Welcome to Castellum's webcast, where CEO Rutger Arnhult and Head of Treasury Jens Andersson will present the interim report for the third quarter. In the end of this webcast, there will be a Q&A session. Please, Rutger, go ahead. Yes. Thank you for listening and calling in here. My name is Rutger Arnhult. I'm the CEO of Castellum. To sum up the first nine months, we are reporting income from property management that increased by 39%. This is mainly due to the acquisition of Kungsleden. It's also 15% per share, so that's more important figure. Income from property management, plus 15% per share. The EPRA NAV is increasing by 13%, and that's of course, per share. The like-for-like rental income is plus 5.2%. As you might remember, we got an indexation of 2.8% from October last year, and that was effected on our rental income from the January 1st. On top of that, we have managed to renegotiate contracts way above current levels. Which is important when we get back to the discussion whether or not we will be able to achieve the CPI indexation going forward from the January 1st. We'll get back to that. Net leasing is for the 11th quarter in a row positive. It sums up to SEK 153 million. In the quarter, it's about a third, it's SEK 44 million. The ICR is still strong, rolling 12 months, 4.1. Of course, slowing down here, getting lower since interest rates are coming up. In the quarter, it's 3.1. Next page, our focus for the moment. The rental market was still stable. Companies are getting their employees back to the office. There's a large focus on refurbishing office spaces to more attractive standards, more welcoming, and more space for meetings, more meeting rooms. Higher requirements of quiet rooms. Maybe what you enjoyed by working from home was to be able to focus and sit quietly for some of the work, and that's something we need to be able to offer in the office area. A little bit going back from the open space to more meeting rooms and small office rooms which you also share, of course. Occupancy ratio top levels, 93.4%. That's a very strong figure. Transaction market good in the first half of the year, slowing down now after summer, October. September a lot slower due to worries regarding financing in the capital market. We can elaborate on that later on if you have questions, but quite obvious, slowing down in the third quarter. Downscaling projects. We, as you know, we used to build a lot and do a lot of new things. We still do. We produce for about SEK 1 billion a quarter. That's the same in the third quarter, and we'll more or less be the same in the fourth quarter. It slows down in the first quarter next year and going forward. Remaining investments in our project portfolio, it's becoming a lower- and- lower figure. Less and less CapEx due to the cost side on new projects, and also due to the turmoil on the capital market and uncertainty regarding financing. Not due to a lack of demand. That's something we struggle with, a strong continuous demand for new things from some tenants. We just need to figure out how to finance it going forward. It's both positive and negative issues regarding that thing. We keep we hold hard in the cash, so that's why we're downscaling. We put a lot of more requirements on new projects if we should start them. Higher requirements. Financing activities, of course, top issue. High activity there. Refinancing, make sure that we get new credit facilities from banks, and also testing all kind of new ways to finance our business. Our Head of Treasury, Jens Andersson, is sitting here beside me. He will elaborate on those issues later on. Next page, for you who doesn't know Castellum in and out, we do have a very diversified geographic geographically spread out property portfolio. It's focused to more or less 14 cities. In Sweden, it's like 12 cities, and then we have Copenhagen and Helsinki. Then through our holding in Entra, we do have a standing good position in mainly Oslo, Norway. You can see here how it's spread out in the graph. 78% is Sweden of the book value, 15% is then in Norway, 4% is in Finland, and 3% in Denmark. The Denmark and Finnish businesses focus to Copenhagen and Helsinki, so the capitals in those two countries. Stockholm is by far the largest market for us in regards of value. If you look on square meters, Gothenburg and Stockholm are about the same size. Actually, Gothenburg has a few square meters more. In value and rental value, Stockholm is the largest. The next page shows in more detail where we're located. 