Wallenstam — Annual Report 2020

Mar 23, 2021

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This is Wallenstam 1

Contents

Strategic Direction

Strategic Direction
This is how we create value	2
Business plan 2019–2023	4
Guiding principle Customer	6
Guiding principle Employee	7
Guiding principle Environment	8
Comments by the CEO	9
Comments by the Chairman	12
Board of Directors	14
Group Management	16
Wallenstam and Covid-19	18
The Wallenstam share	20
Investing in Wallenstam	24
Financial strategy	26
Responsible enterprise	29
Risk management and opportunities	36

This is Wallenstam

Vision

Business concept

Wallenstam shall be the natural choice of people and companies for housing and premises.

We develop and manage people’s homes and workplaces based on a high level of service and long-term sustain - ability in selected metropolitan areas.

Operations and Markets

Operations and Markets
Organization and employees	42
Market outlook	45
Joint owner in Convendum and Colive	49
Property management	50
Value of the properties	55
Value-creating construction	58
We are building here	64
Five-year summary	66

Goal

During our five-year business plan, to achieve an increase in net asset value of SEK 40 per share through 2023.

Core values

Respect, commitment and progress.

Financial Reports

Financial Reports
How to read our income statement	68
Administration report	69
Consolidated accounts	74
Group accounting principles and notes	78
Parent company accounts	114
Parent company accounting principles
and notes	118
Auditor’s report	131
Corporate governance report	135

Property List

Property List
Gothenburg Business Area	142
Stockholm Business Area	146
Completed new construction,
acquisitions and sales	149
Wind power	149

Other

Other
Wallenstam’s GRI reporting	150
Annual General Meeting 2021	153
Glossary	153
Defnitions	see cover
Calendar	see cover

Wallenstam’s statutory sustainability report is found on the following pages: business model pages 2–4, environmental questions pages 8, 29–35, 41 and 150–152, social conditions and personnel-related questions pages 7, 29–37, 42–44 and 150–152, respect for human rights pages 29–35 and 151–152, anti-corruption pages 29–31, 33, 38 and 152 as well as diversity in the Board pages 44 and 136.

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Kv. Rosengången in
Mölnlycke Fabriker,
Härryda.
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SEK 2,131 million RENTAL INCOME

SEK 1,131 million INCOME FROM PROPERTY MANAGEMENT

SEK 853 million CHANGES IN VALUE NEW CONSTRUCTION

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DISTRIBUTION
FLOOR SPACE
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UPPSALA 3% GOTHENBURG Wallenstam’s operations are concentrated in Gothenburg, Stockholm and Uppsala. 61% STOCKHOLM 36%

98% OCCUPANCY RATE

SEK 58 billion PROPERTY VALUE

42%

EQUITY/ASSETS RATIO

SEK 98.30

NET ASSET VALUE PER SHARE

DISTRIBUTION RENTAL VALUE

Other 1% Garage 3% Industry/warehouse 3% Education/health care 5% Cinema 1% Restaurant 4% Retail 8% Residential 50% Offices 25%

THIS IS WALLENSTAM 1

1 Our resources

This is how we create value

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2 Our operations and business model
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Financial capital

SEK 26 billion in capital from shareholders and generated profits that remain in the company and SEK 27 billion from external lenders.

Produced capital

More than 200 properties – residential properties in attractive locations in the growth regions of Gothenburg, Stockholm and Uppsala as well as commercial properties in Gothenburg inner city. 66 wind turbines from Jämtland in the north to Skåne in the south, producing renewable energy.

Human capital

Approximately 270 dedicated and knowledgeable employees and combined competencies through partners within management, service and construction.

Social and relationship capital

All customers that live in our approximately 10,000 rental apartments, or that work in the offices, shops etc., which represent more than 500,000 sq m of commercial floor space. In addition, relationships with financiers, partners, municipalities and local communities.

Intellectual capital

About 17,000 potential apartments in the project portfolio which can become future homes for families through our combined experience and processes concerning management, construction and urban development with dialogue and collaboration.

Natural capital

Land, energy and building materials such as wood, stone and metal provide the basis for our construction operations.

226

PROPERTIES

Wallenstam has 1.2 million sq m of lettable area, of which just over 500,000 sq m is commercial floor space.

Business process

Wallenstam builds, develops and manages properties and areas based on the needs of people and society, and according to the wishes and requirements of customers and shareholders. We create value growth through construction, development and management with a high level of service and long-term sustainability. Profits are reinvested and used to further develop the business. Shareholders receive a share of the profits in the form of dividends.

Efficient management and development

Our properties and public areas adjacent to the properties are developed and refined based on maintenance plans and customer needs and wishes. Safety, comfort and long-term profitability are key words when we, for example, modernize the courtyards of residential buildings, carry out optimized operations projects, or when we develop inner city environments to contribute to meeting places and a city pulse. Through our own wind power production, we are self-sufficient in renewable energy.

Successful letting organization

With good knowledge of the local market and its needs and great commitment in taking care of customer relationships, a strong basis is created for maintaining a uniform and high occupancy rate in our commercial holdings, where we take a holistic approach to the area. The residential holdings are fully let and in line with the completion of our new construction projects, letting occurs of all new apartments — a large number every year.

Cost-efficient construction

We mainly build rental apartments for our own management, but also a smaller number of co-op apartments and commercial properties. Our process and flexible business model, makes it possible to complete our new construction projects in both economic upturns and downturns. We work continually on acquiring land and seek land allocations in order to continually replenish our project portfolio.

2 THIS IS HOW WE CREATE VALUE

We create value growth through construction, development and management with a high level of service and long-term sustainability.

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NEED PROFIT
Build and buy Manage and develop
VALUE GROWTH
Dividend
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3 Created value for our stakeholders

Owners

• » Stable and safe investment

• » Value growth

• » Share price trend

Customers

• » Functional, safe and qualitative homes and well-adapted, flexible working environments

Society and the city

• » Regional development through more housing and premises for people and companies

• » More attractive, lively cities with pleasant meeting places and developed infrastructure and service

• » Tax revenue and jobs

• » Long-term engagement in the local community and sponsorship

• » Realized entrepreneurial and residential dreams

• » Housing free from financial risk

• » Simplified everyday life – at home and at work

Employees

• » Jobs with secure and stable employer

• » Personal and professional development » Remuneration and benefits

Environment

• » More renewable energy

• » Lower environmental impact by reduction of energy use, carbon emissions and water consumption in our properties, and during construction

• » The possibility of charging electric vehicles, solutions for sorting at source, and initiatives to promote cycling etc.

Suppliers, partners and lenders

• » Jobs

• » Interest payments

• » Long-term collaborative relationships

THIS IS HOW WE CREATE VALUE 3

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Business plan 2019–2023

GOAL 2023

To achieve an increase in net asset value of SEK 40 per share he goal to achieve an increase value growth is created by successful letin net asset value of SEK 40 per ting, efficient management, value-creating share during the period is equivainvestments, cost-efficient new construction lent to an increase of 50 percent and strong business operations. T starting from October 1, 2018. As of September 30, 2018, the Group’s During the business plan 2023, Wallenstam net asset value amounted to SEK 25,608 is continuing to work in the growth regions of million, which is equivalent to SEK 79.20 Gothenburg, Stockholm and Uppsala. We are per share and is the starting point for the striving to become even more service-orientmeasurement. On December 31, 2020, the ed, productive and efficient, so that we can net asset value amounted to SEK 31,746 create even more value for our shareholdmillion, which corresponds to SEK 98.30 ers, employees, customers and society as a per share. This means that we have generwhole. During the business plan, the equity/ ated SEK 19.10 per share to date. Net asset assets ratio shall not fall below 30 percent.

value growth is created by successful letting, efficient management, value-creating investments, cost-efficient new construction and strong business operations.

During the business plan 2023, Wallenstam is continuing to work in the growth regions of Gothenburg, Stockholm and Uppsala. We are striving to become even more service-oriented, productive and efficient, so that we can create even more value for our shareholders, employees, customers and society as a whole. During the business plan, the equity/ assets ratio shall not fall below 30 percent.

Increase in net asset value, SEK/share

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40
30
19.10
20
12.10
10
3.10
0
Q4 2018 2019 2020 2021 2022 2023
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4 BUSINESS PLAN 2019–2023

Net asset value growth is created by successful letting, efficient management, value-creating investments, cost-efficient new construction and strong business operations.

Guiding principles

Our guiding principles aim to clarify important focus areas in our operations.

CUSTOMER

We shall exceed customer expectations and improve the overall impression of Wallenstam every year through attractive apartments and premises as well as good service. read more on page 6

EMPLOYEE

Through our strong corporate culture, we shall be an attractive employer and improve our Engagement Index score every year. read more on page 7

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ENVIRONMENT
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We shall reduce our environmental impact every year, through initiatives within the focus areas energy, transports and resources. read more on page 8

Umami Park, Sundbyberg.

BUSINESS PLAN 2019–2023 5

GUIDING PRINCIPLE CUSTOMER

”We shall exceed customer expectations and improve the overall impression of Wallenstam every year through attractive apartments and premises as well as good service.”

Our customers are at the center of our business and it is important for us to be able to offer the right product and service to our residential and commercial tenants. Satisfied customers that are happy are loyal and rent longer with us, which among other things, contributes to lower relocations, less wear and tear and increased security. A satisfied customer is also a good ambassador for us as a company.

Close contact with our customers

Through telephone calls, e-mails and personal contacts, we meet our customers every day, including through our customer service that receives reports of defects and viewpoints. This year, our customer contacts have largely been dominated by the Covid-19 pandemic, for example many meetings, occupation-related meetings and events were cancelled or were conducted digitally. We have also changed over to digital apartment viewings and signing of contracts.

During 2020, we carried out digital training on how we respond to our customers through calls and personal meetings. All employees and Wallenstam Partners who have a lot of customer contact in their work, will have the opportunity to advance their knowledge and skills regarding the right response, communication and tonality.

It has been important for us to be extra available for our customers, and we have expanded through the possibility of contacting our customer service via a chat function. In addition, all our residential tenants have now gained access to our Wallenstam App where, among other things, they can communicate with us and with their neighbors. On the commercial side, account managers have had extra focus on the relationship with the customers operating in exposed sectors, in order to find solutions during the tough time that many are going through.

Good ratings from our customers

We conduct regular CSI (Customer Satisfaction Index) surveys where we ask our customers what they think about our service, our product and our image. The outcome, which is summarized in a service index, showed that we obtained very high ratings in a number of areas. The availability and response from our customer service is top class, our capable partners obtained high ratings in relation to property maintenance in our properties and customers

79.9% 82.4% SERVICE INDEX SERVICE INDEX RESIDENTIAL COMMERCIAL PREMISES

In our latest major survey of our entire holdings, we obtained a service index rating of almost 80 percent among our residential tenants and just over 82 percent among our commercial tenants. The service index is a weighting of the tenants’ ratings with regard to security, response and service. During 2021, we will again conduct a survey in the entire holdings.

are satisfied with their apartments and their premises, for example with regard to the design and standard.

Based on the results from our surveys, we have identified areas for improvement that we continued to work on during the year. The action plans relate for example to operation, such as ventilation and indoor climate, as well as cleaning and maintenance in our properties, but also targeted projects that aim to make it easier for customers to act in an environmentallyfriendly way. This can, for example, involve sorting at source or recharging possibilities for electric bikes. We are working to simplify and improve the information to our tenants so that it should be uniform and easy to understand. We are also looking specifically at the process around handling cases of reports of defects, so that our customers can obtain even quicker help with their cases. This work occurs on a company-wide basis and is led by a process manager with the entire customer journey in focus, from letting and occupation, information and contact with us as a landlord to termination and relocation.

During 2020, we conducted targeted surveys among the tenants who moved into our new production. The overall outcome from these surveys, shows that the new tenants are particularly satisfied with the design and equipment in their kitchen and bathroom and also with the information and response from Wallenstam. Improvements are requested mainly regarding the design of the outdoor environment. We take this experience on board in order to be able to improve the customer experience going forward.

6 GUIDING PRINCIPLE CUSTOMER

GUIDING PRINCIPLE EMPLOYEE

”Through our strong corporate culture, we shall be an attractive employer and improve our Engagement Index score every year.”

Knowledgeable and dedicated employees are one of our success factors as a company and the most important resource for our operations. Dedicated employees ensure more satisfied tenants and more efficient operations.

Familial corporate culture

An enterprising attitude, stability, purposefulness, security, togetherness and equality are some of the qualities that our corporate culture is based on and that are connected to our core values – respect, commitment and progress. Wallenstam’s values do not just reside in the walls of the company, but are created by all the employees together. Therefore it is important to continue the work together on strengthening our value platform and the familial corporate culture that we have at Wallenstam. It is particularly important to ensure this during new recruitments.

Measurements of Engagement Index score

The Engagement Index shows how engaged the employees are, and to what extent the employees feel satisfied, take responsibility for and feel involved in the company’s mission – our goal, our business concept and our vision. During the year, we completed the work on deciding how the follow-up should be made and how the measurements should be carried out. The first survey, where we asked the question “Would you recommend Wallenstam as an employer to a friend or acquaintance?” showed an Engagement Index score of 65. We want to improve our Engagement Index score every year, and this result provides a starting point for the coming years.

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65

ENGAGEMENT INDEX SCORE

A value over zero shows that there are more ambassadors than detractors and a value between 20 and 30 is considered to be very good. Of the 199 people who responded to the survey, 71 percent were classified as ambassadors for the company.

During the pandemic, the engagement has been demonstrated extra clearly – engagement for our customers, for each other and for the company. The employees have really had the ability to adapt rapidly to the changed conditions and to take on duties outside of their regular roles.

Many want to work at Wallenstam

How we are perceived as a company by potential, current and previous employees is important for attracting and retaining dedicated employees. During 2020, we mainly focused on developing and optimizing the processes relating to attracting and recruiting employees, among other ways, by quality-assuring the interview process and candidate experience. Early in the year, many recruitments were paused due to Covid-19. After the summer, recruitments resumed and about 20 positions were filled during the fall. The interest in working at Wallenstam is strong, which is reflected in a large number of qualified applications for the advertised positions.

Attract Recruit Introduce Develop Terminate

Read more about Wallenstam’s organization and how we work with personnel-related issues on page 42.

GUIDING PRINCIPLE EMPLOYEE 7

GUIDING PRINCIPLE ENVIRONMENT

”We shall reduce our environmental impact every year, through initiatives within the focus areas energy, transports and resources.”

The property sector has a significant impact on the environment and climate. As a large property owner and construction company, Wallenstam wants to take responsibility for this impact.

Within the energy focus area, we are a leader today because we are self-sufficient in renewable energy from our wind turbines since 2013. We have also worked for many years on improving energy efficiency in our properties. In addition to this, we have also started to install solar cells in our properties. The term

resources is broad and we have currently been concentrating on the aspects waste and material use. As a first step in the work in the transports area, the focus has been on the trips that the company’s employees make.

In 2020, Wallenstam took a decision on four climate targets that aim to reduce the company’s CO2 emissions. The goals will apply until 2023, when the present business plan expires.

CLIMATE TARGETS 2023

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Reduce CO2 emissions from the construction operations by 10 percent per square meter. Wallenstam has worked for a long time on improving the efficiency within its construction operations. The work on improving efficiency will now also focus on CO2 emissions. This means, among other things, further work with choice of materials, optimization of materials, recycling of materials and a review of construction transports.

Reduce CO2 emissions from the properties’ energy consumption by 15 percent per heated square meter. Further optimization work and investments in the properties’ building shell will lead to more efficient energy use. The properties will also be supplemented with solar cell units where it is practically possible. Taken together, these initiatives will lead to reduced CO2 emissions.

Reduce the properties’ residual waste by 10 percent per square meter. To improve the possibility for our tenants to sort their waste, environmental rooms will be supplemented with additional sorting units when required. By creating a change in behavior and promoting the willingness to sort, the spread of information about the climate benefit is an important factor in reducing residual waste. Reducing residual waste means that less waste is incinerated with reduced CO2 emissions as a positive effect.

Carry out business trips using electric car, train or via completely carbon-neutral and biofuelbased air travel. Wallenstam enables climate-neutral business trips by providing a car pool that consists exclusively of electric cars. For longer trips, train should be chosen in the first instance and in those cases where air travel is necessary, it should be carried out in a completely carbon-neutral way and be biofuel-based.

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Garage with solar cells in the façade

In Mölnlycke Fabriker, the area that is in the process of taking shape in a genuine industrial environment just outside of Gothenburg, Wallenstam is building a garage with 1,500 solar cell modules in the façade. The semi-transparent solar cell modules that will be used in the construction will enable the entry of light, airflow and will create a façade that changes in shades of blue, green, orange and terracotta red. They will produce energy for the garage’s lighting, charging stations for electric cars and in addition, they will also generate renewable energy for the electricity grid. For the future tenants of the more than 600 apartments in the area, the garage will become the central car park.

Wallenstam’s sustainability work covers more than climate and environmental issues – read about how we work with the UN’s global sustainable development goals on page 29.

8 GUIDING PRINCIPLE ENVIRONMENT

30 years AS CEO OF WALLENSTAM

Comments by the CEO

he year we have now left behind us was a very unusual one. 2020 began in the same fantastic way as most years, with new opportunities, a lot of energy and a strong belief in the T future. Quite soon, many of us realized that 2020 would be anything but normal, and in March when Covid-19 was classified as a pandemic, life and conditions changed for us, the business community and for society in a dramatic, almost surreal way.

from both the property crisis in the 1990s and the financial crisis in 2008-2009, primarily because the pandemic is claiming lives and many people are being affected by it in a hard and unforgiving way. This crisis has also meant that we have changed our way of living in a short time, which has also had consequences in many other respects. Some businesses have been very severely affected and are fighting for their survival. However, there are also sectors and businesses that have benefited, which are growing and thriving due to the new needs arising from our changing lifestyles.

An unusual time

I have had the privilege of being the CEO of Wallenstam for 30 years, and have experienced different economic cycles during this period. The current crisis differs somewhat

Successful business model even in a crisis

For Wallenstam, I can once again confirm that we have a business model that I feel very confident about, where we

COMMENTS BY THE CEO 9

Despite the pandemic and its effects, we have managed to achieve higher income from property management than the previous year. This, I want to suggest, is a result of all the work that my fantastic co-workers have put in.

as a company create value even in such uncertain times. During the year, we continued to provide apartments and let commercial floor space, primarily offices, and both of these markets have been stable despite the turbulence in society. However, businesses that depend on visitors such as restaurants and shops have faced a very tough time. We have done what we could to help them maintain their businesses for when society opens up again. We have given many of our tenants discounts both within the framework of the government rent support, and also helped, for example by purchasing a total of 15,000 lunches from our restaurant tenants, which we delivered to the needy in society.

Wallenstam during the pandemic

Apart from the fact that we made efforts with purchases and discounts to support our customers, the pandemic has of course also affected our business and our working methods in different ways. When it comes to residential lettings, we have changed and developed our routines, for instance with digital viewings and signing of contracts, which has functioned very well. On the commercial side, there have also been many challenges arising from the pandemic. The properties’ attractive locations, great know-how and engagement have led to several new commercial lets also during 2020. We are also sensitive to changing needs and have a thorough program where we reconstruct some second floors containing retail space, into offices for example, and stores with less favorable trading locations can be converted into, e.g. housing or other activities.

Our ongoing production has worked well, in fact above expectations, without significant delays or delivery problems. However, the municipalities’ permit processes such as consultation and building permits have been greatly impacted by the pandemic. For us, this has meant that project starts have been delayed. No projects have been cancelled, but they have been brought forward. I hope that next year we will return to the normal number of construction starts as planned during the business plan. Today we have more than 130,000 people in our own housing queue, which is a fantastic basis for continuing on our chosen path of developing projects and building new qualitative homes in a cost-efficient way.

Now practically all employees at Wallenstam are working from home, something that I must admit I was a bit hesitant about before the pandemic. What I have seen during this year is that our processes are functioning, and everyone is working, cooperating and delivering more or a bit more depending on their different circumstances. However, I can state that the office as a social meeting place has probably become even more important now, than before

the pandemic – and this is something we are also noticing among our commercial tenants.

Income from property management and net asset value are increasing

Despite the pandemic and its effects, we have managed to achieve higher income from property management than the previous year. This, I want to suggest, is a result of all the work that my fantastic co-workers have put in, where everyone with great commitment contributed and really battled during these very special circumstances.

We also advanced a bit further on our journey towards the goal of achieving an increase in net asset value of SEK 40 per share through 2023. So far in our five-year business plan, we have generated just over SEK 19, and I am very satisfied with this!

Value growth from new construction is increasing

Our business concept involving investments in new

construction is generating positive changes in value on an ever-greater scale. In 2020, two thirds of the total change in value came from new production. It is primarily changes in net operating income that have generated the increase in value in the existing holdings.

We have also had the opportunity to further strengthen our project portfolio for future new production, and during 2020 we purchased land for future new production with construction starts planned both in the near future and with a longer planning horizon. The project portfolio now includes around 17,000 future possible apartments and in total we have around SEK 7 billion in ongoing and future projects and land, which do not generate any cash flow today, but will do so in the future. Overall, we expect to invest about SEK 15 billion in construction of new apartments during the business plan.

We have a stable foundation with an equity/assets ratio of 42 percent and a loan-to-value ratio of 46 percent. During the year and especially during the first six months, there was some turbulence in the financial market, which meant that our financing costs increased temporarily during this period. We have chosen to refrain from rating the company and mainly prefer bank financing, which feels particularly reassuring in times like these.

Record electricity production from our wind turbines

Sustainability work is important for Wallenstam, and we want to contribute to a better society in different ways. The fact that we create new apartments every year is perhaps our biggest sustainability initiative as a company. But we are also focusing on the climate issue, among other ways, through the four climate targets in the current business plan 2023, that we launched during the year.

10 COMMENTS BY THE CEO

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"During 2020, we carried out a change
of our logo, which was launched in
connection with our 75 [th] anniversary in
November 2019. A very nice surprise
was that our new logo and visual identity
won the Swedish Design Award recently
in January!"
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• » Wallenstam shall reduce CO2 emissions from its construction operations by 10 percent per square meter.

• » Wallenstam shall reduce CO2 emissions from the properties’ energy consumption by 15 percent per heated square meter.

• » Wallenstam shall reduce the properties’ residual waste by 10 percent per square meter.

• » Wallenstam’s business trips shall be carried out using electric car, train or completely carbon-neutral and biofuel-based air travel.

In addition, we have decided that all our bonds shall be green bonds.

Since 2013 we have also been self-sufficient in renewable energy through wind power and we have now set a new record in our own electricity production. Our 66 wind turbines produced a total of 417 GWh during 2020! This is equivalent to the annual consumption of just over 20,000 houses or about 170,000 apartments.

Wallenstam has already signed the UN’s Global Compact, which means that we support and work on the basis of the ten principles in the areas of human rights, labor, the precautionary approach, anti-corruption and taking of responsibility in relation to environmental issues.

Of course, it feels really great that our logo featuring the ant, which has now gained a modern look, is being recognized in this way! The ant as a symbol has been a natural part of the brand since the 1950s and symbolizes cooperation, endurance, strength and the art of building apartment blocks in carefully selected locations – qualities that are highly valued at Wallenstam.

Looking ahead to continued successful development

A big thank you to all employees, the Board, tenants, suppliers and shareholders who have accompanied us all the way here! Now we are looking ahead, and can detect light at the end of the tunnel. Hopefully, society and all of us can soon return to a more normal life, where we can once again meet colleagues, relatives and friends, shop, travel, socialize and eat in restaurants.

I see a fantastic future for Wallenstam. Our business concept has been shown to work well during the pandemic, and works even better in more normal times. We have a strong base, and we will continue to refine our offices, develop our ground floors and build even more apartments. Our results during 2020 have made it even clearer that our business model and strategy for the future are totally right for a continued successful development of the company.

Gold in the Swedish Design Award

During 2020, we carried out a change of our logo, which was launched in connection with our 75[th] anniversary in November 2019. Stationery, envelopes and printed material have been redone, new signs have been put up on façades and in entrances. A very nice surprise was that our new logo and visual identity won the Swedish Design Award recently in January!

Hans Wallenstam, CEO

COMMENTS BY THE CEO 11

Comments by the Chairman

here are many heroes in our society in a year like 2020, individuals as well as organizations and companies who in different ways have helped to mitigate the effects of the pandemic. T Wallenstam in various ways has supported tenants that were affected as well as aid organizations, which in turn have worked to help the most vulnerable. Meanwhile, Wallenstam has secured its own business in order to be able to continue building, developing and managing homes and workplaces for many people. As a company, we are very proud of the fact that Wallenstam has managed to complete more than 1,300 new high quality homes during the year. Of course, there have been many times where it has been challenging in relation to both materials and people in the construction process but Wallenstam’s flexible and experienced organization has succeeded with all its construction during the year. More apartments are underway, which will ensure more satisfied customers and good net asset value growth for the shareholders.

Thanks to Wallenstam’s historically good banking relationships and a proactive company management, we had good access to capital throughout the entire year on favorable terms. It is the Board’s assessment that the low interest rates are here to stay for the foreseeable future, which is positive for our business plan.

Demand for our offices in Gothenburg is still good with stable rental rates. During the year, Wallenstam has managed to attract a number of new tenants, which is a testimony to the attractiveness of high quality offices in central Gothenburg. It is still too early to draw any conclusions with regard to demand for offices after the pandemic, or what type of offices will be in demand in the future. A trend that we have noticed for a longer time is that tenants are requesting shorter lease terms. One company that benefits from short and flexible leases is the coworking company Convendum, where Wallenstam is one of the main owners.

Physical stores and restaurants have had a very tough year and both the Board and Management see a structurally reduced demand for retail space in the future. Only a smaller part of Wallenstam’s rental income comes from these categories and the company has a plan to manage this, for example by converting retail space into offices or apartments.

to make a better assessment and could therefore shortly after the publication of the half-year report, call an Extraordinary General Meeting (EGM) to propose a dividend of SEK 0.50. The Board’s proposed dividend of SEK 1.20 for the 2020 financial year should be seen in light of the fact that the Board is keen to safeguard the company’s strong balance sheet. We see many good opportunities for expansion in the near future in the form of, for example, further land acquisitions, so that we can continue to increase our net asset value through new construction of apartments in our home markets. The proposed dividend of SEK 1.20 per share is equivalent to about one third of the year’s income from property management.

Board work during the year

I can confirm that despite the small Board in numerical terms, we have a good breadth of competencies and a stimulating mix of experienced and new members. The efficiency in a small board is well-known and this was clearly shown last summer when we convened an EGM in order to propose a dividend. During the year, I noticed a great commitment and pride from all members about being able to work in Wallenstam’s Board.

The Board during the year attached great importance to the company’s strategy work and we can confirm that the Board feels convinced that the company is in the right markets, where demand for newly constructed apartments remains strong. We see good opportunities for expansion in both Stockholm and Gothenburg and in the municipalities surrounding these cities. During the year, Wallenstam established a presence in Täby Municipality for the first time through a larger land acquisition where construction start is planned to occur during 2021.

In addition to this, the work mainly focused on the dividend issue and the EGM in September, as well as the challenges facing retail premises. We have also visited construction projects in both Gothenburg and Stockholm and met with the Management team regularly during the year. The Board has received the Management team’s regular updates about the effects of the pandemic on Wallenstam and we have felt very reassured that the work has been able to proceed in line with the business plan despite the pandemic. In order to further advance Wallenstam’s important sustainability work, new climate targets were published during 2020 and the Board will take on the task of continually following up on these targets.

Proposed dividend of SEK 1.20 per share

Due to the generally uncertain economic situation during spring 2020, the Board decided to withdraw its initial dividend proposal. During the summer, the Board was able

The number of shareholders is growing

It has been great to see so many new shareholders during the year, at year-end we were 18,000 in total, an increase

12 COMMENTS BY THE CHAIRMAN

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Lars-Åke Bokenberger,
Chairman Wallenstam
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of 80 percent during the past five years. As the new Chairman, I had been looking forward to meeting some of you at the Annual General Meeting (AGM), and we hoped for as long as possible to be able to conduct a “normal” AGM in 2020. Unfortunately, we have had to take the decision that this year’s AGM will also be completely digital with only advance voting, but it is my hope that next year we can go back to a physical meeting – third time lucky.

tion of about 1,500 apartments per year during the coming years in the business plan. Our balance sheet is strong and the Board is confidently looking forward to the new year with the potential for increased income from property management and net asset value.

Finally, I would like to express a big and heartfelt thank you to our CEO Hans Wallenstam who with great skill has navigated the company and all employees through the challenges brought about by this unusual year.

Great potential for the future

The fact that Wallenstam during the past year increased its net asset value by SEK 7 per share is a recognition of hard work and a carefully prepared business plan. During my initial period as Chairman, I can confirm that Wallenstam has both the right structure and organization to meet the future. We are keeping to our plan to start the construc-

Lars-Åke Bokenberger, Chairman

COMMENTS BY THE CHAIRMAN 13

Board of Directors

CHAIRMAN

Lars-Åke Bokenberger

VICE CHAIRMAN

Karin Mattsson

Born 1968, Bachelor of Science (Economics). Board member since 2020. Previous experience including as Swedish Head of Equity at AMF and as an equity analyst and Head of Analysis at Alfred Berg Fondkommission. Other assignments, inter alia, Chairman of Mattssons Fastighetsutveckling AB. Shareholding in Wallenstam: 10,000 B shares.

Born 1972, Master of Science in sociology (human resources specialist). Board member since 2016.

Previous experience, including as chairman of the Swedish Sports Confederation and deputy membership manager of the Federation of Swedish Farmers. Other assignments, inter alia, Chairman of Länsförsäkringar Jämtland, Svenska Skidförbundet, Frösö Hästgård AB, Frösö Hästgård Fastighetsförvaltning AB and Prins Carl Philips och Prinsessan Sofias Stiftelse. Board member of Länsförsäkringar AB, WCR 2019 Jämtland/Härjedalen AB, Astrid Lindgrens Värld AB, Svenska Hockeyligan AB, Frösö Park Fastighets AB and Skogsägarna Mellanskog Ekonomisk Förening.

Shareholding in Wallenstam: 2,000 B shares.

The information refers to the year-end status. * Including family members.

14 BOARD OF DIRECTORS

BOARD MEMBER

Anders Berntsson

Born 1954, Bachelor of Laws. Board member since 1997 (Deputy 1981–1996). Previous experience from positions at Handelsbanken AB and as Vice CEO of Wallenstam AB 1979–2006 and a number of other board and consultancy assignments related to the property and construction industries. Other assignments, inter alia, Chairman of POR MI CUENTA GROUP AB. Board member of DADBRO Properties AB, DADBRO Engineering AB and Produktionsbolaget HolgerHund AB. Shareholding in Wallenstam: 19,300,000 B shares*.

BOARD MEMBER

Mikael Söderlund

Born 1965, Bachelor of Arts in Political Science. Board member since 2020.

Previous experience including as partner in the consulting firm Kreab and commissions of trust within the Moderate Party and as Vice Mayor in the City of Stockholm.

Other assignments, inter alia, Founder and CEO of Sthlm Urban Advisors. Board member of the Beridna Högvakten foundation.

BOARD MEMBER

Agneta Wallenstam

Born 1952, educated in theology, ethnology, archaeology and social anthropology. Master of Cultural Anthropology. Ordained as a pastor in 1987. Board member since 2010.

Previous experience working as a pastor and parish director for a number of parishes since 1987.

Other assignments, inter alia, Pastor in Equmenia Church and Board member at the Refugee Mission in Gothenburg, Bethlehem Church in Gothenburg and Ulla och Lennart Wallenstamstiftelsen. Runs Kolboryd estate since 2003. Shareholding in Wallenstam: 18,204,000 B shares.

BOARD OF DIRECTORS 15

Group Management

VICE CEO WALLENSTAM AB, REGIONAL DIRECTOR GOTHENBURG BUSINESS AREA

Marina Fritsche

CEO, WALLENSTAM AB Hans Wallenstam

CFO AND HEAD OF INVESTOR RELATIONS

Susann Linde

Born 1967, employed since 2005 and 2010. Education: Master of Science, Civil Engineering.

Previous executive positions at Wallenstam: Technical manager Företag Göteborg, Business area manager Bostad Region Göteborg. External assignments: Board member of Göteborg Citysamverkan ideell förening, of Avenyföreningen, of Fastighetsägarna Göteborg första regionen and of Itsumo AB. Shareholding in Wallenstam: 74,200 B shares** and 50,000 synthetic options.

Born 1961, employed since 1986. Education: Bachelor of Science (Economics). Previous executive positions at Wallenstam: Finance Director, CEO Wallenstam i Göteborg AB. External assignments: Board member of Ulla och Lennart Wallenstamstiftelsen. Shareholding in Wallenstam: 34,500,000 A shares, 49,110,000 B shares** and 50,000 synthetic options.

Born 1979, employed since 2001. Education: Bachelor of Science (Economics). Previous executive positions at Wallenstam: Group Controller. Shareholding in Wallenstam: 152,000 B shares* and 50,000 synthetic options.

AUDITOR

Mathias Arvidsson, Born 1975, Authorized Public Accountant, KPMG AB. Appointed as chief auditor in 2020. Other assignments, inter alia, IKEA of Sweden, Ancore Fastigheter, Nilörngruppen, Christian Berner, Ewellix, Lindex and MQ Marqet.

16 GROUP MANAGEMENT

VICE CEO WALLENSTAM AB, REGIONAL DIRECTOR STOCKHOLM AND UPPSALA BUSINESS AREA

Mathias Aronsson

Born 1972, employed since 1996. Previous executive positions at Wallenstam: CEO Wallenstam Stockholm AB, Regional Director Stockholm Wallenstam Bostad AB, CEO Wallenstam Bostad AB.

External assignments: Board member of Colive AB. Shareholding in Wallenstam: 271,000 B shares and 50,000 synthetic options.

TECHNICAL DIRECTOR

Patrik Persson

Born 1974, employed since 2004. Previous executive positions at Wallenstam: Operations Manager, Technical Manager. Shareholding in Wallenstam: 50,000 synthetic options.

COMMUNICATIONS DIRECTOR

Elisabeth Vansvik

Born 1970, employed since 2002. Education: M.A., Media and Communications Science.

Previous executive positions at Wallenstam: Head of Communications, Communications and HR Director. External assignments: Board member of Barn i Nöd.

Shareholding in Wallenstam: 16,000 B shares and 50,000 synthetic options.

• Including family members.

** Including shares held via companies and family members. The above information refers to the year-end status.

GROUP MANAGEMENT 17

Wallenstam and Covid-19

In early 2020, the world was shaken by a global virus infection that since March 11, 2020 has been classed as a pandemic by the WHO. The pandemic has significantly affected people, the business community and public policy both in Sweden and in the rest of the world. Wallenstam entered this crisis with a strong position both in terms of financial stability and well-located property holdings in Gothenburg, Stockholm and Uppsala. Approximately half of the holdings consist of residential and half of commercial. Wallenstam is following the Public Health Agency of Sweden’s recommendations and holds regular pulse meetings with experts within the healthcare system in order to prevent, handle and limit the risk of spread of infection.

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The transition to a
digital way of working
has functioned well.
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Employees

Since the middle of March, all of Wallenstam’s offices have been closed for external visits, with the exception of certain periods when the offices were open for pre-booked visits. Wallenstam is flexible regarding the possibilities for employees to work from home, depending on the employee’s needs and wishes in relation to both the work situation and commuting possibilities. When working at home, it is possible to borrow work equipment, such as an office chair and computer screen.

Financing and liquidity

Our choice to retain a larger proportion of loans in banks, even though the capital market has been cheaper, provided us with a good platform to stand on when it got shaky in the capital market during the spring. In order to provide security and ensure that we can continue our operations with investments in new construction as planned, we chose early on, already in the first and second quarters, to secure our financing for the rest of the year. Our bond maturities during 2020 were matched with already agreed loans from the European Investment Bank. For the part of the commercial paper which is not refinanced, we have the possibility of using our backup facility with the bank.

Apart from these measures, Hans Wallenstam has waived his salary starting from April and for the rest of the year, and the directors’ fees for the members of the Board of Directors are unchanged for 2020. In addition, the Annual General Meeting decided in April not to issue any dividend and to wait until the consequences of the pandemic could be better assessed. In September, an Extraordinary General Meeting was called, where a resolution was passed on a dividend of SEK 0.50 per share for the 2019 financial year.

Many activities have been adapted to the new conditions during 2020, for example meetings mainly occur digitally, and the group training arranged for employees has taken place outdoors or via web meeting. The number of business trips has been minimized, and preferably occur using Wallenstam’s own electric cars.

We have compensated for the lack of social interaction that many experience when working at home by “meeting” digitally, for example for a coffee and lectures. Since March, CEO Hans Wallenstam has invited all employees to weekly digital meetings.

In late 2020, a survey was conducted among all employees which showed that people generally feel good, that the rapid shift to home working has functioned and that accessibility to managers is perceived to be good. There is also strong confidence in Management’s decisions relating to measures during the pandemic.

In order to provide security and ensure that we can continue our operations with investments in new construction as planned, we chose early on, already in the first and second quarters, to secure our financing for the rest of the year.

18 WALLENSTAM AND COVID-19

Rental income and discounts

As a landlord, we always try to work close to our tenants, which also applies in particularly uncertain times and in relation to the challenges that have arisen as a consequence of Covid-19. At an early stage, we started making individual agreements with the most affected customers.

In the commercial holdings, in the first place, we have provided support through temporary rent discounts but also by purchasing goods and services aimed at helping the tenants to maintain their regular business. Through these support purchases, we have also had the opportunity to support, for example ambulance and hospital staff with food and drinks as well as various aid organizations in our society such as the City Mission and the Rescue Mission, for instance with food deliveries at a time when they are probably needed most. In total, we provided 15,000 lunches and 4 tons of drinks, energy bars and various small snacks in this way.

12 percent of our total rental value consists of tenants that are included in the government’s list of the most exposed sectors that are entitled to rent support. Aside from discounts, we have also offered deferrals with rent payments to a smaller number of tenants. In total, rent discounts and other support related to Covid-19 amount to about SEK 30 million. Of these, we have received about SEK 9 million in government support, which was also recognized as revenue.

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During the year, we
provided 15,000 lunches
and 4 tons of drinks,
energy bars and various
small snacks to charitable
organizations as well as to
ambulance and hospital
staff.
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Property management and operation

We have paused some planned maintenance projects in order to avoid needing to enter apartments. Other projects have instead been brought forward. Of course, we have carried out urgent measures, but then based on the precautionary measures recommended. The cleaning in the properties has focused even more on entrances, elevators and interfaces. We have increased the number of containers in refuse rooms where it was needed since more people are working from home, while for example, the climate in commercial premises has been adjusted based on the fact that fewer people are there at the same time.

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In various ways, we have tried to make it easier for our residential tenants, for example by putting up notecards in stairwells where tenants can write down if they need help from their neighbors with food purchases. Here, the Wallenstam App has also proved to be an important tool – many of our tenants have used it to contact each other in order to ask for or to obtain help.

New construction projects

We have worked to secure material and labor for our projects in progress so that they can be completed on schedule. We hold regular pulse meetings with our contractors in order to handle any disruptions at an early stage so that we do not experience any production stoppages. This has proved to work well, our projects are progressing according to plan. However, the municipalities’ processing times, for example for handling building permits, have become longer, which for us has meant that we were unable to start our planned projects at the rate we had wanted. No projects have been cancelled, but some starts have been brought forward as a consequence of this.

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Letting of rental apartments

Early in the year, we made a quick changeover to a digital letting process for our newly produced rental apartments, a change that was positively received by both our new tenants and our employees. Instead of physical viewings on-site, digital viewings were carried out with presentation by video and a virtual viewing where the applicant can click their way around the apartment. The signing of contracts is also digital and the only time when we meet the customer physically is during handover of the keys. Occupation-related mingles and similar activities have been replaced by, for example, welcome offers in connection with occupation.

Vacant apartments in the existing holdings have been mostly rented based on the floor plans.

WALLENSTAM AND COVID-19 19

The Wallenstam share

We create our own value growth, primarily through efficient new construction projects and profitable management, which provides the opportunity for a good overall return for our shareholders. In addition, there is a future value in our project portfolio with further planned construction. A high proportion of residential properties and commercial holdings that largely consist of office space contribute to a low risk profile for the share.

allenstam’s B share has been listed since 1984 and is on the Large Cap segment of Nasdaq Stockholm. On closing day, the company had W 18,000 shareholders (14,619).

Stockholm Real Estate PI index, which decreased by 5.7 percent and the OMX Stockholm PI index, which increased by 12.9 percent during the same period.

SHARE DATA

Shares and share capital

Wallenstam’s share capital amounted to SEK 165 million distributed among 34,500,000 A shares (ten votes per share) and 295,500,000 B shares (one vote per share). The total number of repurchased B shares on closing day amounted to 7,000,000. The number of outstanding shares, i.e. the number of registered shares less the number of repurchased shares amounted to 323,000,000 (323,000,000) as of December 31, 2020.

Trading and turnover

During 2020, the Wallenstam share, due to the turbulence relating to the prevailing Covid-19 pandemic, has fluctuated more than normal. The highest price paid during the year on Nasdaq Stockholm was SEK 138.90 and the lowest was SEK 84.30. At year-end, the share price was SEK 130.60 (113.20), which represents an increase of 15.4 percent during 2020. This may be compared to the OMX

SHARE DATA
	2020	2019
Market capitalization, SEK million	43,098	37,356
Proft after tax per share, SEK	5.9	8.5
Equity per share, SEK	79	74
Net asset value per share, SEK	98.30	91.30
Share price, SEK	130.60	113.20
Dividend, SEK	1.20*	0.50
Yield, %	0.9	0.4
Total yield, %	15.8	40.0
Turnover on Nasdaq,
number of Wallenstam shares, millions	66.5	53.6
Turnover per trading day on average,
number of Wallenstam shares	263,711	214,400
Turnover on Nasdaq Wallenstam shares value,
SEK million	7,663	5,389
Turnover per trading day on average,
Wallenstam shares value, SEK million	30.4	21.6

• Proposed dividend for the 2020 financial year.

SHARE PRICE TREND 2000–2020

SEK

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140
130
120
110
100
90
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30
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00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20
Wallenstam B-aktieWallenstam B share O MX Stockholm Real EstaOMX Stockholm Real Es t e PI ate PI O MX Stockholm PI OMX Stockholm PI
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20 THE WALLENSTAM SHARE

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AVARAGE SHARE LIQUIDITY PER DAY, NASDAQ
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SEK million
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30
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15
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16 17 18 19 20
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SHARE PRICE AND NET ASSET VALUE PER SHARE

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SEK
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11 12 13 14 15 16 17 18 19 20
Net asset value per share Share price
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DIVIDEND YIELD
Total yield, % Yield, %
40 4
30 3
20 2
10 1
0 0
16 17 18 19 20
Total yield Yield
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The share had a standard deviation of 11.6 in 2020. The beta value is 0.53 in relation to the OMXC All PI index. In addition to Nasdaq Stockholm, where around 67 percent of the share turnover took place in 2020, 33 percent of the shares were traded on other exchanges such as Chi-X Europe, Bats Chi-X and Bats Trading Europe.

Dividend to shareholders

In light of the uncertainty that prevailed on account of the pandemic, the Board decided to withdraw the proposal on a dividend ahead of the Annual General Meeting in April. When the situation had stabilized during the summer, an Extraordinary General Meeting was called in September 2020, where a resolution was passed on a dividend of SEK 0.50 per share for the 2019 financial year.

According to Wallenstam's dividend policy, reported profits in the first place should be reinvested in the operations for continued development of the Group’s core business and thereby create increased net asset value growth in the company. The ambition is also for the operations to provide a stable level of dividends over time. However, the amount available for distribution must not exceed profit

THE WALLENSTAM SHARE 21

The ambition is for the operations to provide a long-term and stable level of dividends over time.

Susann Linde

CFO and Head of Investor Relations

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How has Covid-19 affected the performance of Wallenstam’s share during 2020?

before changes in value and impairment charges less participations in the profits of associated companies and after standard tax. When determining the size of the dividend, consideration should be given to the Group’s investment requirements, need to strengthen its balance sheet and its position in general, and the ability of the Group to develop further in the future while maintaining its financial strength and freedom of action.

For the 2020 financial year, the Board of Directors will propose a dividend of SEK 1.20 per share (0.50), spread over two payment dates of SEK 0.60 each per share. Profit before changes in value and impairment charges less participations in the profits of associated companies and after standard tax, was estimated at SEK 985 million for 2020. The proposed dividend is expected to amount to SEK 388 million.

Net asset value

Net asset value on closing day amounted to SEK 31,746 million (29,501), equivalent to SEK 98.30 per share. Net asset value describes the Group’s total created value and includes equity and deferred tax liability. Our goal is to achieve an increase in net asset value of SEK 40 per share during the current business plan, also see page 4.

Information to the market

Financial information is mainly provided in interim reports, year-end reports and annual reports, and through press releases. In connection with every interim report the results are commented upon in a film and in a conference call. Presentations are made in connection with interim reports, during visits from investors and analysts and during investor meetings in Sweden and abroad. Information about the company is available at www.wallenstam.se.

"Wallenstam’s share is a stable share with a low volatility for long-term ownership. During 2020, turbulence due to Covid-19, led to a large fall in the stock market generally in March, which meant that our share which was up at SEK 138.90 – an all-time-high – fell to SEK 84.30. The property shares in Sweden recovered and after the summer, Wallenstam was back at the same levels. In connection with the second wave of the pandemic in Europe, the share fell again, but remained at levels which still exceeded the share value at year-end 2019.

One of Wallenstam’s advantages in this context is that we have a uniform distribution between residential and commercial premises, and our properties are found in attractive locations, which means that our risk profile is lower."

Can you comment on the dividend for the 2019 financial year?

"Many boards withdrew their initial dividend proposals for 2019 and opted to wait and see until the fall, and so did Wallenstam’s Board. For us, this resulted in a dividend in October 2020 of SEK 0.50 per share. It is positive to be able to give shareholders a dividend in these uncertain times, while we are well-prepared ahead of our large investment plans in new housing production and for any business opportunities that may arise in the near future."

Why does Wallenstam no longer repurchase any shares?

"For a long time, Wallenstam has chosen to use parts of its capital to repurchase shares. It is a shareholderfriendly measure that distributes value to the shareholders. During the current business plan, Wallenstam will not repurchase shares to the same extent as before, as the company’s capital will instead be used for operational investments. Even though we have the possibility, in accordance with the AGM’s resolution, to acquire up to 10 percent of the outstanding B shares, we have not repurchased any shares during 2020. We currently hold 7,000,000 treasury shares, repurchased at an average price of SEK 76.16 per share."

22 THE WALLENSTAM SHARE

SHAREHOLDINGS, DECEMBER 31, 2020

SHAREHOLDINGS, DECEMBER 31, 2020
Owner	A shares	B shares	Equity, %	Votes, %
Hans Wallenstam and family, and company	34,500,000	49,110,000	25.34	62.21
AMF – Insurance and funds		32,317,332	9.79	5.10
Anna-Carin B Wallenstam and Anders Berntsson		19,300,000	5.85	3.05
Agneta Wallenstam		18,204,000	5.52	2.87
Henric and Ulrika Wiman		12,037,752	3.65	1.90
Monica and Jonas Brandström		7,072,826	2.14	1.12
Bengt Norman		6,500,000	1.97	1.03
David Wallenstam		5,000,000	1.52	0.79
Elin Wallenstam Sjögren		4,327,240	1.31	0.68
Lisa Liljeqvist		4,279,240	1.30	0.68
Other owners		130,351,610	39.50	20.57
Total numbers of shares	34,500,000	288,500,000
Repurchased shares*		7,000,000	2.11
Registered shares	34,500,000	295,500,000
Total registered shares		330,000,000	100.00	100.00
Total outstanding shares		323,000,000

The proportion of institutional ownership amounted to around 17 percent of equity and around 9 percent of the votes. Foreign ownership amounted to around 10 percent of equity and around 5 percent of the votes. *Repurchased own shares lack voting rights. Source: Euroclear

SHARE CAPITAL DEVELOPMENT

		Change in
Year	Issue	share capital, SEK	Share capital, SEK	Number of shares	Nominal value, SEK
1960	Original capital		200,000	200	1,000
1984	Bonus issue 9:1	1,800,000	2,000,000	2,000	1,000
1984	Split 1,000:1		2,000,000	2,000,000	1
1984	New share issue 1:2 to SEK 32	1,000,000	3,000,000	3,000,000	1
1986	Bonus issue nom. SEK 1 to 10	27,000,000	30,000,000	3,000,000	10
1986	New share issue 1:3 to SEK 75	10,000,000	40,000,000	4,000,000	10
1987	Bonus issue 1:1	40,000,000	80,000,000	8,000,000	10
1995	New share issue in kind to SEK 43	109,302,320	189,302,320	18,930,232	10
2000	Redemption of shares	-9,396,690	179,905,630	17,990,563	10
2001	Reduction	-7,376,200	172,529,430	17,252,943	10
2002	Reduction	-11,363,000	161,166,430	16,116,643	10
2003	Reduction	-13,115,000	148,051,430	14,805,143	10
2004	Reduction	-10,051,430	138,000,000	13,800,000	10
2005	Split 5:1		138,000,000	69,000,000	2
2005	Reduction	-7,000,000	131,000,000	65,500,000	2
2006	Reduction	-3,000,000	128,000,000	64,000,000	2
2007	Reduction	-4,000,000	124,000,000	62,000,000	2
2008	Reduction	-6,000,000	118,000,000	59,000,000	2
2011	Split 3:1		118,000,000	177,000,000	0.67
2011	Reduction	-3,333,333	114,666,667	172,000,000	0.67
2012	Bonus issue	57,333,333	172,000,000	172,000,000	1
2013	Reduction	-2,000,000	170,000,000	170,000,000	1
2015	Split 2:1		170,000,000	340,000,000	0.50
2017	Reduction	-5,000,000	165,000,000	330,000,000	0.50

HOLDING BY OWNER CATEGORY

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Foreign ownership, 10% Swedish natural
persons, 45%
Other Swedish
legal persons,
30%
Finance companies, 15%
Foreign ownership amounted to 10% of which
46% in USA and 54% in Europe excl. Sweden.
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DISTRIBUTION OF SHARES, DECEMBER 31, 2020

	No. of share-	Share-	No. of	Shares,
	holders	holders, %	shares	%
1–500	12,922	71.8	1,306,887	0.4
501–1,000	1,444	8.0	1,148,984	0.4
1,001–5,000	1,962	11.0	4,815,905	1.5
5,001–10,000	648	3.6	4,672,967	1.4
10,001–15,000	274	1.5	3,437,060	1.0
15,001–20,000	150	0.8	2,673,312	0.8
20,001–	600	3.3	311,944,885	94.6
Total	18,000	100.0	330,000,000	100.0

Source: Euroclear

THE WALLENSTAM SHARE 23

Investing in Wallenstam

Wallenstam is a company with a long-term focus. We are following our business plan, something that helps our shareholders, financiers, employees and others in our external environment to know what we want to do as a company and where we are going. This creates transparency, predictability and confidence for our stakeholders, and contributes to a less volatile share.

Stable return at a low risk

Wallenstam’s property holdings are distributed between approximately 50 percent residential and 50 percent commercial, in terms of rental value. The company stands for long-term value creation and has a flexible business model, for example regarding form of tenure in new construction projects. The financial position is stable, in terms of the equity/assets ratio and loan-to-value ratio. Historically, the share has displayed a good performance, delivering a stable return. Apart from the dividend, Wallenstam creates value for the shareholders through reinvestments in the business, which provides the opportunity for a good overall return.

Create growth through cost-efficient new construction and efficient management

We plan future investments in new construction of about SEK 3 billion per year, and we show average value growth, thanks to our cost-efficient new construction, in completed rental apartment projects of 30–40 percent per invested krona. Combined with efficient management and successful letting operations this contributes to value creation, through our own work, benefiting both the company and shareholders. The project portfolio with potential new construction projects is continually replenished.

Offer the desired product in selected growth markets

We build and manage rental apartments for residents in attractive locations in Gothenburg, Stockholm and Uppsala. Our commercial holdings, which mostly consist of office space, are concentrated in Gothenburg inner city. Our business model and concentration strategy is a good basis for value growth and high occupancy rates regardless of the market climate.

Responsible enterprise

From our long experience of property management, construction and of the conditions and requirements of commercial and private tenants, we have good know-how about urban development to ensure a vibrant city. The rental apartments that we build and manage are important for society and its development. Combined with innovation as well as climate and environmental investments, which also reduce operating expenses, and social engagement in the places we operate in, we are working to contribute to a better society.

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----- Start of picture text -----

Trollesunds Gårdar
in Bandhagen,
Stockholm.
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24 INVESTING IN WALLENSTAM

Parameters that affect the development of the company in the short and long term

Attractive properties and good management result in satisfied tenants, stable occupancy rates and rental income and good business opportunities for the company.

Access to land in the right locations is an essential factor for enabling the construction of new homes and requires strategic and practical work every day.

Secure financing is important because access to capital is a vital resource for the operations, and is crucial if we are to develop and expand to the desired extent.

A good corporate culture and skills development in order to attract and engage the right employees are important success factors for continued development.

The market situation and market conditions, which change over time, affect property values. Properties in attractive locations where demand is high generate good returns and excellent value growth over time.

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DIVIDEND
SEK/share
2.00
1.50
1.00
0.50
0
16 17 18 19 20
Proposed dividend
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----- Start of picture text -----

VALUE GROWTH FROM OUR
NEW CONSTRUCTION
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SEK million

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----- Start of picture text -----

1,250
1,000
750
500
250
0
16 17 18 19 20
----- End of picture text -----

CONSOLIDATED NET ASSET VALUE

SEK million

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----- Start of picture text -----

35,000
30,000
25,000
20,000
15,000
0
11 12 13 14 15 16 17 18 19 20
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INVESTING IN WALLENSTAM 25

Financial strategy

Financing expenses, borrowing and cash management combined with financial risk management are central issues for Wallenstam, as access to capital is a basic requirement for building, developing and owning quality properties.

Early in 2020, even before Covid-19 was classified as a pandemic, Wallenstam had started to secure its financing for 2020. With the base in bank loans, we were not particularly affected by the turbulence in the capital market, which was a consequence of concerns about the pandemic. We also had the possibility to match bond maturities during 2020 with payment of our loan from the European Investment Bank (EIB).

Optimal capital structure

The value of the Group's assets on December 31, 2020 amounted to SEK 60,581 million (54,689), financed partly by equity of SEK 25,558 million (23,794), and partly by liabilities of SEK 35,023 million (30,895), of which SEK 27,785 million (24,302) including lease liability of SEK 493 million (421) are interest-bearing. We strive to achieve a balance between an acceptable level of risk and a good return on equity. Wallenstam’s equity/assets ratio may not fall below 30 percent. At year-end, the equity/assets ratio was 42 percent (44).

Available liquid assets

Available liquid assets, including available bank overdraft

facilities, amounted to SEK 1,318 million (928). Approved overdraft facilities amounted to SEK 800 million (800), of which no portion was used on closing day. At the end of 2019, the EIB approved a credit facility of SEK 2,500 million for new construction of energy-efficient rental apartments, and the entire amount was drawn down during 2020. During the year, we opted to reduce the backup facility for commercial paper from SEK 4,000 million to SEK 3,000 million, since we have a lower volume of outstanding commercial paper. The Group’s approved and unutilized credit facilities totaled SEK 3,000 million (6,500) excluding the overdraft facility.

