Interim Report January – June 2021
Kungsleden´s rental revenue continues to increase
Interim Report January-June
Significant events during and after second quarter
CEO’s statement Biljana Pehrsson
The second quarter was a strong period for Kungsleden, and in the first half-year, we improved our profit from property management by 6 per cent to SEK 650 million. The rental market has gathered pace, the transaction market is setting records, Sweden’s growth is forecast at its highest level for several years, and we’re clearly seeing people getting back to life before the pandemic.
In June, we welcomed our colleagues to our new, inspirational head office in The Rotterdam District in Värtahamnen, Stockholm, an innovative office space that conforms to our Symbiotic concept, serving as a dynamic place focused on modern working methods that centre on people. The Rotterdam District consists of some 21,300 sq.m. of leasable office areas and restaurants, and is part of our Stockholm City East cluster, where we have about 85,000 sq.m. of leasable area. Kungsleden is developing Värtahamnen in partnership with other property owners, to help create a unique environment close to areas of natural beauty, the waterfront and Stockholm city centre.
Several new major lease contracts and rising average rents
Finnslätten in Västerås is another of Kungsleden’s strategic and expansive clusters. In June, we signed a contract with AA Logistik, with Kungsleden building a new logistics facility comprising 32,000 sq.m. of warehousing in offices, with the customer relocating there in 2024, much to the approval of the world-leading enterprises located in the area.
In the first half year, we signed 154 lease contracts, and are maintaining positive net leasing of SEK 11 million. We also continued to successfully renegotiate existing lease contracts worth SEK 147 million, achieving an averaged rent increase of 8 per cent. The average rent on our property portfolio increased by 4 per cent to SEK 1,537 per sq.m. as of 30 June.
Value-creating divestments and projects
We are continuing to realise the excellent potential of the building rights in our portfolio, divesting 32,000 sq.m. of residential building rights in Järfälla in the quarter, at a price of SEK 8,000 per sq.m. GTA.
We also divested part of the property Västerås Effekten for housing, and signed a contract to divest an undeveloped part of the property Norrköping Oxelbergen 1:2 as housing. The zoning plan on 20,000 sq.m. of residential building rights in part of the property Stiernhielm 7 in Gothenburg also came into effect, which we will vacate after the summer. These four divestments will generate positive profit of over SEK 200 million.
With profitable investments in projects and tenant adaptations, positive changes in value increased the value of our property portfolio by over SEK 1.8 billion to SEK 42.5 billion.
High growth generates good demand
Sweden’s economic growth is continuing to accelerate. Sweden’s National Institute of Economic Research (KI) is currently forecasting growth of 4.4 per cent, and the Swedish Government, 4.7 per cent GDP growth this year. Our pipeline of new leasings and future projects is strong. We offer an attractive property portfolio in the right locations in growth markets, creditworthy customers, committed people and a dedicated focus on sustainability. We’re looking forward to the second half-year with confidence, and will be welcoming everyone back to their workplaces after the summer!
Presentation of Interim Report
As of 8:00 a.m. (CEST) the slides from the presentation will be available from here.
Watch the live webcast of the presentation of our report at 8:45 a.m. (CEST) via this link. The presentation will be in English. After our presentation, a recording of the webcast will be available at our website.
The sound and image in a webcast may have a delay of a few seconds. We therefore recommend that participants first watch and listen to the presentation via the webcast. When it is time for questions, we recommend that participants who wish to ask questions live do so via the teleconference channel.
Telephone numbers for the teleconference:
Sweden: +46 8 566 426 92
United Kingdom: +44 333 300 9031
United States: +1 646 722 4902
For more information, please contact:
Biljana Pehrsson, CEO Kungsleden, +46(08) 503 052 04, biljana.pehrsson@kungsleden.se
Ylva Sarby Westman, Deputy CEO and CFO, Kungsleden, +46(08) 503 052 27, ylva.sarby.westman@kungsleden.se
This information is information that Kungsleden AB is obliged to make public pursuant to the Securities Markets Act. The information was submitted for publication at 06.55 CET on July 7 2021.
ABOUT KUNGSLEDEN. We are people that create places and experiences for people. By developing and managing attractive and sustainable places, we offer people a better and more inspiring work experience. We are a long-term property owner focused on commercial properties in Sweden’s growth regions. As of 30 June 2021, we owned 207 properties with a total value of SEK 42,539 million. Kungsleden (KLED) is listed on the Nasdaq Stockholm Large Cap. Read more at www.kungsleden.se