Catena Stock

Welcome to the conference call. [Operator Instructions] Now I will hand the conference over to the speakers. Please go ahead.

Hi, and welcome, everyone, to Catena's presentation for the Q3 report. Here is the agenda for today, a summary, a business overview and an update followed by sustainability, finance and a short takeaway before ending up with Q&A. Next slide, please. So first, the summary of the Q3 report. We report a 20% increase in rental income ended up at SEK 2.347 billion, driven mostly by acquisitions, but also by our CPI-linked contracts. Profit from property management increased by 18% in total and per share, it was up 7.8%. Isolated for the third quarter, the increase per share was up almost 13%.

Our NRV came in at SEK 468.87 per share. The balance sheet is very solid with an LTV at 43.2%, and we closed the Finnish transaction totaling SEK 2.15 billion, which will lead to an LTV around 45%, and that is a level we do not aim to be above going forward. The occupancy rate is back at above 95% to be exact 95.3% due to good leasing operation in this quarter. Our WALE is now at 6.9 years, which means that we have a very strong cash flow secured for many years ahead. Next slide, please. And next slide, a business overview. Statistics shows that the transaction volume in the Industrial segment amounted to SEK 23.5 billion during the first half of the year.

This indicates strong interest in the segment and the high volume was expected to continue during the second half. But due to higher interest rates, we expect the activity to slow down a bit. We experienced higher activity among customers as well as potential customers regarding dialogues around our vacancies and about some new projects on our land bank as well. A result we have seen from this are the lettings we have finalized in Q3, which led to higher letting ratio, as I said before. Swedish e-commerce grew by 8% year-on-year in Q2 2026 with all measured categories growing for the second consecutive quarter, indicating broad-based momentum rather than growth driven by a few segments.

Growth was particularly strong in logistics-intensive categories, including pharmacy, plus 13%; grocery, plus 10%; and consumer electronics, plus 10%. For Catena, this is supportive for the long-term demand outlook for modern logistics properties. Continued e-commerce growth increases the need for well-located warehousing, fulfillment and infrastructure close to major population centers. Next slide, please. Regarding our customer portfolio, we have no major changes to report for this quarter. Next slide, please. The total value of the portfolio is now in the report at SEK 55.7 billion, and the average lettable square meter has a value of SEK 13,694.

On October 15, we closed the deal in Finland, meaning that we add SEK 2.15 billion to this portfolio. Next slide, please, business update. Catena entered Finland in April 2026, establishing a new fifth region through the acquisition of logistics portfolio valued at approximately SEK 2.1 billion, comprising around 152,000 square meters of lettable area. Since then, we have continued to expand its Finnish platform, including acquisitions of logistics properties at Helsinki Airport and most recently, a portfolio of 10 properties for approximately SEK 2.15 billion from Urban Partners.

The latest portfolio adds around 142,000 square meters and is fully let with tenants, including Posti, DSV and Warasto and has a 7.3-year WAULT. In less than a year, Catena has built a Finnish logistics portfolio with a value approaching to almost SEK 6 billion, creating a meaningful new platform alongside Sweden and Denmark. Next slide, please. Here is one of the newly acquired buildings with Posti as a tenant located in Lieto and has a GLA of about 16,000 square meters. Next slide, please. We are also very happy to present a development project in Finland, investing approximately SEK 131 million in new 5,800 square meter logistics facility in Pirkkala, strategically located close to the E12 motorway in -- at Tampere Airport.

The facility is fully let on a 7-year lease to a Finnish industrial automation company and is expected to generate an annual NOI of approximately SEK 9.7 million. The project complements Catena's 2 existing properties in Pirkkala and further strengthened our position in Tampere logistics region. Upon completion, it will become Catena's 20th property in Finland, illustrating the speed at which the Finnish platform has developed since entering the market this year. Next slide, please. The table presents Catena's earnings capacity on a 12-month basis and note that the increase in the earnings capacity per share to SEK 30.72 per share compared to SEK 27.25 1 year ago, an increase of almost 13%. Worth to mention in this table is that we have included the latest Finnish acquisition that we closed at October 15.

Next slide, please. Our ongoing project portfolio totals to around SEK 359 million, where SEK 72 million is remaining investments. When all is completed, we will add 18,000 square meters to the portfolio. As I just presented a new project in Finland that will, of course, be included in the coming reports. Next slide, please. Regarding our land bank, we had, unfortunately, a negative decision from the Land and Environment Court regarding the plan outside Angelholm. We must amend some things in the process together with the municipality of Angelholm.

So with that said, it will probably consume a couple of more years before we have a plan there. In Orebro, the municipality decided on the zoning plan during the quarter and the decision was positive, but the opinion -- there is some more weeks that they can appeal this decision. So we have to wait and see whether it will gain legal force during November or not. As we said in the last report call, in Jarna, we have found a lot of challenges regarding nature values, and we expect a delay of 2 to 3 years before we can intensify the zoning job there.

Next slide, please. Looking at our leasing operations, our net leasing in terms of moving in and moving out came in positive with SEK 20 million for the quarter. And for the first 9 months, we are still at a negative level, minus SEK 22 million. Our WALE are now at 6.9 years and the letting ratio is at 95.3%. Next slide and some sustainability. The environmental certified area is now at 85%. The Scope 3 is continuing to decrease on a 12-month rolling basis due to less projects. We continue to maintain a high level of EU taxonomy alignment, for example, our turnover came in at 80% and total installed solar panels output has increased on our roofs. So it's now above 94 megawatts. And now over to Magnus for some financial update and next slide. Thank you, Jorgen.

This slide highlights the strength in our underlying earnings with strong year-on-year growth across all key metrics. Rental income is up 20%, mainly driven by acquisitions. Net operating surplus increased by 21% and profit from property management rose by 18%. Profit from property management per share is up 7.8% to SEK 21.46 per share, a clear mark of our ability to translate top line growth into shareholder value. We can conclude that the Catena model continues to deliver predictable, resilient earnings with strong profitability.

Next slide, please. This slide highlights the composition of our rental income growth in Q3 2026. As just mentioned, total rental income increased by 20% year-over-year. The largest contributor was acquisition, accounting for 16 percentage points of the growth. Our completed development projects added 2.2 percentage points, consisting mainly of new facilities in Ramlosa, Helsingborg, Malmo and Gothenburg, all leased to strong and well-known tenants. Like-for-like rental income rose by 2.8%, built up by CPI-linked indexation, renegotiated rental agreements and as well increased property tax and media costs, which are reinvoiced to our tenants.

All in all, this underlines our ability to grow through multiple channels, strategic acquisitions, value-adding development and strong day-to-day operations. Next slide, please. Let's have a look at our capital structure. As you know, although economic growth is picking up, this remains a market shaped by geopolitical uncertainty with rising global interest rates. These dynamics, of course, present challenges for a real estate company and factors like disciplined capital allocation and long-term focus are growing in importance. At the end of Q3 2026, our equity ratio stood at 47%, what we consider to be a balanced level that supports our strategic flexibility.

Our EPRA NRV per share continues to show steady improvement quarter after quarter and during the third quarter increased to SEK 469, excluding dividends, an increase of 7.1% compared to a year ago. This shows our ability to create shareholder value over time even as shareholder returns are being realized. Next slide, please. Let's move on to our financial position. We continue to demonstrate strong financial control with all key metrics well within policy levels. This is a sign of that we continue to maintain a prudent leverage profile and in connection with our latest acquisition, we communicated that we do not intend to increase our leverage above 45%. For Q3, net debt-to-EBITDA came in at 8.3x, interest coverage at 3.6x and loan-to-value at 43.2%.

These figures reflect both a solid capital structure and strong underlying cash flows that ensures continued access to capital on competitive terms if needed when opportunities arise. Next slide, please. Let's have a look at our debt and liquidity management. We remain focused on maintaining and securing funding on competitive terms. As mentioned, before in connection with the Q2 report, we drew down a 12+6 months Term Loan bridge facility when we closed the acquisition in the beginning of Q2. We immediately started the process of replacing the bridge facility with long-term funding through the bond and bank market. That process was finalized in early July, and the bridge facility is now fully repaid and closed.

Our average debt maturity is at 4.2 years with an average cost of debt at 3.2%. Liquidity is strong with a liquidity ratio above 1. Next slide, please. Interest rate management. 2026 so far has been characterized by geopolitical uncertainty, which has led to volatile energy prices and disturbances in the energy distribution system. Rising expectations on inflation and increased state borrowing needs in many economies have impacted the interest rate, pushing up long-term interest rates.

Both the ECB and the Fed raised their policy rates during the quarter, while the Swedish Riksbank kept its policy rate unchanged, although it raised the prospect of impending rate hikes. Catena closely monitor the rate volatility and continue to navigate and act in line with the framework set out in our finance policy. As of the balance date, 50% of the outstanding debt carried fixed interest and our current average interest cost is, as said, at 3.2%. Next slide, and back to you, Jorgen.

Thank you, Magnus. Our capital deployment is for the period divided into acquisitions, SEK 10.175 billion; development SEK 847 million and divestments of SEK 990 million. Next slide, please. Property value stayed stable in this quarter and ended up the period with a positive value change of SEK 622 million, which correlates to 1.2% of the total portfolio before adjustments. The average weighted valuation yield, the so-called exit yield for the portfolio is at 5.8% by the end of the period, and the EPRA net initial yield came in to 5.4%.

Next slide, please. And some takeaways for today. So for the first, we witnessed increased activity in the letting market, and we are very happy about that compared to 6, 9 and 12 months ago, it's much more activity. So we are happy to discuss more with potential customers in the future. And secondly, we continue to report decent growth in profit from property management per share and isolated for the Q3, as I said before, plus 13%. That's a very impressive number. And the third and last, we are very happy to report solid operations with higher earnings capacity than ever going forward. And with that said, we open up the Q&A session.

[Operator Instructions] The next question comes from Oscar Lindquist from ABG Sundal Collier.

