Quarterly Report • Apr 27, 2017
Quarterly Report
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| 2017 Jan-Mar |
ZUIO Jan-Mar |
ZU 10. Jan-Dec |
|
|---|---|---|---|
| Rental income | 546 | 519 | 2,015 |
| Net operating income | 379 | 355 | 1,507 |
| Profit from property management | 216 | 195 | 471 |
| Profit before tax | 1,135 | 1,756 | 8,680 |
| Profit after tax | 882 | 1,665 | 7,107 |
| Surplus ratio,% | 69 | 68 | 72 |
| Loan-to-value ratio, properties, % | 44 | 48 | 46 |
| EPRA NAV, SEK per share | 165 | 126 | 163 |
1The comparison figures for income and expense items relate to values for the period
January–March 2016 and for balance sheet items as at 31 December 2016.
CREATING THE RIGH CONDITIONS
NU L
Christian Hermelin, CEO
Target 2017: 73% Long-term target 2020: 75%
Target: At leat SEK 1,500m per year
Target: At least 20% 1) The return for projects in 2016 was 87%
Target: At least 10 %
2) The transaction profit for 2015 was 84%
After the record year of 2016, it is pleasing to see that the trend towards an ever stronger rental market and a continued strong property market is persisting in the early part of 2017.
The good market conditions in 2016, with high demand for office premises, rising rent levels and increased property values and low interest-rate levels, are persisting in the early part of 2017. Earnings and key ratios show that Fabege has capitalised on the good market conditions.
Increased rent levels and completed projects have continued to impact positively on reported rental income and net operating income. Our objective is to attain a surplus ratio of 73 per cent in 2017. Already after the first quarter, which is usually the most difficult one, we are at 69 per cent, one percentage point higher than in the previous year.
Growth in value continued both in the management portfolio and in projects during the year. Including acquisitions, we now have property value in excess of SEK 50bn. Growth in value was driven primarily by higher rent levels, but also a continued decline in yield requirements. Projects continued to deliver at a high level - return on invested capital during the quarter was 48 per cent, well above our declared target of at least 20 per cent. All projects are proceeding well. Our size and experience enable us to take part in international procurements as a complement to Swedish suppliers, with the result that we have been able to keep costs in line with budget. Project calculations have also been steadily strengthened by higher rent levels and lower yield requirements.
I am very pleased with the lettings we have made during the quarter, both through new project lettings and through vacancy lettings in the property management portfolio. The project property Pelaren 1 at Globen is now almost fully. Stokab, one of the tenants will be vacating space in Apotekaren 22 in Nordmalm, space that we will be able to let at a significantly higher level. It is also pleasing that the Swedish Environmental Protection Agency chose Trikåfabriken in Hammarby Sjöstad for its new office. This provides us with an opportunity to start another project on the south side of Stockholm. Trikåfabriken represents a typical conversion project in the Fabege portfolio, where we improve existing space and at the same time create more space. A good example of how we can build value. We also working closely with the City of Stockholm and the City of Solna on planning issues to make more exciting project starts possible in the future.
On the transaction side, properties concerned in deals reported previously have now been taken over and vacated, for example Hagahuset and Distansen in Solna. Both are examples of properties in which we see future development potential. The same applies to the development rights in Råsta, where we are working on the planning issue together with Solna. We have also taken greater responsibility, both financially and in terms of work, for Friends Arena, with the aim of achieving a better financial outcome.
In view of strong interest and favourable conditions in the capital market, we issued a total of SEK 900m during the quarter through SFF and our green MTN programme. The proportion of capital market funding, including commercial papers, is now 40 per cent of total outstanding loans.
The proposal by the Property Packaging Inquiry to equate direct property sales with company sales is detrimental to the property sector. The proposal is felt to be illogical, particularly in view of the fact that the property sector is not considered to be undertaxed according to the Inquiry in comparison with other industries. It is still too early to say anything about the effects on property values and transaction volumes. It now appears that any legislative proposal will be deferred, but uncertainty persists as to whether and when this might take effect.
I anticipate continued good market conditions and a positive trend in rent levels and property values. Completed projects in 2017 and 2018 will appreciably strengthen operating cash flow. Our development rights offer considerable potential and we have a committed organisation, which is working hard to create value. We are well positioned to capitalise on the business opportunities that lie ahead.
Rising rental income and continued low interest expenses meant that earnings from property management increased by 11 per cent in comparison with the previous year. Growth in value continued both in the management portfolio and through the major projects.
Profit after tax for the period was SEK 882m (1,665), corresponding to earnings per share of SEK 5.33 (10.07). Profit before tax for the period amounted to SEK 1,135m (1,756). The decrease is entirely due to unrealised changes in the value of the property value having decreased in comparison with the previous year.
Rental income amounted to SEK 546m (519) and net operating income to SEK 379m (355). In an identical portfolio, rental income rose by around 8 per cent (4) and net operating income increased by roughly 11 per cent (2). The surplus ratio was 69 per cent (68).
The increase in central administration costs was largely due to front-loaded costs and higher provisions for Fabege's profit-sharing scheme.
No transactions were carried out during the period, and realised changes in value of properties were consequently SEK 0m (160). Unrealised changes in value totalled SEK 833m (1,519). The SEK 495m (974) unrealised change in the value of the property management portfolio resulted from properties with higher rent levels and somewhat lower yield requirements in all Fabege submarkets. The average yield requirement declined to 4.48 per cent (4.53 at year-end). The project portfolio contributed to an unrealised change in value of SEK 338m (545), primarily due to development gains in the major project properties.
The share in profit of associated companies was SEK -11m (-13) and an increase in earnings for Friends Arena during the period
Unrealised changes in value in the derivative portfolio totalled SEK 89m (-118), primarily due to higher long-term interest rates. Net interest income increased to SEK-133m (-131), principally due to higher borrowing, which was partially offset by a lower average interest rate.
The Property Management segment generated net operating income of SEK 371m $(335)$ , representing a surplus ratio of 72 per cent (69). The occupancy rate was 94 per cent (95). Earnings from property management totalled SEK 240m (203). Unrealised changes in the value of properties amounted to SEK 495m (974).
The Property Development segment generated net operating income of SEK 8m (20), giving a surplus ratio of 28 per cent (61). Earnings from property management totalled SEK -24m (-8). Unrealised changes in value of property totalled SEK 338m (545), corresponding to a yield of 48 per cent on invested capital in the project portfolio.
No transactions were implemented during the period, and the Transactions segment therefore had realised changes in value of SEK 0m (160).
Reclassifications during the period between the Property Management and Property Development segments are stated in the note on Segment Reporting on page 16.
1The comparison figures for income and expense items relate to values for the period January-March 2016 and for balance sheet items as at 31 December 2016.
| 2017 | 2016 | |
|---|---|---|
| SEKm | Jan-Mar | Jan-Mar |
| Profit from Property Management activities | 240 | 203 |
| Changes in value (portfolio of investment | ||
| properties) | 495 | 974 |
| Contribution from Property | 735 | 1,177 |
| Management | ||
| Profit from Property Management activities | $-24$ | -8 |
| Changes in value (profit from Property | ||
| Development) | 338 | 545 |
| Contribution from Property | 314 | 537 |
| Development | ||
| Realised changes in value | ∩ | 160 |
| Contribution from Transactions | ٥ | 160 |
| Total contribution | ||
| from the operation | 1,049 | 1,87 |
48% Return on
projects
Fabege employs long-term credit facilities subject to fixed terms and conditions. The company's creditors mainly comprise the major Nordic banks supplemented by those who invest in the company's commercial papers and bonds through the capital market. Capital market financing has been gradually increased and rose to 40 percent of outstanding loans at the end of the quarter.
