1 January 30 June in summary

Transkript

1 Kungsleden, Interim Report, 1 January 30 June 2006

2 2 Kungsleden second quarter January 30 June in summary Acquisitions Disposals Property trading 74 properties 203 properties Disposals SEK 2,264 m SEK 5,455 m profi table 112 properties SEK 460 m loss-making 27 properties SEK 132 m 8.0% property 5.8% property Sales overhead SEK 16 m yield yield Profit SEK 312 m Realised value changes SEK 662 m Cash flow from trading SEK 974 m Earnings capacity 31 Dec June 2006 Operating net SEK 1,845 m SEK 1,672 m Property yield 7.2% 7.0% Acquisitions and disposals +0.1% Management of properties owned for the full year 0.1% Value adjustment 0.2% Less municipalities Value per property SEK 33 m SEK 36 m Kungsleden has a dual operational focus: property trading and property management. The property yield of earnings capacity was 7.0 (7.4) per cent at year-end. Acquisitions and disposals in the year contributed to increasing the yield on the property portfolio by 0.1 percentage points. Property management generated a negative 0.1 percentage point effect. Positive value changes in the year reduced the portfolio s property yield by 0.2 percentage points.

3 Kungsleden second quarter January 30 June 2006 Profit before tax was SEK 1,362 (749) m and net profit was SEK 1,526 (753) m, equivalent to SEK (6.20) per share. Rental revenues and operating net increased by 56 and 32 per cent respectively to SEK 1,245 (798) m and SEK 741 (560) m respectively. In the interim period, 203 properties were divested for SEK 5,455 m generating profi ts of SEK 312 m and cash flow of SEK 974 m; 74 properties were acquired for SEK 2,264 m. Profit for calculating dividends for the period amounted to SEK 1,199 m. Kungsleden is retaining its forecast for the financial year 2006 of profit for calculating dividends of SEK 2,900 m. KUNGSLEDEN S BUSINESS CONCEPT, VISION AND STRATEGY Kungsleden owns and manages properties, generating high and stable long-term returns. Kungsleden s vision is that by means of skilled entrepreneurship and a high level of expertise, Kungsleden will become Sweden s most profitable and successful property company. We intend to achieve our objectives by: Enhancing our skilled and businesslike organisation; Pursuing customer satisfaction through the active management and enhancement of our property holding; Proceeding from our existing holding, and through acquisitions and divestments, assuring high long-term returns. Kungsleden pursues the objective of continuously enhancing its portfolio s risk-adjusted returns. The corporation strives to constantly maintain high and stable cash fl ow from operating activities. Moreover, Kungsleden minimises operating risk by diversification in terms of property type, geographical market, tenants and by spreading rental contract maturities over time. Kungsleden avoids development projects, because typically, they imply significant cash flow uncertainty. Kungsleden utilises property trading, which by experience can be successful regardless of general economic conditions, to enhance its portfolio s risk-adjusted returns. PROFIT Earnings capacity The continuous realignment of our property holding means that at any given time, the Income Statement does not offer the most accurate impression. Instead, earnings capacity indicates the appearance of the Income Statement as if the properties owned at 30 June 2006 had been owned for the previous 12 months. The intention is to illustrate the impact of changes to the property holding, and to create the most accurate possible impression of the current situation. Earnings capacity 30 June SEK/ 31 March SEK/ SEK m 06 sq.m. 06 sq.m. Rental revenues 2, , Operating and maintenance costs Property tax Ground rent Operating net 1, , Book value 23,724 23,344 Property yield, % Economic occupancy, % Profi t margin, % Floor-space, 000 sq.m. 3,367 3,464 Property trading in the interim period exerted a positive impact on earnings capacity. In terms of sales price, divested properties property yields were 5.8 per cent, while the estimated property yield of acquired properties was 8.0 per cent. The divested properties risk-adjusted returns were lower than, and acquired properties higher than, the portfolio average risk-adjusted return. Property management had a negative impact on earnings capacity. Kungsleden s results Net profit for the interim period was SEK 1,526 m, a SEK 773 m increase on the previous year. Return on equity was 43 (36) per cent. The property yield was 6.0 per cent in actual terms and 7.0 per cent in terms of earnings capacity. Net profit includes a trading net of SEK 312 m, including SEK 662 m of realised value changes, which explains the majority of the discrepancy on the previous year. The operating net increased by SEK 181 m due to a larger holding. As expected, the operating net has been affected since many of the properties sold in 2005 had a higher profit margin while the acquired properties had a lower margin, compared to the portfolio average. A reducing profit margin raises sensitivity to rising costs and the fluctuation between quarters is expected to increase. The profit from property trading improved by SEK 140 m due to an increased number of property divestments than in the previous year as well

