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Corem Property Group Interim / Quarterly Report 2022
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Interim / Quarterly Report
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Interim Report January–June 2022
Properties for the future.
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 479 investment properties with 3,288 thousand sq.m. of lettable area and a value of SEK 81,088 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
Other 11
PROPERTY VALUE BY CITY, SEKm
Property value SEK 1–2 bn Property value SEK 0–1 bn
January–June 2022
Corem Kelly AB, in 2022 renamed from Klövern AB, is consolidated in Corem from 15 June 2021.
- Income increased to SEK 2,192 million (636).
- Net operating income increased to SEK 1,482 million (459).
- Net financial items amounted to SEK –488 million (-102), of which dividends from shareholdings accounted for SEK 34 million (76).
- Profit from property management increased to SEK 900 million (306).
- Changes in value of properties amounted to SEK 741 million (781).
- Changes in value of financial investments amounted to SEK –1,014 million (614).
- Changes in value of derivatives amounted to SEK 1,335 million (91).
- Net profit increased to SEK 1,823 million (1,537), corresponding to SEK 1.43 (3.76) per ordinary share of Class A and B.
- The value of investment properties amounted to SEK 81,088 million on 30 June.
- Net asset value (NAV) per ordinary share of Class A and B amounted to SEK 29.73 on 30 June.
IMPORTANT EVENTS DURING THE SECOND QUARTER
- On 28 April, Corem handed over 25 properties to the company (Klövern) that Corem has established with ALM Equity for development of in-house managed rental housing. As at 30 June, Corem's ownership stake was 49.4 per cent. The holding is reported as shares in associated companies.
- As part of the concentration of Corem, contracts were signed during the second quarter to divest nine properties in Växjö, Jönköping, Västerås, Malmö and Stockholm for an aggregate underlying property value of SEK 804 million. In total, the transactions are done slightly above book value.
- During the second quarter, the first two tenants in New York have taken possession of premises on 1245 Broadway. In April, a previously agreed 15-year lease to A24 Films was expanded from around 3,800 sq.m. to over 4,500 sq.m. at the property 1245 Broadway, where 40 per cent of the total area is now let.
- Net letting amounted to SEK 13 million during the second quarter and SEK 117 million during the past four quarters.
See page 23 and corem.se for definitions of key figures
81,088 Investment properties. fair value, SEKm
900 Profit from property management, SEKm
29.73 NAV per ordinary share of Class A/B, SEK
4,916 Rental value, SEKm
A stable quarter characterized by concentration
The second quarter of 2022 was marked by the geopolitical situation, the macroeconomic development with accelerating inflation and rising interest rates as well as rapid changes in the financial market. Corem has continued to concentrate its property portfolio, both through the 25 properties that have been transferred to the housing company established jointly with ALM Equity and through contracts signed for divestment of nine properties for over SEK 800 million. Our two core operations, property management and project development, are making stable progress with positive net letting, the first two tenants in New York taking possession of premises and a continued major focus on customer service and cash flow.
A year with the new Corem
Over a year has now passed since we acquired and consolidated Klövern (with a recent change of name to Corem Kelly) and in this way created a new larger and stronger Corem. Integration has gone according to plan and the estimate of synergies identified in conjunction with the acquisition is unchanged. Through the merger, the customer offering has been broadened at the same time as financing opportunities have improved. Corem is now one of the leading commercial real estate companies in the Nordic region, focused mainly on offices and city logistics. We own 479 investment properties at a value of SEK 81 billion and have a diversified customer base consisting of around 4,000 tenants with over 7,000 lease contracts which gives stability.
Positive net letting
Demand for office premises is good on most markets, including Solna where Corem's properties are now practically fully let. Activity on the rental market for city logistics continues to be high.
Net letting amounted to SEK 13 million during the second quarter and SEK 117 million during the most recent 12-month period, which indicates a good recovery after the pandemic. In total, 273 new and renegotiated lease contracts were signed during the quarter, which contributed SEK 123 million to net letting. These include, for example, a 6-year lease with the Swedish National Space Agency for around 1,100 sq.m. in Solna and a 10-year lease with Mälarenergi which expands its premises by around 1,000 sq.m. in Västerås.
During the period January-June, profit from property management increased by 194 per cent to SEK 900 million. The net asset value (NAV) per ordinary share of Class A and B amounted to SEK 29.73, an increase of 13 per cent during the past 12 months.
New macroeconomic conditions
Due to the fast-changing geopolitical situation, we now have an extra focus on the macroeconomic effects that arise. Accelerating inflation, inter alia for energy, is creating some uncertainty. At the same time, rising inflation has a positive effect on Corem's rental income as 84 per cent of our Swedish lease contracts are indexed in relation to the consumer price index (CPI). During 2022, this entails a positive effect on rental income of approximately SEK 90 million; and if inflation stays at the current level, in the autumn, the positive effect for 2023 will be around SEK 250 million.
Stable financing
We work continuously and in an unchanged way to limit the interest rate risk through both interest rate swaps and interest rate caps, where the effect of large interest rate increases is limited by the interest rate caps. At the end of the quarter, 79 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 June, bank credits amounted to 73 per cent of interest-bearing liabilities. This provides stability in periods of volatility in the bond market. During the second quarter, Corem has refinanced a number of bank loans on substantially unchanged terms, in some cases refinancing has been done at a better margin. When it comes to bonds, Corem has no bonds maturing during the rest of 2022, and during the first half of 2023 maturities amount to SEK 1,184 million.
Otherwise, we continue our focused work with the aim of complementing the BBB- rating from Scope with an additional investment graderating from one of the three large rating agencies.
Continued concentration
As a step in the continued streamlining of the portfolio, Corem has, during the second quarter, transferred 25 properties to the new housing company established jointly with ALM Equity. After the addition of one additional owner, Corem's ownership amounts to 49.4 per cent. For Corem, the transaction entails that properties and residential building rights are transferred to the joint company, of which the majority was transferred during the second quarter. As the market for residential building rights has been affected by raised inflation assumptions and rising interest rates, market values for these are estimated to have declined by 5-7 per cent. A review of market values is in process and is expected to be finalized at the end of August. Through the transaction, Corem's portfolio is focused to an even greater extent on management and letting of commercial premises.
