Welcome to Sveafastigheter Q3 earnings call 2024. For the first part of the presentation, participants will be in listen-only mode. During the Q&A session, participants are able to ask questions by dialing #5 on their telephone keypad. Now I will hand the conference over to the company. Please go ahead. Welcome, everyone, to Sveafastigheter's first earnings call and presentation of our Q3 reports. My name is Kristel Eismann, and I am the Head of Treasury and IR. Today's presenters are CEO Erik Hävermark and CFO Martina Lous-Christensen. After the presentation, we are opening the lines for Q&A. Now I am handing over the word to CEO Erik Hävermark. Please go ahead. Thank you, Kristel. This is an important day for Sveafastigheter, as this is our first interim report as a public company, and we are very happy to be able to present a strong financial report given our very short history. Since we are a new company, I want to start with some general information about Sveafastigheter before we look into our interim report. Sveafastigheter was established in June by merging properties from three separate companies. That in turn means that our financial historical numbers before that are a combination of the financial statements from these companies. Therefore, it's worth mentioning that certain aspects of our financial history are not truly representative for Sveafastigheter going forward. 5,200 apartments of our standing assets will continue to be externally managed until the end of the year, and from 2025, our property management team will take care of all of our properties, and then we will be able to fully benefit from our value-adding property management philosophy and benefit from the economies of scale that exist in the Sveafastigheter Group. Despite our short history, it is important to point out that our organization has managed a large part of our portfolio over many years, and it's also worth mentioning that these residential properties then were part of a larger property portfolio, where the focus wasn't solely on residentials and operational efficiency. We have identified many improvement opportunities that will help us to reach our targets, so on the next page, you see a picture from our listing. Sveafastigheter has reached two very important milestones this year. Firstly, the legal and capitalization restructuring in June that set Sveafastigheter in the shape it is today. And secondly, the listing in October on Nasdaq First North Premier Growth Market, where we welcomed over 10,000 new shareholders. The book building was significantly oversubscribed, and the majority of the allocations at the IPO were to long-only sector specialists and Nordic investors. As an independent company and with the broadened ownership of Sveafastigheter, we are stronger, and it will, moving forward, enable us to capture the full potential of our property portfolio and development pipeline. On the next page, you see an overview of our business model that is based on two very strong business areas: our property management and our new construction. The combination of these two business areas allows us to benefit from the very strong and stable cash flow from our sizable portfolio of standing assets in a rent-regulated market, but also expand the business in a profitable way with our new construction that continuously will add new builds to our property management portfolio. This is also clearly presented in the numbers in our interim report for the third quarter that I shortly will present. We focus on increased profitability and organic growth, and with a strong and sizable property portfolio, an experienced in-house organization, and a conservative capital structure, we feel very comfortable at achieving our goals, of which our key targets are within the coming five years to upgrade at least 2,000 apartments, start construction of 600 to 800 apartments annually, obtain land allocation for 800 apartments annually, and reach an NOI margin, including property administration, of 70%. Our annual growth of NAV shall be, on average, about 12% over a business cycle, and our LTV below 50%. Finally, in this intro section, our mission is to manage and develop homes for more people where current and future generations can thrive and feel secure. So, let's take a closer look into the numbers in our interim report. The financial performance in the third quarter shows strong growth in both rental income and NOI, driven by completed new construction projects and the yearly rent increase in standing assets. The rental income for the third quarter was SEK 357 million, an increase of 19.8%, and the net operating income was SEK 252 million, an increase of 18.3%. The profit from property management was SEK 85 million in the third quarter, and the unrealized changes in property value was SEK -265 million, where the restructuring of Sveafastigheter had an impact of SEK -124 million. And the result for the quarter was -338 million SEK, a result that is affected by higher tax than a normal year, also due to the formation of Sveafastigheter. On the next page, we can look at our period from January to September, where we see a clear indication that we are already delivering on our strategy. During the period, we have completed 1,020 apartments from our new construction, and the yearly rent negotiation landed on an increase of 5.2% in rental income. In the like-for-like portfolio, the rental income increased by 6%, and our net operating income increased by 6.6%, meaning