Fastighets Balder Stock

Welcome to the Balder Q2 Report 2026. [Operator Instructions] Now I will hand the conference over to IR Jonas Erikson. Please go ahead.

Good morning, everyone, and welcome to this conference call for Balder's Q2 2026 results. With me in the room, I have Sharam and Ewa, our CEO and CFO, who will take you through some slides initially, and then we will open up for questions.

Thanks, Jonas. Yes, most of you have seen this picture before, but I think it's good to show it again. Our portfolio is roughly half residential and half commercial. We have a portfolio value of SEK 241 billion and occupancy rate of 95% and net debt of SEK 50 billion. We have a good liquidity of SEK 23 billion. NAV per share stands now at SEK 94.3, and that's a growth compounding rate of 24% since the start of Balder. Our credit rating from S&P remains at BBB with a stable outlook.

If you look at the figures for the second quarter, rental income is up 5%. Profit from property management is down 10%. But if you adjust the comparative figures for the effect of distribution of Norion, we instead have an increase of 3%.

Our funding costs increased from last year, but at a lower pace than our portfolio has grown. We have also a bit higher central admin expenses. And that is partly because of slightly higher activity in new development and partly because of -- because we are investing a bit in digitalization and making our central functions more streamlined. The effect should be that we can scale the business more efficiently in the coming years.

And on the income side, we also need to work even harder with our occupancy. We have an amazing team, and they always do well even in the challenging market conditions. In current earning capacity, we see an increase of 10% adjusted for Norion's contribution in the comparative figures, which means that we see an underlying healthy growth. Like-for-like rental growth, 1.2% and NAV per share is SEK 94.3, as I said before.

Looking at earning capacity, you can see that the rental income is up and net operation income is up as well. All in all, this summarized down to SEK 6.1 billion and per share, SEK 5.21. You can also see that the per share improvement is a bit better than the profit improvement. And the reason is that we bought back almost 16 million shares in this quarter.

Here is an overview of the portfolio, which is very well diversified. Helsinki is the single largest region, followed by Gothenburg, Stockholm and Copenhagen. And the residential side of the portfolio represents a little bit more than 50% of the portfolio. Office stands for 16%; retail, 11%; Industrial logistics, 7%; and other stands for 13% and hotel are the majority of that.

Looking at the whole portfolio, you can see that 80% is located in capitals and larger cities. We have always had a long-term view on the business, which, of course, will continue. If you take a longer time horizon, we have a real good improvement over the years. The latest 3, 4 years has been flattish, obviously, because of the interest rates going from 0 and upwards.

Here, you can see the development of property values, net debt to total assets and occupancy. We have, over time, increased the portfolio and net debt is now at 50% in the longer time period. We would like to come down. Occupancy rate is now 95%. And as you can see, it has been very stable, which is an effect of our diversified portfolio. The explanation for a bit weaker occupancy compared to earlier 96% is primarily due to some weakness in the office segment occupancy.

And now I will hand over to you, Ewa, to comment a little bit more about the financing.

Thank you, Sharam. Looking at the financing, the funding mix is more or less a 50-50 split between bank and bond financing. We have a slightly more bond financing as of now compared to last quarter. The level of available liquidity is continuously a bit elevated due to the concentration of large maturities in the beginning of '27.

The interest rate fixing and hedging ratio is stable and the average interest rate is unchanged compared to last quarter at 2.9%. Our funding is now well reflective of the interest rate curve and margins. So I wouldn't expect any significant shifts in our funding costs in relation to the net debt on the cash funding side.

During the last couple of years, because of the volatility in the rates market, we have had the opportunity to enter hedges with optionality like an extendable swap at very favorable rates. It's hard to judge whether these opportunities will continue. If they don't, this might present a slight headwind in our financing costs compared to our normal hedging activities.

Net debt to total asset is up a bit to 50.4% due to the distribution of Norion and to some extent, share buybacks. The ICR is at 2.5 and rolling 12 months net debt to EBITDA is 12.8. Per quarter end, net debt to EBITDA was down 0.3x compared to last quarter.

Here, you can see the long-term trend of the portfolio value in relation to net debt to total assets. As you can see here, as I mentioned in the previous slide, net debt to total assets increased during the quarter related to the distribution of Norion and share buybacks. Current encumbrance level is at 24.5%. And with our current funding mix, we think a level roughly in the 23% to 25% range is where we will be.

So over to the maturity structure. On the bank side, it has been business as usual, rolling maturities. In the bond market, we have been taking advantage of the favorable conditions and issued bonds in the SEK market amounting to SEK 1.6 billion. Currently, our bond funding is cheaper than the bank funding, looking at like-for-like maturities.

This slide we have shown before is a structural overview of the funding and capital side. As we have said before, we will continue to have a balanced capital allocation until reaching our target of 11x net debt to EBITDA, and that target remains unchanged. We expect net debt to EBITDA to gradually come down, but we see no reason to be forceful about it. The direction is more important than the pace of the reduction.

Here, you can also see an updated calculation on the convertible bond, which when that is converting, assuming that we're above strike price, obviously, will have a positive effect on the indebtedness numbers. And in terms of funding strategy, there is no change compared to previous quarters. That was all from us.

And on that note, I will leave the floor open for questions.

[Operator Instructions] The next question comes from Fredrik Stensved from ABG Sundal Collier.

A couple of questions. The first one is, Sharam, you mentioned in the CEO statement that there is some higher central costs and some upfront investments. Are you able to quantify those? And assuming those upfront investments are sort of temporary, anything we should keep in mind in terms of timing?

Yes, I said that. And that is -- some of them are only ones, but some of them is for the digitalization for coming years. And because we think that we can make the system more for -- to put together the other countries in the same system. So maybe for coming years, you can -- it takes 2, 3 years to change the system. And you are not going to see any dramatically changes or higher costs. But I just wanted to start that with this quarter to say that we are going to have these costs.

Let me mention, Fredrik as well. In this quarter, there was a one-off number that was more of a periodization effect between Q1 and Q2. So Q1 was some SEK 7 million, SEK 8 million lower than it should have been normally and Q2 was SEK 7 million, SEK 8 million higher.

So the -- if you look at the quarterly numbers, then Q2 is a bit too elevated compared to the run rate sort of. But I think this -- when it comes to the digitization, we haven't made an exact calculation ourselves, but we're talking about a few tens of millions of SEK annualized this year and about as much next year. So that's what we know now. But the whole sort of program is not set in stone exactly how it will progress. So we'll see a little bit how that goes.

Yes. That's great and helpful. Secondly, you talk about the commercial market moving in the right direction or in a positive direction. Any specific segment that you would like to call out there?

Yes. We see a bit better movement in the office segment in Stockholm, Gothenburg. So we see the trend is positive, but that's all we see. So we see that the trend is positive. And we like that it's in the right direction for now.

And we can obviously see the interest from clients on the different -- in the different segments. So when it comes to like smaller offices, you're talking 100, 200, 300 square meters, there we can see a clear pickup in interest. And then I think when you look at the total volume, you don't really see that yet in the occupancy numbers.

But in terms of market activity, incoming calls and some of those smaller units is where things usually start when there is a recovery, and that we're starting to see. But let's see how much that translates into sort of larger volumes on the total as well. I think that's a little bit too early to make that call.

Yes, that's clear. Final one, maybe a detailed one, but the transactions you closed during the quarter, did those contribute in any meaningful way during the quarter? Or did they close sort of end of period?

Not in a meaningful way.

Firstly, they were not as large as in Q1. In Q1, we had quite a large chunk of transactions that closed really at the end of Q1.

Yes. I would say it's mostly them that contributed this quarter.

Yes. So the transaction volume was much smaller in Q2 and it was not a sort of exaggerated impact in terms of the quarterly effect either.

The next question comes from Andres Toome from Green Street.

I had a couple of questions. And firstly, maybe just on your thinking around capital allocation in terms of share buybacks and putting that into the context of also deleveraging aspiration. So I'm just wondering how do you see that progressing?

I guess, from a deleveraging perspective, leverage ratios haven't really moved down a lot and it sounds like you are maybe looking to deploy capital. I'm just wondering how we should think about that? And how do you see maybe the math in terms of accretion if you do share buybacks today versus paying back debt or buying back debt?

Yes. So I mean, we obviously have several different credit metrics that we track. I think if you look at the last couple of years, the more sort of de facto restriction on our balance sheet has been some of the S&P measures that have been -- well, we still had some margin to where we need to be for our current rating, but those have been sort of the ones that we need to keep closest track on.

So if you look at debt through debt plus equity, where S&P requires us to be at 60%, at least, we are at 58% currently -- or maximum 60%. We're currently at 58% at the end of this quarter. So we don't have a huge amount of room to maneuver. At the same time, these measures can fluctuate a little bit from sort of quarter-to-quarter and year-to-year depending on how the balance sheet develops, obviously. If you look at the last couple of years, we've actually improved our measures quite significantly, but obviously, the distribution of Norion set us back a little bit temporarily.

So I think we feel that we have room to maneuver both on employing CapEx and bringing down the debt level or improving our credit metrics. At the same time, I think the improvement of the credit metrics, we're well in line where we need to be from an S&P perspective, and we don't really feel any stress to improve them quickly. So we can be a little bit opportunistic if we feel that we have good investment opportunities.

In regards to the question about buybacks versus acquisitions, I mean, it's not too difficult to run the math of the sort of comparative level that we need to be at yield-wise for each share price level. And obviously, our share price having come down this year makes buybacks more attractive, everything else equal. So that's how we look at things. It's always a comparison of where the returns are greatest and we will be rational there when we employ capital.

