Annual Report • Mar 11, 2008
Annual Report
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Annual Report 2007
Fabege is one of Sweden's leading property companies focusing on commercial premises and property development. The business is highly concentrated to fast growing sub-markets in the Stockholm region, with a particular concentration to the inner city of Stockholm, Solna and Hammarby Sjöstad.
Fabege manages and adds value to a well positioned property portfolio that is continuously developed through sales and acquisitions.
At year-end 2007 Fabege owned 167 properties with an overall market value of SEK 30.8 billion. Fabege's rental income in 2007 was just over SEK 2 billion.
The company's vision is to be the most proactive, innovative and competent commercial property company in Stockholm, and an important partner for its clients and for society as a whole.
Fabege's operational activities are conducted by the company's Property Management and Projects & Developments units.
Fabege's properties are managed by an organisation consisting of four property management areas: Stockholm City, Malmarna, Solna Business Park and Arenastaden. Fabege has chosen to manage its properties using its own staff to ensure a high degree of commitment and close contact with clients, enabling rapid decisions.
In addition to the area manager, each property management area has designated individuals with responsibility for operations and lettings as well as building maintenance technicians and support staff. Each management area is responsible for its own profit and loss accounts and balance sheets and thus constitutes a company within the company.
The DN building in Marieberg. Project Bocken in Stockholm City.
Activities aimed at raising the value of existing properties are conducted in the Projects & Development unit, which is responsible for new construction and redevelopment projects, procurement and follow-up, as well as and marketing and letting of new projects. Projects & Development strives to be self-sufficient in respect of practically all the expertise required in the projects, including financial control.
In 2007 Fabege stepped up the pace of its project activities, taking decisions on new project investments worth SEK 2.4 billion. Ten new team members were recruited to create a strong foundation for successful project work.
Surplus ratio, 2003–2007
| Key figures | 2007 | 2006 |
|---|---|---|
| Rental income, SEKm | 2,066 | 2,343 |
| Net operating income, SEKm | 1,312 | 1,401 |
| Profit after financial items, SEKm | 2,066 | 1,863 |
| Return on equity, % | 15.4 | 19.8 |
| Equity/assets ratio, % | 35.9 | 40.5 |
| Interest coverage ratio, times | 2.8 | 2.1 |
| Earnings per share after dilution, SEK | 9.98 | 11.74 |
| Dividend per share, SEK | 4.00 1) | 4.00 |
1) Proposed cash dividend for 2007.
| CEO's comments to the shareholders | 2 |
|---|---|
| Business concept and strategic focus | 6 |
| The Fabege brand | 8 |
| Corporate Social Responsibility | 10 |
| The Fabege share and value growth | 19 |
| Market overview | 22 |
| Fabege's business | 28 |
| Market valuation of Fabege's property portfolio | 39 |
| Tax situation | 40 |
| Administration Report | 43 |
| Financial reports | |
| Consolidated income statements | 52 |
| Consolidated balance sheets | 53 |
| Changes in consolidated equity | 54 |
| Consolidated cash flow statements | 55 |
| Parent Company income statements | 56 |
| Parent Company balance sheets | 57 |
| Changes in Parent Company equity | 58 |
| Parent Company cash flow statements | 59 |
| Notes | 60 |
| Signing of the Annual financial statements | 72 |
| Audit Report | 73 |
| Corporate Governance Report | 74 |
| Board of Directors | 76 |
| Group management | 80 |
| Articles of Association | 86 |
| Five-year summary | 87 |
| Definitions | 88 |
The formal annual report that has been audited is found on pages 43-72.
2007 was a good year for Fabege, as we continued to concentrate business to our main markets, cut vacancy levels, improved our surplus ratio and stepped up the pace of our project activities. Net lettings reached an unprecedented SEK 142 million. Despite a smaller property portfolio, profit before tax increased on last year.
Fabege's commercial property portfolio is one of the most concentrated in the market. 90 per cent of the portfolio's value is located within a radius of 5 kilometres from Kungsgatan in Stockholm City, and modern office space makes up a large share of the lettable area.
We have chosen to concentrate our business to a small number of well located and dynamic submarkets with strong growth prospects in and around Stockholm. Stockholm's inner city, Solna and Hammarby Sjöstad are our main markets, where we have strong market positions. In our main markets we strive to build large, well contained property holdings to create the best possible environment for efficient, high-quality property management in close proximity to our clients and the market.
Project development is one of the cornerstones of our business, and our organisation has a long and qualified experience of running and implementing projects. We develop and improve the properties in our project portfolio in line with changing market conditions and opportunities to generate value-added profits.
In early 2007 we could look back at a several year period of strength in the property market.At the same time the rental market was starting to really take off thanks to the strong economy, especially in the most central parts of the Stockholm market. We had already reached an advanced stage in our ongoing effort, initiated a few years previously, to shift our property portfolio to attractive high-growth locations, and therefore defined targets for optimising the results of our property management business while increasing the pace of our project activities.
Our primary operational goals are to increase the surplus ratio, cut vacancies, speed up our project activities and further concentrate our holdings to our selected main markets.
At the end of the year we were able to tick all these boxes after strong improvements in all areas. This would not have been possible without a strong commitment from the whole organisation, and I would like to say a big thank you to all our employees who through their extraordinary efforts helped us to develop the business and achieve our goals.
Yet we have no plans to settle down and take it easy. There is still a good development potential, and for 2008 our aim is to continue to improve our record on the points listed above.
Fabege generated a profit of SEK 2,066 million (1,863) before tax, or SEK 1,812 million (2,266) after tax. We thus managed to exceed last year's profit before tax despite operating with a smaller portfolio. For comparable property stock, net operating income increased by 8.2 per cent on the back of a strong rental market and improved efficiency in our property management business.
The Board proposes a dividend of SEK 4.00 per share to theAnnual General Meeting in Stockholm on 3 April.
Despite Fabege's strong performance, 2007 would prove a disappointing year for shareholders, as financial fears and changing attitudes to risk took a heavy toll on stock markets. After a bull run lasting several years – in Fabege's case (previously Wihlborgs) no less than eight years – the rising trend was broken, and stock markets ended the year in the red. For Fabege the full-year decline was -22.6 per cent.
✓ Increase the surplus ratio
✓ Step up the pace of our project activities
I am convinced that we have the best prospects and the right people to continue to deliver strong property management results and value-added profits while taking advantage of opportunities in a property market that is likely to present even more interesting business opportunities than last year.
We have a portfolio of modern properties in highly attractive high-growth locations. These remain attractive in the property and rental markets regardless of the state of the economy, ensuring a low risk while promising the best possible opportunities to generate gains from adding value.
Our focus on managing well contained holdings in close proximity to our clients has also led to a clear improvement of the efficiency and quality of our property management business. In 2007 we set a record for new lettings, which reached an all-time high of 150,000 square metres.
During the year we also stepped up the pace of our project activities, making decisions on project investments of about SEK 2.4 billion. To help run the new projects, we recruited several new highly qualified and experienced project managers. Our project lettings performed very well, and we were able to find takers for the new premises in little time. In the next few years new premises representing about 2 per cent of the total supply will be added to the Stockholm market, so the risk of excess supply is low.
We will thus continue to develop Fabege in accordance with our established business model, in which we build value through efficient property management in close proximity to our clients, improvements to existing properties and profitable property deals.
To be successful, we need to ensure that all our employees strive for the same goals and a share a common set of values. In 2007 we developed a common vision that is now being implemented in the company:
"To be the most proactive, innovative and competent commercial property company in Stockholm, and an important partner for our clients and for society as whole. We will be the natural first choice provider".
Our company culture is based on our five core values: Speed – Informality – Entrepreneurship – Business Orientation – Client Proximity. In line with its core values, Fabege aims to be a partner that rapidly, attentively and creatively fulfils its clients' expectations by remaining in close proximity to its clients and building personal relationships. Our employees are the best creators and carriers of the Fabege brand, and it is therefore crucial to our future success that our company culture is based on our core values. To ensure this, we will be conducting a training programme in the spring in which our staff will be able to gain a deeper understanding of how these values should inspire their work.
With a pool of highly skilled and motivated staff, a portfolio of modern properties in good locations with potential for further growth and an attractive project portfolio, we have a business that offers a high potential at relatively little risk. In early 2008 the rental market remains resilient. In the event that we enter a period of weaker economic growth, I believe we will be in a good position thanks to our business model, which enables us to take advantage of business opportunities in all stages of the economic cycle.
Solna, March 2008
Christian Hermelin Chief Executive Officer
Total return 2000–2007 *
* Aggregate return is calculated by reinvesting dividends paid in Fabege shares. In 2007 the aggregate return was -22.6 per cent.
Return on equity 2003–2007
The equity/assets ratio on 31 December 2007 was 36 per cent.
The interest coverage ratio in 2007 was 2.8.
Fabege offers efficient premises that are adapted to tenant requirements, primarily offices but also retail and other premises, in the Stockholm area. The company manages as well as develops existing properties, and project development plays a prominent role in the Group.
Our portfolio of 167 properties is highly concentrated to a limited number of well located sub-markets with a strong development potential. Amajority are located in the inner city of Stockholm and in Solna and Hammarby Sjöstad, where Fabege hasstrong market positions. Fabege strives to create large, well contained holdings to ensure that proximity to and knowledge about the market provides the best possible opportunities for efficient management and a high occupancy rate.
Fabege has chosen to concentrate its business to the Stockholm area, the Nordic region's largest and most dynamic office market, where business opportunities are deemed to be good throughout the economic cycle. Stockholm is undergoing rapid development, and Fabege has a significant presence in several of the capital's main upand-coming development areas, including the Norra Stationsområdet district and West Kungsholmen. In Solna Fabege has a large property holding in the number one future development area, Arenastaden/Solna Station district.
Project development is one of the cornerstones of Fabege's business, and the company has several major ongoing property projects in attractive locations as well as a large portfolio of potential project opportunities and some of the market's strategically best located land properties. Fabege develops and improves properties in response to changing market conditions and opportunities to generate strong returns.
During the years 2004–2006 Fabege implemented a major programme aimed at restructuring and concentrating its property portfolio.The portfolio is continually being developed through acquisitions and sales of properties. Property transactions are a natural part of Fabege's business model and make a significant contribution to the company's performance.
Fabege's business concept centres on commercial property in the Stockholm region, with a focus on a limited number of sub-markets with high growth rates. The aim is to create value by managing, improving and working actively with its property portfolio, both through sales and acquisitions. Accrued values must be realised at the right time.
Fabege's vision is to be the most proactive, innovative and competent property company in commercial premises in Stockholm, an important partner for our clients and for society as whole. The natural first choice provider.
Fabege's overall goal is to use its size, strength and focus to create and realise values and give its shareholders the best overall return among property companies listed on the Stockholm Stock Exchange.
Fabege aims to be one of the most profitable property companies on the Stockholm Stock Exchange (as measured by return on equity). The equity/assets ratio should be at least 30 per cent and the interest coverage ratio at least 2.0 (including realised changes in value).
Fabege aims to retain a high level of cost-efficiency and to be the leader in comparisons with other Swedish property companies.
Acquire properties with better growth opportunities than existing investment properties
Realise the potential in our improvement and project portfolios
Property management in close proximity to the client to reduce vacancy levels and increase net operating income.
Divest properties offering limited growth opportunities
Fabege has a flat organisation and a strong client focus that is clearly expressed in the company's core values (Speed – Informality – Entrepreneurship – Business Orientation – Client Proximity, see below). Stockholm's dynamic rental and property market and the high pace of business constantly create new challenges.As a client-oriented and entrepreneurial company, Fabege is continually adapting to changing market requirements and our clients' development. Each market area in Fabege serves as a company within the company with its own responsibility and ability to react rapidly to changes and identify new business opportunities.
Fabege's 140 employees are its most important resource. Practically all employees have daily contacts with some of the company clients, shareholders or other stakeholders. A key priority is therefore to ensure that our staff have the right expertise and a strong commitment to their work. Fabege offers skills development and further education through its customised training programmes, which are arranged on a regular basis. The building blocks of Fabege's company culture are its five core values: Speed, Informality, Entrepreneurship, Business Orientation and Client Proximity, and the company provides special training centring on these values to all employees as part of an effort to build a common value basis.
For the future the company's ability to attract and retain the right individuals will be a key success factor. Fabege works consistently to improve its knowledge about and strengthen the image of the company among potential future employees, especially university students.
Every year the Fabege Group buys goods and services worth around two billion Swedish kronor. Fabege has for several years been working on coordinating and centralising its purchasing activities throughout the Group. The intention is to lower the total purchasing costs by ensuring efficient use of the company's resources through rational and efficient purchasing and payment procedures.
Responsibility for coordination and control of purchasing lies with the purchasing team, which prepares framework agreements and maintains a central register of agreements. All procurement must be made on commercial terms by competitive bidding among different suppliers and entrepreneurs.
Commercial properties and projects in the Stockholm region constitute Fabege's core business. Fabege strives to gather it properties into units that can be managed efficiently while divesting anomalous properties located outside these concentrated units. Another key aspect of the strategy is to continually develop and improve the portfolio through acquisitions, sales and improvements. The aim is to consolidate and strengthen the company's market positions by concentrating on selected market segments.
Fabege aims to acquire properties offering better growth opportunities than its existing investment properties. New projects should be 35 per cent financed by the company's funds and generate a return on equity of at least 15 per cent. The average turnaround time should be 3–5 years and properties should be sold at the right time to realise the accrued values.
The logotype consists of the company name plus a graphic symbol in the form of a key. The key is a commonly used symbol for knowledge and opportunities. For an entrepreneurial, business-oriented property company the key is an ideal symbol for opening doors, metaphorically and literally. But it should be seen primarily as the key to good deals – for Fabege, clients and shareholders.
The Fabege brand should support the company's business, create value and contribute to achieving the goals for the business. Fabege's brand should be associated with the company's five core values (see page 12), which should inspire the organisation and the company culture. In line with its core values, Fabege's aim is to combine the opportunities available to a big company with the client proximity and personal relationships offered by a small company and to be a partner that rapidly, attentively and creatively fulfils its clients' expectations.
Developing the strength of the brand is crucial to the company's continued success. Developing Fabege's intangible assets also involves building strong brands in the company's prioritised areas, both for the area as a whole and for individual properties/concepts. These brands should be clearly linked to and strengthen the main Fabege brand.
Our employees are the best creators and carriers of the Fabege brand. The brand should be built from the inside out, and it is to a large extent our employees' expertise and conduct in contacts with clients, owners and other stakeholders that make up the Fabege brand.
Fabege should have a strong and clear link to the Stockholm region, and especially to the company's main markets: the inner city of Stockholm, Solna and Hammarby Sjöstad. Through its strong concentration to the Swedish capital, Fabege aims to be seen as the company that best understands the Stockholm market and the people who live there. Fabege is an integral part of the Swedish capital, hence the pay-off: A part of Stockholm.
Fabege's business and market are concentrated to a geographically limited area in the Stockholm region. This creates clear advantages in terms of the costs and efficiency of the company's marketing work. In 2007 Fabege continued to invest in its brand through planned and structured communications. In concrete terms, this involved advertising in selected media and using the companies' own buildings as carriers of messages. In 2008 Fabege will continue to develop its marketing communication.
Sponsorship exposes and strengthens the Fabege brand. In 2007 the company completed a three-year sponsorship of the internationally acclaimed Polar Music Prize. In early 2008 a new agreement has been concluded with the Swedish Football Association under which Fabege will become an official partner. The agreement runs for three years and gives Fabege wide opportunities to expose its brand in connection with the team's matches and its players.
Fabege makes regular measurements of brand awareness and attitudes. These surveys form the basis for our continued branding activities.
The Fabege brand and company name have an older and a more recent history. When the current Fabege was created in spring 2005 this was the third time that the name Fabege was given to a property company. The name has its origins in a company created by one of the leading property moguls of the 1980s, Birger Gustavsson. Originally, the name Fabege was coined as an abbreviation for Fastighetsbolaget Birger Gustavsson. However, today's Fabege has very little to do with Birger Gustavsson's creation. The then Fabege was acquired by Näckebro, which in turn was bought by Drott. Drott was then divided up into two companies, of which one was given the name Fabege. In 2004 this company was acquired by Wihlborgs Fastigheter, which changed its name to Fabege the following year.
Today's Fabege has the same Corporate Identity Number as the former Wihlborgs Fastigheter and can thus trace its origins to the building firm set up by master-builder O.P. Wihlborg in Malmö in 1924.
1990 Wihlborgs' B shares are listed on the O List of the Stockholm Stock Exchange..
1993 Bergaliden becomes the new main owner of Wihlborgs.
1996 In December Wihlborgs' B shares are listed on the A List of the Stockholm Stock Exchange.
1997 In the spring Wihlborgs completes the acquisition of M2 Fastigheter. In September the Board of Wihlborgs submits a public offer to acquire Klövern Fastigheter AB.
1998 At the beginning of the year Wihlborgs completes the acquisition of Klövern Fastigheter AB. On 13 April 1998 Wihlborgs puts in an offer for Fastighets AB Storheden. The merger is carried out in late summer the same year.
2000 High-voting A shares are converted into B shares.
2001 The main owner Bergaliden sells its entire shareholding of 30.2 per cent in Wihlborgs. Wihlborgs acquires Postfastigheter along with its portfolio of 73 properties. In December Wihlborgs' shares are listed on the O List of the Stockholm Stock Exchange.
2002 Wihlborgs sells 60 properties in non-priority locations to Adcore, which is reorganised into a property company under the name of Klövern AB. In June Wihlborgs effects a 1:5 reverse split. In December Wihlborgs acquires the remaining 25 per cent of the shares i Klara Zenit.
2003 Wihlborgs acquires shares in Drott AB (later divided into Bostads AB Drott and Fabege AB), and becomes the company's largest shareholder during the year. At the end of the year Wihlborgs sells Klara Zenit for SEK 2,950 million, generating a profit of SEK 400 million.
2004 Wihlborgs completes its acquisition of Fabege AB after a public offer to other shareholders of the company, adding about 150 commercial properties to its portfolio. In December the company announces its proposal to spin off its Öresund properties to the shareholders and concentrate the business to the Stockholm region.
2005 The Öresund business is distributed to the shareholders and listed on the O List of the Stockholm Stock Exchange under the name of Wihlborgs Fastigheter AB. "Old" Wihlborgs is thus concentrated to the Stockholm region and changes its name to Fabege AB. Fabege divests properties worth SEK 14 billion during the year. In December the company concludes an agreement to acquire 82.4 per cent of the shares of Fastighets AB Tornet.
2006 Fabege acquires Fastighets AB Tornet along with its portfolio of 104 properties. Other acquisitions include the Wenner-Gren Center and Solna Business Park. Fabege's property holdings in Kista and Täby are sold to Klövern for SEK 4 billion. Fabege's property transactions total SEK 28 billion, of which SEK 12 billion are sales and SEK 16 billion purchases.
2007 Fabege continues to concentrate its business to its main markets, Stockholm Inner City, Solna and Hammarby Sjöstad. 17 properties are sold and 8 are acquired. In June the company effects a 2:1 share split, doubling the number of shares.
Organisation
As a significant property owner in the Stockholm region, Fabege provides good work environments for businesses, public authorities and organisations in Sweden's most important region. About 60,000 people work in properties that are managed and developed by Fabege. Fabege also provides employment to 140 people.
As a listed company, employer and property owner, Fabege has a responsibility to its clients, suppliers, local communities, public authorities, employees and shareholders. Fabege believes long-term profitability requires that the company take account of the financial as well as the social and environmental dimensions. Being able to offer our customers premises with strong environmental and energy efficiency credentials improves our competitiveness and good relationships with our main stakeholders improves our overall ability to run a successful business. In a long-term perspective Fabege's conscientious approach to doing business thus helps to build shareholder value.
To further intensify our work on climate issues and other areas of concern, Fabege adopted a new, more detailed environmental policy in 2007. Since a number of years, systematic improvement of energy efficiency is one of Fabege's top priorities in its environmental work. The company's target is to cut energy use by 5 per cent a year in each individual property. Since 2006, Fabege has been operating on the basis of a common set of values and ethical guidelines, which, together with the company's other policy documents, provide guidance on responsible enterprise to management and staff.
Fabege's organisation is continually being developed in response to changing business requirements. In the last few years the pace of change has been very high as a result of acquisitions and the restructuring of our portfolio. Fabege's 140 employees need a high degree of preparedness for change and openness to new challenges. To be successful as an owner and manager of properties, Fabege is entirely dependent on qualified and highly committed staff. Our clients' view of Fabege is to a large extent determined by the commitment and professionalism of our employees. Their skills development has a direct impact on Fabege's competitiveness.
To support the organisation, Fabege has formulated a number of values that underpin our company culture. These fundamental values must inspire our work and our relationships with clients and other stakeholders. The values must guide our efforts to achieve Fabege's vision: "To be the most proactive, innovative and competent commercial property company in Stockholm, an important partner for our clients and for society as whole. The natural first choice provider".
The five core values are Speed, Informality, Entrepreneurship, Business Orientation and Client Proximity. These values lie at the heart of a company culture that stimulates and encourages individual initiative and creative solutions.
Fabege has a flat organisation with short decision-making paths, which enables us to take swift action. Fabege is inspired by an entrepreneurial spirit in which individ-
| Age | Woman | Men |
|---|---|---|
| –19 | 0 | 1 |
| 20–29 | 11 | 5 |
| 30–39 | 16 | 26 |
| 40–49 | 17 | 32 |
| 50–59 | 8 | 12 |
| 60–69 | 5 | 7 |
| 57 | 83 |
Proportion of men resp women in management positions (totally 18 persons)
ual initiative is rewarded. Our employees are thus given a large measure of freedom and are encouraged to innovate. Fabege and its staff aim to combine the opportunities available to a big company with the client proximity and personal relationships offered by a small company. Fabege wants to build lasting client relationships with development potential through a personal and professional approach.
At year-end 2007 Fabege had 140 employees, which was slightly less than in 2006. Staff turnover was 18 per cent (32%). The average period of employment was 5.4 years, unchanged from 2006. Ensuring that Fabege is able to attract talent also in future requires continued efforts in human resources, which in turn requires that the company work continuously on creating a good work environment while promoting the wellbeing of its employees. In 2008 the company will conduct an employee survey that will be used as a basis for priority-setting in the time ahead.
All permanent Fabege staff receive compensation, in addition to their fixed salaries, from a profit-sharing fund established in 2000. The compensation is paid in the form of Fabege shares and is linked to the company's profitability, defined as return on equity. The shares are issued personally to each employee and are tied up for a period of five years after the allocation. The purpose of the profit-sharing fund is to encourage the employees to develop the company and achieve the adopted targets. It should serve as a long-term incentive for our staff and emphasise the importance of generating financial value for Fabege and its employees.
Åsa Lindblom, Assistant Property Manager.
Johan Rudberg, Director of Business Development.
Janneth Rodriguez, Assistant Economist.
The average age in the Group has fallen over time as a result of the recruitment of younger staff. The average age is now 42, which is the same as in 2006. Fabege supports a balance between work and leisure time and encourages fathers as well as mothers to take time off to care for their newly-born children. The company therefore pays parental leave compensation that goes beyond that provided by the National Insurance Office. Parents receive 90 per cent of their salary for a period of 120 days, regardless of salary level.
Equal opportunities is a factor that is taken into account in all recruitment and promotion decisions. The share of female staff was 41 per cent, up from 39 per cent in 2006. Among white-collar workers the share of women was 53 per cent (52%).
Fabege aims to offer a safe and healthy work environment to its employees. In 2007 the company set up a safety committee, which is gradually auditing the business with a view to eliminating any health risks to the company's employees. Fabege is committed to promoting health and fitness, and has introduced health and fitness checks for all employees. Each year all full-time employees receive vouchers worth SEK 3,000, which can be used at a wide range of fitness and sports facilities.
The company has a group health insurance policy covering all employees, which ensures that all employees receive qualified care in case of illness.
Our health work is closely tied to our ambition to ensure a low level of sick leave. Total sick leave in the Group was 2.85 per cent in 2007, down from 3.97 per cent in 2006. Out of this figure, long-term sick leave (60 days or more) represented 57.86 per cent, down from 63.84 in 2006. Average short-term sick leave was 2.92 days per employee, which is an improvement on 2006, when the figure was 3.41.
Five core values form the foundation for the company culture. These are, without order of priority:
A flat organisation with short decision-making paths enables to act swiftly, whether in concluding a transacting or solving a problem encountered by a tenant. An employee of Fabege doesn't complicate things, but seeks to find simple, efficient solutions.
All members of staff must be prepared to step in wherever they are most needed for the moment. Internal communication is characterised by humility and honest, informal and personal dialogue.
Entrepreneurship is a key driving force behind the Group's development. This includes far-reaching decentralisation and individual responsibility. Staff are encouraged to be innovative and take initiatives.
Employees are results-oriented and cost-conscious.
Employees must operate in close proximity to our clients, remaining attentive to their needs and requirements and always striving to further improve our client relationships.
"I try not to complicate things, but to find quick and simple solutions when something needs to be fixed. What matters most to meet as that our client is happy."
Mikael Rintala, Building Maintenance Technician in Stockholm City
The stairwell in Bocken 39, a property on Kungsgatan, has retained most of its original features.
The high pace of change in Fabege often involves changes in the content of the work for individual employees, which puts pressure on both the company and individual employees to raise their level of competence. In 2007 Fabege actively promoted skills development for several employees, through English tuition, both individually and in groups. A growing share of Fabege's tenants are international companies, especially in the inner city of Stockholm.
In 2007 an induction course for new employees was introduced, which focuses on knowledge of Fabege's core values. This helps to improve the understanding of our vision and value base and brings forward the point where new employees can better represent the company before clients. Several employees have now completed individually tailored leadership training programmes. Fabege's executives are important representatives for and carriers of the company's vision and value basis, and their expertise and training is therefore particularly important. A priority task for the future is to train skilled managers from within the organisation.
In 2008 Fabege will be working intensively on leadership development. The upcoming employee survey will be used as a basis for preparing individual development plans. This will strengthen Fabege as an employer and improve opportunities for talented individuals to pursue a career in the Group. More and better career paths within the company will make Fabege an even more attractive employer, which should help to further reduce our staff turnover and promote equal opportunities.
Property Management and Projects & Development make up the operational organisation. Property Management consists of property management staff as well as a marketing unit for marketing and lettings of properties. The unit is divided into four property management areas: City, Malmarna, Solna Business Park and Arenastaden.
Fabege strives to build concentrated property holdings that enable efficient property management in close proximity to our clients. This also creates good opportunities for optimising the organisation. To be able to rapidly and efficiently meet tenant needs and requirements, the management of properties is handled primarily by in-house staff.
Projects & Development is responsible for new building and redevelopment projects, environmental issues, purchasing and operations optimisation. The unit works closely with Property Management. We work to ensure that Projects & Development has access to all the knowledge and experience that is required for the development and financial control of projects. Construction services are purchased externally. In addition to the operating units, Fabege has three Group-level units: Business Development, Finance and Information/IR/Personnel.
The work on promoting environmental responsibility is aimed at reducing and preventing negative effects on the environment, thereby contributing to sustainable development and helping to reduce the greenhouse effect.
Fabege does not conduct activities that are subject to permit and notification requirements, but there are a small number of facilities that are subject to notification requirements, such as bedrock heating and seawater cooling plants. The company's tenants include a few that conduct activities which are subject to permit requirements. Fabege is not involved in any ongoing environmental disputes.
In 2007 Fabege adopted a new environmental policy that is designed to intensify the company's work on energy and climate issues. This means a raising of ambition in terms of reduced energy use and other aspects of Fabege's environmental work. The new policy is more detailed than its predecessor, taking in areas such as transports, waste management, environmental training and choice of building materials in conversion and extension projects.
In 2007 the Swedish government introduced, through the National Board of Housing, Building and Planning, a new requirement for property owners to conduct energy assessments for their properties. In an energy assessment an independent expert works together with the property owner to produce data on energy consumption in the building. The results may lead to energy-saving measures which both cut the cost of electricity and help to reduce the impact on the environment. Energy assessments are one component of the Swedish Parliament's environmental target of cutting energy consumption by 20 per cent by 2020 and by 50 per cent by 2050 compared with 1995 levels. In early 2008 Fabege had completed energy assessments for 20 properties. Work on energy assessments will continue through 2008, and the goal is to have completed assessments for all properties by the end of the year. The ambition is that the assessments will make our tenants more aware of their energy costs and increase their willingness to reduce energy use in a joint effort with Fabege.
Since a number of years, systematic improvement of energy efficiency in Fabege's properties is one of the company's top environmental priorities. The ambition is to optimise operations costs and energy use based on the characteristics of each property and to develop an operations strategy for each property. Fabege's ambitious target is to cut energy use by 5 per cent a year in each individual property.
A key means by which Fabege can promote the environment is to work with its clients to cut energy consumption for heating buildings in winter and cooling in summer. Our tenants want to save energy partly for economic reasons, but also because they, too, want to help reduce their impact on the climate. By providing data on energy use, Fabege can thus help its tenants in their environmental work.
Our operational activities are supported by five full-time employee equivalents in the
| Water use, m3 | 968,615 |
|---|---|
| Energy use, MWh | 192,761 |
| of which: | |
| Heating | 108,147 |
| Cooling | 11,396 |
| Electricity | 73,218 |
| Renewable energy, MWh | 124,695 |
| CO2 emissions, tonnes | |
| (Heating, electricity, cooling) | 7,609 |
areas of environment, work environment, safety and other social issues. The work is documented in Fabege's nyckelknippan ("bunch of keys") database, which is used to store information about the company's properties, e.g. government inspections, fire protection work, radon measurements and other assessments and inspections.
On the energy side we have, since a few years, been using a web-based database of energy consumption data. Based on the figures provided, we then make regular followups and evaluations to optimise operations in our properties. The goal is to systematically and in a structured manner gather common procedures in a single business management system and make environmental work a natural part of Fabege's business.
The energy consumption and improvement potential of buildings have become significant factors in connection with the acquisition and sale of properties, and Fabege's energy specialists are increasingly being drawn into the acquisition process. Analyses are made to determine the property's energy use and environmental risks to provide data for a more accurate assessment of its financial value.
