Corem Property Group — Interim / Quarterly Report 2022

Oct 25, 2022

Interim Report January–September 2022

Properties for the future.

COREM – INTERIM REPORT JANUARY–SEPTEMBER 2022

Corem Property Group (publ)

Corem is one of the Nordic region's leading commercial real estate companies with a focus on metropolitan areas and growth regions.

Corem owns 473 investment properties with 3,258 thousand sq.m. of lettable area and a value of SEK 81,483 million.

Corem has a broad customer offering with a focus on long-term sustainable ownership, management, refinement and urban development. The portfolio is geographically well concentrated with in-house locally based property management.

Stockholm

Nyköping

Uppsala

Norrköping

Västerås

Linköping

Kalmar

PROFIT FROM PROPERTY MANAGEMENT, SEKm

LOAN TO VALUE, %

NET ASSET VALUE (NAV) PER ORDINARY SHARE A/B, SEK

Retail 6 Other 11 PROPERTY VALUE BY CITY, SEKm

Property value SEK 1–2 bn Property value SEK 0–1 bn

January–September 2022

Corem Kelly AB, renamed from Klövern AB in 2022, is consolidated in Corem from 15 June 2021.

• Income increased to SEK 3,306 million (1,708).
• Net operating income increased to SEK 2,233 million (1,227).
• Net financial items amounted to SEK –747 million (–330), of which dividends from shareholdings accounted for SEK 51 million (106).
• Profit from property management increased to SEK 1,346 million (811).
• Changes in value of properties amounted to SEK 176 million (1,514).
• Changes in value of financial assets valued at fair value amounted to SEK –1,091 million (605).
• Changes in value of derivatives amounted to SEK 1,458 million (177).
• Net profit amounted to SEK 1,605 million (2,525), corresponding to SEK 1.11 (3.70) per ordinary share of Class A and B.
• Net letting amounted to SEK –30 million during January–September and SEK 68 million during the past four quarters.
• The value of investment properties amounted to SEK 81,483 million on 30 September.
• Net asset value (NAV) per ordinary share of Class A and B amounted to SEK 29.93 on 30 September.

IMPORTANT EVENTS DURING THE THIRD QUARTER

• In August, a 12-year lease contract was signed with 101 Studios for approximately 770 sq.m. of office space at the project property 1245 Broadway in New York. Moving-in is planned for the spring of 2023. At the end of September, an additional lease contract was signed at 1245 Broadway, a 5-year lease with GumGum for approximately 555 sq.m. of office space with moving-in planned for the summer of 2023.
• On 1 September, transfer of possession took place of six divested properties in Växjö and Jönköping for a total underlying property value of SEK 615 million. During the third quarter, it was also announced that contracts had been signed for divesting seven properties in Borås, Lerum and Gothenburg for a total underlying property value of SEK 200 million, with transfer of possession on 3 October. Taken as a whole, both these transactions were in line with book value.
• The redemption process of the remaining shares in Corem Kelly (previously Klövern) has been completed. The arbitration award notified on 7 June has attained legal force and a total redemption amount of SEK 456 million was paid on 6 September.
• On 22 September, Corem announced a tender offer for bonds which was withdrawn on 27 September due to prevailing market conditions at the same time as it was decided not to proceed with a proposed issue of new bonds.

See page 23 and corem.se for definitions of key figures

81,483 Investment properties. fair value, SEKm Rental value, SEKm 1,346 Profit from property management, SEKm

29.93 NAV per ordinary share of Class A/B, SEK

4,934

Stable business despite concerns in the world

The third quarter was characterized by the macroeconomic development with accelerating inflation, rising interest rates and a volatile market for bonds and commercial paper. At the same time, our core business property management is stable.

Stable property management operations

Demand for office premises continues to be good on most markets, despite the concerns in the world and on the financial market. At the same time, activity on the rental market for city logistics continues to be high. Net letting amounted to SEK –42 million during the third quarter. The negative figure is wholly attributable to a termination of a contract amounting to SEK –43 million in Kista in northern Stockholm. During the past 12-month period, net letting amounted to SEK 68 million, showing a good recovery after the pandemic. Among the lease contracts signed during the quarter may be mentioned two contracts in New York with an aggregate annual contract value of SEK 18 million.

During the period January–September, net operating income increased by 82 per cent to SEK 2,233 million at the same time as profit from property management improved by 66 per cent to SEK 1,346 million.

Higher energy prices but inflation-indexed income

Due to the fast-changing geopolitical situation, we now have an extra focus on the macroeconomic effects that arise. Accelerating inflation and shortage of energy leading to high prices are creating uncertainty. Corem continuously hedges a large share of its electricity consumption, although, despite this, rising energy costs in the Swedish property portfolio accounted for around SEK 25 million of the increase in property costs during the third quarter. However, the net effect for Corem is lower given that a big part of Corem's energy costs are passed on to the tenants. In general, we have a big focus on cost efficiency in all parts of the company and as a result of increasing energy costs, we see an increased interest on the part of tenants that we should do energy-saving investments, including installation of solar cells.

At the same time, rising inflation has a positive effect on Corem's rental income, as 84 per cent of our Swedish leases, measured in contract value, are indexed in relation to the consumer price index (CPI). In 2022, this will entail a positive effect on rental income of approximately SEK 90 million, and if inflation in October 2022 amounts to 10 per cent, the positive effect in 2023 will be around SEK 340 million. We are aware that higher rent, combined with rising energy costs, is a challenge for some tenants but our assessment is that overall there will not be any major problems to implement this contract-based rent increase in 2023. In our dialogue with tenants, we regard it is as important to make clear that the inflation-indexed rent increase in 2023 is taking place at the same time as real estate companies' costs are increasing, not least as regards electricity costs and interest expense.

A challenging financial and macroeconomic market situation Due to the sharp rise in inflation, leading to higher interest rates, the whole real estate sector is confronted by a period of increasingly high financial expenses. The financial market has become more and more volatile, which Corem, inter alia, could note at the end of September when we decided, due to prevailing market conditions, not to carry out a proposed issue of green senior unsecured bonds. For the same reason, a tender offer for outstanding bonds was withdrawn. Corem has no bond maturities during the rest of 2022. During the first and second quarter of 2023, maturities amount to SEK 484 million and SEK 700 million respectively.

We work continuously to secure stable long-term financing and limit the interest rate risk through both interest rate swaps and interest rate caps. At the end of the quarter, 70 per cent of Corem's interest-bearing liabilities were interest rate hedged or at a fixed rate.

Corem has a high share of bank financing. On 30 September, bank credits amounted to 75 per cent of the interest-bearing liabiilties. This provides stability in periods of volatility in the capital market. During the third quarter, Corem has refinanced a number of bank loans on substantially unchanged margins over Stibor. To balance the volatile state of the market, in particular for bonds and commercial paper, we continuously evaluate the possibility of further increasing the proportion of bank financing as well as divesting

properties of lower strategic value. We currently have a number of discussions underway regarding divestments of both individual properties and portfolios of properties.

Further streamlining

As a step in the ongoing streamlining of the property portfolio, on 1 September, transfer of possession took place of six divested properties in Växjö and Jönköping for SEK 615 million. And during the third quarter, it was announced that an agreement had been signed to divest seven properties in Borås, Lerum and Gothenburg for SEK 200 million, with transfer of possession on 3 October. Taken as a whole, both these transactions took place in line with book value. We are planning to continue streamlining the portfolio and expect to be net-sellers of properties in 2023 as well.

Value-creating, cash flow-focused project development

In project development, our ambition through every single project is to improve the company's cash flow which indirectly contributes to the value development of the property portfolio. Decisions on new investments are now taken in a context with higher construction costs and where the cost of capital for implementation has increased so that activity in project operations is reduced to the absolutely most profitable projects.

Our two largest ongoing new construction projects are two high-quality office buildings with high environmental classification in attractive locations in Manhattan, which have now been externally completed while interior tenant customizations will continue throughout 2022 and 2023. During the quarter, two additional lease contracts have been signed in the project 1245 Broadway. The media entertainment company 101 Studios will rent approximately 770 sq.m and the digital marketing company GumGum will rent around 555 sq.m. Moving-in is planned to take place in the spring and summer of 2023 respectively. The total annual contract value for all lease

contracts signed so far in the USA amounts to around SEK 105 million. The average rent amounts to over SEK 12,000 per square metre. We are continuing to see a recovery after the pandemic for new office buildings in the premium segment in New York and look forward to signing more lease contracts during 2022 and 2023.