On December 31, 2020, accessible liquidity totaled SEK 4,318 million (7,428), of which SEK 2,470 million (3,993) represents a credit commitment for issued outstanding commercial paper.

Interest-bearing liabilities

Interest-bearing liabilities mainly consist of conventional bank loans combined with interest rate derivatives, commercial paper, bond loans and loans from the European Investment Bank (EIB). Our total Interest-bearing

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Söra Kvarter with 305
new rental apartments
in Österåker.
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26 FINANCIAL STRATEGY

FIXED TERMS, AVERAGE INTEREST RATES, DEC 31, 2020

liabilities with financial institutions amounted to SEK 27,291 million (23,881). Of these liabilities, SEK 5.35 billion (1.8) consist of green loans, and SEK 1.65 billion (1.0) of green bonds. All the bond loans of SEK 2,800 million (3,950) are contained within the framework of our MTN program (Medium Term Notes), which has a total framework amount of SEK 5 billion. The bond loans are listed on Nasdaq Stockholm.

	Amount,	Average	Proportion,
	SEK million	interest rate, %	%
0–1 year	13,518	1.51	49.5
1–2 years	300	0.70	1.1
2–3 years	401	1.09	1.5
3–4 years	1,000	0.64	3.7
4–5 years	2,423	1.06	8.9
5–6 years	1,700	0.90	6.2
6–7 years	1,700	1.05	6.2
7–8 years	1,700	1.06	6.2
8–9 years	1,900	0.87	7.0
> 9years	2,650	0.73	9.7
Total	27,291	1.21	100.0

Financing of the loan portfolio is mainly secured by mortgage deeds for properties. The bond loans, commercial paper and the loan from the EIB are unsecured. The commercial paper program, with a limit of SEK 4 billion, has underlying credit commitments for the outstanding volume of commercial paper at each date. Covenants are issued for the loan from the EIB and for the credit commitment for the commercial paper program, see page 108.

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EQUITY/ASSETS RATIO AND EQUITY
issued for the loan from the EIB and for the credit commit-
SEK million % ment for the commercial paper program, see page 108.
26,000 46 We continually review the various forms of capital bor-
24,000 44 rowing in order to adapt the structure to what is best for
22,000 42 the company in the short and long term.
20,000 40
18,000 38
Green bonds
16,000 36
14,000 34 In October 2020, in connection with the launch of our
12,000 32 four climate targets, the decision was taken that all bonds
0 16 17 18 19 20 30 we issue shall be green bonds. Our green bonds totaling
SEK 1.65 billion are listed on Nasdaq Stockholm’s sustain-
Equity Equity/assets ratio
able bond market. They are subject to the same terms and
conditions as for the other bonds with the addition that the
FINANCING issue proceeds can only be allocated to projects and assets
Bonds, 10% that qualify according to Wallenstam’s green framework.
(6% green)
The green framework has obtained the highest rating Dark
Commercial
paper, 9% Green for the framework and Excellent for governance and
reporting in the review, which was carried out by the inde-
Bank loans, 81%
(20% green)
Interest-bearing liabilities with financial institutions totaled
SEK 27,291 million (23,881). The loan-to-value ratio is
46 percent (45).
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FINANCIAL STRATEGY 27

pendent research institute Cicero (Center for International Climate Research).

Fixed interest terms and capital tied up

One of the largest single expense items is interest expenses, which is mainly affected by changes in market interest rates and changing conditions in the credit market. We aim for a distribution among different lenders and different fixed terms. The term during which capital will be tied up is assessed according to pricing and refinancing risk.

The proportion of our interest-bearing liabilities with capital tied up for long terms (more than 12 months) is 23 percent (16) and the proportion with long fixed interest terms is 50 percent (41). At year-end, the average remaining fixed interest term was 41 months (38). The average interest rate during the year was 1.29 percent (1.20) and the average interest rate on closing day was 1.21 percent (1.22).

Interest rate derivatives

Interest rate derivatives are a flexible and cost-efficient way of extending loans with short fixed interest terms. From a cash flow perspective, the outcome over time is essentially the same as raising a loan with fixed interest. Interest rate derivatives shall be marked to market. If the agreed price deviates from the market interest rate, a theoretical surplus or deficit value will arise in profit or loss. Unrealized

changes in value of interest rate derivatives do not affect cash flow and when a derivative contract matures, its market value is dissolved in its entirety and the change in value over time does not affect equity.

During 2020, the Group entered into new interest rate derivative contracts totaling SEK 2.45 billion. The total volume of outstanding interest rate derivatives amounts to SEK 12.2 billion (9.7). During the year, the development in the value of derivatives was negative, and the market value of the interest rate derivative portfolio amounted to SEK -512 million (-350) at year-end.

Finance and currency policy

Our finance policy aims to limit the company's financial risks, which consist chiefly of liquidity, refinancing and interest rate risks. It is approved by the Board of Directors and reviewed annually. The company’s short- and longterm supply of capital should be secured by adapting the financial strategy to the company's operations.

The currency policy aims to minimize currency risk, for example through hedging of currency flows. Our exposure to currency risk is limited. The currency risk that arises when we purchase frames for our new construction projects is eliminated as the currency is hedged in its entirety. In some cases, we hedge the currency ourselves, and in some cases the contractor hired for the project carries out the hedging.

In Parkstråket in Haninge, we are building 285 rental apartments, of which 17 are co-living apartments with a total of 85 rooms for rent which are let via Colive.

28 FINANCIAL STRATEGY

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Green façade on Södra Larmgatan
in central Gothenburg.
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Responsible enterprise

Wallenstam wants to contribute to a better society, today and for future generations. This is our driving force and what makes us proud of our business. For us, sustainability is about pursuing responsible enterprise. By creating solutions that contribute to a long-term positive development, we take responsibility for the impact we have on society, the climate and the environment. As part of this work, Wallenstam supports the UN’s Global Compact initiative and this section constitutes our Communication on Progress (COP report).

hen Agenda 2030 was adopted, the world’s countries came together to limit global warming to well under 2 degrees. Research shows that global warming continues to W increase, with both short-term and longterm climate change as a result. Agenda 2030 contains ambitious goals in relation to equality, poverty, peace and justice. Wallenstam is continuing to focus on our five prioritized goals in Agenda 2030, all aimed at promoting a sustainable development.

We believe that integrated sustainability work and strong social engagement go hand in hand with long-term profitability, and for this reason, sustainability is a core part of our business. This delivers good control, minimizes businessrelated and operational risks, improves efficiency, generates new solutions and business and ensures more engaged employees, more secure investors and more satisfied customers.

For us, sustainable enterprise is also about continuous improvements, development of our operations and about refining and streamlining processes.

As an additional part of our climate work, Management adopted four climate targets during the year, which apply until the end of the business plan in 2023. The aim of the targets is to reduce the carbon footprint from our

construction operations and from the properties’ energy consumption and residual waste. In addition, all business trips shall be carried out in a climate-neutral way. The goals have been formulated in the company's climate group, which is led by the Sustainability Manager and is composed of representatives from the construction and management operations. The climate group’s mission is now also to prepare action plans for each target.

Organization, governance and reporting

During 2020, the work continued on developing and driving Wallenstam’s sustainability work in accordance with the company’s sustainability policy, with Karin Mizgalski as Sustainability Manager. The CEO is ultimately responsible for the work with the material topics and risks that are prioritized in Wallenstam’s sustainability work. The practical and day-to-day sustainability work is conducted in all parts of the operations and all employees have a responsibility to implement and drive the sustainability efforts in their respective departments. Outcomes are followed up and regularly reported to Group Management and the Board.

Wallenstam has reported its sustainability work since 2006 and reports according to Global Reporting Initiative (GRI) since 2010. We also reported our emissions of

RESPONSIBLE ENTERPRISE 29

Wallenstam’s climate targets 2023

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Reduce CO2 emissions from the construction operations by 10 percent per square meter.

Reduce CO2 emissions from the properties’ energy consumption by 15 percent per heated square meter.

Reduce the properties’ residual waste by 10 percent per square meter.

Carry out business trips using electric car, train or via completely carbon-neutral and biofuel-based air travel.

greenhouse gases and other climate-related data during the year to the CDP (Carbon Disclosure Project).

Stakeholder dialogue

During fall 2018, we conducted a stakeholder analysis, which continues to form the basis for the work with the business plan 2019–2023. Through our stakeholder dialogues, we obtain a relevant view about external requirements and wishes.

Code of Conduct and Ethics Council

In the construction and property sector, there are risks, for example related to the working environment, corruption, human rights, climate and the environment. Our Code

of Conduct, which is built on our core values, serves as a central guide for us. The Code of Conduct, and a number of guidelines connected to it, set out Wallenstam’s approach and clarify how we want to act as a company. The goal is to have an environmental, social and commercial commitment in everything we do. We comply with laws and regulations, and apply responsible business methods, which are characterized by high business ethics and good business practice. We impose requirements on contractors that enter into cooperation agreements with us that they follow the content of the Code of Conduct and act according to it. Violations of the Code of Conduct, internally or by partners, can damage Wallenstam’s operations and brand.

MATERIAL SUSTAINABILITY AREAS BASED ON STAKEHOLDER DIALOGUE

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Stable financial position Costumer
and anti-corruption
B A Financial position G Customer satisfaction
in balance
B Anti-corruption
D
Social conditions and Environment
E C
employees
A
C Good working H Greenhouse gases
K I H conditions I Energy efficiancy
J D Safe and secure J Waste management
working K Sustainable building
F G environment materials
E Inclusive corporate
culture
F Equality and diversity
Very important | WALLENSTAM'S IMPACT | Critical
Critical
|
IMPORTANCE FOR STAKEHOLDERS
Very important |
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30 RESPONSIBLE ENTERPRISE

HUMAN RIGHTS

Having a home is a fundamental need and constitutes an important part of a functioning society. There is currently a severe housing shortage, which also means that many people are finding it hard to get their own home. We want to contribute to a good standard of living for many people by developing safe, secure and lively city districts where we build and manage housing, primarily in the form of rental apartments. We currently have about 350 social contracts 350 with municipalities and organizations, where we make housing available for people who find it difficult to social contracts obtain a regular contract. For example, this can relate to transitional accommodation. Several of the contracts change over to regular leases when it is possible for the tenant.

Our operations are conducted in Sweden and we follow applicable rules for example relating to working conditions, the working environment and freedom of association. Wallenstam supports the UN Declaration of Human Rights and we see that we can contribute positively in many areas, including by fighting discrimination, treating everyone with respect – employees and customers as well as others we meet – and offering equal opportunities to employees.

The Code of Conduct, which is available in its entirety on www.wallenstam.se, is revised annually and adopted by the Board.

Training and information about the Code of Conduct and specific guidelines, for example on anti-corruption and information security are mandatory for all employees including the Group Management and Board. Training occurs regularly, as part of the introductory program for new employees, among other ways and as digital training for all employees.

Wallenstam’s Ethics Council, with representatives from the entire business, holds about four meetings annually. The Ethics Council is the body that works centrally in the Group on continually advancing the Group’s anti-corrup-

tion work, and it conducts risk analyses in the area and proposes possible measures. The Ethics Council receives regular questions of an informational character that the Council answers. Most questions relate to what employees can give or receive, in other words, questions connected to business ethics and corruption. We provide information to all employees based on commonly asked questions. No cases arose during the year where further investigation was required. Wallenstam has a whistleblower function, which can be used internally and externally and is accessible via a link from Wallenstam’s website. A few cases were reported during 2020. However, these were not classified as whistleblower cases but were other types of viewpoints, which have been handled and answered.

Only green bonds

During the year, Management decided that all bonds that Wallenstam issues going forward shall be green bonds. At present, all 66 of Wallenstam’s wind turbines and some of our environmentally-certified properties are financed through green bonds.

Agenda 2030

Wallenstam has prioritized five global sustainable development goals (SDGs) in the UN’s Agenda 2030. Within these goals, we are working in various ways with a number of different sub-areas in order to help reach the goals. Having a home is a fundamental need and constitutes an important part of a functioning society. There is currently a severe housing shortage.

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Gender equality

Gender equality and diversity

For us gender equality and diversity are important. Employers should work together with employees to achieve gender equality and diversity. Gender equality and diversity issues must be integrated throughout the organization and its working methods. During recruitments and in our internal processes, for example in relation to development initiatives and setting of salaries, we work to ensure that men and women have the same conditions and we shall work together to ensure a progressive organization where discrimination on all grounds is prevented. Nevertheless, we need to maintain an ongoing dialogue about what gender equality, respect and diversity means in our company. Our Code of Conduct is clear that discrimination must not occur. Read more on page 43.

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Affordable and clean energy

Renewable energy

We are self-sufficient in renewable energy through our own wind turbines. Our largest carbon footprint from heating of properties comes from district heating. To the extent that the heating is based on waste heat or is produced with renewable raw materials, district heating can be a good environmental alternative. We aim where it is possible to be able to replace district heating with our own internallyproduced wind power in more and more of our properties.

66

WIND TURBINES

from Jämtland in the north to Skåne in the south. We have been self-sufficient in renewable energy since 2013.

We also investigate and evaluate other technical solutions for sustainable energy production, such as solar energy and energy storage. During the year, the installation of solar cells on roofs continued and construction also started of a carpark whose façade will be clad in solar panels.

Our wind turbines are still financed by green bonds. These were iss ~~u~~ ed during 2019 within our green framework, which obtained the highest rating Dark Green.

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Decent work and economic growth

Long-term sustainable financial position

Long-term profitability is one of the basic requirements for us as a company and our owners want to see a return on the capital they have invested in the business. Through efficient organization, climate- and cost-efficiency in the entire operations and focus on locations with growth and strong demand, we can ensure long-term economic stability. This also means that we should be profitable – profits that we can reinvest in the business.

Wallenstam is flexible in a volatile housing market in a way that provides assurance for our stakeholders. We mainly build rental apartments for our own management, and provide badly needed housing. Through profitable property development, we create value for our customers, society in general and also for the company’s employees and owners. Long-term plans and investments over time also create secure jobs in production and management. Read more about how we work with our customers and employees in focus, on page 6, and page 7, respectively.

32 RESPONSIBLE ENTERPRISE

Self-sufficiency in renewable energy

Our renewable energy investments were initiated to increase control over our electricity expenses and our climate impact. We are self-sufficient in renewable energy through our own production since 2013, which covers our own and our tenants’ consumption. Our 66 wind turbines are found from Jämtland in the north to Skåne in the south, and have an installed total output of 143 MW. Our high ambitions to be self-sufficient during all months mean that we shall meet our energy needs in the Group even during July when wind power production in Sweden is at its lowest. The wind turbi-

nes shall provide Wallenstam’s properties with renewable energy and thereby make the management operations less sensitive to changes in the electricity price.

Operation and production

In total, we produced 417 GWh (367) during the year. We work actively on boosting our turbine uptime, in other words, minimizing the time that turbines do not generate electricity due to disruptions or planned stoppages – for example by carrying out maintenance work at times when there is no wind.

During 2020, the uptime amounted to 98 percent. Production is also continually optimized by various types of capacity increasing modifications and upgrades, including new software to improve production efficiency.

Electricity trading and prices

We still sell the electricity we produce to the Nordic electricity market and Wallenstam only purchases internally produced wind power for the Group’s total electricity use. We follow the development of the electricity price, handle hedging and sales of renewable energy certificates.

Wallenstam’s supply chain

In our business, we utilize the services of more than 3,000 suppliers. Our Wallenstam Partners perform property upkeep and maintenance, and we use building contractors in our new construction operations who in turn often use subcontractors. In addition, we buy goods and services, use the services of consultants and borrow capital through banks and other financial institutions. Our suppliers are usually domiciled in Sweden, but for instance, sourcing of construction material etc. also occurs in other European countries and in the rest of the world.

We aim for close and long-term collaboration, which means that we can develop together with our partners. As a client, we have both a responsibility and an opportunity to demand good operational standards in the entire production chain. During procurement of contractors and purchasing of services, the responsibilities of our partners are stipulated in agreements and codes of conduct in relation to business ethics, climate, the environment, working conditions, safety etc.

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Sustainable cities and communities

Urban development of safe areas

We aim to create safe and welcoming areas and properties, that people want to live in, work in and visit. Both the physical environment and relationships with neighbors and visitors in the area, influence tenants’ perceptions of security. In the work to increase security, we are making a number of efforts in the day-to-day management as well as selective measures. One example is our collaboration

GLOBAL COMPACT

Wallenstam has signed the UN’s Global Compact, which means that we support and work on the basis of ten principles in the areas of human rights, labor, the precautionary approach, anti-corruption and taking of responsibility in relation to environmental issues.

with Huskurage, an organization which works proactively through neighborhood cooperation to prevent violence in close relationships.

Within the scope of our urban development projects, we want to create the conditions for safe communities already during the projecting and zoning plan work. We can achieve this by planning premises in certain areas for various types of activities, such as offices, stores, geriatric and child care etc. We are developing our existing properties and carrying out activities in collaboration with our commercial tenants, the city and other organizations in society, with the aim of creating a vibrant inner city.

We actively participate in research and development within urban development, construction and management. We support and cooperate with for example KTH, Johanneberg Science Park and Mälardalen University. Development efforts can relate to all from new technology in management operations to modern mobility solutions in new city districts. Supported by Wallenstam’s Innova-

RESPONSIBLE ENTERPRISE 33

Where do the Wallenstam Group’s emissions arise?

Scope 1

Scope 2

Fossil-fuel combustion from own properties, facilities and vehicles.

Purchased energy for our properties.

Självförsörjande på förnybar energi

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SCOPE 1 Fossil förbränning från egna Own and Own Emissions leased boilers of refrigfastigheter, anläggningar och vehicles erants fordon.

SCOPE 2 Köpt energi till våra fastigheter.Property District heating electricity and district cooling

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The operations’ emissions are categorized as above.

Scope 3

Emissions from: » Purchased goods and services » Property management and construction » Tenants’ energy consumption and waste

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SCOPE 3 Our business trips Transports to and Material Tenants’ electrical from our construcand the subscriptions and tion sites construction waste process

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Våra tjänsteresor Transporter till

Fastighetsel Fjärrvärme och fjärrkyla

Material och

Egna Utsläpp av Fastighetsel värmeköldmedia tion Council, Daniel Svartling, the company’s Innovation pannor Manager, is working on creating new sustainable business opportunities. Results from our different projects become solutions in the housing of the future and town planning.

Våra tjänsteresor Transporter till Material och Hyresgästernas och från våra byggprocessen elabonnemang ports will continue to be a focus area during the business byggarbetsplatser och avfall plan 2019–2023 through the establishment of our climate targets.

Internally, we encourage the use of public transport to and from the workplace with the possibility of buying an annual travel card through a net salary deduction. However, due to the pandemic during the year, we encouraged our employees to avoid public transport as far as possible. Electric bicycles are available for shorter trips and we have a carpool with electric cars, which reduces the need for employees to take their own car to work. The use of electric pool cars generates much less carbon emissions.

Social engagement for reduced exclusion

Wallenstam is passionate about fighting exclusion and about creating city districts where everyone can feel safe and a sense of belonging. We believe that supporting youth activities in the local communities where we operate is a recipe for success. For this reason, we participate in many local projects, which focus on helping young people to have active leisure time. Examples of our initiatives include letting premises for associations, creating meeting places and supporting activities for young people and particularly vulnerable groups. The aim to reduce exclusion is also the background for our collaboration with organizations such as Project Playground, Barnens Ö, Stiftelsen Läxhjälpen, Mitt Liv, Stockholm City Mission, the Refugee Mission in Gothenburg and many sports associations.

Resources in focus

How we use our resources is becoming increasingly critical, which is also evident in our internal work and in dialogues with stakeholders. For this reason, in our current business plan, we have defined it as a focus area in our sustainability work for the coming years. Resources consist of several elements, such as waste management, recycling, building materials etc.

Cooperation and support mainly occur through sponsorship and participation in different sustainability-related initiatives.

The possibility of sorting at source is offered in our properties, both for residential tenants and for commercial tenants. Needs vary with the tenants’ businesses and the possibilities also vary depending on the design and location of the properties. Within this area, there are improvements to be made, both to make it easier for tenants and to reduce our carbon footprint. During the year, a benchmark measurement was carried out in order to be able to follow up our climate target for residual waste. There is also great potential to reduce the carbon footprint from our new construction operations, when it comes to sorting at source, recycling and materials.

Transports for tenants and employees

We are looking at various mobility solutions in order to offer our tenants practical and environmentally-friendly transport solutions. Composite mobility solutions involving bicycles, cars and other types of transports are still under development in some of our urban development projects, for example in Kallebäcks Terrasser in Gothenburg. Today we are installing recharging possibilities for electric vehicles in our new construction projects. Trans-

34 RESPONSIBLE ENTERPRISE

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Climate action

Drive the development for reduced climate and environmental impact

Lunches for the Rescue Mission

The company’s founder Lennart Wallenstam was involved in supporting the Rescue Mission already from the start back in 1952. We still support the organization today through contributions and participation in various projects. In 2020, we provided extra support in the form of lunches from our restaurant tenants and through, for example, face masks and gift vouchers to families.

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Textile collection reduces
the amount of waste
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During the year, together with Human Bridge we placed collection containers for clothes and textiles at several of our properties. In just six months, 16 tons of clothes and textiles were collected. The clothes go directly to aid initiatives, or generate income for various aid projects. The collection of clothes and textiles also reduces the amount of waste from the properties.

We place great importance on limiting climate and environmental impacts in our production, operation and management of properties. During 2020, the last oil heating in our property holdings was discontinued based on our strategy of completely avoiding fossil-fuel based heating. In addition, we have converted our gas-heated properties from natural gas to fossil-free biogas. The property sector in Sweden uses a lot of energy and accounts for a large proportion of the overall carbon footprint in society, which means that it is a prioritized area for Wallenstam from a climatic and economic perspective. It is this carbon footprint that we are working to reduce through our climate target relating to construction.

Environmental legislation impacts many parts of our business and includes health protection, waste management and potential disruptions from properties such as noise, smoke and odors. There are also rules for maximum energy usage for our properties and soil remediation measures based on soil investigations prior to construction starts.

The standard of our work is not always based on legislation or external requirements but we create solutions ourselves, not least by becoming the first property company in Sweden to be self-sufficient in renewable energy in 2013. In the operation of properties we optimize and operate metering in order to reduce consumption of energy and resources and to create a good financial position with continuous improvements. Individual electricity and water metering has been standard in our new construction since 2006. Such an installation usually contributes to a reduction in consumption by tenants of 10–25 percent following a running-in period.

Wallenstam is also driving developments for a lower climate and environmental impact through different collaborations and initiatives. For example, we support the government initiative “Roadmap for fossil-free competitiveness – the Heating industry”, and we collaborate with Mälardalen University, which conducts research and innovation for energy-efficient construction and housing. There are several programs and certification systems for buildings’ climate and environmental impact in the market, such as Green Building and Miljöbyggnad (“Sweden Environmental Building”). Four of our residential properties in the environmentally-designed Kvillebäcken district in Gothenburg, and a residential property in Mölndal are currently certified according to Miljöbyggnad Silver rating.

RESPONSIBLE ENTERPRISE 35

RISK AREAS OPERATIONS

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Risk management and opportunities

ovid-19 has had a significant impact on our business during the year, and through our risk management we have been able to handle the challenges posed C by the pandemic. The effects of the pandemic are reflected, among other things, in the risks we describe relating to financing, interest rates, supply and demand and the economic situation.

Minimizing risks and optimizing opportunities is an integrated part of our business. Wallenstam’s employees participate in both the risk inventory and the preventative work. The risks are assessed based on harmfulness and probability, and are prioritized by Management and the Board. The work aims to develop strategies and measures to reduce the risks and optimize opportunities. This is ongoing work, which is continually developed and the company’s compliance function is responsible for the follow-up.

All events cannot be foreseen. For this reason, part of our risk work is to be prepared for crisis management. We conduct regular drills of our crisis management organization based on special guidelines and crisis checklists. This helps to minimize losses to the operations and our stakeholders.

Production and management of properties

Description of risk

• » Occupational accidents.

• » Unpredictable events that result in increased costs, such as environmental factors, for example substances in soil or leakage that requires decontamination or areas of natural value that need to be protected.

Description of opportunity

• » Safe working environment without personal injuries.

• » Good financial position and environmental performance.

• » Value growth through new construction projects.

Wallenstam’s management

• » Working environment plan is prepared early on and followed up during the entire project. Building work environment coordinators are appointed to ensure occupational safety in the planning stage. In contractor agreements, coordinators are appointed with equivalent responsibility during the construction phase. Sufficiently long time plans to avoid stress and mistakes.

• » Analysis of environmental risks during acquisition of land, soil investigations during new construction and continual investigations of environmental risks.

• » Efficient organization of projecting, planning, procurement, construction and choice of contractor.

Opportunities and risks connected to the operations refer to matters that are related to our core business.

36 RISK MANAGEMENT AND OPPORTUNITIES

RISK AREAS OPERATIONS

Partners

Description of risk

• » Competition for contractors.

• » That procurements are not conducted/ agreements not correctly entered into, which can cause uncertainty about responsibility and increased costs.

• » That partners do not follow entered into agreements or our Code of Conduct.

Employees

Description of risk

• » Less confidence or attractiveness among existing and potential employees.

• » Not to be able to recruit and retain employees with the right competencies and commitment.

• » That employees do not live and act according to the company’s values.

Description of opportunity

Description of opportunity

• » Good collaboration, long-term planning, good financial position and high quality.

• » That we have secure and efficient processes for purchasing and signing of contracts, providing secure collaboration.

• » To be perceived as an attractive employer. Possibility of recruiting employees with the right profile and competencies.

• » Development of employees and the company.

• » To develop employees, the operations and the brand based on strong common values.

• » Good business ethics and satisfactory working conditions among contractors and subcontractors.

Wallenstam’s management

Wallenstam’s management

• » Develop long-term relationships and wellestablished collaboration with contractors and suppliers.

• » We have developed processes and templates for procurement and purchasing, we bring in the right competencies to the process and at least two people always review tenders and agreements before they are signed.

• » Information to and dialogue with contractors about required compliance with Wallenstam’s Code of Conduct.

• » Project managers are highly knowledgeable and very closely involved with their projects. Routines for follow-up of agreements and onsite checks.

• » Routines for logbooks and ID checks etc. at workplaces. Spot checks at partners are performed regularly.

• » Training and development of routines regarding supplier checks.

• » The guiding principle focused on employees is important for quality and satisfied customers. Offer a good working environment, attractive and market-related working conditions, health and wellness training, skills development and internal recruitment for new positions.

• » The synthetic options scheme for employees, which offers clear participation in the company’s development.

• » Recruitment is prioritized as a strategic area. The processes are being strengthened and HR competencies shall always be engaged during recruitments.

• » Regular employee surveys are a tool for improvements, connected to the guiding principle of an annual improvement in the Engagement Index score, which is followed up during the business plan.

• » Introduction program with conference about the company’s history, values, policies and guidelines etc.

• » Managers are supported in dialogues about the values in the form of checklists, templates for development discussions etc.

RISK MANAGEMENT AND OPPORTUNITIES 37

RISK AREAS OPERATIONS

Anti-corruption

Description of risk

• » Risk for corruption linked to allocation of apartments/ premises.

• » Risk for corruption during procurements and purchasing.

Financing

Description of risk

• » Weak liquidity impedes investments and the ability to meet payment obligations.

Information and IT security

Description of risk

• » That IT systems are attacked and the operations manipulated or that information gets into the wrong hands.

• » That sensitive information is circulated to the wrong people.

• » Non-compliance with legal requirements.

Description of opportunity

Description of opportunity

• » Good control of business operations, credibility for business partners and other stakeholders and assurance for employees with clarity regarding rules and routines.

Wallenstam’s management

• » Clear processes and templates for procurements, purchasing and letting. Routines where two persons shall jointly review and authorize lettings and purchasing and also check tenders and agreements prior to signing. Spot checks for checking agreements. Focus on checking existing contracts, for example unlawful subletting.

• » An Ethics Council tasked with driving and monitoring the anti-corruption work at Wallenstam. Internal information and support through the Ethics Council.

• » Strong liquidity provides the freedom of action to complete approved investments and obligations.

Wallenstam’s management

• » Proximity to the market and the banks. Good relationships with several lenders provides good financing possibilities.

• » Financing is always secured before new construction starts, which eliminates the risk of low liquidity.

• » Focus on strong liquidity and high equity/assets ratio.

• » Liquidity forecasts are updated continuously with the objective of optimizing cash management.

Description of opportunity

• » Well-functioning and fit-forpurpose IT security for our operations and that information is handled securely.

• » Increased administrative efficiency due to IT security routines.

Wallenstam’s management

• » Continual work with security-enhancing measures surrounding IT security, upgrades of firewalls, antivirus protection and systems, anti-hacking tests, routines for IT security etc.

• » Policy and guidelines for information security as well as internal information and training. Routines for information sharing and handling.

• » A Data Protection Officer who works continually with GDPR issues.

• » Accessible whistleblower function.

• » Internal transparency about side-line jobs and assignments that may affect interests.

38 RISK MANAGEMENT AND OPPORTUNITIES

RISK AREAS EXTERNAL

Economic cycle

Supply and demand

Description of risk

• » Weaker property values. Increased land prices.

• » Lack of resources and increased costs.

Description of risk

• » Lower demand, for example for commercial premises, co-op apartments, or rental apartments.

• » Protracted planning processes and a shortage of available land.

Description of opportunity

• » Positive development in the value of our properties.

• » Increased access to land and land allocations as most other players do not have the same long-term possibilities for investments during an economic downturn.

Description of opportunity

• » Heavy and stable demand for our products.

• » Good access to land for new construction.

Wallenstam’s management

Wallenstam’s management

• » Having properties in attractive locations lowers the risk of falling values during an economic downturn.

• » Our new construction means less sensitivity to changing property values, since we generate surplus values in our construction, mitigating the effects of a downturn. Profitability is also ensured in the event of a change in market conditions through high demands in relation to return on invested capital.

• » Self-sufficiency in renewable energy provides lower price senstivity in relation to electricity.

• » Own and manage properties in attractive areas, which are characterized by growth and strong demand.

• » Proximity and close relationships with tenants.

• » Follow market trends and be prepared for changes in demand.

• » Flexible business model with the possibility to convert and adapt supply, form of tenure and conditions etc. in the event of changing demand.

• » Long-term planning and close collaboration with municipalities and several concurrent development projects.

• » Land acquisition in focus.

Opportunities and risks connected to the external environment exist outside of our operations, e.g. in the form of changing market conditions. These are risks that we have little ability to influence in the short term, but which we must take into account in the planning of strategic development.

RISK MANAGEMENT AND OPPORTUNITIES 39

RISK AREAS EXTERNAL

Interest rates

Changes in laws and regulations

Description of risk

• » Interest rate increases that result in higher costs and a large impact on profits.

Description of risk

• » Changes in laws, regulations and regulatory requirements, for example relating to the environment, design, tax issues, charges etc., which result in increased costs and additional administration.

Description of opportunity

• » Long-term assurance and control over financing costs.

Description of opportunity

• » Changes in laws and regulations, which result in reduced costs and less administration.

Wallenstam’s management

• » Loan portfolio of different maturities and spread among various forms of credit and lenders. Choice of the term for capital tied-up is based on factors such as pricing and refinancing risk in the capital market.

• » Interest derivatives are used to diversify risk, to protect the underlying portfolio and as a flexible means of influencing the fixed interest terms in the loan portfolio.

Wallenstam’s management

• » Follow development of issues concerning our operations. Interpret legal cases and regulatory changes that may result in changed conditions.

• » Proactivity in order to meet new requirements, practice and laws.

• » Comment on proposals, meetings with decision-makers in order to clarify the consequences for the property sector.

• » Energy-efficient construction and selfsufficient in renewable energy.

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40 RISK MANAGEMENT AND OPPORTUNITIES

RISK AREAS EXTERNAL

Infrastructure and urban development

Climate

Description of risk

• » Changes and construction of infrastructure or other matters that can affect the attractiveness of our properties negatively.

Description of risk

• » Climate changes are expected to result in larger volumes of rainfall, warmer periods, increased flows in watercourses and more powerful winds which can impact our properties negatively.

Description of opportunity

• » Changes and construction of infrastructure or other matters that can affect the attractiveness of our properties positively.

Description of opportunity

• » In the work that is being carried out to handle the climate impact, there are opportunities to create synergies that benefit our construction and management operations.

Wallenstam’s management

• » Continual monitoring of the development of our areas.

• » Co-operation with the municipality, other property owners, tenants and center associations.

• » Initiatives in cooperation with tenants to strengthen the attractiveness of the inner city through events, offers, accessibility, marketing and communication etc.

Wallenstam’s management

• » In connection with planning new construction, the possible consequences of a changing climate are considered.

• » Existing properties in vulnerable locations have preparedness, for example water protection equipment.

• » Ensure hardened surfaces around properties in order to handle large amounts of rain during a short period.

• » Production of renewable energy results in a lower global climate impact.

SENSITIVITY ANALYSIS, CASH FLOW

SEK million Change in rental income, residential, 1% 10.7 Change in rental income, negotiable commercial contracts, 1% 2.1 Change in operating costs, 1% 5.2 Change in loan interest rate, 1 percentage point (annual basis) 135

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RISK MANAGEMENT AND OPPORTUNITIES 41

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----- Start of picture text -----

Many activities have been adapted to the new con-
ditions during 2020. For example, our introductory
conference for new employees and response training
for letting agents has occurred digitally. We also
conduct digital training for all employees in preventing
the risks of improper influence, corruption and other
irregularities.
----- End of picture text -----

Organization and employees

About 270 employees work in the Wallenstam Group, who with great dedication have contributed to the company’s development. We are careful to maintain a working environment where consideration is shown to employees and to offer challenges that provide individuals the opportunity to grow in their professional roles.

hen Covid-19 became a tangible reality at the beginning of the year, it meant several changes for all employees at Wallenstam. Early in the year CEO Hans Wallenstam W began to hold daily – later weekly – digital group meetings with the entire company, in order to inform about the situation and current action plans, and to provide the opportunity for all employees to share small and large things that are happening in the business.

As an organization, we have successfully managed to change over to a more digital way of working involving home working and alternative forms of meetings, a shift which imposed great demands on both individual employees and on the respective managers. The personal responsibility and consideration for each other has been demonstrated in a clear way as Covid-19 has also meant a significantly higher workload for certain parts of the organization. The employees who have had a lower workload have with great commitment provided reinforcement to departments that have faced greater pressure.

Attractive employer

While it has been a year with many special challenges, our work on improving, refining and harmonizing our organization and our internal routines continued, with the aim of continuing to be an attractive employer. We want to be

able to offer a good and pleasant workplace, which offers employees the opportunity to develop and grow along with the company. Wallenstam works actively on offering good conditions and an excellent working environment and places great weight on competencies, personal attributes and qualities. Read more on page 7 about our guiding principle where the focus through our strong corporate culture, is on being an attractive employer and on improving our Engagement Index score every year.

Training and development

Employee performance reviews are conducted annually to support career and personal development, follow up jointly-established goals, gauge the work situation and plan future skills development efforts. Skills development occurs continually via external and internal training courses and through exchange of knowledge among colleagues. This, as well as challenges in the day-to-day work are other important elements of a motivating work situation. As far as possible, Wallenstam provides opportunities for advancement within the company, e.g. by announcing vacant positions internally first. The development of the individual employee within the company is also promoted in other ways, for example through the exchange of experience in improvement projects with participants representing different departments and regions.

42 ORGANIZATION AND EMPLOYEES

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270

PERSONS EMPLOYED

Wallenstam had 270 employees at year-end 2020. The majority are permanent employees, with a distribution of 58 percent women and 42 percent men. Approximately 30 percent of the employees are based in Stockholm, the rest are in Gothenburg. Wallenstam’s employees are covered by the collective bargaining agreement with Fastigo.

AGE DISTRIBUTION IN THE GROUP Number of

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100
80
60
40
20
0 Age
20–29 30–39 40–49 50–59 60–69
Men Women
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9 years

IS THE AVERAGE LENGTH OF EMPLOYMENT for permanently employed personnel at Wallenstam. Absence due to illness during the year amounted to 2.4 percent (3.5). Employee turnover during the year was 7 percent (7).

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EDUCATION LEVEL
Secondary school, 1%
Upper University or
secondary, equivalent,
32% 67%
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Focus on health and wellness training

We attach great importance to the physical working environment and health-promoting activities. There are excellent opportunities for both group and individual training in fitness centers at each office, while health and wellness training is subsidized. In 2020, we have offered more group training outdoors, and since many are working at home, we have been extra careful to encourage employees to move around in their everyday lives, for example, through break exercises and training sessions where it is possible to participate digitally. All employees are also offered regular occupational healthcare with the purpose of promoting continued good health. We have clear policies and routines in place to identify ill health among our employees.

Working for gender equality

At Wallenstam, women and men have the same conditions. Gender equality initiatives based on several different aspects, for example during recruitments, development initiatives and setting of salaries, are an ongoing process, which we as a company are continually working to maintain and improve.

In the Group Management, the distribution between women and men is perfectly uniform. At middle management level, the distribution is 51 percent women and 49 percent men, while in the company as a whole, it is 58 percent women and 42 percent men. In the Board of Directors, the distribution is 40 percent women and 60 percent men.

Values and Code of Conduct

The day-to-day operations are conducted on the basis of the Group’s core values; respect, commitment and progress. Overall, the work at Wallenstam is governed by policies, guidelines and instructions and by decisionmaking and authorization procedures, which are all important for clearly defining the company’s standpoints and working methods for the entire organization. The Code of Conduct is based on our core values and emphasizes the policies and guidelines that govern the Group in relation to employees, customers, suppliers and partners. The goal is to have an environmental, social and commercial commitment in everything we do. We shall comply with laws and regulations, and apply responsible business methods, which are characterized by high business ethics and good business practice.

Improvement metrics

PERIOD OF EMPLOYMENT

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10 years, 33% 0–2 years, 22%
6–10 years, 23% 3–5 years, 22%
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We conduct regular employee surveys to measure employees’ views of their personal work situation, the company and its management. Here we also continually follow up our Engagement Index score. The results are used as one of a number of tools for improvements in the company. Areas singled out in the surveys for Wallenstam were mainly highly-regarded leadership, confidence in Management and a strong feeling of togetherness. We also conduct regular evaluations where employees provide feedback to their manager based on a number of identified criteria which are important in the leadership at Wallenstam. The result is used as an individual development tool for the company’s managers.

ORGANIZATION AND EMPLOYEES 43

Management and construction operations with a local presence

Wallenstam is organized into two regions: the Gothenburg business area, and the Stockholm business area, which also includes the operations in Uppsala. Property management and construction operations are conducted in each business area with Wallenstam’s own managers and building project managers that cooperate with external suppliers and contractors. This local presence enables knowledge about the local property market, changes and business opportunities and provides the basis for understanding our customers’ needs and businesses. This promotes commitment and drive, both in the organization as a whole and on the part of each employee. Our staff, specialized in e.g. finance, law, IT, personnel, information and market, supports our operations.

REPRESENTATION BOARD OF DIRECTORS

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REPRESENTATION GROUP MANAGEMENT
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Women Men
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Central customer service

Our customer service is organized as a central function within the company, which enables longer opening hours and a high level of accessibility for our customers who can reach us via the web, e-mail or cost-free phone call. Systematic work and well-developed routines ensure that cases are handled in the best way and we report back to customers during the process. Follow-up and improved routines help us in our continual ambition to increase customer satisfaction.

Partner concept for property care

Property care and maintenance are services we procure from external suppliers through a well-developed partner concept, Wallenstam Partner. Recognition and peace of mind for the customer are created by a common working method and by having the Wallenstam logo on clothes and ID cards. Close collaboration, frequent partner meetings and visits to buildings by our own property managers on a rolling schedule are important for assuring the quality of property care.

Cardiopulmonary resuscitation (CPR) increases the chance to survive a cardiac arrest

Refresher training in cardiopulmonary resuscitation was offered to all employees during 2020. The training was paused due to Covid-19, and will be resumed as soon as possible. We have also increased the number of automatic external defibrillators so that there are now a total of 14 in our three offices.

ORGANI ZS ATION ANDOCH MEDARBETAREEMPLOYEES

Market outlook

The year 2020 was largely dominated by one thing – Covid-19. The pandemic has affected Wallenstam as well as the markets we operate in, to a varying degree depending on the sector and area of activity.

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ur commercial properties, with about half of the Our approximately 10,000 rental apartments are found in
holdings consisting of offices, are mainly found in attractive locations in Gothenburg, Stockholm and Upp-
inner city locations in Gothenburg. We see that sala, places where there has long been, and will continue
demand for central office space in Gothenburg is to be, a severe shortage of housing, and where demand
Ostill stable. Retail and restaurant space has been is thus high. Through flexibility and a keen awareness of
impacted to a greater extent by the ongoing pandemic, which market needs, we can adapt our business to developments
has accelerated the shift, for example, within commerce. and what is required.
WALLENSTAM’S CONCENTRATION STRATEGY
Heba
Catena John
Mattson
Pandox
Hufvudstaden
Castellum Wihlborgs Fabege
Klövern
Atrium
Sagax Corem Ljungberg Platzer
FastPartner
Kungsleden
Nyfosa Trianon
Stendörren
Diös
NP3 Fastigheter
Wallenstam
Balder
Low | DEGREE OF GEOGRAPHICAL CONCENTRATION | High
Wallenstam’s concentration strategy leads to a high level of geographical concentration. The mix of well-located residential property holdings in Stockholm and
Gothenburg and commercial holdings focused on the Gothenburg market, means that the degree of property specialization is slightly lower. Source: Nordanö
STARTED APARTMENTS IN
WALLENSTAM’S MARKETS
Housing construction in Wallenstam’s markets
No. of apts.
The need for housing in the large cities is very strong. In our
own queue for our newly constructed rental apartments in 18,000
Gothenburg, Stockholm and Uppsala, around 130,000 people 16,000
have registered. 14,000
During 2020, construction started of 12,095 homes in the 12,000
Stockholm region. 10,584 of these homes were apartments 10,000
in apartment blocks, of which 65 percent consisted of rental 8,000
apartments. Of the 2,668 homes started in Uppsala, 1,997 were 6,000
apartments in apartment blocks, of which 50 percent were rental 4,000
apartments. In Gothenburg, construction started of 7,909 homes. 2,000
Of these, 6,927 were apartments in apartment blocks, of which 0
16 17 18 19 20
59 percent were rental apartments.
Greater Greater Uppsala
Stockholm Gothenburg County
High
|
| DEGREE OF REFINEMENT PER TYPE OF PROPERTY
Low
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Our approximately 10,000 rental apartments are found in attractive locations in Gothenburg, Stockholm and Uppsala, places where there has long been, and will continue to be, a severe shortage of housing, and where demand is thus high. Through flexibility and a keen awareness of market needs, we can adapt our business to developments and what is required.

Wallenstam’s concentration strategy leads to a high level of geographical concentration. The mix of well-located residential property holdings in Stockholm and Gothenburg and commercial holdings focused on the Gothenburg market, means that the degree of property specialization is slightly lower. Source: Nordanö

Source: JLL

MARKET OUTLOOK 45

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Marina Fritsche

Vice CEO Wallenstam AB, Regional Director Gothenburg business area

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How has the pandemic affected the business during 2020?

”Covid-19 has of course meant that we have had to be even more flexible and accessible for our tenants. The whole tourist trade was paused early during the spring of 2020, which primarily affected stores, restaurants and a few of our office tenants in certain sectors. We have put a lot of time and commitment into supporting our tenants that have faced a tough time in this extreme situation.

Meanwhile, we saw a lot of positive things during the year, including in our large urban development projects Kallebäcks Terrasser and Mölnlycke Fabriker, where construction has proceeded as planned. We also see that the office market is continuing to function well, there is clearly a demand for office premises in our central locations.”

How do you view the current situation?

”Now I am hoping that the market, the sector and life will soon return to normal. The challenge of course is that we do not know what will happen with the pandemic during next year, how quickly society and the most exposed sectors will recover, but I feel confident and positive about our future. We see that our apartments are very much in demand, the queue for our new production is growing and we had a record number of apartments under construction during 2020. We are continually working on finding new sites to build on. Central Gothenburg needs more apartments, and we have many ideas about how we can densify the inner city further.”

What is happening in 2021?

”For the Gothenburg region, the high new construction rate in 2020 will result in many completed apartments during 2021, so there will be a strong focus on occupations. Among other things, the Godhems Backe project and the first apartments in the urban development project Kallebäcks Terrasser, which are part of the jubilee housing initiative – BoStad2021, will be fully completed and occupied.

It is also positive that Gothenburg’s ruling politicians have now taken a decision to get to grips with the refurbishment of Avenyn. We are looking forward to getting underway with this work and together investing in the area to further strengthen its attractiveness.”

RENTAL RATES (PRIME RENT) OFFICES GOTHENBURG

SEK/sq m

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3,800
3,600
3,400
3,200
3,000
2,800
2,600
0
16 17 18 19 20
CBD Other inner city
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YIELD REQUIREMENTS FOR OFFICE PROPERTIES GOTHENBURG

%

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----- Start of picture text -----

5.5
5.0
4.5
4.0
0
16 17 18 19 20
CBD Other inner city
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Rental trend for office premises in Gothenburg

In Gothenburg, there has been an imbalance for several years with higher demand than supply, which has led to a strong rental trend. The prime rent for offices, the highest rents in the most fashionable locations (based on observed lettings over 500 sq m), is about SEK 3,700 per sq m in the CBD (Central Business District) and SEK 2,800 per sq m in the rest of the inner city.

TRANSACTION VOLUME GOTHENBURG

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SEK billion
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----- Start of picture text -----

16
14
12
10
8
6
4
2
0
16 17 18 19 20
Office Retail Logistics/industry Residential Other
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The transaction market in Stockholm and Gothenburg

The transaction market during 2020 was strong, particularly in view of the prevailing pandemic. The second quarter in particular was adversely affected by the new situation, where uncertainty prevailed about where the market was heading. A total volume of about SEK 193 billion was reached in Sweden overall, a decrease of 22 percent from the previous year. Stockholm ac-

46 MARKET OUTLOOK

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VACANCY RATES OFFICES GOTHENBURG

%

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----- Start of picture text -----

10
8
6
4
2
0
16 17 18 19 20
CBD Other inner city Gothenburg, total
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OFFICE SPACE UNDER CONSTRUCTION GOTHENBURG AND MÖLNDAL

Sq m

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----- Start of picture text -----

250,000
200,000
150,000
100,000
50,000
0
16 17 18 19 20
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Vacancy rate and new construction of offices In 2020, the vacancy rate for offices amounted to 8.9 percent in Gothenburg overall, and 6.5 percent in the CBD. The vacancy rate for Wallenstam’s commercial properties amounts to 5.6 percent. Office space under construction has increased in recent years, although the volume at the end of 2020 was slightly lower than at the previous year-end. The completed new construction volume of office space in Gothenburg amounted to 11,900 sq m in 2020. This is a clear decrease from the previous year. However, in the next few years, the volume of newly produced commercial floor space is expected to increase again in both the CBD and the inner city. The general rental rates in the CBD correspond to the rental rates in new production just outside the CBD.

TRANSACTION VOLUME STOCKHOLM SEK billion

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----- Start of picture text -----

70
60
50
40
30
20
10
0
16 17 18 19 20
Office Retail Logistics/industry Residential Other
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Mathias Aronsson

Vice CEO Wallenstam AB, Regional Director Stockholm and Uppsala business area

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What are your reflections about 2020? ”It has been a strange year, where in many ways we have had to adjust and try new working methods and solutions. We have had a record year in terms of the number of occupations in our apartments, which has naturally implied a challenge under the circumstances brought on by Covid-19. Thanks to a fantastic effort from all employees, with new routines, for instance for digital viewings, we have been able to welcome tenants to just over 1,000 new apartments in our new production and also to apartments that became vacant in our existing holdings during the year. We have also focused on our commercial tenants, to support and help those affected by the pandemic.”

How has our new construction been impacted? ”Our new construction projects have progressed during the year and at year-end we had 857 apartments in production, including in the urban development project Umami Park in Sundbyberg. Some of the projects during the pandemic have been affected by minor delays with construction materials. However, this is not something that has impacted the projects in overall terms. Demand is still high and in 2021 we will hopefully start the construction of many new apartments in the Stockholm and Uppsala region.”

What do you look forward to in 2021? ”We have continued to work on acquiring building rights, and I can happily confirm that through a number of transactions and land allocations, we secured around 2,400 new building rights in 2020. In 2021, I am looking forward to getting our teeth into all of these new projects and pushing ahead so we can gradually offer just as many apartments to the market. Then I hope, just like so many others, that we will be able to put this Covid-19 period behind us. However, even if the virus continues to wreak havoc, we are well-prepared and I feel confident that our business is functioning even in challenging times.”

counted for SEK 54.7 billion or about 28 percent of the volume for the year 2020. Residential was the largest segment with SEK 22.6 billion, followed by offices with SEK 15.9 billion in completed transactions. In Gothenburg, transactions were completed with a value of about SEK 6.7 billion in 2020, which was less than half of the volume during the previous year. The largest segment here was also residential with about SEK 3.0 billion, followed by offices with about SEK 1.5 billion.

Source: JLL

MARKET OUTLOOK 47

REGIONAL DATA

REGIONAL DATA
	GREATER GOTHENBURG Outcome 2020 Trend 2021	STOCKHOLM COUNTY Outcome 2020 Trend 2021	UPPSALA COUNTY Outcome 2020 Trend 2021
Number of inhabitants Net infows, number of inhabitants Unemployment, % Employment, % Housing Rental rate new builds SEK/sq m/year Vacancy rate, % Yield level, % Number of apartment starts, units Rental market, size, SEK billion Rental market growth compared to 2018, % Ofces central location Rental rate “A” location SEK/sq m/year Vacancy rate, % Yield level, % Retail central location Rental rate “A” location SEK/sq m/year Vacancy rate, % Yield level, % Total ofce and retail space (Gothenburg), sq m Houses Municipal rental apartments Other rental apartments Housing co-ops Housing distribution by type	1,049,592 æ 3,471  8.5 æ 68.3  1,850–2,300 â 0 â 1.5–3.5 â 6,927 æ 13.5 æ 2.1 2,800–4,000 â 6.5 â 4.0–4.5 â 3,500–9,000 â 3.0–3.5 â 4.0–5.0 â 5,260,000 æ 39% 21% 17% 23%	2,391,990 æ 3,522  7.8 æ 71.5  2,100–2,700 â 0 â 1.5–3.0 â 10,584 â 28.6 æ 3.8 18% 41% 14% 27%	388,394 æ 3,573  8.0 æ 64.6  1,800–2,200 â 0 â 2.0–4.0 â 1,997 â 3.2 æ 5.9 32% 10% 14% 44%

• Refers to the whole of Västra Götaland County.

MARKET SHARES RENTAL APARTMENTS GREATER GOTHENBURG

MARKET SHARES RENTAL APARTMENTS GREATER STOCKHOLM

Property company	Market share, %
Wallenstam	2
Poseidon	16
Bostadsbolaget	14
Familjebostäder	11
Stena Fastigheter	4
SGS Studentbostäder	4
Balder Fastigheter	2
Other	47
Total	100

MARKET SHARES OFFICE AND RETAIL PREMISES, GOTHENBURG

	Property company	Market share, %
	Wallenstam	2
	Stockholmshem	9
	Svenska Bostäder	8
	Familjebostäder	6
	Hembla	4
	Stiftelsen Stockholms Studentbostäder	3
	Stockholms Kooperativa Bostadsförening	2
	Stena Fastigheter	2
	Akelius	2
	Einar Mattsson	2
	Other	60
	Total	100

Property company	Market share, %
Wallenstam	6
Platzer	9
Vasakronan Balder Fastigheter	7 6
Castellum	6
Other	66
Total	100

The market share is calculated on the basis of each property owner’s reported office and retail space in relation to the total office and retail space in the City of Gothenburg as assessed by Business Region Göteborg.

Source: JLL

48 MARKET OUTLOOK

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Wallenstam as joint owner in Convendum and Colive

Modern and flexible coworking spaces

Flexible office solutions have become a natural part of the cityscape and in the Swedish office market, particularly in the large cities. This new form of renting is meeting the need and desire for greater flexibility and Wallenstam sees major opportunities in the coworking concept as a complement to traditional office solutions.

The coworking company Convendum offers modern and efficient office solutions, in AAA locations in the central business districts of major cities. The company has so far established 13 modern coworking centers with a focus on flexibility, service, technology and design in Stockholm and Gothenburg. The company is currently a tenant of Wallenstam on Avenyn in Gothenburg, and will also establish in Umami Park in Sundbyberg, where Wallenstam is developing a new district incorporating both housing and commercial floor space for different businesses.

There is a strong demand for Convendum’s offer, among other things as a result of a change towards a more mobile and remote way of working and as some companies are seeking increased flexibility in their office solutions.

Wallenstam became a joint owner in Convendum in 2018. During 2019 and 2020, further shares were acquired.

WALLENSTAM’S OWNERSHIP IN CONVENDUM

Share of capital: 34.6%. Share of votes: 31.6%.

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Convendum
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HANS WALLENSTAM, CEO:

"Convendum is specialized in a form of letting, which complements Wallenstam’s business. We believe in the flexible coworking concept, and Convendum has a welldeveloped and attractive offering where we see interesting opportunities."

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Colive
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HANS WALLENSTAM, CEO:

"We want to meet the increased interest that we see for new housing solutions. It will be exciting to follow the development of modern collective living – through Colive. I hope and believe that it can become a popular product in today’s society."

Shared housing for modern collective living

We are keenly aware of how the market and demand are developing, and adapt our operations accordingly. This means that we also try new forms of housing, such as coliving apartments, a modern form of collective housing.

The concept means that four–twelve people share social areas and kitchen, and have their own bedroom. The common areas are furnished, the kitchen is fully equipped and the rent also include some services, such as cleaning of common areas. The apartments, that Wallenstam has built and owns, are let via Colive, which was founded in 2018 and is Sweden’s largest and first coliving operator. In 2020, Wallenstam’s first 17 coliving apartments were introduced with 85 rooms for rent in the Parkstråket project in Haninge. Planning is currently underway of a further coliving hub in Kallebäcks Terrasser in Gothenburg. The 12 coliving apartments with a total of 121 rooms for rent are expected to be ready for occupation during 2022. Wallenstam is a joint owner in Colive since 2020.

WALLENSTAM’S OWNERSHIP IN COLIVE

Share of capital: 25%. Share of votes: 25%.

WALLENSTAM AS JOINT OWNER IN CONVENDUM AND COLIVE 49

TAVOLO RESTAURANT

New York meets Italy in Artilleristallarna

At the end of September, Götaplatsgruppen opened the doors to the restaurant Tavolo in a spacious premises on Magasinsgatan in Gothenburg. Older details have been preserved and together with the carefully thoughtout decor, a cosy and timeless ambiance is created. Already in the week before the opening day, more than 11,000 people had booked a table.

RESIDENTIAL PROPERTIES, AGE STRUCTURE

Proportion that is Proportion that is >15 years, 39% <15 years, 61%

PROPERTY HOLDINGS, SQ M THOUSANDS

	Type of premises	Dec 31, 2020	Dec 31, 2019	Change
	Residential	600	570	30
	Ofce	240	236	4
	Retail/restaurants/cinema	106	110	-4
	Industry/warehouse	94	103	-9
	Education/health care	54	30	24
	Other	23	36	-13
	Garage	118	115	3
	Total	1,235	1,200	35

Property management

We manage 226 properties with a total of 1.2 million square meters, with a property value of SEK 58 billion. Residential properties are concentrated in the growth regions of Gothenburg, Stockholm and Uppsala, while the commercial properties are mainly concentrated in Gothenburg’s inner city. Property management is fundamental in our business model, with development, satisfied customers, efficiency and profitability in focus.

