vasakronan ab · a3 bbb bbb baa2 aa bbb- baa2 baa2 a-/a3 a-bbb-issues the world’s first corporate...

44
Investor Presentation – 31 December 2019 VASAKRONAN AB

Upload: others

Post on 11-Jul-2020

2 views

Category:

Documents


0 download

TRANSCRIPT

Page 1: VASAKRONAN AB · A3 BBB BBB Baa2 AA BBB- Baa2 Baa2 A-/A3 A-BBB-Issues the world’s first Corporate green bond 7 TIMELINE & KEY EVENTS Consistent growth over a period of two decades

Investor Presentation – 31 December 2019

VASAKRONAN AB

Page 2: VASAKRONAN AB · A3 BBB BBB Baa2 AA BBB- Baa2 Baa2 A-/A3 A-BBB-Issues the world’s first Corporate green bond 7 TIMELINE & KEY EVENTS Consistent growth over a period of two decades

2

DISCLAIMER

IMPORTANT: YOU MUST READ THE FOLLOWING BEFORE CONTINUING.

The following applies to the presentation materials contained in this document, and you are therefore advised to read this carefully before reading, accessing or making any other use of the presentation materials. Inaccessing the presentation, you agree to be bound by the following terms and conditions, including any modifications to them any time you receive any information from us as a result of such access. This presentation is anadvertisement for the purposes of Directive 2003/71/EC (as amended) and not a prospectus, listing particulars or offering memorandum.

These materials have been prepared by and are the sole responsibility of Vasakronan AB (publ) (the “Company”) and have not been verified, approved or endorsed by any lead manager, bookrunner or underwriterretained by the Company.

These materials are provided for information purposes only and do not constitute, or form part of, and should not be construed as, any offer or invitation to underwrite, subscribe for or otherwise acquire or dispose of, orany solicitation of any offer to underwrite, subscribe for or otherwise acquire or dispose of, any debt or other securities of the Company (“securities”) and are not intended to provide the basis for any credit or any otherthird party evaluation of securities. If any such offer or invitation is made, it will be done so pursuant to separate and distinct documentation in the form of a prospectus, offering circular or other equivalent document (a"prospectus") and any decision to purchase or subscribe for any securities pursuant to such offer or invitation should be made solely on the basis of such prospectus and not these materials. No person is authorised to giveany information or to make any representation not contained in and not consistent with this presentation and, if given or made, such information or representation must not be relied upon as having been authorised by oron behalf of the Company.

These materials should not be considered as a recommendation that any investor should subscribe for or purchase any securities. Any person who subsequently acquires securities must rely solely on the finalprospectus published by the Company in connection with such securities, on the basis of which alone purchases of or subscription for such securities should be made. In particular, investors should pay special attention toany sections of the final prospectus describing any risk factors. The merits or suitability of any securities or any transaction described in these materials to a particular person’s situation should be independentlydetermined by such person. These materials offer no investment, financial, legal, tax or any other type of advice to, and the Company has no fiduciary duties towards, any recipients and therefore any such determinationshould involve, inter alia, an assessment of the legal, tax, accounting, regulatory, financial, credit and other related aspects of the securities or such transaction.

These materials may contain certain statements that constitute projections and forward looking statements. Such forward-looking statements may include, without limitation, statements relating to the Company’sbusiness strategies, trends in its business, competition and competitive advantage, regulatory changes, and restructuring plans. Words such as believes, expects, projects, anticipates, seeks, estimates, intends, plans orsimilar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Any such forward-looking statements involve known and unknown risks,uncertainties and other factors, both general and specific, which may cause the Company’s actual results, performance or achievements to be materially different from any future results, performance or achievementsexpressed or implied by such forward-looking statements. Any such forward-looking statements will be based on numerous assumptions regarding the Company’s present and future business strategies and theenvironment in which the Company will operate in the future. Investors may get back less than they invested. The Company gives no assurance that any favourable scenarios described are likely to happen, that it ispossible to trade on the terms described herein or that any potential returns illustrated can be achieved. Further, any forward-looking statements will be based upon assumptions of future events which may not prove tobe accurate. A number of important factors could cause actual results, performance or achievements to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements. Any such forward-looking statements in these materials will speak only as at the date of these materials. The Company does not intend to update these forward-looking statements except as may berequired by applicable securities laws and assumes no obligation to update or provide any additional information in relation to such forward-looking statements.

The Company makes no representation nor gives any warranty as to the results to be obtained from any investment, strategy or transaction, nor as to whether any strategy, security or transaction discussed herein maybe suitable for recipients’ financial needs, circumstances or requirements. Recipients must make their own assessment of such strategies, securities and/or potential transactions detailed herein, using such professionaladvisers as they may require. No liability is accepted for any direct or consequential losses arising from any action taken in connection with or reliance on the information contained in these materials even where advisedof the possibility of such losses.

These materials are confidential, are being made available to selected recipients only and are solely for the information of such recipients. These materials must not be reproduced (in whole or in part), redistributed orpassed on to any other person or published, in whole or in part, for any purpose without the prior written consent of the Company. The information contained in this presentation has not been subject to any independentaudit or review.

These materials are not intended for distribution to, or use by any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation. In particular, these materials (a)are not intended for distribution and may not be distributed in the United States or to U.S. persons (as defined in Regulation S) under the United States Securities Act of 1933, as amended and (b) are for distribution in theUnited Kingdom only to (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (ii) persons falling within Article 49(2)(a)to (d) (“high net worth companies, unincorporated associations etc.”) of the Order (“Relevant Persons”). The presentation is directed only at relevant persons and must not be acted on or relied on by persons who are notRelevant Persons. Any investment or investment activity to which this presentation relates is available only to Relevant Persons and will be engaged in only with Relevant Persons. This presentation may only becommunicated to persons in the UK in circumstances where section 21(1) of the Financial Services and Markets Act 2000 does not apply to the Company. These materials are not intended for Retail Clients as defined inDirective 2014/65/EU on markets in financial instruments (MiFID II) and should not be passed on to any such persons.

