Sveafastigheter Ab · OMXSTO:SVEAF
Sveafastigheter Ab — Debt Investor Presentation (June 2024)
106 slides from Sveafastigheter Ab's debt investor presentation, Jun 13, 2024
Slide 1: Investor Presentation
STRICTLY PRIVATE AND CONFIDENTIAL Investor Presentation Sveafastigheter Sr. Unsecured Bond offering and SBB Exchange Offer June 2024
Slide 2: Disclaimer (I/II)
Disclaimer (I/II) Background This investor presentation (this "Presentation") has been produced by Sveafastigheter AB (publ) (the "Issuer", and together with its direct and indirect subsidiaries from time to time, the "Group") solely for use in connection with (i) the contemplated EUR and SEK offeri
Slide 3: Disclaimer (II/II)
Disclaimer (II/II) Restrictions in the United States This Presentation does not constitute or form part of an offer or solicitation to purchase or subscribe for securities in the United States. The Bonds have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the
Slide 4: Agenda
STRICTLY PRIVATE AND CONFIDENTIAL AGENDA 1. Transaction overview 2. Sveafastigheter at a glance 3. Current portfolio 4. Market overview 5. Property management 6. New constructions 7. Sustainability 8. Financial overview 9. Appendix STRICTLY PRIVATE AND CONFIDENTIAL
Slide 5: Transaction overview
STRICTLY PRIVATE AND CONFIDENTIAL Transaction overview STRICTLY PRIVATE AND CONFIDENTIAL
Slide 6: Transaction overview
1 Transaction overview 2 3 4 5 6 7 8 9 Transaction overview Background Contemplated structure, cap table and indicative timeline ▪ Samhällsbyggnadsbolaget (”SBB”) has conducted a strategic review during the last year and as part of this, SBB is in the process of consolidating all of its residential
Slide 7: Summary of key terms
1 Transaction overview 2 3 4 5 6 7 8 9 Summary of key terms High level Sveafastigheter bond terms Summary Unmodified Dutch Auction - Exchange Offer Terms Status: Senior unsecured Exchange Offer for notes issued by SBB for new notes issued by Structure: Sveafastigheter Documentation: Standalone SEK ~
Slide 8: Sveafastigheter at a glance
STRICTLY PRIVATE AND CONFIDENTIAL Sveafastigheter at a glance 8 STRICTLY PRIVATE AND CONFIDENTIAL
Slide 9: We are creating a pure-play residential company with ~14,200 apartments
1 2 Sveafastigheter at a glance 3 4 5 6 7 8 9 We are creating a pure-play residential company with ~14,200 apartments across 237 properties The separation is all about focus Sveafastigheter’s properties are strategically located… …with large development potential ▪ Strategic and operational focus –
Slide 10: A sizable project portfolio in prime locations
1 2 Sveafastigheter at a glance 3 4 5 6 7 8 9 A sizable project portfolio in prime locations, focused on Stockholm - Mälardalen and University cities Ongoing development Project development Overlap between current portfolio… …and new constructions 94% ~100% Metropolitan regions & Stockholm - Mälarda
Slide 11: Brief history of Sveafastigheter
1 2 Sveafastigheter at a glance 3 4 5 6 7 8 9 Brief history of Sveafastigheter 2024 2014 2016 2020 2021 Sveafastigheter was Samhällsbyggnads- SBB acquires the SBB acquires 70% of formed by separating Sveafastigheter residential assets from bolaget i Norden AB housing developer the shares in Unobo Bo
Slide 12: Our integrated business model enables us to capitalise on market dynamics
1 2 Sveafastigheter at a glance 3 4 5 6 7 8 9 Our integrated business model enables us to capitalise on market dynamics Sveafastigheter will be competitive compared to the market due to size, stability and know-how as an appreciated counterpart for municipalities Property management Apartment upgrad
Slide 13: Increased focus combined with strategic initiatives will boost profitability
1 2 Sveafastigheter at a glance 3 4 5 6 7 8 9 Increased focus combined with strategic initiatives will boost profitability… Operational focus Possibility to reduce property admin costs through a fully integrated organisation Occupancy Increased occupancy from a more focused organisation with systema
Slide 14: …and enable a sound financial profile
1 2 3 4 5 6 7 8 Financial overview 9 …and enable a sound financial profile Simple structure with strong balance sheet and clear way to deliver on yield targets Simple structure Strong balance sheet Growth enabled by CF Tangible targets • No JVs in the structure, resulting in • Interest easily covere