So first question on sort of your commentary on demand. How do you expect this will translate on occupancy for the coming quarters based on sort of the discussions you have now and the timing? And then also on project starts, should we now expect any material project starts in the near term?

Oscar, good question. I mean it's hard to predict the letting ratio and the timing. What we are very clear with this that the activity, the discussions, there are more ongoing discussions, more players asking for our vacancies compared to, as I said before, a year ago. Hopefully, we will sign some of those discussions. We have earlier mentioned Denmark, for example, this is still ongoing and very positive dialogue. But then it's hard to predict whether it's an increase in the letting ratio already in Q4 or Q1 '27. We have to wait and see. Regarding new projects, hopefully, we can sign at least one project on our land bank before Christmas. And then we have to come back when we have the excavator on ground, so to speak.

Could you give me any guidance on what sort of investment volume you're expecting for that project?

We have to come back on that. Not sure yet.

Okay. And I guess you were referring to the Koge property. Is your expectation that you will sign that now in Q4? Or can you give an update on how the process is going?

Part of it, but we have said it before. Also my colleague, [ Mikael ] has said it and believe before now it's closed. So -- but based on the discussions, we really hope to sign a part of the spaces before Christmas.

Okay. And then my final question on sort of with the announced M&A, you're around 45% now and my interpretation is that you don't want to push that further. How should we think about sort of more divestments of noncore assets? What's your thinking on that?

That could absolutely be a scenario going forward. There are a lot of players looking into some of our assets. And as we told the market before, there could be some asset rotations and the capital we can perhaps deploy in Finland. As we speak, we see more opportunities over there. But -- on the 45% note, we also have a very strong earnings. So I mean, there will be a strong cash flow going forward. So there are possibilities to invest going forward.

The next question comes from John Vuong from Van Lanschot Kempen.

I just wanted to follow up on your comments on the occupier demand. Just based on your leasing discussions, are you seeing more demand for, say, existing space? Or is it also balanced with real new developments? And just on the occupiers, is it really expansionary demand that people are looking for? Or is this really going towards better locations, more modern assets that we're seeing, so shifting around in their current supply chain?

I think generally speaking, there is a bit more optimism among the segment and our customers. I mean the consumption has increased in the Nordics in the last 6 months. So they expect perhaps a bit more demand going forward. But it's also a question about rotating from perhaps from bad quality to better quality in some cases. And we -- at the same time, we also discuss with some players about new projects on our land bank. But it's hard to say whether it's -- the total demand is much higher now than for, let's say, 6 months ago, I'm not sure about that. But the activity, that's for sure, that's much higher now.

Okay. That's clear. And just on the industries that they're active in, is this end users that you're talking about? Or is it also 3PL players that are expanding?

No, it's a mix. So you cannot say that it's just e-commerce or 3PL players. It's a mix of all customers.

The next question comes from Erik Granstrom from DNB Carnegie.

I just had one question, split up perhaps in 2, but I was just wondering if you could give us some information on when you're taking possession of Finland, what do you expect to be the impact in Q4? Because I appreciate that it's from October 15, but I do also believe that in the press release, you stated that some of it are ongoing projects. So I'm just trying to get a sense of the Q4 impact from the Finnish portfolio.

Yes. So all assets except one, we closed at the 15th of October. So they're basically 2.5 months generating for the Q4, except one asset that we will close in the middle of November.

Okay. All right. That's fair enough. And then also perhaps on that theme, the ICA project, it's finalized in Q4. Do you expect to get sort of full rent for Q4? Or how should we see that timing in terms of the tenant starting to actually pay rent?

Yes. Good question. So the project will be finalized in late December, and we expect the customer to move in at the beginning of Q1 '27. So no income in Q4.

Okay. Yes. Fair enough. And then I might as well perhaps take the opportunity to ask you about what you're seeing in terms of your average interest rate going forward. You mentioned the fact that you have about 50% hedged or fixed. what do you see going forward given the discussions that you have? If you could sort of give us some guidance knowing what we already see in the market. Do you expect this to change substantially? Or how should we view it?

Good question. Not substantially, I would say. We still see that the refinancings that we do, we can refinance at a lower margin than the ones that are expiring. Then of course, the market as such has shifted. So we will definitely have an impact on the -- based on the higher market rates. So -- but it will not be any dramatic change. But of course, with rising base rates, that will have an impact.

The next question comes from Keivan Shirvanpour from SEB.

I have a couple of questions. And the first is on the average interest rate. So you have an interest rate duration and a hedging ratio that has come down a bit, so interest rate duration below 2 years now. Do you plan to extend the duration and increase the hedging? And what type of impact would you believe that this would have on your average interest rate?

What we -- when we took out the bridge facility in Q2, we said that we will not do the full hedging of that in one go, instead gradually move it into our hedging portfolio. We are doing that. We have not done so much now during Q3 in that respect, but we will add some hedges in Q4. We will not go up to 60% in Q4. I don't think we can expect that. So there will be a gradual shift, increasing both the duration and the percentage hedged.

But would it be reasonable to assume maybe around 60% heading into next year?

End of...

End of -- that's the long-term target, but there's no rush into it.

Yes. And then just a final question. You mentioned that disposal to potentially fund growth in Finland. Can you say anything about identified volumes within your current portfolio that would maybe be up to disposal?

Well, not as a guidance, but I mean, we have disposed for SEK 1 billion, give or take. Perhaps there could be another SEK 1 billion, but that could also be over '27. We don't know, but just to give you some number.

The next question comes from Emil Ekholm from Pareto Securities.

Just first off, maybe you can give some color on how the lease indexation is determined in the Finnish portfolio. Is it usually an uptick starting in January like we have in Sweden? Or when is the cutoff period? And what is it based on? Is it some particular CPI month? Or how is it determined?

Base case is that the indexation kicks in at the 1st of January, but not sure if it's all contract or not, but majority.

Okay. And also in the portfolio that you acquired now in Q4?

Correct.

Okay. And DSV is now around 16% of your rental income. And there are also tenants in the new portfolio that you have acquired, how big of a share in that portfolio is DSV?

Well, all else equal, well, perhaps there could be an uptick of 1 percentage at maximum in the customer portfolio. So no major changes.

Okay. That's fair. And then just a follow-up on the interest rate question on hedging. Maybe you can give some guidance on margins for new financing currently, both in banks and bonds.

We -- yes, the bond market, we -- currently, the latest weeks, there's been, of course, an uptick in margins, but I would say that we would still be able to do an issuance there with the at or perhaps even slightly better than what we did in April. So no major change in that sense for us. Bank market, still strong upside. And without giving any exact guidance, we see that the refinancing we do in the bank markets are -- they come in at a lower margin than the ones that are expiring that we can say.

I think that was the last question. So then we will just say thank you for listening to this call and wish you all out there a nice weekend when it comes. Thank you, and goodbye.

Welcome to the conference call. [Operator Instructions] Now I will hand the conference over to the speakers. Please go ahead.

Hi and very welcome to Catena's presentation for the Q2 report. The agenda is, as always, first, a summary then a business overview, some updates from the business, some sustainability numbers, the financial update, a takeaway from today and then we end up with some Q&A, hopefully.

First of all, a summary of the Q2 report, we reported a 17% increase in rental income, ended up at SEK 1.510 billion driven mostly by acquisitions, but also by our CPI-linked contracts.

Profit from property management increased by 14% in total. And per share, it was up 5.2%. Isolated for the second quarter, the increase per share was up 10.9%. Our NRV came in at SEK 461.20. The balance sheet is still solid with an LTV at 44.5%. And the 1st of July, we disposed the portfolio to [ MSS ], which leads to 43.9% in LTV as we speak.

The occupancy rate has dropped to 94.6%. Even though we have some tenants moving out during the quarter, we are positive to come back to the levels at 95% or above in the coming quarters. Our WALE is now at 7.1 years, which means that we have a very strong cash flow secured for many years ahead. After closing the deal with Urban Partners at the 1st of April, we can confirm that we have established a Nordic platform with a strong offering to the market.

Next slide, please. the business overview on next slide. The market update. Preliminary figures shows that the transaction volume in the industrial segment amounted to SEK 23.5 billion during the first half of the year. This indicates strong interest in the segment, and the high volume is primarily attributable to the major transaction that Catena carried out with Urban Partners. We have a sense that there will continue to be more transactions opportunities in the second half of the year based on what brokers are currently working on.

Regarding e-commerce, there was a clear growth in the first quarter of 2026, up 7%, which speaks in favor for our segment and for more demand in the future. We sense a slightly more positive atmosphere regarding discussions with potential customers and existing customers to start new projects. That said, we still see it as a bonus if we can sign a new contract in the near future regarding our land bank.

Next slide, please. Regarding our customer portfolio, we can see some clear changes after the 1st of April. DSV has moved from 18% to 15%, and [ Dahl ] has entered the list with a 2% share.

Next slide. The total value of the portfolio is SEK 55.8 billion. This is the first quarter where we have Finland as a new region. The value there is SEK 3.6 billion, and we see more opportunities to grow there going forward. The average lateral square meter has a value of SEK 13,559. The total value will decline with SEK 600 million at the 1st of July due to the divestment to [indiscernible] that I mentioned before.

Next slide, a business update. As I said before, now we are in Finland, except from the portfolio we acquired from Urban Partners, we have made 2 additional acquisitions recently. More about them later on. Henrik Eskolin is appointed as a regional manager and commenced in August after the summer. We are, as we speak, looking into more opportunities in Finland and are overall optimistic to grow more there going forward.

Next slide, please. At the end of May, we may -- we have acquired a modern logistics property in direct proximity to Helsinki Airport in Aviapolis, Vantaa. The property serves the Cramo Finland's headquarters as well as the company's main logistics and service hub in the region, and the investment amounts to approximately SEK 575 million, with an initial yield estimated to 6%.