that the underlying profitability is strengthened. The restructuring and formation of Sveafastigheter have incurred higher administration costs for this year. Despite that, the NOI margin, including property administration, is relatively stable, and the NOI margin excluding property administration has increased from 60.9% in 2023 to 61.9% the last 12 months. This indicates that we are on the right track on our goal of reaching an NOI margin, including property administration, of 70% within five years. On the next page, we can note that our occupancy rate has increased to 94.7% compared to 94.3% in the last quarter. Increasing occupancy rate is one of several key focus areas within our strategy to improve the profitability of our standing assets. We do expect some quarterly fluctuations, and therefore a long-term trajectory is more important, and we firmly believe in the set plan we are following. Then, on the next page, you can see our income statement that is affected by the restructuring and formation of Sveafastigheter. Our administration includes a cost of SEK 37 million related to the restructuring and formation of Sveafastigheter, and SEK 42 million are related to the other income, where the majority relates to an external property management agreement with SBB, where Sveafastigheter managed a residential portfolio until 2026. The interest cost before the restructuring of Sveafastigheter and the current capitalization structure includes interest costs of parent company loans that don't reflect Sveafastigheter as a standalone company. Additionally, tax is also impacted this year by the formation of Sveafastigheter, which is obvious when you compare current tax in relation to our result before financial items for this period to the situation in 2023. So, let's have a look at our investment properties on the next page. We have a sizable portfolio of standing assets in strong locations: 14,550 apartments with a value of SEK 24.5 billion and a rental value of SEK 1.5 billion. 94% of our standing assets are in Sweden's three metropolitan regions or university cities. The yearly rental increase for 2024 was 5.2%, and we have, for about 15% of the portfolio, reached agreements for the rent increase next year, 2025. In those agreements, the average rent increase is over 4.6%, and we believe that it will be possible to reach an even higher increase for the portfolio that yet not are negotiated. We continue investing in our properties to increase net operating income and NOI margin, and as mentioned, our goal is to achieve an NOI margin of 70%, including property administration, within five years. During the quarter, we have upgraded 19 apartments, and our goal is to upgrade 2,000 apartments in the coming five years, and we will gradually increase the pace to reach this goal. Importantly, investing in energy projects will additionally help us to reach our NOI margin target. So far this year, we have invested SEK 39 million in energy projects. As a large pure-play residential company, we benefit from economies of scale. One example of how we capitalize on this potential is that we have decided to bring our customer service, which is currently being managed by an external provider, in-house. Over to our ongoing construction on the next page. Sveafastigheter has a proven track record of completing new construction at pace, on time, and to a high standard, and importantly, in line with budget. During the quarter, we have completed 80 apartments and, year to date, 1,020 apartments. This quarter, we have started three new projects with a total of 540 apartments, and we now have 1,050 apartments under construction that will add an estimated rental value at completion of SEK 141 million and an estimated property value at completion of SEK 2.5 billion. One of our key operational targets is to start new construction of 600-800 apartments annually, projects that derive from our very strong project development portfolio, which we present on the next page. Our project development portfolio includes 6,608 apartments, and 93% of the portfolio are located in the Stockholm-Mälardalen area. It is in Stockholm-Mälardalen we see the strongest profitability for development, and it is in this region we will grow with our new construction going forward. Our projects are in very good micro-locations, where there is a strong demand for housing. We see good profitability in our projects, with a project margin well above 15%. As we continuously start new construction projects, we also want to add new building rights into our portfolio, and our target is to obtain land allocation of 800 apartments annually in the coming five years. Let's have a look at our earnings capacity on the next page. The net operating income is 970 million SEK from our standing assets. We also show the earnings capacity from ongoing construction that we expect to be completed within the next 12 months. This represents 609 apartments of our total ongoing construction of 1,150 apartments, and when we include these properties, our net operating income is 1,017 million SEK, and as I already have mentioned, our portfolio is constantly growing by our new construction, and this year alone, we have completed 1,020 apartments. We have analyzed the rental income and operating costs for these properties in our earnings capacity, as well as the properties that until June were reported as joint ventures, and thereby the earnings capacity better displays the present situation than what the