Welcome to Sveafastigheter Q4 Earnings Call 2025. For the first part of the presentation, participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key five on their telephone keypad. Now, I will hand the conference over to the company. Please go ahead. Good morning, everyone, and welcome to Sveafastigheter's Earnings Call and presentation of our year-end result 2025. My name is Kristel Eismann, and I'm Head of Treasury and IR. Today's presenter is CEO Erik Hävermark. After the presentation, we are opening the lines for Q&A. Now, I am handing over to Erik. Please go ahead. Thank you, Kristel, and good morning, everyone, and thank you for joining. I will walk you through our fourth quarter and full year results, and then we will move to the Q&A session. Sveafastigheter is Sweden's largest listed pure-play residential company, with residential properties valued at SEK 29 billion. Our operations are built around two complementary business areas, two pillars that support organic growth. The first is property management, where approximately 15,000 apartments generate stable and predictable cash flows. The second is new development, with a development portfolio of more than 7,000 apartments that supports profitable growth over time. Our approach is operational driven, with a clear focus on increasing profitability in the existing portfolio, while creating growth through new development and value-adding investments. This approach underpins our targets, which I will come back to later. All of this is guided by a clear and ambitious vision: to be Sweden's leading residential company. Our mission reflects this ambition to manage and develop homes for more people, where current and future generations can thrive and feel safe. For us, these are not just words. They are put into practice every day throughout the organization. This was clearly demonstrated when, for the second year in a row, we received Kundkristallen for the largest uplift in tenant satisfaction. I will now turn to the next slide and walk you through some of the key financial highlights from the quarter. Rental income increased by 9.9% to SEK 387 million, and NOI increased by 14.5% to SEK 246 million. This reflects continued strengthening of NOI margin, which I will return to later in the presentation. With administrative costs stabilized at a lower level compared to historical levels, we delivered a solid profit from property management of SEK 96 million. The value of the total portfolio decreased by SEK 138 million, primarily driven by a write-down of an ongoing project in Eskilstuna. In this project, Sveafastigheter has a legal dispute with the contractor. As a result, the construction contract has been terminated, and during the quarter, we decided to continue the project with a new contractor. The estimated total investment for the project has been increased by SEK 177 million, mainly related to correction of previous construction errors and additional construction costs to complete the project. It is important to note that this project does not originate from our in-house development business. It was acquired several, several years ago under a forward funding arrangement, where the seller was responsible for construction, constructing the property. Excluding the Eskilstuna write-down, we had slightly positive value changes during the quarter. As a result of the negative value changes, we reported a loss of SEK 12 million in the quarter. Our strategy remains focused on strengthening profitability through discipline, disciplined operational execution, and value-adding investments. The next slide, slide 6, highlights how this approach has delivered consistent results during the quarter. Rental income increased by 12.9% to SEK 1,536 million, while net operating income grew at an even faster pace to SEK 1,010 million, up 17.4%. In a like-for-like portfolio, rental income increased by 4.18%, and net operating income by 7.4%. As these figures show, with NOI growing faster than rental income, our NOI margin continues to strengthen. For the full year, the NOI margin amounts to 65.7% and 60.3% when including property administration. This represent an improvement of 4.6 percentage points year-on-year, which underscores the strong operational progress we have made. Our target is to reach a NOI margin, including property administration, of 70% by June 2029, and based on the development so far, we remain well on track to achieve this. To further enhance profitability and NOI margin, we are concentrating on a number of key focus areas outlined on the next slide, slide seven. Sveafastigheter was formed in its current structure in June 2024, with a clear ambition to perform better as an independent, large-scale, and pure-play residential company. From the outset, we have operated with a strong operational focus, aiming to deliver both long-term shareholder value and high tenant satisfaction. One of our first priorities has been to increase occupancy, as we saw significant potential to reduce vacancies through a more active, locally driven property management approach, supported by clear central guidance.... In parallel, we are building a scalable and simplified platform, enable us to operate more cost efficiently, and capture the economies of scale in our portfolio. Another important component of our strategy is disciplined and profitable investment activity. While new developments represent the largest share of our investments, we see also strong returns from value-creating investments in the existing portfolio, particularly through apartment upgrades and energy efficiency projects. I will return to our investment activity in more detail shortly. Before that, let's take a close look at how occupancy and administrative costs developed during the quarter on the next slide. The long-term trend in occupancy is clearly visible when looking at the quarterly development since Sveafastigheter was established. At the end of the quarter, the occupancy rate amounted to 95.3%, an increase of 0.7 percentage points year-on-year. Compared with the previous quarter, occupancy declined by 0.4 percentage points. This decrease is primarily explained by higher number of apartments undergoing upgrades at quarter end, compared with the previous quarter. Adjusted for ongoing upgrades, occupancy declined only marginally by 0.1 percentage points. We see continued potential to strengthen occupancy during 2026, although some quarterly fluctuations should be expected. After an intensive initial phase focused on establishing Sveafastigheter as a standalone company, we have now entered a new phase with full focus on operational