Vasakronan is the leading property company in Sweden. Its strat

Transcription

Annual Report 2007
Vasakronan is the leading property company in Sweden. Its strategy is to focus on satisfied customers and develop its property portfolio,
which is concentrated to Stockholm, Göteborg, Malmö, Lund and Uppsala.
Vasakronan owns and manages a total of 171 commercial properties with a
combined area of 1,850,000 m2. Vasakronan has Sweden’s largest
project portfolio with development projects valued at approximately
SEK 10 billion. Many of the properties are situated in clusters and the business model offers supplementary services through Vasakronan
Service Partner. Vasakronan has the property industry’s most
satisfied tenants according to the Satisfied Customer Index (NKI).
Contents
Group operations
Vasakronan 2007
Finances in brief
Statement by the President and forecast for 2008
Strategic focus
Targets and goal achievement
Risks and opportunities
Market valuation
Financial risk management and financing
Markets, customers and competitors
Vasakronan’s operations
– Stockholm
– Uppsala
– Göteborg
– Malmö
– Lund
Project development
Services
Environment and social responsibility
Employees
Financial reports
1
1
2
6
6
10
12
14
16
22
24
28
30
34
38
40
42
46
53
The Board of Directors’ administration report encompasses the Group
review and pages 1 and 4–88, excluding the financial reports.
Financial reports
– Accounting and valuation principles
– Income statement, including comments
– Balance sheet, including comments
– Changes in shareholders’ equity, including comments
– Cash-flow statement, including comments
– Vasakronan AB – Parent Company – Notes
Proposed disposition of earnings
Auditor’s report
58
59
62
66
69
70
72
74
88
89
Corporate Governance
Corporate Governance Report
Board of Directors and auditors Group management
90
94
94
Other information
10-year overview Key data
Quarterly data
Definitions – History Financial information
Addresses
List of search terms
96
98
99
100
101
102
103
Group review
Operations
Stockholm and Uppsala
Vasakronan has an attractive property portfolio in central Stockholm, Solna,
Kista and Uppsala. Vasakronan’s high-profile properties include four of the
five Hötorg buildings, “Sweden House” at Kungsträdgården, the Garnisonen block, Kista Science Tower and Kista Entré. Leasing in 2007 was successful and the number of vacancies fell, particularly in central Stockholm
and Kista. Vasakronan also has an extensive development project portfolio in
Stockholm. The portfolio in Uppsala has doubled in size in recent years
through the acquisition of Norrporten’s property portfolio in the city.
Göteborg
Vasakronan’s property portfolio in Göteborg is concentrated to the submarkets of Inom Vallgraven, Gullbergsvass and the Ullevi area. Demand for office
space remains favorable and the number of vacancies has declined. Wellknown, high-profile properties in Göteborg include Lilla Bommen, the police
building at Ullevi and the former Maritime Academy. The first stages of expansion took place to Norra Älvstranden in Hisingen through property acquisitions in 2007. Major projects are underway in the area between Nya and
Gamla Ullevi, in which Vasakronan has invested approximately SEK 1.5 billion
in remodeling and new buildings for the Police Service and a new city court.
Öresund – Malmö and Lund
In Malmö, Vasakronan’s property portfolio is concentrated from the Triangeln
shopping center to Stortorget and in the Inre and Västra Hamnen area. The
best-known, high-profile properties are the Triangeln shopping center, including the Hilton Hotel, and the Bylgia property at Inre Hamnen. Vasakronan has a
large number of retail properties along Södra Förstadsgatan. The vacancy rate is
very low both in Malmö and Lund. In Lund, Vasakronan has properties in central areas and the Brunnshög development area. A new building project worth
approximately SEK 540 M is underway for Sony Ericsson.
Services
A service concept has been developed in an effort to increase tenant satisfaction with Vasakronan as a partner. Vasakronan Service Partner offers costefficient and convenient working environments in conference operations,
janitorial services, restaurant and catering operations, reception and telephony services and telemarketing. Vasakronan Service Partner has experienced substantial growth since the company was formed ten years ago and
has received many prizes as a growth company.
Group, total >>>>>>
Premises floor space 1,850,000 m2
Revenues
Other 10%
Operating surplus
Offices 81%
Retail 9%
SEK 1,887 M
Other 12%
Offices 73%
SEK 1,266 M
Market
RENTAL LEVELS
VACANCY RATE
2007 Trend 2008
2007 Trend 2008
RENTAL LEVELS
VACANCY RATE
2007 Trend 2008
2007 Trend 2008
RENTAL LEVELS
VACANCY RATE
2007 Trend 2008
2007 Trend 2008
Vasakronan’s rental revenues in Stockholm and
Uppsala averaged SEK 1,697/m2 and the average operating surplus was SEK 1,133/m2. Property prices in Stockholm are the highest in
Sweden.
SEK 328 M
Retail 15%
Rental revenues in Göteborg averaged SEK
1,621/m2 and the average operating surplus
was SEK 1,257/m2.
SEK 482 M
Other 11%
Offices 66%
Retail 23%
SEK 338 M
In Malmö and Lund, Vasakronan’s rental revenues averaged SEK 1,329/m2 and the average
operating surplus was SEK 867/m2.
SEK 540 M
REVENUES PER SERVICE PLATFORM
Other 21%
Lilla Bommen
8%
Westmanska
Palatset 8%
Kista Science
Tower 18%
SEK 4 M1)
Kista Entré 21%
REVENUES
2007 Trend 2008
Garnisonen 24%
Vasakronan Service Partner reaches slightly
more than 70% of Vasakronan’s customers in
Stockholm, about 40% of customers in Göteborg and slightly less than 25% of customers in
Malmö. Revenues in 2007 rose for the tenth
consecutive year by approximately 5%.
SEK 147 M
SEK 2,874 M2)
SEK 1,918 M2)
1) Earnings
2) after depreciation
Group total after Group eliminations
Vasakronan 2007 – in two minutes
n The market for commercial premises in 2007 was characterized by a
declining number of vacancies and rising rents. The yield requirements
remain at a relatively low level. Employment continued to increase in
Stockholm, Göteborg, Malmö, Uppsala and Lund.
n Vasakronan has consistently pursued a growth strategy. In 2007,
rental revenues rose, the number of vacancies declined and the operating
surplus continued to improve.
n The market value of the properties rose from SEK 38.1 billion to SEK
45.2 billion as a result of higher market rent levels, lower yield requirements and investments.
n Vasakronan has expanded its project portfolio in recent years and in
December 2007, the portfolio was worth SEK 3,145 M (2,841). Investments rose to SEK 1,667 M (1,047).
n Vasakronan has the most satisfied customers in the property
industry and committed employees who systematically strive to continue
to build up long-term customer loyalty.
n Vasakronan’s objective is to reduce its impact on the environment and to be at the forefront of sustainable development. Consumption of
heating energy in the company’s premises was 25% lower than the Swedish average for premises. Vasakronan is a climate-neutral property company in 2008.
n In 2007, Vasakronan generated the highest earnings in its history
due to a competent organization, increased rental revenues, lower vacancy
rates and the unrealized change in value in the property portfolio. The
company has a strong financial position.
n The outlook for 2008 is that income after financial items before changes
in value and excluding sales of building rights is expected to remain at the
same high level as in 2007.
Finances in brief
FINANCIAL DATA
SEK M
Rental revenues Income after financial items
Income after tax
Interest-coverage ratio, multiple
Cash flow
Market value, properties
Equity/assets ratio
Vacancy rate, rent loss, % RENTAL REVENUES
2007
2006
2005
2,874
1,605
4,650
5,5
1,567
45,236
55
4
2,681
1,333
3,409
3,5
733
38,122
55
7
2,666
1,271
1,681
3,6
1,127
32,827
50
8
PER GEOGRAPHIC MARKET
Malmö
15%
Lund
3%
Stockholm
60%
Other 6%
Retail 1%
Garage 4%
Office 76%
Residential 13%
Göteborg
16%
Uppsala
6%
Vasakronan’s rental revenue is concentrated to
Sweden’s growth regions.
Vasa kronan · ann u a l report 2007
PER TYPE OF PREMISES
Vasakronan has streamlined its property holdings
to consist of offices and retail stores in dense
urban areas.
Statement by the President and forecast for 2008
Strongest ever operating income
In 2007, Vasakronan generated the strongest
earnings in its history as a result of the company’s
consistent strategy of creating an attractive property portfolio in Sweden’s five most expansive
large cities, with satisfied customers and a strong
brand. The long-term objective is to own, manage
and supplement our portfolio.
The property portfolio contains a number of
the market’s most attractive and modern properties in prime locations, and is supplemented with
an extensive project development portfolio. These
holdings combined provide Vasakronan with a
competitive platform for growth and continued
favorable yield.
Capital-intensive property operations must be
based on sustainability and minimizing risk. Vasakronan has chosen to conduct activities in markets
with the greatest growth potential and valuebased leverage over time. Viewed over the course
of a business cycle, this involves significant
changes in value and in the long term, results in
higher yield. The portfolio in Stockholm is somewhat more volatile but is balanced by the stable
earnings in Göteborg, Malmö, Uppsala and Lund.
The trend in the Swedish economy has been
positive for several years, but it was not until
2006–2007 that a tangible improvement in the
office sector was noted, particularly regarding the
growth markets in which Vasakronan operates.
Increased demand for premises, combined with a
strong internal leasing organization and customer
orientation, have led to the continuation of a rising leasing rate, the lowest vacancies in the market and increasing revenues. This has allowed
rental levels from signed leases to increase, which
in turn has contributed to organic growth. Gradually decreasing operating expenses, an active
financial operation and a marginal tax burden
have resulted in a lower total level of costs and the
strongest earnings in the company’s history.
The property market was strong in 2007. The
investor market demands properties in attractive
locations, which has led to declining yield requirements in Vasakronan’s submarkets. This has
entailed a positive value trend in the portfolio
amounting to 12.5%, which is also underpinned
by a positive rent trend.
On the State’s sales list
As soon as the new Swedish government took
office in October 2006, it was announced that
Vasakronan was one of the companies that were
intended to be sold during the Government’s
period in office. This issue was prepared in spring
2007 and Parliament made a decision on June 20,
2007. Detailed analyses were performed in
autumn 2007 and winter 2008 that will provide a
basis for the owner’s forthcoming decision to continue the sales process. A schedule for this work
has not been established. The advisors in this process are JP Morgan, Catella, Cederquist Advokatbyrå and Öhrlings PricewaterhouseCoopers.
The analyses confirm that Vasakronan is a
strong company with a competitive property portfolio, uniquely linked to a well-developed range of
services, leading market positions and a skilled
organization.
However, being a sales object for a prolonged
period of time presents major challenges. Apart
from an increased workload for many parts of the
organization, substantial efforts are required to
inform and motivate employees during a time in
which speculation is rife in the market.
Critical success factors
Vasakronan’s aim of being a successful property
manager in a competitive market, one characterized by short leases in international terms, requires
consistent strategies and a focus on critical success
factors.
■ Customers: By focusing on the rental market,
customer relations represents the most critical success factor. A short lease relationship is often unprofitable since changing tenants is costly. Vasakronan
strives to establish long-term relationships by securing customer satisfaction. A skilled operations and
management organization works highly efficiently
by following a well-defined customer-care process.
The focus on the company’s own service operations
provides our customers with the opportunity to purchase supplementary related services for convenient
use of our premises. Vasakronan currently has the
market’s most satisfied customers, the lowest number of vacancies and a low tenant turnover rate.
■ Product: The individual property and premise is
the product we provide to our customers and to
achieve success we have to offer a portfolio of
well-developed properties in prime locations. The
foundation is to continuously be a strong force in
the rental market and specialize in offering attractive workplaces rather than merely premises.
Maintaining a high level of preparedness for making adaptations and flexible solutions is a necessary competitive factor when customer requirements change. The aim is to profitably create
properties in clusters that generate high efficiency,
service and expansion opportunities for our customers. At the same time, we are well aware that
customers are reluctant to relocate from a geographical area where they are already established.
■ Employees: Vasakronan conducts knowledgeintensive service operations. All customer-related
operations are conducted by the company based
on the philosophy that customer relations should
not be outsourced. It is a success factor that
employees are motivated, involved, skilled and
proud. A pleasant working environment, skills
development and an accepted foundation of values, based on open communication, have resulted
in 94% of our employees feeling involved in the
company’s goals and enjoying working at
Vasakronan.
■ Strong image: A strong image is key to Vasa
kronan’s relations with its customers and to its
ability to identify new customers. Each lease is an
important transaction for all parties involved and
has the character of a rarely purchased commodity. A strong image has an important role to play in
such a context, not only for decision-makers, but
also for all of the 65,000 individuals who work or
will work at Vasakronan’s premises. Our aim is to
build up long-term loyalty and today the Vasakronan brand is the property market’s best-known
brand. This has generated results among existing
and potential customers, pride and motivation in
the organization and made the company highly
attractive among universities and colleges.
Vasakronan · annual report 2007
■ Financial strength: Growth is largely based on
the possibility of expanding through investments
in acquisitions and project development. These
opportunities are created through a well-functioning base operation with a secure cash flow, a
strong balance sheet with the potential for raising
loans and competent financial operations. Vasa
kronan has reported a favorable earnings trend
and has a strong financial platform. This permits
short fixed-interest terms and creates an effective
loan portfolio with one of the market’s lowest
average interest rates on borrowing.
Focus on sustainable development
Working with sustainable development has been
one of Vasakronan’s basic values since the company was founded. The goal is to stimulate both
increased profitability and act responsibly from a
social perspective. The increasing insight into the
climate issue in recent years, and intensifying
demands for responsible companies from customers and stakeholders are obviously key drivers.
More stringent legislation, rising energy prices and
increased insurance premiums are some of the
factors that have a specific impact on Vasakronan’s
operations. Properties account for 36–40% of the
earth’s energy consumption and offer the quickest
and simplest potential for improvement.
Vasakronan began its work in 1995 by training
all personnel in the fundamental conditions produced by The Natural Step project. In 2001,
Vasakronan became the first property company to
receive ISO 14001 environmental management
systems certification. As early as 2004, Vasakronan
participated in founding the BLICC, Business
Leaders’ Initiative on Climate Change, a network
that seeks to reduce impact on the climate.
Vasakronan’s specific environmental activities
are focused on enhancing energy efficiency and
making active choices in sources of energy and
construction materials. An overriding goal is to
reduce the environmental impact from energy use.
In 2007, we succeeded in reducing emissions of
carbon dioxide by more than 40% through more
efficient heating, phasing out oil as a source of
energy and partly sourcing climate-neutral district
Vas akronan · annual report 2 007
heating. Our operations still generate some carbon
dioxide emissions, but by investing in compensatory measures, Vasakronan has become one of the
first property companies in the world to be named
climate-neutral. However, the aim is for continued
reduction in the emissions from the operations.
Environmental issues are high on the company’s agenda and comprise an important criterion
in the business decision-making process.
growth in rental revenues and operating surplus.
However, increases in operating surplus will be
charged with higher interest expenses due to
higher interest rates in the loan portfolio.
Vasakronan’s forecast for 2008 is that income
after financial items, before changes in value and
excluding gains/losses attributable to the sale of
building rights, is expected to amount to SEK
1,500 M (1,477). Accordingly, Vasakronan will
continue to report strong earnings in 2008.
Assessment and forecast for 2008
The economic trend internationally and in Sweden
is more difficult to assess than previously. The full
impact of the financial turmoil, primarily related to
the mortgage crisis in the US, cannot yet be
assessed. The price of risk has risen and can be seen
in the higher credit institutes’ interest margins and a
more restrictive credit market. The prices of properties are falling in the US and UK, while they have
remained stable in Sweden.
Sweden is expected to experience better growth
than in many competing countries in the EU and
US, although not at the level that was previously
anticipated. Nevertheless, employment in the office
sector is expected to rise in 2008 albeit at a lower
pace than in 2007. This will result in a certain
reduction in vacancies in the market and
continued increases in rents for properties in
prime locations.
The property market is more divided
than ever before. Demand remains high
for attractive properties in prime locations, while less attractive properties are
more difficult to sell. Yield requirements
may rise in 2008, which should be offset by
a strong rental market and weaker trend in
interest rates than previously forecast.
Vasakronan’s project volumes will rise to
record high levels in 2008, and investments will
reach the same levels. The project portfolio
contains mostly fully leased properties to
strong counterparties based on longterm rental contracts. Vasakronan will
gradually commence projects in 20082010 with an annual rental volume of
SEK 400 M that will result in continued
Stockholm, February 15, 2008
Håkan Bryngelson
Attractive properties managed by a responsive and
competent organization have created satisfied
customers. A consistent strategy has resulted in a
focused property portfolio refined to offices and
retail premises.
Strategic focus
As a property company, Vasakronan’s assignment from its owner is to achieve the highest
possible total return on shareholders’ equity.
Vision
Vasakronan shall be Sweden’s leading property
company – as an investment proposition, landlord and employer.
As an investment proposition,
Vasakronan must
• fulfill the conditions that apply for a reputable listed company, and be regarded as the
best investment among Swedish property
companies.
As a landlord, Vasakronan must
• be recognized as the most competent
property owner.
As an employer, Vasakronan must
• offer its employees the industry’s best development opportunities and the best working
environment.
Business concept
Vasakronan offers attractive office premises with
customized services in major urban regions in
Sweden in order to ensure customer satisfaction
and loyalty.
Return on shareholders’ equity
Financial targets and goal achievement
Vasakronan’s financial targets are designed to provide incentives for long-term growth with limited
financial risk. The goals are a combination of:
• high yield
• high dividend capacity
• high growth capacity
• financial stability
The return on shareholders’ equity should, over
the long term, exceed risk-free interest rates by
at least 4 percentage points.
The risk-free interest rate is defined as a fiveyear government bond rate. The yield requirement is not a fixed target, but is modified in light
of changes in inflation and interest rates. The
yield goal applies across a full economic cycle.
For 2007, the yield requirement was 8.1%,
but the actual yield amounted to 19.3%. During
the most recent five-year period, Vasakronan’s
yield has amounted to 10.5% on average, compared with a yield requirement of 8.2%.
return on shareholders’ Equity
20
%
15
10
5
0
–5
031)
04
05
06
07
Outcome
Target risk-free interest plus 4
percentage points2)
The yield in the five-year period exceeded the target.
1) Return on adjusted shareholders’ equity for 2003.
2) Target 2003–2005: risk-free interest rate plus 5 percentage points.
Va sakronan · ann ual report 2007
Strategy
• offer attractive premises and services that
reinforce customer relationships and reach
new customers as a result of proactive
market activities and communication,
• use its own personnel for property services in
order to maintain closer contact with
customers,
• reinforce the brand to ensure that Vasa
kronan is the customer’s first choice,
• develop and streamline the portfolio to focus
on markets offering growth and liquidity,
in order to ensure greater efficiency and
profitability,
• endeavor to achieve clusters in the portfolio
consolidation process, in order to improve
efficiency and service levels in property and
service operations,
• work for long-term sustainable development,
through growth, assuming social responsibility and reducing climate impact,
• establish an open and non-discriminatory
organizational structure that utilizes the
diversity of employees and provides a basis
for the development of skilled and committed employees.
Dividend
Interest-coverage ratio
Equity/assets ratio
The dividend shall correspond to 50% of income
after financial items and realized changes in
value, less current tax. However, the annual decision regarding the dividend shall take into consideration implementation of the company’s
strategy, the company’s financial position and
other financial goals.
The dividend target has been set so that
shareholders receive a relatively high proportion
of the dividend, while simultaneously providing
the opportunity to continue to expand Vasakronan through investment.
A dividend of SEK 791 M (698) is proposed
for 2007, which is in line with the dividend policy.
Vasakronan’s target is an interest-coverage ratio
corresponding to a minimum multiple of 2.0.
The interest coverage requirement reflects
the fact that interest expense is one of the largest cost items for Vasakronan. In order to absorb
changes in the interest rate, it is essential to
achieve an income that covers current interest
expenses with a certain margin.
The interest-coverage ratio was 5.5 in 2007.
The target is an equity/assets ratio of at least
35% in the long term.
The equity/assets target is set in the light of
the capital-intensive nature of property management operations. Financial strength is required to
cope with substantial investment requirements
and the cyclical nature of the industry.
At December 31, 2007, the equity/assets
ratio was 55%.
dividend
Interest-coverage ratio
Vasakronan has applied a growth strategy and
streamlined its property portfolio to comprise
commercial properties in major urban regions.
This strategy has focused on securing customer
satisfaction through close dialogue with customers, customized services and a strong brand.
Vasakronan’s strategy is to:
• be the market leader in attractive submarkets
for commercial premises in Stockholm, Göteborg, Malmö, Lund and Uppsala,
800
SEK M
6
700
Multiple
Equity/assets ratio
60
5
50
4
40
3
30
2
20
1
10
%
600
500
400
300
200
100
0
03
04
05
06
07
proposal
Outcome
Special dividend. Target 50% of
income after financial items and
realized changes in value after
deduction of current tax1)
Proposed dividend 2007 corresponds to dividend policy.
1) Target 2003–2005: 3% of adjusted shareholders’
equity (but not more than 30% of income after tax).
0
03
04
05
06
07
Outcome
Target 2.0 multiple
For the entire five-year period, the interest-coverage ratio
has exceeded the long-term target of a multiple of 2.
0
031)
04
05
06
07
Outcome
Target 35%
The long-term equity/assets ratio must be at least 35%
in order to cover investments and cope with a cyclical
premises market.
1) Adjusted equity/assets ratio for 2003.
Non-financial targets and goal
achievement
Vasakronan as the leading property company in
Sweden. The principal stakeholders should also
wish to maintain good relations and a developing cooperation with the company.
Vasakronan surveys customer, employee and
stakeholder attitudes toward Vasakronan annually. These surveys are undertaken to develop the
company and inspire even stronger efforts.
As a landlord
As an employer
As a property company
Vasakronan is focused intently on creating satisfied and loyal customers. The target is that at
least 90% of customers would consider leasing
property from Vasakronan again, and that at
least 60% of those customers would definitely
consider doing so.
Vasakronan’s customer survey for 2007 indicated a customer loyalty rating of 89% – an
increase of 1 percentage point. The “definite”
loyalty rating rose from 65% to 69%. This is the
highest percentage that has ever been recorded
in Vasakronan’s customer survey.
Availability, service-mindedness and image
are parameters that received particularly high
ratings from customers.
Committed employees result in more satisfied
customers and increased profitability. Vasakronan’s objective is that at least 90% of its employees shall feel that their work is important in
attaining the company’s goals, and that at least
60% of them definitely feel this. The scores
achieved in 2007 were 94%, corresponding to
an increase of 2 percentage points. The percentage of employees who said that they definitely
feel that their work is important in attaining the
company’s goals rose by a full 9% to 64%.
Despite the uncertainty associated with a
sales process, Vasakronan has highly committed
and motivated employees. Additional efforts
have been made to very actively provide internal
information.
Vasakronan’s target is that at least 90% of its
stakeholders in the political sphere, the capital
market and the mass media are familiar with
Vasakronan, and that at least 60% of them are
very well acquainted with the company. Surveys
of these three stakeholder groups are conducted
on an annual basis to provide guidance in determining what aspects of company operations
should be improved.
Awareness in the target groups is high. The
scores achieved in 2007 were 95% and 65%,
respectively. This is the result of an active effort
to build a strong brand, maintain an ongoing
dialogue with stakeholders and provide transparency. Major publicity surrounding the sale of
Vasakronan was generated in 2007, which led to
widespread coverage of the company.
CUSTOMERS
Would you consider leasing again
from Vasakronan?
EMPLOYEES
Do you feel that your work is important
in achieving Vasakronan’s goals?
CAPITAL MARKET, MEDIA,
POLITICIANS
How high is your awareness of Vasakronan?
Vasakronan’s non-financial goal is that the principal stakeholders (customers, employees, capital market, media and politicians) should regard
100
%
100
100
80
80
80
60
60
60
40
40
40
20
20
20
0
03
04
05
06
07
Yes, definitely
Yes
Targets 60% and 90% respectively
Loyalty to Vasakronan is affected, for example, by
the service-mindedness demonstrated by Vasakronan’s employees. Vasakronan also came top of the
property industry’s Satisfied Customer Index.
%
0
03
04
05
06
07
Yes, definitely
Yes
Customer focus within the organization is the most
important parameter for creating more satisfied customers. Vasakronan has very strong commitment
among its employees despite the uncertainty associated with the sales process.
0
%
03
04
05
06
07
Very high
High
Awareness of Vasakronan is high in the capital market, the media and among politicians. The percentage of stakeholders who are highly familiar with
the company declined slightly but was well above
the established target.
Vasakronan has the property industry’s most
satisfied tenants according to the Satisfied
Customer Index (NKI).
Risk and opportunities
Vasakronan has chosen a strategy of refining its
property portfolio to focus on commercial properties in major urban regions.
The commercial-property business is long
term, and demand for premises is affected by
economic growth and employment trends.
Property management involves long-term
strategic decisions, with limited opportunities to
influence results in the short term.
Operative risks arise with respect to Vasakronan’s operations. Vasakronan works actively to
reduce these risks by standardizing its way of
working through the aid of process descriptions
that include different control points.
The property sector is affected by decisions at
the political level. This can involve such taxes as
property taxes and energy taxes as well as other
regulations.
Value change of the property portfolio
Rental revenues
Vacancy rate
Value change of property is often the largest single profit/loss item, but since this profit/loss is
unrealized, it does not have an immediate effect
on cash flow. Value change is primarily influenced by the development of external factors
such as market rents and yield requirements, as
well as property-specific factors such as changes
in vacancy rates and investments.
A concentration on urban areas generates a
high total yield and access to a liquid property
market. Individual years may be characterized by
wide fluctuations in value trends, which present
opportunities for advantageous property transactions.
An unrealized value change of 1% at January
1, 2008 would have an effect on income for the
year of SEK 325 M after tax.
Vasakronan’s strategy is to have an evenly distributed maturity structure for its leasing portfolio,
entailing that approximately 10–20% of leases
be renegotiated each year. Such a maturity structure provides stability in the cash flow but also
entails a lag in profit/loss with respect to changes
in market rents. Because of the relatively long
leasing terms that apply, there is a certain delay in
the effect that a declining market has on revenues. With a rising market, it takes a longer time
for rises in market rents to have an impact.
Leases have a price-index clause that provides
for rent adjustment if the consumer price index
has changed since the previous updating of the
index.
Most renegotiated leases take effect in the
fourth quarter. In 2008, 15% of the leasing portfolio will be renegotiated during the year.
A change of 10% in the market rent at January 1, 2008 would have an impact of SEK 12 M
on income for 2008.
A change in the vacancy rate has a relatively
rapid impact on revenues. The vacancy rate corresponded to 4% of rental revenues at December 31, 2007, a rental loss of SEK 134 M.
The risk, and hence the cost, of vacancies is
reduced if Vasakronan keeps customers satisfied
by offering attractive premises and services.
A 1% change in the financial vacancy rate
at January 1, 2008 would have an impact of
SEK 29 M on income for 2008.
15
%
Growth is the decisive factor
Vasakronan has concentrated its operations
on major urban areas where long-term growth
rates tend to be higher than in other parts of
Sweden.
In order to reduce risk in the property portfolio, Vasakronan employs a strategy in which
holdings in the various submarkets are analyzed
in terms of their risk, correlation and yield.
The demand for office premises is primarily determined by employment trends in the office sector
related to GDP growth and – broken down in
regional terms – to Gross Regional Product (GRP).
2 000
SEK/m2
12
12
%
10
1 500
9
8
6
1 000
6
3
4
0
500
2
–3
–6
03
04
05
06
07
Value change increased due to increased market rent
levels and lowered yield requirements.
10
0
03
04
05
06
07
Rental revenues are increasing as a result of reduced
vacancies and higher rents. The average rental revenue increased to SEK 1,538/m2.
0
03
04
05
06
07
The vacancy rate continued to decline as a
result of new leases.
Sensitivity analysis (SEK M)
Annual impact on net profit of a change in Value change, properties1)
Value change, derivative attributable
to change in interest rates1)
Interest rates on borrowing
Vacancy rate, rent Operating and maintenance expenses Rental revenues 1) No
2008
±1 percentage point
325
±1%
±1%
51
72
29
7
1
cash-flow effect
Changes in values of properties and interest rates, which impact both interest rates on
borrowing and the change in value of financial derivatives, have the most substantial
effects on Vasakronan’s earnings
Tenant structure
Central government authorities
account for 32% of rental revenues. Rental flows from central
government tenants are associated with significantly lower risk
than rental flows from other tenants. Government tenants normally have longer leases than
other tenants, and there are no
credit losses.
Vasakronan’s credit losses
amounted to SEK 3 M in 2007.
Vasakronan’s largest tenant is
the Swedish Police Service, which
accounts for 7% of rental revenues. The ten largest tenants represent 30% of rental revenues.
The renegotiation risk associated
with large tenants is reduced
because the terms of Vasakronan’s
leases with these tenants vary.
Operating and
maintenance expenses
The cost of operations and maintenance tends to follow the national
wage and salary trend and is difficult to influence in the short term,
irrespective of the vacancy situation. Energy costs have risen significantly in recent years and are
included in the rent in about half
of Vasakronan’s leases. In such
cases, Vasakronan bears the risk of
changes in energy prices. The
terms of Vasakronan’s contracts
with energy companies vary.
A 1% change in operating and
maintenance expenses at January
1, 2008 would have an impact of
SEK 7 M on income for 2008.
1,000
SEK M
Private
tenants
68%
%
1,000
600
SEK/m2
800
4
600
3
0
400
2
200
Va sakronan · ann u a l report 2007
In cases where major and specially
adapted investments have been
made on behalf of a tenant, a
lease agreement that covers repayment of the investment is required.
Investments can be reduced or
postponed to offset a decline in
earnings. Major investments in
new constructions or remodeling
normally involve a procurement
process and an extended implementation period.
A 10% change in investments
at January 1, 2008 would have an
impact of SEK 300 M on cash flow
for 2008.
5
400
Central government tenants represent 32% of
rental revenues.
Investments
Vasakronan’s interest expenses are affected by prevailing interest rates and
the interest margin – the credit spread
– paid by the Group. In 2007, the
market rate rose, while the credit
spread for borrowing continued to remain stable. A change in interest rates
has a delayed effect on Vasakronan
since fixed-interest terms in the loan
portfolio vary. The average remaining
fixed-interest term in the loan portfolio was 1.0 year at year-end 2007.
An increase of interest rates by
1 percentage point at January 1,
2008, given the current borrowing
volume and average interest terms,
would increase the Group’s interest
expenses for 2008 by SEK 72 M. The
same rise in interest rates would
increase unrealized gains on financial
derivatives by SEK 51 M.
6
800
Central
government
tenants
32%
Interest expenses
200
1
03
04
05
06
07
Operation and maintenance expenses continued to decline.
0
03
04
05
06
07
Changes in the market interest rates affect the
average interest rate with delayed effect due
to the structure of fixed-interest terms in
Vasakronan’s loan portfolio.
0
03
04
05
06
07
Investments increased due to a larger project
portfolio.
11
Market valuation
Market valuation 2007
APPRAISED MARKET VALUE
SEK M
Contractual
yearly rent1)
Central Stockholm
1,297
Greater Stockholm 462
Uppsala
176
Göteborg
510
Malmö
444
Lund
153
Total3,042
Operating
surplus2)
Present
direct yield,
market value, %3)
966
345
129
396
300
120
2,256
4,7
5,1
5,7
5,4
5,1
6,7
5,0
Market
value
20,693
6,787
2,255
7,872
5,833
1,796
45,236
1) Rental
contracts per January 1, 2008 recalculated for full-year.
surplus recalculated with rental contracts per January 1, 2008. Expenses for property management are not included.
3) Operating surplus recalculated with rental contracts per January 1, 2008 in relation to market value.
2) Operating
MARKET VALUES FOR COMPARABLE PROPERTIES
SEK M
Stockholm
Uppsala
Göteborg
Malmö
Lund
Total
2007
2006
Change
%
Invested
2007
Net
change, %
26,479
22,928
3,551
2,148
1,912
236
7,646
6,205
1,441
5,688
5,175
513
1,796
1,272
524
43,75737,4926,265
15
12
23
10
41
17
–459
–83
–477
–135
–337
–1,491
13
8
16
7
15
13
SENSITIVITY ANALYSIS, MARKET VALUE
Value-influencing factors Direct yield requirement Direct yield requirement Market rent Market rent Operating and maintenance expenses Operating and maintenance expenses Long-term vacancy rate Long-term vacancy rate Effect on value, % Effect on value, SEK M
+0.25 percentage point
–0.25 percentage point
+50 kr/m2
–50 kr/m2
+25 kr/m2
–25 kr/m2
+1 percentage point
–1 percentage point
–4.5
5.0
3.2
–3.2 –1.6 1.6 –1.3
–1,805
1,988
1,474
–1,474
–737
737
–570
1.3
570
The appraised value of properties, including projects in progress and building rights, amounted to
SEK 45,236 M (38,122), an increase of SEK 7,114
M. Vasakronan’s properties have been valued individually. However, the market value of the portfolio is deemed to exceed the sum of the individual
properties since the market generally values portfolios higher than individual properties.
Adjusted for purchase and sale of properties as
well as for investments, unrealized value change
amounted to SEK 4,750 M, an increase of 12.5%.
Approximately 50% of this value increase is due to
higher market rent levels and about 40% is due to
reduced yield requirements. In addition, the
vacancy rate and investment gains in projects were
lower. The market value of certain potential building rights for which no detailed plans exist, that
were not previously assigned any value, entailed
an unrealized value change of SEK 312 M.
Vasakronan’s ten largest property values
include Garnisonen in Stockholm, Kista Science
Tower, Kista Entré and Hästskon 12 at Sergels Torg
in Stockholm, as well as Lilla Bommen and Nord
staden 8:27, which is part of the Nordstan shopping center in Göteborg. The ten largest property
values represent 37% of the total value of the
property portfolio.
MARKET VALUE
SEK M
2007
2006
2005
Market value at Jan. 1 Investments Properties purchased Properties sold
Unrealized value change 38,122 32,827 32,895
1,626 1,021
597
872 1,107
–
–134
–86 –1,523
4,750 3,253
858
Market value at Dec. 31
45,23638,12232,827
Independent appraisal twice a year
An independent appraisal of the entire property
portfolio is performed at mid-year and year-end by
DTZ Sweden and Newsec Advice. At the end of
the first and third quarters, internal updating of
the aforementioned independent appraisals is carried out. Market value is affected by property-specific value-influencing occurrences such as new
and renewed leases, vacation of properties and
investments. Market value is also impacted by
changes in market rent levels, yield, vacancies and
investment gains in projects.
In order to ensure continuity in this work, all
properties have been appraised since 1997 in
accordance with the same fundamental principles.
Before this time, the total property portfolio was
appraised in connection with the purchase of
properties from the State in 1993.
12
valued as a project from the day on which a rental
contract is signed and/or a project has been
approved within Vasakronan. Such an approved
project is valued using a cash-flow statement in
which the future cash flow is discounted and
deductions are made for investments. A condition
for the implementation of the project is that the
investment calculation meets Vasakronan’s yield
requirement or generates investment gains in
excess of this.
All property valuations are the result of the
appraiser’s judgment at any given time and are,
accordingly, prone to some uncertainty. This
uncertainty is expressed as an interval of +/– 5 to
10% for individual properties. The uncertainty
interval is deemed to be lower for the entire market value of the entire portfolio.
Assessment assumptions, weighted average
Assumed inflation
2.0%
Cost of capital for cash flow 7.0%
Cost of capital for residual value
7.3%
Yield requirement, residual value 5.3%
Long-term vacancy rate
4.1%
Operating and maintenance expense, year 1 SEK 313/m2
Investments, year 1 SEK 1,115/m2
Market rent (at zero vacancies) SEK 1,858/m2
MARKET RENTS,
OFFICES IN PRIME LOCATIONS
SEK/m2
4,500
4,000
3,500
3,000
2,500
2,000
Source: Jones Lang LaSalle
The value of a property is calculated as the sum of
the present value of the operating surplus less
remaining investments during the calculation
period, and the present market value in the event
of a hypothetical sale at the end of the calculation
period (the so-called “residual value”). The calculation period is normally 5–10 years but can in certain cases be as many as 25 years, depending on
the contract situation.
Rental revenues are calculated on the basis of
applicable leasing agreements to the end of the
terms of such agreements, whereupon a judgment
is made as to whether the contract will be extended
under the same terms, extended under modified
terms, or terminated with the result that a vacancy
is created. Premises that are unoccupied at the start
of a calculation period are assigned an assessed
leasing term and an assessed market rent. A longterm vacancy rate has been assigned to the entire
contract portfolio on the basis of an assessment of
each individual property. Cash flow from operational and maintenance expenses is calculated
partly on the basis of Vasakronan’s reported financial results for the years 2005, 2006 and the period
up to and including September 2007 and partly on
the basis of knowledge with regard to comparable
properties. Assessments have been made in regard
to properties’ uses, age and maintenance statuses.
The basis for future investment needs is based on
Vasakronan’s budgeted investments.
For calculation of residual value, a yield requirement, based on analyses of completed transactions and knowledge of market developments,
has been assigned to the individual properties’
operating surpluses at the end of the calculation
period. Market value assessments are made in
accordance with guidelines produced by Svensk
Fastighetsindex (Swedish property index).
The external appraisal has encompassed all
properties. The market valuation includes the
appraised values of detailed plan building rights
and in certain cases the values of building rights
for which no detailed plans exist. The market value
of building rights for which no detailed plans exist
depends on such factors as how far advanced the
planning progress is. A legally binding detailed
plan in the immediate future can generate a
higher value of land than at an early stage of the
planning process. Building rights are often valued
by applying a locality comparison, meaning that
the market value is assessed based on a comparison of prices for similar building rights.
Construction projects are usually commenced
when rental contracts have been secured for all or
parts of a project. As a result, the building right is
1,500
1,000
500
0
03
04
05
Stockholm
Göteborg
Malmö
06
07
Uppsala
Lund includes IDEON
Kista
The diagram shows Jones Lang LaSalle’s assessment of market rents for offices in prime locations.
Basis for valuations
The basis for DTZ and Newsec is the information
provided by Vasakronan concerning leases, vacant
premises, operating and maintenance expenses
and planned investments.
Data from the appraisal companies’ market
databases formed the basis for assessing market
rents, normal operating and maintenance
expenses, costs of capital for the property market,
yield requirements and the supply and demand situation in the rental market. Locality comparisons
were also made.
All properties were inspected. Re-inspections
then take place annually for one-third of the properties. Yearly inspections are performed of properties where major remodeling and tenant adaptations were made.
The following yield requirements have been
applied for appraisal purposes:
YIELD REQUIREMENTS,
MODERN OFFICE SPACE IN PRIME LOCATIONS
%
9
8
7
6
5
4
3
2
1
0
Central Stockholm Greater Stockholm Uppsala Göteborg Malmö Lund 4.25%–5.75%
5.25%–6.00%
5.25%–6.25%
4.60%–5.80%
5.10%–6.50%
5.40%–6.50%
Appraisal method
03
04
Stockholm
Göteborg
Malmö
05
06
07
Uppsala
Lund includes IDEON
Kista
The diagram shows Jones Lang LaSalle’s assessment of yield requirements for modern office
space in prime locations.
13
Financial risk management and financing
Controlled risk in financial operations
Financing risk
Interest-rate risk
The goal of Vasakronan’s financial operations is to
ensure that financing requirements be met at the
lowest possible cost within the framework of the
Group’s finance policy.
Always having access to financing under varying market conditions is of strategic importance to
Vasakronan. Interest expenses is the Group’s largest cost item and, consequently, financial risk
management is vital.
Financing risk refers to the risk that borrowing will
become significantly more expensive, or even
impossible. Vasakronan’s borrowing is conducted
in capital markets via bond and commercial paper
programs as well as in bank markets via bilateral
bank loans. Having diversified borrowing reduces
financing risk since the specific competitive advantages of the different markets can be utilized in a
variety of market situations. Vasakronan’s loan
agreements include clauses that entitle the lender
to terminate the loan for payment if the State’s
holding in the company falls below 51%.
Vasakronan’s policy for limiting this financing
risk involves ensuring that the average remaining
duration of interest-bearing liabilities – the
remaining period to maturity – is not less than two
years and does not exceed 4 years. Not more than
50% of the total loan volume may reach maturity
during the ensuing 12-month period. Further limitation of financing risk is achieved by ensuring
that the total of committed credit facilities and
cash and cash equivalents is not less than 100% of
loans falling due within 12 months. The average
remaining terms of committed credit facilities may
not be less than one year. At year-end, the average
remaining period to maturity was 2.2 years and
34% of loan volume would reach maturity during
the ensuing 12-month period. The sum of committed credit facilities and cash and cash equivalents represented 121% of loans falling due within
the next 12 months. The average remaining term
of committed credit facilities was 1.8 years.
Interest-rate risk encompasses risk that changes in
interest levels will affect the cost of the Group’s
borrowing.
Vasakronan’s interest-risk management policy
stipulates that the loan portfolio’s average fixedinterest term shall not be less than 0.5 years, and
not more than three years. At year-end, the average fixed-interest term was 1.0 years.
An increase of interest levels of 1 percentage
point at December 31, 2007, given the current
borrowing volume and fixed-interest terms, would
increase Vasakronan’s interest expenses by SEK 72
M in the next 12 months. The increase corresponds to approximately 5% of income after net
financial items.
Vasakronan’s strategy with regard to interestrate fixing is to have a high percentage of the loan
portfolio with short fixed-interest terms in order to
reduce interest expenses in the long term, and
concurrently to have a certain number of long
fixed-interest terms in order to ensure a stable
interest expenses trend. Forecast cash flow, financial strength and the expected interest-rate trend
form the basis for choosing a rate-fixing structure.
The selected rate fixing may not risk that Vasakronan does not achieve its goal for a minimum interest-rate coverage level (2.0). The interest-coverage
ratio amounted to 5.5.
For the past ten years, the interest level in a
portfolio with a fixed-interest terms of 1.0 years,
corresponding to Vasakronan’s fixed-interest term
at year-end 2007, has undergone a maximum
Finance policy
The finance policy stipulates the goals, guiding
principles and division of responsibility in the
financial operations. The finance policy also regulates risk mandates, and principles governing computation, reporting, follow-up, and control of
financial risk. Vasakronan’s finance policy is evaluated and approved annually by Vasakronan’s
Board.
In order to ensure effective management and
reduction of financial risks and to make use of
economies of scale, all financial operations are carried out by the Group’s central finance function.
Financial risks
In its financial operations, Vasakronan is particularly exposed to financing risk, interest-rate risk,
credit risk and currency risk.
Reporting of financial risks
The aim of reporting such risks is to reduce financial risks and ensure compliance with the finance
policy.
The following financial risks are reported every
month to the President and Chief Financial Officer
and every quarter to the Vasakronan Board.
