Hello, and welcome to the Catena audiocast for teleconference Q3 2021. Throughout the call, all participants will be in a listen-only mode, and afterwards, there will be a question and answer session. Today, I'm pleased to present CEO Jörgen Eriksson and CFO Sofie Bennsten. Please go ahead with your meeting. Hi, welcome to Catena's audiocast. We will now start today's presentation. Jörgen, you're welcome to start with some highlights. Thank you. Moving to slide three. Catena reports a strong third quarter with a 10% increase in the rental income. Our profit from property management has increased by 13% year-over-year. EPRA NRV has increased by 31% to SEK 293 per share. At the same time, earnings per share came in at SEK 40.25. New leases totalled SEK 27 million in the quarter. Worth mentioning is that we came out this quarter with a cost of debt at 2.1%. We acquired a property in Linköping, fully let out to Scan AB, and further, we won a 160,000 sq m land allocation in Helsingborg. In the third quarter, we presented new and more ambitious ESG targets. Moving to slide four. I hope that this will be maybe the last time we talk about COVID-19, but we'll see. Anyway, the impact from the coronavirus has a limited effect on Catena in the first nine months of 2021, summarizing a rental value of SEK 12.5 million was agreed to change from quarterly to monthly payments, of which they all have been paid according to the plan. Discounts linked to the government rent subsidy amounted to just under SEK 2.8 million. Moving to slide five and further on to slide six, please. We are very proud to present the history of profitable growth, and profit from property management has paced at 14% compounded annual growth for the last five years, and the earnings per share has paced at 41%. At the same time, the dividend has a compounded annual growth at 20%. Slide seven. The rental income amounted to SEK 938 million in the period. The total growth in rental income was 9.6% year-over-year. Project developments contributed 5.4% and net transactions to 4%. Like for like, rent growth contributed 1%, which comprises a combination of lease reviews, renewals, as well as indexation and changes in vacancy. There was also a one-off effects related to prepayment of an early lease expiry amounting to 0.8%. Moving to slide eight. Sofie. Yes. Furthermore, on the income statement, as we heard, the increase of rental growth was due to mostly project development and acquisitions and was 10% higher than the same period last year. The increase of income from property management was 13%. The surplus ratio stayed at 79.9%, the same as last quarter, compared to 80.3% same quarter last year. The surplus ratio is now back to the normal level since the pandemic struck. We had some effect from a cold winter, and also the cost for energy has somewhat increased due to the energy shortage in Sweden and especially in south of Sweden. The effects are to some extent offset by a change in build expenses to tenants. Unrealized changes in property value amounted to a total of almost SEK 1.3 billion, which corresponds to 6.1% of the value before adjustment. The value changes of derivatives amounted to SEK 152 million, and profits for the year to SEK 1.4 billion, resulting to an earnings per share of 40.25. Going to slide number nine, Jörgen. Yes. Thank you, Sofie. As indicated by the diagram, our cash flow has been growing consistently since 2016. For Q3, we have performed another strong cash flow period where we retained 60% from revenues in property management income. Cash flow is, of course, a key for stability and enable us to generate investments capacity for continued focus on our profitable development pipeline. Our target is to maintain a level above 50% of rental income. Our dividend objective is to distribute 50% of profit from property management, less standard tax. Moving to slide 10 and further on to 11, please. Handing over to Sofie again. Yes. During the quarter, we bought one piece of land outside of Helsingborg and one property in Linköping. After this, we have a total of 125 properties, whereof nine is located in Denmark. The economic letting ratio is back up to 96% from last quarter of 95%. Moving over to slide 12. Catena have a diversified asset portfolio, both in term of geography, tenant concentration, and asset side. Moving over to slide 13 now, Jörgen. Thank you, Sofie. As always, we are very proud of our customer portfolio shown on this slide, and you recognize the customers well, I hope. Many of them, for example, DHL, Boozt, Apotea, and PostNord, has performed extremely well the last 12 months. Moving to slide 14. Here is a picture of where we show the rent levels in our regions. As you can see, we have the highest levels in Stockholm, Malmö and Gothenburg, the big cities in Sweden. Moving to slide 15. We have a net rental of SEK 55.5 million for the first nine months of 2021. The WALE is a bit more than five years, and as Sofie mentioned, the letting ratio is back on 96%, which we are very happy of. Moving to slide 16 and further on to 17. Talking a bit about the valuation. The EPRA NRV has grown by 16% annually since 2016, and we came out Q3 with SEK 293 per share. At the same time, the five-year average return on equity has been 17%. Moving to slide 18, and Sofie again. In same period last year, the equity has grown with 48%, much due to two share issues earlier this year. Equity per share came to SEK 247. EPRA NRV, that is the long-term net asset value, came to SEK 293 per share. The total assets came to SEK 24 billion, which is an