Corem Property Group — Interim / Quarterly Report 2023

Oct 26, 2023

Interim Report January–September 2023

• » Income amounted to SEK 3,228 million (3,306)
• » Operating surplus increased to SEK 2,250 million (2,233)
• » Net financial income amounted to SEK –1,098 million (–747)
• » Profit from property management amounted to SEK 1,016 million (1,346)
• » Changes in value of properties amounted to SEK –5,823 million (176)
• » Changes in value of derivatives amounted to SEK –81 million (1,458)
• » Profit shares in associated companies amounted to SEK 1,076 million (–139)
• » Net profit for the period amounted to SEK –4,934 million (1,605), corresponding to SEK –4.91 (1.11) per ordinary share of class A and B
• » Net letting was positive and amounted to SEK 90 million for the period
• » The value of investment properties amounted to SEK 66,242 million (78,387)
• » Net asset value (NAV) per ordinary share of class A and B amounted to SEK 20.37 (26.42)

Properties for the future.

Corem Property Group (publ)

Corem is a commercial real estate company focusing on metropolitan cities and growth areas.

Corem owns 361 investment properties with a combined 2,602,000 sq.m. of lettable area valued at SEK 66,242 million. The portfolio is geographically well concentrated, with locally based in-house management.

Corem has a broad customer offering with the focus on long-term sustainable ownership, management, refinement and urban development.

Stockholm

Nyköping

Uppsala

Norrköping

Västerås

Örebro

Linköping

Kalmar

PROFIT FROM PROPERTY MANAGEMENT, SEKm

LOAN TO VALUE, %

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

LETTABLE AREA BY TYPE, %

Office 49% Stock/Logistics 26% Retail 9% Other 16%

PROPERTY VALUE, SEKm

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

January–September 2023

SIGNIFICANT EVENTS DURING THE THIRD QUARTER

• During the quarter, five properties were divested at an underlying property value of SEK 1,105 million. During the nine-month period, a total of 97 properties were divested at an underlying property value of SEK 9,190 million. Effect on profit, including dissolved deferred tax, amounts to approximately SEK 572 million.
• In August, Corem divested a part of the shares in Klövern to Nrep and received a settlement of SEK 1.4 billion. The holding has, with the partial divestment in the quarter, been reclassified from Shares in associated companies to Financial assets valued at fair value.
• In September, Corem redeemed one maturing outstanding bond of SEK 739 million at maturity.

SIGNIFICANT EVENTS AFTER THE END OF THE PERIOD

• In October, Corem redeemed a bond loan of SEK 900 million, of which SEK 796 million was outstanding.
• In October, it was communicated that Corem has four letters of intent regarding divestment of properties at total underlying property values of just over SEK 12 billion. The letters of intent have been considered in the interim report.
• In October, an agreement was signed regarding one of the four letters of intent, regarding the divestment of 24 properties in Stockholm, Jönköping, Malmö and Norrköping, at an underlying property value of SEK 1,160 million.

För definitioner av nyckeltal, se sidan 23 samt corem.se.

4,617 Rental value, SEKm

90 Net letting, SEKm

20.37 Net asset value per ordinary share of class A and B, SEK

66,242 Investment properties. fair value, SEKm

1,016 Profit from property management, SEKm

Strong core business and high transaction activity with focus on strenghtened finances

We are continuing to strengthened finances by reduce debt, mainly through proactive property transactions. At the same time, our core business delivers fine results and among other things we can report a positive net letting of entire SEK 40 million for the quarter.

Corem´s year so far has been marked by efforts to improve our future financial position, combined with very good progress within property management and completion of projects. We can therefore sum up a good quarter, despite concerns about the development within the market around us.

Strong core business

Our core business is strong, with a number of fine lettings during the quarter.

These include Bahnhof who establish new premises with us in Kista, something which also adds to the profile of the area as a technology cluster. We have also been able to communicate lettings in Västberga with its strong logistic location, and in Västerås, agreements have been signed with Aspia and Knightec. Besides new lettings, it is generally the case that most choose to extend their leases as they expire. Also in New York we continue to add new tenants, most recently, with 1 RoundTable Partners in the property 28&7.

Overall we can report a strong net letting of SEK 90 million since the year-end and an entire SEK 40 million for the quarter. Behind the net figure are over 700 signed agreements with a breadth of tenants, and an annual income amounting to SEK 368 million for contracts signed contracts during the year.

Even within our project development activity remains high even if the volumes are significantly lower than last year. To name a few, we have completed new premises for, among others Coop, Systembolaget and Apoteket, and we are working to complete premises for, among others, Riksbanken, Länsstyrelsen, Trafikverket, Academedia and Statens Service Center.

For a comparable portfolio, the net operating income increased by 9 per cent in the period, even though the net operating income on a total level decreased in volume, for natural reasons, as a result of completed divestments. Profit from property management was restrained due to increased market interest rates and amounted, for the period, to SEK 1,016 million.

The city malls Punkt and Gallerian in Västerås were completed during the third quarter after renovations and modernizations. In Punkt, tenant adaptations has been been completed for, among others, Coop and Systembolaget. In Gallerian, a health center and Apoteket have moved in tp new facilities. During the third quarter, two new leases were signed, with Aspia and Knightec, regarding office premises in Gallerian.

The property Orgelpipan 4 at Klarabergsgatan 33–35 in central Stockholm is being completed after remodeling and modernisation. The property is fully let, and during the quarter the Riksbank and the restaurant AMI move into the premises.

Transactions which strengthen us

Our transaction activities have been an important tool in freeing up capital. Overall, since year-end, we have divested or signed agreements on divestment of assets with an aggregate underlying market value of over SEK 13 billion, including transactions to date. These consist mainly of properties for approximately 10.5 billion, including the divestment of 24 properties which was finalised yesterday, but also the divestment of our holding in Castellum and part of our holding in Klövern.

During the third quarter we divested properties with an underlying property value of SEK 1.1 billion, and to date we have signed agreements which have closing after the end of the period of another SEK 1.5 billion.

We still see a functioning market for transactions. In addition to agreed divestments we have also recently been able to communicate letters of intent with serious parties. Included agreed transactions as well as the mentioned letters of intent, we have so far during the year signed more than 25 different deals, with a wide range of buyers and property types.

Altogether, these divestments strengthen our ability to manage the interest rate development and to redeem bonds with maturity in 2024.

Reduced ownership in Klövern

During the quarter, the transaction where we divested part of our holding in the housing development company Klövern to Nrep was completed. This is positive in many ways. The deal ensures Klövern's future development, which is positive also for Corem as we remain a large owner. At the same time, we have freed up liquidity amounting to SEK 1.4 billion through the deal.

The interest rate situation affects values

Like other real estate companies, we see a continued negative trend in the development of value of our properties, where values have decreased by 7 per cent since year-end. We have in total, since the values were at their highest during spring 2022, written down the

value of our portfolio by 12 per cent. The changes in value are mainly driven by changed yield requirement linked to more expensive financing, although positive net letting and a strong development of net operating income holds the negative change in value back to some extent. The average yield requirement has, since the year-end, increased and amounted to 5.5 per cent at the end of the quarter, which is 0.6 per centage points higher than when the values were at their highest, at the end of Q1 2022.

Financial position and future prospects

We continue to strengthen our balance sheet by amortizing bank debt and redeeming bonds. Through the divestments we have made since the turn of the year, we have been able to redeem all bonds maturing in 2023. We have thus been able to reduce the interest-bearing debt from SEK 47,6 billion at the turn of the year to SEK 39,0 billion at the end of the period, among other things by redeeming or repurchasing bonds for SEK 2,3 billion. If we look at the same figure up until today, it is SEK 3,1 billion. We are gradually increasing the proportion of bank financing and have a strong focus on limiting both interest rate risk as well as liquidity risk. Lowering our loan-to-value ratio will continue to be a high priority.