To sum up, I am pleased about the good profit from property management despite challenging macroeconomic times and a volatile financial market. Together, we are continuing at Corem to develop and optimize our operations and the property portfolio with an unchanged focus on local property management close to the customer.

Eva Landén, CEO Stockholm 25 October 2022

ACQUISITION OF KLÖVERN (RENAMED TO COREM KELLY DURING Q2 2022)

By combining Corem Property Group's portfolio of properties for city logistics and the broad property portfolio, with a focus on offices, of Klövern (renamed to Corem Kelly after a decision at the 2022 AGM), one of the Nordics' leading commercial real estate companies has been created.

Together, the companies have a broader customer offering with a continued focus on long-term sustainable ownership, management, refinement and urban development.

• Balanced property portfolio with property types which complement one another.
• Geographically concentrated portfolio in attractive locations in metropolitan areas and growth regions.
• Solid base in property management and in-house project development adding growth and return potential.
• Continuous refinement to adapt to changing customer and market needs and add value.
• Property management with own local staff gives closeness to the customer and extensive market knowledge.
• Increased financial stability and strength and reduced financing expenses.

TIME LINE FOR THE TAKEOVER OFFER

• On 29 March 2021, Corem submitted a public takeover offer to the shareholders of Klövern.
• An initial acceptance period ran from 14 May to 11 June 2021 after which Corem controlled 89.1 per cent of the outstanding share capital and 90.8 per cent of the outstanding votes.
• When the outcome of the initial acceptance period was announced, the offer was declared unconditional and the acceptance period extended to 23 June 2021.
• At the end of the extended acceptance period, Corem controlled 95.0 per cent of the outstanding share capital and 94.5 per cent of the outstanding votes. The acceptance period for the offer was extended to 18 August 2021.
• In July 2021, compulsory redemption was initiated in order to acquire the remaining shares.
• In July 2021, Klövern's shares were delisted from Nasdaq Stockholm and Corem's shares were moved from Nasdaq Mid Cap to Nasdaq Large Cap.
• After the extended acceptance period, which ended on 18 August 2021, Corem owned 98.5 per cent of the outstanding share capital and controlled 97.7 per cent of the outstanding votes. The acceptance period was not extended.
• In May 2022, Klövern AB was renamed Corem Kelly AB.
• An arbitration award was announced in June 2022 in the redemption process. In August, the award attained legal force. The transfer of the minority shareholders' shares to Corem and payment to the minority shareholders of a total redemption amount of SEK 456 million took place in September.

Klövern Corem 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 2015 2016 2017 2018 2019 2020 2021 22Q3

INVESTMENT PROPERTIES, FAIR VALUE, SEKm

Income, expenses and profit

Income statement items are compared with the corresponding time period last year. Balance sheet items refer to the position at the end of the period and are compared with the preceding year-end. The quarter refers to July-September and the period refers to January– September.

From the first quarter of 2022, Corem's operations in residential development are not reported on a separate line in the income statement as the operations are of a limited size. The line Earnings, residential development included income, costs and net financial items.

From the second quarter of 2022, rental income and property costs are reported for two active lease contracts in the project 1245 Broadway in New York.

INCOME

Income increased to SEK 1,114 million (1,072) during the third quarter and SEK 3,306 million (1,708) for the period January–September. The increase during the period is mainly attributable to the acquisition of Klövern, in 2022 renamed to Corem Kelly, which is consolidated in Corem from 15 June 2021. Income for a comparable portfolio increased by 6 per cent during the period.

EXPENSES

Property costs amounted to SEK 363 million (304) during the quarter and SEK 1,073 million (481) during the period. Property costs for a comparable portfolio increased by 4 per cent during the period.

Central administration costs amounted to SEK 46 million (35) during the quarter and SEK 140 million (65) during the period.

EARNINGS

Net operating income amounted to SEK 751 million (768) during the quarter and SEK 2,233 million (1,227) during the period. The operating margin amounted to 67 per cent (72) during the quarter and 68 per cent (72) during the period. In a comparable portfolio, net operating income increased by 6 per cent during the period.

Profit from property management amounted to SEK 446 million (505) during the quarter and SEK 1,346 million (811) during the period.

NET FINANCIAL ITEMS

Net financial items amounted to SEK –259 million (–228) during the quarter and SEK –747 million (–330) during the period. Financial income amounted to SEK 32 million (37) during the quarter, of which SEK 16 million (31) was dividends from shareholdings. During the quarter, financial expenses amounted to SEK 291 million (265) of which SEK 15 million (15) was site leasehold expenses (interest expense for leasing liability).

During the corresponding quarter and period in 2021, net financial items for residential development, which is included in the income statement line Net profit, residential development amounted additionally to SEK –8 million and SEK –9 million respectively.

At the end of the period, the average interest rate was 3.2 per cent (2.4).

See page 13 for further information.

SHARE OF EARNINGS IN ASSOCIATED COMPANIES

Share of earnings in associated companies amounted to SEK –109 million (3) during the third quarter.

CHANGES IN VALUE

Properties

The changes in value of Corem's investment properties amounted during the period to SEK 176 million (1,514), of which realized changes in value amounted to SEK –360 million.

On 28 April 2022, Corem, together with ALM Equity, established the unlisted company Klövern. A review of the acquisition values in the light of the development in the financial markets and rising inflation had an effect on Corem in the form of an adjustment of realized changes in value, linked to the divestment, of SEK 361 million which was reported as realized negative changes in value in the interim reporting period to 30 June 2022.

Financial investments

Changes in value of financial assets valued at fair value totalled SEK –1,091 million (605) during the period. See page 14 for further information.

Derivatives

Changes in value of derivatives amounted to SEK 1,458 million (177) during the period. The value of derivatives is affected by changes in market interest rates.

GOODWILL

During the period, impairment of goodwill amounted to SEK –388 million (—). The impairment refers mainly to part of goodwill attributable to synergies which were identified in connection with the acquisition of Klövern, during 2022 renamed to Corem Kelly, which were considered to be realized through the establishment of the housing company.

TAXES

During the period, deferred tax amounted to SEK 278 million (–544) and current tax to SEK –35 million (–4).

OTHER COMPREHENSIVE INCOME

Other comprehensive income amounted to SEK 1,217 million (156) during the period. The item mainly refers to translation differences.

INCOME, SEKm

PROFIT FROM PROPERTY MANAGMENT, SEKm

The property portfolio

PROPERTY VALUE

On 30 September 2022, Corem's property portfolio consisted of 473 investment properties with a total lettable area of 3,258 thousand sq.m. and a market value of SEK 81,483 million, as well as 1 property classified as current assets.

CHANGES IN VALUE

The changes in value of Corem's investment properties amounted during the period to SEK 176 million (1,514), of which unrealized changes in value amounted to SEK 536 million and realized changes in value amounted to SEK –360 million. During the third quarter more cautious assumptions regarding some vacancies and marginally higher yield requirements have had a negative contribution to changes in value while higher inflation assumptions have mitigated the quarter's negative value changes. Project development, including development of building rights, contributed with increases in value of properties of SEK 139 million during the quarter. On average, Corem's properties at 30 September 2022, have been valued at a yield requirement of 5.0 per cent (5.1).

Corem values all properties every quarter, of which 20 to 30 per cent are normally valued externally. Every property in the portfolio is valued externally once a year. During the quarter, Cushman & Wakefield and Savills have been used as valuation agencies. Corem obtains continuous market information from external valuation agencies as support for the internal valuation. See Corem's annual report for 2021 for a sensitivity analysis and a detailed description of the valuation principles.

PROPERTY TRANSACTIONS

Transactions with newly established Klövern AB

On 28 April 2022, Corem transferred possession of 25 properties to the company that Corem has established with ALM Equity. The aim of the company is to develop rental apartments for in-house management. At a later stage when local plans for housing have been obtained, Corem will also transfer possession of residential building rights in Stockholm and Uppsala, among other places, to that company (Klövern). As at 30 September 2022, Corem's ownership of Klövern amounted to 49.4 per cent. The holding is reported as holdings in associated companies.

Other transactions

On 1 September 2022, three properties in Växjö and three properties in Jönköping were sold and handed over for a total underlying property value of SEK 615 million.

In September, it was announced that a contract had been signed to divest seven properties in Borås, Lerum and Gothenburg for a total underlying property value of SEK 200 million. Transfer of possession of the properties was on 3 October.

TENANTS AND THE LEASE PORTFOLIO

On 30 September 2022, Corem had approximately 4,100 tenants with approximately 7,100 lease contracts. At the same point in time, the annual contract value amounted to SEK 4,384 million (4,402), the rental value amounted to SEK 4,934 million (4,957) and the economic occupancy rate was 89 per cent (89). 39 per cent of the contracted rent falls due in 2026 or later. In all, the average remaining contract period was 3.9 years (3.7).