Property holdings

Investment properties include properties under current management and project properties for the company’s own holdings that are under construction, extension or reconstruction. Development properties, such as co-op apartments, are built with the intention of being sold and are not included as investment properties.

We have a well-balanced distribution between residential and commercial properties in good, attractive locations and built to excellent standards. About 60 percent of our residential holdings in terms of floor space were built 15 years ago or less. Of our approximately 10,000 apartments, 5,246 are located in Stockholm, 4,158 in Gothenburg and 542 in Uppsala. Apartment sizes correspond well to market demand. 66 percent of the apartments have 1-2 bedrooms.

Our commercial holdings, mainly consisting of office, retail and restaurant space, are concentrated in inner city locations and attractive office locations in Gothenburg. In all, we have around 1,000 commercial tenants.

Acquisitions and divestments

During the year, we acquired properties and land in all places we operate in – transactions that provide opportunities for future new construction, which will generate value growth and add homes to the market. In December, we sold our newly produced development property New

York at Gärdet in Stockholm. For details, see table on page 149.

Management with customers in focus

We aim to continually improve and meet our customers’ expectations in the best possible way, in relation to their housing, their workplace and of us as a landlord. Our guiding principle Customer clarifies how important the customer is for our operations, and we continually work to take care of our tenants’ needs, wishes and viewpoints. Read more on page 6.

Through the work on developing apartments, premises, properties and surrounding areas, we create value for our customers, visitors, the company and our shareholders. Management and the day-to-day operations are conducted with sustainability in focus and according to developed plans, routines and processes.

In Gothenburg inner city, we brought forward certain planned projects in the commercial holdings. For example, we have taken the opportunity to perform façade renovations during a period when there has been less customers as a result of the pandemic, and thus we have not needed to disrupt the business as much.

We have also adapted the operation of the properties in different ways, for example, we have added more containers to certain refuse rooms when more people are at home, and adapted the climate in commercial premises based on

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PROPERTY HOLDINGS AGE STRUCTURE
Sq m
400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0
before 1940 1950 1960 1970 1980 1990 2000 2010 2020
1940
Residential Commercial
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DISTRIBUTION, APARTMENT HOLDINGS
No. of apts.
5,000
4,000
3,000
2,000
1,000
0
Studio 1 bed- 2 bed- 3 bed- 4 bed-
room rooms rooms rooms
or larger
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PROPERTY MANAGEMENT 51

In July, it was the premiere for the specially designed experience store on Avenyn where Polestar is showing off its electric cars. The former cinema at Kungsportsavenyen 25 has obtained a stripped-down design featuring carefully and meticulously selected materials that put the cars into focus. The customers will be able to experience design, colors, details and, above all, get the opportunity to meet experts on-site, see and get a feel for the cars and book a test drive.

the fact that fewer people are there at the same time. The cleaning has been adapted with more focus on the cleaning of entrances, elevators and interfaces.

During the year, we also updated technical solutions in order to future-proof our properties’ energy systems and we carried out a number of energy saving projects in order to reduce our CO2 emissions. For example, we replaced district heating substations with new, more efficient heat exchangers and more energy-efficient pumps, carried out a water conservation project covering about 400 apartments and fitted indoor temperature sensors to secure the indoor climate for our tenants.

Development of our properties

We are also strongly committed to the development of our properties in order to create attractive and secure living environments and good conditions for the various businesses conducted. For example, we make adaptations based on tenant needs and improvements of the property and surrounding area to create pleasant environments. It is important for us to develop places, environments and experiences that contribute to a vibrant and attractive streetscape and good customer potential for the tenants operating businesses on the ground floor. For our office tenants, it is important that there are services, shops and restaurants that inject life into the local area. Therefore, we always take a holistic approach so that different businesses and activities can complement each other. Activities and efforts take place both on our own initiative and together with other local players, and with the city and joint action associations such as Avenyföreningen, Innerstaden Göteborg and Göteborg Citysamverkan.

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NET OPERATING INCOME PER SQ M
SEK
1,350
1,300
1,250
1,200
1,150
1,100
0
16 17 18 19 20
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THE TEN LARGEST COMMERCIAL TENANTS

	Tenant	Floor space, sq m
	Cityof Gothenburg EssityHygiene and Health AB Filmstaden AB Academedia AB GothenburgRegional Archives	19,846 15,639 14,508 11,427 11,000
	Västra Götalands CountyCouncil	10,128
	ICA Fastigheter AB	6,906
	Sandryds Handels AB	6,730
	Folkuniversitetet	6,308
	Frisk Service i GöteborgAB	6,212
	Total	108,704

At year-end, the rental value of our ten largest tenants corre - sponded to 8 percent of the total rental value or 17 percent of the rental value in the commercial holdings. The let area is equivalent to 21 percent of the total floor space in the commercial holdings.

INCOME FROM PROPERTY MANAGEMENT PER SQ M

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SEK
1,000
900
800
700
600
500
0
16 17 18 19 20
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Active letting

The occupancy rate in our properties is stable at 98 percent in

52 PROPERTY MANAGEMENT

total in terms of floor space. Our apartments are fully let and we notice strong demand for both our new production and the apartments which are let out in our existing holdings.

In our own housing queue for our newly constructed apartments in Gothenburg, Stockholm and Uppsala, about 130,000 people had registered as of year-end 2020. Our queue allocates most of our newly constructed apartments in Gothenburg, and half of the new production in Stockholm and Uppsala. The remaining new production and apartments that become vacant in the existing holdings are allocated in Stockholm and Uppsala via the municipal housing agency in each city, and in Gothenburg via HomeQ.

In order to contribute to a healthy and fair housing market, we are working in a structured way against improper rental conditions, which primarily relates to cases of unlawful subletting. Knowing who is living in the building is important for us as a landlord, but also for our tenants from a security perspective.

Despite the pandemic, we see a stable demand for our premises, particularly for our office space.

During the year, 1,334 newly constructed apartments, of which 1,284 are rental apartments, became ready for occupation, which is the highest ever number during a single year. Our letting agents worked with viewings, signing up tenants and occupations in our new construction projects as well as letting the apartments that became vacant in the existing holdings. The pandemic has meant that the digitalization process for letting, which to some extent had begun, was implemented in just a few months. The biggest change concerns apartment viewings, which now only occur digitally, both as a film and as a virtual viewing where apartment applicants can click their way around the apartment. In the existing holdings, lets have occurred based on the floor plans, and in certain cases the apartment has been filmed during the inspection. As most of the signing of contracts has occurred digitally, the only physical meetings have taken place during handover of the keys. The digital letting process has been highly regarded and is something we will continue with.

Despite the pandemic, we see a stable demand for our premises, particularly for our office space, which represents 19 percent of our total floor space. Stores and restaurants, 9 percent of our floor space, have been affected to a greater extent by the ongoing Covid-19 pandemic. Several letting processes that were underway early in the year were paused when the pandemic gained momentum in the spring. After the summer, many discussions resumed again and several new lets were made. During the year, we signed about 100 new commercial agreements covering about 23,000 sq m. The occupancy rate in our commercial properties amounted to 94 percent at year-end in terms of floor space. There should be some vacancy in the commercial holdings to effectively meet changing customer needs.

We have good knowledge of the local market and show great commitment in taking care of customer relationships, which is a good basis for successful letting operations.

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DISTRIBUTION RENTAL VALUE
BY TYPE OF PREMISES
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Other 1%
Garage 3%
Industry/warehouse 3%
Education/health care 5%
Cinema 1%
Restaurant 4%
Retail 8%
Residential 50%
Offices 25%
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TERMS RENTAL AGREEMENT PREMISES,
RENTAL VALUE
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2025–, 23% 2021, 20%
2024, 15%
2023, 19% 2022, 23%
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RENTAL AGREEMENT SIZE, PREMISES

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Over SEK 5.0 Under SEK 0.5
million, 21% million, 13%
SEK 4.0–5.0 SEK 0.5–1.0
million, 6% million, 16%
SEK 3.0–4.0
million, 9%
SEK 2.0–3.0 SEK 1.0–2.0
million, 16% million, 19%
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During the year, we have made a great effort to be extra available for our customers, many of whom have faced tough conditions as a result of the pandemic. We have worked together to find solutions that make it easier for the customers to maintain their businesses.

The surrender rate, which reflects how large a proportion of the cancellable leases are extended, was 87 percent in 2020. The total rental value of unlet commercial floor space amounted to about SEK 77 million at year-end.

Rental income

Rental income in 2020 amounted to SEK 2,131 million (2,026), an increase of 5 percent. The increase mainly came from our completed new production which entered into our management operations.

RENTAL INCOME, SEK MILLION

		2020	2019
	Gothenburg business area Stockholm business area	1,410 721	1,390 636
	Total	2,131	2,026

PROPERTY MANAGEMENT 53

FLOODLIGHTING

We are lighting up Gothenburg inner city

In connection with façade renovation and a general facelift of several of our properties along Avenyn and within the Inom Vallgraven district, we took the opportunity to contribute to more lighting in central Gothenburg. An initiative that exposes our tenants’ businesses and our fine façades in a beautiful way, but also contributes to general comfort and security in the streetscape.

Leases for apartments and parking spaces run for three months with automatic renewal, and rents are generally renegotiated once a year. During 2020, the rental increases in the base rent in comparable residential holdings amounted to 1.8 percent on average.

The average lease term in our commercial holdings is 2.3 years (2.0). Of the contracts’ rental value, 20 percent (24) may be renegotiated during 2021 but a business assessment is made for every lease. Rental agreements above SEK 1 million constitute about 70 percent of the Group’s commercial rental income. The base rent for Wallenstam’s commercial premises in comparable holdings increased by 4.7 percent, before increments, compared to the previous year, mainly due to completed new lets, renegotiations and cost index escalations.

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RENTAL INCOME AND SURPLUS RATIO
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SEK million %
2,200 76.0
2,100 75.5
2,000 75.0
1,900 74.5
1,800 74.0
1,700 73.5
1,600 73.0
0 72.5
16 17 18 19 20
Rental income Surplus ratio
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54 PROPERTY MANAGEMENT

Value of the properties

he market value of investment properties amounted to SEK 57,933 million (52,354) at year-end, and includes both properties in operation and apartment buildings for our own T management under construction. Excluding new constructions in progress, this is equivalent to about SEK 41,500 per sq m (38,900).

Our own work with new construction and property development are important components of sustainable and profitable value growth. During 2020, SEK 4,347 million (3,781) was invested in investment properties, of which SEK 460 million (511) related to acquisitions and SEK 3,887 million (3,270) related to new constructions, extensions and reconstructions. The value created through our new construction of investment properties, is reported separately in the income statement. This also includes the profit from newly constructed apartment buildings for our own management during the construction phase and until they have been in operation for one calendar year. Changes in value arising after newly constructed properties have been in operation for one calendar year are included in the changes in value that are recognized for the holdings in general. The right-of-use value for land granted with site leasehold rights is recognized as part of the properties’ value.

CHANGE IN THE PROPERTY HOLDINGS

	Book value, SEK million
Property holdings, January 1, 2020	52,354
+ Acquisitions	460
+ Construction	3,887
— Sales	-
+ Right-of-use asset, site leasehold right	73
+ Changes in value of properties	1,339
— Reclassifcation development properties	-180
Property holdings, December 31, 2020	57,933

A property’s unique characteristics determine its value, where a great emphasis is placed on location and standard. Our property holdings are concentrated in good locations in attractive metropolitan areas and hold their value well regardless of the economic cycle. The effects of Covid-19 have led to a difficult to judge market and in 2020 only a few minor adjustments to the yield requirement have been made. The average yield requirement for Wallenstam’s commercial properties amounted to 4.5 percent and to 3.1 percent for residential properties.

Our property holdings are concentrated in good locations in attractive metropolitan areas and hold their value well regardless of the economic cycle.

Property valuation

Wallenstam values its properties internally. We enjoy good market and property intelligence through active monitoring, which provides us with a firm basis for performing internal valuations of our property holdings. However, we must emphasize that a property’s fair value only becomes a reality when the property is sold, for which reason a valuation is always an estimation.

Valuation at fair value

Investment properties are valued at fair value and are divided into four different categories: investment properties in operation, new construction in progress of rental apartments for own management, investment properties undergoing comprehensive reconstruction and land and building rights.

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ACQUISITION, CONSTRUCTION AND SALES
OF INVESTMENT PROPERTIES
SEK million
5,000
4,000
3,000
2,000
1,000
0
-1,000
-2,000
16 17 18 19 20
Acquisitions Divested
New construction, Reclassification
extension and development properties
reconstruction
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CHANGES IN VALUE
INVESTMENT PROPERTIES
SEK million
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
16 17 18 19 20
Investment Investment Total
properties properties
other new construction
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VALUE OF THE PROPERTIES 55

INVESTMENT PROPERTIES IN OPERATION

Investment properties in operation are valued at fair value through a yield valuation. Every year, we carry out a great number of valuations. Some relate to our own property holdings and others are properties under consideration for acquisition. Analysis of these property transactions, completed or not, is one of the parameters considered during the valuation. Property values depend on market conditions, which change over time. Analysis of rental rates, contract lengths, vacancy and rental trends is conducted and planned investments. Even existing tenants and credit market conditions are analyzed and considered.

We use different yield requirements in the assessment of property values. These are based on each respective market. The yield requirement reflects market conditions and differs based on where a property is located, condition, type of property, etc. As our properties are valued individually, the portfolio premium that may exist in the property market is not taken into consideration.

Properties that are contracted for sale with taking of possession after closing day, are valued at the selling price from the contract date.

A yield value means that the net operating income of each individual property is divided by the yield requirement for the property concerned. The computed yield value is then compared with current price statistics for similar properties.

WALLENSTAM’S VALUATION MODEL

+ Rental value

• General vacancies of 3 percent in the commercial holdings

NEW CONSTRUCTION IN PROGRESS OF RENTAL APARTMENTS FOR OWN MANAGEMENT

The fair value of new construction in progress of rental apartments for own management is determined as cost plus the estimated surplus on the completion date in relation to the degree of completion of the construction. The degree of completion is based on the costs incurred.

INVESTMENT PROPERTIES UNDERGOING COMPREHENSIVE RECONSTRUCTION

The fair value of investment properties undergoing comprehensive reconstruction is based on the value prior to reconstruction plus subsequent costs incurred during the reconstruction project. When the building is completed or when critical factors such as rental rates have been determined with reasonable certainty, the property is again valued according to the yield valuation model.

LAND AND BUILDING RIGHTS

Land rights and building rights for zoned land are valued at market value using the comparative method.

Valuation at cost

DEVELOPMENT PROPERTIES

Development properties are properties that we intend to construct in order to divest on completion, for example co-op apartment properties.

Development properties are recognized at the lower of cost (investments incurred) and the estimated net realizable value. The profit/loss is recognized when the property or apartment is completed and handed over to the buyer. Selling and marketing expenses are recognized on an ongoing basis as they arise.

• Operating expenses including property tax and site leasehold rent, excluding administration

• = Net operating income

• / Yield requirement of the property

• = The property’s gross yield value

• Two years’ rent for vacant floor space

• Planned investments and significant repairs

• +/— Temporary additions/deductions

1,235,194 sq m

PROPERTY FLOOR SPACE TOTAL

We operate in Gothenburg, Stockholm and Uppsala. Approximately 50 percent of both the floor space and the rental value consists of residential properties. Offices represent about 20 percent of the floor space and about 25 percent of the rental value.

• = Estimated market value of property

AVERAGE YIELD REQUIREMENTS INVESTMENT PROPERTIES

Place	Property type	%
Stockholm	Residential	3.2
Stockholm	Commercial premises	4.6
Stockholm	Public use properties	3.1
Gothenburg	Residential	3.0
Gothenburg	Commercial premises	4.5
Gothenburg	Public use properties	4.3

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56 VALUE OF THE PROPERTIES

Property overview

Property overview
	Stockholm	Gothenburg		Compa-
	business	business	Total	rison
	area	area	2020	2019
Residential
Floor space, sq m, thousands	343.0	257.4	600.4	570.1
Proportion of total foor space, %	71.9	34.0	48.6	47.5
Proportion of rent, %	84.1	29.2	47.6	45.8
Average rent, SEK/sq m	1,854	1,698	1,787	1,721
Ofce
Floor space, sq m, thousands	33.0	207.0	240.0	236.3
Proportion of total foor space, %	6.9	27.3	19.4	19.7
Proportion of rent, %	5.1	36.9	26.2	27.1
Average rent, SEK/sq m	1,158	2,671	2,463	2,454
Retail/restaurant/cinema
Floor space, sq m, thousands	12.7	93.7	106.4	110.3
Proportion of total foor space, %	2.7	12.3	8.6	9.2
Proportion of rent, %	3.7	18.9	13.8	14.9
Average rent, SEK/sq m	2,187	3,040	2,938	2,899
Industry/warehouse
Floor space, sq m, thousands	9.2	84.7	93.9	102.9
Proportion of total foor space, %	1.9	11.2	7.6	8.6
Proportion of rent, %	0.9	4.3	3.1	3.1
Average rent, SEK/sq m	733	752	750	644
Education/health care
Floor space, sq m, thousands	6.0	48.4	54.3	30.3
Proportion of total foor space, %	1.2	6.4	4.4	2.5
Proportion of rent, %	1.9	7.0	5.3	3.0
Average rent, SEK/sq m	2,388	2,165	2,190	2,087
Other
Floor space, sq m, thousands	15.2	7.4	22.6	36.1
Proportion of total foor space, %	3.2	1.0	1.8	3.0
Proportion of rent, %	1.0	0.7	0.8	3.2
Average rent, SEK/sq m	510	1,473	825	1,868
Garage/parking spaces
Garage space, sq m, thousands*	58.2	59.4	117.6	114.8
Proportion of total foor space, %	12.2	7.8	9.5	9.6
Proportion of rent, %	3.4	3.0	3.1	2.9
Total
Floor space, sq m, thousands	477.3	757.9	1,235.2	1,200.7
Average rent, SEK/sq m**	1,744	2,081	1,954	1,913

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DISTRIBUTION, MARKET VALUE
Commercial, 40% Residential, 60%
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PROPERTY HOLDINGS’ DISTRIBUTION FLOOR SPACE BY MUNICIPALITY, STOCKHOLM REGION

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Uppsala, 8% Stockholm, 37%
Österåker, 1%
Solna, 1%
Tyresö, 3%
Haninge, 4%
Huddinge, 5%
Järfälla, 8%
Sundbyberg, 16%
Nacka, 17%
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PROPERTY HOLDINGS’ DISTRIBUTION FLOOR SPACE BY MUNICIPALITY, GOTHENBURG REGION

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Härryda, 8%
Mölndal, 5%
Partille, 1%
Gothenburg,
86%
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Heated garage space *Garage not included

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PROPERTY VALUE USING OTHER YIELD REQUIREMENTS

	SEK million
0.50 percentage points lower	66,340
0.25 percentage points lower	61,782
0.10 percentage points lower	59,399
Property value according to our estimate	57,933
0.10 percentage points higher	56,620
0.25 percentage points higher	54,658
0.50 percentage points higher	51,779

VALUE OF THE PROPERTIES 57

Value-creating construction

As an urban developer and one of Sweden’s largest private rental apartment producers for our own management, we work intensively to provide the market with new housing in pleasant and attractive locations. Our construction of both apartments and commercial premises creates value for the city, the company and our shareholders – and makes it possible for more people to get their own home, and for companies to establish and grow in our regions.

ur cost-efficient new production process means that we can build quality housing and premises while maintaining good control over production and costs. In this way, we O create value growth in our projects through our own work, regardless of the market climate. We show an average increase in value of 30–40 percent per invested krona in our newly produced rental apartments for our own management.

During 2020, SEK 3,887 million (3,270) was invested in new construction, extension and reconstruction of investment properties, and SEK 124 million (52) in construction of development properties. At year-end 2020, we had 2,321 apartments and 40,000 sq m of commercial floor space in production, a total investment volume of about SEK 6.8 billion in progress.

During the year, due to Covid-19, we have worked to secure material and labor for our projects in progress so that they can be completed on schedule, which has worked well. However, the municipalities’ processing times have become longer, which for us has meant that we were unable to start our planned projects at the rate we wanted. No projects have been cancelled, but some starts have been brought forward.

SUSTAINABLE CONSTRUCTION

For us, sustainable construction and development is something natural. Our new construction is continually improved to become more energy-efficient with solutions to reduce negative environmental impacts. We are also keen to create areas and outdoor environments where the residents and visitors enjoy being in and feel safe. Read more about our sustainability work on page 29.

Lively districts

Wallenstam is both a construction company and a property management company, and also has extensive experience of urban development and a unique combination of residential and commercial properties. If a district is to come alive and work together with the rest of the city, a holistic view is needed to create a balance between housing and the provision of services required. The layout, design and style are also important parameters for the attractiveness of the district, the property and the specific apartment or premises. By building mixed-use districts with different looks and

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58 VALUE-CREATING CONSTRUCTION

KALLEBÄCKS TERRASSER IN GOTHENBURG Occupation starts in 2021

During 2021, occupation starts in the area’s first two blocks. Letting is also underway of the modern and adaptable office space in the commercial property that we are constructing along the E6 motorway. Both future residential tenants and those who will work here can enjoy a fantastic location close to nature and services, and also easily accessible due to the proximity to public transport and traffic routes. In one of the buildings that is under construction, we are planning twelve co-living apartments with space for about 120 tenants, which will be let via Colive AB. So far, we have started the construction of almost 800 apartments of the total 1,800 that will exist here when the area is finished.

Our strong project portfolio includes potential future production for about 17,000 apartments, with a mix of our own land and land allocations.

different activities, the area gains the right conditions for a 24-7 city pulse with meeting places and access to services for those who live and work in the area.

Rental apartments in demand

We mainly build rental apartments for our own management. The rental apartment is a form of housing we safeguard and that is needed in our society. It is flexible and convenient and plays an important function for the individual, cities and development of the business sector. However, when we build, we adapt the form of tenure to what is demanded and possible in each individual project and therefore also build a small proportion of cooperative apartments. Our process, where sales of co-op apartments only occur when we have completed the project, makes it possible for us to convert into rental apartments when we notice weaker demand for co-op apartments. Prior to the start of each co-op apartment project, an alternative calculation is made, in order to ensure that the project is also economically viable as rental apartments.

There is still strong demand for our new construction projects, something that is noted in our own housing queue, in the municipal housing agencies in each city and in the number of applicants for every apartment. We started the construction of 551 apartments in our regions during the year, of which 84 were in the Stockholm business area and 467 in the Gothenburg business area. During 2020, we completed a total of 1,284 rental apartments, of which 17 were so-called coliving apartments with a total of 85 rooms for rent. The coliving apartments are let via Colive AB, whose concept means that a number of persons share social areas and kitchen, and have their own bedroom with bathroom.

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60 VALUE-CREATING CONSTRUCTION

Patrik Persson

Technical director

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ÄLTA CENTRUM IN NACKA

More new homes in Älta

In 2021, we are planning to start the construction of new residential properties and commercial premises in Älta Centrum. In Älta, we already manage more than 750 apartments and with the new project we are building an entirely new area with proximity to the water, walkways, sports opportunities and cultural life. In total, the plans involve around 950 new apartments and a new center featuring expanded services and retail.

How is Wallenstam’s new production developing? ”We are continually working on improving our construction both esthetically and technically, as part of being able to offer a qualitative product. It is about all from the design of façades and stairwell entrances to choice of materials and equipment in the apartments. We strive for a premium feeling in our rental apartments that you otherwise maybe most associate with cooperative apartments.

As standard for our new production, we are now also introducing digital mailboxes, which are being integrated with the properties’ digital entry system and will provide residents with easy and secure access to their homes and their mail.”

What are our challenges?

”To keep down production costs without compromising on quality is the overriding challenge that we have to deal with. Since we construct for our own management, we are careful to build in a way that does not just benefit the construction itself, we of course also take care of our own properties for a long time to come.

Another challenge is to handle the many requirements imposed by the municipalities in addition to the Swedish National Board of Housing’s building regulations. Often these requirements involve additional costs, but the fact that they also differ between different municipalities tends to increase costs. It is a great strength that Wallenstam has a competent organization and the power to drive all these processes so that we can meet the requirements in a positive way and contribute to more rental apartments in our cities.”

How important are environmental issues in Wallenstam’s construction operations?

”We put a great focus on environmental issues in our new production and work according to high standards from an environmental perspective. The energy use in the property is of central importance, connected to the EU’s directive on near-zero energy buildings. A large part of our properties’ energy supply comes from our own wind turbines and we now also have solar cells as a supplement. We have also worked for many years with constructing energy-efficient properties and have thus both the technical know-how and the required experience.”

VALUE-CREATING CONSTRUCTION VÄRDESKAPANDE BYGGNATION 61 Värdeskapande byggnation 61

UMAMI PARK IN SUNDBYBERG

The tenants are starting to arrive

In our urban development project Umami Park, both residential tenants and commercial activities have already moved into the first buildings. Now the letting of office space and apartments in phase 3 is in full swing. When Umami Park is finished, there will be about 800 apartments in the area. So far about 500 of these have been completed or are under construction.

New production of commercial properties

When we build commercial floor space, we mainly do so on the ground floor of our residential properties. We also build some purely commercial properties. For example, construction is ongoing of a commercial property involving mostly office space in the urban development project Kallebäcks Terrasser in Gothenburg. We see that demand for central office space in Gothenburg is still stable.

Strong project portfolio for the future

We work intensively to find different opportunities for more housing in selected markets and preferably in areas where we already operate and our ambition is to continue building regardless of market conditions. Building apartments in lofts or adding additional floors above an existing property are ways of densifying previously developed land. Demolishing a property, which is in poor condition and building again on the same land is another. We also have the possibility to convert, for example retail space into housing where this is suitable.

We are always looking for and evaluating ways to find undeveloped land that can be built on. We buy our own land and we also seek land allocations from the municipalities in the regions we work in. The latter case implies that the municipality either sells the land to us or lets it as a site leasehold right. This means the municipality owns the land and we pay an annual fee for use, known as site leasehold rent. Under Swedish law, such leasehold rights have no fixed contractual term, but run indefinitely.

Our strong project portfolio includes potential future production for about 17,000 apartments, with a mix of our own land and land allocations. The start of construction for these projects depends on the planning process, which can take varying lengths of time. We are continually working on replenishing our project portfolio with interesting new projects. During 2020, we obtained land allocations in Stockholm and Nacka and we purchased land for future new production in Täby, Österåker and Gothenburg.

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62 VALUE-CREATING CONSTRUCTION

NUMBER OF APARTMENT STARTS

No. of apts.

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1,400
1,200
1,000
800
600
400
200
0
16 17 18 19 20
Rental apts. Cooperative apts.
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APARTMENTS, CONSTRUCTION IN PROGRESS

No. of apts.

MÖLNLYCKE FABRIKER IN HÄRRYDA Tenants moved in during the first quarter

In Mölnlycke Fabriker, close to Mölnlycke centrum, where the old genuine factory buildings are being preserved and combined with new modern buildings, 61 apartments have been completed in the first block. A total of about 360 apartments are under construction in this area of natural beauty, which when fully developed will consist of about 700 new homes, a new sports hall and several commercial businesses. We are also building a garage with solar cells in the façade. The solar cells will produce energy for the garage’s lighting, charging stations for electric cars and in addition, they will also generate renewable energy for the electricity grid.

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3,500
3,000
2,500
2,000
1,500
1,000
500
0
16 17 18 19 20
Total
Stockholm business area, incl. Uppsala
Gothenburg business area
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CREATED SURPLUS VALUE IN COMPLETED NEW CONSTRUCTION

SEK million

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----- Start of picture text -----

3,500 43%
3,000
30%
2,500
2,000 45% 40%
1,500
1,000 36%
500
0
16 17 18 19 20
Investment cost Valuation
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17,000

APARTMENTS IN THE PROJECT PORTFOLIO Our project portfolio includes potential future production for about 17,000 apartments, with a mix of our own land and land allocations.

VALUE-CREATING CONSTRUCTION 63

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UPPSALA Gränby
We are building here Svartbäcken
Sala backe Årsta
Luthagen Centrum
STOCKHOLM
Fyrislund
Flogsta
Kungsängen
2
Eriksberg-Håga
Åkersberga
6
Norby Ulleråker
Sollentuna Täby
GOTHENBURG
Kortedala
5 7
Kviberg Partille
Sundbyberg
Solna Lidingö Gamlestaden
Bagaregården
Centrum
Boo
Örgryte
Nacka
10 9 15
12
Majorna Johanneberg 13 16
Krokslätt 18
8
3 Tyresö 11 14
Huddinge Trångsund Mölndal 17 19
Mölnlycke
Haninge
1 4
Askim
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We are building here

Project status

The time required for each phase can vary.

Approaching zoning plan

The concept phase where goals and starting points for the area are being developed.

Zoning plan in progress

The zoning plan is in progress, in other words a concrete and detailed proposed plan is being drawn up.

Adopted zoning plan The zoning plan is adopted but has not gained legal force, for example due to appeal.

Zoning plan gained legal force Construction

The zoning plan is adopted and has gained legal force. Site improvement permit or building permit is awaited before construction start.

6,000 APARTMENTS IN THIS PHASE

6,800 900 APARTMENTS APARTMENTS IN THIS PHASE IN THIS PHASE

3,400 2,321 APARTMENTS APARTMENTS WHERE IN THIS PHASE NEW CONSTRUCTION IS IN PROGRESS

17,000

APARTMENTS IN TOTAL IN THE PROJECT PORTFOLIO

64 WE ARE BUILDING HERE

New constructions in progress, Dec 31, 2020

STOCKHOLM BUSINESS AREA

	Project		Expected occupation *	Sqm **	Of which completed apts. to date
1.	Parkstråket 1,Haninge	154 i	Q3 2020	13,500	54
2.	Söra Kvarter,Österåker	305	Q3 2020	15,500	167
3.	Allén,Tyresö	221	Q4 2020	13,500	100
4.	Parkstråket 2,Haninge	131	Q4 2020	7,500	46
5.	Umami Park, phase 2,Sundbyberg	141	Q4 2020	9,500	106
6.	Flanören,Rosendal,Uppsala	161	Q3 2021	7,500
7.	Umami Park, phase 3,Sundbyberg	133	Q4 2021	10,000
8.	Bandhagen Centrum(co-op)***	84	2022	4,500
	Total apartments in projects	1,330		81,500
	of which in progress on Dec 31, 2020	857

GOTHENBURG BUSINESS AREA

	Project	No.	of apts.	Expected occupation *	Expected occupation *	Sqm **		Of which completed apts. to date
9.	Elisedal		336		Q4 2020	24,000		82
10.	Godhems Backe		138		Q4 2020	6,500		77
11.	Kv. Rosengången,Mölnlycke Fabriker,Härryda		123		Q4 2020	7,000		61
12.	Kallebäcks Terrasser Kv. 9		165		Q4 2021	9,500
13.	Kallebäcks Terrasser Kv. 11		270		Q4 2021	16,000
14.	Kv. Kvarnen,Mölnlycke Fabriker,Härryda		185		Q4 2021	10,500
15.	Kallebäcks Terrasser Kv. 8 ***		266		2022	15,000
16.	Kallebäcks Terrasser Kv. 10 ***		85ii		2022	8,000
17.	Kv. Väven, Mölnlycke Fabriker, Härryda ***		116		2022	7,000
	Total apartments in projects		1,684			103,500
	of which in progress on Dec 31, 2020		1,464
							*	Refers to estimated start of occupation.
								Occupation will occur gradually, often
18.	Commercial Kallebäcks Terrasser		Sqm ** 20,000		Expected occupation * 2021		**	over several quarters. Number of sq m includes garage, and is rounded of to the nearest 500.
19.	Mölnlycke Fabriker		20,000iii			2021	*** i	Started during 2020. of which 17 are co-living apartments with
	Total		40,000					a total of 85 rooms for rent.

ii of which 12 are co-living apartments with a total of 121 rooms for rent.

iii Refers to two sports centers and a multistorey carpark.

Project process

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1
2
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CONCEPT. A project begins life as a concept that is evaluated in a preliminary study. Depending on the conditions, for example if there is a zoning plan, if we have obtained a land allocation etc., this phase takes a varying length of time. When the conditions of the site are clear we produce a calculation. After that an investment decision is taken and the financing is secured.

PLANNING. In the planning phase, the work on design, layout, projecting and costing becomes more advanced. We ensure that the project meets our yield requirements and perform a final decision calculus. When all of the drawings and supporting documents are ready, contracts are negotiated and awarded.

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3
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----- Start of picture text -----

4
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CONSTRUCTION. During the construction period, we follow our processes and quality requirements, which are based on market standards and our own experience from earlier projects.

LETTING/SALE. Rental properties after completion become part of our property management operations, while development properties and cooperative apartments are sold. A financial follow-up is made, as well as an evaluation from a customer perspective, so that valuable experience can be used in future projects.

WE ARE BUILDING HERE 65

Five-year summary

SEK million	2020	2019	2018	2017	2016
CONDENSED INCOME STATEMENT
Rental income	2,131	2,026	1,910	1,701	1,607
Operatingexpenses	-519	-497	-481	-437	-432
Net operating income, properties	1,613	1,529	1,429	1,264	1,175
Management costs and administrative expenses	-243	-228	-211	-210	-193
Net fnancial items	-239	-194	-207	-248	-249
Income from property management	1 131	1,108	1,011	806	733
Capital gain/loss wind power assets	-	-	-	-	-
Participation in profts/losses of associated companies	-1	-5	-	-	-
Realized change in value, fnancial instruments	4	-	-767	-	-
Realized change in value, synthetic options	-	-	-	-54	-
Proft/loss co-op apartments and development property sales	167	92	114	46	22
Other income and expenses, includingother fnancial expenses	-48	-26	-34	-38	-60
Proft before changes in value and impairment losses	1,253	1,169	324	759	695
Changes in value, investment properties	1,339	2,600	1,832	2,562	3,640
Unrealized changes in value, fnancial instruments	-162	-264	778	182	-130
Unrealized changes in value, synthetic options	-36	-40	-13	-2	-7
Impairment losses and reversals, wind turbines	-	0	524	-500	-
Proft before tax	2,393	3,464	3,445	3,001	4,198
Taxes	-485	-727	-447	-580	-850
Proft for the year, after tax	1,908	2,737	2,998	2,421	3 348
CONDENSED BALANCE SHEET
Investment properties	57,933	52,354	45,811	41,410	36,555
Wind turbines	1,033	1,109	1,167	682	1,277
Participations in associated companies	220	133	113	-	-
Financial derivative instruments	10	8	50	28	12
Other non-current assets	610	620	472	433	439
Development properties	126	175	317	606	734
Other current assets	648	290	332	514	385
Total assets	60,581	54,689	48,262	43,673	39,402
Equity	25,558	23,794	21,611	19,410	17,788
Provisions for deferred tax	5,811	5,322	4,595	4,146	3,568
Other provisions	142	188	68	56	-
Interest-bearing liabilities and lease liabilities	27,785	24,302	21,244	18,701	16,473
Financial derivative instruments	525	358	82	797	970
Non-interest-bearingliabilities	761	725	662	563	603
Total equity and liabilities	60,581	54,689	48,262	43,673	39,402

ALTERNATIVE PERFORMANCE MEASURES (APM)

Wallenstam presents a number of financial measures that are outside IFRS definitions (Alternative performance measures, according to ESMA’s guidelines) with the aim of enabling effective evaluation of the company’s financial position and performance for investors and for the company’s management. This means that these measures are not always comparable with measures used by other companies and shall therefore be considered as a complement to measures defined according to IFRS. Wallenstam applies these alternative key ratios consistently over time. The definitions describe how Wallenstam’s key ratios are calculated. The key ratios are alternative performance measures according to ESMA’s guidelines unless otherwise stated.

Equity and total assets on average:

SEK million	2020	2019	2018	2017	2016
Equity, excl. non-controlling interests	25,557	23,792	21,609	19,408	17,776
Average equity	24,528	22,329	20,305	18,665	16,034
Total assets	60,581	54,689	48,262	43,673	39,402
Average total assets	57,708	51,306	45,728	41,293	36,659
For average values, add the latest fve periods and divide by fve.

66 FIVE-YEAR SUMMARY

	2020	2019	2018	2017	2016
PROPERTY-RELATED KEY RATIOS
Net operating income, properties, SEK million	1,613	1,529	1,429	1,264	1,175
Surplus ratio, property management, %	75.7	75.5	74.8	74.3	73.1
Income from property management, SEK million	1,131	1,108	1,011	806	733
Changes in value, new construction, SEK million*	853	792	598	733	1,195
Value of investment properties, SEK million	57,933	52,354	45,811	41,410	36,555
Area, sq m (thousand)	1,235	1,201	1,186	1,145	1,074
Occupancy rate, lettable area, %	98	98	99	98	98
Development properties, net, SEK million	126	175	317	606	734
FINANCIAL KEY RATIOS
Proft after tax, SEK million	1,908	2,737	2,998	2,421	3,348
Return on equity, %	7.8	12.3	14.8	13.0	20.9
Return on total capital, %	4.6	7.2	9.7	8.0	12.2
Interest coverage ratio, times	5.8	6.3	1.3	3.8	4.1
Loan-to-value ratio, %	46	45	45	43	43
Average interest rate on closing day, %	1.21	1.22	1.06	1.88	1.97
Average fxed-interest term, months	41	38	39	36	37
Equity/assets ratio, %	42	44	45	44	45
Equity, SEK million	25,558	23,794	21,611	19,410	17,788
Net asset value, SEK million	31,746	29,501	26,574	24,314	22,159
Market capitalization, SEK million	43,098	37,356	27,126	26,037	24,106
Dividend, SEK million	162	614	583	556	497
Repurchase of shares, SEK million	-	-	229	235	192
PER-SHARE DATA
Net asset value per share, SEK	98.30	91.30	82.30	74.60	67.40
Proft after tax , SEK	5.9	8.5	9.3	7.4	10.1
P/E ratio, times	22.1	13.4	8.9	10.7	7.0
Cash fow from operating activities, SEK	3.8	4.2	1.1	2.6	2.0
Equity, SEK	79	74	67	60	54
Share price, SEK	130.60	113.20	82.20	78.90	70.90
Dividend, SEK (2020 refers to proposed dividend)	1.20	0.50	1.90	1.80	1.70
Shares outstanding, average, thousands	323,000	323,000	323,854	327,333	330,409
Shares outstanding at end of period, thousands	323,000	323,000	323,000	326,000	329,000

Earnings-based key ratios are calculated on the average number of outstanding shares; yield figures are calculated on rolling twelve-month profit or loss.

• Effect of altered definition relating to new construction and other investment properties:

SEK million	2016
CHANGES IN VALUE, INVESTMENT PROPERTIES
New construction previous defnition	978
New construction updated defnition	1,195
Other previous defnition	2,493
Other updated defnition	2,275

FIVE-YEAR SUMMARY 67

How to read our income statement

Our income statement is presented to reflect our various main areas: income from our property management operations, profit/loss from sales of development properties and profit/loss from changes in value in our property holdings from construction and management.

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|||||
|---|---|---|---|
|Income from property management operations|
|Consolidated income statement|shows how large a share of rental income remains|
|after deducting expenses for the properties’ opera-|
|SEK million|tion, management, administration and financing.|2020|2019|
|Rental income|Profit from sales of development|2,131|2,026|
|properties is recognized when|
|Operating expenses|the customer has taken posses-|-519|-497|
|Net operating income, properties|sion of the apartment or proper-|1,613|1,529|
|ty and consists of compensation|
|from the sale less the cost and|
|Management costs and administrative expenses|-243|-228|
|other expenses.|
|Financial income|4|4|
|Financial expenses|-243|-198|
|Income and expenses from electricity ge-|
|Income from property management operations|1,131|1,108|
|neration (production revenue/expenses,|
|administrative fees and depreciation of|
|Realized change in value, financial instruments|wind turbines) as well as additional other|4|-|
|Participation in profits/losses of associated companies|income and expenses are recognized as|-1|-5|
|other income and other expenses.|
|Revenue, development property sales|537|324|
|Expenses, development property sales|-371|-232|
|Other income|168|298|
|Financial expenses were attributable to|
|Other expenses|wind turbines.|-195|-299|
|Other financial expenses|-21|-25|
|Profit/loss before changes in value and impairment losses|1,253|1,169|
|The increase in value is gradually recognized during the|
|Change in value, investment properties|construction of the property until the property has been|1,339|2,600|
|New construction|in operation for one calendar year. Changes in value|853|792|
|Other|after one calendar year in full operation are recognized|486|1,808|
|as Other.|
|Unrealized change in value, financial instruments|-162|-264|
|Unrealized change in value, synthetic options|-36|-40|
|Profit before tax|Change in value Other recognizes chang-|2,393|3,464|
|es in value for all investment properties,|
|which have been in operation for one|
|Current tax|calendar year or more.|0|0|
|Deferred tax|-485|-727|
|Profit for the year after tax|1,908|2,737|
|Consolidated statement of comprehensive income|
|Items that may be reclassified to profit/loss for the year|
|Translation difference|24|1|
|Wallenstam’s derivative instruments|
|Change in value, currency derivatives|are continually measured in relation to|-2|-1|
|Items that may not be reclassified to profit/loss for the year|current market interest rates and electri-|
|Change in value, holdings of unlisted equity instruments|city prices, resulting in changes in value|-|60|
|Change in value, owner-occupied properties|recognized through profit or loss. As long|-|1|
|as the derivative remains unrealized, the|
|Tax attributable to other comprehensive income|item does not afect cash fow or average|-3|-1|
|Comprehensive income|interest. Also includes change in value of|1,927|2,796|
|listed holdings.|

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Change in value of holdings of unlisted equity instruments recognizes unrealized change in value in unlisted companies which are not subsidiaries or associated companies.

68 HOW TO READ OUR INCOME STATEMENT

Administration report

The Board of Directors and the Chief Executive Officer of Wallenstam AB (publ), corporate identity number 556072-1523, hereby submit the following annual accounts and consolidated financial statements for 2020. Information in parenthesis refers to the preceding financial year.

This is Wallenstam

Wallenstam was founded in 1944 and is today a property company that builds, develops and manages properties for sustainable living and enterprise, primarily in the Stockholm and Gothenburg regions. Ownership is focused on residential properties in these two locations, and also on commercial properties in Gothenburg. The Wallenstam B share is listed on Nasdaq Stockholm, Large Cap.

Wallenstam is self-sufficient in renewable energy through its 66 own wind turbines in operation with an installed output of 143 MW (143). Production covers our own properties’ energy needs and those of our tenants.

Business concept

We develop and manage people’s homes and workplaces based on a high level of service and long-term sustainability in selected metropolitan areas.

Operational goals

The goal for the business plan 2019-2023 is to achieve an increase in net asset value of SEK 40 per share. Net asset value growth shall be created by successful letting, efficient management, valuecreating investments, cost-efficient new construction and strong business operations. The goal is measured from October 1, 2018 when the net asset value per share was SEK 79.20. On December 31, 2020, the net asset value per share was SEK 98.30 (91.30), which represented an increase of SEK 7.00 per share (9.00) during 2020 and SEK 19.10 per share in total to date during the business plan.

Operations and organization

The Board of Directors has its registered office in Gothenburg, where the head office is also located on Kungsportsavenyen 2. In 2020, the average number of employees in the Group totaled 252 (254). Operations are conducted in two overall business areas: properties in the Gothenburg region and properties in the Stockholm region. Both business areas also include responsibility for letting and management of residential properties and commercial premises as well as planning and construction work. The administrative support functions provide the business areas with skills and expertise in accounting, finance, IT, law, communications, customer service and HR.

Construction

Wallenstam mainly builds rental apartments but also builds development properties. At year end, investments in progress amounted to SEK 6.8 billion (5.8), of which SEK 4.5 billion (3.8) was invested during the year. In the Stockholm region, we are currently constructing about 900 apartments and in the Gothenburg region, construction of about 1,500 apartments is in progress.

Property management

The property holdings comprise a total of 1.2 million sq m, distributed among about 230 properties, primarily in Gothenburg and Stockholm. In all, Wallenstam has around 10,000 apartments and 1,000 commercial tenants. Residential properties represent around 49 percent of the lettable area, while the remainder consists of commercial floor space and parking. The majority of the apartments, 5,800, are found in the Stockholm region, about 500 are in Uppsala and almost 4,200 are in the Gothenburg region. Corporate customers are mainly found in Gothenburg where we have about 900 commercial tenants that rent office and retail premises, mostly in Gothenburg inner city locations. The residential apartment holdings are fully let and the occupancy rate in terms of floor space for commercial premises is 94 percent. The value of investment properties amounts to around SEK 58 billion.

Responsible enterprise

Wallenstam’s sustainability efforts are based on a common Group policy and are reported according to the Global Reporting Initiative’s guidelines (GRI Standards). Issues that emerged in the materiality analysis 2018 and that we actively worked with are climate impact and reduced emissions, reduced energy usage, that Wallenstam should take an active social responsibility in questions such as diversity and gender equality, fight corruption and bribery and create value through profitable development.

As part of our social engagement work, we want to actively work to ensure safer areas and districts for our tenants. We achieve this by providing housing for young and homeless people, through support to organizations such as BRIS (Children’s Rights in Society), Barn i Nöd (Swedish International Help for Children) and Räddningsmissionen (the Rescue Mission) and to organizations that prevent domestic violence. By owning and operating wind farms, the Group conducts operations that both require permits and that have a reporting duty under the Swedish Environmental Code. The Group holds all the permits required to conduct its existing operations. One advantage of wind power as a renewable energy source is that Wallenstam is contributing to reduced carbon dioxide emissions, which means that we are not dependent on fossil fuels in our electricity production.

Sustainability Report

In accordance with Chapter 6, Section 11 of the Annual Accounts Act, Wallenstam has chosen to prepare the sustainability report as a separate report from the Annual Report. The sustainability report is found on the following pages: business model pages 2–4, environmental questions pages 8, 29–35, 41 and 150–152, social conditions and personnel-related questions pages 7, 29-37, 42–44 and 150–152, respect for human rights pages 29–35 and 151–152, anti-corruption pages 29–31, 33, 38 and 152 as well as diversity in the Board pages 44 and 136. The sustainability report was submitted to the auditor simultaneously with the annual report.

Important events during the financial year

On March 11, 2020, Covid-19, the global virus infection, which was detected in the latter half of 2019, was classified as a pandemic. The impact has been far-reaching for the business community, policy and not least for people all around the world.

The Wallenstam Group entered the crisis early in the year with a strong position both in terms of financial stability and well-located property holdings. The Group has evenly distributed property holdings between residential and commercial, where the commercial side has faced the most strain during the pandemic. As a landlord, the Group tries to work close to the tenants, which also applies in particularly uncertain times to the challenges that have arisen as a consequence of Covid-19. In the first place, we have provided support through temporary rent discounts but also through the purchase of goods and services aimed at helping our tenants to maintain their regular business. 12 percent of our total rental value consists of tenants that are included in the government’s list of the most exposed sectors that are entitled to rent support. Aside from discounts, we have also offered deferrals with rent payments to a smaller number of tenants. In total, rent discounts and other support related to Covid-19 amount to about SEK 30 million. Of these, we have received about SEK 9 million in government support. Both discounts provided as well as support have been recognized as rental income. For more information about Wallenstam and Covid-19, see page 18.

The offensive investment tempo in new construction continued. Investments are focused on our own new construction of mainly rental apartments, but also on a smaller proportion of development properties. At year-end, 2,321 apartments were under construction. In all, we started construction of 551 apartments during the year and completed 1,334 apartments.

ADMINISTRATION REPORT 69

Group results

Rental income

Group rental income increased by just over 5 percent and amounted to SEK 2,131 million (2,026). Growth was mainly the result of occupations in our recently constructed apartment buildings and of a continued positive market trend. The base rent in comparable holdings increased by about 1.8 percent for residential properties. For commercial premises, the corresponding increase before increments compared to the previous year, was 4.7 percent, mainly due to completed new lets and renegotiations as well as index agreements.

Operating expenses and net operating income, investment properties Operating expenses for the year amounted to SEK 519 million (497). Seasonal effects at Wallenstam consist mainly of climate-related variations. In 2020, these were almost SEK 8 million (6) lower compared to the preceding year. Net operating income increased by just over 5 percent and amounted to SEK 1,613 million (1,529). The surplus ratio was 75.7 percent (75.5).

Management costs and administrative expenses

Management costs and administrative expenses mainly refer to personnel expenses and are distributed into SEK 243 million (228) for property management, SEK 11 million (20) for energy management and SEK 5 million (6) in total for property transactions.

Financial income and expenses

Financial income amounted to SEK 4 million (4) and financial expenses to SEK 263 million (223). Financial expenses are distributed into property management expenses and other (wind turbines) SEK 243 million (198) and SEK 21 million (25), respectively.

Profit from sales of development properties

Revenue and expenses from the sale of development properties are recognized when the apartment or property is handed over to the buyer and consists of compensation from the sale and the cost. Selling and marketing expenses are recognized on an ongoing basis as they arise. Net profit for the year from sales amounted to SEK 167 million (92) and included sales of the development property New York, a small number of individual co-op apartments and units in the co-op apartment project Vasagatan 33, including expenses.

Other income and Other expenses

The Group’s electricity production was mainly recognized as other income and other expenses.

Electricity revenue for the year was significantly lower than the previous year. This was mainly explained by the divestment of the electricity trading business area. Production of electricity increased, by 13 percent in total compared to the previous year, and amounted to 417 GWh (367). The price of electricity and renewable energy certificates decreased, however, which meant that sales from electricity production were lower compared to the previous year.

In the fourth quarter, other expenses were impacted by SEK 24 million in respect of currency effects, which in previous years were recognized in Other comprehensive income and are now transferred to the income statement. Corresponding positive items are found in Other comprehensive income as this is only a presentational issue with no impact on consolidated comprehensive income.

Changes in value of investment properties

The development in the value of properties during the year was positively affected by an increase in value generated by our own work in ongoing and completed new constructions, extensions and reconstructions of rental apartments, more efficient operation, completed rental negotiations and the market situation in the sector. Our new construction of properties created total value growth of SEK 853 million (792). Our deliberate strategy of concentrating on attractive properties in popular locations with long-term value growth and continued strong demand and price increases in the market is reflected in valuations mainly through improved net operating income.

Total changes in value in Wallenstam’s property holdings as of December 31, 2020 amounted to SEK 1,339 million (2,600).

Unrealized change in value, financial derivative instruments

Unrealized change in value, financial instruments in the income statement includes changes in value of interest rate and electricity derivatives and holdings of listed shares.

The value of interest rate and electricity derivatives developed negatively during the year. The change in the value of interest rate derivatives was SEK -161 million (-269). On closing day, the 10-year swap rate amounted to 0.37 percent, compared to 0.68 percent at the start of the year.

Synthetic options

The Annual General Meeting on April 24, 2018 resolved to introduce a synthetic options scheme directed to all personnel. The term of the scheme runs until May 31, 2024 and the expected cost in the event of a maximum outcome is SEK 330 million. The value of the synthetic options varies with Wallenstam’s share price. Unrealized expense for 2020 amounted to SEK 36 million (40). To date, the total recognized obligation for the scheme amounts to SEK 89 million (53). For more details, refer to Note 5.

Tax

The recognized tax expense for the period, which consisted in its entirety of deferred tax, amounted to SEK 485 million (727) net.

The Group’s largest tax expenditures consist primarily of VAT expenses – for which we have a limited right of deduction as a property company – and property and energy taxes, stamp duty and personnel-related taxes and charges. These expenses, which amounted to SEK 897 million (717) for the full-year 2020, are recognized among operating expenses within income from property management and investments in the construction operation.

SPECIFICATION OF TAXES PAID

SEK million	2020	2019
VAT	712	531
Property tax, energy tax and stamp duty	133	134
Social securitycontributions for employees	53	51
Total paid taxes	897	717

Consolidated balance sheet

Investment properties

During the year, we invested SEK 4,347 million (3,781) in investment properties, of which acquisitions amounted to SEK 460 million (511), while new construction, extensions and reconstructions totaled SEK 3,887 million (3,270). The estimated market value of the properties amounts to SEK 57,933 million (52,354), including the right of use value for land granted with site leasehold rights of SEK 476 million (402). All Wallenstam’s properties are valued quarterly by an internal valuation team. For more information, refer to Note 15.

Development properties

Development properties are properties that are constructed with the intention of being sold on completion. They are recognized at cost in the balance sheet. The profit is recognized when the properties are completed and handed over to the buyer. Investments in construction of development properties, amounted to SEK 124 million (52) during the year. On closing day, Wallenstam’s development properties totaled SEK 126 million (175) and consisted of the co-op apartment project Bandhagen Centrum in Stockholm, remaining apartments in the project Vasagatan 33 in Gothenburg, and a small number of projects at an early stage.

Wind power

On closing day, Wallenstam had 66 wind turbines in operation divided among 20 wind farms. The installed output amounted to 143 MW (143).

Wind turbines are recognized at the lowest of cost less deprecia-

70 ADMINISTRATION REPORT

tion and impairment losses and the estimated net realizable value. Depreciation for the period amounted to SEK 76 million (76). Estimated value in use of land leases, based on so-called minimum rents, amounted on closing day to SEK 16 million (17) and is recognized as part of the wind power value. On December 31, 2020, the consolidated book value of wind turbines amounted to SEK 1,033 million (1,109). The renewable energy certificate inventory amounted to SEK 1 million (14) on closing day.

Equity and net asset value

Shareholders’ equity amounted to SEK 25,558 million (23,794), equivalent to SEK 79 per share (74). The equity/assets ratio was 42 percent (44). Net asset value, which includes equity and deferred tax liability, totaled SEK 31,746 million (29,501).

Net tax liability

The Group recognized a net tax liability of SEK 5,811 million (5,322), which consists of a deferred tax asset of SEK 377 million (387) and a deferred tax liability of SEK 6,188 million (5,709). The deferred tax asset mainly refers to the value of loss carryforwards in Group companies and deficit values from interest rate derivatives. The deferred tax liability mainly consists of differences between the carrying amounts and fiscal values of Group properties.

Interest-bearing liabilities

Wallenstam’s interest-bearing liabilities amounted to SEK 27,785 million (24,302), of which lease liability amounted to SEK 493 million (421). The loans are primarily secured against traditional mortgage deeds in properties. The loan-to-value ratio is 46 percent (45). Of the loan portfolio, 50 percent (41) has fixed interest terms longer than one year. The average remaining fixed interest term is 41 months (38). On closing day, the average interest rate on our loans, which takes into account the effect of entered into derivatives, was 1.21 percent (1.22). Of the interest-bearing liabilities with credit institutions, loans with capital tied up for long terms amounted to 23 percent (16) of the total portfolio.

For information on all of the Group’s financial instruments and financial risk management see Note 30.

Available liquid assets

Available liquid assets, including available bank overdraft facilities, amounted to SEK 1,318 million (928). Approved overdraft facilities amounted to SEK 800 million (800), of which no portion was used on closing day. At the end of 2019, the EIB (European Investment Bank) approved a credit facility of SEK 2,500 million for new construction of energy-efficient rental apartments. During the year, SEK 2,500 million (-) was drawn down from the facility. During the third quarter, we opted to reduce the backup facility for commercial paper from SEK 4,000 million to SEK 3,000 million, since we have a lower volume of outstanding commercial paper. The Group’s approved and unutilized credit facilities totaled SEK 3,000 million (6,500), excluding the overdraft facility.

