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Castellum Annual Report 2011

Feb 10, 2012

2900_10-k_2012-02-10_b03d4c11-53d9-44ad-959e-cebc7922d36b.pdf

Annual Report

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Annual Report 2011

Contents

2011 Year Summary 1
CEO's Comments 2
Operations
Business Concept, Objectives and Strategies 4
Customers 6
Organization and Employees 8
Responsible Business 10
The Real Estate Portfolio
Real Estate - in general 13
Castellum's Real Estate Portfolio 15
Investments 19
Building Rights and Potential Projects 25
Castellum's regions 28
Greater Gothenburg 30
Öresund Region 34
Greater Stockholm 38
Mälardalen 42
Eastern Götaland 46
Property value 50
Financing 52
Tax 55
Opportunities and Risks 57
The Castellum Share 60
Corporate Governance Report 64
Financial Review 74
Financial Reports 77
Consolidated Statement of Comprehensive Income 78
Consolidated Balance Sheet 80
Income Statement and Comprehensive Income
for the Parent Company 82
Balance Sheet for the Parent Company 83
Change in Equity 84
Cash Flow Statement 85
Accounting Principles and Notes 86
Proposed Distribution of Profi ts 108
Statement Regarding Proposed Distribution of Profi ts 109
Signing of the Annual Report 110
Audit Report 111
Castellum's Real Estate Schedule 2011 113

The audited legal Annual Report, which comprises director's report and fi nancial reports, comprises the pages 4-110. Comparisons shown in brackets are made with the corresponding amount previous year. In the event of confl ict in interpretation or differences between this report and the Swedish version, the latter will have priority.

Annual General Meeting

Castellum AB's Annual General Meeting will take place on Thursday March 22, 2012 at 5 pm in RunAn, Chalmers Kårhus, Chalmersplatsen 1, Gothenburg. For more information and notification of attendance see www.castellum.se

Annual General Meeting calender and dividend

16 March 2012
22 March 2012
23 March 2012
27 March 2012
30 March 2012

Financial Reporting

Interim Report January-March 2012 17 April 2012 Half-year Report January-June 2012 12 July 2012 Interim Report January-September 2012 16 October 2012 Year-end Report 2012 22 January 2013

Further information

For further information please contact CEO Håkan Hellström, tel +46 705 60 74 56 or Finance Director Ulrika Danielsson tel +46 706 47 12 61 and www.castellum.se

Castellum – a short description

Business concept

Castellum's business concept is to develop and add value to its real estate portfolio, focusing on the best possible earnings and asset growth, by offering customized commercial properties, through a strong and clear presence in five growth regions - Greater Gothenburg, the Öresund Region, Greater Stockholm, Mälardalen and Eastern Götaland.

Focus on cash flow

Castellum's operations are focused on cash fl ow growth, which along with a stable capital structure provides the preconditions for robust growth in the company, and offers shareholders a competitive dividend.

The objective is an annual growth in cash fl ow, i.e., income from property management per share, of at least 10%. In order to achieve this objective, net investments of at least 5% of the property value will be made yearly. At the moment, this is equivalent to approx. SEKm 1,700. All investments will contribute to the objective of growth in income from property management within 1-2 years and have a potential asset growth of at least 10%.

Income from property management per share

Concentrated real estate portfolio with commercial focus

Castellum is one of the major listed real estate companies in Sweden. The fair value of the real estate portfolio amounts to SEK 34 billion and comprises premises for offi ce, retail, warehouse, logistics and industrial purposes. Within each of the regions where Castellum is present focus is placed on market areas and sub-markets where suffi cient volume can be found to provide the prerequisites for good business opportunities by rational management and strong presence.

Investments, i.e. enhancement and development of existing properties, acquisitions of new properties and new construction, are carried out in areas with high growth rates where opportunities are found for increased occupancy rates, increased rental levels and improved cash fl ows.

Real Estate value by region

Real estate value by category

Stable capital structure and low financial risk

Castellum's strategy is to have a stable capital structure, meaning a loan to value ratio not permanently exceeding 55% and an interest coverage ratio of at least 200%. The loan to value ratio as at 31 December, 2011 was 51% and the interest coverage ratio for the year was 278%.

Castellum's dividend policy is that at least 50% of income from property management, however investment plans, consolidation needs, liquidity and fi nancial position in general will be taken into account. The Board intends to propose a dividend of SEK 3.70 per share for 2011, which corresponds to a dividend ratio of 52%.

Financing 31-12-2011

Good and long-term customer relations

Good and long-term customer relations and hence satisfi ed customers is a prerequisite for creating long-term growth in Castellum. This is achieved by providing effi cient and well situated premises meeting the customers' needs regarding both appropriate premises as well as service.

Castellum has just approx 4,600 commercial contracts, with good risk exposure regarding geography, type of premises, length of contracts and fields of business of the customer.

Lease maturity structure

The Castellum share Total yield (including dividend)

2011 3 years 10 years
average/ average/
year year
Castellum – 3% 18% 17%
NASDAQ OMX Stockholm
(SIX Return)
– 14% 19% 6%
Real Estate Index Sweden (EPRA)– 13% 17% 15%
Real Estate Index Europe (EPRA) – 9% 13% 5%

Here you can follow the Castellum share:

Castellum will work for a competitive total return in the company's share in relation to the risk and for a high liquidity. The company's actions will be made from a long term perspective. The Castellum share is listed on NASDAQ OMX Stockholm AB Large Cap.

Income from property management before tax for 2011 amounted to SEK 7.01 per share. This results in a share price yield at the year-end of 8.2%.

The long term net asset value (EPRA NAV) can be calculated to SEKm 15,920 corresponding to SEK 97 per share. The share price at the end of the year was thus 88% of the long term net asset value.

The proposed dividend of SEK 3.70 corresponds to a yield of 4.3% based on the share price at the year-end.

Year Summary 2011

  • Rental income for 2011 amounted to SEKm 2,919 (SEKm 2,759 previous year).
  • Income from property management amounted to 1,173 (1,141), corresponding to SEK 7.15 (6.96) per share, an increase of 3%.
  • Changes in value on properties amounted to SEKm 194 (1,222) and on interest rate derivatives to SEKm – 429 (291).
  • Net income after tax amounted to SEKm 711 (1,964), corresponding to SEK 4.34 (11.98) per share.
  • Net investments amounted to SEKm 1,908 (1,279) of which SEKm 1,158 (881) were new constructions, extensions and reconstructions.
  • The Board proposes a dividend of SEK 3.70 (3.60) per share, corresponding to an increase of 3%.
2011 2010 2009 2008 2007 2006 2005 2004 2003 2002
Income from property management, SEK/share 7.15 6.96 6.89 5.93 5.63 5.38 5.00 4.52 4.07 3.77
Change previous year +3% +1% +16% +5% +5% +8% +11% +11% +8% +14%
Net income after tax, SEK/share 4.34 11.98 0.98 – 4.04 9.07 10.21 7.89 5.59 2.68 4.00
Change previous year –64% +1,122% pos. neg. –11% +29% +41% +108% –33% –30%
Dividend, SEK/share (for 2011 proposed) 3.70 3.60 3.50 3.15 3.00 2.85 2.62 2.38 2.13 1.88
Change previous year +3% +3% +11% +5% +5% +9% +11% +12% +13% +15%
Properties fair value, SEKm 33,867 31,768 29,267 29,165 27,717 24,238 21,270 19,449 18,015 17,348
Net investments, SEKm 1,908 1,279 1,129 2,710 2,559 1,823 889 774 711 547
Loan to value 51% 50% 52% 50% 45% 45% 45% 45% 48% 48%
Interest coverage ratio 278% 299% 309% 255% 287% 343% 315% 277% 256% 240%

Income from property management per share Dividend

CEO's comments

Before 2011 settles into history we can conclude that it was a relatively good year for Castellum - even if our highly set goal of 10% growth in income property management remained out of reach. With a property management income of SEKm 1,173 and a proposed dividend of SEK 3.70 - both featuring an increase of 3% - Castellum has succeeded in improving both property management results and dividends for all 14 years since its IPO in 1997.

Property values have remained stable in 2011. Generally speaking, the required yield was unchanged and we achieved a slightly rising operating profi t. In all, the value change was approx. SEKm 200, and this corresponds to a change of less than 1%. However, what has changed considerably is the valuation of interest rate derivatives, along with falling market interest rates. In spite of this, the cost of borrowing money has paradoxically increased, with increased margins in the credit market. The accounting rules of IFRS do not take the latter into account, which is why the results - a value decline of nearly SEKm 500 for Castellum - do not entirely refl ect reality. After factoring in two items not affecting cash fl ow - i.e., value change and deferred tax - this year's total net income totalled SEKm 711.

During 2011, investments increased to SEK 2 billion and the balance sheet remains strong, with a leverage of 51% and SEK 2.3 billion in unutilized long-term long-term credits. I'm especially pleased with the fact that during this year we have increased our investment rate regarding high-yield new constructions, extensions and reconstructions, and we've invested on the Danish side of the Öresund region - a market we have followed for a long time.

Customer satisfaction is crucial to Castellum's achievement of fi nancial goals. Continued high scores in our Customer Satisfaction Index survey show that our customers perceive Castellum as a good supplier of commercial premises for Swedish commercial and business life. One prerequisite for living up to customer expectations is an effi cient organization with service-minded and competent employees. Castellum has this covered. In turn, it means that Castellum should live up to the expectations of a modern employer - and this is confi rmed via consistently high scores in the Employee Satisfaction Index survey.

Although total yield on the Castellum shares showed a negative fi gure: -3%, it measured up well against -14% at the Stockholm Stock Exchange, and the Swedish Property Index of -13%, as well as the European Property Index -9%.

Economic growth is crucial to the development of the real estate business. Europe's debt crisis worsened in 2011 and this has strongly contributed to previously expected growth being revised down to recession levels. Although Sweden's public fi nances are strong, our dependence on exports has resulted in forecast Swedish growth being revised downwards as well.

Under these conditions - a solid Castellum and slow economic growth in Sweden - what can we expect in 2012?

Slower economic growth is followed by reduced demand for properties and lower infl ation rates. These, in turn, can retard the rate of rental-income increases. However, I see no threat of reduced revenue for the near future, since last year's infl ation resulted in upward index adjustments for 2012, while net leasing in 2011 does not indicate increased vacancies. With an expected constant cost structure, a stable net operating income can therefore be anticipated in the existing portfolio. On the other hand, both investments carried out during 2011 and the ambition to invest SEK 2 billion a year will have positive effects on net operating income as well as on property management income.

There has been an unfortunate combination, for the business world generally and the real estate business in particular. Political overconfi dence in credit-market regulation, an increased required yield for lending to banks by investors and bank compensation claims, have all led to increased interest-rate margins as well as to a decline in credit availability. It remains to be seen whether or not falling market interest rates - due to economic decline - can compensate for increased credit margins.

The decline in credit availability has already affected the real estate market, where liquidity dropped during the last quarter of 2011. Property revenue remains high compared to most other assets and generally speaking, today's market value falls short of new-production cost - by a wide margin. This is why I don't feel great concern about property values over time.

Castellum's long-term actions and low-risk profi le mean that the company is well positioned for 2012!

Gothenburg, January 24th 2012 Håkan Hellström CEO

Operations

Growth in income from property management

Net investments

Loan to value ratio

Interest coverage ratio

Dividend ratio

Business Concept

Castellum's business concept is to develop and add value to its real estate portfolio, focusing on the best possible earnings and asset growth, by offering customised commercial properties, through a strong and clear presence in fi ve Swedish growth regions.

Objective

Castellum's operations are focused on cash fl ow growth, which along with a stable capital structure provides the preconditions for robust growth in the company, and offers shareholders a competitive dividend.

The objective is an annual growth in cash fl ow, i.e., income from property management per share, of at least 10%. In order to achieve this objective, net investments of at least 5% of the property value will be made yearly. At the moment, this is equivalent to approx. SEKm 1,700. The previous ambition to invest at least SEKm 1,000 per year has thus been adjusted since the real estate portfolio and investment capacity were lower when it was adopted. All investments will contribute to the objective of growth in income from property management within 1-2 years and have a potential asset growth of at least 10%. Sales of properties will take place when justifi ed from a business standpoint and when an alternative investment with a higher return can be found.

Strategy for Funding

Capital structure

Castellum will have a stable capital structure, meaning a loan to value ratio not permanently exceeding 55% and an interest coverage ratio of at least 200%.

Purchase or transfer of own shares shall be available as a method for adjusting the company's capital structure to the company's capital need and as payment or funding of real estate investments. Company-owned shares may not be traded for the sole purpose of capital gain.

Dividend

At least 50% of pre-tax property management income will be distributed. However, investment plans, consolidation needs, liquidity and fi nancial position in general will be taken into account. Since the base changed on income from property management before tax, 50% of the new base is a higher level than 60% of income from property management after nominal tax as well as closer to the actual dividend in recent years.

The stock and credit markets

Castellum will work for a competitive total return on the company's share relative to risk and also strive for high liquidity. However, all actions will be made from a long-term perspective and the company will hold frequent, open and fair reports to shareholders, the capital and credit markets and the media, without disclosing any individual business relationship.

In the long term, Castellum will be one of the largest listed real estate companies in Sweden.

Strategy for the Real Estate Portfolio and Property Management

Geography

Castellum's real estate portfolio is located in the fi ve growth regions Greater Gothenburg, Öresund Region, Greater Stockholm, Mälardalen and Eastern Götaland. This together with rational property management and a strong presence in the market, provide for good business opportunities.

The development of the real estate and rental markets are, both nationally as well as regionally, dependent on the longterm economic growth. Important prerequisites for economic growth are a young well educated work force, access to good infrastructure and entrepreneurship. To make sure that investments are concentrated to areas within the nation with expected high economic growth, Castellum is continuously analyzing the development on different sub-markets.

Type of property

The real estate portfolio shall consist of commercial properties with general and fl exible premises for offi ce, retail, warehouse, logistics and industrypurposes. The distribution among the different categories is determined by business opportunities, cash fl ow, risk exposure and asset growth.

Development of the real estate portfolio

The real estate portfolio shall be continuously enhanced and developed in order to improve cash fl ow.

Castellum shall continue to grow with customers' demand, mainly through new constructions, extensions and reconstructions which is expected to give high returns, but also through acquisition of buildings and land with building rights for future development.

Customers

Castellum shall be perceived as a service management company. This is achieved by having long-term relations and supplying premises and service meeting customer demands. In order to develop the customer relations the customers' level of satisfaction shall be measured regularly. The risk within the circle of customers shall be kept low by spreading over many fi elds of business, length of contracts and size of contracts.

Property management/employees

Castellum shall deliver service and manage properties by a decentralized and small-scale organization with wholly owned subsidiaries. The presence of sub-markets should be strong and each subsidiary one of three largest real estate owners in each local market. Property management shall be carried out mainly by own personnel.

Castellum shall have skilled and committed employees, which is achieved as the group shall be an attractive workplace with good development possibilities. In order to develop the group in being an attractive workplace the employees' level of satisfaction shall be measured regularly.

Castellum's 4 corner stones

Customer focus through local organizations

  • Decentralized and small-scale organization
  • Property management carried out with own personnel
  • Regulary measurement of customers and employees satisfaction
  • Environmental work with focus on reduced energy consumption

Strong balance sheet and low fi nancial risk

  • Loan to value ratio not permanently exceeding 55%
  • Interest coverage ratio at least 200%
  • Geographic exposure allocated on different types of premises
  • Commercial contracts in many fi elds of industry

Customers

Lease value by region

Distribution of leases by industry

Thanks to the local presence, Castellum's employees get a close relation to their customers and knowledge both about their needs and the local situation and development. Good and long-term customer relations are a prerequisite for creating growth in Castellum. The work is regularly followed-up in customer questionnaires. The Customer Satisfaction survey carried out during 2011 shows that a high proportion of the customers are satisfied or very satisfied with Castellum as a landlord.

During the year a high leasing acivity has been carried out resulting in new contracts with a total annual value of SEKm 310.

Being close to the customer

Castellum's organization, comprised of locally based subsidiaries, provides a close relationship to the customer and a short decisionmaking process. Castellum employees work close to the market, and this means natural access to fresh information about customers' current and future operations. Customers can thereby be offered premises suited to their needs and benefi t from optimal personal service and quick answers.

Castellum, as one of the largest real estate owners on local markets, also contributes to the development of major sites where local subsidiaries operate through co-operation with municipalities and local networks, such as company associations.

The subsidiaries regularly distribute information through customer newspapers and the web.

Castellum's customers reflect Swedish economy

Castellum has a good risk exposure in the commercial contracts regarding both geography, type of premises, size, length of contracts and fi elds of industry of the customer. This means that Castellum's commercial contracts is a refl ection of the Swedish trade and industry and Swedish economy.

Castellum has approx. 4,600 commercial contracts and the single largest contract makes up for approx. 1% of Castellum's total rental income.

Commercial leases

Commercial leases are signed for a specifi ed period of time, generally 3-5 years, where the period of notice is 9 months. The rental level can be changed when the lease in question is due for renegotiation. The leases normally include a base-rent and an index clause, which provides for a yearly adjustment of the rent corresponding to a certain percentage or connected to the infl ation.

Leases may also contain additions for the tenant's share of the property's total heating, cooling and property-tax costs.

Satisfied customers

It is vital that Castellum meets customer expectations. To evaluate and follow up efforts made, an external customer survey is carried out annually: the Satisfi ed Customer Index. The survey shows general customer opinion about Castellum as well as how well Castellum performs in the areas of: service, business relationships, indoor premises, property condition, environmental questions and information.

The survey carried out in 2011 - which included offi ces, warehouses, industry and retail - continues to show consistently high marks for Castellum, with a weighted index of 75 out of 100. This is higher than the industry benchmark.

Service willingness shows the highest index and includes parameters such as personal attention, service and availability.

A significant portion of the surveyed customers, 88%, reply that they are willing to lease from Castellum again and gladly recommend Castellum as a landlord to others.

Leasing activity

Castellum enjoys high leasing activity. During 2011 the organization signed 698 new leases with a total annual value of SEKm 310. Robust leasing activities indicate the importance of taking care of customers and networks. Of the newly signed leases, 73% came from Castellum's own networks, recommendations or existing customer expansions, while 12% originated from web pages, and the remainder 15% came through agents.

Lease size structure

Satisfi ed Customer Index 2002-2011

Leasing activity

Organization

Castellum's strategy is to manage its properties in a decentralized and small-scale organization with wholly owned subsidiaries and strong presence on the sub-markets. By having local presence the subsidiaries get close relations with the customers and knowledge of their operations and needs. The companies also get good knowledge of the local real estate and rental markets, market changes and business opportunities.

Subsidiaries with strong brands

Castellum has six wholly owned subsidiaries which each engage about 35 employees. The subsidiary organizations are not identical but are in principle made up of a Managing Director, 2-4 market areas, business developers and 3-5 employees within fi nance and administration. Each market area employs one property manager with one assistant, one person working with leasing and 3-8 facility managers. Everyone has customer contacts. The fl at organization provides a short decision-making process and creates a customer oriented and active organization.

Castellum's subsidiaries operate under their own names which are strong brands on each submarket.

Property management is mainly carried out by own personnel and in cases where external services are purchased, high demands are placed on suppliers in terms of quality, customer contact, service and environmental awareness.

Engagement in the local markets

Castellum's subsidiaries are involved in the local business community through business associations where important contacts are taken with both current and prospective customers.

Castellum, as one of the largest real estate owners on local markets, also contributes to the development of major sites

where local subsidiaries operate through co-operation with community-development bodies, such as municipalities and universities/colleges.

Measuring and comparing

Castellum measures and compares subsidiary management effi ciency and asset value growth in the real estate portfolio. Within the Group, experiences are shared among companies and specialist expertise can therefore be made available to the whole organization.

Castellum's operations are controlled by rules for decision making and work allocation, policies and instructions. Policies are in place for fi nance and fi nancial work, information, information safety, environment, insurance and personnel, etc.

Parent company

The parent company, Castellum AB, is responsible for matters concerning the stock market (such as consolidated reports and stock-market information) and the credit market (such as funding and fi nancial risk management) as well as overall IT/IS strategies and personnel matters. Castellum AB has 14 employees.

The parent company takes active part in operations through involvement in subsidiary Boards.

Employees

It is a primary objective for Castellum to offer an attractive workplace, offering full possibilities for professional and personal development. Castellum works actively with competence development, experience exchanges and the continuous development of work assignments and processes. During 2011, competence development has continued with a leadership program.

For an optimum performance culture within the Castellum group, employee attitudes are monitored regularly. The 2011 survey achieves an 87 (out of 100) approval index, which indicates that employees enjoy their working situation and have high confi dence in the Group, the subsidiaries and management.

Attractive workplace

Castellum retains skilled and dedicated employees by enhancing targeted professional skills and creating a motivated work situation. The Group's commitment to being an attractive employer – employer of choice – promotes loyalty and job satisfaction.

A fl at organization means that each employee has well defi ned areas of responsibility with a high level of empowerment, leading to professional as well as personal development. Employee performance reviews occur yearly with all employees. These are an important tool for following up and setting objectives, as well as identifying competence development needs.

Castellum works with preventive health care, and offers good corporate wellness services as well as substantial health insurance. A bonus-sharing program provides employees with the opportunity to benefi t from their respective company's fi nancial performance improvement.

Once a year, all employees in the Castellum group meet to share experiences and strengthen the Group spirit.

Education and sharing experiences

Both internal and external training programs are provided at Castellum. A leadership program for senior management, which will cover a total of approx. 40 people, is running. In addition to Group-wide development, Castellum also target individual competence development on an as-required basis.

To create conditions for sharing of experiences between the companies, projects are run with participants from every company, covering topics such as web-based operation monitoring and lease contracts. Apart from the projects, there are fi xed focus-groups, which regularly discuss issues within specifi c areas, such as market-related issues, fi nance, IT, the environment and personnel.

Castellum's employees

As of year end, the Group had 239 employees (229), of which 38% were women (39%). Employee turnover during the year has been 13% (9%) and absence due to illness 2% (2%).

Satisfi ed employees

Employee viewpoints on Castellum are monitored regularly in a Satisfi ed Employees Index showing their attitudes towards their own working situation, the company and management. The latest survey - carried out in 2011 - continues to show a very high index, 87 on a scale of 100. This can be compared with a benchmark of 77. The response rate was 98%, demonstrating deep commitment.

Level of education

Age distribution - number of employees

Satisfi ed Employees Index

Responsible Business

That Castellum's operations are conducted in a responsible way is a prerequisite for the company's long-term successful business. The work is characterized by professionalism, commitment, expertise and innovation, which means both a responsible manners towards customers, employees and other stakeholders and to develop our business activities with least possible impact on the environment. The driving forces for this work, besides contributing to a sustainable society, is an added value through good management and hence customer satisfaction, lower costs, stronger brand and increased competitiveness.

During 2011, both a new Code of Business Conduct has been adopted in Castellum as well as a common group targets providing that all new constructions shall be environmentally classified.

Extraction from Code of Business Conduct Castellum

Castellum's objective is to make sound and proper business decisions in all respects where the process is characterized by professionalism, commitment, expertise and innovation. Castellum's Code of business conduct was adopted to accentuate the guidelines that regulate the Group in relation to its co-workers, customers, suppliers and other stakeholders.

Castellum's business modell with customer focus through local organizations, commercial properties in growth regions, strong balance sheet, low fi nancial risk and cash fl ow focus creates conditions to act according to the Code of business conduct. The result is i.e. growth in income from property management, hight scores in Satisfi ed Employee Survey and Satisfi ed Costomer Survey.

Responsibility for External Relations

The laws and regulations of countries where the corporation operates must be followed.

Relationships with customers, suppliers and other stakeholders are to be characterized by high business morality, good business ethics, responsibility awareness and impartiality. Competitive advantages are utilized, while competitors are dealt with in the correct manner. Price fi xing, cartelization or abuse of market position are strictly forbidden. To demand or give any form of promises in connection with gifts is not acceptable. Employees are never to use any form of bribery, corruption or illegal payments in relation to customers, suppliers, authorities or other decision-makers.

Castellum premises are to be kept in such condition that they clearly live up to promises and the reasonable expectations of customers regarding service and standard.

Employees are to handle their personal and fi nancial interests in such a way that they neither go against, nor can be perceived to be going against, Castellum's business activities. Employees are not allowed to accept - or give - any payments, gifts or other forms of compensation from/to a third party that may lead to a confl ict of interest.

A neutral position is taken concerning party-political issues.

Confi dential and sensitive information - business related as well as share-price affecting - must be handled with high demands on secrecy. Information is to be open and accessible in accordance with the regulations that apply for listed companies.

Marketing and customer contacts must be honest and not promise anything which does not correspond to reality.

Responsibility of the Organization

Human rights, encouraging ethnic diversity and equality is a given. Employees, customers, or suppliers/entrepreneurs are never to be discriminated against due to their nationality, ethnicity, skin colour, gender, heritage, religion, age or sexual orientation.

The work environment has to meet legislation and agreement requirements, as well as being safe and sound - from a physical, psychological and social viewpoint. To establish a healthy work environment Castellum is to engage competent leaders, provide opportunities for further education and offer salaries and related benefi ts that are market-oriented.

Society and Social Responsibility

In each local market Castellum cooperates with local parties such as municipalities, universities/colleges and companies in order to contribute to the district's long-term development.

Castellum works to contribute to a sustainable, ecological development. Environmental efforts are characterized by durability and a comprehensive view where environmental considerations form a part of all decision-making processes.

For the complete Code of Business Conduct see www.castellum.se

Examples from Castellum's environmental work since 1995

1998:

Robur classes Castellum's environmental work as "a model for the branch" 1997: First subsidiary which receives an "environment diploma" by Gothenburg city

2003: Web based surveillance of operations is commenced

2009:

  • Harry Sjögren becomes the third Green
  • Building Corporate Partner in Europe
  • Eklandia fi nishes Sweden's fi rst BREEM certifi ed property
  • 1995: Policies, guidelines and overall targets are established 2001: - Education and train ing in environmental issues, for all employees - Common group values are approved - Purchasing of "green electricity" for the group 2000: - A group-wide environ mental task force is formed - The fi rst ground heating / cooling system is installed in Örebro 2010: Brostaden is elected "Green Building Corporate Partner of the year" in Europe 2005: "Environmental Driving License" training is carried out for all employees 2008: Brostaden becomes the fi rst Green Building Corporate Partner in Europe 1995 2000 2005 2010 2011: - A new target was adopted; All new constructions should be environmentally classifi ed - Code of business conduct updated

Social responsibility

Social responsibility covers employees as well as the workplace and community setting for company operations. Since the company was founded, Castellum has been working on creating a corporate culture with a good working environment, where employee skills and commitment are utilized and developed. Our efforts are regularly followed up in employee and customer surveys, and both show high results.

Castellum, as one of the largest owners of real estate properties on local markets, contributes to the development of the communities where local subsidiaries operate via co-operation with municipalities, universities, colleges and local enterprises.

For larger purchases and procurements, Castellum sets fi rm environmental and quality demands on suppliers.

Castellum's code of business conduct rate governing day-to-day activities, and these are largely in line with the UN's Global Compact Code of Conduct. Castellum is a company which operates in Sweden and Denmark, and is therefore governed by Nordic laws and regulations. Castellum has also drawn up policies covering personnel issues such as: work environment, equal access to opportunities, salaries, pensions and company cars.

Environmental responsibility

To contribute to long term, sustainable development, Castellum's strategy is to develop its real estate portfolio in a resource-effective way and with least possible impact on the environment. Castellum's environmental efforts are focused on achieving more effi cient use of energy, removing fossil fuels and improving the environmental status of the properties, thus reducing the company's environmental impact.

Organization

The environmental work is managed through an environmental management system consisting of a common environmental policy, guidelines and comprehensive measurable targets. The environmental work is performed locally by each subsidiary and annual follow-ups are regularly reported to executive management. There is an environmental task force common the entire Castellum Group, which meets regularly in order to share experiences and to monitor and learn from developments taking place in the world at large. Our environmental efforts cover all activities and operations and the work is regularly examined by external specialists.

Common targets in the Group Outcome since Yearly outcome
More efficient energy use 2007 2011 2010 2009 2008
- Energy consumption is to be reduced by at least 10% over 10 years (at least 1% per sq.m. and year) – 6% + 1% – 3% – 2% – 2%
- Carbon dioxide emissions are to be reduced by at least 25% over 10 year period (at least 2,5% per sq.m. and year) –18% + 9% – 1% – 12% – 14%
Plans call for us to;
  • optimize operation of existing equipment and gradually ensure that technical installations on our properties more effi cient,

  • give priority to environmentally adapted and environmentally friendly energy sources. Replace remaining oil-fi red boilers in investment properties with other heating sources, 6 properties using oil-heating remains

  • phase out all use of gas produced from non-renewable sources, 26 investment properties using gas remains.

  • infl uence our district-heating power suppliers to minimize their carbon dioxide emissions,

  • minimize travel and transportation in the business.

Known and continous improvement of the environmental status of the properties 2011 2010 2009 2008
- All properties owned for more than one year, shall be environmentally evaluated 100% 100% 99% 91%
Through committed actions;
  • all new construction, conversion, extension and maintenance to be carried out from a sustainable development

point of view, valid for planning, project-creation, production, management and recycling or demolishing,

  • ecologically harmful or hazardous substances, to be identifi ed and gradually removed,

  • encourage and work with the tenants to reduce their impact on the environment and follow up on those tenants who require

environmental authorization to carry out their activities,

  • all tenants shall be offered on-site waste separation, adapted to their activities, in order to

reduce the amount of waste for landfi ll, approx. 80% have access to waste separation

  • optimize water consumption and minimize discharge of environmental disturbing agents in sewage.

Energy and water consumption

2011 2010
Heating Other CO2 1000 Heating Other CO2
1000
GWh GWh tonnes GWh GWh tonnes
District heating 188 8 15 232 8 18
Electricity 7 91 1 12 91 1
Gas 13 0 2 12 0 2
Oil 2 2 1 2 2 1
Consumption 210 101 19 258 101 22
Adjustments* 38 1 3 – 27 1 – 2
Norm. consumption 248 102 22 231 102 20
Area, thousand sq.m. 2,853 2,671 2,720 2,681
Norm. consumption,
kWh/sq.m. 87 38 7.8 85 38 7.2
Water, thous. m3 862 831

* Normalized consumption according to degree days and vacancy. "Other" refers to electricity for management etc

Consumption and emission of carbon dioxide per sq.m. and year

Distribution of emissions of carbon dioxide

Distribution of energy consumption for heating

More effi cient energy use

Castellum is striving towards more effi cient energy utilization via, for example: adaptation of heating and ventilation according to the users need; extension of computerized control systems for heating and ventilation and motion-controlled lighting. Castellum follows up and analyzes all energy consumption in a common follow-up system. In addition, web-based surveillance is installed in approx. 20% of the portfolio.

In 2011, the normalized energy consumption in heating systems increased slightly per sq. m., while the electricity for management was in line with 2010. This resulted in a total energy-consumption increase of 1% per sq.m. The normalized carbon dioxide emission increased by 9%/sq.m. due to changes in the district plant's fuel mix. Since the target was adopted 2007, energy consumption has decreased 6% per sq.m. and carbon dioxide emissions decreased by 18% per sq.m. Out of Castellum's total carbon dioxide emissions, it is possible to infl uence 4% directly; emissions from oil and transports; remaining emissions can only be infl uenced indirectly.

Energy declarations, which were carried out 2009 according to established legislation, show that Castellum's consumption was approx. 30% lower than the consumption for similar properties in Sweden.

With the aim of reducing emissions, there is ongoing work to remove fossil fuels, i.e. convert oil and gas heating. Among the investment properties, six oil-heating properties remain. Ground heating/cooling is installed in 22 properties, totalling 114,000 sq. m.

As a user of district heating, Castellum is dependent on the districtheating plant's fuel mix, when it comes to emissions of carbon dioxide. Today, Castellum makes use of 23 district-heating facilities, amounting to 79% of the Castellum group's total carbon dioxide emissions. Castellum conducts ongoing dialogues with the district-heating suppliers who show the highest emissions per kWh. This is both to demonstrate how Castellum's environmental impact depends on their work, but also to learn about how they plan to reduce emissions.

Since 2001, only electricity labeled "environmentally friendly" has been used by the Castellum group.

The Group has virtualized 70 servers since 2008, minimizing the use of IT hardware.

Known and continuously improved status of the properties

An environmental inventory has been completed for all properties owned for at least one year. The inventory covers environmental and health risks such as hazardous substances, ground pollution, moist/ mould and operations requiring special permits. Environmental risk in Castellum's real estate portfolio is considered small.

Two of Castellum's subsidiaries, Fastighets AB Brostaden and Harry Sjögren AB have, as the fi rst and third companies in Europe respectively, been appointed Green Building Corporate Partner, meaning that energy consumption has been reduced by at least 25% in at least 30% of the real estate portfolio. During 2010, Fastighets AB Brostaden was awarded Green Building Corporate Partner of the Year. Castellum owns 89 of the just over 200 Green Building classifi ed buildings in Sweden and one BREEAM certifi ed property.

Stakeholders, communication and co-operation

As a driving force for change, communication about the Castellum group's environmental work is continuously carried out with stakeholders including customers, shareholders, competitors, municipalities and universities. The customers are kept informed via visits and web pages. Castellum cooperate with a number of parties to stay updated about new technologies and to share experience. For instance, Castellum is active in "Beställargruppen för lokaler" within the Swedish Energy Agency, and in the associations: Ecocycle Council and Sweden Green Building Council.

Real Estate Portfolio

Real estate properties in general

The rental market, i.e. the market for rental of premises (and rental levels), and the real estate market, i.e. the market for sales and purchasing of real estate properties, are both in a long term perspective depending on the development in the domestic economy.

Swedish economy

Sweden, with over nine million inhabitants, is a country with an open and strong economy. This is primarily due to a stable and transparent business climate, high education levels, healthy public finances and high productivity. Sweden has long and extensive experience in international trade and international relations. This is evident from its relatively large share of world-leading corporations such as Ericsson, H&M, IKEA, SCA and Volvo. The high export dependency of Swedish industry contributes to the fact that, historically, Sweden has shown the strong adaptability required to re-structure the economy during economic changes.

As for other countries, Sweden has been affected by the uncertainty caused by Eurozone problems with public finances. Weak growth in the Eurozone dampened the Swedish economy, which after a strong advancement at the beginning of the year slowed somewhat. Despite the recession at the end of the year, the GDP for 2011 is expected to increase by over 4%, which is significantly higher than forecasts for both the Eurozone and the USA favourable product mix and increased market share make the Swedish export industry well positioned for a quick recovery when effects of the financial turmoil subside. Unemployment has declined in 2011, but the economic downturn has a gradual effect on the Swedish labour market and unemployment is therefore expected to increase slightly in 2012.

Compared to many other countries, Sweden has favourable prospects for rapid recovery due to its stable public finances, its own currency, lower public debt, a better budget-balance-to-GDP ratio, and healthier banks.

The real estate portfolio

In Sweden there are almost three million properties with a total tax assessment value of approx. SEK 6,400 billion, of which the majority are residential properties. Out of the commercial properties in Sweden, Castellum, one of the major real estate owners in the country, is estimated to own roughly 1-2% while all of the listed Swedish real estate companies together are estimated to own roughly 12%. Apart from the listed companies, the largest real estate owners in Sweden are publicly owned companies, as well as Swedish and foreign institutional investors. In addition, there are a large number of smaller real estate owners, such as smaller real estate and construction companies, users and private owners.

Due to the scattered ownership without any dominating real estate owner, the competitors differ between different local markets.

Public debt/budget balance in % of GDP, forecast 2012

Macro Sweden

Sweden's foreign trade Jan-Nov 2011

Export Total SEKbn 1,118 Import Total SEKbn 1,043
Nordic 242 Nordic 229
Eurozone1) 140 Germany 191
Germany 111 Eurozone1) 154
Benelux 106 BRICS 110
BRICS 99 Benelux 108
Remaining Europe (non-Euro) 93 Remaining Europe (non-Euro) 83
Asia) 93 Great Britain 62
North America 80 Asia) 54
Great Britain 78 North America 34
Remaining world 76 Remaining world 18

1) exkl. Germany, Finland, Belgien, Netherlands and Luxembourg 2) exkl. India and China Source: SCB (Sweden Statistics), import relates to sending countries

Property portfolio listed real estate companies

Development strenght in Sweden's labor markets

Green color indicates the best labor markets and red color the worse. Source: West Sweden Chamber of Commerce and Industry

New construction and vacany rates

Source: JLL and NAI Svefa

Sweden's labor markets

Sweden can be divided into a number of local labor markets where each market has different development strength. The development strength depends on population growth, demographics, employment rates, new businesses, business employees, amount of wages, level of education and health.

The picture to the left shows the development strength of the Swedish local labor markets. The three major urban regions in Sweden have the greatest development potential which is explained by a larger population, which in turn creates a larger labor market, a diversified industrial structure, research opportunities of research and greater variety of shopping, entertainment and culture.

Rental market

The rental market is mainly dependent on growth in the Swedish economy, but is also affected by the volume of new constructions. Economic growth normally leads to an increasing demand for premises and, consequently, to a decreasing number of vacancies. This potentially leads to increased market rents which, in turn, facilitate new construction. A stagnation in growth leads to the reverse scenario.

The demand for premises remained high in 2011, although some level of weakening has been noted towards the end of the year and the rental process took slightly longer to complete. The pattern was the same for all Castellum sub-markets and property types. Net leasing has been positive during the year, and will lead to a decline in vacancies in the future.

Rental levels are expected to remain stable. The infl ation rate in 2011 has resulted in an indexation of rents for 2012 of just over 2%.

Since rental agreements normally are signed for 3-5 years, with nine months' notice of termination, changes in market rents will have relatively little impact on total rental income in the short run.

Property market

The real estate market in 2011 showed essentially the same volume as for 2010, but with lower activity at the end of the year. The transaction volume totalled approx. SEK 105 billion (100) for major sales. The volume in the fourth quarter amounted to approx. SEK 30 billion (39).

This year's transaction volume means that, in 2011, Sweden was the fourth largest market in Europe for commercial properties.

Domestic buyers still dominated the market and transactions mainly concerned offi ce buildings, whereas the volume of residential rental properties decreased slightly compared with the previous year. Real estate transactions have been carried out in all growth regions, of which Greater Stockholm accounted for approx. 40% of the transaction volume.

Castellum's real estate portfolio

Geographical markets

Castellum is present on the nation's major growth regions and approx. 60% of Sweden's 9.4 million inhabitants live within Castellum's regional market areas.

Economic growth is best measured as the development in a market area's total sum of wages. Average growth per year in total employment rates as well as growth in the sum of wages was during the period 2002-2011 within Castellum's market areas, 0.9% and 2.7% respectively. This may be compared with 0.5% and 2.5% for the nation.

In order to analyze the regional markets' growth and risk, the average annual growth in the sum of wages for each market may be studied at the same time as the risk (standard deviation in growth) is measured over time. Some markets are due to their size and business structure less dependent on changes in the world around than others and have their own inherent power to grow. The most favorable is high growth and low risk. The following fi gure shows Sweden's regional markets and Copenhagen in Denmark, where Castellum's markets are shown in red.

Real estate portfolio

Castellum's real estate portfolio is concentrated to a few selected submarkets where the local subsidiaries have a strong position. Castellum's geographical submarkets can be characterised as stable, with good prospects for long-term positive. The real estate portfolio is found in 15 locations in fi ve growth regions: Greater Gothenburg, the Öresund region, Greater Stockholm, Mälardalen and Eastern Götaland. The main focus with 75% of the portfolio is in the three major urban regions.

The commercial portfolio consists of 68% offi ce and retail properties as well as 30% warehouse and industrial properties. The properties are located from inner city sites (except in Greater Stockholm from inner suburbs) to well-situated working-areas with good means of communication and services. The remaining 2% consists of project and undeveloped land. Castellum owns approx. 760,000 sq.m. unutilized building rights.

Growth and risk in the long term (2002-2011)

Changes in real estate portfolio

Value, SEKm Number
Real estate portfolio on January 1, 2011 31,768 598
+ Acquisitions 857 23
+ New constructions, extensions and
reconstructions
1,158
– Sales – 77 – 4
+/– Unrealized changes in value 164
+/– Currency translation – 3
Real estate portfolio Dec. 31, 2011 33,867 617

Average valuation yield (SEKm) (excl. project/land and building rights)

2011 2010
Net operating income properties 2,142 1,987
+ Estimated index adjustment 2012, 2.0% 64 45
+ Real occupancy rate, 94% at the lowest 229 225
+/- Property costs to a normal year 25
– Property administration, 30 SEK/sq.m. – 102 – 98
Normalized net operating income 2,333 2,184
Valuation (excl. building rights of SEKm 460) 32,594 30,213
Average valuation yield 7.2% 7.2%

Average valuation yield over time

On December 31, 2011 Castellum's real estate portfolio comprised 617 properties (598) with a total rental value of SEKm 3,366 (3,190) and a total lettable area of 3,411,000 sq.m. (3,311,000). For properties owned at the year-end the net operating income over the year was SEKm 1,979 (1,840).

During the year investments totaling SEKm 2,015(1,506) were made, of which SEKm 1,158 (881) were new constructions, extensions and reconstructions and SEKm 857 (625) were acquisitions. Of the total investments SEKm 728 relates to Greater Gothenburg, SEKm 541 to Öresund Region, SEKm 352 to Mälardalen, SEKm 226 to Greater Stockholm and SEKm 168 to Eastern Götaland. Castellum has ongoing projects with remaining investments of approx. SEKm 1,100.

Property value

The fair value of the properties at the year-end amounted to SEKm 33,867 (31,768), corresponding to SEK 9,835 per sq.m (9,500). The average valuation yield over time for Castellum's real estate portfolio, excluding development projects, undeveloped land and building rights, can be calculated to 7.2% (7.2%). Of the total property value 90% represents properties with right of possession and 10% is site leasehold.

Rental income

Group rental income amounted to SEKm 2,919 (2,759). For offi ce and retail properties, the average contracted rental level, including charged heating, cooling and property tax, amounted to SEK 1,217 per sq.m. (1,201), whereas it for warehouse and industrial properties amounted to SEK 724 per sq.m. (711). Rental levels, which are considered to be in line with the market, have increased by approx. 1.6% in comparable portfolio compared with previous year.

The average economic occupancy rate was 89.3%. The total annual rental value for vacant premises during the year amounted to approx. SEKm 371 (374).

The gross leasing (i.e. the annual value of total leasing) during the year Rental value and economic occupancy rate was SEKm 310 (257), of which SEKm 45 (46) was leasing in connection to new constructions, extensions and reconstructions. Notices of termination amounted to SEKm 249 (221), of which bankruptcies were SEKm 18 (12), hence net leasing for the year were SEKm 61 (36). In the net leasing for the fourth quarter there is a larger notice of termination of SEKm 15, with possibility to move out fi rst after 24 months. The time difference between reported net leasing and the effect in income thereof is estimated to between 9-18 months.

Property costs

Property costs amounted to SEKm 1,003 (960) corresponding to SEK 300 per sq.m. (298). Consumption for heating during the year has been calculated to 87% (116%) of a normal year according to the degree day statistics.

Rental losses, i.e. charged not paid rents with the risk of loss, amounted to SEKm 8 (6) corresponding to 0.3% (0.2%) of rental income.

Changes in value

Castellum estimates that property prices are stable and that the liquidity decrease at year-end is not due to buyers and sellers having varied viewpoints on pricing, but rather the result of a stretched credit market.

The change in value in Castellum's portfolio during the year amounted to SEKm 194 (1,222), corresponding to approx. 0.6%. The change in value mainly relates to acquisitions and project gains. No general change in the the required yield in the internal valuations has been made during the year. On the property level, however, adjustments has been made on both individual required yield and future cash fl ow. The change in value also covers SEKm 30 due to sales of 4 properties where the sale price of SEKm 107 exceeded the valuations by 39%.

It should be noted that, since property valuations include an uncertainty range of normally 5-10%, also the changes in value include a not insignifi cant uncertainty.

Income over time

Income from property management over the past 10 years shows stable development and has grown by an average of 8% per year. Property values have been volatile over the past 10 years and indicate an average growth of 1.5% per year.

Net leasing per quarter

Property costs, SEK/sq.m

Offi ce/
Retail
Warehouse/
Industrial
2011
Total
2010
Total
Operating expenses 201 121 165 169
Maintenance 44 23 35 34
Ground rent 7 7 7 6
Real estate tax 67 17 44 43
Direct property costs 319 168 251 252
Leasing and property
administration (indirect)
49 46
Total 319 168 300 298
Previous year 322 171 298

Income over time

Castellum's real estate portfolio 31-12-2011

31-12-2011 January-December 2011
No. of
properties
Area
thous.
sq.m.
Property
value
SEKm
Property
value
SEK/sq.m.
Rental
value
SEKm
Rental
value
SEK/sq.m.
Economic
occupancy
rate
Rental
income
SEKm
Property
costs
SEKm
Property
costs
SEK/sq.m.
Net
operating
income
SEKm
Offi ce/retail
Greater Gothenburg 78 423 6,012 14,222 540 1,277 94.3% 509 130 307 379
Öresund Region 59 355 5,271 14,841 485 1,366 86.2% 418 113 318 305
Greater Stockholm 52 344 4,352 12,655 462 1,343 78.1% 361 116 337 245
Mälardalen 79 400 4,241 10,591 436 1,088 92.3% 402 129 323 273
Eastern Götaland 52 320 2,968 9,284 319 999 89.8% 286 100 314 186
Total offi ce/retail 320 1,842 22,844 12,402 2,242 1,217 88.2% 1,976 588 319 1,388
Warehouse/industrial
Greater Gothenburg 102 660 4,862 7,369 482 731 96.7% 466 104 158 362
Öresund Region 41 297 1,750 5,902 209 703 82.8% 173 47 159 126
Greater Stockholm 42 218 1,945 8,909 202 926 91.4% 185 53 241 132
Mälardalen 38 160 913 5,714 114 715 93.7% 107 28 174 79
Eastern Götaland 34 184 740 4,013 93 504 83.6% 78 23 125 55
Total warehouse/industrial 257 1,519 10,210 6,723 1,100 724 91.7% 1,009 255 168 754
Total 577 3,361 33,054 9,835 3,342 995 89.3% 2,985 843 251 2,142
Leasing and property administration 163 49 – 163
Total after leasing and property administration 1,006 300 1,979
Development projects 12 50 515 24 10 10 0
Undeveloped land 28 298
Total 617 3,411 33,867 3,366 2,995 1,016 1,979

The table above relates to the properties owned by Castellum at the end of the year and refl ects the income and costs of the properties as if they had been owned during the whole year. The discrepancy between the net operating income of SEKm 1,979 accounted for above and the net operating income of SEKm 1,916 in the income statement is explained by the deduction of the net operating income of SEKm 1 on properties sold during the year, as well as the adjustment of the net operating income of SEKm 64 on properties acquired/completed during the year, which are recalculated as if they had been owned or completed during the whole year.

Property value by property type Property value by region

Property related key ratios

2011 2010 2009 2008 2007 2006 2005 2004 2003 2002
Rental value, SEK/sq.m. 995 974 969 921 896 864 851 859 829 799
Economic occupancy rate 89.3% 89.0% 89.8% 89.7% 87.9% 87.1% 88.1% 89.6% 90.7% 91.5%
Property costs, SEK/sq.m. 300 298 300 268 262 259 247 255 246 237
Net operating income, SEK/sq.m. 589 569 571 559 527 494 502 514 506 494
Fair value, SEK/sq.m. 9,835 9,499 9,036 8,984 9,098 8,466 7,930 7,706 7,296 7,132
Number of properties 617 598 590 587 549 515 494 492 500 508
Lettable area, thousand sq.m. 3,411 3,311 3,199 3,172 3,003 2,787 2,651 2,505 2,437 2,381

Investments

Castellum's strategy for growth includes constant improvement and development of the real estate portfolio by new constructions, reconstructions and extensions as well as acquisitions. The investments are made in order to improve cash flow and increase the value of the properties. New development projects are added on an ongoing basis through the acquisition of both properties with development potential and unutilized building rights.

Castellum has in the last 10 years invested SEK 17 billion, which means SEKm 1,700 on average per year.

During 2011, Castellum invested a total of SEKm 2,015 (1,506), of which SEKm 1,158 (881) were new constructions, extensions and reconstructions and SEKm 857 (625) were acquisitions. Castellum completed major projects for a total value of approx. SEKm 250 and has ongoing projects with a remaining investment volume of approx. SEKm 1,100.

Castellum's project portfolio has a good risk exposure with many projects in several locations and with a large number of customers.

During 2011 Castellum has made the fi rst investment on the Danish side of the Öresund Region and acquired 4 properties in Albertslund, Brøndby and Vibeholm in Copenhagen, Denmark, for SEKm 235.

During the year, 4 (6) properties have been sold for SEKm 107 (227) which exceeded the valuations by 39%.

Larger ongoing development projects

Investments and sales per year

Investments and sales per region 2011

Castellum has ongoing projects with a remaining investment volume of approx. SEKm 1,100. Some of the larger projects are presented below.

Lindholmen 28:3 in Gothenburg

Location: Lindholmen Science Park
Area: 10,400 sq.m.
Time plan: Completed Q 2, 2013

During the fi rst quarter 2011 Castellum acquired land with building right on Lindholmen which is adjacent to the company's existing property. During November 2011 a new construction started of an offi ce building of 10,400 sq.m. on the land. The new building will be constructed according to Green Building Standard.

The investment is calculated to SEKm 280. Currently there are no signed leases in the property.

Atollen in Jönköping

Location: Munksjön in central Jönköping Area: The fi rst stage of 6,019 sq.m. Time plan: Completed Q4, 2013

Castellum has started a new production in the central land area Atollen, Jönköping. The new construction will be carried out together with two partners and Castellum's part consists of two blocks of 10,420 sq.m. in total. Castellum's fi rst stage starts in January 2012 and consists of 6,019 sq.m. of which 2,790 sq.m. offi ce area, 2,212 sq.m. retail and 1,017 sq.m. residential. The new buildings will be constructed in accordance with the environmental system "Miljöbyggnad".

The investment in the fi rst stage is calculated to SEKm 169 and to be completed during the autumn 2013. Currently there are no signed leases in

Fullriggaren 4 in Malmö

Location: Västra Hamnen in Malmö
Area: 5, 470 sq.m.
Time plan: Completed Q 1, 2013

In Västra Hamnen, near central Malmö, Castellum has acquired land and started a new construction of 5,470 sq.m. offi ce premises.

The building will have a fl exible construction with six fl oor plan, where each fl oor plan can be divided into three premises. On the top fl oor, a common conference room with roof terrace will be built. The new building will be constructed in accordance with the environmental system "Miljöbyggnad" as well as Green Building Standard.

The investment is calculated to SEKm 154. Currently there are no signed leases in the property.

Forskaren 2 in Lund

Location: Ideon-area in Lund
Area: 9,000 sq.m.
Time plan: Completed Q 4, 2012

At the Ideon area, close to Lund University of Technology and Lund University, Castellum has since 2001 completed a buildings comprising 27,500 sq.m. offi ce premises on the property Forskaren 2, also known as Edison Park.