Interest-bearing liabilities at the end of the period totalled SEK 22,548m (21,978), with an average interest rate of 2.24 per cent excluding, and 2.38 per cent including, commitment fees on the undrawn portion of committed credit facilities. Unutilised committed credit facilities amounted to SEK 2.421m.
During the first quarter, Fabege increased the proportion of financing on the capital market both through its own green MTN programme and through the part-owned Svensk Fastighetsfinansiering AB (SFF). Demand on the capital market continues to be very good, particularly for green bonds, and interest on bond loans is calculated without a Stibor floor. The negative Stibor rate therefore means that the cost of financing on the capital market remains highly advantageous in comparison with bank loans, as the borrower generally does not have to assimilate the negative Stibor rate. The green MTN programme enables the company to issue non-covered bonds totalling SEK 2,000m, of which SEK 1.200 was unutilised at the end of the quarter, On 31 March, Fabege additionally had outstanding bonds of SEK 2,848m via SFF, of which SEK 2,166m related to green bonds.
Green financing totalled 23 per cent at the end of the period. As the company's properties gain environmental certification, the objective is for financing to be sustainable as well, and Fabege welcomes and encourages the new responsible financing opportunities that are being established on the market.
Fabege has a commercial paper programme of SEK 5,000m, which was fully subscribed at the end of the quarter. The company has available credit facilities covering all outstanding commercial papers at any given time.
At 31 March, the average maturity was 3.9 years and the loan-to-value ratio was 44 per cent. The level of capital tied up in certificate loans is calculated on the basis of underlying loan commitments.
The average fixed-interest term for Fabege's loan portfolio was 2.3 years, including the effects of derivative instruments. During the first quarter, callable interest-rate swaps of SEK 1,500m matured, while new ten-year interest-rate swaps totalling SEK 400m were signed. Fabege's derivatives portfolio thereafter comprised interest-rate swaps totalling SEK 9,200m with terms of maturity extending through 2027 and carrying fixed interest at annual rates of between 0.26 and 2.73 per cent before margins. Fabege also holds callable swaps totalling SEK 3,600m at interest rates of between 2.92 and 3.98 per cent before margins and with maturity between 2017 and 2018. Interest rates on 57 per cent of Fabege's loan portfolio were fixed using fixed-income derivatives. The derivatives portfolio is measured at market value and the change in value is recognised in profit or loss. At 31 March, the recognised negative fair value adjustment of the portfolio was SEK 470m (559). The derivatives portfolio is measured at the present value of future cash flows. The change in value is of an accounting nature and has no impact on the company's cash flow. At the due date, the market value of derivative instruments is always zero.
Net financial items included other financial expenses of SEK 6m, mainly pertaining to accrued opening charges for credit agreements and bond programmes. The total loan volume per quarter included SEK 3,153bn (2,553) in loans for projects, on which interest of SEK 19m (14) had been capitalised.
| Amount SEKm |
interest rate,% |
Share,% | |
|---|---|---|---|
| < 1 year | 11,148 | 2.24 | 49 |
| 1-2 years | 4,700 | 3.44 | 21 |
| 2-3 years | 1,000 | 2.13 | 4 |
| 3-4 years | 0 | 0.00 | 0 |
| 4-5 years | 1,000 | 2.68 | 4 |
| 5-6years | 1,100 | 0.97 | 5 |
| 6-7 years | 800 | 0.96 | 4 |
| 7-8 years | 900 | 0.99 | 4 |
| 8-9 years | 600 | 0.92 | 3 |
| 9-10 years | 1,300 | 1.05 | 6 |
| Total | 22,548 | 2.24 | 100 |
The average interest rate for the < 1 year period includes the margin for the entire debt portfolio because the company's fixed-interest period is established using interest rate swaps, which are traded without margins.
| Credit agreement SEKm |
Drawn, SEKm |
|
|---|---|---|
| Commercial paper programme | 5,000 | 5,000 |
| < 1 year | 5,923 | 2,625 |
| 1-2 years | 8,655 | 6,040 |
| 2-3 years | 3,745 | 3,037 |
| 3-4 years | 1,100 | 300 |
| 4-5 years | 300 | 300 |
| 5-10 years | 3,993 | 3,993 |
| 10-15 years | 0 | 0 |
| 15-20 years | 0 | 0 |
| 20-25 years | 1,253 | 1,253 |
| Total | 29,969 | 22,548 |
Revolving facilities 13% . Bond financing 16% . Commercial Paper 20% - Other Ioans 41% . Unutilised facilities 10%
Tax on profit for the period amounted to SEK -253m (-91). Operating taxes are calculated at a rate of 22 per cent on taxable earnings.
Shareholders' equity including SEK 55m acquired minority during the period amounted to SEK 23,277m (23,002) at the end of the period and the equity/assets ratio was 45 per cent (46). Shareholders' equity per share attributable to the parent company shareholders amounted towas SEK 141 (139). Excluding deferred tax on fair value adjustments of properties, net asset value per share was SEK 169 (166). EPRA NAV was SEK 165 per share (163). Dividend decided upon but not paid of SEK 662m has been expensed and therefore reduced equity for the period. The dividend was paid on 5 April.
Cash flow from operating activities before changes in working capital amounted to SEK 188m (211). Changes in working capital had an impact on cash flow of SEK 1,687m (67). Investing activities had an impact of SEK -2,779m (1,522) on cash flow, while financing activities had a positive impact of SEK 870m (-1,799) on cash flow. In investing activities, cash flow was driven by property transactions and projects. Overall, cash and cash equivalents changed by SEK -38m (1) during the period.
EPRA NAV 31 March 2017
Fabege is now starting on the Trikåfabriken 9 project, with an estimated investment of around SEK 450m. The extension will have a frame of wood, a renewable material with low environmental impact that also binds carbon dioxide. The building is planned to meet the requirements for environmental certification to BREEAM-SE, level 'Very good', and will have lettable space of around 16,700 sqm when completed. The project will be completed during Q2 of 2019. Fabege has signed a 6-year green agreement with the Swedish Environmental Protection Agency. The lease applies to 7,700 sqm of office space with an annual rent of around SEK 27m, which means that the project is pre-let to around 50 per cent. For further information about the project, visit www.trikafabriken9.se.
Rent levels continued to rise in new negotiations and renegotiations during the first quarter. Net lettings were strong and led to a decision on another new project start on the south side of Stockholm. After takeovers and changes in vale, property value at 31 March 2017 was just over SEK 50bn.
Fabege's Property Management and Property Development activities are concentrated on a few selected submarkets in and around Stockholm, Stockholm inner city, Solna and Hammarby Sjöstad. At 31 March 2017, Fabege owned 88 properties with a total rental value of SEK 2.4bn, lettable floor space of 1.1m sqm and a book value of SEK 50.8bn, of which development and project properties accounted for SEK 10.8bn. The financial occupancy rate for the entire portfolio, including project properties, was 93 per cent (94). The occupancy rate in the property management portfolio was 94 per cent (95).
During the period, 54 new leases were signed at a total rental value of SEK 68m (42), of which 86 per cent pertained to Green leases. Lease terminations totalled SEK 47m (30), while net lettings amounted to SEK 21m (12). Rental contracts totalling SEK 77m were renegotiated in the period, with an average rise in rental value of 20 per cent, reflecting the strong trend on the rental market in the early part of the year. The retention rate during the period was 79 per cent (81).
