Hufvudstaden

Quarterly Report • May 5, 2022

Interim Report January–March 2022

• Net revenue from property management increased by 6 per cent, totalling SEK 449 million (425). Including intra-Group rent revenue of SEK 50 million (34), attributable primarily to NK Retail, the increase was 9 per cent.
• Gross profit from property management increased by 1 per cent, totalling SEK 288 million (284). Including intra-Group rent revenue of SEK 50 million (34), the increase was 7 per cent.
• Net profit for the period was SEK 380 million (14), equivalent to SEK 1.88 per share (0.07). The increase is attributable to positive unrealised changes in value of the property holdings.
• The fair value of the property holdings was SEK 49.2 billion (48.8 at year-end), resulting in a net reinstatement value (EPRA NRV) of SEK 199 per share (199 at year-end) after dividend payment of SEK 2.60 per share. Unrealised changes in the value of the property holdings amounted to SEK 227 million (-236) for the period.
• The equity ratio was 60 per cent (59), the net loan-to-value ratio was 19 per cent (20), and the interest coverage ratio multiple was 7.6 (8.6).
• The rental vacancy rate at the end of the period was 9.7 per cent (8.3). Excluding current development projects, the rental vacancy rate was 6.7 per cent (7.3).

Operating events during the first quarter

In Femman in Gothenburg, the IT company Iver and the Swedish Property Federation signed leases for approximately 2,750 square metres and 640 square metres of office space, respectively.

Alektum Group extended its lease for approximately 5,500 square metres of office space in Femman and signed a lease for more than 300 square metres in the Hästhuvudet 13 property in Stockholm.

Stadium Outlet will open a store of approximately 1,900 square metres on the lower level of the Femman shopping centre.

In Bibliotekstan, the watch brand Breitling will open a flagship store of approximately 200 square metres in the Kvasten 9 property.

In Birger Jarlspassagen in Bibliotekstan, Adam & Albin, together with Josephine Sondlo, opened the cocktail bar Nori Bar.

Closely signed a lease for approximately 180 square metres of retail space in the Kåkenhusen 40 property on Kungsgatan in Stockholm.

Performance measures
	Jan–Mar	Jan–Mar	Jan–Dec
SEK m	2022	2021	2021
Net revenue, property management, gross	499	459	1,936
Rent revenue, intra-Group	-50	-34	-153
Net revenue, property management, net	449	425	1,783
Gross profit, property management	288	284	1,221
Unrealised changes in property value, investment properties	227	-236	2,579
Operating profit	517	52	3,865
Net profit for the period	380	14	2,955
Fair value of properties, SEK bn	49.2	45.6	48.8
Net loan-to-value ratio, properties, %	18.7	20.0	17.9
Interest coverage ratio, multiple	7.6	8.6	9.3
EPRA vacancy rate, %	6.7	7.3	5.9
EPRA EPS, SEK	1.15	1.15	5.10
EPRA NRV per share, SEK	199	182	199

Interim report January–March 2022 Hufvudstaden 2

GROUP

RESULTS

Property management

Net revenue from property management excluding intra-Group rents of SEK 50.3 million (33.7) totalled SEK 448.7 million (425.3) for the period. Gross profit was SEK 288.0 million (283.8) excluding intra-Group rents. The increase was attributable primarily to decreased rent reductions for stores and restaurants, indexation as well as higher gross rents related to renegotiations, and new leases. Property tax increased due to provisions for new property tax assessments and the cost has mainly been invoiced onwards to the tenants. The cost of maintenance during the period was higher than normal.

The turnover-based rent supplement is reported in the fourth quarter. The turnover-based rent supplement for the preceding year totalled SEK 8.8 million. Apart from the turnover-based rent supplement, there are no other material seasonal variations in rents.

The property management results for each business area are reported on page 8.

Other segments

Other segments comprise NK Retail and other operations. Other operations consist of Cecil Coworking, NK e-commerce and the parking business in Parkaden AB.

NK Retail accessed the NK business on 3 February 2021. Net revenue amounted to SEK 164.1 million (74.4). Costs excluding intra-Group rents of SEK -33.7 million (-20.8) were SEK -162.9 million (-59.7). Profit for NK Retail excluding intra-Group rental costs was SEK 1.2 million (14.7). The result was affected by the effects from restrictions and recommendations in conjunction with Covid-19. Sales for NK Retail is impacted by seasonal variations, with the first quarter of the year normally being the weakest and the fourth quarter the strongest.

Net revenue from other operations amounted to SEK 31.0 million (17.9). The increase was mainly attributable to higher revenue for Cecil Coworking and the parking business in Parkaden AB. Costs excluding intra-Group rents of SEK -16.6 million (-12.9) were SEK -17.1 million (-16.7). Profit excluding intra-Group rental costs was SEK 13.9 million (1.2).

For further information, see Segment Reporting on page 8.

Other profit and loss items

Central administration totalled SEK -12.8 million (-12.2). Unrealised changes in the value of investment properties totalled SEK 227.0 million (-235.6). For further information, see page 4.

Financial income and expense

Net financial income and expense amounted to SEK -38.0 million (-33.6), of which SEK -32.4 million (-28.0) refers to the cost of borrowing, and SEK -5.6 million (-5.6) to leasing costs, primarily ground rents. The increase in financial expenses is due to increased borrowing and higher borrowing costs. For further information, see page 5.

Tax

The Group's tax for the period was SEK -99.3 million (-4.6), of which SEK -19.1 million (-20.9) in current tax and SEK -80.2 million (16.3) in deferred tax. The increase in deferred tax is attributable primarily to positive unrealised changes in value in property holdings.

Net profit or loss for the year

The consolidated net profit was SEK 380.0 million (13.7). The increase is attributable to positive unrealised changes in value in the property holdings.

