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Corem Property Group Interim / Quarterly Report 2024
2903_rns_2024-10-24_93960e53-b24a-4089-94c3-c4be40825c68.pdf
Interim / Quarterly Report
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Interim Report January–September 2024
Properties for the future
PROFIT FROM PROPERTY MANAGEMENT, SEKm
LOAN TO VALUE, %
NET ASSET VALUE (NAV) PER ORDINARY SHARE A/B, SEK Stockholm
Nyköping
Uppsala
Norrköping
Västerås
Örebro
Linköping
Kalmar
LETTABLE AREA BY TYPE, %
Office 50% Stock/Logistics 23% Retail 10% Other 17%
PROPERTY VALUE, SEKm
January–September 2024
- Income amounted to SEK 2,780 million (3,228)
- Operating surplus amounted to SEK 1,808 million (2,250)
- Net financial income amounted to SEK –950 million (–1,098)
- Profit from property management amounted to SEK 736 million (1,016)
- Changes in value of properties amounted to –473 million (–5,823) during the period and SEK 12 million (–2,912) during the quarter
- Profit/loss for the period amounted to SEK –268 million (–4,934), corresponding to SEK –0.62 (–4.91) per ordinary share of class A and B
- Net letting amounted to SEK 99 million during the period (90)
- The value of the investment properties amounted to SEK 56,063 million (58,033)
- Net asset value (NAV) per ordinary share of class A and B amounted as of 30 September to SEK 16.56 (17.57)
EVENTS DURING THE THIRD QUARTER
- During the quarter, one divested property was transferred at a total underlying property value of SEK 83 million. During the nine-month period, a total of 32 divested properties were transferred at an underlying property value of SEK 2,6 billion
- During the quarter, several leases were signed, including two leases in the property Helgafjäll 5 in Kista and two leases in the 28&7 property in New York
- During the quarter, a directed share issue of Corem's ordinary shares of class B were carried out in accordance with two separate issue decisions, partly as a directed share issue of 77,560,333 ordinary shares of class B to Swedish and international institutional investors and partly as a directed issue of 28,645,832 ordinary shares of class B. The latter, after approval at an extraordinary shareholders meeting, to M2 Asset Management AB (publ) and Gårdarike AB.
- Senior unsecured green bonds of SEK 1,300 million were issued under a framework of SEK 2 billion with a term of 3 years, carrying a variable interest rate of 3-month Stibor plus 295 basis points and maturity on 26 September 2027
- Bonds with an outstanding amount of SEK 1,460 million were redeemed, of which SEK 1,024 million with maturity in October 2024 and SEK 436 million with maturity in February 2025
- Hybrid bonds totalling SEK 148 million were redeemed during the quarter
EVENTS AFTER THE END OF THE PERIOD
- Bonds with an outstanding amount of SEK 610 million with maturity in October 2024, were redeemed early, on 11 October 2024
- Hybrid bonds of SEK 20 million were repurchased during October 2024
| 2024 3 months Jul–Sep |
2023 3 months Jul–Sep |
2024 9 months Jan–Sep |
2023 9 months Jan–Sep |
2023/2024 Rolling 12 months Oct–Sep |
2023 12 months Jan–Dec |
|
|---|---|---|---|---|---|---|
| Income, SEKm | 898 | 1,007 | 2,780 | 3,228 | 3,796 | 4,244 |
| Net operating income, SEKm | 585 | 707 | 1,808 | 2,250 | 2,440 | 2,882 |
| Profit from property management, SEKm | 219 | 306 | 736 | 1,016 | 959 | 1,239 |
| Net profit/loss, SEKm | –274 | –2,205 | –268 | –4,934 | –3,333 | –7,999 |
| Earnings per ordinary share of Class A and B, SEK | –0.36 | –2.16 | –0.62 | –4.91 | –3.54 | –7.88 |
| Net asset value (NAV) per ordinary share of Class A and B, SEK | 16.56 | 20.37 | 16.56 | 20.37 | 16.56 | 17.57 |
| Economic occupancy rate, % | 86 | 89 | 86 | 89 | 86 | 87 |
| Operating margin, % | 65 | 70 | 65 | 70 | 64 | 68 |
| Adjusted equity ratio, % | 43 | 39 | 43 | 39 | 43 | 41 |
| Interest coverage ratio | 1.7 | 1.9 | 1.8 | 2.0 | 1.8 | 1.9 |
| Loan-to-value ratio, % | 54 | 56 | 54 | 56 | 54 | 55 |
See page 23 and corem.se for definitions of key figures
4,346 Rental value, SEKm
99 Net letting, SEKm
16.56 Net asset value per ordinary share of class A and B, SEK
736 Profit from property management, SEKm
Continued strong net letting and focus on financial flexibility
The third quarter has been an eventful quarter for Corem. We note a high level of activity in our lettings, and today we are reporting another quarter with positive net letting thanks to a number of important lease contracts. During the quarter, we have continued to focus strongly on strengthening our financial flexibility, for example, through a directed share issue of just over one billion Swedish kronor and by issuance of new green bonds for SEK 1.3 billion. We see increasing liquidity in the capital market, falling long-term interest rates and are pleased that interest rate reduction is now firmly in process.
A more favourable macroeconomic environment
After a turbulent start to the 2020s and despite a continued serious geopolitical climate, we now see a turn in the macroeconomic environment. Inflation has come down as well as interest rates and the real estate industry is no longer under pressure from increased financial expenses nor from further decreases in value. Falling longterm interest rates and expectations of further interest rate cuts are beneficial for the whole industry which will eventually have a positive impact on the real estate market. The interest rate reductions are also a prerequisite for avoiding a further downturn in the economy.
Continued strong net letting
It is evident in our letting statistics that our core business is stable and function well. Net letting during the first three quarters has amounted to SEK 99 million, of which SEK 13 million has taken place in the third quarter, mainly due to a number of fine lettings in Stockholm and New York.
The operating surplus has decreased compared with last year because of a number of divestments. In a comparable portfolio, income has, however, increased by 3 per cent and operating surplus by 1 per cent. Profit from property management amounted to SEK 736 million for the first three quarters.
Intensity in the portfolio
Many now witness an office rental market that is somewhat hesitant. The supply of office premises is increasing and rental increases are slowing down, which increases competition for every vacant square metre. However, at Corem, we are experiencing a continued high level of demand and intensity of transactions at almost all locations, which is also reflected in our net letting statistics.
There is still some uncertainty in the office rental market about how to best react to continued opportunities for working from home and how this will affect the demand for premises, but we experience this as being just applicable to Stockholm. In the rest of the country, people are back at work and office attendance is also continuously increasing in Stockholm. It is evident that office design has become increasingly important given new digital working methods and as a social meeting place.
Kista – one of Sweden's most innovative places and Corem's strongest letting unit to date during 2024
The Stockholm market component Kista is one of Corem's prioritized development areas where we and other owners of real estate are now developing the location to a vibrant urban environment with a mixture of workplaces, service and housing.