Together with Solna Municipality and Stockholm Transport (SL), Fabege initiated a partnership called Hållbart resande (Sustainable Travelling) in 2007. The initiative is aimed at encouraging more people to use public transport to get to and from work in Solna Business Park, where Fabege owns the majority of the properties. SL has expanded its service by adding another stop, with part-funding from Fabege. In exchange Fabege has received SL's business card for public transport to hand out to its tenants. Employees at Fabege's head office are also encouraged to use public transport rather than travel by car.
Under Fabege's car policy from January 2007, preference is given to environmentally classified cars and cars running on electricity, hybrid engines or alternative fuels. At year-end 2007 Fabege's vehicle fleet comprised 74 company cars and service vehicles. 100 per cent of the fleet was environmentally classified and just over 28 per cent of these vehicles were hybrid/electrical or ethanol cars. As of 2008 Fabege will introduce a new, environmentally improved car policy that is adapted to current definitions of green vehicles with a compulsory requirement to always choose a green vehicle when purchasing a company car or service vehicle.
A new regulation on PCBs, a group of industrial chemicals that are dangerous to health and the environment, was introduced in 2007. Under the regulation, owners of industrial buildings or apartment buildings constructed between 1956 - 1973 are required to conducts PCB assessments for these buildings. Fabege is implementing the required measures. In accordance with government requirements, Fabege is also assessing the presence of radon in residential and school buildings.
Fabege works continuously to improve its waste management. In properties where
Fabege is responsible for waste management and that Fabege has owned for some time waste is already sorted at source. When new buildings are acquired sorting at source for recycling is introduced. Fabege also makes continual improvements to refuse rooms to enable sorting and recycling of more types of waste. At year-end 2007 an average of 9 different types of waste were being sorted and recycled at Fabege's properties.
Fabege has an environmental programme for new building projects and redevelopments that covers materials, waste management, building methods and other factors. When a building is redeveloped or renovated a demolition plan is drawn up. In new builds and redevelopment projects only building materials and products with limited environmental impact may be used. In all projects a plan for handling of waste products is prepared together with the building contractor and waste management contractor. The full text of Fabege's procurement policy can be read on our website, www.fabege.se. It contains a set of environmental requirements as well as other requirements, e.g. that our suppliers have a collective wage agreement.
Fabege has for several years been working on coordinating and centralising purchases of products and services throughout the Group. The company sets high standards for the suppliers it engages.After the evaluation, a framework agreement is concluded with the best supplier in each area based on the following criteria:
Fabege gets involved in social issues that have a close connection to the company's business. The company wants to be a "good citizen" in those places where it operates and owns properties. Good relationships with the local community and local stakeholders are a prerequisite to success in the property industry. A natural part of this responsibility is to develop the properties and further increase the attractiveness of the areas in which the properties are located. Fabege collaborates with local authorities and universities to identify common solutions that help to develop society as well as the company.
In recent years Fabege has invested significant amounts in the company's residential properties in Tensta and Rinkeby, two suburbs of Stockholm. It goes without saying for Fabege that all of the Group's properties must live up to a high standard of quality as well as Fabege's own requirements for a good living environment. In Tensta and Rinkeby Fabege also offers summertime work to local youths. In summer 2007 Fabege
Fabege is a member of Belok, the Swedish Energy Authority's purchasing group, which consists of the Energy Authority and Sweden's largest property owners. The group runs various development projects focusing on energy efficiency and environmental issues. The partnership was initiated by the Energy Authority in 2001. For more information, see www.belok.se.
offered 30 such jobs. This is one way of creating a greater understanding for Fabege's business among local residents and of providing stimulating employment to young people during the summer months.
Fabege has a commitment to and supports sports activities for young people. The company supports the basketball club Akropol, which conducts extensive youth activities in Tensta and Rinkeby, where Fabege owns residential properties. In connection with the building of the new national arena in Solna, Fabege launched a new initiative to support youth football through a partnership with the Swedish Football Association.
Another social commitment concerns Fabege's future access to talented individuals. The ability to attract skilled and well educated staff is a strategically important issue for Fabege. Fabege participates in labour market days and supports various student arrangements. Students from the Royal Institute of Technology are offered summer jobs and project employment, which in many cases result in employment at a later stage.
Fabege also supports Hammarby Artport, which is working on project management of public art in Hammarby Sjöstad on behalf of Fabege.
Fabege was ranked among the top five companies in the CDP Leadership Index 2007, in the low emissions category. This is the first Nordic survey published by the Carbon Disclosure Project (CDP), which ranks companies based on the transparency of disclosures on their own climate impact. CDP is a global partnership among 380 institutional investors that is aimed at facilitating dialogue between investors and businesses on climate issues.
Fabege has been voted one of the 100 most sustainable companies in the world in 2007 by Innovest, a research company. Innovest has evaluated how companies in 16 countries manage environmental and social issues, including emissions management, energy efficiency, work conditions and health & safety. Fabege is one of four European property companies to make it into the top 100.
As of 2008 Fabege is a member of CSR Sweden, a Swedish business network for corporate social responsibility. The move is part of our ambition to strengthen Fabege's commitment to CSR issues in dialogue with its stakeholders. CSR Sweden works to encourage CSR activities among Swedish businesses through dialogue and offers a forum for knowledge exchange among companies wishing to strengthen their relationships with stakeholders.
Share Trend 2007
Total return 2000–2007 *
* The calculation of total return is based on the value of the dividend payed being reinvested in Fabege shares.
* Fabeges board of Directors proposes a cash dividend of SEK 4.00 per share. 2003 2004 2005 2006 2007 2008
With a market capitalisation of some SEK 12 billion (31 Dec 2007), Fabege is one of the largest listed property companies in the Nordic region. The company's shares are included in the Large Cap segment of the Stockholm Stock Exchange.
Fabege's share declined in value during the year from SEK 91.75 to SEK 66.25 (adjusted for redemptions), a fall of 27.8 per cent. The OMX Real Estate Index, which measures the performance of property companies, declined by 20.6 per cent. The aggregate return on the shares, including reinvested dividends of SEK 4.00 per share and redemption proceeds in the form of Klövern shares, was -22.6 per cent.
In the last few years turnover in Fabege's shares has increased steadily, to 248 million shares in 2007 (108), representing a total value of SEK 22.6 billion (16.7). This is equivalent to a turnover rate of 139 per cent (108) of the average number of outstanding shares. The turnover rate on the Stockholm Stock Exchange as a whole in 2007 was 139 per cent. On an average day of trading 990,000 Fabege shares (430,000) exchanged hands in 729 transactions (400). A round lot in Fabege comprises 100 shares.
At Fabege's AGM on 27 March 2007 the shareholders passed a resolution to carry out a 2:1 split, doubling the number of shares.
In 2007 a number of holders of convertibles also continued to convert their convertibles into Fabege shares (see more below). The share capital at year-end was SEK 5,086 million (5,030), represented by 178,458,921 shares (100,599,382). All shares carry the same voting rights and entitle the holder to the same share of the company's capital.
The 2007AGM authorised the Board of Directors to buy back shares during the period until the 2008 AGM. Acquisitions must be made by purchase on the Stockholm Stock Exchange and are subject to the provision that the company's share of the total number of outstanding shares not exceed 10 per cent. The authorisation was aimed at enabling the company to continuously adapt its capital requirements and thereby improve shareholder value. In 2007 7,635,622 shares (5,435,400) were acquired for SEK 543 million (average share price SEK 71.05).At year-end Fabege had bought back 7,635,622 shares, or 4.28 per cent of the number of shares in the company.
When "old" Wihlborgs acquired "old" Fabege in 2004 many shareholders opted to receive payment for the shares in the form of convertible bonds ("convertibles"). 6,055,578 convertibles worth a total of SEK 639 million were issued. As at 31 December 2007, Fabege has a convertible bond loan with a book value of SEK 47 million (nominally SEK 45m). The convertibles bear interest at 5.25 per cent and mature on 1 October 2009.The bonds can be converted up to 1 September 2009. The conversion
Distribution of shareholding per Category at 31 January 2007
Source: SIS Ägarservice/VPC
| Share of capital | |
|---|---|
| Country | and votes, % |
| Sweden | 59.5 |
| USA | 18.9 |
| UK | 6.4 |
| Netherlands | 3.6 |
| France | 2.5 |
| Luxembourg | 2.4 |
| Australia | 1.1 |
| Switzerland | 1.1 |
| Ireland | 0.8 |
| Belgium | 0.8 |
| Japan | 0.6 |
| Other countries incl. owners | |
| of ≤ 500 shares | 2.3 |
| 100 | |
price is SEK 41.80. Full conversion would result in an increase of 1,069,864 shares. In 2007 conversions resulting in the issue of 25,763 new shares were made. If all remaining convertibles are converted into shares the additional shares would result in a dilution of 0.6 per cent.
Fabege shall pay a dividend to the shareholders comprising that part of the company's profit which is not required for the consolidation or development of the business. In current market conditions this means that the dividend will comprise at least 50 per cent of the profit from the management of the company's property portfolio and realised gains from the sale of properties.
The Board proposes that the 2008 AGM resolve to pay a dividend of SEK 4.00.
In 2007 Fabege's shareholding in Klövern AB was distributed to the shareholders through a redemption procedure in which each shareholder received 8 shares in Klövern for every 16th share in Fabege. Together with the ordinary cash dividend of SEK 4.00, this resulted in a total transfer of value to the shareholders of about SEK 2.0 billion.
On 31 January 2008 Fabege had 32,663 (35,802) shareholders. The largest owners were Brinova, with 13.6 per cent of the number of shares, followed by Maths O Sundqvist and Öresund with 11.5 and 4.3 per cent, respectively. At the end of January the ten largest shareholders held 38.6 per cent of the shares. Foreign share ownership in Fabege was 40.6 per cent.
All shareholders of Fabege have been asked whether they wish to receive printed financial information by mail. To shareholders requesting this Fabege sends interim reports for the first, second and third quarters as well as the annual report. The year-end financial statement is not printed. All financial reports and press releases are available in Swedish and English on the company's website, www.fabege.se. The website also contains information about Fabege's share price.
| No. of shareholders | Share of no. of shareholders, % |
No. of shares | Share of capital and votes, % |
|
|---|---|---|---|---|
| 1–500 | 21,864 | 66.9 | 4,185,738 | 2.5 |
| 501–1,000 | 4,939 | 15.1 | 3,746,549 | 2.2 |
| 1,001–5,000 | 4,629 | 14.2 | 9,788,928 | 5.7 |
| 5,001–10,000 | 572 | 1.8 | 4,044,221 | 2.4 |
| 10,001–100,000 | 500 | 1.5 | 13,917,247 | 8.2 |
| 100,001–1,000,000 | 140 | 0.4 | 46,278,660 | 27.1 |
| 1,000,001– | 19 | 0.1 | 88,719,126 | 51.9 |
| Total number of outstanding shares |
32,663 | 100 | 170,680,469 | 100 |
Source: SIS Ägarservice/VPC Source: SIS Ägarservice / VPC
ABG Sundal Collier Jonas Andersson
D. Carnegie Fredrik Skoglund Erik Granström
Deutsche Bank Hans Derninger
Glitnir Bertil Nilsson
HQ Bank Olof Nyström
Handelsbanken Markets Tobias Kaj
Kaupthing Bank Sverige Erik Nyman Daniel Anderbring
Kempen Robert Woerdeman
Merrill Lynch Bernd Stahli
SEB Enskilda Bengt Claesson
Standard & Poor's Erik Söderlund
Swedbank Andreas Daag
UBS Investment Bank Albin Sandberg
Stock symbol: FABG ID: SSE861 ISIN code: SE0000950636 Listed since 1990 Marketplace: Stockholm Stock Exchange Segment: Large Cap Round lot: 100 shares
In 2007 shareholders with holdings that are not evenly divisible by 100 (one round lot) were offered to either complement their holding by buying shares or to sell shares, free of commission, to the nearest round lot. The offer had a take-up of 44 per cent, with roughly 10,900 shareholders requesting to either purchase (82%) or sell (18%) shares under the offer.
Equity pershare as at 31 December was SEK 67 (64). Net asset value pershare, excluding deferred tax on goodwill – properties, was SEK 76 (73).
| Share of capital | ||
|---|---|---|
| No. of shares | and votes, % | |
| Brinova | 23,291,092 | 13.6 |
| Maths O Sundqvist | 19,557,700 | 11.5 |
| Öresund | 7,274,626 | 4.3 |
| Swedbank Robur Fonder | 3,468,647 | 2.0 |
| Second AP Fund | 3,117,203 | 1.8 |
| SEB fonder | 2,726,009 | 1.6 |
| Mats Qviberg and family | 2,358,786 | 1.4 |
| DFA funds (USA) | 1,912,170 | 1.1 |
| SHB/SPP fonder | 1,192,376 | 0.7 |
| Seventh AP fund | 1,075,045 | 0.6 |
| Cogent funds (AUS) | 988,832 | 0.6 |
| Blue Sky Group Stichting | 859,098 | 0.5 |
| SEB-Trygg Försäkring | 823,420 | 0.5 |
| Folksam Försäkring | 764,207 | 0.4 |
| Other foreign owners | 65,497,759 | 38.4 |
| Other owners | 35,773,499 | 21.0 |
| Total no. of outstanding shares | 170,680,469 | 100.0 |
| Share buybacks | 7,778,452 | |
| Total no. of registered shares | 178,458,921 | |
Source: SIS Ägarservice/VPC
By DTZ Sweden
Annual production of new buildings and degree of vaccancy, Stockholm market.
Office staff employed, annual change Stockholms market
For a number of years investors have been expecting rents in the Stockholm property market to rise, and in the last 12 months their expectations have been realised. Rents in the central parts of Stockholm have increased by 5-15 per cent and in the great majority of sub-markets vacancy rates have fallen sharply. The underlying economy is strong and prospects of further increases in rents are deemed to be good.
Office employment, which is the crucial determinant of demand for office space, remained relatively weak up until 2006 in view of the strength of the economy. This was largely due to the fact that the growth was export-led as well as the industrial sector's success in implementing productivity improvements and restructuring measures. Today the office-intensive sectors have taken over, thanks to strong domestic demand, and are driving the Stockholm economy forward. Office employment in Stockholm increased by 3.9 per cent in 2007 and is expected to grow by a further 2.9 per cent in 2008, despite downward adjustments of economic forecasts in late 2007.
In late 2007 confidence indicators for office-intensive industries point to resilient optimism among business owners. The indicator is now more or less in line with its peak from 2000. The indicator for businesses'reported shortage of staff is also at a high level.
The number of people employed in office-intensive industries in the Stockholm market is expected to increase in the years ahead, with a forecast 20,000-25,000 new office employees in 2008 - 2009. Based on a forecast increase in employment of this magnitude, and assuming that these new employees use an average of 20 sqm of office space, demand for office space in Stockholm's sub-markets is expected to increase by 400,000-500,000 sqm over the next few years.
With 12 million sqm, Greater Stockholm's office market is the largest office market in the Nordics. The most central office market, CBD, represents about 1.8 million sqm.
Outside Stockholm City there are a number of large and important office sub-markets, of which Kista, West Kungsholmen, Frösunda, Solna and Marievik/Liljeholmen are the most established.
Supply has increased marginally in recent years. In the last three years only about 130,000 sqm have been added. In the next two years approximately 230,000 sqm will be added to the existing supply, representing an increase of about 2 per cent. For projects that are expected to be completed up until 2009 a large share of the space is already under contract, and DTZ deems that the risk of over-supply of newly developed premises is very low.
Based on the amount of new office space and the forecast demand, there is thus room for an increase in net lettings of about 170,000-250,000 sqm in the Stockholm market in 2008–2009.
Since mid-2000 vacancy rates in the office market as a whole have increased from 3-4 per cent to 10-11 per cent at the end of 2007. In central Stockholm the vacancy rate peaked at around 12 per cent in the first quarter of 2004. Today vacancy rates are just
| Property company | sqm |
|---|---|
| Vasakronan | 480,000 |
| Fabege | 415,000 |
| AMF | 395,000 |
| AFA | 260,000 |
| AP Fastigheter | 240,000 |
| Property company | sqm |
|---|---|
| Fabege | 410,000 |
| Humlegården | 153,000 |
| AP fastigheter | 104,000 |
| Vasakronan | 74,000 |
| Mengus | 71,000 |
| Property company | sqm |
|---|---|
| Fabege | 83,000 |
| KB Textilvägen | 9,000 |
| BRF Sjöstaden | 6,000 |
| Skanska | 5,000 |
| Stockholmshem | 3,000 |
Source: DTZ Sweden
under 8 per cent in this sub-market. In the rest of Stockholm vacancy rates peaked slightly later in 2004 and have improved markedly in 2007. Modern premises in all submarkets still have significantly lower vacancy rates compared with older premises, but the biggest improvement in vacancy in 2007 occurred in premises of a good to fairly good quality. These premises have gone from being stone-cold to something that tenants are willing to accept if the property owner makes normal tenant adaptations.
Vacancy rates in the Stockholm office market are expected to fall further in the next few years as a result of the forecast increase in demand and the relatively stable supply. DTZ believes modern office premises will continue to show lower vacancy rates than the rest of the market, and that central locations and locations with good transport connections will show very low vacancy rates.
Rents fell sharply in the first few years of the 21st century. Levels stabilised only in 2004 and 2005, and then started to rise at a slow pace in 2006 for the most attractive office space. In 2007 rents in most sub-markets have improved by 5-10 per cent, and for high-quality offices in the most central locations rents of SEK 4,500/sqm have become established. DTZ expects to see further improvements in rents in 2008 owing to strong demand and a limited increase in supply.
The most central parts of Stockholm, known as the Central Business District (CBD), are attractive to tenants from a number of perspectives. The central location is highly sought after, transport connections are excellent and the level of local services in the area is very high. A move to CBD is generally seen as prestigious, and the addresses in the area are widely known. In many industries a central location is a very high priority, and price sensitivity is low. The area's attraction is reflected in the high rents compared with other areas.
In recent years CBD has expanded to also comprise the area around the Central Station and Blekholmen as well as the new office buildings being erected around Norra Bantorget. The supply of office space in this area has thereby increased to about 1.8 million sqm. High-quality modern office properties and space-efficient office plans have been and continue to be in short supply, but in 2009 - 2011 at least 80,000 sqm of newly built office space will be added to the market.
Over the last year rents have increased. The cost of renting office premises in this sub-market ranges from SEK 3,200-4,500/sqm. Vacancy rates for high-quality office space are estimated at 6-7 per cent, with higher levels for older premises. We believe a large share of the forecast increase in employment will initially be allocated to modern offices in CBD. As the supply of modern offices and opportunities for new builds in the area are still limited, the increased demand should stimulate an increase in rents for high-quality offices in CBD
The other parts of the inner city of Stockholm, i.e. Central Kungsholmen, Östermalm and Södermalm, are also relatively attractive in terms of location and local services. Transport connections are good and the areas are well known. The supply of offices varies both in terms of quality and age. There are a small number of modern office buildings in these areas, and although some new builds and conversion projects are under way, it is clear that modern offices are in short supply also in these sub-markets. Vacancy rates in these sub-markets are about 12 per cent and rents range from SEK 1,900-3,600/sqm. Our assessment is that these four sub-markets will experience an increase in demand in the years ahead. All these areas could be regarded as substitute markets for CBD, and some of the increased demand that spills over from there will benefit these areas.
Solna's office market is estimated at about 1 million sqm, which is about 9 per cent of the total supply in Greater Stockholm. The Solna office market can be divided into five sub-markets: Solna Strand, Solna Centrum, Solna Business Park, Solna Station and Frösunda. The municipality of Sundbyberg includes the nearby, competing sub-markets Sundbybergs Centrum and Hallonbergen/Rissne.
Solna Strand is a part of Solna that largely consists of large-scale office buildings erected mostly in the 1970s and 80s. In the late 1990s the area experienced an upsurge, as a number of major tenants relocated to the area, pushing rents higher. Rents for goodquality office space soared from SEK 1,000/sqm to SEK 1,400-2,000/sqm in only a few years and have remained at these levels since then. Solna Strand's main competitive asset is its excellent transport location, with the nearby Vreten metro station and access to commuter trains. The area's property owners have also taken a joint initiative to market the area with the aim of attracting more tenants. Vacancy rates in the area range from 8-12 per cent.
Solna Business Park (Vireberg) has a number of very high-class office properties that have been upgraded in recent years, but there are also a number of office properties of considerably lower standard. In the last 4–5 years the office park has established itself as a strong office location, as large and attractive tenants such as ICA, EDB, Coop and IFS have located their head offices to the area. As in Solna Strand, rent levels in the area have increased from SEK 1,000/sqm a few years ago to SEK 1,400–2,200/sqm today. Vacancies in the area are concentrated almost entirely to poor-quality offices, but for the area as a whole the vacancy rate is about 10-15 per cent.
Solna Centrum is primarily a retail centre that includes a number of office premises of average quality. Close to the shopping centre there are a number of office blocks around Skytteholmsvägen and Sundbybergsvägen, providing offices of low to medium quality. The Råsunda football stadium adds some higher-quality office space to the overall supply in the sub-market. The metro station and bus terminal provide good access to the sub-market. Rents in the area range from SEK 1,300-2,200/sqm.
Like Solna Strand, Solna Station was built largely in the 1970s and 80s. Here, too, there are large office units of varying quality. In recent years property owners in the Whether you're dealing with a big or a small property deal makes little difference. The preparations before any transaction are always the same. It´s a teamwork, we just have to roll up our sleeves and grab what has to be done"
Torbjörn Fager, Business Developer
Fabege's head office is located on Dalvägen in Solna, in the heart of Arenastaden ("Arenatown"), where the new national arena, Swedbank Arena, will be built.
Solna Business Park.
area have suffered from high vacancy rates, but the lettings situation has improved considerably in recent years. Planning and preparations for the new national arena and surrounding blocks are currently under way. As this work progresses the area's attractiveness will increase. The area has good transport connections thanks to the commuter train services, with a station centrally located in the area. Rents are similar to those in Solna Strand.
Frösunda is another strong office area in Solna. The area's location close to the E4 motorway and Solna station ensures good access to transport and provides excellent locations for billboards and signage. The area contains modern office properties of a very high standard. Although created relatively recently, the area has rapidly established itself as one of Greater Stockholm's most popular office locations. Rents in the area range from SEK 1,800-2,400/sqm for modern office space, with older premises fetching SEK 1,500-1,800/sqm. The area's supply of offices is still growing, and if the space currently being constructed is included, the vacancy rate would be about 15 per cent.
In the last decade Hammarby Sjöstad has been one of the most interesting development areas in Greater Stockholm. An entirely new part of town has been built and 20,000 people have moved here following the area's transformation. Södra Hammarbyhamnen, an adjoining area that was previously home to light industry, has also undergone a transformation into an alternative place of establishment for office tenants. Transport connections have improved considerably with the extension of the Tvärbanan light rail line, and a number of property owners have invested capital and time in raising the standard of their properties in the area. The supply of office space in the area is highly varied, with a mix of modern and old. This situation is reflected in the wide price range, with rents ranging from SEK 700-1,900/sqm. Vacancy rates are expected to be 12-15 per cent, with a large share of the space being of a character that requires major investments.
The investment market for properties in Sweden has in recent years experienced historically high transaction volumes, and 2007 was no exception. The total annual investment volume was SEK 135 billion, which is a slight decrease on the year before (SEK 140bn).
The first two quarters differed somewhat from the last two. In the first and second quarters the mood in the investment market was buoyant, with forecasts of rapid economic growth, easy access to credit and high liquidity. During this period yield requirements were squeezed to record lows. Towards the autumn credit market fears, downgraded forecasts and investor worries reduced liquidity in the market considerably. Yield requirements increased somewhat in the last two quarters of the year, especially for poorer-quality products and portfolios as well as for more complicated development projects.
During the year as a whole, however, a lot of capital, both domestic and foreign, con-
tinued to flow to the Swedish property market. As in 2005 and 2006, competition for those properties that were put up for sale was intense, although it lessened somewhat in the latter part of the year.
Stockholm has long been the most attractive and largest property market in Sweden in terms of transaction volume. In 2007 Stockholm accounted for 42 per cent, or close to SEK 59 billion, of the total transaction volume in Sweden. The corresponding figures for 2005 and 2006 are SEK 48 billion and SEK 60 billion, respectively. About 50 per cent of all transactions in Stockholm in 2007 had international buyers, and net sales of properties in the capital by Swedish owners reached SEK 20 billion. However, this figure includes the year's single largest property transaction, in which the City of Stockholm sold Centrumkompaniet to UK-based Boultbee for SEK 11.2 billion. In terms of sectors, the office sector was the largest, accounting for over 50 per cent of the total transaction volume in Stockholm.
In 2007 yield requirements for the Stockholm market continued to fall. For office properties in good locations yield requirements currently range from 4.25-5.25 per cent, depending on the standard and contract situation.
For 2008 DTZ estimates that yield requirements for office properties as a whole are set to increase. The key underlying reason is that the high expectations of rent increases that have previously been embedded in yield requirements have fallen slightly. The second reason is the current turbulence in financial markets, which, coupled with higher inflation, creates a risk of higher nominal interest rates and greater caution on the part of lenders. This, in turn, has made it more difficult for highly leveraged companies to fund acquisitions, and buyers have tightened their purse strings slightly. Internationally, a clear trend is discernible, with rising yield requirements for the large European investment markets in the last six months. Historically, yield requirements in Stockholm have followed London and other markets with a delay of roughly a quarter, which suggests that yield requirements will be squeezed by 25-50 basis points in one or a few quarters' time. We also expect that the spread in yield requirements between properties of differing standards and location, and thus potential rents, will increase. Good properties in the relatively strong Stockholm market will perform well in relation to properties with less rent potential.
Luma Park, Hammarby Sjöstad.
Solna, SEKm 786 (32%)
| Total | 239,451 |
|---|---|
| Q4 | 17,859 |
| Q3 | 1,350 |
| Q2 | 181,864 |
| Q1 | 38,378 |
| Floor area, sqm |
* For more detailed information, see the list of properties at the end of the annual report.
Fabege is one of Sweden's leading property companies in the area of commercial premises and property development. The business is highly concentrated to a small number of priority sub-markets offering good growth opportunities in and around Stockholm. The most important of these for us are the inner city of Stockholm, Solna and Hammarby Sjöstad. Together, these account for 88 per cent of the Group's total rental value and 90 per cent of the value of its property portfolio.
Fabege's properties are already well positioned, and the portfolio is continually being developed through sales and acquisitions. Under Fabege's value-adding strategy, potential acquisitions must offer better growth prospects and display greater potential than the Group's existing investment properties.
The Stockholm region, where Fabege has concentrated its business, is the single largest rental and property market in Sweden with 12 million sqm of office space.
Fabege's property management organisation consists of four property management areas: City, Malmarna, Solna Business Park and Arenastaden. Improvement projects are conducted in the operating unit Projects & Development. On top of that, the organisation comprises the shared supporting units Accounting/Finance, Business Development and Information/IR/HR.
Fabege's property transactions in 2007 resulted in a further concentration to a small number of centrally located growth markets in the Stockholm region. 17 properties were sold during the year for a total of SEK 2.9 billion, and 8 properties were acquired for a total of SEK 4.0 billion. The acquired properties include Trängkåren 7 (DN Building) and Grönlandet Södra 13, which was bought for SEK 2.0 billion.
Floor area, sqm
| Q1 | 16,982 |
|---|---|
| Q2 | 10,000 |
| Q3 | 3,032 |
Fabege's property portfolio comprises 167 properties located primarily in Stockholm and Solna. Commercial premises, primarily office space, accounts for 97 per cent of the rental value, with residentialspace accounting for the remaining three per cent. The total lettable floor area is 1.5 million sqm and the rental value SEK 2.5 billion.
Fabege's commercial contract portfolio comprises about 2,300 contracts with about 1,500 tenants. In terms of value, the largest tenants are OMX, Bonnier Dagstidningar, If Skadeförsäkring AB and the Swedish Tax Agency.
Fabege's property management comprises four property management areas: City, Malmarna, Solna Business Park and Arenastaden. City and Malmarna essentially cover the same area as the sub-market Stockholm Inner City. Malmarna also covers the sub-market Hammarby Sjöstad.
Fabege has chosen to manage its properties using its own staff to ensure a high degree of commitment in each property while remaining in close contact with clients, enabling rapid decisions. Each property management area is headed by an area manager with responsibility for profit and loss accounts and balance sheets. Each area also has designated individuals with responsibility for operations, marketing and lettings as well as building maintenance technicians and supportstaff. Each property management area thus constitutes a company within the company.In practice, this meansthat an area manager is authorised to initiate the sale and acquisition of properties within his or her area.
| 31 Dec 2007 | 1 jan–31 Dec 2007 | |||||||
|---|---|---|---|---|---|---|---|---|
| Market segment | Number of properties |
Lettable space '000 sqm |
Fair value, SEKm |
Rental value, SEKm |
Economic occupancy, % |
Rental income, SEKm |
Property expenses |
Operating surplus |
| Real Estate Holding | ||||||||
| Investmet properties1) | 96 | 1,104 | 24,994 | 1,975 | 95 | 1,832 | -497 | 1,335 |
| Properties for improvment 1) |
39 | 353 | 4,354 | 418 | 83 | 339 | -153 | 186 |
| Land and Project properties1) | 32 | 89 | 1,481 | 60 | 56 | 35 | -28 | 7 |
| Total | 167 | 1,546 | 30,829 | 2,453 | 92 | 2,206 | -678 | 1,528 |
| Of which Inner City | 53 | 557 | 17,125 | 1,199 | 95 | 1,122 | -298 | 824 |
| Of which Solna | 34 | 519 | 8,980 | 786 | 92 | 692 | -184 | 508 |
| Of which Hammarby Sjöstad | 13 | 156 | 1,586 | 170 | 88 | 140 | -66 | 74 |
| Of which Southern Stockholm | 18 | 95 | 1,471 | 107 | 70 | 73 | -36 | 37 |
| Of which Northern Stockholm | 47 | 216 | 1,641 | 189 | 86 | 178 | -93 | 85 |
| Of which outside Stockholm | 2 | 3 | 26 | 2 | 31 | 1 | -1 | 0 |
| Total | 167 | 1,546 | 30,829 | 2,453 | 92 | 2,206 | -678 | 1,528 |
| Letting, project development and property adm. expenses. | -85 | |||||||
| Total operating surplus after letting, project development and property adm. expenses. | 2) 1,443 |
1) See definitions om page 88.
