Kun g sleden AB Annual Re

KungsledenKungsleden ÅrsredovisningAnnualÅrsredovisning Report 20032003 p ort 2003

Namnlöst-1 1 04-03-19, 14.34.28 Cyanblå (processfärg)Magentaröd (processfärg)Gul (processfärg) Svart (processfärg) 3 Kungsleden 4 2003 in summary 5 Questions about Kungsleden 6 A letter from the Chief Executive Record profi t in hard times – again 8 The share and shareholders 10 Organisational and human resources Organisational resources Human resources Senior executives Board of Directors and Auditors 14 Environmental audit 15 The property holding and earnings capacity The property holding Earnings capacity 19 Retirement Homes 20 Financial overview The past year Property values Funding Forecast 2004 Five-year overview 26 Financial reporting Report of the Directors Income Statement Balance Sheet Cash Flow Statement Supplementary disclosures Proposed appropriation of profi ts 35 Audit Report 36 Property Property 2003 Acquired properties 2003 Divested properties 2003 44 Definitions 45 Annual General Meeting 46 Addresses

1-19.indd 2 04-03-23, 08.12.25 Cyanblå (processfärg)Magentaröd (processfärg)Gul (processfärg) Svart (processfärg) Kungsleden

Kungsleden is a Swedish property company that prioritises yield above property type or geographical location. At the end of 2003, Kungsleden’s property holdings comprised 423 properties with a book value of approximately SEK 12.3 bn. The holding is distributed over a total of 110 municipalities nationwide, although focused on the southern and central provinces of Götaland and Svealand. At year-end 2002, the property yield was 8.3 per cent. Kungsleden has been quoted on the Stockholm Stock Exchange O-list since 14 April 1999.

Vision Kungsleden’s vision is that by means of skilled entrepreneur- ship and a high level of expertise, Kungsleden will become Sweden’s most profi table and successful property company.

Business concept Kungsleden owns and manages properties, generating high and stable long-term returns.

Strategy 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 disposals, assuring high long-term returns.

Financial targets Our objectives are to achieve: • A minimum return on equity of 15 per cent; • A minimum property yield net of property administration in our portfolio of 8.5 per cent.

Risk limits We limit risk by: • Sourcing a maximum of 30 per cent of rental revenue from industrial and warehouse properties; • Sourcing a maximum of 30 per cent of rental revenue from properties located in municipalities with populations of less than 25,000; • Maintaining a minimum long-term equity ratio of 25 per cent, with a minimum short-term level of 20 per cent.

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Namnlöst-1 3 04-03-19, 14.34.54 Cyanblå (processfärg)Magentaröd (processfärg)Gul (processfärg) Svart (processfärg) 2003 in summary

• Profi t before tax amounted to SEK 485 (452) m; profi t after tax was SEK 745 (322) m, or SEK 39.30 (17.00) per share. • Proposed dividends are SEK 13.00 (12.00) per share, an 8 (14) per cent increase. • Rental revenues and operating surplus grew by 7 (24) and 4 (28) per cent respectively to SEK 1,376 (1,291) m and SEK 850 (818) m respectively. • In the year, 77 (67) properties were disposed of generating revenues of SEK 1,334 (880) m, and 70 (42) acquired for a value of SEK 2,913 (1,289) m. • The forecast for the fi nancial year 2004 is for profi t before tax of SEK 500 m.

Kungsleden has a dual focus: property trading and management. At year-end, its property yield was 8.3 (8.6) per cent net of property administration. Property disposals in the year contributed to increasing the property portfolio’s yield by 0.2 percentage points, while acquisitions exerted a negative 0.3 percentage point contribution. Property administration exerted a negative contribution of 0.2 percentage points, mainly due to fairly downbeat conditions early in the year and increased energy prices. In the short term, it has been impossible to compensate for cost increases by increasing rents. However, revenues pro- gressed well, without exhibiting negative tendencies.

Acquisitions Disposals Property trading

70 properties 77 properties Disposals SEK 2,913 m SEK 1,334 m profi table 60 properties SEK 204 m loss-making 17 properties SEK –29 m 7.8% property 5.8% property sales administration SEK –24 m yield yield profi t= SEK +151 m

Earnings capacity 2002 2003 Operating surplus SEK 871 m SEK 1,025 m Property yield 8.6% 8.3% –Acquisitions and disposals –0.1% –Management of properties owned for the full year –0.2% –Value adjustment – Fewer municipalities 123 110 Higher value per property SEK 23.6 m SEK 29.1 m

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1-19.indd 4 04-03-23, 08.12.43 Cyanblå (processfärg)Magentaröd (processfärg)Gul (processfärg) Svart (processfärg) Questions about Kungsleden

What, actually, makes Kungsleden whose composition makes a difference to performance. In different from other property companies? simple terms, you could probably say that in our sector, We focus exclusively on risk-adjusted returns, or in other words, companies with NAV premiums possess organisational we constantly strive to enhance the risk/return relationship. resources that are perceived to create value, while those with This means we want to increase yields if this doesn’t increase a NAV discount, have resources considered to reduce risk, or reduce risk as long as returns do not suffer. Thus, our property values. prime considerations are what we expect to earn on prop-

erties, and the risks we take, rather than the type of property Why isn’t Kungsleden quoted on the Stockholm we own, or its location. Stock Exchange Attract 40 list any more? The Stockholm Stock Exchange has stated a number of During the year, you were a net buyer of properties criteria that determine the shares to be included on the Attract —does size matter in your sector? 40, and one of these is rate of turnover, or how many shares No, there’s nothing to say that a big company is better than a changed hands on the Exchange. In this context, it’s worth small one, although there may be a minimum threshold for remembering that rate of turnover is measured as a maintaining effi cient organisational resources. Of course, there percentage of the number of shares. For Kungsleden’s part, is also a risk that if you get too big, bureaucracy increases at trading in terms of numbers of shares each day has been the expense of effi ciency. For our acquisitions, we think these stable, and with our rising share price, turnover in absolute deals have made us more effi cient, while also reducing risk. fi nancial terms has increased. The explanation for But as long as we can do good deals, we can invest the 50 Kungsleden’s exclusion from this list is that a number of other per cent of net profi t we don’t pay out as dividends. If we are shares increased their turnover more, ‘overtaking’ us. unable to do these deals—that means generate at least the 15

per cent we’ve declared as our return on equity target—we Will you be increasing dividends now may increase our dividend pay-out ratio. that your dividend yield has declined? Kungsleden’s dividend policy has never been linked to its But you acquired properties in Malmö and Helsingborg, shares’ dividend yield, or dividends divided by share price. in southern Sweden, with property yields of 8.0 per cent, The fact that this parameter has reduced has nothing to do when your objective is 8.5 per cent, how come? with declining dividends, either in absolute terms, or as a That’s true, our objective is to compose a portfolio with an share of EPS, but rather, is due to our share price increasing. average property yield of 8.5 per cent. In practice, though, this Our dividend policy dictates that dividends should be at least means we own properties that yield between 6 and 12 per 50 per cent of profi t after current tax, and that dividends cent. We’ve been looking for properties in this area for a long should be stable. time, because we perceive growth and bright prospects for property owners. We’re very pleased to be able to buy such Your profi ts haven’t been adversely affected by a weak attractive properties, at what we think are reasonable business cycle—will profi ts be hit when the rally comes? valuations. Because the package in question comprises many Kungsleden’s business concept is to own properties properties with broad diversity, the risk is low. If we consider generating high and stable property yields. And here, stability risk, liquidity—how easy it is to sell properties—is important. is the key concept. This means, Kungsleden’s variations This package includes properties that suit a broad array of should be modest in comparison with companies that, for buyers—anything from private individuals to multinational example, concentrate exclusively on major cities. We minimise institutions. In actual fact, we’ve never encountered such a our variations by maintaining broad risk diversifi cation across high interest as since we acquired these properties, and that’s our portfolio in terms of property types, geographical locations why we’re convinced that this acquisition will be able to and rental contract terms. Moreover, we ensure that no single generate plenty of good business opportunities in 2004. tenant generates an unacceptably high portion of our rents. In recent years, we’ve invested heavily in retirement home You have said before that having skilled and business- properties, which we perceive, enjoy low risk, because the driven organisational resources one of your key success factors. Doesn’t this mean, though, that a risk will arise if tenants are municipalities, and the rental contracts are long your resources cannot maintain quality levels? term. While it is probably true that when the cyclical upturn We think putting our organisation in the spotlight is comes, we probably won’t enjoy such a sharp upswing as the important—a building is no better, nor does it generate higher companies with a big city focus, a better business cycle will 5 yields, than the supporting organisation can achieve. certainly not mean Kungsleden’s profi ts reducing. Obviously, it is much more fun to work in an organisation

1-19.indd 5 04-03-23, 08.12.52 Cyanblå (processfärg)Magentaröd (processfärg)Gul (processfärg) Svart (processfärg) Chief Executive’s Statement

RECORD PROFIT IN HARD TIMES—AGAIN As for property trading, we noted slightly sharper competition in the year over attractive holdings. This competition is mainly I began my letter in last year’s Annual Report sourced from foreign investors attracted to portfolios focused as follows:“The prospects that our business, on Stockholm, although nowadays, rural holdings are also attracting more interest. We welcome more players on our and the property market generally, faced in market, because this means better liquidity, and if sustained 2002 were less than optimal. Our business high interest does lift property prices, this enhances our concept—owning and managing properties to prospects of turning over our current holding at attractive generate a high and stable property yield—was valuations. Another observation here is that in recent years, the market has become increasingly transparent, with more put to severe tests. Thus, we are delighted to people gaining access to better information on those holdings post record profi ts of SEK 452 m, a 19 per cent that may be changing hands. We also welcome these increase on 2001.” developments—a better-functioning market gives us new and more business opportunities. In fact, if we just swap out the years and profi t fi gures, I could As for more diversifi ed holdings—in terms of geography or begin this year’s statement in much the same way. Once property types, need for maintenance and size—most again, the prospects facing our business were far from companies still have a hard time matching Kungsleden’s perfect. But yet again, we demonstrated the worth of our capacity. The speed of our valuation, negotiation, and buying business concept. My letter last year was entitled ‘Record decisions are our key strength. But despite this, Kungsleden Profi t in Hard Times’, and in 2003, the climate was just as still has a documented track-record of buying wholesale and harsh. But nevertheless, despite harsh winds our profi ts were selling retail profi tably, i.e. being able to offer a quick deal for raised to SEK 485 m—our seventh consecutive annual profi t parties with diversifi ed holdings and then disposing of all our record. parts of such portfolios to, in many cases, local property At the risk of nagging, once again this year, I’d like to owners with more specifi c wishes. compare our position with 1997—our fi rst as a private Looking back at 2003, we made 77 property disposals for company. At that time, we owned SEK 1.8 bn-worth of an aggregate value of SEK 1.3 bn, and profi ts of SEK 151 m. properties, and generated a SEK 100 m operating surplus. We are particularly pleased with our disposals outside the Seven years later, our property portfolio value exceeds SEK Stockholm region. 12.3 bn, and our operating surplus is over SEK 850 m. On the acquisitions side, we increased our exposure to Like 2002, 2003 began with our sights set on assuring cash retirement properties by acquiring four properties with a value fl ows in anticipation of an improved business cycle, which of SEK 245 m. This business remains highly attractive with most forecasters expected after the midpoint of the year. This good tenants and long-term contracts, and accordingly, high year too, expectations are for a mid-year rally, but on this occupancy, and ‘despite this’ a highly attractive property yield occasion, in 2004. But such views do not direct our actions of 7.6 per cent. Moreover, our Retirement Homes business any more than we continue to assume we’ll have to grind out area has secured a tender to build and manage some 40 our profi ts. We don’t anticipate any rapid improvement, but apartments for the Municipality of Halmstad, in south-west we know we’ve created a stable business model and skilled Sweden. This is notable, because it demonstrates that our organisational resources capable of dealing with a protracted business concept of accumulating specifi c know-how in recession. retirement homes has paid off in a public tender. We are now As in previous years, we boosted our operating surplus in not only perceived as competitive in terms of rental costs, but the year by working methodically on reducing vacancies and also as a valued partner in this specialised form of property cutting costs. Even in an adverse business cycle, we kept our ownership. vacancies stable, and actually reduced rental losses somewhat. Additionally, late in the year, we acquired a major portfolio Operating costs were also stable, and the same applies to our from fellow sector player Drott, focused on the southern rent levels, with the exception of Stockholm, where some Swedish cities of Malmö and Helsingborg. Of a total value of deterioration is apparent. SEK 2.2 bn, over 75 per cent of these properties are located centrally in these two cities, and generate very attractive property yields. 6

1-19.indd 6 04-03-23, 08.12.58 Cyanblå (processfärg)Magentaröd (processfärg)Gul (processfärg) Svart (processfärg) Chief Executive’s Statement

We also fi ne-tuned our organisational resources in the year, with Retirement Homes becoming an autonomous region headed up by Göran Linder, who joins our corporate management. We have also appointed Lars Thagesson as our COO, which will give me more time to work on major transactions, and build relationships with our shareholders and the rest of the capital market. From attracting limited interest after our IPO, our share is now the subject of progressively growing attention from analysts and fund managers, not forgetting our 13,000 private investors. Interest in Kungsleden is also apparent in our robust share price performance of recent years—since our IPO, we’ve delivered an annual total yield of over 33 per cent. The uncertainties going into 2004 are at least as sizeable as ahead of 2003, and consequently, we are continuing to prioritise the continued divestment of commercial properties and the acquisition of retirement homes. If the price of commercial properties declines so that yields rise, we will also make acquisitions, albeit subject to great caution. The pro forma accounting of our current holding reveals high earnings, and once again, we hope to top off our business with profi table property dealings. Our forecast for 2004 is for profi t before tax of SEK 500 m, which given our dividend policy, would imply a minimum dividend of SEK 13 per share. Our ambition is to generate sustainable dividends in absolute terms.

Jens Engwall Chief Executive

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Namnlöst-1 7 04-03-19, 14.35.06 Cyanblå (processfärg)Magentaröd (processfärg)Gul (processfärg) Svart (processfärg) The share and shareholders

The share price rose by 33.1 per cent in 2003; Dividend policy total yield on the share was 41.4 per cent. In The Board of Directors’ ambition is to maintain stable dividends, with a high pay-out ratio. This policy stipulates dividends of at the same period, the SIX Return Index yielded least 50 per cent of profi ts after current tax. For the fi nancial 34.2 per cent. year 2003, the Board proposes dividends of SEK 13 per share, equivalent to a dividend yield of 6.7 per cent in terms of the Market capitalisation and turnover closing price at year-end 2003. Kungsleden’s share has been quoted on the Stockholm Stock Exchange since 14 April 1999. The closing price on 30 Dec- Analyst monitoring ember 2003 was SEK 193, equivalent to market capitalisation The following fi nancial analysts monitor Kungsleden on an of SEK 3,660 m. A total of 12.1 million shares were turned ongoing basis: over, equal to 64 per cent of the total number of outstanding Bernd Stahli Fredrik Skoglund shares. The year low and high were SEK 121.50 and SEK 204 Merrill Lynch London Carnegie respectively. Against the closing price at year-end 2002 of +44 (0)207 996 1205 +46 (0)8 676 88 00 SEK 145, the share price rose by 33.1 per cent. Dividends Christian Roos Tobias Kaj paid were SEK 12, implying total a total yield of 41.4 per cent. Alfred Berg Swedbank Markets Average total yields over the last fi ve years have been 33.1 per +46 (0)8 723 58 00 +46 (0)8 585 900 00 cent. In 2003, the CREX (Carnegie Real Estate Index) gained 34.2 per cent, while the SAX (Stockholm All-share Index) Fredrik Grevelius gained 29.8 per cent. ABG Sundal Collier +46 (0)8 566 286 00 Share capital

At year-end, Kungsleden’s share capital was 47,396,550 divided between 18,958,620 shares, each with a nominal amount of SEK 2.50. Each share has one vote and confers equal rights to participation in the company’s assets and profi ts.

Shareholders Kungsleden had some 13,500 shareholders as of 31 Dec- ember 2003, unchanged since the previous year. At the time of its IPO, it had approximately 1,700 shareholders. At year- end, the ten largest shareholders controlled 19.1 per cent of the capital and votes. Private investors constituted 55.5 per cent of the total, and foreign owners, 18.1 per cent.

Share capital history No. of Aggregate Increase Aggregate Nominal new no. of in share share value per Timing Action shares shares capital, SEK capital share Aug 1997 Incorporation 1,000 1,000 100,000 100,000 100 Nov 1997 Split 20:1 19,000 20,000 – 100,000 5 Nov 1997 New issue 230,000 250,000 1,150,000 1,250,000 5 Nov 1997 Issue of convertible subordinated debenture – – – – – Dec 1997 New issue 3,750,000 4,000,000 18,750,000 20,000,000 5 July 1998 New issue 2,400,000 6,400,000 12,000,000 32,000,000 5 July 1998 Issue of subordinated debenture – – – – 2.50 March 1999 Split 2:1 6,400,000 12,800,000 – 32,000,000 2.50 March 1999 Conversion of subordinated debenture 2,758,620 15,558,620 6,896,550 38,896,550 2.50 April 1999 New issue 3,000,000 18,558,620 7,500,000 46,396,550 2.50 Dec 2000 New issue 400,000 18,958,620 1,000,000 47,396,550 2.50

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1-19.indd 8 04-03-23, 08.13.03 Cyanblå (processfärg)Magentaröd (processfärg)Gul (processfärg) Svart (processfärg) The share and shareholders

The share Kungsleden SX All-Share Index Share turnover, 000s, SEK Carnegie Real Estate Index (including after-hours trading) 225 200 175 150 125 2500 100 2000

75 1500

1000

50 500

40 1999 2000 2001 2002 2003 (c) SIX

Total yield

SEK The share (including dividends) SIXRX 300 250

200

150

100

50

40 1999 2000 2001 2002 2003 (c) SIX

Shareholders as of 31 December 2003 Shareholder No. of shares % of vote and capital SHB/SPP Mutual Funds 883,885 4.7 Olle Florén with companies 454,500 2.4 Crafoord Foundation 442,000 2.3 Ing Bewaar Maatschappij BV 310,000 1.6 Swedish Red Cross 300,000 1.6 Baltic Foundation 260,000 1.4 SEB Mutual Funds 252,650 1.3 Board anf management 246,800 1.3 State Street Bank 243,530 1.3 BQ Generale du Luxembourg 227,538 1.2 Total, 10 largest shareholders 3,620,903 19.1 Foreign shareholders, other 2,659,619 14.0 Other shareholders 12,678,098 66.9 Total 18,958,620 100.0

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Namnlöst-1 9 04-03-19, 14.35.09 Cyanblå (processfärg)Magentaröd (processfärg)Gul (processfärg) Svart (processfärg) Organisational and human resources

Ultimately, Kungsleden’s capacity to realise The service functions are located at the head offi ce, although its business concept, vision and strategy some staff are stationed at the Gothenburg regional offi ce. Accordingly, the service functions are independent of the rests on the professionals that compose its geographical location of properties, and have the prospect of organisational resources. This organisational attracting specialist staff. capacity is vital to a company like Kungsleden. A transaction-intensive working environment Business control model Kungsleden continued the implementation of its business necessitates fl exible staff that are adaptable and control model in 2003, which includes a goal-orientation guided by professionalism and skill. program that replaces the traditional budget process. In corporate and academic contexts, the process of establishing ORGANISATIONAL RESOURCES fi xed budgets often becomes ineffi cient, partly because it is Kungsleden effected a re-organisation in January 2004, resource intensive and partly because when updated, pre- creating the position of Chief Operating Offi cer. The COO will determined goals are often rendered irrelevant by altered be responsible for all Kungsleden’s regions, and will run the conditions. Moreover, profi tability tends to be assigned group’s day-to-day business, i.e. property management and subordinate signifi cance in budget contexts. Accordingly, trading. The Retirement Homes business area has become an Kungsleden has instead opted to pursue a more dynamic autonomous region, whose manager has joined Kungsleden’s control model based on rolling forecasts and moving corporate management. objectives. In this manner, fi nancial information is generated Thus, after the reorganisation, Kungsleden consists of four on an ongoing basis, that considers exogenous factors. The regions, each responsible for its property holding. Each region intention is to create better prospects for our professionals to is responsible for the management, rental and sale of prop- reach business decisions. Our ambition is for staff at all levels erties. Accounting, fi nance, legal, HR and IT issues are to become more effective at performing their individual tasks, handled centrally. thereby contributing to further enhancing Kungsleden’s Kungsleden’s South and West regions are managed from profi tability. regional offi ces in Malmö and Gothenburg respectively. West region also includes three local branches in the cities of HUMAN RESOURCES Jönköping, Trollhättan and Växjö. Region East and the Kungsleden’s staff work either on property management or Retirement Homes region are located at Kungsleden’s head administration. Those in property management work on local offi ce in Stockholm. East Region also has local branches in markets, and harbour sizeable know-how regarding property Karlstad and Västerås. management and of the players on their local property and rental markets. They are also highly familiar with the conditions and development potential of such players and markets. A CEO businesslike approach and fl exibility are key concepts in the function of our property management activities, in enhancing Kungsleden’s property holding and working methods. Analysis COO CFO Primarily, administration staff operate centrally within our organisational structure, and possess know-how with a specifi c orientation on various over-arching group issues. Region West Region South Region East Region Service Service and specialist skills are the central concepts of the Retirement functions Homes Accounting administration function’s work in supporting property Jönköping Finance management, collaborating with this function to continuously Legal Trollhättan Västerås improve Kungsleden’s working methods and to bear HR Växjö Karlstad responsibility for the observance of legal requirements.

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1-19.indd 10 04-03-23, 08.13.11 Cyanblå (processfärg)Magentaröd (processfärg)Gul (processfärg) Svart (processfärg) Organisational and human resources

At year-end 2003, Kungsleden had 90 (81) full-time Appointments – salaried employees employees of which 79 (71) were salaried employees. Apart No. 80 from these salaried employees, 11 (10) janitors were also 70 employed at this time. Wherever possible, Kungsleden out- 60 sources external property services, often on a local basis. The 50 following fi gure illustrates the division of salaried employees 40 30 between property management and administration, and the 20 split between men and women. The staff headcount in prop- 10 0 erty management has increased to 51 (45), and in adminis- Total Property Administration tration, to 28 (26). The proportion of women is slightly higher Management than men within administration, while the reverse applies Women Men within property management. At year-end, 45 (48) per cent of

all staff were women. Average age – salaried staff The average age of salaried employees was 41 (40), and Year lower among women than men. A review of the age distribution 50 reveals that women constitute the clear majority of salaried 40 employees under 40, while consequently, men comprise the 30 larger share aged over 40. Of all staff, 56 (56) per cent were 20 40 or older. 10

Overall, these age-related statistics indicate that the corpor- 0 Total Women Men ation has a healthy diversity of younger and more mature staff, 2003 2002 with varying age and experience. The following diagram illus- trates the employment term of our salaried employees. Of our

salaried employees, 39 (32) have worked within Kungsleden for Age distribution – salaried employees four years or more, 28 (28) between one and three years and No. 30 the remaining 12 (11) for less than one year. 25 20 15 10 5 0 up to 3030–39 40–49 50 or older Women Men

Length of service– salaried employees No 40 35 30 25 20 15 10 5 0 up to 1 year 1–3 year 4 years or more Women Men

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Namnlöst-1 11 04-03-19, 14.35.13 Cyanblå (processfärg)Magentaröd (processfärg)Gul (processfärg) Svart (processfärg) Organisational and human resources

Jens Engwall Johan Risberg

Lars Thagesson Benny Ivarsson

ran LinderEskil Lindnér Göran LinderEskil

MANAGEMENT

Jens Engwall. Born in 1956. Chief Executive. With Kungsleden since 1993. Holding in Kungsleden: 140,000 shares.