Net letting

Net letting amounted to SEK –42 million (7) during the third quarter, SEK –30 million (31) during the period and SEK 68 million (33) during the past four quarters. The negative figure during the third quarter is wholly attributable to a termination of a contract amounting to SEK –43 million in Kista in northern Stockholm.

In all, lettings and negotiations amounted to SEK 107 million during the third quarter, where 58 per cent were new tenants and the remaining letting to existing tenants.

Major lettings

During the third quarter of the year, a number of large lease contracts have been signed.

In New York, a 12-year lease has been signed with 101 Studios for approximately 770 sq.m. Moving in is planned to be in Q2 2023.

In New York, a 5-year lease has been signed with GumGum for approximately 555 sq.m. Moving in is planned to be in Q2 2023.

In Eskilstuna, an 8-year lease has been signed with Academedia for approximately 1,620 sq.m. Moving in is planned to be in Q3 2023.

INVESTMENT PROPERTIES: NUMBER, LETTABLE AREA, FAIR VALUE

	Jan-Sep 2022			2021
	No.	sq.m.	SEKm	SEKm
Total at the start of the year	518	3,478,659	83,084	14,002
Business combination, Klövern (renamed to Corem Kelly)	—	—	—	61,557
Acquisitions	1	1,925	80	292
Investments in construction, extensions and refurbishment	—	26,679	1,959	1,771
Divestments	–20	–126,542	–1,734	–296
Divestments to the associated company Klövern AB	–25	–122,731	–4,374	—
Reclassification of Properties classified as current assets	—	—	—	1,930
Property regulation	–1	—	—	—
Changes in value, unrealised	—	—	536	3,421
Currency conversion	—	—	1,932	407
Total at the end of the period	473	3,257,990	81,483	83,084

PROPERTY TRANSACTIONS, TRANSFER OF POSSESSION JANUARY–SEPTEMBER 2022

Lettable area, sq.m.

Quarter	Property	City	Municipality	Property category	Acquisition	Divestment
Q1	Part of Fyrislund 6:6	Uppsala	Uppsala	Land	—	0
Q1	Termiten 1	Borås	Borås	Retail	—	14,676
Q1	Järnet 5	Norrköping	Norrköping	Retail	—	14,975
Q1	Köpmannen 5	Västerås	Västerås	Retail	—	16,742
Q1	Bromsen 3 & 4 and Spindlarna 13 & 14	Borås	Borås	Retail	—	22,732
Q1	Nickeln 2	Hallstahammar	Hallstahammar	Industry	—	1,761
Q1	Brandnävan 1 & 2, Svedjenävan 4	Malmö	Malmö	Office, industry, land	—	3,094
Q2	Grävstekeln 2	Malmö	Malmö	Office	1,925	—
Q2	Löplinan 7	Malmö	Malmö	Office, warehouse	—	2,489
Q2	Mörtö 6	Stockholm	Stockholm	Office, warehouse	—	2,596
Q2	Inge 10	Västerås	Västerås	Residential, retail, hotel	—	5,855
Q2	Isafjord 1	Kista	Stockholm	Education/health care/other	—	0
Q2	Skaftå 1	Kista	Stockholm	Education/health care/other	—	0
Q2	Startboxen 3	Stockholm	Solna	Office	—	19,033
Q2	Regattan 46	Västerås	Västerås	Warehouse/logistics	—	10,865
Q2	Kryssen 3, 4	Västerås	Västerås	Warehouse/logistics	—	18,510
Q2	Verkstaden 11	Västerås	Västerås	Warehouse/logistics	—	20,659
Q2	Spelhagen 1:7	Nyköping	Nyköping	Warehouse/logistics	—	6,003
Q2	Antennen 5–6	Linköping	Linköping	Warehouse/logistics	—	2,076
Q2	Antennen 9	Linköping	Linköping	Warehouse/logistics	—	5,260
Q2	Antennen 15–16, 23–24	Linköping	Linköping	Office	—	11,501
Q2	Oboisten 2	Linköping	Linköping	Warehouse/logistics	—	9,634
Q2	Ackordet 10	Linköping	Linköping	Retail	—	4,372
Q2	Sicklaön 13:138	Stockholm	Nacka	Education/health care/other	—	0
Q2	Sicklaön 369:33	Stockholm	Nacka	Office	—	6,655
Q2	Sicklaön 369:39	Stockholm	Nacka	Education/health care/other	—	0
Q2	Orminge 1:59	Stockholm	Nacka	Education/health care/other	—	1,026
Q2	Marievik 22	Stockholm	Stockholm	Office	—	4,447
Q2	Marievik 29	Stockholm	Stockholm	Education/health care/other	—	0
Q2	Bävern 2	Stockholm	Tyresö	Education/health care/other	—	0
Q2	Slaktaren 12	Stockholm	Sundbyberg	Education/health care/other	—	2,690
Q3	Fläkten 11	Växjö	Växjö	Office	—	8,200
Q3	Fläkten 14	Växjö	Växjö	Warehouse/logistics	—	5,300
Q3	Fabriken 1	Växjö	Växjö	Education	—	7,521
Q3	Ulvö 8	Jönköping	Jönköping	Warehouse/logistics	—	5,985
Q3	Hedenstorp 1:99	Jönköping	Jönköping	Warehouse/logistics	—	4,033
Q3	Hedenstorp 2:41	Jönköping	Jönköping	Warehouse/logistics	—	10,583
TOTAL SQ.M.					1,925	249,273

NET LETTING, SEKm

CONTRACT STRUCTURE, SEKm

Part of Corem's property portfolio in Söderstaden, Stockholm.

PROJECT DEVELOPMENT

Project activity makes it possible to meet tenants' changed requirements and create added value in the property portfolio. Investments often take place in connection with new lettings and in order to customize and modernize premises and thus increase the rental value.

During the period January–September, SEK 1,959 million (848) has been invested in the property portfolio for new construction, extension and refurbishments. On 30 September 2022, the remaining investment volume of projects in process amounted to SEK 2,389 million. At the same point in time, in total 12 projects with an estimated investment each exceeding SEK 50 million were in process. The total area-based letting rate of these projects which encompass 85,820 sq.m. with a remaining investment of SEK 1,427 million, amounts to 57 per cent.

Project development, including development of building rights, contributed to increases in value of properties of SEK 139 million during the third quarter or SEK 1,156 million during the past four quarters.

Commercial projects in Sweden

Corem has a large portfolio of commercial projects in process. Several of them are within the framework of Corem's urban development projects, among others in Uppsala and Västerås and in Kista and Söderstaden in Stockholm.

In Västerås, projects are in process in two of the central retail properties. At the retail property Punkt, the facade is being opened up towards the railway station and the interior is being upgraded with new escalators and through environmental investments. Tenant customizations are in process, for among others, Coop and Systembolaget, which in 2022 have signed long lease contracts with moving in during 2023. In the adjacent Gallerian, Region Västmanland's largest health centre is moving in during 2023 on a 15-year lease contract.

In central Stockholm, refurbishment and modernization of the property Orgelpipan 4 on Klarabergsgatan is in process. Extensive work to replace the white marble facade has been completed and the property is beginning to regain its former glory.

Commercial projects in New York

Corem owns five project properties in Manhattan in New York. Two projects, new production of two high quality office buildings, are nearing completion. The projects are called 1245 Broadway and 28&7 and both have now reached exterior completion while letting work and interior tenant customization is in process.

During the second quarter, the first tenant, Avalanche Studios Group moved into a floor at 1245 Broadway and the tenant A24 Films took possession of its five floors at the same property where tenant customization is in process. One additional tenant will move in during the fourth quarter.

In August, Corem signed a 12-year lease contract with 101 Studios for approximately 770 sq.m. of office space at 1245 Broadway. Moving-in is planned for the spring of 2023. At the end of September, a further lease contract was signed at 1245 Broadway, a 5-year agreement with GumGum for around 555 sq.m. office space with moving-in planned for summer 2023. As of 30 September, in total six leasing contracts had been signed corresponding to 48 per cent of the area of 1245 Broadway and 7 per cent of the area of 28&7. The total contract value of the leases signed in New York amounts to USD 9.4 million, corresponding to approximately SEK 105 million, or just over SEK 12,000/sq.m.

The project portfolio also includes two planned projects in New York for new construction of offices at 417 Park Avenue and 118 10th Avenue encompassing 33,000 sq.m. and 13,200 sq.m. respectively. Preliminary project work is in process on these properties.

