Hufvudstaden

Quarterly Report • Feb 12, 2010

Year-End Report 2009

• The operating result before changes in value increased by 5 per cent to SEK 915 million (875). The improved profit can be attributed mainly to higher rents and lower maintenance costs.
• The result for the year was SEK -357 million (-449), equivalent to SEK -1.73 per share (-2.18). The change in result can be attributed to a net of unrealized decrease in value in property holdings during the year and dissolution of deferred tax compared to previous year.
• The equity ratio was 55 per cent (56), the net loan-to-value ratio was 16 per cent (16) and the interest coverage ratio multiple was 7.0 (5.5).
• The Board proposes an increase in the ordinary dividend to SEK 2.10 per share (1.90).
• The fair value of the property holdings at the year-end was set at SEK 18.1 billion (19.1), equivalent to a net asset value of SEK 62 per share (66).
• The consolidated net revenue amounted to SEK 1,372 million (1,348), an increase of 2 per cent.
• The rental vacancy level at the year-end was 6.2 per cent (5.3) and excluding projects in progress 4.0 per cent (2.9).

________________________

GROUP

RESULTS

Property management

Gross profit for the period totalled SEK 924.0 million (887.3), an increase of 4 per cent. The increase can be attributed mainly to higher rents in conjunction with renegotiations. Property management expenses amounted to SEK 380.8 million (394.9). The decrease can be attributed mainly to higher costs during the previous year for the evacuation of tenants. Net rents from property management during the year totalled SEK 1,304.8 million (1,282.2).

The turnover-based rent supplement at the NK properties amounted to SEK 5.6 million (10.1). The decrease can be attributed to an increase in minimum rents in conjunction with renegotiations. Apart from this there were no seasonal variations in rents.

The property management results for each business area are reported on page 6.

Parking operations

Operations comprise parking operations at Parkaden AB in Stockholm.

Net revenue amounted to SEK 66.9 million (65.4), expenses amounted to SEK 47.0 million (45.8) and gross profit amounted to SEK 19.9 million (19.6).

Other Income Statement items

Central administration totalled SEK -29.2 million (-32.0). Changes in the value of investment properties totalled SEK -1,239.1 million (-1,629.4) and changes in the value of interest derivatives totalled SEK -25.6 million (-126.6).

Financial income and expense

Net financial income and expense amounted to SEK -128.1 million (-144.3). The decrease in the net cost can be explained by lower interest rates for loans with short fixed interest terms.

Tax

The Group's tax (actual and deferred) for the year was SEK 120.6 million (576.2), of which SEK -159.4 million was actual tax (-115.8) and SEK 280.0 million was deferred tax (692.0). The positive tax figure can be explained by the dissolution of deferred tax as a result of unrealized decreases in value.

Profit for the year

The consolidated profit after tax amounted to SEK -357.5 million (-449.2). The change in the result is due mainly to the net of the unrealized decrease in value of the property holdings and the dissolution of deferred tax.

ACQUISITIONS AND INVESTMENTS

Investments during the year in properties and equipment totalled SEK 285.4 million (184.8).

PROPERTY PORTFOLIO

The fair value of the Hufvudstaden property holdings as of December 31, 2009 was SEK 18,125 million (19,083). The decrease can be attributed to the net of unrealized changes in value and investments in the property holdings. The rentable floor space was 354,063 square metres (354,245).

The total rental vacancy level as of December 31, 2009 was 6.2 per cent (5.3) and the total rental vacancy level was 7.4 per cent (5.9). The rental vacancy level excluding projects in progress was 4.0 per cent (2.9).

Property value and net asset value

Each quarter Hufvudstaden makes an internal valuation of the fair value of each individual property. The purpose of the valuation is to assess the fair value of the property holdings. To assure the valuations, external valuations for part of the property holdings are obtained at least once a year.

There is a continuous update made during the year of the internal valuation of the properties in order to take into account purchases, sales and investments. Hufvudstaden also investigates on a continuous basis whether there are other indications of changes in the fair value of the properties. This could, for example, take the form of major lettings, terminations and material changes in the yield requirement.