Page 3: VASAKRONAN AB · A3 BBB BBB Baa2 AA BBB- Baa2 Baa2 A-/A3 A-BBB-Issues the world’s first Corporate green bond 7 TIMELINE & KEY EVENTS Consistent growth over a period of two decades

3

1. Vasakronan Overview 4

2. Business Description 10

3. Swedish Real Estate Market Overview 19

4. Financials 25

5. Funding 31

6. Appendix 38

AGENDA

Page 4: VASAKRONAN AB · A3 BBB BBB Baa2 AA BBB- Baa2 Baa2 A-/A3 A-BBB-Issues the world’s first Corporate green bond 7 TIMELINE & KEY EVENTS Consistent growth over a period of two decades

1. VASAKRONAN

OVERVIEW

Byt ut bild

Page 5: VASAKRONAN AB · A3 BBB BBB Baa2 AA BBB- Baa2 Baa2 A-/A3 A-BBB-Issues the world’s first Corporate green bond 7 TIMELINE & KEY EVENTS Consistent growth over a period of two decades

5

VASAKRONAN IN BRIEFVasakronan owns, develops and manages office properties in Sweden

As of 31 December 2019. FX-rate EURSEK 10,50

Contracted Rent by Geographic Market

Contracted Rent by Property Type

Stockholm

Gothenburg

Malmö

Uppsala• Market value EUR 14.9 bn

• Total area (thousand) 2,300 sqm

• Contracted rent EUR 685 m

• Number of properties 174

• Number of employees 304

• Largest Nordic real estate company

• Modern and high quality portfolio in prime locations

• Strong and committed long-term owners

63%

19%

10%

8%

Stockholm

Gothenburg

Malmö

Uppsala

74%

18%

8%

Offices

Retail

Other - hotel, residential andparking

Page 6: VASAKRONAN AB · A3 BBB BBB Baa2 AA BBB- Baa2 Baa2 A-/A3 A-BBB-Issues the world’s first Corporate green bond 7 TIMELINE & KEY EVENTS Consistent growth over a period of two decades

23.7

20.1

14.913.7

12.010.8

9.1 8.77.6 7.1 6.3

0

2

4

6

8

10

12

14

16

18

20

22

24

6

LARGEST REAL ESTATE COMPANY IN THE NORDICSInvestment property value, EUR bn

Source: Q4 report of each of the companies above for the year 2019.

As of 31 December 2019. FX-rate EURSEK 10,50

A3

BBB

BBB

Baa2 AABBB- Baa2

Baa2

A-/A3

A-

BBB-

Page 7: VASAKRONAN AB · A3 BBB BBB Baa2 AA BBB- Baa2 Baa2 A-/A3 A-BBB-Issues the world’s first Corporate green bond 7 TIMELINE & KEY EVENTS Consistent growth over a period of two decades

Issues the world’s firstCorporate green bond

7

TIMELINE & KEY EVENTSConsistent growth over a period of two decades. Focus on markets with high growth and liquidity

1.9

7.1 6.8 7.3 7.8 8.0 8.3 8.79.8

11.012.0

13.214.9

0

2

4

6

8

10

12

14

16

1998 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Ma

rke

t v

alu

e E

UR

bn

CAGR 2008-2019: 9.3 %

AP Fastigheter established

by the AP-funds

AP Fastigheter acquires Vasakronan EUR 4 bn

Carbon neutral operations

Certified according to ISO 14001

Divestment of a portfolio of residential properties for

EUR 0,7 bn

Signs Sweden´s first Green lease agreement

Rating assigned by Moody’s –A3

Issues the world’s first green CP

Continously improved quality in the portfolio through transactions and project development amounting to EUR 0.2-0.4 bn per annum

As of 31 December 2019. FX-rate EURSEK 10,50

Page 8: VASAKRONAN AB · A3 BBB BBB Baa2 AA BBB- Baa2 Baa2 A-/A3 A-BBB-Issues the world’s first Corporate green bond 7 TIMELINE & KEY EVENTS Consistent growth over a period of two decades

8

THE AP-FUNDS’ ROLE IN THE SWEDISH PENSION SYSTEMVasakronan is the Swedish National Pension Funds´ main exposure to the Nordic office market

PARLIAMENT

MINISTRY OF FINANCE

VASAKRONAN HOLDING

VASAKRONAN

SWEDISH NATIONAL PENSION FUND LAW

EXTERNAL AUDITORS

25 % 25 % 25 % 25 %

COMMENTS

• AP-funds are closed-end buffer-funds and part of the Swedish national income pension system• All AP-funds are independent of the government. The funds´ operations are regulated by the Swedish National Pension Funds Act• The AP-funds support Vasakronan with a credit commitment of EUR 1.7 bn and CoC-clause in all funding

The First Swedish National Pension Fund

The Second Swedish National Pension Fund

The Third Swedish National Pension Fund

The Fourth Swedish National Pension Fund

Page 9: VASAKRONAN AB · A3 BBB BBB Baa2 AA BBB- Baa2 Baa2 A-/A3 A-BBB-Issues the world’s first Corporate green bond 7 TIMELINE & KEY EVENTS Consistent growth over a period of two decades

9

ASSIGNED A3 (STABLE) RATING BY MOODY’S

“Largest real estate company by asset value in the Nordics with a dominant position in Sweden’s most attractive office markets”

“100% ownership by AP funds, and ultimately the government, and our expectation of

extraordinary support"

Largest real estate

company in Sweden with

dominant position in

prime office locations

Long-term Government

related owners (AP 1-4)

