. The balance sheet for 31 December 2019 states the net value of the deferred tax assets and deferred tax liabilities, which is why the figure for the comparison year has also been adjusted.

PROFIT FOR THE PERIOD

For the fourth quarter of 2019, profit for the period amounted to SEK 167.9 million (50.0) after tax and earnings per share amounted to SEK 5.94 (2.00).

For full-year 2019, profit for the period amounted to SEK 365.3 million (244.8) after tax and earnings per share amounted to SEK 14.14 (9.79).

Tax calculation, 31 Dec 2019 (SEK million)	2019 Jan–Dec	Base
Tax on profit before tax	431.8
Tax rate, %	21.4%
Tax in accordance with applicable tax rate	-92.4	431.8
Tax attributable to previous years	-1.1	4.9
Effect of changed tax rates	0.6	-2.6
Non-taxable income	17.2	-80.3
Other unrecognized costs	9.3	43.3
Total	-66.5	310.6
Reported effective tax
Reported in the Income Statement	-66.5
Percentage of profit before tax, %	15.4%
Deferred tax assets attributable to:
Tax-loss carryforwards	12.2	59.2
Net interest income	6.4	31.2
Properties	0.1	0.3
Interest-rate derivatives	2.6	12.8
Other items	0.0	0.2
Total	21.4	103.7
Deferred tax liability attributable to:
Properties, completed	271.9	1,319.8
Properties, under construction	34.1	165.4
Untaxed reserves	0.7	3.4
Other items	3.6	17.5
Total	310.2	1,560.1

Kvarteret Spelet, Löjtnant Granlundsväg in Hässleholm.

14 K-Fast Holding AB Year-end report 2019

SUMMARY CONSOLIDATED STATE - MENT OF FINANCIAL POSITION

	2019	2018
(SEK million)	31 Dec	31 Dec
Assets
Intangible non-current assets
Goodwill	0.0	2.3
Total intangible non-current assets	0.0	2.3
Tangible non-current assets
Investment properties	4,396.7	3,018.1
Owner-occupied properties	19.9	7.5
Equipment	14.0	7.3
Total tangible non-current assets	4,430.6	3,032.9
Financial non-current assets
Profit from participations in associated and	43.8	116.7
jointly controlled companies and other non
current receivables
Total financial non-current assets	43.8	116.7
Total non-current assets	4,474.5	3,151.9
Current assets
Inventories	0.2	0.3
Accounts receivable	43.6	30.0
Other receivables	29.6	15.4
Prepaid costs and accrued income	25.5	5.2
Current investments	0.0	91.6
Cash and cash equivalents	779.0	52.8
Total current assets	877.9	195.2
Total assets	5,352.3	3,347.1

	2019	2018
(SEK million)	31 Dec	31 Dec
Equity and liabilities
Equity
Share capital	54.2	0.1
Other capital contributions	877.9	0.0
Profit brought forward including the profit for the period	1,306.4	981.1
Total equity attributable to Parent Company shareholders	2,238.5	981.2
Capital attributable to non-controlling interests	0.0	0.0
Total equity	2,238.5	981.2
Non-current liabilities
Deferred tax liability	288.9	226.0
Long-term interest-bearing liabilities	2,281.3	1,787.3
Derivative instruments	12.8	6.2
Other provisions and non-current liabilities	18.1	19.4
Total non-current liabilities	2,601.0	2,038.9
Current liabilities
Current interest-bearing liabilities	363.1	207.5
Accounts payable	57.6	31.9
Current tax liabilities	5.7	3.2
Other current liabilities	23.2	37.6
Accrued costs and prepaid income	63.3	47.0
Total current liabilities	512.9	327.1
Total liabilities	3,113.9	2,365.9
Total equity and liabilities	5,352.3	3,347.1

C O N S O L I D AT E D S TAT E M E N T O F C H A N G E S I N E Q U I T Y

(SEK million)	Number of shares outstanding	Share capital	Other capital contributions	Profit brought forward	Total equity
Equity, as per 1 January 2018	500	0.1		762.5	762.6
Comprehensive income for the period				244.8	244.8
Acquisitions of non-controlling interests				-18.6	-18.6
Dividend approved by Extraordinary General Meeting				-7.6	-7.6
Equity, as per 31 December 2018	500	0.1		981.1	981.2
Comprehensive income for the period				365.3	365.3
Bonus issue and share split	24,999,500	39.9		-39.9	0.0
Capital contributions after deduction of transaction costs	8,888,528	14.2	877.9		892.1
Closing balance as per 31 December 2019	33,888,528	54.2	877.9	1,306.4	2,238.5

The Extraordinary General Meeting on 19 August 2019 approved a bonus issue and share split 1:50,000. Due to this disclosure, the number of shares has been recalculated.

B A L A N C E S H E E T AS PER 31 DECEMBER 2019

INVESTMENT PROPERTIES

At the end of the year, the value of the investment properties totalled SEK 4,396.7 million (3,018.1), distributed between completed investment properties at SEK 3,606.9 million (2,404.8), undeveloped land and land being developed at SEK 335.1 million (131.1), site leases at SEK 7.0 million (0.0) and construction in progress at SEK 447.7 million (482.2). During the full-year, SEK 505.6 million (441.9) was invested in new construction, extensions and remodelling, with a total of six completed projects and three out of four stages in the construction of the Helsingborg / Brigaden 7 & 8 properties having been reclassified from construction projects in progress to completed investment properties, corresponding to a value of SEK 718.9 million (492.3). During full-year 2019, acquisitions were made for SEK 557.7 million (406.7) including distributed assets of Balder Skåne AB for SEK 224.2 million. No significant disposals were conducted during the year.

Investment properties	2019 Jan–Dec	2018 Jan–Dec
Opening carrying amount	3,018.1	1,951.2
of which, completed investment properties	2,404.8	1,441.2
of which, undeveloped land	131.1	102.7
of which, construction in progress	482.2	407.3
+ Acquisitions	557.7	406.7
+ New construction	499.7	436.8
+ Extensions and rebuilds	5.9	5.1
– Divestments	-2.3	-12.9
– Reclassification as Owner-occupied properties	-9.3	-7.5
– Other reclassifications	-12.9	-0.8
+/- Unrealized changes in value	339.8	239.6
of which, completed investment properties	140.7	81.1
of which, undeveloped land	12.7	34.4
of which, construction in progress	186.4	124.1
Closing carrying amount	4,396.7	3,018.1
of which, completed investment properties	3,606.9	2,404.8
of which, undeveloped land	335.1	131.1
of which, site leaseholds	7.0	0.0
of which, construction in progress	447.7	482.2

Completed investment properties and projects in progress are valued quarterly, partly through internal valuation and partly through independent property valuers. For further information on K-Fastigheter's valuation process and method, see the 2018 Annual Report (Note 15).

CASH AND CASH EQUIVALENTS

At the end of the year, cash and cash equivalents amounted to SEK 779.0 million (52.8). The increase in cash and cash equivalents is primarily due to the new share issue in connection with the stock exchange listing on Nasdaq Stockholm in November 2019. In addition, there is an unutilized overdraft facility of SEK 90 million (20).

Net asset value		31 Dec 2019 SEK million SEK/share		31 Dec 2018 SEK million SEK/share
Equity in accordance with the Balance Sheet	2,238.5	66.1	981.2	39.2
Reversal
Derivatives in accordance with the Balance Sheet	12.8	0.4	6.2	0.2
Deferred tax liability in accordance with the Balance Sheet	310.2	9.2	228.2	9.1
Deduction
Deferred tax assets in accordance with the Balance Sheet	21.4	0.6	2.2	0.1
Long-term net asset value (NAV)	2,540.2		75.0 1,213.4	48.5

In the second and third quarters, the Group wound up its securities portfolio, which, at the end of the year, had a carrying amount of SEK 0.0 million (91.6), of which SEK 0.0 million (69.7) has been posted as collateral.

EQUITY AND NET ASSET VALUE

At the end of the year, consolidated equity attributable to the Parent Company's shareholders amounted to SEK 2,238.5 million (981.2), corresponding to SEK 66.05 per share (39.25). The increase is explained by the profit of SEK 365.3 million (244.8) for the full-year, as well as the new share issues implemented in the third and fourth quarters that raised net proceeds of SEK 892.1 million (0.0).