In Kista, large established companies are located side by side with new tech companies, which makes it one of Sweden's most innovative places. The location with good communications close to Stockholm City and Arlanda airport, with direct access to the E4 and E18 motorways, is unique. There are top modern offices here but unlike other alternatives in the city centre, they are offered at competitive rental levels, which make the area perfect for large and small companies and for public authorities and activities.
It is worth noting that Corem's portfolio in Kista has by itself produced a positive net letting of SEK 19 million, which makes the management unit Corem's strongest during the quarter. Kista also accounts for 50 per cent of Corem´s total net letting in Sweden during the year. Among other lettings, we have let approximately 6,000 square metres to Mycronic, which is moving parts of its business from Täby to Kista, and around 1,100 square metres to Transcom. This is evidence of a well-functioning office letting market and that we at Corem offer competitive premises.
Financial flexibility
For a long time, we have had a strong focus on reducing indebtedness and thus strengthening our balance sheet. During 2024 alone, we have dealt with three large bond maturities of almost SEK 5.5 billion, which have been totally redeemed and we have also carried out buybacks of almost SEK 700 million in bonds that mature in February 2025. In addition, we have as per today's date repurchased a total of SEK 168 million of our hybrid bond.
Since the year-end, we have seen increasing liquidity in the capital market, which has also entailed shrinking credit margins leading us to issue new green bonds during the year totalling SEK 3.6 billion, of which SEK 1.3 billion in the third quarter.
During the summer, a directed new share issue was made of ordinary shares of class B for just over SEK 1 billion to proactively strengthen Corem's financial position.
This liquidity is being used to create the prerequisites for Corem to further reduce outstanding hybrid loans and bonds to continue to reduce our interest costs, which will provide greater future financial liquidity.
Concentration and sustainable project commitments
One of our foremost priorities is to increase efficiency and continue to concentrate our property portfolio. In recent years, we have made the divestments required to deal with bond maturities during 2023 and 2024. Now that the capital market has stabilized, we are focusing primarily on smaller but strategic divestments to refine our portfolio. This strengthens our balance sheet and aims at increasing our
During the quarter, Corem signed a five-year lease with the Swedish technology company Mycronic for approximately 6,000 square meters in the Helgafjäll 5 property in Kista. Access is planned for the third quarter of 2025.
focus on development of our assets in growth areas. During the first three quarters of the year, we have divested 32 properties at an underlying property value of SEK 2.6 billion.
We are continuing to invest in our existing properties but are maintaining a lower investment rate today than a couple of years ago. We are completing major projects and prioritizing tenant customization for new and existing tenants. We are, however, intensifying our work on sustainability projects. We see increased interest for green leases and energy-efficient solutions, which are in line with our sustainability targets. Through these initiatives, we can both reduce our environmental impact and create long-term value for both Corem and for our tenants.
Given the further interest rate cuts that are anticipated, we have a positive view of future development and on our strategy of owning and developing properties in metropolitan areas and growth locations through local sustainable management.
I would like to thank our employees for their commitment and our
tenants for their continued confidence. We look forward to the coming quarters with the same drive and focus on long-term creation of value.
Rutger Arnhult CEO
Stockholm, 24 October 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 refers to July–September and the period to January–September.
INCOME
Income amounted to SEK 898 million (1,007) during the third quarter and SEK 2,780 million (3,228) during the period January–September. Income was positively affected by index adjustment and negatively by divestments. In a comparable portfolio, income increased by 3 per cent during the period.
EXPENSES
Property expenses amounted to SEK 313 million (300) during the quarter and SEK 972 million (978) during the period, as a smaller portfolio following divestments resulted in lower costs. Property costs in a comparable portfolio increased by 9 per cent. Central administration costs amounted to SEK 38 million (44) during the quarter and SEK 122 million (136) during the period.
NET FINANCIAL ITEMS
Net financial items amounted to SEK –328 million (–357) during the quarter and to SEK –950 million (–1,098) during the period. Financial income amounted to SEK 7 million (16) during the period and financial expenses to SEK 957 million (1,114). Reduced interestbearing liabilities has contributed to an improved financial net for the period. At the end of the period, the group's average interest rate was 5.0 per cent (4.4 at year-end). Financial expenses include site leasehold fees and land fees of SEK 57 million (57). For further information, refer to page 13.
EARNINGS
Operating surplus amounted to SEK 585 million (707) during the quarter and SEK 1,808 million (2,250) during the period. The operating margin was 65 per cent (70) during the quarter and 65 per cent (70) during the period. Net operating income and operating margin have decreased due to divestments compared to the previous year. In a comparable portfolio, operating surplus increased by 1 per cent during the period.
Profit from property management amounted to SEK 219 million (306) during the quarter and SEK 736 million (1,016) during the period.
CHANGES IN VALUE Properties
Changes in value of investment properties amounted to SEK 12 million (–2,912) during the quarter and SEK –473 million (–5,823) during the period. Unrealized changes in value amounted to SEK 21 million (–2,905) during the quarter and realized changes in value to SEK –9 million (–7). For further information, refer to page 7.
Financial assets
Value changes of financial assets valued at fair value amounted to SEK 132 million (93) during the period and are mainly attributed to the holding in the housing company Klövern. For further information, refer to page 14.
Derivatives
Changes in value of derivatives amounted to SEK –512 million (–81) during the period. The value of the derivatives is affected by changes in market interest rates.
GOODWILL
During the period, impairment of goodwill amounted to SEK –165 million (–392). 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 –35 million (–46). Deferred tax amounted to SEK 50 million (1,375), 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 –24 million (227) and refers to currency conversion differences in foreign operations.
INCOME, SEKm
PROFIT FROM PROPERTY MANAGMENT, SEKm
The property portfolio
PROPERTY VALUES
On 30 September 2024, Corem's property portfolio comprised 294 (326) investment properties with a combined lettable area of 2,304 tsq.m. (2,428) and a market value of SEK 56,063 million (58,033).
CHANGES IN VALUE
Value changes in investment properties amounted during the period to SEK –473 million (–5,823), corresponding to –1 per cent. Unrealized value changes amounted to SEK –473 million and realized value changes to SEK 0 million.
The values of investment properties are largely unchanged during the quarter but has been affected by minor changes in yield requirements and slightly positive by net letting.
Of the changes during the period, 93 per cent refers to properties in Sweden and 7 per cent to properties abroad.
As at 30 September 2024, the property portfolio was valued using an average assessed dividend yield requirement of 5.9 per cent (5.8 at year-end). 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, where exceptions may be made for individual properties. During the quarter, Cushman & Wakefield have been used as valuation agency. As support for the internal valuation, Corem obtains continuous market information from external valuation agencies. For a sensitivity analysis and a description of the valuation principles, see Corem's annual report for 2023.
PROPERTY TRANSACTIONS
During the period January-September, 32 properties were divested at an underlying property value of SEK 2.6 billion. The profit effect, including dissolved tax and impairment of goodwill attributable to deferred tax amounted to SEK 171 million during the period. Reported realized change in value amounted to SEK 0 million and includes transaction costs and such deferred tax deductions that were part of the deals.
During the quarter, one divested property was transferred, the warehouse och logistics property Backa 21:8 in Gothenburg.
See all divestments on page 8.
