Catena Aktie

Welcome to the conference call. [Operator Instructions]

Now I will hand the conference over to the speakers. Please go ahead.

Hi, and very welcome to Catena's presentation for the Q1 Report 2026. My name is Jörgen Eriksson, CEO of the company. And here is the agenda for today: a summary, a business overview and an update followed by sustainability, finance and a short takeaway before ending up with Q&A.

So starting with the summary of Q1. We report a 9% increase in rental income ended up at SEK 701 million driven mostly by acquisitions, but also by our CPI-linked contracts. Profit from property management increased by 7% in total, and per share it was down 1%. The temporary decrease in income from property management per share relates to the equity raise we did in January to be prepared for the closing of the Nordic portfolio at the 1st of April. We expect to report an increase in this measure from Q2 and forward wise.

Our NRV came in to SEK 454 and the balance sheet is very solid with the LTV at 33.6%. The occupancy rate has dropped to 95.1%, which is due to 2 factors. We have taken over the project Køge in Denmark. This new construction project located in a prime location was acquired vacant, and we are currently working on leasing it out and are hopeful that we will be able to secure a lease agreement there in due course.

The second reason is 1 of the buildings in the Ramlösa project, which was completed in Q1 and where Nowaste is currently leasing only half of the space. As I mentioned earlier, in Q1, we have positioned ourselves for the continued growth, backed by a very stable balance sheet and with the new acquisition now in place as we speak, our cash flow will be stronger than ever.

And next slide, please. And going to the business overview. We have seen in the market quite high activity in the transaction market in the beginning of Q1. But what we see as we speak is a bit more caution due to the Iran crisis and so forth. Some planned divestments from various players have been on pause and that is what we have heard from the brokers. But we are all the time looking for new opportunities, and they -- we are convinced that they will arise sooner or later.

Regarding some e-commerce statistics, more suites shopped online in January and e-commerce got off to a cautious but promising start to the year. In January, sales rose by 1% compared with last year, while a record number of consumers choose to shop online.

Regarding new projects, we are involved in dialogues with customers regarding new projects as we speak, but it takes time. And I think it's the same story and the same conservative view as we had in last quarter, and we don't think that's strange regarding the uncertainty in the market right now. It's easier for customers to put projects on hold or take big decisions.

Next slide. Regarding our customer portfolio, there has not been any major changes since last quarter, and it's the same with the segment table on the right-hand side. But in the next quarter, we expect that the DSV percentage to decrease as we add on the new Nordic portfolio.

Next slide. The total value of the portfolio is nearly SEK 45.2 billion, and it's worth noting now that since some quarters, we report as we do in the presentation here, we break down the values, not only by region, but also by investment properties, projects, building rights and land values. And the average lettable square meter has now a value of SEK 12,931.

Earlier this week, we announced the divestment of 10 properties to [indiscernible] of around SEK 600 million, and the value was about 8% above our book value. We saw this as a good opportunity to recycle a bit of the Swedish portfolio. And at the same time, we look into more deals in Finland. Since we entered the Finnish market, there has already shown up some interesting cases.

Next slide, a business update. During this quarter, we completed an expansion for Boozt and they now leased a total of 88,000 square meters from us. Their facilities located along the E-6 highway between Helsingborg and Ängelholm and serves all of the Boozt e-commerce customers throughout the Nordic region, and the lease agreement runs until 2037.

In this table here, we show the earnings capacity as we do in the report as well. Worth mentioning now is that the Nordic property portfolio that was completed at the 1st of April is included in this earnings capacity as well as the divestment of the 10 properties to [indiscernible] and that deal will be affected on the 1st of July.

Next slide. Current development. Now we have only 1 project left. So of course, we are keen to find new ones. We are struggling. But as I said before, we are conservative in the coming 6 months. But the total portfolio value of ongoing projects, SEK 675 million, where SEK 250 million is remaining investments. When it's all completed, we will add another 35,000 square meters to the portfolio.

Next slide, please. Regarding future development and regarding our land bank and our zoning plan processes, there is no major updates since last quarter, still waiting for a decision from the Land & Environment Court regarding the plan outside Ängelholm and as neighbor land to Boozt facilities. We expect to have some decisions during the summer, hopefully. In Örebro, the municipality is about to decide on the zoning plan during Q2, '26.

Next slide, please. Looking at our leasing operations, our net leasing in terms of moving in and moving out during the quarter is plus SEK 1 million. Our WALE is at 6.3 years and the letting ratio is at 95.1%. As I mentioned before, the lower letting ratio is fully explained by Denmark and Ramlösa.

Next slide, please. Some sustainability. The environmentally certified area is that the Q1, end of Q1 is 78%. Scope 3 is continuing to decrease on a 12-month rolling basis, of course, due to less projects. We continue to maintain a high level of EU taxonomy alignment. For example, our turnover came in at 77%. Total installed solar panels output on our roofs are now above 76 megawatts.

And now over to Magnus for some financial update on next slide.

Thank you, Jörgen. And next slide, please. This slide highlights the strength in our underlying earnings with solid year-on-year growth across all key metrics. Rental income is up 9%, mainly driven by acquisitions. Net operating surplus increased by 6% and profit from property management rose by 7%. As Jörgen mentioned, profit from property management per share is down 1%, a temporary decrease derives from the equity raise we did in January, and we expect to report an increase in this measure from Q2 and onwards.

And also, as we've shown before, our earnings capacity implies profit from property management per share at SEK 28.45 on a full year basis, 20% above the level a year ago. The Catena model continues to deliver predictable, resilient earnings with operational leverage.

Let's move to the next slide. This slide highlights the composition of our rental income growth in Q1 2026. As just mentioned, total rental income increased by 9% year-over-year. The largest contributor was acquisition, accounting for 4.4 percentage points of the growth. Our completed development projects added 2.7 percentage points consisting mainly of new facilities in Ramlösa, Helsingborg, Malmö, and Gothenburg, all leased to strong and well-known tenants.

Like-for-like rental income rose by 2.4 percentage points built up by CPI-linked indexation, renegotiated rental agreements as well as increased property tax assessments and media costs which are reinvoiced to our tenants. All-in-all, this underlines our ability to grow through multiple channels, strategic acquisitions, value-adding development and strong day-to-day operations.

Next slide, please. Let's turn to our capital structure. The first quarter of 2026 started off with a pickup in real estate transactions and increased activity in the credit markets, a momentum that slowed down during March due to the uncertainty caused by the outbreak of the war in Iran. Global long-term structural uncertainties still remain and is at an elevated level and it is important that we keep being prepared in case of increased volatility.

At the end of Q1 2026, our equity ratio stood at 55%, temporarily increased by the equity raise we did in January, a balance level that supports strategic flexibility. EPRA NAV per share increased to SEK 454 including -- excluding dividends, an increase of 5.8% compared to a year ago. This shows our ability to create shareholder value over time even as shareholder returns are being realized.

And next slide, please. Let's have a look at our financial position. We continue to demonstrate strong financial control with all key metrics within policy levels. Following the announcement of the acquisition in February, Fitch Ratings reaffirmed the BBB rating with the stable outlook for Catena.

Net debt-to-EBITDA came in at 7.1x, interest coverage at 4.1x, and loan-to-value at 33.6%, temporarily positively affected by the equity raise in January. These figures reflect both a solid capital structure and strong underlying cash flows that contribute to giving us headroom to our financial covenants as well as ensuring continued access to capital on competitive terms if needed when opportunities arise.

Next slide, please. Let's have a look at our debt and liquidity management. We remain focused on maintaining and securing funding on competitive terms. During Q1, we issued a SEK 400 million secured bond with 3-year maturity and pricing at STIBOR 3 months plus 74 basis points.