On December 31, 2020, accessible liquidity totaled SEK 4,318 million (7,428), of which SEK 2,470 million (3,993) represents a credit commitment for issued outstanding commercial paper.

Opportunities and risks

Minimizing risks and optimizing opportunities is an integrated part of our business plan. Wallenstam’s employees participate in both the risk inventory and the preventative work. Wallenstam has defined risks and uncertainties in the areas operations and external environment. All events cannot be foreseen. For this reason, part of Wallenstam’s risk work involves being prepared for crisis management

Operations

Operational risks are those related to our core activities. There are risks in production and management of properties, for example for occupational accidents and unforeseen events, which are handled by adopting a working environment plan at an early stage and appointing coordinators. We develop long-term relationships with contractors and suppliers and have established routines for random inspections and checks to ensure that our partners follow agree-

ments entered into and our Code of Conduct.

Clear processes and routines for procurements and sourcing help offset the risk of corruption. For instance, at least two persons shall jointly review and authorize lettings and purchasing and also check tenders and agreements prior to signing.

Good relationships with several lenders provides good financing possibilities. Financing is always secured before new construction starts, which eliminates the risk of low liquidity.

We work continually to maintain well-functioning and fit-for-purpose IT security for our operations and ensure that information is handled securely.

Focus on employees is considered important for quality and satisfied customers. By offering a good working environment, attractive and market-related employment conditions, health and wellness training, skills development etc., we can recruit and retain employees with the right profile and competencies. Recruitment is prioritized as a strategic area.

External

External risks are mainly those that lie outside of our operations, for example in the form of changing market conditions.

Property values are affected by our own property management activities and general market conditions. Having properties in attractive locations lowers the risk of falling values during an economic downturn. Small changes in the yield requirement can deliver large changes in value. As of December 31, 2020, the estimated market value of the properties amounted to around SEK 58 billion. A change in value of plus/minus 10 percent is thus equivalent to about plus/minus SEK 5.8 billion. A general change of 0.25 percentage points in property yield requirements is equivalent to about SEK -3.3 billion or SEK +3.8 billion.

A change in the electricity price of 1 öre per kWh is equivalent to about plus/minus SEK 39 million (41) during valuation of wind turbines, while a change in the renewable energy certificate price of 1 öre per kWh is equivalent to about SEK +19 million or SEK -3 million (plus/minus 21) during valuation of wind turbines before tax.

A change in the interest rate of plus/minus 50 points is equivalent to about plus/minus SEK 68 million (67) before tax.

Factors such as interest rate increases result in higher costs and have a large impact on profits. Wallenstam’s management includes a loan portfolio with different maturities, where the loans are spread among various forms of credit and lenders. Interest rate derivatives are used to obtain a desired interest maturity profile.

Supply and demand for Wallenstam’s products can vary over time. Wallenstam owns and manages properties in attractive areas, which are characterized by growth and strong demand. We have a flexible business model, which provides the possibility to adapt supply, form of tenure etc. in the event of changing demand. A keen awareness for market trends as well as advance planning are two key factors.

Wallenstam follows developments in legislation and regulations linked to issues concerning our operations. Legal cases and regulatory changes that may result in changed conditions are interpreted and we are proactive in meeting new requirements, practice and laws.

Board work during the year

Wallenstam’s Board, due to the passing of Christer Villard during fall 2019, was composed of four members until April 28, 2020. From the Annual General Meeting on April 28, 2020, the Board has been composed of five members. In 2020, the Board held 13 recorded meetings in addition to day-to-day contacts.

The Board’s most important task is to make decisions on strategic matters. In general, the Board handles issues of material importance for the Group. The Board work during the year was dominated by the ongoing Covid-19 pandemic and focused in particular on strategy discussions, questions relating to market conditions and financing, sustainability and compliance issues and investments. The Board’s work is described in the Corporate Governance Report, which is separate from the Administration Report and can be read on page 135.

ADMINISTRATION REPORT 71

Guidelines for salaries and compensation for senior executives The 2020 Annual General Meeting approved the following guidelines, which shall be applied to remuneration that is agreed, and changes made in already agreed remuneration, after the guidelines are approved.

The guidelines cover the CEO and other members of the company’s Group Management, which includes Hans Wallenstam, Mathias Aronsson, Marina Fritsche, Susann Linde, Elisabeth Vansvik and Patrik Persson. The guidelines also cover consultancy fees for Board members who perform other work than pure Board work for the company.

The guidelines do not cover remuneration that is approved by the general meeting of shareholders.

Guidelines for promoting the company’s business strategy, long-term interests and sustainability

The company’s business strategy in brief is to cost-efficiently build, develop and manage properties and areas, based on a high level of service and long-term sustainability in selected metropolitan areas. We want to be the natural choice of people and companies for housing and premises, and annually reduce our environmental impact and to be an attractive employer. By following the business strategy, net asset value growth is created for the company and its shareholders, which is the company’s goal for the business plan 2019–2023. For further information about the company’s business strategy, see www.wallenstam.se.

Successful implementation of the company’s business strategy and the safeguarding of the company’s long-term interests, including its sustainability, requires the company to be able to recruit and retain qualified employees. For this, the company must be able to offer competitive remuneration. These guidelines make it possible to offer senior executives competitive total compensation.

A synthetic options scheme has been established in the company. This was adopted by the general meeting of shareholders and therefore is not covered by these guidelines.

Variable cash remuneration which is covered by these guidelines shall aim to promote the company’s business strategy, long-term value creation in the company and the company’s long-term interests, including its sustainability.

Termination of employment

Upon termination of employment, the period of notice may be a maximum of twelve months. Fixed cash salary during the period of notice and termination benefits in total may not exceed an amount equivalent to the fixed cash salary for two years. In the event of notice from the executive, the notice period may be not more than six months, without right to termination benefits.

Criteria for distribution of variable cash remuneration etc.

Wallenstam does not currently apply variable cash remuneration. If variable cash remuneration would be applied, which has occurred historically in a few individual cases, the remuneration shall be linked to predetermined and measurable criteria that may be financial or non-financial. The criteria can also consist of individually-adapted quantitative or qualitative goals. The criteria shall be designed so that they promote the company’s business strategy and long-term interests including its sustainability, by for example having a clear connection to the business strategy or promoting the executive’s long-term development.

The fulfillment of criteria for payment of variable cash remuneration must be measurable over a period of one or more years. When the measurement period for fulfillment has been completed, the extent to which the criteria have been met shall be assessed. The remuneration committee is responsible for the assessment regarding variable cash remuneration to the CEO. Regarding variable cash remuneration to the other executives, the CEO is responsible for the assessment. As far as the financial goals are concerned, the assessment shall be based on the latest financial information published by the company.

Salary and terms of employment for employees

In preparing the Board’s proposal for these remuneration guidelines, salaries and terms of employment for the company’s employees have been taken into account by the fact that information about employees’ total remuneration, the components of the remuneration and the remuneration’s increase and rate of increase over time formed part of the remuneration committee’s and the Board’s decision data when evaluating the reasonableness of the guidelines and the limitations arising from these. The development of the gap between the remuneration of senior executives and the remuneration of other employees will be reported in the remuneration report.

The forms of remuneration etc.

The remuneration shall be market-related and may be composed of the following components: fixed cash salary, variable cash remuneration, pension benefits and other benefits. The general meeting of shareholders in addition to this – and independent of these guidelines – can resolve, for example, on share-based and share-price-based payments.

The variable cash remuneration may, when applicable, not exceed 50 percent of the fixed annual cash salary.

For the CEO, pension benefits, including health insurance shall be defined contribution. Variable cash remuneration shall not be pensionable. The pension premiums for defined contribution pensions shall amount to a maximum of 40 percent of the fixed annual cash salary.

For other senior executives, pension benefits, including health insurance, shall be defined contribution unless the senior executive is covered by defined benefit pension under compulsory collective agreement provisions. Variable cash remuneration should be pensionable to the extent it arises under compulsory collective agreement provisions which are applicable for the executive. The pension premiums for defined contribution pensions shall amount to a maximum of 40 percent of the fixed annual cash salary.

Other benefits may include home property protection, life insurance, medical costs insurance, health checks, benefit in the form of domestic services and car benefit. Premiums and other expenses due to such benefits may amount to a maximum of 20 percent of the fixed annual cash salary.

If a Board member performs work for Wallenstam in addition to the Board assignment, the Board may decide that a reasonable fee should be payable for such work.

Decision-making processes for approving, reviewing and implementing the guidelines

Within the Board, there is a Remuneration Committee. The committee’s duties include preparing the Board’s decisions and proposal for guidelines for remuneration of senior executives. The Board of Directors shall draw up proposals for new guidelines at least every four years and submit the proposal for resolution at the AGM. These guidelines shall apply until amended guidelines have been adopted by the general meeting. The remuneration committee shall also follow and evaluate variable remuneration programs for company management, the application of guidelines for remuneration to senior executives as well as remuneration structures and rates of compensation in the company. When the Board is dealing with and deciding on remuneration-related issues, the CEO or other members of company management are not present, to the extent that they are affected by the issues concerned.

Departures from the guidelines

The Board of Directors may decide to temporarily deviate from the guidelines, in whole or in part, if there are special reasons for this in an individual case and a departure is necessary to meet the company’s long-term interests, including its sustainability, or to ensure the company’s financial viability. As stated above, it is part of the remuneration committee’s duties to prepare the Board’s resolutions on remuneration issues, which includes resolutions on departures from the guidelines.

Description of significant changes in the guidelines

Due to changes in the Companies Act and the Corporate Governance Code regarding the content of these guidelines, the guidelines

72 ADMINISTRATION REPORT

have been amended to comply with currently effective legislation and the Corporate Governance Code.

Parent Company

The parent company’s primary operations are the performance of Group-wide services. In addition, the parent company owns a small number of properties. Total sales for the year amounted to SEK 458 million (456), of which rental income constituted SEK 122 million (124). Changes in the value of financial interest rate derivative instruments amounted to SEK -164 million (-323). Profit after tax amounted to SEK 471 million (234), other comprehensive income amounted to SEK 470 million (233). Investments in non-current assets during the period amounted to SEK 29 million (22). Parent company external loans amounted to SEK 13,827 million (13,421) on closing day.

In 2020, the average number of employees in the parent company was 250 (250).

The Wallenstam share

The number of shares in Wallenstam AB consists of 34,500,000 A shares, which carry ten votes each, and 295,500,000 B shares, which carry one vote each. The Wallenstam B share is listed on Nasdaq Stockholm, Large Cap. The number of registered shares totaled 330,000,000 and the registered share capital is SEK 165,000,000, corresponding to a quota value per share of SEK 0.50, like the previous year. During 2020, the Wallenstam share price increased in value by 15.4 percent. The property index OMX Stockholm Real Estate decreased by 5.7 percent and the OMX Stockholm PI index increased by 12.9 percent during the same period.

At the end of the period, the Wallenstam share price was SEK 130.60 (113.20) and the market capitalization was SEK 43,098 million (37,356) based on the total number of registered A and B shares. Equity per share amounted to SEK 79 (74). The highest price paid during the year was SEK 138.90 (116.20) and the lowest was SEK 84.30 (81.00).

A total of 66.5 million (53.6) Wallenstam shares were traded at a value of SEK 7,663 million (5,389) on Nasdaq Stockholm. The average daily turnover totaled around SEK 30.4 million (21.6).

Wallenstam’s Board has a mandate from the AGM to repurchase shares. No shares (-) were repurchased during 2020. The company holds 7,000,000 treasury shares, corresponding to 2.1 percent (2.1) of the share capital and a quota value of SEK 3.5 million (3.5). Total expenditure, including brokerage, on treasury shares amounted to SEK 534 million (534), equivalent to SEK 76.27 (76.27) per share.

Events after the end of the reporting period

No events of material importance for the Group’s position have occurred after the end of the reporting period.

Future

During the business plan 2023, Wallenstam will continue to work in the growth regions of Gothenburg, Stockholm and Uppsala. We will strive to become even more service-oriented, productive and cost-efficient, in order to create even more value for our shareholders, employees, customers and society as a whole. During the business plan, the equity/assets ratio shall not be less than 30 percent.

Dividend policy

Recognized earnings should in the first instance be reinvested in the operations to enable continued development of the Group’s core business and thus create net asset value growth. The ambition is also for the operations to provide a stable level of dividends over time. The amount available for distribution must not exceed Profit before changes in value and impairment charges less participations in the profits of associated companies and after standard tax. When determining the size of the dividend, consideration must also be given to the Group’s investment requirements, need to strengthen its balance sheet and its position in general, and the ability of the Group to develop further in the future while maintaining its financial strength and freedom of action.

The Board of Directors proposes that the Annual General Meeting approve the following:

PROPOSED APPROPRIATION OF PROFIT, SEK

The following earnings are at the disposal of the Annual General	The following earnings are at the disposal of the Annual General
Meeting:
Proft brought forward	10,019,998,722
Netproft for theyear	471,460,856
Total	10,491,459,578
Shareholder dividend SEK 1.20 per share	387,600,000
To be carried forward	10,103,859,578
Total	10,491,459,578

The Board of Directors proposed appropriation of profit is that a dividend of SEK 1.20 per share (0.50) be distributed, spread over two payment dates of SEK 0.60 each per share. The record day for the first payment is proposed to be April 29, 2021 and November 1, 2021 for the second payment. If the AGM resolves in accordance with the proposal, Euroclear Sweden AB is expected to execute the first payment on May 4, 2021 and the second payment on November 4, 2021.

In the company, there is a total of 330,000,000 shares, of which 7,000,000 are non-dividend-paying repurchased own shares up to February 9, 2021. The total of the above proposed dividend of SEK 387,600,000 may change if the number of repurchased own shares changes before each record day for dividend.

Statement by the Board of Directors on the proposed distribution of profits

Consolidated equity has been determined in accordance with the IFRS standards adopted by the EU, and in accordance with Swedish legislation, including by application of the Swedish Financial Reporting Board’s recommendation RFR 1. Parent company adjusted equity has been determined in accordance with Swedish legislation and by application of the Swedish Financial Reporting Board’s recommendation RFR 2.

According to the company’s dividend policy, the amount available for distribution must not exceed profit before changes in value and impairment charges less participations in the profits of associated companies and after standard tax.

In determination of the size of the dividend, the Board also considered the Group’s investment requirements, need to strengthen its balance sheet and position in general, and the ability of the Group to develop further in the future while maintaining its financial strength and freedom of action.

The proposed dividend to shareholders reduces the company’s equity/assets ratio from 34 percent to 33 percent. The Group’s equity/assets ratio remains at 42 percent even after the proposed dividend. The equity/assets ratio is satisfactory considering that the company’s and the Group’s operations continue to be run profitably. It is expected that liquidity in the company and Group can be maintained at a similarly satisfactory level.

Derivative instruments and other financial instruments have been measured at fair value according to Chapter 4, Section 14a of the Swedish Annual Accounts Act (1995:1554). Accordingly, a deficit value totaling SEK -408,647,057 after tax impacted equity.

In the view of the Board, the proposed dividend will not prevent the company or any other Group companies from fulfilling their obligations in either the short or the long term, nor from carrying out necessary investments. The proposed dividend can thus be justified with regard to the provisions of the Swedish Companies Act (2005:551), Chapter 17, Section 3, paragraphs 2-3 (the prudence rule).

ADMINISTRATION REPORT 73

Consolidated income statement

SEK million	Note	2020	2019
Rental income	3	2,131	2,026
Operatingexpenses	4	-519	-497
Net operating income, properties		1,613	1,529
Management costs and administrative expenses	4, 5, 6	-243	-228
Financial income	8	4	4
Financial expenses	8	-243	-198
Income from property management operations		1,131	1,108
Realized change in value, fnancial instruments	18	4	-
Participation in profts/losses of associated companies	9	-1	-5
Revenue, development property sales	10	537	324
Expenses, development property sales	10	-371	-232
Other income	11	168	298
Other expenses	11	-195	-299
Other fnancial expenses	8	-21	-25
Proft/loss before changes in value and impairment losses		1,253	1,169
Change in value, investment properties	12	1,339	2,600
New construction		853	792
Other		486	1,808
Unrealized change in value, fnancial instruments	8, 19	-162	-264
Unrealized change in value, synthetic options	5	-36	-40
Proft before tax		2,393	3,464
Current tax	13	0	0
Deferred tax	13	-485	-727
Proft for the year after tax		1,908	2,737

Consolidated statement of comprehensive income

Items that may be reclassifed to proft/loss for the year
Translation diference		24	1
Change in value, currency derivatives		-2	-1
Items that may not be reclassifed to proft/loss for the year
Change in value, holdings of unlisted equity instruments		-	60
Change in value, owner-occupied properties		-	1
Tax attributable to other comprehensive income	13	-3	-1
Comprehensive income		1,927	2,796
DISTRIBUTION PROFIT/LOSS FOR THE YEAR AFTER TAX
Attributable to non-controlling interests		-	-
Attributable to parent company shareholders		1,908	2,737
PER-SHARE DATA
Proft after tax, SEK (dilution does not occur)		5.9	8.5
Dividend, SEK (proposed 2020)		1.20	0.5
Average number of shares, thousands		323,000	323,000

74 CONSOLIDATED ACCOUNTS

Consolidated balance sheet

Consolidated balance sheet
SEK million	Note	Dec 31, 2020	Dec 31, 2019
ASSETS
NON-CURRENT ASSETS
Intangible non-current assets
Capitalized expenses,computer software	14	19	18
Total intangible non-current assets		19	18
Property, plant and equipment
Investment properties	12, 15	57,933	52,354
Wind turbines	16	1,033	1,109
Equipment	17	62	53
Total property, plant and equipment		59,029	53,516
Financial assets
Securities held as non-current assets and shares of property interests	18, 30	119	152
Participations in associated companies	9	220	133
Other non-current receivables	18, 30	410	397
Financial derivative instruments	19,30	10	6
Total fnancial assets		759	688
TOTAL NON-CURRENT ASSETS		59,806	54,222
CURRENT ASSETS
Intangible assets	20	1	14
Development properties	21	126	175
Current tax receivables		-	6
Trade receivables	3, 22, 30	18	15
Other receivables	23, 30	18	43
Prepaid expenses and accrued income	24, 30	81	75
Financial derivative instruments	19, 30	-	2
Participations	25, 30	12	6
Cash and cash equivalents	26,30	518	129
Total current assets		774	467
TOTAL ASSETS		60,581	54,689
EQUITY AND LIABILITIES
EQUITY	27
Share capital		165	165
Other contributed capital		359	359
Other reserves		83	64
Proft brought forward		24,950	23,204
Non-controllinginterests		0	2
Total equity		25,558	23,794
NON-CURRENT LIABILITIES
Deferred tax liability	28	5,811	5,322
Other provisions	29, 30	142	188
Interest-bearing liabilities	30	6,406	3,883
Financial derivative instruments	19, 30	522	356
Lease liability	30, 31	492	420
Other liabilities	30	21	36
Total non-current liabilities		13,394	10,205
CURRENT LIABILITIES
Interest-bearing liabilities	30	20,885	19,998
Lease liability	30, 31	1	1
Financial derivative instruments	19, 30	3	2
Trade payables	30	268	238
Other liabilities	30	49	38
Accrued expenses and deferred income	30,32	424	413
Total current liabilities		21,629	20,690
TOTAL EQUITY AND LIABILITIES		60,581	54,689

CONSOLIDATED ACCOUNTS 75

Consolidated statement of changes in equity

ATTRIBUTABLE TO THE PARENT COMPANY’S SHAREHOLDERS

			Other	Other	Proft
	Note	Share	contributed	Other	brought	Minority	Total
SEK million	27	equity	capital	reserves	forward	share	equity
OPENING BALANCE, JAN 1, 2019		165	359	4	21,081	2	21,611
Net proft for the year		-	-	-	2,737	-	2,737
OTHER COMPREHENSIVE INCOME
Items that may be reclassifed to proft/loss for the year
Translation diference Change in value, currency derivatives Items that may not be transferred to proft/loss for the year Change in value, owner-occupied properties Change in value, holdings of unlisted equity instruments Tax attributable to other comprehensive income TRANSACTIONS WITH THE COMPANY’S OWNERS Dividend		- - - - - -	- - - - - -	1 -1 1 60 -1 -	- - - - - -614	- - - - - -	1 -1 1 60 -1 -614
CLOSING BALANCE, DEC 31, 2019		165	359	64	23,204	2	23,794
OPENING BALANCE, JAN 1, 2020		165	359	64	23,204	2	23,794
Net proft for the year OTHER COMPREHENSIVE INCOME Items that may be reclassifed to proft/loss for the year Translation diferences Change in value, currency derivatives Items that may not be transferred to proft/loss for the year Tax attributable to other comprehensive income		- - - -	- - - -	- 24 -2 -3	1,908 - - -	- - - -	1,908 24 -2 -3
TRANSACTIONS WITH THE COMPANY’S OWNERS
Dividend		-	-	-	-162	-	-162
Dividend minority		-	-	-	-	-2	-2
CLOSING BALANCE, DEC 31, 2020		165	359	83	24,950	0	25,558

Classification of equity

Share capital

Refers to the registered share capital of the parent company. Share capital consists of 34,500,000 A shares (quota value SEK 0.50) and 295,500,000 B shares (quota value SEK 0.50).

Other contributed capital

Includes the total amount from transactions that Wallenstam AB had with its shareholders. The transactions that took place were share issues at a premium where the capital received above the nominal amount of the issue constitutes other contributed capital.

Other reserves

Consists of translation differences, change in value of currency derivatives, change in value of holdings of unlisted equity instruments and tax.

Profit brought forward

Equivalent to the accumulated profits and losses generated in the Group, less dividends paid and repurchases of shares.

Capital management

Consolidated equity amounted to SEK 25,558 million (23,794) at year-end. The return on equity was 7.8 percent (12.3). The Group’s

financial strategy is based on the creation of satisfactory financial conditions for operation and development of new construction, which we achieve through a value-creating business. Wallenstam has a goal during the period October 1, 2018 through December 31, 2023 to achieve an increase in net asset value of SEK 40 per share. Net asset value includes equity and deferred tax liability. On December 31, 2020, the net asset value per share was SEK 98.30 (91.30), which represents an increase of SEK 7.00 per share (9.00) during 2020 and SEK 19.10 per share to date during the business plan.

The equity/assets ratio is an important metric for our capital management with the goal that it should not be less than 30 percent. At the end of 2020, the equity/assets ratio was 42 percent (44).

In the first instance, Wallenstam reinvests profits generated in the business for continued development of the property holdings and increased net asset value growth in the company. According to the Group’s dividend policy, the amount available for distribution must not exceed profit before changes in value and impairment charges less participations in the profits of associated companies after consideration of standard tax. The Board of Directors proposes a dividend of SEK 1.20 per share (0.50) for 2020. Calculated on outstanding dividend-paying shares, the proposed dividend amounts to about SEK 388 million. Wallenstam may conduct share repurchasing as a way to modify the company’s capital structure. No changes to the Group’s principles for capital management occurred during the year.

76 CONSOLIDATED ACCOUNTS

Consolidated statement of cash flows

SEK million	Note	2020	2019
CASH FLOW FROM OPERATING ACTIVITIES
Proft before changes in value and impairment losses*		1,253	1,169
Adjustment for items not included or arising in the cash fow	35	-134	10
Taxpaid		0	0
Cash fow before change in working capital		1,119	1,179
CHANGE IN WORKING CAPITAL
Current receivables		55	83
Current liabilities		41	92
Change in working capital		96	174
CASH FLOW FROM OPERATING ACTIVITIES		1,215	1,353
CASH FLOW FROM INVESTING ACTIVITIES
Investments in properties and individual co-op apartments		-4,484	-3,812
Investment in intangible assets & property, plant and equipment and wind turbines		-22	-45
Investment in fnancial assets		-	-10
Investment in associated companies		-88	-25
Divestment ofproperties, developmentproperties andproperty,plant and equipment		520	628
CASH FLOW FROM INVESTING ACTIVITIES		-4,074	-3,264
CASH FLOW FROM FINANCING ACTIVITIES
Raised interest-bearing liabilities		23,402	18,050
Amortization of interest-bearing liabilities		-19,994	-15,294
Net change in overdraft facilities		-	-119
Advance payment futures contracts		-	-8
Amortized promissory notes		12	-
Issued promissory notes		-8	-59
Dividend paid		-162	-614
Dividend paid to minority owner		-2	-
Repurchase of own shares		-	-
CASH FLOW FROM FINANCING ACTIVITIES		3,248	1,956
CHANGE IN CASH AND CASH EQUIVALENTS
Cash and cash equivalents at the beginning of the year		129	83
Cash fow for the year		389	46
Cash and cash equivalents at the end of the year		518	129
Unutilized overdraft facility at year-end		800	800
Blocked bank balances		-	-1
Available liquid assets	26	1,318	928

*Includes interest paid and received, including gross flows from interest rate swap contracts, of SEK -365 million (-296) and SEK 3 million (3) respectively, of which SEK 112 million (83) was capitalized as a non-current asset.

CONSOLIDATED ACCOUNTS 77

Group Accounting Principles and Notes

Note 1. Group accounting principles

General information

Wallenstam AB (publ) is a Swedish public limited company with its registered office in Gothenburg. The Wallenstam B share is listed on Nasdaq Stockholm, Large Cap segment. The parent company is Wallenstam AB (publ), with corporate identity number 556072-1523 and the company’s address is SE-401 84 Gothenburg, with visiting address Kungsportsavenyen 2.

The Group’s operations are conducted through subsidiaries and its operations are described in the Administration Report. The annual accounts and consolidated financial statements for Wallenstam AB (publ) for the financial year ending December 31, 2020 were approved by the Board of Directors and the Chief Executive Officer on March 23, 2021 and will be presented to the Annual General Meeting (AGM) on April 27, 2021 for approval.

General principles and information about the consolidated financial statements follow below. Accounting principles, Assessments and estimates and Risks are presented after that more specifically in direct connection to each note in order to give the reader a better understanding of the respective income statement and balance sheet items.

» Accounting principles are indicated by

» Assessments and estimates are indicated by

» Risks are indicated by

Basis of accounting

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) that apply to financial years beginning on or after January 1, 2020. In addition the Group’s applies the Swedish Financial Reporting Board’s recommendation RFR 1, “Supplementary Accounting Rules for Groups”.

The parent company applies the same accounting principles as the Group with the exceptions and additions described in the Swedish Financial Reporting Board’s recommendation RFR 2, “Accounting for Legal Entities”. This means that IFRS is applied with the exceptions described in direct connection to each parent company note.

The accounting principles for the Group have been applied consistently in the reporting and consolidation of the parent company and all subsidiaries in all the periods presented in the consolidated financial statements, unless otherwise indicated below.

The functional currency of the parent company and the Group’s presentation currency is the Swedish krona (SEK). All amounts are stated in millions of Swedish kronor (SEK million) unless otherwise indicated. The financial statements for the Group have been prepared based on historical cost, which means that assets and liabilities are recognized at these values with the exception of properties and certain financial instruments and renewable energy certificates, which are measured at fair value or the contracted sales value if this is lower.

Classification

Non-current assets and non-current liabilities consist of amounts that are expected to be recovered or paid more than twelve months after closing day. Current assets and current liabilities consist of amounts that are expected to be recovered or paid within twelve months of closing day.

Consolidated financial statements

The consolidated financial statements cover the parent company and all companies in which the parent company directly or indirectly has more than 50 percent of the voting rights or exercises control in another way. Control means that the Group can influence the investment in a way that affects its return or provides other benefits. The assessment takes into consideration de facto control, which means that control may exist even if a majority of the votes are not held.

Consolidated financial statements are prepared according to the purchase method, which means that equity in subsidiaries at the time of acquisition is eliminated in its entirety, and are based on accounting information prepared for all Group companies as of December 31, 2020. Consolidated equity thus includes only the portion of a subsidiary’s equity earned since the acquisition. Profit/loss from companies acquired or divested during the year are included in the consolidated financial statements at amounts corresponding to the holding period. An acquisition analysis is prepared in connection with the acquisition to determine the cost of the participations and the fair value of acquired assets and assumed liabilities and contingent liabilities. Internal transactions between Group companies and intercompany dealings including internal profits are eliminated when preparing the consolidated financial statements. The Group’s foreign operations are translated into the Group’s functional currency (SEK) by translating balance sheets at the closing day exchange rate (current method), except for equity, which is translated at the exchange rate at the time of acquisition. Income and expense items are translated at the average exchange rate for the period. The translation differences that arise are recognized in other comprehensive income. Accumulated translation differences form part of the Group’s equity among Other reserves and are transferred and recognized as a component of capital gains or losses when a foreign subsidiary is divested. Monetary items in foreign currency are translated at the closing day exchange rate, at which time realized and unrealized exchange differences are recognized through profit or loss. Exchange gains/losses related to operations are recognized under operating income and operating expenses, respectively. Financial exchange gains/losses are recognized as financial income and expenses.

The proportion of equity attributable to owners with non-controlling interests (previously designated minority holdings) is recognized as a special item within equity separate from the parent company shareholders’ share of equity. In addition, this share of profit/loss for the period is disclosed separately.

Fair value hierarchy according to IFRS 13

For all financial instruments measured at fair value according to IFRS 13, a description must be given of how fair value is assessed for all financial instruments measured at fair value and how this value is classified in relation to the three levels in a fair value hierarchy.

The different levels of the hierarchy are defined as follows:

• » quoted prices (unadjusted) on active markets for identical assets or liabilities (level 1).

• » observable inputs for the assets or liabilities other than quoted prices included in level 1, either directly (i.e. as prices) or indirectly (i.e. derived from prices) (level 2).

• » unobservable inputs for the asset or liability (level 3).

The level in the hierarchy of each financial instrument is shown in the instrument’s note disclosure and in a summary in Note 30.

78 GROUP ACCOUNTING PRINCIPLES AND NOTES

Note 1. Group accounting principles, cont.

Impairment losses

Certain assets such as intangible and tangible equipment and wind turbines are subject to testing for impairment under IAS 36. When there are indications that an asset has fallen in value, an assessment of the asset’s carrying amount is carried out. In cases where the carrying amount exceeds the estimated recoverable amount, the asset is written down to its recoverable amount. An impairment loss is recognized in the income statement. Previous impairment losses are reversed if the conditions for the impairment loss no longer exist. The maximum amount of the reversal is the asset’s cost less estimated depreciation according to plan until closing day. Reversals are recognized through profit or loss. See Notes 14, 16 and 17.

tes are recognized during the period in which they are made if they affect that period only, or in the period in which they are made and future periods if the change affects both current and future periods.

Rounding off

As a result of rounding off, figures presented in this annual report do not, in some cases, sum up exactly to the total and percentages may differ in order for them to correspond to the actual numerical data.

Changes in Swedish regulations

Swedish Financial Reporting Board

Changes made in 2020 have not had any impact on Wallenstam’s reporting.

Assessments and estimates

In order to prepare the financial reporting in accordance with IFRS, the company management must make various assumptions, assessments and estimates that through the choice of accounting principles or other assumptions, affect for example assets and liabilities, revenue and expenses, contingent assets and contingent liabilities and other information recognized in the accounts. These assessments and estimates are based on historical experience and expectations about future events that are considered reasonable in the current circumstances. By their very nature, actual outcomes may differ from these assessments and estimates if other assumptions are made or other conditions exist or arise. Changes to estima-

Amendments of accounting principles and disclosures

No new or amended standards and new interpretations which entered into force in 2020 had any impact on Wallenstam’s financial reporting apart from what is stated below.

New standards and interpretations which enter into force in 2021 or subsequently

The new standards and interpretations that will apply from January 1, 2021 have not been early adopted. Nor are they expected to have any material impact on the consolidated financial statements.

GROUP ACCOUNTING PRINCIPLES AND NOTES 79

Note 2. Segment information

Accounting principle

Operating segments are reported in a manner that corresponds with the internal reporting to the chief operating decisionmaker, Wallenstam’s CEO. In the Other segment, income and expenses related to electricity production and central items are reported which are not allocated to the business areas such as listing costs.

Intra-Group transactions are eliminated in the eliminations column. The accounting principles applied in the segment information essentially correspond with the Group’s accounting principles.

SEGMENT INFORMATION

SEK million	2020 Gothenburg region Stockholm region Other Eliminations Total	2019 Gothenburg region Stockholm region Other Eliminations Total
INCOME STATEMENT Rental income Operatingexpenses	1,426 732 - -27 2,131 -326 -193 - - -519	1,402 648 - -24 2,026 -325 -172 - -497
Net operating income Management costs and administrative expenses Net fnancial items	1,100 539 - -27 1,613 -141 -100 -29 27 -243 -244 -140 145 - -239	1,078 475 - -24 1,529 -132 -105 -15 24 -228 -240 -113 158 - -194
Income from property management Unapportioned items Realized change in value, fnancial instruments Participation in profts/losses of associated companies Proft from sales of development properties Other income Other expenses Other fnancial expenses	716 299 116 - 1,131 4 -1 167 168 -195 -21	706 257 144 - 1,108 - -5 92 298 -299 -25
Proft/loss before changes in value and impairment losses Changes in value	1,253 1,140	1,169 2,295
Proft before tax BALANCE SHEET Investment properties Wind turbines Development properties Unapportioned assets	2,393 35,291 22,642 - - 57,933 - - 1,033 - 1,033 13 113 - - 126 1,489	3,464 32,342 20,011 - - 52,354 - - 1,109 - 1,109 57 118 - - 175 1,051
Total assets Equity Interest-bearing liabilities and lease liabilities Unapportioned liabilities	60,581 25,558 14,946 10,756 2,083 27,785 7,238	54,689 23,794 13,366 9,278 1,658 24,302 6,593
Total equity and liabilities Investments in progress property, plant and equipment	60,581 3,650 3,134 6,784	54,689 1,934 3,835 - - 5,769

80 GROUP ACCOUNTING PRINCIPLES AND NOTES

Note 3. Rental income

Accounting principle

The Group recognizes income when control over the service/ good has been transferred to the customer. Rental agreements attributable to Wallenstam’s investment properties are considered operating leases. Rental income is notified in advance, allocated to periods in accordance with rental agreements and recognized as income during the rental period concerned. Rent paid in advance is recognized as prepaid rental income. Income comprises the fair value of what will be received in the Group’s operating activities. Recognized income refers mainly to rental income. Where applicable, rental income includes services provided by Wallenstam such as cable TV, electricity and heating. The income is recognized net less any discounts.

Discounts provided in the case of infringements on rights of use, e.g. during reconstructions and/or in connection with occupation, are recognized in the period they concern. In cases where leases during a certain period allow for reduced rent corresponding to a higher rent during another period, this is allocated in accordance with the contracted agreement. Discounts provided as a result of Covid-19 are recognized in the period they relate to. Compensation in connection with the early termination of rental agreements is immediately recognized as income if no obligations towards the tenant remain.

Recognition of government support

Government support is recognized in the financial statements when there is reasonable certainty that the company will be able to fulfil the conditions associated with the grants and that these grants will be received. In connection with Covid-19, Wallenstam has provided discounts to commercial tenants, which are in the categories defined by the government where it is possible to apply for support. The support has been recognized as rental income and was settled in full at year-end.

Credit risk

Wallenstam’s credit risk can mainly be attributed to outstanding rent/trade receivables, promissory note receivables, cash and cash equivalents and financial derivative contracts. Losses from rent and trade receivables occur when customers are unable for some reason to fulfil their payment obligations. The risks are limited as Wallenstam mainly works with established customers that have competitive operations and a documented ability to pay. In cases where a counterparty’s ability to pay is considered uncertain, in accordance with its credit policy, Wallenstam will demand a bank guarantee, a surety or in the case of a new let, rent in advance (deposit). Wallenstam has a large diversification of risks in its contract portfolio with just over 1,800 commercial contracts and just over 16,000 residential and parking contracts.

The Group’s exposure to credit risk from individual customers is limited considering the terms of Wallenstam’s rental agreements and the relative importance of customers. Wallenstam’s ten largest commercial tenants represent approximately 8 percent (8) of Wallenstam’s assessed full-year value. Rental income is mainly based on agreements and fixed rental income, as turnover-based rent only occurs to a very limited extent. The table below shows the terms and size of rental agreements for both commercial and residential tenants.

A provision for unpaid residential tenant receivables is made on a quarterly basis or in the case of outstanding receivables in excess of SEK 10,000. For commercial receivables, individual assessments are made.

Provision for unpaid rent receivables is recognized as a decrease in the Group’s total rental income.

RENTAL INCOME

SEK million	2020	2019
Residential, parking	1,114	1,017
Commercialpremises	1,016	1,009
Total rental income	2,131	2,026
Change in rental income between 2019 and 2020
Rental income accordingto income statement	2,026	1,910
Change in rental income, existing properties	23	56
New construction	83	56
Acquired properties	6	19
Soldproperties	-8	-14
Rental income according to income statement	2,131	2,026
Adjustment to current full-year value
Vacancies and vacatedproperties	95	70
Rental value, December 31	2,226	2,096

GROUP ACCOUNTING PRINCIPLES AND NOTES 81

Note 3. Rental income, cont.

RENTAL CONTRACT SIZES

	Number of	Assessed full-year
	contracts	value, SEK million	Total, %
Above SEK 5.0 million	23	219	10
SEK 4.0–5.0 million	13	60	3
SEK 3.0–4.0 million	27	92	4
SEK 2.0–3.0 million	68	164	7
SEK 1.0–2.0 million	139	196	9
SEK 0.5–1.0 million	233	166	7
Under SEK 0.5 million	1,337	140	6
Total commercial premises	1,840	1,036	46
Vacant property	432	77	3
Residential andparking	16,018	1,143	51
Total	18,290	2,257	100

RENTAL CONTRACT TERMS

	Number of	Assessed full-year
	contracts	value, SEK million	Total, %
2021	804	206	9
2022	424	242	11
2023	328	192	8
2024	179	155	7
2025–	105	242	11
Total commercial premises	1,840	1,036	46
Vacant property	432	77	3
Residential andparking	16,018	1,143	51
Total	18,290	2,257	100

Note 4. Operating, management and administrative expenses

Accounting principle

Operating expenses

Wallenstam’s operating expenses consist of expenses incurred in connection with property management such as property upkeep, electricity, water, cleaning, repairs, fuel expenses, maintenance, property tax and other operating expenses. Operating expenses are recognized in the period they concern.

Management costs and administrative expenses

Wallenstam’s management costs and administrative expenses consist of the Group’s administration expenses such as expenses for personnel, offices, premises, consultants, marketing and depreciation of fixtures and fittings. Expenses are recognized in the period they concern. Management costs and administrative expenses are

distributed among: property management, wind power management and property transactions.

Management costs and administrative expenses attributable to the Group’s property management operations amounted to SEK 243 million (228). Management costs and administrative expenses attributable to wind power amounted to SEK 11 million (20) and are recognized in the item Other expenses. Administration expenses attributable to property transactions are included in the item Change in value, investment properties and amounted to SEK - million (3) and in the item Expenses for sales of development properties of SEK 5 million (3).

82 GROUP ACCOUNTING PRINCIPLES AND NOTES

Note 4. Operating, management and administrative expenses, cont.

OPERATING EXPENSES

SEK million	2020	2019
Heating costs	69	74
Maintenance costs	142	131
Property tax	88	88
Other operatingexpenses	220	204
Total operating expenses	519	497
SEK/sqm	2020	2019
Heating costs	56	62
Maintenance costs	116	110
Property tax	72	74
Other operatingexpenses	179	171
Total operating expenses	423	417

MANAGEMENT COSTS AND ADMINISTRATIVE EXPENSES

SEK million	2020	2019
Depreciation of non-current assets	8	7
Marketing expenses	14	16
Other external services and expenses	33	26
Personnel expenses	164	164
Cost of premises, rent for non-current assets, ofce supplies	36	35
Other expenses	5	6
Total management costs and administrative expenses	259	254

Due to the high occupancy rate, direct costs attributable to properties that did not generate income are only marginal. For properties that are partly vacated to carry out reconstruction projects, there are operating expenses of about SEK 13 million (7), for which there is no income.

AUDIT EXPENSES

SEK million	2020	2019
Audit assignment, KPMG	1.7	1.3
Other auditing work, KPMG	0.1	0.1
Audit assignment, BDO	0.1	0.1
Total	1.9	1.5

From the year 2020, Wallenstam uses the services of KPMG for audit of the Group’s companies, previously Deloitte was used. BDO is used for the Group’s Norwegian companies.

GROUP ACCOUNTING PRINCIPLES AND NOTES 83

Note 5. Salaries, other remuneration and social security expenses

Accounting principle

Employee benefits

Employee benefits are recognized in line with employees performing services in exchange for remuneration.

Provisions for pensions

Pensions are normally financed through payments to insurance companies where payments have been determined based on periodic actuarial calculations.

The Group has both defined benefit pension plans and defined contribution pension plans. The latter consists of pension to persons covered by defined benefit ITP plans with ongoing payments to Alecta under ITP 2. Plans where the company’s obligation is limited to the fees that the company has undertaken to pay are classified as defined contribution plans, in other words, without any other obligations from the company except to pay an annual premium during the period of employment. For these, the size of an employee’s pension depends on the premiums the company pays to an insurance company and the return on capital the premiums generate. Consequently, the employee bears the actuarial risk (that the payment will be lower than expected) and the investment risk (that the invested assets will be insufficient to provide the expected payments). According to statement 10 of the Swedish Financial Reporting Board, the requirements do not exist to recognize an ITP 2 plan financed through insurance with Alecta as a defined benefit plan, and for this reason this plan is recognized as defined contribution according to IAS 19. Wallenstam thus only recognizes defined contribution pension obligations. For defined contribution plans, after employment has been terminated, the employee is entitled to decide the period during which the earlier defined contribution payments and the return on these is taken out as pension. The company’s obligations in respect of premiums for defined contribution plans are recognized as a consolidated expense as they are earned by employees.

Employee synthetic options scheme

Share-based payment is recognized according to IFRS 2 Sharebased payment. The liability varies with the share price and the number of outstanding options at the end of each reporting period. The terms and conditions of the scheme were unchanged during the entire year. Settlement of remuneration takes place in cash at the end of the option scheme or at the earlier date when the share price reaches the scheme’s ceiling price. In May 2018, all permanently employed staff received an offer to acquire 10,000–50,000 synthetic options in exchange for consideration. In total, a maximum of 5,000,000 synthetic options shall be issued in the options scheme. The estimated cost in the event of a maximum outcome is SEK 330 million. The CEO and Vice CEO and other senior executives were invited to acquire 50,000 options each. 226 employees accepted the offer at the start. The options were measured according to the Black & Scholes model. Important input data for the model includes the share price as of the closing day of SEK 130.60 (113.20), an exercise price of SEK 80 with a ceiling of SEK 140, an anticipated share price volatility of 20 percent, the term of the options up to and including May 31, 2024, an anticipated dividend and an annual riskfree interest rate of -0.31 percent. Volatility was calculated as the estimated future volatility during the remaining term of the options. The total number of outstanding options at year-end amounted to 3,052,500 (2,994,000).

Termination benefits

A provision is recognized in connection with the termination of employment only if the company has been obliged to terminate employment before the normal date or when compensation is offered as an incentive for voluntary redundancy. The provision and expense is recognized in the period when the employee is on garden leave, in other words the period in which the company does not receive any service in return.

GROUP SALARIES, OTHER REMUNERATION AND SOCIAL SECURITY EXPENSES

2020 2019	2020 2019	2020 2019
SEK million	Basic salary Benefts Variable remuneration Social security expenses Pension expenses	Basic salary Benefts Variable remuneration Social security expenses Pension expenses
Chairman of the Board Board members	0.6 - 1.1 0.5 - 0.7 - - 0.1 -	0.9 - - 0.1 - 0.8 - - 0.2 -
Total directors’ fees CEO, parent company Vice CEOs, 2 persons (1.25) Former Vice CEOs, 2 persons (2) Other senior executives 3persons(3.75)	1.3 - 1.1 0.7 - 1.4 0.1 - 0.5 1.5 5.6 0.1 - 2.7 1.8 - - - 0.0 - 4.6 0.1 - 1.8 1.4	1.7 - - 0.3 - 4.4 0.1 - 3.6 1.5 3.9 0.1 - 1.8 1.2 - - - 0.3 - 6.1 0.2 - 2.2 2.0
Other employees	133.4 3.1 - 46.8 20.2	126.2 3.1 - 45.7 19.8
Total	144.9 3.5 - 51.8 25.0	140.6 3.5 - 53.6 24.5

84 GROUP ACCOUNTING PRINCIPLES AND NOTES

Note 5. Salaries, other remuneration and social security expenses, cont.

Remuneration

The CEO received a salary along with total benefits of SEK 1.5 million (4.5). The decrease was explained by the fact that the CEO starting from April 2020 and for the rest of the year, waived his salary in a time of thriftiness and as an act of solidarity during the ongoing pandemic. Senior executives are offered market-related fixed salaries. In addition to fixed salary, variable remuneration may be offered in accordance with the guidelines approved by the AGM for remuneration to senior executives. The principles for these are approved by the AGM. Salaries and other benefits to senior executives in the company are prepared and proposed to the Board by the remuneration committee, which is composed of the Chairman of the Board and the Vice Chairman, respectively.

In accordance with the resolution passed by the AGM, the Board of Directors will receive fees of SEK 1,480,000 (1,480,000) for the period from May 2020 until the 2021 AGM, of which SEK 740,000 (920,000) was paid to the Chairman of the Board, SEK 260,000 (260,000) to the Vice Chairman and SEK 160,000 (160,000) each to the other Board members. Apart from directors’ fees to the Chairman of the Board as above, an additional SEK 1,700,000 (-) was paid in initial fees.

No additional remuneration other than the fees approved by the AGM was paid to the Board.

Pensions and termination benefits

The company takes out pension insurance for the CEO with an annual premium of 30 percent (30) of the gross salary in addition to survivors’ pension insurance equivalent to a premium expense of

SEK 163,000 (146,000) for 2020. The company has also taken out a life insurance policy to provide a survivor’s pension in the event of death while in service. This obligation is provided by payment into a defined premium insurance policy for which the costs in 2020 amounted to SEK 50,000 in total (67,000). If the CEO resigns his position, six months’ notice must be given. Termination of the CEO’s employment by the company is also subject to a period of notice of six months.

At year-end, the company had two Vice CEOs, (1.25 as a second Vice CEO was appointed on October 1, 2019). Other senior executives consist of the CFO and Head of Investor Relations, the Communications Director and the Technical Director. Pensions for Vice CEOs and other senior executives are in accordance with the remuneration policy for defined contribution pensions. To fulfil pension benefits for other senior executives, the company has taken out pension insurance equivalent to 30 percent of gross salary. The period of notice is six months. With regard to the Vice CEO and other senior executives, 18 months’ termination benefits will apply in the case of termination of employment by the company.

In the event of absence due to illness, senior executives – like other employees – are entitled to 90 percent of the fixed monthly salary for days 2–90 and 75 percent of fixed salary for days 91–365, less what can be obtained from Försäkringskassan, the Swedish Social Insurance Agency.

The retirement age for the CEO is 67 and for the other senior executives it is 67 unless separate agreements are concluded on an extension, up to a maximum of 70.

SHARE-BASED PAYMENTS TO GROUP MANAGEMENT AND OTHER EMPLOYEES

Synthetic options scheme costs 2018–2024

SEK million	2020	2019
CEO	0.6	0.6
Vice CEOs, 2 persons (1.25)	1.9	0.7
Other senior executives, 3 persons (3.75)	2.6	2.7
Other employees	31.3	35.9
Total unrealized changes in value, synthetic options	36.4	39.9

The cost of the synthetic options scheme includes attributable expenses.

Pension insurance with Alecta

Pension insurance contributions for the year in Alecta in respect of ITP 2 totaled SEK 9.8 million (8.7). Alecta’s surplus can be distributed to the policyholders and/or the insured. At year-end 2020, Alecta’s surplus in the form of the collective consolidation level was 148 percent (148). The collective consolidation level is defined as

the market value of Alecta’s assets as a percentage of the insurance commitments calculated in accordance with Alecta’s actuarial calculation assumptions. Wallenstam’s share of the total number of savings premiums for ITP 2 with Alecta was 0.02943 percent (0.04690).

GROUP ACCOUNTING PRINCIPLES AND NOTES 85

Note 6. Average number of employees

2020	2019
Average number of employees of whom: women men	Average number of employees of whom: women men
252 146 106	254 151 103

The Group’s personnel are mainly employed by the parent company.

BOARD MEMBERS AND SENIOR EXECUTIVES ON CLOSING DAY

Dec 31, 2020 Number of whom: women men	Dec 31, 2019 Number of whom: women men	Dec 31, 2019 Number of whom: women men
		of whom: women men
Board members 5 2 3 CEO, Vice CEOs and senior executives 6 3 3	4 6	3 1 3 3

Note 7. Related party transactions

Accounting principle

Related party refers to both legal entities and natural persons as defined by IAS 24.

Related parties are defined as:

• » all companies within the Wallenstam Group

• » Board members and company management

• » close family of Board members and company management

• » companies controlled by Board members or company management

• » shareholders who control more than 10 percent of the shares or voting rights in the company.

As with all transactions, those with related parties must be carried out on commercial terms. Special attention must be paid to the guidelines pertaining to conflicts of interest during such transactions.

In order to ensure that no extraneous factors are taken into consideration when entering into related-party agreements, two people must always approve the agreement on behalf of Wallenstam. Moreover, authorized individuals may not authorize expenditures for their own benefit. Wallenstam has adopted procedures for defining related parties, for managing transactions and monitoring related party agreements. Prior to the preparation of the annual accounts, individual members of Wallenstam’s Board of Directors and company management provide an assurance as to whether they or their close family have entered into any transactions during the financial year that can be considered related-party transactions with Wallenstam Group companies.

Transactions with related parties

Transactions with related parties mainly consist of administrative fees and the renting of premises between Group companies. Individuals related to Board members and Group Management rent apartments. Insurance services are purchased from companies where members of Wallenstam’s Board of Directors are Board members, for a total equivalent to about SEK 5 million in net expenditure for the year. The CEO is a joint owner (50 percent) of Aranea Holding AB. Aranea Holding AB owns 48 percent of Renew Group Sweden AB, a floorball equipment manufacturer. Aranea is a tenant of Wallenstam with an annual rental value equivalent to SEK 0.6 million.

A member of Wallenstam’s Board, through his own consulting company, sold consulting hours to Wallenstam for SEK 1.2 million.

In June, an agreement was signed on the divestment of Wallenstam’s new construction project New York in Stockholm. The buyer is a company where a member of Wallenstam’s Board of Directors is a board member. The agreed property value amounted to approximately SEK 420 million and the property was taken into possession in December 2020. As part of the agreement, Wallenstam will be responsible for the technical management for a period of two years from the date of taking possession.

As part of its social responsibility work, the Wallenstam Group not only contributes financially to a number of organizations but also gives its time in the form of e.g. board work. As a result of such board positions, related party status arises in the case of the Rescue Mission in Gothenburg, Barn i Nöd (Swedish International Help for Children) and Bethlehem Church. During the year, the Rescue Mission in Gothenburg received contributions and discounts equivalent to SEK 3.4 million, Barn i Nöd received contributions of SEK 1.8 million and Bethlehem Church received contributions of SEK 0.2 million. The Rescue Mission in Gothenburg and Barn i Nöd rent premises from Wallenstam equivalent to annual rental income of about SEK 4.8 million and SEK 0.1 million, respectively.

86 GROUP ACCOUNTING PRINCIPLES AND NOTES

Note 8. Financial income and expenses

Accounting principle

Financial income refers to interest income from bank deposits, receivables, financial investments, dividend income and positive exchange differences on financial items. Financial income is recognized in the income statement in the period it concerns. Dividends are recognized when the right to receive payment has been established.

Financial expenses refer to interest expenses, exchange differences on financial items, and other expenses arising in connection with borrowing and are recognized in the income statement in the period they relate to. The cost of taking out mortgages is capitalized as a property investment. Financial expenses for a reporting period consist of the actual interest to pay both as a result of agreed

interest rates and as an effect of derivative contracts entered into. Average interest rate corresponds to the other interest paid in relation to the period’s average interest-bearing debt.

Net financial items are not affected by market valuations of entered into interest rate derivative contracts, which are instead recognized as changes in value under their own heading. The financial expenses component that refers to major new construction, extensions or reconstructions is capitalized. The capitalized interest is based on the average weighted borrowing cost for the Group over time.

FINANCIAL INCOME AND EXPENSES

SEK million	2020	2019
FINANCIAL INCOME
Interest income, current assets	3	2
Dividend	1	1
Foreign exchangegain	0	1
Total fnancial income	4	4
FINANCIAL EXPENSES
Interest expenses	-246	-208
Interest expenses leases	-13	-13
Exchange losses	-3	0
Other fnancial expenses	-2	-3
Total fnancial expenses	-264	-223

Interest expenses are distributed among properties SEK 225 million (183), wind power SEK 21 million (25) and interest expenses leases on properties SEK 13 million (12) and wind power SEK 1 million (1), respectively.

During the year, SEK 112 million (83) in interest relating to investments in projects was capitalized. The average interest rate was used for capitalization, which amounted to 2.0 percent (2.0). Net

financial items including Unrealized changes in value of financial interest rate derivatives totaled SEK -421 million (-488), see Note 19. All financial items belong to the category financial assets and liabilities measured at amortized cost and the interest component on interest rate derivatives that are measured at fair value via profit or loss. In addition, leases that are measured according to IFRS 16.

Note 9. Participation in profits/losses of associated companies

Accounting principle

A company is recognized as an associated company when Wallenstam holds at least 20 percent and a maximum of 50 percent of the votes, or has control over the operational and financial governance through other means. These holdings are recognized in the consolidated financial statements according to the equity method. Participations in associated companies are recognized in the balance sheet at cost adjusted for changes in the Group’s share of the company’s net assets, less any reductions in the fair value of individual participations.

Market risk

The value of the holdings in associated companies is impacted by market conditions in the associated companies’ markets. During weaker market conditions, the value of the investment also decreases.

The Group’s participations in associated companies are based on the most recently available financial statements from each company, which are preliminary. They were not adjusted to the Group’s accounting principles as the effect is not considered material. There have been no significant transactions or events after reporting.

GROUP ACCOUNTING PRINCIPLES AND NOTES 87

Note 9. Participation in profits/losses of associated companies, cont.

PARTICIPATIONS IN ASSOCIATED COMPANIES

	Share of equity, (%) Carryingamount	Share of equity, (%) Carryingamount
Convendum Corporation AB, 559020-5182	34.6	191
Colive AB, 559145-6008	25.0	29
		220

CHANGE IN PARTICIPATIONS IN ASSOCIATED COMPANIES

SEK million	Dec	31, 2020	Dec	31, 2019
Carrying amount, Jan 1		133		113
Investments during the year		88		25
Netproft/loss for theyear from associated companies		-1		-5
Carrying amount participations in associated companies		220		133

FINANCIAL POSITION, CONDENSED

SEK million	Total, 100% 2020 2019	Wallenstam’s participa- ting interest 2020 2019
CONDENSED INCOME STATEMENTS Revenue Operating expenses Operating income Net interest income/expense Proft before tax Tax	28 0 -39 -16 -10 -15 -1 -1 -11 -16 1 3	9 0 -12 -5 -1 -5 0 0 -2 -5 0 1
Net proft for the year CONDENSED BALANCE SHEETS Assets Equity Liabilities	-11 -13 273 125 249 119 24 6	-1 -5 91 38 83 36 8 2

Holdings in associated companies consist of the investments in Convendum Corporation AB (publ) (Convendum) and Colive AB. Convendum offers modern and efficient office solutions, in AAA locations in the central business districts of major cities and Colive is

one of Sweden’s first operators of coliving housing through so-called coliving hubs. For more information about Wallenstam, Convendum and Colive, see page 49.