4 4 Kungsleden second quarter January 30 June 2006 as a continued favourable market that has enabled several major transactions, generating substantial profi ts. The effect of packaged properties often attracting a higher price than per property valuations is one reason for the robust increase in the trading net compared to the year-end market valuation. The effect of a potential packaged sale is hard to predict. Administration costs increased by SEK 57 m, and the net financial position deteriorated by SEK 73 m. The increase in administration costs and financial costs is attributable to a larger holding, the high transaction rate and somewhat higher interest levels. The net financial position was also affected by non-recurring costs relating to the redemption of loans and a positive effect of the reversal of previous provisioning for the fair value of interest-bearing liabilities coincident with acquisitions for the corresponding redeemed loans. As of 30 June 2006, the holding extended to 650 properties, against 562 in the corresponding period of the previous year. Of the period s value changes on financial instruments, SEK 26 m was attributable to market valuations of derivatives and SEK 220 m to re-valuations of other financial instruments. The valuation of financial instruments was positively affected by a slight increase in interest levels. The tax cost reduced by SEK 160 m, mainly due to the tax effect of property divestments in the period. THE PROPERTY HOLDING As of 30 June 2006, the property holding comprised 650 properties with floor-space of 3,367,000 sq.m. and a book value of SEK 23,724 m. The properties were located in 132 municipalities, with the three major city regions of Greater Stockholm, Greater Gothenburg and the Öresund region representing 56 per cent of property book value. SEK 2,264 m-worth of properties were acquired in the period, while Kungsleden made SEK 289 m of investments in existing properties. In terms of book value, divestments were SEK 5,143 m, and SEK 4,480 m in terms of acquisition value. Profit effect on divested properties Sales, SEK m Profi t, SEK m No. Positive 3, Zero 1, Negative Sales overheads Total 5, The reporting period In the second quarter, property divestments raised SEK 2,616m, generating profits of SEK 200 m; acquisitions were SEK 2,123 m. The divestments were two offi ce properties, three of the industrial/warehouse type, one retail and 83 of the Other type. The divestments in the Other category were mainly housing. The properties were divested at an estimated property yield of 5.8 per cent. There were 24 industrial/warehouse acquisitions, 19 retirement homes, 13 offices, 5 school properties, 3 retail properties, 1 care property and 5 of the Other type. The estimated property yield of acquired properties was 8.0 per cent. The divestment of a holding of 172 properties to Keops A/S was announced in June. This portfolio was sold for over SEK 6.3 bn, SEK 1,170 m above book value and SEK 1,470 m above acquisition value. Because the divestment is conditional, the profit will not be accounted before possession of the properties transfers in November 2006, pursuant to IAS 18 Revenue. Definitive revenue recognition will occur coincident with transfer of possession. Coincident with this divestment, the profit for calculating dividends for the financial year was increased to SEK 2,900 m. FUNDING The funding portfolio totalled a nominal SEK 14,722 m, and including the market values of financial instruments, was SEK 14,831 m. Average interest was 3.99 per cent, against 3.91 per cent as of 1 January. The average interest fixing period is 1.90 years. PROPERTY TRADING In the interim period, 74 properties with floor-space of 292,000 sq.m. were acquired for SEK 2,264 m. These acquisitions were effected at an estimated property yield of 8.0 per cent. Meanwhile, 203 properties were divested for a total of SEK 5,455 m, with profi ts of SEK 312 m and cash flow of SEK 974 m. These divestments were effected at an estimated property yield of 5.8 per cent. The prices received were SEK 333 m above internal valuations and SEK 945 m above external valuations. For 65 of these properties, the sales value per property was below SEK 10 m. Interest fixing period as of 30 June 2006 Maturity Nom. amt., SEK m Prop., % Ave. Int., % , , , , Total, loans 14, Derivatives 26 Market valuation other fi nancial instruments 83 Total 14,831

5 Kungsleden second quarter January 30 June 2006 SHAREHOLDERS EQUITY The closing balance of shareholders equity was SEK 7,656 m or SEK 56.1 per share, equivalent to an equity ratio of 30.9 per cent. THE SHARE AND SHAREHOLDERS The closing price on 30 June 2006 was SEK 84. Accordingly, compared to the year-end 2005 closing price of SEK 77, the share had risen by 10 per cent. The closing price at year-end 2005 has been converted for the 3:1 split effected. As of 30 June 2006, Kungsleden had some 19,000 shareholders, an increase of 900 on the previous year-end. The number of outstanding shares increased in the period due to the 3:1 split implemented. At the end of the period, there were 136,052,064 shares, an increase of 91,001,376 on the previous year-end. The first day of trading in the new share was 9 May PARENT COMPANY The parent company generated a net loss of SEK 14 (154) m; its sales were SEK 0 (0) m. Assets primarily comprise the funding of subsidiaries property holdings, divided between shares in subsidiaries of SEK 5,277 (1,235) m, and interestbearing internal funding of SEK 0.6 (1,377) m. Funding was mainly through shareholders equity of SEK 5,060 (2,560) m and external debt of SEK 0 (300) m. ACCOUNTING PRINCIPLES Kungsleden observes IFRS (International Financial Reporting Standards) as endorsed by the EU, and their IFRIC interpretations. This Interim Report has been prepared pursuant to IAS 34 Interim Financial Reporting. The accounting principles and calculation methods are identical to the Annual Report for the financial year Shareholder % of vote No. of shares and capital Robur Funds 4,167, JP Morgan Chase Bank 3,198, SSB CL Omnibus 2,890, Olle Florén 2,850, Mellon Omnibus 2,824, Kåpan Pensioner 2,149, SHB/SPP Funds 2,123, UBS AG London Branch Equities 2,077, Fortis Banque Luxembourg SA 1,931, DFA-INTL SML Cap Val Port 1,871, Total, 10 largest shareholders 26,083, Board and management 797, Foreign shareholders, other 28,670, Other shareholders 80,950, Total 136,502, HUMAN AND ORGANISATIONAL RESOURCES As previously announced, Jens Engwall resigned as Kungsleden AB s Chief Executive at the mid-point of the year. The Board of Directors of Kungsleden AB has appointed Thomas Erséus, currently CEO and President of consulting engineers WSP Europe AB and Executive Director of WSP Group plc as Kungsleden s Chief Executive. Mr. Erséus takes up his new position on 1 September Johan Risberg, Kungsleden s Deputy Chief Executive and Chief Financial Officer, has been appointed as acting Chief Executive for the period 1 July 31 August Mr. Engwall will remain a member of Kungsleden AB s Board of Directors. The average number of employees was 204 (93). Dividend policy The Board s ambition is for Kungsleden to maintain stable dividends and a high pay-out ratio, which means that Kungsleden will distribute a minimum of 50 per cent of profit for calculating dividends. Profit for calculating dividends corresponds to the cash flow statement item cash flow from operating activities. FORECAST FOR 2006 The Board of Directors estimates that profit for calculating dividends will be SEK 2,900 m. SIGNIFICANT EVENTS AFTER THE END OF THE PERIOD No significant events have occurred. Johan Risberg Acting Chief Executive/Chief Financial Officer Stockholm, Sweden, 15 August 2006 FORTHCOMING REPORTS Interim Report for January September 2006, 24 October 2006 FOR MORE INFORMATION, PLEASE CONTACT: Johan Risberg, Acting Chief Executive, Chief Financial Officer, tel: +46 (0) , mobile: +46 (0)