28% is in Stockholm. As you know, office and warehouse, mainly office. Then West is the same and that's the same all over, mainly office. West is of course Gothenburg then. Central is Jönköping, Linköping, those cities. Öresund is mainly Malmö, Helsingborg, Lund. So it's mainly Skåne, the southern part. Bigger Mälardalen is Uppsala and Västerås. Also a large 9% of our total value. Västerås is one of these towns where the electrification business goes very strongly. So strong demand from more like industrial tenants there, like ABB, Hitachi, Northvolt, Alstom, and those companies. Helsinki, Finland, 20 properties, a little footprint there. Same as in Denmark, 16 properties, a small footprint. They're more or less 200,000 square meters in each of these towns. Our position of our share of Entra, which equals to about 500,000 square meters, and that's mainly in Oslo. Looking at where we are located in regards of larger metropolitan cities, we do have 60% of our portfolio in Copenhagen, Oslo, Gothenburg, and Stockholm. The rest is in regional centers. Stable transaction volumes and market rents in the property market, that's this is statistics from external consulting firm. It's from, actually from Newsec. Is that something you can elaborate on, Jens? Yes, of course. I mean, it's interesting to see that the volume, the transaction volume in Sweden is still relatively strong compared to if you look at 2019, that was the second most liquid market or year we had in Sweden. We believe that the full year 2022 will actually exceed those numbers. If you also look at the yield levels, Newsec report slightly increasing yield levels. If you look on the right-hand side on the slide, you also see that vacancy rates are stable or coming down. You also see that rent levels actually are coming up still in CBD. The overall effect should be close to neutral. Yeah. Also note that Oslo is doing really well. That's notable in discussing what happened in Entra's value changes. We don't understand it from an external part, but that's something to discuss with Entra. We do have next page a very well diversified, not only geographically diversified portfolio, also customer base is very diversified with companies and authorities of all kinds. This is a pick of some of our largest tenants, ABB, AFRY, the police authority, Handelsbanken, the law authorities or what do you call them? The Domstolsverket. The courts. National Courts Administration. National Courts Administration. Insurance company, Northvolt, Immigration. Region Stockholm is also governmental. Axis, the defense industry, the defense, not the industry, defense. Ålö, Hitachi, and so on. Huge variety. The top ten only stands for like 13% of the total income, which shows a very diversified portfolio. The largest tenants stands for like 2% of the total. We're not depending on any large single one. 24% of our leases are with the public sector. Very little proportion of retail. It's office, it's government, it's multinational companies. And also very little portion of hotels, restaurants, very limited. Office focus, warehouse focus. Next page shows our net leasing over the last 10 years. We do have 40 out of 43 quarters with positive net leasing. The last 11 consecutive quarters in a row, even though we had this COVID period, has been positive. This is really something we are proud of, and it also shows the strength in the Swedish industry and the country as a whole. It also shows the benefit of being focused to the larger metropolitan areas. Next page. This goes into financials. Jens, back to you. As Rutger mentioned before, we have solid and stable financial position with the loan to value well below 40%, including the repurchase shares. ICR rolling twelve is 4.1, also previously mentioned. Total outstanding loan volume has increased somewhat over the quarter, mainly due to projects. We have bonds that has expired, and we have repaid those and exchanged them with the bank loans. We have an average margin of around 130 bps on our bank loans. It feels very comforting to have the bank supporting us in this somewhat illiquid debt capital market. Commercial papers are also reducing over time, so we only have SEK 2.1 billion left. Not sure if we will continue to have commercial papers in the future, but time will tell. We have unutilized credit facilities of SEK 15.3 billion, of which SEK 2.1 cash has been included in those numbers. We also have an average capital term of 3.2 years, but if we include non-signed but credit-approved financings that we have ready, that number actually increases compared to last quarter, and that is really good in this market. We have strong commitments to prolong and increase facilities from banks. I believe that will continue even if the supply of financing from the Nordic banks is not unlimited, but I think that they will choose us before many others. Average interest rate 2.3%, up mostly due to underlying interest rates. Average fixed interest term 2.6%. Decreasing, of course. If we could redo things, we should have gone longer in our fixing strategy. Now this is what we have, and we have a fairly strong protection against interest going up for the coming years. We have been able to repackage our derivative portfolio and increase the hedging ratio from 52% - 60%. Right now, an increase in underlying market rate by 1% would increase financial net by less than SEK 300 million on an annual basis, given our current hedging levels. On outlook, we have, as I mentioned, SEK 15.3 billion in cash and unutilized credit facilities, and that will cover all bond maturities during this and next year. We believe that we will be able to find a lot more secured financing that will grow that number over time. We have written credit approvals above SEK 6 billion from Nordic banks, and we expect a lot more in the coming quarters. Bond market remains challenging, that's very true. From time to time, we noticed that things improve