Understood. And then I had another question just relating to, I guess, a little bit of follow-up on the previous one. In terms of the cost side, and I guess in the CEO review, there was a bit of a mention of perhaps finding cost efficiencies. I'm just wondering how much room do you see there? And should we expect sort of margin improvement to come down the line?

I think there are a couple of moving parts here. I mean -- so the current market environment with pretty slow development on the commercial side also means that we have a like-for-like that is a bit lower than what we would expect to have in a, call it, normal year, whenever that is. We also have a pretty low like-for-like still in Finland in our resi portfolio in SATO. But there, we can see occupancy levels and the available apartment numbers are improving slowly but surely.

But the low like-for-like also means that the -- it becomes a little bit more difficult to maintain the same NOI margin as we had last year. So you have a margin sort of impact on that end, firstly. And then on the central administration and those expenses, we've seen a slight uptick. I mean, part of it is just general inflation and wage inflation. But part of it also as we flagged in the report, we've taken some investments both to improve our capacity for project development that has been very slow for a few years now.

And also, as Sharam talked about before, some efforts to sort of digitize our main systems that consolidate all our business so that we can hook on more units onto it and more countries onto it and streamline essentially all central functions throughout the Balder Group over time.

So I think some of those expenses will remain elevated for some time. But we've also said that cost efficiency has been a very sort of a core part of our DNA. And it's obviously something where we cannot be particularly happy about seeing the growth numbers that we're seeing so far this year. So that's something that we need to keep closely track on.

The next question comes from Neeraj Kumar from Barclays.

Just a quick one from my side. I just wanted to understand how do you plan to refinance the upcoming EUR 1 billion bond maturing in January next year? Do you plan to increase the euro portion of the debt by increasing more debt or like just like-for-like replacement of those bonds?

So in terms of our funding activities, I mean, those are essentially already prefunded. So we're typically sort of 15 months prefunded. But I wouldn't expect the mix between SEK and euro funding to change materially from here. A little bit depends on which market between SEK bonds, Eurobonds and the bank market is more attractive at the time. But we are a frequent -- or we're a regular issuer in the Eurobond market.

We have a liquid curve outstanding going out 7, 8 years. And I would expect that to sort of remain pretty much the same over the coming years.

Got it. And secondly, on your hedging profile, you mentioned 75% of debt is hedged. With this bit of change in interest rate environment because of the Iran crisis, is this like -- do you have any change in thoughts on how do you want to hedge the debt profile going forward?

Not really. I mean we have a hedging policy that is designed to be -- the way we think of it essentially is to have a hedging that allows us to have a stable cash flow pretty much no matter what happens in the interest rate markets. You can see that pretty clearly, I think, going back to 2022 to 2024. During that period, we have interest rates coming up significantly.

Our financial expenses obviously increased, but we maintained a profit from property management that was pretty stable throughout that time. And that tells me that our interest rate hedging is working as it should. So that's more how it's designed. We don't really change that very much from year-to-year.

I would just note as well that even though there's been obviously some -- a lot of volatility in the rates market in the curve, I mean, there's not a lot of drama in the short rates. I mean, we still have the same Central Bank rates that we did 6 months ago in spite of this. Let's see how that goes -- develops going forward. But the short-term or variable part of our interest rate expenses hasn't actually moved a lot in the last couple of quarters.

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

Thank you very much, everyone, for listening in. Just get in touch if you have any follow-up questions.

The next question comes from Lars Norrby from SEB.

Just a follow-up on buybacks and how to use capital. You spent some SEK 5 billion on acquisitions in the first quarter, another SEK 1.5 billion in the second quarter. Are you open to do something along the lines of Castellum, for example, that is divesting significant amounts of properties and use that for buybacks? Or can that be ruled out?

I wouldn't rule anything out. I think we -- I mean, we don't have a sort of asset disposal plan, if that's what you ask. But I mean, everything has a price. And if someone comes along and shows interest in one of our properties, that's always a discussion we should take whether our share price is at the current level or not.

So I think that's -- in that sense, we've always been rational in how we allocate capital. But we don't have any sort of active plans of going out selling properties as things are today.

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

Thanks, everyone, for listening in. Just get in touch if you have any follow-up questions. We'll be here throughout the day and week. Thanks.

Thank you.

Welcome to the Balder Q1 Report 2026. [Operator Instructions]

Now I will hand the conference over to IR Jonas Erikson. Please go ahead.

Good morning, everyone. Welcome to this presentation for Balder's First Quarter Results 2026. My name is Jonas Erikson, Investor Relations. And with me in the room, I have Erik Selin, CEO; and Ewa Wassberg, CFO.

I'll hand over to Erik and Ewa for some opening slides, and then we'll open for questions after that.

Thanks, Jonas. Looking at Balder at a glance, the overall picture, you can see that it's a Nordic real estate exposure, roughly half is residential and half is commercial. By this quarter, we had a portfolio value of SEK 237 billion, occupancy rate 95%, net debt SEK 49 million. We have a good liquidity of SEK 22 billion. NAV per share stands now at SEK 96.6, and that's a growth compounding rate of 25% since inception. And also worth to mention, we have a rating from S&P, BBB flat, and that was recently confirmed, that was in April.

Moving on to the first quarter. Rental income is up only 1%. That is quite a low figure, we think. We have some explanations for that. And we have a currency effect that is headwind for us because of the Swedish krona strengthening. So there, you have a couple of percent if you have constant currency. And also in the NOI increasing 1%, you have the same effect and also that it was a colder climate than normally this quarter. So adjusted for that, I think we will be rather 5%, 6% improvement.

Profit from property management is down 12%. And there, you have the explanation in the name of Norion that we will most likely decide to distribute later today in the AGM. So if you adjust for that, the Norion shares will be as a dividend for all the shareholders. So adjusted for that, we have a 3% increase as is. And of course, if we wouldn't have the currency headwind and the cold climate, it will be a bit better than that.

But -- so you can say it's okay. We prefer, of course, a bit stronger increases, but not totally bad. And if you look at earnings capacity, we have a decrease, but the same explanation Norion. So if you exclude that, we are on track for a healthy growth in profit from property management. And like-for-like rental growth 1.3%, NAV, SEK 96.6 as I said just before.

Looking at earnings capacity, our more or less favorite slide perhaps. You see this quarter that rental income is up and NOI is up as well. And why this figure is slightly stronger than the outcome Q1 is that we made acquisitions Q1, but they closed very late in the quarter. Actually, one of them was the last day and another big one was maybe 1 week before quarter end. So this is sort of including all the investments. This is the run rate now.

And all in all, this summarizes down to SEK 6.1 billion and per share SEK 5.17. And you can also see that the per share improvement is a bit better than the profit improvement. Reason is that we bought back 6 million shares in this Q1.

And portfolio-wise, Helsinki is the single largest region, followed by Gothenburg, Stockholm, Copenhagen. And as I said, we have resi a little bit more than 50% of the portfolio; office 16%; retail, 11% and industry logistics, 7%. And this figure has been around these numbers for a couple of years. Looking at the whole portfolio, you can see that 80% is located in capitals and larger cities.

And the long-term trend, that is our focus. We always have a long-term view on things around here. So we had -- if you take a longer time horizon, we have a good improvement over the years. The latest 3, 4 years been flattish and obvious because of the interest rates going from 0 and upwards. And, here you see also property values, net debt to asset occupancy.

So we have, over time, increased portfolio, of course, net debt around 49%. In the longer time period, we like it to be a bit lower, but we have even there a long-term view on it and not so focused by quarters. Occupancy rate is now 95%; it's more or less always 96%, if you look back, but some occasionally, it has actually been 95%. So very stable in general. And the explanation for the bit weaker occupancy is primarily located to some weakness in the office segment occupancy.

Looking at the financing, the funding mix is a 50-50 split between bank and bond financing. The level of available liquidity is continuously a bit elevated due to the concentration of large maturities in the beginning of '27. The interest rate fixing and hedging ratio is stable and the average interest rate is unchanged compared to last quarter at 2.9%. This quarter, we had some volatile currency movements that have temporarily affected some of our key ratios, for example, net debt-to-EBITDA.

In the balance sheet, at the end of March, we see a weaker Swedish krona against the euro compared to year-end. And at the same time, the average exchange rate affecting our income statement during the quarter was stronger against the euro. Worth mentioning is also that Norion no longer contributes to the income statement and the acquisitions made in the quarter have not contributed to the earnings in Q1, since they were finalized late in the quarter. Here, you can see the long-term trend of the portfolio value in relation to net debt to total assets.

As you can see here, net debt to total assets increased during the quarter, which is related to the reclassification of Norion and currency movements. The current encumbrance level is 23.9%, which is around the same level as earlier quarter.

So over to the maturity structure. We have refinanced bank loans of around SEK 8 billion with maturities in '26, during the quarter. And in the bond market, we have been quite active, taking advantage of the favorable conditions in the beginning of the year and have issued in both euro and SEK as well as redeem the remaining hybrid capital.

And here is more a structural overview of the funding and capital side. As we have said before, we will continue to have a balanced capital allocation until reaching our target of 11x net debt-to-EBITDA, and that target remains unchanged. Here is also an updated calculation on the convertible bond, which when -- that is converting, assuming that we are above strike price, obviously, will have a very positive effect on the indebtedness numbers as well. And in terms of funding strategy, there is no change compared to previous quarters. This was all from us. And on that note, we leave over to Q&A.