2) The table relates to Fabege's property stock at 31.12.2007, and income and expenses are reported as though the properties had been owned throughout the period. The deviation between the reported operating surplus of SEK 1,443m and the operating surplus in the income statement of SEK 1,312m is explained by operating surplus from sold properties having been excluded and acquired/ completed properties having been counted as though they were owned/completed throughout the period Jan-Dec 2007.
Fabege's properties in the inner city of Stockholm.
Fabege is one of the largest owners of office property in the inner city of Stockholm, with a market share of about 5 per cent in terms of floor area. The company owns 53 properties with a total floor area of 557,000 sqm in the inner city. The properties primarily contain office and retail space and have a rental value of about SEK 1.2 million.
The holdings comprise fully developed properties as well as properties with development potential.
In Stockholm City the emphasis is on the area around Kungsgatan and Drottninggatan. A well contained group is located around Stureplan, where Fabege owns eight properties in the area Kungsgatan-Norrlandsgatan-Lästmakargatan. Our holdings around Drottninggatan comprise 12 properties. In the area around Kungsgatan Fabege has consolidated its position among tenants requiring modern and efficient premises, such as the Financial Supervisory Authority, which moved into its newly converted offices on Norrlandsgatan in 2007, and Carnegie Investment Bank and Max Matthiessen, which signed new leases with Fabege during the year.
Another priority area for Fabege is Norrtull/Norra Station, where the company now owns five properties, including the landmark Wenner-Gren Center property.
In Malmarna the main priority areas are East and West Kungsholmen and the Lindhagen area. In the Lindhagen area an old industrial district is currently being redeveloped for residential and office use, with Fabege as one of the leading players. East Kungsholmen, especially the area around Kungsbroplan and the east end of Fleminggatan, is also seeing a rise in demand for premises, and this area links up with the area around the Central Station, Norra Bantorget and the historic Klara district, which is also undergoing rapid development.
| OMX AB |
|---|
| Bonnier Dagstidningar |
| Swedisch Tax Agency |
| If Skadeförsäkring |
| ICA |
| National Courts Administration |
| AFA Sjukförsäkrings AB |
| National Insurance Office |
| EDB Business Partner Sverige AB |
| COOP Sverige Fastigheter AB |
On 31 December 2007 the ten largest tenants by value represented a total contract value of SEK 490 million, or 22 per cent of total contract value.
Fabege's properties in Solna.
In Stockholm City financial companies, law firms, management consultancies and other consulting firms make up a large share of our tenants. Consultancies, financial companies and brokerages are also well represented in Norra Stationsområdet, while the area around the Central Station is not dominated by any particular industries. Our largest tenant in Frihamnen is OMX. Other major tenants in the area include the Financial Supervisory Authority, the Stockholm District Court and the Bonnier Group.
In 2007 Fabege strengthened its portfolio of properties in the inner city of Stockholm. We acquired six properties with a total lettable area of 155,480 sqm.
Fabege also strengthened its presence in the dynamic Norrtull area through a series of acquisitions.
The purchase of Mimer 5 added 12,100 sqm of lettable space to the portfolio, a large share of which is already let to Cybergymnasiet. Later in the year we also acquired Getingen 15, a property with 26,500 sqm of lettable space, including 14,000 sqm of office space.
In October Fabege signed an agreement with the City of Stockholm for the acquisition of the Apotekaren 22 property in Norrmalm. The property takes up an entire block by Tegnérgatan/Döbelnsgatan and has a lettable floor area of about 30,000 sqm including garages. Fabege also acquired the freehold Bocken 46 from the City. In a parallel transaction we sold the freehold properties Visthusboden 1, 2 and 3 in Enskede and Orgelpipan 5 on Norrmalm to the City of Stockholm.
The largest acquisitions in 2007 were Kvarteret Trängkåren 7 (DN Building) in Marieberg on Kungsholmen and Grönlandet Södra 13 in Norrmalm. Both properties
| Lease value Proportion | ||
|---|---|---|
| Year due | SEKm of value, % | |
| 2008 | 554 | 26 |
| 2009 | 442 | 20 |
| 2010 | 311 | 15 |
| 2011 | 191 | 9 |
| >2012 | 639 | 30 |
| Total | 2,117 | 100 |
Total lease values at 31 December 2007 (incl residential and parking) amounted to SEK 2 256.
The average contractual period forthe approx. 2,300 contracts in thecommercial portfolio, weighted inaccordance with the rental value, is 3,62 years.
were bought from Niam in a single transaction. DN Building has a lettable area of 76,000 sqm, including 50,000 sqm of office space. The single largest tenant is the Bonnier Group, which publishes the major Swedish dailies Dagens Nyheter and Expressen. Grönlandet Södra 13 is located on Adolf Fredriks Kyrkogata and comprises 8,000 sqm. The entire property is rented by the National Insurance Office.
Fabege is one of the largest owners of commercial property in Solna, which is one of the company's priority markets for the future. Fabege owns 34 properties with a combined floor area of 519,000 sqm in the area. Most of this is office space, giving Fabege a 40 per cent share of the office market in Solna. The rental value of Fabege's Solna properties is SEK 787 million, or 32 per cent of the Group's total rental value.
The properties are located in the areas Solna Strand, Solna Station, which is now often referred to asArenastaden after the new NationalArena, and Solna Business Park. Solna Business Park is a dynamic, expanding area mainly consisting of office and retail premises. In 2008 further development projects will be initiated in the area.
In the next few years Arenastaden is expected to become one of the most interesting areas in the Stockholm region, outside the inner city. A decision has now been taken on the future National Arena, around which an entire new part of town will be built. Fabege already has a strong position in Arenastaden and is taking an active role in developing the area.
Fabege's tenants in Solna include a number of large, established companies and organisations such as Fazer, Nike, Peab, BMW, 24hPoker, Otis, If Skadeförsäkring and the Swedish Tax Agency. During the year Fabege concluded a new ten-year lease with If.
In a swap transaction with Carnegie Fastigheter AB Fabege acquired Planen 4, a property in the Råsunda area of Solna.
Hammarby Sjöstad is an area that is undergoing rapid development and is currently in a phase that is 4 - 5 years ahead of the Lindhagen area. Here, too, an old industrial area is being converted into housing and offices with good access to transport in a location not far from the centre of town. Fabege is by far the largest player in commercial property in the area and has recently noticed a steady increase in demand, especially from service companies. Fabege's share of the office market is about 65 per cent.
Fabege owns 13 properties in Hammarby Sjöstad with a total lettable area of 156,000 sqm and a rental value of SEK 170 million. The flagship property is the stylish 1930s Lumahuset, where an improvement project is under way.
The tenants include advertising and media companies, and businesses providing services to the media industry, such as photographers and designers, have also been attracted to the area. MTV, Strix TV, the building consultant WSP, Strängbetong and the card reader company Point are some of our major tenants.
"The starting-point for successful lettings is to offer the customers smart and efficient solutions. In 'my' properties the task is simple – there are thousands and thousands of opportunities to take advantage of".
Silvia Samuelsson, Property Manager, Stockholm City
The main entrance to Wenner-Gren Center in the Norrtull area of Stockholm makes as imposing and elegant impression today as when it was opened in 1962.
| Tenant | sqm |
|---|---|
| OMX | 34,000 |
| Stockholm District Court | 18,541 |
| LRF | 12,240 |
| AFA Sjukförsäkring | 8,583 |
| National Institute | |
| for Working Life | 7,660 |
| Tenant | sqm |
|---|---|
| National Tax Agency | 42,615 |
| If Skadeförsäkring | 31,653 |
| Svenska Spel | 17,945 |
| ICA | 15,503 |
| EDB Business Partner | 15,219 |
| Tenant | sqm |
|---|---|
| Scientific Games | 5,916 |
| WSP Sverige | 3,889 |
| MTG Facility Management 3,185 | |
| Point Transaction Systems | 2,688 |
| Information & Kompetens | |
| i Sverige | 2,536 |
Fabege's properties in Hammarby Sjöstad.
Fabege has developed parts of the Luma 1 property for conversion into residential units. The project covers 6,000 sqm. After planning permission was received for the project, this space was sold to Oscar Properties.
In the rest of the Stockholm area Fabege has 67 properties with a total lettable area of 314,000 sqm. The total rental value of these properties is SEK 298 million.
The properties are mainly located in a number of sub-markets, such as Täby, Bromma, Järla Sjö and Tensta/Rinkeby.
Fabege continued to divest properties outside its priority geographic areas in 2007. Eight properties in Årsta and Botkyrka were sold to Diös & Kuylenstierna Förvaltning AB. The
| Industrial/ | Residential, | Garages, | ||||||
|---|---|---|---|---|---|---|---|---|
| Offices, t.sqm Retail, t.sqm | Warehouse, t.sqm | Hotels, t.sqm | Other, t.sqm | t.sqm | t.sqm | Total, t.sqm | ||
| Stockholm Inner City | 414,628 | 28,955 | 35,509 | 7,674 | 2,251 | 15,153 | 52,737 | 556,907 |
| Solna | 410,463 | 30,831 | 40,078 | 15,287 | 6,509 | 523 | 15,080 | 518,771 |
| Hammarby Sjöstad | 82,858 | 11,265 | 55,135 | 0 | 128 | 691 | 5,996 | 156 073 |
| Other Southern Stockholm | 53,587 | 28,361 | 3,016 | 0 | 61 | 94 | 9,588 | 94,707 |
| Other Nothern Stockholm | 72,931 | 14,348 | 37,422 | 0 | 1,888 | 86,886 | 3,000 | 216,475 |
| Outside Stockholm | 0 | 0 | 3,011 | 0 | 0 | 0 | 0 | 3,011 |
| Total | 1,034,467 | 113,760 | 174,171 | 22,961 | 10 837 | 103,347 | 86,401 | 1,545,944 |
land property Marievik 31 was sold to JM. Racketen 10 in Alvik was sold to Carnegie Fastigheter.
One of the cornerstones of Fabege's business concept, and one a key success factor, is an active and qualified property improvement business. Over the years the company has built up a wide and deep expertise in running development projects, ranging from tenant adaptations, conversions and area projects to planning and development of land areas.
Our improvement operations are conducted in the Projects & Development unit, which is responsible for new construction and redevelopment projects, procurement and follow-up, and marketing and letting of new projects. The unit is also responsible for contacts with local authorities and other planning agencies.
Our ambition is that Projects & Development should be self-sufficient in respect of practically all the expertise required in the projects, including financial control. Construction services are purchased externally, however.
In 2007 Fabege stepped up the pace of its project activities, and decisions were made on new project investments worth SEK 2.4 billion.
We therefore strengthened the Projects & Development organisation in 2007, recruiting 11 new staff. At year-end 2007 the unit had 28 employees.
At present about 10 major development projects are under way in the Stockholm area.
After a comprehensive redevelopment, this property was ready for occupation in 2007 and now provides a modern head office for the Financial Supervisory Authority. The tenants also include two restaurants.
| Rental | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Lettable | Occupancy | value, | Of which | ||||||
| space, | rate,% | excl. sup- | Book value | Estimated | accured at | ||||
| Name of property | Property type | Area | Completed | sqm | space2) | plements 31.12.2007 | investment 31.12.2007 | ||
| Lillsätra 3 | Warehouse | Sätra | Q2 2008 | 9,000 | 100 | 10 | 35 | 75 | 21 |
| Lammet 17 | Office | City | Q3 2008 | 6,800 | 52 | 20 | 150 | 60 | 1 |
| Läraren 13 | Office | Norrmalm | Q3 2008 | 6,800 | 53 | 19 | 270 | 85 | 18 |
| Marievik 19 | Office/Parking | Marievik | Q3 2008 | 24,700 | 67 | 40 | 400 | 170 | 38 |
| Paradiset 29 (50%) | Retail/Office/Parking | Stadshagen | Q3 2009 | 18,100 | 50 | 29 | 100 | 380 | 120 |
| Rovan 1 | Office/Retail | Huvudsta | Q3 2009 | 8,100 | 01) | 24 | 57 | 181 | 7 |
| Hammarby Gård 7 | Office | Hammarby Sjöstad | Q4 2008 | 8,900 | 01) | 20 | 37 | 185 | 2 |
| Bocken 35 and 46 | Office | Norrmalm | Q4 2009 | 15,300 | 90 | 55 | 373 | 390 | 2 |
| Skvaltkvarnen 1 etc | Residential | Tensta/Rinkeby | 2007–2011 | 95,300 | 96 | 102 | 487 | 600 | 115 |
| Total | 193,000 | 79 | 319 | 1,909 | 2,126 | 324 | |||
| Other Project&Land properties | 619 | ||||||||
| Other Properties for improvement | 3,307 | ||||||||
| Total Projects, Land and Properties for improvement | 5,835 |
1) The property has rental income during refurbishment from existing tenants who it is expect will stay during the conversion. 2) Operating occupancy rate at 05.02.2008
Kvarteret Pan is a unique building located between Stora Nygatan and Lilla Nygatan in Stockholm's Old Town. The oldest part dates from 1640 and has been joined with the neighbouring building from 1863.
Adaptations of the property, into offices and restaurants, were made in 2007, and the building will be completely ready in the second quarter of 2008. The office space is currently let to Acne Jeans.
The Lindhagen area in West Kungsholmen is currently undergoing rapid development.A new area of town is being created with offices, flats, hotels, restaurants and shops. The intention is to combine modern workplaces with housing and lush greenery and walkways.
Paradiset 29, a former bakery, is now undergoing a complete redevelopment, including a new office complex on the roof. Upon completion, the building will provide 36,200 sqm of retail, office and garage space. In 2007 Fabege signed a lease with ICA for about 9,000 sqm of retail space plus garage space. The project is expected to be completed in the third quarter of 2009.
The former Modecenter on the Årstaviken quay was modernised in 2007. The unique, palace-like building will have a total lettable area of 24,700 sqm upon completion, which is scheduled for third quarter of 2008. At year-end 2007 67 per cent of the floor area had been let, and one of the tenants is H&M.
The property is located at Bryggargatan/Gamla Brogatan and comprises some 6,800 sqm of office space in a very central yet quiet location. At year-end 2007 52 per cent of
Paradiset 29, Lindhagen Office and Retail centre. Kvarteret Bocken at Regeringsgatan/Lästmakargatan.
"The investments involved in our projects are very significant. That's why I work hard to find contractors that can deliver optimal solutions – the right price and the right quality always pay off in the long term"
Helena Lundberg, Project Planner
In the Lindhagen project in Paradiset 29 in West Kungsholmen Fabege is creating 13,500 sqm of retail space and 10,500 sqm of offices as well as garages.
the floor area had been let, and the project is scheduled for completion in the third quarter of 2008.
In Solna, to the north of central Stockholm, a decision has been taken to build a new Swedish national arena. It is designed for football matches, concerts and other major events and will be built on undeveloped land next to Solna Station. Next to the arena, a new area of town with housing, offices, hotels, restaurants and shops is now being built. With several properties in the area, Fabege is taking part in this development along with other players, including Solna Municipality, the Swedish Football Association, Jernhusen and Peab.
After the decision to build the new arena a growing interest has been registered in the area among potential tenants. Projects in progress in Fabege include renovations of exteriors and tenant adaptations in our existing properties in the area around the site of the new arena.
In 2007 Fabege obtained planning permission to erect a 10,000 sqm office building next to the intersection of the region's two main motorways, the E4 and E18, and overlooking the beautiful Brunnsviken bay.
Läraren 13 is a turn-of-the-century building with a lot of charm, located Torsgatan 4 by the new Lilla Bantorget square that is being created next to Norra Bantorget. Under Fabege's leadership, the property is undergoing a complete external and internal renovation, which will also involve careful preservation of the listed façade towards Torsgatan.
The project will result in 6,800 sqm of lettable space in the form of ultra-modern offices and is scheduled for completion in the third quarter of 2008.
Among contracted tenants are the clothing company Tiger, the mattress making company Tempur and the forestry company Sveaskog.
The property is located at Lästmakargatan/Regeringsgatan. The purpose behind the ongoing project is to create a lively street environment offering attractive offices as well as housing. The character of the site will be changed from that of a street lined by loading bays to a street designed for people. The buildings follow the slope of the Brunkebergsåsen ridge ending in a tall residential building, like an exclamation mark. The project comprises a lettable area of 15,300 sqm and is expected to be completed in the fourth quarter of 2009. Carnegie Investment Bank and Max Mathiessen have signed rental agreements for a total of 13,500 sqm.
Fabege has undergone a major restructuring in the last few years. Through property transactions worth several tens of millions of kronor and by spinning off our properties in the Öresund region, Fabege's portfolio has been concentrated to a small number of select, dynamic sub-markets in the Stockholm region. The composition of the property portfolio has changed considerably as residential properties and other properties outside the company's priority segments have been divested to concentrate the business on commercial property, primarily office premises.
On 31 December 2007 Fabege's property portfolio comprised 167 properties, which was 7 less than the year before. The total property value increased by SEK 3.6 billion to SEK 30.8 billion (27.2) year-on-year.
Each year Fabege's property holdings are externally valued as at 31 December by an independent valuer with recognised qualifications. As at 31 December 2007 the properties were valued by DTZ Sweden AB and Newsec Analys AB. The estimated market value was SEK 30.8 billion. Market value refers to the most likely price that each property would obtain in a sale on an open and free property market at the time of valuation.
The valuation covered all properties and developable land in Sweden. The data provided by Fabege on leases, vacant areas, operations and maintenance costs and investments was used as a basis for the valuation. All properties were surveyed during the period 2005-2007.
The property valuation is based on cash flow statements, in which the present value of net operating incomes are normally calculated during a five-year calculation period, and the residual value of the property at the end of the period are calculated. The discount rate for Fabege's property portfolio is 7.3 per cent (7.8%), based on a longterm discount rate plus a supplement for property-related risk. The average yield requirement at the end of the calculation period is 5.5 per cent (5.8%). The property valuation was performed in accordance with the Valuation Guidelines of the Swedish Property Index.
| Total | 30.8 | 5.5 |
|---|---|---|
| Other | 0.0 | 10.0 |
| North Sthlm | 1.6 | 5.9 |
| South Sthlm | 1.5 | 6.0 |
| Hammarby Sjöstad | 1.6 | 6.3 |
| Solna | 9.0 | 5.8 |
| Inner City | 17.1 | 5.1 |
| Sub-Market | 31 dec 2007, SEKbn | Yield, % |
| Market value |
Unused tax loss carry-forwards, which are expected to reduce the Group's tax expense in future years, are estimated at SEK 3.8 billion (4.3) as at 31 December 2007.
Payment of income tax can also be delayed through tax depreciation of the properties. In case of a direct sale of property a tax profit equivalent to the difference between the selling price and the tax residual value of the property is realised. In case of a sale of property through a business sale this effect can be mitigated.
As at 31 December 2007, the difference between the book and tax residual values of the properties was approximately SEK 10.5 billion (8.9). Under IFRS rules on deferred tax, differences between book and tax values should be recognised at the nominal tax rate (28%) with no discount. Exceptions can be made for business combinations, which can be classified as asset acquisitions. See also the section entitled Accounting principles on page 60 and Note 28 on page 69 in respect of deferred tax.
As at 31 December 2007 net deferred tax liabilities were SEK 0.6 billion (0.4), in accordance with the following specification:
| Net liability deferred tax | 580 |
|---|---|
| - untaxed reserves/other | -7 |
| - difference between book and tax values in respect of properties | 1,656 |
| - loss carry-forwards | -1,069 |
| Deferred tax attributable to |
TheAdministrative Court ofAppeal in Stockholm has decided to reject Fabege's appeal in the ongoing and previously reported tax case concerning a review of the 2002 income tax for Fabege Storstockholm AB. The adopted increase in Fabege's taxed income is due to the fact that the Tax Agency has taken the view that a dividend paid by a subsidiary to Fabege Storstockholm AB is taxable. The reason for this is that the Tax Agency has reclassified Fabege Storstockholm AB from a property management company to a property trading company. The ruling of the Administrative Court of Appeal means that the Tax Agency's decision to increase Fabege's taxable income by SEK 346 million has been upheld, resulting in a tax expense, including interest, of approximately SEK 113 million. The company is contesting the ruling and has applied for the case to be reviewed by the Supreme Administrative Court. No provision has been made in Fabege's balance sheet, but the amount has been recognised, as in previous financial reports, as a contingent liability.
The Tax Agency has in several decisions announced that companies in the Fabege Group will have their taxable incomes increased in respect of a number of property sales made through limited partnerships. As at 31 December 2007 the total increase in taxable incomes is SEK 4,045 million. The decisions have resulted in total tax demands of SEK 1,132 million plus a tax penalty of SEK 170 million, i.e. a total tax demand including penalties of SEK 1,302 million excluding interest.
Fabege strongly contests the tax demands made by the TaxAgency and has appealed the decisions. It is the company's firm opinion that the sales were reported and declared in accordance with applicable rules, and no provisions have therefore been made in Fabege's balance sheet.
Fabege's assessment is shared by external legal experts and tax advisors who have analysed the sales and the Tax Agency's reasoning. The partners of the limited partnerships reported and declared their share of the proceeds in full compliance with applicable tax rules. The sales resulted in a low income tax, but it should be pointed out that in the Tax Agency's own opinion it is perfectly permissible and acceptable to sell commercial properties tax-free in package form, i.e. the small amount of tax resulting from the sales was neither unexpected nor controversial. The way in which the properties were sold was chosen exclusively for business reasons, and not to reduce the amount of tax payable. The most immediate alternative option, which was to sell the properties through limited liability companies, would not have resulted in a higher tax charge for any Group company.
The type of property sale through a trading/limited partnership that the Tax Agency has made a tax decision on has been used on numerous occasions in the industry. See also the press release from 7 December 2006.Information about any further decisions made by the Tax Agency and the reasoning behind the decisions will be presented in Fabege's interim reports.Any changes in current assessments and any court rulings will be announced through press releases.
"All my customers are within walking distance of our local office in Solna Business Park. I highly value the personal contacts created through these meetings – my tenants sometimes become more like colleagues than customers."
Jessica Dehmer, Assistant Property Manager
To ensure the best possible service for our customers, Solna Business Park has its own service centre.
The Board of Directors and Chief Executive Officer of Fabege AB (publ), organisation number 556049-1523, hereby present their 2007 report for the Group and parent company.
Fabege is one of Sweden's leading property companies focusing on commercial premises. The business is concentrated to a small number of fast-growing priority sub-markets in the Stockholm region. Fabege manages and improves its existing properties while continuously developing its portfolio through sales and acquisitions. Realising value is an integral and key part of the business.
In recent years the company has undergone major changes. Fabege was previously active in several regions and had a relatively large share of residential space in its portfolio, but has increasingly concentrated its holdings to the Stockholm region, with a focus on commercial premises. In 2007 the company continued to concentrate its business to the inner city of Stockholm and a small number of other priority sub-markets.As at 31 December 2007, Fabege had a rental value of SEK 2.5 billion, a lettable area of 1.5 million m2 and a book value, including project properties, of SEK 30.8 billion. On 31 December 2007 Fabege's property portfolio in the inner city of Stockholm, Solna and Hammarby Sjöstad represented 88 per cent (78%) of the total rental value.
Out of the rental value, 97 per cent (97%) refers to commercial premises and 3 per cent (3%) to residential premises.
The profit after tax was SEK 1,812 million (2,266) and earnings per share after dilution were SEK 9.98 (11.74). The profit after financial items was SEK 2,066 million (1,863).
Rental income was SEK 2,066 million (2,343) and net operating income SEK 1,312 million (1,410). For comparable property stock, rental income increased by 7.6 per cent and net operating income by 8.2 per cent.
Realised changes in the value of properties totalled SEK 446 million (61), while unrealised changes in the value of properties were SEK 893 million (911), of which SEK 886 million (960) referred to remaining properties, while changes in the value of fixed income derivatives and equities were SEK 37 million (230) and SEK -13 million (15), respectively.
The net interest expense improved to SEK -609 million (-646) as a result of net sales of properties at the beginning of the year.
The tax expense (current and deferred) for the year was SEK -254 million (403). As at 31 December 2007, the difference between the book and tax residual values of the properties was approximately SEK 10.5 billion. At the same time, the Group had valued tax loss carry-forwards of SEK 3.8 billion.
The results produced an increase in liquidity of SEK 1,142 million (646). After a decrease of SEK 491 million (3,197) in working capital, which varies primarily as result of the effect of occupancy/final settlement for acquired and divested properties, operating activities resulted in an increase in liquidity of SEK 1,633 million (3,843). Investments and acquisitions exceeded property sales by SEK 2,653 million (-1,513). Operations thus resulted in an overall decrease in liquidity of SEK 1,020 million (- 5,356). Dividends to the shareholders and share buybacks were SEK 761 million (754) and SEK 534 million (706), respectively. After the increase in debt, consolidated cash and cash equivalents were SEK 75 million (164).
Shareholders' equity was SEK 11,415 million (12,177) and the equity/assets ratio 36 per cent (41%). Return on equity was 15 per cent (20%).
Interest-bearing liabilities (excluding a surplus in the fixed income derivatives portfolio of SEK 13 million) were SEK 17,210 million (14,978) at the end of the year with an average interest rate of 4.28 per cent (3.72%) excluding loan commitments and 4.31 per cent (3.85%) including expenses relating to loan commitments. Out of total liabilities, SEK 47 million refers to a convertible bond loan and SEK 3,540 million to outstanding certificates. I den total lånevolymen. The total loan volume as at 31 December includes loans for works in progress of SEK 323 million, on which interest of SEK 8 million has been capitalised. The average fixed-rate term for the loans, including the effects of exercised derivatives, was 3 months (10) on 31 December. During the year Fabege increased the average term of loan agreements, resulting in an average maturity at year-end of 5.1 years (4.2). Out of total credit lines of SEK 25.5 billion, SEK 17.2 billion had been used. In the fourth quarter increased long-term credit lines of SEK 2.5 billion were agreed on terms equivalent to those attaching to previous credit lines. The company's concentration to priority markets in the Stockholm region improves its ability to obtain long-term funding on favourable terms. Fabege's access to long-term funding has not been affected by the turbulence in financial markets. See also Note 3 on financial instruments and financial risk management.
Investments in 2007 were SEK 4,984 million (17,044), of which SEK 4,018 million (16,110) refers to property acquisitions and SEK 966 million (934) to investments in existing properties and projects. Eight properties were acquired for a total consideration of SEK 4,018 million and 17 properties were sold for SEK 2,919 million.
Major divestments refers to one property in Alvik (SEK 697 million) and eight properties in Årsta and Botkyrka (SEK 1,350 million). Major acquisitions were made in transactions with the City of Stockholm (SEK 814 million) and Niam (SEK 2,013 million). Fabege's property transactions in 2007 resulted in a further concentration of the Group's holdings to centrally located markets in the Stockholm region.
In 2007 the Group significantly increased the pace of activities aimed at adding value through improvements to properties, and decisions were made on major project investments of approximately SEK 2.4 billion. Investments of SEK 966 million (934) in existing properties and projects referred to land, new builds, extensions and conversions. The biggest investments referred to Luma 1 (Hammarby sjöstad), Kåkenhusen 38 (Norrmalm) and Marievik 19 (Marievik).
Sales in 2007 were SEK 108 million (147) and the profit before appropriations and tax was SEK 1,048 million (1,955). Net investments in properties, equipment and interests were SEK 32 million (3,856). On 31 December cash and cash equivalents were SEK 58 million (93).
Fabege's share capital at year-end was SEK 5,086 million (5,030m), represented by 178,458,921 shares (100,599,382). In accordance with a resolution made at the 2007 AGM, a 2:1 share split was effected during the year.All shares carry the same voting rights and entitle the holder to the same share of the company's capital. Full conversion of all outstanding convertible bonds would result in an increase of 1,069,864 shares.
The following indirect or direct shareholdings in the company as at 31 December 2008 represent one tenth or more of the votes for all shares in the company:
| Shareholding | Share of votes |
|---|---|
| Brinova | 13.6% |
| Maths O Sundqvist | 11.5% |
Through Fabege's profit-sharing fund and the Wihlborgs & Fabege profit-sharing fund the employees own a total of 680,283 shares in the company.
At the 2007 AGM the shareholders voted to make the following changes to the Articles of Association: The Board of Directors shall comprise at least four and not more than eight members. The number of shares shall be at least 66,800,000 and no more than 267,200,000.
In accordance with the resolution passed at the 2007AGM, Fabege has transferred 47.6 million shares in Klövern AB (publ) to the shareholders through a redemption procedure. The procedure involved an offer to redeem every 16th share in Fabege for eight shares in Klövern.
The 2007 AGM passed a resolution authorising the Board, during the period up to the next AGM, to acquire shares. Share buybacks are subject to a limit of no more than 10 per cent of the total number of outstanding shares at any time. In 2007 the company bought back 7,635,622 shares (5,435,400), which was also the number of shares held by the company at year-end. The holding represents 4.28 per cent of the total number of registered shares. The shares were bought at an average price of SEK 71.05 per share.
The 2007 AGM adopted a resolution to offer shareholders the opportunity to buy or sell, free of commission, the number of shares required to achieve a shareholding consisting of round lots (100 shares). The offer was implemented during the period 15-30 November 2007. 10,869 shareholders chose to avail themselves of the offer, which resulted in a net purchase of 184,611 shares.
The sensitivity analysis is based on Fabege's property holdings and balance sheet as at 31 December 2007. The sensitivity analysis shows the effects on the Group's profit after financial items on an annualised basis after taking account of the full effect of each parameter.
| SEKm | Change | SEKm |
|---|---|---|
| Rent level, commercial | 1% | 21,8 |
| Rent level, residential | 1% | 0,8 |
| Financial occupancy rate, % | 1% point | 24,6 |
| Property expenses | 1% | 7,6 |
| Interest expenses 20081) | 1% point | 130,0 |
| Interest expenses, longer-term perspective | 1% point | 172,0 |
1) The effect of the change on interest expenses in 2008 is based on the assumption of a change in the yield curve of 1 percentage point, an unchanged loan volume and fixed-rate term, with effect from 1 January 2008.