No new transactions took place during the first quarter. On the other hand, the previously agreed transactions pertaining to the properties Distans 4, 6 and 7 and Fortet 2, all in Solna, were taken over. Uarda 7 in Arenastaden was vacated. In addition, Peab's share of Visio, which owns the development rights in Solna, was taken over.
As no transactions were carried out during the period, realised changes in value of properties were SEK 0m (160).
The entire property portfolio is externally valued at least once annually. Approximately 29 per cent of the properties were externally valued in the first quarter and the remainder were internally valued based on the most recent external valuations. The total market value was SEK 50.8bn (47.8).
Unrealised changes in value totalled SEK 833m (1,519). The average yield requirement declined somewhat during the period to 4.48 per cent (4.53 at year-end). The change in value in the property management portfolio of SEK 495m (974) was principally due to higher rent levels and somewhat lower yield requirements. The project portfolio contributed to a change in value of SEK 338m (545), mainly due to development gains in major project properties.
1 The comparison figures for income and expense items relate to values for the period January–March 2016 and for halance sheet items as at 31 December 2016
The purpose of Fabege's project investments is to reduce vacancy rates and increase rents in the property portfolio, thereby improving cash flows and adding value. Property development is a key feature of Fabege's business model and should make a significant contribution to consolidated profit. The aim is to achieve a return of at least 20 per cent on invested capital. Another aim is to have all new builds certified under BREEAM-SE.
During the period, investments in existing properties and projects totalled SEK 843m (486), of which investments in projects and development properties accounted for SEK 697m (377). The return on capital invested in the project portfolio was 48 per cent. The capital invested in the property management portfolio, which amounted to SEK 145m (109) and encompassed energy investments and tenant customisations, also contributed to the total growth in value.
No projects were completed during the period.
The project pertaining to the property Uarda 6 is in its final phase with ongoing tenant customisations. The first tenant will move in at the end of April, and the offices will then gradually be occupied during the autumn. The occupancy rate is 95 per cent.
In the construction of SEB's offices in the property Pyramiden 4, Arenastaden, the first stage is on the way to being completed. Work on final inspections and fine adjustments and external groundworks are in progress ahead of occupancy in May. Stage 2 is also under way, with installation work and completion of office space. This stage is due to be ready for occupation in May 2018. The total investment is estimated to be SEK 2.6bn. The increased investment volume mainly concerns expanded area and more expensive foundation costs.
The project relating to the office building at the property Signal 3 in Arenastaden is continuing with erection of the shell. The investment is estimated at SEK 1,130m after an increase of SEK 50m. The increase is explained by a larger space and the fact that the building has been moved forward to allow for possible development rights for housing on the property. ICA has signed a lease on about 78 per cent of the lettable space. The office is scheduled to be ready for occupancy in October 2018.
The project relating to the Hörnan district in Råsunda is also under way. Reallotment is under completion, and with effect from the second quarter, Hörnan will be separated from Lagern 2. The investment amounts to an estimated total of just under SEK 530m. The foundation work is complete and work is now under way on erection of the shell. The property is partly let to Telenor Sweden, with occupancy scheduled for summer 2018. The occupancy rate is 69 per cent.
The new construction project relating to Pelaren 1, Globen, is in progress with erection of the framework. The investment totals around SEK 750m. Following signature of a contract with Stokab during the quarter, the property is let to 81 per cent. In April, a further contract was signed for just over 2,200 sqm, giving an occupancy rate of around 92 per cent.
The project relating to conversion and extension of the property Orgeln 7 in Sundbyberg is under way. The shell has been largely completed, and assembly of the facade is in progress. The investment is estimated to total SEK 994m, and the occupancy rate is 49 per cent. The office is scheduled to be ready for occupancy in June 2018.
A decision was made during the first quarter on conversion and extension of Trikåfabriken 9 in Hammerby Sjöstad. The investment totals SEK 450m. As a result of the extension, the property has around 16,700 sqm of lettable space. A contract was signed with the Swedish Environmental Protection Agency during the quarter concerning around 7,700 sqm of office space and around 500 sqm of other space, corresponding to an occupancy rate of 50 per cent. The property is expected to be due for occupancy during the spring of 2019.
| Changes in property value | 2017 |
|---|---|
| Opening fair value 2017-01-01 | 47,842 |
| Property acquisitions | 1,314 |
| Investments in new builds, extensions and conversions | 843 |
| Changes in value | 833 |
| Sales and disposals | |
| Closing fair value 2017-03-31 | 50,832 |
| Area | Average yield, % |
|---|---|
| Stockolm city | 4.14 |
| Solna | 4 73 |
| Hammarby Sjöstad | 4 9.5 |
| Average yield | A 48 |
| Property name | Area | Cat- egory |
Lettable area.sam |
|---|---|---|---|
| Quarter 1 | |||
| Quarter 2 | |||
| Quarter 3 | |||
| Quarter 4 | |||
| Total sales of properties |
| Area | Lettable | ||
|---|---|---|---|
| Property name Quarter 1 |
Category | area, sqm | |
| Distansen 4 | Solna | Land | Ω |
| Distansen 6 | Solna | Offices | 11,052 |
| Distansen 7 | Solna | Garage | 9,810 |
| Fortet 2 | Solna | Land | 6,400 |
| Nationalarenan 3 | Solna | Land | 0 |
| Järva 4:17 | Solna | Land | 0 |
| Quarter 2 | |||
| Quarter 3 | |||
| Quarter 4 | |||
| Total acquisitions of properties | 27,262 |
| Lettable Occupancy rate, Estimated rental | Carrying | Estimated | of which, worked up. |
||||||
|---|---|---|---|---|---|---|---|---|---|
| Property listing | Property type Area | Completed | area, sam | area, % 1 | value, SEKm 2 | amount SEKm | investment, SEKm | SEKm | |
| Hörnan (Part of Lagern 2) | Offices | Solna | $Q2-2018$ | 16,300 | 69% | 50 | 488 | 530 | 256 |
| Pyramiden 4 | Offices | Arenastaden | $Q2-2018$ | 72,200 | 100% | 182 | 2,803 | 2,580 | 2,227 |
| Signalen 3 | Offices | Arenastaden | Q3-2018 | 31,100 | 78% | 92 | 578 | 1.131 | 294 |
| Uarda 6 | Offices | Arenastaden | Q4-2017 | 17,800 | 95% | 52 | 876 | 570 | 560 |
| Pelaren 1 | Offices | Globen | Q3-2018 | 21,000 | 81% | 69 | 306 | 750 | 176 |
| Orgeln 7 | Offices/retail | Sundbyberg | Q2-2018 | 36,000 | 49% | 109 | 856 | 944 | 281 |
| Trikåfabriken 9 | Offices | Hammarby Sjöstad | Q2-2019 | 16,700 | 50% | 54 | 195 | 450 | 35 |
| Total | 211,100 | 79% | 608 | 6,102 | 6,955 | 3,829 | |||
| Other land and project properties | 071, ا | ||||||||
| Other development properties | 3,658 | ||||||||
| Total projects, land and development properties | 10,831 |
-
Poperational occupancy rate 31 March 2017.