PROPERTY HOLDINGS

The fair value of the Hufvudstaden property holdings is based on an internal valuation, where classification takes place on level 3 according to IFRS 13. The assessed value as at March 31, 2022 was SEK 49,206 million (48,790 at year-end). The increase is attributable to positive unrealised changes in value and investments. Rentable floor space totalled approximately 386,400 square metres (386,500 at yearend).

The total rental vacancy rate as at March 31, 2022 was 9.7 per cent (7.3 at year-end) and the total floor space vacancy rate was 14.7 per cent (10.2 at yearend). The rental vacancy rate, excluding current development projects (EPRA vacancy rate), totalled 6.7 per cent (5.9 at year-end). The increase in the rental vacancy rate, excluding current development projects, was primarily attributable to a couple of office tenants relocating. Several leases were signed with access during the latter part of 2022.

Acquisitions and investments

Total investments were SEK 203.3 million (190.7), of which investments in properties and other non-current assets were SEK 203.3 million (150.9).

At present, current and planned projects are worth approximately SEK 3 billion. Major projects are presented in the table below.

Development of the women's floors in the NK Department Stores in Stockholm and Gothenburg is ongoing. The projects aim to create a more efficient layout with new designs for the departments and improved customer flows.

Major current and planned projects in the first quarter 2022

City	Property	Status	Type of premises	Project floor space (sq m)	Of which added floor space (sq m)	Estimated investment1) (SEK m)	Estimated completion (year)
Stockholm	Vildmannen 7	Current	Office, retail & residential	4,800	4,800	800	2023
Stockholm	Orgelpipan 7	Local planning	Office	-	-	-	-
Gothenburg	Inom Vallgraven 12 block	Current	Office, retail & restaurant	31,600	11,600	2,200	2025/2026
Gothenburg	Inom Vallgraven 3:2	Current	Residential	1,300	-	160	2022/2023
Gothenburg	NK Gothenburg	Current	Retail	2,900	-	85	2022
Gothenburg	NK Gothenburg	Local planning	Office, retail & restaurant	-	-	-	-

1) Includes estimated costs for rent losses and financing that are continuously recognised in profit and loss as well as costs for evacuation. The investment in the Vildmannen 7 property includes extraordinary costs resulting from the fire in 2017.

The process of connecting more departments to NK e-commerce continued during the first quarter of the year.

In Vildmannen 7 in Bibliotekstan, the foundation work was completed in 2021. The work on the new frame was essentially completed during the first quarter of this year. The dismantling of the trusses around the existing facades commenced ahead of the renovation of these facades. A lease was signed earlier with Cirio Advokatbyrå for approximately 2,200 square metres of office space. Interest is strong in the remaining office space of about 700 square metres and in the property's retail premises. The new building will offer highly modern and efficient offices as well as attractive stores in a unique environment. The building will be accessed in stages in 2023.

In Gothenburg, light demolition, foundation reinforcement and other preparatory work continued as the first part of the extensive redevelopment and expansion of the project Johanna in the Inom Vallgraven 12 block. The new local plan allows for additional building permissions of around 15,000 square metres in gross area. Building permission for the project was obtained at the end of 2021 and a partnership agreement was previously signed with NCC as the main contractor. The project is expected to lead to an increase in the lettable area of approximately 11,600 square metres. Completion is expected to be in late 2025 or early 2026. In the Inom Vallgraven 3:2 property, the conversion into housing and major maintenance measures are in progress. The project is expected to be completed at the end of 2022.

Property value and net asset value

At the end of each quarter, Hufvudstaden carries out an internal valuation of each individual property. The purpose of the valuation is to assess the fair value of the property holdings. To assure the quality of the valuation, external valuations of parts of the property holdings are obtained at least once a year. A continuous update is made during the year of the internal valuation of the properties in order to take account of purchases, sales and investments. Hufvudstaden also examines on a continuous basis whether there are other indications of changes in the fair value of the properties. These indications could take the form, for example, of major leases, terminations, and material changes in the yield requirements.

In the light of the above, the assessed unrealised change in the value of the property holdings for the period was SEK 227.0 million (-235.6). The total value of the property holdings at March 31, 2022 was SEK 49.2 billion, including investments for the period. The unrealised increase in value was primarily due to the effect of higher rents for offices.

The average yield requirement is unchanged compared to the fourth quarter of 2021 and stood at 3.5 per cent at the above valuation (3.5 at year-end).

Valuation method

Valuation of the property holdings is carried out by assessing the fair value of each individual property. The valuation is made using a variation on the location price method, known as the net capitalisation method. The method involves setting the market's yield requirement in relation to the net operating income of the properties. In the case of other project properties and undeveloped land, the valuation is based on a completed building with a deduction for construction costs, as well as financial costs and the cost of vacant space that arose during the construction period.

The yield requirement is based on information compiled about the market's yield requirement for actual

purchases and sales of comparable properties in similar locations. If few or no deals are concluded in the property's sub-area, transactions in the adjoining area are analysed. Even transactions that have yet to be finalised provide guidance on market yield requirements.

The yield requirement can vary between different regions and different sub-areas within the regions. Account is also taken of the type of property, the technical standard, the construction of the building, and major investment requirements. For leasehold properties, the calculation is based on a yield requirement that was 0.20 percentage points higher than for equivalent properties where the land is freehold. The net operating income of the properties is based on market rent revenue, the long-term rental vacancy rate, and normalised operating and maintenance costs. If there is greater uncertainty than normal, this is offset by the increased direct yield requirements in the valuation.