6 6 Kungsleden second quarter January 30 June 2006 AUDIT REPORT Introduction I have conducted a review of Kungsleden AB s Interim Report for the period 1 January 30 June The management is responsible for preparing and publishing this interim financial information accurately, pursuant to IAS 34. My responsibility is to state a conclusion of this interim fi nancial information, based on my review. Orientation and scope of the review I have conducted my review pursuant to SÖG 2410, the applicable standard for reviews of interim financial information conducted by the company s appointed auditors, and issued by FAR (the Institute for the Accounting Profession in Sweden). A review consists of making inquiries, primarily to individuals responsible for financial and audit issues, conducting an analytical review and taking review measures. A review has a differing orientation and considerably less scope than the orientation and scope of an audit pursuant to RS Swedish audit standards, and generally accepted accounting practice otherwise. The review measures taken in a review do not enable me to attain sufficient certainty for me to state that I am conscious of all significant circumstances that would have been identified if an audit had been conducted. Accordingly, the stated conclusion of a review does not have the certainty of the stated conclusion based on an audit. Conclusion Based on my review, no circumstances have arisen that give me reason to consider that essentially, the attached interim financial information does not provide a representative view of the company s financial position as of 30 June 2006, and its financial profits and cash flow for the six-month period that concluded on this date, pursuant to IAS 34. Thomas Thiel Authorised Public Accountant Stockholm, Sweden, 15 August 2006

7 Kungsleden second quarter The property holding and earnings capacity KUNGSLEDEN S GEOGRAPHICAL PRESENCE Total book value SEK 23,724 m Central 8 % North 3 % Foreign 6 % East 37 % Total rental value SEK 2,847 m Central 9 % North 3 % Foreign 5 % East 38 % Total floor-space SEK 3,367 m Central 11 % North 4 % Foreign 3 % East 35 % South 25 % South 24 % South 25 % West 21 % West 21 % West 22 % KUNGSLEDEN S PROPERTY CATEGORIES Total book value SEK 23,724 m School 6 % Retail 5 % Other 4 % Retirement homes 25 % Total rental value SEK 2,847 m School 6 % Retail 8 % Other 4 % Retirement homes 18 % Total floor-space SEK 3,367 m School 5 % Retail 7 % Other 3 % Retirement homes 13 % Care 9 % Offices 32 % Industrial/warehouses 19 % Care 11 % Offices 33 % Industrial/warehouses 20 % Care 9 % Offices 29 % Industrial/warehouses 34 % THE PROPERTY HOLDING AND EARNINGS CAPACITY IN SUMMARY Geographical division East South West Central North Foreign Total Number Lettable fl oor-space, 000 sq.m. 1, ,367 Book value, SEK m 8,915 5,914 4,875 1, ,434 23,724 Rental value, SEK m 1, , ,847 Rental revenues, SEK m ,526 Operating surplus, SEK m ,672 Economic occupancy, % Property yield, % Profi t margin, % Category Retirement homes Offi ces Industrial/ warehouse Care Retail School Other Total Number Lettable fl oor-space, 000 sq.m , ,367 Book value, SEK m 5,927 7,471 4,394 2,168 1,286 1, ,724 Rental value, SEK m , ,847 Rental revenues, SEK m ,526 Operating surplus, SEK m ,672 Economic occupancy, % Property yield, % Profi t margin, %

8 8 Kungsleden second quarter 2006 Financial Reporting INCOME STATEMENT Reporting period Interim period 12 month SEK m 2006 Apr June 2005 Apr June 2006 Jan June 2005 Jan June 2005/2006 July-June 2004/2005 July June Property management Rental revenue , , ,500.5 Operating and maintenance costs Property tax Ground rent Operating net , ,068.3 Property trading Sales revenues, net 2, , , ,045.6 Book value Aquisition value 2, , , ,730.3 Realised value changes , , , ,785.4 Trading net Administration costs Financial net Unrealised value changes Investment property , Financial Instruments , Profit before tax , , Tax Net profit 1, , , ,349.8 Average number of shares 136,502, ,290, ,502, ,290, ,148, ,290,351 Earnings per share SEK BALANCE SHEET SEK m 30 June June Dec 2005 ASSETS Properties 23, , ,750.4 Receivables, etc. 1, , ,555.5 Liquid assets TOTAL ASSETS 24, , ,469.7 LIABILITIES AND SHAREHOLDER S EQUITY Shareholder s equity 7, , ,649.3 Interest-bearing liabilities 14, , ,003.6 Operating liabilities, etc. 2, , ,816.8 TOTAL LIABILITIES AND SHAREHOLDER S EQUITY 24, , ,469.7

9 Kungsleden second quarter Financial Reporting CHANGES IN SHAREHOLDER S EQUITY SEK m 30 June June Dec 2005 Opening balance 6, , ,954.4 Dividends Issue of new shares Currency exchange rate differences Net profi t 1, ,986.8 Closing balance 7, , ,649.3 CASH FLOW STATEMENT Reporting period Interim period 12 month SEK m 2006 Apr June 2005 Apr June 2006 Jan June 2005 Jan June 2005/2006 July June 2004/2005 July June Operations Profi t before tax 927.4, 633.6, 1, , Realised value changes, properties Unrealised value changes , Adjustment for items not included in cash fl ow from operations Tax paid Cash flow from operations , , Change in working capital Increase ( )/decrease (+) in operating receivables Increase (+)/decrease ( ) in operating liabilities 1, , , , , , Cash flow from operations after change in working capital 1, , , Investment activity Acquisition of property 2, , , , , ,066.0 Disposals of property (acquisition value) 2, , , ,730.4 Acquisition of subsidiaries net liquidity impact , Net investments in machinery/equipment Disposals of machinery/equipment Increase of long term receivables Repayment of long term receivables Cash flow from investment activity , , , ,319.9 Financing activity Loans drawn down 2, , , , , ,304.3 Loans amortised 3, , , ,206.1 Issue of new shares Dividends Cash flow from financing activity 1, , , , , ,813.8 Cash flow for the period Liquid assets, opening balance Liquid assets, closing balance

10 10 Kungsleden second quarter 2006 Financial Reporting KEY FIGURES 2006 Apr June Reporting period Interim period 12 month 2005 Apr June 2006 Jan June 2005 Jan June 2005/2006 July June 2004/2005 July June Property-related Earnings capacity Property yield, % Economic occupancy, % Profi t margin, % Actuals Property yield, % Economic occupancy, % Profi t margin, % Financial Return on total capital, % Return on equity, % Interest cover, multiple Equity ratio, % Gearing, multiple Mortgage ratio, % Data per share Share price, SEK Dividend, SEK Total yield, % Dividend yield, % P/E-ratio, multiple P/CE-ratio, multiple Operating surplus, SEK Profi t, SEK Cash fl ow from operations, SEK Property book value, SEK Shareholders equity, SEK Number of outstanding shares 136,502, ,751, ,502, ,751, ,502, ,751,720 Average number of shares 136,502, ,290, ,502, ,290, ,148, ,290,351

