Higher net operating income and a stronger balance sheet
Christian Hermelin, CEO of Fabege, comments on the first half of 2013:
“Rental income for the first six months increased to SEK1,032m (920) and profit from property management improved 6 per cent year-on-year. The last few years’ positive trend in net lettings and the positive trend in completed projects at the end of last year contributed to strong growth in income from property management.
In a stable market with low production levels of new office space, vacancies in attractive locations are declining. Tenants have stringent requirements regarding the location and design of premises and we note a continuation of the migration to quality. This favours Fabege and our property portfolio, which mainly comprises modern offices located in prime locations.
Project operations are proceeding as planned. The project in Solna Strand will be completed in the late autumn and the Swedish Tax Agency will assume occupancy of its new office premises in stages. Production of the Scandinavian Office building has started in a small scale with the foundations and planning. This is a future-oriented project that will further consolidate Arenastaden as the most dynamic city district in the Stockholm area.
Improved occupancy rates and, generally, slightly higher rents on re-negotiation mean that the property management portfolio has also increased in value. During the quarter, we have completed several important re-negotiations that have contributed to a higher retention rate and stability in the rental property portfolio.
The transactions announced in the first half of the year were in line with our strategy of divesting properties in non-priority markets and those with low development potential for Fabege. All of the transactions have contributed to strengthening our cash flow in parallel with the company realising value.
In conclusion, I am satisfied that all of our business areas contribute to overall earnings. I look forward to an autumn of high activity in which we continue to create value by attracting customers to our properties and projects.”
Fabege AB (publ)
For further information, please contact:
Christian Hermelin, CEO, phone 46 (0)8 555 148 25, 46 (0)73 387 18 25
Åsa Bergström, Deputy CEO and CFO, phone 46 (0)8 555 148 29, 46 (0)70 666 13 80
This constitutes information that Fabege AB (publ) may be legally obliged to disclose under the Securities Market Act and/or the Financial Instruments Trading Act. The information was released for publication at 08.02 am CET on 5 July 2013.
Fabege AB (publ) is one of Sweden’s leading property companies focusing mainly on letting and managing office premises and property development. The carrying amount of the company’s property portfolio is approximately SEK 32.2bn. The portfolio is concentrated in the Stockholm region and has an annualised rental value of SEK 2.3bn and a lettable area of 1.1m sqm. Fabege’s shares are listed on Nasdaq OMX Stockholm, Large Cap segment.
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