Johan Risberg. Born in 1961. Deputy Chief Executive, Chief Financial Offi cer. With Kungsleden Åke Kaur since 1996. Holding in Kungsleden: 80,000 shares.

Lars Thagesson. Born in 1959. Chief Operating Offi cer, with Kungsleden since 1993. Holding in Kungsleden: 0 shares.

Benny Ivarsson. Born in 1955. Göran Linder. Born in 1968. Regional Director West, with Kungsleden since 1999. Regional Director Retirement Homes, with Kungsleden since 1998. Holding in Kungsleden: 5,600 shares Holding in Kungsleden: 0 shares

Eskil Lindnér. Born in 1959. Åke Kaur. Born in 1955. Regional Director South, with Kungsleden since 1999. Regional Director East, with Kungsleden since 1998. Holding in Kungsleden: 5,400 shares Holding in Kungsleden: 0 shares

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Namnlöst-1 12 04-03-19, 14.35.14 Cyanblå (processfärg)Magentaröd (processfärg)Gul (processfärg) Svart (processfärg) Organisational and human resources

Bengt Kjell Mats Israelsson

Jonas Nyrén

Per-Anders OvinAnna Weiner Jiffer Jens Engwall

BOARD AND AUDITORS

Bengt Kjell. Born in 1954. Per-Anders Ovin. Born in 1956. Chairman. Senior Vice President of AB Industrivärden. Board member since B.Sc. (Econ.). Board member since 2003. Other Board assignments: 1996. Other Board assignments: Pandox AB, Pukslagaren AB (HD/NSD), Stockholmsbörsen AB, Capona AB, Catella Property Group, EDX Ltd. Munters AB and Össur HF. Holding in Kungsleden: 0 shares. Holding in Kungsleden: 10,000 shares. Anna Weiner Jiffer. Born in 1971. Mats Israelsson. Born in 1940. Chief Executive of biotech enterprise Ellen AB. Board member since 2003. Active through his own consulting practice. Board member since 1993. Other Board assignments: Serendipity AB and Connect Väst AB. Other Board assignments: Castellum AB, Akademiska Hus i Stockholm AB, Holding in Kungsleden: 0 shares. Atrium Fastigheter AB, Veidekke Bostad och Fastighet AB and Forsen Projekt AB. Jens Engwall. Born in 1956. Holding in Kungsleden: 4,000 shares. Chief Executive, with Kungsleden since 1993. Other Board assignments: Fastighetspartner NF AB. Jonas Nyrén. Born in 1951. Holding in Kungsleden: 140,000 shares. Deputy Chief Executive and Chief Financial Offi cer of Bonnier AB. Board member since 2001. Other Board assignments: TV4 AB, Frango AB, SkandiaBanken AB, S4K (Searching for Knowledge), Dagens Industri AB and others. Holding in Kungsleden: 3,000 shares. Auditors Auditor Deputy Auditor 13 Thomas Thiel. Born in 1947. Björn Flink. Born in 1959. Authorised Public Accountant, Authorised Public Accountant, KPMG. KPMG.

Namnlöst-1 13 04-03-19, 14.35.20 Cyanblå (processfärg)Magentaröd (processfärg)Gul (processfärg) Svart (processfärg) Environmental audit

Kungsleden’s environmental efforts will: Kungsleden aims to realise the company’s vision: by means of • Proceed on the basis of prevailing environ- skilled entrepreneurship and a high level of expertise, Kungs- leden will become Sweden’s most profi table and successful mental legislation and its staff’s high levels of property company. expertise to create a profi table and environ- mental property holding on market terms; Environmental efforts in 2003 Kungsleden clarifi ed the profi le of its environmental efforts in • To focus on the continual minimisation of the the fi nancial year 2003. A number of focus groups were environmental burden coincident with the arranged in the year, with an environmental theme. These management and refi nement of its property groups within energy, tendering, contracts, offi ces, markets, holding; technology and the environment, have produced action-plans that form the basis for ongoing environmental efforts. All • Be an integrated and goal-oriented part of property management teams convened at an environmental business. conference in the year to exchange best practice on environ- mental issues, with all property management teams partici- Kungsleden’s environmental objectives are revised and made pating in an environmental audit pursuant to the ‘Environmental progressively more stringent, keeping pace with the realisation Status for Buildings’ standard in parallel with these efforts. of previous objectives, and new issues coming into focus. In Each management team has audited one property, thereby general terms, Kungsleden’s objectives imply that consistently, putting the management of environmental risks in properties the environmental consequences of its actions will be consid- into practice. ered in day-to-day efforts and in the development of its prop- erty holding. Overall central objectives for 2004–2006 The objective of environmental efforts is for committed staff As part of its consistent environmental efforts, Kungsleden has to view environmental issues as an integrated part of their formulated a number of overall objectives for its operations day-to-day efforts. Kungsleden’s business concept is to own until 2006. and manage properties with high and stable long-term 1 Cut energy consumption (heating and electricity) in its prop-

returns. Returns are more important than property type or erties so that airborne CO2 emissions reduce. Kungsleden geographical location, and Kungsleden creates high and either has, or is introducing, routines to read, report and stable returns by owning properties that generate a high yield measure energy consumption, and to prioritise a range of in relation to their risk. Thus environmental initiatives are a self- energy-saving measures with retained or improved comfort evident part of its business concept. for its tenants. By constantly improving its environmental know-how, Kungs- 2 To encourage functional waste sorting solutions in properties leden can refi ne its property portfolio, and thereby offer its to increase recycling and reduce the wastage of resources. tenants environmental and profi table solutions. As a transaction- 3 To direct goods and services procurement towards the intensive business, managing environmental risks to avoid further alleviation of the environmental burden. ecological damage in its property portfolio as far as possible. Kungsleden constantly pursues improvements to alleviate the adverse environmental impact it generates by offering the best possible technology and sustainable properties and, from an environmental perspective, the optimal technology and most sustainable properties at the rate and extent its tenants demand. The success factors for its environmental initiatives are the knowledge and commitment of its staff, plus the ambition to actively gather and disseminate environmental knowledge. Simultaneous with minimising the hazardous environmental impact of business, Kungsleden will also satisfy its quality, working environment and competitive standards. Through Kungsleden’s environmental policy, the company 14 strives to reduce the environmental impact when properties are aquired and managed. Further, through this policy,

1-19.indd 14 04-03-23, 08.13.31 Cyanblå (processfärg)Magentaröd (processfärg)Gul (processfärg) Svart (processfärg) The property holding and earnings capacity

As of 31 December 2003, the holding Sweden, Kungsleden acquired one industrial and warehousing comprised 423 (430) properties with a book property with a book value of SEK 49 m and an estimated property yield of 12.5 per cent. value of SEK 12,336 (10,130) m. Total lettable A number of the isolated acquisitions of properties used as fl oor-space was 1,962,000 (1,838,000) sq. retirement homes were additional. Hemsö Äldreboende AB m. with aggregate rental value of SEK 1,681 acquired one property in Järfälla, near Stockholm, for SEK (1,454) m. 130 m. This property was renovated and extended in 2002, and comprises over 7,000 sq. m. of modern retirement homes THE PROPERTY HOLDING with rent of SEK 11.8 m including interest subsidies. This prop- Property trading erty is let to the Municipality of Järfälla with a 20-year contract Property market liquidity remained healthy in 2003, which term. In Norrköping, south of Stockholm, Kungsleden acquired corroborates Kungsleden’s perception that good transactions the property designated Diademet 3 for SEK 34.3 m. This are possible in a recession, on the buy and sell sides. In terms property has a fl oor-area of 3,600 sq. m. and generates of volume, property trading in the year was more extensive annual rental revenues of SEK 3. m. This property is let to the than the previous year. These transactions contributed to Municipality of Norrköping and comprises 66 retirement home raising the quality of the property holding, while the stability of apartments. Additionally, Kungsleden acquired the property property yields has been enhanced. designated Gothenburg Backa 866:836, for SEK 40.2 m. This property has an area of 6,400 sq. m., generating annual rental

Acquisitions revenues of SEK 5.0 m. This property comprises 76 apartments There were 70 (42) acquisitions in the year for SEK 2,913 intended as retirement homes, and is rented by Riksbyggen (1,289) m, including the acquisition of 44 properties from Drott Serviceboende AB and the Municipality of Gothenburg. Further for a total of SEK 2.2 bn, with SEK 1.6 bn in Malmö and SEK property acquisitions included the property designated Nacka 0.6 bn in Helsingborg, southern Sweden. This holding Mensättra 26:1, east of Stockholm, for SEK 37.1 m, expected comprised 201,000 sq. m., of which 193,000 sq. m. was to generate a property yield of SEK 8.0 per cent. This property commercial fl oor-space. The operating surplus was SEK 175 has a fl oor-area of 2,000 sq. m., and generates annual rental m, with vacancies at about 7 per cent. Kungsleden took revenue of SEK 3.6 m including interest subsidies. The prop- possession of the properties on 30 December 2003. Over 75 erty comprises 36 apartments intended as retirement homes. per cent of this portfolio is located centrally in Malmö and The tenant is Care Partner AB, and the rental contract runs to Helsingborg, and overall, this transaction generated an 30 November 2005. In collaboration with the Municipality of annualised contribution to profi t before tax of approximately Halmstad, Kungsleden will be constructing retirement homes SEK 70 m. of some SEK 3,000 sq. m. These homes will be built in 2004/ Kungsleden also acquired 17 warehouse properties for SEK 05 with scheduled completion in summer 2005. The tenant 250 m, at a property yield of 10.5 per cent. The vendor was after completion will be the Municipality of Halmstad with a UK real estate company Ashtenne Holdings PLC, which is contract term of 20 years. Rents are set by the determined quoted on the London Stock Exchange. Total fl oor-space was production cost, estimated at approximately SEK 50 m. Yields 51,000 sq. m., with Kungsleden taking possession on 1 are consistent with Kungsleden’s other retirement homes. September. Of property values, 80 per cent was located in major growth regions, and the majority of these properties are Disposals concentrated on southern and central Sweden. All properties Disposals of properties prioritised for sale contributed to are rented by electrical goods wholesaler SELGA on long-term enhancing the property holding’s composition, and either contracts, generating annual rental revenues of SEK 27.7 m. related to smaller, non-prioritised properties with low property In Mölndal, southern Sweden, Kungsleden acquired two yields, or properties whose market values had increased to the properties for SEK 134 m, at a property yield of approximately extent that their implicit property yields were less than Kungs- 9.5 per cent. These properties include industrial, offi ce and leden’s portfolio risk and return criteria. A total of 77 (67) prop- retail accommodation totalling 19,600 sq. m. at annual rent of erties were disposed of for SEK 1,334 (880) m. The disposals SEK 15.2 m. Kungsleden took possession on 1 April 2003. In generated profi ts of SEK 151 (136) m net of sales overheads. Örebro, west of Stockholm, Kungsleden acquired one Of all properties disposed of, 15 (12) were located in munici- palities with populations of less than 25,000. industrial/warehouse property with a book value of SEK 20 m 15 and lettable fl oor-space of 9,200 sq. m. In Burlöv, southern

1-19.indd 15 04-03-23, 08.13.37 Cyanblå (processfärg)Magentaröd (processfärg)Gul (processfärg) Svart (processfärg) The property holding and earnings capacity

Property type EARNINGS CAPACITY A division of the property holding by type illustrates that in As of 31 December 2003, property yield was 8.3 (8.6) per 2003, the holding’s composition was largely consistent with cent including property administration. Explanations of the the previous year. Of total book value, offi ce properties progress of earnings capacity can be divided between two represented 53 (51) per cent, or SEK 6,609 (5,211) m. Largely, activities: property trading and property management. The the increase was due to the Drott acquisition. In absolute former exerts a positive impact on earnings capacity if terms, the book value of the retirement homes category properties disposed of have yields that are lower than, and increased to SEK 2,769 (2,184) m, although the book value acquired properties have yields higher than, average portfolio share of the total holding was at a consistent level with the yields. In terms of sales prices, the property yield of divested previous year, of 22 (22) per cent. This share of industrial and properties was 5.8 per cent, and accordingly, disposals in the warehousing properties was an unchanged 16 (16) per cent of year made a positive contribution. During the year, the book values, and represented 20 (20) per cent of rental estimated property yield of acquired properties was 7.8 per revenues. cent. This relatively low property yield has caused the portfolio average yield to decline, and this is due to the Drott package, Geographical location which was acquired at a property yield of 7.5 per cent late in The geographical spread of the property holding has continued the year, reducing earnings capacity. However, the constituent to concentrate on major city regions and large municipalities. properties, centrally located in Malmö and Helsingborg, are This is not due to any change in the company’s orientation, perceived to have risk below the portfolio average, and but rather, changes in pricing and markets, whereby new accordingly, the portfolio’s risk-adjusted return has increased. opportunities to do favourable transactions arise. One explanation for this view is that the properties are located Concentration on the major city regions of Stockholm, in the Öresund region. Generally, Greater Stockholm has been Gothenburg and the Öresund region increased to 74 (62) per more adversely affected by the recession than Öresund, and cent. After the Drott acquisition, the Öresund region is largest. this relationship is expected to persist in 2004. At year-end 2003, the property holding was located in 110 As a result of earnings capacity declining, a more accurate (123) municipalities. Property values in the largest 10 and 50 description of the underlying logic of the Drott acquisition may municipalities respectively increased to 65 (57) and 95 (92) per be appropriate. Kungsleden is ready, and wants, to acquire cent of total book value; 83 (79) per cent of the property relatively large, heterogeneous holdings today, because they holding was located in municipalities with populations of over create the right conditions to do good transactions tomorrow. 50,000, and 4 (5) per cent in municipalities with populations of The Drott acquisition is heterogeneous inasmuch as its type, less than 25,000. Less than 6 (7) per cent of total rental location and yield vary. Over time, Kungsleden will probably revenues were sourced from these properties. retain the high-yielding units and sell the low-yielding units,

16

Namnlöst-1 16 04-03-19, 14.42.03 Cyanblå (processfärg)Magentaröd (processfärg)Gul (processfärg) Svart (processfärg) The property holding and earnings capacity

whereupon the returns of the remaining holding will probably Municipalities in descending order of size rise. Moreover, individual transactions will generate trading 1–10 Malmö profi ts. Examples here include one of the package’s constitu- Stockholm ent properties, which was sold, effective 31 December 2003, Mölndal Gothenburg for an implicit property yield of 5.2 per cent, and profi t of SEK Helsingborg 15 m before sales overheads. Västerås Sollentuna The property management contribution to earnings capacity Uppsala has been faintly negative, although this was not due to any Huddinge Södertälje SEK 8,007 m, 176 properties, 64.9% erosion of revenues. In fact, the opposite is true, rental revenues 11–25 SEK 2,520 m, 82 properties, 20.4% continued to progress well without any negative tendencies. 26–50 SEK 1,250 m, 75 properties, 10.1% Rental values, vacancies, discounting and rental losses are 51–100 SEK 554 m, 78 properties, 4.5% making positive progress. Nevertheless, revenue gains have 101–123 SEK 4 m, 12 properties, 0.0% not fully offset the cost-increases that arose from a relatively 0 10203040506070% cold climate early in the year, and higher energy prices. The % of book value cost increases occurred in the fi rst half-year, with cost levels stabilising subsequently. The cost of heating, electricity and Geographical distribution Municipal populations property care outgrew revenues. Book value SEK 6,630 m, 53.7% The intention of property trading is to buy and sell the right >100,000 properties to ensure that risk-adjusted returns are as high as Öresund Greater 50,000– region Stockholm 99,999 SEK 3,662 m, 29.7% possible. Considering returns against risk to optimise the risk- 30.6% 28.8% 25,000– SEK 1,529 m, 12.4% adjusted return, i.e. to combine high yields and low risk is part 49,999 Greater of Kungsleden’s day-to-day efforts and one explanation for its gothenburg <25,000 SEK 514 m, 4.2% 14.7% Other 25.8% success. The Retirement Homes business area is a good 0 10 20 30 40 50 60 % Total book value SEK 12,336 m example in this context; its good yield levels, comparable with % of book value those obtained from offi ce properties, combined with low risk, mean that this business area has a high risk-adjusted return. Properties of the Industrial/warehouse type, with property Kungsleden’s geographical Kungsleden’s property categories yields of 10.5 per cent, also enjoy high risk-adjusted returns. presence in Sweden

To illustrate the property holding’s earnings capacity better Floor-space Floor-space North 1.1% than the Income Statement, a table of the holding’s earnings Central 11.1% Retail 6.3% Other 2.3% Retirement capacity by type and regional market follows on the next page. East 31.5% Homes 12.0%

West 23.7% Offices 44.3% Industrial/ South 32.6% warehouse 35.1% Total floor-space 1,962,000 m2 Total floor-space 1,962,000 m2

Book value Book value Central 7.1% North 0.7% Retail 5.5% Other 2.0% Retirement East 36.5% Homes 22.4% West 19.6% Offices 53.6% Industrial/ South 36.1% warehouse 16.5% Total book value SEK 12,336 m Total book value SEK 12,336 m

Rental value Rental value Central 8.8% North 0.8% Retail 6.4 % Other 2.2% Retirement East 35.0% Homes 17.4% West 20.9% Offices 17 53.5% Industrial/ South 34.5% warehouse 20.5% Total rental value SEK 1,681 m Total rental value SEK 1,681 m

1-19.indd 17 04-03-23, 08.14.00 Cyanblå (processfärg)Magentaröd (processfärg)Gul (processfärg) Svart (processfärg) The property holding and earnings capacity

Offices East South West Central North Total Number 40 86 31 20 6 183 Lettable fl oor-space, 000 sq. m. 248.5 315.4 231.0 69.4 6.1 870.3 Book value, SEK m 1,861.4 2,914.4 1,473.2 331.7 27.8 6,608.5 Rental value, SEK m 270.9 364.0 207.7 51.6 4.9 899.1 Rental revenues, SEK m 232.2 339.4 198.9 47.0 3.6 821.2 Operating surplus, SEK m 144.8 222.0 138.1 20.9 1.8 527.7 Economic occupancy, % 87.0 93.5 97.1 92.5 80.6 92.3 Property yield, % 7.8 7.6 9.4 6.3 6.7 8.0 Profi t margin, % 62.4 65.4 69.4 44.5 51.0 64.3 Retirement Homes East South West Central North Total Number 30 21 6 2 – 59 Lettable fl oor-space, 000 sq. m. 156.2 47.6 21.2 9.9 – 234.9 Book value, SEK m 1,887.4 527.0 248.1 106.9 – 2,769.4 Rental value, SEK m 200.4 54.5 25.2 12.1 – 292.2 Rental revenues, SEK m 200.7 54.5 25.0 12.7 – 292.8 Operating surplus, SEK m 147.6 37.8 16.8 8.8 – 211.0 Economic occupancy, % 99.9 100.0 98.2 100.0 – 99.8 Property yield, % 7.8 7.2 6.8 8.2 – 7.6 Profi t margin, % 73.5 69.4 67.4 69.2 – 72.1 Industrial/warehouse East South West Central North Totalt Number 24 42 26 11 5 108 Lettable fl oor-space, 000 sq. m. 180.7 227.6 153.7 112.6 13.8 688.4 Book value, SEK m 528.5 746.6 417.1 298.7 48.5 2,039.3 Rental value, SEK m 82.8 120.1 69.4 65.6 6.6 344.4 Rental revenues, SEK m 79.6 105.5 64.3 60.8 6.6 316.7 Operating surplus, SEK m 56.1 68.9 50.5 35.2 6.0 216.7 Economic occupancy, % 95.8 91.3 93.0 93.6 100.0 93.3 Property yield, % 10.6 9.2 12.1 11.8 12.4 10.6 Profi t margin, % 70.5 65.3 78.6 57.8 91.5 68.4 Retail East South West Central North Total Number 6 9 13 7 1 36 Lettable fl oor-space, 000 sq. m. 31.8 31.1 36.5 21.5 2.4 123.3 Book value, SEK m 222.2 156.8 179.9 114.4 9.0 682.3 Rental value, SEK m 33.6 26.7 31.1 15.8 1.6 108.7 Rental revenues, SEK m 31.2 25.9 27.8 14.9 1.6 101.3 Operating surplus, SEK m 16.8 15.6 12.7 8.1 0.6 53.7 Economic occupancy, % 93.1 98.1 88.7 97.9 100.0 93.9 Property yield, % 7.5 9.9 7.1 7.1 6.6 7.9 Profi t margin, % 53.8 60.1 45.7 54.4 38.3 53.0 Other East South West Central North Total Number 1 11 18 7 – 37 Lettable fl oor-space, 000 sq. m. – 17.4 23.3 4.1 – 44.9 Book value, SEK m – 115.2 96.1 25.4 – 236.8 Rental value, SEK m – 15.5 17.4 3.3 – 36.2 Rental revenues, SEK m – 13.8 16.0 2.8 – 32.7 Operating surplus, SEK m – 6.3 8.1 1.4 – 15.8 Economic occupancy, % – 90.7 92.7 86.7 – 91.3 Property yield, % –122.4 5.5 8.5 5.4 – 6.7 Profi t margin, % – 45.8 50.8 48.3 – 48.4 Total East South West Central North Total Number 101 169 94 47 12 423 Lettable fl oor-space, 000 sq. m. 617.2 639.2 465.6 217.5 22.3 1,961.8 Book value, SEK m 4,499.6 4,460.1 2,414.3 877.1 85.3 12,336.3 Rental value, SEK m 587.6 580.8 350.8 148.4 13.0 1,680.6 Rental revenues, SEK m 543.7 539.1 332.0 138.1 11.7 1,564.7 Operating surplus, SEK m 365.3 350.6 226.3 74.3 8.4 1,024.9 Economic occupancy, % 93.0 93.8 95.4 94.0 92.7 93.9 Property yield, % 8.1 7.9 9.4 8.5 9.9 8.3 Profi t margin, % 67.2 65.0 68.2 53.8 72.0 65.5

Greater Greater Öresund Geographical division Stockholm Gothenburg region Other Total Number 74 32 109 208 423 Lettable fl oor-space, 000 sq. m. 452.7 295.4 492.0 721.8 1,961.8 Book value, SEK m 3,558.6 1,819.0 3,772.4 3,186.2 12,336.3 Rental value, SEK m 448.4 248.0 467.4 516.8 1,680.6 Rental revenues, SEK m 415.0 240.2 436.9 472.6 1,564.7 18 Operating surplus, SEK m 279.1 168.9 299.3 277.6 1,024.9 Economic occupancy, % 92.9 97.5 94.5 92.4 93.9 Property yield, % 7.8 9.3 7.9 8.7 8.3 Profi t margin, % 67.3 70.3 68.5 58.7 65.5

Namnlöst-1 18 04-03-19, 14.35.49 Cyanblå (processfärg)Magentaröd (processfärg)Gul (processfärg) Svart (processfärg) Retirement Homes

Hemsö is Kungsleden’s retirement homes Expansion opportunities initiative; retirement home properties—with their Hemsö’s property holding currently comprises some 2.5 per cent of the total market, with municipalities, and their public long rental contracts, stable tenants and healthy housing corporations, easily the biggest property owners. mortgaging prospects—suit Kungsleden’s However, considerable new production with private backing is business concept well: owning and managing underway. There are good prospects of growing through the properties with sustainable high and stable new production of retirement home properties, but it is worth noting that the major need for new retirement homes will not returns. arise until 2020. Opportunities to acquire properties direct from municipalities largely depend on the required rates of The past year return they set on tax revenues. Some municipalities have In 2003, Hemsö acquired four retirement home properties with taken the policy decision that they want to own this type of an aggregate value of SEK 245 m. A retirement home for 45 property themselves, while others are receptive to diversity of residents in Skarpnäck, Stockholm, and one at Vallentuna, ownership. Hemsö’s view is that some sell-offs of retirement also near Stockholm, for 40 residents was also completed. home properties will occur now that a professional property Hemsö has initiated a collaboration with the Municipality of owner for this type of property is available. Halmstad relating to a retirement home for 48 residents, The Municipality of Halmstad is a good example, which in scheduled for completion in summer 2005. the autumn, evaluated private ownership against municipal During the year, the focus was on rationalising the technical ownership, and concluded that the former would be more operation of the retirement home properties, and to enhance advantageous. The result is that alongside the Municipality, knowledge on the new production and conversion of retirement Hemsö is designing and building retirement homes where homes. The object is for Hemsö to be the natural discussion Hemsö will be the fi nal property owner. partner regarding retirement home premises, on technical management issues or the new production of effi cient Threats retirement homes. Owning retirement property homes implies low risk, although Hemsö has identifi ed two risks to this business, one is that The property holding premises become obsolete as a consequence of changing At year-end, Hemsö had 59 retirement property home proper- standards for retirement home properties. The other is that ties with a book value of SEK 2,769 m. The property holding is central government introduces subsidies for new production, divided between cities as follows: and thereby, creates rent levels below prevailing levels. Hemsö minimises these risks by utilising long-term rental contracts Greater Stockholm SEK 1,383 m Malmö–Lund SEK 527 m and acquiring fl exible properties with good alternative usages. Norrköping–Linköping SEK 289 m To minimise its fi nancial risk, Hemsö has relatively long Greater Gothenburg SEK 248 m interest fi xing periods for funding these properties. At year- Uppsala SEK 216 m Västerås SEK 107 m end, Hemsö’s average interest fi xing period was 3.8 years.

