Wihlborgs Fastigheter AB — Annual Report 2018 Wihlborgs Annual Report 2018 Wihlborgs Fastigheter AB (publ) is a property company that focuses on commercial properties in the Öresund region. Its portfolio is located in Malmö, Helsingborg, Lund and Copenhagen. Wihlborgs is the leading property company in Malmö, Lund and Helsingborg. The book value of the company’s properties totals SEK 42.1 billion. The annual rental value of the properties is SEK 3.0 billion. Wihlborgs’ shares are listed on the Large Cap List of Nasdaq Stockholm. Cover image: The office project Posthornet 1 in Lund was ready for occupancy in spring 2018. Wihlborgs 2018 Highlights of the Year 4 Major events 2018 6 Administration Wihlborgs in brief 8 Report CEO’s statement 10 Review of 2018 76 Proposed distribution of profit 78 Goals and Risks and uncertainties 79 Taxes 84 strategies Property valuation principles 86 Mission, goals and strategy 16 Overall goals 18 Financial targets 19 Financial The Wihlborgs share 20 statements Statement of Comprehensive Income 90 Our Statement of Financial Position 91 Group Statement of Changes in Equity 92 operations Cash flow 93 Market overview 24 Income Statement 94 Property portfolio and transactions 26 Balance Sheet 95 Malmö 31 Statement of Changes in Equity 96 Lund 39 Cash Flow Statement 96 Helsingborg 43 Company Parent Copenhagen 49 Notes to Consolidated & Parent Projects and development 54 Company Financial Statements 97 Sustainable business 60 Signatures 114 Responsible business 62 Audit Report 115 Sustainable properties 64 Five-year review 119 Attractive employer 70 Calculation bases and definitions 120 Commitment to the region Corporate Governance Report 122 and its community 72 Sustainability reporting disclosures GRI Index 130 UN Global Compact 133 Sustainability reporting in accordance with the Annual Accounts Act 134 Highlights of the Year Rental income rose 14 percent to SEK 2,684 million (2,351) The operating surplus was up 13 percent at SEK 1,941 million (1,717) Income from property management improved 19 percent to SEK 1,406 million (1,179) Profit for the period totalled SEK 2,403 million (2,568), corresponding to earnings per share of SEK 15.63 (16.71). The Board of Directors proposes a dividend of SEK 3.75 (3.13) per share. Key metrics for the Group, SEK m. 2018 2017 Jan–Dec Jan–Dec Rental income 2,684 2,351 Operating surplus 1,941 1,717 Income from property management 1,406 1,179 Changes in property values 1,312 1,851 Changes in derivative values 37 201 Profit for the year 2,403 2,568 Earnings per share, SEK 15.63 16.71 Surplus ratio, % 72 73 Equity/assets ratio, % 36.3 34.7 Occupancy rate, %* 94 94 *Excluding Projects & Land. CEO’s statement 05 42.1 3.0 PROPERTY VALUE, RENTAL VALUE, SEK BILLION SEK BILLION 1.4 94 INCOME FROM OCCUPANCY RATE, % PROPERTY MANAGEMENT, SEK BILLION 06 CEO’s statement Wihlborgs is ranked twentieth on the Great Place to Work list of At the Annual General Meeting on 25 April 2018, Erik Paulsson Sweden’s Best Workplaces 2018 in the category for medium-sized leaves Wihlborgs’ Board of Directors and Anders Jarl is elected companies – and is also the best company in Skåne in the class. new Chairman of the Board. Ulrika Hallengren succeeds Anders Jarl in the role of CEO. In September, Wihlborgs acquires Nya Vattentornet 3 in the In October, the first earth is turned for Prisma — Wihlborgs’ Ideon district of Lund, containing 21,700 m² of primarily office new office building in the Oceanhamnen district of Helsingborg. space, as well as planning permission for a further 11,000 m². Its spectacular architecture makes Prisma a future city landmark. When the tramway is opened in 2020, people who work in the In autumn 2020, 11,000 m² of ultra-modern premises will be building will be able to take advantage of the adjacent tram stop. ready for occupancy. Major events 2018 In Lund, the Raffinaderiet 3 investment property and the Raffinaderiet 5 project property are acquired. In Copenhagen, the properties, Mileparken 9–11 in Skovlunde and Blokken 84 in Birkeröd, are acquired. Q1 Wihlborgs makes it onto Great Place to Work’s list of Sweden’s Best Workplaces 2018. The Posthornet office building next to Lund Central Station becomes ready for occupancy for tenants including Folktandvården, Veidekke, Avensia and Trivector. At the Annual General Meeting on 25 April 2018, Erik Paulsson resigns as Chairman of the Board and is succeeded by Wihlborgs’ CEO Anders Jarl. Ulrika Hallengren takes over as new CEO. Q2 Exakta signs a lease for 10,700 m² of production space and 4,000 m² of office space at Stenshuvud 3 in the Norra Hamnen district of Malmö. Malmö University signs a lease for 9,000 m² on two floors at Kranen 2 in Dockan, Malmö. The