INTEREST-RATE RISK
100
Financial risk
Financing risk
Loan maturity
Loans reaching maturity,
12 months Policy
Outcome
Dec. 31, 2007
2–4 years
2.2 years
max 50%
34%
Committed credit facilities and
cash and cash equivalents in
relation to loans reaching
maturity, 12 months
at least 100% 121%
Term, credit facilities
at least 1 year 1.8 year
14
Interest-rate risk
Interest-term
0.5–3 years
1.0 year
Credit risk
Counterparty rating at least A–
fulfilled
Currency risk
Currency exposure not permitted none
FINANCING sources, DECEMBER 31, 2007
SEK M
Of which Interest,
Limit utilized
%
Commercial paper program 5,000
MTN program
20,000
EMTN program 9,435
Bank loans 4,034
Committed credit facilities 5,010
Total
–
2,914
5,664
333
4,034
–
12,945
Borrowings are reported in nominal amounts. Bank loans with
mortgage deeds amounted to SEK 1,000 M.
23
44
2
31
–
100
SEK M
%
6
80
5
60
4
40
3
20
2
0
1
–20
02 03 04 05 06 07 08f
0
Interest-rate risk
Outcome
Market interest rate, %
The interest-rate risk is reported as the effect in SEK of the 1-percentage-point increase in interest rates on January 1 of each
year. The actual effect of interest-rate fluctuations during the 12month period in question has always been less than the interestrate risk by a healthy margin.
change of 0.9 percentage points during a 12month period. At year-end 2006, an immediate 1percentage-point rise in interest rates was
expected to increase interest expenses by SEK 60
M. The actual interest-rate change calculated on
the loan portfolio on December 31, 2006 was
0.6% in 2007, corresponding to increased interest
expenses of SEK 35 M.
Credit risk
Financial credit risk is defined as the risk that a
counterparty will be unable to meet its financial
commitments to Vasakronan. Credit risk in financial operations arises when cash and cash equivalents are invested, or as a result of counterparty
risk arising in connection with the employment of
financial derivatives.
The Group’s policy for reducing credit risk
involves spreading risk among a number of counterparties. The policy is to invest cash and cash
equivalents and partake in derivative agreements
with counterparties that have a high credit rating,
not less than A– on Standard & Poor’s rating scale
or the equivalent. Credit risk is also to be reduced
by matching the maturity of invested liquidity to
forecast capital needs. The terms of investments
are not to exceed six months. At year-end, cash
and cash equivalents amounted to SEK 247 M.
The term amounted to one day.
Financial derivatives consist of interest-rate
swaps and currency-interest rate swaps, all of
which are linked to underlying loans and used as
hedges in obtaining desired interest fixing in the
FINANCING – MATURITY DATE STRUCTURE,
DECEMBER 31, 2007
80
loan portfolio and/or to eliminate currency risk in
connection with borrowing in a foreign currency.
Vasakronan’s policy is that derivative transactions
should be based on ISDA agreements, which permit claims to be offset against liabilities. At yearend, the derivative portfolio amounted to SEK
3,816 M. Unrealized gains in the derivative portfolio totaled SEK 60 M. The average remaining term
was 2.1 years.
At year-end, credit risk was distributed among
a number of counterparties, all of which had credit
ratings equivalent to at least A-. The largest claim
on a single counterparty regarding derivatives and
investment of cash and cash equivalents
amounted to SEK 252 M.
Vasakronan’s corresponding liability with the
counterparty amounted to SEK 1 M.
Currency risk
Currency risk encompasses the risk that exchangerate fluctuations, in connection with borrowing in
foreign currencies, will affect Vasakronan’s
income.
Vasakronan’s policy is to eliminate currency risk
in connection with borrowing in foreign currencies. At year-end, total borrowing in foreign currencies, representing SEK 323 M, was hedged
against Swedish kronor.
Financing 2007
in the bond market in the second half of the year.
However, credit margins for Vasakronan’s bank
loans remained unchanged, meaning that only
bank loans were utilized for long-term financing in
the second half of 2007. Two new credit facilities
of SEK 1 billion each were agreed during the year.
Pricing in the commercial paper market remained
attractive to Vasakronan and borrowing through
commercial papers rose slightly compared with
year-end 2006.
During the year, the total loan portfolio
increased by SEK 1,208 M and amounted to SEK
12,945 M at year-end.
Outlook for 2008
According to a number of forecasts, interest levels
will decline in 2008, although these forecasts are
naturally associated with uncertainty. The yield
curve at year-end indicates that short-term interest
rates will decline by about 0.4 percentage points
in 2008 and long-term rates will remain
unchanged. However, Vasakronan’s interest
expenses on existing borrowings will rise by SEK
12 M in 2008 since the average interest rate in the
loan portfolio continues to be less than the market
interest rate. Borrowings, excluding borrowings in
connection with property transactions, are calculated to increase by SEK 2.3 billion, due primarily
to a larger project portfolio. Refinancing of maturing loans will amount to SEK 4.4 billion in 2008.
The financial turmoil in 2007 led to a general
increase in credit spreads in the bond market,
which meant that Vasakronan did not raise loans
SOURCES OF FINANCING, DECEMBER 31, 2007
%
Bank loans 31%
Bonds 46%
70
INTEREST-RATE COMPARISON
– SHORT AND LONG-TERM INTEREST RATES
6
%
5
60
4
50
40
Commercial
papers 23%
30
3
2
20
1
10
0
0
08 09 10 11 12 13 14
Fixed interest
Remaining period to maturity
Committed credit facilities
The interest term was 1.0 year. The loan maturity amounted to
2.2 years. Committed credit facilities exceeded loans maturing
for the year ahead.
03
04
05
06
07
STIBOR 3-month
SWAP 5-year
Vasakronan’s financing is evenly distributed
between different sources.
The three-month short-term rate has been
lower than the five-year long-term rate.
15
Market, customers and competitors
The Swedish economy
slightly less than 6%. New construction activities
remain high, particularly in Västra Hamnen. The
construction of the City Tunnel is already affecting
the rental market in locations close to the entrances.
Demand in Lund remains very high and vacancy
rates are generally low. There is a high level of new
construction and the largest construction project is
Vasakronan’s new construction project for Sony
Ericsson in Lund, valued at SEK 540 M.
In 2007, the demand for office premises in central
Stockholm was high. Demand was largely driven
by the strong growth in employment. A large
number of companies, primarily in the service sector, underwent substantial expansion. This has led
to several major relocations and also expansion. It
has also resulted in companies from Stockholm’s
suburbs relocating to more attractive locations in
the central areas of the city. The rent level in the
Stockholm CBD increased by approximately 10%
and the top rent levels are beginning to approach
SEK 5,000/m2. Vacancies are declining in central
Stockholm and totaled 7% at year-end. At the
same time as vacancies are declining, several
major renovation projects are commencing. In
Stockholm’s suburbs, vacancies are higher, but
declined during the year, primarily in Kista. A
favorable market for technology and IT companies
contributed to new leases. In Kista and Solna/Sundbyberg, the vacancy rate declined by 12%. In
Uppsala, the rent trend was stable in 2007.
Favorable growth in employment means that
the demand for office space in Göteborg remains
strong. Demand has increased particularly within
the finance and consulting sector. The offering of
modern and efficient offices is limited. New construction is limited, although Vasakronan’s expansion in the Ullevi area is a very large project. Rent
levels in central Göteborg rose to approximately
SEK 2,300/m2 and the top rents are at a level of
SEK 2,800/m2. The vacancy rate for the market in
central Göteborg continued to decline and is at
about 7%.
The Öresund region had an extremely strong
trend in 2007. Employment increased in officeintensive industries, such as finance and consulting. The rent levels in Malmö and Lund continue to
increase. The vacancy rate decreased in central
locations and in the Västra Hamnen district to
PROPERTY PORTFOLIO IN SWEDEN
TRANSACTION VOLUMES
OWNER CATEGORIES 2006
TURNOVER OF PROPERTY PORTFOLIO PER YEAR
The Swedish economy has experienced highly
favorable growth for a number of years, which has
led to increases in employment primarily in the service sector. GDP growth declined in the final
months of 2007 due to the turbulence in the
financial markets. The outlook for growth remains
positive despite the fact that the Swedish economy has slowed. The forecast from the National
Institute of Economic Research is that continued,
relatively strong yet declining growth will contribute to an average GDP increase of 2.9% in 2008
and 2009. Growth has led to increased employment and many companies, primarily in the service
sector, have expanded their operations. As a
result, greater demand for office premises was
generated in the large cities of Stockholm, Göteborg and Malmö, leading to lower vacancy rates
and slightly elevated rents. Employment is also
expected to rise in 2008.
Sweden, the eighth largest economy in Europe,
has noted very strong growth in GDP in recent
years compared with the rest of Europe. Between
2002 and 2006, GDP growth was 1.7–4.4%, compared with other European countries, which had
between 0.8% and 2.8%, and the UK, which
reported growth of 1.9%–3.3%.
Strong commercial premises market
250
SEK billion
Other companies 6%
Foreign
investors 29%
200
Listed companies 20%
Insurance and pension
companies 13%
150
Private companies 16%
50
25
%
20
10
5
0
97 98 99 00 01 02 03 04 05 06
Investor market
Other
Source: Byggstatistik i Gävle
16
The Swedish property market is the largest in the
Nordic region and comprises more than 44% of
the total volume of properties in this region. The
Nordic property market is larger in size than both
the French and Dutch markets and in Europe only
the UK and Germany have larger property markets.
International investors are playing an increasingly important role in Sweden. Investments by
international players in Swedish properties were
32% in 2004, rose to 48% in 2005, to 52% in
2006 and to 57% in 2007.
Many factors have made the Swedish property
market attractive to both Swedish and international investors. The market is efficient with low
transaction costs, relatively low taxes and knowledgeable transaction advisors. In addition, the
market is highly transparent. The Swedish property market has been highly liquid in recent years
and only the UK has greater liquidity in Europe.
There has been widespread interest in purchasing properties in Sweden in recent years, particularly due to the relatively strong Swedish economy
15
State-owned
companies 16%
100
0
Continued strong property market
97 98 99 00 01 02 03 04 05 06
The market value of the property portfolio in
Sweden amounted to SEK 928 billion in 2006. This
is the most recent statistic available.
Slightly more than 20% of the property portfolio
in Sweden was turned over in 2006. There is widespread interest in this liquid property market.
MACROECONOMIC INDICATORS IN SWEDEN
GDP growth, %
Unemployment, % Growth in employment, % Inflation, % Long-term interest rate, % 2005 2006 2007 2008
2009
3.3
7.7
0.5
0.5
3.4 4.1
7.1
1.8
1.4
3.6 2.7
6.1
2.4
2.2
4.3 3.0
5.6
1.5
3.7 4.5
2.8
5.6
0.4
2.8
4.5
2006
2007
Source: National Institute of Economic Research. Status of the economy in January 2008
compared with other European countries, and the
low interest rates. The highest price per square
meter recorded to date in Sweden was noted during the year when Hufvudstaden purchased Rännilen 15 on Smålandsgatan 12 in central Stockholm for SEK 93,000/m2 from Handelsbanken Liv.
A number of major transactions took place in
Stockholm in 2007 involving a number of new foreign investors. The largest transaction was when
the UK company Boultbee acquired Centrumkompaniet from the City of Stockholm. The portfolio
contained ten shopping centers in Stockholm and
was divested for SEK 10.4 billion. Norwegian company DnB NOR acquired properties in Kista from
Doughty Hanson for approximately SEK 2.9 billion
and the Klarabergshuset property from Jernhusen
for SEK 1.3 billion. The US company Carlyle Group
acquired properties in Globen City from Whitehall
Funds for about SEK 3 billion, and Ireland’s Vico
Capital bought the Fatburen block from Keops
(Landic) for slightly more than SEK 2.6 billion.
Fabege acquired the DN Building and the Grönlandet Södra 13 property from Niam for about SEK
2 billion.
According to Jones Lang LaSalle the yield
requirements for prime locations increased somewhat during the fourth quarter of 2007. In Stockholm, their estimation of the yield requirement
amounted to about 4.25–4.75% and in Uppsala
to about 5.5–6%.
Interest in the property market in Göteborg
remains extensive, from both Swedish and foreign
investors. There is a limited offering of properties
for sale. During the autumn, Nordea Markets Norway acquired the Europahuset property in Göteborg from the US company Blackstone for SEK
700 M. Interest in project properties increased.
Vasakronan has major projects in progress in the
Ullevi area and Alecta has its Mektagonen project
in Mölndal. According to Jones Lang LaSalle, the
yield requirements for prime locations increased
somewhat during the fourth quarter of 2007. In
Göteborg their estimation of the yield requirement
amounted to about 4.75–5.25%.
The property market in Malmö and Lund was
characterized by major activity on the part of several international players. The German company
Oppenheim and Dutch company Rodamco
acquired properties during the year. According to
Jones Lang LaSalle the yield requirements for
prime locations increased somewhat during the
fourth quarter of 2007. In Malmö and Lund their
estimation of the yield requirement amounted to
about 5–6%.
PROPERTY CLOCK, FOURTH QUARTER, 2007
St Petersburg
London City, Kiev
Moscow
London West End, Rome
Brussels, Budapest, Düsseldorf, Frankfurt, Madrid
Barcelona, Paris, Warsaw
Dublin, Hamburg, Munich, Oslo, Stockholm, Vienna
Bukarest, Lyon
Amsterdam, Copenhagen, Helsinki, Luxemburg
Rental
growth
slowing
Rental
growth
accelerating
Rents
falling
Rents
bottoming
out
Athens, Prague
Berlin, Edinburgh, Lisboa
Milan
Market data
YIELD REQUIREMENTS, MODERN OFFICES IN PRIME LOCATIONS, DECEMBER 31
%
Stockholm CBD Prime
Stockholm CBD Class B
Göteborg CBD Prime
Göteborg CBD Class B
Malmö CBD Prime
Malmö CBD Class B
2002
2003
2004
2005
6.5%
7.8%
6.8%
8.5%
6.5%
8.0%
6.4%
7.7%
6.8%
8.0%
6.5%
7.6%
5.8%
6.6%
6.4%
7.5%
6.2%
7.6%
5.0%
5.7%
5.5%
6.5%
5.8%
6.3%
4.5% 4.6%
5.3% 5.25%
5.0% 4.9%
5.8% 5.75%
5.0% 5.0%
5.5% 5.75%
RENT LEVELS, OFFICES – PRIME LOCATIONS , DECEMBER 31
SEK/sqm/year
Stockholm
Göteborg
Malmö
Kista
Uppsala
Lund1)
2002
2003
2004
2005
2006
2007
4,400
2,200
1,800
1,950
1,750
1,600
4,000
2,150
1,800
1,800
1,700
1,500
3,600
2,200
1,750
1,700
1,700
1,500
3,600
2,200
1,800
1,800
1,700
1,500
3,700
2,200
1,850
1,800
1,700
1,550
4,300
2,250
2,050
1,900
1,800
1,700
2004
2005
2006
2007
1) Lund incl. IDEON.
VACANCY RATE, OFFICES – PRIME LOCATIONS, DECEMBER 31
%
Stockholm
Göteborg
Malmö
Kista
Uppsala
Lund1)
2002
2003
5.3% 9.2% 11.8% 12.4% 13.9% 6.7%
3.8% 5.0% 22.5% 13.7% 12.8% 7.2%
6.2% 7.1% 9.7% 11.5% 10.6% 7.5%
9.5% 27.8% 24.5% 21.7% 19.9% 12.0%
4.5% 4.0% 4.0% 4.0% 3.5% 5.0%
12.5% 10.7% 7.9% 4.9% 5.4% 6.2%
1) Lund incl. IDEON.
17
Satisfied customers – for enhanced
profitability
Satisfied customers are the basis for long-term
profitability. Vasakronan’s customer care process
includes systematic efforts with regard to property
maintenance and services, handling complaints,
communication and customization of premises.
The company uses its own operating staff to
improve its response to customers’ needs and pref-
erences. Employees with customer responsibilities
have special annual meetings with customers,
known as objective dialogues. These meetings
focus primarily on customers’ future plans and new
ways of enhancing cooperation with Vasakronan.
Customer surveys form the basis of continuous
improvements. In 2007, Vasakronan was ranked
first in the property industry’s own Satisfied
Customer Index (NKI), the Property Barometer.
VASAKRONAN’S PREMISES, DECEMBER 31, 2007
1,000 m2
Office
Central Stockholm
Greater Stockholm
Uppsala
Göteborg
Malmö
Lund
Total
457
246
89
207
171
56
1,226
VASAKRONAN’S MAJOR TENANTS, DECEMBER 31, 2007
Garage/
Retail warehouse Residential Other
40
93
1
8
84
2
23
13
9
36
40
–
42
64
22
2
7
1
15130135
11
56
7
17
41
5
137
Total
602
396
141
300
340
71
1,850
VASAKRONAN’S TYPES OF PREMISES, DECEMBER 31, 2007
Office premises
Retail
Garage/warehouse
Residential
Other
Total
Vasakronan has been among the top companies
since the Index began in 1995 and has been ranked
first on six occasions. The result for 2007 was yet
another improvement, from an index of 79 to 81.
Hufvudstaden was second with an NKI of 78, and in
joint third place was Castellum and the municipal
property company KIFAB with an NKI of 77. The NKI
is the tenants’ rating of how satisfied they are overall with their landlord. The rating is based on a
Rental revenues, SEK M
Proportion, %
Rental value SEK/m2
2,197
365
120
28
164
2,874
76
13
4
1
6
100
1,856
2,510
405
861
1,170
1,583
Proportion of
rent revenues, %
Floor
space leased
1,000 m2
Police Authority
7
SEB
6
National Courts Administration 4
Armed Forces 3
County Administrative Boards 3
Tax Board
2
Sony Ericsson Mobile
2
Statistics Sweden
1
PRV
1
Hotel Hilton Plaza
1
Total, ten tenants30
127
68
48
68
39
41
32
18
15
17
473
Number of
leases
Number
of counter-
parties
20
9
12
6
7
3
10
4
10
4
11
5
4
1
3
1
3
1
1
1
8135
The Police Service is the largest tenant from the standpoint of rental revenues.
Vasakronan’s property portfolio focuses on office premises, which constitute 76% of rental revenues.
18
number of questions such as location of premises,
reporting faults, services, adaptations, company
image, status of the premises, handling of complaints, environmental awareness, price/value for
the premises and indoor climate. Areas that mainly
affect the satisfaction and loyalty of tenants are
company image, service to tenants and the company’s ability to adapt its premises to tenants. Vasa
kronan was ranked first in nine of ten areas. In Vasa
kronan’s own more detailed customer surveys, customer loyalty rose from 88% to 89%. At the same
time, the percentage of respondents who said that
they would “definitely” be willing to lease from
Vasakronan again increased from 65% to 67%. In
response to the question of whether the customers
would recommend Vasakronan as a landlord, 92%
said that they would and a full 69% said that they
would definitely recommend the company.
Vasakronan’s
CUSTOMER STRUCTURE
NKI SATISFIED CUSTOMER INDEX –
VASAKRONAN/PROPERTY INDUSTRY
90
Central government
customers, 32%
Private
customers, 68%
In all, Vasakronan owns and manages about
1,850,000 m2 of premises. The total number of
customer leases in December was 4,075, of which
3,000 are commercial customer contracts.
Office premises account for 76% (76) of Vasa
kronan’s rental revenues and retail premises
account for 13% (14). The average lease term is
4.3 years (4.5).
NKI, SATISFIED CUSTOMER INDEX
PROPERTY BAROMETER
Landlord
Vasakronan
Hufvudstaden
Industry index 80
70
2004
2005
2006
2007
78
76
69
79
78
71
79
80
72
81
78
71
Vasakronan has been ranked first according to the NKI Property
Barometer six out of the eleven times that the survey has been conducted. Only the top three in the survey are now reported, as well
as an industry index.
60
50
40
Vasakronan’s customer structure is similar to
those of its main competitors. This mix
reflects the market distribution in Sweden
between public and private-sector office
tenants.
98 99 00 01 02 03 04 05 06 07
Vasakronan
Industry average
The following companies participated in the survey in 2007:
Alecta, AP Fastigheter, Castellum, Diligentia, Hufvudstaden, Jernhusen, Keops, KIFAB, Kungsleden, NewSec, NIHAB, Rodamco and
Vasakronan.
Vasakronan’s strong commitment to satisfying customers is an important force in its corporate culture.
19
Competitive situation
The competitive situation in the Swedish property
market continues to be subject to significant
change as foreign property investors have acquired
a considerable number of Swedish property portfolios. In recent years, foreign pension funds have
been behind a number of property acquisitions.
Among foreign stakeholders, investors from
the other Nordic countries and the UK, including
the Norwegian company Acta and the British company Boultbee, have been very active. In parallel
with continued international interest in Swedish
properties in 2007, Swedish players, particularly
listed companies and institutions, accounted for a
high proportion of the transactions completed.
Kungsleden and Fabege were active in both purchases and sales. To some extent, the high level of
activity in the property market is due to the
restructuring of corporate portfolios, with a focus
on high-priority markets. In addition, some pension funds have increased their share of property
investments.
All the major Swedish property companies
now have their own management operations,
while foreign property investors have mainly outsourced such services to management companies.
The largest companies for commercial properties in Sweden are Vasakronan, AP Fastigheter,
Diligentia (Skandia Liv), and Fabege. These companies focus on the urban areas and growth
markets. AP Fastigheter and Diligentia have some
housing properties, while the other companies
concentrate entirely on offices and retail premises.
market value (2007)
rental revenues (2007)
Vacancy, rate (2007)
SEK M
%
Vasakronan
Hufvudstaden
AP Fastigheter
AP Fastigheter
Vasakronan
Diligentia
Castellum
Wihlborgs
Fabege
Diligentia
Fabege
Castellum
Fabege
AP Fastigheter
Hufvudstaden
Hufvudstaden
Diligentia
Wihlborgs
Wihlborgs
Castellum
0
20
SEK M
Vasakronan
10,000 20,000 30,000 40,000 50,000
0
1,000
2,000
3,000
0
2
4
6
8
10
12
COMPARISON WITH COMPETITORS, DECEMBER 31, 2007
Property
company
No. of
properties
Premises
floor
space, m2
Market
value
SEK M
Rental
revenues
SEK M
Vacancy
rate
%
Main geographic markets
Portfolio
strategy
No. of
employees
Largest owner1)
Operation
support
services2)
Vasakronan
171
1.8 million
45,2
2,874
4
Stockholm,Office
2463)
Göteborg, Malmö
Retail
Uppsala, Lund
Swedish
State
Yes
AP Fastigheter
175
1.9 million
39,7
2,805
10
StockholmOffice
272
1–4 AP-fonden
Yes
Uppsala
Retail
Göteborg
Residental
Diligentia
187
1.6 million
31,4
2,145
11
StockholmOffice
119
Skandia LivNo
Göteborg
Residental
Malmö
Shopping centers
Fabege
167
1.5 million
30,8
2,066
8
Stockholm regionOffice
140
Maths O Sundqvist,No
Brinova, Öresund
Castellum
508
2.9 million
27,7
2,259
12
Greater Stockholm, MälardalenOffice
185
AFA, Laszlo Szombatfalvy,No
Greater Göteborg
Retail AMF
Öresund region
Storage/industrial
Östra Götaland
Hufvudstaden
30
0.4 million
20,5
1,266
3
StockholmOffice
97Lundbergs
Yes
Göteborg
Retail
Wihlborgs
245
1.2 million
13,4
1,035
7The Öresund regionOffice
84
Maths O SundqvistNo
including Retail
Brinova, Öresund
Copenhagen
Storage/industrial
Source: Company websites, February 2008
Fabege and Hufvudstaden are on the Large Cap List of OMX Nordic Exchange. Wihlborgs is listed on the OMX Nordic Exchange Mid Cap List.
2) Vasakronan is the only property company with service operations based on a subsidiary.
3) The Vasakronan Group has a total of 403 employees, 246 in the property business and 157 are employed in service operations with the Vasakronan Service Partner subsidiary.
1) Castellum,
21
Commercial properties in Stockholm,
Göteborg, Malmö, Lund and Uppsala
at a market value of SEK 45.2 billion.
Continued growth through acquisition
and project portfolio of SEK 10 billion.
Stockholm Region
TOTAL SHARE OF VASAKRONAN, %
Rental
revenues
Operating
surplus
Market
value
66%
66%
66%
Vasakronan’s property portfolio is concentrated in clusters in central Stockholm,
Solna and Kista. Premises in Östermalm in and around the Garnisonen block
total almost 300,000 m2. Vasakronan has 200,000 m2 in the greater
Kista area and 150,000 m2 in the central business district.
� Kista
� Solna
�
Vasastaden �
Östermalm
Kungsholmen � � City
� Old Town
Liljeholmen �
• Vasakronan has an attractive property portfolio in
central Stockholm, Solna, Kista and Uppsala.
• In 2007, leasing was successful and in Kista, both
Kista Science Tower and Kista Entré are practically
fully occupied.
Strong growth in Stockholm – low
vacancies and higher rents
Growth in the Stockholm region remained strong
with increased demand for labor, high population
rises and many new companies. Growth in
employment is expected to continue, primarily in
finance, trading and communication, although at a
slightly slower rate according to the County Labor
Board.
According to a Temaplan forecast, approximately 27,000 new job opportunities will be created in the Stockholm region’s office sector
between 2008 and 2010. Vasakronan’s assessment is that about 75% of these jobs will entail an
expanded need for premises, meaning higher
demand for office premises with between
300,000 and 400,000 m2 of floor space. A total of
approximately 200,000 m2 of new office premises
is expected to be completed in 2008 and 2009
and a further 100,000 m2 in 2010. Despite many
office projects being completed for occupancy, the
elevated demand for premises due to new job
opportunities will probably be greater than the
future offering. Demand is highest for modern
and efficient premises and these types of premises
in particular have the conditions for a favorable
rental trend.
24
�
Södermalm
• V
acancies for Vasakronan in central Stockholm fell
Lokalarea: 15 000m � 50 000m � 100 000m � 150 000m
to 5% and in Greater Stockholm to 7%.
� 200 000m � 250 000m � 300 000m
• Market value of properties in Stockholm and
Uppsala amounts to SEK 29.7 billion.
2
�
2
Turnover on the property market remains high
and the direct yield requirements remain at low
levels. Investors are increasing their exposure to
properties – demand from foreign investors
remains high and many institutions intend to double their property portfolios. A credit crunch may
slow down turnover and elevate yield requirements in certain markets.
Strategic focus
Vasakronan’s property portfolio in central Stockholm largely consists of properties in attractive
office locations, gathered in clusters – thus reinforcing the company’s market position. Most of them
are modern and provide efficient office floor space.
Properties in central Stockholm are situated in
the central business district, Östermalm, Vasastan,
Kungsholmen, the Old Town and Södermalm.
Many of the properties are very prominent, for
example Sweden House at Kungsträdgården, the
Garnisonen block in Östermalm, and four of the
five Hötorg buildings.
Properties outside central Stockholm are
mainly located in inner suburban districts such as
Liljeholmen, Lilla Essingen, Solna and Kista, including Kista Science Tower and Kista Entré. A new
submarket for Vasakronan is Frösunda in Solna.
2
2
2
2
2
Vasakronan also has an extensive projectdevelopment portfolio in Stockholm. Conversions
and new constructions are taking place in Stockholm valued at slightly less than SEK 1.1 billion. In
the long-term perspective, many attractive development projects are also available for existing
building rights or rights that can be developed in
the property portfolio in Stockholm.
The services offered by Vasakronan Service
Partner at many properties provide solid support
to renting activities and increasing satisfaction
among existing customers.
Commercial premises market
In 2007, demand for office premises in central
Stockholm was high. Demand was largely driven by
the strong growth in employment. A large number
of companies, primarily in the service sector,
expanded substantially, leading to many large-scale
relocations and also expansion, mainly in central
Stockholm. Many companies have moved away
from outer areas to more attractive locations in central parts of the city and the most attractive suburbs.
In 2007, a total of 290,000 m2 was leased in
Central Stockholm, where finance and consulting
are the most active sectors. Most of the companies
in the service sector impose highly rigorous
RENTAL REVENUES,
STOCKHOLM REGION
2,500
MARKET VALUE,
STOCKHOLM REGION
SEK M
30,000
VACANCY RATE, RENTS,
STOCKHOLM REGION
SEK M
10
25,000
2,000
8
20,000
1,500
%
6
15,000
1,000
500
0
4
10,000
2
5,000
03
04
05
06
0
07
Rental revenues in Stockholm increased as a
result of successful leasing.
03
04
Rental revenues, SEK M 2007
2006
2005
2007
2006
2005
1,276
442
169
1,887
1,223
391
138
1,752
1,197
523
68
1,788
875
284
107
1,266
840
224
83
1,147
819
227
39
1,085
demands on standards and level of modernity.
Also, the solvency of the companies in these sectors is currently high due to healthy profitability.
The available range of new constructions in central
Stockholm was low and service-sector companies
mainly moved into recently renovated premises.
Prime rents in central Stockholm rose during
the year from SEK 3,900/m2 to SEK 5,000/m2.
Demand for premises in central Stockholm
among companies outside the finance and consulting industries was also high. Medium-class
offices are often in demand, which led to rents for
this category of offices also rising in 2007. Rents
for offices of a 1980s-standard rose by 10–20%
in 2007 and in the very central areas of Stockholm
amount to approximately SEK 3,000/m2. However, adaptations for tenants, which are often
extensive, are required to reach these levels.
The upturn in rents has entailed a certain
degree of uncertainty among tenants and property owners regarding the level of market rents.
Some tenants looking for new offices have not
realized the drive of the rent boom and consequently have far too low expectations. At the
same time, property owners have, in certain
cases, too high expectations of rent increases.
This makes the search processes in many cases
06
0
07
The market value in Stockholm and Uppsala
increased as a result of rising market rents.
Central Stockholm Greater Stockholm Uppsala
Stockholm
05
Operating surplus, SEK M
2006
04
05
06
07
The vacancy rate declined in central Stockholm and in Kista.
Market value, SEK M
2007
03
Vacancy rate, rent, %
2005
2007
2006
20,693 17,842 15,990
6,787 5,537 4,783
2,255 1,912
779
29,735 25,291 21,552
5
7
5
5
7
14
7
9
longer and protracted and means that the tenant
remains out on the market for long periods without signing a new rental lease.
The vacancy rate in central Stockholm fell
sharply in 2007 and amounted to 7% at the end
of the year, which is a substantial decrease from
the end of 2006 when the vacancy rate was 11%.
Jones Lang LaSalle assesses that the high demand
will continue to press down vacancies in the next
12 months.
The offering in the Stockholm CBD will rise
around year-end 2008 when new constructions at
the Central Station and Norra Bantorget are completed. At the same time, a number of large-scale
renovation projects will be completed toward the
end of 2008.
Extensive tenant adaptations are required to
create ultramodern office premises and attract
larger companies from the finance and consulting
sectors. However, an overheated construction
sector is fueling continuous increases in construction and renovation costs. These costs are often
underestimated and entail that the positive effect
of increasing rents risks being eradicated by rising
construction costs.
The rental market in Stockholm’s outer areas is
somewhat different. A strong performance was
Properties,
No. of
floor space registered
1,000 m2 properties,
2005
2007
2007
5
23
2
9
602
396
141
1,139
43
32
21
96
noted in Kista in 2007. A favorable market for
technology and the IT sector, headed by Ericsson,
contributed to large-scale expansion and new
leases.
A full 70,000 m2 was leased in Kista, which is
not far behind the level of 93,000 m2 in Solna/Sundbyberg. However, the total market is double the
size in Solna/Sundbyberg with an office portfolio of
1,600,000 m2 compared with Kista’s 800,000 m2.
The modern office products in Kista represent clear
competition to Solna/Sundbyberg when tenants in
northern suburbs seek new premises, despite few
companies moving from Solna/Sundbyberg to
Kista. Fujitsu Siemens and Munters, for example,
have moved from the Arlanda Airport corridor to
Kista. Many companies are currently moving away
from the Arlanda Airport corridor and Kista is often
a top priority, despite the wide range of new constructions in Solna/Sundbyberg.
Prime rents in Solna/Sundbyberg rose by SEK
200/m2 or 10% in 2007 and at year-end
amounted to SEK 2,200/m2. In Kista, prime rents
increased by SEK 150/m2 or by 8.6% and at yearend were at SEK 1,900/m2. Kista Science Tower is
excluded from this rent level since the premises
are unique and not comparable with rent levels in
the other areas of Kista.
25
Stockholm
Demand for medium-class offices
increased substantially in both Kista and
Solna/Sundbyberg and rents rose significantly. After many years of very high vacancies and downward pressure on rents, levels
rose by 14% in Solna/Sundbyberg from
about SEK 1,300–1,400/m2 a year ago.
The vacancy rate in Kista peaked toward
the end of 2003 when the rate surpassed
30%. Vacancies have subsequently steadily
declined, particularly in 2007. The decline
was a full 5 percentage points and the
vacancy rate was 12% at year-end. Vacancies also decreased sharply in Solna/Sundbyberg, primarily during the fourth quarter of
the year when many new leases were signed
in Sundbyberg. The vacancy rate at year-end
2007 amounted to 12%, a decline of 5.6
percentage points during the year.
Despite the ready availability of land for
development in both Solna/Sundbyberg and
Kista, new constructions were at modest levels in 2007. In Solna/Sundbyberg, 16,000 m2
was completed (Frösunda Park, Rosenborg 1) and in Kista 19,000 m2 (Kista Terrass
AP Fastigheter for Ericsson). The positive
trend in the rental market will probably result
in new projects being initiated.
In terms of leasing, 2007 was a very successful year for Vasakronan, with a significantly lower than average vacancy rate for
26
Property portfolio in Stockholm
both central and Greater Stockholm, at
slightly more than 4.7% and 7.5% respectively, yielding an overall vacancy rate of 5%
for Stockholm.
It was a very active year in Kista, with
many new leases. More than 20,000 m2 has
been leased to new tenants, in the high-profile properties Kista Science Tower and Kista
Entré. Most are companies working in the IT
and telecom sectors, although other industries have also sought out space at one of
the world’s foremost IT clusters. New tenants
in Kista include Laird Technologies with
4,099 m2 of space, Fujitsu Siemens with
3,225 m2, Munters with 2,595 m2, Powerwave Technologies with 1,993 m2 and
Accenture with 1,027 m2. The vacancy rate
in Kista Science Tower is 4.9% of office floor
space and 5.5% in Kista Entré.
Demand was also favorable in central
Stockholm. Many leases were signed. New
rental contracts were signed, for example,
with AMS Media, which rents 3,132 m2 of
space, and Fatalist Entertainment, which
expanded its operations to 2,074 m2 on Götgatan, in the Gamen 8 property on Södermalm, Söderberg & Partners with 2,221 m2
in Hästskon 9 on Hamngatan, which
expanded and moved within Vasakronan’s
portfolio. Näringspunkten i Sverige leased
1,613 m2 in Lagern 11 on Vasagatan. A
number of tenants moved into the fourth
Hötorg building, including Michael Page
International, Provider Venture Partners,
Choice Hotels Sweden, and CB Richard Ellis.
In total, Vasakronan signed leases in
Stockholm for approximately 126,100 m2, of
which 87,000 m2 pertained to new leases
and 39,000 m2 renewed leases. Vasakronan’s peak rent for office premises in the city
was around SEK 4,800/m2. The average
lease length is 3.9 years.
Vasakronan’s rents for retail space in the
CBD were in the SEK 5,000–10,000/m2
range.
Property market
The property market was strong in 2007. A
number of major transactions were conducted in Stockholm during the year with a
number of new foreign investors. The largest
deal was when British company Boultbee
purchased Centrumkompaniet from the City
of Stockholm. The portfolio contained 10
shopping centers and was sold for SEK 10.4
billion. Norwegian company DnB Nor
acquired properties in Kista from Doughty
Hanson for approximately SEK 2.9 billion
and Klarabergshuset from Jernhusen for SEK
1.3 billion, US company Carlyle Group purchased properties in Globen City from
Whitehall Funds for about SEK 3 billion and
Stockholm
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VASAKRONAN’S MAJOR TENANTS,
STOCKHOLM, DECEMBER 31, 2007
MAJOR PROPERTY OWNERS IN
CENTRAL STOCKHOLM
Tenants
Property owner Police Authority
Defense Materiel Administration
SEB
National Courts Administration
Statistics Sweden
County Administrative Board
Patent and Registration Office
Tax Board
Swedish Agency for Economic and
Regional Growth (NUTEK)
IBM
Floor space, m2
72,000
66,800
42,900
30,000
18,300
17,000
15,100
13,200
11,400
10,000
Vasakronan
Fabege
AMF Pension
AP Fastigheter
Alecta
Commercial premises, m2
600,000
425,000
352,000
328,000
307,000
Source: Byggstatistik i Gävle.
Refers to commercial premises at December 31, 2007.
The table shows the major landlords for office, retail, warehouse and hotel facilities in leased properties.
PROPERTY PORTFOLIO, DECEMBER 31, 2007, STOCKHOLM
Floor,space,(m2)
Property, address
Year built/
rebuilt
Tax
value
(SEK M)
Ware
house/
Retail/
storage/
Office
rest. Garage archives
Resi
dential
Other
Rental
Total revenues Vacancies,
floor 2007 (SEK
rental
space
M) value (%)
Major tenants
Stockholm City
4 (T), Sergelgatan 16–18 /
• 1 Beridarebanan
Sveavägen 13
11 (T), Sveavägen 5–9 /
• 2 Beridarebanan
Sergelgatan 8–14 / Mäster Samuelsgatan 42
3
Beridarebanan
• Sveavägen 17 77, Sergelgatan 20–22 /
9, Hamngatan 22 /
• 4 Hästskon
Regeringsgatan 45
5
Hästskon
(T), Hamngatan 24–32 /
• Sveavägen122–10
• 6 Järnplåten 23 (del av), Kungsgatan 37
• 7 Järnplåten 29 (T), Oxtorgsgränd 2–4
• 8 Kungliga Trädgården 7, Hamngatan 25
14, Blasieholmstorg 8 /
• 9 Ladugårdsbron
Nybrokajen 11–13
•10 Lantmätaren 1, V Trädgårdsgatan 2
•11 Sperlingens Backe 45, Stureplan 2
•12 Styrpinnen 15, Kungsträdgårdsgatan 13
1960/1998
503
8,090
3,018
2,537
2,050
–
37
15,732
42
7
Previa, Direct Försäkringsmäklare, 4 C Strategies, Onoff,
MQ
1961/2007
895
17,620
5,380
1,831
1,493
–
13
26,337
66
19
The Stadium, JC, The Summit, Leimdörfer, Grin, Provider,
Choice Hotels, CBRE
1958/1995
490
8,583
4,241
3,236
2,218
–
–
18,278
57
–
H&M, Svanströms, Handelsbanken, Gina Tricot, B2 Sverige
AB
1935/1994
389
5,141
3,630
–
858
–
–
9,629
33
–
H&M, Söderberg & Partners, Nordea Bank, Trioptima
1963/1998
1,482
36,063
8,541
–
8,702
–
22
53,328
160
–
SEB, The Stadium, Joy, Bik Bok, Cubus, Nilsson Group, Gina
Tricot
1937
–
1,517
–
–
–
–
–
1,517
5
–
Jeeves, Espresso House
1971/2000
72
1,826
521
–
767
–
–
3,114
8
2
SIBA, NCM Donaldson, CDG StroedeRalton AB, NBWadvokater
1969/2004
257
3,597
1,814
–
–
–
–
5,411
28
4
The One, Stockholm Visitors Board, Hamilton Advokatbyrå,
Advokatfirman Nilsson & Co
1650/1997
–
6,186
–
–
–
–
–
6,186
12
–
Swedish Concert Institute, Royal Swedish Academy of
Music, Handelsbanken Markets
1644/2000
59
1,747
–
–
–
–
–
1,747
3
–
Steen & Ström, LRF Konsult
1897/1959
133
2,633
953
–
–
–
–
3,586
10
29
SEB, Sturehof
1898/1965
111
3,429
–
–
127
–
82
3,638
6
1
Danske Bank
2,870 107,559
5,347
19,846
16,727
–
6,863
156,342
290
4
SCB, Mercuri Urval, EMA Telstar, EMI Music, Cision, Metria,
VHS, Svensk Försäkring, National Archive of Recorded
Sound and Moving Images, Universal Music, Informator,
Philip Morris, BDO Feinstein Revision, Streamserve, Grow,
IBX
Allers Förlag, B&B Tools, Nordea Bank
Stockholm Östermalm
3, Linnégatan 87–89 /
• 1 Garnisonen
Karlavägen 96–112
• 2 Minan 4, Karlavägen 76 / Grevgatan 64
• 3 Svea Artilleri 14, Valhallavägen 117
• 4 Tre Vapen 4, Banérgatan 62
• 5 Uppfinnaren 1, Valhallavägen 136
• 6 Uppfinnaren 2, Östermalmsgatan 87
• 7 Konsthallen 14, Falkenbergsgatan 5
1886/1999
1929/1997
88
2,952
–
–
104
419
163
3,638
9
–
1877/1950
–
15,762
–
–
–
–
–
15,762
20
36
1948/1997
–
59,333
–
–
–
–
–
59,333
76
–
Defense Maeriel Administration, Military Archives
1921/2004
305
11,123
–
–
4,893
–
–
16,016
32
–
Patent and Registration Office, German Embassy
1914/2003
408
15,474
–
–
1,696
–
7
17,177
41
3
Office of the Prosecutor-General, Clear Channel, Spray
Network, Lindskog Malmström Advokatbyrå, Ikivo
0
–
–
–
89
–
–
89
0
–
Gröna Lunds Tivoli
1788/2002
163
3,981
–
–
111
–
1,061
5,153
15
–
Boston Consulting Group
1650/1950
85
3,183
–
–
168
–
387
3,738
8
–
Swedish Labor Court, Swedish Christian Democrats
1901/1928
69
2,770
–
–
225
–
–
2,995
8
2
Procuritas Partners, Skeppsbrogruppen, Gustavus Capital
1963/2006
343
16,511
1,389
4,432
2,270
–
654
25,256
50
–
1450/1930
27
1,162
–
–
110
40
–
1,312
3
–
Orgut Consulting, Samarbetande Konsulter,
Odelius New Media
1992
Royal College of Music, S.A.T.S. Sports Club
Central Stockholm
• 1 Argus 8, Skeppsbron 38, Packhusgränd 7
• 2 Atomena 1, Stora Nygatan 2A–B
• 3 Bacchus 1, Skeppsbron 20
• 4 Bremen 3, Tegeluddsvägen 1
• 5 Cepheus 2-3, Svartmangatan 9
• 6 Diamanten 11, Kungsholmsgatan 23
• 7 Fruktkorgen 1, Scheelegatan 7
• 8 Gamen 8, Götgatan 72, Åsögatan 108
• 9 Grönlandet Norra 1–5, Wallingatan 2
•10 Kungliga Myntet 1, Norr Mälarstrand 6
•11 Kurland 11, Holländarg 21 A
•12 Lagern 6, Vasag 52
11, Klara Norra Kyrkogata 27–29, 31,
•13 Lagern
Olof Palmes gata 23
•14 Murmästaren 3, Hantverkargatan 29
•15 Murmästaren 13, Hantverkargatan 25–27
14, Västgötagatan 7,
•16 Nattugglan
Folkungatan 44
•17 Tritonia 9, Stora Nygatan 14–16
•18 Vega 4, Drottninggatan 95 A
•19 Väbeln 2, Erik Dahlbergsgatan 58
(T) = site leasehold
1928/1999
42
1,339
–
–
246
149
325
2,059
4
–
Creuna
1916/1991
266
15,774
–
–
–
–
–
15,774
17
–
2000
160
4,912
469
–
176
–
251
5,808
21
–
AMS Media, Fatalist Entertainment
1800/2002
396
13,769
494
–
759
–
739
15,761
48
–
IBM Svenska, Swedish Social Insurance Agency, Swedish
Council for Working Life and Social Research, ABA of
Sweden
1775/1933
110
5,813
–
–
330
23
–
6,166
8
17
Children’s Ombudsman, Talarforum, Geelmuyden-Kiese,
Hitta.se, Mackmyra Whisky
1884/1995
48
2,218
–
–
67
–
–
2,285
6
–
Sophiahemmet Rehab Center, Freesourcing, I & N Grafisk
Kommunikation
1870/1960
65
2,170
278
149
178
–
273
3,048
6
1
1929/1987
548
15,781
556
2,336
1,290
–
–
19,963
45
4
A-Com, Hermes, Marsh, Mercer Human Resource
Consulting, Unemploymend Fund for Graduates in Sweden
(AEA), Näringspunkten
1926/1997
289
13,877
–
–
2,204
–
–
16,081
36
–
1965/1997
225
10,460
89
2,863
521
–
754
14,687
26
–
Posten, Arete, Hannover Re, Swedish ESF Council, TEMAgruppen
1978/1986
456
19,770
–
3,365
1,768
–
1,805
26,708
52
–
Tax Board, Healthcare Provision, Stockholm County,
Swedish Association of Graduates in Business
Administration and Economics
1962
Swedish National Board of Forensic Medicine,
Byggherreforum
49
1,570
331
–
379
184
–
2,464
2
50
Wokia, Swedish Prison and Probation Service
1865/1955
196
9,998
–
–
1,120
–
–
11,118
15
33
Swedish Shareholders’ Association, Swedish National Board
for Consumer Complaints, Swedish Accident Investigation
Board, Medical Responsibility Board
1950/1962
60
3,071
–
–
900
–
8
3,979
9
2
PROPERTY PORTFOLIO, DECEMBER 31, 2007, STOCKHOLM, CONT.