TENANTS AND THE LEASE PORTFOLIO
On 30 September 2024, Corem had 3,100 tenants with approximately 5,500 lease contracts. The annual contract amounted to SEK 3,728 million (3,740), the rental value amounted to SEK 4,346 million (4,322) and the economic occupancy rate to 86 per cent (87). The average remaining contract period was 3.3 years (3.4). 50 per cent of the contracted rent expires in 2027 or later. Of the annual contract value for offices 18 per cent refers to rental income from public activities such as authorities, municipalities and regions.
Net letting
Net letting amounted to SEK 13 million (40) during the quarter and SEK 99 million (90) during the period. Of these, SEK 45 million derives from new production projects and SEK 54 million from investment activities . In all, lettings and renegotiations amounted to SEK 412 million during the period, 65 per cent of this was for new customers and the remainder for existing customers.
Lettings in selection
A number of new contracts were signed during the third quarter of the year.
At the project property 28&7 in New York, a five-year lease was signed with Injective Labs for approximately 800 sq.m. with planned move-in during the second quarter of 2025, and a five-year lease was signed with Epidemic Sound for approximately 800 sq.m. with planned move-in during the second quarter of 2025.
At Time Building, the property Borgarfjord 4 in Kista, a three-year lease was signed with Transcom for around 1,100 sq.m. with move-in planned for the first quarter of 2025.
At the property Helgafjäll 5 in Kista, a five-year lease was signed with Mycronic for approximately 6,000 sq.m. with planned move-in during the third quarter of 2025, and a two-year lease was signed with Smartoptics for approximately 700 sq.m. with planned move-in during the third quarter of 2024.
NET LETTING, SEKm
CONTRACT STRUCTURE, SEKm
INVESTMENT PROPERTIES: NUMBER, LETTABLE AREA, FAIR VALUE
| Jan–Sep 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 | — | 9,377 | 967 | 1,993 | |
| Divestments | –32 | –134,007 | –2,506 | –14,010 | |
| Changes in value, unrealised | — | — | –473 | –8,306 | |
| Currency conversion | — | — | 42 | –31 | |
| Total at the end of the period | 294 | 2,303,796 | 56,063 | 58,033 |
PROPERTY TRANSACTIONS, TRANSFER OF POSSESSION JAN–SEP 2024
| Lettable area, sq.m. | ||||||
|---|---|---|---|---|---|---|
| Quarter | Property | City | Municipality | Property category | 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 | — | — |
| Q2 | Ellipsen 5 | Stockholm | Stockholm | Office | — | 2,820 |
| Q2 | Budkaveln 18 | Huskvarna | Jönköping | Warehouse/logistics | — | 8,381 |
| Q2 | Öskaret 16 | Jönköping | Jönköping | Warehouse/logistics | — | 8,545 |
| Q2 | Flahult 21:36 | Jönköping | Jönköping | Warehouse/logistics | — | 12,878 |
| Q2 | Ädelmetallen 14 | Jönköping | Jönköping | Office | — | 2,558 |
| Q2 | Ädelmetallen 4 | Jönköping | Jönköping | Warehouse/logistics | — | 4,394 |
| Q2 | Ädelkorallen 1 | Jönköping | Jönköping | Warehouse/logistics | — | 1,350 |
| Q2 | Ädelkorallen 10 | Jönköping | Jönköping | Warehouse/logistics | — | 435 |
| Q2 | Ädelkorallen 17 | Jönköping | Jönköping | Office | — | 2,144 |
| Q2 | Ädelmetallen 12 | Jönköping | Jönköping | Warehouse/logistics | — | 2,004 |
| Q2 | Ädelmetallen 5 | Jönköping | Jönköping | Warehouse/logistics | — | 5,167 |
| Q2 | Äreporten 3 | Jönköping | Jönköping | Office | — | 1,302 |
| Q2 | Öronlappen 7 | Jönköping | Jönköping | Retail | — | 3,248 |
| Q2 | Öronlappen 8 | Jönköping | Jönköping | Education/health care/ other |
— | 2,234 |
| Q2 | Öronskyddet 9 | Jönköping | Jönköping | Warehouse/logistics | — | 1,683 |
| Q2 | Överlappen 15 | Jönköping | Jönköping | Warehouse/logistics | — | 1,954 |
| Q2 | Överlappen 8 | Jönköping | Jönköping | Warehouse/logistics | — | 1,726 |
| Q2 | Magneten 2 | Linköping | Linköping | Warehouse/logistics | — | 2,857 |
| Q2 | Megafonen 4 | Linköping | Linköping | Warehouse/logistics | — | 3,372 |
| Q2 | Matrosen 1 | Kalmar | Kalmar | Office | — | 2,259 |
| Q3 | Backa 21:8 | Gothenburg | Gothenburg | Warehouse/logistics | — | 17,767 |
| Total | — | 134,007 |
The energy used in Corem's operations shall be 100 per cent fossil-free by 2030 at the latest. In 2023, that figure was 93 per cent. Self-produced fossil-free electricity comes, among other things, from solar cells like these on the roof of Kista Gate, the Helgafjäll 7 property.
PROJECT DEVELOPMENT
Corem's project development takes place mainly in connection with new lettings and to adapt and modernize premises and properties, thereby increasing the rental value.
During the period, SEK 967 million (1,610) was invested in the property portfolio for new construction, extensions and refurbishments. As at 30 September 2024, the remaining investment volume amounted to SEK 1,040 million (1,001 at year-end). 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 these projects amounts to 73 per cent. The projects' combined area comprises 33,006 sq.m. with a remaining investment of SEK 586 million.
The housing project K1 Nacka Strand was completed at the turn of the year. The project included new production of a total of 60 apartments with a total area of 3,700 sq.m., where 59 apartments were sold at the end of the quarter. The last apartment had been sold after the end of the quarter, thus all apartments are sold.
Commercial projects in Sweden
In Nyköping, the property Furan 2, a school is being built for Acade-Media. The school is being built near the centre, at the same place as where the previous school burned down. Move-in is expected to take place in the fourth quarter of 2024.
In Gothenburg, the property Majorna 219:7, tenant adaptation is underway for the Coast Guard. The premises will house the Coast Guard's Gothenburg office with workplaces for around 90 employees. Move-in is planned for the second quarter of 2026
Commercial projects in New York
Corem owns three project properties in Manhattan in New York: 28&7, 1245 Broadway and 417 Park Avenue.
The projects 28&7 and 1245 Broadway, both new construction of high-quality office buildings, are nearing completion. In both projects, the exterior has now been completed and interior tenant adaptation is underway apace with tenants moving in. As at 30 September, 23 lease agreements have been signed, which corresponds to an area occupancy rate of 74 per cent in 28&7 and 63 per cent at 1245 Broadway, regarding signed rental contracts. On 30 September the contract value of the leases in New York amounted to USD 18.6 million, approximately SEK 188 million, which is equivalent to approximately SEK 10,500 per sq.m.
The property 1245 Broadway has a land lease agreement, where 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 around 33,000 sq.m. of office Preliminary planning is underway and construction is planned to start in 2025 at the earliest.
