Higher rents and lower vacancies - Vasakronan interim report January-June 2008

Rental revenues increased by 9% and the vacancy rate declined to 4% (5), according to Vasakronan’s interim report January-June 2008.

“During the first six months of 2008, Vasakronan reported the strongest earnings in its history,” commented Håkan Bryngelson, President & CEO of Vasakronan. “Rental revenues rose, operating expenses declined and interest expenses increased, which combined led to improved income after financial items and before changes in value of SEK 918 M (777).”

 Rental revenues increased by 9% to SEK 1,539 M (1,418). Leased annual rent increased to SEK 3,427 M and exceeded the reported annual rent of SEK 2,995 M by 14%.
 The vacancy rate declined to 4% (5) of rental revenues.
 Income after financial items before value changes increased to SEK 918 M (777), as a result of improved operating income.
 The market value of properties increased to SEK 46,685 M (41,243). The unrealized increase in value for the first six months amounted to SEK 160 M (2,422).
 During the first six months of 2008, rental levels increased somewhat in the central parts of Stockholm, Göteborg and Malmö. The property market was characterized by lower sales and a somewhat higher yield requirement.
 AP Fastigheter acquired Vasakronan after the end of the period. The transaction valued the property portfolio at SEK 41.1 billion. Ownership will be transferred to AP Fastigheter on September 1, 2008 and the new company will be called Vasakronan. After the end of the period, AP Fastigheter sold a property portfolio primarily from Vasakronan’s property portfolio to Niam for SEK 7.1 billion, with transfer occurring on October 1, 2008.