At the end of the year, the long-term net asset value (NAV) amounted to SEK 2,540.2 million (1,213.4), corresponding to SEK 74.96 per share (48.54). The long-term net asset value per share has increased by 54 percent compared with 31 December 2018.

INTEREST-BEARING LIABILITIES

At the end of the year, consolidated interest-bearing liabilities amounted to SEK 2,644.3 million (1,994.8), of which SEK 363.1 million (207.5) was classified as current interest-bearing liabilities. Interest-bearing liabilities are distributed between first mortgages for completed investment properties of SEK 2,331.9 million (1,606.6), construction credits of SEK 303.2 million (318.4), leasing liabilities of SEK 9.2 million (0.0) and operating credits of SEK 0.0 million (69.7). The loan-to-value ratio for the Group's completed investment properties amounted to 40.2 percent (60.4). The increase in interest-bearing liabilities is primarily explained by the financing of investments in new construction, extensions and remodelling during the year, as well as acquisitions of building rights for future construction. The decreased loan-to-value ratio is explained by the net proceeds of the new share issues implemented in the third and fourth quarters.

At the end of the year, the Group had contracted credit agreements of SEK 3,239.7 million (2,329.8), of which SEK 2,331.9 million (1,603.6) related to the financing of completed investment properties, of which SEK 322.0 million (176.0) mature for renegotiation within the next 12 months. Beyond the financing of completed investment properties, contracted credit agreements comprise building credits of SEK 817.8 million (636.2) and overdraft facilities and covered loans of SEK 90.0 million (90.0). At the end of the year, construction credits, and overdraft facilities and covered loans had been utilized in the amount of SEK 303.2 million (318.4) and SEK 0.0 million (69.7) respectively. On 31 December 2019, the Group's total contracted and unutilized credit facilities amounted to SEK 90 million (20), excluding construction credits.

As per 31 December 2019, the average credit term for the Group's interestbearing liabilities, relating to completed investment properties and operational premises was 3.2 years (3.2).

Credit and interest maturity structure, 31 Dec 2019 (excl. construction credits and overdraft facilities)

	Interest maturity		Credit maturity
Term	Amount, SEK million	Average interest	Credit agreements, SEK million	Utilized, SEK million
0-1 years	1,124.9	1.62%	322.0	322.0
1-2 years	7.0	3.52%	207.8	207.8
2-3 years	100.0	2.01%	189.8	189.8
3-4 years	100.0	2.20%	1,144.7	1,144.7
4-5 years	300.0	1.84%	467.7	467.7
> 5 years	700.0	2.25%	0.0	0.0
Total	2,331.9	1.90%	2,331.9	2,331.9

K-Fastigheter currently works exclusively with variable interest rate loans. Interest rate derivatives, primarily interest rate swaps, are used to adjust the period of fixed interest. Nominally, the swap portfolio totalled SEK 1,207.0 million (607.0) at the end of the year. The average period of fixedinterest on the Group's interest-bearing liabilities related to investment and business properties was 3.3 years (2.7) and the average interest rate was 1.90 percent (1.71), including the effects of interest rate derivatives, and 1.62 percent (1.31), excluding the effects of interest rate derivatives. The total proportion of variable interest rates in relation to interestbearing liabilities related to investment and business properties was 48 percent (62) and the interest rate sensitivity in the event of a 1 percentage point shift in loan rates amounted to SEK 11.2 million (10.0).

INTEREST-RATE DERIVATIVES

To manage interest rate risk, the Group uses interest rate derivatives. Over time, changes in value arise in the interest rate derivative portfolio, primarily due to changed market interest rates. In the Balance Sheet, derivative instruments are reported at fair value as current or non-current assets or liabilities based on the term of the derivative, even where no amount is to be settled in cash. At the end of the year, the fair value of the derivative portfolio was negative in the amount of SEK 12.8 million (6.2).

For further information on K-Fastigheter's financial risks and financial policy, see the 2018 Annual Report (Note 20).

LEASES

Over the full-year, the Group expensed leasing fees of SEK 142 thousand, which were attributable to low-value leases. The Group has no short-term leases or variable leasing fees.

		Right-of-use assets
(SEK million)	Site leaseholds	Vehicles	Total	Leasing liabilities
As per 1 January 2019	0.0	1.4	1.4	1.4
Additional agreements	7.0	1.9	8.9	8.9
Amortization and depreciation	0.0	-1.0	-1.0	0.0
Terminated agreements	0.0	-0.2	-0.2	-0.5
Revaluations of agreements	0.0	0.0	0.0	0.0
Interest costs	0.0	0.0	0.0	-0.1
Leasing fees	0.0	0.0	0.0	-0.6
As per 31 December 2019	7.0	2.1	9.2	9.2

SEGMENT REPORTING

Group management currently identifies the following three business areas as its operating segments: Property management, Project development and Construction. The operating segments are monitored by the Group's CEO, the Board of Directors and the management team.

Jan–Dec 2019 Income Statement (SEK million)	Property management	Project development Construction		Other	Group
Rental income	156.8	0.0	0.0	0.0	156.8
Other operating income	0.0	0.0	30.5	0.0	30.5
Operating costs	-49.5	0.0	-26.8	0.0	-76.3
Gross profit	107.3	0.0	3.7	0.0	111.0
Central administration costs	-14.0	-14.0	-14.0	0.0	-42.1
Depreciation/amortization and impairment	-5.1	-5.1	-5.1	0.0	-15.2
Profit from participations in associated companies*	0.0	0.0	0.0	61.0	61.0
Net interest income	-35.3	0.0	0.0	0.0	-35.3
Profit before changes in value	52.9	-19.1	-15.4	61.0	79.3
Value change, properties	153.4	186.4	0.0	0.0	339.8
Changes in value of derivatives and other	-6.6	0.0	0.0	19.3	12.7
Profit before tax	199.7	167.3	-15.4	80.3	431.8
Tax	0.0	0.0	0.0	-66.5	-66.5
Profit for the period	199.7	167.3	-15.4	13.7	365.3
31 Dec 2019 Balance Sheet (SEK million)	Property management	Project development Construction		Other	Group
Non-current assets	4,001.6	447.7	17.3	29.4	4,495.9
Current assets	53.0	0.0	13.8	811.1	877.9
Total assets	4,054.6	447.7	31.0	840.5	5,373.7
Non-current liabilities	2,280.8	303.2	8.5	29.9	2,622.4
Current liabilities	421.7	0.0	63.5	27.7	512.9
Total liabilities	2,702.5	303.2	72.0		57.6 3,135.3
Jan–Dec 2018 Income Statement (SEK million)	Property management	Project development Construction		Other	Group
Rental income	96.6	0.0	0.0	0.0	96.6
Other operating income	0.4	0.0	27.8	0.0	28.2
Operating costs	-34.8	0.0	-35.3	0.0	-70.2
Gross profit	62.2	0.0	-7.6	0.0	54.7
Central administration costs	-3.9	-3.9	-3.9	0.0	-11.6
Depreciation/amortization and impairment	-0.4	-0.4	-0.4	0.0	-1.3
Profit from participations in associated companies*	0.0	0.0	0.0	27.7	27.7
Net interest income	-16.8	0.0	0.0	0.0	-16.8
Profit before changes in value	41.1	-4.3	-11.9	27.7	52.7
Value change, properties	119.2	124.1	0.3	0.0	243.6
Changes in value of derivatives and other	0.0	0.0	0.0	-8.6	-8.6
Profit before tax	160.3	119.8	-11.6	19.1	287.7
Tax	0.0	0.0	0.0	-42.9	-42.9
Profit for the period	160.3	119.8	-11.6	-23.8	244.8
31 Dec 2018 Balance Sheet (SEK million)	Property management	Project development Construction		Other	Group
Non-current assets	2,638.2	482.2	17.0	16.8	3,154.1
Current assets	36.5	0.0	11.3	147.5	195.3
Total assets	2,674.6	482.2	28.2		164.3 3,349.4
Non-current liabilities	1,127.4	318.4	1.6	549.9	1,997.2

* Profit from participations in Group, associated and jointly controlled companies.