COREM'S LARGEST ONGOING COMMERCIAL PROJECTS
| 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 | 11,050 | 17,575 | 1,924 | 374 | 207 | 25Q2 |
| New York | 28&71 | New construction, office premises | 6,864 | 9,291 | 1,009 | 145 | 92 | 25Q2 |
| Nyköping | Furan 2 | Construction of school | 2,735 | 2,735 | 77 | 11 | 8 | 24Q4 |
| Gothenburg Majorna 219:7 | Tenant adaptation | 3,405 | 3,405 | 56 | 56 | 10 | 26Q2 | |
| TOTAL | 24,054 | 33,006 | 3,066 | 586 | 317 |
1) Estimated and remaining investment of projects in New York is based on the SEK/USD exchange rate on 30 September 2024.
Within project operations, priority is given to completing projects that have already started construction and to carry out tenant adaptations.
1245 Broadway, New York Corem's largest ongoing project is a 23-storey office building on 1245 Broadway.
28&7, New York Corem's second largest project is a 12-storey office building at 28th Street and 7th Avenue on Manhattan.
Urban development, Västerås The detailed plan for Västerås' new travel center and Corem's property Sigurd 3, in close proximity to and Sigurd 7, won legal force in March 2024.
DISTRIBUTION OF PROPERTY HOLDINGS
Corem's property holding is divided into Stockholm, West, East and International. Stockholm consists of Stockholm, Uppsala and Västerås. West consists of Gothenburg, Malmö and Halmstad. East consists of Linköping, Norrköping, Nyköping and Kalmar.
The international operations are divided into Copenhagen and New York.
Previous years, in the table below, have been adjusted since Stockholm Logistics is now included in Stockholm and after individual reclassification of properties.
INCOME STATEMENT ITEMS AND INVESTMENTS
| Income, SEKm | Property costs, SEKm | Net operating income, SEKm |
Operating margin, % | Investments, SEKm | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 2024 Jan–Sep |
2023 Jan–Sep |
2024 Jan–Sep |
2023 Jan–Sep |
2024 Jan–Sep |
2023 Jan–Sep |
2024 Jan–Sep |
2023 Jan–Sep |
2024 Jan–Sep |
2023 Jan–Sep |
|
| Stockholm | 1,528 | 1,699 | –557 | –569 | 970 | 1,130 | 64 | 67 | 265 | 630 |
| East | 519 | 591 | –169 | –177 | 349 | 414 | 67 | 70 | 96 | 132 |
| West | 591 | 629 | –183 | –191 | 408 | 438 | 69 | 70 | 89 | 148 |
| International – Copenhagen | 50 | 232 | –17 | –24 | 33 | 208 | 66 | 90 | 38 | 28 |
| International – New York | 92 | 77 | –45 | –17 | 47 | 60 | 51 | 78 | 479 | 672 |
| Total | 2,780 | 3,228 | –972 | –978 | 1,808 | 2,250 | 65 | 70 | 967 | 1,610 |
| Investment portfolio | 2,557 | 3,027 | –850 | –886 | 1,707 | 2,141 | 67 | 71 | 306 | 592 |
| Development portfolio | 223 | 201 | –122 | –92 | 101 | 109 | 45 | 54 | 661 | 1,018 |
| Total | 2,780 | 3,228 | –972 | –978 | 1,808 | 2,250 | 65 | 70 | 967 | 1,610 |
KEY FIGURES OF PROPERTY HOLDINGS
| No. of properties | Fair value, SEKm | Rental value, SEKm | Economic occupancy rate, % |
Lettable area, 000 sq.m. |
||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 2024 30 Sep |
2023 30 Sep |
2024 30 Sep |
2023 30 Sep |
2024 30 Sep |
2023 30 Sep |
2024 30 Sep |
2023 30 Sep |
2024 30 Sep |
2023 30 Sep |
|
| Stockholm | 126 | 152 | 30,719 | 33,043 | 2,463 | 2,486 | 84 | 87 | 1,152 | 1,223 |
| East | 69 | 94 | 8,006 | 9,168 | 759 | 821 | 88 | 91 | 515 | 618 |
| West | 92 | 104 | 10,011 | 10,409 | 890 | 899 | 88 | 88 | 583 | 633 |
| International – Copenhagen | 4 | 7 | 1,337 | 6,430 | 75 | 290 | 79 | 90 | 38 | 117 |
| International – New York | 3 | 4 | 5,990 | 7,192 | 160 | 121 | 98 | 100 | 16 | 11 |
| Total | 294 | 361 | 56,063 | 66,242 | 4,346 | 4,617 | 86 | 89 | 2,304 | 2,602 |
| Investment portfolio | 266 | 327 | 48,122 | 54,979 | 4,016 | 4,230 | 86 | 89 | 2,177 | 2,405 |
| Development portfolio | 28 | 34 | 7,941 | 11,263 | 330 | 388 | 84 | 80 | 127 | 198 |
| Total | 294 | 361 | 56,063 | 66,242 | 4,346 | 4,617 | 86 | 89 | 2,304 | 2,602 |
1) Rental value, Economic Occupancy rate and Lettable area refer to active leasing contracts, as well as completed areas in rentable condition.
Financing
INTEREST-BEARING LIABILITIES
On 30 September 2024, interest-bearing liabilities amounted to SEK 31,511 million (33,593). Accrued borrowing overheads amounted to SEK 239 million (258), which entails interest-bearing liabilities in the balance sheet of SEK 31,272 million (33,335).
Corem's interest-bearing liabilities are mainly secured by mortgages and/or shares in subsidiaries. Unsecured interest-bearing liabilities consist of commercial paper and unsecured bonds, which amounted to SEK 1,171 million (50) and SEK 6,221 million (8,228) at the end of the quarter. Corem's commercial paper programme had a framework amounting to SEK 5,000 milllion. 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 54 per cent (55).
| INTEREST-BEARING NET LIABILITIES SEKm |
2024 30 Sep |
2023 31 Dec |
|---|---|---|
| Interest-bearing liabilities | 31,272 | 33,335 |
| Adjustment, accrued borrowing overheads | 239 | 258 |
| Interest-bearing assets | –48 | –48 |
| Current investments | 0 | –10 |
| Cash and cash equivalents | –575 | –429 |
| Interest-bearing net liability | 30,888 | 33,106 |
Bonds
At the end of the quarter, the Group had SEK 6,221 million in outstanding listed bonds, maturing in 2024 to 2027. There was one unsecured Medium Term Note programme (MTN) with a framework amounting to SEK 10,000 million, of which SEK 2,011 million was outstanding.
During the quarter, Corem repurchased bonds totalling SEK 1,460 million and issued new bonds of SEK 1,300 million maturing in September 2027.
LOAN TO VALUE, %
AVERAGE INTEREST RATE, %
INTEREST MATURITY STRUCTURE
On 30 September 2024, the average interest rate in the loan portfolio was 5.0 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 20,512 million (21,012), and interest rate caps for SEK 1,744 million (1,682) which together correspond to 71 per cent of the interest-bearing liabilities. Together with fixed interest loans, 72 per cent of the interest-bearing liabilities carried fixed interest at the end of the period. The swaps' interest rate levels were in the range 0.1–3.7 per cent while the caps had interest rate levels in the range 2.5–4.5 per cent. On 30 September 2024, the market value of the interest rate derivatives portfolio amounted to SEK –208 million (303).