Floor space (m2)
Year built/
rebuilt
Property, address
Tax
value
(SEK M)
Warehouse/
Retail/
storage/
Office
Resi- dential
Rental
Total revenues Vacancies,
floor 2007 (SEK
rental
space
M) value (%)
Other
Major tenants
Greater Stockholm
• 1 Aske 1:2, Aske Kursgård
• 2 Charlottenburg 11, Solnavägen 96–100
• 3 Ekelund 1, Ekelundsvägen 12–20
• 4 Bromsten 9:1, Sulkyvägen 2
• 5 Primus 1, Primusgatan 18
• 6 Tingshuset 1, Huddinge Stationsväg 5–7
• 7 Näsbypark 57:1, Djursholmsvägen 30
•10 Rosenborg 1, Gustaf III:s Boulevard 54–56
•11 Rosteriet 6, 8, Liljeholmsvägen 28–30
1)
1)
1)
1)
1)
1)
1)
1)
•12 Rosteriet 7, Liljeholmsvägen 32
•13 Skytten 2, Hannebergsvägen 33
•14 Tegen 6, Sundbybergsvägen 5–15
1)
1807/2000
24
4,937
–
–
–
–
–
4,937
4
–
AMS
1950/1997
44
5,015
–
–
66
–
–
5,081
8
–
Swedish Migratioin Board, Prokab Ekonomikonsulter,
Haluxa
1979
207
19,608
863
–
633
–
3,635
24,739
17
44
1940
56
2,109
–
–
17,101
–
–
19,210
11
–
Bromma Skog & Trädgård, A-service Trä o Metall
1963/2000
319
19,703
802
6,802
426
–
6,492
34,225
51
6
Swedish Police Service, Stockholm, Aon Sweden, Qbranch,
Vasakronan Service Partner, Hertz
1960/2008
46
6,059
–
21
–
–
–
6,080
5
22
1665/1998
32
10,779
–
–
767
243
5,714
17,503
15
–
Pliktverket, Försvarsmakten, Amica, Slottshallen, Nordisk
Mobiltelefon
1943
0
123
–
–
–
–
64
187
–
Svensk Markservice
–
–
–
–
–
–
–
–
0
–
–
Mark
2007
143
9,196
–
5,212
389
–
521
15,318
2
–
Bayer, Tibnor, Amgen och Vmware
1959/1991
136
16,853
–
3,277
508
–
208
20,846
30
1
Ahlsell, Labour Market Institute, Betongindustri, Mysoft,
Swedish European Social Fund Council, Svenskt Vatten
1964
129
10,704
863
2,089
2,248
–
94
15,998
25
1
1960
Swedish Work Environment Authority
Öhrlings PriceWaterHouseCoopers, Kriminalvården
Swedish Agency for Economic and Regional Growth,
Swedish Social Insurance Agency
38
3,781
–
–
484
–
–
4,265
3
24
1974/1999
283
29,054
615
–
692
–
460
30,821
54
–
Church of Sweden, Swedbank, Koneo
Western Stockholm Police Service, Swedish Prosecution
Authority, National Courts Administration, Iduna, Aerocrine
1989/2000
22
4,299
–
–
58
–
–
4,357
4
1
Océ Svenska
1930/2000
17
1,187
–
–
96
489
36
1,808
2
13
1
212
–
–
3,393
227
1,822
5,654
1
–
Mark
2003
546
44,103
2,672
18,155
2,077
–
542
67,549
87
8
SATS, Unisys, SymSoft, Mentor Graphics, Symantec,
Accenture, Fujitsu Siemens, ÖhrlingsPricewaterhouse
Coopers, Symsoft,Texas Instrument
2003
445
39,856
1,461
13,887
2,026
–
277
57,507
67
6
Philips, IBM, Friskis & Svettis, SPSS, Telecomputing,
Compuware, Radio Components Sweden, Medtronic,
Huber&Suhner, Komet, Citat Journalistgruppen
1986/2000
41
3,670
–
1,214
995
–
217
6,096
1
–
Laird, Cabling
1987
33
5,250
–
–
–
–
–
5,250
1
84
Kista
• 1 Estländaren 10, Sollentunavägen 82–84
• 2 Fröet 1, Pipers väg 165
• 3 Järva 2:1 mfl, Mellersta Järvafältet
• 4 Katla 1, Kista Science Tower, Färögatan 33
1)
–
2 (T), Kista Entré,
• 5 Knarrarnäs
Knarrarnäsgatan 7
• 6 Knarrarnäs 6 (T), Isafjordsgatan 5, Kista
• 7 Knarrarnäs 10 (T), Isafjordsgatan 7, Kista
• 8 Sundbyberg 2:37, Råsta
• 9 Sundbyberg 2:42, Råsta
•10 Sundbyberg 2:44
•11 Ulriksdal 2:1, Ulriksdal
–
–
–
–
–
–
–
–
0
–
–
City of Sundbyberg
1)
1909
9
–
–
–
–
–
–
0
–
–
City of Sundbyberg, residential tenants, Svensk
Miljödemontering
–
1
–
–
–
–
–
–
0
1
–
Mark
1930/1999
–
9,861
–
–
924
967
36,394
48,146
53
–
Swedish National Police Academy, National Police Board
1945
–
1,017
1,017
–
Swedish National Police Academy
–
5
Oljemarks Bilfjädrar
•12 Vagnfjädern 1, Enköpingsvägen 80
1)
Total
14,235
–
–
–
–
–
–
–
0
–
703,123 44,327
91,252
85,429
2,741
70,937
997,809
1,718
5
not marked on map
MARKET RENTS AND VACANCIES
IN KISTA
SEK/m2
%
2,000
24
1,500
18
1,000
12
500
0
6
03
04
05
06
07
0
MAJOR PROPERTY OWNERS IN GREATER
STOCKHOLM
Property owner 30
2,500
Skanska
1)
Helenelund 7:1, Ulriksdal
1)
Kvänum Kök, B Locket
(SEK/m2)
Market rent,
Vacancies, (%)
Fabege
AP Fastigheter
Diligentia (Skandia Liv)
Vasakronan
AMF Pension
Commercial premises, m2
999,000
912,000
448,000
395,000
352,000
The table shows the major landlords for office, retail, warehouse and hotel facilities in leased properties.
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ULRIKSDAL
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10
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SUNDBYBERG
4
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Sundbybergs
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2
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Solna
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SOLNA
13
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Pull out pages for full overview
Irish company Vico Capital purchased the
Fatburen block from Keops (Landic) for
slightly more than SEK 2.6 billion. Fabege
purchased the DN building and the Grönlandet Södra 13 property from Niam for
approximately SEK 2 billion.
Transaction volumes in Stockholm for
2007 amounted to SEK 51 billion, which is
approximately the same level as in 2006
when it amounted to SEK 50 billion.
The credit turmoil that affected the
global financial markets in the late summer
of 2007 had a limited impact on the market
in Stockholm compared with London, for
example. The yield requirement was raised in
many European cities by 0.25–0.30 percentage points in the autumn, in parallel with
declines in turnover volumes.
Despite the general credit unrest, a couple of major transactions with very low direct
yield requirements were finalized in Stockholm in the latter half of 2007. British fund
manager Morley, for example, conducted its
first own acquisition in Sweden when it purchased the Blåfjäll property in Kista for SEK
750 M, and Humlegården acquired the MEA
building on Norrmalmstorg, which was
divested for SEK 370 M.
In December 2007, Vasakronan took possession of a property in Frösunda that it
acquired earlier from JM. The property was
acquired for SEK 375 M and has a rentable
floor space of about 10,000 m2. The property is fully leased and the tenants include
Bayer, Tibnor, Amgen and VMware.
Future outlook
A continued strong economy is expected in
2008 in Stockholm, which is the engine of
the Swedish economy, with gross regional
product (GRP) growth of 3.1% according to
Nordea’s 2008 forecast and 2.6% for 2009.
This will lead to a continued rise in employment. Demand for commercial premises
depends on the general economic climate
and the vacancy rate will probably continue
to decline somewhat.
Rent levels in both central and Greater
Stockholm could level out due to the large
addition of new constructions in the market.
At the same time, rent levels for the most
modern office premises that make efficient
use of space, with a high standard and
located in central areas may continue to
increase.
Significant interest remains for property
acquisitions in Stockholm and Sweden.
Vasakronan Service Partner
in Stockholm Region
Office-related services are offered to tenants through Vasakronan Service Partner.
The services are offered from service platforms in the following properties: Garnisonen, Kista Entré, Kista Science Tower,
Hötorg City, Westmanska Palatset, Primus, Tegen and Rosteriet.
• Services in greatest demand in Stockholm are conferences, restaurant, janitorial and telephony services.
• 70% of all of Vasakronan’s tenants in
Stockholm and Uppsala utilize one of
Vasakronan Service Partner’s services.
• Largest clients: Philips, Svensk
Försäkring Administration, IBC Euroforum and IBM.
27
Uppsala
Strengthened position for Vasakronan
Growth in Uppsala remained strong, which with
its 185,000 inhabitants, is Sweden’s fourth-largest city.
Small and medium-sized service companies
dominate the business sector. The public sector is
the largest employer, with two universities, the
municipality and the county council employing
approximately 30,000 people. The manufacturing
industry largely comprises high-technology companies and is strongly linked to research at universities.
With more unique faculties, international
pharmaceutical companies, more government
agencies and broad medical expertise, Uppsala is
the Nordic region’s leading medical center. Comprehensive research in information technology is
also conducted in the city. An important reason
that companies establish operations in Uppsala is
the opportunity to work closely with the universities. Research is pursued at both of the universities and research-intensive companies are creating job opportunities in new sectors.
Labor market trends were positive, with rising
employment in 2007. The County Labor Board
has a positive growth forecast for 2008 and
believes, for example, that the construction industry, finance, property, personal and cultural services and other industries will continue to report
increases in employment. Overall, employment in
Uppsala is expected to rise by 1.4%.
In December 2007, Vasakronan acquired the
Kungsängen 4:4 property in central Uppsala.
Vasakronan’s other properties are primarily
located around Stora Torget, Svartbäcksgatan, St.
Persgatan and Dragarbrunnsgatan. The largest
property is at Hamnesplanaden, with such tenants as the National Food Administration and the
County Administrative Board.
Vasakronan has sought possibilities for expansion
in central Uppsala for many years. In 2006, the
property portfolio was doubled through the
acquisition of 12 properties and an ongoing project from Norrporten. The properties are located
primarily in the city center and contain office and
retail premises.
The market for modern offices remains stable.
Rents for modern offices in prime locations in
central Uppsala amount to about SEK 1,7501,900/m2.
The vacancy rate is low and has been at this
level for many years. However, vacancies rose
slightly in the past year, mainly as a result of new
constructions, although these were limited. The
largest vacancies are found in Pfizer’s former
premises in Fyrislund, now Uppsala Business Park
which is owned by Klövern. However, more space
was leased in Uppsala Business Park in 2007. The
vacancy rate in Uppsala amounted to 5%, an
increase of 1 percentage point during the year.
During the year, Vasakronan signed new contracts for 11,500 m2 in Uppsala, of which 5,600 m2
comprises new leases and 5,900 m2 renegotiated
contracts. The highest rent levels in Uppsala were
about SEK 1,900/m2 and the vacancy rate
amounted to 5%.
New tenants include broadband operator Blixtvik, BoCity Bobutik, Venturion Group and Bevakningsassistans.
During 2007, 10,000 m2 of office space in the
Vasakronan-owned Sleipner block was completed. Tenants include Ramböll and the Social
Insurance Agency.
Demand for retail premises is high and rents
have risen considerably. The level at prime locations amounted to about SEK 4,000–5,000/m2.
IN UPPSALA
Uppsala
Strategic focus
%
SEK/m2
1,500
6
1,000
4
500
0
2
03
04
05
06
07
Tenant 8
0
2,000
National Food Administration
Municipality of Uppsala
County Administrative Board Social Insurance Agency Tax Board
H&M
Property market
Interest in the acquisition of properties remains
high, although sales were low in 2007. At the
end of the year, Vasakronan acquired the Kungsängen 4:4 property in central Uppsala through
a corporate transaction valued at SEK 107 M
from GE Real Estate. The property is a five-storey
office building with approximately 6,850 m2
space that is fully occupied. Tenants include the
County Labor Board and several retail tenants.
Castellum’s subsidiary Aspholmen acquired an
office premises in Fyrislund, Uppsala in December
2007 for SEK 27 M. Aberdeen Fastighetsfond
Sverige acquired the Årsta 69:1 property in Fyrislund at the southern approach to Uppsala. The
property has rental floor space of 15,000 m2, of
which two thirds is logistics and the remainder
offices.
Future outlook
Growth will remain high in Uppsala. In the center,
a new street environment is being developed and
retail is being expanded. At the same time, new
residential properties are being built in the city
center. The City of Uppsala plans to create a city
center, housing and infrastructure for nearly
250,000 inhabitants, which is the population
forecast for 2030.
The modernization and expansion of the station area with a new Travel Center will improve
public transport to and from Uppsala, which
should benefit the labor market in the city.
Demand for office premises is anticipated to
continue to rise at the same time as relatively little
office space is built. This will lead to lower vacancies and slightly higher market rents in the future.
Retail rents are expected to continue to
increase, particularly in the parts of the city center
that are being refurbished and where bus traffic
has been transferred to Kungsgatan.
MAJOR PROPERTY OWNERS,
Uppsala
Floor space, m2
13,100
8,300
6,400
6,100
5,700
3,400
Property owner Commercial premises, m2
AP Fastigheter
Vasakronan
Uppsala Akademiförvaltning
Atrium Ljungberg
Boultbee
140,000
132,000
120,000
49,000
41,000
The table shows the major landlords for office, retail, warehouse
and hotel facilities in leased properties.
Vacancies, (%)
2
28
PROPERTY PORTFOLIO, DECEMBER 31, 2007, UPPSALA
Floor space (m2)
Tax
value
(SEK M)
Year built/
rebuilt
Property, address
•
• 2 Boländerna 33:2, Kungsängsvägen 19–31
• 3 Dragarbrunn 14:5, Svartbäcksgatan 8
• 4 Dragarbrunn 18:1, Gamla Torget 5
• 5 Dragarbrunn 18:9, Stora Torget 4
19:10, Dragarbrunnsgatan 35,
• 6 Dragarbrunn
Påvel Snickares gränd 1
7
Dragarbrunn
Dragarbrunnsgatan 40,
• Vaksalagatan20:3,
8
• 8 Dragarbrunn 21:1, S:t Persgatan 21
23:4, Dragarbrunnsgatan 39,
• 9 Dragarbrunn
Vaksalagatan 5
10
Dragarbrunn
26:3, Kungsängsgatan 7
•
•11 Fjärdingen 10:6, Sysslomannagatan 7
26:1, Drottninggatan 3,
•12 Fjärdingen
Fyristorg 10
3:1, Vaksalagatan 19–21,
•13 Fålhagen
Roslagsgatan 2–4
1:25, Kungsgatan,
•14 Kungsängen
Dragarbrunnsgatan
15
Kungsängen
4:4 Bangårdsgatan 5–9
•
13:6, Samaritergränd 5,
•16 Kungsängen
Kungsgatan 79
16:6, Kungsängsgatan 43,
•17 Kungsängen
Hamnesplanaden 1–3, 5
1 Boländerna 12:1, Danmarksgatan 24
•18 Kungsängen 37:13, Kungsgatan 107–115
25:4, Storgatan 11,
•19 Kvarngärdet
S:t Olofsgatan 27
•20 Kåbo 5:4, Dag Hammarskjölds väg 11
1960/1988
Ware
house/
Retail/
storage/
Office
Resi-
dential
Other
Rental Vacancies,
Total revenues
rental
floor
2007
value
space
(%)
(SEK M)
Major tenants
18
618
–
–
4,376
–
1,504
6,498
3
20
1990
126
15,687
86
425
19
–
2,548
18,765
21
6
Uppsala Municipality, Defense Materiel Administration,
Kraftkällan, TFS Technology
1972
82
3,156
1,936
963
57
–
15
6,127
12
–
Esprit, Gina Tricot, Hemtex, IP Only, Apoteket, Kicks
1990/2001
13
940
483
–
20
–
5
1,448
3
–
Proffice, Itura, Mood
1978
91
1,169
4,131
658
298
382
130
6,768
13
2
H&M, Duka, Wedins, Consulting, IT-Arkitekterna,
1966/2005
44
1,286
1,797
–
29
873
255
4,240
5
5
UBC, Swedish Board of Agriculture, Sans Pro, Pitchers
1966/1999
38
3,318
–
–
–
89
286
3,693
5
–
SHB, County Employment Board
1903/1997
Andersson & Tillman, GE Healthcare
7
610
–
–
–
–
–
610
1
–
ACTA, REK
1961
30
1,668
889
–
103
–
74
2,734
4
–
Bolander & Co, Seat 24, Exor, Riksmäklaren, Restaurang Etage
1962
62
4,049
–
664
253
–
–
4,966
7
17
1965/1986
25
1,727
703
–
77
–
–
2,507
3
8
Starbreeze, Liv o Fred, Studentbokhandeln
1900-tal/
1982/1995
25
1,935
102
–
179
–
96
2,312
3
–
Bo City, Vasakronan, S:t Lukas stiftelsen Radio City 106,5
1961
SEB, Samrand & Co, Synoptik Sweden, Poolia
117
710
3,634
–
234
7,538
483
12,599
14
–
Restaurang Lucullus, Norrmans Skor, Köksmiljö i Uppsala, Sivia
Matcenter, Housing
2006–2007
23
9,407
–
–
75
–
–
9,482
14
3
Ramböll, Starbreeze, Swedish Social Insurance Agency
1972/2001
68
5,266
1,500
–
82
–
–
6,848
-
–
Swedish Public Employment Service, Allradio, Hälsocentrum, Resia
1929/1955
3
86
285
–
271
–
820
1,462
1
7
Cameleont, Helenas Träningsverk
1975
288
26,727
621
1,539
1,982
–
504
31,373
38
4
National Food Administration, County Administrative Board, Tax
Board, National Land Survey, SBC, Slottduvan, Swedish
Enforcement Authority
1987
109
6,945
7,096
–
677
–
86
14,804
17
6
Axfood, Orexo, Pegasus, Posten, Landstingsservice, Alina, Aircall,
Fyris Kontor
1957
9
1,220
–
–
22
72
5
1,319
1
36
Helt Suveränt Artist & Nöjesproduktion
13
1,920
–
–
191
–
–
2,111
2
23
Golder Associates, National Road Administration, National Road
88,444 23,263
4,249
8,945
8,954
6,811
140,666
169
5
1955/1987
Safety Organization Uppsala County (NTF)
1,190
Total
19
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29
Region Göteborg
Rental
revenues
Operating
surplus
Market
value
16%
17%
17%
• Vasakronan’s properties are concentrated to the
Inom Vallgraven, Gullbergsvass and Ullevi areas.
• Vacancy rates have declined to 2%.
Göteborg is continuing to perform favorably, with a
population increase at an annual rate of just under
1%. Population forecasts indicate a rise in immigration in the next three years. The forecast for the
labor market is also positive and the County Labor
Board anticipates growth in employment of about
1.9% prior to summer 2008. There are recruitment
requirements in practically all occupations.
Trends in traditional industry were positive and
recruitment of new employees continues. In addition, the service sector expanded substantially.
Accordingly, unemployment in the Göteborg region
declined sharply, a trend that has been noted for the
past two years.
The Municipality of Göteborg is working to
increase Göteborg’s functional labor-market region
to include 1.5 million inhabitants by 2020. This
means that the towns of Uddevalla, Trollhättan,
Borås and Varberg will be within commuting distance of central Göteborg. An aim is that 40% of
journeys to and from work will be made using public
transport, compared with today’s level of 20%.
Important infrastructure initiatives that will
affect the development of the region include the
West Link railway line that is expected to be completed by 2020. This line will provide central Göteborg with new railway stations at Nordstaden, Haga
and Korsvägen. The Marieholm connection, which
30
• The market value of properties in Göteborg
amounted to SEK 7.8 billion.
• SEK 1.5 billion is being invested in the conversion and
construction of the police building, detention center
and court at Ullevi.
is expected to be constructed by 2015, will relieve
the E20 motorway and the Götaland high-speed
railway line is expected to be completed by 2020. A
new river connection, initially as a cycle and pedestrian bridge, is planned.
Strategic focus
Vasakronan is the largest player in the office market
in central Göteborg, with a portfolio in attractive
submarkets, such as Inom Vallgraven, Östra and
Västra Nordstaden, Gullbergsvass, Norra Älvstranden and Gårda.
The property portfolio is in centrally located clusters of efficient, high-quality office buildings. The
company has a total floor space of 300,000 m2, of
which slightly more than 200,000 m2 is offices in
central locations.
The major tenants are companies in the finance
sector, construction industry and central government authorities.
Vasakronan acquired three properties during
2007. One property was acquired from Folksam
close to Avenyn for SEK 125 M, a smaller property
close to Järntorget was acquired for SEK 35 M and
Vasakronan’s first property in Norra Älvstranden in
Göteborg was acquired at a value of SEK 104 M.
The aim is to continue to expand in central Göteborg.
Providing services has become increasingly
important in enhancing convenience for tenants,
and in Göteborg, tenants are offered a wide range
of office-related services through Vasakronan
Service Partner. Service options include reception
and ad hoc services and conference, restaurant
facilities and tenant services.
The favorable growth in employment means that
demand for office premises remains strong in Göteborg. The office-intensive industries in the finance
and consulting sector are expected to report higher
growth in employment than the rest of the labor
market.
Prime rents in Göteborg’s CBD amount to SEK
2,250/m2, an annual increase of SEK 100/m2 or
4.5%. This increase is partly due to the high activity
in the consulting sector, which has strong spending
power, but primarily attributable to the limited
access to modern and efficient offices.
Demand is highest for smaller premises, with
slightly more than 65% of activities taking place for
areas of less than 1,000 m2. Rental volumes are primarily driven by smaller companies expanding or
seeking new premises. In 2007, turnover was slightly
more than 100,000 m2, and was slightly more than
122,000 m2 in 2006.
RENTAL REVENUES,
GÖTEBORG REGION
500
MARKET VALUE,
GÖTEBORG REGION
SEK M
8,000
GÖTEBORG REGION
SEK M
6
7,000
400
5
6,000
4
5,000
300
4,000
200
3
3,000
2
2,000
100
1
1,000
0
%
03
04
05
06
0
07
Rental revenues in Göteborg increased
through systematic leasing activities.
03
04
05
06
0
07
The market value increased as a result of higher
market rents and investments in progress.
2006
2005
2007
2006
2005
2007
2006
2005
2007
2006
482
444
418
328
308
281
7,872
6,312
5,401
2
3
Market rents for medium-class offices in the
Göteborg CBD are at about SEK 1,900/m2 per year
and in the remainder of the city center at SEK
1,400/m2 per year. The gap between the prime and
medium-class categories declined substantially in
recent quarters and this trend may continue in
2008. The premises that best meet current demands
from small and medium-sized companies for premises with open floor plans and high technical standard have the highest potential for continued rent
increases. The availability and price of parking structures may become a key factor as Göteborg
becomes more condensed and parking structures
disappear.
The vacancy rate in Göteborg fell by a total of
2.2 percentage points in 2007 to 8.2%. Vacancies
declined primarily in the modern portfolio, particularly high-profile properties or new properties,
which means that more property owners are willing
to invest in and upgrade their premises portfolios.
New constructions, which were low in 2007, will
rise in 2008 and 2009 when a number of projects
are scheduled for competition, including the Svanen
block in Gårda, buildings for the Swedish Prison and
Probation Service and Göteborg City Court at Ullevi
Park and Nya Navet at Norra Älvstranden. This
involves a total of slightly more than 65,000 m2 or
2.1% of the total property portfolio.
04
05
06
07
Vasakronan’s property portfolio comprises modern
and efficient offices in favorable locations.
Göteborg Operating surplus, SEK M
03
Market value, SEK M
Vasakronan’s vacancy rate fell to 2.7%. Vasakronan signed new leases for 12,540 m2 of floor
space, excluding new projects, and renegotiated
10,700 m2 in 2007. Office premises were leased for
peak rents of SEK 2,700/m2. The average lease
term is 5.7 years.
Leases were signed with such companies as Esswell International, Invision Media and Aktiv Arbetsmedicin.
Turnover for retail floor space in the central
business district is low and there are virtually no
vacancies. Property owners are continuing to
develop the Nordstan shopping center, which is
the largest in the Nordic region. Vasakronan owns
about 30,000 m2 of retail floor space, with peak
rents of SEK 6,600/m2.
Property market
Interest in the Göteborg property market remains
high from both Swedish and foreign investors. Property turnover is traditionally low in Göteborg. Nevertheless, a number of transactions took place during
the latter half of 2007 at lower direct yield levels,
despite rising interest rates and the general unrest in
the credit markets. The limited property offering is
driving up prices.
Transaction volumes rose by 25% to slightly
more than SEK 8 billion in 2007. Aberdeen Property
Properties,
No. of
floor space registered
2005
2007
2007
6
300
27
Fund acquired a property portfolio in Göteborg and
Mölndal for SEK 1.3 M and GIC Real Estate from Singapore acquired Kungshuset in Göteborg from
LaSalle Investment Management for SEK 1.1 billion.
A shopping center in Högsbo was acquired by Dutch
company Eurocommercial Properties from AspelinRamm Fastigheter for SEK 811 M, and Nordea Markets Norge bought Europahuset in Göteborg from
US company Blackstone for SEK 700 M in the
autumn.
Vasakronan Service Partner in
Göteborg Region
Office-related services are offered to tenants
through Vasakronan Service Partner from the
Läppstiftet service platforms in Lilla Bommen
and Järntorget.
• Services in greatest demand in Göteborg are
conference, restaurant, banqueting and janitorial services.
• 40% of all of Vasakronan’s tenants in Göteborg use one of Vasakronan Service Partner’s
services.
• Major clients: Schenker, Öhrlings PricewaterhouseCoopers, Eka Chemicals, Apoteket and
the County Employment Board.
31
Göteborg
1
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2
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3
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13
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8
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12
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9
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4
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4
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5
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* Vasakronan will take possession of Lorensberg 45:16 in 2008
Interest in project properties has increased. The
post office building by the Central Station will be
remodeled into a hotel. Alecta’s property on
Mölndalsvägen, Mektagonen, containing about
24,000 m2 of space, is being converted into a modern office building. New production of office buildings will increase in the next few years from a very
low level.
Vasakronan is responsible for many of the ongoing projects in Göteborg through the projects at the
Law Enforcement Center in the Ullevi area.
The police building at Ernst Fontell Square is
being converted and extended. This project encompasses approximately 30,000 m2 and, when the
extension completed, the new police building will
have 55,000 m2 of floor space. Vasakronan is investing about SEK 753 M in the new police building in
Göteborg, for which long leases have been signed.
32
A project is planned for the Swedish Prison and
Probation Service and is scheduled for completion in
2010. The project includes the construction of
20,800 m2 of new floor space comprising a detention center and office premises and is expected to
cost approximately SEK 580 M. The project also
encompasses the conversion of the existing police
building. A 25-year rental contract was signed with
the Prison and Probation Service and is pending
approval from the Swedish government.
A new building for Göteborg City Court is being
constructed in the same area. The land on which the
City Court is to be constructed is currently owned by
Ullevi Park 1 i Göteborg AB, which is owned equally
by Vasakronan and NCC. The project cost is estimated at SEK 320 M. A 25-year rental contract was
signed with the National Courts Administration for a
new City Court and the Rent and Leasehold Tribunal
in Göteborg.
Future outlook
Vasakronan is a leading player in Göteborg city
center. Vasakronan will be carrying out major projects around Ullevi in the next few years for a total
of SEK 1.5 billion. Another project, comprising a
multi-storey office building between Nya and
Gamla Ullevi, is also being planned in collaboration with NCC. Vasakronan acquired its first property on Norra Älvstranden in 2007.
The economic trend in Göteborg remains favorable. The forecast is for gross regional product to
continue to increase in 2008 by 3.0% and in 2009
by 2.6%. The service sector and construction industry are expected to continue to report healthy
growth.
Rents in Göteborg will increase slightly for
offices in prime locations.
PROPERTY PORTFOLIO, DECEMBER 31, 2007, göteborg
Floor space (m2)
Year built/
rebuilt
Property, address
Tax
value
(SEK M)
Ware
house/
Retail/
storage/
Office
Resi-
dential
Other
Rental Vacancies,
Total revenues
rental
floor
2007
value
space
(SEK M)
(%)
Major tenants
Göteborg West
Vallgraven 16:6, Södra Hamngatan
• 1 Inom
17–23
Vallgraven 17:3, Drottninggatan 13 /
• 2 Inom
V Hamngatan 10/ Kyrkogatan 20–22
3
Inom
Vallgraven 32:1, Kaserntorget 6
•
• 4 Inom Vallgraven 35:12, Kaserntorget 1
Vallgraven 60:8, Ekelundsgatan 1–3 /
• 5 Inom
Otterhällegatan 4
• 6 Inom Vallgraven 60:9-10,
Ekelundsgatan 5–9 / Kungsgatan 20–22 (T)
• 7 Inom Vallgraven 69:5, Rosenlundsgatan 8
• 8 Nordstaden 8:27, Östra Hamngatan 24
17:6, Kronhusgatan 9–13 /
• 9 Nordstaden
Torggatan 16–18
1891/1999
75
3,311
272
–
154
–
1813/1994
59
3,741
362
1939/2000
46
1,751
771
1,557
5,294
–
91
–
135
8
–
–
66
–
248
NTI skolan, Norma Communication, Göteborgs Pantbank,
4,260
7
11
2,905
5
–
Embryo Webbyrå, Opticore, Cliff Design
Aon Sweden, I.B.E Trading, Initiva AB, Hotelzon Sweden
1956/1999
37
1,581
255
–
111
–
0
1,947
3
3
Arkitektkopia, Resevaruhuset, Ellermore, Protek
1965/1997
146
11,544
413
2,964
750
–
219
15,890
19
5
National Board of Fisheries, County Administrative Board, Invision
Media Group
1964/2000
133
7,255
1,806
3,841
172
–
720
13,794
19
1
EuroPark Väst, Eltel Networks Infranet, SBC, Biljardpalatset i gbg
1974/1997
167
12,432
3,035
3,463
1,988
–
491
21,409
27
1
BoConcept, Swedish Enforcement Authority, Swedish Prison and
Probation Service, City of Göteborg
1974/2000
1,139
21,269 21,650
–
–
53
42,972
102
–
SEB, Åhléns, Hemköp, H&M, MAQS, Sjätte AP-fonden
1862/1996
58
2,185
123
–
1,865
4,498
10
–
Kontorshotell, Nordens Teknikerinstitut, Göteborg Property Board
1984
19
3,128
–
–
–
–
–
3,128
4
–
Swedish Police Service
1991
103
7,850
469
1,917
318
–
22
10,576
14
3
JM, Previa, Lernia, SEB
1964/2002
325
15,245
–
1,017
–
–
5,819
22,081
42
–
Swedish Police Service, Swedish Prison and Probation Service
1864/1966
30
1,348
643
–
148
–
20
2,159
4
–
Advokatfirman Delphi & Co, Fritidsresor, Elboden
1905/1987
46
1,980
637
–
211
–
_
2,828
6
4
Panduro Hobby, CAP, Adecco
325
–
Göteborg East
37:1, Vågmästaregatan 5,
• 1 Brämaregården
Hisingen
2
Gårda
18:24,
Gårdatorget
1–2
•
• 3 Heden 42:1, Skånegatan 5
Vallgraven 19:7, Drottninggatan 37 /
• 4 Inom
Östra Hamngatan 29
5
Inom
19:18, Kyrkogatan 44 /
• Östra Vallgraven
Hamngatan 31
• 6 Juristen 4, Torggatan 3, Mölndal
• 7 Lorensberg 55:3, Södra Vägen 25
219:7, Fiskhamnsgatan 6 / Skär• 8 Majorna
gårdsgatan 1
9
Masthugget
4:5, Tredje Långgatan 18
•
•10 Masthugget 10:3, Första Långgatan 22
30:6, Första Långgatan 3–7 /
•11 Masthugget
Järnvågsgatan 3
•12 Nordstaden 28:2, Kvarnbergsgatan 2
•13 Nordstaden 31:1, St Eriksgatan 3
Övriga: Heden 42:2, Högen 3:1
1984/1992
55
7,819
–
–
138
–
231
8,188
9
13
1887/1992
28
1,942
–
–
–
–
–
1,942
4
–
1918/2002
144
13,011
–
590
1,181
–
654
15,436
22
2
FB Engineering, SENAB, Organon
1929/1996
17
2,129
–
–
–
–
–
2,129
2
40
1950
22
2,139
164
2,413
2
–
NorDen Olje, Visionael Sweden, Företagskliniken
1941/1993
160
10,739
2,615
1860/1996
107
9,209
–
1787/2000
25
2,079
247
4
–
–
1981/1991
192
14,103
1984/1986
340
20,941
1989
453
2004
55
–
110
1,437
Swedish Police Service, Vattenfall Fastigheter
Swedish Police Service, Social Services Administration
1,207
_
336
16,334
22
1
Järnhuset Bränneriängen, Swedish Public Employment Service,
Feelgood Hälsa
–
–
–
–
9,209
15
–
Ångpanneföreningen, Jasper Design
447
82
–
–
2,855
4
–
Fungera Göteborg, Restaurang Simba, Adecco IT & Engineering
–
–
–
836
836
2
–
463
3,271
1,140
–
18,977
24
0
Sweco-koncernen, Know It Consulting, Nordic Bulkers
576
4,588
1,108
–
155
27,368
43
0
NCC, Vattenfall Fastigheter, Lawson Software, Swedish Club
24,802
921
6,167
1,197
_
3,960
37,047
61
2
Ekman & Co, Göteborgs Stift, Hälsan & Arbetslivet, Wistrand
Advokatbyrå, Öhrlings PriceWaterhouseCoopers
3,550
–
348
–
–
–
3,898
4
–
GF Konsult
3,984 207,083 35,624
30,050
10,364
0
17,252
300,373
482
2
Göteborg Gullbergsvass
3:3, Gullbergs Strandg 3–7 A /
• 1 Gullbergsvass
Vikingsgatan 1–5
2
Gullbergsvass
16:1,
• Gullbergs Strandgata
2–8
• 3 Gullbergsvass 1:16, Lilla Bommen 1–2
• 4 Lindholmen 28:1, Theres Svenssons Gata 9
Totalt Göteborg
IN GÖTEBORG
SEK/m2
%
2,000
12
1,500
9
1,000
6
500
3
0
03
04
05
06
07
Tenant Premises
15
0
2,500
GÖTEBORG
Swedish Police Authority SEB
Åhléns
FB Engineering
Sweco
Swedish Prison and Probation Service
Ångpanneföreningen
NCC
Öhrlings PricewaterhouseCoopers
Swedish Enforcement Authority MAJOR PROPERTY OWNERS,
GÖTEBORG
Floor space, m2
26,700
14,000
11,900
9,700
9,500
9,300
9,200
8,400
6,500
5,800
Property owner Commercial premises, m2
Vasakronan
Wallenstam
Diligentia (Skandia Liv)
Castellum
AP Fastigheter
300,000
273,000
204,000
187,000
132,000
Vacancies, (%)
2
33
Öresund Region
Rental
revenues
Operating
surplus
Market
value
18%
17%
17%
• Vasakronan’s property portfolio is concentrated
between Triangeln and Stortorget in central Malmö,
and in central Lund and Brunnshög.
• The vacancy rate in Malmö is 3% and slightly less
than 1% in Lund.
34
• Market value of properties in Malmö and Lund
amounts to approximately SEK 7.6 billion.
• Slightly more than SEK 0.5 billion was invested in
Lund for the construction of a new office for Sony
Ericsson.
Malmö – major investments in projects
Strategic focus
Many new jobs are being created in the Skåne
region and employment continues to grow due to
the strong economy. The increase in employment
in Skåne was 3% (15,300 new jobs) in 2007. Of
the new job opportunities, some two thirds were
added in the private sector, primarily in such
office-intensive industries as the finance and consulting sector. The number of employed persons is
expected to rise by 13,000 (2.5%) in 2008,
according to the County Labor Board.
The attractiveness of the business sector in the
Öresund region has definitely enhanced since the
Öresund Fixed Link opened, and new job opportunities have been created quickly in line with new companies being established. Access to the Danish labor
market is also an important factor behind such
robust growth.
Construction of the City Tunnel commenced in
2005 and will be completed in 2011. The project will
have a strong influence over Malmö in the next few
years. The City Tunnel will boost development of several property projects around the stations that are to
be built.
Vasakronan is the major player in Malmö for commercial premises in locations in and around the
city’s business district. This central location involves
a high proportion of retail premises. The customer
structure is a mixture of private and public-sector
tenants and other operations.
Vasakronan’s portfolio is very centrally located,
with a high proportion of properties along the
pedestrian precinct in Malmö. The strategy is to
consolidate and expand Vasakronan’s market position along the Triangeln – Stortorget axis and into
the Inre Hamnen and Västra Hamnen area. The
company’s position was strengthened in 2007
through the purchase of the Priorn 2 property
adjacent to the Triangeln shopping center, and in
January 2008, through the acquisition of the
Tigern 1 property at the corner of Södra Förstadsgatan and Regementsgatan.
There is also interest in expanding to the new
Hyllie area.
A total of 71,000 m2 was leased in the commercial
premises market in Malmö in 2007, which is 45,000
m2 less than in 2006. This decrease in activities is
partly due to the fewer vacancies in Malmö during
the year, which created a certain matching problem
between demand and directly available premises.
The most intense activities are taking place in
central Malmö and the Västra Hamnen area. The
high demand is reflected in the downward pressure on the vacancy rates that fell in the Malmö
CBD and remained unchanged in Västra Hamnen.
In total, vacancies are 5.6% in central Malmö and
6.6% in Västra Hamnen.
Prime rents in central Malmö rose by SEK 150/m2
to SEK 2,050/m2 and levels are now beginning to
approach the peak of SEK 2,150/m2 noted in
2001. Rents in Västra Hamnen are at about
2,000/m2. Elevated demand combined with the
lack of access to modern office space entails that
there is still scope for a continued increase in rents.
Rents for medium-class premises also rose,
mainly in the Malmö CBD and in Västra Hamnen.
An increasing number of transactions in the
medium-class segment were completed, with
rents of SEK 1,500/m2 in central Malmö.
The vacancy rate in central Malmö may
increase slightly in 2008 since many companies are
RENTAL REVENUES,
ÖRESUND REGION
600
MARKET VALUE,
ÖRESUND REGION
SEK M
8,000
ÖRESUND REGION
SEK M
6
7,000
500
%
5
6,000
400
4
5,000
300
4,000
3
3,000
200
2
2,000
100
0
1
1,000
03
04
05
06
0
07
Strong market presence and attractive commercial
premises generated higher rental revenues.
03
04
05
06
0
07
The market value increased as a result of higher
market rents and investments in progress.
2006
2005
2007
2006
2005
2007
2006
2005
2007
2006
442
98
540
424
94
518
407
94
501
274
64
338
270
62
332
243
61
304
5,833
1,796
7,629
5,247
1,272
6,519
4,861
1,013
5,874
3
1
2
4
1
3
attracted to moving their operations from their
old, out-of-date premises to newly built office
space in Västra Hamnen.
New construction activities in the CBD will
remain relatively high in the future, primarily at
Universitetsholmen, which is now considered to be
part of Malmö city center from having previously
been included in Västra Hamnen. The reason for
this is that current developments in the area have
led to constructions in the city center and Västra
Hamnen becoming increasingly intertwined.
Construction of the City Tunnel is already having ramifications on the rental market, and is a
factor that is favorably impacting rents for properties in proximity to the tunnel exits.
The retail premises market is experiencing stable and slightly increasing rent levels with continued positive trends in retail growth in the Malmö
CBD. An increasing proportion of retailing in this
area is concentrated on the Triangeln-Stortorget
axis, at the expense of other locations in central
Malmö. Retailing operations on the outskirts of
Malmö are continuing to grow.
Vasakronan has a vacancy rate of 3% in
Malmö. Vasakronan signed new leases for about
04
05
06
07
Systematic leasing work contributed to a
very low vacancy rate.
Malmö
Lund
Öresund
03
Market value, SEK M
10,300 m2 of floor space, and renegotiated leases
for 21,800 m2 of office and retail premises. Rents
have been as high as SEK 1,900/m2 for offices and
SEK 5,000/m2 for retail premises. The average
lease term is 4.2 years.
A new lease was signed for the Karin 11 property with the County Administrative Board, and
the intention is to concentrate and enhance the
efficiency of the premises.
A new lease contract with Hotel Baltzar has
made it possible to develop the Claus Mortensen
35 property with better retail space and simultaneously improve conditions for hotel operations. A
construction contract has commenced and is
scheduled for completion in 2008.