optimization. The initial phase resulted in non-recurring administrative costs amounting to SEK 28 million for the year. The previous quarter was the last to be impacted by these non-recurring items, and in the current quarter, our administrative costs have normalized and are in line with the cost levels reflected in our earnings capacity. Let's move to slide 9 and take a look at our value-adding investments in the existing portfolio. Our ambition is to upgrade 2,000 apartments by June 2029, starting from July 2024. During the year, we upgraded to 154 apartments, of which 77 were completed during the quarter. These renovations have generated a yield on cost above 6%, demonstrating the strong profitability in upgrades. We are prioritizing upgrades in larger cities, where demand for renovated apartments is particularly strong, targeting to upgrade 400 apartments in 2026. The second key area of investment within the existing portfolio is energy efficiency projects. By reducing energy consumption, we are able to lower tariff-based operating costs, which result in attractive returns on invested capital. During the year, we invested SEK 71 million in these initiatives, achieving a yield on cost exceeding 10%. In addition to strong returns, these investments also strengthen the portfolio from an ESG perspective and in light of upcoming regulatory requirements. In 2025, Sveafastigheter invested a total of SEK 267 million in the existing portfolio. The majority of these investments were directed toward our focus areas, apartment upgrades and energy efficiency initiatives. The remaining was allocated to measures that support NOI growth, such as tenant adoptions and fiber installations. As mentioned earlier, the largest share of our investment volume is allocated to new developments, which I will cover on the next slide. During the year, we started the construction of 218 apartments and completed 403 apartments. In the quarter, we started the construction of 131 rental apartments in an attractive central location in Västerås, the so-called infill project in an area dominated of co-ops and homeownership. We did not complete any apartments in the quarter. At present, we have 787 apartments under construction. Upon completion, these projects are expected to contribute approximately SEK 103 million in NOI. Demand for our newly developed apartments remains strong, and we have now, in the first quarter of 2026, entered an intensive letting phase in project Solhusen and Enhörningen, both located in Stockholm. Projects that are expected to be fully completed during the summer this year. Our ambition is to initiate between 600-800 apartments per year. Obviously, volume in itself is not the objective. Our focus is on starting projects that meet our return requirements. Given the depth and quality of our development pipeline, we are confident in our ability to combine attractive profitability with our targeted production levels. The portfolio has an average project margin of around 20%, which means that developments clearly strengthen overall return on equity. Our ongoing construction portfolio has a yield on cost of 4.7%, or 5.1% when excluding the project in Eskilstuna. New projects starts are expected to generate higher returns. For example, the project in Västerås that was initiated during the quarter is expected to deliver a yield on cost of 5.3%. Since the AGM last year, the board has a mandate to repurchase up to 10% of the outstanding shares. Given the current NAV discount, share buybacks, potentially funded through selective asset disposal, are capital allocation alternatives that we are evaluating.... We are currently seeing a strong demand in the transaction market for newly built residential assets in the Stockholm region. Selective divestments within this specific segment could allow us to realize the value created in our development business and reallocate that capital to further strengthen shareholder value. Importantly, any such measures would complement, not replace, our ongoing investment program. We continue to see attractive returns in both new development and value-enhancing investments in the standing portfolio. Our objective remains clear: to maximize long-term shareholder value through disciplined capital allocation, while maintaining a strong financial position and low financial risk. Let's now move over to our assets on slide 11. We divide our asset portfolio into three categories: properties under management, properties under construction, and properties under development and building rights. The portfolio, totaling SEK 29 billion, provides a strong combination of stable and resilient cash flow and growth potential in the Stockholm region. I will begin by focusing on the core of the portfolio, our income-generating properties. Our portfolio consists solely of residential properties, with a total value of SEK 25.7 billion. A significant share of the portfolio, 95%, is located in Sweden's three metropolitan regions and in university cities, with Stockholm County accounting for 23%. In addition, 73% of the portfolio is concentrated across our 10 largest cities, a clustering that support cost-efficient property management. During the quarter, we signed an exchange transaction with KlaraBo, through which we increased our presence in 6 municipalities while exiting five. The transaction was completed earlier this month, and on a net basis, we are a small seller and received a purchase price of SEK 90 million. As a result of the transaction, our portfolio increases by 81 apartments, while our earnings capacity is expected to initially decrease by approximately SEK 2 million. The transaction is fully aligned with our strategy to optimize the portfolio through increased clustering, thereby further strengthening operational efficiency. Let's now turn to the development part of our asset portfolio, properties under construction and project development on slide 13. Ongoing construction covers a book value at SEK 1.3 billion and comprises, as previously outlined, 787 apartments that will add an estimated value at completion at SEK 2.3 billion. We aim to start construction of about 600 apartments in the upcoming 12 months, projects that will derive from our Stockholm-focused development portfolio. Properties under development carry a value of SEK 2 billion, and these projects have an estimated yield on cost of around 5.3%. To be a successful developer, you essentially need two things: the know-how and access to building rights in the right locations and at the right price. Sveafastigheter is well positioned in that respect, with an experienced in-house