We will continue to reduce the portfolio until we reach a volume which provides us with good stability both in the current market and looking forward. With a somewhat smaller, but still well diversified and attractive portfolio both as regards properties and tenants, a strong organization with competent and driven staff, our position is strong even in challenging times.

Rutger Arnhult, CEO Stockholm 26 October 2023

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 to January–September.

INCOME

Income amounted to SEK 1,007 million (1,114) during the third quarter and SEK 3,228 million (3,306) during the period January–September. The revenue was positively affected by indexation and net letting but decreased due to divestments. Income for a comparable portfolio increased by 10 per cent during the period.

EXPENSES

Property costs amounted to SEK 300 million (363) during the quarter and SEK 978 million (1,073) during the period, where portfolio decreased due to divestments resulted in lower costs. Property costs for a comparable portfolio increased by 10 per cent during the period, mainly depending on increased operating costs.

Central administration expenses amounted to SEK 44 million (46) during the quarter and SEK 136 million (140) during the period.

NET FINANCIAL ITEMS

Net financial income amounted to SEK –357 million (–259) during the quarter. For the period net financial income amounted to SEK –1,098 million (–747) of which the financial expenses amounted to SEK 1,114 million (827). The higher financial costs are due to a higher average interest rate. At the end of the period, the group's average interest rate to 4.6 per cent (3.6). Site leasehold fees and land fees includes in financial income with SEK 57 million (47) for the period.

For further information, refer to page 13.

EARNINGS

Operating surplus amounted to SEK 707 million (751) during the quarter and SEK 2,250 million (2,233) during the period. The operating margin amounted to 70 per cent (67) during the quarter and 70 per cent (68) during the period. The operating surplus for a comparable portfolio increased by 9 per cent during the period.

Profit from property management amounted to SEK 306 million (446) during the quarter and SEK 1,016 million (1,346) during the period.

SHARE OF EARNINGS IN ASSOCIATED COMPANIES

Share of earnings in associated companies amounted to SEK –1 million (–109) during the quarter and SEK –1,076 million (–139) during the period. In August Corem divested, together with ALM Equity and Broskeppet Bostad, 51 per cent of the shares in Klövern to Nrep at a total value of approximately SEK 2.5 billion. For Corem, the deal implied a positive liquidity effect of SEK 1.4 billion, which was obtained during the third quarter and a negative profit effect if approximately SEK 1 billion which was reported during the second quarter.

In connection with the transaction, the remaining holdings in Klövern have been reclassified to Financial assets valued at fair value.

CHANGES IN VALUE Properties

Changes in value for Corem's investment properties amounted, during the period, to SEK –5,823 million (176), of which unrealized value changes amounted to SEK –5,751 million and realized value changes amounted to SEK –72 million. For further information, refer to page 7.

Financial assets

Value changes of financial assets valued at fair value amounted to SEK 93 million (–1,091) during the period. For further information, refer to page 14.

Derivatives

Changes in value of derivatives amounted to SEK –81 million (1,458). The value of the derivatives is affected by changes in market interest rates.

GOODWILL

During the period, impairment of goodwill amounted to SEK –392 million (–388). Impairment refers to goodwill attributable to deferred tax where impairment occurs due to negative unrealized value changes and divestments of properties.

TAXES

During the period, current tax amounted to SEK –46 million (–35). Deferred tax amounted to SEK 1,375 million (278), mainly attributable to dissolution of deferred tax in connection with divestment of properties and negative value changes in the property portfolio.

OTHER COMPREHENSIVE INCOME

Other comprehensive income during the period amounted to SEK 227 million (1,217) and relates to currency conversion differences.

INCOME, SEKm

PROFIT FROM PROPERTY MANAGMENT, SEKm

The property portfolio

PROPERTY VALUES

Corem's portfolio consisted on 30 September 2023 of 361 investment properties, with a total lettable area of 2,602,000 sq.m. and a market value of SEK 66,242 million, in addition to one property (housing project) classified as a current asset.

CHANGES IN VALUE

Value changes in investment properties amounted during the period to SEK –5,823 million (176), corresponding to –7 per cent. Unrealized value changes amounted to SEK –5,751 million and realized value changes to SEK –72 million.

During the third quarter, the values of the investment properties has been adjusted down due to higher yield requirements, while at the same time has positive net letting has had a positive impact. Of the changes in value during the period, 66 per cent refers to properties in Sweden and 34 per cent of the properties abroad.

As at 30 September 2023, the property portfolio is valued at an average assessed dividend yield requirement of 5.5 per cent, campared to 5.2 at year-end 2022. This is an increase of 0.1 per centage points during the quarter and 0.3 points since year-end. Since the end of the year, the property portfolio has devalued by 7 per cent. In total, the value of the property portfolio has been written down 12 per cent since valuations peaked in the end of Q1 2022.

Corem values all properties every quarter, of which 20 to 30 per cent are valued externally. Every property is valued externally at least 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. For a sensitivity analysis and a description of the valuation principles, refer to Corem's annual report for 2022.

PROPERTY TRANSACTIONS

During the period January-September, 97 properties were handed over with an underlying property value of SEK 9,190 million. The profit effect including dissolved tax amounts to approximately SEK 572 million. Reported realized change in value amounts to SEK –72 million and includes transaction costs and in the deals agreed deduction for deferred tax.

Transactions during the quarter

During the quarter, five properties were handed over.

In July, the property Kumlehusvej 1 A outside Copenhagen was handed over with an underlying property value corresponding to SEK 290 million.

In September, the properties Brevduvan 20 and Dahlian 18 in Linköping were handed over with a underlying property value of SEK 240 million.

In August, the property Sicklaön 356:1 in Nacka and the property Kungsängen 24:3 in Uppsala were handed over with an underlying property value of SEK 575 million.

Transactions after the end of the period

Agreements of divestments have been signed for a total of 31 properties with an underlying property value of approximately SEK 1.6 billion. The transactions relate to six separate deals, all are scheduled to be handed over in the fourth quarter of 2023.

TENANTS AND THE LEASE PORTFOLIO

On 30 September 2023, Corem had approximately 3,400 tenants with around 6,000 lease agreements. The annual contract value amounted to SEK 4,090 million (4,417), the rental value to SEK 4,617 million (4,940) and the economic occupancy rate to 89 per cent (89). 36 per cent of the contracted rent expires in 2027 or later. In total, the average remaining contract period was 3.6 years (3.9).

Net letting

Net letting amounted to SEK 40 million (42) during the quarter and SEK 90 million (–30) during the period. In total, lettings and renegotiations amounted to SEK 108 million during the quarter. 44 per cent of this was for new customers and the remaining letting to existing tenants. For the period, lettings and renegotiations amounted to SEK 368 million, of which 59 per cent relates to new customers.

Major lettings

A number of large lease agreements have been signed during the third quarter of the year.

In New York, a 5-year agreement has been signed with the investment company 1 Round Table Partners for 380 sq.m. of the property 28&7. Moving-in is planned for the second quarter of 2024.

In Kista, a 10-year agreement has been signed with Bahnhof Associates for 1,565 sq.m. at the property Gullfoss 3. Movnig-in is planned to take place in the first quarter of 2024.

In Västerås, a 5-year agreement has been signed with Aspia for 659 sq.m. and a 7-year agreement with Knightec for 948 sq.m., both for moving-in to Gallerian. Aspia moved in during the second quarter of 2023 and Knightec plans to move in during the fourth quarter of 2023.

