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Corem Property Group Interim / Quarterly Report 2024
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Interim / Quarterly Report
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Interim Report
January–March 2024
Properties for the future.
corem
Corem Property Group (publ)
Corem is a commercial real estate company with focus on sustainable ownership, management and refinement of real estate. The properties are managed in-house and locally – giving proximity to the tenant, a long-term perspective and high commitment. The portfolio is geographically well focused, located in metropolitan areas and growth regions.
315
investment properties
56,533
investment properties.
fair value, SEKm
2,387
Lettable area, tsq.m
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 25%
Retail 10%
Other 16%
PROPERTY VALUE, SEKm
COREM - INTERIM REPORT JANUARY-MARCH 2024
January–March 2024
- Income amounted to SEK 940 million (1,172)
- Operating surplus amounted to SEK 578 million (789)
- Net financial income amounted to SEK –320 million (–387)
- Profit from property management amounted to SEK 215 million (356)
- Changes in value of properties amounted to SEK –484 million (–1,505)
- Changes in value of derivatives amounted to SEK 135 million (–231)
- Net letting amount to SEK 49 million
- Profit/loss for the period amounted to SEK –158 million (–911), corresponding to SEK –0.28 (–0.95) per ordinary share of class A and B
- The value of investment properties amounted to SEK 56,533 million (58,033)
- Net asset value (NAV) per ordinary share of class A and B amounted to SEK 17.46 (17.57)
SIGNIFICANT EVENTS DURING THE FIRST QUARTER
- During the quarter, 11 properties were divested with a combined underlying property value of SEK 1.7 billion.
- Unsecured green bonds of SEK 1,000 million were issued in January and SEK 100 million in February. The bonds were issued under a framework of SEK 2,000 million, with a term of 2.25 years, carrying a variable interest rate of 3-month Stibor plus 375 basis points and ultimately mature on 7 May 2026.
- During the quarter, three separate leases were signed for premises at the property 28&7 in New York.
SIGNIFICANT EVENTS AFTER THE END OF THE PERIOD
- Bond maturing on 16 April, 2024 with an outstanding amount of SEK 1,259 million has been redeemed as of due date.
- Bond maturing on 29 April, 2024 will be redeemed on its due date.
- Repurchase of SEK 333 million were made in bonds maturing in October 2024.
- Senior unsecured green bonds of SEK 500 million were issued in April. The bonds were issued under a framework of SEK 2,000 million, with a term of 2.75 years, carrying a variable interest rate of 3-month Stibor plus 375 basis points and maturity on 19 January 2027.
- An increase of SEK 150 million were made in bonds maturing in May 2026.
| | 2024
3 months
Jan–Mar | 2023
3 months
Jan–Mar | 2023/2024
Rolling
12 months
Apr–Mar | 2023
12 months
Jan–Dec |
| --- | --- | --- | --- | --- |
| Income, SEKm | 940 | 1,172 | 4,012 | 4,244 |
| Net operating income, SEKm | 578 | 789 | 2,671 | 2,882 |
| Profit from property management, SEKm | 215 | 356 | 1,098 | 1,239 |
| Net profit, SEKm | –158 | –911 | –7,246 | –7,999 |
| Earnings per ordinary share of Class A and B, SEK | –0.28 | –0.95 | –7.21 | –7.88 |
| Net asset value (NAV) per ordinary share of Class A and B, SEK | 17.46 | 25.52 | 17.46 | 17.57 |
| Economic occupancy rate, % | 86 | 89 | 86 | 87 |
| Operating margin, % | 62 | 67 | 67 | 68 |
| Adjusted equity ratio, % | 41 | 41 | 41 | 41 |
| Interest coverage ratio | 1.7 | 2.0 | 1.8 | 1.9 |
| Loan-to-value ratio, % | 55 | 56 | 55 | 55 |
For definitions of key figures, refer to page 23 and to corem.se.
COREM – INTERIM REPORT JANUARY–MARCH 2024
CEO COMMENT
Strong net lettings and continued focus on optimizing the business for new market conditions
During the first quarter we have continued on our set path, strengthening the balance sheet and optimizing the business to suit the current market conditions. Further transactions have been completed during the quarter, we have divested or signed agreements to divest a total of 30 properties. In addition, we have seen some positive signals on the finance and capital markets. Even if interest rates will remain higher than a few years back, the indication is that 2024 will hopefully be a less turbulent year than 2023. We are particularly pleased to report a positive net letting also in this first quarter of 2024, reaching SEK 49 million. This affirms the continued strength and stability of the core business in letting and property management, and that the rental market is generally seeing a good demand.
Adapting the business to new conditions
The beginning of 2024 was characterized by continued financial and geopolitical challenges. The 2020s as a whole have been an exceptional time for many real estate companies, beginning with the pandemic and its effects on the office market. This was later followed by an increase in interest rates and rising inflation which resulted in both pressure on property values and increased financial expenses for real estate companies.
We continue to see adjustments in property values, which for Corem has meant a total of 15 percent reduction since valuations were at their peak during spring 2022. The average yield requirement was, as per 31 March, 5.9 per cent, which can be compared with 4.9 per cent at the end of the first quarter of 2022. We are confident that we have made a thorough analysis of the portfolio so as to reflect the current conditions, and expect that property values will gradually rise again going forward, as interest rates hopefully come down somewhat.
At Corem, we were early in making a course correction, shifting from the previous strategy of growth and intensive project development, which has meant we have now significantly reduced the volume of assets and project commitments. We are of the opinion that it is advantageous to sharply reduce dividends for a while, in order to continue to improve the capital structure. These actions are all made with the purpose of adapting to the current market conditions and to strengthen the balance sheet, by minimizing the burden of debt. We hope to be able to continue these efforts during 2024, even if the pace of divestments will be lower. We are pleased to note that the transactions market has showed, and still shows, stability and activity. We feel confident about our ability to continue to complete attractive transactions needed to further strengthen our balance sheet.
During the first quarter, a total of 30 properties were handed over or under agreement to be sold, for an underlying property value of SEK 2.5 billion. Among others, a major divestment was made in Copenhagen, and we also agreed on a larger portfolio sale with hand-over in May that will mean that we completely exit Jönköping.
Stable core business in property management and letting
Net letting was strong during the first quarter and landed at SEK 49 million. Of these 49 million, around 22 stemmed from new builds and 27 from the regular business in the investment portfolio. Taken together with the strong net letting of the previous year, of SEK 83 million, it can be concluded that the rental market continues to exhibit good demand.
In total, we signed over 200 lease contracts during the quarter, for a combined value of around SEK 120 million. We are particularly pleased to have let out around 2,000 sq.m. on three floors at 28&7 in New York to The Visualize Group, Superstate, and Chenel Capital. In Kista, north of Stockholm, we have signed an agreement with OHB Sweden for around 4,800 sq.m. OHB Sweden is an existing tenant who are expanding their activities, which is also a very positive sign.