Leases were renegotiated with SEB for the Kronan 10 and 11 properties. In conjunction with the
renegotiations, SEB condensed its premises,
enabling the lease of 1,819 m2 to Parkering
Malmö in 2007. Major remodeling was carried out
to the Magnus Stenbock block for Ernst & Young,
which took occupancy in the summer.
Triangeln is Malmö city’s largest shopping center, with 7 million visitors and sales of SEK 700 M.
The center, which is owned by Vasakronan, offers
Properties
No. of
floor space, registered
2005
2007
2007
4
1
4
340
71
411
34
14
48
a wide range of retail stores, focusing on readymade clothing. NCC Property Development has
planning rights for the adjoining land, on which it
is possible to develop additional space for retail
trade, offices and stores. A decision on a new
detailed plan is scheduled for 2008.
Vasakronan Service Partner in
the Öresund Region
Office-related support services are offered via
Vasakronan Service Partner from the Bylgia
service platform. In 2008, a new service platform
will be opened in the Sirius block .
• The most sought after services in Malmö are
conferences, catering and janitorial services.
• 24% of all of Vasakronan’s tenants in Malmö
use one of Vasakronan Service Partner’s
services.
• Major customers are SWECO, Findus and the
Swedish National Tax Board.
35
Malmö
Property market
The market in Malmö/Lund experienced a high
level of activity from many international players
during the year. German company Oppenheim
and Dutch company Redevco are examples of
players that made acquisitions during the year.
Many transactions took place with Swedish companies, for example Atrium Ljungberg acquired
the Bohus 7 property in Malmö’s Mobilia shopping
center.
However, mainly retail properties were of interest to international investors.
For the full-year 2007, transaction volumes in
Malmö declined. The turnover of properties in
Malmö amounted to SEK 4.3 billion during the
year, compared with properties valued at SEK 6.6
billion in 2006.
Vasakronan strengthened it position through
two property transactions, one in 2007 and one at
the beginning of 2008. Through an exchange
transaction with Wihlborgs, Vasakronan acquired
the Priorn 2 property on St Johannesgatan, adjacent to the Triangeln shopping center. The purchase price amounted to SEK 145 M and the estimated property yield is nearly 7%. The property
contains 10,000 m2 of space, of which 5,700 m2 is
offices and the remainder retail premises, housing
and garage space. In return, Vasakronan sold the
Neptun 6 property on Västergatan for SEK 85 M.
The property has about 5,000 m2 of floor space
and contains only offices. The property will be
entirely vacated when the National Courts Administration moves out at year-end 2008.
Tigern 1, a corner property facing Malmö’s
largest pedestrian precinct of Södra Förstadsgatan, was acquired for SEK 69 M in January
2008. The property contains 2,500 m2 of offices,
housing, retail premises/restaurants and storage
and is essentially fully leased. The largest tenant is
Jensens Bøfhus.
36
3
�
16
�
2
�
1
�
Slottsparken
10
8 �
�
14
�
17
4 �
�
15
�
13 �
4
12 �
�
5
6�
�
5
�
15
�
Stortorget
Gustav
Adolfs Torg
11 �
3
�
12
�
6
16 �
�
8
�
7
1�
�
2
�
7
�
�
9
�
11
Stadshuset
Triangeln
13
�
Future outlook
Vasakronan is a leading player in central Malmö
with a concentrated property portfolio in prime
locations and a differentiated customer structure.
Major efforts are being made to further develop
Malmö and Vasakronan is actively participating in
the development of central Malmö. The large
investments in infrastructure are contributing to
high confidence in the future.
Economic development in the Öresund region
is strong, resulting in a gross regional product
9
�
10
�
growth rate of approximately 4.5% during 2007.
The forecast is for the gross regional product to
increase by 2.8% in 2008 and 2.3% in 2009.
Future prospects look promising, not least because
of the diverse business structure in the Öresund
region. The region also reported a strong trend in
employment.
The rental trend in Malmö will remain stable,
with peak rents for offices of up to SEK 2,100/m2
and up to SEK 5,500/m2 for retail premises.
PROPERTY PORTFOLIO, DECEMBER 31, 2007, Malmö
Floor space (m2)
Year built/
rebuilt
Property, address
Tax
value
(SEK M)
Ware
house/
Retail/
storage/
Office
Resi-
dential
Other
Rental Vacancies,
Total revenues
rental
2007
floor
value
space
(%)
(SEK M)
Major tenants
Malmö North
• 1 Bastionen Nyköping 1, Malmöhusvägen 1
• 2 Bilen 6, Västra Varvsgatan 10
• 3 Bylgia 1, Skeppsbron 17
• 4 Claus Mortensen 26, Södergatan 14
• 5 Ellenbogen 36, Baltzarsgatan 21
• 6 Ellenbogen 38, Baltzarsgatan 19–23
3, Porslinsgatan 6,
• 7 Gasklockan
Malmgatan 1
Michelsen 9, Adelgatan 1–3 /
• 8 Hans
N Vallgatan 51–52
9
Karin
11, Kungsgatan 13 /
• Drottninggatan
18,19
10, 11, Bruksgatan 2 /
•10 Kronan
N Vallgatan 36–48
11, Kungsgatan 15 /
•11 Nora
Drottninggatan 16
•12 Oscar 1, Stortorget 31
•13 Oscar 17, Stortorget 27, 29, Lilla Torg
•14 Residenset 5, Adelgatan 6
•15 Rundelen 34, Rundelsgatan 14
1, Jörgen Kocksgatan 9 /
•16 Sirius
Navigationsgatan 3
Conow 57, Kalendegatan 6–8 /
•17 Von
Själbodgatan 6–8
1918/1996
27.6
3,299
3,299
4
0
2000
60.6
5,709
5,709
9
0
Lawson
1960/2005
93.8
7,994
377
8,802
16
0
Findus, Sweco
1967/1980
32.6
179
431
Court of Appeal
1,907
712
439
3,237
4
19
1924
847
258
215
341
1,661
2
0
Q-branch, Travelflow, KID, A-search
1969
3,735
1,251
464
949
6,399
8
1
Läkarhuset Ellenbogen, Medicinsk Röntgen, Praktikertjänst
51
0
Swedish Police Service, Swedish Prison and Probation Service
1993
293
14,621
239
1974
1931/2002
41.8
1,973
6,551
133
14,496
2,974
1898/2001
149.4
14,505
1980/1996
215
25,945
1903/1989
932
3,080
Harry & Son, Assistera, Accenture, City Advokaterna
6,069
5,587
26,516
8,524
7
0
Trygg Hansa, Ajilon
1,027
997
19,494
21
3
County Administrative Board, Aveva, Swedish Police Service
3,215
1,204
18,924
19
14
3,437
323
33,717
34
1
32
2,520
438
313
1910/2001
171.5
9,651
1,842
688
1878/1996
14.6
1,236
236
1946
16.8
1,931
459
1992
62.8
6,935
1984
65.6
6,249
77
1903/2001
61.4
1,695
2,149
57
SEB, Trygg Hansa, P-Malmö
Tax Board, Swedish Enforcement Authority
30
3,301
3
20
1,543
13,781
22
3
Biograf Spegeln, Setterwalls Advokatbyrå, Ranstam & Partners
85
1,557
2
3
GE Money Bank, Job Security Foundation, Bolia
Å & R Carton, Alecta, Kwintet
2,390
2
22
InArk, Svensk Hypotekspension, Structor
1,745
314
184
9,178
9
5
Enea, Konica Minolta, JM, Mynthuset, National Maritime
Administration
584
28
745
7,683
11
0
County Administrative Court
195
95
4,134
8
2
Benetton, Bolagret
6,424
11
0
Spirit, Gant, Cross, Bianco,Vero Moda
1,068
16,675
25
3
Hilding Anders, Intrum Justitia, Fritidsresor, SF Bio, DesignTorget,
Granit
Etage, Café Mäster Hans, Mosaik
Malmö South
1, Södra Förstadsgatan 17 /
• 1 Björnen
Kärleksgatan 2
• 2 Björnen 38, Södra Förstadsgatan 23, 25–27
• 3 Carl Gustav 5, Södra Tullgatan 4
• 4 Claus Mortensen 34, Stortorget 6
• 5 Claus Mortensen 35, Södergatan 20
• 6 Delfinen 12, Södra Förstadsgatan 2
• 7 Elefanten 23, Södra Förstadsgatan 22, 24
• 8 Elgen 14, Södra Förstadsgatan 9–11
• 9 Kaninen 26 (T) Södra Förstadsgatan 33–51
•10 Kaninen 27, Södra Förstadsgatan 49
•11 Magnus Stenbock 2, Gustav Adolfs Torg 12
•12 Magnus Stenbock 4, Södra Tullgatan 3
•13 Priorn 2 (T), S:t Johannesgatan 2–6
13, Celsiusgatan 33–35,
•14 Smedjan
Östra Farmvägen 5
Jörgen 7, Södergatan 28,
•15 S:t
Kalendegatan 27
16
Tigern
7, Södra Förstadsgatan 7
•
1904/1999
98.8
2,073
1,155
108
3,088
1961/2000
204.6
5,836
2,726
1,323
1,097
4,625
1851/2002
33.4
309
1,619
76
881
2,885
4
4
1898/1995
25.8
336
187
1,463
1,986
2
69
1908/1995
52.5
2,898
470
297
1,311
75
5,051
5
21
1938/1988
85.4
1,252
1,787
513
2,236
130
6,622
10
1
Cervera, Boomerang, Vagabond
1937/1998
25.5
890
540
401
1,510
2,409
5,750
12
0
SF Bio, Sony Center, Esprit, EspressoHouse
1958/1989
472
17,532
44,894
71
0
Triangeln shopping center, Hotel Hilton Plaza, Folksam
1958/1989
185.8
982
23,907
25
3
Triangeln shopping center
1990
64.2
5,527
6
69
Willis Coron, Resia
1963/2007
11,929
13
13
Akademibokhandeln, MQ, Partner Tech, Ernst&Young, Weekday
10,103
0
0
Berendsen Textil, SIF, Region Skåne
4,631
12,290
9
4
Du Pont, Swedish Migration Board
1,806
5,140
7
9
Hamrelius Bokhandel, Proffice
2,335
5
0
Telia, Modehuset Lindri
339,824
442
3
9,400
137
8,983
8,042
910
5,006
223
128
170
123
6,829
3,227
1,439
434
1944
86.6
5,745
90
1,670
60
1937/1971
35.1
5,955
588
1,116
330
344
1929/1994
1894/2006
42.8
7,776 10,049
704
1,705
955
187
1,018
3,007 170,618 41,755
Total Malmö
39,952
4,990
0
2,538
4
1,126
23,384
22,771
41,344
Hotell Baltzar
4-You, Svensk Fastighetsförmedling, GEAB
IN MALMÖ
2 500
SEK/m2
%
2,000
Tenant
15
12
9
6
500
0
03
04
05
06
07
3
1,500
1,000
Vasakronan’s MAJOR TENANTS,
MALMÖ
Triangeln shopping center
Swedish Police Authority
Tax Board
Hotel Hilton Plaza National Courts Administration
SEB
MAJOR PROPERTY OWNERS,
MALMÖ
Floor space, m2
28,000
22,000
19,000
17,500
14,300
10,000
8,000
Property owner
Floor space, m2
Vasakronan
Wihlborgs
Stena Fastigheter
Briggen/Castellum
Kungsleden
310,000
234,000
136,000
108,000
74,000
(SEK/m2)
Market rent,
Vacancies, (%)
37
Lund
Stabile property market with potential
The university town of Lund is one of the most stable property markets in Sweden. The business sector has expanded and grown substantially over a
long period of time and more than 11,000 new
jobs have been created in the past 12 years. More
than one in five employed people work in the
research and development sector, where large
amounts of growth are generated.
Lund’s inhabitants have a very high level of
education and more than 55% hold higher education degrees. Lund also has the leading university
in the Öresund region, with 40,000 students, of
whom 3,600 are involved in graduate research.
Strategic focus
Vasakronan’s property portfolio in Lund is focused
on the central area, the IDEON Research Park and
Brunnshög. Vasakronan is strengthening its market
position at Brunnshög through the new construction of the Nya Vattentornet 4 property for Sony
Ericsson which is scheduled for completion in 2008.
Lund is dependant on the performance of Sony
Ericsson and Ericsson and other companies associ-
IN Lund
%
12
1,500
9
1,000
6
500
3
0
03
04
05
06
07
0
adjacent to Sony Ericsson’s existing buildings in
the Nya Vattentornet block in Lund. The new
office building has been designed in collaboration
with architect Gert Wingårdh and is slightly more
than 27,000 m2 in size. In addition, a new parking
garage for approximately 370 cars will be built
adjacent to with the office buildings. The total
investment is valued at SEK 540 M. The deal also
means that the existing office contract at
Brunnshög in Lund has been renegotiated.
Vasakronan will implement a comprehensive
remodeling and extension to the police building
in Lund. A new 15-year lease agreement has been
reached between Vasakronan and the police
authority for approximately 7,000 m2 of space.
A new office building with slightly less than
2,000 m2 of space will be constructed next to the
existing police building and all floor space has
been leased. The largest tenant in this project is
the Glimstedt firm of lawyers. Occupancy is
scheduled to take place in stages from March 1,
2008.
In Lund, Vasakronan signed new leases for
2,300 m2 of floor space and renegotiated 5,200
m2. Rent levels during renegotiations increased
by 3%. Peak rent levels are approximately SEK
Vasakronan’s MAJOR TENANTS, LUND
MAJOR PROPERTY OWNERS, LUND
Tenant
Sony Ericsson
Swedish Police Authority
County Archives
Tax Board
Lund District Court
2,000
SEK/m2
ated with these operations. A possible slowdown
in the economy could have a major impact on the
development of the area. These types of companies largely demand modern premises of high
quality and with a high technical standard.
Rents remained stable in central Lund in 2007,
and activity on the market was low. Rents for
modern offices at Lund NE, which includes the
IDEON research park, rose by 6%.
The average rent for modern offices in central
Lund is about SEK 1,500/m2. The rent for newly
constructed offices in Lund rose and rental levels
started to reach SEK 2,000/m2.
The vacancy rate in central Lund was at the low
level of 3.9% at year-end, corresponding to a 0.5percentage point decrease in the past 12 months.
The area around Lund NE has performed positively in recent years and the vacancy rate is now
at 5.9%. More projects will be completed in the
next few years. Demand is high from such companies as Briggen and Ikano Fastighets AB.
Vasakronan and Sony Ericsson have signed
new lease agreements that will result in Vasa
kronan constructing two new office buildings for
Sony Ericsson in Lund, with occupancy scheduled
for the first half of 2008. They will be situated
Floor space, m2
32,000
6,400
3,800
3,500
3,500
Property owner
Floor space, m2
Vasakronan
Briggen/Castellum
Wihlborgs*
Första Fastighets AB Ideon**
Lunds Kommunala Fastighets AB
70,000
69,000
59,000
55,000
42,000
** Two properties in IDEON with 38,978 m2 of space are classed
as industrial properties.
** These properties are classed as industrial properties.
(SEK/m2)
Market rent,
Vacancies, (%)
38
1,925/m2 and the vacancy rate in Vasakronan’s
properties is less than 1%.
Included among those contracts that were new
or renegotiated are SEB for 1,496 m2 and Öhrlings
PricewaterhouseCoopers for 1,367 m2.
6
�
Property market
Activity in the property market remained favorable
in 2007. Wihlborgs acquired Alfa 1 and Alfa 2 in
the IDEON research park, Axfast acquired the Färgaren 24 property in central Lund in an exchange
transaction with Diligentia, and Sagax acquired
properties from Gambro.
The yield requirement in Lund is between 5%
and 6%
3
�
1110 5
�
��
Domkyrkan
1
�
Järnvägsstation
Future outlook
4
�
The trend in Lund remains strong and is positively
affected by growth in the Öresund region.
Lund is experiencing an expansive phase and
many companies will continue to expand, which
could increase the demand for office premises.
In light of the high percentage of new construction of offices, rent levels are expected to
even out in 2008.
The Swedish Government decided to commission the University of Lund to form a secretariat for
the planning of the ESS (European Spallation
Source), a multidisciplinary research center based
on the world’s most powerful neutron source. The
secretariat has engaged highly qualified international experts. Following a roundtable conference
held in Copenhagen in October 2007, progress
was made on the decision of where the EES is to
be built. If the ESS is to be located in Brunnshög, in
Lund, it could mean investments of approximately
SEK 11 billion and 500 employees with up to
5,000 visiting researchers.
Vasakronan will continue to invest in
Brunnshög as Lund’s next development area.
2
�
8
�
9
�
7
�
Vasakronan has an agreement with the Municipality of Lund covering about 12,500 m2, entailing
building rights for approximately 20,000 m2 of
floor space. A parallel draft assignment is underway and the evaluation is expected to be completed during the first quarter of 2008. Another
project that is to be developed in 2008 is at
Päronet in Lund, for which building rights have
been secured for about 8,800 m2. Project design
activities are in progress and provided that a number of rental contracts are signed, production
could commence during the second half of 2008.
PROPERTY PORTFOLIO, DECEMBER 31, 2007, LUND
Floor space (m2)
Property, address
12, Kyrkogatan 1–3 /
• 1 Apotekaren
Lilla Fiskaregatan 2
2
Arkivet
1,
Dalbyvägen
4 / Arkivgatan 1
•
• 3 Benzelius 1, Dag Hammarskjölds väg 2
• 4 Galten 25, Mårtenstorget 12–14
• 5 Häradshövdingen 2, Byggmästaregatan 2
• 6 Nya Vattentornet 2 och 4, Odarslövsv 2
• 7 Päronet 14, 17 och 18, Ruben Rausings gata 9
• 8 Repslagaren 31, Stora Södergatan 45–47
• 9 Sandryggen 1, Järnåkravägen 3
•10 Spettet 3, Byggmästaregatan 1–3
•11 Spettet 4, Fjelievägen 8, Slöjdgatan 2
Total Lund
Year built/
rebuilt
Tax
value
(SEK M)
Ware
house/
Retail/
storage/
Office
Resi-
dential
Other
Rental Vacancies,
Total revenues
rental
2007
floor
value
space
(%)
(SEK M)
Major tenants
1912/1981
54
1,182
703
–
468
1,128
540
4,021
6
0
1901/1970
–
1,864
–
–
1 926
–
–
3,790
3
0
SEB, Lunds Kommun (Kino)
County Archives
1958/2001
75
5,734
418
–
411
–
235
6,798
10
0
Euro Finans, PTC Sweden, Finn Inn, Sony Ericsson Mobile
Communictions
Apoteket Hjorten, McDonald’s, IHE
1986
33
951
778
223
151
–
7
2,110
4
0
1958/1994
38
2,736
–
–
712
–
–
3,448
5
0
Lund District Court
297
27,690
–
–
–
–
376
28,066
42
0
Sony Ericsson Mobile Communications
–
1,581
–
–
–
–
–
1,581
2
11
70
5,468
–
2,167
355
–
36
8,026
9
1.2
1996–99
1910/1997
1980
Ramböll, Tetra Pak
CSN, Öhrlings PricewaterhouseCoopers
1957/2002
54
4,915
–
–
443
–
572
5,930
8
0
Tax Board, Swedish Enforcement Authority
1965/2002
60
3,760
–
204
–
–
2,714
6,678
8
0
420
1
0
Vasakronan, Mallverkstan
1,899
2,594
4 493
1,128
4,480
70,868
98
1
1965/2003
4
393
685
56,274
27
39
Project development
SEK 10 billion project portfolio
In recent years, yield requirements on properties in
Swedish urban areas have fallen and it has been
difficult to find suitable properties to purchase at
reasonable prices. During the period, Vasakronan
worked intensively with developing building rights
and generating profitable property projects connected with the company’s own properties. This
work was carried out with a low risk profile and
most development projects were only started once
most of the projects had secured tenants.
Projects in progress, SEK M
2003
2004
2005
2006
2007
590
1,058
1,410
2,841
3,145
Projects in progress
The police building, Heden 42:1, in Göteborg,
13,000 m2 is being converted and 30,000 m2 of
new space is being constructed. The Police Service, the Prosecution Authority and the Prison and
Probation Service will have their premises here.
Vasakronan is investing SEK 753 M in the new Law
Enforcement Center and a 25-year lease has been
signed. The project is scheduled to be completed
for occupancy in 2009
In the Rådhuset property, Fruktkorgen 1 on
Kungsholmen, in Stockholm, complete refurbishment is under way and an extension is being constructed in the inner courtyard. The National
Courts Administration has signed a 25-year lease
for 24,000 m2 of floor space, of which approximately 9,000 m2 relates to the extension. Investment costs are estimated at SEK 550 M, with
occupancy set for 2009. The National Courts
Administration will thus have a functional, modern courthouse.
In Lund, a new office for Sony Ericsson is being
constructed, with occupancy scheduled for the
first half of 2008. The property is adjacent to Sony
Ericsson’s existing buildings in Brunnshög. The
new building comprises slightly more than 27,550
m2 of space and the new garage has approximately 370 spaces. The total investment amounts
to SEK 540 M.
A total of 17,233 m2 of offices shall be converted in the Svea Artilleri 14 property on Valhallavägen in Stockholm. A garage with 235 spaces
will also be constructed. The project volume is
approximately SEK 419 M. The project will be
completed for occupancy in 2010.
A total of 16,500 m² of new floor space is
being built at the Heden 46:1 property in Göteborg. The Göteborg City Court and the Rent and
Leasehold Tribunal in Göteborg will group their
operations in these premises. Vasakronan and
NCC Property Development are utilizing jointly
owned building rights and Vasakronan is investing
SEK 160 M. The lease term with the National
Courts Administration is 25 years.
In Göteborg, 16,260 m2 of the Nordstaden
8:27 property is being converted and extended for
Åhléns and SEB. The total investment amounts to
SEK 135 M and the project is expected to be completed by June 2008.
projects in progress
Vacancy
Investment,
Floor space,
Estimated
rate,
2
date of comp.
area
Location
Property
SEK M
m
Göteborg
Heden 42:1, Police building
Stockholm
Fruktkorgen 1, Kungsholmen
Lund
Nya Vattentornet 4
Stockholm
Svea Artilleri 14, Östermalm
Göteborg
Heden 46:1, City Court 1)
Göteborg
Nordstaden 8:27
Stockholm
Beridarbanan 11, City
Stockholm
Vega 4, City
Malmö
Kronan 10 & 11
Lund
Spettet 3
Total
Other minor projects
Total
1) 40
Jointly owned with NCC, Vasakronan’s share is reported
753
550
540
419
160
135
114
88
84
80
2,923
222
3,145
43,000
Dec. 2009
23,910
June 2009
27,550
Dec. 2008
17,233
Dec. 2010
16,455
Dec. 2009
16,260
June 2008
8,800
June 2008
3,931
June 2008
13,369
Dec. 2008
8,680
Dec. 2008
179,188
0
0
0
100
0
0
30
87
13
0
The fourth Hötorg building Beridarebanan 11,
in Stockholm, underwent a complete renovation
in 2007. A total of SEK 114 M was invested in the
renovation to create one of Stockholm’s most
attractive office properties. Office space was
offered to the market in 2007 and most has been
leased.
Vega 4 in Vasastan, Stockholm, is being extensively renovated for SEK 88 M. Occupancy will
take place in 2008 and a number of leases have
already been signed.
The conversion of Kronan 10-11 on Bruksgatan/N Vallgatan in Malmö was completed for
SEK 84 M. SEB’s regional office in Malmö is the
tenant and condensed its premises when the lease
was renegotiated.
Vasakronan is conducting a comprehensive
refurbishment and extension to the police building
in Lund. A new 15-year lease was signed between
Vasakronan and the Police Service for 7,180 m2 of
space. Vasakronan is also constructing a new
office building adjacent to the police building
encompassing 1,500 m2 of floor space, which is
practically fully leased
Future projects
A large-scale project in Gasklockan 3 in Malmö is
scheduled to begin in 2008, when 26,441 m2 of
space will be converted for the Police Service and
the Prison and Probation Service, and a 39,000 m2
extension will be built for the Police Service, the
Prison and Probation Service, the Prosecution
Authority, the National Courts Administration and
the National Economic Crimes Bureau. Leases for
OPERATING SURPLUS TREND
projects in progress
500
SEK M
400
300
200
100
0
07
08
09
10
The operating surplus is expected to increase
in pace with projects being launched and
occupancy by tenants.
25 years have been signed, some of which are
pending approval from the Government. A total of
SEK 1,100 M may be invested.
At the Heden 42:4 property, north of the police
building in Göteborg, the new construction of
20,800 m², including the remodeling of part of
the existing building, is being planned. The Prison
and Probation Service project is expected to be
completed in March 2010.
In Frösunda, the second stage involving 10,000
m2 of floor space will begin. The property is fully
leased to JM and will be taken over by Vasakronan
when the tenant moves in. The price will be the
market value at June 30, 2008.
There is the possibility of constructing two
wings of approximately 8,235 m2 of office space
in the Svea Artilleri 14 property on Valhallavägen
in Stockholm.
The first stage is planned of an expansion of
the Kungsängen 16:6 property in central Uppsala
involving 4,800 m2 of offices, including a garage.
Folksam’s premises in the recently purchased
Lorensberg 45:16 property in Göteborg will be
converted in 2008 for SEK 50 M, with occupancy
set for 2008.
Development project
In addition to projects in progress worth SEK 3.1
billion and future projects valued at SEK 2.4 billion, there is a large number of development projects in existing properties and building rights.
Eight projects have detailed plans but for which
building rights have not been utilized. Detailed
plans are currently being prepared in four projects
and there are also ten projects for which no such
detailed plans exist. The investment volume of the
projects that are expected to be commenced in
the next five years amounts to about SEK 4.5 billion. These projects are described in tables on this
page.
Järvafältet
Vasakronan’s biggest development project is at
Järvafältet. Vasakronan owns and administers
approximately 400 hectares of land within Sundbyberg and Solna.
A coordinated effort has been underway since
1997, in close collaboration with the respective
municipalities, to identify and facilitate optimal
land use. The result of this work is that two new
districts have been established in Ursvik and Järvastaden. The goal is to also to be able to establish
a new district in Kymlinge.
Vasakronan has worked actively to develop
building rights and also to safeguard ecological
and recreational values. As a result, Vasakronan
contributed to establishing a nature reserve along
the Igelbäcken waterway.
Intensive development efforts were conducted
in 2007 and demand for residential building rights
was strong. The market price for residential building rights was in the SEK 4,000–7,000/m2 range,
depending on proximity to transportation and the
character of the development.
Järvastaden
Järvastaden is being developed by a company
jointly owned with Skanska, which develops building rights primarily for residential properties.
Development efforts are underway in Solna and
Sundbyberg. Production of housing is ongoing in
Solna, with the first occupancies taking place in
2007. An agreement was signed with JM,
whereby Vasakronan is successively selling its
share of building rights, corresponding to about
250,000 m2.
Ursvik
Development of building rights, primarily for housing applications, at Ursvik in Sundbyberg is currently underway with NCC in a jointly owned company. Work is progressing in stages through 2015,
and two new detailed plans for residential properties became law in 2007. Planning is also underway for a larger area facing the new E18 motorway, with offices, retail and services. The new light
rail line between Alvik and Kista will run through
the area. Of a total of approximately 300,000 m2
of building rights, about 145,000 m2 have been
developed to date and sold on to NCC.
Kymlinge
Plans are in progress for the construction of a new
district, Kymlinge, near Kista. A subway station
has already been prepared for this area. When
developed, Kymlinge could eventually contain
500,000–800,000 m2 of building rights. Vasakronan initiated a dialog with the municipality regarding suitable alternatives for the future enhancement of the development area and the further
enhancement and refinement of the Igelbäcken
nature reserve.
FUTURE PROJECTS
Location
Property
Floor space, Investment,
SEK M
m2
Malmö
Gasklockan 3
65,441
Göteborg
Heden 42:4
29,000
Solna
Frösunda Park 10,000
Stockholm Svea Artilleri 14
8,235
Uppsala
Kungsängen 16:6
4,800 Göteborg
Lorensberg 45:16
6,818
Total
124,294
1,100
580
375
220
100
50
2,425
PROJECTS WITH DETAILED DEVELOPMENT PLANS
BUT UNUTILIZED BUILDING RIGHTS
Location
Property
Gross floor area m2
Solna Frösunda Park
20,000
Sollentuna Helenelund 7:1
15–20,000
Göteborg Ullevi Park Heden 46:2 1)
16,000
Solna Ekelund 1
15,000
Uppsala Kungsängen 16:6
15,000
Lund Päronet 17,18
6,500
Malmö Bilen 6
6,000
Göteborg Ullevi Park Heden 42:2
1,500
Total
95,000–100,000
1)
Jointly owned with NCC, Vasakronan’s share is reported.
DEVELOPMENT PROJECTS – POTENTIAL BUILDING
RIGHTS
Location
Property
Gross floor area m2
Development projects - ongoing detailed plan work
Sundbyberg Västra Brotorp
40,000*
Stockholm Primus 1
15–20,000
Stockholm Rosteriet 7
11,000
Stockholm Vega 4
3–5,500
Total
69,500–76,500
Development projects – ongoing detailed plan
work1)
Stockholm Bromsten 9:1
80–160,000
Stockholm Ekelund 1 25–45,000
Täby Näsby Park 57:4
30–40,000*
Stockholm Tre Vapen 5
20–40,000
Solna Ulriksdal 2:1
20–40,000
Huddinge Tingshuset 1
10–12,000*
Uppsala Fålhagen 3:1 (Sivia)
5–10,000
Solna Charlottenburg 11
5,000
Stockholm Väbeln 2
3,500
Total
198,500–355,500
Kymlinge
Sundbyberg
500–800,000
* Residential
1) For these projects, Vasakronan has undeveloped land for which
work is underway to produce concepts that will subsequently
lead to detailed plans.
41
Services
Premises and services hand in hand
Vasakronan Service Partner is Vasakronan’s wholly
owned service company that offers proprietary
services in telephony, conferences, restaurants,
tenant services and reception with Room Service.
The aim is to strengthen tenants’ loyalty to
Vasakronan by offering services for as cost-efficient and convenient working environments as
possible.
The service offering is an important supplement to Vasakronan’s leasing operations, since
related services are often in demand by potential
tenants. Companies can reduce their costs and
simultaneously receive improved service by purchasing such external services as reception, telephony and tenant services.
Services are offered from hubs in twelve properties in Stockholm, Göteborg and Malmö. In
addition to working with existing customers, open
conference and restaurant operations are conducted in eleven properties.
Partner follows the vision of “Real services for real
people,” which supports and develops the meeting with customers and focuses on always delivering an even and high level of service.
Simple methods that help employees handle
complaints, for example, have also been implemented. The aim is to create a common foundation of values for service in the organization and to
ensure an optimal service experience among customers.
Financial performance
Services are developed based on customer requirements and market trends. In order to meet and
exceed customer expectations, Vasakronan Service
Vasakronan Service Partner reported strong
growth and has been designated a “gazelle company” (up and coming growth company) by
Swedish financial daily Dagens Industri for several
years. Growth in sales was very high and in four
years, sales have risen by 53%. In 2007, revenue
amounted to SEK 147 M (140), of which SEK 19 M
(21) from Vasakronan. Vasakronan Service Partner’s profit margin has remained at about 5%
since it was founded and the forecast for 2010
indicates a continued positive profit margin. Competing companies generally have a profit margin
of 1-5%. Operating margin in 2007 declined to
4.4%, primarily due to increased costs of raw
revenueS AND OPERATING MARGIN1)
revenue by product area
Customized services
150
%
SEK M
10
80
materials in the restaurant operation. The number
of permanent tenure employees in 2007 totaled
157 (146).
Service hubs have mainly been developed
around Vasakronan’s property clusters, such as
Garnisonen, Kista and the Hötorg buildings in
Stockholm, and in Lilla Bommen in Göteborg.
The largest service hubs in 2007 were Garnisonen, Kista Entré and Kista Science Tower with
revenues of SEK 94 M, accounting for 64% of
total revenues.
The restaurant and conference catering products were the largest product area with revenues
amounting to SEK 71 M, which accounted for
48% of total revenues.
Competitors
In recent years, the facilities management (FM)
market has been consolidated and the three largest players in the market are Coor Service Management, ISS and Addici. All of these companies
offer services in the three areas of services related
to operations, properties and production. The
leading property companies in the urban regions
are continuing to offer tenants certain services
through sub-suppliers.
revenueS PER PLATFORM1)
SEK M
Garnisonen 24%
Others1) 21%
70
120
8
90
6
Läppstiftet
(Lilla Bommen) 8%
60
50
Westmanska
Palatset 8%
40
60
4
30
2
0
0
Kista Science
Tower 18%
30
Kista Entré 21%
20
10
d
Ro
om
s
ice
rv
er
Se
42
rtn
pa
gh
ou
hr
st
ns
ice
tio
rv
ica
Se
un
m
m
ice es
Co serv
is
t
em
pr
ce
s
an
Revenues for 2007 amounted to SEK 147 M (140), of which
SEK 19 M (21) is from the Vasakronan Group. The operating margin declined to 4.4% due to increased costs of raw
materials in the restaurant sector.
1) Income after depreciation divided by revenue.
an
n
Te
n
re
e
nf
n
nt
ra
io
pt
au
Revenues, SEK M
Operating margin, %
0
Co
07
ce
06
st
05
Re
04
Re
03
The largest service platform was Garnisonen in Stockholm.
1) Primus, Spring, Tegen, Järntorget, HötorgCity, Bylgia
and Rosteriet.
Future outlook
Vasakronan Service Partner operates in the facility
management industry that handles services for
workplaces and properties required by organizations and companies for their core operations to
function optimally. Growth in the industry is estimated at about 10–20% per year and would be
only slightly affected by the economic climate,
according to a study conducted by Ernst & Young
in autumn 2007.
The model developed by Vasakronan Service
Partner is designated as Facilities Sharing, whereby
several customers share the same services to identify the most efficient solution for each individual
company. This model also provides opportunities
for small and medium-sized companies to gain
access to related services.
Rigorous requirements are imposed on the
organization and efficiency of facility management suppliers, since the market expects an
increasingly high level of service at lower costs.
Vasakronan Service Partner will continue to
develop its operations in the three major urban
regions in order to increase Vasakronan’s market
share among the company’s existing tenants. The
focus in 2008 is to enhance the company’s presence on the market so as to expand awareness of
Vasakronan and increase sales, to continue the
drive on a joint service culture and to continuously
develop service hubs with new services.
Overall customer assessment*
Percentage who responded
Yes & Yes, definitely
”Overall, I am highly satisfied with the quality
and level of service of the related services
provided by Vasakronan Service Partner”
“It is a clear advantage that Vasakronan is
able to offer this type of related services
to us tenants”
* Customer survey 2007
Largest customers
2007
86%
92%
1 Philips – tenant
2 Svensk Försäkring Administration – tenant
3 SKD Eurokonf – external
4 IBC Euroforum – external
5 IBM – tenant
Percentage of tenants who purchase
services*
Stockholm
Göteborg
Malmö
70%
40%
20%
* In addition, customers make cash payment for certain services,
such as lunches.
CUSTOMER SATISFACTION
Would you recommend Vasakronan
Service Partner if someone asked you?
100
%
80
60
40
20
0
04
05
06
07
Yes, definitely
Yes, probably
A total of 88% of customers said that they would recommend Vasakronan Service Partner if someone asked, of
which 60% responded “Yes, definitely” and 28% “Yes,
probably.”
43
A climate-neutral company.
At the forefront of sustainable development.
Environment and responsibility
Sustainable development
For Vasakronan, sustainable development involves
conducting our operations and managing our
properties with minimal impact on the environment, adopting an ethical approach to the treatment of our employees, customers and other
stakeholders, and focusing on the development,
health and work environment of our employees.
Vasakronan’s sustainability work is based on
the aspects identified as priorities through internal
environmental assessments, etc. Through a perceptive dialog with stakeholders, we ensure that
we focus on the right issues.
are responsible for issues pertaining to, for example, ethics, the environment, human rights, equality and diversity.
Corporate Staff Human Resources handles
general employee issues and Corporate Staff
Quality and Environment addresses environmental
issues. A number of environment coordinators
work in each region and are responsible for supporting and coordinating the environmental work
of their units. Corporate Staff Communications
coordinates and conducts information operations
in sustainability matters.
Social responsibility
The year in brief
• Reduced amount of oil by 30%, a saving
SEK of 1.6 M
• Climate-neutral district heating and district
cooling
• Reduced carbon dioxide emissions by 40%
• Higher heating energy efficiency – 25% better
than Swedish average
• Environmental certification valid until 2010
• Environmentally friendly vehicles used
• Low sickness absence of 3.8% in the Group
• Gender distribution, 46% women, 54% men
• Engaged employees, high job satisfaction
• Most satisfied customers according to Satisfied
Customer Index
• High demand, improved operating profit
Governance
Control instruments are the processes produced
for the Group and a number of policies for such
areas as ethics, procurement, information, diversity and equality and environmental activities.
These policies are underpinned by the company’s fundamental values: business expertise, open
communications, ethics and morals, continual
improvements and environmental awareness.
Discussions are held at an annual conference
with all employees on how these values are to be
reflected in day-to-day, practical work duties. A
self-examination in ethical and moral issues is also
performed.
The President and Group management have
the ultimate managerial responsibility for sustainability work. The Board evaluates the function of
internal-control systems in accordance with the
Swedish Code of Corporate Governance and the
Guidelines for External Reporting by State-owned
Companies. The State’s Ownership Policy stipulates that the boards of state-owned companies
46
As one of Sweden’s largest property owners,
Vasakronan has a major responsibility to work
toward sustainable development and thereby a
reduction in climate impact.
As a large employer in the property industry
that develops office and retail premises for more
than 60,000 people in five of Sweden’s largest cities, Vasakronan has a significant impact on society.
This insight requires both cooperation and constructive dialogue with key stakeholders, that is,
the players with whom there is a distinct interdependence. Vasakronan communicates with these
stakeholders continuously in various ways to
obtain guidance on how the work should be
developed.
Vasakronan’s property management activities
are conducted based on the knowledge that properties impact the environment throughout their
lifecycles, from planning, project design and the
construction stage via management and conversion to demolition. This is controlled by the environmental policy, the far-reaching environmental
management system and the general and detailed
targets.
Vasakronan has held ISO 14001 environmental
management system certification since 2001. This
certification has been extended twice and is currently valid until 2010.
All employees receive basic environmental training in cooperation with The Natural Step project.
By participating in various projects and such
external environmental networks as the BLICC
Business Leaders Initiative on Climate Change, the
Building/Living dialogue project (ByggaBoDialogen) and the Ecocycle Council, the company’s
environmental work is continuously further developed.
As one of the largest owners of properties in
the city of Stockholm, Vasakronan also participates “City in cooperation” and Stockholm’s cli-
STAKEHOLDERS DIALOGUE
Employees
• Development discussions
• Employee survey
• Personnel meetings
• Intranet
Customers
• Customer discussions,
Target dialogues
• Customer survey
• External NKI
(Satisfied customer index) survey
• Event surveys
• Customer magazine, website
• Customer events
• Annual reports
Media and other opinion makers
• Continuous media contact
• Correct, relevant and reliable
information
Vasakronan
Politicians and supervisory authorities
• Continuous contact with local and
central politicians and civil servants
Owners
• Appoint Board
• In addition to voting rights at
Annual General Meeting
• Dialogue with Board Chairman
and President
Capital market, property
and loan analysts
• Capital market days
• Quarterly reports
• Annual reports
• Annual stakeholder survey
Suppliers and partners
• Procurement and
purchasing meetings
Network and trade associations
• Local networks to develop each city
• Commercial and trade associations
in the business and property sector
mate pact for sustainable city development. The
company also works closely with representatives in
Malmö and Göteborg to pursue sustainability
issues.
A nature reserve has been established along
the Igelbäcken waterway.
Environmental audit
All properties are analyzed and audited based on
an environmental perspective.
The audits, which are undertaken applying the
most utilized method in the industry, namely the
Environmental Status of Buildings, provide knowledge about hazardous substances within the
property, such as moisture, radon and energy consumption.
Environmental impact
Energy consumption and such chemicals as asbestos, mercury, lead and PCB in materials built into
the properties have the greatest impact on the
environment.
Active measures have been taken for many
years to reduce energy consumption, which has
resulted in Vasakronan’s figures for its use of heating energy in premises being about 25% below
the national average (Statistics Sweden 2005).
This is primarily due to a continuous focus on
energy issues involving:
• Committed and knowledgeable operations
that conduct detailed follow-ups of the consumption of heating, district cooling, electricity
and water
• Including energy as an item on the agenda of
management meetings
• Installing savings techniques
Efficient and reduced use of energy has positive
effects on the climate through reduced emissions
of greenhouse gases.
Chemicals in buildings are well documented in
all buildings that are audited and these chemicals
are handled in accordance with statutory requirements.
Built-in materials (walls, floors, ceilings, floor
coverings) in new constructions, conversions and
extensions are primarily selected from the Byggvarubedömningen database (formally MilaB),
which performs comprehensive environmental
assessments of building products.
Approximately 5,000 building and chemical
products are found in the database.
Contractors involved in construction processes
are required to have a documented environmental
and quality policy and be able to produce declarations of building products for selected materials.
Environmental risks
The focus of Vasakronan’s preventive environmental work is placed on the areas of greatest environmental risk. The work on identifying environmental risks shows that such risk can be found in the
company’s properties and the operation of them,
and in tenants’ operations.
Both environmental and economic consequences may arise and the company’s image may
be affected.
Environmental risks are primarily found in the
areas of land, moisture and chemicals in buildings.
The general assessment is that these risks are very
minor.
Environmental risks in properties, operations and tenants’ operations with the greatest
potential for harm to the environment, finances and image
Environmental risk
Risk exposure
Oil
Medium
Comments
Being successively discontinued, 2% of heating
consumption, 11% of C02 emissions
Land
MediumAn audit has not been performed for all land
Moisture in buildings
LowBuildings are subject to environmental audits*
Chemicals:
– in existing buildings according to legislation Very low
Buildings are subject to environmental audits*
– in new constructions and conversions
Low
New products are subject to environmental
(built-in hazardous substances)
assessments
Cooling
Low
High level of district cooling 50%
Emissions from tenants’ operations
LowFew premises that are sources of harmful emissions
Heating
Very lowLow consumption, high level of climate-neutral district heating
Electricity
Very low“Green-labeled electricity”
Work methods
Very lowWell-anchored environmental management systems
* 15 properties pending environmental audits.
47
Energy efficiency
Reduced consumption
Similar to other property companies, Vasakronan
consumes a large amount of energy and energy
efficiency is the most important parameter from a
sustainability perspective. According to the Swedish
Energy Agency, premises and residential properties
account for 36-40% of energy use in Sweden. A
large portion of this energy is used for heating.
Energy has long been one of the highest priorities
in Vasakronan’s environmental work. There are several reasons for this. As insight into the issue of climate change has increased, customers and stakeholders are imposing ever stricter demands on the
responsibility of companies. Legislators are tightening requirements on environment work, while
energy prices are rising in pace with fossil fuels being
phased out and insurance companies increasing their
premiums in the wake of the greenhouse effect.