Total liabilities 1,198.7 318.4 45.3 577.4 2,139.7

S U M M A R Y C O N S O L I D AT E D CASH FLOW STATEMENT

	2019	2018	2019	2018
Consolidated Cash flow Statement (SEK million)	Oct–Dec	Oct–Dec	Jan–Dec	Jan–Dec
Operating activities
Gross profit adjusted for central administration, depreciation/amortization and impairment	3.5	0.6	53.7	41.7
Adjustment for items not affecting cash flow	12.9	1.3	15.2	1.3
Gain realized on divestment of subsidiary	0.0	8.8	0.0	10.8
Dividend received	0.0	7.5	37.1	11.7
Net interest income	-10.2	-6.8	-35.3	-16.8
Tax paid/received	4.9	5.3	-1.2	-0.9
Cash flow from operating activities before changes in working capital	11.1	16.6	69.4	47.9
Cash flow from changes in working capital
Change in operating receivables	1.2	-1.3	-47.5	18.1
Change in operating liabilities	22.8	25.5	27.6	-25.5
Cash flow from operating activities	35.0	40.8	49.5	40.5
Investing activities
Investments in Group, associated and jointly controlled companies	0.0	-14.0	-0.1	-14.0
Property investments	-211.1	-104.9	-450.9	-395.0
Investments in machinery and equipment	-4.0	-0.3	-6.7	-2.8
Investments in construction in progress	-146.0	-124.3	-513.6	-453.6
Current investments	0.0	-4.1	0.0	-8.2
Disposals of current investments	0.0	0.0	110.9	0.0
Investments in other financial non-current assets	-0.1	-18.7	-5.4	-18.7
Disposals of properties	2.3	6.0	2.3	10.8
Cash flow from investing activities	-359.0	-260.5	-863.5	-881.5
Financing activities
Borrowings	168.8	243.0	689.2	897.5
Loan amortizations	-10.9	9.4	-41.1	-6.4
Capital contributions	874.2	0.0	892.1	0.0
Dividend paid	0.0	-1.6	0.0	-7.6
Cash flow from financing activities	1,032.0	250.8	1,540.3	883.5
Cash flow for the period	708.1	31.1	726.3	42.5
Opening cash and cash equivalents	71.0	21.6	52.7	10.3
Closing cash and cash equivalents	779.0	52.7	779.0	52.8

Cash and cash equivalents in the cash flow statement refer in their entirety to cash and bank balances.

PA R E N T C O M PA N Y I N C O M E STATEMENT AND BALANCE SHEET

PARENT COMPANY INCOME STATEMENT

(SEK million)	2019 Jan–Dec	2018 Jan–Dec
Operating income
Net sales	0.3	0.0
Total operating income	0.3	0.0
Operating costs
Other external costs	-31.8	-7.7
Personnel costs	-11.7	-3.9
Depreciation of tangible non-current assets	-0.1	0.0
Total operating costs	-43.6	-11.6
Gross profit	-43.3	-11.6
Profit from financial items
Profit from participations in Group, associated and jointly controlled companies	124.0	12.4
Net financial items	-12.2	-5.9
Profit after financial items	68.5	-5.1
Appropriations	26.8	14.8
Profit before tax	95.3	9.7
Tax on profit for the period	12.4	0.5
Comprehensive income for the period	107.6	10.2

PARENT COMPANY BALANCE SHEET

	2019	2018
Assets (SEK million)	31 Dec	31 Dec
Tangible non-current assets
Equipment	0.5	0.1
Total tangible non-current assets	0.5	0.1
Financial non-current assets
Participations in Group companies	626.4	368.9
Receivables from Group companies	865.4	406.3
Participations in associated companies	0.1	15.5
Deferred tax receivables	13.6	1.2
Total financial non-current assets	1,505.5	791.9
Total non-current assets	1,506.0	792.0
Current assets
Receivables from Group companies	173.5	145.0
Receivables from associated companies	16.6	8.1
Current tax receivables	0.8	0.3
Other current receivables	22.5	1.7
Cash and cash equivalents	771.2	45.9
Total current assets	984.7	200.9
Total assets	2,490.7	992.8

PARENT COMPANY

The Parent Company holds no properties of its own. The Parent Company maintains Group-wide functions for administration, property management and financing.

Sales in the Parent Company primarily relate to services invoiced to Group companies. The Parent Company's gross loss for full-year 2019 was SEK 43.6 million (11.6), affected by costs of SEK 13.3 million (3.4) for preparing for the stock exchange launch. Adjusted for the costs of preparing the stock exchange listing, the increase in the Parent Company's costs is primarily a consequence of strengthening the Groupwide organization to meet future growth and to meet the requirements made on a listed company.

The Parent Company's profit before tax amounted to SEK 95.3 million (9.7) and was affected by profit from participations in Group, associated and jointly-controlled companies of SEK 124.0 million (12.4), comprised exclusively of the distributed assets of Balder Skåne AB. The Parent Company's profit before tax was also affected by unrealized changes in the value of derivatives of a negative SEK 6.7 million (5.8), which is included in the Parent Company's net financial items.

At the Extraordinary General Meeting on 19 August 2019, a bonus issue was approved, whereby the share capital of the Parent Company was increased to SEK 40.0 million (0.1). Furthermore, a new share issue, totalling SEK 17.9 million, directed at five senior executives was completed in the third quarter and a new share issue totalling SEK 905.6 million was implemented in connection with the stock exchange listing on 29 November 2019. As of 31 December 2019, in addition to cash and cash equivalents, the Parent Company's assets consisted primarily of shares in Group companies, as well as receivables from them and liabilities towards them. At the end of the year, cash and cash equivalents in the Parent Company amounted to SEK 771.2 million (45.9).

	2019	2018
Equity and liabilities (SEK million)	31 Dec	31 Dec
Equity
Restricted equity	54.2	0.1
Unrestricted equity	996.4	50.8
Total equity	1,050.6	50.9
Non-current liabilities
Liabilities to Group companies	0.0	26.8
Long-term interest-bearing liabilities	867.5	425.2
Derivative instruments	12.5	5.8
Other provisions and non-current liabilities	12.8	19.2
Total non-current liabilities	892.8	477.0
Current liabilities
Current interest-bearing liabilities	17.9	8.5
Accounts payable	2.4	1.9
Liabilities to Group companies	514.1	428.9
Liabilities to associated companies	0.0	14.5
Other current liabilities	6.9	10.2
Accrued costs and prepaid income	6.0	1.0
Total current liabilities	547.3	465.0
Total liabilities	1,440.1	942.0
Total equity and liabilities	2,490.7	992.8

O P P O R T U N I T I E S A N D RISKS FOR THE GROUP

To be able to prepare the accounts in accordance with generally accepted accounting principles, company management must make assessments and assumptions affecting the reported assets and liabilities, income and costs, as well as other disclosures. Actual outcomes may differ from these assessments.

K-Fastigheter's operations, financial position and profit can be affected, directly or indirectly, by a number of risks, uncertainties and external factors, the effects of which on the Group's operating profit can be controlled to varying degrees.

The Group's operations are dependent on general economic and political trends, particularly in Sweden, which can affect demand for housing and premises. All identified risks are monitored continuously and risk mitigation measures are taken to limit the effects.

The most significant opportunities and risks for the Group are commented on below. In other regards, please refer to the 2018 Annual Report and the prospectus for the launch of K-Fast Holding AB on Nasdaq Stockholm on 29 November 2019. The risk scenario for the Parent Company is the same as that for the Group. No new risks have been identified since the publication of the Annual Report on 2 April 2019 or since the publication of the prospectus on 19 November 2019.

OPPORTUNITIES AND RISKS IN CASH FLOW

It is K-Fastigheter's ambition to be an attractive landlord with whom the Company's tenants wish to remain and who they would recommend to others. The Group takes an active approach, with its three business areas together creating homes that attract future tenants by establishing conditions for secure housing and working actively on aspects including location, design and space efficiency. With its Lateral Low-Rise concept, K-Fastigheter is now building three-room apartments with the same spatial dimensions as those with which several of its competitors construct two-room apartments. In K-Fastigheter's experience, this increases the attractiveness of the Company's apartments.