Net operating income has overall decreased due to the large divestments and the resulting new composition of the portfolio. Together with higher market rates, it has held back the profit from property management which amounted to SEK 215 million for the quarter.
The key figures for both operating margin and economic occupancy rate has decreased during the quarter. This as a result of sales but also as an expected effect of the negative net letting we had during 2022 and which is now reflected in our key figures. Considering the strong net letting we showed this quarter as well as during In 2023, we are confident that the opposite effect will gradually occur impact in the key figures.
Brighter days ahead on the bond market
We have had major bond maturities to deal with in 2023 and the beginning of 2024, and the transactions that have been completed have allowed us to gradually reduce our borrowings by repaying bank loans and redeeming bonds.
After the turn of the year, conditions seem to once again be improving on the bond market. During the first quarter, as well as in April 2024, we announced that we have successfully issued two new green bonds of totalling SEK 1.75 billion. These bonds run for 2.25 and 2.75 years, respectively, carrying variable interest of 3-month Stibor plus 375 basis points. There is, once more, considerable interest from institutional investors as well as private individuals, supporting the impression that the bond markets are beginning to function again. This is of course a good thing for us, even if interest rates remain at a higher level than they have been before. In April, two bonds totalling SEK 2.3 billion mature, and are redeemed in their entirety.
We will continue to invest considerable focus into our financing and on reducing our loan-to-value ratio in the long term. Interest-bearing liabilities amounted at the end of the first quarter to SEK 32.9 billion.
COREM - INTERIM REPORT JANUARY-MARCH 2024
During the quarter, Corem signed a 10-year lease with the space company OHB Sweden for approximately 4,800 sq.m. in the property Helgafjäll 1 in Kista. Move-in is planned for the first quarter of 2025.
Project development
We have continued to restrict development activities during the first quarter, focusing on completing ongoing projects rather than starting new ones. We are certainly continuing to make tenant adaptations in connection with new lettings, but we will also be restrictive going forward with new construction projects, and will invest in major urban development projects for a time.
The focus going forward
Our entire focus for now is to trim and optimize the business and thus to improve the property portfolio occupancy rate and operating margin. We will continue to optimise the financial structure and are now better-prepared for rapid fluxes in the market, compared to where we were 12–18 months ago.
Times like these require considerable flexibility in the business, and the organization has had to adapt in several ways when the business shifted from projects intensity and growth to primarily be focused on the other core business, property management and letting. As a result of several larger divestments, the organization has also shrunk and been slimmed down. We are now roughly 50 fewer employees in the company, compared to year-end 2022. I would like to express a big thank you to all of our staff as well as our investors, tenants, and business partners for all of your efforts to build a stronger Corem.
Rutger Arnhult,
Chief Executive Officer
Stockholm, 23 April 2024
COREM - INTERIM REPORT JANUARY-MARCH 2024
Income, expenses and profit
Income statement items are compared with the corresponding 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 and the period refer to January–March.
INCOME
Income amounted to SEK 940 million (1,172) during the first quarter.
Income was positively affected by index adjustment and negatively by divestments. In a comparable portfolio, income increased by 3 per cent during the quarter.
EXPENSES
Property costs amounted to SEK 362 million (383), as a smaller portfolio following divestments resulted in lower costs. Property costs for a comparable portfolio increased by 11 per cent, due to heating and snow removal which together account for approximately SEK 20 million of a total increase of approximately SEK 30 million.
Central administration expenses amounted to SEK 43 million (46).
NET FINANCIAL ITEMS
Net financial income amounted to SEK –320 million (–387) during the quarter. Financial income amounted to SEK 1 million (3) and financial expenses to SEK 321 million (390). Lower interest-bearing debt has contributed to an improved financial net despite a higher average market rate. At the same time, a reduction in interest-bearing liabilities contributed to limiting this increase. At the end of the quarter, the Group's average interest rate was 4.5 per cent (4.4). Financial income includes site leasehold fees and land fees of SEK 19 million (18). For further information, refer to page 13.
EARNINGS
Operating surplus amounted to SEK 578 million (789) during the quarter and the operating margin was 62 per cent (67). In a comparable portfolio, operating surplus decreased by 4 per cent, and the operating margin amounted to 63 per cent.
Profit from property management amounted to SEK 215 million (356).
CHANGES IN VALUE
Properties
Changes in value of investment properties amounted during the year to SEK –484 million (–1,505). Unrealized value changes amounted to SEK –495 million (–1,458) and realized value changes to SEK 11 million (–47). For further information, refer to page 7.
Financial assets
Value changes of financial assets valued at fair value amounted to SEK 1 million (93) during the quarter. For further information, refer to page 14.
Derivatives
Changes in value of derivatives amounted to SEK 135 million (–231). The value of the derivatives is affected by changes in market interest rates.
GOODWILL
During the quarter, goodwill was written down by SEK –121 million (–88). Impairment refers to goodwill attributable to deferred tax where impairment occurs due to negative unrealized value changes and divestments of properties.
TAXES
During the first quarter, current tax amounted to SEK –11 million (–13). Deferred tax amounted to SEK 107 million (374), 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 year amounted to SEK 242 million (1) and relates to the foreign operations.
INCOME, SEKm
PROFIT FROM PROPERTY MANAGEMENT, SEKm
COREM – INTERIM REPORT JANUARY–MARCH 2024
The property portfolio
PROPERTY VALUES
On 31 March 2024, Corem's property portfolio comprised 315 investment properties with a combined lettable area of 2,387 sq.m. and a market value of SEK 56,533 million. In addition, there was one housing project classified as current assets.
CHANGES IN VALUE
Value changes in investment properties amounted during the quarter to SEK -484 million (-1,505), corresponding to -1 per cent. Unrealized value changes amounted to SEK -495 million and realized value changes to SEK 11 million.
The values of investment properties were adjusted during the first the quarter negatively due to higher yield requirements and positively by net rental. Of the changes in value during the quarter, 91 per cent refers to properties in Sweden and 9 per cent to properties abroad.
As at 31 March 2024, the property portfolio is valued using an average assessed dividend yield requirement of 5.9 per cent (5.8 at year-end 2023). Since Q1 2023, the property portfolio has devalued by 10 per cent. In total, the value of the property portfolio has been adjusted down by 15 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 normally valued externally. As a rule, every property is valued by external valuers at least once annually, but exceptions may be made for individual properties. 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 2023.
PROPERTY TRANSACTIONS
Selected transactions during the quarter
During the quarter, 11 properties were divested at an underlying property value of SEK 1.7 billion. The profit effect including dissolved tax and impairment of goodwill attributable to deferred tax amounted to SEK 92 million. Reported realized change in value amounted to SEK 11 million and includes transaction costs and such deferred tax deductions as were part of the deals.
Properties divested include Orgelpipan 4 (site leasehold) in Stockholm, an educational property in Copenhagen, an office property in Gothenburg, and four logistics properties in Malmö. For a presentation of all of the properties taken into possession or handed over during the quarter, refer to page 8.