Slide 15: Highly experienced management team
1 2 Sveafastigheter at a glance 3 4 5 6 7 8 9 Highly experienced management team Erik Hävermark Martina Lous-Christensen Ola Svensson Görel Hällqvist Lovisa Sörensson Nina Björstrand CEO CFO Head of Property Mgmt. Head of Project Dev. Head of Transactions Head of Sustainability Experience: 20+ years
Slide 16: Key credit highlights
1 Transaction overview 2 3 4 5 6 7 8 9 Key credit highlights ~80% 1. One of Sweden’s largest residential companies with a high demand driven by nation-wide structural shortage and limited building starts of Sveafastigheter’s municipalities reported a housing deficit in 20231) 2. Focus on attractive
Slide 17: Current portfolio
STRICTLY PRIVATE AND CONFIDENTIAL Current portfolio 17 STRICTLY PRIVATE AND CONFIDENTIAL
Slide 18: One of Sweden's leading pure-play residential companies
1 2 3 Company overview – Current portfolio 4 5 6 7 8 9 We are one of Sweden’s leading pure-play residential companies with a long-term ownership perspective and aim to outperform the market Sizable residential portfolio Purely focused on residential properties 100% residential properties SEK 23.7bn
Slide 19: Strong presence in University cities
1 2 3 Company overview – Current portfolio 4 5 6 7 8 9 Sveafastigheter has a strong presence in University cities, with strong demographics Overview of University cities Key figures University cities Municipalities Property value (SEKm) # of apartments Remaining Sveafastigheter Linköping 2,611 1,535
Slide 20: Sizeable Stockholm - Mälardalen portfolio
1 2 3 Company overview – Current portfolio 4 5 6 7 8 9 Sizeable Stockholm - Mälardalen portfolio located in proximity to key labour markets with highly attractive underlying macro trends Overview of Stockholm - Mälardalen region Key figures Stockholm - Mälardalen Municipalities Property value (SEKm)
Slide 21: Malmö - Öresund portfolio
1 2 3 Company overview – Current portfolio 4 5 6 7 8 9 Malmö - Öresund portfolio distributed across municipalities with connections to key labour markets in southern Sweden and Denmark Overview of Malmö - Öresund region Key figures Malmö - Öresund Municipalities Property value (SEKm) # of apartments
Slide 22: Greater Gothenburg
1 2 3 Company overview – Current portfolio 4 5 6 7 8 9 Greater Gothenburg partly connected to key labour markets with prosperous industries and imports Overview of Greater Gothenburg region Key figures Greater Gothenburg Municipalities Property value (SEKm) # of apartments Remaining Sveafastigheter
Slide 23: Overview of properties located in other regions
1 2 3 Company overview – Current portfolio 4 5 6 7 8 9 Overview of properties located in other regions Geographical overview of other properties in Sveafastigheter’s portfolio Key figures Other Municipalities Property value (SEKm) # of apartments Remaining Sveafastigheter 1 Avesta 437 475 6% 2 Ulric
Slide 24: Market overview
STRICTLY PRIVATE AND CONFIDENTIAL Market overview 24 STRICTLY PRIVATE AND CONFIDENTIAL
Slide 25: Our geographic presence will benefit from strong fundamentals
1 2 3 4 Market overview 5 6 7 8 9 Our geographic presence will benefit from strong fundamentals and existing infrastructure Geographic presence in growing regions with solid fundamentals Our portfolio is located in or close to key labour markets Location Population growth Income growth Employment gr
Slide 26: We operate in a rent-controlled market
1 2 3 4 Market overview 5 6 7 8 9 We operate in a rent-controlled market characterised by stability and predictability Illustrative regulation overview Key market characteristics Tenant association Rent increase potential to match broader market Low risk with limited vacancy and churn ▪ Swedish tena
Slide 27: A structural demand with strong underlying fundamentals
1 2 3 4 Market overview 5 6 7 8 9 A structural demand with strong underlying fundamentals… Structural and growing housing deficit… …and in our regions, there is no surplus… …and there is a market shift towards rentals % of municipalities with a housing deficit1) Housing deficit in Sveafastigheter’s
Slide 28: Lack of building starts combined with a growing population
1 2 3 4 Market overview 5 6 7 8 9 …further fuelled by a lack of building starts combined with a growing population Accumulated housing deficit… …that is expected to continue… …creates structural demand for rentals Residential building starts (thousands)1) Residential building starts Estimated starts