increase of 22% since same period last year. Moving to slide 19. Our investment properties amounted to SEK 22 billion, an increase since year-end of SEK 3.4 billion, of which one point three billion was due to unrealized value changes. EPRA net initial yield came to 5.2%, which is down 0.5% since September last year. The increase in value changes this quarter are due to the ongoing market yield compression. Going to slide number 20, and that's the capital. All along, the interest-bearing liabilities have increased with SEK 450 million, and by the end of the quarter, they amounted to SEK 10.4 billion. The net LTV came to 44.7% and are well below the goal of 50%. Average interest rates came down to 2.1% as a result both of the new unsecured green bond and also replacement of derivatives to a lower rate. Equity ratio was reported at 42.3%. Going to slide 21. The proportion of green financing has gone up to 21%, and the portfolio hedge ratio came to 67%, down from 71% last quarter. Debt maturity came to 3.2 years. Moving on to slide 22, capital deployment. Jörgen, go to slide 23, your welcome. Thank you, Sofie. Yeah, our goal is, as we have mentioned before, the focus is the majority of our investments into development. Although during the first three quarters, we have acquired properties for SEK 1.4 billion, whereof around 50% is in Denmark. We have also invested SEK 650 million in projects. Looking into the coming years, we see that the amount invested in development will increase. Moving to slide 24. Here you can see a slide overview all the transactions I talked about, and they are summarizing to SEK 1.4 billion, as I said. Moving on to slide 25. Here is the map of Sweden and Denmark, our largest projects in progress are presented here, and two of them commenced in Q3 and are located in Helsingborg. I will talk more about them later on. Moving to slide 26. Here we show you the potential in future development and we hold about 5 million sq m of land, where almost 1 million sq m are consolidated and with development plans in place. Rest of land bank is conditional on various contractual agreements, such as detailed development plans having to gain legal force. The search of new land continues along with ongoing zoning planning in progress. Moving to slide 27 and 28, Sofie. Unlike previously in the formulation of the new sustainability targets, greenhouse gas emissions now include indirect emissions from construction of new buildings and expansions, as well as major renovations. The new biodiversity target entails an increased focus on safeguarding biological diversity in connection with changes in how land is used. In efforts to achieve a more sustainable property industry, Catena considers this an aspect of increasing importance in the decision-making processes that new projects entail. As of now, we do not have all the answers and solutions, but we are confident that with the help of our dedicated staff, that we will succeed or at least make a difference in Catena's impact on the environment. During this quarter, Catena was certified by Great Place To Work, demonstrating that the company's employers perceive Catena as an excellent workplace. Moving to slide 29 are some more sustainable figures. 13% of Catena's lettable area are now certified according to Miljöbyggnad Silver, and we have 19 roofs with installation of solar cells. The work with EU taxonomy is ongoing, and also the work with TCFD and the mapping and analyzing of climate risk. You can also read more about our work with TCFD on our website. Moving to slide 30 with the market insight. Yeah. Further on to slide 31. We were talking before about our customers' performance the last 12 months. We here show you some statements from PostNord, Instabox, and MatHem, and they all confirm the rapid growth in their business, the latest year. Moving to slide 32. A picture of one of our new projects in Helsingborg, a 15,000 sq m building where we have signed an LOI with Nowaste Logistics. The construction will be completed in Q3 2022. The investment is about SEK 124 million. Moving to slide 33, where we show the other project in Helsingborg, also started this summer. It's almost 17,000 sq m, signed lease contract with PostNord, and the project will be finalized in Q3 2022. Here we have an investment of about SEK 132 million. Moving to slide 34. The latest acquisition is located in Linköping, and we welcome Scan as a new tenant by Catena, and the investment was around SEK 200 million. Moving to slide 35. In the other week, we press release that we won a land allocation competition in Helsingborg together with our tenant, Nowaste Logistics. The land concession is located close by the E6 highway, covers approximately 160,000 sq m, and has been designated for industrial purposes by the municipality. In competition with 11 other tenders, the proposal submitted jointly by Catena and Nowaste Logistics won the contest announced by the city of Helsingborg. Now we are finished with the presentation, and we move on to the Q&A session, please. Thank you. If you do wish to ask a question, please press zero one on your telephone keypad. If you wish to withdraw your question, you may do so by pressing zero two to cancel. Our first question comes from the line of Niklas Wetterling from DNB. Please go ahead. Thank you. I got a couple of questions. First off, regarding energy prices. It seems to be quite limited impact in Q3. What's your outlook on the Q4 results if the high prices remains? We'll think that it will be a small impact, I mean, the letting ratio is 96%, and