25% of rental revenues

stem from creditworthy

government and public

sector tenants

Substantial amount of

liquidity supported by a

credit facility from the

owners amounting to

EUR 1.7 bn

High share of

environmentally certified

properties with high

ratings

LTV policy below 55 %

The project portfolio by

nature includes a

speculative element but

represents a relatively

small part of total asset

with Stable outlook

byA3A3

1 2 3 4

5 76

Page 10: VASAKRONAN AB · A3 BBB BBB Baa2 AA BBB- Baa2 Baa2 A-/A3 A-BBB-Issues the world’s first Corporate green bond 7 TIMELINE & KEY EVENTS Consistent growth over a period of two decades

2. BUSINESS

DESCRIPTION

Page 11: VASAKRONAN AB · A3 BBB BBB Baa2 AA BBB- Baa2 Baa2 A-/A3 A-BBB-Issues the world’s first Corporate green bond 7 TIMELINE & KEY EVENTS Consistent growth over a period of two decades

11

THE STRATEGYSustainability is a natural, integral part of Vasakronan’s organization and business. This applies to the board, management and our everyday activities

PRIME LOCATION

GROWTH

MARKETSOFFICES AND CITY RETAIL

Focus on locations in Sweden with strong economic growth

and high liquidity

TRANSACTIONS AND PROJECT DEVELOPMENT

ACTIVE ASSET MANAGEMENT

The premises are modern, efficient and centrally located in areas

with good communication. Retail is concentrated to city centers

The property stock consists of premises that remain attractive even in times of

less demand

The property stock is continuously developed in order to meet the demand

and improve quality

We have a clear and well balanced strategy for transactions and project

development

Page 12: VASAKRONAN AB · A3 BBB BBB Baa2 AA BBB- Baa2 Baa2 A-/A3 A-BBB-Issues the world’s first Corporate green bond 7 TIMELINE & KEY EVENTS Consistent growth over a period of two decades

12

A SUSTAINABLE BUSINESS MODEL

CO2 EMISSIONS

As of 31 December 2019.

COMMENTS

• The energy consumption has been more than halved since 2009

• Renewable or climate-neutral energy have reduced carbon dioxide emissions in Scope 1, Scope 2 and emissions from air travel withapproximately 99 percent between 2006-2019

• As at 31 December, 2019, 85 percent of the portfolio have environmental certification. The certification system mostly used is LEED and 72 percent of the portfolio are certified according to LEED on a Gold or Platinum level

• The target is to have a 100 percent green asset portfolio

• In November 2013, Vasakronan was proud to be the first company in the world to issue green bonds

GRESB, Global Real Estate Sustainability Benchmark 2019

0

5000

10000

15000

20000

25000

30000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

-99%

MAGASIN X, SWEDEN´S LARGEST WOODEN OFFICE BUILDING

Page 13: VASAKRONAN AB · A3 BBB BBB Baa2 AA BBB- Baa2 Baa2 A-/A3 A-BBB-Issues the world’s first Corporate green bond 7 TIMELINE & KEY EVENTS Consistent growth over a period of two decades

13

Birger Jarlsgatan, Stockholm CBD Läppstiftet, Gothenburg CBD

Aura, Malmo Kista Science Tower, Stockholm Kista Science City

MODERN AND HIGH QUALITY PORTFOLIO IN PRIME LOCATIONS

Page 14: VASAKRONAN AB · A3 BBB BBB Baa2 AA BBB- Baa2 Baa2 A-/A3 A-BBB-Issues the world’s first Corporate green bond 7 TIMELINE & KEY EVENTS Consistent growth over a period of two decades

14

DIVERSIFIED PUBLIC AND MULTI TENANT BASE

4 153 commercial contracts (residential and garage not included)

CONTRACTED RENT BY SECTOR,% OF PROPERTY PORTFOLIO

TENANT TYPE SHARE IN %

Swedish Police Authority Public 3%

Ericsson Private 3%

H&M (Offices and stores) Private 3%

Swedish Prison and Probation Service Public 2%

Swedish Social Insurance Agency Public 2%

Swedish National Courts Administration Public 1%

Åhléns Private 1%

Handelsbanken Private 1%

KPMG Private 1%

The Riksdag Administration Public 1%

TOTAL 18%

24%

22%

18%

9%

6%

3%

3%

15%

Public sector Services ConsumerGoods

IT

Finance Telecom Industry Other

VASAKRONAN´S TEN LARGEST TENANTS

Page 15: VASAKRONAN AB · A3 BBB BBB Baa2 AA BBB- Baa2 Baa2 A-/A3 A-BBB-Issues the world’s first Corporate green bond 7 TIMELINE & KEY EVENTS Consistent growth over a period of two decades

15

CONTRACTED RENT BY PROPERTY TYPEVasakronan’s revenues are anchored in the office sector with diversification into other segments such as retail

Central Stockholm

inc CBD - Central Business

District

Stockholm

inner suburbs Central Uppsala

UPPSALASTOCKHOLM

Offices

Retail

Other 1)

Offices

Retail

Other 1)

Contracted Rent by Property Type

% of Properties

Contracted Rent by Property Type

% of Properties

1) The category “other” includes residential space, parking and hotels.

As of 31 December 2019.

81%

12%

7%

68%

19%

13%

Page 16: VASAKRONAN AB · A3 BBB BBB Baa2 AA BBB- Baa2 Baa2 A-/A3 A-BBB-Issues the world’s first Corporate green bond 7 TIMELINE & KEY EVENTS Consistent growth over a period of two decades

16

CONTRACTED RENT BY PROPERTY TYPE (CONT’D)…with Stockholm as core city and Uppsala, Gothenburg and Malmo as key hubs

GOTHENBURGMALMO

Offices

Retail

Other 1)

Offices

Retail

Other 1)

Contracted Rent by Property Type

% of Properties

Contracted Rent by Property Type

% of Properties

1) The category “other” includes residential space, parking and hotels.

As of 31 December 2019.