Slide 29: With a structural deficit, rent increases have outpaced CPI
1 2 3 4 Market overview 5 6 7 8 9 With a structural deficit, rent increases have outpaced CPI Stable national population growth during the last 10 years Rents have outgrown inflation and never decreased3) Population (indexed to 100 in 2013)1) Forecast Indexed to 100 in 19911) Sveafastigheter’s regio
Slide 30: Tenants are able to pay higher rents
1 2 3 4 Market overview 5 6 7 8 9 Sveafastigheter operates in regions where tenants are able to pay higher rents Three main alternatives to determine rent revels Presumption rents showcases tenant's ability to pay higher rents ▪1 The value-of-use method (~81% of Sveafastigheter’s negotiations1)) SEK
Slide 31: Valuations are far below the cost of new constructions
1 2 3 4 Market overview 5 6 7 8 9 Valuations are far below the cost of new constructions – creating an opportunity for higher rents and value uplift on existing properties Building costs outpacing inflation by ~40% Low valuation compared to market and new builds Building price index (apartment build
Slide 32: High correlation between yields and 3 months STIBOR
1 2 3 4 Market overview 5 6 7 8 9 High correlation between yields and 3 months STIBOR implying that we will benefit from the shift in underlying interest rates Commentary Historical yield and 3 months STIBOR correlation implies positive outlook for valuation exit yields Sveafastigheter’s valuation e
Slide 33: Property management
STRICTLY PRIVATE AND CONFIDENTIAL Property management 33 STRICTLY PRIVATE AND CONFIDENTIAL
Slide 34: Decentralised in-house property management
1 2 3 4 5 Property management 6 7 8 9 Decentralised in-house property management at the core of our operations Property management overview Organisational structure Head of Property Management Ola Svensson 21 local offices Head of Rent Negotiations Head of Technical Head of Projects Digitalisation S
Slide 35: Clear focus on increasing economic occupancy
1 2 3 4 5 Property management 6 7 8 9 Clear focus on increasing economic occupancy Potential for increased occupancy Focus areas and key drivers for improved occupancy rate Economic vacancy (%)1) Increased focus Active property management ▪ Enhanced focus as a pure-play ▪ Active property management
Slide 36: Upgrades expected to contribute to growing property values
1 2 3 4 5 Property management 6 7 8 9 Upgrades expected to contribute to growing property values and cash flows Potential to increase the average rent per sq.m. ~3,800 of the apartments are eligible4) for upgrade Average rent1) per sq.m. (SEK) Eligible4) Our organisation has managed to upgrade Not e
Slide 37: Upgraded the property Arvid 1 in Kävlinge
1 2 3 4 5 Property management 6 7 8 9 Sveafastigheter successfully upgraded the property Arvid 1 in Kävlinge Arvid 1 case study overview SEK (000’s) Initial rent Rent increase Maintenance savings Pre upgrade Yield on cost: ~6.3% 1 60 0 Return on investment: ~70% 1 367 1 40 0 23 SEK ~6,300 investment
Slide 38: Rents can be increased through value-of-use tests
1 2 3 4 5 Property management 6 7 8 9 Rents can be increased without investments through value-of-use tests Value-of-use tests to increase rents... ...with opportunities in a wide range of municipalities # of months per Process (parallel workstreams) workstream ~3,800 Desktop evaluation 0-1 apartmen
Slide 39: New constructions
STRICTLY PRIVATE AND CONFIDENTIAL New constructions 39 STRICTLY PRIVATE AND CONFIDENTIAL
Slide 40: Scalable in-house project development team
1 2 3 4 5 6 New constructions 7 8 9 Scalable in-house project development team and organisation already in place Key enablers in place to build in attractive micro-locations Structured processes and platform for new constructions 1 Acquisitions & land allocations In-house capabilities Local communit
Slide 41: Strong track-record of project development
1 2 3 4 5 6 New constructions 7 8 9 Strong track-record of project development with costs historically in line with budget We have over time delivered high accuracy1)… …due to our established and cost-efficient process SEK 149m ▪ Sveafastigheter has over time limited the impact of +16% 5.0% price fl