income statement does. In our earnings capacity, the income from external property management agreement that we have with SBB is on the row Other Income, and our costs for this assignment are included in the administration cost with 42 million SEK. Sveafastigheter has historically been in the forefront in sustainability, and now, as a larger and stronger group, we are preparing to strengthen that position with a long-term target of becoming climate neutral. This autumn, we have carried out a double materiality assessment and identified and validated 10 material sustainability topics for our business. We have established a climate target group, and we have started climate data collection for Scope 1, 2, and 3. Our emission reduction targets will be set in line with SBTi's methodology, and to further enhance our focus on social sustainability, we have appointed a head of social sustainability. By lowering our energy consumption, we reduce both our carbon footprint and our property costs. During the period, we have invested SEK 39 million in profitable energy investments. On the next page, you see how our property values have evolved, and after 10 consecutive quarters with increased yield requirements and declining property values, this quarter, the valuation yield is unchanged compared to the previous quarter. We also note that the transaction market is starting to pick up, albeit in small volumes. This month, the central bank cut the policy rate by 0.5 percentage points to 2.75, and the rate has fallen from 4% in February. The central bank has communicated that further cuts in December and the first half of 2025 are potentially on the table. This, combined with other factors that now are present, usually entails a good foundation for increasing property values. Over to financing. Sveafastigheter has a conservative capital structure with a low risk. Our LTV is 43%, our average interest rate is 3.2%, and our ICR is 2.1. After the quarter, we have refinanced a bank loan of a bit over SEK 1 billion that was maturing in 2024, with a new loan that matures in 2027. And in conjunction to the listing, the shareholder loan was repaid. After the end of the quarter, we also signed a credit facility of SEK 1 billion that provides us with a solid liquidity position and confidence to carry out value-adding investments in our standing assets and our development portfolio. Finally, to summarize, we are happy for our first interim report that shows strong growth in rental income and net operating income, and that we are already seeing signs of increased profitability. We have a strong capital structure with a low risk and a strategic and operational focus going forward, and we expect a strong rental development for 2025. That was the presentation. Thank you so much for listening. Now we are ready for your questions. If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Niclas Vetterling from DNB Markets. Please go ahead. Good morning. I have two questions, and the first one is on rent increases. You mentioned you have entered some agreements at 4.6% for 2025, and I wonder how big part of the portfolio that is for, and also if you could say something about your expectation for total rent increases for the whole portfolio in 2025, please. Hello, Niclas. Thank you for your question. So our two-year agreements that have an increase for 2025 of over 4.6% in rental income is for roughly 15% of the portfolio. And since a couple of years, there is a system in Sweden where the rent can be challenged by an independent assessment, and we have seen some rents being challenged in that system, and the verdict was a rent increase for next year over 5%. So that gives you some guidance where the rent increase could be for the rest of our portfolio, but we don't have a guidance for the total portfolio. But we do see the possibility to have a higher rent increase than 4.6% for our portfolio next year. Okay, clear. Thanks. And my second question is about the cash position. I know that about a third of it is pledged. Why is that? We have about SEK 120 million that was pledged in the end of Q3, but at the IPO that was released, so we don't have any cash unpledged or pledged. Okay, great. Thanks. The next question comes from Keivan Shirvanpour from SEB. Please go ahead. Yes, good morning. I have a couple of questions. First off, regarding the administration costs, which seem to be down by 19% compared to Q2, but up by 100% compared to last year. If we analyze these administration costs for Q3 and then adjust for the SEK 4 million in one-offs, this implies that costs are 21% above the earnings capacity. What explains this difference, and are you aware of any types of one-offs in the Q4 related to the listing? We have one-offs this year related to the formation of Sveafastigheter. The expected level for administration cost is best displayed in our earnings capacity, and you can see in our report how much the one-offs are in administration costs for this year. Okay, and then my second question is regarding the occupancy. It's up a bit versus Q2, which seems to be driven by university cities, where occupancy is up by two percentage points. Is there any explanation for this improvement quarter- on- quarter for university cities? So we have a strategy how to improve the occupancy rate in the portfolio as a whole. Then occupancy rate is expected to have some quarterly fluctuations, and we believe that it's best to analyze a long-term trend. So I don't have any explanation