2 Rental value including additions. The annual rent for the largest projects in progress could increase to SEK 608m (fully let) from SEK Om in annualised current rent as of 31 M
| Mar 31 2017 | Jan-Mar 2017 | |||||||
|---|---|---|---|---|---|---|---|---|
| No. of properties |
Lettable area, '000 sqm |
Market value SEKm |
Rental value 2 |
Financial occupancy rate % |
Rental income SEKm |
Property expenses SEKm |
Net operating income SEKm |
|
| Property holdings | ||||||||
| Investment properties 1 | 62 | 941 | 40,001 | 2,228 | 94 | 514 | $-110$ | 404 |
| Development properties 1 | 8 | 130 | 3,658 | 143 | 82 | 28 | -9 | 19 |
| Land and Project properties 1 | 18 | 13 | 7.173 | 3 | 99 | $\mathbf{2}$ | -8 | $-6$ |
| Total | 88 | 1,084 | 50,832 | 2,374 | 93 | 544 | $-127$ | 417 |
| Of which, Inner city | 29 | 401 | 21,878 | 1,109 | 94 | 256 | -59 | 197 |
| Of which, Solna | 44 | 578 | 24,459 | .037 | 93 | 236 | $-58$ | 178 |
| Of which, Hammarby | ||||||||
| Sjöstad | 11 | 105 | 4,017 | 228 | 93 | 52 | $-10$ | 42 |
| Of which, Other | Δ | 0 | 478 | Ω | $\circ$ | $\circ$ | 0 | $\Omega$ |
| Total | 88 | 1,084 | 50,832 | 2,374 | 93 | 544 | $-127$ | 417 |
| Expenses for lettings, project development and property administration | $-39$ | |||||||
| Total net operating income after expenses for lettings, project development and property administration | 378 |
1 See definitions on page 17.
2 In the rental value, time limited deductions of about SEK 66m (in rolling annual rental value at 31 March) have not been deducted.
3The table refers to Fabege's property portfolio on 31 march 2017. Income and expenses were recognised as if the properties were owned for the entire period. The difference between recognised net operating
income above,
| 2017 | 2017 | 2017 | 2017 | 2016 | 2016 | 2016 | 2016 | |
|---|---|---|---|---|---|---|---|---|
| Jan-Mar | Jan Mar | Jan-Mar | Jan-Mar | Jan-Mar | Jan-Mar | Jan-Mar | Jan-Mar | |
| SEKm | Property | Property Management Development |
Transaction | Total | Property Management |
Property Development |
Transaction | Total |
| Rental income | 517 | 29 | 546 | 486 | 33 | 519 | ||
| Property expenses | -146 | $-21$ | $-167$ | $-151$ | $-13$ | $-164$ | ||
| Net operating income | 371 | 8 | $\mathbf o$ | 379 | 335 | 20 | $\mathbf o$ | 355 |
| Surplus ratio, % | 72% | 28% | 69% | 69% | 61% | 68% | ||
| Central administration | -15 | -4 | $-19$ | $-13$ | -3 | $-16$ | ||
| Net interest expense | $-105$ | $-28$ | $-133$ | -106 | $-25$ | $-131$ | ||
| Share in profits of associated companies | -11 | 0 | $-11$ | $-13$ | 0 | $-13$ | ||
| Profit from property management activities | 240 | $-24$ | $\mathbf o$ | 216 | 203 | -8 | o | 195 |
| Realised changes in value of properties | 0 | $\Omega$ | 160 | 160 | ||||
| Unrealised changes in value of properties | 495 | 338 | 833 | 974 | 545 | 1,519 | ||
| Profit/loss before tax per segment | 735 | 314 | $\mathbf{o}$ | 1,049 | 1,177 | 537 | 160 | 1,874 |
| Changes in value, fixed income derivatives and equities | 86 | $-118$ | ||||||
| Profit before tax | 1,135 | 1,756 | ||||||
| Properties, market value | 40,001 | 10,831 | 50,832 | 32,626 | 7,831 | 40,457 | ||
| Occupancy rate, % | 94% | 82% | 93% | 94% | 83% | 93% |
1 See definitions on page 17
At the end of the year, 162 people (149) were employed by the Fabege Group.
Sales during the period amounted to SEK 61m (36) and earnings before appropriations and tax amounted to SEK 59m (-521).
Net investments in property, equipment and shares totalled SEK $0m(0)$ .
Fabege's Annual General Meeting on 29 March 2017 adopted the Board of Directors' proposal for a dividend for 2016 of SEK 4.00 per share. For other decisions, see press release and AGM documents on Fabege's website
The 2017 AGM renewed the authorisation of the Board to buy back and transfer shares in the company for the period extending up until the next AGM. Share buybacks are subject to a limit of 10 per cent of the total number of outstanding shares at any time. No shares were bought back during the period.
Risks and uncertainties relating to cash flow from operations relate primarily to changes in rents, vacancies and interest rates. The effect of the changes on consolidated profit induding a sensitivity analysis and a more detailed description of risks and opportunities are presented in the section on Risks and opportunities in the 2016 Annual Report (pages $56-59$ ).
Properties are recognised at fair value and changes in value are recognised in profit or loss. Effects of changes in value on consolidated profit, the equity/assets ratio and the loan-to-value ratio are also presented in the section on Risks and opportunities and the sensitivity analysis in the 2016 Annual Report. Financial risk, defined as the risk of insufficient access to long-term funding through loans, and Fabege's management of this risk are also described in the 2016 Annual Report (pages 58-59).
No material changes in the company's assessment of risks have arisen following publication of the 2016 Annual Report. Fabege's aims for the capital structure are to have an equity/assets ratio of at least 35 per cent and an interest coverage ratio of at least 2.0. The aim for the loanto-value ratio is a maximum of 55 per cent.
| Effect. | ||
|---|---|---|
| Change | SEKm | |
| Rental income, total | 1% | 21.8 |
| Rent level, commercial income | 1% | 20.8 |
| Financial occupancy rate | percentage point | 23.7 |
| Property expenses | 1% | 6.0 |
| Interest expense, rolling 12 months 1 | $+/-1$ percentage point | 39/67 |
| Interest expenses, longer term perspective | percentage point | 225.5 |
The sensitivity analysis shows the effects on the Group's cash flow and profit on an annualised basis after taking account of the full effect of each parameter.
1In the short term, interest expenses increase regardless of whether the shortterm rate rises or falls. Due to interest rate floors in loan agreements, Fabege is not able to fully utilise negative interest rates, whereby a negative outcome arises even when interest rates are reduced.
| Change in value, % | Impact on after-tax profit, SEKm |
Equity/as- sets ratio, % |
Loan-to- value ratio, % |
|---|---|---|---|
| $+1$ | 396 | 45.1% | 43.9% |
| $\mathbf 0$ | 44.8% | 44.4% | |
| -1 | -396 | 44.4% | 44.8% |
Earnings and key ratios are affected by realised and unrealised changes in the value of properties. The table shows the effect of a 1 percentage point change in value after
deferred tax deduction.
Fabege and SHH have signed a contract on jointly developing around 225 tenant-owner apartments on Kista Gårdsväg in Kista, north of Stockholm. Last autumn, Fabege gained entry to the property Selfoss 1 under the land option previously acquired from the City of Stockholm. SHH has now acquired 50 per cent of the development company and the parties have agreed to run a joint venture. The sale to SHH will not entail any financial effects in an initial stage.
Expenses for the running and maintenance of properties are subject to seasonal variations. For example, cold and snowy winters give rise to higher costs for heating and snow clearance, while hot summers result in higher cooling costs. Activity in the rental market is seasonal. Normally, more business transactions are completed in the second and fourth quarters, whereby net lettings in these quarters are usually higher.