project management organization and a sizable development portfolio, of which 87% is located in Stockholm County. Our target is to acquire or obtain building rights for approximately 800 apartments annually. During the quarter, we received a land allocation in central Tullinge, and after the quarter, we obtained building rights in two locations in Nacka, as well as a land allocation in a very strong micro location in Västerås. After this overview of our assets, let's move over to our earnings capacity. Rental income in our standing assets increased by SEK 38 million compared to previous quarter, primarily attributable to the annual rent increase. By year-end, approximately two-thirds of the rent negotiations had been concluded, with an average increase of 3.4%, and that is what is included in the earnings capacity. Based on the negotiations completed so far, we expect the outcome for the full portfolio to be broadly in line with that level. Property expenses increased by SEK 23 million, mainly reflecting adjustments to a higher cost level in 2026, including higher tariffs for heating and water. The KlaraBo transaction is not reflected in the earnings capacity since it was, as mentioned, finalized earlier this month. The line item, other income, relates to the external property management assignment, where Sveafastigheter manages a portfolio of almost 4,000 apartments. The estimated costs for this assignment amounts to SEK 45 million and are accounted as central administration. The parties have agreed to extend this assignment by one year, and it now runs until the end of 2027. Let's move over to Sveafastigheter's financial position. Compared to previous quarter, LTV remains at 42%, and ICR remains at 2x. Average interest rate has slightly decreased to 3.28%. After the quarter, Sveafastigheter established an EMTN program, and on the back of that, issued bonds totaling EUR 300 million, with a fixed coupon at 4.375%, maturing in 2031. Subsequently, we called outstanding euro bonds totaling EUR 111 million, with a fixed coupon at 4.75%, maturing in 2027. With that, let's move over to our main priorities looking ahead. First, we will continue to improve operational profitability. Strengthening the NOI margin remains central through higher occupancy, disciplined cost control, and value-enhancing investments in the existing portfolio. Second, we will further strengthen our capital structure. We remain focused on maintaining low financial risk, optimizing our debt maturity profile, and over time, improving our credit profile toward BBB flat. Third, we will maintain disciplined and value-focused capital allocation. Over the past 18 months, we have deliberately strengthened our financial platform, listing on the growth market, securing an investment-grade rating, establishing our EMTN program, and issuing SEK bonds, moving to the main market, and now in January, launching our EMTN program and issuing Euro bonds, further diversifying our funding base. With that foundation now in place, we are in a position to evaluate capital allocation activities from a stronger position. We will continue to prioritize investments that deliver attractive returns, while continuously evaluating alternatives, including selective divestments and potential share buybacks, to ensure capital is deployed where it creates the strongest shareholder value. Taken together, these priorities support our main objective, to deliver long-term shareholder value while maintaining financial resilience. That concludes our prepared remarks. Operator, please open the line for 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 Keivan Shirvanpour from SEB. Please go ahead. Good morning. I just have a couple of questions, and the first question is related to the KlaraBo transaction. And the first part of the question is, you say that it's not reflected in the earnings capacity, but it will deduct by about SEK 2 million in the earnings capacity. Could you maybe specify on which role in the earnings capacity that it will impact? Well, it's on NOI. It will deduct approximately SEK 2 million. If you want to specify between rental income and our public cost, you can use our average NOI margin, I would say, to get it roughly right. Okay. Maybe in the longer term, what type of potential do you see within this portfolio? Do you see the potential to maybe increase the margin there? Or what type of potential could you see in this portfolio? Well, the portfolio we acquired is broadly in line with our average portfolio, so we see the same portfolio so as we see for the rest of our standing assets. So we intend to further improve the NOI margin for the portfolio as a whole, and as well as this acquired portfolio. Okay. And then my second question is related to capitalized interest. Could you maybe specify how much it was in the quarter and the full year, and maybe something about the future? Well, starting with the outcome for 2025, it was around SEK 7 million in the fourth quarter and SEK 42 million for the full year. Well, it's hard to... I don't think we will guide on how much interest we will capitalize, but it's fair to assess that we will invest broadly in line with our investment volume in 2025. And obviously, of course, we capitalize interest related to our investments. Okay, and then my final question is regarding this Eskilstuna project, where you reported this increase in cost. Do you expect further costs in upcoming quarter, or was this more of a one-time thing in this quarter? No, that was a one-time thing, I would say. So, now that we have decided to follow through with the project with a new contractor, we have also in dialogue with the new contractor established what kind of total costs are expected to finalize the project. So now we expect it to be in line what at the cost level that we have communicated. Okay. Thank you. Those were my questions. Thank you so much. As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. There are no more phone questions at this time, so I hand the conference back to the speakers for any written questions and closing comments. We have received one written question, and the question is as follows: Is it possible to elaborate more regarding the size of the potential share buyback initiative? No, I think that is in a too early stage to have a view on size, but since the last AGM, the board is authorized to repurchase share up to 10% of the outstanding volume. By that, I don't think we have any more questions, so thank you all for listening in. We are, of course, available throughout the day if you have any follow-up questions. Take care and have a pleasant day.