As mentioned in the Q4 presentation, in connection with the acquisition, we signed a 12 plus 6 months term loan bridge facility that in combination with the proceeds from the directed equity raise was utilized on April 1 for the short-term funding of the acquisition. Our average debt maturity remains solid at 4.3 years. Liquidity is strong with SEK 5.3 billion in available liquidity and the liquidity ratio above 1.

Passing on to next slide. Looking at our interest rate management. The war in Iran has led to rising energy prices and disturbances in the energy distribution systems. This has had an effect on the concerns for increased inflation and has put pressures on both short-term and long-term interest rates.

Swap rates increased dramatically during March, but have come down somewhat since the high point end of March. We closely monitor the rate volatility and continue to navigate in line with the framework set out in our finance policy. As of the balance date, 60% of the outstanding debt carries fixed interest and our current average interest cost at 3.3% reflects a stable level with some minor room for improvement.

Next slide, and back to you, Jörgen.

Thank you, Magnus. Our capital deployment is for the period divided into acquisitions, SEK 159 million and development of SEK 435 million and no divestments during this quarter.

And next slide, please. Property value stayed stable and ended up the period with a positive value change of SEK 72 million, which correlates to 0.2% of the total portfolio before adjustments. The average weighted valuation yield, so-called exit yield for the portfolio is at 5.8% by the end of the period. And the EPRA net initial yield came in to 5.6%.

Next slide, please. Now we have the takeaways from today. First, Catena closes Q1 2026 once again, with very solid numbers. And second, and the most important, Catena will continue to grow and increase the earnings during 2026 due to the major acquisition that took effect at the 1st of April.

And now we will open up for Q&A.

[Operator Instructions] The next question comes from Keivan Shirvanpour from SEB.

I have just a couple of questions. The first, could you maybe quantify the net letting number for the quarter?

Yes, the net letting was plus SEK 1 million.

Okay. And then, my second...

And -- but just to be clear, the net letting, that's what's moving in and out for us during the quarter.

Yes. And then my second question is you mentioned that you see some opportunities in Finland. Would you say that you're looking at portfolios or properties or is it individual properties? And maybe if you can say anything about yield levels?

Yes, good question. We have -- we look into portfolios, but we also look into some cases where it's single assets, and you can generally say that it's somewhat higher yields there for same, same. If you compare an apple in Sweden with an apple in Finland, the yields are somewhat higher but not as high as the old saying of perhaps 100 bps, I would say, perhaps 50 bps to 75 bps.

Okay. And then just a final question, and that's related to the divestment that you made. How much would you say in your portfolio that maybe could be categorized as non-core assets that you would be able to divest if you would find a buyer?

Well, we haven't disclosed any specific number, but perhaps somewhat the size we did this portfolio the other week or somewhat higher, we'll see. It depends on if there are some buyers with very strong appetite. But I mean, it's not that many percentage of the total value.

The next question comes from Emil Ekholm from Pareto Securities.

Hope you can hear me well. A few questions from me. The market for starting new projects have been quite sluggish now for some time, as you also mentioned, and the tenants have been passing investment decisions. For how long do you think the market can be in this sort of standstill without an investment decisions being taken?

Yes, I think we will, hopefully, sooner than later, come to an end. But I mean, it's also a combination, the dynamics in foremost Sweden were quite -- we have quite high vacancies in the total market. So in some regions, there is no need for new projects either. And if you have a weak demand and quite high supplies, it can last for a while, actually. But as we mentioned, we have dialogues. So I mean, sooner or later, we will have some success. That's what we believe in, but we cannot guide in terms of next months or years.

Would you say that the high market vacancy like most of that is tied to some specific regions, but would you say that, that also affects markets with lower vacancies as tenants become more cautious?

Yes, I think so. And in some cases, perhaps players, tenants look into if it -- is it possible to move to some other regions. We have not seen that yet happening. But I could imagine that they are considering it at least. So I think this high vacancy numbers is actually a wet blanket for the whole industry at the moment.

Okay. That's interesting. Do you think it's also like a price question, let's say, hypothetically, if you were to lower your yield on cost targets, do you think that you can start anything?

Perhaps. And, as we have said before, we have told that, yes, of course, in an idle world, we expect 7% yield on cost on our projects. But I cannot say that we will refuse to start if we can gain 6.5% or whatever. That's from case to case. The important thing is to have a pre-let before we start. And -- and so we are looking into a lot of angles to see where we can meet the market, so to say.

That's clear. And as the investments in your own portfolio now reduces as you only have 1 ongoing project, I assume that we can expect further focus on acquisitions. But how would you say that competition is in the market for your types of objects currently?

It's always a tough competition. There are many players with deep pockets. We have shown the market many times that we can be successful, and we have done a lot of acquisitions the last 3 years. And as I said earlier in this call, now we are looking into some more opportunities in Finland. So it's fair to assume that some more acquisitions will take place in that region going forward.

That's very clear. And you also had now during Q1, more than 100 leases under renegotiations. Can you say anything about tenant behavior in these negotiations given like what we see in the current macro environment? Are they pushing for shorter lease terms? Do they request any CapEx? And to what extent are you able to raise your rent levels?

I will say it's the tenants market right now. So trying to increase the rents are perhaps in just some few cases possible. In the others, it's a fight to keep them and to prolong the leases. So far, we have been quite successfully, but we are very humble for the situation.

Okay. But we see that a lot in the office space right now, like tenants pushing for shorter lease terms. Would you say that it's the same within your type of assets? Or do they still prefer to have longer leases?

It really depends on what kind of situation it is. Is it a tenant that has automation installed, they are quite keen to keep a long lease. As we mentioned, Boozt before that lease last to 2037, and they will align their depreciations with the automation with the lease agreement. Other 3PL players that just use pallet racks, they can wish for shorter leases. Absolutely.

Okay. And then lastly from me. When do you think we can expect the tenant in Idunsvej property?

Yes, that's the same question I asked the regional manager in Denmark. But we have also at that location, interesting discussion. So I mean, that's the best, best location logistic wise in Denmark. So we are not that concerned about that temporary vacancy.

Something this year, I assume then.

Hopefully. And now it's worth to mention also you can sell on paper, but that's the potential customers also want to see the product, and now it's completed. So we have had some showings for the customer already. So that's promising.

The next question comes from Niklas Wetterling from SB1 Markets.

I have 3 questions. And the first 1 is just on the vacancy rate. And do I understand it correctly, like the like-for-like vacancy rate is flat in the quarter?

Correct, Niklas. It's perfect. It's flat.

Great. And then my second 1 is on investment capacity. I believe you mentioned you had SEK 2 million or SEK 2 billion or SEK 3 billion in investment capacity following the equity raise and now you've divested portfolio instead. Is it fair to assume that you have SEK 3 billion in investment capacity? And when do you expect to deploy that?

Yes. I mean the math you're doing is correct, but we have no clear answer when we have deployed those billions. As I said before, we are looking into cases in Finland. We'll see if we will be successful, but we are hopeful at least whether it takes this year and part of next year for those billions. We have to wait and see.

Okay. And my last question is regarding the hedging ratio, which is 60% right now and what will happen with that figure following the completion of the Urban Partner portfolio?

As we've said, we have a bridge financing in place. And when we do the takeout to long-term financing, we will -- in connection with that also make sure to align with our finance policy and hedge in according -- in accordance with that.

Okay. But currently, it's floating.

Currently, it's floating, yes.

And now there are no further questions.

There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

So thank you all for listening to this investor call for Catena's Q1 2026. Wish you all a wonderful weekend when it comes. Thank you, and goodbye.

Welcome to the conference call. [Operator Instructions] Now I will hand the conference over to the speakers. Please go ahead.

