Hello, and welcome to Atrium Ljungberg's presentation of Q3 2026. The title of this report is Careful Optimism on the Rental Market with a Challenging Interest Rate Situation. We are seeing several positive signals in the Swedish economy and in our sub-markets. At the same time, long-term interest rates increased sharply during the quarter. Let us begin with the key figures for the quarter. Net letting amounted to SEK 2 million in the quarter and SEK 9 million year to date. Net operating income amounted to SEK 538 million, a decrease of 2.3%. Income from property management amounted to SEK 328 million, which was 6.8% lower than in the corresponding quarter of the previous year. Rental income continues to increase, primarily thanks to our completed projects. At the same time, net operating income is negatively affected by higher vacancies, as costs do not decrease at the same rate as income. The property value amounted to SEK 62 billion. We are reporting positive unrealized changes in the value of properties of SEK 136 million, corresponding to 0.2%, primarily due to positive cash flow adjustments. Investments in our own properties amounted to SEK 654 million during the quarter. In addition, we took possession of the residential development right Kv Stanford in Hagastaden for SEK 656 million. The acquisition forms part of the transaction previously agreed with Besqab. We have six ongoing projects with a total investment volume of SEK 9.2 billion, of which SEK 5.7 billion remains to be invested. Atrium Ljungberg has a property value of just over SEK 62 billion, a rental value of SEK 3.1 billion, and a total letting area of 917,000 sq m. Stockholm has increased by 1 percentage point and now accounts for 82% of the property value. This is due to project investments, taking possession of Kv Stanford in Hagastaden, and relative changes in yield requirements between our markets. Offices represent 66% of the portfolio, retail 20%, residentials 3%, and projects and land 12%. The economic letting rate decreased from 86.5% to 85.7%. The decrease is mainly explained by H&M moving out of Liljeholmen. The loan-to-value ratio increased from 43.8% to 44.5%. The increase is largely a temporary effect of taking possession of Kv Stanford. Adjusted for Kv Stanford, the loan-to-value ratio would instead have decreased during the quarter. Looking at the market, we see developments cautiously moving in the right direction, although the recovery has not yet fully reached the rental market. The Swedish economy has shown resilience. GDP is growing, and the latest signals from the labor market point in the right direction, with more temporary employees, more positive recruitment plans, and continued low levels of redundancy notices. Historically, there has been a strong correlation between GDP growth and net letting, albeit normally with some lag. We are not yet seeing a broad recovery in office demand, but conditions are gradually improving. We are seeing positive developments in the rental market. Comparing August and September this year with the same period last year, the number of inquiries increased by almost 30%, and the number of square meters requested in those inquiries increased by 38%. At the same time, the addition of new office space is expected to be very limited during 2026 to 2028. In addition, the adjustment to home and hybrid working has largely been completed. Overall, a stronger economy, increasing office employment, and the limited addition of new office space indicate that the market may gradually improve. However, the differences between locations and quality are becoming increasingly clear. Demand is concentrated to modern offices in attractive urban environments with good public transport, service, culture, and an urban pulse. Quality and location are more important than ever. Developments are also positive in retail. Household consumption continued to strengthen during the third quarter. Retail sales are growing, with particularly strong development in discretionary retail. Turnover at our retail hubs increased by 6%, excluding VAT in July and August, compared with the previous year. A strong figure. Confidence about the future has also improved, both among retail companies and households. The autumn began with well-attended viewings and increased activity in the residential market. Demand is strong and supply limited in central Stockholm. The market in greater Stockholm is more balanced, but developments are also moving in a positive direction there. Prices are up year-on-year, although developments were volatile during the quarter. Improved household confidence, higher real incomes, and stronger household finances support the market going forward. We are seeing increased interest and have now sold 93% of our current tenant-owned dwelling project. As mentioned, net letting amounted to SEK 2 million in the quarter and SEK 9 million year to date. The largest lettings during the quarter were concluded on Södermalm, in Liljeholmen, and in Uppsala. At Söderhallarna, we signed an office letting of 1,958 sq m with access in mid-June. The food hall opens in October. At Mälarterrassen, we signed an agreement with Chingu for 680 sq m. Chingu plans to open a Korean barbecue in March 2027. Following this letting, only one smaller premise remains to be let at Mälarterrassen. At Stora Katrineberg in Liljeholmen, Prosavio leased 668 sq m with access in March 2027. At Forumkvarteret in Uppsala, Designtorget leased 630 sq m. They have already