Vasakronan - Interim Report, January – June 2006
Income after tax rose to SEK 1,635 M (500). The increase is mainly attributable to an unrealized increase in the value of the property portfolio. Income after financial items before realized and unrealized value changes increased to SEK 677 M (567), primarily as a result of an improvement in the operating surplus and in net financial items.
The vacancy rate declined to 7% (11) of rental revenues, due primarily to a large proportion of new leasing, as well as to property sales.
Rental revenues declined to SEK 1,337 M (1,355), due to property sales. The decrease in rent for new and renegotiated leases was 4% (1).
The fair value of the properties increased to SEK 35,826 M (33,249). The unrealized increase in value was SEK 1,520 M (133).
Property acquisitions amounted to SEK 903 M. This refers to Norrporten’s property portfolio in Uppsala. The holding of shares in Norrporten, including convertible debentures, was sold for SEK 1,918 M.
The forecast for 2006 is that profit after net financial items, before realized and unrealized changes in the value of properties and associated companies, will increase to approximately SEK 1,200 M (1,100).
“Vasakronan has had a strong development in the first half of 2006,” comments Håkan Bryngelson, President of Vasakronan. ”Income has increased, net financial items have improved and the fair value of properties has increased by 5%.
“There is an increased demand for office premises in the large Swedish cities and we also see a tendency for increased rental levels.
“Interest in the Swedish property market remains very high among both Swedish and international investors. This resulted in lower yield requirements and increased property prices.
“The Swedish economy is characterized by continued strong GDP growth which has a positive effect on Vasakronan. We can at last see that employment has increased, with new employment primarily in the private service sector.”
The entire report is available at www.vasakronan.se under the heading In English.