Hi, and welcome to this -- everyone to this Q4 report. We will show you the agenda here. Here is the agenda for today, summary, a business overview and an updated followed by sustainability, finance and a short takeaway before ending up with a Q&A.

So a summary of the year-end 2025 report, where we report 21% increase in rental income ended up at SEK 2.651 billion, driven mostly by acquisitions, but also by our CPI-linked contracts. Profit from property management increased by 28% in total and per share, it was up 18%.

Our NRV came in close to SEK 446 and the balance sheet remains very solid with an LTV at 39%. We announced yesterday a huge acquisition, which we will come back to later on. But with that said, we will have a stronghold on the Nordic logistics property market.

Next slide, and a business overview. We have seen more activity in the transaction market in Q4, and we have obviously been involved in one of the largest deals. What we hear from brokers is that the activity will continue during 2026.

Swedish e-commerce has reached a new peak. This is shown by PostNord's E-barometer for the full year 2025 with growth of 10% compared with previous year. Total e-commerce sales reached SEK 153 billion. This is the highest level ever recorded, surpassing the previous peaks during the pandemic.

Further, the Swedish e-commerce parcels increased by 12.9% or by 26.1 million parcels in 2025. During the full year 2025, 228 million e-commerce parcels were sent to the private individuals in Sweden. These 2 data points are very promising and should be a good driver for the logistics segment.

Regarding new projects, the story is pretty much the same as in the last quarters. We are involved in dialogues with customers as we speak, but it takes time, and we have a quite conservative view of signing new projects in the coming 6 months.

Regarding our customer portfolio, there has not been any major changes in Q4, and it's the same with the segment table on the right-hand side.

Next slide. The total value of the portfolio is now nearly SEK 44.5 billion. It's worth noting that in the report and also here in the presentation, we break down the value not only by region, but also in investment properties, projects, building rights and land values. And the average lettable square meter has now a value of SEK 12,833.

Next slide, please, the business update. Here, so yesterday evening, we press released a record big transaction containing 20 properties in Sweden, Finland and Denmark. We are super excited about this and think that the portfolio fits in perfectly to our existing portfolios in Sweden and Denmark. And at the same time, we can enter a third and a new market.

We see great opportunities to establish the business in Finland and start a growth journey as we have done in Denmark the last years. The portfolio consists of top modern, newly built buildings with high EPC and ambitious certifications. The customers are well reputed, and we will add some new names in our customer list.

We will also add about 70,000 square meters of building rights. Closing is expected to be at the 1st of April and fully let, we expect an NOI of SEK 483 million on a running 12 months. And the letting ratio is 96.5%, and we do have rental guarantees for 1 year for the vacant facilities. Net initial yield on cash, excluding the building right, is around 5.6%.

Next slide, please. And the final phase at Logistics Position Ramlosa, ICA Fastigheter has now signed an 8-year lease with Catena for the final building, which is yet to be constructed at Ramlosa. The new build encompasses 18,042 square meters and the building in question is being to be certified according to BREEAM Excellent and Sweden Green Building Council Zero CO2 standards. Construction is planned for completion in late '26 or early '27, at which point ICA will take occupation.

ICA is also moving into one of the existing facilities in Ramlosa where a separate 8-year lease with Catena is in place. The company plans to move into this 16,753 square meter facility in the summer '26 after refrigeration areas and other features have been installed. And total investment for the entire Ramlosa project is estimated to SEK 1.4 billion, and we estimate an NOI of around SEK 98 million all -- once all the facilities are leased.

Next slide. Our ongoing project portfolio totals to around SEK 1.2 billion, where SEK 272 million is remaining investments. When all is completed, we will add around 91,000 square meters to the portfolio and yield on cost in those projects is around 7%.

Next slide. Some updated information around the land bank and E-City Engelholm appeal by 15 different players is an ongoing case in the Environment Court of Law, and we expect that there will be some kind of decision in the summer '26. And in Orebro, the municipality is about to decide on the zoning plan once again during spring '26.

Next slide, please. Some leasing update. Our net leasing in terms of moving in and moving out came in for the full year at plus SEK 72 million for the full '25. And for the fourth quarter, it was plus SEK 2 million. Our WALE is now 6.4 years and the letting ratio is at 96.7%.

And next slide, please, and some sustainability. The environmentally certified area is now at 73%, and we have as goal to reach 100%. The Scope 3 is now decreasing on a 12-month rolling basis due to less projects. We continue to maintain a high level of EU taxonomy alignment. For example, our turnover came in at 77%, and we have once again been certified as a Great Place to Work. Total installed solar panels output on our roofs is now above 75 megawatts.

And now over to Magnus for some financial update and next slide.

Thank you, Jorgen. Next slide, please. I will start off by highlighting that after the end of the quarter, on January 20, we carried out a directed share issue that contributed with SEK 2.8 billion in new equity. The proceeds will be used for funding of the acquisition that we signed yesterday in combination with a 12 plus 6 months term loan bridge facility provided by banks within our existing bank group.

Next slide and our income and earnings. This slide highlights the continued strength in our underlying earnings with solid year-on-year growth across all key metrics. Rental income is up 21%, mainly driven by acquisition. Net operating surplus increased by 23% and profit from property management rose by 28%, reflecting both scalability and cost control.

Earnings per share from property management grew by 18% to SEK 26.72, underlining our ability to translate top line growth into shareholder value. The Catena model continues to deliver predictable, resilient earnings with operational leverage.

Next slide, please. This slide breaks down the key drivers behind our rental income growth for 2025. As just mentioned, the total rental income increased by 21% year-over-year. The largest contributor was acquisitions accounting for 14.8 percentage points of the growth. Our completed development projects added 3.8 percentage points, consisting mainly of new facilities in Jonkoping and the Gothenburg region, all leased to well-known tenants in retail and foodservice.

Like-for-like rental income rose by 4 percentage points, built up by CPI-linked indexation, renegotiated rental agreements as well as increased property tax assessments and media costs, which are reinvoiced to our tenants. All in all, this underlines our ability to grow through multiple channels, strategic acquisitions, value-adding development and strong day-to-day operation.

Next slide, please. Let's turn to our capital structure. Over the course of the year, we've seen a pickup in real estate transactions and the increased activity in credit markets, a momentum that has continued during Q4. That said, there are still global long-term structural uncertainties in place, and it's important that we keep being prepared in case of renewed volatility.

At the end of 2025, our equity ratio stood at 51%, a balanced level that supports strategic flexibility. EPRA NRV per share increased to SEK 446, excluding dividends, an increase of 4.9% compared to a year ago. This shows our ability to create shareholder value over time even as shareholder returns are being realized.

Passing on to next slide. Let's move on to our financial position. We continue to demonstrate strong financial control with all key metrics within policy levels. In October, the credit rating agency Fitch Ratings affirmed Catena's investment-grade rating BBB with a stable outlook in its annual credit rating update. Earlier today, Fitch Ratings reaffirmed the BBB rating following the announcement of the transaction yesterday.

Net debt-to-EBITDA came in at 7.8x, interest coverage at 3.9x and loan-to-value at 39%. These figures reflect both a solid capital structure and strong underlying cash flows that contributes to giving us headroom to our financial covenants as well as the ability to act on new investments when the opportunities arise.

Next slide, please. Moving on to debt and liquidity management. We remain focused on maintaining and securing funding on competitive terms. During the quarter, we have refinanced SEK 617 million and DKK 361 million, and we continue to see a strong appetite from banks and the capital market in regards to financing of new investments and acquisitions as well as upcoming refinancings.

As mentioned earlier, in connection with the announced acquisition, we signed a 12 plus 6 months term loan bridge facility that in combination with the proceeds from the directed equity raise will be used for the short-term funding of the acquisition. Our average debt maturity remains solid at 4.5 years. Liquidity is strong with SEK 3.2 billion in available liquidity and a liquidity ratio above 1.