Next slide, please. At the same week, actually, we also acquired a strategic located logistics property in Vantaa, adjacent to the Helsinki Airport. The property serves as DHL's principal logistics hub in Finland, and the estimate yield is also here around 6%.

And next slide, please. As we mentioned before, we have closed the deal with [ MSYS ] at the 1st of July, bringing down the LTV to 43.9%. The agreed price was 8% above our booked values. The properties of all Varla 6:15 in Kungsbacka and Glasblåsaren 14 in Linköping have also been sold during the period, comprising a total lettable area of approximately 35,000 square meters.

And the 2 properties have been divested at the combined property value of approximately SEK 430 million. Annual rental value amounts to approximately EUR 33 million, and the agreed purchase price was 9% above booked value.

Next slide, please. This table presents Catena earnings capacity on a 12-month basis. Note that the increase in earnings capacity per share at almost SEK 29 per share compared to SEK 26.25 1 year ago, an increase with more than 10%.

Next slide, please. Our ongoing project portfolio totals to around SEK 359 million, where SEK 125 million is remaining investments. When all is completed, we will add 18,000 square meters to the portfolio.

The next slide, please. Regarding our land bank, we are still waiting for a decision from the Land and Environment Court regarding the plan outside Ängelholm. In Örebro, the municipality decided on the zoning plan during Q2. And the decision was positive, but the minority had the right to postpone the decision for another month or so. So we have to be patient and wait again.

In Järna, we have found a lot of challenges regarding nature values, and we expect a delay of 2 to 3 years before we can intensify the zoning job.

Next slide, please. Looking at our leasing operations, our net leasing in terms of net moving in and moving out during the quarter came in negative with SEK 42 million. Our WALE has increased to 7.1 years, and the letting ratio is at 94.6%.

As I just said, we have had a negative quarter in terms of tenants that moved out, and that has led to a lower letting ratio. This is now dramatic, and we have already signed some new contracts on the vacancies, and we believe that we soon can come up to at least 95% again. And the overall feeling is that there is a higher activity in the letting market as we speak with more ongoing discussions compared to last year.

Next slide, some sustainability. The Scope 3 continuing to decrease on a 12-month rolling basis due to less projects. We continue to maintain a high level of EU taxonomy alignment. For example, our turnover came in at 79%. Total installed solar panels output on our roofs is now above 89-megawatt hours.

And now over to Magnus for some financial update. And next slide, please.

Thank you, Jörgen. This slide shows the strength in our underlying earnings with solid year-on-year growth across all key metrics. Rental income is up 17%, mainly driven by acquisitions. Net operating surplus increased by 17%, and profit from property management rose by 14%.

Profit from property management per share is up 5.2% to SEK 13.96 million per share, underlining our ability to translate top line growth into shareholder value. The Catena model continues to deliver predictable, resilient earnings with strong profitability.

Next slide, please. This slide highlights the composition of our rental income growth in Q2 2026. As just mentioned, total rental income increased by 17% year-over-year. The largest contributor was acquisitions, accounting for 13.2 percentage points of the growth. Our completed development projects added 2.5 percentage points, consisting mainly of new facilities in [ Ramlösa ], Helsingborg, Malmo and Gothenburg, all leased to strong and well-known tenants.

Like-for-like rental income rose by 2.1% built up by CPI-linked indexation, renegotiated rental agreements as well as increased property tax and media costs, which are reinvoiced to our tenants. All in all, this underlines our ability to grow through multiple channels, strategic acquisitions, value-adding development and strong day-to-day operations.

Next slide, please. Let's turn to our capital structure. The second quarter of 2026 has been characterized by geopolitical uncertainty that has increased the volatility on the financial markets.

Despite this, there has been a pickup in real estate transactions and increased activity in the credit markets that are now back at levels seen before the outbreak of the war in Iran. However, global long-term structural uncertainties still remain to some extent, and it's important that we're keeping prepared in case of increased volatility.

At the end of Q2, our equity ratio stood at 47%, a balanced level that we consider supports our strategic flexibility. EPRA NAV per share increased to SEK 461, excluding dividends, an increase of 7.7% compared to a year ago. This shows our ability to create shareholder value over time, even as shareholder returns are being realized.

Passing on to next slide, let's move on to our financial position. We continue to demonstrate strong financial control with all key metrics within policy levels, even immediately after the large acquisition. This is a sign of that we continue to maintain a prudent leverage profile.

Net debt to EBITDA came in at 8.9x, interest coverage at 3.7x and loan-to-value at 44.5%. These figures reflect both a solid capital structure and strong underlying cash flows that ensures continued access to capital on competitive terms if needed, when opportunities arise.

Next slide, please. Let's have a look at our debt and liquidity management. We continue to remain focused on maintaining and securing funding on competitive terms. In connection with the acquisition on April 1, we drew down a 12 plus 6 months term loan bridge facility that in combination with the proceeds from the directed equity raise we did in January was utilized for the short-term funding of the acquisition.

We immediately started the process of replacing the bridge facility with long-term funding, and the first takeout was done via the issuance of SEK 3.25 billion in unsecured green bonds. The takeout for the remaining part will be done via the bank market. The process is well progressed, and we aim to have the bridge facility closed in the coming days.

Our average debt maturity is 3.5 years, currently compressed by the short-term bridge facility. Liquidity is strong and a liquidity ratio above 1, excluding the effect of the short-term bridge facility.

Next slide, please. Let's move on to our interest rate management. As said, the first half of the year has been characterized by geopolitical uncertainty, which has led to volatile energy prices and disturbances in the energy distribution system. This has had an effect on the concerns for increased inflation, and interest rates initially rose, particularly at the short end of the curve, but have since then gradually normalized.

Today, short-term rates are largely in line with the levels seen at the start of the year, while longer-term rates are slightly lower. Catena closely monitor the rate volatility and continue to navigate in line with the framework set out in our finance policy. As of the balance date, 51% of the outstanding debt carried fixed interest and our current average interest cost is at 3.3%.

Next slide, and handing over to you, Jörgen.

Thank you, Magnus. Our capital deployment is for the period divided into acquisitions, SEK 10.175 billion, Development, SEK 698 million and divestments of SEK 403 million.

Next slide, please. property value stayed stable ended up the period with a positive value change of SEK 612 million, which correlates to 1.1% of the total portfolio before adjustments. The average weighted valuation yield, so-called exit yield, for the portfolio is at 5.8% by the end of the period. The EPRA NRV net initial yield came in to 5.4%.

And next slide, and then we have some takeaways from today, and they can be summed up into three points: For the first Catena has now established a Nordic platform. Secondly, we have a positive view on the second half of 2026, where we hope to sign some new leases to increase the letting ratio and also good opportunities, especially in the Finnish market to keep up growing.

And the third, with a WALE of more than 7 years, the long-term financing in place, as Magnus said, we expect to have it in a couple of days at very attractive conditions. We have absolutely the fundamental to deliver strong earnings going forward and to keep up the growth journey.

And with that said, we will open up for Q&A.

[Operator Instructions] The next question comes from Oscar Lindquist from ABG Sundal Collier.

So just if you could go into some more detail on the increased vacancy in the quarter, is it linked to anything specific? Or is it just a smaller general terminations? And you also mentioned on move-ins that you -- I think you can reach 95% or above in the short term and that you have signed leases. Could you give us an indication of timing on those move-ins, please?

Yes. Oscar, I mean, first of all, there were some terminated lease agreements, which led to the tenants moved out at the 1st of April, and that was on various places in Sweden. So there is no structural pattern, I would say. We had, during the notice period, been successful to find new tenants. But the net moving out, as I said, was 42 million. And of course, that has an impact in the earnings for Q2, which we had included in the earnings capacity in the last report.

Now we have signed some lease agreements that will kick in during Q3 and Q4, and that's included in the earnings capacity that we report today. We don't -- we cannot be more detailed than that.

But we can also add and just confirm once again that we sense more activity. We have more positive discussions ongoing. And hopefully, what we hear within the teams hopefully, we signed some more square meters before we go for the summer break. So all in all, we are positive to report higher numbers going forward than we have in this report.

Okay. And then on [ CAG ] completed last quarter, we haven't heard anything on letting. Can you give us any indication of how discussions are going?

Yes. We can sense that, that's also one of the buildings that we have positive discussions. Hopefully, we can sign something in this quarter or the latest in Q4, we hope to sign. But we'll have come back with that one when once it's done, but positive on that one.

Perfect. And then on -- you mentioned a slight improvement in tenant discussions. Is that mainly for sort of existing properties? Or do you see increased propensity to sign leases for new space as well?

I think, first of all, mostly the positive discussions has been to find new tenants on the vacated premises but also a bit more positive on looking into new projects as well. But that takes more time than to achieve some new signed square meters on the existing vacancies. So still a bonus if we can sign a new project in near time.

The next question comes from Keivan Shirvanpour from SEB.

I could maybe start with our follow-up question on the leasing figures. You had minus SEK 42 million in the quarter. And also you mentioned that you have signed some new agreements since. Could you maybe give some type of indication of how much of this SEK 42 million has already been relet?

Well, no specific details. But as I said before, we are positive. And there were -- some of the square meters will kick in during the second half year. But we will not guide specifically on how many of the millions or square meters, but more on the positive note.

Okay. And then my second question is related to the central administration. So in the earnings capacity, have SEK 56 million and then annualized based on Q2 is about SEK 60 million. And then you also hired a new regional manager in Finland since then. So what would you say that's sort of a annualized run rate in central administration would be onwards given that?

Well, I think that what we guided the earnings capacity is most likely, we have had some quarters with some higher cost. That's due to some structural changes and also some higher costs related to the huge transaction we have made. We have also had some IT costs and investments. So our goal is absolutely to come back to what we say in the earnings capacity going forward. .

Okay. Good. And then also, I guess a final question, and that is related to the transactions you have made quite a few divestments recently. And would you say that there is anything that remains to be divested in the current portfolio?