INVESTMENT PROPERTIES: NUMBER, LETTABLE AREA, FAIR VALUE	Jan–Sep 2023	2022
	No	sq.m.	SEKm	SEKm
Total at the start of the year	458	3,194,535	78,387	83,084
Acquisitions	—	—	—	80
Investments in construction, extensions and refurbishment	—	20 421	1,610	2,903
Divestments	–97	–612,689	–8,504	–2,329
Divestments to the associated company Klövern AB	—	—	—	–4,374
Changes in value, unrealised	—	—	–5,751	–2,565
Currency conversion	—	—	500	1,588
Total at the end of the period	361	2,602,258	66,242	78,387

PROPERTY TRANSACTIONS, TRANSFER OF POSSESSION JANUARY – SEPTEMBER 2023

					Lettable area, sq.m.
Quarter	Property	City	Municipality	Property category	Acquisition	Divestment
Q1	Åldermannen 25	Kalmar	Kalmar	Retail	—	8,548
Q1	Kabeln 1	Norrköping	Norrköping	Warehouse/logistics	—	4,887
Q1	Jordbromalm 6:18	Stockholm	Haninge	Warehouse/logistics	—	11,158
Q1	Jordbromalm 5:2 & 5:3	Stockholm	Haninge	Warehouse/logistics	—	6,659
Q1	Ångmaskinen 5	Huddinge	Huddinge	Warehouse/logistics	—	2,622
Q1	Kärra 91:1	Gothenburg	Gothenburg	Warehouse/logistics	—	12,992
Q1	Kullen 5	Malmö	Malmö	Other	—	5,089
Q1	Sadelgjorden 1	Malmö	Malmö	Warehouse/logistics	—	9,095
Q1	Brandholmen 1:9	Nyköping	Nyköping	Warehouse/logistics	—	7,812
Q1	Lansen 13	Nyköping	Nyköping	Office	—	6,370
Q1	Skölden 2	Nyköping	Nyköping	Office	—	2,000
Q1	Gripen 1	Nyköping	Nyköping	Retail	—	1,166
Q1	Skyttbrink 30	Botkyrka	Stockholm	Warehouse/logistics	—	2,896
Q1	Magasinet 6	Älvsjö	Stockholm	Warehouse/logistics	—	8,039
Q1	Magasinet 7	Älvsjö	Stockholm	Warehouse/logistics	—	6,437
Q1	Slipskivan 9	Huddinge	Stockholm	Office	—	912
Q1	Törnby 2:2	Upplands-Väsby	Stockholm	Warehouse/logistics	—	18,807
Q1	Linjalen 65	Täby	Stockholm	Warehouse/logistics	—	1,398
Q1	Linjalen 66	Täby	Stockholm	Warehouse/logistics	—	3,923
Q1	Linjalen 7	Täby	Stockholm	Warehouse/logistics	—	800
Q1	Linjalen 8	Täby	Stockholm	Warehouse/logistics	—	600
Q1	Linjalen 61	Täby	Stockholm	Warehouse/logistics	—	778
Q1	Smygvinkeln 9	Täby	Stockholm	Warehouse/logistics	—	960
Q1	Smygvinkeln 10	Täby	Stockholm	Office	—	930
Q1	Smygvinkeln 12	Täby	Stockholm	Warehouse/logistics	—	1,864
Q1	Lodet 2	Täby	Stockholm	Warehouse/logistics	—	8,518
Q1	Mätstången 2	Täby	Stockholm	Office	—	3,847
Q1	Mallen 3	Täby	Stockholm	Warehouse/logistics	—	1,488
Q1	Tumstocken 8	Täby	Stockholm	Retail	—	2,413
Q1	Induktorn 37	Stockholm	Stockholm	Warehouse/logistics	—	6,685
Q1	Rosersberg 11:151	Sigtuna	Sigtuna	Land	—	—
Q1	Veddesta 2:43	Stockholm	Järfälla	Warehouse/logistics	—	19,271
Q1	1kh Rudegård Ny Holte	Copenhagen	Rudersdal	Office	—	5,341
Q2	Veddesta 2:79	Stockholm	Järfälla	Warehouse/logistics	—	36,342
Q2	Bråta 2:136	Göteborg	Härryda	Warehouse/logistics	—	20,212
Q2	Veddesta 2:90	Stockholm	Järfälla	Warehouse/logistics	—	19,581
Q2	Måseskär 5	Malmö	Malmö	Warehouse/logistics	—	19,255
Q2	Märsta 15:7	Märsta	Sigtuna	Warehouse/logistics	—	17,575
Q2	Bråta 2:150	Gothenburg	Härryda	Warehouse/logistics	—	17,930
Q2	Turbinen 1	Västerås	Västerås	Warehouse/logistics	—	17,757
Q2	Brämön 4	Malmö	Malmö	Warehouse/logistics	—	14,262
Q2	Backa 30:4	Gothenburg	Gothenburg	Warehouse/logistics	—	10,375
Q2	Jordbromalm 6:89	Stockholm	Haninge	Warehouse/logistics	—	9,986
Q2	Håltsås 1:17	Gothenburg	Härryda	Warehouse/logistics	—	9,278
Q2	Backa 22:17	Gothenburg	Gothenburg	Warehouse/logistics	—	8,803
Q2	Stridsyxan 4	Malmö	Malmö	Warehouse/logistics	—	8,522
Q2	Högsbo 16:16	Gothenburg	Gothenburg	Warehouse/logistics	—	8,336
Q2	Anoden 2 & 5	Stockholm	Huddinge	Warehouse/logistics	—	8,336
Q2	Solsten 1:117	Gothenburg	Härryda	Warehouse/logistics	—	7,015
Q2	Stridsyxan 5	Malmö	Malmö	Warehouse/logistics	—	6,171
Q2	Stiglädret 11	Malmö	Malmö	Warehouse/logistics	—	5,993
Q2	Kobbegården 155:2	Gothenburg	Gothenburg	Warehouse/logistics	—	5,943
Q2	Högsbo 38:3	Gothenburg	Gothenburg	Warehouse/logistics	—	5,246
Q2	Kallhäll 9:36	Stockholm	Järfälla	Warehouse/logistics	—	5,150
Q2	Veddesta 2:63	Stockholm	Järfälla	Warehouse/logistics	—	4,896