60%

28%

12%

61%

34%

5%

Page 17: VASAKRONAN AB · A3 BBB BBB Baa2 AA BBB- Baa2 Baa2 A-/A3 A-BBB-Issues the world’s first Corporate green bond 7 TIMELINE & KEY EVENTS Consistent growth over a period of two decades

17

MARKET SHARE BY REGIONVasakronan, the largest property owner in its key operating cities and can thus offer customers greater flexibility

GOTHENBURG CBD

CENTRAL UPPSALACENTRAL STOCKHOLM INCLUDING CBD

MALMO CBD AND VÄSTRA HAMNEN

Source: CBRE and Datscha, as of 31 December 2019.

12%

7%

5% 5% 5%

0

5

10

15

20

25

Vasakronan AMF Fabege Hufvudstaden AFA

22%

10% 9%

6% 4%

0

5

10

15

20

25

Vasakronan SkandiaFastigheter

UppsalaAkademi

UppsalaKommun

Castellum

20%

15%

6%

4% 4%

0

5

10

15

20

25

Vasakronan Wihlborgs Balder Volito Midroc

22%

14%

9% 8%

6%

0

5

10

15

20

25

Vasakronan Wallenstam Hufvudstaden Balder SEB

Page 18: VASAKRONAN AB · A3 BBB BBB Baa2 AA BBB- Baa2 Baa2 A-/A3 A-BBB-Issues the world’s first Corporate green bond 7 TIMELINE & KEY EVENTS Consistent growth over a period of two decades

18

Platinan, Gothenburg, EUR 248 m

Kronan, Sundbyberg, Stockholm, EUR 160 m Sergelhuset, Stockholm, EUR 352 m

COMMENTS

• Project development delivers higher return than acquiring properties

• Vasakronan´s project portfolio has delivered an average Internal Rate of Return of 11.5 percent

• Most of the projects are only started if long lease agreements are in place

• Ongoing property developments projects have a total investment volume of EUR 1 366 m, of which EUR 643 m had been capitalized as of 31 December 2019

• The project portfolio represents only 8.4 per cent of total assets

• As of 31 December 2019 the average occupancy rate in major property projects was 69 percent and the percentage of completion was 50 percent

HIGH QUALITY PROJECT PORTFOLIOMost of the project aren’t started until lease agreements are in place

As of 31 December 2019. FX-rate EURSEK 10,50

Page 19: VASAKRONAN AB · A3 BBB BBB Baa2 AA BBB- Baa2 Baa2 A-/A3 A-BBB-Issues the world’s first Corporate green bond 7 TIMELINE & KEY EVENTS Consistent growth over a period of two decades

3. SWEDISH

REAL ESTATE MARKET OVERVIEW

Page 20: VASAKRONAN AB · A3 BBB BBB Baa2 AA BBB- Baa2 Baa2 A-/A3 A-BBB-Issues the world’s first Corporate green bond 7 TIMELINE & KEY EVENTS Consistent growth over a period of two decades

20

MARKET OVERVIEW

STEADY GROWTH IN THE SWEDISH ECONOMYGDP Growth in Sweden, %.

STRONG SWEDISH PROPERTY MARKETTransaction volume, EUR bn

Source: Country economy, SCB, Evidens, National Institute of Economic Research, HUI Research, Eurostat, Sveriges Riksbank.

OFFICE EMPLOYMENTOffice employment, % change in metropolitan regions.

COMMENTS

• Sweden is one of twelve Aaa-rated countries

• The Swedish economy is growing fast compared to the EU as a whole

• This economic environment has created a favourable investment climate in the Swedish property market and has contributed to a rise in property prices

• The transaction volume in 2019 was EUR 21.8 bn

As of 31 December 2019. FX-rate EURSEK 10,50

0,0

5,0

10,0

15,0

20,0

25,0

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

EU

R

Domestic Investors International Investors

(5.2%)

6.0%

2.7%

(0.3%)

1.2%2.6%

4.5%

2.7% 2.1% 2.3%1.2% 1.1%

(8%)

(6%)

(4%)

(2%)

0%

2%

4%

6%

8%

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020Estimate

0.5%

1.7%

3.7%

3.2%

0.9%

3.3%

2.2%

2.7%

4.8%

3.9%

0.5%

1.9% 2.0%

0%

1%

2%

3%

4%

5%

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020Estimate

2021Estimate

Page 21: VASAKRONAN AB · A3 BBB BBB Baa2 AA BBB- Baa2 Baa2 A-/A3 A-BBB-Issues the world’s first Corporate green bond 7 TIMELINE & KEY EVENTS Consistent growth over a period of two decades

21

POPULATION GROWTHStrong urbanisation trend in Sweden and strong population growth in all of Vasakronan´s cities

MALMOGOTHENBURG

UPPSALASTOCKHOLM

Source: Inhabitants in Swedish municipalities 1950 – 2018, Statistics Sweden, Forecasts: Municipalities’ projections for 2019-2025.

0

100 000

200 000

300 000

400 000

500 000

600 000

700 000

800 000

900 000

1 000 000

1 100 000

1 200 000

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020E

2021E

2022E

2023E

2024E

2025E

inhabitants

0

50 000

100 000

150 000

200 000

250 000

300 000

350 000

400 000

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020E

2021E

2022E

2023E

2024E

2025E

inhabitants

0

100 000

200 000

300 000

400 000

500 000

600 000

700 000

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020E

2021E

2022E

2023E

2024E

2025E

inhabitants

0

50 000

100 000

150 000

200 000

250 000

300 000

350 000

400 000

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020E

2021E

2022E

2023E

2024E

2025E

inhabitants

Page 22: VASAKRONAN AB · A3 BBB BBB Baa2 AA BBB- Baa2 Baa2 A-/A3 A-BBB-Issues the world’s first Corporate green bond 7 TIMELINE & KEY EVENTS Consistent growth over a period of two decades

22

MARKET RENTS AND VACANCIES - OFFICESIncreasing office rents in all markets, vacancies continue to decline

MALMO CBDGOTHENBURG CBD

UPPSALA INNER CITYSTOCKHOLM CBD

Source: Cushman & Wakefield. As of December 2019.

