Annual Report 2005 Report of the Directors

Kungsleden 2005 1 2 Kungsleden 2005 xxxx Kungsleden 2005 3 Contents

4 This is Kungsleden 36 Annual Report Report of the Directors 5 2005 in summary Income Statement Balance Sheet 6 1999–2005 Change in Shareholders’ Equity Cash Flow Statement 8 Chief Executive’s statement Parent company, ÅRL Note disclosures 10 The share Proposed appropriation of proﬁts

12 Business model 54 Audit Report

14 Organisational and human 55 Deﬁnitions resources Organisational resources 56 Employees Human resources 58 Assets: Properties 16 The property market 63 Divested properties, 2005 18 The property holding and earnings capacity 64 Acquired properties, 2005 The property holding Property values 71 Invitation to the Annual General Meeting Earnings capacity 71 Addresses 25 Financial overview The past year Five-year overview Forecast for 2006

30 Environmental report

31 Corporate governance report Board activities during 2005 Internal control and ﬁnancial reporting procedures Terms for remuneration Management Board 4 Kungsleden 2005 xxxxThis is Kungsleden

BRIEF HISTORY Why do you work for Kungsleden? I started in April 2001, and Kungsleden has been an enjoyable Historically, Kungsleden has featured a brisk tempo of and positive workplace since. It’s definitely the right type of change and a high rate of turnover in its property port- company for me, where things just keep moving. You have to folio. As part of the Retriva AB and the Securum AB like things happening, the rate of change is high. What do you think makes Kungsleden different from other groups, Kungsleden’s assignment was to liquidate sub- property companies? stantial property holdings, and in 1996 to 1997, the com- We differ from other property companies in most respects. pany consummated over 500 property divestments to We’ve got a lot of energy here at Kungsleden, and as a result, the tempo is high. Our business model means we don’t just external parties, involving over 800 properties with an manage properties, but also work on them actively, focusing aggregate value of approximately SEK 4,600 m. on returns. Our corporate culture enjoys benefits from the positive features of our management and staff. In December 1997, former main owner, the govern- How would you describe ‘the Kungsleden spirit’? ment-owned Agilia Holding AB, span off Kungsleden It’s a warm, energetic atmosphere. We work very hard, and to to a group of institutional investors. The business con- cope you’ve got to enjoy it, and we do. cept was realigned to Kungsleden owning and manag- What deal do you think is Kungsleden’s best so far? When we acquired Föreningssparbanken’s holding in 1998, ing properties to generate high and stable long-term which marked the start of Kungsleden’s successful expansion. property yields. The vision of utilising and enhancing the The holding was large and diversified, with good prospects of adding value to its various parts. company’s skills in structuring heterogeneous holdings What is Kungsleden’s biggest asset, and why? was linked to this business concept. When ownership Our management, staff and working atmosphere. In other changed hands, the ambition to float Kungsleden was words, the biggest asset is our human capital. What do you expect from 2006? also established. That we’ll get even bigger and better. While it seems unlikely Kungsleden was named after Sweden’s famed 450 that as much will happen in 2006 as 2005, you’re never sur- km arctic hike, and is intended to allude, to the long prised by what happens, and that’s what is so much fun. What do you think Kungsleden could get better at? march of one of Sweden’s ancient kings, enjoying a I think we’re pretty good at most things. Possibly, we could broad perspective, with the benefit of overview and get even faster and more structured when we bring in new objectives clear in the distance. properties.

Maléne Broman Property Manager, East Region Employed: 2001 Age: 34 Kungsleden 2005 5 2005 in summary

• Proﬁt before tax was SEK 2,116 (500) m and proﬁt after tax was SEK 1,987 (877) m, equivalent to SEK 48.10 (21.70) per share.

• Kungsleden’s rental revenues and operating net increased by 29 (4) and 28 (11) per cent respectively to SEK 1,845 (1,429) m and 1,304 (1,017) m.

• During the year, 56 properties were divested for SEK 2,917 m generating proﬁts of SEK 318 m and cash ﬂow of SEK 403 m; 466 properties were acquired for SEK 13,351 m.

• Proﬁt for calculating dividends was SEK 1,001 m, or SEK 22 (14) per share. The Board is proposing dividends increasing by 56 per cent to SEK 11 (7) per share.

• The Board intends to propose a 3:1 share split to the AGM.

• Kungsleden is forecasting proﬁt for calculating dividends of SEK 1,500 m for the ﬁnancial year 2006.

Acquisitions Disposals Property trading

466 properties 56 properties Disposals SEK 13,351 m SEK 2,917 m profitable 31 properties SEK 377 m loss-making 9 properties SEK –29 m 7.3% property 5.8% property Sales overhead SEK –30 m yield yield Profit SEK 318 m Realised value changes SEK 85 m Cash flow from trading SEK 403 m

Earnings capacity 2004 2005 Operating net SEK 1,054 m SEK 1,845 m Property yield 7,8% 7.2% –Acquisitions and disposals 0.2% –Management of properties owned for the full year –0.2% –Value adjustment –0.6% More municipalities 91 148 Reduction of value per property SEK 36 m SEK 33 m

Kungsleden has a dual operational focus: property trading and property management. The property yield of earnings capacity was 7.2 (7.8) per cent at year-end. Acquisitions and disposals in the year contributed to increasing the yield on the property portfolio by 0.2 percentage points. Property management generated a negative 0.2 percentage point effect. Positive value changes in the year reduced the portfolio’s property yield by 0.6 percentage points. 6 Kungsleden 2005 xxxxKungsleden 1999–2005

At its initial public offering (IPO) in 1999, Kungsleden owned SEK 5 bn-worth of properties with an operating net of SEK 403 m. Six years later the property portfolio is five times larger—SEK 25.8 bn—and operating net has increased to SEK 1,304 m. Average annual profit growth was 46 per cent since 1999 and profit was SEK 1,987 m in 2005. This progress occurred in an era when the Swedish property market was transfor- ming. But Kungsleden maintained a consistent focus throughout—generating Share price and total return Total property values and value per property Total floor-space SEK % sustainable high and stable returns by continually enhancing its property portfolio.SEK bn SEK m 000 sq.m. 000 sq.m. 250 100 40 40 4,000 4,000 Kungsleden has maintained a high transaction rate, acquiring a total of 832 proper- 35 35 3,500 3,500 200 80 ties for SEK 27.6 bn and disposing of 666 for SEK 10.3 bn since the beginning of30 1999. 30 3,000 3,000 25 25 150 60 2,500 2,500 20 20 2,000 2,000 100 40 15 15

10 10 1,500 1,500

50 20 5 5 1,000 1,000 SHARE PRICE PERFORMANCE 99 00 01 02 03 04 05 99 00 01 02 03 04 05 Property value Value per property 0 0 99 00 01 02 03 04 05 Share price and total return Total property values and value per property Total floor-space SEK % Closing price SEK bn SEK m 000 sq.m. 000 sq.m. 250 100 Total return 40 40 4,000 4,000 Share price and total return 35Total property values and value per property 35 Total floor-space SEK % 3,500 3,500 SEK bn SEK m 000 sq.m. 000 sq.mProperty. categories, 1999 Property categories, 2005 200250 100 80 3040 3040 4,000 Total4,00 0book value SEK 5,229 m Total book value SEK 25,750 m Operating- and trading net 3,000 3,000 Retail 12 % Care 7 % 2535 2535 2,000 3,500 3,500 Other 13 % 150200 6080 2,500 2,500 Other11 % 2030 2030 Schools 4 % 3,000 3,000 2,000 2,000 Offices 58 % Offices 31 % 1525 1525 100 40 Kungsleden’s market capitalization was1,500 SEK 10.5 bn at year-end 2005, 150 60 2,500 2,500 compared1020 to SEK 1.1 bn at its IPO in April 1999. Accordingly,1020 market capi-1,500 1,500 talization increased by an annual average of 33 per cent in this period. In-2,000 2,000 10050 2040 155 155 1,000 1,000 cluding dividends, returns in the period1,000 averaged 42 per cent per annum. 99 00 01 02 03 04 05 1,500 99 00 01 02 03 04 05 1,500 10 Total dividends for 1999–2005 (the Board’s proposed dividend10 is as- Property value Value per property 500 200 99 00 01 02 03 04 05 sumed5 for 2005) amount to a total of SEK500 36.25 per share, which5 is higher1,00 0 1,000 than the99 share00 price at01 the IPO02 of SEK 33.00.03 The04 calculation05 of compara- 99 00 01 02 03 04 05 Closing price Property value Value per property 0 Total return 0 tive figures considers the 2:1 split conducted in 2005. 99 00 01 02 03 04 05 0 99 00 01 02 03 04 05 Industrial/warehouse 19 % Retirement homes 19 % Closing price Operating net Total return Property categories, 1999 Property categories, 2005 Industrial/warehouse 14 % Trading net Total book value SEK 5,229 m Total book value SEK 25,750 m Operating-PROFIT and PERFORMANCE trading net Retail 12 % Retail 12 % Care 7 % Other 13 % 2,000 PropertyOther11 categories, % 1999 Property categories, 2005 Total book value SEK 5,229 m Total book value SEK 25,750 m Operating- and trading net Property yield Schools 4 % Retail 12 % Offices 58 % Number of municipalitiesCare 7 %and majorOffices cities 31 % % Other 13 % 1,5002,000 10 Other11 % 200 Schools 4 % 200 Offices 58 % Offices 31 % 8 1,0001,500

150 150 6 1,000500

4 100 100

5000 99 00 01 02 03 04 05 2 Industrial/warehouse 19 % Retirement homes 19 % Operating net 50 Industrial/warehouse 14 % 50 Trading net 0 0 Retail 12 % 99 00 01 02 03 04 05 99 00 01 02 03 04 05 Industrial/warehouse 19 % Retirement homes 19 % Operating net Industrial/warehouse 14 % Trading net 0 0 Property yield Retail 12 % Number of municipalities and major cities 99 00 01 02 03 04 05 Kungsleden’s% operating net and trading net virtually doubled in The yield on the property portfolio, i.e. operating net in relationMunicipalities to Share in Stockholm, Gothenburg, Öresund 10 1999–2005, with an average annual rate of increase200 of 20.3 per average book value of properties,20 was0 7.7 per cent in 1999-2005. Property yield cent. The cash ﬂow from operating net and tradingNumber net in 2005of municipalities andKungsleden’s major cities ambition is to continually enhance the risk/return %8 was10 twice the level of 1999. The average annual rate of increase relationship through property trading and active management. 200 200 is 42 per cent. 150 150 6 8

4 150 150 100 100 6 Property disposals, proﬁtable and loss making 2 Number of acquisitions and disposals 4 SEK m SEK m 100 100 50 50 No. No. 400 400

500 500 0

350 31 350 2 99 00 01 02 03 04 05 300 300 50 50 400 400 0 0 0 250 250 99 00 01 02 03 04 05

99 00 01 02 03 04 05 200 200 300 300 Municipalities Share in Stockholm, Gothenburg, Öresund 60

150 150

0 0 50 59 96 99 00 01 02 03 04 05 200 200 100 100

55 Municipalities Share in Stockholm, Gothenburg, Öresund 50 83 50 No. of properties

100 100 0 0 57 44 17 17 33 9 39 –20 –20

0 0 –40 –40 99 00 01 02 03 04 05 99 00 01 02 03 04 05

Property disposals, Acquisitions Disposals proﬁtable and loss making Number of acquisitions and disposals SEK m SEK m No. No. 40Pr0operty disposals, 400

500 500 proﬁtable and loss making Number of acquisitions and disposals 350 31 350 SEK m SEK m 300 300 400No. 400No. 400 400

500 500 250 250

350 31 350

200 200 300 300 300 60 300

400 400

150 150 50 59

250 96 250 200 200 100 100

200 200 300 300 55 83 50 60 50

150 150 No. of properties 50 59

0 0

100 100 96 57 44 17 17 33 9 200 200 100 39 100

–20 –20 55 50 83 50 0 0 –40 –40 No. of properties

100 99 00 01 02 03 04 05 100 0 99 00 01 02 03 04 05 0 57 44 17 17 33 9 39 Acquisitions Disposals –20 –20

0 0 –40 –40 99 00 01 02 03 04 05 99 00 01 02 03 04 05

Acquisitions Disposals Share price and total return Total property values and value per property Total ﬂoor-space SEK % SEK bn SEK m 000 sq.m. 000 sq.m. 250 100 40 40 4,000 4,000

35 35 3,500 3,500 200 80 30 30 3,000 3,000 25 25 Share price and total return150 60 Kungsleden 2005 Share priceTotal and prtotaloperty return values and value per property Total floor-space 2,500 2,500 7 SEK % 20 Total property values and value per property 20 Total floor-space SEK SEK bn % SEK m 000 sq.m. 000 sq.m. 250 100 SEK bn SEK m 2,000 000 sq.m. 2,000 000 sq.m. 250 40 100 40 4,000 4,000 100 40 15 40 15 40 4,000 4,000 35 35 10 35 3,500 10 35 1,500 3,500 1,500 200 80 3,500 3,500 200 80 50 30 20 30 5 30 3,000 5 30 1,000 3,000 1,000 3,000 3,000 25 99 00 01 02 2503 04 05 99 00 01 02 03 04 05 150 60 ENHANCING25 THE HOLDING 25 150 60 Property value Value per property2,500 2,500 0 20 0 20 2,500 2,500 99 00 01 02 03 04 05 20 20 2,000 2,000 100 SharClosing40 Share pricepricee price15 and andtotal total return return 15 2,000 2,000 100 40 Total15 Total property property values values and andvalue value per perproperty property 15 TotalTotal floor floor-space-space SEKTotal SEKreturn % % 1,500 1,500 10 SEK SEKbn bn 10 SEK SEKm m 000 sq.m000 sq.m. . 000 sq.m000 sq.m. . 250 250 100 100 10 10 1,500 1,500 40 40 40 40 4,0004,000 4,0004,000 50 20 5 5 1,000 1,000 50 20 5 5 Share price and totalShar ree priceturn and total35 return35 Property categories,35 35 1999 1,000 Property categories, 2005 1,000 99 00 01 02 Total03 property04 valuesTotal05 and property value valuesper property and valueTotal book99 per value property SEK00 5,229 m 01 023,5003,500Total03 floor04-spaceTotal bookTotal05 value floor SEK -space25,750 m 3,5003,500 Operating-200 and200 tradingSEK net SEK 80 80 % 99 %00 01 02 03 04 05 99 00 01 02 03 04 05 Property value 30 30 SEK bnValue per propertySEK bn 30 30SEK m SEK000 m sq.m. 000 sq.m. 000 sq.m. 000 sq.m. 0 0 250 250 100 Property100 value Value perRetail property 12 % Care 7 % 0 0 40 40 40 3,0003,0004,00400 4,000 3,0003,0004,000 4,000 99 00 01 02 03 04 05 Other 13 % 2,000 99 00 01 02 03 04 05 25 25 Other11 %25 25 Closing price 150 150 60 60 35 35 35 2,5002,500 35 Schools 4 % 2,5002,500 Closing price 3,500 3,500 3,500 3,500 Total return 200 200 80 20 20 80 Offices20 20 58 % Offices 31 % Total return 30 30 30 30 1,500 2,0002,0003,000 3,000 2,0002,0003,000 3,000 100 100 40 40 15 15 15 15 25 25 25 25 150 150 60 60 Property categories, 1999 Property1,5001,50 categories,0 2005 1,5001,500 10 10 Total book value SEK 5,229 m Property10 categories,10 Total book 1999 value SEK2,50 25,7500 m 2,500 Property categories, 2005 2,500 2,500 Operating- and trading net 20 20 Total book value SEK20 5,229 m 20 Total book value SEK 25,750 m 1,000 50Operating-50 and trading net 20 20 Retail 12 % Care 7 % 5 5 Retail5 12 %5 1,0001,0002,000 2,000 Care 7 % 1,0001,0002,000 2,000 2,000 100 100 40 15 40 15 15 Other 13 15% 99 99 00 00 01 01 02Other1102 %03 03 04 04 05 05 99 99 00 00 01 01 02 02Other 0313 %03 04 04 05 05 2,000 Other11 % Schools1,500 4 % 1,500 1,500 1,500 500 10PropertyProperty value value 10 ValueValue per property per property 10 10 Schools 4 % 0 0 0 0 Offices 58 % Offices 31 % 99 0099 0100 0201 0302 0403 0504 05 Offices 58 % Offices 31 % 1,500 50 50 20Between5 199920 and 2005,5 Kungsleden’s property portfolio values 5 Between1,0050 2001 and 1,002004,0 the total floor-space of Kungsleden’s 1,00hol0- 1,000 1,500 ClosingClosing price price 99 00 9901 0002 0103 0204 0305 04 05 99 00 9901 0002 0103 0204 0305 04 05 0 Total Totalreturn return grew from SEK 5.2 bn to SEK 25.8 bn, equivalent to an annual ding was fairly stable at about 2,000,000 sq. m. The acquisition of 99 00 01 02 03 04 05 Property value Property value Value per property Value per property 0 0 0growth of 28 per0 cent. The value per property was Industrial/warehousemore consistent, 19 % properties from JM and EricssonRetirement was homes the main 19 % reason for the ex- 1,000 Operating net 99 00 01 02 03 9904 0005 01 02 03 04 05 1,000 pansion in the period 1999–2001.Industrial/warehouse 2005 14 featured % robust expansion Trading net with annual gains of 22 per cent. One contributor to the increasing Closing price Closing price PropertyProperty categories, categories, 1999 1999 PropertyProperty categories, categories, 2005 2005 value per property is that retirement home properties areTotal bookTotaloften bookvalue lar valueSEK- 5,229SEK 5,229 m m with acquisitions of 466RetailTotal properties, 12 bookTotal % bookvalue valueSEK explaining 25,750SEK 25,750 m m the expansion of total Operating-Operating- and andtradingTotal trading return net net Total return 500 ger than average. RetailRetail 12 % 12 % floor-space to 3,790,000 sq.m.CareCare 7 % 7 % 500 2,0002,000 OtherOther 13 % 13 % Property yield Other11Other11 % % Number of municipalities and major cities Property categories,Property 1999 categories, 1999 PropertySchoolsSchools categories, 4 % 4 %Property 2005 categories, 2005 Total book value SEK 5,229Total m book value SEK 5,229 m Total book value SEK 25,750Total mbook value SEK 25,750 m 0 % Operating- and tradingOperating- net and trading net OfficesOffices 58 % 58 % OfficesOffices 31 % 31 % 99 00 01 02 03 1004 05 0 Retail 12 % Retail 12Retirement % homes 19 % Care 7 % Care 7 % 1,5001,50099 00 01 02 03 04 05 200 Industrial/warehouse 19 % 200 Operating net Industrial/warehouse 19 % Retirement homes 19 % 2,000Operating net 2,000 Industrial/warehouse 14 % Other 13 % Other 13 % Trading net Other11 % Other11 % Industrial/warehouse 14 % 8 Trading net Retail 12 % Schools 4 % Schools 4 % Retail 12 % 1,0001,000 Offices 58 % Offices 58 % Offices 31 % Offices 31 % 150 150 1,500 6 1,500 Property yield Property yield Number of municipalities and major cities % 500 500 Number of municipalities and major cities 4 10 % 1,000 1,000 100 100 10 200 200 200 200 2 8 0 0 99 9900 0001 0102 0203 0304 0405 05 8 500 500 50 Industrial/warehouse50 Industrial/warehouse 19 % 19 % RetirementRetirement homes homes 19 % 19 % OperatingOperating net 150net 150 0 Industrial/warehouseIndustrial/warehouse 14 % 14 % 6 TradingTrading net net 150 150 99 006 01 02 03 04 05 RetailRetail 12 % 12 % 0 0 99 00 01 02 0399 0400 0501 02 030 04 05 0 4 Industrial/warehouseIndustrial/warehouse 19 % 19 % Retirement homes 19Retirement % homes 19 % 4 Operating100 net Operating net 100 99 100 00 01 02 03 04 05 100 Industrial/warehouseIndustrial/warehouse 14 % 14 % PropertyProperty yield yieldTrading net Trading net NumberMunicipalitiesNumber of municipalities of municipalitiesShare inand Stockholm, andmajor major citiesGothenburg, cities Öresund 2 % % Retail 12 % Retail 12 % 102 10 50 Coincident200 with200 its IPO in 1999, Kungsleden50 owned property in 176 of20 0 200 The focus on care, school and retirement homes in recent years is 50 50 0 Property yield Property yield Sweden’s 290 municipalities, a result of the holding comprising the the biggest change to Kungsleden’s property holding. At year-end 99 00 01 02 03 04 05 80 8 99 00 01 02 03 04 05 Number of municipalitiesNumber ofand municipalities major cities and major cities % % assets accumulated within Bankstödsnämnden, the government 2005, these property types accounted for approximately 30 per cent 10 0 10 bank support150 150 commission formed during0 the financial crisis of the 150 150 of total portfolio value. In terms of book value, offices remain the lar- 6 6 0 200 200 0 200 200 99 00 01 02 03 04 05 1990s. By year-end99 2005,00 the holding01 had02 reduced03 to 14804 municipali05 - gest type. 8 8 Municipalities Share in Stockholm, Gothenburg, Öresund ties, mainly becauseMunicipalities opportunities forShare doing in Stockholm, lucrative Gothenburg, property Öresun dealsd 4 4 100 100 10Pr0operty100 disposals, had focused on 150certain regions.150 The concentration of Kungsleden’s profitable150 and loss makin15g0 6 6 holding on the major city Numberregions of of acquisitions Stockholm, and Gothenburg disposals and Mal- 2 2 SEK m SEK m mö increased from 36 perNo cent. in 1999 to 54 per cent in 2005.No. 400 400

4 4 50 50 500 500 50 50

100 100 350 100 100 31 350 0 0 99 0099 0100 0201 0302 0403 0504 05 PROPERTY TRADING 300 300 2 2 400 400 250 250 0 0 0 0 50 50 Property disposals, 50 50 200 200 99 99 0030000 01 01 02 02 03 03 30004 04 05 05 Property disposals, 0 0 proﬁtable and loss making 60

Number of acquisitions and disposals proﬁtable and loss making 99 00 01 02 039904000501 02 03 04 05 150 150 MunicipalitiesMunicipalities ShareShare in Stockholm, in Stockholm, Gothenburg, Gothenburg, Öresun Öresund d 50

Number of acquisitionsSEK m and disposals SEK m 59 No. No. 96 SEK m SEK m 200 400 200 100 400 100

0No. No. 0 500 0 500 0 400 400 55 50 83 50 500 500

350 31 350 99 00 9901 0002 0103 0204 0305 04 05

350 31 350 No. of properties

0 0 100Municipalities MunicipalitiesShare 30in 0Stockholm,100 Gothenburg,Share in Stockholm, Öresund Gothenburg,300 Öresund 57 44 17 17 33 9 400 400 39 300 300 400 250 400 –20 250 –20 250 250

0 200 0 –40 200 –40 300 300

99 00 01 02 03 04 05 60 99 00200 01 02 03 04 05 200

300 300

150 150

Acquisitions 59 Disposals 150 150 96 50 59

200 200 100 Pr10operty0Property96 disposals, disposals,

200 200 100 100

proﬁtableproﬁtable and andloss loss makin making g

55 NumberNumber of acquisitions of acquisitions50 and anddisposals disposals 83 50 55 SEK50 mSEK m 83 SEK50 mSEK m No. of properties

100 100 0 0 No. No. No. No. No. of properties

57 44 17 17 33 9 0 0 100 39 100 400 400 400 400

500 500 500 500 57 44 17 17 33 9 –20 –20 39 Property disposals,Property disposals,

35–200 350 31 31 35–200 350 0 0 –40 –40 proﬁtable and losspr oﬁtablemaking and loss making 99 00 01 02 03 04 05 0 Number of acquisitions99 00Number01 and02 of acquisitionsdisposals030 04 05 and30–400 disposals300 30–400 300 400 400 99 00 01 02 03 04 05 400 400 99SEK00 m 01 02 03 SEK04 m 05 SEK m SEK m No. No. Acquisitions Disposals No. No. 250 250 400 400 250 250 400 400 Acquisitions

Disposals500 500 500 500

200 200 200 200 31 300 300 300 300 350 350 31 350 350 60 60

15The0 15 0ﬁgure illustrates proﬁtable15 and0 15 0loss-making property disposals

In the period 1999–2005, Kungsleden acquired 832 properties and dis- 300 50 50 300 300 300 400 400 59 59

400 400 96 96 posed 666. 2005 was the most transaction200 200 intensive year so far,200 with200 10in0 10each0 25 year.0 The highest250 proﬁt10 from0 100 property250 trading25 was0 achieved

55 55 in 2005, a trading net of83 SEK83 318 m. In the period, an average of 32

50 50 50 50 over 500 acquired and disposed properties. 200 200 200 200 300 300 300 300 60 60 No. of properties No. of properties

100 100 100 100 per0 cent0 of disposals generated0 a loss.0

150 150 150 150 50 50 57 57 44 17 44 17 17 33 17 33 9 9 39 39 59 59 96 –20 –20 96 –20 –20 200 200 200 102000 100 100 100

–40 –40 –40 –40

0 0 0 0 55 55 83 50 50 83 50 50 99 9900 0001 0102 0203 0304 0405 05 99 9900 0001 0102 0203 0304 0405 05 No. of properties No. of properties

100 1000 0 0 0 Acquisitions100 Acquisitions 100

DisposalsDisposals 57 44 17 17 33 9 57 44 17 17 33 9 39 39 –20 –20 –20 –20

0 0 0 –40 0 –40 –40 –40 99 00 01 02 0399 0400 0501 02 03 04 05 99 00 01 02 0399 0400 0501 02 03 04 05

Acquisitions DisposalsAcquisitions Disposals 8 Kungsleden 2005 xxxxA record transaction tempo creates new opportunities

Kungsleden posted proﬁt gains for the ninth consecutive year—a robust increase of 127 per cent to SEK 1,987 m. Moreover, the size of our property holding doubled in 2005 to SEK 26 billion. Our record transaction tempo, with acquisitions of several classic Kungsleden holdings, offers exciting opportunities for the future. With a decentralised, ﬂexible organisation and good entrepreneurship, Kungsleden is well equipped to create new shareholder value.