Residential development projects

Even after the establishment of Klövern (see page 7 under Property transactions), an associated company focused on rental housing, Corem may be engaged in some residential development projects of its own. However, this will be to a very limited extent and mainly associated with urban development projects, for example, in Västerås and Söderstaden, where housing is an important part of urban development.

Currently, Corem has one ongoing residential project, K1 Nacka Strand, which comprises of 60 apartments. The project is divided into sale phases and 49 of the 54 apartments that have been offered to the market have been sold. Sales of the remaining 6 apartments have not started yet. Moving-in is planned to be during the fourth quarter of 2023.

COREM'S LARGEST CONSTRUCTION-STARTED COMMERCIAL PROJECTS IN PROCESS

City	Property	Description	Let area, sq.m.	Project area, sq.m.	Estimated investment, SEKm	Remaining investment, SEKm	Rental value, SEKm	Completion, year/quarter
New York1	1245 Broadway	New construction, office premises	7,968	16,700	1,785	5502	218	23Q4
New York1	28&7	New construction, office premises	600	9,100	950	174	107	23Q4
	Stockholm Orgelpipan 4	Refurbishment, office premises	0	4,240	260	80	29	23Q2
Uppsala	Fyrislund 6:6	New construction, offices and laboratory	0	3,097	158	66	11	23Q2
Västerås	Loke 24	Refurbishment of building, tenant customization for health center	4,419	6,799	156	75	11	23Q3
	Stockholm Nattskiftet 12&14	New construction, garage and refurbishment, office premises	7,425	8,168	151	83	6	23Q4
	Stockholm Sicklaön 356:1	Refurbishment for Bilia	10,942	10,942	147	115	11	24Q1
Örebro	Olaus Petri 3:234	Refurbishment and extension and office premises for Trafikverket. Phase 2	2,625	10,200	141	99	6	23Q4
Västerås	Mats 5	Refurbishment of building	3,529	3,985	137	106	8	23Q3
Norrköping Stålet 3		New construction for Bravida	3,295	3,295	84	9	5	23Q1
Västerås	Gustavsvik	Refurbishment, office/gym premises. Updating of technology	5,358	5,358	70	41	7	23Q2
Borås	Skruven 3	New construction for Dagab and logistics premises	2,531	3,936	68	29	5	23Q1
TOTAL			48,692	85,820	4,107	1,427	424

1) Estimated and remaining investment of projects in New York are based on the SEK/USD-rate on 30 Sep 2022.

2) Remaining investment has been adjusted regarding a cost amounting to USD 16 million which has previously been included in the project's accrued investment.

COREM'S RESIDENTIAL PROJECTS IN PROCESS

City	Location	Project name	No. of housing units	Housing units sold	Share of sold, %	Gross area, sq.m.	Area, sq.m.	Sales start, year	Expected to be completed, year
Stockholm	Nacka	K1 Nacka Strand	60	49	82	5,000	3,700	2021	2023
TOTAL			60	49	82	5,000	3,700

Fyrislund 6:6, Uppsala

Ongoing project, under the name Research Hub, in Uppsala Business Park. Estimated to be completed during the second quarter of 2023.

Sicklaön 356:1, Stockholm

Ongoing project. Estimated to be completed during the first quarter of 2024.

Loke 24, Västerås

Ongoing project. Estimated to be completed during the third quarter of 2023.

Skruven 3, Borås Pro Stop, phase 3B. Ongoing project for approximately 4,000 sq.m. of warehouse and retail space. Estimated to be completed during the first quarter of 2023.

28&7, New York

Ongoing project. Estimated to be completed by the end of 2023.

Örebro Entré, Örebro

Ongoing project. The first phase was completed during the first quarter of 2022 and the second phase is estimated to be completed during the fourth quarter of 2023.

Orgelpipan 4, Stockholm Ongoing project under the name Klarabergsgatan. Estimated to be completed during the second quarter of 2023.

DISTRIBUTION PER GEOGRAPHICAL AREA

Corem's property portfolio and operating activities are divided into geographical and business-focused regions. The operations in Sweden are divided into Region Stockholm, Region Stockholm Logistics, Region West and Region East. Region Stockholm consists of the business units Stockholm North, Stockholm South, Västerås and Uppsala. Region Stockholm Logistics consists of the business units Stockholm South Logistics, Stockholm Centre Logistics, Stockholm North Logistics. Region West consists of business units Gothenburg, Malmö, Halmstad, Gothenburg Logistics and Malmö Logistics. Region East consists of the business units Nyköping, Norrköping, Linköping, Kalmar and Jönköping. The international operations are divided into Copenhagen and New York.

INCOME STATEMENT ITEMS AND INVESTMENTS PER GEOGRAPHIC AREA

	Income, SEKm		Property costs, SEKm		Net operating income, SEKm		Operating margin, %		Investments, SEKm
	2022 Jan–Sep	2021 Jan–Sep	2022 Jan–Sep	2021 Jan–Sep	2022 Jan–Sep	2021 Jan–Sep	2022 Jan–Sep	2021 Jan–Sep	2022 Jan–Sep	2021 Jan–Sep
Region Stockholm	1,320	497	–505	–186	815	311	62	63	625	171
Region Stockholm Logistics	456	421	–134	–120	322	301	71	71	211	151
Region East	644	315	–203	–71	441	244	69	77	342	116
Region West	638	388	–208	–98	430	290	67	75	281	168
International – Copenhagen	215	87	–11	–5	204	82	95	94	15	81
International – New York	33	—	–12	–1	21	–1	64	—	485	161
Total	3,306	1,708	–1,073	–481	2,233	1,227	68	72	1,959	848
Investment portfolio	3,142	1,476	–964	–437	2,178	1,039	69	70	1,102	614
Development portfolio	164	232	–109	–44	55	188	34	81	857	234
Total	3,306	1,708	–1,073	–481	2,233	1,227	68	72	1,959	848

KEY FIGURES PER GEOGRAPHIC AREA

	No. of properties		Fair value, SEKm		Rental value, SEKm		Economic occupancy rate, %		Lettable area, 000 sq.m.
	2022 30 Sep	2021 30 Sep	2022 30 Sep	2021 30 Sep	2022 30 Sep	2021 30 Sep	2022 30 Sep	2021 30 Sep	2022 30 Sep	2021 30 Sep
Region Stockholm	111	119	31,335	31,504	2,049	2,073	86	84	1,021	1,112
Region Stockholm Logistics	91	95	9,210	8,765	637	611	95	94	472	476
Region East	123	140	11,858	12,130	931	958	89	89	788	863
Region West	133	142	13,058	12,964	963	999	89	88	812	865
International – Copenhagen	10	10	8,145	7,193	292	280	95	96	159	160
International – New York1	5	6	7,877	5,734	62	—	100	—	6	—
Total	473	512	81,483	78,290	4,934	4,921	89	88	3,258	3,476
Investment portfolio	433	447	68,876	67,125	4,617	4,572	90	89	3,063	3,204
Development portfolio	40	65	12,607	11,165	317	349	74	74	195	271
Total	473	512	81,483	78,290	4,934	4,921	89	88	3,258	3,476

1) Rental value, Economic occupancy rate and Lettable area refer to active leasing contracts

PROPERTY VALUE BY SQ.M. AND LETTABLE AREA

LETTABLE AREA BY TYPE, %

Financing

INTEREST-BEARING LIABILITIES

On 30 September 2022, the interest-bearing liabilities amounted to SEK 47,632 million (46,738). Accrued borrowing overheads amounted to SEK 179 million (174), meaning interest-bearing liabilities in the balance sheet of SEK 47,453 million (46,564).

Corem's interest-bearing liabilities are mainly secured by mortgage deeds and/or shares in subsidiaries. Unsecured interest-bearing liabilities consist of commercial paper and unsecured bonds, SEK 715 million (2,322) and SEK 11,418 million (11,558) respectively at the end of the quarter. Corem's commercial paper programme has a framework amount of SEK 5,000 million. Outstanding commercial paper has back-ups in the form of unutilized credit facilities in Nordic banks.

The average period of tied-up capital amounted to 3.5 years (3.8). The loan-to-value ratio amounted to 54 per cent (53).

INTEREST-BEARING NET LIABILITIES SEKm	2022 30 Sep	2021 31 Dec
Interest-bearing liabilities	47,453	46,564
Adjustment, accrued borrowing overheads	179	174
Interest-bearing assets	–125	–86
Long-term shareholdings	–1,177	–2,263
Cash and cash equivalents	–374	–571
Interest-bearing net liability	45,956	43,818

Bonds

At the end of the quarter, the Group had SEK 11,418 million in outstanding listed bond loans, maturing in 2023 to 2025. There is an unsecured Medium Term Note-programme (MTN) with a framework of SEK 10,000 million, where SEK 5,550 million has been issued.