Changes in value of derivatives amounted during the quarter to SEK –440 million (14).
The average period of fixed interest amounted at the end of the quarter to 2.5 years (2.6) taking derivatives into account. The interest coverage ratio amounted to 1.8 multiples (2.0) during the period and to 1.8 multiples (2.0) during the past four quarters.
LIQUID FUNDS
On 30 September 2024, cash and cash equivalents amounted to SEK 575 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.
In addition, there were unutilized credit facilities. Including backup facilities for outstanding commercial paper of SEK 3,320 million, of which SEK 3,216 million can be used immediately with existing collateral. The remaining amount can be used if securities are added as well as to some extent to finance ongoing projects. The net interest-bearing debt amounted to SEK 30,888 million (33,106).
ADJUSTED EQUITY RATIO, %
Adjusted equity ratio
INTEREST COVERAGE RATIO, MULTIPLE
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 21,949 million (22,003) of which SEK 1,152 million refers to hybrid bonds. Equity amounted to SEK 12.44 (13.58) per ordinary share of class A and B, SEK 289.59 (289.59) 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 16.56 (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 1,152 million, which runs at a variable interest rate of 3 months Stibor plus 8 percentage points margin. Hybrid bonds of SEK 148 million were repurchased.
Equity ratio
At the end of the quarter, the adjusted equity ratio amounted to 43 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 259 million (331).
Cash flow from investing activities amounted to SEK –231 million (1,528) during the quarter and cash flow from financing activities to SEK 123 million (–1,869).
SHAREHOLDING
Corem's holding in Klövern
The holding in Klövern was valued at SEK 1,475 million (1,340) at the end of the period and is classified as Financial assets valued at fair value.
FIXED INTEREST AND TIED-UP CAPITAL PERIODS
| Fixed interest | Tied-up capital | ||||||
|---|---|---|---|---|---|---|---|
| Maturity year | Loan volume, SEKm |
Contract volume, SEKm |
Utilised, SEKm |
Of which outstanding bonds, SEKm |
Not utilised, SEKm |
||
| Variable1 | 10,497 | — | — | — | — | ||
| 2024 | — | 1,115 | 1,115 | 610 | — | ||
| 2025 | 4,490 | 20,596 | 19,376 | 2,011 | 1,220 | ||
| 2026 | 1,000 | 6,043 | 3,943 | 1,250 | 2,100 | ||
| 2027 | 4,076 | 3,194 | 3,194 | 2,350 | — | ||
| 2028 | 2,074 | 709 | 709 | — | — | ||
| Later | 9,374 | 3,174 | 3,174 | — | — | ||
| Total | 31,511 | 34,831 | 31,511 | 6,221 | 3,320 |
1) Of the floating volume, SEK 1,744 is covered by the interest cap.
BOND OVERVIEW 30.09.20241
| Typ | Issued | Maturity | Issuer | Outstanding volume, SEKm |
Interest rate, % |
|---|---|---|---|---|---|
| Green unsecured2 | Jan-22 | Oct-24 | Corem | 610 | 3m Stibor +2.75 |
| Green unsecured MTN 202 | Feb-21 | Feb-25 | Kelly | 1,811 | 3m Stibor +3.25 |
| Unsecured MTN 204 | Mar-21 | Sep-25 | Kelly | 200 | 3m Stibor +3.50 |
| Green unsecured | Feb-24 | May-26 | Corem | 1,250 | 3m Stibor +3.75 |
| Green unsecured | Apr-24 | Jan-27 | Corem | 1,050 | 3m Stibor +3.75 |
| Green unsecured | Sep-24 | Sep-27 | Corem | 1,300 | 3m Stibor +2.95 |
| Total | 6,221 |
1) Refers to bonds issued by Corem Property Group AB ("Corem") and the subsidiary Corem Kelly AB.
2) Early redemption 11.10.2024.
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 2024, there was a total of 1,243,489,446 shares in Corem, of which 93,730,797 were ordinary shares of class A, 1,129,797,545 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.
NEW ISSUE OF ORDINARY SHARES
During the quarter, a directed new issue took place. Altogether, 106,206,165 ordinary shares of class B were issued. The directed new issue was carried out as two issue decisions, one as a directed new issue of 77,560,333 ordinary shares of class B to Swedish and institutional investors, and one as a directed new issue of 28,645,832 ordinary shares of class B to M2 Asset Management AB (publ) and Gårdarike AB. The latter issue decision was approved at an extraordinary shareholders´ meeting of Corem.
REPURCHASE OF OWN SHARES
Corem did not repurchase any of its own shares during the second quarter. As at 30 September 2024, Corem held 2,913,825 repurchased ordinary 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 412 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 neither during the first nor in the second conversion period of 2024.
In Time Building, the Borgarfjord 4 property in Kista, a three-year agreement with Transcom was signed during the quarter for approximately 1,100 sq.m. with move-in planned for the first quarter of 2025.
SHARE DATA, 30 SEP 2024
| Market capitalization | SEK 18.4 bn |
|---|---|
| Market place | Nasdaq Stockholm, Large Cap |
| LEI no. | 213800CHXQQD7TSS1T59 |
| No. of shareholders | 44,974 |
| Ordinary share, class A | |
| No. of shares | 93,730,797 |
| Closing price | SEK 10.20 |
| ISIN | SE0010714279 |
| Ordinary share, class B | |
| No. of shares | 1,129,797,545 |
| Closing price | SEK 10.37 |
| ISIN | SE0010714287 |
| Ordinary share, class D | |
| No. of shares | 7,545,809 |
| Closing price | SEK 280.00 |
| ISIN | SE0015961594 |
| Preference share | |
| No. of shares | 12,415,295 |
| Closing price | SEK 288.50 |
| ISIN | SE0010714311 |
DIVIDEND PER ORDINARY SHARE A/B, SEK
NET ASSET VALUE (NAV) PER ORDINARY SHARE A/B, SEK
LARGEST SHAREHOLDERS – 30 SEPTEMBER 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, % |
|---|---|---|---|---|---|---|
| Rutger Arnhult via companies1 | 44,020 | 495,053 | 3,282 | — | 43.62 | 46.41 |
| Gårdarike1 | 31,521 | 33,776 | 55 | 19 | 5.26 | 17.26 |
| Handelsbanken fonder | — | 96,838 | 123 | — | 7.80 | 4.79 |
| State Street Bank & Trust Co | — | 46,339 | 32 | 125 | 3.74 | 2.30 |
| Länsförsäkringar fondförvaltning | — | 46,200 | — | — | 3.72 | 2.28 |
| JP Morgan Chase Bank N.A. | — | 24,315 | — | 255 | 1.98 | 1.22 |
| Swedbank Robur fonder | 1,593 | 4,000 | — | — | 0.45 | 0.99 |
| Prior & Nilsson | — | 18,821 | — | — | 1.51 | 0.93 |
| CBNY Norges Bank | — | 18,500 | 53 | — | 1.49 | 0.92 |
| Fredrik Rapp privat och via bolag | 750 | 9,500 | — | — | 0.82 | 0.84 |
| Avanza Pension | 249 | 10,561 | 315 | 1,761 | 1.04 | 0.75 |
| AMF Tjänstepension AB | — | 15,000 | — | — | 1.21 | 0.74 |
| SEB Life International | 1,101 | 2,773 | 32 | 19 | 0.32 | 0.68 |
| Carnegie Fonder | — | 12,460 | — | — | 1.00 | 0.62 |
| Livförsäkringsbolaget Skandia, Ömsesidigt | 665 | 5,303 | — | 0 | 0.48 | 0.59 |
| Other shareholders | 10,919 | 254,667 | 3,611 | 10,236 | 22.47 | 18.68 |
| TOTAL OUTSTANDING SHARES, THOUSANDS |
90,817 | 1,094,107 | 7,504 | 12,415 | 96.89 | 100.00 |
| Repurchased own shares2 | 2,914 | 35,691 | 42 | — | 3.11 | |
| TOTAL REGISTERED SHARES, | 93,731 | 1,129,798 | 7,546 | 12,415 | 100.00 | 100.00 |
THOUSANDS
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. An adjustment has been made to reflect this, in order to give a fair view of the Company's largest shareholders.