Kungsleden has always kept its focus on transactions. and Fogelviks Holding, and the one we bought from Norr- Just over a year ago, we took a decision to shift our trans- vidden, are classic Kungsleden portfolios, which will gen- action rate up another gear, because we wanted to exploit erate new and attractive business opportunities. the good business opportunities we perceived—the com- We also sustained initiatives on new types of prop- bination of favourable interest rates and a plentiful selec- erty in the year, particularly those for care, such as health- tion of attractive acquisition targets. Against this back- care centres. Well-located healthcare centres are a type of drop, in February, we announced that in 2005, Kungsleden property enjoying attractive risk/return levels—fully con- would acquire SEK 4–6 billion-worth of properties, and sistent with our business concept. This type of property divest SEK 1–2 billion-worth. has attractive and stable tenants, and comprises prem- But the potential for doing good business proved ises that will be in demand regardless of the healthcare greater than even we dared hope. Now the year has sector’s current restructuring. However, these properties passed, we see that we acquired over SEK 13 billion-worth do require high standards of management and develop- of properties, while our disposals were nearly SEK 3 bil- ment. Our experience from segments including retirement lion. Property trading provided healthy results, with a cash homes offers us good prospects of advancing our posi- flow of SEK 403 m, and meanwhile, property management tioning as the leading landlord in this segment. Overall, posted an operating net as high as SEK 1,304 m against care properties comprised approximately 7 per cent of our SEK 1,017 million in the previous year. property portfolio values at year-end 2005. Overall, we were able to post record profits for the We also increased investments in retail properties in eighth consecutive year, this time of SEK 1,987 m after tax, the year, where we noted investment opportunities that equivalent to an increase as high as 127 per cent com- are very consistent with our risk/return philosophy. The pared to pevious year. Our profits for calculating divi- properties we acquired last spring, whose main tenants dends, based on cash flow, doubled to SEK 1,001 m, con- are the major food providers ICA and Axfood, feature high sistent with the forecast we updated in the year. We’re very demand, stable tenants and long rental contracts. The proud of these figures. majority of our retail premises were divested in early 2006, Our property holding expanded from SEK 13.5 billion for a healthy surplus. to SEK 25.8 billion in 2005, making a big contribution to Overall, 2005 was a fantastic year for the property sec- operating net. Kungsleden consummated a rights issue tor, and I think conditions look at least as good for the cur- in the autumn, providing us with the necessary financial rent year, despite interest rates probably being slightly strength to make this scale of investment. Notably, we higher. A positive legal structure, a transparent market gained the opportunity to acquire some large holdings, and multiple players looking to do business in Sweden are which mean major opportunities for the future, because some of the arguments favouring a sustained brisk trans- as the reader will undoubtedly be aware, our organisation action tempo. specialises in structuring heterogeneous property hold- Moreover, Kungsleden possesses a well-rooted ings. The holding we acquired from Weland Fastigheter regional, flexible organisation, a broad-based network Kungsleden 2005 9

that we know can act quickly, and good entrepreneurship. Thus Kungsleden is well equipped to face its future, enjoys good prospect of generating substantial earnings and conducting a wealth of transactions well suited to our organisation. Our forecast for 2006 is for proﬁts for calculating dividends of SEK 1,500 m, a 50 per cent increase on 2005. Dividend growth is likely to remain healthy. At the time of writing I have been Kungsleden’s Chief Executive for 13 years, seven of which as a quoted company, and they’ve been fantastic years. We’ve created an entrepreneurial quoted company out of a government- owned entity intended for conducting liquidations, we’ve done a lot of good business and increased proﬁts, through acquisitions and divestments and the operating net on our property holdings. Since our IPO in 1999, our holding has expanded from SEK 5.2 billion to SEK 25.8 billion today, with earnings capacity of SEK 1,845 m. Total returns— value growth and dividends paid in 1999 to 2005 inclusive—have averaged 42 per cent per year. At a time like this, handing over to someone who can take Kungsleden into its next exciting developmental phase feels natural. I will remain in position as Chief Executive until the mid-point of the year, and will put my services at the disposal of the company until year-end. But now, I’d like to take this opportunity to thank all my colleagues and shareholders for entrusting me to lead Kungsleden’s progress through this fantastically rewarding period.

Jens Engwall Chief Executive 10 Kungsleden 2005 xxxxThe Share

Compared to the closing price at year-end 2004, of SEK 125.5 adjusted for the split, Kungsleden’s share price rose 83 per cent in 2005. The share generated total returns of 89 per cent. In the same period, the SIX Return Index generated total returns of 34 per cent. A 2:1 split and new issue were conducted in 2005.

Market capitalisation and turnover Shareholders as of 31 December 2005 Kungsleden’s share has been quoted on the Stockholm % of vote and Shareholder No. of shares capital Stock Exchange since 14 April 1999. The closing price on Robur 1,528,204 3.4 30 December 2005 was SEK 230.0, equivalent to mar- JP Morgan Chase Bank 1,268,801 2.8 Olle Florén with companies 950,000 2.1 ket capitalization of SEK 10,465 m. A total of 28.4 million SHB/SPP Mutual Funds 764,562 1.7 shares were turned over, equal to 62 per cent of the total State Street Bank and Trust 747,934 1.6 number of outstanding shares. The year low and high were FSO Försäkringsföreningen 716,520 1.6 SIS Sega Intersettle AG 703,082 1.5 SEK 116.8 and SEK 236.0 respectively. Against the closing DFA-Intl SML Cap Val Port 587,400 1.3 price at year-end 2004 of SEK 125.5, the share price rose Swedish Red Cross 568,080 1.2 by 83.3 per cent. This includes the 2:1 split conducted in Mellom Omnibus 487,002 1.1 Total, 10 largest shareholders 8,321,585 18.3 May 2005, whereupon the closing price for 2004 has been Foreign shareholders, other 7,662,853 16.8 recalculated for the new number of outstanding shares. Other shareholders 29,516,250 64.9 Total 45,500,688 100.0 Dividends paid were SEK 7, implying a total yield of 89.2 per cent. Average total yields over the last five years have been 47.5 per cent. In 2005, the CREX (Carnegie Real Dividend policy Estate Index) gained 32.9 per cent, while the SAX (Stock- The Board of Directors’ ambition is to maintain stable divi- holm All-share Index) gained 32.6 per cent. dends, with a high pay-out ratio. This policy stipulates dividends of at least 50 per cent of profits for calculating dividends. This profit measure corresponds to the cash flow Share capital statement item cash flow from operating activities before At year-end, Kungsleden’s share capital was SEK change in working capital. 56,875,860 divided between 45,500,688 shares, each with For the financial year 2005, the Board is proposing divi- a nominal amount of SEK 1.25. Each share has one vote dends of SEK 11 per share, equivalent to a dividend yield and confers equal rights to participation in the company’s of 4.8 per cent in terms of the closing price at year-end 2005. assets and profits. The 2:1 split conducted in May 2005 increased the number of shares from 18,958,620 to 37,917,240. After Profit for calculating dividends, 1999–2005

the SEK 1,001 m new issue conducted in October 2005, SEK m the number of shares increased by another 7,583,448 to 1,100 1,000 45,500,688 shares. 900 800 700 Shareholders 600 Kungsleden had some 18,100 shareholders as of 31 500 400 December 2005, a 34 per cent increase on the previ- 300 ous year. At the time of its IPO, it had approximately 1,700 200 100 shareholders. At year-end, the ten largest shareholders 0 controlled 18.3 per cent of the capital and votes. Private 1999 2000 2001 2002 2003 2004 2005 investors constituted 50.1 per cent of the total, and foreign Proﬁt for calculating dividends Approved dividends owners, 25.2 per cent. Dividend policy Kungsleden 2005 11

Why do you work for Kungsleden? Jens Engwall made a big impression on me in a debate I was listening to. Then, a year later, when Kungsleden was looking for a manager, I thought it was obvious that I should apply, largely because I like the business concept and brand. What do you think makes Kungsleden different from other property companies? Its perspective, and that means rather than proceeding from property locations or status, Kungsleden looks at financial potential. How would you describe ‘the Kungsleden spirit’? It’s that it’s a large property company, but it feels like working for a small enterprise. There’s scope for personal ambition, and the decision-paths are short. How do tenants know that Kungsleden owns their property? We’ve got the ability to find good solutions for our tenants, because we’re creative and care that they’re satisfied. What is Kungsleden’s biggest asset, and why? Kungsleden’s organizational resources are its primary asset, featuring common sense, creativity and a high level of know-how. What was the biggest change in your work in the year? That was when I got responsibility for customer care issues. I’ve also re- Fredrik Sörling tained a small portion of my management assignments. Property Manager, What do you think Kungsleden could get better at? South Region Age: 33 We could be more prepared and plan more ahead of major acquisitions. In Employed: 2004 the most recent processes, we’ve lost a bit of what we’re good at because there’s been so much to process.

The share Analyst monitoring

Kungsleden The following ﬁnancial analysts monitor OMX Stockholm Kungsleden on an ongoing basis: Share turnover, 000s SEK Carnegie Real Estate Index (including after-hours trading) 250 Bernd Stahli Fredrik Skoglund 200 Merrill Lynch London Carnegie

150 +44 (0)207 996 1205 +46 (0)8 676 8800

100 Jonas Bäcklund Tobias Kaj Handelsbanken Swedbank Markets +46 (0)8 701 8016 +46 (0)8 585 90000 50 5,000 Jonas Andersson Olof Nyström 4,000 ABG Sundal Collier Hagströmer & Qviberg 3,000 +46 (0)8 566 28600 +46 (0)8 696 1700 2,000 1,000 Lars-Ola Hellström 15 Kaupthing Bank 1999 2000 2001 2002 2003 2004 2005 © SIX +46 (0)8 791 4800

Total yield

The share (including dividends) SEK SIX Return Index 400 320

240

160

20 1999 2000 2001 2002 2003 2004 2005 © SIX 12 Kungsleden 2005 xxxxBusiness model

Kungsleden’s business model is oriented on altering the composition of its property portfolio to match tendencies identiﬁed on the Swedish property market. The objective is to increase the portfolio’s risk-adjusted returns. Established objectives can be achieved by conducting multiple, fast transactions, while simultaneously managing Interest coverage

properties in the holding efﬁciently. Multiple 3.5

3.0 Kungsleden’s focus RISK2.5 LIMITS 2,0 Kungsleden is a transaction-intensive property company We limit risk by: 1.5 that views returns as more important than property type •1.0 Sourcing a maximum of 30 per cent of rental revenue

or geographical location. The company works actively to 0.5from industrial and warehouse properties; enhance the risk-adjusted returns of its property portfolio. •0.0 Sourcing a maximum of 30 per cent of rental revenue 1999 2000 2001 2002 2003 2004 2005 Its ambition is for cash flows from operating activities to from properties located in municipalities with popula- always be high and stable. Operational risk is minimized tions Interestof less coverage than level 25,000;Interest coverage objective by diversifying between property types, geographical • A minimumMinimum interest interest coverage coverage multiple multiple of 1.5. markets and tenants, and by spreading rental contracts over time. Return on equity The composition and quality of the property holding is % in continuous development. General and risk diversifica- 40 35 tion implies low operating risk and stable revenues. A sig- 30 nificant portion of revenues are sourced from public sec- 25 tor tenants, or from tenants whose operations are publicly 20 15 financed. Kungsleden’s initiatives in properties with pub- 10 lic operations are within the framework of three business 5 areas: Care, Schools and Retirement Homes. These prop- 0 1999 2000 2001 2002 2003 2004 2005 erty types typically have high risk-adjusted returns. Return on equity level Return on equity objective

Vision Interest coverage By means of skilled entrepreneurship and a high level of Multiple 3.5 expertise, Kungsleden will become Sweden’s most proﬁt- 3.0 able and successful property company. 2.5

2,0 Business concept 1.5 Kungsleden owns and manages properties, generating 1.0 high and stable long-term returns. 0.5 0.0 1999 2000 2001 2002 2003 2004 2005 Strategy Interest coverage level Interest coverage objective We intend to achieve our objectives by: Minimum interest coverage multiple • Enhancing our skilled and businesslike organisation; • Pursuing customer satisfaction through the active man- OPERATIONS AND EXECUTION Return on equity agement and enhancement of our property holding; The% concept of risk-adjusted returns means Kungsleden • Proceeding from our existing holding, and through takes40 a composite view of returns; returns cannot be con- acquisitions and disposals, assuring high long-term sidered35 without risk levels. To identify the measures that 30 returns. could improve portfolio risk-adjusted returns, Kungsleden 25 uses20 a business control model. FINANCIAL TARGETS 15 10 Business control Our objectives are: 5 • A minimum return on equity of 15 per cent; The0 control model provides the organization with support- 1999 2000 2001 2002 2003 2004 2005 • An interest coverage multiple of 2. ing data for taking a standpoint on each individual property. TheReturn model on equity compareslevel the propertyReturn on equity yield objectiv withe cost of capital, which offers the best possible estimate of the Kungsleden 2005 13

Anna-Carin Nyman Analyst Employed: 2000 Age: 33

What do you think makes Kungsleden different from other prop- What are the features of a good Kungsleden property? erty companies? It should be multifaceted, liquid and cash flow-oriented, which First and foremost, is the volume and speed of transactions, and that means it generates good returns. mostly, we focus more on property yields than any specific type or What do you expect from 2006? geography. Moreover, we have quick decision-paths that mean we I’m expecting a lot of good business opportunities, a sustained high can handle heavy workloads, while also having fun at work. tempo and a warm, relaxing summer. What is Kungsleden’s biggest asset, and why? What was the biggest change in your work in the year? Kungsleden’s biggest asset is its staff—we make the difference. The That was when we enhanced our transaction and analysis functions management is solution oriented, which leaves its mark in a positive so we could respond to increased market intensity. The function now atmosphere at work. has four staff. What deal do you think is Kungsleden’s best so far? What do you think Kungsleden could get better at? When we moved into the retirement homes market, which features You can always develop and upgrade your systems and working pro- long rental contracts, low risk and high returns. The Drott deal in cesses. We’ve already got good routines on our transaction side, al- 2003 was another winner. We bought a mixed holding of various though I do think we could get a touch sharper. property types with many centrally located properties in the Öresund region. We were able to sell many of these quickly, before we even took possession, generating good earnings. portfolio’s, and each property’s, risk-adjusted returns. matter of selecting the right tenants, rent levels, and hav- Properties are compared with each other, and how the ing the right cost base in the property. portfolio’s risk-adjusted returns could be improved by Because the property holding is in constant change, changing composition and/or management measures Kungsleden utilizes a dynamic control model based on roll- becomes clear. Any remedial actions are conducted within ing forecasts and moving objectives. This provides staff the auspices of the dual focus of operations, property with continuously updated financial information that also trading and property management. considers changes to exogenous factors. The purpose of this control model is to create better prospects to reach Property trading business decisions. The ambition is for staff at all levels to Property trading is a matter of buying and selling proper- have the opportunity to perform their tasks more efficiently, ties that contribute to enhancing portfolio risk-adjusted and thereby contribute to increased profitability. returns. Kungsleden pursues an internally developed methodology involving systematic analysis of acquisition Business plans and divestment targets, and the structured execution of all Inherently, Kungsleden’s transaction-intensive operations constituent processes. are such that constantly retaining an accurate impression The company possesses in-house know-how to con- of the value of each property for Kungsleden, and what it duct all the parts of the acquisition and divestment pro- could raise through sale, is important. Accordingly, busi- cess, including negotiation, financial and technical analy- ness plans and internal valuations are highly significant. sis, legal reviews, execution and settlement. The business plan includes a present value calculation that can be utilized to compare the present value of prop- Property management erties with prevailing market values. Thus for any given The purpose of property management is to influence value or price, Kungsleden has an indication of whether returns and risk levels of properties through management each property is a portfolio asset, or should be divested. measures, which is effected by optimizing each property’s tenant structure and operating net. These activities are a 14 Kungsleden 2005 xxxxOrganisational and human resources

Kungsleden’s organizational skills are important, and its capacity to realize its business concept, vision and strategy ultimately rests on the professionals that compose its organisational resources. A transaction-intensive business needs ﬂexible staff that are adaptable and guided by professionalism and skill.

ORGANISATIONAL RESOURCES HUMAN RESOURCES Kungsleden’s organisational resources are divided into Kungsleden’s robust profit performance, and the fact that two segments, Property Management and Service Cen- it does a lot of business, means it can offer an interesting tre. The property management organisation is divided into workplace offering scope for progress. Kungsleden’s staff six units, three of which are geographical regions; West, work on property management or administration. Those in South and East, and three relate to property type; Retire- property management work on local markets and operate ment Homes, Care Properties and School Properties. in teams comprising managers, management assistants Each region is responsible for its property holding, and and property technicians. These teams have considerable deals with issues within management, letting and sales. know-how on property management and of the players The management organisations are headed by the Chief on their local property and rental markets. They are also Operating Officer, and also include a central analysis func- highly familiar with the development potential of such play- tion. Kungsleden’s South and West regions are managed ers and markets. A businesslike approach and flexibility from regional offices in Malmö and Gothenburg respec- are key concepts in the function of our property manage- tively. West region also includes three local branches in ment activities, in enhancing Kungsleden’s property hold- the cities of Jönköping, Trollhättan and Växjö. The East, ing and working methods. Retirement Homes, Care Properties and Schools regions Primarily, administration staff operate centrally within are located at Kungsleden’s head office in Stockholm. our organisational structure, and possess know-how with a East region also has local branches in Karlstad, Västerås, specific orientation on various over-arching group issues. Gävle and Norrköping. Retirement Homes also has a local Service and specialist skills are the central concepts of office in Malmö. the administration function’s work in supporting property The central Service Centre is managed by the Chief management, collaborating with this function to continu- Financial Officer, and deals with accounting, finance, legal ously improve Kungsleden’s working methods and to bear services, HR and IT issues. The Service Centre is located responsibility for the observance of legal requirements. at the head office, although some staff are located at the Kungsleden regards skilled staff as an important suc- Gothenburg and Malmö regional offices. Accordingly, the cess factor, and accordingly, assigns high significance Service Centre is independent of the geographical loca- to developing its staff and skills enhancement. Appraisal tion of properties, and has good prospects of attracting interviews are conducted at least once a year to verify the specialist staff. need for, and stimulate, progress. These appraisal interviews are intended to monitor and evaluate efforts in the CEO previous period, and the results achieved, to determine the objectives and activities for the forthcoming period, and to review each staff member’s developmental needs COO CFO Analysis and direction for the immediate future, and the slightly longer term. Regions Physical activity is encouraged through a health allow-

West South East Retirement Care Schools Service Homes ance to all staff, but also through activities that prioritise Centre daily exercise. To further enhance the drive and commit- Accounting Jönköping Gävle Stockholm ment of staff, over the past year, Kungsleden has operated Finance Trollhättan Karlstad Malmö Legal a bonus scheme, half of which is linked to the company’s Växjö Norrköping HR proﬁts, and the remainder to individual objectives, which Västerås IT Kungsleden 2005 15

resulted in the majority of non-management employees tion, and between men and women. There were 91 (55) receiving a bonus of an extra month’s salary at the end people in property management, and 49 (28) in adminis- of 2005. tration. The share of women in administration is somewhat Kungsleden operates an equal opportunities plan higher than men, and the reverse applies within property to achieve a good division between the sexes and age management. Overall at year-end, 38 (45) per cent of staff groups, and is attempting to change the division between were women. the sexes in the corporate management, which at present, The average age of salaried employees was 42 (42) includes one woman. The company takes a positive view and is lower among women than men. Women are a clear of parental leave, and offers attractive terms. At year-end, majority of salaried employees under 40, while men are three Kungsleden employees were on parental leave. the majority of employees aged over 40. 60 (61) per cent of Expansion in the year increased the need for staff, salaried employees are 40 or older. although the staff that joined Kungsleden from the acqui- Overall, the statistics demonstrate that the company sition in late 2005 were a positive addition, also explaining has a favourable mix of younger and older employees of much of the increased number of employees on the previ- varying age and experience. The ﬁgure below shows the ous year. length of service of salaried employees. Of our salaried At year-end 2005, Kungsleden had 213 (83) full-time employees, 88 (48) have worked for Kungsleden for four employees of which 138 (75) were salaried employees. In years or more, 33 (32) between one and three years and addition to the salaried employees, there were 75 (1) jani- the remaining 17 (14) for less than one year. tors employed at year-end. In the previous year, Kungs- leden liquidated its property care resources, instead out- sourcing these services. The increase on the previous year is attributable to the aforementioned business acquisition. The following diagram shows the division between salaried employees in property management and administra-

Appointments—salaried staff Length of service—salaried staff Age distribution—salaried staff Average age—salaried staff No. No. No. Year 150 100 50 50

120 80 40 40

90 60 30 30

60 40 20 20

30 20 10 10

0 0 0 0 Total Property Admini- <1 year 1–3 years ≥4 years < 30 30–39 40–49 ≥50 Total Women Men Management stration years years years years

Women Men Women Men Women Men 2005 2004 16 Kungsleden 2005 xxxxThe property market

2005 was a record year for property transactions in Sweden, with forecasters’ fears that an interest rate upturn would slow property market activity dispro- ved, with instead, interest rates continuing to head down, and interest in property deals continuing to rise. Swedish and foreign players were very active in 2005.