Rent / sqm Vacancies, %

0

5

10

15

0

100

200

300

400

500

600

700

800

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

(%)

EU

R/s

qm

0

5

10

15

0

50

100

150

200

250

300

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

(%)

EU

R/s

qm

0

5

10

15

0

50

100

150

200

250

300

350

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

(%)

EU

R/s

qm

0

5

10

15

0

50

100

150

200

250

300

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

(%)

EU

R/s

qm

As of 31 December 2019. FX-rate EURSEK 10,50

Page 23: VASAKRONAN AB · A3 BBB BBB Baa2 AA BBB- Baa2 Baa2 A-/A3 A-BBB-Issues the world’s first Corporate green bond 7 TIMELINE & KEY EVENTS Consistent growth over a period of two decades

23

RETAIL MARKET OVERVIEWIncrease in Retail Sales 2019 but e-commerce sector accounted for most of the growth

INCREASE IN RETAIL SALESGrowth in Total Retail Sales, %

COMMENTS

• The growth in the retail sector is expected to grow by 3.0 percent in 2019 and 2% in 2020, the steadily growing e-commerce sector accounted for most of the growth

• E-commerce is growing fast and is expected to increase 14 per cent in 2019

• Still a strong demand for retail stores in excellent locations

• E-commerce companies establish physical stores in order to increase sales online, and the other way around

• Although a negative turnover growth in physical stores, the result ofVasakronan’s retail stores renegotiation 2019 showed an increase of 1,9 percent

Source: SCB, HUI Research, E-barometern.

SERGELGATAN STOCKHOLM CBD

3.6% 3.7%

0.7%

2.0% 2.0%

3.4%

5.8%

3.4%

2.1%

2.7%

3.4%

2.0% 2.0%

0%

1%

2%

3%

4%

5%

6%

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020Estimate

2021Estimate

Page 24: VASAKRONAN AB · A3 BBB BBB Baa2 AA BBB- Baa2 Baa2 A-/A3 A-BBB-Issues the world’s first Corporate green bond 7 TIMELINE & KEY EVENTS Consistent growth over a period of two decades

24

MARKET RENTS AND VACANCIES – RETAIL PREMISESRents and vacancies are stable on the retail premises market

MALMO CBDGOTHENBURG CBD

STOCKHOLM CBD

Rent / sqm Vacancies, %

Source: Cushman & Wakefield and Forum Fastighetsekonomi. As of December 2019 (Uppsala Inner City as of March 2019).

UPPSALA INNER CITY

0

2

4

6

8

10

0

200

400

600

800

1 000

1 200

1 400

1 600

1 800

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

(%)

EU

R/s

qm

0

2

4

6

8

10

0

100

200

300

400

500

600

700

800

900

1 000

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

(%)

EU

R/s

qm

0

2

4

6

8

10

0

200

400

600

800

1 000

1 200

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

%

EU

R/s

q.m

0

2

4

6

8

10

0

100

200

300

400

500

600

700

800

900

1 000

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

(%)

EU

R/s

qm

As of 31 December 2019. FX-rate EURSEK 10,50

Page 25: VASAKRONAN AB · A3 BBB BBB Baa2 AA BBB- Baa2 Baa2 A-/A3 A-BBB-Issues the world’s first Corporate green bond 7 TIMELINE & KEY EVENTS Consistent growth over a period of two decades

4. FINANCIALS

Page 26: VASAKRONAN AB · A3 BBB BBB Baa2 AA BBB- Baa2 Baa2 A-/A3 A-BBB-Issues the world’s first Corporate green bond 7 TIMELINE & KEY EVENTS Consistent growth over a period of two decades

0%

5%

10%

15%

20%

VK MSCI VK MSCI VK MSCI VK MSCI VK MSCI VK MSCI VK MSCI VK MSCI VK MSCI VK MSCI VK MSCI

26

TOTAL RETURNBusiness target - a total return of at least 6,5% over a ten year period, and a total return of 0,5% above the industry average

Notes: (1) MSCI-Index excludes Vasakronan.

Source: MSCI Swedish Property Index.

20172011 2012 2013 2014 2015 2016 2018201010 year average

Vasakronan

MSCI Swedish Property Index(1)

9,9%

11,5%

Capital Growth

Income Return

2019

COMMENTS

Vasakronan has delivered a better total return than the Swedish Property Index MSCI nine out of ten years

External valuation is carried out twice a year by independent firms of appraisers pursuant to the RICS Red Book

Page 27: VASAKRONAN AB · A3 BBB BBB Baa2 AA BBB- Baa2 Baa2 A-/A3 A-BBB-Issues the world’s first Corporate green bond 7 TIMELINE & KEY EVENTS Consistent growth over a period of two decades

27

STABLE OCCUPANCY RATEOccupancy rates have been stable over the cycle. 1,6 % of the office vacancy is related to project development

OCCUPANCY RATE

Investment Properties

Projects

VACANCIES

%

5,9%

5,9%

As of 31 December 2019.