The result will also be affected by realised and unrealised changes in the value of properties.
Fabege's business in property management and project development is highly concentrated to sub-markets with good growth prospects in and around Stockholm. Occupancy rates and rent levels have continued to improve. Out of Fabege's total rental income, 97 per cent refers to commercial premises and 3 per cent to residential premises. As the commercial leases run for a certain number of years, the full impact of changes in rents will not be felt in any single year. New contracts normally run for 3-5 years and are subject to 9 months' notice with an index clause linked to inflation. The average term of commercial leases is 3.6 years. Normally, more than 20 per cent of the contract portfolio is renegotiated each year. The risk of increased vacancies in the property management portfolio is estimated to be small thanks to the central locations of the properties. The 10 largest tenants account for about 20 per cent of the total contract value. The largest tenants in terms of value make up a small share of the total number. Rent losses are insignificant. Vacancies in improvement properties constitute a potential, of which a large share of contracts have already been signed.
Property expenses include operations and maintenance expenses, property tax, ground rent and expenses for administration and lettings. Operations expenses largely consist of tariff-based expenses such as heating, electricity, water, etc. Fabege conducts contract negotiations and works continuously to optimise the operation of its properties. A large share of the Group's expenses is passed on to the tenants, which reduces the exposure. The standard of the property management portfolio is deemed to be high.
The fixed-rate term of the loan portfolio is about 3 months. Fabege employs financial instruments to limit interest risk and as a flexible means of adjusting the average fixedrate term of the loan portfolio. Changes in the value of derivatives are reported in the profit and loss account as they occur. A more detailed description of financial risks is presented in Note 3.
| Equity/assets | |||
|---|---|---|---|
| Change in value, % | Effect after tax, SEKm | ratio, % | Leverage, % |
| +10 | 2,220 | 39 | 51 |
| 0 | - | 36 | 56 |
| -10% | -2,220 | 32 | 62 |
Properties are reported at fair value and changes in value are recognised in the profit and loss account. Fabege's concentration to central Stockholm and neighbouring areas ensures that opportunities to maintain or increase property values are good even in case of unchanged or slowly increasing yield requirements. In the current market situation opportunities for adding value to existing project properties remain good. The table above shows the effect of a 10 per cent change in the value of a property on profits, the equity/assets ratio and leverage.
Fabege manages its capital for the purpose of generating for its owners the best overall return among property companies listed on the Stockholm Stock Exchange. The company seeks to optimise the equity/debt ratio to ensure that its capital base is sufficient in relation to the nature, scope and risks of the business. Under the adopted targets for capital structure, the company shall have an equity/assets ratio of at least 30 per cent and an interest coverage ratio of at least 2 (including realised changes in value). Current key figures are shown in the five-year summary on page 87.
The main task of Fabege's debt management activities is to ensure that the company maintains at all times a stable, well balanced and cost-efficient financial structure through borrowing in the bank and capital markets. The company's financial policy defines how financial risks should be managed, which is described in greater detail in Note 3.
Under its dividend policy, Fabege aims to pay a dividend to its shareholders comprising that part of the company's profit which is not required for the consolidation or development of the business. Based on current market conditions, this means that the dividend will comprise at least 50 per cent of the profit from the management of the company's property portfolio and realised gains from sales of properties.
The Swedish Tax Agency has in several decisions announced that the taxable incomes of companies in the Fabege Group will be increased as a result of a number of property sales made through limited partnerships. As at 31 December 2007, the total increase in taxable incomes is SEK 4,045 million. The decisions have resulted in total tax demands of SEK 1,132 million plus a tax penalty of SEK 170 million, i.e. a total tax demand including penalties of SEK 1,302 million excluding interest. The companies have been granted respite for payment. Fabege has strong reasons to contest the decisions of the TaxAgency, which have ben appealed. It is the company's firm opinion that the sales were reported and declared in compliance with applicable rules, and no provisions have therefore been made in Fabege's balance sheet (reported as contingent liability). Fabege's assessment is shared by external legal experts and tax advisors that have analysed the sales as well as the Tax Agency's reasoning. See also Fabege's tax situation on pages 40-41.
The Administrative Court of Appeal in Stockholm has decided to reject Fabege's appeal in the ongoing and previously reported tax case concerning a review of the 2002 income tax for Fabege Storstockholm AB. The adopted increase in Fabege's taxed income is due to the fact that the Tax Agency takes the view that a dividend paid by a subsidiary to Fabege Storstockholm AB is taxable. The reason for this is that the Tax Agency has reclassified Fabege Storstockholm AB from a property management company to a property trading company. The ruling of the Administrative Court of Appeal means that the Tax Agency's decision to increase Fabege's taxable income by SEK 346 million has been upheld, resulting in a tax expense, including interest, of approximately SEK 113 million. The company appeal against the ruling of theAdministrative Court of Appeal and has so for not made any provision in its balance sheet (reported as contingent liability). The company's assessment is shared by external legal experts and tax advisors that have analysed the sales as well as the ruling of the Administrative Court of Appeal. Fabege has applied for the case to be reviewed by the Supreme Administrative Court.
Aseparate description of the work of the Board of Directors is given in the Corporate Governance Report on pages 74–85.
Fabege does not conduct activities that are subject to permit and notification requirements under Chapter 9, Section 6 of the Environmental Code. Out of Fabege's tenants, only a few conduct such activities. More information about Fabege's environmental work is given in the section on the environment on pages 14-17.
The average number of employees in the Group during the year was 146 (194), of which 60 (76) were women and 86 (118) were men. Out of these, 33 were employed in the parent company (30). At year-end the number of employees was 140, of which 58 were women. See also page 64, Note 5.
The term 'company management' refers to the Chief Executive Officer and other members of Group management. The entire Board of Directors (except the CEO) is responsible for drawing up a draft state¬ment of principles governing compensation and other terms of employment for Company management and for preparing decisions on the CEO's compensation and other terms of employment.
The 2007 AGM resolved to adopt the following guidelines for compensation and other employment terms for company management:
The compensation should be market-based and competitive. Responsibilities and performance that are in the interest of shareholders should be reflected in the compensation. The fixed salary should be reviewed each year. Fabege has a profit-sharing fund that covers all employees of the Company. Allocations to the profit-sharing fund should be based on the achieved return on equity and are subject to a ceiling of one base amount per year per employee.Any compensation in addition to the fixed salary should be subject to a ceiling and related to the fixed salary.Any other benefits should constitute a limited part of the compensation. The retirement age should be 65. Pension benefits should correspond to the ITP occupational pension plan or be contribution-based with a maximum contribution of 35 per cent of the pensionable salary.Termination salary and severance pay combined must not exceed 24 months.
Information about compensation paid to senior executives in 2007 is provided in Note 5. The Board's proposal to the 2008 AGM is that the guidelines remain unchanged.
After the end of the year, during the period up to 29 February 2008, a further 1,515,051 shares have been bought back at an average price of SEK 63.73 per share. The company's total shareholding as at 29 February 2008 was 9,150,673 shares, or 5.13 per cent of the total number of registered shares.
With a good financial position, a property portfolio concentrated to growth locations and an attractive project portfolio, Fabege is currently very well positioned in the Stockholm property and rental market, which remains strong at the start of 2008.
The following amounts are at the disposal of the AGM:
| Total | 2,578,874,430 |
|---|---|
| Profit for the year | 1,038,261,998 |
| Retained earnings | 1,540,612,432 |
The Board of Directors and the Chief Executive Officer propose that the amount be allocated as follows:
| Total | 2,578,874,430 |
|---|---|
| Carried forward | 1,901,641,438 |
| Dividend of SEK 4.00 per share to the shareholders | 677,232,992 |
The dividend amount is based on the total number of outstanding shares as at 29 February 2008, i.e. 169,308,248 shares. The total dividend amount is subject to alteration up to and including the record date, depending on conversions of convertible bonds and share buybacks.
The Group's equity has been calculated in accordance with the EU-approved IFRS standards, the interpretations of these (IFRIC) and Swedish law through the application of Recommendation RR 30 (Supplementary Accounting Rules for Corporate Groups) of the Swedish Financial Accounting Standards Council. Equity in the parent company has been calculated in accordance with Swedish law, applying Recommendation RR 32 (Accounting for Legal Entities) of the Swedish Financial Accounting Standards Board.
The Board of Directors has established that the company will have full coverage for its restricted equity after the proposed dividend.
The Board of Directors considers that the proposed dividend is defensible based on the criteria contained in the second and third paragraphs of Section 3 of Chapter 17 of the Swedish Companies Act (Nature and scope of the business and associated risks, Consolidation requirements, Liquidity and other financial circumstances). The Board would like to make the following comments pertaining thereto:
The Board estimates that the company's and Group's equity after the proposed dividend will be sufficient in view of the nature and scope of the business and the associated risks. In this connection the Board has taken into account the equity/assets ratio, historical performance, budgeted performance, investment plans and overall economic conditions.
The Board of Directors has made a general assessment of the company's and Group's financial position and its ability to meet its commitments. The proposed dividend constitutes 6.3 per cent of the company's equity and 5.9 per cent of consolidated equity. The stated target for the Group's capital structure is a minimum equity/assets ratio of 30 per cent, and it is estimated that the Group will be able to maintain an interest coverage ratio of at least 2.0 also after the proposed dividend. In view of the current situation on the property market, the company and Group have a good equity/assets ratio. Against this background the Board considers that the company and Group have good opportunities to take advantage of future business opportunities and ride out any losses that may be incurred. Planned investments were taken into account in deciding the proposed dividend. Nor will the dividend adversely affect the company's or Group's ability to make further commercially motivated investments in accordance with the adopted plans.
In the parent company assets and liabilities have been valued at fair value in accordance with Chapter 4, Section 14 of the Annual Accounts Act. The effect of this valuation on parent company equity is negligible.
The proposed dividend will not affect the company's and Group's ability to meet its payment obligations at the right time. The company and Group have good access to liquidity reserves in the form of both short- and long-term credit. The credit can be raised at short notice, which means that the company and Group are well prepared to deal with variations in liquidity and any unexpected events.
The Board of Directors has assessed all other known circumstances that may be significant for the company's and Group's financial position and that have not been addressed in the above. No circumstance has been discovered in the course of the assessment that would cast doubt on the defensibility of the proposed dividend.
Stockholm, 6 March 2008 The Board of Directors
| Group | |||
|---|---|---|---|
| SEK million | Note | 2007 | 2006 |
| Rental income | 7 | 2,066 | 2,343 |
| Property expenses | 8 | -754 | -942 |
| Net operating income | 1,312 | 1,401 | |
| Central administration and marketing | 9 | -60 | -109 |
| Realised changes in value, investment properties | 10, 15 | 446 | 61 |
| Unrealised changes in value, investment properties | 10, 15 | 893 | 911 |
| Operating profit | 1–6, 16, 18, 45 | 2,591 | 2,264 |
| Profit from other securities and assets | |||
| that are fixed assets | 11 | 75 | 12 |
| Interest income | 12 | 18 | 14 |
| Interest expenses | 12 | -642 | -672 |
| Changes in value, fixed income derivatives | 27 | 37 | 230 |
| Changes in value, equities | 13 | -13 | 15 |
| Profit after financial items | 2,066 | 1,863 | |
| Tax on profit for the year | 14 | -254 | 403 |
| Profit for the year | 1,812 | 2,266 | |
| Attributable to parent company shareholders | 1,812 | 2,257 | |
| Earnings per share before dilution, SEK | 10.03 | 11.80 | |
| Earnings per share after dilution, SEK | 9.98 | 11.74 | |
| No. of shares at end of period before dilution, millions | 170.8 | 190.3 | |
| No. of shares at end of period after dilution, millions | 171.9 | 191.4 | |
| Average no. of shares before dilution, millions | 180.7 | 191.3 | |
| Average no. of shares after dilution, millions | 181.8 | 192.5 | |
| Group | ||||
|---|---|---|---|---|
| SEK million | Note | 2007 | 2006 | |
| ASSETS | ||||
| Investment properties | 15 | 30,829 | 27,188 | |
| Equipment | 16 | 6 | 11 | |
| Interests in associated companies | 17 | -3 | 1,204 | |
| Receivables from associated companies | - | 8 | ||
| Other long-term securities holdings | 19 | 76 | 98 | |
| Derivatives | 27 | 13 | - | |
| Other long-term receivables | 20 | 301 | 579 | |
| Total fixed assets | 31,222 | 29,088 | ||
| Trade debtors | 21 | 54 | 51 | |
| Tax assets | - | 120 | ||
| Other receivables | 22 | 351 | 554 | |
| Prepayments and accrued income | 53 | 32 | ||
| Cash and cash equivalents | 36 | 75 | 164 | |
| Total current assets | 533 | 921 | ||
| TOTAL ASSETS | 31,755 | 30,009 | ||
| EQUITY AND LIABILITIES | ||||
| Share capital | 5,086 | 5,030 | ||
| Other contributed capital | 3,017 | 3,016 | ||
| Translation reserve | -23 | -23 | ||
| Retained earnings incl. profit for the year | 3,335 | 4,133 | ||
| Minority interest | - | 21 | ||
| Total equity | 23 | 11,415 | 12,177 | |
| Liabilities to credit institutions | 25 | 13,485 | 10,015 | |
| Convertible bonds | 25, 26 | 47 | 49 | |
| Derivatives | 27 | - | 21 | |
| Deferred tax liability | 28 | 580 | 356 | |
| Provisions | 29 | 645 | 527 | |
| Total long-term liabilities | 14,757 | 10,968 | ||
| Liabilities to credit institutions | 24, 25 | 3,678 | 4,914 | |
| Trade creditors | 21 | 257 | ||
| Provisions | 29 | 168 | 118 | |
| Other liabilities | 30 | 1,082 | 664 | |
| Accruals and deferred income | 31 | 634 | 911 | |
| Total current liabilities | 5,583 | 6,864 | ||
| TOTAL EQUITY AND LIABILITIES | 31,755 | 30,009 | ||
| Commitments | 32 | 15,606 | 15,072 | |
| Contingent liabilities | 32 | 1,735 | 1,129 |
| Attributable to parent company shareholders | Minority interest |
Total equity |
|||||
|---|---|---|---|---|---|---|---|
| Other | Retained earnings | ||||||
| Share contributed | Translation | incl. profit for | |||||
| SEK million | capital | capital | reserves | the year | Total | ||
| Opening balance, 1 January 2006 | 4,808 | 2,586 | -3 | 3,336 | 10,727 | 0 | 10,727 |
| Exchange rate differences | -20 | -20 | -1 | -21 | |||
| Income and expenses for the period | |||||||
| that are recognised in equity | - | - | -20 | - | -20 | -1 | -21 |
| Profit for the year | 2,257 | 2,257 | 9 | 2,266 | |||
| Total income and expenses for the period | - | - | -20 | 2,257 | 2,237 | 8 | 2,245 |
| Cash dividend | -754 | -754 | -754 | ||||
| New shares, conversion of debt instruments | 3 | 3 | 6 | 6 | |||
| Share buybacks | -706 | -706 | -706 | ||||
| Minority share in acquisition of subsidiaries | 665 | 665 | |||||
| Cash acquisition of minority in part-owned subsidiary | -6 | -6 | |||||
| Issue of new shares | 219 | 504 | 723 | 723 | |||
| Acquisition of minority in part-owned subsidiary | -77 | -77 | -646 | -723 | |||
| Closing balance, 31 December 2006 | 5,030 | 3,016 | -23 | 4,133 | 12,156 | 21 | 12,177 |
| Opening balance, 1 January 2007 | 5,030 | 3,016 | -23 | 4,133 | 12,156 | 21 | 12,177 |
| Exchange rate differences | |||||||
| Income and expenses for the period that are recognised in equity |
- | - | - | - | - | - | - |
| Profit for the year | 1,812 | 1,812 | 1,812 | ||||
| Total income and expenses for the period | - | - | - | 1,812 | 1,812 | - | 1,812 |
| Cash dividend | -761 | -761 | -761 | ||||
| New shares, conversion of debt instruments | 1 | 1 | 2 | 2 | |||
| Share buybacks | -543 | -543 | -543 | ||||
| Withdrawal of previously repurchased shares | -272 | 272 | |||||
| Bonus issue | 272 | -272 | |||||
| Redemption of every 16th share | |||||||
| under redemption offer | -314 | -936 | -1,250 | -1,250 | |||
| Bonus issue | 369 | -369 | |||||
| Expenses for implementing the redemption | -1 | -1 | -1 | ||||
| Change in minority share through pre-emption | |||||||
| rights to the shares in Fastighets AB Tornet | -21 | -21 | |||||
| Closing balance, 31 December 2007 | 5,086 | 3,017 | -23 | 3,335 | 11,415 | - | 11,415 |
| Group | |||
|---|---|---|---|
| SEK million | Note | 2007 | 2006 |
| OPERATIONS | |||
| Operating profit excl. depreciation and changes in value of existing property holdings | 1,706 | 1,311 | |
| Interest received and dividend | 93 | 26 | |
| Interest paid | 33 | -650 | -683 |
| Income tax paid | -7 | -8 | |
| Cash flow before change in operating capital | 1,142 | 646 | |
| Change in operating capital | |||
| Current receivables | 452 | 3,354 | |
| Current liabilities | 39 | -157 | |
| Total change in operating capital | 34 | 491 | 3,197 |
| Cash flow from operations | 1,633 | 3,843 | |
| CASH FLOW FROM INVESTING ACTIVITIES | |||
| Investments and acquisition of properties | -4,984 | -8,014 | |
| Property sales, book value at beginning of year | 15 | 2,231 | 12,112 |
| Acquisition of shares in subsidiaries | 35 | - | -2,536 |
| Acquisition of interests in other companies | -20 | -8 | |
| Sale of interests in other companies | 48 | - | |
| Other tangible fixed assets | - | -1 | |
| Other financial fixed assets | 72 | -40 | |
| Cash flow from investing activities | -2,653 | 1,513 | |
| FINANCING ACTIVITIES | |||
| Dividend | -761 | -754 | |
| Share buybacks | -543 | -706 | |
| Loans received/repayment of loans | 2,235 | -3,803 | |
| Cash flow from financing activities | 931 | -5,263 | |
| Change in cash and cash equivalents | -89 | 93 | |
| Cash and cash equivalents at beginning of period | 36 | 164 | 71 |
| Cash and cash equivalents at end of period | 36 | 75 | 164 |
| Parent company | |||
|---|---|---|---|
| SEK million | Note | 2007 | 2006 |
| Net sales | 40 | 108 | 147 |
| Operating expenses | 41 | -196 | -239 |
| Operating loss | 1–3, 5, 45 | -88 | -92 |
| Profit from shares and interests in Group companies | 42 | 1,305 | 2,025 |
| Profit from other securities and assets | |||
| that are fixed assets | 11, 13 | 432 | 410 |
| Changes in value, fixed income derivatives | 27 | 37 | 176 |
| Interest income | 12 | 1 | 1 |
| Interest expenses | 12 | -639 | -565 |
| Profit before tax | 1,048 | 1,955 | |
| Tax on profit for the year | 14 | -10 | 16 |
| Profit for the year | 1,038 | 1,971 |
| Parent company | |||
|---|---|---|---|
| SEK million | Note | 2007 | 2006 |
| ASSETS | |||
| FIXED ASSETS | |||
| Tangible fixed assets | |||
| Buildings and land | 43 | 2 | 2 |
| Equipment | 16 | 1 | 1 |
| Total tangible fixed assets | 3 | 3 | |
| Financial fixed assets | |||
| Shares and interests in Group companies | 44 | 15,116 | 15,092 |
| Receivables from Group companies | 32,089 | 27,014 | |
| Interests in associated companies | 17 | - | 1,205 |
| Receivables from associated companies | 70 | 7 | |
| Other long-term securities holdings | 19 | 72 | 65 |
| Deferred tax asset | 28 | 8 | 89 |
| Derivatives | 27 | 13 | - |
| Other long-term receivables | 20 | 58 | 97 |
| Total financial fixed assets | 47,426 | 43,569 | |
| TOTAL FIXED ASSETS | 47,429 | 43,572 | |
| CURRENT ASSETS | |||
| Current receivables | |||
| Trade debtors | 1 | 2 | |
| Other receivables | 1 | 26 | |
| Prepayments and accrued income | 1 | 4 | |
| Total current receivables | 3 | 32 | |
| Cash and cash equivalents | 36 | 58 | 93 |
| TOTAL CURRENT ASSETS | 61 | 125 | |
| TOTAL ASSETS | 47,490 | 43,697 | |
| EQUITY AND LIABILITIES Shareholders' equity |
23 | ||
| Restricted equity | |||
| Share capital | 5,086 | 5,030 | |
| Reserve fund | 3,166 | 3,673 | |
| Unrestricted equity | |||
| Retained earnings | 1,541 | 1,493 | |
| Profit for the year | 1,038 | 1,971 | |
| Total equity | 10,831 | 12,167 | |
| Provisions | |||
| Provisions for pensions | 29 | 62 | 52 |
| Total provisions | 62 | 52 | |
| Long-term liabilities | |||
| Liabilities to credit institutions | 25 | 13,485 | 10,015 |
| Convertible bonds | 25, 26 | 47 | 49 |
| Derivatives | 27 | - | 21 |
| Loans from Group companies | 19,244 | 16,320 | |
| Total long-term liabilities | 32,776 | 26,405 | |
| Current liabilities | |||
| Liabilities to credit institutions | 25 | 3,678 | 4,914 |
| Trade creditors | - | 9 | |
| Other liabilities | 2 | 2 | |
| Accruals and deferred income | 31 | 141 | 148 |
| Total current liabilities | 3,821 | 5,073 | |
| TOTAL EQUITY AND LIABILITIES | 47,490 | 43,697 | |
| Commitments | 32 | 12,696 | 13,704 |
| Contingent liabilities | 32 | 102 | 150 |
| Share | Unrestricted | Total | |||
|---|---|---|---|---|---|
| SEK million | Note | capital | Reserve fund | equity | equity |
| Equity, 31 December 2005 | 23 | 4,808 | 3,166 | 3,099 | 11,073 |
| Effect of change of accounting principles, | |||||
| financial instruments (IAS 39) | -146 | -146 | |||
| Profit for the year | 1,971 | 1,971 | |||
| Cash dividend | -754 | -754 | |||
| Share buybacks | -706 | -706 | |||
| New shares, conversion of debt instruments | 3 | 3 | 6 | ||
| New shares, acquisition of minority's | |||||
| share of shares in subsidiaries | 219 | 504 | 723 | ||
| Equity, 31 December 2006 | 5,030 | 3,673 | 3,464 | 12,167 | |
| Share premium reserve | -507 | 507 | |||
| Profit for the year | 1,038 | 1,038 | |||
| Cash dividend | -761 | -761 | |||
| Share buybacks | -543 | -543 | |||
| New shares, conversion of debt instruments | 1 | 1 | 2 | ||
| Withdrawal of previously repurchased shares | -272 | 272 | |||
| Bonus issue | 272 | -272 | |||
| Redemption of every 16th share under redemption offer | -314 | -936 | -1,250 | ||
| Bonus issue | 369 | -369 | |||
| Expenses for implementing the redemption | -1 | -1 | |||
| Net Group contributions received | 179 | 179 | |||
| Equity, 31 December 2007 | 5,086 | 3,166 | 2,579 | 10,831 |
| Parent company | |||
|---|---|---|---|
| SEK million | Note | 2007 | 2006 |
| OPERATIONS | |||
| Operating profit excl. depreciation | -87 | -91 | |
| Interest received | 446 | 395 | |
| Interest paid | 33 | -647 | -554 |
| Income tax paid | 0 | -8 | |
| Cash flow before change in operating capital | -288 | -258 | |
| Change in operating capital | |||
| Current receivables | 29 | 440 | |
| Current liabilities | -7 | -34 | |
| Total change in operating capital | 34 | 22 | 406 |
| Cash flow from operations | -266 | 148 | |
| INVESTING ACTIVITIES | |||
| Acquisition of interests in Group companies | -24 | -3,123 | |
| Acquisition of interests in other companies | -20 | -1,216 | |
| Other tangible fixed assets | -1 | -1 | |
| Other financial fixed assets | -5,811 | -7,423 | |
| Cash flow from investing activities | -5,856 | -11,763 | |
| FINANCING ACTIVITIES | |||
| Dividends paid | -761 | -754 | |
| Group contribution received | 250 | - | |
| Dividends received | 2,020 | 2,890 | |
| Share buybacks | -543 | -706 | |
| Loans received/repayment of loans | 5,121 | 10,219 | |
| Cash flow from financing activities | 6,087 | 11,649 | |
| Change in cash and cash equivalents | -35 | 34 | |
| Cash and cash equivalents at beginning of period | 36 | 93 | 59 |
| Cash and cash equivalents at end of period | 36 | 58 | 93 |
(SEK million, unless otherwise specified)
Fabege AB (publ), organisation number 556049-1523, with registered office in Stockholm, is the parent company of a corporate group with subsidiary companies, as stated in Note 44. The company is registered in Sweden and the address of the company's head office in Stockholm is: Fabege AB, Box 730, 169 27 Solna. Visiting address: Dalvägen 8.
Fabege is one of Sweden's leading properties companies, with a business that is concentrated to the Stockholm region. The company operates through subsidiaries and its property portfolio consists primarily of commercial premises.
The consolidated financial statements have been prepared in accordance with the Swedish Annual Accounts Act, the International Financial Reporting Standards (IFRS), as adopted by the EU, and the interpretations of the International Financial Reporting Interpretations Committee (IFRIC), as at 31 December 2007. The Group also applies Recommendation RR 30, Supplementary Accounting Rules for Corporate Groups, of the Swedish Financial Accounting Standards Council, which specifies the supplementary rules that are required in addition to IFRS under provisions contained in the Swedish Annual Accounts Act. The annual accounts of the parent company have been prepared in accordance with the Annual Accounts Act, Recommendation RR 32, Accounting for Legal Entities, of the Swedish Financial Accounting Standards Council and statements issued by the Urgent Issue Committee of the Swedish Financial Accounting Standards Council. The parent company's accounts comply with the Group's principles, except in respect of what is stated below in the section entitled Differences between the accounting principles of the Group and the parent company. Items included in the annual accounts have been valued at acquisition cost, except in the case of revaluation of investment properties and in respect of financial instruments. The following is a description of some significant accounting principles that have been applied.
Subsidiaries are those companies in which the Group directly or indirectly holds more than 50 per cent of the votes or in other ways exercises a controlling influence. Controlling influence means that the Group has the right to draw up financial and operational strategies. The existence and effect of potential voting rights that can currently be used or converted is taken into account in assessing whether the Group exercises a controlling influence. Subsidiaries are included in the consolidated financial statements as of the time when the controlling influence is transferred to the Group and are excluded from the consolidated financial statements as of the time when the controlling influence ceases. Subsidiaries are reported in accordance with the acquisition method. Acquired identifiable assets, liabilities and contingent liabilities are valued at fair value on the date of acquisition. The surplus, which is defined as the difference between the acquisition cost and fair value of the acquired interests and the sum of fair value of acquired identifiable assets and liabilities, is recognised as goodwill. If the acquisition cost is less than the fair value of the acquired subsidiary's net assets, the difference is recognised directly in the profit and loss account. All inter-company transactions and balances within the Group have been eliminated in preparing the consolidated financial statements. In case of the acquisition of a group of assets or net assets that do not constitute an operation, the costs for the Group are instead allocated to the individually identifiable assets and liabilities in the group based on their relative fair values at the time of acquisition.
A company is reported as an associated company if Fabege holds at least 20 per cent and no more than 50 per cent of the votes or otherwise exercises a significant influence on the company's operational and financial control. In the consolidated financial statements associated companies are reported in accordance with the equity method. Interests in associated companies are reported in the balance sheet at acquisition cost after adjusting for changes in the Group's share of the associated company's net assets, less any decrease in the fair value of individual interests. In transactions among Group companies and associated companies that part of unrealised gains and losses which represents the Group's share of the associated company is eliminated, except as regards unrealised losses that are due to impairment of an assigned asset.
For companies that are 50 per cent owned in which Fabege exercises a joint controlling influence together with another party, the company's assets, liabilities, income and expenses have been included in the consolidated financial statements in proportion to Fabege's ownership share (proportionate consolidation). In transactions between the Group and a joint venture that part of unrealised gains and losses which represents the Group's share of the jointly controlled company is eliminated.
Minority interest consists of the market value of minority interests in net assets for subsidiaries that were included in the consolidated financial statements at the time of the original acquisition and the minority owners' share of changes in equity after the acquisition.
All investment properties are let to tenants under operational leases. Rental income from the company's property management activities is recognised in the period to which it refers. Gains or losses from the sale of properties are recognised on the date of contract unless the purchase contract contains special provisions which prohibit this. Rental income for investment properties is recognised on a straight-line basis in accordance with the terms and conditions of the applicable leases. In cases where the lease provides for a discounted rent during a certain period that is offset by a higher rent at other times, the resulting deficit or surplus is distributed over the term of the lease.
Interest income is distributed over the term of the contract. Dividends on shares are recognised when the shareholder's right to receive payment is deemed to be secure.
Leasing agreements in which the risks and benefits associated with ownership of the assets are in all material respects are borne by the lessor are classified as operational leases. All of the Group's leases are classified as operational leases. Leasing fees are reported as an expense in the profit and loss account and distributed across the term of the agreement on a straight-line basis.
All properties in the Group are classified as investment properties, as they are held for the purpose of earning rental income or for capital appreciation or a combination of the two.
The concept of investment property includes buildings, land and land improvements, new builds, extensions or conversions in progress and property fixtures.
Investment properties are recognised at fair value on the balance sheet date. Fair value for the property portfolio is determined at the time of preparing the year-end financial statement through external valuations. All properties are valued in connection with quarterly statements, of which a certain share by external valuers. Gains and losses attributable to changes in the fair value of investment properties are recognised for the period in which they arise in the income and expense item unrealised changes in value, investment properties.
