Castellum — Earnings Release 2013

Jul 16, 2013

Castellum AB (publ), Box 2269, SE-403 14 Gothenburg Org nr/Corp Id no SE 556075-5550 Tel +46 31 60 74 00 Fax +46 31 13 17 55

PRESS RELEASE No 10 – July 16, 2013

Castellum's half-year report January-June 2013:

Stable income from property management and positive net leasing

• Rental income for the period January-June 2013 amounted to SEKm 1,622 (SEKm 1,521 corresponding period previous year).
• Income from property management amounted to SEKm 634 (606), corresponding to SEK 3.87 (3.70) per share, an increase with 5%.
• The changes in value on properties amounted to SEKm 119 (28) and on derivatives to SEKm 387 (109).
• Net income after tax for the period amounted to SEKm 902 (580), corresponding to SEK 5.50 (3.54) per share.
• Net investments amounted to SEKm 846 (735) of which SEKm 799 (613) were new constructions, extensions and reconstructions, SEKm 152 (333) acquisitions and SEKm 105 (211) sales.

Gross leasing (i.e. the annual value of total leasing) during the period was SEKm 187 (154), of which SEKm 48 (25) were leasing of new constructions, extensions and reconstructions. Notices of termination amounted to SEKm 125 (141), of which bankruptcies were SEKm 13 (14) and SEKm 9 (17) were notices of termination with more than 18 months remaining length of contract. Net lease for the period was hence SEKm 62 (13) and for the second quarter SEKm 35 (21).

"Castellum's income from property management increased 5%, despite a hard winter with a cold first half-year and a weak business cycle", comments CEO Henrik Saxborn. "The net leasing is positive during the first half-year, mainly due to leasing in new projects", Saxborn adds.

Enclosure: Half-year Report January-June 2013

For further information, please contact Henrik Saxborn, CEO, phone +46 31 60 74 50 Ulrika Danielsson, Finance Director, phone +46 706-47 12 61

www.castellum.se

Castellum is one of the major listed real estate companies in Sweden. The fair value of the real estate portfolio amounts to SEK 37 billion, and comprises premises for office, retail, warehouse and industrial purposes with a total lettable area of 3.7 million sq.m. The real estate portfolio is owned and managed by six wholly owned subsidiaries with strong local roots in five growth regions: Greater Gothenburg, the Öresund Region, Greater Stockholm, Mälardalen and Eastern Götaland.

Castellum is listed on NASDAQ OMX Stockholm AB Large Cap.

Castellum AB (publ) discloses the information provided herein pursuant to the Securities Markets Act and/or the Financial Instruments Trading Act.

Sketch of the property Lundbyvassen 8:1, Gothenburg, where a new construction started during the second quarter 2013.

Half-year Report January-June 2013

Half-year Report January-June 2013

Castellum is one of the major listed real estate companies in Sweden. The fair value of the real estate portfolio amounts to SEK 37 billion, and comprises of commercial properties.

The real estate portfolio is owned and managed by six wholly owned subsidiaries with strong local roots in five growth regions: Greater Gothenburg (incl. Borås and Halmstad), the Öresund Region (Malmö, Lund, Helsingborg and Copenhagen), Greater Stockholm, Mälardalen (Örebro, Västerås and Uppsala) and Eastern Götaland (Jönköping, Linköping, Värnamo and Växjö). Castellum is listed on NASDAQ OMX Stockholm AB Large Cap.

• Rental income for the period January-June 2013 amounted to SEKm 1,622 (SEKm 1,521 corresponding period previous year).
• Income from property management amounted to SEKm 634 (606), corresponding to SEK 3.87 (3.70) per share, an increase of 5%.
• Changes in value on properties amounted to SEKm 119 (28) and on derivatives to SEKm 387 (109).
• Net income after tax for the period amounted to SEKm 902 (580), corresponding to SEK 5.50 (3.54) per share.
• Net investments amounted to SEKm 846 (735) of which SEKm 799 (613) were new constructions, extensions and reconstructions, SEKm 152 (333) acquisitions and SEKm 105 (211) sales.

	2013 Jan-June	2012 Jan-June	2012	2011	2010	2009	2008	2007	2006	2005	2004
Income from property management, SEK/share	3.87	3.70	7.65	7.15	6.96	6.89	5.93	5.63	5.38	5.00	4.52
Change previous year	+5%	+9%	+7%	+3%	+1%	+16%	+5%	+5%	+8%	+11%	+11%
Net income after tax, SEK/share	5.50	3.54	8.98	4.34	11.98	0.98	– 4.04	9.07	10.21	7.89	5.59
Change previous year	+55%		–23% +107%	–64%	+1,122%	pos.	neg.	–11%	+29%	+41%	+108%
Dividend, SEK/share			3.95	3.70	3.60	3.50	3.15	3.00	2.85	2.62	2.38
Change previous year			+7%	+3%	+3%	+11%	+5%	+5%	+9%	+11%	+12%
Property value, SEKm	37,301		34,632 36,328	33,867	31,768	29,267	29,165	27,717	24,238	21,270	19,449
Net investments, SEKm	846	735	2,545	1,908	1,279	1,129	2,710	2,559	1,823	889	774
Loan to value	54%	52%	53%	51%	50%	52%	50%	45%	45%	45%	45%

Henrik Saxborn, CEO Castellum

Castellum operates in a stable Swedish macroeconomic environment. Even if current GDP growth in Sweden is lower than normal, it is expected to increase in coming years as the global economy improves and Swedish exports pick up.

Sweden is experiencing rapid urbanization, and several of the country's major cities - such as Stockholm and Gothenburg - have a population growth rate among the highest in Europe. In these cities, however, new construction of offi ces and logistics premises still remains low, providing interesting investment opportunities for Castellum. I therefore assess that the risk level in the Swedish real estate market as well as Castellum's real estate portfolio is low.

I can state that the second quarter in Castellum shows weak growth in income from property management, altough the growth in rental income amounted to 5%. This can mainly be explained by a lump sum the second quarter previous year and to stubborn winter weather this year. Together with a strong fi rst quarter this means that Castellum's growth in income from property management during the fi rst half-year amounted to 5%.

Low fi nancial risk is a central part in Castellum's strategy and the loan-to-value ratio shall not permanently exceed 55%, which can be compared with the outcome of just below 54%. Projects profi ts and cash-fl ow growth in the cash fl ow ensures a continuous strong balance sheet.

Leasing activity remained high in the second quarter and 183 new leases were signed, representing an annual

Market comments

Swedish economy

GDP growth has been driven by an increase in domestic demand - mainly due to higher household incomes. However, the development of underlying demand is weak. During the period there was a decline in both export and investment. The June survey by the National Institute of Economic Research shows that confi dence among businesses and households is rising slowly, but from low levels. The Riksbank left the repo rate unchanged in July to refl ect signs of recovery in the Swedish economy as the global economy improves. However, infl ation is expected to remain low for a long time. The Riksbank assessment is that both employment and unemployment will remain at their current levels until mid-2014.