88 GROUP ACCOUNTING PRINCIPLES AND NOTES

Note 10. Revenue and expenses, development property sales

Accounting principle

Revenue from sales of development properties refers to compensation from sales of co-op apartment projects, co-op apartment units and development properties. New construction of development properties is recognized according to IFRS 15 Revenue from Contracts with Customers. In the balance sheet, investments are continually recognized at cost in the line item Development properties. In conjunction with sales of co-op apartments, the compensation received is recognized as revenue and the apartment’s estimated share of production costs is recognized as an expense, or in the

case of co-op apartment units acquired from an external party, the book value of the apartment. Revenue from development property sales is recognized as compensation received and the production cost incurred is recognized as an expense. Revenue and expenses are recognized in the income statement when the purchaser takes possession of the apartment/property, while selling and marketing expenses are recognized on an ongoing basis.

Includes administrative and selling expenses of SEK 10 million (11).

DISTRIBUTION REVENUE AND EXPENSES, DEVELOPMENT PROPERTY SALES

SEK million	2020	2019
REVENUE
Revenue from sales of newly constructed co-op apartment units	89	57
Revenue from sales of acquired co-op apartment units	28	38
Revenue from sales of developmentproperties	420	229
Total revenue, development property sales	537	324
EXPENSES
Cost of newly constructed co-op apartment units including selling expenses	-25	-47
Cost of acquired co-op apartment units including selling expenses	-18	-23
Cost of developmentproperties includingsellingexpenses & administration	-328	-163
Total expenses, development property sales	-371	-232
Proft from sales of development properties	167	92

Note 11. Other income and other expenses

Accounting principle

Other income consists of electricity revenue and other. Other expenses consists of electricity expenses, depreciation, administrative expenses and interest expenses attributable to electricity generation and profit from renewable energy certificates and other. Realized hedges for electricity derivatives are not included in the recognition of electricity revenues and electricity expenses, respectively, as the Group does not apply hedge accounting for these items.

Renewable energy certificates are initially recognized at cost, which is remeasured to fair value on the vesting date. Renewable energy certificates are initially measured at cost and are subsequently recognized on an ongoing basis at a remeasured amount consisting of the fair value at the time of remeasurement, identified as the lowest of the closing day spot price or the contracted price for future sale. All changes in value resulting from the remeasurement of renewable energy certificates in inventory are recognized in the income statement as Other income. Other income also includes revenue from realized sale of surplus renewable energy certificates generated by the wind power production. For further information and conditions regarding renewable energy certificates, see Note 20.

Electricity price risk

Electricity prices have an impact on the company’s results. Since Wallenstam is a net electricity producer on an annual basis, a drop in electricity prices has a negative impact on earnings. Electricity prices are influenced by a number of different factors such as the economic cycle and the weather. Changes in electricity prices influence the value of both current and new agreements. To protect the business and reduce the impact of market fluctuations, the Group uses futures contracts to hedge revenue from future electricity production in accordance with the energy policy adopted by the Board of Directors. This policy means that purchasing may be carried out for a maximum period of five years ahead.

GROUP ACCOUNTING PRINCIPLES AND NOTES 89

Note 11. Other income and other expenses, cont.

DISTRIBUTION OTHER INCOME AND OTHER EXPENSES

SEK million	2020	2019
REVENUE
Electricity revenue	142	292
Divested foreign operation	7	-
Other income	20	5
Total other income	168	298
EXPENSES
Electricity expenses	-89	-199
Depreciation wind power	-76	-76
Management costs and administrative expenses wind power	-11	-20
Other expenses	-19	-4
Total other expenses	-195	-299

Other refers to income and expenses from the work and services to tenants.

Note 12. Change in value, investment properties

Accounting principle

Investment properties are measured on an ongoing basis in accordance with IAS 40 at estimated fair value according to the principles described in Note 15. The valuation is internal and is made in conjunction with each quarterly financial statements. Properties that are contracted for sale with taking of possession after closing day are valued at the selling price on the reporting date with consideration of any remaining uncertainty according to the principles described in Note 15. Change in value, investment properties refers to the difference between the valuation on closing day and the valuation at the time of the immediately preceding reporting date, taking account of investments during the period.

A sale is recognized on the date of taking possession unless this contravenes particular terms in the purchase agreement. This also applies in the case of sales of property via companies. In connection with the sale of properties via companies, the transaction is recognized gross as regards property price and deferred tax. Profits/ losses on the sale of property comprise the difference between the agreed purchase price and the estimated market value in connection with the immediately preceding quarterly report, taking account of investments made subsequently. Direct selling expenses and a share of internally distributed administration expenses are deducted.

DISTRIBUTION OF CHANGE IN VALUE, INVESTMENT PROPERTIES

SEK million	2020	2019
Changed yield requirement	-381	1,710
Capitalization of change in net operating income	741	392
Change in value due to contracted acquisitions and divestments and completed partitioning	218	33
Future investment requirements	-93	-322
New construction	853	792
Administrative and other sellingexpenses*	-	-5
Change in value, investment properties	1,339	2,600

*Of which internal administration SEK - million (-3).

90 GROUP ACCOUNTING PRINCIPLES AND NOTES

Note 13. Tax

Accounting principle

Income taxes in the income statement are recognized according to IAS 12. Tax is recognized in the income statement, except where it refers to items that are recognized in other comprehensive income or directly in equity. In such cases the tax is also recognized in other comprehensive income or equity.

The current tax rate for limited liability companies in Sweden in 2020 is 21.4 percent (21.4). The tax in the income statement is distributed between two items, current tax and deferred tax.

• » the possibility to utilize tax depreciation

• » the possibility to utilize tax deductions for certain reconstructions of properties, which are capitalized in the accounts

• » the possibility to utilize the Group’s existing tax loss carryforwards

• » the possibility to sell properties through so-called corporate packaging

• » non-deductible expenses and tax-free revenue.

Current tax

Current tax refers to tax that must be paid in the current year and is calculated according to the prevailing tax rate. This also includes any adjustments to current tax from previous periods.

Deferred tax

Deferred tax is recognized, using the liability method, on all temporary differences arising between the tax bases of assets and liabilities according to the principles described in more detail in Note 28.

Current tax is calculated based on the company’s taxable earnings, which differ from the recognized profit/loss. This is mainly due to:

TAX RECOGNIZED IN THE INCOME STATEMENT

SEK million	2020	2019
Current tax	0	0
Deferred tax	-485	-727
Total tax	-485	-727

DIFFERENCE BETWEEN THE GROUP’S RECOGNIZED TAX AND TAX BASED ON THE APPLICABLE TAX RATE OF 21.4 PERCENT (21.4)

SEK million	2020	2019
Recognized proft before tax	2,393	3,464
Tax according to current tax rate	-512	-741
Tax efect of:
Non-deductible expenses	-13	-14
Tax-free revenue	1	0
Adjustment of tax, previous years	0	-14
Utilized previously non-assessed losses	4	-
Non-taxable proft on divested properties	20	30
Changes in value, which do not generate deferred tax	-5	-17
Non-assessed defcit	0	0
Remeasurement deferred tax	19	28
Tax on proft for the year in the income statement	-485	-727

TAX ITEMS RECOGNIZED IN OTHER COMPREHENSIVE INCOME

SEK million	2020	2019
Deferred tax attributable to:
Changes in value, translation diferences	-3	-1
Change in value, currency derivatives	0	0
Change in value, owner-occupiedproperties	-	0
Total tax items recognized in other comprehensive income	-3	-1

GROUP ACCOUNTING PRINCIPLES AND NOTES 91

Note 13. Tax, cont.

DISTRIBUTION OF DEFERRED AND CURRENT TAX

SEK million	2020 Basis current tax Basis deferred tax	2019 Basis current tax Basis deferred tax
Proft before tax Tax deductible: Reconstructions Depreciation Additional depreciation Retirements, impairment losses and reversals Change in value, investment properties Unrealized change in value, fnancial instruments Realized change in value, fnancial derivative instruments Realized change in value, renewable energy certifcates Sales of properties and participations Sales of wind turbines Discontinued foreign operation Other non-deductible expenses Other tax-free revenue Other consolidation adjustments Changes in value, which do not generate deferred tax Adjustment of tax, previous years Remeasurement deferred tax	2,393 -428 428 -507 507 -49 49 - - -1,339 1,339 162 -162 -4 4 -2 2 -110 5 - - 25 -14 86 -27 -23 - -4 6 - 21 0 0 0 -89	3,464 -386 386 -422 422 -86 86 - - -2,600 2,600 264 -264 40 -40 2 -2 -92 -49 -5 5 - - 83 -29 0 - -47 58 - 79 0 65 - -132
Current proft/loss for tax purposes Change in tax loss carryforwards during the year Taxableproft	200 2,069 -200 200 0 2,269	215 3,183 -215 215 0 3,399
Tax for the year Tax non-assessed defcit	0 -486 - 1	0 -727 - 0
Tax for the year in the income statement	0 -485	0 -727

Note 14. Intangible non-current assets

Accounting principle

Expenditure for software developed and adapted for the Group is recognized under intangible assets if it will provide probable economic benefits in future years. Capitalized expenditures for acquired software are amortized according to plan over the useful life in 5 years, equivalent to 20 percent of cost. The useful life of the assets, the amortization method and residual value are assessed on

a continuous basis. Amortization is included in the income statement item Management costs and administrative expenses. Annual licenses are carried as expenses. Intangible assets are subject to testing for impairment according to IAS 36, see Note 1.

92 GROUP ACCOUNTING PRINCIPLES AND NOTES

Note 14. Intangible non-current assets, cont.

CHANGES IN INTANGIBLE NON-CURRENT ASSETS DURING THE YEAR

SEK million	Dec 31, 2020	Dec 31, 2019
Opening acquisition cost	62	58
Investments during the year	7	7
Retirements duringtheyear	-10	-2
Closing accumulated acquisition cost	59	62
Opening amortization	-44	-39
Amortization for the year	-6	-6
Retirements duringtheyear	10	1
Closing accumulated amortization	-40	-44
Carrying amount, capitalized expenditure software	19	18

Note 15. Investment properties

Accounting principle

Investment properties are our rental apartment buildings, which are held for our own management operations with the aim of receiving rental income or appreciation in value or a combination of both. Investment properties are recognized at fair value where fair value corresponds to the estimated market value calculated using a yield model as described below. Changes in value are recognized in the income statement. A complete valuation of each building is made by an internal valuation team in connection with the preparation of every interim and annual accounts. The valuation model is based on an evaluation of future payment streams with differentiated marketrelated yield requirements per property.

Property valuations are based on the following, among other things:

• » evaluation of the yield requirements in each market

• » evaluation of each property’s specific circumstances e.g. in terms of condition and location

• » analysis of rental rates, contract lengths, vacancy and rental trends

• » an analysis of existing tenants

• » credit market conditions

• » analysis of concluded and non-concluded property transactions.

vacancy deduction is made as the holdings are, and are expected to remain, fully let. The standardized net operating income is set in relation to a yield requirement for each property whereupon a yield value is calculated per property.

From the calculated yield value, deductions are then made corresponding to two years’ rents for all actual vacancies as well as for the value of the estimated future investment needs for maintaining the current valuation standard.

Wallenstam’s valuation model

• • The rental value (is calculated on the basis of expected rental rates in 2021)

• General vacancies of 3 percent in the commercial holdings

• Operating expenses including property tax and site leasehold rents, excluding administration

• = Net operating income

• ÷ Yield requirement for the property

• = The property’s gross yield value

• Two years’ rent for vacant floor space

• Planned investments and significant repairs

• +/- Present value of temporary additions/deductions

• = Estimated market value of property

Valuation model

The valuation is based on an individual assessment of each property’s earning capacity where its net operating income is set in relation to a yield requirement. The yield requirement reflects market conditions and differs based on where the property is located and what type of property it is (residential, offices, retail etc). As our properties are valued separately, no consideration is given to the portfolio premium that may exist in the property market.

The yield valuation is calculated based on the properties’ standardized net operating income. In the annual accounts for 2020, data for 2021 provides the basis for the valuation of the properties. Net operating income thus corresponds to the company’s expected actual revenue and expenses adjusted for non-recurring items which are replaced by standard amounts in order to provide a representative distribution over time, such as in relation to expenses for repairs and maintenance. In relation to the consolidated accounts’ recognized net operating income, a deduction is also made for any site leasehold rents. In all commercial contracts, a deduction for general vacancies of 3 percent is also made. For residential, no standardized

At the time of each valuation, the calculation is adjusted in cases where significant changes in the underlying factors have taken place, such as the yield requirement, rental rate, occupancy rate as well as confirmed changes in value in connection with contracted sales.

If an investment begins in a new or existing investment property that is intended for continued use as an investment property within the Group, the property is also recognized as an investment property during its construction or reconstruction phase.

New constructions of rental apartments are measured at fair value, which is determined as cost plus the estimated surplus on the completion date in relation to the degree of completion of the construction. This is in turn based on expenses incurred. In the case of investment properties that undergo a more large-scale reconstruction, the fair value during the reconstruction period is generally considered to equal the market value that the investment property had at the start of the project with the addition of subsequently made investments. Land rights and building rights for zoned land are measured at market value.

GROUP ACCOUNTING PRINCIPLES AND NOTES 93

Note 15. Investment properties, cont.

Property acquisitions and property sales are recognized on the day of taking possession, when control has been transferred to the purchaser. Properties that are contracted for sale with taking of possession after closing day are valued at the selling price on the reporting date with consideration for any uncertainty.

Additional expenditures are capitalized if it is probable that the future economic rewards associated with the asset will accrue to the Group. In the case of large new constructions, extensions and reconstructions, interest expenses are capitalized during the project period until the property is taken into use. Expenditures in respect of day-to-day maintenance and repairs are expensed in the period in which they arise.

The total value of new construction in progress as well as land and building rights amounted to SEK 6,659 million (5,594).

Wallenstam’s view is that property valuations are at level 3 of the fair value hierarchy. Fair values attributable to level 3 for land rights and building rights have been calculated using comparisons of selling prices. Selling prices for comparable buildings in the immediate vicinity have been adjusted for differences in essential characteristics, such as the size of the property. The most significant input data for this valuation is the price per square meter.

Wallenstam’s properties are classified as investment properties apart from properties that constitute a development property. These properties are instead recognized in the balance sheet as Development properties, see also Note 21.

Asset acquisition versus business combination

Acquisitions may be classified as either asset acquisitions or business combinations. This is an assessment that must be made in the case of each individual acquisition. Transactions carried out during the year are considered asset acquisitions. In the case of asset acquisitions, no deferred tax is recognized in relation to the property acquisition. Any tax discount negotiated reduces the property’s

acquisition cost. This means that changes in value in subsequent valuations are affected by the tax discount.

Recognition of site leasehold rents

Site leasehold rents are paid where Wallenstam’s buildings are on leased land. Site leasehold agreements are treated as perpetual lease agreements, which means that the right of use to land granted with site leasehold rights is recognized as an asset, and an equally large lease liability, in the balance sheet and that the entire leasehold fees are presented as a financial expense in the income statement. In 2020, SEK 13 million (12) was recognized as a financial expense relating to site leasehold rents. The weighted average interest was 3.0 percent. The right of use for the land has been estimated at SEK 476 million (402) and is recognized as a part of the properties’ value. For more information, refer to Note 31.

Assessments and estimates

Assessments and estimates made in connection with investment property valuation may have a significant impact on the Group’s recognized earnings and position. Valuation of investment properties, which are internal, require assessments of and assumptions about, for example future cash flows and the determination of yield requirements for each individual property. Assessments made affect the carrying amount of the item Investment properties in the balance sheet, and the item Change in value, investment properties in the income statement. When a transaction is completed, a crosscheck is performed of the assumptions made. Wallenstam also monitors relevant completed property transactions. Internal valuations of the entire property holdings are carried out on a quarterly basis. To reflect the uncertainty of assumptions, assessments and estimates made, a so-called valuation range of +/– 5 to 10 percent is specified.

CHANGE DURING THE YEAR, INVESTMENT PROPERTIES

SEK million	Dec 31, 2020	Dec 31, 2019
Carrying amount, Jan 1	52,354	45,811
Acquisitions during the year	460	511
Constructions during the year	3,887	3,270
Reclassifcation development properties	-180	-
Sales during the year	-	-242
Unrealized change in value, investment properties	1,339	2,602
Right-of-use asset site leasehold right	73	402
Carrying amount, investment properties	57,933	52,354

Capitalized interest during the year amounted to SEK 112 million (83). The average interest rate for the capitalized interest was 2.0 percent (2.0). For distribution of change in value, investment properties, see Note 12.

Net operating income

The improvement in net operating income was attributable to higher rents and more efficient properties due to newer property holdings, among other things.

Wallenstam’s residential property holdings are fully let. The basic

rent in comparable holdings increased by about 1.8 percent for residential properties. For commercial premises, the corresponding increase before increments compared to the previous year was 4.7 percent, mainly due to completed new lets, renegotiations and cost index escalations.

94 GROUP ACCOUNTING PRINCIPLES AND NOTES

Note 15. Investment properties, cont.

Bases for determining anticipated yield requirements Yield requirements differ between properties depending on the market and the type of property. Yield valuations are based on residential and commercial floor space, with different yield requirements for

the respective lettable space. Analyses and comparisons are made with current price statistics for similar items of property. Wallenstam monitors completed property transactions in relevant areas.

YIELD REQUIREMENTS, INVESTMENT PROPERTIES

Propertytype	Location	Dec 31, 2020, %	Dec 31, 2019, %
Residential	Stockholm	2.40-4.00	2.40-4.00
Residential	Gothenburg	2.40-3.90	2.40-3.90
Commercial	Stockholm	3.90-4.40	3.90-4.40
Commercial	Gothenburg	4.00-7.00	3.80-7.00
Public use properties	Stockholm	2.60-5.90	2.60-5.90
Public use properties	Gothenburg	3.15-5.40	2.40-5.40

The following yield requirements have been used in valuations for different markets and types of property:

		Average	Average
		yield	yield
		requirement	requirement
Propertytype	Location	2020, %	2019, %
Residential properties	Stockholm	3.2	3.2
Residential properties	Gothenburg	3.0	3.1
Commercial properties	Stockholm	4.6	4.5
Commercial properties	Gothenburg	4.5	4.5
Public use properties	Stockholm	3.1	3.1
Public use properties	Gothenburg	4.3	4.7
Average yield requirement residential		3.1	3.1
Average yield requirement commercial holdings		4.5	4.5
Average yield requirement public use properties		4.0	4.3

INVESTMENT COMMITMENTS

Future expenditure for contracted investments as of closing day, which has not been recognized in the financial statements in respect of properties:

SEK million	Dec 31, 2020	Dec 31, 2019
Investments	2,127	2,500

SENSITIVITY ANALYSIS

Fair value is an estimation of a probable selling price on the market at a given valuation date. However, the actual price can only be determined when a transaction is completed and paid for. To illustrate the uncertainty surrounding estimates of market value, a value range is often specified, usually +/– 5 to 10 percent. However, this may vary depending on such things as the market situation, the standard of the property and investment requirements. As of December 31, 2020, Wallenstam had investment properties valued at SEK 57,933

million (52,354). With an uncertainty range of +/– 5 to 10 percent, this means their estimated fair value varies by +/– SEK 5.8 billion (5.2) and by +/– SEK 2.9 billion (2.6). Furthermore, changes to the yield requirement have a substantial effect on the valuation. In the event of a 0.25 percentage point adjustment in the yield requirement, property values will change by around SEK +3.8 billion (3.7) and SEK -3.3 billion (-3.1) respectively, which is equivalent to a change in net asset value of around +/- SEK 11 per share (11).

GROUP ACCOUNTING PRINCIPLES AND NOTES 95

Note 15. Investment properties, cont.

PROPERTY VALUES WITH OTHER YIELD REQUIREMENTS, ACCUMULATED

SEK million	Dec 31, 2020	Dec 31, 2019
0.50 percentage points lower	66,340	60,377
0.25percentagepoints lower	61,782	56,027
Propertyvalue accordingto our estimate	57,933	52,354
0.25 percentage points higher	54,658	49,233
0.50 percentage points higher	51,779	46,489

PROPERTY VALUES WITH OTHER YIELD REQUIREMENTS, BY CATEGORY

	Dec 31, 2020	Dec 31, 2019	Dec 31, 2020	Dec 31, 2019	Dec 31, 2020	Dec 31, 2019
					Public use	Public use
SEK million	Residential	Residential	Commercial	Commercial	properties	properties
0.50 percentage points lower	40,089	35,116	24,173	23,366	2,078	1,895
0.25percentagepoints lower	37,245	32,509	22,601	21,761	1,937	1,757
Propertyvalue	34,877	30,340	21,239	20,374	1,816	1,640
0.25 percentage points higher	32,874	28,507	20,072	19,189	1,712	1,538
0.50 percentage points higher	31,155	26,935	19,004	18,106	1,620	1,448

PROPERTY VALUES WITH CHANGED RENTAL INCOME, ACCUMULATED

SEK million	Dec 31, 2020	Dec 31, 2019
5percentagepoints higher	60,912	55,143
Propertyvalue accordingto our estimate	57,933	52,354
5 percentage points lower	54,954	49,564

PROPERTY VALUES WITH CHANGED RENTAL INCOME, BY CATEGORY

	Dec 31, 2020	Dec 31, 2019	Dec 31, 2020	Dec 31, 2019	Dec 31, 2020	Dec 31, 2019
					Public use	Public use
SEK million	Residential	Residential	Commercial	Commercial	properties	properties
5percentagepoints higher	36,638	31,953	22,358	21,454	1,916	1,736
Propertyvalue	34,877	30,340	21,239	20,374	1,816	1,640
5 percentage points lower	33,117	28,727	20,121	19,294	1,717	1,543

PROPERTY VALUES WITH CHANGED OPERATING EXPENSES, ACCUMULATED

SEK million	Dec 31, 2020	Dec 31, 2019
5percentagepoints higher	57,322	51,752
Propertyvalue accordingto our estimate	57,933	52,354
5 percentage points lower	58,544	52,956

PROPERTY VALUES WITH CHANGED OPERATING EXPENSES, BY CATEGORY

	Dec 31, 2020	Dec 31, 2019	Dec 31, 2020	Dec 31, 2019	Dec 31, 2020	Dec 31, 2019
					Public use	Public use
SEK million	Residential	Residential	Commercial	Commercial	properties	properties
5percentagepoints higher	34,465	29,942	21,055	20,185	1,802	1,625
Propertyvalue	34,877	30,340	21,239	20,374	1,816	1,640
5 percentage points lower	35,290	30,739	21,424	20,563	1,830	1,654

96 GROUP ACCOUNTING PRINCIPLES AND NOTES

Note 16. Wind turbines

Accounting principle

Wind turbines are recognized at cost less accumulated depreciation and impairment losses. Depreciation is carried out according to plan over the useful life in relation to cost. Wind turbines are subject to an impairment test under IAS 36, according to the principles described in Note 1.

In building leases, rent for land is paid where Wallenstam’s wind turbines are constructed. Land lease rents, which have minimum rents as a price component, are recognized as an asset and liability, respectively, in the balance sheet. In the income statement, the leasehold fees are presented as depreciation and as a financial expense compared to previous years when they were recognized as an operating expense. The weighted average interest was 3.3 percent. The overall impact on total assets was SEK 16 million (17).

Assessments and estimates

Items of property, plant and equipment are depreciated over the period during which in the assessment of company management they are expected to generate revenue. Expected cash flows for a wind turbine are estimated to be 22.5 years.

When there are indications that an asset has fallen in value, or in order to estimate if previous impairment losses are no longer justified, the asset’s recoverable amount is calculated, which is the

higher of the asset’s fair value less selling expenses and its value in use. To calculate an asset’s value in use, company management must make a number of assessments and estimates. This value in use is based on cash flow forecasts for the useful life. Cash flows are affected by commercial factors such as market growth, competitiveness, prices, margins, cost trends, investment levels, tied up working capital, expected price and demand levels relating to electricity and renewable energy certificates as well as weather and wind conditions. Additional assessment of such factors as the interest rate situation, borrowing costs, market risk, beta values and tax rates is performed in connection with discounting.

The production volume is based on the budget and was assessed in the impairment test as a normal year in accordance with the latest available statistics. As an input electricity price in the valuation model, an average price based on historical data in combination with expectations of the future price based on the Board’s and Management’s best estimate using current market data. This price forms the basis for estimating cash flows for the period 2021. In addition, for periods after 2022, an average annual growth rate of 1.5 percent was assumed for the period, where the latest inflow and outflow of cash and cash equivalents occurs. Yield requirement before tax was fixed at 5 percent (5).

WIND TURBINES

SEK million	Dec 31, 2020	Dec 31, 2019
Opening acquisition cost	2,427	2,605
Sales during the year	-	-202
Translation diferences	-	7
Right-of-use asset land leases	-	17
Closing accumulated acquisition cost	2,427	2,427
Opening depreciation	-712	-637
Depreciation for theyear	-76	-76
Closing accumulated depreciation	-787	-712
Opening impairment losses	-606	-801
Sales during the year	-	202
Translation diferences	-	-7
Closing accumulated impairment losses	-606	-606
Carrying amount wind turbines	1,033	1,109
Future investment commitments	30	31

The impairment test was carried out by identifying the recoverable amount of wind turbines according to the principles and assumptions set out above. Measurement took place per wind farm, which

corresponds to the lowest cash-generating unit. The impairment test did not result in any adjustment in value. Sensitivity analyses have been carried out.

GROUP ACCOUNTING PRINCIPLES AND NOTES 97

Note 17. Equipment

Accounting principle

Equipment is recognized at cost less accumulated depreciation and any impairment losses. The useful life of equipment, the depreciation method and residual value are assessed on a continuous basis. Depreciation occurs according to plan over the useful life: 10 years equivalent to 10 percent for furniture and 5 years equivalent to 20 percent for other equipment. Works of art are not depreciated.

Depreciation of equipment is included in the income statement item Management costs and administrative expenses.

Equipment is subject to testing for impairment under IAS 36, according to the principles described in Note 1.

CHANGES DURING THE YEAR, EQUIPMENT

SEK million	Dec 31, 2020	Dec 31, 2019
Opening acquisition cost	95	88
Investments during the year	14	12
Sales/retirements duringtheyear	-2	-5
Closing accumulated acquisition cost	107	95
Opening depreciation	-42	-42
Depreciation for the year	-5	-4
Sales/retirements duringtheyear	2	4
Closing accumulated depreciation	-45	-42
Carrying amount equipment	62	53

Note 18. Financial assets

Accounting principle

All shares and participations are measured at fair value in accordance with the principles for financial instruments which are described in Note 30, Financial assets measured at fair value in other comprehensive income and Financial assets measured at fair value through profit or loss. For holdings listed on the stock market, this corresponds to the market price on closing day and thus is level 1 in the fair value hierarchy under IFRS 13. For other shareholdings and shared property interests, the fair value assessment is based on currently available information such as the price of the recently carried out issues, profit from sales of similar participations and corresponds to level 3 in the fair value hierarchy and otherwise in accordance with IFRS 9. The item also contains promissory note receivables, which are recognized at amortized cost.

Market risk

Losses on other securities held as non-current assets and other shares of property interests arise if the value of the shares decreases.

Credit risk

Losses on promissory note receivables occur when the counterparty for some reason cannot fulfill its payment obligations. For a further description of credit risk, see Note 3 and Note 30.

SECURITIES HELD AS NON-CURRENT ASSETS AND SHARES OF PROPERTY INTERESTS

SEK million	Dec 31, 2020	Dec 31, 2019
Carrying amount, Jan 1	152	63
Sales during the year	-32	-
Investments during the year	-	10
Change in value for theyear	-1	79
Carrying amount securities held as non-current assets and shares of property interests	119	152

Securities held as non-current assets consist of Exeger Sweden AB (publ) SEK 100 million (100), Tmpl Solutions AB of SEK 10 million (10), and shares of property interests of SEK 9 million (9). During the year, all securities in Eolus Vind AB were divested.

98 GROUP ACCOUNTING PRINCIPLES AND NOTES

Note 18. Financial assets, cont.

OTHER NON-CURRENT RECEIVABLES

SEK million	Dec 31, 2020	Dec 31, 2019
Carrying amount, Jan 1	397	346
New receivables	44	59
Reclassifcation accrued income	-1	8
Provision for expected credit losses.	-1	0
Amortizations	-28	-15
Carrying amount other non-current receivables	410	397

Other non-current receivables consist mainly of promissory note receivables. The weighted average effective interest rate for interestbearing non-current receivables was 3.18 percent (3.06). All non-

current receivables follow payment plans, which means that there are no non-current receivables that are overdue. The provision relates to identified risk of losses in relation to promissory note receivables.

Note 19. Financial derivative instruments

Accounting principle

Wallenstam’s financial derivative instruments consist mainly

of interest rate and electricity derivatives but also of currency futures contracts.

Financial derivative instruments are recognized at fair value in accordance with IFRS 9. In order to determine fair value, market interest rates are used for each maturity, exchange rates and electricity prices, as if they were quoted on the market on closing day.

Interest rate swaps are measured by discounting future cash flows to present value while instruments with an option feature are measured at the current repurchase price. When derivatives are realized, the arising effect is recognized as part of interest expenses whereupon the equivalent reversed effect arises as an unrealized change in value of interest rate derivatives. Fair value is determined according to IFRS 13 level 2.

Wallenstam uses interest rate derivatives to achieve a desired interest maturity profile. If the agreed interest rate deviates from the market interest rate, a surplus or deficit will arise for the interest rate derivatives. The difference in value that arises, which does not affect

cash flow, is recognized through profit or loss. The changes in value may be realized or unrealized. Realized changes in value refer to settled interest rate derivative contracts and constitute the difference between the latest carrying amount and the determined price at redemption. Unrealized changes in value refer to the change in value that has arisen for Wallenstam’s derivative contracts since the previous year, or compared to cost if the contracts were concluded during the year.

In order to secure revenue from production of electricity and reduce the impact of market fluctuations, Wallenstam hedges parts of the electricity price in the financial market. Electricity derivatives are measured at market value on closing day and are classified at level 2. As we do not apply hedge accounting for electricity derivatives, no reversal effect arises in unrealized changes in value in connection with realization. Currency derivatives, which are used to hedge cash flows in foreign currency, are also classified at level 2. Hedge accounting is applied for these items. As the hedge is deemed effective, the change is recognized in other comprehensive income or else in profit or loss.

FINANCIAL DERIVATIVE INSTRUMENTS

SEK million	Dec 31, 2020 Assets Liabilities	Dec 31, 2019 Assets Liabilities
NON-CURRENT DERIVATIVE INSTRUMENTS Interest rate swap contracts Currencyderivatives	10 -522 - 0	6 -354 0 -1
Carrying amount non-current derivative instruments CURRENT DERIVATIVE INSTRUMENTS Interest rate swap contracts Electricity derivatives Currencyderivatives	10 -522 - - - 0 - -3	6 -356 - -2 2 - - -
Carrying amount current derivative instruments Total derivative instruments	- -3 10 -525	2 -2 8 -357

The total change in the value of derivative instruments during the year amounted to SEK -166 million (-283). All interest and electricity derivatives are measured at fair value and recognized in the

income statement. Currency futures contracts are measured at fair value and recognized in other comprehensive income.

GROUP ACCOUNTING PRINCIPLES AND NOTES 99

Note 19. Financial derivative instruments, cont.

MATURITY STRUCTURE, FINANCIAL DERIVATIVE INSTRUMENTS

SEK million	Dec 31, 2020	Dec 31, 2019
0–3 months	-1	2
3 months–1 year	-	-2
1–5 years	-77	-13
>5years	-437	-336
Total	-515	-349

Under the Group’s financial policy, the Group’s average fixed interest term should be within the 24–60 month range. This is largely managed by using interest rate derivatives. Permitted instruments for managing interest rate risk include: interest rate swaps, extendable interest rate swaps (interest rate swap + swaption), FRA, caps and floors combined with collars and performance swaps. Permitted counterparties are Swedish banks and foreign banks with established operations in Sweden.

Under the Group’s energy policy, the hedged volume for electricity production should not exceed 70 percent of the Group’s average electricity production for each month. However, after approval by the CEO of Wallenstam AB, the hedged volume may amount to 100 percent of the forecast production. With regard to the Group’s consumption in own properties, including tenants’ sub-meters, this can be hedged up to 100 percent in relation to forecast consumption for each month. The maturity of hedging agreements may cover a period of up to five years.

A financial asset and a financial liability are offset and recognized as a net amount in the balance sheet only where there is a legal right to offset the amounts and it is intended that the items will be settled by

a net amount or that the asset will be realized and the liability settled simultaneously. All of Wallenstam’s contracts for financial instruments such as interest rate swaps and futures contracts are recognized at gross value, as no legally binding netting agreements exist.

In connection with measurement of derivatives at fair value, no adjustment is made for counterparty risk in the form of Credit Value Adjustment (CVA) and Debt Value Adjustment (DVA), as the differential is not significant.

Interest rate swaps

The nominal amount of the Group’s outstanding interest rate swaps as of December 31, 2020 amounted to SEK 12,150 million (10,550), of which we obtained a variable interest rate and paid a fixed interest rate on the entire volume (9,700). For the remaining volume in the previous year, SEK 850 million, a fixed interest rate was obtained and a variable interest rate was paid. On December 31, 2020, the fixed swap interest rates payable to banks varied between 0.15-1.32 percent (0.40-1.32). The variable swap interest rates obtained from the banks correspond to STIBOR 3M.

Note 20. Intangible assets

Accounting principle

Intangible assets consist of renewable energy certificates, which Wallenstam receives from the Swedish Energy Agency in its capacity as a generator of electricity from renewable energy sources. Renewable energy certificates are obtained free of charge as eligible electricity is generated and are initially recognized according to IAS 38 at cost remeasured to the market value on the vesting date as Intangible assets and revenue under Other income. After initial recognition, the created certificates are recognized at fair value through remeasurement to market value based on the closing day spot price. The spot price is set through bids from market players via Svensk Kraftmäkling (SKM) and corresponds to IFRS 13 level 2.

Wallenstam’s energy production generates a surplus of renewable energy certificates. In connection with the remeasurement of the renewable energy certificate inventory to the closing day spot price, changes in value arise, which are recognized against other income.

To reduce the impact of market fluctuations, the Group hedges sales of renewable energy certificates using futures contracts. Thus, most of the closing inventory of renewable energy certificates on closing day is contracted for sale. In the case that the value of the entered into contract is less than the closing day rate, the renewable energy certificates are measured at the lower, contracted price and otherwise at the closing day rate.

There is an obligation to deliver renewable energy certificates to the competent authority in the country concerned in connection with electricity sales. This obligation is recognized as an expense and a liability. The expense per certificate represents the latest carrying amount as determined by the remeasurement method for intellectual property rights.

CHANGE IN INTANGIBLE ASSETS

SEK million	Dec 31, 2020	Dec 31, 2019
Carrying amount, Jan 1	14	58
Production during the year	5	29
Cancellations during the year due to own consumption	-	-17
Acquisitions during the year	-	0
Sales during the year	-16	-48
Unrealized changes in value after initial recognition	-2	-8
Carrying amount renewable energy certifcates in inventory	1	14

100 GROUP ACCOUNTING PRINCIPLES AND NOTES

Note 21. Development properties

Accounting principle

The properties, which are under construction in order to be sold on completion, either in their entirety or by apartment, are recognized in the balance sheet in the line item Development properties. Development properties are continually recognized at cost (or

net realizable value if this is lower). A profit/loss is recognized when the development property is completed, sold and handed over to the buyer. See also Note 10.

DEVELOPMENT PROPERTIES

SEK million	Dec 31, 2020	Dec 31, 2019
Carrying amount, Jan 1	175	317
Constructions	124	52
Reclassifcation development properties	180	-
Sold development properties	-309	-159
Sold co-opapartment units	-44	-35
Carrying amount development properties	126	175

Note 22. Trade receivables

Accounting principle

Trade receivables are recognized according to the principles described in Note 30 for financial assets measured at amortized cost.

TRADE RECEIVABLES

SEK million	Dec 31, 2020	Dec 31, 2019
Trade receivables	35	23
Lessprovisions for expected credit losses	-17	-7
Carrying amount trade receivables	18	15

PROVISIONS FOR EXPECTED CREDIT LOSSES

SEK million	Dec 31, 2020	Dec 31, 2019
Provisions at beginning of the year	-7	-6
Confrmed losses	3	1
Settled receivables	5	5
Provision for expected credit losses	-17	-7
Provisions at year-end	-17	-7

Trade receivables due more than two months amounted to SEK 15 million (11). For a description of credit risk, see Note 3.

GROUP ACCOUNTING PRINCIPLES AND NOTES 101

Note 23. Other receivables

Accounting principle

Other receivables are recognized according to the principles described in Note 30 for financial assets measured at amortized cost.

OTHER RECEIVABLES

SEK million	Dec 31, 2020	Dec 31, 2019
Receivables during property transactions	0	1
VAT receivables	1	24
Receivables from suppliers	4	15
Promissory notes	8	-
Other	5	3
Carrying amount other receivables	18	43

Note 24. Prepaid expenses and accrued income

Accounting principle

Accrued income is recognized according to the principles described in Note 30 for financial assets measured at amortized cost.

Credit risk

Credit risk in accrued income mainly exists for allocated rent discounts. For these items, a model for credit loss risks has been established.

PREPAID EXPENSES AND ACCRUED INCOME

SEK million	Dec 31, 2020 Dec 31, 2019
Prepaid operating expenses Prepaid administrative expenses Prepaid expenses connected to transactions Input VAT in projects in progress Prepaid fnancing costs Accrued interest income Accrued income	12 11 7 6 - 1 40 29
	6 8 2 1 13 19
Carrying amount prepaid expenses and accrued income	81 75

Accrued income mainly consists of accrued electricity revenue.

Note 25. Participations

Accounting principle

Measurement of participations occurs at amortized cost, according to the principles described in Note 30 relating to financial assets measured at amortized cost.

Participations consist of externally acquired holdings in housing co-ops.

PARTICIPATIONS

SEK million	Dec	31, 2020	Dec	31, 2019
Opening acquisition cost		6		10
Investments during the year		20		17
Sales duringtheyear		-14		-21
Carrying amount participations		12		6

102 GROUP ACCOUNTING PRINCIPLES AND NOTES

Note 26. Cash and cash equivalents

Accounting principle

Wallenstam’s cash and cash equivalents consist of cash and bank balances and investments in securities with a maturity of less than three months measured at amortized cost. These assets are considered to be immediately negotiable with negligible risk of

changes in value, which means the carrying amount corresponds to fair value. Where appropriate, utilized overdraft facilities are recognized as borrowing among current liabilities.

CASH AND CASH EQUIVALENTS

SEK million	Dec 31,	2020	Dec 31, 2019
Available liquid assets	1,318		928
Blocked bank balances		-	1
of which approved amount, overdraft facilities		-800	-800
of which, utilized amount, overdraft facilities		-	-
Available amount, overdraft facilities.		-800	-800
Cash and cash equivalents		518	129
Cash and cash equivalents consist of cash balances deposited in			31, 2020, accessi
accounts with major Swedish banks. In addition to the above, there			which SEK 2,470
are credit facilities and fnancing frameworks of SEK 3,000 million			for outstanding is
(6,500), which were available for use on closing day. On	December		SEK 1,848 million

31, 2020, accessible liquidity totaled SEK 4,318 million (7,428), of which SEK 2,470 million (3,993) is an underlying credit commitment for outstanding issued commercial paper. Of the accessible liquidity, SEK 1,848 million (3,435) was available for use on closing day.

Note 27. Equity

Accounting principle

Equity in the Group is distributed as follows: Share capital corresponds to the parent company’s share capital. Other contributed capital consists of capital contributed by shareholders in addition to share capital. Other reserves consist of such amounts that must be recognized in other comprehensive income under IFRS rules. Profit brought forward consists of accumulated profits from the Group’s operations and net profit for the year, less dividends to shareholders. This category includes the parent company’s recognized statutory reserve to the extent it consists of amounts carried forward from net profit in previous years.

Repurchased own shares including related repurchase expenses are recognized as a reduction of retained earnings. Dividends paid to the parent company’s shareholders are recognized as a reduction in equity once approved by the AGM.

A specification of change in equity is provided in the Consolidated Statement of Changes in Equity, immediately after the consolidated balance sheet.

The share capital in Wallenstam AB consists of 34,500,000 A shares, which carry ten votes each, and 295,500,000 B shares, which carry one vote each. The total number of shares amounted to 330,000,000 and the registered share capital is SEK 165,000,000, corresponding to a quota value of SEK 0.50 (0.50) per share.

On closing day, the number of repurchased B shares amounted to 7,000,000 (7,000,000), representing 2 percent of the share capital. No shares (-) were repurchased during 2020. The average expense for all treasury shares amounts to SEK 76.27 (76.27) per share.

The proposed dividend for the 2020 financial year is SEK 1.20 per share (0.50).

GROUP ACCOUNTING PRINCIPLES AND NOTES 103

Note 28. Deferred tax liability

Accounting principle

Deferred tax is calculated according to the balance sheet method on all temporary differences arising between carrying amounts and fiscal values of assets and liabilities. Deferred tax assets and deferred tax liabilities are measured at nominal amounts in the balance sheet and in accordance with the tax regulations and tax rates that are enacted or announced on closing day.

Exceptions are made for temporary differences that arise on initial recognition of assets and liabilities that constitute asset acquisitions. No deferred tax is recognized for these. In Wallenstam, there are mainly four items where temporary differences occur that constitute a basis for recognition of deferred tax: properties, wind turbines, changes in value of derivative instruments and loss carryforwards. Deferred tax liability consists primarily of the temporary difference between the carrying amounts of properties and their fiscal value.

A deferred tax asset in respect of deductible temporary differences and loss carryforwards is recognized to the extent that it is probable it may be used against future profits and thus lead to lower tax expenditures. A deferred tax asset or deferred tax liability is recognized in the case of changes in the value of financial derivative instruments depending on whether the market values at the time constitute a liability or an asset. Should any change to the abovementioned balance sheet items occur, the deferred tax liability/asset is also changed, and this is recognized in the income statement as

deferred tax. There are no time limitations in respect of the Group’s losses and all Swedish loss carryforwards in the Group are measured.

Deferred tax assets are recognized net in the balance sheet, as are deferred tax liabilities where these apply to the same tax authority (country).

Estimates and assessments

According to the accounting rules, deferred tax should be recognized at nominal value without discounting at the prevailing tax rate. During 2020, the tax rate amounted to 21.4 percent, and then from January 1, 2021 it was reduced to 20.6 percent. When measuring loss carryforwards an assessment is made of the probability that the loss can be utilized in the future and at what point in time. Confirmed losses which with a high degree of certainty can be used against future profits form the basis for calculating deferred tax assets. In the case of asset acquisitions, no deferred tax is recognized attributable to the acquisition.

Deferred tax assets include measured loss carryforwards totaling SEK 251 million (298), which corresponds to the value for tax purposes of the Group’s Swedish loss carryforwards. The Group also has accumulated losses of SEK 17 million (48), related to sale of properties.

DEFERRED TAX ASSETS

SEK million	Dec 31, 2020 Basis Tax	Dec 31, 2020 Basis Tax	Dec 31, 2019 Basis Tax	Dec 31, 2019 Basis Tax
LOSS CARRYFORWARDS Opening balance Change in tax loss carryforwards during the year Acquired/divested losses Non-measured losses Adjustment of tax, previous years Reclassifcation Remeasurement deferred tax	1,448 298 -200 -43 0 0 0 0 0 0 -30 -6 - 2		1,674 345 -215 -46 -5 -1 -1 0 0 0 -5 -1 - 1
At year-end as per balance sheet DERIVATIVES Opening balance Change in value for the year, unrealized Remeasurement deferred tax	1,218 251 349 72 166 36 - -1		1,448 298 25 5 323 69 - -3
At year-end as per balance sheet PENSION COMMITMENTS INCL. PAYROLL TAX Opening balance Change during the year Remeasurement deferred tax	515 106 50 10 -1 0 - 0		349 72 46 9 4 1 - 0
At year-end as per balance sheet OTHER TEMPORARY DIFFERENCES Opening balance Change during the year Reclassifcations Remeasurement deferred tax	49 10 31 6 -12 -3 30 6 - 0		50 10 53 11 -32 -7 10 2 - 0
At year-end as per balance sheet TOTAL DEFERRED TAX ASSETS	49 1,832	10 377	31 1,878	6 387

104 GROUP ACCOUNTING PRINCIPLES AND NOTES

Note 28. Deferred tax liability, cont.

DEFERRED TAX LIABILITY

SEK million	Dec 31, 2020 Basis Tax	Dec 31, 2019 Basis Tax
PROPERTIES Opening balance Reconstructions during the year Depreciation for the year Additional depreciation for the year Change in value for the year, investment properties Change in value for the year, other comprehensive income Reversals for the year, due to sales Other Adjustment of tax, previous years Reclassifcation Remeasurement deferred tax	27,479 5,687 428 92 508 109 -1 0 1,339 291 - - 5 1 0 0 - 0 - - - -18	24,115 4,978 386 83 422 90 -1 0 2,600 573 0 0 -48 -10 - - - - 5 1 - -28
At year-end as per balance sheet WIND TURBINES Opening balance Depreciation for the year Additional depreciation for the year Change in value for the year, fnancial instruments Remeasurement of participations in foreign subsidiaries. Other Adjustment of tax, previous years Remeasurement deferred tax	29,757 6,161 105 22 -1 0 51 11 -24 -5 0 0 1 0 - - - 0	27,479 5,687 -64 -13 -1 0 87 19 19 4 -1 0 1 0 64 14 - -1
At year-end as per balance sheet TOTAL DEFERRED TAX LIABILITIES NET DEFERRED TAX Opening balance Change duringtheyear	132 27 29,889 6,188 25,706 5,322 2,351 489	105 22 27,584 5,709 22,253 4,595 3,453 727
At year-end as per balance sheet	28,057 5,811	25,706 5,322

Note 29. Other provisions

Accounting principle

A provision is recognized when the Group has a legal or informal obligation as a result of prior events where it is probable that an outflow of resources will be required to settle the commitment and a reliable estimate of the amount can be made. The amount that is expected to be required to settle the obligation is recognized as a provision. Recognized provisions consist of those for pensions, commitments in sold properties and, where appropriate, termination benefits and estimated amounts for risks in disputes. Under IFRIC

21, property tax is entered as a liability in full when the obligation arises, which occurs on January 1, every year.

Capital value pension provisions and pension commitments are recognized at fair value and net according to IAS 19. Other provisions are recognized in accordance with IAS 37 item 36 of an amount that is a best estimate at the end of the period.

GROUP ACCOUNTING PRINCIPLES AND NOTES 105

Note 29. Other provisions, cont.

OTHER PROVISIONS

SEK million	Dec 31, 2020	Dec 31, 2019
Opening capital value, provision for pension commitments	-54	-42
Provision for the year future obligations	-2	-2
Change in value for the year	-2	-10
Netpayments duringtheyear	3	1
Closing debt capital value, provision for pension commitments	-55	-54
Closingasset capital value ofpension commitments	55	54
Net value of pension commitments	0	0
SEK million	Dec 31, 2020	Dec 31, 2019
Opening balance other provisions	188	68
Change in value provision options scheme liability	37	40
Change in value special payroll tax relating to endowment insurance	0	3
Provision for the year for future obligations aftermarket
measures, completed transactions	10	-
Sale foreign operation	-56	56
Reversal of obligation aftermarket measures, completed
transactions	-38	-6
Reclassifcation	-	28
Other	0	-1
Closing balance other provisions	142	188

Note 30. Financial instruments and financing

Accounting principle

Financial instruments recognized in the balance sheet include:

• » financial assets and financial liabilities measured at fair value through profit or loss

• » financial assets and financial liabilities measured at fair value through other comprehensive income

• » financial assets and liabilities measured at amortized cost.

The classification depends on the purpose for which the financial asset or liability was acquired.

A financial instrument is measured initially at fair value plus transaction costs, with the exception of the categories financial assets or financial liabilities measured at fair value through profit or loss, which are recognized at fair value excluding transaction expenses.

A financial asset or liability is carried in the balance sheet when the company becomes party to an agreement. Trade receivables are carried in the balance sheet when invoices are sent. A liability is recognized when the counterparty has performed and a contractual obligation exists to pay, even if an invoice has not been received. A financial asset (or part thereof) is derecognized when the contractual rights are realized, lapse or the company transfers in all material respects the risks and benefits associated with ownership. A financial liability (or part thereof) is derecognized when the obligation in the agreement is fulfilled or is otherwise extinguished. A financial asset and a financial liability are offset and recognized as a net amount in the balance sheet only where there is a legal right to offset the amounts and that there is

an intention that the items will be settled by a net amount or that the asset will be realized and the liability settled simultaneously. Wallenstam recognizes its financial contracts at gross value for financial instruments such as interest rate swaps and currency futures contracts as no legally binding netting agreements exist. Wallenstam has not identified any embedded derivatives. The Group assesses the credit risks for a financial asset on an ongoing basis. When a risk of loss is identified, a provision is made of the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted by the original effective interest rate.

In accordance with IFRS 13, the fair value of certain assets and liabilities should be disclosed even when they are not measured at fair value in the balance sheet. Wallenstam has loans with the major Swedish banks. According to Wallenstam’s finance policy, an individual bank may at most account for 50 percent of the financing to safeguard the spread of risks in relation to financiers. Wallenstam’s capital tied up including credit commitments at year-end was 17 months (13). Of the interest-bearing liabilities, loans with capital tied up for long terms amounted to 23 percent (16) of the total loan portfolio. Wallenstam has diversified property holdings with approximately equal proportions of residential and commercial space. Combined with the company’s stable development over time, this means no immediate substantial changes in counterparty risk are anticipated for the Wallenstam Group. The fair value of the Group’s credit liabilities is considered to essentially correspond to the Group’s amortized cost.

106 GROUP ACCOUNTING PRINCIPLES AND NOTES

Note 30. Financial instruments and financing, cont.

Financial assets and financial liabilities measured at fair value through profit or loss

This category consists of two sub-groups: financial assets and financial liabilities held for trading, i.e. whose main purpose is to be sold or repurchased in the short term, and derivatives. Derivatives are classified as held for trading if they are not identified as hedges. Financial assets and liabilities in this category are measured on an ongoing basis at fair value, with changes in value recognized in profit or loss. This category mainly includes interest rate and electricity derivatives as well as minor holdings in listed companies. The value of investments in listed shares is calculated using quoted market prices.

Derivative instruments are recognized in the balance sheet on the date of contract at fair value, both on initial and subsequent remeasurement.

SUMMARY FAIR VALUE HIERARCHY FINANCIAL INSTRUMENTS

	Fair value hierarchy	Note
Holdings in listed companies	1	18
Interest rate derivatives	2	19
Electricity derivatives	2	19
Currency derivatives	2	19
Renewable energy certifcates	2	20

Other liabilities are measured at amortized cost, which corresponds to nominal value plus additional or outgoing valuation items. No change or transfer of any instruments between the different levels of the fair value hierarchy took place during 2020.

Financial assets measured at amortized cost

This category includes rent and trade receivables, cash and cash equivalents, promissory note receivables, participations and other receivables. These are measured at amortized cost. Amortized cost is determined on the basis of the effective interest rate that was calculated on the date of acquisition. Trade receivables are recognized at nominal amounts without discounts as their expected terms are short. Financial assets measured at amortized cost are recognized at the amounts expected to be received, in other words less doubtful receivables. Cash and cash equivalents are recognized at nominal value. Trade receivables consist chiefly of rent receivables and trade receivables in respect of electricity production sales. Promissory note receivables are mainly related to property transactions.

Participations are recognized under current assets and consist of externally acquired shares in housing co-ops. When co-op apartment units are sold, the income is recognized in the line “Revenue, development property sales” and the sold unit’s carrying amount as “Expenses, development property sales”.

Financial assets and financial liabilities measured at fair value through other comprehensive income

Financial assets measured at fair value through other comprehensive income include non-derivative assets. Measurement is initially at fair value, usually cost. Fair value adjustment of these instruments is recognized in other comprehensive income in the income statement and in the balance sheet as securities held as non-current assets and participations. Dividends and interest income attributable to these assets are recognized in the income statement. In Wallenstam, these consist of holdings in the unlisted companies Exeger Sweden AB and Tmpl Solutions AB.

Financial liabilities recognized at amortized cost

Loans from credit institutions and suppliers and other liabilities are measured at amortized cost. Wallenstam’s liabilities consist primarily

of liabilities to credit institutions and operating liabilities such as trade payables. Liabilities with a term of more than 12 months are recognized as non-current, others as current. The majority of Wallenstam’s liabilities have a shorter maturity than 12 months and are recognized as current. Overdraft facilities refer to loans under current liabilities. Loans are raised in Swedish kronor and are recognized in the balance sheet on settlement day at fair value less transaction costs on initial recognition.

Financial risk factors

In addition to operational and external risks, through its operations Wallenstam is exposed to various financial risks such as interest rate risk, liquidity risk, currency risk and financing risk. These risks arise in the Group’s reported financial instruments such as cash and cash equivalents, interest-bearing receivables, trade receivables, trade payables, borrowings and derivatives and are described further per category below.

Financial risk management

To minimize its risks, Wallenstam works through its finance department according to the financial policy that is reviewed and approved by the Board annually. The policy describes the purpose, organization and distribution of duties for financing activities, along with rules for financial risk management. It seeks to limit the company’s financial risks, which mainly consist of interest rate risk, refinancing risk and liquidity risk.

Wallenstam’s financial operations are centralized in the parent company’s finance department, which acts as an internal bank with responsibility for borrowing, cash management and financial risk management. Wallenstam strives to achieve a balance between a good return on equity and an acceptable level of risk. The finance department has instructions, systems and a division of duties that aim to achieve good internal control and operational follow-up. Major financing solutions must be approved by the Board of Directors and the Board is informed about financial matters at every Board meeting.

Liquidity risk

A liquidity risk involves a situation where cash and cash equivalents for payment of commitments cannot be secured.

Wallenstam prioritizes a low loan-to-value ratio, which provides greater freedom of action to fulfil approved investments and payment obligations. Wallenstam makes forecasts on an ongoing basis regarding Group liquidity based on anticipated cash flows. The Group’s liquidity risk is limited by aiming to hold liquid assets corresponding to at least three months of known net payments at any given time. Available liquid assets, including available bank overdraft facilities, amounted to SEK 1,318 million (928). Approved overdraft facilities amounted to SEK 800 million (800), of which no portion was used on closing day. At the end of 2019, the EIB (European Investment Bank) approved a credit facility of SEK 2,500 million for new construction of energy-efficient rental apartments. During the year, SEK 2,500 million (-) was drawn down from the facility. During the third quarter, we opted to reduce the backup facility for commercial paper from SEK 4,000 million to SEK 3,000 million, since we have a lower volume of outstanding commercial paper. The Group’s approved and unutilized credit facilities totaled SEK 3,000 million (6,500), excluding the overdraft facility.