In the light of the above, the change in value in the property holdings during 2009 was set at SEK -1.2 billion. The total value of the property holdings as of December 31, 2009 was SEK 18.1 billion, including investments made during the year. The unrealized change in value can be explained by a slightly higher direct yield requirement as a result of uncertainty on the credit market, the downturn in the economy and the slightly weaker rental market. The average direct yield requirement in conjunction with the above valuation was 5.3 per cent (5.1).

Valuation method

Valuation of the property holdings was done by assessing each individual property's fair value. The valuation took place on the basis of a valuation using a variation on the location price method, known as the net capitalization method. The method means that the market's yield requirement is put in relation to the net operating income of the properties.

The yield requirement is based on information compiled about the market's yield requirement for actual purchases and sales of comparable properties in similar locations. The yield requirement can vary between different regions and different sub-areas within the regions. The net operating income of the properties is based on market rental income, longterm rental vacancy level and normalized operating and maintenance costs. Account has also taken of the type of property, the technical standard, the building construction and major investment needs. For leasehold properties, the calculation was based on a yield requirement that was 0.25 percentage points higher than for properties where the land is freehold.

In making the valuation, the following direct yield requirement figures for office and retailing properties have been applied:

Stockholm	5.0-5.5 per cent
Gothenburg	5.5-6.0 per cent
Property holdings, average	5.3 per cent

Sensitivity analysis, property valuation

	Change +/-	Impact on profit before tax, +/-
Rental revenue	SEK 100/m2	SEK 700 m
Property costs	SEK 50/m2	SEK 350 m
Rental vacancy	1.0 percentage
level	points	SEK 250 m
	0.5 percentage
Yield requirement	points	SEK 1,700 m

External valuation

To guarantee the valuation, external valuations were obtained at the turn of the year from two valuation companies, DTZ Sverige AB and Forum Fastighetsekonomi AB. The external valuations cover nine properties and are equivalent to 29 per cent of the internally assessed fair value. For the full year 2009, external valuations equivalent to 48 per cent were made. The starting point for the selection of the properties was that the objects selected should represent different property categories, towns, locations, technical standard and construction standard. The properties that underwent an external valuation were Grönlandet Södra 11, Hästskon 10, Inom Vallgraven 10:9, Inom Vallgraven 12:10, Järnplåten 28, Medusa 1, Orgelpipan 7, Pumpstocken 10 and Skären 9.

The external valuation companies have set a market value for these properties of SEK 5.2 billion with a range of approximately +/- 5 per cent. Hufvudstaden's internal valuation of the same properties was SEK 5.2 billion. The internal valuations thus concur with the external valuations.

Net asset value

Based on the valuation of the property holdings, the net asset value was SEK 12.8 billion or SEK 62 per share after tax. When calculating the net asset value, calculated deferred tax has been used. This has been set at 10 per cent of the difference between the assessed fair value of the properties and the residual value for tax purposes for the properties and has been assessed in the light of current tax legislation, which means that properties can be sold by a limited company without tax implications. The purchaser, however, loses the basis for depreciation, which could justify some compensation, which has been set at 10 per cent. If the tax rate for deferred tax according to the Statement of Financial Position (26.3 per cent) had been used in the calculation, the net asset value would have been SEK 10.2 billion or SEK 50 per share. If the tax rate had been 0 per cent, the net asset value would be SEK 14.4 billion or SEK 70 per share.

RENTAL MARKET

Interest in modern, flexible office space in prime locations in central Stockholm was stable during the year, despite the downturn in the economy. Vacant space in this category has continued to remain low. Rents, however, have been subject to certain downward pressure. In conjunction with renegotiations and new leases for office space in Stockholm's most attractive locations in Bibliotekstan, at Norrmalmstorg/Hamngatan and in the Hötorg area, rents were noted of SEK 3,500-4,800 per square metre per year, excluding the property tax supplement. Interest in well-situated retail premises in the same submarkets has also been high. Rents for prime-location retailing space are in the range SEK 12,000-17,000 per square metre per year, excluding the property tax supplement.

