buildingtrends Sweden - February 2004

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AAAAA positive de positive de positive de positive de positive development fvelopment fvelopment fvelopment fvelopment for new residentials in 2003!or new residentials in 2003!or new residentials in 2003!or new residentials in 2003!or new residentials in 2003!

Due to a strong development for new residentialbuildings in the fourth quarter of last year, the totalinvestments managed to stay just above theinvestment output in 2002. The annual trend forDecember amounts to 127,8 Bill. SEK. As previouslyassumed in 2003, new non-residential buildings end upat a slightly lower output compared to 2002, while theR&M sector experience a vague, yet positive,development. By annual trend, we mean theaccumulated development for the last 12 monthscompared to the same period a year earlier.

The Residential SectorDuring the fourth quarter of 2003 just over 6,000 dwellings were started. This was an increase of 26%compared to the same quarter in 2002. This means that approx. 23,000 dwellings were started in 2003 asa whole, which is 19% more than in 2002. Building permits for residential buildings have also had an increaseduring the later part of 2002. It is mainly flats that are increasing. One important reason for this is the“stimuli-package” for cheaper flats which was introduced in August. So far, 80 applications with a total of3,068 flats have been approved within this framework. During December, 1,422 dwellings were started inSweden, and that is actually a decrease of 8% compared to December 2002. On an annual basis, only a fewregions are showing negative starting trends for dwelling. Among these are however the Stockholm Region(-9%). For the R&M sector for residential buildings, 2003 seems to become a rather stable year comparedto 2002. This after several years of strong growth within the DIY-market.

The Non-Residential SectorThe negative trend which we have experienced for new non-residential buildings remains. In December,building permits decreased by as much as 30% compared to the same month a year earlier. The decreaseamounts to almost 65,000 sqm! Also for the annual trend we see a continued negative development. It isnow down by 16% compared to 2002. However, if we look at the decrease in building starts for non-residential buildings, it is not as bad. By December, the activity on an annual basis is down by 2%. The largercity areas, where a large part of the investments in new non-residential take place, continue to performpoor. The building permits in the Stockholm area has halved during the last year! Thus - Sweden remains atthe bottom of Europe regarding the new non-residential sector. Also, there are almost no signs that givehope for an increase in 2004. Within the R&M sector, there is a great accumulated need of maintenance,especially within the public sector, but poor finances hinders these investments to take place. There arehowever some signs of a somewhat improved activity by the end of 2003, which should remain in 2004. Thisis mainly concerning adaptations/re-modelling for new tenants.

>10% 10%-3% 2% - -2% -3% - -10% < -10%

The arrows are indicators for thisyear compared to last year:

The Total Construction Market12 months accumulated (bill. 02-SEK)

110

115

120

125

130

135

Jan Feb Mar Apr May Jun Jul Aug Sep Okt Nov Dec

20022003

New ResidentialFeb. 20, 2004: The growth in new residentials during the forth quarter 2003 was unexpected. The annual trend now shows an increase of 19%! The increase is primarily to be spotted in October.

New Non-residentialFeb. 20, 2004: Building starts in the non-residential sector decreased by 2% in 2003 compared to 2002. We also see a continued negative trend for the issuing of new building permits: minus 16% for 2003.

R&M ResidentialFeb. 20, 2004: 2003 shows an increase of 3% compared to 2002. Many signs indicate that 2004 will continue in this stable growth.

R&M Non-residentialFeb. 20, 2004: A relative unchanged market development in 2003 compared to 2002. Given an improved macro economic scenery in 2004, we can expect a slight growth in these investments.