On December 31, 2020, accessible liquidity totaled SEK 4,318 million (7,428), of which SEK 2,470 million (3,993) represents a credit commitment for issued outstanding commercial paper.

GROUP ACCOUNTING PRINCIPLES AND NOTES 107

Note 30. Financial instruments and financing, cont.

Financing risk and covenants

Financing risk corresponds to difficulties in obtaining financing for the operations at a given time.

Wallenstam works actively to achieve low financing risk in relation to market pricing, i.e. the best possible net financial items within a given risk framework. The Board of Directors sets the level of capital tied up in the loan portfolio on a continuous basis. The Group has long-term collaboration with the major Swedish business banks. The goal is to have financing from at least three of the major Swedish commercial banks and a loan portfolio with a spread of maturities and terms in relation to pricing. The Group should limit refinancing risk by always planning refinancing negotiations in advance.

To optimize the terms of the loan portfolio, the Group’s borrowing is generally guaranteed by the parent company. The loans mostly consist of traditional loans with property mortgages as security, but also of bond loans and commercial paper. In May 2019, Wallenstam launched green bonds under its existing MTN program (Medium Term Notes), which were listed on Nasdaq Stockholm’s Sustainable Bond market. The issue proceeds for these green bonds can only be allocated to projects and assets that qualify according to Wallenstam’s green framework. In 2020, SEK 650 million (1,000) of green bonds were issued. Total outstanding green bonds on closing day amounted to SEK 1,650 million (1,000). Wallenstam’s MTN program with a framework amount of SEK 5 billion, consists of SEK 2,800 million (3,950), of which SEK 1,150 million (1,000) was issued during 2020. The financing

of wind farms is mainly secured through the bond market. For the commercial paper program and outstanding bond loans no sureties are pledged.

For commercial paper, with a framework of SEK 4,000 million (4,000), Wallenstam has undertaken, at each given time, to have access to liquidity facilities that in terms of maturity and total nominal amount are at least equivalent to outstanding commercial paper. This facility was reduced in the third quarter of the year from SEK 4,000 million to SEK 3,000 million. Outstanding commercial paper on closing day amounted to SEK 2,470 million (3,993). Accessible credit facilities including liquid assets amounted to SEK 4,318 million (7,428), of which SEK 2,470 (3,993) represents a credit commitment for issued outstanding commercial paper.

At the end of 2019, the EIB (European Investment Bank) approved a credit facility of SEK 2,500 million for new construction of energy-efficient rental apartments. During 2020, the entire amount was drawn down and is included in the long-term interest-bearing bank loan agreements presented below of SEK 5,006 million. The loan is unsecured provided that the following conditions are met: » the interest coverage ratio shall not be less than 1.5 times

• » the loan-to-value ratio shall not exceed 65 percent

• » unpledged assets shall not be less than 18 percent and

• » indebtedness in Group companies excluding Wallenstam AB shall not exceed 75 percent of the Group’s total liabilities.

• All conditions are met.

The interest-bearing liabilities on closing day amounted to SEK 27,785 million (24,302), of which SEK 493 million (421) related to a lease liability and SEK 6,899 million (4,303) were non-current.

BOND LOANS

Date of issue	Balance, SEK million Term,year	Balance, SEK million Term,year	Maturity	Interest rate	Other
November 2017	250	5	2022	variable, STIBOR 3M +140 points	Within the MTN program
September 2018	200	3	2021	variable, STIBOR 3M +93 points	Within the MTN program
October 2018	200	2.5	2021	variable, STIBOR 3M +88 points	Within the MTN program
May 2019	500	2	2021	variable, STIBOR 3M +75 points	Within the MTN program
September 2019	500	2	2021	variable, STIBOR 3M +60 points	Within the MTN program
January 2020	200	2	2022	variable, STIBOR 3M +50 points	Within the MTN program
February 2020	300	2.5	2022	variable, STIBOR 3M +60 points	Within the MTN program
September 2020	300	2	2022	fxed, 69.5 points	Within the MTN program
November 2020	350	2	2022	variable, STIBOR 3M +60points	Within the MTNprogram
Total bond loans	2,800

FINANCING

	Dec 31, 2020	Dec 31, 2020	Dec 31, 2019	Dec 31, 2019
SEK million	Agreement	Utilized	Agreement	Utilized
Current interest-bearing bank loan agreements	17,021	17,021	13,711	13,711
Non-current interest-bearing bank loan agreements	5,006	5,006	4,734	2,234
Overdraft facility	800	-	800	-
Total interest-bearing loan agreements	22,827	22,027	19,245	15,945
Current bonds, MTN	1,400	1,400	2,300	2,300
Non-current bonds, MTN	3,600	1,400	2,700	1,649
Commercial paper (framework of SEK 4 billion)	4,000	2,464	4,000	3,987
Backupfacility	3,000	-	4,000	-
Total bonds, commercial paper backup facilities	12,000	5,264	13,000	7,937
Total interest-bearing liabilities	34,827	27,291	32,245	23,881

108 GROUP ACCOUNTING PRINCIPLES AND NOTES

Note 30. Financial instruments and financing, cont.

LOAN AGREEMENT MATURITY STRUCTURE

SEK million	Dec 31, 2020 Dec 31, 2019 UTILIZED IN UTILIZED IN Banks Commercial paper/ Bonds Total interest- bearingliabilities Banks Commercial paper/ Bonds Total interest- bearingliabilities
0–3 months 3 months–1 year 1–2 years 2–3 years 3–4 years 4–5 years 5-6 years 6-7 years 7-8 years > 8years	5,556 1,767 7,323 524 3,289 3,813 11,465 2,097 13,562 13,186 2,999 16,185 - 1,400 1,400 1,051 1,400 2,451 1,575 - 1,575 - 249 249 709 - 709 674 - 674 1,323 - 1,323 509 - 509 400 - 400 - - - 400 - 400 - - - 400 - 400 - - - 200 - 200 - - -
	22,027 5,264 27,291 15,945 7,937 23,881

All financial instruments are shown in the table Classification of financial instruments on page 110. Trade payables are normally due within 30 days while other current liabilities are due within one year. Other non-current liabilities are due after five years.

Interest rate risk

Interest rate risk refers to how changes in interest rates will affect the Group’s net financial items and the value of financial instruments.

Wallenstam’s loan portfolio consists of loans with different terms from different lenders. A good balance between a long fixed interest term providing stability and a short fixed interest term that normally provides the lowest interest expense is important in achieving a stable interest expense trend.

The Group’s average fixed interest term should fall within the 24–60 month range.

Interest rate derivatives are used to spread risk and with the aim of protecting the underlying portfolio. Financial instruments, interest rate swaps are used to limit interest rate risks in the loan portfolio and in order to influence the fixed interest term in the loan portfolio in a flexible way. Borrowing usually takes place with short fixed interest terms, and interest rate swaps are used to achieve the desired fixed interest profile.

Thus derivative instruments are used for the purpose of reducing risk and should be linked to an underlying exposure. The Group currently has derivative instruments, which are recognized in the catego-

ry financial assets and liabilities measured at fair value through profit or loss. The corresponding interest paid is recognized as an interest expense including the effect of realized interest derivatives and the net change in the value of outstanding derivative liabilities for the year is recognized as change in value, derivative instruments.

The average interest rate on closing day, which takes into account the effects of swaps entered into in line with being realized through payment amounted to 1.21 percent (1.22). In relation to liabilities to credit institutions on closing day, interest expense for 2021 is estimated to be in the region of SEK 330 million (290), based on the average interest rate on closing day. The average effective interest rate for the financial year was 1.37 percent (1.27) and the loan-to-value ratio on closing day was 46 percent (45).

The average fixed interest term was 41 months (38). With the distribution of fixed interest terms existing at the beginning of 2021 and considering the effects of entered into interest rate swap agreements in addition to fixed interest agreements, a change in the interest rate of one percentage point at the beginning of the year would affect Wallenstam’s liquidity and interest expenses by about SEK 135 million (134) before tax, equivalent to about 11 percent (10) of Wallenstam’s cash flow from operating activities. The equivalent effect after tax was SEK 106 million (105).

FIXED INTEREST PERIOD FOR AVERAGE INTEREST

	Dec 31, 2020		Dec 31, 2019
	Amount, SEK million Average	interest, %	Amount, SEK million Average	interest, %
0–1 year	13,518	1.51	14,181	1.35
1–2 years	300	0.70	-	-
2–3 years	401	1.09	-	-
3–4 years	1,000	0.64	-	-
4–5 years	2,423	1.06	1,000	0.64
5–6 years	1,700	0.90	1,500	0.86
6–7 years	1,700	1.05	1,500	1.00
7–8 years	1,700	1.06	1,500	1.16
8–9 years	1,900	0.87	1,500	1.18
>9years	2,650	0.73	2,700	1.09
	27,291	1.21	23,881	1.22

GROUP ACCOUNTING PRINCIPLES AND NOTES 109

Note 30. Financial instruments and financing, cont.

Currency risk

Currency risk refers to the risk of an impact on the Group’s earnings and financial position as a result of changed exchange rates.

Wallenstam is exposed to currency risks both through exchange rate fluctuations in future payment flows (transaction exposure) and in respect of remeasurements of net assets in foreign subsidiaries (translation exposure).

Transaction exposure

The Group’s transaction-related currency exposure mainly arises during purchasing of building components. To minimize the financial impact of currency market fluctuations on its earnings, the Group uses futures contracts to hedge these flows. Upon purchase or sale of goods or services in foreign currency exceeding a value of SEK 10 million, 100 percent of the investment amount should be hedged in connection with the signing of contracts. Departures from the above hedging level and the time for currency hedging can be approved by the CEO. Hedge accounting is applied and therefore translation effects are recognized in other comprehensive income.

Translation exposure

Credit risk

Wallenstam’s credit risks can mainly be attributed to outstanding rent/trade receivables, promissory note receivables, cash and cash equivalents and financial derivatives.

The maximum credit risk corresponds to the carrying amount of total assets. The principles for making a credit loss provision are based on a simplified expected loss model according to IFRS 9 and consisted of a proportion of the outstanding promissory note receivables on closing day. As the majority of the promissory note receivables are secured, only a small proportion are exposed to credit loss risk.

Wallenstam’s credit risks in respect of rent receivables are described in Note 3.

Promissory note receivables amounted to SEK 241 million (269), of which SEK 57 million (57) mature within 1–5 years and SEK 184 million (214) after five years. There are pledged assets for promissory note receivables of SEK 206 million (234).

Derivatives amounted to SEK 10 million (8), of which SEK - million (2) mature within three months and SEK 10 million (6) after five years. Other financial instruments such as trade receivables and current receivables mainly mature within three months of closing day and amounted to SEK 65 million (76).

The Wallenstam Group has been subject to translation exposure from the consolidation of its Norwegian subsidiary, which reports its financial position in local currency. The reporting is translated into Swedish kronor, which gives rise to a translation difference, since assets and liabilities are translated at the closing day rate while items pertaining to profit or loss are translated at the average rate for the year.

CLASSIFICATION OF FINANCIAL INSTRUMENTS

SEK million	Financial assets measured at fair value through proft or loss Dec 31, 2020 Dec 31, 2019	Financial assets measured at amortized cost Dec 31, 2020 Dec 31, 2019	Financial assets measured at fair value through Other compre- hensive income Dec 31, 2020 Dec 31, 2019	Total Dec 31, 2020 Dec 31, 2019	Income statement
FINANCIAL ASSETS Promissory notes Participations Securities held as non- current assets and shares of property interests Non-current receivables Interest rate derivatives Electricity derivatives Currency derivatives Trade receivables Other current receivables Cash and cash equivalents	- - - - - 33 - - 10 6 - 2 - 0 - - - - - -	241 269 12 6 - - 106 106 - - - - - - 18 15 47 61 518 129	- - - - 119 119 - - - - - - - - - - - - - -	241 269 12 6 119 152 106 106 10 6 - 2 - 0 18 15 47 61 518 129	Interest income Expenses, development property sales Net fnancial items, Other compre- hensive income - Unreal. change in value, derivative instruments, Financial expenses Unreal. change in value, derivative instruments Other comprehensive income, Investment properties Revenue - -
Total fnancial assets	10 41	943 587	119 119	1,071 747

110 GROUP ACCOUNTING PRINCIPLES AND NOTES

Note 30. Financial instruments and financing, cont.

CLASSIFICATION OF FINANCIAL INSTRUMENTS, CONT.

Financial liabilities measured at fair through Proft or loss Financial liabilities measured at amortized cost SEK million Dec 31, 2020 Dec 31, 2019 Dec 31, 2020 Dec 31, 2019 FINANCIAL LIABILITIES Synthetic options scheme 95 58 14 13 Non-current liabilities - - 16 30 Interest rate derivatives 522 356 - - Currency derivatives 3 1 - - Interest-bearing liabilities - - 27,291 23,881 Trade payables - - 268 238 Accrued expenses - - 158 163 Other current liabilities - - 37 31 Total fnancial liabilities 620 415 27,785 24,355 Note 31.Lease liability	SEK million	Financial liabilities measured at fair through Proft or loss Dec 31, 2020 Dec 31, 2019	Financial liabilities measured at amortized cost Dec 31, 2020 Dec 31, 2019	Total Dec 31, 2020 Dec 31, 2019	Income statement
	FINANCIAL LIABILITIES Synthetic options scheme Non-current liabilities Interest rate derivatives Currency derivatives Interest-bearing liabilities Trade payables Accrued expenses Other current liabilities	95 58 - - 522 356 3 1 - - - - - - - -	14 13 16 30 - - - - 27,291 23,881 268 238 158 163 37 31	109 71 16 30 522 356	Unrealized change in value, synthetic options scheme - Unreal. change in value, derivative instruments, Financial expenses Other comprehensive income, Investment properties Financial expenses Operation and administration Operation and administration Operation and administration
				3 1 27,291 23,881 268 238 158 163 37 31
	Total fnancial liabilities	620 415	27,785 24,355	28,405 24,772
Accounting principle Wallenstam’s site leasehold and land lease agreements are recognized according to IFRS 16 Leases. Site leasehold rents are paid where Wallenstam’s buildings are on leased land. Site lease- hold agreements are treated as perpetual lease agreements, which means that the entire leasehold fees are recognized as a fnancial expense in the income statement. The weighted average interest on the transition to IFRS 16 Leases amounted to 3 percent on site leasehold agreements. In building leases, land rent is paid where Wallenstam’s wind tur- bines are constructed. This consists of two types, minimum rent and turnover-based rent. Turnover-based rents are not impacted by IFRS 16 Leases. The weighted average interest on the transition to IFRS 16 Leases amounted to 3.3 percent on land lease agreements. The right of use for site leasehold rights is recognized as a part of the balance sheet item, Investment properties and amounted to SEK 476 million (402) on closing day. The right of use for land leases is recognized as part of the balance sheet item, wind turbines and amounted to SEK 16 million (17). The diference between obligations for future lease fees and the opening lease liability as of January 1, 2020 related to depreciation of land leases. SEK 16 million (13) of the closing lease liability of SEK 493 million (421) falls due for payment within one year, SEK 64 million (52) within 2–5 years and SEK 413 million (356) after fve years. SEK million 2020 2019 LEASEHOLD RIGHTS Interest expense -13 -12 Total cash fow site leasehold rights -13 -12 Carrying amount right of use on closing day 476 402 Carrying amount lease liability on closing day 476 402 LAND LEASE Depreciation amount -1 -1 Interest expense -1 0 Cost of turnover-based rents (not included in the measurement of the lease liability) -2 -6 Total cash fow land leases -8 - Carrying amount right of use on closing day 16 17 Carrying amount lease liability on closing day 18 18

SEK 16 million (13) of the closing lease liability of SEK 493 million (421) falls due for payment within one year, SEK 64 million (52) within 2–5 years and SEK 413 million (356) after five years.

GROUP ACCOUNTING PRINCIPLES AND NOTES 111

Note 32. Accrued expenses and deferred income

SEK million	Dec 31, 2020	Dec 31, 2019
Accrued salary costs	35	34
Accrued interest expenses	37	33
Accrued operating expenses	44	41
Accrued administrative expenses	17	18
Prepaid rental income	266	250
Accrued expenses development properties, aftermarket	15	8
Accrued expenses development contributions	1	27
Accrued expenses connected to transactions	9	2
Carrying amount accrued expenses and deferred income	424	413

Note 33. Pledged assets

Accounting principle

Security is pledged for the Group’s obligations, mainly in the form of mortgage deeds for properties. No collateral is provided for bonds, the EIB loan or commercial paper programs. For commercial paper, Wallenstam has undertaken, at each given time, to have access to liquidity facilities that in terms of maturity and total nominal amount are

at least equivalent to outstanding commercial paper. Also see Note 30.

Of the Group’s property mortgages of SEK 27,486 million (22,777), SEK 5,924 million (4,873) is unmortgaged.

PLEDGED ASSETS

SEK million	Dec 31, 2020	Dec 31, 2019
Property mortgages in respect of property-linked loans	20,680	16,924
Property mortgages in respect of overdraft facilities	800	800
Property mortgages relating to bank guarantees	-	180
Property mortgages relating to future projects	82	-
Pension commitments	55	54
Blocked bank balances	-	1
Carrying amount pledged assets	21,617	17,959

Note 34. Contingent liabilities

Accounting principle

A contingent liability refers to a possible commitment arising from past events and whose existence is only confirmed when one or more uncertain future events occur or when there is a commitment that is not recognized as a liability or provision because it is unlikely that an outflow of resources will be required.

There is a responsibility in relation to the Swedish Tax Agency for the reversal of VAT on investments in commercial premises relating to tenants liable for VAT when the premises are leased to a tenant not liable for VAT. It is not possible to determine the amount.

CONTINGENT LIABILITIES

SEK million	Dec	31, 2020	Dec	31, 2019
Guarantee Fastigo		3		3
Investments in wind turbines		30		31
Guarantee commitments		-		10
Parent company guarantees to municipalities		28		22
Parent company guarantees to CountyAdministrative Board		5		4
Carrying amount contingent liabilities		66		70

112 GROUP ACCOUNTING PRINCIPLES AND NOTES

Note 35. Statement of cash flows

Accounting principle

The statement of cash flows shows changes in cash and cash equivalents and the Group’s available liquid assets for the period. The statement of cash flows is prepared according to the indirect method, which involves adjustment of operating income for transactions that do not entail incoming or outgoing payments during the period, broken down into the different operating segments:

• » operating activities: revenue and expenses included in operating income, interest received and paid, taxes paid and change in working capital

• » investing activities: purchases of non-current assets and other types of investments

• » financing activities: raised and amortized loans, dividends, repurchase of shares and any new share issues.

In the Group, there are no items affecting cash flow in financing activities to specify in accordance with IAS 7 Statement of Cash Flows apart from leases of SEK 13 million (13).

ADJUSTMENT ITEMS, NOT AFFECTING CASH FLOW

SEK million	2020	2019
Capital gains, properties	-193	-108
Realized proft from sales of other assets	-25	-3
Participation in profts/losses of associated companies	1	5
Depreciation/retirements	87	85
Provisions	0	-5
Other adjustments	-4	36
Total adjustment items, not afecting cash fow	-134	10

Note 36. Company acquisitions and sales

During the year, Wallenstam acquired a small number of properties converted into companies. All transactions for the year were assessed as being asset acquisitions. One property was divested this year

in a similar manner. Disclosures regarding asset acquisitions and property sales are provided in Note 15 and in Note 21.

Note 37. Post-balance sheet events

No events of material importance for the Group’s position have occurred after the end of the reporting period.

GROUP ACCOUNTING PRINCIPLES AND NOTES 113

Parent company income statement

SEK million	Note	2020	2019
Management revenue	2	290	273
Rental income		122	124
Revenue sales renewable energy certifcates		45	57
Other income		1	2
Total revenue		458	456
Management costs and administrative expenses	4, 6, 11, 12	-367	-359
Operating expenses	7	-36	-36
Depreciation, properties	12	-31	-30
Expenses sales renewable energy certifcates		-21	-52
Change in value, synthetic options scheme	4	-36	-40
Other expenses		-2	-2
Total expenses		-493	-519
Operating income		-35	-63
Proft from participations in Group companies	8, 13	473	33
Interest income and similar proft/loss items	9	533	455
Interest expenses and similar proft/loss items	9	-308	-223
Changes in value, derivative instruments	15	-164	-323
Net fnancial items		534	-59
Proft/loss after fnancial items		500	-122
Appropriations
Group contributions received		-	373
Groupcontributionspaid		-63	-
Proft before tax		437	251
Tax on netproft/loss for theyear	10	34	-17
Net proft for the year		471	234
OTHER COMPREHENSIVE INCOME
Change in value, currency derivatives		-2	-1
Tax attributable to other comprehensive income		0	0
Comprehensive income		470	233

114 PARENT COMPANY ACCOUNTS

Parent company balance sheet

Parent company balance	sheet
SEK million	Note	Dec 31, 2020	Dec 31, 2019
ASSETS
NON-CURRENT ASSETS
Intangible non-current assets
Capitalized expenses, computer software	11	19	18
Total intangible non-current assets		19	18
Property, plant and equipment	12
Investment properties		1,319	1,340
Equipment		18	13
Total property, plant and equipment		1,337	1,353
Financial assets
Participations in subsidiaries	13	5,932	5,879
Receivables from Group companies	13, 23	23,632	21,894
Deferred tax assets	14	149	114
Financial derivative instruments	15, 23	10	6
Other shares of property interests	23	7	7
Other non-current receivables	23	7	10
Total fnancial assets		29,736	27,909
TOTAL NON-CURRENT ASSETS		31,092	29,280
CURRENT ASSETS
Intangible assets	16	3	17
Financial derivative instruments	15, 23	-	2
Trade receivables	23	4	5
Other receivables	23	13	2
Current tax receivables		4	4
Prepaid expenses and accrued income	17, 23	16	16
Cash and cash equivalents	18, 23	518	122
Total current assets		557	169
TOTAL ASSETS		31,649	29,449
EQUITY AND LIABILITIES
EQUITY	19
Restricted equity
Share capital		165	165
Statutory reserve		122	122
Total restricted equity		287	287
Non-restricted equity	20
Retained earnings		10,020	9,949
Net proftforthe year		471	234
Total non-restricted equity		10,491	10,183
TOTAL EQUITY		10,778	10,470
UNTAXED RESERVES
Additional depreciation		5	5
PROVISIONS
Other provisions	21	122	84
NON-CURRENT LIABILITIES
Interest-bearing liabilities	22, 23	3,900	1,689
Liabilities to Group companies	23	6,272	4,994
Financial derivative instruments	15, 23	522	356
Other liabilities	23	-	1
Total non-current liabilities		10,693	7,039
CURRENT LIABILITIES
Interest-bearing liabilities	22, 23	9,927	11,732
Financial derivative instruments	15, 23	3	2
Trade payables	23	9	7
Other liabilities	23	17	27
Accrued expenses and deferredincome	23,24	96	84
Total current liabilities		10,051	11,851
TOTAL EQUITY AND LIABILITIES		31,649	29,449

PARENT COMPANY ACCOUNTS 115

Parent Company statement of changes in equity

	Note	Share	Statutory	Other	Non-restricted	Total
SEK million	19	capital	reserve	reserves	equity	equity
OPENING BALANCE, JAN 1, 2019		165	122	-	10,563	10,850
Net proft for the year		-	-	-	234	234
OTHER COMPREHENSIVE INCOME
Items that may be reclassifed to net proft for the year
Change in value, currency derivatives		-	-	-1	-	-1
Tax attributable to other comprehensive income		-	-	0	-	0
TRANSACTIONS WITH THE COMPANY’S OWNERS
Dividend		-	-	-	-614	-614
CLOSING BALANCE, DEC 31, 2019		165	122	-1	10,183	10,470
OPENING BALANCE, JAN 1, 2020		165	122	-1	10,183	10,470
Net proft for the year		-	-	-	471	471
OTHER COMPREHENSIVE INCOME
Items that may be reclassifed to net proft for the year
Change in value, currency derivatives		-	-	-2	-	-2
Tax attributable to other comprehensive income		-	-	0	-	0
TRANSACTIONS WITH THE COMPANY’S OWNERS
Dividend		-	-	-	-162	-162
CLOSING BALANCE, DEC 31, 2020		165	122	-2	10,494	10,778

116 PARENT COMPANY ACCOUNTS

Parent company statement of cash flows

SEK million	Note	2020	2019
CASH FLOW FROM OPERATING ACTIVITIES
Operating income		-35	-63
Adjustment for items not included or arising in the cash fow	27	55	77
Interest received and interest subsidies received		534	456
Interestpayments		-306	-217
Cash fow before change in working capital		248	254
CHANGE IN WORKING CAPITAL
Current receivables		-6	0
Current liabilities		4	12
Change in working capital		-2	12
CASH FLOW FROM OPERATING ACTIVITIES		246	266
CASH FLOW FROM INVESTING ACTIVITIES
Sales of participations		-	7
Dividends from subsidiaries		266	47
Shareholders’ contribution paid		-52	-752
Sale of properties, equipment and intangible assets		45	27
Investments inproperties, equipment and intangible assets		-34	-22
CASH FLOW FROM INVESTING ACTIVITIES		224	-692
CASH FLOW FROM FINANCING ACTIVITIES
Group contributions		-63	373
Dividend paid		-162	-614
Amortization of overdraft facilities		-	-119
Advance payment futures contracts		-	-8
Raised interest-bearing liabilities		17,717	9,395
Amortization of interest-bearing liabilities		-17,312	-5,657
Change in liabilities to Group companies		1,278	-1,159
Change in receivables from Groupcompanies		-1,533	-1,739
CASH FLOW FROM FINANCING ACTIVITIES		-74	472
CHANGE IN CASH AND CASH EQUIVALENTS
Cash and cash equivalents at the beginning of the year		122	77
Cash fow for the year		396	46
Cash and cash equivalents at the end of the year		518	122
Unutilized overdraft facility at year-end		800	800
Blocked bank balances		-	-1
Available liquid assets	18	1,318	921

PARENT COMPANY ACCOUNTS 117

Parent company accounting principles and notes

Note 1. Accounting principles for the parent company

The parent company has prepared its annual accounts in accordance with the Swedish Annual Accounts Act (1995:1554) and the Swedish Financial Reporting Board’s recommendation RFR 2, Accounting for Legal Entities.

been applied consistently for all periods presented in the parent company’s financial statements.

Changes in Swedish regulations

SWEDISH FINANCIAL REPORTING BOARD

Differences between the accounting principles of the parent company and the Group

RFR 2 states that a legal entity must apply the same IFRS/IAS as are applied in the consolidated financial statements as far as this is possible within the framework of the Swedish Annual Accounts Act, the Swedish Pension Obligations Vesting Act and taking into account the relationship between accounting and taxation. The recommendation states the exceptions from and additions to IFRS that should be made.

In those cases where the accounting principles differ between the Group and the parent company, the parent company’s accounting principle is described in direct connection to each Note. Otherwise, the accounting principles of the Group and the parent company correspond. The accounting principles for the parent company have

The changes in RFR 2 Accounting for Legal Entities, which became effective for the financial year 2020 have not had any material impact on the parent company’s accounting.

The Swedish Financial Reporting Board has not decided on or proposed any material changes, which have not yet become effective.

Classification and presentation

The parent company’s income statement and balance sheet are prepared according to the Swedish Annual Accounts Act’s layout. Differences compared to IAS 1 Presentation of Financial Statements applied in preparing the consolidated financial statements are primarily in the recognition of financial income and expenses, non-current assets (mainly Investment properties) and equity.

Note 2. Intra-group revenue

Accounting principle

The parent company’s net sales consist of administrative and project management services for subsidiaries. This income is recognized in the period it relates to. In the case of subsidiaries that are limited partnerships in which the parent company is a partner, the parent company receives compensation for management services in the form of dividends.

Of the total income, SEK 292 million (280) was income from Group companies.

Note 3. Average number of employees

2020 Average number of employees of whom: women men	2019 Average number of employees of whom: women men
250 145 105	250 149 101

BOARD MEMBERS AND SENIOR EXECUTIVES ON CLOSING DAY

Dec 31, 2020 Number of whom: women men	Dec 31, 2019 Number of whom: women men
Board members 5 2 3 CEO, Vice CEOs and senior executives 6 3 3	4 3 1 6 3 3

118 PARENT COMPANY ACCOUNTING PRINCIPLES AND NOTES

Note 4. Salaries, other remuneration and social security expenses

SEK million	2020 Basic salary Benefts Variable remuneration Social security expenses Pension expenses	2019 Basic salary Benefts Variable remuneration Social security expenses Pension expenses
Chairman of the Board Board members	0.6 - 1.1 0.5 - 0.7 - - 0.1 -	0.9 - - 0.1 - 0.8 - - 0.2 -
Total directors’ fees CEO, parent company Vice CEOs, 2 persons (1.25) Former Vice CEOs, 2 persons (2) Other senior executives 3 persons (3.75)	1.3 - 1.1 0.7 - 1.4 0.1 - 0.5 1.5 5.6 0.1 - 2.7 1.8 - - - 0.0 - 4.6 0.1 - 1.8 1.4	1.7 - - 0.3 - 4.4 0.1 - 3.6 1.5 3.9 0.1 - 1.8 1.2 - - - 0.3 - 6.1 0.2 - 2.2 2.0
Other employees	132.6 3.1 - 46.6 20.2	125.2 3.1 - 45.4 19.7
Total	144.2 3.5 - 51.6 25.0	139.6 3.5 - 53.3 24.4

For other information about personnel-related expenses, see the Group’s Note 5.

Note 5. Related party transactions

For information about related-party transactions, see the Group’s Note 7.

Note 6. Remuneration to auditing firms

SEK million	2020	2019
Audit assignment	1.6	1.1
Other auditingwork	0.1	0.1
Total	1.7	1.2

Wallenstam has engaged KPMG (previous year Deloitte) for the audit and the Group’s expenses for auditing of property-related companies are handled by the parent company and subsequently allocated to the subsidiaries.

Note 7. Operating expenses

SEK million	2020	2019
Heating costs	1	2
Maintenance costs	13	15
Property tax	8	9
Other operatingexpenses	13	10
Total operating expenses	36	36

There are operating expenses of about SEK 1 million (0), in properties that do not generate income as they were vacated for projects.

PARENT COMPANY ACCOUNTING PRINCIPLES AND NOTES 119

Note 8. Profit from participations in Group companies

Accounting principle

Participations in the net profit for the year in limited partnerships are recognized in profit or loss under the heading Profit from participations in Group companies.

Profit from participations in Group companies refers to profit participations in subsidiaries of SEK 41 million (47). Profit/loss from sales of participations in subsidiaries amounted to SEK 2 million (-237). No impairment losses in respect of participations in subsidiaries were recognized during the year (-3). Dividends from subsidiaries were also paid of SEK 430 million (225).

Note 9. Interest income/expenses and similar profit/loss items

Interest income and similar items amounted to SEK 533 million (455), while interest expenses and similar profit/loss items amounted to SEK 308 million (223). All financial income is interest income from receiv-

ables from Group companies. Of financial expenses, SEK 66 million (22) was interest expenses from liabilities to Group companies.

Note 10. Tax

TAX RECOGNIZED IN THE INCOME STATEMENT

SEK million	2020	2019
Current tax	-	-
Deferred tax	34	-17
Total tax	34	-17

DIFFERENCE BETWEEN THE PARENT COMPANY’S RECOGNIZED TAX AND TAX BASED ON THE APPLICABLE TAX RATE OF 21.4 PERCENT (21.4)

SEK million	2020	2019
Recognized proft before tax	437	251
Tax according to current tax rate	-94	-54
Tax efect of:
Non-deductible expenses, non-taxable income	-12	-62
Net interest income/expense received	49	50
Adjustment of tax, previous years	0	0
Dividend	92	48
Pensions commitments secured via endowment insurance	0	0
Remeasurement deferred tax	-1	1
Tax on proft for the year in the income statement	34	-17

120 PARENT COMPANY ACCOUNTING PRINCIPLES AND NOTES

Note 10. Tax, cont.

DISTRIBUTION OF CURRENT AND DEFERRED TAX

SEK million	2020 Basis current tax Basis deferred tax	2019 Basis current tax Basis deferred tax
Proft before tax Tax-deductible depreciation Reversal of depreciation for reduced value due to sold properties Non-deductible expenses Net interest income/expense received Non-taxable change in value of derivatives Dividend Pensions commitments secured via endowment insurance Adjustment of tax,previousyears	437 -6 6 - - 65 -11 -228 - 164 -164 -430 - -1 1 0 -	251 -5 5 -3 3 303 -13 -232 - 321 -321 -225 - 1 -1 - 1
Current proft/loss for tax purposes Utilization of loss carryforwards duringtheyear	0 -167 - -	411 -325 -411 411
Taxable proft Tax on net proft for the year Remeasurement deferred tax	- -167 - 36 - -1	- 86 - -18 - 1
Total tax	- 34	- -17

Note 11. Capitalized expenses, computer software

SEK million	Dec 31, 2020	Dec 31, 2019
Opening acquisition cost	62	56
Investments during the year	7	7
Retirements duringtheyear	-10	-
Closing accumulated acquisition cost	59	62
Opening amortization	-44	-38
Amortization for the year	-6	-6
Retirements duringtheyear	10	-
Closing accumulated amortization	-41	-44
Carrying amount capitalized expenses, computer software	19	18

Note 12. Property, plant and equipment

Accounting principle

The parent company’s investment properties are measured at cost less accumulated depreciation according to plan over their useful life and with necessary impairment charges. Depreciation according to plan is applied over 50 years, equivalent to properties at 2 percent.

Cost consists of the acquisition price, land registration costs and improvements that increase value. Interest arising during the production period of larger new constructions, extensions or reconstructions is not capitalized. Only expenses that generate lasting

increases in the value of properties are capitalized. Reconstruction expenses of a maintenance nature are charged to earnings.

The carrying amount of investment properties and equipment is tested for impairment when events or changed circumstances indicate that the carrying amount may not be recoverable. If such indications exist and if the carrying amount exceeds the expected recoverable amount, the assets are written down to the recoverable amount, in accordance with IAS 36.

PARENT COMPANY ACCOUNTING PRINCIPLES AND NOTES 121

Note 12. Property, plant and equipment, cont.

INVESTMENT PROPERTIES

SEK million	Dec 31, 2020	Dec 31, 2019
Opening acquisition cost	1,530	1,521
Investments duringtheyear	10	9
Closing accumulated acquisition cost	1,540	1,530
Opening depreciation	-190	-160
Depreciation for theyear	-31	-30
Closing accumulated depreciation	-221	-190
Carrying amount, investment properties	1,319	1,340

Land is included with a value of SEK 241 million (238). The fair value of investment properties amounts to SEK 3,119 million (3,117).

EQUIPMENT

SEK million	Dec 31, 2020	Dec 31, 2019
Opening acquisition cost	54	52
Investments during the year	9	6
Sales/retirements duringtheyear	-2	-4
Closing accumulated acquisition cost	62	54
Opening depreciation	-41	-41
Depreciation for the year	-4	-3
Sales/retirements duringtheyear	2	4
Closing accumulated depreciation	-43	-41
Carrying amount equipment	18	13

Note 13. Financial assets

Accounting principle

Participations in subsidiaries are recognized in the parent company at cost. For participations in limited partnerships, the carrying amount is adjusted annually by the reporting company’s participation in the subsidiary’s net profit and the year’s deposits and withdrawals.

In cases where the carrying amount of the participations exceeds the subsidiaries’ fair value, an impairment loss is charged to the income statement. Where the grounds for a previous impairment loss no longer exist, the impairment loss is reversed.

Value transfers between subsidiaries may arise in connection with intra-group restructuring, whereupon it may be necessary in

the parent company to make an adjustment of the carrying amount of shares in subsidiaries. Adjustment occurs by reallocation in parent companies between the carrying amounts of participations in the subsidiaries concerned.

Credit risk

The risk of loss in respect of Group receivables does not give rise to any provision, as all receivables are guaranteed with pledged assets.

RECEIVABLES FROM GROUP COMPANIES

Receivables from Group companies are non-current and are expected to continue in order to manage liquidity flows in subsidiaries. The parent company has taken out interest swaps on behalf of Group

companies. The weighted average interest rates on receivables from subsidiaries amounted to 2.0 percent (2.0).

122 PARENT COMPANY ACCOUNTING PRINCIPLES AND NOTES

Note 13. Financial assets, cont.

PARTICIPATIONS IN SUBSIDIARIES

The number of shares and the carrying amounts are specified for directly-owned companies. Other companies that are part of the Group are owned indirectly and shown in each subsidiary’s annual report.

	Corporate identity number	Registered ofce	Participation, %	Number of participations	Carrying amount, SEK million
Wallenstam Stacken AB	556720-9910	Gothenburg	100	1,000,000	2,915
Wallenstam Investment AB	556089-7000	Gothenburg	100	2,000	1
Wallenstam Fastigheter 11 AB	556763-8522	Gothenburg	100	1,000	0
KB Gårda-Stampen	969646-4065	Gothenburg	100	1	116
KB Göteborg Lorensberg 53:5	969659-8755	Gothenburg	100	1	45
KB Höghallsvägen 1-5	916849-7379	Gothenburg	100	1	9
KB Killingen 8 och 9	916447-4851	Gothenburg	100	1	37
KB Länsmansvägen 2	916849-7387	Gothenburg	100	1	30
KB Myran nr 121	916444-2452	Gothenburg	100	1	68
KB Myran nr 122	916444-2460	Gothenburg	100	1	177
KB Myran nr 13	916442-2520	Gothenburg	100	1	304
KB Myran nr 136	916563-7035	Gothenburg	100	1	45
KB Myran nr 178	916614-5475	Gothenburg	100	1	47
KB Myran nr 179	916614-5483	Gothenburg	100	1	35
KB Myran nr 261	916644-2591	Gothenburg	100	1	70
KB Myran nr 264	916644-2518	Gothenburg	100	1	51
KB Myran nr 269	916644-2567	Gothenburg	100	1	-
KB Myran nr 280	916775-5942	Gothenburg	100	1	40
KB Myran nr 286	916775-5876	Gothenburg	100	1	25
KB Myran nr 294	916775-5793	Gothenburg	100	1	27
KB Myran nr 297	969605-7430	Gothenburg	100	1	45
KB Myran nr 298	969605-7455	Gothenburg	100	1	148
KB Myran nr 299	969605-7463	Gothenburg	100	1	102
KB Myran nr 300	969605-7471	Gothenburg	100	1	5
KB Myran nr 301	969605-7489	Gothenburg	100	1	60
KB Myran nr 302	969605-7497	Gothenburg	100	1	216
KB Myran nr 314	969605-7570	Gothenburg	100	1	88
KB Myran nr 318	916613-4750	Gothenburg	100	1	34
KB Myran nr 325	916852-6961	Gothenburg	100	1	14
KB Myran nr 345	969614-9476	Gothenburg	100	1	607
KB Myran nr 349	969614-9443	Gothenburg	100	1	282
KB Myran nr 367	969677-9181	Gothenburg	100	1	11
KB Myran nr 409	969637-6400	Gothenburg	100	1	77
KB Myran nr 60	916443-3410	Gothenburg	100	1	-
KB Stärteredsvägen 24	916849-7361	Gothenburg	100	1	33
KB Uttern	916444-4391	Gothenburg	100	1	28
KB Wallenstam Avenyn 1	969637-6681	Gothenburg	100	1	80
Wallenstam Förvaltning AB	556692-0251	Gothenburg	100	1	0
Xuleh New York 1 KB	969690-0761	Gothenburg	100	1	61
KB Myran nr 193	916446-7905	Gothenburg	100	1	-
KB Myran nr 347	969614-6381	Gothenburg	100	1	-
					5,932

PARENT COMPANY ACCOUNTING PRINCIPLES AND NOTES 123

Note 13. Financial assets, cont.

PARTICIPATIONS IN SUBSIDIARIES, CHANGE DURING THE YEAR

SEK million	Dec 31, 2020	Dec 31, 2019
Opening acquisition cost	7,041	7,398
Sales during the year	-	-1,109
Shareholders’ contributionpaid	52	752
Closing accumulated acquisition cost	7,093	7,041
Opening impairment losses	-1,162	-2,029
Sales during the year	-	870
Impairment losses for theyear	-	-3
Closing accumulated impairment losses	-1,162	-1,162
Carrying amount participations in subsidiaries	5,932	5,879

Note 14. Deferred tax

SEK million	Dec 31, 2020	Dec 31, 2019
DEFERRED TAX LIABILITY
Diferences booked/tax depreciation	-58	-57
DEFERRED TAX ASSETS
Loss carryforwards	86	86
Pensions commitments secured via endowment insurance	10	10
Temporary diferences, interest rate derivatives	106	72
Other	5	3
Net deferred tax assets	149	114

All tax losses run for unlimited periods. Remeasurement has occurred at a tax rate that receivables and liabilities are expected to be realized at, equivalent to 20.6 percent.

Note 15. Financial derivative instruments

SEK million	Dec 31, 2020 Assets Liabilities	Dec 31, 2019 Assets Liabilities
NON-CURRENT DERIVATIVE INSTRUMENTS Interest rate swap contracts Currencyderivatives	10 -522 - 0	6 -354 0 -1
Carrying amount non-current derivative instruments CURRENT DERIVATIVE INSTRUMENTS Interest rate swap contracts Electricity derivatives Currencyderivatives	10 -522 - - - - - -3	6 -356 - -2 2 - - -
Carrying amount current derivative instruments Total derivative instruments	- -3 10 -525	2 -2 8 -357

124 PARENT COMPANY ACCOUNTING PRINCIPLES AND NOTES

Note 15. Financial derivative instruments, cont.

MATURITY STRUCTURE, FINANCIAL DERIVATIVE INSTRUMENTS

SEK million	Dec 31, 2020	Dec 31, 2019
0–3 months	0	2
3 months–1 year	-	-2
1–5 years	-77	-13
>5years	-437	-336
Total	-515	-349

Note 16. Intangible assets

Accounting principle Intangible assets consist of renewable energy certificates, which according to IAS 38, are initially recognized at cost. The remeasurement method is not permitted under RFR 2 and therefore

certificates during the holding period are recognized at the lowest of cost and their fair value.

SEK million	Dec	31, 2020	Dec	31, 2019
Carrying amount, Jan 1		17		39
Acquisitions during the year		8		29
Sales duringtheyear		-21		-51
Carrying amount renewable energy certifcates in inventory		3		17

Note 17. Prepaid expenses and accrued income

SEK million	Dec 31, 2020	Dec 31, 2019
Prepaid administrative expenses	7	8
Prepaid fnancing expenditure	6	8
Other prepaid expenses	-	1
Other accrued income	2	-
Total prepaid expenses and accrued income	16	16

Note 18. Cash and cash equivalents

SEK million	Dec 31, 2020	Dec	31, 2019
Available liquid assets	1,318		921
Blocked bank balances	-		1
Of which approved amount, overdraft facilities	-800		-800
Of which, utilized amount, overdraft facilities	-		-
Available amount, overdraft facilities.	-800		-800
Cash and cash equivalents	518		122

Cash and cash equivalents consist of cash balances deposited in accounts with major Swedish banks.

PARENT COMPANY ACCOUNTING PRINCIPLES AND NOTES 125

Note 19. Equity

Accounting principle

Wallenstam AB recognizes group contributions paid and received as appropriations in the income statement.

Shareholders’ contributions are recognized by the parent company (donor) as an increase in the book value of shares and by the subsidiary (recipient) as an increase in non-restricted equity. The value of shareholder contributions capitalized by the parent company is tested as described under Participations in subsidiaries, changes during the year.

Dividends received from subsidiaries are recognized as revenue provided that they derive from income earned after the acquisition. Dividends which exceed this earned profit are treated as a repayment of the investment and reduce the carrying amount of the participation.

A specification of change in equity is provided in the Parent company statement of changes in equity, immediately after the balance sheet.

The share capital in Wallenstam AB consists of 34,500,000 A shares, which carry ten votes each, and 295,500,000 B shares, which carry one vote each. The total number of shares amounted to 330,000,000 and the registered share capital is SEK 165,000,000, corresponding to a quota value of SEK 0.50 (0.50) per share.

On closing day, the number of repurchased B shares amounted to 7,000,000 (7,000,000), representing 2 percent of the share capital. No shares (-) were repurchased during 2020. The average expense for all treasury shares amounts to SEK 76.27 (76.27) per share.

The proposed dividend for the 2020 financial year is SEK 1.20 per share (0.50).

Note 20. Appropriation of profits

SEK	2020	2019
The following earnings are at the disposal of the Annual General
Meeting:
Retained earnings	10,019,998,722	9,948,672,795
Netproft for theyear	471,460,856	234,212,113
Total	10,491,459,578	10,182,884,907
Shareholder dividend SEK 1.20 (0.50) per share	387,600,000	161,500,000
To be carried forward	10,103,859,578	10,021,384,907
Total	10,491,459,578	10,182,884,907

In the company, there are a total of 330,000,000 shares, of which 7,000,000 are non-dividend-paying repurchased own shares up to February 9, 2021. The total of the above proposed dividend of SEK

1.20 may change if the number of repurchased own shares changes before each record day for dividend.

Note 21. Other provisions

SEK million	Dec 31, 2020	Dec 31, 2019
Opening capital value, provision for pension commitments	-53	-42
Provision for the year future obligations	-2	-2
Change in value for the year	-2	-9
Netpayments duringtheyear	3	1
Closing debt capital value, provision for pension commitments	-55	-53
Closingasset capital value ofpension commitments	55	53
Net value of pension commitments	0	0
SEK million	Dec 31, 2020	Dec 31, 2019
Opening balance other provisions	84	15
Change in value provision options scheme liability	37	40
Change in value special payroll tax relating to endowment insurance	0	3
Reclassifcation	-	28
Other	-	-1
Closing balance other provisions	122	84

126 PARENT COMPANY ACCOUNTING PRINCIPLES AND NOTES

Note 22. Interest-bearing liabilities

SEK million	Dec 31, 2020	Dec 31, 2019
NON-CURRENT LOANS
Liabilities to credit institutions	3,900	1,689
Carrying amount, non-current liabilities to credit institutions	3,900	1,689
CURRENT LOANS
Overdraft facilities	-	-
Liabilities to credit institutions	9,927	11,732
Carrying amount, current liabilities to credit institutions	9,927	11,732
Total liabilities to credit institutions	13,827	13,421

LOAN AGREEMENT MATURITY STRUCTURE

SEK million	Dec 31, 2020	Dec 31, 2019
0–3 months	5,128	3,518
3 months–1 year	4,799	8,214
1–2 years	1,400	1,439
2–3 years	500	250
3–4years	2,000	-
Total	13,827	13,421

FIXED INTEREST TERM FOR AVERAGE INTEREST

	Dec 31, 2020	Dec 31, 2020	Dec 31,	2019
	Amount,	Average	Amount,	Average
	SEK million	interest, %	SEK million	interest, %
0–1 year	1,377	7.83	3,721	2.61
1–2 years	300	0.70	-	-
2–3 years	-	-	-	-
3–4 years	1,000	0.64	-	-
4–5 years	1,500	0.86	1,000	0.64
5–6 years	1,700	0.90	1,500	0.86
6–7 years	1,700	1.05	1,500	1.00
7–8 years	1,700	1.06	1,500	1.16
8–9 years	1,900	0.87	1,500	1.18
>9years	2,650	0.73	2,700	1.09
Total	13,827	1.57	13,421	1.46

All of the Group’s interest rate derivatives are raised through banks by the parent company. The volume of the parent company’s interest rate derivatives exceeds the volume of loans held by the parent company. The variable component of the interest rate swaps where STIBOR 3M is obtained together with the loan volume where we pay STIBOR 3M, ends up in the 0-1 year range. The fixed component of the interest rate derivatives is recognized in the range when it is the

final maturity of the derivatives. Interest derivatives raised by the parent company on behalf of subsidiaries are attributed to the subsidiaries concerned and therefore form part of the inter-company transactions. The reason for this is that interest derivatives are not attributable to the parent company but to the financing of each respective subsidiary. The unutilized overdraft facility amounts to SEK 800 million (800).

LIABILITIES TO GROUP COMPANIES

Liabilities to Group companies are expected to run until further notice in order to handle liquidity flows in subsidiaries.

PARENT COMPANY ACCOUNTING PRINCIPLES AND NOTES 127

Note 23. Financial instruments

Accounting principle

According to RFR 2, parent companies that are covered by the consolidated financial statements should recognize certain financial instruments at fair value. Since Wallenstam does not apply hedge accounting in respect of interest rate or electricity derivatives, all changes in value are recognized directly among financial income and expenses in the income statement. The parent company administers

borrowing including hedging of interest rates through interest rate derivative agreements and electricity derivatives for hedges of the electricity price for the Group’s companies as an administrative service. All the financial circumstances described for the Group, see the Group’s Note 30, also apply to the parent company.

FINANCIAL INSTRUMENTS

SEK million	Financial assets measured at fair value through poft or loss Dec 31, 2020 Dec 31, 2019	Financial assets measured at amortized cost Dec 31, 2020 Dec 31, 2019	Financial assets measured at fair value through Other compre- hensive income Dec 31, 2020 Dec 31, 2019	Total Dec 31, 2020 Dec 31, 2019	Income statement
FINANCIAL ASSETS Receivables from Group companies Other shares of property interests Interest rate derivatives Electricity derivatives Trade receivables Other current receivables Cash and cash equivalents	- - - - 10 6 - 2 - - - - - -	23,632 21,894 - - - - - - 4 5 21 2 518 122	- - 7 7 - - - - - - - - - -	23,632 21,894 7 7 10 6 - 2	Interest income Net fnancial items, Other comprehensive income Change in value derivatives, Interest expenses Change in value derivatives Revenue - -
				4 5 21 2 518 122
Total fnancial assets	10 8	24,175 22,023	7 7	24,192 22,038
SEK million	Financial liabilities measured at fair value through poft or loss Dec 31, 2020 Dec 31, 2019	Financial liabilities measured at amortized cost Dec 31, 2020 Dec 31, 2019		Total Dec 31, 2020 Dec 31, 2019	Income statement
FINANCIAL LIABILITIES Synthetic options scheme Liabilities to Group companies Interest rate derivatives Currency derivatives Interest-bearing liabilities Trade payables Accrued expenses Other current liabilities	95 58 - - 522 356 3 1 - - - - - - - -	14 13 6,272 4,994 - - - - 13,827 13,421 9 7 78 70 2 7		109 71 6,272 4,994 522 356 3 1 13,827 13,421 9 7 78 70 2 7	Change in value, synthetic options scheme Interest expenses Change in value derivatives, Interest expenses Other comprehensive income, Investment properties Interest expenses Operation and administration Operation and administration Operation and administration
Total fnancial liabilities	620 415	20,202 18,513		20,822 18,928

128 PARENT COMPANY ACCOUNTING PRINCIPLES AND NOTES

Note 24. Accrued expenses and deferred income

SEK million	Dec 31, 2020	Dec 31, 2019
Accrued salary costs	35	34
Accrued interest expenses	25	25
Accrued operating expenses	1	1
Prepaid rental income	19	14
Accrued administrative expenses	14	6
Other accrued expenses	3	5
Carrying amount accrued expenses and deferred income	96	84

Note 25. Pledged assets

SEK million	Dec 31, 2020	Dec 31, 2019
Property mortgages	1,645	1,332
Internal promissory notes and property mortgages	3,144	3,069
Pledged endowment insurance	55	53
Carrying amount pledged assets	4,845	4,455

Note 26. Contingent liabilities

Accounting principle

The parent company’s financial guarantee contracts mainly consist of loan guarantees in favor of subsidiaries. Financial guarantees mean the company has a commitment to compensate the holder of a liability instrument for losses that the holder suffers as a result of a named debtor’s failure to meet its obligations and/or payments according to the terms of agreement. Contingent liabilities in favor of subsidiaries are financial guarantee agreements and are recognized in accordance with RFR 2, Accounting for Legal Entities, i.e. they are not recognized as provisions but are instead disclosed.

Surety commitments for Group companies amounted to SEK 13,464 million (10,461) and for other companies to SEK 49 million (54). Other contingent liabilities refer to responsibility as a general partner for the external liabilities of limited partnership companies, amounting to SEK 51 million (47), and for Fastigo, amounting to SEK 3 million (3).

Note 27. Statement of cash flows

SEK million	2020	2019
ADJUSTMENT ITEMS, NOT AFFECTING CASH FLOW
Realized proft assets	-24	-5
Changes in value attributable to synthetic options scheme	37	40
Accrued unpaid management costs and administrative expenses	-	3
Depreciation	42	40
Total adjustment items, not afecting cash fow	55	77

Note 28. Post-balance sheet events

No events of material importance for Wallenstam’s position have occurred after the end of the reporting period.

PARENT COMPANY ACCOUNTING PRINCIPLES AND NOTES 129

The income statements and balance sheets will be submitted to the Annual General Meeting on April 27, 2021.

The Board of Directors and the CEO affirm that the consolidated financial statements have been prepared in accordance with international accounting standards, IFRS as adopted by the EU and provide a true and fair view of the Group’s financial position and results of operations. The financial statements have been prepared in accordance with generally accepted accounting principles and give a true and fair view of the parent company’s financial position and results of operations. The statutory administration report for the Group and the parent company provides a true and fair review of the development of the Group’s and the parent company’s operations, financial position and results of operations and describes material risks and uncertainties facing the parent company and the companies forming part of the Group.

Gothenburg, March 23, 2021

Wallenstam AB (publ)

Lars-Åke Bokenberger Karin Mattsson Chairman of the Board Vice Chairman Anders Berntsson Agneta Wallenstam Board member Board member Mikael Söderlund Hans Wallenstam Board member Chief Executive Officer

Our audit report concerning these annual accounts and the consolidated financial statements was issued on March 23, 2021.

KPMG AB

Mathias Arvidsson Authorized Public Accountant

130

Auditor’s report

Report on the annual accounts and consolidated accounts Opinions

We have audited the annual accounts and consolidated accounts of Wallenstam AB for the year 2020. The annual accounts and consolidated accounts of the company are included on pages 68–130 in this document.

In our opinion, the annual accounts have been prepared in accordance with the Annual Accounts Act, and present fairly, in all material respects, the financial position of the parent company as of December 31, 2020 and its financial performance and cash flow for the year then ended in accordance with the Annual Accounts Act. The consolidated accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the group as of December 31, 2020 and their financial performance and cash flow for the year then ended in accordance with International Financial Reporting Standards (IFRS), as adopted by the EU, and the Annual Accounts Act. The statutory administration report is consistent with the other parts of the annual accounts and consolidated accounts.

We therefore recommend that the general meeting of shareholders adopts the income statement and balance sheet for the parent company and the group.

Our opinions in this report on the the annual accounts and consolidated accounts are consistent with the content of the additional report that has been submitted to the parent company’s audit committee in accordance with the Audit Regulation (537/2014) Article 11.

Basis for Opinions

We conducted our audit in accordance with International Standards on Auditing (ISA) and generally accepted auditing standards in Sweden. Our responsibilities under those standards are further described in the Auditor’s Responsibilities section. We are independent of the parent company and the group in accordance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethical responsibilities in accordance with these requirements.This includes that, based on the best of our knowledge and belief, no prohibited services referred to in the Audit Regulation (537/2014) Article 5.1 have been provided to the audited company or, where applicable, its parent company or its controlled companies within the EU.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions.

Other Matter

The audit of the annual accounts for year 2019 was performed by another auditor who submitted an auditor´s report dated March 19, 2020, with unmodified opinions in the Report on the annual accounts and consolidated accounts.

Valuation of investment in properties

See disclosure 15 and accounting principles on pages 93–96 in the annual account and consolidated accounts for detailed information and description of the matter.