moved in. Our customer base remains stable and diversified, with good risk diversification across different sectors, customers, and lease maturities. Offices account for 53% of contracted annual rent, retail for 20%, and culture and education for 10%. The 10 largest customers together account for 20% of contracted annual rent. The Ericsson agreement is not yet included in these figures as the agreement remains conditional. We have approximately 1,400 commercial lease contracts and only five lease contracts exceeding 10,000 sq m. Two of these are office leases. The average remaining lease term is 4.8 years. The maturity structure is also well-balanced. A large proportion of the contracted value runs until 2031 or later. Our retail hubs have a broad and resilient composition. Groceries, Systembolaget, and pharmacies together account for around 40% of turnover. At the same time, we are now also seeing positive development in more cyclical categories, such as clothes, shoes, and home furnishings. During July and August, visitor numbers increased by 3.3% compared with the corresponding period in the previous year. Year to date, the increase is 4.4%. As I mentioned, turnover excluding VAT increased by 6% during July and August. This confirms the picture of gradually strengthening consumption and continued positive development at our retail hubs. With that, I hand over to Anna, who will take you through the results and our financial position. Thank you, Annica. Let us take a closer look at the figures for the quarter. Rental income amounted to SEK 761 million in Q3, an increase of 3.4% compared with Q3 2025. As earlier in the year, the increase was driven by the six commercial projects completed since Q3 2025. Together, these projects contributed SEK 34 million in rental income in Q3. We also benefited from additional income from our now wholly owned coworking company, A House. The net effect amounted to SEK 13 million in Q3. This was partly offset by the occupancy rate, which was lower than in 2025. The occupancy rate decreased 0.8 percentage points to 85.7% during Q3. There were naturally both move-ins and move-outs during the quarter, but one move-out had a particularly significant impact. This was a previously known termination as H&M vacated its premises in Liljeholmen on July 31st. H&M previously leased 8,000 sq m. It had already vacated approximately 2,900 sq m, where we have secured new tenants. It has now vacated the remaining 5,100 sq m. However, as Annica mentioned, we leased an additional area during the quarter, which means that almost half of the space has now been relet. We also have more move-outs than move-ins in Q4. Although none is as large as H&M, the occupancy rate is expected to decline slightly further. The operating surplus decreased by 2.3%. This was partly due to A House's negative result of SEK 7 million in Q3. A House is in an establishment phase, and we expect to see a gradual improvement. However, it will probably continue to make a negative contribution of roughly this magnitude for some time. The decrease was also attributable to higher credit losses, which amounted to SEK 5 million in Q3, compared with only SEK 0.8 million last year. Excluding the effects of coworking and credit losses, the operating surplus decreased by only SEK 1 million or 0.2%. A third effect is important to understand. When premises become vacant, costs do not decline at the same pace as income. The effect on costs is very limited as most costs remain. Consequently, the operating surplus margin declines when vacancies increase. The rolling 12-month operating surplus margin was 71% compared with 71.4% in the previous quarter. Net financial items increased by 12%. This was mainly due to the higher debt volume relating to the standing portfolio following the completion of six projects for which interest is no longer capitalized. The average interest rate was also slightly higher during the quarter. This was partly offset by the revised principle for capitalized interest introduced in 2026. The revised principle increased capitalized interest by approximately SEK 6 million in Q3. Overall, profit from property management amounted to SEK 328 million, down 6.8% compared with Q3 2025. We increased property values by SEK 143 million, corresponding to 0.2%. The increase was driven by positive cash flow effects of SEK 259 million. The average yield remained unchanged at 4.7% during the quarter. However, the Q3 valuations included a number of yield adjustments. There is a clear flight to quality trend in the rental market. This is also evident in the transaction market. Demand is strong for high-quality properties in attractive locations, while interest in less attractive locations is limited. In consultation with our valuers, we reduced yields by a few basis points for a small number of our most central locations in Hagastaden and Slussen. We increased yields in less central locations, mainly for offices in Gothenburg, Uppsala, and outside our major development areas in Stockholm. Overall, the yield changes reduced values by SEK 133 million. Project gains amounted to SEK 13 million in the quarter, comprising SEK 10 million from commercial projects and SEK 3 million from tenant-owned residential projects. There was also a minor earnings effect from the sale of vacated Malmen 12 in Malmö, which was handed over in July. In Q3, we also recognized the result from the sale of the Kv Stanford residential building rights in Hagastaden, which