Slide 42: Ongoing development contribution to property value
1 2 3 4 5 6 New constructions 7 8 9 Ongoing development is estimated to contribute with ~SEK 2bn in property value and ~SEK 104m in additional run-rate rental value at completion We have a substantial project portfolio… …with significant near-term potential Projects to be completed in 2024 - 2025 (S
Slide 43: Ongoing projects finalised 2024 - 2025
1 2 3 4 5 6 New constructions 7 8 9 Ongoing projects finalised 2024 - 2025 Investments Estimated construction phase Size Estimated rental value1) (incl. land) Project Region Acquired/developed Residential Start Completion # of apartments SEKm SEK/sq.m. Total, SEKm Accrued, SEKm area, sq.m. Kasernhöj
Slide 44: Sustainability
STRICTLY PRIVATE AND CONFIDENTIAL Sustainability 44 STRICTLY PRIVATE AND CONFIDENTIAL
Slide 45: Driving sustainability across our business
1 2 3 4 5 6 7 Sustainability 8 9 Driving sustainability across our business and value chain Our sustainability work is an integrated part of our business model and is captured by 6 wide-ranging focus areas Environmental Social Governance Circularity Health, Safe, diverse Climate and safety and Busin
Slide 46: Climate Transition Plan
1 2 3 4 5 6 7 Sustainability 8 9 Climate Transition Plan – to reach zero emissions in 2030 A climate neutral company by 2030 Emissions, property management 20231 Key factors driving the transition 9% Scope 1 ✓ Energy efficiency investments 36% ✓ Sustainable building of new properties Scope 2 2,893 t
Slide 47: We work to reduce environmental impact
1 2 3 4 5 6 7 Sustainability 8 9 We work to reduce environmental impact in everything we do Key initiatives to realise our climate target and minimise the risks involved 1 Energy efficiency ensured by Technical Management Experts 3 All properties will go through annual climate risk analysis The anal
Slide 48: Social value creation is prioritised
1 2 3 4 5 6 7 Sustainability 8 9 Social value creation is prioritised in all our neighbourhoods and communities We create safe and attractive communities and promote an inclusive environment Our social sustainability work builds on two pillars… …supported by Social Sustainability Assessments for new
Slide 49: Financial overview
STRICTLY PRIVATE AND CONFIDENTIAL Financial overview 49 STRICTLY PRIVATE AND CONFIDENTIAL
Slide 50: Q1 2024 highlights and summary
1 2 3 4 5 6 7 8 Financial overview 9 Q1 2024 highlights and summary The quarter in summary Rental income and rental income growth1 SEKm ▪ Overall good quarter showcasing that we deliver on our strategy, despite challenging weather conditions and operating as separated entities rather than the combin
Slide 51: Profit and loss overview
1 2 3 4 5 6 7 8 Financial overview 9 Profit and loss overview indicates solid earnings that are expected to improve in 2024 EBITDA break-down, LTM Q1 2024 stand-alone pro forma1 Profit and loss overview – PF stand-alone1 Excluding external property management (SEKm) SEKm 2023 LTM Q1’24 Pro forma fig
Slide 52: Earnings capacity bridge
1 2 3 4 5 6 7 8 Financial overview 9 Earnings capacity bridge Commentary Stand-alone pro forma financials 2023 vs. Earnings capacity Q1 2024 – EBITDA SEKm Increased income ▪1 Primarily related to agreed rent increases of 5.0% on standing buildings, in addition: 1 2 3 - Full-year effect from acquired
Slide 53: Preliminary earnings capacity
1 2 3 4 5 6 7 8 Financial overview 9 Preliminary earnings capacity Commentary Preliminary earnings capacity as per 31 March 2024 Earnings capacity build-up SEKm Investment properties Ongoing construction Total ▪ Based on the investment property portfolio Rental value 1,461 104 1,566 and ongoing cons
Slide 54: Capitalisation in line with investment grade rated market players
1 2 3 4 5 6 7 8 Financial overview 9 Capitalisation in line with investment grade rated market players Composition of interest-bearing debt prior to bond exchange offer LTV and ICR 0% Swaps of SEK 6bn with fixed swap to 2.8%-3.0% interest rate 43% 50% 1.7x LTV LTV ICR3 (total properties)2 (investmen
Slide 55: Property portfolio build-up Q4'23 vs. Q1'24
1 2 3 4 5 6 7 8 Financial overview 9 Sveafastigheter’s property portfolio build-up Q4’23 vs. Q1’24 Property portfolio build-up Q4’23 vs. Q1’24 SEKbn Investment properties ▪ Value changes were driven by an increased 28.1 27,7 exit valuation yield from 4.1% to 4.3%, 0,0 0,1 although this was somewhat