INTEREST MATURITY STRUCTURE

On 30 September 2022, the average interest of the loan portfolio was 3.2 per cent (2.4). Refinancings of bank loans during the quarter have been completed on substantially unchanged margins over the Stibor rate.

To limit the interest rate risk, there are interest rate swaps and interest rate caps, where the effects of larger increases in interest rates are limited through interest rate caps. At the end of the quarter, Corem had interest rate swaps for a nominal value of SEK 22,890 million (8,890), of which SEK 5,000 million in forward-started swaps, and interest rate caps for SEK 14,439 million (23,539). Excluding forward-started swaps, this corresponds to 68 per cent of the interest-bearing liabilities. Together with fixed interest loans, this means that 70 per cent of the interest-bearing liabilities were hedged. The swaps have interest rate levels in the range –0.4–3.7 per cent while the caps have interest rate levels in the range 1.5–3.0 per cent. As of 30 September 2022, the net market value of the interest rate derivative portfolio was SEK 1,373 million (–86). Change in value of derivatives amounted to SEK 123 million (86) during the quarter.

The average fixed interest period amounted at the end of the quarter to 2.2 years (2.6) taking derivatives into account. The interest coverage ratio amounted to 2.6 (2.8) during the quarter.

LIQUID FUNDS

On 30 September 2022, liquid funds amounted to SEK 374 million (571). In addition there were unutilized credit facilities, including backup facilities for outstanding commercial paper, of SEK 3,684 million of which SEK 2,142 million can be used immediately with existing collateral. The remaining amount can be used for acquisition of shares and properties as well as to some extent financing ongoing projects. Interest-bearing net liabilities amounted to SEK 45,956 million (43,818).

AVERAGE INTEREST RATE, %

EQUITY RATIO AND ADJUSTED EQUITY RATIO, %

INTEREST COVERAGE RATIO

EQUITY

At the end of the quarter, the Group's equity, attributable to the parent company's shareholders, amounted to SEK 35,081 million (33,342), of which SEK 1,300 million refers to hybrid bonds. Equity amounted to SEK 25.70 (23.94) per ordinary share of Class A and B, SEK 289.59 (289.59) per ordinary share of Class D and SEK 312.72 (312.72) per preference share. The net asset value (NAV) per ordinary share of Class A and B amounted to SEK 29.93 (29.60).

Hybrid bond

Corem has, via the subsidiary, Corem Kelly, a SEK 1,300 million perpetual hybrid bond which has a floating interest rate of 3-month Stibor +6 per cent margin. If the hybrid bond is not redeemed in June 2023 a step-up occurs which increases the margin to 8 per cent.

Equity ratio

At the end of the quarter, the adjusted equity ratio was 42 per cent (43) and the equity ratio 37 per cent (36).

For further information about changes in equity, see page 20.

SHAREHOLDINGS

Since 2019, Corem owns shares in the real estate company Castellum, listed on Nasdaq Stockholm. On 30 September 2022, the holding amounted to 8,880,000 shares. The market value amounted at the same time to SEK 1,111 million, based on a price of SEK 125.15 per share. The acquisition value amounts to SEK 192.03 per share. Corem also owns 639,425 shares in Everysport Media Group, which is listed on Spotlight Stock Market. The market value amounted to SEK 6 million on 30 September 2022.

In addition, unlisted shares at a value of SEK 60 million are included in the balance sheet's line Financial assets valued at fair value.

After a long period of increase in value, during the year we have seen a general decrease in value of property shares on the stock exchange. The decline is considered to be primarily linked to interest rate increases and geopolitical concerns. See also risk section in Corem's annual report for 2021.

CASH FLOW

The Group's cash flow from operating activities, before change in working capital, amounted during the quarter to SEK 459 million (491).

Cash flow from investing activities amounted to SEK –680 million (–661) and cash flow from financing activities to SEK –20 million (–126).

Interior at the property 1245 Broadway, New York.

FIXED INTEREST AND TIED-UP CAPITAL

	Fixed interest	Tied-up capital
Maturity year	Loan volume, SEKm	Contract volume, SEKm	Utilised, SEKm	Of which outstanding bonds, SEKm	Not utilised, SEKm
Variable *	28,920	—	—	—	—
2022	100	4,371	3,225	—	1,146
2023	105	15,440	14,152	2,934	1,288
2024	5,628	11,558	11,308	5,784	250
2025	4,490	10,751	10,251	2,700	500
2026	—	1,570	1,070	—	500
Later	8,389	7,626	7,626	—	—
Total	47,632	51,316	47,632	11,418	3,684

*SEK 14,439 million of Floating volume is covered by interest-rate caps.

BOND OVERVIEW*

Type	Issued	Maturity	Outstanding volume, SEKm	Issue spread over 3-month Stibor, %
Unsecured	Feb 2020	Feb 2023	484	2.50
Unsecured	Jun 2019	Jun 2023	700	4.25
Unsecured MTN 203	Mar 2021	Sep 2023	850	2.40
Green unsecured	May 2021	Nov 2023	900	2.50
Green unsecured MTN 201	Oct 2020	Apr 2024	2,000	3.25
Green unsecured	Oct 2020	Apr 2024	1,434	3.50
Green unsecured	Jan 2022	Oct 2024	2,350	2.75
Green unsecured MTN 202	Feb 2021	Feb 2025	2,500	3.25
Unsecured MTN 204	Mar 2021	Sep 2025	200	3.50

*Bonds issued by Corem Property Group and Klövern (renamed to Corem Kelly during 2022).

The share and shareholders

Corem Property Group is listed on Nasdaq Stockholm Large Cap with four classes of shares; ordinary shares of Class A, ordinary shares of Class B, ordinary shares of Class D and preference shares.

On 30 September 2022, Corem had a total of 1,137,283,281 shares, of which 93,730,797 ordinary shares of Class A, 1,023,591,380 ordinary shares of Class B, 7,545,809 ordinary shares of Class D and 12,415,295 preference shares. An ordinary share of Class A entitles the holder to one vote, while an ordinary share of Class B, an ordinary share of Class D and a preference share entitles the holder to a tenth of a vote each.

REPURCHASE OF OWN SHARES

SHARE FACTS, 30 SEPTEMBER 2022

During the third quarter, Corem has repurchased 2,200,000 ordinary shares of Class B for SEK 28 million. As at 30 September 2022, Corem held a total of 2,913,825 repurchased ordinary shares of Class A, 35,691,000 repurchased ordinary shares of Class B and 42,000 repurchased ordinary shares of Class D. The total market value amounted on the same date to SEK 338 million. The shares were repurchased at an average price of SEK 8.80 per ordinary share of Class A, SEK 19.06 per ordinary share of Class B and SEK 297.85 per ordinary share of Class D.

1245 Broadway, New York.

DIVIDEND PER ORDINARY SHARE A/B, SEK

NET ASSET VALUE (NAV) PER ORDINARY SHARE A/B, SEK

Market capitalisation SEK 13.7 bn Market place Nasdaq Stockholm, Large Cap LEI no. 213800CHXQQD7TSS1T59 No. of shareholders 45,655 Ordinary share, Class A No. of shares 93,730,797 Closing price SEK 10.40 ISIN SE0010714279 Ordinary share Class B No. of shares 1,023,591,380 Closing price SEK 8.38 ISIN SE0010714287 Ordinary share Class D No. of shares 7,545,809 Closing price SEK 196.40 ISIN SE0015961594 Preference share No. of shares 12,415,295 Closing price SEK 214.00 ISIN SE0010714311

LARGEST SHAREHOLDERS — 30 SEPTEMBER 2022

Shareholder	No. ordinary shares A, thousands	No. ordinary shares B, thousands	No. ordinary shares D, thousands	No. preference shares, thousands	Share of capital, %	Share of votes, %1
Rutger Arnhult via companies	35,611	358,222	3,191	—	34.91	37.45
Gårdarike	39,490	109,863	57	26	13.14	26.35
Handelsbanken fonder	—	79,320	6	—	6.98	4.14
Länsförsäkringar fondförvaltning	—	56,355	21	—	4.96	2.94
State Street Bank & Trust Co	—	42,668	21	134	3.77	2.24
Swedbank Robur fonder	1,593	17,951	—	—	1.72	1.77
JP Morgan Chase Bank N.A.	—	25,441	—	233	2.26	1.34
BNY Mellon SA/NV	0	15,798	0	68	1.40	0.83
Prior & Nilsson	—	15,464	—	—	1.36	0.81
Fredrik Rapp privat och via bolag	750	7,500	—	—	0.73	0.78
CBNY Norges Bank	344	11,087	85	49	1.02	0.77
Livförsäkringsbolaget Skandia, Ömsesidigt	685	6,779	0	0	0.66	0.71
Patrik Tillman privat och via bolag	571	5,714	77	—	0.56	0.60
Försäkringsaktiebolaget, Avanza Pension	227	7,644	279	812	0.79	0.57
SEB Life International	1,100	—	—	—	0.10	0.57
Other shareholders	10,446	228,092	3,768	11,093	22.28	18.13
TOTAL OUTSTANDING SHARES	90,817	987,900	7,504	12,415	96.60	100.00
Repurchased own shares¹)	2,914	35,691	42	—	3.40
TOTAL REGISTERED SHARES	93,731	1,023,591	7,546	12,415	100.00	100.00

Due to routines at Ålandsbanken, Banque Internationale à Luxembourg and Union Bancaire Privée, the banks have been registered in Euroclear's share register as owners of part of their customers' Corem shares. Corem considers that the above table provides a correct picture of the company's 15 largest owners.

