Drott sells 31 Stockholm properties for SEK 5.0 billion

Drott sells 31 Stockholm properties for SEK 5.0 billion The sale is an element in Drott's new strategic direction, which entails a higher turnover in the portfolio and the sale of properties where no further measures or other factors are expected to increase cash flow and create value. Portfolio The portfolio comprises 31 properties - of which ten are leaseholds - with 280,000 square meters of rentable space (including 7,000 sq. m. of residential space). The largest single properties are Arenan 2, 3, 6 and 8 near Globen and Isafjord 2 in Kista. Other major properties include Duvan 6, Oxen Mindre 33 and Ynglingen 10 in Stockholm's inner city. Annual rent amounts to SEK 505 million. The occupancy rate (current leases) in the portfolio is 91.5 percent. Buyer The buyer is Whitehall, and the tentative closing date is September 1, 2003. Whitehall is an open-end real estate investment fund managed by Goldman Sachs. Effect on Drott The sale is being implemented through a special-purpose company at an underlying transaction price of SEK 5.2 billion. The financial handover date was July 1, 2003. Proceeds from the sale will be received in stages during 2003, with the exception of a five-year, SEK 400 million promissory note with a 6-percent nominal interest rate. After adjusting for the terms of the promissory note and the staggered payments, the sales price for the properties corresponds to SEK 5.0 billion, which is approximately 7 percent below their market value as of December 31, 2002. The fiscal residual value in the portfolio is approximately SEK 1.3 billion less than the sales price. The liquidity impact calculated on this difference is estimated at less than 10 percent. There is no income tax charge. Existing tax loss carryforwards are not affected by the sale. The sales price of SEK 5.0 billion will result in a capital loss for tax purposes of approximately SEK 150 million, which will be charged to the third quarter. Provisions of SEK 75 million allocated for anticipated future expenses resulting from the sale are taken into account in the estimated loss. Based on the operating surplus from current leases, the sales price corresponds to a direct yield of 7.0 percent. The sale initially reduces the Group's cash flow before tax by approximately SEK 125 million on an annual basis. The sale is conditional on negotiations in accordance with Sweden's Workplace Co-Determination Act, which will begin immediately. Catella Corporate Finance has acted as advisor to Drott. Drott AB (publ) For further information, please contact: Anders Böös, President, +46 8 769 30 10 Drott is being divided into two publicly listed companies: · Shareholders at the Annual General Meeting in 2004 will vote on a proposal to distribute Bostadsaktiebolaget Drott, which will be a streamlined residential real estate company active in growth regions. · Today's Drott will change its name to Fabege and will be an active, streamlined commercial real estate company focused on Stockholm. Attachment: Property list Attachment Area Properties sold Address Rentable Of which space resident excl. ial garages (sq. m.) (sq. m.) Inner city Duvan 6 Klara Södra 9,648 - Kyrkogata 1 Inner city Fenix 1 Barnhusgatan 3 3,648 - Inner city Guldfisken 32 Grev Turegatan 44 2,171 746 Inner city Hasseln 5 Vasagatan 15-17 3,865 - Inner city Oxen Mindre 33 Luntmakargatan 18 12,148 2,823 Inner city Repslagaren 31 Humlegårdsgatan 6-10 6,338 977 Inner city Sandbacken Mindre Tjärhovsgatan 21 4,033 - 39 Inner city Signalen 1 Folkungagatan 122 3,317 - Inner city Ynglingen 10 Karlavägen 58-60, m 11,114 2,393 fl Globen Arenan 2 Arenavägen 49-63, m 53,178 - fl Globen Arenan 3 Arenavägen 39-47 16,505 - Globen Arenan 6 Arenavägen 21-35 28,986 - Globen Arenan 8 Arenavägen 15-19 13,232 - Kista Isafjord 2 Kistavägen 21-25 18,720 - Bromma Valsverket 8,9,10 Gjuterivägen 17-19 19,165 - Huvudsta Gräslöken 1 Jungfrudansen 25 7,001 - Hässelby Säteritaket 1 Maltesholmsvägen 88 2,466 - Lunda Domnarvet 11 Domnarvsgatan 35 3,665 - Lunda Mandelblomman 1 Avestagatan 21-27 6,817 - Skarpnäck Hangaren 1 Flygfältsgatan 1-11 10,810 - Sollentuna Ekplantan 1 Djupdalsvägen 17-19 2,600 - Sollentuna Revisorn 3 Bergkällavägen 31 C 1,198 - Solna Station Stigbygeln 5 Gårdsvägen 10 7,314 - Tyresö Bagaren 9 Radiovägen 7-11 2,220 - Tyresö Kopparen 9 Vintervägen 2 2,334 - Upplands Hammarby-Smedby Johanneslundsvägen 2- 8,488 - Väsby 1:454 6 Upplands Hammarby-Smedby Johanneslundsvägen 3- 4,449 - Väsby 1:461 5 Vällingby Vagnhallen 15 Jämtlandsgatan 153- 8,821 - 157 Vällingby Vagnhallen 19 Jämtlandsgatan 131 5,460 - 279,711 6,939 DIVESTED PORTFOLIO Number of properties Rentable space, sq. m. Inner city 9 56,000 Globen 4 112,000 Kista 1 19,000 Rest of Stockholm 17 93,000 region Total 31 280,000 Annual rent, June 30, 2003, SEK M Annual rent 505 Vacant rent 47 Annual rent incl. 552 vacant rent Occupancy rate 91.5 % ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2003/07/14/20030714BIT00130/wkr0001.doc http://www.waymaker.net/bitonline/2003/07/14/20030714BIT00130/wkr0002.pdf