slightly, but then things go back to the more illiquid market that we've seen over the last six months. We do a lot to find new ways of finding liquidity from the US market using US private placements. There are, of course, private placements elsewhere to be found as well. We also have a diversified debt structure, a combination of bonds, bank loans, commercial papers, even though commercial papers have been shrinking over time, and we've been exchanging or repaying bonds and drawing on revolving credit facilities. If you look on the left-hand side of this, most important is, of course, the bonds. We have quite a lot of bonds expiring over the coming three years, but also then bear in mind that we have free cash flow before projects and dividend of around SEK 25 billion over the coming five years. There is still a lot of room to be taken from our operations to actually repay bonds. We are certain that we can move away from the debt capital market and exchange it with bank debt up to a certain point. Of course, all of it cannot be handled by Nordic banks. Okay. Thank you, Jens. Next page. We'll also be helped by getting new cash into the system. Since we are completing a lot of projects, it's kind of a peak at the moment. A lot of projects will be completed during the third and fourth quarter this year. They will actually add more or less full-let buildings with long leases at like SEK 183 million in rental value. During 2023, the next year, we will complete projects with a rental value of another SEK 280 million. Of course, that's a lot of money coming in from next year, different periods of course, but mainly in the beginning of the year when we complete the two largest projects in Malmö. It's the new courthouse, almost a SEK 2 billion project in market value, and the new head office for E.ON as well, also nearly SEK 2 billion worth property. Only those two will add something like SEK 170 million in rental value. They are completed and tenants will start moving in during the first quarter. It's about 60,000 square meters in total brand-new office next door to each other. The 13 largest out of our 13 largest projects, it's like nine, 10 will be completed from now on until the end of next year, more or less completed. There were some that will last on for a longer time, but with only small amounts still to be invested in. Remaining investments in all this, it's about SEK 2 billion. We're used to invest like SEK 1.1 billion-SEK 1.2 billion a quarter. Of course, this slows down a lot. This also creates a lot of free cash flow that we can use to pay back debt. Going forward, without a large portion of new developed buildings, we will more likely invest something like SEK 300 million-SEK 400 million a quarter, and that's to take care of existing tenants and then a few projects going on. As long as the market is as it is now, the capital market, this is the way we will go forward. We will focus on generating cash flows to strengthen our balance going forward. You can see the next page here shows the completion, and there is a lot being completed this year, third quarter, fourth quarter. Next year, first quarter, Malmö, Jönköping. It's the courthouse, Guldvingen, Krukan, and it's E.ON, first quarter. The two I mentioned, huge ones. Gotland, Jönköping, that's the new Göta hovrätt. It's also a courthouse. There's an interesting story about that. It's a little bit delayed. It's like a one-quarter delay in that project. They're supposed to move in the first of January. They will move in by the end of March. They will have to spend another year in their existing building. They have already spent 389 years in their old building. We will actually spend 390 years in the old courthouse. Quite amazing. If I would have asked you would probably guess 100 year or something, but you will miss out with 290 years. A fantastic story. Second quarter next year, we complete some logistic properties in Stockholm. In our official list, it says like 37%, 36% occupancy ratio. That's partly wrong because it's a different buildings. We haven't the vacancy ratio is regarded as a total project. It's more like the more true figure is more than 60% today. We show new tenants the existing built vacant space daily. That would most likely be fully let as well. Like most of these projects are fully let, more or less fully let. Next page, I think we leave projects for a while and go into sustainability. As you know, we focus a lot on sustainability. We win all different kind of prizes within our category. We just became listed as a green stock at Nasdaq. Now we're the only and the first larger real estate company in the Nordics listed on, or Europe, listed as a green stock on Nasdaq, which we are very proud of. It's seventh year in a row, seventh year in a row, we achieved the first prize in, the GRESB rating. That was also recently achieved. That's the prices we get, but we also get paid by better figures. We estimate that we are 42% better than the average, of the industry, which is amazing. It can still be improved, and that's what we try to do all the time. Our goal is to become entirely climate neutral by 2030. To become that, we build smart our last building in Örebro, a courthouse, a police