1) Repurchased own shares have no voting rights and are not entitled to dividends.

Other information

ACCOUNTING POLICIES

This interim report for the Group has been prepared in compliance with the Annual Accounts Act and IAS 34 Interim Financial Reporting and for the Parent Company in compliance with the Annual Accounts Act and RFR 2 Accounting for legal entities. In the Group, the properties are valued in compliance with Level 3 in the IFRS valuation hierarchy.

The fair value of financial instruments in the Group reported at accrued acquisition value agrees essentially with the reported value. The same applies to the Parent Company with the exception of the holding in Castellum where fair values are those reported to the Group. No changes of the categorization of financial instruments have taken place during the period. Financial assets valued at fair value are valued in accordance with Level 1 of the valuation hierarchy. Derivatives are valued in accordance with Level 2 of the valuation hierarchy. No new or changed standards or interpretations from IASB have had any impact on the interim report and the accounting policies applied are those described in Note 1 of Corem's Annual Report for 2021.

Rounding differences may arise in the report.

DEFINITIONS

In this interim report a number of financial key ratios and measures are presented which are not defined by IFRS. Corem believes these key ratios and measures provide valuable supplementary information to investors and the Company's management in analysing the Company's operations. Because not all companies calculate financial key ratios and measures in the same way these are not always comparable. On the Company's website, the definitions of selected key ratios and measures are presented, as well as an appendix showing the

calculation of such key figures that are not directly identifiable from the financial reports.

SUSTAINABILITY

Sustainability is an important part of Corem's business and is integrated in the daily operations. It encompasses social, ecological and economic sustainability and is focused on the areas Good business partner and long-term value development, Attractive employer, Reduced climate impact and Sustainable and vibrant city.

Corem's Board of Directors has established a number of new long-term sustainability goals following the consolidation of Klövern, including:

• All energy used in Corem's operations shall be fossil-free by 2030.
• Corem shall be climate-neutral throughout the value chain by 2035.
• The share of green and sustainability-related financing as well as green income shall in the long term constitute as large a share as possible.

The overall goal is to ensure an attractive property portfolio which creates long-term sustainable value without a negative impact on people or the environment.

EMPLOYEES

Locally-based property management with own staff, in order to achieve closeness to customers and in-depth market knowledge, is an integral part of Corem's strategy. Corem's head office is located in Stockholm.

On 30 September 2022, the Corem group had 368 employees. 46 per cent of the employees were women.

RISKS

Corem works according to a continuous process to identify significant risks which may affect the Company's financial position and earnings. The main risks are value changes of properties, the state of the economy and market conditions, project operations, property transactions, changed laws and regulations, financing, listed holdings, employees, business ethics and IT security.

For more information on identified risks, see Corem's Annual Report 2021.

DISPUTES

Corem has no ongoing disputes which can have a significant effect on earnings.

TRANSACTIONS WITH RELATED PARTIES

Intra-group services and transactions with related parties are charged at market prices and on commercial terms. Intra-group services consist of administrative services and charging of group interest rates.

Transactions with Wästbygg amounted to SEK 21 million during the period. Wästbygg is controlled by the main owner Rutger Arnhult. The Corem group also has a lease contract with Wästbygg with an annual contract value of SEK 2 million.

Corem has a lease contract with the M2 group which is controlled by Rutger Arnhult, with an annual contract value of SEK 1 million.

In addition, the Corem group has purchased legal services during the year from the law firm Walthon Advokater in which the Chairman of the Board Patrik Essehorn is a partner.

COREM KELLY

Corem Kelly AB, in May 2022 renamed from Klövern AB after a decision at the annual general meeting in April, has been consolidated in Corem since 15 June 2021. The redemption process of the remaining shares in Corem Kelly has now been completed. The arbitration award, which was announced on 7 June 2022, has attained legal force and a total redemption amount of SEK 456 million was paid on 6 September 2022.

DIVIDEND

During the first, second and third quarter, a dividend of SEK 5.00 per ordinary share of Class D and preference share has been paid, as well as, during the third quarter, a dividend of SEK 0.10 per ordinary share of Class A and B, totalling SEK 407 million. In addition, a total of SEK 12 million has been paid to the minority shareholders of Corem Kelly during the year.

EVENTS AFTER THE END OF THE PERIOD

In October, Corem signed a contract to divest a site leasehold in Stockholm for an underlying property value of SEK 125 million. Transfer of possession is planned to be on 30 November.

The Board and the CEO assure that the report provides a fair overview of the parent company's and the group's operations, position and results, and describes the significant risks and uncertainty factors facing the parent company and the companies included in the group.

Stockholm, 25 October 2022 Corem Property Group AB (publ)

REVIEW REPORT

Corem Property Group AB (publ) corporate ID number 556463-9440

INTRODUCTION

We have reviewed the condensed interim report for Corem Property Group AB as of 30 September 2022 and for the nine months period then ended. The Board of Directors and the CEO are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.

DIRECTION AND SCOPE OF REVIEW

We conducted our review in accordance with the International Standard on Review Engagements, ISRE 2410 Review of Interim Financial Statements Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and other generally accepted auditing standards in Sweden. The procedures performed in a review do not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, the stated conclusion based on a review does not have the certainty of a stated conclusion based on an audit.

CONCLUSION

Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, in accordance with IAS 34 and the Swedish Annual Accounts Act regarding the Group, and in accordance with the Swedish Annual Accounts Act regarding the Parent Company.

Stockholm, 25 October 2022 Ernst & Young AB

Katrine Söderberg Authorized Public Accountant

The Consolidated Income Statement in brief

SEKm	2022 3 months Jul–Sep	2021 3 months Jul–Sep	2022 9 months Jan–Sep	2021 9 months Jan–Sep	2021/2022 Rolling 12 months Oct–Sep	2021 12 months Jan–Dec
Income	1,114	1,072	3,306	1,708	4,403	2,805
Property costs	–363	–304	–1,073	–481	–1,503	–911
Net operating income	751	768	2,233	1,227	2,900	1,894
Central administration	–46	–35	–140	–65	–191	–116
Acquisition costs	—	—	—	–21	—	–21
Net financial items	–259	–228	–747	–330	–996	–579
Profit from property management	446	505	1,346	811	1,713	1,178
Earnings, residential development	—	–32	—	–37	1	–36
Net profit, residential development	—	–32	—	–37	1	–36
Share of earnings in associated companies	–109	3	–139	3	–139	3
Value changes, properties	–565	733	176	1,514	2,094	3,432
Value changes, financial assets valued at fair value	–77	–9	–1,091	605	–826	870
Value changes, derivatives	123	86	1,458	177	1,537	256
Impairment, goodwill	–78	—	–388	—	–409	–21
Profit before tax	–260	1,286	1,362	3,073	3,971	5,682
Tax	42	–298	243	–548	–396	–1,187
Net profit for the period	–218	988	1,605	2,525	3,575	4,495
Net profit for the year attributable to:
Parent Company shareholders	–219	980	1,565	2,513	3,460	4,408
Holdings without controlling influence	1	8	40	12	115	87
	–218	988	1,605	2,525	3,575	4,495

Consolidated Report of Comprehensive Income in brief

SEKm	2022 3 months Jul–Sep	2021 3 months Jul–Sep	2022 9 months Jan–Sep	2021 9 months Jan–Sep	2021/2022 Rolling 12 months Oct–Sep	2021 12 months Jan–Dec
Net profit for the year	–218	988	1,605	2,525	3,575	4,495
Other comprehensive income
Translation difference for international operations	518	154	1,217	156	1,356	295
Other comprehensive income after tax	518	154	1,217	156	1,356	295
NET COMPREHENSIVE INCOME FOR THE YEAR	300	1,142	2,822	2,681	4,931	4,790
Net comprehensive income attributable to:
Parent Company shareholders	299	1,132	2,772	2,667	4,804	4,699
Holdings without controlling influence	1	10	50	14	127	91
	300	1,142	2,822	2,681	4,931	4,790
Earnings per share
Earnings per ordinary share of Class A and B, SEK	–0.32	0.81	1.11	3.70	2.75	5.52
No. of outstanding shares, thousands
Ordinary shares A and B, at the end of period	1,078,717	1,084,778	1,078,717	1,084,778	1,078,717	1,084,778
Ordinary shares A and B, average number	1,079,738	1,068,052	1,082,132	624,901	1,082,799	740,815
Ordinary shares D, at end of period	7,504	7,546	7,504	7,546	7,504	7,546
Preference shares, at end of period	12,415	12,415	12,415	12,415	12,415	12,415

No dilution effect exists as there are no potential shares (for example, convertibles).