we announced last year at a sale price of SEK 818 million. The transaction is somewhat complex, so let me explain it and what happens next. In June, we took possession of the land from the city of Stockholm for SEK 656 million. All conditions relating to the first part, Stanford West, have now been fulfilled. We therefore recognized the sale in Q3, including the land and foundation work. Stanford West will be handed over in December. The eastern part will become unconditional when the western part is handed over. Stanford East will then be handed over in August 2027. We now know the result for Stanford East, which has resulted in an impairment in Q3. In summary, we recognize the full result from the Stanford sale in Q3, amounting to a loss of SEK 73 million. We will receive the first payment in December and the second payment in August 2027. During the first nine months of the year, rental income decreased by 1.3% and the operating surplus by 2.9%. The figures have changed slightly, but the reasons are exactly the same as in Q2. Starting with rental income, indexation made a positive contribution of just under 1%, more precisely 0.9%. On the other hand, the vacancy rate was higher. There was also an effect from the renegotiation of Ericsson's lease in Gothenburg last year. When Ericsson leased the entire building, they paid all utility costs directly. Now that the property has several tenants, we pay these costs and recharge them through operating cost supplements. The effect is SEK 6 million per quarter. Since the new lease took effect on April 1st, both rental income and costs were SEK 12 million higher. Thus, there is no net effect on operating surplus. Turning to costs, in addition to the SEK 12 million increase related to Ericsson in Gothenburg, heating and snow clearance costs from Q1 were SEK 8 million higher. Credit losses were SEK 14 million higher. They amounted to only SEK 3 million last year, compared with SEK 17 million this year. Other costs declined, reflecting continued strong cost control. Overall, the operating surplus in the like-for-like portfolio decreased by 2.9%. Looking at the individual segments, the pattern was the same as in the previous quarter. The decrease in income was attributable to the office segment, where vacancies were higher. As discussed, costs do not decline at the same pace, resulting in an even greater effect on the operating surplus. The increase in costs was mainly in the retail segment, where most of the credit losses occurred, and which also accounted for a high share of heating and snow clearance costs. However, as Annica mentioned, retail is performing quite well, which is evident in the rental development in the retail segment. In Q3 in isolation, rental income decreased by 2.5% and the operating surplus by 5%. Why did the operating surplus decline more than income? Again, costs do not decline at the same pace as income when premises are vacant. Credit losses were also higher. A few words on the impact from projects. Rental income from project properties amounted to SEK 108 million in the first nine months of the year. Of this amount, SEK 86 million related to the six projects completed in 2025 and 2026. At the beginning of the year, we guided for total income of approximately SEK 120 million from these projects. That remains a good approximation, although we now expect the final figure to be a few million higher. A further two restaurants will move into Mälarterrassen in Q4 and Hus 48. Lilla Marknadshallen in Slakthusområdet will be completed, and Haglöfs will move in. The projects generated an operating surplus of SEK 66 million in total, which was an increase of SEK 68 million compared with the same period last year. A few words also on transactions. As you know, we have consolidated A House since February 1st. I would like to highlight that A House's income is included in rental income, while its costs are included in property management costs. Both are therefore reflected in the operating surplus we report. A House has affected 2026 year-to-date as follows. The net impact on rental income was SEK 35 million, while the impact on the operating surplus was SEK -23 million. At the beginning of July, we handed over Malmen 12 in Malmö. The sale reduced rental income by SEK 3 million and the operating surplus by SEK 2 million in Q3. The effect is expected to be approximately the same in Q4. Turning to the balance sheet, the value of the property portfolio increased by SEK 886 million in Q3. As mentioned, we took possession of the Stanford residential building rights for SEK 656 million. We sold Stanford West and Malmen 12, and a few buyers also took possession of tenant-owned apartments. We invested SEK 654 million in projects, together with unrealized changes in value of SEK 136 million. This increased the value of the property portfolio to SEK 62.5 billion at the end of Q3. Interest-bearing debt increased by SEK 820 million during Q3, primarily due to the Stanford acquisition, and amounted to SEK 27.8 billion at quarter end. Turning to our key financial metrics. The rolling 12-month interest coverage ratio decreased from 3 x to 2.9 x due to higher net financial items. The net debt to EBITDA ratio and loan-to-value ratio also increased. Net debt to EBITDA increased from 13.5 x to 13.9 x, while the loan-to-value ratio increased from 43.8% to 44.5%. This is, however, a temporary effect of taking possession of Stanford. Both ratios will decline again when the handovers have taken