When carrying out the valuation, the following yield requirement figures for office and retail properties have been applied:

Yield requirements, property valuation 1)

Stockholm	3.1-3.5 per cent
Gothenburg	4.0-4.8 per cent
Property holdings, average	3.5 per cent

1) Valuation date: March 31, 2022

Sensitivity analysis

Fair value is an estimation of the probable sales price on the market at the time of the valuation. However, the price can only be set when a transaction has been completed. In the case of an external property valuation, a range is often given to indicate the degree of uncertainty surrounding the estimates of fair value. The value range is usually +/- 5 per cent but can vary depending, among other things, on the market situation, the technical standard of the property, and investment requirements. Hufvudstaden's property holdings are valued at SEK 49.2 billion, with a degree of uncertainty of +/- 5 per cent, which means that the estimated fair value varies by +/- SEK 2.5 billion. Below are the key factors that influence the valuation and the consequent impact on profit or loss before tax.

Sensitivity analysis, property valuation 1)

		Impact on
		profit or loss
	Change, +/-	before tax, +/-
Rental revenue	SEK 100/sq m	SEK 1,110 m
Property costs	SEK 50/sq m	SEK 555 m
Rental vacancy rate	1.0 percentage points	SEK 660 m
Yield requirement	0.25 percentage points SEK 3,560 m

1) Valuation date: March 31, 2022

Net asset value

Based on the valuation of the property holdings, the net reinstatement value (EPRA NRV) is SEK 40.3 billion or SEK 199 per share. Net tangible assets (EPRA NTA) amounted to SEK 37.9 billion or SEK 187 per share after a deduction for estimated deferred tax. This assessment is based on current tax legislation and market practice, which means that properties can be sold via a limited company without tax implications. The assessed deferred tax has been assumed to be 5 per cent.

Net asset value, March 31, 2022

		SEK/
	SEK m	share
Equity according to the balance sheet	30,920.0	153
Reversal
Deferred tax1)	9,358.8	46
EPRA NRV	40,278.8	199
Deduction
Intangible assets	-93.3	-1
Estimated fair liability, deferred tax 5%	-2,271.6	-11
EPRA NTA	37,913.9	187
Reversal
Intangible assets as above	93.3	1
Deferred tax in its entirety	-7,087.2	-35
EPRA NDV	30,920.0	153

1) Deferred tax according to the balance sheet related to investment ' properties and right-of-use assets attributable to ground rents.

RENTAL MARKET

In Stockholm City, activity in the office rental market was good during the first quarter of the year. The demand was mainly for modern, flexible office premises in the best locations. Vacancy rates were stable or decreased somewhat and in Stockholm's most attractive locations - Bibliotekstan, Norrmalmstorg/Hamngatan, and the Hötorget area - market rents for modern offices increased somewhat at SEK 6,400-8,800 per square metre and year, excluding the property tax supplement. The market for retail premises recovered somewhat, with an increase in interested parties and leases signed. The market rents for retail premises in prime commercial locations were in the range of SEK 11,000-24,000 per square metre and year, excluding the property tax supplement.

In the central sub-markets of Gothenburg, the demand was mainly for modern and flexible office premises. Vacancies rose slightly and market rents in the most attractive locations had a positive trend and were between SEK 3,000-3,900 per square metre and year, excluding the property tax supplement. For retail premises in central commercial locations, market rents were between SEK 3,000-13,000 per square metre per year, excluding the property tax supplement.

FINANCING

Hufvudstaden's financing requirements are met through a number of the major Nordic banks and the capital market. Total borrowing as at March 31, 2022 amounted to SEK 9,100 million (9,200 at year-end). Interest-bearing net debt was SEK 8,499 million (8,018 at year-end). In addition, leasing debt according to IFRS 16 amounted to SEK 714 million (716 at yearend), and total net debt was SEK 9,213 million (8,734 at year-end). In addition to outstanding loans, there are unutilised loan commitments amounting to SEK 4,500 million.

Hufvudstaden has an MTN programme totalling SEK 12,000 million, and a commercial paper programme amounting to SEK 3,000 million. The outstanding amount in bonds was SEK 7,800 million and there was SEK 300 million in commercial paper. Hufvudstaden ensures that at any point in time there are unutilised loan assurances to cover all outstanding commercial paper.

Financing facilities, SEK m, March 31, 2022

	Framework/
Loan/facility type	facility volume	Utilized
MTN programme	12,000	7,800
Comm. paper programme	3,000	300
Bank loans incl. loan commitments	5,500	1,000

The average fixed interest period was 2.3 years (2.2 at year-end), the average capital tie-up period was 2.6 years (2.6 at year-end), and the average equivalent rate of interest was 1.4 per cent (1.3 at year-end) including and 1.3 per cent (1.2 at year-end) excluding costs for unutilised loan commitments. The capital tieup period for commercial paper loans was calculated based on the underlying loan commitments. To achieve the desired interest payment structure, borrowing takes place at both a fixed and variable rate of interest. Of the long-term borrowings, SEK 6,000 million carries a fixed rate of interest. Financial assets and liabilities are recognised at amortised cost, which concurs in all essentials with fair value, apart from the bond loans. For bond loans with a fixed rate of interest, the surplus value is SEK 211.3 million (13.0 at yearend). These values were calculated on the basis of level 2 in IFRS 13, which means that the value has been calculated based on official market listings.

Fixed interest structure, March 31, 2022

Maturity,	Credit amount	AER, %	Proportion,
year	SEK m	1) 2)	%
< 1	3,100	1.6	34
1 - 2	1,000	1.3	11
2 - 3	2,000	1.2	22
3 - 4	500	1.2	6
4 - 5	2,500	1.4	27
Total	9,100	1.4	100

1) The credit margins in the tables are allocated to the period in which the credit is reported.

2) The average effective rate excluding cost for unutilised loan commitments was 1.3 per cent.