Demand for modern office premises in the central sub-markets of Gothenburg has also been stable. There was, however, a continued low level of interest in properties of a low standard requiring modernization and this is also the case in Stockholm. Market rents for modern, well-planned office premises in prime locations were between SEK 1,600 and SEK 2,300 per square metre per year, excluding the property tax supplement. For retail premises the market rent remained on the same level, SEK 5,000- 11,000 per square metre per year, excluding the property tax supplement.

During the year, Hufvudstaden renegotiated agreements equivalent to SEK 208.0 million in annual rental income. Lease renegotiations for office and retailing premises led to an average increase in the rent levels of approximately 9 per cent (14).

FINANCING STRUCTURE

Hufvudstaden's borrowing as of December 31, 2009 amounted to SEK 3,400.0 million (3,400.0). The average fixed interest period was 36 months (43), the average capital tie-up period was 39 months (51) and the average annualized equivalent interest rate was 3.7 per cent (4.0). Interest-bearing net liabilities amounted to SEK 2,990.0 million (2,975.0).

The fair value of interest swaps as of December 31, 2009 was SEK -135.8 million (-144.8).

Capital tie-up structure, December 31, 2009

Maturity	Volume,	Share,
Date	SEK m	%
2010	500,0	15
2011	950,0	28
2012	250,0	7
2013	950,0	28
2017	750,0	22
Totalt	3,400,0	100

Räntebindningsstruktur, 31 december 2009

Maturity	Volume,	Share,	Average
Date	SEK m	%	AER, %
2010	1,000,0	29	2,5
2011	600,0	18	3,6
2012	250,0	7	4,9
2013	600,0	18	3,9
2014	200,0	6	3,6
2017	750,0	22	4,8
Totalt	3,400,0	100	3,7

SHARES AND SHAREHOLDERS

Hufvudstaden, whose shares are listed on NASDAQ OMX Stockholm, had 19,057 shareholders at the turn of the year. The proportion of foreign ownership as of December 31, 2009 was 20 per cent of the total number of outstanding shares (22). In January 2010, SEB Trygg Liv announced that they had disposed of the majority of their shares. The series A share price as of December 31, 2009 was SEK 54.25 and stock exchange value was SEK 11.9 billion.

Largest shareholders as of December 31, 2009

	Number	Number
	of shares,	of votes,
	%	%
Lundbergs	44.2	87.6
SEB Trygg Liv	11.1	2.3
State Street Bank and Trust	2.3	0.5
Mellon Fonder	2.1	0.4
JP Morgan fonder med Chase Bank	2.0	0.4
Danske Capital Sverige	1.5	0.3
Försäkringsbolaget Pensionsgaranti	1.2	0.3
SIX SIS AG	1.2	0.2
Other shareholders	32.0	7.5
Outstanding shares	97.6	99.5
Company holding	2.4	0.5
All issued shares	100.0	100.0

Shares bought back

The total number of shares held by Hufvudstaden as of December 31, 2009 was 5,006,000 series A shares, equivalent to 2.4 per cent of the total number of issued shares. No buy-backs were made during the year or after the end of the reporting period. At the 2009 Annual General Meeting the Board was granted renewed authorization to acquire up to 10 per cent of all the issued shares and to assign company shares. On March 25, 2010, the Board of Directors will propose the Annual General Meeting renew authorization to acquire and assign company shares.

Buy-back of shares as of December 31, 2009, million shares

	Total		Held by
	number	Company	other share
	of shares	holdings	holders
As of January 1,
2009	211.3	5.0	206.3
Buy-back	-	-	-
As of December
31, 2009	211.3	5.0	206.3

FOURTH QUARTER

The gross profit from property management was SEK 224.8 million (221.3). Net rents totalled SEK 332.4 million (328.4). The increase can be attributed to higher rents in conjunction with renegotiations. Property management costs amounted to SEK 107.6 million (107.1).

The gross profit from parking operations was SEK 7.9 million (6.8). Net revenue was SEK 19.8 million (18.5) and operating costs SEK 11.9 million (11.7).