Slide 56: Capex overview
1 2 3 4 5 6 7 8 Financial overview 9 Capex overview Commentary Historical investments1 Reason for investments, 2021-LTM Q1 ‘241 Expected yield on ▪ Solid investment levels historically both cost going forward through maintenance costs in the P&L and capitalised investments 5% 12% 19% 5% >3% 1,2101 2
Slide 57: Balance sheet and exit yields
1 2 3 4 5 6 7 8 Financial overview 9 Balance sheet and exit yields Balance sheet – Q1 2024 Valuation exit yield1 SEKbn % 52% 4,3% 4,1% Equity ratio 28.8 28.8 3,5% 3,1% 2,7 Exit yields have increased 1,3 by 1.2p.p since 2021 Cash 12,2 Current assets 2021 2022 2023 Q1'24 Current liabilities Financial
Slide 58: Appendix
STRICTLY PRIVATE AND CONFIDENTIAL Appendix STRICTLY PRIVATE AND CONFIDENTIAL
Slide 59: Experienced organisation in place with an existing platform
1 2 3 4 5 6 7 8 9 Appendix – Sveafastigheter at a glance Experienced organisation in place with an existing platform Organisational overview1) Sveafastigheter’s core values CEO 158 Long-term Available Innovative “Helt, Rent, FTEs2) - platform already in place Snyggt och Business support 4 people Bus
Slide 60: Experienced Board of Directors
1 2 3 4 5 6 7 8 9 Appendix – Sveafastigheter at a glance Experienced Board of Directors with complementary and relevant backgrounds Board of Directors Peter Wågström Christer Nerlich Jenny Wärme Per O Dahlstedt Sanja Batljan Peder Johnson Chairman of the Board Board member Board member Board member
Slide 61: Selected investment properties
1 2 3 4 5 6 7 8 9 Appendix – Current portfolio Selected investment properties Focken 1 & 2, Västerås Vårholmen 6, Stockholm Önskemålet 7, Jönköping Spårvagnen 1, Helsingborg # of apartments: 196 # of apartments: 79 # of apartments: 88 # of apartments: 188 Lettable area: 12,756 sq.m. Lettable area: 5
Slide 62: Selected ongoing development and project development
1 2 3 4 5 6 7 8 9 Appendix – Current portfolio Selected ongoing development and project development Näckrosen / Haninge Jullen / Skellefteå Hedvig / Stockholm Amaryllis1) / Tyresö # of apartments: 161 # of apartments: 180 # of apartments: 147 # of apartments: 260 Construction start: 2022 Constructio
Slide 63: Current portfolio deep-dive (University cities)
1 2 3 4 5 6 7 8 9 Appendix – Current portfolio Current portfolio deep-dive (University cities) Property value Municipality # of apartments sq.m. SEKm SEK/sq.m. Linköping 1,535 108,599 2,611 24,043 Skellefteå 1,362 99,044 1,906 19,242 Falun 724 47,028 824 17,513 Umeå 482 27,069 678 25,040 Karlskrona
Slide 64: Current portfolio deep-dive (Stockholm - Mälardalen)
1 2 3 4 5 6 7 8 9 Appendix – Current portfolio Current portfolio deep-dive (Stockholm - Mälardalen) Property value Municipality # of apartments sq.m. SEKm SEK/sq.m. Västerås 708 41,200 1,758 42,680 Stockholm 431 35,478 1,139 32,103 Södertälje 440 24,761 823 33,221 Sundbyberg 199 19,548 784 40,106 Ha
Slide 65: Current portfolio deep-dive (Malmö - Öresund)
1 2 3 4 5 6 7 8 9 Appendix – Current portfolio Current portfolio deep-dive (Malmö - Öresund) Property value Municipality # of apartments sq.m. SEKm SEK/sq.m. Helsingborg 942 64,813 1,464 22,588 Höganäs 744 57,363 1,131 19,713 Kävlinge 407 26,680 657 24,614 Landskrona 366 28,198 514 18,221 Trelleborg
Slide 66: Current portfolio deep-dive (Greater Gothenburg)
1 2 3 4 5 6 7 8 9 Appendix – Current portfolio Current portfolio deep-dive (Greater Gothenburg) Property value Municipality # of apartments sq.m. SEKm SEK/sq.m. Borås 506 39,283 967 24,616 Trollhättan 213 12,038 275 22,845 Gothenburg 95 6,372 137 21,500 Stenungsund 68 3,252 110 33,823 Greater Gothen
Slide 67: Current portfolio deep-dive (Other)
1 2 3 4 5 6 7 8 9 Appendix – Current portfolio Current portfolio deep-dive (Other) Property value Municipality # of apartments sq.m. SEKm SEK/sq.m. Avesta 475 31,699 437 13,798 Ulricehamn 142 9,200 270 29,339 Söderhamn 200 17,093 255 14,930 Olofström 210 13,749 177 12,874 Oskarshamn 143 10,116 136 1
Slide 68: Project development pipeline (1/3)
1 2 3 4 5 6 7 8 9 Appendix – Current portfolio Project development pipeline (1/3) Total investment Estimated construction dates Size Est. rental value2) (incl. land) Project name Region Phase1) Residential area, Start Completion # of apartments SEKm SEKm ~sq.m. Krongatan/Moröhöjden University cities