91,9 92,8 93,0 93,0 93,4 92,0 92,6 94,2 93,1 93,1 94,1

0

10

20

30

40

50

60

70

80

90

100%

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

4,3%

1,6%

Page 28: VASAKRONAN AB · A3 BBB BBB Baa2 AA BBB- Baa2 Baa2 A-/A3 A-BBB-Issues the world’s first Corporate green bond 7 TIMELINE & KEY EVENTS Consistent growth over a period of two decades

28

LEASE AGREEMENTS AND CONTRACT RENEWALSDuring the last 12 months the rents on renewals have increased by 12,0 %

DURATION IN CONTRACT PORTFOLIOAverage Term 4,0 Years (Share, %)

ANNUAL LEASING VOLUMESEUR m

COMMENTS

An average lease agreement in the Swedish market is between 3 and 7 years

Lease agreements up to 25 years in properties built for special purposes, for example courts and life science

Tenants normaly pays for heating, cooling, waste management and property tax

Lease agreements are adjusted according to inflation with a protection against deflation

Of all the contracts up for renegotiation over the last 12 months, more than 70 percent of the tenants decided to extend their contracts

Due to rising rents the rent on renewals have increased by 12 percent in total during the last 12 months

40 40 43 43

51

38

59

45

58

49

94

0

20

40

60

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 20190%

20%

40%

60%

2020 2021 2022 2023 and after

As of 31 December 2019. FX-rate EURSEK 10,50

Page 29: VASAKRONAN AB · A3 BBB BBB Baa2 AA BBB- Baa2 Baa2 A-/A3 A-BBB-Issues the world’s first Corporate green bond 7 TIMELINE & KEY EVENTS Consistent growth over a period of two decades

29

INCOME STATEMENTEBITDA and EBITDA margin have been improved over time due to growth in revenues and stable expenses

INTEREST EXPENSESEBITDA

RENTAL REVENUE

COMMENTS

Revenues have increased by approximately 31 percent compared to 2009

Property expenses have been stable at a low level during the same period

EBITDA and EBITDA margin have been improved over time

EBITDA Margin

63%66%

68%69% 69%

70%

EUR/sqm

71%70%70%

73%75%

511 525576 568 574 562 572 595 618

640 670

0

100

200

300

400

500

600

0

100

200

300

400

500

600

700

800

900

1000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

EU

R/s

qmE

UR

m324 344

392 399 399 388 399 416436 470

500

0

100

200

300

400

500

600

0

100

200

300

400

500

600

700

800

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

EU

R/s

qmE

UR

m -126 -121

-157 -150 -143-120

-107 -110 -111-99 -108

-250

-200

-150

-100

-50

0

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

EU

R m

As of 31 December 2019. FX-rate EURSEK 10,50

Page 30: VASAKRONAN AB · A3 BBB BBB Baa2 AA BBB- Baa2 Baa2 A-/A3 A-BBB-Issues the world’s first Corporate green bond 7 TIMELINE & KEY EVENTS Consistent growth over a period of two decades

30

CAPITAL STRUCTURE AND INTEREST COVERAGE RATIOLTV has been below 50% since 2011 and ICR has been way above the minimum of 2,0 times

LOAN TO VALUE

%INTEREST COVERAGE RATIO

2,0 Times

ICR & LTV TARGET

• Interest Coverage Ratio has improved substantially and is well above the minimum of 2,0 times

• LTV shall have maximum of 55 percent

• LTV has been below 50 percent since 2011

• LTV is accepted be lower at times of high property values and vice versa

• Limited Secured LTV at 7 percent of Total Assets

DIVIDEND POLICY

• Under normal circumstances dividends shall correspond to 40-60 percent of the Group's profit before value changes and after taxes

• In order to avoid over capitalization, larger dividend can be paid in periods of rising property values

• In times of negative property value development, dividends may need to be lower or none, and if required, capital injection will be requested from the owners

times

52% 52%49% 48%

46% 46%44% 43% 43%

41%38%

0%

10%

20%

30%

40%

50%

60%

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

2,8 2,92,5

2,7 2,83,2

3,7 3,8 3,9

4,7 4,6

0

1

2

3

4

5

6

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

55 %

As of 31 December 2019.

Page 31: VASAKRONAN AB · A3 BBB BBB Baa2 AA BBB- Baa2 Baa2 A-/A3 A-BBB-Issues the world’s first Corporate green bond 7 TIMELINE & KEY EVENTS Consistent growth over a period of two decades

5. FUNDING

Page 32: VASAKRONAN AB · A3 BBB BBB Baa2 AA BBB- Baa2 Baa2 A-/A3 A-BBB-Issues the world’s first Corporate green bond 7 TIMELINE & KEY EVENTS Consistent growth over a period of two decades

32

GOVERNMENT BACKED OWNERSHIP STRUCTUREVasakronan is the Swedish National Pension Funds’ strategic investment in the Swedish office market. Therefore, they are supporting the Company with a RCF and CoC clauses on all debt instruments.

CREDIT FACILITY

Vasakronan has a EUR 1,7 bn revolving credit

facility with the owners.

The agreement has a constant maturity and can

be terminated with a notice period of 24 months

The commitment can be used for general

corporate purposes

Gives extremely strong liquidity position and

lowers risk of short-term funding

CHANGE OF CONTROL

The change of control clause covers all our

capital market and bank funding. It is one

example of our owners’ long-term commitment

which provides security to our investors

Change of Control occurs when the aggregate

holdings of AP Funds ceases to represent at

least 51 per cent. of the total voting rights

represented by the shares and the rating is

lowered by at least one full rating notch

Page 33: VASAKRONAN AB · A3 BBB BBB Baa2 AA BBB- Baa2 Baa2 A-/A3 A-BBB-Issues the world’s first Corporate green bond 7 TIMELINE & KEY EVENTS Consistent growth over a period of two decades

33

DIVERSIFIED FUNDINGWith high proportion of green financing

DEBT PORTFOLIO, EUR BN

LARGE PROPORTION OF DARK GREEN FUNDING

6,4

47%Green

Funding

COMMENTS

• Vasakronan has a diversified funding with a broad investor base

• Limited Secured LTV at 7 percent of Total Assets

• First corporate in the world to issue a Green Bond and a Green Commercial Paper

• Dark green Second Opinion from CICERO and an Impact Report that is validated by the auditors

Commercial Papers0,7

Bonds SEK2,4

Bonds NOK1,0

Bonds EUR0,4

Bonds JPY0,1

Bonds AUD0,1

Bonds USD0,2

Secured bank loans 1,1

Nordic- and European Investment Bank

0,5

As of 31 December 2019. FX-rate EURSEK 10,50

Page 34: VASAKRONAN AB · A3 BBB BBB Baa2 AA BBB- Baa2 Baa2 A-/A3 A-BBB-Issues the world’s first Corporate green bond 7 TIMELINE & KEY EVENTS Consistent growth over a period of two decades