	Capital tie-up structure SEK m, March 31, 2022

Maturity,		Credit Utilised:
Year	Agree ment	Bank loans	Bonds/Commer. paper		Total Unutilised
< 1	2,600	500	2,100	2,600	-
1 - 2	3,000	500	1,000	1,500	1,500
2 - 3	3,000	-	2,000	2,000	1,000
3 - 4	1,500	-	500	500	1,000
4 - 5	3,500	-	2,500	2,500	1,000
Total	13,600	1,000	8,100	9,100	4,500

SHARES AND SHAREHOLDERS

Hufvudstaden Class A shares are listed on Nasdaq Stockholm. The company's Class C shares were delisted from Nasdaq Stockholm in January 2020. The company had 38,896 shareholders at the end of the period. The proportion of foreign ownership as at March 31, 2022 was 24.3 per cent (24.9 at year-end) of the total number of outstanding shares. The Class A share price as at March 31, 2022 was SEK 133.75, and total market capitalisation of all shares based on the Class A share price was SEK 28.3 billion.

Conversion of Hufvudstaden's class C shares At the 2001 Annual General Meeting, a conversion clause was added to Hufvudstaden's articles of association. Shareholders have the right at any time to request conversion of Class C shares into Class A shares. In the first quarter of 2022, 18 Class C

Share structure as at March 31, 2022

shares were converted into Class A shares.

	Number of	Number	Equity	Votes
Share class	shares	of votes	%	%
A (1 vote)	203,000,098	203,000,098	96.1	19.7
C (100 votes)	8,271,835	827,183,500	3.9	80.3
Total	211,271,933	1,030,183,598	100.0	100.0

Shares bought back

Treasury shares held at March 31, 2022 totalled 8,965,000 Class A shares, corresponding to 4.2 per cent of all shares issued and 0.9 per cent of the total number of votes. No buyback took place during the period or after the end of the reporting period. At the 2022 Annual General Meeting, the Board of Directors was granted renewed authorisation to acquire Class A shares up to 10 per cent of all shares outstanding and to transfer treasury shares held by the company.

Share buybacks as at March 31, 2022

	Total
	number	Treasury	Other share
Million shares	of shares	shares	holders
As at January 1, 2022	211.3	9.0	202.3
Buyback	-	-	-
As at March 31, 2022	211.3	9.0	202.3

MATERIAL RISKS AND UNCERTAINTIES

The Group is mainly exposed to financing, interest and credit risks and changes in the value of its property holdings.

The geopolitical security situation in Europe has deteriorated sharply with Russia's invasion of Ukraine. This has resulted in negative effects on the financial markets. There is also some concern about disruptions in deliveries and increased prices, which may affect our operations in the future, primarily in ongoing and planned projects.

In addition to the above, no other material risks or uncertainties have been identified than those described in the 2021 Annual and Sustainability Report.

MATERIAL TRANSACTIONS WITH RELATED PARTIES

There were no material transactions with related parties during the year.

EU TAXONOMY

In order to achieve the EU's climate goals and objectives under the European Green Deal, the EU has decided on a taxonomy whose purpose is to define which economic activities are sustainable. In accordance with the mandatory reporting for 2021, Hufvudstaden reported the extent to which the Group's activities are taxonomy eligible. The information is published as part of the 2021 Annual and Sustainability Report.

ACCOUNTING POLICIES

Hufvudstaden applies the EU-endorsed IFRS standards. This interim report for the Group has been prepared in accordance with IAS 34 Interim Financial Reporting, and applicable provisions of the Swedish Annual Accounts Act. Disclosures according to IAS 34.16A are presented in both the financial statements and in other parts of the interim report. Accounting policies and computation bases remained unchanged from the most recent Annual and Sustainability Report.

New standards and interpretations

New and amended standards that took effect in 2022 have not had any significant effects on the Group's financial reporting.

FORTHCOMING INFORMATION

Half-year Report, January-June 2022	August 24, 2022
Interim Report, January-September 2022	November 10, 2022
Year-end Report for 2022	February 16, 2023
Annual and Sustainability Report 2022	March 2023
Annual General Meeting 2023	March 23, 2023

The information in this Interim Report is information that Hufvudstaden AB (publ) is obligated to publish under the EU Market Abuse Regulation and the Securities Market Act. The information was published through the auspices of the persons named below on 5 May 2022.

This information is also published on Hufvudstaden's website, www.hufvudstaden.se.

Questions can be answered by Anders Nygren, President, or Åsa Roslund, Vice President and CFO, on +46-8-762 90 00.

REPORT ON RESULTS

	January March	January March	January December
GROUP, SEK m	2022	2021	2021
Net revenue1)
Property management, gross	499.0	459.0	1,936.5
Rent revenue, intra-Group	-50.3	-33.7	-153.0
Property management, net	448.7	425.3	1,783.5
Other segments	195.1	92.3	704.4
	643.8	517.6	2,487.9
Property management expenses
Maintenance	-11.5	-5.7	-26.3
Operation and administration	-85.7	-83.4	-326.1
Property tax	-62.0	-50.9	-204.2
Depreciation	-1.5	-1.5	-5.8
Property management expenses	-160.7	-141.5	-562.4
Other segments, gross expenses	-230.3	-110.1	-734.9
Rental expenses, intra-Group	50.3	33.7	153.0
Other segments, net expenses	-180.0	-76.4	-581.9
Operating expenses	-340.7	-217.9	-1,144.3
Gross profit	303.1	299.7	1,343.6
- of which Property management	288.0	283.8	1,221.1
- of which Other segments	15.1	15.9	122.5
Central administration	-12.8	-12.2	-57.9
Operating profit before changes in value	290.3	287.5	1,285.7
Changes in value, investment properties	227.0	-235.6	2,579.3
Operating profit or loss	517.3	51.9	3,865.0
Financial income and expense	-38.0	-33.6	-138.9
Profit or loss before tax	479.3	18.3	3,726.1
Tax	-99.3	-4.6	-770.8
Net profit or loss	380.0	13.7	2,955.3
Other comprehensive income	-	-	-
Total comprehensive income or loss for the period	380.0	13.7	2,955.3
Average number of outstanding shares	202,306,933	202,306,933	202,306,933
Net earnings for the period per share before and after dilution, SEK	1.88	0.07	14.61
1) For a breakdown of net revenue, see table on page 9.