house. It's actually the first zero emission building. It has zero emission over its lifetime, built with a lot of wood, for example. It's kind of odd for being a police house, built in wood. We also invest a lot in solar cells. So we have a solar cell program which aimed to build 100 solar cell facilities. We just built the 71st out of this. Today, they produce 7% of our needs, which is 7.8 GW of energy on an annual basis. At the moment, these investments gives a really, really strong return. We do have some projects, for example, what was expected to give a return of SEK 1.6 million yearly. Only in August, this facility gave SEK 1.2, I think. SEK 1.2 million in one month, and expected to give SEK 1.6 million in a year. With today's energy prices, the return becomes a lot better some months than the month after, you don't know whether it's windy or not or whether the cable to Germany works or not. So it differs. It's a strong focus to continue on this trial. We have fixed 80% of our electricity volume at fixed price. To bear in mind that we're billing the tenants for a lot of the electricity, it's like more than 50%. We don't carry the whole cost of increasing energy costs. Next page is just a glorious picture of three happy guys on Times Square. It's the Nasdaq building in the background. That's when we got this green designation, and we were invited to ring the bell at Nasdaq. That was like a month ago. Nice to get this designation. I think it will matter for us in the future going forward. It's just another step on the road here to become more and more sustainable. As you know, we are also the only real estate company included in the Dow Jones Sustainability Index in the Nordics. Financial performance, next page. Should I... I can take our CFO, she's not here today. We do have another girl working with her here, but I can comment this one. Property portfolio has increased by 2%. The income from property management is like SEK 3.5 billion, increased with 39%, 15% per share, as we mentioned before. The total increase, of course, due to the acquisition of Kungsleden, and then the dilution, new shares and everything, gives us an increase of 15%. Rental income, more important. Like for like, SEK 5.2 million. As I mentioned, the indexation was SEK 2.8 million in Sweden from October last year, beginning from first of January this year. Operating income, 44% higher, also mainly due to the acquisition of Kungsleden. Next page, it actually just shows the increase of income from property management per share over the years, increasing over time, which we are proud of course. The EPRA EPS and NAV increased. The EPRA EPS is +53% over the last five years. The EPRA NAV this year is up 13%. The EPRA NAV over a five-year period is up 82%. The NAV is today SEK 259, and the EPS, SEK 9.6. Takeaways. Rental income, like for like, 5.2%. Net leasing, positive for the 11th consecutive quarter in a row. Occupancy ratio, impressively, 93.4%. Bear in mind, 99% of our leases are index-linked. We haven't mentioned that in the presentation, but 99% is index-linked. 84% is 100% index-linked. And then we have a variety. Assume that we get 90% from CPI from first of January next year. We are very confident that we will have no problem achieving this from the tenants. The rents goes up as everything else goes up. On top of this, we also have to bill the tenants for 60% of our energy costs. That's gonna be paid by the tenants. Of course, that's also increases a lot. But that's how it is today, and we can't do so much about it. We can't help out reducing that. It's just gonna be fully billed to the tenants. Financial stability. We do have a LTV of a healthy 38.8%. With the measures we take, that figure will probably stay still. If something, when projects start to diminish, it will start to go down a little bit. But that will take a few quarter before you see that actually. We do have SEK 15.3 billion in cash and unutilized credit facilities, and that's covering all the bond maturities during the next two years. Projects near completion have strong cash flows, and also new projects are being scaled down and pushed for the future. We will have a land bank. We work with the land bank. We work with projects, but we don't spend money on them. We continue to work with some of them, but slowly, in the office on our own, not spending cash on new construction. Strong and stable underlying results, and that will continue. We do have a very strong tenant base. We do have a strong and stable and healthy distribution of our assets in different strong local markets. That's really something we can see over the years giving us stable returns. EPRA NAV 259, huge discounts on the stock market compared with that. Of course, a lot cheaper to buy real estate through acquisition of shares today, and therefore NAV increased by 13%. Okay, next page. It's Q&A. Thank you, Rutger. Now there's time for asking questions. Thank you. If you wish to ask a question, please dial zero-one on your telephone keypads now to enter the queue. Once your name has been announced, you can ask your question. If you find your question is answered before it's your turn to speak, you can dial zero-two to cancel. Once again, that's zero-one to