At present, annualised rental revenues are SEK 293 m, average contract terms are just over 8 years. Just over 70 per cent of rental revenues are sourced from municipalities or county councils.

What makes a cost-effi cient retirement home? The biggest cost of running a retirement home relates to care; the cost of premises is only some 20 per cent of the total cost of a retirement home. Thus, creating a retirement home with a good working environment and accommodation that means working efforts can be effi ciently improved, is more important than minimising square metre rents. 19 Accordingly, one success factor when developing new retirement homes is to assure contributions from individuals with experience in various fi elds.

Namnlöst-1 19 04-03-19, 14.35.50 Cyanblå (processfärg)Magentaröd (processfärg)Gul (processfärg) Svart (processfärg) Financial overview

In 2003, a hesitant sentiment predominated Results with varying activity levels throughout the The actual fi gures for the year were better than the previous year, and exceeded the most recent forecast of SEK 475 m country; activity in Greater Stockholm remained before tax by SEK 10 m. Return on equity was 19 per cent slow; the rental market made negative progress before tax and 29 per cent after tax, which compares with declining rents and increasing vacancies. favourably to Kungsleden’s 15 per cent RoE target. However, Progress was better in other parts of the the actual property yield of 7.6 per cent, and 8.3 per cent in terms of earnings capacity, did not satisfy the 8.5 per cent country, where at worst, rents and vacancies objective. Both actual property yields, and in terms of earnings were unchanged. capacity, reduced late in the year, as a result of the relatively low-yielding Drott acquisition. THE PAST YEAR The operating surplus increased by SEK 32 m, despite Earnings capacity Kungsleden’s profi t margin declining from 63.4 per cent to The property holding is in continuous change so that at any 61.8 per cent. Profi t from property trading improved by SEK given time, Kungsleden’s earnings capacity is not refl ected 15 m. Administration costs increased by SEK 21 m. The net optimally by its Income Statement. Instead, earnings capacity fi nancial position deteriorated by SEK 10 m. The tax cost indicates the appearance of the Income Statement if the became a SEK 260 m revenue. property holding as of 31 December 2003 had been owned for the full year. The purpose of the illustration is to demon- Rental revenues strate the effect of changes to the property holding, and to Rental revenues amounted to SEK 798 (729) per sq. m. provide the optimal information on the current situation and Rental values were SEK 857 (793) per sq. m, and as a share earnings capacity. of rental values, vacancies, discounting and rental losses were 6.1 (6.4), 1.2 (1.3) and 0.1 (0.6) per cent respectively, indicating 31 Dec SEK/ 31 Dec SEK/ Earnings capacity, SEK m 2003 sq.m. 2002 sq.m. both positive progress and the robust state of the property Rental revenue 1,565 798 1,340 729 holding at year-end. Operating and maintenance costs –409 –209 –351 –191 Property tax –51 –26 –44 –24 The following table illustrates contract values, and contract Ground rent –13 –6 –13 –7 numbers divided between commercial, retirement home, Property administration –67 -34 –61 –33 residential and other contracts at year-end. The revenues from Operating surplus 1,025 523 871 474 these contracts are not consistent with rental revenues in Book value 12,336 10,130 Property yield, % 8.3 8.6 terms of earnings capacity, because this latter variable has Economic occupancy, % 93.9 93.6 been adjusted for supplementary billing, other revenues and Operating surplus, % 65.5 65.0 discounting. Contract values imply that rental levels in 2004, Floor-space, 000 sq.m. 1,962 1,838 after indexation, were some SEK 25 m higher than the earnings capacity indicates. Property trading in the year benefi ted earnings capacity; in terms of sales prices, those properties disposed of had a Contract value, SEK 000 Total value Contracts property yield of 5.8 per cent, and the estimated property yield Commercial SEK m % % No. % % of acquired properties was 7.8 per cent. This relatively low 0–499 269.5 22.0 2,409 82.8 500–999 172.7 14.1 245 8.4 property yield has reduced the portfolio’s average property 1,000–4,999 473.6 38.6 228 7.8 yield. Nevertheless, the acquired properties, primarily 5,000–9,999 147.4 12.0 21 0.7 comprising the Drott acquisition and retirement home >10,000 164.1 13.4 8 0.3 Total 1,227.3 100 80.5 2,911 100 46.9 properties, are considered to enjoy below-average risk, and Retirement Homes accordingly, portfolio risk-adjusted returns have increased. 0–499 11.6 5.1 135 69.2 The contribution of property management to earnings 500–999 6.2 2.7 9 4.6 capacity was negative, mainly due to a relatively adverse 1 000–4 999 111.2 49.2 37 19.0 >5 000 97.3 43.0 14 7.2 climate early in the year, and increased energy prices. These Total 226.3 100 14.9 195 100 3.1 cost increases occurred in the fi rst half-year, and subsequently, Residential 52.3 3.4 1,033 16.6 cost level stabilised. However, the cost of heating, electricity Other 17.8 1.2 2,074 33.4 Total 1,523.7 100 6,213 100 20 and property care outgrew revenues. In the short term, compensating cost-hikes through rental increases was not LM Ericsson and FöreningsSparbanken, Kungsleden’s largest possible. Nevertheless, revenues otherwise continued to tenants, represent 7 and 5.5 per cent of contract values progress well without any negative tendencies. If anything, respectively, spread over 59 and 203 contracts. The 15 vacancies, discounts and rental losses are tracing positive largest tenants represent 36 per cent of contract values. performance.

20-25.indd 2 04-03-23, 08.18.07 Cyanblå (processfärg)Magentaröd (processfärg)Gul (processfärg) Svart (processfärg) Financial overview

The 15 largest tenants have 416 contracts. The following table values per property were less than SEK 10 m. illustrates the distribution of contract maturities. Profi t effect of divested properties Sales, SEK m Profi t, SEK m No. Expiry Value, SEK m Prop., % Positive 1,079.1 203.9 51 2004 258.2 16.9 Zero 20.1 0 9 2005 241.8 15.9 Negative 235.1 –28.2 17 2006 318.2 20.9 Sales administration –24.2 2007 248.6 16.3 Total 1,334.3 151.5 77 2008 107.8 7.1 2009 48.8 3.2 2010 87.5 5.7 Sales administration also includes sales overheads, mainly 2011 71.3 4.7 transaction related, and principally comprising brokerage fees. 2012 29.7 2.0 >2013 111.8 7.3 Total 1,523.7 100 Central administration Central administration includes costs of the company’s Property costs management and central functions such as accounting, Kungsleden’s property holding is extensive and management fi nance, legal services, analysis and IT, as well as costs issues are securing progressively increasing signifi cance. The associated with stock market quotation. organisational resources sustained their focus on increasing management effi ciency, efforts that include continuous work Value adjustments on reducing property costs, achieved mainly through centralised Value adjustments in the year were SEK 44.9 (48.5) m. Write- tendering for energy, and the enhanced control of property care. ups, i.e. reversals of write-downs in previous years, were SEK Kungsleden’s properties are generally well maintained. The 31.6 m, and write-downs were SEK 76.5 m. The write-downs demand for premises is mainly positive, and the proportion of primarily concerned those properties where the tenant situation unoccupied fl oor-space in the property holding is lower than or other conditions on local markets implied a deteriorated previously, suggesting that the relative cost of tenant adaptations outlook for the properties. will not rise. Overall, this means that property costs cannot be expected to keep outgrowing infl ation. Net fi nancial position Operating and maintenance costs stood at SEK 409 (348) m, The progress of net fi nancial position is due to a larger average with operating costs comprising SEK 304 (256) m of this total, property holding, and the following circumstances. and maintenance costs, SEK 105 (92) m. A further SEK 119 (83) m was capitalised as investments in remaining properties, Adjusted net fi nancial position, SEK m 2003 2002 Accounted net fi nancial position –432.7 –422.9 while the new production of properties amounted to SEK 97 m. Freedom from interest received coincident Typically, ground rent has a 10–20 year term, and accordingly, with property acquisitions 0.0 –21.0 renegotiations are assessed to exert a limited impact on costs Renegotiated interest swap 0.0 17.0 Total –432.7 –426.9 from year to year. Revenues received from onward billing of property tax are The snap-shot interest level has declined from 6.06 to 4.97 per accounted under rental revenues and amounted to SEK 32 cent. The interest fi xing period declined from 3.14 to 2.58 years. (31) m. property administration cost SEK 67 (61) m, equivalent to 0.54 (0.60) per cent of book values. Property administration Tax comprises costs for ongoing property management including Tax for the year was infl uenced by the acquisition of tax-loss the costs of rental billing, renegotiations, rent demands and companies and by a revised assessment of temporary differ- accounting. The depreciation of equipment has been divided ences in shares in subsidiaries. The following table illustrates between three usage-related administrative classes. Kungsleden’s tax position at year-end 2003.

Property trading Temporary differences, SEK m During the year, 70 properties with a fl oor-space of 324,000 Properties –1,988.0 sq. m were acquired for SEK 2,913 m. These acquisitions were Shares in subsidiaries 1,503.9 Income tax (loss carry-forwards) 1,064.0 made at estimated property yields of 7.8 per cent. Meanwhile, Interest-bearing liabilities 19.6 77 properties were disposed of for a total of SEK 1,334 m, Total 599.5 21 and profi ts of SEK 151 m. The disposals were effected at a Deferred tax receivables 167.9 property yield of 5.8 per cent calculated in terms of property values. The prices received were SEK 88 m and SEK 46 m After such entities are liquidated, temporary differences in above internal and external valuations respectively effected as shares in subsidiaries are accounted as deductible losses in of 31 December 2002. For 46 of these properties, sales 2004, and subsequently transferred to temporary differences

Namnlöst-3 3 04-03-19, 13.31.25 Cyanblå (processfärg)Magentaröd (processfärg)Gul (processfärg) Svart (processfärg) Financial overview

in income tax. Proceeding from these values, loss carry- valuation including property inspections is performed on a forwards at year-end 2004 can be expected to amount to representative sample of properties in terms of type and SEK 2,568 m, reduced by taxable profi ts for 2004. location amounting to some 70 per cent of property values, New legislation was introduced in Sweden on 1 July 2003, every third year. For the intervening years, previous valuations allowing the divestiture of certain subsidiaries that are limited are updated, through what is termed a desktop valuation, on companies free of tax. By incorporating properties, this has all properties. However, comprehensive valuations are also also affected tax for 2003. This type of divestiture, which performed on all new properties and properties with special implies that temporary differences in properties can be circumstances. In 2003, and as of 9 December, Forum divested without any tax burden, can be expected to increase Fastighetsekonomi AB performed desktop valuations of those in the future, and accordingly, Kungsleden’s tax rate will properties owned for the full year. Comprehensive valuations probably reduce below 28 per cent. were performed on properties acquired in the year. Inherently, Kungsleden’s business is such that it is always Cash fl ow important to maintain an accurate perception of what each Cash fl ow from ongoing operations was SEK 673 (455) m. property is worth to Kungsleden, and how much its saleable Operating cash fl ow amounted to SEK 985 (795) m. The cash value would be. Accordingly, business plans and internal fl ow from investment activity was SEK –2,267 (–701) m, and valuations are highly signifi cant. As an element of the quality cash fl ow from fi nancing activity was SEK 1,471 (220) m. process, the relationship between internal and external More information is in Kungsleden’s Cash Flow Statement, valuations and realised sales prices is made on an ongoing and under Note 18. basis. Prices achieved in the year exceeded the previous year’s internal and external valuations by 7 and 4 per cent Sensitivity analysis respectively. Experience indicates that prices received are The sensitivity analysis in the following table illustrates how above internal and external valuations. Generally, internal operations are infl uenced by the primary variables, and is valuations are closer to prices achieved than external based on the situation as of 31 December 2003. valuations. The fact that in most cases, internal valuations

Profi t have at least as high quality as external valuations is due to impact, the fact that Kungsleden is kept informed on other players’ Sensitivity analysis Change SEK m Rental revenue +/–1% 15.6 pricing assessments on an ongoing basis by its active Economic vacancy +/–1% percentage point 16.8 participation in the property market. Property costs +/–1% 4.1 As in previous years, Kungsleden is accounting its property Funding costs, upon changed interest level +/–1% percentage point 33.0 Average funding costs +/–1% percentage point 94.8 holding as current assets, with each individual property valued at the lower of cost or assessed market value. Actual value is PROPERTY VALUES an accounting term, which for properties, is synonymous with As of 31 December, the property holding had an internally market value. assessed actual value of SEK 13,291 (11,134) m and an Property values in summary, 2003 externally assessed actual value of SEK 12,989 (10,938) m. Retirement Industrial/ The internal valuation exceeded book value by SEK 955 Category, SEK m Offices homes warehouse Retail Other Total (1,004) m, and the external valuation exceeded book value by Book value 6,609 2,769 2,039 682 237 12,336 Internal valuation 6,795 3,128 2,349 750 269 13,291 SEK 653 (807) m. External valuation 6,832 2,882 2,245 764 266 12,989 Internal valuations are the most signifi cant to Kungsleden and are an integrated element of its business process. Every Market Area, SEK m East West South Central North Total Book value 4,500 2,414 4,460 877 85 12,336 property has a business plan, updated at least annually, and Internal valuation 4,928 2,662 4,634 971 96 13,291 includes internal valuations, the most recent external valuation, External valuation 4,584 2,517 4,811 971 106 12,989 a statement of standpoint and an action-plan for the measures considered to optimise the property’s operating net and value. FUNDING Principally, the statement of standpoint and internal valuation The bond market in 2003 calculation are based on a present value calculation with a Like 2002 and 2001 to, the bond market featured sizeable fi ve-year forecast period and the external valuation as a fl uctuations in 2003. For long and medium yields, the spread comparison. 22 between highs and lows was some 140 basis points, and three- Kungsleden considers that out of ethical business consider- month yields moved some 100 b.p. downwards in the year. ations, external parties would expect internal valuations to be Early in the year, three-month STIBOR was around 3.9 per verifi ed externally. Accordingly, a comprehensive external cent, and at year-end, was around 2.9 per cent—a steady downturn without fl oating rates turning upwards to any sig- nifi cant extent in the year 2003. The downturn in short yields

20-25.indd 4 04-03-23, 08.18.08 Cyanblå (processfärg)Magentaröd (processfärg)Gul (processfärg) Svart (processfärg) Financial overview

is a consequence of the Swedish central bank, the Riksbank, A volume of SEK 300 (500) m of the bond issue quoted on the easing benchmark rates to the corresponding extent, due to Stockholm Exchange remains, which has been fully drawn its view of a further delay to the cyclical recovery. During the down. This issue matures in July 2005 and has a 9.75 per year, the Riksbank chose to exclude temporary price increases cent coupon. on electricity from its infl ation forecast, and accordingly, these changes had no impact on short interest rates. Liquidity Fixed yields are apparent in contexts such as fi ve-year interest As of 31 December 2003, available liquidity including an un- swaps, which at the beginning of the year were 4.55, and ended utilised committed credit facility, stood at SEK 158 m. 2003 at 4.42 per cent. In between, fi ve-year interest yields fi rst declined by over 100 b.p. to a record low of 3.47 in June, Interest fi xing strategy and risk management subsequently rallying through the autumn to 4.85 per cent in Kungsleden’s interest fi xing strategy is based on the view that November. even with a relatively high share of short interest fi xings in its Accordingly, the downturn in short yields that began in 2002 funding portfolio, Kungsleden can maintain a low risk level. caused by low expectations of cyclical recovery continued in This is achieved by a high share of the remaining fi xed-rate 2003. Market forecast late in the year generally indicated portion of its interest fi xings being extended with realisable sustained low short yields, and expectations of the Riksbank long-maturity interest swaps. This strategy has been com- easing its benchmark rate in early 2004 increased in late 2003. plemented with interest swaps in the 2–7 year segment, and by funding retirement homes with long fi xings. Kungsleden is Financial Policy continuing to monitor the fi nancial markets and is very Kungsleden’s Financial Policy establishes guidelines and prepared for further limiting its interest risk. Its interest fi xing regulations for conducting its funding activities. The Finance strategy is subject to continuous review, and is also intimately function is a group-wide activity responsible for group funding, linked to Kungsleden’s capital structure. Increased loan ratios liquidity planning and managing interest risk. Kungsleden’s may result in an adjustment of the fl oating interest portion of Board formulates the Financial Policy and stipulates how the the funding portfolio. At year-end 2003, the average interest various risks in the funding operation are to be limited. Moreover, fi xing period was 2.58 (3.14) years. the Board determines the division of responsibility and admin- istrative regulations, which mean that the Financial Policy offers Funding structure guidance to the efforts of Kungsleden’s Finance function. As of 31 December 2003, Kungsleden’s total assets The Financial Policy stipulates that the overall objectives of amounted to SEK 12,908 m, of which properties were SEK Kungsleden’s Finance function are: 12,336 m. The following table illustrates funding at year-end. • To ensure the company’s long and short-term access to capital; Interest fi xing period as of 31 December 2003 Interest maturity Loan, SEK m Prop, % Ave. int., % • To adapt Kungsleden’s funding strategy according to the 2004 4,760 50.2 3.78 company’s operations in order for a stable long-term capital 2005 650 6.9 6.03 structure to be achieved and maintained; 2006 450 4.7 5.96 2007 475 5.0 6.56 • To achieve the optimal net fi nancial position within the 2008 930 9.8 6.10 established risk limits. 2009 340 3.6 5.44 2010 1,375 14.5 6.49 Financing 2011 400 4.2 6.12 2012 100 1.1 5.05 During 2003, the volume of Kungsleden’s loan portfolio Total 9,480 100.0 4.97 increased from SEK 7,436 m to SEK 9,480 m. The volume expansion in 2002 primarily occurred through new funding Loan maturity structure as of 31 December 2003 agreements with Swedish banks and drawing down an Maturity Total, SEK m Prop., % 2004 1,747 16.5 existing syndicated loan facility. New funding is primarily 2005 4,650 43.8 attributable to retirement home properties and the Drott 2008 2,264 21.3 acquisition, late in the year. Moreover, amortisation was also 2009 925 8.7 2010 1,035 9.7 effected coincident with disposals, and accordingly, volume Total 10,621 100.0 expansion was confi ned to some SEK 2,045 m. The syndi- 23 cated loan agreement has been reduced to a total facility of FORECAST 2004 SEK 4,350 (4,850) m, while its drawn down portion increased The Board of Directors’ estimate is that profi t before tax will to SEK 3,600 (3,350) m at year-end. amount to SEK 500 m in 2004. In 2003, Kungsleden entered eight loan agreements for a total of SEK 2,279 m.