K-Fastigheter owns properties in several attractive locations and the Group will remain focused on residential properties in locations with favourable long-term demand for rented accommodation. Since large parts of K-Fastigheter's property stocks are newly constructed, the property costs are relatively low. The Group has also made a strategic decision to construct and retain buildings with an unlimited time frame, meaning that K-Fastigheter, in the short term during the construction process, often chooses more expensive solutions, which benefits the Group in the long term through lower property costs and/or increases the attractiveness of the Group's apartments.

On the whole, the assessment is that K-Fastigheter's enjoys considerable opportunities to maintain a rent level, that is mutually attractive to both the landlord and tenant, combined with low vacancy ratio and low property costs.

OPPORTUNITIES AND RISKS IN PROPERTY VALUES

Each quarter, K-Fastigheter's property portfolio, both completed investment properties and properties under construction, is valued either externally or internally. External valuations are performed by independent valuation institutes. Internal valuations are performed for properties in markets in which the Group has long been active and are supported by market data from independent valuation institutes or completed market transactions.

Since the valuation method for properties is based mainly on a cash flow valuation, the value is primarily driven by three parameters: rent, operating and maintenance costs and direct return requirements. The rental concept includes both the actual rent level and the vacancy risk in the property stocks. In turn, the direct return requirement represents the sum of the risk-free interest rate and the risk premium that an investor can be expected to demand for a given investment.

By continuing to build attractive homes in growth locations, it is K-Fastigheter's assessment that the Group can maintain its attractive rent levels while keeping vacancy and cost levels low. The direct return requirement is controlled more by the market and is therefore more difficult for the Group to influence. K-Fastigheter deals with risk by diversifying the property stocks, by focusing primarily on residential properties where volatility in direct returns is lower and by working with conservatively set financial risk limits. Furthermore, by being active in the transaction market and by performing valuations on a quarterly basis, K-Fastigheter continuously obtains market trend data and therefore has opportunities to apply measures in good time.

Sensitivity analysis (SEK million)	Cash flow	Fair value
Direct return requirement +/- 0.1%	-	91.1
Rental value +/- 1%	1.8	41.7
Operating and maintenance costs +/- 1%	0.3	7.3
Long-term vacancy ratio +/- 1%	1.8	41.7
Change in value of completed	-10%	+10%
investment properties (SEK million)
Property value +/- 10%	-394.2	394.2
Loan-to-value ratio	65%	54%

FINANCIAL RISK

Financial risk consists of currency, interest rate, financing, liquidity and credit risk, all of which are regulated in the Finance policy adopted by the Board.

K-Fastigheter's finance department works operationally with these risks by, for example, interest and capital hedging the credit portfolio, maintain a favourable and proactive dialogue with the Group's partner banks and continuously monitoring the Group's liquidity situation.

The work of the finance department is governed in part by a number of internal target figures for each risk category and, in part, by the Group's overall financial targets and risk limits. This is intended to limit the financial risks, achieve a favourable long-term trend in net financial items and to have a positive impact on consolidated profit. Furthermore, under existing loan agreements, K-Fastigheter is required to monitor and report on a number of external target figures (financial covenants) on a quarterly basis. As per 31 December 2019, these external target figures had been met.

Financial	Internal	External	Outcome,
targets	targets	targets	31 Dec 2019
Loan-to-value ratio, %	max. 70%	max. 70-75%	40.2 %
Equity/assets ratio, %	min. 25%	min. 25%	41.8 %
Interest coverage ratio,	min. multiple	min. multiple	multiple
multiple	of 1.75	of 1.50-1.75	of 2.6

ACCOUNTING PRINCIPLES

K-Fast Holding AB (publ) adheres to the IFRS standards adopted by the EU. This year-end report has been prepared in accordance with IAS 34 Interim Financial Reporting and the Swedish Annual Accounts Act. Disclosures in accordance with IAS 34.

The Group measures all financial assets and liabilities at amortized cost, with the exception of derivative instruments, which are measured at fair value through the Income Statement. In K-Fastigheter's assessment, the reported value of financial assets and financial liabilities valued at amortized cost represents a good approximation of fair value. The Parent Company measures all financial assets and liabilities at amortized cost. For further details, see Note 20 in the 2018 Annual Report.

For complete accounting principles, please refer to K-Fast Holding AB's 2018 Annual Report.

AMENDED ACCOUNTING PRINCIPLES

The Group applies IFRS 16 Leases, which is to be applied for financial years commencing 1 January 2019 or later. The standard replaces the previous IAS 17 Leases and the associated interpretations IFRIC 4, SIC 15 and SIC 27. The application of IFRS 16 has entailed an increase in total assets as of 1 January 2019 through the inclusion of right-of-use assets and leasing liabilities of SEK 1.4 million. For complete accounting principles, please refer to the Annual Report for the 2018 financial year.

K-Fastigheter has applied the simplified transition method, meaning that comparison data have not been recalculated. Accordingly, the transition to IFRS 16 has had no impact on equity. At the time of the transition, the leasing liability consisted of the discounted remaining leasing fees as per 1 January 2019. For all leases, the amount of the right-of-use asset corresponded to the leasing liability adjusted for prepaid leasing fees, which are reported in the Consolidated Statement of Financial Position as per the initial date of application.

Leasing fees recognized under IAS 17 as other external costs in the Income Statement are replaced by straight-line depreciation of the right-of-use assets and interest on the leasing liability. The leasing fee is allocated between the amortization of the leasing debt and the interest paid. While the right-of-use assets are depreciated on a straight-line basis over the lease term or the economic lifetime, whichever is longer, the liability is adjusted by the portion of the leasing fee for a period that is not allocated as an interest cost.

The leases considered significant by the Group are car leases and site leaseholds, corresponding to the underlying asset classes reported. For the lease category cars, the assets are utilized during the specified contract period and then returned without the leases being extended. Accordingly, the period during which the agreement cannot be terminated is considered to be the lease term, with no extension periods being taken into account. Leases of the category site leases, are regarded as perpetual because the lessee cannot terminate them. Both rights-of-use assets and leasing liabilities attributable to site leases are measured at an initial amount in accordance with IFRS 16. Since the liability is considered perpetual, it is not amortized, and the lease payments are reported as interest expenses in their entirety. The value of the leasing liability remains unchanged until the next renegotiation of the site leasehold fee. The rights-of-use assets are measured at fair value in accordance with IAS 40. The corresponding amount has been recognized as a non-current lease liability in accordance with IFRS 16. This treatment also entailed financial costs increasing by SEK 0.1 million compared with the earlier reporting under IAS 17, when these were reported as an operating expense.

K-Fastigheter has chosen to apply the relief rule for leases of less than 12 months and for leases where the underlying asset is considered to be of low value.

The discrepancy between the operating lease commitments reported on 31 December 2018 and the leasing liabilities reported in accordance with IFRS 16 as of 1 January 2019 is attributable to differences in accounting principles and the application of the aforementioned relief rules.

The weighted average marginal loan rate used on the initial date of application (1 January 2019) amounts to 1.75 percent for the lease category of cars and to 1.71 percent for the lease category of site leaseholds.

The Parent Company continues to apply the exemption in RFR 2, meaning that leasing costs are expensed as other external costs as they are incurred.

OTHER INFORMATION

MARKET OUTLOOK

K-Fastigheter's offering meets the market's demand for quality housing at the right cost. The Group's concept buildings, developed in-house, generates conditions for cost control and financial efficiency throughout the chain, from building rights to property management over the lifetime of the building. With property stocks and a project portfolio totalling more than 3,750 homes (1,711 in management, 700 in construction and about 1,340 in project development), K-Fastigheter has, from the outset in 2010, developed its operations as a property company with strong positions and commitments in several select locations in southwestern Sweden.

It is the Group's view that demand remains favourable in Skåne, particularly along the Öresund coast, as well as in the Gothenburg and Stockholm areas and areas with structural housing shortages. Stricter amortization requirements, cash down-payment requirements and uncertainty regarding price trends for tenant-owned housing, have made rental apartments an even more attractive housing format.

SUSTAINABILITY AND GENERATING VALUE

For K-Fastigheter, sustainability is a concept that spans far more dimensions than focusing solely on environmental impact. K-Fastigheter values commitment in its own operations and to the sustainability issues that the company knows that its customers and suppliers and the authorities place high on their agendas.