As part of the geographical and segment-related concentration of Corem's commercial portfolio, contracts have been signed during the second quarter to divest nine properties in Växjö, Jönköping, Västerås, Malmö and Stockholm for an aggregate underlying property value of SEK 804 million. In total, the transactions are done slightly above book value.
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. A number of projects are in process both in Sweden and abroad. We are engaged in urban development projects in Uppsala and Västerås as well as in Kista and Söderstaden in Stockholm among other places.
In the central parts of Västerås, including the travel centre, a number of projects are in process that contribute to the future development and quality of the core of the city. During the second quarter, we have had the pleasure of announcing several important new lettings at the Punkt shopping mall, including the anchor tenants Coop and Systembolaget, which are moving in during 2023.
Our two largest ongoing new construction projects are two high-quality office buildings in attractive locations in Manhattan, which have now been externally completed while interior tenant customizations will continue throughout 2022. During the quarter, the first two tenants have taken possession of premises at 1245 Broadway. The first to move in was the Swedish computer game developer Avalanche Studios Group which is leasing around 1,370 sq.m. At the start of the second quarter, a previously agreed letting to A24 Films was expanded by an additional floor, making a total of around 4,500 sq.m., which have now been taken possession of, in the framework of a 15-year lease. Even though letting in New York has not taken place at the desired rate, we now see good future prospects with the return to physical offices after the pandemic.
I would like to wish a pleasant summer and thank all our personnel for the first year with the new Corem. Together, we are continuing 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, 13 July 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 on 7 June 2022 in the compulsory redemption process. If the award attains legal force, the remaining shares will be redeemed.
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 22Q2
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 April-June and the period refers to January–June.
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.
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 1,093 million (378) during the second quarter and SEK 2,192 million (636) for the period January-June. The increase is mainly attributable to the acquisition of Klövern, during 2022 renamed to Corem Kelly, which is consolidated in Corem since 15 June 2021. Income for a comparable portfolio increased by 5 per cent during the second quarter.
EXPENSES
Property costs amounted to SEK 338 million (103) during the quarter and SEK 710 million (177) during the period. Property costs for a comparable portfolio increased by 3 per cent during the second quarter.
Central administration costs amounted to SEK 47 million (21) during the quarter and SEK 94 million (30) during the period.
EARNINGS
Net operating income amounted to SEK 755 million (275) during the quarter and SEK 1,482 million (459) during the period. The operating margin amounted to 69 per cent (73) 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 quarter.
Profit from property management increased to SEK 491 million (149) during the quarter and SEK 900 million (306) during the period.
NET FINANCIAL ITEMS
Net financial items amounted to SEK –217 million (-84) during the quarter and SEK –488 million (-102) during the period. Financial income amounted to SEK 35 million (24) during the quarter, of which SEK 34 (23) was dividends from shareholdings. During the quarter, financial expenses amounted to SEK 252 million (108) of which SEK 15 million
(5) was site leasehold expenses (interest expense for leasing liability). At the end of the period, the average interest rate was 2.6 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 –33 million (–) during the second quarter.
CHANGES IN VALUE Properties
The changes in value of Corem's investment properties amounted during the period to SEK 741 million (781), of which unrealized changes in value amounted to SEK 1,078 million and realized changes in value amounted to SEK –337 million.
On 28 April 2022, Corem together with ALM Equity, established the unlisted company Klövern. As of today, a negotiation is in process between the parties regarding a review of the acquisition values in the light of the development in the financial markets during the past few months and rising inflation. This is estimated to have an effect on Corem in the form of an adjustment of realized changes in value, linked to the divestment, of SEK 361 million, reported as realized negative change in value in the interim reporting period to 30 June 2022. The work of the review is in process and the amount is based on preliminary figures.
Financial investments
Changes in value of financial investments totalled SEK –1,014 million (614) during the period. See page 14 for further information.
Derivatives
Changes in value of derivatives amounted to SEK 1,335 million (91) 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 –310 million (–). The impairment refers mainly to the part of goodwill attributable to synergies which were identified in connection with the acquisition of Klövern, during 2022 renamed to Corem Kelly, which are considered to be realized through the establishment of the housing company.
TAXES
During the period deferred tax amounted to SEK 223 million (-249) and current tax to SEK –22 million (-1).
OTHER COMPREHENSIVE INCOME
Other comprehensive income amounted to SEK 699 million (2) during the period. The item mainly refers to translation differences.
INCOME, SEKm
PROFIT FROM PROPERTY MANAGMENT, SEKm
The property portfolio
PROPERTY VALUE
On 30 June 2022, Corem's property portfolio consisted of 479 investment properties with a total lettable area of 3,288 thousand sq.m. and a market value of SEK 81,088 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 741 million (781), of which unrealized changes in value amounted to SEK 1,078 million and realized changes in value amounted to SEK –337 million. During the second quarter, logistics properties have had a positive contribution to changes in value while office properties with large vacancies have had a negative contribution. Project development, including development of building rights, contributed with increases in value of properties of SEK 203 million during the quarter. On average, Corem's properties at 30 June 2022, have been valued at a yield requirement of 5.0 per cent (5.1).
Corem values all properties every quarter, of which 20 till 30 per cent are normally valued externally. Every property in the portfolio is valued externally once a year. During the quarter, Cushman & Wakefield, Newsec 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 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 inhouse 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 June 2022, Corem's ownership of Klövern amounted to 49.4 per cent. The holding is reported as holdings in associated companies.
Other property transactions
In addition, during the second quarter three properties in Malmö, Stockholm and Västerås were sold and handed over and a property in Malmö was taken possession of.
On 17 June 2022, an agreement was signed on divestment of a portfolio of 3 properties in Jönköping and 3 properties in Växjö. The total lettable area of the properties amounts to 41,601 sq.m. and consists mainly of offices, warehouses and industrial premises. After this transaction, Corem no longer has any properties in Växjö. Transfer of possession is planned to be on 1 September 2022
TENANTS AND THE LEASE PORTFOLIO
On 30 June 2022, Corem had approximately 4,000 tenants with 7,100 lease contracts. At the same point in time the annual contract value amounted to SEK 4,359 million (4,402), the rental value amounted to SEK 4,916 million (4,957) and the economic occupancy rate was 89 per cent (89). 36 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 13 million (14) during the second quarter and SEK 117 million (23) during the past four quarters. In all, lettings and negotiations amounted to SEK 123 million during the second quarter, where 64 per cent were new tenants and the remaining letting to existing tenants.