REPORT ON FINANCIAL POSITION

GROUP, SEK m	March 31, 2022	March 31, 2021	December 31, 2021
Investment properties	49,205.8	45,551.5	48,789.6
Right of use assets	713.7	721.6	715.4
Other non-current assets	155.0	150.5	147.5
Total non-current assets	50,074.5	46,423.6	49,652.5
Current assets	1,058.7	1,378.6	1,446.3
Total assets	51,133.2	47,802.2	51,098.8
Equity	30,920.0	28,124.4	31,066.0
Non-current interest-bearing liabilities	6,500.0	6,300.0	7,000.0
Deferred tax liabilities	9,242.3	8,485.2	9,162.1
Non-current leasing liabilities	705.4	712.9	706.9
Other non-current liabilities	92.7	84.8	87.7
Other provisions	32.8	26.2	31.9
Total non-current liabilities	16,573.2	15,609.1	16,988.6
Current interest-bearing liabilities	2,600.0	2,500.0	2,200.0
Current leasing liabilities	9.1	9.3	9.4
Other liabilities	1,030.9	1,559.4	834.8
Total current liabilities	3,640.0	4,068.7	3,044.2
Total equity and liabilities	51,133.2	47,802.2	51,098.8

REPORT ON CHANGES IN EQUITY

	January March	January March	January December
GROUP, SEK m	2022	2021	2021
Equity, opening balance	31,066.0	28,616.5	28,616.5
Total comprehensive income or loss for the period	380.0	13.7	2,955.3
Dividend	-526.0	-505.8	-505.8
Equity, closing balance	30,920.0	28,124.4	31,066.0

REPORT ON CASH FLOWS

GROUP, SEK m	January March 2022	January March 2021	January December 2021
	479.3	18.3	3,726.1
Income before tax
Depreciation/impairments Changes in value, investment properties	20.6 -227.0	14.9 235.6	38.9 -2,579.3
Other changes	0.8	-0.2	5.3
Income tax paid	-19.1	-28.7	-110.3
Cash flow from current operations
before changes in working capital	254.6	239.9	1,080.7
Increase/decrease in inventory	-5.3	-40.7	-93.5
Increase/decrease in operating receivables	-199.3	-239.7	-4.5
Increase/decrease in operating liabilities	201.1	227.7	11.6
Cash flow from current operations	251.1	187.2	994.3
Acquisition of business	-	-39.8	-39.8
Investments in properties	-189.2	-150.6	-573.8
Investments in other non-current assets	-14.1	-0.3	-14.7
Cash flow from investments	-203.3	-190.7	-628.3
Loans raised	800.0	1,500.0	4,250.0
Amortization of loan debt	-900.0	-1,350.0	-3,700.0
Amortization of leasing debt	-2.4	-4.9	-11.8
Dividend paid	-526.0	-	-505.8
Cash flow from financing	-628.4	145.1	32.4
Cash flow for the period	-580.6	141.6	398.4
Cash and cash equivalents at the beginning of the period	1,182.0	783.6	783.6
Cash and cash equivalents at the period-end	601.4	925.2	1,182.0
Cash flow from current operations per share, SEK	1.24	0.93	4.91
Cash flow for the period per share, SEK	-2.87	0.70	1.97

SEGMENT REPORT – SUMMARY

The Group's operations are divided into three segments, property management, NK Retail and other operations. Other operations comprise
of Cecil Coworking (Business Area Stockholm) and NK e-commerce and the parking business in Parkaden AB (Business Area NK). The segments are divided into the business areas, which are in line with the Company's operational control system.
	Business Area Business Area Business Area Intra-Group
		Stockholm		NK	Gothenburg		elimination		Total
	Jan-Mar		Jan-Mar Jan-Mar	Jan-Mar	Jan-Mar	Jan-Mar Jan-Mar		Jan-Mar	Jan-Mar	Jan-Mar
GROUP, SEK m	2022	2021	2022	2021	2022	2021	2022	2021	2022	2021
Property management
Net revenue	307.9	279.1	116.7	102.5	74.4	77.4	-50.3	-33.7	448.7	425.3
Expenses	-72.5	-62.6	-60.3	-54.0	-27.9	-24.9			-160.7	-141.5
Gross profit property
management	235.4	216.5	56.4	48.5	46.5	52.5	-50.3	-33.7	288.0	283.8
NK Retail1)
Net revenue			164.1	74.4					164.1	74.4
Expenses			-196.6	-80.5			33.7	20.8	-162.9	-59.7
Gross profit NK Retail			-32.5	-6.1			33.7	20.8	1.2	14.7
Other operations2)
Net revenue	9.7	0.8	21.3	17.1					31.0	17.9
Expenses	-8.4	-5.0	-25.3	-24.6			16.6	12.9	-17.1	-16.7
Gross profit other operations	1.3	-4.2	-4.0	-7.5			16.6	12.9	13.9	1.2
Central administration									-12.8	-12.2
Changes in value,
investment properties									227.0	-235.6
Operating profit or loss									517.3	51.9
Financial income and
expense									-38.0	-33.6
Profit or loss before tax									479.3	18.3

1) NK Retail accessed the NK-operations on February 3, 2021.