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FIVE-YEAR OVERVIEW

Summary Income Statement, SEK m Property management 1999 2000 2001 2002 2003 Earnings capacity Rental revenue 718 785 1,039 1,291 1,376 1,565 Operating and maintenance costs –237 –236 –294 –349 –404 –409 Property tax –32 –31 –45 –49 –42 –51 Ground rent –6 –8 –10 –13 –12 –13 Property administration –39 –49 –52 –62 –67 –67 Operating surplus 404 461 638 818 850 1,025

Property trading Sales revenue properties 1,021 390 1,057 880 1,334 Sales administration incl. overheads –19 –7 –16 –16 –24 Book value –875 –321 –941 –727 –1,158 Profi t property trading 127 62 100 137 152

Gross profi t 531 523 738 955 1,002

Central administrative costs –26 –21 –30 –32 –39 Value adjustments on properties –39 –47 –51 –48 –45 Operating profi t 466 455 657 875 918 Interest subsidies 6 2 1 0 2 Financial income 9 83 19 4 2 Financial costs –189 –223 –297 –427 –437 Profi t after fi nancial items 292 316 380 452 485 Tax costs –87 –88 –114 –130 260 Net profit 205 228 266 322 745

Summary Balance Sheet, SEK m Assets 1999 2000 2001 2002 2003 Fixed assets 281 176 56 15 196 Current property assets 5,272 6,487 9,477 10,130 12,336 Other current assets 115 154 260 140 372 Liquid funds 70 140 154 127 4 Total assets 5,738 6,957 9,947 10,412 12,908

Liabilities and shareholder’s equity Shareholders’ equity 1,983 2,092 2,188 2,310 2,828 Interest-bearing liabilities 3,519 4,115 5,966 7,461 9,480 Non-interest bearing liabilities 236 750 1,793 641 600 Total liabilities and shareholders’ equity 5,738 6,957 9,947 10,412 12,908

24

Namnlöst-3 6 04-03-19, 13.31.27 Cyanblå (processfärg)Magentaröd (processfärg)Gul (processfärg) Svart (processfärg) Financial overview

Key fi gures Property-related Earnings capacity 1999 2000 2001 2002 2003 Property yield, % 8.3 8.3 8.6 8.6 8.3 Economic occupancy, % 90.0 91.0 93.4 93.6 93.9 Profi t margin, % – – 63.5 65.0 65.5 Actuals Property yield, % 8.4 7.8 8.0 8.3 7.6 Economic occupancy, % 90.2 90.6 92.2 92.9 93.6 Profi t margin, % 56.2 58.6 61.5 63.4 61.8

Financial Return on total capital, % 8.9 8.5 8.0 8.6 7.9 Return on equity, % 12.2 11.2 12.4 14.3 29.0 Interest cover, multiple 2.7 3.3 2.4 2.1 2.1 Equity ratio % 34.6 30.1 22.0 22.2 21.9 Gearing, multiple 1.8 2.0 2.7 3.2 3.4 Mortgage ratio, % 66.7 63.4 63.0 73.4 76.8

Data per share Share price, SEK 77 92 117 145 193 Beta value – 0.05 0.04 0.43 0.05 Dividend, SEK 1 8.00 9.00 10.50 12.00 13.00 Total yield, % 24.2 29.9 37.0 32.9 41.4 Dividend yield, % 7.6 10.4 9.8 9.0 8.3 P/E ratio, multiple 6.4 6.6 6.9 8.5 4.9 P/CE ratio, multiple 3.1 2.9 3.4 4.9 4.1 Operating surplus, SEK 21.7 24.3 33.70 43.20 44.90 Profi t, SEK 11.00 12.00 14.00 17.00 39.30 Cash fl ow from operations, SEK 21.20 26.80 26.70 24.00 35.50 Shareholders’ equity, SEK 91.90 102.30 115.40 121.90 149.20 Property book value, SEK 281.80 342.20 499.90 534.30 650.70

Number of shares, closing balance 18,558,620 18,958,620 18,958,620 18,958,620 18,958,620 Average number of shares in the year 16,920,000 18,596,000 18,958,620 18,958,620 18,958,620

1 Proposed appropriation or profi ts for 2003

25

Namnlöst-3 7 04-03-19, 13.31.38 Cyanblå (processfärg)Magentaröd (processfärg)Gul (processfärg) Svart (processfärg) Financial reporting

REPORT OF THE DIRECTORS Overview Profit, SEK m Summarised comments Property management 2003 2002 Yet another year has seen Kungsleden’s business concept put Rental revenue 1,376 1,291 to the test in a hostile economic climate. Property trading is a Operation & maintenance costs –405 –349 central, essential component of Kungsleden’s business model, Property tax –42 –49 Ground rent –12 –13 and despite slow economic activity, disposals in the year Property administration –67 –62 generated healthy earnings and further enhanced the risk- Operating surplus 850 818 adjusted returns of the property holding. Acquisitions in the Property trading Sales revenues from properties 1,334 880 year also contributed in this context, mainly through the share Sales administration incl. overheads –24 –16 of properties in the Öresund region increasing, and the share Book value –1,158 –727 of retirement homes remaining unchanged as a result of new Profi t from property trading 152 137 Gross profi t 1,002 955 acquisitions. Overall, the business model passed this test with Central administration costs –39 –32 fl ying colours, corroborating Kungsleden’s view that it is Value adjustments on properties –45 –48 possible to do good business even when times are hard. Operating profit 918 875 Property management, the second component of the Interest subsidies 2 0 Financial income 2 4 business model, also helped lift profi ts through a SEK 32 m Financial costs –437 –427 operating surplus increase, although the profi t margin did Profi t after fi nancial items 485 452 decline somewhat. The year featured increasing property Tax 260 –130 Net profit 745 322 costs, which have not been possible to compensate through

rent increases in the short term. Nevertheless, there are good Cash flow, SEK m 2003 2002 prospects of property management increasing its compen- Operations 673 455 Investment activity –2,267 –701 sation rate and property administration effi ciency through Financing activity 1,470 220 economies of scale. Cash fl ow for the year –124 –26 Cash fl ow, opening balance 128 154 Signifi cant events in the fi nancial year Cash fl ow, closing balance 4 128 Kungsleden continued to consolidate its status as the leading retirement homes player in Sweden by acquiring more prop- As of 31 December 2003, Kungsleden’s equity ratio was erties. Retirement homes are expected to undergo very pro- 21.9 per cent, and its un-utilised credit facilities stood at SEK nounced growth over the next 30 years, particularly consider- 1,141 m. ing the demand arising from an ageing population. Apart from being a textbook example of a Kungsleden acquisition, the For more information, please refer to the fi nancial overview on acquisition of Drott properties also enhanced the balance of pages 20 to 25. the holding through a higher share of properties in the Öresund region. Board actions The Board of Kungsleden AB (publ) comprises six Directors and has been composed to support the management in its corporate development process actively and effectively. Moreover, the Board is intended to monitor and direct activities. In a listed corporation like Kungsleden, skills and experience in the following are signifi cant: • The property sector; • Funding; • Business development; • Stock exchange questions.

26

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Board actions follow the approved agenda and instructions stipulating the division of responsibility between the Board of Directors and Chief Executive, and the forms for fi nancial reporting to the Board. The Board considered issues such as Kungsleden’s external reporting, overall strategy, business plan, property acquisitions and disposals, investments in existing properties, raising loans and other funding issues, preparing sales mandates and incentives agreements. Kungsleden’s Board held seven scheduled meetings in the fi nancial year 2003; additional Board meetings were convened to consider property acquisitions and funding issues. The Board met on a total of 21 occasions. The Deputy Chief Executive and company lawyer, who is also the Board Secretary, are present at Board meetings. The company’s Auditors submit a personal report on their audit observations and their assessment of internal controls on an annual basis. The AGM appointed a Nomination Committee comprising Kungsleden’s Chairman, Bengt Kjell, as well as Ramsey Brufer of Alecta and Olle Florén. The Nomination Committee met on one occasion.

Proposed appropriation of profi ts The Board of Directors’ proposed appropriation of profi ts is stated on page 35.

Expected future progress Please refer to our forecast for 2004 on page 23.

Parent company Parent company profi ts were SEK 764 (298) m; liquid funds were SEK 0 (0) m.

Signifi cant events after the end of the fi nancial year In February, Kungsleden acquired four retirement home properties and one residential property in the Municipality of Finspång, west of Stockholm.

27

Namnlöst-5 27 04-03-19, 13.35.30 Cyanblå (processfärg)Magentaröd (processfärg)Gul (processfärg) Svart (processfärg) Financial reporting

INCOME STATEMENT

SEK m Group Parent company Property management Note 2003 2002 2003 2002 Rental revenue 1,376.2 1,290.6 – – Operation & maintenance costs –40.5 –348.5 – – Property tax –42.0 –48.6 – – Ground rent –12.4 –13.1 – – Property administration 1–3 –67.0 –61.9 – – Operating surplus, property management 850.3 818.5 – –

Property trading Sales proceeds, properties 1,334.3 879.6 – – Sales administration, incl. overheads 1–3 –24.3 –16.4 – – Book value of divested properties –1,158.6 –726.9 – – Profi t, property trading 151.4 136.3 – –

Gross profi t 1,001.7 954.8 – –

Central administration costs 1–3 –39.3 –31.5 –5.7 –5.7 Value adjustments 4 –44.9 –48.5 – – Operating profit 917.5 874.8 –5.7 –5.7

Profit from financial items Profi t from shares in group companies 5 – – 756.4 300.0 Interest income, etc. 2.3 4.4 98.9 51.8 Interest subsidies 1.7 – – – Interest costs, etc. –436.6 –427.3 –124.0 –50.4 Profit before tax 484.9 451.9 725.6 295.7

Tax 6 Current tax –22.8 –0.2 – – Deferred tax 283.1 –130.0 38.0 2.8 Net profit 745.2 321.7 763.6 298.5

Average number of shares 18,958,620 18,958,620 Profi t before tax per share 25.60 23.80 Profi t after tax per share 39.30 17.00 Proposed dividend per share 13.00 12.00

28

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BALANCE SHEET

SEK m Group Parent company Assets Note 31 Dec 2003 31 Dec 2002 31 Dec 2003 31 Dec 2002 Fixed assets Tangible fi xed assets Equipment, fi xtures and fi ttings 7 6.4 7.7 – –

Financial fi xed assets Shares in group companies 8 – – 1,704.7 1,230.5 Shares in joint ventures 9 – – – 25.0 Deferred tax receivables 10 167.9 – 128,4 90.3 Other long-term receivables 21.8 7.1 – 0.2 189.7 7.1 1,833,1 1,346.0 Total fixed assets 196.1 14.8 1,833,1 1,346.0

Current assets Current property assets 11 12,336.3 10,129.9 – –

Current receivables Accounts receivable 13.3 32.7 – – Receivables, group companies – – 2,150.1 1,100.5 Tax receivables – 1.1 – – Other receivables 12 344.8 80.5 6.3 2.5 Pre-paid costs and accrued income 13.9 25.8 – 3.6 372.0 140.1 2 156,4 1,106.6

Cash and bank balances 3.8 127.6 – – Total current assets 12,712.1 10,397.6 2,156.4 1,106.6 Total assets 12,908.2 10,412.4 3,989.5 2,452.6

Liabilities and shareholders’ equity Shareholders’ equity 1 Restricted equity 13 Share capital (18,958,620 shares with a nominal value of SEK 2.50) 47.4 47.4 47.4 47.4 Restricted/statutory reserves 1,087.2 1,086.3 1,086.1 1,086.1 1,134.6 1,133.7 1,133.5 1,133.5 Non-restricted equity Non-restricted reserves/retained profi t/loss 948.1 854.9 409.5 443.6 Net profi t 745.2 321.7 763.6 298.5 1,693.3 1,176.5 1,173.1 742.1 Total shareholders’ equity 2,827.9 2,310.2 2,306.6 1,875.6

Provisions Tax provisions 10 – 136.0 – – Total provisions – 136.0 – –

Long-term liabilities 15 Loans 14 9,384.3 7 415.2 1 479.2 500.0 Total long-term liabilities 9,384.3 7 415.2 1 479.2 500.0

Current liabilities 15 Loans – 20.0 – 45.1 Committed credit facility (limit: SEK 250 m) 95.3 95.3 Accounts payable 100.6 62.8 0.2 0.2 Tax liabilities 23.1 – – – Other liabilities 331.4 241.6 90.9 6.0 Accrued costs and deferred income 145.6 226.6 17.3 25.7 Total current liabilities 696.0 551.0 203.7 77.0 Total liabilities and shareholders’ equity 12,908.2 10 412.4 3 989.5 2 452.6

Assets pledged and contingent liabilities Assets pledged 16 5,274.2 3,698.7 Inga Inga Contingent liabilities 17 Inga Inga 4 362.2 3 530.0

1 Change in shareholders’ equity Opening balance 2,310.2 2,187.6 1 875.6 1 815.1 Dividends –227.5 –199.1 –227.5 –199.1 29 Group contribution – – –105.1 –38.9 Net profi t 745.2 321.7 763.6 298.5 Closing balance 2,827.9 2,310.2 2 306.6 1 875.6

Namnlöst-5 29 04-03-19, 13.35.38 Cyanblå (processfärg)Magentaröd (processfärg)Gul (processfärg) Svart (processfärg) Financial reporting

CASH FLOW STATEMENT

Group Parent company SEK m Note 2003 2002 2003 2002 18 Ongoing operations Operating profi t 917.5 874.8 –5.7 –5.7 Net fi nancial position –432.7 –422.9 731.3 301.4 Value adjustments 44.9 48.5 – – Adjustment for items not included in cash fl ow from operations 2.6 0.5 – – 532.3 500.9 725.6 295.7 Tax paid 1.4 –0.9 – – Cash fl ow from operations before change in working capital 533.7 500.0 725.6 295.7

Cash fl ow from change in working capital Increase (–) / decrease (+) in operating receivables 67.0 –37.0 –0.1 –6.1 Increase (+) / decrease (–) in operating liabilities 72.2 –8.1 76.2 6.0 Cash fl ow from operations 672.9 454.9 801.7 295.6

Investment activity Acquisitions of current property assets –3,409.8 –1,428.4 – – Divestments of current property assets 1,158.6 726.9 – – Net investments in tangible fi xed assets –1.3 –4.5 0.2 – Net investments in fi nancial fi xed assets –14.8 5.0 –449.2 –29.1 Cash fl ow from investment activity –2,267.3 –701.0 –449.0 –29.1

Financing activity Loans drawn down 1,698.1 419.0 –125.2 –67.7 Dividends paid –227.5 –199.1 –227.5 –199.1 Cash fl ow from fi nancing activity 1,470.6 220.0 –352.7 –266.8

Cash fl ow for the year –123.8 –26.1 0.0 –0.3 Liquid funds, opening balance 127.6 153.7 0.0 0.3 Liquid funds, closing balance 3.8 127.6 0.0 0.0

30

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SUPPLEMENTARY DISCLOSURES Pensions All amounts in SEK 000 unless otherwise stated Senior executives’ pension plans are defi ned contribution. Kungsleden’s other salaried employees are encompassed by General accounting principles the ITP (supplementary pensions for salaried employees) plan, The Annual Report has been prepared in accordance with the and accordingly, their pensions are defi ned benefi t. Swedish Annual Accounts Act, Redovisningsrådet’s (RR, the Kungsleden pays premiums for these individuals to Alecta. Swedish Financial Accounting Standards Council) recom- mendations and Emerging Issues Task Force statements and Financial costs the Industry and Commerce Stock Exchange Committee’s Interest and other fi nancial expenditure coincident with recommendations. property construction is capitalised, while that associated with From 2005 onwards, quoted corporations in the EU must extension and conversion is written off on an ongoing basis. present their fi nancial reports pursuant to IFRS (International Derivative instruments are utilised to achieve the desired Financial Reporting Standards). Kungsleden has examined interest fi xings. Revenues and costs associated with such how this will infl uence its future accounting. In most cases, no instruments are accounted on an ongoing basis, with the notable effect arises because RR’s recommendations are revenues and costs for redemption and re-negotiation of closely consistent with the corresponding IFRSs. However, the derivatives, as well as prepayment penalty interest, accounted investigation did demonstrate a signifi cant potential impact on as they arise. Costs associated with funding facilities are how properties and interest-bearing liabilities are valued and allocated during the term of the facility. accounted. In 2004, Kungsleden will make all the necessary modifi cations for accounting pursuant to IFRS from 2005 Tax onwards. Kungsleden observes RR’s recommendation RR 9 on income tax, which in brief, implies that temporary differences are Consolidated accounts valued at the applicable tax rates without discounting, and The consolidated accounts have been prepared in accounted as deferred tax receivables and/or deferred tax accordance with RR’s recommendation RR1 and encompass liabilities. Temporary differences in shares in subsidiaries are the parent company and companies in which the parent not considered until it is likely that they will be realised as company holds more than 50 per cent of the voting power of taxable earnings or deductible losses in the short term. shares directly or indirectly. The consolidated accounts have been prepared in accordance with acquisition accounting. Valuation principles, etc. The method implies that acquired assets and liabilities are Assets, provisions and liabilities have been valued at valued at their actual value at the time of acquisition; acquired acquisition value unless otherwise indicated below. However, companies’ revenues and costs are consolidated from the receivables and fi nancial fi xed assets have been included at acquisition date onwards, which means that these companies the amount at which they are expected to be received. do not start contributing to consolidated capital until after their acquisition. Correspondingly, the income statements of divested Property companies are considered until the time of divestiture. Since the intention of ownership is to pursue trading, the group’s property holding is accounted as current assets. Revenues Accordingly, property has been valued at the lower of cost or The accounting of rental revenues is based on contracts market value. In cases where discrepancies between the book entered. Rental payments are quarterly or monthly in advance, value and estimated actual value of the property appear, the whereupon rents received are accounted as liabilities and requisite write-downs and write-ups of previous write-downs apportioned over the period to which the payment relates. have been effected. This means that the book value of For property trading, property disposals are accounted and property has a maximum corresponding to acquisition value. revenue recognised when it is likely that agreements entered Estimated actual values are based on internal and external are satisfi ed, which in most cases, is on signing. Sales and valuations conducted in accordance with generally accepted operating net attributable to divested properties are included valuation principles. until the transfer date, which typically occurs after the trans- action date. Acquired properties are accounted from signing Equipment 31 the relevant agreement. The sales and operating net attrib- Equipment is depreciated linearly according to plan over fi ve utable to acquired properties are included from the day of years. taking possession, which typically, is after the transaction date.

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NOTE 1 Employees and personnel costs to comprise a signifi cant portion of possible remuneration, subject to a Average number Prop. Prop. maximum of 12 months’ salary. The performance-related portion is based of employees 2003 women % 2002 women % on actual performance in relation to individual targets. Group 76 39 73 37 Parent company – – – – Remuneration and other benefits for 2003 Basic salary/ Performance Other Pension Gender distribution, Prop. Prop. Director’s fee related pay benefits costs Total Corporate management 2003 women % 2002 women % Chairman 250 – – – 250 Parent company and group Chief Executive 2,452 3,600 98 957 7,107 Board 13 0 Other senior executives 3,271 3,260 264 1,565 8,360 Other senior executives 0 0 Total 5,973 6,860 362 2,522 15,717

The Board of Directors has six members of which one woman was elected Comments on the above table: at the AGM in April 2003. • Performance-related pay is for 2003, of which 6,860 has been posted to 2003; Salary, other remuneration • Other benefi ts comprise company car and subsistence allowance; and social security costs 2003 2002 • The group operates defi ned-contribution pension plans exclusively. The Salary and Social Salary and Social stated pension cost is that cost posted to 2003. For more information on remun- security remun- security pensions, see below. Group eration costs eration costs The Board, Chief Executive and Deputy Chief Executive 9,358 4,699 6,104 2,847 Performance-related pay (of which pension costs) (1,267) (622) For the Chief Executive and Deputy Chief Executive, the bonus in 2003 Other employees 31,289 14,968 30,155 13,234 refl ects the total yield on the share and profi t before tax. The bonus for (of which pension costs) (3,964) (3,351) 2003 was equivalent to 150 per cent and 100 per cent of basic salary Total 40,647 19,667 36,259 16,081 respectively. (5,231) (3,973) For the three other senior executives, the bonus in 2003 was based on Parent company the outcome of each individual business area’s property trading, property The Board 820 269 600 197 yield, profi t before tax and the total returns from the share. The bonus for (of which pension costs) (–) (–) these executives in 2003 was between 80 and 100 per cent of basic salary.

Sickness absence, % 2003 Pensions Total sickness absence as a percentage of ordinary working-hours 2.34 The Chief Executive’s pensionable age is 65, with a defi ned-contribution Proportion of total sickness absence due to pension with no other commitments for the company apart from annual contiguous sickness absence of 60 days or more 50.33 premium, which was 957 in 2003. The Deputy Chief Executive’s pensionable Sickness absence as a percentage of each group’s regular working-hours age is 65. The premiums amount to the lower of 35 per cent of pensionable Sickness absence by gender salary or ten basic amounts, which for 2003, is 386. Men 0.58 The pensionable age for other senior executives is 65; pension premiums Women 4.53 may amount to a maximum premium according to the ITP plan (supplemen- Sickness absence by age tary pensions for salaried employees). up to 29 1 0 30–49 2.93 Redundancy payments 50 or older 1.09 The company and Chief Executive are subject to a mutual notice period of 1 Not accounted due to the stipulation of Swedish legislation stating that information six months. The Chief Executive receives redundancy pay of 18 months’ should not be submitted if the number of employees is up to 10, or if information could salary coincident with termination initiated by the company, an amount that be attributed to a particular individual. The term ‘group’ applies to both gender and age. is not deducted from other income, and is included in pension entitlements. No redundancy pay is due for termination initiated by the Chief Executive. All Kungsleden’s salaried staff are employed by the subsidiary Kungsleden Other senior executives’ notice periods vary between three and six Fastighets AB, and union employees by Kungsleden Service AB. Sickness months, although six months’ notice applies to all other senior executives absence information is for the period 1 July to 31 December 2003 inclusive. for termination initiated by the company. Redundancy pay of 12 months’ Remuneration of 1,700 for audit assignments and 1,145 for other assign- salary is due upon termination initiated by the company. Redundancy pay is ments was paid to Kungsleden’s auditor KPMG. Of this total, remuneration not offset against other income, nor is any redundancy pay due upon for auditing the parent company was 500, and for other assignments, 0. termination initiated by senior executives.