why it's increasing in university cities this quarter, but we do believe that the occupancy rate for the portfolio as a whole will start to increase in pace that we implement our measures according to our strategy. Very good. And also, occupancy rate in Stockholm seem to be down. And is this due to some type of adjustment in the vacancy rates for completed projects, or what explains that occupancy is down? No. So we do make some adjustments for new builds the first three quarters, but that doesn't affect the presented occupancy rate this quarter. What we do see is an increased demand for our rentals in the portfolio as a whole, but it's too early to have a clear vision on what our occupancy rate will be going forward. The long-term trajectory is what is important for the portfolio. Okay. Yeah. And I also have regarding this completed project in Karlstad, it was 80 apartments. Can you say anything about the occupancy in these newly completed apartments? I don't have that figure in front of me, but we can come back to that. But we do see that it takes roughly for regional cities three quarters to reach a matured occupancy rate. And we do see that our new builds, in general, have a higher occupancy rate than the portfolio as a whole. And then my last question relating to your target of 2,000 apartment upgrades over five years or 400 per year. And y ear- to- date, you have upgraded 56 apartments. What type of pace should we expect for 2025 and 2026 in relation to this target then? We will gradually increase the pace. We don't have a target for next year, but it will not be 400 apartments. It will be lower. We will gradually increase the pace going forward to reach our target of upgrading 2,000 apartments within five years. Thank you. Those were my questions. The next question comes from Jan Ihrfelt from Kepler Cheuvreux. Please go ahead. Okay. Thanks for that. Good morning. Just two, three questions from my side. Just going back to the occupancy rate, and I just wondered the little bit of increase that we saw in the third quarter, is that you have filled out newly constructed apartments to a higher level than it was in the second quarter? No, we do see that the occupancy rate is increasing for the portfolio as a whole this quarter, but it's also important to note that we are expecting some quarterly fluctuations. So what is important for Sveafastigheter is a long-term trend of increased occupancy rate. Okay. Second question then, and it's regarding the rent level you see here. You indicated 4.6%, and I mean some agreements on 5.1%. Do you see 5.1% as some kind of base that you probably will reach higher than 5.1% for next year? So we don't have any guidance for the rent increase for next year. I would say 4.6% is a base level, and we do see now that rent negotiations in the last period have landed on higher rent increase than 4.6%, and it's only 15% of our portfolio that has a rent increase negotiated for next year. So we do believe that we see the possibility to have a higher rent increase than 4.6% for 2025. Okay. My last question is regarding your earnings capacity, and in that, it's included construction that are completed within 12 months. How many apartments are included in that earnings capacity as ongoing construction? 609 apartments. Okay. Thanks. Thank you. That's where my questions. As a reminder, if you wish to ask a question, please dial pound key 5 on your telephone keypad. The next question comes from Staffan Bülow from Nordea. Please go ahead. Hello, and thank you for the presentations. I have two or three questions. I'll start with the first one. So you mentioned that current tax or the tax rate was unusually high in the quarter. Could we get some guidance going forward on what we should be, what we should expect in terms of percentage of pre-tax profit? Yes. So this year, the tax is unusually high because of the restructurings we have done. We cannot use group contributions as we would normally do. We don't have a set number for the expected tax level, but we can see that we historically have been at 5% of the tax to result, and we can see this year we are at 22%. So we expect it to be lower. We have also historically seen that we have been at 5%-8% of the EBITDA to give some guidance. Okay. Thank you. Yeah. Thank you. That's clear. And in terms of the occupancy rate, which you report, does that exclude new production completed in the last three quarters? And if so, could we get a figure including new production which has been completed in the last quarters? We actually don't exclude new builds in our occupancy rate. We apply the portfolio occupancy rate for new builds that are completed within the last three quarters. We don't have the figure presented what the occupancy rate when we don't apply the occupancy rate for the portfolio for our new builds. But we do see that our new builds, after one year, in general, have a significantly higher occupancy rate than the portfolio as a whole. Okay. Thank you. And one final question. In the balance sheet on the debt side, there is liability to owners. Will that continue to be a part of the balance sheet, or will that be dissolved? That debt has been repaid after the quarter close. So we currently don't have any loans or debt to the owner. Okay. Thank you. That's clear. Those were my questions. There are no more questions at this time, so I hand the conference back to the speakers for any closing comments. Thank you so much for listening, and I wish you all a nice day.