During 2010, Castellum started a new construction project of another 9,000 sq.m. offi ce premises with high standard on Edison Park, which is the fi nal stage before completion of the property. The investment is calculated to SEKm 149.

The new construction has an occupancy rate of 15%.

Gården 15 in Linköping

Location: Tornby shopping center in Linköping
Area: 9,855 sq.m.
Time plan: Completed Q 1, 2013

In Tornby shopping center, near E4, Castellum has started a new construction on an unutilized building right which was acquired 2009. The new building will consist of 9,855 sq.m. offi ce-, retail- and warehouse premises. The new buildings will be constructed in accordance with the environmental system "Miljöbyggnad".

The investment is calculated to SEKm 106. Leases have been signed on 39% of the premises.

Inköparen 1 in Örebro

Location: Aspholmen in Örebro
Area: 4,300 sq.m.
Time plan: Completed Q 1, 2013

In the fall 2006 Castellum acquired the property Inköparen 1 with un unutilized building right in the working area Aspholmen in Örebro. The property has a good location, right on the exit from highway E18/20. During 2009 3,600 sq.m. offi ce and retail premises were completed on the property and during 2010 another 1,700 sq.m.

During 2011 Castellum started the fi nal stage which consists of 4,300 sq.m. offi ce premises in four fl oor plans. The new building will be constructed in accordance with the environmental system "Miljöbyggnad" as well as Green Building Standard.

The investment is calculated to SEKm 68. Leases have been signed on 60% of the premises.

Larger ongoing projects 2011

Area Econ.occup. Investment, SEKm
Name of property sq.m. Jan 2012 Total Remaining Completed Comment
Lindholmen 28:3, Gothenburg 10,400 0% 280 233 Q 2 2013 New construction offi ce premises
Atollen, Jönköping 6,019 0% 169 142 Q 4 2013 New construction offi ce/retail/residential
Fullriggaren 4, Malmö 5,470 0% 154 73 Q 1 2013 New construction offi ce premises
Forskaren 2, Lund 9,000 15% 149 58 Q 4 2012 New construction offi ce premises
Gården 15, Linköping 9,855 39% 106 60 Q 1 2013 New construction offi ce/retail/warehouse
Inköparen 1, Örebro 4,300 60% 68 52 Q 1 2013 New construction offi ce premises
Kärra 28:18, Gothenburg 5,500 0% 45 32 Q 3 2012 New construction warehouse premises
Rosersberg 11:34, Sigtuna 4,080 0% 40 39 Q 4 2012 New construction warehouse/offi ce
Elementet 4, Sollentuna 3,350 0% 33 15 Q 3 2012 New construction warehouse/logistic

Larger completed project

Castellum has larger completed projects to a volume of approx. SEKm 250. Some of the larger completed projects are presented below.

Boländerna 30:2 in Uppsala

Location: Retail area Boländerna in Uppsala
Area: Reconstruction 9,700 sq.m. and extension 4,300 sq.m.
Time plan: Completed Q 4, 2011

Castellum owns several properties in the retail area Boländerna, which today is the strongest outer city retail area in Uppsala. The properties have been developed in stages and in the beginning of 2010 Castellum decided on a reconstruction of 9,700 sq.m. retail and warehouse premises and new construction and extension of approx. 4,300 sq.m. retail and restaurant premises on the property Boländerna 30:2, which were completed during 2011.

The investment amounted to SEKm 70. The reconstruction and extension has an occupancy rate of 90%.

Saltmossen 3 in Botkyrka

Location: Eriksberg in Botkyrka
Area: 5,500 sq.m
Time plan: Completed Q 3, 2011

In the working area Eriksberg, near highway E4 in Botkyrka, Castellum has completed a new construction of 5,500 sq.m. warehouse premises. The new building has a fl exible and adaptable construction. The new building was constructed according to Green Building Standard.

The investment amounted to SEKm 52 and the property is fully let.

Kärra 72:36 in Gothenburg

Location: Tagene-area in Hisingen, Gothenburg Area: 6,400 sq.m. Time plan: Completed Q 3, 2011

In the industrial area Tagene, near highway E6, on Hisingen in Gothenburg Castellum has completed a warehouse and industrial property of 6,400 sq.m. The new building is suited for both logistics companies and light production.

The investment amounted to SEKm 45. The property is fully let.

Larger completed projects 2011

Area, Econ. occup Investment, SEKm
Name of property sq.m. Jan 2012 Total of which 2011 Completed Comment
Boländerna 30:2, Uppsala 14,000 90% 70 31 Q 4 2011 Reconstruction and extension retail premises
Saltmossen 3, Botkyrka 5,500 100% 52 46 Q 3 2011 New construction warehouse/logistics premises
Kärra 72:36, Gothenburg 6,400 100% 45 30 Q 3 2011 New construction warehouse/logistics premises
Kallebäck 3:4, Gothenburg 3,400 100% 29 27 Q 4 2011 Reconstruction offi ce premises
Varla 3:22, Kungsbacka 12,800 100% 25 25 Q 4 2011 Reconstruction offi ce and warehouse premises

Larger acqusitions and sales during 2011

During the year, Castellum has acquired 23 properties for a total amount of SEKm 857. 4 properties were sold and the sales price was SEKm 107.

Lundbyvassen 3:1 in Gothenburg

Location: Lindholmen in Gothenburg
Area: 10,800 sq.m.
Access: April 2011

Castellum has acquired a property for SEKm 183 on Lindholmen, Gothenburg. The property, which is located near the company's existing properties, consists of 10,800 sq.m. of which 8,800 sq.m. is offi ce premises and the rest warehouse premises and premises for product development.

The property is fully let.

Hovedvejen 1-7, Glostrup and Vibeholms Allé 15, Brøndby, Denmark

Location: Vibeholms Business Park in Copenhagen
Area: 10,112 sq.m.
Access: November 2011

In Vibeholms Buisness Park in the Copenhagen area, Castellum has acquired two fully let properties for SEKm 160. The property Hovedvejen 1-7 consists of 6,953 sq.m. of which 3,800 sq.m. is offi ce premises, 2,933 sq.m. garage and the rest retail. Vibeholms Allé 15 is an offi ce property of 3,159 sq.m.

Both buildings are in very good condition and are situated near the properties Castellum has acquired in Copenhagen during the year.

Kusken 3 in Mölndal

Location: Åby Business Park in Mölndal
Area: 7,625 sq.m.
Access: December 2011

In Åby Castellum has acquired a fully let warehouse/offi ce property, situated near the company's existing portfolio. The property consists of 7,625 sq.m. of which 4,850 sq.m. is warehouse premises and the rest offi ce premises.

The investment amounted to SEKm 87.

Boländerna 11:5, 12:1 and 36:2 in Uppsala

Location: Working area Boländerna in Uppsala
Area: 11,300 sq.m.
Access: November 2011

In Boländerna Castellum has acquired three fully let properties near the company's extisting properties. The properties consists of 6,500 sq.m. warehose and industrial premises, 2,400 sq.m. offi ce premises and 2,400 sq.m. retail premises. Further, there are unutilized building rights of approx. 4,500 sq.m.

The investment amounted to SEKm 81.

Sannegården 52:1 in Gothenburg

Locatio
Area:
Access:

Location: Lindholmen in Gothenburg Area: 7,490 sq.m. Access: September 2011

On Lindholmen in Gothenburg Castellum has acquired a property of 6,230 sq.m. for SEKm 73. The property consists of 3,680 sq.m. offi ce- and retail premises and 2,550 sq.m. for warehouse and production.

The property is fully let.

Nejlikebuketten 6, Torshammaren 11, Armringen 2 in Malmö

Location: Fosie, Jägersro in Malmö
Area: 7,280 sq.m.
Access: February 2012

In the area Fosie and Jägersro in Malmö Castellum has acquired three properties near the existing property portfolio. The properties consists of 3,715 sq.m. offi ce premises, 1,616 sq.m. retail premises and the rest is warehouse premises.

The investment amounted to SEKm 57 and the properties are fully let.

Roskildevej 22, Copenhagen, Denmark

Location: Albertslund in Copenhagen
Area: 8,500 kvm
Access: April 2011

In Albertslund, Copenhagen, Castellum has acquired a property for SEKm 51. The area has a well developed infrastructure and the property has a good exposure along Roskildevej. The property consists of 8,500 sq.m. of which 3,800 sq.m. is offi ce premises and the rest warehouse and service premises. At the time for acquisition the property was fully let on a short contract and the knowledge of moving out.

The investment amounted to SEKm 51.

Larger acquisitions 2011

Area Occupancy Acquisition
Property sq.m. rate Jan 2012 SEKm Access Category
Lundbyvassen 3:1, Gothenburg 10,800 100% 183 Apr 2011 Offi ce
Vibeholms Allé 15, Hovedvejen 1-7, Copenhagen 10,112 100% 160 Nov 2011 Offi ce/retail
Kusken 3, Mölndal 7,625 100% 87 Dec 2011 Offi ce/retail and warehouse
Boländerna 11:5, 12:1 och 36:2, Uppsala 11,300 100% 81 Nov 2011 Warehouse/industrial, offi ce/retail,
building right 4,500 sq.m.
Sannegården 52:1, Gothenburg 7,490 100% 73 Sept 2011 Offi ce/retail, warehouse/production
Nejlikebuketten 6, Torshammaren 11,
Armringen 2, Malmö
7,280 100% 57 Feb 2012 Offi ce/retail and warehouse
Roskildevej 22, Copenhagen 8,500 0% 51 April 2011 Offi ce
Revisorn 4, Sollentuna 2,635 100% 29 Dec 2011 Warehouse
Abildager 26, Copenhagen 3,470 100% 24 July 2011 Offi ce
Årsta 78:1, Uppsala 2,840 100% 23 Nov 2011 Offi ce

Larger property sales 2011

Area, Sales price
Property sq.m. SEKm Access Category
Haifa 1, Stockholm 3,750 76 March 2011 Offi ce
Kallebäck 2:5, Gothenburg - 22 April 2011 Land/building rights 36,000 sq.m.

Building Rights and Potential Development Projects

Part of Castellum's strategy is to build new premises when this is a competitive alternative. In order to be able to offer the customer new premises with the shortest possible time for moving in, it is a competitive advantage to own building rights in attractive locations with approved plans. Castellum has 760,000 sq.m. unutilized building rights. For a number of the unutilized building rights there are fi nalized project plans which can be started relatively promptly.

Unutilized building rights are valued at SEKm 735 corresponding to approx. SEK 980 per sq.m. on average. Of the building rights approx. 280,000 sq.m. corresponding to approx. SEKm 320 are reported as development projects and undeveloped land. The remaining are reported among offi ce/retail and warehouse/industrial properties since they are addititions to already developed properties. During 2011 Castellum has utilized 35,000 sq.m. of the existing building rights.

The process from land to completion can be time consuming and may differ between different municipalities in the country. Below is a schematic representation of the process.

Building rights by region and sq.m.

Comprehensive plan
Long-term planning which
outlines the use of land, water
and buildings. Developed in
conjunction with among others
the County Administrative Board.
$\blacktriangleright$ Local plan
- Municipality develop programs - Processing/examination
- Adoption
if required
- Consultation between the
- Legally binding
municipality and parties
concerned
Building permit application
- Advance notice may be requested
- Must provide information on local
plan, other regulatory and legal
requirements
Project process
- System design
- Preliminary study incl. market,
- Building permit
technology etc
documents
- Ev. request for plan information and
- Detailed project
application for amended local plan
- Program work
Design, production
- Procurement
- Planning
- Production
- Hand over

Greater Gothenurg

In Högsbo-Sisjön-Åbro, which is one of Sweden's largest industrial estates, Castellum owns a large number of building rights totalling approx. 104,000 sq.m. One example is Generatorn 1 which is a well exposed building right of approx. 15,000 sq.m.

A number of properties with unutilized building rights for a total of approx. 42,000 sq.m. are found on Hisingen, which is one of Castellum's largest market areas in Greater Gothenburg. The building rights are located in different industrial estates and permit almost only new construction of retail, warehouse and industrial premises.

In the areas Hede and Varla in northern Kungsbacka, approx. 30 km south of Gothenburg, Castellum owns a number of properties with unutilized building rights of approx. 29,000 sq.m.

Greater Gothenburg - Unutilized building rights 31-12-2011

Building rights
Area sq.m. Comment
Högsbo-Sisjön-Åbro 104,000 Most of the unutilized building rights are shown on the map above
Hisingen 42,000 Building rights in industrial estates, permit almost only new construction of warehouse
and industrial premises
Gothenburg 16,000
Kungsbacka 38,000 Building rights in Varla of 23,000 sq.m. focused on offi ce/warehouse/industrial
Remaining of Greater Gothenburg 95,000 Tjärblomman 2 and Tusenskönan 4 in Mölndal with building rights of 15,000 resp 10,000 sq.m.
Total Greater Gothenburg 295,000

Öresund Region

Next to the Ideon area is Brunnshög which is under development and seen as the next step in the expansion of the research area Ideon. In Brunnshög the European Spallation Source (ESS) for material research is planned which is considered to attract 5,000 researchers to Lund. During the end of 2010 the new construction of a synchrotron plant started in the area, MAX IV.

Castellum's property, Höjdpunkten 2, with a very strategic location at the entrance to Brunnshög and close to the E22, has a potential for new construction of approx. 18,000 sq.m. and an option to acquire additional building rights of 30,000 sq.m.

Öresund Region - Unutilized building rights 31-12-2011

Area Building rights
sq.m
Comment
Malmö 42,000 Building rights in industrial estates, permit mainly new construction of warehouse and
industrial premises
Lund 31,000 Building rights in the Ideon area close to Lunds University of Technology
Helsingborg 19,000 Kulan 1 with building rights of 10,000 sq.m.
Total Öresund Region 92,000

Greater Stockholm

By the E4/E20, at Kungens kurva in Huddinge, Smista Allé is located, which is one of the largest sites with building rights in Greater Stockholm. For building rights of approx. 40,000 sq.m. the plan permits offi ces, retail of capital goods and warehouses. The picture shows the area and the completed buildings (F), started projects (P) and unutilized building rights (B).

In Johanneshov, in southern Stockholm, Castellum owns several neighbouring properties with unutilized building rights. One example are the properties in Linde Torp, close to the Globen area, where there are 23,500 sq.m. potential building rights, specializing in retail, offi ce and hotel premises. The area is well served by subway and Southern Link road as well as the highway E4.

Greater Stockholm - Unutilized building rights 31-12-2011

Area Building rights
sq.m
Comment
Sollentuna 111,000 The majority in Norrviken with good connections to E4/E20 north of Stockholm
Huddinge 40,000 Smista Allé located at Kungens Kurva
Johanneshov 38,000 Several adjacent properties with unutilized building rights permitting coordinated
development of the area
Remaining Greater Stockholm 14,000
Total Greater Stockholm 203,000

Mälardalen

In Kopparlunden, which is one of the most interesting development areas in Västerås, Castellum owns properties permitting future new construction and extensions of approx. 10,000 sq.m.

The area Boländerna in Uppsala has an attractive location and in the area several large companies with focus on retail are established, making Boländerna Uppsala's largest retail area. Castellum owns approx. 6,700 sq.m. unutilized building rights in the area, with focus on retail, in addition to utilized building rights completed in 2011.

Mälardalen - Unutilized building rights 31-12-2011

Area Building rights
sq.m
Comment
Örebro 37,000 Building rights in central Örebro with a total of 6,000 sq.m.
Västerås 25,000 Kopparlunden with building rights of 10,000 sq.m.
Uppsala 12,000 Building rights in the area Boländerna
Sigtuna 5,000
Total Mälardalen 79,000

Eastern Götaland

In Linköping Castellum owns unutilized building rights on Idémannen 2 allowing approx 5,000 sq.m. offi ce premises. In Linköping, there is also an option for additional building rights on 25,000 sq m retail premises in the area Djurgården.

Bagaren 10 in Växjö is located in the industrial area Västra Mark. In connection to the existing building there is an additional building right of approx. 10,000 sq.m. for new construction of offi ce, retail and warehouse premises.

In Värnamo Castellum owns unutilized building rights in the area Hornaryd totalling 14,000 sq.m.

Eastern Götaland - Unutilized building rights 31-12-2011

Area Building rights
sq.m
Comment
Växjö 28,000 Bagaren 10, approx. 10,000 sq.m. with possibilities for new construction of offi ce/retail/
warehouse premises
Värnamo 25,000 Among others, building rights of 14,000 sq.m. in Hornaryd
Jönköping 20,000 Among others, building rights of Vingen 4 directed at retail
Linköping 8,000 5,000 sq.m. in Mjärdevi Science Park
Remaining Eastern Götaland 7,000
Total Eastern Götaland 88,000

Castellum's regions

Greater Gothenburg Öresund Region

Proportion of Castellum's portfoilo Proportion of Castellum's portfoilo

No. of properties 193
Area, thousand sq.m 1,085
Fair value, SEKm 11,023
Rental value, SEKm 1,026
Net operating income, SEKm 698
Net investments, SEKm 728
Net leasing 2011, SEKm 7
Operating company:
No. of properties 109
Area, thousand sq.m 678
Fair value, SEKm 7,303
Rental value, SEKm 703
Net operating income, SEKm 388
Net investments, SEKm 541
Net leasing 2011, SEKm 23
Operating company:

Greater Stockholm

Proportion of Castellum's portfoilo Proportion of Castellum's portfoilo Proportion of Castellum's portfoilo

19%
No. of properties 100
Area, thousand sq.m 573
Fair value, SEKm 6,557
Rental value, SEKm 675
Net operating income, SEKm 347
Net investments, SEKm 226
Net leasing 2011, SEKm 3
Operating company:

Mälardalen

Uppsala 40% Västerås 23%
Sigtuna 2% Örebro 35%
No. of properties 120
Area, thousand sq.m 560
Fair value, SEKm 5,168
Rental value, SEKm 550
Net operating income, SEKm 319
Net investments, SEKm 352
Net leasing 2011, SEKm 16
Operating company:

Eastern Götaland

11%

Net operating income, SEKm 227
Net investments, SEKm 168
Net leasing 2011, SEKm 12

Operating company:

Greater Gothenburg

Castellum's real estate portfolio in Greater Gothenburg comprises in addition to Gothenburg, Alingsås, Härryda, Kungsbacka, Lerum, Mölndal and Partille also Borås and Halmstad. These regions combined have approx. 1.3 million inhabitants, which corresponds to approx. 14% of Sweden's total population.

Greater Gothenburg is one of three big-city regions in Sweden and one of the country's most important centers for transport and industry.

Greater Gothenburg is centrally located with a well developed infrastructure, including Gothenburg harbour, the airports and the highways E6 and E20, all contributing to the notion that the region is the best logistical centre in Scandinavia. Greater Gothenburg forms a large local labour market, mainly due to good communication and commuting possibilities. The infrastructure will be further improved in future years by a new overpass over Göta Älv.

As a traditional industrial city, Gothenburg has been depending on its export industry. Today, business is extensive and diversifi ed, spread over all branches, even though manufacturing industry, trade and logistics have historically been important areas. The business structure is now broader and has created growth in knowledge-intensive and hitech companies as well as in traditional businesses.

The Åbro district in Mölndal and Högsbo/Sisjön in the municipality of Gothenburg, together form one of Sweden's largest continuous industrial and enterprise areas.

In Borås, commerce and logistics are strong sectors, which together with textile and clothing industry create an intensive international trade, supported by the proximity to Göteborg Landvetter Airport and Port of Gothenburg.

The economy in the Halmstad region is multifaceted and dominated by small and medium-sized companies within manufacturing, service, commerce and tourism. The region has a well developed infrastructure with road, train, air and sea connections.

Rental market

The rental market in Greater Gothenburg has been stable, showing strong demand as well as slightly rising rental levels for both offi ce and warehouse premises, even if some slowdown was observed towards the end of the year. Vacancy rates are generally low and have basically remained unchanged throughout the year.

In central Gothenburg, the increased demand for fl exible offi ce facilities has led to the undertaking of a number of new construction projects in 2011. During the same year, a positive development in the rental market for all property types was also seen in both Borås and Halmstad.

Real estate market

In 2011, the transaction volume in Greater Gothenburg increased for the second consecutive year. Real estate transactions for approx. SEK 9.0 billion were carried out, compared to approx. SEK 6.4 billion in 2010. Several major transactions took place during the year; the largest of which was the sale of a portfolio of office properties in central Gothenburg for approx. SEK 1.2 billion. The largest transaction outside the municipality of Gothenburg was the sale of a residential property portfolio in Halmstad for SEKm 680.

In all larger transactions conducted in the region, the buyers were Nordic companies and, in most cases, Swedish ones. Much business was conducted in central Gothenburg with a yield of 4.8% -5.5%.

DIRECTORS REPORT

Greater Gothenburg Borås Halmstad
Population 996,000 166,000 116,000
Growth in population 2002-2011 / year (the nation 0.6%) 0.9% 0.4% 0.6%
Students at university/college 50,000 10,000 9,000
Growth in employment 2002-2011 / year (the nation 0.5%) 1.0% 0.2% 0.8%
Growth in gross wages 2002-2011 / year (the nation 2.5%) 3.1% 2.4% 3.0%

Source: Evidens and SCB

The fi ve largest real estate owners

Greater Gothenburg
Premises thous. sq.m.
Borås
Premises thous. sq.m.
Halmstad Premises thous. sq.m.
Castellum (Eklandia and Harry Sjögren) 958 SveaReal 137 Fem Hjärtan 55
Wallenstam 549 Castellum (Harry Sjögren) 93 Försäkringsbolaget Alecta 53
Vasakronan 363 Klövern 83 Rikshem 52
Diligentia / Skandia Liv 342 Nordic Real Estate Partners 83 Fragerius Fastigheter 46
Platzer 329 Hemfosa Fastigheter 67 Dagon 45
Castellum (Harry Sjögren) 34

Number of commercial premises (excl. residential) owned as at 31-12-2011. Municipal and State-owned companies and government institutions have been excluded. Source: Byggstatistik and Castellum

Gothenburg Borås Halmstad
Market rents
SEK/sq.m.
Yields at sales Estimated values
SEK/sq.m
Market rents
SEK/sq.m.
Yields at sales Estimated values
SEK/sq.m
Market rents
SEK/sq.m.
Yields at sales Estimated values
SEK/sq.m
Offi ce
AA-area 1,600 - 2,400 5.00% - 6.00% 18,000 - 34,000
A-area 1,350 - 2,100 5.50% - 6.50% 11,000 - 27,500 800 - 1,400 6.75% - 8.25% 8,000 - 14,000 850 - 1,400 6.50% - 7.75% 6,000 - 13,500
B-area 1,000 - 1,500 6.25% - 7.25% 6,000 - 18,000 575 - 825 8.00% - 10.00% 5,000 - 8,000 700 - 1,200 7.00% - 8.50% 4,500 - 11,000
C-area 600 - 1,200 7.00% - 8.50% 4,000 - 13,000 400 - 650 9.00% - 11.00% 2,700 - 4,000 550 - 900 8.00% - 10.00% 4,000 - 8,000
Retail
AA-area 4,000 - 8,500 4.75% - 5.75% 30,000 - 95,000
A-area 2,500 - 6,000 5.00% - 6.25% 20,000 - 75,000 1,400 - 2,500 6.25% - 8.00% 11,000 - 24,000 1,250 - 3,300 6.00% - 6.75% 11,500 - 27,000
B-area 1,000 - 3,500 5.75% - 6.75% 10,000 - 27,500 700 - 1,500 7.50% - 9.00% 5,000 - 10,000 800 - 2,000 6.25% - 7.75% 5,000 - 17,500
C-area 700 - 1,500 6.25% - 8.00% 2,500 - 12,500 400 - 650 9.00% - 11.00% 3,000 - 5,000 650 - 1,500 7.50% - 9.25% 4,000 - 9,500
Warehouse/industrial
A-area 500 - 900 7.00% - 8.25% 5,500 - 11,000 300 - 600 8.25% - 9.75% 2,750 - 5,000 350 - 600 8.00% - 9.00% 2,000 - 6,000
B-area 450 - 750 7.75% - 8.75% 4,000 - 8,000 275 - 450 9.00% - 11.00% 1,750 - 2,750 300 - 550 8.25% - 9.50% 2,000 - 5,000
C-area 400 - 600 8.25% - 9.25% 3,000 - 6,000 175 - 275 10.00% - 13.00% 1,000 - 2,250 250 - 450 9.00% - 11.50% 1,500 - 3,000

Income from property management

Investments and sales

Net leasing

Greater Gothenburg summary

Castellum´s real estate portfolio

Castellum's real estate portfolio in Greater Gothenburg comprises 193 properties (188) with a total area of 1,085,000 sq. m. (1,046,000) and a fair value of SEKm 11,023 (10,176). For properties owned at the yearend the rental value amounted to SEKm 1,026 (977) on an annual basis and net operating income to SEKm 698 (644). Investments during the year amounted to SEKm 728 (315).

Central and eastern Gothenburg consist mainly of offi ce and retail properties, a district corresponding to 64% of Castellum's real estate portfolio in Greater Gothenburg. The portfolio on Hisingen and in Högsbo/Sisjön consists of offi ce properties as well as warehouse and industrial properties.

In the municipality of Mölndal, corresponding to 15% of Castellum's real estate portfolio in Greater Gothenburg, there are mainly warehouse and industrial properties. In Åbro and Lackarebäck offi ces are also found.

The real estate portfolio in Borås municipality corresponds to 7% of Castellum's real estate portfolio in Greater Gothenburg. Castellum mainly owns offi ce and retail properties in central Borås, but also a smaller share of warehouse and industry properties.

In addition there are also mixed property holdings in Alingsås, Halmstad, Partille, Kungälv, Kungsbacka, Lerum and Härryda.

See also the section Castellum's Real Estate Schedule 2011, with real estate schedule, maps and fi nancial information.

Rental development

Castellum's average rental level is SEK 1,277 per sq.m. for offi ce/retail and SEK 731 per sq.m. for warehouse/industrial premises. Rental levels have increased by 0.9% in comparable portfolio compared with previous year.

The average economic occupancy rate was 95.4%, which is 1.3%-units higher than previous year.

The gross leasing (i.e. the annual value of total leasing) during the year was SEKm 72 (61), of which SEKm 7 (10) related to leasing in new constructions, extensions and reconstructions. Notices of terminations amounted to SEKm 65 (57), of which bankruptcies were SEKm 7 (4), hence net leasing for the year were SEKm 7 (4).

Subsidiaries

Castellum's properties in Greater Gothenburg are owned and managed by the wholly owned subsidiaries Eklandia Fastighets AB, with its head offi ce in Gothenburg, and Harry Sjögren AB with its head offi ce in Mölndal. Eklandia's real estate portfolio is mainly concentrated to central and eastern Gothenburg and Hisingen while Harry Sjögren's properties are located mainly in Högsbo/Sisjön in southern Gothenburg, Mölndal, Borås, Halmstad, Kungsbacka, Lerum, Partille, Alingsås and Härryda. At the year-end Eklandia had 41 employees and Harry Sjögren had 30 employees.

December 31, 2011 January-December 2011
Area
Property
Property Investments, SEKm - Rental
Rental
Econ. Rental Property Property Net
operating
No of thous. value value New constr., Acquisi value value occupancy income costs costs income
prop. sq.m. SEKm SEK/sq.m ext., recon. tions SEKm SEK/sq.m rate SEKm SEKm SEK/sq.m SEKm
Offi ce/retail 78 423 6,012 14,222 139 256 540 1,277 94.3% 509 130 307 379
Warehouse/industrial 102 660 4,862 7,369 171 104 482 731 96.7% 466 104 158 362
Total 180 1,083 10,874 10,046 310 360 1,022 944 95.4% 975 234 216 741
Leasing and property administration 44 41 – 44
Development projects
and undeveloped land
13 2 149 24 34 4 2 1 1
Total 193 1,085 11,023 334 394 1,026 977 279 257 698

The Öresund Region

Malmö, Lund and Helsingborg, together with 22 other municipalities, form the Malmö region. Approx. one million people live in the region, or about 11% of Sweden's population. Another 2.7 million people are living on the Danish side. The entire Malmö region has during the last few years had a very strong progress.

Castellum's real estate portfolio in the Öresund region is located in Malmö, Lund, Helsingborg and Copenhagen.

The infrastructure in Malmö together with Copenhagen is highly developed, with the Öresund Bridge, a number of European highways, Sturup airport and the proximity to Kastrup airport, a modern harbour and good railroad connections. Structural investments in infrastructure like the Öresund bridge and the new City railroad tunnel drives the development forward. Malmö has been transformed from an industrial to a knowledge city and the business that earlier consisted of few large industrial companies has shifted and is now made up by several small enterprises in a number of branches. Copenhagen is characterized by being capital of Denmark and the trade and industry in Copenhagen has been transformed with declining manufacturing industries for the benefi t of the service sector.

Lund has a highly developed infrastructure with highways E22 and E6 and the airports Sturup and Kastrup close by. Lund's economy has a knowledge based profi le with many smaller research intensive companies with connections both to the university and to established companies. Several of those have emerged out of Ideon where the last year's new production of offi ce areas has been concentrated. The Brunnshög area is an upcoming area for exploitation, partly because of plans for the research establishment European Spallation Source (ESS) to be located to the area. New construction of a synchrotron plant, MAX IV, was started in the area which will be completed 2015.

Helsingborg has a strategic location and good infrastructure, with the highways E4 and E6 and Sweden's third largest harbour for goods, all of which have transformed the city into a centre for sea and land transport. The city is a trade and logistics centre, but also food, pharmaceutical and manufacturing industry are important businesses.

Rental market

The rental market in Malmö has remained strong, with stable rental levels and high demand for offi ce premises in particular, even if some slowdown was observed towards the end of the year. Vacancies remain virtually unchanged for both offi ce and warehouse premises.

The demand for warehouse and industrial premises in Helsingborg has been good. This has had a positive impact on rental levels - whereas some slowdown was seen for offi ce premises.

In Lund, the increased supply, caused by new construction and new restructuring-based vacancies, has not been met with an equivalent increase in demand. However, rental levels remain stable and the demand for new offi ce space is expected to increase when the larger projects at the research campus are completed.

Real estate market

The 2011 transaction volume increased in the Malmö region and totalled SEK 5.3 billion, compared to SEK 4.9 billion in 2010. Approx. 70% of the volume was carried out in the municipality of Malmö and approx. 38% concerned residential properties. The single largest transaction in the region amounted to SEKm 600 and concerned a residential property in the city centre. All but two of the major buyers were Swedish companies. Sales of offi ce properties were conducted with a yield of 5.0% -6.0%.

DIRECTORS REPORT

Malmö Region of which Lund of which Helsingborg
Population 1,087,000 112,000 131,000
Growth in population 2002-2011 / year (the nation 0.6%) 1.1% 1.2% 1.0%
Students at university/college 59,000 39,000
Growth in employment 2002-2011 / year (the nation 0.5%) 1.0% 1.0% 1.1%
Growth in gross wages 2002-2011 / year (the nation 2.5%) 3.0% 2.9% 3.0%

Source: Evidens and SCB

The fi ve largest real estate owners

Malmö Region Premises thous. sq.m. of which Lund Premises thous. sq.m. of which Helsingborg Premises thous. sq.m.
Wihlborgs 1,205 Castellum (Briggen) 128 Wihlborgs 502
Castellum (Briggen) 656 Wihlborgs 121 Castellum (Briggen) 156
Vasakronan 292 Hemfosa Fastigheter 102 Norrporten 112
Kungsleden 191 Vasakronan 85 Brinova 98
Dagon 183 North Bridge Capital Partners 77 Northern Logistics Property 75

Number of commercial premises (excl. residential) owned as at 31-12-2011. Municipal and State-owned companies and government institutions have been excluded. Source: Byggstatistik och Castellum

Malmö Lund Helsingborg
Market rents
SEK/sq.m.
Yields at sales Estimated
values. SEK/sq.m
Market rents
SEK/sq.m.
Yields at sales Estimated
values. SEK/sq.m
Market rents
SEK/sq.m.
Yields at sales Estimated
values. SEK/sq.m
Offi ce
AA-area 1,650 - 2,400 5.25% - 6.25% 20,000 - 30,000
A-area 1,500 - 2,100 5.75% - 6.50% 14,000 - 20,000 1,300 - 1,950 6.25% - 6.75% 14,500 - 22,000 1,250 - 1,800 6.50% - 7.00% 12,000 - 17,000
B-area 900 - 1,500 6.50% - 7.75% 7,000 - 13,000 700 - 1,350 6.75% - 7.75% 8,000 - 12,000 800 - 1,200 7.25% - 8.25% 7,000 - 10,000
C-area 650 - 1,200 7.75% - 9.00% 5,000 - 7,000 600 - 1,000 7.50% - 9.00% 5,000 - 7,000 600 - 850 8.00% - 9.75% 4,500 - 7,000
Retail
AA-area 4,000 - 5,750 5.25% - 6.00% 40,000 - 45,000
A-area 3,200 - 4,500 5.75% - 6.25% 25,000 - 35,000 2,500 - 4,400 6.00% - 6.50% 25,000 - 35,000 2,500 - 4,000 6.25% - 7.00% 22,000 - 32,000
B-area 1,000 - 2,400 6.50% - 7.50% 10,000 - 20,000 1,200 - 2,200 6.50% - 7.25% 15,000 - 25,000 1,200 - 1,900 7.00% - 7.75% 9,000 - 14,000
C-area 650 - 1,300 7.50% - 9.00% 5,000 - 12,000 650 - 1,100 7.25% - 8.50% 6,000 - 10,000 600 - 900 7.50% - 9.50% 4,000 - 8,000
Warehouse/industrial
AA-area 650 - 850 7.00% - 7.75% 5,000 - 9,000
A-area 550 - 700 7.25% - 8.00% 4,000 - 8,500 450 - 800 7.25% - 8.50% 4,000 - 8,000 350 - 650 7.75% - 8.75% 3,000 - 8,000
B-area 350 - 650 8.00% - 9.50% 3,500 - 6,000 350 - 650 8.00% - 9.50% 3,000 - 5,500 250 - 500 8.25% - 10.00% 2,500 - 4,500
C-area 300 - 500 9.00% - 10.50% 3,000 - 4,000 250 - 400 9.00% - 12.00% 2,000 - 4,000 225 - 400 9.00% - 12.00% 1,500 - 3,000

Source: NAI Svefa

Income from property management

Investments and sales

Rental value and economic occupancy rate

Net leasing

Öresund region summary

Castellum's real estate portfolio

Castellum's real estate portfolio in the Öresund region comprises 109 properties (101) with a total area of 678,000 sq. m. (646,000) and a fair value of SEKm 7,303 (6,748). For properties owned at the year-end the rental value amounted to SEKm 703 (667) on an annual basis and net operating income to SEKm 388 (370). Investments during the year amounted to SEKm 541 (187).

50% of Castellum's portfolio in the Öresund region is located to Malmö and comprises mainly a mix of commercial properties in the established market areas Jägersro, Fosie, Bulltofta and Norra Hamnen. In central Malmö there is also a portfolio of larger offi ce and retail properties.

In Lund, corresponding to 28% of the company's real estate portfolio in the Öresund region, the portfolio comprises offi ce as well as warehouse and industrial properties in the industrial estates Råbyholm and Gunnesbo, and offi ce properties close at the Ideon science park. There is also a smaller portfolio of offi ce and retail properties located to central Lund.

The portfolio in Helsingborg, 18%, comprises mainly offi ce, warehouse and industrial properties situated primarily in Berga industrial estate and in central Helsingborg.

During 2011 Castellum has acquired 4 properties in Albertslund, Brøndby and Vibeholm in Copenhagen, Denmark, which corresponds to 4% of the portfolio in the Öresund Region.

See also the section Castellum's Real Estate Schedule 2011, with real estate schedule, maps and fi nancial information.

Rental development

Castellum's average rental level is SEK 1,366 per sq.m. for offi ce/retail and SEK 703 per sq.m. for warehouse/industrial premises. Rental levels have increased by 0.1% in comparable portfolio compared with previous year.

The average economic occupancy rate was 85.2%, which is 1.4% units lower than previous year.

The gross leasing (i.e. the annual value of total leasing) during the year was SEKm 63 (66), of which SEKm 11 (14) related to leasing in new constructions, extensions and reconstructions. Notices of terminations amounted to SEKm 40 (75), of which bankruptcies were SEKm 2 (2), hence net leasing for the year were SEKm 23 (–9).

Subsidiaries

Castellum's properties in the Öresund region are owned and managed by the wholly owned subsidiary Fastighets AB Briggen, with its head offi ce in Malmö and a local offi ce in Helsingborg, Lund and Copenhagen. At the year-end Briggen had 43 employees.

December 31, 2011 January-December 2011
Property Investments, SEKm -
No of
prop.
Area
thous.
sq.m.
value
SEKm
Property
value
SEK/sq.m
New constr., Acquisi
ext., recon.
tions Rental
value
SEKm
Rental
value
SEK/sq.m
Econ.
occupancy
rate
Rental
income
SEKm
Property
costs
SEKm
Property
costs
SEK/sq.m
operating
income
SEKm
Offi ce/retail 59 355 5,271 14,841 79 292 485 1,366 86.2% 418 113 318 305
Warehouse/industrial 41 297 1,750 5,902 21 209 703 82.8% 173 47 159 126
Total 100 652 7,021 10,774 100 292 694 1,065 85.2% 591 160 246 431
Leasing and property administration 38 58 – 38
Development projects
and undeveloped land
9 26 282 149 9 1 6 – 5
Total 109 678 7,303 249 292 703 592 204 304 388

Greater Stockholm

The Stockholm region is Sweden's largest employment area with approx. two million inhabitants, or 22% of the nations total population.

Castellum's region Greater Stockholm includes the municipalities of Stockholm, Botkyrka, Huddinge, Järfälla, Nacka, Sigtuna, Sollentuna and Upplands-Väsby.

Stockholm is characterized by being the nation's capital, where major political institutions as well as a large number of Swedish companies are residing. The whole region with Stockholm city, suburbs and surrounding cities is growing and under continuous progress. The region has Sweden's largest service sector spread over many business areas, making up for approx. 60% of total gross wages. Both employment and population growth in the region have during the last decade been highest in the country.

Greater Stockholm can be divided into the inner city and areas north and south of the city centre. In the northern area there are mainly service-based companies, while there is a larger share of companies dedicated to manufacturing and distribution in the south. Both in the north and the south, the increasing number of workplaces have gradually been concentrated to larger business districts.

North

Infrastructure in the northern part of Greater Stockholm is well developed with highways E4 and E18, as well as airports at Arlanda and Bromma. There are also several harbours, which to a large extent are used for passenger transportation. New businesses and growth in the northern areas have mainly been concentrated to the stretch between Stockholm and Arlanda, where a number of large business areas have been established such as Kista, parts of Sollentuna and parts of Upplands-Väsby.

Sollentuna municipality, with a strategic location between Stockholm city and Arlanda airport, consists of a number of submarkets and has expanded particularly within retail and service.

The municipalities Solna and Sundbyberg and the districts Mariehäll and Ulvsunda in Bromma are geographically concentrated with proximity to Stockholm city and have a well developed infrastructure. The total offi ce market in the area is, next after the inner city, the largest within the entire Stockholm region and has shown strong growth in the number of employees in offi ce intensive businesses.

Kista Science City, located in Kista, is one of northern Europe's most dynamic business parks and one of the Stockholm region's largest business areas, where approx. 66,000 people work. Kista is dominated by companies operating mainly in the fi elds of information technology and telecommunication. Also the retail sector has grown strongly.

South

In southern Stockholm there are a number of offi ce and industrial areas. The Globen area, including Johanneshov, is dominated by service companies, retail and communication. The area has good means of communication. Marievik/Liljeholmen is a more typical offi ce area just outside Stockholm's inner city and Södermalm. Västberga, with proximity to highway E4 and the trunk line, is dominated by transportation and logistics companies, warehouses, manufacturing and construction companies.

Skärholmen, located to the most southern part of Stockholm, is dominated by trade and the area Kungens Kurva is one of the largest shopping areas in the Nordic countries.

Rental market

The residential property market in the Stockholm region has been stable in most sub-markets, with largely unchanged rental and vacancy levels. Towards the year-end a slowdown was observed. Although many major new construction and reconstruction projects have been completed in recent years, the rental and vacancy levels have not been directly affected.

At the moment, however, the demand for effi cient storage and logistics premises is greater than supply, which is refl ected in the low vacancy rate.

Real Estate Market

Turnover in the Stockholm region property market represented approx. 40% of the transaction volume in the country, and increased compared to the previous year. In 2011, real estate transactions totalled approximately SEK 36.6 billion, compared to SEK 35.1 billion in 2010.

The larger transactions conducted included various property types such as land, housing, retail, and offi ces. The largest retail property transaction consisted of a portfolio of approx. SEK 2.4 billion, and both seller and buyer were foreign players. Central offi ce properties accounted for the largest share of sales in Greater Stockholm, and most buyers represented pension funds. Yield varied between 4.5%-5.5%.

Stockholm

Population 2,129,000
Growth in population 2002-2011 / year (the nation 0.6%) 1.2%
Students at university/college 98,000
Growth in employment 2002-2011 / year (the nation 0.5%) 1.1%
Growth in gross wages 2002-2011 / year (the nation 2.5%) 2.6%
Source: Evidens and SCB

The fi ve largest real estate owners

(Municipalities Botkyrka, Huddinge, Järfälla, Nacka, Sigtuna, Premises thous. sq.m
Sollentuna, Solna, Stockholm, Upplands-Väsby)
Vasakronan 1,775
Fabege 1,097
Atrium Ljungberg 579
Castellum (Brostaden) 573
AMF Pension 537

Number of commercial premises (excl. residential) owned as at 31-12-2011. Municipal and State-owned companies and government institutions have been excluded. Source: Byggstatistik and Castellum

Stockholm (inner suburbs)

Market rents
SEK/sq.m.
Yields
at sales
Estimated values,
SEK/sq.m
Offi ce
A-area 1,700 - 2,300 5.25% - 6.75% 15,000 - 35,000
B-area 1,200 - 1,600 6.50% - 7.50% 10,000 - 20,000
C-area 700 - 1,200 7.25% - 8.75% 5,000 - 8,000
Retail
A-area 1,500 - 6,000 5.50% - 6.75% 20,000 - 60,000
B-area 1,100 - 2,500 6.50% - 7.50% 10,000 - 25,000
C-area 600 - 1,500 7.00% - 8.00% 5,000 - 10,000
Warehouse/industrial
A-area 800 - 1,300 7.00% - 8.00% 5,000 - 12,000
B-area 550 - 800 7.50% - 8.50% 4,500 - 8,000
C-area 450 - 650 7.75% - 9.00% 3,500 - 6,000
Source: NAI Svefa

Ekenäs 1-4, Stockholm kenäs

Income from property management

Investments and sales

Net leasing

Greater Stockholm summary

Castellum´s real estate portfolio

Castellum's real estate portfolio in Greater Stockholm comprises 100 properties (97) with a total area of 573,000 sq.m. (569,000) and a fair value of SEKm 6,557 (6,370). For properties owned at the year-end the rental value amounted to SEKm 675 (635) on an annual basis and net operating income to SEKm 347 (331). Investments during the year amounted to SEKm 226 (374).

In the northern suburbs, comprising 36% of Castellum's real estate property portfolio in Greater Stockholm, larger offi ce and retail properties are located in Mariehäll in Bromma, Kista and Solna.

Properties in the southern suburbs, corresponding to 36% of Castellum's real estate portfolio in Greater Stockholm, are located in areas such as Johanneshov, Skärholmen/Kungens kurva and Nacka. In these areas there are mainly larger offi ce and retail properties. In Botkyrka warehouse and industrial properties can also be found.

In the western suburbs, comprising 28% of Castellum's real estate property portfolio in Greater Stockholm, larger offi ce and properties are located in Upplands-Väsby and Sollentuna. In the areas Veddesta/ Lunda and Rosersberg there are mainly warehouse and industrial properties.

See also the section Castellum's Real Estate Schedule 2011, with real estate schedule, maps and fi nancial information.

Rental development

Castellum's average rental level is SEK 1,343 per sq.m. for offi ce/retail and SEK 926 per sq.m. for warehouse/industrial premises. Rental levels have increased by 2.2% in comparable portfolio compared with previous year.

The average economic occupancy rate was 82.2%, which is 0.6% units lower than previous year.

The gross leasing (i.e. the annual value of total leasing) during the year was SEKm 73 (47), of which SEKm 4 (4) related to leasing in new constructions, extensions and reconstructions. Notices of terminations amounted to SEKm 70 (42), of which bankruptcies were SEKm 3 (3), hence net leasing for the year were SEKm 3 (5).

Subsidiary

Castellum's properties in Greater Stockholm are owned and managed by the wholly owned subsidiary Fastighets AB Brostaden, with its head offi ce in Stockholm. Brostaden's operations are divided into three market areas. At the year-end Brostaden had 39 employees.

December 31, 2011 January-December 2011
Area
Property
Property
Investments, SEKm - Econ. Rental Property Property Net
operating
No of thous. value value New constr. Acquisi Rental
value
Rental
value
occupancy income costs costs income
prop. sq.m. SEKm SEK/sq.m ext. recon. tions SEKm SEK/sq.m rate SEKm SEKm SEK/sq.m SEKm
Offi ce/retail 52 344 4,352 12,655 77 23 462 1,343 78.1% 361 116 337 245
Warehouse/industrial 42 218 1,945 8,909 74 29 202 926 91.4% 185 53 241 132
Total 94 562 6,297 11,200 151 52 664 1,181 82.2% 546 169 300 377
Leasing and property administration 34 62 – 34
Development projects
and undeveloped land
6 11 260 16 7 11 7 3 4
Total 100 573 6,557 167 59 675 553 206 362 347

Sicklaön 394:5, Nacka icklaön

CASTELLUM ANNUAL REPORT 2011 41

Mälardalen

Castellum's region Mälardalen comprises the areas of Örebro, Uppsala and Västerås, with a combined population of approx. 770,000 inhabitants, or 8% of Sweden's population. The region has had a positive population growth and has a good business structure.

The two railroads Mälar Line and Svealand Line have improved commuting between Stockholm and Örebro, via Västerås and Eskilstuna respectively.

Örebro's strategic location with the intersection of several roads, with good railroad connections and an airport close by, has transformed Örebro into a centre for logistics. Business in Örebro is diversifi ed, with activities found in commerce, service, administration, a variety of manufacturing industries and several governmental and municipal administrative bodies.

Uppsala is the country's fourth largest city and one of the most important university cities, with good communications and a well developed and diversifi ed business with focus on IT, medical science and commerce. The university, good infrastructure and vicinity to Stockholm are some of the explanations why Uppsala has been showing a good growth.

Västerås has a strategic location by highway E18, good railroad connections, an airport and the largest inland port of the Nordic countries. The local business is characterized by both multinational companies and many new enterprises. Collaboration between the university and the local business is a strong growth factor. In central Västerås, there is a transformation from former industry premises to modern offi ces going on.

Rental market

Uppsala has stable rental and vacancy levels. In 2011, the demand for warehouse and logistics premises, as well as for offi ces in the city centre, created the conditions for increased rental levels.

Västerås has had a stable rental market for both rental levels and vacancies, although some slowdown was observed towards the end of the year. This applies to both offi ce and warehouse premises.

The rental market in Örebro has been strong - especially for offi ce premises, where fewer vacancies and a positive development of rent levels have been noted. Warehouse and logistics premises, on the other hand, have essentially demonstrated unchanged vacancy and rental levels.

Real estate market

In 2011, the real estate market in Mälardalen had a turnover of approx. SEK 2.6 billion, compared with SEK 7.7 billion in 2010. Transaction volumes were evenly distributed between Uppsala and Västerås, whereas no large transactions were carried out in Örebro.

The largest transactions in Mälardalen were acquisitions of commercial and residential properties - the two largest ones being a residential property portfolio in Uppsala and the sale of shopping malls in Västerås. All major transactions carried out in 2011 had Swedish buyers, except for the sale of the malls in Västerås where both buyer and seller were foreign players.

DIRECTORS' REPORT

Örebro Uppsala Västerås
Population 230,000 309,000 231,000
Growth in population 2002-2011 / year (the nation 0.6%) 0.5% 0.9% 0.4%
Students at university/college 16,000 41,000 13,000
Growth in employment 2002-2011 / year (the nation 0.5%) 0.3% 0.8% 0.2%
Growth in gross wages 2002-2011 / year (the nation 2.5%) 2.6% 2.7% 2.0%

Source: Evidens och SCB

The fi ve largest real estate owners

Örebro Premises thous. sq.m Uppsala Premises thous. sq.m Västerås Premises thous. sq.m
Castellum (Aspholmen) 210 Vasakronan 249 Kungsleden 503
Brinova 96 Castellum (Aspholmen) 169 Klövern 193
Alecta Pensionsförsäkring 91 Uppsala Akademiförvaltning 157 Castellum (Aspholmen) 165
Norrporten 74 Klövern 85 Hemfosa Fastigheter 119
Behrn Fastigheter 71 Hemfosa Fastigheter 77 Northern Logistics Property 105

Number of commercial premises (excl. residential) owned as at 31-12-2011. Municipal and State-owned companies and government institutions have been excluded. Source: Byggstatistik and Castellum

Örebro Uppsala Västerås
Market rents
SEK/sq.m.
Yields at sales Estimated values
SEK/sq.m
Market rents
SEK/sq.m.
Yields at sales Estimated values
SEK/sq.m
Market rents
SEK/sq.m.
Yields at sales Estimated values
SEK/sq.m
Offi ce
A-area 900 - 1,600 6.50% - 8.00% 7,500 - 15,000 1,200 - 2,200 6.25% - 7.50% 10,000 - 22,000 1,000 - 1,600 6.50% - 8.00% 8,000 - 15,000
B-area 700 - 1,200 7.50% - 8.50% 4,500 - 9,000 900 - 1,700 6.75% - 7.75% 7,000 - 14,000 800 - 1,500 7.25% - 8.25% 6,000 - 12,000
C-area 600 - 800 8.50% - 9.50% 3,000 - 5,500 700 - 1,100 8.00% - 9.50% 5,000 - 9,000 700 - 1,000 8.00% - 9.00% 4,000 - 7,500
Retail
A-area 2,000 - 4,000 6.00% - 7.50% 15,000 - 35,000 2,200 - 4,500 6.00% - 7.25% 15,000 - 40,000 1,800 - 3,500 6.00% - 7.50% 15,000 - 30,000
B-area 1,000 - 2,000 7.00% - 8.00% 7,500 - 17,500 1,000 - 2,200 6.75% - 8.00% 7,000 - 17,000 1,000 - 1,600 6.50% - 8.00% 10,000 - 18,000
C-area 700 - 1,100 8.00% - 9.00% 4,000 - 9,000 800 - 1,200 7.50% - 9.00% 5,000 - 10,000 700 - 1,000 7.50% - 9.00% 5,000 - 10,000
Warehouse/industrial
A-area 500 - 750 7.25% - 9.00% 3,500 - 7,000 550 - 750 7.50% - 8.50% 4,000 - 7,000 550 - 700 7.50% - 9.00% 3,500 - 8,000
B-area 350 - 650 8.00% - 10.00% 2,500 - 5,000 450 - 600 8.00% - 9.50% 3,500 - 5,500 400 - 600 8.25% - 9.50% 3,000 - 5,500
C-area 250 - 450 9.00% - 12.00% 1,000 - 3,500 350 - 500 9.50% - 11.00% 1,500 - 4,000 300 - 450 9.25% - 10.50% 1,500 - 4,000

Source: NAI Svefa

Income from property management

Investments and sales

Rental value and economic occupancy rate

Net leasing

Castellum´s real estate portfolio

Castellum's real estate portfolio in Mälardalen comprises 120 properties (116) with a total area of 560,000 sq.m (545,000) and a fair value of SEKm 5,168 (4,829). For properties owned at the year-end the rental value amounted to SEKm 550 (509) on an annual basis and net operating income to SEKm 319 (277). Investments during the year amounted to SEKm 352 (464).