NOTE 2 Remuneration to senior executives Preparatory and decision processes Principles The Chairman has submitted a proposal to the Board of Directors regarding Remuneration is payable to the Board, pursuant to AGM decision. The the Chief Executive’s remuneration, and upon a proposal from the Chief Board resolves on how fees are divided between the Chairman and Board Executive, the remuneration of other senior executives, The Board of Directors members. No fees are payable to Board members employed by the company. has discussed the Chairman’s proposal and reached a decision thereupon Remuneration to the Chief Executive and other senior executives comprises basic salary, performance-related pay, other benefi ts and pension. The term ‘other senior executives’ means the four people that were active in the corp- NOTE 3 Depreciation orate management in 2003 in addition to the Chief Executive. As of 19 Group 2003 2002 Equipment, fi xtures and fi ttings –2,575 –2,695 January 2004, two people joined the corporate management coincident 32 Total –2,575 –2,695 with the reorganisation process reviewed in the section ‘Organisational and Depreciation according to plan by function human resources’. Performance-related pay should be a signifi cant portion Property management –1,445 –1,663 of remuneration but subject to a maximum of 12 months’ salary. Additionally, Sales administration –286 –264 the Chief Executive received an additional performance-related lump-sum in Central administration costs –844 –768 2002, equal to six months’ salary. The performance-related pay is intended Total –2,575 –2,695

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NOTE 4 Value adjustments Specifi cation of parent company’s holdings of shares in group companies Group 2003 2002 No. of Prop., Book Current property assets –44,883 –48,527 Subsidiary /corporate id. no./registered offi ce shares %1 value Kungsleden Fastighets AB, 556459-8612, Sthlm 200 100 856,000 NOTE 5 Profi t from shares in group companies Hemsö Fastighets AB, 556481-1429, Sthlm 1,000 100 107,872 Parent company 2003 2002 Kungsleden Syd AB, 556480-0109, Sthlm 10,000 100 144,274 Dividend 756,400 343,143 Kungsleden Spången AB, 556596-6677, Sthlm 1,000 100 317,800 Write-downs – –43,143 Kungsleden Öst B AB, 556610-9103, Sthlm 1,000 100 254,100 Total 756,400 300,000 Kungsleden Öst C AB, 556610-9095, Sthlm 1,000 100 2,100 Kungsleden Öst G AB, 556598-3177, Sthlm 1,000 100 100 NOTE 6 Tax Kungsleden Service AB, 556610-9087, Sthlm 1,000 100 2,100 Group 2003 2002 Bovård i Sverige AB, 556429-6126, Sthlm 3,750 100 20,274 Current tax Kungsleden Äldre B AB, 556635-1366, Sthlm 1,000 100 100 Tax for the period –22,833 –7 1,704,720 Adjustment of tax attributable to previous years – –236 1 Refers to the equity holding, which also corresponds to the votes held for the total number of shares. Total –22,833 –243 This section only includes directly owned subsidiaries; the group’s other constituent enterprises are Deferred tax apparent from the relevant subsidiaries’ annual reports. Deferred tax on temporary differences 547,548 –41,354 Deferred tax resulting from utilisation of previously NOTE 9 Shares in joint ventures capitalised values of loss carry-forwards –264,408 –88,647 Parent company 31 Dec 2003 31 Dec 2003 Total 283,140 –130,001 Accumulated acquisition value Total accounted tax cost, consolidated 260,307 –130,244 Opening balance 25,050 – Acquisitions – 50 Parent company 2003 2002 Disposals –25,050 – Deferred tax Shareholders’ contribution – 25,000 Deferred tax revenue in the value of loss Book value, closing balance – 25,050 carry-forwards capitalised in the year 38,062 1,197 Total accounted tax, parent company 38,062 1,197 The remaining 50 per cent of Hemsö Äldreboende AB was acquired in the year. The company was then divested, within the group, to the subsidiary Reconciliation of effective tax, group 2003 2002 Hemsö Fastighets AB. Profi t before tax 484,854 451,938 Standard rate tax, parent company –135,759 –126,543 NOTE 10 Deferred tax receivables and tax provisions Revaluation and revised assessment of Group temporary differences in income tax and shares Temporary Opening Income Other Closing in subsidiaries 394,687 – differences balance Statement changes balance Non-taxable revenue 3,514 – Properties –1,263,898 42,069 –766,125 –1,987,954 Non-deductible costsr –2,135 –3 465 Shares in subsidiaries – 674,571 829,347 1,503,918 Tax attributable to previous years – –236 Interest-bearing liabilities 25,637 –6,045 – 19,592 Accounted effective tax 260,307 –130,244 Income taxes (loss carry-forwards) 752,629 300,618 10,704 1,063,951 Reconciliation of effective tax, parent company 2003 2002 Total –485,632 1,011,213 73,926 599,507 Profi t before tax 725,574 295,722 Deferred tax –135,977 283,140 20,699 167,862 Standard rate tax, parent company –203,161 –82,802 Non-taxable revenue 241,223 83,999 Other receivables relate to the Drott acquisition and adjustments to the Accounted effective tax 38,062 1,197 opening balance of temporary differences in properties and income taxes.

NOTE 7 Equipment, fi xtures and fi ttings Parent company Group 31 Dec 2003 31 Dec 2002 Temporary Opening Income Shareholders’ Closing Accumulated acquisition value differences balance Statement equity balance Opening balance 16,432 10,967 Income tax Acquisitions 1,401 5,643 (loss carry-forwards) 322,521 135,936 – 458,457 Disposals and obsolescence –257 –1,405 Deferred tax 90,306 38,062 – 128,368 Re-classifi cation – 1,227 Total 17,576 16,432 Temporary differences in shares in subsidiaries are considered in share hold- Accumulated depreciation according to plan ings to be divested in the foreseeable future. The parent company maintains Opening balance –8,754 –5,124 control over all shareholdings within the group, and can decide if and when Disposals and obsolescence 157 751 such holdings are to be divested independently. Re-classifi cation – –1,686 Depreciation of acquisition values according to plan for the year –2,575 –2,695 Total –11,172 –8,754 Residual value according to plan, closing balance 6,404 7,678

NOTE 8 Shares in group companies 33 Parent company 31 Dec 2003 31 Dec 2002 Accumulated acquisition value Opening balance 1,230,494 1,115,374 Acquisitions 75,863 158,263 Disposals –173,337 Shareholders’ contribution 571,700 – Write-downs – –43,143 Book value, closing balance 1,704,720 1,230,494

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NOT 11 Current property assets Debt/instrument Nominal amount Actual value Group 31 Dec 2003 31 Dec 2002 Floating-rate loans 7,619,424 7,649,207 Accumulated acquisition value Fixed-rate loans 1,764,903 1,903,580 Opening balance 10,279,497 9,594,711 Committed credit facility 95,299 95,299 Acquisitions and investments 3 409,824 1,428,445 Interest swap—receivable –5,054,800 –5,066,824 Disposals –1,192,464 –743,659 Interest swap—liability 5,054,800 5,185,794 Total 12,496,857 10,279,497 Options, caps and fl oors—receivables –200,000 –200,000 Accumulated write-downs Options, caps and fl oors—liabilities 200,000 205,903 Opening balance –149,571 –117,810 FRA (forward rate agreement)—receivable –1,000,000 –1,000,000 Disposals 33,900 16,766 FRA (forward rate agreement)—liability 1,000,000 1,001,697 Reversals of write-downs in the year 31,566 10,079 Total 9,479,626 9,774,656 Write-downs in the year –76,450 –58,606 Total –160,555 –149,571 For calculating market value, the discounting of future cash fl ows with zero- Book value, closing balance 12,336,302 10,129,926 coupon yields based on offi cial quoted prices is applied. All values represent Residual value for tax purposes 10,348,351 8,866,030 a calculated value and will not necessarily be realised.

NOTE 12 Other receivables NOTE 15 Liabilities Group 31 Dec 2003 31 Dec 2002 Group 31 Dec 2003 31 Dec 2002 Receivables, proceeds from property disposals 300,000 – Non-interest bearing 600,669 530,980 Other current receivables 44,810 80,421 Interest-bearing 9,479,626 7,435,189 Total 344,810 80,421 Total 10,080,295 7,966,169 Parent company Parent company Other current receivables 6,258 2,531 Non-interest bearing 106,980 32,011 Total 6,258 2,531 Interest-bearing 1,479,185 545,081 Total 1,586,165 577,092 NOTE 13 Shareholders’ equity Restricted Non-restricted NOTE 16 Assets pledged Group Share capital reserves equity Group 31 Dec 2003 31 Dec 2002 Opening balance 47,397 1,086,259 1,176,547 For Kungsleden’s own liabilities and provisions Dividend –227,503 Property mortgages 5,274,207 3,698,701 Transfer between restricted and non-restricted equity 929 –929 Kungsleden Fastighets AB and subsidiaries have provided an undertaking Net profi t 745,161 to the syndicate banks for its syndicated loan to refrain from raising further Closing balance 47,397 1,087,188 1,693,276 loans or creating or depositing security from its asset mass without approval of the banks. Existing mortgages are maintained in a dedicated custody Statutory Profit brought/ account with the syndicate’s agent bank. Parent company Share capital reserve carried forward Opening balance 47,397 1,086,079 742,107 NOTE 17 Contingent liabilities Dividend –227,503 Parent company 31 Dec 2003 31 Dec 2002 Group contribution paid, Surety in favour of group companies 4,362,200 3,530,000 incl. deferred tax –105,114 Net profi t 763,636 NOTE 18 Additional information, Cash Flow Statement Closing balance 47,397 1,086,079 1,173,126 Adjustment for items not included in cash fl ow, etc. 31 Dec 2003 31 Dec 2002 NOTE 14 Borrowings Depreciation and write-downs of assets 47,458 51,222 Group 31 Dec 2003 31 Dec 2002 Other provisions – –2,240 Maturing less than one year from Total 47,458 48,982 the balance sheet date 1,428,587 422,000 Maturing 1–5 years from the balance sheet date 6,091,039 3,650,000 Components included in liquid funds 31 Dec 2003 31 Dec 2002 Maturing later than 5 years from Cash and bank balances 3,780 127,607 the balance sheet date 1,960,000 3,363,189 Total 9,479,626 7,435,189 Approved credit facilities amounted to 10,620,879 divided between credit limits for property acquisitions of 4,350,000, a secured loan of 5,720,879, a In a fi nancial context, Kungsleden is primarily exposed to interest risk, which 300,000 bond facility and a committed credit facility of 250,000. The un- means the risk of changes in interest levels affecting net fi nancial position. utilised proportion of credit facilities amounted to 1,141,253. Investments in By simulating future yields, Kungsleden can select those instruments and existing property amounted to 119,381 (83,285). Acquisitions of property measures that will reduce the volatility of its net fi nancial position optimally. amounted to SEK 3,244,322 (1,289,423) of which 234,371 related to the The following table illustrates the difference between the nominal value and acquisition of the remaining 50 per cent of Hemsö Äldreboende AB. market value of liabilities. The table also shows the division of liabilities between fi xed and fl oating rates, the instruments used for risk management Operating cash fl ow 2003 2002 and these instruments’ nominal amounts. Operating profi t 917,528 874,800 Adjustment for items not included in cash fl ow 47,458 48,982 Change in working capital 139,205 –45,140 34 Investments –119,381 –83,285 Total 984,810 795,357

26-48.indd 34 04-03-23, 08.26.38 Cyanblå (processfärg)Magentaröd (processfärg)Gul (processfärg) Svart (processfärg) Audit report

PROPOSED APPROPRIATION OF PROFITS To Kungsleden AB’s (publ) Annual General Meeting Consolidated shareholders’ equity, as stated in the Consoli- Corporate identity number 556545-1217 dated Balance Sheet, is SEK 1,693 m. No provisions to I have examined Kungsleden AB’s (publ) Annual Report, con- restricted reserves are proposed. solidated fi nancial statements, accounts and the Board’s and Chief Executive’s administration for the year 2003. The Board The following amounts in the parent company are and Chief Executive assume responsibility for the accounts at the disposal of the Annual General Meeting, SEK Profi t brought forward 409,489,577 and the management. My responsibility is to comment on the Net profi t 763,635,418 Annual Report, the consolidated fi nancial statements and the Total 1,173,124,995 management on the basis of my audit. The audit has been completed in accordance with generally The Board of Directors and Chief Executive propose that profi ts are appropriated as follows: accepted accounting practice in Sweden. This means that I Dividends of SEK 13.00 per share to shareholders, in total: 246,462,060 have planned and completed the audit in order to ensure Carried forward 926,662,935 Total 1,173,124,995 reasonably that the Annual Report and consolidated fi nancial statements do not contain any signifi cant errors. An audit Stockholm, Sweden, 27 february 2004 comprises the examination of a selection of the documentation relating to amounts and other information contained in the accounts. An audit also includes examining the accounting principles and the Board’s and Chief Executive’s application thereof, as Bengt Kjell Mats Israelsson well as evaluating the overall information contained in the Chairman Annual Report and the consolidated fi nancial statements. As the basis for my statement regarding discharge from liability, I have examined signifi cant decisions, measures and circum- stances in the company in order to assess whether any Board Jonas Nyrén Per-Anders Ovin member or the Chief Executive is liable for compensation to the company. I have also examined whether any Board member or the Chief Executive has otherwise contravened the Companies Act, the Annual Accounts Act or the Articles of Association. Anna W Jiffer Jens Engwall I consider that my audit provides me with a reasonable Chief Executive foundation for the following statements. The Annual Report and consolidated fi nancial statements My Audit Report was presented on 27 February 2004 have been prepared in accordance with the Annual Accounts Act and thereby provide an accurate impression of the com- Thomas Thiel pany’s and the group’s profi t and fi nancial position in accordance Authorised Public Accountant with generally accepted accounting practice in Sweden. I recommend that the Annual General Meeting approve the Income Statement and Balance Sheet for the parent company and the group, allocate profi t in the parent company in accordance with the proposal in the Report of the Directors and discharge the Board members and Chief Executive from liability for the fi nancial year.

Thomas Thiel

Authorised Public Accountant Stockholm, Sweden, 27 February 2004

35

Namnlöst-5 35 04-03-19, 13.35.50 Cyanblå (processfärg)Magentaröd (processfärg)Gul (processfärg) Svart (processfärg) Property

PROPERTY 2003

Year of Lettable fl oor-space m2 construction/ Industrial/ Retirement Total Rental Rental Vacancy, Name Municipality Locality Address conversion Offi ces warehouse homes Retail Residential Hotel Other fl oor-space revenue value %

Market Area East Offi ce properties Bulten 7 Danderyd Danderyd Rinkebyv 7 1992 1,169 454 – 216 – – – 1,839 1 ,455 1,939 21.1 Hållsta 6:13, 15, 18, 19 Eskilstuna Eskilstuna Hållsta 1972/1981 24,280 – – – – – – 24,280 11,777 11,777 – Köpmannen 2 Finspång Finspång Bergslagsv 4 1929 950 – – 470 531 – – 1,951 1,497 1,528 2.0 Norr 12:5 Gävle Gävle N Skepparg 11–13 1978 10,327 1,330 – 4,190 – – – 15,847 11,574 13,680 6.9 Södertull 33:1 Gävle Gävle S:a Kungsg 59 1940/1960 8,590 561 – 3,787 – – – 12,938 5,334 7,680 24.3 Diametern 1 Huddinge Huddinge Diameterv 1 1978 43,410 232 – – – – – 43,642 37,625 42,588 11.2 Rektangeln 1 Huddinge Huddinge Månskärsv 9 1988 8,200 – – – – – – 8,200 7,816 11,462 24.1 Mekanikern 23 Linköping Linköping G:a Tanneforsv 17 1926/1986 12,020 1,966 – – – – – 13,986 6,230 8,850 29.9 Domaren 1 Mjölby Mjölby Kungsv 54 1961 1,690 – – 260 1,672 – – 3,622 2,425 2,595 7.4 Bagaren 4 Motala Motala Bispmotalag 9 1972 3,195 – – 182 – – – 3,377 3,056 3,282 7.5 Sicklaön 37:13 Nacka Nacka Finnbodav 13 1967 2,669 – – – – – – 2,669 2,929 2,977 – Sicklaön 37:45 Nacka Nacka Kvarnholmsv 52 1987 1,845 807 – – – – – 2,652 2,429 2,429 – Sigtuna 2:171 Sigtuna Sigtuna Väringav 11 1965/1994 1,265 – – – 90 – – 1,355 1,337 1,337 – Sigtuna 2:227 Sigtuna Sigtuna Skolbacken 61 2001 1,629 – – – – – – 1,629 2,981 2,981 – Ritmallen 1 Sollentuna Rotebro Kung Hans v 4, 12 1990 3,034 263 – 1,358 – – – 4,655 4,744 5,646 13.0 Centrum 13 Sollentuna Sollentuna Allfarv 1, 3 1986 3,610 291 – 755 – – – 4,656 7,013 7,909 7.5 Ekplantan 2 Sollentuna Sollentuna Djupdalsv 13–15 1988 4,388 8 – – – – – 4,396 4,227 4,227 – Nattvakten 10 Sollentuna Sollentuna Sjöängsv 10, 12 1998 825 801 – – – – – 1,626 1,849 1,849 – Nattvakten 3 Sollentuna Sollentuna Sjöängsv 15–21 1990 4,440 174 – 430 – – – 5,044 5,352 6,524 18.3 Nattvakten 5 Sollentuna Sollentuna Sjöängsv 9 1988 1,352 – – – – – – 1,352 1,933 1,951 0.9 Nattvakten 6 Sollentuna Sollentuna Sjöängsv 5–7 1987 2,517 – – – – – – 2,517 2,565 3,351 20.1 Nattvakten 7 Sollentuna Sollentuna Sjöängsv 1, 3 1985 1,157 – – – – – – 1,157 1,309 1,580 17.0 Nattvakten 8 Sollentuna Sollentuna Sjöängsv 2, 4 1986 489 468 – – – – – 957 1,057 1,062 0.3 Nattvakten 9 Sollentuna Sollentuna Sjöängsv 6, 8 1986 1,244 – – – – – – 1,244 920 1,379 33.3 Träkolet 16 Sollentuna Sollentuna Tellusv 13 1982/1988 11,637 607 – – – – – 12,244 12,646 15,546 16.9 Järva 4:12 Solna Solna Signalistg 9 1940/1994 2,000 – – – – – – 2,000 3,622 3,380 – Albano 18 Stockholm Stockholm Björnnäsv 12 1964 2,000 – – – – – – 2,000 1,581 1,581 – Albano 19 Stockholm Stockholm Björnnäsv 10 1944/1981 402 662 – – – – – 1,064 402 402 – Gunnebo 15 Stockholm Stockholm Salag 12, 42 1992 4,135 – – – – – – 4,135 3,955 3,952 – Göta Ark 18 Stockholm Stockholm Medborgarplatsen 21–25 1984 17,991 668 – – – – – 18,659 39,477 48,181 17.7 Rosteriet 5 Stockholm Stockholm Lövholmsv 9 1956 3,270 – – – – – – 3,270 4,038 4,091 1.1 Stenskärven 8 Stockholm Vinsta Siktg 2 1980/1987 7,946 1,746 – – – – – 9,692 4,199 7,346 43.0 Degeln 2 Täby Täby Nytorpsv 2–34 1983 12,355 601 – – – – – 12,956 16,697 16,737 – Sävjan 56:1 Uppsala Sävja Västgötaresan 60 1990 3,017 – – 159 – – – 3,176 4,767 4,753 – Årsta 78:1 Uppsala Uppsala Fyrislundsg 73 1982 2,922 – – – – – – 2,922 2,126 2,508 15.2 Husby 4:25 Österåker Åkersberga Företagsallèn 1988 1,379 – – – – – – 1,379 1,185 1,215 – Husby 4:27 Österåker Åkersberga Företagsallén 10 1988 926 4 – – – – – 930 809 1,218 34.7 Husby 4:28 Österåker Åkersberga Företagsallén 8 1988 1,385 10 – – – – – 1,395 267 1,268 79.0 Husby 4:32 Österåker Åkersberga Företagsallén 14 1992 2,699 – – – – – – 2,699 2,840 3,542 19.8 Runö 7:84 Österåker Åkersberga Sågv 2 1980 3,432 395 – 417 – – 102 4,346 4,175 4,569 11.1

Industrial/warehouse properties Ekhagen 4 Botkyrka Botkyrka Kumla Gårdsv 9 1989 – 3,428 – – – – – 3,428 1,543 1,674 7.8 Hantverkaren 1 Botkyrka Botkyrka Segersbyv 4–6 1974 3,344 6,114 – – – – 54 9,512 4,999 5,356 2.7 Kumla Hage 7 Botkyrka Botkyrka Segersbyv 5 – – 1,950 – – – – – 1,950 1,099 1,527 12.4 Kumla Äng 2 Botkyrka Botkyrka Kumla Gårdsv 31 1988 – 1,420 – – – – – 1,420 853 853 – Segersby 1 Botkyrka Botkyrka Kumla Gårdsv 10 1976 – 12,019 – – – – – 12,019 6,728 6,828 – S:t Ilian 9:1 Enköping Enköping Vårfrug 2 1961 1,556 – – 1,811 – – – 3,367 2,703 2,893 6.5 Hemsta 9:6 Gävle Gävle Rynningsg 2 1984/1997 – 3,500 – – – – – 3,500 2,860 2,860 – Sörby Urfjäll 36:3 Gävle Gävle Skolg 17 1979/1995 2,155 10,391 – – – – – 12,546 4,639 6,759 31.4 Jakobsberg 22:14 Järfälla Järfälla Brantv 2 1962/1997 – 18,665 – – – – – 18,665 1,963 1,963 – Veddesta 2:39 Järfälla Järfälla Bruttov 4 1972 1,638 1,791 – – – – – 3,429 2,038 2,045 – Generalen 7 Linköping Linköping Generalsg 7 1959/1976 1,447 3,339 – – – – – 4,786 1,657 2,144 31.3 Rosersberg 11:37 Rosersberg #Referens! Tallbacksg 23 1989/1999 – 11,394 – – – – – 11,394 9,947 9,863 – Märsta 24:18 Sigtuna Sigtuna Turbing 2 1990 1,895 – – – – – – 1,895 1,601 1,603 – Albano 64 Stockholm Stockholm Roslagsv 54–56 1959 356 5,125 – 207 – – – 5,688 1,413 1,427 – Magasinet 1 Södertälje Järna Tuna Industriv 31–35 1970 – 21,375 – – – – – 21,375 6,799 6,732 – Isbrytaren 1 Södertälje Södertälje Hansav 6–10 1970 – 17,222 – – – – – 17,222 6,924 6,928 0.1 Kryssaren 8 Södertälje Södertälje Hansav 5,7 1942 1,704 26,405 – – – – – 28,109 8,842 8,867 0.7 Stansen 1 Täby Täby Maskinv 1 1979/1994 5,100 – – – – – – 5,100 4,331 3,774 – Viby 19:13 Upplands–Bro Kungsängen Energiv 3 1981 – 2,080 – – – – – 2,080 933 935 –

Retail properties Forbonden 4 Botkyrka Botkyrka Fittja C, Fittjav 3 1972 5,059 1,253 – 4,445 – – – 10,757 10,844 10,844 2.6 Norr 30:4 Gävle Gävle Drottningg 12 1965 1,324 60 – 2,491 – – – 3,875 5,003 4,998 0.3 Reglaget 1 Sollentuna Sollentuna Bergkällav 24 1987/1990 573 2,549 – 180 – – – 3,302 2,999 2,999 – Midas 5 Brf Stockholm Stockholm Mälartorget 15 1929/1979 – 420 – 766 – – – 1,186 2,589 2,596 1.5 Fogden 6 Täby Täby Fogdev 4 1987 4,820 861 – 5,270 – – 149 11,100 6,581 9,004 21.8 Fjärdingen 35:1 Uppsala Uppsala S:t Eriks Torg 8 1929/1983 36 528 – 1,058 – – – 1,622 3,160 3,113 –