Next slide, please. Let's move on to our interest rate management. In the start of 2026, there has been a slight shift in the view that the Swedish Riksbank has reached the end of its rate cutting cycle and a potential rate cutting during '26 is not ruled out by the market. As of the balance date, 61% of the outstanding debt carried fixed interest and our current average interest cost at 3.2% reflects a stable level with some room for improvement.

Next slide, and back to Jorgen.

Thank you, Magnus. Our capital deployment is for the period divided into acquisitions, SEK 1.840 billion, and development, SEK 1.147 billion. And we have, at the same time, divested properties for SEK 98 million.

And next slide please. Property valuations. The values stayed stable and ended up the period with a positive value change of SEK 485 million, which correlates to 1.1% of the total portfolio before adjustments. The average weighted valuation yield, the so-called exit yield for the portfolio is at 5.9% by the end of the period. The EPRA net initial yield came in to 5.6%.

Next slide, please. So some takeaways from today. For the first, Catena closes 2025 with very solid numbers and increased earnings. The earnings per share is up 18%, as we said before, very impressive, and we are very satisfied with that. And second and absolutely the most important, Catena will continue to grow during 2026, and that goes without saying regarding yesterday's transaction.

And with that said, we will open up for Q&A.

[Operator Instructions] The next question comes from Oscar Lindquist from ABG Sundal Collier.

So a couple of questions from me. Firstly, on the earnings capacity. Could you sort of give some color on what's driving the sort of 1.1 percentage point deterioration in the NOI margin?

Yes. Oscar, there are 2 things. We have now we see for the next 12 months based on where the Danish currency rate is that we will have some lower income from that part. And it's also fair to assume we see some vacancies kicking in during the year. That's the explanation.

Okay. And is that reflected in the top line then as well?

That's reflected in the top line, and the NOI margin, that's also what we have seen in the second half of '25 that we have had some higher property tax, which will be reinvoiced, of course, but that will decrease the NOI margin a bit.

Okay. Perfect. Then on the acquisitions -- on the acquisition you completed yesterday, you mentioned you have 1 year rental guarantees. Is that correct?

Correct.

And can you walk us through the financing of this portfolio? What do you expect in terms of funding costs?

We expect -- as I said, we have a bridge financing in place that we will take out on the longer market during the year, and we expect to land around our current average of cost of debt.

Okay. And then just could you give a guidance on the NOI margin of the portfolio you acquired?

Yes. So we said that there, if you exclude the value of the building rights, we said that we have -- oh, the NOI margin, sorry, sorry, sorry. We can say it's much higher than we have in our existing portfolio.

Okay. And then just a couple of small questions. Could you -- the sort of project you acquired in Koge, Denmark, do you have any guidance on timing of -- in contribution from that acquisition?

It will -- there be a sort of closing and completion of the project in Q1, we expect. We have ongoing dialogues for potential customers, but it's too early to say when we have a lease agreement in place.

Okay, And then on San Sac, when do you expect that to be completed?

In a period of 1 month. So in Q1.

The next question comes from Keivan Shirvanpour from SEB.

I have a couple of questions. And the first is related to the acquisition. Could you maybe give some type of indication of how central administration costs will be affected by this?

Yes, Keivan, relevant question. We do see just smaller increases in that. Of course, we will now hire a Finnish organization, the same setup as we have in Denmark, so 1 or 2 guys. So it's really on the margin. The Swedish portfolio and the Danish asset, that will -- we will swallow it into our existing organization. Perhaps we need one more property manager. That's it.

Okay. And then also on Finland, you say that this is a market that you want to grow in. Could you maybe give some type of like an indication of how large do you want the portfolio in Finland to be as a share of total?

Well, we don't have any exact numbers, but we do see there is a meaning to increase more than the SEK 2 billion we now have in this acquisition. And as we said before, we have done a growth journey in Denmark. We expect to do that in Finland as well.

Whether it will be some more billion during the coming years, it depends a lot on what kind of opportunity there will be on the table, so to say. But we expect to grow more in Finland versus Sweden, all else equal, but you never know.

Okay. And then I just have a final question, and that is related to the investment capacity going forward because you mentioned in connection with the share issue that you see that your balance sheet enables investment capacity of about SEK 2.5 billion to SEK 3 billion.

And my question is, what is the constraining factor to that volume given that -- assuming that your LTV will be somewhere in the mid-40s? I would assume that you could potentially have higher investment or room for investments than what you specified there.

Well, it depends on what kind of opportunities and what kind of -- what is the environment at that time and so on. We -- Catena is not known as to take too much risk. And well, if there is a good opportunity, we can, from time to time, be a bit above our financial policy, but not in the long run, and we rather stay below 50 than above 50. So yes, we have to consider what kind of opportunities there are. But with that said, we have dry firepower, and we can do more business.

Okay. And just a final question, that's a follow-up question on the NII margin. When you say that it has a considerably higher margin than the current portfolio, could you give some type of indication maybe of how much higher? Is it like close to 90%? Or is it 85%? Or is there any type of...

You can assume that it's around the 90%.

[Operator Instructions] The next question comes from Emil Ekholm from Pareto Securities.

First off, congrats on the acquisition. It looks very good. A few questions from me, mainly on the transaction. Where in the acquired portfolio can we find the vacancies that you have?

That's in Sweden, that's in Malardalen.

Okay. And are there a lot of properties that are single tenant? Or are there that are like more -- or how many of the properties are single tenant?

I cannot add on the top of my head, but there are quite many that are single tenants, but there are also some multi-tenants.

Okay. And you said that you want to grow more in Finland. Can you just give some color on the yields and yield gap compared to Sweden and Denmark that you can find there, not necessarily in this portfolio, but more on a general level?

Generally speaking, the yields are a bit higher in Finland, but we do see and when we talk to a lot of brokers and other players within Finland that the interest for investing in Finland has risen a lot the last year. And there is -- there are competitors. And so especially in the logistics, the yields have been trending down. But for sure, they are higher than in Sweden and Denmark, as we speak. But I wouldn't say that they're like 50 to 100 bps higher, but higher, yes.

Okay, that's clear. And you also say that the properties are modern and newly built. Do you have like an average age of the portfolio?

Yes, except one building, they are built the last 3 years.

Okay. That's good. And then lastly, just sanity check more or less. But in the earnings capacity, you -- is it correct to assume that you have included a new number of shares, but not the effect from the acquisition, right?

That's right. And we're talking about it internally, should we do the new shares or not in the table. But as it's for 12 coming months, then yes, we have 66.4 million shares.

The next question comes from Kanad Mitra from Barclays.

Just a couple of questions mainly on the acquisition. Can you please elaborate where do you -- what kind of yields do you think are attractive to you given that the yield on this acquisition is in the low 5s? And again, just broadly, if you were to do an acquisition, what would be the threshold yield for such an acquisition?

Sorry, it was -- it's a quite bad line. So we can't really hear your question. Could you please repeat? Or could you send a text to us?

Just can you elaborate why do you think the acquisition yield is attractive in a low 5s kind of acquisition yield? And what would be the -- yes.

Yes. We said that the yield is -- the cash yield is 5.6%.

Okay. And what would you say about kind of what is your threshold for new acquisitions if you were to do any in terms of...

There is no magic number. That's not the way we work. I mean, it depends on what kind of customer, what kind of location, are there any building rights, what's the upside, if we can add a strong new customer to our network, perhaps we can start the dialogue and perhaps we can offer some new buildings and to increase the cooperation with a new customer on our land bank and so forth.

So it's more of like how can we do our operations even better and what can we offer to the customers. And then whether it's a 5.5%, 5.6% or 5.9%, that's not really that crucial for us. It would be in the long run, a good investment for us and to strengthen our operations.