During the quarter, Corem acquired 30 per cent of Åby Arena, with a convention centre and hotel, from Åby travsällskap. Following the deal, Corem wholly owns Åby Arena (as the properties Travbanan 2 and Travbanan 3).
Transactions after the end of the period
Agreements for divestments, with hand-over after the end of the period, have been signed for 19 properties for a combined underlying value of SEK 768 million. Among others, all 16 properties in Jönköping. With this sale, Corem leaves Jönköping.
TENANTS AND THE LEASE PORTFOLIO
On 31 March 2024, Corem had approximately 3,100 tenants with approximately 5,600 lease contracts. The annual contract value amounted to SEK 3,775 million (3,740), the rental value amounted to SEK 4,414 million (4,322) and the economic occupancy rate to 86 per cent (87). 41 per cent of the contracted rent expires in 2027 or later. In all, the average remaining contract period was 3.4 years (3.4).
Net letting
Income amounted to SEK 49 million (33) during the first quarter.
Of these, SEK 22 million derives from new production projects and SEK 27 million from investment activities. In all, lettings and renegotiations amounted to SEK 122 million during the quarter. 65 per cent of this was for new customers and the remaining letting to existing tenants.
Major lettings
In New York, several lease agreements were signed at the development property 28&7. A five-year lease was signed with The Visualize Group concerning 807 sq.m., with move-in planned during the fourth quarter of 2024. A five-year lease was signed with Chenel Capital for 807 sq.m., with move-in planned for the fourth quarter of 2024, and a three-year lease was signed with Superstate for 427 sq.m., under which the tenant moved in during the first quarter of 2024.
In Stockholm, a ten-year lease was signed with OHB Sweden concerning approximately 4,800 sq.m. in the property Helgafjäll 1 in Kista. Move-in is planned for the first quarter of 2025.
In Gothenburg, a seven-year lease was signed with IZI Solution concerning around 2,600 sq.m. In the property Gamlestaden 39:13. The tenant moved in during the first quarter of 2024.
NET LETTING, SEKm
CONTRACT STRUCTURE, SEKm
COREM - INTERIM REPORT JANUARY-MARCH 2024
INVESTMENT PROPERTIES: NUMBER, LETTABLE AREA, FAIR VALUE
| Q1 2024 | 2023 | |||
|---|---|---|---|---|
| No | sq.m. | SEKm | SEKm | |
| Total at the start of the year | 326 | 2,428,426 | 58,033 | 78,387 |
| Acquisitions | — | — | — | — |
| Investments in construction, extensions and refurbishment | — | 3,092 | 280 | 1,993 |
| Divestments | -11 | -44,929 | -1,665 | -14,010 |
| Changes in value, unrealised | — | — | -495 | -8,306 |
| Currency conversion | — | — | 380 | -31 |
| Total at the end of the period | 315 | 2,386,589 | 56,533 | 58,033 |
PROPERTY TRANSACTIONS, TRANSFER OF POSSESSION JANUARY - MARCH 2024
| Quarter | Property | City | Municipality | Property category | Lettable area, sq.m. | |
|---|---|---|---|---|---|---|
| Acquisition | Divestment | |||||
| Q1 | Orgelpipan 4 | Stockholm | Stockholm | Office | 4,244 | |
| Q1 | Pottegården 2 | Gothenburg | Mölndal | Warehouse/logistics | 1,800 | |
| Q1 | Pottegården 4 | Gothenburg | Mölndal | Office | 4,930 | |
| Q1 | Smörbollen 12 | Malmö | Malmö | Warehouse/logistics | 3,757 | |
| Q1 | Backa 25:1 | Gothenburg | Gothenburg | Office | 4,042 | |
| Q1 | Nackremmen 1 | Malmö | Malmö | Warehouse/logistics | 1,743 | |
| Q1 | Nackremmen 2 | Malmö | Malmö | Warehouse/logistics | 2,413 | |
| Q1 | Nosgrimman 1 | Malmö | Malmö | Warehouse/logistics | 1,828 | |
| Q1 | 26er, 26fg, 26fi Frederiksberg | Copenhagen | Copenhagen | Education/health care/other | 19,300 | |
| Q1 | Stensborg 2 | Västerås | Västerås | Office | 872 | |
| Q1 | Bogserbåten 1 | Västerås | Västerås | Land | — | |
| Total | 44,929 |
During the quarter, a seven-year agreement was signed with IZI Solution for approximately 2,600 sq.m. in the property Gamlestaden 39:13 in Gothenburg. The tenant moved in during the first quarter of 2024.
COREM - INTERIM REPORT JANUARY-MARCH 2024
View of New York from the terrace at the top of the project property 28&7. During the quarter, three new leases were signed in 28&7.
COREM - INTERIM REPORT JANUARY-MARCH 2024
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.
During the first quarter, SEK 280 million (552) was invested in the property portfolio for new construction, extensions and refurbishments. As at 31 March 2024, the remaining investment volume amounted to SEK 1,000 million (1,473). At that time, there were altogether four ongoing projects with an estimated investment exceeding SEK 50 million each. The total area-based occupancy rate in the projects amounts to 58 per cent. The projects combined comprise 39,329 square metres and a remaining investment of SEK 616 million.
At the housing project K1 Nacka Strand, buyers have taken possession of the apartments sold. The project comprises 60 apartments with a total livable area of 3,700 sq.m. K1 Nacka Strand has been divided into stages for sales, where 51 of the 60 apartments had been sold as of 31 March. The remaining apartments are now up for sale, and buyers are gradually taken possession.
Commercial projects in Sweden
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 and office premises in Nattskiftet 14 have now been completed.
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. During the fourth quarter, the Swedish Transport Agency moved into this property, and the country administrative board in Örebro is moving in during the second quarter of 2024.
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 in the fourth quarter of 2024.
Commercial projects in New York
Corem owns three project properties in Manhattan in New York: 1245 Broadway, 28&7, and 417 Park Avenue.
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 31 March 2024, 15 lease agreements had been signed, which corresponds to an area-based occupancy rate of 54 per cent at 1245 Broadway and 48 per cent at 28&7. The total contract value of the leases amounted on 31 March 2024 to USD 14.3 million, corresponding to SEK 150 million, or just over SEK 11,000/sq.m.
The property 1245 Broadway has a land lease agreement; right-of-use assets and leasing liabilities are recorded in the balance sheet.
The development property 417 Park Avenue has a building right for the new construction of offices of around 33,000 sq.m. Preliminary planning is underway and construction is planned to start at the earliest in 2025.
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 Broadway¹ | New construction, office premises | 9,211 | 17,115 | 1,942 | 370 | 207 | 24Q4 |
| New York | 28&7¹ | New construction, office premises | 4,442 | 9,279 | 1,010 | 175 | 94 | 24Q4 |
| Örebro | Olaus Petri 3:234 | Refurbishment and extension and office premises for Trafikverket and Länsstyrelsen. Phase 2 | 6,508 | 10,200 | 204 | 24 | 17 | 24Q2 |
| Nyköping | Furan 2 | Construction of school | 2,735 | 2,735 | 77 | 47 | 8 | 24Q4 |
| TOTAL | 22,896 | 39,329 | 3,233 | 616 | 326 |
¹) Estimated and remaining investment of projects in New York are based on the SEK/USD-rate on 31 March 2024.