Retirement homes Jakobsberg 2:2719 Järfälla Jakobsberg Vibblabyv 97–99 2000 – – 4,341 – – – – 4,341 6,342 6,336 – Elefanten 6 Linköping Linköping Barnhemsgatan 4 1998 – – 743 – 477 – – 1,221 1,193 1,159 1.0 Lillgårdsskolan 11 Linköping Linköping Ridhusgatan 2a 1996 – 49 1,461 – 157 – – 1,667 2,131 2,147 1.7 Valbyrån 5 Linköping Linköping Kärnavägen 3–11 1996 – – 2,656 – 94 – – 2,750 3,112 3,111 1.3 Sandbyhov 5,30 Norrköping Norrköping Hagag 72 1920–70/2000 9,629 30 15,354 2,736 – – – 27,749 28,022 27,877 – Linet 1 Norrtälje Norrtälje Torpvägen 5a 1992 – – 4,314 – – – – 4,314 4,265 4,257 – Sigtuna 2:164 Sigtuna Sigtuna Rektor Cullbergsv 9 1943/1992 249 – – – 520 – – 769 1,333 1,332 – Hallen 4 Solna Solna Lövgatan 39 1990 320 – 5,252 – – – – 5,572 7,230 7,421 – 36 Plommonträdet 5 Stockholm Hägersten Valborgsmässov 16 1964 78 20 6,675 – 724 – 25 7,522 8,578 8,447 – Flyghöjden 2 Stockholm Skarpnäck Skarpnäcks Torg 1 2003 – – 2,880 – – – – 2,880 7,583 7,583 – Tempelriddarorden 5 Stockholm Skärholmen Vita Liljans väg 53 1999 – – 5,000 – – – – 5,000 6,046 6,031 – Glaven 10 Stockholm Stockholm Stadshagsv 5 1996 141 – 3,442 – – – – 3,583 6,096 6,083 –

Namnlöst-5 36 04-03-19, 13.36.00 Cyanblå (processfärg)Magentaröd (processfärg)Gul (processfärg) Svart (processfärg) Property

Year of Lettable fl oor-space m2 construction/ Industrial/ Retirement Total Rental Rental Vacancy, Name Municipality Locality Address conversion Offi ces warehouse homes Retail Residential Hotel Other fl oor-space revenue value %

Retirement homes continued Kopparn 11 Stockholm Stockholm Erstag 32–34 1929/1995 57 – 298 144 2,787 – – 3,286 4,741 4,758 – Kulltorp 3 Stockholm Stockholm Tantog 21 1966/1997 – – 5,098 – – – – 5,098 8,395 8,383 – Långbro Sjukhus 2 Stockholm Stockholm Vantörsv 216 1967/2000 13,667 – 3,208 – – – 5 16,880 20,069 19,881 – Sjöstöveln 1,3 Stockholm Stockholm Folkparksv 150 1977/1997 325 – 7,445 – – – – 7,770 9,645 9,745 – Blåvalen 1 Södertälje Södertälje Tallhöjdsv 3 1927/1986 – – 7,178 – – – – 7,178 8,848 8,780 – Sågverket 2 Södertälje Södertälje Korpuddsv 9–11,13 1985/1989 8,113 – – – – – – 8,113 8,196 8,074 – Bylegård 37 Täby Täby Jarlabankes väg 48 1903/1993 – – 1,957 – – – – 1,957 4,015 4,010 – Dragarbrunn 9:4 Uppsala Uppsala S:t Olofsg 44b 2000 – – 4,020 – – – – 4,020 5,574 5,574 – Kvarngärdet 14:5 Uppsala Uppsala Torkelsg 42 2000 – – 3,585 – – – – 3,585 5,276 5,258 – Luthagen 81:1 Uppsala Uppsala Norrlandsgatan 2 2001 – – 2,740 – – – – 2,740 4,623 4,613 – Rickomberga 9:14 Uppsala Uppsala Geijersg 61 2001 – – 3,200 – – – – 3,200 5,318 5,309 – Rickeby 1:97 Vallentuna Vallentuna Stendösvägen 5 2003 – – 2,950 – – – – 2,950 4,904 4,904 – Vallentuna–Ekeby 2:275 Vallentuna Vallentuna Ekebyvägen 40 1992 – – 2,936 – – – – 2,936 3,058 3,083 – Tuna 3:30, 3:182 Österåker Åkersberga Österskärsvägen 3 1994 – – 500 – 5,922 – – 6,422 7,158 7,242 1.2

Other Husby 4:23 Österåker Åkersberga Svinningev 15, 17 – – – – – – – – – – – –

Market Area South Offi ce properties Löttorp 1:16 Borgholm Löttorp Löttorpsv 57 1957 485 – – 275 85 – – 845 268 415 33.1 Släggan 9 & 10 Bromölla Bromölla Segerv 2 1960 2,083 792 – – – – – 2,875 76 884 91.4 Apoteket 2 Eksjö Eksjö Nybrog 4 1929/1963 797 – – 206 749 – – 1,752 1,161 1,288 9.6 Läkaren 1 Eksjö Marrianelund Torget 1960 616 – – 114 – – – 730 434 480 9.6 Klövern 1 Emmaboda Emmaboda Nygatan 16 1990 419 – – – 354 – – 773 664 678 – Ölmestad 19:2 Gislaved Reftele Torget 1980 354 – – – 163 – – 517 391 391 – Hillerstorp 4:18 Gnosjö Hillerstorp Storg 5 1976 266 – – – – – – 266 377 377 – Danmark 29 Helsingborg Helsingborg Söderg 39 1972 8,077 242 – 1,048 1,912 – – 11,279 10,696 10,932 2.0 Arkitekten 3 Hultsfred Hultsfred Bryggerig 7 1982 290 – – 87 – – – 377 328 328 – Hägelåkra 3:48 Hultsfred Målilla Vetlandsv 2a 1967 190 – – – – – – 190 85 150 43.2 Mörlunda 1:103 Hultsfred Mörlunda Stationsv 1 1967 230 – – 97 268 – – 595 333 361 5.2 Kopparslagaren 6 Hässleholm Hässleholm Frykholmsg 4 1980 2,670 – – 465 – – – 3,135 3,334 3,353 – Mården 7 Hässleholm Hässleholm Första Avenyn 14a–d 1972/2001 4,534 140 – 1,356 – – – 6,030 6,982 8,031 12.5 Ädelmetallen 14 Jönköping Jönköping Grossistg 5 1987 654 861 – – – – – 1,515 606 700 13.4 Åldermannen 24 Kalmar Kalmar Storg 25 1970 4,300 – – 227 – – – 4,527 5,165 5,165 – Vega 21 Lessebo Hovmanstorp Centralplan 1960 233 – – 135 – – – 368 292 292 – Företaget 8 Lund Lund Företagsv 28 1984 2,193 – – – – – – 2,193 2,302 2,496 7.8 Verkstaden 5 Lund Lund Annedalsv 7–9 1973/1989 5,268 1,725 – – – – – 6,993 6,568 6,927 3.9 Brudbuketten 10 Malmö Malmö Russg 6 1988/1997 750 – – – – – – 750 560 640 17.6 Brudbuketten 13 Malmö Malmö Derbyv 20 1988 1,056 – – – – – – 1,056 1,128 1,128 – Fältsippan 8 Malmö Malmö Regnvatteng 2 1986/2000 3,625 – – – – – – 3,625 5,303 5,303 – Grönsakshandlaren 5 Malmö Malmö Jägersrov 80 1989–1991 2,903 100 – – – – – 3,003 3,182 3,182 – Kullen 5 Malmö Malmö Sturkög 5 1962/1981 4,870 – – – – – – 4,870 6,472 6,472 – Nejlikebuketten 6 Malmö Malmö Derbyv 4 1987 1,765 – – – – – – 1,765 1,698 1,698 – Piledal 27 Malmö Malmö Klågerupsv 259 1963/1978 362 – – – – – – 362 624 624 – Revolversvarvaren 12 Malmö Malmö Jägershillg 18 1987 9,698 – – – – – – 9,698 8,990 11,143 14.2 Rosenbuketten 4 Malmö Malmö Höjag 1 1987/1990 4,322 – – – – – 1,098 5,420 9,726 10,238 5.7 Svavlet 4 Malmö Malmö Emilstorpsg 24 1975 1,205 – – – – – – 1,205 844 843 – Söderhavet 5 Malmö Malmö Elbeg 5 1992 1,472 120 – – – – – 1,592 2,171 2,001 – Söderhavet 6 Malmö Malmö Elbeg 7 1938/1998 1,406 – – – – – – 1,406 1,977 1,979 – Apollo 6 Nybro Nybro Storg 5 1955 474 – – 251 731 – – 1,456 1,046 1,049 – Köpmannen 3 Nybro Nybro Storg 2 1992 1,075 – – 2,123 – – – 3,198 1,620 2,628 37.4 Venus 16 Nybro Nybro Nya Stationsg 2–16 1929/1955 2,473 – – 861 493 – – 3,827 2,821 3,141 10.1 Banken 3 Nässjö Nässjö Nyg 3 1970 3,370 – – 515 415 – – 4,300 3,549 3,711 4.3 Holje 6:191 Olofström Olofström Bredg 20 1958 1,103 – – 250 420 – – 1,773 1,372 1,429 4.0 Malghult 2:305 Oskarshamn Kristdala Hagg 2 1967 415 – – – – – – 415 272 272 – Lejonet 15 Oskarshamn Oskarshamn Flanaden 8 1967 4,055 83 – – – – 1 4,139 2,965 3,490 12.5 Lejonet 16 Oskarshamn Oskarshamn Flanaden 8, 12, 14 1969 1,409 – – 1,002 – – – 2,411 2,430 2,662 8.6 Älvehult 1:195 Oskarshamn Påskallavik Kustv 53, 55 1963 190 – – – – – – 190 166 166 – Kräftan 7 Sävsjö Sävsjö Storg 1 1939/1972 1,483 – – 98 743 – – 2,324 1,567 1,729 5.8 Vrigstad 3:12 Sävsjö Vrigstad Jönköpingsv 2, 4 1929/1960 832 – – – 385 – – 1,217 798 824 0.4 Örjan 19 Tingsryd Tingsryd Dackeg 18 1971/1989 1,829 – – 439 986 – – 3,254 2,773 2,910 4.7 Oden 11 Tranås Tranås Nyg 14 1979 2,795 – – – 318 – – 3,113 2,056 2,661 22.5 Herkules 34 Trelleborg Trelleborg C B Friisg 4 1970 4,041 30 – – 341 – – 4,412 3,644 4,110 11.3 Lenhovda 5:27 Uppvidinge Lenhovda Storg 30 1973 240 – – – – – – 240 226 226 – Rådhuset 7 Uppvidinge Åseda Olofsg 6 1966 298 – – – – – – 298 280 280 – Gästgivaren 2 Vaggeryd Skillingaryd Storg 6 1953 811 – – – 251 – – 1,062 901 901 – Kärnan 4 Vaggeryd Vaggeryd Järnvsg 1 1974 833 – – – – – – 833 679 679 – Broby 52:2 Vetlanda Landsbro Sävsjöv 3, 5 1950/1966 396 – – 105 372 – – 873 477 533 6.7 Banken 14 Vetlanda Vetlanda Storg 2, 4 1929 2,107 – – 486 1,484 – – 4,076 2,908 3,022 3.7 Bredaryd 10:4 Värnamo Bredaryd Storg 14 1964 296 – – 104 189 – – 589 305 318 3.9 Ljungsåsa 16:7 Växjö Lammhult Köpmannag 5 1969 337 – – – 419 – – 756 476 520 5.7 Elefanten 1 Växjö Växjö Rådjursv 2 1975 1,279 1,064 – 638 – – – 2,981 1,779 1,877 4.4 Nunnan 7 Växjö Växjö Bäckg 17, 19 1979 7,299 163 – 4,017 150 – – 11,629 11,929 13,656 12.5

Industrial/warehouse properties Övergången 8 Jönköping Jönköping Syrgasv 4 1950/1960 1,051 2,554 – – – – 704 4,309 1,166 1,299 6.3 Överstycket 25 Jönköping Jönköping Masking 5 1981 406 7,435 – – – – – 7,841 1,735 2,333 27.7 Strömma 1:1 Karlshamn Karlshamn Strömmav 3, 28 1929/1950 5,082 11,747 – – – – – 16,829 6,500 7,988 17.0 Cementen 4 Kristianstad Kristianstad Industrig 11 1989/1991 – 1,194 – – – – – 1,194 386 401 3.9 Plattan 4 Kristianstad Kristianstad Isolatorv 5 1991 – 1,328 – – – – – 1,328 519 519 – 37 Ventilen 10 Kristianstad Kristianstad Mossv 6 1980 – 900 – – – – – 900 464 464 – Kvartsen 6 Lund Lund Skifferv 25 1988 – 4,217 – – – – – 4,217 3,666 3,666 – Oket 1 Lund Lund Norra Nöbbelöv 1991 126 3,365 – – – – – 3,491 1,722 2,263 20.6

Namnlöst-5 37 04-03-19, 13.36.05 Cyanblå (processfärg)Magentaröd (processfärg)Gul (processfärg) Svart (processfärg) Property

Year of Lettable fl oor-space m2 construction/ Industrial/ Retirement Total Rental Rental Vacancy, Name Municipality Locality Address conversion Offi ces warehouse homes Retail Residential Hotel Other fl oor-space revenue value %

Industrial/warehouse properties continued Bjurö 11 Malmö Malmö Bjurög 35 1970 – 5,836 – – – – – 5,836 1,638 1,617 – Böttö 5 Malmö Malmö Kosterög 5 1964/1993 3,880 7,563 – – – – – 11,443 7,384 8,039 7.7 Cementen 4 Malmö Malmö Barlastg 2 1982 1,673 1,414 – 650 – – – 3,737 1,887 1,992 5.5 Eggegrund 6 Malmö Malmö Hemsög 10 1983 241 7,673 – – – – – 7,914 4,033 4,350 3.3 Eggegrund 7 Malmö Malmö Hemsög 12 1968/1970 – 14,679 – – – – – 14,679 3,679 5,543 – Haken 6 Malmö Malmö Vinkelg 15 1970 – 8,620 – – – – – 8,620 3,592 3,996 – Holmögadd 3 Malmö Malmö Bjurög 26 1969 – 11,482 – – – – – 11,482 4,720 4,634 – Holmögadd 4 Malmö Malmö Bjurög 28 1969 – 14,165 – – – – – 14,165 6,420 6,420 – Krukskärvan 3 Malmö Malmö Flintyxeg 10 1979 – 7,585 – – – – – 7,585 2,262 3,409 31.1 Lerkärlet 3 Malmö Malmö Flintyxeg 2 1984/1987 – 1,070 – – – – – 1,070 651 650 – Sidorodret 3 Malmö Malmö Höjdroderg 2 1976/1987 – 1,057 – – – – – 1,057 510 510 – Skjutstallslyckan 23 Malmö Malmö Lundav 56 1946 1,097 7,436 – 509 – – – 9,042 3,551 4,053 10.4 Smörbollen 12 Malmö Malmö Cypressv 12 1970 – 3,905 – – – – – 3,905 1,894 2,024 – Smörbollen 52 Malmö Malmö Pinjeg 5 1977 – 2,629 – – – – – 2,629 1,066 1,174 4.9 Speditionen 1 Malmö Malmö Lodg 19–23 1992 757 4,253 – – – – – 5,010 2,707 3,650 – Storbådan 2 Malmö Malmö Hemsög 22 1973 186 2,962 – – – – 100 3,248 1,278 1,298 1.5 Storbådan 4 Malmö Malmö Hemsög 18 1973 – 2,590 – – – – – 2,590 1,238 1,239 – Storbådan 5 Malmö Malmö Hemsög 14, 16 1973 580 12,224 – – – – – 12,804 6,005 6,355 4.6 Svinbådan 4 Malmö Malmö Brännög 9 1961 50 1,516 – – – – – 1,566 753 761 1.1 Svinbådan 5 Malmö Malmö Tärnög 3 1963 – 2,639 – – – – – 2,639 948 948 – Sturup 1:160 Svedala Svedala Bramst.v 173, 138, 180 1972 2,365 – – – – – – 2,365 640 1,216 28.9

Retail properties Ryttaren 13 Hässleholm Hässleholm Första Avenyn 5 1972/1995 230 – – 3,204 1,227 – 30 4,691 3,876 4,012 2.2 Vakten 1 Jönköping Jönköping Bataljonsg 4 1996 – – – 4,964 – – – 4,964 5,924 5,924 – Bjärred 14:11 Lomma Bjärred Vikingav 1 1971/1991 1,706 – – 3,002 – – 407 5,115 6,093 6,337 1.0 Köpmannen 2 Nybro Nybro Jutarnas v 1 1964 300 786 – 1,858 – – – 2,944 1,923 1,933 0.5 Lönnen 12 Nybro Nybro Salutorget 9 1975 690 72 – 5,429 – – – 6,191 3,975 4,299 5.9 Nederled 2:63 Värnamo Kloster Lindv 2 1934/1976 – – – 775 – – – 775 480 541 – Forsheda 3:31 Värnamo Värnamo Brog 4 1984 205 – – 449 – – – 654 496 499 – Ljungadal 5 Växjö Växjö Mörners v 112 1966/1971 – – – 3,082 – – – 3,082 977 1,002 – Ljungdahl 2 Växjö Växjö Ljungadalsg 6 1966/1978 528 – – 2,126 – – – 2,654 2,150 2,157 3.8

Retirement homes Norra Sjukhuset 1 Lund Lund N Gränsv 1; Skjutb.v 3 1975/1991 1,312 – 12,854 – – – – 14,166 13,350 13,690 – Koljan 10 Malmö Limhamn Tegnérgatan 68 1995 – – 355 – – – – 355 652 652 – Nattskärran 7 Malmö Limhamn Järnvägsgatan 29 1993 – – – – 1,918 – – 1,918 2,567 2,566 – Slätvaren 40 och 51 Malmö Limhamn Sarvgränd 2c 1910/1998 – – 450 – – – – 450 756 722 – Sädesärlan 6 Malmö Limhamn Linnégatan 18 1929/60/2000 472 – – 305 – – – 777 704 704 – Anten 3 Malmö Malmö Eddagatan 1 1989 – – 3,040 – – – – 3,040 3,382 3,377 – Bardisanen 14 Malmö Malmö N Bulltoftav 61–63 1993 – – 65 – 757 – – 822 1,475 1,474 – Cykeln 12 Malmö Malmö Palmgatan 17 2000 – – 2,980 – – – – 2,980 3,472 3,444 – Idrotten 12 Malmö Malmö Hasselgatan 24 1993 – – 540 – – – – 540 410 410 – Limhamn 152:371 Malmö Malmö – – – – – – – – – – – – – Nicktisteln 2 Malmö Malmö Ernst Jakobssons g 7 1993 – – 2,250 – – – – 2,250 2,892 2,711 – Rosenbuketten 8 Malmö Malmö Höjagatan 21 1989/1997 – – 1,466 – – – – 1,466 2,253 2,253 – Storskarven 12 Malmö Malmö Norra vägen 7 1998 – – 1,900 – – – – 1,900 2,654 2,630 – Storskarven 13 Malmö Malmö Norra vägen 1–5 1996 – – 2,313 – – – – 2,313 2,873 2,788 – Storskarven 9 Malmö Malmö Brunandavägen 32 1993 – – 442 – – – – 442 550 545 – Sånekulla 16 Malmö Malmö Limhamnsvägen 74 1990/1995 – – 2,240 – – – – 2,240 3,625 3,610 – Torsten 12 Malmö Malmö Major Nilssonsg 13 1942 – – 2,400 – – – – 2,400 2,602 2,586 – Tväråkern 16–17 Malmö Malmö Marieholmsvägen 3 1996 – – 672 – – – – 672 902 902 – Vannagården 2 Malmö Malmö Husie Kyrkoväg 1 1992 741 – – – – – – 741 985 985 – Solskiftet Malmö Oxie Oshögavägen 2 1976 – – 6,285 – – – – 6,285 5,869 5,910 – Stengodset 1 Malmö Oxie Stengodsvägen 4 1999 – – 1,850 – – – – 1,850 2,506 2,506 –

Other Bläsinge 5:232 Borgholm Borgholm Borgholm – – – – – – – – – – – – Bokhandeln 2 Eksjö Eksjö Södra Storg 11 1929 – – – 809 683 – – 1,492 1,002 1,142 6.3 Gårö 1:541 Gnosjö Gnosjö Gnosjö – – – – – – – – – – – – Ryttaren 8 Hässleholm Hässleholm Godtemplareg 1 1972/1995 – 27 – 3,318 4,570 – – 7,915 6,699 7,266 5.1 Flahult 2:348 Jönköping Jönköping Örnabergsv 13 – – – – – – – – – – – – Hamnen 22:2 Malmö Malmö Jörgen Kocksgatan 3 1952/1964 3,411 265 – – – 4,361 – 8,037 6,125 7,133 14.1 Krukskärvan 6 Malmö Malmö Flintyxeg 6 – – – – – – – – – – – – Påskbuketten 7 Malmö Malmö Hästv 4b – – – – – – – – – – – – Malmbäck 2:118,115 Nässjö Nässjö Malmbäck 2:118, 115 – – – – – – – – – – – – Sjöafall 1:85,1:80 Nässjö Nässjö Cirkelv 30 – – – – – – – – – – – – Gyllebo 1:288 Simrishamn Simrishamn Liavångsv 8 – – – – – – – – – – – –

Market Area West Offi ce properties Pomona 9 Borås Borås Allég 46 1962 2,539 – – – 799 – – 3,338 3,865 3,987 3.1 Gästgivaren 8 Falköping Falköping S:t Olofsg 5 1929 399 – – 504 623 – 30 1,556 918 1,009 5.1 Klockaren 11 Falköping Falköping Storg 7–9 1929 2,081 – – 247 627 – – 2,954 2,341 2,349 – Rådmannen 1,2,3 Falköping Falköping Landboag 1–5 1973/1986 2,276 236 – 2,622 973 – 745 6,852 4,521 5,400 15.8 Färgelanda Prästg 1:349 Färgelanda Färgelanda Centrumv 6 1977 286 – – – – – – 286 265 265 – Angered 100:1 Göteborg Göteborg Rävebergsv 1982/1989 26,126 – – – – – – 26,126 19,881 19,870 – Bagaregården 16:9 Göteborg Göteborg Byfogdeg 6 1949/1977 3,996 – – – – – – 3,996 3,503 3,833 8.6 Gamlestaden 2:5 Göteborg Göteborg Artillerig 17 1910–talet 23,498 699 – 90 – – 108 24,395 19,110 20,337 5.5 Gamlestaden 2:8 Göteborg Göteborg Hornsg1 1929/1966 20,882 – – – – – – 20,882 16,575 16,575 – 38 Gamlestaden 740:130 Göteborg Göteborg Gert Tommes.g 1–7 1947/1985 – 3,151 – – – – – 3,151 2,366 2,374 0.3 Landvetter 4:36 Härryda Härryda Brattåsv 5a–f, 6–7, 8a–b 1978/1988 2,020 386 – 1,098 – – – 3,504 3,936 4,859 – Kindbogården 1:111 Härryda Mölnlycke Metallv 5 1985 2,983 196 – – – – – 3,179 1,813 1,810 –

Namnlöst-5 38 04-03-19, 13.36.10 Cyanblå (processfärg)Magentaröd (processfärg)Gul (processfärg) Svart (processfärg) Property

Year of Lettable fl oor-space m2 construction/ Industrial/ Retirement Total Rental Rental Vacancy, Name Municipality Locality Address conversion Offi ces warehouse homes Retail Residential Hotel Other fl oor-space revenue value %