There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

So thank you, everyone, for listening to this earnings call. And from Helsingborg, we wish you all a very nice weekend when it comes. Thank you, and goodbye.

Thank you.

Welcome to the conference call.

[Operator Instructions]

Now I will hand the conference over to the speakers. Please go ahead.

Hi, and welcome everyone to Catena's Q3 report 2025. My name is Jörgen Eriksson, and I'm the CEO of the company. Here is the agenda for today: a summary, a business overview, an update followed by sustainability, finance, and a short takeaway before ending up with a Q&A.

Let's start with the summary of the Q3 2025 report, where we report a 25% increase in rental income, ended up at SEK 1.963 billion driven mostly by acquisitions, but also, of course, our CPI-linked contracts. Profit from property management increased by 32% in total, and per share, it was up to 18.7%. Our EPRA NRV came in at SEK 438 per share. The balance sheet remains very solid with an LTV at 39.2%, and we expect to generate strong cash flows in the coming quarters.

With that said, in combination with our robust balance sheet, we are in a favorable condition for more growth. The business overview, the market update, we have witnessed much more activity in the transaction market after the summer, and we have also heard that there is more to come, which means that there will arise opportunities for us to continue to grow. When there are properties that fit into our strategy, we will try to execute.

E-commerce continues to develop in the right direction. In the second quarter of the year, it grew by 9% compared to last year. Some of our e-commercers performed very strong, such as Boozt with their brand boozt.com, Apotea within the pharmacy industry, and Nelly within the fashion. The top three growing segments are furniture and home furnishings, up to 20%; pharmacy, up 17%; and home electronics, up 10%.

We can, after the summer, sense some more activity regarding new projects, and we are involved in more dialogues as we speak compared to the first half-year 2025. It's still a little too low, but nevertheless, it's a positive sign. The Swedish logistics market has continued to see increased vacancy rates, currently at 9% or a bit more, even though. In Denmark, the number is around 5%. The rise in the vacancy rates is mainly driven by the extensive development on new logistics assets, of which a high proportion have been built speculative.

Regarding our customer portfolio, Elgiganten has taken place in the top four after the latest acquisition, which we closed at the 1st of September. DSV is our biggest customer and has moved from 20% to 18% of our contractual value. Logistics and transport is our biggest segment, standing for almost 50% of the contract value.

We can also note that durable goods has risen to 18%, partly due to the acquisition we made on the 1st of September. The total value of our portfolio is close to SEK 44 billion. It is worth noting that in the report and in the presentation here, we break down the value not only by regions, but also now by investment properties, projects, building rights, and land values. The average lettable square meter has a value of SEK 12,761. Let's go over to a business update.

As we said in the Q2 report, we announced the signed agreement to acquire Elgiganten's distribution and central warehouse in Jönköping. At the 1st of September, we closed the deal. With that said, we have one month of rental income from this property in this Q3 report. The property is located opposite our newly built facility that Elgiganten rents from us.

The investment was SEK 1.275 billion before deduction of deferred tax. We estimate the NOI to approximately SEK 80 million. Our ongoing projects portfolio totals to around SEK 1.2 billion, where SEK 272 million is remaining investments. When all is completed, we will add another 91,000 square meters to the portfolio. Yield on cost on those projects is around 7%. Regarding the project Ramlösa, we expect to come with an update during Q4.

Regarding our [ Lemberg ], we have one update. The municipality of Ängelholm adopted a new zoning plan, E-city Engelholm, close to where Boozt is located today. This decision was at the end of September. This decision was unfortunately appealed. We have to wait for a verdict from the Land and Environment Court. The story is to be continued.

Over to a leasing update. Looking at the operations, our net leasing in terms of moving in and moving out came in with plus SEK 70 million for the first nine months. For the third quarter, it was plus SEK 7 million. Our WALE is now 6.5 years, and the letting ratio is at 96.6%.

Over to the sustainability. Now we have a 58% environmentally certified area. The scope 3 is decreasing on a 12-month rolling basis due to less projects. We continue to maintain a high level of EU taxonomy alignment. For example, our turnover came in at 76%. A total of 4 biodiversity projects were carried out in the south and the east regions in the third quarter. The projects included replacing mowed lawns with meadows planted with meadow flowers. Produced energy from solar cells reached around 36,500 megawatt-hours on a rolling 12-month basis. Total installed output on our roofs is now above 71 megawatt power.

Now over to Magnus for some financial update.

Thank you, Jörgen. This slide highlights the continued strength in our underlying earnings with solid year-on-year growth across all key metrics. Rental income is up 25%, mainly driven by acquisitions. Net operating surplus increased by 28%, and profit from property management rose by 32%, reflecting both scalability and cost control. During the quarter, retroactive property tax of approximately SEK 20 million was reinvoiced to our tenants as a result of new property tax assessments, which impacted the margin with 2.5 percentage points for the quarter.

Further, we had SEK 2 million in OpEx related to insurance matters. However, compensation from the insurance company is recognized as other income in the income statement. Earnings per share from property management grew by 18.7% to SEK 19.91, underlining our ability to translate top-line growth into shareholder value.

While not shown here, our earnings capacity implies SEK 27.3 per share on a full-year basis, 12% above the level a year ago. The Catena model continues to deliver predictable, resilient earnings with operational leverage.

This slide breaks down the key drivers behind our rental income growth for the last 12 months. As just mentioned, total rental income increased by 25% year over year. The largest contributor to that was acquisitions, accounting for 19.7 percentage points of the growth. Our completed development projects added 4.4 percentage points, consisting mainly of new facilities in Jönköping and in the Gothenburg region, all leads to well-known tenants in retail and food service. Like-for-like rental income rose by 3.4%, where 2 percentage points reflect CPI-linked indexation and 1.4 percentage points refers to an increase in property tax assessments, which is reinvoiced to our tenants. All in all, this underlines our ability to grow through multiple channels: strategic acquisitions, value-adding development, and strong day-to-day operations.

Let's turn to our capital structure. Over the course of the year, we've seen a pickup in real estate transactions and increased activity in the credit markets, a momentum that has continued during Q3. That said, global long-term structural uncertainties remain, and it's important that we keep being prepared in case of renewed volatility.

At the end of the third quarter, our equity ratio stood at 51%, a balanced level that supports strategic flexibility. EPRA NRV per share increased to SEK 438, excluding dividends, an increase of 5.2% compared to a year ago. This shows our ability to create shareholder value over time, even as shareholder returns are being realized. Let's move to our financial position. We continue to demonstrate strong financial control with all key metrics within policy levels.

In October, the credit rating agency Fitch Ratings affirmed Catena's investment-grade rating BBB with a stable outlook in its annual credit rating update. Net debt to EBITDA came in at 7.8x, interest coverage at 3.9x, and loan-to-value at 39.2%. These figures reflect both a solid capital structure and strong underlying cash flows that contribute to giving us headroom to our financial covenants, as well as the ability to act on new investments without compromising financial resilience.

Let's have a look at our debt and liquidity management. We remain focused on maintaining and securing funding on competitive terms. During the quarter, we have refinanced SEK 950 million at margins that are improving our cost of debt. We continue to see a growing appetite from the banks that we work with in regards to upcoming refinancings and also in exploring new deals.

In early July, as we communicated in connection with the Q2 report, we also completed a SEK 1 billion senior unsecured bond transaction, split across three and five-year maturities. Our average debt maturity remains solid at 4.6 years. Liquidity is strong with SEK 3.4 billion in available liquidity and a liquidity ratio above one.

Let's move on to our interest rate management. We enter Q4 with a view that the Swedish Riksbank has reached the end of its rate-cutting cycle, and the market anticipates that the policy rate to remain unchanged for the coming year or so. As of the balance date, 59% of the outstanding debt carries fixed interest, and our current average interest cost at 3.2% reflects a stable level with some room for improvement.