Major lettings
During the second quarter of the year, a number of large lease contracts have been signed.
In Solna, a 6-year lease has been signed with the Swedish National Space Agency for approximately 1,100 sq.m. Moving in is planned to be in Q4 2022.
In Västerås, a 10-year lease has been signed with Mälarenergi which expands its premises by around 1,000 sq.m.
INVESTMENT PROPERTIES: NUMBER, LETTABLE AREA, FAIR VALUE
| Jan-Jun 2022 | ||||
|---|---|---|---|---|
| No. | sq.m. | SEKm | SEKm | |
| Total at the start of the year | 518 | 3,478,659 | 83,084 | 14,002 |
| Business combination, Klövern | 61,557 | |||
| Acquisitions | 1 | 1,925 | 80 | 292 |
| Investments in construction, extensions and refurbishment | — | 15,333 | 1,210 | 1,771 |
| Divestments | –14 | –84 920 | –1,126 | –296 |
| Reclassification to Shares in associated companies | –25 | –122 731 | –4,374 | — |
| Reclassification of Properties classified as current assets | — | — | — | 1,930 |
| Property regulation | –1 | — | — | — |
| Changes in value, unrealised | — | — | 1,078 | 3,421 |
| Currency conversion | — | — | 1,135 | 407 |
| Total at the end of the period | 479 | 3,288,266 | 81,088 | 83,084 |
PROPERTY TRANSACTIONS, TRANSFER OF POSSESSION JANUARY – JUNE 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 |
| TOTAL SQ.M. | 1,925 | 207,651 |
Marievik 22 in Stockholm was one of the properties transferred during the second quarter 2022 to the newly established housing company Klövern.
NET LETTING, SEKm
CONTRACT STRUCTURE, SEKm
1245 Broadway, New York.
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-June, SEK 1,210 million (250) has been invested in the property portfolio for new construction, extension and refurbishments. On 30 June 2022, the remaining investment volume of projects in process amounted to SEK 2,725 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 85,635 sq.m. with a remaining investment of SEK 1,370 million, amounts to 56 per cent.
Project development, including development of building rights, contributed to increases in value of SEK 203 million during the second quarter or SEK 1,136 million during the past four quarters.
Commercial projects in Sweden
A number of urban development projects are in process, among others in Uppsala and Västerås and in Kista and Söderstaden in Stockholm.
In Sweden, two large projects are in process in central Västerås. In the retail property Punkt the facade is opened up towards the train station and the interior is upgraded with new escalators and through environmental investments. Tenant customizations are in process for, among others, Coop and Systembolaget which during 2022 have signed long lease contracts with moving-in during 2023. In the adjacent Gallerian, Region Västmanland's largest health center is moving in during 2023 on a 15-year lease contract.
Commercial projects in New York
Corem owns five project properties 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 buildings have now reached exterior completion. During the second quarter the first tenant, Avalanche Studios Group, has moved into a floor at 1245 Broadway and the tenant A24 Films has taken possession of its five floors at the same property where tenant customization is now in process. Additional tenants will move in during the autumn. As of 30 June, 40 per cent of the area of 1245 Broadway was let, whereas 7 per cent of the area of 28&7 was let. Letting work and interior tenant customization is ongoing. 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.
Currently, Corem has one ongoing residential project, K1 Nacka Strand which comprises of 60 apartments. The project is divided into sale phases and the 48 apartments that have been offered to the market have been sold. Sales of the remaining 12 apartments has not started yet. Moving-in planned to be during the fourth quarter of 2023.
COREM'S LARGEST COMMERCIAL PROJECTS IN PROCESS
| City | Property | Description | Let area sq.m. |
Project area, sq.m. |
Estimated investment, SEKm |
Accrued investment, SEKm |
Rental value, SEKm |
Completion, year/quarter |
|---|---|---|---|---|---|---|---|---|
| New York | 1245 Broadway | New construction, office premises | 6,643 | 16,700 | 1,601 | 1,257 | 206 | 22Q4 |
| New York | 28&7 | New construction, office premises | 600 | 9,100 | 870 | 691 | 98 | 22Q4 |
| Stockholm Orgelpipan 4 | Refurbishment, office premises | 0 | 4,240 | 260 | 146 | 17 | 23Q2 | |
| Uppsala | Fyrislund 6:6 | New construction, offices and laboratory | 0 | 3,097 | 159 | 75 | 11 | 22Q4 |
| Västerås | Loke 24 | Refurbishment of building, tenant customization for health center |
5,123 | 6,773 | 156 | 49 | 9 | 23Q3 |
| Stockholm Nattskiftet 12/14 | New construction, garage and refurbishment, office premises |
7,425 | 8,168 | 151 | 55 | 6 | 23Q1 | |
| Stockholm Sicklaön 356:1 | Refurbishment for Bilia | 10,942 | 10,942 | 147 | 17 | 11 | 24Q1 | |
| Örebro | Olaus Petri 3:234 | Refurbishment and extension and office premises for Trafikverket |
2,625 | 10,318 | 139 | 19 | 6 | 23Q4 |
| Västerås | Mats 5 | Refurbishment of building | 3,330 | 3,786 | 111 | 24 | 7 | 23Q3 |
| Norrköping Stålet 3 | New construction for Bravida | 3,295 | 3,295 | 72 | 66 | 5 | 23Q1 | |
| Västerås | Gustavsvik | Refurbishment, office/gym premises. Updating of technology |
5,280 | 5,280 | 69 | 6 | 7 | 23Q2 |
| Borås | Skruven 3 | New construction for Dagab and logistics premises |
2,531 | 3,936 | 68 | 28 | 5 | 23Q1 |
| TOTAL | 47,794 | 85,635 | 3,803 | 2,433 | 388 |
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 | 48 | 80 | 5,000 | 3,700 | 2021 | 2023 |
| TOTAL | 60 | 48 | 80 | 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 fourth quarter of 2022.
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.
Sicklaön 356:1, Stockholm
Ongoing project. Estimated to be completed during the first quarter of 2024.