2) Cecil Coworking opened on February 1, 2021.

BREAKDOWN OF NET REVENUE

		Group		Parent Company
	Jan-Mar	Jan-Mar	Jan-Dec	Jan-Mar	Jan-Mar	Jan-Dec
SEK m	2022	2021	2021	2022	2021	2021
Rent revenue	455.9	421.6	1,791.9	338.3	315.5	1,322.6
Service revenue	23.8	21.6	92.0	11.0	10.6	43.7
Sale of goods	164.1	74.4	604.0	-	-	-
Total net revenue	643.8	517.6	2,487.9	349.3	326.1	1,366.3

PERFORMANCE MEASURES

GROUP	March 31, 2022	March 31, 2021	Full year 2021
Property-related
Rentable floor space, 1,000 m2	386.4	386.7	386.5
Rental vacancy rate, %	9.7	8.3	7.3
Floor space vacancy rate, %	14.7	10.2	10.2
Fair value, SEK bn	49.2	45.6	48.8
Surplus ratio, %	67.8	69.2	71.0
Net operating income, SEK m	338.3	317.5	1,374.1
Financial
Return on equity, %	3.1	2.1	9.9
Return on capital employed, %	3.4	2.4	9.8
Equity ratio, %	60	59	61
Interest coverage ratio, multiple	7.6	8.6	9.3
Debt/equity ratio, multiple	0.3	0.3	0.3
Net loan-to-value ratio, properties, %	18.7	20.0	17.9
Gross margin, %	47.1	57.9	54.0
Data per share
Net earnings per share for the period, SEK	1.88	0.07	14.61
Equity, SEK	152.84	139.02	153.56
Properties, fair value, SEK	243.22	225.16	241.17
Number of outstanding shares, 1,000	202,307	202,307	202,307
Average number of outstanding shares, 1,000	202,307	202,307	202,307
Number of issued shares, 1,000	211,272	211,272	211,272
EPRA
EPRA Earnings (Earnings from property mgmt. after nom. tax), SEK m	233	233	1,032
EPRA EPS, SEK	1.15	1.15	5.10
EPRA NRV (Net reinstatement value), SEK m	40,278.8	36,723.3	40,340.0
EPRA NRV per share, SEK	199	182	199
EPRA NTA (Net tangible assets), SEK m	37,913.9	34,530.9	37,992.3
EPRA NTA per share, SEK	187	171	188
EPRA NDV (Net disposal value), SEK m	30,920.0	28,124.4	31,066.0
EPRA NDV per share, SEK	153	139	154
EPRA vacancy rate, %	6.7	7.3	5.9

PERFORMANCE MEASURES PER QUARTER

	Jan-Mar	Oct-Dec	Jul-Sep	Apr-Jun	Jan-Mar	Oct-Dec	Jul-Sep	Apr-Jun
GROUP	2022	2021	2021	2021	2021	2020	2020	2020
Share price, series A share, SEK	133.80	135.20	131.10	145.50	127.00	136.20	124.90	115.80
Net revenue, SEK m	644	703	632	635	518	463	434	409
Return on equity, %	3.1	9.8	5.3	4.5	2.1	-4.8	-2.8	-2.6
Return on equity, adjusted %	2.6	3.0	3.3	3.4	2.8	3.0	2.7	2.6
Equity ratio, %	60	61	60	60	59	60	61	62
Gross margin, %	47.1	48.7	55.0	55.7	57.9	64.6	70.5	68.2
Surplus ratio, %	67.8	68.2	73.5	72.8	69.2	67.7	71.0	68.4
Net operating income, SEK m	338.3	333.3	363.2	360.1	317.5	307.4	303.9	276.0
Net earnings per share for the
period, SEK	1.88	8.33	2.48	3.73	0.07	-2.27	0.38	-2.83
Equity per share, SEK	152.84	153.56	145.23	142.75	139.02	141.45	143.72	143.00
EPRA EPS, SEK	1.15	1.28	1.36	1.31	1.15	1.21	1.16	1.07
EPRA NRV per share, SEK	199	199	189	186	182	184	187	185
Cash flow per share from current
operations, SEK	1.24	1.47	1.37	1.15	0.93	1.37	1.46	1.42

ALTERNATIVE PERFORMANCE MEASURES

Hufvudstaden applies the European Securities and Markets Authority (ESMA) Guidelines on Alternative Performance Measures. According to these guidelines, alternative performance measures refer to a financial measurement of earnings performance, financial position, financial result or cash flow not defined according to IFRS or the Swedish Annual Accounts Act. Hufvudstaden is also a member of the European Public Real Estate Associations (EPRA) and reports financial key figures defined according to EPRA. Below is the derivation of alternative performance measures. For definitions, see page 13.