Slide 69: Project development pipeline (2/3)
1 2 3 4 5 6 7 8 9 Appendix – Current portfolio Project development pipeline (2/3) Total investment Estimated construction dates Size Est. rental value2) (incl. land) Project name Region Phase1) Residential area, Start Completion # of apartments SEKm SEKm ~sq.m. Östra Sala backe 3 Stockholm - Mälarda
Slide 70: Project development pipeline (3/3)
1 2 3 4 5 6 7 8 9 Appendix – Current portfolio Project development pipeline (3/3) Total investment Estimated construction dates Size Est. rental value2) (incl. land) Project name Region Phase1) Residential area, Start Completion # of apartments SEKm SEKm ~sq.m. Gamla Landsvägen Stockholm – Mälardale
Slide 71: A thorough and proven upgrade process
1 2 3 4 5 6 7 8 9 Appendix – Property management A thorough and proven upgrade process aimed at ensuring high-quality investments Standardised upgrade process ensures quick turnaround and enables high yield on cost Analysis of upgrade Lease termination by Evaluation of upgrade Upgrade after tenant A
Slide 72: Development processes emphasise energy efficiency
1 2 3 4 5 6 7 8 9 Appendix – Property management Development processes emphasise energy efficiency and impact improvement Established routine to identify energy efficiency upgrade potential Strong history of climate-smart upgrades Investment Change Property 2022 (kWh) 2023 (kWh) Change (%) (SEK) (kW
Slide 73: History of realising value through building rights
1 2 3 4 5 6 7 8 9 Appendix – New constructions Sveafastigheter has a history of realising value through the creation of building rights Sveafastigheter has solid track record within new constructions… …and has the means to optimise and replenish the portfolio ▪ Sveafastigheter has a history of recei
Slide 74: Our current portfolio is a testimony to our land acquisition process
1 2 3 4 5 6 7 8 9 Appendix – New constructions Our current portfolio is a testimony to our land acquisition process A selection of our ongoing development and project development Majority of new constructions exists in Stockholm - Mälardalen New constructions split by # of apartments1) 4% 12% Sågkli
Slide 75: In-house project management organisation
1 2 3 4 5 6 7 8 9 Appendix – New constructions In-house project management organisation ensures efficient and thorough operations Overview of Sveafastigheter’s efficient and successful project process Completion Property management follows-up with the project team regarding feedback for upcoming con
Slide 76: In-house project development team with cost reduction focus
1 2 3 4 5 6 7 8 9 Appendix – New constructions In-house project development team with cost reduction as a core focus has led to… Competent and loyal project development team… …resulting in foreseeable building costs from day 1 Head of Project Development 10 - 15% Görel Hällqvist 85 - 90% since 2016
Slide 77: Stockholm - Mälardalen focused project development portfolio
1 2 3 4 5 6 7 8 9 Appendix – New constructions Stockholm - Mälardalen focused project development portfolio Sizable Stockholm - Mälardalen exposure… …representing the majority of our projects... …with ~6,260 potential new apartments3) Average year of potential completion Potential completion (# of a
Slide 78: Geographical overlap between current portfolio and new constructions
1 2 3 4 5 6 7 8 9 Appendix – New constructions Geographical overlap between the current portfolio and new constructions will lead to a stronger Stockholm and University city exposure Geographical overview of current portfolio Geographical overview of new constructions % of total property value1) % o
Slide 79: Project pipeline mainly consists of projects in a later stage
1 2 3 4 5 6 7 8 9 Appendix – New constructions Sveafastigheter’s project pipeline mainly consists of projects in a later stage Project development portfolio classified by project phase # of projects Value at completion (SEKbn)1) n.a. 1 10 6 26 24 2 1 Phase 1 – Project concepts Phase 2 – Prior to a d
Slide 80: Environmental sustainability is fundamental to project development
1 2 3 4 5 6 7 8 9 Appendix – New constructions Environmental sustainability is fundamental to our project development Proven track-record of minimising environmental impact in new projects Climate measures integrated in the construction of new buildings Innovative capabilities within energy efficien