Macro indicators

Unemployment	8.2%	(May 2013)
Infl ation	– 0.1%	(June 2013 compared to June 2012)
GDP growth	1.7%	(Q1 2013 compared to Q1 2012)

Sorce: National Institute of Economic Research

Rental market

Despite low economic growth, there is a steady demand for both new constructions and existing premises. The pattern is the same for all Castellum areas, but with some divergence due to market vacancy and new-construction volume. Rental levels remain stable.

rent of SEKm 103. With a vacancy volume of approx SEKm 500 I see potential over time to improve the income from property management by effective leasing activity. Two of the larger leases relate to new construction: a headquarters building for a listed company located in Gothenburg and

a Nordic distribution centre in Helsingborg. These two fully leased, newly constructed facilities - along with other ongoing investments - mean that Castellum has projects in progress with a remaining investment volume of SEK 1.4 billion. All in all the net leasing of SEKm 62 has developed positively and increased SEKm 49 compared with the same period last year. The increase is primarily due to project-related leasing.

Sweden currently has a high youth-unemployment rate. At Castellum, we'd like to contribute to community improvements and we have offered summer jobs to approx 50 young people in 2013. In addition, we have initiated a mentored apprenticeship program where a total of 12 young people will have the opportunity to try out working life. Henrik Saxborn

CEO

Property market

The Swedish real estate market is characterized by fi rm domestic demand. During the fi rst half of 2013, transaction volume amounted to approx. SEK 45 (49) billion - of which Swedish players accounted for 92% (80%). The commercial segment represents 62% (72%) of the transaction volume, and increased activity outside major cities has been noted since the beginning of the year.

Castellum's assessment is that both demand and pricing remain stable in all markets and segments.

Interest and credit market

Since year end, the interest rate market has been characterized by continued unrest in the Eurozone. It is also greatly affected by speculation about what consequences might result from future actions by the world's major central banks. In all, this has resulted in volatile and rising long-term interest rates, whereas the short-term interest rate - controlled by Riksbank actions has basically remained unchanged. Short-term rates are expected to remain at a low level for some time; as confi rmed by the Riksbank monetary policy report in July. Access to credit, both for capital and credit markets, is considered to be good.

Business Concept Customers and organization

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 growth in cash fl ow, which along with a low fi nancial risk 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 1,800. All investments shall 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. In operations, there shall be an continuing focus on improved productivity and effi ciency.

Strategy for Funding

Capital structure

Castellum shall have low fi nancial risk, 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 short term 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. This implies that the growth of dividend will follow the growth of income from property management.

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.

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.

The customers - a reflection of Swedish domestic economy

Castellum has approx. 4,700 commercial contracts, with good risk exposure regarding geography, type of premises, length of contracts and fi elds of industry of the customer. The single largest contract corresponds to approx. 2% of Castellum's total rental income.

It is important that Castellum meets customers expectations. To follow up and evaluate efforts, an external customer survey is carried out annually, Satisfi ed Customer Index. The latest survey, that included offi ces, warehouses, industry and retail, continues to show consistently high marks for Castellum.

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 leases normally include a base-rent and an index clause, which provides for an adjustment of the rent corresponding to a certain percentage or connected to the infl ation. Leases may also contain supplements for the tenant's share of the property's total heating, cooling and property-tax costs.

Decentralized and small-scale organization

Castellum's operations are run in a small-scale organization consisting of six subsidiaries which own and manage the properties under their own brands. By having local roots, the subsidiaries forge close relationships with customers and develop thorough knowledge of the market situation and rental development within each market area.

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, ethics and environmental awareness.

Subsidiaries with strong brands

Castellum has six wholly owned subsidiaries which each engage about 40 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 contact. The fl at organization provides a short decision-making process and creates a customer oriented and active organization.

Castellum subsidiaries operate under their own names, which are strong brands on each local market.

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 regional development where local sub-sidiaries operate through co-operation with municipalities and universities/colleges.

Employees

Castellum works actively to hire and retain top-notch employees by offering a stimulating work environment, competence development and sharing of experiences both internally and externally.

Employee viewpoints on Castellum are monitored regularly and the survey carried out in 2013 continues to show a very high index, 86 on a scale of 100 which shows that the employees enjoy their working situation and have a high confi dence in the company and its management.

The Castellum group has approx. 265 employees.

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). Further Castellum also handles rules for decision making and work allocation, overall policies, IT/IS strategies, personnel and legal matters. Castellum AB has 18 employees.

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

Responsible business

Since 1995, Castellum has systematically been working with sustainability, i.e., developing the properties in those cities where the subsidiaries are present, creating a common set of values for actions towards employees, customers and vendors as well as actively working with environmental issues.

Environmental efforts are focused on effi cient energy consumption and improving the general environmental status of each property. Since the common Group objectives were set in 2007 (energy consumption to be reduced by at least 1% per sq.m. and year; carbon dioxide emissions reduced by at least 2.5% per sq.m.), decreases of 17% and 26% respectively have been achieved.

All new constructions must be environmentally classifi ed according to one of the following environmental classifi cation systems: Green Building, "Miljöbyggnad", BREEAM or LEED. Castellum owns 96 of Sweden's 297 Green Building classifi ed building, one BREEAM certifi ed building and one building which are certifi ed according to the Swedish system "Miljöbyggnad".

Castellum's 4 corner stones

Income, Costs and Results

Comparisons, shown in brackets, are made with the corresponding period previous year except in parts describing assets and fi nancing, where comparisons are made with the end of previous year. For defi nitions see Castellum's website, www.castellum.se

Income from property management, i.e. net income excluding changes in value and tax, amounted for the period January-June 2013 to SEKm 634 (606), equivalent to SEK 3.87 (3.70) per share - an increase of 5%. Income from property management rolling four quarters amounted to SEKm 1,283 (1,224) equivalent to SEK 7.82 per share (7.46) - an increase of 5%.

Income from property management per share

During the period, changes in value on properties amounted to SEKm 119 (28) and on derivatives to SEKm 387 (109). Net income after tax for the period was SEKm 902 (580), equivalent to SEK 5.50 (3.54) per share.

Rental income

Group rental income amounted to SEKm 1,622 (1,521). For offi ce and retail properties, the average contracted rental level, including charged heating, cooling and property tax, amounted to SEK 1,269 per sq.m., whereas for warehouse and industrial properties, it amounted to SEK 758 per sq.m. Rental levels, which are considered to be in line with the market, have increased by 1% in comparable portfolio compared with previous year. This is mainly an effect of indexation and can be compared with the normal industry index clause (October to October), which amounted to 0.4% for 2013. Castellums higher index adjustment is explained by the Groups focus on index clause with minimum upward adjustment in the lease portfolio, which provides some protection against defl ation and a higher indexation than normal index adjustment clause in a low infl ation environment.