The changes in value of investment properties totalled SEK -181.3 million (-545.6) which can be attributed to a slightly weaker rental market. Changes in the value of interest derivatives totalled SEK -12.1 million (-108.2).

MATERIAL RISKS AND UNCERTAINTY FACTORS

The Group is mainly exposed to financing, interest and credit risks and changes in the value of the property holdings. The Company has not identified any material risks and uncertainties other than those described in the 2008 Annual Report.

MATERIAL TRANSACTIONS WITH ASSOCIATED PARTIES

There were no material transactions with associated parties during the period.

ACCOUNTING PRINCIPLES

Hufvudstaden applies the EU-adopted IFRS standards and interpretations thereof (IFRIC). This Interim Report for the Group has been prepared in accordance with IAS 34 Interim Financial Reporting. The following new accounting principles have been applied since January 1, 2009: IAS 1 Presentation of Financial Statements. The change has meant that income and costs which were previously reported directly against equity are now reported against other comprehensive income, which is presented after the result for the year in an extended Statement of Comprehensive Income. IFRS 8 Operating segments.

Implementation has not meant any change in the division into segments. However, an adaptation has been made so that the segments reported in the financial statements concur with the information followed up by the executive management. IFRS 7 Financial instruments. Amendments to IFRS 7 have resulted in the addition of further information requirements. IAS 23 Borrowing costs. The change means that in the acquisition value of qualified assets borrowing costs are capitalized. Otherwise the accounting principles and computation methods are the same as those applied in the most recent Annual Report.

PROPOSED DIVIDEND

The Board of Directors proposes an increase in the ordinary dividend to SEK 2.10 per share.

PROPOSAL FOR THE ELECTION OF A BOARD

The Company's main shareholders have notified the Company that they intend to propose at the Annual General Meeting that the present Board members be re-elected.

ANNUAL GENERAL MEETING

The Annual General Meeting will be held at 4pm on Thursday, March 25, 2010 at the Grand Hotel, Vinterträdgården, Stockholm. The Annual Report for 2009 will be available at the Company's office in week 10 and on the Company's website. It will also be distributed to those shareholders who have expressed an interest.

FORTHCOMING INFORMATION

Annual Report 2009	March 2010
Annual General Meeting in Stockholm 2010	March 25, 2010
Interim Report, January-March 2010	May 3, 2010
Interim Report, January-June 2010	August 25, 2010
Interim Report, January-September 2010	November 10, 2010

The information in this Year-End Report is information that Hufvudstaden AB (publ) is obliged to publish according to the Securities Market Act and/or the Financial Instruments Trading Act. The information was published on February 12, 2010 at 11.45 a m.

This information is also published on Hufvudstaden's website, www.hufvudstaden.se

Questions can be answered by Ivo Stopner, President, or Magnus Jacobson, Head of Finance, telephone +46-8-762 90 00.

INCOME STATEMENTS – SUMMARY

	October - December	October December	January December	January December
GROUP, SEK m	2009	2008	2009	2008
Net sales
Property management	332.4	328.4	1,304.8	1,282.2
Parking operations	19.8	18.5	66.9	65.4
	352.2	346.9	1,371.7	1,347.6
Property management expenses
Maintenance	-13.6	-12.8	-28.5	-43.8
Operation and administration	-60.4	-60.7	-219.6	-216.0
Ground rents	-4.1	-4.0	-16.2	-16.1
Property tax	-29.5	-29.6	-116.5	-119.0
Property management expenses	-107.6	-107.1	-380.8	-394.9
Parking operations, costs	-11.9	-11.7	-47.0	-45.8
Operating expenses	-119.5	-118.8	-427.8	-440.7
Gross profit	232.7	228.1	943.9	906.9
- of which Property management	224.8	221.3	924.0	887.3
- of which Parking operations	7.9	6.8	19.9	19.6
Central administration	-9.3	-10.6	-29.2	-32.0
Operating profit before changes in value	223.4	217.5	914.7	874.9
Changes in value
Investment properties	-181.3	-545.6	-1,239.1	-1,629.4
Interest derivatives	-12.1	-108.2	-25.6	-126.6
Operating result	30.0	-436.3	-350.0	-881.1
Financial income and expense	-30.5	-30.7	-128.1	-144.3
Result before tax	-0.5	-467.0	-478.1	-1,025.4
Tax	-0.9	423.7	120.6	576.2
Result after tax	-1.4	-43.3	-357.5	-449.2
Other comprehensive income:
Change in hedging reserve	6.4	-41,7	25.5	-48.8
Total comprehensive income for the period/year	5.0	-85.0	-332.0	-498.0
Average number of outstanding shares following buy backs during the period	206,265,933	206,265,933	206,265,933	206,265,933
Result for the period/year after tax per share before and
after dilution, SEK	-0.01	-0.21	-1.73	-2.18