I mean it's not planned, but on the same way as we have made during the [ 2 first ] quarters as there are peers in the market that are very eager to acquire and to grow, and they have identifying some assets. And perhaps there could be something like that going forward to do a bit of recycling. But nothing that is planned. We'll see what's happened.

But with that said, if there were some more divestments, it's likely that we take that money, the proceeds and find new investments, especially in Finland to build a bigger portfolio over there.

The next question comes from Erik Granström from DNB Carnegie.

I had a few questions regarding the transactions market. You mentioned that you're looking into additional acquisitions in Finland. What kind of yield levels are you looking for now that you are expanding into Finland? That's the first part of the question. And the second part is, what's the critical size that you're looking for in Finland, sort of in terms of actually having an organization that are in place now?

Erik, very relevant questions. I mean we have presented 2 deals in May and they were both around 6% in net initial yield. It's likely to think that sits around those levels as we are looking into going forward about the critical mass, absolutely more than we have today. To compare with Denmark, we are above SEK 8 billion.

So I think that could be a very rough number to motivate to build up an organization. But also, as you know, depends on what kind of opportunities that will arise going forward. And we cannot say whether it takes 1 year or 3 years, that we don't know.

And could you say something about the situation for transactions in Finland? What's the competition like? Because if you look at your exit yield of the portfolio now, it's quite close to 6%. Usually, Finland carries higher yields than Sweden, which is the majority of your portfolio.

So what's the reasoning for not sort of getting higher yields on your acquisitions in Finland? Is it competition? Or is it quality of the assets? If you could just talk a little bit about that.

Yes. Those two, we acquired at 6 were around the airport, and we think we did a very good deals. Actually, we have seen lower yields as well. Perhaps there could be a bit above 6% as well. But then it's also important to make the difference between the exit yield we have in the valuation. We -- you cannot compare that with a net initial yield. I mean look at our portfolio net initial yield price 5.4. So there is also a delta there. But of course there is higher yields in Finland compared to Sweden.

Okay. Good. And then finally, you mentioned that you're in discussions with finalizing long-term financing for the large portfolio you acquired, I believe you said in a few days. Could you say something about sort of the terms of the bank financing or -- and sort of how many banks have you been talking to in terms of finalizing that financing?

Yes. We have been discussing with 3 different banks in that. And the terms, I mean, we will -- we see that on average, we probably will land at around our average cost in total when all of the hedging is done and the entire package is put into place.

Okay. So we should expect then that by the time we're moving in now in Q3 and Q4, that will be taken care of and the overall effect is fairly close to what you're having right now?

That is correct, yes.

The next question comes from Pierre-Emmanuel Clouard.

Yes. Actually, I have a quick follow-up question on the upcoming vacancies. So I understand that you are planning to improve vacancy towards the end of the year. But how should we think the occupancy over the next 12 months as you will have 14% of your rent roll to renegotiate in 2027? And did you already receive some reports coming from a tenant that you -- that will vacate some assets? How do we see 2027 going forward?

Good question. I mean overall goal for us is to be around 95% at least in the letting ratio. As we said before, we think we will be around 95% or a bit above in 6 to 12 months' time. I think it's on the daily business, some tenants move out and some other moves in. There could be some lagging in between. We haven't seen any dramatic things regarding terminations from tenants going forward. So I mean as guess around 95%. .

Okay. So no dramatic change expected in 2027...

No dramatic.

Okay. Perfect. And then a quick also a follow-up question on the [ re-lease ] that you are currently renegotiating. What is the level of reversion that you are achieving on those relettings?

You could expect that it's more in line with the existing rents there. We have said before to the market that in this environment, there is no potential upside. It's flattish. In some cases, we have received a bit higher rent; in some cases, a bit lower. In some cases, we have to do some CapEx. So that's -- so overall, in our portfolio, we are in on the market rent level.

So with that said, I think that was the last question. We want to wish you all a great summer. And thank you for listening, and see you after the summer. Take care. Thanks a lot. Thank you. Goodbye.

Welcome to the conference call. [Operator Instructions]

Now I will hand the conference over to the speakers. Please go ahead.

Hi, and very welcome to Catena's presentation for the Q1 Report 2026. My name is Jörgen Eriksson, CEO of the company. And here is the agenda for today: a summary, a business overview and an update followed by sustainability, finance and a short takeaway before ending up with Q&A.

So starting with the summary of Q1. We report a 9% increase in rental income ended up at SEK 701 million driven mostly by acquisitions, but also by our CPI-linked contracts. Profit from property management increased by 7% in total, and per share it was down 1%. The temporary decrease in income from property management per share relates to the equity raise we did in January to be prepared for the closing of the Nordic portfolio at the 1st of April. We expect to report an increase in this measure from Q2 and forward wise.

Our NRV came in to SEK 454 and the balance sheet is very solid with the LTV at 33.6%. The occupancy rate has dropped to 95.1%, which is due to 2 factors. We have taken over the project Køge in Denmark. This new construction project located in a prime location was acquired vacant, and we are currently working on leasing it out and are hopeful that we will be able to secure a lease agreement there in due course.

The second reason is 1 of the buildings in the Ramlösa project, which was completed in Q1 and where Nowaste is currently leasing only half of the space. As I mentioned earlier, in Q1, we have positioned ourselves for the continued growth, backed by a very stable balance sheet and with the new acquisition now in place as we speak, our cash flow will be stronger than ever.

And next slide, please. And going to the business overview. We have seen in the market quite high activity in the transaction market in the beginning of Q1. But what we see as we speak is a bit more caution due to the Iran crisis and so forth. Some planned divestments from various players have been on pause and that is what we have heard from the brokers. But we are all the time looking for new opportunities, and they -- we are convinced that they will arise sooner or later.

Regarding some e-commerce statistics, more suites shopped online in January and e-commerce got off to a cautious but promising start to the year. In January, sales rose by 1% compared with last year, while a record number of consumers choose to shop online.

Regarding new projects, we are involved in dialogues with customers regarding new projects as we speak, but it takes time. And I think it's the same story and the same conservative view as we had in last quarter, and we don't think that's strange regarding the uncertainty in the market right now. It's easier for customers to put projects on hold or take big decisions.

Next slide. Regarding our customer portfolio, there has not been any major changes since last quarter, and it's the same with the segment table on the right-hand side. But in the next quarter, we expect that the DSV percentage to decrease as we add on the new Nordic portfolio.

Next slide. The total value of the portfolio is nearly SEK 45.2 billion, and it's worth noting now that since some quarters, we report as we do in the presentation here, we break down the values, not only by region, but also by investment properties, projects, building rights and land values. And the average lettable square meter has now a value of SEK 12,931.

Earlier this week, we announced the divestment of 10 properties to [indiscernible] of around SEK 600 million, and the value was about 8% above our book value. We saw this as a good opportunity to recycle a bit of the Swedish portfolio. And at the same time, we look into more deals in Finland. Since we entered the Finnish market, there has already shown up some interesting cases.

Next slide, a business update. During this quarter, we completed an expansion for Boozt and they now leased a total of 88,000 square meters from us. Their facilities located along the E-6 highway between Helsingborg and Ängelholm and serves all of the Boozt e-commerce customers throughout the Nordic region, and the lease agreement runs until 2037.

In this table here, we show the earnings capacity as we do in the report as well. Worth mentioning now is that the Nordic property portfolio that was completed at the 1st of April is included in this earnings capacity as well as the divestment of the 10 properties to [indiscernible] and that deal will be affected on the 1st of July.

Next slide. Current development. Now we have only 1 project left. So of course, we are keen to find new ones. We are struggling. But as I said before, we are conservative in the coming 6 months. But the total portfolio value of ongoing projects, SEK 675 million, where SEK 250 million is remaining investments. When it's all completed, we will add another 35,000 square meters to the portfolio.

Next slide, please. Regarding future development and regarding our land bank and our zoning plan processes, there is no major updates since last quarter, still waiting for a decision from the Land & Environment Court regarding the plan outside Ängelholm and as neighbor land to Boozt facilities. We expect to have some decisions during the summer, hopefully. In Örebro, the municipality is about to decide on the zoning plan during Q2, '26.

Next slide, please. Looking at our leasing operations, our net leasing in terms of moving in and moving out during the quarter is plus SEK 1 million. Our WALE is at 6.3 years and the letting ratio is at 95.1%. As I mentioned before, the lower letting ratio is fully explained by Denmark and Ramlösa.

Next slide, please. Some sustainability. The environmentally certified area is that the Q1, end of Q1 is 78%. Scope 3 is continuing to decrease on a 12-month rolling basis, of course, due to less projects. We continue to maintain a high level of EU taxonomy alignment. For example, our turnover came in at 77%. Total installed solar panels output on our roofs are now above 76 megawatts.

And now over to Magnus for some financial update on next slide.

Thank you, Jörgen. And next slide, please. This slide highlights the strength in our underlying earnings with solid year-on-year growth across all key metrics. Rental income is up 9%, mainly driven by acquisitions. Net operating surplus increased by 6% and profit from property management rose by 7%. As Jörgen mentioned, profit from property management per share is down 1%, a temporary decrease derives from the equity raise we did in January, and we expect to report an increase in this measure from Q2 and onwards.

And also, as we've shown before, our earnings capacity implies profit from property management per share at SEK 28.45 on a full year basis, 20% above the level a year ago. The Catena model continues to deliver predictable, resilient earnings with operational leverage.

Let's move to the next slide. This slide highlights the composition of our rental income growth in Q1 2026. As just mentioned, total rental income increased by 9% year-over-year. The largest contributor was acquisition, accounting for 4.4 percentage points of the growth. Our completed development projects added 2.7 percentage points consisting mainly of new facilities in Ramlösa, Helsingborg, Malmö, and Gothenburg, all leased to strong and well-known tenants.

Like-for-like rental income rose by 2.4 percentage points built up by CPI-linked indexation, renegotiated rental agreements as well as increased property tax assessments and media costs which are reinvoiced to our tenants. All-in-all, this underlines our ability to grow through multiple channels, strategic acquisitions, value-adding development and strong day-to-day operations.