Castellum's real estate portfolio is concentrated to Örebro, Uppsala and Västerås, from central offi ce properties to warehouse and industrial properties in well-situated employment areas. Castellum's real estate portfolio in Örebro corresponds to 35% of their total real estate portfolio in region Mälardalen and consists of a mix of offi ce and retail properties and warehouse and industrial properties, concentrated to the area Aspholmen and central Örebro.

In Uppsala, with 40% of Castellum's total real estate portfolio in Mälardalen, mainly offi ce and retail properties are found, but also warehouse and industrial properties. The properties have attractive locations in Fyrislund, Boländerna and along Kungsgatan in central Uppsala. Castellum also owns a minor real estate portfolio in Märsta, in the municipality of Sigtuna.

In Västerås, corresponding to 23%, there is a mix of offi ce and retail properties and warehouse and industrial properties. The real estate portfolio is situated in the established market areas Kopparlunden, Tunbytorp, Bäckby and Hälla.

See also the section Castellum's Real Estate Schedule 2011 with real estate schedule, maps and economic information.

Rental development

Castellum's average rental level is SEK 1,088 per sq.m. for offi ce/retail and SEK 715 per sq.m. for warehouse/industrial premises. Rental levels have increased by 3.5% in comparable portfolio compared with previous year.

The average economic occupancy rate was 92.6%, which is 2.0% units higher than previous year.

The gross leasing (i.e. the annual value of total leasing) during the year was SEKm 61 (56), of which SEKm 17 (10) related to leasing in new constructions, extensions and reconstructions. Notices of terminations amounted to SEKm 45 (33), of which bankruptcies were SEKm 3 (2), hence net leasing for the year were SEKm 16 (23).

Subsidiary

Castellum's properties in Mälardalen are owned and managed by the wholly owned subsidiary Aspholmen Fastigheter AB with its head offi ce in Örebro. The company has local management offi ces in Västerås and Uppsala. At the year-end Aspholmen had 42 employees.

Mälardalen summary

December 31, 2011 January-December 2011
Investments, SEKm Net
No of
prop.
Area
thous.
sq.m.
Property
value
SEKm
Property
value
SEK/sq.m
New constr., Acquisi
ext., recon.
tions Rental
value
SEKm
Rental
value
SEK/sq.m
Econ.
occupancy
rate
Rental
income
SEKm
Property
costs
SEKm
Property
costs
SEK/sq.m
operating
income
SEKm
Offi ce/retail 79 400 4,241 10,591 218 73 436 1,088 92.3% 402 129 323 273
Warehouse/industrial 38 160 913 5,714 30 31 114 715 93.7% 107 28 174 79
Total 117 560 5,154 9,199 248 104 550 982 92.6% 509 157 281 352
Leasing and property administration 33 59 – 33
Development projects
and undeveloped land
3 14 0 0 0 0
Total 120 560 5,168 248 104 550 509 190 340 319

Eastern Götaland

Castellum's real estate portfolio in Eastern Götaland comprise Värnamo, Jönköping, Växjö, and Linköping, which together form a region with approx. 630,000 inhabitants, or 7% of Sweden's population.

The province of Småland is well known for its entrepreneurial spirit and is one of Sweden's most interesting and successful regions, in terms of small enterprises.

Jönköping has a strategic location, with several major highways and access to airport and railroad, which has developed Jönköping into a logistics centre. Many large companies have established warehouses and distribution in Jönköping. At the end of 2011 a new construction was started, Atollen, which is one of the larger new construction projects in Jönköping, and will expand the city with offi ce, retail and residentials.

Värnamo has a small labor market, though the number of people in the city's reception area for commerce is three times as large as its population. The infrastructure, with highway E4 and good railroad connections provide for good accessibility and a successful industry. Värnamo has a strong tradition of small enterprises and is today a centre for commerce and services. The industry is to a high degree export orientated.

Växjö is an attractive city with good means of communication, a variety of educations and a positive business climate, which all have contributed to the high growth. There is a good mix of companies in basic industries such as foresting and manufacturing, and companies with a hi-tech profi le.

Linköping has a strategic location in the centre of Östergötland, and good means of communication with roads, railroad and an airport close to the city centre. Traditional business is clearly diversifi ed, but consists mainly of companies within the technical fi eld. The region has a close co-operation between local businesses and the university, for instance in Mjärdevi Science Park, with more than 6,000 employees.

Rental market

Retail developed positively in Jönköping, resulting in increased demand for retail premises. Rental levels for warehouse and logistics premises have remained unchanged, whereas there was a slight increase in rent for effi cient offi ce space.

In Växjö, rental levels and vacancy rates for offi ce premises remained unchanged. Furthermore, rental levels have remained stable for warehouse and industrial premises, even if a slight slowdown in demand could be detected near year-end, 2011.

In Värnamo, demand for both offi ce and warehouse premises slowed down somewhat during 2011. Rental levels and vacancies, however, have not been affected.

The rental market in Linköping has been positive during the year, enjoying upbeat rental levels and vacancy rates for both warehouse and offi ce premises. The offi ce market in Linköping is strong, with few vacancies.

Real Estate market

In 2011, transaction volumes in the Eastern Götaland property market amounted to SEK 3.8 billion, compared with SEK 1.1 billion in 2010. Volumes were primarily increased by two major transactions: a portfolio sale of Norrporten and the sale-and-leaseback transaction of an industrial property. Approx. 70% of the volume concerned Jönköping and primarily referred to commercial properties. Several foreign players were represented on both the buying and the selling sides during the year.

DIRECTORS' REPORT

Jönköping Värnamo Växjö Linköping
Population 211,000 33,000 133,000 254,000
Growth in population 2002-20101/ year (the nation 0.6%) 0.6% 0.2% 0.7% 0.5%
Students at university/college 16,000 12,000 24,000
Growth in employment 2002-2011/ year (the nation 0.5%) 0.6% – 0.4% 0.3% 0.2%
Growth in gross wages 2002-2011 / year (the nation 2.5%) 2.6% 1.7% 2.1% 2.2%

Source: Evidens och SCB

The fi ve largest real estate owners

Jönköping Premises thous. sq.m Värnamo Premises thous. sq.m Växjö
Premises thous. sq.m
Linköping Premises thous. sq.m
Castellum (Corallen) 157 Castellum (Corallen) 146 Castellum (Corallen) 128 Klövern 282
Norrporten 99 Hemfosa Fastigheter 24 Norrporten 85 Acta 99
Tosito 87 Remnes i Värnamo 21 Valad Property Group 72 Ikano Fastigheter 72
Alecta Pensionsförsäkring 71 Värnabo Fastigheter 8 Northern Logistics Property 69 Lilium 67
Brinova 68 Nivika Förvaltning 8 Corem Property Group 64 Botrygg Bygg 65
Castellum (Corallen) 51

Number of commercial premises (excl. residential) owned as at 31-12-2011. Municipal and State-owned companies and government institutions have been excluded. Source: Byggstatistik and Castellum

Jönköping Värnamo Växjö Linköping
Market rent
SEK/sq.m.
Yields
at sale
Estimated values
SEK/sq.m.
Market rent
SEK/sq.m
Yield
at sale
Estimated values
SEK/sq.m.
Market rent
SEK/sq.m
Yields
at sale
Estimated values
SEK/sq.m.
Market rent
SEK/sq.m
Yields
at sale
Estimated values
SEK/sq.m.
Offi ce
A-area 900 - 1,700 6.50% - 7.25% 10,000 - 16,000 800 - 1,200 6.75% - 8.00% 8,000 - 12,000 900 - 1,300 6.75% - 8.00% 9,000 - 15,000 1,000 - 1,600 6.25% - 7.00% 8,000 - 16,000
B-area 700 - 1,500 7.00% - 8.50% 6,000 - 9,000 700 - 900 7.50% - 8.50% 5,000 - 8,000 700 - 1,000 7.50% - 9.00% 4,000 - 8,000 800 - 1,300 6.75% - 7.75% 5,000 - 9,000
C-area 500 - 1,000 8.00% - 9.50% 3,000 - 5,000 500 - 700 8.50% - 9.50% 4,000 - 6,000 500 - 800 8.00% - 9.50% 3,000 - 4,500 550 - 850 7.75% - 9.00% 3,000 - 5,500
Retail
A-area 1,500 - 5,000 5.75% - 6.75% 15,000 - 35,000 1,000 - 1,800 6.50% - 7.50% 9,000 - 15,000 1,200 - 2,200 6.00% - 7.00% 12,000 - 25,000 1,800 - 3,800 6.25% - 7.25% 15,000 - 35,000
B-area 800 - 1,500 6.25% - 7.75% 7,000 - 15,000 800 - 1 200 7.00% - 8.00% 6,000 - 11,000 750 - 1,400 6.75% - 7.50% 7,000 - 15,000 1,000 - 2,000 7.00 % - 8.25% 6,000 - 15,000
C-area 500 - 900 7.25% - 9.00% 3,000 - 9,000 600 - 800 8.00% - 9.25% 4,000 - 7,000 600 - 900 7.75% - 9.00% 3,000 - 6,000 600 - 1,000 8.25% - 10.00% 3,000 - 8,000
Warehouse/industrial
A-area 400 - 700 6.75% - 9.00% 3,000 - 8,000 450 - 650 8.25% - 9.50% 3,500 - 5,500 450 - 600 8.00% - 9.50% 3,000 - 6,000 400 - 650 7.75% - 9.25% 3,000 - 7,000
B-area 350 - 600 8.00% - 9.50% 2,500 - 6,000 350 - 550 9.00% - 10.00% 3,000 - 4,000 400 - 500 9.00%- 10.00% 2,500 - 3,500 350 - 550 8.25% - 10.00% 2,500 - 4,500
C-area 300 - 550 9.00% - 11.00% 1,750 - 5,000 300 - 400 10.00% - 11.00% 2,000 - 3,000 300 - 400 9.75% - 11.50% 2,000 - 3,000 300 - 450 9.50% - 11.00% 1,800 - 3,500

Source: NAI Svefa

Income from property management

Rental value and economic occupancy rate

Net leasing

Eastern Götaland summary

Castellum's real estate portfolio

Castellum's real estate portfolio in Eastern Götaland comprises 95 properties (96) with a total area of 515,000 sq.m. (505,000) and a fair value of SEKm 3,816 (3,645). For properties owned at the year-end the rental value amounted to SEKm 412 (402) on an annual basis and net operating income to SEKm 227 (218). Castellum's real estate portfolio is located in Jönköping, Värnamo, Växjö and Linköping. Investments during the year amonuted to SEKm 168 (166).

In Jönköping, with 40% of Castellum's real estate portfolio in Eastern Götaland, the portfolio consists mainly of offi ce and retail properties situated in attractive areas such as Rosenlund, central Jönköping and shopping center area A6.

In Värnamo, corresponding to 23% of Castellum's real estate portfolio in Eastern Götaland, the portfolio is mainly concentrated to centrally located offi ce and retail properties as well as warehouse and industrial properties in expansive industrial estates.

In Växjö, corresponding to 23% of the portfolio in the region, Castellum owns mainly offi ce and retail properties in the central parts and in the expansive area Västra Mark where also warehouse and industrial properties are found.

In Linköping, the real estate portfolio is concentrated to offi ce properties in the area of Mjärdevi Science Park.

See also the section Castellum's Real Estate Schedule 2011 with real estate schedule, maps and economic information.

Rental development

Castellum's average rental level is SEK 999 per sq.m. for offi ce/retail and SEK 504 per sq.m. for warehouse/industrial premises. Rental levels have increased by 2.6% in comparable portfolio compared with previous year.

The average economic occupancy rate was 88.4%, which is 0.4%-units higher than previous year.

The gross leasing (i.e. the annual value of total leasing) during the year was SEKm 41 (27), of which SEKm 6 (8) was leasing in connection to new constructions, extensions and reconstructions. Notices of terminations amounted to SEKm 29 (14), of which bankruptcies were SEKm 3 (1), hence net leasing for the year were SEKm 12 (13).

Subsidiary

Castellum's properties in Eastern Götaland are owned and managed by the wholly owned subsidiary Fastighets AB Corallen, with its head offi ce in Värnamo. The company also has local management offi ces in Jönköping, Linköping and Växjö. At the year-end Corallen had 30 employees.

December 31, 2011 January-December 2011
Area Property Property Investments, SEKm - Rental Rental Econ. Rental Property Property Net
operating
No of
prop.
thous.
sq.m.
value
SEKm
value
SEK/sq.m
New constr., Acquisi
ext., recon.
tions value
SEKm
value
SEK/sq.m
occupancy
rate
income
SEKm
costs
SEKm
costs
SEK/sq.m
income
SEKm
Offi ce Retail 52 320 2,968 9,284 97 319 999 89.8% 286 100 314 186
Warehouse/industrial 34 184 740 4,013 7 93 504 83.6% 78 23 125 55
Summa 86 504 3,708 7,356 104 412 818 88.4% 364 123 245 241
Leasing and property administration 14 27 – 14
Development projects
and undeveloped land
9 11 108 56 8
Totalt 95 515 3,816 160 8 412 364 137 272 227

Property Valuation

Average valuation yield
(excl. project/land and building rights) Mkr
Net operating income properties 2,142
+ Estimated index adjustment 2012, 2% 64
+ Real occupancy rate, 94% at the lowest 229
+/- Property costs to a normal year

Property administration, 30 SEK/sq.m.
– 102
Normalized net operating income 2,333
Valuation (excl. building rights of SEKm 460) 32,594
Average valuation yield 7.2%

Internal valuation

Castellum records the investment properties at fair value and has made an internal valuation of all properties as of December 31, 2011. The valuation was carried out in a uniform manner, and was based on a 10-year cash fl ow model, which was described in principle below. The internal valuation was based on an individual assessment for each property and refl ects both its future earnings capacity and its required market yield. In the valuation of a property's future earnings capacity, consideration has been taken of potential changes in rental levels, occupancy rates and property costs - as well as an assumed infl ation level of 1.5%. Projects in progress have been valued using the same principle, but with deductions for remaining investments. Building rights have been valued on the basis of an estimated market value per square metre, on average approx. SEK 980 per sq.m. (970). For further information about the assumptions in cash-fl ow and required yield see note 11.

Based on these internal valuations, the fair value of the properties were assessed to SEKm 33,867 Mkr (31,768), corresponding to SEK 9,835 per sq.m. (9,500). The average valuation yield for Castellum's real estate portfolio, excluding development projects and undeveloped land, can be calculated to 7.2% (7.2%). It is notable that since the early 2000s, the gap between the valuation yield and SEK government bond increased and have not been as wide as now.

Property value with different required yield and growth in rental value and property costs

To illustrate the model, the following example is provided. It should be noted that assumptions regarding cash fl ow growth and other assumptions included in the model are only intended to illustrate the model. Even if relevant fi gures is used the example should thus not be regarded as a forecast of the company's expected earnings.

Assumptions in the example:

  • The economic occupancy rate is assumed to increase in order to reach a long-term level of 96% in the year 2017.
  • Net operating income for 2011 is based on the result for the investment properties, with an assumed cost of SEK 30/sq.m. for pure property administration.
  • Growth in rental value and property costs has been assumed to 1.5% per year during the calculation period.
  • The average economic life of the real estate portfolio has been assumed to be 50 years.
  • Projects, undeveloped land and building rights have an assumed value SEKm 1,273.
  • The required yield, discount factor, is calculated according to the following assumptions:

Assumed value, projects, land,

Total property value 33,811

Uncertainty range

Property valuations are calculations performed according to accepted principles and on the basis of certain assumptions. The value range of +/– 5-10%, often used in property valuations in a normal market, should therefore be seen as an indication of the uncertainty that exists in assumptions and calculations. In a market with lower liquidity, the range may be wider. For Castellum, an uncertainty range of +/– 5% means a range in value of +/– SEKm 1,693, corresponding to SEKm 32,174-35,560.

External valuation

In order to provide further assurance and validation of the internal valuation, 133 properties - representing 51% of the value of the portfolio - have been valued externally by NAI Svefa. NAI Svefa's valuation of the selected properties amounted to SEKm 17,058, within an uncertainty range of +/- 5-10% on property level, depending on each property's category and location. Castellum's valuation of the same properties totalled SEKm 17,240, i. e., a net change of SEKm 182, corresponding to 1%. Gross deviation was SEKm +347 and SEKm –529 respectively, with an average deviation of 5%.

Change in value

The change in value in Castellum's portfolio during 2011 amounted to SEKm 194 (1,222), corresponding to approx. 0.6% (4%). The net increase in value, including the years change, over the past 10 years has been nearly 1.5% per year, which is in line with the infl ation.

Total yield

Concerning the total yield of the properties - i.e., the sum of yields and changes in value - it can be noted that Castellum's performance depends on when measurements were started.

On average, Castellum has had a better total yield on warehouse/ industrial compared to offi ce/retail - regardless of when measuring was started. The annual average total yield for the past 10 years has been 8.0% (7.4% yield + 0.6% change in value), thereby surpassing offi ce/ retail which had 6.9% (6.2% yield + 0.7% change in value). Calculations do not include project gains or acquisitions from the year the acquisition was completed.

From both Swedish and European perspectives, the Castellum property portfolio achieved a higher total yield in 2011 than did the asset type shares. This can be explained by turbulence on the stock exchange during the year. In a longer perspective, i.e., over the past 10 years, the average annual total yield for the Castellum property portfolio was lower than both the Castellum share and the Swedish property shares. It was, however, slightly higher than the total yield of the Stockholm Stock Exchange and European property shares.

Assumptions Offi ce/retail Warehouse/
industrial
Cash fl ow year 1
Rental value, SEK/sq.m. 1,239 734
Vacancy, % 11% 10%
Direct property costs, SEK/sq.m. 323 173
Property administration, SEK/sq.m. 35 25
Required yield
Real interest rate 3.0% 3.0%
Infl ation 1.5% 1.5%
Risk 4.9% - 11.5% 6.5% - 13.7%
Return on equity 9.4% - 16.0% 11.0% - 18.2%
Interest rate 5.5% 5.5%
Loan to value ratio 65% 55%
Return on total capital 6.8% - 9.2% 8.0% - 11.2%
Weighted d:o, disconted factor year 1-9 7.9% 9.1%
Weighted d:o, disc. factor residual value* 6.4% 7.6%
*(required yield on total capital minus equal to infl ation)

Internal vs external valuation

2011 2010 2009 2008 2007
Internal valuation 33,867 31,768 29,267 29,165 27,717
External valuation 17,058 15,614 14,981 14,657 13,976
Prop. external of internal 51% 50% 51% 50% 50%
Net diff. external vs internal –182 – 368 – 9 – 142 67
D:o in % –1% – 2% 0% – 1% 0%
Gross deviation positive 347 291 495 396 455
Gross deviation negative – 529 – 659 – 504 – 538 – 388
Average deviation 5.1% 5.9% 6.7% 6.3% 6.1%

Total yield in average/year in different cycles until 2011

1 year 3 years 10 year
1 year 3 years 10 year
average / average/
average / average/
year
year
Total yield year year
Properties 6% 6% 7%
Castellum share – 3% 18% 17%
NASDAQ OMX Stockholm (Six Return) – 14% 19% 6%
Real Estate Index Sweden (EPRA) – 13% 17% 15%
Real Estate Index Europe (EPRA) – 9% 13% 5%
Change in value
Change in property value, unweighted 0.6% 0.4% 1.5%
Infl ation 2.0% 1.7% 1.6%

Financing

Financing 31-12-2011

Policy Objective/Mandate Outcome
Loan to value ratio Not in the long run
exceeding 55%
51%
Interest coverage ratio At least 200% 278%
Interest rate risk
– average fi xed
interest term
0.5-3 years 2.7 years
– Proportion maturing
within 6 months
Currency risk
No more than 50% 34%
– investment 60%-100% funded in
local currency
97%
– other currency risks Not allowed No exposure
Funding risk At least 50% of interest
bearing liabilities have
a duration of at least
2 years
100%
Counterparty risk Credit institutions with
high ratings at least
"investment grade"
Satisfi ed
Liquidity risk Liquidity reserve in
order to fulfi l payments
due
SEKm 2,731 in
unutilized
credit agree
ments

Listed real estate companies

Source: Rolling annual values based on each company's report Q3 2011.

Property ownership is a capital intensive business and access to funding is one of the fundamentals to ensure successful development of the real estate portfolio.

Loan-to-value ratio and tied-up capital

Properties are long-term assets and demand long-term funding with distribution between shareholders' equity and interest-bearing debt. The loan-to-value ratio is the fi nancial key ratio that describes the proportion of the property's value that is covered by loans. Castellum's objective is a loan-to-value ratio not exceeding 55% in the long run.

Castellum's assets had a value of SEKm 34,171 (31,936) on 31 December 2011 and these are fi nanced by SEKm 11,203 (11,082) in shareholders' equity and SEKm 22,968 (20,854) in liabilities - of which SEKm 17,160 (15,781) are interest-bearing liabilities. The loan-to-value ratio at the year-end was 51% (50%).

The demand for long-term funding makes Castellum look for longterm credit agreements in order to minimize the refi nancing risk. Existing agreements are regularly renegotiated and new agreements are signed. At year end, Castellum had unutilized binding long-term credit agreements with banks totalling SEKm 2,311 (2,293), which gives Castellum easy access to new funding for investments in new construction, extensions, reconstructions and acquisitions. During the year, new long-term credit agreements totalling SEKm 1,312 have been signed, and existing credit agreements totalling SEKm 5,800 have been renegotiated.

Interest rate risk and interest coverage ratio

Interest expense is the single largest cost item and affects the growth of income from property management. The interest rate cost is affected both by changes in the market interest rates and by the interest margin demanded by the lenders in return for lending money. The short-term market interest rate is controlled by the Riksbank, whereas the longterm market interest rate is affected by other factors such as expectations of future economic growth and infl ation. The credit margin is controlled by supply and demand for credit, as well as by the rules under which the banks operate. Both interest and credit markets can change rapidly and cannot be affected by Castellum.

Increasing market interest rates are generally assumed to result from economic growth and rising infl ation, and they, in turn, are assumed to lead to increased demand for commercial premises and hence increasing rents and/or reduced vacancies. Falling interest rates are assumed to have opposite causes and effects. Rising or falling fi nancial expenses will thus, over time, coincide with rising or falling rental income. Changes in credit margins may occur regardless of the economic situation and have, of late, mainly been affected by changes in bank regulations.

Changes in market interest rates affect net fi nancial items. How quickly these will change, and by how much, largely depends on the chosen fi xed interest term and the binding period of credit margins. To ensure low and stable net fi nancial items in terms of cash fl ow, Castellum has generally chosen to fi x interest rates for a relatively long period. For the same reason Castellum has chosen to sign mainly long-term credit agreements with agreed spreads with banks. However changes in both of these markets will over time affect net fi nancial items.

The interest coverage ratio is the fi nancial key ratio that describes a company's resistance and risk level regarding changes in net fi nancial items. As shown in the fi gure, Castellum has lower loan-to-value ratio and higher interest coverage ratios than the industry on average.

Castellum's strategy is an interest coverage ratio of at least 200%. For 2011, the interest coverage ratio was 278% (299%). The average fi xed interest term at 31 December, 2011, was 2.7 years (2.6). Margins and fees on long-term credit agreements had an average duration of 3.5 years (2.6).

Financial policy

Financial operations at Castellum are conducted in accordance with the fi nancial policy adopted by the Board. The strategy in the fi nancial policy is as follows:

  • Maintaining a capital structure with a loan-to-value ratio not exceed ing 55% in the long run and an interest coverage ratio of at least 200%.
  • Secure required liquidity and long-term funding.
  • Achieve a low and stable net interest rate within the given risk mandate.

The fi nancial policy outlines mandates and limitations for managing fi nancial risk and overall delegation of responsibilities, as well as how fi nancial risks are to be reported and followed up. The fi nancial risks are followed up and reported quarterly to the Board of Directors. The Board of Directors reviews the fi nancial policy annually.

Organization

All fi nancial risk management is centralized in the parent company. The treasury department's responsibilities include the Group's funding, interest rate risk management, fi nancing for subsidiaries and cash management. The treasury department consists of two persons. The parent company also includes a function that provides accounting and independent control of the fi nancial operations - a back-offi ce and compliance function.

Net fi nancial item

Net fi nancial items were SEKm –660 (–574). The average interest rate level was 4.1% (3.7%). The average effective rate as of 31 December, 2011, was 4.0% (3.9%). The market interest rate for an equivalent portfolio – with consideration taken both to current market interest rate and credit spreads – can be assessed to 4.7% (4.0%). Castellum's interest rate costs consist of market interest rate at the time of the loan, plus the creditor's margin.

Interest bearing liabilities and interest rate derivatives

Castellum's interest bearing debt is mainly made up of short-term loans under long-term credit agreements. Short-term loans allow for great fl exibility regarding the choice of the interest rate base and fi xed interest rate term, while they facilitate amortization payments and repayments without marginal breaking costs or other compensation to the lender. Furthermore, to increase or decrease the amount of outstanding loans in long-term credit agreements means that the amount of interestbearing loans can be minimized at all times. The credit agreements are mainly bilateral credit agreements with Nordic banks. As a complement to these credit agreements, there is a commercial paper program. In those cases where there are outstanding commercial papers, they are fully covered by unutilized long-term credit agreements. After deducting liquidity of SEKm 97 (12), net interest-bearing liabilities totalled SEKm 17,063 (15,769) at December 31, 2011, of which SEKm 2,235 (1,377) refers to outstanding commercial papers. On the same date, Castellum had binding long-term credit agreements with banks totalling SEKm 19,374 (18,062), bond loans totalling SEKm 0 (200), binding short-

Loan maturity structure 31-12-2011

Credit
Long term, SEKm agreements Utilized
1 - 2 years 207 7
2 - 3 years 7 7
3 - 4 years 7,307 4,257
4 - 5 years 4,007 4,007
5 - 10 years 7,846 6,647
Total long-term credit agreements 19,374 14,925
Total short-term credit agreements (0-1 year) 2,655 2,138
Total credit agreements 22,029 17,063
Unutilized credit in long term credit agreements 2,311

Interest rate maturity structure 31-12-2011

Interets rate
Loan derivatives Amount Average
SEKm SEKm SEKm interest rate
0 - 1 year 17,063 – 9,400 7,663 3.7%
1 - 2 year 1,800 1,800 4.0%
2 - 3 year 600 600 3.8%
3 - 4 year 1,250 1,250 4.8%
4 - 5 year 2,450 2,450 4.4%
5 - 10 year 3,300 3,300 4.2%
Total 17,063 17,063 4.0%

Credit margins are distributed in the interval of the underlying loans and interest rate derivatives are accounted for in the earliest time segment in which they can mature.

term credit agreements with banks totalling SEKm 420 (520) and a SEKm 4,000 (4,000) commercial paper program.

Secured interest-bearing liabilities

Long-term credit agreements with banks are secured mainly through the company's properties and by fi nancial covenants in credit agreements. Issued commercial papers and short-term credit agreements with banks such as bank overdraft facilities are unsecured.

Utilized credit facilities secured through mortgage deeds totalled SEKm 14,797 (13,998) at 31 December, 2011, and utilized unsecured credit facilities totalled SEKm 2,266 (1,771). The committed fi nancial covenants have a loan-to-value ratio not exceeding 65% and an interest coverage ratio of at least 150%. There are also general commitments that Castellum should provide the lenders with fi nancial information such as annual reports and interim reports and, in some cases, the right to renegotiate the credit agreements due to a material adverse change in business or discontinued stock exchange listing.

Currency

Castellum has made investments in Denmark, which means that the Group is exposed to a currency risk. A currency translation risk is primarily related to the translation of income statement and balance sheet in foreign exchange into Swedish currency. In accordance with fi nancial policy, between 60-100% of investments in foreign subsidiaries are to be fi nanced in that country's currency. At the end of 2011, 97% of the assets in Denmark were fi nanced in Danish kroner.

Derivatives

Derivatives are a cost effective and fl exible way to manage fi nancial risks such as interest rate risks and currency risks. Castellum uses derivatives to manage both risks. As of 31 December, 2011, the market value of the interest rate and the currency derivative portfolio amounted to SEKm –1,003 (–574). When market interest rates change, the market value accounted for in the balance sheet also changes. The market value in the balance sheet change when market interest rates change, the portfolio's duration is shortened and the exchange rates change. At maturity, the market value of the derivative is dissolved and the change in value over time thus has not affected shareholder's equity.

Interest rate derivatives

Different types of derivatives are used to limit the interest rate risk and achieve the desired interest maturity structure. Through interest-rate derivatives, loans with short duration can be extended without taking loans with fi xed interest rates. According to the accounting standard IAS 39, derivatives are subject to market valuation. Regarding interestrate derivatives, this means that a theoretical surplus or sub value occurs if the stipulated interest rate varies from the current market rate. For Castellum, the change in value is accounted for in the income statement. It is noteworthy that the interest rate derivatives used to achieve an interest rate maturity structure are subject to market valuation – something that normally is not the case for credit margins or loans with fi xed interest rates.

Currency derivatives

Funding in Danish currency can be achieved by borrowing in Danish kroner, as well as by using currency derivatives. The exposure is the same but according to the accounting standard IAS 39 derivatives are subject to market valuation, which means that there is a theoretical surplus or sub value if the stipulated currency rate varies from the current market exchange rate. Here, the effective portion of value change is accounted for in other total net income.

Tax

The Swedish corporate tax rate is 26.3% and is based on the company's total taxable income, which is made up of income before tax adjusted for items according to the current tax legislation.

Castellum's reported income from property management for 2011 amounted to SEKm 1,173 (1,141), while taxable income from property management amounted to SEKm 92 (208). In the absence of tax loss carry forwards, a paid tax of about SEKm 24 would occur, attributable to the income from property management, equivalent to 2% effective tax paid. The taxable income from property management is thereafter completed with tax effects resulting from sales of properties and changes in value and utilization of tax loss carry forwards to reach taxable income for the Group.

Tax depreciations

Investments in real estate can be allocated to different parts - building, land, land improvement and inventory, which among other things affect the size of depreciation. Buildings are depreciated on the basis of the Swedish Tax Authority's specifi ed percentages: 2% for offi ce/retail/ residential, 3% for department store/hotel, 4% for industrial/warehouse, and 5% for farm buildings and industrial buildings with limited purpose. Land is not depreciated. Most types of land improvement are depreciated by 5%, while inventories (accessories designed to directly service the use of the building and the activities therein) are depreciated by 20% or 30%.

Deductible reconstructions

Costs for repairs and maintenance of a building may be deducted immediately. For tax purposes an extended repair concept may be used, i.e. direct deduction is allowed for some types of reconstruction, even if it is a value-adding improvement and has been set up as an asset in the accounts.

Property sales

Property managing companies' holdings of real estate and shares in property managing subsidiaries, are fi xed assets. If the holding company instead is conducting trade with real estate, the assets mentioned above are from a taxation point of view considered current assets.

Taxable income from sales consists of the sales price with deductions for costs and the asset's fi scal written down value. Properties can be sold directly or indirectly through companies, which have different tax consequences. For properties or shares which fi scally speaking represents current assets a profi t is always taxable, while a loss is tax deductible. Profi ts and losses on properties and shares that fi scally speaking represent fi xed assets, however, face different tax consequences. Regarding properties a profi t is always taxable, while a loss is put in a "fold" and can only be netted against profi ts within the Group from direct sales of properties that represents fi xed assets. Profi t on sales of shares which from a taxation point of view are considered fi xed assets is not taxable, while a loss is not tax deductible.

Since the tax exemption on sales of shares, which fi scally speaking represents fi xed assets, was enforced, the trend in the Swedish real estate market is that sales of real estate are done indirectly through companies.

Tax Calculation 2011 Basis Basis
current deferred
SEKm tax tax
Income from property management 1,173
Deductions for tax purposes
depreciations – 636 636
reconstructions – 365 365
Other tax allowances – 80 41
Taxable income from property management 92 1,042
Properties sold 8 – 15
Changes in value on properties 164
Changes in value on interest rate derivatives – 429
Taxable income before tax loss carry forwards – 329 1,191
Tax loss carry forwards, opening balance – 1,406 1,406
Tax loss carry forwards, closing balance 1,772 – 1,772
Taxable income 37 825
Of which 26.3% current/deferred tax – 10 – 217
In accordance with the balance sheet – 14,121 – 3,714
Properties, asset acquisition 304 80
Total – 14,425 – 3,794
Properties – 16,197 – 4,260
Tax loss carry forwards 1,772 466
SEKm Basis Tax
26.3%
Net Deferred Tax Liability 31-12-2011

Changes in value on properties and derivatives

Swedish accounting laws do not allow reporting of properties at fair value in a legal entity, meaning that changes in value of properties is only reported in the consolidated accounts and hence do not affect the taxation.

Some types of fi nancial instruments such as interest rate derivatives may be reported at fair value in a legal entity. For Castellum, changes in value resulting in a negative value on the instrument is a tax deductable item and changes in value up to the acquisition value of the instrument is a taxable income.

Tax loss carry forwards and Group contributions

Tax loss carry forwards are made up of previous years' taxable losses. The losses, which are not limited in time, are carried forward to the following year and are used by netting of future taxable income.

The Castellum Group includes both companies which from a taxation point of view are considered property managing companies and companies which are considered to be property trading companies. In the case when a property trading company is owned by a property managing company there are limitations for the owners to receive group contributions. There is also a "block" for group contributions up to six years following a change in ownership. Since acquisitions of properties are mainly made indirectly through acquisitions of companies new legal entities are regularly added to the Group. In Castellum these blocks for group contributions however are limited.

The tax assessment process

The income tax return for a fi scal year is sent to the tax authority during the spring of the following year and towards the end of the year the notice of assessment is received. The Tax Authority has the right to call for a review of the tax return for two years following the fi scal year. Thereafter the tax authority may assess for arrears only if there is false information for an additional four years, giving that fi rst after six years is the tax return for the fi scal year fi nally assessed. Hence, the fi scal year 2011 will be fi nally assessed in 2018.

The tax authority carried out a tax audit in Castellum in 2009 which was completed without comments. Neither has Castellum any ongoing tax disputes.

Deferred tax in the balance sheet

The accounting regulations demand that deferred tax shall be reported undiscounted based on the difference between an asset's or a debt's book value and its fi scal value. This is in order to refl ect the tax liability or receivable which is realized if the asset or debt is sold directly. The legislation however makes an exception for assets which at the time of acquisition is classifi ed as a asset acquisition, where no deferred tax from the acquisition may be reported.

Castellum has two entries which make up the basis for deferred tax - properties and tax loss carry forwards. All tax loss carry forwards are reported since expected future taxable income may be used to net the tax loss carry forwards. Deferred tax deriving from properties occurs mainly due to increased valuation, tax deductions such as depreciation and deduction of certain reconstructions which are capitalized in the account.

Opportunities and Risks

Opportunities and risks may roughly be divided into two sections – changes in cash flow and changes in value.

Opportunities and risks in the cash flow Rental income

Rental levels as well as vacancies for commercial contracts are mainly depending on the growth in Swedish economy, but are also affected by the amount of new construction. Economic growth is supposed to lead to increased demand for premises and hence decreasing vacancies, with a potential for increasing market rents, which also provide opportunities for new construction. A weaker growth in the growth has an opposite effect. Since the commercial contracts are signed for a certain period of time, a change in the market rents does not give an immediate effect on the rental income. The most common term on a new lease is currently 3-5 years with nine months' notice of termination and an index clause linked to the infl ation. The average remaining duration of leases in Castellum's portfolio is 3.1 years. Castellum's lease portfolio is considered to be in line with market rents. The positive infl ation during the year will however cause an index adjustment upwards of rents of approx. 2% for 2012.

A state of economic recession leads to an increased risk for bankruptcies, which may give an immediate effect on the rental income. The risk for major changes in vacancies increases with few and large tenants. Castellum has approx. 4,600 commercial contracts of which the single largest contract accounts for approx. 1% of total rental income. Castellum's current lease maturity structure, together with the lease portfolio's make up of geography, type of premises, leases sizes and sectors provide a good spread of risk. Vacancies during 2011 amounted to approx. SEKm 371 and make up a potential for possible new leases.

Property costs

Operating costs are largely made up of costs for electricity, garbage disposal, heating and water, where electricity and heating costs have the largest effect on the result. The price of electricity is determined by supply and demand on the open market for electricity. Castellum limits the risk by hedging a certain amount of electricity. Most of the costs are passed on to the tenants, why Castellum's exposure to cost fl uctuation in the short term is relatively limited. Castellum's properties have a good standard and maintenance situation.

Castellum holds around 80 properties by site leasehold. The ground rent for these is currently calculated in such a way that the municipality receives a fair real interest rate, based on the estimated market value of the site. The site leasehold is typically renegotiated with 10 to 20 years intervals. It can not be ruled out that the ground rent levels or the basis for the calculation may change in the future.

The real estate tax is a federal tax based on the properties' tax assessment value and completely dependent on political decisions such as tax rate and tax assessment value, which Castellum cannot control. Also the real estate tax is passed on to the tenants, provided that the premises are not vacant; in such a case the owner of the property has to carry the real estate tax cost.

Lease maturity structure 31-12-2011

Lease size structure 31-12-2011

Distribution of leases by industry

Sensitivity analysis - cash fl ow Effect on income next 12 months

Effect on income, SEKm
+/- 1% (units) Boom Recession
Rental level / Index +30/–30 +
Vacancies +34/–34 +
Property costs –10/+10 0
Interest rate costs –61/+52 +

Interest costs

Interest costs are the single largest cost item for Castellum and consists of the market interest rate and the credit margin the lenders demand in return for their loans. The conditions on the interest rate market may change quickly. The market interest rate is affected by the Riksbank's monetary policy, expectations of economic development both internationally as well as nationally and of unexpected events. In order to limit this infl uence the interest rate maturity structure has been spread over different terms and Castellum signs mainly long term credit agreements with fi xed margins.

There are clauses in the credit agreements, with the effect that lenders shall be compensated for increased costs which might occur due to new or revised laws or regulations. This can lead to higher borrowing costs for Castellum.

Castellum's average fi xed interest term was 2.7 years and margins and fees in long term credit agreements are fi xed with an average duration of 3.5 years.

Taxes

Castellum is affected by political decisions such as changes in the corporate tax rate, real estate tax, the fi scal legislation or interpretations thereof. Future income tax reforms or interpretations of these may have both positive as well as negative effects on Castellum's fi scal position.

Summary of opportunities and risks in cash fl ow

Increasing market interest rates is generally an effect of economic growth and increasing infl ation, which is thought to give higher rental income. This is partly because the demand for premises is thought to increase, leading to reduced vacancies and hence a potential for increasing market rents, and partly because the index clause in the commercial contracts is compensating for the rising infl ation. An economic boom therefore means higher interest costs but also higher rental income, while the opposite relationship is true during a recession. The change in rental income and interest costs does not take place at exactly the same time, why the effect on the result in the short term may occur at different points in time. Economic shocks can occur from time to time and may need shorter or longer adjustment periods, i.e. the time needed to restore a new economic equilibrium, which may cause disturbances in the relation mentioned above.

Opportunities and risks in values The value of the properties

Castellum reports its properties at fair value with changes in value in the income statement. This means that the result in particular but also the fi nancial position is volatile. Assuming a normal credit market, the value of the properties is determined by supply and demand, where the price mainly depends on the properties' expected net operating income and the buyer's required yield. An increasing demand, lower required yields and positive real development in net operating income lead to an upward adjustment in prices, while a weaker demand, higher required yields and negative growth have the opposite effect.

The sensitivity analysis enclosed shows how Castellum's loan to value ratio is affected by a change in value of +/– 10-20%. Property valuations are calculations according to accepted principles and on the basis of

certain assumptions. Consideration should therefore be taken to a value range, typically +/– 5-10% in a functioning market, in order to refl ect the uncertainty that exists in assumptions and calculations made. The example shows how the value may vary depending on changes in net operating income of +/– 5% and changes in the required yield of +/– 0.5%, which together give a value range of –11% to +13%.

Castellum does not have any outstanding rental guarantees. All of Castellum's properties are insured to their full value.

Interest bearing liabilities and fi nancial risk

All property ownership requires a functioning credit market. Castellum's greatest fi nancial risk is not having access to funding. The conditions in the credit market can be changed as for example shown by the international agreement to establish a new regulatory framework for banks. Discussions are ongoing within the EU and at national level to implement rules and reporting obligation to achieve greater transparency in the credit market. Castellum's possibility to receive new credits depends on future regulatory framework.

A low loan to value ratio enables long-term credit agreements, which limits both the risk for not having access to funding and the immediate impact of a changed credit market. Existing credit agreements are regularly renegotiated and new credit agreements are entered into when needed, in order to secure Castellum's capital need. Loans in banks are secured by pledged mortgages and/or a guarantee to maintain certain fi nancial key ratios. Financial covenants issued state a loan to value ratio not exceeding 65% and an interest coverage ratio of at least 150%, which may be compared to the actual outcome on 31 December, 2011 of 51% respectively 278%, showing that there is room for a further decrease in value of SEKm 7,500, corresponding to 22%.

Castellum currently has an average duration of long term credit agreements of 5.1 years and an unutilized volume of long term credit agreements of SEKm 2,311. Counterparty risk may occur if any party cannot meet its obligations. To limit this risk Castellum only works with counterparties with high credit ratings (at least investment grade), and limits the share of credit agreements and derivatives signed with each single counterparty.

In order to manage the interest rate risk in a cost effective way Castellum uses interest rate derivatives. If the agreed interest rate deviates from the market interest rate from time to time, there is a theoretical overvalue or undervalue, which is reported in the income statement. The lesser risk taken in interest payments, the greater risk is taken in the value of the derivatives, since the time factor increases the risk for large fl uctuations in value. An upward parallel adjustment of the discounting interest rate used in valuation of the interest rate derivative portfolio at 31 December, 2011 of +/– 1%, would alter the value of the interest rate derivative portfolio by approx. SEKm +490/– 590.

Deferred tax

In the balance sheet the deferred tax liability is based on that properties are sold today with worst possible taxation outcome, i.e. a direct sale. The effective tax is lower because of both the possibility to sell properties in a tax effi cient manner, and the time factor that causes the tax to be discounted. At present, the actual discounted deferred tax liability is considered to be approx. 5%, giving a value of SEKm 721 which is considerably lower than the SEKm 3,714 accounted for.

Sensitivity analysis - change in value

Properties –20% –10% 0 +10% +20%
Changes in value, SEKm– 6,773 – 3,387 0 +3,387 +6,773
Loan to value ratio 63% 56% 51% 46% 42%

Value range - simplifi ed example

The Castellum Share

Shareholders as at 31-12-2011

Percentage
Shareholders Number of voting
of shares rights/capital
AFA Sjukförsäkrings AB 6,868,714 4.2%
László Szombatfalvy 5,000,000 3.0%
Magdalena Szombatfalvy 4,935,000 3.0%
AMF Pensionsförsäkrings AB 4,260,000 2.6%
Lannebo Småbolag 3,300,000 2.0%
Andra AP-fonden 2,136,496 1.3%
Fjärde AP-fonden 1,911,520 1.2%
Tredje AP-fonden 1,866,063 1.1%
Länsförsäkringar Fastighetsfond 1,587,000 1.0%
KAS Depositary Trust Company 1,483,823 0.9%
AMF Aktiefond Sverige 1,400,000 0.9%
Swedbank Robur Småbolagsfond Sverige 1,365,360 0.8%
Caceis Bank / 18129 1,276,156 0.8%
SEB Sverigefond Småbolag 1,265,200 0.8%
AFA Trygghetsförsäkring AB 1,166,039 0.7%
Livförsäkrings AB Skandia 1,054,554 0.6%
SEB Världenfond 1,038,663 0.6%
Bengt Norman 1,000,000 0.6%
KPA Pensionsförsäkring AB 907,655 0.5%
Handelsbankens Svenska Småbolagsfond 870,000 0.5%
Skandia Fond Småbolag Sverige 826,222 0.5%
Folksam Ömsesidig Livförsäkring 771,413 0.5%
DNB Småbolagsfond 719,876 0.4%
SEB Sverige Småbolag Chans/Risk 612,570 0.4%
Gamla Livförsäkringsaktiebolaget 595,500 0.4%
Handelsbanken Sverigefond Index 582,478 0.4%
SEB Aktiesparfond 564,084 0.3%
SEB Sverigefond 540,500 0.3%
SEB Sverigefond Stora Bolag 501,248 0.3%
Swedish shareholders < 500,000 shares:
45 holders, 100,000-499,999 shares 11,469,541 7.0%
347 holders, 10,000-99,999 shares 8,828,687 5.4%
2,872 holders, 1,000-9,999 shares 7,965,682 4.9%
5,756 holders, 1-999 shares 2,257,654 1.4%
969 shareholders registered abroad 83,072,302 50.7%
Total outstanding shares 164,000,000 100.0%
Repurchased shares 8,006,708
Total registered shares 172,006,708

Shareholders distributed by country 31-12-2011

Shareholders

At the year-end, Castellum had approx. 9,400 shareholders. The amount of shares registered abroad at the year-end was 51%. Shareholders registered abroad can not be broken down in terms of directly held and nominee registered shares except when the shareholder is required to declare substantial share acquisitions. One foreign shareholder has a declared holding over 5%, Stichting Pensioensfonds ABP. Castellum has no direct registered shareholders with holdings exceeding 10%.

Proposed dividend

The Board intends to propose the annual general meeting to decide on a dividend of SEK 3.70 per share, an increase of 3% compared with previous year. The dividend ratio is 52% of income from property management before tax.

If the annual general meeting decides to accept the Board's dividend proposal, of Tuesday March 27, 2012 as the record day for payment of the dividend, the share will be traded including the dividend up to and including the day of the annual general meeting, Thursday March 22, 2012. Payment of the dividend is expected to take place on Friday March 30, 2012.

The dividend falls within Castellum's objective of distributing at least 50% of income from property management, having taken into account investment plans, consolidation needs, liquidity and fi nancial position in general. Unrealized changes in value, positive or negative, are thus not included in the distributable result.

Share capital, number of shares and repurchase

The share capital amounts to SEKm 86, distributed among 172,006,708 A-shares with a par value of SEK 0.50 per share. Each share, except the company's own repurchased shares, entitles the holder to one vote and carries an equal right to a share in Castellum's capital. Changes in the share capital and the number of shares over time are displayed in note 13.

During 2000, Castellum repurchased 8,006,708 of the company's own shares for a total of SEKm 194, equivalent to 4.7% of the total registered number of shares. Since then no repurchases of the company's own shares have been made. As repurchasing is a good method of adapting the capital structure to the capital requirements from time to time, the Board's will propose the AGM to decide on extending the mandate to repurchase shares until the next AGM. This mandate provides the facility to repurchase or transfer shares.

The number of outstanding shares, i.e. the number of registered shares less the number of repurchased shares, totals 164,000,000.

The Castellum share is listed on NASDAQ OMX Stockholm AB Large Cap.

Market capitalization and liquidity

Castellum's market capitalization, i.e. the value of all outstanding shares in Castellum, amounted to SEK 14 billion (15) as per December 31, 2011.

During 2011, a total of 150 million (152) shares were traded, equivalent to an average of 595,000 shares per day (602,000), corresponding to an annual turnover rate of 92% (93%).

The total market capitalization of Swedish real estate companies operating solely in this fi eld was nearly SEK 100 billion at the year-end, equivalent to near 3% of the total market capitalization of listed Swedish companies totalling approx. SEK 3.600 billion.

Listed Real Estate Companies

Growth, yield and financial risk

The Castellum share price at the year-end was SEK 85.30 (91.55). During 2011, the total yield of the share, including dividend of SEK 3.60, was – 3% (33%). Growth, yield and fi nancial risk are shown below for both the present year as well as the average for three and ten years.

Investor relations

Castellum's objective is to continuously provide frequent, open and fair reporting on the company's real estate portfolio, results and fi nancial position to shareholders, the capital market, the media and other interested parties, yet without disclosing any individual business relations.

Investor relations are based above all on quarterly fi nancial reports, press releases on signifi cant commercial events and presentations of Castellum.

During the year, a large number of presentations of Castellum were held at meetings with investors and analysts, and at investment meetings both in Sweden and abroad. The large share of foreign shareholders means that there are extensive contacts with foreign investors.

Some 20 Swedish and foreign stockmarket analysts track the development of both Castellum and the Swedish real estate sector.

All press releases, quarterly reports and annual reports, both in Swedish and English, are available immediately after publication on www.castellum.se.

On the website, it is possible to subscribe to Castellum's press releases and quarterly reports. Other information about Castellum, such as the real estate portfolio and continuous updates of the Castellum share price are also disclosed on the website.

2011 3 years
average/year
10 years
average/year
Total yield of the share (incl. dividend)
Castellum – 3% 18% 17%
NASDAQ OMX Stockholm (SIX Return) – 14% 19% 6%
Real estate index Swedish (EPRA) – 13% 17% 15%
Real estate index Europe (EPRA) – 9% 13% 5%
Growth
Income from property management SEK/share 3% 6% 8%
Net income for the year after tax SEK/share – 64% neg. – 3%
Long term net asset value SEK/share 5% 5% 7%
Net asset value SEK/share 2% 5% 6%
Dividend SEK/share 3% 6% 9%
Real estate portfolio SEK/share 7% 5% 7%
Change in property value, unweighted 1% 0% 1%
Yield
Return on net asset value 6.4% 9.8% 10.5%
Return on total capital 6.2% 6.0% 7.2%
Financial risk
Interest coverage ratio 278% 295% 286%
Loan to value ratio 51% 51% 48%
Press releases
04-01-2011
11-01-2011
Castellum invests SEKm 177
The election committees proposal regarding the board of
directors etc of Castellum AB
25-01-2011 Year-end Report 2011: Improved rental and real estate market
and a dividend of SEK 3.60 per share
04-02-2011 The Swedish version of Castellums annual report 2010 is now
available on www.castellum.se
16-02-2011 Summons to the Annual General Meeting of shareholders in
Castellum AB
15-03-2011 Castellum invests SEKm 287 and sells for SEKm 74
24-03-2011 Annual General Meeting in Castellum AB
06-04-2011 Castellum has made net investements of SEKm 268
19-04-2011 First quarter 2011: Increased investment pace and improved
net leasing
01-07-2011 Castellum invests SEKm 179
12-07-2011 First half-year 2011: Continued improvement of income from
property management and net leasing
18-10-2011 Interim report January-September 2011: Stable cash-fl ow -
income from property management SEKm 889
16-11-2011 Castellum invests half a billion SEK
24-11-2011 Castellum invests SEKm 327
22-12-2011 Castellum invests SEKm 174
13-01-2012 The election committee's proposal regarding the board of
directors etc of Castellum AB (publ)
24-01-2012 Year-end Report 2011: Increased dividend to SEK 3.70 per share

The share's earnings multiple

Net asset value SEKm SEK/
share
Equity according to the balance sheet 11,203 68
Reversed
Interest rate derivatives acc to balance sheet 1,003 6
Deferred tax according to balance sheet 3,714 23
Long term net asset value (EPRA NAV) 15,920 97
Deduction
Interest rate derivatives as above – 1,003 – 6
Estimated real liability, deferred tax 5% – 721 – 4
Actual net asset value (EPRA NNNAV) 14,196 87

Valuation - share price related key figures

Earnings

Post-tax inome from property management relating to income from property management (EPRA EPS) amounted to SEK 7.01 (6.62) per share at the year-end. This results in a share price yield of 8.2% (7.2%). Net income after tax amounted to SEK 4.34 per share (11.98), which from the share price gives a yield of 5.1% (13.1%).