	March 31,	March 31,	Full year
SEK m	2022	2021	2021
Net asset value, see page 5-6.
Net debt
Non-current interest-bearing liabilities	6,500	6,300	7,000
Non-current leasing liabilities	705	713	707
Current interest-bearing liabilities	2,600	2,500	2,200
Current lease liabilities	9	9	9
Decided dividend1)	-	506	-
Cash and cash equivalents	-601	-925	-1,182
Net debt	9,213	9,103	8,734
Equity ratio
Equity	30,920	28,124	31,066
Total assets	51,133	47,802	51,099
Equity ratio, %	60	59	61
Net loan-to-value ratio, properties
Net debt	9,213	9,103	8,734
Carrying amount, properties	49,206	45,552	48,790
Net loan-to-value ratio, properties, %	18.7	20.0	17.9
Interest coverage ratio
Income before tax	1,236 2)	780 2)	3,726
Reversal of changes in value	-227	236	-2,579
Interest expense	152 2)	134 2)	139
Total	1,161	1,150	1,286
Interest expense	152 2)	134 2)	139
Interest coverage ratio, multiple	7.6	8.6	9.3
EPRA Earnings (Earnings from property mgmt. after nom. tax)
Operating profit or loss before changes in value	290	288	1,286
Financial income and expense	-38	-34	-139
Earnings from property management	252	254	1,147
Current tax, earnings from property management	-19	-21	-115
EPRA Earnings (Earnings from property mgmt. after nom. tax)	233	233	1,032
Average number of outstanding shares, million	202.3	202.3	202.3
EPRA EPS, SEK	1.15	1.15	5.10
EPRA vacancy rate, %
Rental value for vacant space, in total	214	176	154
Rental value for vacant space, project	66	20	29
Total rental value	2,220	2,117	2,095
Vacancy rate, in total, %	9.7	8.3	7.3
Vacancy rate, project, %	3.0	1.0	1.4
EPRA vacancy rate, %	6.7	7.3	5.9

1) At the Annual General Meeting on March 25, 2021, the Meeting decided to distribute SEK 2.50 per share to the shareholders, corre-

sponding to a total of SEK 506 million. The payment date for the dividend was April 1, 2021.

2) Recalculated 12 months.

PARENT COMPANY

RESULTS AND FINANCIAL POSITION

Net revenue amounted to SEK 349.3 million (326.1). Operating expenses amounted to SEK -195.0 million (-175.7). Gross profit was SEK 154.3 million (150.4). The increase was attributable primarily to reduced rent reductions for stores and restaurants, indexation and higher gross rents for renegotiations and new leases. The property tax has increased as a result of provisions for new property tax assessments and the cost has mainly been passed on to the tenants. Costs have also been affected by higher depreciation. Net financial income and expense was SEK - 30.3 million (-43.1).

Cash and cash equivalents at the end of the period amounted to SEK 559.4 million (910.3). Investments in properties, intangible assets, equipment and shares in subsidiaries amounted to SEK 90.0 million (27.7).

MATERIAL RISKS AND UNCERTAINTIES

The Company is mainly exposed to financing, interest and credit risks. In addition to what is stated for the Company on page 6, no other material risks or uncertainties have been identified than those described in the 2021 Annual and Sustainability Report.

MATERIAL TRANSACTIONS WITH RELATED PARTIES

No material transactions with related parties took place during the period.

ACCOUNTING POLICIES

The parent company applies RFR2 Accounting for Legal Entities and the Swedish Annual Accounts Act. This interim report for the parent company has been prepared in accordance with Section 9 of the Annual Accounts Act, Interim Financial Statements. The accounting policies and basis for calculations remain unchanged from the 2021 Annual and Sustainability Report.

INCOME STATEMENTS – SUMMARY

	January	January	January
PARENT COMPANY, SEK m	March 2022	March 2021	December 2021
Net revenue1)	349.3	326.1	1,366.3
Operating expenses	-195.0	-175.7	-692.3
Gross profit	154.3	150.4	674.0
Central administration	-12.8	-12.2	-57.8
Operating profit	141.5	138.2	616.2
Impairment of shares in Group companies	-	-15.1	-51.3
Other financial income and expense	-30.3	-28.0	12.4
Profit after financial items	111.2	95.1	577.3
Appropriations	-	-	-110.3
Profit before tax	111.2	95.1	467.0
Tax	-23.1	-23.1	-105.8
Profit for the period	88.1	72.0	361.2
Statement of comprehensive income, SEK m
Profit for the period	88.1	72.0	361.2
Other comprehensive income	-	-	-
Total comprehensive income for the period	88.1	72.0	361.2

1) For a breakdown of net revenue, see table on page 9.

BALANCE SHEETS – SUMMARY

	March 31,	March 31,	December 31,
PARENT COMPANY, SEK m	2022	2021	2021
Investment properties	8,302.3	8,253.7	8,262.2
Other non-current assets	6,089.9	2,676.8	6,089.7
Total non-current assets	14,392.2	10,930.5	14,351.9
Current assets	1,003.8	4,390.7	1,386.3
Total assets	15,396.0	15,321.2	15,738.2
Restricted equity	1,978.7	1,978.7	1,978.7
Non-restricted equity	2,172.5	2,321.2	2,610.4
Total equity	4,151.2	4,299.9	4,589.1
Untaxed reserves	52.8	38.7	52.8
Provisions	909.5	901.2	907.8
Non-current liabilities	6,587.0	6,377.1	7,082.0
Current liabilities	3,695.5	3,704.3	3,106.5
Total equity and liabilities	15,396.0	15,321.2	15,738.2

Stockholm, May 5, 2022

Anders Nygren President

This Interim Report has not been the subject of an examination by the Company's auditor.

DEFINITIONS AND GLOSSARY

Finance

Capital employed. Total assets reduced by non-interestbearing liabilities and deferred tax liabilities.

Central administration. Costs for Group management and Group staff functions, costs for maintaining the Company's stock exchange listing, and other costs common to the Company.

Debt/equity ratio. Net debt in relation to equity at the end of the period.

EPRA. European Public Real Estate Association. An interest organization for listed property companies in Europe.

EPRA Earnings - Earnings from property management after nominal tax. Operating profit or loss before items affecting comparability and changes in value minus financial income and expense and computed current tax, excluding a carryforward of unutilized tax losses. The tax deducted has been calculated with account taken of tax-deductible depreciation and investments.

EPRA NDV - Net Disposal Value. Shareholders' equity according to the balance sheet.