K-Fastigheter mainly pursues initiatives in product development, procurement and social sustainability. K-Fastigheter's business concept is to construct concept buildings, that is, a limited number of alternative buildings that can be adapted to each location. The foundation is a systematic working method, providing optimal resource utilization and ensuring both superior quality and a beneficial working environment. By using an industrial process at proprietary production facilities, consumption of materials, logistics and other resources can be planned in detail, reducing waste, streamlining flows and lowering costs in areas that do not generate value.

K-Fastigheter's concept buildings are constructed with the ambition of meeting requirements corresponding to those set by the Swedish Miljöbyggnad Silver certification system, which is administrated by the Sweden Green Building Council ("SGBC").

K-Fastigheter participates in efforts to reduce fossil fuels dependency by, for example, installing photovoltaic cells on suitable buildings. Since early 2019, electricity has been procured exclusively from suppliers offering electricity from renewable sources, mainly wind power.

SEASONAL VARIATIONS

Property management is associated with certain seasonal variations primarily in tariff-related heating costs. In other regards, there are no significant seasonal variations in K-Fastigheter's operations.

ORGANIZATION AND EMPLOYEES

At the end of the year, the Group had 68 employees (53), of whom 19 were women (12).

K-FAST 2.0

K-Fastigheter's property stocks consist predominantly of newly constructed concept buildings developed in-house. The Group works continuously to maintain and upgrade the older buildings it has acquired. Under the company's "K-Fast 2.0" programme, the apartments are constantly renovated so that surfaces, plumbing, mains and technical installations correspond to the standard found in the concept buildings produced in-house.

Within the framework of this programme, K-Fastigheter can raise the standard in the older apartments in the property portfolio to essentially correspond to the company's completely newly produced apartments, thereby eliminating a technical liability. By using the same materials and fittings in its efforts both within the framework of K-Fast 2.0 and in its new construction projects, K-Fastigheter achieves larger volumes, strengthening the negotiating conditions of the company's purchasing organization.

The concept is cost-efficient and appreciated by tenants. The quality enhancements help reduce property management costs and increase the useful life of the building, while providing opportunities to adjust rent levels among the property stocks, which, in turn, provides a satisfactory return on invested capital.

Currently, renovation within the framework of K-Fast 2.0 is conducted only when tenants move out. Within the framework of K-Fast 2.0, K-Fastigheter has capacity to renovate about eight apartments per month but is currently renovating an average four apartments per month due to the low frequency with which tenants are moving out. Once renovated, an apartment is primarily offered to existing K-Fastigheter tenants.

A key aspect of the implementation of K-Fast 2.0 is that renovation should entail reasonable rent increases, so that existing tenants can afford to stay long term. This has been achievable because it has been possible to keep renovation costs at an average of about SEK 4,300 per square metre. Besides cutting operating costs, raising standards through K-Fast 2.0 brings an annual rental increase of approximately SEK 320 per square metre, meaning that capital invested in K-Fast 2.0 generates an average return of about 7.4 percent.

On 31 December 2019, the Group owned 450 older apartments, which are added to the ongoing efforts to raise standards. Of these, 40 apartments have been renovated in accordance with K-Fast 2.0, which has proven highly appreciated among the company's tenants.

RELATED-PARTY TRANSACTIONS

The Group's related parties include all Board Members and members of company management, as well as individuals and companies closely related to them. No related party transactions have occurred beyond those listed below.

Ongoing agreements, 2018–2019

In the period 1 January 2018 to 31 December 2019, ongoing agreements with related parties encompassed:

• Lease between Jacob Karlsson and K-Fast Holding AB regarding an apartment in central Stockholm. Monthly rent SEK 13,500. Total purchases in 2019: SEK 0.2 million (0.2).
• Agreement between Jacob Karlsson AB, Jacob Karlsson Fastigheter AB and Åsa Fredin AB, K-Fast Holding AB and K-Fast Bygg Holding AB regarding purchases of administrative services (ongoing bookkeeping, preparation of financial statements, etc.). Total invoicing in 2019: SEK 0.1 million (0.0).
• Agreement between law firm VICI AB, in which Board Member Christian Karlsson is a partner, and K-Fast Holding AB regarding various legal consultations including general corporate law, transactions and preparations for the completed listing of the company. Total purchases 2019: SEK 4.3 million.
• Consultancy agreement between Eric Johansson AB/AALTO Holding AB, Åsa Fredin AB, Effektuera i Hässleholm AB (Ola Richard), RHR/ CC AB and circle360 communication AB (Anders Antonsson) and K-Fast Holding AB regarding various role-specific consultations. Total purchases 2019: SEK 2.3 million (0.3).
• Contracting agreement signed between Tygelsjö Projekt AB and K-Fast Bygg Syd AB regarding construction of 30 Low-Rise buildings in Tygelsjö. Total sales in 2019: SEK 31.2 million (0.0).
• Ongoing maintenance work for Balder Mariehäll AB (previously owned jointly by K-Fastigheter and Fastighets AB Balder) performed by K-Fast Bygg Syd AB. Total sales in 2019: 0.0 (0.0).

Transactions, 2018–2019

Related-party transactions during the period 1 January 2018 to 31 December 2019:

• In September 2018, K-Fast Holding AB acquired all shares in K-Fast Surte AB from Group company K-Fast Väst Holding AB, in which Erik Selin Fastigheter AB had a direct shareholding at the time. The purchase consideration amounted to SEK 14.3 million.
• In February 2019, K-Fast Holding AB acquired all shares in K-Fast Göteborg AB from a company controlled by Erik Selin. The company holds the building rights for the Göteborg Sävenäs 131:12 property. Purchase consideration, SEK 23.1 million.
• In February 2019, K-Fast Holding AB entered an agreement with Erik Selin Fastigheter AB through which the company transferred its receivable from Croisette AB to Erik Selin Fastigheter AB. The transfer was paid for by offsetting a receivable that Erik Selin Fastigheter AB had from the company.
• In July 2019, K-Fast Holding AB agreed to acquire all shares in Sävenäsrondellen AB from a company controlled by Erik Selin. The company holds the building rights for the Göteborg Sävenäs 131:13 property. K-Fast Holding AB is to take possession of the property during the first quarter of 2020. Purchase consideration, SEK 80.0 million.
• In August 2019, in connection with the liquidation of K-Fastigheter's securities portfolio, K-Fast Värdepapper AB transferred shares in the unlisted company SHH Bostad AB to Jacob Karlsson AB, which subsequently transferred the shares to Fastighets AB Balder. In both transfers, the price amounted to approximately SEK 6.1 million, corresponding to the price paid by K-Fast Värdepapper AB for the shares when they were acquired in late 2018 and early 2019.
• In September 2019, K-Fastigheter implemented a private placement aimed at five senior executives: Martin Larsson through company, Åsa Fredin through company, Niklas Larsson through company, Eric Johansson through company and Tonnie Karlsson. New shares were issued for a total of SEK 17.9 million.

COMPILATION OF RELATED PARTY TRANSACTIONS RELATED TO CURRENT AGREEMENTS

(SEK million)	Jan–Dec 2019				31 Dec 2019
	Sales to related Purchases from			Receivables from	Liabilities to	Contingent liabilities
Affiliate relation	parties	related parties	Other	related parties	related parties	to related parties
Associated company	31.2	0.0	0.0	17.5	0.0	14.1
Jointly controlled company	0.0	0.0	0.0	1.3	0.0	0.0
Other related parties	0.1	6.8	0.0	0.0	0.0	0.0
Total	31.3	6.8	0.0	18.8	0.0	14.1

		Jan–Dec 2018			31 Dec 2018
	Sales to related Purchases from			Receivables from	Liabilities to	Contingent liabilities
Affiliate relation	parties	related parties	Other	related parties	related parties	to related parties
Associated company	0.0	0.0	0.0	7.5	0.0	0.0
Jointly controlled company	0.0	0.0	0.0	2.3	14.5	0.0
Other related parties	0.0	0.5	0.0	0.0	0.0	0.0
Total	0.1	0.5	0.0	9.8	14.5	0.0

DIVIDEND PROPOSAL

The Board of Directors intends to propose to the Annual General Meeting that no dividend be paid.