Offi ce properties continued Södra Hamnen 13:3 Lysekil Lysekil Rosviksg 5 1959/1983 1,201 – – – 658 – – 1,859 1,712 1,828 6.3 Hunden 3 Mariestad Mariestad Nya Torget 3 1988 333 65 – 3,139 – – – 3,537 1,977 2,534 20.1 Staren 8 Mariestad Mariestad Nyg 14 1957/1972 2,006 – – – 86 – – 2,092 1,685 1,685 – Köpmannen 15,16 Mark Kinna Boråsv 32 1943/1968 732 – – 324 206 – – 1,262 1,057 1,088 1.5 Mekanikern 1 Mark Kinna Boråsv 50 1957/1975 2,150 – – 164 – – – 2,314 2,239 2,239 – Krokstad Sandåker 1:46 Munkedal Hedekas Centrum 1973 309 – – 118 288 – – 715 333 392 11.5 Vässje 1:108 Munkedal Hällevadsho Norra Bohusv 2a 1975 230 – – 128 – – – 358 170 234 27.3 Annestorp 24:4 del av Mölndal Mölndal Almåsgången 5, 4, 6 1974/1991 2,506 – – 325 – – – 2,831 2,182 3,919 – Snödroppen 2 Mölndal Mölndal Flöjelbergsg 1 1962/1967 28,797 – – – – – – 28,797 29,641 29,567 – Tulpanen 3 Mölndal Mölndal Bergfotsg 7,9 1960 52,670 1,716 – – – – – 54,386 52,838 53,334 2.0 Fältskären 2 Skövde Skövde Södra Trängallén 1 1990 466 – – – – – – 466 309 309 – Vidar 1 Skövde Skövde Kungsg 18–22 1980 8,507 110 – 939 – – – 9,556 9,369 9,628 1.2 Munkeröd 1:61 Stenungsund Stenungsund Munkerödsv 4 1990 2,047 422 – – – – – 2,469 1,381 1,375 –2.1 Advokaten 1 Töreboda Töreboda Norra Torgg 7 1985 1,026 – – 260 839 – – 2,125 1,749 1,766 0.2 Barken 6 Uddevalla Uddevalla Junog 9 1990 3,674 – – – – – – 3,674 2,367 2,651 6.4 Bastionen 28 Uddevalla Uddevalla Bastionsg 40 1960/1989 7,006 – – – – – – 7,006 5,698 6,207 4.2 Solbacken 10 Uddevalla Uddevalla Silentzv 4b 1990 1,790 – – – – – – 1,790 923 1,484 35.0 Misteln 24 Vänersborg Vänersborg Drottningg 10 1929 3,081 – – – – – – 3,081 2,528 2,930 13.6 Resedan 16 Vänersborg Vänersborg Kungsg 7 1965 1,136 90 – 1,189 – – – 2,415 1,670 1,875 11.6

Industrial/warehouse properties Strandbygget 1 Falkenberg Falkenberg Kvekatorpsv 1970 – 4,720 – – – – – 4,720 1,180 1,180 – Kärra 11:110 Göteborg Göteborg Ellesbov 101 1968 – 7,822 – – – – – 7,822 2,639 2,639 – Sävenäs 170:9 Göteborg Göteborg von Utfallsg 12 1929/1955 650 7,846 – – – – – 8,496 2,767 2,994 7.6 Försäljaren 9 Kungälv Kungälv Filareg 17–19 1974 288 7,900 – 337 – – – 8,525 4,027 4,216 3.4 Ulseröd 1:212 Lysekil Lysekil Lysekils Industrihotell 1975 – 9,456 – – – – – 9,456 1,992 2,436 17.6 Hylsan 3 Mariestad Mariestad Förrådsg 34 1980 – 4,210 – – – – – 4,210 1,290 1,542 – Lexby 11:14 Partille Partille Laxfi skev 4 1956/1981 4,312 15,189 – – – – – 19,501 5,036 6,412 23.0 Skövde 4:160 Skövde Skövde Mariestadsv 98–100 1976/1989 599 2,090 – 1,276 – – – 3,965 1,547 1,854 17.3 Stenung 16:6 Stenungsund Stenungsund Ängsv 7 1976/1983 1,695 1,720 – – – – – 3,415 2,001 2,454 17.1 Tanumshede 2:39,2:57 Tanum Tanum Storemyrsv 1972/1987 – 19,016 – – – – – 19,016 9,604 8,395 – Stolen 1 Tibro Tibro Fabriksg 4 1987 – 7,247 – – – – – 7,247 504 1,688 42.8 Drivhjulet 3 Trollhättan Trollhättan Kardanv 65 1989 – 1,680 – – – – – 1,680 770 770 – Hjulet 6 Trollhättan Trollhättan Kardanv 12b 1980/1984 – – – 1,710 – – – 1,710 1,000 997 – Hörnstenen 5 Trollhättan Trollhättan Installatörv 1–3 1978/1989 – 1,664 – – – – – 1,664 744 787 5.5 Kugghjulet 2 Trollhättan Trollhättan Kardanv 66 1991 – 1,500 – – – – – 1,500 636 636 – Kuröd 4:86 Uddevalla Uddevalla Brunnemyrsv 4 1976/1990 – 5,290 – – – – – 5,290 2,852 3,557 – Svanebergslyckan 4 Uddevalla Uddevalla Svensebergsv 4 1988 – 1,989 – – – – – 1,989 110 660 83.4 Tofta 10:18 Varberg Varberg Riksv 845 1968 625 2,283 – – – – – 2,908 310 878 58.0 Fregatten 21 Vänersborg Vänersborg Industrig 8 1945/1967 – 6,677 – – – – – 6,677 2,128 2,128 –

Retail properties Hindås 1:450 Härryda Härryda Hindås Stnsv 41–47 1978/1996 783 – – 840 – – – 1,623 1,537 1,574 – Hulebäck 1:520 Härryda Härryda Råda Torg 1–2 1970/1987 1,367 172 – 2,231 1,894 – – 5,664 5,320 5,446 2.0 Landvetter 4:37 Härryda Härryda Brattåsv 9–13, 10–14 1977/1999 430 – – 268 563 – – 1,261 1,471 1,495 – Floda 3:833 Lerum Lerum Rurik Holms V 1, 4–10 1960/1991 3,464 – – 3,821 3,847 – – 11,132 9,849 10,522 6.6 Annestorp 24:2 Mölndal Mölndal Almåsgången 2 1974/1987 – 19 – 3,447 – – – 3,466 2,984 2,990 – Lindome 2:43 Mölndal Mölndal Almåsgången 1 1974 814 – – 653 – – – 1,467 1,954 1,732 5.8 Köpmannen 30 Tibro Tibro Centrumg 6 1973 580 24 – 1,491 – – – 2,095 476 1,430 66.7 Ekoxen 1 Trollhättan Trollhättan Sylte Center 1970 1,119 160 – 2,278 – – – 3,557 2,283 2,729 16.2 Ekoxen 2 Trollhättan Trollhättan Sylte Center 1973 456 – – 257 – – – 713 82 398 72.0 Gullriset 2 o 3 Trollhättan Trollhättan Göteborgsv 31 1955 – – – 1,051 – – – 1,051 (1) 393 114.4 Kuröds Tegar 2 Uddevalla Uddevalla Kurödsv 27 1978 – – – 1,878 – – – 1,878 720 696 – Källeberg 7:18 Vänersborg Brålanda Storg 21 1965 386 – – 660 – – – 1,046 366 505 25.8 Timjan 4 Vänersborg Vänersborg Edsg 18 1965 135 – – 1,421 – – – 1,556 765 1,220 29.4

Retirement homes Heden 28:2 Göteborg Göteborg Berzeliigatan 11 1993 – – 1,840 – – – – 1,840 3,590 3,426 – Krokslätt 147:2 Göteborg Göteborg Fridkullag 18g 1996 150 – – – 3,124 – – 3,274 5,065 5,042 – Fiskebäck 8:7 Göteborg V Frölunda Hällefl undregatan 20 1999 – – 6,444 – 1,341 – – 7,785 8,009 8,114 1.0 Fiskebäck 8:8 Göteborg V Frölunda Hällefl undregatan 18 1976 1,719 – – – – – – 1,719 1,175 1,266 – Fallström 14 Mölndal Mölndal Fallströmsg 1–5 1997 – – 1,389 – – – – 1,389 2,256 2,121 –

Other Kroken 6 Alingsås Alingsås Krang 13 – – – – – – – – – (2) – – Tummarp 1:66 Borås Dalsjöfors Storg 25 1952 210 – – 259 568 – – 1,037 724 733 1.3 Baggatomten 6:1 Härryda Hindås Hotellv 1937 – – – – – 4,079 – 4,079 3,877 3,877 – Gästgivaren 3 Lidköping Lidköping Gamla Stadens Torg 1 1929 155 – – – – 4,120 – 4,275 2,654 2,653 – Fritsla 7:7 Mark Fritsla Klevliden 12 – – – – – – – – – (7) – – Torreby 3:54 Munkedal Munkedal Munkedal – – – – – – – – – – – – Nösund 1:176 Orust Orust Jakträttsavtal – – – – – – – – – 1 1 – Lerdala 2:23 Skövde Lerdala Sjöv 3a–b, 5a–b, 9a–b, 11 1992 – – – – 1,880 – – 1,880 1,204 1,268 3.2 Köpmannen 26 Tibro Tibro Stora Torget 8 1986 1,034 147 – 742 1,346 – – 3,268 2,569 2,759 9.1 Alfhem 11 Tidaholm Tidaholm Telefong 4 1960 268 – – 192 594 – – 1,054 560 690 15.6 Idun 5 Tidaholm Tidaholm Norra Kungsv 5 1984 784 – – 267 1,402 – – 2,453 1,695 1,899 10.8 Tranemo 1:29 Tranemo Tranemo Tranemo – – – – – – – – – – – – Ekoxen 3 Trollhättan Trollhättan Lextorp – – – – – – – – – – – – Ekoxen 4 Trollhättan Trollhättan Lextorp – – – – – – – – – – – – Byggmästaren 5 Töreboda Töreboda Norra Torgg 10,12 1990 44 – – 270 1,097 – – 1,410 645 912 24.8 Plåtslagaren 9 Töreboda Töreboda Friggag 5, 7 1947/1992 – – – – 1,849 – – 1,849 1,053 1,293 12.9 Rönnen 11 Töreboda Töreboda St Bergsg 20 a–b 1957 177 40 – – 821 – – 1,038 553 595 6.4 39 Sotaren 12 Töreboda Töreboda Vadsbog 10 a–b,12 a–b 1990 – – – – 972 – – 972 500 731 31.1

Namnlöst-5 39 04-03-19, 13.36.14 Cyanblå (processfärg)Magentaröd (processfärg)Gul (processfärg) Svart (processfärg) Property

Year of Lettable fl oor-space m2 construction/ Industrial/ Retirement Total Rental Rental Vacancy, Name Municipality Locality Address conversion Offi ces warehouse homes Retail Residential Hotel Other fl oor-space revenue value %

Market Area Central Offi ce properties Frigga 7 Borlänge Borlänge Målareg 1 1983 2,197 9 – 1,276 – – – 3,482 3,480 3,564 2.4 Rolf 2 Borlänge Borlänge Borganäsv 43 1970 5,626 112 – 964 – – – 6,702 5,047 5,297 4.5 Sigrid 11 Borlänge Borlänge Walling 25 1971 2,519 – – – – – – 2,519 2,250 2319 2.9 Verdandi 9 Borlänge Borlänge Borganäsv 42–44 1929/1987 1,374 182 – 1,282 195 – – 3,032 1,492 1,953 23.2 Smedjan 5 Forshaga Forshaga Tryckerig 7 1990 788 350 – – – – – 1,138 486 509 4.0 Hagfors 2:174 Hagfors Hagfors Uddeholmsv, Stnshus 1929/1950 826 58 – 67 – – – 950 623 704 11.3 Sköllersta–Kärr 1:34 Hallsberg Pålsboda Köpmang 3 1978 635 230 – – – – – 865 315 371 6.2 Brisen 4 Karlstad Karlstad Sunnanvindsg 8 1973 852 – – – – – – 852 457 640 28.9 Fjädern 16 Karlstad Karlstad Bromsg 4 1991 2,816 334 – 1,202 – – – 4,352 2,978 3,082 3.5 Kulingen 4 Karlstad Karlstad Östanvindsg 17 1976 – 8,425 – 450 – – – 8,875 1,992 2,844 31.5 Sågen 7 Karlstad Karlstad Lantvärnsg 12 1940/1975 1,851 1,916 – – – – – 3,767 1,062 1,713 38.0 Tången 15 Karlstad Karlstad Gjuterig 28 1991/1995 984 – – 990 – – – 1,974 1,064 1,085 – Väktaren 7 Karlstad Karlstad Västra Kyrkog 1 1929/1971 5,811 – – – 212 – – 6,023 6,103 6,205 – Svanen 17 Ludvika Ludvika Carlav 21 1988 2,649 – – – – – 366 3,015 2,183 2,402 4.6 Stranden 20:4 Mora Mora Hantverkareg 14 1989 2,479 – – – – – – 2,479 1,892 1,923 6.2 Östsura 2:76 Surahammar Surahammar Köpmang 16 1933/1990 388 – – – 182 – – 570 404 419 2.1 Klas 11 Västerås Västerås Hantverkarg 5 1955/1987 5,407 834 – 2,962 – – – 9,203 8,935 9,915 5.3 Klio 10 Västerås Västerås Norra Källg 17 1984/1998 2,454 77 – 264 – – – 2,795 2,706 2,746 2.9 Kryssen 1 Västerås Västerås Regattag 33–53 1929–1962 4,920 1,513 – – – – – 6,433 3,298 3,657 6.3 Talby 2:75 Örebro Odensbacken Örebrov 11 1984 360 – – – – – – 360 238 238 –

Industrial/warehouse properties Smedjan 1 Forshaga Forshaga Framgårdsv 2 1973 303 508 – – – – – 811 593 593 – Blåsten 4 Karlstad Karlstad Stormg 8 1975/1979 2,407 – – – – – – 2,407 1,742 1,569 – Fjädern 14 Karlstad Karlstad Kolvg 1 1971 982 2,716 – 347 – – – 4,045 2,794 2,730 1.8 Sågen 9 Karlstad Karlstad Lantvärnsg 8 1950/1973 1,198 1,357 – – – – – 2,555 849 863 1.6 Hällabrottet 2:4, 9 Kumla Kumla Yxhultsv 16 1939 – 5,169 – – – – – 5,169 1,560 1,641 5.3 Oxen 17 Kumla Kumla Västra Drottningg 38 – – 6,645 – – – – – 6,645 1,305 1,305 – Finnslätten 3 Västerås Västerås Bnr 340, Finnslätten 1959/1976–77 1,261 48,923 – – – – – 50,184 34,817 37,476 6.0 Kryssen 2 Västerås Västerås Regattag 7–31 1929–1963 1,614 11,566 – 215 – – – 13,395 6,708 6,919 1.2 Regattan 1 Västerås Västerås Regattag 8–28 1929–1964 751 11,795 – 115 – – – 12,661 5,009 5,830 7.3

Retail properties Kyrkåkern 8 Borlänge Borlänge Häradsv 20 1920/1977 – 820 – 1,172 239 – – 2,231 1,271 1,373 – Bromsen 1 Karlstad Karlstad Blockg 6 1967/1991 1,218 710 – 1,972 – – – 3,900 1,434 1,454 1.4 Gräsroten 1 Karlstad Karlstad Gräsdalsg 1 1987 – – – 4,961 – – – 4,961 2,164 2,157 – Härden 3 Karlstad Karlstad Sågverksg 5 1952 – 519 – 501 – – – 1,020 406 470 7.4 Mercurius 15 Karlstad Karlstad Ö:a Torgg 9, 11 1992 1,469 – – 4,438 1,111 – – 7,018 7,924 8,545 1.6 Stolpen 6 Karlstad Karlstad Ventilg 1 1991 – 50 – 510 – – – 560 680 660 – Östra Via 1:62 Örebro Vintrosa Skolg 4 1950/1985 240 – – 1,403 130 – – 1,773 973 1,118 12.9

Retirement homes Vedbo 60 Västerås Västerås Erikslundsg 1977/1999 – – 7,200 – – – – 7,200 8,736 8,482 – Hanen 4 Västerås Västerås Hagalidsv 2 1964/1996 – – 2,740 – – – – 2,740 3,921 3,641 –

Other Harneskmakaren 3, 10 Arboga Arboga Järntorgsg 4a–b 1953/1972 458 36 – 462 702 – – 1,658 806 1,131 28.7 Mejeriet 17 Filipstad Filipstad Tingshusg 10b – – – – – – – – – – – – Mejeriet 18 Filipstad Filipstad Tingshusg 10a – – – – – – – – – – – – Drillsnäppan 2 Kristinehamn Kristinehamn Södra Ringv 11 1990 901 65 – 143 1,312 – – 2,421 1,994 2,104 5.2 Energin 6 Västerås Västerås Omformarg 22 – – – – – – – – – – – – Gasten 1 Västerås Västerås Regattag 1929–1960 – – – – – – – – – – – Gasten 2 Västerås Västerås Björnöv 20 1929–1961 – – – – 40 – – 40 25 30 –

Market Area North Offi ce propereties Gnistan 7 Bollnäs Bollnäs Långg 7 1972 1,745 – – 303 – – – 2,048 739 1,479 29.8 Knuten 4 Härjedalen Sveg Fjällv 4 1991 350 – – 285 298 – – 933 534 782 31.6 Knuten 6 Härjedalen Sveg Kyrkog 20 1920 576 – – – 103 – – 679 285 434 37.6 Rösta 13:1 Nordanstig Harmånger Strömbruksv 2 1962 306 – – 59 – – – 365 271 271 – Nordanbro 2:83 Nordanstig Hassela Nordanbrov 2 1991 558 – – – – – – 558 218 372 27.0 Rostbrännaren 4 Sandviken Sandviken Hyttg 21 1963/1988 1,551 – – – – – – 1,551 1,578 1,578 –

Retail property Rostbrännaren 6 Sandviken Sandviken Hyttg 19 1966/1988 272 – – 1,129 1,010 – – 2,411 1,553 1,571 –

40

Namnlöst-5 40 04-03-19, 13.36.19 Cyanblå (processfärg)Magentaröd (processfärg)Gul (processfärg) Svart (processfärg) Property

ACQUIRED PROPERTIES 2003

Year of Lettable fl oor-space m2 construction/ Industrial/ Retirement Total Rental Rental Vacancy, Name Municipality Locality Address conversion Offi ces warehouse homes Retail Residential Hotel Other fl oor-space revenue value %

Market Area East Industrial/warehouse properties Långtradaren 4 Borlänge Borlänge Godsvägen 11 1970/1990 – 1,599 – – – – – 1,599 625 625 – Galjonen 1 Linköping Linköping Gillbergagatan 30 1975/1991 – 590 – – – – – 590 398 398 – Märsta 17:2 Sigtuna Märsta Maskingatan 8a 1974/1986 – 3,791 – – – – – 3,791 2,050 2,050 – Korsräven 1 Stockholm Spånga Arrendevägen 50 1969/1998 – 6,120 – – – – – 6,120 4,035 4,035 – Mästaren 6 Södertälje Södertälje Hantverksvägen 14 1986 – 1,104 – – – – – 1,104 637 637 –

Retirement homes Halmstad Halmstad Halmstad – 2004 – – – – – – – – – – – Jakobsberg 34:6 Järfälla Jakobsberg Snapphanevägen 22 1973/2002 – – 7,055 – – – – 7,055 11,757 11,771 – Mensättra 26:1 Nacka Nacka Orenövägen 5 1995 – – 2,047 – – – – 2,047 3,566 3,566 – Diademet 3 Norrköping Norrköping GamlaÖvägen 27 1993 – – 3,625 – – – – 3,625 3,657 3,655 –

Market Area South Offi ce properties Kavalleristen 11 Helsingborg Berga Bergavägen 1a 1989 2,184 – – – – – – 2,184 1,889 1,889 – Delfi nen 17 Helsingborg Helsingborg Kullagatan 31 1900/1984 – – – – – – – – – – – Fiskaren 40 Helsingborg Helsingborg Kullagatan 41 1900/1984 6,743 – – – – – – 6,743 7,690 7,690 – Fiskaren 41 Helsingborg Helsingborg Drottninggatan 42–44 1900/1984 – – – – – – – – – – – Springposten 3 Helsingborg Helsingborg Springpostgränden 3 1910/1990 2,127 – – – – – – 2,127 1,910 1,910 – Terminalen 1 Helsingborg Helsingborg Järnvägsgatan 10–12 1991 19,243 – – – – – – 19,243 44,165 44,165 – Rådhuset 7 Helsingborg Helsingborg Stortorget 7 1904/1994 3,092 – – – – – – 3,092 5,398 5,398 – Armringen 2 Malmö Fosie Agnesfridsvägen 190 1975 4,867 – – – – – – 4,867 2,982 2,982 – Gullriset 4 Malmö Hindby Camillavägen 17–21 1945 648 – – – – – – 648 593 593 – Vakteln 3, 23 Malmö Limhamn Tegnérgatan 39 1991 1,871 – – – – – – 1,871 2,423 2,423 – Brudbuketten 11 Malmö Malmö Derbyvägen 24 1988 1,344 – – – – – – 1,344 860 1,171 26.6 Brännaren 8 Malmö Malmö Agneslundsvägen 14 1947 5,395 – – – – – – 5,395 5,089 5,710 10.9 ClausMortensen 29 Malmö Malmö Baltzarsg 41a 1950 6,204 – – – – – – 6,204 7,384 9,598 19.9 Davida 15 Malmö Malmö Amiralsgatan 13–15 1990 11,469 – – – – – – 11,469 16,885 18,768 10.0 Druvan 1 Malmö Malmö Engelbrektsgatan 7 1900 3,785 – – – – – – 3,785 3,406 3,785 10.0 Flygledaren 1 Malmö Malmö Höjdrodergatan 14 1988 916 – – – – – – 916 848 848 – GustavAdolf 12 Malmö Malmö Gustav Adolf 12 1958 3,157 – – – – – – 3,157 4,664 5,117 8.9 Kamelen 14 Malmö Malmö Storgatan 43 1934 13,500 – – – – – – 13,500 15,885 15,885 – Laxen 23 Malmö Malmö Brogatan 5–7 1971 7,455 – – – – – – 7,455 6,507 10,085 35.5 Lejonet 2 Malmö Malmö Lillatorg 1 1911 5,679 – – – – – – 5,679 8,470 8,963 3.8 Oscar 16 Malmö Malmö Södergatan 3 1907 2,115 – – – – – – 2,115 3,515 4,448 17.8 Stjärnan 10 Malmö Malmö Engelbrektsgatan 6 1990 901 – – – – – – 901 1,423 1,466 – Söderport 7 Malmö Malmö Gustav Adolfstorg 43 1885 2,052 – – – – – – 2,052 2,132 3,349 34.5 Söderport 8 Malmö Malmö Per Weijersgatan 4 1700 1,582 – – – – – – 1,582 1,460 2,562 43.0 Söderport 9 Malmö Malmö Gustav Adolfstorg 47 1910 2,100 – – – – – – 2,100 2,440 3,217 24.2 Torshammaren 11 Malmö Malmö Hornyxegatan 6 1984 647 – – – – – – 647 776 776 – Vakteln 17 Malmö Malmö Järnvägsgatan 42–46 1930 2,560 – – – – – – 2,560 3,174 3,359 5.5 Vildanden 8 Malmö Malmö Geijersgatan 4–8 1967/1990/1993 8,561 – – – – – – 8,561 7,811 8,186 4.6 Vildanden 9 Malmö Malmö Geijersgatan 2a–b 1990 5,825 – – – – – – 5,825 5,733 6,839 16.2 vonConow 51 Malmö Malmö Kalendegatan 4 1884 1,929 – – – – – – 1,929 2,608 2,738 – vonConow 54 Malmö Malmö Baltzargatan 31 1965 20,810 – – – – – – 20,810 26,784 33,325 18.9 Dadeln 23 Malmö Sorgenfri Bertrandsgatan 3 1920 3,480 – – – – – – 3,480 2,168 2,253 3.8