Gains or losses from the sale or disposal of investment properties consist of the difference between the selling price and carrying amount based on the most recent revaluation to fair value. Gains or losses from sales or disposals are recognised in the income and expense item Realised changes in value, investment properties. Projects involving conversion/maintenance and tenant adaptations are recognised as an asset to the extent that the measure adds value in relation to the latest value. Other expenses are charged to expense immediately. In case of major new builds, extensions and conversions interest expenses are recognised as assets over the period of production. Sales and acquisitions of properties are recognised at the time when the risks and benefits associated with ownership are transferred to the buyer or seller, which is normally on the contract date.
Equipment is recognised at acquisition cost less accumulated depreciation and any write-downs. Depreciation of equipment is expensed by writing off the value of the asset on a straight-line basis over its estimated period of use.
In case of an indication of a decrease in the value of an asset (excluding investment properties and financial instruments, which are valued at fair value), the recoverable amount of the asset is determined. If the carrying amount of the asset exceeds the recoverable amount, the asset is written down to this value. Recoverable amount is defined as the higher of market value and value in use. Value in use is defined as the present value of estimated future payments generated by the asset.
In the consolidated financial statements loan expenses have been charged to earnings in the year to which they refer, except to the extent that they have been included in the acquisition cost of a building project. The interest rate used to calculate the capitalised borrowing cost is the average interest rate of the loan portfolio. In the accounts of individual companies the main principle, that all loan expenses should be charged to expense in the year to which they refer, has been applied.
The income and expense item Tax on profit for the year includes current and deferred income tax for Swedish and foreign Group units. The current tax liability is based on the taxable profit for the year. Taxable profit for the year differs from reported profit for the year in that it has been adjusted for non-taxable and non-deductible items. The Group's current tax liability is calculated on the basis of tax rates that have been prescribed or announced on the balance sheet date.
Deferred tax refers to tax on temporary differences that arise between the carrying amount of assets and the tax value used in calculating the taxable profit. Deferred tax is reported in accordance with the balance sheet liability method.
Deferred tax liabilities are recognised for practically all taxable temporary differences, and deferred tax assets are recognised when it is likely that the amounts can be used to offset future taxable profits. The carrying amount of deferred tax assets is tested for impairment at the end of each fiscal year and an impairment loss is recognised to the extent that it is no longer probable that sufficient taxable profits will be available against which the deferred tax asset can be fully or partially offset. Deferred tax is recognised at the nominal current tax rate with no discount. Deferred tax is recognised as an income or expense in the profit and loss account, except in those cases where it refers to transactions or events that have been recognised directly in equity. In such cases the deferred tax is also recognised directly in equity.
Deferred tax assets and tax liabilities are offset against one another when they refer to income tax payable to the same tax authority and when the Group intends to settle the tax by paying the net amount.
Transactions in foreign currencies are translated, upon inclusion in the accounts, to the functional currency at the exchange rates applying on the transaction date. Monetary assets and liabilities in foreign currencies are translated on the balance sheet date at the exchange rates applying on the balance sheet date. Any resulting exchange rate differences are recognised in the profit and loss account for the period.
In preparing consolidated financial statements, the balance sheets of the Group's foreign businesses are translated from their functional currencies into Swedish kronor based on the exchange rates applying on the balance sheet date. Income and expense items are translated at the average exchange rate for the period. Any translation differences that arise are recognised in equity and transferred to the Group's translation reserve. The accumulated translation difference is transferred and reported as part of a capital gain or loss in cases where the foreign business is divested.
Fabege reports cash flows from the company's main sources of income: net operating income from the property management business and gains from property sales in the company's operating activities.
For information about the company's transactions with related parties, see Note 5 in respect of compensation to senior executives and Note 37 for other related-party transactions.
Provisions are recognised when the company has a commitment and it is likely that an outflow of resources will be required and the amount can be reliably estimated.
Contingent liabilities are recognised if there exists a possible commitment that is confirmed only by several uncertain future events and it is not likely that an outflow of resources will be required or that the size of the commitment can be calculated with sufficient accuracy.
A financial asset or financial liability is recognised in the balance sheet when the company becomes a party to the commercial terms and conditions of the instrument. A financial asset is removed from the balance sheet when the rights inherent in the agreement are realised, expire or if the company loses control over them. A financial liability is removed from the balance sheet when the obligation arising from the agreement has been met or ceased for other reasons.
Transaction date accounting is used for derivatives while settlement date accounting is used for spot purchases and sales of financial assets.
In connection with each financial report the company assesses whether there are objective indications that a financial asset or group of financial assets requires impairment.
Financial instruments are recognised at accrued acquisition cost or fair value, depending on the initial categorisation under IAS 39.
Official quoted prices on the closing date are used in determining the
fair value of derivatives while fair value of loan liabilities is determined by discounting future cash flows by the quoted market interest rate for each maturity.
Quoted market prices are used in determining fair value of shareholdings. In the absence of such prices, fair value is determined through a valuation technique devised by the company.
For all financial assets and liabilities, unless otherwise stated in the Notes, the carrying amount is considered to be a good approximation of fair value.
Financial assets and liabilities are offset against each other and the net amount is recognised in the balance sheet when there is a legal right to offset and there is an intention to settle the items by a net amount or to simultaneously realise the asset and settle the liability.
Cash and cash equivalents consist of cash assets held at financial institutions. The item also includes short-term investments that have a maturity from the time of acquisition of less than three months and that are exposed to insignificant risk of fluctuations in value.Cash and cash equivalents are recognised at their nominal amounts.
Trade debtors are categorised as "Loan receivables and trade debtors", which means that the item is recognised at accrued acquisition cost. Fabege's trade debtors are recognised at the amount that is expected to be received after deducting for uncertain receivables, which are assessed individually. The expected maturity of a trade debtor is short, and the value is therefore recognised at the nominal amount with no discount. Impairment of trade debtors is recognised in operating expenses.
Long-term receivables and other (current) receivables primarily consist of promissory note receivables relating to sales proceeds for properties that have been sold but not yet vacated. These items are categorised as "Loan receivables and trade debtors", which means that the items are recognised at accrued acquisition cost. Receivables are recognised at the amount that is expected to be received after deducting for uncertain receivables, which are assessed individually. Receivables with short maturities are recognised at nominal amounts with no discount.
Other long-term securities holdings primarily consists of shareholdings. These are categorised as financial assets and are valued at fair value via the profit and loss account.
Fabege does not apply hedge accounting of derivatives and therefore categorises derivatives as "Financial assets or financial liabilities that are held for trading purposes". Assets and liabilities in these categories are valued at fair value and changes in value are recognised in the profit and loss account.
Accounts payable - trade are categorised as "Other liabilities", which entails recognition at accrued acquisition value. The expected term of accounts payable - trade is short, and the liability has therefore been recognised undiscounted at nominal sum.
Convertible bonds are recognised as a compound financial instrument consisting of a debt component and an equity component. The breakdown of the value into these components is made by calculating the fair value of the liability and assuming that the residual item represents the value of the equity component. The debt component is then recognised at accrued acquisition cost. Transactions incurred in connection with the issue of a compound financial instrument must be divided into debt and equity components in proportion to the breakdown of the proceeds of the issue.
The interest on the current convertible bonds was 5.25 per cent, which was higher than the market interest rate, as Fabege's average borrowing rate at the time (1 Oct 2004) was 4.35 per cent. For that reason no breakdown by equity component has been recognised as at 31 December 2007.
Fabege's liabilities to credit institutions and certificate holders and other liabilities are categorised as "Other liabilities" and valued at accrued acquisition cost. Long-term liabilities have an expected maturity of more than 1 year while current liabilities have a maturity of less than 1 year.
Compensation to employees in the form of salaries, holiday pay, paid sick leave, etc. as well as pensions are recognised as it is earned. Pensions and other compensation paid after termination of employment are classified as defined contribution or defined benefit pension schemes. Premiums relating to these pension schemes are expensed as they are incurred.
For defined benefit pension schemes, the cost of the pension commitments is calculated according to the projected unit credit method, in which an actuarial calculation is made on each balance sheet date. Actuarial gains and losses are recognised immediately to the extent that compensation is already secure, or in other cases as a cost distributed linearly over the average period until the compensation has become secure.
Defined benefit pension commitments recognised in the balance sheet consist of the present value of defined benefit pension commitments, after adjusting for unreported actuarial gains and losses as well as unrealised expenses relating to service during previous periods, less the fair value of the investment assets. The asset resulting from the above calculation is limited to unreported net accumulated actuarial losses and costs relating to service in previous periods, plus the present value of available economic benefits in the form of repayments under the scheme or in the form of reductions of future fees to the scheme.
Employees in the former Fabege have defined benefit pension schemes. As of 2005 no accrual is made of the PRI defined benefit pension scheme. Any actuarial gains/losses are recognised in the profit and loss account in the periods to which they refer.
The accounts of the parent company are prepared in accordance with the Annual Accounts Act, Recommendation RR 32, Accounting for Legal Entities, of the Swedish Financial Accounting Standards Council and statements issued by the Urgent Issue Committee of the Swedish Financial Accounting Standards Council. Tax laws in Sweden allow companies to defer tax payments through provisions to untaxed reserves in the balance sheet via the income and expense item appropriations. In the consolidated balance sheet these are treated as temporary differences, i.e. a breakdown is made between deferred tax liability and equity. Changes in untaxed reserves are recognised in the consolidated profit and loss account and broken down between deferred tax and profit for the year. Interest during the building period that is included in the acquisition cost of the building is only recognised in the consolidated financial statements.
Group contributions and shareholder contributions are reported in accordance with Statement URA7 of Urgent Issue Committee of the Swedish Financial Accounting Standards Council. This means that Group contributions and shareholder contributions are recognised based their economic significance. The contributions are reported as a capital transfer, i.e. as a decrease or increase of unrestricted equity. The consequence of this accounting principle is that only tax that is attributable to income and expense items is recognised in the profit and loss account.
Defined benefit and defined contribution pension schemes are reported in accordance with hitherto applicable Swedish accounting standards, which are based on the provisions of the Pension Obligations Vesting Act (Tryggandelagen).
As a net borrower, Fabege is exposed to financial risks. In particular, Fabege is exposed to financing risk, interest risk, currency risk and credit risk. Operational responsibility for the Group's borrowing, liquidity management and financial risk exposure rests with the finance function, which is a central unit in the parent company. Fabege's financial policy, as adopted by the Board of Directors, specifies how financial risks should be managed and defines the limits within which the finance function may operate. Fabege's risk exposure will be restricted and as far as possible controlled with regard to choice of investments, tenants and terms of contract, financing terms and business partners.
Financing and liquidity risk is defined as the borrowing requirement that can be covered in a tight market. The borrowing requirement can refer to refinancing of existing loans or new borrowing.
Fabege strives to ensure a balance between short-term and longterm borrowing, distributed among a number of different sources of funding. Fabege's financial policy states that unused credit facilities must be available to ensure good liquidity. Committed long-term credit lines with predefined terms as well as revolving credit facilities have been agreed with major lenders. Fabege's main credit providers are the Swedish commercial banks.
The Group's borrowing is secured mainly by mortgages on properties. Since autumn 2004 the Group has been active in the Swedish certificate market. The company's ambition is to participate in this market as a major player. At year-end 2007 Fabege had unused credit facilities of SEK 7,998 million.
Committed lines of credit, 31 December 2007
| Year, maturityUsed amount, SEKmamount, SEKm | |
|---|---|
| 3,678 | 8,621 |
| 47 | 47 |
| 680 | 1,500 |
| 4,500 | 4,500 |
| 5,765 | 8,000 |
| 2,540 | 2,540 |
| 17,210 | 25,208 |
| -13 | |
| 17,197 | |
Interest risk refers to the risk that changes in interest rates will affect the Group's borrowing expense. Interest expenses constitute the Group's single largest expense item. Under the financial policy, fixedinterest borrowing shall be employed on the basis of forecast interest rates, cash flow and capital structure. Fabege employs financial instruments, primarily interest rate swaps, to limit interest risk and as a flexible means of adjusting the average fixed-rate term of the loan portfolio. The sensitivity analysis in the Directors' Report shows how a change in interest rates affects the Group's earnings in the short term and the long term. Interest-bearing liabilities (excluding the value of fixed income derivatives, SEK 13 million) were SEK 17,210 million (14,978) on 31 December with an average interest rate of 4.28 per cent (3.72%) excluding loan commitments and 4.31 per cent including costs relating to loan commitments. Out of total liabilities, SEK 47 million refers to a convertible bond loan and SEK 3,540 million to outstanding certificates. In February 2008 outstanding certificates were SEK 4 billion. The total loan volume as at 31 December includes loans for works in progress of SEK 323 million, on which interest of SEK 8 million has been capitalised. The average fixed-rate term for the loans, including the effects of exercised derivatives, was 3 months (10) on 31 December. The average maturity was 5.1 years (4.2). Average leverage at year-end was 56 per cent. The derivatives portfolio is valued at fair value under IAS 39. The value of the portfolio is SEK 13 million. Realised changes in value in profit for the year is SEK 2 million (34) and unrealised changes in value SEK 35 million (196). Changes in market value occur as a result of changes in market interest rates and volatility, as the company's portfolio includes structured derivatives products. A market valuation of the loan portfolio (excl. derivatives products) shows a deficit of SEK 5 million. For all other financial assets and liabilities, unless otherwise stated in the Notes, the carrying amount is considered to be a good approximation of fair value.
| Average | ||||
|---|---|---|---|---|
| Year, maturity | SEKm | interest rate, % | Share, % | |
| < 1 år | 15,413 | 4.29 | 89 | |
| 1–2 år | 1,497 | 4.10 | 9 | |
| 2–3 år | 0 | 0.00 | 0 | |
| 3–4 år | 300 | 4.43 | 2 | |
| 4–5 år | 0 | 0.00 | 0 | |
| > 5 år | 0 | 0.00 | 0 | |
| Total | 17,210 | 4.28 | 100 | |
| Excess value, derivatives - 13 |
||||
| Total incl. derivatives | 17,197 |
Currency risk refers to the risk that Fabege's profit and loss account and balance sheet will be negatively affected by a change in exchange rates. Fabege owns a land property in Belgium. Under the Group's policy, properties must be financed in the currency of the country in which they are located. To avoid currency risks, the value of the Belgian property has been hedged through loans in euros (EUR 2m). Any changes in exchange rates will thus affect only the net profit for the property.
Credit risk is the risk of loss as a result of the failure of a counterparty to fulfil its obligations. The risk is limited by the requirement, contained in the financial policy, that only creditworthy counterparties be accepted in financial transactions. The credit risk of financial counterparties is limited through netting/ISDA agreements and was deemed to be non-existent at year-end. As regards Fabege's trade debtors, the policy states that customary credit assessments must be made before a new tenant is accepted. Similarly, the company also assesses creditworthiness in respect of any promissory note receivables arising from the sale of properties and businesses. The maximum credit ex-
posure in respect of trade debtors and promissory note receivables is its reported value. See also the sensitivity analysis in the Directors' Report.
The parent company is responsible for the Group's external borrowing. The company uses these funds to finance the subsidiaries at market terms.
The valuation at fair value of the investment properties includes estimates and assessments that are to be regarded as significant for accounting purposes (see also Note 15). The estimates and assessments made in connection with the realisation of investment properties, primarily with respect to rental guarantees, are also to be regarded as significant. For rental guarantees an assessment is made of the probability of payment and any investment costs for the preparing of premises for rental during the remaining term of the guarantee. Rental guarantees etc. are included in the balance sheet item Provisions.
Upon acquisition of a company the company makes an assessment of whether the acquisition is to be regarded as an asset acquisition or a business combination. Businesses that only contain properties and have no property management organisation/administration are normally classified as asset acquisitions.
In valuing loss carry-forwards, the company makes an assessment of the probability that the carry-forwards can be used. Confirmed loss carry-forwards are used as a basis for calculating deferred tax assets if it is highly likely that they can be used against future profits.
| Of which | Of which | |||
|---|---|---|---|---|
| Average no. of employees | 2007 | men | 2006 | men |
| Parent company | 33 | 14 | 30 | 11 |
| Subsidiaries | 113 | 72 | 164 | 107 |
| Group, total | 146 | 86 | 194 | 118 |
| Salaries | Social | Salaries | Social | |
| and other | security | and other | security | |
| compensation contributions compensation contributions | ||||
| 2007 | 2007 | 2006 | 2006 | |
| Parent Company | 24 | 20 | 25 | 17 |
| - of which pension expenses | 9 | 6 | ||
| Subsidiaries | 46 | 24 | 66 | 34 |
| - of which pension expenses | 7 | 9 | ||
| Group, total | 70 | 44 | 91 | 51 |
| - of which pension expenses, total | 16 | 15 |
| Total sick leave as a percentage of total ordinary working time | 2.9 |
|---|---|
| of which, share of long-term sick leave | |
| (continuous leave of 60 days or more) | 57.9 |
| Sick leave, women | 3.3 |
|---|---|
| Sick leave, men | 2.6 |
| Sick leave, employees <30 years | 1.1 |
| Sick leave, employees 30-49 years | 3.1 |
| Sick leave, employees >49 years | 2.9 |
| Senior | Senior | |||
|---|---|---|---|---|
| Board | Board executives | executives | ||
| 2007 | 2006 | 2007 | 2006 | |
| Men | 6 | 6 | 6 | 6 |
| Women | 2 | 1 | 1 | 1 |
| Total | 8 | 7 | 7 | 7 |
Other senior executives refers to six persons who together with the Chief Executive Officer made up Group management in 2007. During the year Group management was increased by three individuals: a Director of Business Development, a Director of Projects & Development and one further Property Director. As of December 2007, Group management consisted of the CEO, CFO, Director of Communications and Investor Relations, Director of Business Development, Property Director (Stockholm City), Property Director (Other) and Director of Projects & Development. The compensation paid to senior executives is based on market terms, in accordance with guidelines adopted by the Annual General Meeting. For information about the current composition of Group management, see page 81.
Fabege has a profit-sharing fund that covers all employees of the Company. Allocations to the profit-sharing fund should be based on the achieved return on equity and are subject to a ceiling of one base amount per year per employee. Other benefits refers to company cars and household-related services.
Pension expenses refers to the expense recognised in the profit and loss account for the year. The retirement age for the Chief Executive Officer is 65 years. A pension premium of 35 per cent of the CEO's pensionable salary is paid during the term of employment. For other senior executives the ITP occupational pension plan applies and the retirement age is 65 years.
A mutual period of notice of six months applies between the company and Chief Executive Officer, who is entitled to 18 months' severance pay. Other senior executives have a mutual period of notice of three to six months and are entitled to 18 months' severance pay. Severance pay is only paid in case of termination by the company and is offset by other income for all persons in senior positions.
The Board of Directors with the exception of the CEO is responsible for preparing a proposal for compensation and other terms of employment for the CEO and a set of principles for compensation and other terms of employment for other senior executives.
The Directors are paid Directors' fees in accordance with the decisions of the Annual General Meeting. In 2007 total Directors' fees of SEK 2,380,000 (1,325,000) were paid. Out of this amount, the Chairman of the Board received SEK 365,000 plus a separate fee of SEK 835,000 and the other Directors, excluding the CEO, received a total of SEK 1,180,000 (750,000). No other fees or benefits were paid to the Board.
| Basic | Other | |||
|---|---|---|---|---|
| Group management | salary/fee | benefits1) | Pension | Total |
| Chief Executive Officer | 2,020 | 142 | 705 | 2,867 |
| Other senior | ||||
| executives | 5,723 | 534 | 1,392 | 7,649 |
1) Includes allocations to a profit-sharing fund of SEK 41,000/person
During the year extra compensation/bonuses of a total of SEK 110,000 were paid to the group other senior executives. No other variable or share-related compensation was paid to Group management.
| Directors' Fee, Audit | |||
|---|---|---|---|
| Board of Directors | fees Committee | Total | |
| Erik Paulsson (Chairman) | 1,200 | - | 1,200 |
| Sven-Åke Johansson (Deputy Chairman) | 180 | 50 | 230 |
| Göte Dahlin | 180 | 25 | 205 |
| Märta Josefsson | 180 | 25 | 205 |
| Helene Olausson | 180 | - | 180 |
| Svante Paulsson | 180 | - | 180 |
| Mats Qviberg | 180 | - | 180 |
| Total | 2,280 | 100 | 2,380 |
The company's business is concentrated to commercial property in the Stockholm region, which also constitutes the company's only segment.
All investment properties are let to tenants under operational leases and generate rental income. A breakdown by remaining maturity of future rental income attributable to non-terminable operational leases is shown in the following table:
| Group | |||
|---|---|---|---|
| 2007 | 2006 | ||
| Maturity: | |||
| Within 1 year | 554 | 300 | |
| 1 to 5 years | 924 | 1,176 | |
| Later than 5 years | 639 | 458 | |
| Residential, garage/parking | 139 | 141 | |
| Total | 2,256 | 2,075 |
The difference between total rents on 31 December 2007 and income, as stated in the profit and loss account for 2007, is due to bought/sold properties, renegotiations and changes in occupancy rates in 2007. Contracts relating to residential premises and garage/parking spaces remain in force until further notice.
| Group | |||
|---|---|---|---|
| 2007 | 2006 | ||
| Operating expenses, maintenance | |||
| and tenant adaptations | -479 | -614 | |
| Property tax | -133 | -113 | |
| Ground rent | -32 | -76 | |
| VAT expense | -25 | -25 | |
| Property/project adm. and lettings | -85 | -114 | |
| Total | -754 | -942 |
Refers to Group management expenses, expenses attributable to the public nature of the company and other expenses connected with the company type.
Property- and property management-related administration is not included, as it is treated as a property expense.
The 2006 figures include one-off charges of about SEK 35 million attributable to the acquisition of Fastighets AB Tornet, which refer to temporary double functions and the winding-up/merger of organisations and operations.
| Group | ||
|---|---|---|
| 2007 | 2006 | |
| Realised changes in value: | ||
| Sale proceeds | 2,919 | 12,614 |
| Book value and expenses | -2,473 | -12,553 |
| 446 | 61 | |
| Unrealised changes in value: | ||
| Changes in value relating to properties | ||
| owned on 31 Dec 2007 | 888 | 960 |
| Changes in value during the year relating | ||
| to properties divested during the year | 5 | -49 |
| 893 | 911 | |
| Total realised and unrealised | ||
| changes in value | 1,339 | 972 |
Book/fair value and resulting unrealised changes in value are determined quarterly based on valuations. If a property is sold in quarters 2-4, the sale will give rise, in addition to the unrealised change in value, to a realised change in value that is based on the selling price in relation to confirmed fair value for the last quarter.
In measuring the results for the full year, the following breakdown is instead obtained, irrespective of revaluations during the year:
| Group | ||
|---|---|---|
| 2007 | 2006 | |
| Gain from property sales, full year: | ||
| Sale proceeds | 2,919 | 12,614 |
| Book value and expenditure | ||
| (based on value at beginning of year) | -2,468 | -12,602 |
| 451 | 12 | |
| Changes in value: | ||
| Changes in value relating to properties | ||
| onwed on 31 Dec 2007 | 888 | 960 |
| 888 | 960 | |
| Total gain from property | ||
| sales and changes in value | 1,339 | 972 |
| Breakdown between positive | ||
| and negative results | ||
| Positive | 2,225 | 2,326 |
| Negative | -886 | -1,354 |
| Total | 1,339 | 972 |
| Group | Parent Company | |||
|---|---|---|---|---|
| 2007 | 2006 | 2007 | 2006 | |
| Dividends | 60 | - | 60 | - |
| Interest income, Group companies | - | - | 372 | 390 |
| Interest income, promissory notes | 15 | 12 | 13 | 5 |
| Total | 75 | 12 | 445 | 395 |
| Group | Parent company | |||
|---|---|---|---|---|
| 2007 | 2006 | 2007 | 2006 | |
| Interest income | 18 | 14 | 1 | 1 |
| Total | 18 | 14 | 1 | 1 |
| Interest expenses | -642 | -672 | -639 | -565 |
| Total | -642 | -672 | -639 | -565 |
All interest income is attributable to financial assets valued at accrued acquisition cost.
Interest expenses refers primarily to financial liabilities valued at accrued acquisition cost. The item includes an early redemption penalty of SEK 5 million.
The result of SEK -13 million (15) refers to a change in the value of shares in Diös Fastigheter AB of SEK -7 million (15) and of shares in AIK Fotboll AB of SEK -6 million (-).
| Group | Parent company | |||
|---|---|---|---|---|
| 2007 | 2006 | 2007 | 2006 | |
| Current tax on profit for the year | -7 | -8 | - | - |
| Adjustment for current tax | ||||
| from previous years | - | - | - | -16 |
| Total current tax | -7 | -8 | - | -16 |
| Deferred tax | -247 | 411 | -10 | 32 |
| Total tax | -254 | 403 | -10 | 16 |
| Nominal tax (28%) on profit after | ||||
| financial items | -578 | -522 | -293 | -538 |
| Tax effects of adjustment items | ||||
| - Adjustment for deficits and temporary differences from previous years |
133 | - | 1 | - |
| - Dividends from subsidiaries | - | - | 364 | 566 |
| - Tax-exempt profit from sale of Group companies/properties 185 |
923 | - | - | |
| - Other | 6 | 2 | -82 | 4 |
| Total tax excl. current tax | ||||
| from previous years Adjustment for current tax |
-254 | 403 | -10 | 32 |
| from previous years | - | - | - | -16 |
| Total tax | -254 | 403 | -10 | 16 |
At year-end Fabege's property portfolio is valued by external independent valuers with recognised qualifications. The properties should be valued at fair value, i.e. at their estimated market values. This year's valuers were DTZ and Newsec, each of which valued, as at 31 December, half of Fabege's properties evenly distributed across our sub-markets. Fabege provides information about existing and future rental agreements, operations and maintenance expenses and estimated investments based on maintenance plans and estimated future vacancies to the valuers. On-site inspections were carried out in all properties on at least one occasion during the period 2005-2007. The properties have also been inspected on site in connection with major investments or other changes that affect the value of a property.
The property valuation is based on cash flow statements, in which the present value of net operating incomes during a five-year calculation period and the residual value of the property at the end of the period are calculated. Long-term vacancies are estimated on the basis of the property's location and condition. The valuers' assessments of outgoing payments for operations and regular maintenance are based on experience of comparable properties and information on current and historical costs provided by Fabege. Expenses are expected to increase in line with the assumed inflation rate. Ground rents are calculated on the basis of agreements or, alternatively, in reference to market grounds rents if the ground rent period expires during the calculation period.
Property tax is estimated on the basis of the general property taxation for 2007. The discount rate used is a nominal required return on total capital before tax. The required rate of return is based on experience-based assessments of the market's required returns for similar properties. The discount rate for Fabege's property portfolio is 7.3 per cent (7.8%) and is based on the nominal yield for 5-year Treasury bonds plus a certain percentage for property-related risk. The residual value is the market value of the leasehold/property at the end of the period of calculation, which is estimated on the basis of forecast net operating income for the first year after the calculation period. The weighted yield requirement at the end of the calculation period is 5.5 per cent (5.8%).
The market assessments were performed in accordance with guidelines produced by the Swedish Property Index.
| Annual inflation, % | 2 |
|---|---|
| Weighted discount rate, % | 7,3 |
| Weighted yield requirement, residual value, % | 5,5 |
| Average long-term vacancy, % | 5,0 |
| Operations and maintenance | |
| Commercial, SEK/sqm | 344 |
| Residential, SEK/sqm | 485 |
| 30,829 | 5.5 | 3.5 | |
|---|---|---|---|
| Other outside Stockholm | 26 | 10.0 | -12.6 |
| Rest of Stockholm | 3,112 | 5.9 | 7.7 |
| Hammarby Sjöstad | 1,586 | 6.3 | 3.4 |
| Solna | 8,980 | 5.8 | 1.2 |
| Inner City | 17,125 | 5.1 | 4.1 |
| 2007 | yield, % for investments,% | ||
| Weighted | after deducting | ||
| in value | |||
| Change |
| Group | ||
|---|---|---|
| 2007 | 2006 | |
| Opening fair value | 27,188 | 21,296 |
| Property acquisitions | 4,018 | 16,110 |
| Investments in new builds, | ||
| extensions and conversions | 966 | 934 |
| Changes in value, existing | ||
| property portfolio | 888 | 960 |
| Changes in value relating to | ||
| properties divested during the year | 5 | -49 |
| Sales and disposals | -2,236 | -12,063 |
| Closing fair value | 30,829 | 27,188 |
Book/fair value and the resulting unrealised changes in value are determined quarterly based on valuations. If a property is sold in quarters 2-4, the sale will give rise, in addition to the unrealised change in value, to a realised change in value that is based on the selling price in relation to confirmed fair value for the last quarter.
| Assessed value of Swedish properties | 15,560 | 13,668 |
|---|---|---|
| -------------------------------------- | -------- | -------- |
Fabege has mortgaged certain properties, see also Note 32 Commitments and contingent liabilities.
| Group | Parent company | |||
|---|---|---|---|---|
| 2007 | 2006 | 2007 | 2006 | |
| Opening acquisition cost | 95 | 88 | 2 | 1 |
| Investments | 1 | 7 | 1 | 1 |
| Sales and disposals | -68 | - | - | - |
| Closing accrued acquisition costs | 28 | 95 | 3 | 2 |
| Opening depreciation | -84 | -77 | -1 | 0 |
| Sales and disposals | 65 | - | - | - |
| Depreciation charge for the year | -3 | -7 | -1 | -1 |
| Closing accumulated depreciation -22 | -84 | -2 | -1 | |
| Book value | 6 | 11 | 1 | 1 |
The Group has operational leases to a small extent for cars and other technical equipment. All agreements are subject to normal market terms.
| Group | Parent company | |||
|---|---|---|---|---|
| 2007 | 2006 | 2007 | 2006 | |
| Opening acquisition cost | 1,204 | 17 | 1,205 | 20 |
| Acquisition/share in profit/loss | 46 | 1,215 | 46 | 1,213 |
| Reclassifications | -2 | -28 | - | -28 |
| Redemption of shares paid in the | ||||
| form of shares in Klövern AB | -1,251 | - -1,251 |
- | |
| Closing acquisition cost | -3 | 1,204 | - | 1,205 |
| Book value | -3 | 1,204 | - | 1,205 |
| Name/Corporate Identity Number office | Registered | Capital share i % 1) |
Book value |
|
| Järla Sjö Exploatering AB 556615-3952 |
Stockholm | 33.3 | -2 | |
| Arenastaden Holding AB 556742-6761 |
Stockholm | 25.0 | 0 | |
| Ny Nationalarena i Solna AB 556702-8682 |
Stockholm | 20.0 | 0 | |
| Fastighetsbolaget Tullarken KB 916590-0243 |
Stockholm | 33.3 | -1 | |
| -3 |
1)Applies also to the share of votes for the total number of shares.