ANNUAL REPORT AND ANNUAL GENERAL MEETING

The 2019 Annual Report will be available from K-Fastigheter's website, www.k-fastigheter.se and from the company's headquarters from the week commencing Monday, 20 April 2020.

The 2020 Annual General Meeting of K-Fast Holding AB will be held on Tuesday, 19 May 2020 at 5:00 p.m. CEST at Hotel Statt, Frykholmsgatan 13, Hässleholm, Sweden.

NOMINATION COMMITTEE

In accordance with the instructions for the Nomination Committee adopted at K-Fast Holding AB's Extraordinary General Meeting on 19 August 2019, the Nomination Committee shall consist of four

members: the Chairman of the Board and one representative each of the three largest shareholders as of 30 September. Following the listing of K-Fast Holding AB's class B shares on Nasdaq Stockholm on 29 November 2019, the Nomination Committee for the 2020 Annual General Meeting has been based on shareholdings as of 30 November 2019:

• Stefan Alvarsson, chairman of the Nomination Committee, representing Jacob Karlsson AB
• Shahram Rahi, representing Erik Selin Fastigheter Aktiebolag
• Jonas Eixmann, representing AP2
• Erik Selin, Chairman of the Board of K-Fast Holding AB.

As of 30 November 2019, the shareholders having appointed members of the Nomination Committee together represented approximately 83.6 percent of the total number of votes in K-Fast Holding AB.

K-Fastigheter's President and CEO, Jacob Karlsson, and CFO, Martin Larsson, will comment on the Group's Year-end report on 27 February 2020 at 8:30 a.m.

The presentation materials (slides + audio) will be available at www.k-fastigheter.se/for-investerare/presentation via the

company's website. The presentation will be held in Swedish with presentation materials in English.

Questions may be addressed in writing to ir@k-fastigheter.se with answers being compiled on an ongoing basis during the day and being published on, www.k-fastigheter.se.

This Year-end report has not been subject to review by the company's auditors. The Board of Directors and the CEO provide their assurance that the Year-end report provides a true and fair view of the operations, financial position and profit of the Parent Company and the Group, describing the significant risks and uncertainties faced by the Parent Company and the companies within the Group.

Hässleholm, 27 February 2020

Erik Selin Chairman of the Board Christian Karlsson Board Member

Jesper Mårtensson Board Member

Ulf Johansson Board Member

Sara Mindus Board Member

Jacob Karlsson CEO/Board Member

T H E S H A R E A N D S H A R E H O L D E R S AS PER 31 DECEMBER 2019

The Company has two series of shares: Series A and Series B shares In voting at the Annual General Meeting, a Series A share carries five votes and a Series B share carries one vote. In the third quarter of 2019, K-Fast Holding AB implemented a 1:50,000 share split and a private placement directed at five senior executives encompassing a total 263,528 Series B shares.

On 29 November 2019, K-Fast Holding AB's Series B shares (ISIN code: SE0013382355 and ticker: KFAST B) were launched on Nasdaq Stockholm, Mid Cap, in the Real Estate segment. On 31 December 2019, K-Fastigheter's market capitalization was approximately SEK 5.46 billion. At the end of the year, there were approximately 3,700 shareholders.

SHARE PRICE TREND AND TRADING

During the period 29 November – 30 December 2019, approximately 2.4 million KFAST Series B shares were traded on Nasdaq Stockholm, corresponding to a value of approximately SEK 377.5 million. The daily turnover of K-Fastigheter's shares on Nasdaq Stockholm averaged 125,210 shares and the average price paid was SEK 160.86. The highest price paid during the period 29 November – 31 December 2019 was SEK 189.94 on 2 December and the lowest price paid was SEK 136.02 on 29 November, the date on which the shares were listed. On 30 December 2019, the share price was SEK 161.00 (last paid). On 31 December 2019, the market capitalization was SEK 5,456.1 million.

On 31 December 2019, there were a total 33,888,528 shares in K-Fast Holding distributed between 3,750,000 Series A shares and 30,138,528 Series B shares respectively. The total number of votes on 31 December 2019 was: 48,888,528.

TEN LARGEST SHAREHOLDERS (IN ORDER OF TOTAL VOTING POWER) AS PER 31 DECEMBER 2019

Name	Series A shares	Series B shares	Total number of shares	Total number of votes	Percentage of capital	Percentage of votes
Jacob Karlsson AB	1,875,000	10,625,000	12,500,000	20,000,000	36.9%	40.9%
Erik Selin Fastigheter AB	1,875,000	10,625,000	12,500,000	20,000,000	36.9%	40.9%
AP2	0	857,100	857,100	857,100	2.5%	1.8%
Capital Group	0	776,620	776,620	776,620	2.3%	1.6%
AP4	0	714,200	714,200	714,200	2.1%	1.5%
Nergården families1	0	478,100	478,100	478,100	1.4%	1.0%
Handelsbanken funds	0	453,032	453,032	453,032	1.3%	0.9%
Strandkanten AB	0	434,484	434,484	434,484	1.3%	0.9%
Celox Management	0	380,900	380,900	380,900	1.1%	0.8%
Er-Ho Förvaltning AB	0	380,500	380,500	380,500	1.1%	0.8%
Ten largest shareholders	3,750,000	25,724,936	29,474,936	44,474,936	87.0%	91.0%
Other shareholders	0	4,413,592	4,413,592	4,413,492	13.0%	9.0%
Total	3,750,000	30,138,528	33,888,528	48,888,528	100.0%	100.0%
Of whom, Board of Directors and Group Management	3,750,000	21,880,810	25,630,810	20,938,010	75.6%	83.1%

Each Series A share conveys five votes and each Series B share conveys one vote. Source: Euroclear and K-Fast Holding AB

Since the number of shares has not been diluted, the earnings per share apply both before and after dilution.

1 Through Mjöbäcksvillan Entreprenad Holding AB and Västkuststugan AB

C U R R E N T EARNING CAPACITY

The table below presents the earning capacity of K-Fastigheter's property management operations on a 12-month basis as per 31 December 2019. Earning capacity is not a forecast for the current year or the next twelve months but is to be viewed solely as a theoretical snapshot and is presented for illustrative purposes only. Current earning capacity does not include an assessment of the future rent trends, vacancy rates, property costs, interest rates, changes in value, acquisitions or disposals of properties, or other factors.

Current earning capacity is based on properties held as per 31 December 2019 and their financing, meaning that current earning capacity illustrates the earnings of the management operations, on an annual basis, at that point in time. Accordingly, transactions where access to the property will be gained after 31 December 2019 are not included in the calculation.

The Income Statement for the management operations is also affected by development in the value of the property portfolio, as well as by upcoming property acquisitions and/or disposals. Additional items affecting earnings include changes in the value of derivatives. None of the above has been taken into account in current earning capacity, nor in the item Profit from participations in associated companies.

Earning capacity is based on contracted rental income from the property portfolio, estimated property costs on an annual basis based on historical outcomes for properties under management, as well as property costs and central administration costs estimated on an annual basis based on the current scale of administration. Costs for interest-bearing liabilities have been based on current interest-bearing liabilities and current interest rates (including effects of derivative instruments) at the end of 2019.

	2019	2019	2019	2019	2018
(SEK million)	31 Dec	30 Sep	30 Jun	31 Mar	31 Dec
Rental value	196.6	177.2	161.9	136.9	133.4
Vacancy	-6.1	-4.7	-3.3	-2.9	-0.9
Rental income	190.5	172.5	158.6	134.0	132.5
Operating costs	-27.0	-24.3	-22.5	-20.3	-19.4
Maintenance	-7.3	-6.8	-6.5	-5.9	-5.6
Property tax/ground rent	-2.6	-2.1	-1.9	-1.6	-1.6
Property administration	-15.0	-14.3	-13.5	-12.8	-12.8
Operating surplus	138.6	124.9	114.1	93.3	93.0
Central administration	-9.6	-7.8	-7.9	-6.1	-4.3
Net interest income	-46.9	-38.3	-33.1	-31.4	-29.0
Profit from property management	82.1	78.8	73.1	55.8	59.7

KEY DATA

In the interim report, K-Fastigheter presents certain financial measures that are not defined in accordance with IFRS. K-Fastigheter believes that these measures provide valuable additional information to investors and management as they enable assessment of the Company's performance. Since not all companies calculate financial measures in the same way, these are not always comparable to measurements used by other companies. Accordingly, these financial measures should not be considered as a replacement for measures defined in accordance with IFRS. The table below presents financial measures that are not defined in accordance with IFRS.