Let me actually just mention one thing before we go into the questions. So I've been receiving a couple of questions this morning about the consensus numbers. And the sell-side analysts are kind enough to share their estimates with me. And when I sort of look at the profit from property management consensus and strip out the Norion contribution for those who have not yet done so, I land at the consensus number from property management of SEK 1,495 million in the quarter, so about 3% from the actual number. I just wanted to mention that as I've received a couple of questions about it this morning. But, let's open for questions.

[Operator Instructions] The next question comes from Tobias Kaj from Nordea.

Your [indiscernible] yield according to earnings capacity increased from 4.7% to almost 4.9% in Q1 compared to Q4. Is that because of high yield in acquisitions? Or is it an improvement like-for-like?

Well, I haven't actually done that reconciliation Tobias. So let's get back to the precise numbers. I mean we have done some acquisitions, as Erik mentioned in the quarter. And I think it's fair to assume that on average, those are slightly yield-enhancing, but that shouldn't be that big of a difference considering our total portfolio size. And then obviously, you had some like-for-like -- some like-for-like growth as well, as we mentioned in the report of 1.3%. But I haven't done the exact reconciliation of those numbers. So I would have to get back to you on that.

And if we look at the improvement in NOI and earnings capacity of SEK 300 million and put that in relationship to SEK 5 billion of acquisitions, you get a yield of roughly 6%. Is that a fair assumption that you buy on roughly 6%? Or is it something else that explains the improvement in earnings capacity?

I mean, be just careful that we -- the earnings capacity is obviously rounded up to even SEK 100 million, so you can't get too precise in it. But I think it's fair to say that we're definitely buying at sort of a yield accretive level, then there are very large differences in the initial yield of the various transactions that we are doing. I mean there's a pretty wide range depending on whether you're buying, sort of, larger properties, central locations, very liquid markets are pretty efficient in pricing. You might be able to find attractive deals in terms of, sort of, future rent increase potential, but those are more rare, whereas we have other examples where we do transactions in the high single digits in terms of yields, but those are then obviously much smaller and more rare to come across.

So it's -- I think we mentioned in the report as well that we obviously always compare the returns on acquisitions with share buybacks when we do things. And, I think overall, we are seeing that we are getting returns that are matching very well with sort of buyback as an option if you look at sort of how the share price has traded overall for the quarter.

The next question comes from Lars Norrby from SEB.

A couple of questions from my side. First of all, you mentioned it's been a cold first quarter, increasing cost for heating and snow removal. Can you quantify that roughly in SEK?

We haven't done that quantification, Lars. I mean, it's obviously very difficult because we -- there's no precise estimate. But I think if you look at our surplus ratio, that is slightly elevated compared to what we're used to. So it's a few tens of million SEK, but I can't give you a precise number because it's impossible to make that estimate.

Second question regarding net debt-to-EBITDA isolated in the quarter...

Sorry, Lars. I would note, though, that there was a very, very cold winter both in Sweden and in Finland, so I mean, those are the two markets where that's most visible, just to be aware.

Okay. Second question regarding net debt-to-EBITDA. isolated in the quarter, 13.6x, up from 12.2x. Norion impact, was it 1.1x. So still an underlying rise 13.6x, retaining target of 11.0x. What does that mean for your room for expansion in 2026? You bought a property in London for some SEK 3.2 billion. Do you have any room for more acquisitions in 2026?

I would just be aware of a couple of things when you look at the Q1 numbers isolated. So the first one is that in the quarter, the average exchange rate meant that the Swedish krona was strengthening. So we had a weak result compared to Q4 on currency effects, whereas the exchange rate on the 31st of March compared to year-end actually meant the krona was weakening, which means that we get a higher net debt. So that technical effect will obviously even itself out over time.

The other one is, as Erik mentioned initially, we've done acquisitions in the quarter that came in very late into our book. So there's very little earnings contribution, but obviously, they will be visible in the net debt. And I think that item alone, the acquisitions alone, I think, has impacted net debt-to-EBITDA by roughly 0.3x. So those two are important to be aware of. So we don't really view the trend as having turned up the way you describe it if you adjust for Norion. But having said all of that, I think we've said for quite some time that we see a balanced capital allocation strategy, where we feel that we can slowly move towards the target of 11x, while at the same time, have ample of room to invest, both when we find transactions for new development and/or share buybacks.

So I think that's sort of the best guidance we can give. And then if you look a few years ahead, let's see where the share price is in 2028, when the convertible expires, but we are sort of assuming that we will have some equity contribution from that as well. So we view this from a more long-term picture and then we can have a very balanced view. And I think we've said before that we care more about the trend and direction of the net debt-to-EBITDA than the actual pace that might vary a little bit from year-to-year.

Okay. Just let me finally say, Erik, thank you for your time as CEO and looking forward to having you in your new role in the company. Thank you for that.

Thank you very much. We keep in contact.

The next question comes from Andres Toome from Green Street.

A couple of questions from my end. Firstly, can you share your thoughts just around what made the London acquisition in the office segment attractive for you, I guess, relative to other sort of alternative options you had for capital deployment? And do you plan to scale the London portfolio further from here on?

I think -- I mean, we -- when looking at that transaction, we have an initial yield that is not, sort of, perhaps the highest of all the transactions we did in the quarter. On the other hand, we have a current rent per square foot that is quite a lot lower than the market. So when you look at the total, sort of, investment assessment from a 3- to 5-year perspective, we feel that, that is actually a pretty good transaction considering the risk level as well and even compared to allocating to other sources.

We now have 3 properties in Central London, office properties, and we have -- the last transaction we did before this one was, I think, 3 years ago. And we've been viewing the market continuously. It's obviously very hard to say when the next transaction occurs that we find attractive enough. We've looked at sort of quite a few alternatives without executing on anything during the last 3 years. So far, we don't sort of have a plan to do a large-scale build-out in the U.K. per se. I mean we don't have our own property management team on the ground, et cetera. I think we need to do probably a few more of these smaller transactions before we have scale enough to justify having our own team on the ground fully. But we're looking at the market. And if we find good opportunities in London or elsewhere, we might act on that. But it's very hard to determine. We don't typically work with strategies of having predecided CapEx levels or investment spend levels.

Yes, makes sense. Okay. And are you going to use local financing for this? Or is it more from the corporate pool?

Well, a little bit depends on how we view it. So we obviously don't take currency risk in our financing. So from that perspective, it will be matched. But then we obviously have our banking relationships and we might do a pool and then just do a swap hedge or we do the financing directly in sterling. It doesn't really matter from that sense. But there's no FX risk embedded in the investment calculation per se.

And then there was a mention of you're, sort of, kicking off owner-occupier apartment investments again. I'm just wondering how are you seeing the, sort of, the geopolitical macroeconomic impact, I guess, not really having a big impact then on the housing markets locally?

I mean not so far. I think it's probably early to tell whether it will have. But so far, I think we've seen a fairly stable recovery domestically, especially on the consumer front. I think in Denmark, in the larger Copenhagen area, house prices were up 21% -- 22% in Q1 year-over-year, that was actually even in April. So it's a pretty good improvement that we're seeing. It's always difficult to judge exactly the strength and the timing. These kind of projects also take some time to execute. So you can't really be too much of a mark-to-market sort of decision-making, when taking those decisions. But we feel that there is an improvement trend that is worth investing a little bit more in. There's no large numbers compared to what we have been used historically in terms of development CapEx [Technical Difficulty] we have done in the last couple of years.

And then my final question, a bit technical, but the like-for-like growth of 1.3%, is that in local currency? Or does that also have a negative FX impact embedded there?

No, that's in local currency. For those of you with a good memory, you might remember that last year, we were trending between 2.5% and 3%. I think the difference this year is partly that we have seen a slightly lower indexation on commercial. We have also a slightly lower growth in Swedish regulated rents by about 1 percentage point. So there's a slight drop from last year, and we haven't really seen our Finnish market rents of resi, sort of, take off for really on a like-for-like basis. So at some point, we're obviously hoping that, that will contribute a bit more to the like-for-like numbers. But so far, that is not really the case.

The next question comes from Fredrik Stensved from ABG Sundal Collier.

Two questions, if I may. The first one is sort of a follow-up on the question related to project starts in the residential segment. The comment you write in the CEO letter, Erik, is that specific to Sweden? And is it specific to, sort of, build-to-sell apartments? Or is it several markets and also rental projects?

Yes. We are looking at -- or we will do one start in Copenhagen. It's a project we will be both build-to-rent and build-to-sell actually. So it's a mixed product. Also in Sweden, we do build-to-sell and build-to-rent, mostly build-to-sell actually. But as Jonas said, this is very small numbers compared to what it was historically. And compared to overall Balder, it's very, very small. But we see actually that we can -- if you have good locations, you can do quite good business, quite good investments actually.

So starting to getting better. And as also Jonas said, Copenhagen year-over-year, it's like 23% plus in prices. And remember, we own only owners apartments. So the market is really super strong, and it continued in April as well. So in Finland, we will not start anything, it's too weak. And we are quite small in Norway, but we have something maybe that can happen there as well. Also a strong underlying market in Norway.

And then the second question is on the acquisition volume in Q1, almost SEK 5 billion. We obviously know about sort of the London deal. But can you add any color or details on the other assets or portfolios that goes into the SEK 5 billion?

We did a couple of resi purchases, one in Sweden, [indiscernible] one in Finland from a fund. And then we bought some assets in Stockholm, Gothenburg, some in Finland, Norway. So no big deal, but when it sums up, you get to SEK 5 billion. But you can expect lower activity in Q2.

And given your previous comment that the contribution then in Q1 was fairly limited, I guess that goes for most of these smaller...