Both the property and rental markets remain very strong. Given the prevailing market conditions and Fabege's attractive property and project portfolio, the conditions are favourable for strong earnings in 2017. More completed projects will increase rental volumes which, combined with continued operational efficiency and low interest expense, is expected to generate better profit from property management. Fabege is well positioned to capitalise on the business opportunities that lie ahead.
Fabege prepares its consolidated financial statements according to International Financial Reporting Standards (IFRS). This interim report has been prepared in accordance with IAS 34 Interim Financial Reporting and the Swedish Annual Accounts Act.
Disclosures in accordance with IAS 34 Interim Financial Reporting are submitted both in the notes and in other sections of the interim report.
The Group applies the same accounting policies and valuation methods as in the latest annual report. New or revised IFRS standards or other IFRIC interpretations that came into effect after 1 January 2017 have not had any material impact on consolidated financial statements. The Parent Company prepares its financial statements according to RFR 2 Accounting for Legal Entities and the Swedish Annual Accounts Act, and applies the same accounting policies and valuation methods as in the latest annual report.
Stockholm, 27 April 2017
contin
CHRISTIAN HERMELIN Chief Executive Officer.
This interim reporthas not been examined by the company's auditors.
The Fabege share is listed on the Nasdaq Stockholm and included in the Large-Cap segment.
| Number of shares* |
of equity, % of votes,% | Proportion Proportion | |
|---|---|---|---|
| Erik Paulsson with family, | |||
| privately and company | 25,456,763 | 15.4 | 15.4 |
| BlackRock Inc. | 6,295,015 | 3.8 | 3.8 |
| Fourth AP-fund | 5,710,559 | 3.5 | 3.5 |
| Investment AB Öresund | 5,500,000 | 3.3 | 3.3 |
| Länsfötrsäkringar Funds | 4,273,594 | 2.6 | 2.6 |
| Mats Qviberg with family | 3,747,868 | 2.3 | 2.3 |
| Vanguard | 3,423,483 | 2.1 | 2.1 |
| BNP Paribas Investment Partners | 2,895,115 | 1.8 | 1.8 |
| E.N.A City AB | 2,890,000 | 1.7 | 1.7 |
| Norges Bank | 2,802,572 | 1.7 | 1.7 |
| Handelsbanken Funds | 2,249,981 | 1.4 | 1.4 |
| Standrad Life | 1,985,406 | 1.2 | 1.2 |
| Principal Global Investors | 1,975,630 | 1.2 | 1.2 |
| Stichting Pensionfonds ABP | 1,972,195 | 1.2 | 1.2 |
| Pensionskassan SHB Försäkringsförenng | 1,920,000 | 1.2 | 1.2 |
| Total 15 largest shareholders | 73,098,181 | 44.2 | 44.2 |
| Other | 92,293,391 | 55.8 | 55.8 |
| Total no. of | |||
| shares outstanding | 165,391,572 | 100.0 | 100.0 |
| Treasury shares | 0 | 0 | 0 |
| Total no. of registrated shares | 165 301 572 | 100.0 | 100.0 |
*The verification date may vary for foreign shareholders.
Source: Holdings of Modular Finance AB. Compiled and processed data from various sources, including Euroclear, Morningstar and the Swedish Financial Supervisory Authority (Finansinspektionen).
The Fabege share is traded on Nasdaq Stockholm, BOAT, BATS Chi-X and the London Stock Exchange. Number of shareholders at 31 Mach 2017: 40,449. The share price at the end of the period was SEK 142.50.
Fabege has signed a lease with Snow Software AB, which is relocating its Swedish head office to Solna Business Park. The parties have signed a green seven-year lease for approximately 4,100 sqm at an annual rent totalling just over SEK 11m. Occupancy will take place in February 2018.
"Snow Software is continuing to expand and is constantly attracting new employees. We need to improve, change and renew our workplace to keep pace with our growth, as this creates the best conditions to allow us to continue delivering at the high level demanded by the software industry. Now we will be working with Fabege to build an office that reflects the company's ethos, energy and culture," says Peter Björkman, Chief Technology Officer.
| 2017 | 2016 | 2016 | Rolling 12 m | |
|---|---|---|---|---|
| SEKm | Jan-Mar | Jan-Mar | Jan-Dec | Apr-Mar |
| Rental income | 546 | 519 | 2,105 | 2,132 |
| Property expenses | $-167$ | $-164$ | $-598$ | $-601$ |
| Net operating income | 379 | 355 | 1,507 | 1,531 |
| Surplus ratio, % | 69% | 68% | 72% | 73% |
| Central administration | $-19$ | $-16$ | $-70$ | $-73$ |
| Net interest/expense | $-133$ | $-131$ | $-541$ | $-543$ |
| Share in profits of associated companies | $-11$ | $-13$ | $-425$ | $-423$ |
| Profit/loss from property management | 216 | 195 | 471 | 492 |
| Realised changes in value of properties | $\Omega$ | 160 | 491 | 331 |
| Unrealised changes in value of properties | 833 | 1,519 | 7,614 | 6,928 |
| Unrealised changes in value, fixed income derivatives | 89 | $-118$ | 99 | 306 |
| Changes in value of shares | $-3$ | $\Omega$ | 5 | $\overline{2}$ |
| Profit/loss before tax | 1,135 | 1,756 | 8,680 | 8,059 |
| Current tax | $\overline{\phantom{0}}$ | $-88$ | $-87$ | |
| Deferred tax | $-253$ | $-90$ | $-1,485$ | $-1,648$ |
| Profit/loss for period/year | 882 | 1,665 | 7,107 | 6,324 |
| Items that will not be restated in profit or loss | $\Omega$ | |||
| Revaluation of defined-benefit pensions | $-5$ | $-5$ | ||
| Comprehensive income for the period/year | 882 | 1,665 | 7,102 | 6,319 |
| Total comprehensive income attributable to: | ||||
| Parent company shareholders | 882 | 1,665 | 7,107 | 6,324 |
| Non-controlling interest | $\Omega$ | |||
| Earnings per share, SEK | 5:33 | 10:07 | 42:97 | 38:20 |
| Total earnings per share, SEK | 5:33 | 10:07 | 42:94 | 38:23 |
| No. of shares at period end, millions | 165.4 | 165.4 | 165.4 | 165.4 |
| Average no. of shares, million | 165.4 | 165.4 | 165.4 | 165.4 |
| 2017 | 2016 | 2016 | |
|---|---|---|---|
| SEKm | Mar 31 | Mar 31 | Dec 31 |
| Assets | |||
| Properties | 50,832 | 40,467 | 47,842 |
| Other tangible fixed assets | $\overline{2}$ | 2 | |
| Financial fixed assets | 360 | 906 | 516 |
| Current assets | 647 | 533 | 587, |
| Short-term investments | 142 | 66 | 114 |
| Cash and cash equivalents | 24 | 33 | 62 |
| Total assets | 52,007 | 42,006 | 50,223 |
| Equity and liabilities | |||
| Shareholder's equity | 23,277 | 18,144 | 23,002 |