EPRA NRV - Net Reinstatement Value. Shareholders' equity according to the balance sheet after reversal of interest rate derivatives and deferred tax according to the balance sheet, excluding deferred tax on assets and/or liabilities other than investment properties and right-of-use assets attributable to ground rents.

EPRA NTA - Net Tangible Assets. Shareholders' equity according to the balance sheet after reversal of derivative instruments and deduction for intangible assets, adjusted for actual deferred tax instead of nominal deferred tax.

Equity ratio. Equity at the end of the period in relation to total assets.

Gross margin. Gross profit in relation to net revenue.

Interest coverage ratio. Profit or loss after net financial income/expense, excluding items affecting comparability and changes in value, plus interest expense in relation to interest expense. In the interim accounts, net profit or loss after net financial income/expense, excluding items affecting comparability and changes in value, as well as interest expense, have been recalculated on a full-year basis with no adjustments for seasonal variations that normally arise in the company's operations.

Items affecting comparability. Items of a non-recurring nature and which make it difficult to compare between two given periods.

MTN programme. Medium Term Note is a bond programme with a term of 1-15 years.

Net debt. Interest-bearing liabilities including lease liabilities and decided dividend minus current investments and cash and cash equivalents.

Net loan-to-value ratio, properties. Net debt in relation to the carrying amount of properties.

Profit or loss from property management. Operating profit or loss before items affecting comparability and changes in value minus financial income and expense.

Return on capital employed. Profit or loss before tax plus interest expense in relation to average capital employed. In the interim accounts, the return has been recalculated on a full-year basis with no adjustments for seasonal variations that normally arise in the Company's operations and with

the exception of items affecting comparability and changes in value.

Return on equity. Net profit or loss in relation to average equity. In the interim accounts, the return has been recalculated on a full-year basis with no adjustments for seasonal variations that normally arise in the Company's operations and with the exception of items affecting comparability and changes in value.

Return on equity, adjusted. Net profit or loss, excluding changes in value, in relation to average equity. In the interim accounts, the return has been recalculated on a fullyear basis with no adjustments for seasonal variations that normally arise in operations and with the exception of items affecting comparability and changes in value.

Tax. Total tax for the Group comprises both current tax and deferred tax.

Shares

Average number of outstanding shares. Weighted average number of outstanding shares during a defined period.

Earnings per share. Net profit or loss for the period in relation to the average number of outstanding shares during the period.

EPRA EPS. EPRA Earnings in relation to the average number of outstanding shares during the period.

Equity per share. Equity in relation to the number of outstanding shares at the end of the period.

Property

Annual rent. Gross rent at the end of the period, including supplements, calculated on an annual basis. Vacant premises are reported at the Estimated Rental Value (ERV).

Bibliotekstan. The area between Norrmalmstorg, Birger Jarlsgatan, Stureplan, and Norrlandsgatan, and which contains stores with high-class brands, restaurants and cafes.

EPRA vacancy rate. Estimated Market Rental Value (ERV) of vacant space divided by the ERV of all property holdings. Current development projects are excluded.

Fair value. The estimated market value of the properties.

Floor space vacancy rate. Vacant floor space in square metres in relation to the total rentable floor space.

Fredstan. The area around Fredsgatan between Brunnsparken and Trädgårdsföreningen, where the vision is to offer a unique range of stores, restaurants, and cultural events and facilities.

Market value, properties. The amount for which the properties could be exchanged between knowledgeable, willing parties in an arm's length transaction. In accounting terms, this is known as "fair value".

Net operating income. Net revenue from property management including intra-Group rent revenue less costs for property management.

Property tax supplement. Property tax payments received from tenants.

Rental vacancy rate. Estimated Market Rental Value (ERV) of vacant space divided by the ERV of all property holdings.

Surplus ratio. Net operating income as a percentage of net revenue from property management including intra-Group rent revenue.

In some cases, there has been rounding off, which means the tables and calculations do not always tally.

This document is in all respects a translation of the original Interim Report in Swedish. In the event of any differences between this translation and the Swedish original, the latter shall prevail.

Hufvudstaden

Hufvudstaden was founded in 1915 and rapidly became one of the leading property companies in Sweden. Today it is one of the country's strongest brands in the property sector. The brand is well known and represents high quality, good service, and long-term thinking in the management and development of the Company's commercial properties in the most attractive business locations in Stockholm and Gothenburg.

Purpose

Shaping the city of the future together, since 1915.

Vision

Hufvudstaden will be consistently perceived as, and prove to be, the most attractive property company in Sweden.

Business concept

With properties in central Stockholm and central Gothenburg, Hufvudstaden will offer successful companies high-quality office and retail premises in attractive marketplaces.

Financial objectives

• Hufvudstaden shares will have good dividend growth over time, and the dividend will amount to more than half the net profit from current operations.
• The equity ratio will be at least 40 per cent over time.

Operating objectives

Hufvudstaden will:

• gradually increase profit from current operations.
• have the most satisfied customers in the industry.
• have the most developed property holdings in the industry.
• have the most professional employees in the industry, with firm commitment to the customer, good business acumen and professional knowhow.

Strategies to achieve the objectives

Customer focus. Hufvudstaden will work in close cooperation with its customers and contribute to continuously improving their business potential and competitiveness.

Quality. Systematic quality management will ensure the highest possible level of quality in all of the company's products and services.

Competence development. Systematic development of the knowledge and skills of personnel will be ensured, with focus on professional know-how and values.

Business development. Active business development and adaptation to the digitalization of society will create added value in the property holdings.

Sustainability. Hufvudstaden will work actively and in the long term to ensure financial, environmental and social sustainability.

Visiting address: Regeringsgatan 38 Telephone: +46 8-762 90 00 Email: info@hufvudstaden.se Website: www.hufvudstaden.se Company registration number: 556012-8240 Registered office: Stockholm