11 Kungsleden second quarter Definitions Earnings capacity: properties disposed of as of the balance sheet date are excluded, and properties acquired by no later than the same date are included as if they had been owned for 12 months. Otherwise, the calculation is based on the following assumptions: For those properties where 12 months have passed since Kungsleden took possession, actuals for the last 12 months are included; For those properties where more than six months but less than 12 months have passed since Kungsleden took possession, actuals are recalculated to 12-month equivalents; For properties where less than six months have passed since Kungsleden took possession, data from acquisition calculations are used. PROPERTY TERMINOLOGY Property yield: operating net in relation to the average book value of properties. However, the property yield for the earnings capacity is calculated as earnings capacity in relation to the book value of properties at the end of the period. Operation costs: costs for electricity, heating, water, property care, cleaning, insurance and ongoing maintenance less billed supplements for operations and maintenance. Operating net: costs for electricity, heating, water, property care, cleaning, insurance and ongoing maintenance less billed operation and maintenance supplements. Economic occupancy: rental revenue, rental dis counts and rental losses in relation to rental value. Economic vacancy: assessed market rent for un-occupied fl oor-space in relation to rental value. Property type: the properties primary usage (see Distribution of fl oorspace ). Rental revenues: rent invoiced plus remuneration for property tax less rental losses and rental discounts. Rental value: rental revenues plus assessed market rent for un-let fl oorspace, rental discounts and rental losses, less other revenue. Accommodation type: fl oor-space distributed by usage. Maintenance: measures intended to maintain the capacity of a property and its technical systems. Relates to planned measures entailing the replacement or renovation of parts of a building or technical systems. Also includes tenant adaptations. Distribution of floor-space: distribution by accommodation type implies that the fl oor-space in a property is distributed by usage. There is a division between offi ce, housing, retail, hotel, deve lopment, industrial and warehousing. Distribution by property type means the property is defi ned by that type of fl oor-space that represents the greatest proportion of total. Accordingly, a prop erty with 51 per cent of its fl oor-space used as offi ces is considered an offi ce property. Area-based occupancy: let fl oor-space in relation to total lettable fl oorspace at the end of the period. Area-based vacancy: vacant fl oor-space in relation to total lettable fl oor-space at the end of the period. FINANCIAL TERMINOLOGY Return on equity: net profi t in relation to average shareholders equity. Average shareholders equity is calculated as the total of opening and closing balances divided by two. Return on total capital: profi t before tax less unrealised value changes and net fi nancial position in relation to average assets. Average assets are calculated as the total of the opening and closing balances divided by two. Beta value: the share s correlation with the market s average performance. A beta value of less than one implies that a share price has fl uctuated less than the SAX (Stockholm All-share Index). Beta value is a key component of the CAPM (Capital Asset Pricing Model) used to calculate the market s required rate of return on the share. The CAPM indicates that a low beta value implies a low required rate of return. Beta values relate to a period of 12 months. Mortgage ratio: interest-bearing liabilities in relation to property book value at year-end. Dividend yield: dividends paid in the year in relation to the share price at the beginning of the year. Shareholders equity per share: shareholders equity in relation to the number of shares at year-end. Book value of property per share: book value of property in relation to the number of shares at year-end. Cash flow from operating activities: profi t before tax less unrealised value changes adjusted for realized value changes on properties, items not included in cash fl ow from operating activities and tax paid. P/CE ratio: share prices at the beginning of the year in relation to cash fl o w f r o m o p e r a t i o n s. P/E ratio: share price at the end of the period in relation to earnings per share, in accordance with prevailing forecasts. Year-end share prices in relation to the following year s EPS are used for historical values. Earnings per share: net profi t divided by the weighted average number of outstanding shares in the period. Interest cover: profi t before tax less unrealized value changes and net fi nancial position in relation to net fi nancial position. Gearing: interest-bearing liabilities at year-end in relation to shareholders equity. Equity ratio: shareholders equity including minority shares at year-end in relation to total assets. Total yield: the total of the share s price gains and dividends paid in the year in relation to the closing share price at the beginning of the year. Profit for calculating dividends: net profi t excluding items not affecting cash fl ow such as unrealised value changes, depreciation and amortization and deferred tax plus realised value changes. Profi ts for calculating dividends corresponds to the cash fl ow from operating activities item of the Cash Flow Statement. Profit margin: operating net in relation to total rental revenues.