ask a question or zero-two if you need to cancel. Our first question comes from the line of Fredric Cyon of Carnegie. Please go ahead. Your line is open. Good morning, gentlemen. A couple of questions from my side. Starting off with financial costs, they were quite high compared to my forecast. Are there any one-off costs on the financial cost line? If so, how much? Yes. Good question. Apologies. It's around EUR 120 million that comes from currency effects due to that we follow ESMA policies. When we issued the Euro bond earlier this year, part of that bond wasn't secured with a swap derivative, and therefore that effect, which we thought was going to come further down in the P&L, actually had to come under interest costs. EUR 120 million could be deducted to get a more fair interest cost. Perfect. Thanks. Yes. In my view. Frederick- Yeah, please go ahead. In my view, Rutger, that way to report it is kind of strange because that one will of course vary in accordance to how our currency varies, which has nothing to do with our underlying business. We'll see. Going forward, we will even though we will most likely report it on the same line, we can separate it out so it's easier to see what's what and what. Yeah. So- Sounds like a great idea. Right. Yeah, we'll do that. Um- Thanks for the question. It's good one to explain. Perfect. Related to projects and CapEx in general, you touched upon this previously, Rutger, during the first nine months, you invested about SEK 3.7 billion. We can see that what remains to invest in major projects are moving south. Can you give some guidance on expectation for 2023? I mean both projects and just general CapEx for existing properties. Yes. You can expect us to invest about 1% of the property value yearly. Doing that's SEK 1.5 billion. We really take care of our tenants. But we will be strict, but I expect up to SEK 1.5 billion. Maybe we can reduce it to SEK 1.2 billion. But somewhere, you know, 0.8%-1% of our property value. So 1.2%-1.5% underlying CapEx projects in existing portfolio. And then everything else above that is new construction. We do have a few. We do have a police house in Gothenburg. We do have an animal hospital in Gothenburg that are running built on yield. We don't take any risk in those in regards of costs. Of course, we try to keep the costs low anyway to get the rent level that's healthy. Except for that, not much will be started. It will be postponed. Then, of course, we finalize all this on all the projects we mentioned. Most of our 13 largest will be completed now in this year or in the first and second quarter next year. We will probably have CapEx on the projects of about SEK 1 billion next quarter and the first quarter, not really the first quarter next year, lower, and then it really slows down from March next year. But you will see it in the second quarter, it really slows down. Call it all in, somewhere around SEK 2.5 billion-SEK 3 billion for next year. Is that a good proxy? Yeah. Somewhere there. Yeah. Uh- I would say at SEK 2.5 billion. Yeah. SEK 2.5 billion, SEK 3 billion. Perfect. Then moving over to disposals. Obviously, the capital market is extremely tricky. Another way to get liquidity is through disposals. Do you have an active plan of doing major We always. Divestments in. Yeah. Yeah, we always try to divest 1%-2% of our portfolio in a normal market. We normally like that turnover just to force ourselves to test the market, test the values. We usually sell off what we call a tail. The properties we have on a sell list. We always have a sell list. When we bought Kungsleden, 10% of the portfolio didn't really overlapped our portfolios, and that's our sell list. Still some assets on that list, but now we have shifted. Now we're also looking at selling some trophy assets, you know, the lowest-yielding assets, which might attract you know, the institutions that doesn't use debt. When they buy, they buy seldom, but they buy. They pick the best, nicest asset with the longest leases, and then they hold them for 20 years or longer. We are open to discuss transactions like that also today, which we not normally do. The reason for that is because we see the benefit of strengthen our balance sheet in this turmoil capital market, to come out stronger, lower LTV. We don't need to, but we believe it would be good to do it. It's a way to free cash, get free cash, and strengthen the balance sheet going through this period as a winner, as one of the strongest companies. We benefit from having a long list of trophy assets that strong investors would long to buy. That's something that has shifted over the last quarter that we now look at that possibility to divest just to strengthen balance sheet and become a free cash flow. Do you expect we'll see any press releases during the fourth quarter in relationship to that? I can't give any. That would be like guessing. We are not gonna sell at discount. We want fair market value. If there is a buyer on the right level, then we'll sell. If not, we don't need to sell, and we will not sell. Then we hang on to these trophies and continue to develop them if there is anything to develop. For example, if we have a building with a new building, fully completed, you can't do