The consumption of district heating declined in
2007 from 93 kWh/m2 per year to 91 kWh/m2 per
normal year, while electricity consumption, including the operations of tenants, decreased from 95
kWh/m2 per year to 94 kWh/m2 per year. Consumption of district cooling fell by 7% from 47
kWh/m2 per year to 44 kWh/m2. Consumption has
not been adjusted to a normal year.
The ever-increasing demand for uniform temperatures in premises, and the associated need for
cooling, is creating ever increasing energy requirements which, from an environmental perspective,
can be negative. Accordingly, Vasakronan strives
to reduce the need for cooling in premises during
extremely hot summer days so as to reduce carbon
dioxide emissions.
In 2007, one of the agreements signed was for
district heating to replace oil in the Primus property in Stockholm. Power limiters in the control
systems for heating and cooling have been
installed in properties in Stockholm. The oil heating plant in Bromsten, Stockholm, was upgraded
with a new oil boiler and more efficient control
and regulating equipment.
Oil consumption declined by approximately
200 m3 or 30% in 2007, primarily through
expanded heat pumps and more efficient control
and regulating equipment
Control systems with “rated values” for heating consumption were also put into operation in
Göteborg. The energy dialogue with tenants and
employees is also continuously developed. Environmentally friendly vehicles have been introduced in operations.
CONSUMPTION OF HEAT, ELECTRICITY AND WATER INCLUDING TENANT OPERATIONS
heating
One of the results of the continuous work on energy savings was that
Vasakronan’s figures for its use of heating energy in premises amounted to
about 25% below the national average. The average use of energy for district
heating of premises in 2006 was 120 kWh/m2 according to Statistics Sweden.
Over the past five years, consumption of district heating per m2 declined
by 15%, electricity per m2 by 2%, water by 12% and the consumption of district cooling by 2%. Carbon dioxide emissions amounted to a total of 1,500
tons on an annual basis at the beginning of 2008. Since measurements began
in 2003, carbon dioxide emissions per square meter of premises floor space
have been reduced from 19 kg CO2/m2 to approximately 1 kg CO2/m2, a
decline of more than 90%.
The single largest source of emissions in the operations is purchased
district heating.
48
ELECTRICITY
250
125
250
125
200
100
200
100
150
75
150
75
100
50
100
50
50
25
50
25
0
0
0
03
04
Total GWh
05
06
07
Normal year kWh/m2
03
04
Total GWh
05
06
07
0
kWh/m2 year
Detailed energy goals
DETAILED ENERGY GOALS
Vasakronan’s overall aim is to continue to reduce
the environmental impact of its energy use, which
will primarily take place through more effective
operations and savings techniques. Detailed goals
exist regarding electricity consumption, excluding
tenant operations or so-called operational
electricity, electricity consumption including
tenants’ operations, the use of district cooling,
and that all properties should achieve their “rated
values” for heat consumption by 2010.
Other environmental goals include the complete
discontinuation of oil as a primary heating source
and the establishment of source-sorting plants in
properties where such facilities currently do not
exist.
WATER
Electricity consumption excl. tenant operations2)
Electricity consumption incl. tenant operations
District cooling consumption3)
Measured values compared with estimated theoretical
use of heat – rated value 4)
Proportion of oil in heat consumption
Source-sorting in portfolio
500
50
50
40
600
300
30
30
400
200
20
20
200
100
10
10
0
0
03
04
05
06
07
Liters/m2/year
03
2005
34
95
47
–
92
37
kWh/m2
%
%
102
0
100
97
2
93
97
2
90
–
3
84
CARBON DIOXIDE EMISSIONS
40
Total 1 000 m3
2006
34
94
44
Goal shall be achieved by 2010 when technically and financially feasible.
Refers to operational electricity – fans, pumps, general lighting.
3) Measured values have not been adjusted to a normal year.
4) Rated value states the assessed adjusted normal year’s heat consumption for a building. The goal is for all properties to have a rated value and consumption in line with this by 2010. To date, there are rated values for properties in Stockholm.
400
0
2007
30
85
35
2)
800
0
Goal1)
1)
DISTRICT COOLING
1,000
Unit
kWh/m2
kWh/m2
kWh/m2
04
Total GWh
05
06
07
kWh/m2
30,000
18
25,000
15
20,000
12
15,000
9
10,000
6
5,000
3
0
0
03
Tons
04
05
06
07
08
SOURCE OF CARBON DIOXIDE
EMISSIONS
Company
transportation 2%
Business travel 2%
Heating
District
– oil 11%
cooling 2%
Heating
– district heating 83%
kgCO2/m2
49
Climate neutrality
As an environmentally aware company, Vasakronan wants to assume its full responsibility and, in
its role as a property owner, contribute to a solution to the issue of climate change. Included in
this process is adopting the vision of climate neutrality – that conducting our operations will not
contribute to global warming. As part of this
work, we have calculated the direct carbon dioxide emissions caused by our property operations
since 2003, at the same time as we have actively
endeavored to successively reduce remaining
emissions.
For 2007, the calculations showed that carbon
dioxide emissions totaled 9,500 tons, compared
with 15,000 tons in 2006 and 18,000 tons in
2005. This is a result of such activities as reducing
heating consumption and phasing out the use of
oil as an energy source.
The single largest source of emissions in
Vasakronan’s operations is purchased district
heating, for which emissions differ from one supplier to another, depending on the fuel mix they
use in production.
In 2007, Vasakronan requested and conducted
negotiations with district-heating suppliers on
receiving climate-neutral district heating, meaning that production will not emit additional
amounts of carbon dioxide into the atmosphere.
Production encompasses extraction, transport
and conversion of the fuel to district heating. Calculations include possible reductions in emissions
from CHP electricity.
The promised deliveries, combined with continued reduced energy consumption, mean that
emissions of carbon dioxide will be further
reduced to initially 1,500 tons on an annual basis
from 2008.
For the remainder that could not be eliminated
(smaller amounts of oil, business travel, machinery, etc.), Vasakronan has decided to invest in the
CDM project (Clean Development Mechanism)
which will result in reduced emissions at the corresponding level. The investments were made in
two bio-fueled power station projects in India at
which the plants produce electricity from agricultural residual products such as rice straw, wood
fuels and sunflower stalks. The project has
received certification from the UN’s CDM Executive Board.
Vasakronan’s energy work in brief
• active work on using non-fossil-fuel
energy sources
• use of “green-labeled” electricity in
all properties for six years
• oil for heating phased out – 2%
remains
• measurement of CO2 emission since
2003
• purchase of climate-neutral district
heating and district cooling
• consumption of heating energy –
25% below Swedish average
• committed operations organization
with a continuous focus on energy
issues
• detailed follow-ups of consumption
of heating, district cooling, electricity
and water
• environmental certification since 2001
• savings program, for example the BVF
method, functional controls, efficient
steering systems
• installation of savings techniques –
heat pumps, time controls, forecast
controls and low-energy equipment
• energy is an item on the agenda of
management meetings
• environmentally friendly vehicles used
• video conferences replace travel
50
Environmental policy
The road to climate neutrality
• Calculate the company’s carbon dioxide emissions
• Reduce the company’s carbon dioxide
emissions
• Influence suppliers to have environmentally friendly production
• Purchase CO2 neutral products, for
example district heating and “greenlabeled” electricity
• Neutralize remaining carbon dioxide
emissions by financing projects that
lead to lower emissions at the corresponding level, for example bio-fueled
power plants in India.
To conduct property operations in cooperation with the customer that meet the conditions for a sustainable society.
In addition to compliance with legislation and industry agreements, this involves:
• Reducing dependence on substances from the earth’s crust. This applies to fossil fuels for heating purposes and also, for example, to plastics and metals used in property operations and construction
• Phasing out persistent substances that are not compatible with a natural environment
• Making efficient use of resources
• Working for a satisfactory indoor climate
Overall targets
• In cooperation with tenants,
reduce their impact on the environment.
• Reduce the environmental impact
of the company’s use of transport.
• The environmental status of
the properties shall be known.
• Reduce the environmental impact
of the use of energy.
• Sort waste in cooperation with
tenant and contractors.
• Make conscious choices of materials,
products and methods in the management
of properties, operations and maintenance.
FUEL EMPLOYED FOR HEATING
Electricity Oil
Elect-
Bio- for heat
%
+ coal Waste
Gas
ricity
fuels pumps Peat
Stockholm
Uppsala
Göteborg
Malmö
Lund
17
10
1
4
1
21
57
27
45
0
0
0
17
29
32
3
1
0
0
0
35
6
16
12
15
8
0
3
3
13
0
24
0
0
0
Waste
heat,
other
16
2
36
7
39
The most recently available statistics were used. Sources: environmental reports, contacts with district heating plants.
Natural gas is included under the “Gas” heading. Energy derived from heat pumps is not covered by the table.
In Malmö, waste heat is provided by Nordisk Carbon Black. In Göteborg, waste heat is produced by oil burned at oil refineries. Waste
heat in Stockholm is produced by wastewater treatment plants. Waste heat in Malmö is produced from geothermal water and wastewater sources.
ENVIRONMENTAL CONSIDERATION, ACCORDING TO THE CUSTOMERS
Customers views expressed in the NKI Property Barometer
%
Environmental consideration, total
2003
2004
2005
2006
2007
67 (2)
72 (1)
73 (1)
72 (1)
72 (1)
According to NKI Property Barometer, customers consider that Vasakronan is one of the best property companies when it comes to taking environmental matters into consideration.
Figures in parentheses indicate Vasakronan’s ranking in comparison with other property companies
51
Socio-economic impact
Vasakronan’s assignment from its owner, the Swedish State, is to achieve the highest possible total
return on shareholders’ equity. This is achieved by
having committed employees and satisfied customers who are offered a wide range of functional,
energy-efficient workplaces and related services.
Ever since the company was founded in 1993,
Vasakronan’s performance has exceeded the
requirements of its owners, with the return on
shareholders’ equity surpassing the established
target by SEK 11.3 billion.
REQUIREMENTS FOR CHANGE IN THE VALUE OF
SHARE CAPITAL
SEK billion
Initial shareholder’s equity (Oct. 1, 1993)
Yield requirement and dividends 1993–2006
Yield requirement 2007, 8.1%
Estimated shareholders’ equity to meet
yield requirement
Shareholders’ equity Dec. 31, 2007
6.5
6.8
1.1
14.4
25.7
Difference
11.3
Vasakronan is a long-term player in a fully competitive market and operates under the same conditions as other players. We consider our properties to be long-term investments and not primarily
transaction assets, which is important from a
socio-economic perspective.
Approximately 65,000 people work in premises at Vasakronan’s properties, which demands
responsible management in environmentally protective premises
The company is an important partner and
social developer in the large urban regions in
which its property portfolio is located by conducting such activities as major projects that also create many job opportunities and engage many suppliers. The daily property operations also generate
taxes for society, job opportunities in the cities
where operations are conducted, salaries for
employees and purchasing of suppliers’ products
and services.
Energy savings
As one of the largest property owners in Sweden,
Vasakronan is a major consumer of energy and
energy efficiency enhancements have made a difference in both earnings and environmental impact.
The results of the recent years’ savings program
included consumption levels of heating energy
being 25% lower than the Swedish average for
premises, according to Statistics Sweden. Annual
savings are estimated at about SEK 25 M. In the past
ten-year period, efficiency measures have saved
approximately SEK 150-250 M. Most measures that
have been implemented have not required large
investments since savings are mainly the result of
our personnel more carefully handling and following up existing operating and monitoring systems.
Of the total operating expenses, energy represented 40% (36) in 2007, corresponding to SEK
240 M (207). Costs are expected to rise in forthcoming years as a result of increasing costs for
emissions rights, carbon dioxide tax, energy tax,
etc. There is also the risk of lower levels at storage
reservoirs due to many years of drought, which
has driven up the price of electricity.
Sustainability-related investments/costs
Personnel undergo continuous training to
enhance the optimization of the operations.
Employees also receive continuous training following The Natural Step project. In 2007, investments
were made in more efficient control systems for
the heating and ventilation facilities, including
installing power limiters in many of the properties
in Stockholm. The operations in Göteborg are
optimized through climate agreements with the
heating energy company.
Oil consumption declined by 200 m3 in 2007, corresponding to 30%, generating a saving of SEK 1.6 M.
Investments in sustainable, environmentally
approved materials and more efficient installation
systems are made in conjunction with conversions
and extensions.
All vehicles used by the company in 2007 were
replaced with environmentally friendly vehicles,
which substantially reduces the consumption of
fossil fuels.
In addition to the company’s own efforts to
enhance the optimization of the operations,
investments of about SEK 1 M were made in
“green-labeled electricity,” climate-neutral district
heating and cooling, and purchases of reduction
units in 2007 to secure climate-neutral property
management. Reduction units will offset the consumption of fossil fuels caused by business travel
and heating.
Reporting in accordance with GRI guidelines
Vasakronan’s report on its sustainability work is based on
the Global Reporting Initiatives’ new guidelines for sustainable reporting (G3), published in October 2006.
G3 is placing extended demands on reporting on governance and work methods based on the various subareas
of the guidelines: environment, product responsibility,
work conditions, human rights, finance and society.
Reporting in accordance with G3 can be conducted on several different levels, whereby C is the lowest level and A
the highest. Plus (+) is obtained if the sustainability report is
audited by a third party.
Vasakronan’s own assessment is that its reporting provides a fair reflection of the work in progress and that the
report for 2007 meets the requirements for GRI level C.
52
Employees
Responsibility for employees
Long-term growth in value is created by having
satisfied customers and committed employees. As
an employer, Vasakronan offers the industry’s best
development opportunities and work environments.
Vasakronan’s priority is that all employees have
a great sense of job satisfaction and that they are
involved in the development of the company. An
employee index (VEI) has been produced to ensure
a positive trend in customer focus and motivation
among employees.
excerpts from vasakronan’s employee survey 20071)
Percentage positive towards statement
unit 2007
2006
2005
“On the whole, I enjoy working at Vasakronan”
“I feel that my work is important to achieving Vasakronan’s goals”
“I am able to take charge”
“Vasakronan/Vasakronan Service Partner is an attractive employer”2))
“At Vasakronan we have open discussions about goals and earnings”
“Vasakronan gives employees the opportunity/resources to create
satisfied customers”
%
%
%
%
%
83
94
87
85
80
82
92 89
82
72
93
96
92
–
79
%
84
83
84
“At Vasakronan we listen to our customers” 2
“Vasakronan works actively for greater equality and diversity” “Vasakronan works actively for environmentally adapted property
management”
%
%
92
73
92
76
–
82
%
90
89
88
2007
2006
2005
33
67
6
3.1
46
80
10
246
32
68
9
3.3
44
83
9
250
24
76
6
4.1
44
–
7
261
2007
2006
2005
65
35
29
5.2
34
81
4
157
66
34
21
3.8
31
81
4
146
70
30
29
4.7
38
–
–
99
Figures apply to Group – Vasakronan and Vasakronan Service Partner.
2) Question was new in 2006 employee survey.
1)
KEY FIGURES PERSONNEL1)
Vasakronan
unit
Women
%
Men
%
Employee turnover
%
Sickness turnover
%
Average age
Vasakronan Employee Index, (VEI)*
Average length of employment
Total number of employees
no.
Vasakronan Service Partner
unit
Women
%
Men
%
Employee turnover
%
Sickness turnover
%
Average age
Vasakronan Employee Index, (VEI)*
Average length of employment
Total number of employees
no.
t year-end. Effective 2006, permanent tenure employees and part-time employees who receive monthly salary and have worked at
A
least three months are included in the number of employees.
* Vasakronan Employee Index, VEI, comprises four sections: Immediate manager, Employee motivation, Customer focus and Commitment.
1)
Manager and employee development
Successful management is a key factor for success.
Both internal and external management development programs were carried out in 2007 to
develop operative and strategic management at
Vasakronan. A network for managers was established, aimed at creating opportunities for dialogue and exchanging experiences.
At Vasakronan, the development discussion is
a strategically important management tool. It is a
conversation between the individual employee
and his/her immediate manager that involves following up on and setting new goals, discussing
the need for skills development and encouraging
creativity and commitment. Employee health issues
are also addressed. During the year, 90% (73) of
employees had development discussions with their
immediate manager. A total of 72% said that they
were satisfied with the quality of the conversation.
Vasakronan intends to be at the forefront of
skills development to retain its position in the market as an attractive employer and thereby attract
the highest caliber of employees in the industry.
Vasakronan’s ambition is to highlight the value of
the company’s shared competencies, which represent part of Vasakronan’s assets. An IT-based support system was implemented in 2007 to make all
of the competencies found in the company more
visible. This has given all of the employees an
opportunity to emphasize their experiences and
skills.
Diversity and equality
A diversity and equality policy states that Vasakronan shall be free from discrimination, xenophobia
and harassment. No reports of discrimination at
Vasakronan were made in 2007.
Women and men shall be afforded equal
opportunities for development and promotion and
receive the same salary for the same work. The
53
Employees
basis is that all employees and job applicants shall
be treated equally. By using an IT-based recruitment support system that has been introduced,
the identities of applicants are removed from
applications to avoid discrimination. Applicants
are to be evaluated based on their competencies
and experience. The work climate shall be
founded on respect for differences among people
and their background, and duties are organized
such that work and private lives can be combined,
regardless of gender.
At year-end, the Vasakronan Group had 403
(396) employees, of which 46% (44) were women
and 54% (56) men. Of these 403, 157 employees
were employed at Vasakronan Service Partner. The
average number of employees was 402 (398).
At year-end, the number of female managers
was 38% (37). Vasakronan Service Partner had
83% (63) female managers.
The Board of Directors comprised 44% (43)
women and Group management 25% (17). In
autumn 2007, Senior Vice President Human
Resources, Anneli Gardelius, became an ordinary
member of Vasakronan’s Group management.
Health and safety
Good health contributes to good performance,
which in turn contributes to profitability. Vasakronan’s aim is to retain the high level of work attendance by adopting a proactive approach. This
involves identifying needs for action at an early
stage to counteract poor health.
Vasakronan works actively on wellness. Among
other things, the company offers health checks,
fitness club contributions, massage, chiropractors,
counseling and free medical care.
A positive work environment is ensured
through local work-environment committees.
From the annual employee survey, Vasakronan
receives a measurement of how employees perceive their work environment. No industrial accidents were registered.
Sickness absence
Recruitment
Sickness absence at Vasakronan remains low at
3.1% (3.3), of which long-term absence was
1.8%. Sickness absence at Vasakronan Service
Partner was 5.2% (3.8), of which long-term
absence was 3.2%.
Employee turnover has continued to fall at
Vasakronan despite more intense competition for
employees in the property industry, which indicates a high level of job satisfaction among
employees. Employee turnover for Vasakronan
Service Partner, which operates in a different type
of market, has risen due to increased growth in
the facilities management industry.
The average age in the Group was 40 (38) and
the average length of employment was seven
years (nine).
Employee turnover in the property market continued to increase in 2007 due to an improving labor
market. At the same time, a large percentage of its
employees, those born in the 1940s, will make the
transition into retirement through the year 2014.
Vasakronan has further refined its recruitment
process to meet intensifying competition for
employees in the property industry. A web-based
IT system has been implemented to support this
process, which has further enhanced efficiency
and simplified recruitment procedures.
Vasakronan continued its work with raising its
profile among colleges and universities in 2007 by
participating in different labor market days and in
various networks that market the property industry and the educational paths it offers.
Trainee positions and degree project work have
been offered, leading to employment in several
cases. More trainee positions are expected to be
created in 2008. Holiday work opportunities are
offered to young people to help them enter the
labor market.
Schools may also use Vasakronan’s customer
magazine as teaching material via the company
called Utbudet.
Employee survey
The annual employee survey shows tendencies,
commitment and factors that are important to further motivating employees.
Participation in the company remains very high.
A total of 97% of employees feel that their work is
of importance to achieving Vasakronan’s goals.
Moreover, 87% felt that they can take responsibility in their roles at Vasakronan, and 77% said that
they have the freedom to organize and oversee
their own work. A total of 85% of employees consider Vasakronan to be an attractive employer.
In 2008, increased focus will be placed on leadership issues, with particular emphasis on management by objectives and coaching-based management.
Motivated employees result in more satisfied
customers. Among Vasakronan employees, there
is a clear perception that we as a company truly listen to our customers – 92% (92). A majority, 84%
(83), also feel that the company provides employees with the opportunity and resources to create
satisfied customers.
Incentive
The company has an incentive program. A sum
equivalent to two months salary can be paid out if
targets for earnings, leasing and customer loyalty
are exceeded.
Trade unions
Collective agreements have been signed between
ALMEGA Service Associations and each of the following unions: Unionen, Association of Management and Professional Staff, Swedish Association
of Graduate Engineers and Union of Service and
Communication Employees.
Vasakronan’s values
• business expertise
• open communications
• ethics and morals
• continual improvements
• environmental awareness
54
Ethics
Shared ethical standards and values are the building blocks of a successful company. The actions
and behavior of employees toward stakeholders
must always be exemplary. Business expertise and
honesty shall be the hallmarks of our relationships.
The company has produced ethical guidelines
governing such issues as meetings with suppliers,
gifts and dinners.
Vasakronan sponsors projects that focus on
young people: Zero tolerance against bullying and
the Swedish Narcotics Officers Association.
To prevent the spread of child pornography,
computer protection against images of child pornography has been installed, whereby picture files
contained in incoming Internet traffic are scanned.
Accordingly, the company has taken a standpoint
on a highly important issue and has ensured that
no one, internally or externally, can use the company’s IT system to store illegal material.
Approved guidelines for remuneration
to senior executives
Vasakronan shall apply the Department of Enterprise, Energy and Communications’ ”Guidelines
concerning terms of employment for persons in
managerial positions and for incentive schemes for
employees in state-owned companies.” The fundamental general principal for remuneration to
senior executives is based on salaries being marketlevel, individual and, except for the President who
is not included in the current incentive program,
result-based, whereby systematic comparisons are
made with other companies in Sweden. The current incentive program, which applies to all
employees, except for the President, is based on
the trend for net operations, new leasing and customer satisfaction and can result in a maximum of
two months’ additional salary per year. The incentive program is for three years and applies through
2008. Senior executives have a period of notice of
six months and 12-18 months’ fully adjusted severance pay. Pension provisions are made in accordance with the premium model. The senior executives to whom these guidelines pertain are members of the company’s Group Council.
The Board’s Remuneration Committee shall prepare the Board’s decision regarding salary and other
remuneration for the President, and process and
approve the President’s proposal for salaries and
remuneration to be paid to other senior executives.
The proposal to the 2008 Annual General
Meeting regarding guidelines for remuneration to
senior executives will follow the decision of the
2007 Annual General Meeting, with the following
clarification:
OCCUPATIONAL CATEGORY, VASAKRONAN1)
Number2)
Technical personnel
Property managers Leasing personnel
Office administrators
Other services3)
Market area managers
Senior managers
Total
1)
2)
3)
Of whom women
2007
%
2006 %
2005
%
2007
2006
2005
75
35
11
17
89
11
8
246
31
14
4
7
36
5
3
100
70
43
11
21
87 11
7
250
28
18
4
8
35
4
3
100
78
47
15
16
86
13
6
261
30
18
6
6
33
5
2
100
–
9
7
16
43
5
2
82
1
9
7
20
39
4
1
81
2
8
9
15
31
3
1
64
Excluding Vasakronan Service Partner.
At year-end.
Including financial, IT, marketing, procurement, environmental and reception personnel.
OCCUPATIONAL CATEGORY, VASAKRONAN SERVICE PARTNER
Number1)
Conference and reception
Catering
Telephony
Tenant services
Office administrators
Management
Total
1)
Of whom women
2007
%
2006 %
2005
%
2007
2006
2005
52
54
12
27
7
5
157
33
35
8
17
4
3
100
49
48
13
24
7
5
146
34
33
9
16
5
3
100
29
36
9
15 5
5
99 30
36
9
15
5
5
100
50
31
12
3
6
4
106
48 23
10
3
7
5
96 29
21
9
2
5
4
70
t year-end. Effective 2006, permanent tenure employees and part-time employees who receive monthly salary and have worked at least
A
three months are included in the number of employees.
SELF IMPORTANCE
Do you feel that your work is important
for achieving Vasakronan’s goals?
SATISFACTION
Overall, how do you enjoy
working at Vasakronan?
100
100
80
80
60
60
40
40
20
20
0
98 99 00 01 02 03 04 05 06 07
Definitely
Probably
0
98 99 00 01 02 03 04 05 06 07
Proportion who are positive to
the statement
As an employer, Vasakronan’s goal is that not less than 90% of employees should feel that their work is important for achieving the
company’s targets, of which 60% should definitely feel this way. The result in 2007 was 94%, an increase of two percentage points.
64% responded ”defintely”. 83% say that they are content in working at Vasakronan.
”Senior executives shall have a period of notice
of six months and, in the event that notice is
served by the company, entitlement to fully
adjusted severance pay. The terms of employment
shall enable retirement at age 62. A defined-contribution pension solution shall be applied. In
other respects, the generally accepted employment benefits apply, such as company car, health
insurance, etc.
”The above principles are not considered to
deviate significantly from earlier approved
principles.”
55
Vasakronan’s strongest earnings to date.
Increased rental revenues, reduced
vacancies, improved operating surplus
and higher market value.
Financial review
Content
Accounting and valuation principles
Income statement, including comments
59
Cash flow statement, including comments
62
Cash flow from current operations increased by
SEK 834 M and amounted to SEK 1,567 M.
In 2007, the Group reported its best ever income after
tax, SEK 4,650 M (3,409).
Parent Company’s financial statements
Balance sheet, including comments
Vasakronan AB’s financial statements are shown on
pages 72–73.
66
72
The market value of properties increased to
SEK 45,236 M (38,122).
Notes
Change in shareholders’ equity, including comments
Notes for the Group and the Parent Company are shown
on pages 74–87.
69
70
74
Shareholders’ equity increased by SEK 3,923 M to
SEK 25,736 M.
58
Accounting and valuation principles
Corporate information
The consolidated accounts and Annual Report for Vasakronan AB (Parent Company) for the 2007 fiscal year were approved by the Board of Directors and President for publication on February 15, 2008 and will be presented at the Annual
General Meeting on April 22, 2008 for adoption.
The Parent Company is a Swedish company (publ) and is domiciled in Stockholm, Sweden.
Opinion on compliance with regulations in effect
The consolidated accounts are prepared in accordance with the International
Financial Reporting Standards (IFRS). Since the Parent Company is a company
within the EU, only IFRS approved by the EU are applied.
In addition, the consolidated accounts are prepared in accordance with Swedish law through compliances with the Swedish Financial Accounting Standards
Council’s recommendation RR30:06 (Supplementary accounting regulations for
company groups).
The Parent Company, Vasakronan AB’s accounting principles comply with the
Swedish Annual Accounts Act and accounting is based on historical acquisition values. The Swedish Financial Accounting Standards Council’s recommendation
RR32:06 is applied (Accounting for legal entities). This means that IFRS is applied
with the deviations presented in the Parent Company’s accounting principles.
Vasakronan complies with the listing agreement of the Stockholm Stock
Exchange.
New accounting standards
The accounting principles that were applied are the same as those that applied in
the preceding year, with the exception of the statements below, which comprise
approved, new and changed EU standards and statements from IFRIC that were
deemed applicable for Vasakronan.
IFRS 7 Financial instruments – disclosures
This standard requires that the company submit information to facilitate users of
this financial report in evaluating the significance of the company’s financial instruments and the character and extent of risks connected therewith. Refer to pages
14–15 and Note 30 of this Annual Report.
The financial reports are particularly sensitive with respect to appraisals
and assumptions regarding valuation of managed properties, which are
described in detail in Note 21.
Classification of acquisition
When shares are acquired in property-owning companies, an analysis is conducted
to establish whether the acquisition meets the criteria for business acquisitions.
The most important criterion for classification as a business acquisition is that the
acquisition, in addition to properties, includes personnel and operational processes. If these criteria are not met, the acquisition is classified as an asset acquisition. In asset acquisitions, no deferred tax liability is reported initially. Instead,
deferred tax recognized on acquisition reduces the value of the property asset,
which is thus lower than the assessed market value at the time of acquisition. Only
changes in market value in excess of the market value at the time of acquisition are
reported as changes in value in the income statement.
During 2005, 2006 and 2007, company acquisitions did not fulfill the criteria
for business acquisitions but were exclusively classified as asset acquisitions.
Consolidated accounts
The consolidated accounts comprise the Parent Company and all companies in
which the Parent Company directly or indirectly controls more than 50% of the
voting rights or where the Group otherwise exercises a decisive influence.
The consolidated financial statement is prepared in accordance with the
acquisition method, whereby shareholders’ equity in subsidiaries at the date of
acquisition is eliminated in its entirety. Consolidated shareholders’ equity thus
includes only the portion of shareholders’ equity in subsidiaries that has arisen after
the date of acquisition.
The income derived from companies acquired and sold during the year is shown
in the consolidated accounts in an amount reflecting the period of ownership.
The effects of all intra-Group transactions such as revenues, costs, receivables,
liabilities, intra-Group profits and Group contributions have been eliminated.
Associated companies
The addendum requires that the company submit information to facilitate users of
this financial report in assessing the company’s goals, principles and methods for
investment management. Refer to pages 6–7 of this Annual Report.
An associated company is defined as a company in which the Group and Parent
Company hold not less than 20% and not more than 50% of the voting rights, or
in which the Group has a significant influence in other respects. Associated companies are reported in accordance with the equity method. This means that the
book value of participations in associated companies is adjusted by the owner’s
proportion of the associated company’s profit. As a result, the owner’s income
statement includes its share of the associated company’s profit/loss for the year.
Revised IAS 23 Loan costs
Joint ventures
The standard requires capitalization of loan costs when these relate to assets
that of necessity require considerable time for completion for designated use or
sale. The revised IAS 23 shall be applied for the fiscal year beginning January 1,
2009 or later.
Joint ventures refer to projects in consortium-like form, in which there is a common
determining influence. Vasakronan has two joint ventures that are operated
through jointly-owned companies with joint management. Consolidation is in
accordance with the proportional consolidation method. This means that Vasakronan’s proportion of the joint income statement, balance sheet and cash flow statement are added to the respective corresponding line in Vasakronan’s accounting in
the same manner as in reporting for subsidiaries.
Addendum to IAS 1 Presentation of financial reports
Bases for account preparation
The consolidated accounts are based on historical acquisition values, with
the exception of managed properties and financial derivatives, which are reported
at fair value.
Valuation and reporting of fixed assets
Use of appraisals
Machinery and equipment and intangible fixed assets
In order to prepare the financial reports in accordance with generally accepted
accounting principles, corporate management must make appraisals and assumptions that affect assets and liability items as well as revenue and expense items as
reported in the financial statements, and other disclosures. Actual results may
differ from these assessments.
Machinery and equipment and intangible fixed assets are reported at the original
acquisition value, with deduction for accumulated depreciation/amortization and
impairment. Depreciation/amortization is straight-line over the anticipated period
of use (14–33% per year). The reported value of machinery and equipment and
intangible fixed assets is subject to ongoing analysis. If such an analysis indicates
59
that the reported value exceeds the recoverable amount, an impairment is made in
the recoverable amount.
Managed properties including work in progress
Managed properties are reported at fair value, which is defined as the appraised
market value. To ascertain the appraised value, an external assessment of all properties is carried out at mid-year and year-end. At the end of the first and third quarters, an internal update is conducted of earlier external valuations. These valuations
take into consideration property-specific, value-influencing events, such as new
and renegotiated leases, vacation of premises and investments. Value-influencing
market changes relating to market rents and direct yield requirements are taken
into consideration after reconciliation with two external valuation companies.
The change in fair value is reported as unrealized change in value in the income
statement. For a more detailed description of market valuation, refer to pages 12–
13 in the Annual Report.
Accrued expenses in connection with new construction, additions or renovations of properties are reported as work in progress on properties until the project
is completed and final inspection takes place. Work pertaining to ongoing maintenance, maintenance measures in connection with renovation and tenant adaptations, which are value-enhancements, are capitalized. The term “value-enhancing” means that a measure is expected to provide a future financial advantage
compared with earlier measures, thereby influencing market value. Interest
expenses in connection with new construction, extensions or renovations of properties are capitalized until the project is completed and final inspection takes place.
Property purchases and property sales are reported on date of transfer.
Valuation of financial instruments
Vasakronan classifies financial instruments as one of the following four categories
• Financial assets held for trading
• Loan receivables and accounts receivables
• Financial liabilities held for trading
• Other financial liabilities
Financial assets held for trading
This category includes only derivatives, which are initially reported at acquisition
value and valued thereafter at fair value in the income statement.
Loan receivables and accounts receivables
The category also includes cash and cash equivalents, which consist of cash and
bank and current investments. Current investments comprise interest-bearing
securities with shorter maturity period than three months. These financial assets
are reported after the acquisition at the accumulated acquisition value. The value
of loan receivables and accounts receivable are assessed continuously. If the
reported amount is assessed as exceeding the amount that can be recovered,
an impairment is made in a corresponding amount.
Financial liabilities held for trading
This category includes only derivatives, which are initially reported as acquisition
value and valued thereafter at fair value in the income statement.
60
Other financial liabilities
This category includes loan liabilities. Loan liabilities are valued at accrued acquisition value. Any excess or deficit values at the time of issue are allocated to the term
of the liability. The accrued acquisition value is based on the effective interest rate
that was calculated when the liability was recognized.
Derivative instruments
Derivative instruments are used to achieve the desired fixed-interest term of the
loan portfolio and/or to eliminate the currency exchange risk associated with borrowing in a foreign currency. In the past, hedge accounting was applied. In 2007,
Vasakronan changed and does not apply hedge accounting for commercial hedging, which means that for reporting purposes they will be considered in future as
financial instruments held for trading. (Refer to the financial assets and liabilities
held for trading above.)
Cash-flow hedging for which hedge reporting applies, means that the value
change of derivatives (hedging instrument) is reported directly to the hedge
reserve in shareholders’ equity. If the hedge accounting is discontinued, the hedge
reserve will be redeemed at the rate of the previously hedged future flow. During
2007, Vasakronan redeemed SEK 28 M of the hedge reserve, which amounted to
SEK 22 M on December 31, 2007.
The net amount of a derivative instrument’s interest income and interest
expenses are reported under interest expenses in the income statement. Financial
derivatives in foreign currencies are reported in accordance with the same principle
as other financial derivatives. However, any unrealized currency translation effects
in the hedged instrument or derivative instrument are reported under interest
income or interest expenses, which are offset by corresponding currency translation effects in the hedged instrument or derivative instrument under interest
income or interest expenses. Valuation of financial derivative instruments is by
means of a current-value calculation of the cash flow, using current market interest
rates and exchange rates.
Principles for reporting and eliminating financial instruments
in the balance sheet
Accounts receivable are reported in the balance sheet when the invoice is sent.
Other financial liabilities are reported when the other party has delivered and there
is a contractual obligation to pay. A financial liability is removed from the balance
sheet when the contractual obligation has been fulfilled or is otherwise settled.
Acquisition and divestment of financial assets are reported on the settlement date.
Valuation and reporting of pension provision
Pensions
Vasakronan’s pension obligations in accordance with the national pension scheme
are covered by an insurance solution with Alecta. In accordance with a statement,
URA 42, by the Urgent Issues Task Force of the Swedish Financial Accounting Standard’s Board, this is a defined-benefit plan covering a number of employers. For
the 2007 fiscal year, Vasakronan has not had access to sufficient information to
permit the reporting of this plan as a defined-benefit plan. Consequently, the pension plan which is an ITP-type pension plan secured via an insurance contract with
Alecta – is reported as a defined-contribution plan.
Expenses for pension insurance covered by Alecta amounted to SEK 8 M (10)
for 2007. Alecta’s surplus may be distributed to policyholders and/or the insured.
At year-end 2007, Alecta’s surplus in the form of the collective consolidation level
was 152% (143). The collective consolidation level represents the market value of
Alecta’s assets as a percentage of insurance commitments, calculated in accordance with Alecta’s actuarial assumptions, which do not comply with IAS 19.
For certain senior executives, accessible pension liabilities are posted as a current liability and reported as a provision.
Segment reporting
The Vasakronan Group does not report on the basis of segments since operations
are conducted in a single geographic area (Sweden) with uniform political and economic conditions.
Income recognition
Vasakronan’s rental leases are operational leasing agreements as defined by IAS
17, whereby only that portion of revenue relating to the period in question is
reported. This means that rent paid in advance is reported as prepaid rental revenue. Recompense related to early lease termination is directly recognized as
income if there are no additional obligations on the part of the tenant. Rent discounts are periodized straight-line over the term of the lease. Invoiced property
taxes and energy expenses are reported as income.
Leasing
Vasakronan reports all site leasehold agreements as operational.
Tax
Current tax is calculated on taxable income for the period. Adjustment of current
taxes for earlier periods is included.
Deferred tax is calculated on temporary differences between reported value of
properties and taxable value, and reported as Deferred tax claim and tax liability.
Deferred tax liability and tax claims are valued at their nominal amount without
discounting.
Cash-flow statement
The cash-flow statement is prepared in accordance with the indirect method. The
reported cash flow comprises only transactions that involve receipts and disbursements.
Absence due to illness and distribution according to gender
Reporting of absence due to illness and distribution according to gender among
senior executives of the Group follows the Swedish Financial Accounting Standards
Council’s recommendation RR32:06, Accounting for legal entities. Information is
provided concerning employee’s absence due to illness for the fiscal year.
Information regarding distribution according to gender is reported as distribution between women and men among members of the Board, the President and
other persons in Vasakronan’s executive management.
Parent Company accounting principles
Deviations between the Group’s and the Parent Company’s accounting principles
are motivated by the limitations that the Swedish Annual Accounts Act (ÅRL) cause
in the application of IFRS within the Parent Company and the tax regulations that
enable some other reporting for a legal entity than for the Group.
Tax legislation in Sweden provides companies with the possibility of deferring
tax payment through provision to untaxed reserves in the balance sheet via the
income statement item Appropriations. Thus the Parent Company reports untaxed
reserves in the balance sheet and appropriations in the income statement.
In the accounting principles presented below, comments to the Parent Company’s principles are provided only when they deviate from those of the Group.
Managed properties
Managed properties are reported at original acquisition value with deduction for
accumulated depreciation and impairment. The properties are reported in the balance sheet as fixed assets, since the intention is long-term ownership and management of properties. Additional expenses that are standard-enhancing, compared
with the original acquisition, are capitalized. Interest expenses during construction
are expensed in their entirety.
To determine the appraised net sales value, an assessment is carried out at each
mid-year and year-end of the Parent Company’s and subsidiaries’ properties by
external appraisal companies. The basis for implementation of property valuations
presupposes that values are always marred by uncertainty. To counteract this uncertainty, the Parent Company and subsidiaries apply a value interval of + / – 5% of
appraised values. This means that if the carrying amount exceeds the upper limit, a
impairment to the upper limit value is made. If the carrying amount is lower than the
interval’s lower limit, a revaluation is made to the lower limit value. If the carrying
value is within the value interval, no adjustment is made to the carrying amount.
Depreciation, which is conducted straight-line according to plan, is based on
the assets’ acquisition values and appraised service life. The following depreciation
periods have been used:
Depreciation, per year
Buildings, offices and stores
Buildings, other
Building equipment
Land, equipment and improvements
%
2
2–5
10
5
Associated companies /Joint ventures
Participations in associated companies are reported in the Parent Company according to the cost method. Dividends received are reported in the income statement,
provided that they derive from profits earned after acquisition. If, on the other
hand, the dividend is intended as capital repayments, this constitutes a reduction
in acquisition value. The value is analyzed annually with a view to possible impairment requirements.
Allocation of non-restricted and restricted equity
In consolidated accounting, no allocation is made in the balance sheet to nonrestricted and restricted equity which, conversely, is made in the Parent Company
in accordance with the Annual Accounts Act.
61
Income statement
Group
SEK M Note
2007
2006
2005
Rental revenues 1
Operating expense 2
Maintenance 3
Site leasehold fees 4
Property tax Operating surplus
2,874
–604
–66
–72
–214
1,918
2,681
–580
–84
–67
–172
1,778
2,666
–663
–103
–64
–175
1,661
Sales proceeds, building rights
Acquisition costs, building rights Result from participations in associated companies
8
Result from service operations 10
Central administration and marketing 11
Operating income
154
–26
1
4
–90
1,961
290
–160
54
5
–95
1,872
–
–
202
6
–101
1,768
Interest income 13
Interest expenses 14
Total financial items Income after financial items
41
–397
–356
1,605
29
–568
–539
1,333
137
–634
–497
1,271
Realized value change, properties 15
Unrealized value change, properties
Unrealized value change, financial derivatives 16
Income before tax
5
4,750
20
6,380
57
3,253
–
4,643
94
858
–
2,223
Current tax 18
Deferred tax 18
Tax Income after tax1)
–28
–1,702
–1,730
4,650
6
–1,240
–1,234
3,409
–478
–64
–542
1,681
67
5.5
1,163
66
3.5
852
62
3.6
420
Financial items
KEY DATA
Operating surplus, margin, % Interest coverage ratio, multiple Earnings per share, SEK 19
1) Net profit/loss for the year is assignable in its entirety to the Parent Company’s shareholders.
RENTAL REVENUES
3,000
SEK/m2
SEK M
NEW AND RENEGOTIATED LEASES
20
1,800
600
2,500
1,500
500
15
2,000
1,200
400
10
1,500
900
300
5
1,000
600
200
0
500
300
100
-5
0
03
04
05
06
07
0
Rental revenues, SEK/m2
Rental revenues increased due to decreased
vacancies and increased rents.
62
%
SEK M
0
03
04
05
06
07
New/renegotiated, SEK M
Price change, %
New and renegotiated leases for 2007
resulted in a rise in rents of 6%.
-10
VACANCY RATE/RENT LOSSES
400
%
SEK M
16
300
12
200
8
100
4
0
03
04
05
06
07
0
Rent losses, SEK M
Vacancy rate, %
The vacancy rate continued to decrease to
4%.
Rental revenues
Rental revenues – Growth
Vasakronan’s rental revenues for 2007 increased by SEK 193 M and amounted
to SEK 2,874 M (2,681), an increase of 7% (1). The increase for comparable
properties was 6% (3), while the effect of property acquisitions and sales was
1% (–2). The increase is attributable to a decline in vacancies and increases in
renegotiated and newly negotiated lease contracts.
Lease contracts amounted to SEK 3,324 M in annual rent and exceeded
the reported rental revenues by SEK 450 M. Average rental revenues increased
to SEK 1,583/m2 (1,500) and for office premises, the average rental revenue
increased to SEK 1,856/m2 (1,750). The average term of contracts in the portfolio amounted to 4.3 years (4.5).
Lease contracts corresponding to SEK 176 M (368) in annual rent were
renegotiated or newly signed, corresponding to 7% (13) of the lease portfolio. Rents increased by an average of 6% (8). The preceding year’s high
increases were attributable to newly signed contracts in renovated properties.
The most significant leases were contracted with Hotel Hilton Plaza in
Malmö 17,482 m2, Stockholms Stad Fastighetskontor in Stockholm City
7,106 m2, Police Authority in Göteborg 4,534 m2, Laird Technologies in Kista
4,099 m2, Ernst & Young in Malmö 3,538 m2, Fujitsu Siemens in Kista
3,225 m2, Munters in Kista 2,595 m2, the Church of Sweden in Solna
2,385 m2, Söderberg & Partners Insurance in Stockholm City 2,221 m2 and
Powerwave Technologies Sweden in Kista 1,993 m2.