Furan 2, Nyköping
A school for AcadeMedia is being built in Nyköping. The school is being built close to the city centre, on the same site where the previous school burned down. Move-in is expected to take place during the fourth quarter of 2024.
COREM - INTERIM REPORT JANUARY-MARCH 2024
1245 Broadway, New York
Corem's largest ongoing project is a 23-story office building along Broadway.
28&7, New York
Corem's second largest ongoing project is a 12-story office building in Manhattan.
Örebro Entré
At Central Station in Örebro, Corem is building the Örebro Entré project in two phases of a total of approximately 19,000 square meters. The second phase in the project is estimated to be completed in the second quarter of 2024.
COREM - INTERIM REPORT JANUARY-MARCH 2024
DISTRIBUTION BY OF PROPERTY HOLDINGS
Corem's property portfolio are divided into Stockholm, West, East and International.
Stockholm consists of Stockholm, Uppsala, Västerås and Örebro. West consists of the cities of Gothenburg, Malmö and Halmstad. East consists of Linköping, Norrköping, Nyköping, Jönköping, Borås and
Kalmar. The international operations are divided into Copenhagen and New York.
Previous years, in the table below, have been adjusted after reclassification of properties.
INCOME STATEMENT ITEMS AND INVESTMENTS
| Income, SEKm | Property costs, SEKm | Net operating income, SEKm | Operating margin, % | Investments, SEKm | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 2024 Jan–Mar | 2023 Jan–Mar | 2024 Jan–Mar | 2023 Jan–Mar | 2024 Jan–Mar | 2023 Jan–Mar | 2024 Jan–Mar | 2023 Jan–Mar | 2024 Jan–Mar | 2023 Jan–Mar | |
| Stockholm | 507 | 623 | -208 | -227 | 299 | 396 | 59 | 64 | 63 | 225 |
| East | 197 | 223 | -70 | -72 | 127 | 151 | 64 | 68 | 47 | 69 |
| West | 184 | 220 | -62 | -72 | 122 | 148 | 66 | 67 | 16 | 59 |
| International – Copenhagen | 23 | 79 | -7 | -6 | 16 | 73 | 70 | 92 | 2 | 5 |
| International – New York | 29 | 27 | -15 | -6 | 14 | 21 | 48 | 78 | 152 | 194 |
| Total | 940 | 1,172 | -362 | -383 | 578 | 789 | 62 | 67 | 280 | 552 |
| Investment portfolio | 861 | 1,119 | -316 | -349 | 545 | 771 | 63 | 69 | 67 | 251 |
| Development portfolio | 79 | 53 | -46 | -34 | 33 | 18 | 42 | 34 | 213 | 301 |
| Total | 940 | 1,172 | -362 | -383 | 578 | 789 | 62 | 67 | 280 | 552 |
KEY FIGURES OF PROPERTY HOLDINGS
| No. of properties | Fair value, SEKm | Rental value, SEKm | Economic occupancy rate, % | Lettable area, 000 sq.m. | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 2024 31 Mar | 2023 31 Mar | 2024 31 Mar | 2023 31 Mar | 2024 31 Mar | 2023 31 Mar | 2024 31 Mar | 2023 31 Mar | 2024 31 Mar | 2023 31 Mar | |
| Stockholm | 127 | 178 | 30,444 | 37,421 | 2,470 | 2,715 | 84 | 87 | 1,155 | 1,389 |
| East | 89 | 111 | 9,374 | 10,995 | 884 | 966 | 89 | 93 | 632 | 730 |
| West | 92 | 122 | 9,425 | 11,739 | 842 | 1,003 | 88 | 88 | 550 | 753 |
| International – Copenhagen | 4 | 9 | 1,314 | 7,906 | 74 | 313 | 65 | 98 | 37 | 155 |
| International – New York¹ | 3 | 4 | 5,976 | 7,048 | 144 | 90 | 90 | 100 | 13 | 8 |
| Total | 315 | 424 | 56,533 | 75,109 | 4,414 | 5,087 | 86 | 89 | 2,387 | 3,035 |
| Investment portfolio | 286 | 387 | 47,940 | 64,281 | 4,070 | 4,491 | 86 | 91 | 2,229 | 2,837 |
| Development portfolio | 29 | 37 | 8,593 | 10,828 | 344 | 596 | 79 | 74 | 158 | 198 |
| Total | 315 | 424 | 56,533 | 75,109 | 4,414 | 5,087 | 86 | 89 | 2,387 | 3,035 |
¹) Rental value, Economic occupancy rate and Lettable area refer to active leasing contracts, as well as completed areas in rentable condition.
PROPERTY VALUE, SEK/SQ.M. AND LETTABLE AREA, TSQ.M.
PROPERTY VALUE BY TYPE OF PROPERTY, %
RENTAL VALUE, SEK/SQ.M.
COREM - INTERIM REPORT JANUARY-MARCH 2024
Financing
INTEREST-BEARING LIABILITIES
On 31 March 2024, interest-bearing liabilities amounted to SEK 32,874 million (33,593). Accrued borrowing overheads amounted to SEK 250 million (258), which entails interest-bearing liabilities in the balance sheet of SEK 32,624 million (33,335).
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 550 million (50) and SEK 8,479 million (8,228), 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 1.8 years (2.2), and the loan-to-value ratio was 55 per cent (55).
| INTEREST-BEARING NET LIABILITIES SEKm | 2024 31 Mar | 2023 31 Dec |
|---|---|---|
| Interest-bearing liabilities | 32,624 | 33,335 |
| Adjustment, accrued borrowing overheads | 250 | 258 |
| Interest-bearing assets | -48 | -48 |
| Current investments | -12 | -10 |
| Cash and cash equivalents | -744 | -429 |
| Interest-bearing net liability | 32,070 | 33,106 |
Bonds
At the end of the quarter, the Group had SEK 8,479 million in outstanding listed bonds, maturing in 2024 or 2026. There was one non-secured Medium Term Note programme (MTN) with a framework amounting to SEK 10,000, of which SEK 3,959 million were outstanding.
During the quarter the company purchased bonds with other maturities totalling SEK 849 million, at the same time, new bonds of SEK 1,100 million were issued due in May 2026.
INTEREST MATURITY STRUCTURE
On 31 March 2024, the average interest rate in the loan portfolio was 4.5 per cent (4.4).
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 21,012 million (21,012), and interest rate caps for SEK 1,780 million (1,682), which together correspond to 69 per cent of the interest-bearing liabilities. Together with fixed-interest loans, this means that 71 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 2.5-4.5 per cent. On 31 March 2024 the market value of the interest rate derivatives portfolio amounted to SEK 438 million net (303).