the tenants cover almost all the energy costs. It's just a small impact for us. Okay. You can transfer the costs? Yeah, exactly. Yeah. Great. Some questions about the latest land allocation in Helsingborg. I was wondering if you could say anything about the purchase price, timeline, or potential yield on cost in that project. I think it's too early to talk about that. We got the news two weeks ago, and the next step is a meeting with the municipality starting to, so to speak, negotiate about the land, the price of the land and the timetable and so on. We have to come back later on with that issue. Okay. You mentioned that you won the allocation together with the tenant, Nowaste. What does that mean? Does that mean that this will be some kind of JV or will the yield on cost be lower in this project because you have to share the profit with Nowaste here? Or is this just a normal project in that sense? I don't want to go into any deep details there. At the end of the day, we will fully own the real estate 200%, and Nowaste will be the tenant. We had a package deal that we showed the municipality that we had best case together. Yeah, we have to come back in that matter also later on. Okay. Great. I believe in your project pipeline, you mentioned that one property was vacant, but I believe you had a deal with Nowaste on that one, right? We have assigned an LOI with Nowaste. The intention is that they will sign a contract with us. As we speak, there is no lease agreement. As we have an LOI, we of course hope that it will be the fact in the coming periods that we sign a contract with them. Otherwise, we have to go out to the market and find another tenant. Both parts are aiming for signing a lease contract. Okay, great. My last question is about the interest rate down from 2.3% to 2.1%. Is this all explained by matured swaps or have you also redeemed swaps? We have also. Yeah, it's an effect of the. Lower margins, of course. Yeah, lower margins, of course. Our MTN program that we started this spring with lower interest rates. Okay. You have not redeemed any swaps? No. That hasn't matured. Okay, great. Yeah. Thanks. That's all of my questions. Okay. Thank you. The next question comes from the line of Jan Ihrfelt from Kepler Cheuvreux. Please go ahead. Okay, thanks for that. Good morning. Actually, I have three questions. The first one is regarding your like-for-like growth in rental income. It's 1%, that's including the indexation effect. Is it hard to raise rents for you above the indexation level? Yeah. We have had that discussion many times, and I think we will have it in the future as well. First of all, we don't have so many contracts that we are renegotiating every year. It's tough to see any trend. Of course, if we are in Stockholm and in Malmö and in Gothenburg on the best locations, we can see that there will be a potential of higher rents. But it's tough for us to see how much that will impact the total portfolio. We can also see on our other locations in smaller cities along the highway, there is still some land available. With the market yield right now, it's tough to push the rents upwards on those locations. With that said, we are guiding around 1% like-for-like in the coming 12-24 months. Okay. Second question really regards the supply situation. Do you see that your competitors have started new properties with on speculation or how does that trend evolve? We have seen some deals done. Actually, last week, I think it was Skanska sold to Barings, where there I think you have four different objects. One was with a lease agreement, the other was vacant. So some bigger players, they are investing a lot, and they can also invest in pure speculation. So there is a lot of capital going into the market in Scandinavia right now. That's our feeling. That's also our feeling when we are looking into new acquisitions that the yields are going downwards. Okay. Do you see that the portion of built on speculation has increased compared to probably, yeah, last year? Yeah. I don't have any exact figures on that one, but that's our feeling that there are some more speculation ongoing than there was 12 months ago. Okay. Thanks. My final question regards projects. On slide 26, you have a map of future development projects that may start in the future. Could you just help us? Are there any of these projects that you plan to start in 2022? I would say that we will start in terms of preparation on the ground for Landvetter on Stockholm South and also in Sunnanå, logistic position Sunnanå. We have ongoing discussions. Some in Landvetter, we still wait for the zoning plan. We hope that it will be approved in Q4, and we will be ready to construct as soon as we can. With that said, we will start with the ground preparation as soon as we can. We will be ready to start construction and of course negotiate with the potential tenants in 2022. Okay. Thanks very much for taking my questions. Thank you, Jan. The next question comes from the line of Paul May from Barclays. Please go ahead. Hi, team. I've got a couple of questions sort of fairly linked and linking back to a couple of the earlier questions as well. Comes back to the rental progression point. You know, my understanding is your portfolio is generally one of the more prime portfolios in the market. I appreciate it's not gonna be 100% prime located, but general broker consensus is that rental growth is coming through strongly. I appreciate you're in better locations. Just wondered, appreciate your like for like generally lower, but if you were to think about your rental