Next slide, please. Let's turn to our capital structure. The first quarter of 2026 started off with a pickup in real estate transactions and increased activity in the credit markets, a momentum that slowed down during March due to the uncertainty caused by the outbreak of the war in Iran. Global long-term structural uncertainties still remain and is at an elevated level and it is important that we keep being prepared in case of increased volatility.

At the end of Q1 2026, our equity ratio stood at 55%, temporarily increased by the equity raise we did in January, a balance level that supports strategic flexibility. EPRA NAV per share increased to SEK 454 including -- excluding dividends, an increase of 5.8% compared to a year ago. This shows our ability to create shareholder value over time even as shareholder returns are being realized.

And next slide, please. Let's have a look at our financial position. We continue to demonstrate strong financial control with all key metrics within policy levels. Following the announcement of the acquisition in February, Fitch Ratings reaffirmed the BBB rating with the stable outlook for Catena.

Net debt-to-EBITDA came in at 7.1x, interest coverage at 4.1x, and loan-to-value at 33.6%, temporarily positively affected by the equity raise in January. These figures reflect both a solid capital structure and strong underlying cash flows that contribute to giving us headroom to our financial covenants as well as ensuring continued access to capital on competitive terms if needed when opportunities arise.

Next slide, please. Let's have a look at our debt and liquidity management. We remain focused on maintaining and securing funding on competitive terms. During Q1, we issued a SEK 400 million secured bond with 3-year maturity and pricing at STIBOR 3 months plus 74 basis points.

As mentioned in the Q4 presentation, in connection with the acquisition, we signed a 12 plus 6 months term loan bridge facility that in combination with the proceeds from the directed equity raise was utilized on April 1 for the short-term funding of the acquisition. Our average debt maturity remains solid at 4.3 years. Liquidity is strong with SEK 5.3 billion in available liquidity and the liquidity ratio above 1.

Passing on to next slide. Looking at our interest rate management. The war in Iran has led to rising energy prices and disturbances in the energy distribution systems. This has had an effect on the concerns for increased inflation and has put pressures on both short-term and long-term interest rates.

Swap rates increased dramatically during March, but have come down somewhat since the high point end of March. We closely monitor the rate volatility and continue to navigate in line with the framework set out in our finance policy. As of the balance date, 60% of the outstanding debt carries fixed interest and our current average interest cost at 3.3% reflects a stable level with some minor room for improvement.

Next slide, and back to you, Jörgen.

Thank you, Magnus. Our capital deployment is for the period divided into acquisitions, SEK 159 million and development of SEK 435 million and no divestments during this quarter.

And next slide, please. Property value stayed stable and ended up the period with a positive value change of SEK 72 million, which correlates to 0.2% of the total portfolio before adjustments. The average weighted valuation yield, so-called exit yield for the portfolio is at 5.8% by the end of the period. And the EPRA net initial yield came in to 5.6%.

Next slide, please. Now we have the takeaways from today. First, Catena closes Q1 2026 once again, with very solid numbers. And second, and the most important, Catena will continue to grow and increase the earnings during 2026 due to the major acquisition that took effect at the 1st of April.

And now we will open up for Q&A.

[Operator Instructions] The next question comes from Keivan Shirvanpour from SEB.

I have just a couple of questions. The first, could you maybe quantify the net letting number for the quarter?

Yes, the net letting was plus SEK 1 million.

Okay. And then, my second...

And -- but just to be clear, the net letting, that's what's moving in and out for us during the quarter.

Yes. And then my second question is you mentioned that you see some opportunities in Finland. Would you say that you're looking at portfolios or properties or is it individual properties? And maybe if you can say anything about yield levels?

Yes, good question. We have -- we look into portfolios, but we also look into some cases where it's single assets, and you can generally say that it's somewhat higher yields there for same, same. If you compare an apple in Sweden with an apple in Finland, the yields are somewhat higher but not as high as the old saying of perhaps 100 bps, I would say, perhaps 50 bps to 75 bps.

Okay. And then just a final question, and that's related to the divestment that you made. How much would you say in your portfolio that maybe could be categorized as non-core assets that you would be able to divest if you would find a buyer?

Well, we haven't disclosed any specific number, but perhaps somewhat the size we did this portfolio the other week or somewhat higher, we'll see. It depends on if there are some buyers with very strong appetite. But I mean, it's not that many percentage of the total value.

The next question comes from Emil Ekholm from Pareto Securities.

Hope you can hear me well. A few questions from me. The market for starting new projects have been quite sluggish now for some time, as you also mentioned, and the tenants have been passing investment decisions. For how long do you think the market can be in this sort of standstill without an investment decisions being taken?

Yes, I think we will, hopefully, sooner than later, come to an end. But I mean, it's also a combination, the dynamics in foremost Sweden were quite -- we have quite high vacancies in the total market. So in some regions, there is no need for new projects either. And if you have a weak demand and quite high supplies, it can last for a while, actually. But as we mentioned, we have dialogues. So I mean, sooner or later, we will have some success. That's what we believe in, but we cannot guide in terms of next months or years.

Would you say that the high market vacancy like most of that is tied to some specific regions, but would you say that, that also affects markets with lower vacancies as tenants become more cautious?

Yes, I think so. And in some cases, perhaps players, tenants look into if it -- is it possible to move to some other regions. We have not seen that yet happening. But I could imagine that they are considering it at least. So I think this high vacancy numbers is actually a wet blanket for the whole industry at the moment.

Okay. That's interesting. Do you think it's also like a price question, let's say, hypothetically, if you were to lower your yield on cost targets, do you think that you can start anything?

Perhaps. And, as we have said before, we have told that, yes, of course, in an idle world, we expect 7% yield on cost on our projects. But I cannot say that we will refuse to start if we can gain 6.5% or whatever. That's from case to case. The important thing is to have a pre-let before we start. And -- and so we are looking into a lot of angles to see where we can meet the market, so to say.

That's clear. And as the investments in your own portfolio now reduces as you only have 1 ongoing project, I assume that we can expect further focus on acquisitions. But how would you say that competition is in the market for your types of objects currently?

It's always a tough competition. There are many players with deep pockets. We have shown the market many times that we can be successful, and we have done a lot of acquisitions the last 3 years. And as I said earlier in this call, now we are looking into some more opportunities in Finland. So it's fair to assume that some more acquisitions will take place in that region going forward.

That's very clear. And you also had now during Q1, more than 100 leases under renegotiations. Can you say anything about tenant behavior in these negotiations given like what we see in the current macro environment? Are they pushing for shorter lease terms? Do they request any CapEx? And to what extent are you able to raise your rent levels?

I will say it's the tenants market right now. So trying to increase the rents are perhaps in just some few cases possible. In the others, it's a fight to keep them and to prolong the leases. So far, we have been quite successfully, but we are very humble for the situation.

Okay. But we see that a lot in the office space right now, like tenants pushing for shorter lease terms. Would you say that it's the same within your type of assets? Or do they still prefer to have longer leases?

It really depends on what kind of situation it is. Is it a tenant that has automation installed, they are quite keen to keep a long lease. As we mentioned, Boozt before that lease last to 2037, and they will align their depreciations with the automation with the lease agreement. Other 3PL players that just use pallet racks, they can wish for shorter leases. Absolutely.

Okay. And then lastly from me. When do you think we can expect the tenant in Idunsvej property?

Yes, that's the same question I asked the regional manager in Denmark. But we have also at that location, interesting discussion. So I mean, that's the best, best location logistic wise in Denmark. So we are not that concerned about that temporary vacancy.

Something this year, I assume then.

Hopefully. And now it's worth to mention also you can sell on paper, but that's the potential customers also want to see the product, and now it's completed. So we have had some showings for the customer already. So that's promising.

The next question comes from Niklas Wetterling from SB1 Markets.

I have 3 questions. And the first 1 is just on the vacancy rate. And do I understand it correctly, like the like-for-like vacancy rate is flat in the quarter?

Correct, Niklas. It's perfect. It's flat.

Great. And then my second 1 is on investment capacity. I believe you mentioned you had SEK 2 million or SEK 2 billion or SEK 3 billion in investment capacity following the equity raise and now you've divested portfolio instead. Is it fair to assume that you have SEK 3 billion in investment capacity? And when do you expect to deploy that?

Yes. I mean the math you're doing is correct, but we have no clear answer when we have deployed those billions. As I said before, we are looking into cases in Finland. We'll see if we will be successful, but we are hopeful at least whether it takes this year and part of next year for those billions. We have to wait and see.

Okay. And my last question is regarding the hedging ratio, which is 60% right now and what will happen with that figure following the completion of the Urban Partner portfolio?

As we've said, we have a bridge financing in place. And when we do the takeout to long-term financing, we will -- in connection with that also make sure to align with our finance policy and hedge in according -- in accordance with that.

Okay. But currently, it's floating.

Currently, it's floating, yes.

And now there are no further questions.

There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

So thank you all for listening to this investor call for Catena's Q1 2026. Wish you all a wonderful weekend when it comes. Thank you, and goodbye.

Welcome to the conference call. [Operator Instructions] Now I will hand the conference over to the speakers. Please go ahead.

Hi, and welcome to this -- everyone to this Q4 report. We will show you the agenda here. Here is the agenda for today, summary, a business overview and an updated followed by sustainability, finance and a short takeaway before ending up with a Q&A.

So a summary of the year-end 2025 report, where we report 21% increase in rental income ended up at SEK 2.651 billion, driven mostly by acquisitions, but also by our CPI-linked contracts. Profit from property management increased by 28% in total and per share, it was up 18%.

Our NRV came in close to SEK 446 and the balance sheet remains very solid with an LTV at 39%. We announced yesterday a huge acquisition, which we will come back to later on. But with that said, we will have a stronghold on the Nordic logistics property market.