Back to you, Jörgen.

Thank you, Magnus. Our capital deployment is for the period divided into acquisitions at SEK 1.629 billion and development SEK 769 million. We have, at the same time, divested properties for SEK 98 million. Let's look into the property valuations. Property values stayed stable and ended up the period with a positive value change of SEK 297 million, which correlates to 0.7% of the total portfolio before adjustments. The average weighted valuation yield, the so-called exit yield for the portfolio, is at 5.9% by the end of the period, and the EPRA net initial yield came in to 5.6%. The value change for the quarter ended up at plus SEK 123 million.

Let's go over to takeaways for today and the report. First, Catena closes the third quarter with very solid numbers and increased earnings. Second, we are positive for the coming periods in terms of a lot of upcoming opportunities in the transaction market.

With that said, we hereby will open up for Q&A.

[Operator Instructions] The next question comes from Oscar Lindquist from ABG Sundal Collier. Please go ahead.

Hi, good morning. Can you hear me?

Good morning, Oscar.

On the project interest, you state that you've seen or increased interest after the summer. Could you provide some more color on this?

I mean, before summer, it was quite, quite, quite, so to speak. Now we hear from the business developer team that there are more ongoing discussions. We also have our network within the existing customers. We used to say that it's always easier to do more business with the existing customers. It's a total analyze from the intelligence we have in the market within our customers and what they are thinking and planning for the future. Yes, a bit more positive than compared to the first 6 months this year.

Is there any sort of geographical difference in these discussions?

We cannot communicate more than it's in Sweden, and that perhaps goes without saying because it's also where we have a land bank and so on. That's what we can disclose at the moment.

Okay. On transactions, where do you find sort of the most interesting acquisition targets now?

We consider to acquire both in Denmark and Sweden. We have seen portfolios who are out now for sale, and we have also heard that there will be more to come. There is a lot of players to think it's a good moment to try to dispose. On the other hand, there is a lot of players that want to grow. We realize that there is competition out there. Based on our history and our track record, we think that we can be successful in some of the transactions.

Okay. In terms of LTV, you're around 40% now. How far would you be comfortable to push this metric?

As I said, we are at 39.2% for the quarter. It's, of course, a discussion with the board and our owners, but we have a policy that allows us to go up to 50%. That's the guidance we give on that, I would say.

The next question comes from Jan Ihrfelt from Kepler Cheuvreux. Please go ahead.

Okay. Thanks for taking my question. Good morning. I kick off with the investment in the property management portfolio. It was SEK 0.8 billion this time, the first nine months, and compared to SEK 2.0 billion last year. What could we expect for 2026 on this line?

Good morning, Jan. Thank you for the question. We don't use to guide. We cannot give you any numbers. It depends on lots of different factors. The thing we can say, as we always say, is that in the longer run, we will definitely grow. When we find the opportunities that fit in our strategy, etc., we will go for it. It could be, yes, as Magnus said before, there is a lot of headroom. We'll see. We cannot guide to a specific number.

Okay. Fair enough. Next question in regards to the average interest rates. If I were to interpret you right, that you maybe see some headroom for a little bit lower average interest rates going forward. Could you elaborate on that?

Yes. The average interest rate, of course, also is affected by the base rate, which has come down during the quarter. We see from the refinancings we do and also from the bond issuance that we did in July that currently, for the refinancings we do, we see some improvements compared to the current level. Of course, depending on tenor and so on as well. Like for like, some improvements.

Okay. Thanks for that. My final question regards your project portfolio. The Nowaste Logistics project in Helsingborg seems to be a little bit delayed, according to the table here on page 10. Could you explain the reasons behind it and also the investment level, if that has changed also?

Yes. Good question. As you pointed out, the forecast now is that we will end up the project at Q4 2026. We start the construction work on the last building as we speak. As I said before in this call, we expect to come out with an update around the total project during Q4. Please wait for that.

The next question comes from John Vuong from Van Lanschot Kempen. Please go ahead.

Hi. Good morning. You're talking about both increased momentum in the transaction market as well as in your leasing discussions. Just to understand, how do you see the balance between acquisitions and developments in the next 12 months? Also, how do you look at the returns between these two?

Good morning, Jan. Good question. I mean, we used to say that, first of all, if we have to choose and we have on the table for decision one project and one acquisition, it's fair to assume that we will go for that project because it's more profitable. As the situation is today, we can probably do both because of our balance sheet and our headroom. Generally speaking, the projects are more profitable 12 months going forward. With the headroom we see in our balance sheet, it's fair to assume that it will be more acquisitions than projects. You never know.

Okay. Thank you. On your ESG targets, you delayed your net zero target to 2040. Could you maybe explain what the rationale behind that is? Perhaps, have there been any projects that you had to turn down because of this initial target at 2030?

That is the reason why this target is amended. That's aligned a lot of what the market is and what, for example, Sweden as a country has as a target to be neutral to 2040. We saw that the 2030 was a bit too aggressive. We try to, of course, have a part goal to 2030, but the long-term goal is amended to 2040. If I interpret your question right, we haven't turned down any projects because of this.

The next question comes from Keivan Shirvanpour from SEB. Please go ahead.

Yes. Good morning. I have a couple of questions. The first is on the like-for-like growth. You mentioned here for the first nine months, you have a like-for-like rental growth of 3.4%, but property expenses are up 13.6%. There are insurance cases that impact that. Could you maybe elaborate what the like-for-like NOI growth was in Q3?

Not isolated. We have not disclosed that number. As Magnus said before, and as you heard, the property tax impact is positive by about 1.4% and the residual of it, then the 2% or CPI-linked contracts and some amendments in the rents level.

Okay. Even if you adjust for that, I would assume that the like-for-like NOI growth is below the rental growth or to some extent.

Yes, to some extent.

Okay. Good. I also have a question on projects. Since you notice better activity in your discussions, are you at all open to maybe use the best parts of your land bank to build speculative projects?

No, definitely not. As you know, we are a long-term player. We want to have the long relationship with our customers. When we plan a new project, we really want to do it as a build-to-suit, so they really get what they want. We are also convinced that they will stay in the long run. There could be some small part of a bigger project that can, by some reason, be speculative, but that's just some handful percentages of the total project.

Okay. Also, another question on the projects. These dialogues that you have, is it for existing premises or is it for completely new developments?

I mean, we have discussions around our vacancies as well as for completely new projects. That's our separate dialogues. The players who are looking to our vacated areas, it's not the same as those who look for totally new projects.

Okay. Just a final question on the net letting. You mentioned SEK 70 million plus for the first nine months and then SEK 7 million in Q3. Since you have quite low project volumes, I would assume that the net letting contribution from projects is quite limited. Could you maybe elaborate where the remainder of the net letting is coming from if you were to break it down?

I mean, the SEK 7 million we have in this quarter, I cannot on top of my head, I'm not sure. I think it's some thousand square meters on various regions. I cannot give any more details on that. Yes, it hasn't been driven by projects. Yes, that's correct. We cannot see any more questions in the queue. Hereby, we close the Q&A.

There are no more questions at this time. I hand the conference back to the speakers for any closing comments.

Thank you, everyone, for listening to this earnings call. From Helsingborg, we wish you all a very nice weekend when it comes. Thank you and goodbye.

Thank you.

[Audio Gap] Catena Q2 Report 2025. [Operator Instructions]

This call will be conducted by CEO, Jorgen Eriksson; and Chief Treasury Officer, David Silvesjo. Now I will hand the conference over to CEO, Jorgen Eriksson. Please go ahead.

Hi, everyone, and welcome to this Q2 presentation for Catena. And here is the agenda for today, a summary, business overview, update, followed by sustainability, finance and a short takeaway before we're ending up with Q&A. So next slide, please.