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. Disclosures under IAS 34 16A are disclosed in addition to The financial reports are also included in other parts of the interim report.
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 as 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, which is not listed, is valued in accordance with Level 3 of the valuation hierarchy. The holding in Klövern AB is valued according to the discounted cash flows. Derivatives are valued in accordance with the discounted cash flows Derivatives are valued in accordance with Level 2 of the valuation hierarchy.
No new or changed standards or interpretations from 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 calculations of selected key ratios 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 embraces 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 on a full-year basis.
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 period were 284 (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. For more information on identifiable risks, see Corem's Annual and Sustainability Report for 2023. No changes to risk assessmenthas taken place during the current year.
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.
DISPUTES
Corem has no ongoing disputes that 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 to SEK 21 million (43). Wästbygg is an associated company of the M2-Gruppen, which is controlled by Rutger Arnhult. During the quarter, a directed share issue was carried outin which M2 Asset Management participated, among others. See more on page 15.
In addition, the Corem group has during the period purchased legal services from Walthon Advokater, of which the Chairman of the Board Patrik Essehorn is a shareholder to an amount of SEK 9 million (13).
THE PARENT COMPANY
The parent company's business consists of the sale of management services to the group's subsidiaries as well as strategic management and administration for the company's listing on Nasdaq Stockholm. Net sales amounted to SEK 379 million (402). Net profit for the period amounted to SEK 93 million (107). Interest-bearing liabilities amounted to SEK 7,134 million (5,943) which are largely lent to other group companies.
DIVIDEND
During the nine-month period, dividend totalling SEK 536 million has been paid to shareholders.
EVENTS AFTER THE END OF THE PERIOD
- Bonds with an outstanding amount of SEK 610 million at maturity in October 2024, were redeemed early on 11 October 11 2024.
- Hybrid bonds of SEK 20 million were repurchased during October 2024.
Stockholm, 24 October 2024
The Board of Directors of Corem Property Group AB (publ)
This interim report has been reviewed by Corem's auditors.
REVIEW REPORT
Corem Property Group AB (publ) corporate ID no.556463-9440
INTRODUCTION
We have reviewed the condensed interim report for Corem Property Group AB as at 30 September 2024 and for the nine-month 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 an the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this 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 24 October 2024 KPMG
Mattias Johansson Authorized public accountant
The Consolidated Income Statement in brief
| SEKm | 2024 3 months Jul–Sep |
2023 3 months Jul–Sep |
2024 9 months Jan–Sep |
2023 9 months Jan–Sep |
2023/2024 Rullande 12 months Oct–Sep |
2023 12 months Jan–Dec |
|---|---|---|---|---|---|---|
| Income | 898 | 1,007 | 2,780 | 3,228 | 3,796 | 4,244 |
| Property costs | –313 | –300 | –972 | –978 | –1,356 | –1,362 |
| Net operating income | 585 | 707 | 1,808 | 2,250 | 2,440 | 2,882 |
| Central administration | –38 | –44 | –122 | –136 | –165 | –179 |
| Net financial items | –328 | –357 | –950 | –1,098 | –1,316 | –1,464 |
| Profit from property management | 219 | 306 | 736 | 1,016 | 959 | 1,239 |
| Profit/loss, residential development | 0 | — | –1 | — | –1 | — |
| Share of earnings in associated companies | 0 | –1 | 0 | –1,076 | 0 | –1,076 |
| Value changes, properties | 12 | –2,912 | –473 | –5,823 | –3,126 | –8,476 |
| Value changes, financial assets | 25 | 30 | 132 | 93 | 126 | 87 |
| Value changes, derivatives | –440 | 14 | –512 | –81 | –1,431 | –1,000 |
| Impairment, goodwill | –14 | –188 | –165 | –392 | –362 | –589 |
| Profit/loss before tax | –198 | –2,751 | –283 | –6,263 | –3,835 | –9,815 |
| Tax | –76 | 546 | 15 | 1,329 | 502 | 1,816 |
| Net profit/loss for the period | –274 | –2,205 | –268 | –4,934 | –3,333 | –7,999 |
| Net profit for the year attributable to: | ||||||
| Parent Company shareholders | –275 | –2,189 | –269 | –4,902 | –3,337 | –7,970 |
| Holdings without controlling influence | 1 | –16 | 1 | –32 | 4 | –29 |
| Profit/loss for the period | –274 | –2,205 | –268 | –4,934 | –3,333 | –7,999 |
| Earnings per share | ||||||
| Earnings per ordinary share of Class A and B, SEK | –0.36 | –2.16 | –0.62 | –4.91 | –3.54 | –7.88 |
| Antal utestående aktier, tusental | ||||||
| Stamaktier A och B, vid periodens utgång | 1,184,924 | 1,078,717 | 1,184,924 | 1,078,717 | 1,184,924 | 1,078,717 |
| Stamaktier A och B, genomsnittligt antal | 1,155,737 | 1,078,717 | 1,104,578 | 1,078,717 | 1,098,078 | 1,078,717 |
| Stamaktier D, vid periodens utgång | 7,504 | 7,504 | 7,504 | 7,504 | 7,504 | 7,504 |
| Preferensaktier, vid periodens utgång | 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 Report of Comprehensive Income in brief
| SEKm | 2024 3 months Jul–Sep |
2023 3 months Jul–Sep |
2024 9 months Jan–Sep |
2023 9 months Jan–Sep |
2023/2024 Rolling 12 months Oct–Sep |
2023 12 months Jan–Dec |
|---|---|---|---|---|---|---|
| Net profit/loss for the period | –274 | –2,205 | –268 | –4,934 | –3,333 | –7,999 |
| Items that can later be reclassified to the income statement |
||||||
| Currency conversion difference for international operations | –235 | –146 | –24 | 227 | –579 | –328 |