Next slide, and a business overview. We have seen more activity in the transaction market in Q4, and we have obviously been involved in one of the largest deals. What we hear from brokers is that the activity will continue during 2026.

Swedish e-commerce has reached a new peak. This is shown by PostNord's E-barometer for the full year 2025 with growth of 10% compared with previous year. Total e-commerce sales reached SEK 153 billion. This is the highest level ever recorded, surpassing the previous peaks during the pandemic.

Further, the Swedish e-commerce parcels increased by 12.9% or by 26.1 million parcels in 2025. During the full year 2025, 228 million e-commerce parcels were sent to the private individuals in Sweden. These 2 data points are very promising and should be a good driver for the logistics segment.

Regarding new projects, the story is pretty much the same as in the last quarters. We are involved in dialogues with customers as we speak, but it takes time, and we have a quite conservative view of signing new projects in the coming 6 months.

Regarding our customer portfolio, there has not been any major changes in Q4, and it's the same with the segment table on the right-hand side.

Next slide. The total value of the portfolio is now nearly SEK 44.5 billion. It's worth noting that in the report and also here in the presentation, we break down the value not only by region, but also in investment properties, projects, building rights and land values. And the average lettable square meter has now a value of SEK 12,833.

Next slide, please, the business update. Here, so yesterday evening, we press released a record big transaction containing 20 properties in Sweden, Finland and Denmark. We are super excited about this and think that the portfolio fits in perfectly to our existing portfolios in Sweden and Denmark. And at the same time, we can enter a third and a new market.

We see great opportunities to establish the business in Finland and start a growth journey as we have done in Denmark the last years. The portfolio consists of top modern, newly built buildings with high EPC and ambitious certifications. The customers are well reputed, and we will add some new names in our customer list.

We will also add about 70,000 square meters of building rights. Closing is expected to be at the 1st of April and fully let, we expect an NOI of SEK 483 million on a running 12 months. And the letting ratio is 96.5%, and we do have rental guarantees for 1 year for the vacant facilities. Net initial yield on cash, excluding the building right, is around 5.6%.

Next slide, please. And the final phase at Logistics Position Ramlosa, ICA Fastigheter has now signed an 8-year lease with Catena for the final building, which is yet to be constructed at Ramlosa. The new build encompasses 18,042 square meters and the building in question is being to be certified according to BREEAM Excellent and Sweden Green Building Council Zero CO2 standards. Construction is planned for completion in late '26 or early '27, at which point ICA will take occupation.

ICA is also moving into one of the existing facilities in Ramlosa where a separate 8-year lease with Catena is in place. The company plans to move into this 16,753 square meter facility in the summer '26 after refrigeration areas and other features have been installed. And total investment for the entire Ramlosa project is estimated to SEK 1.4 billion, and we estimate an NOI of around SEK 98 million all -- once all the facilities are leased.

Next slide. Our ongoing project portfolio totals to around SEK 1.2 billion, where SEK 272 million is remaining investments. When all is completed, we will add around 91,000 square meters to the portfolio and yield on cost in those projects is around 7%.

Next slide. Some updated information around the land bank and E-City Engelholm appeal by 15 different players is an ongoing case in the Environment Court of Law, and we expect that there will be some kind of decision in the summer '26. And in Orebro, the municipality is about to decide on the zoning plan once again during spring '26.

Next slide, please. Some leasing update. Our net leasing in terms of moving in and moving out came in for the full year at plus SEK 72 million for the full '25. And for the fourth quarter, it was plus SEK 2 million. Our WALE is now 6.4 years and the letting ratio is at 96.7%.

And next slide, please, and some sustainability. The environmentally certified area is now at 73%, and we have as goal to reach 100%. The Scope 3 is now decreasing on a 12-month rolling basis due to less projects. We continue to maintain a high level of EU taxonomy alignment. For example, our turnover came in at 77%, and we have once again been certified as a Great Place to Work. Total installed solar panels output on our roofs is now above 75 megawatts.

And now over to Magnus for some financial update and next slide.

Thank you, Jorgen. Next slide, please. I will start off by highlighting that after the end of the quarter, on January 20, we carried out a directed share issue that contributed with SEK 2.8 billion in new equity. The proceeds will be used for funding of the acquisition that we signed yesterday in combination with a 12 plus 6 months term loan bridge facility provided by banks within our existing bank group.

Next slide and our income and earnings. This slide highlights the continued strength in our underlying earnings with solid year-on-year growth across all key metrics. Rental income is up 21%, mainly driven by acquisition. Net operating surplus increased by 23% and profit from property management rose by 28%, reflecting both scalability and cost control.

Earnings per share from property management grew by 18% to SEK 26.72, underlining our ability to translate top line growth into shareholder value. The Catena model continues to deliver predictable, resilient earnings with operational leverage.

Next slide, please. This slide breaks down the key drivers behind our rental income growth for 2025. As just mentioned, the total rental income increased by 21% year-over-year. The largest contributor was acquisitions accounting for 14.8 percentage points of the growth. Our completed development projects added 3.8 percentage points, consisting mainly of new facilities in Jonkoping and the Gothenburg region, all leased to well-known tenants in retail and foodservice.

Like-for-like rental income rose by 4 percentage points, built up by CPI-linked indexation, renegotiated rental agreements as well as increased property tax assessments and media costs, which are reinvoiced to our tenants. All in all, this underlines our ability to grow through multiple channels, strategic acquisitions, value-adding development and strong day-to-day operation.

Next slide, please. Let's turn to our capital structure. Over the course of the year, we've seen a pickup in real estate transactions and the increased activity in credit markets, a momentum that has continued during Q4. That said, there are still global long-term structural uncertainties in place, and it's important that we keep being prepared in case of renewed volatility.

At the end of 2025, our equity ratio stood at 51%, a balanced level that supports strategic flexibility. EPRA NRV per share increased to SEK 446, excluding dividends, an increase of 4.9% compared to a year ago. This shows our ability to create shareholder value over time even as shareholder returns are being realized.

Passing on to next slide. Let's move on to our financial position. We continue to demonstrate strong financial control with all key metrics within policy levels. In October, the credit rating agency Fitch Ratings affirmed Catena's investment-grade rating BBB with a stable outlook in its annual credit rating update. Earlier today, Fitch Ratings reaffirmed the BBB rating following the announcement of the transaction yesterday.

Net debt-to-EBITDA came in at 7.8x, interest coverage at 3.9x and loan-to-value at 39%. These figures reflect both a solid capital structure and strong underlying cash flows that contributes to giving us headroom to our financial covenants as well as the ability to act on new investments when the opportunities arise.

Next slide, please. Moving on to debt and liquidity management. We remain focused on maintaining and securing funding on competitive terms. During the quarter, we have refinanced SEK 617 million and DKK 361 million, and we continue to see a strong appetite from banks and the capital market in regards to financing of new investments and acquisitions as well as upcoming refinancings.

As mentioned earlier, in connection with the announced acquisition, we signed a 12 plus 6 months term loan bridge facility that in combination with the proceeds from the directed equity raise will be used for the short-term funding of the acquisition. Our average debt maturity remains solid at 4.5 years. Liquidity is strong with SEK 3.2 billion in available liquidity and a liquidity ratio above 1.

Next slide, please. Let's move on to our interest rate management. In the start of 2026, there has been a slight shift in the view that the Swedish Riksbank has reached the end of its rate cutting cycle and a potential rate cutting during '26 is not ruled out by the market. As of the balance date, 61% of the outstanding debt carried fixed interest and our current average interest cost at 3.2% reflects a stable level with some room for improvement.

Next slide, and back to Jorgen.

Thank you, Magnus. Our capital deployment is for the period divided into acquisitions, SEK 1.840 billion, and development, SEK 1.147 billion. And we have, at the same time, divested properties for SEK 98 million.

And next slide please. Property valuations. The values stayed stable and ended up the period with a positive value change of SEK 485 million, which correlates to 1.1% of the total portfolio before adjustments. The average weighted valuation yield, the so-called exit yield for the portfolio is at 5.9% by the end of the period. The EPRA net initial yield came in to 5.6%.

Next slide, please. So some takeaways from today. For the first, Catena closes 2025 with very solid numbers and increased earnings. The earnings per share is up 18%, as we said before, very impressive, and we are very satisfied with that. And second and absolutely the most important, Catena will continue to grow during 2026, and that goes without saying regarding yesterday's transaction.

And with that said, we will open up for Q&A.

[Operator Instructions] The next question comes from Oscar Lindquist from ABG Sundal Collier.

So a couple of questions from me. Firstly, on the earnings capacity. Could you sort of give some color on what's driving the sort of 1.1 percentage point deterioration in the NOI margin?

Yes. Oscar, there are 2 things. We have now we see for the next 12 months based on where the Danish currency rate is that we will have some lower income from that part. And it's also fair to assume we see some vacancies kicking in during the year. That's the explanation.

Okay. And is that reflected in the top line then as well?

That's reflected in the top line, and the NOI margin, that's also what we have seen in the second half of '25 that we have had some higher property tax, which will be reinvoiced, of course, but that will decrease the NOI margin a bit.

Okay. Perfect. Then on the acquisitions -- on the acquisition you completed yesterday, you mentioned you have 1 year rental guarantees. Is that correct?

Correct.

And can you walk us through the financing of this portfolio? What do you expect in terms of funding costs?

We expect -- as I said, we have a bridge financing in place that we will take out on the longer market during the year, and we expect to land around our current average of cost of debt.

Okay. And then just could you give a guidance on the NOI margin of the portfolio you acquired?

Yes. So we said that there, if you exclude the value of the building rights, we said that we have -- oh, the NOI margin, sorry, sorry, sorry. We can say it's much higher than we have in our existing portfolio.

Okay. And then just a couple of small questions. Could you -- the sort of project you acquired in Koge, Denmark, do you have any guidance on timing of -- in contribution from that acquisition?

It will -- there be a sort of closing and completion of the project in Q1, we expect. We have ongoing dialogues for potential customers, but it's too early to say when we have a lease agreement in place.