Slide 81: An innovative project team to find new ways of working
1 2 3 4 5 6 7 8 9 Appendix – New constructions We have an innovative project team to find new ways of working Innovative capabilities that aims to find new solutions ▪ We continuously challenge our methods to improve our project development ▪ To exemplify, we are planning to build 2 houses on adjoin
Slide 82: Case study Neptun
1 2 3 4 5 6 7 8 9 Appendix – New constructions Case study Neptun: Illustration of Sveafastigheter’s construction capabilities “Building of the future” in 2019 by Fastighetsmässan 2018 212 construction year apartments #1 large plus energy-house in Sweden “Miljöbyggnad Guld” 1,210 sq.m. of rooftop sol
Slide 83: Case study Näckrosen
1 2 3 4 5 6 7 8 9 Appendix – New constructions Case study Näckrosen: Illustration of Sveafastigheter’s construction capabilities 2023 367 construction year apartments 40% lower CO2 emissions through… ▪ Optimised and standardised construction ▪ Recycled reinforcement bars ▪ Climate-enhanced concrete
Slide 84: Health and safety throughout our operations
1 2 3 4 5 6 7 8 9 Appendix – Sustainability Health and safety throughout our operations are essentials Health, safety and human rights Processes are in place to ensure well-being at the workplace Incidents and accidents should be immediately reported to project manager and registered Zero serious pe
Slide 85: Governance model
1 2 3 4 5 6 7 8 9 Appendix – Sustainability Governance model ensures we can deliver on our core business Code of conduct Whistleblower service Bribery and corruption Sveafastigheter's code of conduct must be adopted and All matters received by the whistleblower service are Corruption, fraud and mone
Slide 86: Illustrative NAV build-up Q1 2024
1 2 3 4 5 6 7 8 9 Appendix – Financial overview Illustrative NAV build-up Q1 2024 Illustrative net asset value, Q1 2024 SEKbn SEKm Total Property value 27,738 Add: Other assets excl. cash 600 0,8 Less: Other liabilities (399) 27,7 Less: Deferred tax (1,217) Less: Debt1 (12,204) 0,6 1,2 Add: Cash 329
Slide 87: Profit and loss (pro forma)
1 2 3 4 5 6 7 8 9 Appendix – Financial overview Profit and loss Pro forma stand-alone SEKm 2023 LTM Q1’24 Q1’23 Q1’24 Rental income 1,226 1,290 282 346 Operating costs (348) (369) (111) (132) Maintenance costs (88) (95) (19) (26) Property tax (21) (21) (5) (6) Property costs (457) (485) (135) (163)
Slide 88: Profit and loss (reported)
1 2 3 4 5 6 7 8 9 Appendix – Financial overview Profit and loss Reported financials SEKm 2023 LTM Q1’24 Q1’23 Q1’24 Rental income 1,160 1,223 267 330 Operating costs (333) (351) (106) (124) Maintenance costs (80) (81) (17) (18) Property tax (20) (19) (5) (5) Property costs (432) (451) (128) (147) Ne
Slide 89: Cash flow overview
1 2 3 4 5 6 7 8 9 Appendix – Financial overview Cash flow overview Reported financials LTM LTM SEKm 2023 Q1’23 Q1’24 SEKm 2023 Q1’23 Q1’24 Q1’24 Q1’24 Operating profit (incl. results from associated companies) (4,547) (4,247) (826) (526) Investments in properties (1,286) (1,000) (307) (22) Depreciat
Slide 90: Balance sheet – pro forma reported financials
1 2 3 4 5 6 7 8 9 Appendix – Financial overview Balance sheet – pro forma reported financials1 Assets Liabilities and equity SEKm Dec-2023 PF1 Mar-2024 PF1 SEKm Dec-2023 PF1 Mar-2024 PF1 Goodwill 76 77 Equity (15,317) (14,847) Intangible Assets 76 77 Untaxed reserves - - Investment properties 28,136
Slide 91: Valuations of investments properties
1 2 3 4 5 6 7 8 9 Appendix – Financial overview Valuations of investments properties Commentary Property value determined through comparable transactions and income-based method Quarterly external valuation ▪ All properties are valued quarterly by external appraisers Income-based method and the valu
Slide 92: Valuation methodology for building rights and projects
1 2 3 4 5 6 7 8 9 Appendix – Financial overview Valuation methodology for building rights and projects Commentary Valuation methodology Building rights valuation Valuation deductions Deduction (%) Deduction (%) current level going forward ▪ Valuation of building rights are done with the sales compar
Slide 93: Simplified structure chart