Yes, exactly. I mean, for example, Finnish [indiscernible], the contribution was exactly 0 because we bought it the last day and didn't get the rents on that day. So it was actually 0. And U.K. was a couple of days only and the one in Stockholm was 0. So that explains if you compare Q1 to AI that you have a difference there. That's a explanation is we -- the acquisitions came in almost the last day of the quarter.

The next question comes from Stefan Andersson from Danske Bank AS, Denmark, Sverige Filial,

Two questions from me. First, on capital allocation, where we stand today with the share price of Balder, how do you view allocating capital towards acquisitions versus repurchasing?

I think we are very interested in repurchasing, obviously, at this share price. So we think it's a very good deal. But you have to also have in mind that, number one, we have a long-term view on the business to take care of that. So some investments make sense to do if you have a longer view on it and also deals can take 3 to 6 months. So if you're in a deal, you cannot tell the seller, if my share price moves around, I might not be there, then you'll absolutely ruin your reputation. So it's not like trading equities. This is a business we're running. So that's why if you know everything before, you could have perfect timing, but we actually don't. So -- and what if we say no to a good deal with the intention to buy shares and it goes up, and then we end up with no deal and no shares. So it is a combination. But the current share price, we are very -- we like that a lot as an investment.

The second question is if you could elaborate around Entra maybe. I mean my impression is that Castellum is looking to exit that at one point or another, and you take -- it's a big change on the Board there. I fully understand that you don't -- can't share too much, but could you maybe elaborate a little bit about the alternatives that you see on Entra?

We can do all alternatives basically, but it's not likely that we buy the whole company because it will be too much debt for us. So I don't think that is likely, but then we can be short-term or long-term. So I think you have a difference between Balder and Castellum, but you should really ask Castellum that. I mean, Balder is in Norway anyway. So even if we sell Entra, we're still in Norway. So for us, maybe it's more natural to own it. But I don't know -- I think that can be a difference between the companies. Otherwise, I will look in through it more detail now since I am the Chair there and see what we can do. It's very good underlying assets worth to remember.

The next question comes from Neeraj Kumar from Barclays.

Just a quick one on my side. You mentioned the 50-50 split being the ideal one for you guys between bank and bond financing. I wanted to hear your thoughts on the ideal financing split for your subsidiary, SATO as well. I see it's more like 30% bond financing as of now and 70% is through other sources. So do you think -- do you see SATO coming to bond market to refinance their bank maturities going forward?

I think it depends a lot on the terms actually. SATO has extremely good access to bank financing. So they don't need bond financing. But obviously, we like to have that diversified as well. But we view it on a group level a little bit. And then also we view it on SATO as an individual company because we have partners there, APG and the Elo and Finnish state. So I would say SATO will do pretty much like Balder in the long run.

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

Thank you very much for listening in, and we keep in contact.

Welcome to Balder Q4 Report 2025. [Operator Instructions].

Now I will hand the conference over to IR Jonas Erikson. Please go ahead.

Good morning, everyone, and welcome to this call for Balder's Q4 and Full Year Results 2025. With me in the room, I have Erik Selin, CEO; and Ewa Wassberg, CFO. And we will run through some slides as usual, and then open up for questions.

Erik here. If we look at Balder at a glance by year-end, we have a portfolio value of SEK 229 billion, and the composition is 54% resi and 46% commercial. Occupancy rate at 95%. We have good liquidity, SEK 24 billion, debt to assets, 48.1% and NAV is SEK 94 in this quarter. Looking at the Q4 numbers specifically, we have rental income and NOI up 4%, and it's important to bear in mind that this is in Swedish krona that has been pretty strong lately.

Profit from property management in earnings capacity goes down 7%, and that is connected or explained by our proposed distribution of Norion share as a dividend to the shareholders. And also important to just bear in mind that if we look at year-end figures, the dividend is roughly SEK 5.25 per Balder share, but NAV will decrease SEK 4 per share. And like-for-like rental growth is in the positive territory of 2.7%. And here, we have the earnings capacity then updated in more detail. And there you can see Norion effect is on profit from associated companies that goes down, but that is totally explained by the Norion distribution that we will most likely do after the AGM.

So now it's the balance sheet booked as another asset that will be distributed, and that's why it will not be included in earnings from this year. So with that, we end up with SEK 6 billion and SEK 5.06 per share ex-Norion. The portfolio is 80% in larger city and capital, as always, and we have the usual one, Helsinki, Stockholm, Gothenburg, Copenhagen. And you can see the split also residential, 54%, as I mentioned, and then you have office 15%, retail, 12% and logistics, 7%. The longer-term trend is that we have been having quite a good increase over the long time period in profit from property management. This curve is only 10 years. But if we look back another 11 years, we have a long good trend. The latest year has been sort of flattish, and that is, of course, interest rates moving from 0 and upwards. And in our case, we more or less compensated with higher income. And we also had a lot of fixed interest rates. So the effect came gradually.

But then having said that, if interest rates are flat, then the long-term trend will be that this curve will start to go upwards again. And here, we can also see development for property value and LTV and occupancy. So LTV, 48.1% and occupancy now is 95% is rough -- it's almost always 96%, but every now and then it happens with 95%, and this is whole percentage points. So behind that is actually sometimes that move up or down, and then we round it up to 2%. So we think this is an okay result, and thanks to our organization for achieving this stable development year after year after year after year.

Looking at the financing, the current mix of funding is largely where we want to be, which is 50-50 split between bank and bond financing. The level of available liquidity is in line with last quarter, which is a little bit higher than usual. And we will also continue to have slightly higher liquidity during '26 due to higher concentration of maturities in the beginning of '27. The interest rate fixing and hedging ratio is stable and the average interest rate is unchanged since last quarter at 2.9%.

Yes. So here, you can see the long-term trend of the portfolio value in relation to the net debt to total assets. As you can see here, net debt to total assets continue to go down a little bit. And the current encumbrance level is at 23.4%, which also is a reasonable expectation for the future given our funding mix that is somewhere between 20% and 25%. So over to the maturity structure. If we start with the bank loans, the maturity structure is a result of the Swedish bank financing. It's typically quite short, even though we have bank financing in other countries as well. So on the bank side, it has been business as usual, rolling maturities. If you look at the bond side, we have more maturities in '27, which is the reason for the higher liquidity position. The funding market is very strong. And in such a situation, we might maintain a slightly higher level of liquidity as the cost of additional liquidity is small relative to the security it provides.

And here is more sort of a structural overview of the funding and capital side. As we have said before, we will continue to have a balanced capital allocation until reaching our target of 11x net debt to EBITDA, even if the distribution of the Norion shares as a dividend will temporarily work in the opposite direction. Here's also an updated calculation on the convertible bond, which when that is converting, assuming that we are above strike price, obviously, will have a very positive effect on the indebtedness number as well. And in terms of funding strategy, there is really no change compared to previous quarters. And that was actually all from us. And on that note, I will leave the floor and open up for questions.

[Operator Instructions] The next question comes from Stefan Andersson from Danske Bank A/S, Danmark, Sverige Filial.

A couple of questions -- sorry, a couple of questions from me. Starting on Norion there. Just a little bit curious on the technique on that one. Earlier distributions we've seen, there's an -- just before the distribution, there is an adjustment of the value to market value. So like it was a write-up made when Anaheim was distributed. Now I guess 2 questions in one here. I guess the valuation right now after the drop here is similar to what you have in the books on group level. But will you have such an adjustment of value before distributing? Or are you going to net it out somehow? That's the first question. And the second question is when you say distributing SEK 5.50 and the NAV drop is 4%, is that based on the year-end valuations? Or is that based on today's valuation?

Yes. So there won't be any sort of value change before the distribution. So the distribution is sort of separated as of year-end. And now it's booked as an asset that will be available for distribution and the NAV will be adjusted sort of accordingly. It's not going to be any value increase or realization gain booked through the P&L. And the numbers are per year-end.

Perfect. Then secondly, B shares. I'm a little bit curious if you could maybe mention a little bit about why are you thinking about issuing B shares? Is it -- is this something you need for the Norion distribution? Or is it has anything to do with the hybrid? Or is there anything else?

No, we don't need it for Norion or hybrid. It's just to have optionality going forward. So it's a practical way to be able to do it. And then we add that when we have the AGM instead of potentially if we need it later, have an EGM.

Okay. Then I'm a little bit curious about your thinking about repurchasing your shares. I mean the -- with the NAV growth and the stock flat, the discount is increasing even further. I've seen that you made some acquisitions, and I guess you have to evaluate the capital allocation on that. So right now, do you see actually any good options or alternatives to the Balder share actually?

Difficult to tell beforehand. But I think we can do both, as we said last quarter. So it's possible that we buy some shares and do some investments at the same time. But the split between those is a bit depending on share price and what possibilities comes around.

Yes. On the co-ops, the apartments business there, with the loss that came through and has come through the year, what is your thinking there? Have you started to discount stuff? Or is it more a volume issue that makes those unprofitable?

No, we have running cost, and we took over some apartments in Karlatornet that was slightly negative when we sold them. So it's highly likely that, that figure turned positive this year.

Okay. Good. And then I guess I won't get an answer, but I answer anyhow. I mean, I hear what you're saying with the liquidity that you've had now for a while on a relatively high level versus history and even though you say it's cheap, but it's still costing you a little bit. Is that something that you use to have some maneuvering room to do some bigger transactions? Or is it purely just to wait to pay out in '27?