Net asset value

When assets and liabilities are valued at fair value the net asset value can be calculated using shareholders' equity in the balance sheet. However, consideration should be taken to that the effective tax is lower than the reported nominal tax rate, in part due to the possibility to sell properties in a tax effi cient way, and in part due to the time factor for which the tax should be discounted.

The long term net asset value (EPRA NAV) can be calculated to SEK 97 per share (92). The share price at the end of the year was thus 88% (99%) of the long term net asset value.

Dividend Yield

The proposed dividend of SEK 3.70 (3.60) corresponds to a yield of 4.3% (3.9%) based on the share price at the end of the year.

The share's dividend yield

Share price/net asset value

EPRA

EPRA, European Public Real Estate Association, is an association for listed real estate owners and invstors in Europe, which among other things, sets standards for financial reporting. A part of such standards are key ratios EPRA EPS (Earnings Per Share), EPRA NAV (Net Asset Value) and EPRA NNNAV (Triple Net Asset Value).

Ten year summary

2011 2010 2009 2008 2007 2006 2005 2004 2003 2002
Share price, SEK
last paid during the last day for trading 85.30 91.55 72.50 60.75 67.25 91.25 71.50 59.50 42.50 30.50
highest paid during the year 97.50 91.75 73.75 80.00 107.00 95.50 85.00 60.75 45.13 34.25
lowest paid during the year 65.25 58.50 42.80 41.40 62.00 56.50 55.00 39.38 28.25 24.63
average (high/low per day) 88.69 75.70 58.57 63.42 87.55 78.54 68.29 47.32 33.86 29.78
Dividend, SEK (for 2011 proposed) 3.70 3.60 3.50 3.15 3.00 2.85 2.62 2.38 2.13 1.88
The share's dividend yield 4.3% 3.9% 4.8% 5.2% 4.5% 3.1% 3.7% 4.0% 5.0% 6.1%
Dividend ratio 52% 52% 51% 53% 53% 53% 52% 53% 52% 50%
Total yield, the Castellum share – 3.1% 32.6% 27.4% – 5.9% – 24.2% 31.7% 25.0% 46.7% 48.5% 18.8%
Real Estate Index Sweden (EPRA) – 13.0% 48.5% 24.0% – 21.4% – 18.5% 35.8% 40.2% 48.8% 32.5% 3.2%
Real Estate Index Europe (EPRA) – 9.2% 19.8% 33.7% – 48.8% – 32.2% 49.4% 25.8% 41.7% 21.4% 2.3%
NASDAQ OMX Stockholm (SIX Return) – 13.5% 26.7% 52.5% – 39.0% – 2.6% 28.1% 36.3% 20.8% 34.2% –35.9%
Number of shares, thousand
average 164,000 164,000 164,000 164,000 164,000 164,000 164,000 164,000 164,000 164,000
outstanding 164,000 164,000 164,000 164,000 164,000 164,000 164,000 164,000 164,000 164,000
registered 172,008 172,008 172,008 172,008 172,008 172,008 172,008 172,008 172,008 172,008
Number of shareholders 9,400 10,000 8,900 7,300 7,300 7,700 7,900 8,900 8,800 8,300
Percentage of shareholders registered abroad 51% 46% 46% 47% 49% 53% 46% 37% 33% 31%
Market capitalization, SEKm 13,989 15,014 11,890 9,963 11,029 14,965 11,726 9,758 6,970 5,002
Turnover, thousand shares per year 150,482 152,186 191,129 218,304 207,442 107,710 93,268 86,289 92,067 107,587
Turnover rate per year 92% 93% 117% 133% 126% 66% 57% 53% 56% 66%
Income from property mgmt per share, SEK 7.15 6.96 6.89 5.93 5.63 5.38 5.00 4.52 4.07 3.77
Share price/pre tax income from property
management per share 11.9 13.2 10.50 10.2 11.9 17.0 14.3 13.2 10.4 8.1
Income from prop management after
tax (EPRA EPS), SEK
7.01 6.62 6.93 5.85 5.50 5.09 4.49 4.15 3.82 3.52
Share price/Income from property
management after tax per share 12.2 13.8 10.5 10.4 12.2 17.9 15.9 14.3 11.1 8.7
Long term net asset value per share
(EPRA NAV) SEK
97 92 82 84 88 79 69 61 55 53
Share price/Long-term net asset value per share 88% 99% 88% 72% 76% 116% 104% 98% 77% 58%
Net asset value per share (EPRA NNNAV), SEK 87 85 73 75 85 76 65 57 52 50
Share price/Net asset value per share 98% 108% 99% 81% 79% 120% 110% 104% 82% 61%

The Castellum share's price trend and turnover since IPO may 23, 1997 until December 31, 2011

Corporate Governance Report

Corporate governance covers the different means of decision making by which the shareholders directly and indirectly control the company. A high level of transparency in the information to shareholders and the capital market helps the decision making process run effi ciently and provide different owners good insight into the operations of the company. Corporate governance has evolved through laws, recommendations, the so called "code", and through self regulation.

Articles of association

The name of the company is Castellum Aktiebolag and the company is a public limited company. The registered offi ce of the Board is in Gothenburg.

The objective of the company's activities is to acquire, administer, develop and sell real estate and securities – directly or indirectly through wholly or partially owned companies – and to carry out other activities compatible with these. Changes in Castellum's articles of association are made in accordance with the regulations in the Companies Act. The articles of association, which also includes information on share capital, number of board members and auditors as well as rules for summons and agenda for the annual general meeting is available as a whole on the company's web site.

Annual General Meeting 2011

According to the Companies Act the annual general meeting is the highest decision making forum in a public limited company. The annual general meeting elects the Board of Directors and the company's auditors as well as makes decisions on changes in the articles of association and on chang es in the share capital.

The latest AGM was held on March 24, 2011 in RunAn, Chalmers Kårhus in Gothenburg. At the AGM approx. 369 shareholders were represented, representing 36.1% of the total number of shares and votes.

The AGM adopted the fi nancial reports for 2010 and discharged the Board of Directors and the Chief Executive Offi cer from liability regard ing the operations for 2010.

Dividend to the shareholders was decided according to the Board's proposal of SEK 3.60 per share.

The AGM decided to change the Articles of Association regarding notice procedures and auditors' term of offi ce in accordance with amended legislation,

The AGM decided that the Board of Directors shall consist of six board members with no deputies and that the Board shall receive a fi xed remuneration of SEK 1,700,000 of which SEK 500,000 to the Chairman of the Board and SEK 240,000 to each of the remaining board members. The renumeration includes work on the committees. To the Board of Directors Jan Kvarnström, Marianne Dicander Alexandersson, Per Berggren, Ulla-Britt Fräjdin-Hellqvist, Christer Jacobson and Johan Skoglund were re-elected. The AGM appointed Jan Kvarnström as Chairman of the Board.

The AGM decided on re-election of auditor Carl Lindgren, new election of auditor Magnus Fredmer and re-election of deputy auditor Conny Lysér and that fee to the auditors shall, during the term of offi ce, should be based on approved account,

The AGM decided to approve the Board's proposed guidelines for remuneration to the executive management.

The AGM also decided to authorize the Board – in order to adjust the company's capital structure and be able to transfer own shares as a payment or fi nancing of real property investments – to resolve on acquisition and transfer of own shares.

Minutes of the annual general meeting held on March 24 2011 are available on the company's web site.

Share capital

The share capital amounts to SEK 86,003,354, distributed among 172,006,708 shares with a par value of SEK 0.50. Each share, except the company's own repurchased shares of 8,006,708, entitles the holder to one vote and carries an equal right to a share in Castellum's capital. Castellum has no directly registered shareholder owning more than 10%.

Board of Directors

According to the articles of association, Castellum's Board shall consist of no less than four and no more than eight members. Board members are elected at the annual general meeting for the time until the end of the fi rst annual general meeting held after the year the board member was elected. During 2011, the Board was made up of six regular members. The Board works according to a set of procedural rules containing instructions on the allocation of work between the Board and the CEO. No board member is entitled to remuneration if leaving the assignment.

New board members receive an introduction of the company and its operations and take the stock exchange's training program according to the agreement with the stock exchange. The Board receives regularly information of regulatory changes and issues concerning the operations and board responsibilities for a listed company.

For Board decisions the rules of the Companies Act applies, stating that at least half of the board members present and more than one third of the total number of board members

must vote in order for a decision to be made. On equal count the Chairman has the deciding vote.

The Board of Directors responsibility

The Board appoints the company's Chief Executive Offi cer and sets remuneration and other terms of employment benefi ts for the CEO. According to the Swedish Companies Act and the Board of Directors' rules of procedure the Board is responsible for outlining overall, longterm strategies and objectives, budgets and business plans, review and establish the accounts, as well as making decisions on issues regarding investments and signifi cant changes in Castellum's organization and operations.

The Board of Directors' rules of procedure

The Board of Directors' rules of procedure is set annually. The rules of procedure describes the work of the Board and the distribution of responsibility between the Board and the Chief Executive Offi cer. The rules of procedure also states topics which should be dealt with at each board meeting and instructions regarding the fi nancial reporting to the Board of Directors.

The rules of procedure also prescribes that the Board shall have an audit committee and a remuneration committee made up of all members of the Board who are not employed by the company. The Chairman of the committees shall be the Chairman of the Board of Directors.

The Chairman of the Board of Directors

The Chairman of the Board of Directors is responsible for making sure that the members of the Board regularly receive information needed from the Chief Executive Offi cer in order to follow up on company's fi nancial position, results, liquidity, fi nancial planning and development. The Chairman of the Board of Directors is also obliged to fulfi l decisions made by the Annual General Meeting regarding establishing an Election Committee and to take part in the work of the committee.

The Board's year - issues besides current state of operations, prospects, investments, sales och fi nancing

The Board of Directors' activities during 2011

During 2011, Castellum's Board has held ten meetings of which one was a board meeting following election. According to the prevailing procedural rules, the Board must hold at least seven scheduled board meetings each calendar year, of which one is a board meeting following election.

Board meetings are held in connection with the publication of the company's reports, the year-end, proposed appropriation of profi ts ans issues relating to the AGM are being dealt with in January, interim accounts in April, July and October, strategy in May and the business plan for the next year at the meeting held in December.

At each of the scheduled board meetings, matters of signifi cance for the company, such as investments and sales of properties as well as funding are covered. Furthermore, the Board is informed about the current state of operations, the rental and real estate markets as well as the credit and stock markets. The regular matters dealt with by the Board during 2011 included the business plan, company-wide policies, overall strategies, the procedural rules for the Board, the capital structure and funding needs, and the company's insurance situation.

The Board has during 2011 made an external evaluation of its work. The evaluation has been handed over to the Election Committee and the Board for discussion. The evaluation covers topics such as working climate, working procedures in the businessprocess, crisis management, followup and control systems, moral, ethics and communication.

No other compensation beside the remuneration has been paid.

Remuneration Committee

The Remuneration Committee has, in relation to the Board, a preparatory function in matters of remuneration principles, remuneration and other employment terms. The Remuneration Committee shall monitor and evaluate the application of the guidelines for compensation, remuneration structures

and levels of remuneration of senior executives that the Annual General Meeting decided on, as well as prepare proposals for new guidelines on remuneration policies and other terms of employment.

Decisions are made by the Remuneration Committee regarding the outcome during the current incentive program. The Committee shall monitor and evaluate ongoing and ended incentive plans and prepare proposals for new incentive program for the AGM. Further, drawing up proposals for the Board's accounting of the remuneration committee's evaluation of variable remuneration, the application of guidelines and compensation structures and levels. The evaluation shall be presented on the company's website. The Remuneration Committee shall annually evaluate the work of the Chief Executive Offi cer and, where appropriate, deal with issues concerning appointing CEO.

The Remuneration Committee shall meet at least twice a year. During 2011, the Committee has held three meetings.

Audit Committee

The Audit Committee has, in relation to the Board of Management, a preparatory function in matters of auditing and fi nancial reporting. The Audit Committee's role is to monitor the company's fi nancial reporting and the effectiveness of the internal controls, internal audit and risk management, keep informed about the audit of fi nancial statements and meeting regularly with the auditors to obtain information on auditing and the company's risks. The Audit committee shall review and monitor the auditor's impartiality and independence, and evaluate the audit work and inform the Nomination Committee of the outcome of the evaluation. The Audit Committee shall also assist the committee in preparing proposals for auditors and compensation to them.

The Audit Committee shall meet at least three times a year, of which the auditors must attend at least twice. At one of those times when the audit committee meets with the auditors, no one from the corporate management shall be present. In 2011, the committee met on three occasions.

Board of Directors, number of meetings and attendance during 2011 in Castellum AB

Attendance of the total number of meetings
Audit Remuneration Remuneration
Name Elected/resigned Independent Board meetings Committee Committee SEK thousand
Jan Kvarnström 1994 No* 10/10 3/3 3/3 500
Per Berggren 2007 Yes 10/10 3/3 3/3 240
Marianne Dicander Alexandersson 2005 Yes 9/10 3/3 3/3 240
Ulla-Britt Fräjdin-Hellqvist 2003 Yes 10/10 3/3 3/3 240
Christer Jacobson 2006 Yes 10/10 3/3 3/3 240
Johan Skoglund 2010 Yes 10/10 3/3 3/3 240
* As Jan Kvarnström has been a member of the Board of Directors in Castellum since 1994 he is considered to be dependent.

Board of Directors

Johan Ljungberg, Per Berggren, Johan Skoglund, Jan Kvarnström, Marianne Dicander Alexandersson, Ulla-Britt Fräjdin-Hellqvist, Christer Jacobson

Jan Kvarnström, Chairman of the Board

Born 1948, Master of Business Administration and Economics and MBA. Business-owner, von Deska GmbH and Kvarnström & Kvarnström.

Has been CEO of Securum AB, Esselte AB and Dresdner Bank AG and various executive positions in the Bonnier-group and PK-banken (now Nordea).

Other assignments: Chairman of the Board of Collector AB and board member in companies in the Genworth Financial Group. Shareholdings: 36,620

Per Berggren, Board member

Born 1959, Master of Science and economic education from Stockholm University. CEO of Hemsö Fastighets AB.

Previously CEO of Jernhusen AB, division manager in Fabege AB, CEO of Drott Kontor AB and property manager in Skanska Fastigheter Stockholm AB. Shareholdings: 2,500

Marianne Dicander Alexandersson, Board member

Born 1959, Master of Science. CEO of Sjätte AP-fonden.

Deputy CEO of Apoteket AB. Previous positions within Kronans Droghandel, Volvo, ICI, Pharmacia and most recently as CEO Apoteket AB.

Other assignments: Director of Chalmers University of Technology and Mölnlycke Healthcare AB. Shareholdings: 3,030

Ulla-Britt Fräjdin-Hellqvist, Board member

Born 1954, Master of Science. Business-owner, Fräjdin & Hellqvist AB.

Previous executive positions within Volvo Personvagnar and Head of Department in Confederation of Swedish Enterprise. Other assignments: Chairman of the Board in Kongberg Automotive ASA, SinterCast AB and Stiftelsen för Strategisk Forskning. Boardmember of Data Respons ASA, Rymdbolaget, Fouriertransform, Stockholm Environment Institute, Tällberg Foundation and e-man. Shareholdings: 800

Christer Jacobson, Board member

Born 1946, Master of Business Administration and Economics DHS. Business-owner, Bergsrådet Kapital AB.

Previously stock commen-tator and market manager at Affärsvärlden and Head of Analysis and CEO of the Alfred Berg group. Other assignements: Director in Viscogel AB and Max Matthiessen Värdepapper AB. Shareholdings: 40,000

Johan Skoglund, Board member

Born 1962, Master of Science KTH and the program of Master of Science Handelshögskolan, Stockholm. CEO JM.

Has experience since 1986 from JM AB in varoius positions. Other assignments: Boardmember of Sveriges Byggindustrier and Mentor Sverige. Shareholdings: 1,000

Johan Ljungberg, Secretary to the Board

Born 1974. Secretary to the Board since 2008. Lawyer, Mannheimer Swartling Advokatbyrå. Shareholdings: 0

The information above refers to the situation at the end of January 2012. Shareholdings include own holdings and those of spouse, minors or children living at home and associated companies and holdings through capital assurance.

Carl Lindgren Born 1958 Company's auditor since 2007

Audit

Castellum's auditors are elected by the AGM for a period of four years. The present period began in 2011 and the next election will therefore take place at the AGM in 2015. The company's auditors are Carl Lindgren, working at KPMG, Magnus Fredmer, working at Ernst & Young and deputy auditor Conny Lysér, working at KPMG. All of them are

Remuneration to auditors

authorized public accountants.

Remuneration to auditors during the year was SEK 4,583,000 (4,379,000) of which SEK 2,881,000 (2,682,000) related to auditing assignments, SEK 103,000 (287,000) audit in addition to the auditing assignment and SEK 1,599,000 (1,410,000) to tax consultation. The corresponding amounts for the parent company were SEK 1,084,000 (1,136,000) and SEK 864,000 (795,000) related to the auditing assignment and SEK 220,000 (341,000) tax consultation. Of the group's total remuneration of SEK 4,583,000 (4,397,000), SEK 4,184,000 (4,103,000) refer to KPMG and the remainder to Ernst & Young.

Election Committee

The Annual General Meeting 2011 decided that an Election Committee should be appointed for the AGM 2012 in order to present proposals for the number of members of the Board of Directors, election of members of the Board of Directors, chairman of the Board of Directors, remuneration to members of the Board of Directors and election of auditors and their remuneration.

The Election Committee is appointed according to the AGM's decision that the Election Committee should be established by the Chairman contacting the three largest shareholders at the end of the third quarter in order for them to each appoint one member to the Election Committee. The appointed members, together with the Chairman of the Board of Directors as convener, should constitute the Election Committee. The Election Committee would appoints chairman amongst its members.

The Election Committee includes: Maj-Charlotte Wallin representing AFA Försäkring, Rutger van der Lubbe representing Stichting Pensioenfonds ABP, Lars-Åke Bokenberger representing AMF Pension, and the Chairman of the Board Jan Kvarnström. Maj-Charlotte Wallin is the chairman of the Election Committee.

The Election Committee has held three meetings with minutes where all the issues the Election Committee are obliged to address according to the Swedish Code for corporate governance has been dealed with.

The Election Committee has decided to propose re-election of the board members Mr. Per Berggren, Mrs. Marianne Dicander Alexandersson, Mrs. Ulla-Britt Fräjdin-Hellqvist, Mr. Christer Jacobson and Mr. Johan Skoglund. Mr. Jan Kvarnström, who has been chairman of the board since 1994, has declined re-election. In addition to this Mrs. Charlotte Strömberg and Mr. Jan Åke Jonsson are proposed to be elected as members of the board of directors. Mrs. Charlotte Strömberg is proposed to be elected as new chairman of the board of directors. The proposed Board of Directors is considered to possess the versatility and competence, experience and background required with respect to Castellum's business, phase in the deve lopment and other circumstances.

In order to be able to judge the proposed board member's independency in relation to Castellum and its executive management as well as to the larger shareholders in Castellum, the Election Committee has gathered information on the proposed members of the Board of Directors.

Remuneration to the Board of Directors is proposed to SEK 510,000 to the Chairman and SEK 245,000 for each of the remaining board

since 2011

Company's auditor

Magnus Fredmer-Born 1964

Conny Lysér Born 1962 Company's deputy auditor since 2003

members, SEK 1,980,000 in total. Finally, the Election Committee has informed Castellum about the work of the Election Committee and which proposals the Election Committee has decided to put forward.

The annual general meeting 2012

For the AGM on March 22, 2012 the Board of Directors proposes:

  • a dividend of SEK 3.70 per share and March 27, 2012 as record day,
  • guidelines for remuneration to members of the executive management,
  • a renewed mandate for the Board to decide on purchase or transfer of the company's own shares.

The election committee proposes for the AGM;

  • re-election of the present board members Mr. Per Berggren, Mrs. Marianne Dicander Alexandersson, Mrs. Ulla-Britt Fräjdin-Hellqvist, Mr. Christer Jacobson and Mr. Johan Skoglund, as members of the board of directors. Mr. Jan Kvarnström, who has been chairman of the board since 1994, has declined re-election. In addition to this Mrs. Charlotte Strömberg and Mr. Jan Åke Jonsson are proposed to be elected as members of the board of directors. Mrs. Charlotte Strömberg is proposed to be elected as new chairman of the board of directors,
  • that remuneration to the Board of Directors should be SEK 1,980,000 out of which SEK 510,000 should be allocated to the Chairman of the Board and SEK 245,000 to each one of the remaining members of the Board of Directors. Compared with last year, the proposal entails an increase of the total remuneration with SEK 280,000 since the board of directors is increased with one member and the individual board remuneration is increased with approx. 2%. The remuneration include work on the committees,
  • for AGM to decide on appointing an election committee for the AGM 2013 and for the Chairman to contact the three largest registered or in an other way known shareholders at the end of the third quarter 2012 and invite them to each appoint one member to the election committee, and that the three appointed members together with the Chairman of the Board of Directors shall constitute the election committee. The election committee will appoint a chairman amongst its members.

Swedish code for corporate governance

Castellum applies the code which purpose is to create good preconditions for practicing the role of an active and responsible ownership. The code is meant to make up one step in the self-regulation of the Swedish business environment. It is based upon the principle comply or explain, meaning that all rules must not always be followed and there is no crime in deviating from one or more particular rules of the code if there are motives and explanations. Swedish code for corporate governance is conducted by the Swedish Corporate Governance Board and is found on www.bolagsstyrning.se.

Castellum deviates from the paragraph, "making the members of the Election Committee public", which according to the code shall be made six month prior to the AGM. The AGM 2011 decided, according to previous practice, that an Election Committee should be established at the end of the third quarter, and that the names of the members of the Election Committee should be published in the company's third interim report for the year. According to this composition of the Election Committee was published approximately fi ve months prior to the AGM.

Internal control

According to the Swedish Companies Act and Swedish code for corporate governance the Board of Directors is responsible for the internal control. This report has been drawn up in accordance with the Swedish Annual Accounts Act and the code for corporate governance and is hence limited to internal control regarding the fi nancial reporting.

The internal control in Castellum follows an established framework, Internal Control – Integrated Framework, "COSO", comprising the following fi ve components: control environment, risk assessment, control activities, information and communication, and monitoring.

Control environment

The basis for the internal control regarding the fi nancial reporting is made up of the control environment, which consists of different parts that together form the culture and values Castellum is managed from. The fundamentals for Castellum's internal control is the decentralized small-scale organization with over 600 properties, as well as cost centres, which are managed by six subsidiaries, each with approx. 30-40 employees. The decision making processes, authorizations and responsibilities which have been drawn up and communicated in documents such as the Board of Directors' rules of procedure, rules for decision making, rules for authorization, accounting and reporting manuals, internal policies and manuals are also important for the internal control. Documents in use are updated regularly to changes in legislation, accounting standards or listing requirements etc.

Risk assessment

In Castellum risk management is built into the processes and different methods are used to evaluate and limit risks and to secure that the risks Castellum is exposed to are managed in accordance with set polices and guidelines. In accordance with the rules of procedure, the Board of Directors, also the audit committee, reviews the internal control once a year. Identifi ed risks are assessed and measures are set to reduce these risks. The important risks Castellum has identifi ed in the fi nancial reporting are errors in the accounting and valuation of properties, interest bearing liabilities, taxes and VAT, as well as the risk of fraud, loss or embezzlement of assets.

Control activities

The risks identifi ed regarding the fi nancial reporting are taken care of by the company's structure for control resulting in a number of control measures. The control measures aim to prevent, discover and correct errors and deviations and comprise analytical reviews on many levels in the organization and comparisons of income statement items, reconciliation of accounts, follow-up and reconciliation of board decisions and policies set by the board, authorization and reporting of business transactions, structure for proxy and authorization, authorized signatory, compliance offi cer function, group-wide defi nitions, templates, tools for reporting as well as accounting and valuation principles.

Castellum's subsidiaries have their own fi nancial functions which take part in the planning and follow-up of their units' fi nancial results. Their regular analysis of their own units' fi nancial reporting are together with the analysis made at group level an important part of the internal control in order to ensure that the fi nancial reporting do not contain any signifi cant errors.

Information and communication

Castellum has ways for information and communication that aim to ensure an effective and correct distribution of information regarding the fi nancial reporting. This demands that all parts of the operation communicate and share relevant and important information. Policies and guidelines regarding the fi nancial reporting as well as updates and changes are made available and aware to the personnel concerned. The executive management as well as the Board of Directors regularly receive fi nancial information about the subsidiaries with comments on fi nancial results and risks. The Board of Directors also receives additional information regarding risk management, internal control and fi nancial reporting from the auditors through the audit committee. In order to ensure that the external distribution of information is correct and complete there are both a policy for communicating with the stock market and an information security policy.

Monitoring

Regular follow-ups take place on many levels in the group, on both property level and subsidiary level as well as group level. The Board of Directors, which also makes up the audit committee, regularly evaluates the information provided by the company management and the auditors. The company's auditors also report in person directly to the audit committee at least twice a year of their observations from the audit and their assessment of the internal control. In addition the audit committee makes an annual review of the risk assessments and the decided measures. The audit committee's and the Board of Directors' monitoring are of particular importance for the development of the internal control and for ensuring that measures are taken for possible shortcomings and suggestions that emerge.

The need for internal audits

Castellum has a small scale organization with approx. 30-40 employees in each company which together manages over 600 cost centres. All property management are run by the subsidiaries while fi nancial management is taken care of by the parent company's treasury department, meaning that Castellum AB is not a profi t centre. This gives the fi nancial function of the parent company the role of a controlling function for the subsidiaries and a compliance offi cer function for the treasury department. In all this provides for the assessment that there is no need for a special unit for internal audits.

Executive Group Management

The executive group management includes the Chief Executive Offi cer, the Deputy Chief Executive Offi cer with responsibility for business development, the Financial and Finance Directors of Castellum AB and the six Managing Directors of the subsidiaries. Each member of the executive group management has their own area of responsibility and at the meetings mostly issues of overall operations are covered. The executive management has had 10 meetings in 2011.

The Chief Executive Offi cer and the Deputy Chief Executive Offi cer together with Managing Director of each subsidiary is the Board in each local subsidiary.

The Chief Executive Offi cer

The Chief Executive Offi cer is responsible for the company's day-to-day operations and for leading the operations according to the guidelines and directives submitted by the Board of Directors and for providing the Board with information and necessary basis for decision making. The Chief Executive Offi cer also reports at the Board meetings and shall make sure that members of the Board regularly receive the information needed in order to follow the company's and the group's fi nancial position, results, liquidity, and development.

Guidelines for remuneration for Senior Executives

The AGM 2011 decided on the following guidelines for remuneration for senior executives:

Castellum shall uphold the remuneration levels and terms of employment required in order to recruit and maintain a good management with competence and capacity to achieve set objectives. A fi xed salary will be paid for work performed in a satisfactory manner. In addition, fl exible remunerations under an incentive plan may also be offered. Such fl exible remuneration shall aim to promote long-term value creation within The Group. Flexible remuneration, which generally can not exceed the fi xed salary is determined by how far in advance its objectives for growth in property management earnings per share and share price development are achieved, and how soft factors such as customer and employee satisfaction are developed. Flexible remuneration is paid as non pensionable salary. Executives who receive fl exibel remuneration is committed to acquire Castellum-shares for at least half the amount of fl exible remuneration after tax.

The pension terms of the executive management shall be set according to general market practice and shall be based on pension plans with fi xed payments.

Such period of notice shall, upon termination by the Company not exceeding 24 months for the Cheif Executive Offi cer and 12 months for other executives, with the obligation to work the fi rst six months. During the notice period full salary and other benefi ts is paid, less pay and compensation received from other employment.

Castellum has followed the guidelines decided by the AGM 2011.

The proposed guidelines for remuneration for senior executives which will be put forward at the AGM on March 22, 2012 are on principle unchanged compared to those put forward at the AGM in 2011.

For further information regarding remuneration for the management

Executive Group Management

Claes Junefelt, Gunnar Östenson, Anette Asklin, Christer Sundberg, Tage Christoffersson, Ulrika Danielsson, Håkan Hellström, Henrik Saxborn, Anders Nilsson, Claes Larsson

Håkan Hellström

Chief Executive Offi cer, Castellum AB

Born 1956, Master of Business Administration and Economics. Employed since 1994 as Financial and Finance Director. CEO since 2006. Has previously worked as Authorized Public Accountant. Other assignments: Member of the Board of West Sweden Chamber of Commerce and Industry.

Shareholdings: 126,300

Henrik Saxborn

Deputy Chief Executive Offi cer, Castellum AB, with responsibility for business development

Born 1964, Master of Science. Previous experience from management and acquisitions of properties. Employed since 2006. Shareholdings: 23,800

Anette Asklin

Financial Director, Castellum AB

Born 1961, Master of Business Administration and Economics. More than 20 years experience from bank and fi nance. Employed since 2000 and Financial Director since 2006.

Shareholdings: 31,010

Tage Christoffersson

Managing Director, Eklandia Fastighets AB

Born 1952, upper secondary schooling and real estate/economy at KTH. Has been working in the real estate business since 1976. Employed since 1994 and Managing Director of Eklandia since 1995. Shareholdings: 54,000

Ulrika Danielsson

Finance Director, Castellum AB

Born 1972, Master of Business Administration and Economics. Experience within the fi nancial and controlling function. Employed since 1998 and Finance Director since 2006. Shareholdings: 8,100

Claes Junefelt

Managing Director, Fastighets AB Corallen

Born 1960, Master of Science. More than 15 years experience from building construction as team manager/district manager. Employed and Managing Director of Corallen since 2005. Shareholdings: 12,210

Claes Larsson

Managing Director, Aspholmen Fastigheter AB

Born 1957, Master of Science. More than 10 years experience from building construction as team manager/district manager. Employed and Managing Director of Aspholmen since 2002. Shareholdings: 24,200

Anders Nilsson

Managing Director, Fastighets AB Brostaden

Born 1967, Master of Science. More than 15 years experience from the real estate business. Employed since 1993 and Managing Director of Brostaden since 2006.

Shareholdings: 10,534

Christer Sundberg

Managing Director, Harry Sjögren AB

Born 1955, Master of Science. More than 25 years experience from banks and real estate companies. Employed and Managing Director of Harry Sjögren AB since 1993.

Shareholdings: 49,225

Gunnar Östenson

Managing Director, Fastighets AB Briggen

Born 1956, Master of Business Administration and Economics. Previous experience from real estate management and the construction industry. Employed and Managing Director of Briggen since 2006.

Shareholdings: 10,750

The information above refers to the situation in the end of January 2012. Shareholdings include own holdings and those of spouse, minors or children living at home and associated companies and holding trough capital assurance.

Multi Year Summary

Jan-March
2011
Apr-June
2011
July-Sept
2011
Oct-Dec
2011
2011 Jan-March
2010
Apr-June
2010
July-Sept
2010
Oct-Dec
2010
2010
Income Statement, SEKm
Rental income 717 730 734 738 2,919 674 693 691 701 2,759
Property costs – 288 – 238 – 212 – 265 – 1,003 – 280 – 227 – 206 – 247 – 960
Net operating income 429 492 522 473 1,916 394 466 485 454 1,799
Central administrative expenses – 20 – 25 – 18 – 20 – 83 – 17 – 22 – 19 – 26 – 84
Net interest rates – 159 – 162 – 170 – 169 – 660 – 143 – 141 – 142 – 148 – 574
Income from property management 250 305 334 284 1,173 234 303 324 280 1,141
Changes in value. properties 97 291 48 – 242 194 46 320 197 659 1,222
Changes in value. derivatives 171 – 104 – 432 – 64 – 429 – 53 – 36 58 322 291
Current tax – 1 – 1 – 4 – 4 – 10 – 2 – 3 0 0 – 5
Deferred tax – 123 – 128 16 18 – 217 – 52 – 154 – 144 – 335 – 685
Net income for the period/year 394 363 – 38 – 8 711 173 430 435 926 1,964
Other total net income 0 0 0 0 0
Total net income for the period/year 394 363 – 38 – 8 711 173 430 435 926 1 964
Balance Sheet. SEKm
Investment properties 32,284 32,896 33,273 33,867 33,867 29,511 30,032 30,286 31,768 31,768
Other fi xed assets 192 181 192 207 207 134 164 164 156 156
Cash and bank 113 104 146 97 97 12 12 35 12 12
Total assets 32,589 33,181 33,611 34,171 34,171 29,657 30,208 30,485 31,936 31,936
Shareholders' equity 10,886 11,249 11,211 11,203 11,203 9,291 9,721 10,156 11,082 11,082
Deferred tax liability 3,620 3,747 3,731 3,714 3,714 2,875 3,029 3,166 3,502 3,502
Derivatives 403 508 941 1,003 1,003 918 954 896 574 574
Long term interest-bearing liabilities 16,370 16,677 16,739 17,160 17,160 15,073 15,675 15,412 15,781 15,781
Non-interest-bearing liabilities 1,310 1,000 989 1,091 1,091 1,500 829 855 977 997
Total shareholders' equity and liabilities 32,589 33,181 33,611 34,171 34,171 29,657 30,208 30,485 31,936 31,936
Financial key ratios
Net operating income margin 60% 67% 71% 64% 66% 58% 67% 70% 65% 65%
Interest rate, avarage 4.0% 4.0% 4.2% 4.1% 4.1% 3.8% 3.6% 3.7% 3.9% 3.7%
Interest coverage ratio 257% 288% 296% 268% 278% 264% 315% 328% 289% 299%
Return on actual net asset value 14.3% 13.5% – 1.4% – 0.8% 6.4% 7.3% 19.1% 17.9% 37.5% 21.5%
Return on total capital 6.3% 9.3% 6.6% 2.5% 6.2% 5.7% 10.3% 8.8% 14.1% 9.8%
Investments in properties, SEKm 522 319 328 846 2 015 255 201 227 823 1 506
Sales, SEKm 103 4 107 57 170 227
Loan to value ratio 51% 51% 50% 51% 51% 51% 52% 51% 50% 50%
Data per share (since there are no potential common stock, there is no effect of dilution)
Average number of shares, thousand 164,000
1.52
164,000
1.86
164,000
2.04
164,000
1.73
164,000 164,000
1.43
164,000
1.85
164,000
1.98
164,000
1.71
164,000
Income from property management, SEK
Income prop mgmt after tax (EPRA EPS), SEK
1.47 1.76 1.88 1.90 7.15
7.01
1.40 1.66 1.81 1.75 6.96
6.62
Earnings after tax, SEK 2.40 2.21 – 0.23 – 0.05 4.34 1.05 2.62 2.65 5.65 11.98
Outstanding number of shares, thousand 164,000 164,000 164,000 164,000 164,000 164,000 164,000 164,000 164,000 164,000
Property value, SEK 197 201 203 207 207 180 183 185 194 194
Long term net asset value (EPRA NAV), SEK 91 95 97 97 97 80 84 87 92 92
Actual net asset value (EPRA NNNAV), SEK 84 87 87 87 87 71 74 78 85 85
Dividend, SEK (2011 proposed) 3.70 3.60
Dividend ratio* 52% 52%
Property related key ratios
Rental value, SEK/sq,m, 991 997 997 1,075 995 967 978 972 1,049 974
Economic occupancy rate 88.7% 89.3% 90.0% 89.2% 89.3% 88.4% 88.9% 89.4% 89.2% 89.0%
Property costs, SEK/sq,m, 352 287 256 328 300 352 282 256 324 298
2009 2008 2007 2006 2005 2004 2003 2002
Income Statement, SEKm
Rental income 2,694 2,501 2,259 2,014 1,907 1,856 1,758 1,684
Property costs – 942 – 831 – 771 – 700 – 637 – 628 – 595 – 560
Net operating income 1,752 1,670 1,488 1,314 1,270 1,228 1,163 1,124
Central administrative expenses – 81 – 71 – 69 – 67 – 68 – 69 – 67 –63
Net interest rates – 541 – 626 – 495 – 364 – 382 – 418 – 428 – 442
Income from property management 1,130 973 924 883 820 741 668 619
Changes in value, properties – 1,027 – 1,262 920 1,145 932 660 – 43 251
Changes in value, derivatives 102 – 1,010 99 178 – 40 – 146 – 13 – 168
Current tax – 10 –14 – 22 – 10 –1 – 5 – 1 – 2
Deferred tax – 35 650 – 434 – 522 – 417 – 334 – 171 – 44
Net income for the year 160 – 663 1,487 1,674 1,294 916 440 656
Other total net income
Total net income for the period/year 160 – 663 1,487 1,674 1,294 916 440 656
Balance Sheet, SEKm
Investment properties 29,267 29,165 27,717 24,238 21,270 19,449 18,015 17,348
Other fi xed assets 201 230 123 200 103 94 167 172
Cash and bank 8 9 7 8 5 7 33 20
Total assets 29,476 29,404 27,847 24,446 21,378 19,550 18,215 17,540
Shareholders' equity 9,692 10,049 11,204 10,184 8,940 8,035 7,467 7,334
Deferred tax liability 2,824 2,785 3,322 2,723 2,126 1,659 1,294 1,124
Derivatives 865 966 – 44 55 233 391 245 232
Long term interest-bearing liabilities 15,294 14,607 12,582 10,837 9,396 8,834 8,598 8,264
Non-interest-bearing liabilities 801 997 783 647 683 631 611 586
Total shareholders' equity and liabilities 29,476 29,404 27,847 24,446 21,378 19,550 18,215 17,540
Financial key ratios
Net operating income margin 65% 67% 66% 65% 67% 66% 66% 67%
Interest rate, average 3.7% 4.7% 4.2% 3.7% 4.3% 4.9% 5.4% 5.7%
Interest coverage ratio 309% 255% 287% 343% 315% 277% 256% 240%
Return on actual net asset value 1.6% – 8.3% 16.2% 20.7% 18.2% 14.6% 7.2% 9.0%
Return on total capital 2.1% 1.2% 9.1% 10.4% 10.4% 9.6% 5.9% 7.6%
Net investments in properties, SEKm 1,165 2,738 2,598 2,283 1,357 1,268 1,108 1,050
Sales, SEKm 36 28 39 460 468 494 397 503
Loan to value ratio 52% 50% 45% 45% 45% 45% 48% 48%
Data per share (since there are no potential common stock, there is no effect of dilution)
Average number of shares, thousand 164,000 164,000 164,000 164,000 164,000 164,000 164,000 164,000
Income from property management, SEK 6.89 5.93 5.63 5.38 5.00 4.52 4.07 3.77
Income prop mgmt after tax (EPRA EPS), SEK 6.93 5.85 5.50 5.09 4.49 4.15 3.82 3.52
Earnings after tax, SEK 0.98 – 4.04 9.07 10.21 7.89 5.59 2.68 4.00
Number of outstanding shares, thousand 164,000 164,000 164,000 164,000 164,000 164,000 164,000 164,000
Property value, SEK 178 178 169 148 130 119 110 106
Long term net asset value (EPRA NAV), SEK 82 84 88 79 69 61 55 53
Actual net asset value (EPRA NNNAV), SEK 73 75 85 76 65 57 52 50
Dividend, SEK (2011 proposed) 3.50 3.15 3.00 2.85 2.62 2.38 2.13 1.88
Dividend ratio* 51% 53% 53% 53% 52% 53% 52% 50%
Property related key ratios
Rental value, SEK/sq,m, 969 921 896 864 851 859 829 799
Economic occupancy rate 89.8% 89.7% 87.9% 87.1% 88.1% 89.6% 90.7% 91.5%
Property costs, SEK/sq,m, 300 268 262 259 247 255 246 237
Property value, SEK/sq,m, 9,036 8,984 9,098 8,466 7,930 7,706 7,296 7,132
FINANCIAL REPORTS
FINA NCIA L RE PORT S
Financial Reports 2011
Consolidated Statement of Comprehensive Income 78
Comments to the Consolidated Statement of
Comprehensive Income 79
Consolidated Balance Sheet 80
Comments to the Consolidated Balance Sheet 81
Income statement and Comprehensive Income
for the Parent Company
82
Balance Sheet for the Parent Company 83
Change in Equity 84
Cash Flow Statement 85
Accounting Principles and Notes 86
1. Accounting Principles 86
2. Segment Reporting 91
3. Rental Income
4. Property Costs
91
93
5. Central Administrative Expenses 94
6. Interest rate and Financial Income 94
7. Interest rate and Financial Costs 95
8. Change In Value 95
9. Tax Costs 95
10. Personnel and Board of Directors
11. Investment Properties
96
98
12. Equipment 101
13. Shareholders´ Equity and Net Asset Value 101
14. Liabilities 102
15. Deferred Tax Liability / Asset 102
16. Derivatives 103
17. Long-term Interest-bearing Liabilities
18. Accrued Expenses and Prepaid Income
103
106
19. Pledged Assets 106
20. Contigent Liabilities 106
21. Participations in Group Companies 106
22. Long-term Receivables, Group Companies 106
23. Financial Instruments - Future cash fl ow etc. 107
24. Subsequent Events 107
CAST ELLU M AN NUAL REP ORT

Consolidated Statement of Comprehensive Income

SEKm 2011 2010
Rental income Note 3 2,919 2,759
Operating expenses Note 4 – 553 – 547
Maintenance Note 4 – 115 – 105
Ground rent Note 4 – 24 – 19
Real estate tax Note 4 – 148 – 140
Leasing and property administration Note 4 – 163 – 149
Net operating income 1,916 1,799
Central administrative expenses Note 5 – 83 – 84
Net interest rates
Interest rate income Note 6 2 1
Interest rate cost Note 7 – 662 – 575
Income from property management 1,173 1,141
Changes in value Note 8
Properties 194 1,222
Derivatives – 429 291
Income before tax 938 2,654
Current tax Note 9 – 10 – 5
Deferred tax Note 9 – 217 – 685
Net income for the year 711 1,964
Other total net income
Translation difference foreign operations 0
Unrealized change, currency risk hedge foreign operations 0
Total net income for the year 711 1,964

Since there are no minority interests the entire net income is attributable to the shareholders of the parent company..

Data per share (since there are no potential common stock, there is no effect of dilution)
-- -- -------------------------------------------------------------------------------------------- -- --
Average number of shares, thousand 164,000 164,000
Net income for the year after tax, SEK 4.34 11.98

Comments to the Consolidated Statement of Comprehensive Income

Rental income

Group rental income amounted to SEKm 2,919 (2,759). For offi ce and retail properties, the average contracted rental level, including charged heating, cooling and property tax, amounted to SEK 1,217 per sq.m., whereas for warehouse and industrial properties, it amounted to SEK 724 per sq.m. Rental levels, which are considered to be in line with the market, have increased by 1.6% in comparable portfolio compared with previous year.

The average economic occupancy rate was 89.3%. The total rental value for vacant premises during the year amounted to approx. SEKm 371 (374).

Gross leasing (i.e. the annual value of total leasing) during the period was SEKm 310 (257), of which SEKm 45 (46) was leasing of new constructions, extensions and reconstructions. Notices of termination amounted to SEKm 249 (221), of which bankruptcies were SEKm 18 (12), hence net leasing was SEKm 61 (36). The time difference between reported net leasing and the effect in income thereof is estimated to between 9-18 months.

Demand for properties remains strong, although some level of weakening has been noted, and the rental process takes longer. This pattern is similar for all Castellum submarkets and property types.

Rental levels are expected to remain stable. The 2011 infl ation rate has resulted in a 2012 index adjustment of just over 2%.

Property costs

Property costs amounted to SEKm 1,003 (960) corresponding to SEK 300 per sq.m. (298). Consumptions for heating during the year has been calculated to 87% (116%) of a normal year according to the degree day statistics.

Central administrative expenses

Central administrative expenses totalled SEKm 83 (84). This includes costs for a profi t-and-share-price related incentive plan for 10 persons in executive management of SEKm 14 (16).

Net interest rate

Net interest items were SEKm –660 (–574). The average interest rate level was 4.1% (3.7%).

Income from property management

Income from property management during the year, i.e. net income excluding changes in value and tax, amounted to SEKm 1,173 (1,141), equivalent to SEK 7.15 (6.96) per share - an increase with 3%.

Changes in value

The change in value in Castellum's portfolio during the year amounted to SEKm 194 (1,222), corresponding to approx. 0.6%. The change in value mainly relates to acquisitions and project gains. No general change in the the required yield in the internal valuations has been made during the year. On the property level, however, adjustments has been made on both individual required yield and future cash fl ow. The change in value also covers SEKm 30 due to sales of 4 properties where the sale price of SEKm 107 exceeded the valuations by 39%.

Castellum utilizes interest rate derivatives to achieve the desired interest rate maturity structure. If the agreed interest rate deviates from the market interest rate, irregardless credit margins, there is a theoretical surplus or sub value in the interest rate derivatives where the non-cash-fl ow affecting changes in value are reported in the income statement.

Castellum also has a few derivatives in order to hedge currency fl uctuation in the investment in Denmark where the value is accounted for in other total income. The value in the derivatives portfolio has changed mainly due to changes in long-term market interest rates by SEKm –429 (291) and the value was SEKm –1,003 (–574) at the end of the year.

Tax

The nominal corporate tax rate in Sweden is 26.3%. Due to the possibility to deduct depreciation and reconstructions for tax purposes, and to utilize tax loss carryforwards, there are in principle no paid tax costs. Paid tax occurs because a few subsidiaries are not allowed to make fi scal group contributions.

Castellum has no ongoing formal tax disputes.

Tax Calculation 2011, SEKm Basis Basis
current tax deferred
tax
Income from property management 1,173
Deductions for tax purposes
depreciations – 636 636
reconstructions – 365 365
Other tax allowances – 80 41
Taxable income from property manage
ment
92 1,042
Properties sold 8 – 15
Changes in value on properties 164
Changes in value on interest rate derivatives – 429
Taxable income before tax loss carry
forwards
– 329 1,191
Tax loss carry forwards, opening balance – 1,406 1,406
Tax loss carry forwards, closing balance 1,772 – 1,772
Taxable income 37 825
Of which 26.3% current/deferred tax – 10 – 217

Consolidated Balance Sheet

SEKm Dec 31 2011 Dec 31 2010
ASSETS
Fixed assets
Investment properties Note 11 33,867 31,768
Tangible fi xed assets Note 12 15 12
Long-term receivable 0 3
Total fi xed assets 33,882 31,783
Current assets
Rent receivables Note 3 20 10
Other receivables 108 78
Prepaid expenses and accrued income 64 53
Cash and bank 97 12
Total current assets 289 153
TOTAL ASSETS 34,171 31,936
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity attributable to the shareholders of Note 13
the parent company
Share capital 86 86
Other capital contribution 4,096 4,096
Retained earnings 7,021 6,900
Total shareholders' equity 11,203 11,082
Liabilities Note 14
Long-term liabilities
Deferred tax liability Note 15 3,714 3,502
Derivatives Note 16 1,003 574
Long-term interest-bearing liabilities Note 17 17,160 15,781
Total long-term liabilities 21,877 19,857
Short-term liabilities
Accounts payable 163 133
Tax liabilities 22 21
Other liabilities 179 228
Accrued expenses and prepaid income Note 18 727 615
Total short-term liabilities 1,091 997
Total liabilities 22,968 20,854
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 34,171 31,936
Pledged assets Note 19 18,986 17,421
Contingent liabilities Note 20

Comments to the Consolidated Balance Sheet

Assets

Fixed assets

During the year the real estate portfolio has changed according to the table below.

Changes in the real estate portfolio Value, SEKm Number
Real estate portfolio on 1 January, 2011 31,768 598
+ Acquisitions 857 23
+ New constructions, extensions and
reconstructions
1,158
– Sales – 77 – 4
+/– Unrealized changes in value 164
+/– Currency translation – 3
Real estate portfolio on 31 December, 2011 33,867 617

During the year investments totalling SEKm 2,015 (1,506) were made, of which SEKm 1,158 (881) were new constructions, extensions and reconstructions and SEKm 857 (625) were acquisitions. Of the total investments SEKm 728 related to Greater Gothenburg, SEKm 541 to the Öresund Region, SEKm 352 related to Mälardalen, SEKm 226 to Greater Stockholm and SEKm 168 to Eastern Götaland.

After sales of SEKm 107 (227) net investments amounted to SEKm 1,908 (1,279).

Castellum assesses the value of properties through internal valuations. These are based on a 10-year cash-fl ow-based model, in which an individual valuation for each property refl ects both its future earnings capacity and the required market yield. In the valuation of a property's future earnings capacity, consideration has been taken of potential changes in rental levels, occupancy rates and property costs - as well as an asumed infl ation level of 1.5%.

Projects in progress have been valued using the same principle, but with deductions for remaining investments. Sites with building rights have been valued on the basis of an estimated market value per square metre, on average approx. SEK 980 per sq.m. (970).

Based on these internal valuations, the value of the properties at year-end were assessed to SEKm 33,867 (31,768), corresponding to SEK 9,835 per sq.m. (9,500).

External valuation

In order to provide further assurance and validation of thevaluation, 133 properties - representing 51% of the value of the portfolio - have been valued externally by NAI Svefa. NAI. Svefa's valuation of the selected properties amounted to SEKm 17,058, within an uncertainty range of +/- 5-10% on property level, depending on each property's category and location. Castellum's valuation of the same properties totalled SEKm 17,240, i. e., a net change of SEKm 182, corresponding to 1%. Gross deviation was SEKm +347 and SEKm –529 respectively, with an average deviation of 5%.

Shareholders' equity and liabilities

Net asset value

As of 31 December 2011, shareholder's equity was SEKm 11,203. In addition, there were liabilities in the balance sheet that, in principle, were both interest free and amortization free. Hence, these liabilities can largely be regarded as shareholder equity. The net asset value can therefore be calculated in different ways, as shown in the table below.

Net asset value 31-12-2011 SEKm SEK/
share
Equity according to the balance sheet
Reversed
11,203 68
Derivatives acc to balance sheet 1,003 6
Deferred tax acc to balance sheet 3,714 23
Long term net asset value (EPRA NAV) 15,920 97
Deduction
Derivatives as above – 1,003 – 6
Estimated real liability, deferred tax 5% – 721 – 4
Actual net asset value (EPRA NNNAV) 14,196 87

Deferred tax

Remaining tax loss carryforwards can be calculated to SEKm 1,772 (1,406). Fair values for the properties exceed their fi scal value by SEKm 16,197 (14,829) of which SEKm 304 relates to properties acquired and accounted for as asset acquisitions. As deferred tax liability, a full nominal 26.3% tax of the net difference is reported, reduced by the deferred tax relating to asset acquisitions, i.e. SEKm 3,714 (3,502).