34

VASAKRONAN´S GREEN FINANCE FRAMEWORKVasakronan´s Green Bonds raise funds for projects with environmental benefits

COMMENTS

• Second Opinion from CICERO with Dark Green Shading

• The proceeds from Vasakronan´s green bonds are financingthe following green projects;

o New construction and major renovation – LEED Platina and at least 25 percent below current building regulation (Swedish BBR code)

o Existing buildings – LEED Gold and energy performance

under 100 kWh/sqm

o Solar energy projects

ENERGY CONSUMPTION

-57%

020406080

100120140160180200220

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

201

8

201

9

kW

h/s

qm

Page 35: VASAKRONAN AB · A3 BBB BBB Baa2 AA BBB- Baa2 Baa2 A-/A3 A-BBB-Issues the world’s first Corporate green bond 7 TIMELINE & KEY EVENTS Consistent growth over a period of two decades

35

DEBT OVERVIEWLow risk due to long Average Fixed Interest Term and long Average Loan Maturity

AVERAGE INTEREST RATE,

FIXED INTEREST TERM AND AVERAGE LOAN MATURITY

DEBT MATURITY PROFILE, AVERAGE OF 5,2 YEARS DEBT – COVER RATIO 166%

COMMENTS

• Credit facility from owners and cash covers all debt maturities and cash flows within 18 months

• Long average fixed interest rate maturity of 5,8 years

• Vasakronan has an ambition to diversify the investor base further in new markets

• Short term debt will be replaced by longer dated funding, Average Loan Maturity has increased by 1.3 years since 2018

0

1

2

3

4

5

6

7

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Years

/ %

Fixed interest term Average loan maturity Average interest rate

0

500

1 000

1 500

2 000

2 500

0–1 1–2 2–3 3–4 4–5 >5

EU

R m

Commercial Papers Secured Bank Loans Bonds SEK Bonds other currencies NIB+EIB

0

500

1 000

1 500

2 000

2 500

Available Liquidity Short term debt

EU

R m

As of 31 December 2019. FX-rate EURSEK 10,50

Page 36: VASAKRONAN AB · A3 BBB BBB Baa2 AA BBB- Baa2 Baa2 A-/A3 A-BBB-Issues the world’s first Corporate green bond 7 TIMELINE & KEY EVENTS Consistent growth over a period of two decades

36

KEY CREDIT HIGHLIGHTS

Government

backed ownership

structure

Largest real

estate company

in the Nordics

Modern and high

quality Office-

portfolio in

prime locations

Strong

financial

performance

Diversified public

and multi

tenant base

Sustainable

Business

Model

with Stable outlook

byA3A3

Page 37: VASAKRONAN AB · A3 BBB BBB Baa2 AA BBB- Baa2 Baa2 A-/A3 A-BBB-Issues the world’s first Corporate green bond 7 TIMELINE & KEY EVENTS Consistent growth over a period of two decades

APPENDIX

Page 38: VASAKRONAN AB · A3 BBB BBB Baa2 AA BBB- Baa2 Baa2 A-/A3 A-BBB-Issues the world’s first Corporate green bond 7 TIMELINE & KEY EVENTS Consistent growth over a period of two decades

38

FINANCIAL POLICYVasakronan has a conservative Treasury Policy with limited risk.

POLICY

FINANCIAL

RISKS

FINANCIAL POLICY ACTUAL AS AT 31 DECEMBER 2019

FINANCING RISK

Average Loan Maturity At least 2 years 5.2 years

Loan Maturing 12 Months Max 40% 19%

Credit Facility from Owners and Cash / Loan Maturity 12 Months At least 100% 166%

INTEREST RATE RISK

Interest Coverage Ratio At least 2,0 times (last 12 months) 4.6 times

Fixed Interest Term At least 2 years 5.8 years

Interest Maturity within 12 Months Max 55% 32%

CREDIT RISK

Counterpart´s RatingAt least A-, or BBB+ for derivatives under

CSAsFulfilled

CURRENCY RISK

Currency Exposure without assets in foreign currency Not allowed Fulfilled

Secured Debt/Gross Assets Max 20% 7%

Page 39: VASAKRONAN AB · A3 BBB BBB Baa2 AA BBB- Baa2 Baa2 A-/A3 A-BBB-Issues the world’s first Corporate green bond 7 TIMELINE & KEY EVENTS Consistent growth over a period of two decades

39

INCOME STATEMENT

Income Statement (EURm) 2017 2018 2019

Rental Revenues 618 640 670

Revenue Growth, % 3,8% 3,5% 4,8%

Operating Expenses (63) (68) (65)

Repairs and Maintenance Expenses (10) (10) (11)

Property Administration (32) (34) (36)

Property Tax (52) (50) (62)

Site Leaseholds 1) (16) (14) --

Net Operating Income 446 464 496

Surplus ratio, % 72,1% 72,5% 74,0%

Central Administration (9) (10) (11)

Profit from Joint Ventures and Associated Companies (0) 15 105

Other Operating Income or Expenses -- -- --

Interest income 0 0 0

Interest expenses (111) (100) (108)

Site Leaseholds 1) -- (14)

Profit Before Value Change and Tax 325 370 469

Change in Value of Investment Properties 759 1 014 1 264

Depreciation of land lease agreements -- -- (1)

Change in Value of Financial Instruments 45 1 (84)

Divested or Impaired Goodwill (2) (6) (7)

Profit Before Tax 1 127 1 380 1 641

Current Tax (9) (11) (22)

Deferred Tax (235) (139) (294)

Profit from Assets Held for Sale -- -- --

Profit for the Period 883 1 229 1 325

Other Items -- -- (0)