					Lettable area, sq.m.
Quarter	Property	City	Municipality	Property category	Acquisition	Divestment
Q2	Veddesta 2:31	Stockholm	Järfälla	Warehouse/logistics	—	4,836
Q2	Stångbettet 15	Malmö	Malmö	Warehouse/logistics	—	3,943
Q2	Skälby 3:1321	Stockholm	Järfälla	Warehouse/logistics	—	3,656
Q2	Flahult 21:14	Jönköping	Jönköping	Warehouse/logistics	—	3,526
Q2	Backa 25:6	Gothenburg	Gothenburg	Warehouse/logistics	—	3,360
Q2	Skälby 3:674	Stockholm	Järfälla	Warehouse/logistics	—	3,271
Q2	Skälby 3:1431	Stockholm	Järfälla	Warehouse/logistics	—	2,665
Q2	Skälby 3:1452	Stockholm	Järfälla	Warehouse/logistics	—	2,417
Q2	Viby 19:54	Stockholm	Upplands-Bro	Warehouse/logistics	—	2,038
Q2	Viby 19:53	Stockholm	Upplands-Bro	Warehouse/logistics	—	2,022
Q2	Skälby 3:676	Stockholm	Järfälla	Office	—	1,924
Q2	Skälby 3:1446	Stockholm	Järfälla	Office	—	1,844
Q2	Koborg 2	Stockholm	Botkyrka	Warehouse/logistics	—	1,548
Q2	Fabrikören 6	Stockholm	Stockholm	Warehouse/logistics	—	1,440
Q2	Skälby 3:1418	Stockholm	Järfälla	Office	—	1,343
Q2	Viby 19:32	Stockholm	Upplands-Bro	Warehouse/logistics	—	1,189
Q2	Skyttbrink 36	Stockholm	Botkyrka	Warehouse/logistics	—	860
Q2	Fabrikatet 1	Nyköping	Nyköping	Warehouse/logistics	—	—
Q2	Fabrikatet 4	Nyköping	Nyköping	Warehouse/logistics	—	—
Q2	Fabrikatet 5	Nyköping	Nyköping	Warehouse/logistics	—	—
Q2	Förbygeln 1	Malmö	Malmö	Warehouse/logistics	—	5,146
Q2	Gumsen 31	Kalmar	Kalmar	Warehouse/logistics	—	25,192
Q2	Koljan 24	Kalmar	Kalmar	Education/health care/other	—	5,781
Q2	Fredriksdal 1	Kalmar	Kalmar	Education/health care/other	—	3,498
Q2	Apotekaren 20	Kalmar	Kalmar	Retail	—	1,871
Q2	Tenngjutaren 1	Kalmar	Kalmar	Office	—	1,588
Q2	Mästaren 28	Kalmar	Kalmar	Retail	—	1,348
Q2	Lärlingen 5	Kalmar	Kalmar	Office	—	4,574
Q2	Gumsen 41	Kalmar	Kalmar	Office	—	2,042
Q2	Timotejen 1	Kalmar	Kalmar	Retail	—	1,552
Q2	Rybsen 1	Kalmar	Kalmar	Office	—	1,112
Q2	Sävenäs 169:1	Gothenburg	Partille	Warehouse/logistics	—	7,653
Q2	Ugglum 7:117	Gothenburg	Partille	Warehouse/logistics	—	3,320
Q2	Greve	Copenhagen	Greve	Warehouse/logistics	—	13,412
Q2	Märsta 24:8	Märsta	Sigtuna	Office	—	1,141
Q3	Sicklaön 356:1	Stockholm	Nacka	Retail	—	11,348
Q3	Kungsängen 24:3	Uppsala	Uppsala	Retail	—	6,361
Q3	Brevduvan 20	Linköping	Linköping	Office	—	4,211
Q3	Dahlian 18	Linköping	Linköping	Retail	—	4,686
Q3	Kumlehusvej 1A	Copenhagen	Roskilde	Warehouse/logistics	—	23,711
TOTAL SQ.M.					—	612,698

NET LETTING, SEKm

CONTRACT STRUCTURE, SEKm

PROJECT DEVELOPMENT

Corem's project development take place mainly in connection with new lettings and to adapt and modernize premises, thereby increasing the rental value. In the case of larger projects such as new construction and Corem prioritizes major renovations in the current market situation completion of construction started projects.

During the period, SEK 1,610 million (1,959) was invested in the property portfolio for new construction, extensions and refurbishments. As at 30 September 2023, the remaining investment volume attributable to all ongoing projects amounted to SEK 1,193 million (2,389). As at 30 September, there were altogether six ongoing projects with an estimated investment exceeding SEK 50 million each. The total area-based occupancy rate in the projects amounts to 65 per cent. The projects combined comprise 51,461 square metres and a remaining investment of SEK 755 million.

Corem has a housing project in process, K1 Nacka Strand, consisting of 60 apartments with a total habitable area (BOA) of 3,700 sq.m. The project is divided into stages for sales where 50 of the 54 apartments offered on the market have been sold. The remaining 6 of the 60 are not yet up for sale. Moving-in is expected to start during the fourth quarter of 2023.

Commercial projects in Sweden

In Västerås, the refurbishment of two city malls were completed during the third quarter. In the Punkt mall, tenant adaptations have been made for, among others, Coop and Systembolaget, who moved in during the quarter. In Gallerian, a health center and Apoteket have moved into their new premises. Two new leases were signed during the quarter with Aspia and Knightec regarding office premises in the Mall.

In Uppsala Business Park, a new advanced lab building is being built under the name Research Hub, which is aimed at small- and medium-sized research companies. The project was completed during the third quarter.

In central Stockholm tenant customization of the property Orgelpipan 4 on Klarabergsgatan is in process, and is fully let. Sveriges Riksbank and the restaurant AMI will move in during the fourth quarter 2023.

In Västberga in southern Stockholm, projects are underway in the properties Nattskiftet 12 and 14. A new parking garage with four floors in Nattskiftet 12 is now being completed and in Nattskiftet 14 office premises are being renovated.

In Örebro, the second stage is in process of the construction of Örebro Entré, refurbishment and extension of a total of approximately 10,200 sq.m. of a former postal sorting office. An agreement has been signed with the Swedish Transport Administration, Trafikverket, and the Örebro county administrative board.

In Nyköping, a school is being constructed for AcadeMedia. The school is being built at the same place close to the centre where the previous school burnt down. Moving-in is expected to take place during the fourth quarter of 2024.

Commercial projects in New York

Corem owns four project properties in Manhattan in New York. The projects, 1245 Broadway and 28&7 both new construction of high-quality office buildings, are nearing completion. In both properties, the exterior has now been completed and interior tenant adaptations are underway apace with tenants moving in.

As at 30 September, twelve lease agreements had been signed, which corresponds to an area-based occupancy rate of 57 per cent at 1245 Broadway and 31 per cent at 28&7.

As at 30 September 2023, the total contract value of the leases amounted to USD 13.6 million corresponding to SEK 150 million, or just over SEK 12,000/sq.m.

The project portfolio also includes two planned projects in New York: the new construction of offices at 417 Park Avenue, encompassing 33,000 sq.m., and at 118 10th Avenue, encompassing 13,200 sq.m. Preliminary planning is underway and construction is planned to start at the earliest in 2024.

The properties 1245 Broadway and 118 10th Avenue have land lease agreements; right-of-use assets and leasing liabilities are recorded in the balance sheet.

COREM'S LARGEST ONGOING 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 York	1245 Broadway 1	New construction, office premises	9,711	17,115	1,936	408	224	24Q2
New York	28&7 1	New construction, office premises	2,792	9,003	960	150	102	24Q2
	Stockholm Orgelpipan 4	Refurbishment, office premises	4,240	4,240	344	45	34	23Q4
		Stockholm Nattskiftet 12 & 14 New construction, garage and refurbishment, office premises	7,425	8,168	153	25	6	24Q2
Örebro	Olaus Petri 3:234	Refurbishment and extension and office premises for Trafikverket and Länssty relsen. Phase 2	6,508	10,200	198	58	17	24Q2
Nyköping	Furan 2	Construction of school	2,735	2,735	77	69	8	24Q4
TOTAL			33,411	51,461	3,668	755	391

1) Estimated and remaining investment of projects in New York are based on the SEK/USD-rate on 30 September 2023.

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.	Project start, year	Expected to be completed, year
Stockholm	Nacka	K1 Nacka Strand	60	50	83	5,000	3,700	2021	2023
TOTAL			60	50	83	5,000	3,700

Gullfoss 3, Kista

Letting. In Kista, a 10-year agreement has been signed with Bahnhof of approximately 1,600 sq.m. Move-in is planned for the first quarter of 2024.

Orgelpipan 4, Stockholm

Ongoing project. Klarabergsgatan 33–35. The Riksbank and the restaurant AMI are moving in during the fourth quarter of 2023.