Joint venture refers to a company in which Fabege together with another party has a controlling influence.
| Capital | ||
|---|---|---|
| Owned by subsidiaries: | Registered office | share, %1) |
| Centralbadet HB | ||
| 916609-6017 | Stockholm | 50 |
| Värtan Fastigheter KB | ||
| 969601–0793 | Stockholm | 50 |
| Zeolit Exploaterings AB | ||
| 556604-9440 | Stockholm | 50 |
1) Applies also to the share of votes for the total number of shares.
Through companies Fabege owns properties that are run as joint ventures. In these companies Fabege controls its share of future earnings through its share of the assets and liabilities of the jointly owned company. This net asset value is best expressed if Fabege's share of the assets, liabilities, income and expenses are included in the consolidated financial statements item by item. In the consolidated financial statements proportionate consolidation (item by item) is therefore used for these joint ventures.
The following properties are owned as joint ventures Islandet 3 Stralsund 1 Paradiset 29
The following table shows the impact of these joint ventures on the Fabege Group.
| Group | ||
|---|---|---|
| 2007 | 2006 | |
| Profit and loss account | ||
| Rental income | 11 | 58 |
| Net operating income | 7 | 42 |
| Profit for the year | 3 | 31 |
| Balance sheet | ||
| Fixed assets | 249 | 228 |
| Current assets | 15 | 1 |
| Total assets | 264 | 229 |
| Equity | 254 | 225 |
| Other liabilities | 10 | 4 |
| Total equity and liabilities | 264 | 229 |
| Average no. of employees | - | - |
| Group | Parent company | |||
|---|---|---|---|---|
| 2007 | 2006 | 2007 | 2006 | |
| Opening acquisition cost | 98 | 22 | 65 | 22 |
| Acquisitions | 42 | 33 | 20 | - |
| Changes in value | -13 | 15 | -13 | 15 |
| Reclassifications | - | 28 | - | 28 |
| Sales | -51 | - | - | - |
| Closing acquisition cost | 76 | 98 | 72 | 65 |
| Book value | 76 | 98 | 72 | 65 |
| Shareholding | Book value |
|---|---|
| Parent company | |
| Diös Fastigheter AB – Fabege's capital share | |
| is 2.9% and the number of shares 979,800 | 30 |
| Svelands Sakförsäkring AB – Fabege's capital share | |
| is 15.8% and the number of shares 26,500 | 28 |
| AIK Fotboll AB – Fabege's capital share is 18.5% | |
| and the number of shares 1,554,865 | 14 |
| Subsidiaries | |
| Arenabolaget i Solna AB – Fabege's capital | |
| share is 16.7% and the number of shares 167 | 0 |
| Swedish Arena Management AB – Fabege's capital | |
| share is 16.7% and the number of shares 167 | 0 |
| Interests in BRF Ädelmannen Större 11 | 4 |
| 76 |
| Group | Parent company | |||
|---|---|---|---|---|
| 2007 | 2006 | 2007 | 2006 | |
| Maturity: | ||||
| 1-5 years from balance sheet date | 301 | 398 | 58 | 46 |
| later than 5 years from | ||||
| balance sheet date | - | 181 | - | 51 |
| Total | 301 | 579 | 58 | 97 |
Other long-term receivables refers to promissory note receivables arising from the sale of properties. No impairment charge has been recognised.
| Total | 54 |
|---|---|
| Of which reserved (excluding VAT) | -18 |
| >90 days | 20 |
| 61–90 days | 3 |
| 31–60 days | 1 |
| 0–30 days | 48 |
| Age structure of trade debtors | 2007 |
| Koncernen |
In the consolidated financial statements the item includes sales proceeds of SEK 130 million for properties that have been sold but not yet vacated and promissory notes maturing within one year of SEK 164 million (75). No impairment charge has been recognised.
| Accumulated translation differences in the Group are SEK -23 million. | ||||
|---|---|---|---|---|
| Outstanding | Registered | |||
| shares | shares | |||
| No. of shares at beginning of year | 95,158,282 | 100,599,382 | ||
| New shares, conversion | ||||
| of convertible bonds | 25,763 | 25,763 | ||
| Redemption offer Klövern AB (publ) | -5,948,205 | -5,948,205 | ||
| Withdrawal of repurchased shares | - | -5 441 100 | ||
| 2:1 split | 89,223,081 | 89,223,081 | ||
| Share buybacks | -7,635,622 | - | ||
| Total | 170,823,299 | 178,458,921 |
Full conversion of all outstanding convertible bonds would result in an increase of 1,069,864 shares.
All shares carry equal voting rights, one vote per share.
The quota value of a share is SEK 28.50.
Proposed dividend per share, SEK 4.00.
For other changes in shareholders' equity, see the consolidated and parent company statements of changes in equity.
| Group | Parent company | |||
|---|---|---|---|---|
| 2007 | 2006 | 2007 | 2006 | |
| Available credit limit | 120 | 130 | 120 | 120 |
| Unused share | -120 | -130 | -120 | -120 |
| Unused share | - | - | - | - |
| Group | Parent company | |||
|---|---|---|---|---|
| Interest-bearing liabilities | 2007 | 2006 | 2007 | 2006 |
| Maturity date up to 1 year from | ||||
| balance-sheet date | 3,678 | 4,914 | 3,678 | 4,914 |
| Maturity date 1-5 years from | ||||
| balance sheet date | 10,992 | 7,524 | 10,992 | 7,524 |
| Maturity date later than 5 years | ||||
| from balance sheet date | 2,540 | 2,540 | 2,540 | 2,540 |
| Total | 17,210 | 14,978 | 17,210 | 14,978 |
Non-interest-bearing liabilities are estimated to become due for payment within one year. For the interest rate maturity structure, see Note 3.
The loan has a nominal value of SEK 47 million and matures on 1 October 2009. The bonds can be converted up to 1 September 2009. The conversion price is SEK 41.80.
Full conversion would result in an increase of 1,069,864 shares.
The interest on the convertible bonds is 5.25 per cent, which was higher than the market interest rate at the time (1 Oct 2004). For this reason no equity component from the breakdown under IAS 32 has been reported. Fabege's average interest rate at the same point in time was 4.35 per cent.
| Group | Parent Company | |||
|---|---|---|---|---|
| 2007 | 2006 | 2007 | 2006 | |
| Short-term excess value | 6 | - | 6 | - |
| Long-term excess value | 10 | 4 | 10 | 4 |
| Total excess value | 16 | 4 | 16 | 4 |
| Short-term deficit | - | - | - | - |
| Long-term deficit | 3 | 25 | 3 | 25 |
| Total deficit | 3 | 25 | 3 | 25 |
| Total | 13 | -21 | 13 | -21 |
Changes in value for the year are SEK 37 million, of which SEK 3 million refers to realised changes in value.
The Group does not apply hedge accounting, see "Financial instruments" in Note 2 Accounting principles. Derivatives are classified as interest-bearing liabilities in the balance sheet and valued at fair value. Changes in value are recognised in the profit and loss account in a separate item, Changes in value, fixed income derivatives. As of 2006 IAS 39 has been applied also in the parent company.
| Group | Parent company | |||
|---|---|---|---|---|
| 2007 | 2006 | 2007 | 2006 | |
| Deferred tax has been calculated on the basis of: |
||||
| -Tax loss carry-forwards | -1,069 | -1,199 | -13 | -87 |
| -Difference between book and tax values in |
||||
| respect of properties | 1,656 | 1,495 | - | - |
| -Untaxed reserves/other | -7 | 60 | 5 | -2 |
| Net deferred tax liability | 580 | 356 | -8 | -89 |
Total valued loss carry-forwards in the Group, which have been taken into account in calculating deferred tax, are SEK 3.8 billion (4.3). See also Tax situation on page 40.
Out of total provisions of SEK 813 million (645), SEK 584 million (497) refers to obligations relating to rental guarantees for divested properties. Other amounts refers to stamp duty on properties that are payable upon the sale of properties, SEK 51 million (66), and a provision for tax in the subsidiary company Fastighets AB Tornet of SEK 96 million (previously classified as other liabilities).
| Rental | Provisions | |||
|---|---|---|---|---|
| guarantees | Other for pension | Total | ||
| As at 1 January 2007 | 497 | 66 | 82 | 645 |
| Reclassification | 306 | 96 | - | 402 |
| Provisions for the year | 9 | - | - | 9 |
| Used during the year | -228 | -15 | - | -243 |
| As at 31 December 2007 | 584 | 147 | 82 | 813 |
| The provisions comprise | ||||
| Long-term component | 416 | 147 | 82 | 645 |
| Short-term component | 168 | - | - | 168 |
| 584 | 147 | 82 | 813 |
The rental guarantees have remaining maturities of up to 6.5 years. The criteria for assessing the size of provisions are described in Note 4.
Obligations relating to defined contribution pension schemes are met through payments to the government agencies or companies that administer the schemes. A number of Fabege employees have defined benefit ITP occupational pension schemes which involve regular payments to Alecta. These are classified as defined benefit pension schemes involving several employers. As there is not sufficient information to report these as defined benefit schemes, they have been reported as defined contribution schemes. It is unclear how a surplus or deficit in the plan would affect the size of future fees for each individual company and for the plan as a whole. Alecta is a mutual insurance company that is governed by the Swedish Insurance Business Act as well as by agreements concluded between employers and unions.
The year's fees for pension insurance policies provided by Alecta are approximately SEK 8 million (14). Alecta's surplus can be distributed to the policy owners and/or insured parties. At year-end 2007 Alecta's surplus in the form of the capitalisation ratio was 152.0 per cent (143.1%). Capitalisation ratio is defined as the market value of Alecta's assets as a percentage of insurance obligations calculated in accordance with Alecta's actuarial assumptions, which do not comply with IAS 19.
Fabege has a PRI liability, which is a defined benefit pension scheme. However, no new payments are made to PRI. Defined benefit pension obligations recognised in the balance sheet comprise the present value of defined benefit pension obligations. Any actuarial gains/losses are recognised in the profit and loss account in the periods to which they refer.
The parent company's pension provision refers to a PRI liability. During the year a PRI liability from another Group company was transferred to the parent company.
The item consists primarily of acquisition payments of SEK 975 million (449) for properties that have been purchased but not yet accessed.
| Group | Parent company | |||
|---|---|---|---|---|
| 2007 | 2006 | 2007 | 2006 | |
| Advance payment of rents | 304 | 481 | - | - |
| Accrued interest expenses | 114 | 122 | 114 | 122 |
| Other | 216 | 308 | 27 | 26 |
| Total | 634 | 911 | 141 | 148 |
| Group | Parent company | |||||
|---|---|---|---|---|---|---|
| Commitments | 2007 | 2006 | 2007 | 2006 | ||
| Property mortgages | 14,249 | 14,261 | - | - | ||
| Shares in subsidiaries | 1,357 | 810 | - | - | ||
| Frozen assets | - | 1 | - | - | ||
| Promissory notes | - | - | 12,696 | 13,704 | ||
| Total | 15,606 | 15,072 | 12,696 | 13,704 | ||
| Contingent liabilities | ||||||
| Ongoing tax case | 1,415 | 977 | - | - | ||
| Other | 320 | 152 | 102 | 150 | ||
Fabege AB has pension commitments of SEK 44 million (45), which are secured through a pension fund. The capitalisation ratio of the pension fund is 126.2 per cent. No provision has been made, as the pension commitment is fully covered by the assets of the fund.
As regards ongoing tax cases, see the section entitled Tax situation on pages 40–41 and the Directors' Report on pages 47-48.
Interest paid during the year in the Group was SEK 658 million (689), of which SEK 8 million (6) has been capitalised in the investment business. No capitalisation of interest has been made in the parent company.
| Group | Parent company | |||||
|---|---|---|---|---|---|---|
| 2007 | 2006 | 2007 | 2006 | |||
| Change acc. to balance sheet | 483 | 2,703 | 14 | 419 | ||
| Operating capital in | ||||||
| acquired Group company | - | 505 | - | - | ||
| Change in assets and liabilities | ||||||
| in respect of interest income, | ||||||
| dividends and interest expenses | 8 | -11 | 8 | -13 | ||
| Total | 491 | 3,197 | 22 | 406 |
The 2006 acquisition refers to Fastighets AB Tornet and has been classified as a business combination. Other acquisitions in 2006 and 2007 refers to asset acquisitions and are therefore not specified in the following.
| Carrying amount, | Fair value, | Fair value | |
|---|---|---|---|
| Specification | acquired company adjustment | in the Group | |
| Investment properties | 8,465 | 565 | 9,030 |
| Other fixed assets | 137 | - | 137 |
| Current assets | 1,345 | -54 | 1,291 |
| Cash and cash equivalents | 587 | - | 587 |
| Deferred tax liabilities | -120 | -63 | -183 |
| Interest-bearing liabilities | |||
| (incl. derivatives) | -6,529 | - | -6,529 |
| Non-interest-bearing liabilities | -551 | - | -551 |
| Acquired net assets Consideration paid |
3,334 | 448 | 3,782 |
| incl. acquisition expenses 1) | 3,123 | ||
| Less cash and cash equivalents | |||
| in acquired company | -587 | ||
| Effect on consolidated cash | |||
| and cash equivalents | 2,536 |
1) In addition to the cash consideration, 4,381,376 new Fabege shares were issued through a private placement (share swap).
The contribution of Fastighets AB Tornet to the consolidated profit after tax in 2006 was SEK 630 million. As a large share of the profit referred to property sales and changes in value, it was not meaningful to prepare pro forma accounts for the full year 2006.
Cash and cash equivalents comprise cash assets and bank balances. The Group has unused overdraft facilities, which are not included in cash and cash equivalents, of SEK 120 million (130).
Erik Paulsson and his family and company have a controlling influence in Peab AB. In 2007 Fabege received income from lettings activities of SEK 22 million (22) from the Peab Group. Fabege has paid compensation of SEK 234 million (261) to the Peab Group for contract work.
In 2007 Fabege sold 4 apartments in BRF Bacchus 3 as well as BRF Ädelmannen Större 11 for a total price of SEK 23 million.
In 2007 Fabege earned income of SEK 0.5 million (1.0) from joint ventures. No significant transactions were made with associated companies.
The transactions are deemed to have been made on market terms.
The dividends that were adopted at Annual General Meetings and paid out in 2007 and 2006 were SEK 4.00 per share and SEK 3.75 per share, respectively. At the AGM on 3 April 2008 the Board will propose a dividend for 2007 of SEK 4.00 per share, resulting in a total dividend payment of SEK 677,232,992. The dividend amount is based on the total number of outstanding shares as at 29 February 2008, i.e. 169,308,248 shares. The total dividend amount is subject to alteration up to and including the record date, depending on share buybacks and conversions of convertible bonds.
The annual report was adopted by the Board of Directors and approved for publication on 6 March 2008.
The parent company's income consists primarily of inter-company invoicing.
| Parent company | ||
|---|---|---|
| 2007 | 2006 | |
| Employee expenses | -46 | -48 |
| Administration and operations expenses | -149 | -190 |
| Depreciation of equipment | -1 | -1 |
| Total | -196 | -239 |
| Parent company | ||
|---|---|---|
| 2007 | 2006 | |
| Share in the profits of trading and limited partnerships | 5 | 5 |
| Anticipated dividends on shares and interests | 1,300 | 2,020 |
| Summa | 1,305 | 2,025 |
| Parent company | ||
|---|---|---|
| 2007 | 2006 | |
| Opening acquisition cost | 2 | 2 |
| Closing accrued acquisition costs | 2 | 2 |
| Opening depreciation | 0 | 0 |
| Closing accumulated depreciation | 0 | 0 |
| Book value | 2 | 2 |
| of which buildings | 2 | 2 |
| of which land improvements | - | - |
| of which land | - | - |
| Assessed value of Swedish properties | 0 | 0 |
| Acquisitions | 24 | 3,849 |
|---|---|---|
| Closing accrued acquisition costs | 15,162 | 15,138 |
| Opening depreciation | -46 | -46 |
| Closing accumulated depreciation | -46 | -46 |
| Book value | 15,116 | 15,092 |
| Directly owned subsidiariesRegistered Name/Org.no. |
office | Capital share, %1) |
Book value |
|---|---|---|---|
| Hilab Holding Stockholm AB 556670-7120 |
Stockholm | 100.0 | 11,114 |
| LRT Holding Company AB 556647-7294 |
Stockholm | 100.0 | 3,126 |
| Fastighets AB Tornet 556256-1208 |
Stockholm | 100.0 | 747 |
| Invys Fastigheter KB 916539-9057 |
Malmö | 100.0 | 30 |
| KB Arholma 1 969621–7406 |
Stockholm | 100.0 | 3 |
| KB Järnet 969627-5677 |
Kristianstad | 100.0 | 5 |
| KB Kamelen 4 969604-8207 |
Malmö | 100.0 | 15 |
| KB Olga 1 969604-8215 |
Malmö | 100.0 | 38 |
| KB Tjudret i Malmö 969634-4333 |
Stockholm | 100.0 | 38 |
| 15,116 |
1) Applies also to the share of votes for the total number of shares.
The stated capital share includes shares from other Group companies. The Group comprises 337 (362) companies.
TThe following fees have been paid to the company's auditors: Fees and expenses, SEK '000
| Group | Parent company | |||||
|---|---|---|---|---|---|---|
| 2007 | 2006 | 2007 | 2006 | |||
| Deloitte | ||||||
| audit assignments1) | 4,040 | 4,295 | 4,040 | 4,295 | ||
| other assignments | 2,021 | 1,862 | 2,021 | 1,862 | ||
| Öhrlings PricewaterhouseCoopers | ||||||
| audit assignments1) | - | 708 | - | - | ||
| other assignments | - | - | - | - |
1) Audit assignments refers to the examination of the annual report and accounting records and of the Board of Directors' and CEO's management of the company, other tasks incumbent upon the company's auditor as well as advice and other assistance occasioned by observations made in the course of such examinations or the carrying-out of such other tasks.
After the end of the year, during the period up to 29 February 2008, a further 1,515,051 shares have been bought back at a price of SEK 63.73 per share. The company's total shareholding as at 29 February 2008 was 9,150,673 shares, or 5.13 per cent of the total number of registered shares.
The Board of Directors and CEO hereby certify that:
The Board of Directors and Chief Executive Officer furthermore certify that:
Stockholm, March 6, 2008
Erik Paulsson chairman
Sven-Åke Johansson Göte Dahlin Märtha Josefsson Deputy Chairman
Helen Olausson Svante Paulsson Mats Qviberg
Christian Hermelin Chief Executive Officer
We submitted our audit report on March 6, 2008 Deloitte AB
Svante Forsberg Authorised Public Accountant
To the annual meeting of the shareholders of Fabege AB (publ) Corporate Identity Number 556049-1523
We have audited the annual accounts, the consolidated accounts, the accounting records, and the administration of the board of directors and the managing director of Fabege AB for the financial year 2007. The annual accounts of the Company are included in the printed version of this document on pages 43–72. These accounts and the administration of the Company and the application of the Annual Accounts Act when preparing the annual accounts and the consolidated accounts, as well as the application of IFRS as adopted by the EU when preparing the consolidated accounts, are the responsibility of the board of directors and the managing director. Our responsibility is to express an opinion on the annual accounts, the consolidated accounts and the administration based on our audit.
We conducted our audit in accordance with generally accepted auditing standards in Sweden. Those standards require that we plan and perform the audit to obtain reasonable assurance that the annual accounts and the consolidated accounts are free from material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the accounts. An audit also includes assessing the accounting principles used and their application by the board of directors and the managing director and significant estimates made by the board of directors and the managing director when preparing the annual accounts and consolidated accounts as well as evaluating the overall presentation of information in the annual accounts and the consolidated accounts. As a basis for our opinion concerning discharge from liability, we examined significant decisions, actions taken and circumstances of the Company in order to be able to determine the liability, if any, to the Company of any board member or the managing director. We also examined whether any board member or the managing director has, in any other way, acted in contravention of the Companies act, the Annual Accounts Act or the Articles of Association. We believe that our audit provides a reasonable basis for our opinion set out below.
The annual accounts and the consolidated account have been prepared in accordance with the Annual Accounts Act and give a true and fair view of the Company's financial position and results of operations in accordance with generally accepted accounting principles in Sweden. The consolidated accounts have been performed in accordance with the international auditing standards IFRS as adopted by the European Union and the Annual Accounts Act and give a true and fair view of the Group's financial position and results of operations. The statutory administration report is consistent with the other parts of the annual accounts and the consolidated accounts.
We recommend to the annual meeting of shareholders that the income statements and balance sheets of the Parent Company and the Group be adopted, that the profit of the Parent Company be dealt with in accordance with the proposal in the administration report and that the members of the board of directors and the managing director be discharged from liability for the financial year.
Stockholm, March 6, 2008 Deloitte AB
Svante Forsberg Authorised Public Accountant
Fabege is a Swedish public limited-liability company with registered office in Stockholm. The company's corporate governance is based on theArticles ofAssociation, the Swedish Companies Act and other applicable laws and regulations. Fabege applies the Swedish Corporate Governance Code (the Code), whose main purpose is to contribute to improved governance of Swedish businesses. The Code is based on the principle of 'comply or explain'. The reasons for Fabege's departures from the Code are explained in greater detail below. This Corporate Governance Report does not form part of the formal annual report documents, but constitutes a separate report. Nor has it been examinted by the company's auditors.
Responsibility for the governance, management and control of Fabege's business is divided among the shareholders at the Annual General Meeting, the Board of Directors and the Chief Executive Officer. Fabege also works to achieve a more efficient and appropriate governance of the company.
The Annual General Meeting is the company's highest decision-making body. In Fabege all shares carry the same voting rights at the AGM, which means that opportunities to exercise influence as an owner agree with each shareholder's capital share in the company. Fabege's ownership structure is described on page 20.
Fabege's Articles of Association state that the company shall acquire, manage, add value to and divest properties. The Board of Directors has its registered office in Stockholm. In other respects, the Articles of Association contain provisions on the number of shares, on the number of Directors and auditors and on the Annual General Meeting. The full text of the Articles of Association is found on page 86.
The Annual General Meeting was held in Stockholm on 27 March 2007. Mats Qviberg
was elected to chair the meeting. TheAGM was attended by shareholders holding a total of 34.2 million shares, corresponding to 36 per cent of the number of votes represented. A full set of minutes from the AGM is available on Fabege's website, www.fabege.se. The following are some of the main resolutions adopted at the AGM:
It was decided that the Board consist of eight Directors and that the Directors Mats Qviberg, Göte Dahlin, Sven-Åke Johansson, Märtha Josefsson and Erik Paulsson be reelected and that Christian Hermelin, Helen Olausson and Svante Paulsson be appointed as new Directors. Erik Paulsson was elected Chairman of the Board.
The dividend was fixed at SEK 4.00 (after implementation of the share split) and the record date was set at 30 March 2007.
The shareholders adopted a resolution on the withdrawal of shares and reimbursement of the shareholders through a redemption procedure in which shareholders were offered to redeem every 16th share in Fabege for 8 shares in Klövern AB (publ) and on a bonus issue aimed at restoring the share capital. The AGM also voted to approve the withdrawal of 5,441,100 company-owned shares and a subsequent bonus issue aimed at restoring the share capital.
The AGM resolved to amend the company's Articles of Association in respect of the maximum number of shares and to effect a 2:1 split of the company's shares.
The AGM decided to authorise the Board, for a period ending no later than the next AGM, to acquire shares. Share buybacks are subject to a limit of no more than 10 per cent of the total number of outstanding shares at any time.
The AGM adopted a resolution to offer shareholders the opportunity to buy or sell, free of commission, the number of shares required to achieve a shareholding consisting of round lots.
The AGM adopted a set of principles for the appointment of the Nomination Committee and passed a resolution on the proposals that the Nomination Committee is required to prepare. The Nomination Committee will consist of representatives for the four largest owners.
The Nomination Committee is the AGM's body for preparing decisions relating to appointments. The Committee's task is to draw up proposals forAGM chairman, Board Chairman, the Board of Directors, Directors' fees, auditors, auditors' fees and any changes to the principles governing the election of the Nomination Committee. The proposal for Directors'must specify a breakdown between the Board Chairman, Directors and committee work.
On 3 October 2007 a Nomination Committee was announced consisting of representatives for the four largest owners, in accordance with the resolution adopted at the 2007 AGM. As a result of changes in ownership, the Nomination Committee now consists of the following members: Peter Lindh (representing Maths O Sundqvist), Anders Silverbåge (Brinova Fastigheter AB), Per Ovrén (Investment AB Öresund) and Carl Rosén (Second AP Fund). Anders Silverbåge is chairman of the Nomination Committee. The four owner representatives represent about 32 per cent of the votes in Fabege.
The Nomination Committee has held three minuted meetings and has remained in contact during the intervening periods. As a basis for its work, the Committee has met the Board Chairman and listened to the CEO's views on the work of the Board. The Committee has also contacted the other Directors as well as the company's auditors to obtain a clear idea of the work of the Board. It has also studied the company's strategy, risk management and control functions. In addition, the chairman of the Nomination Committee has obtained information about the work of the Audit Committee through interviews with its chairman.
The Nomination Committee has discussed the size and composition of the Board of Directors in respect of industry experience, expertise, and the need for continuity and renewal of the work of the Board. The Committee has also discussed and taken into account the issue of the Directors' independence (see below for a description of the Board).
The Nomination Committee's report on how it has conducted its work and its proposals for the 2008 AGM are available on the company's website. The proposals of the Nomination Committee are also described in the notice of AGM.
Under the Companies Act, the Board of Directors is responsible for the company's organisation and the administration of the company's affairs. The Board is required to continuously assess the financial situation of the company and Group. Its main task is to manage the company's business on behalf of the owners in a way that secures the owners' interest in a strong long-term return on capital.
In 2007 the Board consisted of eight Directors elected at the 2007 AGM. The 2007 AGM also elected Erik Paulsson as Chairman of the Board. Sven-Åke Johansson was appointed Deputy Chairman at the constituent Board meeting. Fabege's Chief Financial Officer Åsa Begström (who replaced Roger Johansson on 1 December 2007) is the Board's secretary.
Fabege's Board of Directors includes members that have skills and experience that are of great significance for the support, monitoring and control of the operations of a leading property company in Sweden. There are members with knowledge of property, the property market, financing and business development. At the end of the year an assessment was made of the Board, which showed that the Board was operating in a highly satisfactory manner. Together, the members of the Board have, directly or indirectly, significant investments in Fabege shares.
Fabege's Board meets the requirements on independent Directors contained in the Code and in the Listing Agreement of the Stockholm Stock Exchange. The Nomination Committee proposes that all Directors be re-elected. Out of the proposed Directors, Erik Paulsson is to be regarded as dependent both in relation to the company and in relation to major shareholders, Helen Olausson and Svante Paulsson as dependent in relation to major owners and the CEO Christian Hermelin as dependent in relation to the company. The other proposed Directors are, according to the definitions contained in the Code and the Listing Agreement, independent in relation to both the company and major shareholders.
In 2007 the Board held six ordinary meetings and a total of ten meetings, including one constituent meeting and three telephone meetings. During the year the Board made decisions on several major transactions and investments in the existing property portfolio. In 2007 the Group acquired properties for a total of SEK 4.0 billion and sold properties for a total of SEK 2.9 billion. Decisions were made on project investments of approximately SEK 2.4 billion relating to the development and improvement of properties in the company's existing portfolio. The Board also reviewed the company's business concept, goals, strategies, budget and interim reporting.
Information about the Directors' attendance at the meetings is provided in the table below. The table also shows which Directors are members of theAudit Committee. The Directors are paid Directors' fees in accordance with the decisions of the Annual General Meeting. For 2007 total fees of SEK 2,405,000 were paid, of which the Chairman received SEK 365,000 plus extra compensation of SEK 835,000 for project work. Other Directors except the CEO received SEK 180,000 and SEK 100,000 for work in the Board's Audit Committee, of which the chairman received SEK 50,000 and the other members SEK 25,000.
During the period 10 Board meetings and four Audit Committee meetings were held.
| Board | Audit Committee | |
|---|---|---|
| Erik Paulsson, Chairman | 10 | 1) |
| Sven-Åke Johansson, Deputy Chairman | 10 | 4 |
| Göte Dahlin, Director | 10 | 4 |
| Christian Hermelin, Director | 10 | 1) |
| Märtha Josefsson, Director | 10 | 4 |
| Helen Olausson, Director from 27 March 2007 | 7 | 1) |
| Svante Paulsson, Director from 27 March 2007 | 7 | 1) |
| Mats Qviberg, Director | 10 | 1) |
| Stefan Dahlbo, Director up to 27 March 2007 | 3 | 1) |
| Maths O Sundqvist, Director up to 27 March 2007 | 3 | 1) |
1) Not a member of the Audit Committee, therefore no attendance is registered.
Each year, the Board of Directors of Fabege adopts a set of rules of procedure, including instructions on division of labour and reporting, to supplement the provisions of the Companies Act, Fabege's Articles of Association and the Swedish Corporate Governance Code.
In addition to the general provisions of the Swedish Companies Act, the Rules of Procedure, among other things, govern the following:
The items that should normally be included in the agenda are financial and operational reporting, decisions on acquisitions, sales and investments in existing properties, current market issues, staff issues and reporting by the Audit Committee. At the November/December meeting the Board reviews goals and strategies and discusses the budget. Other agenda items, such as assessments of the Board and Chief Executive Officer as well as compensation issues, are included as fixed agenda items in the annual plans.
The Board of Directors has appointed an Audit Committee from among its own members. The Audit Committee consists of Sven-Åke Johansson (chairman), Göte Dahlin and Märtha Josefsson and serves as an extension of the Board for closer examination of the company's accounting/reporting, governance and control, risk management and the performance of audits.