12 12 Kungsleden second quarter 2006 Property DIVESTED PROPERTIES JANUARY JUNE 2006 Lettable floor-space, sq.m. Year of construction/ Industrial/ Retirement Name Municipality Locality Address conversion Offices warehouse homes Care Retail School Residential Hotel Other Total floorspace Market Area East Office properties Böle 1:183 Hofors Hofors Hästskovägen / Bäckgården 8 Huddinge Vårby Vårby Centrum ,394 1,681 2,143 1,005 8,223 Industrial/warehouse property Näringen 12:6 Gävle Gävle Beckasinvägen ,227 1,762 Retail properties Vretåker 2 Bollnäs Bollnäs Apoteksgatan 14, ,136 5,136 Mullvaden 10,12 Botkyrka Tumba Björkvägen ,925 1,925 Lillsidan 3:1 Enköping Enköping Västerleden 152, ,032 2,032 Laxen 2 Eskilstuna Eskilstuna Stenbygatan2, , ,529 1,529 Slagsta 1:21 Eskilstuna Eskilstuna Brusengatan , ,698 1,698 Städet 15 Flen Flen Norra Kungsgatan 8, , ,767 4,277 Sätra 104:5 Gävle Gävle Lokförargatan 3, ,840 4,840 Sörby 5:4 Gävle Gävle Parkvägen /1970/ 1,982 1, /1997 Valbo-Backa 6:13 Gävle Gävle Johanneslötsvägen , ,431 Ribby 1:128 Haninge Västerhaninge Tungelstavägen , ,354 1,354 Vinkeln 8 Huddinge Kungens kurva Tangentvägen 20, ,925 2,920 Ede 20:9 Hudiksvall Delsbo Edevägen / Rådmannen 9 Hudiksvall Hudiksvall Trädgårdsgatan ,380 5,564 Bredgården 1:11 Järfälla Järfälla Kaminvägen /1991 2,290 2,991 1,402 6,683 Öje 9:87 Ljusdal Järvsö Turistvägen , ,031 1,031 Nyckelharpan 2 Norrköping Norrköping Moa Martinssons Gata ,409 2,409 Rapsbaggen 1 Norrköping Norrköping Bigatan Hotellet 25 Nyköping Nyköping Bagaregatan ,561 6,561 Utmålet 6 Nyköping Nyköping Gustafsbergsstigen ,232 Södra Edsbyn 13:174 Ovanåker Edsbyn Västergatan , ,102 2,102 Västanå 2:59 Ovanåker Ovanåker Västanågatan /1987 1,145 1,145 Dalbacken 21 Sandviken Sandviken Dalagatan ,768 6,867 Förmannen 1 Sandviken Sandviken Högbovägen ,801 Strået 1 Solna Solna Odlingsvägen , Diariet 7 Stockholm Bromma Registervägen , ,918 Söderala-Sund 1:29 Söderhamn Söderhamn Stickvägen , ,739 4,739 Luktviolen 2 Södertälje Södertälje Erikshällsgatan Kumla 69:33 Tyresö Tyresö Vendelsövägen ,025 1,025 Nåntuna 5:45 Uppsala Uppsala Nämndemansvägen , ,888 1,888 Kyrkslätten 2:5 Älvkarleby Älvkarleby Östra Vägen ,800 3,800 Other Hårstorp 3:110 Finspång Finspång Dunderbacksvägen / ,432 18, Holmsund 11:1 m fl Gävle Gävle Korsnäsvägen 104 A-B , ,460 Holmsund 7:6 Gävle Gävle Holmsundsvägen 7, , ,227 29,(Ojämna Nr) Kastet 6:2 m fl Gävle Gävle Korsnäsvägen Kastet 8:1 m fl Gävle Gävle Forskarvägen , ,407 2,504 16,827 Lillhagen 2:11 Gävle Gävle Korsnäsvägen Lillhagen 5:3 Gävle Gävle Torkarvägen ,027 3,027 Norr 17:6 Gävle Gävle Ruddammsg.38/N.Kopparsl ,726 3, Norr 18:6 Gävle Gävle Hattmakargatan 13 B ,732 3,537 Norr 19:3 Gävle Gävle Nygatan 43/N. Centralgatan ,072 2,393 Norr 27:2 Gävle Gävle Nygatan 40, Stora ,015 2,792 Esplanadgatan 9 Söder 58:7 Gävle Gävle Södra Kungsgatan 44/ 321 1,462 2,004 3,787 Kaserngatan 65 A-B Sörby 10:9 Gävle Gävle Falkvägen 5 A Väster 30:2 Gävle Gävle Nygatan ,823 3,442 Vårby Gård 1:16 Huddinge Vårby Nygårdsvägen 2-30, ,064 52,269 56,333 Gärdet 1 Norrköping Norrköping Rågången ,609 5,099 Knäppingsborg 3 Norrköping Norrköping Järnbrogatan / , ,176 Lammet 2 Norrköping Norrköping Kungstorget / ,950 2, ,502 Lokatten 12 Norrköping Norrköping Hosp.Gat9-11,Olai ,804 2,711 7,947 Kyrkog12,Trädg.G 8b,10 Planket 20 Norrköping Norrköping Bråddgatan ,139 1,139 Planket 23 Norrköping Norrköping Plankgatan / ,625 Prinsen 18 Norrköping Norrköping Hospitalsgatan , ,593 Sprutan 8 Norrköping Norrköping G Rådstugugatan / , ,756 Stenhuggaren 25 Norrköping Norrköping Sandgatan ,914 2,914 Storgatan 10 Norrköping Norrköping Drottninggatan , ,385 Storgatan 9 Norrköping Norrköping Gamla Rådstugugatan ,968 6,806 Stävan 2 Norrköping Norrköping Rösgången ,639 3,639 Tullhuset 1 Norrköping Norrköping G:A Rådstugugatan 11, 273 1,320 1,593 Trädgårdsgatan 4a Bredmosstorpet 4 Sandviken Sandviken Bryggaregatan ,426 1,865 Framnäs 16:1 & 20:1 Sandviken Österfärnebo Framnäsgatan Gysingen 1:13 Sandviken Gysinge Kölnarvägen Gysingen 1:27 Sandviken Gysinge Kjellins väg Klappsta 3:29 Sandviken Österfärnebo Åsvägen ,229 2,239 Klappsta 6:8 Sandviken Österfärnebo Åsvägen ,147 1,259 Klappsta 7:17 Sandviken Österfärnebo Solängsvägen Maskinisten 23 Sandviken Sandviken Sveavägen 31A-F ,069 1,150 Storhammaren 1 Sandviken Sandviken Malmgatan ,333 Ås 25:3 Sandviken Österfärnebo Framnäsgatan Bodbetjänten 1 Stockholm Farsta Kryddgränd ,709 2,964 5,673 Alen 4 Söderhamn Söderhamn Köpmang.12,14/N.Hamng ,456 4,746 7, Elefanten 4 Söderhamn Söderhamn Brädgårdsgatan Granen 3 Söderhamn Söderhamn N.Hamng. 9, Köpmang. 10, ,657 1,140 1, ,573 Nyg.1 Päronet 1 Söderhamn Söderhamn Kungsgatan Söderala Sunnanå Söderhamn Bergvik Lappstadsvägen /1987 1, ,673 Vannsätter 29:19 Söderhamn Bergvik Björkhagsvägen /1988 1,392 1,392 Vannsätter 29:62 Söderhamn Bergvik Hagstigen /1989 1, ,306 Venus 1, 2 Söderhamn Söderhamn Rådmansgatan Östansjö 16:22 Söderhamn Sandarne Grindvägen 1-23/Bläckhornsv 1910/1956 2, , Harnäs 11:327 Älvkarleby Skutskär Harnäsgatan /1988 4,051 4,051