| Other comprehensive income after tax | –235 | –146 | –24 | 227 | –579 | –328 |
| Net comprehensive income for the period | –509 | –2,351 | –292 | –4,707 | –3,912 | –8,327 |
| Net comprehensive income attributable to: | ||||||
| Parent Company shareholders | –509 | –2,335 | –292 | –4,675 | –3,914 | –8,297 |
| Holdings without controlling influence | 0 | –16 | 0 | –32 | 3 | –29 |
| Net comprehensive income for the period | –509 | –2,351 | –292 | –4,707 | –3,912 | –8,327 |
Consolidated Balance Sheet in brief
| SEKm | 2024 30 Sep |
2023 30 Sep |
2023 31 Dec |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Goodwill | 1,619 | 1,982 | 1,785 |
| Investment properties | 56,063 | 66,242 | 58,033 |
| Right-of-use assets | 1,211 | 1,604 | 1,375 |
| Shares in associated companies | — | 0 | 0 |
| Financial assets valued at fair value | 1,475 | 1,354 | 1,351 |
| Derivatives | 165 | 1,232 | 562 |
| Other non-current assets | 137 | 152 | 144 |
| Total non-current assets | 60,670 | 72,566 | 63,250 |
| Current assets | |||
| Properties classified as current assets | 0 | 269 | 290 |
| Other current assets | 906 | 1,072 | 881 |
| Cash and cash equivalents | 575 | 644 | 429 |
| Total current assets | 1,481 | 1,985 | 1,600 |
| TOTAL ASSETS | 62,151 | 74,551 | 64,850 |
| EQUITY AND LIABILITIES | |||
| Equity attributable to parent company shareholders | 21,949 | 25,666 | 22,003 |
| Equity attributable to holdings without controlling influence | 0 | 11 | 14 |
| Total shareholders' equity | 21,949 | 25,677 | 22,017 |
| Long-term liabilities | |||
| Interest-bearing liabilities | 14,703 | 24,933 | 19,505 |
| Leasing liabilities | 1,211 | 1,604 | 1,375 |
| Deferred tax liability | 5,611 | 6,183 | 5,709 |
| Derivatives | 373 | 10 | 259 |
| Other liabilities | 40 | 41 | 41 |
| Total long-term liabilities | 21,938 | 32,771 | 26,889 |
| Current liabilities | |||
| Interest-bearing liabilities | 16,569 | 13,816 | 13,830 |
| Other liabilities | 1,695 | 2,287 | 2,114 |
| Total current liabilities | 18,264 | 16,103 | 15,944 |
| Total liabilities | 40,202 | 48,874 | 42,833 |
| TOTAL EQUITY AND LIABILITIES | 62,151 | 74,551 | 64,850 |
Consolidated change in equity
| SEKm | Parent Company shareholders |
Holdings without controlling influence |
Total |
|---|---|---|---|
| Opening equity, 01.01.2023 | 31,268 | 43 | 31,311 |
| Comprehensive income for the period | –4,675 | –32 | –4,707 |
| Dividend | –830 | — | –830 |
| Hybrid bonds, interest | –98 | — | –98 |
| Equity, 30.09.2023 | 25,666 | 11 | 25,677 |
| Comprehensive income for the period | –3,623 | 3 | –3,620 |
| Hybrid bonds, interest | –40 | — | –40 |
| Change in holdings without controlling influence | 0 | 0 | 0 |
| Equity, 31.12.2023 | 22,003 | 14 | 22,017 |
| Comprehensive income for the period | –292 | 0 | –292 |
| Share issue | 1,007 | — | 1,007 |
| Dividend | –515 | — | –515 |
| Hybrid bonds, interest and repurchase | –265 | — | –265 |
| Change in holdings without controlling influence | 11 | –14 | –3 |
| Equity, 30.09.2024 | 21,949 | 0 | 21,949 |
Consolidated statement of cash flow
| SEKm | 2024 3 months Jul–Sep |
2023 3 months Jul–Sep |
2024 9 months Jan–Sep |
2023 9 months Jan–Sep |
2023/2024 Rullande 12 months Oct–Sep |
2023 12 months Jan–Dec |
|---|---|---|---|---|---|---|
| Operating activities | ||||||
| Net operating income | 585 | 707 | 1,808 | 2,250 | 2,440 | 2,882 |
| Central administration | –38 | –44 | –122 | –136 | –165 | –179 |
| Depreciation, etc. | 5 | 6 | 16 | 18 | 21 | 23 |
| Interest received, dividend etc. | 5 | 12 | 8 | 20 | 22 | 34 |
| Interest paid, etc. | –279 | –332 | –869 | –1,012 | –1,208 | –1,351 |
| Interest expense, lease contracts attributable to site leasehold contracts | –19 | –19 | –57 | –57 | –78 | –78 |
| Income tax paid | 0 | 1 | –1 | –8 | –6 | –13 |
| Cash flow from operating activities before changes in working capital | 259 | 331 | 783 | 1,075 | 1,026 | 1,318 |
| Change in properties classified as current assets | 0 | –13 | –2 | –63 | –23 | –84 |
| Change in current receivables | 80 | 229 | –120 | 116 | 28 | 264 |
| Change in current liabilities | –40 | –111 | –91 | –781 | –90 | –780 |
| Cash flow from operating activities | 299 | 436 | 570 | 347 | 941 | 718 |
| Investing activities | ||||||
| Investments in new constructions, extensions and refurbishment | –322 | –516 | –967 | –1,610 | –1,350 | –1,993 |
| Divestment of investment properties | 78 | 690 | 2,483 | 8,045 | 7,686 | 13,248 |
| Divestment of shareholdings | — | — | — | 1,190 | 0 | 1,190 |
| Change of shares in associated companies | — | 1,353 | — | 1,383 | 0 | 1,383 |
| Acquisition holdings without controlling influence | — | — | –4 | — | –4 | — |
| Change in other non-current assets | 13 | 1 | 34 | 1 | 37 | 4 |
| Cash flow from investing activities | –231 | 1,528 | 1,546 | 9,009 | 6,369 | 13,832 |
| Financing activities | ||||||
| Dividend paid to parent company shareholders | –121 | –207 | –536 | –622 | –744 | –830 |
| Share issue | 1,007 | — | 1,007 | — | 1,007 | — |
| Hybrid bonds, interest and repurchase | –184 | –39 | –265 | –98 | –305 | –138 |
| Loans raised | 2,548 | 3,504 | 8,441 | 8,276 | 10,826 | 10,661 |
| Amortised loans | –3,127 | –5,127 | –10,621 | –17,249 | –18,161 | –24,789 |
| Cash flow from financing activities | 123 | –1,869 | –1,974 | –9,693 | –7,377 | –15,096 |
| Cash flow for the period | 191 | 95 | 142 | –337 | –67 | –546 |
| Cash and cash equivalents at beginning of period | 389 | 555 | 429 | 979 | 644 | 979 |
| Exchange rate difference in cash and cash equivalents | –5 | –6 | 4 | 2 | –2 | –4 |
| Cash and cash equivalents at end of period | 575 | 644 | 575 | 644 | 575 | 429 |
Parent Company Income Statement in brief
| SEKm | 2024 3 months Jul–Sep |
2023 3 months Jul–Sep |
2024 9 months Jan–Sep |
2023 9 months Jan–Sep |