Profit for the Period 883 1 229 1 325

1) Reclassification in accordance with IFRS 16 Leasing

Page 40: VASAKRONAN AB · A3 BBB BBB Baa2 AA BBB- Baa2 Baa2 A-/A3 A-BBB-Issues the world’s first Corporate green bond 7 TIMELINE & KEY EVENTS Consistent growth over a period of two decades

40

BALANCE SHEET

Balance Sheet (EURm) Dec 31, 2017 Dec 31, 2018 Dec 31, 2019

Intangible Assets 204 199 193

Investment Properties 12 084 13 232 14 864

Equipment 4 4 4

Investment Properties, site leaseholds 1) -- -- 499

Other Financial Receivables 88 97 201

Total Non-Current Assets 12 380 13 532 15 761

Current Receivables 83 86 112

Cash and Cash Equivalents 136 211 335

Total Current Assets 218 297 447

TOTAL ASSETS 12 599 13 829 16 208

Total Equity 4 893 5 740 6 682

Deferred Tax Liabilities 1 602 1 742 2 035

Debt, site leaseholds 1) -- -- 499

Interest-Bearing Debt 5 564 5 818 6 347

Non-Interest Bearing Liabilities 539 529 645

TOTAL EQUITY AND LIABILITES 12 599 13 829 16 208

1) Reclassification in accordance with IFRS 16 Leasing

Page 41: VASAKRONAN AB · A3 BBB BBB Baa2 AA BBB- Baa2 Baa2 A-/A3 A-BBB-Issues the world’s first Corporate green bond 7 TIMELINE & KEY EVENTS Consistent growth over a period of two decades

41

CASH FLOW STATEMENT

Cash Flow Statement (EURm) Dec 31, 2017 Dec 31, 2018 Dec 31, 2019

Net operating income 446 464 496

Central administration (9) (10) (11)

Add back amortisation and depreciation 1 1 1

Adjustment for other non-cash items (1) (1) (1)

Cash flow from operating activities before interest and tax 437 454 485

Interest Paid, Net (113) (102) (113)

Taxes Paid (assumed to equal current tax) (1) (13) (23)

Cash Flow Before Changes in Working Capital 322 340 349

Change in Net Working Capital 8 6 16

Cash Flow From Operating Activities 330 346 365

Intangible assets -- -- --

Investments in Existing Property (242) (318) (423)

Net Acquisitions/Divestments (42) 180 55

Other PPE, Net (0) (2) (0)

Other Financial Assets -- -- (1)

Dividends from joint ventures -- 15 29

Cash Flow from Investing Activities (284) (139) (340)

Dividends and Group Contribution (381) (381) (381)

Loans to Owner -- -- --

Change in Debt, Interest-Bearing Liabilities 334 256 492

Change in collateral (34) 24 20

Redemption of Financial Instruments (34) (46) (32)

Cash Flow from Financing Activities (115) (147) 99

Cash Flow from the Period (69) 75 124

Opening Balance Cash and Cash Equivalents 204 136 211

Closing Balance Cash and Cash Equivalents 136 211 335

Page 42: VASAKRONAN AB · A3 BBB BBB Baa2 AA BBB- Baa2 Baa2 A-/A3 A-BBB-Issues the world’s first Corporate green bond 7 TIMELINE & KEY EVENTS Consistent growth over a period of two decades

42

CASH FLOW FROM THE BUSINESS AFTER NET INVESTMENTSCash Flow from the business exceeds net investments

( 400)

( 300)

( 200)

( 100)

0

100

200

300

400

500

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

EU

R m

Cash flow from the business

Net investments

Free cash flow before financing

Page 43: VASAKRONAN AB · A3 BBB BBB Baa2 AA BBB- Baa2 Baa2 A-/A3 A-BBB-Issues the world’s first Corporate green bond 7 TIMELINE & KEY EVENTS Consistent growth over a period of two decades

43

YIELD DEVELOPMENTProperty yields offer attractive spread over government bonds in all Vasakronan’s key cities

Source: Cushman & Wakefield, Bloomberg.

-1%

0%

1%

2%

3%

4%

5%

6%

7%

200

5 Q

2

200

5 Q

4

200

6 Q

2

200

6 Q

4

200

7 Q

2

200

7 Q

4

200

8 Q

2

200

8 Q

4

200

9 Q

2

200

9 Q

4

201

0 Q

2

201

0 Q

4

201

1 Q

2

201

1 Q

4

201

2 Q

2

201

2 Q

4

201

3 Q

2

201

3 Q

4

201

4 Q

2

201

4 Q

4

201

5 Q

2

201

5 Q

4

201

6 Q

2

201

6 Q

4

201

7 Q

2

201

7 Q

4

201

8 Q

2

201

8 Q

4

201

9 Q

2

201

9 Q

4

Stockholm CBD Uppsala Inner City Gothenburg CBD Malmö CBD Swedish 10Y Gov Yield

Page 44: VASAKRONAN AB · A3 BBB BBB Baa2 AA BBB- Baa2 Baa2 A-/A3 A-BBB-Issues the world’s first Corporate green bond 7 TIMELINE & KEY EVENTS Consistent growth over a period of two decades

44

LONG TERM TARGETS

FINANCIAL

A total return of at least 6,5 percent per year

A total return of at least 0,5 percentage points higher than the real estate sector

ENVIRONMENTAL

Our properties are self-sufficient and need no purchased energy

We have halved our power requirements

Our business and those of our customers generate no waste that is unable to be recycled or reused

Our business is climate-neutral by 2030

We build our properties using renewable, recycled or reused materials

All of our financing is green

We are ranked as the most sustainable property company in the world

SOCIAL

All employees act in accordance with our values and our Code of Conduct

We have a positive work environment free from negative stress

Discrimination and harassment do not occur at our workplaces

The design of our properties contributes to the security, safety and health of those both inside and outside them

Suppliers work in accordance with our Code of Conduct for suppliers

We reflect the society in which we work in terms of gender, ethnicity and age

We have no workplace accidents at our construction sites