much about it for the next 10 years, maybe even longer lease. It's a marvelous building for a more institutional owner to own. Back in the days, we would never have sold it. Now we will consider selling it, but we don't need to. We don't feel forced to do it, but we will test the market with a few of those assets. Perfect. I have two more questions if you bear with me. First of all, relating to secured funding as a total assets, it's increased to 15%. I can read you have a constraint of 45%, but in relationship to your rating, the rating you have, how high can it go without them having an issue with it? I mean, we should keep at least 45% unencumbered. However, Moody's have opened up for smaller deviations, and they also have other less strict rules for other competitors, and therefore, we do not see it as an absolute level that we cannot pass if the debt capital market continues to be very illiquid. Over time, with the type of rating that we have, we need to keep the 45%. I think we will do that without any problems taking up additional debt of around SEK 10 billion from the Nordic banking community. Bear in mind that we take up more debt on the same assets that we have already pledged. Mm. It might be we might have a LTV of 30% in an asset. We might be able to increase it to 50%. It's still the same asset pledged. That doesn't increase the amount of pledged assets. Fair point. The final question I have is relating to the dividends. Obviously, you have a proud history of raising it now, I think for 24 years. At the same time, the capital market is extremely tight, and your bonds are trading at quite a big discount to fair value. How do you look at raising dividends considering the financial circumstances? That has to be something for the board to decide, when it's time to decide it. Of course, the ambition is to continue on that tradition, but if things are not, you know, if there is room for it, then of course. If not, it needs to be discussed. We have a lot of shareholders that like to see the dividend, but, you know, what's best for the company is, to do what's best for the company. We'll see. That's something to decide, further on. Also, of course, maybe also depends on how we manage to divest some assets, and, also depends on how we manage to refinance ourselves with new facilities. These things we work with daily, refinancing, new possibilities, and then also transactions go on. That's those things they shift over time. We'll see how the situation is when we get closer to those decisions. Our aim to distribute dividend in the same way as we used to do, that's something we haven't changed. Thank you for taking my questions. Thank you. Thank you. Our next question comes from the line of Niklas Stenberg of DMP. Please go ahead. Your line is open. Thank you. Jens mentioned that there was a certain point where Castellum no longer can grow its amount of debt in the Nordic banks. I wonder where this certain point is, and in a worst case scenario, when could Castellum hit that point? Tricky question. I mean, I think that Castellum is one of the most favored borrowers in the market, and therefore we cannot rule out that we can move away entirely from the debt capital market. At the same time, we want to continue to be an investment-grade company. The limit is more in the hands of Moody's rather than in the hands of the Nordic banking community. I think that the first SEK 10 billion will be relatively easy to achieve. To get SEK 20 billion more from the Nordic banking community will be a bit challenging and might come at a higher price. Then we haven't really moved into the German banks. We haven't borrowed any money in Finland from Finnish banks. I still think there's a lot of room, but it's always a balance. We like being in the debt capital market. It has served us very well over many, many years, and I think it will continue to serve us well when it opens up again on reasonable levels. Okay. Time-wise, you believe there will not be any problem for several years, or? At least next year. I mean, it takes some time to achieve new revolving credit facilities, to achieve new loans. It's not a process that takes one or two weeks' time, it's a process that takes between three and six months. Now we have SEK 10 billion, SEK 11 billion that we see as very reasonable achieving. Whatever comes thereafter, it's still something that we need to discuss with our banks. I cannot promise those things to you. No. Okay. For the moment, growth is not the top topic at the moment, as you can understand. It's not an issue for the moment whether we can become larger. We can, of course, become larger among the banks, still over a few years. Then we reach a point where when Moody's say, "Hey, you need to have this and this amount of percent debt on income assets." We're not there yet, but if we reach that point, then we just need to stand still for a while, accumulate cash, maybe distribute even more to the owners and lower our LTV. Just grow, create value, create cash flow, dividend, become even more of a dividend distributing company. It's not too bad to reach that point. Yeah, so there is. I'm sure there will be other solutions when we get there. That's a few years ahead of