Long term interest-bearing liabilities

As of 31 December, 2011 Castellum had long term binding credit agreements totalling SEKm 19,374 (18,062), short term binding credit agreements totalling SEKm 420 (520) and a commerial paper program of SEKm 4,000 (4,000). After deduction of liquid assets of SEKm 97 (12), net interest bearing liabilities were SEKm 17,063 (15,769), of which SEKm 2,235 (1,377) refers to outstanding commercial papers.

Most of Castellum's loans are short-term revolving loans, utilized in long-term binding credit agreements. Long-term loan commitments in banks are secured by pledged mortgages and/or fi nancial covenants. Outstanding commercial papers are unsecured. The fi nancial covenants state a loan-to-value ratio not exceeding 65% and an interest coverage ratio of at least 150%, which Castellum fulfi ls with comfortable margins, 51% and 278% respectively.

The average duration of Castellum's long-term credit agreements was 5.1 years (5.0). Margins and fees on long-term credit agreements had an average duration of 3.5 years (2.6).

As of 31 December, 2011, the market value of the interest rate and the currency derivative portfolio amounted to SEKm –1,003 (–574).

Income Statement for the Parent Company

SEKm 2011 2010
Income Note 3 19 15
Central administrative expenses Note 5 – 61 – 59
Financial items
Financial income Note 6 1,494 1,486
Financial costs Note 7 – 712 – 636
Income before changes in value and tax 740 806
Changes in value Note 8
Derivatives – 429 291
Income before tax 311 1,097
Current tax Note 9
Deferred tax Note 9 78 – 116
Net income for the year 389 981

Comprehensive Income for the Parent Company

SEKm 2011 2010
Net income for the year according to the Income Statement 389 981
Other total net income
Translation difference foreign operations 0
Unrealized change, currency risk hedge foreign operations 0
Total net income for the year 389 981

Balance Sheet for the Parent Company

SEKm Dec 31 2011 Dec 31 2010
new principle,
see note 1
Dec 31 2010
ASSETS
Fixed assets
Tangible fi xed assets Note 12 1 0 0
Financial fi xed assets
Participations in group companies Note 21 5,338 5,217 4,087
Deferred tax assets Note 15 271 169 169
Long-term receivables, group companies Note 22 17,432 16,195 16,195
Total fi nancial fi xed assets 23,041 21,581 20,451
Total fi xed assets 23,042 21,581 20,451
Current assets
Short-term receivables, group companies 772 838 838
Prepaid expenses and accrued income 8 10 10
Cash and bank 0 0 0
Total current assets 780 848 848
TOTAL ASSETS 23,822 22,429 21,299
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity
Note 13
Restricted equity
Share capital 86 86 86
Restricted reserves 20 20 20
Non-restricted equity
Retained earnings 4,362 3,971 2,974
Net income for the year 389 981 848
Total shareholders' equity 4,857 5,058 3,928
Liabilities Note 14
Derivatives Note 16 1,003 574 574
Long-term interest-bearing liabilities Note 17 15,391 14,719 14,719
Long-term interest-bearing liabilities, group companies 1,809 1,691 1,691
Short-term interest-bearing liabilities 518
Short-term interest bearing liabilities, group companies 90 230 230
Accounts payable 2 3 3
Other liabilities 2 2 2
Accrued expenses and prepaid income Note 18 150 152 152
Total liabilities 18,965 17,371 17,371
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 23,822 22,429 21,299
Pledged assets Note 19 16,103 14,721 14,721
Contingent liabilities Note 20 1,174 1,062 1,062

Change in Equity

Attributable to the shareholders of the parent company
Number of out Other
Translation
Hedging
standing shares, Share capital of currency of currency Retained Total
Group, SEKm (note 13) thousand capital contribution reserve reserve earnings equity
Shareholders' equity 31-12-2009 164,000 86 4,096 5,510 9,692
Dividend, March 2010 (3.50 per share) – 574 – 574
Net income for the year 1,964 1,964
Other total net income
Shareholders' equity 31-12-2010 164,000 86 4,096 0 0 6,900 11,082
Dividend, March 2011 (3.60 per share) – 590 – 590
Net income for the year 711 711
Other total net income 0 0 0
Shareholders' equity 31-12-2011 164,000 86 4,096 0 0 7,021 11,203
Fair value reserves
Number of Translation Hedging
outstanding Share Restricted of currency of currency Retained Total
Parent Company, SEKm (note 13) shares, thousand capital reserves reserve reserve earnings equity
Shareholders' equity 31-12-2009 164,000 86 20 3,585 3,691
Changed accounting principle - paid
Group contribution, net value after tax 960 960
Dividend, March 2010 (3.50 per share) – 574 – 574
Net income for the year 981 981
Other total net income
Shareholders' equity 31-12-2010 164,000 86 20 4,952 5,058
Dividend, March 2011 (3.60 per share) – 590 – 590
Net income for the year 389 389
Other total net income 0 0 0
Shareholders' equity 31-12-2011 164,000 86 20 0 0 4,751 4,857

Cash Flow Statement

Group Parent Company
SEKm 2011 2010 2011 2010
Operating activities
Net operating income 1,916 1,799 19 15
Central administrative expenses – 83 – 84 – 61 – 59
Depreciations reversed 6 6 0 0
Net fi nancial items paid – 651 – 595 19 – 9
Tax paid – 14 – 9
Cash fl ow from operating activities
before change in working capital 1,174 1,117 – 23 – 53
Cash fl ow from change in working capital
Change in current receivables – 51 12 68 –136
Change in current liabilities 184 84 – 12 0
Cash fl ow from operating activities 1,307 1,213 33 –189
Investment activities
Investments in new constructions, extensions and reconstructions – 1,158 – 881
Property acquisitions – 857 – 625
Change in liabilities at acquisitions of properties – 95 137
Property sales 102 219
Change in receivables at sales of properties 3 32
Net capital contributions, subsidiaries 626 608
Other net investments – 6 – 4 0 0
Cash fl ow from investment activities –2,011 – 1,122 626 608
Financing activities
Change in interest-bearing liabilities 1,379 487 1,168 449
Change in long-term receivables – 1,237 – 294
Dividend paid – 590 – 574 – 590 – 574
Cash fl ow from fi nancing activites 789 – 87 – 659 – 419
Cash fl ow for the year 85 4 0 0
Cash and bank, opening balance 12 8 0 0
Cash and bank, closing balance 97 12 0 0

Accounting Principles and Notes

(All fi gures in SEKm unless stated otherwise.)

Not 1 Accounting Principles General information The fi nancial reports of Castellum AB (The Parent Company) for the fi nancial year ending December 31, 2011, have been approved by the Board of Directors and the Chief Executive Offi cer for publication on February 3, 2012, and will be proposed to the 2012 Annual General Meeting for adoption. The parent company is a Swedish limited liability company (publ), with registered offi ce in Gothenburg, Sweden. The business activities of the Group are described in the Directors' report. Grounds for the accounting Castellum's accounts have been prepared in accordance with the IFRS standards adopted by the EU and the interpretations of them (IFRIC). Further, the consolidated accounts have been prepared according to Swedish law by application of the Swedish Financial Reporting Board's recommendation RFR 1 (Complementary accounting principles for consolidated accounts). The accounts have been prepared based on fair value of investment properties and derivatives and nominal value for deferred tax. For the remaining items acquisition value has been used. Critical assessments For accounts to be completed in accordance with the IFRS and generally accepted, accounting principles, assessments and assumptions must be made that affect the recorded assets, liabilities, income and costs, as well as other information in the accounts. These assessments and assumptions are based upon historical experience and other factors which are considered fair under current conditions. Real outcome may be different from these assessments if other assumptions are made or other conditions exist. Investment properties For valuation of investment properties, the assessments and assumptions can have a signifi cant affect on the income and fi nancial position of the Group. The valuation calls for estimates and assumptions of future cash fl ows and decisions about the discounting factor (required yield). To refl ect the uncertainty that exists in the assessments and assumptions, normally an uncertainty range of +/- 5-10% is used in property valuations. Information about this along with prevailing assessments and assumptions is presented in note 11. Asset acquisition versus business combination Company acquisitions can be classifi ed as either business combinations or asset acquisitions. A company acquisition that has as its primary purpose to acquire a company's property - i.e., where the company's possible property management and administration are of secondary importance to the acquisition - is classifi ed as an asset acquisition. Other company acquisitions are classifi ed as business combinations. Regarding asset acquisitions, no deferred tax is attributable to the property acquisition. Instead, possible discount will reduce the acquisition value of the property. This means that changes in value will be affected by the tax discount in the subsequent valuation. Deferred tax liability According to the accounting principles, deferred tax shall be accounted to nominal value without discount, meaning a 26.3% nominal tax rate. Actual tax is considerably lower, in part due to the possibility to sell properties in a tax-effi cient manner, and in part due to the time factor. Income from property management Castellum's operations are focused on cash fl ow growth from property management - i.e., growth in income from property management - with the objective of an annual increase in property management income by at least 10%. It is also the income from property management that forms the basis of what is yearly distributed to shareholders - at least 50% of the property management income before tax. Thus, the size of changes in value has not been targeted since they are neither included in the basis for distribution, nor in any other base such as, for example, the management's incentive program. To give an accurate picture of Castellum's view on its business operations, the comprehensive income report has been designed accordingly - i.e., the accounting of changes in value (not affecting cash-fl ow) occurs after the cashfl ow affecting items. Furthermore, one result row has been inserted on which the business operations are managed and targeted: the income from property management. Classifi cation Fixed assets and long-term liabilities consist of amounts that are expected to be regained or maturing more than twelve months from the balance sheet date. Current assets and short-term liabilities consist of amounts that are expected to be regained or settled in less than twelve months from the balance sheet date. The consolidated fi nancial statements The Group's balance sheet and income statement include all companies where the parent company has direct or indirect determining infl uence. All companies in the Group are wholly-owned and there are neither associated companies nor joint ventures. In addition to the parent company, the Group comprises the subsidiaries listed in Note 21 and their respective sub-groups. The consolidated fi nancial statements are based upon the accounts for all subsidiaries as of December 31. The consolidated fi nancial statements have been prepared according to the acquisition accounting method. This means that shareholders' equity in the subsidiaries at the time of acquisition, calculated as the difference between the fair value of the assets and liabilities, is fully eliminated. The shareholders' equity of the Group includes only the part of shareholders' equity in the subsidiaries that has been added after the acquisition.

The consolidated income statement includes records of associated companies acquired or sold during the year only for the time of possession.

Intra-group sales, income, losses and dealings are eliminated in the consolidated accounts.

The accounts of the foreign operation are translated to SEK by translating the balance sheet to the exchange rate at balance date - except for shareholders' equity which is translated at the historical exchange rate. The income statement is translated at the average exchange rate of the period. Exchange differences on translation are recognized in other total income.

Rental income

Rental income, which from an accounting perspective is also called income from operating leases, is debited in advance and recorded as a linear allocation in the income statement, based on the terms in the lease. Rental income includes supplementary charges for the tenant, such as debited real estate tax and heating costs. Rents debited in advance are recorded as deferred rental income.

In cases where a lease during a certain period of time offers a reduced rent, corresponding to a higher rent at another point in time, this lower/higher rent is spread out over the period of the lease. Pure discounts, such as reduction for successive moving in, are recorded in the income statement for the period in which they are given.

Income from property sales

Income from property sales is entered as of the contract date, unless there exist special conditions in the purchasing agreement. On sale of a property through a company, the transaction is recorded using gross accounting regarding the underlying property price and the calculated deduction for deferred tax. The result from property sales is accounted for as a change in value and refers to the difference between the received sales price after deduction of sales costs, and the recorded value in the latest interim report with adjustment for capitalized investments after the latest interim report.

Financial income

Financial income consists of interest rate income and is recorded as income in the period to which they refer. Received and anticipated dividends are also recorded as fi nancial income.

Financial costs include interest and other costs that occur when a company borrows money. Costs for taking out pledges for mortgages are not considered as fi nancial costs and are capitalized as a property investment since it increases valuation. Financial costs are accounted for in the period which they refer to. Financial costs also include the interest rate cost for interest-rate derivatives. Payments for these interest-rate derivatives are accounted for in the period to which they refer. Net fi nancial items have not been affected by market valuation of the undertaken interest rate derivatives. Instead, changes in the market value of interest-rate derivatives are recorded as changes in value under a separate headline. The portion of interest rate cost originating from the construction period for major new construction, extension or reconstruction projects is capitalized. Interest is calculated based on the average interest rate level for the Group.

Employee benefi ts are accounted for as employees perform services in exchange for remuneration. Benefi ts from incentive plans settled in cash and paid as non-pensionable salary are accounted for as the targets are met during the period of the incentive plan.

Pensions and other post-employment benefi ts are classifi ed as defi ned contribution or defi ned benefi t plans. The majority of the Castellum Group's pension commitments are defi ned contribution plans. These are fulfi lled through regular payments to independent authorities or bodies which administer the plans. Obligations regarding payments to contribution plans are recorded as a cost in the income statement when they occur. A small number of employees within the Castellum Group have defi ned ITP-plans with regular payments to Alecta. These plans are recorded as defi ned contribution plan since Alecta does not provide the information needed in order to report the plan as a defi ned benefi t plan. There are, however, no indications of any signifi cant liabilities in addition to what has already been paid to Alecta.

Income tax in the income statement is divided into current and deferred tax. Income tax is recorded in the income statement except when related to transactions, such as group contributions, which have been recorded directly in equity. When possible, tax effects have also been recorded directly in equity. Current and deferred taxes are calculated based on the current tax rate, which is 26.3% at present.

Open claims in the income tax return that contain a certain degree of uncertainty are taken into consideration in the tax calculation in the year after the fi scal year at the earliest, after taxation has been assessed by tax authorities.

Income

Financial cost

Employee benefi ts

Income taxes

Deferred tax

Deferred tax is recorded in Castellum, using the balance sheet method, for all temporary differences between an asset's or a liability's book value and its tax-basis value. This means that there is a tax liability or a tax asset that falls due for payment on the date for which the asset or liability is realized. However, exceptions are made for temporary differences that arise from the initial accounting for assets and liabilities relating to asset acquisitions. Castellum has two entries in which temporary differences may be found - properties and tax- loss carry forwards. Deferred tax assets related to taxloss carry forwards are recorded, since it is probable that future taxable income will be available, which may be utilized to offset tax-loss carry forwards. Deferred tax liability relates to the difference between the properties book value and their tax basis value. For changes in either of the two entries above, the deferred tax liability / tax asset is also changed, and this is recorded in the income statement as a deferred tax.

Castellum has recorded all completed company acquisitions as asset acquisitions, meaning that deferred tax at the time of the acquisition is not accounted for in the balance sheet.

Current tax

In addition to deferred tax, current tax is also recorded in the income statement. This is equivalent to the tax that the company must pay on the taxable income for the year, adjusted for possible prevailing taxes for previous periods.

Leases Leases where all crucial risks and benefi ts associated with the ownership fall on the lessor, are classifi ed as operational leases. From an accounting perspective, all existing rental leases related to Castellum's investment properties are seen as operational leases. How these leases are accounted for can be read about in the accounting principles for income and in note 3.

From an accounting perspective, site leasehold is seen as an operational lease. The ground rent is accounted for in the income statement for the period it refers to.

There are also a small number of leases of insignifi cant value, where Castellum is the lessee. These leases are also accounted for as operational leases and mainly concern private passenger cars. Payments made during the leasing period are recorded as running costs in the income statement, over the leasing period.

Investment properties

An investment property is a property held for the purpose of generating rental income, capital appreciation - or both. This is as opposed to utilization in a company's operations for production or supply of goods or services or for administrative purposes and sales in daily operations. All of Castellum's owned or ground-leased properties are considered to be investment properties. If the Group starts an investment on an existing investment property for future use as an investment property, the property continues to be recorded as an investment property.

Valuation

Investment properties are recorded at acquisition cost, prevailing at acquisition time. This includes expenses directly related to the acquisition, with consideration taken for nominal deferred tax. The acquisitions have been recorded at fair value with changes in value in the income statement. Fair value has been calculated using an internal valuation model described in note 11. The note also describes the assumptions made as basis for the valuation. The valuation model is based on an earnings-based value, determined by calculating the net prevailing value of future cash fl ows. A differentiated required yield for each property depending on such factors as location, intended use, condition and standard is taken into consideration. In order to provide further assurance, the valuation part of the portfolio has been valued externally.

Changes in value

Changes in value are recorded in the income statement and consist of unrealized as well as realized changes in value. Unrealized changes in value are calculated based on the valuation at the end of the fi nancial year compared with the previous year's valuation, or the acquisition value if the property has been acquired during the year, with the addition of capitalized subsequent expenditures during the period. For properties sold during the year, unrealized changes in value are recorded and calculated based on the valuation at the latest interim report prior to the sale, compared to the valuation at the end of previous year with adjustment for capitalized subsequent expenditures during the period. How realized changes in value are calculated for may be found in the accounting principles for "income from property sales".

Subsequent expenditures

Subsequent expenditures which lead to economic benefi ts for the company, i.e., increase the valuation of the property and can be reliably calculated are capitalized. Costs for repairs and maintenance are accounted for in the income statement for the period in which they occur. In the case of major new construction and reconstruction projects, interest costs during the construction period are capitalized.

Acquisitions and sales

For acquisition or sale of properties or companies, the transaction is entered as of the date-of-contract, unless special conditions exist in the purchasing contract.

Tangible fi xed assets comprise all equipment, which has been recorded at acquisition value, including deduction of accumulated depreciation according to plan and any write-downs made. The acquisition value includes the purchase price and costs directly related to, e.g., transport-to-site and proper condition for utilization according to the purpose of the acquisition. Depreciation on equipment is based on historical acquisition values after possible deduction of subsequent write-downs. The residual value is assumed to be non-existent. Depreciation of assets acquired during the year is calculated with reference to the date of acquisition. Depreciation is linear, which means equal and even depreciation during the period of use, which is normally fi ve years, except for computers, which are expected to have a three-year period of use.

Financial instruments which are recorded in the balance sheet include assets such as cash-and-bank, lease receivables, other receivables and long-term receivables and liabilities such as interest rate derivatives, accounts payable, other liabilities and loans.

Financial instruments are initially recorded to fair value equivalent to acquisition value, with the addition of transaction costs. One excepted category includes fi nancial instruments which are recorded at fair value through income statement, without transaction costs. Following the initial recognition, accounting is based on the classifi cation made according to the criteria below. Financial transactions such as cash received or paid as interest and loans are recorded on the settlement day of the bank holding the account, while other payments are recorded on the accounting date of the bank holding the account.

A fi nancial asset is removed from the balance sheet when the rights are realized, expire or the company loses control of it. A fi nancial liability is removed from the balance sheet when the contractual obligations have been paid or extinguished in some other way.

Cash and bank

Cash-and-bank consists of the bank balance at the end of the accounting period and is recorded at nominal value.

Receivables

Financial assets which are not interest rate derivatives, that have fi xed or predictable payments and that are not quoted on an active market, are recorded as receivables. In the Group there are rent receivables and other receivables. After individual valuation, receivables have been recorded as the amount at which they are expected to be received. This means that they are recorded at acquisition value with reservation for receivables which are uncertain. Reservation for uncertain receivables is made when an objective risk assessment concludes that the Group might not receive the entire receivable. Receivables in the parent company consist only of receivables from the subsidiaries, and these are recorded at acquisition value.

Liabilities

Liabilities refer to loans and operating liabilities such as accounts payable. The majority of Castellum's credit agreements are long term. In cases where short-term loans are drawn under long-term credit agreements, the loans are considered as long-term. The loans are recorded on the settlement date at acquisition value. Deferred unpaid interest is recorded in accrued expenses. A liability is recorded when the counterparty has performed services and a legal obligation to pay exists, even if the invoice has not yet been received. Accounts payable are recorded when the invoice is received. Accounts payable and other operative liabilities with short duration are recorded at nominal value.

Foreign currency

Transactions in foreign currencies are translated to Swedish kronor (SEK) to the spot exchange rate of the transaction. Monetary assets and liabilities are translated at the rate on balance day.

Derivatives

Interest-rate derivatives are fi nancial assets or liabilities which are valued at fair value, with value-changes recorded in the income statement. In order to manage exposure to fl uctuations in the market interest rate according to fi nancial policy, Castellum has entered into interest-rate-derivative agreements. When using interest-rate derivatives, changes in value may occur, mainly due to changes in market interest rates. Interest-rate derivatives are initially recorded in the balance sheet on the trade day at acquisition value, where the absolute majority refer to exchanges in interest-rate fl ows, entailing an acquisition value of zero. They are thereafter valued at fair value with value-changes appearing in the income statement.

To calculate the fair-value market-interest-rates for each fi xed interest term as listed on the balance sheet date, generally accepted methods for calculations are used. This means that fair value has been determined according to level 2, IFRS 7 point 27a. Interest-rate derivatives are valued by calculating the net present value by discounting future cash fl ows. Instruments containing some sort of option are valued at the current repurchase price, which may be received from respective counterparties. Changes in value can be realized as well as unrealized. Realized changes in value refer to redeemed interest-rate derivatives and comprise the difference between the price at the time of redemption and the recorded book value according to the latest interim report. Unrealized changes in value refer to the changes in value during the fi nancial year for the interest-rate derivatives that Castellum held at the end of the fi scal year.

Changes in value are calculated based on the valuation at the end of the fi scal year compared to the valuation in the previous year, or the acquisition value if the interest rate derivative agreements have been entered into during the year. For interest rate derivatives that have been redeemed, an unrealized change in value is recorded and calculated based on the valuation at the latest interim report prior to the redemption, compared with the valuation at the end of the previous year. Payments made under these agreements are accounted for in the period to which they refer.

Tangible fi xed assets

Financial instruments

In accordance with the fi nancial policy, between 60-100% of foreign investments must be fi nanced in the functional
currency of the company. This can be accomplished both by taking out loans in the functional currency of the foreign
company and by using currency derivatives. In cases where currency derivatives are used they are initially reported
in the balance sheet at cost on trade date. Thereafter, they are reported at fair value where the effective portion of
the foreign exchange rate change regarding the hedging instrument is recognized in other total income, while the
ineffective portion is recognized as change in value in the income statement. The rate at balance date is used to deter
mine real value.
Shareholders´
equity
Repurchased shares
Repurchased shares reduce shareholders' equity by the paid purchase price including any transaction costs.
Dividends
Dividends are accounted for as a deduction of shareholders' equity, after decision by the AGM (Annual General Mee
ting). The recipient accounts for an anticipated dividend as a fi nancial income.
Earnings after tax, per share
Calculation of after-tax earnings per share is based on the Group's net income for the year pertaining to the sharehol
ders of the parent company, and on the weighted average number of outstanding shares during the year.
Defi nitions
of segments
The Group's operations are organized, managed and reported primarily by geographical region and secondly by type of
property. Segments are consolidated according to the same principles as the Group. Income and costs reported for each
segment are actual costs. No distribution of joint costs has been made between the regions. This is also true for assets
and liabilities reported in the note segment reporting.
Cash fl ow
statement
The cash fl ow statement has been prepared according to the indirect method. Net profi t or loss is adjusted for the
transaction effects of a non-cash-fl ow nature during the period as well as income or costs associated with the cash fl ow
from investment or fi nancing activities.
Differences in
accounting principles
between the Group
and the parent
company
The Annual Report of the parent company has been prepared according to the Annual Accounts Act and by applying
of the Swedish Financial Reporting Board's recommendation RFR 2 (Accounting for legal entities). RFR 2 states that a
legal entity shall apply the same IFRS/IAS that is applied in the consolidated fi nancial statements, with exceptions for
and additions of rules and laws mainly according to the Annual Accounts Act, and with consideration to the relationship
between accounting and taxation. Differences in accounting principles between the Group and the parent company
are mentioned below.
Shares in subsidiaries
Shareholdings in subsidiaries are accounted for in the parent company according to the method of acquisition value.
The book value is regularly compared to subsidiaries' group equity. When the book value is lower than the subsidiaries'
group value, a write-down is made in the income statement. In the case when a previous write-down no longer can be
justifi ed, it will be reversed.
Contingent liabilities
Contingent liabilities for the benefi t of subsidiaries are fi nancial guarantees and are accounted for in accordance with
RFR 2, i.e. they are not accounted for as provisions, instead Castellum provides information in the notes.
New accounting New standards and interpretations, now in effect; approved by the EU.
rules and
regulations
Changes to existing standards
A number of minor changes and clarifi cations were made to existing standards that became effective in 2011. Among
other things; in the IAS 1, the IASB has clarifi ed that the analysis of other total net income can be accounted for either
in the report on shareholders' equity, or in a note. Furthermore, the IFRS 7 encourages that qualitative and quantitative
information is presented together to obtain an overall picture of the existing fi nancial risk that is linked to fi nancial
instruments.
Changes in Swedish regulations
Annual Accounts Act
The disclosure requirement to include a property's rateable value, absence due to illness and capitalized interest has
disappeared as from 2011, but Castellum still chooses to provide this information.
UFR 2 Group contributions and shareholder contributions
The Swedish Financial Reporting Board has withdrawn the UFR 2, which previously concerned accounting for Group
contributions as well as shareholder contributions. The change took effect on January 1, 2011. This entails a change in
accounting principle for the parent company concerning paid and received Group contributions. Previously, these items
were accounted for directly in shareholders' equity as net value after tax. Now received contributions should be accoun
ted for as fi nancial income and paid Group contributions in Castellum, as net of tax as an investment in subsidiaries
shares. The revised approach means that SEKm 1,130 has been added to the shareholders' equity. Previous years have

been recalculated to refl ect this.

Segment Reporting Note 2

Greater Öresund Greater Eastern Unallocated The Castellum
Gothenburg Region Stockholm Mälardalen Götaland items Group
2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010
Rental income, external 953 913 567 572 547 500 487 433 365 341 2,919 2,759
Property costs –275 –276 –201 –198 –205 –184 –185 –168 –137 –134 –1,003 –960
Net operating income 678 637 366 374 342 316 302 265 228 207 0 0 1,916 1,799
Central administration –13 –14 –7 –7 –7 –7 –7 –7 –6 –6 –43 –43 –83 –84
Interest income 18 32 38 34 5 6 3 3 4 2 –66 –76 2 1
Interest costs –228 –217 –160 –146 –131 –113 –131 –109 –89 –77 77 87 –662 –575
Income from prop. mgmt 455 438 237 255 209 202 167 152 137 126 –32 –32 1,173 1,141
Changes in value, property 141 299 17 277 36 307 -13 170 13 169 194 1,222
Interest rate derivatives, –429 291 –429 291
changes in value
Income before tax 596 737 254 532 245 509 154 322 150 295 –461 259 938 2 654
Tax income
Tax costs –155 –188 –64 –141 –57 –133 –31 –82 –40 –77 120 –69 –227 –690
Net income for the year 441 549 190 391 188 376 123 240 110 218 –341 190 711 1 964
Investment properties 11,023 10,176 7,303 6,748 6,557 6,370 5,168 4,829 3,816 3,645 33,867 31,768
of which investments this year 728 315 541 187 226 374 352 464 168 166 2,015 1,506
Current assets 516 600 1,007 930 282 144 181 239 190 185 –1,872 –1,930 304 168
Total assets 11,539 10,776 8,310 7,678 6,839 6,514 5,349 5,068 4,006 3,830 –1,872 –1,930 34,171 31,936
Shareholders' equity 4,155 3,927 2,902 2,777 2,605 2,516 1,353 1,392 1,281 1,288 –1,093 –818 11,203 11,082
Deferred tax liability 1,365 1,232 944 903 753 712 510 462 413 362 –271 –169 3,714 3,502
Interest rate derivates 1,003 574 1,003 574
Interest-bearing liabilities 5,656 5,367 4,147 3,865 3,284 3,011 3,313 3,123 2,208 2,092 –1,448 –1,677 17,160 15,781
Non-interest-bearing liabilities 363 250 317 133 197 275 173 91 104 88 -63 160 1,091 997
Total shareholders' equity & liabilities 11,539 10,776 8,310 7,678 6,839 6,514 5,349 5,068 4,006 3,830 –1,872 –1,930 34,171 31,936

Of the Groups external rental income SEKm 9 (–) refers to customers located in Denmark. Of the Groups income from property management SEKm 254 (–) refers to investment properties located i Denmark.

The Group's operational segments are the following geographical areas; Greater Gothenburg (incl. Borås, Halmstad, and Alingsås), Öresund Region (Malmö, Lund, Helsingborg and Copenhagen), Greater Stockholm, Mälardalen (Örebro, Västerås and Uppsala) and Eastern Götaland (Jönköping, Linköping, Värnamo and Växjö). The Group manages only commercial properties. The operational segments are identifi ed by geographical fi eld of activity, which is according to how they are followed-up and analyzed by the primarily executive decision maker in the Group. Greater Gothenburg is made up of two operational segments with similar economical characteristics and operations.

Castellum has no larger customers. The single largest lease as well as the single largest tenant corresponds to approx. 1% of the Groups total rental income.

Rental Income Note 3

Group rental income was SEKm 2,919 (2,759). Rental income consists of the rental value with deduction of the value of vacant premises during the year. Rental value refers to the rental income received and the estimated market rent of unlet premises. The rental value also includes supplementary charges for the customer, such as heating, real estate tax and an index supplement. Rental value SEK/sq.m. for the different regions and types of properties are shown in the table below. Rental levels have increased by approx. 1.6% (1%) in comparable portfolio compared with previous year.

Rental value Offi ce/Retail Warehouse/Industrial Total
SEK/sq.m. 2011 2010 2011 2010 2011 2010
Greater Gothenburg 1,277 1,275 731 726 944 935
Öresund Region 1,366 1,408 703 684 1,065 1,060
Greater Stockholm 1,343 1,307 926 912 1,181 1,154
Mälardalen 1,088 1,041 715 690 982 934
Eastern Götaland 999 970 504 495 818 795
Total 1,217 1,201 724 711 995 974

Rental value

Renegotiation Commercial leases, for which rents are paid quarterly in advance, are signed for a certain period of time, which means that a change in the market rents do not have an immediate effect on rental income. Rental levels can only be changed when the lease in question is due for renegotiation. The rental levels of Castellum are considered to be in line with the market.

Commercial leases include a so-called index clause, which provides for an upward adjustment of the rent, corresponding to a certain percentage of the infl ation during the previous year or a minimum upward adjustment.

The lease maturity structure for Castellum's portfolio is shown in the table below, where lease value refers to annual value. An explanation of the relatively small portion in 2012 is that a majority of the leases maturing were already renegotiated in 2011 due to the period of notice. The most common terms for a new lease is 3-5 years with a nine months notice. The average remaining lease duration in the portfolio is 3.1 years (3.2).

Lease maturity structure No. of leases Lease value, SEKm Percentage of value
Commercial, term
2012 1,099 264 9%
2013 1,341 656 24%
2014 1,070 649 23%
2015 707 564 20%
2016 159 239 9%
2017 + 178 422 15%
Total commercial 4,554 2,794 100%
Residential 342 26
Parking spaces and other 2,599 33
Total 7,495 2,853

Economic occupancy rate

Castellum's average economic occupancy rate during 2011 was 89.3% (89.0%). The economic occupancy rate for warehouse and industrial properties amounted to 91.7% (90.4%) and for offi ce and retail properties 88.2% (88.3%). The total annual rental value for vacant premises during the year amounts to approx. SEKm 371.

The gross leasing (i.e. the annual value of total leasing) during the year was SEKm 310 (257), of which SEKm 45 (46) were leasing on new construction, extension and reconstruction. Terminations amounted to SEKm 249 (221), of which bankruptcies was SEKm 18 (12), hence net leasing for the year were SEKm 61 (36). The time difference between reported net leasing and the effect in income thereof is estimated to between 9-18 months.

Economic Offi ce/Retail Warehouse/Industrial Total
occupancy rate 2011 2010 2011 2010 2011 2010
Greater Gothenburg 94.3% 95.1% 96.7% 93.1% 95.4% 94.1%
Öresund Region 86.2% 87.6% 82.8% 84.5% 85.2% 86.6%
Greater Stockholm 78.1% 79.2% 91.4% 91.0% 82.2% 82.8%
Mälardalen 92.3% 90.2% 93.7% 91.8% 92.6% 90.6%
Eastern Götaland 89.8% 88.3% 83.6% 86.6% 88.4% 88.0%
Total 88.2% 88.3% 91.7% 90.4% 89.3% 89.0%

Risk exposure, credit risk

Castellum's lease portfolio has a good risk exposure. The Group has approx. 4,600 commercial leases and 300 residential leases and their distribution in terms of size can be seen in the table below. The single largest lease as well as the single largest customer accounts for only approx. 1% of the Group's total rental income, meaning that Castellum´s exposure to a single customers credit risk is very low. The distribution of commercial leases across various business sectors is also good, as shown in the following table.

Lease value,
Lease size, SEKm No. of leases Percentage SEKm Percentage
Commercial
< 0.25 2,481 33% 228 8%
0.25-0.5 791 10% 288 10%
0.5-1.0 599 8% 425 15%
1.0-3.0 526 7% 877 31%
> 3.0 157 2% 976 34%
Total commercial 4,554 60% 2,794 98%
Residential 342 5% 26 1%
Parking spaces and other 2,599 35% 33 1%
Total 7,495 100% 2,853 100%
Commercial leases distributed by sectors No. of Lease value,
(GICS-code) leases SEKm Percentage
Energy (10) 82 33 1%
Materials (15) 101 107 4%
Capital goods (2010) 612 443 16%
Commercial Services & Supplies (2020) 1,270 388 14%
Transportation (2030) 139 117 4%
Retailing (2550) 547 403 14%
Other Consumer Durables and Services (2510-2540) 556 399 14%
Consumer Staples (30) 117 118 4%
Health Care (35) 212 159 6%
Finance and Real Estate (40) 134 82 3%
Software and Services (4510) 269 166 6%
Technology Hardware and Equipment (4520) 142 107 4%
Telecommunication Services (50) 95 12 1%
Utilities (55) 23 4 0%
Public sector etc. 255 256 9%
Total 4,554 2,794 100%

The table below shows the spread of future rental income for existing lease agreements.

Group Parent Company
Future rental income for existing leases 2011 2010 2011 2010
Contracted rental income year 1
Commercial leases 2,878 2,666
Residential 9 8
Contracted rental income between 2 and 5 years 5,523 5,339
Contracted rental income after more than 5 years 861 921
Total 9,271 8,934

Rents are announced and paid in advance, which means that all the Group's rental receivables of SEKm 20 (10) are overdue.

The parent company consists only of group-wide functions and the turnover mainly consists of intra-group services. Parent company

Property Costs Note 4

Property costs in 2011 was SEKm 1,003 (960), equivalent to SEK 300/sq.m. (298). This amount includes both direct property costs such as costs of operation, maintenance, ground rent and real estate tax, and indirect costs such as leasing and property management.

Operating expenses include electricity, heating, water, facilities management, cleaning, insurance, rent losses and property-specifi c marketing costs. Most of the operating expenses are passed on to the customers as supplements to the rent. For warehouse and industrial properties, however, customers are in most cases directly responsible for most of the operating costs. Operating expenses in 2011 were SEKm 553 (547), equivalent to SEK 165/sq.m. (169). Operating expenses, which are considered to be at a normal level for the business, are dependent on the weather, which means that they vary between both different years and seasons of the year. Energy consumption for heating during the period has been calculated to 87% (116) of a normal year according to the degree day statistics. Operating expenses includes rent losses of SEKm 8 (6) corresponding to 0.3% of rental income.

Maintenance costs are ongoing measures to maintain the property's standard and technical systems. The maintenance costs were SEKm 115 (105), equivalent to SEK 35/sq.m. (34).

Ground rent for the year 2011 was SEKm 24 (19), and mainly related to Greater Stockholm. Ground rent is the fee paid annually to the municipality by the owner of a building on land owned by the municipality. The ground rent for these are currently calculated in a way that the municipality receives a fair real interest rate based on the estimated market value of the site. The site leaseholds are spread over a period of time and are in most cases renegotiated at intervals of 10 to 20 years. At the end of year 2011 Castellum had around 90 properties with site leasehold. Existing site leaseholds mature relatively even over the next 60 years. When notice is given for the site leaseholds shall, in most cases, the site owner (the municipality) compensate Castellum for buildings etc. However there are a few contracts where the municipality can demand that the land is restored.

Operating expenses

Maintenance

Ground rent

Group Parent Company
Future contracted ground rents 2011 2010 2011 2010
Contracted ground rents year 1 22 21
Contracted ground rents between 2 and 5 years 85 82
Contracted ground rents after more than 5 years 597 606
Total 704 709

Real estate tax Group's real estate tax was SEKm 148 (140), equivalent to SEK 44 sq.m. (43). Real estate tax is a state tax based on the property's tax assessment value. Most of the costs are passed on to the tenants, why the affect on the result is marginal. The tax rate for 2011 was 1.0% of the tax assessment value for offi ce/retail properties and 0.5% for warehouse/ industrial.

Leasing and property management The Group's leasing and property management costs for 2011 were SEKm 163 (149), equivalent to SEK 49 /sq.m. (46). Leasing and property management refers to the indirect costs of ongoing property management, comprising the costs of leasing operations, rent negotiation, lease administration, rent debiting, collecting rent and accounting as well as project administration costs and depreciation on equipment in subsidiaries. Of the costs SEKm 92 (89) refers to employee benefi ts and SEKm 6 (6) depreciation on equipment.

Remuneration to

Summary Property costs per square metre, distributed by property category and type of cost are shown below.

Property costs Offi ce/Retail
Warehouse/Industrial
Total
SEK/sq.m. 2011 2010 2011 2010 2011 2010
Operating expenses 201 205 121 127 165 169
Maintenance 44 44 23 21 35 34
Ground rent 7 7 7 6 7 6
Real estate tax 67 66 17 17 44 43
Direct property costs 319 322 168 171 251 252
Leasing and property management (indirect) 49 46
Total 319 322 168 171 300 298

Note 5 Central Administrative Expenses

Central administrative expenses include the costs of portfolio management, company administration and the costs of maintaining the Stock Exchange listing. This involves all of the costs of Castellum AB, comprising group management, treasury department, IT, personnel, investor relations, annual report, audit, and depreciation on equipment etc. At the subsidiary level, the fi gures include, costs for the MD and fi nancial manager as well as costs of preparing the annual report, audit etc. Of the costs, excl. the incentive plan described below, SEKm 48 (44) refers to employee benefi ts and SEKm 0 (0) is depreciation on equipment.

Central administrative expenses also include costs relating to a profi t and share price-related incentive plan for senior management and other senior executives, to the order of SEKm 14 (16).

Remuneration to Group Parent Company
auditors Remuneration to auditors 2011 2010 2011 2010
Audit assignment 3 3 1 1
Audit business in addition to the audit assignment 0 0 0 0
Tax consulting 2 1 0 0
Other consulting 0 0 0 0
Total 5 4 1 1

Of the Group's total remuneration of SEK 4,583,000 (4,379,000), SEK 4,184,000 (4,103,000) refers to KPMG and the remainder to Ernst & Young.

Interest rate and Financial Group Parent Company
Income 2011 2010 2011 2010 Note 6
Interest rate income 2 1 0 0
Received Group contributions, subsidiary 0 160 180
Anticipated dividend, subsidiaries 612 658
Interest rate income, subsidiaries 722 648
Other fi nancial income 0 0 0 0
Total 2 1 1,494 1,486

Interest rate income, for the Group as well as for the Parent Company, is related to receivables valued to accrued acquisition value.

Group Parent Company
Interest rate and Financial Costs 2011 2010 2011 2010 Note 7
Interest rate costs 661 575 645 560
Interest rate costs, subsidiaries 67 76
Other fi nancial costs 1 0 0
Total 662 575 712 636

Net fi nancial items were SEKm – 660 (– 574). During the year, interest costs of SEKm 12 (8) were capitalized in connection with investments in the real estate portfolio. The average interest rate level were 4.1% (3.7%). When capitalizing interest costs the average rental level has been used.

Of the interest rate costs SEKm 465 are related to liabilities valued to accrued acquisition value.

Changes In Value Note 8

In 2011, transaction volumes in the Swedish property market amounted to approx. SEK 105 billion (100) for larger deals, which is in line with last year. Fourth-quarter volumes amounted to approx. SEK 30 billion (39).

Buyers were mostly still domestic and transactions mainly concerned offi ce buildings, whereas volumes for residential rental-properties decreased slightly compared to previous years. Real estate transactions have been conducted in all high-growth regions, of which 40% were conducted in Greater Stockholm.

Castellum estimates that property prices are stable and that the liquidity decrease at year-end is not due to buyers and sellers having varied viewpoints on pricing, but rather the result of a stretched credit market.

The change in value in Castellum's portfolio during the year amounted to SEKm 194 (1,222), corresponding to approx. 0.6%. The change in value mainly relates to acquisitions and project gains. No general change in the the required yield in the internal valuations has been made during the year. On the property level, however, adjustments has been made on both individual required yield and future cash fl ow. The change in value also covers SEKm 30 due to sales of 4 properties where the sale price of SEKm 107 exceeded the valuations by 39%.

It should be noted that, since property valuations include an uncertainty range of normally 5-10%, also the changes in value include a not insignifi cant uncertainty.

Castellum utilizes interest rate derivatives to achieve the desired interest rate maturity structure. If the agreed interest rate deviates from the market interest rate, irregardless credit margins, there is a theoretical surplus or sub value in the interest rate derivatives where the non-cash-fl ow affecting changes in value are reported in the income statement. Castellum also has a few derivatives in order to hedge currency fl uctuation in the investment in Denmark. The value in the derivatives portfolio has changed mainly due to changes in long-term market interest rates by SEKm –429 (291) and the value was SEKm –1,003 (–574) at the end of the year.

The income tax in Sweden for limited liability companies is 26.3%. In the income statement, the income tax is recorded as two entries, current tax and deferred tax. Current tax is based on the taxable income for the year, which is lower than the recorded net income for the year. This is mainly an effect of the possibility to:

  • use tax depreciation on buildings,
  • make tax deductions for certain reconstructions of the properties, which are capitalized in the accounts,
  • utilize existing tax loss carry forwards.

The deferred tax is a provision for the tax which will be paid in the future when the properties are directly sold, and the depreciation for tax purposes and the capitalized investments deducted for tax purposes are reversed.

As shown in the table below, there is in principle no taxable income for 2011, because Castellum uses the above mentioned depreciation for tax purposes and tax deductions for certain reconstructions. The current paid tax that occur is because a few subsidiaries are not allowed to make fi scal group contributions.

Investments properties

Derivates

Basis Basis
Tax calculation for the Group 31-12-2011 current tax deferred tax
Income from property management 1,173
Deductions for tax purposes
depreciation – 636 636
reconstructions – 365 365
Other tax allowances – 80 41
Taxable income from property management 92 1,042
Properties sold 8 – 15
Changes in value on properties 164
Changes in value on interest rate derivatives – 429
Taxable income before tax loss carry forwards – 329 1,191
Tax loss carry forwards, opening balance
Tax loss carry forwards, closing balance
– 1,406
1,772
1,406
– 1,772
Taxable income 37 825
Of which 26.3% current/deferred tax – 10 – 217

The total tax may be different from nominal tax in those cases where there are recorded income / costs which are not taxable / tax deductible or as an effect of other tax adjustments. The total tax cost shown in Castellum's income statement 2011 is less than nominal tax, which mainly depends on non taxable sales of properties through company. The effective tax on income from property management, without consideration taken to the use of tax loss carry forwards, can be calculated to 2%. As shown in the table above the remaining tax loss carry forward are calculated to SEKm 1,772.

For the parent company deferred tax of SEKm 24 (60) has been recorded directly in subsidiary shares since the underlying transaction has been recorded in that way.

Parent Company
2011 2010 2011 2010
938 2,654 311 917
– 247 – 698 – 82 – 241
161 173
15
5 8 – 1 –1
– 227 – 690 78 – 69
2011 2010 2011 2010
Group
Group
Parent Company

Note 10 Number of

employees Average number of employees (all in Sweden) 239 229 14 14

Salaries, remuneration and benefi ts

During 2011, the parent company had 6 (7) board members, of which 2 (2) are women, while the total number of board members in the Group's subsidiaries were 20 (21), of which 5 (5) are women. The Group and the parent company alike have 10 (10) senior executives, of which 2 (2) are women. The total number of senior executives in the subsidiaries' managerial bodies and the senior executives of the Group were 39 (39), of which 10 (10) are women.

of which women 90 89 7 6

Group Parent Company
2011 2010 2011 2010
Salaries, remuneration and benefi ts
Chairman of the Board 0.5 0.5 0.5 0.5
Other Board members (SEK 240,000 each) 1.2 1.3 1.2 1.3
Chief Executive Offi cer
Fixed salary 3.1 3.0 3.1 3.0
Variable remuneration 2.1 2.4 2.1 2.4
Benefi ts 0.1 0.1 0.1 0.1
Other senior executives (Group:9, Parent Company:3)
Fixed salary 12.3 12.1 4.6 4.5
Variable remuneration 8.7 9.4 3.0 3.3
Benefi ts 0.7 0.6 0.2 0.2
Other employees 104.0 95.8 10.3 10.6
Total 132.7 125.2 25.1 25.9
Contractural pension costs
Chief Executive Offi cer 0.7 0.7 0.7 0.7
Other senior executives (Group:9, Parent Company:3) 3.6 3.6 1.1 1.1
Other employees 10.6 11.9 0.7 0.8
Total 14.9 16.2 2.5 2.6
Statutory social costs incl. special employer's contributions
Chairman of the Board 0.2 0.2 0.2 0.2
Other Board members 0.4 0.4 0.4 0.4
Chief Executive Offi cer 1.8 1.9 1.8 1.9
Other senior executives (Group:9, Parent Company:3) 7.4 7.6 2.7 2.8
Other employees 34.6 33.6 3.4 3.5
Total 44.4 43.7 8.5 8.8
Total 192.0 185.1 36.1 37.3

The executive management includes the Chief Executive Offi cer, the Deputy Chief Executive Offi cer with responsibility for business development, the Financial Director and Finance Director of Castellum AB and the six Managing Directors of the subsidiaries.

Executive management

Remuneration and benefi ts

Remuneration and benefi ts for the executive management are prepared by the remuneration committee and decided by the Board of Directors. The remuneration comprises a fi xed salary and a variable remuneration according to an incentive plan described below. During the three-year period of the plan, the variable remuneration can amount to a maximum of three years' salary.

The executive management, ten persons in total, have an incentive plan that comprises two parts:

  • One profi t-based part based on the result of income from property management compared to the previous year, and an overall determination of the development of certain soft factors such as customer and personnel satisfaction. For the full outcome requires that the growth in income from property management per share is 10% per year. When growth is in the range 0-10%, a linear calculation of the incitament is made. The profi t-based part is paid out yearly as salary after the year-end closing and can total no more than six months' salary per year, equal to a cost of SEKm 10 for Castellum, including social costs. The plan runs out at the end of 2013.
  • One share-price-based part based on the total return on the Castellum share during a three-year period, both in nominal fi gures and compared with index for real estate shares in Sweden, the Eurozone and Great Britain. In order to receive full outcome of the incentive program, the total return must be at least 50% during the period and the total return has to exceed the index development by at least 5%-units during the period. When growth is in the ranges 0-50% and 0-5%-units respectively, a linear calculation of the incentive is made. Any payments due is paid as salary after the measurement period of June 2011 – May 2014. During the three-year period, the share-price-based part can total no more than one-and-a-half-years' salary, equal to a cost for Castellum of SEKm 30, including social costs.

Executives in receipt of variable remuneration according to the incentive plan must acquire Castellum shares for at least half of the amount of the payment due after tax. The paid incentive does not affect pension contributions. Pensions

Persons in the Executive management have defi ned contribution pensions with no other obligations for the company than to pay an annual premium during the time of employment. This implies that these persons, after completed employment, have the right to decide on their own, the time-frame during which the defi ned payments and subsequent return will be received as pension. The retirement age for the CEO and other members of executive management is 65 years. Notice of dismissal

The period of notice shall, when given from the company, not exceed 24 months regarding the Managing Director, with an obligation to continue his or her work during the fi rst six months. Period of notice is 12 months for any other member of the executive management of the company, with an obligation to continue his or her work during the fi rst six months. When given by the Managing Director or any other member of the executive management of the company, the period of notice is to be six months. During the period of notice, salary and other benefi ts are paid, with deduction of salary and remuneration deriving from another employment or activity.

Pensions for other
employees
Other employees in Castellum have defi ned contribution pensions, with no other obligations for the company than to
pay an annual premium during the time of employment. This implies that these persons, after completed employment,
have the right to decide on their own, the time-frame during which the defi ned payments and subsequent return will
be received as pension. However, there is an exception for about 25 employees within the Castellum Group who instead
have defi ned ITP-plans with regular payments to Alecta. Insurance premiums paid to Alecta during the year amounted
to SEKm 1 (1). The surplus in Alecta may be distributed to the insurance holder and/or the insured. Alecta's surplus in
the collective consolidation level as of December had not been made offi cial at the time of signing of this annual report
and can therefore not be reported. Alecta's latest offi cial consolidation level was as of September 2011 113% (Decem
ber 2010: 146%). The collective consolidation level is made up of the market value of Alecta's assets as a percentage
of the insurance obligations calculated according to Alecta's assumptions for calculating the insurance, which do not
comply with IAS 19.
Absence due to
illness
Absence due to illness for the year was 2% (2%), of which 0%-unit (0) was for long-term sick leave. Absences
due to illness for men and women were 1% (1%) and 3% (3%) respectively. Absences due to illness were 1%
(1%) for the age group 29 years and younger, 2% (1%) for the age group 30-49 years and 2% (3%) for the age

for long-term sick leave.

group 50 years or older. Absence due to illness for the parent company was 1% (1%), of which 0%-unit (0) was

Group
Note 11 Investment Properties 2011 2010
Schedule of the changes during the year
Opening balance 31,768 29,267
New construction, extension and reconstruction 1,158 881
of which capitalized interest costs 12 8
Acquisitions 857 625
Sales – 77 – 204
Unrealized changes in value 164 1,199
Currency transalation – 3
Closing balance 33,867 31,768
Schedule of tax assessment value
Buildings 14,441 13,600
Land 4,000 3,829
Total tax assessment value 18,441 17,429
Rental income from investment properties 2,919 2,759
Property costs for investment properties 1,003 960
The Parent company does not own any investment properties.
Investments during
the year
During 2011, Castellum made investments totalling SEKm 2,015 (1,506), of which SEKm 857 (625) were acquisitions
and SEKm 1,158 (881) new construction, extensions and reconstructions. Of the total investments SEKm 728 related
to Greater Gothenburg, SEKm 541 to Öresund Region, SEKm 352 to Mälardalen, SEKm 226 to Greater Stockholm and
SEKm 168 to Eastern Götaland.

Signifi cant obligations Castellum has no signifi cant obligations to acquire or sell any investment property. However, Castellum is obligated to complete ongoing investments of a further SEKm 1,100 in addition to what is accounted for in the balance sheet.