BALANCE SHEETS – SUMMARY

	December 31,	December 31,
GROUP, SEK m	2009	2008
Investment properties	18,125.3	19,083.2
Other fixed assets	13.5	11.6
Total fixed assets	18,138.8	19,094.8
Current assets	461.2	489.2
Total assets	18,600.0	19,584.0
Equity	10,225.9	10,949.7
Non-current liabilities	2,900.0	3,400.0
Deferred tax liability	4,335.9	4,606.9
Other non-current liabilities	138.0	147.9
Pension provisions	6.3	5.0
Total non-current liabililties	7,380.2	8,159.8
Current, interest-bearing liabilities	500.0	-
Other liabilities	493.9	474.5
Total current liabilities	993.9	474.5
Total equity and liabilities	18,600.0	19,584.0

CHANGES IN EQUITY, SUMMARY

GROUP, SEK m	January December 2009	January December 2008
Equity, opening balance	10,949.7	11,808.7
Total comprehensive income for the year	-332.0	-498.0
Dividend	-391.9	-361.0
Equity, closing balance	10,225.9	10,949.7

CASH FLOW STATEMENTS – SUMMARY

	January December	January December
GROUP, SEK m	2009	2008
Result before tax	-478.1	-1,025.4
Depreciation/impairments	6.0	4.4
Change in value, investment properties	1,239.1	1,629.4
Change in value, interest derivatives	25.6	126.6
Other changes	1.2	-0.6
Tax paid	-165.1	-71.5
Cash flow from current operations
before changes in working capital	628.7	662.9
Increase/decrease in operating receivables	11.5	11.5
Increase/decrease in operating liabilities	24.3	21.9
Cash flow from current operations	664.5	696.3
Investments in investment properties	-281.2	-182.1
Investments in equipment	-4.2	-2.7
Change in non-current receivable	-1.2	2.6
Cash flow from investments	-286.6	-182.2
Dividend paid	-391.9	-361.0
Cash flow from financing	-391.9	-361.0
Cash flow for the year	-14.0	153.1
Liquid funds at the beginning of the year	438.9	285.8
Liquid funds at the year-end	424.9	438.9

PLEDGED ASSETS AND CONTINGENT LIABILITIES

	December 31,	December 31,
GROUP, SEK m	2009	2008
Pledged assets
Mortgages	1,706.2	1,706.4
Endowment insurance	4.8	3.6
Total pledged assets	1,711.0	1,710.0
Contingent liabilities	None	None

SEGMENT REPORT - SUMMARY

	Stockholm city		Stockholm city		Gothenburg
	East Business Area			West Business Area Business Area		Total
	Jan-	Jan-	Jan-	Jan-	Jan-	Jan-	Jan-	Jan
	Dec	Dec	Dec	Dec	Dec	Dec	Dec	Dec
GROUP, SEK m	2009	2008	2009	2008	2009	2008	2009	2008
Comparable holdings
Net revenue	579.7	579.2	552.3	536.0	172.8	167.0	1,304.8	1,282.2
Property costs	-143.7	-142.6	-188.2	-202.2	-48.9	-50.1	-380.8	-394.9
Gross profit, Property	436.0	436.6	364.1	333.8	123.9	116.9	924.0	887.3
management
Parking operations			19.9	19.6			19.9	19.6
Central administration							-29.2	-32.0
Changes in value
Investment properties							-1,239.1	-1,629.4
Interest derivaties							-25.6	-126.6
Operating result							-350.0	-881.1
Financial income and expense							-128.1	-144.3
Result before tax							-478.1	-1,025.4