28&7, New York Ongoing project. Estimated to be completed during the fourth quarter of 2022.
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 the 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–Jun |
2021 Jan–Jun |
2022 Jan–Jun |
2021 Jan–Jun |
2022 Jan–Jun |
2021 Jan–Jun |
2022 Jan–Jun |
2021 Jan–Jun |
2022 Jan–Jun |
2021 Jan–Jun |
|
| Region Stockholm | 876 | 71 | –337 | –25 | 539 | 46 | 62 | 65 | 368 | — |
| Region Stockholm Logistics | 300 | 281 | –90 | –85 | 210 | 196 | 70 | 70 | 111 | 112 |
| Region East | 430 | 95 | –138 | –25 | 292 | 70 | 68 | 74 | 232 | 23 |
| Region West | 428 | 169 | –137 | –41 | 291 | 128 | 68 | 76 | 179 | 65 |
| International – Copenhagen | 144 | 20 | –7 | –1 | 137 | 19 | 95 | 95 | 10 | 50 |
| International – New York | 14 | — | –1 | — | 13 | — | 93 | — | 310 | — |
| Total | 2,192 | 636 | –710 | –177 | 1,482 | 459 | 68 | 72 | 1,210 | 250 |
| Investment portfolio | 2,082 | — | –632 | — | 1,450 | — | 70 | — | 699 | — |
| Development portfolio | 110 | — | –78 | — | 32 | — | 29 | — | 511 | — |
| Total | 2,192 | — | –710 | — | 1,482 | — | 68 | — | 1,210 | — |
KEY FIGURES PER GEOGRAPHIC AREA
| No. of properties | Fair value, SEKm | Rental value, SEKm | Economic occupancy rate, % |
Lettable area, 000 sq.m. |
||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 2022 30 June |
2021 30 June |
2022 30 June |
2021 30 June |
2022 30 June |
2021 30 June |
2022 30 June |
2021 30 June |
2022 30 June |
2021 30 June |
|
| Region Stockholm | 111 | 119 | 31,133 | 31,188 | 2,019 | 2,071 | 86 | 85 | 1,021 | 1,111 |
| Region Stockholm Logistics | 91 | 94 | 9,222 | 8,426 | 629 | 606 | 95 | 94 | 472 | 475 |
| Region East | 129 | 140 | 12,507 | 11,821 | 957 | 958 | 89 | 91 | 820 | 867 |
| Region West | 133 | 141 | 13,124 | 12,691 | 958 | 1,001 | 87 | 88 | 810 | 867 |
| International – Copenhagen | 10 | 10 | 7,978 | 7,113 | 293 | 273 | 95 | 96 | 159 | 160 |
| International – New York1 | 5 | 6 | 7,124 | 5,403 | 60 | — | 100 | — | 6 | — |
| Total | 479 | 510 | 81,088 | 76,642 | 4,916 | 4,909 | 89 | 88 | 3,288 | 3,480 |
| Investment portfolio | 439 | — | 69,811 | — | 4,613 | — | 90 | — | 3,103 | — |
| Development portfolio | 40 | — | 11,277 | — | 303 | — | 75 | — | 185 | — |
| Total | 479 | — | 81,088 | — | 4,916 | — | 89 | — | 3,288 | — |
1) Rental value, Economic occupancy rate and Lettable area refer to active leasing contracts
PROPERTY VALUE BY SQ.M.
LETTABLE AREA BY TYPE, %
RENTAL VALUE BY SQ.M.
Förvaltningsresultat/kvm
Financing
INTEREST-BEARING LIABILITIES
On 30 June 2022, the interest-bearing liabilities amounted to SEK 47,123 million (46,738). Accrued borrowing overheads amounted to SEK 184 million (174), meaning interest-bearing liabilities in the balance sheet of SEK 46,939 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 1,275 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. The previous programme in the subsidiary Corem Kelly (renamed from Klövern) has been phased out during the quarter. Outstanding commercial paper have back-ups in the form of unutilized credit facilities in Nordic banks.
The average period of tied-up capital amounted to 3.6 years (3.8). The loan-to-value ratio amounted to 53 per cent (53).
INTEREST-BEARING NET LIABILITIES
| SEKm | 2022 30 Jun |
2021 31 Dec |
|---|---|---|
| Interest-bearing liabilities | 46,939 | 46,564 |
| Adjustment, accrued borrowing overheads | 184 | 174 |
| Interest-bearing assets | –263 | –86 |
| Long-term shareholdings | –1,258 | –2,263 |
| Current investments | — | — |
| Cash and cash equivalents | –484 | –571 |
| Interest-bearing net liability | 45,118 | 43,818 |
Bonds
In April, Corem issued unsecured bonds for SEK 250 million at an implicit interest rate of 3-month STIBOR + approximately 3 per cent maturing in April 2024. At the end of the quarter, the Group had
AVERAGE INTEREST RATE, %
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 June 2022, the average interest of the loan portfolio was 2.6 per cent (2.4). Refinancings during the quarter have been completed at lower or unchanged margins, which has contributed to mitigate the effect of the rise in the Stibor rate and the Libor 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 14,390 million (8,890) and interest rate caps for SEK 21,939 million (23,539), which correspond to 77 per cent of the interest-bearing liabilities. Together with fixed interest loans, this means that 79 per cent of the interest-bearing liabilities were hedged. The swaps have interest rate levels in the range –0.3-3.7 per cent while the caps have interest rate levels in the range 1.5-3.0 per cent. As of 30 June 2022, the net market value of the interest rate derivative portfolio was SEK 1,249 million (–86). Change in value of derivatives amounted to SEK 615 million (8) during the quarter.
The average fixed interest period amounted at the end of the quarter to 2.5 years (2.6) taking derivatives into account. The interest coverage ratio amounted to 3.0 (2.4) during the quarter.
LIQUID FUNDS
On 30 June 2022, liquid funds amounted to SEK 484 million (571). In addition, there were unutilized credit facilities of SEK 4,246 million (4,719). Interest-bearing net liabilities amounted to SEK 45,118 million (43,818).
INTEREST COVERAGE RATIO
EQUITY RATIO AND ADJUSTED EQUITY RATIO, %
In Halmstad, Corem has completed an entirely new building during the second quarter of 2022. Försäkringskassan leases the majority of the building and Corem's own concept for business centers, First Office, has premises on the ground floor.