13 Kungsleden second quarter Property Lettable floor-space, sq.m. Year of construction/ Industrial/ Retirement Name Municipality Locality Address conversion Offices warehouse homes Care Retail School Residential Hotel Other Total floorspace Market Area South Office properties Släggan 9 & 10 Bromölla Bromölla Segervägen , ,875 Terminalen 1 Helsingborg Helsingborg Järnvägsgatan , ,886 1,616 21,093 Druvan 1 Malmö Malmö Engelbrektsgatan , ,788 von Conow 51 Malmö Malmö Kalendegatan , ,892 Kräftan 7 Sävsjö Sävsjö Storgatan /1972 1, ,324 Retail properties Hjorten 10 Alvesta Alvesta Värnamovägen ,658 2,658 Jungfrun 5 Eksjö Eksjö Österlånggatan ,149 4,149 Fornminnet 2 Helsingborg Helsingborg Torbornavägen ,598 1,598 Bajonetten 2 Kristianstad Kristianstad Kanalgatan ,915 1,915 Karl XV 16 Landskrona Landskrona Järnvägsgatan , ,340 Trekanten 3 Nässjö Nässjö Bandygatan Kronan 6 Vaggeryd Vaggeryd Järnvägsgatan 2 B ,356 2,356 Trucken 1 Vetlanda Vetlanda Stålvägen Nederled 2:63 Värnamo Rydaholm Alvestavägen / Fogden 1 Västervik Västervik Västra Kyrkogatan ,579 5,579 Zephyr Västra 7 Ystad Ystad Klostergatan , ,701 Other Gårö 1:541 o 1:542 Gnosjö Gnosjö Gårö Östra roten 21, 22 Landskrona Landskrona Järnvägsgatan 7 b , ,182 Östra roten 35 Landskrona Landskrona Nygatan ,505 4, ,392 Market Area West Office properties Björnen 2 Mariestad Mariestad Hamng. 10, Västerlångg.1-3, , ,758 Esplanaden 1 Vägge 13 Uddevalla Uddevalla Asplundsgatan 37 1,909 1, ,986 Industrial/warehouse properties Källbäcksryd 1:400 Borås Brämhult Tvinnargatan ,329 1,977 Kärra 11:110 Göteborg Hisings backa Ellesbovägen ,822 7,822 Care properties Lillängen 2:1 Mariestad Mariestad Carlbecksv Hasselbacksv Parkv, Solglänte ,246 26,808 Retail properties Hinden 2 Falköping Falköping Fahlegatan ,925 1,925 Betslet 1 Mariestad Mariestad Storegårdsvägen ,124 1,653 Lejonet 9 Mariestad Mariestad Karlag 3 / Hamng , ,918 5,091 Koljan 1 Mölndal Mölndal Brogatan ,922 4,474 Ugglum 2:328 Partille Partille Skolvägen ,523 1,523 Sjöhästen 2 Varberg Varberg Birger Svenssons väg Other Epidemisjukhuset 1 Uddevalla Uddevalla Hovslagaregatan 1 5,246 5,246 Market Area Central Office properties Gruvan 1 Karlstad Karlstad Kungsgatan , 1929, , , , 1996 Hyttan 11 Karlstad Karlstad Nygatan , ,140 3,642 Retail properties Kuriren 1 Arboga Arboga Ahlöfsgatan / ,049 3,073 Lastaren 1 & 2 Avesta Avesta Prästgatan ,349 1,349 Vinden 1 Avesta Avesta Axel Johanssons väg /1987 2,555 2,555 Björken 11, 15 Hedemora Hedemora Åsgatan ,429 1, ,619 Mercurius 1 Karlstad Karlstad Drottninggatan , 1929, ,811 1,201 3, Njord 6 & 7 Köping Köping Stora gatan / ,763 1,085 5,401 Kvasta 9:2 Lindesberg Fellingsbro Bergsvägen , ,969 Myrbacka 80 Vansbro Dala järna Myrbacka ,237 1,237 Skomakaren 3, Vansbro 26:1 Vansbro Saknas Saknas ,194 1,501 Myrjärnet 1 Västerås Västerås Bäckby Torg ,929 2,451 Skyttegillet 6 Västerås Västerås Hästhovsgatan , ,051 1,051 Traversföraren 3 Västerås Västerås Traversgatan ,026 2,572 Other Harneskmakaren 3 & 10 Arboga Arboga Järntorgsgatan / ,658 Helge And 16 Arboga Arboga Järntorget ,035 1,668 Kvarnsveden 3:196 Borlänge Borlänge Källgatan ,392 1,448 Kvarnsveden 3:197 Borlänge Borlänge Källgatan ,518 7,518 Brunna 52:1 Hedemora Hedemora Ringvägen 1-7, , ,983 5,407 Anden 9 Karlstad Karlstad Åttkantslunden /1983 1, ,652 Braxen 34 Karlstad Karlstad Nygatan 1/Ö Kanalgatan , ,041 Ekorren 9 Karlstad Karlstad Sandbäcksg 5/S Klaragatan / ,833 2,591 Furan 5 Karlstad Karlstad Gillbergsgatan / , ,969 Furan 7 Karlstad Karlstad Jössegatan ,022 Granatkastaren 4 Karlstad Karlstad Artillerigatan / Gruvan 12 Karlstad Karlstad V Kanalgatan ,525 2,651 Gruvan 2 Karlstad Karlstad Ö Kyrkogatan /1985 1, ,166 Grävlingen 3 Karlstad Karlstad Sundbergsgatan / ,040 1,178 Höken 13 Karlstad Karlstad Drottninggatan ,670 5,584 7,730 Pilbågen 1 Karlstad Karlstad Sandelsgatan /1986 2,184 2,184 Registratorn 1 Karlstad Karlstad Norra Allén 26 B Registratorn 8 Karlstad Karlstad Norra Allén 30 A Registratorn 9 Karlstad Karlstad Norra Allén 28 A Spiran 1-6 Karlstad Karlstad Lignellsgatan / , ,610 Trätälja 11 Karlstad Karlstad Drottningg 37/Pihlgrensgatan / , ,088 Tusenskönan 1 Karlstad Karlstad Älvdalsgatan / , ,597 Väduren 3 Karlstad Karlstad Rudsvägen /83 1,344 1,344 Disa 1 Köping Köping Stora Torget / ,747 Fenja 10 Köping Köping Ö:A Långgatan 3/V:A ,030 1, ,965 Åpromenaden 20 Freja 11 Köping Köping Stora G. 8, Ö:A Långg / , ,719 Freja 3 Köping Köping Stora Gatan ,324 1,740 Immanuel 2 Köping Köping Tunadalsgatan , ,391