KEY RATIOS

	Full year	Full year	Full year	Full year	Full year
GROUP	2009	2008	2007	2006	2005
Property-related
Rentable floor space, m2	354,063	354,245	353,685	350,895	407,694
Rental vacancy level, %	6.2	5.3	3.3	6.5	7.1
Floor space vacancy level, %	7.4	5.9	4.6	8.1	8.7
Fair value, SEK bn	18.1	19.1	20.5	17.4	16.3
Financial
Return on equity, %	-3.4	-3.9	20.4	33.6	15.9
Return on capital employed, %	-2.4	-5.7	22.3	23.9	16.5
Equity ratio, %	55.0	55.9	56.4	57.4	52.2
Interest coverage ratio, multiple	7.0	5.5	6.2	5.1	5.7
Debt/equity ratio, multiple	0.3	0.3	0.3	0.3	0.4
Net loan-to-value ratio, properties, %	16.4	15.6	15.8	19.3	21.7
Loan-to-value ratio, properties, %	18.8	17.8	16.6	19.3	21.7
Data per share
Result for the period, SEK	-1.73	-2.18	11.64	16.60	6,47
Equity, SEK	49.58	53.09	57.25	57.14	41.77
Properties, fair value SEK	87.87	92.52	99.53	84.40	78.91
Net asset value, SEK	62.00	66.00	73.00	71.00	53.00
Number of outstanding shares, 1,000	206,266	206,266	206,266	206,266	206,266
Number of issued shares, 1,000	211,272	211,272	211,272	211,272	211,272

PARENT COMPANY

RESULT AND POSITION

Net revenue amounted to SEK 796.0 million (789.1). Gross profit amounted to SEK 332.6 million (401.5). The decrease can be attributed primarily to higher maintenance costs by reason of the redevelopment of Rännilen 18. Net financial income/expense was SEK 591.4 million (-144.3). This figure includes dividend of SEK 718.0 million (-) from subsidiaries. The result for the year was SEK 900.9 million (69.1).

Liquid funds at the year-end amounted to SEK 424.7 million (438.7). Investments in properties and equipment during the period totalled SEK 51.2 million (47.6).

MATERIAL RISKS AND UNCERTAINTY FACTORS

The Company is mainly exposed to financing, interest and credit risks. The Company has not identified any material risks and uncertainties other than those described in the 2008 Annual Report.

MATERIAL TRANSACTIONS WITH ASSOCIATED PARTIES

Apart from a dividend to the shareholders there were no material transactions with associated parties during the period.

ACCOUNTING PRINCIPLES

The Parent Company applies the same accounting principles as in the most recent annual report.

PARENT COMPANY, SEK m	October December 2009	October December 2008	January December 2009	January December 2008
Net revenue	200.7	196.8	796.0	789.1
Operating expenses	-141.1	-110.6	-463.4	-387.6
Gross profit	59.6	86.2	332.6	401.5
Central administration	-9.3	-10.6	-29.2	-32.0
Changes in value, interest derivatives	-12.1	-108.3	-25.6	-126.6
Operating profit	38.2	-32.7	277.8	242.9
Financial income and expense	-30.6	-30.7	591.4	-144.3
Result after net interest income/expence	7.6	-63.4	869.2	98.6
Appropriations	103.1	-95.7	103.1	-95.7
Profit before tax	110.7	-159.1	972.3	2.9
Tax	-29.5	115.8	-71.4	66.2
Result for the period/year	81.2	-43.3	900.9	69.1