Aprikosen 2, Solna

Letting. In Sätra, Stockholm, a 5-year agreement has been signed with Secub of approximately 900 sq.m. with move-in during the third quarter

Örebro Entré, Örebro

Ongoing project. The second and last phase is estimated to be completed during the second quarter of 2024.

Furan 2, Nyköping

Ongoing project. Reconstruction of a school that is estimated to be completed during the fourth quarter of 2024.

1245 Broadway, New York Ongoing project. Exterior completed, moving in takes place in parallel with ongoing tenant adaptations.

28&7, New York Letting in ongoing projects. During the third quarter, a 5-year agreement signed with 1 RoundTable Partners regarding 380 sq.m. Move-in is planned for the second quarter of 2024.

DISTRIBUTION BY GEOGRAPHICAL AREA

Corem's property portfolio and operating activities are divided into geographical regions: Region Stockholm, Region Stockholm Logistics, Region West and Region East.

Region Stockholm Logistics and Region Stockholm together consists of the business activities in Stockholm, Uppsala and Västerås.

Region West consists of the cities of Gothenburg, Malmö, Halmstad and Borås. 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
	2023 Jan–Sep	2022 Jan–Sep	2023 Jan–Sep	2022 Jan–Sep	2023 Jan–Sep	2022 Jan–Sep	2023 Jan–Sep	2022 Jan–Sep	2023 Jan–Sep	2022 Jan–Sep
Region Stockholm	1,372	1,304	–473	–502	899	802	66	62	422	615
Region Stockholm Logistics	317	472	–93	–137	224	335	71	71	123	221
Region East	648	644	–191	–203	457	441	71	69	227	342
Region West	582	638	–180	–208	402	430	69	67	138	281
International – Copenhagen	232	215	–24	–11	208	204	90	95	28	15
International – New York	77	33	–17	–12	60	21	78	64	672	485
Total	3,228	3,306	–978	–1,073	2,250	2,233	70	68	1,610	1,959
Investment portfolio	3,027	3,142	–886	–964	2,141	2,178	71	69	592	1,102
Development portfolio	201	164	–92	–109	109	55	54	34	1,018	857
Total	3,228	3,306	–978	–1,073	2,250	2,233	70	68	1,610	1,959

KEY FIGURES PER GEOGRAPHIC AREA

	No. of properties		Fair value, SEKm		Rental value, SEKm		Economic occupancy rate, %		Lettable area, 000 sq.m.
	2023 30 Sep	2022 30 Sep	2023 30 Sep	2022 30 Sep	2023 30 Sep	2022 30 Sep	2023 30 Sep	2022 30 Sep	2023 30 Sep	2022 30 Sep
Region Stockholm	96	108	28,107	30,990	2,117	2,025	86	85	966	1,010
Region Stockholm Logistics	55	94	4,324	9,555	357	661	94	95	239	483
Region East	96	123	10,576	11,858	894	931	92	89	687	788
Region West	103	133	9,613	13,058	838	963	87	89	582	812
International – Copenhagen	7	10	6,430	8,145	290	292	90	95	117	159
International – New York1	4	5	7,192	7,877	121	62	100	100	11	6
Total	361	473	66,242	81,483	4,617	4,934	89	89	2,602	3,258
Investment portfolio	327	433	54,979	68,876	4,230	4,617	89	90	2,405	3,063
Development portfolio	34	40	11,263	12,607	388	317	80	74	198	195
Total	361	473	66,242	81,483	4,617	4,934	89	89	2,602	3,258

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

PROPERTY VALUE, SEK/SQ.M. AND LETTABLE AREA, TSQ.M. SEK/Sq.m. Thousand sq.m. Property value/sq.m. Lettable area 0 5,000 10,000 15,000 20,000 25,000 30,000 23 Q3 16 17 18 19 20 21 22 0 750 1,500 2,250 3,000 3,750 4,500

RENTAL VALUE, SEK/SQ.M.

Financing

INTEREST-BEARING LIABILITIES

On 30 September 2023, interest-bearing liabilities amounted to SEK 39,034 million (47,644). Accrued borrowing overheads amounted to SEK 285 million (171), which entails interest-bearing liabilities in the balance sheet of SEK 38,749 million (47,473).

Corem's interest-bearing liabilities are mainly secured by mortgages and/or shares in subsidiaries. Non-secured interest-bearing liabilities comprise commercial paper and non-secured bonds, which amounted to SEK 50 million (350) and SEK 9,131 million (11,418), respectively, at the end of the quarter. Corem's commercial paper programme has a framework amounting to SEK 5,000 million. Outstanding commercial paper has back-up facilities in the form of unutilized credit facilities in Nordic banks.

The average period of tied-up capital amounted to 3.3 years (3.3). The loan-to-value ratio amounted to 56 per cent (57).

INTEREST-BEARING NET LIABILITIES SEKm	2023 30 Sep	2022 31 Dec
Interest-bearing liabilities	38,749	47,473
Adjustment, accrued borrowing overheads	285	171
Interest-bearing assets	–48	–122
Current investments	–14	–1,104
Cash and cash equivalents	–644	–979
Interest-bearing net liability	38,328	45,439

Bonds

At the end of the period, the Group had SEK 9,131 million in outstanding listed bonds, maturing in 2023 to 2025. There is an unsecured Medium Term Note programme (MTN) with a framework amounting to SEK 10,000 million, within which SEK 4,600 million has been issued.

AVERAGE INTEREST RATE, %

During the quarter, a bond of SEK 739 million has been redeemed. In addition to this, the company has during the quarter purchased bonds with other maturities totalling SEK 99 million.

INTEREST MATURITY STRUCTURE

On 30 September 2023, the average interest rate in the loan portfolio was 4.6 per cent (3.6).

Interest rate swaps and interest rate caps are used to limit the interest rate risk. At the end of the period, Corem had interest rate swaps for a nominal value of SEK 20,202 million (17,790), and interest rate caps for SEK 1,693 million (9,679), which together correspond to 56 per cent of the interest-bearing liabilities. Together with fixed-interest loans, this means that 58 per cent of the interest-bearing liabilities carried fixed interest. 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 1.5–4.5 per cent. On 30 September 2023 the market value of the interest rate derivatives portfolio amounted to SEK 1,222 million net (1,290). Changes in value of derivatives amounted during the quarter to SEK 14 million (123) and during the period to SEK –81 million (1,458).

The average period of fixed interest amounted at the end of the period to 2.3 years (1.9) taking into account derivatives. The interest coverage ratio amounted during the quarter to 2.0 (2.7) multiples and to 2.0 multiples during the last four quarters.

LIQUID FUNDS

On 30 September 2023,liquid funds amounted to SEK 644 million (979). Restricted cash of SEK 133 million has been included in Cash and cash equivalents in accordance with IFRS IC clarification about funds that may only be used for a particular purpose due to an agreement having been entered into with a third party.

ADJUSTED EQUITY RATIO, %

INTEREST COVERAGE RATIO, MULTIPLE

In addition, there were unutilized credit facilities, including backup facilities for outstanding commercial paper, of SEK 2,966 million, of which SEK 2,658 million can be used immediately with existing collateral.

The remaining amount can be used for acquisition of properties as well as to some extent financing ongoing projects. The net interest-bearing debt amounted to SEK 38,328 million (45,439).

RATING

Corem Property Group has a rating at Scope of BBB- with negative outlook. In addition, the subsidiary Corem Kelly has a rating of BBBwith stable outlook.