Consolidated Balance Sheet in brief

SEKm	2022 30 Sep	2021 30 Sep	2021 31 Dec
ASSETS
Non-current assets
Goodwill	2,620	3,080	3,059
Investment properties	81,483	78,290	83,084
Right-of-use assets	995	958	1,000
Shares in associated companies	4,143	472	472
Financial assets valued at fair value	1,177	1,942	2,263
Derivatives	1,396	205	251
Other non-current assets	175	507	153
Total non-current assets	91,989	85,454	90,282
Current assets
Properties classified as current assets	155	1,756	63
Other current assets	1,282	1,127	1,320
Cash and cash equivalents	374	648	571
Total current assets	1,811	3,531	1,954
TOTAL ASSETS	93,800	88,985	92,236
EQUITY AND LIABILITIES
Equity attributable to parent company shareholders	35,081	31,300	33,342
Equity attributable to holdings without controlling influence	73	578	596
Total shareholders' equity	35,154	31,878	33,938
Long-term liabilities
Interest-bearing liabilities	35,841	32,175	32,016
Leasing liabilities	995	958	1,000
Deferred tax liability	7,866	7,517	8,127
Derivatives	23	373	337
Other liabilities	44	8	67
Total long-term liabilities	44,769	41,031	41,547
Current liabilities
Interest-bearing liabilities	11,612	14,105	14,548
Other liabilities	2,265	1,971	2,203
Total current liabilities	13,877	16,076	16,751
Total liabilities	58,646	57,107	58,298
TOTAL EQUITY AND LIABILITIES	93,800	88,985	92,236

Consolidated statement of cash flow in brief

SEKm	2022 3 months Jul–Sep	2021 3 months Jul–Sep	2022 9 months Jan–Sep	2021 9 months Jan–Sep	2021/2022 Rolling 12 months Oct–Sep	2021 12 months Jan–Dec
Operating activities
Net operating income, including residential development	751	736	2,233	1,190	2,901	1,858
Central administration including acquisition costs	–46	–35	–140	–86	–191	–137
Depreciation, etc.	8	18	20	18	2	0
Interest received, dividend etc.	19	33	39	109	40	110
Interest paid, etc.	–254	–246	–768	–400	–1,006	–638
Interest expense, lease contracts attributable to site leasehold contracts	–16	–15	–47	–23	–65	–41
Income tax paid	–3	0	–10	–1	–12	–3
Cash flow before changes in working capital	459	491	1,327	807	1,669	1,149
Change in properties classified as current assets	–20	–10	–91	–10	–270	–189
Change in current receivables	110	62	67	78	–27	–16
Change in current liabilities	26	–132	–162	–73	157	246
Cash flow from operating activities	575	411	1,141	802	1,529	1,190
Investing activities
Investments in new construction, extensions and refurbishment	–749	–598	–1,959	–848	–2,882	–1,771
Acquisition of properties	—	–92	–80	–292	–80	–292
Divestment of properties	526	–2	1,686	104	1,845	263
Acquired cash and cash equivalents, business combination	—	—	—	870	—	870
Acquisition of long-term shareholdings	—	—	—	–249	—	–249
Received cash and cash equivalents, partial divestment group co:s	—	—	8	—	8	—
Acquisition holdings without controlling influence	–456	—	–575	—	–600	–25
Change in other non-current assets	–1	31	–28	31	191	250
Cash flow from investing activities	–680	–661	–948	–384	–1,518	–954
Financing activities
Dividend paid to parent company shareholders	–211	–103	–419	–362	–525	–468
Hybrid bonds	–23	–20	–62	–20	–81	–39
Repurchase of own shares	–28	—	–121	—	–121	—
Issue costs	—	—	—	–23	—	–23
Loans raised	1,282	2,012	13,320	5,409	14,745	6,834
Amortised loans	–1,040	–2,015	–13,161	–4,796	–14,352	–5,987
Cash flow from financing activities	–20	–126	–443	208	–334	317
Cash flow for the period	–125	–376	–250	626	–323	553
Cash and cash equivalents at beginning of period	484	1,017	571	15	648	15
Exchange rate difference in cash and cash equivalents	15	7	53	7	49	3
Cash and cash equivalents at end of period	374	648	374	648	374	571

Consolidated change in equity in brief

SEKm	Parent Company shareholders	Holdings without controlling influence	Total
Opening equity, 01.01.2022	33,342	596	33,938
Comprehensive income for the period	2,473	49	2,522
Repurchase of own shares	–93	—	–93
Dividend to shareholders	–844	—	–844
Hybrid bonds	–39	—	–39
Change in holding without controlling influence	–4	–129	–133
Equity, 30.06.2022	34,835	516	35,351
Comprehensive income for the period	299	1	300
Repurchase of own shares	–28	—	–28
Dividend	10	—	10
Hybrid bonds	–23	—	–23
Change in holding without controlling influence	–12	–444	–456
Equity, 30.09.2022	35,081	73	35,154

Parent Company Income Statement in brief

SEKm	2022 9 months Jan–Sep	2021 9 months Jan–Sep	2021 12 months Jan–Dec
Net sales	413	70	98
Cost of services sold	–274	–41	–61
Gross profit	139	29	37
Central administration	–140	–30	–43
Operating profit	–1	–1	–6
Interest income and similar income statement items	576	246	996
Interest expense and similar income statement items	–487	–88	–120
Profit before tax	88	157	870
Tax	45	–4	–9
Net Profit for the period	133	153	861
Other comprehensive income	—	—	—
Comprehensive income for the period	133	153	861

Parent Company Balance Sheet in brief

SEKm	2022 30 Sep	2021 30 Sep	2021 31 Dec
ASSETS
Other intangible non-current assets	2	3	3
Machinery and equipment	9	0	0
Shares in group companies	22,686	22,163	22,188
Other financial non-current assets	1,706	2,298	1,706
Receivables from group companies	7,624	3,316	3,906
Deferred tax receivable	51	11	6
Other current receivables	50	6	9
Cash and cash equivalents	7	48	28
TOTAL ASSETS	32,135	27,845	27,846
EQUITY AND LIABILITIES
Equity	22,898	23,009	23,717
Interest-bearing liabilities	8,447	4,484	3,882
Non-interest-bearing liabilities	790	352	247
TOTAL EQUITY AND LIABILITIES	32,135	27,845	27,846