Avkastning på eget kapital Over SEK 120-bn worth of transactions were conducted rates are expected to remain at relatively low levels, and % in 2005, which easily exceeded 2004, Sweden’s previous many investors regard Sweden as an attractive market. 35

record year for property transactions. At the beginning of 30 the year, many analysts expected an interest rate upturn Where25 is the positive rental growth? to slow property market activity, but in fact, interest rates Stockholm20 often attracts much of the focus, where at continued heading down for much of the year, while inter- present,15 foreign players own more than 25 per cent of 10 est in properties kept firming. Many investors regarded total city centre premises. Low interest rates, good fund- 5 properties as a good asset for asset management port- ing opportunities and belief in a more upbeat rental market 0 folios, while bonds were generating low yields, and stock has attracted1999 2000 international2001 2investors.002 2003 2004 2004 2005 markets still felt uncertain. However,Avkastning a på brighter eget kapital StockholmAv kastningskravrentals market is only Once again, foreign players were highly active in 2005, a partial truth, applying to only some types of premises after some slowdown in 2004. Many of these foreign play- and locations. Tenants want contemporary, space-effi- Averskastning had done på eget business kapital in Sweden previously, but many cientRequire premisesd property yields, in the of ficescity incentre prime locations or attractive central sub- % % % players new to Sweden did their first deals, while more are urb12 locations. At present, when most factors indicate a 12 35 waiting in the wings. Because Swedish players also became weak10 rally on the labour market, demand for premises will10 30 more active in the year, competition, and required prop- 25 increase8 very faintly. Constituent markets, with older office8 erty yields, reduced. This scenario applied to all types of 20 stock,6 will retain high vacancies for several years ahead, 6 property,15 but viewed nationwide, interest in wholesale and with4 declining attraction, while contemporary properties/ 4 retail10 and residential properties was very high. locations will experience robust demand, with rising rents 2 2 5 At present, there is plenty to suggest that required resulting. 0 0 0 property yields will also reduce in 2006 because interest 1990 1993 1996 1999 2002 2005 1999 2000 2001 2002 2003 2004 2004 2005 Stockholm Gothenburg Malmö

Avkastning på eget kapital Avkastningskrav Regional cities Large conurbations

Required property yields, ofﬁces in prime locations Rent levels, ofﬁces in prime locations 2 % % sq.m. kr/m 12 12 5,000 5,000

10 10 4,000 4,000 8 8 3,000 3,000 6 6

4 4 2,000 2,000

2 2 1,000 1,000 0 0 1990 1993 1996 1999 2002 2005 0 0 Stockholm Gothenburg Malmö 1990 1993 1996 1999 2002 2005 Regional cities Large conurbations Stockholm Gothenburg Malmö

Regional cities Large conurbations

Rent levels, ofﬁces in prime locations sq.m. kr/m2 5,000 5,000

4,000 4,000

3,000 3,000

2,000 2,000 Property transactions in 2005 Share of total turnover

1,000 1,000 Stockholm Rest of region 46 % 0 0 Sweden 45 % 1990 1993 1996 1999 2002 2005

Stockholm Gothenburg Malmö

Regional cities Large conurbations

Gothenburg region 4 % Malmö region 5 % Property transactions in 2005 Share of total turnover

Stockholm Rest of region 46 % Sweden 45 %

Gothenburg region 4 % Malmö region 5 % Kungsleden 2005 17

Avkastning på eget kapital Why do you work for Kungsleden? I think the company’s successful, and features happy, positive % people. Moreover, I ﬁnd our short, fast decision-paths very posi- 35 tive. 30 What do you think makes Kungsleden different from other 25 property companies? 20 Just look at at our share price growth. We take decisions fast, and 15 as a result, can stay one step ahead of other property companies. 10

We also feel a bit more personal. 5

How would you describe ‘the Kungsleden spirit’? 0 Everyone takes a lot of responsibility, and puts that little bit extra 1999 2000 2001 2002 2003 2004 2004 2005 into every task. Freedom with responsibility works as an incentive Avkastning på eget kapital Avkastningskrav in our organization. What do you think Kungsleden could get better at? Actually, I can’t think of anything. You can always get better at Required property yields, ofﬁces in prime locations communicating. Information can go into short supply in a compa- % % ny where things are always happening. 12 12

What are the features of a good Kungsleden property? 10 10 A good Kungsleden property houses stable tenants with good ﬁ- 8 nances and long contracts, and generates high property yields. 8 The property is also clean, and of good quality. 6 6

What do you expect from 2006? Jonny4 Göthberg 4 Positive results from our Care property project, and that we keep Property Manager, West Region 2 2 buying Care properties. Age: 44 0 How do tenants know that Kungsleden owns their property? Employed:0 2001 1990 1993 1996 1999 2002 2005 Well, hopefully by them having a personal relationship with Kung- Stockholm Gothenburg Malmö sleden’s manager. I visit all my tenants regularly. Regional cities Large conurbations

Rental markets in regional cities and large conurbations such as business closures or relocations, which can result Rent levels, offices in prime locations have not tracked the same rental patterns as in Stock- in risingsq.m. vacancies. kr/m2 holm, as the graph illustrates. In Stockholm, rents have Over5,000 the past year, more investors have prioritised sta- 5,000 declined sharply since the peak year of 2000, while in ble rental4,000 revenues regardless of locations and the turn- 4,000 regional cities and large conurbations, rents have been over in regional cities and large conurbations increased 3,000 3,000 more stable. These cities have neither witnessed exten- markedly. Research into sold rental premises (residential sive new production nor suffered to any great extent from and offices)2,000 across all counties illustrates that total turn- 2,000 declining employment in the IT, telecom and finance ser- over in relation to total taxable values is high even outside 1,000 1,000 vices sectors. the County of Stockholm. Four counties, Blekinge, Sca- nia, Östergötland0 and Södermanland, also enjoyed high 0 1990 1993 1996 1999 2002 2005 High liquidity nationwide, not just Stockholm turnover, while other counties, particularly in southern and Stockholm Gothenburg Malmö In absolute terms, the biggest deals are in Stockholm, central Sweden, saw levels just below Stockholm. Regional cities Large conurbations Gothenburg in Malmö, but property transactions are con- There is every reason to expect this trend continuing, ducted nationwide, with foreign and domestic buyers. and looking ahead, investors will focus on future rental The transactions are primarily retail, logistics and resi- revenues (returns), and potentially, property types, rather dential properties, although there were also substantial than unequivocally concentrating on specific geographi- office property sales over the past year. The sellers are cal markets. often smaller property companies that have added value to properties, and local and regional family businesses Property transactions in 2005 or construction companies selling properties that have Share of total turnover enjoyed good value growth on investments. Stockholm Rental levels in regional cities and large conurbations Rest of region 46 % Sweden 45 % are relatively low as the following diagram shows, but little new production and stable demand offers scope for modest rent increases ahead. The potential for high short-term value growth is modest, although the same applies to the risk of heavy value losses. In growth regions, Kungsleden expects schools, residential and care properties to enjoy sustained positive progress. Retail and office proper- Gothenburg ties are also expected to experience positive progress in region 4 % good locations, while investor interest has risen over the Malmö region 5 % past year. Risks are confined to those locations that have not enjoyed growth, and moreover, are affected by factors 18 Kungsleden 2005 xxxxThe property holding and earnings capacity

As of 31 December 2005, the holding comprised 779 (371) properties with a book value of SEK 25,750 (13,452) m and an aggregate rental value of SEK 3,070 (1,574) m. Total lettable ﬂoor-space was 3,790,000 (1,966,000) sq.m.

THE PROPERTY HOLDING ment homes and care properties, residential housing, Kungsleden took a decision to intensify the tempo of its commercial properties and foreign properties. acquisitions in early 2005, because the company’s man- Largely, this holding comprised residential and office agement and Board saw good opportunities to create premises. There were seven foreign properties, six in shareholder value by exploiting the spread between prop- Brussels and one in Amsterdam, with total value of SEK erty yields and funding costs. Thus the past year featured 850 m and a property yield of 6.6 per cent. high transaction intensity, particularly on acquisitions, to Through its acquisitions of care and school proper- enhance risk-adjusted returns and increase capital effi- ties, Kungsleden sharpened its focus on tenants with pub- ciency. licly financed operations. In March, Kungsleden acquired 42 care properties for a total of some SEK 1,045 m in the Acquisitions Västra Götaland region, western Sweden, and in greater Kungsleden acquired 466 (64) properties with floor-space Stockholm. This acquisition encompassed 31 care prop- of 2,116,000 (417,000) sq.m. for SEK 12,964 (2,490) m. In erties for approximately SEK 645 m from the regional addition, Kungsleden acquired the remainder of previously authority, in tandem with the acquisition of care properties 50 per cent-owned Hemsö Äldreboende Fastigheter AB, for about SEK 400 m in Stockholm, from Stena fastigheter. for SEK 387 m. The single biggest transactions in the year Overall, the expected property yield was 8.5 per cent. are reviewed below. The school properties initiative began in the year with the acquisition of four properties from Vittra and Bure. The acquisition price was SEK 407 m, with an expected Acquisition value by property category property yield of 7 per cent. These properties, located

Retail 2,959 SEK m in Stockholm, Solna, Södertälje (both near Stockholm)

Ofﬁce 2,801 SEK m and Linköping (south west of Stockholm) comprise some

Other 1 2,723 SEK m 17,000 sq.m. of lettable ﬂoor-space. These properties are either new or converted to contemporary school premises, Care 1,760 SEK m and with Vittra as tenant, Kungsleden has established a Industrial/warehouse 1,462 SEK m relationship with a leading player in independent schools, Retirement home2 879 SEK m which hopefully, may result in more business in the future. School 767 SEK m Coincident with this acquisition, Kungsleden took over 0 5 10 15 20 25 % Vittra’s 15-year rental contracts on all properties, and the parties also signed a letter of intent regarding another four 1 The other type largely comprises residential properties included in the schools in the next two years. Pursuant to this letter of acquisitions from Weland Fastigheter and Fogelviks Holding, and of Norrvidden. intent, Kungsleden is investing SEK 64 m in a new school 2 Retirement homes include the remainder of formerly 50 per cent-owned 2 959 Mkr in Vallentuna, north of Stockholm, which Vittra will lease Hemsö ÄldreboendeSales price Fastigheter by property AB. category through a 15-year rental contract. The tenant is scheduled

In October,Retail Kungsleden1,391 SEK m acquired a large property holding to move in in August 2006. Upon completion, this property with the associated operations from Weland Fastigheter will comprise some 3,000 sq.m. of lettable floor-space, Office 1,196 SEK m and Fogelvik Holding. Kungsleden took possession on with a rental value of SEK 5.8 m. Other 156 SEK m 1 December 2005, a holding comprising 183 properties Another six school properties were acquired in three Industrial/warehouse 128 SEK m with total value of SEK 5,387 m. The holding encompasses separate transactions in December. Kungsleden acquired Retirementabout home 1 millions 76 sq.m.SEK m of lettable floor-space. In total, the two properties for a total of SEK 108 m, with an estimated

acquired holding0 had10 rental 20values of3 0SEK 83440 m, and 50 % property yield of 8.25 per cent. These properties com- rental revenues of SEK 681 m and an operating net of SEK prised about 9,000 sq.m. of lettable ﬂoor-space. In Nacka, 357 m, equivalent to a property yield of 6.6 per cent. The west of Stockholm, Kungsleden acquired one school acquired holding can be divided into four segments: retire- property for SEK 58 m, with an estimated property yield of Acquisition value by property category

Kungsleden 2005 Retail 2,959 SEK m 19 Ofﬁce 2,801 SEK m

Other 1 2,723 SEK m

Care 1,760 SEK m

Industrial/warehouse 1,462 SEK m

Retirement home2 879 SEK m

School 767 SEK m

0 5 10 15 20 25 %

7.1 per cent. The remaining three school properties were The property market’s healthy liquidity enabled some prob- part of a larger property holding acquired from Tornet. lem properties to be divested in the year. Early in the year, retail premises were assessed to enjoy 2 959 Mkr good risk-adjusted returns, and market interest in this type Sales price by property category of property remained robust through the year. Like care, school and retirement home properties, these properties Retail 1,391 SEK m feature tenants with relatively long-term rental contracts, Ofﬁce 1,196 SEK m implying lower risk than for other commercial premises. Other 156 SEK m

Consequently, 27 properties were acquired from food Industrial/warehouse 128 SEK m provider ICA in May, with the purchase price amounting Retirement homes 76 SEK m to SEK 580 m and with an estimated property yield of 7.25 per cent. These properties were primarily ICA Supermarket 0 10 20 30 40 50 % and ICA Kvantum superstores. Coincident with the transaction, Kungsleden and ICA signed rental contracts on all Overall property values and sales prices reveal that retail properties with an average contract term of eight years. and office properties are still top of the list in acquisitions 32 retail properties were acquired in June for a purchase and divestments. However, acquisitions were conducted price of SEK 750 m. The estimated property yield was 7.5 at higher yields than the corresponding divestments, dem- per cent. These premises primarily comprised Axfood onstrating that turnover is favouring the company. stores and Åhléns department stores. Axfood and Åhléns generated some 80 per cent of rental revenues. Property categories 11 retail properties were acquired from consumer elec- The property holding was divided into seven property cat- tronics chain ONOFF for SEK 275 m, equivalent to a prop- egories at year-end: Retirement Homes, Care, Schools, erty yield of 7.0 per cent. Coincident with this acquisition, Offices, Industrial/Warehouse, Retail and Other. In 2005, ONOFF signed rental contracts on 29 per cent of the floor- Kungsleden embarked on its care and school proper- space with an average rental term of 10 years. ties initiative, complementing its retirement homes prop- In June, Kungsleden acquired 61 properties located erty portfolio. These properties are subject to challenging in northern Sweden from Norrvidden Fastigheter AB. The management and development standards. The combina- purchase price was SEK 610 m, and the estimated prop- tion of Kungsleden’s experience, garnered from segments erty yield was 9.0 per cent. This holding primarily com- including retirement homes, alongside its organisational prised industrial/warehouse, residential and office prop- capacity, means it has good prospects of consummating erties. This acquisition, with multiple buildings and good property acquisitions in these segments and conducting liquidity, was a classic Kungsleden portfolio, which will efficient management. generate new and attractive business opportunities. Together, Kungsleden’s care, school and retirement Two property portfolios were acquired from property home properties represent its focus on public proper- company Tornet in the year. The first acquisition com- ties. Typically, such properties enjoy attractive risk/return prises 25 centrally located properties, mainly retail and levels consistent with Kungsleden’s business concept. office premises, in Karlstad, in western Sweden. The These properties, which are often attractively located, acquisition price was SEK 1,049 m, at an estimated prop- feature stable tenants, long-term tenant relationships and erty yield of 7.75 per cent. The second acquisition was good funding prospects. Operating risk and value risk is 32 properties in central and southern Sweden, for SEK reduced by 27 per cent of rental values and 30 per cent of 1,050 m at an estimated property yield of 7.4 per cent. book values being attributable to these properties. This risk management creates better scope to be active Disposals in the commercial property segment, which for Kungs- Disposals of properties prioritised for sale contributed to leden, comprises office, industrial/warehouse and retail enhancing the property holding’s composition, and either properties. The category Other includes other types of related to smaller, non-prioritised properties with low properties, for example residential properties. property yields, or properties whose market values had increased to the extent that their implicit property yields were less than Kungsleden’s portfolio risk and return criteria. Kungsleden’s geographical Kungsleden’s property Municipalities in descending order of size presence categories Total book value SEK 25,750 m Total book value SEK 25,750 m 1 Malmö 2 Stockholm Central 10 % Care 7 % 3 Karlstad North 6 % School 4 % 4 Gävle 5 Mölndal Foreign 3 % Other 13 % 6 Gothenburg East 41 % Offices 31 % 7 Norrköping 8 Huddinge 9 Lund 10 Sundsvall 1–10 11–25 26–50 51–100 101–148

0 10 20 30 40 50 60 % % of book value

South 24 % Retirement homes 19 % Industrial/warehouse 14 % Municipal populations West 16 % Retail 12 % 000s Kungsleden’s geographical Kungsleden’s property Municipalities in descending order of size categories presence >100 SEK 10,057 m, 39% Kungsleden’s geographicalTotal book value SEKKungsleden’ 25,750 m s prToopertyTtalotal book re ntal value value SEK SEK 25,750 3,070 m m MunicipalitiesTotal1 Malmrentalö value in descending SEK 3,070 m order of size categories 2 Stockholm 50–100 SEK 10,200 m, 40% presence Central 10 % Care 7 % Care 9 % Kungsleden’s geographical Kungsleden’Central 11 % s property 3 Karlstad Municipalities in descending order of size Total book value SEK 25,750presence mNorth 6 % Total book value SEK 25,750categoriesSchool m North 4 % 6 % 1 Malmö 4 GävlSchoole 4 % 25–50 SEK 2,527 m, 10% 2 Stockholm 5 Mölndal Central 10 % Foreign 3 % Care 7 % Other 13 % Total book value SEK 25,750 m Total bookForeign value 3 SEK % 25,7503 Karlstad m 1 MalmOtherö 13 % 6 Gothenburg <25 SEK 2,116 m, 8% North 6 % East 41 % School 4 % OfficesEast 3138 % %4 Gävle 7 Norrköpin2 StockholgOfficesm 32 % Central 10 % Care 7 % 5 Mölndal 8 Huddinge3 Karlstad Foreign 3 % Other 13 % Foreign North 6 % School 4 % 6 GothenburgKungsleden9 Lund4 2005Gävle SEK 850 m, 3% East 41 % 20 Offices 31 % 7 Norrköping 5 Mölndal Foreign 3 % Other 13 % 10 Sundsvall 8 Huddinge 6 Gothenburg1–10 0 5 10 15 20 25 30 35 40 % East 41 % Offices 319 % Lund 7 Norrköpin11–25 g % of book value 10 Sundsvall 8 Huddinge26–50 xxxxThe property holding and 1–10 9 Lund51–100 11–25 10101–14 Sundsvall8 26–50 1–10 51–100 11–25 earnings capacity 0 10 20 30 40 50 60 % 101–148 26–50 51–100 % of book value 0 10101–14 208 30 40 50 60 % Retirement homes 19 % Retirement homes 14 % South 24 % South 23% % of book value Industrial/warehouse 14 % Industrial/warehouse0 16 % 10 20 30 40 50 60 % Municipal populations South 24 % West 16 % Retirement homesRetailWe 1912st %19 % % Retail 12 % % of book value Industrial/warehouse 14 % 000s Kungsleden’s geographical Kungsleden’s Southproperty 24 % Retirement homes 19 % Municipal populations West 16 % Retail 12 % Municipalities in descending order of size Industrial/warehouse 14 % presence categories SEK 10,057 m, 39% 000s >100 Municipal populations Total book value SEK 25,750 m ToTtalotal book reWental valuest 16value % SEK SEK 25,750 3,070 m m ToTtalotal1 MalmrentalRetail floorö 12value-spac % SEKe 3,790,000 3,070 m sq.m. Total floor-space 3,790,000 sq.m. Geographical distribution 2 Stockholm 50–100000s SEK 10,200 m, 40% Central 10 % CareCentral 7 % 11 % Care 9 % >100 SEK 10,057Care 8%m, 39% Kungsleden’s geographical Kungsleden’s property 3Central Karlstad 12 % Municipalities in descending order of size Total book value SEK 25,750 m North 6 % Total rental value SEK 3,070School mNorth 4 % 6 % Total rental value SEK 3,0704 GävlSchool m eNorth 4 % 7 % School25–5 3%0 SEK 2,527 m, 10% categories SEK 10,200 m, 40% SEK 10,057 m, 39% presence 5 Mölndal 50–100 >100 Foreign 3 % OtherForeign 13 % 3 % Care 9 % Other 14 % Other 43 % Central 11 % Total rental value SEK 3,070 m Total rentalOther Foreign value 13 % 2SEK % 3,070 m Total book value SEK 25,750 m Total book value SEK 25,750 m 6 Gothenburg1 Malmö <25 SEK 2,116 m, 8% East 41 % North 6 % OfficesEast 3138 % % School 4 % 7 Norrköpin2 StockholgOfficesm East 3237 %% 25–50 SEK 2,527 m, 10%50–100OfficesSEK 26 %10,200 m, 40% Foreign 3 % Central 10 % CareCentral 7 % 11 % Care 9 % 8 Huddinge3 Karlstad Foreign 3 % Other 13 % Foreign SEK 850 m, 3% North 6 % SchoolNorth 4 % 6 % 9 Lund4 GävlSchoole 4 % <25 SEK 2,116 m, 8%25–50 SEK 2,527 m, 10% Greater East 38 % Offices 32 % 5 Mölndal Stockholm 25 % Foreign 3 % OtherForeign 13 % 3 % 10 SundsvallOther 13 % 0 5 10 15 20 25 30 35 40 % 6 Gothenburg1–10 Foreign SEK 850 m, 3%<25 SEK 2,116 m, 8% East 41 % OfficesEast 31 38 % % 7 Norrköping Offices 32 % 11–25 % of book value 8 Huddinge26–50 Foreign SEK 850 m, 3% 9 Lund51–100 0 5 10 15 20 25 30 35 40 % 10 101–14Sundsvall8 % of book value 1–10 0 5 10 15 20 25 30 35 40 % 11–250 10 20 30 40 50 60 % % of book value 26–50 51–100 % of book value 101–148 Retirement homes 19 % Retirement homes 14 % Retirement homes 10 % South 24 % South 23% South 22% 0 10 20 30 40 50 60 % Industrial/warehouse 14 % Industrial/warehouse 16 % Industrial/warehouse 27% Öresund Retirement homes 14 % Municipal populations region 19 % West 16 % South 23%RetailWe 12st 19 % % RetailWe 12st 20 % % Retail 12 % % of book value Industrial/warehouse 16 % 000s Greater Retirement homes 14 % South 24 % RetirementSouth 23 homes% 19 % Gothenburg10 % West 19 % Retail 12 % Industrial/warehouse 14 % Industrial/warehouse 16 % >100 SEKMunicipal 10,057 m, 39 populations% Total reWentalst 16 value % SEK 3,070 m ToTtalotal rRetailental floorWe 12 stvalue-spac %19 % SEKe 3,790,000 3,070 m sq.m. Total floorRetail-space 12 % 3,790,000 sq.m. Geographical distribution 50–100000s SEK 10,200 m, 40% Central 11 % Care 9 % Care 8% Kungsleden’s geographical Kungsleden’s property Central 12 % Municipalities in descending order of size Total book value SEK 25,750 m North 6 % Total floor-space 3,790,000School sq.mNorth 4. % 7 % Total floor-space 3,790,000 Schoolsq.m25–5. 3%0 SEK 2,527 m, 10% Geographical distribution presence categories SEK 10,057 m, 39% >100 Other 43 % Foreign 3 % Care 8% Other 14 % Total book value SEK 25,750 m Total book value SEK 25,750Central m 12 % Other Foreign 13 % 2 % Total rental value SEK 3,070 m TotalT1otal Malmrental floorö value-spac SEKe 3,790,000 3,070 m sq.m. Total floor<25-spaceSEK 3,790,000 2,116 m, sq.m 8% . Total book value SEK 25,750Geographical m distribution East 38 % North 7 % 2 StockholOfficesm East 3237 %% School 3% 50–100OfficesSEK 26 10,200% m, 40% Foreign 3 % Central 10 % Care 7 % Care 9 % Care 8% Central 11 % 3 CentralKarlstad 12 % Other 43 % Foreign 2 % Other 14 % Foreign Total book value SEK 25,750 m North 6 % SchoolNorth 4 % 6 % SchoolNorth 4 % 7 % School 3% SEK 850 m, 3% Greater 4 Gävle 25–50 SEK 2,527 m, 10% Foreign 3 % East 37 % 5 Mölndal Offices 26 % Other 43Stockholm % 25 % Foreign 3 % OtherForeign 13 % 3 % Other Foreign 13 % 2 % Other 14 % 6 Gothenburg 0 5 10 15 20 25 30 35 40 % <25 SEK 2,116 m, 8% Foreign 3 % East 41 % OfficesEast 3138 %% 7 NorrköpingOfficesEast 32 37 % % Offices 26 % Greater % of book value 8 Huddinge Stockholm 25 % Foreign 9 Lund SEK 850 m, 3% Greater 10 Sundsvall Stockholm 25 % 1–10 0 5 10 15 20 25 30 35 40 % 11–25 % of book value 26–50 Kungsleden’s geographical Kungsleden’51–100s property 101–148 Municipalities in descending order of size presence categories Retirement homes 14 % Retirement homes 10 % South 23% South 22% 0 10 20 30 40 50 60 % Total book value SEK 25,750 m Total bookIndustrial/warehouse value SEK 25,750 16m % 1 Malmö Industrial/warehouse 27% Öresund 2 Stockholm Central 10 % Care 7 Retail% 12 % RetirementRetail homes 12 10% % % of book value region 19 % West 19 % South 22% West 20 % 3 Karlstad North 6 % School 4 % Industrial/warehouse4 Gävle 27% Öresund Greater Retirement homes 19 % Retirement homes 14 % Retirement homes 10 % South 24 % South 23% South 22% 5 Mölndal region 19 % Gothenburg10 % Foreign 3 % West 20 % Other 13 % Retail 12 % Industrial/warehouse 14 % Industrial/warehouse 16 % 6 Gothenburg Industrial/warehouse 27% Öresund East 41 % Offices 31Municipal % populations7 Norrköpin g Greater West 16 % Retail 12 % Retail 12 % Retail 12 % region 19 % Total floorWest-spac 19 % e 3,790,000 sq.m. Total floorWe-spacest 20 % 3,790,000 sq.m. 8 Huddinge Geographical distributionGothenburg10 % 000s 9 Lund Greater Central 12 % Care 8% 10 Sundsvall Total book value SEK 25,750 m Gothenburg10 % North 7 % School 3% SEK 10,057 m, 39% 1–10 >100 Other 43 % Foreign 2 % Other 14 % 11–25 Total rental value SEK 3,070 m ToTtalotal rental floor value-spac eSEK 3,790,000 3,070 m sq.m. Total floor-space 3,790,000 sq.m. 26–50 Geographical distribution 50–100 SEK 10,200 m, 40% Foreign 3 % East 37 % Offices 26 % 51–100 Central 11 % CareCentral 9 % 12 % Care 8% 101–148 Total book value SEK 25,750 m North 6 % SchoolNorth 4 % 7 % School25–5 3%0 SEK 2,527 m, 10% Greater Other 43 %Stockholm 25 % Foreign 3 % Other Foreign 13 % 2 % Other 14 % 0 10 20 30 40 50 60 % <25 East 38 % SEK 2,116 m, 8% Foreign 3 % OfficesEast 3237 % Offices 26 % % of book value Kungsleden’s geographical Kungsleden’s property Foreign Municipalities in descending order of sizeSEK 850 m, 3% Greater Retirement homes 19 % presence categories South 24 % Stockholm 25 % Industrial/warehouse0 14 % 5 10 15 20 25 30 35 40 % Total book value SEK 25,750 m Total book value SEK 25,750 m 1 Malmö Municipal populations 2 StockholWest m16 % Retail 12 % % of book value Central 10 % Care 7 % 3 Karlstad 000s North 6 % School 4 % 4 Gävle Foreign 3 % 5 Mölndal Other 13 % Retirement homes 10 % SEK 10,057 m, 39% 6 Gothenburg South 22% >100 East 41 % Offices 31 % 7 Norrköping Total rental value SEK 3,070 m Total rental valueIndustrial/warehouse SEK 3,070 m 27% Öresund 8 Huddinge SEK 10,200 m, 40% 50–100 region 19 % 9 LundCentralWe 11st % 20 % Care 9 Retail% 12 % 10 SundsvallNorth 6 % School 4 % 25–50 SEK 2,527 m, 10% Greater Retirement homes 14 % Retirement homes 10 % South 23% 1–10 Gothenburg10 % Foreign 3 %South 22% 11–25Industrial/warehouse 16 % Other 13 % Industrial/warehouse 27% <25 SEK 2,116 m, 8% Öresund 26–50 East 38 % Offices 32 % region 19 % West 19 % 51–100RetailWe st12 20 % % Retail 12 % Foreign 101–148 SEK 850 m, 3% Greater Gothenburg10 % 0 10 20 30 40 50 60 % 0 5 10 15 20 25 30 35 40 % Total floor-space 3,790,000 sq.m. Total floor-space 3,790,000 sq.m. % of bookGeographical value distribution % of book value Central 12 % Care 8% South 24 % Retirement homes 19 % Total book value SEK 25,750 m North 7 % School 3% Industrial/warehouse 14 % Other 43 % Foreign 2 % MunicipalOther 14 % populations West 16 % Retail 12 % Foreign 3 % East 37 % 000s Offices 26 %