place. Adjusted for Stanford, the net debt-to-EBITDA ratio was 13.6 x, and the loan-to-value ratio had actually declined from Q2 to 43.6%. Net asset value amounted to SEK 54.68 per share. Turning to financing, we continue to have good access to financing on favorable terms, both through banks and the capital markets. Credit spreads tightened during the summer. In August, we completed a major SEK 1.7 billion bond transaction at the best levels since 2021. The two-year tranche was issued at 60 basis points and the five-year tranche at 105 basis points. Credit spreads have widened slightly since then but remain attractive by historical standards. Long-term market interest rates rose sharply during the quarter. This has not yet affected our average interest rate, which remained at 3.1%, including commitment fees. At current interest rate levels, it is challenging to maintain a long average interest rate duration without increasing interest costs. In Q3, we revised our finance policy and widened the permitted range for average interest rate duration to 1.5 to five years. Going forward, our focus is on maintaining a well-balanced interest rate maturity profile. We will place particular emphasis on maintaining a high hedging ratio over the one to two-year horizon. The aim is to limit the effect of abrupt interest rate movements. If interest rates remain high for an extended period, the aim is also to limit the pace at which higher rates feed into the portfolio. Apart from the challenging interest rate environment, we remain in a secure financing position. We have a favorable capital tied-up, a well-balanced maturity profile, and substantial available liquidity. With that, I will hand over to Annica. Thank you, Anna. Finally looking at our project portfolio, we have six ongoing projects with a total investment volume of SEK 9.2 billion, of which SEK 5.7 billion remains to be invested. The projects are primarily concentrated to three of our major development areas: Slakthusområdet, Hagastaden, and Södermalm. Already in the fourth quarter of this year, we will complete Lilla Marknadshallen in Slakthusområdet. In 2027, Gamla and Nya Magasinet and Söderhallarna will follow. Stationen will be completed in 2028, the University block in 2030, and Ekeblad in Hagastaden in 2031. The economic letting rate in the ongoing projects amounts to 59%. The project return amounts to 19%, corresponding to a total of SEK 1.7 billion, none of which has yet been recognized. During the quarter, we took possession of the residential development Kv Stanford in Hagastaden. Stanford comprises approximately 21,300 sq m of ljus BTA above ground. The transaction forms part of the agreement reached with Besqab in 2025. I would also like to remind you that this entire development right is the result of our decision to return a development right at Slussen to enable the Nobel Center. Without it would have been difficult to complete the major transaction with Ericsson, which included letting Ekeblad. We have a negative effect from the sale in the quarter, but looking at the transaction as a whole, it is nevertheless a good deal. During the quarter, we also vacated Malmen 12 in Malmö. The property comprises approximately 7,500 sq m and primarily contains healthcare operations with significant refurbishment needs. The underlying property value in the sale amounted to SEK 84 million. The result from the sale was SEK -8 million before tax. The property was vacated in July. Finally, I would like to highlight the strength of our long-term project portfolio. We are developing four major areas in Stockholm: Slakthusområdet, Sickla, Hagastaden, and Slussen. The total investment potential amounts to approximately SEK 40 billion in land already owned or land allocations obtained for projects with planned starts no later than 2033. In Slakthusområdet, we are developing Stockholm's new meeting place for food, culture, and experiences. During the quarter, the area received international recognition when Time Out named Slakthusområdet one of the world's coolest neighborhoods. In Sickla, we are developing the Nordic hub for sustainability, innovation, and wellbeing. During the quarter, Nacka Municipality adopted the detailed development plans for Norra Nobelberget, Industrikvarteren, and Fanny Udde, comprising just over 100,000 sq m of development rights. In Hagastaden, we continue to develop one of the world's leading clusters for life science and technology. Through the agreement with Ericsson, rental income in our current commercial projects in the area is secured subject to fulfillment of the conditions in the agreement. At Slussen, we are contributing to the transformation from a traffic junction into a vibrant meeting place for all of Stockholm. This is where our long-term growth lies. In conclusion, we are facing a more challenging interest rate environment, but we do so with attractive assets, good access to financing, and an extensive project portfolio in some of Stockholm's strongest locations. At the same time, we are seeing cautiously positive signals in our markets. The economy is strengthening, activity on the rental market is increasing, and demand is concentrated to precisely the type of modern properties and vibrant urban environments that we develop. That gives us reason to remain carefully optimistic about the future. Thank you so much for listening, and we look forward to seeing you again in the next quarter.
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