Description of key audit matter

The carrying value of Wallenstam’s investment properties amounts to 57,933 MSEK. This value includes investment properties under construction. The carrying value of the properties per December 31, 2020 is based on property valuations carried out by an internal valuation team. These valuations are based on assumptions such as investment yield, future occupancy rates and expected rentals. With regards to the valuation of investment properties under construction, it is also necessary to consider the company’s processes for project management, in particular the monitoring of construction costs and any obligations they have in relation to these projects.

There is a risk that the underlying assumptions used to determine the carrying value of investment properties and investment properties under construction are proven to have been inappropriate and may need to be adjusted, which would directly affect the financial reporting and the reported results for the period.

Response in the audit

We have assessed the competency and independence of the internal property valuation team, for example by looking at the applied valuation methods and by comparing used assumptions such as investment yield and vacancies against comparable objects.

We have tested and evaluated the company’s controls for determining the completeness and accuracy of the underlying data.

We have selected samples for testing from the completed property valuations. We carry out our assessments with reference to sources independent of the client entity, in particular with regards to assumptions about investment yield, occupancy rates and vacancies.

We have challenged whether the applied valuation methods seem reasonable by comparing them to methods that are, from our experience, used by other property companies and valuation experts, and considered which assumptions may be deemed reasonable when valuing similar properties.

With regards to investment properties under construction, we have evaluated the assumptions used by the company by looking at comparable projects, recent market data and historical information. Moreover, we have selected samples for testing of budgets for ongoing projects and compared those to budgets for projects that have already been completed. Furthermore, we have considered the completeness of the underlying data and circumstances that are disclosed in the notes in the Financial Statements and evaluated whether the information provided is sufficiently detailed to understand management’s assessments and the key assumptions used.

Key Audit Matters

Key audit matters of the audit are those matters that, in our professional judgment, were of most significance in our audit of the annual accounts and consolidated accounts of the current period. These matters were addressed in the context of our audit of, and in forming our opinion thereon, the annual accounts and consolidated accounts as a whole, but we do not provide a separate opinion on these matters.

AUDITOR’S REPORT 131

Accounting of Income taxes

See disclosure 13 and 28 and accounting principles on pages 91–92 and 104–105 in the annual account and consolidated accounts for detailed information and description of the matter.

Description of key audit matter

The Group’s method of accounting for current tax is based on an ongoing process whereby assessments and estimates in relation to matters concerning tax and concerning demands from, or claims made by, the tax authorities regarding interpretations of current and former income tax regulations. The regulations concerning taxation of property companies in Sweden are vast and complex.

There are deferred tax liabilities of 5,811 MSEK on the Group’s consolidated balance sheet, related to temporary differences between the tax base and the carrying value of investment properties. The method of accounting for deferred tax liabilities in property management companies may differ considerably from how such liabilities are accounted for in other industries.

The accumulated temporary differences can be significant since properties as a rule are acquired indirectly through acquisition of shares in property management companies. As a result, the Group assumes the property from the vendor at the value of its tax base, which often is much lower than the acquisition price. In addition, the temporary differences are affected by change in values.

In view of the fact that the current and deferred tax value in the financial statements is based on assessments and estimates made by the company there is a risk that the carrying value of the company’s tax liability may be under- or overstated. Any adjustment to its value will have a direct impact on the results of the period.

Response in the audit

We have evaluated whether the Group’s assessments and interpretations of income tax regulations for property companies are reasonable. We have used our collective knowledge and experience regarding the regulations and their legal application, to analyse and challenge the principal assumptions and estimates upon which the Group base their calculation of tax liabilities.

Furthermore, we have considered the completeness of the underlying data and circumstances that are disclosed in the notes to the Financial Statements and evaluated whether the information provided is sufficiently detailed to understand management’s assessments and the key assumptions used. Our procedures have involved both auditors as well as tax specialists.

Other Information than the annual accounts and consolidated accounts This document also contains other information than the annual accounts and consolidated accounts and is found on pages 1–67 and 142–153. The Board of Directors and the Managing Director are responsible for this other information.

Our opinion on the annual accounts and consolidated accounts does not cover this other information and we do not express any form of assurance conclusion regarding this other information.

In connection with our audit of the annual accounts and consolidated accounts, our responsibility is to read the information identified above and consider whether the information is materially inconsistent with the annual accounts and consolidated accounts. In this procedure we also take into account our knowledge otherwise obtained in the audit and assess whether the information otherwise appears to be materially misstated.

If we, based on the work performed concerning this information, conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Board of Directors and the Managing Director The Board of Directors and the Managing Director are responsible for the preparation of the annual accounts and consolidated accounts and that they give a fair presentation in accordance with the Annual Accounts Act and, concerning the consolidated accounts, in accordance with IFRS as adopted by the EU. The Board of Directors and the Managing Director are also responsible for such internal control as they determine is necessary to enable the preparation of annual accounts and consolidated accounts that are free from material misstatement, whether due to fraud or error.

In preparing the annual accounts and consolidated accounts The Board of Directors and the Managing Director are responsible for the assessment of the company’s and the group’s ability to continue as a going concern. They disclose, as applicable, matters related to going concern and using the going concern basis of accounting. The going concern basis of accounting is however not applied if the Board of Directors and the Managing Director intend to liquidate the company, to cease operations, or has no realistic alternative but to do so.

The Audit Committee shall, without prejudice to the Board of Director’s responsibilities and tasks in general, among other things oversee the company’s financial reporting process.

132 AUDITOR’S REPORT

Auditor’s responsibility

Our objectives are to obtain reasonable assurance about whether the annual accounts and consolidated accounts as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISA and generally accepted auditing standards in Sweden will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these annual accounts and consolidated accounts.

As part of an audit in accordance with ISA, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

• » Identify and assess the risks of material misstatement of the annual accounts and consolidated accounts, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinions. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• » Obtain an understanding of the company’s internal control relevant to our audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control.

• » Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of Directors and the Managing Director.

• » Conclude on the appropriateness of the Board of Directors’ and the Managing Director’s, use of the going concern basis of accounting in preparing the annual accounts and consolidated accounts. We also draw a conclusion, based on the audit evidence obtained, as to whether any material uncertainty exists related to events or conditions that may cast significant doubt on the company’s and the group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the annual accounts and consolidated accounts or, if such disclosures are inadequate, to modify our opinion about the annual accounts and consolidated accounts. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause a company and a group to cease to continue as a going concern.

• » Evaluate the overall presentation, structure and content of the annual accounts and consolidated accounts, including the disclosures, and whether the annual accounts and consolidated accounts represent the underlying transactions and events in a manner that achieves fair presentation.

• » Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated accounts. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our opinions.

We must inform the Board of Directors of, among other matters, the planned scope and timing of the audit. We must also inform of significant audit findings during our audit, including any significant deficiencies in internal control that we identified.

We must also provide the Board of Directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, measures that have been taken to eliminate the threats or related safeguards.

From the matters communicated with the Board of Directors, we determine those matters that were of most significance in the audit of the annual accounts and consolidated accounts, including the most important assessed risks for material misstatement, and are therefore the key audit matters. We describe these matters in the auditor’s report unless law or regulation precludes disclosure about the matter.

Report on other legal and regulatory requirements

Opinions

In addition to our audit of the annual accounts and consolidated accounts, we have also audited the administration of the Board of Directors and the Managing Director of Wallenstam AB for the year 2020 and the proposed appropriations of the company’s profit or loss.

We recommend to the general meeting of shareholders that the profit be appropriated in accordance with the proposal in the statutory administration report and that the member of the Board of Directors and the Managing Director be discharged from liability for the financial year.

Basis for Opinions

We conducted the audit in accordance with generally accepted auditing standards in Sweden. Our responsibilities under those standards are further described in the Auditor’s Responsibilities section. We are independent of the parent company and the group in accordance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethical responsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions.

Responsibilities of the Board of Directors and the Managing Director The Board of Directors is responsible for the proposal for appropriations of the company’s profit or loss. At the proposal of a dividend, this includes an assessment of whether the dividend is justifiable considering the requirements which the company’s and the group’s type of operations, size and risks place on the size of the parent company’s and the group’s equity, consolidation requirements, liquidity and position in general.

The Board of Directors is responsible for the company’s organization and the administration of the company’s affairs. This includes among other things continuous assessment of the company’s and the group’s financial situation and ensuring that the company’s organization is designed so that the accounting, management of assets and the company’s financial affairs otherwise are controlled in a reassuring manner.

The Managing Director shall manage the ongoing administration according to the Board of Directors’ guidelines and instructions and among other matters take measures that are necessary to fulfill the company’s accounting in accordance with law and handle the management of assets in a reassuring manner.

AUDITOR’S REPORT 133

Auditor’s responsibility

Our objective concerning the audit of the administration, and thereby our opinion about discharge from liability, is to obtain audit evidence to assess with a reasonable degree of assurance whether the member of the Board of Directors or the Managing Director in any material respect:

• » has undertaken any action or been guilty of any omission which can give rise to liability to the company, or

• » in any other way has acted in contravention of the Companies Act, the Annual Accounts Act or the Articles of Association.

Our objective concerning the audit of the proposed appropriations of the company’s profit or loss, and thereby our opinion about this, is to assess with reasonable degree of assurance whether the proposal is in accordance with the Companies Act.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with generally accepted auditing standards in Sweden will always detect actions or omissions that can give rise to liability to the company, or that the proposed appropriations of the company’s profit or loss are not in accordance with the Companies Act.

As part of an audit in accordance with generally accepted auditing standards in Sweden, we exercise professional judgment and maintain professional scepticism throughout the audit. The examination of the administration and the proposed appropriations of the company’s profit or loss is based primarily on the audit of the accounts. Additional audit procedures performed are based on our professional judgment with starting point in risk and materiality. This means that we focus the examination on such actions, areas and relationships that are material for the operations and where deviations and violations would have particular importance for the company’s situation. We examine and test decisions undertaken, support for decisions, actions taken and other circumstances that are relevant to our opinion concerning discharge from liability. As a basis for our opinion on the Board of Directors’ proposed appropriations of the company’s profit or loss we examined the Board of Directors’ reasoned statement and a selection of supporting evidence in order to be able to assess whether the proposal is in accordance with the Companies Act.

KPMG AB, Box 11908, 404 39 Gothenburg, was appointed auditor of Wallenstam AB by the general meeting of the shareholders on April 28, 2020. KPMG AB or auditors operating at KPMG AB have been the company’s auditor since 2020.

Gothenburg, March 23, 2021

KPMG AB

Mathias Arvidsson Authorized Public Accountant

134 AUDITOR’S REPORT

Corporate governance report 2020

Wallenstam’s corporate governance structure

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----- Start of picture text -----

Nomination Proposal Shareholders through
committee
Election the general meeting
Election
Auditors Board of Directors
Remuneration
Information The entire Board performs
committee
the audit committee’s duties
Goals and strategies Reports and controls
CEO and Group CEO
Group Management
Stockholm business area Gothenburg business area Staff units
Internal control instruments External control instruments
Business concept, goals and strategies, articles of The Swedish Annual Accounts Act, the Swedish
association, Board’s rules of procedure, CEO’s Companies Act, Rule Book for Issuers, Swedish Corporate
instructions, policies, guidelines and core values. Governance Code and other relevant laws and regulations.
----- End of picture text -----

Principles of corporate governance

Wallenstam AB is a Swedish public company with its registered office in Gothenburg. The company’s B shares are listed on Nasdaq Stockholm, Large Cap. In order to ensure good governance of the Group, responsibility is clearly divided among the shareholders and Board as well as the CEO and Management. The articles of association, the Board’s rules of procedure, including CEO instructions, adopted policies and guidelines, the Swedish Companies Act and other applicable legislation and regulations form the basis for control of the Group. Wallenstam also applies the Swedish Corporate Governance Code (the Code). Wallenstam follows the Code with the exception of the provision regarding composition of the nomination committee. This deviation is explained in more detail below.

The share and owners

The number of shareholders in Wallenstam amounted to 18,000 at year-end. Wallenstam’s principal shareholder is Hans Wallenstam who, together with his family and companies, holds 25 percent of the equity and 62 percent of the voting rights. Foreign share ownership amounted to 10 percent of the equity and 5 percent of the voting rights. The ten largest shareholders represented the equivalent of around 58 percent of the equity and about 79 percent of the voting rights. No warrants, convertibles or equivalent securities exist, which can result in additional shares in the company.

As of December 31, 2020, Wallenstam’s share capital amounted to SEK 165 million, distributed among 34,500,000 A shares (ten votes per share) and 295,500,000 B shares (one vote per share). There are no limits to how many votes each shareholder may cast at annual general meetings. The shares all carry equal rights to the company’s assets and profits. However, repurchased own shares have no dividend rights. Wallenstam’s market capitalization at year-end amounted to SEK 43,098 million.

According to Wallenstam’s dividend policy, the reported profit should primarily be reinvested in the operations to enable continued development of the Group’s core business and thus create increased value growth. When determining the size of the dividend, consideration must also be given to the company’s investment requirements, need to strengthen its balance sheet and position in

general, and the ability of the Group to develop in the future while maintaining its financial strength and freedom of action. However, the amount available for distribution must not exceed profit before changes in value and impairment charges less participations in the profits of associated companies and after standard tax.

Annual General Meeting

The Annual General Meeting (AGM) is Wallenstam’s highest decision-making body where shareholders have the opportunity to make decisions on questions concerning the company. The AGM is held in Gothenburg within six months of the end of the financial year. Shareholders have the right to participate in the AGM – personally or by proxy – if the shareholder is recorded in the share register on the record day and has notified his participation in the meeting to the company within the period prescribed in the convening notice. In order to exercise voting rights at the meeting, shareholders whose shares are nominee-registered must temporarily reregister their shares in their own name in accordance with the notice to the AGM.

The AGM elects the Chairman of the Board, the other Board members and the company’s auditors. It is also tasked with adopting the balance sheets and income statements for the company and the Group, deciding on the appropriation of the company’s profits, discharging the members of the Board and the CEO from liability for the financial year, approving guidelines for remuneration to senior executives and the appointment of a nomination committee.

Notice to attend the AGM is given through the Official Swedish Gazette (Post- och Inrikes Tidningar) and on Wallenstam’s website. It shall also be announced in Dagens Industri that notice has been given. The convening notice includes the agenda and the resolutions proposed by the Board of Directors and the nomination committee. Shareholders who wish to have a matter dealt with at the AGM can request this in good time to Wallenstam’s Board of Directors prior to the meeting.

A total of 133 shareholders were represented at Wallenstam’s AGM on April 28, 2020, representing around 49 percent of the shares and about 75 percent of the total number of votes in the company. Due to the ongoing Covid-19 pandemic, no one from the

CORPORATE GOVERNANCE REPORT 135

Board or Group Management was physically present at the AGM, but they could be reached by telephone for any questions. The company’s auditor was not physically present either.

The following resolutions were adopted by the AGM on April 28, 2020:

• » Adoption of the income statements and balance sheets of the Group and the parent company for 2019.

• » A dividend of SEK 0 per share.

• » Fees to the Board of SEK 740,000 to the Chairman of the Board, SEK 260,000 to the Vice Chairman and SEK 160,000 to each of the other Board members. In addition, the AGM resolved on extra fees to the Chairman of the Board of SEK 1,700,000. The total fees thus amounts to SEK 3,180,000. Amounts include remuneration for committee work.

• » Discharge from liability of the CEO and Board of Directors.

• » Re-election of Board members Agneta Wallenstam, Anders Berntsson and Karin Mattsson. New election of the Board members Lars-Åke Bokenberger and Mikael Söderlund. Lars-Åke Bokenberger was elected as Chairman of the Board.

• » New election of KPMG AB as auditor with Mathias Arvidsson as chief auditor.

• » Resolution regarding guidelines for remuneration to senior executives.

• » Authorization for the Board of Directors to take decisions regarding acquisition and assignment of the company’s own shares.

• » Resolution regarding nomination committee ahead of the AGM 2021.

The Board convened an Extraordinary General Meeting (EGM) on September 30, 2020, at which 150 shareholders were represented. These represented around 37 percent of the shares and about 68 percent of the total number of votes in the company. The EGM was held on account of the ongoing Covid-19 pandemic by advance voting only. The following resolutions were adopted by the EGM on September 30, 2020:

• » A dividend of SEK 0.50 per share.

Minutes and a presentation from the AGM and EGM are available at www.wallenstam.se.

Nomination Committee

The 2020 AGM resolved to establish a nomination committee ahead of the 2021 AGM in order to present proposals, including for the election of the Chairman and other members of the Board, election of the auditor, the chairman of the AGM, and questions relating to fees.

The following persons were elected as members of the nomination committee ahead of the AGM 2021:

• » Dick Brenner (nomination committee chairman)

• » Lars-Åke Bokenberger (Chairman of the Board, Wallenstam AB)

» Hans Wallenstam (largest shareholder, Wallenstam AB) » Anders Oscarsson (representing the shareholder AMF).

The composition of the nomination committee implies a deviation from the Code’s provision 2.3 as the CEO is a member of the nomination committee. The reason for the deviation is that the CEO is also the principal shareholder in the company and is thus a member of the nomination committee in that capacity.

The members of the nomination committee have carefully considered and stated that there is no conflict of interest in accepting the assignment as a member of Wallenstam’s nomination committee.

Shareholders have the possibility of submitting proposals to the nomination committee using the address provided on Wallenstam’s website. The nomination committee’s proposals to the AGM are published in connection with the convening notice. The nomination committee also submits a reasoned opinion regarding the proposed Board and a report on how the nomination committee carried out its work. In its work, the nomination committee aims to maintain a uniform gender distribution in the Board and that the Board in other respects should be characterized by versatility and breadth with regard to competencies, experience and background. The nomination committee applies rule 4.1 of the Swedish Corporate Governance Code for this purpose as a diversity policy, in drawing up its proposal for election of Board members.

The nomination committee held six recorded meetings during the period January–April 2020 ahead of the 2020 AGM at which all of the matters that are incumbent on the committee to deal with under the Code were discussed. The nomination committee discussed and considered the size of the Board, what areas of expertise should be represented on the Board, fees to Board members and a proposal for election of the auditor and for election of the chairman of the meeting. As a basis for its opinion, the nomination committee studied the result of the annual evaluation of the Board that was carried out during 2019. The relatively large number of meetings was related to the new election of Board members.

Board of Directors

Shareholders elect the Board at the AGM every year. The Board of Directors has overall responsibility for the Group’s organization and administration, and to ensure that the control of accounting, management of funds and economic conditions in general are satisfactory. It is therefore incumbent on the Board to ensure that a functioning reporting system is in place and that the Board receives the necessary information regarding the company’s position, profit/ loss, financing and liquidity through periodical reporting. In addition to its responsibility for the company’s organization and administration, the Board’s most important task is to take decisions on strategic matters such as approval of strategic plans, business and profitability targets and policies. The Board also takes decisions on major acquisitions and divestments of properties and companies and major investments in construction and wind power as well as financing questions.

				Attendance	Attendance remu-
			Attendance	audit committee	neration commit-
Name	Function	Elected	Board meetings	meetings	tee meetings	Independent*
Lars-Åke Bokenberger	Chairman from April 28	2020	8/8	2/2		Yes
Karin Mattsson	Vice Chairman	2016	13/13	3/3	1/1	Yes
Anders Berntsson	Board member	1997	13/13	3/3	1/1	No
Agneta Wallenstam	Board member	2010	13/13	3/3	1/1	No
Mikael Söderlund	Board member	2020	7/8	2/2		Yes
Ulrica Jansson Messing	Chairman until April 28	2008	5/5	1/1	1/1	Yes

• Independent means independent in relation to the company, company management and to the company’s major shareholders under the provisions of the Code.

136 CORPORATE GOVERNANCE REPORT

Annual planning by the board

Apart from standing items such as investment decisions and information from the CEO in the form of financial reports, market analysis etc.

• Adoption of the year-end report JAN FEB	• MAR	• Matters for decision Preparations for the AGM APR MAY JUN
• Remuneration matters	•	Statutory Board meeting
• Preparations for the AGM	•	Related party questions and
• Audit matters		conflicts of interest
• Evaluation of internal audit	•	Sustainability questions
• Proposed dividend JUL AUG	SEP	OCT NOV DEC
	• Strategies and plans	• Budget
	• Audit matters	• Policies
	• Forecasts	• Evaluation of the CEO’s work
		• Evaluation of the Board’s work
		• Audit matters
		• Related party questions and conflicts of
		interest

Composition of the Board of Directors

According to the articles of association, Wallenstam’s Board must comprise at least four and not more than eight members, with no deputies. There are no provisions in the articles of association concerning the appointment and removal of Board members or about changes to the articles of association. Board members are elected annually at the AGM for the period until the end of the next AGM. New Board members receive an overview of the company and its operations and participate in Nasdaq Stockholm’s training for board members in listed companies.

During the period until April 28, 2020, Wallenstam’s Board, due to the passing of Christer Villard, was composed of four members elected by the AGM, with no deputies. At the 2020 AGM, Agneta Wallenstam, Anders Berntsson and Karin Mattsson were reelected. In addition, Lars-Åke Bokenberger and Mikael Söderlund were elected as new Board members. From April 28, 2020, Wallenstam’s Board was composed of five members elected by the AGM, with no deputies. Board members are presented in more detail on page 14. The CEO does not sit on the Board.

The work of the Board

The Board’s work is governed by rules of procedure that are adopted annually at the statutory meeting. Among other things, the rules of procedure contain instructions about the division of duties within the Board and in relation to the CEO and the duties of the committees.

The Chairman of the Board leads the Board’s work and ensures that the Board performs its duties. The Chairman monitors the Group’s operations through continual contacts with the CEO and is responsible for ensuring that other members continually receive the information necessary to carry out the Board work in the best way. The Chairman is also responsible for conducting an annual evaluation of the Board’s and CEO’s work.

Board decisions require that both more than half of the members are present and more than one third of the total number of members vote for the resolutions. The Chairman has the casting vote in the event of the same number of votes.

during the year was dominated by the ongoing Covid-19 pandemic and focused in particular on strategy discussions, questions relating to market conditions and financing, sustainability and compliance issues and investments. The Board also made site visits to a number of the company’s ongoing new construction projects in Gothenburg and Stockholm. The CEO and officers of the company attend Board meetings in a reporting capacity.

During the year, the company’s auditors attended the Board meetings, which were held in February, September and December.

The Board conducted an evaluation of its work during 2020. The evaluation was conducted under the leadership of the Chairman of the Board in the form of interviews with each of the Board members. The Board also evaluated the CEO, without him being present.

Remuneration Committee

Within the Board, there is a remuneration committee tasked with preparing the Board’s decisions on matters concerning remuneration principles as well as compensation and other terms of employment for company management. In addition, the remuneration committee must monitor and evaluate the application of guidelines for remuneration to senior executives that the AGM has adopted as well as current compensation structures and levels in the company. Where appropriate, the remuneration committee must also monitor and evaluate ongoing programs for variable remuneration to company management as well as programs concluded during the year.

The remuneration committee held two recorded meetings during 2020. Matters dealt with at the meetings included an evaluation of current remuneration to senior executives and proposals for future remuneration to these persons.

The committee’s members are appointed by the Board once every year and its areas of responsibility are governed by the rules of procedure adopted by the Board annually. During the period from September 25, 2019, when the Board’s former Chairman passed away, until the Annual General Meeting on April 28, 2020, the entire Board performed the duties of the remuneration committee. As from the statutory Board meeting on April 28, 2020, the remuneration committee was composed of Chairman of the Board Lars- Åke Bokenberger and Vice Chairman Karin Mattsson.

Meetings during 2020

In 2020, the Board held thirteen recorded meetings, of which one was the statutory meeting. At each of these meetings, the Board dealt with the matters described in the chart above and other matters of material importance for the company. The Board work

Audit Committee

The Board of Directors has discussed the issue of setting up an audit committee but has chosen not to establish one. The Board as a whole therefore performs the duties that are incumbent on an audit com-

CORPORATE GOVERNANCE REPORT 137

mittee within the framework of the regular board work. In this way, the Board’s expertise can be fully put to use and Board meetings are made more efficient. The duties of the audit committee include:

• » monitoring the company’s financial reporting and making recommendations and proposals to ensure the reliability of the reporting

• » monitoring the effectiveness of the company’s internal control, internal audit and risk management in respect of the financial reporting

• » keeping informed about the audit of the annual accounts and consolidated financial statements

• » following the outcome of the audit

• » evaluating and reviewing the auditor’s impartiality and independence

• » submitting proposals to the AGM for the election of auditor or to consider giving the nomination committee the task of submitting such proposals to the AGM.

During 2020, the Board met three times in its capacity as an audit committee to deal with the above matters.

In addition, Wallenstam shall be the natural choice of people and companies for housing and commercial premises, annually reduce the company’s environmental impact and to be an attractive employer. By following the business strategy, net asset value growth is created for the company and its shareholders, which is the company’s goal for the business plan 2019-2023. For further information about the company’s business strategy, see www.wallenstam.se.

Successful implementation of the company’s business strategy and the safeguarding of the company’s long-term interests, including its sustainability, require the company to be able to recruit and retain qualified employees. For this, the company must be able to offer competitive remuneration. These guidelines make it possible to offer senior executives competitive total compensation.

A synthetic options scheme has been established in the company. This was adopted by the general meeting of shareholders and therefore is not covered by these guidelines.

Variable cash remuneration which is covered by these guidelines shall aim to promote the company’s business strategy, long-term value creation in the company and the company’s long-term interests, including its sustainability.

CEO and Group Management

The CEO is responsible for the company’s day-to-day administration and leads the company’s operations according to the Board’s guidelines and directives, including the adopted CEO instructions. The CEO is responsible for preparing complete information and decision data prior to Board meetings, presenting matters for discussion and for justifying his proposals for actions and decisions. Group Management also keeps the Board continuously informed about the performance of the company and the Group through monthly newsletters.

Wallenstam’s CEO Hans Wallenstam is the company’s largest shareholder. It is a great advantage for Wallenstam to have a CEO with a long-term interest in the company. Apart from continuity, it also means quick decisions, which has proved to be a competitive advantage on a number of occasions.

In his day-to-day work the CEO leads the Group Management. Wallenstam’s Group Management includes the CEO, the Vice CEO and Regional Director Stockholm and Uppsala business area, the Vice CEO and Regional Director Gothenburg business area, the CFO and Head of Investor Relations, the Communications Director and the Technical Director. Wallenstam’s Group Management is presented on page 16. The CEO and other members of Group Management meet continuously in order to monitor developments and results in the business areas, update forecasts and plans, and to discuss current issues. Reporting from Group Management to the CEO, in respect of each operational area, occurs on a monthly basis. In connection with this, an evaluation takes place together with annual development discussions to ensure that the right competencies are found in key positions.

Remuneration to the CEO and Group Management

Guidelines for remuneration to senior executives are decided by the AGM. The guidelines cover the CEO, Vice CEOs and other members of Group Management. The guidelines also cover consultancy fees to a Board member who performs other work than pure Board work for the company. The guidelines shall be applied to remuneration that is agreed, and changes made in already agreed remuneration, after the guidelines were adopted by the 2020 AGM. The guidelines do not cover remuneration that is approved by the general meeting of shareholders.

Guidelines for promoting the company’s business strategy, long-term interests and sustainability

The company’s business strategy in brief is to cost-efficiently build, develop and manage properties and areas, based on a high level of service and long-term sustainability in selected metropolitan areas.

The forms of remuneration etc.

The remuneration shall be market-related and may be composed of the following components: fixed cash salary, variable cash remuneration, pension benefits and other benefits. The general meeting of shareholders in addition to this – and independent of these guidelines – can resolve, for example, on share-based and share-pricebased payments. The variable cash remuneration may, when applicable, not exceed 50 percent of the fixed annual cash salary.

For the CEO, pension benefits, including health insurance shall be defined contribution. Variable cash remuneration shall not be pensionable. The pension premiums for defined contribution pensions shall amount to a maximum of 40 percent of the fixed annual cash salary. For other senior executives, pension benefits, including health insurance, shall be defined contribution unless the senior executive is covered by defined benefit pension under compulsory collective agreement provisions. Variable cash remuneration shall be pensionable to the extent that it arises under compulsory collective agreement provisions which are applicable for the executive. The pension premiums for defined contribution pensions shall amount to a maximum of 40 percent of the fixed annual cash salary.

Other benefits may include home property protection, life insurance, medical costs insurance, health checks, benefit in the form of domestic services and car benefit. Premiums and other expenses due to such benefits may amount to a maximum of 20 percent of the fixed annual cash salary.

If a Board member performs work for Wallenstam in addition to the Board assignment, the Board may decide that a reasonable fee should be payable for such work.

Termination of employment

Upon termination of employment, the period of notice may be a maximum of twelve months. Fixed cash salary during the period of notice and termination benefits in total may not exceed an amount equivalent to the fixed cash salary for two years. In the event of notice from the executive, the notice period may be not more than six months, without right to termination benefits.

Criteria for distribution of variable cash remuneration etc.

Wallenstam does not currently apply variable cash remuneration. If variable cash remuneration would be applied, which has occurred historically in a few individual cases, the remuneration shall be linked to predetermined and measurable criteria that may be financial or non-financial. The criteria can also consist of individually-adapted quantitative or qualitative goals. The criteria shall be designed so that they promote the company’s business strategy and long-term

138 CORPORATE GOVERNANCE REPORT

interests including its sustainability, by for example having a clear connection to the business strategy or promoting the executive’s long-term development. The fulfillment of criteria for payment of variable cash remuneration must be measurable over a period of one or more years. When the measurement period for fulfillment has been completed, the extent to which the criteria have been met shall be assessed. The remuneration committee is responsible for the assessment regarding variable cash remuneration to the CEO. Regarding variable cash remuneration to the other executives, the CEO is responsible for the assessment. As far as the financial goals are concerned, the assessment shall be based on the latest financial information published by the company.

Salary and terms of employment for employees

In preparing the Board’s proposal for these remuneration guidelines, salaries and terms of employment for the company’s employees have been taken into account by the fact that information about employees’ total remuneration, the components of the remuneration and the remuneration’s increase and rate of increase over time formed part of the remuneration committee’s and the Board’s decision data when evaluating the reasonableness of the guidelines and the limitations arising from these. The development of the gap between the remuneration of senior executives and the remuneration of other employees will be reported in the remuneration report.

Decision-making processes for approving, reviewing and implementing the guidelines

The Board has established a remuneration committee. The committee’s duties include preparing the Board’s decisions and proposal for guidelines for remuneration of senior executives. The Board of Directors shall draw up proposals for new guidelines at least every four years and submit the proposal for resolution at the AGM. These guidelines shall apply until amended guidelines have been adopted by the general meeting. The remuneration committee shall also follow and evaluate variable remuneration programs for company management, the application of guidelines for remuneration to senior executives as well as remuneration structures and rates of compensation in the company. When the Board is dealing with and deciding on remuneration-related issues, the CEO or other members of company management are not present, to the extent that they are affected by the issues concerned.

Departures from the guidelines

The Board of Directors may decide to temporarily deviate from the guidelines, in whole or in part, if there are special reasons for this in an individual case and a departure is necessary to meet the company’s long-term interests, including its sustainability, or to ensure the company’s financial viability. As stated above, it is part of the remuneration committee’s duties to prepare the Board’s resolutions on remuneration issues, which includes resolutions on departures from the guidelines.

Description of significant changes in the guidelines

Due to changes in the Companies Act and the Corporate Governance Code regarding the content of these guidelines, the guidelines have been amended to comply with currently effective legislation and the Corporate Governance Code.

External auditors

Wallenstam’s auditors are elected annually by the AGM. At the 2020 AGM, KPMG AB was elected as auditor with the Authorized Public Accountant Mathias Arvidsson as chief auditor until the end of the 2021 AGM. The auditor examines the Board’s and the CEO’s administration of the company and the quality of the company’s accounting. The auditor reports the outcome of his examination to the shareholders through his audit report, which is presented at

the AGM. Moreover, as a general rule the auditor presents detailed statements to the Board at Board meetings at least three times per year. The Board meets the company’s auditor without Group Management being present once per year.

In addition to the audit, KPMG AB performs certain audit-related services for Wallenstam. These services mainly relate to accounting, tax and company law-related matters, and Wallenstam is of the opinion that the performance of these services does not jeopardize KPMG AB’s independence. Further information regarding remuneration to the auditors can be found in the Group’s Note 4.

Internal control over financial reporting

The Board has overall responsibility for ensuring that Wallenstam has a satisfactory system for internal control over financial reporting. This system is designed through collaboration among the Board, Group Management and the company’s personnel aimed at ensuring the following:

• » that the company has reliable financial reporting

• » that the company has a suitable and efficient financial reporting organization

• » that the company complies with applicable legislation and other applicable regulations regarding the financial reporting.

• The company uses the established COSO framework (Internal Control – Integrated Framework) in its financial reporting work.

Control environment

To ensure internal control over financial reporting, Wallenstam’s control environment is based on a clear division and distribution of responsibilities and duties between the Board and the CEO, and also within the company’s operational activities. The Board’s rules of procedure and CEO instructions aim to ensure such a distinct division of roles and responsibilities in order to facilitate the efficient management of operational risks. Correspondingly, there are also decision-making and authorization procedures covering all of the Group’s operations, among other things, aimed at ensuring good order and at preventing or detecting irregularities/fraud (nonapproved purchases, unauthorized use of the company’s assets etc.) in time, which can have a significant impact on the company’s financial reporting.

Policies adopted by the Board, such as the Code of Conduct and finance policy, are also important for the internal control work. There are also established guidelines for the company’s employees in order for them to understand the importance of their respective roles in the maintenance of good internal control. The guidelines for the financial reporting are updated in the event of changes in legal requirements, listing requirements and/or accounting standards.

Risk assessment

Wallenstam’s Group Management continually evaluates and identifies the risk for material errors in the financial reporting based on discussions and meetings in the organization. The Board, in its capacity as an audit committee, reviews the company’s material risks with the company’s auditors and also decides on necessary measures that need to be taken. Higher risks have been identified in the following areas:

• » valuation of investment properties

• » property transactions/construction

• » fiscal estimates including interpretation of legal cases and regulatory changes.

Control activities

Control activities are designed both to prevent and detect shortcomings in the identified risk areas above and also to ensure that any errors in the financial reporting are corrected. There are also control activities to ensure that reporting occurs in accordance with applicable accounting rules and standards. Other controls include

CORPORATE GOVERNANCE REPORT 139

various forms of system support, built into established routines and division of duties such as quarterly reporting from the business areas to the CFO and through the principle that all documents should be reviewed and approved by at least two people. The company has an ethics council, which employees can contact for guidance and an external whistleblowing function where suspected irregularities can be reported.

The Board reviews the interim and annual accounts prior to publication.

Instructions, procedures and manuals are drawn up, updated and communicated to the employees concerned on an ongoing basis to ensure they have up-to-date information. Employees also undergo training to ensure they have the necessary competencies.

Information and communication

Both the internal information within Wallenstam and the external communication are governed by the Group’s overall information disclosure guidelines. Company management is responsible for informing the relevant employees about their responsibility for maintaining good internal control, with the aim of ensuring efficient and accurate disclosure of financial reporting. This occurs through regular information meetings in each business area, among other ways. Employees are also kept informed via Wallenstam’s Intranet about adopted policies, guidelines, instructions and manuals.

The IR department is responsible for external information disclosure in respect of the financial reporting. This work is conducted according to the principle of current and correct disclosure as described in Nasdaq Stockholm’s rule book for issuers.

Follow-up of internal control

Wallenstam’s Group Management continually evaluates that the internal control over financial reporting is working in the intended way. This occurs through internal analyses and by reviewing the accounting department’s work, with the aim of identifying measures needed or proposals for improvements. The Board subsequently receives Group Management’s comments regarding the operations and the internal control. The company’s auditors as a general rule participate in Board meetings three times per year and inform members of their observations regarding the company’s internal routines and control system. Board members also have the opportunity to ask questions to the external auditors at these meetings. It is the duty of the Board to ensure that action is taken regarding possible shortcomings and proposed measures resulting from Group Management reports and in the audit and information from the auditors.

Internal audit

Wallenstam’s Group Management continually reviews the procedures and documentation concerning the internal control system. Nothing has emerged to indicate that the control system is not working as intended. In light of this, the Board has decided not to establish an internal audit function. This decision is reviewed annually.

Non-compliance

During 2020, no breaches of regulations or etiquette at the stock exchange where Wallenstam’s shares are traded have taken place according to decisions by the exchange’s disciplinary committee or pronouncements by the Swedish Securities Council. This report is not part of the formal annual report.

Gothenburg, March 23, 2021

Lars-Åke Bokenberger Chairman of the Board Anders Berntsson Board member Mikael Söderlund Board member

Karin Mattsson Vice Chairman Agneta Wallenstam Board member

140 CORPORATE GOVERNANCE REPORT

Auditor’s report on the corporate governance statement

To the general meeting of the shareholders in Wallenstam AB (publ), corporate identity number 556072-1523

Engagement and responsibility

It is the board of directors who is responsible for the corporate governance statement for the year 2020 on pages 135–140 and that it has been prepared in accordance with the Annual Accounts Act.

The scope of the audit

Our examination has been conducted in accordance with FAR’s auditing standard RevU 16 The auditor’s examination of the corporate governance statement . This means that our examination of the corporate governance statement is different and substantially less in scope than an audit conducted in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. We believe that the examination has provided us with sufficient basis for our opinions.

Opinions

A corporate governance statement has been prepared. Disclosures in accordance with chapter 6 section 6 the second paragraph points 2–6 the Annual Accounts Act and chapter 7 section 31 the second paragraph the same law are consistent with the annual accounts and the consolidated accounts and are in accordance with the Annual Accounts Act.

Gothenburg, March 23, 2021 KPMG AB

Mathias Arvidsson Authorized Public Accountant

Auditor’s opinion regarding the statutory sustainability report

To the general meeting of the shareholders in Wallenstam AB (publ), corporate identity number 556072-1523

Engagement and responsibility

It is the board of directors who is responsible for the sustainability report for the year 2020 on pages 2–4, 7–8, 29–38, 41–44, 136 and 150–152 that it is prepared in accordance with the Annual Accounts Act.

in Sweden. We believe that the examination has provided us with sufficient basis for our opinion.

Opinion

A statutory sustainability report has been prepared.

The scope of the examination

Our examination has been conducted in accordance with FAR’s auditing standard RevR 12 The auditor’s opinion regarding the statutory sustainability report . This means that our examination of the statutory sustainability report is different and substantially less in scope than an audit conducted in accordance with International Standards on Auditing and generally accepted auditing standards

Gothenburg, March 23, 2021 KPMG AB

Mathias Arvidsson Authorized Public Accountant

AUDITOR’S REPORTS 141

• = Residential properties • = Commercial properties • = Public use properties

Property list, Gothenburg Business Area

					Retail/	Indus-
			Resi-		Restau-	try/	Edu ca-
Name of		Year of con- struction/	den - tial	Ofce	rant/ Cinema	ware- hou sing	tion/ Care	Garage	Other	Total	Assessed value, SEK	Lease-	No. of
property	Address	conversion	sq m	sq m	sq m	sq m	sq m	sq m	sq m	sq m	thousands	hold	apts.	Largest tenants
GOTHENBURG MUNICIPALITY
Avenue area
•Lorensberg 7:15	Geijersgatan 7, 7A-7B /	1936/2002	3,804	45	1,684		537			6,070	248,000		60	Filmstaden
	Götaplatsen 9 /
	Viktor Rydbergsgatan 1,1A-1B
•Lorensberg15:3	Lennart Torstenssonsgatan 6-8	1929/1993					2,100			2,100
•Lorensberg 43:1	Kungsportsavenyen 1 / Parkgatan	1883/2008	553	2,925	707				10	4,195	136,200		10	Advokatfrman
	29/Storgatan 30/Teatergatan 2													Nordia Göteborg
•Lorensberg 44:2	Kungsportsavenyen 2 /	1910/2005		4,682	782					5,464	157,000			Wallenstam
	Parkgatan 31 / Storgatan 32,
	34A-34B/Södra vägen 1
•Lorensberg 45:21	Kungsportsavenyen 4 /	1940/2000	1,946		1,070					3,016	124,200		27	Gondoliere
	Storgatan 51
•Lorensberg 52:4	Kristinelundsgatan 10 /	1941/1996	6,890	4,986	2,410	215	68	2,970		17,539	513,800		79	Convendum
	Kungsportsavenyen 21-25 /
	Teatergatan 22-26
•Lorensberg 53:1	Kungsportsavenyen 16 /	1896/1998		1,500	705					2,205	85,000			Nilson Group
	Vasagatan 43A
•Lorensberg 53:2	Lorensbergsgatan 1 /	1966/2009		994	846		536			2,376	60,000			Pincho Nation
	Vasagatan 43B
•Lorensberg 53:5	Kristinelundsgatan 14 /	1920/1984	1,179		540					1,719	56,310		13	Göteborgs Nattliv
	Lorensbergsgatan 7
•Lorensberg 53:6	Kristinelundsgatan 12 /	1929		1,170	574					1,744	50,774			Opalen Fastighets-
	Kungsportsavenyen 22													Förvaltning
•Lorensberg53:7	Kungsportsavenyen 20	1929/1983		635	210		272			1,117	40,200			SEB
•Lorensberg54:9	Vasagatan 45	1979/2010		4,639	1,541	388		567		7,135	167,000			Open Text
•Lorensberg 55:14	Engelbrektsgatan 34AA-34AB,	1936/2014	6,304	210	1,251	60	553			8,378	303,361		86
	34B-34C / Lorensbergsgatan
	18-20/Södra Vägen 29
•Lorensberg 56:8	Engelbrektsgatan 32 / Kungsports-	1962/2010	1,361	5,160	2,189	132		700		9,542	207,592		12	Food Folk
	avenyen 32-34 / Lorensbergsgatan													Sverige
	17-19
•Lorensberg 57:8	Engelbrektsgatan 30 / Kungsports-	1962/2014	7,097	4,835	4,271	399	1,250			17,852	746,200		93	Lindex Sverige
	avenyen 29-37 / Teatergatan
	30-38
•Lorensberg 58:6	Chalmersgatan 26 / Engelbrekts-	1929/1988	1,565	4,201	349	70				6,185	179,200		14	Mullvad VPN
	gatan 26-28/Teatergatan 25
•Vasastaden 3:1	Erik Dahlbergsgatan 1 /	1898/1980	1,578	965	196	4	2,489			5,232			15	Sjölins
	Karl Gustavsgatan 2 /													gymnasium
	Parkgatan 9-11,10-12
•Vasastaden 9:7	Bellmansgatan 13 /	1929/1990	2,079							2,079
	Vasagatan 14
Gamlestaden
•Gamlestaden 740:22	Marieholmsgatan 60B-60C	1929/1969				389				389	19,808	2024		SUEZ Recycling
Guldheden
•Guldheden 5:5	Guldhedstorget 1, 1A-1B /	1945/2015	2,708		611	50	1,010			4,379	89,116		57
	Reutersgatan 1
Gårda
•Gårda 18:22	Drakegatan 5 & 7	1989		9,355		303		2,850	107	12,615	226,000			Max Matthiessen
•Gårda 20:1	Fabriksgatan 15 / Gårdavägen 1	1986/2007		4,343	93	129		204		4,769	99,000			The City of Gothenburg,
														The Swedish Schools
														Inspectorate
•Gårda 22:24	Fabriksgatan 26/Vädursgatan 5	1989/2008		5,138	820	434	2,471	1,713		10,576	90,200			Kunskapsskolan
•Gårda 46:9	Södra Gubberogatan 4-8, 18-20	1936/1995		12,475	544	771	1,990	2,950	375	19,105	160,400			Västra Götaland
														CountyCouncil
Heden
•Heden 24:13	Skånegatan 19 /	1964/1997	3,693	414	750	36		1,423		6,316	145,800		34	Dagab Inköp
	Sten Sturegatan 34-36													& Logistik
•Heden 24:14	Skånegatan 21-23 /	1962/1988	10,501	1,398	2,365	523	147	3,000	12	17,946	380,000		116	Netto Marknad
	Sten Sturegatan 38-44													Sverige
•Heden 37:4	Skånegatan 16B	2006			10,610					10,610		2026		Filmstaden
Högsbo
•Högsbo 5:7	A Odhners gata 6 /	1967/1998			1,369	1,894				3,263	17,226
	Olof Asklundsgata 25
•Högsbo 34:12	Gruvgatan 4	1980		215		1,700				1,915	6,528			Bilia
•Högsbo 34:21	Gruvgatan 6-8 /	1989		4,964	269	249	3,107	1,450		10,039				GHP Spine Centre
	J A Wettergrensgata 16													Göteborg
•Järnbrott 195:1	Högsbogatan 21-25	2009	6,838	81				1,000		7,919	170,062	2028	100
Inom Vallgraven
•Inom Vallgraven 6:1	Kungsportsplatsen 2	1929/2011		1,647	1,086					2,733	115,000			Advokatfrman Styrks
•Inom Vallgraven 15:1	Drottninggatan 24-26 / Korsgatan	1809		1,820	1,290					3,110	95,000			Wiktor Ahlströms
	2-6/Södra Hamngatan 25													konditori
•Inom Vallgraven 16:6	Korsgatan 1 /	1891		2,981	287	139	1,846			5,253	24,400			NTI Gymnasiet Macro
	Södra Hamngatan 17-23
•Inom Vallgraven 16:24	Korsgatan 3	1885		1,398	225	94			105	1,822	46,000			Advokatfrman Credo
•Inom Vallgraven 16:25	Drottninggatan 22/Korsgatan 5	1885		552	188	40				780	25,200			Demoskop
•Inom Vallgraven 17:13	Drottninggatan 8,9-11	1929/1998		2,626	29	100				2,755	74,343			Infotiv
•Inom Vallgraven 18:3	Korsgatan 11, 11B /	1929/2002	863		711					1,574	52,200		18	Buttericks Leco
	Kyrkogatan 32

142 PROPERTY LIST

Hisingen Tuve Backa Kortedala Björlanda Bergsjön Kvillebäcken Kviberg Önnered Krokslätt Johanneberg Majorna Gamlestaden Högsbo Örgryte Västra Frölunda Mölnlycke Landvetter Mölndal Partille 155 27 27 E 45 E 20 E 20 E 6	•=Residential properties LAND/Name	•=Residential properties LAND/Name	•=Residential properties LAND/Name
	Almek	ärr 2:10	Lorensberg21:3
	Gårda	52:2	Majorna 350:6
	Gårda	52:3	Mölnlycke 1:162
	Gårda	52:10	Mölnlycke 1:163
	Gårda	52:11	Mölnlycke 1:164
	Hjälls	näs 11:17	Mölnlycke 1:165
	Hälle 1:3		Mölnlycke 1:166
	Kallebäck 18:2		Mölnlycke 1:167
	Kallebäck 18:3		Mölnlycke 1:169
	Kallebäck 18:4		Mölnlycke 2:1
	Kallebäck 18:5		Pixbo 1:20
	Kallebäck 18:6		Pixbo 1:294
	Kallebäck 18:7		Skår 57:15
	Kallebäck 18:8		Släps-Hagen 1:29
	Krokslätt 154:7		Storegården 1:70
	Kärra 2:11		Stärtered 1:22
	Kärra 26:5		Älvsborg755:505

					Retail/	Indus-
			Resi-		Restau-	try/	Edu ca-
Name of		Year of con- struction/	den - tial	Ofce	rant/ Cinema	ware- hou sing	tion/ Care	Garage	Other	Total	Assessed value, SEK	Lease-	No. of
property	Address	conversion	sq m	sq m	sq m	sq m	sq m	sq m	sq m	sq m	thousands	hold	apts.	Largest tenants
•Inom Vallgraven 19:16	Korsgatan 12/Kyrkogatan 34-36	1929	60	631	1,644					2,335	58,983		1	Cervera
•Inom Vallgraven 20:18	Korsgatan 14-18 / Kungsgatan	1810/2004		5,254	3,517	124				8,895	373,000			Colligent Inkasso
	42-44/Kyrkogatan 15-19
•Inom Vallgraven 21:10	Kungsgatan 59 /	1804/1998		1,452	503	21			61	2,037	94,000			WERKS Advokater
	Östra Hamngatan 41-43
•Inom Vallgraven 21:11	Vallgatan 42 /	1929/2015		2,142	332					2,474	119,389			DB Banklokaler
	Östra Hamngatan 45
•Inom Vallgraven 23:7	Södra Larmgatan 16 /	1929/2019		1,666	1,033	115				2,814	76,000			Funkis Multimedia
	Vallgatan 21,21A-21D
•Inom Vallgraven 23:8*	Södra Larmgatan 18/Vallgatan 23	1878			416					416
•Inom Vallgraven 23:11	Korsgatan 17 / Södra Larmgatan	1929/2006		2,049	1,248	6				3,303	140,000			Fortex International
	20-22 / Vallgatan 25-29, 25A-25B,
	27A-27B
•Inom Vallgraven 23:13	Södra Larmgatan 10-14 /	1929/2002	323	2,684	2,117	86			87	5,297	149,247		5	Linderoths
	Vallgatan 15-19													Mediaproduktion
•Inom Vallgraven 25:1	Basargatan 10-12 /	1929/2008		3,150	2,482				6	5,638	226,604			Dunross & CO
	Kungsportsplatsen 1 /
	Kungstorget 10-14,11-13
•Inom Vallgraven 26:8	Basargatan 4-8, 6A-6B, 5-7 /	1929/2011	3,252	8,400	7,109	259		1,071		20,091	638,000		38	Filmstaden
	Grönsakstorget 3 / Kungstorget
	1-3, 2 / Lilla Korsgatan 2 / Södra
	Larmgatan 11-15,13C
•Inom Vallgraven 27:1	Grönsakstorget 1 / Södra Larm-	1929/2011		2,424	802	10			80	3,316	97,144			Recorded Future
	gatan 7/Västra Hamngatan 24-26
•Inom Vallgraven 32:1	Kaserntorget 6/Vallgatan 1	1939/2001		2,033	576	234				2,843	76,800			More Alliance Nordic
•Inom Vallgraven 32:2	Vallgatan 3	1929/2008		333	231					564	14,800			Vink io
•Inom Vallgraven 32:8	Magasinsgatan 15/Vallgatan 5	1814		386	322					708	18,800			Kafelabbet MWJ
•Inom Vallgraven 32:12	Magasinsgatan 19 /	1929/2004		370	3,198					3,568	58,600			Götaplatsgruppen
	Södra Larmgatan 2													Restauranger
•Inom Vallgraven 32:13	Kaserntorget 8, 9	1929/2007		123	471					594	11,600			Musik utan
														gränser
•Inom Vallgraven 32:14	Magasinsgatan 17	2019			61					61	12,800			Kafelabbet MWJ
•Inom Vallgraven 35:12	Kaserntorget 1, 2 / Kungsgatan 13	1956		1,415	465	56				1,936	51,662			Protek
														Projektstyrning
•Inom Vallgraven 53:15	Lilla Torget 2 / Otterhällegatan 1	1986/2006		2,620		375				2,995	67,600			IMPLENIA
														Construction GmbH
•Inom Vallgraven 55:1	Drottninggatan 2 / Ekelundsgatan	1850/2002		2,861	416	84				3,361	79,000			Wemind
	2 / Magasinsgatan 1 /
	Otterhällegatan 2
•Inom Vallgraven 57:7	Kyrkogatan 12-16 /	1907/2003		997		24	2,844			3,865				Frisk Service i GBG
	Västra Hamngatan 7A-7C
•Inom Vallgraven 60:8	Ekelundsgatan 1-3 /	1965/1997		11,378	514	1,064		1,098	55	14,109	278,000			County Adminis-
	Otterhällegatan 4													trative Board
•Inom Vallgraven 60:9	Ekelundsgatan 5-7 /	1964		2,600	66	48		3,900		6,614	99,000			Fingerprint Cards
	Otterhällegatan 6
•Inom Vallgraven 60:10	Ekelundsgatan 9-11 / Kungsgatan	1964/2002		4,599	2,581					7,180	144,000			Fingerprint Cards
	20-22 / Käppslängareliden 2 /
	Otterhällegatan 8
• Inom Vallgraven 64:31	Stora Badhusgatan 16	1949					1,669			1,669				Kitas utbildning
• Nordstaden 24:11	Kronhusgatan 16 /	1929			266		3,930			4,196				Vittraskolorna
	Östra Hamngatan 15

• Share in BRF Larmtrumman

PROPERTY LIST 143

==> picture [507 x 733] intentionally omitted <==

----- Start of picture text -----

||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|E 6|Gamlestaden|E 20|Partille|Nordstaden|
|Hisingen|Kvillebäcken|E 45|Stampen|
|155|
|Örgryte|
|Majorna|Johanneberg|L|
|Krokslätt|
|27|Inom|
|Högsbo|Mölnlycke|Vallgraven|Gårda|
|Västra|Mölndal|
|Önnered|Frölunda|
|E 20|
|E 6|
|Heden|
|E 45|
|E 6|
|Vasastaden|
|Haga|
|Masthugget|
|Lorensberg|
|Landala|
|Olivedal|
|• = Commercial properties • = Public use properties|
|Retail/|Indus-|
|Resi-|Restau-|try/|Edu ca-|
|Year of con-|den -|rant/|ware-|tion/|Assessed|
|Name of|struction/|tial|Office|Cinema|hou sing|Care|Garage|Other|Total|value, SEK|Lease-|No. of|
|property|Address|conversion|sq m|sq m|sq m|sq m|sq m|sq m|sq m|sq m|thousands|hold|apts.|Largest tenants|
|Johanneberg|
|•|Johanneberg 15:31|Volrat Thamsgatan 2|2018|1,620|223|1,843|73,544|36|
|• Johanneberg 47:4|Örnehufvudsgatan 7|1939/1986|1,904|42|1,946|70,027|31|
|Järntorget|
|• Haga 31:5|Haga Östergata 10, 12 / Skolgatan|1992|1,978|3,030|500|5,508|Capio Närsjukvård|
|1, 3 / Södra Allégatan 6 / Östra|
|Skansgatan 4|
|• Masthugget 10:3|Första Långgatan 22|1960/1994|2,133|173|110|2,416|37,400|TIBCO Software|
|• Masthugget 10:15|Första Långgatan 16-18 /|1957/1989|8,594|971|455|4,791|800|15,611|219,000|Framtidsgymnasiet i|
|Andra Långgatan 15-19 /|Göteborg|
|Nordhemsgatan 13-15|
|• Masthugget 10:20|Första Långgatan 24-26 /|1962/1991|4,820|467|136|1,800|7,223|110,000|Västra Götaland|
|Värmlandsgatan 14|County Council|
|• Pustervik 2:19|Lilla Pusterviksgatan 1-3 / Norra|1968/1994|4,300|4,300|Folkuniversitetet|
|Allégatan 6 / Pusterviksgatan 11|
|Kallebäck|
|• Kallebäck 3:4|Mejerigatan 1|1971|8,400|485|21,431|221|30,537|112,000|ICA Fastigheter|
|Krokslätt|
|• Illern 6|Krokslätts Parkgata 46A-46D|1944/1975|884|39|8|931|17,166|24|
|• Krokslätt 9:15|Bomgatan 1 / Framnäsgatan 2 /|2008|2,873|2,873|90,000|60|
|Mölndalsvägen 47-51|
|• Krokslätt 21:1|Drivhusgatan 6A-6B / Milpåle gatan|1948/1994|2,517|13|2,530|70,027|47|
|5 / Thorburnsgatan 12A-12D|
|• Krokslätt 21:2|Drivhusgatan 4A-4C /|1950/1994|1,761|122|1,883|49,036|33|
|Helmutsrogatan 7A-7B|
|• Krokslätt 21:3|Helmutsrogatan 9 /|1950/2008|1,506|126|1,632|39,377|20|
|Milpålegatan 3, 3A-3C|
|Kvillebäcken|
|• Brämaregården 42:11|Godemansgatan 2 / Hjalmar|1942|782|266|75|1,123|16,237|14|
|Brantingsgatan 5, 5A-5D|
|• Brämaregården 42:12|Hjalmar Brantingsgatan 7, 7A-7D|1939|821|221|70|1,112|17,966|15|
|/ Lantmätaregatan 5|
|• Brämaregården 44:11|Hjalmar Brantingsgatan 9 /|1983|2,792|291|128|3,211|55,540|39|
|Lantmätaregatan 2-6|
|• Brämaregården 62:1|Fjärdingsgatan 3-9 /|2015|5,803|54|249|20|1,250|7,376|187,492|112|
|Gustaf Dahlénsgatan 4-8, 6A /|
|Långängen 14-16|
|• Kvillebäcken 3:1|Gustaf Dahlénsgatan 10-14 /|2014|6,009|85|30|1,167|7,291|186,129|115|
|Långängen 11, 11A /|
|Solventilsgatan 20-22|
|• Kvillebäcken 5:6|Lantmätaregatan 12, 12A-12D,|1954|2,089|114|559|2,762|45,934|37|
|14A-14C / Långängen 19|
|• Kvillebäcken 73:1|Fjärdingsgatan 23-29 /|2013|6,280|108|3|594|2,336|9,321|197,153|108|
|Gustaf Dahlénsgatan 22-26|
|• Kvillebäcken 74:1|Gustaf Dahlénsgatan 7A-7F /|2013|5,124|78|2|800|2,268|8,272|170,489|98|
|Rundbäcksgatan 14|
|Kyrkbyn|
|• Kyrkbyn 9:6|Estlandsgatan 1 / Prebendegatan|1942/1975|652|54|706|11,656|16|
|32A-32D / Östra Bräckevägen 52|