The majority of it is because we have a lot of maturities in Q1 '27. We have 2 euro benchmark bonds maturing in the same quarter. So that in itself will lead to a liquidity position that is sort of SEK 5 billion, SEK 6 billion higher than usual up until we've had those maturities. Then I think you also have to look at how the pricing in the funding market is from time to time. If you see attractive pricing, if you have a lot of incoming interest from investors, you might issue a little bit more or you do it a quarter or 2 before you have planned. If you issue a bond 1 or 2 quarters, ahead of schedule, and you can do that at attractive pricing that might still make sense even if you actually carry a little bit higher liquidity cost. We're trying to optimize and think sort of 24 months ahead in terms of maturities, liquidity needs and how the market is currently and what we see on the horizon. And we try to optimize it from there.

The next question comes from Jan Ihrfelt from Kepler Cheuvreux.

A couple of questions from my side. I start off with rental agreements on your resi here in Sweden. How have that developed? And are you able to give any guidance on maybe a possible range where it could land?

So most of them are finalized. So we landed at slightly below 3.5%, 3.2%, 3.3%, I think.

Okay. Okay. And my second question relates to Finland. There has been a quite heavy oversupply in the market there for some years. We see some early signs on maybe lower vacancies, but could you give a short -- I mean, put a little bit more flavor on that market just in terms of vacancies and rents?

I think there's no change to our sort of outlook for the medium term. There's been quite a drop-off in new supply coming -- de facto coming to the market. And with that, we know that occupancy should go up steadily. And at some point, there will be an increased sort of pricing tension in the market as well. It's very difficult to find this, I think, on a quarterly basis. What we can see in the later part of 2025 is that it actually has slightly less impact on the occupancy compared to what we had expected. But that might also be temporary issues in terms of how migration flows move. So the official statistics in terms of people moving into the urban areas is still very strong actually.

So we feel that the picture is very similar to what we've said all along, and it's difficult to time it from a quarterly perspective. But if you think about the big picture, I mean, we've had in the last 7 or 8 years, hardly any rent increases. At the same time, disposable incomes are up by 25-plus percent. There's no issue with affordability. We know that new supply is falling off a cliff. And we see that in some of the cities where that has already happened, you see pretty quick recoveries in occupancy actually. And at the same time, you have a sort of unabated movement of people to the urban areas. So from a pure mathematical standpoint, something new needs to happen for this not too many recovery in the coming couple of years is our view. And let's see when and how and in which order things happen.

Okay. If I interpret, you're right that the lower vacancies hasn't impacted the rent levels to any extent or.

No. I mean there's always some seasonality in the Finnish market. So we can't see any sort of trend shift yet. That's a little bit too early, I think.

Okay. And my last question regards your key ratio net debt to EBITDA, which is currently at 12x. You have a target of 11x. And my question is really how eager are you to bring it down to 11x for 2026?

We've said that's a long-term target. And obviously, the Norion distribution will deteriorate that number slightly. So we set us back a little bit. So I think you need to look at it. I think we've said for a few quarters now that we care more about the direction and the pace of change in the current market conditions. We also know that we have in 2028, the convertible presumably converting into shares, which will obviously support that number slightly as well. So I think you should see it as a directional statement and in terms of where we want to end up, but it's not the 2026 target.

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

On the Class B shares, so hypothetically, if you were to issue those today, what would you do with the proceeds?

I mean there are no such plans. I think it becomes very speculative. We haven't sort of made this disclosure because we have any plans of doing a new issue of the shares. We want to get it into the docks so that we have the opportunity and possibility to do so. So there are no plans currently at all. So you shouldn't see this as a preparation for raising more capital.

Okay. That's clear. And then if you -- given that you're looking into this flexibility, how do you think about dividend distributions on Class A and B shares?

I think we -- I mean, we have had a capital allocation that has been very flexible for a very long time. And I think that we will be eager to remain flexible on that. If we, hypothetically speaking, should have the shares outstanding, we obviously need to change the dividend policy to accommodate that. But I wouldn't expect that you shouldn't draw the conclusion that, that also means that we will become a regular dividend distributor on the B shares. And we will pretty much, in that case, do what is required to cover the coupon or the dividend for the B shares.

And then the rest will be a capital allocation decision as per usual where we really will always prioritize investing in the business and/or doing share buybacks as a means of employing capital, then if we sort of really find no attractive ways of employing capital in an accretive way, then obviously, at some point, the distribution of a dividend becomes the remaining choice. But that principle will still stand in regards to the B shares. And there might always be a little very small dividend because from a rounding error perspective because you can't pay exactly the amount to cover the B shares only, but it's not going to be any material numbers as a default.

The next question comes from Lars Norrby from SEB.

A couple of questions on the earnings capacity. Now focusing on the profit from property management line, SEK 6 billion. It was SEK 6.6 billion in the Q3 report. And obviously, you're now excluding Norion. What would the number have been in the Q3 report, excluding Norion? Is it -- we see the change in the associated company line some SEK 700 million lower. So would it have been SEK 5.9 billion? Is that the way to interpret it?

Honestly, I don't actually have the exact numbers we have in the model. I mean they're always -- given that we give rounded numbers to equal or sort of rounded SEK 100 million, I don't want to say which side of that we would end up if we hadn't had Norion in Q3. But mind you also, there's quite a lot of FX movement that has taken place in the last couple of quarters, and that's obviously impacted the total profit from property management side as well.

So I think that's worth keeping in mind, you've had some weakening, especially year-over-year, you've had some pretty noticeable weakening of the NOK, which impact the associate line in terms of you also have obviously the strength vis-a-vis the euro, which will impact everything we have in Denmark and Finland. So that's part of the development that you need to factor in as well. But I think if you just look at the way things are accounted for, Norion is accounted for as a proportion of their -- it's pretty easy to the precise contribution for last year.

Okay. Second question on the earnings capacity. What type of impact and to what extent have CPI indexation on the commercial side from the 1st of January and for that matter, new rents in particular are in the Swedish resi portfolio, how much has that affected rental income in the earnings capacity since it's unchanged compared to Q3?

We always factor in all negotiations discounting and all the indexations that we know of when we cross the year-end. That is being factored in. I would say the unchanged part is more of an FX movement. It's currency who lowered down the number actually. So in constant currency, it would be higher, of course.

The next question comes from Fredrik Stensved from ABG Sundal Collier.

I just have one follow-up. On the occupancy rate, specifically for the industrial and logistics segment, it looks to be down 3 percentage points Q-on-Q. In the same time, rental income is up. So I'm trying to sort of understand the sequential move. Is it Balder acquiring vacant properties in this segment? Or is there something else happening here in between Q3 and Q4?

I actually need to dig into that number a little bit further. I don't quite recognize it. But I know we've done some acquisitions that has impacted the number, as you say. But I can't say whether that is the full explanation. Can I get back to you, Fredrik, on that?

Yes, absolutely.

The next question comes from Pranava Boyidapu from Barclays.

You mentioned that Norion Bank is no longer included in the profit. So it's not in the P&L numbers. Does it mean that it's also not in EBITDA and hence, the net debt-to-EBITDA 12x leverage is already excluding Norion. So upon distribution, it shouldn't change on that basis?

No. So sorry for being unclear there. So it is included in the reported numbers for Q4 and the full year 2025. But in our report, we have something called the earnings capacity, which is more of a snapshot as of the 31st of December as a proxy for annualized earnings given the portfolio we have at the 31st of December. And in there, we have excluded Norion. So if you want to look at that as some kind of forward-looking earnings capacity, there, Norion is already excluded. But the 12x net debt to EBITDA still includes Norion shares. So that will be impacted by 0.89%, something like that negatively.

And you also -- you're doing your share buyback presumably, but also you talk about the convertible in 2028. Would you say that taken together, the impact on leverage should be broadly neutral?

I think the major impacting factors between now and if you take a 2-, 3-year perspective is obviously that we have an underlying growth in our earnings and EBITDA. We have a cash flow annually that improves the balance sheet position as well. So I think those are sort of probably more impacting in that time horizon compared to the buybacks that we've done so far at least and compared to the conversion of the convertible. So the convertible would be corresponding to roughly 1 year's free cash flow for the company. So it more depends on how we sort of steer the balance sheet from here in terms of growth opportunities and potential buybacks depending on where we find the most value really.

Sure. That makes sense. And then just one final thing for me. There is a small amount left on your hybrid, which -- who have a first call in 2026. So I was wondering, is that included in your bond maturities as 2026?

No. So that's recorded at the formal maturity, which is longer. So we think we have sort of a couple of billion SEK to SEK 3 billion outstanding remaining of that, but it's not recorded in the '26 maturities.

The next question comes from Andres Toome from Green Street.

A couple of questions from my side. Firstly, just maybe on Finland residential. I was just wondering what are the sort of implications you're seeing in the market from the housing allowance rolling off and then sort of stricter rules also on permanent residency coming in, in January. Is that sort of impactful for the rental market as you see it?

It's difficult to know exactly what is doing exactly what it should have some effect, but it's -- for us, it's impossible to quantify it. But I mean, it's happened. So from now on, it's already -- I mean, it's there.

Right. And then I guess the housing allowances, they already were coming off. So is there, I guess, some sort of a demand impact you're seeing maybe on smaller apartments because I guess students would have used them a lot as well in the past.

Most likely, but I mean, it's impossible to know exactly right. I mean -- but most likely, that have been the effect, most likely. It must have some effect if you take away subsidies. But for us, it's impossible to quantify it. But could explain some of the weakness, absolutely.

There is a tendency in 2025 that the population growth does not fully correspond to the occupancy increase. There's a slight dispersion between the 2. So that suggests that there, on average, should be slightly higher number of people living in each apartment compared to the previous year. That might be one such impact. But I think the important thing from our perspective when we both sat around the business and we think about it strategically is that, as I said before, you've had a number of years with too high supply into the market. There's one of the best affordability situations that we've ever seen.