Larger ongoing investments Investment, SEKm of which remaining, SEKm To be completed
Lindholmen 28:3, Gothenburg 280 233 Quarter 2 2013
Atollen, Jönköping 169 142 Quarter 4 2013
Fullriggaren 4, Malmö 154 73 Quarter 1 2013
Forskaren 2, Lund 149 58 Quarter 4 2012
Gården 15, Linköping 106 60 Quarter 1 2013

Valuation model According to accepted theory, the value of an asset consists of the net present value of the future cash fl ows that the asset is expected to generate. This section aims to describe and illustrate Castellum's cash fl ow-based model for calculation of the value of the real estate portfolio. The value of the real estate portfolio is calculated in this model as the total present value of net operating income minus remaining investments on ongoing projects, during the next nine years and the present value of the estimated residual value in year ten. The residual value in year ten consists of the total present value of net operating income during the remaining economic life span. The estimated market value of undeveloped land and building rights are added to this.

The required yield and the assumption regarding future real growth are of crucial importance for the calculated value of the real estate portfolio, as they are the most important value-driving factors in the valuation model. The required yield is the weighted cost of borrowed capital and equity. The cost of borrowed capital is based on the market interest rate for loans. The cost of equity is based on a "risk-free interest rate" equivalent to the long-term government bond rate with the addition of a "risk premium". The risk premium is unique to each investment and depends on the investor's perception of future risk and potential.

Castellum records the investment properties at fair value and has made an internal valuation of all properties as of December 31, 2011. The valuation was carried out in a uniform manner, and was based on a ten-year cash fl ow model, which was described in principle above. The internal valuation was based on an individual assessment for each property of both its future earnings capacity and its required market yield.

Assumptions of the cash fl ow

In assessing a property's future earnings capacity we took into account an assumed level of infl ation of 1.5% and potential changes in rental levels from each contract's rent and expiry date compared with the estimated current market rent, as well as changes in occupancy rate and property costs. In the valuation, the economic occupancy rate gradually improves during the 10-years period and reaches 96%. Included in property costs are operating expenses, maintenance, ground rent, real estate tax, and leasing and property administration.

Assumptions per property category 31-12-2011, year 1 Offi ce/Retail Warehouse/Industrial
Rental value SEK/sq.m, 1,239 734
Vacancy 11% 10%
Direct property cost SEK/sq.m. 323 173
Property management SEK/sq.m 35 25

Assumptions of the required yield

The required yield on equity is different for each property, and is based on assumptions regarding real interest rate, infl ation and risk premium. The risk premium is different for each property and can be divided into two parts - general risk and individual risk. The general risk makes up for the fact that a real estate investment is not as liquid as a bond, and that the asset is affected by the general economic situation. The individual risk is specifi c to each property, and comprises a weighted assessment of; the property's category, the town/city in which the property is located, the property's location within the town/city with reference to the property's category, if the property has the right design, is appropriate and makes effi cient use of space, the property's technical standard with regard to such criteria as the choice of materials, the quality of public installations, furnishing and equipment on the premises and apartments and the nature of the lease agreements, with regard to such issues as the length, size and number of agreements and where appropriate adjustment for leasehold land.

In order to calculate the required yield on total capital, an assumption has been made about the cost of borrowed capital of 5.5%. The required yield of borrowed capital comprises the real interest rate and infl ation. The loan to value ratio is assumed to be 55%-65%, depending on the property category.

The required yield on total capital is calculated by weighting the required yield on equity and the cost of borrowed capital depending on the capital structure. The required yield on total capital is used to discount the expected 10-year future cash fl ows, while the residual value is discounted by calculating the return on total capital minus growth which is set equal to the infl ation in order to not assume perpetual real growth

The calculated required yield is then calibrated compared to the markets required yield. To get an opinion about the markets required yield Castellum follows completed transactions. In an inactive market within a certain area or for a certain type of property, Castellum compares the data from transactions completed in a similar area or for a similar type of property. In the absence of completed transactions the opinion is based on existing macroeconomic factors.

The assumptions that form the basis for Castellum's valuation are shown in the table below.

Assumptions per property category 31-12-2011 Offi ce/Retail Warehouse/Industrial
Real interest rate 3.0% 3.0%
Infl ation 1.5% 1.5%
Risk 4.9% – 11.5% 6.5% – 13.7%
Return on equity 9.4% – 16.0% 11.0% – 18.2%
Interest rate 5.5% 5.5%
Loan to value ratio 65% 55%
Return on total capital 6.8% – 9.2% 8.0% – 11.2%
Weighted d:o, discounted factor year 1-9 7.9% 9.1%
Weighted d:o, discounted factor residual value* 6.4% 7.6%
*(required yield on total capital minus growth equal to infl ation)

The change in value in Castellum's portfolio during the year amounted to SEKm 194 (1,222), corresponding to approx. 0.6% (4%). The change in value mainly relates to acquisitions and project gains. No general change in the the required yield in the internal valuations has been made during the year. On the property level, however, adjustments has been made on both individual required yield and future cash fl ow. The change in value also covers SEKm 30 due to sales of 4 properties where the sale price of SEKm 107 exceeded the valuations by 39%.

The average valuation yield for Castellum's real estate portfolio, excluding development projects and undeveloped land, can be calculated to 7.2% (7.2%). Contracted rental levels are considered to be in line with the market levels.

Average valuation yield, SEKm 2011 2010
Net operating income, properties according to income statement 1,916 1,799
Reversed leasing and property administration 163 149
Net operating income, ongoing development projects 0 – 2
Properties acquired/completed as if they had been owned the whole year 64 49
Properties sold – 1 – 8
Net operating income excl. leasing and property admin. for properties as if
they had been owned during the whole year, excl. projects and land 2,142 1,987
Adjusted for:
Index adjustments 2012, 2% 64 45
Real occupancy rate, 94% at the lowest 229 225
Property costs to a normal year 25
Property administration, 30 SEK/sq.m. – 102 – 98
Normalized net operating income 2,333 2,184
Valuation excl. building rights of SEKm 460 (496) 32,594 30,213
Average valuation yield 7.2% 7.2%

Development projects and building rights

Projects in progress have been valued using the same principle, but with deductions for remaining investment. Sites with building rights and undeveloped land have been valued on the basis of an estimated market value per square metre on average approx. SEK 980 per sq.m. (970).

The value of the real estate portfolio

The internal valuation shows a fair value of SEKm 33,867 (31,768), which is an increase in value of approx. 0.6% (4%). Of the value approx. SEKm 3,340 are properties hold through site leasehold rights, with a rental income of SEKm 352. The table below shows the fair value distributed by property category and region.

Warehouse/ Projects
Property value, SEKm 31-12-2011 Offi ce/Retail Industrial and land Total
Greater Gothenburg 6,012 4,862 149 11,023
Öresund Region 5,271 1,750 282 7,303
Greater Stockholm 4,352 1,945 260 6,557
Mälardalen 4,241 913 14 5,168
Eastern Götaland 2,968 740 108 3,816
Total 22,844 10,210 813 33,867

External valuation In order to provide further assurance and validation of the valuation 133 properties, representing 51% of the value of the portfolio, were valued by NAI Svefa. The properties were selected on the basis of the largest properties in terms of value, but also in order to refl ect the composition of the portfolio as a whole in terms of category and geographical location of the properties. NAI Svefa's valuation of the selected properties amounted to SEKm 17,058, within an uncertainty range of +/– 5-10% on property level. The size of the uncertainty range varies depending on each property's category and location. Castellum's valuation of the same properties amounted to SEKm 17,240, i. e. a net change of SEKm 182 corresponding to 1%. Gross deviation was SEKm +347 respectively SEKm –529 with an average deviation of 5%.

Uncertainty range and sensitivity analysis

A property's market value can only be confi rmed when it is sold. Property valuations are calculations performed according to accepted principles and on the basis of certain assumptions. The value range of +/– 5-10% often used in property valuations should be seen as an indication of the uncertainty that exists in such assessments and calculations. In a less liquid market, the range can be bigger. For Castellum, an uncertainty range of +/– 5%, means a range in value of +/– 1,693 SEKm which corressponds to SEKm 32,174 – 35,560.

Sensitivity analysis +/–1%-unit Effect on value, SEKm
Rental value SEK/sq.m. +/– 463
Economic occupancy rate +/– 493
Property costs SEK/sq.m. –/+ 124
Required yield = Discount rate –/+ 4,800

The sensitivity analysis shown above illustrates how a +/- 1%-unit change in growth assumptions in future cash fl ow and required yield affects the valuation. The sensitivity analysis is however not realistic thus one isolated parameter rarely changes, since the assumptions made are linked together regarding cash fl ow and required yield.

Group Parent Company
Equipment 2011 2010 2011 2010 Note 12
Opening acquisition value 60 56 3 3
Acquisitions 9 6 1 0
Sales / Retirement of assets – 8 – 2 0 0
Closing acquisition value 61 60 4 3
Opening depreciation – 48 – 43 – 3 – 3
Sales / Retirement of assets 8 1 0 0
Depreciation for the year – 6 – 6 0 0
Closing depreciation – 46 – 48 – 3 – 3
Book value 15 12 1 0

Shareholders' Equity and Net Asset Value Note 13

Share capital

The share capital as of 31 December, 2011 consisted of 172,006,708 registered A-shares with one vote per share and a par value of 0.50 per share. All shares are fully paid. Of the registered shares, Castellum owns 8,006,708, to a total nominal value of SEK 4,003,354. The number of outstanding shares thus totals 164,000,000, which is the same amount as for the corresponding period previous year. The repurchased shares do not carry any voting rights and are not entitled to dividend. There are no restrictions regarding dividend or other types of repayment. There is no potential common stock such as convertible shares, or preferential rights to accumulated dividend (preference shares).

Items in shareholders´

equity

Development of Number Par value Share capital,
share capital Date of shares per share SEK
Formation A-shares 27-10-1993 +500 100 +50,000
New share issue, A-shares 27-09-1994 +999,500 100 +99,950,000
Share split 50:1 25-03-1997 +49,000,000 2
IPO 23-05-1997 50,000,000 2 100,000,000
New share issue, C-shares 12-07-2000 +7,142,857 2 +14,285,714
Redemption, A-shares 12-07-2000 –6,998,323 2 –13,996,646
Redemption, C-shares 13-11-2000 –7,142,857 2 –14,285,714
Share split 4:1 27-04-2006 129,005,031 0.50
Year-end 31-12-2011 172,006,708 0.50 86,003,354

Other capital contribution

Other capital contribution is shareholders´ equity contributed by shareholders.

Currency translation reserve

Currency translation differencies as a result of foreign operations.

Currency hedge reserve

Refers to the effective part of unrealized changes in value related to currency derivates used to hedge investments in foreign operations.

Retained earnings

Retained earnings relates to earnings earned in the Group. The Group's earlier depositions to the restricted reserves is included in this item.

Restricted and non-restricted equity in the parent company

According to the Swedish Companies Act shareholders' equity is made up of restricted (non-distributable) and nonrestricted (distributable) equity. Dividend to the shareholders may only be such that there after the distribution is full coverage for restricted equity in the parent company. Further, distribution of profi ts may only be made if it is justifi ed with respect to the demands put on the amount of equity needed by the type of business, extent and risk of operations, company and Group consolidation needs, liquidity and fi nancial position in general.

During the year 2000, Castellum repurchased 8,006,708 of the company's own shares for a total of SEKm 194, equivalent to 4.7% of the total registered number of shares. Since then no repurchase of the company's own shares have been made.

Dividend is proposed by the Board of Directors according to the rules of the Companies Act and decided by the annual general meeting. The proposed dividend, not yet paid out, for the fi nancial year 2011 is SEK 3.70 per share, SEKm 607 in total. The amount is recorded as debt after the annual general meeting has approved the dividend.

Own shares repurchased

Dividend

Net asset value Net asset value can be calculated both long and short term. Long term net asset value is based on the balance sheet with adjustments for items that will not lead to any short term payment, such as in Castellum's case, interest rate derivatives and deferred tax liability. This means that shareholders' equity according to the balance sheet shall increase with SEKm 1,003 and SEKm 3,714 respectively.

Actual net asset value is equity according to the balance sheet adjusted for deferred tax liability. Present accounting principles states that the deferred tax liability shall be recognized at nominal 26.3%, while the real deferred tax is substantially lower, due to the possibility so sell properties in a taxeffi cient way and the time factor. The present assessment is that the discounted real deferred tax liability does not exceed 5%, meaning that an additional SEKm 2,993 should be recorded in equity.

The value range of +/– 5-10% often used in property valuations should be viewed as an indication of the uncertainty that exists in assessments and calculations made. For Castellum this is equal to a range of SEKm +/– 1,608 after tax.

Net asset value SEKm SEK/share
Equity according to the balance sheet 11,203 68
Reversed
Derivatives according to the balance sheet 1,003 6
Deferred tax according to the balance sheet 3,714 23
Long term net asset value (EPRA NAV) 15,920 97
Deduction
Derivatives as above – 1,003 – 6
Estimated real liability, deferred tax 5% – 721 – 4
Actual net asset value (EPRA NNNAV) 14,196 87
Uncertainty range valuation of properties +/– 5% after tax +/– 1,608 +/– 10

Capital structure Castellum will have a stable capital structure with low fi nancial risk, meaning a loan to value ratio not permanently exceeding 55% and an interest coverage ratio of at least 200%.

In the balance sheet there is, besides shareholders equity, liabilities which in principle are both interest free and amortization free and therefore can be considered as shareholders equity. The real estate industry therefore uses loan to value as a key ratio for capital structure and not solidity. For the same reason the net asset value can be calculated in different ways, which is shown above.

Castellum´s objective is based on growth in cash fl ow and is not directly related to the net asset value. The objective is an annual growth in cash fl ow, i.e., income from property management per share, of at least 10%. In order to achieve this objective, net investments of at least 5% of the property value will be made yearly. At the moment, this is equivalent to approx. SEKm 1,700. All investments will contribute to the objective of growth in income from property management within 1-2 years and have a potential asset growth of at least 10%. Sales of properties will take place when justifi ed from a business standpoint and when an alternative investment with a higher return can be found.

Group Parent Company
Note 14 Liabilities 2011 2010 2011 2010
Interest-bearing liabilities due within
one year of the balance sheet date 608 230
Other non-interest-bearing liabilities due within
one year of the balance sheet date 1,091 997 154 157
Interest-bearing liabilities due within
1-5 years of the balance sheet date 9,314 9,019 11,500 10,710
Interest-bearing liabilities due more than
5 years after the balance sheet date 7,846 6,762 5,700 5,700
Total excl. deferred tax liability and interest rate derivatives 18,251 16,778 17,962 16,797

During 2012, current interest-bearing liabilities amounting to SEKm 2,138 (1,777) are due for payment, but since they are covered by unutilized long-term credit agreements, they are treated as long-term interest-bearing liabilities.

Note 15 Deferred Tax Liability / Asset

A realization of all assets and liabilities to book value for the Group and utilization of all existing tax loss carry forward would, as is shown in the table below, result in a taxable income of SEKm 14,425 (13,423), equivalent to a tax payment of SEKm 3,794 (3,531). Castellum has deferred tax of SEKm 80 which relates to properties aquired during the year accounted for as asset acquisitions. According to present regulations the deferred tax at the time of the accquistion is not allowed to be accounted for in the balance sheet, which is shown in the table below.

As far as the parent company is concerned the deferred tax asset of SEKm 271 (169) consists of 26.3% of the unutilized tax loss carry forwards of SEKm 1,031 (643).

Castellum´s tax loss carry forwards were estimated to SEKm 1,772 (1,406) December 31, 2011. The change may be seen in the table in note 9

Tax loss carry forward

When calculating the tax effect on a sale of all properties in the Group, the book value in the Group of SEKm 33,867 (31,768) must be compared to the residual value for tax purposes in the legal entity, which amounts to SEKm 17,670 (16,939). This means that if all of Castellum's properties were sold, the taxable net profi t would exceed the recorded profi t in the Group by SEKm 16,197 (14,829). Previous write-downs where tax deductions have been assessed to amount approx. SEKm 220. These may be reversed in the case of future increases in value.

Surplus- and sub value of properties for tax purposes

2011 2010
Deferred tax liability Basis Tax 26.3% Basis Tax 26.3%
Tax loss carry forwards
Opening balance 1,406 370 1,885 496
Change of the year in the income statement 366 96 – 479 – 126
Closing balance in the balance sheet 1,772 466 1,406 370
Difference between the properties book and tax basis
value
Opening balance – 14,829 – 3,901 – 12,624 – 3,320
Change of the year in the income statement – 1,173 – 317 – 2,142 – 564
Company acquisition/sale of properties – 195 – 42 – 63 – 17
Closing balance –16,197 – 4,260 – 14,829 – 3,901
Deductible relating to asset acquisitions 304 80 109 29
Closing balance in the balance sheet – 15,893 – 4,180 – 14,720 – 3,872
Total
Opening balance – 13,314 – 3,502 – 10,739 – 2,824
Change of the year – 807 – 212 – 2,575 – 678
Closing balance – 14,121 – 3,714 – 13,314 – 3,502

Derivatives Note 16

Castellum's strategy of using interest rate derivatives in order to manage the interest rate risk and achieve the desired interest rate maturity structure means that there may be changes in value of the interest rate derivatives portfolio from time to time. These changes occur partly due to changes in market interest rates and partly due to the time factor. As of December 31, 2011 the market value of the interest rate derivatives portfolio amounted to SEKm –1,003 (–574).

In the balance sheet derivates are accounted for as long-term liabilities since the amount will not be settled in cash. Although a theoretical, during 2012 matured amount, can be mathematical calculated to SEKm 197.

The table below shows the interest rate derivatives portfolio's nominal net amount and market value as of 31-12-2011 and the market value of the portfolio with a +/- 1%-unit change in the interest rate. Interest rate derivatives which include an option has, based on the date of termination, been reported in the same time segment as prior to the assumed change in interest rate.

End Amount, Acquistion Market value, Average Market value Market value
date SEKm value, SEKm SEkm interest rate interest +1%-unit interest -1%-unit
2012 100 – 1 3.3% 0 – 1
2013 1,800 – 55 4.0% – 26 – 85
2014 600 – 48 3.8% – 31 – 65
2015 1,450 – 138 4.6% – 92 – 187
2016 3,150 – 272 3.6% – 161 – 421
2017+ 3,700 – 489 3.8% – 201 – 833
Total 10,800 – 1,003 3.9% – 511 – 1,592

Interest rate derivates with a market value of SEKm 0 is not included in the table above, since a change in the market interest rate has an unsignifi cant effect on the market value.

Long-term Interest-bearing Liabilities Note 17

Castellum's funding and management of fi nancial risk are conducted in accordance with the fi nancial policy adopted by the Board of Directors.

The objectives in the fi nancial policy are:

  • Maintaining a stable capital structure, with a loan to value ratio not exceeding 55% in the long run and an interest coverage ratio of at least 200%.
  • Securing the required liquidity and long-term funding.
  • Achieving low and stable net interest expense within the given risk authorization.

The fi nancial policy outlines the given authorization and limits for managing fi nancial risks defi ned in the policy, overall delegation of responsibilities and how fi nancial risk should be reported. Financial policy

Objectives

All fi nancial risk management is centralized in the parent company and the fi nance function works as the Groups treasury department. The fi nancial operations in Castellum shall be run in such manner that the costs for fi nancial risk management are minimized. Meaning that Castellum carries out fi nancial transactions based on estimations of the Group's overall long-term funding needs, liquidity and increased interest rate risk. Hence, the fi nancial risk management is carried out on portfolio level. Portfolio management of funding means that an intra Group transaction, such as an internal loan, is not replicated by an identical external transaction. Instead loans are drawn under short or long term credit agreements, based on the Group's overall funding needs. For a cost effective management of the interest rate risk an assessment is made of the interest rate risk that occurs when a payment is made or a new loan is drawn with short fi xed interest term under different credit agreements, followed by interest rate derivative transactions are made in order to achieve the desired fi xed interest term on the total amount of debts. The internal bank works with a cash pool system of bank accounts for the Group´s liquidity fl ows.

Policy Objective/Mandate Outcome
Loan to value ratio Not in the long run exceeding 55% 51%
Interest coverage ratio At least 200% 278%
Interest rate risk
– average fi xed interest rate 0.5-3 years 2.7 år
term
– proportion maturing within 6 No more than 50% 34%
months
Currency risk
– investment 60-100% funded in local currency 97%
– other currency risk Not allowed No exposure
Funding risk At least 50% interest bearing liabilities have a 100%
duration of at least 2 years.
Counterparty risk Credit institutions with high ratings, at least Satisfi ed
"investment grade"
Liquidity risk Liquidity reserve in order to fulfi ll payments SEKm 2,731 in unutilized
due credit agreements

The parent company holds a function, separated from the treasury department, that provides accounting and independent control of the fi nancial management and the fi nancial risks. Financial risks defi ned in the fi nancial policy, are reported quarterly to the Board of Directors. In order to improve and adjust the fi nancial risk management the Board of Directors reveiws of the fi nancial policy each year.

Borrowing, maturity structure and interest rates

Properties are long term assets and demands long term funding where the ratio between equity and interest bearing debt is set to obtain necessary funding. The loan to value ratio is the fi nancial key ratio that describes the proportion of the property´s value covered by loans. Castellum´s objective is a loan to value ratio not exceeding 55% in the long run. The loan to value ratio at year end was 51% (50%).

Demands for long-term funding make Castellum look for long term capital in credit agreements in order to minimize the risk of refi nancing. To reach maximum fl exibility utilized loans are revolving, i e the turnover interest rate is normally within 1-3 months. Short term revolving loans leads to great fl exibility when it comes to fi xed interest rate terms, basis for interest rate and the opportunity for amortization at every turnover occasion without any marginal breaking costs or other compensation to lenders. The objective is to minimize the interest-bearing liabilities, and cash is therefore used primarily to repay outstanding debts.

In order to secure Castellum's need liquidity and long-term funding, Castellum are regularly re-negotiating and, when needed entering into new credit agreements or forms of borrowing. At the year-end Castellum had long term credit agreements totalling SEKm 19,374 (18,062), of which SEKm 2,311 (2,293) was unutilized, long term bonds totalling SEKm 0 (200), outstanding commercial papers totalling SEKm 2,235 (1,377), short term credit agreements totalling SEKm 420 (520). The average duration of Castellum's long-term credit agreements as of 31-12-2011 was 5.1 years (5.0).

Margins and fees in long term credit agreements had an average duration on 3.5 years (2.6). After deducting liquidity of SEKm 97 (12), net interest bearing liabilities were SEKm 17,063 (15,769), giving Castellum easy access to new funding for investments in new constructions, extensions and reconstructions. During the year new long term agreements totalling SEKm 1,312 have been signed and exisitng credit agreements totalling SEKm 5,800 have been renegotiated and extended.

Credit agreements/-limits Amount, SEKm Utilized, SEKm
Long term credit agreements 19,374 14,925
Short term credit agreements 420
Liquidity – 97
Total credit agreements 19,794 14,828
Commercial paper program 4,000 2,235
Total 23,794 17,063

The debt maturity structure for the credit agreements, as may be seen in the table below, shows when in time the credit agreements fall due for renegotiation or repayment.

Debt maturity structure Credit agreements, SEKm Utilized, SEKm
1-2 years 207 7
2-3 years 7 7
3-4 years 7,307 4,257
4-5 years 4,007 4,007
5-10 years 7,846 6,647
Total long term credit agreements 19,374 14,925
Short term credit agreements (0-1 year) 2,655 2,138
Total credit agreements 22,029 17,063
Unutilized credits in long term credit agreements 2,311

The credit agreements can be divided into following categories:

  • Loans pledged by Castellum's receivables from subsidiaries, including mortgages. Utilized credits secured by pledged mortgages were at the end of the year SEKm 14,797. In addition to the mortgages the majority of the credit agreements include commitments regarding loan to value ratio and interest coverage ratio, so called fi nancial covenants. In all cases the fi nancial covenants are issued with in safe margins to Castellum´s objectives for the capital structure and state a loan to value ratio not exceeding 65% and an interest coverage ratio of at least 150%.
  • Loans directly to subsidiaries pledged by mortgages. Loans directly to subsidiary have, in the majority of the cases, also a guaranteed commitment from the parent company.
  • Unsecured loans.
  • Issuing of bonds, without pledged securitiy.
  • Issuing of commercial papers, without pledged security.

Irrespective of the type of credit agreement they include usual conditions for cancellation and sometimes also conditions for renegotiation if there is a material adverse change in business or in the case of discontinued stock exchange listing. If the lender, in such renegotiation calls on the right and the parties cannot agree, the agreements contain specifi ed terms for the time of termination for those agreements covered by such conditions.

Changes in market interest rates affect net fi nancial items. How quickly and by how much largely depends on the chosen fi xed interest term. To ensure low and stable net fi nancial items in terms of cash fl ow Castellum has generally chosen to fi x interest rates for a relatively long period. This limits the immediate effect in net fi nancial items caused by changes in the market interest rates.

For the same reason Castellum has chosen to sign mainly long-term credit agreements with agreed spreads with banks. However changes in both of these markets will over time affect net fi nancial items.

The interest coverage ratio is the fi nancial key ratio that describes a company's resistance and level of risk for changes in net fi nancial items. Castellum's objective is an interest coverage ratio of at least 200%. For 2011 the interest coverage ratio was 278% (299%).

The average fi xed interest term as of 31 December 2011 was 2.7 years (2.6), the average effective interest rate was 4.0% (3.9%) and the average interest rate for the year was 4.1% (3.7%). Margins and fees on long-term credit agreements had an average duration of 3.5 years (2.6). The market interest rate for an average equal portfolio, regarding both current market rate and estimated credit margin, can be assessed to 4.7% (4.0%). The present value of these credit margins is calculated to SEKm 400-600. The range refl ects the great uncertainty that exists for establishing a credit margin that would be applicable to new bilateral loan agreements. In light of the discussions that Castellum continuously has with banks and other participants in the credit and capital market, it is Castellum's assessment that existing credit margins differ favourably compared to today's credit margins. Due to the great uncertainty and the fact that bilateral loan agreements cannot be converted or transferred - unlike, for example, listed fi nancial contracts - the amount is not included in the calculating of the per share net asset value.

With a change in the interest rate of +/– 1%, the effect on the result for the next 12 months will amount to SEKm –61 and +52, respectively.

In the interest rate maturity structure, interest rate derivates are accounted for in the earliest time segment in which the can mature. Credit margins are distributed in the interval of the underlying loans.

Interest rate maturity structure Loan, SEKm Derivates, SEKm Amount, SEKm Average
interest rate
0-1 years 17,063 – 9,400 7,663 3.7%
1-2 years 1,800 1,800 4.0%
2-3 years 600 600 3.8%
3-4 years 1,250 1,250 4.8%
4-5 years 2,450 2,450 4.4%
5-10 years 3,300 3,300 4.2%
Total 17,063 17,063 4.0%

Currency risk

Castellum has made investments in Denmark, which means that the Group is exposed to a currency risk. A currency translation risk is primarily related to when income statement and balance sheet in foreign exchange are translated into Swedish currency. In accordance with fi nancial policy, between 60-100% of investments in foreign subsidiaries are to be fi nanced in that country's currency. The transaction risk in the Group is unsignifi cant and will be managed by matching income by costs.

Group
Note 18 Prepaid Income 2011 2010 2011 2010
Rents paid in advance 438 330
Accrued interest 140 131 140 131
Other 149 154 10 21
Total 727 615 150 152
Group Parent Company
Note 19 Pledged assets 2011 2010 2011 2010
Property mortgages 18,986 17,421
Long-term receivables, group companies 16,103 14,721
Total 18,986 17,421 16,103 14,721
Group Parent Company
Note 20 Contingent Liabilities 2011 2010 2011 2010
Guaranteed commitments for subsidiaries 1,174 1,062

Normally the parent company is the borrower, but when the property owning company borrows directly, the parent company provides guaranteed commitments for subsidiaries.

Total – – 1,174 1,062

Note 21 Participations in Group Companies

The principles for consolidation are described in the accounting principles. Directly owned subsidiaries are listed below. Other companies in the Group are included in each respective subsidiary's annual report.

Corporate Registered Share of Book
Directly owned subsidiaries identity no. offi ce capital value
Fastighets AB Brostaden 556002-8952 Stockholm 100% 1,205
Aspholmen Fastigheter AB 556121-9089 Örebro 100% 797
Eklandia Fastighets AB 556122-3768 Gothenburg 100% 1,010
Harry Sjögren AB 556051-0561 Mölndal 100% 804
Fastighets AB Corallen 556226-6527 Värnamo 100% 589
Fastighets AB Briggen 556476-7688 Malmö 100% 933
Fastighets AB Regeringsgatan 556571-4051 Gothenburg 100% 0
Total 5,338
Parent Company
2011 2010
Opening acquisition value 5,217 4,087
Changed accounting principle 960
Paid shareholders´contribution 55
Paid Group contribution, net value after tax 66 170
Closing acquisition value / book value 5,338 5,217

Note 22 Long-term Receivables, Group Companies Parent Company

Closing acquisition value / book value 17,432 16,195
New lending to subsidiaries 1,237 294
Opening acquisition value 16,195 15,901
2011 2010

Financial Instruments - future cash fl ow etc. Note 23

Future cash-fl ows attributable to interest rate derivatives as well as liabilities are shown in the table below. Cash-fl ows related to interest rate derivatives consist of interest paid minus interest received. To calculate the variable part of the interest rate derivative, the Stibor interest rate - as listed at year end - has been used throughout the full term of the derivative. In calculating cash-fl ow attributable to loan, the assumption is made that a maturing loan is replaced by a new one during the term or maturity of the underlying credit agreement and to a Stibor interest rate as listed at year end.

Derivates Loan
Interest Interest rate Interest rate Loan, Mature Loan , Interest
Year rate to pay, to earn, costs, SEKm opening closing costs, SEKm
SEKm SEKm balance balance
2012 – 422 285 – 137 17,160 – 2,235 14,925 – 558
2013 – 402 274 – 128 14,925 – 7 14,918 – 529
2014 – 363 249 – 114 14,918 – 7 14,911 – 528
2015 – 333 230 – 103 14,911 – 4,257 10,654 – 491
2016 – 243 173 – 107 10,654 – 4,007 6,647 – 310
2017+ – 431 322 – 109 6,647 – 6,647 0 – 253
Total –2 194 1 533 – 661 – 17,160 – 2,669

The categories of the fi nancial instruments in the groups balance sheet is shown in the table below.

SEKm Loan and accounts receivable Financial liabilities recorded Financial liabilities recorded at
at fair valut through income accrued acquisition value
statement
2011 2010 2011 2010 2011 2010
Rent receivables 20 10
Other receivables 14 63
Prepaid expenses and
accrued income 64 53
Cash and bank 97 12
Long-term liabilities 17,160 15,781
Derivates 1,003 574
Accounts payable 163 133
Other liabilities 149 226
Accrued expenses and
prepaid income 727 615
Total 195 138 1,003 574 18,199 16,755

Financial instruments such as rent receivables, accounts payable etc. are recorded at accrued acquisition value with deduction for any write-downs. Hence, fair value is assessed to comply with book value. Long-term interest bearing liabilities have a fi xed interest term of three months, whereas credit margins have longer terms of maturity. Today there is an estimated surplus value related to the credit margins of SEKm 400-600, as shown in note 17.

Subsequent Events Note 24

The Financial Reports are a part of the Annual Report and were signed by the Board of Directors on February 3, 2012. The Board of Directors of Castellum AB intends to propose the annual general meeting a dividend of SEK 3.70 per share, which is an increase of 3% compared to previous year. The Income Statement and the Balance Sheet for the Parent Company and the Group shall be adopted at Castellum AB's Annual General Meeting, which will take place on March 22, 2012.

Proposed Distribution of Profits

The following funds are at the Annual General Meetings disposal: Retained profits SEK 4,361,406,438 Net income for the year SEK 389,641,182

SEK 4,751,047,620
The Board of Directors propose that the retained profits be appropriated as follows:
Dividend to shareholders, SEK 3.70 per share SEK 606,800,000
Carried forward to the new accounts SEK 4,144,247,620
SEK 4,751,047,620

The company has 172,006,708 registered shares, of which 8,006,708 are currently the company's own repurchased shares and are not entitled to dividends.

The total dividend payment proposed above of SEK 606,800,000 can be changed if the number of the companys own repurchased shares changes before the record date for the dividend.

Statement regarding Proposed Distribution of Profit

Reasons

The group's equity has been calculated in accordance with IFRS standards, approved by the EU, and the interpretations of these standards (IFRIC), as well as in accordance with the provisions of Swedish law by application of the recommendation RFR 1 of the Swedish Financial Reporting Board (Supplementary Accounting Standards for Groups). The equity of the parent company has been calculated in accordance with Swedish law and by application of the recommendation RFR 2 of the Swedish Financial Reporting Board (Accounting for Legal Persons).

It is noted that the proposed distribution constitutes 52% of the group's income from property management, which is in line with the express target to distribute at least 50% of the group's income from property management, having considered investment plans, consolidation needs, liquidity and overall position. The group's net income after tax and changes in value for the year amounted to SEKm 711. The distribution policy is based on the group's income from property management, on account of which increases and/or decreases in value on the group's properties and on interest rate derivatives not affecting cash flow, do not normally affect the distribution. That kind of profit or loss, not affecting cash flow, have furthermore not been taken into consideration in previous year's resolutions regarding distribution of profit.

The board of directors concludes that the company's restricted equity is fully covered after the proposed distribution.

The board of directors also concludes that the proposed distribution to the shareholders is justified considering the parameters in section 17 subsection 3, second and third paragraphs of the Swedish Companies Act (the nature, scope and risks of the business as well as consolidation needs, liquidity and overall position). The board of directors would in this context like to emphasise the following.

The nature, scope and risks of the business

The board of directors estimates that the equity of the company as well as the group will, after the proposed distribution, be sufficient in relation to the nature, scope and risks of the business. The board of directors has in this context considered, inter alia, the historical development of the company and the group, budgeted development, investment plans and the economic situation.

Consolidation needs, liquidity and overall position

Consolidation needs

The board of directors has made a general estimation of the financial position of the company and the group, and the possibilities of fulfilling their obligations in the long run. The proposed dividend constitutes 12% of the company's equity and 5% of the group's equity. The express target for the group's capital structure, meaning a loan to value ratio not permanently exceeding 55% and an interest coverage ratio of at least 200%, will be maintained after the proposed dividend. The capital structure of the company and the group is good considering the prevailing conditions of the real estate business. In light of the above, the board of directors concludes that the company and the group have all the necessary requirements to manage future business risks and also to carry potential losses. Planned investments have been considered when deciding on the proposed dividend.

Liquidity

The proposed dividend will not affect the company's or the group's ability to meet their payment obligations in a timely manner. The company and the group have good access to liquidity reserves through short-term as well as long-term credits. The credits may be utilised at short notice, meaning that the company and the group are prepared to handle liquidity fluctuations as well as possible unexpected events.

Overall position

The board of directors has considered all other known conditions which might affect the financial position of the company and the group and which have not been considered within the scope of the above considerations. No circumstances have however been found showing that the proposed dividend would not be justified.

Evaluation to actual value

Derivatives instruments and other financial instruments have been valued to the actual value in accordance with section 4 subsection 14a of the Swedish Annual Accounts Act. The valuation has showed an undervalue of SEKm 739 after taxes, which has affected the equity by the mentioned amount.

Gothenburg January 24, 2012 The Board of Directors

Signing of the Annual Report

As far as we know the Annual Report is prepared in accordance with generally accepted accounting principles. The Annual Report give a true and fair view of the company's fi nancial position and results, and the directors' report give a true and fair overview of the development of the company's operations, fi nancial position and results, and discribes the signifi cant risks and factors of uncertainty facing the company.

The consolidated accounts have been prepared in accordance with the international accounting standards covered in Regulation (EC) No 1606/2002 of the European Parliament and of the Council of 19 July 2002 on the application of international accounting standards. The consolidated accounts give a true and fair view of the group's fi nancial position and results, and the directors' report for the consolidated accounts give a true and fair overview of the development of the group's operations, fi nancial position and results and as well as the signifi cant risks and factors of uncertainty facing the companies within the group.

Gothenburg February 3, 2012

Ordförande

Jan Kvarnström Per Berggren Marianne Dicander Alexandersson

Ulla-Britt Fräjdin-Hellqvist Christer Jacobson Johan Skoglund

Håkan Hellström Cheif Executive Officer

Our Audit Report regarding this Annual Report was submitted on February 3, 2012

Carl Lindgren Magnus Fredmer

Authorized Public Accountant Authorized Public Accountant

Audit Report

To the annual meeting of the shareholders of Castellum AB (publ) corporate identity number 556475-5550

Report on the annual accounts and consolidated accounts

We have audited the annual accounts and consolidated accounts of Castellum AB for the year 2011. The annual accounts and consolidated accounts of the company are included in the printed version of this document on pages 4-110.

Responsibilities of the Board of Directors and the Managing Director for the annual accounts and consolidated accounts

The Board of Directors and the Managing Director are responsible for the preparation and fair presentation of these annual accounts and consolidated accounts in accordance with International Financial Reporting Standards , as adopted by the EU, and the Annual Accounts Act, and for such internal control as the Board of Directors and the Managing Director determine is necessary to enable the preparation of annual accounts and consolidated accounts that are free from material misstatement, whether due to fraud or error.

Auditor's responsibility

Our responsibility is to express an opinion on these annual accounts and consolidated accounts based on our audit. We conducted our audit in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the annual accounts and consolidated accounts are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the annual accounts and consolidated accounts. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the annual accounts and consolidated accounts, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company's preparation and fair presentation of the annual accounts and consolidated accounts in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Board of Directors and the Managing Director, as well as evaluating the overall presentation of the annual accounts and consolidated accounts.

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

Opinions

In our opinion, the annual accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the parent company

Carl Lindgren Magnus Fredmer

Gothenburg February 3, 2012 for the financial year.

CASTELLUM ANNUAL REPORT 2011 111 Authorized Public Accountant Authorized Public Accountant

as of 31 December 2011 and of its financial performance and its cash flows for the year then ended in accordance with the Annual Accounts Act, and the consolidated accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the group as of 31 December 2011 and of their financial performance and cash flows in accordance with International Financial Reporting Standards, as adopted by the EU, and the Annual Accounts Act. The statutory administration report is consistent with the other parts of the annual accounts and consolidated accounts.

We therefore recommend that the annual meeting of shareholders adopt the income statement and balance sheet for the parent company and the statement of comprehensive income and statement of financial position for the group.

Report on other legal and regulatory requirements

In addition to our audit of the annual accounts and consolidated accounts, we have examined the proposed appropriations of the company's profit or loss and the administration of the Board of Directors and the Managing Director of Castellum AB for the year 2011.

Responsibilities of the Board of Directors and the Managing Director The Board of Directors is responsible for the proposal for appropriations of the company's profit or loss, and the Board of Directors and the Managing Director are responsible for administration under the Companies Act.

Auditor's responsibility

Our responsibility is to express an opinion with reasonable assurance on the proposed appropriations of the company's profit or loss and on the administration based on our audit. We conducted the audit in accordance with generally accepted auditing standards in Sweden.

As a basis for our opinion on the Board of Directors' proposed appropriations of the company's profit or loss, we examined the Board of Directors' reasoned statement and a selection of supporting evidence in order to be able to assess whether the proposal is in accordance with the Companies Act.

As a basis for our opinion concerning discharge from liability, in addition to our audit of the annual accounts and consolidated accounts, we examined significant decisions, actions taken and circumstances of the company in order to determine whether any member of the Board of Directors or the Managing Director is liable to the company. We also examined whether any member of the Board of Directors or the Managing Director has, in any other way, acted in contravention of the Companies Act, the Annual Accounts Act or the Articles of Association.

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

Opinions

We recommend to the annual meeting of shareholders that the profit be appropriated in accordance with the proposal in the statutory administration report and that the members of the Board of Directors and the Managing Director be discharged from liability

Castellum´s Real Estate Schedule 2011

Greater Gothenburg 114
Öresund Region 122
Greater Stockholm 128
Mälardalen 132
Eastern Götaland 138
Properties sold in 2011 144

Management subsidiaries: ASP = Aspholmen Fastigheter AB BRI = Fastighets AB Briggen BRO = Fastighets AB Brostaden COR = Fastighets AB Corallen EKL = Eklandia Fastighets AB HAR = Harry Sjögren AB

Greater Gothenburg Acquis Build/ Square metres per type of premises assessment Sub Tax Mgmt.
Name of property Address Municipality year Recon. year Office Retail Warehouse Industrial Residential Oth. Totalt Site sq.m. value sidiary Note
OFFICE/RETAIL
1 Annedal 21:10 Haraldsgatan 5 Gothenburg 1999 1995 4,382 4,382 3,132 81,200 EKL
2 Guldheden 8:10 Guldhedsgatan 5 Gothenburg 2000 1995 10,477 23 10,500 9,896 0 EKL
3 Gullbergsvass 1:15 Lilla Bommens torg Gothenburg 1999 2001 7,942 36 7,978 1,835 163,000 EKL
4 Heden 16:5 Parkg 10/Nya Allén 5 Gothenburg <1995 1961 70 616 1,243 1,929 993 25,663 EKL
6 Inom Vallgraven 19:17 Kyrkogatan 38-40 Gothenburg <1995 1919 210 158 20 975 1,363 867 28,000 EKL
7 Inom Vallgraven 22:3 Kungsgatan 31-33 Gothenburg <1995 1929 1,080 488 1,568 574 39,600 EKL
8 Inom Vallgraven 33:9 Västra Hamng 21/
Vallg 9
Gothenburg <1995 1929/1995 1,063 510 1,573 829 27,800 EKL
9 Inom Vallgraven 34:8 Kungsg 19-23/
Magasinsg 18
Gothenburg <1995 1929/1994 3,481 831 55 4,367 1,242 91,581 EKL
10 Inom Vallgraven 35:14 Kungsg 15-17/ Magasinsg 17 Gothenburg <1995 1929/1991 2,489 1,219 469 4,177 1,315 87,970 EKL
11 Inom Vallgraven 35:16 AKaserntorget 5/Vallg 2 Gothenburg <1995 1991 2,371 590 36 2,997 690 46,800 EKL
12 Inom Vallgraven 35:17 Magasinsg 11-13/ Vallg 4-6 Gothenburg <1995 1991 163 139 – 1,149 1,451 690 23,001 EKL
13 Inom Vallgraven 57:2 Drottningg7/V Hamng 5Gothenburg 2000 1988/1990 6,104 710 276 7,090 2,422 92,800 EKL
14 Krokslätt 102:2 Eklandiagatan 80 Gothenburg 2008 1980 160 811 971 2,110 650 EKL B
15 Lorensberg 46:5 Kungsportsavenyen 7 Gothenburg <1995 1930 276 691 967 348 25,200 EKL
16 Lorensberg 48:8 Vasagatan 46 Gothenburg <1995 1900/1992 1,401 202 74 1,677 722 18,828 EKL
17 Masthugget 3:6 Linnégatan 5 Gothenburg <1995 1893/1980 492 628 – 1,079 790 2,989 745 39,600 EKL
18 Masthugget 9:17 Järntorget 3-4 Gothenburg 1996 1900 2,865 518 10 3,393 1,221 46,300 EKL
19 Masthugget 26:1 Barlastgatan 2 Gothenburg <1995 1923 4,038 1,075 – 2,796 7,909 3,597 105,200 EKL
20 Nordstaden 2:16 Östra Hamngatan 16 Gothenburg 2004 1974/2010 13,855 2,759 4 16,618 3,255 417,143 EKL
21 Pustervik 3:8 Brogatan 4 Gothenburg <1995 1988 3,910 3,910 1,088 36,800 EKL
22 Gamlestaden 22:14 Gamlestadsvägen 16 Gothenburg 2004 1957 18,738 690 352 8 19,788 20,313 78,683 EKL
23 Gamlestaden 26:1 Marieholmsgatan 10 Gothenburg <1995 1914/1987 6,226 270 1,870 6,865 15,231 24,356 51,308 EKL T/B
24 Olskroken 14:2 Ånäsv 44-46/Svang 2-4/
Ejderg 3
Gothenburg <1995 1895/1986 7,241 315 135 5,397 136 13,224 10,263 68,407 EKL
25 Skår 58:1 St Sigfridsgatan 89 Gothenburg <1995 1991 11,855 11,855 6,151 125,000 EKL B
26 Arendal 764:394 Sydatlanten 15-17 Gothenburg 2005 1990 9,358 9,358 9,646 49,800 EKL T
30 Backa 27:43 Bergögatan 5-7 Gothenburg 1998 1984 3,189 1,326 309 4,824 3,920 27,400 EKL
31 Backa 196:6 Aröds Industriväg 34 Gothenburg 1996 1990 1,332 474 1,806 5,274 8,665 EKL
28 Kärra 28:19 Transportgatan 33 Gothenburg 1996 2008 4,600 4,600 21,832 26,221 EKL
33 Kärra 77:3 Tagenevägen 70 Gothenburg 1998 1990 1,197 1,197 9,200 6,030 EKL T
34 Lindholmen 28:2 Theres Svenssons Gata 9-11 Gothenburg 2006 2006 4,903 204 79 5,186 2,725 109,000 EKL
194 Lundbyvassen 3:1 Lindholmsallén 9 Gothenburg 2011 1949/2006 8,811 – 2,000 10,811 6,016 144,000 EKL
35 Rambergsstaden
733:409
Herkulesgatan 68 Gothenburg <1995 1988 2,295 944 1,027 4,266 9,499 23,557 EKL
36 Sannegården 28:33 Vingalandsgatan 2 Gothenburg 2006 1880/1987 4,820 1,603 172 34 6,629 3,016 77,000 EKL
193 Sannegården 52:1 Östra Eriksbergsg 14-52 Gothenburg 2011 1956/1993 2,204 320 615 1,711 – 2,640 7,490 12,784 72,000 EKL
37 Tingstadsvassen 11:11 Ringög 12/Kolgruveg 3-5Gothenburg <1995 1992 3,578 2,170 219 2 5,969 4,267 33,000 EKL B
38 Tingstadsvassen 12:12 Kalkbruksgatan 9 Gothenburg 2006 1989 2,129 2,129 3,751 8,428 EKL
39 Tingstadsvassen 26:5 Lergodsgatan 1-3 Gothenburg 2002 1989 1,254 2,106 3,360 4,566 19,487 EKL T/B
40 Tuve 87:1 Hildedalsgatan 2 Gothenburg 2007 1987 1,336 3,200 4,536 9,318 22,555 EKL
41 Högsbo 8:8 Beatrice Lesslies gata 14Gothenburg 2000 1961/2001 1,100 1,000 2,100 3,500 9,644 HAR B
42 Högsbo 13:3 E A Rosengrens gata 15 Gothenburg <1995 1982 1,244 1,244 3,787 6,511 HAR T/B