EQUITY

At the end of the quarter, the Group's equity, attributable to the Parent Company's shareholders, amounted to SEK 25,666 million (31,268) of which SEK 1,300 million refers to hybrid bonds. Equity amounted to SEK 16.97 (22.17) 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. Net asset value (NAV) per ordinary share of class A and B amounted to SEK 20.37 (26.42).

Hybrid bond

Corem, through its subsidiary Corem Kelly, has a perpetual hybrid bond of SEK 1,300 million which runs at a variable interest rate of 3 months Stibor + 8 per centage points margin.

Equity ratio

At the end of the period, the adjusted equity ratio amounted to 39 per cent (39) and the equity ratio to 34 per cent (34).

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

CASH FLOW

The Group's cash flow from operating activities, before changes in working capital, amounted during the quarter to SEK 331 million (459) and SEK 1,075 million (1,375) during the period.

Cash flow from investing activities amounted to SEK 1,528 million (–680) during the quarter and SEK 9,009 million (–948) during the period. Cash flow from financing activities amounted to SEK –1,869 million (–20) during the quarter and SEK –9,693 million (–443) during the period.

SHAREHOLDINGS Corem's holding in Klövern

The holding in Klövern amounted to SEK 1,340 billion at the end of the period and is classified as as Financial assets valued at fair value. The holding has during the quarter been reclassified from Shares in associated companies.

In August, Corem sold, together with ALM Equity and Broskeppet Housing, 51 per cent of the shares in Klövern to Nrep at a total value of approximately SEK 2.5 billion. For Corem, the sale has meant a positive liquidity effect of SEK 1.4 billion, which was received during the third quarter and a negative profit effect of approximately SEK 1 billion, which was reported during the second quarter.

The settlement means that Nrep commits over time to invest through directed issues, which together with usual external financing enables completion of Klövern's project portfolio if approximately 18,000 homes. Nrep's ownership in Klövern will amount to 65 per cent after completed transaction and first issue on 1 SEK billion. After that, Corem's ownership will amount to 17 per cent. The owners will then be offered the opportunity to retain their ownership stake by participating in future issues.

Other holdings

In January, Corem sold its holding in Castellum at a value of SEK 1,190 million. The sale entails a positive effect on profit for the period of SEK 90 million.

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 1	18,247	—	—	—	—
20232	—	3,335	2,953	796	382
2024	4,585	13,805	12,921	5,635	884
2025	4,490	13,321	12,821	2,700	500
2026	—	3,719	2,519	—	1,200
2027	1,304	341	341	—	—
Later	10,408	7,479	7,479	—	—
Total	39,034	42,000	39,034	9,131	2,966

1) Of the floating volume, SEK 1,693 million is covered by the interest rate cap.

2) Loans corresponding to an amount of SEK 3,015 million have been refinanced or repaid after the end of the quarter.

BOND OVERVIEW 2023-09-301

Type	Issued	Maturity	Issuer	Outstanding volume, SEKm	Issue spread over 3-month Stibor, %
Green unsecured2	May-21	Nov-23	Corem	796	2.50
Green unsecured MTN 201	Oct-20	Apr-24	Kelly	1,900	3.25
Green unsecured	Oct-20	Apr-24	Corem	1,385	3.50
Green unsecured	Jan-22	Oct-24	Corem	2,350	2.75
Green unsecured MTN 202	Feb-21	Feb-25	Kelly	2,500	3.25
Unsecured MTN 204	Mar-21	Sep-25	Kelly	200	3.50

1) Bonds issued by Corem Property Group and the subsidiary company Corem Kelly AB.

2) Bond loans maturing in November 2023 were redeemed of the entire outstanding amount of SEK 796 million at the beginning of October 2023.

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 2023, there were altogether 1,137,283,281 shares in Corem, 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. Each 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

Corem did not repurchase any of its own shares during the third quarter. As at 30 September 2023, Corem held 2,913,825 repurchased shares of class A, 35,691,000 repurchased shares of class B and 42,000 repurchased ordinary shares of class D. The total market value at that time amounted to SEK 242 million. The shares are 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.

CONVERSION OF CLASS A ORDINARY SHARES

In February and August each year, holders of ordinary shares of class A have the right to request that the share be converted into ordinary shares of class B. No request for conversion of shares was received during the first or second conversion period in 2023.

The property Helgafjäll 2 in Kista, Stockholm.

STOCK FACTS, 30 SEPTEMBER 2023
Market capitalization	SEK 10.2 bn
Market place	Nasdaq Stockholm, Large Cap
LEI no.	213800CHXQQD7TSS1T59
No. of shareholders	47,091
Ordinary share, Class A
No. of shares	93,730,797
Closing price	SEK 6.68
ISIN	SE0010714279
Ordinary share, Class B
No. of shares	1,023,591,380
Closing price	SEK 6.06
ISIN	SE0010714287
Ordinary share, Class D
No. of shares	7,545,809
Closing price	SEK 157.40
ISIN	SE0015961594
Preference share
No. of shares	12,415,295
Closing price	SEK 178 .00
ISIN	SE0010714311

DIVIDEND PER ORDINARY SHARE A/B, SEK

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

LARGEST SHAREHOLDERS – 30 SEPTEMBER 2023

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 companies1	35,799	388,987	3,274	—	37.64	39.16
Gårdarike1	39,393	100,763	62	19	12.33	25.82
Handelsbanken fonder	—	77,219	97	—	6.80	4.04
Länsförsäkringar fondförvaltning	—	42,395	—	—	3.73	2.21
State Street Bank & Trust Co	—	40,340	14	102	3.56	2.11
Swedbank Robur fonder	1,593	9,750	—	—	1.00	1.34
JP Morgan Chase Bank N.A.	—	25,378	—	227	2.25	1.34
Avanza Pension	233	14,942	319	1,677	1.51	1.01
CBNY Norges Bank	—	18,100	—	—	1.59	0.94
Fredrik Rapp privat och via bolag	750	9,500	—	—	0.90	0.89
AMF TJÄNSTEPENSION AB	—	15,930	—	—	1.40	0.83
Prior & Nilsson	—	14,900	—	—	1.31	0.78
Livförsäkringsbolaget Skandia, Ömsesidigt	665	5,303	—	0	0.52	0.62
SEB Life International	1,110	507	35	10	0.15	0.61
Patrik Tillman private and via companies	571	5,723	77	—	0.56	0.60
Other shareholders	10,703	218,163	3,625	10,380	21.36	17.70
TOTAL OUTSTANDING SHARES	90,817	987,900	7,504	12,415	96.60	100.00
Repurchased own shares2	2,914	35,691	42	0	3.40
TOTAL REGISTERED SHARES	93,731	1,023,591	7,546	12,415	100.00	100.00

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

2) Repurchased shares have no voting rights and are not entitled to dividend.

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 carrying amounts. The same applies to the Parent Company. No changes of the categorization of financial instruments have taken place during the period. Financial assets valued at fair value, which are listed in a market, are valued in accordance with Level 1 of the valuation hierarchy while the holding in Klövern AB is not listed accordingly with level 3 in the value hierarchy. The holding in Klövern AB is valued according to discounted cash flows. Derivatives are valued in accordance with Level 2 of the valuation hierarchy.

No new or changed standards or interpretations from the IASB have had any material impact on the Interim Report and the accounting policies applied are those described in Note 1 of Corem's Annual Report for 2022.

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 selected 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. Sustainability data is reported on the website.

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.

At the end of the period, the Group had 315 employees. 47 per cent of the employees were women.

Corem has its registered office in Stockholm, where the head office is also located.

RISKS

Corem has a continuous process to identify the material risks that may affect the Company's financial position and earnings. Main risks are change in value of properties, business cycle 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 2022.