Greater Retirement homes 14 % >100 SEKSouth 10,057 23% m, 39% Stockholm 25 % Industrial/warehouse 16 % Total rental value SEK 3,070 m Total rental value SEK 3,070 m 50–100West 19 %SEK 10,200 m, 40% Retail 12 % Central 11 % Care 9 % North 6 % School 4 % 25–50 SEK 2,527 m, 10% Foreign 3 % Other 13 % <25 East 38 % SEK 2,116 m, 8% Offices 32 % Total floor-space 3,790,000 sq.m. Total floor-space 3,790,000 sq.m. Geographical distribution Foreign SEK 850 m, 3% Care 8% Central 12 % Total book value SEK 25,750 m North 7 % School 3% 0 5 Retirement10 homes15 10 % 20 25 30 35 40 % South 22% Other 43 % Foreign 2 % Other 14 % Industrial/warehouse 27% % of book value Öresund Foreign 3 % East 37 % Offices 26 % region 19 % West 20 % Retail 12 % Greater Greater Gothenburg10 % Stockholm 25 %

Retirement homes 14 % South 23% Industrial/warehouse 16 %

West 19 % Retail 12 %

Retirement homes 10 % South 22% Industrial/warehouse 27% Total floor-space 3,790,000 sq.m. Total floor-space 3,790,000 sq.m. Geographical distribution Öresund Retail 12 % region 19 % Care 8% West 20 % Central 12 % Total book value SEK 25,750 m School 3% Greater North 7 % Gothenburg10 % Other 43 % Foreign 2 % Other 14 % East 37 % Offices 26 % Foreign 3 %

Greater Stockholm 25 %

Retirement homes 10 % South 22% Industrial/warehouse 27% Öresund region 19 % West 20 % Retail 12 % Greater Gothenburg10 % Contracts size, SEK 000s

% 60

20 Kungsleden 2005 10 21

0 0–499 500– 1,000– 5,000– > 10,000 999 4,999 9,999

Commercial Public

Geographical location Rental revenues divided Rental revenues Contracts size, SEK 000s by type of tenant Total rental revenue SEK 2,660 m Kungsleden’s property holding is divided into six mar- distributed on 15,766 contracts % Residential 12 % 60 ket areas: East, South, West, Central, North and Foreign. Residential 12 % Foreign 2 % 5,625 contracts 50 Rather than any realignment of the company’sOther 2 % strategy, Foreign 2 % 1,076 contracts 40 changes to the property holding’s geographical diversifi- Other 2 % 5,106 contracts cation or concentration are a result of Kungsleden’s ongo- 30 ing ambition to strike the right balance between the return 20 and risk of properties. If pricing and the market change, 10 0 new opportunities to do good business arise. 0–499 500– 1,000– 5,000– > 10,000 999 4,999 9,999 Extensive property trading in the year has meant the number of properties and municipalities increasing, which Commercial Public Private sector 58 % Kungsleden views as positive, because it increases the Commercial 57 % Public sector 26 % 3,406 contracts risk diversification and flexibility of the portfolio. Moreover, Public 27 % the opportunities for new deals and transactions are cre- 553 contracts ated, because there are also more properties to trade with. The division of contract maturitiesRental in retermsvenues of divided commercial Rental revenues by type of tenant Total rental revenue SEK 2,660 m The property portfolio enjoyed healthy risk diversifi- and public premises reveals the difference in the charac- distributed on 15,766 contracts Residential 12 % cation between larger and smaller municipalities. How- ter of rental contracts, and the lower risk public premises Residential 12 % Foreign 2 % 5,625 contracts ever, a significant portion of property values are allocated imply with their long-term rental contracts.Other Some 2 % 29 per Foreign 2 % 1,076 contracts to larger municipalities. Kungsleden has a risk limit stipu- cent of the rental revenues from public premises mature in Other 2 % 5,106 contracts lating a maximum of 30 per cent of rental revenues being 2015 or later. sourced from municipalities with populations of less than Contract maturities 25,000. At year-end, the actual figure was 11 (7) per cent. % Concentration on the three major city regions of 30 Greater Stockholm, Greater Gothenburg and Öresund 25 region reduced in 2005. All major city regions reduced 20 Private sector 58 % their relative property holdings in favour of the rest of Commercial 57 % 15 Public sector 26 % Sweden, and the new market area for this year: Foreign. 3,406 contracts 10 Public 27 % 553 contracts 5 Rental revenues Contracts size, SEK 000s 0 % 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015+ Rental revenues are analysed on the basis of premises 60 type, customers and rental contract term. The intention 50 Commercial Public is to provide an impression of operating risk and revenue 40 The diversification of rental contracts over social sectors stability. Public premises include premises used for care, 30 also demonstrates the low operating risk. Over 26 (35) per schools or retirement homes. 20 cent of rental revenues were attributable to public sector Kungsleden’s extensive property trading and realign- 10 tenants. Public sector encompasses central government, ment of its property portfolio means that the revenues 0 0–499 500– 1,000– 5,000– > 10,000 from rental contracts at any moment are not consistent municipalities,999 county4,999 9,999 councils and public authorities. with those of earnings capacity, due to factors such as IncludingCommercial government-ownedPublic a municipal corporations, tenants taking possession in the future, whose contracts the public sector share that is even greater. Moreover, the have yet to be registered. figure classifies private operators with publicly financed Kungsleden reduced its exposure to commercial prem- operations as private sector. ises in favour of those in public operations. This is a con- Rental revenues divided Rental revenues by type of tenant Total rental revenue SEK 2,660 m firmation of the quality enhancement the property holding distributed on 15,766 contracts Residential 12 % has undergone in recent years, and the prime explanation Residential 12 % Foreign 2 % 5,625 contracts for revenue stability. A relatively high share of residential Other 2 % Foreign 2 % 1,076 contracts properties of the year is mainly explained by the acquisi- Other 2 % 5,106 contracts tion from Weland Fastigheter and Fogelviks Holding.

Private sector 58 % Commercial 57 % Public sector 26 % 3,406 contracts Public 27 % 553 contracts 22 Kungsleden 2005 The property holding and earnings capacity

The majority of the largest tenants were in the public sec- In total, the external valuation of Kungsleden’s holding was tor. The 10 largest tenants generated 19 (25) per cent of SEK 25,280 (13,060) m. rental revenues, or SEK 504 (370) m, through 404 (342) Inherently, Kungsleden’s business is such that it is rental contracts. always important to maintain an accurate perception of what each property is worth to Kungsleden, and how Rental Share of Num- Share of much its saleable value would be. Accordingly, business reve- rental ber of contracts,

nues, revenue, cont- % plans and internal valuations are highly significant. Largest tenants SEK m % racts As an element of the quality process, the relationship V Götaland County Council 92 3.5 93 0.6 Ericsson 81 3.0 57 0.4 between internal and external valuations and realised sales ICA 53 2.0 29 0.2 prices is made on an ongoing basis. Prices achieved in the Municipality of Norrköping 51 1.9 42 0.3 year exceeded the previous year’s internal and external val- Stockholm County Council 47 1.8 46 0.3 Axfood 40 1.5 22 0.1 uations by 14 (3.3) and 12 (3.5) per cent respectively. Expe- Attendo Care Omsorg AB 37 1.4 23 0.1 rience indicates that prices received are above internal and Municipality of Malmö 35 1.3 64 0.4 City of Stockholm 35 1.3 10 0.1 external valuations. Generally, internal valuations are closer Municipality of Gävle 33 1.2 18 0.1 to prices achieved than external valuations. The fact that in Total 504 18.9 404 2.6 most cases, internal valuations have at least as high quality as external valuations is due to the fact that Kungsleden PROPERTY VALUES is kept informed on other players’ pricing assessments on The property holding, valued at fair value, had a book an ongoing basis by its active participation in the property value of SEK 25,750 (13,452) m as of 31 December 2005. market. One key explanation for prices attained in 2005 Fair value is an accounting term, which for properties, is being significantly above internal and external valuations synonymous with market value. Kungsleden has chosen to is that property market pricing for the type of properties base its fair value on internally conducted valuations. divested in the year increased rapidly. Kungsleden conducts internal valuations on an ongoing basis, which are an integrated element of its business Summary property values, 2005 process. Every property has a business plan, updated at Retire- Industr. least annually, and includes internal valuations, the most ment /ware- Type, SEK m Offices homes house Retail Care School Other Total recent external valuation, a statement of standpoint and Book value 7,781 4,922 3,650 3,086 1,808 1,114 3,389 25,750 an action-plan for the measures considered to optimise External value 7,714 4,690 3,661 3,011 1,838 1,122 3,244 25,280 the property’s operating net and value. Principally, the statement of standpoint and internal valuation calculation Market area, SEK m East South West Central North Foreign1 Total are based on a present value calculation with a five-year Book value 10,438 6,146 4,219 2,619 1,478 850 25,750 forecast period. External value 10,197 5,998 4,296 2,539 1,400 850 25,280 Kungsleden considers that out of ethical business con- 1 Estimated external values in the Foreign market area are based on siderations, external parties would expect internal valu- indicative pricing from several property brokers.

ations to be verified externally. Accordingly, a compre- EARNINGS CAPACITY hensive external valuation including property inspections The property holding is in continuous change, so that at is performed on a representative sample of properties any given time, earnings capacity is not reflected optimally in terms of type and location amounting to some 70 per by the Income Statement. Instead, earnings capacity il- cent of property values, every third year. For the interven- lustrates how the Income Statement would have appeared ing years, previous valuations are updated, through what if the property holding as of 31 December 2005 had been is termed a desktop valuation, on all properties. Usually, owned for the whole year. The intention is to illustrate the these external valuations are in late-autumn, with Decem- impact of changes in the property holding, and to provide ber as the most usual valuation date. However, compre- the most accurate possible information on the current situ- hensive valuations are also performed on all new proper- ation and earnings capacity. A table of earnings capacity ties and properties with special circumstances. In 2005, of the property holding by type and market area is pub- and as of December, Newsec Analys AB performed desk- lished on page 24. top valuations of those properties owned for the full year. As of 31 December 2005, property yield was 7.2 (7.8) A comprehensive external valuation on 60 per cent of con- per cent. Explanations for the progress of property yield stituent properties was also conducted coincident with the can be divided between three activities: property trad- re-financing of a syndicated loan. Comprehensive valua- ing, property management and value changes. The for- tions were performed on properties acquired in the year. mer exerts a positive impact on earnings capacity if prop- Kungsleden 2005 23

Earnings capacity, SEK/ SEK/ that have been owned for the full year. Rent levels on com- 31 Dec.’05 31 Dec.’04 SEK m sq.m. sq.m. parable properties progressed positively in the year, while Rental revenues 2,737 722 1,450 737 Operating and there were no negative tendencies in discounting and maintenance costs –801 –211 –334 –170 rental losses remained low. Increased vacancies could be Property tax –73 –19 –43 –21 Ground rent –18 –5 –19 –10 isolated to a number of larger properties, mainly offices Operating net 1,845 487 1,054 536 in major city regions and larger municipalities. However, properties located in the rest of the country in slightly Book value 25,750 13,452 Property yield,, % 7.2 7.8 smaller municipalities made stable progress. Economic Progress corroborates Kungsleden’s perception that occupancy, % 90.0 93.7 Profit margin, % 67.4 72.7 generally, market vacancies are high, particularly on the Floor-space, 000 sq.m. 3,790 1,966 office side. Despite healthy real economic growth, the rental market remained weak in the year. Productivity- erties disposed of have yields that are lower than, and driven growth elicits differing needs for premises. Custom- acquired properties have yields higher than, average port- ers are changing their behaviour, demanding flexibility and folio yields. Property management exerts a positive influ- modifications rather than just floor-space. Overall, vacan- ence on earnings capacity if the same properties generate cies increased slightly more than rent levels, and accord- a higher property yield in the current year than the previ- ingly, rental revenues reduced marginally in the year. ous year. Positive value changes exert downward pressure Nevertheless, the contribution of property manage- on the portfolio’s yield level. ment to earnings capacity was negative, reducing portfolio returns by 0.2 percentage points. This was mainly Property trading explained by increased maintenance costs. The increase Property trading in the year exerted a positive impact is partly due to commitments coincident with lettings, and on the risk-adjusted returns of the property portfolio. partly to general needs for maintenance. However, operat- Divested properties are assessed to have lower risk- ing costs remained stable in the year. adjusted returns, and acquired properties higher risk- adjusted returns, than the portfolio average. Value changes Property trading improved the property portfolio’s The progress of property yields in the year is largely the property yield by 0.2 percentage points. Divested proper- result of positive value changes, which contributed to ties’ yields in terms of sales price were 5.8 (6.8) per cent. reducing portfolio property yields by 0.6 percentage points. Yield levels revealed that properties were perceived as The past year featured intense competition on the prop- good investment targets, and the market is still very willing erty market, resulting in rising property prices. The com- to pay. The expected property yield of properties acquired bination of low interest rates and good funding prospects in the year was 7.3 (7.7) per cent. This yield can be consid- contributed to changing market required rates of return. ered positive against the background of acquisitions being In these circumstances, with increased competition and conducted in a market whose prices are still rising. lower market required rates of return, weighing risk against Other changes to key figures in the above table are returns, with the aim of buying and selling the right proper- largely attributable to extensive portfolio realignment in ties, becomes even more important. the year. Office properties in the acquisition from Weland Another effect of the positive value changes is that the Fastigheter and Fogelviks Holding are included in the For- mortgage ratio on properties declines, which can result in eign market area, which reduced economic occupancy inefficient capital tied-up. An important part of the Kungs- and profit margins. leden business model is to continously modify the property portfolio to enhance capital efficiency and return on Property management equity. The mortgage ratio can be influenced by refinanc- The contribution of property management to the progress ing properties or a portfolio. of earnings capacity is analysed by comparing properties

Geographical division Greater Stockholm Öresund region Greater Gothenburg Other Foreign Total Number 113 116 46 496 8 779 Lettable ﬂoor-space, 000 sq.m. 783.8 623.7 371.4 1,934.9 75.8 3,789.7 Book value, SEK m 6,289.4 4,947.1 2,576.4 11,087.3 850.0 25,750.2 Rental value, SEK m 691.8 549.8 297.1 1,430.5 100.8 3,070.0 Rental revenues, SEK m 627.6 491.1 274.4 1,296.1 47.4 2,736.7 Operating net, SEK m 427.3 339.8 211.1 836.5 30.4 1,845.2 Economic occupancy, % 91.6 90.6 92.6 91.5 47.1 90.0 Property yield, % 6.8 6.9 8.2 7.5 3.6 7.2 Proﬁt margin, % 68.1 69.2 76.9 64.5 64.1 67.4 24 Kungsleden 2005

¢ Office East South West Central North Foreign Total Number 48 78 32 27 12 7 204 Lettable floor-space, 000 sq.m. 264.4 284.2 248.4 91.4 30.6 73.2 992.2 Book value, SEK m 1,665.3 2,861.5 1 797.9 489.2 145.5 822.0 7,781.3 Rental value, SEK m 230.0 317.0 222.2 70.7 27.0 98.2 965.1 Rental revenues, SEK m 188.4 270.1 200.8 61.4 23.3 45.0 788.9 Operating net, SEK m 108.4 173.8 153.6 41.7 14.5 28.5 520.5 Economic occupancy, % 83.3 87.0 90.8 87.4 86.5 45.8 82.8 Property yield, % 6.5 6.1 8.5 8.5 10.0 3.5 6.7 Profit margin, % 57.6 64.3 76.5 68.0 62.2 63.3 66.0 ¢ Retirement homes East South West Central North Foreign Total Number 40 20 9 2 2 – 73 Lettable floor-space, 000 sq.m. 228.5 75.2 46.5 9.9 14.0 – 374.1 Book value, SEK m 3,118.5 1,038.9 545.5 107.0 112.0 – 4,921.9 Rental value, SEK m 253.9 93.1 52.2 11.2 11.9 – 422.2 Rental revenues, SEK m 252.8 91.1 51.3 10.8 11.9 – 417.9 Operating net, SEK m 201.6 71.4 34.8 9.2 9.4 – 326.4 Economic occupancy, % 99.7 98.4 98.4 100.0 100.0 – 99.3 Property yield, % 6.5 6.9 6.4 8.6 8.4 – 6.6 Profit margin, % 79.7 78.4 67.9 85.0 79.2 – 78.1 ¢ Industrial/warehouse East South West Central North Foreign Total Number 56 40 30 18 17 – 161 Lettable floor-space, 000 sq.m. 373.6 257.0 203.8 162.2 51.9 – 1,048.5 Book value, SEK m 1,487.7 787.4 698.6 551.1 125.2 – 3,650.1 Rental value, SEK m 208.5 99.6 91.4 81.2 20.5 – 501.3 Rental revenues, SEK m 188.7 88.5 83.5 71.7 18.5 – 450.8 Operating net, SEK m 128.1 68.4 66.0 50 13.1 – 325.8 Economic occupancy, % 91.2 89.4 92.2 94.0 90.1 – 91.5 Property yield, % 8.6 8.7 9.5 9.1 10.5 – 8.9 Profit margin, % 67.9 77.3 79.1 69.9 71.1 – 72.3 ¢ Retail East South West Central North Foreign Total Number 40 22 15 30 24 – 131 Lettable floor-space, 000 sq.m. 185.5 78.7 39.6 85.4 60.1 – 449.4 Book value, SEK m 1,338.0 478.5 243.4 543.4 482.4 – 3,085.7 Rental value, SEK m 169.8 58.2 30.8 71.9 47.4 – 378.2 Rental revenues, SEK m 145.0 51.9 27.2 64.9 45.1 – 334.1 Operating net, SEK m 102.0 35.6 17.0 39.9 34.0 – 228.6 Economic occupancy, % 86.1 90.3 89.0 90.5 95.6 – 89.0 Property yield, % 7.6 7.4 7.0 7.3 7.0 – 7.4 Profit margin, % 70.4 68.6 62.5 61.5 75.4 – 68.4 ¢ Care East South West Central North Foreign Total Number 12 4 34 – – – 50 Lettable floor-space, 000 sq.m. 39.6 82.1 172.5 – – – 294.1 Book value, SEK m 433.7 684.3 690.4 – – – 1,808.4 Rental value, SEK m 42.7 82.0 142.9 – – – 267.6 Rental revenues SEK m 41.4 77.7 137.0 – – – 256.1 Operating net, SEK m 32.7 50.8 86.2 – – – 169.7 Economic occupancy, % 98.5 94.7 95.9 – – – 96.0 Property yield, % 7.5 7.4 12.5 – – – 9.4 Profit margin, % 79.1 65.5 62.9 – – – 66.3 ¢ School East South West Central North Foreign Total Number 11 5 2 1 1 – 20 Lettable floor-space, 000 sq.m. 60.3 27.4 18.5 6.4 3.0 – 115.7 Book value, SEK m 751.5 142.6 173.0 20.0 27.0 – 1,114.1 Rental value, SEK m 73.4 22.5 20.9 3.7 3.8 – 124.3 Rental revenues, SEK m 68.7 21.8 20.2 3.5 3.8 – 118.0 Operating net, SEK m 56.2 16.7 14.7 1.9 3.1 – 92.7 Economic occupancy, % 94.2 97.0 96.6 94.9 100.0 – 95.3 Property yield, % 7.5 11.7 18.5 9.7 11.5 – 8.3 Profit margin, % 81.8 76.7 72.8 55.5 81.5 – 78.5 ¢ Other East South West Central North Foreign Total Number 61 13 8 34 23 1 140 Lettable floor-space, 000 sq.m. 261.3 25.3 14.0 111.6 101.1 2.6 515.8 Book value, SEK m 1,643.8 153.3 70.2 908.0 585.4 28.0 3,388.8 Rental value, SEK m 203.5 19.9 9.8 91.7 83.7 2.6 411.3 Rental revenues, SEK m 183.2 17.3 8.6 87.1 72.1 2.5 370.8 Operating net, SEK m 84.0 9.2 6.9 44.5 35.0 1.9 181.5 Economic occupancy, % 90.7 89.4 92.1 95.4 87.2 95.0 91.0 Property yield, % 5.1 6.0 9.9 4.9 6.0 6.9 5.4 Profit margin, % 45.8 53.0 80.8 51.1 48.5 78.7 48.9 ¢ Total East South West Central North Foreign Total Number 268 182 130 112 79 8 779 Lettable floor-space, 000 sq.m. 1,413.2 829.8 743.3 467.0 260.6 75.8 3,789.7 Book value, SEK m 10,438.5 6,146.5 4,219.0 2,618.7 1,477.5 850.0 25,750.2 Rental value, SEK m 1,182.0 692.4 570.1 330.4 194.3 100.8 3,070.0 Rental revenues, SEK m 1,068.2 618.5 528.5 299.3 174.7 47.4 2,736.7 Operating net, SEK m 713.0 425.9 379.3 187.4 109.1 30.4 1,845.2 Economic occupancy, % 91.1 90.5 93.2 92.4 90.5 47.1 90.0 Property yield, % 6.8 6.9 9.0 7.2 7.4 3.6 7.2 Profit margin, % 66.7 68.9 71.8 62.6 62.5 64.1 67.4 Kungsleden 2005 25 Financial overview

The property market featured sustained high activity and liquidity in 2005. Increased demand for properties resulted in price increases. The rental market remained weak with high vacancies, pressurising rents. Funding terms were attractive, with declining yields and narrower margins.

THE PAST YEAR Property trading The actual figures for the year were better than the pre- During the year, 466 (64) properties with floor-space of vious year, and exceeded the most recent forecast of 2,117,000 (417,000) sq. m. were acquired for SEK 13,351 SEK 925 m before tax by SEK 76 m. Return on equity (2,490) m. These acquisitions were made at estimated was 40 (14) per cent before tax and 38 (24) per cent after property yields of 7.3 (7.7) per cent. Meanwhile, 56 (116) tax, which compares favourably to Kungsleden’s 15 per properties were disposed for a total of SEK 2,917 (2,723) cent RoE target. The property yield was 6.7 (7.6) per m, and profits of SEK 318 (67) m. The disposals were cent. Actual property yields were pressurised in the year, effected at a property yield of 5.8 (6.8) per cent calculated through a general price increase on properties. Low yields in terms of sales values. The prices received were SEK 348 and new funding opportunities have shifted the required (86) m and SEK 280 (93) m above internal and external val- rate of return on property. uations respectively. For 17 (51) of these properties, sales The operating net increased by SEK 287 (100) m, values per property were less than SEK 10 m. the result of larger holding. The operating net was also Profit effect of disposed Sales, SEK m Profit, SEK m No. affected by the profit margin reducing from 71.2 to 70.7 properties per cent. The trading net was SEK 251 (-94) m better. Positive 2,233.6 376.8 31 Zero 374.6 0 16 Administration costs increased by SEK 13 (21) m. The net Negative 339.2 –28.6 9 financial position deteriorated by SEK 90 (23) m. Unre- Sales overheads –30.2 –30.2 alised value changes were SEK 1,191 m, an increase of Total 2,917.2 318.0 56 SEK 1,181 m on the previous year. The tax cost for the year Sales overheads are mainly transaction related, and prin- was SEK 129 m, an increase of SEK 506 m on the previous cipally comprise brokerage fees. year’s tax revenue of SEK 377 m.