Government tenants decreased to 32% (35) of total rental revenues.
SEK M
Dec. 31, 2007 Dec. 31, 2006
3,324
2,874
450
16
2,991
2,681
310
12
Number of leases
Annual rent, SEK M
Percentage,
%
967
702
608
283
175
44
37
28
7
182
1,042
4,075
488
549
655
297
370
206
122
151
27
411
48
3,324
15
16
20
9
11
6
4
5
1
12
1
100
Contracted annual rent
Reported annual rent
Rental growth
Rental growth, %
Contracted annual rent exceeded the reported annual rent by SEK 450 M.
Lease portfolio, December 31, 2007
Term until 2008
2009
2010
2011
2012
2013
2014
2015
2016
2017 et seq. Residential, parking spaces, etc.
Total
The average term in the lease portfolio is 4.3 years.
The lease portfolio includes signed leases with respect to projects under construction.
Vacancy rate
The vacancy rate decreased to 4% (7) of rental revenues. For a comparable
property portfolio, the decrease was 3 percentage points (–1) and the effect
of acquisitions and sales of properties was 0 percentage points (0). On an
annual basis, the vacancy rate corresponds to rent losses of SEK 134 M (196).
Calculated in terms of floor space, the vacancy rate declined to 6% (8) and
amounted to 103,000 m2 (136,000).
OPERATING SURPLUS
2,000
%
SEK M
INTEREST COVERAGE RATIO
80
6
Multiple
NET FINANCIAL INCOME/
INTEREST-BEARING NET DEBT
16,000
SEK M
SEK M
800
5
1,500
70
12,000
600
8,000
400
4,000
200
4
1,000
60
500
50
3
2
1
0
03
04
05
06
07
40
0
03
04
05
06
07
Operating surplus, margin, %
The operating surplus margin improved
primarily due to higher revenue.
0
03
04
05
06
07
0
Interest-bearing liabilities, SEK M
Net financial items, SEK M
The interest coverage ratio improved due
to improved operating revenue and lower
interest rates on borrowing.
Net financial income for 2007 improved despite
increased net indebtedness.
63
Operating expenses
Income from sales and building rights’ acquisition costs
Operating expenses include costs for energy, property operations and property administration.
Operating expenses increased by SEK 24 M and amounted to SEK 604 M
(580), an increase of 4% (–12). The change for comparable property portfolios was 4% (–2) and the effect of acquisition and sales was 0% (–10). The
increase was due to higher energy costs.
Sales proceeds of SEK 154 M related to sold building rights that were acquired
from associated company Stora Ursvik and thereafter sold to NCC. The acquisition cost was reduced by the reversal of previously eliminated capital gain.
Maintenance
Vasakronan writes off work with regard to operational maintenance and
maintenance measures in connection with rebuilding and tenant adaptations
that are not value-enhancing.
Maintenance expenses decreased to SEK 66 M (84).
Income from participations in associated companies pertains to Järvastaden
and Stora Ursvik.
Income decreased to SEK 1 M (54). The preceding year’s outcome pertains
primarily to the sale of shares in NS Holding (Norrporten).
Income from service operations
Buildings on municipally owned land are subject to annual site leasehold fees.
Site leasehold fees increased by SEK 5 M to SEK 72 M (67).
This item includes services in restaurants, conference facilities, tenants’ services, telephony and reception services offered by Vasakronan Service Partner
to tenants in Stockholm, Göteborg and Malmö.
Income increased to SEK 126 M (119) and earnings decreased to SEK 4 M
(5), attributable to the conference operations.
Property tax
Central administration and marketing
Property tax is 1% of the tax-assessed value of office and retail space.
Property tax increased by SEK 42 M to SEK 214 M (172), due primarily to
higher taxable value. However, the effect of the increase was reduced since
86% was paid by tenants.
Repayment of property tax increased to SEK 15 M (10).
Central administration and marketing expenses include expenses associated
with the Board, President, Group staffs and Group-wide marketing.
Central administration and marketing expenses decreased to SEK 90 M
(95), of which marketing expenses were SEK 13 M (19). Central administration
was charged with SEK 8 M (0) in pension costs pertaining to personnel lay-offs.
Operating surplus
Financial items
Operating surplus improved by SEK 140 M and amounted to SEK 1,918 M
(1,778), an increase of 8% (7). The increase for comparable property portfolios was 7% (12) and the effect of acquisition and sales was 1% (–5). The
operating surplus margin improved to 67% (66) and was due to higher rental
revenues.
Net interest income and expense decreased by SEK 183 M and amounted to
SEK 356 M (expense: 539). The decrease was due to lower interest rates on
loans as a result of the closure of financial derivatives with higher interest rates
than the market rate during the fourth quarter of 2006, and a shorter average
fixed interest term.
Site-leasehold fees
64
Result from participations in associated companies
As of December 31, 2007, the interest rate on loans was 4.3% (3.2), while
the market rate for a corresponding portfolio amounted to 4.8%. The average interest rate on loans for 2007 declined to 3.6% (3.7). The average fixedinterest term for interest rates declined to 1.0 year (1.1). The proportion of
fixed-interest rate maturity dates during the next 12 months increased to
71% (69). The interest-coverage ratio improved to 5.5 (3.5). Vasakronan’s
goal is that the interest-coverage ratio should amount to at least 2.0.
A rise in the interest rate level of one percentage point as of December 31,
2007 would increase interest expenses by SEK 72 M during the next 12
months, given present loan volume and fixed-interest rate conditions. The
increase corresponds to approximately 5% of income after net financial items.
Income after financial items
Income after financial items increased to SEK 1,605 M (1,333), primarily due
to an improved operating surplus and net financial items.
The external valuation resulted in an unrealized increase in value to SEK
4,750 M (3,253) for full-year 2007, of which SEK 1,105 M (1,686) during the
fourth quarter. The market value increased by 12.5% (9.9) compared with the
year-earlier period. Approximately 50% of the value increase was due to
increased market rent levels and approximately 40% to reduced direct yield
requirement. Reduced vacancy rates and investment gains in projects are also
included. Market valuation of certain potential building rights, which were
not planned in detail and previously not valued, signified an unrealized value
increase of SEK 312 M.
Unrealized value change, financial derivative
Unrealized value change in financial derivatives increased to SEK 20 M,
due to the reversal of accumulated value change of earlier hedge-accounted
derivatives.
Taxes
Realized value change in properties
Realized value change consists of the difference between a property’s selling
price, with deduction for selling overhead expenses and the appraised value at
the preceding quarterly closing, increased by investments for the quarter.
The realized value change amounted to SEK 5 M (57).
Current tax amounted to SEK 28 M (-6). The low tax expense was primarily
due to the possibility of tax deductions for certain investments and increased
tax depreciation.
Deferred tax increased to SEK 1,702 M (1,240), due to an unrealized value
increase on properties and increased tax-related depreciation.
An external evaluation of the entire property portfolio including project portfolio and building rights of DTZ and Newsec is conducted every six and 12
months.
The appraised market value was affected by property-specific value-influencing events such as new and renegotiated contracts, vacation of premises
and investments. The market value was also affected by changes in market
rent levels, direct yield requirements and vacancies.
65
Balance sheet
Group
SEK M
Note
2007
2006
2005
20
47
27
23
Tangible fixed assets
Managed properties 21
Work in progress in properties 22
Machinery and equipment 23
Total tangible fixed assets 43,598
1,638
27
45,263
37,208
914
29
38,151
32,412
415
31
32,858
Deferred tax claims 24
Participations in associated companies 25
Financial fixed assets 26
Total fixed assets
210
43
269
45,832
356
45
498
39,077
593
873
1,802
36,149
398
181
247
826
46,658
615
241
51
907
39,984
632
3
328
963
37,112
4,000
15
21,721
25,736
4,000
44
17,769
21,813
4,000
–148
14,672
18,524
6,116
10
8,549
375
15,050
4,554
7
7,267
486
12,314
3,567
5
8,701
712
12,985
4,384
–
1,488
5,872
46,658
4,445
–
1,412
5,857
39,984
3,925
228
1,450
5,603
37,112
34
34
1,001
596
1,775
243
2,639
348
Return on shareholders’ equity, % Interest-bearing liabilities, net Equity/assets ratio, % Dividend per share (SEK) 35
19,3
12,517
55
198
16,8
11,285
55
175
9,5
10,947
50
64
ASSETS
Fixed assets
Intangible fixed assets Current assets
Current receivables
27
Tax claim Cash and cash equivalents Total current assets TOTAL ASSETS
SHAREHOLDERS’ EQUITY AND LIABILITIES
Shareholders’ equity
Share capital Reserves Retained earnings, including income for the period Total shareholders’ equity1)
Long-term liabilities
Deferred tax liabilities 29
Provision for pensions Interest-bearing liabilities 30
Noninterest-bearing liabilities 31
Total long-term liabilities Current liabilities
Interest-bearing liabilities 32
Tax liabilities Noninterest bearing liabilities 33
Total current liabilities TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES
Pledged assets Contingent liabilities 1) Attributable to the Parent Company’s shareholders.
KEY DATA
66
Managed properties
Financial fixed assets
The external appraisal of the entire property portfolio, including the project port
folio and building rights was conducted by DTZ and Newsec. Vasakronan’s properties have been valued as individual properties. The market value is assessed to
exceed the sum of the individual properties, since the market values portfolios
higher than individual objects. The market value was affected by property-specific
value-influencing events, such as new and renegotiated leases, vacation of premises and investments. The market value was also affected by changes in market
rental rates, direct yield requirements, vacancies and investment profits in projects.
The appraised value of the properties, including ongoing projects and building
rights, increased by SEK 7,114 M to SEK 45,236 M (38,122). Adjusted for acquisitions and sales of properties, the unrealized value change amounted to SEK 4,750
M (3,253), an increase of 12.5% (9.9).
The financial fixed assets decreased by SEK 229 M to SEK 269 M (498), through
amortization.
Interest-bearing liabilities, net
The Group’s interest-bearing liabilities increased by SEK 1,232 M to SEK 12,517 M
(11,285) due to increased investments and higher dividends. The average net interest-bearing liabilities amounted to SEK 11,893 M (11,625). Cash and cash equivalents increased by SEK 196 M to SEK 247 M (51). Interest-bearing receivables
declined by SEK 204 M to SEK 179 M (383).
Gross interest-bearing liabilities increased by SEK 1,221 M to SEK 12,933 M
(11,712). The average terms for interest-rate fixing decreased to 2.2 years (2.5).
Deferred tax claims and tax liability
Work in progress on properties
Work in progress increased by SEK 724 M to SEK 1,638 M (914), as a result of a
larger project portfolio and the increase in the amount in ongoing projects. The
total project portfolio increased to SEK 3,145 M (2,841). The projects have a low
vacancy rate and largely consist of long-term leases with government tenants.
During the fourth quarter, the following projects were started: Bremen in
Stockholm, Kungsängen in Uppsala and Tegen in Solna, with investments totaling
SEK 592 M. The projects, Svea Artilleri in Stockholm and Heden 46:1 in Göteborg,
commenced with a total investment of SEK 585 M.
Deferred tax is calculated on the basis of temporary differences between reported
values of properties and their taxable values. Valuation is at nominal amounts without discounting. Reporting is in terms of deferred tax claims and tax liabilities,
respectively.
Deferred tax claims declined by SEK 146 M to SEK 210 M (356). The decline was
due to reversal of previously taken impairment losses. Deferred tax liabilities
increased by SEK 1,562 M to SEK 6,116 M (4,554), as a result of unrealized value
increases in properties and tax-related impairment losses.
Holdings in associated companies
Participations in associated companies consist of development companies owned
jointly with NCC and Skanska.
Participations in associated companies decreased by SEK 2 M to SEK 43 M (45).
Shareholders’ equity increased by SEK 3,923 M to SEK 25,736 M (21,813), due
primarily to an unrealized value increase in properties.
Return
Return on shareholders’ equity increased to 19.3% (16.8).
ACQUISITION OF PROPERTIES
Contract-
date
Location Property Seller Feb. 1, 2007
Solna Rosenborg 2 & 3 (building rights) JM
May 22, 2007
Göteborg
Masthugget 10:3
Sätila Holding
June 14, 2007
Göteborg
Lindholmen 28:1 G
GFK Personal Feb. 1, 2007
Solna
Rosenborg 1 J M JM
Dec. 11, 2007
Malmö
Priorn 2 Wihlborgs Wihlborgs
Dec. 19, 2007
Uppsala
Kungsängen 4:4 GE Real Estate
Dec. 19, 2007
Göteborg Lorensberg 45:16 Folksam
Total
1) Purchase
price, SEK M
96
35
105
380
145
107
125
993
Transfer date
Mar. 7, 2007
June 14, 2007
July 2, 2007
Dec. 3, 2007
Dec. 18, 2007
Dec. 19, 2007
Feb. 1, 20081)
Reported on transfer date.
SALES OF PROPERTIES
Contract -
date
Location
Property Buyer Mar. 1, 2007 Göteborg
Heden 50%, owned jointly with NCC
Dec. 5, 2007
Sundbyberg
Sundbyberg 2:84 Pysslingen Dec. 11, 2007
Malmö
Neptun 6 Wihlborgs
Dec. 21, 2007
Sundbyberg
Part of Sundbyberg 2:44 NCC
Total
Purchase
price, SEK M
45
15
84
16
160
Transfer date
Mar. 1, 2007
Dec. 5, 2007
Dec. 18, 2007
Dec. 21, 2007
67
68
Change in shareholders’ equity
Group
Attributable to Parent Company’s shareholders1)
SEK M
Share-
capital
Reserves
Retained
earnings
incl. net profit
for the year
Total
Opening shareholders’ equity according to IFRS, Jan. 1, 2005 4,000
0
13,156
Effect of revised accounting principles for financial instruments –201
Unrealized value change of financial derivatives 532)
Income for the year 1,681
Dividend to Parent Company shareholders –165
Closing balance, December 31, 2005 4,000
–148
14,672
17,156
–201
53
1,681
–165
18,524
18,524
Unrealized value change of financial derivatives 1342)
Transfer attributable to financial instruments, Norrporten 58
–58
Closing balance, December 31, 2006
4,000
44
17,769
134
0
3,409
–254
21,813
21,813
Unrealized value change of financial derivatives –292)
Closing balance, December 31, 2007 4,000
15
21,721
–29
4,650
–698
25,736
1) 2) 4,000
–148
4,000
44
There are no minority interests in Group shareholders’ equity.
The amounts reported are after tax.
Reporting of change in shareholders’ equity
Equity/assets ratio and the loan to market value of properties
Shareholders’ equity rose by SEK 3,923 M to SEK 25,736 M (21,813).
The equity/assets ratio amounted to 55% (55), due to major unrealized value
increases in the property portfolio. Vasakronan’s target is that the equity/
assets ratio should amount to at least 35%.
The loan to market value of properties declined to 28% (30) of the
assessed value of the properties.
Return
Return on shareholders’ equity increased to 19.3% (16.8).
EQUITY/ASSETS RATIO, DEC. 31
60
%
MARKET VALUE/LOAN TO MARKET
VALUE OF PROPERTIES
50,000
50
40
%
SEK M
50
40,000
40
30,000
30
20,000
20
10,000
10
30
20
10
0
03
04
05
06
07
0
03
04
05
06
07
0
Market value, SEK M
Loan to market value of properties
The equity/assets ratio increased due to unrealized
value increases and exceeded the target of 35%.
The loan to market value of properties decreased
due to increased market value and amounted to
28%.
69
Cash-flow statement
Group
SEK M
Note
2007
2006
2005
Operating income Adjustment for items not included in cash flow 36
Interest income 13
Interest expenses 14
Tax paid Cash flow before changes in working capital
1,961
–70
41
–397
32
1,567
1,872
–141
29
–568
–459
733
1,768
–180
137
–634
36
1,127
Changes in current receivables Changes in current liabilities Cash flow from current operations 217
66
1,850
17
–3
747
297
–135
1,289
–1,667
–868
–3
160
0
–97
300
–2,175
–1,047
–1,385
–4
390
819
–17
1,387
143
–597
–
–8
1,635
–
–267
152
915
Dividend paid
Loans raised 43
Amortized loans 44
Cash flow from financing activities Cash flow for the period –698
7,410
–6,191
521
196
–254
5,910
–6,823
–1,167
–277
–165
5,641
–7,760
–2,284
–80
Cash and cash equivalents, Jan. 1 Cash and cash equivalents at year-end 51
247
328
51
408
328
Current operations
Investing activities
Investments 37
Acquisition of properties 38
Acquisition of associated companies
39
Divestment of properties 40
Divestment of associated companies Acquisition of financial fixed assets 41
Divestment of financial fixed assets 42
Cash flow from investing activities
Financing activities
Cash flow before changes
in working capital
2,000
SEK M
Cash flow from
investing activities
1,000
1,500
SEK M
Cash flow before
financing activities
2,500
500
2,000
0
1,500
–500
1,000
–1,000
500
–1,500
0
SEK M
1,000
500
0
03
04
05
06
07
Cash flow increased in 2007 primarily due to a
decrease in tax paid and improved net financial
income.
70
–2,000
–500
–2,500
–1,000
03
04
05
06
07
Cash flow was negative in 2007 due to increased
investments and property acquisitions.
03
04
05
06
07
Cash flow from current operations with deduction
for investing activities was negative for 2007.
Cash flow from current operations
Cash flow from financing activities
Cash flow from current operations, before changes in current receivables and
liabilities, increased by SEK 834 M to SEK 1,567 M (733). The increase was
primarily due to a decrease in tax paid and improved net financial income.
Cash flow from current operations, after changes in current receivables
and liabilities, increased by SEK 1,103 M to SEK 1,850 M (747).
Cash flow from financing activities amounted to SEK 521 M (1,167). The
dividend paid increased to SEK 698 M (254). Net loans raised with deductions
for amortization of loans resulted in a net increase of loans of SEK 1,219 M
(net amortization 913). The net increase in loans was due to investments and
acquisitions exceeding sales.
Cash flow from investing activities was a negative SEK 2,175 M (pos: 143).
The change is mainly due to the sale of shares and debenture loans in
Norrporten for SEK 1,905 in the preceding year.
Investments in property increased by SEK 620 M and amounted to SEK
1,667 M (1,047), which was due to a larger project portfolio. Property acquisitions declined and amounted to SEK 868 M (1,385). Property divestments
declined and amounted to SEK 160 M (390).
Investments and acquisitions
3,000
Quarterly, SEK M
Rolling 12 months, SEK M
3,000
2,000
2,000
1,000
1,000
0
0
1,000
1,000
2,000
2,000
3,000
03
04
05
06
Investments, SEK M
Acquisitions, SEK M
Sales, SEK M
07
3,000
Rolling 12 months,
net investments,
acquisitions and
sales, SEK M
Investments and acquisitions exceeded sales of properties in 2007.
71
VASAKRONAN AB – Parent company
Income statement – Parent Company
SEK M
BALANCE SHEET – PARENT COMPANY
2006
2005
Rental revenues 1
2,390
2,293
Operating expenses 2
–512
–509
Maintenance 3
–100
–101
Site-leasehold fees –66
–61
Property tax
–185
–151
Operating surplus
1,527
1,471
Property depreciation
5
–687
–410
2,256
–539
–149
–59
–146
1,363
Property impairment and reversal
of impairment losses
Note
458
76
1,077
–
–100
Operating income
1,012
1,981
Financial items
Result from participations in Group companies
9
928
–
Interest income
13
173
154
Interest expenses
14
–507
–636
Total financial items
594
–482
1,606
1,499
Unrealized value change, financial derivatives
16
20
–
Appropriations
17
13
–92
Tax
18
–192
–273
998
–
1,439
–592
Income after tax
1,475
–
–89
21
444
–96
8
11
259
–362
Gross income 1,099
1,519
Result from sale of properties
7
2
114
Result from participations in
associated companies
6
2007
1,447
1,134
–
310
–680
–370
628
SEK M
Note
2007
2006
2005
20
43
22
16
Tangible fixed assets
Managed properties
21
Work in progress in properties 22
Machinery and equipment
23
18,257
1,100
21
19,378
18,109
631
22
18,762
17,601
379
22
18,002
Deferred tax claims
24
Participations in associated companies
25
26
Total fixed assets
117
–
5,702
25,240
197
–
5,408
24,389
393
374
5,896
24,681
349
148
240
737
25,977
523
206
48
777
25,166
568
–
326
894
25,575
4,000
800
4,800
4,000
800
4,800
4,000
800
4,800
4,063
1,447
5,510
10,310
3,733
1,134
4,867
9,667
2,445
1,475
3,920
8,720
28
219
232
140
Deferred tax liabilities
29
Provision for pensions
Total provisions
230
11
241
170
8
178
75
4
79
8,536
39
8,575
7,432
42
7,474
8,766
221
8,987
4,383
–
2,249
6,632
25,977
4,445
–
3,170
7,615
25,166
3,925
209
3,515
7,649
25,575
1,001
596
1,303
243
1,651
348
ASSETS
Fixed assets
Intangible fixed assets
Current assets
Current receivables
27
Tax claims
Cash and cash equivalents
Total current assets
TOTAL ASSETS
SHAREHOLDERS’ EQUITY AND LIABILITIES
Restricted equity
Share capital Statutory reserve
Unrestricted equity
Profit bought forward Income for the year
Total shareholders’ equity
Untaxed reserves Provisions
Long-term liabilities
Interest-bearing liabilities
30
Noninterest-bearing liabilities
31
Total long-term liabilities
Current liabilities
Interest-bearing liabilities
32
Tax liabilities
Noninterest-bearing liabilities
33
Total current liabilities
TOTAL SHAREHOLDERS’ EQUITY
AND LIABILITIES
Pledged assets
Contingent liabilities
72
34
34
CHANGE IN SHAREHOLDER’S EQUITY – PARENT COMPANY
CASH FLOW STATEMENT – PARENT COMPANY
Share- Statutory-
SEK M
capital
reserves
SEK M
Shareholders’ equity, Dec. 31, 2004
4,000
Profits
Total
brought shareholders’
foward
equity
800
2,790
7,590
Group contribution paid Dividend
Unrealized value change, financial
derivatives
–90
–165
–90
–165
–901)
1,475
3,920
–90
1,475
8,720
Income for the year
4,000
800
Group contribution paid
Dividend
derivatives
–67
–254
–67
–254
1341)
Income for the year
1,134
134
1,134
Shareholders’ equity, Dec. 31, 2006 800
4 867
9,667
Group contribution paid
Dividend
derivatives
–77
–698
–77
–698
–291)
1,447
5,510
–29
1,447
10,310
4,000
Income for the year
4,000
800
The number of shares totaled 4,000,000 with a par value of SEK 1,000.
1) The amounts reported are after tax.
Note
2007
2006
2005
Operating income
Adjustment for items not included in cash flow
36
Interest income
13
Interest expenses
14
Tax paid
Cash flow before changes in working capital
1,012
434
173
–507
5
1,117
1,981
–548
154
–636
–448
503
998
285
310
–680
33
946
Changes in current receivables
Changes in current liabilities
175
–914
378
45
–316
232
29
653
1,628
Investments
37
Acquisition of properties
Acquisition of subsidiaries and associated companies
Divestment of properties
Divestment of associated companies
Divestment of subsidiaries
Acquisition of financial fixed assets
Divestment of financial fixed assets
–1,082
–37
–
51
–
–
–823
495
–763
–28
–
33
819
–
–824
1,387
–437
–
–10
107
1
–
–265
1,277
–1,396
624
673
Dividend paid
Dividend received
Loans raised
43
Amortized loans
44
Group contribution received/paid
Cash flow from financing activities
Cash flow for the year
–698
943
7,397
–6,355
–77
1,210
192
–254
–
6,010
–6,823
–67
–1,134
–278
–165
–
5,641
–7,760
–90
–2,374
–73
Cash and cash equivalents, Jan. 1
Cash and cash equivalents at year-end
48
240
326
48
399
326
Current operations
73
Notes
Note 1 Rental revenues
RENTAL REVENUES – DISTRIBUTION BY GEOGRAPHIC MARKET AND TYPE OF PREMISES
Stockholm
SEK M
2007
Office premises
Retail Garage/Storage Residential Other
Total
2006
Göteborg
Öresund
Elimination
Group
2005
2007
2006
2005
2007
2006
2005
2007
2006
2005
1,523 1,415 1,414
173
170
182
91
80
89
10
8
1
90
79
102
1,887 1,752 1,788
352
69
15
–
46
482
325
66
14
–
39
444
310
64
12
–
32
418
357
123
14
18
28
540
338
138
14
18
10
518
329
115
16
18
23
501
–35
–
–
–
–
–35
–33
–
–
–
–
–33
–41
–
–
–
–
–41
Note 2 Operating expenses
GROUP
PARENT COMPANY
2007
2006
2005
2007
2006
Rates-related expenses 1)
Property operation 2)
Property administration 3)
Depreciation
Total
(of which, personnel costs 4)
–240
–154
–206
–4
–604
–136
–207
–173
–195
–5
–580
–150
–220
–193
–245
–5
–663
–173
–185
–114
–209
–4
–512
–136
–160 –160
–134 –137
–211 –198
–4
–44
–509 –539
–150 –173)
2005
Expense reporting of future invoiced electricity costs resulted in the reduction
of rates-related expenses and rental revenues (refer to Note 1) in the amounts
of SEK 29 M, SEK 25 M, SEK 23 M, respectively for the years 2007–2005 for
the Group and the Parent Company.
1) Includes
electricity, district heating and district cooling.
Includes personnel costs and purchased services for property operation.
3) Includes personnel costs for managing, leasing and marketing costs.
4) Comparative figures for 2006–2005 are adjusted.
2)
Note 3 Maintenance
GROUP
Region, SEK M
PARENT COMPANY
2007
2006
2005
2007
2006
2005
–36
–14
–16
–66
–58
–10
–16
–84
–66
–11
–26
–103
–65
–24
–11
–100
–72
–18
–11
–101
–117
–21
–11
–149
2017
– ff
Total
21
72
Stockholm Göteborg
Öresund
Total
2006
Parent Company
2005
2,197 2,045 2,012
365
374
361
120
108
117
28
26
19
164
128
157
2,874 2,681 2,666
2007
2006
2005
1,876 1,792 1,772
252
252
212
67
61
73
2
2
2
193
186
197
2,390 2,293 2,256
Note 5 Property depreciation
SEK M
2007
PARENT COMPANY
SEK M
2007
2006
2005
Buildings Property equipment Land equipment Land improvements Total
–343
–338
–1
–5
–687
–343
–63
0
–4
–410
–347
–13
0
–2
–362
Office and retail properties are depreciated at a rate of 2% annually, which,
adjusted for impairment, complies with depreciation for tax purposes.
Note 6 Property impairment and
reversal of impairment
Based on external market valuations conducted at year-end 2007, a reversal
of the impairment of the carrying amount was made in the case of properties
whose carrying amount was under the market value. The impairment reversal
was conducted at a value interval based on the external market value of +/–
5%. If the carrying amount is within this value range, no impairment or reversal of earlier impairment is conducted.
Impairments amounting to SEK 259 M were made, which improved
income.
SEK M
Impairment, buildings Reversal of earlier impairments, buildings Total
PARENT COMPANY
2007
2006
2005
–
259
259
–6
464
458
–
76
76
Note 4 Site-leasehold fees
SITE-LEASEHOLD FEES, MATURITY STRUCTURE
SEK M
Group
74
2008 2009 2010 2011 2012 2013 2014 2015 2016
46
–
–
–
–
5
–
–
–
Vasakronan · Annual report 2007
Note 7 Result from sale of properties1)
PARENT COMPANY
SEK M
Sales revenue, properties sold Sales costs, properties sold 2)
Planned residual value, properties sold Adjustment of prior year’s sales Total 1) 2) Note 11 Central administration and marketing
2007
2006
2005
51
–
–29
–20
2
33
–
–26
107
114
116
–1
–94
–
21
Pertains both to sales of companies and directly owned properties.
Pertains to deeds, commitments to tenants and broker fees.
Note 8 Result from participations in associated
companies
SEK M
GROUP
GROUP
SEK M
Personnel costs Marketing
Depreciation
Auditors’ fees1)
Other costs Total 1) Auditors’ fees
Auditing
Ernst & Young
Assignments other than auditing
Ernst & Young
Total
PARENT COMPANY
2007
2006
2005
2007
2006
2005
–65
–13
–
–2
–10
–90
–63
–19
–1
–3
–9
–95
–64
–19
–1
–3
–14
–101
–65
–13
–
–2
–9
–89
–63
–19
–1
–3
–10
–96
–64
–19
–1
–3
–13
–100
1
2
2
1
2
2
1
2
1
3
1
3
1
2
1
3
1
3
PARENT COMPANY
2007
2006
2005
2007
2006
2005
Profit participations Result from sales of participations Value change, properties, financial
instruments, deferred tax 1
–
17
37
31
–
–
–
–
444
–
–
–
–
171
–
–
–
Total
1
54
202
–
444
–
Note 12 Personnel
WAGES, SALARIES, OTHER REMUNERATION AND
SOCIAL SECURITY CONTRIBUTIONS
SEK M
Parent
Company
Subsi-
diaries
Total,
Group
Wages, salaries, other remuneration Social security contributions (of which, pension costs) 132
95
38
43
18
3
175
113
41
Board of Directors and President Other employees 8
124
1
42
9
166
Wages, salaries, other remuneration
Social security contributions
(of which, pension costs) 135
77
27
37
15
2
172
92
29
128
1
36
8
164
Wages, salaries, other remuneration
Social security contributions
(of which, pension costs) 118
83
35
35
15
3
153
98
38
112
2
33
8
145
Board
Audit
Committee
44
288
152
152
152
131
131
44
–
–
4
15
–
15
–
–
–
–
–
–
2007
Note 9 Result from participations in Group
companies
PARENT COMPANY
SEK M
Dividends Result from participations in limited partnership Result from divestment of participations in limited partnership
Total
2007
2006
2005
943
1
–16
928
–
–
–
–
–
–
–
–
2005
Note 10 Income from service operations
GROUP
2006
PARENT COMPANY
SEK M
2007
2006
2005
2007
2006
2005
Revenues
Expenses
Total
126
–122
4
119
–114
5
86
–80
6
–
–
–
–
–
–
–
–
–
REMUNERATION TO BOARD MEMBERS1)
SEK 000s
Egon Jacobsson, Chairman until April 25, 2007
Lars V Kylberg, Chairman from April 25, 2007
Birgitta Kantola Lars Johan Cederlund
Christina Liffner
Jan Roxendal2)
Kristina Schauman2)
Håkan Erixon2)
Ronny Bergström, employee representative Marianne Gustafsson, employee representative 1) Vasakronan · annual report 2007
Remun-
eration Committee
4
15
–
15
–
–
–
–
Pertains to fees paid during the year. 2) Elected during 2007.
75
Note 12, continued
Board fees are determined by the shareholders at the Annual General Meeting.
The AGM decided that annual fees for service on the Board shall be paid to
Board members as follows: Chairman – SEK 348,000 and Board members – SEK
174,000. These Board fees are twice as much compared with the preceding year
and are based on increased demands resulting from heavier workload in conjunction with preparations for the sale of the company. In addition, fees for participation in the Audit Committee shall be SEK 15,000 per member and year and
the same amount for participation in the Remuneration Committee. Board
members shall be entitled to remuneration for out-of-pocket costs incurred in
the service of the company. However, no fees will be paid to any Board member
or deputy member who is employed by the company.
Vasakronan applies the Ministry of Enterprise, Energy and Communication’s
“Guidelines for terms of employment for senior executives, and for incentive programs for government employees”. The principle for remuneration to senior
executives is determined by Vasakronan’s Board and is based on salaries in line
with market rates, results and individual performance. Systematic comparisons
are made with other companies in Sweden.
The bonus program for all employees, with the exception of the President, is
based on development of the operating net, new leasing and customer satisfaction, and can correspond to a maximum of two months’ salary. The outcome for
2007 amounted to SEK 27 M, including social security costs, which corresponded on average to 1.8 monthly salaries. The bonus program is for three
years and is valid until the end of 2008.
The President’s terms were renegotiated in conjunction with the sale of the
company. The entitlement to retire at 60 has been removed. In order to facilitate
matters for the new owners, in the event there is an option other than the market
listing of Vasakronan, the President is entitled to three months notice of termination of employment with 12 months severance pay. In other instances, the President has the same agreement as earlier with six months’ notice of termination
of employment and in the case of notice given by the employer, he is entitled to
18 months fully-adjusted severance pay. The President is entitled to pension provisions as long as he remains in his position. Pension is allocated in accordance
with the premium model, at 45% of salary. Under a premium-based solution,
the individual covered is responsible for the manner in which the pension premium is to be invested, and hence for the pension outcome. The company’s only
obligation is to pay the stipulated premiums on an ongoing basis.
Of other members of Group Management, one person may retire at the age
of 60, with revocable pension rights in accordance with the premium model.
One person may retire at the age of 60 with irrevocable pension right, involving
pension provision that provides 72% of salary and carrying pension entitlement
from 60–65 years of age. The remaining members of Group Management have
a retirement age of 62 and irrevocable pension rights according to the premium
model.
Six months’ notice is required for termination of employment for the remaining members of Group Management. In the case of termination of employment
by the employer, there is also en entitlement to 12–18 months’ fully-adjusted severance pay. Other benefits relate to company car, health insurance, etc.
In conjunction with the sale of the company, the Board has offered group
management and four management members a commitment of transaction
remuneration of six months’ salary, to ensure functioning operations and the
smooth transition to the new owners. The objective is to retain key individuals in
Vasakronan during the owner-change process and create a strong commitment,
which will contribute to a successful process for the owners and the company. In
the event of an ownership change other than market listing, the President has a
commitment of an additional transaction remuneration of six months’ salary. All
remuneration will be paid as lump sum, on condition that the individual remains
with the company for three months following the finalization of the sale.
AVERAGE NUMBER OF EMPLOYEES
Parent Company total
Subsi-
diary
Group,
total
33%
67%
246
67%
33%
156
46%
54%
402
32%
68%
66%
34%
37%
63%
260
138
398
29%
71%
265
61%
39%
109
40%
60%
374
2007
Number of employees, women Number of employees, men Total
2006
2005
BOARD MEMBERS AND SENIOR EXECUTIVES
2007
2006
2005
Number Of Number Of Number Of
on which, on which,
on which,
Dec. 31 women Dec. 31 women Dec. 31 women
Group
Board members President and other
senior executives 14
21%
14
14%
22
18%
13
46%
8
25%
8
25%
9
44%
7
43%
9
33%
8
25%
6
33%
6
17%
Parent Company
Board members President and other
senior executives ABSENCE DUE TO ILLNESS
Group
%
Total absence due to illness – of which, long-term absence Absenteeism, men Absenteeism, women Employees aged –29 Employees aged 30–49 Employees aged 50–
2007
2006
2005
3.8
2.3
3.2
4.5
2.2
4.0
4.7
3.6
2.1
2.9
4.1
1.8
2.6
4.5
4.1
2.3
2.9
4.7
0.6
1.2
2.3
REMUNERATION TO SENIOR EXECUTIVES
SEK 000s
Year
born
Retirement
age
Base
salary1) Other benefits Bonus
Total
Pension
cost )
Håkan Bryngelson, President Leif Garph, Executive Vice President, Stockholm Region Björn Lindström, Chief Financial Officer Rolf Åkerman, Senior Vice President, Göteborg Region
Bengt Möller, Senior Vice President, Corporate Communications Anders Kjellin, Senior Vice President, Öresund Region Pia Clark, President Vasakronan Service Partner Anneli Gardelius, Senior Vice President, Human Resources2),
1948
1955
1954
1950
1949
1964
1962
1965
65
62
62
60
60
62
62
62
4,026
2,111
1,895
1,430
1,430
1,141
1,110
1,025
19
60
82
83
86
80
31
37
–
327
290
216
220
178
113
105
4,045
2,498
2,267
1,729
1,736
1,399
1,254
1,167
1,581
1,393
1,251
478
633
352
318
245
1) Pertains
76
to basic salary paid during the year. Pension costs were charged against earnings for the year. 2) Salary pertains to full-time salary. Gardelius works 80%.
Note 13 Interest income
Note 15 Realized value change, properties
GROUP
SEK M
PARENT COMPANY
2007
2006
2005
2007
2006
2005
Interest income, financial
fixed assets Interest income, other Interest income, subsidiaries Unrealized value change
35
6
–
–
26
2
–
1
130
7
–
–
34
5
134
–
26
3
124
1
130
9
171
–
Total
41
29
137
173
154
310
All interest income pertains to loan receivables reported at accumulated
acquisition value.
2007
Sale price, properties
Sale costs, properties
Reported value, properties
Adjustment of earlier property sales
Total
160
–
–133
–22
5
SEK M
GROUP
PARENT COMPANY
SEK M
2007
2006
2005
2007
2006
2005
Interest expenses Prior redemption of loans
and financial derivatives Interest expenses, subsidiaries Unrealized value change –460
–454
–644
–460
–454
–644
–
–
–
–139
–
–
–
–
–1
–
–47
–
–139
–43
–
–
–35
–1
Capitalization of interest rates1)
Total
63
–397
25
–568
11
–634
–
–507
–
–636
–
–680
All interest expenses pertain to loans classified as other financial liabilities,
reported at accumulated acquisition value.
Interest expenses include the net amount of interest expenses, SEK 160 M,
and expenses of SEK 118 M pertaining to financial derivatives.
1) When
establishing amounts to be included in the acquisition value of assets during
2007, an interest rate of 4.10% was used.
2006
2005
100 1,635
0
–4
–75 –1,547
32
10
57
94
Note 16 Unrealized value change, financial
derivatives
Note 14 Interest expenses
Group
SEK M
Currency interest derivatives Currency loan Interest derivatives Reversal of hedge reserve
Total
GROUP
PARENT COMPANY
2007
2006
2005
2007
2006
2005
23
–23
–8
28
20
–
–
–
–
–
–
–
–
–
–
23
–23
–8
28
20
–
–
–
–
–
–
–
–
–
–
Note 17 Appropriations
SEK M
PARENT COMPANY
2007
2006
2005
Difference between book depreciation
and depreciation according to plan
Machinery and equipment Permanent equipment Land improvements Direct deductions, building investments Reversal of tax allocation reserve
Total
10
–1
5
–5
4
–
13
–
6
1
2
–98
–21
–1
–1
6
4
– 1,449
–92 1,439
77
Note 18 Tax
GROUP
SEK M
Current tax
Deferred tax
Total
2007
PARENT COMPANY
2006
2005
2007
2006
2005
–28
6
–1,702 –1,240
–1,730 –1,234
–478
–64
–542
–51
–141
–192
–33
–240
–273
–482
–110
–592
SUPPLEMENTAL INFORMATION TO Note 18
Tax computation in the Group, Dec. 31. 2007, SEK M
Current
Tax
Deferred
Tax
1,605
Tax-deductible depreciation of buildings and land improvements
–408
of building equipment and land equipment –500
investments
–482
Reversal of earlier eliminated capital gain –112
Other tax-related adjustments
19
Taxable gain from sale of properties
22
Unrealized change in value of properties –
Divestment of participation in limited companies –112
Deficit for future years 28
–
Taxable income for the year
Of which 28% current/deferred tax 60
–17
Tax attributable to earlier tax years –11
11
Current/deferred tax
–28
–1,702
Tax expense, SEK M
Recognized income before tax Tax in accordance with current tax rate Tax effect due to non-taxable dividend:
Company divestment Income participation in associated companies Other tax-related adjustments
Recognized tax expense
Tax expenses, SEK M
Recognized income before tax
Tax in accordance with current tax rate
Tax effect due to non-taxable dividend:
Sale of companies Income participation in associated companies Other tax-related adjustments
Recognized tax expense
78
408
500
482
112
–2
–130
4,750
–
–
6,120
–1,713
Group
2007
2006
2005
6,380 4,643 2,223
–1 786 –1 300 –622
66
57
–
–
–10
9
–1,730 –1,234
33
58
–11
–542
PARENT COMPANY
2007
2006
2005
1,639 1,407 2,067
–459 –394 –579
264
–
3
–192
–
124
–3
–273
–
–
–13
–592
Note 19 Earnings per share
Group
2007
Income after tax (SEK M) Number of shares (million) Earnings per share (SEK) 2006
2005
4,650 3,409 1,681
4
4
4
1,163
852
420
Note 20 Intangible fixed assets1)
GROUP
SEK M
PARENT COMPANY
2007
2006
2005
2007
2006
2005
77
41
64
13
48
16
70
41
57
13
48
9
118
77
64
111
70
57
Amortization value, Jan. 1
–50
Amortization for the year
–21
Accumulated amortization, Dec. 31 –71
–41
–9
–50
–29
–12
–41
–48
–20
–68
–41
–7
–48
–29
–12
–41
27
23
43
22
16
Acquisition value, Jan. 1
Procurements
Accumulated acquisition
value, Dec. 31 Residual value according
to plan, Dec. 31
1) 47
Pertains to procurement and implementation of IT systems in excess of SEK 1 M.
Note 21 Managed properties
APPRAISED MARKET VALUE
SEK M
Contractual yearly rent1)
Operating surplus2)
Present direct yield, market value, %3)
1,297
462
176
510
444
153
3,042
966
345
129
396
300
120
2,256
4.7
5.1
5.7
5.4
5.1 6.7
5.0
Stockholm inner city Greater Stockholm Uppsala
Göteborg
Malmö
Lund
Total
Market value
20,693
6,787
2,255
7,872
5,833
1,796
45,236
1) Rental
contract per January 1, 2008 recalculated for full year.
surplus recalculated with rental contract per January 1, 2008. Expenses for property management not included.
3) Operating surplus recalculated with rental contract per January 1, 2008 in relation to market value.
2) Operating
the calculation period (also known as “residual value”). The calculation period
is normally 5–10 years, but can in certain cases be as many as 25 years,
depending on the contract situation.
Rental revenues are calculated on the basis of applicable leasing agreements to the end of the terms of such agreements, whereupon a judgment is
made as to whether the contract will be extended under the same terms,
extended under modified terms, or terminated with the result that a vacancy
is created. Premises that are unoccupied at the start of a calculation period are
assigned an assessed leasing term and an assessed market rent. A long-term
vacancy rate has been assigned to the entire contract portfolio on the basis of
an assessment of each individual property. Cash flow from operational and
maintenance expenses is calculated partly on the basis of Vasakronan’s
reported financial results for the years 2005 and 2006 and the period up to
and including September 2007 and partly on the basis of knowledge with
regard to comparable properties. Assessments have been made in regard to
properties’ uses, age and maintenance status. The platform for future investments needs comprises Vasakronan’s budgeted investments.
For calculation of residual value, a yield requirement, based on analyses of
completed transactions and knowledge of market developments, has been
assigned to the individual properties’ operating surpluses at the end of the
calculation period. Market value assessments are made in accordance with
guidelines produced by the Swedish Property Index.