Rental value and economic occupancy rate

The average economic occupancy rate was 88.2% (88.9%). The total rental value for vacant premises on yearly basis amounted to approx. SEKm 480 (416).

The rental income for the period includes a lump sum of SEKm 11 (8) as a result of early termination of a lease.

Gross leasing (i.e. the annual value of total leasing) during the period was SEKm 187 (154), of which SEKm 48 (25) were leasing of new constructions, extensions and reconstructions. Notices of termination amounted to SEKm 125 (141), of which bankruptcies were SEKm 13 (14) and SEKm 9 (17) were notices of termination with more than 18 months remaining length of contract. Net lease for the period was hence SEKm 62 (13) and for the second quarter SEKm 35 (21). The time difference between reported net leasing and the effect in income thereof is estimated to be between 9-18 months.

Property costs

Property costs amounted to SEKm 586 (524) corresponding to SEK 325 per sq.m. (308). The increase is chiefl y an effect of higher costs of approx SEKm 35 for snow remowal and a colder fi rst half-year compared to previous year but also higher property tax due to increased tax values of 10% in average. Most of the property tax are charged the tenants, why the impact on earnings is marginal.

Costs for heating during the period has been calculated to 105% (94%) of a normal year according to the degree day statistics.

Property costs, SEK/sq.m.
	Offi ce/ Retail	Warehouse/ Industrial	Total 2013	Total 2012
Operating expenses	216	139	180	168
Maintenance	43	23	34	34
Ground rent	7	7	7	7
Property tax	70	21	47	45
Direct property costs	336	190	268	254
Leasing and property administration (indirect)	–	–	57	54
Total	336	190	325	308
Previous year	322	172	308

Central administrative expenses

Central administrative expenses totalled SEKm 49 (47). This includes costs for a profi t-and-share-price related incentive plan for 10 persons in executive management of SEKm 6 (6).

Net interest rate

Net interest items were SEKm –353 (–344). The average interest rate level was 3.7% (4.0%).

Net fi nancial incomes were positively affected by approx. SEKm 25 due to an average interest rate level decrease by 0.3% units.

Changes in value

The change in value in Castellum's portfolio during the period amounted to SEKm 119 (28), of which approx. SEKm 90 refers to projects gains. The change in value includes SEKm 19 from three sold properties. The net sales price amounted to SEKm 105 after reduction for assessed deferred tax and transaction costs of SEKm 6. Hence the underlying property price, which amounted to SEKm 111, exceeded the latest valuation of SEKm 86 with SEKm 25. Since the demand and prices have been generally stable no general yield change has been made in the internal valuations during the period.

The value in the derivatives portfolio has changed by SEKm 389 (109), mainly due to changes in long-term market interest rates. Castellum's currency derivatives, with purpose to hedge currency fl uctuations in the Danish investment, has during the period changed SEKm –5 (0) where the effective portion of the value changes of SEKm –3 (0) is accounted for in other total net income.

Tax

The nominal corporate tax rate in Sweden is 22%. Due to the possibility to deduct depreciation and reconstructions for tax purposes, and to utilize tax loss carry forwards, the paid tax is low. Paid tax occurs since a few subsidiaries has no possibilities to group contributions for tax purpose.

Remaining tax loss carryforwards can be calculated to SEKm 1,142 (1,610). Fair values for the properties exceed their fi scal value by SEKm 18,064 (17,412) of which SEKm 824 relates to the acquisition date of properties accounted for as asset acquisitions. As deferred tax liability, a full nominal 22% tax of the net difference is reported, reduced by the deferred tax relating to asset acquisitions, i.e., SEKm 3,542 (3,310).

Castellum has entered into an agreement on extended co-operation with the Swedish Tax Authority.

Castellum has no current tax disputes.

Tax Calculation 30-06-2013

	Basis	Basis
SEKm	current tax	deferred tax
Income from property management	634
Deductions for tax purposes
depreciations	– 328	328
reconstructions	– 199	199
Other tax allowances	– 7	1
Taxable income from property management	100	528
Properties sold	9	– 42
Changes in value on properties	–	100
Changes in value on derivatives	387	–
Taxable income before tax loss carry forwards	496	586
Tax loss carry forwards, opening balance	– 1,610	1,610
Tax loss carry forwards, closing balance	1,142	– 1,142
Taxable income	28	1,054
Of which 22% current/deferred tax	– 6	– 232

Real Estate Portfolio

The real estate portfolio is located in Greater Gothenburg, the Öresund Region, Greater Stockholm, Mälardalen and Eastern Götaland. The three major urban regions represents 73% of the portfolio.

The commercial portfolio consists of 65% offi ce and retail properties and 31% 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 adequate means of communication and services. The remaining 4% consist of projects and undeveloped land.

Castellum owns approx. 760,000 sq.m. of unutilized building rights and ongoing projects with an remaining investment level of approx. SEKm 1,400.

Investments

During the period the real estate portfolio has changed as below.

Changes in the real estate portfolio Value, SEKm		Number
Real estate portfolio on 1 January, 2013	36,328	635
+ Acquisitions	152	7
+ New constructions, extensions and reconstructions	799	–
– Sales	– 86	– 3
+/– Unrealized changes in value	100	–
+/– Currency translation	8	–
Real estate portfolio on 30 June, 2013	37,301	639

During the period, investments totalling SEKm 951 (946) were carried out, of which SEKm 799 (613) were new constructions, extensions and reconstructions and SEKm 152 (333) were acquisitions. Of the total investments SEKm 305 refers to Greater Gothenburg, SEKm 189 to Greater Stockholm, SEKm 168 to Mälardalen, SEKm 161 to the Öresund Region and SEKm 128 to Eastern Götaland.

After reduction for sold properties of SEKm 105 (211) the net investments totalled SEKm 846 (735).

Net property investments

Property value

Internal valuations

Castellum assesses the fair value of the properties through internal valuations, These are based on a 10-year cash fl ow based model with an individual valuation for each property of both its future earnings capacity and the required market yield. Projects in progress have been valued using the same principle, but with deductions for remaining investments. Properties with building rights have been valued on the basis of an estimated market value per square metre, on average approx. SEK 990 per sq.m. In order to ensure and validate the quality of the internal valuations, an external valuation – representing over 50% of the portfolio – is made every year-end. The difference between the internal and external valuations has historically been small.

Based on these internal valuations, property value at the end of the period were assessed to SEKm 37,301 (36,328), corresponding to approx. SEK 10,000 per sq.m.