premises will be used for training police officers starting in 2019. Wihlborgs acquires Nya Vattentornet 3 in the Ideon district of Lund, containing 21,700 m² of primarily office space, as well as a multistorey car park and planning permission for a further 11,000 m². Q3 ABB renews its agreement with Wihlborgs and signs a lease for 7,700 m² at Boplatsen 3 in Fosie, Malmö. The agreement will create the preconditions for the continued development of the property and the area. The service centre for trucks and buses spanning 2,300 m² and built by Wihlborgs for MAN Truck & Bus at Stora Bernstorp on the outskirts of Malmö is completed. The first earth is turned for Prisma — Wihlborgs’ new office building in the Oceanhamnen district of Helsingborg. In autumn 2020, 11,000 m² of premises will be ready for occupancy. Q4 Volvo Cars signs a contract for an expansion at Ideon in Lund, where develop- ment operations are increasing significantly — from 2,000 m² to 7,000 m². Wihlborgs acquires two sites at Science Village Scandinavia in Lund, with planning permission for approximately 12,000 m² of commercial space, including buildings such as the iconic Space. 08 Wihlborgs in brief Wihlborgs in brief Our operations Wihlborgs is the leading property company in the Öresund region. Each day, 50,000 people go to work at one of our premises. People in Malmö, Lund, Helsingborg and Copenhagen are all met by city spaces designed by us, and our presence can also be felt in board rooms, club rooms and social forums as the Öresund region grows amid a wave of urban diversity and sustainability. This is the property company Wihlborgs. The region-builder. 1,980 42.1 2.1 Companies as tenants Property value, SEK billion Million square metres COPENHAGEN Wihlborgs in brief 09 Our mission Our sustainability Specialising in efficient sub-markets in Wihlborgs is to ensure the company’s the Öresund region, Wihlborgs will develop and region’s long-term sustainable and own commercial properties, as well development. Our focus is on sustainable as manage them in-house. properties, responsible business, being an attractive employer and commitment to the region and its community. 187 310 16 Full-time employees Properties Market capitalisation, SEK billion LUND HELSINGBORG MALMÖ CEO’s statement 11 Increased flexibility gives us continued stability It is important to keep up with changes in the real world. demands. But a region is built on more than conditions for busi- Since Wihlborgs was listed on the stock exchange in 2005, it ness; a region is built through collaboration based on decisions has experienced fantastic growth — and this past year was no and strategies from different participants — everything goes exception. The numbers say it all, but behind the numbers is an hand in hand in this interchange. undeterred will to maintain our strategy of continued invest- That is why we engage ourselves in every corner of society, ments in long-term and sustainable growth. with multiple points of contact, with investments in jobs, train- It is our commitment, our curiosity and our determination to ing, inclusion and diversity. We are always evaluating how the find new solutions for our customers that drives our develop- region is doing and what its potential is. ment. We do not sit and wait for what might happen: we have We are part of urban development and take responsibility close dialogues with our customers so we can immediately meet here, in all the areas we can. We also have a responsibility to new demands and needs as they arise. explain to the rest of the world what we see in the region. Like That is the key to our success. Not growing complacent, not how you can reach 800,000 workplaces with just a one-hour doing what has always been done, and recognising new possi- commute. If an underground were built between Malmö and bilities before anyone else. With this wind at our backs, we are Copenhagen, that number would increase to 1.3 million work- also a driving force in the community — we listen, we take the places. That says a great deal about the concentrated force initiative and we act. This is a strategy we aim to continue — our in the region. path to new success. We see ourselves as a region-builder. Something in the Öresund region’s atmosphere, faith in the future and the collab- oration between education, business and municipal decision- Profitability provides freedom makers stimulates us to keep contributing to the region’s future. 2018 was yet another record year. Rental income rose 14 percent to SEK 2.7 billion. The oper- ating surplus rose 13 percent to SEK 1.9 billion. Income from It is good to know a little more property management rose 19 percent to SEK 1.4 billion.