2023 12 months Jan–Dec |
|---|---|---|---|---|---|
| Net sales | 123 | 130 | 379 | 402 | 537 |
| Cost of services sold | –85 | –86 | –257 | –268 | –358 |
| Gross profit | 38 | 44 | 122 | 134 | 179 |
| Central administration | –38 | –44 | –122 | –134 | –179 |
| Operating profit | 0 | 0 | 0 | 0 | 0 |
| Earnings from shares in group companies | 82 | 82 | 246 | 329 | –69 |
| Interest income and similar income statement items | 89 | 69 | 289 | 169 | 292 |
| Interest expense and similar income statement items | –89 | –121 | –442 | –391 | –497 |
| Profit/loss after financial items | 82 | 30 | 93 | 107 | –274 |
| Group contributions, made/received | — | — | — | — | –2 |
| Profit/loss before tax | 82 | 30 | 93 | 107 | –276 |
| Tax | — | –35 | — | — | — |
| Net Profit/loss for the period | 82 | –5 | 93 | 107 | –276 |
Parent Company Balance Sheet in brief
| SEKm | 2024 30 Sep |
2023 30 Sep |
2023 31 Dec |
|---|---|---|---|
| ASSETS | |||
| Other intangible non-current assets | 5 | 6 | 6 |
| Machinery and equipment | 4 | 6 | 5 |
| Shares in group companies | 21,456 | 22,686 | 21,456 |
| Receivables from group companies | 9,142 | 7,913 | 7,192 |
| Deferred tax receivable | — | 0 | — |
| Other current receivables | 57 | 25 | 31 |
| Cash and cash equivalents | 105 | 156 | 134 |
| TOTAL ASSETS | 30,769 | 30,792 | 28,824 |
| EQUITY AND LIABILITIES | |||
| Restricted equity | 2,487 | 2,275 | 2,275 |
| Unrestricted equity | 19,958 | 19,967 | 19,584 |
| Total equity | 22,445 | 22,242 | 21,859 |
| Interest-bearing liabilities | 7,134 | 7,743 | 5,943 |
| Liabilities to group companies | 627 | — | 393 |
| Non-interest-bearing liabilities | 563 | 807 | 629 |
| TOTAL EQUITY AND LIABILITIES | 30,769 | 30,792 | 28,824 |
Key ratios
| 2024 3 months Jul–Sep |
2023 3 months Jul–Sep |
2024 9 months Jan–Sep |
2023 9 months Jan–Sep |
2023 12 months Jan–Dec |
|
|---|---|---|---|---|---|
| Property-related | |||||
| Fair value of investment properties, SEKm | 56,063 | 66,242 | 56,063 | 66,242 | 58,033 |
| Yield requirement, valuation, % | 5.9 | 5.5 | 5.9 | 5.5 | 5.8 |
| Rental value, SEKm | 4,346 | 4,617 | 4,346 | 4,617 | 4,322 |
| Lettable area, sq.m. | 2,303,796 | 2,602,258 | 2,303,796 | 2,602,258 | 2,428,426 |
| Economic occupancy rate, % | 86 | 89 | 86 | 89 | 87 |
| Area-based occupancy rate, % | 77 | 80 | 77 | 80 | 78 |
| Operating margin, % | 65 | 70 | 65 | 70 | 68 |
| No. of investment properties | 294 | 361 | 294 | 361 | 326 |
| Average remaining lease contract period, years | 3.3 | 3.6 | 3.3 | 3.6 | 3.4 |
| Financial | |||||
| Return on equity, % | –5.0 | –31.3 | –1.6 | –23.0 | –29.9 |
| Adjusted equity ratio, % | 43 | 39 | 43 | 39 | 41 |
| Equity ratio, % | 35 | 34 | 35 | 34 | 34 |
| Interest-bearing net liability, SEKm | 30,888 | 38,328 | 30,888 | 38,328 | 33,106 |
| Loan-to-value ratio, % | 54 | 56 | 54 | 56 | 55 |
| Loan-to-value ratio, properties, % | 43 | 45 | 43 | 45 | 43 |
| Interest coverage ratio, multiple | 1.7 | 1.9 | 1.8 | 2.0 | 1.9 |
| Average interest rate, % | 5.0 | 4.6 | 5.0 | 4.6 | 4.4 |
| Average period of fixed interest, years | 2.5 | 2.3 | 2.5 | 2.3 | 2.6 |
| Average period of tied-up capital, years | 1.8 | 3.3 | 1.8 | 3.3 | 2.2 |
| Share-related | |||||
| Profit from property management per ordinary share A and B, SEK | 0.07 | 0.16 | 0.29 | 0.57 | 0.65 |
| Earnings per ordinary share, A and B, SEK | –0.36 | –2.16 | –0.62 | –4.91 | –7.88 |
| Net asset value (NAV) per ordinary share A and B, SEK | 16.56 | 20.37 | 16.56 | 20.37 | 17.57 |
| Equity per ordinary share A and B, SEK | 12.44 | 16.97 | 12.44 | 16.97 | 13.58 |
| 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 | — | — | — | — | 0.10 |
| Dividend per ordinary share D, SEK | — | — | — | — | 20.00 |
| Dividend per preference share, SEK | — | — | — | — | 20.00 |
| Share price ordinary share A, SEK | 10.20 | 6.68 | 10.20 | 6.68 | 10.65 |
| Share price ordinary share B, SEK | 10.37 | 6.06 | 10.37 | 6.06 | 10.62 |
| Share price ordinary share D, SEK | 280.00 | 157.40 | 280.00 | 157.40 | 182.00 |
| Share price preference share, SEK | 288.50 | 178.00 | 288.50 | 178.00 | 200.50 |
| No. of shares, thousands | |||||
| Number of outstanding ordinary shares A and B | 1,184,924 | 1,078,717 | 1,184,924 | 1,078,717 | 1,078,717 |
| Average number of outstanding ordinary shares A and B | 1,155,737 | 1,078,717 | 1,104,578 | 1,078,717 | 1,078,717 |
| 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, excluding project properties, which were included in the portfolio during the whole of the reporting period and during the whole of the comparison period. Income and costs of a one-off nature are excluded from comparable results, for example, insurance compensation and major on-billing to tenants.
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 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, 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 and exchange rate differences
2 Equity attributable to Parent Company's shareholders.
Calendar
FINANCIAL REPORTS
| Year-end report 2024 | 13 February 2025 |
|---|---|
| Annual Report and Sustainability Report 2024 | Week 13, 2025 |
| Interim Report January–March 2025 | 23 April 2025 |
| Annual General Meeting 2025 | 23 April 2025 |
DIVIDEND: PROPOSED RECORD DATES AND DIVIDEND PAYMENT DATES
| Record date for dividend on ordinary shares of class A, B, D and preference shares | 30 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 |
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 publc pursuant to the EU Market Abuse Regulation. This nformation was submitted for publication through the agency of the contact person, set out above, at 08.00 CEST on 24 October 2024.
24 COREM – INTERIM REPORT JANUARY–SEPTEMBER 2024
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
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