| Deferred tax | 3,521 | 1,876 | 3,271 |
| Other provisions | 218 | 148 | 215 |
| Interest-bearing liabilities 1 | 22,548 | 19,269 | 21,978 |
| Other long-term liabilities | $\mathbf{0}$ | 621 | $\Omega$ |
| Derivative instrument | 470 | 777 | 559 |
| Non-interest-bearing liabilities | 1,973 | 1,171 | 1,198 |
| Total equity and liabilities | 52,007 | 42,006 | 50,223 |
1Of which shortterm SEK 87,625m (7,458)
| Shareholders' | Of which, attributable to |
Of which Parent Company attributable to non- |
|
|---|---|---|---|
| SEKm | equity | shareholders controlling interest | |
| Shareholders' equity, 1 January 2016, according to adopted Statement of financial | |||
| position | 16,479 | 16,479 | |
| Cash dividend | $-579$ | $-579$ | |
| Profit for the period | 7,107 | 7,107 | |
| Other comprehensive income | $-5$ | -5 | |
| Shareholders' equity, 31 December 2016 | 23,002 | 23,002 | |
| Cash dividend | -662 | -662 | |
| Acquired minority interest | 55 | 55 | |
| Profit for the period | 882 | 882 | |
| Other comprehensive income | |||
| Shareholders' equity, 31 March 2017 | 23,277 | 23,222 | 55 |
| SEKm | 2017 Jan-Mar |
2016 Jan-Mar |
2016 Jan-Dec |
|---|---|---|---|
| Operations | |||
| Net operating income | 379 | 355 | 1,507 |
| Central administration | $-19$ | -16 | $-70$ |
| Reversal of depreciation | $\circ$ | 0 | $\Omega$ |
| Interest received | $\overline{2}$ | $\overline{2}$ | 11 |
| Interest paid | $-145$ | $-130$ | $-647$ |
| Income tax paid | $-29$ | $\Omega$ | 4 |
| Cash flow before changes in working capital | 188 | 211 | 805 |
| Change in working capital | |||
| Change in current receivables | 898 | 35 | 84 |
| Change in current liabilities | 789 | 32 | $-112$ |
| Total change in working capital | 1,687 | 67 | $-28$ |
| Cash flow from operating activities | 1,875 | 278 | 777 |
| Investing activities | |||
| Investments in new-builds, extensions and conversions | $-2,131$ | $-472$ | $-2,600$ |
| Acquisition of properties | $-345$ | $-152$ | $-460$ |
| Divestment of properties | 2,143 | 2,315 | |
| Other tangible fixed assets | $-306$ | 3 | $-332$ |
| Cash flow from investing activities | $-2,779$ | 1,522 | $-1,076$ |
| Financing activities | |||
| Dividend to shareholders | $-579$ | ||
| Change in interest bearing liabilities | 870 | $-1,799$ | 908 |
| Cash flow from investing activities | 870 | $-1.799$ | 329 |
| Cash flow for the period | $-38$ | 30 | |
| Cash and cash equivalents at beginning of period | 62 | 32 | 32 |
| Cash and cash equivalents at end of period | 24 | 33 | 62 |
| ⁴ | ||
|---|---|---|
Derivatives are measured continuously at fair value in compliance with level 2, with the exception of the callable swaps measured in accordance with level 3. Changes in value are recognised in profit or loss. IAS 39 has also been applied in the Parent Company since 2006. No changes have been made to the measurement model.
| Group | Parent Company | ||||
|---|---|---|---|---|---|
| IFRS, level 3, SEKm | 2017 Mar 31 |
2016 Dec 31 |
2017 Mar 31 |
2016 Dec 31 |
|
| Opening value | $-218$ | $-396$ | $-218$ | $-396$ | |
| Acquisitions/Investments | |||||
| Changes in value | 39 | 178 | 39 | 178 | |
| Matured | |||||
| Closing value | $-166$ | $-218$ | $-166$ | $-218$ | |
| Carrying amount | $-166$ | $-218$ | $-166$ | $-218$ |
1 Is attributable in its entirety to derivative instruments held by the company at the end of the quarter and shown in the statement of comprehensive income.
| 2017 | 2016 | |
|---|---|---|
| Defered tax attributable to: | Mar 31 | Dec 31 |
| - tax loss carryforwards, SEKm | $-1.079$ | $-1,129$ |
| - difference between book value and tax value in respect of properties, SEKm | 4.699 | 4,516 |
| - derivatives, SEKm | $-103$ | $-123$ |
| - other, SEKm | ||
| Net debt, deferred tax, SEKm | 3,521 | 3,271 |
Details are provided below regarding reconciliation of the financial key ratios that Fabege continually monitors and for which established financial targets are in place. The following financial targets have been established by the Board of Directors:
| 2017 | 2016 | 2016 | |
|---|---|---|---|
| Equity/assets ratio | Mar 31 | Mar 31 | Dec 31 |
| Equity, SEKm | 23,277 | 18,144 | 23,002 |
| Total assets, SEKm | 52,007 | 42,006 | 50,223 |
| Equity/assets ratio | 45% | 43% | 46% |
| Loan-to-value ratio, properties | 2017 Mar 31 |
2016 Mar 31 |
2016 Dec 31 |
| Interst-bearing liabilities, SEKm | 22,548 | 19,269 | 21,978 |
| Booked value properties, SEKm | 50,832 | 40,467 | 47,842 |
| Loan-to-value ratio, properties | 44% | 48% | 46% |
| Debt ratio | 2017 Mar 31 |
2016 Mar 31 |
2016 Dec 31 |
| Operating surplus, SEKm | 1.531 | 1.434 | 1,507 |
| Central administration, SEKm | $-73$ | $-65$ | $-70$ |
| Total, SEKm | 1,458 | 1,369 | 1,437 |
| Interest-bearing liabilities, SEKm | 22,548 | 19,269 | 21,978 |
| Debt ratio, multiple | 15.5 | 14.1 | 15.3 |
| Interst coverage ratio, multiple | 2017 Mar 31 |
2016 Mar 31 |
2016 Dec 31 |
| Net operating income, SEKm | 379 | 355 | 1,507 |
| Central administration, SEKm | $-19$ | $-16$ | $-70$ |
| Total, SEKm | 360 | 339 | 1,437 |
| Net intrest/expense, SEKm | $-133$ | $-131$ | $-541$ |
| Interst coverage ratio, multiple | 2.7 | 2.6 | 2.7 |
| EPRA EPS | 2017 Jan-Mar |
2016 Jan-Mar |
2016 Jan-Dec |
| Profit from property management, SEKm | 216 | 195 | 471 |
| Tax-deductable depreciation, SEKm | $-148$ | $-131$ | $-590$ |
| Sum, SEKm | 69 | 64 | $-119$ |
| Nominal tax (22%), SEKm | 15 | 14 | $-26$ |
| EPRA earnings in total, (Profit from property management minus nominal tax) SEKm | 201 | 181 | 497 |
| Number of shares, millions | 165 | 165 | 165 |
| EPRA EPS, SEK per share | 1:22 | 1:09 | 3:01 |
| 2017 | 2016 | 2016 |
|---|---|---|
| Jan-Mar | Jan-Mar | Jan-Dec |
| 23,222 | 18.144 | 23,003 |
| 470 | 777 | 559 |
| 3.521 | 1.876 | 3,271 |
| 27,213 | 20,797 | 26,832 |
| 165 | 165 | 165 |
| 165 | 126 | 163 |
| 2017 | 2016 | 2016 |
| Jan-Dec | ||
| 882 | 1.665 | 7,107 |
| 23.140 | 17.312 | 19,741 |
| 15.2% | 38.5% | 36.0% |
| Jan-Mar | Jan-Mar |
Contingent liabilities comprise the balance sheet date guarantees and commitments in favour of associated companies of SEK 202m (202) and other $0(0)$ .