The external appraisal has encompassed all properties. The market valuation includes the appraised values of detailed plan building rights and in certain cases the values of building rights for which no detailed plans exist. The
market value of building rights for which no detailed plans exist depends on
such factors as how far advanced the planning progress is. A legally binding
detailed plan in the immediate future generates a higher value of land than at
an early stage of the planning process. Building rights are often valued by
applying a locality comparison, meaning that the market value is assessed
based on a comparison of prices for similar building rights.
Construction projects are usually commenced when rental contracts have
been secured for all or parts of the project. As a result, the building right is
valued as a project from the day on which a rental contract is signed and/or a
project has been approved. From having previously valued building rights
based on a locality price comparison, the project is now valued based on a
cash-flow statement in which the future cash flow is discounted and deductions are made for the investment. An investment gain arises when the
building right is transferred to be valued as a project.
All property valuations are the result of the appraiser’s judgment at any
given time and are, accordingly, prone to some uncertainty. This uncertainty is
expressed as an interval of +/– 5 to 10% for individual properties. The uncertainty interval is deemed to be lower for the market value of the entire portfolio.
Market value
SEK M
Opening balance, Market value
Invested
Purchase of properties
Properties divested
Unrealized value change
Closing balance, Market value
Assessment assumptions, weighed average
Group
2007
38,122
1,626
872
–134
4,750
45,236
2006
2005
32,827 32,895
1,021
597
1,107
–
–86 –1,523
3,253
858
38,122 32,827
Independent appraisal twice per year
An independent appraisal of the entire property portfolio is performed by DTZ
and Newsec at mid-year and year-end.
Appraisal method
The value of a property is calculated as the sum of the present value of the
operating surplus less remaining investments during the calculation period,
and the present market value in the event of a hypothetical sale at the end of
Assumed inflation Allocated interest for cash flow Allocated interest for residual value Yield requirement, residual value Long-term vacancy rate Operating and maintenance expense, year 1
Investments, year 1 Market rent (at zero vacancy)
2.0%
7.0%
7.3%
5.3%
4.1%
SEK 313 m2
SEK 1,115 m2
SEK 1,858 m2
The following yield requirements have been applied for the purposes of assessments:
Central Stockholm Greater Stockholm Uppsala Göteborg Malmö Lund 4.25%–5.75%
5.25%–6.00%
5.25%–6.25%
4.60%–5.80%
5.10%–6.50%
5.40%–6.50%
79
Note 21, continued
Buildings, land and land improvements
SEK M
PARENT COMPANY
2007
2006
2005
Buildings
18,139 18,193 18,081
32
–
–
–724 –355
–
427
332
219
–33
–31 –107
17,841 18,139 18,193
Depreciation value, Jan. 1
Sales and scrapping
Depreciation for the year
Reclassifications
Accumulated depreciation, Dec. 31
Impairment, Jan. 1
Sales and scrapping
Impairment for the year and reversal of impairment
Accumulated impairment, Dec. 31
Residual value according to plan, Dec. 31
–2,767 –2,442 –2,129
6
–
34
–343 –343 –347
48
18
–
–3,056 –2,767 –2,442
–449 –906 –999
9
–
17
300
457
76
–140 –449 –906
14,645 14,923 14,845
Land
2,582 2,581 2,616
4
26
–
–11
–25
–35
2,575 2,582 2,581
2,575 2,582 2,581
Permanent equipment
Acquisition value, Jan.1 Procurements
Reclassifications
Completed projects
Sales and scrapping
Accumulated acquisition value, Dec. 31
Reclassifications
80
SEK M
PARENT COMPANY
2007
2006
2005
Reclassifications
73
23
9
105
32
40
1
73
30
–
2
32
Reclassifications
–13
–3
–5
–21
84
–8
–2
–3
–13
60
–6
–
–2
–8
24
9
2
11
8
1
9
7
1
8
Land improvements
Procurements
Reclassifications Completed projects
Sales and scrapping
Procurements
Sales and scrapping
738
1
700
130
–1
1,568
267
2
315
154
–
738
185
4
–
79
–1
267
–200
–85
–337
–622
946
–122
–15
–63
–200
538
–109
–
–13
–122
145
Land equipment
Completed projects
Total residual value according to plan
Total residual value for tax purposes
–3
–2
–2
–1
–1
–
–4
–3
–2
7
6
6
18,257 18,109 17,601
17,349 17,719 17,143
Tax assessment valuation
Buildings
Land
13,104 9,406 9,451
6,647 6,771 6,794
Total
19,751 16,177 16,245
Note 22 Work in progress in properties
SEK M
Opening balance, Jan. 1 Costs incurred during the year Completed projects Closing balance, Dec. 31 GROUP
2007
Note 24 Deferred tax claims
PARENT COMPANY
2007
2006
2005
SEK M
914
415
1,572 1,062
–848 –563
1,638
914
311
507
–403
415
631
1,036
–567
1,100
379
741
–489
631
258
421
–300
379
Managed properties1)
Financial fixed assets Elimination of capital gains,
development companies Derivative liability Loss carryforward GROUP
1) PARENT COMPANY
2007
2006
2005
2007
2006
2005
30
–
144
–
305
29
30
–
110
–
242
29
92
–
88
124
–
88
137
35
87
–
–
87
–
–
87
–
35
87
210
356
593
117
197
393
Differences between taxable residual values and reported values.
PARENT COMPANY
2007
2006
2005
2007
2006
2005
Procurements
Sales and scrapping
Accumulated acquisition
value, Dec. 31
88
4
–25
94
7
–13
98
9
–13
75
4
–25
79
7
–11
80
3
–4
67
88
94
54
75
79
Sales and scrapping
Accumulated depreciation,
Dec. 31
Residual value according
to plan, Dec. 31
–59
24
–5
–63
11
–7
–64
10
–8
–53
24
–4
–57
11
–7
–53
4
–8
–40
–59
–63
–33
–53
–57
27
29
31
21
22
22
GROUP
2005
Note 23 Machinery and equipment
SEK M
2006
81
Note 25 Participations in association
companies and joint ventures
PARTICIPATIONS IN ASSOCIATED COMPANIES
Participations in associated companies and joint ventures
GROUP
SEK M
Järvastaden AB
NS Holding AB
Ursvik Exploaterings AB
Stora Ursvik KB
Total
PARENT COMPANY
2007
2006
2005
2007
2006
2005
25
–
0
18
43
32
–
0
13
45
9
851
0
13
873
–
–
–
–
–
–
–
–
–
–
–
374
–
–
374
SEK M
Associated companies
2007
Joint ventures
2007
Assets
754
43
Liabilities
Total, shareholders’ equity and liabilities
70
684
754
2
41
43
452
2
1
1
0
0
Balance sheet
Income statement
Revenue
Earnings
Vasakronan’s share
Participations in
No. of
shares
Carrying
amount
in Group,
SEK 000s
Year’s
earnings
Vasakronan’s
share, SEK 000s
Järvastaden AB
556611-6884
Stockholm
50%
50%
500
Ursvik Exploaterings AB
556611-6892
Solna
50%
50%
5,000
Stora Ursvik KB
969679-3182
Solna
50%
50%
50
25,146
60
17,995
43,201
–6,844
1,420
5,494
70
No. of shares
Carrying amount in Group,
SEK 000s
Year’s
earnings
Vasakronan’s
share, SEK 000s
Ullevipark 1 Holding in Gtb AB
556718-6688
Göteborg
50%
50%
500
Ullevipark 2 Holding in Gtb AB
556718-6670
Göteborg
50%
50%
500
–
–
–
72
172
244
Participations in
joint ventures1)
1) Corporate
Reg. No.
Head
office
Corporate
Reg. No.
Capital
share
Head
office
Capital
share
Voting
share
Voting
share
Reported according to the Proportional Method.
Note 26 Financial fixed assets
SEK M
GROUP
PARENT COMPANY
2006
2005
Shares/participations in subsidiaries –
Shares/participations in
other companies –
Interest-bearing receivables
179
Noninterest-bearing receivables
30
Derivative assets
60
–
–
1,266 1,286 1,286
Interest-bearing receivables
–
18
383 1,356
38
370
77
58
–
0
0
4,347 4,020 4,192
29
25
360
60
77
58
Total
498 1,802
5,702 5,408 5,896
Acquisition value, Jan.1 Purchases Sales
Reversal of discounted receivables
Acquisition value according
to plan, Dec. 31
269
2007
2006
2007
2005
Shares/participations in subsidiaries
Purchases
Sales
Income participation for the year
to plan, Dec. 31
82
GROUP
2007
2006
PARENT COMPANY
2005
383 1,356 1,407
91
19
99
–295 –992 –150
–
–
–
179
383 1,356
2007
2006
2005
4,020 4,192 5,368
822
822
100
–495 –1,050 –1,276
–
56
–
4.347 4,020 4,192
Noninterest-bearing receivables
–
–
–
–
–
–
–
–
–
–
–
–
1,286 1,286 1,275
–
0
10
–21
–
–
1
0
1
–
–
–
1,266 1,286 1,286
Shares/participations in other companies
Purchases
Reclassification
Sales
Income participation for the year
to plan, Dec. 31
SEK M
–
–
–
–
–
18
–
–18
–
–
27
–
–
–9
–
–
–
–
–
–
–
–
–
–
–
5
–
–
–5
–
–
–
18
–
–
0
Purchases
Sales
to plan, Dec. 31
38
6
–14
370
5
–337
254
116
–
25
4
–
360
2
–337
254
106
–
30
38
370
29
25
360
77
–
–17
58
19
–
0
58
–
77
–
–17
58
19
–
0
58
–
60
77
58
60
77
58
Derivative assets
Purchases
Sales
to plan, Dec. 31
Schedule to Note 26
Shares and participations
in subsidiaries
Registered
office
Capital
share
Voting
rights
No. of
participations/
shares
Carrying amount
Parent Company,
SEK 000s
Vasakronan Holdingfastigheter AB
556611-6850
Stockholm
Vasakronan Malmöfastigheter AB
556376-7267
Malmö
Handelsbolaget Gotic
969622-2844
Malmö
Fastighets AB Luxor
556059-7139
Malmö
Vasakronan Göteborgfastigheter AB
556548-5587
Stockholm
Vasakronan IC AB
556497-7279
Nyköping
Vasakronan Turator AB
556041-1638
Stockholm
Vasakronan Vattenled AB
556577-9088
Malmö
Vasakronan Lundafastigheter AB
556137-8562
Malmö
Vasakronan Hamnfastigheter AB
556199-2487
Göteborg
Mabrabo AB
556339-0227
Malmö
Kista Science Tower AB
556649-8043
Stockholm
Vasakronan K S T Komplementär AB
556647-7583
Stockholm
Vasakronan Kista Science Tower KB
969660-7820
Stockholm
Järnplåten AB
556633-2184
Stockholm
Kungsjärnet AB
556633-2192
Stockholm
Kungsplåten Förvaltning AB
556633-3869
Stockholm
Vasakronan Uppsalafastigheter AB
556651-1092
Stockholm
Vasakronan Fålhagen AB
556713-4100
Stockholm
Kungspinnen I AB
556701-4278
Stockholm
Kungspinnen II AB
556696-0406
Stockholm
VK Tingshuset AB
556709-9667
Stockholm
Vasakronan Kryssarbolaget AB
556675-1391
Göteborg
Vasakronan Lindholmskajen AB
556126-4176
Göteborg
Frösunda Hus I AB
556704-9183
Stockholm
Frösunda Hus II AB
556704-9175
Stockholm
Frösunda Hus III AB
556704-6213
Stockholm
Priorinnan AB
556675-2423
Malmö
Vasakronan Ängen AB
556637-3550
Stockholm
Vasakronan Handelsplats Råsta AB
556649-8050
Stockholm
Other holding companies Vasakronan Fastighetsutveckling AB
556532-9108
Stockholm
Gamla Ullevi Exploaterings AB
556548-5595
Stockholm
Nya Ullevi Exploaterings AB
556548-5603
Stockholm
Järvatorget AB
556548-5546
Stockholm
Kymlinge Utvecklings AB
556611-6900
Stockholm
Brotorp Utvecklings AB
556611-6918
Stockholm
Vasakronan Ullevifastigheter Holding AB
556718-7884
Göteborg
Vasakronan Ullevifastigheter AB
556718-6704
Göteborg
Ullevi Park Holding 4 i Göteborg AB
556727-4179
Göteborg
Ullevi Park 4 i Göteborg AB
556727-5507
Göteborg
Brunnby Utvecklings AB
556548-5520
Stockholm
Hötorgscity Fastighets AB
556198-6851
Stockholm
Vasakronan Service Partner AB
556538-8690
Stockholm
Restaurang Spring AB 556615-5205
Stockholm
Vasakronan Markholding AB
556675-1771
Stockholm
Other holding companies 100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
1,000
40,012,500
100
2,000
1,000
100,050
21,600
1,000
1,000
1,000
10,000
1,000
1,000
100
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
51,500
1,000
1,000
1,000
1,000
1,000
1,000
6,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
5,000
1,000
1,000
1,000
2,000
1,258,184
–
–
–
–
–
–
–
–
–
–
_
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
5,900
–
–
–
–
–
–
–
–
–
–
100
1,100
–
100
240
Total carrying amount
1,265,624
Corporate
Reg. No.
83
Note 30 Long-term interest-bearing liabilities
Note 26, continued
Group relationship
For further information on financial risk management, refer to pages 14–15.
Civitas AB, 556459-9164, Stockholm, is the Parent Company of the largest
Group in which Vasakronan AB is a subsidiary and for which consolidated
reporting is prepared.
The year’s purchases and sales pertaining to Group companies in the
Vasakronan Group are presented below.
PARENT COMPANY, SEK M
Purchases
Sales
2007
2006
2005
22
23
22
19
31
38
In the case of purchases and sales among Group companies, the same pricesetting principles are applied as for transactions with external parties.
Information about Vasakronan AB
The registered office of Vasakronan AB, Corp. Reg. No. 556474-0123, is in
Stockholm, Sweden. The address of the company’s head office is Box 24234,
Karlavägen 108, 13th floor, SE-104 51 Stockholm.
Of Vasakronan’s total rental revenues amounting to SEK 2,874 M, SEK 920
M or 32% represents rental revenues from related companies. Leasing of
premises to related companies constitutes the most essential business relationship to the group of related companies.
No purchases or sales involved Board members/senior executives. For
remunerations paid to Board members/senior executives, refer to Note 12.
Note 27 Current receivables
SEK M
Accounts receivables
Receivable, investment VAT
Accrued revenues
Prepaid expenses
Other receivables
Accrued interest income
Receivables, Parent Company
Receivables, subsidiaries
Receivables, Group companies
Total
GROUP
PARENT COMPANY
2007
2006
2005
2007
2006
2005
42
195
–
34
119
–
8
–
–
398
268
260
18
61
–
–
8
–
–
615
266
277
22
33
8
18
8
–
–
632
20
55
–
29
84
–
8
4
149
349
214
54
5
27
63
2
8
146
4
523
219
103
9
33
8
16
8
170
2
568
Note 28 Untaxed reserves
PARENT COMPANY
SEK M
2007
2006
2005
Accumulated difference between book depreciation and
depreciation in excess of depreciation according to plan.
219
232
140
Total
219
232
140
Note 29 Deferred tax liabilities
SEK M
84
GROUP
2007
2006
PARENT COMPANY
2005
2007
2006
2005
Differences between taxable
residual value and reported
values of managed properties
Untaxed reserves
Derivative assets
5,991 4,443 3,520
224
119
94
47
6
17
–
6
153
–
17
75
–
–
Total
6,116 4,554 3,567
170
75
230
GROUP
SEK M
2007
Bank loans
Bond loans, SEK
Bond loans, EUR
Loans from subsidiaries
Total
2006
PARENT COMPANY
2005
2007
4,013 3,774 3,339
4,536 3,170 4,005
–
323 1,357
–
–
–
8,549 7,267 8,701
2006
2005
4,013 3,774 3,339
4,523 3,170 4,005
–
323 1,357
–
165
65
8,536 7,432 8,766
Finance policy
Vasakronan’s finance policy specifies goals, guiding principles and division of
responsibility within financial operations. The finance policy regulates the risk
mandate and principles governing calculation, reporting, follow-up and control of financial risks. Vasakronan’s finance policy is evaluated and approved
annually by Vasakronan’s Board.
In order to ensure effective management and reduction of financial risks
and to capitalize on economies of scale, all financial operations are carried out
by the Group’s central finance function.
Financial risk
Policy
Outcome,
Dec. 31,
2007
Financial risk
Loan maturity
Loans reaching maturity, 12 months Credit facilities and cash and cash
equivalents in relation to loans reaching
maturity, 12 months Term, credit facilities
2-4 years
max 50%
2.2 years
34%
at least100%
at least 1 year
121%
1.8 years
0.5-3 years
1.0 years
at least A–
fulfilled
not permitted
none
Interest risk
Interest term
Credit risk
Counterparty rating
Currency risk
Currency exposure Financial risks
Through its financial activities, Vasakronan is exposed particularly to interestrate risk, financing risk, credit risk and currency risk. Through changes in interest-rate conditions, interest-rate risk affects Vasakronan’s loan expenses both
negatively and positively. Financing risk and credit risk would have an adverse
effect on Vasakronan should such events occur.
FINANCING-MATURITY DATE STRUCTURE, DEC. 31, 2007
Interest term
Loan maturity
Committed
credit facilities
Interest Share Share Share
Year
SEK M
%
%
SEK M
% SEK M
%
0–1
1–2
2–3
3–4
4–5
5–6
6–7
Total
9,265
1,500
900
400
380
–
500
12,945
4.3
4.3
3.6
3.8
3.9
–
4.6
4.3
71
12
7
3
3
–
4
100
4,355
3,390
900
1,000
2,400
650
250
12,945
34
26
7
8
18
5
2
100
2,010
1,000
1,000
–
1,000
–
–
5,010
40
20
20
–
20
–
–
100
The interest term was 1.0 years. The loan maturity amounted to 2.2 years.
Credit facilities and cash and cash equivalents exceeded loans maturing during the next 12 months.
financing SOURCES, DEC. 31, 2007
Counterparty risk derivatives – maturity date structure
SEK M
Limit
Commercial paper program
MTN program
EMTN program
Bank loans
Committed credit facilities
Total
Of which, utilized
Share,
%
2,914
5,664
333
4,034
–
12,945
23
44
2
31
–
100
5,000
20,000
9,435
4,034
5,010
–
Loans are reported in nominal amounts. Bank loans with mortgage deeds
amounted to SEK 1,000 M.
SEK M
Dec. 31, 2007
Dec. 31, 2006
Dec. 31, 2005
Amount
Amount
Amount
–
–
26
3
–
10
14
–
8
61
–
4
35
2
–
5
6
–
–
52
28
1
2
–
12
5
–
–
–
48
2006
2007
2008
2009
2010
2011
2012
2013
2014
Total
Derivative portfolio – maturity-date structure
Dec. 31, 2007
SEK M
Dec. 31, 2006
Dec. 31, 2005
Nominal amount
Fair
value
Nominal amount
Fair
value
Nominal
amount
Fair
value
2006
2007
2008
2009
2010
2011
2012
2013
2014
–
–
1,628
1,300
–
400
380
–
500
–
–
27
3
–
10
14
–
6
–
815
1,628
300
–
400
380
–
–
–
8
40
2
–
5
6
–
–
815
1,784
428
300
1,395
1,110
–
–
–
25
–52
–4
–11
–10
–16
–
–
–
Total
4,2081)
602)
3,523
61
5,832
–68
The largest single receivable against a single counterparty was SEK 22 M. The
corresponding liability to a counterparty amounted to SEK 1 M.
1) Consist
of interest-rate swaps of SEK 3,885 M and currency rate swaps of SEK 323 M.
2) Consist of interest-rate swaps of SEK 53 M and currency rate swaps of SEK 7 M.
FINANCIAL INSTRUMENTS – REPORTED AND FAIR-VALUE
GROUP
2007
2006
2005
Reported value
Fair value
Reported value
Fair value
Reported value
Fair value
60
60
60
60
77
77
77
77
58
58
58
58
43
179
247
50
519
579
43
179
247
50
519
579
45
396
51
294
786
863
45
396
51
294
786
863
873
1721
328
296
3,218
3,276
873
1721
328
296
3,218
3,276
–
–
–
–
16
16
16
16
126
126
126
126
8,510
7,267
7,247
8,701
7
4,385
4,445
4,459
3,925
1,257
1,233
1,233
1,271
14,159
12,945
12,939
13,897
14,159
12,961
12,955
14,023
8,804
Financial assets
Financial assets held for sale
Derivative
Total
Loan receivables and accounts receivables
Participations in associated companies
Share of financial fixed assets
Cash and cash equivalents
Share of current receivables
Total
Total financial assets
Financial liabilities
Financial liabilities held for sale
Derivatives
Total
Other financial liabilities
Long-term interest-bearing loan liabilities1)
Share of long-term noninterest-bearing liabilities
Current interest-bearing liabilities1)
Share of current noninterest-bearing liabilities
Total
Total financial liabilities
1) 8,549
7
4,384
1,257
14,197
14,197
3,938
1,271
14,013
14,139
Fair value differs from reported value due to the fact that the interest rate used at the time of evaluation differs from the interest rate that was agreed when the loan was obtained.
85
Note 31 Long-term noninterest-bearing
liabilities
GROUP
SEK M
Elimination of capital gains,
development companies1)
Derivative liability
Other long-term liabilities
Total
2007
326
0
49
375
2006
442
16
28
486
Note 34 Pledged assets and contingent
liabilities
PARENT COMPANY
2005
490
126
96
712
2007
–
0
39
39
2006
–
16
26
42
2005
–
126
95
221
1) In
the sale of properties and land to associated companies, part of the capital gain corresponding to
Vasakronan’s shareholding was eliminated in the Group. The eliminated capital gain is liquidated at
the pace at which properties are sold or Vasakronan reduces its holdings. The reversal of intra-group
profit is reported in its entirety as “Acquisition costs of building rights” in the income statement.
Note 32 Current interest-bearing liabilities
SEK M
Commercial paper loans
Bond loans, SEK
Bond loans, EUR
Loans from Parent Company
Total
GROUP
2007
2006
SEK M
Mortgages pertaining to
liabilities to credit institutions Contingent liabilities GROUP
2007
2006
PARENT COMPANY
2005
1,001 1,775 2,639
596
243
348
2007
2006
2005
1,001 1,303 1,651
596
243
348
On December 31, 2007, mortgages were pledged for bank loans in an
amount of SEK 1,001 M.
Vasakronan provided a surety of SEK 258 M to Järvastaden AB. Vasakronan provided a surety of SEK 173 M to Ullevibolagen.
Vasakronan stood as guarantor for Järvastaden AB’s and Stora Ursviks KB’s
fulfillment of development agreements vis-à-vis current municipalities.
Vasakronan has joint responsibility for Stora Ursvik’s liabilities of SEK 155 M.
PARENT COMPANY
2005
2,890 2,780 1,112
1,137 1,120 2,158
323
515
625
34
30
30
4,384 4,445 3,925
2007
2006
2005
2,890 2,780 1,112
1,137 1,120 2,158
323
515
625
33
30
30
4,383 4,445 3,925
Note 35 Earnings per share
EARNINGS PER SHARE
Dividend (SEK M)
Number of shares (million)
Dividend per share (SEK)
2007
2006
2005
791
4
198
698
4
175
254
4
64
Note 33 Current noninterest-bearing liabilities
SEK M
GROUP
PARENT COMPANY
2007
2006
2005
16
276
–
–
99
12
232
–
–
110
7
145
–
–
136
Advances from customers
Accounts payable
Liabilities to subsidiaries
Liabilities to Group companies
Other liabilities
Accrued expenses and
prepaid income
1,097 1,058 1,162
Total
1,488 1,412 1,450
2007
2006
2005
14
11
6
190
166
119
626 1,876 2,047
434
95
128
30
96
175
955
926 1,040
2,249 3,170 3,515
Accrued expenses and
prepaid revenues
Prepaid rental revenues
Accrued interest expenses
Accrued vacation pay
Accrued social security fees
Property tax
Other items
Total
543
670
605
108
57
211
15
13
14
14
11
13
231
179
179
186
128
140
1,097 1,058 1,162
411
108
12
13
197
214
955
531
503
57
211
11
11
10
12
161
163
156
140
926 1,040
Note 36 Adjustments for items not included
in cash flow
GROUP
2007
2006
2005
2007
2006
2005
Reversal of eliminated intra
-Group profit
–100
–98
–
–
–
–
–1
–
3
28
–
–
–
–54
–5
1
15
–
–
–
–208
–
2
24
–
–
2
–
–
3
712
–259
–22
–
–444
–56
4
424
–457
–19
–
–
–
–1
382
–76
–20
–
–70
–141
–180
434
–548
285
2006
2005
2007
2006
2005
–1,626 –1,025
–41
–13
0
–9
–1,667 –1,047
–585
–16
4
–597
–1,037
–41
–4
–1,082
–743
–13
–7
–763
–425
–9
–3
–437
Profit/loss from participation in
Upward discounting of receivable
Change in pension liability
Depreciation
Impairment
Gain/loss, property sales
Other
Total
Note 37 Investments
SEK M
Buildings
Machinery and equipment
Total
86
PARENT COMPANY
SEK M
GROUP
2007
PARENT COMPANY
Note 38 Acquisition of properties
PROPERTY ACQUISITIONS
Contract date
Location
Property
Seller
Purchase price,
SEK M
Feb. 1, 2007
Solna
Rosenborg 2 & 3 (building rights) JM
May 22, 2007
Göteborg
Masthugget 10:3
Sätila Holding
June 14, 2007
Göteborg
Lindholmen 28:1
GFK Personal Feb. 1, 2007
Solna
Rosenborg 1
JM
Dec. 11, 2007
Malmö
Priorn 2
Wihlborgs
Dec. 19, 2007
Uppsala
Kungsängen 4:4
GE Real Estate
Dec. 19, 2007
Göteborg
Lorensberg 45:16
Folksam
Total
1) Transfer date
96
35
105
380
145
107
125
993
Mar. 7, 2007
June 14, 2007
July 2, 2007
Dec. 3, 2007
Dec. 18, 2007
Dec. 19, 2007
Feb. 1, 20081)
Reported on transfer day.
Note 39 Acquisition of associated companies
SEK M
Capital contribution, associated companies
Total
Group
2007
2006
2005
–3
–3
–4
–4
–8
–8
Note 40 Sale of properties and companies
PROPERTY SALES
Contract
date
Location
Property
Purchaser
Purchase price,
SEK M
Mar. 1, 2007
Göteborg
Heden 46:1, 46:2
50%-owned with NCC
Dec. 5, 2007
Sundbyberg
Sundbyberg 2:84
Pysslingen
Dec. 11, 2007
Malmö
Neptun 6
Wihlborgs
Dec. 21, 2007
Sundbyberg
Del av Sundbyberg 2:44
NCC
Total
Note 41 Acquisition of financial fixed assets
SEK M
Acquisition of interest-bearing receivables Acquisition of noninterest-bearing receivables
Total
Transfer day
45
15
84
16
160
Mar. 1, 2007
Dec. 5, 2007
Dec. 18, 2007
Dec. 21, 2007
Note 43 Loans raised
Group
2007
2006
2005
SEK M
–91
–6
–97
–15
–2
–17
–111
–156
–267
MTN
Commercial papers
Bank loans
Total
GROUP
PARENT COMPANY
2007
2006
2005
2007
2006
2005
2,450
2,914
2,046
–
7,410
1,830
2,780
1,300
–
5,910
2,100
1,112
2,429
–
5,641
2,450
2,914
2,033
–
7,397
1,830
2,780
1,300
100
6,010
2,100
1,112
2,429
–
5,641
2005
2007
Note 42 Sale of financial fixed assets
SEK M
Sale of noninterest-bearing receivables
Sale of interest-bearing receivables
Total
Group
2007
2006
2005
2
337
298 1,050
300 1,387
–
152
152
Note 44 Loans amortized
SEK M
MTN
Commercial papers
Bank loans
Total
GROUP
2007
2006
PARENT COMPANY
–1,585 –4,847 –3,545
–2,800 –1,112 –1,405
–1,806 –864 –2,810
–
–
–
–6,191 –6,823 –7,760
2006
2005
–1,585 –4,847 –3,545
–2,800 –1,112 –1,405
–1,805 –864 –2,810
–165
–
–
–6,355 –6,823 –7,760
87
Proposed disposition of earnings
Unrestricted shareholders’ equity in the Parent Company is:
SEK
2007
Profit brought forward
Profit for the year
Total
4,063,173,833
1,447,250,203
5,510,424,036
A Group contribution of SEK 215,084,462 was received from subsidiaries and
a Group contribution of SEK 215,084,462 was made to subsidiaries.
The Board of Directors and the President propose that the above amount be
distributed as follows:
SEK
2007
Dividend to shareholders
To be carried forward
Total
791,000,000
4,719,424,036
5,510,424,036
The Income Statement and Balance Sheet will be presented for adoption at
the Annual General Meeting on April 22, 2008.
The undersigned herewith certify that, to the best of their knowledge, the Annual
Report was prepared in accordance with International Financial Reporting
Standards, IFRS, such as have been adopted by the EU, and generally accepted
accounting practice and gives an accurate view of the Group’s and the Company’s position and earnings, and that the Consolidated Board of Directors’
Report and the Board of Directors’ Report give an accurate view of the develop
ment of the Group’s and the Company’s operations, position and profits and
describe significant risks and uncertainties that face Group companies.
The Board’s proposal in regard to dividends and its statement
regarding proposed profit distribution pursuant to Chapter 18
Section 4 of the Swedish Companies Act.
Proposal
The Board proposes that the Annual General Meeting of Vasakronan AB
approve the distribution of SEK 791 M, or SEK 197.75 per share, to the owner.
The dividend shall be paid on April 29, 2008.
Consolidated shareholders’ equity has been determined pursuant to such
IFRS standards and interpretations of the same as have been adopted by the
EU and pursuant to Swedish law through application of the Swedish Financial
Accounting Standards Council recommendation RR 30:06 (Supplementary
accounting rules for Group companies). Shareholders’ equity of the Parent
Company has been determined pursuant to Swedish law and through application of the Swedish Financial Accounting Standards Council’s recommendation RR 32:06 (Accounting for legal entities).
The Board finds that full coverage of the company’s restricted equity would
remain following the payment of dividends.
The Board also finds that the proposed dividend to shareholders is justified
in view of the criteria presented in Chapter 17, Section 3, Paragraphs two and
three of the Swedish Companies Act, pertaining to the Company’s and the
Group’s operations, extent and risks and consolidation requirements, liquidity
and position in general.
Valuation at fair value
Derivative instruments have been valued at fair value pursuant to Chapter 4,
Section 14a of the Swedish Annual Accounts Act. Shareholders’ equity has
thereby increased by SEK 15 M.
Lars V Kylberg
Chairman
Birgitta Kantola
Lars Johan Cederlund
Christina Liffner
Jan Roxendal
Kristina Schauman
Håkan Erixon
Håkan Bryngelson
President
Marianne Gustafsson
Employee representative
Ronny Bergström
Employee representative
Our audit report was submitted on February 15, 2008.
Ernst & Young AB
Ingemar Rindstig
Authorized Public Accountant
88
Auditor’s report
To the Annual General Meeting of the shareholders of Vasakronan AB
Corporate registration number 556474-0123
We have audited the annual accounts, the consolidated accounts and the accounting records as well as the
administration of the Board of Directors and the President of Vasakronan AB for the 2007 fiscal year. The company’s annual accounts and consolidated accounts are included in the printed version of this document on pages 1,
4–88 and in the Group review. The Board of Directors and the President are responsible for these accounts and
the administration of the company, as well as ensuring compliance with the International Financial Reporting
Standards (IFRS) as adopted by the EU, and the Swedish Annual Accounts Act, in the preparation of the consolidated accounts. Our responsibility is to express an opinion on the annual accounts, the consolidated accounts and
the administration based on our audit.
The audit was conducted in accordance with generally accepted auditing principles in Sweden. Those standards require that we plan and perform the audit to obtain reasonable, but not absolute, assurance that the
annual accounts and the consolidated accounts are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the accounts. An audit also includes assessing
the accounting principles used and their application by the Board of Directors and the President, as well as evaluating significant assessments used in the preparation of the annual accounts and the consolidated accounts and
to evaluate the overall information in the annual accounts and consolidated accounts. As a basis for our opinion
concerning discharge from liability, we examined significant decisions, actions taken and circumstances of the
company in order to be able to determine the liability, if any, to the company of any Board member or the President. We also examined whether any Board member or the President has, in any other way, acted in contravention of the Companies Act, the Annual Accounts Act or the Articles of Association. We believe that our audit provides a reasonable basis for our opinion set out below.
The annual accounts have been prepared in accordance with the Annual Accounts Act and give a true and fair
view of the company’s results and position in accordance with generally accepted accounting principles in Sweden. The consolidated accounts have been prepared in accordance with the International Financial Reporting
Standards (IFRS) as adopted by the EU, and the Annual Accounts Act and provide a true and fair view of the
Group’s results and position. The Board of Directors’ Report is in agreement with the other parts of the annual
report and consolidated accounts.
We recommend to the General Meeting of shareholders that the income statements and balance sheets of the
Parent Company and the Group be adopted, that the profit for the Parent Company be dealt with in accordance
with the proposal in the administration report and that the members of the Board of Directors and the President
be discharged from liability for the fiscal year.
Ernst & Young AB
Ingemar Rindstig
Authorized Public Accountant
89
Corporate governance report
Transparency to create increased value
Vasakronan is 100-percent owned by the Swedish
State via Civitas Holding AB. Vasakronan operates in
fully competitive markets and according to the same
terms and conditions as other players in the property market. The State sets market-based requirements on earnings and return on investment.
On June 20, 2007, the Swedish Parliament
decided to sell its ownership of Vasakronan,
Nordea, OMX, SBAB, TeliaSonera and Vin & Sprit.
These companies currently operate in markets
that are entirely commercial and that feature
effective competition. The Government believes
that these companies will have better conditions
from which to develop with a different owner
than the State.
The analysis phase of the sales process began in
October 2007. JP Morgan has been commissioned
by the ministry to perform an analysis and present
proposals on suitable procedures for a sale. Law firm
Cederquist Advokatbyrå has been commissioned to
conduct a legal review of Vasakronan.
Vasakronan complies with the Swedish Code of
Corporate Governance and statements from the
Institute of Swedish Corporate Governance which
supplement the State’s Ownership Policy and
Guidelines for External Reporting by State-owned
Companies. Vasakronan is listed on the Stockholm
Stock Exchange through an MTN bond program
and observes the Exchange’s recommendations and
guidelines for information distribution.
Vasakronan’s Articles of Association state that
the object of the company’s operations is to own
and manage property and to conduct property
management and thereby promote compatible
operations, such as owning and managing chattels.
The Swedish State is a key company-owner in
Sweden. The Government Offices manage 55 companies, of which 40 are wholly owned and 15 are
90
jointly owned with other parties. Four companies
are listed on the stock exchange. The State has
major responsibility for being an active and professional owner. The Government’s overriding goal for
management operations is value creation and,
where necessary, ensuring that expressed public
interests are realized. Principles for State administration are openness, active ownership and good
order. The external reporting from State-owned
companies, which includes annual reports, quarterly
reports, corporate governance reports and internal
control reports, shall be as transparent as those
reports produced by listed companies.
Responsible and professional ownership should
include assuming responsibility for issues pertaining
to sustainable development, which, for example,
encompasses ethics, the environment, human
rights, equality and diversity. All companies have
such responsibilities, but State-owned companies
should act as an example to other companies and
be at the forefront of such matters. In its new guidelines from November 2007, the Government stipulates that the boards of State-owned companies are
responsible for ensuring that, effective from the
2008 fiscal year, their companies present a sustainability report that complies with the Global Reporting Initiative’s (GRI) guidelines.
Conditions of employment and
incentive programs
Nomination process for board
members and auditors
Application of the Code of Corporate
Governance
The Government’s goal is that the boards of
State-owned companies manifest a high level of
expertise, well-adapted to the respective company’s operations, situation and future challenges.
The members should always act to ensure the
company’s best interests. The Government expects
members to be of high integrity and to meet
standards for judgment appropriate to represen
tatives of the State.
Vasakronan complied with the Code of Corporate
Governance during 2007.
Information about corporate governance is
published on Vasakronan’s website, www.vasakronan.se, on an ongoing basis.
The Government has guidelines for employee
incentive programs and for employment conditions for senior executives in State companies. The
guidelines clarify that there is a preference for
fixed salaries.
If a company’s board sees fit to introduce an
incentive program, it should include all employees
except the president. Bonuses are not to exceed
two months’ salary.
The Government mandates defined-contribution pensions (a fixed pension premium) and the
earliest retirement age be raised from 60 to 62. In
the annual report, remuneration for the CEO,
president and senior executives must be reported
on an individual basis. Fees shall also be reported
for board members.
Vasakronan has had an incentive program
since 2005 based on net operations development,
new leasing and customer satisfaction that can
yield a maximum of two extra months’ salary. The
incentive program includes all employees, with the
exception of the President.
The agreements entered into with senior executives apply on a continuing basis and new guidelines have been successively introduced.
General meetings
The shareholder’s rights to make its influence felt
are exercised at General Meetings. Representa-
Organization
President
Göteborg
REGION
The Board’s activities
REGION
Stockholm
An Extraordinary General Meeting was
held in October 2007 at which Håkan
Erixon, an expert advisor at the Swedish
Ministry of Enterprise, Energy and Communications, was elected to the Board.
Board of
Directors
Staff units/
Support
REGION
tives of the owner, in Vasakronan’s case
representatives of the Swedish Ministry of
Industry, Employment and Communications, and Government representatives
are invited to the General Meetings.
At an Annual General Meeting, decisions are made about, among other
issues, dividends, approval of income
statements and balance sheets, discharge
from responsibility of Board members and
the President, election of Board members,
auditors and remuneration to the Board
and auditors.
The Annual General Meeting was held
on April 25, 2007 and was open to the
general public. The notice was sent out in
accordance with the Articles of Association. In October 2006, information was
released with regard to the date and place
of the Annual General Meeting, in accordance with the Code of Corporate Governance, and this information was also
made available on Vasakronan’s website.
Lars V Kylberg was elected as Vasakronan’s new Board Chairman. The Meeting
resolved to re-elect Lars Johan Cederlund,
Birgitta Kantola and Christina Liffner. Two
new Board members were elected: Jan
Roxendal and Kristina Schauman. Former
Chairman Egon Jacobsson, who was the
Chairman of the Board from 2000, left
the Board. Marianne Gustafsson and
Ronny Bergström were re-elected as
employee representatives.
The Annual General Meeting decided
on dividends totaling SEK 698 M (254),
fees for Board members, and principles
for remuneration and other conditions of
employment for senior executives.
Öresund
Stockholm
City
Eastern
Göteborg
Southern
Malmö
Central
Stockholm
Western
Göteborg
Northern
Malmö
Stockholm
Östermalm
Göteborg
Gullbergsvass
Lund
Greater
Stockholm
Kista
Uppsala
The organization consists of three regions, twelve market
areas and the subsidiary Vasakronan Service Partner. The
strategy-oriented Corporate Staffs Control and Treasury
and Communications are complemented by the serviceoriented Corporate Staffs IS/IT, Legal, Human Resources,
Procurement, Quality and Environment, and Analysis and
Evaluation.
Vasakronan
Service
Partner
During the sale process, the Board has
been under increasingly rigorous demands
and a greater workload as a result of the
preparations for a sale of the company.
The Board is responsible for the company according to the Swedish Companies Act. The Board decides concerning:
• the Group’s overall goals, strategies
and policies.
• major property and company acquisitions or sales and investments.
• the Group’s financial structure.
• compensation to executive management.
The Board approves the annual report,
interim reports and proposes dividends at
the Annual General Meeting.
The Board’s responsibilities also
include:
• evaluating the company’s operational
management and the performance of
the President.
• ensuring that external information is
characterized by openness and explicitness.
• ensuring that operational risk areas are
identified and managed.
The Board’s rules of procedure are aimed
at satisfying the Board’s information and
decision-basis requirements. The rules of
procedure for the Board stipulate responsibilities and powers, the size and compo-
91
Corporate governance report
Board meetings
31/1
15/2
25/4
11–12/6
12/7
Egon Jacobsson1)
x
x
Lars V Kylberg
x
–
x
x
x
Birgitta Kantola
x
x
x
x
x
x
x
x
x
x
Christina Liffner
x
–
x
x
x
Jan Roxendal
x
x
x
Kristina Schauman
x
x
x
Håkan Erixon2)
Ronny Bergström
x
x
x
x
x
Marianne Gustafsson
x
x
x
–
x
1) 2) 25/10
19/11
18/12
x
x
x
–
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
Resigned at the 2007 Annual General Meeting.
Elected at the Extraordinary General Meeting held in October 2007, present as a co-opted member on August 31, 2007.
sition of the Board, instructions for the conducting
of Board meetings and the keeping of minutes,
the division of responsibility between Chairman
and President, matters upon which the Board
must decide, how financial reporting is to be handled and rules of confidentiality. Stringent requirements are placed on financial reporting, and on
the supporting documentation for each individual
matter that is to be the object of a decision.
The Board’s work for the year
During the 2007 fiscal year, the Board had eight
ordinary meetings and one extraordinary meeting
as follows:
January – Year-end report
Internal control – the Board’s report for
2007
The Board is responsible for internal control in accordance with the Swedish Companies Act and Swedish Code of Corporate Governance. This report has
been prepared in accordance with the Swedish
Code of Corporate Governance and recommendations by the Institute of Swedish Corporate Governance and thus is restricted to internal control
regarding financial reporting. This report is a not a
part of the formal annual report documentation.
Control environment
The control environment constitutes the foundation for Vasakronan’s internal control. The control
environment spans the common value foundation
that creates a corporate culture. Within Vasakro-
92
31/8
The Chairman of the Board leads the Board’s
work. The Chairman follows the company’s operations and development through contacts with the
President. The Chairman consults with the President regarding strategic issues and represents the
company together with the President in relation to
the owner.
The Board has two committees: an Audit Committee and a Remuneration Committee.
February – Year-end report, review with Vasakronan’s auditors, report of the Audit Committee,
reviewed finance policy, follow-up of acquisitions and
investments from 2003, development of Vasakronan’s
human capital, incentive program and strategic
issues.
At the 2007 Annual General Meeting, Egon
Jacobsson left the Board. He was also a member of
the Audit Committee and the Chairman of the
Remuneration Committee.
The members of the Audit Committee since
the 2007 Annual General Meeting are Kristina
Schauman, Chairman, Lars V Kylberg and Lars
Johan Cederlund. The Audit Committee held four
meetings in 2007. The most important matters
June – Extensive strategic discussions focusing on options available in
the event of the sale of Vasakronan, commitment to Järvafältet, a
decision on Vasakronan’s investment policy, property transactions,
decision on purchases in Göteborg, the conversion and extension of
Gasklockan in Malmö, investments in a new IT project and strategic
issues.