position relative to where market rates are, what sort of reversion potential do you feel is available in the portfolio today? How much has that grown relative to, say, a year ago or even over the last three months where things seem to have accelerated quite materially? It's very tough to answer that, but I'll try to elaborate a bit about it again here. I mean, we can see as soon as a new project is starting somewhere in Sweden, the rents are relatively low because of the yields on the market compared to the yield on cost. There is a project profit for the developers. And if we have an existing property in that area, we have probably a higher rent since it was negotiated some years ago, where the yields were around maybe 7%. It's rather tough to push the rent levels up in those areas. As I mentioned before, if we are in Stockholm, we have some objects around Stockholm. Also when we will start new projects in Stockholm South, where there is a shortage of land around Stockholm. We are very confident with quite high rent levels with the new projects, as well as when we are going to renegotiate the existing contracts around Stockholm and also in Malmö and Gothenburg. It's tough to guide with some figures in this matter. Okay. Just to, I suppose, think about it another way, you're saying that by developing in certain locations, you're actually reducing, putting your portfolio into an over-rented position in those markets, and therefore you're facing rent deflation. Is that how I should be understanding it in certain markets? Yeah. Maybe not deflation, but it's stable. Just stable. Also, when we renegotiate, if we can do some adjustments in the existing properties, then maybe there is a chance to push it a bit or to have it stable. We are very seldom going down in the rent levels. Of course, maybe in some special location it could be the reality as well. In total, our portfolio, we can see a small potential in the like for like in the coming years. Of course there are differences case by case. Sure. Just to be clear, the 1% you were mentioning like for like, that's in addition to any indexation, is it? Yeah. Now of course, we'll see. I mean, last year there was almost no indexation in Sweden. Maybe this year will be a bit higher. We don't know yet. Of course it's included. The indexation's included, 'cause indexation is currently running around nearly 3%. You're saying your 12-month like for like on a non-indexed basis is gonna be negative? Sorry, just trying to understand the 12-month basis. We haven't made any forecast in the coming 12 months. I mean, it's looking better if you say that the indexation will be 3%. Of course, it's looking better if you just isolate 12 months. I mean, also the last year was, I think it was 0.4% or. No, no. Yeah. I appreciate that. That's what I was just trying to understand is your 1% excluding any indexation assumption effectively. That's, I think you're saying it is, so that's good. Just to get a sort of sense on when you have your negotiations, because sorry to labor on the point around rent, but we are hearing from others that there is strong rent tension. I think you mentioned in your statement as well that you expect demand to exceed supply, you know, to take up any of the new supply, the supply that is coming through. Demand is very, very strong. How much are you trying to push the rents forward, and how much are you sort of working with your tenants for occupation, just to get a sense of your approach to the negotiations, and whether it's. It's not a bad thing whether you're just, you know, slightly less aggressive on pushing the rents than maybe some of your competitors or peers. Not really competitors, but peers in the market. Yeah. Let me put some color on it. I mean, we have, for example, DHL and PostNord and some other strong partners or tenants that we have on many different locations in Sweden. We can maybe see a potential to raise the rent a bit in one occasion. There is other ones that we are quite happy if we will prolong the contract, and that will of course be a negotiation. We will always prefer the long, stable relationship with the tenants. Since we are looking very far in the future with a very good cooperation with the customers. We are not pushing the rents no matter how much it costs. Yeah. It's a balance walk. Yeah. Okay. Just sorry, final one on valuation. Is that a similar approach to valuation as well, that you take that longer-term approach and almost reluctantly compress yields given you know, your yields do look extremely attractive. I appreciate your share price is trading significantly ahead of that. Yeah. Your yield on the portfolio looks, you know, considerably attractive relative to where even average market yields are for your type of properties. Obviously, prime yield is significantly tighter, but even average seems to be tighter than where you are. Is that again a sort of cautious approach to that long-term view on the valuations? No, I wouldn't agree totally there. I mean, we have an external valuator of the whole portfolio, all the properties will be valuated once a year. We do see that there has been a compression in the last months actually, and maybe all of the valuations are not updated. We feel confident with values today. Maybe we see in the coming months that there will be some signals from the external valuators that the yields are going down. They normally lag about six months. They should have a lot of evidence in the market before they change their yields. Yeah. Okay. Yeah, the trend is downwards. That's my