Average valuation yield
(excl. project/land and building rights)	SEKm
Net operating income properties	1,136
+ Real occupancy rate, 94% at the lowest	145
+/- Property cost annual rate	53
– Property administration, 30 SEK/sq.m.	– 53
Normalized net operating income (6 months)	1,281
Valuation (excl. building rights of SEKm 453)	35,311
Average valuation yield	7.3%

Average valuation yield over time

Castellum's real estate portfolio 30-06-2013

	30-06-2013				January-June 2013
	No. of	Area thous.	Property value	Property value	Rental value	Rental value	Economic occupancy	Rental income	Property costs	Property costs	Net operating income
Offi ce/retail	properties	sq.m.	SEKm	SEK/sq.m.	SEKm	SEK/sq.m.	rate	SEKm	SEKm	SEK/sq.m.	SEKm
Greater Gothenburg	80	444	6,475	14,594	295	1,330	90.3%	266	73	331	193
Öresund Region	64	385	5,779	14,997	277	1,435	82.7%	229	70	362	159
Greater Stockholm	52	348	4,433	12,746	236	1,356	81.2%	191	58	339	133
Mälardalen	75	379	4,208	11,101	216	1,143	90.9%	197	64	337	133
Eastern Götaland	55	328	3,213	9,780	172	1,045	87.9%	151	51	308	100
Total offi ce/retail	326	1,884	24,108	12,794	1,196	1,269	86.5%	1,034	316	336	718
Warehouse/industrial
Greater Gothenburg	103	675	5,250	7,772	257	760	97.4%	250	58	173	192
Öresund Region	43	316	1,922	6,089	115	730	88.3%	102	31	192	71
Greater Stockholm	50	267	2,431	9,119	131	980	86.0%	112	34	259	78
Mälardalen	39	216	1,245	5,769	76	706	88.9%	68	23	212	45
Eastern Götaland	34	190	808	4,256	51	541	85.4%	44	12	127	32
Total warehouse/industrial	269	1,664	11,656	7,007	630	758	91.4%	576	158	190	418
Total	595	3,548	35,764	10,081	1,826	1,029	88.2%	1,610	474	268	1,136
Leasing and property administration									102	57	– 102
Total after leasing and property administration									576	325	1,034
Development projects	17	107	1,264	–	43	–	–	19	12	–	7
Undeveloped land	27	–	273	–	–	–	–	–	–	–	–
Total	639	3,655	37,301	–	1,869	–	–	1,629	588	–	1,041

The table above relates to the properties owned by Castellum at the end of the period and refl ects the income and costs of the properties as if they had been owned during the whole period. The discrepancy between the net operating income of SEKm 1,041 accounted for above and the net operating income of SEKm 1,036 in the income statement is explained by the deduction of the net operating income of SEKm 0 on properties sold during the period, as well as the adjustment of the net operating income of SEKm 5 on properties acquired/completed during the period, which are recalculated as if they had been owned or completed during the whole period.

Property value by property type Property value by region

Property related key ratios Segment information

	2013 Jan-June	2012 Jan-June	2012 Jan-Dec
Rental value, SEK/sq.m.	1,029	1,014	1,015
Economic occupancy rate	88.2%	88.9%	88.6%
Property costs, SEK/sq.m.	325	308	298
Net operating income, SEK/sq.m.	583	594	601
Property value, SEK/sq.m.	10,081	9,971	9,916
Number of properties	639	611	635
Lettable area, thousand sq.m.	3,655	3,425	3,621

		Rental income	Income from property management
	2013	2012	2013	2012
SEKm	Jan-June	Jan-June	Jan-June	Jan-June
Greater Gothenburg	513	487	240	223
Öresund Region	332	301	127	120
Greater Stockholm	309	279	117	107
Mälardalen	274	265	98	101
Eastern Götaland	194 189		72	74
Total	1,622	1,521	654	625

The discrepancy between the income from property management of SEKm 654 (625) above and the groups accounted income before tax of SEKm 1,140 (743) consists of unallocated income from property management of SEKm –20 (–19), changes in property value of SEKm 119 (28) and changes in values of interest rate derivatives of SEKm 387 (109).

Larger investments and sales

Lundbyvassen 8:1 in Gothenburg

In central Gothenburg Castellum has during the second quarter 2013 started a new construction of a fully let offi ce building of 8,880 sq.m. for a listed company with headquarter in Gothenburg. The property is well situated considering future urban development and in connection to Castellum's existing portfolio.

The investment is calculated to SEKm 219 and to be completed during the fi rst quarter 2015.

The new building will be constructed in accordance with the environmental system Green Building.

Dragarbrunn 20:4 in Uppsala

In central Uppsala an investment is ongoing consisting a reconstruction of 5,500 sq.m. and an extension of 4,520 sq.m. into modern offi ce premises.

The investment is calculated to SEKm 193 and to be completed during the third quarter 2014. The building has an occupancy rate of 38%.

The reconstruction and extension will be completed in accordance with the enviromental system Miljöbyggnad.

Atollen 3 and Algen 1 in Jönköping

In central Jönköping Castellum has a new construction ongoing of 10,419 sq.m. in total comprising offi ce, retail, residential and restaurant premises.

The investment is divided in two phases and is estimated to totally SEKm 288. The fi rst phase of 6,019 sq.m. is estimated to be completed during the fourth quarter 2013 and the second phase of 4,400 sq.m. during the second quarter 2015. The both phases has an occupancy rate of 12% in total.

The new construction will be completed in accordance with the enviromental system Miljöbyggnad.

Sändaren 1 in Malmö

During 2010 Castellum acquired the property Sändaren 1 in Malmö which consisted of offi ce and warehouse premises. During 2012 a reconstruction of 9,850 sq.m. started into effective and fl exible offi ce premises as well as an extension of 2,300 sq.m. offi ce premises.

The investment is calculated to SEKm 125 and to be completed during the last quarter 2013. The occupancy rate in Sändaren 1 is 94%.

The reconstruction and extension will be completed in accordance with the enviromental system Miljöbyggnad and Green Building-standard.