And we all know that the Finnish economy has been pretty weak in the last few years, but it doesn't take away the fact that there is a large need for housing in the urban areas. We have that available. We feel pretty good about the sort of medium-term perspective in that sense. Then you might always have some of these more technical factors impacting the quarterly development from time to time. But I wouldn't say it changes our view on a couple of years horizon.

Understood. And then maybe on Denmark residential as well. I guess there was quite a lot of noise in Copenhagen with municipal elections around rent controls and things of that nature. But I guess what are your views around that in the sense that could this become sort of a national debate? And could it be the case that buildings built after 1992 could become sort of strictly regulated as well?

I think there's already a regulation in place in Denmark, which basically stipulates that when you first move into an apartment, then there's a market rent setting from there on, the property owner can only index by CPI. That's sort of fair model that is transparent and easy to sort of understand for all parties, definitely protects the tenant. And in some cases, you obviously have buildings where tenants have been staying for a very long time. So -- but let's see what happens. It's impossible, I think, for us to speculate on potential regulatory changes. But there's even been discussions in -- by some of the political parties in Sweden to adopt the Danish model into the Swedish system because it is balanced between having on one hand, the market economy at the same time protecting tenants. But let's see. I don't have any sort of great insights into what might happen to the Danish regulation.

Got it. And then final question, just on capital allocation. I just wonder where do you see sort of best opportunities right now if you look across sort of your own portfolio, where would you like to add exposure also being cognizant of what's available in the market? And I guess, adjacent to that, for hotels, you have some exposure and there's this large portfolio from Pandox on the market. Is that something of interest perhaps?

I don't think we will be buying from Pandox, if I'm guessing. I don't think so. But otherwise, we're very happy with the hotels, and it's been a good year in -- especially Copenhagen, if you look at RevPAR and occupancy and stuff. Otherwise, we do, as always, we look at the -- basically in the Nordic market and try to see what makes sense to add to the portfolio. to increase the shareholder value over time. We don't decide before what's good or bad. It's all about pricing.

The next question comes from Othman El Iraki from Fidelity International.

Just a follow-up on previous question on the hybrid. Just taking your latest thinking, are you still thinking that you don't need the instrument in your capital structure and that you would call this year? That's my first question.

We haven't announced that we will make an announcement before we call it and say, but in the past, we always call it first call date. We felt -- and we've said this before as well, we felt that the hybrid instrument is a bit complex as it says. It tends to be very attractive cost of equity in good times and less good times in the credit market, it becomes a bit more cumbersome to roll the outstandings forward. And you also have an optionality in there that is embedded that you pay for, but in practice, you can't really utilize. So far, we've come to the conclusion that we are not looking to issue any new hybrid at this point. And obviously, things might look different, I guess in the last, let's take that in.

Okay. And my next question is on the Norion distribution. Have you been in touch with S&P? And are they fully involved in that?

Yes. I mean we've been -- this has been announced quite a long time ago, and the growth informed even before it was announced as well. So this is already sort of part of the plan and should be part of their modeling for the future since -- well since 6 months back basically.

Okay. So you don't expect a negative reaction from S&P?

No, that would be immensely surprising.

Okay. Okay. And my last question is, given where the bond markets are at the moment, pretty hard to say the least, how does that compare to your bank funding at the moment?

A little bit depends on how you look at it. It's always difficult to compare side by side because one is secured, the other is unsecured. You might have slightly different tenor structures, et cetera. But I would say, currently, we are roughly on par between bond financing and bank financing, a little bit depending on which market and tenors you look at it. Bonds might actually be slightly higher than the bank financing in the short-term.

The next question comes from Pierre-Emmanuel Clouard from Jefferies.

Yes. Just coming back on the Class B share that you may want to issue. Just to fully understand how you are seeing it. So you said that you want to streamline and simplify Balder with the Norion disposal, which is a fair assessment in my view. But you want to add a new class action that would, in my view, further complexify the structure. So just to understand how do you view this item? Is it equity or perpetual debt for you first? And if that's equity, would you keep your current internal metrics unchanged as like net debt to total assets of 65%?

Yes. So there's no change in our view on the financials or credit metrics at all. Class B shares -- sorry, we should probably have specified that in the report. So the Class B share is an instrument that is pretty common in the Swedish market, which is a fully -- it's an ordinary common equity class of shares. The differential is between the B shares or the current outstanding shares is only in terms of the dividend distribution. So that's the difference.

And in the Swedish market, the custom is that you always pay a dividend, which is enough to cover the dividend coupon on the B shares at least. So it's actually from a credit metric standpoint, capital standpoint, there is literally no change. There's no difference in -- compared to ordinary shares in a liquidation situation. There's no difference from an S&P perspective. There's no difference from an accounting perspective. It's all part of the same common equity. The only thing is that you differentiate between 2 share classes and who gets a dividend first.

Okay. I'm asking the question because as you know -- as you may know, some investors could classify the Class B shares as perpetual debt, but it's open to debate. And my second question.

Sorry to interrupt you. I think there are instruments that might be open to debate. I don't think Class B shares is one of those that might be open for debate because there is no -- in the past, there's been quite a lot of companies that used and ourselves included actually a number of years ago, they use pref shares of various kinds. Those had in addition to the dividend preference, they also had a differentiation in a liquidation situation and they also had accumulation of unpaid coupons.

So the difference here and the reason why S&P credits this as a fully 100% equity and why it's accounted for as equity is that there is no such thing. So if the company can afford to pay a dividend, these guys would, in theory, then get their dividend first. But there is nothing binding the company to -- in a stressed situation, leaking cash flow. So this is actually not one of the instruments that is difficult to interpret in that sense.

Okay. I understand. And my second question is on your top line growth expectations. So can you guide us through the like-for-like rental growth for 2026? And what is your estimated indexation and occupancy changes for this year?

No, we don't give any outlook in that sense. So in 2025, we had a like-for-like of 2.7% for the full group. This year, we will have -- if you just look at the delta, this year, we will have slightly lower indexation for the Swedish resi portfolio. Then I think in Denmark, there shouldn't be a large change. The Danish inflation and CPI indexation has been pretty low for some time now already. So that should be pretty similar to what we saw last year. There's not been any dramatic changes in the Swedish CPI numbers either on the commercial side. It will more be a matter of what pricing tension you will see in the market based on how occupancy moves.

And then the Finnish resi market, as I alluded to before, we see that occupancy is going up. And at some point, we should have slightly better pricing tension in that market. It hasn't happened so far. Let's see when that starts happening. It's difficult, I think, to give a precise prediction of that. But the trend, I think, is in our favor there. So I think that's broadly what I can give you. So it should be fairly similar, slightly lower probably due to the Swedish resi on a pure like-for-like basis, then obviously, you will have the reported numbers being impacted by everything from transactions to FX movements, et cetera.

Okay. I see. And maybe a final question, as a follow-up on Swedish resi. Do you see a lot of opportunities currently on the market? And do you have any clue on the pricing?

Do you mean sort of final transactions in the property.

Yes, on portfolios that could be on the market currently, actually.

If you look at the transactions that we have done in the last 12 to 18 months, and we tend to like do transactions where we can get an accretion in terms of yield compared to what we already own. I mean the first test is obviously that it needs to be in a location where we want to be and where we have our property management organizations in place. But other than that, we want to have an accretive impact on the full portfolio when we do incremental transactions. And we have been extremely tilted to the commercial side in the last 18 months and the transactions we've done on the Swedish side. SATO did an acquisition of 1,000 apartments last summer in Finland.

We've done 1 or 2 smaller resi transactions in Sweden as well in particular cases where we already have a decent footprint in some area and then another property comes out for sale. If we can get a decent yield on that, that might be worth doing. But there's no -- I think the pricing is actually fairly both on centrally located commercial and on resi in Sweden, it's not that easy actually to go out and buy things that are accretive compared to our back book yields.

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

Okay. Thank you very much, everyone, for listening in. You know where to find us if you have any follow-up questions during the day. And just feel free to reach out. Thank you.

Welcome to the Balder Q3 Report 2025. For the first part of the conference call, the participants will be in listen-only mode. [Operator Instructions]

Now I will hand the conference over to IR Jonas Erikson. Please go ahead.

Good morning, everyone, and welcome to the run-through of Balder's Q3 results 2025. With me in the room, I have Erik Selin, CEO; and Ewa Wassberg, CFO.

I'll hand over to Erik and Ewa to run through some slides, and then, we'll open up for questions.

Thank you, Jonas. Looking at the big picture of Balder, this is kind of similar to how it looked last years. We have 54% resi of the total portfolio value. That stands now -- the portfolio value right now stands at SEK 229 billion, rating BBB flat from S&P, 95% occupancy and a very good liquidity position of SEK 24 billion.

Looking in more specifically to the Q3 numbers, you can see a rental income increase as well as NOI increase of 7%. Profit from property management per share only 2% up. But looking at earnings capacity, it's 8% better than the same period last year. And net debt to asset is slightly down at 48.3%, and like-for-like rental growth now is 2.9% and NAV per share is right now SEK 93.

Looking at the earnings capacity, compared to last quarter, basically no changes. On the bottom line, exactly the same. We have a bit higher NOI and slightly higher financial costs, and that comes from some new financing, a lot of liquidity and also old, fixed instruments that expired.