A summary of the Q2 2025 report, where we report 26% increase in rental income ended up at SEK 1.288 billion, driven by acquisitions and by our CPI-linked contracts. Profit from property management increased by 32% in total and per share, it was up to 16%. And our NRV came in at SEK 428. The balance sheet remains very solid with an LTV at 38.6%. And we expect to generate strong cash flows in the coming quarters. And with that said, in the combination with our robust balance sheet, we are in a favorable condition for more growth.

Next slide, please, and a business overview and the next slide, please. We have witnessed more transaction this spring, and we have also noted that in some cases, yields have ended below 5%. We are talking about prime yields, and we were actually involved in one of those transactions when our joint venture together with Platzer disposed a property in Gothenburg with Volvo as a tenant.

E-commerce continues to develop in the right direction. In the first quarter of the year, it grew by 9%. In addition, digital trade has a stronger growth than physical, which means that the sales channel is taking market shares in the retail sector as a whole. This growth is the highest since 2021 when e-commerce was at a historical peak.

We continue to struggle to find new projects, but the market remains cautious. We have some dialogues going on, but do not expect any major change in the demand for the next 6 months. The Swedish logistics market has continued to see increases in the vacancy rates currently at 9% as of Q1 2025 on a national level. The continued rise in vacancy rates is mainly driven by the extensive development of new logistic assets, of which a high proportion have been built speculative.

And of course, there is a weaker demand also. So all in all, it's quite struggling market. Next slide, please. There are no major changes in our customer portfolio, but worth mentioning that Elgiganten will stand for a higher share in the coming quarters. More about Elgiganten later on in this presentation.

And next slide, please. There has not been bigger changes in our portfolio compared to Q4 and Q1. We have disposed a smaller asset in Region South and the rental value is up a bit and the surplus ratio is now up to 84%. Next slide, please, and a business update. In May, we acquired a PostNord property in Copenhagen. The location is very strategic, and there is a 10-year lease agreement with PostNord. And we look forward to continuing and deepening the cooperation with PostNord with this transaction and the total GLA is around 25,400 square meters.

Next slide, please. During the quarter, we agreed with Boozt to expand the facility by approximately 6,000 square meters. And in connection with that -- this, the lease for all 82,000 square meter was also extended by 5 years and is now valid until 2037. Boozt that has a turnover of more than SEK 8 billion has only this location for all of the outgoing goods.

And next slide, please. And the other day or actually yesterday, we signed an agreement to acquire Elgiganten's distribution and central warehouse in Jönköping. The property is located opposite our newly built facility that Elgiganten rent from us. Closing will take place on 1st of September. And after that, we will have about 200,000 square meters of logistics space leased to Elgiganten. And the investment is SEK 1.275 billion before deduction of deferred tax and has an estimated net operating income of approximately SEK 80 million. And this transaction was an off-market and shows that we can act as fast-footed as anyone else, and we really enjoyed doing the transaction together with Niam.

Next slide, please. Our ongoing project portfolio totals to around SEK 1.2 billion, where SEK 400 million is remaining investment. When all is completed, we will add another 91,000 square meters to the portfolio and the yield of those projects is around 7%. Next slide. Regarding our land bank and future development, we are approaching the adoption of new zoning plans for 2 of the areas, namely [indiscernible] in Ängelholm, which the municipality will decide on in September and in Örebro, where the municipality is expected to adopt the plan at the end of Q4. So that's positive for us.

Next slide, please. Looking at our leasing operations, our net leasing came in with plus SEK 63 million for the first 6 months. And for the second quarter, it was plus SEK 16 million. Our WALE is at 6.6 years and the letting ratio is at 96.5%. Next slide, please. And over to the sustainability.

Next slide, again. The environmentally certified area is now 57% and will increase further as projects and new acquisitions will be finalized. The Scope 3 is now decreasing on 12-month rolling basis due to less projects. We continue to maintain a high level of EU taxonomy alignment. For example, our turnover came in at 76%. Produced energy from solar panels reached around 23,000 megawatt hour on rolling 12 months basis. Total installed output on our roofs is now above 71 megawatt. And now over to David for some financial update. Next slide.

Thank you, Jorgen, and good morning to everyone. This slide highlights the continued strength in our underlying earnings with solid year-on-year growth across all key metrics. Rental income, as Jorgen mentioned earlier, is up by 26%, mainly driven by acquisitions. Net operating surplus increased by 31% and profit from property management rose by 32%, reflecting both scalability and cost control, which we expect to continue going forward.

Earnings per share from property management grew by 16% to SEK 13.27, underlining our ability to translate top line growth into shareholder value. While not shown here, our earnings capacity, we should say, implies SEK 26.3 per share on a full year basis, that's 15% above the level we presented a year ago. The model continues to deliver predictable, resilient earnings with operational leverage.

Let's move to the next slide. And this slide breaks down the key drivers behind our rental income growth for the first half of 2025. As I just mentioned, total rental income, which increased by 26% year-over-year. The largest contributor was acquisitions, accounting for more than 22% of that growth. Our completed development projects added 4.5 percentage points, including new facilities in Jönköping and the Gothenburg region, both leased to well-known tenants in retail and foodservice.

Like-for-like rental income rose by 2%, mainly reflecting CPI-linked indexation. Altogether, this underlines our ability to grow through multiple channels, strategic acquisitions, value-adding development and strong day-to-day operations. Next slide, please. And then let's turn to the capital structure. The second quarter brought a noticeable pickup in real estate transactions and increased activity in the credit markets as well.

Toward the end of the quarter, we saw growing optimism, partly fueled by a reallocation of capital flows from the U.S. to Europe. That said, long-term structural uncertainties remain, and we are prepared for potential renewed volatility. At the end of the second quarter, our equity ratio stood at 52%, which we believe is a balanced level that supports strategic flexibility. EPRA NRV per share increased to SEK 428 calculated after reserving SEK 9 per share for dividends, half of which was paid out in cash during the quarter. And this reflects continued value creation even as shareholder returns are being realized as well.

In short, we see a market that's beginning to open up, and we remain our focus on readiness. Passing on to next slide, please. And then let's move on to our financial position. We continue to demonstrate strong financial control with all key metrics well within policy levels. Net debt-to-EBITDA came in at 7.6x, interest coverage at 4x and loan-to-value at 38.6%. These are healthy figures, and they reflect both a solid capital structure and strong underlying cash flow.

Importantly, this gives us significant headroom to our financial covenants and the ability to move on new investments without compromising financial resilience. Next slide, please. Let's take a look then at our debt and liquidity management specifically. We remain our focus on maintaining and securing funding on competitive terms. During the quarter, we updated our MTN program and increased the framework to SEK 8 billion, strengthening our platform for both future growth and refinancing opportunities.

We issued SEK 450 million in secured bonds during the quarter with a 2-year maturity and pricing at STIBOR 3 months plus 83 basis points. In early July, after the end of the second quarter, we also completed a SEK 1 billion senior unsecured bond transaction split across 3- and 5-year maturities. The terms reflect the market's continued confidence in our credit quality. This issuance is not included in the balance sheet of Q2, but was structured to give us additional flexibility for our upcoming investments or refinancing activities.

Our average debt maturity remains solid at 4.8 years. Liquidity is strong with SEK 3.1 billion in cash and liquidity ratio well above 1. We're also generating positive returns from the liquidity with SEK 30 million in interest income during the quarter. Passing on to next slide, please.

We entered Q2 with an upward sloping yield curve again. Markets surprising that the Riksbank, the Swedish one is nearing the end of its cutting cycle. The 2-year swap now trades below the policy rate. Meanwhile, loan rates remain a bit more elevated, reflecting more stable expectations on growth and inflation as well as a return of risk premium in longer maturities.