Changes in value of derivatives amounted during the quarter to SEK 135 million (-231).
The average period of fixed interest amounted at the end of the quarter to 2.5 years (2.6), taken derivatives into account. The interest coverage ratio amounted during the quarter to 1.7 multiples (2.0) and to 1.8 (2,3) during the last four quarters.
LIQUID FUNDS
On 31 March 2024, cash and cash equivalents amounted to SEK 744 million (429). Restricted cash of SEK 133 million has been included in cash and cash equivalents in accordance with the IFRS IC clarification about funds that may only be used for a particular purpose due to an agreement with a third party.
LOAN TO VALUE, %
AVERAGE INTEREST RATE, %
ADJUSTED EQUITY RATIO, %
INTEREST COVERAGE RATIO, MULTIPLE
Trailing 12 months
COREM - INTERIM REPORT JANUARY-MARCH 2024
In addition, there were unutilized credit facilities, including backup facilities for outstanding commercial paper, of SEK 4,008 million, of which SEK 3,999 million can be used immediately with existing collateral. The remaining amount can be used for acquisition of properties as well as to some extent to finance ongoing projects. The net interest-bearing debt amounted to SEK 32,070 million (33,106).
RATING
Corem Property Group has a rating at Scope of BBB- with negative outlook.
EQUITY
At the end of the quarter, the Group's equity, attributable to the parent company's shareholders, amounted to SEK 22,057 million (22,003) of which SEK 1,300 million refers to hybrid bonds. Equity amounted to SEK 13.63 (13.58) 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 17.46 (17.57).
For further information about changes in equity, see page 19.
Hybrid bonds
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 percentage points margin.
Equity ratio
At the end of the quarter, the adjusted equity ratio amounted to 41 per cent (41) and the equity ratio to 35 per cent (34).
CASH FLOW
The Group's cash flow from operating activities, before changes in working capital, amounted during the quarter to SEK 214 million (385).
Cash flow from investing activities amounted to SEK 1,370 million (3,005) and cash flow from financing activities amounted to SEK -1,136 million (-3,278).
SHAREHOLDINGS
Corem's holding in Klövern
The holding in Klövern amounted to SEK 1,340 million at the end of the quarter, and is classified as Financial assets valued at fair value.
FIXED INTEREST AND TIED-UP CAPITAL PERIODS
| Maturity year | Fixed interest | Tied-up capital | |||
|---|---|---|---|---|---|
| Loan volume, SEKm | Contract volume, SEKm | Utilised, SEKm | Of which outstanding bonds, SEKm | Not utilised, SEKm | |
| Variable¹ | 11,360 | — | — | — | — |
| 2024 | 4,000 | 11,319 | 10,236 | 4,679 | 1,083 |
| 2025 | 4,490 | 14,687 | 14,187 | 2,700 | 500 |
| 2026 | — | 6,120 | 3,695 | 1,100 | 2,425 |
| 2027 | 2,076 | 844 | 844 | — | — |
| 2028 | 1,574 | 714 | 714 | — | — |
| Later | 9,374 | 3,198 | 3,198 | — | — |
| Total | 32,874 | 36,882 | 32,874 | 8,479 | 4,008 |
¹ Of the floating volume, SEK 1,780 million is covered by the interest rate cap.
BOND OVERVIEW 2024-03-31¹
| Typ | Issued | Maturity | Outstanding volume | Outstanding volume | ||
|---|---|---|---|---|---|---|
| Issuer 2024-03-31, SEKm | 2024-04-30, SEKm | 2024-04-30, SEKm | Interest rate, % | |||
| Green unsecured MTN 201² | Oct-20 | Apr-24 | Kelly | 1,259 | — | 3m Stibor +3.25 |
| Green unsecured³ | Oct-20 | Apr-24 | Corem | 1,070 | — | 3m Stibor +3.50 |
| Green unsecured | Jan-22 | Oct-24 | Corem | 2,350 | 2,018 | 3m Stibor +2.75 |
| Green unsecured MTN 202 | Feb-21 | Feb-25 | Kelly | 2,500 | 2,500 | 3m Stibor +3.25 |
| Unsecured MTN 204 | Mar-21 | Sep-25 | Kelly | 200 | 200 | 3m Stibor +3.50 |
| Green unsecured | Jan-24 | May-26 | Corem | 1,100 | 1,250 | 3m Stibor +3.75 |
| Green unsecured | Apr-24 | Jan-27 | Corem | — | 500 | 3m Stibor +3.75 |
| Total | 8,479 | 6,468 |
¹) Refers to bonds issued by Corem Property Group AB ("Corem") and the subsidiary Corem Kelly AB.
²) Redeemed 2024-04-16
³) Will redeem 2024-04-29
COREM - INTERIM REPORT JANUARY-MARCH 2024
Shares 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 31 March 2024, there were a total of 1,137,283,281 shares in Corem, of which 93,730,797 were ordinary shares of class A, 1,023,591,380 class B ordinary shares, 7,545,809 class D ordinary shares, 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 first quarter. As at 31 March 2024, Corem held 2,913,825 repurchased ordinary shares of class A, 35,691,000 repurchased class B ordinary shares, and 42,000 repurchased class D ordinary shares in treasury. The total market value at that time was SEK 431 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 in February 2024.
During the quarter, Corem acquired 30 per cent of Åby Arena, with a convention centre and hotel, from Åby travsällskap. Following the deal, Corem wholly owns Åby Arena (as the properties Travbanan 2 and Travbanan 3).