EQUITY
At the end of the quarter, the Group's equity, attributable to the parent company's shareholders, amounted to SEK 34,835 million (33,342), of which SEK 1,300 million refers to hybrid bonds. Equity amounted to SEK 25.42 (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 29.73 (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), both to some extent negatively affected by the future dividend decided upon for ordinary and preference shares being recorded as a liability after the annual general meeting.
For further information about changes in equity, see page 20.
SHAREHOLDINGS
Since 2019, Corem owns shares in the real estate company Castellum which is listed on Nasdaq Stockholm. On 30 June 2022, the holding amounted to 8,880,000 shares. The market value amounted at the same time to SEK 1,167 million, based on a price of SEK 131.45 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 10 million on 30 June 2022.
In addition, unlisted shares at a value of SEK 81 million are included in the balance sheet's line Financial assets valued at fair value.
CASH FLOW
The Group's cash flow from operating activities, before change in working capital, amounted during the quarter to SEK 459 million (148).
Cash flow from investing activities amounted to SEK –712 million (796) and cash flow from financing activities to SEK –226 million (0).
FIXED INTEREST AND TIED-UP CAPITAL
| Maturity year | Fixed interest | Tied-up capital | ||||
|---|---|---|---|---|---|---|
| Loan volume, SEKm |
Contract volume, SEKm |
Utilised, SEKm |
Of which outstanding bonds, SEKm |
Not utilised, SEKm |
||
| Variable * | 31,897 | — | — | — | — | |
| 2022 | 100 | 6,162 | 4,959 | — | 1,203 | |
| 2023 | 121 | 14,956 | 13,363 | 2,934 | 1,593 | |
| 2024 | 4,128 | 10,518 | 10,068 | 5,784 | 450 | |
| 2025 | 2,490 | 10,765 | 10,265 | 2,700 | 500 | |
| 2026 | — | 1,570 | 1,070 | — | 500 | |
| Later | 8,387 | 7,398 | 7,398 | — | — | |
| Total | 47,123 | 51,369 | 47,123 | 11,418 | 4,246 |
*SEK 21,939 million of Floating volume is covered by interest-rate caps.
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 June 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 JUNE 2022
During the second quarter, Corem has repurchased 2,300,000 ordinary shares of Class B for SEK 43 million. As at 30 June 2022, Corem held a total of 2,913,825 repurchased ordinary shares of Class A, 33,491,000 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 431 million. The shares are repurchased at an average price of SEK 8.80 per ordinary share of Class A, SEK 19.46 per ordinary share of Class B and SEK 297.85 per ordinary share of Class D.
28&7, New York.
DIVIDEND PER ORDINARY SHARE A/B, SEK
NET ASSET VALUE (NAV) PER ORDINARY SHARE A/B, SEK
| Market capitalisation | SEK 17.1 bn |
|---|---|
| Market place | Nasdaq Stockholm, Large Cap |
| LEI no. | 213800CHXQQD7TSS1T59 |
| No. of shareholders | 44,866 |
| Ordinary share, Class A | |
| No. of shares | 93,730,797 |
| Closing price | SEK 13.20 |
| ISIN | SE0010714279 |
| Ordinary share Class B | |
| No. of shares | 1,023,591,380 |
| Closing price | SEK 11.48 |
| ISIN | SE0010714287 |
| Ordinary share Class D | |
| No. of shares | 7,545,809 |
| Closing price | SEK 200.00 |
| ISIN | SE0015961594 |
| Preference share | |
| No. of shares | 12,415,295 |
| Closing price | SEK 209.00 |
| ISIN | SE0010714311 |
LARGEST SHAREHOLDERS — 30 JUNE 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 bolag | 35,436 | 349,621 | 3,127 | — | 34.13 | 36.86 |
| Gårdarike | 39,490 | 118,128 | 57 | 26 | 13.87 | 26.75 |
| Handelsbanken fonder | — | 73,882 | 8 | — | 6.50 | 3.85 |
| Länsförsäkringar fondförvaltning | — | 65,456 | 21 | — | 5.76 | 3.41 |
| Swedbank Robur fonder | 1,593 | 23,036 | — | — | 2.17 | 2.03 |
| State Street Bank & Trust Co | — | 38,374 | 1 | 164 | 3.39 | 2.01 |
| JP Morgan Chase Bank N.A. | — | 26,642 | 0 | 219 | 2.36 | 1.40 |
| CBNY Norges Bank | 559 | 13,582 | 96 | 38 | 1.26 | 1.01 |
| Prior & Nilsson | — | 16,825 | — | — | 1.48 | 0.88 |
| Fredrik Rapp privat och via bolag | 750 | 7,500 | — | — | 0.73 | 0.78 |
| Livförsäkringsbolaget Skandia, Ömsesidigt | 694 | 6,769 | — | 0 | 0.66 | 0.71 |
| Patrik Tillman privat och via bolag | 571 | 5,714 | 77 | — | 0.56 | 0.60 |
| SEB Life International | 1,100 | — | — | — | 0.10 | 0.57 |
| Invus Investment AB | 410 | 6,043 | — | — | 0.57 | 0.53 |
| Försäkringsaktiebolaget, Avanza Pension | 218 | 6,092 | 269 | 823 | 0.65 | 0.49 |
| Other shareholders | 9,995 | 232,436 | 3,848 | 11,144 | 22.63 | 18.11 |
| TOTAL OUTSTANDING SHARES | 90,817 | 990,100 | 7,504 | 12,415 | 96.80 | 100.00 |
| Repurchased own shares¹) | 2,914 | 33,491 | 42 | — | 3.20 | |
| 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 living city.
Corem's Board of Directors has established a number of new longterm sustainability goals following the consolidation of Klövern (during 2022 renamed to Corem Kelly), 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 June 2022, the Corem group had 367 employees (368). 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 3 million (28) 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. As of 30 June 2022, Corem's ownership amounted to 98.7 per cent of the outstanding share capital and around 98.6 per cent of the outstanding votes in Corem Kelly. Compulsory redemption has been called for in order to acquire the remaining shares. The redemption process is ongoing. An arbitration award in the redemption process was announced on 7 June 2022. If the arbitration award attains legal force, the remaining shares will be redeemed for a total amount which is currently estimated to be approximately SEK 0.5 billion.