Larger projects	Area	Econ. occup.	Total inv., land Remain. inv.
Property	sq.m	July 2013	incl. SEKm		SEKm Completed Comment
Ongoing projects
Lundbyvassen 8:1, Gothenburg	8,880	100%	219	183	Q1 2015 New construction offi ce
Dragarbrunn 20:4, Uppsala	10,020	38%	193	98	Q3 2014 Reconstruction and extension offi ce
Atollen 3, Jönköping	6,019	18%	152	33	Q4 2013 New construction offi ce/retail/residential
Algen 1, Jönköping	4,400	7%	136	107	Q2 2015 New construction retail/offi ce/restaurant
Sändaren 1, Malmö	12,150	94%	125	73	Q4 2013 Reconstruction and extension offi ce
Kulan 3, Helsingborg	9,700	100%	82	62	Q4 2014 New construction logistic
Åby 1:223, Haninge	6,550	0%	67	10	Q3 2013 New construction warehouse/logistic
Högspänningen 1, Västerås	4,040	25%	47	40	Q1 2014 New construction logistic/offi ce
Boländerna 35:1, Uppsala	8,750	65%	38	22	Q3 2013 Reconstruction retail
Pallisaden 1, Huddinge	2,184	100%	36	15	Q4 2013 New construction retail
Grusbacken 3, Helsingborg	2,450	100%	36	3	Q3 2013 New construction offi ce/warehouse
Projects completed/partly moved in
Lindholmen 28:3, Gothenburg	9,400	50%	280	77	Q2 2013 New construction offi ce*
Fullriggaren 4, Malmö	5,400	17%	156	33	Q1 2013 New construction offi ce*
Forskaren 2, Lund	9,000	74%	142	23	Q4 2012 New construction offi ce*
Gården 15, Linköping	9,705	62%	116	9	Q1 2013 New construction offi ce/retail/warehouse
Visiret 2, Huddinge	12,357	100%	71	8	Q2 2013 New construction car park
Inköparen 1, Örebro	4,300	100%	68	3	Q2 2013 New construction offi ce
Rosersberg 11:34, Sigtuna	3,900	89%	40	0	Q2 2013 New construction warehouse/offi ce
Ättehögen 18, Jönköping	3,220	100%	39	0	Q1 2013 New construction production premises
Larger acquisitions during 2013		Econ. occup.	Acquisition
Property	Area, sq.m.	July 2013	SEKm		Access Category
Kärra 78:8, 78:12-13 and 80:6, Gothenburg	8,400	100%	77		May 2013 Warehouse/production premises
Högsbo 20:11, Gothenburg	2,700	45%	34		May 2013 Offi ce
Larger sales during 2013		Underlying prop.	Deferred tax,	Net sales
Property	Yta, kvm		price, SEKm trans costs, SEKm	price, SEKm	Access Category
Alphyddan 11, Stockholm	4,363	54	– 4	50	Feb 2013 Offi ce
Högsbo 4:1, Gothenburg	4,564	32	– 1	31	Feb 2013 Warehouse/offi ce

* Remaining volume if investment will be utilized as the vacant premises are rented out.

Kulan 3 in Helsingborg

Castellum has during the second quarter 2013 started a new construction of 9,700 sq.m. fl exible logistic premises in Berga, Helsingborg. The building is fully let and will be a nordic distribution center.

The investment is calculated to SEKm 82 and to be completed during the fourth quarter 2014.

The new building will be completed in accordance with the enviromental system Miljöbyggnad and Green Building.

Lindholmen 28:3 in Gothenburg

During 2011 Castellum acquired a property on Lindholmen in Gothenburg which is adjacent to the company's existing properties. During the second quarter 2013 an offi ce building - Aurora - of 9,400 sq.m. has been completed on the property.

The invetsment amounted to SEKm 280 and the building has an occupancy rate of 50%.

The new building has been constructed in accordance with the environmental system Green Building.

Financing

Castellum's assets had a value of SEKm 37,636 (36,631) on 30 June 2013 and these are fi nanced as follows.

Financing 30-06-2013

Castellum shall have a low financial risk, meaning a loan to value ratio not permanently exceeding 55% and an interest coverage ratio of at least 200%.

Loan to value ratio and interest coverage ratio

Interest bearing liabilities

At the end of the period Castellum had binding credit agreements totalling SEKm 23,806 (23,361) of which SEKm 21,260 (20,262) were long term binding and SEKm 2,546 (3,099) were short term binding.

During the period SEKm 1,000 were issued under the MTN-program and an existing credit agreements of SEKm 2,000 has been extended.

After deduction of liquid assets of SEKm 59 (44), net interest bearing liabilities were SEKm 19,929 (19,050), of which SEKm 2,200 (1,200) were MTN and SEKm 1,319 (1,872) outstanding commercial papers.

Most of Castellum's loans are short-term revolving loans, utilized in long-term binding credit agreements in the largest nordic banks. This means great fl exibility in the choice of interest rate base, interest rate period and tied up capital. The MTN-program and the commercial papers are a complement to the existing funding in banks and will broaden the funding base.

Long-term loan commitments in banks are secured by pledged mortgages and/or fi nancial covenants. Outstanding commercial papers and the MTN-program are unsecured.

The interest bearing liabilities amounted to SEKm 19,929 (19,050) of which SEKm 16,441 (15,917) were secured by the company's properties and SEKm 3,488 (3,133) unsecured. The proportion of used secured fi nancing was thus 44% of the property value. 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, 54% and 280% respectively. The average duration of Castellum's long-term credit agreements was 3.8 years (4.1). Margins and fees on long-term credit agreements had an average duration of 2.6 years (2.8).

	Loan maturity structure 30-06-2013
			Utilized in:
SEKm	Credit agreements	Bank	MTN /Cert	Total
0 - 1 year	2,546	904	1,319	2,223
1 - 2 years	407	53	–	53
2 - 3 years	6,007	2,757	1,200	3,957
3 - 4 years	7,007	5,557	1,000	6,557
4 - 5 years	5,707	5,007	–	5,007
> 5 years	2,132	2,132	–	2,132
Total	23,806	16,410	3,519	19,929
	Unutilized credit in long term credit agreements, SEKm			1,331

Interest rate maturity structure

The average effective interest rate as of 30 June, 2013 was 3.7% (3.6%). In order to secure a stable and low net cash fl ow of interest income/costs the interest rate maturity structure is distributed over time. The average fi xed interest term on the same date was 2.7 years (2.8).

Castellum utilizes interest rate derivatives to achieve the desired interest rate maturity structure. Interest rate derivatives is a cost effective and fl exible way of extending loans with short term interest rates to achieve the desired fi xed interest term. In the interest rate maturity structure, interest rate derivatives are accounted for in the earliest time segment in which they can mature.

Credit margins are distributed in the interval of the underlying loans.

Interest rate maturity structure 30-06-2013
Interest rate
	Loan	derivatives		Closing
	SEKm	SEKm	Net, SEKm	interest rate
0 - 1 year	19,804	– 9,450	10,354	3.7%
1 - 2 years	–	800	800	3.5%
2 - 3 years	125	950	1,075	4.3%
3 - 4 years	–	1,300	1,300	3.9%
4 - 5 years	–	1,400	1,400	3.5%
5 - 10 years	–	5,000	5,000	3.7%
Total	19,929	–	19,929	3.7%

Interest rate maturity structure

Currency

Castellum owns properties in Denmark with a fair value of SEKm 456 (435), 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 the fi nancial policy, between 60-100% of investments in foreign subsidiaries are to be fi nanced in local currency.

Interest rate and currency derivatives

According to the accounting standard IAS 39, derivatives are subject to market valuation. Castellum utilizes interest rate derivatives to achieve the desired interest rate maturity structure. If the agreed interest rate deviates from the market interest rate, 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 derivatives in order to hedge currency fl uctuation in its investment in Denmark. As for currency derivatives, a theoretical surplus/sub value occurs if the agreed exchange rate deviates from the current exchange rate, where the effective portion of value changes is accounted for in other total income. At maturity, a derivative's market value is dissolved in its entirety and the change in value over time has thus not affected equity.