us. Mm-hmm. Okay. We hope. And, uh- We all hope that the capital market rebounds back to a normal level. Yeah. Let's hope so. I also wanted to ask about the average credit and interest rates period that has come down. Both of them have come down about a year in one year of time. So what's your strategy on extending those? Can we expect that near-term? I mean, the loan duration, that is something that we can solve and that we see right now that the banks are willing to give us longer loan commitments. The longest we see right now is around 15 years at very reasonable terms. However, I mean, as I said during the presentation, a lot of things could have been done better securing longer interest derivatives. Now we have what we have, and we still have a lot of longer derivatives that we could repackage, so we could go wider and shorter, but that will not really solve what you are addressing. We have a very reasonable coverage over the coming two years, and thereafter we will feel a much stronger wind from the higher interest rates. We will need to sort that out over time. If there's an opportunity, interest rates comes down, we will definitely take that opportunity to secure more. But it's not really the perfect time to do it right now with three-month STIBOR at 1.76 and you have swap rates well above 3%. Okay, thanks. A question on the service income that grew 50% quarter-over-quarter. Have we now reached some kind of normalized level, or will this income continue to be volatile? Are you making surplus on this income, or is it offset by higher property costs? I think we will most likely level out at this level. We'll get increased income over time over the next year, but we also get increased costs, both on the cost side in property management and then interest rates. We will be helped in this way. We'll be helped a lot by the new projects coming in. That really helps us to keep the level. One thing I think about regarding the capital market is that if it comes back and it sooner or later will, then we will focus on being one of the strongest private companies. You know, the market still works for the more fund-owned government-owned companies. Everything else is like not working. When it starts to bounce back, it might start for a few of us, maybe not all of us at the same time. Hopefully we look strong at that point, good rating, good figures, good LTV, and so on, so that we will be one of the first possible to come out on good levels. Maybe those levels are not for all, but I hope that and I foresee that there will be a difference between strong and less strong companies when the market comes back. A year ago, it was more like everything was at the same level. The market didn't do any large difference between strong and less strong companies. I believe in with our indexation, our strong occupancy ratio, our strong tenant base, our geographics and lower LTV than average, I think we will come out well in comparison. That's what we believe will happen when the market comes back. Whether that's in a year from now or 1.5 years or two years from now, it will come back sooner or later. We don't know. That's nobody knows at the moment. We will look strong when that market bounces back and comes back, opens up again. Okay, thanks. That's all of my questions. Thank you. Thank you. Our next question comes from the line of Arnaud Fournier of Lombard Odier. Please go ahead. Your line is open. Thank you very much for taking my question. Perhaps first question, I would like to know if you have some covenants on the energy side credit facility you presented. Is there any limits to draw on these energy and credit facilities? First question for me, please. I didn't get the question. Is there a limit on the credit facilities? Yeah. Is there any covenant? Covenant on the credit facilities? Yeah. Yeah. In general. Yes. Yes. Yeah. Of course. There are covenants for sure, but they are very wide. We are not anywhere close to any of the covenants. The Swedish or Nordic banks, they use more lenient or whatever you call it flexible covenants, while in the UK market, usually the banks put them really tight in order to be able to increase margins. That is not the way that the banks handle things. Usually we have an ICR of around 150%, and the loan to value that varies between 60% and more commonly 70% and even higher. There's a lot of room still before we are anywhere near any covenant breaches. Okay. Thank you for that. Second question is regarding M2 Asset Management. M2 Asset Management sold some shares of Castellum. Could you please give us who is the buyer? Because it doesn't seem to have some pressure on the equity of Castellum. Who is the buyer of this package? Oh, it's in the report. It says under shareholders, in the text above the shareholders list, you can see that the buyer is Akelius Residential, and they bought 12% from me. Now they're the largest owner, Akelius Residential. Akelius is one of the richest people in the Nordics, is one of the most famous in real estate. He was the one that did a SEK 93 billion sell, I think it was, to Heimstaden in the beginning of this year. He sold a European residential portfolio to Heimstaden worth SEK 93 billion. He's a large owner of real estate in