INCOME STATEMENTS – SUMMARY

BALANCE SHEETS – SUMMARY

	December 31,	December 31,
PARENT COMPANY, SEK m	2009	2008
Investment properties	5,959.2	5,966.6
Other fixed assets	2,835.3	2,834.5
Total fixed assets	8,794.5	8,801.1
Current assets	943.0	472.8
Total assets	9,737.5	9,273.9
Restricted equity	1,978.7	1,978.7
Non-restricted equity	2,133.6	1,374.5
Total equity	4,112.3	3,353.2
Untaxed reserves	654.1	757.2
Appropriations	1,109.6	1,105.1
Non-current liabilities	3,038.5	3,548.5
Current liabilities	823.0	509.9
Total liabilities	5,625.2	5,920.7
Total equity and liabilities	9,737.5	9,273.9

Stockholm, February 12, 2010

Fredrik Lundberg Chairman

Claes Boustedt	Bengt Braun	Peter Egardt	Louise Lindh
Board Member	Board Member	Board Member	Board Member
Hans Mertzig	Sten Peterson	Anna-Greta Sjöberg	Ivo Stopner
Board Member	Board Member	Board Member	Board Member
			and President

This interim report has not been the subject of an examination by the Company's auditors.

DEFINITIONS

Annual rent. Gross rent calculated on an annual basis, excluding the turnover-based rent supplement. Vacant premises are reported at the market rent.

Biblioteksgatan. The area between Norrmalmstorg, Birger Jarlsgatan, Stureplan and Norrlandsgatan and which contains stores with high-class brands.

Capital employed. Total assets reduced by non-interestbearing liabilities and deferred tax liabilities.

Central administration. Costs for Group management and Group staff functions, costs for maintaining the Company's stock exchange listing and other costs common to the Company.

Equity per share. Equity in relation to the number of outstanding shares at the period-end.

Equity ratio. Equity at the period-end in relation to total assets.

Fair value. The estimated market value of the properties according to the direct yield method.

Floor space vacancy level. Vacant floor space in square metres in relation to the total lettable floor space.

Interest coverage ratio. Profit after financial income and expense, excluding unrealized changes in value plus interest expense minus interest contributions in relation to the interest expense minus interest contributions.

Investments. Expenses related to value-enhancing improvements which entail future financial benefits are capitalized. Rebuilding costs of a maintenance nature are charged to profit.

Loan-to-value ratio, properties. Interest-bearing liabilities in relation to the properties' carrying values.

Market value, properties. The amount at which the properties could be transferred on condition that the transaction takes place between parties that are independent of each other and which have an interest in the transaction being completed. In accounting terms this is known as fair value.

Net liabilities. Interest-bearing liabilities, including decided dividend less current investments.

Net loan-to-value ratio, properties. Interest-bearing liabilities, including decided dividend, minus current investments in relation to the fair value of properties.

Profit per share. Profit for the period in relation to the average number of outstanding shares during the period.

Property tax supplement. Property tax payments received from tenants.

Rental losses. Loss of revenue as a result of unlet space.

Rental vacancy level. Vacant floor space at an estimated market rent in relation to the total annual rent.

Return on capital employed. Profit before tax plus interest expense minus interest contributions in relation to the average capital employed. In the interim accounts the return has been recalculated on a full-year basis without consideration given to seasonal variations which normally arise in operations and with the exception of changes in value.

Return on equity. Profit after tax in relation to the average equity. In the interim accounts the return has been recalculated on a full-year basis without consideration given to seasonal variations that normally arise in operations and with the exception of changes in value.

Tax. Total tax for the Group comprises both actual tax and deferred tax.

In some cases there has been rounding off, which means the tables and calculations do not always tally

This document is in all respects a translation of the Swedish original Interim Report. In the event of any differences between this translation and the Swedish original, the latter shall prevail.

Hufvudstaden AB (publ) NK 100, SE-111 77 Stockholm Visiting address: Regeringsgatan 38 Telephone: +46 8-762 90 00 Fax: +46 8-762 90 01 E-mail: info@hufvudstaden.se Website: www.hufvudstaden.se Company registration number: 556012-8240 Registered office: Stockholm