Okay, And then on San Sac, when do you expect that to be completed?

In a period of 1 month. So in Q1.

The next question comes from Keivan Shirvanpour from SEB.

I have a couple of questions. And the first is related to the acquisition. Could you maybe give some type of indication of how central administration costs will be affected by this?

Yes, Keivan, relevant question. We do see just smaller increases in that. Of course, we will now hire a Finnish organization, the same setup as we have in Denmark, so 1 or 2 guys. So it's really on the margin. The Swedish portfolio and the Danish asset, that will -- we will swallow it into our existing organization. Perhaps we need one more property manager. That's it.

Okay. And then also on Finland, you say that this is a market that you want to grow in. Could you maybe give some type of like an indication of how large do you want the portfolio in Finland to be as a share of total?

Well, we don't have any exact numbers, but we do see there is a meaning to increase more than the SEK 2 billion we now have in this acquisition. And as we said before, we have done a growth journey in Denmark. We expect to do that in Finland as well.

Whether it will be some more billion during the coming years, it depends a lot on what kind of opportunity there will be on the table, so to say. But we expect to grow more in Finland versus Sweden, all else equal, but you never know.

Okay. And then I just have a final question, and that is related to the investment capacity going forward because you mentioned in connection with the share issue that you see that your balance sheet enables investment capacity of about SEK 2.5 billion to SEK 3 billion.

And my question is, what is the constraining factor to that volume given that -- assuming that your LTV will be somewhere in the mid-40s? I would assume that you could potentially have higher investment or room for investments than what you specified there.

Well, it depends on what kind of opportunities and what kind of -- what is the environment at that time and so on. We -- Catena is not known as to take too much risk. And well, if there is a good opportunity, we can, from time to time, be a bit above our financial policy, but not in the long run, and we rather stay below 50 than above 50. So yes, we have to consider what kind of opportunities there are. But with that said, we have dry firepower, and we can do more business.

Okay. And just a final question, that's a follow-up question on the NII margin. When you say that it has a considerably higher margin than the current portfolio, could you give some type of indication maybe of how much higher? Is it like close to 90%? Or is it 85%? Or is there any type of...

You can assume that it's around the 90%.

[Operator Instructions] The next question comes from Emil Ekholm from Pareto Securities.

First off, congrats on the acquisition. It looks very good. A few questions from me, mainly on the transaction. Where in the acquired portfolio can we find the vacancies that you have?

That's in Sweden, that's in Malardalen.

Okay. And are there a lot of properties that are single tenant? Or are there that are like more -- or how many of the properties are single tenant?

I cannot add on the top of my head, but there are quite many that are single tenants, but there are also some multi-tenants.

Okay. And you said that you want to grow more in Finland. Can you just give some color on the yields and yield gap compared to Sweden and Denmark that you can find there, not necessarily in this portfolio, but more on a general level?

Generally speaking, the yields are a bit higher in Finland, but we do see and when we talk to a lot of brokers and other players within Finland that the interest for investing in Finland has risen a lot the last year. And there is -- there are competitors. And so especially in the logistics, the yields have been trending down. But for sure, they are higher than in Sweden and Denmark, as we speak. But I wouldn't say that they're like 50 to 100 bps higher, but higher, yes.

Okay, that's clear. And you also say that the properties are modern and newly built. Do you have like an average age of the portfolio?

Yes, except one building, they are built the last 3 years.

Okay. That's good. And then lastly, just sanity check more or less. But in the earnings capacity, you -- is it correct to assume that you have included a new number of shares, but not the effect from the acquisition, right?

That's right. And we're talking about it internally, should we do the new shares or not in the table. But as it's for 12 coming months, then yes, we have 66.4 million shares.

The next question comes from Kanad Mitra from Barclays.

Just a couple of questions mainly on the acquisition. Can you please elaborate where do you -- what kind of yields do you think are attractive to you given that the yield on this acquisition is in the low 5s? And again, just broadly, if you were to do an acquisition, what would be the threshold yield for such an acquisition?

Sorry, it was -- it's a quite bad line. So we can't really hear your question. Could you please repeat? Or could you send a text to us?

Just can you elaborate why do you think the acquisition yield is attractive in a low 5s kind of acquisition yield? And what would be the -- yes.

Yes. We said that the yield is -- the cash yield is 5.6%.

Okay. And what would you say about kind of what is your threshold for new acquisitions if you were to do any in terms of...

There is no magic number. That's not the way we work. I mean, it depends on what kind of customer, what kind of location, are there any building rights, what's the upside, if we can add a strong new customer to our network, perhaps we can start the dialogue and perhaps we can offer some new buildings and to increase the cooperation with a new customer on our land bank and so forth.

So it's more of like how can we do our operations even better and what can we offer to the customers. And then whether it's a 5.5%, 5.6% or 5.9%, that's not really that crucial for us. It would be in the long run, a good investment for us and to strengthen our operations.

There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

So thank you, everyone, for listening to this earnings call. And from Helsingborg, we wish you all a very nice weekend when it comes. Thank you, and goodbye.

Thank you.

Welcome to the conference call.

[Operator Instructions]

Now I will hand the conference over to the speakers. Please go ahead.

Hi, and welcome everyone to Catena's Q3 report 2025. My name is Jörgen Eriksson, and I'm the CEO of the company. Here is the agenda for today: a summary, a business overview, an update followed by sustainability, finance, and a short takeaway before ending up with a Q&A.

Let's start with the summary of the Q3 2025 report, where we report a 25% increase in rental income, ended up at SEK 1.963 billion driven mostly by acquisitions, but also, of course, our CPI-linked contracts. Profit from property management increased by 32% in total, and per share, it was up to 18.7%. Our EPRA NRV came in at SEK 438 per share. The balance sheet remains very solid with an LTV at 39.2%, and we expect to generate strong cash flows in the coming quarters.

With that said, in combination with our robust balance sheet, we are in a favorable condition for more growth. The business overview, the market update, we have witnessed much more activity in the transaction market after the summer, and we have also heard that there is more to come, which means that there will arise opportunities for us to continue to grow. When there are properties that fit into our strategy, we will try to execute.

E-commerce continues to develop in the right direction. In the second quarter of the year, it grew by 9% compared to last year. Some of our e-commercers performed very strong, such as Boozt with their brand boozt.com, Apotea within the pharmacy industry, and Nelly within the fashion. The top three growing segments are furniture and home furnishings, up to 20%; pharmacy, up 17%; and home electronics, up 10%.

We can, after the summer, sense some more activity regarding new projects, and we are involved in more dialogues as we speak compared to the first half-year 2025. It's still a little too low, but nevertheless, it's a positive sign. The Swedish logistics market has continued to see increased vacancy rates, currently at 9% or a bit more, even though. In Denmark, the number is around 5%. The rise in the vacancy rates is mainly driven by the extensive development on new logistics assets, of which a high proportion have been built speculative.

Regarding our customer portfolio, Elgiganten has taken place in the top four after the latest acquisition, which we closed at the 1st of September. DSV is our biggest customer and has moved from 20% to 18% of our contractual value. Logistics and transport is our biggest segment, standing for almost 50% of the contract value.

We can also note that durable goods has risen to 18%, partly due to the acquisition we made on the 1st of September. The total value of our portfolio is close to SEK 44 billion. It is worth noting that in the report and in the presentation here, we break down the value not only by regions, but also now by investment properties, projects, building rights, and land values. The average lettable square meter has a value of SEK 12,761. Let's go over to a business update.

As we said in the Q2 report, we announced the signed agreement to acquire Elgiganten's distribution and central warehouse in Jönköping. At the 1st of September, we closed the deal. With that said, we have one month of rental income from this property in this Q3 report. The property is located opposite our newly built facility that Elgiganten rents from us.

The investment was SEK 1.275 billion before deduction of deferred tax. We estimate the NOI to approximately SEK 80 million. Our ongoing projects portfolio totals to around SEK 1.2 billion, where SEK 272 million is remaining investments. When all is completed, we will add another 91,000 square meters to the portfolio. Yield on cost on those projects is around 7%. Regarding the project Ramlösa, we expect to come with an update during Q4.

Regarding our [ Lemberg ], we have one update. The municipality of Ängelholm adopted a new zoning plan, E-city Engelholm, close to where Boozt is located today. This decision was at the end of September. This decision was unfortunately appealed. We have to wait for a verdict from the Land and Environment Court. The story is to be continued.

Over to a leasing update. Looking at the operations, our net leasing in terms of moving in and moving out came in with plus SEK 70 million for the first nine months. For the third quarter, it was plus SEK 7 million. Our WALE is now 6.5 years, and the letting ratio is at 96.6%.

Over to the sustainability. Now we have a 58% environmentally certified area. The scope 3 is decreasing on a 12-month rolling basis due to less projects. We continue to maintain a high level of EU taxonomy alignment. For example, our turnover came in at 76%. A total of 4 biodiversity projects were carried out in the south and the east regions in the third quarter. The projects included replacing mowed lawns with meadows planted with meadow flowers. Produced energy from solar cells reached around 36,500 megawatt-hours on a rolling 12-month basis. Total installed output on our roofs is now above 71 megawatt power.

Now over to Magnus for some financial update.

Thank you, Jörgen. This slide highlights the continued strength in our underlying earnings with solid year-on-year growth across all key metrics. Rental income is up 25%, mainly driven by acquisitions. Net operating surplus increased by 28%, and profit from property management rose by 32%, reflecting both scalability and cost control. During the quarter, retroactive property tax of approximately SEK 20 million was reinvoiced to our tenants as a result of new property tax assessments, which impacted the margin with 2.5 percentage points for the quarter.

Further, we had SEK 2 million in OpEx related to insurance matters. However, compensation from the insurance company is recognized as other income in the income statement. Earnings per share from property management grew by 18.7% to SEK 19.91, underlining our ability to translate top-line growth into shareholder value.