14 14 Kungsleden second quarter 2006 Property Lettable floor-space, sq.m. Year of construction/ Industrial/ Retirement Name Municipality Locality Address conversion Offices warehouse homes Care Retail School Residential Hotel Other Total floorspace Inga 1 Köping Köping S:T Olovsgatan / , ,724 Tunadal 7,8,9 Köping Köping Tunadalsgatan ,171 8, ,431 Apotekaren 1 Malung Malung Lisellska Torget ,575 Växlaren 5 Malung Malung Lisellska Torget 2 A-B ,586 Market Area North Office properties Ejdern 17 Strömsund Strömsund Ramselevägen Retail properties Bävern 3 Boden Boden Svartbyvägen , ,546 1,546 Fyren 9 Haparanda Haparanda Västra Esplanaden , ,599 2,599 Yrkesskolan 5 Härnösand Härnösand Gångviksvägen 6, , ,760 3,760 Bilen 22 Luleå Luleå Delfingatan , ,540 4,540 Storheden 1:45 Luleå Luleå Betongvägen ,445 Lögdeå 23:1 Nordmaling Lögdeå Rundviksvägen Haren 10 Skellefteå Skellefteå Nygatan 38, , ,867 2,041 6,919 Idun 10 Skellefteå Skellefteå Kanalgatan , ,517 2,517 Regulus 22 Skellefteå Skellefteå Skeppargatan /1991 1,935 1,935 Vargen 2 Strömsund Strömsund Bredgårdsgatan , ,990 Köpingen 1 Sundsvall Sundsvall Medborgargatan ,668 2,668 Vivsta 3:14, 3:97 Timrå Timrå Köpmangatan ,940 2,192 Motormannen 10 Umeå Umeå Verkstadgatan , ,548 1,548 Singeln 13 Umeå Umeå Formvägen 8C ,735 2,368 Ånge 60:132 Ånge Ånge Norra Borgsjövägen , ,879 1,879 Köpmannen 1 Åre Järpen Strandvägen , ,085 1,085 Norrlungånger 2:42 Örnsköldsvik Örnsköldsvik Björnavägen 45 1,817 1,817 Brunflo-Backen 1:178 Östersund Brunflo Centrumvägen , ,926 2,107 Kräftan 3 & 7 Östersund Östersund Bangårdsgatan , ,119 Tröskan 12 Östersund Östersund Slåttervägen , ,912 2,912 AQUIRED PROPERTIES JANUARY JUNE 2006 Lettable floor-space, sq.m. Year of construction/ Industrial/ Retirement Name Municipality Locality Address conversion Offices warehouse homes Care Retail School Other Hammaren 1:247 Ragunda Hammarstrand Gulldalen 1-17, 21-41, 2-18, ,544 2, Mimer 10 Skellefteå Skellefteå Hörnellgatan 16, ,426 3,019 Aspen 9 Strömsund Strömsund Amaliagatan 30-32/Storgatan ,841 1, Bävern 3 Strömsund Strömsund Lövbergavägen Stenbiten 3 Strömsund Strömsund Pumphusgatan Aeolus 1 Sundsvall Sundsvall Trädgårdsg.11/Nybrog / ,492 Bredsand 1:3 m fl Sundsvall Sundsvall Appelbergsvägen 1 7,127 7,127 Bredsand 1:4 m fl Sundsvall Sundsvall Appelbergsv. 14, 16, 18 4,479 4,479 Dingersjö 28:27 m fl Sundsvall Sundsvall Lärkvägen 1 9,464 9,464 Dingersjö 3:131 m fl Sundsvall Sundsvall Bergsvägen 3 A-J ,736 25,186 Dingersjö 3:135 Sundsvall Sundsvall Kustvägen ,450 1,677 Dingersjö 4:10 Sundsvall Sundsvall Tärnvägen / Fliten 10 Sundsvall Sundsvall Skolhusallén 9, 3, ,130 Fliten 11 Sundsvall Sundsvall Rådhusgatan 39a-B, 214 3,372 3,586 Skolhusallén 9, Varvs Kvissle 2:53 & 2:43 Sundsvall Kvissleby Affärsgatan 26 A-D ,469 1,469 Kvissle 22:2 Sundsvall Kvissleby Affärsgatan 22 a ,310 6,659 Lagmannen 10 Sundsvall Sundsvall S.Järnvägsg.21/Esplanaden ,288 3,921 6, Nolby 1:48, 40:1, 1:108 Sundsvall Kvissleby Skolgatan , ,054 5,601 Nolby 3:268 Sundsvall Kvissleby Brovägen Nolby 40:2 Sundsvall Kvissleby Affärsgatan / , ,181 Nolby 41:3 & 37:1 Sundsvall Kvissleby Affärsgatan 14 A-H, 16 H-N 1975/ ,006 5,328 6,377 Residential Total floorspace Hotel Other Rental revenue Rental Vacancy, value % Market Area East Retirement homes Landeryd 6:5 Linköping Linköping Slatteforsvägen 2A-H 4,430 4, Landeryd 6:61 Linköping Linköping Slatteforsvägen 10 1,266 1, Trähästen 2 Linköping Linköping Skogslyckegatan 11F Vetebullen 2 Linköping Linköping Kärna Centrum 1 2,145 2, Norrberga 4:82 Linköping Sturefors Blåbärsvägen Ostbiten 1 Linköping Linköping Rydsvägen 9C 1,029 1, Riket 22 Linköping Linköping Järdalavägen 52C 1,605 1, Logfyrkanten 3 Solna Solna Signalistgatan 3 3,035 3, Industrial/warehouse properties Navhålet 2 Linköping Linköping Låsblecksgatan ,733 4,907 7, Tråden 11 Norrköping Norrköping Malmgatan , ,752 15,579 20, Postgården 5 Stockholm Årsta Grosshandlarvägen ,755 5, Particentralen 1 Stockholm Årsta Brunnbyvägen , , , Particentralen 5 Stockholm Årsta Partihandlarvägen ,284 1, Particentralen 6 Stockholm Årsta Brunnbyvägen , , Hästholmen 5 Stockholm Skärholmen Ekholmsvägen , ,291 1, Particentralen 2 Stockholm Årsta Brunnbyvägen ,400 3, Administratören 1 Stockholm Årsta Partihandlarvägen , ,727 1,235 2, Care properties Banslätt 1 Botkyrka Tullinge Römossevägen ,340 8, Gränby 12:6 Uppsala Uppsala Gränby Bilgata ,732 2, School propreties Nyponkärnan 1 Linköping Linköping Kvinnebyvägen