DIVIDEND
During the first and second quarter, a dividend of SEK 5.00 per ordinary share of Class D and preference share, totalling SEK 199 million has been paid as well as SEK 9 million to the minority shareholders of Corem Kelly.
The Board of Directors 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, 13 July 2022 Corem Property Group AB (publ)
Patrik Essehorn Chairman
Christina Tillman Board member
Katarina Klingspor Board member
Magnus Uggla Board member
Fredrik Rapp Board member
Christian Roos Board member
Eva Landén CEO
This report has not been subject to a review by the Company's auditors.
The Consolidated Income Statement in brief
| SEKm | 2022 3 months Apr–Jun |
2021 3 months Apr–Jun |
2022 6 months Jan–Jun |
2021 6 months Jan–Jun |
2021/2022 Rolling 12 months Jul-Jun |
2021 12 months Jan–Dec |
|---|---|---|---|---|---|---|
| Income | 1,093 | 378 | 2,192 | 636 | 4 361 | 2,805 |
| Property costs | –338 | –103 | –710 | –177 | -1 444 | –911 |
| Net operating income | 755 | 275 | 1,482 | 459 | 2,917 | 1,894 |
| Central administration | –47 | –21 | –94 | –30 | –180 | –116 |
| Acquisition costs | — | –21 | — | –21 | — | –21 |
| Net financial items | –217 | –84 | –488 | –102 | –965 | –579 |
| Profit from property management | 491 | 149 | 900 | 306 | 1,772 | 1,178 |
| Earnings, residential development | — | –5 | — | –5 | –31 | –36 |
| Net profit, residential development | — | –5 | — | –5 | –31 | –36 |
| Share of earnings in associated companies | –33 | — | –30 | — | –27 | 3 |
| Value changes, properties | –341 | 300 | 741 | 781 | 3,392 | 3,432 |
| Value changes, financial investments | –913 | 805 | –1,014 | 614 | –758 | 870 |
| Value changes, derivatives | 615 | 8 | 1,335 | 91 | 1,500 | 256 |
| Impairment, goodwill | –255 | — | –310 | — | –331 | –21 |
| Profit before tax | –436 | 1,257 | 1,622 | 1,787 | 5,517 | 5,682 |
| Tax | 523 | –129 | 201 | –250 | –736 | –1,187 |
| Net profit for the period | 87 | 1,128 | 1,823 | 1,537 | 4,781 | 4,495 |
| Net profit for the year attributable to: | ||||||
| Parent Company shareholders | 75 | 1,124 | 1,784 | 1,533 | 4,659 | 4,408 |
| Holdings without controlling influence | 12 | 4 | 39 | 4 | 122 | 87 |
| 87 | 1,128 | 1,823 | 1,537 | 4,781 | 4,495 | |
| Other comprehensive income | ||||||
| Items that can be referred to net profit for the year | ||||||
| Translation differences, etc. | 575 | -3 | 699 | 2 | 992 | 295 |
| Comprehensive income for the period | 662 | 1,125 | 2,522 | 1,539 | 5,773 | 4,790 |
| Comprehensive income attributable to: | ||||||
| Parent Company shareholders | 640 | 1,121 | 2,473 | 1,535 | 5,637 | 4,699 |
| Holdings without controlling influence | 22 | 4 | 49 | 4 | 136 | 91 |
| 662 | 1,125 | 2,522 | 1,539 | 5,773 | 4,790 | |
| Earnings per share | ||||||
| Earnings per ordinary share of Class A and B, SEK1) | -0.04 | 2.44 | 1.43 | 3.76 | 3,87 | 5,52 |
| No. of outstanding shares, thousands | ||||||
| Ordinary shares A and B, at the end of period | 1,080,917 | 1,053,374 | 1,080,917 | 1,053,374 | 1,080,917 | 1,084,778 |
| Ordinary shares A and B, average number1) | 1,082,211 | 455,492 | 1,083,349 | 399,653 | 1,079,853 | 740,815 |
| Ordinary shares D, at end of period | 7,504 | 7,178 | 7,504 | 7,178 | 7,504 | 7,546 |
| Preference shares, at end of period | 12,415 | 11,886 | 12,415 | 11,886 | 12,415 | 12,415 |
No dilution effect exists as there are no potential shares (for example, convertibles).
1 Comparative figures have been adjusted for the average number of outstanding ordinary shares A and B for the quarter Apr-Jun 2021 and the period Jan-Jun 2021.
The adjustment affects the key figure Earnings per ordinary share, A and B.