1 2 3 4 5 6 7 8 9 Appendix Simplified structure chart Sveafastigheter AB Existing 559449-4329 New entities (per 2024) Sveafastigheter Holding AB 559479-1880 Sveafastigheter Förvaltning AB Sveafastigheter Development AB 559479-1898 556985-1271 Sveafastigheter Holding 1 AB Sveafastigheter Holding 2 AB
Slide 94: Definitions
1 2 3 4 5 6 7 8 9 Appendix Definitions Condos Condominium (swe: bostadsrätter) Presumption rent Rent level is set based on the developer’s construction cost Current portfolio Investment properties (standing assets) Prime yield Yield on properties located in prime locations FTE Full time equivalent (
Slide 95: Risk factors (I/XI)
Risk factors (I/XI) In this section, material risk factors are illustrated and discussed, including risks related to Sveafastigheter’s business, industry and market, and further include operational risks, legal risks, regulatory risks, financial risks as well as structural risks relating to the Bond
Slide 96: Risk factors (II/XI)
Risk factors (II/XI) 1.1.4 Sveafastigheter is exposed to the risk that it, when needed, may be unable to sell any portion of its total portfolio on favourable terms or at all Sveafastigheter is exposed to risks related to its ability to sell parts of its property portfolio. Sveafastigheter may need
Slide 97: Risk factors (III/XI)
Risk factors (III/XI) 1.2.2 Sveafastigheter operates in a regulated market, which affects Svefastigheters’ ability to increase rents The Swedish residential rental market is regulated, meaning that the rents for tenants do not follow market pricing. Rents are generally subject to annual negotiations
Slide 98: Risk factors (IV/XI)
Risk factors (IV/XI) 1.2.5 Sveafastigheter property upgrades may not be as successful as estimated Sveafastigheter regularly engages in ongoing upgrades and energy efficiency improvements across its property portfolio, which are aimed at enhancing net operating income, net operating income margin, a
Slide 99: Risk factors (V/XI)
Risk factors (V/XI) 1.2.8 Sveafastigheter is exposed to risks relating to unfavorable contractual terms, quality of work and weakened financial standing by contractors and suppliers Sveafastigheter relies on long-term contracts with its key contractors and suppliers to carry out certain services and
Slide 100: Risk factors (VI/XI)
Risk factors (VI/XI) Sveafastigheter is also exposed to credit risks relating to its financial operations. Such credit risks arise in connection with, among other things, investments of Sveafastigheter’s cash or cash equivalents, entering into interest rate hedging agreements and long-term and short
Slide 101: Risk factors (VII/XI)
Risk factors (VII/XI) 1.3.5 Fluctuations in interest rate levels may increase the costs of financing Sveafastigheter’s operations are financed partly through the Parent Company Loan and partly through financing from credit institutions and (subject to the satisfaction of the Financing Condition) the
Slide 102: Risk factors (VIII/XI)
Risk factors (VIII/XI) 1.4.3 Sveafastigheter's operations are exposed to environmental risks and must comply with various health, safety and environmental regulations and these may adversely affect Sveafastigheter's operations and future earnings Sveafastigheter’s operations in property management e
Slide 103: Risk factors (IX/XI)
Risk factors (IX/XI) 2 Risks relating to the Bonds 2.1 Risks related to the nature of the Bonds 2.1.1 Credit and refinancing risks An investment in the Bonds carries a credit risk in relation to Sveafastigheter. The Bondholders’ ability to receive payment under the Terms and Conditions is dependent
Slide 104: Risk factors (X/XI)
Risk factors (X/XI) 2.2.2 Risks related to acceleration of the Bonds and put option Upon the occurrence of an Event of Default (as defined in the Terms and Conditions), the Bonds may be accelerated at the terms and price set out in the Terms and Conditions. Furthermore, in the event of a: (a) Change
Slide 105: Risk factors (XI/XI)
Risk factors (XI/XI) 2.3.2 Absence of a prospectus Investors should be aware that, in connection with the issuance of the Bonds, no prospectus will be made available for their review for a significant period of time, potentially up to 12 months following the First Issue Date. During this period, the
Slide 106: STRICTLY PRIVATE AND CONFIDENTIAL
STRICTLY PRIVATE AND CONFIDENTIAL
Sveafastigheter — Debt Investor Presentation (June 2024) on 6ix