The Committee has a separate set of rules of procedure, which is reviewed annually and approved by the Board. Fabege's Audit Committee meets the Code's requirements on composition and its members possess skills and experience on accounting issues and other issues within the Committee's area of responsibility.
In 2007 four meetings were held. The minutes were handed to all Directors and the chairman of the Committee submitted a report to the Board of Directors.
During the year a lot of emphasis continued to be placed on the company's internal control system. Issues that were discussed included the process for new lettings and renegotiation, the purchasing process, the valuation process and the acquisition and
Erik Paulsson Born: 1942. Chairman of the Board since 2007 and Director since 1998. Other assignments: Chairman of SkiStar AB, Wihlborgs Fastigheter AB and Diös Fastigheter AB. Director of Nolato AB and Investment AB Öresund. Education: Secondary school. Company executive since 1959. Shareholding: 60,100 and via Brinova.
Dependent in relation to the company and major shareholders under the Swedish Corporate Governance Code and the Listing Agreement with the Stockholm Stock Exchange.
Sven-Åke Johansson Born: 1939. Deputy Chairman. Deputy Chairman since 2001. Director since 2000. Other assignments: Chairman of Stiftelsen Industrifonden and Nordisk Renting AB. Education: Doctor of Engineering and M.Sc. in Economics and Business. Shareholding: 20,800.
Independent under the Swedish Corporate Governance Code and the Listing Agreement of the Stockholm Stock Exchange in relation to both the company and major shareholders.
Göte Dahlin Born: 1941. Director since 2000. Other assignments: Chairman of Veidekke ASA and Deputy Chairman of Nordisk Renting AB. Director of Rezidor Group AB and Svensk Inredning Viking AB.
Education: B.Sc. in Natural Sciences. Shareholding: 15,000.
Independent under the Swedish Corporate Governance Code and the Listing Agreement of the Stockholm Stock Exchange in relation to both the company and major shareholders.
Märtha Josefsson Born: 1947. Director since 2005. Other assignments: Chairman of Lärarfonder AB, Director of Second AP Fund, Anoto Group AB, Luxonen S.A., Skandia Fonder AB, AB Upsala Nya Tidning and Telelogic AB. Education: B.Sc. in Economics. Shareholding: 8,560.
Independent under the Swedish Corporate Governance Code and the Listing Agreement of the Stockholm Stock Exchange in relation to both the company and major shareholders.
Helen Olausson Born: 1968. Director since 2007. Chief Executive Officer of Landmärke Norra Europa AB. Other assignments: Chairman of Fältjägaren Fastigheter AB, Fabös and Norrvidden Fastigheter AB. Director of the National Land Survey of Sweden and Wihlborgs Fastigheter AB. Education: M.Sc. in Engineering, MBA Stockholm School of Economics. Shareholding: 0.
Dependent in relation to major shareholders under the Swedish Corporate Governance Code and the Listing Agreement with the Stockholm Stock Exchange. Independent in relation to the company.
Svante Paulsson Born: 1972. Director since 2007. Chief Executive Officer of Backahill AB. Other assignments: Director of Brinova Fastigheter AB, Peab AB, Platzer Fastigheter and ÄNAB Ängelholms Näringsliv AB. Education: High school in USA. Shareholding: 143,438
Dependent in relation to major shareholders under the Swedish Corporate Governance Code and the Listing Agreement with the Stockholm Stock Exchange. Independent in relation to the company.
Mats Qviberg Born: 1953. Director since 2001. Other assignments: Chairman of HQ AB and Bilia AB, Deputy Chairman of Investment AB Öresund and Director of SkiStar AB. Education: M.Sc. in Economics and Business. Shareholding: 2,358,786.
Independent under the Swedish Corporate Governance Code and the Listing Agreement of the Stockholm Stock Exchange in relation to both the company and major shareholders.
Christian Hermelin Born: 1964. Director since 2007. Chief Executive Officer of Fabege AB. Employed since: 1998, in current position since 2007. Education: B.Sc. in Business Administration Shareholding: 51,400. Dependent in relation to the company under the Swedish Corporate Governance Code and the Listing Agreement with the Stockholm Stock Exchange. Independent in relation to major shareholders.
Dependent in relation to the company under the Swedish Corporate Governance Code and the Listing Agreement with the Stockholm Stock Exchange. Independent in relation to major shareholders.
sale process. The Committee also reviewed the company's insurance policies and current accounting and tax issues.
At the meetings the company's auditors submit reports on their audits during the year. The Committee's members also discussed risks in the business and accounting practices as well as the focus of audits.
In accordance with the principles of compensation and other employment terms for company management adopted by theAGM, the Board has adopted a decision on compensation and other terms of employment for the Chief Executive Officer.All members of the Board except the CEO perform the tasks incumbent on a remuneration committee and thus participate in the process of drafting and making decisions on compensation issues.
The compensation and other benefits and terms of employment for the CEO and company management are described in Note 5 on page 64. The principles of compensation and terms of employment will also be presented at the 2008 AGM.
The Chief Executive Officer is responsible for operational governance and for the dayto-day management and leadership of the business, in accordance with the guidelines, instructions and decisions adopted by the Board of Directors.
In addition to the general provisions relating to division of responsibility contained in the Swedish Companies Act, the instructions for the CEO specify:
The rules of procedure also contain a separate reporting instruction, which governs the content and timing of reporting to the Board.
In 2007 Group management consisted of six persons in addition to the CEO (for current Group management, see page 81):
Christian Hermelin Born: 1964. Chief Executive Officer. Employed since: 1998, in current position since 2007. Previous employment: Project Manager at Fastighets AB Storheden. Education: B.Sc. Shareholding: 51,400.
Åsa Bergström Born: 1964. Chief Financial Officer. Employed since: 2007. Previous employment: Senior Manager at KPMG, CFO positions in the property companies Granit & Beton Fastighetsrenting AB and Oskarsborg AB. Education: M.Sc. in Economics and Business. Shareholding: 20,000.
Urban Sjölund Born: 1962. Director of Properties. Employed since: 1991, in current position since 2007. Previous employment: Construction and Project Manager at JCC AB, Arsenalen AB and MacGruppen AB. Property Manager at BPA Fastigheter AB, and various executive positions in Bergaliden AB, Storheden AB, Wihlborgs Fastigheter AB and Fabege AB. Education: M.Sc. in Engineering.
Per Tyrén Born: 1960. Director of Properties. Employed since: 1992, in current position since 2007. Previous employment: Property Analyst at the Stockholm Property Owners Association, Director of Properties at Fastighets AB Stadsgården, Area Manager at Fabege. Education: M.Sc. in Engineering. Shareholding: 20,000.
Jens Lackmann Born: 1960. Director of Projects & Development. Employed since: 2007. Previous employment:Regional Director at Bygganalys AB, Project Manager at Platzer Bygg AB, own business (Byggekonomen AB), Regional Director at Peab AB. Education: Engineer. Shareholding: 22,000.
Johan Rudberg Born: 1961. Director of Business Development Employed since: 2004, previously Director of Project Development. Previous employment: Director of Project Development at Drott, Stockholm Director at Centralkonsult, Works Manager at Reinhold Bygg AB. Education: M.Sc. in Engineering. Shareholding: 20,450.
Shareholding: 21,668.
Mats Berg Born: 1958. Director of Communications and Investor Relations. Employed since: 2001 in current position. Previous employment: Director of Marketing Communications in AssiDomän AB, Director of Communications in AssiDomän Packaging, Director of Communications in IBM Svenska AB and IBM Healthcare EMEA and various executive communications positions in Ericsson, Telia and Nynäs Petroleum. Education: B.Sc., DIHR. Shareholding: 20,000.
Group management meetings are normally held every two weeks. During the meetings management addresses strategic and operational issues such as property transactions, lettings, market trends, organisational issues and monthly and quarterly business reviews.
Internal control is the process that is run by the Board of Directors, company management and other staff for the purpose of building confidence that the company
This report has been prepared in accordance with the Swedish Corporate Governance Code (Sections 3.7.2 and 3.7.3). The report, which is limited to internal control in respect of financial reporting, does not constitute a part of the formal annual report and has not been examined by the company's auditors.
In its work the company uses the established COSO framework (Internal Control – Integrated Framework).
Fabege has a geographically well contained organisation and a homogenous operating business, but its legal structure is complex. The business is capital-intensive and is characterised by large monetary flows, including rental income, expenses for project activities, acquisitions/sales of properties and financial expenses.
Overall responsibility for ensuring good internal control and efficient risk management rests with the Board of Directors. To be able to perform its work in an appropriate and efficient manner, the Board has adopted a set of rules of procedure. The rules of procedure contain guidelines for the work of the Board and its committees, the tasks of the Chief Executive Officer and financial reporting. The rules of procedure are updated annually.
In 2007 the Board conducted its annual review and defined the rules of procedure for the Board, the rules of procedure for theAudit Committee and a set of ethical guidelines for the company's conduct. The company's financial reporting is governed by policies and guidelines. The company has existing policies for issues such as the environment, equal opportunities and information, accounting principles and instructions for year-end financial statements, and payment authorisation instructions, which are reviewed and updated continuously.
Risks and critical processes, functions and areas are defined on the basis of the control environment, significant results and balance sheet items as well as significant business processes. Examples of processes, functions and areas that have been defined as critical for Fabege include the processes for the acquisition, sale and valuation of properties, the project process, the finance function, taxes and the year-end accounting and reporting process. Fabege conducts annual reviews and evaluations of risk areas for the purpose of identifying and managing risks through consultation between management, the Audit Committee, the company's auditors and other parties.
The Board's rules of procedure are aimed at ensuring a clear division of responsibility between the Board of Directors (and its committees) and the Chief Executive Officer (and his management group) with a view to achieving efficient risk management in the company's business operations as well as its financial reporting.
Company management is responsible for designing and documenting and for maintaining and testing the systems/processes and the internal controls that are required to manage significant risks in the accounts and the company's business operations.
Critical processes, functions and areas are described and documented in respect of division of responsibility, risks and controls. The necessary instructions, procedures and manuals are produced, updated and communicated to the relevant staff to ensure that they have up-to-date knowledge and adequate tools. The measures are aimed at integrating risk management in the company's daily procedures. Compliance with policies, guidelines and instructions is monitored on an ongoing basis. Employees are given frequent training in how to secure the required expertise.
The operating units, Property Management and Projects & Development, have a separate controller function which supplements the central controller function at Group level. Operating reports are prepared monthly and quarterly based on a standardised reporting package. Executives with responsibility for the operating business comment on/approve the reports.
A central function prepares consolidated financial statements and other financial reports in close collaboration with the controller function/operating units and the finance function. This work includes integrated control activities in the form of reconciliation with stand-alone systems/specifications of outcomes for income and expense items and balance sheet items.
Company management is responsible for informing the staff concerned about their responsibility to maintain good internal control. The company's Intranet and information meetings are used to ensure that employees are kept up-to-date on the company's governing policies and guidelines.
The communications department is responsible for external information. The company's IR work is conducted on the basis of principles for regular and accurate information in accordance with stock exchange regulations. The ambition is to create understanding and build confidence in the business among investors and other stakeholders.
In addition to financial reporting to the Board, more detailed reports are prepared, at more frequent intervals, in support of the company's internal governance and control. Monthly reports are presented and discussed at meetings of Group management.
The internal control system also needs to change over time. The aim is to ensure that this is monitored and addressed on an ongoing basis through management work at various levels of the company, both through monitoring of the individuals holding responsibility for each defined critical process, function and area and through annual evaluations of the internal control system.
The company's management reports regularly to the Board in accordance with the instructions for financial reporting, which are designed to ensure that the information provided is relevant, sufficient, up-to-date and appropriate.
The Audit Committee also reports to the Board. It constitutes an extension of the Board in the work of monitoring the formulation and reliability of financial reports. The Audit Committee has, in addition to examining the content of and methods used in preparing financial reports, studied the way in which the more detailed and frequent internal reporting is used for the evaluation and management of the various parts of the business. Such use also provides an indication of the quality of the control environment. The Audit Committee also performs regular reviews and evaluations of internal controls in respect of the company's critical processes.
The Audit Committee regularly studies the results of the external auditors' examination of the company's accounts and internal controls. The company's auditors examine the company's financial reporting relating to the full-year financial statements and review a quarterly report.
The Board regularly evaluates the information submitted by management and the Audit Committee. Of particular significance, when required, is the Audit Committee's task of monitoring management's work on developing the internal controls and of ensuring that measures are taken to address any problems and proposals that have been identified in the course of examinations by the Board, Audit Committee or auditors.
The Board of Directors has informed itself through its members and through the Audit Committee on risk areas, risk management, financial reporting and internal control and has discussed the risks of errors in financial reporting in consultation with the external auditors.
In the course of its examinations the Audit Committee has not found it necessary to draw the Board's attention to any significant issues or significant unaddressed risks in its financial reports.
In view of the homogenous and geographically limited nature of the business as well as the simple structure of the organisation, the Board has not found it necessary to set up an internal audit unit, based on the view that the monitoring and examination described above are sufficient to maintain, in accord with the external auditors, effective internal controls in respect of financial reporting.
Svante Forsberg Born: 1952 Chief auditor of Fabege since 2005. Authorised Public Accountant at Deloitte AB. Audit assignments in other major companies: Skandia Liv, Anticimex and Connecta.
Under the CompaniesAct, the company's auditor is required to examine the company's annual report and accounts as well as the management of the Board of Directors and Chief Executive Officer. After the end of each fiscal year, the auditor is required to submit an audit report the Annual General Meeting. Auditors are appointed and compensated in accordance with the resolutions adopted at the Annual General Meeting based on proposals from the Nomination Committee.
At the 2005AGM the auditing firm Deloitte was appointed as auditor with the authorised public accountant Svante Forsberg as chief auditor for the period up to the 2009 AGM.
In addition to Fabege, Svante Forsberg has audit assignment for the following major companies: Skandia Liv, Anticimex and Connecta. He has no other assignments for companies that are closely related to Fabege's major owners or the CEO. In the last four years Deloitte has also assisted Fabege in audit-related assignments relating primarily to prospectus and accounting issues.
The auditors reported their observations and simultaneously presented their views on the quality of internal controls in Fabege at the Board meeting in February 2008. The auditors have participated in and presented reports at all meetings with the Audit Committee (4 in 2007). During the year reports have also been presented to company management.
The fees paid to the company's auditors are presented in Note 45 on page 71.
The Code is based on the principle of 'comply or explain', which means that it is not always necessary to follow all rules and that departures from one or several individual rules do not constitute a breach of the Code if there are reasons for and explanations are provided for the departures.
• The entire Board of Directors has met the company's auditors, but not without the presence of the Chief Executive Officer or another person from company management. After consulting with the company's auditors, the Board has not found it necessary to arrange such a meeting, partly because the auditors have on several occasions presented reports to the Audit Committee without the presence of the CEO.
Stockholm, 6 March 2008 The Board of Directors
Articles of Association (proposal) for Fabege AB (publ), Corporate Identity Number: 556049-1523
b) on the treatment of the company's profit or loss in accordance with the adopted balance sheet,,
| 2007 | 2006 | 2005 | 2004 | 2004 | 2003 | |
|---|---|---|---|---|---|---|
| (IFRS) | (IFRS) | (IFRS) | (IFRS) | Swedish | Swedish | |
| Profit and loss account, SEKm | rules | rules | ||||
| Rental income | 2,066 | 2,343 | 2,778 | 2,169 | 2,169 | 1,994 |
| Net operating income | 1,312 | 1,401 | 1,716 | 1,299 | 1,312 | 1,195 |
| Gross profit | 1,312 | 1,401 | 1,716 | 1,299 | 1,107 | 1,030 |
| Realised changes in value/Gain from property sales | 446 | 61 | 859 | 128 | 384 | 740 |
| Unrealised changes in value, properties | 893 | 911 | 844 | 23 | - | |
| Impairment | - | - | - | - | - | -205 |
| Operating profit | 2,591 | 2,264 | 3,349 | 1,361 | 1,402 | 1,512 |
| Profit after financial items | 2,066 | 1,863 | 2,761 | 970 | 1,011 | 826 |
| Profit after tax | 1,812 | 2,266 | 2,666 | 1,384 | 1,413 | 718 |
| Balance sheet, SEKm | ||||||
| Investment properties | 30,829 | 27,188 | 21,296 | 36,379 | 36,389 | 16,580 |
| Other tangible fixed assets | 6 | 11 | 11 | 32 | 32 | 15 |
| Financial fixed assets | 374 | 1,889 | 330 | 830 | 830 | 2,305 |
| Current assets | 458 | 757 | 4,185 | 864 | 864 | 313 |
| Cash and cash equivalents | 75 | 164 | 71 | 298 | 298 | 1,139 |
| Equity | 11,415 | 12,177 | 10,727 | 11,330 | 11,120 | 6,389 |
| of which minority share of equity 4) | - | 21 | - | 224 | - | - |
| Minority interest | - | - | - | - | 217 | - |
| Provisions | 1,393 | 1,001 | 1,356 | 1,946 | 1,949 | 793 |
| Interest-bearing liabilities | 17,197 | 14,999 | 12,503 | 23,703 | 23,703 | 12,108 |
| Non-interest-bearing liabilities | 1,737 | 1,832 | 1,307 | 1,424 | 1,424 | 1,062 |
| Total assets | 31,755 | 30,009 | 25,893 | 38,403 | 38,413 | 20,352 |
| Key ratios 2) | ||||||
| Surplus ratio, % | 64 | 60 | 62 | 60 | 60 | 60 |
| Interest coverage ratio, times | 2.8 | 2.1 | 3.6 | 2.4 | 2.5 | 2.1 |
| Capital employed, SEKm | 28,625 | 27,176 | 23,230 | 35,033 | 35,040 | 18,497 |
| Equity/assets ratio, % | 35.9 | 40.5 | 41.4 | 29.5 | 29.5 | 31.4 |
| Debt/equity ratio, times | 1.5 | 1.2 | 1.2 | 2.1 | 2.1 | 1.9 |
| Leverage, properties, % | 55.8 | 55.2 | 58.7 | 65.1 | 65.1 | 73 |
| Return on equity, % | 15.4 | 19.8 | 24.2 | 17.4 | 17.3 | 11.4 |
| Return on capital employed, % | 9.9 | 9.0 | 12.7 | 7.1 | 7.3 | 8.1 |
| Average interest rate on interest-bearing liabilities, % | 4.28 | 3.72 | 3.65 | 3.91 | 3.91 | 5.31 |
| Property acquisitions and investments | ||||||
| in existing properties, SEKm | 4,984 | 17,045 | 3,741 | 22,042 | 22,042 | 1,766 |
| Property sales, selling price, SEKm | 2,919 | 12,064 | 13,771 | 2,728 | 2,728 | 5,487 |
| Average no. of employees | 146 | 194 | 173 | 182 | 182 | 152 |
| Data per share, SEK 2) | ||||||
| Earnings | 9.98 | 11.74 | 13.75 | 9.51 | 9.76 | 5.80 |
| Equity | 67 | 64 | 56 | 60 | 60 | 53 |
| Dividend 3) | 4.00 | 4.00 | 3.75 | 3.25 | 3.25 | 3.00 |
| Yield, % | 6.0 | 4.4 | 9.9 | 4.6 | 4.6 | 6.5 |
| Share price at year-end 5) | 66.25 | 91.75 | 75.75 | 70.00 | 70.00 | 46.25 |
| No. of shares at year-end before dilution, millions | 171 | 190 | 192 | 187 | 186 | 122 |
| Average no. of shares after dilution, millions | 182 | 192 | 193 | 139 | 138 | 124 |
1) 2004-2007 have been prepared and translated in accordance with IFRS. The year 2003 has not been translated in accordance with IFRS. To obtain continuity in the comparison, 2004 is reported in accordance with the rules applicable at the time.
2) Key figures based on the average number of shares, equity, capital employed and interest-bearing liabilities have been calculated based on weighted averages. For 2004-2007 dilution effects from outstanding convertible bonds have been taken into account in calculating per share data and ratios. For the years 2003-2006 the key figures have been translated to enable comparisons with key figures for 2007 due to the 2:1 split of the company's shares.
3) Cash dividend in accordance with the proposal.
4) Under IFRS, minority interests are recognised in equity. Under previous Swedish rules, equity did not include minority interests, which were instead reported separately as minority interest.
5) Last price paid.
For definitions, see page 88
Profit for the period/year divided by average shareholders' equity. In interim statements the return is converted to its annualised value without taking account of seasonal variations.
Profit before tax plus interest expenses, divided by average capital employed. In interim statements the return is converted to its annualised value without taking account of seasonal variations.
Interest-bearing liabilities divided by the book value of the properties at the end of the period.
Dividend for the year divided by the share price at year-end.
Parent company shareholders' share of equity according to the balance sheet divided by the number of shares at the end of the period.
Contract value divided by rental value at the end of the period.
Properties that are being actively managed on an ongoing basis.
Properties in which a conversion or extension is in progress or planned that has a significant impact on the property's net operating income. Net operating income is affected either directly by the project or by limitations on lettings prior to impending improvement work. Recently acquired properties (last twelve months) in which work is in progress that is aimed at significantly improving the property's net operating income compared with the time of acquisition.
Contract value plus estimated annual rent for vacant premises after a reasonable general renovation.
Profit before tax plus depreciation, plus/minus unrealised changes in value less current tax, divided by average number of shares.
Stated as an annual value. Index-adjusted basic rent under the rental agreement plus rent supplements.
Land and developable properties and properties in which a new build/complete redevelopment is in progress.
New lettings during the period less terminations to vacate.
Parent company shareholders' share of profit after tax for the period divided by average number of outstanding shares during the period.
Profit after financial items plus financial expenses and plus/minus unrealised changes in value, divided by financial expenses.
Interest-bearing liabilities divided by shareholders' equity.
Shareholders' equity (including minority share) divided by total assets.
Total assets less non-interest bearing liabilities and provisions.
Net operating income divided by rental income..
Mimer 5, on Hagagatan.
Inner city.
Apotekaren 22, on Kungstensgatan.
| Property name | Site/Land/Landhold | Residential, sqm | Industry/warehouse, sqm | Tax assessed value, | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Map number | Area | Address | Year built | Office, sqm | Retail, sqm | Hotel, sqm | Other, sqm | Garage, sqm | Total, sqm | SEK thousands |
| INNER CITY | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Adam & Eva 10 1) | Norrmalm | Drottningg 70 | 1929 | 0 | 1,871 | 508 | 0 | 26 | 0 | 0 | 2,405 | 93,000 | |
| 2 | Aeolus 1 1) | Gamla Stan | Skeppsbron 2 | 1600 | 0 | 6,421 | 306 | 0 | 35 | 0 | 0 | 6,762 | 167,000 | |
| 3 | Apotekaren 22 1) | Norrmalm | Döbelnsg 20, 24, Kungstensg 21–23 |
1902/2002 | 0 | 25,500 | 0 | 0 | 801 | 0 | 3,000 | 29,301 | 0 | |
| 4 | Barnhusväderkvarnen 36 1) Norrmalm | Rådmansg 61–65 | 1963 | 0 | 14,564 | 1,270 | 0 | 1,103 | 0 | 8,544 | 25,481 | 402,000 | ||
| 5 | Bocken 35 2) | Norrmalm | Lästmakarg 22–24 | 1951 | 0 | 6,184 | 0 | 0 | 572 | 0 | 0 | 6,756 | 160,000 | |
| 6 | Bocken 39 2) | Norrmalm | Lästmakarg 14, Kungsg 7–15 | 1931 | 1,182 | 17,131 | 1,746 | 0 | 1,591 | 0 | 0 | 21,650 | 681,400 | |
| 7 | Bocken 46 2) | Norrmalm | Regeringsgatan 56 | 1977 | 0 | 3,146 | 0 | 0 | 0 | 0 | 0 | 3,146 | 74,000 | |
| 8 | Bocken 47 1) | Norrmalm | Lästmakarg 8 | T 1929 | 0 | 361 | 665 | 0 | 0 | 0 | 0 | 1,026 | 31,600 | |
| 9 | Drabanten 3 1) | Kungsholmen | Kungsbroplan 3 ao | 1907 | 0 | 6,478 | 0 | 0 | 203 | 0 | 0 | 6,681 | 108,000 | |
| 10 | Duvan 6 1) | Norrmalm | Klara Södra Kyrkogata 1 | 1975 | 0 | 9,625 | 0 | 0 | 22 | 0 | 0 | 9,647 | 343,000 | |
| 11 | Elefanten Mindre 1 1) | Norrmalm | Drottninggatan 25 | 1973 | 0 | 3,943 | 810 | 0 | 72 | 0 | 0 | 4,825 | 157,000 | |
| 12 | Fenix 1 1) | Norrmalm | Barnhusgatan 3 | T 1929 | 0 | 3,385 | 48 | 0 | 238 | 0 | 0 | 3,671 | 82,000 | |
| 13 | Fiskaren Större 3 1) | Södermalm | Götgatan 2 | 1930 | 1,180 | 235 | 987 | 0 | 0 | 0 | 0 | 2,402 | 42,000 | |
| 14 | Getingen 13 1) | Vasastan | Sveavägen 149 | T 1963 | 0 | 10,772 | 432 | 0 | 2,609 | 0 | 0 | 13,813 | 186,000 | |
| 15 | Getingen 14 1) | Vasastan | Sveavägen 143–147 | T 1953 | 0 | 11,082 | 0 | 0 | 473 | 61 | 219 | 11,835 | 125,000 | |
| 16 | Getingen 15 1) | Vasastan | Sveavägen 159 | T 1963 | 0 | 14,401 | 1,128 | 0 | 7,382 | 0 | 3,600 | 26,511 | 90,980 | |
| 17 | Glädjen 12 1) | Stadshagen | Franzéng 6, Hornsbergs Strand 17 T 1949 | 0 | 12,240 | 0 | 0 | 0 | 0 | 0 | 12,240 | 198,000 | ||
| 18 | Glädjen 13 3) | Stadshagen | T | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |
| 19 | Grönlandet Södra 13 1) | Norrmalm | Adolf Fredriks Kyrkogata 8 | 1932 | 0 | 8,193 | 0 | 0 | 0 | 0 | 0 | 8,193 | 221,000 | |
| 20 | Guldfisken 18 1) | Östermalm | Nybrogatan 57 | 1936 | 699 | 4,401 | 0 | 0 | 0 | 0 | 0 | 5,100 | 117,400 | |
| 21 | Harpan 51 1) | Östermalm | Gumshornsg 2, Linnég 69–71 | 1920 | 2,028 | 2,199 | 356 | 0 | 0 | 0 | 0 | 4,583 | 0 | |
| 22 | Hägern Mindre 7 1) | Norrmalm | Drottninggatan 27–29 | T 1971 | 0 | 8,144 | 1,637 | 0 | 768 | 2,167 | 0 | 12,716 | 324,000 | |
| 23 | Islandet 3 (50%) 1) | Norrmalm | Holländargatan 11–13 | T 1904 | 0 | 4,189 | 10 | 0 | 0 | 0 | 0 | 4,199 | 86,000 | |
| 24 | Klamparen 10 1) | Kungsholmen | Fleminggatan 12 | 1986 | 0 | 22,418 | 0 | 0 | 42 | 0 | 0 | 22,460 | 363,000 | |
| 25 | Kolonnen 7 1) | Södermalm | Götgatan 95, m fl | 1965 | 1,082 | 2,161 | 116 | 0 | 67 | 0 | 700 | 4,126 | 65,200 | |
| 26 | Kurland 17 1) | Norrmalm | Holländargatan 25 | 1898 | 520 | 1,210 | 65 | 0 | 3 | 0 | 0 | 1,798 | 35,653 | |
| 27 | Kåkenhusen 38 1) | Östermalm | Brunnsgatan 3, Norrlandsgatan 31–33 1932 | 0 | 5,581 | 1,096 | 0 | 0 | 4 | 0 | 6,681 | 272,000 | ||
| Ladugårdsgärdet 1:48 1) | ||||||||||||||
| 28 | Värtahamnen | Tullvaktsvägen 9 | 1930/49 | 0 | 37,500 | 0 | 0 | 0 | 0 | 1,570 | 39,070 | 539,698 | ||
| 29 | Lammet 17 2) | Norrmalm | Bryggarg 4, G:a Brog 13A, Korgmakargr 4 |
T 1982 | 0 | 6,678 | 137 | 0 | 43 | 0 | 0 | 6,858 | 0 | |
| 30 | Landbyska Verket 10 1) | Östermalm | Birger Jarlsgatan 22 | 1899 | 0 | 870 | 265 | 0 | 131 | 0 | 0 | 1,266 | 42,400 | |
| 31 | Läraren 13 3) | Norrmalm | Torsgatan 4 | 1904/29 | 0 | 6,875 | 0 | 0 | 0 | 0 | 0 | 6,875 | 0 | |
| 32 | Läraren 5 3) | Norrmalm | Torsgatan 2 | 1904/29 | 524 | 3,689 | 0 | 0 | 0 | 0 | 0 | 4,213 | 178,895 | |
| 33 | Mimer 5 1) | Vasastan | Hagagatan 25 A–C, Vanadisvägen 9 | 1957 | 0 | 11,832 | 0 | 0 | 256 | 5 | 0 | 12,093 | 0 | |
| 34 | Murmästaren 7 1) | Kungsholmen | Kungsholmstorg 16 | 1898 | 0 | 2,534 | 502 | 0 | 52 | 0 | 0 | 3,088 | 60,200 | |
| 35 | Norrtälje 24 1) | Norrmalm | Engelbrektsgatan 5–7 | 1881 | 0 | 6,407 | 0 | 0 | 91 | 0 | 680 | 7,178 | 201,000 | |
| 36 | Orgelpipan 4 1) | Norrmalm | Klarabergsgatan 33–35 | T 1957 | 0 | 3,603 | 1,718 | 0 | 251 | 0 | 1,311 | 6,883 | 166,000 | |
| 37 | Ormträsket 10 1) | Vasastan | Sveavägen 166–170, 186 | 1962/67 | 0 | 13,406 | 3,644 | 0 | 623 | 0 | 0 | 17,673 | 223,200 | |
| 38 | Oxen Mindre 33 1) | Norrmalm | Luntmakarg 18, Malmskillnadsg 47 A, B |
1979 | 2,823 | 9,337 | 0 | 0 | 154 | 3 | 1,053 | 13,370 | 227,000 | |
| 39 | Pan 1 1) | Gamla Stan | S Nygatan 40–42, L Nygatan 23 | 1929 | 157 | 2,263 | 48 | 0 | 0 | 0 | 0 | 2,468 | 49,507 | |
| 40 | Paradiset 23 1) | Stadshagen | Strandbergsg 53–57 | 1944 | 0 | 8,380 | 316 | 0 | 3,778 | 5 | 0 | 12,479 | 144,000 | |
| 41 | Paradiset 27 1) | Stadshagen | Strandbergsg 59–65 | 1959 | 0 | 19,449 | 3,905 | 0 | 1,463 | 4 | 3,800 | 28,621 | 344,000 | |
| 42 | Paradiset 29 (50%) 3) | Stadshagen | Lindhagensg 120, Strandbergsg 45 | 1946 | 0 | 0 | 0 | 0 | 7,500 | 0 | 7,500 | 15,000 | 14,300 | |
| 43 | Pilen 27 1) | Norrmalm | Bryggarg 12A | 1907 | 0 | 1,965 | 0 | 0 | 116 | 0 | 0 | 2,081 | 67,000 | |
| 44 | Pilen 31 1) | Norrmalm | Gamla Brog 27–29, Vasag 38 | T 1988 | 0 | 5,148 | 1,134 | 2,577 | 60 | 0 | 760 | 9,679 | 317,000 | |
| 45 | Polacken 25 1) | Norrmalm | Kungsg 26 | 1929 | 0 | 1,941 | 304 | 0 | 222 | 0 | 0 | 2,467 | 80,000 | |
| 46 | Resedan 3 1) | Vasastan | Dalagatan 13 | 1929 | 800 | 2,768 | 0 | 0 | 0 | 0 | 0 | 3,568 | 64,000 | |
| 47 | Signalen 1 1) | Södermalm | Folkungag 122–124 | 1905 | 0 | 2,627 | 691 | 0 | 0 | 2 | 0 | 3,320 | 48,200 | |
| 48 | Sparven 18 1) | Östermalm | Birger Jarlsg 21–23, Kungsg 2 | 1929 | 0 | 2,006 | 1,616 | 5,097 | 0 | 0 | 0 | 8,719 | 297,000 | |
| 49 | Stralsund 1 (50%) 3) | Värtahamnen | Fjärde Bassängvägen 10 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||
| 50 | Trängkåren 7 1) | Marieberg | Gjörwellsg 30–34, Rålambsv 7–15 | 1963 | 0 | 50,005 | 1,927 | 0 | 4,514 | 0 | 20,000 | 76,446 | 795,000 | |
| 51 | Valnöten 8 1) | Kungsholmen | Hantverkarg 26, Scheeleg 1 | 1885 | 360 | 1,864 | 780 | 0 | 28 | 0 | 0 | 3,032 | 50,118 | |
| 52 | Verdandi 9 1) | Vasastan | Torsgatan 62–64 | 1923 | 1,399 | 0 | 0 | 0 | 0 | 0 | 0 | 1,399 | 22,800 | |
| 53 | Ynglingen 10 1) | Östermalm | Jungfrug 23, 27, Karlav 58–60 | 1929 | 2,399 | 7,646 | 788 | 0 | 220 | 0 | 0 | 11,053 | 253,000 | |
| Total Inner City | 15,153 | 414,628 | 28,955 | 7,674 | 35,509 | 2,251 | 52,737 | 556,907 | 8,609,551 |
Fartygstrafiken 2, in Hammarby Sjöstad.