Consolidated Balance Sheet in brief
| SEKm | 2022 30 Jun |
2021 30 Jun |
2021 31 Dec |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Goodwill | 2,699 | 3,011 | 3,059 |
| Investment properties | 81,088 | 76,642 | 83,084 |
| Right-of-use assets | 996 | 947 | 1,000 |
| Shares in associated companies | 4,257 | 469 | 472 |
| Financial assets valued at fair value | 1,258 | 2,013 | 2,263 |
| Derivatives | 1,292 | 110 | 251 |
| Other non-current assets | 215 | 298 | 153 |
| Total non-current assets | 91,805 | 83,490 | 90,282 |
| Current assets | |||
| Properties classified as current assets | 135 | 1,746 | 63 |
| Other current assets | 1,239 | 1,390 | 1,320 |
| Cash and cash equivalents | 484 | 1,017 | 571 |
| Total current assets | 1,858 | 4,153 | 1,954 |
| TOTAL ASSETS | 93,663 | 87,643 | 92,236 |
| EQUITY AND LIABILITIES | |||
| Equity attributable to parent company shareholders | 34,835 | 29,224 | 33,342 |
| Equity attributable to holdings without controlling influence | 516 | 1,555 | 596 |
| Total shareholders' equity | 35,351 | 30,779 | 33,938 |
| Long-term liabilities | |||
| Interest-bearing long-term liabilities | 36,896 | 33,451 | 32,016 |
| Long-term leasing liabilities | 996 | 947 | 1,000 |
| Deferred tax liability | 7,915 | 7,151 | 8,127 |
| Other provisions | — | 24 | — |
| Derivatives | 43 | 364 | 337 |
| Other long-term liabilities | 42 | 8 | 67 |
| Total long-term liabilities | 45,892 | 41,945 | 41,547 |
| Current liabilities | |||
| Interest-bearing current liabilities | 10,043 | 12,757 | 14,548 |
| Other current liabilities | 2,377 | 2,162 | 2,203 |
| Total current liabilities | 12,420 | 14,919 | 16,751 |
| Total liabilities | 58,312 | 56,864 | 58,298 |
| TOTAL EQUITY AND LIABILITIES | 93,663 | 87,643 | 92,236 |
Consolidated statement of cash flow in brief
| SEKm | 2022 3 months Apr–Jun |
2021 3 months Apr–Jun |
2022 6 months Jan–Jun |
2021 6 months Jan–Jun |
2021/2022 Rolling 12 months Jul–Jun |
2021 12 months Jan–Dec |
|---|---|---|---|---|---|---|
| Operating activities | ||||||
| Net operating income, including residential development | 755 | 270 | 1,482 | 454 | 2,886 | 1,858 |
| Central administration including acquisition costs | –47 | –42 | –94 | –51 | –180 | –137 |
| Depreciation, etc. | 5 | — | 12 | — | 12 | — |
| Interest received, dividend etc. | 18 | 23 | 20 | 76 | 54 | 110 |
| Interest paid, etc. | –255 | –97 | –514 | –154 | –998 | –638 |
| Interest expense, lease contracts attributable to site leasehold contracts |
–14 | –5 | –31 | -8 | –64 | –41 |
| Income tax paid | –3 | –1 | –7 | –1 | –9 | –3 |
| Cash flow before changes in working capital | 459 | 148 | 868 | 316 | 1,701 | 1,149 |
| Change in properties classified as current assets | –54 | — | –71 | — | –260 | –189 |
| Change in current receivables | –72 | 29 | –43 | 16 | –75 | -16 |
| Change in current liabilities | 57 | 2 | –188 | 59 | –1 | 246 |
| Cash flow from operating activities | 390 | 179 | 566 | 391 | 1 365 | 1 190 |
| Investing activities | ||||||
| Investments in new construction, extensions and refurbishment |
–768 | –122 | –1,210 | –250 | –2,731 | –1,771 |
| Acquisition of properties | –80 | –8 | –80 | –200 | –172 | –292 |
| Divestment of properties | 183 | 106 | 1,160 | 106 | 1,317 | 263 |
| Acquired cash and cash equivalents, business combination | — | 870 | — | 870 | — | 870 |
| Acquisition of long-term shareholdings | — | –50 | — | –249 | — | –249 |
| Received cash and cash equivalents, partial divestment group co:s |
8 | — | 8 | — | 8 | — |
| Acquisition holdings without controlling influence | –33 | — | –119 | — | –144 | –25 |
| Change in other non-current assets | –22 | — | –27 | — | 223 | 250 |
| Cash flow from investing activities | –712 | 796 | –268 | 277 | –1,499 | –954 |
| Financing activities | ||||||
| Dividend paid to parent company shareholders | –105 | –241 | –208 | –259 | –417 | –468 |
| Hybrid bonds | –20 | — | –39 | — | –78 | –39 |
| Repurchase of own shares | –43 | — | –93 | — | –93 | — |
| Issue costs | 0 | –23 | 0 | –23 | 0 | –23 |
| Loans raised | 5,706 | 2,254 | 12,038 | 3,397 | 15,475 | 6,834 |
| Amortised loans | –5,764 | –1,990 | –12,121 | –2,781 | –15,327 | –5,987 |
| Cash flow from financing activities | –226 | 0 | –423 | 334 | –440 | 317 |
| Cash flow for the period | –548 | 975 | –125 | 1,002 | –574 | 553 |
| Cash and cash equivalents at beginning of period | 987 | 42 | 571 | 15 | 1,017 | 15 |
| Exchange rate difference in cash and cash equivalents | 45 | — | 38 | — | 41 | 3 |
| Cash and cash equivalents at end of period | 484 | 1,017 | 484 | 1,017 | 484 | 571 |
Consolidated change in equity in brief
| SEKm | Parent Company shareholders |
Holdings without controlling influence |
Total |
|---|---|---|---|
| Opening equity, 31.12.2021 | 33,342 | 596 | 33,938 |
| Comprehensive income for the period | 1,833 | 27 | 1,860 |
| Repurchase of own shares | –50 | — | –50 |
| Hybrid bonds | –19 | — | –19 |
| Change in holding without controlling influence | 13 | –108 | –95 |
| Equity, 31.03.2022 | 35,119 | 515 | 35,634 |
| Comprehensive income for the period | 640 | 22 | 662 |
| Repurchase of own shares | –43 | — | –43 |
| Dividend | –844 | — | –844 |
| Hybrid bonds | –20 | — | –20 |
| Change in holding without controlling influence | –17 | –21 | –38 |
| Equity, 30.06.2022 | 34,835 | 516 | 35,351 |
Parent Company Income Statement in brief
| SEKm | 2022 6 months Jan–Jun |
2021 6 months Jan–Jun |
2021 12 months Jan–Dec |
|---|---|---|---|
| Net sales | 272 | 48 | 98 |
| Cost of services sold | –179 | –29 | –61 |
| Gross profit | 93 | 19 | 37 |
| Central administration | –94 | –20 | –43 |
| Operating profit | –1 | –1 | –6 |
| Interest income and similar income statement items | 420 | 114 | 996 |
| Interest expense and similar income statement items | –152 | –52 | –120 |