Key figures

	30.09.2022 3 months Jul–Sep	30.09.2021 3 months Jul–Sep	30.09.2022 9 months Jan–Sep	30.09.2021 9 months Jan–Sep	31.12.2021 12 months Jan–Dec
Property-related
Fair value of investment properties, SEKm	81,483	78,290	81,483	78,290	83,084
Yield requirement, valuation, %	5.0	5.1	5.0	5.1	5.1
Rental value, SEKm	4,934	4,921	4,934	4,921	4,957
Lettable area, sq.m.	3,257,990	3,475,602	3,257,990	3,475,602	3,478,659
Economic occupancy rate, %	89	88	89	88	89
Area-based occupancy rate, %	83	82	83	82	83
Operating margin, %	67	72	68	72	68
No. of investment properties	473	512	473	512	518
Average remaining lease contract period, years	3.9	3.8	3.9	3.8	3.7
Financial
Return on equity, %	–2.5	13.0	6.1	17.4	21.7
Adjusted equity ratio, %	42	42	42	42	43
Equity ratio, %	37	35	37	35	36
Interest-bearing net liability, SEKm	45,956	43,752	45,956	43,752	43,818
Loan-to-value ratio, %	54	55	54	55	53
Loan-to-value ratio, properties, %	42	40	42	40	38
Interest coverage ratio	2.6	2.8	2.7	2.8	2.7
Average interest rate, %	3.2	2.4	3.2	2.4	2.4
Average period of fixed interest, years	2.2	2.7	2.2	2.7	2.6
Average period of tied-up capital, years	3.5	3.9	3.5	3.9	3.8
Share-related
Profit from property management per ordinary share A and B, SEK	0.30	0.36	0.91	0.98	1.16
Earnings per ordinary share, A and B, SEK	–0.32	0.81	1.11	3.70	5.52
Net asset value (NAV) per ordinary share A and B, SEK	29.93	27.21	29.93	27.21	29.60
Equity per ordinary share A and B, SEK	25.70	22.06	25.70	22.06	23.94
Equity per ordinary share D, SEK	289.59	289.59	289.59	289.59	289.59
Equity per preference share, SEK	312.72	312.72	312.72	312.72	312.72
Dividend per ordinary share, A and B, SEK	—	—	—	—	0.40
Dividend per ordinary share D, SEK	—	—	—	—	20.00
Dividend per preference share, SEK	—	—	—	—	20.00
Share price ordinary share A, SEK	10.40	25.20	10.40	25.20	32.60
Share price ordinary share B, SEK	8.38	23.20	8.38	23.20	32.65
Share price ordinary share D, SEK	196.40	300.50	196.40	300.50	316.00
Share price preference share, SEK	214.00	328.00	214.00	328.00	324.00
No. of shares, thousands
Number of outstanding ordinary shares A and B	1,078,717	1,084,778	1,078,717	1,084,778	1,084,778
Average number of outstanding ordinary shares A and B	1,079,738	1,068,052	1,082,132	624,901	740,815
Number of outstanding ordinary shares D	7,504	7,546	7,504	7,546	7,546
Number of outstanding preference shares	12,415	12,415	12,415	12,415	12,415

Definitions

A number of financial key ratios and measures are presented in the report which are not defined according to IFRS. Corem considers that these key ratios and measures provide valuable supplementary information to investors and the company management when analysing the company's business activities. As not all companies calculate financial key ratios and measures in the same way, these are not always comparable. Definitions of selected key ratios and measures are presented below. The definitions are also shown on Corem´s website (www.corem.se/sv/investerare/definitioner/). For the key ratios that are not directly identifiable from the financial statements there is a complementary calculation appendix on the website.

Adjusted equity ratio

Equity2, adjusted for the value of derivatives including tax, repurchased shares, (based on the share price at the end of respective period) and reported deferred tax properties, less goodwill attributable to deferred tax, as well as deferred tax of 5 per cent attributable to the difference between the properties' fair value and residual value for tax purposes, as a per centage of total assets adjusted for goodwill attributable to deferred tax and rights of use assets.

Annual contract value

Rent including supplements and index on an annual basis.

Average period of fixed interest

Average remaining period of fixed interest on interest-bearing liabilities and derivatives.

Average period of tied-up capital

Average remaining term of interest-bearing liabilities.

Average interest rate

Average borrowing rate for interest-bearing liabilities and derivatives.

Central administration

Central administration costs consist of costs for group management and group-wide functions.

Comparable portfolio

The properties included in the portfolio during the whole of the reporting period and during the whole of the comparison period as well as adjustments for revenue and costs of a one-off nature, for example, early redemption of rental income and rental losses.

Development portfolio

Properties where conversion or extension projects are in progress or planned, which lead to a higher standard or changed use of premises.

Earnings per ordinary share of class A and B

Net profit after deduction of dividend on preference shares and ordinary shares of class D and interest on hybrid bonds, in relation to the average number of outstanding ordinary shares of class A and B.

Equity per ordinary share of class A and B

Equity2 after deduction of equity attributable to preference shares and ordinary shares of class D and hybrid bonds, in relation to the number of outstanding ordinary shares of class A and B.

Equity per ordinary share of class D

The ordinary share of class D's average issue price.

Equity per preference share

The preference share's average issue price.

Equity ratio

Equity2 as a per centage of total assets.

Interest-bearing liabilities

Current and long term interest-bearing liabilities, as well as activated and capitalized borrowing costs.

Interest-bearing net debt

The net of interest-bearing provisions and liabilities, less financial assets including liquid funds.

Interest coverage ratio

Profit from property management plus share of associated companies' profit from property management, and profit from residential development excluding financial expenses1 , divided by financial expenses1 .

Investment portfolio

Properties currently being actively managed.

Investment properties

The term investment properties in the balance sheet includes the investment portfolio as well as the development portfolio.

Total area available for letting.

Lettable area

Loan to value (LTV)3

Interest-bearing liabilities after deduction for the market value of listed shareholdings, interestbearing assets and liquid funds, in relation to the fair value of the properties and shares in associated companies.

Loan to value (LTV), properties

Interest-bearing liabilities with collateral in properties, in relation to the fair value of the properties at the end of the period.

NAV (Net Asset Value) per ordinary share of class A and B

Equity2, after deduction of equity attributable to preference shares and ordinary shares of class D, hybrid bonds and goodwill attributable to deferred tax, adding back derivatives and deferred tax liability, in relation to the number of outstanding ordinary shares of class A and B.

Net letting

Annual rent for the tenancy agreements entered into during the period, reduced for terminated tenancy agreements and bankruptcies.

Net operating income Income minus property costs.

Occupancy rate, area

Rented area divided by total lettable area.

Occupancy rate, economic

Annual contracted rent divided by rental value.

Outstanding ordinary shares

Registered shares, after deduction of repurchased shares.

Profit from property management

Net operating income, central administration and net financial income.

Profit from property management per ordinary share of class A and B

Profit from property management after deduction of dividend on preference shares and ordinary shares of class D and interest on hybrid bonds in relation to the average number of outstanding ordinary shares of class A and B.

Properties classified as current assets

Properties with ongoing production of tenantowned apartments or which are intended for future tenant-owned production.

Realized changes in value, properties

Realized property sales after deductions for the properties' most recently reported fair value and overheads at sale.

Rental value

Annual contract value with a supplement for assessed rent of vacant premises.

Return on equity

Net profit on an annual basis, as a per centage of average equity2 during the period.

Required yield

The required return on the residual value of property valuations.

Operating margin

Net operating income as a percentage of income.

Total number of shares

Registered shares, including repurchased shares.

Unrealized changes in value, properties

Change in fair value excluding acquisitions, divestments, investments, and currency conversion.

1 Excluding site leasehold fees

• 2 Equity attributable to the Parent Company's shareholders.
• 3 After having divested properties to the associated company Klövern, the definition of the key figure was changed in connection with the interim report for the period January–June 2022 in order to better reflect the operations. Historical figures have been adjusted in line with the new definition without any effect on the reported key figures for the comparable periods.

Calendar

FINANCIAL REPORTS
Year-end report, January–December 2022	21 February 2023
Annual report 2022	March 2023
Interim report January–March 2023	28 April 2023
Annual General Meeting 2023	28 April 2023
Interim report January–June 2023	14 July 2023
Interim report January–September 2023	26 October 2023

PROPOSED RECORD DATES AND EXPECTED PAYMENT DATES

Record date for dividend to holders of ordinary shares of Class A, B, D and preference shares is	30 December 2022
Expected date for dividend to holders of ordinary shares of Class A, B, D and preference shares is	4 January 2023
Record date for dividend to holders of ordinary shares of Class A, B, D and preference shares is	31 March 2023
Expected date for dividend to holders of ordinary shares of Class A, B, D and preference shares is	5 April 2023

CONTACT PERSONS:

Eva Landén, CEO, +46 10-482 76 50, eva.landen@corem.se Lars Norrby, IR, +46 76-777 38 00, lars.norrby@corem.se Anna-Karin Hag, CFO, +46 10-482 76 54, anna-karin.hag@corem.se

This information is information that Corem Property Group AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. This information was submitted for publication through the agency of the contact persons set out above, at 08.00 CEST on 25 October 2022.

24 COREM – INTERIM REPORT JANUARY–SEPTEMBER 2022

Corem Property Group AB (publ), Box 56085, 102 17 Stockholm Visiting address: Riddargatan 13 C. Telephone: +46 10 482 70 00 Corporate ID number: 556463-9440, Registered Office: Stockholm Email: info@corem.se, website: www.corem.se Properties for the future.