No reclassifications took place during the first quarter. The properties Distansen 6 and 7 in Solna, taken over during the period, were classified as investment properties. Fortet 2 was classified as a development property. Distansen 4 (land) and the land properties and development rights (not reallotted), which was acquired through Råsta, were classified as land and project properties.
| 2017 | 2016 | 2016 | |
|---|---|---|---|
| SEKm | Jan-Mar | Jan-Mar | Jan-Dec |
| Income | 61 | 36 | 221 |
| Expenses | $-70$ | $-65$ | $-263$ |
| Net financial items | $-18$ | $-374$ | $-932$ |
| Changes in value, fixed-income derivatives | 89 | $-118$ | 99 |
| Changes in value, equities | $-3$ | 0 | 6 |
| Group Contribution | 0 | 0 | $-204$ |
| Profit before tax | 59 | -521 | $-1,073$ |
| Current tax | ٠ | $-19$ | |
| Deferred tax | $-20$ | 14 | 50 |
| Profit for the period/year | 39 | $-407$ | $-1,042$ |
| 2017 | 2016 | 2016 | |
|---|---|---|---|
| SEKm | Mar 31 | Mar 31 | Dec 31 |
| Participation in Group companies | 12,516 | 12,516 | 12,516 |
| Other fixed assets | 42,888 | 41.957 | 43,105 |
| of which, receivables from Group companies | 42.541 | 41.195 | 42,671 |
| Current assets | 86 | 98 | 184 |
| Cash and cash equivalents | 24 | 32 | 53 |
| Total assets | 55,514 | 54,603 | 55,858 |
| Shareholders' equity | 10.059 | 11.894 | 10,681 |
| Provisions | $-35$ | $-103$ | $-55$ |
| Long-term liabilities | 36,558 | 36,869 | 38,279 |
| of which, liabilities to Group companies | 24,510 | 23,589 | 24,783 |
| Current liabilities | 8,932 | 5.943 | 6,953 |
| Total equity and liabilities | 55,514 | 54,603 | 55,858 |
| 2017 | 2016 | 2015 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| SEKm | Quarter 1 | Quarter 4 | Quarter 3 | Quarter 2 | Quarter 1 | Quarter 4 | Quarter 3 | Quarter 2 | |
| Rental income | 546 | 532 | 534 | 520 | 519 | 505 | 495 | 496 | |
| Property expenses | $-167$ | $-150$ | $-133$ | $-151$ | -164 | $-156$ | $-130$ | $-131$ | |
| Net operating income | 379 | 382 | 401 | 369 | 355 | 349 | 365 | 365 | |
| Surplus ratio | 69% | 72% | 75% | 71% | 68% | 69% | 74% | 74% | |
| Central administration | -19 | -17 | -17 | $-20$ | -16 | $-17$ | -16 | $-16$ | |
| Net interest expence | $-133$ | $-129$ | $-139$ | $-142$ | $-131$ | $-146$ | $-143$ | $-140$ | |
| Share in profits of associated companies | -11 | $-402$ | -16 | 6 | $-13$ | $-14$ | -59 | -8 | |
| Profit/loss from property management | 216 | -166 | 229 | 213 | 195 | 172 | 147 | 201 | |
| Realised changes in value of properties | $\circ$ | 309 | 20 | $\overline{2}$ | 160 | 17 | 3 | $\Omega$ | |
| Unrealised value of properties | 833 | 3,136 | ,760 | 1,199 | ,519 | ,282 | 590 | 673 | |
| Unrealised changes in value, fixed-income derivatives | 89 | 230 | 42 | $-55$ | $-118$ | 151 | $-26$ | 194 | |
| Changes in value, equities | $-3$ | 5 | 0 | $\Omega$ | $\Omega$ | $-26$ | $-28$ | -3 | |
| Profit for the period/year | 1,135 | 3,514 | 2,051 | 1,359 | 1,756 | 1,596 | 686 | 1,065 | |
| Current tax | ٠ | -89 | $\mathbf{2}$ | 0 | -2 | $\Omega$ | $\Omega$ | ||
| Deferred tax | $-253$ | $-664$ | $-437$ | $-294$ | $-90$ | $-416$ | $-167$ | $-235$ | |
| Comprehensive income for the period/year | 882 | 2,761 | 1,616 | 1,065 | 1,665 | 1,178 | 519 | 830 |
| 2017 | 2016 | 2015 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| SEKm | Quarter 1 | Quarter 4 | Quarter 3 | Quarter 2 | Quarter 1 | Quarter 4 | Quarter 3 | Quarter 2 | ||
| Assets | ||||||||||
| Properties | 50,832 | 47,842 | 44,659 | 42,418 | 40,467 | 40,279 | 37,630 | 36,361 | ||
| Other tangible fixed assets | 2 | $\overline{2}$ | 2 | 2 | ||||||
| Financial fixed assets | 360 | 516 | 916 | 886 | 906 | 923 | .562 | 1,644 | ||
| Current assets | 647 | ,687 | 500 | 529 | 533 | 446 | 438 | 506 | ||
| Short-term investments | 142 | 114 | 89 | 64 | 66 | 70 | 50 | 48 | ||
| Cash and cash equivalents | 24 | 62 | 36 | 195 | 33 | 32 | 37 | 411 | ||
| Total assets | 52,007 | 50,223 | 46,202 | 44,094 | 42,006 | 41,751 | 39,718 | 38,971 | ||
| Equitites and liabilities | ||||||||||
| Shareholders' equity | 23,277 | 23,002 | 20,246 | 18,630 | 18,144 | 16,479 | 15,299 | 14,780 | ||
| Deferred tax | 3,521 | 3,271 | 2,648 | 2,211 | ,876 | 1,786 | ,502 | 1,335 | ||
| Other provisions | 218 | 215 | 142 | 154 | 148 | 150 | 159 | 159 | ||
| Interest-bearing liabilities | 22,548 | 21,978 | 20,818 | 20,574 | 19,269 | 21,068 | 20,513 | 20,436 | ||
| Other long-term liabilities | $\Omega$ | $\Omega$ | 625 | 623 | 621 | 619 | 617 | 615 | ||
| Derivative instruments | 470 | 559 | 789 | 831 | 777 | 658 | 809 | 783 | ||
| Non-interest bearing liabilitis | .973 | 1,198 | 934 | 1,071 | 1,171 | 991 | 819 | 863 | ||
| Total equity and liabilities | 52,007 | 50,223 | 46,202 | 44,094 | 42,006 | 41,751 | 39,718 | 38,971 |
| ⁴ | ||||||
|---|---|---|---|---|---|---|
The company presents certain financial measures in the interim report that are not defined according to IFRS. The company considers that these measures provide valuable supplementary information for investors and company management, as they enable an assessment and benchmarking of the company's presentation.
Since not all companies calculate financial measures in the same way, these are not always comparable to measures used by other companies. These financial measures should not therefore be regarded as substitutes for measures defined according to IFRS. The following key ratios are not defined according to IFRS, unless otherwise stated.
Profit for the period/year divided by average shareholders' equity including noncontrolling interest. In interim reports, the return is converted into its annualised value without taking account of seasonal variations.
Profit before tax plus interest expenses, divided by average capital employed. In interim reports, the return is converted into its annualised value without taking account of seasonal variations.
Interest-bearing liabilities divided by the carrying amount of the properties at the end of the period.
Dividend for the year divided by the share price at year-end.
Parent Company shareholders' share of equity according to the balance sheet, divided by the number of shares at the end of the period.
Lease value divided by rental value at the end of the period.
Profit from property management less tax at a nominal rate attributable to profit from property management divided by average number of shares. Taxable profit from property management is defined as profit from property management less such amounts as tax-deductible depreciation and remodelling.
Shareholders' equity per share following the reversal of fixed-income derivatives and deferred tax according to the balance sheet.