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 intra-Group interest rates.

Transactions with Wästbygg amounted during the period till SEK 43 million (21). Wästbygg is an associated company of M2-Gruppen, which is controlled by Rutger Arnhult. Corem has also an agreement for letting from the M2-Gruppen, with an annual contract value of SEK 1 million. In addition, the Corem Group has during the period purchased legal services from Walthon Advokater, in which the Chairman of the Group Patrik Essehorn is a share holder, for an amount of SEK 13 million (9).

THE PARENT COMPANY

The parent company's business consists of the sale of management services for the group's subsidiaries as well as strategic management and administration for the company's listing on Nasdaq Stockholm. Net sales amounted to SEK 402 million (413). The period's result amounted to SEK 107 million (133). Interest-bearing liabilities amounted to SEK 7,743 million (7,981), of which to large part is lent to other group companies.

DIVIDEND

During the first and second quarter, a dividend of SEK 0.10 per ordinary share of class A and B, and SEK 5.00 per ordinary share of class D, in total SEK 622 million, has been paid.

SIGNIFICANT EVENTS AFTER THE END OF THE PERIOD

In October, Corem redeemed a bond loan of SEK 900 million, of which SEK 796 million was outstanding.

In October, Corem signed four separate letters of intent to divest properties, at a total underlying property value of approximately SEK 12 billion. The properties are located in Sweden and Copenhagen, and consist mainly of office premises. At agreed divestments, the first transfer of possession is expected to be made at the end of November 2023 while the last transfer of possession is expected to be made during April 2024.

In October, an agreement was signed regarding one of the four letters of intent, regarding the divestment of 24 properties in Stockholm, Jönköping, Malmö and Norrköping, at an underlying property value of SEK 1,160m.

Stockholm, 26 October 2023

Board of Directors of Corem Property Group AB (publ)

This report has been reviewed by the company's auditor.

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 2023 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, 26 October 2023 Ernst & Young AB

Katrine Söderberg Authorized Public Accountant

The Consolidated Income Statement in brief

SEKm	2023 3 months Jul–Sep	2022 3 months Jul–Sep	2023 9 months Jan–Sep	2022 9 months Jan–Sep	2022/2023 Rolling 12 months Oct–Sep	2022 12 months Jan–Dec
Income	1,007	1,114	3,228	3,306	4,413	4,491
Property costs	–300	–363	–978	–1,073	–1,463	–1,558
Net operating income	707	751	2,250	2,233	2,950	2,933
Central administration	–44	–46	–136	–140	–183	–187
Net financial items	–357	–259	–1,098	–747	–1,422	–1,071
Profit from property management	306	446	1,016	1,346	1,345	1,675
Share of earnings in associated companies	–1	–109	–1,076	–139	–1,799	–862
Value changes, properties	–2,912	–565	–5,823	176	–8,933	–2,934
Value changes, financial assets	30	–77	93	–1,091	79	–1,105
Value changes, derivatives	14	123	–81	1,458	–164	1,375
Impairment, goodwill	–188	–78	–392	–388	–639	–635
Profit before tax	–2,751	–260	–6,263	1,362	–10,111	–2,486
Tax	546	42	1,329	243	1,634	548
Net profit for the period	–2,205	–218	–4,934	1,605	–8,477	–1,938
Net profit for the year attributable to:
Parent Company shareholders	–2,189	–219	–4,902	1,565	–8,415	–1,948
Holdings without controlling influence	–16	1	–32	40	–62	10
	–2,205	–218	–4,934	1,605	–8,477	–1,938

Consolidated Report of Comprehensive Income in brief

SEKm	2023 3 months Jul–Sep	2022 3 months Jul–Sep	2023 9 months Jan–Sep	2022 9 months Jan–Sep	2022/2023 Rolling 12 months Oct–Sep	2022 12 months Jan–Dec
Net profit for the year	–2,205	–218	–4,934	1,605	–8,477	–1,938
Other comprehensive income
Currency conversion difference for international operations	–146	518	227	1,217	–48	942
Other comprehensive income after tax	–146	518	227	1,217	–48	942
NET COMPREHENSIVE INCOME FOR THE YEAR	–2,351	300	–4,707	2,822	–8,525	–996
Net comprehensive income attributable to:
Parent Company shareholders	–2,335	299	–4,675	2,772	–8,463	–1,016
Holdings without controlling influence	–16	1	–32	50	–62	20
	–2,351	300	–4,707	2,822	–8,525	–996
Earnings per share
Earnings per ordinary share of Class A and B, SEK	–2.16	–0.32	–4.91	1.11	–8.28	–2.25
No. of outstanding shares, thousands
Ordinary shares A and B, at the end of period	1,078,717	1,078,717	1,078,717	1,078,717	1,078,717	1,078,717
Ordinary shares A and B, average number	1,078,717	1,079,738	1,078,717	1,082,132	1,078,717	1,081,271
Ordinary shares D, at end of period	7,504	7,504	7,504	7,504	7,504	7,504
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	2023 30 Sep	2022 30 Sep	2022 31 Dec
ASSETS
Non-current assets
Goodwill	1,982	2,620	2,374
Investment properties	66,242	81,483	78,387
Right-of-use assets	1,604	995	1,623
Shares in associated companies	0	4,143	3,415
Financial assets valued at fair value	1,354	1,177	5
Derivatives	1,232	1,396	1,312
Other non-current assets	152	175	232
Total non-current assets	72,566	91,989	87,348
Current assets
Properties classified as current assets	269	155	206
Current assets	—	—	1,099
Other current assets	1,072	1,282	1,230
Cash and cash equivalents	644	374	979
Total current assets	1,985	1,811	3,514
TOTAL ASSETS	74,551	93,800	90,862
EQUITY AND LIABILITIES
Equity attributable to parent company shareholders	25,666	35,081	31,268
Equity attributable to holdings without controlling influence	11	73	43
Total shareholders' equity	25,677	35,154	31,311
Long-term liabilities
Interest-bearing liabilities	24,933	35,841	32,745
Leasing liabilities	1,604	995	1,623
Deferred tax liability	6,183	7,866	7,562
Derivatives	10	23	22
Other liabilities	41	44	43
Total long-term liabilities	32,771	44,769	41,995
Current liabilities
Interest-bearing liabilities	13,816	11,612	14,728
Other liabilities	2,287	2,265	2,828
Total current liabilities	16,103	13,877	17,556
Total liabilities	48,874	58,646	59,551
TOTAL EQUITY AND LIABILITIES	74,551	93,800	90,862