The portfolio, as I mentioned many times before, very well diversified, if you look at geographies, property categories and so on. And you can see that the majority is capital in larger cities. And we have Helsinki, Stockholm, Gothenburg, Copenhagen dominating this. And on categories, as I mentioned in the beginning, resi, 54%. And then we have office, retail, other properties and logistics. Office is 15% of the total.

And looking a bit longer back in time, we had since the inception 20 years ago focused on cash earnings basically that over time, increased earnings capacity and cash flow. And with that follows NAV increases over time also. We have had now a couple of years with a flat earning. And as you all know, that is because of rising interest rates. But hopefully, we can see a bit better trend when interest rates now are -- seem to be stabilizing at the current level.

And also, if you look at the longer term and look at property value, debt to asset or occupancy, you can see a very stable development in occupancy and debt to assets, even if we look back 10 years, and property portfolio has been increasing gradually since we are normally investing the cash flow.

Yes. Looking at the financing, the current mix of funding is largely where we want to be, which is the 50-50 split between bank and bond financing. The level of available liquidity is in line with last quarter, which is a little bit higher than usual. And this is in line with our planning for upcoming maturities since we have some larger Eurobond maturities during the beginning of '27.

And if you look at the interest rate fixing and hedging ratio, it's stable, and the average interest rate is now 2.9% compared to 3.0% last quarter. And as you can see here, net debt to total asset is a little bit stronger than last quarter, and the encumbrance ratio is stable. It's a little bit down since last quarter, since we have more unsecured financing. And we have said that we think it will be around this level over time based on our strategy of funding mix.

So over to the maturity structure. And if we start with the bank loans, the maturity structure is a result of that the Swedish Bank financing is typically quite short, even though we have bank financing in other countries as well. And if you look at the bond side, we have talked about smoothening the maturity structure. And we have 1 year left in '27 with clearly more maturities.

And then on the other hand, we are trying to top up with new funding in the longer maturities, like we did this quarter with the issuance of the 7.5-year Eurobond. And ideally, we want to have 1 Eurobond benchmark outstanding out to 7, 8 years.

Going forward, we will also continue our path of issuance in the Swedish market. We updated our green and social financing framework recently. So the next longer maturity bond issue in Sweden will probably be under that framework.

Yes. And here it's more sort of a structural overview of the funding and capital side. As we have said before, we will continue to have a balanced capital allocation until reaching our target of 11x net debt-to-EBITDA.

Here, you can also see an updated calculation on the convertible bond, which when is converting, assuming that we're above strike price, obviously, will have a very positive effect on the indebtedness numbers as well. And in terms of the funding strategy, there's really no change compared to previous quarters.

And that was all from us. And on that note, we will leave the floor open for questions.

[Operator Instructions] The next question comes from Jan Ihrfelt from Kepler Cheuvreux.

Okay. I have 3 questions, and I kick off with your cash position here. It's coming up from SEK 4 billion in the second quarter to SEK 11 billion in this quarter. So -- and you're talking about maturities here. Was that in the fourth quarter, so we could expect that the cash position could cut down -- could come down a little bit at the end of the year?

Jan, no, the main maturities that we're planning for now are Q1 2027. So we have 2 euro benchmarks maturing in the same quarter. So we would expect to have sort of around this SEK 25 billion mark of available liquidity pretty much up until then. So it's going to be a bit of work to prepare for that. But once that's over, we move into sort of a very smooth maturity structure that we've now worked on for a couple of years to establish. So this is sort of the last more lumpy quarter in terms of maturities, and then, it's going to be pretty smooth from there.

Okay. My second question is related to your -- to the Residential business in Sweden. There have been some negotiations already finished in Gothenburg, as I see. And do you have any comments on where you could -- where you expect the outcome could be when it comes to rent uplift in Sweden?

You mean for next year or... .

Yes.

No, I think it's a bit too early for us to know that right now.

And what do you see on the market?

I mean, this is part of sort of the annual negotiation schedule. So we -- I think it's a bit premature to have a good view on that today. What we have said, Jan, is, since 1970, pretty much you've had an average increase of Swedish rents, about CPI plus 1.6%. And what we -- the pattern that we typically see is that in high inflation years, rents lag a bit, and then, in lower inflation years, we catch up, and we're obviously in a catch-up phase right now. So we would expect it to be sort of clearly above inflation for the coming 2- to 3-year period if it should follow the previous patterns. But to be more precise than that, I think, it's too early to sort of jump to conclusions.

Yes. Okay. Fair enough. And last question regards Finland, of course, the residential. How has the vacancy situation on the market developed during the third quarter?

If you look for us, it's more or less the same, Jan, as the quarter before, I don't remember, maybe 1/10 up or down, I don't remember, but if...

95.8%.

Yes, 95.8%. But if you look at the total vacancies, it's actually started to melt, especially in Espoo, also in Vantaa and a little bit in Helsinki. And I think you will see that in Kojamo's number because I think they had a peak on like 9% vacancy. And even if I don't know, I think they will soon be down on 3%, 4%. So you can -- and then after that, hopefully, the overall market gets even stronger. So there is actually positive signs finally, especially in Espoo.

The next question comes from Fredrik Stensved from ABG Sundal Collier.

I have 2 questions. First, on the large cash position, as you talked about earlier, what kind of interest rate do you get on that? And how is that reflected in the earnings capacity?

So -- I mean, you can say that our -- sorry, you can say that our available liquidity is made up from both cash, financial investments and available credit lines from banks. So obviously, it depends very much on how the mix is between the available liquidity and the asset side of the balance sheet. We specified in the report, you can see the split there, when we have the run-through of all the key ratios in the back of the report. But typically, you can say that the funding cost is what the funding cost is. There you can just look at sort of market prices for bonds, and we have been pretty transparent about our bank funding costs as well.

When we do invest the liquidity, I would say it's between 50 and 100 basis points net expense vis-a-vis our own funding cost, a little bit depending on what opportunities we can find. And the bank committed lines are anywhere between 20 and 40 basis points in commitment fee. So that's sort of a net expense for that part of the available liquidity. So depending on the mix of it, you can run those numbers and get to an estimate.

Yes. And that's also how you do it in the earnings capacity financials line item?

Yes. So we try to look at roughly where we are, what kind of liquidity positions we hold and make an estimate on that.

Yes. That's fair. Just one follow-up on this. I think in the quarter, you acquired financial assets for SEK 2.5 billion, give or take. Is that this kind of short-term liquidity positions? Or is that something else?

No, that's absolutely right.

Commercial paper and all.

Okay. Yes. That was one or that was several, but that's one topic. The other topic, buybacks, Erik, you allude to buybacks or share buybacks being a good complement in terms of capital allocation in the CEO letter. In terms of timing, and I appreciate this is forward-looking and so on and so on. But in terms of timing, how do you see the possibility to start with buybacks? Or when do you think you can start with buybacks?

We don't know exactly because we cannot decide what happens. This is more of how we are thinking in general. And the first step is Norion dividend, as you know. And then, if you get -- make the numbers, you can see that if we don't do anything special, over time, we will be very overcapitalized. And then I think it's reasonable to inform how we are thinking, that we will compare investment, deleverage and share buybacks in the toolbox. But the exact timing, I think it's -- I don't want to say that exactly, but it's more of the long-term thinking I'm talking about.

So, Fredrik, let me just add on the financial side as well. So the fluctuations that you see in our net financing cost this quarter is not only because we built up the liquidity position, there are also a few other fluctuations that are more temporary in its nature. So just to be aware of that.

And are you able to quantify how much that is?

I would say a bit more than half of the differential between Q2 and Q3.

The next question comes from Lars Norrby from SEB.

Regarding your ownership in Entra in Norway, you are close to 40% and Castellum around 37%. What's your view about that ownership situation? Is there a sustainable long-term ownership? Or would you be open to sort of find some kind of long-term solution on that one?

Yes, we are absolutely always open to good solutions, of course. And I think over time, the situation will change, but it's very difficult to know exactly when and how, and Castellum recently changed CEO, and the largest owner became very active. So I think we also have to see a little bit what they want to do. But over time...

Discussions with them -- have you had any discussions with them?

We'll come back to that if something interesting happens.

My second question regarding Norion, you're talking about it as distribution to shareholders and that's the intention of the Board. Is divestment still an alternative?

Yes. In theory, Lars, if somebody pays a very good price we can sell, absolutely. But when we made the dividend decision, the share price was, in our view, way too low. So then I didn't want to have the responsibility to sell it, as I saw, totally wrong price. But if there is a buyer that pays a lot, we can sell also. But it's a bank, so it's a bit more complicated for a buyer to buy all our shares because you have to buy the whole company, and then, you become a financial holding company, and you have to have permissions and stuff. So it's a bit more complicated than normal companies, as you know.

I think, Lars, if our stake would have been 5% of the bank, then it would have been an easier decision, but now being 44%, it's not a stake that you just place that easily, so you also have to consider that if we were to sell instead of distributing as a dividend, we will probably have to do that in several tranches. And then you would create a pretty, in time, sort of long overhang of the Norwegian stock instead. So it's a solution where we found the -- I think, a balanced way of doing it, and then, it's up to each shareholder to decide whether to keep the stock or not.

The next question comes from Staffan Bulow from Nordea.

I have a couple of questions. Starting off with a follow-up on share buybacks. So we have 3 questions on that. What valuation level do you find attractive for considering share buybacks? Do you have a balance sheet level that you're comfortable with? And finally, in terms of volumes, how much do you find reasonable to do? Is it entire cash flow generation or just part of your cash flow generation? So yes, some flavor on valuation balance sheet then and share buyback volumes.