North America. I don't know exactly what he owns still in Europe, but it's a well-known investor in real estate with a European and a North American focus. Very skilled. It looks like he's often had a good feeling of selling and buying at the right points. Okay, thank you. Do you have any exposure to margin loans? You said previously that the LTV is not concerned if you increase your own Are you talking? Is that a question to me now? Yeah, it's for Jen, for example. Margin. Yeah. Yeah. We're not. -to have the- I'm not. the idea of margin on. No, I'm not commenting on that, but that was not a margin loan. I will not dig into that. It was not a margin loan. This is just to make sure that the private companies continues to be stable and can fulfill their financial requirements. Okay. At the Castellum level, do you have any margin loan exposure in terms of collateral or anything like that from banks? In Castellum? For Castellum also, yeah. No. Okay. No, no. Okay. No, no. Okay, clear. Probably the last one. You know, Balder is, we are not here to speak about them, but Balder is definitely concerned by its investment grade rating. We saw also that the currency has increasing, so the Swedish krona has increasing massively with the recent rate hike from Europe. Definitely there is a risk of contagion for you guys, even if you are stronger than this one, there is a contagion risk. Could you please comment on this headwinds possible, if we have some more pressure from your competitors, how you guys are able to manage the situation if it doesn't coming from you? What did you heard from politicians to manage this contagion risk, if it's happened? I mean, there is always a risk doing business. However, you should bear in mind that the Swedish state is triple A rated by all three major rating agencies. If you look at the Swedish banking community, most of the banks are A A rated. We have pretty good support from state and banks to handle a lot of these problems. Both when it comes to Balder and when it comes to us, we have a very sound underlying business, strong cash flow. Therefore, and looking at us, as I only represent Castellum, we have a low loan to value, and I expect us to overperform most expectations over time. We do have 99% index linked leases, and that will be paid with same thing as during COVID. We didn't lose anything during COVID either. 99% and that single 1% that's not leased, that has a fixed increase. 100% of our income will be increased, which covers increasing interest rates. We also have increasing energy costs for the moment. That's the cost side. But that's to more than 60% billed out to the tenants. We do have a hedge there. We have hedged the cost of the eighty percent on that side. The energy costs will gradually come down again. That's just a temporary high level. But the income. When it's increased, it will stay up. It's upwards only, and it stays. The cost side will come down again over the next coming years. We are 100% sure about that. Since governments all over Europe and in Sweden and in the Nordic are focusing a lot on increasing the production of energy at the moment. We have also agreed on starting up new nuclear facilities in Sweden. They are focusing on wind, water, nuclear, sun. There is a lot going on. The cost side will come down. The same with the interest rate. They will also eventually come down. We just need to be able to take these hiccups over shorter periods, but it will come down or the inflation will continue to be high, and then we will get continuously increasing rental income. Okay. Thank you so much. I- Do you have any last questions? Just excuse me. Before we have to wrap it up? Excuse me, if I can just last one. Could you just comment regarding pension fund, local pension fund reaction? What is the feeling on that, please? A feeling regarding how the pension funds will act? Will react, yeah, as investor in the real estate, Nordic Real Estate Forum. Normally they always invest a certain percentage of their portfolio into bonds, most part. That's correct. Stocks, and then a certain portion and directly own real estate. I don't see that they will change this. This is long-term decisions, and they will long-term strategy, and they will not change that due to this. I expect to see concessions made by the pension funds. We saw one just recently at record levels in Stockholm just two weeks ago. An office building sold to one of these institutions. I'm sure we will see more of those. In a less competitive market, there is still competition as long as there is more than one or two investors interested. I think we will see more acquisitions done by these types of We normally see that in these types of markets from these type of institutions. The pension funds are stable. They will continue to own and buy real estate assets. Thank you. That's all for me. Thank you. Okay. I think, You're welcome. That would be the last question for today. We are running out of time. I will also ask you to please, ask your questions by mail to me, Anna-Karin Nyman, and we will have them answered during this day. Don't hesitate to ask any more questions on email, and we will get back to you. Thank you so much for listening. Thanks a lot. Thanks a lot.