While not shown here, our earnings capacity implies SEK 27.3 per share on a full-year basis, 12% above the level a year ago. The Catena model continues to deliver predictable, resilient earnings with operational leverage.

This slide breaks down the key drivers behind our rental income growth for the last 12 months. As just mentioned, total rental income increased by 25% year over year. The largest contributor to that was acquisitions, accounting for 19.7 percentage points of the growth. Our completed development projects added 4.4 percentage points, consisting mainly of new facilities in Jönköping and in the Gothenburg region, all leads to well-known tenants in retail and food service. Like-for-like rental income rose by 3.4%, where 2 percentage points reflect CPI-linked indexation and 1.4 percentage points refers to an increase in property tax assessments, which is reinvoiced to our tenants. All in all, this underlines our ability to grow through multiple channels: strategic acquisitions, value-adding development, and strong day-to-day operations.

Let's turn to our capital structure. Over the course of the year, we've seen a pickup in real estate transactions and increased activity in the credit markets, a momentum that has continued during Q3. That said, global long-term structural uncertainties remain, and it's important that we keep being prepared in case of renewed volatility.

At the end of the third quarter, our equity ratio stood at 51%, a balanced level that supports strategic flexibility. EPRA NRV per share increased to SEK 438, excluding dividends, an increase of 5.2% compared to a year ago. This shows our ability to create shareholder value over time, even as shareholder returns are being realized. Let's move to our financial position. We continue to demonstrate strong financial control with all key metrics within policy levels.

In October, the credit rating agency Fitch Ratings affirmed Catena's investment-grade rating BBB with a stable outlook in its annual credit rating update. Net debt to EBITDA came in at 7.8x, interest coverage at 3.9x, and loan-to-value at 39.2%. These figures reflect both a solid capital structure and strong underlying cash flows that contribute to giving us headroom to our financial covenants, as well as the ability to act on new investments without compromising financial resilience.

Let's have a look at our debt and liquidity management. We remain focused on maintaining and securing funding on competitive terms. During the quarter, we have refinanced SEK 950 million at margins that are improving our cost of debt. We continue to see a growing appetite from the banks that we work with in regards to upcoming refinancings and also in exploring new deals.

In early July, as we communicated in connection with the Q2 report, we also completed a SEK 1 billion senior unsecured bond transaction, split across three and five-year maturities. Our average debt maturity remains solid at 4.6 years. Liquidity is strong with SEK 3.4 billion in available liquidity and a liquidity ratio above one.

Let's move on to our interest rate management. We enter Q4 with a view that the Swedish Riksbank has reached the end of its rate-cutting cycle, and the market anticipates that the policy rate to remain unchanged for the coming year or so. As of the balance date, 59% of the outstanding debt carries fixed interest, and our current average interest cost at 3.2% reflects a stable level with some room for improvement.

Back to you, Jörgen.

Thank you, Magnus. Our capital deployment is for the period divided into acquisitions at SEK 1.629 billion and development SEK 769 million. We have, at the same time, divested properties for SEK 98 million. Let's look into the property valuations. Property values stayed stable and ended up the period with a positive value change of SEK 297 million, which correlates to 0.7% of the total portfolio before adjustments. The average weighted valuation yield, the so-called exit yield for the portfolio, is at 5.9% by the end of the period, and the EPRA net initial yield came in to 5.6%. The value change for the quarter ended up at plus SEK 123 million.

Let's go over to takeaways for today and the report. First, Catena closes the third quarter with very solid numbers and increased earnings. Second, we are positive for the coming periods in terms of a lot of upcoming opportunities in the transaction market.

With that said, we hereby will open up for Q&A.

[Operator Instructions] The next question comes from Oscar Lindquist from ABG Sundal Collier. Please go ahead.

Hi, good morning. Can you hear me?

Good morning, Oscar.

On the project interest, you state that you've seen or increased interest after the summer. Could you provide some more color on this?

I mean, before summer, it was quite, quite, quite, so to speak. Now we hear from the business developer team that there are more ongoing discussions. We also have our network within the existing customers. We used to say that it's always easier to do more business with the existing customers. It's a total analyze from the intelligence we have in the market within our customers and what they are thinking and planning for the future. Yes, a bit more positive than compared to the first 6 months this year.

Is there any sort of geographical difference in these discussions?

We cannot communicate more than it's in Sweden, and that perhaps goes without saying because it's also where we have a land bank and so on. That's what we can disclose at the moment.

Okay. On transactions, where do you find sort of the most interesting acquisition targets now?

We consider to acquire both in Denmark and Sweden. We have seen portfolios who are out now for sale, and we have also heard that there will be more to come. There is a lot of players to think it's a good moment to try to dispose. On the other hand, there is a lot of players that want to grow. We realize that there is competition out there. Based on our history and our track record, we think that we can be successful in some of the transactions.

Okay. In terms of LTV, you're around 40% now. How far would you be comfortable to push this metric?

As I said, we are at 39.2% for the quarter. It's, of course, a discussion with the board and our owners, but we have a policy that allows us to go up to 50%. That's the guidance we give on that, I would say.

The next question comes from Jan Ihrfelt from Kepler Cheuvreux. Please go ahead.

Okay. Thanks for taking my question. Good morning. I kick off with the investment in the property management portfolio. It was SEK 0.8 billion this time, the first nine months, and compared to SEK 2.0 billion last year. What could we expect for 2026 on this line?

Good morning, Jan. Thank you for the question. We don't use to guide. We cannot give you any numbers. It depends on lots of different factors. The thing we can say, as we always say, is that in the longer run, we will definitely grow. When we find the opportunities that fit in our strategy, etc., we will go for it. It could be, yes, as Magnus said before, there is a lot of headroom. We'll see. We cannot guide to a specific number.

Okay. Fair enough. Next question in regards to the average interest rates. If I were to interpret you right, that you maybe see some headroom for a little bit lower average interest rates going forward. Could you elaborate on that?

Yes. The average interest rate, of course, also is affected by the base rate, which has come down during the quarter. We see from the refinancings we do and also from the bond issuance that we did in July that currently, for the refinancings we do, we see some improvements compared to the current level. Of course, depending on tenor and so on as well. Like for like, some improvements.

Okay. Thanks for that. My final question regards your project portfolio. The Nowaste Logistics project in Helsingborg seems to be a little bit delayed, according to the table here on page 10. Could you explain the reasons behind it and also the investment level, if that has changed also?

Yes. Good question. As you pointed out, the forecast now is that we will end up the project at Q4 2026. We start the construction work on the last building as we speak. As I said before in this call, we expect to come out with an update around the total project during Q4. Please wait for that.

The next question comes from John Vuong from Van Lanschot Kempen. Please go ahead.

Hi. Good morning. You're talking about both increased momentum in the transaction market as well as in your leasing discussions. Just to understand, how do you see the balance between acquisitions and developments in the next 12 months? Also, how do you look at the returns between these two?

Good morning, Jan. Good question. I mean, we used to say that, first of all, if we have to choose and we have on the table for decision one project and one acquisition, it's fair to assume that we will go for that project because it's more profitable. As the situation is today, we can probably do both because of our balance sheet and our headroom. Generally speaking, the projects are more profitable 12 months going forward. With the headroom we see in our balance sheet, it's fair to assume that it will be more acquisitions than projects. You never know.

Okay. Thank you. On your ESG targets, you delayed your net zero target to 2040. Could you maybe explain what the rationale behind that is? Perhaps, have there been any projects that you had to turn down because of this initial target at 2030?

That is the reason why this target is amended. That's aligned a lot of what the market is and what, for example, Sweden as a country has as a target to be neutral to 2040. We saw that the 2030 was a bit too aggressive. We try to, of course, have a part goal to 2030, but the long-term goal is amended to 2040. If I interpret your question right, we haven't turned down any projects because of this.

The next question comes from Keivan Shirvanpour from SEB. Please go ahead.

Yes. Good morning. I have a couple of questions. The first is on the like-for-like growth. You mentioned here for the first nine months, you have a like-for-like rental growth of 3.4%, but property expenses are up 13.6%. There are insurance cases that impact that. Could you maybe elaborate what the like-for-like NOI growth was in Q3?

Not isolated. We have not disclosed that number. As Magnus said before, and as you heard, the property tax impact is positive by about 1.4% and the residual of it, then the 2% or CPI-linked contracts and some amendments in the rents level.

Okay. Even if you adjust for that, I would assume that the like-for-like NOI growth is below the rental growth or to some extent.

Yes, to some extent.

Okay. Good. I also have a question on projects. Since you notice better activity in your discussions, are you at all open to maybe use the best parts of your land bank to build speculative projects?

No, definitely not. As you know, we are a long-term player. We want to have the long relationship with our customers. When we plan a new project, we really want to do it as a build-to-suit, so they really get what they want. We are also convinced that they will stay in the long run. There could be some small part of a bigger project that can, by some reason, be speculative, but that's just some handful percentages of the total project.

Okay. Also, another question on the projects. These dialogues that you have, is it for existing premises or is it for completely new developments?

I mean, we have discussions around our vacancies as well as for completely new projects. That's our separate dialogues. The players who are looking to our vacated areas, it's not the same as those who look for totally new projects.

Okay. Just a final question on the net letting. You mentioned SEK 70 million plus for the first nine months and then SEK 7 million in Q3. Since you have quite low project volumes, I would assume that the net letting contribution from projects is quite limited. Could you maybe elaborate where the remainder of the net letting is coming from if you were to break it down?

I mean, the SEK 7 million we have in this quarter, I cannot on top of my head, I'm not sure. I think it's some thousand square meters on various regions. I cannot give any more details on that. Yes, it hasn't been driven by projects. Yes, that's correct. We cannot see any more questions in the queue. Hereby, we close the Q&A.

There are no more questions at this time. I hand the conference back to the speakers for any closing comments.

Thank you, everyone, for listening to this earnings call. From Helsingborg, we wish you all a very nice weekend when it comes. Thank you and goodbye.

Thank you.