Properties that are being actively managed on an ongoing basis.
Properties in which a conversion or extension is in progress or planned that has a significant impact on the property's net operating income. Net operating income is affected either directly by the project or by limitations on lettings prior to impending improvement work.
Lease value plus estimated annual rent for vacant premises after a reasonable general renovation.
Cash flow from operating activities (after changes in working capital) divided by the average number of outstanding shares.
Stated as an annual value. Index-adjusted basic rent under the rental agreement plus rent supplements.
Land and development properties and properties in which a new build/complete redevelopment is in progress.
New lettings during the period less terminations to vacate.
Parent Company shareholders' share of profit after tax for the period divided by average number of outstanding shares during the period. Definition according to IFRS.
Net operating income less central administration in relation to net interest items (interest expenses less interest income).
In accordance with IFRS 8, segments are presented from the point of view of management, divided into the following segments: Property Management, Property Development and Transactions. Rental income and property expenses, as well as realised and unrealised changes in value including tax, are directly attributable to properties in each segment (direct income and expenses). In cases where a property changes character during the year, earnings attributable to the property are allocated to each segment based on the period of time that the property belonged to each segment. Central administration and items in net financial expense have been allocated to the segments in a standardised manner based on each segment's share of the total property value (indirect income and expenses). Property assets are directly attributed to each segment and recognised on the balance sheet date.
Interest-bearing liabilities divided with rolling twelve-month net operating income less central administration.
Interest-bearing liabilities divided by shareholders' equity including non-controlling interest.
Shareholders' equity divided by total assets.
Total assets less non-interest-bearing liabilities, provisions and deferred tax.
Net operating income for the period plus unrealised and realised changes in the value of properties divided by market value at period end.
Proportion of leases that are extended in relation to the proportion of cancellable leases.
Net operating income divided by rental income.
*This key ratio is operational and is not regarded as an alternative performance measure according to
Fabege is one of Sweden's leading property companies focusing mainly on letting and managing office premises as well as city district development. The company offers modern premises in prime locations in fastgrowing submarkets in the Stockholm region, such as Stockholm inner city, Solna and Hammarby Sjöstad.
Fabege offers attractive and efficient premises, mainly offices but also retail and other premises. The concentration of properties to wellcontained clusters leads to greater customer proximity and, coupled with Fabege's extensive local expertise, creates a solid foundation for efficient property management and high occupancy.
At 31 March 2017, Fabege owned 88 properties with a total market value of SEK 50.8bn. The rental value was SEK 2.4bn.
Fabege works with sustainable city district development, with a primary focus on commercial properties within a limited number of well located submarkets in the Stockholm area.
Fabege aims to create value by managing, improving and actively adjusting its property portfolio through sales and acquisitions.
Fabege's operational activities are conducted in three business areas: Property Management, Property Development and Transactions.
Fabege's strategy is to create value by managing and developing the property portfolio and through transactions, acquiring and divesting properties with the aim of increasing potential in the property portfolio. Fabege's properties are located in the most liquid market in Sweden.
Attractive locations lead to a low vacancy rate in the property management portfolio. Modern properties permit flexible solutions and attract customers. With its concentrated portfolio and high-profile local presence, investments aimed at raising the attractiveness of an area benefit many of Fabege's customers.
A number of external factors affect Fabege's operations and these, together with the transaction volume and the office market trend in Stockholm, represent the prerequisites for the company's success.
Stockholm is one of the five metropolitan areas in Western Europe where the population is rising the most. According to forecasts, Stockholm County will have half a million inhabitants more than today by 2030. People in the active labour force account for the largest growth, which is boosting demand for office premises.
New technology and new working methods are fuelling demand for flexible and space-efficient premises in prime locations. Excellent peripheral service and good communication links in the form of public transport services are in increasing demand, as are environmentally certified offices and green leases.
The trend for both the Swedish and global economy impacts the property market. Lower vacancy rates in Stockholm's inner city and a stronger economic climate have historically meant rising rents.
Sustainability issues are becoming increasingly important, in terms of both individual properties and entire areas. Interest in environmental considerations involving choice of material and energy-saving measures is on the rise. Demand is increasing for premises in areas with a favourable mix of offices, retail, service and residential units, as well as excellent transport links and environmental commitment.
The essence of Fabege's operations is finding the right premises for a customer's specific requirements and ensuring that the customer is content. This is accomplished through longterm work and based on close dialogue with the customer, thus building mutual trust and loyalty.
Property transactions are an integral part of Fabege's business model and make a significant contribution to the company's earnings. The company continuously analyses its property portfolio to utilise opportunities to increase capital growth, through both acquisitions and divestments.
High-quality property development is the second key cornerstone of our business. Fabege has long-standing expertise in pursuing extensive property development projects with the aim of attracting long-term tenants to properties that have not yet been fully developed and can be redesigned based on the customer's specific requirements.
Fabege AB (publ) Box 730, SE 169 27 Solna, Sweden Visiting address: Pyramidyägen 7, 169 % Solna, Sweden
Telephone: +46 (0)8-555, 148, 00
Email: [email protected] www.fabege.se Corporate registration number: 556049-1523
Registered office of the Boogle of Directors: Stockholm
Interim report Jan-June 2017 Interim report Jan-Sep 2017 Year-end report 2017
7 July 2017, 8:00 am CET 19 October 2017, 8:00 am CET 5 February 2018, 12:00 noon CET
| 9 Jan 2017 | Snow Software moves to Solna Business Park |
|---|---|
| 25 Jan 2017 | Fabege obtains more green financing via SFF |
| 2 Feb 2017 | Year-end report Jan-Dec 2016 |
| 2 Feb 2017 | Fabege doubles earnings |
| 7 Feb 2017 | Fabege issues green five-year bond via SFF |
| 9 Feb 2017 | Persistently high demand for Fabege's green |
| bonds | |
| 20 Feb 2017 | Notice of Annual General Meeting in Fabege |
| 1 Mar 2017 | AB (publ) |
| 21 Mar 2017 | Fabege publishes its annual report for 2016 |
| The Swedish Environmental Protection Agency | |
| becomes tenant in newly started project in | |
| Hammarby Sjöstad | |
| 29 Mar 2017 | Decisions made at Eabeae's 2017 AGM |
Visit the Group's website for further information about Fabege and its operations. There will also be a web presentation on 27 April 2017, at which Christian Hermelin and Åsa Bergström will present the interim report on 27 April 2017
CHRISTIAN HERMELIN Chief Executive Officer Tel: +46 (0)8-555 148 25, +46 (0)733-87 18 25
ÅSA BERGSTRÖM Vice President and CFO
Tel: +46 (0)8-555 148 29, +46 (0)706-66 13 80
This information is of the type that Fabege AB is required to disclose under the EU Market Abuse Regulation and the Swedish Securities Market Act. This information was released, through the provision of the above-mentioned contact person, for publication on 27 April 2017
Fabege AB (publ) Box 730, SE 169 27 Solna, Sweden Visiting address: Pyramidvägen 7, 169 % Solna, Sweden
Telephone: +46 (0)8-555, 148, 00 Email: [email protected] www.fabege.se Corporate registration number:
Registered office of the Board L 556049-1523 of Directors: Stockholm
Fabege AB (publ) Box 730, SE 169 27 Solna, Sweden Visiting address: Pyramidyägen 7, 169 % Solna, Sweden
Telephone: +46 (0)8-555, 148, 00
Email: [email protected] www.fabege.se Corporate registration number: 556049-1523
Registered office of the Boogle of Directors: Stockholm
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