To calculate the market value of derivatives, market rates for each term and, where appropriate, exchange rates, as quoted on the market at the closing date are used. Interest rate swaps are valued by discounting future cash fl ows to present value while instruments containing options are valued at current repurchase price, which is obtained from the counter-party.

As of June 30, 2013, the market value of the interest rate derivatives portfolio amounted to SEKm –727 (–1,116) and the currency derivat portfolio to SEKm 6 (11).

Castellum's fi nancial policy and committments in credit agreements
	Policy	Committment	Outcome
Loan to value ratio	Not in the long run exceeding 55%	No more than 65%	54%
Interest coverage ratio	At least 200%	At least 150%	280%
Interest rate risk
– average fi xed interest term	0.5-3 years	–	2.7 years
– proportion maturing within 6 months	No more than 50%	–	45%
Currency risk
– investment	60%-100% funded in local currency	–	79%
– 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 ll payments due	–	SEKm 1,331 unutilized credit agreements

Consolidated statement of Comprehensive Income
	2013	2012	2013	2012	Rolling 4 quarters	2012
SEKm	April - June	April - June	Jan - June	Jan - June	July 12 - June 13	Jan - Dec
Rental income	808	768	1,622	1,521	3,174	3,073
Operating expenses	– 133	– 120	– 326	– 288	– 582	– 544
Maintenance	– 32	– 30	– 60	– 57	– 133	– 130
Ground rent	– 6	– 6	– 13	– 12	– 25	– 24
Property tax	– 45	– 38	– 85	– 76	– 161	– 152
Leasing and property administration	– 53	– 46	– 102	– 91	– 203	– 192
Net operating income	539	528	1,036	997	2,070	2,031
Central administrative expenses	– 28	– 24	– 49	– 47	– 95	– 93
Net interest costs	– 177	– 171	– 353	– 344	– 692	– 683
Income from property management	334	333	634	606	1,283	1,255
Changes in value
Properties	87	18	119	28	22	– 69
Derivatives	221	– 97	387	109	168	– 110
Income before tax	642	254	1,140	743	1,473	1,076
Current tax	– 4	– 4	– 6	– 6	– 7	– 7
Deferred tax	– 139	– 32	– 232	– 157	329	404
Net income for the period/year	499	218	902	580	1,795	1,473
Other total net income - Items that will be reclassifi ed into profi t/loss
Translation difference of currencies	13	1	6	0	– 6	– 12
Change in value derivatives, currency risk hedge	– 10	– 1	– 3	0	5	8
Total net income for the period/year	502	218	905	580	1,794	1,469

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

Data per Share
	2013	2012	2013	2012	Rolling 4 quarters	2012
	April - June	April - June	Jan - June	Jan - June	July 12 - June 13	Jan - Dec
Average number of shares, thousand	164,000	164,000	164,000	164,000	164,000	164,000
Income from property management, SEK	2.04	2.03	3.87	3.70	7.82	7.65
Income from property management after tax (EPRA EPS*), SEK	1.96	1.87	3.73	3.46	7.54	7.27
Earnings after tax, SEK	3.04	1.33	5.50	3.54	10.95	8.98
Outstanding number of shares, thousand	164,000	164,000	164,000	164,000	164,000	164,000
Property value, SEK	227	211	227	211	227	222
Long term net asset value (EPRA NAV*), SEK	101	97	101	97	101	100
Actual net asset value (EPRA NNNAV*), SEK	92	87	92	87	92	90

Since there is no potential common stock (e.g. convertibles), there is no effect of dilution.

Financial Key Ratios
	2013	2012	2013	2012	Rolling 4 quarters	2012
	April - June	April - June	Jan - June	Jan - June	July 12 - June 13	Jan - Dec
Net operating income margin	67%	69%	64%	66%	65%	66%
Interest coverage ratio	289%	295%	280%	276%	285%	284%
Return on actual net asset value	15.5%	6.0%	14.0%	9.7%	10.3%	7.9%
Return on total capital	6.4%	6.0%	6.0%	5.7%	5.5%	5.3%
Net investments, SEKm	513	412	846	735	2,656	2,545
Loan to value ratio	54%	52%	54%	52%	54%	53%

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

Consolidated Balance Sheet
SEKm	30 June 2013	30 June 2012	31 December 2012
Assets
Investment properties	37,301	34,632	36,328
Other fi xed assets	30	22	27
Current receivables	246	242	232
Cash and bank	59	59	44
Total assets	37,636	34,955	36,631
Shareholders' equity and liabilities
Shareholders' equity	12,322	11,176	12,065
Deferred tax liability	3,542	3,871	3,310
Derivatives	721	894	1,105
Long term interest-bearing liabilities	19,988	18,066	19,094
Non interest-bearing liabilities	1,063	948	1,057
Total shareholders' equity and liabilities	37,636	34,955	36,631
Pledged assets (property mortgages)	18,610	18,880	18,764
Contingent liabilities	–	–	–

Changes in Equity

No of outstanding	Other capital contribution	Translation of currency reserve	Hedging of currency reserve	Retained	earnings Total equity
164,000	4,096	0	0	7,021	11,203
–	–	–	–	– 607	– 607
–	–	–	–	580	580
–	–	0	0	–	0
164,000	4,096	0	0	6,994	11,176
–	–	–	–	893	893
–	–	– 12	8	–	– 4
164,000	4,096	– 12	8	7,887	12,065
–	–	–	–	– 648	– 648
–	–	–	–	902	902
–	–	6	– 3	–	3
164,000	4,096	– 6	5	8,141	12,322
		shares, thousand Share capital 86 – – – 86 – – 86 – – – 86

Cash Flow Statement

	2013	2012	2013	2012	Rolling 4 quarters	2012
SEKm	April - June	April - June	Jan - June	Jan - June	July 12 - June 13	Jan - Dec
Net operating income	539	528	1 036	997	2,070	2,031
Central administrative expenses	– 28	– 24	– 49	– 47	– 95	– 93
Reversed depreciations	3	3	5	4	10	9
Net interest rates paid	– 163	– 160	– 304	– 313	– 691	– 700
Tax paid	– 3	– 2	– 12	– 5	– 8	– 1
Translation difference foreign operations	– 2	–	– 2	–	1	3
Cash fl ow from operating activities before change in
working capital	346	345	674	636	1,287	1,249
Change in current receivables	0	– 43	– 22	– 6	– 48	– 32
Change in current liabilities	– 28	– 14	– 57	– 122	98	33
Cash fl ow from operating activities	318	288	595	508	1,337	1,250
Investments in new constructions, refurbishments and extensions	– 392	– 306	– 799	– 613	– 1,465	– 1,279
Property acquisitions	– 146	– 309	– 152	– 333	– 1,338	– 1,519
Change in liabilities at acquisitions of property	20	– 17	20	– 53	17	– 56
Property sales	25	203	105	211	147	253
Change in receivables at sales of property	8	– 44	8	– 44	44	– 8
Other net investments	– 7	– 5	– 11	– 13	– 16	– 18
Cash fl ow from investment activities	– 492	– 478	– 829	– 845	– 2,611	– 2,627
Change in long term liabilities	215	227	894	906	1,922	1,934
Change in long term receivables	–	–	3	–	0	– 3
Dividend paid	–	–	– 648	– 607	– 648	– 607
Cash fl ow from fi nancing activities	215	227	249	299	1,274	1,324
Cash fl ow for the period/year	41	37	15	– 38	0	– 53
Cash and bank, opening balance	18	22	44	97	59	97
Cash and bank closing balance	59	59	59	59	59	44

The Parent Company

The parent company Castellum AB is responsible for matters concerning the stock market, such as consolidated reports and stock market information, as well as the credit market, such as funding and fi nancial risk management.