April – Quarterly report, forecast, report from the Audit Committee, presentation of a new IT project, report on property transactions, investments in Rådhuset, Stockholm, Hugin, Uppsala, Svea
Artilleri, Stockholm, the new city court building in Göteborg and
strategic issues.
nan, there is broad acceptance among the Board,
management and workforce with regard to five
guiding concepts that govern actions:
• Business-like conduct
• Open communications
• Constant improvement
• Ethics and morality
• Environmental awareness
These values are subject to continuous analysis in a
self-examination program in which the focus is on
ethics and morality.
Decision channels, powers and responsibilities
within Vasakronan are clearly defined and communicated. Internal policies and process descriptions, accessible on Vasakronan’s intranet, encompass all essential areas and provide guidance to all
executives of the company.
Risk assessment
Analysis and identification of the risks that affect
Vasakronan are carried out and updated on an
ongoing basis. Significant risks to Vasakronan that
influence internal control with respect to financial
reporting are:
• The leasing process
• The procurement process
• The maintenance process
• The investment process
• Project activities
• Property appraisals
• Finance function
• Acquisition and divestment of properties
• IT systems
• The reporting process
Audit Committee
26/1
3/4
11/9
4/12
Remuneration Committee
15/2
25/10
Egon Jacobsson1)
x
–
x
Lars V Kylberg
x
x
x
x
x
x
x
x
x
x
Kristina Schauman
–
–
x
x
Jan Roxendal
Håkan Erixon
1) x
x
x
x
Resigned at the 2007 Annual General Meeting.
governing remuneration to senior executives are
determined by the Annual General Meeting and
are based on salaries being market-level, resultsoriented and individually determined.
The Board evaluates the Board’s work on an
annual basis. The evaluation is directed by the
chairman and complies with guidelines from the
Ministry of Industry, Employment and Communication.
Carl Conradi, General Counsel, served as the
Board’s secretary.
Auditors
discussed were the planning and execution of the
audit, examination of interim reports and the
annual report and accounting and valuation
issues. In addition, there was a review of the supplementary audit performed on investment projects, investment VAT and representation.
Since the Annual General Meeting, the Remuneration Committee has comprised Lars V Kylberg,
Chairman, Lars Johan Cederlund and Jan Roxen-
dal. Håkan Erixon has been a member of the Committee since October 2007. During the year, the
Remuneration Committee held two meetings. The
most important matters discussed were the principles for remuneration to the President and other
senior executives, renegotiation of the contract
with the President, revision of the salary scale for
the President and other senior executives and scrutiny of signed consulting contracts. The principles
August – Six-month report, forecast, external report on the
property market, strategic review and visit to Stockholm Region,
status report concerning the sales process, surveys of customers, employees and stakeholders, and strategic issues.
July – Six-month report
October – Quarterly report, forecast, report from the Audit Committee, adjustment of the Board’s rules of procedure, Board evaluation, report on the sales process, report on IT security activities,
investments in Heden in Göteborg and Gasklockan in Malmö, dates
of meetings in 2008, President’s salary, remuneration and Board
evaluation.
November – Report on the sales process, property transactions, budget and
business plan 2008-2010, figures material, issues pertaining to remuneration to
Group management..
December – Budget and business plan, report from the Audit Committee, report on the sales process, future financial structure, property
transactions, acquisition of Tigern 1 in Malmö, Lorensberg 45:16 in
Göteborg, Kungsängen 4:4 in Uppsala and reviewed investments in
Svea Artilleri, Stockholm and remuneration to President and other
members of Group management.
Control activities
Follow up
The risks identified in regard to financial reporting
are handled via Vasakronan’s control structure that
include rules of procedure, limits of responsibility
and authorization rules documented in process
descriptions and policies, which are common to
Vasakronan as a whole.
A process is in place for follow-up and evaluation
of compliance with processes and policies. One
tool is managerial review at the regional and corporate levels. There is a special follow-up process
for confirming that reported deficiencies are being
corrected.
At each meeting, the Board receives financial
information and analysis, and a report from the
most recent meeting of the Audit Committee,
whose work is described in the Corporate Governance Report on page 90.
Information and communication
Vasakronan’s information and communication
channels, to the extent that they encompass
internal control with respect to the financial
reporting, are goal-oriented and well-known and
enable reporting and feedback from operations to
Group management, the Audit Committee and
the Board.
Each year, the company’s auditor personally
reports his observations from the examination
and assessment of the company’s internal control.
The auditor also participates in meetings or parts
of meetings of the Audit Committee. Ernst &
Young is Vasakronan’s auditor and was
appointed at the 2004 Annual General Meeting
for a four-year period. Authorized Public Accountant Ingemar Rindstig is the Auditor in Charge.
Vasakronan’s audit expenses are presented in Note
11 on page 75.
nal auditors perform a number of special examinations, including an examination of project activities
and representation.
The Board has evaluated the need for a special
examination function. Against the background of
the scope of Vasakronan’s operations and their orientation, the Board has decided against establishing a special examination function. One reason is
that the external auditors already perform special
examinations with regard to a number of areas on
an annual basis.
Special examination function
Vasakronan does not have a special examination
function in the form of an internal audit. However,
in addition to the statutory basic audit, the exter-
This Corporate Governance Report has not been
reviewed by the company’s auditors
93
Board of Directors
Lars V Kylberg
Chairman.
Graduate engineer.
Born 1940. Elected in 1997.
Other Board positions: Chairman
of Civitas Holding, Modular Management and the Rejlers Group.
Board member of Sagentia
Group AG.
Previous experience: CEO of
Saab-Scania, Incentive and AlfaLaval.
Birgitta Kantola
Circuit judge, Helsinki.
Master of Laws.
Other Board positions: Deputy
Chair of Fortum.
Board member of Civitas Holding, Nordea, OMX, Stora Enso
and Varma Mutual Pension Insurance Company, Helsinki.
Previous experience: Economic
and Finance Director of IFC
within the World Bank Group,
Vice President, Nordic Investment
Bank.
Subject counselor at the Ministry
of Enterprise, Energy and Communications, state ownership unit.
Graduate in Economics and Business Administration.
of OECD’s working group for privatization and Corporate Governance of State Companies. Chairman of Stattum. Board member of
Civitas Holding and Sveaskog.
Previous experience: Various
positions within the Cabinet
Office and Ministries.
Christina Liffner
Other Board positions: Chair of
Svensk Adressändring and the
Swedish Endometriosis Association, Deputy Chair of Svensk
Exportkredit. Board member of
Civitas Holding, Länsförsäkringar
Bergslagen, Prevas, SJR in Scandinavia and Sveaskog.
Previous experience: Vice President and Chief Accounting and
Financial Officer at Assi Domän.
Jan Roxendal
Advanced banking certificate.
of Securia Interessenter. Board
member Chamber Business Network, Civitas Holding and Svensk
Exportkredit.
Previous experience: President
and CEO of Intrum Justitia.
Vice President in the ABB Group
responsible for ABB Financial
Services.
Group management
Håkan Bryngelson
President.
BSc Engineering.
Born 1948. Employed 1996.
Previous experience: President LIC
Care, Division Manager MoDo and
President of Mekanator.
Board positions: Chairman of Almega
and Almega Service Associations. Vice
Chairman of the Confederation of Swedish Enterprise and Board member of AMF.
Group Management
94
Leif Garph
Executive Vice President, Senior Vice President Stockholm Region.
BSc Engineering, academic education in
economics.
Previous experience: Business Area Manager Skandia Fastighet, President of
Korbe Förvaltning, Stockholm Badhus,
Ljungqvist Fastighetsvärderingar and
Swedish Association of Property Owners.
Board positions: Chairman of Foundation
for Student Residences and Board member of Svenskt Fastighetsindex.
Rolf Åkerman
Senior Vice President, Göteborg Region.
Property Director.
Engineer.
Previous experience: Western Region
Manager, Postfastigheter and ABV.
Board positions: Chairman of Östra Nordstadens Samfällighetsförening.
Vasakronan’s Group management staff has an operative and strategic orientation and consists of the President, three regional Vice
Presidents, the President of Vasakronan Service Partner and the
heads of Corporate Staff Control and Treasury, Corporate Staff
Communications and Corporate Staff Human Resources.
Anders Kjellin
Senior Vice President, Öresund Region.
Property Director.
Civil engineer/MBA HHS.
Previous experience: Market Area
Manager, Malmö Nord Vasakronan
and Skanska.
Group management decides on certain investments, prepares
strategic issues for the Board and monitors the company’s financial progress and forecasts. Group management meets 18–20
times annually.
Kristina Schauman
Chief Financial Officer, OMX.
Board member of Civitas Holding.
Previous experience: Investor,
ABB Financial Services and Stora
Financial Services.
Håkan Erixon
Expert advisor at the Swedish
Ministry of Enterprise, Energy
and Communications.
Board member of Civitas Holding.
Previous experience: USB Investment Bank, Merrill Lynch International and Citicorp Investment
Bank.
Pia Clark
President, Vasakronan Service Partner.
MBA.
Previous experience: Hotel Director, Rica
Hotel Karlstad, Director, Tammsvik and
Mälargården, administrative head, Radisson SAS Royal Park Hotel, President,
Stallmästargården.
Group Council
Marianne Gustafsson
Employee representative.
Leasing Manager Vasakronan,
Uppsala market area.
Born 1948. Appointed in 1998.
Union representative of Unionen.
Björn Lindström
Senior Vice President, Chief Financial
Officer.
Graduate in Economics and Business
Administration.
Previous experience: Group Treasurer,
Esselte Group and Handelsbanken.
Ronny Bergström
Employee representative.
Operations specialist, Senior
electrician, Vasakronan, Kista
market area.
Born 1945. Appointed in 2002.
Representative of the
Association of Management
and Professional Staff.
AUDITORS
Ernst & Young
Senior auditor – Ingemar Rindstig, Authorized Public Accountant and MBA.
Other major assignments: Castellum, Jernhusen,
JM, John Mattson Fastigheter, Svenska Bostäder, Veidekke, Wallenstam.
Bengt Möller
Senior Vice President, Corporate
Communications.
MBA/IMDP.
Born 1949.Employed 1993.
Previous experience: Senior Vice
President Communications BPA,
Vice President Communications
Atlas Copco and Nitro Nobel.
Board positions: Chairman of
Stockholm Open.
In support of Group management, there is a Group Council,
which is a decision-making and preparatory council for strategy
and policy matters as well as an information forum. The Group
Council meets about five to six times annually. The Group Council
also includes, in addition to Group management:
Svante Torell, Vice Regional Director, Stockholm region
Anneli Gardelius
Senior Vice President Human Resources
University studies in the fields of personnel and labor market.
Previous experience: Senior Vice President
Human Resources Sanmina-SCI, ICL, and
Telenordia. Vice President Human
Resources, Motorola and Ericsson.
Board positions: Member of Almega Fastighetsarbetsgivarna.
Mats Carlsson, Senior Vice President, Procurement
Carl Conradi, General Counsel
Rebecca Ernarp, Senior Vice President, Analysis and Valuation (to
be replaced during maternity leave by Åsa Linder, Acting Head of
Analysis and Valuation).
Joacim Axelsson, Quality Manager
95
10-year overview
INCOME STATEMENT
Group, SEK M 1998
1999
2000
2001
2002
2003
2,110
–509
–351
–11
–108
1,131
2,380
–610
–294
–18
–121
1,337
2,662
–598
–314
–19
–154
1,577
2,725
–609
–259
–27
–163
1,667
2,899
–562
–220
–38
–197
1,882
2,961
–599
–221
–41
–207
1,893
2,719
–669
–243
–47
–191
1,569
2,666
–663
–103
–64
–175
1,661
2,681
–580
–84
–67
–172
1,778
2,874
–604
–66
–72
–214
1,918
–314
–
817
–347
–
990
–378
–
1,199
–395
–
1,272
–449
–22
1,411
–476
–712
705
–
–
–
–
–
–
–
–
–
–
–
–
Sales revenue, building rights Acquisition expenses, building rights
Result from sale of properties
Result from service operations
Operating income
–
–
834
–
1
–79
1,573
–
–
63
–
3
–38
1,018
–
–
84
–
5
–82
1,206
–
–
1,863
–
–9
–87
3,039
–
–
6
–14
–11
–112
1,280
–
–
587
–443
–7
–93
749
–
–
–
163
4
–96
1,640
–
–
–
202
6
–101
1,768
290
–160
–
54
5
–95
1,872
154
–26
–
1
4
–90
1,961
Net financial items
Income after net financial items
–459
1,114
–581
437
–746
460
–758
2,281
–679
601
–712
37
–610
1,030
–497
1,271
–539
1,333
–356
1,605
Realized value change, properties
Unrealized value change, financial derivatives
Income before tax
–
–
–
1,114
–
–
–
437
–
–
–
460
–
–
–
2,281
–
–
–
601
–
–
–
37
54
–161
–
923
94
858
–
2,223
57
3,253
–
4,643
5
4,750
20
6,380
–39
–245
–
830
–101
–15
–
321
–126
–18
–1
315
–712
42
1
1,612
–146
–2
1
454
–221
348
–11
153
–53
–2
–
868
–478
–64
–
1,681
6
–1,240
–
3,409
–28
–1,702
–
4,650
Rental revenues
Operating expenses
Maintenance
Site-leasehold fees
Property tax
Operating surplus
Depreciation, properties
Impairment, properties
Gross income
Current tax Deferred tax
Minority participation in income
Income for the year
1) 20051)
20061)
20071)
Pursuant to IFRS.
RENTAL REVENUES
3,000
SEK M
INCOME AFTER NET
FINANCIAL ITEMS
MAINTENANCE
SEK/m
2
1,800
2,500
1,500
2,000
1,200
1,500
900
1,000
600
500
300
400
SEK M
SEK/m
2
0
98 99 00 01 02 03 04 05 06 07
0
Rental revenues, SEK/m2
Through a consistent strategy of concentrating
the property portfolio to the large city areas, rental
revenues per square meter have increased during
the period.
200
300
150
200
100
1,500
SEK M
1,200
INVESTMENTS
2,000
SEK M
1,500
900
1,000
600
100
96
20041)
0
50
98 99 00 01 02 03 04 05 06 07
0
500
300
0
98 99 00 01 02 03 04 05 06 07
0
98 99 00 01 02 03 04 05 06 07
Maintenance, SEK M
Maintenance, SEK/m2
Vasakronan’s property portfolio is
largely well-maintained and adapted to
customer requirements. Maintenance
costs declined mainly as a result of
changes in accounting regulations.
Excluding depreciation and impairment,
capital gains and changes in value for
1998–2003.
Investments increased in 2007.
BALANCE SHEET
Group, SEK M 1998
1999
2000
2001
2002
2003
20041)
20051)
20061)
20071)
–
17,022
23
421
352
17,818
–
19,201
20
469
359
20,049
19
21,060
28
736
368
22,211
25
23,168
2,093
1,231
393
26,910
30
23,371
2,479
1,181
444
27,505
27
21,864
3,089
1,611
425
27,016
19
32,929
2,974
1,217
408
37,547
23
32,858
3,268
635
328
37,112
27
38,151
899
856
51
39,984
47
45,263
522
579
247
46,658
8,254
–
438
280
–
7,535
1,311
17,818
7,593
–
461
9
–
10,393
1,593
20,049
7,751
1
493
12
–
12,300
1,654
22,211
9,198
1
680
15
–
14,847
2,169
26,910
9,116
0
703
17
–
15,048
2,621
27,505
8,953
10
953
22
–
14,221
2,857
27,016
17,156
–
–
15
3,488
14,745
2,143
37,547
18,524
–
–
5
3,567
12,626
2,390
37,112
21,813
–
–
7
4,554
11,712
1,898
39,984
25,736
–
–
10
6,116
12,933
1,863
46,658
19982)
19992)
20002)
2001
2002
2003
20041)
20051)
20061)
20071)
1,573
–541
–456
–200
376
1,018
241
–532
–83
644
1,206
304
–746
–104
660
3,039
–1,454
–758
–119
708
1,294
485
–679
–175
925
749
1,071
–712
–248
860
1,640
–280
–610
–361
389
1,768
–180
–497
36
1,127
1,872
–141
–539
–459
733
1,961
–70
–356
32
1,567
43
419
182
826
–206
454
–706
2
293
1,218
315
1,175
–159
230
162
1,289
14
747
283
1,850
–663
–4,829
–164
2,192
–
2
–234
–3,696
–935
–1,015
–293
275
–
3
–18
–1,983
–1,157
–965
–62
291
–8
–
–22
–1,923
–1,009
–5,187
–142
6,443
–1,702
–
–112
–1,709
–693
–15
1
–
–390
0
–590
–1,687
–609
–1,010
–144
2,560
–634
217
–8
372
–481
–1,953
–282
1,041
–210
956
–
–929
–597
–
–8
1,635
–267
152
–
915
–1,047
–1,385
–4
1,209
–17
1,387
–
143
–1,667
–868
–3
160
–97
300
–
–2,175
–330
1,317
–
987
–2,290
–982
2,146
–
1,164
7
–157
1,635
–
1,478
9
–165
5,711
–3,814
1,732
25
–537
5,141
–4,056
548
79
–316
2,797
–4,075
–1,594
–47
–9
4,586
–3,895
682
–17
–165
5,641
–7,760
–2,284
–80
–254
5,910
–6,823
–1,167
–277
–698
7,410
–6,191
521
196
2,642
352
352
359
359
368
368
393
393
472
472
425
425
408
408
328
328
51
51
247
Assets
Managed properties and work in progress
Current receivables
Cash and cash equivalents Total assets Shareholders’ equity and liabilities
Minority interest Provisions Provisions for pensions
Deferred tax liabilities Interest-bearing liabilities Noninterest-bearing liabilities Total shareholders’ equity and liabilities
1) Pursuant to IFRS.
Cash-flow statement
Group, SEK M
Current operations
Operating income Adjustment for items not included in cash flow
Net financial items
Tax paid Cash flow before changes in working capital
Changes in current receivables and liabilities
Investments
Acquisition of properties Acquisition of subsidiaries and associated companies Divestment of properties and companies
Acquisition of financial fixed assets
Divestment of financial fixed assets
Tax paid, divestment of properties
Dividend paid
Loans raised2)
Amortized loans
Cash flow from financing activities Cash flow for the year
Cash and cash equivalents, Jan. 1
Cash and cash equivalents at year-end
1) 2) Pursuant to IFRS.
Raised/amortized loans reported in their net amounts for 1998-2000.
97
Key data
1998
1999
2000
2001
2002
2003
20041)
20051)
20061)
20071)
22,280
2,444
663
4,992
2,192
5
8
–
27,200
2,674
935
1,809
277
6
8
–
34,193
2,687
1,157
1,317
291
4
6
–
35,104
2,095
1,009
5,187
6,506
5
7
–
34,063
2,084
693
15
–
7
7
–
31,394
1,922
609
1,010
2,630
10
12
–
32,895
1,816
481
1,953
1,041
12
13
–161
32,827
1,743
597
–
1,635
8
9
858
38,122
1,803
1,047
1,385
390
7
8
3,253
45,236
1,850
1,667
868
160
4
6
4,750
54
2.3
7,879
11,817
10.5
9,8
376
46
52
33
7,463
7.1
56
2.3
7,923
13,087
4.1
18,1
644
38
47
37
10,043
6.5
59
2.0
7,672
17,141
4.1
27,9
660
35
48
35
11,944
6.2
61
2.1
8,474
17,888
19.0
5,2
708
34
46
36
12,708
5.1
65
2.6
9,157
16,672
5.0
–3,9
925
33
44
38
12,785
5.2
64
2.5
9,153
15,596
1.7
–4,7
860
33
43
36
11,301
5.3
58
2.7
16,809
–
5.2
–
389
46
–
39
12,839
5.1
62
3.4
17,689
–
9.5
–
1,127
50
–
33
10,947
4.4
66
3.5
20,290
–
16.8
–
733
55
–
30
11,285
3.7
67
5.5
24,048
–
19.3
–
1,567
55
–
28
12,517
3.6
208
94
2,064
3,050
366
92
616
154
4,000
80
161
1,898
3,275
157
39
–
–
4,000
78
165
1,937
4,250
165
41
–
–
4,000
403
177
2,299
4,472
537
134
–
–
4,000
114
231
2,279
4,138
216
54
100
25
4,000
38
215
2,238
3,899
9
2
–
–
4,000
217
97
4,289
–
165
41
–
–
4,000
420
282
4,631
–
254
64
–
–
4,000
852
183
5,453
–
698
174
–
–
4,000
1,163
392
6,434
–
791
198
–
–
4,000
Property-related
Market value, SEK M Floor space, 000s/ m2
Investments, SEK M Property acquisitions, SEK M
Property sales, SEK M
Vacancy rate, rents, % Vacancy rate, floor space, %
Unrealized value change, SEK M
Financial
Operating surplus, margin, % Interest-coverage ratio, multiple Average shareholders’ equity, SEK M Adjusted shareholders’ equity, SEK M Return on shareholders’ equity, %
Return on adjusted shareholders’ equity, %
Cash flow, SEK M
Equity/assets ratio, %
Adjusted equity/assets ratio, %
Loan to market value, properties/market value, % Interest-bearing liabilities, net, SEK M Average interest rate on borrowings, %
Share-related
Earnings per share, SEK
Cash flow per share, SEK
Shareholders’ equity per share, SEK
Adjusted shareholders’ equity per share, SEK
Ordinary dividend, SEK M Ordinary dividend per share, SEK
Extra dividend, SEK M
Extra dividend per share, SEK
Number of shares, 000s 1) In accordance with IFRS
VASAKRONAN’S RENTAL REVENUES AND EXPENSES DISTRIBUTED AMONG VARIOUS MARKETS, AT DECEMBER 31, 2007
SEK/m2 1)
Central Stockholm Greater Stockholm Uppsala
Göteborg
Malmö
Lund
1) 98
Rental revenues Operating expenses Maintenance Property tax Operating surplus
2,121
1,148
1,351
1,621
1,301
1,382
441
360
382
185
334
327
37
23
38
47
43
24
188
43
82
132
83
95
1,454
722
850
1,257
842
936
Including vacant area.
Quarterly information
Group, SEK M
Q1-05
Q2-05
Q3-05
Q4-05
Q1-06
Q2-06
Q3-06
Q4-06
Q1-07
Q2-07
Q3-07
Q4-07
666
–173
–20
–16
–49
408
677
–160
–22
–16
–40
439
661
–125
–25
–15
–48
448
662
–205
–36
–17
–38
366
658
–164
–19
–17
–38
420
667
–137
–19
–17
–41
453
672
–111
–17
–16
–47
481
684
–168
–29
–17
–46
424
715
–167
–17
–17
–45
469
717
–135
–21
–18
–48
495
714
–135
–7
–17
–49
506
728
–167
–21
–20
–72
448
–
–
–1
1
–27
381
–
–
20
2
–20
441
–
–
6
–1
–21
432
–
–
177
4
–33
514
–
–
43
3
–19
447
–
–
–2
3
–19
435
290
–229
14
1
–16
541
–
69
–1
–2
–41
449
–
–
0
0
–19
450
–
–
11
2
–19
489
–
–
–5
1
–18
484
154
–26
–5
1
–34
538
–122
259
–133
308
–115
317
–127
353
–99
348
–106
329
–108
433
–226
223
-89
361
–73
416
–97
387
–97
441
Realized value change, properties Unrealized value change, financial derivatives
Income before tax 2
–
–5
256
1
–
138
447
2
–
360
679
89
–
365
841
54
–
321
723
9
–
1,199
1,537
39
–
47
519
–45
–
1,686
1,864
7
–2
497
863
–1
40
1,925
2,380
1
–13
1,223
1,598
–2
–5
1,105
1,539
Current tax
Deferred tax
Tax
Income after tax
–38
–35
–73
183
–39
–91
–130
317
–40
–142
–182
497
–361
204
–157
684
–54
–155
–209
514
–17
–399
–416
1,121
45
–162
–117
402
32
–524
–492
1,372
0
–239
–239
624
0
–666
–666
1,714
–9
–433
–442
1,156
–19
–364
–383
1,156
Rental revenues Operating expenses Maintenance Site-leasehold fees Property tax
Operating surplus Sales revenue, building rights Acquisition costs, building rights
Result from service operations
Operating income
Net financial items
Income after financial items RENTAL REVENUES
3,000
SEK M
OPERATING EXPENSES
800
SEK M
MAINTENANCE
250
SEK M
VACANCY RATE, FLOOR SPACE
15
%
700
2,500
600
2,000
500
1,500
200
12
150
9
100
6
50
3
400
300
1,000
200
500
100
Quarter l 1 2 3 4 1 2 3 4 1 2 3 4
2005
2006
2007
Rolling 12-months value
Rental revenues are impacted by the state of the
economy notwithstanding the time required
before the effects are felt. In 2007, the rise in
rents was 6% for new and renegotiated leases.
Quarter 1 2 3 4 1 2 3 4 1 2 3 4
2005
2006
2007
Operating expenses, which include energy, peak
in the first and fourth quarters. Operating
expenses have been reduced as a result of coordinated procurement.
Quarter 1 2 3 4 1 2 3 4 1 2 3 4
2005
2006
2007
Maintenance expenses peak in the fourth quarter. Maintenance expenses have been reduced
due to a change in accounting rules.
Quarter l 1 2 3 4 1 2 3 4 1 2 3 4
2005
2006
2007
The vacancy rate decreased due to successful
leasing efforts and property divestments.
99
Definitions
Cash flow
Interest coverage ratio
Return on shareholders’ equity
Cash flow before changes in current receivables
and liabilities.
Operating income divided by net financial items.
Rolling 12-month income after tax, divided by
shareholders’ equity.
Loan to market value
Cash flow per share
Net interest-bearing liabilities divided by the
appraised market value of properties.
Cash flow divided by the number of shares.
Earnings per share
Net interest-bearing liabilities
Shareholders’ equity per share
Income after full tax divided by the number of
shares.
Interest-bearing liabilities including pension liabilities, less cash and cash equivalents and interestbearing receivables.
Shareholders’ equity at year-end, divided by the
number of shares.
Equity/assets ratio
Shareholders’ equity at year-end as a percentage
of total assets.
Vacancy rate, floor space
Operating surplus
Percentage of vacant floor space.
Rental revenues less operational and maintenance
expenses, site-leasehold fees and property taxes.
Vacancy rate, rent
Floor space
Rentable floor space (incl. parking garage space).
Average shareholders’ equity.
Operating surplus margin
Operating surplus divided by rental revenues.
Estimated annual rent loss due to vacant premises
as a percentage of the total annual rent for properties if fully rented.
History
Vasakronan’s development
The owner has assigned to Vasakronan the goal of achieving
the highest possible long-term total earnings. This has led to
the structural changes that the company has carried out.
Vasakronan’s strategy has involved refining the property portfolio to focus on commercial properties in major urban areas.
Properties in cities characterized by low growth rates have been
divested and properties in attractive locations in expanding
regions with high growth rates, where the value trend is judged
to be more favorable, have been acquired.
1993
Vasakronan formed through acquisition from the State of
properties, including costs for deeds and stamp duty, of different types for a total of SEK 17.2 billion. The properties had
previously been administered by the National Swedish Board
of Public Building. All leases that were taken over were renegotiated to rental contracts between 1993 and 1996.
100
1996
Erik Åsbrink, President of Vasakronan, is
appointed Sweden’s Finance Minister.
Håkan Bryngelson, with his background
from holding such positions as President
of the listed company LIC Care, was
appointed as the new President.
1995
Divestment of properties pertaining
to the Swedish University of Agricultural Sciences to Akademiska Hus.
1998
The last two special-purpose properties were sold to Specialfastigheter Sverige, to be transferred to the Ministry of
Finance. The O-list company Gotic in Malmö, with properties
valued at SEK 1.8 billion, was acquired the same year. In addition, SEB’s operational premises were acquired for SEK 4.2 billion. Vasakronan Service Partner was established in order to
develop a service concept.
1997
The subsidiary Specialfastigheter Sverige,
which took over the Swedish Prison and
Probation Service’s properties and special
schools, among other properties, was
formed. Also in 1997, 188 properties in
98 locations were sold for SEK 4.9 billion
to the newly-formed company Stenvalvet.
2000
Rune Brandinger, who had been
Vasakronan’s Board Chairman
since the company was founded,
resigned and was succeeded by
Egon Jacobsson, whose former
positions included President of
Vin & Sprit.
Financial information
REPORTS
Interim report, January–March 2008 Six-month report, January–June 2008 Nine-month report, January–September 2008
Year-end report 2008 Annual Report 2008 April 22, 2008
July 11, 2008
October 27, 2008
January, 2009
March, 2009
ANNUAL GENERAL MEETING
Open Annual General Meeting April 22, 2008, 4:00 p.m.
MEDIA AND ANALYST MEETINGS
Interim report, January–March Six-month report Nine-month report, January–September 2008 April 23, 2008 12:00 a.m.
July 11, 2008, 11:00 a.m.
October 27, 2008
Additional information on capital market meetings and other information about
the company is available on Vasakronan’s website at www.vasakronan.se
Between 1994 and 2007, Vasakronan acquired properties for a total of SEK 21.1 billion and sold properties for SEK 22.4 billion.
2001
Properties in nine cities were sold to the property company
Norrporten for SEK 5.1 billion. Vasakronan concurrently
acquired a third of NS Holding/Norrporten. Three of the
Hötorg buildings in Stockholm were acquired from Förenade
Liv for just over SEK 1.9 billion. Through swap transactions
with Skanska and NCC, Kista Entré, Lilla Bommen in Göteborg, and part of Kista Science Tower were acquired. Land
slated for development at Järvafältet was concurrently sold to
jointly-owned companies.
2004
The remaining share of the Kista Science
Tower was acquired based at a market
value of SEK 1.2 billion. A transaction
with the City of Stockholm was executed
involving the sale of a part of Gamen 8
(the Tax Building) in Stockholm and the
acquisition of a part of Beridarebanan 10
(the first Hötorg building).
2003
Vasakronan’s property portfolio in
Linköping was sold to Norrporten for
SEK 0.8 billion. In addition, six properties in Stockholm were sold to London
& Regional for SEK 1.9 billion.
2006
Norrporten’s property portfolio in Uppsala was purchased for
SEK 1 billion concurrently with the sale of the holding in NS
Holding/Norrporten for SEK 1.8 billion. A swap transaction was
carried out with JM involving the sale of residential building
rights to Järvafältet and the purchase of properties and office
building rights in Frösunda, in Solna, north of Stockholm.
2005
InfraCity in Upplands Väsby was
sold for SEK 1.4 billion to Orion
Capital Managers.
2007
The project portfolio amounted to SEK 3.1 billion.
Vasakronan’s Board Chairman Egon Jacobsson stepped
down and was succeeded by Lars V Kylberg, who had
been Deputy Chairman since 1997 and whose previous
positions include CEO of Saab-Scania.
101
Addresses
VASAKRONAN AB
P.O. Box 24234
SE-104 51 Stockholm
Visiting address: Karlavägen 108, 13th floor
Tel: +46-8-783 21 00
Fax: +46-8-783 21 01
President
Håkan Bryngelson
Tel: +46-8-783 21 05
Group Offices
Corporate Staff Control and Treasury
Chief Financial Officer
Björn Lindström
Tel: +46-8-783 21 12
Controller Barbro Brännemo
Tel: +46-8-783 21 28
Financial Manager Thomas Kristoffersson
Tel: +46-8-783 21 17
Group Treasurer Anna Styrud
Tel: +46-8-783 21 24
Corporate Staff Communications
Senior Vice President Bengt Möller
Tel: +46-8-783 21 09
Assistant Information Manager
Eva Kasberg
Tel: +46-8-783 21 18
Corporate Staff Human Resources
Senior Vice President Anneli Gardelius
Tel: +46-8-783 21 10
Corporate Staff Procurement
Senior Vice President Mats Carlsson
Tel: +46-8-783 23 62
Corporate Staff Legal
General Counsel, Senior Vice President
Carl Conradi
Tel: +46-8-783 21 36
Corporate Staff IT
Senior Vice President IT Johanna Emilsson
Tel: +46-8-783 21 71
Corporate Staff Analysis and Valuation
Senior Vice President Rebecca Ernarp
(on maternity leave)
Tel: +46-8-783 23 22
Acting Director Åsa Linder
Tel: +46-8-783 23 98
PROPERTIES
Regional and market area offices
STOCKHOLM REGION
Executive Vice President Regional Director
Leif Garph
Vice Regional Director and Market Manager
Svante Torell
Leasing Manager Per Thiberg
VASAKRONAN AB
P.O. Box 24245
SE-104 51 Stockholm
Tel: +46-8-783 23 00
Stockholm City Market Area
Manager Charlotta Liljefors Rosell
VASAKRONAN AB
P.O. Box 24245
SE-104 51 Stockholm
Tel: +46-8-783 23 00
Stockholm Östermalm Market Area
Manager Kristina Rosqvist
VASAKRONAN AB
P.O. Box 24245
SE-104 51 Stockholm
Tel: +46-8-783 23 00
Stockholm inner city Market Area
Manager Åsa Lange (on maternity leave)
Acting Manager Bo de Besche
VASAKRONAN AB
P.O. Box 24245
SE-104 51 Stockholm
Tel: +46-8-783 23 00
Greater Stockholm region
Manager Eva Henriksson
VASAKRONAN AB
P.O. Box 24245
SE-104 51 Stockholm
Tel: +46-8-783 23 00
Kista Market Area
Acting Manager Svante Torell
VASAKRONAN AB
P.O. Box 24245
SE-104 51 Stockholm
Visiting address: Farögatan 33,
Karlavägen 108, 6th floor
Tel: +46-8-522 918 00
+46-8-783 23 00
Uppsala Market Area
Manager Sture Caesar
VASAKRONAN AB
P.O. Box 265
SE-751 05 Uppsala
Visiting address: Drottninggatan 3
Tel: +46-18-18 53 00
ÖRESUND REGION
Manager Anders Kjellin
VASAKRONAN AB
P.O. Box 334
SE-201 23 Malmö
Visiting address: Rådmansgatan 10
Tel: +46-40-691 71 00
Northern Malmö Market Area
Manager Carl-Johan Gustavsson
VASAKRONAN AB
P.O. Box 334
SE-201 23 Malmö
Tel: +46-40-691 71 00
Southern Malmö Market Area
Manager Mats Åsemo
VASAKRONAN AB
P.O. Box 334
SE-201 23 Malmö
Tel: +46-40-691 71 00
GÖTEBORG REGION
Manager Rolf Åkerman
Leasing Manager Bo Törnkvist
VASAKRONAN AB
Ekelundsgatan 1
SE-411 18 Göteborg
Tel: +46-31-725 56 00
Western Göteborg Market Area
Manager Kristina Pettersson Post
VASAKRONAN AB
Ekelundsgatan 1
SE-411 18 Göteborg
Tel: +46-31-725 56 00
Eastern Göteborg Market Area
Manager Magnus Tengberg
VASAKRONAN AB
Ekelundsgatan 1
SE-411 18 Göteborg
Tel: +46-31-725 56 00
Göteborg Gullbergsvass Market Area
Manager Roddy Carlsson
VASAKRONAN AB
Ekelundsgatan 1
SE-411 18 Göteborg
Tel: +46-31-725 56 00
SERVICES
VASAKRONAN SERVICE PARTNER AB
President Pia Clark
P.O. Box 24244
SE-104 51 Stockholm
Tel: +46-8-783 23 00
Lund Market Area
Manager Mikael Strand
VASAKRONAN AB
P.O. Box 144
SE-221 00 Lund
Visiting address: Fjelievägen 8
Tel: +46-46-271 71 31
Corporate Staff Quality and Environment
Quality Manager Joacim Axelsson
Tel: +46-8-783 23 05
Environmental Manager
Olof Sjöberg
Tel: +46-8-783 21 48
e-mail: [email protected] (å, ä, ö become a, a, o)
102
List of search terms
Financing
Parent Company .................................................. 66, 76
75, 96, 99
– Financial risk management . ..................................... 14
Premises floor space .................. 4, 16, 20, 32, 36, 90, 92
Accounting principles ................................................. 59
– Financial fixed assets ......................... 66, 70, 72, 73, 82
Premises rental market .................. 16, 22, 30, 32, 36, 40
Adjusted shareholders’ equity . ................................... 90
– Financial items .................................. 62, 64, 72, 96, 99
Premises type ............................................................. 16
Annual General Meeting .......................................... 101
– Financing sources .............................................. 14, 85
President . .................................................................. 94
Annual General Meetings ........................................... 90
– Net financial items ........................................ 63, 96, 99
– Statement by the President ........................................ 2
Assets ............................................................. 66, 72, 97
Forecast ........................................................ 1, 3, 15, 84
Project development ............................................ 24, 40
Associated companies ..................................... 53, 61, 74
Future outloook ............................ 27, 28, 32, 36, 39, 43
Property acquisitions ............................................ 60, 98
Audit report ............................................................... 89
Gender distribution .............................................. 50, 51
Property market ................................ 2–3, 16, 26, 35, 39
Auditor ................................................................ 93, 95
General Counsel ........................................................ 95
Property owner ......................... 6, 25, 28, 33, 37, 38, 52
Average interest rate on loans . ............................... 2, 90
Group management . ........................................... 69, 87
Property portfolio ............................ foldout, 1, 10 et seq,
Average lease term . .................................. 22, 32, 37, 57
GRP ..................................................................... 52, 90
26–39, 52, 67
Balance sheet ....................................................... 72, 97
Heating . .................................................................... 48
Property project . .................................................. 34, 40
Board of Directors ................................................ 90, 94
Human resources ..................................... See Employees
Property sales .......................... 60, 72, 75, 86, 87, 96, 98
Bonus program ......................................... 69, 70, 82, 83
Property tax ....................................... 54, 62, 64, 72, 96,
Brand . ..................................................................... 2, 8
– Senior Vice President
Human Resources .............................................. 87, 95
Building rights ................................................. 12, 41, 64
IFRS ........................................................................... 53
Proposed disposition of earnings ................................ 88
Business concept .......................................................... 6
Impairment .......................................................... 69, 88
Quarterly data ............................................................ 91
Carbon-dioxide emissions . ............................... 46 et seq
Income after financial items ......................... 1, 62, 65, 96
Regional manager .................................................... 102
Carrying amount .................................................. 61, 83
Income after tax ................................................ 1, 58,62
Remuneration ...................................................... 55, 75
Cash and cash equivalents ............................... 60, 64,89
Income for the year ......................................... 72, 73, 96
Rental revenues . ...................................... 16, 19, 56, 57,
Cash flow ............................................... fold out, 65, 90
Income from sale of properties . ............................ 72, 96
68, 88, 91
Cash flow per share . .................................................. 90
Interest-bearing liabilities . ................... 66, 67, 84, 86, 97
– Rental revenues per square meter . ........................... 90
Chief Financial Officer ..................................... 76, 94, 95
Interest-coverage ratio .......................... 1, 7, 62, 98, 100
Report dates ............................................................ 101
Climate-neutral .......................................................... 50
Investments .................................... 1, 10, 42, 43, 61, 64
Return on shareholders’ equity .................. 6, 67, 98, 100
Code of Corporate Governance .................................. 83
Järvafältet .................................................................. 43
Risk and risk management ............. 10, 11, 14, 15, 84, 92
Communications . ......................................... 2, 6, 93, 95
Key data .................................................................... 90
Salaries .................................................. 69, 70 82 et seq
– Senior Vice President, Corporate
Communications .......................................... 70, 87, 95
Liabilities ....................................... 60, 66, 67, 72, 84, 86
Sensitivity analysis ................................................ 11, 12
Loan to market value .......................................... 69, 100
Services . ............................................. 27, 31, 35, 42, 64
Competitors . .......................... 19, 25, 31, 35 ,39, 41, 45
Maintenance . ......................... 11, 62, 64, 74, 96, 98, 99
Shareholders’ equity . ........................... 6, 52, 60, 61, 66,
Contract portfolio ........................................... 10,16, 57
Market valuation .................................................. 12, 13
67, 69, 72, 87, 97, 98, 100
Corporate governance ..................................... 90 et seq
Market value ........................................... 2, 3, 10, 12, 90
Shareholders’ equity per share ............................ 98, 100
Cost per square meter ................................................ 90
Maturity structure
Sickness absence ............................................. 54, 61, 76
Current receivables . ........................................ 60, 77, 89
– Financing ................................................................ 15
Site-leasehold fees .................................... 62, 64, 74, 96
Definitions ............................................................... 100
– Rental revenues ......................... fold out, 1, 10–11, 25,
Social security contributions ....................................... 75
Depreciation ........................................................ 72, 74
31, 35, 62, 74
Strategic approach ...................... 6, 7, 24, 28, 30, 34, 38
Development projects ................................................ 41
– Site-leasehold fees ............................ 62, 64, 74, 96, 99
Sustainable development .............................. 6, 46 et seq
Direct yield ...................................................... 12, 13, 17
Media meetings ......................................................... 93
Targets ................................................ 2, 7, 8, 46, 60, 82
Dividend ............................................... 7, 86, 88, 97, 98
Noninterest-bearing liabilities .......................... 60, 78, 89
Tax ................................................ 61, 62, 65, 67, 78, 96
Earnings per share ................................... 62, 79, 98, 100
Number of shares ............................................ 79, 86, 98
Tenants ............................................. 6, 8, 16–41, 44, 45
Earnings trend . ............................................................ 3
Operating expenses . ................................. 52, 64, 74, 99
– Major tenants ............................. 16, 25, 31, 35, 39, 41
Electricity ............................................................. 47, 52
Operating profit ................................................... 62, 96
Unrealized change in value ..................... 3, 12,59, 88, 91
E-mail ...................................................................... 102
Operating surplus . ................ fold out, 40, 62, 64, 72, 96
Vacancy rate ........................................ 1, 10, 17, 20, 25,
Employee representative . ........................................... 88
Operating surplus, margin ................. 62, 63, 64, 98, 100
31, 35, 98, 99, 100
Employees ................................................. 2, 6, 8,50, 69
Organization .......................................................... 4, 82
Valuation method ................................................ 13, 79
Energy consumption ................................... 1, 47, 50, 52
Outlook for 2008 ......................................... See forecast
Valuations ............................................................ 54, 92
Environmental policy .................................................. 49
Overview
Vasakronan Service Partner . ................ 27, 31, 35, 42, 64
Equality . .................................................................... 50
– Quarterly ................................................................. 99
Website ..................................................................... 93
Equity/assets ratio ........................... 1, 7, 66, 69, 98, 101
– 10-year ......................................................... 96 et seq
Vision .......................................................................... 6
Ethics .............................................................. 46, 90, 92
Owner ................................................................. 46, 90
www ....................................................................... 101
Administration and marketing ........................ 62, 64, 72,
98, 99, 100
103
Production: n3prenör · Photo: Lars Nybom · Print: åtta45, Solna, Sweden · Maps: ©Kartena
In 2007, Vasakronan generated the strongest earnings in its history as
a result of the company’s consistent strategy of creating an attractive
property portfolio in Sweden’s five most expansive large cities, with
satisfied customers and a strong brand.
Håkan Bryngelson
President, Vasakronan
Mailing address: P.O. Box 24234, SE-104 51 Stockholm, Sweden
Tel: +46-8-783 21 00, Fax: +46-8-783 21 01
www.vasakronan.se
E-mail: [email protected]
Vasakronan AB is a public company with its head office in Stockholm. Registered Corporate No. 556474-0123

Vasakronan is the leading property company in Sweden. Its strat

Transcription

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