SHARE DATA, 31 MARCH 2024
| Market capitalization | 16.9 mdkr |
|---|---|
| Market place | Nasdaq Stockholm, Large Cap |
| LEI no. | 213800CHXQQD7TSS1T59 |
| No. of shareholders | 45,239 |
| Ordinary share, Class A | |
| --- | --- |
| No. of shares | 93,730,797 |
| Closing price | 11.00 kr |
| ISIN | SE0010714279 |
| Ordinary share, Class B | |
| --- | --- |
| No. of shares | 1,023,591,380 |
| Closing price | 10.91 kr |
| ISIN | SE0010714287 |
| Ordinary share, Class D | |
| --- | --- |
| No. of shares | 7,545,809 |
| Closing price | 232.00 kr |
| ISIN | SE0015961594 |
| Preference share | |
| --- | --- |
| No. of shares | 12,415,295 |
| Closing price | 234.50 kr |
| ISIN | SE0010714311 |
DIVIDEND PER ORDINARY SHARE A/B, SEK
NET ASSET VALUE (NAV) PER ORDINARY SHARE A/B, SEK
COREM - INTERIM REPORT JANUARY-MARCH 2024
LARGEST SHAREHOLDERS – 31 MARS 2024
| Shareholder | No. ordinary shares A, thousands | No. ordinary shares B, thousands | No. ordinary shares D, thousands | No. preference shares, thousands | Share of capital, % | Share of votes, %^{1} |
|---|---|---|---|---|---|---|
| Rutger Arnhult via companies^{3} | 43,947 | 464,253 | 3,282 | — | 44.97 | 47.34 |
| Gårdarike^{4} | 31,519 | 31,106 | 55 | 19 | 5.51 | 18.08 |
| Handelsbanken fonder | — | 75,619 | 104 | — | 6.66 | 3.95 |
| Länsförsäkringar fondförvaltning | — | 41,970 | — | — | 3.69 | 2.19 |
| State Street Bank & Trust Co | — | 41,397 | 32 | 102 | 3.65 | 2.17 |
| JP Morgan Chase Bank N.A. | — | 26,977 | — | 240 | 2.39 | 1.42 |
| Swedbank Robur fonder | 1,593 | 9,750 | — | — | 1.00 | 1.34 |
| Fredrik Rapp private and via companies | 750 | 9,500 | — | — | 0.90 | 0.89 |
| CBNY Norges Bank | — | 16,805 | 52 | — | 1.48 | 0.88 |
| AMF TJÄNSTEPENSION AB | — | 14,448 | — | — | 1.27 | 0.75 |
| Avanza Pension | 239 | 9,394 | 320 | 1,775 | 1.03 | 0.72 |
| Livförsäkringsbolaget Skandia, Ömsesidigt | 1,106 | 2,598 | 35 | 21 | 0.33 | 0.72 |
| Prior & Nilsson | — | 13,248 | — | — | 1.16 | 0.69 |
| SEB Life International | 665 | 5,303 | — | 0 | 0.52 | 0.62 |
| Patrik Tillman private and via companies | 571 | 5,723 | 77 | — | 0.56 | 0.60 |
| Other shareholders | 10,426 | 219,808 | 3,546 | 10,259 | 21.46 | 17.63 |
| TOTAL OUTSTANDING SHARES | 90,817 | 987,900 | 7,504 | 12,415 | 96.60 | 100.00 |
| Repurchased own shares^{2} | 2,914 | 35,691 | 42 | — | 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. These holdings have been adjusted for in the above table to give a fair 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 2023.
Rounding differences may arise in the report.
DEFINITIONS
A number of financial key ratios and measures are presented in the report which are not defined according to 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. As 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. Corem has its registered office in Stockholm, where the head office is also located.
The average number of employees in the Group during the quarter was 278 (309). 48 per cent (47) of the employees were women.
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, sustainability, financing, listed holdings, employees, business ethics and IT security.
For more information on identified risks, see Corem's Annual Report 2023.
COREM – INTERIM REPORT JANUARY–MARCH 2024
COREM - INTERIM REPORT JANUARY-MARCH 2024
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 quarter till SEK 1 million (25). Wästbygg is an associated company of M2-Gruppen, which is controlled by Rutger Arnhult. In addition, the Corem Group has purchased legal services from Walthon Advokater, in which the Chairman of the Group Patrik Essehorn is a shareholder to an amount of SEK 2 million (5).
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 129 million (139). Net profit for the period amounted to SEK -26 million (32). Interest-bearing liabilities amounted to SEK 6,746 million (5,943), which are largely lent to other Group companies.
ANNUAL GENERAL MEETING 2024
The annual general meeting of Corem Property Group AB (publ) will be held on 23 April 2024.
DIVIDEND
The Board proposes a dividend for the 2023 financial year of SEK 0.10 (0.40) per ordinary share of class A or B, and SEK 20.00 (20.00) per class D ordinary share or preference share. It is proposed that the dividend for the ordinary shares of Class A and Class B be paid in four instalments, of which two payments of SEK 0.02 and two payments of SEK 0.03, while it is proposed that the dividend for ordinary shares of Class D and preference shares be paid in four instalments, each of SEK 5.00 (5.00). It is proposed that the record days for dividend on ordinary shares of Class A, B, D and preference shares be the last banking day in the respective calendar quarter with the expected payment three banking days thereafter.
SIGNIFICANT EVENTS AFTER THE END OF THE PERIOD
Bond maturing on April 16, 2024 with an outstanding amount of SEK 1,259 million has been redeemed as of due date.
Bond maturing on April 29, 2024 will redeem on due date.
Repurchase of SEK 333 million were made in bonds maturing in October 2024.
Senior unsecured green bonds of SEK 500 million were issued in April. The bonds were issued under a framework of SEK 2,000 million, with a term of 2.75 years, carrying a variable interest rate of 3-month Stibor plus 375 basis points and ultimately mature on 19 January 2027.
An increase of SEK 150 million were made in bonds maturing in May 2026.
Stockholm, 23 April 2024
The Board of Directors of Corem Property Group AB (publ)
This report has not been subject to review by Corem's auditors.
During the quarter, Corem signed a three-year lease with Saab for approximately 900 square meters in the Kallebäck 17:1 property in Gothenburg. Moving-in is planned to the second quarter of 2024.
17
The Consolidated Income Statement in brief
| SEKm | 2024
3 months
Jan–Mar | 2023
3 months
Jan–Mar | 2023/2024
Rolling
12 months
Apr–Mar | 2023
12 months
Jan–Dec |
| --- | --- | --- | --- | --- |
| Income | 940 | 1,172 | 4,012 | 4,244 |
| Property costs | -362 | -383 | -1,341 | -1,362 |
| Net operating income | 578 | 789 | 2,671 | 2,882 |
| Central administration | -43 | -46 | -176 | -179 |
| Net financial items | -320 | -387 | -1,397 | -1,464 |
| Profit from property management | 215 | 356 | 1,098 | 1,239 |
| Share of earnings in associated companies | 0 | 103 | -1,179 | -1,076 |
| Value changes, properties | -484 | -1,505 | -7,455 | -8,476 |
| Value changes, financial assets | 1 | 93 | -5 | 87 |
| Value changes, derivatives | 135 | -231 | -634 | -1,000 |
| Impairment, goodwill | -121 | -88 | -622 | -589 |
| Profit before tax | -254 | -1,272 | -8,797 | -9,815 |
| Tax | 96 | 361 | 1,551 | 1,816 |
| Net profit for the period | -158 | -911 | -7,246 | -7,999 |
| Net profit for the year attributable to: | | | | |
| Parent Company shareholders | -159 | -896 | -7,233 | -7,970 |
| Holdings without controlling influence | 1 | -15 | -13 | -29 |
| | -158 | -911 | -7,246 | -7,999 |
| Earnings per share | | | | |
| Earnings per ordinary share of Class A and B, SEK | -0.28 | -0.95 | -7.21 | -7.88 |
| Ordinary shares A and B, average number | 1,078,717 | 1,078,717 | 1,078,717 | 1,078,717 |
No dilution effect exists as there are no potential shares (for example, convertibles).