Compared with the 2018 Annual Report, the definitions of the alternative key data Interest coverage ratio, Loan-to-value ratio, Surplus ratio and Long-term net asset value have changed and the comparative figures for full-year 2018 have therefore been recalculated in accordance with the new definitions. For the former definitions, please refer to the 2018 Annual Report.

Property-related	2019 Oct–Dec	2018 Oct–Dec	2019 Jan–Dec	2018 Jan–Dec
Rental value, SEK million	196.6	133.4	196.6	133.4
Average financial letting ratio, %	96.3%	97.7%	96.8%	98.8%
Surplus ratio, %	62.8%	58.6%	68.4%	64.4%
Lettable area, m2	130,486	104,843	130,486	104,843
Number of apartments under management	1,711	1,220	1,711	1,220
Number of apartments under construction	700	541	700	541
Number of apartments under project development	1,340	688	1,340	688
Financial
Interest coverage ratio, multiple	2.2	2.1	2.6	3.5
excl. stock exchange listing costs	2.4	2.3	2.8	3.5
Equity/assets ratio, %	41.8%	29.3%	41.8%	29.3%
Loan-to-value ratio, %	40.2%	60.4%	40.2%	60.4%
Period for which capital is tied up, years	3.2	3.2	3.2	3.2
Period of fixed-interest, years	3.3	2.7	3.3	2.7
Average interest, %	1.90%	1.71%	1.90%	1.71%
Net investments, SEK million	351.5	221.2	1,061.1	835.7
Profit from property management, SEK million	8.6	7.1	53.0	41.1
Long-term net asset value (NAV), SEK million	2,540.2	1,213.4	2,540.2	1,213.4
Share-related
Profit from property management per share, SEK	0.30	0.29	2.05	1.64
Growth in profit from property management per share, %	6.6%	9.5%	24.6%	23.8%
Profit after tax per share for the period, SEK	5.94	2.00	14.14	9.79
Long-term net asset value (NAV), SEK	74.96	48.54	74.96	48.54
Growth in long-term net asset value (NAV), per share, %	26.1%	5.5%	54.4%	29.5%
Equity per share, SEK	66.05	39.25	66.05	39.25
Number of shares outstanding at the end of the period, thousands	33,889	25,000	33,889	25,000
Average number of shares outstanding, thousands	28,264	25,000	25,830	25,000

RECONCILIATION TABLE AND DEFINITIONS

PROPERTY-RELATED KEY DATA
	2019	2018	2019	2018
Rental value, SEK million	Oct–Dec	Oct–Dec	Jan–Dec	Jan–Dec	Definition	Motivation
A Contract value on an annual basis at end of the period, SEK million	190.5	132.5	190.5	132.5	Closing annual rent plus	a Rental value is used to illustrate the Group's potential income.
B Vacancy value on an annual basis at end of the period, SEK million	6.1	0.9	6.1	0.9	estimated market rent for vacant space.
A+B Rental value on an annual basis at end of the period, SEK million	196.6	133.4	196.6	133.4
Financial letting ratio, %
A Contract value on an annual basis at end of the period, SEK million	190.5	132.5	190.5	132.5	Contractual annual rent for leases	a The the financial degree of
B Vacancy value on an annual basis at end of the period, SEK million	6.1	0.9	6.1	0.9	valid at the end of the period in relation to rental value.	utilization of K-Fastigheter's properties.
A/(A+B) Financial letting ratio, %	96.9%	99.3%	96.9%	99.3%
Average financial letting ratio, %
A Rental income for the period, SEK million	44.7	28.6	156.8	96.6	Rental income during the period	a This key figure illustrates the financial degree of utilization of K-Fastigheter's properties.
B Rental value for the period, SEK million	46.4	29.3	161.9	97.8	in relation to the rental value during the period.
A/B Average financial letting ratio, %	96.3%	97.7%	96.8%	98.8%
Surplus ratio, %
A Gross profit from property management for the period in accordance with the	28.1	16.8	107.3	62.2	Operating surplus in relation	a This key figure illustrates the profitability of the property management oper ations.
Income Statement, SEK million					to rental income.
B Rental income for the period in accordance with the Income Statement, SEK million	44.7	28.6	156.8	96.6
A/B Surplus ratio during the period, %	62.8%	58.6%	68.4%	64.4%
Lettable area, m2	130,486	104,843	130,486	104,843	Total area available for lease.	a
Number of apartments under management	1,711	1,220	1,711	1,220	Total number of apartments under management at the end of the period.	Key figure to illustrate
Number of apartments under construction	700	541	700	541	Total number of apartments under construction at the end of the period.	K-Fastigheter's capacity to achieve operational targets.
Number of apartments under project development	1,340	688	1,340	688	Total number of apartments in project development at the end of the period.

FINANCIAL KEY DATA

Interest coverage ratio, multiple
A Profit from property management for the period in accordance with the Income Statement, SEK million	8.6	7.1	52.9	41.1	Profit from property management with reversal of depreciation/ amortization and impairment and net interest income and divided by net interest income (incl. realized change in value of current derivative instruments). fluctuations.
B Depreciation/amortization and impairment	-4.1	-0.4	-5.1	-0.4
C Net interest income for the period in accordance with the Income Statement, SEK million	-10.2	-6.9	-35.3	-16.8
(A-B-C)/-B Interest coverage ratio during the period, multiple	2.2	2.1	2.6	3.5		This key figure illustrates financial risk by highlighting
D Costs during the period attributable to stock exchange listing in accordance with the Income Statement, SEK million	-4.3	-3.4	-13.3	-3.4		the sensitivity of the company's performance to interest rate
(A-B-C-D/3)/B Adjusted interest coverage ratio during the period, multiple	2.4	2.3	2.8	3.5	Interest coverage ratio adjusted for costs attributable to stock exchange listing included in central administration.

Equity/assets ratio, %
A Equity at the end of the period in accordance with the Balance Sheet, SEK million	2,238.5	981.2	2,238.5	981.2		a The key figure highlights financial risk by illustrating the scale of equity in relation to total assets.
B Total equity and liabilities at the end of the period in accordance with the Balance Sheet, SEK million	5,352.3	3,347.1	5,352.3	3,347.1	Equity as a percentage of total assets at the end of the period.
A/B Equity/assets ratio, %	41.8%	29.3%	41.8%	29.3%
Loan-to-value ratio, %
A Interest-bearing liabilities at the end of the period in accordance with the Balance Sheet, SEK million*	2,371.9	1,606.6	2,371.9	1,606.6	Net liabilities related to investment and business properties in relation to the fair value of investment and business properties.	a Loan-to-value ratio is used to illustrate K-Fastigheter's financial risk.
B Cash and cash equivalents and net value of current investments at the end of the period in accordance with the Balance Sheet, SEK million	779.0	74.7	779.0	74.7
C Investment and business properties at the end of the period in accordance with the Balance Sheet, SEK million	3,962.0	2,535.9	3,962.0	2,535.9
(A-B)/C Loan-to-value ratio at the end of the period, %	40.2%	60.4%	40.2%	60.4%
Average interest, %
A Interest expense calculated at annual rate at the close of the period, SEK million	44.3	27.5	44.3	27.5	Estimated annual interest on liabilities to credit institutions pertaining to investment and business properties, based on current loan agreements, in relation to total liabilities to	a Average interest is used to illustrate the interest rate risk for K-Fastigheter's interest bearing liabilities.
B Interest-bearing liabilities at the end of the period in accordance with the Balance Sheet, SEK million	2,331.9	1,606.6	2,331.9	1,606.6
A/B Average interest rate at the end of the period, %	1.90%	1.71%	1.90%	1.71%	credit institutions pertaining to investment and business properties.
Net investments, SEK million
A Acquisitions during the period, SEK million	204.6	102.1	557.7	406.7	Total net investments in investment	a Key figure to illustrate K-Fastigheter's capacity to achieve operational targets.
B New construction projects during the period, SEK million	144.2	123.3	499.7	436.8
C Extensions and remodelling during the period, SEK million	4.8	3.9	5.9	5.1	and business properties and new construction projects in progress
D Sales during the period, SEK million	-2.3	-8.1	-2.3	-12.9	during the period.
A+B+C+D Net investments, SEK million	351.4	221.2	1,061.1	835.7