Administration costs Rental revenues Administration costs include costs for the company’s Rental revenues amounted to SEK 1,845 (1,429) m for the management and central functions such as accounting, year, a 29 per cent increase. The increase is explained by finance, legal services, analysis and IT, as well as costs a larger property holding. This includes revenues received associated with stock market quotation. This also includes for the onward billing of property tax of SEK 36 (36) m. property administration, including costs for rental billing, As a percentage of total rental revenues, rental discounts rent negotiations, rent demands and statements. Adminis- reduced to SEK 18 (19) m. As in previous years, Kungs- tration costs include depreciation of equipment. leden is maintaining a low level of rental losses, at SEK 8 (7) m for 2005. Net financial position The progress of net financial position is due to a larger Property costs average property holding. The average interest rate was Operating and maintenance costs stood at SEK 468 (344) 3.91 per cent, against 4.93 percent as of 1 January. m, with operating costs comprising SEK 370 (274) m of The interest fixing period reduced from 2.41 to 2.15 this total, and maintenance costs, SEK 98 (70) m. A further years. SEK 245 (114) m was capitalised as investments in remaining properties, while the new production of properties amounted to SEK 88 (78) m. Unrealised value changes Typically, ground rent has a 10–20 year term, and Unrealised value changes are explained by changed fair accordingly, renegotiations are assessed to exert a limited values on properties of SEK 1,122 (117) m, changed val- impact on costs from year to year. ues on interest derivatives of SEK –9 (–99) m and value changes ensuing from the market valuations of other 26 Kungsleden 2005 Financial overview

financial instruments of SEK 77 (-7) m. The market value of FUNDING Kungsleden’s interest derivatives was SEK –234 (–225) m The bond market in 2005 at year-end. The year 2004 concluded on expectations of unchanged Coincident with the market valuation of other financial short yields throughout the first half-year 2005. The year instruments, the book value of outstanding liabilities in the also began with low inflation numbers and low interna- Balance Sheet increased by SEK 68 (146) m. tional price pressure. Employment progressed more weakly than expected in the first quarter, and market Tax growth estimates were downgraded through the spring. The following table summarises Kungsleden’s valued and In February, five-year swap yields were as low as 3.25 per accounted tax circumstances at year-end 2005. cent, but rose to 3.50 per cent in late March. Short yields declined somewhat in the same period. Temporary differences SEK m Progress on the labour market and consumption was Income tax (loss carry-forwards) 4,928 weaker in the second quarter, and short yields reduced by Financial instruments 397 approximately 0.40 per cent, simultaneous with five-year Shares in subsidiaries 297 Other 22 swap yields falling by as much as 0.80 per cent. Properties –4,197 In the summer, Riksbanken, the Swedish central bank, Total 1,447 took the decision to ease its benchmark rate by another Deferred tax assets 405 0.50 percentage points, pushing short STIBOR rates below 1.70 per cent. Five-year swap yields bottomed out Temporary differences on properties and income tax of at the end of June, when they converged on 2.60 per cent. SEK –1,472 m and 1,500 m respectively are additional. For This yield rose again by 0.30 per cent in the third quar- properties, these temporary differences arose through a ter, while short yields remained largely unchanged. GDP type of acquisition, where pursuant to IFRS, the value of forecasts started to upgrade in the late autumn, with some temporary differences cannot be accounted. Temporary inflation increase becoming discernible. As a result, the differences in income tax relate to these acquisitions. market started to discount benchmark rate hikes in late The accounted tax cost for 2005 corresponds to a tax 2005, with the Riksbank tightening for the first time in early rate of 6 per cent. This low tax cost is mainly explained 2006. Market pricing at year-end discounted expectations of by the possibility of conducting acquisitions and divest- further tightening of benchmark rates through the spring. ments of properties incorporated into companies, thereby achieving tax benefits compared to trading in properties Financial Policy directly. Kungsleden’s Financial Policy stipulates the guidelines and rules governing funding operations. The Finance Cash flow function is a group-wide activity responsible for group Cash flow from operating activities was SEK 1,001 (587) m. funding, liquidity planning and managing interest risk. Operating cash flow amounted to SEK 1,512 (865) m. Kungsleden’s Board formulates the Financial Policy and Investment activity generated a cash flow of SEK –7,261 stipulates how the various risks in the funding operation (–182) m, from financing activity, a cash flow of SEK 6,157 are to be limited. Moreover, the Board determines the divi- (–255) m. More information is in Kungsleden’s Cash Flow sion of responsibility and administrative regulations, which Statement on page 41, and in Note 27. mean that the Financial Policy offers guidance to the efforts of Kungsleden’s Finance function. Sensitivity analysis The sensitivity analysis in the following table illustrates Risk management objectives how operations are influenced by changes in the primary The Financial Policy stipulates that the overall objectives variables, and is based on the situation as of 31 Decem- of Kungsleden’s Finance function are: ber 2005. • To ensure the long and short-term access to capital; Profit impact, • To adapt Kungsleden’s funding strategy according to Sensitivity analysis Change SEK m the company’s operations in order for a stable long-term Rental revenue +/–1 % 18 +/–1 percentage capital structure to be achieved and maintained; Economic vacancy 20 point • To achieve the optimal net financial position within the Property costs +/–1 % 5 Funding costs, upon changed +/–1 percentage established risk limits. interest level point 69 +/–1 percentage Average funding costs point 180 Kungsleden 2005 27

Short and long-term access to capital is achieved through periods, and to attain the desired interest fixing, it uses the active re-negotiation and supply of new lines of credit. standardized products, mainly realizable long-maturity The Financial Policy stipulates permitted counterparties interest swaps. for transactions, and the terms of unilateral commitments. The strategy is embodied as a benchmark portfolio for The Financial Policy also regulates the investment of ongoing management. The interest fixing strategy is sub- surplus liquidity in terms of counterparty, instruments and ject to ongoing evaluation and is also intimately linked time-frame. The Financial Policy stipulates the framework to capital structure. The benchmark portfolio also has a for liquidity reserves for fulfilling payment commitments. limited risk mandate associated, stipulating maximum The financial strategy is modified to the business to permitted divergence within each maturity interval. The achieve and retain a stable long-term capital structure. mandate has been determined to enable the active man- The section of the business model on page 12–13 states agement of the funding portfolio, with divergence from the Kungsleden’s financial objectives and risk limits. Kung- benchmark reported and evaluated on an ongoing basis. sleden does not utilize hedge accounting, but accounts Kungsleden continues to monitor the financial mar- value changes on derivative instruments in its Income kets, and is very prepared to further limit its interest risk. Statement. Increased loan ratios may result in an adjustment of the floating interest portion of the funding portfolio. At year- Financial risks end 2005, the average interest fixing period was 2.15 (2.41) Interest risk is defined as the risk of a profit and cash-flow years. impact of a change in market yields. Funding risk is defined as the risk of funding not being Funding structure forthcoming, or only available on unfavourable terms. As of 31 December 2005, Kungsleden’s total assets Credit risk is defined as the risk that a counterparty does amounted to SEK 27,470 m, of which properties were SEK not fulfil all or parts of its commitment. Counterparty risk is 25,750 m. The following table illustrates funding at year-end. in swap agreements and investments of surplus liquidity. Liquidity risk is defined as the risk of not having access Loan maturity structure as of 31 December 2005 to liquid funds or un-utilized credits to satisfy payment Maturity Total, SEK m Proportion, % commitments. 2006 3,137 17.1 2007 492 2.7 2008 1,316 7.2 Financing 2009 8,266 45.0 In nominal terms, the loan portfolio expanded by SEK 2010 5,020 27.4 8,241 m to SEK 17,701 m in 2005. At year-end, SEK 5,400 2012 107 0.6 2013 20 0.1 m of the syndicated loan totalling SEK 6,000 m had been Total 18,358 100.0 drawn down. This syndicated loan agreement matures in December 2010. In 2005, Kungsleden entered 19 loan Interest fixing periods as of 31 December 2005 agreements totalling SEK 5,484 m, of which SEK 322 m Loan, Propor- Average Interest maturity are loans taken over when exercising an option to acquire SEK m tion, % interest, % the remaining portion of Hemsö Äldreboende AB, previ- 2006 10,553 59.6 3.02 2007 1,028 5.8 4.95 ously jointly owned with Catella. SEK 3,932 m of loans 2008 1,162 6.6 5.28 were also taken over coincident with business combina- 2009 643 3.6 5.11 tions. The SEK 1,782 m of new loans related to funding 2010 1,614 9.1 6.26 retirement homes. 2011 800 4.5 5.02 2012 1,100 6.2 4.01 2013 500 2.8 5.07 Liquidity 2014 300 1.7 5.16 As of 31 December 2005, available liquidity including an Total Loans 17,701 100.0 3.91 Derivatives 234 un-utilised committed credit facility and the un-utilised Market valuation of other portion of the syndicated loan facility, stood at SEK 1,134 m financial instruments 68 Total 18,003 of which SEK 520 m is a syndicated loan agreement.

FORECAST 2006 Interest fixing strategy and risk management The Board of Directors expects profits for calculating divi- Kungsleden’s interest fixing strategy is based on the view dends of SEK 1,500 m. Profits for calculating dividends that even with a relatively high share of short interest fix- corresponds to the Cash Flow Statement item cash flow ings in its funding portfolio, Kungsleden can retain a low- from operating activities. risk level. Usually, Kungsleden uses loans with short fixing 28 Kungsleden 2005 Financial overview

SUMMARY FINANCIAL PERFORMANCE The Annual Reports for 2000 - 2004 were prepared pur- The following table presents year-end data for 2001, 2002, suant to the Swedish Annual Accounts Act, RR (Redo- 2003, 2004 and 2005. The following ﬁnancial information visningsrådet, the Swedish Financial Accounting Stan- should be read in the context of, and based entirely on, the dards Council) recommendations and Emerging Issues Annual Reports for 2001–2005. Task Force statements and NBK (Industry and Commerce

SUMMARY INCOME STATEMENT IFRS SEK m 2001 2002 2003 2004 2004 2005

Property management Rental revenue 1,039 1,291 1,376 1,508 1,429 1,845 Operating and maintenance costs –294 –349 –404 –423 –344 –468 Property tax –45 –49 –42 –50 –50 –54 Ground rent –10 –13 –12 –18 –18 –19 Property administration –52 –62 –67 –83 Operating net 1,017 1,304 Proﬁt margin 638 818 850 934

Property trading Sales revenues, net 2,704 2,917 Sales revenues, properties 1,057 880 1,334 2,723 Sales administration, incl. overheads –16 –16 –24 –33 Book value Acquisition value –2,520 –2,514 Realised value changes –117 –85 Total book value –941 –727 –1,158 –2,520 –2,637 –2,599 Trading net 67 318 Proﬁt from property trading 100 137 152 170

Gross proﬁt 738 955 1,002 1,104

Administration costs –139 –152 Central administration costs –30 –32 –39 –42 Value adjustments on properties –51 –48 –45 –35

Operating proﬁt 657 875 918 1 027

Net ﬁnancial position –277 –423 –433 –456 –456 –546

Proﬁt after ﬁnancial items 380 452 485 571

Unrealised value changes 10 1,191

Proﬁt before tax 499 2,116

Tax –114 –130 260 357 377 –129

Net proﬁt 266 322 745 928 876 1,987

SUMMARY BALANCE SHEET IFRS SEK m 2001 2002 2003 2004 2004 2005

Assets Properties 13,452 25,750 Investment properties 9,477 10,130 12,336 12,463 Receivables, etc 994 1,556 Fixed assets 56 15 196 566 Other current assets 260 140 372 601 Liquid assets 154 127 4 67 68 164 Total assets 9,947 10 ,412 12,908 13,697 14,514 27,470

LIABILITIES AND SHAREHOLDERS’ EQUITY Shareholders’ equity 2,188 2,310 2,828 3,510 3,954 6,649 Interest-bearing liabilities 5,966 7,461 9,480 9,460 9,832 18,003 Operating liabilities, etc. 728 2,818 Non-interest bearing liabilities 1,793 641 600 727 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 9,947 10,412 12,908 13,697 14,514 27,470 Kungsleden 2005 29

Stock Exchange Committee) recommendations. From ing IFRS, Kungsleden chose to revise the structure of its 1 January 2005, corporations listed in the EU should pre- Income Statement and Balance Sheet, explaining why the pare their consolidated financial statements pursuant to old and new structures are included in the following table. IFRS. Accordingly, the following illustrates figures calcu- Some key figures were also re-defined as a result of these lated pursuant to IFRS for the full year 2004. When adopt- changes.

KEY FIGURES IFRS SEK m 2001 2002 2003 2004 2004 2005

Property-related Earnings capacity Property yield, % 7.8 7.2 Property yield, % 8.6 8.6 8.3 7.9 Economic occupancy, % 93.7 90.0 Economic occupancy, % 93.4 93.6 93.9 93.7 Proﬁt margin, % 72.7 67.4 Proﬁt margin, % 63.5 65.0 65.5 64.4

Actuals Property yield, % 7.6 6.7 Property yield, % 8.0 8.3 7.6 7.5 Economic occupancy, % 93.2 91.4 Economic occupancy, % 92.2 92.9 93.6 93.0 Proﬁt margin, % 71.2 70.7 Proﬁt margin, % 61.5 63.4 61.8 61.9 Market value of properties 10,301 11,135 13,291 13,452 13,452 25,750 Book value of properties 9,477 10,130 12,336 12,463 13,452 25,750 Surplus value of properties, less deferred tax1 593 724 688 712

Financial Return on total capital, % 6.7 7.0 Return on total capital, % 8.0 8.6 7.9 7.8 Return on equity, % 12.4 14.3 29.0 29.1 24.1 37.5 Interest cover, multiple 2.1 2.7 Interest cover, multiple 2.4 2.1 2.1 2.3 Equity ratio, % 22.0 22.2 21.9 25.6 27.2 24.2 Proportion of risk-bearing capital, % 21.6 23.4 20.6 21.8 24.9 22.7 Gearing, multiple 2.7 3.2 3.4 2.7 2.5 2.7 Mortgage ratio, % 63.0 73.4 76.8 75.9 73.1 69.9 Adjusted equity 1,989 2,083 2,581 3,225 3,670 6,149

Investments Investments in machinery/equipment, net –1.4 –4.5 –1.3 –1.8 –1.8 –7.4

Employees No. of employees 83 81 90 83 83 213

Data per share Share price, SEK2 58.50 72.50 96.50 125.50 125.50 230.0 Beta value 0.04 0.43 0.05 0.31 0.31 Dividend, SEK2 5.25 6.00 6.50 7.50 7.03 11.00 Total yield, % 37.0 32.9 41.4 37.8 36.8 88.9 Dividend yield, % 9.8 9.0 8.3 7.8 6.7 5.6 P/E ratio, multiple 6.9 8.5 4.9 3.9 2.6 4.2 P/CE ratio, multiple 3.4 4.9 4.1 7.3 5.2 3.8 Operating net, SEK2 25.2 31.6 Operating surplus, SEK2 16.80 21.60 22.40 24.60 Profit, SEK2 7.00 8.50 19.60 24.50 21.70 48.10 Cash flow from operating activities, SEK2 14.50 24.30 Cash flow from operating activities, SEK2 13.35 12.00 17.75 13.20 Shareholders’ equity, SEK 57.70 60.90 74.60 92.60 104.3 146.10 Property book value, SEK2 249.90 267.20 325.30 328.70 354.80 565.9 Number of shares, at year-end2 37,917,240 37,917,240 37,917,240 37,917,240 37,917,240 45,500,688 Average number of shares in the year2 37,917,240 37,917,240 37,917,240 40,430,117 40,430,117 41,282,128

1 Surplus value is calculated as the difference between estimated fair value and book value at each balance sheet date, less deferred tax (28%). 2 These key ﬁgures have been adjusted due to the 2:1 split conducted in May 2005 and for the bonus issue element of the new issue conducted in October 2005. 30 Kungsleden 2005 Environmental report

Kungsleden’s environmental efforts will: • Proceed on the basis of prevailing environmental legislation and its staff’s high levels of expertise to create a proﬁtable and environmental property holding on market terms; • To focus on the continual minimisation of the environmental burden coincident with the management and reﬁnement of its property holding; • Be an integrated and goal-oriented part of business.

Kungsleden’s environmental objectives are revised and this policy, Kungsleden aims to realise the company’s made progressively more stringent, keeping pace with the vision: by means of skilled entrepreneurship and a high realization of previous objectives, and new issues com- level of expertise, Kungsleden will become Sweden’s most ing into focus. In general terms, Kungsleden’s objectives profitable and successful property company. imply that consistently, the environmental consequences of its actions will be considered in day-to-day efforts and Environmental efforts in 2005 in the development of its property holding. In the financial year 2005, Kungsleden conducted environ- The objective of environmental efforts is for committed mental activities pursuant to previously determined objec- staff to view environmental issues as an integrated part of tives. Activities to reduce energy consumption and replace their day-to-day efforts. energy sources continue. Measures include the gradual Kungsleden’s business concept is to own and manage replacement of oil boilers with district heating. Analys- properties with high and stable long-term returns. Returns ing and examining the opportunities to connect our elec- are more important than property type or geographical tricity supply to wind turbines is one of the more exciting location, and Kungsleden creates high and stable returns projects that Kungsleden has begun. Environmental con- by owning properties that generate a high yield in relation siderations have also been implemented as a natural part to their risk. Thus environmental initiatives are a self-evi- of tendering and procurement. Routines for waste sort- dent part of its business concept. ing at source to minimize landfill have been enhanced, and By constantly improving its environmental know-how, Kungsleden is working to increase the collaboration with Kungsleden can refine its property portfolio, and thereby its tenants on this issue. offer its tenants environmental and profitable solutions. As

a transaction-intensive business, managing environmental Overall central objectives for 2006–2007 risks to avoid ecological damage in its property portfolio As part of its consistent environmental efforts, Kungs- as far as possible is particularly important. leden has formulated a number of overall objectives for its Kungsleden constantly pursues improvements to alle- operations until year-end 2007. viate the adverse environmental impact it generates by

offering the best possible technology and sustainable • Cut energy consumption (heating and electricity) in properties from an environmental perspective, and the its properties so that airborne CO2 emissions reduce. optimal technology and most sustainable properties at Kungsleden has set the objectives of cutting energy con- the rate and extent its tenants demand. sumption by 10 per cent over a two-year period. The success factors for its environmental initiatives • Work towards documented good environmental status in are the knowledge and commitment of its staff, plus the our properties. ambition to actively gather and disseminate environmen- • To direct operations towards the further alleviation of tal knowledge. Simultaneous with minimising the hazard- environmental impact. ous environmental impact of business, Kungsleden will also satisfy its quality, working environment and competi- tive standards. Through Kungsleden’s environmental policy, the company strives to reduce the environmental impact when properties are acquired and managed. Further, through Kungsleden 2005 31 Corporate governance report

Kungsleden AB (publ), corporate identity number 556545-1217 is a quoted property company. Kungsleden’s property holding comprised 779 properties with a book value of approximately SEK 26 billion as of 31 December 2005. The properties were located in a total of 148 Swedish municipalities. Kungsleden has been quoted on the Stockholm Stock Exchange O-list since 14 April 1999.

Adoption of the Swedish Corporate Governance Code ing of the Chief Executive’s statement, and minutes from Kungsleden adopted the Swedish Corporate Governance the Meeting, will be available at the company’s Website, Code (“the Code”) on 1 July 2005. The implications of www.kungsleden.se. Kungsleden’s adoption included a review of existing deci- Considering the nature of the company’s shareholders, sion-making systems, through which shareholders con- the Board of Directors does not consider providing min- trol the company, directly and indirectly. The company has utes in languages other than Swedish as justified. prepared this corporate governance report as part of its adoption of the Code. The corporate governance report The nomination process reviews how the company has adopted the Code in the The AGM for 2004 resolved that each September, the financial year, its chosen divergences from individual Code Chairman of the Board will contact the company’s major stipulations and the justification for these divergences. shareholders to create an Election Committee. The Elec- The report, including the section on internal controls, has tion Committee’s tasks include considering and submit- not been reviewed by the company’s auditors. ting proposals to the AGM regarding the Board composition, Directors’ and auditors’ fees, and where applicable, Annual General Meeting appointment of auditors. The Annual General Meeting for the financial year 2004 was held on 7 April 2005. The AGM resolved on issues Election Committee including a 2:1 share split, whereupon the nominal amount The election committee for the AGM 2006 comprises KG of shares was revised from SEK 2.50 to SEK 1.25. An Lindvall (Election Committee Chairman, representing Extraordinary General Meeting was also held on 20 Sep- Robur), Gunnar Balsvik (representing Kåpan Pensioner), tember 2005 to approve the Board of Directors’ deci- Olle Florén and Chairman of the Board Bengt Kjell (Con- sion on a private placement of SEK 1,001 m. Minutes from venor). shareholders’ meetings in 2005 have been uploaded to The composition of the Election Committee was pub- Kungsleden’s Website: www.kungsleden.se lished on 20 October 2005. The AGM for 2006 will be held at Hotel Rival, Mariator- Members of the Election Committee have right to reim- get 3, Stockholm, Sweden on 6 April 2006. For more infor- bursement for their expenses relating to evaluation and mation on the AGM, please refer to page 71 and Kungs- recruitment work for the company. Otherwise, no remu- leden’s Website. neration is payable from the company. A statement of the Election Committee’s activities has been uploaded to Proceedings at shareholders’ meetings Kungsleden’s Website, www.kungsleden.se. Considering the company’s shareholders, and economic viability, the Board of Directors decided that offering Board of Directors shareholders the opportunity to participate at sharehold- Kungsleden’s current Articles of Association stipulate the ers’ meetings remotely is not justifiable, nor is offering company’s Board of Directors comprising a minimum of simultaneous interpretation of shareholders’ meetings or three and a maximum of six members with a maximum of translations of the material the company presents stipu- two deputies. The Board members and deputies are elected lated by the Code. Notices convening shareholders’ meet- annually at the AGM for the period until the end of the next ings will be available in English, while other material for AGM. The AGM in 2005 re-elected the incumbent Board of shareholders’ meetings will only be produced in Swedish. Directors comprising six members with no deputies. After conducting the Meeting, an image and sound record- 32 Kungsleden 2005 Corporate governance report

Board activities and procedural rules Directors’ fees Board activities conform to the procedural rules adopted, Fees are payable to the Board pursuant to AGM resolu- and the instructions issued regarding the division of tion. The Meeting resolves on proposals from the Elec- responsibility between the Board of Directors and Chief tion Committee on the division of fees between the Chair- Executive, and the forms for financial reporting to the man and Board members. No fees are payable to Board Board. The Board must meet a minimum of four times members employed by the company. The AGM in 2005 annually, with each meeting pursuant to an approved resolved on Directors’ fees of SEK 1,030,000 of which agenda. Matters for consideration regarding each pro- SEK 350,000 is payable to the Chairman of the Board and posal on the agenda are sent to each Board member SEK 150,000 to each of the remaining Board members. in advance. The procedural rules also stipulate that the SEK 80,000 of fees for committee activities were payable, Board ensures that the company’s auditors personally divided between the members of a Committee appointed attend at least one Board meeting per year, presenting by the Board. their observations from their audit, and their evaluation of the company’s internal controls. Attendance at meetings Main Board Audit Remuneration in 2005 of Directors Committee Committee No. of meetings, total 26 3 2 Board composition Bengt Kjell x o 26 x o 2 The board comprises six members, of which the com- Mats Israelsson x 24 x 2 Jonas Nyrén x 24 x o 3 pany’s Chief Executive, Jens Engwall, is one member. The Per-Anders Ovin x 26 x 3 Chairman of the Board, Bengt Kjell, was appointed at the Anna Weiner Jiffer x 26 x 3 Jens Engwall x 26 Board meeting following election in April 2005. The Board Average attendance % 97 100 100 has been composed to actively and efficiently support x - Member of Board/Committee management in the company’s development. Moreover, o - Chairman of Board/Committee the Board will observe and monitor operations. Skills and experience of segments including the property sector, Board Committees funding, business development and capital market issues The Board has inaugurated two internal committees, are important to listed corporations like Kungsleden. a Remuneration Committee and an Audit Committee, Referring to Board members, pursuant to the defini- responsible for considering issues in their relevant areas tions of the Code, Jens Engwall is not independent with of responsibility. regard to his role as Chief Executive, nor is Mats Israels-

son independent with regard to him being a Board mem- Remuneration Committee ber for over 12 years. Other Board members are inde- The Board meeting following election in April 2004 pendent of the company, the corporate management and appointed a Remuneration Committee comprising Bengt major shareholders. Information on the Board composi- Kjell and Mats Israelsson. This Committee submits pro- tion, and a presentation of each Board member, can be posals to the Board regarding the Chief Executive’s found on page 35. employment terms, the terms for staff that report directly to the Chief Executive and principle issues relating to pen- Board activities in 2005 sions, salaries, redundancy pay, fees and beneﬁts. In 2005, the Board met on nine occasions, in Stockholm

on all occasions. Per capsulam meetings were held on Audit Committee 17 occasions coincident with acquisition, divestment and The Board meeting following election in April 2005 inau- funding issues. For attendance and occasions, please gurated an Audit Committee comprising Jonas Nyrén, refer to the table below. The Board considered issues Per-Anders Ovin and Anna Weiner Jiffer. The purpose of including strategy, objectives, business plan, markets, the Audit Committee is to provide a dedicated forum for external reporting, property acquisitions and dispos- accounting and audit issues. The Audit Committee’s areas als, investments in existing properties, raising borrow- of responsibility include the company’s internal monitoring ing and other funding issues, preparing sales mandates and control systems, and quality-assuring external ﬁnan- and incentive contracts. Both the company’s Deputy Chief cial reporting. Executives, and the company lawyer, also the Board secretary, attended Board meetings. Kungsleden 2005 33

The Committee held three meetings in 2005. The com- factory and expedient for an organization of Kungsleden’s pany’s auditors and representatives of the company scale. No indications that internal controls are insufﬁcient attended all meetings. has arisen, and accordingly, the Board and management do not perceive any need for an internal audit function.