Industrial/warehouse properties Tågarp 20:81 Burlöv Arlöv Lommavägen 39 1929/1984 – 27,177 – – – – – 27,177 8,276 8,582 3.6 Dolken 3 Helsingborg Berga Mörsaregatan 12 1985/1990 3,845 – – – – – – 3,845 2,874 2,874 – Asien 20 Helsingborg Gåsebäck Kvarnstensgatan 11 1989 – 2,548 – – – – – 2,548 1,050 1,050 – Jupiter 12 Helsingborg Ringstorp Grenadjärgatan 8 1978 – 1,459 – – – – – 1,459 655 655 – Flygbasen 4 Malmö Bulltofta Höjdrodergatan 17 1989 – 1,681 – – – – – 1,681 1,211 1,211 – Flintkärnan 2 Malmö Fosie Agnesfridsvägen 194 1972 – 4,608 – – – – – 4,608 2,234 2,563 12.8 Krukskärvan 11 Malmö Fosie Flintyxegatan 8a 1986 – 2,610 – – – – – 2,610 1,341 1,820 26.3 Hammaren 5 Malmö Kirserberg Södra Bulltorftavägen 17 1966 – 4,299 – – – – – 4,299 3,811 3,811 – Gråsejen 1 Malmö Limhamn Prångaregatan 5 1960 – 2,365 – – – – – 2,365 88 2,535 96.5 Kupolen 2 Malmö Limhamn Krossverksgatan 7–17 1992 – 9,922 – – – – – 9,922 8,473 9,313 7.7 Holkyxan 8 Malmö Malmö Bronsyxegatan 13 1972/2002 – 4,625 – – – – – 4,625 2,710 2,710 – Masugnen 22 Malmö Sofi elund Annelundsgatan 59 1948 – 2,369 – – – – – 2,369 807 1,316 38.7 Sämjan 2 Malmö Sofi elund Bokgatan 16–18 1929 – 9,514 – – – – – 9,514 3,005 4,433 32.2 Brännaren 3 Malmö Sorgenfri Industrigatan 13 1947 – 4,304 – – – – – 4,304 2,571 2,981 13.8

Market Area West Industrial/warehouse properties Rud 51:14 Göteborg V Frölunda Klangärgsgatan 6a 1970/1990 – 4,463 – – – – – 4,463 2,779 2,779 – Ädelmetallen 15 Jönköping Jönköping Grossistgatan 14 1988/1997 – 5,000 – – – – – 5,000 2,365 2,365 – Pumpen 5 Kalmar Kalmar Grindängsvägen 2 1969 – 665 – – – – – 665 276 276 – Anisen 2 Mölndal Mölndal Johannefredsgatan 9 1991/1999 – 5,500 – – – – – 5,500 4,503 4,503 – Gasmätaren 2 Mölndal Mölndal Argongatan 11 1982/1987 2,589 11,133 – 314 – – 30 14,066 11,259 11,259 – Kuröd 4:43 Uddevalla Uddevalla Brunnemyrsv 1/Klevåsv 4 1974/1999 – 1,600 – – – – – 1,600 588 588 – Gravören 5 Växjö Växjö Verkstadsgatan 8 1969/1983 – 2,568 – – – – – 2,568 1,372 1,372 –

Retirement homes Backa 866:836 Göteborg Göteborg S:t Jörgensväg 26 1956–62/1992–93 – – 5,155 – – – – 5,155 4,872 5,240 7.0

Market Area Central Industrial/warehouse properties Plinten 4 Norrköping Norrköping Malmgatan 35 1974/1991 – 5,450 – – – – – 5,450 3,270 3,270 – Kontrollanten 11 Örebro Örebro Skomaskinsgatan 2 1965 – 9,283 – – – – – 9,283 2,159 3,436 37.2 41

Market Area North Industrial/warehouse properties Likriktaren 2 Kiruna Kiruna Ställverksvägen 7 1990 – 1,053 – – – – – 1,053 785 785 – Skorpionen 8 Luleå Luleå Midgårdsvägen 10 1964 – 2,644 – – – – – 2,644 1,220 1,220 – Sköns Prästbord 1:65 Sundsvall Sundsvall Förmansvägen 20 1978 – 6,555 – – – – – 6,555 2,988 2,988 – Spänningen 5 Umeå Umeå Förrådsvägen 23 1975 – 1,686 – – – – – 1,686 791 791 – Trucken Östersund Östersund Chaufförvägen 17 1965/1977 – 1,860 – – – – – 1,860 771 771 –

Namnlöst-5 41 04-03-19, 13.36.29 Cyanblå (processfärg)Magentaröd (processfärg)Gul (processfärg) Svart (processfärg) Property

DIVESTED PROPERTIES 2003

Year of Lettable fl oor-space m2 construction/ Industrial/ Retirement Total Name Municipality Locality Address conversion Offi ces warehouse homes Retail Residential Hotel Other fl oor-space

Market Area East Offi ce properties Valpen 1 Eskilstuna Eskilstuna Kungsg 68 1929 4,386 90 – – – – 4,476 Viljan 2 Eskilstuna Eskilstuna Kungsg 13 1976/1995 7,925 88 456 – – – 8,469 Växlaren 4 Eskilstuna Eskilstuna Kungsg 17 1930 2,243 289 52 526 – – 3,110 Fjällräven 1 Lidingö Lidingö KarinsAllè 3–7 1963 4,300 – – 2,561 – – 6,861 Borg 6 Stockholm Kista Strömög 6 1980 6,372 – – – – – – 6,372 Sigtuna 2:169 Sigtuna Sigtuna Rektor Cullbergsv 8 1935 702 – – – – – – 702 Fjärdingen 28:4 Uppsala Uppsala Västra Åg 16 1914/1955 6,131 132 1,590 – – – 7,853

Industrial/warehouse properties Valhalla 2:21 Eskilstuna Eskilstuna Fraktg 7 1970 712 – – – – – 712 Jordbromalm 6:60 Haninge Haninge Rörv 4–8 1982 1,666 4,543 470 – – – 6,679 Albano SvD Stockholm Stockholm Björnnäsv 21 1929 – 612 – – – – 612 Albano Aftonbladet Stockholm Stockholm Björnnäsv 33 1940 – 1,074 – – – – 1,074 Albano Carnemyr Stockholm Stockholm Björnnäsv 25 1940 – 840 – – – – 840 Kolsva 1 Stockholm Stockholm Fagerstag 26 1975/1986 – 5,590 – – – – – 5,590 Borg 3 Stockholm Kista Strömög 5 1978 1,800 – – – – – – 1,800 Gullfoss 1 Stockholm Kista Viderög 4 1978 – 2,016 – – – – – 2,016

Retail properties Vårsta 1:58 Botkyrka Vårsta Ringv 1 1984 801 105 934 – – – 1,840 Nollplanet 12 Eskilstuna Kloster Mått Johanssonsv 30 1990 – – 2,038 – – – 2,038

Other Lagmanstinget 6 Botkyrka Botkyrka Segersbyv 20 – – – – – – – – – Centrum 13:1 Enköping Enköping Kungsg 26 1977/1995 337 – – 804 – 1,910 122 3,173 Åby 1:169 Haninge Haninge Rörv 55 – – – – – – – – – Jordbromalm 4:7 Haninge Haninge Lillsjöv – – – – – – – – –

Market Area South Offi ce properties Rådhuset 7 Helsingborg Helsingborg – 1904/1994 3,092 – – – – – 3,092 Baggån 3 Helsingborg Ödåkra Centralg 10 1968 689 – – – – – 12 701 Erik Dahlberg 16 Landskrona Landskrona Järnvsg 9 1953 1,665 – – 1,363 – – 3,028 Jöns Petter Borg 13 Lund Lund Landerigr 19 1992 660 500 – – – – – 1,160 Nils 9 Ronneby Ronneby Strandg 8 1990 2,873 – – – – – – 2,873 Frans 6 Ronneby Ronneby Kungsg 9 1978 1,653 9 – 61 – – – 1,723 Hoby 1:5 Ronneby BräkneHoby Häradsv 18 1979 390 – – – – – – 390 VästraHallen 1:41 Ronneby Hallabro Ronnebyv 41,43 1970 210 – – – 115 – – 325 Falken 7 & 8 Sölvesborg Sölvesborg Stortorget 11 1929 906 – – – 419 – – 1,325

Industrial/warehouse properties Töllstorp 1:380 Gnosjö Gnosjö Industrig 1968/1978 – 6,081 – – – – 6,081 Vågskålen 3 Jönköping Jönköping Huskvarnav 40 1949/1983 9,075 6,835 387 – – – 16,297 Kajan 37 Malmö Malmö Limhamnsv 106–110 1929/1990 3,154 11,538 – – – 100 14,792

Other Släggan 5 Jönköping Huskvarna Drottnining 14 1954 497 – – 268 1,036 – – 1,801 Ljung 1:28 m.fl Klippan Klippan Skäralid – – – – – – – –

Market Area West Offi ce properties Utby 3:61 Ale Älvängen Tingsv 2 1979/1993 462 – – 288 – – 750 Utby 1:20 Ale Älvängen Göteborgsv 93 1929 237 – – 200 – – 437 Gårdsten 41:1 Göteborg Göteborg Ramnebacken 1935/1960 288 – 31 – – – 319 Merkurius 4 & 9 Trollhättan Trollhättan Polhemsg 2 1958/1987 4,909 – – 790 – 84 5,783 Bilde 12 Uddevalla Uddevalla Kilbäcksg 13, 15 1965 3,539 – 574 – – – 4,113

Industrial/warehouse properties Reparatören 6 Falkenberg Falkenberg Oktanv 3 1979/1989 – 488 468 – – – 956 Ägir 32 Falköping Falköping Bang 2–4 1929/1988 1,129 3,007 – – – – – 4,136 Majorna 164:2 Göteborg Göteborg Banehagsg 6–10 1992 1,885 4,187 – – – – 6,072

Retail properties Askim 243:19 Göteborg Göteborg AskimsTorg 1, 2, 3 1967 1,022 – 1,117 – – – 2,139 Ladan 3 Skara Skara Storsvängen 2 1987/1989 – – – 4,609 – – – 4,609 Linkärven 4 Uddevalla Uddevalla Ling 4 1987 – – 3,100 – – – 3,100

Other Gårdsten 41:3 Göteborg Göteborg Angered – – – – – – – – Angered 80:2 Göteborg Göteborg Transformatorstation – – – – – – – – Angered 80:1 Göteborg Göteborg St Holmen 2 – – – – – – – – Gårdsten 53:2 Göteborg Göteborg Kumming 7 – – – – – – – – Gårdsten 53:3 Göteborg Göteborg Kumming 5 – – – – – – – – Hulebäck 1:604 Härryda Härryda Centralv 13 1951 121 – 570 691 – – 1,382 Bilde 2 Uddevalla Uddevalla Lagerbergsg 2, 12 1965 – – – – – – –

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Namnlöst-5 42 04-03-19, 13.36.33 Cyanblå (processfärg)Magentaröd (processfärg)Gul (processfärg) Svart (processfärg) Property

Year of Lettable fl oor-space m2 construction/ Industrial/ Retirement Total Name Municipality Locality Address conversion Offi ces warehouse homes Retail Residential Hotel Other fl oor-space

Market Area Central Offi ce properties V Falun 1, 2, 8, 11, 7:32 Falun Falun Engelbrektsg 24 1929 2,536 20 720 43 – – 3,319 Yttre Åsen 12 Falun Falun Holmg 20, 22, 26 1973/1994 5,895 611 4,637 – – – 11,143 Kvasta 2:4 Lindesberg Fellingsbro Bergsv 35 1929 245 – 90 285 – – 620 Merkurius 2 Nora Nora Rådmansg 15 1898 714 – – 142 – – 856

Industrial/warehouse properties Kolven 8 Borlänge Borlänge Svetsgr 1957/1986 – 756 – – – – 756 Klubban 5 Karlstad Karlstad Sågverksg 26 1977 – 1,816 – – – – – 1,816 Bonaren 5 Säffl e Säffl e Industrig 16 1950/1988 – 9,186 – – – – 9,186

Retail properties Kettil 7 Västerås Västerås Torgg 1, 3, 5 1966/1990 1,207 411 – 9,021 – – – 10,639 Glanshammar 2:17 Örebro Glanshammar Eldvallsg 2 1958/1972 – – 846 323 – – 1,169

Other Kometen 4 Kristinehamn Kristinehamn Kungsg 36 1929/1991 85 80 – 182 1,388 – – 1,735 Mejeristen 1 Kumla Kumla S Kungsv 27, 29a–h, 31 1992 – – – 3,123 – – 3,123 Staren 19 Kumla Kumla Stationsg 2–4 1972/1989 26 – – 2,217 2,875 – 5,118 Fjolner 5 Köping Köping Stora G 4a–b 1945/1974 657 – – 156 1,001 – – 1,814 Turisten 1 Torsby Torsby Kyrkog 2 1929 – – 350 – 1,541 – 1,891 Turisten 4 Torsby Torsby Fryksände – – – – – – – – Törsjö 3:66 Örebro Örebro Mosjö – – – – – – – – – Törsjö 3:89 Örebro Örebro Mosjö – – – – – – – – –

Maret Area North Offi ce properties Braxen 1 Luleå Luleå Smedjeg 12–16 1987 7,776 174 – 243 – – – 8,193 Hästen 2 Ockelbo Ockelbo Södra Åsg 42 1963 42 – – 271 393 – – 706 Källaren 3 Sollefteå Sollefteå Storg 55 1962 1,062 – – 132 639 – – 1,833 Loke 7 Skellefteå Skellefteå Torget 2 1975 2,644 36 1,232 – 4,968 60 8,940 Olympen 3 Sundsvall Sundsvall Storg 20b–c 1972 2,997 – – 56 – – 35 3,088

Other Hälsan 1 Haparanda Haparanda Torget 4 1929 380 145 542 1,785 – – 2,852 Färgaren 3 Sollefteå Sollefteå Storg 35a–b 1968 516 – – – 1,220 – 60 1,796

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Namnlöst-5 43 04-03-19, 13.36.44 Cyanblå (processfärg)Magentaröd (processfärg)Gul (processfärg) Svart (processfärg) Defi nitions

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 Financial terminology

Property yield: the operating surplus for the year Return on equity: profi t in relation to average Cash flow from operations: operating profi t less in relation to the average book value of properties. shareholders’ equity. Stated for profi t before and net fi nancial items adjusted for value adjustments However, the property yield for the earnings capa- after tax. Average shareholders’ equity is and items not included in cash fl ow from city is calculated as earnings capacity in relation calculated as the total of opening and closing operations, and for changes in working capital to the book value of properties at year-end. balances divided by two. and tax paid.

Operating surplus: rental revenue less operation Return on total capital: profi t after fi nancial items P/E ratio: share price at the end of the period in and maintenance costs, ground rent, property plus interest costs less interest subsidies in relation to earnings per share, in accordance with tax and property administration. relation to average assets. Average assets are prevailing forecasts. Year-end share prices in calculated as the total of opening and closing relation to the following year’s EPS are used for Operation costs: costs for electricity, heating, balances divided by two. historical values. water, property care, cleaning, insurance and ongoing maintenance. Beta value: the share’s correlation with the P/CE ratio: share prices at the beginning of the market’s average performance. A beta value of year in relation to cash fl ow from operations. Economic occupancy: rental revenue, rental dis- less than one implies that a share price has counts and rental losses in relation to rental value. Earnings per share: profi t after tax at year-end fl uctuated less than the SAX (Stockholm All- divided by the number of shares at year-end. Economic vacancy: assessed market rent for un- share Index). Beta value is a key component of occupied fl oor-space in relation to rental value. the CAPM (Capital Asset Pricing Model) used to Interest cover: profi t before net fi nancial items in calculate the market’s required rate of return on relation to net fi nancial position. Property type: the properties’ primary usage (see the share. The CAPM indicates that a low beta “Distribution of fl oor-space”). value implies a low required rate of return. Beta Gearing: interest-bearing liabilities at year-end in values relate to a period of 12 months. relation to shareholders’ equity. Rental revenues: rent invoiced, plus supple- mentary items such as remuneration for heating, Mortgage ratio: interest-bearing liabilities in Equity ratio: shareholders’ equity including property tax, insurance claims and other revenues, relation to property book value at year-end. minority shares at year-end in relation to total less rental losses and rental discounts. assets. Dividend yield: dividends paid in the year in Rental value: rental revenues plus assessed relation to the share price at the beginning of the Total yield: the total of the share’s price gains market rent for un-let fl oor-space, rental year. and dividends paid in the year in relation to the discounts and rental losses, less other revenue. closing share price at the beginning of the year. Shareholders’ equity per share: shareholders’ Accommodation type: fl oor-space distributed equity in relation to the number of shares at year- Profit margin: operating surplus in relation to by usage. end. total rental revenue.

Maintenance: measures intended to maintain Book value of property per share: book value of a property and its technical systems. Relates to property in relation to the number of shares at planned measures entailing the replacement or year-end. 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 44 to total lettable fl oor-space 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.

Namnlöst-5 44 04-03-19, 13.36.53 Cyanblå (processfärg)Magentaröd (processfärg)Gul (processfärg) Svart (processfärg) Annual General Meeting

Annual General Meeting Forthcoming reports and Annual General Meeting The Annual General Meeting will be held on 1 April 2004 at • The Annual Report for the fi nancial year 2003 will be 2:00 p.m. in the Grünewaldssal, Stockholm Concert Hall, presented on 10 March Kungsgatan 43, Stockholm, Sweden. • The Interim Report for the period January—March will be presented on 22 April 2004 Application • The Interim Report for the period January—June will be Shareholders wishing to participate in the Annual General presented on 18 August 2004 Meeting must be registered in their own name (i.e. not • The Interim Report for the period January—September will nominee-registered) in the share register maintained by VPC be presented on 21 October 2004 AB (the Swedish Central Securities Depository & Clearing Organisation) AB by no later than 22 March 2004 and must notify their intention to attend by no later than 25 April 2004, using the attached application form or by writing to the company at the following address: Kungsleden AB FAO: Helena Ryhle P.O. Box 70414, 107 25 Stockholm, Sweden E-mail: [email protected] Telephone: +46 (0)8 503 05200 Fax: +46 (0)8 503 05202

Shareholders whose holdings are nominee-registered with a bank custodian account service or other fund manager must temporarily have the shares registered in their own name in the share register maintained by VPC in order to be entitled to participate in the Annual General Meeting. Shareholders must notify their fund managers of this in good time before 22 March 2004.

Dividend The Board and Chief Executive propose that SEK 13.00 per share be distributed to shareholders. The record day for dividends has been proposed as 6 April 2004. If the Annual General Meeting approves the proposal, VPC is expected to distribute the dividends on 14 April 2004.

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Namnlöst-5 45 04-03-19, 13.37.05 Cyanblå (processfärg)Magentaröd (processfärg)Gul (processfärg) Svart (processfärg) Addresses

Head offi ce Guldgränd 5 Box 704 14 107 25 Stockholm Tel +46 8 503 052 00 Fax +46 8 503 052 01

Regional offi ce West Spannmålsgatan 14 Box 112 84 404 26 Gothenburg Tel +46 31 755 56 00 Fax +46 31 755 56 01

Regional offi ce East Guldgränd 5 Box 704 14 107 25 Stockholm Tel +46 8 503 052 00 Fax +46 8 503 052 01

Regional offi ce South Elbegatan 5 211 20 Malmö Tel +46 40 17 44 00 Fax +46 40 17 44 19

Local offi ces West Jönköping Huskvarnavägen 40 554 54 Jönköping Tel +46 36 16 70 07 Fax +46 36 16 70 03

Växjö Norrgatan 23 352 31 Växjö Tel +46 470405 90 Fax +46 470 74 09 20

Trollhättan Polhemsgatan 2 461 30 Trollhättan Tel +46 520 47 63 50 Fax +46 520 47 63 51

Local offi ces East Västerås Smedjegatan 13 722 13 Västerås Tel +46 21 12 52 70 Fax +46 21 12 52 90

Karlstad Lantvärnsgatan 8 Box 1037 75115 Karlstad Tel +46 54 17 50 00 Fax +46 54 17 50 01

Kungsleden Service AB Sjöängsvägen 2 46 192 72 Sollentuna Tel +46 8 626 69 25 Fax +46 8 754 59 00

Namnlöst-5 46 04-03-19, 13.37.16 Cyanblå (processfärg)Magentaröd (processfärg)Gul (processfärg) Svart (processfärg) The images in this Annual Report are of the property designated Finnslätten 5, which is in Västerås, west of Stockholm. This property is part of Kungsleden’s holdings and is intimately linked to contemporary Swedish industrial history. The building was constructed on assignment from ASEA, and was completed in 1961, with a major extension in 1977. The building was designed by Bengt Hidemark. The engineering workshop premises were built to house the manufacture of generators, which as time passed, became progressively larger and heavier. At that time, generators weighed over 1,000 tonnes, and the premises were dimensioned accordingly. The premises have a volume of 853,000 m3; the total fl oor-space is 50,000 sq. m. and the machine-hall ceiling height is 35 m. Overhead travelling cranes with a capacity of 400 tonnes cross the ceiling. Everything in the building is on a gigantic scale, including the cooling fans, which can pump 270,000 m3 of air every hour in through the fl oor and out through the roof. Not only do these huge fans ventilate the premises, but also function as a heat-source because the intake air can be tempered to create a pleasant working environment. ASEA, now part of ABB, divested the premises in 1999, which were acquired by Kungsleden in 2002. Nowadays, Bombardier occupies the premises, which manufactures express train drives. Other tenants include Avure Technologies, GenerPro AB and ABB.

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Namnlöst-5 47 04-03-19, 13.37.17 Cyanblå (processfärg)Magentaröd (processfärg)Gul (processfärg) Svart (processfärg) Citigate Gramma. Print: Strokirk Landströms. Photo: Elena von Kraskowski. Translation: Turner & Turner. 04-03-23, 08.11.01 Svart (processfärg) Gul (processfärg) Magentaröd (processfärg) 1-19.indd 2 Cyanblå (processfärg)