----- End of picture text -----

144 PROPERTY LIST

					Retail/	Indus-
			Resi-		Restau-	try/	Edu ca-
Name of		Year of con- struction/	den - tial	Ofce	rant/ Cinema	ware- hou sing	tion/ Care	Garage	Other	Total	Assessed value, SEK	Lease-	No. of
property	Address	conversion	sq m	sq m	sq m	sq m	sq m	sq m	sq m	sq m	thousands	hold	apts.	Largest tenants
•Kyrkbyn 10:14	Estlandsgatan 4A-4D / Finlands-	1942/1994	684			8				692	11,984		16
	gatan 3/Östra Bräckevägen 54
•Kyrkbyn 10:15	Estlandsgatan 2A-2D / Finlands-	1942/1975	658						47	705	11,445		16
	gatan 1/Vårbroddsgatan 1
•Kyrkbyn 11:14	Finlandsgatan 4A-4D / Hull-	1942/1975	652							652	11,964		16
	gatan 3/Östra Bräckevägen 56
•Kyrkbyn 13:14	Londongatan 4 / Tilburygatan	1943/1984	766			50				816	13,080		14
	2A-2D/Vårbroddsgatan 7
•Lindholmen 1:21	Polstjärnegatan 6	1955				11,147	1,350			12,497	33,994			The Cityof Gothenburg
•Lindholmen 5:1	Polstjärnegatan 8,8A	1968				11,510				11,510	19,633			The Cityof Gothenburg
•Rambergsstaden 25:3	Enekullegatan 5A-5D	1943/1984	744			49				793	12,263		14
•Rambergsstaden 28:1	Enekullegatan 4 / Håkansgatan 2 /	1943	714		52	125				891	13,439		15
	Trekantsgatan 2,2A-2D
•Rambergsstaden 28:2	Enekullegatan 2A-2D /	1943	812			201				1,013	14,891		18
	Håkansgatan 4
•Rambergsstaden 32:2	Lantmannagatan 6 /	1945/1985	1,948							1,948	37,800		36
	Östra Keillersgatan 1A-1G
•Sannegården 20:2	Bautastensgatan 11A-11C	1936	700			48				748	13,155		18
•Sannegården 20:3	Bautastensgatan 9,9A-9C	1939	741		41	6				788	13,943		17
•Sannegården 21:39	Biskopsgatan 2A-2D / Pilegårds-	1945/1983	612	50		50				712	10,528		11
	gatan 26/Prebendegatan 9
•Sannegården 21:41	Pilegårdsgatan 22A-22D /	1942/1975	520			59				579	9,146		14
	Prebendegatan 5
•Sannegården 21:42	Pilegårdsgatan 20A-20D /	1942	538			20				558	9,423		14
	Prebendegatan 3
Kålltorp
•Bagaregården 27:1	Lilla Munkebäcksgatan 9A-9E	1939/1999	1,062			18				1,080	29,626		25
•Kålltorp36:15	Stobéegatan 8A-8C	1935/1997	945		50					995	26,351		20
•Kålltorp57:1	Qvidingsgatan 2A-2C	1936	576			65				641	15,604		14
•Kålltorp57:2	Qvidingsgatan 4A-4B	1936	551			72				623	14,095		10
Linnéstaden
•Olivedal 3:12	Övre Djupedalsgatan 7,7A-7D	1929	1,143			192				1,335	34,631		16
Lunden and Olskroken
•Bö 72:20	Danska vägen 20	1861		367					546	913
•Gårda 64:1	Redbergsvägen 11,11A-11B	1939/2015	2,940		310					3,250	84,921		43
•Gårda 67:29	Mäster Johansgatan 15-17	2006	3,725					80		3,805	117,131		53
•Gårda 69:1	Gradmansplatsen 1 /	1938/1998	1,728		435					2,163	48,834		28
	Redbergsvägen 17,17A-17B
•Gårda 69:24	Kobbarnas väg8	1937/1994	1,610							1,610	44,800		26
•Gårda 70:8	Kobbarnas väg15	1944/1985	1,573			15				1,588	43,241		25
•Lunden 13:2	Karlagatan 7A-7C	1935/1976	628							628	17,800		16
•Lunden 14:12	Karlagatan 1-3 / Mäster Johans-	1974	4,434	47		43	517	1,469		6,510	124,201		63
	gatan 14-16/Wrangelsgatan 1
•Lunden 16:7	Karlagatan 4,4A-4C	1939/1976	583	46	34					663	16,390		12
•Lunden 61:9	Ulfsparregatan 14-18	2018	4,961		50	8		750		5,769	180,893		115
•Olskroken 11:8	Övre Olskroksgatan 22,22A-22B	1928/1979	1,640			60		30		1,730	43,596		24
Majorna
•Majorna 303:29	Amiralitetsgatan 2A-2B, 4-8 /	1965/2014	34,223	1,001	1,734	92		10,949	456	48,455	938,023		445
	Bangatan 21-39 /
	Djurgårdsgatan 26-40
•Majorna 332:6	Godhemsgatan 14A-14C /	1933	854			70				924	21,077		18
	Paternostergatan 7
•Majorna 332:9	Godhemsgatan 8A-8B	1933	665			90				755	16,800		12
•Majorna 350:5	Dahlströmsgatan 8-20, 20B-20C,	1959/2012	17,255	207		349			18	17,829	450,322		246
	22-44, 44B, 46-52 / Kolumbus-
	gatan 1-3/Stenklevsgatan 5
•Majorna 721:75	Fiskhamnen 27	1973				1,207				1,207	3,221	2023
•Majorna 721:78, 721:81Fiskhamnen 23-25		1974				2,416				2,416	9,650	2023
												& 2028
Rambergsstaden
•Brämaregården 15:17	Väderkvarnsgatan 11A-11C	1938/1991	1,012	50		10				1,072	19,757		17
•Brämaregården 19:2	Jägaregatan 9A-9C /	1930/1990	1,032							1,032	18,800		19
	Tunnbindaregatan 1
•Brämaregården 30:3	Ekebergsgatan 1-7 / Hallegatan 7	1991/2006	2,276							2,276	46,400		35
	/Hisingsgatan 22,22B,24A-24B
Rosenlund
•Inom Vallgraven 69:5	Rosenlundsgatan 6-8 /	1974/1998		12,432	3,793	1,709		2,282	261	20,477	368,000			The Swedish Enforce-
	Rosenlundsplatsen 2													ment Authority
Stampen
•Stampen 5:6	Polhemsplatsen 1 /	1990/2009		7,395		102	1,730	2,975		12,202	213,000			The Swedish Public
	Stampgatan 12-18													Employment Service
•Stampen 15:18	Friggagatan 25A	1936/1993	1,418		205					1,623	43,822		26
Torslanda
•Björlanda 1:61	Björlanda Prästgårdsväg 50	1873	550						898	1,448	6,440		1	Rescue Mission in
														Gothenburg
Önnered
•Önnered 762:369	Önnereds brygga 1-17	1975/2005		1,434	705	228			520	2,887	19,600	2024		Prové

PROPERTY LIST 145

					Retail/	Indus-
			Resi-		Restau-	try/	Edu ca-
Name of		Year of con- struction/	den - tial	Ofce	rant/ Cinema	ware- hou sing	tion/ Care	Garage	Other	Total	Assessed value, SEK	Lease-	No. of
property	Address	conversion	sq m	sq m	sq m	sq m	sq m	sq m	sq m	sq m	thousands	hold	apts.	Largest tenants
HÄRRYDA MUNICIPALITY
Mölnlycke
•Hulebäck 1:23	Biblioteksgatan 9-15 /	1975/2013	2,751		4,972	4				7,727	109,000		46
	Centralvägen 14 / Ekdalavägen 3
	/Gunnar Runforsgränd 2
•Hulebäck 1:604	Centralvägen 13A-13D /	1951	692		512	75			73	1,352	16,753		16
	Råda torg7
•Hulebäck 4:90	Badhusgatan 14, 16A-16D /	2001	1,854		1,086					2,940	52,264		33
	Biblioteksgatan 14A-14C,16A-16D
•Hulebäck 4:92	Biblioteksgatan 4A-4E	2002		398	496					894	3,785			Kronans Drog handel
														Apotek
•Hulebäck 4:97	Biblioteksgatan 5 / Central vägen	1970/2011	1,339	1,112	637	17				3,105	53,600		20
	10-12 / Gunnar Runfors gränd 1-9
	/Lennart Kvarnströmsplats 2-8
•Hulebäck 4:164	Allén 2-6 / Biblioteksgatan 1A-1C /	2012	2,511	102	2,391			1,825		6,829	109,000		52
	Centralvägen 8A-8E /
	Lennart Kvarnströmsplats 1-13
•Hönekulla 1:157	Långenäsvägen 9A-9B, 11 /	1933	100		305				1,347	1,752	2,120		2	Härryda
	Rörsvängen 6													Municipality
•Hönekulla 1:479	Hönekullavägen 7	1971		608	437	211			1,505	2,761	10,219			Rescue Mission
•Hönekulla 1:571	Åvägen 1	1987		1,650		2,669				4,319	17,578			RZ HB Mekaniska
•Mölnlycke 1:159	Fabriksvägen 2	1890/1981		350						350	1,415
•Mölnlycke 1:161, 1:168	Fabriksvägen 1	1890/2001		7,477	520	17,950	2,660		494	29,101				Essity Hygiene
														and Health
MÖLNDAL MUNICIPALITY
Mölndal
•Rödklövern 1	Gunnebogatan 68-160	2018	2,652							2,652	59,400		89
•Stallbacken 5	ÅbyAllé 13 och 19	2016	2,263					1,099		3,362	54,078		42
•Stallbacken 7	ÅbyAllé 15-17	2016	3,715					1,368		5,083	91,924		71
•Stallbacken 9	ÅbyAllé 21-23	2016	4,000							4,000	96,000		75
•Stallbacken 23	ÅbyAllé 51-57	2017	4,599					671		5,270	113,088		88
•Stallbacken 24	ÅbyAllé 59-63	2017	4,526							4,526	107,800		82
•Stallbacken 26	Åbyvägen 4 A-D	2019	5,778			98		592		6,468	124,491		109
•Stallbacken 27	ÅbyAllé 67	2018	6,252					1,913		8,165	137,185		133
•Uttern 12	Göteborgsvägen 119-121 /	1929	1,556		137	30				1,723	30,922		26
	Sörgårdsgatan 1A-1F
PARTILLE MUNICIPALITY
Partille and Jonsered
•Manered 5:3	Höghallsvägen 1A-1B, 3A-3B, 5A-	1949/1994	1,332			54				1,386	11,900		24
	5B/Jonseredsvägen 4
•Stärtered 1:21	Bäcksorlet 2 / Länsmansvägen	1949/1994	2,176	134		33				2,343	30,557		40
	2A-2B,4A-4B,6A-6B,8A-8B
•Stärtered 1:23	Stärteredsvägen 24A-24B,	1950/1994	2,164			94				2,258	29,259		40
	26A-26B,28A-28B,30A-30B
•Stärtered 1:28	Stärteredsvägen 25-31	2010	3,620							3,620	71,800		59
Total		257,364		206,952	93,719	84,681	48,391	59,443	7,346	757,896	14,160,174		4,158

Property list, Stockholm Business Area

• = Residential properties • = Commercial properties • = Public use properties

Property lis	t, Stockholm Business Are	a		•	= Reside	ntial prope	rties•=	Commer	cial prop	erties•	= Public u	se prop	erties
					Retail/
					Restau-	Industry/	Edu ca-
Name of		Year of con- struction/	Residen -	Ofce	rant/ Cinema	ware- hou sing	tion/ Care	Garage	Other	Total	Assessed value, SEK	Lease-	No. of
property	Address	conversion	tial sq m	sq m	sq m	sq m	sq m	sq m	sq m	sq m	thousands	hold	apts.
HANINGE MUNICIPALITY
Haninge
•Söderbymalm 3:518	Poseidons gränd 1-21, 3A-3B, 7A-7B, 11A /	2012	11,408	527	1,081	40		4,150		17,206	281,800		196
	Poseidons torg1A-1C,2A-2C
HUDDINGE MUNICIPALITY
Huddinge
•Kansliet 2	Kansligränd 1-5 / Lännavägen 4 /	2007	9,206			31				9,237	175,181		138
	Rådsvägen 4,4A-4E
•Klinten 16	Chronas väg 3 / Gamla Södertäljevägen 139 /	1982	1,385	27		20		175		1,607	19,550		22
	Klintvägen 5
•Klinten 18	Gamla Södertäljevägen 135/Klintvägen 9-11	1982	1,217	470		8				1,695	23,172		23
•Runan 1	Drakvägen 2 / Gymnasievägen 2 /	1960	10,403	99	1,313	36		300		12,151	178,098		196
	Kvarnbergsplan 2-18
JÄRFÄLLA MUNICIPALITY
Barkarby
•Barkarby 2:28	Barkarbyvägen 42-52, 42A-42B, 44A-44C /	2014	15,615		756	45		3,688		20,104	397,628		247
	Gripengatan 1-7 / Karlslundsvägen 4-8, 8A /
	Stora torget 1-3,1A-1B,2,2A-2B
•Barkarby 2:44	Mustanggatan 6A-B, 8A, 10 / Viggengatan 1-5 /	2017	12,231		1,203	110	1,278	2,620		17,442	374,800		205
	Flygfältsvägen 1A, 3-5 / Barkarbyvägen 14A, 16A,
	18A,20A-B
NACKA MUNICIPALITY
Nacka Strand
•Sicklaön 368:2	Fyrspannsvägen 3A-3B, 5A-5C /	2015	7,561					1,694		9,255	217,315	2023	122
	Jacobsdalsvägen 2A/Lokomobilvägen 3-5

146 PROPERTY LIST

•= •= •= Vasastan Ladugårdsgärdet Norrmalm Södermalm Hägersten-Liljeholmen Bromma Hässelby-Vällingby Farsta Kista Spånga Boo Älta Solna Huddinge Järfälla Lidingö Tyresö Botkyrka Ekerö Nacka Sundbyberg Trångsund Haninge 73 75 222 222 226 226 226 228 229 229 258 260 260 260 259 259 261 261 274 271 271 275 275 275 277 279 E 4 E 4 E 18 E 20 Österåker	Residential properties Commercial properties Public use properties LAND Name
	Berga 6:682
	Berga 6:738
	Berga 6:739
	Bergkristallen 1
	Freden Större 17
	Freden Större 19
	Hagby1:98
	Järnet 13
	Kringlan 1
	Kringlan 2
	Kringlan 4
	Kringlan 11
	Kringlan 12
	Kvarngärdet 71:1
	Kåbo 76:1
	Maren 1:14
	Maren 1:15
	Murförbandet 1
	Rankan 3
	Rankan 4
	Söderbymalm 3:539
	Söderbymalm 3:540
	Tibble 10:8-9
	Tyresö Strand 1:18
Name of property Address Year of con- struction/ conversion Residen - tial sq m Ofce sq m Retail/ Restau- rant/ Cinema sq m Industry/ ware- hou sing sq m Edu ca- tion/ Care sq m Garage sq m Other sq m Tot sq	al m Assessed value, SEK thousands Lease- hold No. of apts.
Älta
•Älta 10:62 Oxelbacken 1-3/Oxelvägen 24 2015 7,509 2,554 10,063 197,481 2024 129
•Älta 14:104 Stensövägen 2-8 2011 4,217 1,175 5,392 103,044 73
•Älta 19:1 Oxelvägen 42 1968 1,344 1,283 908 1,585 5,120 44,200
•Älta 24:2 Oxelvägen 3-29 1965 24,800 264 528 20 25,612 378,079 320
•Älta 24:3 Oxelvägen 1 1971 1,007 1,007 7,426
•Älta 25:1 Oxelvägen 26-40 1966 12,598 135 523 5,975 16 19,247 199,482 163
•Älta 27:3 Ältavägen 202 1993 4,711 665 300 94 5,770 92,538 73
SOLNA MUNICIPALITY Solna
•Smaragden 1 Hannebergsgatan 22 1951 2,446 430 143 3,019 67,512 32
STOCKHOLM MUNICIPALITY Bandhagen
•Framkallningen 3 Trollesundsvägen 56 A-F 2020 6,766 11 1,868 8,645 110
•Passfotot 2 Trollesundsvägen 58 B-C 2020 3,005 651 3,656 48
Blackeberg
•Islänningen 1 Holbergsgatan 82-84 1951 2,548 196 2,744 47,789 2031 84
Gröndal
•Barlasten 4 Fågelsångsvägen 17 1929 719 191 21 931 19,184 16
•Barlasten 6 Fregattvägen 4-8 1956 4,071 336 675 190 5,272 95,434 60
•Barlasten 8 Fågelsångsvägen 1 1956 546 52 598 12,358 11
•Galjonsbilden 28 Matrosbacken 15 1949 571 571 13,400 11
Gärdet
•New York 8 Sandhamnsgatan 1 1943 2,212 260 2,472 98,793 40
HammarbySjöstad
•Forsen 1 Båtbyggargatan 66-68/Vävar Johansgata 12-18 2005 8,214 1,700 9,914 323,400 2024 135
•Skärgårdsbåten 2 Fendergatan 2-4 2009 3,380 750 4,130 141,471 2028 49
•Svallvågen 1 Fartygsgatan 12-18 / Rorgängargatan 22-28 / Vävar Johansgata 29-37 2007 11,734 2,675 14,409 471,600 2026 170
Högdalen
•Brukslaven 2 Skebokvarnsvägen 163-171 1955 4,752 19 88 4,859 86,352 2024 81
•Nockteglet 3 Sjösavägen 21-31 1953 2,569 88 156 2,813 49,791 2023 45
Midsommarkransen
•Violen 12 Erikslundsgatan 6/Nioörtsvägen 36 1938/1987 1,053 296 1,349 27,997 16
•Violen 13 Nioörtsvägen 38 1938/1987 848 127 975 20,892 11
Norra Djurgårdsstaden
•Domarudden 1 Grythundsgatan 3/Jaktgatan 38-40 2016 815 815 2024
•Stora Sjöfallet 3 Grythundsgatan 5-11 / Husarviksgatan 16A / Jaktgatan 37-41 2016 6,626 229 1,772 8,627 329,405 2024 121

PROPERTY LIST 147

					Retail/
					Restau-	Industry/	Edu ca-
Name of		Year of con- struction/	Residen -	Ofce	rant/ Cinema	ware- hou sing	tion/ Care	Garage	Other	Total	Assessed value, SEK	Lease-	No. of
property	Address	conversion	tial sq m	sq m	sq m	sq m	sq m	sq m	sq m	sq m	thousands	hold	apts.
Råcksta
•Hålslaget 2	Ullångergatan 5	1953	3,840	51		61			6	3,958	69,805	2031	71
•Hålslaget 3	Ullångergatan 7-19	1953	3,020	200		113				3,333	54,460	2022	49
•Hängmappen 1	Multrågatan 34-50	1953	4,033	238		78				4,349	72,671	2031	59
•Kontot 2	Multrågatan 27A-27E,29	2007	5,009							5,009	108,000	2026	73
•Kortregistret 2	Multrågatan 88-106	1953	4,039	248		115				4,402	71,303	2031	67
•Kortregistret 3	Multrågatan 72-86	1953	3,347	137		166				3,650	58,731	2031	60
•Kortregistret 6	Multrågatan 52-70,56A-56B	1953	3,904	29	423	36				4,392	74,412	2031	65
•Kulspetspennan 1	Nordingrågatan 2-20,20A-20B	1953	5,481	36		197		700		6,414	100,915	2022	96
•Kundregistret 4	Multrågatan 128	1953	2,933	31		67				3,031	53,041	2025	54
•Kundregistret 5	Multrågatan 130-156/Ångermannagatan 123-125	1953	6,784	128	286	212		550		7,960	122,864	2025	108
•Kundregistret 6	Ångermannagatan 109-121	1953	2,803		64	156				3,023	50,814	2025	56
•Räknemaskinen 2	Gudmundrågatan 1-3,2-10/Solleftegatan 15-17	1952/1993	3,739	325	268	119				4,451	67,372	2031	58
•Räknetabellen 3	Gudmundrågatan 12/Långseleringen 5	1953		58	307	78	,1,087			1,530		2031
•Samlingspärmen 2	Multrågatan 31-39	1953	1,979	122	87	6				2,194	36,189	2031	35
•Skrivmaskinen 4	Multrågatan 6-32	1952	5,889	83		279		250	17	6,518	107,278	2031	107
•Skrivmaskinen 6	Gudmundrågatan 15-19	1952	1,324							1,324	23,800	2031	24
•Skrivmaskinen 8	Gudmundrågatan 1-9 / Multrågatan 2-4 /	1952	5,530	145		324				5,999	96,385	2031	100
	Solleftegatan 3-13
Solberga
•Balettskon 1	Folkparksvägen 91-95 / Skodonsvägen 3-7 /	2017	8,943					1,097		10,040	301,029	2026	148
	Tåhättevägen 3
•Seglarskon 1	Skodonsvägen 2-10	2018	4,827							4,827	173,000		80
•Seglarskon 2	Tåhättevägen 7-9/Skodonsvägen 12-16	2018	4,904							4,904	179,000		90
Södermalm
•Pålen 16	Hornsgatan 91/Hornskroken 1	1938/1996	3,237	879	198					4,314			57
•Urvädersklippan	Klevgränd 10 / Urvädersgränd 11	1964	1,175		116	131		191		1,613	39,048		11
Mindre 4
Örby
•Kolvringen 1	Rävsnäsvägen 79-83	1951
•Sökarlyktan 1	Rävsnäsvägen 57-63,69-83	1951	2,884	50		609				3,543	48,984		44
•Trafkmärket 1	Rävsnäsvägen 69-77	1951
Östermalm
•Sälgen 2	Birger Jarlsgatan 64,64A-64B/Rådmansgatan 24	1927/2007		3,605	110			583	250	4,548	178,200
SUNDBYBERG MUNICIPALITY
Sundbyberg
•Fjällnäset 14	Högklintavägen 9-11	1966	2,632	514		153				3,299	60,892		37
•Freden Större 12	Fredens Torg4A-E	2020	2,856		325					3,181			75
•Freden Större 13	Östra Madenvägen 7A,7D, Gesällvägen 7, 7C, 9,	2019	8,125	176	662	72		3,040		12,075	139,200		147
	Odlingsgatan 4 B-D
•Freden Större 18	Gesällvägen 1 / Rissneleden 2-2B, 4-18 /	1974		18,894		327	1,478		11,947	32,646	218,974
	Östra Madenvägen 3-5,9-17
•Lärkan 14	Kolonivägen 2-4 / Skogsbacken 1-3 /	1964	9,823	629	1,447	2,938	1,299	9,780	113	26,029	302,800		162
	Tulegatan 8-14/Ängsstigen 1-7
TYRESÖ MUNICIPALITY
Tyresö
•Järnet 1	Telefongränd 1 / LM Ericssons väg 2-10 /	2018	9,409		63	7		2,488		11,967	223,559		184
	Bollmoragårdsväg3,5A-5C
•Järnet 12	Bollmoragårdsväg20,22	2020	2,376		163					2,539			54
UPPSALA MUNICIPALITY
Central Uppsala
•Dragarbrunn 20:6	Kungsgatan 45-47/Vaksalagatan 14	1938/2017	372	1,848	707	78				3,005	79,107		3
Gränby
•Gränby 9:6	Bruno Liljeforsgatan 62, 64, 68 /	2017	5,582	80	226	23		900		6,811	130,630		116
	Råbyvägen 63 A,B,C
Rosendal
•Kåbo 57:2	Rosendalsvägen 6, 8, 10A, 10B /	2017	8,420					2,584		11,004	264,892		145
	TorgnySegerstedts allé 5,7
•Kåbo 63:2	Torgny Segerstedts allé 71-81 /	2019	6,114	156	106					6,376	96,614		141
	Prefektgatan 5-7/BettyPetterssonsgata 13
Östra Sala Backe
•Sala Backe 47:1	Johannesbäcksgatan 49-57	2017	7,117	54				2,248		9,419	164,123		137
ÖSTERÅKER MUNICIPALITY
Österåker
•Hacksta 1:72	Norrgårdshöjden 1-8	2020	5,633		86			1,195		6,914		2026	128
Total			343,004	33,008	12,688	9,218	5,957	58,184	15,239	477,298	8,263,264		5,788

Property holdings, total Wallenstam Group

	Residen -	Ofce	Retail/ Restaurant/	Industry/ warehou s-	Edu cation/	Garage	Other	Total	Assessed value,
	tial sq m	sq m	Cinema sq m	ing sq m	Care sq m	sq m	sq m	sq m	SEK thousands	No. of apts.
Total Wallenstam Group	600,368	239,960	106,407	93,899	54,348	117,627	22,585	1,235,194	22,423,438	9,946

148 PROPERTY LIST

Completed new construction 2020*

					Retail/
		Year of costruction/	Resi- dential	Ofce	Restaurant/ Cinema	Industry/ warehous-	Education/ Care	Garage	Other	Total	No. of
Name of property	Address	conversion	sq m	sq m	sq m	ing sq m	sq m	sq m	sq m	sq m	apts.
Stockholm
Järnet 12(Project: Terrassen Elva)	Bollmora Gårdsväg20,22	2020	2,376		163					2,539	54
Hacksta 1:72	Norrgårdshöjden 1-8	2020	5,633		86			1,195		6,914	128
(Project: Norrgårdshusen)
Framkallningen 3	Trollesundsvägen 56 A-F	2020	6,766			11		1,868		8,645	110
(Project: Trollesundsgårdar)
Passfotot 2	Trollesundsvägen 58 B-C	2020	3,005					651		3,656	48
(Project: Trollesundsgårdar)
Freden större 13	Östra Madenvägen 7A, 7D / Gesällvä-	2019	8,125	176	662	72		3,040		12,075	147
(Project: Umami Park, phase 1A)	gen 7,7C,9/Odlingsgatan 4 B,C,D
Freden Större 12	Fredens Torg 4 A -E	2020	2,856		325					3,181	75
(Project: Umami Park, phase 1B)
New York 9 (Project: New York)	Sandhamnsgatan 1A / Värtavägen 68-70	2020	3,185		263			66		3,514	50
Developmentproperty
Gothenburg
Heden 24:14 (Project: Sten	Skånegatan 21-23/ Sten Sturegatan	2020	1,845							1,845	29
Stures Kröningar,Regenten**)	38-44
Total			33,791	176	1,499	83		6,820		42,369	641

* Refers to fully completed and fully occupied properties ** 1,845 sq m refers to an extension of an already existing property designation

Property acquisitions 2020

					Retail/
		Year of costruction/	Resi- dential	Ofce	Restaurant/ Cinema	Industry/ warehous-	Education/ Care	Garage	Other	Total	No. of
Name of property	Address	conversion	sq m	sq m	sq m	ing sq m	sq m	sq m	sq m	sq m	apts.
Stockholm
Murförbandet 1*(Bandhagen)
TäbyTibble 10:8-9*
TäbyBergkristallen 1*
Österåker Hagby1:98*
Uppsala
Kvarngärdet 71:1*
Gothenburg
Majorna 721:75	Fiskhamnen 27	1973				1,207				1,207
Majorna 721:78,721:81	Fiskhamnen 23-25	1974				2,416				2,416
Lorensberg21:3*
Total						3,623				3,623	0

* Land

Property sales 2020

Majorna 721:78,721:81 Fiskhamnen 23-25 1974 2,416 2,416 Lorensberg21:3 Total 3,623 3,623 0 _ Land_ Property sales 2020	Majorna 721:78,721:81 Fiskhamnen 23-25 1974 2,416 2,416 Lorensberg21:3 Total 3,623 3,623 0 _ Land_ Property sales 2020	Majorna 721:78,721:81 Fiskhamnen 23-25 1974 2,416 2,416 Lorensberg21:3 Total 3,623 3,623 0 _ Land_ Property sales 2020
Name of property Address Year of costruction/ conversion Resi- dential sq m Ofce sq m Retail/ Restaurant/ Cinema sq m Industry/ warehous- ing sq m Education/ Care sq m Garage sq m Other sq m Total sq m No. of apts.
Stockholm
New York 9 Developmentproperty Sandhamnsgatan 1A / Värtavägen 68-70 2020 3,185 263 66 3,514 50
Wind power Total 3,185 263 66 3,514 50
Name Location Electricity region No. of turbines Output MW Dan Carlson Rålanda,Uddevalla Municipality,Bohuslän 3 2 4.0 Rose-Marie Gulleberg Lyngby,Kristianstad Municipality,Skåne 4 3 5.6 Bengt Carlsson Gategården,Vara Municipality,Västra Götaland 3 1 1.8 Birgitta Lidbeck Västergården,Mellerud Municipality,Dalsland 3 2 3.6 Ann-Marie Forsberg Tängelsbol,Mellerud Municipality,Dalsland 3 1 1.8 Anders Adlerborn Köjkeberget,Vansbro Municipality,Dalarna 3 3 6.0 Erika Söderström Stentjärnåsen,Härjedalen Municipality,Jämtland 2 5 10.0 KajLamton Rätan-Digerberget,BergMunicipality,Jämtland 2 5 11.5 Thomas Dahl Vettåsen/Mårtensklack,Sandviken and Ockelbo Municipality,Gästrikland 2 10 23.0 Carola Strandberg Karstorp,Skara Municipality,Västra Götaland 3 3 6.0 Bo Strandberg Kilagården,Skara Municipality,Västra Götaland 3 3 6.0 Susanne Börjeson Järmunderöd,Munkedal Municipality,Västra Götaland 3 3 6.0 Jeanette Wallén Middagsberget,BergMunicipality,Jämtland 2 3 9.0 Lena Johanson Södervidinge,Kävlinge Municipality,Skåne 4 2 4.0 BennyOlsson Gunnarby,Uddevalla Municipality,Bohuslän 3 8 18.4 Rigmor Sköld Tommared,Laholm Municipality,Halland 4 6 13.8 Gun Karlsson Nyckeltorp,Skara Municipality,Västra Götaland 3 3 6.0 Louise Wingstrand Furulund,Kristianstad Municipality,Skåne 4 2 4.0 Mathias Aronsson Påboda,Torsås Municipality,Småland 4 1 2.0 Total 66 142.5	Electricity Region 4 Electricity Region 3 Electricity Region 2 Electricity Region 1

PROPERTY LIST 149

Wallenstam’s GRI reporting

Wallenstam applies Global Reporting Initiative, GRI Standards. The reporting follows the financial year and is published annually as part of the annual report. The latest GRI Report was published on March 19, 2020. This report describes how the Wallenstam Group has worked with sustainability issues during 2020. Wallenstam has defined the scope of the report as the areas referred to in the GRI index. A table is provided on the following pages of what GRI disclosures are reported and where information about the disclosures is found in Wallenstam’s reporting. This report has not been reviewed by an external party.

The contact person with regard to the reporting and its content is Sustainabilty Manager Karin Mizgalski, karin.mizgalski@wallenstam.se. Information is provided below on the disclosures that are not reported elsewhere in the annual report.

102-8: INFORMATION ON EMPLOYEES AND OTHER WORKERS

The average number of employees in 2020 amounted to 252. All of the Group’s employees are permanent employees, with the exception of 13 people who are probationary employees and 9 people who are employed on a temporary basis, for example in the form of work as a substitute. 8 people work part time, all of whom are permanent employees. Wallenstam had no significant variation in the number of employees during the year. Temporary employees are not reported, as Wallenstam uses temporary employees to a minor extent.

102-11: PRECAUTIONARY PRINCIPLE OR APPROACH

In many instances, Wallenstam acts in accordance with the precautionary approach, even though we do not use it as a concept in governance and strategies. For example, the precautionary approach is used in our work on identifying, analyzing and following up risks.

102-13: MEMBERSHIP OF ASSOCIATIONS

Representatives of Wallenstam are represented in the governing bodies of Avenyföreningen, Fastighetsägarna GFR, Fastighetsägarna Centrala Hisingen (FCH), (b)id Stigberget, Innerstaden Göteborg AB, Göteborg Citysamverkan ideell förening, Göteborg & Co, Mölnlycke Centrumförening and Johanneberg Science Park.

302-1: ENERGY CONSUMPTION WITHIN THE ORGANIZATION

		Unit	2018*	2019	2020	2021	2022	2023
	Fuel consumption
	Total fuel consumption from	MWh	521	496	146
	non-renewable sources Heatingoil Naturalgas	MWh MWh	379 142	353 143	146 -
	Total fuel consumption	MWh	-	-	116
	from renewable sources Biogas		-	-	116
	Energyconsumption Electricity**	MWh	41,280	37,889	37,074
	Heating	MWh	89,081	87,611	80,480
	District heating Oil	MWh MWh	88,560 379	87,115 353	80,218 146
	Naturalgas	MWh	142	143	-
	Biogas	MWh	-	-	116
	Cooling District cooling Total energy consumption,	MWh MWh MWh	557 557 49,983	425 425 47,395	259 259 42,719
	non-renewable
	Total energy consumption,	MWh	80,934	78,531	75,094
	renewable
	Total energyconsumptioni	MWh	130,917	125,925	117,813
	Heating per sq m	KWh	80.4	79.9	74.7
	climate-adjusted
	Own electricity production from renewable sources Windpower	MWh	337,880	367,246	416,696

201-1: DIRECT ECONOMIC VALUE GENERATED AND DISTRIBUTED

SEK million

SEK million
Economic valuegenerated
Revenues	2,844
Economic value distributed
Operatingcosts	–519
Employee wages,benefts andpensions	–209
Interestpayments toproviders of capital Payments togovernment(propertytax,VAT)	–264 –897
Dividend to shareholders Communityinvestments Total economic value distributed	–162 –18 –2,069
Economic value retained	775

302-3: ENERGY INTENSITY

		2018	2019	2020	2021	2022	2023
	kWh/per sq m	110	105	96
	Refers to energy use in Wallenstam’s property holdings, not climate-adjusted,				including	wind power,	district
	heating, district cooling,	oil and natural gas. Does not	include tenants’ electricity use.
	302-4: REDUCTION OF ENERGY CONSUMPTION*
		Unit	2019	2020	2021	2022	2023
	Total reduction	MWh	4,992	13,105
	Reduction electricity	MWh	3,390	4,206
	Reduction heating	MWh	1,470	8,601
	Reduction cooling	MWh	132	298

Where do the Wallenstam Group’s emissions arise?

==> picture [366 x 104] intentionally omitted <==

----- Start of picture text -----

SCOPE 1 SCOPE 2 SCOPE 3
Fossil-fuel combustion from Purchased energy for our Emissions from:
own properties, facilities and properties. • Purchased goods and services
vehicles. • Property management and construction
• Tenants’ energy consumption and waste
Own and Own Emissions Property District heating and Our business trips Transports to and Material and the Tenants’ electrical
leased boilers of refrig- electricity district cooling from our construc- construction subscriptions and
vehicles erants tion sites process waste
----- End of picture text -----

150 WALLENSTAM’S GRI REPORTING

GRI 305: GREENHOUSE GAS (GHG) EMISSIONS CO2E***

GRI 305: GREENHOUSE GAS	(GHG) EMISSIONS CO2E***	(GHG) EMISSIONS CO2E***	(GHG) EMISSIONS CO2E***
Absolute value stated in tons CO2	and intensity value stated in kg			CO2/sq m. We have expanded our reporting of CO2emissions this year to also include refrigerants,											business travel and
materials for construction projects.			2018*		2019			2020		2021		2022			2023
		Absolute		Intensity	Absolute	Intensity		Absolute	Intensity	Absolute	Intensity	Absolute		Intensity	Absolute	Intensity
Scope 1
305-1 DIRECT GHG EMISSIONS
Oil			102	0.086	94	0.079		39	0.032
Gas			30	0.026	29	0.024		5	0.004
Refrigerants			n/a	n/a	809	0.677		561	0.457
Business travel bycar			n/a	n/a	n/a		n/a	34	0.028
Total Scope 1			132	0.112	932	0.780		639	0.521
Scope 2
305-2 INDIRECT GHG EMISSIONS
Electricity – Market-based method
100% internally produced windpower			-	-	-		-	-	-
Electricity – Location-based method
Average emission factor for Swedish-produced		electricity	578	0.486	493	0.413		297	0.241
District heating			5,097	4.288	4,690	3.929		3,135	2.551
District cooling			-	-	-		-	-	-
Total Scope 2(market-based)		5,097		4.288	4,690	3.929		3,135	2.551
Scope 3
305-3 OTHER INDIRECT GHG EMISSIONS
Materials in constructionprojects			n/a	n/a	29,118		221	8,397	185
Business travel byair,train and taxi			n/a	n/a	n/a		n/a	8	0.006
Total Scope 3					29,118		221	8,405	185
305-5 REDUCTION OF GHG EMISSIONS
		Absolute		Reduction	Absolute	Reduction		Absolute	Reduction	Absolute Reduction		Absolute	Reduction		Absolute Reduction
		reduction		per sqm	reduction	per sqm		reduction	per sqm	reduction	per sqm	reduction		per sqm	reduction	per sqm
Scope 1			-	-	–799	–0.67		–507	–0.41
Scope 2			-	-	407	0.36		1,962	1.74
Scope 3****			n/a	n/a	-		-	20,713	36
401-1 NEW EMPLOYEE HIRES AND EMPLOYEE TURNOVER							406-1: INCIDENTS OF DISCRIMINATION AND CORRECTIVE ACTIONS TAKEN
New employees 2020							No incidents of discrimination were reported in 2020.
Number of		of whom			of whom in
Age persons		women/men		Gothenburg/Stockholm
Under 30years	11	6/5				6/5
30-50years	12	6/6				4/8
Over 50years	0	-				-
Total	23	12/11			10/13			* Base year 2018 – commences from start of the business plan 2019–2023.
								**The electricity item includes electricity consumption relating to heat pumps.
405-2 RATIO OF BASIC SALARY	AND REMUNERATION OF WOMEN TO MEN							*** All data	regarding CO2in this table is based on inputs from suppliers, which report
The ratio in this case describes the relationship between the agreed average salary of men and wo- men and is calculated by dividing women’s salary by men’s salary, and men’s salary by women’s salary.								according to prevailing accounting standards. As data for the actual impact in 2020 was not available during preparation of this reporting, the heating data is
		Women’s salary			Men’s salary			based to a minor extent on estimated values based on						the emission factors for the
IncludingGroupManagement,excludingCEO			88 %		114 %			year 2019.
ExcludingGroupManagement			88 %		114 %		**** As regards 2018, Scope 3 was not reported, of which a						decrease is expected from 2019.

GRI content index

GRI Standard	Disclosure	Page number Omission
General Disclosure	s
GRI 102: General disclosures 2016	102-1 Name of the organization	cover
	102-2 Activities,brands, products,and services	69
	102-3 Location of headquarters	69
	102-4 Location of operations	69
	102-5 Ownershipand legal form	78
	102-6 Markets served	45-50
	102-7 Scale of the organization	69,74-75
	102-8 Information on employees and other workers	42-44,150
	102-9 Supplychain	32-33
	102-10 Signifcant changes to the organization and its supplychain	Not applicable
	102-11 PrecautionaryPrinciple or approach	11,33,150
	102-12 External initiatives	29-35
	102-13 Membershipof associations	150
	102-14 Statement from senior decision-maker	9-11
	102-16 Values, principles, standards, and norms of behavior 102-18 Governance structure	29-35
		135-140
	102-40 List of stakeholdergroups	3,5,30
	102-41 Collective bargainingagreements	43
	102-42 Identifyingand selectingstakeholders	29-30
	102-43 Approach to stakeholder engagement	29-30
	102-44 Keytopics and concerns raised	30
	102-45 Entities included in the consolidated fnancial statements	78,123 All units are covered bythe GRI reporting.
	102-46 Defningreport content and topic Boundaries	29-30
	102-47 List of material topics	30
	102-48 Restatements of information	Not applicable
	102-49 Changes in reporting	Expanded reporting: disclosure 305-1,305-3 and 405-2
	102-50 Reporting period	150
	102-51 Date of most recent report	150
	102-52 Reportingcycle	150
	102-53 Contactpoint forquestions regardingthe report	150
	102-54 Claims of reportingin accordance with the GRI Standards	150
	102-55 GRI content index	150-152
	102-56 External assurance	150 Index continues on nextpage

WALLENSTAM’S GRI REPORTING 151

GRI content index, cont.

GRI Standard	Disclosure Page number Omission Agenda 2030 SDG ~~U~~
Wallenstam Materi	al Topics
Stable economy GRI 103: Manage- ment Approach 2016	103-1 Explanation of the material topic and its Boundary 1-4,24,29-32,38-40 103-2 The management approach and its components — ” —
GRI 201: Economic Performance 2016	103-3 Evaluation of the management approach — ” — 201-1 Direct economic value generated and distributed 66-67, 73-75, 84-85, 119, 150
Anti-corruption
GRI 103: Manage- ment Approach 2016	103-1 Explanation of the material topic and its Boundary 30-33,38,43 103-2 The management approach and its components — ” —
	103-3 Evaluation of the management approach —”—
GRI 205: Anti-	205-2 Communication and training about anti-corruption 31
corruption 2016 Sustainable materi	policies andprocedures als
GRI 103: Manage- ment Approach 2016	103-1 Explanation of the material topic and its Boundary 8,29-30,34,151 * 103-2 The management approach and its components —”—
	103-3 Evaluation of the management approach — ” —
Energyefciency GRI 103: Manage- ment Approach 2016	103-1 Explanation of the material topic and its Boundary 8,29-30,32-34,41 103-2 The management approach and its components — ” — 103-3 Evaluation of the management approach —”—
GRI 302: Energy 2016	302-1 Energyconsumption within the organization 150 302-3 Energyintensity 150 302-4 Reduction of energyconsumption 150
Greenhousegas e	missions
GRI 103: Manage- ment Approach 2016	103-1 Explanation of the material topic and its Boundary 8,29-30,32-34,41 103-2 The management approach and its components — ” —
GRI 305: Emissions 2016	103-3 Evaluation of the management approach — ” — 305-1 Direct(Scope 1)GHG emissions 151
	305-2 Indirect(Scope 2)GHG emissions 151 305-4 GHG emissions intensity 151,see table GRI 305
305-5 Reduction of GHG emissions 151 Waste management GRI 103: Manage- ment Approach 2016 103-1 Explanation of the material topic and its Boundary 8,29-30,34,151 * 103-2 The management approach and its components — ” — 103-3 Evaluation of the management approach — ” — Fair and decent employment
GRI 103: Manage- ment Approach 2016	103-1 Explanation of the material topic and its Boundary 7,30-32,37,42-44 103-2 The management approach and its components — ” — 103-3 Evaluation of the management approach — ” —
GRI 401: Employ- ment 2016 Occupational Healt	401-1 New employee hires and employee turnover 43, 150-151 h and Safety
GRI 103: Manage- ment Approach 2016	103-1 Explanation of the material topic and its Boundary 7,37,42-44 103-2 The management approach and its components — ” — 103-3 Evaluation of the management approach — ” —
Wallenstams Own Disclosure(WOD) Ct tif	WOD-1 Sick leave 42-43 i
usomer sasac GRI 103: Manage- ment Approach 2016	on 103-1 Explanation of the material topic and its Boundary 2-3,6,29-30,32,51-53 103-2 The management approach and its components — ” — 103-3 Evaluation of the management approach —”—
Wallenstams Own Disclosure(WOD) Diversitandend	WOD-2 Key conclusions of customer surveys 6, 43 er eualit
y g GRI 103: Manage- ment Approach 2016	qy 103-1 Explanation of the material topic and its Boundary 7,30,32,42-44
	103-2 The management approach and its components —”—
	103-3 Evaluation of the management approach —”—
GRI 405: Diversity and Equal Opportuni- ty2016 405-1 Diversityofgovernance bodies and employees 42-44,86,136 405-2 Ratio of basic salary and remuneration of women to men 151
Inclusive business GRI 103: Manage- ment Approach 2016	climate 103-1 Explanation of the material topic and its Boundary 7,30-32,42-44 103-2 The management approach and its components — ” —
GRI 406: Non- discrimination 2016	103-3 Evaluation of the management approach — ” — 406-1 Incidents of discrimination and corrective actions taken 151

*During the year, Wallenstam continued to map this focus area in order to define goals.

** UN Global Compact Principles Principle 3, Labour: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining. Principle 4, Labour: Businesses should uphold the elimination of all forms of forced and compulsory labour. Principle 6, Labour: Businesses should uphold the elimination of discrimination in respect of employment and occupation. Principle 7, Environment: Businesses should support a precautionary approach to environmental challenges. Principle 8, Environment: Businesses should undertake initiatives to promote greater environmental responsibility. Principle 9, Environment: Businesses should encourage the development and diffusion of environmentally friendly technologies. Principle 10, Anti-corruption: Businesses should work against corruption in all its forms, including extortion and bribery.

152 WALLENSTAM’S GRI REPORTING

Definitions

Annual General Meeting 2021

will be recorded in the share register on April 19, 2021. Such registration may be temporary (so-called voting rights registration) and requests for registration should be made to the nominee according to the nominee’s routines at such a time in advance determined by the nominee. Voting rights registrations which are made no later than April 21, 2021 are taken into account in the preparation of the share register.

Wallenstam’s Annual General Meeting 2021 will take place on Tuesday, April 27, 2021.

Due to the continued spread of Covid-19, the AGM will be held only by advance voting (postal voting). This means that shareholders will not be able to physically participate in the AGM venue and that the exercise of voting rights can only occur by shareholders voting in advance following the procedure prescribed in the notice convening the AGM on www.wallenstam.se/arsstamma. A pre-recorded statement by CEO Hans Wallenstam will be published on the website during the day on April 27, 2021.

Advance voting

For advance voting, a special form shall be used. The form is available on www.wallenstam.se/arsstamma. The advance voting form is valid as registration for the AGM.

If the shareholder votes in advance by proxy, a power of attorney must be attached to the form. If the shareholder is a legal entity, the certificate of registration or other legitimacy papers must be attached to the form.

Registration

Shareholders who, by advance voting, wish to participate in the AGM must be listed as shareholders in the share register prepared by Euroclear Sweden AB showing the state of affairs on April 19, 2021, and must also notify the company of their intention to participate in the AGM by casting their advance vote according to the instructions under the heading Advance voting in the notice convening the AGM and on www.wallenstam.se/arsstamma so that the advanced vote is received by Euroclear Sweden AB no later than April 26, 2021. Please note that registration to the AGM can only take place by advance voting.

Matters on the AGM

The AGM considers the matters which it must address according to the Articles of Association as well as additional matters described in the notice convening the AGM.

The Board proposes that the dividend be spread over two

payment dates. The record day for the first payment is proposed to be April 29, 2021 and November 1, 2021 for the second payment. If the AGM resolves in accordance with the proposal, Euroclear Sweden AB is expected to execute the first payment on May 4, 2021 and the second payment on November 4, 2021.

In order to have the right to participate in the AGM, a shareholder whose shares are held with a nominee, must, in addition to registering for the AGM, arrange for registration of the shares in his/her own name so that the shareholder

Glossary

Yield requirement

Swap agreement

Renewable energy

Swaps are financial instruments that entail an exchange of cash flow between two parties on an underlying nominal amount. An interest rate swap is an example of an agreement where an operator lending at fixed interest rates (e.g. fixed for five years) may wish to swap the interest flow with another operator lending at variable rates.

Energy that comes from renewable sources such as wind power, hydroelectric power and bio-fuels.

The yield an owner demands for an investment with due consideration for how risky the investment is.

GRI

Beta value

Global Reporting Initiative, a framework for recording and reporting sustainability information. GRI provides guidelines for the content of sustainability reports, how they should be prepared and the disclosures that should be reported.

A statistical measurement that describes a share’s risk. A beta value greater than 1.0 means that the share’s yield changes more than its comparative index and the share is deemed to have a high risk. Conversely, the share is deemed to have a low risk in the case of a beta value less than 1.0.

Vacancy rate

Unlet floor space in relation to total floor space.

Volatility

Covenant

A measurement of how much a price of something varies over a given period.

A contract between a lender and a borrower where the borrower guarantees to fulfil certain key ratios, such as a given equity/assets ratio, as a condition of the loan.

Derivative instruments

A financial instrument whose value is related to an underlying asset or obligation. Used to create a hedge against undesirable price trends in the underlying asset. Examples of normal derivative instruments are futures and swap agreements.

Heating consumption, climate-adjusted Consumption is adjusted during a normal year with regard to temperature, wind and precipitation.

Standard deviation

A statistical measurement that describes the share’s volatility in relation to the share’s average value.

For additional clarifications, refer to www.wallenstam.se

Renewable energy certificates

The renewable energy certificate system is based on the provision of certificates to the producers of renewable electricity. Each MWh (megawat hour) equals one certificate. The sale of certificates is intended to provide producers with revenue in addition to the revenue from electricity sales.

Synthetic options scheme

A share-related options programme aimed at employees. Synthetic options provide the holder with the right to a final settlement in cash at a given point in time based on the current share price.

Share yield

The proposed dividend as a percentage of the share price at the end of the period.

Share total yield

The share price trend during the year including distributed dividend as a percentage of the share price at the start of the period.

The number of shares

The number of registered shares at any given time. Number of shares outstanding: the number of registered shares less repurchased own shares at any given time. Average number of shares: weighted average number of shares outstanding at any given time.

Loan-to-value ratio

Interest-bearing liabilities and lease liability less cash and cash equivalents in relation to the Group’s investments in properties, development properties and wind power at the end of the period.

Residential property Property, which predominantly consists of residential space.

Market capitalization

Share price multiplied by the number of registered shares on the closing day.

Net operating income Rental income less operating and maintenance expenses, and property tax.

Development properties Refer to properties constructed with the intention of being sold after completion.

Rental value*

Rental income and the estimated market rent for vacant space.

Cash flow for the period in relation to the average number of shares outstanding.

per share Cash flow from operating activities for the period in relation to the average number of shares outstanding.

Commercial property Property, which predominantly consists of commercial space.

Average number of employees

The total number of hours worked during the year divided by normal annual working hours.

P/E ratio

Share price at the end of the period in relation to profit after tax for the average number of shares over the latest rolling 12-month period.

Earnings per share after tax Profit after tax in relation to the average number of outstanding shares.

Return on equity

calculated on a rolling 12-month basis. See page 66.

Return on total capital Profit before tax with reversal of interest

expenses and early redeemed derivatives for the latest rolling 12-month period in relation to average total capital employed. See page 66.

Interest coverage ratio

impairment charges with reversal of net financial items and early redeemed interest rate derivatives for the latest rolling 12-month period in relation to net financial items and early redeemed interest rate derivatives for the latest rolling 12-month period.

Public use property

Property, which is predominantly used by tax funded activities and is specifically adapted for community services.

Average interest

Interest expenses for the period including profit or loss on swap agreements realized during the period in relation to interestbearing liabilities.

Equity/assets ratio

Equity in relation to total capital employed at the end of the period.

Net asset value

Equity with the addition of deferred tax liabilities.

Net asset value per share

The Group’s net asset value in relation to the number of outstanding shares at the end of the period.

Occupancy rate – lettable area Let floor space in relation to total floor space.

Changes in value, investment properties

Gains or losses from sales of investment properties during the period less expenses and the assessed market value of the properties and gains or losses from the change in the assessed market value of investment properties compared to the previous reporting period. See page 67.

Changes in value, New construction: The increase in value is gradually recognized during the construction of the property until the first year the property is taken into operation. Change in value new construction recognizes the difference between the cost of construction of a new rental apartment and the value it has on completion. Change in value Other: Refers to changes in the value of investment properties, which have been in operation for one calendar year or more.

Surrender rate

Proportion of leases extended in relation to the proportion of cancellable leases.

Surplus ratio

Net operating income as a percentage of rental income.

For further information, please refer to: www.wallenstam.se/glossary

* Operational key ratios, are not considered alternative performance measures according to ESMA’s guidelines. See page 66.

153 ANNUAL GENERAL MEETING 2021/GLOSSARY

CALENDAR

Annual General Meeting Interim report I Interim report II Interim report III

April 27, 2021 April 27, 2021 July 8, 2021 October 22, 2021

Information regarding Wallenstam’s business operations, financial reporting and press releases can be found at www.wallenstam.se.

Wallenstam AB (publ) identity no. 556072-1523 info@wallenstam.se www.wallenstam.se Telephone +46 031 20 00 00

Gothenburg: SE-401 84 Gothenburg Visiting address Kungsportsavenyen 2

Stockholm: Box 19531, SE-104 32 Stockholm Visiting address Birger Jarlsgatan 64

Photo pages 5, 24–25, 26–27 Ingemar Edfalk Photo pages 6, 7, 18 left, 19 bottom left, 19 bottom right, 36, 40–41, 42 , 50 Carolin Freiholtz/Omelettfoto Photo pages 9, 13, 14–17, 22, 46, 47, 61 Dan Holmqvist Photo page 19 top Emelie Sundqvist Photo page 21 Nicklas Eliasson Photo page 35 top Astrakan/Scandinav Photo page 35 bottom Anders Hirv/Human Bridge Photo page 49 bottom Henrik Nero Photo page 52 Polestar Photo pages 54, 56–57 Ulf Celander Visualization images: pages 8, 59 Liljewall Arkitekter pages 60–61, 62–63 Zynka Visual Unattributed photos/images are Wallenstam’s own.

Production: Newsroom Translation: David Murphy, Word of Mouth Repro and printing: Billes Tryckeri Printed on: cover Amber Graphic 300 g, insert Amber Graphic 130 g.

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