As of the balance date, 61% of outstanding debt carried fixed interest. Our current and average interest cost of 3.2% broadly reflects prevailing market conditions for a full refinancing of the portfolio, including derivatives. This reflects a timely and balanced interest management approach, though there still remains headroom for further optimization. Next slide, and back to you, Jorgen.

Thank you, David. Our capital deployment is for the first half year divided into acquisitions, SEK 414 million and development, SEK 570 million, and we have, at the same time, divested properties for SEK 98 million. And next slide, please. Property values stayed stable and ended up the period with a positive value change of SEK 174 million, which correlates to 0.4% of the total portfolio before adjustments. The average weighted valuation yield -- exit yield for the portfolio is at 5.9% by the end of the period, and the EPRA net initial yield came in at 5.6%.

And next slide, please. So a couple of takeaways from today. And for the first, Catena closes the half year with solid numbers in a somewhat cautious market. And second, we have presented new acquisitions for almost SEK 2 billion during 2025 so far. So our growth journey continues. And with that said, we would like to open up for Q&A.

[Operator Instructions]

Firstly, I have a question on the net letting. So it was SEK 16 million in the quarter. And first of all, what was the net effect from the renewed Boozt agreement? And also secondly, how is the speed agreement which is together with Platzer treated in the net letting figures in the quarter?

Keivan, first of all, Boozt is a prolongation. So it's no net letting. The joint venture, it has no impact in our net leasing. It's a joint venture. So it's not in our numbers. And what...

Because I think that the Boozt, it was also an extension, which I would assume...

Yes. I mean, yes, those 6,000 square meters, yes, they are there. I thought you meant the renegotiation or the prolongation of another 5 year, sorry.

Yes. Okay. And how much is that in million SEK?

Yes. I mean we don't guide exactly about the rent in that case, but it's fair to assume it's the rent is like the other one, around SEK 800, something SEK 800, SEK 900 per square meter.

And also another question on the share of profit loss from associates at negative SEK 2 million. Could you maybe elaborate on what that includes?

It's from the joint venture, Foodhills, where we have had struggling with keeping all the tenants. So it's basically that joint venture.

Okay. Because I noticed in the earnings capacity that you have included SEK 2 million there. So is this a recurring item going forward as well?

We hope to find some new tenants, which can balance it. It's tough to say, but we hope that there will be no more negative impact during this year.

Okay. And then I also have a question on the SEK 385 million divestment that you made also with Platzer. Could you maybe say something about the yield on this transaction?

The yield was definitely below 5%.

And is this below our book value?

Well, this joint venture -- we don't disclose that. We don't have that as a book value. It doesn't have any impact on the P&L for Catena. It's within this M&A we did with Bockasjö a couple of years ago. So there is no impact for Catena in the P&L.

Okay. And then I have a last question. Do you have any type of indicative volume on the current acquisition pipeline?

No. We are, as you know, all the time looking into new opportunities, but we cannot disclose any numbers.

The next question comes from John Vuong from Van Lanschot Kempen.

You mentioned that the market vacancy continues to grow. It's now at 9%, driven by weak tenant demand and supply still being added. Just looking at the current developments being added and your own discussions with tenants, what's your take on the trend in vacancy in the next 12 months? And maybe as a follow-up on this. How much of this vacancy [Technical Difficulty] is the region? Or let's say, what's the vacancy without this vacancy here?

John, it was very hard to hear you. It's a bad line. I heard something about the vacancy, and we said 9% in total. Can you try to repeat the question? Sorry, we don't hear you, John. Maybe you have to e-mail the question or call us later.

Sorry, can you hear me better like this? Otherwise, I'll take it offline.

Not good enough. Sorry. Try to call me after.

The next question comes from Pierre-Emmanuel Clouard from Jefferies.

So the first one is actually, I think, a follow-up of John's questions. As you will have to renegotiate 9% of your tenant base next year, I was wondering if you already received any early redemption from tenants where you will -- where do you see landing the vacancy by the end of this year and the end of next year?

We don't have any guidance of what we see next year. What we disclosed in the report is our earnings capacity for the coming 12 months. And that one is included all the lease agreements that is valid for the coming 12 months. We are humble for the future with those kind of dynamics that are in the market. So we are doing all we can to keep our customers, but you never know. We can lose some, but that's also a part of the game, where tenants are moving in and moving out. But yes, it's a bit struggling in the market right now.

But just to quantify, how many early redemption requests did you receive so far since the beginning of the year?

We have no redemptions to disclose at this point. And when we have, we will disclose that.

Okay. And my second question is on your like-for-like growth. It will be very useful if you can give us a more precise breakdown on your like-for-like rental growth with the contribution of indexation, but also the contribution of the reversion. And a quick addendum on that is what is the reversionary potential today on the portfolio? And given the fact that the inflation is decelerating rapidly in Sweden, where do you see the like-for-like growth landing by the end of the year?

Yes. Again, Pierre, that's obviously a very relevant question. But from our standpoint, first of all, most of the 2% is index-based. We have some cases where we have been able to raise the rent levels. Going forward, what we have said before and that is the same story going forward is that we expect rent levels to stay stable. And that goes then I'm counting in our portfolio to begin with.

We expect a stable level going forward. We know that there are some cases where we can lift rents, of course. But overall, it's in line with market rents. That's basically the story that you should take into account. Yes. But there is clearly -- what we have seen over the last 12 months is clearly there is a bigger difference between the quality -- overall quality in the market. And that's what we expect will continue to show. We have no specific numbers to end.

Okay. And just to fully understand that maybe you have a better view than I do on the quality of vacancy that is in the market today. But from what I understood, we had -- you had a lot of new deliveries with a brand-new platform that has been delivered over the past 12 months. So the quality of the vacancy is pretty decent, no?

The quality of what has been built is of high quality, yes. I think one of the relevant things to think about going forward is where has it been -- where is it built in what locations? So I think a lot of the things that have been built over the last 3 or 4 years is perhaps not because you expect the demand in that particular location is where the demand is highest.

It's probably because that's where you have been able to source land. So I think what we will see is different supply-demand dynamics for different regions. So some regions will structurally have difficulties going forward, whereas other regions will still where you will still have undersupply basically. So you have to dig deep, you have to know the regions because there will be big varieties in different regions basically.

The next question comes from Fredrik Stensved from ABG Sundal Collier.

I would like to ask a couple of questions on financing costs, if I may. Firstly, can you say anything about sort of where bank margins are either in absolute terms or in change this year or year-over-year?

Yes. Thank you for the question. Well, the bank margins, I would say, is between a 5-year, I would expect to be somewhere between 125% and 140%. And the bond market, as I mentioned and what we disclosed in this report was 135% for 5 years right now.

Yes. That's clear. And on that second point, sort of bond margins currently looking a bit lower than bank margins. You currently have 42% in bank debt. How how much or how high share of bonds would you be comfortable with having?

Yes, that's also a relevant question. Right now, if we isolate to the Swedish market because historically, we have so far used Danish mortgage bonds for our Danish properties. So we are at around 50% if we isolate looking at the Swedish portfolio, and that's where we are pretty comfortable with. But with that said, we are not religious about this.

It's always something that we are assessing basically. What's important at the end of the day is that we have a good control over the spread of maturities that's, first of all, and the most important thing and also in combination with always knowing that we have many options available because at the end of the day, when we have to refinance, it's all about making sure that we have options available. So it's all about financial control, then how many percentage points you have in the capital market or in the bank market is perhaps not the most important question.

There are no more questions from the telco at this time. So I hand the word back to Jorgen and David.

Thank you very much for listening. We wish you all a very nice weekend and a very nice summer and stay in touch. Thank you. Goodbye.

Thank you. Bye.