| Profit before tax | 267 | 61 | 870 |
| Tax | 27 | –10 | –9 |
| Net Profit for the period | 294 | 51 | 861 |
| Other comprehensive income | –122 | — | — |
| Comprehensive income for the period | 172 | 51 | 861 |
Parent Company Balance Sheet in brief
| SEKm | 2022 30 Jun |
2021 30 Jun |
2021 31 Dec |
|---|---|---|---|
| ASSETS | |||
| Other intangible non-current assets | 2 | 3 | 3 |
| Machinery and equipment | 8 | 0 | 0 |
| Shares in group companies | 22,230 | 20,995 | 22,188 |
| Other financial non-current assets | 1,706 | 2,301 | 1,706 |
| Receivables from group companies | 8,750 | 3,490 | 3,906 |
| Deferred tax receivable | 33 | 5 | 6 |
| Other current receivables | 40 | 7 | 9 |
| Cash and cash equivalents | 22 | 16 | 28 |
| TOTAL ASSETS | 32,791 | 26,817 | 27,846 |
| EQUITY AND LIABILITIES | |||
| Equity | 22,965 | 21,854 | 23,717 |
| Interest-bearing liabilities | 8,851 | 4,508 | 3,882 |
| Non-interest-bearing liabilities | 975 | 455 | 247 |
| TOTAL EQUITY AND LIABILITIES | 32,791 | 26,817 | 27,846 |
Key figures
| 2022-06-30 3 months Apr–Jun |
2021-06-30 3 months Apr–Jun |
2022-06-30 6 months Jan–Jun |
2021-06-30 6 months Jan–Jun |
2021-12-31 12 months Jan–Dec |
|
|---|---|---|---|---|---|
| Property-related | |||||
| Fair value of investment properties, SEKm | 81,088 | 76,642 | 81,088 | 76,642 | 83,084 |
| Yield requirement, valuation, % | 5.0 | 5.1 | 5.0 | 5.1 | 5.1 |
| Rental value, SEKm | 4,916 | 4,909 | 4,916 | 4,909 | 4,957 |
| Lettable area, sq.m. | 3,288,266 | 3,479,743 | 3,288,266 | 3,479,743 | 3,478,659 |
| Economic occupancy rate, % | 89 | 88 | 89 | 88 | 89 |
| Area-based occupancy rate, % | 83 | 83 | 83 | 83 | 83 |
| Operating margin, % | 69 | 73 | 68 | 72 | 68 |
| No. of investment properties | 479 | 510 | 479 | 510 | 518 |
| Average remaining lease contract period, years | 3.9 | 4.6 | 3.9 | 4.6 | 3.7 |
| Financial | |||||
| Return on equity, % | 0.9 | 24.4 | 10.5 | 16.8 | 21.7 |
| Adjusted equity ratio, % | 42 | 39 | 42 | 39 | 43 |
| Equity ratio, % | 37 | 33 | 37 | 33 | 36 |
| Interest-bearing net liability, SEKm | 45,118 | 43,373 | 45,118 | 43,373 | 43,818 |
| Loan-to-value ratio, % | 53 | 55 | 53 | 55 | 53 |
| Loan-to-value ratio, properties, % | 41 | 41 | 41 | 41 | 38 |
| Interest coverage ratio | 3.0 | 2.4 | 2.8 | 2.8 | 2.7 |
| Average interest rate, % | 2.6 | 2.5 | 2.6 | 2.5 | 2.4 |
| Average period of fixed interest, years | 2.5 | 2.9 | 2.5 | 2.9 | 2.6 |
| Average period of tied-up capital, years | 3.6 | 4.0 | 3.6 | 4.0 | 3.8 |
| Share-related | |||||
| Profit from property management per ordinary share A and B, SEK | 0.34 | 0.29 | 0.61 | 0.68 | 1.16 |
| Earnings per ordinary share, A and B, SEK1) | –0.04 | 2.44 | 1.43 | 3.76 | 5.52 |
| Net asset value (NAV) per ordinary share A and B, SEK | 29.73 | 26.27 | 29.73 | 26.27 | 29.60 |
| Equity per ordinary share A and B, SEK | 25.42 | 22.26 | 25.42 | 22.26 | 23.94 |
| Equity per ordinary share D, SEK | 289.59 | 288.47 | 289.59 | 288.47 | 289.59 |
| Equity per preference share, SEK | 312.72 | 311.64 | 312.72 | 311.64 | 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 | 13.20 | 19.30 | 13.20 | 19.30 | 32.60 |
| Share price ordinary share B, SEK | 11.48 | 19.38 | 11.48 | 19.38 | 32.65 |
| Share price ordinary share D, SEK | 200.00 | 290.00 | 200.00 | 290.00 | 316.00 |
| Share price preference share, SEK | 209.00 | 317.00 | 209.00 | 317.00 | 324.00 |
| No. of shares, thousands | |||||
| Number of outstanding ordinary shares A and B | 1,080,917 | 1,053,374 | 1,080,917 | 1,053,374 | 1,084,778 |
| Average number of outstanding ordinary shares A and B1) | 1,082,211 | 455,492 | 1,083,349 | 399,653 | 740,815 |
| Number of outstanding ordinary shares D | 7,504 | 7,178 | 7,504 | 7,178 | 7,546 |
| Number of outstanding preference shares | 12,415 | 11,886 | 12,415 | 11,886 | 12,415 |
1 Comparative figures have been adjusted for the average number of outstanding ordinary shares A and B for the quarter Apr-Jun 2021 and the period Jan-Jun 2021. The adjustment affects the key figure Earnings per ordinary share, A and B.
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.
Lettable area Total area available for letting.
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 The definition of the key figure has been changed in connection with this interim report. Historical figures have been adjusted in line with the new definition.
Calendar
FINANCIAL REPORTS
| Interim Report January–September 2022 | 25 October 2022 |
|---|---|
| Year-end Report, January-December 2022 | 21 February 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 | 30 September 2022 |
|---|---|
| Expected date for dividend to holders of ordinary shares of Class A, B, D and preference shares | 5 October 2022 |
| Record date for dividend to holders of ordinary shares of Class A, B, D and preference shares | 30 December 2022 |
| Expected date for dividend to holders of ordinary shares of Class A, B, D and preference shares | 4 January 2023 |
| Record date for dividend to holders of ordinary shares of Class A, B, D and preference shares | 31 Mars 2023 |
| Expected date for dividend to holders of ordinary shares of Class A, B, D and preference shares | 5 April 2023 |
CONTACT PERSONS:
Eva Landén, CEO, +46 10-482 76 50, [email protected] Lars Norrby, IR, +46 76-777 38 00, [email protected] Anna-Karin Hag, CFO, +46 10-482 76 54, [email protected]
This information is information that Corem Property Group AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Market Act (2007:528). This information was submitted for publication through the agency of the contact persons set out above, at 08.00 CEST on 13 July 2022.
24 COREM – INTERIM REPORT JANUARY–JUNE 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: [email protected], website: www.corem.se Properties for the future.