Trikåfabriken 12, in Hammarby Sjöstad.
| Industry/warehouse, sqm | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Site/Land/Landhold | Tax assessed value, | ||||||||||||
| Property name Map number |
Residential, sqm Office, sqm |
Garage, sqm | |||||||||||
| Area | Address | Year built | Retail, sqm | Hotel, sqm | Other, sqm | Total, sqm | SEK thousands | ||||||
| HAMMARBY SJÖSTAD | |||||||||||||
| 1 | Fartygstrafiken 2 2) | Hammarby Sjöstad Hammarby Allé 91–95 | 1955 | 0 | 6,950 | 1,182 | 0 | 199 | 0 | 0 | 8,331 | 63,800 | |
| 2 | Godsfinkan 1 1) | Hammarby Sjöstad Heliosvägen 1 | T 1990 | 0 | 7,780 | 0 | 0 | 55 | 23 | 0 | 7,858 | 56,359 | |
| 3 | Hammarby Gård 7 2) | Hammarby Sjöstad Hammarby Allé 21, 25, Hammarby Kajv 2–8,12–18 |
1937 | 0 | 15,126 | 646 | 0 | 4,483 | 0 | 0 | 20,255 | 159,800 | |
| 4 | Korphoppet 1 2) | Hammarby Sjöstad Hammarby Fabriksväg 41–43 | 1949 | 0 | 1,831 | 372 | 0 | 10,823 | 17 | 1,200 | 14,243 | 35,372 | |
| 5 | Korphoppet 5 3) | Hammarby Sjöstad Hammarby Fabriksväg 37–39 T 1968 |
0 | 0 | 759 | 0 | 2,993 | 65 | 0 | 3,817 | 11,321 | ||
| 6 | Korphoppet 6 2) | Hammarby Sjöstad Hammarby Fabriksväg 33 |
T 1988 | 0 | 86 | 4,466 | 0 | 0 | 0 | 0 | 4,552 | 31,800 | |
| 7 | Luma 1 2) | Hammarby Sjöstad Ljusslingan 1–17, 2–36, | 1930 | 691 | 23,464 | 2,328 | 0 | 14,760 | 11 | 0 | 41,254 | 206,115 | |
| Glödlampsgränd 1–6, | |||||||||||||
| Lumaparksv 2–18, 5–21, Kölnag 3 | |||||||||||||
| 8 | Påsen 10 1) | Hammarby Sjöstad Heliosg 11–13, Virkesv 9 | 1942 | 0 | 3,490 | 0 | 0 | 6,575 | 0 | 0 | 10,065 | 34,692 | |
| 9 | Påsen 8 1) | Hammarby Sjöstad Virkesvägen 5 | T 1974 | 0 | 0 | 0 | 0 | 3,089 | 0 | 0 | 3,089 | 13,096 | |
| 10 | Trikåfabriken 12 3) | Hammarby Sjöstad Hammarby Fabriksväg 27 | 1942 | 0 | 679 | 0 | 0 | 345 | 0 | 285 | 1,309 | 4,355 | |
| 11 | Trikåfabriken 4 1) | Hammarby Sjöstad Hammarby Fabriksväg 25 | 1991 | 0 | 5,711 | 0 | 0 | 4,190 | 0 | 3,325 | 13,226 | 67,400 | |
| 12 | Trikåfabriken 8 1) | Hammarby Sjöstad Hammarby Fabriksväg 29–31 | 1930 | 0 | 10,185 | 692 | 0 | 4,538 | 12 | 0 | 15,427 | 60,400 | |
| 13 | Trikåfabriken 9 1) | Hammarby Sjöstad Hammarby Fabriksväg 19–21 | 1928 | 0 | 7,556 | 820 | 0 | 3,085 | 0 | 1,186 | 12,647 | 43,249 | |
| Total Hammarby Sjöstad | 691 | 82,858 | 11,265 | 0 | 55,135 | 128 | 5,996 | 156,073 | 787,759 | ||||
| SOLNA | |||||||||||||
| 1 | Axet 1 1) | Bergshamra | Barks Väg 1–19 | 1987 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 2 | Bladet 1 1) | Bergshamra | Barks Väg 1–19 | 1987 | 0 | 31,688 | 0 | 0 | 0 | 0 | 0 | 31,688 | 298,000 |
| 3 | Farao 14 2) | Arenastaden | Dalvägen 10, Pyramidvägen 7, 9 | 1964 | 0 | 15,870 | 406 | 0 | 3,337 | 0 | 405 | 20,018 | 129,400 |
| 4 | Farao 15 1) | Arenastaden | Dalvägen 8, Pyramidvägen 5 | 1981 | 0 | 7,050 | 708 | 0 | 409 | 1,740 | 319 | 10,226 | 77,400 |
| 5 | Farao 16 2) | Arenastaden | Dalvägen 4–6, Pyramidvägen 3 | 1973 | 0 | 3,927 | 1,288 | 0 | 606 | 877 | 0 | 6,698 | 49,600 |
| 6 | Farao 17 2) | Arenastaden | Dalvägen 2, Pyramidvägen | 1975 | 0 | 4,640 | 0 | 0 | 460 | 316 | 520 | 5,936 | 36,800 |
| 7 | Fräsaren 10 2) | Solna Business Park Svetsarvägen 24 | 1964 | 0 | 10,044 | 295 | 0 | 0 | 9 | 0 | 10,348 | 61,400 | |
| 8 | Fräsaren 11 1) | Solna Business Park Englundavägen 2–4, Svetsarvägen 4–10 |
1962 | 0 | 34,099 | 0 | 1,840 | 2,625 | 1,152 | 0 | 39,716 | 404,000 | |
| 9 | Fräsaren 12 1) | Solna Business Park Svetsarvägen 12–18, 20, 20A | 1964 | 0 | 19,404 | 10,109 | 0 | 173 | 60 | 0 | 29,746 | 394,946 | |
| 10 | Hallen 6 1) | Solna | Råsundavägen 175 | 1992 | 0 | 0 | 0 | 4,600 | 0 | 0 | 0 | 4,600 | 39,600 |
| 11 | Järvakrogen 3 3) | Frösunda | Enköpingsvägen 1 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 2,328 | |
| 12 | Kairo 1 1) | Arenastaden | Pyramidvägen 2 | 1983 | 0 | 10,741 | 0 | 0 | 0 | 0 | 0 | 10,741 | 107,400 |
| 13 | Karlsro 1 1) | Järva | Karlsrogatan 2 | 1968 | 0 | 1,824 | 0 | 0 | 11,141 | 0 | 0 | 12,965 | 41,400 |
| 14 | Nöten 4 1) | Solna Strand | Solna strandväg 2–60 | 1971 | 0 | 38,720 | 670 | 0 | 7,497 | 259 | 11,736 | 58,882 | 406,000 |
| 15 | Orgeln 7 1) | Sundbyberg | Järnvägsg 12–20, Lysgränd 1, | 1966 | 0 | 23,154 | 3,694 | 0 | 166 | 74 | 0 | 27,088 | 208,000 |
| 16 | Roseng2,4, Stureg 11–19 | ||||||||||||
| 17 | Planen 4 1) | Råsunda | Bollgatan 1–5, Solnavägen 102 A–C 1992 | 0 | 4,509 | 389 | 0 | 85 | 61 | 0 | 5,044 | 54,800 | |
| Pyramiden 4 2) | Arenastaden | Pyramidvägen 20 | 1960 | 0 | 3,111 | 0 | 0 | 75 | 10 | 0 | 3,196 | 38,000 | |
| 18 | Päronet 8 1) | Solna Strand | Solna strandväg 13–15, Torggatan 1976 | 0 | 19,700 | 0 | 0 | 915 | 0 | 0 | 20,615 | 180,000 | |
| 19 | Rovan 1 3) | Huvudsta | Storgatan 60–68 | 1972 | 91 | 2,007 | 5,440 | 8,847 | 618 | 1 | 0 | 17,004 | 159,000 |
| 20 | Skogskarlen 1 & 3 1) | Bergshamra | Björnstigen 81, Pipers väg 2 | 1929/1971 | 0 | 8,168 | 814 | 0 | 334 | 0 | 0 | 9,316 | 109,895 |
| 21 | Sliparen 1 2) | Solna Business Park Ekensbergsv 115, Svetsarv 1–3 | 1963 | 0 | 3,893 | 0 | 0 | 693 | 0 | 0 | 4,586 | 17,151 | |
| 22 | Sliparen 2 1) | Solna Business Park Ekensbergsv 113, Svetsarv 3–5 | 1964 | 0 | 19,148 | 0 | 0 | 464 | 783 | 0 | 20,395 | 201,800 | |
| 23 | Smeden 1 1) | Solna Business Park Englundav 6–14, Smidesv 5–7, Svetsarv 5–17 |
1967 | 432 | 38,224 | 5,128 | 0 | 679 | 19 | 0 | 44,482 | 371,718 | |
| 24 | Stigbygeln 2 1) | Arenastaden | Gårdsvägen 6 | 1955 | 0 | 8,898 | 0 | 0 | 0 | 0 | 0 | 8,898 | 25,318 |
| 25 | Stigbygeln 3 1) | Arenastaden | Gårdsvägen 8 | 1960 | 0 | 5,794 | 0 | 0 | 0 | 0 | 0 | 5,794 | 59,600 |
| 26 | Stigbygeln 5 2) | Arenastaden | Gårdsvägen 10 A, B | 1963 | 0 | 6,545 | 0 | 0 | 791 | 0 | 0 | 7,336 | 78,600 |
| 27 | Stigbygeln 6 1) | Arenastaden | Gårdsvägen 12–18 | 2001 | 0 | 9,505 | 581 | 0 | 99 | 6 | 0 | 10,191 | 156,200 |
| 28 | Styckjunkaren 3 1) | Huvudsta | Armégatan 38 | 1974 | 0 | 12,557 | 0 | 0 | 0 | 1,142 | 0 | 13,699 | 207,600 |
| 29 | Svetsaren 1 2) | Solna Business Park Englundavägen 7–13 | 1964 | 0 | 30,552 | 329 | 0 | 2,652 | 0 | 0 | 33,533 | 327,000 |
Tygeln 3 1) Arenastaden Gårdsvägen 13–21 2001 0 2,713 000 00 2,713 44,200 Tömmen 2 2) Arenastaden Arenastaden 0 0 000 0 2,100 2,100 0 Uarda 1 2) Arenastaden Dalvägen 22A–C, 22–30 1987 0 21,332 980 0 4,565 0 0 26,877 180,000 Uarda 4 1) Arenastaden Dalvägen 14–16 1992 0 6,375 0 0 1,549 0 0 7,924 89,200 Yrket 3 1) Solna Business Park Smidesvägen 2–8 1982 0 6,271 0 0 145 0 0 6,416 32,725 Total Solna 523 410,463 30,831 15,287 40,078 6,509 15,080 518,771 4,589,081
Trängkåren 7 – (DN building) in Marieberg was acquired in 2007.
Smeden 1, in Solna Business Park.
Solna.
Orgeln 7, in Sundbyberg.
Area Site/Land/Landhold Residential, sqm Office, sqm Retail, sqm Hotel, sqm Industry/warehouse, sqm Other, sqm Garage, sqm Total, sqm Tax assessed value, SEK thousands Address Year built Property name Map number
| OTHER NORTHERN STOCKHOLM | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Berga 6:558 3) | Åkersberga | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||
| 2 | Bergklacken 5 & 6 1) | Bromma | Grindstuvägen 40–50 | T 1972 | 0 | 6,190 | 0 | 0 | 4,662 | 1,420 | 0 | 12,272 | 42,476 |
| 3 | Bordduken 7 1) | Brommaplan | Klädesvägen 12–14 | T 1984 | 0 | 5,572 | 2,661 | 0 | 92 | 0 | 0 | 8,325 | 88,800 |
| 4 | Brandsprutan 2 1) | Näsby Park | Nytorpsvägen 5–7 | 1988 | 0 | 10,991 | 256 | 0 | 47 | 0 | 3,000 | 14,294 | 0 |
| 5 | Domnarvet 18 1) | Lunda | Fagerstagatan 11–13 | T 1991 | 0 | 5,274 | 0 | 0 | 267 | –28 | 0 | 5,513 | 0 |
| 6 | Domnarvet 36 1) | Lunda | Fagerstagatan 15 | T 1991 | 0 | 3,622 | 0 | 0 | 52 | 0 | 0 | 3,674 | 17,695 |
| 7 | Elementet 1 1) | Ulvsunda | Ulvsundavägen 106 | 1938 | 0 | 3,353 | 2,612 | 0 | 3,804 | 0 | 0 | 9,769 | 55,076 |
| 8 | Ferdinand 9 1) | Bromsten | Bromstensvägen 168–172 | 1956 | 0 | 0 | 0 | 0 | 4,508 | 0 | 0 | 4,508 | 17,593 |
| 9 | Fotkvarnen 1 2) | Rinkeby | Sunnanbyplan 9–10 | T 1970 | 8,858 | 454 | 0 | 0 | 0 | 0 | 0 | 9,312 | 43,107 |
| 10 | Fotkvarnen 2 2) | Rinkeby | Sunnanbyplan 3–25, 6–16 | T 1970 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 819 |
| 11 | Generatorn 17 1) | Bromma | Ranhammarsvägen 27–29 | T 1955 | 0 | 0 | 1,920 | 0 | 4,013 | 0 | 0 | 5,933 | 26,987 |
| 12 | Grammet 1 1) | Brommaplan | Tunnlandet 3, 11–13 | 1962 | 0 | 4,509 | 2,239 | 0 | 233 | 80 | 0 | 7,061 | 66,800 |
| 13 | Hammarby Smedby 1:464 3) Upplands Väsby | Johanneslundsvägen 3–5 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||
| 14 | Handkvarnen 3 2) | Rinkeby | Sörbyplan 3–13, 4–32 | T 1970 | 9,428 | 346 | 0 | 0 | 689 | 0 | 0 | 10,463 | 46,531 |
| 15 | Hjulkvarnen 1 2) | Rinkeby | Mellanbyplan 9–11 | T 1970 | 5,094 | 361 | 0 | 0 | 242 | 0 | 0 | 5,697 | 28,591 |
| 16 | Hjulkvarnen 2 2) | Rinkeby | Mellanbyplan 8–10 | T 1970 | 5,450 | 360 | 0 | 0 | 228 | 0 | 0 | 6,038 | 27,814 |
| 17 | Hjulkvarnen 3 2) | Rinkeby | Mellanbyplan | T 1970 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 924 |
| 18 | Hyppinge 1 2) | Tensta | Hyppingeplan | T 1970 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 1,762 |
| 19 | Induktorn 28 1) | Bromma | Ranhammarsvägen 24 | T 1942 | 0 | 2,773 | 1,118 | 0 | 1,430 | 35 | 0 | 5,356 | 17,698 |
| 20 | Induktorn 33 1) | Bromma | Ranhammarsvägen 16–18 | 1943 | 0 | 5,708 | 640 | 0 | 10,886 | 360 | 0 | 17,594 | 59,879 |
| 21 | Jollen 4 1) | Näsby Park | Kuttervägen 1–3 | 1970 | 0 | 7,722 | 0 | 0 | 742 | 0 | 0 | 8,464 | 32,000 |
| 22 | Kallhäll 9:35 3) | Järfälla | Galgbacken 5 | 0 | 799 | ||||||||
| 23 | Kullinge 1 2) | Tensta | Risingeplan 9–11 | T 1970 | 13,004 | 448 | 64 | 0 | 208 | 0 | 0 | 13,724 | 63,606 |
| 24 | Linneduken 5 1) | Brommaplan | Brommaplan 403–405 | T 1948 | 0 | 2,180 | 222 | 0 | 379 | 0 | 0 | 2,781 | 23,996 |
| 25 | Masugnen 7 2) | Bromma | Karlsbodavägen 18–20 | 1991 | 0 | 10,715 | 0 | 0 | 0 | 21 | 0 | 10,736 | 66,200 |
| 26 | Märsta 15:5 3) | Märsta | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 402 | ||
| 27 | Racketen 11 3) | Alvik | Gustavslundsvägen | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |
| 28 | Rinkeby 2:1 2) | Rinkeby | Parkering | T 1970 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 29 | Rinkeby 2:13 2) | Rinkeby | Parkering | T 1970 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 30 | Rinkeby 2:14 2) | Rinkeby | Parkering | T 1970 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 31 | Risinge 1 2) | Tensta | Risingeplan 8–10 | T 1970 | 13,378 | 252 | 173 | 0 | 73 | 0 | 0 | 13,876 | 64,636 |
| 32 | Sjukhuset 9 1) och 10 3) | Danderyd | Mörbylund 3–5 | 1972 | 0 | 0 | 0 | 0 | 1,410 | 0 | 0 | 1,410 | 6,200 |
| 33 | Skvaltkvarnen 1 2) | Rinkeby | Storbyplan 9–11 | T 1970 | 8,336 | 422 | 0 | 0 | 45 | 0 | 0 | 8,803 | 39,095 |
| 34 | Skvaltkvarnen 2 2) | Rinkeby | Storbyplan 8–10 | T 1970 | 4,542 | 0 | 0 | 0 | 0 | 0 | 0 | 4,542 | 22,268 |
| 35 | Skvaltkvarnen 3 2) | Rinkeby | Storbyplan | T 1970 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 924 |
| 36 | Tekniken 1 3) | Sollentuna | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 1,638 | ||
| 37 | Täby Näsbypark 73:5 3) | Näsby Park | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||
| 38 | Ulvsunda 1:1 1) | Bromma flygplats | Flygplansinfarten 27 | A 2004 | 0 | 0 | 0 | 0 | 1,241 | 0 | 0 | 1,241 | 0 |
| 39 | Vallentuna Rickeby 1:327 3) Vallentuna | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||
| 40 | Veddesta 2:68 1) | Veddesta | Fakturavägen 6 | 1990 | 0 | 998 | 0 | 0 | 1,779 | 0 | 0 | 2,777 | 14,889 |
| 41 | Vättinge 1 2) | Tensta | Hyppingeplan 8–10 | T 1970 | 6,780 | 292 | 75 | 0 | 76 | 0 | 0 | 7,223 | 33,827 |
| 42 | Vättinge 2 2) | Tensta | Hyppingeplan 20–31 | T 1970 | 5,250 | 108 | 0 | 0 | 0 | 0 | 0 | 5,358 | 24,536 |
| 43 | Vättinge 3 2) | Tensta | Hyppingeplan 9–11 | T 1970 | 6,766 | 281 | 2,069 | 0 | 316 | 0 | 0 | 9,432 | 40,077 |
| 44 | Vävnaden 1 1) | Brommaplan | Tunnlandet 2 | T 1987 | 0 | 0 | 299 | 0 | 0 | 0 | 0 | 299 | 6,084 |
| 45 | Öninge 1 2) | Tensta | Risingeplan 3–31, 4–32 | T 1970 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 437 |
| Total other Northern Stockholm | 86,886 | 72,931 | 14,348 | 0 | 37,422 | 1,888 | 3,000 | 216,475 | 984,166 |
| Industry/warehouse, sqm | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Property name Map number |
Area | Address | Site/Land/Landhold Year built |
Residential, sqm | Office, sqm Retail, sqm |
Hotel, sqm | Other, sqm | Garage, sqm | Tax assessed value, SEK thousands Total, sqm |
||||
| OTHER SOUTHERN STOCKHOLM | |||||||||||||
| 1 | Elektra 20 3) | Västberga | Elektravägen 49–53 | T 1962 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 2,904 |
| 2 | Gräddö 2&4 1) | Farsta | Fryksdalsbacken 12–14, Mårbackagatan 31 |
T 1982 | 0 | 11,836 | 285 | 0 | 2,095 | 0 | 0 | 14,216 | 60,303 |
| 3 | Lillsätra 3 3) | Sätra | T | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |
| 4 | Marievik 14 1) | Marievik | Årstaängsvägen 31–33 | 1944 | 0 | 16,157 | 265 | 0 | 488 | 13 | 0 | 16,923 | 144,206 |
| 5 | Marievik 19 3) | Marievik | Årstaängsvägen 13 | 1989 | 0 | 11,655 | 7,279 | 0 | 0 | 2 | 1,770 | 20,706 | 151,806 |
| 6 | Näsby 4:1472 3) | Tyresö | Studiovägen 1 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |
| 7 | Pelaren 1 3) | Globen | Pastellvägen 2–6 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 4,208 | |
| 8 | Sicklaön 145:13 3) | Nacka | Herrgårdsparken 1–5 | 1680 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 559 |
| 9 | Sicklaön 145:14 3) | Nacka | Herrgårdsparken 7–9 | 1700 | 94 | 116 | 0 | 0 | 0 | 0 | 0 | 210 | 0 |
| 10 | Sicklaön 145:15 3) | Nacka | Herrgårdsparken 11–13 | 1700 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 241 |
| 11 | Sicklaön 145:17 1) | Nacka | Garverigränd 7–13, Winborgs väg 26–30 |
1888 | 0 | 87 | 4,730 | 0 | 290 | 0 | 0 | 5,107 | 54,200 |
| 12 | Sicklaön 145:19 1) | Nacka | Turbinv 1–11 | 1900 | 0 | 2,209 | 11,922 | 0 | 143 | 9 | 2,818 | 17,101 | 146,400 |
| 13 | Sicklaön 145:2 3) | Nacka | Turbinv 1 | 0 | 2,100 | 0 | 0 | 0 | 0 | 0 | 2,100 | 0 | |
| 14 | Sicklaön 145:20 1) | Nacka | Järla Gårdsväg 11–17 | 1900 | 0 | 0 | 3,344 | 0 | 0 | 0 | 0 | 3,344 | 19,630 |
| 15 | Sicklaön 364:1 3) | Nacka | Turbinvägen 1 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 675 | |
| 16 | Sicklaön 392:1 3) | Danvikstull | Kvarnholmsvägen 12 | 1986 | 0 | 0 | 0 | 0 | 0 | 0 | 5,000 | 5,000 | 4,252 |
| 17 | Söderbymalm 3:405 3) | Haninge | Nynäsvägen 65, Stores Gr. 20–22 | 1972 | 0 | 9,427 | 536 | 0 | 0 | 37 | 0 | 10,000 | 0 |
| Total other Southern Stockholm | 94 | 53,587 | 28,361 | 0 | 3,016 | 61 | 9,588 | 94,707 | 589,384 | ||||
| OTHER OUTSIDE STOCKHOLM | |||||||||||||
| Grimbergen 3) | Belgien | St Annastraat | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||
| Ånsta 20:17 3) | Örebro | Sanatorievägen | 1968 | 0 | 0 | 0 | 0 | 3,011 | 0 | 0 | 3,011 | 0 | |
| Total other outside Stockholm | 0 | 0 | 0 | 0 | 3,011 | 0 | 0 | 3,011 | 0 | ||||
| TOTAL GROUP | 103,347 | 1,034,467 113,760 | 22,961 174,171 | 10,837 | 86,401 | 1,545,944 15,599,941 |
1) Investment property – properties that is actively managed on an ongoing basis.
2) Improvement property – Properties in which a conversion or extension is in progress or planned that has a significant impact on the property's net operating income. Net operating income is affected either directly by the project or by limitations on lettings prior to impending improvement work. Recently acquired properties (last twelve months) in which work is in progress that is aimed at significantly improving the property's net operating income compared with the time of acquisition.
3) Land & project property – Land and developable properties and properties in which a new build/complete redevelopment is in progress.
| Property name | Area | Category Floor space, sqm |
|
|---|---|---|---|
| PROPERTIES SOLD | |||
| Quarter 1 | |||
| Racketen 10 | Alvik | Office | 38,378 |
| Quarter2 | |||
| Botvid Gymnasium 3 | Botkyrka | Industrial/Warehouse/Office | 55,810 |
| Ostmästaren 3 | Årsta Park | Office/Industrial/Warehouse | 18,467 |
| Ostmästaren 4 | Årsta Park | Office/Industrial/Warehouse | 36,149 |
| Ostmästaren 5 | Årsta Park | Office/Industrial/Warehouse | 10,427 |
| Ostmästaren 6 | Årsta Park | Office/Warehouse | 7,254 |
| Packrummet 10 | Årsta | Office | 2,100 |
| Packrummet 12 | Årsta | Industrial/Warehouse/Office | 36,386 |
| Varuhissen 1 | Årsta | Industrial/Warehouse/Office | 15,271 |
| Quarter 3 | |||
| Bacchus 3 | Old Town | Residential | 1,350 |
| Quarter 4 | |||
| Orgelpipan 5 | Norrmalm | Office | 2,579 |
| Visthusboden 1 | Johanneshov | Office/Warehouse/Retail | 4,087 |
| Visthusboden 2 | Johanneshov | Office/Warehouse/Retail | 4,740 |
| Visthusboden 3 | Johanneshov | Office/Warehouse/Retail | 5,560 |
| Marievik 31 | Marievik | Land | 0 |
| Kurland 18 | Norrmalm | Office | 893 |
| Luma 1, part of | Hammarby Sjöstad | Residential | 0 |
| TOTAL PROPERTY SALES JAN–DEC 2007 | 239,451 |
| Quarter 1 | |||||
|---|---|---|---|---|---|
| Mimer 5 | Inner City | ||||
| Planen 4 | Solna | ||||
| Quarter 2 | |||||
| Söderbymalm 3:405 | Other Southern Stockholm | ||||
| Quarter 3 | |||||
| Valnöten 8 | Inner City | ||||
| Quarter 4 | |||||
| Apotekaren 22 | Inner City | ||||
| Getingen 15 | Inner City | ||||
| Grönlandet Södra 13 | Inner City | ||||
| Trängkåren 7 | Inner City | ||||
*) For further information on properties acquired, see list of properties.
The Annual General Meeting of Fabege AB (publ) will be held at 4 p.m. on Thursday 3 April 2008 at Moderna Museet in Stockholm. Registration for the AGM begins at 3 p.m. Notice of the AGM will be made by advertisement in Post- och Inrikes Tidningar and Svenska Dagbladet. Information about the AGM is provided on Fabege's website, www.fabege.se.
Interim report January-March: 6 May Interim report January-June: 10 July Interim report January-September: 4 November "Our vision is to be the most proactive, innovative and competent commercial property company in Stockholm, and an important partner for our clients and society at large, ensuring that Fabege is the natural first choice provider for companies and organisations in need of need premises."
Christian Hermelin, CEO
P O Box 730, SE-169 27 Solna Visitors: Dalvägen 8, SE-169 56 Solna Phone: 08-555 148 00 Fax: 08-555 148 01 E-mail: [email protected] Internet: www.fabege.se Corporate identity no: 556049-1523 Board registered office: Stockholm
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