15 Kungsleden second quarter Property Lettable floor-space, sq.m. Year of construction/ Industrial/ Retirement Name Municipality Locality Address conversion Offices warehouse homes Care Retail School Residential Total floorspace Hotel Other Rental revenue Rental Vacancy, value % Market Area South Retirement homes Röinge 3:4 Hörby Höör Röingevägen ,917 1, Virket 8 Malmö Malmö Sigtunagatan , ,704 1,779 4, Office properties Påskbuketten 5 Malmö Malmö Amiralsgatan ,114 1, Påskbuketten 6 Malmö Malmö Hästvägen 4 A ,096 2, Påskbuketten 8 Malmö Malmö Hästvägen 4 C ,769 1, Påskbuketten 9 Malmö Malmö Hästvägen 4 D ,429 1, Påskbuketten 10 Malmö Malmö Hästvägen 4 E Industrial/warehouse properties Köpingetrakten 1 Helsingborg Helsingborg Trintegatan Ädelmetallen 5 Jönköping Jönköping Kabelvägen ,719 4, Ädelkorallen 1 Jönköping Jönköping Bultvägen ,242 1, Ädelkorallen 10 Jönköping Jönköping Bultvägen 6 A Skjutsstallslyckan 22 Malmö Malmö Lundavägen , 1982, 4,180 3,470 7, , 1995 Revolversvarven 10 Malmö Malmö Jägershillsgatan ,600 3, Bulten 1 Åstorp Åstorp Jitegatan ,000 4, Other Styckmästaren 7 o 8 Malmö Malmö Jöns Risbergsgatan , , Cykeln 15 Malmö Malmö Lönngatan 22 A Idrotten 7 Malmö Malmö Palmgatan 28 Smedjekullen 5, 8, 10 o 11 Malmö Malmö Smedjekullsgatan , 1940, 1943, , , Market Area West Retirement homes Rud 5:2 Göteborg Västra Positivgatan 15 6,027 6, Frölunda Brandvakten 3 Halmstad Halmstad Södra Vägen 2 3,976 3, Industrial/warehouse properties Baggen 2 Skara Skara Ängatorpsgatan , ,219 1, Sandåker 1 Ulricehamn Ulricehamn Vistavägen , School properties Halla-Stenbacken 1:91 Uddevalla Uddevalla Fossumsbergsvägen , 1930, 7,862 6, ,713 1,870 6,225 37, , 1971, , Flexihus Vårgårda Vårgårda Torggatan 2 25,000 25, Market Area Central Office properties Göktytan 2 Karlskoga Karlskoga Centralplan , , , Korpen 4 Karlskoga Karlskoga Hotellgatan , Rapphönan 16 Karlskoga Karlskoga Badstugatan , ,676 1, Elementet 3 Karlskoga Karlskoga Elementvägen Regnvinden 1 Karlstad Karlstad Dagvindsgatan 7 10,109 10, Industrial/warehouse properties Draken 11 Karlskoga Karlskoga Hangarvägen , ,518 3, Kilsta 3:137 Karlskoga Karlskoga Kilsta Industriområde 1965, ,632 5, Spinnaren 7 Karlskoga Karlskoga Häsängsvägen , 1999, 3,255 3, Tåkern 1 Karlskoga Karlskoga Nitarevägen , 2001, 2,905 2, Viren 13 Karlskoga Karlskoga Maskinvägen , 1992, 2,850 2, Tuppen 1 Karlskoga Karlskoga Bergmansgatan ,288 2, School properties Alstrum 6:1 Karlstad Karlstad Ulvsby-Åstorp ,223 3, Bjursnäs 2:1 Laxå Laxå Ramundervägen ,177 2, Other Fasanen 6 Karlskoga Karlskoga Bergmansgatan , , Market Area North Office properties Stadsön 8:31 Piteå Piteå Fläktgatan Stadsön 8:24 Piteå Piteå Amperegatan 12 1,539 1, Stadsön 8:10 Piteå Piteå Relägatan Industrial/warehouse property Stadsön 8:33 Piteå Piteå Fläktgatan 26 B Care property Stigbygeln 5 Umeå Umeå Ridvägen ,544 15, Retail propreties Stadsön 8:8 Piteå Piteå Fabriksgatan 17 2,520 2, Flygfisken 6 Piteå Piteå Sundsgatan Öjebyn 3:161 Piteå Öjebyn Hammarvägen 41 1,100 1, Market Area Foreign Retirement homes Hellmich 1 Düsseldorf Düsseldorf - 31,518 31,518 43,697 43,697 Hellmich 2 Düsseldorf Düsseldorf - Hellmich 3 Düsseldorf Düsseldorf - Hellmich 4 Düsseldorf Düsseldorf - Hellmich 5 Düsseldorf Düsseldorf - Hellmich 6 Düsseldorf Düsseldorf - Hellmich 7 Düsseldorf Düsseldorf - Hellmich 8 Emden Emden -

16 Kungsleden AB (publ) Corp.id.no Reg. office Stockholm Head office Medborgarplatsen 25 Box SE Stockholm Tel Fax Regional office West Spannmålsgatan 14 Box SE Göteborg Tel Fax Regional office East Medborgarplatsen 25 Box SE Stockholm Tel Fax Regional office South Elbegatan 5 SE Malmö Tel Fax Regional office Retirement Homes Medborgarplatsen 25 Box SE Stockholm Tel Fax Local offices West Jönköping Huskvarnavägen 40 SE Jönköping Tel Fax Växjö Norrgatan 29 SE Växjö Tel Fax Trollhättan Polhemsgatan 2 SE Trollhättan Tel Fax Local offices East Karlstad Lantvärnsgatan 3B Box 1037 SE Karlstad Tel Fax Västerås Smedjegatan 13 SE Västerås Tel Fax Norrköping Hospitalsgatan 11 SE Norrköping Tel Fax Gävle Hamntorget 6 SE Gävle Tel Fax Local office Retirement Homes Elbegatan 5 SE Malmö Tel Fax