Internal controls Pursuant to the Swedish Companies Act and the Code, Auditors the Board is responsible for internal controls. This report At the AGM in 2003, Authorized Public Accountant has been prepared pursuant to section 3.7.2 and 3.7.3 Thomas Thiel from KPMG was appointed as the com- of the Code, and is thus confined to internal controls on pany’s auditor for the period until the AGM 2007 inclu- financial reporting. sive. The deputy auditor is Björn Flink. Auditors have been The control environment the board and management elected since the AGM in 1998. In addition to auditing, over continually utilizes forms the foundation of internal con- the past three years, KPMG has also provided tax advisory trols, although decision-paths, authority and responsi- services to Kungsleden. In 2005, the auditors also reviewed bility delegated and communicated within the organiza- the new issue prospectus. Fees are payable pursuant to tion also is important. The company works continuously approved account. In 2005, audit fees were SEK 500,000 and actively on mapping, evaluating and managing the for the parent company and SEK 2,600,000 for the group. risks the company is exposed to in its operations. Kungs- leden is a process-oriented corporation, and integrates Group management risk assessment routines into its essential business pro- In addition to the Chief Executive, Jens Engwall, the group cesses. The risks identified regarding financial report- management comprises the Deputy Chief Executive/Chief ing are managed through the company’s control structure Financial Officer, the Deputy Chief Executive/Chief Oper- encompassing business controls and business planning ating Officer and four Regional Directors. Please refer to processes including supporting IT systems. page 34 for information on each executive. Tools for monitoring operations, prepared and used both for preparations ahead of property acquisitions and Remuneration to the group management divestments, and for overall monitoring of operations, and Basic salary, performance-related pay, other benefits as supporting data for valuations, are examples of Kung- and pension are payable to the corporate management. sleden’s control documents. A review of the principles of remuneration to the Board Kungsleden has designed its internal controls so that and corporate management, and the scale of remuner- it conducts expedient control activities at an overall level ation payable in 2005 is stated in Note 8 of the Annual (such as ongoing profit analysis on the basis of operational Report. There are no equity or share price-related incen- and legal group structures, analysis of key figures) and tive schemes for the Board of Directors and Chief Execu- more routine and system-oriented controls such as recon- tive. The terms of bonus agreements are stated in Note 8 ciliation, and certification and similar controls intended to of the Annual Report. prevent, discover and rectify errors and variances. Con- At the AGM in 2006, the Board of Directors will state the trol activities have been designed to manage the essential principles the Board utilises on the issue of remuneration risks associated with financial reporting. to the corporate management. The Swedish Companies The Board of Directors receives ongoing financial Act stipulates that the Board is responsible for appoint- reporting, and each scheduled Board meeting consid- ing a Chief Executive and resolving on his/her remunera- ers the group’s financial position. The company’s auditors tion. The Board considers that this structure, which has also personally report their observations from their audit, been prevalent for a considerable time, will continue to and their evaluation of internal controls. apply, and will not be submitted for resolution by the AGM On assignment from the Board, the corporate manage- in 2006. The responsibility for remuneration to the Chief ment is conducting a project to document the company’s Executive and other corporate managers will remain on internal controls regarding financial reporting. The com- the Board of Directors’, with no parts delegated to the AGM. pany has no internal audit function. The need for such a function is evaluated annually by the Board and management. At present, internal controls are considered satis- 34 Kungsleden 2005 Management

Management team (left to right)

Lars Thagesson, born in 1959, has compulsory schooling qualifi- cations and is Kungsleden’s Deputy Chief Executive/Chief Opera- ting Officer. Mr. Thagesson has been a Kungsleden employee since 1993 and took up his current position in 2005. He holds no Kungs- leden shares, nor has shares/any holdings in companies Kungs- leden has any significant business relationships with.

Johan Risberg, born in 1961, has a B.Sc. (Econ.) from the Stock- holm School of Economics and is Kungsleden’s Deputy Chief Executive/Chief Financial Ofﬁcer. Mr. Risberg has been a Kungsle- den employee since 1996 and took up his current position in 1998. Kungsleden holdings: 170,060 shares. No other shares/holdings in companies Kungsleden has any signiﬁcant business relationships with.

Jens Engwall, born in 1956, has a B.Sc. (Eng.) and is Kungsleden’s Chief Executive. He has been a Kungsleden employee since 1993 and took up his current position in 1993. Kungsleden holdings: 276,000 shares. No other shares/holdings in companies Kungs- leden has any signiﬁcant business relationships with.

Eva Eriksson, born in 1959, has a B.Sc. (Eng.) and is Kungsleden’s Regional Manager, East. Eva Eriksson was hired and took up her position in 2005. She joined Kungsleden from JM AB. She holds no Kungsleden shares.

Göran Linder, born in 1968, has a B.Sc. (Econ.) and is Kungsleden’s Regional Manager, Retirement Homes. Mr. Linder has been a Kungsleden employee since1998 and took up his current position in 2003. Kungsleden holdings: 6,000 shares.

Eskil Lindnér, born in 1959, has a B.Sc. (Eng.) and has been Kungsleden’s Regional Manager, South since 2003. Mr. Lindnér has been a Kungsleden employee since 2000. Kungsleden holdings: 6,480 shares.

Benny Ivarsson, born in 1955, has a B.Sc. (Econ.) and is Kungsleden’s Regional Manager, West. Mr. Ivarsson has been a Kungsleden employee since 1999 and took up his current position in 2000. Kungsleden holdings: 10,800 shares. Kungsleden 2005 35 Board of Directors

Board of Directors (left to right)

Jonas Nyrén, born in 1951, has a B.Sc. (Econ.) from the Stockholm School of Economics. Mr. Nyrén has been a Kungsleden Board member since 2001. Other Board positions include SkandiaBanken AB and Bonnier Holding. He holds 7,350 Kungsleden shares.

Bengt Kjell, born in 1954, is Chairman of the Board and has a B.Sc. (Econ.) from the Stockholm School of Economics. Mr. Kjell is COO of AB Industrivärden and has been a Kungsleden Board member since 1996. Other Board positions include Pandox AB, Helsings- borgs Dagblad, Munters AB and Ossur HF. He holds 20,000 Kungs- leden shares.

Jens Engwall, born in 1956, has a B.Sc. (Eng.) and is Kungsleden’s Chief Executive. Mr. Engwall has been a Kungsleden employee since 1993. Other Board positions include FastPartner AB and Vasal- len AB. He holds 276,000 Kungsleden shares.

Anna Weiner Jiffer, born in 1971, has a B.Sc. (Eng.) and is active in biotech enterprise Ellen AB. Anna Weiner Jiffer has been a Board member since 2003. Other Board positions include Ellen AB and Connect Väst AB. She holds 120 Kungsleden shares.

Per-Anders Ovin, born in 1956, has a B.Sc. (Econ.) from the Stock- holm School of Economics and is an independent consultant. Mr. Ovin has been a Board member since 2003. Other Board positions include Mengus Stockholm AB, Catella Capital AB, ABG Sundal Collier A/S and EDX Ltd. He holds no Kungsleden shares.

Mats Israelsson, born in 1940, has a B.Sc. (Eng.) and is an independent consultant. Mr. Israelsson has been a Kungsleden Board member since 1993. Other Board positions include Castellum AB, Akademiska Hus i Stockholm AB, Atrium Fastigheter AB, Veidekke Bostad AB and Forsen Projekt AB. He holds 9,600 Kungsleden shares.

Auditors Auditor Deputy Auditor Thomas Thiel. Born in 1947. Björn Flink. Born in 1959. Authorised Public Authorised Public Accountant, KPMG. Accountant, KPMG. 36 Kungsleden Annual Report 2005 Report of the Directors

REPORT OF THE DIRECTORS Other major acquisitions in the year included the acquisi- Summarised comments tion of 27 properties from foods provider ICA, 61 proper- The past financial year featured a high transaction tempo ties from Norrvidden Fastigheter AB and 25 central pro- on the market, with a record level of property transactions. perties in the city of Karlstad, western Sweden. The fact that Kungsleden was one of the most active play- The single largest disposals were the properties with ers in the year was reflected in net profits, Kungsleden’s designation Angered 94:2 in Gothenburg, generating a strongest since operations began. profit of SEK 125 m, Vagnhallen 15, with a profit of SEK 20 Property trading generated a strong trading net, helping m and four properties in Karlstad, an aggregate profit of enhance the portfolio’s risk-adjusted returns. By increa- SEK 58 m. sing operating net, by SEK 287 m, the second component of Kungsleden’s business model, property management, Overview 2005 2004 Profit, SEK m contributed to better profits, mainly through larger average Property management property holdings. Rental revenues 1,845 1,429 Public sector initiatives intensified, and also extended Operating and maintenance costs –468 –344 to acquisitions of care and school properties. Property tax –54 –50 Ground rent –19 –18 Operating net 1,304 1,017 Significant events in the financial year Property trading In early 2005, Kungsleden took a decision to intensify its Sales revenues, properties 2,917 2,704 rate of acquisitions, because its management perceived Book value –2,599 –2,637 Trading net 318 67 good prospects of creating shareholder value by exploit- Administration costs –152 –139 ing the discrepancy between property yields and funding Net financial position –545 –456 costs. Subsequently in 2005, Kungsleden acquired a total of 466 properties for SEK 13,351 bn. In the same period, Unrealised value changes 1,191 11 56 properties were divested for SEK 2,917 bn. Profit before tax 2,,116 500 Tax –129 377 Kungsleden consummated a SEK 1,001 m rights issue Net profit 1,987 877 with the aim of enabling it to exploit attractive acquisition Cash flow, SEK m 2005 2004 opportunities. This new issue increased share capital by Operating activities 1,201 500 SEK 9,497,310. Each shareholder was able to subscribe Investment activities –7,261 –182 for one new share for every five existing shares. After a Financing activities 6,157 –255 2:1 split in 2005 and the share issue, Kungsleden’s share Cash flow for the year 97 63 capital was SEK 56,875,860 at year-end. Coincident with Liquidity, opening balance 67 4 Liquidity, closing balance 164 67 the rights issue, on 10 October, a holding totalling 183 properties with total property value of SEK 5.4 bn was acqui- Kungsleden’s equity ratio as of 31 December 2005 was red from Weland Fastigheter and Fogelviks Holding. This 24.2 (27.2) per cent, and un-utilised credit facilities were holding, encompassing 1 m sq.m. of lettable floor-space. SEK 1,134 (1,509) m. Overall, the acquired holding had rental value of SEK 834 m and rental revenues of SEK 681 m and operating net of IFRS SEK 357 m, corresponding to a property yield of 6.6 per The group has adopted IFRS accounting standards, as cent. Kungsleden took possession of this holding on 1 endorsed by the EU Commission, from 1 January 2005. December 2005. Kungsleden also took on existing staffing Adoption of these new standards implied a change of of 100 full-time employees, half of which were janitors. accounting principles, which exerted a significant effect Kungsleden continued to advance its positioning as on Kungsleden’s income statement and balance sheet. To Sweden’s leading retirement homes player by acquiring attain comparability with the group’s progress, compara- more properties. Kungsleden expects retirement homes to tive years have been recalculated. Definitions have also enjoy very robust growth through the next 30 years, par- been revised, as have risk limits and objectives. ticularly considering the demand arising from an aging population. 37

Mattias Andersson Business Controller Employed: 2002 Age: 32

How would you describe ‘the Kungsleden spirit’? What do you think Kungsleden could get better at? A business focus; energy. We dare to take our own view, based on There is always scope and opportunities to be quicker and more know-how and understanding. efficient in doing deals. What was the biggest change in your work in the year? What do you expect from 2006? Conducting the rights issue, a major strategic decision and an impor- More of the same! By that I mean sustained brisk profit and profita- tant component for us generating even more earnings in the future. bility growth. Which business activity do you think is Kungsleden’s What is Kungsleden’s biggest asset, and why? best so far? The staff, because we’re skilled and adaptable. Our retirement homes initiative, which has now been extended to care and schools. This focus on properties with public operations is a winning move.

Proposed appropriation of profits risk of not having access to liquid assets to fulfil its com- The Board of Directors’ proposed appropriation of profits mitments through good liquidity and access to the neces- is stated on page 54. sary credits. Please refer to Note 28 and page 27 for more information on risks, policies and the group’s special con- Expected future progress siderations. Please refer to the forecast for 2006 on page 27. Significant events after the end of the year Parent company Kungsleden divested 71 retail properties for SEK 1,721 Parent company profits after tax were SEK 3,655 (535) m. m in January, which comprised 185,000 sq.m. of lettable Sales were SEK 0 (0) m. Parent company assets primarily floor-space, of which some 157,000 sq.m. was retail stores comprise funding of subsidiaries’ property holdings, divi- with a rental value of SEK 162 m. The sales price was SEK ded between shares in subsidiaries of SEK 5,257 (1,235) m 7 m above book value. Another property was divested and interest-bearing internal funding of SEK 516 (1,631) m. after the end of the financial year, generating profit of SEK Funding was mainly through shareholders’ equity of SEK 2 m. These transactions will contribute approximately SEK 5,574 (2,691) m and external liabilities of SEK 800 (300) m. 215 m to profits for calculating dividends for 2006. Kungs- leden also acquired one care property for SEK 75 m. Financial risk management In January 2006, Jens Engwall announced his resigna- In financial contexts, the parent company is primarily tion as Kungsleden’s Chief Executive, and the search for exposed to interest risks, which means the risk of changes his successor has begun. Mr. Engwall will remain as Chief in interest levels affecting financial revenue and costs. This Executive until mid-year, and the Board has reached an risk is limited to an SEK 800 m loan. The parent company agreement that he will remain at the company’s disposal is also exposed to liquidity risk. Kungsleden eliminates the after his six-month notice period, until 1 January 2007. 38 Kungsleden Annual Report 2005 xxxxIncome statement

Group Parent company SEK m Note 2005 2004 2005 2004

¢ Property management Rental revenue 5 1,845.1 1,428.6 Operating and maintenance costs –468.4 –344.2 Property tax –54.1 –49.8 Ground rent 4 –18.5 –17.5

Operating net 1,304.1 1,017.1

¢ Property trading Sales revenues, net 2,917.2 2,704.0 Book value Acquisition value –2,513.9 –2,519.9 Realised value changes –85.3 –117.2 –2,599.2 –2,637.1

Trading net 318.0 66.9

Administration costs 6-9 –151.5 –138.9 –8.7 –8.5

¢ Net ﬁnancial position Proﬁt from shares in group companies 10 3,271.0 579.1 Financial revenue 11 3.9 8.1 310.4 182.0 Financial costs 11 –549.5 –464.1 –340.9 –234.9 –545.6 –456.0 3,240.5 526.2

¢ Unrealised value changes –Investment property 1,122.1 116.7 –Financial instruments 68.8 –106.3 1,190.9 10.4

Proﬁt before tax 2,115.9 499.5 3 231.8 517.7

Tax 12 Current tax –59.7 –10.9 Deferred tax –69.4 388.2 423.3 17.2 –129.1 377.3

Net proﬁt 1,986.8 876.8 3,655.1 534.9

¢ Proﬁt attributable to parent company’s shareholders 1,986.8 876.8 3,655.1 534.9

Average number of shares 41,282,128 40,430,128 Earnings per share before and after dilution 48.10 21.70 Proposed dividend per share 11.00 7.03 Kungsleden 39 Annual Report 2005 Balance sheet

Group Parent company SEK m Note 31 Dec 2005 31 Dec 2004 31 Dec 2005 31 Dec 2004

¢ ASSETS

¢ Properties Investment properties 13 24,856.2 13,437.7 Real estate used in business operations 14 15.5 14.5 Construction in progress 15 28.7 Properties held for sale 2 850.0

25,750.4 13,452.2

¢ Receivables, etc. Equipment, ﬁxtures and ﬁttings 16 13.3 6.0 Shares in group companies 17 5,256.8 1,234.5 Deferred tax assets 12 405.1 346.5 531.5 108.2 Other long-term receivables 11.7 40.0 18.0 Other assets held for sale 2 24.8 Accounts receivable 74.8 11.3 Receivables, group companies 515.7 1,630.7 Other receivables 21 969.5 551.4 1.0 Pre-paid costs and accrued income 56.3 39.0 7.1

1,555.5 994.2 6,312.1 2 991.4

¢ Liquid assets Cash and bank balances 163.8 67.3 76.5 20.8

TOTAL ASSETS 27,469.7 14,513.7 6,388.6 3,012.2

¢ LIABILITIES AND SHAREHOLDERS’ EQUITY

¢ Shareholders’ equity 22 Share capital 56.9 47.4 56.9 47.4 Other reserves 2,070.3 1,087.3 2,063.6 1,086.1 Accumulated proﬁt or loss 4,522.1 2,819.7 3,453.7 1,557.5

Total shareholders’ equity 6,649.3 3,954.4 5,574.2 2,691.0

¢ Interest-bearing liabilities 23 Liabilities to credit institutions 17,424.9 9,531.5 800.0 Liabilities attributable to assets held for sale 2 578.7 Bonds 300.0 300.0

18,003.6 9,831.5 800.0 300.0

¢ Operating liabilities Liabilities attributable to assets held for sale 2 43.4 Accounts payable 181.4 102.1 0.9 0.4 Tax liabilities 61.8 11.0 Other liabilities 2,140.2 411.7 2.0 Accrued costs and deferred income 390.0 203.0 13.5 18.8

2,816.8 727.8 14.4 21.2

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 27,469.7 14,513.7 6,388.6 3,012.2

ASSETS PLEDGED AND CONTINGENT LIABILITIES Assets pledged 25 19,619.9 9,570.8 2,695.0 856.0 Contingent liabilities 26 6,005.1 6,130.9 5,917.9 6,017.3 40 Kungsleden Annual Report 2005 xxxxStatement of changes in shareholders’ equity

Total Trans- Accumu- share- Share Other lation lated proﬁt holders’ Group capital reserves reserve or loss equity

¢ Shareholders’ equity, opening balance 1 Jan. ’04 47.4 1,087.2 2,189.5 3,324.1 Adjustments within shareholders’ equity 0.1 – 0.1 –

Total changes in net worth accounted directly to shareholders’ equity 47.4 1,087.3 2,189.4 3,324.1 Net proﬁt 876.8 876.8

Total changes in net worth exc. transactions with shareholders 47.4 1,087.3 3,066.2 4,200.9 Dividends – 246.5 –246.5

Shareholders’ equity, closing balance 31 Dec. ’04 47.4 1,087.3 2,819.7 3,954.4 Translation differences in the year 5.4 5.4 Adjustments within shareholders’ equity 0.1 –0.1

Total changes in net worth accounted directly to shareholders’ equity 47.4 1,087.4 5.4 2,819.7 3,959.8 Net proﬁt 1,986.8 1,986.8

Total changes in net worth exc. transactions with shareholders 47.4 1,087.4 5.4 4,806.5 5,946.7 Dividends –284.4 –284.4 New share issue 9.5 977.5 987.0

¢ Shareholders’ equity, closing balance, 31 Dec. ’05 56.9 2,064.9 5.4 4,522.1 6,649.3

Total Accumu- share- Share Statutory lated proﬁt holders’ Parent company capital reserve or loss equity

¢ Shareholders’ equity, opening balance 1 Jan. ’04 47.4 1,086.1 1,173.1 2,306.6 Group contribution 133.3 133.3 Tax effect of group contribution –37.3 –37.3

Total changes in net worth accounted directly to shareholders’ equity 47.4 1,086.1 1,269.0 2,402.6 Net proﬁt 534.9 534.9 Total changes in net worth exc. transactions with shareholders 47.4 1,086.1 1,804.0 2,937.5 Dividends –246.5 –246.5 New share issue

Shareholders’ equity, closing balance 31 Dec.’04 47.4 1,086.1 1,557.5 2,691.0 Group contribution –2,047.9 –2,047.9 Tax effect of group contribution 573.4 573.4

Total changes in net worth accounted directly to shareholders’ equity 47.4 1 086.1 83.0 1 216.5 Net proﬁt 3 655.1 3 655.1

Total changes in net worth exc. transactions with shareholders 47.4 1,086.1 3,738.1 4,871.6

Dividends –284.4 –284.4 New share issue 9.5 977.5 987.0

¢ Shareholders’ equity, closing balance

31 Dec.’05 56.9 2,063.6 3,453.7 5,574.2 Kungsleden 41 Annual Report 2005 Cash Flow Statement

Group Parent Company

SEK m Note 27 2005 2004 2005 2004

¢ Operations Proﬁt before tax 2,115.9 499.5 3,231.8 517.7 Realised value changes 85.3 117.2 Unrealised value changes –1,190.9 –10.4 Adjustments for items not included in cash ﬂow, etc. 2.1 3.3 Tax paid –11.3 –23.0

Cash ﬂow from operating activities 1,001.1 586.7 3,231.8 517.7

¢ Change in working capital Increase (–)/decrease (+) in operating receivables 62.2 –109.7 –2,849.5 6.3 Increase (+)/decrease (–) in operating liabilities 137.4 23.1 –6.2 –87.0 199.6 –86.6 –2,855.7 –80.7

Cash ﬂow from operating activities after change in working capital 1,200.7 500.1 376.1 437.0

¢ Investment activity Aqusition of property –8,390.6 –2,681.9 Disposals of property (acquisition value) 2,513.9 2,519.9 Acquisition of subsidiaries—net liquidity impact –1,412.4 –1,541.0 Investments in machinery/equipment –8.4 –2.8 Disposals of machinery/equipment 1.0 1.0 Long-term loans issued –6.6 –18.2 1,102.7 Repayment of long-term loans issued 42.2 18.0

Cash ﬂow from investment activity –7,260.9 –182.0 –1,523.0 1,102.7

¢ Financing activity Loans drawn down 7,314.6 5,921.7 800.0 Loans amortised –1,860.5 –5,929.8 –300.0 –1,272.4 New share issue 987.0 987.0 Dividends –284.4 –246.5 –284.4 –246.5

Cash ﬂow from ﬁnancing activity 6,156.7 –254.6 1,202.6 –1,518.9

¢ Cash ﬂow for the period 96.5 63.5 55.7 20.8 Liquid assets, opening balance 67.3 3.8 20.8 0.0

Liquid assets, closing balance 163.8 67.3 76.5 20.8

42 Kungsleden Annual Report 2005 Parent company, ÅRL

Income Statement

SEK m Note 2005 2004

Administration costs 6–9 –8.7 –8.5

Operating proﬁt –8.7 –8.5

Profit from financial items Profit from shares in group companies 10 3,271.0 579.1 Financial revenue 11 310.4 182.0 Financial costs 11 –340.9 –234.9 3,240.5 526.2 Profit before tax 3,231.8 517.7

Tax Deferred tax 12 423.3 17.2 Net proﬁt 3,655.1 534.9

Balance Sheet

SEK m Note 2005-12-31 2004-12-31 ASSETS Fixed assets Financial ﬁxed assets Shares in group companies 17 5,256.8 1,234.5 Deferred tax assets 12 531.5 108.2 Other long-term receivables – 18.0 Total ﬁxed assets 5,788.3 1,360.7

Current assets Receivables, group companies 515.7 1,630.7 Other receivables 1.0 Pre-paid costs and accrued income 7.1 523.8 1,630 .7 Liquid assets Cash and bank balances 76.5 20.8 Total current assets 600.3 1,651.5 TOTAL ASSETS 6,388.6 3,012.2

LIABILITIES AND SHAREHOLDERS’ EQUITY Shareholders’ equity Restricted equity 22 Share capital 56.9 47.4 Restricted/Statutory reserves 2,063.6 1,086.1 2,120.5 1,133.5 Non-restricted equity Accumulated proﬁt or loss –201.4 1,022.6 Net proﬁt 3,655.1 534.9 3,453.7 1,557.5 Total shareholders’ equity 5,574.2 2,691.0