The parent company takes part in property-related operations through involvement in subsidiary Boards.

Income statement SEKm	2013 Apr-June	2012 Apr-June	2012 Jan-June	2012 Jan-June
Income	4	4	8	8
Operating expenses	– 22	– 18	– 37	– 34
Net fi nancial items	6	3	9	7
Changes in value derivatives	221	– 97	387	109
Income before tax	209	– 108	367	90
Tax	– 46	29	– 81	– 24
Net income for the period	163	– 79	286	66
Comprehensive income for the parent company
Net income for the period	163	– 79	286	66
Other total net income - Reclassifi ed into profi t/loss
Translation diff. foreign operations	10	1	3	0
Unrealized change, currency hedge	– 10	– 1	– 3	0
Total net income for the period	163	– 79	286	66
Balance sheet SEKm		30 June 2013	30 June 2012	31 Dec 2012
Participations in group companies		5,838	5,338	5,338
Receivables, group companies			17,804 17,953 18,628
Other assets		159	254	234
Cash and bank		41	0	27
Total			23,842 23,545 24,227
Shareholders' equity		4,334	4,316	4,696
Derivatives		721	894	1,105
Interest bearing liabilities			17,820 16,843 16,924
Interest bearing liabilities,
group companies		778	1,308	1,361
Other liabilities		189	184	141
Total			23,842 23,545 24,227
Pledged assets (receivables
group companies) Contingent liabilities (guaranteed		15,146	16,018	15,090

Accounting Principles

Castellum follows the EU-adopted IFRS standards and interpretations (IFRIC). This interim report has been prepared according to IAS 34 Interim Financial Reporting and the Annual Accounts Act. Since the beginning of the year, Castellum applies the new layout of other net income in accordance with IAS 1. Information of items measured at fair value is disclosed in accordance with IFRS 13 where investment properties are classifi ed in level 3 and derivatives in level 2. Accounting principles and methods for calculations have remained unchanged compared with the Annual Report of the previous year.

Opportunities and Risks for Group and Parent Company

Opportunities and risks in the cash flow

Over time, increasing market interest rates normally constitute an effect of economic growth and increasing infl ation, which is thought to result in higher rental income. This is partly due to the fact that the demand for premises is thought to increase. This leads in turn to reduced vacancies and hence to the potential for increasing market rents. It is also partly due to the fact that the index clause in commercial contracts compensates for increasing 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 changes in rental income and interest cost do not take place at the exact same time, which is why the effect on income in the short run may occur at different points in time.

Sensitivity analysis - cash fl ow
Effect on income next 12 months
	Effect on income, SEKm		Scenario
	+/– 1% (units)	Boom	Recession
Rental level / Index	+ 33/– 33	+	–
Vacancies	+ 37/– 37	+	–
Property costs	– 12/+ 12	–	0
Interest costs	– 83/+ 77	–	+

Opportunities and risks in property values

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 may be more volatile. Property values are determined by supply and demand, where prices mainly depend on the properties' expected net operating incomes and the buyers' required yield. An increasing demand results in lower required yields and hence an upward adjustment in prices, while a weaker demand has the opposite effect. In the same way, a positive development in net operating income results in an upward adjustment in prices, while a negative development has the opposite effect.

In property valuations, consideration should be taken of an uncertainty range of +/– 5-10%, in order to refl ect the uncertainty that exists in the assumptions and calculations made.

Sensitivity analysis - change in value

Properties	– 20%	– 10%	0	+10%	+20%
Changes in value, SEKm	– 7,460	– 3,730	0	3,730	7,460
Loan to value ratio	67%	60%	54%	49%	45%

Financial risk

Ownership of properties presumes a working credit market. Castellum's greatest fi nancial risk is to lack access to funding. The risk is reduced by low loan-to-value ratio and long-term credit agreements.

Signing of the Report

The Board of Directors and the Chief Executive Offi cer assure that the Half-year Report provide a fair view of the parent company's and the Group's operations, fi nancial position and result as well as describes signifi cant risks and uncertainties that the parent company and the companies included in the Group are faced with.

Gothenburg July 16, 2013

Charlotte StrömbergPer Berggren Chairman Board member

Marianne Dicander Alexandersson Christer Jacobson Board member Board member

Ulla-Britt Fräjdin-Hellqvist Jan Åke Jonsson Board member Board member

Johan Skoglund Henrik Saxborn Board member CEO

Auditors' Report

Independent Auditors' Report on Review of Half-year Financial Information.

To the Board of Directors of Castellum AB

Corporate indetity number: 556475-5550

Introduction

We have reviewed the half-year report for Castellum AB (publ), corporate identity number 556475-5550, for the period January 1 – June 30, 2013. The Board and the Managing Director are responsible for the preparation and presentation of this half-year report in accordance with IAS 34 and the Annual Accounts Act. Our responsibility is to express a conclusion on this half-yearly report based on our review.

Scope of Review

We conducted our review in accordance with the Standard on Review Engagements SÖG 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by FAR. A review of interim fi nancial information consists of making inquiries, primarily of persons responsible for fi nancial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with ISA and other generally accepted auditing practices. The procedures performed in a review do not enable us to obtain a level of assurance that would make us aware of all signifi cant matters that might be identifi ed in an audit. Therefore, the conclusion expressed based on a review does not give the same level of assurance as a conclusion expressed based on an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying half-year report is not prepared, in all material respects, in accordance with IAS 34 and the Annual Accounts Act.

Gothenburg July 16, 2013

Magnus Fredmer Conny Lyser

Accountant Accountant

Authorized Public Authorized Public

The Castellum Share

The Castellum share is listed on NASDAQ OMX Stockholm AB Large Cap. At the end of the period the company had about 10,100 shareholders. Shareholders registered abroad cannot be broken down in terms of directly held and nominee registered shares except for two foreign shareholder who has fl agged for holding over 5%, Stichting Pensioenfonds ABP and European Investors Holding Company Inc. Castellum has no direct registered shareholders with holdings exceeding 10%. The ten single largest Swedish shareholders can be seen in the table below.