Consolidated Report of Comprehensive Income in brief
| SEKm | 2024
3 months
Jan–Mar | 2023
3 months
Jan–Mar | 2023/2024
Rolling
12 months
Apr–Mar | 2023
12 months
Jan–Dec |
| --- | --- | --- | --- | --- |
| Net profit for the year | -158 | -911 | -7,246 | -7,999 |
| Items that can later be reclassified to the income statement | | | | |
| Currency conversion difference for international operations | 242 | 1 | -87 | -328 |
| Other comprehensive income after tax | 242 | 1 | -87 | -328 |
| Net comprehensive income for the period | 84 | -910 | -7,333 | -8,327 |
| Net comprehensive income attributable to: | | | | |
| Parent Company shareholders | 83 | -895 | -7,320 | -8,298 |
| Holdings without controlling influence | 1 | -15 | -13 | -29 |
| Total | 84 | -910 | -7,333 | -8,327 |
COREM - INTERIM REPORT JANUARY-MARCH 2024
Consolidated Balance Sheet in brief
| SEKm | 2024
31 Mar | 2023
31 Mar | 2023
31 Dec |
| --- | --- | --- | --- |
| ASSETS | | | |
| Non-current assets | | | |
| Goodwill | 1,663 | 2,287 | 1,785 |
| Investment properties | 56,533 | 75,109 | 58,033 |
| Right-of-use assets | 1,233 | 1,592 | 1,375 |
| Shares in associated companies | 0 | 3,494 | 0 |
| Financial assets valued at fair value | 1,352 | 7 | 1,351 |
| Derivatives | 537 | 1,091 | 562 |
| Other non-current assets | 140 | 243 | 144 |
| Total non-current assets | 61,458 | 83,823 | 63,250 |
| Current assets | | | |
| Properties classified as current assets | 292 | 233 | 290 |
| Other current assets | 1,050 | 1,201 | 881 |
| Cash and cash equivalents | 744 | 587 | 429 |
| Total current assets | 2,086 | 2,021 | 1,600 |
| TOTAL ASSETS | 63,544 | 85,844 | 64,850 |
| EQUITY AND LIABILITIES | | | |
| Equity attributable to parent company shareholders | 22,057 | 30,345 | 22,003 |
| Equity attributable to holdings without controlling influence | 0 | 29 | 14 |
| Total shareholders' equity | 22,057 | 30,374 | 22,017 |
| Long-term liabilities | | | |
| Interest-bearing liabilities | 17,032 | 31,057 | 19,505 |
| Leasing liabilities | 1,233 | 1,592 | 1,375 |
| Deferred tax liability | 5,545 | 7,197 | 5,709 |
| Derivatives | 99 | 32 | 259 |
| Other liabilities | 40 | 43 | 41 |
| Total long-term liabilities | 23,949 | 39,921 | 26,889 |
| Current liabilities | | | |
| Interest-bearing liabilities | 15,592 | 13,407 | 13,830 |
| Other liabilities | 1,946 | 2,142 | 2,114 |
| Total current liabilities | 17,538 | 15,549 | 15,944 |
| Total liabilities | 41,487 | 55,470 | 42,833 |
| TOTAL EQUITY AND LIABILITIES | 63,544 | 85,844 | 64,850 |
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 | -8,298 | -29 | -8,327 |
| Dividend | -830 | — | -830 |
| Hybrid bonds | -138 | — | -138 |
| Equity, 31.12.2023 | 22,003 | 14 | 22,017 |
| Comprehensive income for the period | 83 | 1 | 84 |
| Hybrid bonds | -40 | — | -40 |
| Change in holdings without controlling influence | 11 | -15 | -4 |
| Equity, 31.03.2024 | 22,057 | 0 | 22,057 |
COREM - INTERIM REPORT JANUARY-MARCH 2024
Consolidated statement of cash flow in brief
| SEKm | 2024
3 months
Jan–Mar | 2023
3 months
Jan–Mar | 2023/2024
Rolling
12 months
Apr–Mar | 2023
12 months
Jan–Dec |
| --- | --- | --- | --- | --- |
| Operating activities | | | | |
| Net operating income | 578 | 789 | 2,671 | 2,882 |
| Central administration | -43 | -46 | -176 | -179 |
| Depreciation, etc. | 6 | 6 | 23 | 23 |
| Interest received, dividend etc. | 1 | 3 | 32 | 34 |
| Interest paid, etc. | -309 | -347 | -1,313 | -1,351 |
| Interest expense, lease contracts attributable to site leasehold contracts | -19 | -18 | -79 | -78 |
| Income tax paid | 0 | -2 | -11 | -13 |
| Cash flow from operating activities before changes in working capital | 214 | 385 | 1,147 | 1,318 |
| Change in properties classified as current assets | -2 | -27 | -59 | -84 |
| Change in current receivables | -162 | -112 | 214 | 264 |
| Change in current liabilities | 24 | -365 | -391 | -780 |
| Cash flow from operating activities | 74 | -119 | 911 | 718 |
| Investing activities | | | | |
| Investments in new constructions, extensions and refurbishment | -280 | -552 | -1,721 | -1,993 |
| Divestment of investment properties | 1,656 | 2,360 | 12,544 | 13,248 |
| Divestment of shareholdings | — | 1,190 | — | 1,190 |
| Divestment of shares in associated companies | 0 | — | 1,383 | 1,383 |
| Acquisition holdings without controlling influence | -4 | — | -4 | — |
| Change in other non-current assets | -2 | 7 | -5 | 4 |
| Cash flow from investing activities | 1,370 | 3,005 | 12,197 | 13,832 |
| Financing activities | | | | |
| Dividend paid to parent company shareholders | -207 | -207 | -830 | -830 |
| Hybrid bonds, interest | -40 | -28 | -150 | -138 |
| Loans raised | 2,144 | 1,458 | 11,347 | 10,661 |
| Amortised loans | -3,033 | -4,501 | -23,321 | -24,789 |
| Cash flow from financing activities | -1,136 | -3,278 | -12,954 | -15,096 |
| Cash flow for the period | 308 | -392 | 154 | -546 |
| Cash and cash equivalents at beginning of period | 429 | 979 | 587 | 979 |
| Exchange rate difference in cash and cash equivalents | 7 | 0 | 3 | -4 |
| Cash and cash equivalents at end of period | 744 | 587 | 744 | 429 |
COREM – INTERIM REPORT JANUARY–MARCH 2024
Parent Company Income Statement in brief
| SEKm | 2024
3 months
Jan–Mar | 2023
3 months
Jan–Mar | 2023
12 months
Jan–Dec |
| --- | --- | --- | --- |
| Net sales | 129 | 139 | 537 |
| Cost of services sold | -86 | -94 | -358 |
| Gross profit | 43 | 45 | 179 |
| Central administration | -43 | -45 | -179 |
| Operating profit | 0 | 0 | 0 |
| Earnings from shares in group companies | 82 | 82 | -69 |
| Interest income and similar income statement items | 86 | 36 | 292 |
| Interest expense and similar income statement items | -194 | -99 | -497 |
| Net financial items | -26 | 19 | -274 |
| Other comprehensive income | — | — | -2 |
| Comprehensive income for the period | -26 | 19 | -276 |
| Tax | — | 13 | — |
| Net Profit for the period | -26 | 32 | -276 |
Parent Company Balance Sheet in brief