a

	2019	2018	2019	2018
Profit from property management, SEK million	Oct–Dec	Oct–Dec	Jan–Dec	Jan–Dec	Definition	Motivation
A Gross profit from property management for the period in accordance with the Income Statement, SEK million	28.1	16.8	107.3	62.2		a
B Central administration attributable to property management during the period in accordance with the Income Statement, SEK million	-5.2	-2.3	-14.0	-3.9	Gross profit from property management less central administration costs and depreciation/amortization and impairment attributable to the Property management business	This key figure illustrates the profitability of the property management operations.
C Depreciation/amortization and impairment attributable to property management during the period in accordance with the income statement, SEK million	-4.1	-0.4	-5.1	-0.4
D Net interest income for the period in accordance with the Income Statement, SEK million	-10.2	-6.9	-35.3	-16.8	area and net interest income.
A+B+C+D Profit from property management, SEK million	8.6	7.1	52.9	41.1
Long-term net asset value (NAV), SEK million
A Equity at the end of the period in accordance with the Balance Sheet, SEK million	2,238.5	981.2	2,238.5	981.2		a An established measure of K-Fastigheter's and other listed companies' long-term net asset value, facilitating analyses and comparisons.
B Derivatives at the end of the period in accordance with the Balance Sheet, SEK million	12.8	6.2	12.8	6.2
C Deferred tax liability at the end of the period in accordance with the Balance Sheet, SEK million	310.2	228.2	310.3	228.2	Reported equity with reversal of deferred tax, interest rate derivatives and non-controlling interests.
D Deferred tax liability at the end of the period in accordance with the Balance Sheet, SEK million	21.4	2.2	21.4	2.2
E Non-controlling interests at the end of the period in accordance with the Balance Sheet, SEK million	0.0	0.0	0.0	0.0
A+B+C-D-E Long-term net asset value (NAV), SEK million	2,540.2	1,213.4	2,540.2	1,213.4
Period for which capital is tied up, years	3.2	3.2	3.2	3.2	The period for which capital is tied up with regard to liabilities to credit institutions pertaining to investment and business properties at the end of the period.	This key figure is used to illustrate the (re-) financing risk related to K-Fastigheter's interest-bearing liabilities.
Period of fixed-interest, years	3.3	2.7	3.3	2.7	The fixed interest term on liabilities to credit institutions pertaining to completed investment properties at the end of the period.	This key figure is used to illustrate the interest rate risk for K-Fastigheter's interest-bearing liabilities.

*Adjusted for stage 3 of Helsingborg / Brigaden 7 & 8's share of existing construction credits (SEK 40.0 million), which, as per 31 December 2019 were not refinanced and were not, accordingly, included in interest-bearing liabilities related to investment and business properties. Stages 1 and 2 of Helsingborg/ Brigaden 7 & 8 have been refinanced and were included in interest-bearing liabilities related to investment and business properties as per 31 December 2019.

SHARE-RELATED KEY DATA

a

a

Long-term net asset value (NAV), SEK

A Long-term net asset value (NAV) at the end of the period in accordance with the Balance Sheet, SEK million	2,540.2	1,213.4	2,540.2	1,213.4	Long-term net asset value (NAV) in relation to the number of shares outstanding at the end of the period.	a Used to illustrate K-Fastigheter's long-term net asset value per share in a manner that is uniform for listed
B Number of shares outstanding at the end of the period, thousands	33,889	25,000	33,889	25,000
A/B Long-term net asset value (NAV) per share, SEK	74.96	48.54	74.96	48.54		companies.
Growth in long-term net asset value (NAV) per share, %
A Long-term net asset value (NAV) per share at the end of the period in accordance with the Balance Sheet, SEK million	74.96	48.54	74.96	48.54	Percentage change in long-term net	a Used to illustrate growth in K-Fastigheter's long-term
B Long-term net asset value (NAV) per share at the end of the preceding period in accordance with the Balance Sheet, SEK million	59.43	45.99	48.54	37.49	asset value (NAV) per share during the period.	net asset value per share in a manner that is uniform for listed companies.
A/B-1 Growth in long-term net asset value (NAV) per share, %	26.1%	5.5%	54.4%	29.5%
Equity per share, SEK
A Equity attributable to Parent Company shareholders at the end of the period in accordance with the Balance Sheet, SEK million	2,238.5	981.2	2,238.5	981.2	Equity less minority share of equity, in relation to the number of shares	a Used to illustrate K-Fastigheter's equity per
B Number of shares outstanding at the end of the period, thousands	33,889	25,000	33,889	25,000	outstanding at the end of the period.	share in a manner that is uniform for listed companies.
A/B Equity per share, SEK	66.05	39.25	66.05	39.25
Profit from property management per share, SEK
A Profit from property management for the period in accordance with the Income Statement, SEK million	8.6	7.1	52.9	41.1	Profit from property management in relation to the average number of shares outstanding during the period.	a Used to illustrate K-Fastigheter's profit from property management per share in a manner that is uniform for listed companies.
B Average number of shares outstanding during the period, thousands	28,264	25,000	25,830	25,000
A/B Profit from property management per share, SEK	0.30	0.29	2.05	1.64
Growth in profit from property management per share, %
A Profit from property management for the period per share, SEK	0.30	0.29	2.05	1.64	Percentage change in profit from	a Used to illustrate growth in
B Profit from property management for the preceding period per share, SEK	0.29	0.26	1.64	1.33	property management per share during the period.	K-Fastigheter's profit from property management in a manner that is uniform for listed companies.
A/B-1 Growth in profit from property management per share, %	6.6%	9.5%	24.6%	23.8%
Profit after tax per share for the period, SEK
A Profit after tax for the period in accordance with the Income Statement, SEK million	167.9	50.0	365.3	244.8	Profit for the period in relation to the	a Used to illustrate
B Average number of shares outstanding during the period, thousands	28,264	25,000	25,830	25,000	average number of shares outstanding during the period.	K-Fastigheter's earnings per share in a manner that is uniform for listed companies.
A/B Profit after tax per share for the period, SEK	5.94	2.00	14.14	9.79
Number of shares outstanding at the end of the period, thousands*	33,889	25,000	33,889	25,000
Average number of shares outstanding during the period, thousands*	28,264	25,000	25,830	25,000

*Includes shares in new share issue approved and subscribed as of 30 September 2019 and registered in October 2019.

Calendar
2019 Annual Report	week comm. 20 April 2020
Annual General Meeting 2019	19 May 2020
Interim Report January–March 2020	19 May 2020
Interim Report January–June 2020	19 August 2020
Interim Report January–September 2020	11 November 2020

During the spring, K-Fastigheter will be launching an app that makes it easier and more secure for our tenants to contact us and to obtain correct information.

K-Fastigheter's app can be downloaded for free from the usual software stores, such as App Store and Google Play, by searching on "k-fastigheter".

Among other functions, the app lists vacant apartments, shows the tenant's rent invoices and provides an opportunity for reporting errors.

The app will be developed continuously in consultation with our tenants.

K-Fast Holding AB

Address: Bultvägen 7, SE-281 43 Hässleholm Telephone: +46 (0)10 33 00 069 www.k-fastigheter.se

Contact

Jacob Karlsson CEO e-mail: jacob.karlsson@k-fastigheter.se Telephone: +46 (0)738 219 626

Martin Larsson

Deputy CEO/CFO e-mail: martin.larsson@k-fastigheter.se Telephone: +46 (0)703 533 160

Anders Antonsson

Head of Investor Relations e-mail: anders.antonsson@k-fastigheter.se Telephone: +46 (0)709 994 970

This information is such that K-Fast Holding AB is obliged to disclose in accordance with the EU's Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 8:00 a.m. CET on 27 February 2020.