Current liabilities Loans 800.0 300.0 Accounts payable 0.9 0.4 Other liabilities 2.0 Accrued costs and deferred income 13.5 18.8 814.4 321.2 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 6,388.6 3,012.2

ASSETS PLEDGED AND CONTINGENT LIABILITIES Assets pledged 25 2,695.0 856.0 Contingent liabilities 26 5,917.9 6,017.3 Kungsleden 43 Annual Report 2005 Note disclosures

Note 1 Accounting principles The primary changes coincident with the adoption of IFRS were: • Reclassifying properties pursuant to IAS 40 to investment properties, and General accounting principles valuing them at fair value. The group adopted IFRS (International Financial Reporting Standards) • Accounting financial instruments at fair value pursuant to IAS 39. issued by the IASB (International Accounting Standards Board) from 1 • Accounting the effects of deferred tax on the basis of the above changes. January 2005 onwards, as well as statements from IFRIC (the International Financial Reporting Interpretations Committee) endorsed by the EU Overall, it is apparent that cash flows from management are not affected by Commission for adoption in the EU. This financial report is the first complete the new standards, while accounted profits including value changes will vary. financial report prepared pursuant to IFRS. Coincident with the transfer from The introduction of the new standard has exerted a significant effect on previous standards to IFRS accounting, the group observed IFRS 1 on first- the Income Statement and Balance Sheet. To attain comparability for the time adoption of IFRS. Additionally, RR’s (Redovisningsrådet, the Swedish group’s progress and position, comparative years have been recalculated. Financial Accounting Standards Council) recommendation RR 30, In the first quarter 2005, the introduction of IFRS also resulted in a review of Supplementary Accounting Rules for Groups has been observed. This the definitions on page 55, and amendment of the group’s policy governing standard came into force on 1 January 2005. risk limits and objectives. The effects of the recalculation of the group’s For the parent company, accounting has been prepared pursuant to the financial profits and position, the accounted cash flow-related profit, and on Swedish Annual Accounts Act, and RR’s new recommendation RR 32 the opening and closing balances of shareholders’ equity in 2004, are ‘Accounting for Legal Entities’. The accounting principles of the parent summarized below: company are unchanged compared to the previous year, unless otherwise stated below. For better compatibility between the group and parent Income Share- company, the parent company’s Income Statement and Balance Sheet has State- holders’ the same structure as the consolidated versions. The parent company’s SEK m ment equity Income Statement and Balance Sheet Pursuant to the structure stipulated Opening balance, Swedish GAAP, 1 Jan. ’04 2,827.9 by the Swedish Annual Accounts Act are presented on page 42. Investment properties, accounting at fair value 954.5 Financial instruments, accounting at fair value –265.3 Conditions for Preparing Financial Reports Deferred tax, accounting at nominal value –193.0 The parent company’s functional currency is the Swedish krona, which is Opening balance, IFRS, 1 Jan 2004 3,324.1 also the reporting currency for the parent company and group. Unless otherwise stated, all amounts in the note disclosures are rounded to the Profit after tax 2004 928.3 nearest thousand Swedish kronor (SEK 000), and otherwise in SEK m. Assets and liabilities are accounted at historical acquisition values, apart Adjustments pursuant to IFRS from investment properties and financial instruments, which are valued at Investment properties, fair value –117.2 fair value. Changes to estimated fair values are processed through the of divested properties Income Statement. Investment properties, unrealized value changes 152.0 Preparing financial reports pursuant to IFRS necessitates the corporate Financial instruments, unrealized value changes –106.3 management making evaluations, estimates and assumptions that influence Deferred tax 20.0 the application of accounting principles, and the book values of assets, liabilities, revenues and costs. These estimates and assumptions are based Adjusted profits pursuant to IFRS accounting excl. on historical experience and a number of other factors that appear transfer of hedging provision, 31 Dec 2004 876.8 876.8 reasonable in the prevailing circumstances. The result of these estimates Dividends –246.5 and assumptions are then utilized to evaluate book values of assets and Closing balance, IFRS, 31 Dec 2004 3,954.4 liabilities, that otherwise, are not clearly stated from other sources. Actual Closing balance, Swedish GAAP, 31 Dec 2004 3,509.7 figures may vary from these estimates and evaluations. Changes in 2005 Kungsleden reviews its estimates and assumptions regularly. Revisions The EU Commission approved all financial instruments in a group being to estimates are stated in the period the amendment is made if such valued at fair value pursuant to IAS 39 in November 2005. Kungsleden has amendment only influences that period, or the period the revision is effected chosen to adopt market valuations for all financial instruments. Previously and future periods if the revision affects the current period and future reported figures have been recalculated. The effects on previously published periods. reports are apparent in the following tables. These periods are 12 months The management’s evaluations coincident with the adoption of IFRS that for 2004 and three months for each quarter of 2005 and are a comparison exert a significant influence on financial reports and conducted estimates with previously published figures. are reviewed in more detail in Note 28. The accounting principles stated below for the group have been applied Income Statement - previous/new principles 2004/2005 consistently for all periods presented in the consolidated financial statements, unless otherwise stated below. The group’s accounting SEK m 2004-12 Q1 Q2 Q3 principles have been applied consistently in reporting and consolidating Profit, previous subsidiaries, associated companies and joint ventures. principles 882.2 114.4 649.8 255.7 The Annual Report and consolidated financial statements were adopted Value changes, financial for publication by the Board of Directors on 3 March 2006. The Consolidat- –7.5 6.0 –21.2 26.3 ed Income Statement and Balance Sheet and the parent company Income instruments Statement and Balance Sheet will be subject to adoption at the Annual Deferred tax on change 2.1 –1.7 5.9 –7.4 General Meeting on 6 April 2006. Profit, new principles 876.8 118.7 634.5 274.6 Average number Revised accounting principles and other changes of shares 40,430,117 40,430,117 40,430,117 40,430,117 IFRS 1 ‘First-time Adoption of IFRS’ was observed when preparing the Earnings per share, Consolidated Financial Statements in the previous year, and modifications previous principles 21.80 2.80 16.10 6.30 were previously effected by observing RR’s recommendations. All the Earnings per share, new principles 21.70 2.90 15.70 6.80 comparative figures (including financial instruments) were recalculated from 1 January 2004 onwards. The First-quarter Interim Report 2005 was Kungsleden’s first financial report published pursuant to IFRS. 44 Kungsleden Annual Report 2005 Note disclosures

Segments Joint ventures Kungsleden applies IAS 14 Segment Reporting. Kungsleden’s business Joint ventures means companies over which the parent company exerts a comprises the portfolio management of a single asset class on a single controlling influence alongside another party. Holdings in joint ventures are market—properties, and accordingly, dividing the results-based accounting accounted using proportional consolidation (the proportional method). In information in income statements and balance sheets is not considered the consolidated accounts, Kungsleden’s participation in joint ventures’ beneficial or helpful to the recipients of Kungsleden’s financial reports. For assets, liabilities, revenues and costs are accounted line by line along-side these parties to be able to evaluate the risks and opportunities applicable to the corresponding items in the consolidated accounts. Kungsleden, earnings capacity is disclosed in each financial report instead, which is based on more relevant information. Please refer to pages 18–24. Conversions of foreign operations The justification for accounting a single segment is provided below. The accounts of each of the foreign subsidiaries—and associated companies—are prepared in the local currency where operations are Business—risks and opportunities conducted. The consolidated financial statements are presented in Swedish Kungsleden’s business model is oriented on changing the composition of its kronor. The income statements and balance sheets of foreign operations portfolio pursuant to identified tendencies on the property market. The are converted to SEK using the current method, implying that balance objective is to increase the portfolio’s risk-adjusted returns. The core sheets are converted at the exchange rate on the balance sheet, apart from business revolves around the risk and opportunities of value changes on shareholders’ equity which is converted at historical exchange rates. properties, both those owned and other properties. Balancing and Income statements are converted at average exchange rates of the period. optimizing total risk levels by diversifying the portfolio over the dimensions of The exchange rate differences arising are accounted directly against type, tenant and category are key elements. Another consideration is shareholders’ equity as a translation difference. Conversions were at SEK achieving management of portfolio properties that is efficient, and in 9.48 and SEK 9.43 for the EUR in the Income Statement and Balance Sheet financial terms, means that property yields and values can be maximized. respectively.

Organisational resources—controlling and reporting Transactions with related parties Kungsleden’s organizational resources are designed to conduct its business Business terms, and market prices, apply when supplying services between model with the highest possible efficiency. Basically, this structure conforms group companies. No transactions with closely related parties were to a geographical division, explained by practical difficulties in monitoring conducted to or from the parent company apart from interest payments. the property market and conducting management in any other manner than Otherwise, no transactions were conducted with any Board member or on the market where business is conducted. However, a portion of senior executives. organizational resources are dedicated to the retirement home, care and school property types, because of special operational and tenant Foreign currency transactions circumstances. Foreign currency transactions are converted at the exchange rate at the Reporting is primarily structured to provide decision-makers with time of the transactions. Foreign currency-denominated monetary assets information on how risk-adjusted returns are progressing in the portfolio and and liabilities are converted at the exchange rate on the balance sheet date, its constituents. Secondly, reporting offers an impression of the progress of whereupon exchange rate differences are accounted as income. The parts of the organization. Decision-making is heavily concentrated on the exchange rate differences on trading receivables and liabilities are Chief Executive and management, which has proved to be a prerequisite for accounted in operating profit, while exchange rate differences attributable Kungsleden conducting its business model fully. to financial assets and liabilities are accounted in the net financial position.

Consolidated financial statements Acquisitions and disposals The consolidated financial statements encompass the parent company, Acquisitions or disposals are accounted from the day it is considered likely subsidiaries, associated companies and joint ventures. Subsidiaries are that the essential financial rights and risks associated with the transaction companies over which the parent company exerts a controlling influence. are credited/charged to or leave the group, which almost exclusively, is on The consolidated financial statements have been prepared pursuant to the contract date. Receivables and liabilities vis à vis counterparties acquisition accounting, implying that assets and liabilities are valued at fair between the transaction date and settlement date are accounted in gross value at the time of acquisition, pursuant to the acquisition analysis terms under other receivables and other liabilities respectively. prepared. Acquired companies’ revenues and costs are consolidated from the time of acquisition onwards, implying that the company starts Acquisitions of assets contributing to consolidated assets after its acquisition. Divested In recent years, indirect property transactions using companies incorporat- companies’ income statements are incorporated until the date when the ing the properties, have become more common, unlike previously, when controlling influence ceases. transactions were direct. Asset acquisitions using corporate transactions Intra-group receivables and liabilities, revenues or costs and unrealized are accounted as if the relevant property/properties had been acquired profits or losses arising from intra-group transactions are eliminated in their directly. This type of acquiring enterprise normally has no employees or entirety when the consolidated financial statements are prepared. organizational resources, or other operations than those directly attributable to the property holding. The acquisition value corresponds to the fair value Associated companies of assets and potentially related borrowings. Deferred tax is not accounted Associated companies are those companies where the group exerts a on potential surplus values attributable to the acquisition. significant, but not controlling, influence, over operational and financial controls, usually through holdings of between 20 and 50 per cent of the Business combinations vote. Participations in associated companies are accounted pursuant to the Acquisition accounting is adopted pursuant to IFRS 3 Business Combina- equity method in the consolidated financial statements from the time when tions coincident with acquisitions where Kungsleden gains a controlling a significant influence was attained. The consolidated financial statements influence over one or more basically autonomous operations. The acquired account the consolidated share of associated companies’ net profits after entity’s identifiable assets, liabilities and contingent liabilities are accounted tax and minority holdings adjusted for potential depreciation and amort- at fair value at the time of acquisition, and the profits attributable to the ization, write-downs or dissolution of acquired surplus and deficit values. acquired operations are consolidated from the day of taking possession inclusive. Deferred tax is accounted on potential surplus values attributable to the acquisition. One business combination occurred in 2005, reviewed in more detail in Note 3. Kungsleden 45 Annual Report 2005

Asset/liabilities held for sale Income tax Divestment groups comprising recently acquired subsidiaries/assets intended The Income Statement accounts current and deferred income tax on for divestment within one year are accounted under the title “assets held for Swedish and foreign group entities apart from when the underlying sale”. All receivables and liabilities attributable to the assets or asset group transaction is accounted directly against shareholders’ equity, whereupon are accounted separately in the Balance Sheet. The divestment group is the associated tax effect is accounted in shareholders’ equity. Group accounted at the lower of book value and fair value less deductions for companies are liable for tax pursuant to current legislation in each country. selling expenses. However, investment properties held by the investment Over the last five years, the tax rate in Sweden has been 28 per cent, groups are always valued at fair value. calculated on nominal accounted profits plus non-deductible items, and deducting non-taxable revenues. Income tax is accounted pursuant to the Structure of the Income Statement balance sheet method, implying that deferred tax is calculated on the The Income Statement has been structured with the ambition of providing a temporary differences between taxable and book values of assets or representative impression of operations preceding from revenues and liabilities identified on the balance sheet date. Temporary differences arise in costs, and thus providing most accurate impression of cash flows from properties, shares in subsidiaries, income tax (loss carry-forwards) and operating activities as possible. The Income Statement indicates the interest-bearing liabilities. Temporary differences are valued at nominal tax dimensions of operations, and provides a representative impression of cash rates, and the change from the previous year’s balance sheet date is flows from operating activities. Thus, the Income Statement is closely accounted as deferred tax in the Income Statement. Deferred tax assets on associated to Kungsleden’s business concept, vision and strategy. deductible temporary differences and loss carry-forwards are only The various dimensions of operations are clarified through separate accounted to the extent that it is highly that they will be utilized. The value of accounting of operating net, trading net, administration costs, net financial deferred tax assets is reduced when it is no longer considered likely that position and unrealized value changes. The internal order is determined by they can be utilized. the structure of operations. Profit before tax adjusted for items not affecting cash flow, mainly realized Employee benefits and unrealized value changes, basically corresponds to operating cash flow. Employee benefits such as salary and social security costs, holidays and Unrealised value changes comprise value changes on investment paid sickness absence etc. are accounted as staff conduct employment. properties and financial instruments remaining in operations as of the Kungsleden has adopted IAS 19 Employee Benefits as well as other balance sheet date. We consider that value changes correlate negatively disclosures stipulated by the Swedish Annual Accounts Act. Commitments with, and are primarily explained by, the progress of interest rates. Property relating to senior executives are underwritten through defined-contribution market pricing is normally dependent on interest rates, and with the pension schemes. Commitments for other executives are underwritten by selected interest fixing strategy, the market value of interest-bearing insurance through Alecta. Pursuant to statements from RR’s emerging liabilities are dependent on interest rates. The unrealized value changes are issues task force, pension schemes are accounted pursuant to ITP not associated with cash flows. Kungsleden optimizes operations towards (supplementary pensions for salaried employees), insured through Alecta, the combination of high cash flows and low operating risk, and as a as a defined-contribution scheme, while basic structure of the ITP scheme consequence, it is reasonable to present the dimension of unrealized value remains unchanged. changes on an aggregate basis and at a lower level of the Income Statement. Some commentators assume that the term ‘realised’ is used to Leasing imply higher quality due to value changes after a transaction than an Kungsleden is party to a number of smaller-scale leasing contracts on assumes/unrealised value change. In fact, this is obvious. Participants on office machines. The aggregate total of these contracts is not significant. the property market know that valuations are associated with an uncertainty Proceeding from the financial risk remaining with the lessor, all rental, interval, which pursuant to IAS 40, causes an unrealized value change in the ground rent and leasing contracts have been accounted as operating accounts. leasing contracts. Costs are written off as they arise Realised value changes demonstrate that unlike unrealized value At year-end, Kungsleden had one property leased through a finance changes, a transaction has occurred and a cash flow has arisen. leasing agreement. This property is accounted as an investment property Accounting within the property trading dimension has been designed to on the assets side and a loan on the liabilities side. illustrate how much of the book value of divested properties has arisen Rental revenues are classified as operating leasing contracts, please through cash flows, termed acquisition value, and how much has arisen refer to the ‘Revenues’ heading. through value changes, termed realize value changes. Classification, etc. Revenues Kungsleden’s operations comprise a high number of rental properties rented Rental contracts are classified as operating leasing agreements, proceeding to external tenants. Normally, rental contracts are initially established for a from the assumption that the related property remains in Kungsleden’s term of three years. However, this rental period varies, and can run for up to ownership even if the contract runs for up to 20 years. Rental revenues are 20 years. Tenant renegotiations are conducted before the end of the contract divided over time pursuant to the content of contracts, with consequences term, proceeding from the rental level and other terms of the contract, unless including rental discounts accounted in the period to which they apply. the contract has terminated. However, after the initial contract, specifying the For property trading, as for property and corporate divestments, contract durations is problematic, and at any time, there is a considerable divestments imply the transaction being accounted, and the revenue number of parallel contracts with varying terms, making Kungsleden’s recognized, when it is likely that the group will receive the related financial business cycle hard to specify. It is also difficult to define how long a property benefits, which most often, is on the contract date. is expected to be held. With these considerations, assets and liabilities in the Balance Sheet are presented in declining order of liquidity, because this Net financial position offers information that is reliable and relevant to operations. The revenue from rental revenues and rent subsidies is recognized in the period to which it relates. Interest and other financial expenditure coincident Properties with property construction is capitalized in the construction period, while that Properties are accounted in subsidiaries at acquisition values, with the associated with extension and conversion is written off on an ongoing basis, capitalization of expenditure effected when the related actions result in because generally, the construction period is shorter. Derivative instruments future financial benefits. Then, market valuations are affected in the group, are utilised to achieve the desired interest fixings. Revenues and costs pursuant to the methods stated below. Other additional expenses are associated with such instruments are accounted on an ongoing basis, with accounted as a cost in the period in which they arise. the revenues and costs for redemption and renegotiation of derivatives, as well as prepayment penalty interest, accounted as they arise. Costs associated with funding facilities are allocated during the term of the facility. 46 Kungsleden Annual Report 2005 Note disclosures

Investment properties regarded as quality control of the internal valuations that apply for specifying Buildings and land owned or leased through finance leasing contracts with fair values of the group’s property. Experience indicates that the prices the intention of generating rental revenues and/or value growth are classified attained are above internal and external valuations. as investment properties in the group. IAS 40 is observed, with these holdings valued at fair value. During the year, revaluations are affected Financial instruments coincident with quarterly reports when internal valuations indicate significant Financial instruments are valued and accounted in the group pursuant to value changes. For considerations regarding surplus values etc. on property the stipulations of IAS 39, implying that they are initially accounted at valuations, please refer to the property valuation heading below and Note 28. acquisition value, corresponding to the fair value of instruments, plus transaction costs for all financial instruments apart from those accounted at Real estate used in business operations fair value via the Income Statement. A statement of how they are classified Those properties where a not-insignificant portion of floor-space is used for is conducted subsequently. supplying services or administrative purposes within the group are classified The fair value of listed financial assets is offset by the asset’s quoted bid as real estate used in business operations. The accounting is pursuant to price at the balance sheet date. The fair value of unlisted financial assets is IAS 16 Tangible Assets. Real estate used in business operations is determined by comparisons with similar instruments or discounted cash accounted at acquisition value less depreciation according to plan over its flows. economic life. The depreciation periods are between 100 and 10 years Long-term receivables, which exclusively comprise promissory notes depending on the relevant component of the property. At year-end, only two issued by the seller to the buyer, have been valued at accrued acquisition properties were considered to be classifiable as real estate used in business value. Current receivables are accounted at the amount at which they are operations for the Kungsleden group. Because the assessed influence on expected to arise, subsequent to a case-by-case assessment. consolidated profits is considered insignificant, and accordingly, would not Accounts receivable are accounted at the amount expected to arise less provide any additional information for readers of this Annual Report, no doubtful debt, which is evaluated on a case-by-case basis. depreciation for this period has been accounted for the group. The Liquid assets encompass cash and immediately accessible postal giro estimated depreciation amounts to approximately SEK 150,000. and bank balances. Initially, liabilities are accounted at the amount received less deductions Construction in progress for transaction costs. After the time of acquisition, loans are valued at Buildings under construction for future use as investment properties or real accrued acquisition value pursuant to the effective interest method. estate used in business operations are accounted at the costs disbursed Accounts payable are valued at nominal amount without discounting. until the relevant work concludes. IAS 16 is observed until the property is The debt portfolio constitutes a considerable portion of the passive side completed, and then transfers to investment property/real estate used in of the balance sheet, and given the selected interest fixing strategy, value business operations. No depreciation is effected until the building is complete. changes on interest-bearing liabilities are assumed to correlate with value changes in the property portfolio. No hedge accounting is applied, and Equipment, fixtures and fittings accordingly, derivatives are valued and accounted at actual value in the Equipment, fixtures and fittings have been accounted at acquisition value Balance Sheet, and unrealised value changes are accounted in the Income less accumulated depreciation according to plan and any potential write- Statement. downs. IAS 16 is observed. Equipment is depreciated linearly according to plan over five years. Write-downs The book values of the group’s assets are subjected to impairment tests at Property valuations each balance sheet date. Exceptions apply to assets for sale, investment The fair value of investment properties is based on 100 per cent of internal properties and deferred tax assets. If an indication of a need for write- valuations. Kungsleden conducts valuations on an ongoing basis as an downs arises, the asset’s recoverable value is calculated. Impairment tests integrated part of its business process. Every property always has a are conducted on the aforementioned exceptional assets pursuant to the business plan, updated at least once annually, comprising an internal relevant standard. valuation, the most recent external valuation, an action-plan for the Write-downs are only reversed to the extent that asset book values after measures considered to optimize its operating net and value and a reversal do not exceed the book value the asset would have had if no write- statement of standpoint regarding the property’s value. A present value down had occurred. calculation of the property’s future operating net serves as the foundation for evaluations of property values. Contingent liabilities A contingent liability is accounted when there is a possible commitment The valuation is founded on the following assumptions and conditions: attributable to events that have occurred, and whose occurrence is only • Consideration of property type, geographical location and contract term; corroborated by one or more uncertain future events, or when there is a • Interest rates vary between 6.5 and 16 per cent; commitment that is not accounted as a liability or provision because it is • Required property yield of between 5 and 14 per cent; not likely that any outflow of resources would be required. • Normal long-term vacancy between 5 and 10 per cent. • Operating and maintenance costs are calculated on the basis of actual Note 2 Assets held for sale figures for the relevant property and experience of comparable properties. The valuation model includes the cost of ground rent; annual inflation is Kungsleden took possession of a number of subsidiaries and associated assumed at 1.5 per cent throughout the calculation term. companies in Belgium and the Netherlands, with associated properties, in December. This foreign holding is intended for divestment in the forthcom- Kungsleden considers that from ethical considerations, its observers ing year. A future divestment is not expected to generate a profit or loss in requires external verification of its internal valuations. Accordingly, a terms of fair valuations, less selling expenses. The properties and representative selection of properties in terms of type and geography, associated balance sheet items have been accounted separately as assets amounting to some 70 per cent of property values, undergo comprehensive and liabilities held for sale in the Balance Sheet. external valuations, including property inspections, every 3 years. However, comprehensive external valuations are also conducted on new properties and properties with special considerations. The external valuation is Kungsleden 47 Annual Report 2005

Note 3 Business combinations technology and costs associated with stock market listing. Also includes property administration such as costs for ongoing property management On 10 October 2005, the group acquired a substantial property holding including costs for rental billing, rent negotiations, rent demands and with associated operations, and took possession on 1 December 2005, statements. Administration costs include depreciation of equipment. encompassing 183 properties from Weland Fastigheter and Fogelviks Holding. This corporation, including subsidiaries, is a property company, Note 7 Employees and personnel costs with the majority of its operations in Greater Stockholm, Lund, Norrköping, Karlstad, Gävle and Sundsvall. In the month after the acquisition, the Average number of Proportion Proportion subsidiary contributed SEK 326 m to consolidated proﬁt after tax in 2005 employees 2005 women % 2004 women % including value changes. If the acquisition had been consummated as of 1 Parent company – – – – January 2005, the contributions to consolidated revenues and net proﬁt Subsidiaries would have been approximately SEK 700 m and SEK 405 m respectively. Sweden 99 38 75 45 More information will be found in Note 27. Belgium 1 – – – Group 100 38 75 45