feeling. Yes. Yeah. Okay, brilliant. Thank you very much. Thank you. Cheers. Just as a final reminder, if you do wish to ask a question, please press zero one on your telephone keypad now. Our next question comes from the line of Victor Krüeger from ABG Sundal Collier. Please go ahead. Thank you. I thought I heard in the beginning that you briefly mentioned a one-off, and I can't track that in the report. Would you like to reiterate what that was, please? The one-off? It was when we had a tenant moved out from Linköping in the first quarter in 2020. When we make the comparison with 2021, there was a one-off on that one. If that's. It's we had a customer in Malmö that moved out. Oh, yeah. When they moved out. Oh. Yeah. They had to pay a one-off to get out of the lease contract in advance. They moved to our own property in another place, so we came out well on that. That's why we had a one-off even in this quarter. Well, during the. Yeah. Report. We have a negative impact if we have reported this year compared to last year. Yeah. The one-off we had last year was even bigger. Yeah. We had one-off even. Okay. Yeah. A smaller one. Cool. Just to clarify, the Dagab one in Malmö, was that what quarter was that? I think it was during this quarter. Last year. Exactly. Yeah. I think it was. We can come back to that. Yeah. We can ask. Yeah. I just wondered if it was something recent. Yeah. We can find out then. No, no worries. [crosstalk]. Thanks. Big figures. Yeah. Cool. Just briefly regarding Stockholm City, the building start. You had a question, the first one here in the Q&A session that asked around that. As I understood it, you said you just got the land allocation two weeks ago, so it was too early for you to comment anything about the timeline. Is that correct? That was regarding Helsingborg. T he competition we won. We will have to come back with more details around that one when we have started negotiating with the municipality regarding Stockholm South. That's Norway. We prepare. Yeah. That's Norway. Yeah. And. And Catena in a cooperation. Regarding Stockholm South, I said that we start preparing for groundwork in 2022. Yeah. Of some of the area where we do not need the water permission because that's also an ongoing process. That's the same case for all of the competitors in the area in Stockholm South. Many of us are struggling with the water permission, but on our area, the 450,000 sq m. Yeah. Some of the area is good to go. We will start with some work, groundwork, not the buildings in 2022, the first two quarters. Okay. With the construction, would you say that would start in H1 2023 then? It's. I'm not sure about that. Also depending on when we have a lease agreement. We. Okay. We'll come back to that one. Fair. You said you mentioned it was half of the land that you started to build on. Is that the same as the amount of land that you don't need water permission for? Well, I don't have the exact figures here, but. Just ballpark. We will start with one portion of the land to prepare so we can in theory also start with some buildings in the area. Yeah. But also. Yeah. We can also get a flavor. It can all go across. To know 1/6 or just a half of the land, like sort of some sort of quantity to understand the size. Yeah. We'll, we have to come back with that one, so I don't give you the wrong figures. Okay. Was something more there. Just regarding to what we just talked about, did you mean that both Landvetter, Stockholm South and Sundbyberg is projected to have some sort of preparation started in 2022? Right. Cool. The last one for me was just the indexation or more so the like for like question. The first guy who asked questions said it was, you answered it was including indexation and last guy excluding, if I understood it. I just wanted to clarify what the 1%-2% like for like growth includes. Yeah. We need to sort of doing the homework now when we can face the indexation, what will be for 2022. I come back with the figure. It has been a mix of both before. We have to analyze that again, once again. Okay. Thanks for taking my questions. We have one final question from Christian Royal Davis from [audio distortion]. Please go ahead. Hi. Thank you very much for taking my question. Apologies to rabbit on about the indexation point, but I think there's a very important bit of clarification here. Regardless of whether the number has been reported in the past as including or excluding indexation, so the components are like for like. But just conceptually in your mind, the CEO, do you expect the business to grow the like for like 1% above indexation in the next 12-24 months as you guided, you know, 5 minutes ago? Or is that including indexation, which most commentators think is going to be kind of at least 2%-3% for next year? If the indexation will be 2 or 3% next year, then we have to change the guidance around 1%, of course, because we have almost 100% indexation of all our contracts. I apologize if we are saying wrong or mix it up. Of course, when we do know the indexation for next year, if it's around 2 or 3%, then we can see that there will be more than 1% like for like. Brilliant. Thank you very much. Thank you. As there are no further audio questions, I'll hand it back to the speakers. Okay. If there's no more questions, and we have no questions on the email. We would like to thank you all for today. Thank you very much. Wish you all a nice week. Take care. Everyone take care. Be in touch. Bye-bye. Bye-bye. This concludes our conference call. Thank you all for attending. You may now disconnect your lines. Thank you.