Consolidated statement of cash flow in brief

SEKm	2023 3 months Jul–Sep	2022 3 months Jul–Sep	2023 9 months Jan–Sep	2022 9 months Jan–Sep	2022/2023 Rolling 12 months Oct–Sep	2022 12 months Jan–Dec
Operating activities
Net operating income	707	751	2,250	2,233	2,950	2,933
Central administration	–44	–46	–136	–140	–183	–187
Depreciation, etc.	6	8	18	20	24	26
Interest received, dividend etc.	12	19	20	39	40	59
Interest paid, etc.	–332	–254	–1,012	–768	–1,301	–1,057
Interest expense, lease contracts attributable to site lease hold contracts	–19	–16	–57	–47	–73	–63
Income tax paid	1	–3	–8	–10	–11	–13
Cash flow from operating activities before changes in working capital	331	459	1,075	1,327	1,446	1,698
Change in properties classified as current assets	–13	–20	–63	–91	–115	–143
Change in current receivables	229	110	116	67	187	138
Change in current liabilities	–111	26	–781	–162	–80	539
Cash flow from operating activities	436	575	347	1,141	1,438	2,232
Investing activities
Investments in new constructions, extensions and refurbishment	–516	–749	–1,610	–1,959	–2,554	–2,903
Acquisition of investment properties	—	—	—	–80	—	–80
Divestment of investment properties	690	526	8,045	1,686	8,632	2,273
Divestment of shareholdings	—	—	1,190	—	1,212	22
Divestment of shares in associated companies	1,353	—	1,383	—	1,383	—
Received cash and cash equivalents, partial divestment group co:s	—	—	—	8	—	8
Acquisition holdings without controlling influence	—	–456	—	–575	—	–575
Change in other non-current assets	1	–1	1	–28	–10	–39
Cash flow from investing activities	1,528	–680	9,009	–948	8,663	–1,294
Financing activities
Dividend paid to parent company shareholders	–207	–211	–622	–419	–830	–627
Hybrid bonds, interest Repurchase of own shares	–39 —	–23 –28	–98 —	–62 –121	–123 —	–87 –121
Loans raised	3,504	1,282	8,276	13,320	9,033	14,077
Amortised loans	–5,127	–1,040	–17,249	–13,161	–17,913	–13,825
Cash flow from financing activities	–1,869	–20	–9,693	–443	–9,833	–583
Cash flow for the period	95	–125	–337	–250	268	355
Cash and cash equivalents at beginning of period	555	484	979	571	374	571
Exchange rate difference in cash and cash equivalents	–6	15	2	53	2	53
Cash and cash equivalents at end of period	644	374	644	374	644	979

Consolidated change in equity in brief

SEKm	Parent Company shareholders	Holdings without controlling influence	Total
Opening equity, 01.01.2023	31,268	43	31,311
Comprehensive income for the period	–2,340	–16	–2,356
Dividend	–830	—	–830
Hybrid bonds	–59	—	–59
Equity, 30.06.2023	28,039	27	28,066
Comprehensive income for the period	–2,335	–16	–2,351
Hybrid bonds	–39	—	–39
Equity, 30.09.2023	25,666	11	25,677

Parent Company Income Statement in brief

SEKm	2023 9 months Jan–Sep	2022 9 months Jan–Sep	2022 12 months Jan–Dec
Net sales	402	413	559
Cost of services sold	–268	–274	–372
Gross profit	134	139	187
Central administration	–134	–140	–187
Operating profit	0	–1	0
Earnings from shares in group companies	329	369	781
Earnings from shares in current assets	—	50	–426
Interest income and similar income statement items	169	133	200
Interest expense and similar income statement items	–391	–464	–466
Net financial items	107	88	89
Other comprehensive income	—	—	117
Comprehensive income for the period	107	88	206
Skatt	0	45	–6
Periodens resultat	107	133	200

Parent Company Balance Sheet in brief

SEKm	2023 30 Sep	2022 30 Sep	2022 31 Dec
ASSETS
Other intangible non-current assets	6	2	4
Machinery and equipment	6	9	8
Shares in group companies	22,686	22,686	22,686
Other financial non-current assets	—	1,706	—
Receivables from group companies	7,913	7,624	7,554
Deferred tax receivable	0	51	—
Short-term investments	—	—	1,190
Other current receivables	25	50	47
Cash and cash equivalents	156	7	54
TOTAL ASSETS	30,792	32,135	31,543
EQUITY AND LIABILITIES
Equity	22,242	22,898	22,965
Interest-bearing liabilities	7,743	8,447	7,981
Non-interest-bearing liabilities	807	790	597
TOTAL EQUITY AND LIABILITIES	30,792	32,135	31,543

Key figures

	2023 3 months Jul–Sep	2022 3 months Jul–Sep	2023 9 months Jan–Sep	2022 9 months Jan–Sep	2022 12 months Jan–Dec
Property-related
Fair value of investment properties, SEKm	66,242	81,483	66,242	81,483	78,387
Yield requirement, valuation, %	5.5	5.0	5.5	5.0	5.2
Rental value, SEKm	4,617	4,934	4,617	4,934	4,940
Lettable area, sq.m.	2,602,258	3,257,990	2,602,258	3,257,990	3,194,535
Economic occupancy rate, %	89	89	89	89	89
Area-based occupancy rate, %	80	83	80	83	83
Operating margin, %	70	67	70	68	65
No. of investment properties	361	473	361	473	458
Average remaining lease contract period, years	3.6	3.9	3.6	3.9	3.9
Financial
Return on equity, %	–31.3	–2.5	–23.0	6.1	–6.0
Adjusted equity ratio, %	39	42	39	42	39
Equity ratio, %	34	37	34	37	34
Interest-bearing net liability, SEKm	38,328	45,956	38,328	45,956	45,439
Loan-to-value ratio, %	56	54	56	54	57
Loan-to-value ratio, properties, %	45	42	45	42	45
Interest coverage ratio, multiple	1.9	2.6	2.0	2.7	2.5
Average interest rate, %	4.6	3.2	4.6	3.2	3.6
Average period of fixed interest, years	2.3	2.2	2.3	2.2	1.9
Average period of tied-up capital, years	3.3	3.5	3.3	3.5	3.3
Share-related
Profit from property management per ordinary share A and B, SEK	0.16	0.30	0.57	0.91	1.10
Earnings per ordinary share, A and B, SEK1)	–2.16	–0.32	–4.91	1.11	–2.25
Net asset value (NAV) per ordinary share A and B, SEK	20.37	29.93	20.37	29.93	26.42
Equity per ordinary share A and B, SEK	16.97	25.70	16.97	25.70	22.17
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	6.68	10.40	6.68	10.40	10.45
Share price ordinary share B, SEK	6.06	8.38	6.06	8.38	8.39
Share price ordinary share D, SEK	157.40	196.40	157.40	196.40	170.60
Share price preference share, SEK	178.00	214.00	178.00	214.00	211.50
No. of shares, thousands
Number of outstanding ordinary shares A and B	1,078,717	1,078,717	1,078,717	1,078,717	1,078,717
Average number of outstanding ordinary shares A and B1)	1,078,717	1,079,738	1,078,717	1,082,132	1,081,271
Number of outstanding ordinary shares D	7,504	7,504	7,504	7,504	7,504
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 (https://www.corem.se/en/investor-relations/definitions-en/). 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 issueprice.

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, 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)

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, the holding in Klövern 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 Parent Company's shareholders.

Calendar

FINANCIAL REPORTS

Year-end report 2023	21 February 2024
Annual report and sustainability report 2023	Week 13 2024
Interim report January–March 2024	23 April 2024
Annual General Meeting 2024	23 April 2024
Interim report January–June 2024	12 July 2024
Interim report January–September 2024	24 October 2024

DIVIDEND: PROPOSED RECORD DATES AND DIVIDEND PAYMENT DATES

Record date for dividend on ordinary shares of class A, B, D and preference shares	29 December 2023
Expected payment date for dividend on ordinary shares of class A, B, D and preference shares	4 January 2024
Record date for dividend on ordinary shares of class A, B, D and preference shares	28 March 2024
Expected payment date for dividend on ordinary shares of class A, B, D and preference shares	4 April 2024

CONTACT PERSONS:

Rutger Arnhult, CEO, +46 70 458 24 70, rutger.arnhult@corem.se Eva Landén, Deputy CEO, +46 10 482 76 50, eva.landen@corem.se

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 person, set out above at 08.00 CEST on 26 October 2023.

24 COREM – INTERIM REPORT JANUARY–SEPTEMBER 2023

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 E-mail: info@corem.se, website: www.corem.se

Properties for the future.