Note: T=Ground Rent A=Lease B=Unutilized building permission

Greater Gothenburg Tax Mgmt.
Acquis Build/ Square metres per type of premises assessment Sub
Name of property Address Municipality year Recon. year Office Retail Warehouse Industrial Residential Oth. Totalt Site sq.m. value sidiary Note
43 Högsbo 20:22 F O Petterssons gata 24-32Gothenburg 2002 1982 14,145 178 760 15,083 15,522 87,800 HAR
44 Högsbo 24:12 August Barks gata 23 Gothenburg 1999 1968/1990 3,117 2,756 5,873 12,817 44,464 HAR B
45 Högsbo 27:7 August Barks gata 6 Gothenburg 2002 1988 7,933 7,933 9,723 76,600 HAR
46 Kobbegården 6:362 Stora Åvägen 19 A-B, 21Gothenburg <1995 1990 5,513 878 1,150 7,541 5,490 65,430 HAR
47 Kobbegården 6:726 Datavägen 14 B Gothenburg <1995 1981 2,573 2,573 4,267 11,880 HAR
48 Anisen 1 Johannefredsgatan 1 Mölndal 2000 1990 1,676 237 1,913 5,843 12,324 HAR B
49 Anisen 3 Johannefredsgatan 3 Mölndal 1998 2003 1,800 1,500 2,600 5,900 10,108 45,528 HAR
50 Berguven 1 Möbelgatan 4 Mölndal 2004 1964 6,500 500 7,000 24,283 23,200 HAR B
51 Generatorn 5 Aminogatan 16 Mölndal <1995 1986 640 483 1,123 5,169 8,043 HAR
52 Mejramen 1 Lunnagårdsgatan 4 Mölndal 1999 1999 8,300 4,700 13,000 38,818 107,000 HAR B
53 Pottegården 4 Kråketorpsgatan 20 Mölndal <1995 1992 3,182 1,836 5,018 6,060 27,524 HAR
54 Riskullaverket 2 Aminogatan 25 Mölndal <1995 1991 1,692 1,261 2,953 3,411 17,898 HAR
55 Sesamfröet 2 Aminogatan 27 Mölndal 2005 1992 5,150 700 5,850 11,000 51,600 HAR B
56 Apollo 5 Österlånggatan 5 Borås <1995 1930/1979 6,803 552 193 7,548 2,343 46,600 HAR
160 Cedern 9,12,15,16 Ramnåsg 1/
Göteborgsvägen 6
Borås 2005 1935/1980 4,289 300 2,129 260 361 7,339 4,159 9,057 HAR B
57 Katrinedal 14 Katrinedalsgatan 22 Borås <1995 1990 2,360 1,892 4,252 7,675 14,530 HAR
58 Midas 14 Västerlånggatan 17 Borås <1995 1974 15,408 5,424 366 21,198 8,185 166,200 HAR B
59 Narcissus 5 L:a Brogatan 15/
St Brogatan 16
Borås <1995 1930 908 1,484 – 1,284 3,676 853 29,190 HAR
60 Nestor 2 L:a Brogatan 19-21 Borås <1995 1962/1991 1,225 3,012 135 4,372 1,381 44,400 HAR
61 Nestor 3 St Brogatan 24 Borås 1999 1930 1,346 732 439 2,517 590 22,060 HAR
62 Solsten 1:109 Företagsparken Härryda <1995 2003 11,375 11,375 19,206 61,321 EKL
63 Flaggan 1 Laholmsvägen 84 Halmstad 2007 1959/2004 2,895 2,895 5,941 9,908 HAR
64 Karossen 3 Kristinehedsvägen 5, 7 Halmstad 2007 1965/2004 916 4,458 568 535 6,477 14,500 23,118 HAR B
65 Kartongen 3 Spikgatan 7 Halmstad 2007 1990/1995 3,434 2,842 40 6,316 20,900 25,460 HAR B
66 Valsen 2 Svingelvägen 2 Halmstad 2007 1979/2003 2,294 2,294 7,314 11,115 HAR B
67 Filaren 1 Sveagatan 10 Alingsås <1995 1958/1968 3,116 2,282 158 5,556 4,636 28,863 HAR
68 Gjutaren 26 B Metallgatan 2-4 Alingsås <1995 2000 3,585 3,585 4,000 36,647 HAR B
69 Partille 4:2, 4:25 G:a Kronvägen 22 Partille <1995 1940/1981 2,240 2,240 8,250 17,834 HAR
70 Ugglum 8:37 Göteborgsvägen 78-80 Partille <1995 1937/1982 296 278 574 762 4,054 HAR
71 Ugglum 8:91 Göteborgsvägen 82-84 Partille <1995 1988 2,082 1,016 3,098 4,969 25,581 HAR
72 Ugglum 8:92 Göteborgsvägen 74-76 Partille <1995 1992 4,944 720 193 5,857 5,408 42,400 HAR
73 Ugglum 126:4 Gibsons väg 3 Partille <1995 1990 468 468 767 4,046 HAR
74 Hede 3:125 Sättarevägen 3 Kungsbacka <1995 1990 1,759 601 2,360 3,690 11,432 HAR
75 Kungsbacka 4:46 L:a Verkstadsgatan 8 Kungsbacka <1995 1979 401 401 1,356 1,931 HAR B
76 Varla 2:380 Energigatan 11 Kungsbacka <1995 1990 1,689 685 2,374 4,590 13,709 HAR
77 Varla 2:416 Kungsparksvägen 2 Kungsbacka 2001 2002 1,100 680 1,780 5,500 9,538 HAR
78 Varla 3:22 B Hallabäcksvägen 2 Kungsbacka 2006 1979 1,100 4,300 600 6,000 20,000 64,446 HAR B
191 Vägmästaren 5 Syréngatan 1 Kungsbacka 2009 2010 3,000 3,000 6,500 35,600 HAR B
Total offi ce/retail 295,462 47,008 44,361 19,050 8,246 8,597 422,724 527,741 3,702,163
Greater Gothenburg Tax Mgmt.
Acquis Build/ Square metres per type of premises assessment Sub
Name of property Address Municipality year Recon. year Office Retail Warehouse Industrial Residential Oth. Totalt Site sq.m. value sidiary Note
WAREHOUSE/INDUSTRIAL
80 Arendal 1:13 Hamneviksvägen 31 Gothenburg 2005 2006 27,787 27,787 6,408 144,600 EKL
81 Arendal 7:4 Kärrlyckegatan 11 Gothenburg 1998 1991 1,320 2,374 4 3,698 12,671 16,084 EKL
82 Arendal 764:130 Oljevägen 103 Gothenburg 2005 1971 9,739 15,140 891 25,770 41,244 81,624 EKL
83 Backa 18:7, 18:10 Risbindaregatan 1 Gothenburg <1995 1964 16,930 16,930 45,020 50,248 EKL
84 Backa 20:5 Exportgatan 2-8 Gothenburg 2007 1989/1999 1,175 856 13,869 15,900 37,965 61,986 EKL B
86 Backa 22:11 Exportgatan 2-8 Gothenburg <1995 1990 245 2,500 2,745 5,031 9,522 EKL
87 Backa 25:7 Exportgatan 28 Gothenburg 1999 1972 11,200 11,200 23,169 29,545 EKL
88 Backa 26:3 Exportgatan 40 Gothenburg 1996 1947/1988 2,712 763 2,467 6 5,948 6,000 24,726 EKL
89 Backa 27:2 Importgatan 17 Gothenburg <1995 1968 2,765 2,765 12,927 9,408 EKL B
90 Backa 29:24 Importgatan 12 Gothenburg <1995 1977 2,224 2,224 4,366 6,862 EKL
91 Backa 94:1 Exportgatan 15 Gothenburg 1998 1989 7,560 7,560 20,947 24,789 EKL B
92 Backa 97:11 Exportgatan 39-41 Gothenburg 2002 1978 1,393 2,486 3,879 19,285 19,116 EKL
85 Backa 107:4 Transportgatan 17 Gothenburg 2010 1983/2006 22,700 22,700 73,621 21,200 EKL T
93 Backa 192:3 Aröds Industriväg 72 Gothenburg <1995 1989 119 1,215 1,334 3,630 4,681 EKL
94 Backa 192:4 Aröds Industriväg 60 Gothenburg <1995 1989 484 194 1,356 2,034 3,428 7,412 EKL T
95 Backa 192:6 Aröds Industriväg 62 Gothenburg 1998 1988 1,371 1,371 4,387 4,670 EKL
96 Backa 192:10 Aröds Industriväg 66 Gothenburg <1995 1990 1,410 1,335 2,745 6,042 12,071 EKL
97 Backa 193:1 Aröds Industriväg 2 A Gothenburg 2000 1988/1996 3,750 3,750 10,524 14,627 EKL B
98 Backa 197:2 Aröds Industriväg 17-19 Gothenburg <1995 1990 1,228 1,228 2,727 4,748 EKL
182 Kärra 28:10 Transportgatan 37 Gothenburg 1996 2010 2,217 2,217 14,872 12,182 EKL
99 Kärra 37:4 Tagenevägen 21 Gothenburg <1995 1972 1,195 11,740 12,935 26,476 36,530 EKL
183 Kärra 72:36 Tagenevägen 34 Gothenburg 2008 2011 6,400 6,400 14,600 8,017 EKL
100 Kärra 74:2 Tagenevägen 29 Gothenburg 1996 2010 15,758 15,758 35,995 79,000 EKL B
101 Kärra 74:3 Tagenevägen 33 Gothenburg 1998 1985 7,505 7,505 22,398 26,638 EKL B
102 Kärra 75:3 Transportgatan 35 Gothenburg 2008 1980 9,191 9,191 14,375 31,933 EKL
103 Kärra 77:8 Tagenevägen 72 Gothenburg <1995 1991 212 1,859 2,071 8,914 9,590 EKL
104 Kärra 80:7 Trankärrsvägen 14 Gothenburg <1995 1990 211 3,451 3,662 7,185 14,902 EKL T
105 Kärra 94:1 Orrekulla Industrigata 25 Gothenburg 1999 1990 1,960 1,960 3,520 7,715 EKL
106 Kärra 96:1 Orrekulla Industrigata 13-15Gothenburg 2001 1991 160 3,830 3,990 10,408 16,252 EKL B
107 Tingstadsvassen 11:9 Kolgruvegatan 9 Gothenburg <1995 1988 343 721 1,064 2,213 4,891 EKL
108 Tingstadsvassen 12:6 Manufakturgatan 19 Gothenburg <1995 1990 328 2,657 2,985 2,960 14,214 EKL T
109 Tingstadsvassen 12:9 Manufakturgatan 21-23 Gothenburg <1995 1957 6,217 6,217 7,355 11,460 EKL T
110 Tingstadsvassen 14:7 Stålverksgatan 11 Gothenburg 1997 1993 934 4,273 5,207 9,547 738 EKL B
111 Tingstadsvassen 19:3 Kolgruvegatan 1 Gothenburg <1995 1950 839 9,548 245 10,632 16,645 22,091 EKL T
112 Högsbo 4:1 Fältspatsgatan 1 Gothenburg <1995 1965/1972 1,140 350 3,074 4,564 10,394 17,629 HAR
113 Högsbo 7:16 Gustaf Melins gata 7 Gothenburg <1995 1987 1,301 404 1,705 4,043 10,016 HAR
114 Högsbo 9:3 A Odhners gata 17 Gothenburg 2008 1978/2002 635 2,267 2,902 6,007 16,398 HAR
115 Högsbo 18:1 E A Rosengrens gata 30-38Gothenburg <1995 1966/1973 1,092 7,628 8,720 17,149 28,182 HAR B
116 Högsbo 26:8 August Barks gata 25 Gothenburg 1998 1969/1979 2,123 2,253 4,376 6,068 16,883 HAR B
117 Högsbo 28:3 August Barks gata 7 Gothenburg <1995 1968/1981 785 2,857 3,642 3,942 15,236 HAR
118 Högsbo 36:1 Norra Långebergsgatan 8Gothenburg 2000 1971/1995 710 3,840 4,550 9,057 22,966 HAR
119 Högsbo 36:5 Hulda Mellgrens gata 3 Gothenburg 1998 1991 553 2,931 3,484 5,438 15,790 HAR B
120 Högsbo 36:9 Hulda Mellgrens gata 9 Gothenburg <1995 2007 400 1,475 1,875 4,253 12,159 HAR
121 Högsbo 38:9 Sisjö Kullegata 4 Gothenburg <1995 1984 983 983 8,609 8,823 HAR B
122 Högsbo 40:1 Gustaf Werners gata 2 Gothenburg 1999 1981/1999 1,495 5,505 7,000 16,070 32,525 HAR B
Greater Gothenburg Tax Mgmt.
Acquis Build/ Square metres per type of premises assessment Sub
Name of property Address Municipality year Recon. year Office Retail Warehouse Industrial Residential Oth. Totalt Site sq.m. value sidiary Note
123 Högsbo 40:2 Gustaf Werners gata 4 Gothenburg 2006 1978 400 2,815 3,215 10,799 17,064 HAR B
124 Kobbegården 208:6 Askims Verkstadsväg 16Gothenburg 1999 1973/1979 480 1,264 1,744 3,462 6,977 HAR
125 Kobbegården 209:1 Askims Verkstadsväg 15Gothenburg 1999 1973/1996 2,538 2,538 6,336 11,559 HAR B
126 Kobbegården 6:180 Datavägen 20 Gothenburg <1995 1980 1,704 1,078 2,782 5,100 18,700 HAR
127 Kobbegården 6:360 Datavägen 31 Gothenburg 2001 1979 1,640 5,349 6,989 14,508 42,400 HAR
128 Kobbegården 6:724 Ekonomivägen 11 Gothenburg 1999 1978/1986 6,290 6,290 12,786 25,411 HAR B
129 Rud 51:21 Klangfärgsgatan 2 C Gothenburg 2006 1979/1989 510 2,590 3,100 6,926 17,470 HAR T
130 Tynnered 1:10 Kontrabasgatan 12 Gothenburg <1995 1969 429 140 2,152 2,721 7,475 10,049 HAR T/B
131 Kallebäck 3:4 Mejerigatan 1 Gothenburg 2000 1962 7,725 23,845 805 420 32,795 37,723 105,000 EKL
188 Olskroken 35:7 Blomstergatan 2 Gothenburg 2009 1977 417 3,427 3,844 37,598 12,446 EKL T
189 Olskroken 35:9 Grönsaksgatan 5 Gothenburg 2009 1966 874 6,781 7,655 9,127 22,418 EKL T
190 Olskroken 35:14 Grönsaksgatan 3 Gothenburg 2009 1967 1,169 4,542 5,711 6,216 18,086 EKL T
132 Majorna 163:1 Banehagsliden 2 Gothenburg 2006 1949 8,226 749 8,975 9,263 24,550 EKL B
133 Gaslyktan 11 Argongatan 26-30 Mölndal <1995 1987 4,000 11,000 15,000 38,100 82,800 HAR B
134 Generatorn 1 Aminogatan 24 Mölndal <1995 1995/2003 1,445 3,110 4,555 30,000 36,000 HAR B
135 Generatorn 2 Aminogatan 20-22 Mölndal <1995 1991 164 2,938 3,102 8,933 15,378 HAR
136 Heliumgasen 11 Kryptongatan 5B Mölndal 1999 1975 4,560 5,093 9,653 16,300 46,503 HAR B
137 Kryddpepparn 3 Östergårdsgatan 8 Mölndal <1995 1992 4,140 4,140 15,347 0 HAR B
192 Kusken 3 Idrottsvägen 10 Mölndal 2011 2005 2,773 4,852 7,625 17,665 41,727 HAR
138 Lindome 2:40 Elementvägen 2 Mölndal <1995 1966 376 9,811 10,187 32,453 20,000 EKL B
139 Lindome 2:47 Elementvägen 2 Mölndal <1995 1966 1,835 510 2,345 15,141 8,202 EKL B
140 Pottegården 2 Kråketorpsgatan 18 Mölndal <1995 1964 1,800 1,800 7,014 7,444 HAR B
141 Skinntickan 1 Ålegårdgatan 5 Mölndal <1995 1989 1,221 4,720 5,941 10,267 10,622 HAR
142 Syrgasen 8 Kryptongatan 14 Mölndal <1995 1979 3,055 3,055 11,197 14,727 HAR B
143 Tjärblomman 2 Wolfsgatan 2 Mölndal 1999 1960 2,495 4,540 7,035 9,193 17,525 HAR B
144 Tjärblomman 3 Sallarängsgatan 3 Mölndal 1999 1970 1,225 7,533 8,758 9,394 21,352 HAR
145 Tulpanen 1 Bergfotsgatan 5 Mölndal 1999 1961 1,812 2,954 4,766 5,577 14,751 HAR B
146 Tusenskönan 2 Flöjelbergsgatan 6 Mölndal 1999 1960 3,567 933 4,500 5,346 12,511 HAR B
147 Tusenskönan 4 Bergfotsgatan 3 Mölndal 1999 1961 2,038 2,424 4,462 5,397 13,278 HAR B
148 Törnrosen 3 Flöjelbergsgatan 10 Mölndal 1999 1964 1,791 1,791 3,582 4,468 9,509 HAR B
149 Vallmon 2 Flöjelbergsgatan 13 Mölndal <1995 1965 662 2,518 3,180 3,642 8,367 HAR
150 Vallmon 3 Flöjelbergsgatan 11 Mölndal <1995 1965 676 2,570 3,246 3,830 8,557 HAR
151 Vallmon 6 Flöjelbergsgatan 7 B Mölndal <1995 1965 1,629 6,685 8,314 9,956 21,484 HAR
152 Vallmon 7 Flöjelbergsgatan 7 A Mölndal 1999 1930 960 3,844 4,804 6,894 12,966 HAR B
153 Ängsviolen 1 Flöjelbergsgatan 18 Mölndal <1995 1960/1965 1,765 180 3,655 5,600 10,292 18,630 HAR B
154 Hede 3:12 Faktorvägen 1 Kungsbacka 2003 1992 1,971 6,929 8,900 32,809 48,576 HAR B
155 Hede 3:131 Tryckarevägen 8 Kungsbacka <1995 1991 170 1,347 1,517 7,558 6,132 HAR B
156 Kungsbacka 4:47 L:a Verkstadsg 2-6/
Verkstadsg 7
Kungsbacka <1995 1978/1990 1,516 2,475 3,991 9,317 12,590 HAR
157 Varla 2:388 Energigatan 21 Kungsbacka <1995 1983/1995 2,207 2,207 10,003 8,167 HAR B
158 Varla 2:415 Borgås Gårdsväg 15 Kungsbacka 2004 2002 755 3,676 4,431 8,852 18,022 HAR
159 Varla 3:22 Hallabäcksvägen 1 Kungsbacka 2006 1979 3,500 18,500 22,000 71,644 57,600 HAR B
161 Hinden 2 Sagagatan 17 Borås <1995 1956 692 5,748 6,440 9,833 8,862 HAR B
162 Kilsund 3 Evedalsgatan 5 Borås <1995 1935 709 260 9,847 10,816 16,660 15,658 HAR B
163 Lagern 8 Hållingsgatan 15 Borås <1995 1948/1961 239 8,753 8,992 5,700 10,661 HAR B
164 Silverpoppeln 31 Ålandsgatan 6 Borås 2006 1961/1970 835 2,165 3,000 6,143 5,550 HAR
165 Snödroppen 8 Elinsdalsg 9,13 & 15/
Södra Korsg 11
Borås 2005 1980/1980 1,543 5,881 7,424 14,546 15,915 HAR B
Greater Gothenburg Tax Mgmt.
Acquis Build/ Square metres per type of premises assessment Sub
Name of property Address Municipality year Recon. year Office Retail Warehouse Industrial Residential Oth. Totalt Site sq.m. value sidiary Note
166 Trucken 4 Viaredsvägen 14 Borås 2001 2001 700 4,800 5,500 20,000 21,083 HAR B
167 Bulten 6 Bultgatan 1 Alingsås 2007 1985/1990 760 2,600 3,360 19,559 11,909 HAR B
168 Gjutaren 26 Metallgatan 2-4 Alingsås <1995 1933/1989 1,383 9,082 10,465 21,080 18,340 HAR B
169 Konfektasken 15 Kolav. 2-8/Sidenv. 7 Alingsås <1995 1929/1969 3,769 6,927 10,696 15,544 18,897 HAR B
170 Stallet 3 Tomasgårdsvägen 19 Alingsås 2008 1990 1,295 2,040 3,335 4,700 9,496 HAR B
171 Hede 2:11 Hedeforsvägen 6 Lerum 2006 1960/1974 500 2,200 2,700 9,973 10,611 HAR
172 Lerum Berg 1:76 Åkerivägen 7 Lerum 2006 2007 1,500 8,400 9,900 30,000 44,247 HAR B
173 Fogden 4 Laholmsvägen 84 Halmstad 2007 1960/1990 278 1,946 8,609 118 – 1,028 11,979 25,800 23,232 HAR B
195 Fyllinge 20:409 Sadelvägen 5 Halmstad 2011 1992 166 4,223 4,389 22,276 14,670 HAR B
174 Hönekulla 1:571 Åvägen 1 Härryda 2006 1986/2002 1,762 2,345 187 4,294 6,596 16,719 HAR
175 Kåbäcken 11:7 G:a Alingsåsvägen 29 Partille <1995 1961/1964 2,227 2,227 5,477 4,656 HAR

Total warehouse/industrial 94,669 11,787 404,470 146,273 0 2,536 659,735 1,445,680 2,216,735

Greater Gothenburg Tax Mgmt.
Acquis Build/ Square metres per type of premises assessment Sub
Name of property Address Municipality year Recon. year Office Retail Warehouse Industrial Residential Oth. Totalt Site sq.m. value sidiary Note
DEVELOPMENT PROJECTS
5 Inom Vallgraven 4:1 Östra Larmgatan 18 Gothenburg <1995 1856/1988 2,597 2,597 671 28,600 EKL
27 Kärra 28:18 Transportgatan 37 Gothenburg 1996 20,287 5,200 EKL B
179 Lindholmen 28:3 Theres Svensson g Gothenburg 2011 3,000 – EKL
Total development projects 2,597 0 0 0 0 0 2,597 23,958 33,800
UNDEVELOPED LAND
176 Annedal 21:9 Haraldsgatan 3 Gothenburg 1999 2,088 – EKL B
177 Högsbo 33:1 Gruvgatan 29 Gothenburg <1995 5,483 3,015 HAR B
178 Högsbo 39:3 Ingela Gathenheilms gata 8Gothenburg <1995 1,720 946 HAR B
180 Kobbegården 6:7 Ekonomivägen 11 Gothenburg 1999 3,187 1,752 HAR B
181 Kobbegården 152:1 Industrivägen 4-6 Gothenburg <1995 25,158 13,800 HAR B
184 Heliumgasen 4 Neongatan 4B Mölndal <1995 4,794 2,570 HAR B
188 Skällared 3:49 Lysekulevägen Kungsbacka <1995 29,297 1,640 EKL B
196 Varla 3:34 Hallabäcksvägen 1 Kungsbacka 2006 14,356 – HAR B
186 Kyllared 1:112 Tvinnaregatan 27 Borås <1995 5,118 450 HAR B
187 Solsten 1:108 Företagsparken Härryda <1995 16,551 6,000 EKL B
Total undeveloped land 0 0 0 0 0 0 0 107,752 30,173

Total Greater Gothenburg 392,728 58,795 448,831 165,323 8,246 11,133 1,085,056 2,105,131 5,982,871

Office/retail Warehouse/industrial Development projects and land

Castellum´s Real Estate Portfolio in Greater Gothenburg 31-12-2011

Net
Area Rental Rental Ecomomic Rental Property Property operating
No. of thous. value value occupancy income costs costs income
properties sq.m SEKm SEK/sq.m rate SEKm SEKm SEK/sq.m SEKm
Offi ce/retail
Central Gothenburg 20 88 179 2,039 95.8% 171 42 475 129
Eastern Gothenburg 4 60 61 1,016 94.0% 57 16 277 41
Mölndal 8 43 46 1,084 90.8% 42 9 213 33
Hisingen 14 72 86 1,194 95.2% 82 23 323 59
Borås 7 51 52 1,023 91.2% 48 16 297 32
Rest of Greater Gothenburg 25 109 116 1,058 94.1% 109 24 218 85
Total offi ce/retail 78 423 540 1,277 94.3% 509 130 307 379
Warehouse/industrial
Hisingen 34 254 175 691 103.1% 180 35 141 145
Mölndal 22 126 99 791 93.8% 93 21 167 72
Högsbo/Sisjön 19 73 60 824 99.3% 60 12 156 48
Kungsbacka 6 43 31 728 79.7% 25 4 100 21
Borås 6 42 23 531 91.5% 21 6 128 15
Rest of Greater Gothenburg 15 122 94 767 92.9% 87 26 216 61
Total warehouse/industrial 102 660 482 731 96.7% 466 104 158 362
Total 180 1,083 1,022 944 95.4% 975 234 216 741
Leasing and property administration 44 41 – 44
Total after leasing and property administration 278 257 697
Development projects 3 2 4 2 1 1
Undeveloped land 10
Total 193 1,085 1,026 977 279 698

Property value by property type Property value by municipality

Greater Mölndal 15%
Gothenburg 64% Borås 7%
Kungsbacka 5%
Alingsås 3%
Halmstad 2%
Remaining Greater
Gothenburg 4%

Property related key ratios

2011 2010 2009 2008 2007 2006 2005 2004 2003 2002
Rental value, SEK/sq.m. 944 935 919 885 856 834 839 834 798 768
Economic occupancy rate 95.4% 94.1% 94.0% 92.6% 90.8% 89.4% 90.7% 92.2% 93.0% 93.5%
Property costs, SEK/sq.m. 257 264 262 228 227 224 230 228 217 217
Net operating income, SEK/sq.m. 644 616 602 591 551 521 531 540 525 501
Number of properties 193 188 190 187 182 176 172 178 188 195
Lettable area, thousand sq.m. 1,085 1,046 1,028 1,017 1,000 914 859 794 765 736
Öresund Region Acquis Build/ Square metres per type of premises assessment Sub Tax Mgmt.
Name of property Address Municipality year Recon. year Office Retail Warehouse Industrial Residential Oth. Totalt Site sq.m. value sidiary Note
OFFICE/RETAIL
101 Armringen 2 Agnesfridsvägen. 190 Malmö 2011 1975 2,919 1,948 4,867 14,925 14,505 BRI T
1 Betongen 11 Krangatan 4 Malmö <1995 1991 4,892 17 4,909 6,168 28,517 BRI T/B
2 Björnen 6 Davidhallsgatan 20 Malmö <1995 1920/1988 1,672 429 71 2,172 1,188 35,400 BRI
3 Brandnävan 1&2 Stenbärsgatan 1 Malmö 1999 1989 2,822 2,822 9,670 16,886 BRI T/B
4 Bältespännet 13 Hornyxegatan 12 Malmö 2006 1972/2002 145 1,190 485 1,820 4,402 4,695 BRI
5 Flygledaren 3 Höjdrodergatan 18 Malmö 2004 1991 1,610 1,610 3,620 6,325 BRI T
6 Flygvärdinnan 4 Höjdrodergatan 30-34 Malmö <1995 1935/2001 5,589 3,883 45 9,517 17,848 59,817 BRI T
94 Gustav Adolf 13 Gustav Adolfs torg 4 Malmö 2003 1968 10,690 10,690 2,224 200,000 BRI
8 Hälsingland 19 Fosievägen 9-19 Malmö <1995 1950/2003 8,245 6,558 55 14,858 25,474 77,000 BRI B
9 Höjdrodret 3 Kabingatan 11 Malmö 2007 1990 1,182 0 162 1,344 1,600 5,488 BRI
10 Lybeck 10 Stora Nygatan Malmö 1999 1964/1992 6,323 9,445 48 – 5,032 9,838 30,686 6,199 338,800 BRI
11 Malte 23 Fredriksbergsgatan 16 Malmö 1999 1965 5,377 1,171 505 443 7,496 2,597 52,200 BRI
12 Murman 8 Krusegatan 27 Malmö <1995 1960/1989 5,724 1,401 7,125 7,200 21,416 BRI
102 Nejlikebuketten 6 Derbyvägen 7 Malmö 2011 1987 1,765 1,765 10,000 9,585 BRI
13 Norsen 12 Föreningsgatan 7 Malmö <1995 1930/1990 2,446 96 54 140 463 3,199 1,296 – BRI
14 Sadelknappen 4 Ridspögatan 10 Malmö 1999 1985 1,010 495 1,505 5,463 4,823 BRI
15 Skevrodret 1 Kabingatan 9 Malmö 2007 1978/1997 1,898 260 2,158 3,000 7,764 BRI
72 Skjutsstallslyckan 3 Lundavägen 62 Malmö <1995 1946 1,391 1,705 3,096 3,690 5,745 BRI
16 Spännbucklan 16 Agnesfridsvägen 178 Malmö <1995 1972/2002 4,762 4,762 15,561 30,000 BRI
17 Stadt Hamburg 14 St Hamburgsgatan 1 Malmö <1995 1900/2004 4,995 4,067 373 125 9,560 3,671 179,637 BRI
18 Stenyxan 21 Stenyxegatan 14 Malmö 2007 1992/1999 513 582 1,095 2,301 4,046 BRI
19 Stillman 40 Krusegatan 34 Malmö 2005 1975/1986 1,835 1,835 3,550 5,479 BRI
20 Svedjenävan 3 Stenbärsgatan 4-6 Malmö <1995 1991 4,728 4,728 4,493 31,505 BRI
103 Torshammaren 11 Hornyxegatan 6 Malmö 2011 1984 647 647 5,034 4,284 BRI
21 Tuborg 1 Tuborgsgatan 2 Malmö <1995 1945/1980 6,858 296 403 132 7,689 4,377 – BRI
22 Vårbuketten 3 Husievägen 21 Malmö 2001 1987/2002 2,710 2,710 7,421 17,326 BRI
23 Forskaren 2 Emdalavägen 4-18 Lund 1999 2001 18,617 320 – 1,500 20,437 18,274 325,000 BRI
24 Forskaren 2:2 Scheelevägen Lund 1999 2008 7,400 1,600 9,000 9,136 106,000 BRI
25 Jöns Petter Borg 9 Landerigränden 21 Lund 1999 1990 3,796 6,917 10,713 22,584 65,762 BRI B
26 Kvartsen 2 Skiffervägen 15 Lund <1995 1991 695 943 1,638 9,543 11,411 BRI B
27 Reuterdahl 11 Scheelevägen 16 Lund 1997 1990 2,927 175 3,102 4,478 43,400 BRI
28 Reuterdahl 12 Scheelevägen 18 Lund 2006 1990 5,645 5,645 12,077 69,800 BRI
29 Rudebok 2 Rudeboksvägen 3 Lund 2004 1985/2004 4,697 4,697 14,781 39,800 BRI
30 Smörkärnan 1 Kaprifolievägen 1 Lund 1996 1968/1995 6,331 136 – 1,340 7,807 15,000 76,200 BRI
31 St Botulf 11 Botulfsg 5/Skomakareg 4 Lund <1995 1931/1990 1,359 – 3,139 380 4,878 1,988 84,600 BRI
32 St Clemens 22 Stortorget 6-8 Lund <1995 1832/1981 1,160 1,551 574 3,285 2,769 52,172 BRI B
33 St Clemens 27 Stortorget 4 Lund <1995 1846/1999 255 1,439 1,694 1,114 35,400 BRI
34 Stockholmsledet 8 Scheelevägen 30-32 Lund <1995 1991 10,919 1,121 30 12,070 11,084 146,000 BRI
35 Traktorn 2 Traktorvägen 11 Lund 2004 1990/1995 9,481 883 700 11,064 16,573 100,800 BRI
36 Trumlan 1 Traktorvägen 19 Lund <1995 1990 1,183 1,334 2,517 9,066 12,012 BRI
37 Erik Dahlberg 2 Kullagatan 21 Helsingborg 1996 1890/1987 400 442 842 350 12,628 BRI
38 Kavalleristen 9 Berga Allé 1-3 Helsingborg 1997 1920/1993 11,458 155 760 12,373 27,223 86,533 BRI B
39 Kroksabeln 18 Florettgatan 12 Helsingborg 2004 1988 3,123 309 104 3,536 4,809 18,772 BRI
40 Kulan 1 Garnisonsgatan 5 Helsingborg 2002 1996/2005 2,130 10,600 12,730 18,567 36,412 BRI B
41 Musköten 5 Bergavägen 8 Helsingborg <1995 1970/1985 1,619 725 719 816 3,879 4,000 10,104 BRI

Note: T=Ground rent A=Lease B=Unutilized building permission

Öresundsområdet Tax Mgmt.
Acquis Build/ Square metres per type of premises assessment Sub
Name of property Address Municipality year Recon. year Office Retail Warehouse Industrial Residential Oth. Totalt Site sq.m. value sidiary Note
42 Pilbågen 6 Garnisonsgatan 6 Helsingborg 2000 1977 0 4,525 814 5,339 11,400 36,123 BRI B
43 Pilbågen 9 Garnisonsgatan 10 Helsingborg 2004 1980 5,744 4,395 1,541 11,680 16,000 – BRI
44 Rustningen 1 Rundgången 26-32 Helsingborg <1995 1989 6,595 1,813 1,876 200 10,484 15,000 63,389 BRI
45 Snårskogen 1 Kanongatan 155-159 Helsingborg <1995 1991 1,885 4,202 2,397 144 8,628 27,824 37,040 BRI B
46 Spjutet 2 Garnisonsgatan 14 Helsingborg 2008 1970/2003 1,412 3,177 1,992 162 6,743 15,287 33,600 BRI B
47 Studsaren 4 Bergavägen 21 Helsingborg <1995 2006 1,294 738 2,032 7,200 7,028 BRI
48 Vikingen 4 L Strandgatan 5 Helsingborg <1995 1900/1983 800 800 257 9,434 BRI
49 Vikingen 6 Mariagatan 10 Helsingborg <1995 1878/1984 535 159 694 274 8,640 BRI
50 Vikingen 12 L Strandgatan 7 Helsingborg <1995 1912/1988 610 600 1,210 414 15,940 BRI
51 Motorblocket 1 Ringvägen 170 Landskrona <1995 1972/1992 130 8,638 100 46 8,914 22,005 32,200 BRI T
– Abildager 26 Abildager 26 Brøndby 2011 1995 1,800 1,670 3,470 14,012 24,686 BRI
– Hovedvejen 1-7 Hovedvejen 1-7 Glostrup 2011 2007 3,822 303 – 2,828 6,953 3,796 98,750 BRI
– Roskildevej 22 Roskildevej 22 Albertslund 2011 1970/1994 3,800 2,600 – 2,090 8,490 26,396 47,270 BRI
– Vibeholms Allé 15 Vibeholms Allé 15 Brøndby 2011 1961/2007 2,399 325 157 278 3,159 3,695 43,339 BRI
Total offi ce/retail 207,274 63,249 48,246 3,234 9,258 23,907 355,168 539,948 2,951,488

Office/retail Warehouse/industrial Development projects and land

Öresund Region Tax Mgmt.
Acquis Build/ Square metres per type of premises assessment Sub
Name of property Address Municipality year Recon. year Office Retail Warehouse Industrial Residential Oth. Totalt Site sq.m. value sidiary Note
WAREHOUSE/INDUSTRIAL
52 Benkammen 6 Skogholmsgatan 5 Malmö 2005 1994 802 11,120 – 1,075 12,997 30,100 44,055 BRI B
53 Bjurö 12 Flintrännegatan 21 Malmö <1995 1960/1974 1,270 14,132 8,033 330 23,765 35,500 67,563 BRI T
54 Bjälken 2 Skruvgatan 4 Malmö <1995 1962/1990 525 1,951 – 1,040 3,516 5,623 7,552 BRI T
55 Bjälken 3 Skruvgatan 6-8 Malmö 1998 1962 420 2,161 50 2,631 2,618 5,478 BRI
56 Dubbelknappen 17 Risyxegatan 6 Malmö 1998 1989 2,380 2,380 8,472 7,506 BRI B
57 Finngrundet 1 Bjurögatan 29 Malmö 1998 1966 7,490 7,490 10,000 15,304 BRI T
58 Flygfyren 1 Flygfältsvägen 1 Malmö 2000 1950/2002 1,905 10,035 11,940 38,706 40,691 BRI B
59 Gulsippan 1 Källvattengatan 5 Malmö 2001 1988 1,954 11,548 491 13,993 38,450 57,721 BRI B
60 Haken 3 Vinkelgatan 5 Malmö 2008 1993 400 3,188 3,588 4,871 8,398 BRI T
61 Hamnen 22:27 Jörgen Kockgatan 11 Malmö <1995 1952/1976 266 954 1,220 545 1,324 BRI T
62 Holkyxan 5 Bronsyxegatan 11 Malmö <1995 1977/2000 6,510 6,510 13,035 16,716 BRI T
63 Kalkgrundet 5 Borrgatan 15 Malmö <1995 1935/1985 669 6,741 7,410 14,274 19,450 BRI T
64 Kampen 25 Lantmannagatan 22-26 Malmö <1995 1940/1990 4,365 23,015 1,825 – 11,562 40,767 49,281 76,681 BRI
65 Lillgrund 5 Borrgatan 31 Malmö 2002 1952/1998 4,430 4,430 4,685 15,350 BRI
66 Långdansen 1 Sångleksgatan 9 Malmö <1995 1980 1,200 1,200 10,042 5,381 BRI
67 Murman 7 Murmansgatan 124 Malmö <1995 1959/1987 1,020 5,260 162 6,442 10,400 14,685 BRI T
68 Murman 11 Krusegatan 21 Malmö 1998 1960 1,687 6,631 77 8,395 6,475 20,364 BRI T
69 Revolversvarven 9 Jägershillgatan 16 Malmö 1997 1985 3,900 3,900 10,932 15,889 BRI T
70 Ringspännet 1 Kantyxegatan 5 Malmö 2002 2002 6,700 6,700 15,730 20,138 BRI
71 Sadelknappen 1 Sadelgatan 9 Malmö 1999 1979 2,000 2,000 5,284 5,863 BRI
73 Stångbettet 1 Travbanegatan 1 Malmö 2000 1989 1,743 1,743 4,051 6,082 BRI
74 Tistlarna 9 Styrsögatan 4 Malmö 2000 1991 1,109 14,452 15,561 31,020 41,665 BRI T/B
75 Tågarp 16:22 Företagsvägen 14 Malmö <1995 1968/1993 2,830 7,107 9,937 19,069 26,213 BRI
76 Tågarp 16:72 Företagsvägen 25 Malmö <1995 1973/1988 240 1,263 798 2,301 12,656 9,651 BRI
77 Akvamarinen 1 Diabasgatan 1 Helsingborg 2000 2007 4,713 4,713 10,000 19,530 BRI
78 Bergakungen 1 Måndagsgatan 6 Helsingborg <1995 1990 618 2,325 2,943 6,799 10,495 BRI
79 Dolken 4 Mörsaregatan 16 Helsingborg 2004 1970/1985 410 1,930 656 2,996 4,000 6,960 BRI
80 Grusbacken 2 Makadamgatan 15 Helsingborg 2005 2005 1,600 11,700 13,300 27,645 50,271 BRI
81 Grusbädden 2 Mogatan 2-6 Helsingborg <1995 1989 1,550 7,824 30 9,404 35,657 32,918 BRI
82 Grusbädden 3 Mogatan 2-6 Helsingborg 2007 2007/2010 1,721 8,892 3,092 13,705 29,700 46,000 BRI
83 Grusplanen 3 Makadamgatan 19 Helsingborg 2005 1990 2,735 2,735 7,292 8,809 BRI
84 Hyveljärnet 3 Lastgatan 9 Helsingborg <1995 1990 2,276 2,276 6,014 7,731 BRI
85 Mimer 12 S Tvärgången 3 Helsingborg <1995 1960 34 – 3,080 3,114 9,378 – BRI B
86 Nide 2 Rundgången 10 Helsingborg <1995 1955/1985 1,639 3,679 1,134 124 6,576 23,599 17,170 BRI
87 Topasen 1 Andesitgatan 8 Helsingborg 2003 1989 0 8,558 8,558 33,786 37,270 BRI B
88 Värjan 3 Garnisonsgatan 9 Helsingborg 2002 1969 1,112 985 2,735 50 4,882 7,522 14,732 BRI B
89 Annedal 9 Annedalsvägen 2 Lund <1995 1990 560 736 1,296 4,527 5,594 BRI
90 Råbyholm 5 Landerigränden 2-4 Lund 1999 1984 2,501 7,908 10,409 21,376 53,149 BRI
91 Välten 4 Traktorvägen 8 Lund 2003 2003 3,100 3,100 8,003 16,792 BRI
92 Välten 5 Traktorvägen 10 Lund 2003 1974/1995 3,645 3,645 16,384 10,073 BRI
93 Årdret 12 Höstbruksvägen 14 Lund <1995 1990 2,049 2,049 6,223 7,041 BRI
Total warehouse/industrial 29,268 2,890 222,192 24,258 0 17,909 296,517 639,724 894,255
Öresund Region Acquis Build/ Square metres per type of premises Tax Mgmt.
assessment Sub
Name of property Address Municipality year Recon. year Office Retail Warehouse Industrial Residential Oth. Totalt Site sq.m. value sidiary Note
DEVELOPMENT PROJECTS
24 Forskaren 2:3 Emdalavägen 8 Lund 1999 2008 7,400 884 716 9,000 9,136 – BRI
100 Fullriggaren 4 Riggaregatan 51-57 Malmö 2010 – 5,400 5,400 1,857 – BRI
7 Sändaren 1 Agnesfridsvägen 111 Malmö 2010 – 7,047 4,178 326 11,551 40,239 23,959 BRI T
Total development projects 19,847 0 5,062 0 0 1,042 25,951 51,232 23,959
Öresund Region Tax Mgmt.
Acquis Build/ Square metres per type of premises assessment Sub
Name of property Address Municipality year Recon. year Office Retail Warehouse Industrial Residential Oth. Totalt Site sq.m. value sidiary Note
UNDEVELOPED LAND
95 Intäkten 5 Lantmannag 20/
Ystadsg 49
Malmö 2000 2,625 2,045 BRI B
96 Moränen 1 & 2 Borrgatan 1 Malmö <1995 11,281 2,822 BRI B
97 Ringspännet 5 Kantyxegatan 1 Malmö 2006 10,000 1,845 BRI B
98 Svedjenävan 4 Stenbärsgatan 2 Malmö 2006 3,398 934 BRI T/B
99 Höjdpunkten 2 Lund Lund 2001 15,079 3,023 BRI B
104 Kulan 2 Garnisionsgatan 5 Helsingborg 2010 35,500 4,400 BRI
Total undeveloped land 0 0 0 0 0 0 0 77,883 15,069
Total Öresund Region 256,389 66,139 275,500 27,492 9,258 42,858 677,636 1,308,787 3,884,771

Office/retail Warehouse/industrial Development projects and land

Castellum´s Real Estate Portfolio in Öresund Region 31-12-2011

Net
Area Rental Rental Ecomomic Rental Property Property operating
No. of thous. value value occupancy income costs costs income
properties sq.m SEKm SEK/sq.m rate SEKm SEKm SEK/sq.m SEKm
Offi ce/retail
Malmö 26 145 226 1,565 88.8% 201 60 413 141
Lund 14 98 150 1,517 84.5% 126 29 295 97
Helsingborg 14 81 78 961 80.2% 63 20 234 43
Landskrona 1 9 5 596 40.1% 2 2 343 0
Copenhagen 4 22 26 1,190 100.0% 26 2 101 24
Total offi ce/retail 59 355 485 1,366 86.2% 418 113 318 305
Warehouse/industrial
Malmö 24 201 136 676 80.8% 110 35 173 75
Helsingborg 12 75 54 717 89.5% 48 9 130 39
Lund 5 21 19 919 78.2% 15 3 131 12
Total warehouse/industrial 41 297 209 703 82.8% 173 47 159 126
Total 100 652 694 1,065 85.2% 591 160 246 431
Leasing and property administration 38 58 – 38
Total after leasing and property administration 198 304 393
Development projects 3 26 9 1 6 – 5
Undeveloped land 6
Total 109 678 703 592 204 388

Property related key ratios

2011 2010 2009 2008 2007 2006 2005 2004 2003 2002
Rental value, SEK/sq.m. 1,065 1,060 1,063 989 971 932 915 931 892 830
Economic occupancy rate 85.2% 86.6% 86.5% 88.1% 87.7% 86.8% 88.1% 91.2% 90.4% 92.4%
Property costs, SEK/sq.m. 304 315 320 278 271 256 244 262 258 240
Net operating income, SEK/sq.m. 603 604 601 593 581 553 563 587 549 527
Number of properties 109 101 100 100 97 92 90 93 97 101
Lettable area, thousand sq.m. 678 646 620 621 602 587 600 571 566 559
Greater Stockholm Acquis Build/ Square metres per type of premises assessment Sub Tax Mgmt.
Name of property Address Municipality year Recon. year Office Retail Warehouse Industrial Residential Oth. Totalt Site sq.m. value sidiary Note
OFFICE/RETAIL
2 Archimedes 1 Gårdsfogdevägen 2-6 Stockholm 1996 1979 13,108 2,144 2,645 310 18,207 13,663 106,171 BRO
3 Betongblandaren 3 Gårdsfogdevägen 16 Stockholm 2001 1971 2,963 3,242 175 6,380 2,722 39,800 BRO
82 Betongblandaren 10 Archimedesv 1-3/
Gårdsfogdev 8-10
Stockholm 2005 1975/1996 1,675 10,437 2,142 30 14,284 15,170 124,600 BRO
4 Betongblandaren 12 Gårdsfogdevägen 18 B Stockholm 1998 1972 7,263 135 7,398 3,679 63,400 BRO
5 Betongblandaren 13 Adolfbergsvägen 15, 25-31Stockholm <1995 1989 7,628 1,370 1,833 10,831 7,690 77,300 BRO
6 Fredsfors 14 Karlsbodavägen 39-41 Stockholm <1995 1960 11,208 6,782 – 1,443 19,433 7,073 95,800 BRO
23 Lisenen 2 Hässelby Torg 1 Stockholm 2011 1982/1995 2,299 2,299 1,104 – BRO T
8 Vallonsmidet 8 Gårdsfogdevägen 1-7 Stockholm <1995 1963/1992 13,127 3,039 6,742 10 22,918 29,425 166,700 BRO B
9 Ekenäs 1 Finlandsgatan 24-48 Stockholm <1995 2003 18,762 540 8 19,310 9,631 288,200 BRO T
10 Ekenäs 2 Finlandsgatan 12-14 Stockholm <1995 1989 4,602 65 4,667 1,987 50,200 BRO T
11 Ekenäs 3 Finlandsgatan 10 Stockholm <1995 1989 3,580 740 4,320 4,792 46,716 BRO T
12 Ekenäs 4 Finlandsgatan 16-18 Stockholm <1995 1991 7,531 100 444 8,075 2,255 86,800 BRO T
13 Karis 3 Finlandsgatan 62 Stockholm 2001 1989 2,881 425 90 3,396 2,248 34,800 BRO T
14 Karis 4 Finlandsgatan 50-60 Stockholm 2000 1985 4,630 516 104 10 5,260 3,920 57,000 BRO T
15 Sätesdalen 2 Norgegatan 2 Stockholm 2006 1990/2001 10,194 500 845 212 11,751 10,812 91,000 BRO T
16 Getholmen 2 Måsholmstorget 1-13 Stockholm <1995 1990 5,340 381 5,721 3,195 55,600 BRO T
17 Hästholmen 2 Ekholmsvägen 23 Stockholm <1995 1985 1,215 1,215 1,839 9,841 BRO T
18 Renseriet 25 Bolidenv 12, 16/
Tjurhornsgr 3
Stockholm <1995 1910 1,160 212 80 1,452 4,384 7,365 BRO B
19 Renseriet 26 Bolidenv 14-16/
Tjurhornsgr 3
Stockholm <1995 1965 1,500 436 534 167 2,637 3,594 19,337 BRO
20 Tjurhornet 15 Huddingevägen 103-109Stockholm <1995 1986 19,477 575 3,180 6 23,238 13,314 169,176 BRO
21 Mandelblomman 15 Avestag 29/
Kronofogdev 56
Stockholm <1995 1950/1990 3,487 134 3,621 4,364 23,978 BRO
22 Drevern 1 & Dvärgsp. 1 Gråhundsvägen 82-84 Stockholm <1995 1970/1995 1,215 2,745 3,960 5,729 32,000 BRO
55 Getholmen 1 Ekholmsvägen 32-36 Stockholm 1998 1982 5,860 2,232 8,092 4,717 55,628 BRO T
98 Landningsbanan 3 Flygfältsgatan 18, 20 Stockholm 2010 1984 1,000 1,000 2,208 6,161 BRO T
53 Domnarvet 39 Gunnebogatan 24-26 Stockholm <1995 1989 1,267 1,386 2,653 1,940 17,893 BRO T
24 Gräslöken 1 Anderstorpsvägen 20-26Solna 2006 1976 6,166 621 233 7,020 1,288 65,600 BRO
26 Råsten 4 Råstensg 1/Stureg 10 Sundbyberg 2007 1929/2001 2,700 2,700 1,111 35,000 BRO
27 Yrket 4 Smidesvägen 10-12 Solna 2006 1982/1984 9,485 860 404 10,749 8,774 112,200 BRO B
28 Ekplantan 4 Djupdalsvägen 1-7 Sollentuna 1996 1990 8,354 1,251 137 400 10,142 8,595 80,725 BRO
29 Ekstubben 21&23 Djupdalsvägen 10-18,
30-32, 20-22
Sollentuna 1999 1989 6,150 107 110 6,367 3,069 58,882 BRO
99 Ekstubben 25 Djupdalsvägen 24-26 Sollentuna 2011 1987,1988 1,050 1,050 534 8,144 BRO
30 Ringpärmen 3 Bergskällavägen 30 Sollentuna 2005 1986 895 2,091 953 240 4,179 7,918 19,736 BRO
31 Ringpärmen 4 Bergskällavägen 32 Sollentuna 1996 1987 10,665 600 1,348 12,613 12,206 93,000 BRO
32 Sjöstugan 1 Sidensvansvägen 8-10 Sollentuna 1996 1990 4,452 1,846 6,298 9,156 50,200 BRO
33 Altartorpet 22 Jägerhorns väg 6 Huddinge 1996 1986 818 1,267 630 2,715 5,767 34,800 BRO T
34 Altartorpet 23 Jägerhorns väg 8 Huddinge 1996 1987 1,315 2,906 4,221 5,756 57,700 BRO T
35 Arrendatorn 15 Jägerhorns väg 3-5 Huddinge 2001 1987 509 650 210 1,369 2,422 8,843 BRO
36 Arrendatorn 16 Jägerhorns väg 1 Huddinge <1995 1987 628 877 1,505 2,803 9,362 BRO
37 Ellipsen 3 Ellipsvägen 11 Huddinge 2001 1993 2,160 1,298 3,458 3,904 16,910 BRO
86 Varpen 8 Smista Allé 36 Huddinge 1997 2009 11,290 11,290 6,900 47,411 BRO B
25 Varpen 8 C Smista Allé 32 Huddinge 1997 2010 1,390 1,390 3,100 – BRO

Note: T=Ground rent A=Lease B=Unutilized building permission

Greater Stockholm Tax Mgmt.
Acquis Build/ Square metres per type of premises assessment Sub
Name of property Address Municipality year Recon. year Office Retail Warehouse Industrial Residential Oth. Totalt Site sq.m. value sidiary Note
81 Visiret 2 A Smista Allé 44 Huddinge 2004 2004 2,690 2,690 4,890 19,704 BRO
38 Visiret 2 B&C Smista Allé 42 Huddinge 1997 2006 7,500 7,500 13,747 62,000 BRO
84 Visiret 2 F Smista Allé 46-48 Huddinge 1997 2009 4,895 4,895 8,241 40,688 BRO
39 Hammarby-Smedby 1:454 Johanneslundsvägen 2-6Uppl-Väsby 2006 1991 8,322 132 8,454 10,460 66,600 BRO
40 Hammarby-Smedby 1:461 Johanneslundsvägen 3-5Uppl-Väsby 2006 1988 3,656 676 232 4,564 6,798 32,400 BRO
41 Veddesta 2:22 Nettovägen 7 Järfälla <1995 1965/1975 508 508 1,782 2,335 BRO
42 Veddesta 2:23 Nettovägen 1 Järfälla <1995 1971/1985 4,172 1,769 5,941 7,063 30,000 BRO
43 Veddesta 2:58 Fakturavägen 5 Järfälla 2007 1985/1995 980 980 2,452 6,574 BRO
93 Veddesta 2:66 Girovägen 13 Järfälla 2010 1989 3,138 250 8 3,396 7,422 22,415 BRO
44 Sicklaön 393:4 Vikdalsvägen 50 Nacka <1995 1990 3,584 421 4,005 10,819 42,400 BRO
45 Sicklaön 394:5 Vikdalsgränd 10 Nacka 1996 1991 1,654 151 1,805 4,125 16,269 BRO
Total offi ce/retail 229,161 38,664 43,851 29,275 0 2,971 343,922 322,557 2,765,364
WAREHOUSE/INDUSTRIAL
46 Charkuteristen 5 Hallvägen 21 Stockholm 2001 1955 1,520 5,447 6,967 4,213 19,740 BRO T
47 Charkuteristen 6 Slakthusgatan 20 Stockholm 2001 1955 1,066 1,139 186 2,391 1,665 6,726 BRO T
48 Charkuteristen 8 Slakthusgatan 22 Stockholm 2001 1968 548 4,717 5,265 2,582 15,533 BRO T
49 Linde Torp 8 Bolidenvägen 8-10 Stockholm <1995 1929 574 67 1,141 1,782 7,350 14,486 BRO B
50 Sandhagen 6 Slakthusgatan 9 Stockholm 2001 1967 1,531 2,659 4,190 1,728 14,184 BRO T
51 Domnarvet 4 Domnarvsgatan 27-29 Stockholm <1995 1987 1,882 5,422 447 7,751 8,605 34,332 BRO T
52 Domnarvet 27 Fagerstagatan 19 B Stockholm <1995 1982 1,950 1,950 4,337 8,962 BRO T
91 Domnarvet 28 Fagerstagatan 19 C Stockholm 2010 1986 3,720 3,720 7,272 13,887 BRO T
54 Mandelblomman 16 Kronofogdevägen 62 Stockholm 2007 1974 1,011 1,938 940 3,889 4,125 12,993 BRO
56 Stensätra 7 Strömsätravägen 16 Stockholm 1999 1974 5,288 5,288 10,212 19,200 BRO T
57 Dagskiftet 4 Elektravägen 10 Stockholm 2007 1945 358 1,352 1,710 1,892 4,930 BRO T
58 Elektra 3 Västbergavägen 25 Stockholm <1995 1946 1,167 235 6,045 7,447 10,106 20,781 BRO
59 Godståget 1 Transportvägen 7-9 Stockholm <1995 1985 1,818 10,830 400 13,048 31,392 77,503 BRO
92 Furudal 4 Fagerstagatan 10 Stockholm 2010 2008 1,237 1,237 2,051 5,807 BRO T
60 Lagerhallen 2 Brunnbyvägen 2-4/
Partihandelsvägen 27-45
Stockholm 2004 1975 2,194 7,560 – 3,609 13,363 9,512 47,466 BRO T
61 Torngluggen 1-3 Bällstavägen 159/
Tornväktargränd 1-9
Stockholm <1995 1963/1983 1,900 1,900 3,898 6,541 BRO T
62 Tornluckan 1 Tornväktargränd 6 Stockholm <1995 1960 810 810 927 3,466 BRO T
83 Vagnhallen 19 Jämtlandsgatan 131 Stockholm 2006 1963/1974 1,347 4,197 5,544 5,177 15,961 BRO T
25 Instrumentet 1 Fabriksvägen 9 Solna 2006 1955/2005 3,673 3,673 2,065 17,282 BRO
63 Elementet 4 Bäckvägen 18 Sollentuna <1995 1960 1,059 190 6,392 7,641 18,469 29,896 BRO
100 Revisorn 4 Bergkällavägen 33 Sollentuna 2011 1988 2,635 2,635 6,915 15,827 BRO B
64 Tidskriften 2 Kuskvägen 2 Sollentuna 1997 1976 1,323 2,802 5,673 9,798 18,203 70,322 BRO
65 Rosersberg 2:21-22 Rosersbergsvägen 43-45 Sigtuna 1996 1990 2,126 2,126 5,240 7,799 BRO
66 Rosersberg 11:12 Tallbacksgatan 6-12 Sigtuna 1996 1988 464 17,438 66 17,968 53,376 59,219 BRO
67 Rosersberg 11:34 Tallbacksgatan 14 Sigtuna 1996 1987/1989 6,400 6,400 18,259 22,014 BRO
68 Rosersberg 11:35 Tallbacksgatan 18 Sigtuna 1996 1990 8,200 8,200 20,664 31,183 BRO
95 Bredgården 1:7 Jättevägen 4 Järfälla 2010 1978 111 294 3,039 260 3,704 9,213 17,200 BRO
70 Veddesta 2:17 Nettovägen 9 Järfälla 2006 1968 1,338 1,338 5,350 5,452 BRO
71 Veddesta 2:19 Girovägen 9 Järfälla <1995 1964 2,556 2,556 10,000 14,464 BRO
72 Veddesta 2:21 Nettovägen 5 Järfälla <1995 1965/1988 163 1,742 1,905 5,000 8,407 BRO
73 Veddesta 2:26 Nettovägen 11 Järfälla <1995 1968 775 190 1,978 2,943 7,000 12,726 BRO
94 Veddesta 2:49 Girov 11 Järfälla 2010 1981 1,263 2,370 3,633 9,250 20,799 BRO T
74 Veddesta 2:50 Kontov 7/Veddestav 23-25 Järfälla <1995 1964 909 2,884 857 4,650 21,889 24,741 BRO B
75 Veddesta 2:60 Fakturavägen 4 Järfälla 2007 1987 480 155 324 63 1,022 1,099 5,872 BRO T
76 Veddesta 2:77 Fakturavägen 1-3 Järfälla 2007 1994/1997 1,000 4,215 5,215 14,857 36,529 BRO
96 Skälby 2:9 Instrumentvägen 2 Uppl-väsby 2010 1984 697 2,486 3,183 7,720 17,661 BRO T
77 Hantverkaren 2 Hantverkarvägen 9 Botkyrka <1995 1976/1979 5,790 5,790 11,672 20,628 BRO
78 Kumla Hage 3 Kumla Gårdsväg 24 A-BBotkyrka <1995 1985 1,889 1,889 3,959 6,965 BRO
79 Kumla Hage 13 Kumla Gårdsväg 24 C Botkyrka <1995 1990 1,630 1,630 3,258 7,066 BRO
80 Mästaren 1 Kumla Gårdsväg 21 Botkyrka 1996 1983/1986 17,937 3,103 21,040 35,957 82,702 BRO
90 Saltmossen 3 Kumla Gårdsväg 21 Botkyrka <1995 2011 5,496 5,496 21,257 4,250 BRO
97 Skarpnäs 5:10 Skarpövägen 14 Nacka 2010 2008 2,294 2,097 1,269 5,660 7,491 22,492 BRO
Total warehouse/industrial 23,225 4,844 147,657 38,176 0 4,445 218,347 435,207 903,994
Greater Stockholm Tax Mgmt.
Acquis Build/ Square metres per type of premises assessment Sub
Name of property Address Municipality year Recon. year Office Retail Warehouse Industrial Residential Oth. Totalt Site sq.m. value sidiary Note
DEVELOPMENT PROJECTS
1 Alphyddan 11 Bällstavägen 28-36 Stockholm 1997 1964 4,363 4,363 4,126 16,615 BRO
7 Linaberg 15 Alpvägen 17 Stockholm 1999 1973 2,349 1,990 4,339 5,448 18,413 BRO T
69 Veddesta 1:9 Fakturavägen 2 Järfälla 2007 1965 2,274 2,274 3,731 4,954 BRO
Total development projects 6,712 0 1,990 2,274 0 0 10,976 13,305 39,982
UNDEVELOPED LAND
88 Rankan 3-4 Sollentunaholmsvägen 1-7Sollentuna 1996 – 88,355 57,000 BRO B
89 Smista Park Smista Allé Huddinge 1997 – 53,799 26,808 BRO B
98 Åby 1:223 Cementvägen 7 Haninge 2011 – 10,209 1,965 BRO B
Total undeveloped land 0 0 0 0 0 0 0 152,363 85,773
Total Greater Stockholm 259,098 43,508 193,498 69,725 0 7,416 573,245 923,432 3,795,113