| SEKm | 2024
31 Mar | 2023
31 Mar | 2023
31 Dec |
| --- | --- | --- | --- |
| ASSETS | | | |
| Other intangible non-current assets | 6 | 5 | 6 |
| Machinery and equipment | 5 | 8 | 5 |
| Shares in group companies | 21,456 | 22,686 | 21,456 |
| Receivables from group companies | 7,641 | 6,672 | 7,192 |
| Short-term investments | — | — | — |
| Other current receivables | 69 | 30 | 31 |
| Cash and cash equivalents | 140 | 358 | 134 |
| TOTAL ASSETS | 29,317 | 29,772 | 28,824 |
| EQUITY AND LIABILITIES | | | |
| Equity | 21,833 | 22,998 | 21,859 |
| Interest-bearing liabilities | 6,746 | 6,401 | 5,943 |
| Liabilities to group companies | 361 | — | 393 |
| Non-interest-bearing liabilities | 377 | 373 | 629 |
| TOTAL EQUITY AND LIABILITIES | 29,317 | 29,772 | 28,824 |
COREM – INTERIM REPORT JANUARY–MARCH 2024
Key figures
| | 2024
3 months
Jan–Mar | 2023
3 months
Jan–Mar | 2023
12 months
Jan–Dec | 2022
12 months
Jan–Dec |
| --- | --- | --- | --- | --- |
| Property-related | | | | |
| Fair value of investment properties, SEKm | 56,533 | 75,109 | 58,033 | 78,387 |
| Yield requirement, valuation, % | 5.9 | 5.3 | 5.8 | 5.2 |
| Rental value, SEKm | 4,414 | 5,087 | 4,322 | 4,940 |
| Lettable area, sq.m. | 2,386,589 | 3,035,153 | 2,428,426 | 3,194,535 |
| Economic occupancy rate, % | 86 | 89 | 87 | 89 |
| Area-based occupancy rate, % | 77 | 82 | 78 | 83 |
| Operating margin, % | 62 | 67 | 68 | 65 |
| No. of investment properties | 315 | 424 | 326 | 458 |
| Average remaining lease contract period, years | 3.4 | 3.8 | 3.4 | 3.9 |
| Financial | | | | |
| Return on equity, % | -2.9 | -11.6 | -29.9 | -6.0 |
| Adjusted equity ratio, % | 41 | 41 | 41 | 39 |
| Equity ratio, % | 35 | 35 | 34 | 34 |
| Interest-bearing net liability, SEKm | 32,070 | 43,975 | 33,106 | 45,439 |
| Loan-to-value ratio, % | 55 | 56 | 55 | 57 |
| Loan-to-value ratio, properties, % | 42 | 45 | 43 | 45 |
| Interest coverage ratio, multiple | 1.7 | 2.0 | 1.9 | 2.5 |
| Average interest rate, % | 4.5 | 4.1 | 4.4 | 3.6 |
| Average period of fixed interest, years | 2.5 | 2.1 | 2.6 | 1.9 |
| Average period of tied-up capital, years | 1.8 | 3.2 | 2.2 | 3.3 |
| Share-related | | | | |
| Profit from property management per ordinary share A and B, SEK | 0.07 | 0.21 | 0.65 | 1.10 |
| Earnings per ordinary share, A and B, SEK1) | -0.28 | -0.95 | -7.88 | -2.25 |
| Net asset value (NAV) per ordinary share A and B, SEK | 17.46 | 25.52 | 17.57 | 26.42 |
| Equity per ordinary share A and B, SEK | 13.63 | 21.31 | 13.58 | 22.17 |
| Equity per ordinary share D, SEK | 289.59 | 289.59 | 289.59 | 289.59 |
| Equity per preference share, SEK | 312.72 | 312.72 | 312.72 | 312.72 |
| Dividend per ordinary share, A and B, SEK | — | — | 0.101 | 0.40 |
| Dividend per ordinary share D, SEK | — | — | 20.001 | 20.00 |
| Dividend per preference share, SEK | — | — | 20.001 | 20.00 |
| Share price ordinary share A, SEK | 11.00 | 7.80 | 10.65 | 10.45 |
| Share price ordinary share B, SEK | 10.91 | 7.24 | 10.62 | 8.39 |
| Share price ordinary share D, SEK | 232.00 | 161.80 | 182.00 | 170.60 |
| Share price preference share, SEK | 234.50 | 216.00 | 200.50 | 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 |
| Average number of outstanding ordinary shares A and B1) | 1,078,717 | 1,078,717 | 1,078,717 | 1,081,271 |
| Number of outstanding ordinary shares D | 7,504 | 7,504 | 7,504 | 7,504 |
| Number of outstanding preference shares | 12,415 | 12,415 | 12,415 | 12,415 |
1) Proposed dividend.
COREM - INTERIM REPORT JANUARY-MARCH 2024
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
Equity¹, 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 percentage 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 percentage 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 liabilities minus interest-bearing assets, listed shareholdings and 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, interest-bearing 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 tenant-owned 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 percentage 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 and exchange rate differences
² Equity attributable to Parent Company's shareholders.
COREM - INTERIM REPORT JANUARY-MARCH 2024
Calendar
FINANCIAL REPORTS
| Annual General Meeting 2024 | 23 April 2024 |
| --- | --- |
| Interim Report January–July 2024 | 12 July 2024 |
| Interim Report January–September 2024 | 24 October 2024 |
DIVIDEND: RECORD DATES AND DIVIDEND PAYMENT DATES
| Record date for dividend on ordinary shares of class A, B, D and preference shares | 28 June 2024 |
| --- | --- |
| Expected payment date for dividend on ordinary shares of class A, B, D and preference shares | 3 July 2024 |
| Record date for dividend on ordinary shares of class A, B, D and preference shares | 30 September 2024 |
| Expected payment date for dividend on ordinary shares of class A, B, D and preference shares | 3 October 2024 |
| Record date for dividend on ordinary shares of class A, B, D and preference shares | 31 December 2024 |
| Expected payment date for dividend on ordinary shares of class A, B, D and preference shares | 7 January 2025 |
| Record date for dividend on ordinary shares of class A, B, D and preference shares | 31 March 2025 |
| Expected payment date for dividend on ordinary shares of class A, B, D and preference shares | 3 April 2025 |
In the event that any of the record dates above should prove not to be a banking day that can be made a record date for technical reasons, the record date shall instead be the nearest prior banking day that can be made a record date.
CONTACT PERSONS:
Rutger Arnhult, CEO, +46 70 458 24 70, [email protected]
Eva Landén, Deputy CEO, +46 10 482 76 50, [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 person, set out above at 08.00 CEST on 23 April 2024.
corem
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: [email protected], website: www.corem.se
Properties for the future.