Very smart questions that I will not answer specifically. The share price that will depend on alternatives and how the situation is when that happens, so I would not like to say a specific price. But obviously, if we have a discount, and we think the values are okay, and we don't find anything better, we will be very keen on buying back.

And balance sheet, there, we have to sort of guard the S&P grid, mostly debt, debt equity, and we want to have some headroom. So that number you can watch, and you can also get specifics from Jonas, for example. So that will be sort of a limitation not to risk the rating.

And amounts will -- I mean, if we don't find anything to buy, and the share is at, as we think, a good price, then we can buy back a lot obviously, but we will see as we go along.

Okay. Perfect. And another question, in Q3, you press release that you started a residential project in Gothenburg. I'm just wondering was this special situation or have conditions improved for residential project to start suggesting that we should expect more of that going forward?

Conditions is a bit better. It's not super good, but it's a bit better. So we think we can do some small activity. In this case, we already own the land, and it's an area that we sort of want to complete. So you have a couple of different dimensions. And we have some similar cases. And we also have some condominium cases, but you will not see any massive investments. That is not -- that will not happen. But we've been almost at zero. So maybe we start to couple per year or something like that.

Okay. And when it comes to transaction and the competitive landscape and transaction yields for property acquisitions, do you think that, that has changed in the second half of '25 compared to the first half of 2025? Or is it the same situation?

We see a lot of transactions actually in the market that you could do if you want to. And I also have a very big demand for investments from many institutions that want to co-invest. So there's a big appetite. My feeling is that there are no sellers really at sale prices. I cannot find anything super cheap. So my guess overall is that yields are pretty much the same, but then it's because you have lower interest rates, and hopefully, a bit more positive outlook on the economy overall, '26 and going forward.

And also, we have a very strong financing market. Banks are very keen on protecting their balance sheet, meaning they want to have a sort of increased loan books, if possible, and have a strong bond market. So if you combine all of these things, I would say the market is actually much better if you want to do transactions. But I would guess, yield is pretty much the same, but everything else is better.

The next question comes from Andres Toome from Green Street.

A couple of questions from my end. Firstly, what was the driving factor behind the year-over-year decline in profit from property management coming from the associated companies? Maybe you can give a bit more color around that because I also see that in the earnings capacity that amount has not changed.

No, we decreased the holdings in associated companies. We dissolved one of the larger in 2, and we sold some small, I think. So that's, in general, a smaller part of -- even if you look at the book value compared to the equity or whatever measure you take, the part of the JVs are slowly getting smaller.

Understood. And then, I guess, on occupancy rates across your portfolio, that's been sort of very steady over the years at 96%, and it dropped down to 95% last quarter. It seems to be sort of sticking there now. How do you see the outlook for that? I do recall from the last call, it was sort of mentioned as being like a rounding error, but do you see any chance of clawing back occupancy? And which are the segments where you've actually seen occupancy come down? And I guess, is the outlook in certain aspects also more difficult when it comes to perhaps Swedish offices or Swedish residential, at least in terms of the more regional Swedish residential, which has been intermediate?

My guess is it's not so hard for us to have 96% again because it's -- we say in whole percentage, but it's actually 1/10 of a percent. So I think it was 95.41% or something like that. And I think it was a small fraction better than last quarter. So I mean, you will -- I guess that you will most often see 96%, and occasionally, it can be 95%.

But if you look at the different segments, I mean, we are -- as you know, we have a pretty diversified asset side, so you obviously have slightly different drivers. Sweden and Denmark, Resi, generally, there are no vacancies, and that's been sort of very stable for quite some time. And so far, we haven't seen anything that suggests that, that would change. We are not really present in the parts of Sweden, where you might have slightly higher vacancies on residential -- in the residential market.

If you look at the Finnish residential side there, as you know, if you've followed us for some time, I mean there's been higher vacancy rates in the past in the market. As Erik mentioned before, we're seeing that slowly improve as the new construction of residential properties come down.

And then obviously, at the commercial segments, which are more difficult to predict, there you've had a little bit of delta in the last couple of years. But its -- again, we're very diversified. So say offices are less than 15% of our total portfolio, which means that we don't have the same kind of sort of dramatic fluctuations on the commercial side, as you might see someone more specialized in offices only and especially in the big cities. So it's a very diverse portfolio, and that's why it's also moving pretty slowly. If we do get a sort of better economic outlook for next year, then typically, cyclicality goes for commercial premises as well, so -- but let's see.

Understood. And maybe coming back to your last point about that fiscal boost coming next year and then also monetary policy becoming or already have -- has become quite accommodative, are you seeing any effect of that on the ground in terms of just business sentiment, things of that nature, that will be leading indicators for perhaps better listing next year?

You have a time lag. So I guess you will see more of it. If I'm just guessing, I think you will see some signs there may be in a quarter or 2. You always have a time lag. When it gets better, it lags. And when it gets worse, it lags as well. But I think everything points in that direction.

But you do see better consumer sentiment and consumer spending. And we're currently at the highest savings rate in Sweden in relation to disposable income that we've seen for, I think, 40 or 50 years. So the consumers have been extremely cautious for many years now. And now we're starting to see a little bit better consumer spending and overall more optimistic views on the future. I think that will -- that's typically what triggers a more positive business sentiment eventually as well. But it's hard to break the timing, obviously.

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

Just a couple left from my side. So you're quite positive on the economic backdrop and the turnaround there. But at the same time, you said that you're not seeing too many cheap assets available. So it feels like counterintuitive that you would be sitting still going into 2026. So what should we expect in terms of investment activity on your side?

Impossible to forecast because it's totally depending on if we find good investments, we are interested, and otherwise, we will do nothing. So it's absolutely impossible for me to forecast. We just focus on capital allocation and increasing the long-term value of the share over time. But I feel optimistic that we can do good things next year if nothing new happens.

And in terms of capital allocation, would you be considering changing your overall asset split or geographical split?

No, I think that will not change much because it takes such a big amount to change it. So that will be, I think, roughly the same.

Okay. That's clear. And then just on your financial investments, it increased by SEK 2.5 billion compared to Q2. Could you provide a bit more color on that? And also, what's a more normalized level for these holdings?

Now, we have very much liquidity because we are preparing for maturities that comes in 2027. So that's why we have a bit too much cash, you can say, that we primarily buy commercial papers or stuff like that. So this is a preparation for '27.

Okay. So it's mostly short-dated debt...

Yes, absolutely. We have to get some interest on it. And so there's a mix of different commercial papers basically, the most of it.

The next question comes from Stefan Andersson from Danske Bank A/S, Danmark, Sverige Filial.

A couple of questions from me, starting with the targets you have. I'm trying to understand the direction here because I get different signals from you in a way. I mean, you're talking about reaching the net debt to EBITDA of 11%. And we've heard that before. I guess, you could have more or less been there now if you were really eager to get there, but you've had quite a pace on the investment side, again, here now. And you're talking about repurchasing of shares and the bump with Norion. So I'm just trying -- and you have a high liquidity. Okay, some of it will go to -- or quite a lot for the refinancing, but you still have...

Good question, but what we've been trying to say is that we will actually -- we can do a mix of this. We have no specific time line on the 11% target. So that is we are flexible there. It's our own target. So we can always make a combination of strengthening the numbers, do some investments, do buybacks if you want to. So think more of a sort of a combination over time, but the long-term trend is lower debt to EBITDA, but not necessarily quarter-by-quarter or if you understand what I mean.

We've also said that in regard to the distribution of the Norion shares, we've also said pretty clearly that the leverage metric that we currently see as the most restrictive one is debt to debt plus equity according to S&P's definitions. And there, we're currently at about 56.5, S&P requires us to be below 60. And the Norion distribution will have about 1 percentage point impact -- negative impact on that measure. So theoretically, we could do Norion already today. But we've said that, okay, it's probably a good idea to build perhaps a couple of percent -- a couple of tens of percent more before we do it. But I think we've also said that that's sort of the more restrictive one that we steer on more short term. I think view the net debt-to-EBITDA target is something where you should watch for the trend rather than the absolute level in the short term.

Okay. Perfect. So really, just continuing as you have been continuing when it comes to activity, given that you find that interesting targets then.

Absolutely, exactly like that.

Okay. And then the second question, as you mentioned, there's a new CEO at Castellum. I talked to Pål. I get the impression that he is open for -- solution is a stupid word, I guess, on the entire situation. But because you could keep it as it is, I get the impression he wants -- he is eager to clear that up one way or another. This is just hypothetical, but can you see any situation where you're buying that stake?

I think that is unlikely because it will be such a big expansion for us in Oslo office then. So I think it's very unlikely. But, of course, everything is priced right, but I think it's very unlikely.

Perfect. And then the final question, we touched a little bit about it on the resi side, but if you go to the co-op owner apartment side, [indiscernible] and others, do you see any -- in a tough market, do you see any signs there in any direction?

It's not getting worse at least, but it's still slow, I will say. But I'm optimistic about next year because if they have better consumer sentiment, that is what it takes, I think. So hopefully, we have better '26, but you never know. But right now, it's still slow, but prices are stable or maybe trending upwards anyway, so it's not bad, but it's not -- it's a slow market.

I think it's important to remember here that there's nothing wrong with the affordability. That's not where the issue lies. It's more on the sentiment and belief in the future on the consumer side. So affordability is good, but savings ratios are -- I mean, we have a savings ratio in Sweden of 16% of disposable income at the moment. So there needs to be a bit more consumer confidence, I think, for that market to get going.

[Operator Instructions] There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.

Okay. Thanks, everyone, for listening in. You know where to reach us. If you have any follow-up questions, we'll obviously be available throughout the day. Thank you very much.