Castellum´s Real Estate Portfolio in Greater Stockholm 31-12-2011

Net
Area Rental Rental Ecomomic Rental Property Property operating
No. of thous. value value occupancy income costs costs income
properties sq.m SEKm SEK/sq.m rate SEKm SEKm SEK/sq.m SEKm
Offi ce/retail
North 21 128 169 1,324 77.4% 131 53 410 78
West 11 122 159 1,304 67.3% 107 36 296 71
South 20 94 134 1,419 91.9% 123 27 290 96
Total offi ce/retail 52 344 462 1,343 78.1% 361 116 337 245
Warehouse/industrial
North 22 103 93 897 90.7% 84 23 227 61
West 4 12 12 1,026 77.7% 10 3 185 7
South 16 103 97 945 93.9% 91 27 261 64
Total warehouse/industrial 42 218 202 926 91.4% 185 53 241 132
Total 94 562 664 1,181 82.2% 546 169 300 377
Leasing and property administration 34 62 – 34
Total after leasing and property administration 203 362 343
Development projects 3 11 11 7 3 4
Undeveloped land 3
Total 100 573 675 553 206 347

Property value by property type Property value by municipality

Property related key ratios

2011 2010 2009 2008 2007 2006 2005 2004 2003 2002
Rental value, SEK/sq.m. 1,181 1,154 1,175 1,144 1,090 1,038 999 1,031 1,044 1,032
Economic occupancy rate 82.2% 82.8% 84.8% 84.0% 81.2% 81.3% 83.1% 84.5% 87.0% 89.1%
Property costs, SEK/sq.m. 362 345 347 343 325 338 315 339 332 326
Net operating income, SEK/sq.m. 609 611 650 618 560 506 515 532 576 594
Number of properties 100 97 90 90 87 80 73 70 70 70
Lettable area, thousand sq.m. 573 569 534 535 517 501 442 422 403 404
Mälardalen Tax Mgmt.
Name of property Address Municipality Acquis Build/
year Recon. year
Office Square metres per type of premises
Retail Warehouse
Industrial Residential Oth. Totalt Site sq.m. assessment Sub value sidiary Note
OFFICE/RETAIL
118 Boländerna 5:12 Fålhagsleden 51 Uppsala 2010 1983/1996 5,799 251 6,050 15,251 38,454 ASP B
1 Boländerna 8:6 Knivstagatan 6 Uppsala 2008 1990 2,729 2,729 3,806 17,342 ASP
101 Boländerna 8:11 Bergsbrunnagatan 15 Uppsala 2008 1975 1,024 485 3,376 – 1,930 6,815 11,535 19,187 ASP
2 Boländerna 9:1 Märstagatan 2 Uppsala 2008 1946/2005 1,737 537 2,274 2,890 – ASP
124 Boländerna 11:5 Märstagatan 7 Uppsala 2011 1975 2,407 2,407 4,346 – ASP B
111 Boländerna 30:2 Verkstadsgatan 9 Uppsala 2000 1971 242 23,145 2,309 25,696 61,524 214,600 ASP B
3 Boländerna 30:2 B Verkstadsgatan 11 Uppsala 2003 2002 2,124 2,124 4,500 24,000 ASP
4 Boländerna 30:2 D Verkstadsgatan 9 Uppsala 2003 1987 4,100 4,100 10,981 35,624 ASP B
5 Boländerna 35:1 Bolandsgatan 18 Uppsala 2006 1975 5,555 4,258 150 9,963 26,193 41,847 ASP B
6 Boländerna 35:2 Bolandsgatan 20 Uppsala <1995 1981 4,118 4,118 9,600 42,800 ASP
123 Boländerna 36:2 Danmarksgatan 20 Uppsala 2011 1982 2,400 2,400 3,204 13,867 ASP
7 Dragarbrunn 16:2 Dragarbrunsngatan Uppsala 2004 1963 4,616 1,694 73 147 6,530 2,209 106,200 ASP
113 Dragarbrunn 20:2 Kungsg/St Persg Uppsala 1999 1963 2,462 767 46 3,275 921 – ASP
119 Dragarbrunn 20:4 Dragarbrunnsgatan 34 Uppsala 2010 1982 5,589 3,015 114 – 1,305 10,023 4,472 111,900 ASP
8 Kungsängen 24:3 Kungsgatan 95 Uppsala <1995 1998 729 5,750 6,479 15,284 45,800 ASP
9 Kungsängen 29:1 Kungsgatan 70 Uppsala 1997 1985 2,274 1,813 342 4,429 8,966 24,800 ASP
10 Kungsängen 35:3 Kungsgatan 76 Uppsala 1998 2001 3,060 3,060 4,547 21,500 ASP
11 Kvarngärdet 64:3 Sportfältsvägen 3 Uppsala 1996 1991 1,965 1,965 2,955 12,825 ASP
103 Årsta 36:2 Möllersvärdsgatan 12 Uppsala <1995 1978/1989 1,346 1,457 2,803 5,143 11,595 ASP
12 Årsta 36:7 Hanselligatan 6 Uppsala 2007 1986 388 1,873 2,261 3,358 9,416 ASP
13 Årsta 67:1 Stålgatan 8-12 Uppsala <1995 1988 151 10,268 666 11,085 31,608 52,848 ASP
14 Årsta 72:3 Svederusgatan 1-4 Uppsala 1997 1990 2,195 1,792 4,177 28 8,192 10,792 33,561 ASP
15 Årsta 74:1 Fyrislundsgatan 68 Uppsala 1999 1985 6,820 6,820 15,268 37,200 ASP
16 Årsta 74:3 Axel Johanssons gata 4-6 Uppsala <1995 1990 13,175 238 161 490 14,064 17,212 81,600 ASP
121 Årsta 78:1 Fyrislundsgatan 73 Uppsala 2011 2000 2,838 2,838 4,156 15,865 ASP
17 Basen 10 Fridhemsgatan 2-4 Örebro <1995 1900/1990 6,164 100 6,264 4,997 41,400 ASP
18 Borgaren 1 Fabriksgatan 1 A Örebro 2008 1969/2001 6,539 1,100 847 8,486 3,375 64,604 ASP
115 Inköparen 1 Södra Infarten Örebro 2007 2008 864 4,331 5,195 22,500 33,399 ASP
19 Järnmalmen 1 Osmundgatan 10 Örebro 2006 1967/1995 2,695 7,835 10,530 47,714 24,530 ASP B
20 Konstruktören 11 Söderleden 14 Örebro <1995 1987 1,715 1,715 7,876 6,883 ASP
21 Kontrollanten 9 Åbyvägen 3 Örebro 2007 1992 3,713 1,106 4,819 11,974 13,268 ASP
22 Lagerchefen 3 Aspholmsvägen 3 Örebro 1996 1957/1985 1,900 1,900 9,213 9,519 ASP B
23 Lantmannen 7 Boställsvägen 10 Örebro <1995 1985 310 2,050 215 2,575 8,573 9,705 ASP
24 Motormannen 1 Radiatorvägen 1 Örebro <1995 1966 208 3,474 495 4,177 10,501 15,385 ASP
25 Röda rummet Radiatorvägen 17 Örebro 1996 2000 3,405 3,405 7,710 22,270 ASP
26 Rörläggaren 1 Aspholmsvägen 4 Örebro <1995 1963/1992 5,180 5,180 15,881 15,177 ASP B
99 Rörmokaren 1 Elementvägen 13-15 Örebro <1995 1963/1986 110 3,735 3,845 10,432 11,568 ASP
27 Rörmokaren 5 Elementvägen 1 Örebro <1995 1984 1,270 1,023 110 2,403 6,656 9,861 ASP
28 Signalen 6 Propellervägen 1 Örebro 2006 1991 1,776 1,776 4,151 9,957 ASP
29 Stinsen 18 Fabriksgatan 18-22 Örebro 2008 1983/2003 12,072 78 102 12,252 5,008 104,600 ASP B
30 Svetsaren 4 Elementvägen 12 Örebro <1995 1976/1984 1,695 2,590 4,285 9,644 12,268 ASP
31 Svetsaren 5 Elementvägen 14 Örebro <1995 1977/1988 2,885 169 3,054 7,355 10,548 ASP
32 Svetsaren 6 Radiatorvägen 14 Örebro 2000 1962 5,625 5,625 7,956 45,581 ASP
33 Svetsaren 7 Elementvägen 16 Örebro <1995 1960/1983 675 180 855 2,658 2,802 ASP
34 Svetsaren 8 Elementvägen 4 Örebro <1995 1977 570 3,060 220 3,850 8,074 11,693 ASP T

Note: T=Ground rent A=Lease B=Unutilized building permission

Mälardalen Tax Mgmt.
Acquis Build/ Square metres per type of premises assessment Sub
Name of property Address Municipality year Recon. year Office Retail Warehouse Industrial Residential Oth. Totalt Site sq.m. value sidiary Note
120 Svänghjulet 1 Stubbengatan 2 Örebro 2010 2004 4,624 1,660 2,660 250 9,194 24,143 35,253 ASP B
35 Telemontören 1 Nastagatan 2 Örebro 2007 1993 3,677 2,822 6,499 30,750 17,603 ASP B
36 Tryckeriet 2 Stortorget 8 Örebro 2008 1984/1999 1,400 847 387 2,634 1,350 29,200 ASP
38 Tågmästaren 25 Fabriksgatan 54 Örebro 2008 1986 6,200 130 1,089 6 7,425 8,110 31,600 ASP B
39 Vindrutan 1 Västhagagatan 3 Örebro 1996 1992 1,230 85 1,315 10,062 8,283 ASP
40 Virkeshandlaren 7 Radiatorvägen 11 Örebro <1995 1970/1987 5,431 330 427 6,188 15,377 24,674 ASP
41 Virkeshandlaren 10 Radiatorvägen 13-15 Örebro 1996 1979 2,804 3,565 960 7,329 20,242 27,694 ASP
42 Ånsta 20:117 Aspholmsvägen 9 Örebro 1996 1990 743 743 1,907 3,017 ASP
43 Ölstånkan 11 Järntorgsgatan 1 Örebro 2008 1939/2003 3,940 580 4,520 937 28,800 ASP
44 Ölstånkan 14 Olaigatan 2 Örebro 2008 1929 2,165 2,165 852 16,500 ASP
45 Ölstånkan 15 Olaigatan 4 Örebro 2008 1975/2003 3,101 3,101 1,517 22,000 ASP
46 Blästerugnen 2 Kokillgatan 7 Västerås 1997 1991 1,894 1,894 11,045 8,314 ASP T
47 Dagsländan 11 Jonasborgsvägen 26 Västerås 1996 1990 1,106 1,106 3,651 6,061 ASP T
48 Degeln 1 Kokillgatan 1-3 Västerås 1996 1984 4,490 1,050 700 181 6,421 26,917 26,355 ASP T
49 Elenergin 1 Elledningsgatan 2 Västerås 2008 1976 1,787 3,413 5,200 26,290 13,820 ASP B
50 Elledningen 4 Tunbytorpsgatan 31 Västerås <1995 1991 3,590 3,590 10,256 16,279 ASP

Office/retail Warehouse/industrial Development projects and land

Mälardalen Tax Mgmt.
Acquis Build/ Square metres per type of premises assessment Sub
Name of property Address Municipality year Recon. year Office Retail Warehouse Industrial Residential Oth. Totalt Site sq.m. value sidiary Note
51 Fallhammaren 1 Fallhammargatan 3 Västerås <1995 1989 2,433 1,655 407 4,495 10,700 16,911 ASP
52 Friledningen 13 Tunbytorpsgatan 10 Västerås 1999 1978 390 1,440 390 2,220 7,000 7,195 ASP T/B
53 Gjutjärnet 7 Gjutjärnsgatan 5 Västerås <1995 1989 2,005 151 260 135 2,551 10,517 8,525 ASP
54 Hjulsmeden 1 Gjutjärnsgatan 8 Västerås <1995 1990 1,112 871 1,983 5,625 6,894 ASP
76 Jordlinan 2 Stenbygatan 6 Västerås <1995 1991 179 2,050 6,155 480 8,864 21,467 19,603 ASP B
55 Kokillen 1 Kokillgatan 2 Västerås 1996 1988 545 1,165 1,295 3,005 11,975 11,146 ASP T
56 Kopparlunden Kopparlunden Västerås 2001 1890/2000 20,135 20,135 10,256 114,701 ASP
57 Kraftfältet 5 Omformargatan 2 Västerås 2005 1991 715 836 1,640 729 3,920 11,221 12,655 ASP
59 Köpmannen 1 Kranbyggargatan 1 Västerås <1995 1984 320 1,095 1,415 5,804 4,536 ASP
60 Köpmannen 3 Kranbyggargatan 3 Västerås <1995 1982 2,370 2,370 10,073 9,160 ASP T
61 Ringborren 8&16 Tallmätargatan 1 Västerås <1995 1956/1988 1,444 355 927 926 3,652 9,019 11,897 ASP
62 Tunbytorp 1 Strömledningsgatan 1 Västerås 2005 1965 410 3,797 524 1,278 6,009 27,584 22,232 ASP T
63 Tunbytorp 7 Strömledningsgatan 3 Västerås 2005 1965 360 1,901 5,714 7,975 31,990 24,020 ASP T
64 Tunbytorp 19 Tunbytorpsgatan 2 A Västerås 2005 1990 1,982 1,982 11,782 7,183 ASP
114 Verkstaden 14 Kopparlunden Västerås 2001 1890 8,417 8,417 40,900 31,728 ASP B
65 Vikingatiden 9 Brandthovdagatan 17 A Västerås 2007 2004 173 438 173 784 3,477 3,002 ASP
66 Märsta 1:219 Raisogatan 1-27 Sigtuna <1995 1993 2,784 883 3,667 4,053 36,387 ASP B
67 Märsta 16:3 Maskingatan 3 Sigtuna <1995 1992 2,921 2,921 3,000 16,050 ASP
Total offi ce/retail 193,245 111,326 58,950 30,199 2,188 4,472 400,380 922,818 2,167,127
WAREHOUSE/INDUSTRIAL
68 Barkborren 3 Barkborregatan 3 Västerås <1995 1970/1989 2,950 2,950 10,000 6,607 ASP T
69 Elkraften 4 Tunbytorpsgatan 16 Västerås 2005 1976 946 946 5,673 3,044 ASP T
69 Elkraften 4 Tunbytorpsgatan 16 Västerås 2005 1976 946 946 5,673 3,044 ASP T
70 Elkraften 6 Elledningsgatan 4 Västerås 2008 1981 1,150 1,150 8,025 3,383 ASP T
71 Elkraften 7 Energigatan 3 A Västerås 2005 1976 250 1,070 1,320 5,073 3,325 ASP T
72 Elledningen 1 Tunbytorpsgatan 29 Västerås 1999 1982 1,200 710 1,910 8,300 5,394 ASP T
73 Friledningen 8 Tunbytorpsgatan 6 Västerås 2005 1971 235 599 1,534 2,368 11,243 6,026 ASP T
74 Friledningen 9 Tunbytorpsgatan 8 Västerås 2005 1968 647 990 2,115 1,400 5,152 9,995 15,316 ASP
75 Fältmätaren 29 Fältmätargatan 9 Västerås 2007 1960 536 2,571 25 3,132 10,173 8,279 ASP T
77 Järnåldern 6 Brandthovdagatan 11 Västerås 2008 1982 234 262 1,277 45 1,818 5,967 5,743 ASP T
78 Krista 1 Saltängsvägen 59 Västerås 2004 2005 2,980 2,980 11,500 13,078 ASP
79 Köpmannen 8 Lundby Gårdsgata 4 Västerås 2004 1988 880 1,805 2,685 9,957 8,208 ASP
80 Ledningstråden 1 Tunbytorpsgatan 1, 3 Västerås 2005 1967 520 1,011 4,541 6,072 27,410 15,736 ASP T
81 Ledningstråden 6 Tunbytorpsgatan 23 Västerås 2005 1970 620 620 8,000 2,412 ASP T/B
82 Lufthammaren 1 Ånghammargatan 2-4 Västerås 1996 1977 3,894 1,803 1,646 7,343 17,055 22,000 ASP T
83 Tunbytorp 2 Tunbytorpsgatan 4 Västerås 2005 1970 1,548 1,825 647 4,020 19,191 9,117 ASP
84 Tunbytorp 8 Friledningsgatan 3 A Västerås 2005 1970 830 830 5,825 2,669 ASP
85 Tunbytorp 10 Tunbytorpsgatan 4 A Västerås 2005 1978 623 6,682 211 7,516 24,663 15,439 ASP
86 Voltmätaren 3 Lågspänningsgatan 7 Västerås 2006 1990 760 760 2,254 2,080 ASP
87 Ånghammaren 2 Ånghammargatan 1-9 Västerås 1996 1972/1994 1,181 520 4,739 6,996 135 13,571 35,738 25,119 ASP T
88 Bleckslagaren 6 Handelsgatan 1 Örebro 2008 1982 4,326 4,326 22,243 12,635 ASP B
89 Bleckslagaren 8 Vattenverksgatan 8 Örebro 2006 1978/2001 4,750 4,750 24,878 15,968 ASP B
90 Chauffören 2 Stuvargatan 3 Örebro 1997 1991 500 6,600 7,100 16,974 20,147 ASP
91 Chauffören 3 Pikullagatan 9 Örebro 2006 1991 1,577 1,577 5,442 4,613 ASP
92 Däcket 1 Dialoggatan 14 Örebro 2008 1991 750 1,128 1,878 7,184 5,550 ASP
93 Grosshandlaren 2 Nastagatan 6-8 Örebro 2001 1977 2,008 1,955 19,170 23,133 61,695 58,811 ASP B
Tax Mgmt.
Acquis Build/
Address Municipality year Recon. year Office Totalt Site sq.m. value sidiary Note
Gällerstavägen Örebro <1995 1969 11,625 11,625 42,143 20,247 ASP
Söderleden 10 Örebro 1996 1987 1,260 1,260 3,573 4,212 ASP
Söderleden 12 Örebro <1995 1987 3,665 3,665 10,649 11,886 ASP
Aspholmsvägen 6 Örebro 2004 1984 2,955 2,955 4,960 10,098 ASP
Berglunda 208 Örebro 2007 1971/1999 4,205 4,205 44,237 17,148 ASP B
Danmarksgatan 24 Uppsala 2011 1979 4,601 1,892 6,493 14,136 17,720 ASP B
2008 1972/1988 218 747 5,755 6,720 14,543 23,217 ASP
Möllersvärdsgatan 5 Uppsala <1995 1979 2,960 2,960 8,572 10,140 ASP B
Östra Bangatan 6 Sigtuna 2007 1990 302 2,430 2,732 21,344 12,318 ASP B
Mälardalen Gamla Börjevägen 2-16 Uppsala Retail Warehouse Square metres per type of premises Industrial Residential Oth. assessment Sub

Office/retail Warehouse/industrial Development projects and land

Mälardalen Tax Mgmt.
Acquis Build/ Square metres per type of premises assessment Sub
Name of property Address Municipality year Recon. year Office Retail Warehouse Industrial Residential Oth. Totalt Site sq.m. value sidiary Note
106 Broby 11:8 Östra Bangatan 14 Sigtuna <1995 1989 248 583 831 1,859 2,764 ASP
107 Märsta 16:2 Maskingatan 5-7 Sigtuna 1997 1989 600 1,013 1,613 3,500 5,507 ASP
108 Märsta 17:6 Maskingatan 8 Sigtuna <1995 1970/1988 751 1,907 2,658 5,318 7,972 ASP
109 Märsta 21:54 Elkraftsgatan 11-13 Sigtuna <1995 1990 2,200 2,200 6,517 9,043 ASP
Total warehouse/industrial 17,130 5,894 68,410 67,327 0 1,063 159,824 555,809 442,971
UNDEVELOPED LAND
116 Försäljaren 3 Nastagatan 7 Örebro 2007 – 3,167 712 ASP B
117 Högspänningen 1 Lågspänningsgatan 8 Västerås 2007 – 22,500 3,901 ASP B
110 Boländerna 28:3 Verkstadsgatan 9 Uppsala 2004 – 3,347 1,171 ASP
Total undeveloped land 0 0 0 0 0 0 0 29,014 5,784

Office/retail Warehouse/industrial Development projects and land

Castellum´s Real Estate Portfolio in Mälardalen 31-12-2011

Net
Area Rental Rental Ecomomic Rental Property Property operating
No. of thous. value value occupancy income costs costs income
properties sq.m SEKm SEK/sq.m rate SEKm SEKm SEK/sq.m SEKm
Offi ce/retail
Uppsala 25 152 190 1,241 89.2% 169 53 346 116
Örebro 31 143 146 1,020 97.7% 143 45 314 98
Västerås 21 98 93 949 89.7% 83 28 287 55
Sigtuna 2 7 7 1,077 95.7% 7 3 531 4
Total offi ce/retail 79 400 436 1,088 92.3% 402 129 323 273
Warehouse/industrial
Västerås 19 67 45 675 88.9% 40 13 202 27
Örebro 11 67 44 660 98.8% 43 7 111 36
Uppsala 3 16 18 1,092 94.1% 17 5 246 12
Sigtuna 5 10 7 742 92.4% 7 3 289 4
Total warehouse/industrial 38 160 114 715 93.7% 107 28 174 79
Total 117 560 550 982 92.6% 509 157 281 352
Leasing and property administration 33 59 – 33
Total after leasing and property administration 190 340 319
Development projects
Undeveloped land 3 0 0 0 0
Total 120 560 550 509 190 319

Property value by property type Property value by municipality

Property related key ratios

2011 2010 2009 2008 2007 2006 2005 2004 2003 2002
Rental value, SEK/sq.m. 982 934 928 859 807 778 766 794 762 737
Economic occupancy rate 92.6% 90.6% 92.4% 93.0% 89.3% 88.4% 87.5% 87.8% 91.0% 90.3%
Property costs, SEK/sq.m. 340 325 329 268 247 258 244 262 241 231
Net operating income, SEK/sq.m. 570 521 528 531 474 429 427 435 453 435
Number of properties 120 116 115 117 101 91 86 75 71 71
Lettable area, thousand sq.m. 560 545 516 519 432 410 384 338 333 335
Eastern Götaland Acquis Build/
Square metres per type of premises
assessment Sub Tax Mgmt.
Name of property Address Municipality year Recon. year Office Retail Warehouse Industrial Residential Oth. Totalt Site sq.m. value sidiary Note
OFFICE/RETAIL
1 Droskan 12 Slottsgatan 14 Jönköping 1998 1990 9,370 9,370 4,951 81,000 COR
2 Elektronen 1 Datorgatan 6 Jönköping 2008 2000 524 1,168 1,692 4,237 5,284 COR B
3 Hotellet 8 V Storgatan 9-13 Jönköping <1995 1963/1999 2,986 15,715 262 18,963 5,121 178,000 COR
4 Vagnmakaren 7 Hästhovsvägen 2 Jönköping <1995 1983/2001 9,531 14 9,545 19,226 61,600 COR
5 Valutan 11 Kompanigatan 1-2 Jönköping <1995 1992/2001 3,116 2,091 256 5 5,468 7,763 66,000 COR
94 Varuhuset 1 Batterigatan 2 Jönköping 2009 2009 11,041 11,041 42,500 77,000 COR
6 Vattenpasset 6 Kungsängsvägen 7 Jönköping <1995 1971/1990 1,517 632 2,149 4,894 6,270 COR
7 Vilan 7 Huskvarnavägen 58-64 Jönköping 2000 1955/1999 9,564 565 4,584 14,713 25,577 70,650 COR
85 Visionen 3 Bataljonsgatan 10,12 Jönköping 2004 2010 7,342 363 7,705 12,269 80,600 COR
8 Visionen 3 fd 1 Bataljonsgatan 10 Jönköping 2004 1996/1995 9,341 423 236 10,000 27,568 31,470 COR
9 Vågskålen 3 Huskvarnavägen 40 Jönköping 2003 1983 6,583 387 8,693 15,663 42,536 30,529 COR B
10 Vägporten 5 Vasavägen 4 Jönköping 2003 1955/2004 251 2,076 2,327 8,458 10,945 COR
11 Ögongloben 5 Gräshagsgatan 11 Jönköping 2006 1961 3,512 3,512 7,346 5,094 COR
12 Örontofsen 5 Granitvägen 7, 9 Jönköping 2006 1976 996 900 3,698 5,594 15,061 22,200 COR
13 Almen 9 Malmövägen 12-14 Värnamo 1997 1957/1989 1,075 11,329 78 12,482 23,702 41,447 COR
14 Bodarna 2 Myntgatan 8, 10 Värnamo <1995 1934/1991 1,433 373 1,806 1,186 11,455 COR
15 Bokbindaren 20 Västbovägen 56 Värnamo <1995 1975/1991 2,167 394 2,561 11,386 6,183 COR
16 Drabanten 1 Nydalavägen 16 Värnamo 1997 1940/1986 230 1,028 1,258 2,972 2,963 COR
17 Gamla Gåsen 4 Boagatan 1 Värnamo <1995 1907 200 200 1,903 1,298 COR B
18 Gillet 1 Flanaden 3-5 Värnamo 1996 1974 2,410 925 103 – 1,704 5,142 3,475 31,018 COR
19 Golvläggaren 2 Silkesvägen 30 Värnamo 2000 1991 734 734 5,190 2,066 COR
20 Golvläggaren 3 Silkesvägen 30 Värnamo 2000 2008 8,800 1,620 10,420 37,879 38,478 COR
21 Jungfrun 11 Köpmansg 3-7/
Luddög 1
Värnamo <1995 2001/1982 315 3,878 158 601 4,952 5,849 27,610 COR
22 Karpen 3 Jönköpingsvägen 105-107Värnamo 1997 1956/1990 545 835 405 888 2,673 7,930 5,053 COR
23 Knekten 15 Jönköpingsvägen 21 Värnamo 1997 1971/1989 424 559 31 240 6 1,260 4,323 4,482 COR
24 Lejonet 11 Lasarettsg 1-5/
Storgatsb 23
Värnamo 2000 1987/1987 4,089 948 160 51 5,248 2,433 32,512 COR
25 Linden 3 Växjövägen 24-26 Värnamo <1995 1960/1989 2,350 560 2,264 5,174 9,286 13,784 COR
26 Ljuset 8 Nydalavägen 1-9 Värnamo <1995 2003 2,590 2,590 9,674 12,109 COR
27 Mon 13 Karlsdalsgatan 2 Värnamo 1997 1983 1,986 1,986 2,294 8,652 COR
28 Plattläggaren 1 Silkesvägen 18 Värnamo 2008 1989 1,180 1,180 5,994 2,884 COR
29 Rågen 1 Expovägen 6 Värnamo <1995 1965/1990 2,361 2,836 5,197 8,919 10,479 COR
30 Vindruvan 4 Storgatsb 14-20/Myntg
13 m fl
Värnamo <1995 1982 1,163 11,047 30 – 2,163 5 14,408 10,855 77,842 COR
31 Vindruvan 15 Storgatsbacken 12 Värnamo 1997 1989 904 1,110 2,014 695 10,774 COR
32 Värnamo 14:11 Jönköpingsvägen 41-43 Värnamo <1995 1917/1982 2,209 1,972 4,181 5,686 12,365 COR
33 Bagaren 10 Ljungadalsg 2/Hejareg 10Växjö 2007 1987 25,923 3,835 – 1,170 30,928 85,022 152,669 COR B
34 Båken 1 Systratorpsvägen 16 Växjö 2006 1983 1,410 25 1,435 5,125 4,243 COR
35 Garvaren 4 Hjalmar Petris väg 32 Växjö 1999 1981 2,526 44 2,570 6,901 8,634 COR B
36 Glasmästaren 1 Arabygatan 80 Växjö 1999 1988 6,202 886 187 549 7,824 11,297 39,200 COR
37 Nordstjärnan 1 Kronobergsgatan 18-20 Växjö 2002 1971/2000 5,098 994 15 23 6,130 2,381 47,400 COR

Note: T=Ground rent A=Lease B=Unutilized building permission

Droskan 12, Jönköping

Hotellet 8, Jönköping otellet

Eastern Götaland Tax Mgmt.
Square metres per type of premises
Acquis Build/ assessment Sub
value sidiary Note
Name of property Address Municipality year Recon. year Office Retail Warehouse Industrial Residential Oth. Totalt Site sq.m.
38 Plåtslagaren 4 Verkstadsgatan 5 Växjö 2002 1967/1988 2,243 780 636 1,893 50 5,602 10,000 13,389 COR
39 Rimfrosten 1 Solängsvägen 4 Växjö 2000 1972 42 6,686 1,922 8,650 58,671 26,200 COR B
40 Segerstad 4 Segerstadsvägen 7 Växjö 1998 1990 910 910 3,911 – COR
41 Sotaren 4 Arabygatan 82 Växjö 2002 1992 2,318 457 204 2,979 4,007 19,062 COR
42 Svea 8
43 Unaman 8
Lineborgsplan 3
Klosterg 6/Kungsg 3/
Växjö
Växjö
1998 1982
2006 1969
2,061
1,180

3,707

300


422

2,061
5,609
3,938
2,185
14,140 COR
29,286 COR
Sandgärdsg 6-8
44 Ödman 15 Storgatan 29 Växjö 2001 1972 2,380 1,941 4,321 2,661 39,200 COR
45 Idémannen 1 Teknikringen 16 Linköping 2007 1990 580 580 4,212 5,279 COR
46 Idémannen 2, Collegium Teknikringen 7 Linköping 2007 1989 13,578 4,136 298 18,012 26,823 124,000 COR
47 Idémannen 2, DatalinjenDatalinjen 1 Linköping 2007 1989/1994 1,591 1,591 11,306 11,083 COR
48 Idémannen 2, Teknikringen Teknikringen 1 A-F Linköping 2007 1984/1996 6,653 54 6,707 19,720 52,546 COR
49 Idémannen 2, Vita Huset Universitetsvägen 14 Linköping 2007 2002 8,210 8,210 29,597 83,600 COR B
96 Magnetjärnet 6 Finnögatan 5 C Linköping 2010 1996 2,388 2,388 8,328 8,644 COR B
Total offi ce/retail 165,970 105,875 37,220 3,021 4,941 2,682 319,715 685,223 1,758,671
WAREHOUSE/INDUSTRIAL
50 Elefanten 3 Rådjursvägen 6 Växjö <1995 1988 1,384 934 2,318 8,940 5,863 COR
51 Illern 5 Isbjörnsvägen 11-13 Växjö <1995 1987 885 406 855 2,146 5,276 7,460 COR
52 Isbjörnen 4 Isbjörnsvägen 6 Växjö <1995 1993 10,933 10,933 30,505 31,067 COR
53 Sjömärket 3 Annavägen 3 Växjö 1998 1989 1,828 341 763 6,523 9,455 26,853 30,703 COR B
54 Snickaren 12 Smedjegatan 10, 20 Växjö 1998 1976/1989 3,705 5,218 15,027 143 24,093 45,018 64,598 COR B
55 Draken 1 Ingelundsvägen 1 Värnamo <1995 1968/1988 1,750 1,750 21,396 3,393 COR B
56 Flundran 4 Runemovägen 1 Värnamo <1995 1963/1992 4,109 7,497 11,606 34,524 18,170 COR
58 Mattläggaren 1 Silkesvägen 24 Värnamo 2008 1997 2,700 2,700 8,655 6,703 COR B
59 Mattläggaren 2 Silkesvägen 24 Värnamo 2000 1997 3,100 3,100 8,542 7,006 COR
60 Posten 4 Postgatan 3-5 Värnamo <1995 1929 455 733 321 2,516 159 4,184 2,991 10,942 COR
61 Rödspättan 1 Runemovägen 10 Värnamo 2004 1973 645 4,060 4,705 12,975 7,786 COR
62 Rödspättan 4 Runemovägen 4 Värnamo <1995 1980 2,960 2,960 7,122 4,516 COR
63 Sandskäddan 4 Margretelundsvägen 7 Värnamo <1995 1982 2,780 2,780 8,005 4,424 COR
64 Sjötungan 3 Margretelundsvägen 6 Värnamo 1999 1989 2,570 2,570 14,524 4,907 COR B
65 Takläggaren 4 Rörläggarev 8/Silkesv 39Värnamo <1995 1991 9,067 9,067 39,349 17,573 COR B
66 Takläggaren 8 Silkesvägen 43 Värnamo 2008 1999 6,995 6,995 17,833 21,519 COR B
67 Värnamo 14:2 Myntgatan 2 Värnamo <1995 1982 0 1,000 – COR A
68 Yxan 4 Fabriksgatan 10, 12 Värnamo 2005 1975 5,595 5,595 10,017 11,749 COR
69 Yxan 6 Fabriksgatan 4 Värnamo <1995 1978/1990 1,477 1,477 11,699 3,134 COR B
70 Flahult 21:3 Momarken 42 Jönköping 2001 1980 3,824 170 3,994 24,177 12,284 COR B
71 Flahult 78:2 Momarken 12 Jönköping <1995 1986/1990 2,136 1,531 3,667 16,143 11,394 COR B
72 Vargön 4 Vasavägen 5 Jönköping 2003 1989 4,070 4,070 6,694 8,803 COR
73 Vattenpasset 2 Ekhagsringen 17 Jönköping <1995 1980 428 2,552 1,073 4,053 17,885 – COR
74 Vingen 4 Linnegatan 1 Jönköping <1995 1970 520 530 2,815 3,865 17,281 11,264 COR B
75 Ögongloben 6 Kindgrensgatan 4 Jönköping 2008 1997 3,108 3,108 7,500 4,452 COR B
76 Österbotten 4 Skeppsbrogatan 6 Jönköping <1995 1930/1991 385 72 2,369 118 2,944 6,972 6,305 COR
77 Överlappen 13 Kalkstensgatan 6-8 Jönköping 2004 1977/1995 2,105 275 3,376 5,756 22,576 21,582 COR
78 Överstycket 25 Kindgrensgatan 3 Jönköping 2008 1981 6,356 1,182 7,538 16,342 10,217 COR B
79 Marås 1:12 Maråsliden 7 Gnosjö <1995 1960 1,140 1,140 3,335 402 COR
Eastern Götaland Tax Mgmt.
Acquis Build/ Square metres per type of premises assessment Sub
Name of property Address Municipality year Recon. year Office Retail Warehouse
Industrial Residential Oth.
Totalt
Site sq.m. value sidiary Note
80 Töllstorp 1:561 Mobäcksvägen 2 Gnosjö <1995 1946 4,290 4,290 7,995 5,632 COR
81 Törestorp 2:51 Kulltorpsvägen 25 Gnosjö <1995 1946 14,310 14,310 55,273 15,912 COR B
82 Källemo 1 Källemogatan 12 Vaggeryd <1995 1956/1988 7,552 7,552 48,347 9,056 COR B
83 Yggen 1 Krokvägen 1 Vaggeryd <1995 1985/1989 6,303 6,303 18,598 8,422 COR
84 Pagoden 1 Ottargatan 10 Linköping 2008 1972/2002 1,668 1,732 3,400 9,000 6,634 COR B
Total warehouse/industrial 10,956 6,822 82,912 83,144 159 431 184,424 593,342 393,872

61 63 64 62 56 68 69 60 67 55 59 58 65 66 13 89 90 22 32 23 16 26 25 14 30 31 24 21 18 17 27 15 28 19 20 Alandsryd Norregård Västra Norregårds industriområde Östra Norregårds industriområde Margretelunds västra industriområde Margretelunds östra industriområde Margretelund Västhorja Ljusseveka Trälleborg Gröndal Hornaryd Hornaryds industriområde Sörsjö industri-Apladalen Centrum Vråen Amerika Nylund Prostsjön Laga Lagan Lagan VÄRNAMO E4 E4 27 127 151 151 151

Office/retail Warehouse/industrial Development projects and land

86

Eastern Götaland Tax Mgmt.
Acquis Build/ Square metres per type of premises
Retail Warehouse
Industrial Residential Oth.
assessment Sub
Name of property Address Municipality year Recon. year Office Totalt Site sq.m. value sidiary Note
DEVELOPMENT PROJECTS
57 Atollen V Storgatan 9-13 Jönköping 2011 – 870 – COR
95 Gården 15 Gillbergagatan Linköping 2009 – 9,855 9,855 37,372 7,400 COR
89 Linden 1 Malmövägen 3 Värnamo 2001 – 1,140 1,140 3,728 80 COR
Total development projects 9,855 1,140 0 0 0 0 10,995 41,970 7,480
UNDEVELOPED LAND
86 Bleckslagaren 1 Repslagarevägen 5 Värnamo 2004 – 5,587 558 COR B
87 Bredasten 1 Värnamo Värnamo 2008 – 19,915 – COR
88 Bredasten 2 Värnamo Värnamo 2008 – 10,030 – COR
90 Värnamo 14:86 Myntgatan 6 Värnamo <1995 – 2,641 – COR B
92 Bagaren 11 Ljungadalsg 2/Hejareg 10Växjö 2007 – 8,160 – COR
93 Postiljonen 2 Växjö Växjö 2009 – 19,597 1,959 COR B
Total undeveloped land 0 0 0 0 0 0 0 65,930 2,517
Total Eastern Götaland 186,781 113,837 120,132 86,165 5,100 3,119 515,134 1,386,465 2,162,540

Office/retail Warehouse/industrial Development projects and land

Castellum´s Real Estate Portfolio in Eastern Götaland 31-12-2011

Net
Area Rental Rental Ecomomic Rental Property Property operating
No. of thous. value value occupancy income costs costs income
properties sq.m SEKm SEK/sq.m rate SEKm SEKm SEK/sq.m SEKm
Offi ce/retail
Jönköping 14 118 137 1,165 91.4% 125 36 314 89
Värnamo 20 85 72 844 90.7% 66 26 295 40
Växjö 12 79 66 841 87.9% 58 21 267 37
Linköping 6 38 44 1,161 86.0% 37 17 458 20
Total offi ce/retail 52 320 319 999 89.8% 286 100 314 186
Warehouse/industrial
Växjö 5 49 32 652 87.6% 28 7 142 21
Värnamo 14 59 28 479 82.6% 24 5 78 19
Jönköping 9 39 21 526 77.1% 16 7 187 9
Rest of Eastern Götaland 6 37 12 328 86.0% 10 4 114 6
Total warehouse/industrial 34 184 93 504 83.6% 78 23 125 55
Total 86 504 412 818 88.4% 364 123 245 241
Leasing and property administration 14 27 – 14
Total after leasing and property administration 137 272 227
Development projects 3 11 0 0
Undeveloped land 6
Total 95 515 412 364 137 227

Property value by property type Property value by municipality

Property related key ratios

2011 2010 2009 2008 2007 2006 2005 2004 2003 2002
Rental value, SEK/sq.m. 818 795 775 745 748 688 675 659 617 598
Economic occupancy rate 88.4% 88.0% 90.0% 90.8% 90.4% 90.6% 90.0% 89.8% 91.3% 90.0%
Property costs, SEK/sq.m. 272 268 275 261 269 239 213 198 193 173
Net operating income, SEK/sq.m. 451 432 422 416 407 384 395 393 370 365
Number of properties 95 96 95 93 82 76 73 76 74 71
Lettable area, thousand sq.m. 515 505 501 480 452 375 366 380 370 347

Castellum's Real Estate Schedule 2011, Summary

Square metres per type of premises
Offi ce Retail Warehouse Industrial Residential Other Total Site sq.m. ment value
Greater Gothenburg 392,728 58,795 448,831 165,323 8,246 11,133 1,085,056 2,105,131 5,982,871
Öresund Region 256,389 66,139 275,500 27,492 9,258 42,858 677,636 1,308,787 3,884,771
Greater Stockholm 259,098 43,508 193,498 69,725 7,416 573,245 923,432 3,795,113
Mälardalen 210,375 117,220 127,360 97,526 2,188 5,536 560,205 1,507,641 2,615,882
Eastern Götaland 186,781 113,837 120,132 86,165 5,100 3,113 515,134 1,386,465 2,162,540
Total Castellum 1,305,371 399,499 1,165,321 446,231 24,792 70,056 3,411,276 7,231,456 18,441,177

Distribution by region and sq.m. Distribution by type of premises and sq.m.

Properties sold in 2011

Tax Mgmt.
Acquis. Build/ Square metres per type of premises assessment Sub
Name of property Address Municipality year Recon. year Office Retail Warehouse Industrial Residential Other. Totalt Site sq.m. value sidiary Note
GREATER GOTHENBURG
Kallebäck 2:5 Grafi ska vägen 2-4 Gothenburg <1995 – 17,330 54,000 EKL B
Total Greater Gothenburg 17,330 54,000
GREATER STOCKHOLM
Haifa 1 Tegeluddsvägen 97 Stockholm 1996 1962 3,749 3,749 2,733 0 BRO
Total Greater Stockholm 3,749 3,749 2,733 0
EASTERN GÖTALAND
Krukmakaren 6 Silkesvägen 2 Värnamo <1995 1961 140 748 950 1,838 4,209 2,744, COR
Värnamo Torp 1:11 Skogsmark Värnamo <1995 – 760,703 1,868 COR
Total Eastern Götaland 140 748 950 1,838 764,912 4,612
Total Castellum 3,749 140 748 950 5,537 784,975 58,612

Defi nitions

Actual net asset value (EPRA NNNAV)

Reported equity according to the balance sheet, adjusted for 5% deferred tax instead of nominal deferred tax.

Counterparty risk/Credit risk

The risk that a counterparty does not complete delivery or payment.

Currency risk

The risk that changes in the exchange rate will effect income and cash flow.

Data per share

In calculating income and cash flow per share the average number of shares has been used, whereas in calculating assets, shareholders' equity and net asset value per share the number of outstanding shares has been used.

Dividend pay out ratio

Dividend as a percentage of income from property management after a nominal tax deduction.

Dividend yield

Proposed dividend as a percentage of the share price at the year end.

Economic occupancy rate

Rental income accounted for during the period as a percentage of rental value for properties owned at the end of the period. Properties acquired/completed during the period have been restated as if they had been owned or completed during the whole year, while properties disposed of have been excluded entirely. Development projects and undeveloped land have been excluded.

EPRA EPS (Earnings Per Share)

Income from property management adjusted for nominal tax attributable to income from property management, divided with the average number of shares. With taxable income from property management means income from property management with a deduction for tax purposes of depreciation and reconstruction.

Equity/assets ratio

Disclosed equity as a percentage of total assets at the end of the period.

Funding risk

The risk that no funding is available or very unfavourable at a given point in time.

Income from property management

Net income for the period/year after reversal of changes in value and tax.

Interest coverage ratio

Income from property management after reversal of net financial items as a percentage of net financial items.

Interest rate risk

The risk that changes in the market interest rate will effect income and cash flow.

Liquidity risk

The risk of not having access to liquidity or unutilized credit facilities in order to settle payments due.

Loan to value ratio

Interest-bearing liabilities as a percentage of of the properties' fair value with deduction for acquired properties not taken in possession, and with addition for properties disposed of, still in possession, at the year-end.

Long term net asset value (EPRA NAV)

Reported equity according to the balance sheet, adjusted for interest rate derivatives and deferred tax.

Net operating income margin

Net operating income as a percentage of rental income.

Number of shares Registered number of shares - the number of shares registered at a given point in time.

Outstanding number of shares - the number of shares registered with a deduction for the company's own repurchased shares at a given point in time.

Average number of shares - the weighted average number of outstanding shares during a given period.

Operating expenses, maintenance, etc.

This item includes both direct property costs, such as operating expenses, maintenance, ground rent and real estate tax, as well as indirect costs for leasing and property administration.

Operational risk

The risk of incurring losses due to insufficient procedures and/or improper actions.

Property type

The property's primary rental value with regard to the type of premises. Premises for purposes other than the primary use may therefore be found within a property type.

Rental income

Rents debited plus supplements such as reimbursement of heating costs and real estate tax.

Rental value

Rental income plus estimated market rent for vacant premises.

Return on actual net asset value

Income after tax as a percentage of average ((opening balance+ closing balance-income after tax)/2) actual net asset value, but with 5% deferred tax instead of nominal tax. In the interim accounts the return has been recalculated on an annual basis, disregarding seasonal variations normally occurring in operations.

Return on total capital

Income before tax with reversed net financial items and changes in value on derivatives as a percentage of average ((opening balance+closing balance-changes in value on properties)/2) total capital. In the interim accounts the return has been recalculated on an annual basis, disregarding seasonal variations normally occurring in operations.

SEK per square metre

Property-related key ratios, expressed in terms of SEK per square metre, are based on properties owned at the end of the period. Properties acquired/completed during the year have been restated as if they had been owned or completed for the whole year, while properties disposed of have been excluded entirely. Development projects and undeveloped land have been excluded. In the interim accounts key ratios have been recalculated on an annual basis, disregarding seasonal variations normally occurring in operations.

Total yield per share

Share price development with addition of the dividends during the period which was reinvested in shares that day shares traded ex-dividend.

Castellum AB (publ)

(Corporate identity no. 556475-5550) Box 2269, 403 14 Gothenburg, Sweden Visiting address: Kaserntorget 5 Phone: +46(0)31-60 74 00. Fax: +46(0)31-13 17 55 [email protected] www.castellum.se

Aspholmen Fastigheter AB

(Corporate identity no. 556121-9089) Elementvägen 14, 702 27 Örebro, Sweden Phone: +46(0)19-27 65 00. Fax: +46(0)19-17 80 89 [email protected] www.aspholmenfastigheter.se

Fastighets AB Briggen

(Corporate identity no.556476-7688) Box 3158, 200 22 Malmö, Sweden Visiting address: Fredriksbergsgatan 1 Phone: +46(0)40-38 37 20. Fax: +46(0)40-38 37 37 [email protected] www.briggen.se

Fastighets AB Brostaden

(Corporate identity no. 556002-8952) Box 5013, 121 05 Johanneshov, Sweden Visiting address: Bolidenvägen 14 Phone: +46(0)8-602 33 00. Fax: +46(0)8-602 33 30 [email protected] www.brostaden.se

Fastighets AB Corallen

(Corporate identity no. 556226-6527) Box 148, 331 21 Värnamo, Sweden Visiting address: Lasarettsgatan 3 Phone: +46(0)370-69 49 00. Fax: +46(0)370-475 90 [email protected] www.corallen.se

Eklandia Fastighets AB

(Corporate identity no. 556122-3768) Box 8725, 402 75 Gothenburg, Sweden Visiting address: Theres Svenssons gata 9 Phone: +46(0)31-744 09 00. Fax: +46(0)31-744 09 50 [email protected] www.eklandia.se

Harry Sjögren AB

(Corporate identity no. 556051-0561) Kråketorpsgatan 20, 431 53 Mölndal, Sweden Phone: +46(0)31-706 65 00. Fax: +46(0)31-706 65 29 [email protected] www.harrysjogren.se