Shareholders on 30-06-2013	Number of shares thousand	Percentage of voting rights and capital
Magdalena Szombatfalvy	4,935	3.0%
Stiftelsen Global Challenges Foundation	2,500	1.5%
László Szombatfalvy	2,500	1.5%
Lannebo Småbolag	2,423	1.5%
Länsförsäkringar Fastighetsfond	2,379	1.5%
KAS Depositary Trust Company	2,051	1.3%
Fjärde AP-fonden	1,978	1.2%
Caceis Bank France	1,830	1.1%
Andra AP-fonden	1,800	1.1%
AFA Sjukförsäkrings AB	1,714	1.0%
Board and executive management Castellum	302	0.2%
Other shareholders registered in Sweden	38,728	23.6%
Shareholders registered abroad	100,860	61.5%
Total outstanding shares	164,000	100.0%
Repurchased shares	8,007
Total registered shares	172,007

There is no potential common stock (eg. convertibles.)

Distribution of shareholders by country 30-06-2013

The Castellum share price as at 30 June, 2013 was SEK 91.00 (83.50) equivalent to a market capitalization of SEK 14.9 billion (13.7), calculated on the number of outstanding shares.

During the period, a total of 57 million (80) shares were traded, equivalent to an average of 470,000 shares (651,000) per day, corresponding on an annual basis to a turnover rate of 72% (100%). The share turnover is based on statistics from NASDAQ OMX, Chi-X, Burgundy, Turquoise and BATS Europe.

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.

The long term net asset value (EPRA NAV) can be calculated to SEK 101 per share (97). The share price at the end of the period was thus 90% (86%) of the long term net asset value.

Net asset value 30-06-2013		SEKm SEK/share
Equity according to the balance sheet	12,322	75
Reversed
Derivatives according to balance sheet	721	4
Deferred tax according to balance sheet	3,542	22
Long term net asset value (EPRA NAV)	16,585	101
Deduction
Derivatives as above	– 721	– 4
Estimated real liability, deferred tax 4.8%*	– 818	– 5
Actual net asset value (EPRA NNNAV)	15,046	92

* Estimated real deferred tax liability net has been calculated to 4.8% based on a discount rate of 3%. Further, assessments have been made that tax loss carry forwards are realized in 5 years with a nominal tax of 22%, giving a present value of deferred tax liability of 20.2%, and that the properties are realized in 50 years where 33% are sold directly with a nominal tax of 22% and that 67% are sold indirect through company disposals where the buyers tax discount is 6%, which gives a present value of deferred tax liability of 5.8%.

Growth, yield and financial risk

During the last 12-month period the total yield of the Castellum share has been 14% (–8%), including dividend of SEK 3.95 (3.70).

	1 year	3 years	10 years
		average/	average/
		year	year
Growth
Rental income SEK/share	6%	5%	6%
Income from prop. management SEK/share	5%	5%	7%
Net income for the year after tax SEK/share	236%	26%	12%
Dividend SEK/share	7%	3%	6%
Long term net asset value SEK/share	4%	6%	6%
Actual net asset value SEK/share	6%	8%	6%
Real estate portfolio SEK/share	8%	7%	8%
Change in property value	0.1%	1.2%	1.2%
Yield
Return on long term net asset value	8.3%	11.5%	11.0%
Return on actual net asset value	10.3%	12.3%	10.9%
Return on total capital	5.5%	7.0%	7.1%
Total yield of the share (incl. dividend)
Castellum	14%	13%	14%
NASDAQ OMX Stockholm (SIX Return)	19%	9%	12%
Real Estate Index Sweden (EPRA)	21%	14%	17%
Real Estate Index Europe (EPRA)	15%	12%	7%
Financial risk
Interest coverage ratio	285%	285%	292%
Loan to value ratio	54%	51%	48%
Unutilized long term credit	1,331	1,726	1,552

Valuation

Dividend Yield

The latest carried out dividend of SEK 3.95 (3.70) corresponds to a yield of 4.3% (4.4%) based on the share price at the end of the period.

The share's dividend yield

Earnings

Post-tax inome from property management relating to income from property management (EPRA EPS) amounted to SEK 7.54 (7.24) on rolling annual basis. This results in a share price yield of 8.3% (8.7%).

Net income after tax amounted on rolling annual basis to SEK 10.95 per share (3.26), which from the share price gives a yield of 12.0% (3.9%).

Share price/net asset value

The Castellum share's price trend and turnover since IPO may 23, 1997 until June 30, 2013

Calendar

Interim Report January-September 2013 16 October, 2013, around 2 pm Year-end Report 2013 22 January, 2014 Annual General Meeting 2014 20 March, 2014 Interim Report January-March 2014 22 April, 2014 Half-year Report January-June 2014 16 July, 2014 Interim Report January-September 2014 15 October, 2014 Year-end Report 2014 21 January, 2015

www.castellum.se

On Castellum's website it is possible to download as well as subscribe to Castellum's Press releases and Interim Reports.

For further information please contact CEO Henrik Saxborn, tel +46 31 60 74 50, or Finance Director Ulrika Danielsson, tel +46 706 47 12 61 or visit Castellum's website.

Subsidiaries

Aspholmen Fastigheter AB

Rörvägen 1, Box 1824 701 18 Örebro Telephone +46 19-27 65 00 Telefax +46 19-27 65 19 orebro@aspholmenfastigheter.se www.aspholmenfastigheter.se

Fastighets AB Corallen

Jönköpingsvägen 41 A, Box 148, 331 21 Värnamo Telephone +46 370-69 49 00 Telefax +46 370-475 90 info@corallen.se www.corallen.se

Fastighets AB Briggen

Riggaregatan 57, Box 3158, 211 13 Malmö Telephone +46 40-38 37 20 Telefax +46 40-38 37 37 fastighets.ab@briggen.se www.briggen.se

Eklandia Fastighets AB

Theres Svenssons gata 9, Box 8725, 402 75 Göteborg Telephone +46 31-744 09 00 Telefax +46 31-744 09 50 info@eklandia.se www.eklandia.se

Fastighets AB Brostaden

Tjurhornsgränd 6, Box 5013, 121 05 Johanneshov Telephone +46 8-602 33 00 Telefax +46 8-602 33 30 info@brostaden.se www.brostaden.se

Harry Sjögren AB

Kråketorpsgatan 20, 431 53 Mölndal Telephone +46 31-706 65 00 Telefax +46 31-706 65 29 info@harrysjogren.se www.harrysjogren.se

In the event of confl ict in interpretation or differences between this report and the Swedish version, the latter will have priority.

Castellum AB (publ) • Box 2269, SE-403 14 Gothenburg, Sweden • Visiting address Kaserntorget 5 Telephone +46 31-60 74 00 • Fax +46 31-13 17 55 • E-mail info@castellum.se • www.castellum.se Org nr 556475-5550

CASTELLUM HALF-YEAR REPORT JANUARY-JUNE 2013