Note 4 Operating leasing—ground rent Gender distribution, Proportion Proportion Group corporate management 2005 women % 2004 women % Operating leasing 2005 Parent company and Group Due for payment within one year 13,501 The Board 17 17 Due for payment in 2–5 years 52,004 Other senior executives 14 0 Due for payment after more than 5 years 371,380 Total 436,885 The Board of Directors has six members of which one woman. There are seven other senior executives, one of which is a woman. Operating leasing when the company is lessee. The average rental term is 27 years. Payments are written off linearly during the leasing term. 2005 2004 Kungsleden is also party to a number of smaller-scale leasing contracts Salary Salary on office machinery, whose total amount is insignificant. Salary, other remunera- and Social and Social tion and social security remune- security remu- security costs ration costs neration costs Note 5 Operating leasing—revenues Group Group The Board, Chief Executive Rental revenues 2005 and Deputy Chief Executive 12,136 5,395 8,838 4,292 Due for payment within one year 2,660,653 (of which pension costs) (1,456) (1,402) Due for payment in 2–5 years 5,451,806 Other employees 41,709 20,071 35,567 16,304 Due for payment after more than 5 years 3,139,492 (of which pension costs) (5,981) (4,674) Total 53,845 25,466 44,405 20,596 Total 11,251,951 (7,115) (6,076) From an accounting perspective, the Kungsleden group’s rental contracts Parent company can be considered as operating leasing contracts. The above table The Board 1,030 334 870 284 illustrates rental revenues calculated on current contracts, which of which (of which pension costs) (–) (–) there were 15,766 as of 31 December 2005. A high proportion of The above amounts include salary and social security contributions of 53 commercial contracts mature within five years, while nearly half of retirement and 14 respectively paid in Belgium, converted to Swedish kronor. home contract values mature in 2015 or later. Normally, housing rental contracts run until further notice, with the tenant possessing the option to Sickness absence, % 2005 2004 terminate the contract subject to three-month notice. Rental agreements on Total sickness absence as a percentage of ordinary premises are entered for 3–20 years, with generally, rents being indexed. In 1 2 working-hours most cases, supplements for heating and property tax are added to rents, Proportion of total sickness absence for contiguous based on the actual costs the landlord incurs. periods of 60 days or more 30 10 The rental revenues stated above offer an impression of the contract Sickness absence as a percentage of each group’s regular working-hours: situation at year-end. Because of the high transaction tempo of acquisitions Sickness absence by gender and disposals, the conditions governing future rental revenues change Men 1 1 constantly, which should be noted when evaluating the above table. Women 4 5 Sickness absence by age Note 6 Administration costs Up to 29 1 1 30–49 2 3 Group Parent company 50 or older 1 1 Administration costs 2005 2004 2005 2004 Personnel costs –82,960 –70,315 –1,372 –1,324 The majority of Kungsleden’s staff are employed by the subsidiary Depreciation and amortization –2,590 –2,193 Kungsleden Fastighets AB. The employment terms of staff included in the Other operating costs –65,932 –66,433 –7,254 –7,175 business combination (see Note 3) will transfer to Kungsleden Fastighets AB Total –151,482 –138,941 –8,626 –8,499 in the forthcoming year. Primarily includes costs for the group’s management and central functions such as accounting, finance, legal services, research and information 48 Kungsleden Annual Report 2005 Note disclosures

Note 8 Remuneration to senior executives Redundancy pay is not offset against other income. No redundancy pay is due upon termination initiated by these senior executives. The terms Principles applying to the other two senior executives are regulated by collective Remuneration is payable to the Board, pursuant to AGM decision. No fees agreement. are payable to Board members employed by the company. Remuneration to the Chief Executive and other senior executives comprises basic salary, Consideration and decision processes performance-related pay, other benefits and pension. The term ‘other senior Remuneration to the management is resolved by the Board subject to the executives’ means the six people that were active in the corporate Remuneration Committee’s proposal. management in 2005 in addition to the Chief Executive. Performance- related pay is intended to comprise a significant portion of possible Note 9 Audit fees and remuneration remuneration, subject to a maximum of 12 months’ salary. The perfor- Group Parent company mance-related portion is based on actual performance in relation to 2005 2004 2005 2004 individual targets. KPMG Auditing assignments 1,850 2,000 500 500 Remuneration and other benefits for 2005 Other assignments 750 600 0 0 Total 2,600 2,600 500 500 Basic Perfor- salary/ mance- Directors’ related Other Pension Auditing assignments means reviewing the Annual Report and accounts, fees pay benefits costs Total the Board of directors’ and Chief Executive’s administration, other tasks Chairman 360 – – – 360 appropriate to the company’s auditors and advisory or other services Chief Executive 2 408 2 640 145 747 5 940 resulting from observations on such review or conducting under such tasks. Other senior Anything else is classified as other assignments. executives 5 462 5 689 279 1 253 13 353 Total 8 230 8 329 424 2 000 19 653 Note 10 Profit from shares in group companies Comments on the table: Parent company • Performance-related pay is bonuses for 2005, of which 8,329 (6,694) has 2005 2004 been posted to 2005; Dividend 3,268,957 1,020,000 • Other benefits comprise company car and subsistence allowance; Profit from divestment of shares 210,135 – Write-downs –208,067 –440,935 • Senior executives’ pension schemes are defined contribution. Pension Total 3,271,025 579,065 costs are the costs burdening 2005. For more information on pensions, see below. Note 11 Net financial position Group Performance-related pay Interest income, etc. 2005 2004 For the Chief Executive and Deputy Chief Executive, the bonus in 2005 Dividends 115 – reflects profit for calculating dividends, profit froth property divestments and Interest income 2,245 5,552 growth objectives. The bonus for 2005 was equivalent to 100 per cent of Other 1,513 2,584 basic salary. Total financial income 3,873 8,136 The four other senior executives’ bonuses for 2005 were based on the Group same principles as the Chief Executive and Deputy Chief Executive and on Interest costs, etc. 2005 2004 individual profit objectives for each individual business area. The bonus for Interest costs –526,878 –445,057 these executives in 2005 averaged 100 (83) per cent, of basic salary. Other –22,595 –18,995 Total financial costs –549,473 –464,052 Pensions The pensionable age of all senior executives is 65, apart from the Chief Executive, whose pensionable age is 60. All senior executives have defined- Parent company contribution pension schemes, with no commitments for the company Interest income, etc. 2005 2004 apart from the obligation to pay annual premiums.The Chief Executive’s Interest income pension premium may amount to the tax-deductible maximum for the group companies 307,745 178,603 company and is based on a main rule of premiums of the lower of 35 per other 1,339 1,063 cent of pensionable salary and 10 basic amounts and the supplementary Other 1,261 2,353 rule implying that the Chief Executive receives a pension of 30 per cent of Total 310,345 182,019 salary between the ages of 60 and 65. The pension premium for one of the Parent company two Deputy Chief Executives is also based on the main rule. Pension Interest income, etc. 2005 2004 premiums of other senior executives are based on the ITP (supplementary Interest costs pensions for salaried employees) scheme. The ITP scheme applies to group companies –244,289 –122,858 employees other than senior executives. other –88,956 –107,276 Other –7,659 –4,711 Total –340,904 –234,845 Redundancy payments The company and Chief Executive are subject to a mutual notice period of six months. The Chief Executive receives redundancy pay of 18 months’ salary coincident with termination initiated by the company, an amount that is not deducted from other income, and is included in pension entitlements. No redundancy pay is due for termination initiated by the Chief Executive. For four of the other senior executives, notice periods vary between three and six months, although for termination initiated by the company, six months’ notice applies to these senior executives, and redundancy pay of 12 months’ salary is due upon termination initiated by the company. Kungsleden 49 Annual Report 2005

Note 12 Tax Deferred tax Deferred tax assets Deferred tax liabilities 2005 2004 2005 2004 Tax cost 2005 2004 Income tax Group (loss carry- Profit before tax 2,115,909 499,565 forward) 1,379,932 1,122,869 Tax, 28% –592,455 –139,878 Interest- Tax effect of tax-related adjustments 339,209 456,862 bearing Tax effect of non-tax related revenues liabilities 111,132 108,469 and costs, net 124,102 60,316 Shares in Accounted tax –129,145 377,300 group Current tax –59,660 –10,872 companies 83,188 72,147 Deferred tax –69,485 388,172 Other 6,131 Accounted tax –129,145 377,300 Properties 97,104 76,476 –1,272,426 –1,033,417 Parent company Tax assets/ Profit before tax 3,231,847 517,740 liabilities 1,677,487 1,379,961 –1,272,426 –1,033,417 Tax, 28% –904,917 –144,967 Set-offs –1,272,426 –1,033,417 1,272,426 1,033,417 Tax effect of non-taxable revenues and costs, net 1,328,166 162,135 Tax assets/ liabilities, net 405,061 346,544 0 0 Accounted tax 423,249 17,168 Current tax Deferred tax 423,249 17,168 Non-accounted deferred tax Accounted tax 423,249 17,168 Group assets/tax liabilities 2005 2004 Reconciliation of effective tax 2005 % 2005 2004 % 2004 Profit before tax 2,115,909 499,565 Taxable temporary differences –1,471,649 0 Tax at prevailing tax rate 28.0 –592,455 28.0 –139,878 Income tax (loss carry-forward) 1,499,605 0 Taxable profits on acquired 27,956 0 shares –16.0 339,209 –91.5 456,862 Taxable depreciation, Note 13 Investment property

properties –5.7 120,351 –11.9 59,328 Group Other non-taxable revenues –0.2 4,603 –0.3 1,688 31 Dec. ’05 31 Dec. ’04 Non-deductible costs 0.0 –853 0.1 –700 Fair value, opening balance 13,437,756 13,158,842 Accounted effective tax 6.1 –129,145 –75.5 377,300 Acquired via business combination 5,383,699 – Other acquisitions 7,957,158 2,490,079 Group Investments in properties 319,461 192,009 Temporary differences 2005 2004 Reclassification to assets held for sale –850,000 – Income tax (loss carry-forwards) 4,928,326 4,010,244 Re-valuation effects in the Interest-bearing liabilities 396,901 387,390 year on divested assets 85,329 117,253 Shares in subsidiaries 297,100 257,668 Acquisition value, divested properties –2,599,218 –2,637,158 Other 21,986 – Unrealised value changes 1,122,068 116,731 Properties –4,197,577 –3,417,646 Fair value, closing balance 24,856,256, 13,437,756, Total 1,446,646 1,237,656 Deferred tax assets 405,061 346,544 Group Taxable values 31 Dec. ’05 31 Dec. ’04 Taxable values, buildings 5,865,939 5,124,423 Loss carry-forwards can only be utilized up to a threshold value. Group Taxable values, land 1,635,909 1,396,051 contribution prevention from acquisitions prevents the exercise of SEK 838 Total 7,501,848 6,520,474 m of deficits in the fiscal year 2006. This prevention remains until the fiscal year 2012 inclusive. The group contribution prevention from mergers Group prevents the utilisation of SEK 819 m of the above deficits until the fiscal Investment properties, effect on net profit 31 Dec. ’05 31 Dec. ’04 year 2012 inclusive, and prevents the utilisation of another SEK 9 m until the Rental revenues 1,843,111 1,426,618 fiscal year 2009 inclusive. The merger prevention applies to accumulated Direct costs for investment properties generating rental revenues in the period1 –540,111 –410,632 earnings and group contributions received. In the parent company, deferred tax assets exclusively comprise income Direct costs for investment properties not generating rental revenues in the period1 tax (loss carry-forwards). 0 0

1Direct costs include operating and maintenance costs, property tax and ground rent.

In certain cases, properties held via operating leasing contracts are accounted as investment properties. More information in ‘accounting principles’ above. The book value of rental properties included in the group’s property holdings is SEK 11 (0) m, with the corresponding liability being SEK 20 (0) m. As of 31 December 2005, properties with a book value of SEK 24,133 (13,266) m were pledged as collateral for bank borrowings. 50 Kungsleden Annual Report 2005 Note disclosures

Note 14 Real estate used in business operations Specification of parent company’s holdings of shares in group companies Group Hol- Book Book First-tier subsidiary/ corp No. of ding, value, value, Real estate used in business id. no./reg office-country shares operations-buildings and land 31 Dec. ’05 31 Dec. ’04 %1 2005 2004 Accumulated acquisition value, Kungsleden Fastighets AB, opening balance 14,500 14,500 556459-8612, Stockholm 200 100 1,156,000 856,000 Acquired via business combinations 1,000 Realia AB Residual value according to plan, 556100-0703, Stockholm 23,822,375 100 1,538,952 – closing balance 15,500 14,500 Hemsö Fastighets AB, 556481-1429, Stockholm 1,000 100 507,872 107,872 Group Kungsleden Syd AB, Taxable values 31 Dec. ’05 31 Dec. ’04 556480-0109, Stockholm 10,000 100 1,444,274 144,274 Taxable values, buildings 7,612 7,200 Kungsleden Öst B AB, Taxable values, land 2,546 2,483 556610-9103, Stockholm 1,000 100 35,785 35,785 Total 10,158 9,683 Kungsleden Vårdfastigheter AB, 556653-7501, Stockholm 1,000 100 550,100 – Note 15 Construction in progress Kungsleden Öst G AB, 556598-3177, Stockholm 1,000 100 100 100 Construction in progress Bovård i Sverige AB, In 2005, the group acquired land with the intention of building a school and 556429-6126, Stockholm 3,750 100 20,274 20,274 ambulance station. The acquisition value was 14,908. The group also Kungsleden Äldre B AB, started the construction of these properties for future usage as investment 556635-1366, Stockholm 1,000 100 120 17,761 properties. By the balance sheet date, 13,744 (0) had been invested in Kungsleden Bäcken AB, 556651-8394, Stockholm 1 000 100 1,100 50,100 these properties. Both projects are scheduled to conclude in 2006, with Kungsleden Real Estate BV, tenants moving in. 34209547, the Netherlands 900 100 165 165 Kungsleden Service AB, Note 16 Equipment, fixtures and fittings 556610-9087, Stockholm 1,000 100 2,076 – Group Companies divested in 2005 2,200 31 Dec. ’05 31 Dec. ’04 Total 5,256,818 1,234,531 Accumulated acquisition value, opening balance 17,070 17,576 1 Refers to the equity holding, which also corresponds to the votes held for the total Acquired via business combinations 18,079 – number of shares. Other acquisitions 8,713 2,818 Divestment and disposals –7,112 –3,324 Note 18 Shares in associated companies Total 36,750 17,070 Shares in associated companies are owned indirectly through subsidiaries. Accumulated depreciation, The information is not stated in the parent company’s annual report opening balance –11,067 –11,172 because subject to requirements for accuracy, the information is Acquired via business combinations –15,714 insignificant. However, other companies are stated in each subsidiary’s Depreciation for the year –2,590 –2,193 annual report. The amounts posted in the Income Statement and Divestment and disposals 5,885 2,298 shareholders’ equity are less than SEK 0.1 m. Total –23,486 –11,067 Residual value according to plan, Note 19 Joint ventures closing balance 13,264 6,003 Via a subsidiary, Kungsleden previously owned 50% of Hemsö Äldreboende Note 17 Shares in group companies AB, corporate identity number 556623-1337 with registered office in Parent company Stockholm, managed as a joint venture. Another 50% of the shares were 31 Dec. ’05 31 Dec. ’04 acquired in 2005, implying that via subsidiaries, Kungsleden now owns Accumulated acquisition value, 100% of this company. The proportional method was used up to and opening balance 1,565,185 1,704,720 including the time of acquisition, whereupon Kungsleden’s share of the Acquisitions 1,541,128 365 profit from properties was consolidated into the group. Divestments –2,200 –319,900 Shareholders’ contribution 2,691,426 180,000 Total 5,795,539 1,565,185

Write-downs, opening balance –330,654 – Write-downs –208,067 –330,654 Total –538,721 –330,654 Book value, closing balance 5,256,818 1,234,531

First-tier subsidiaries are stated below. Other companies that are part of the group are not stated in the parent company’s annual report because subject to requirements for accuracy, the information is insigniﬁcant. However, other companies are stated in each subsidiary’s annual report. Kungsleden 51 Annual Report 2005

Note 20 Maturity structure, receivables Not 21 Other receivables Group Group 31 Dec. ’05 31 Dec. ’04 31 Dec. ’05 31 Dec. ’04 Maturing within 1 year of the balance sheet date 1,138,602 601,645 Receivables, payment for divested properties 910,578 420,000 Maturing 2–5 years from the balance sheet date 4,198 39,992 Receivables, associated companies 20,700 Maturing more than 5 years from Other current receivables 38,253 131,404 the balance sheet – – Total 969,531 551,404 Total 1,142,800 641,637

Maturity structure, outstanding receivables excluding tax and liquid assets.

Note 22 Shareholders’ equity

Nominal Increase in Cumulative Change in no. Total no. of value per share capital, share capital, Share capital history, Year Action of shares shares share, SEK SEK SEK 1997 Incorporation 1,000 1,000 100 100,000 100,000 1997 Split 20:1 19,000 20,000 5 – 100,000 1997 New issue 230,000 250,000 5 1,150,000 1,250,000 1997 Promissory note with stock options – 250,000 5 – 1,250,000 1997 New issue 3,750,000 4,000,000 5 18,750,000 20,000,000 1998 New issue 2,400,000 6,400,000 5 12,000,000 32,000,000 1998 Convertible subordinated debenture – 6,400,000 5 – 32,000,000 1999 Split 2:1 6,400,000 12,800,000 2.50 – 32,000,000 1999 Conversion of subordinated debenture 2,758,620 15,558,620 2.50 6,896,550 38,896,550 1999 New issue 3,000,000 18,558,620 2.50 7,500,000 46,396,550 2000 New issue 400,000 18,958,620 2.50 1,000,000 47,396,550 2005 Split 2:1 18,958,620 37,917,240 1.25 – 47,396,550 2005 New issue 7,583,448 45,500,688 1.25 9,479,310 56,875,860

All new shares are fully paid-up. The resolved number of shares at year-end was 45,500,688. Proposed dividends for shareholders are SEK 11 per share. Dividends in the previous ﬁnancial year were SEK 15 per share (equivalent to SEK 7.03 per share after the consummated split in 2005 and the bonus issue element of the new issue). The weighted average number of shares in the year was 41,282,128 (40,430,117). Calculations of the average number of shares considered the consummated split and the bonus issue element of the new issue.

Note 23 Interest-bearing liabilities Debt/instrument Group Nominal Actual 31 Dec. ’05 31 Dec. ’04 amount value Maturing within 1 year of the Variable-rate loans 15,445,958 15,445,958 balance sheet date 2,994,401 642,300 Fixed-rate loans 2,254,977 2,323,886 Maturing 2–5 years from the Interest swap—receivable1 –8,811,000 –8,,831,546 balance sheet date 14,578,897 7,804,484 Interest swap—liability1 8,811,000 9,065,348 Maturing more than 5 years from Total 17,700,935 18,003,646 the balance sheet 127,637 1,013,200 Market value of ﬁnancial instruments 302,711 371,530 1The total includes a threshold swap contract with an outstanding nominal Total 18,003,646 9,831,514 amount of SEK 400 m, which matures in 2010.

In a financial context, Kungsleden is primarily exposed to interest risk, which For calculating market value, the discounting of future cash flows with zero- means the risk of changes in interest levels affecting net financial position. coupon yields based on official quoted prices is applied. All values represent By simulating future yields, Kungsleden can select those instruments and a calculated value and will not necessarily be realised. measures that will reduce the volatility of its net financial position optimally. The following table illustrates the difference between the nominal value and Note 24 Maturity structure, liabilities market value of liabilities. The table also shows the division of liabilities Group between fixed and variable rates, the instruments used for risk management 31 Dec. ’05 31 Dec. ’04 and these instruments’ nominal amounts. Maturing within 1 year of the balance sheet date 5,745,164 1,357,970 Maturing 2–5 years from the balance sheet date 14,578,897 7,804,484 Maturing more than 5 years from the balance sheet 127,637 1,013,200 Market value of financial instruments 302,711 371,530 Total 20,754,409 10,547,184

Maturity structure of interest-bearing liabilities and trading liabilities excluding tax liabilities. 52 Kungsleden Annual Report 2005 Note disclosures

Note 25 Assets pledged Effect of business combinations Book Group value in Fair 31 Dec. ’05 31 Dec. ’04 acquired value Book For Kungsleden’s own liabilities com- adjust- value in and provisions panies ment the group Property mortgages 18,552,356 9,059,244 Properties and equipment 4,771.9 615.2 5,387.1 Shares in subsidiaries 1,027,852 511,519 Deferred tax 296.3 –148.3 148.0 Liquid assets 39,650 - Accounts and other receivables 94.9 94.9 Total 19,619,858 9,570,763 Liquid assets 126.5 126.5 Interest-bearing liabilities –3,931.6 –85.4 –4,017.0 Parent company Accounts payable and other 31 Dec. ’05 31 Dec. ’04 –200.5 –200.5 liabilities Shares in subsidiaries 2,694,952 856,000 Net identiﬁable assets and liabilities 1,157.5 381.5 1,539.0, Kungsleden Fastighets AB and subsidiaries have provided an undertaking Price paid, cash1 1,539.0 to the banks providing its syndicated loan to refrain from raising further Cash (acquired) –126.5 loans or creating or depositing collateral from its asset mass without Net cash outﬂow 1,412.5 approval of the banks. However, existing mortgages have been pledged as 1 Including fees coincident with the acquisition of SEK 9 m. collateral for the syndicated credit facility.

Note 28 Risks, policies and special considerations Note 26 Contingent liabilities

Group Fundamental valuation 31 Dec. ’05 31 Dec. ’04 Property valuations are determined by supply and demand on the property Surety in favour of group companies 5,917,890 6,017,275 market, and are mainly dependent on the progress of the underlying rentals Other contingent liabilities 87,261 113,660 market, interest rates generally and the credit market. In recent years, property has enjoyed positive value growth despite a relatively weak rental Total 6,005,151 6,130,935 market. The prime explanation is interest rates, and the improving function of the credit market, as well as the associated increased interest in Parent company properties as an investment asset. However, in the long term, progress on 31 Dec. ’05 31 Dec. ’04 the underlying rental market is the prime explanation for the value growth of Surety in favour of group companies 5,917,890 6,017,275 properties.

Note 27 Additional information, Cash Flow Statement The rental market Adjustment for items not included Group The rental market is dependent on real economic progress. Healthy real in cash ﬂow, etc. 31 Dec. ’05 31 Dec. ’04 economic growth with increasing GDP and rising employment normally Depreciation 2,590 2,193 results in rising demand for premises. However, in recent years, employ- Other provisions –508 1,095 ment has not increased despite positive real economic growth, the Total 2,082 3,288 explanation being that businesses have rationalized instead of hiring. This has resulted in the demand for premises, particularly in Stockholm, being Components included in liquid assets 31 Dec. ’05 31 Dec. ’04 relatively weak. The credit risk on the group’s rental receivables is limited Cash and bank balances 163,828 67,306 because all rents are paid in advance.

Approved credit facilities amounted to 18,507,000 divided between credit Interest rate sensitivity limits for property acquisitions of 6,000,000, a secured loan of Interest rates are significant to Kungsleden’s operations in several respects. 12,257,000 and a committed credit facility of 250,000. The un-utilised The market values of properties and the loan portfolio, and thus book portion of credit facilities amounted to 1,134,000. Interest paid for the values, are dependent on interest rates. Rising interest rates reduce the financial year amounted to SEK 502 (450) m. Dividends received were market value of properties, but also the loan portfolio, given the selected SEK 0.1 (0) m. interest fixing strategy. Although these value changes normally counteract Investments in the extension and renovation of remaining property each other, the value change on properties is usually larger than the value amounted to 245,192 (113,872). Acquisitions and new construction of change on the underlying portfolio. Operating net cash flows, basically profit property amounted to 8,145,408 (2,568,215). Properties acquired via after net financial items, are also partly dependent on interest rates. In the business combinations of 4,769,542 (0) were additional. short term, the net cash flow from operating activities is adversely affected by rising interest. In the longer term, assuming that interest rate increases Group Operating cash flow 2005 2004 arise from a normal cyclical upturn, rental revenues rise through declining Profit before tax 2,115,909 499,565 vacancies, rising market rents and inflation/index-related rent increases on Net financial position 545,600 455,916 current rental contracts. The increase in rental revenues may be as large as, Adjustment for items not included or larger than, the increased interest costs. 2,082 3,288 in cash flow Realised value changes 85,329 117,253 Funding opportunities Unrealised value changes –1,190,887 –10,471 The properties Kungsleden owns are financed through borrowings and Change in working capital 199,588 –86,521 shareholders’ equity. Opportunities to secure funding on the credit market Investments –245,192 –113,872 have progressively improved for the property market’s players, and Total 1,512,429 865,160 generally, are now good in historical terms. Kungsleden’s prospects of securing attractive funding have improved over time, and are very positive at present. Kungsleden 53 Annual Report 2005

Dependency on employees Accordingly, the possibility of property tax changing for the various types of Kungsleden’s dependency on employees can be considered greater than property in the future cannot be ruled out. The majority of rental contracts for the sector as a whole. Organisational capacity is important for include a stipulation that Kungsleden can transfer increased property tax Kungsleden, and ultimately, its prospects of realizing its business concept, onto the tenant. vision and strategy rests with its professionals. Being able to offer an interesting workplace that offers opportunities for progress is crucial for Currency risks hiring and retaining skilled professionals. Kungsleden has documented All foreign group companies are in local currency, implying the currency risk good prospects of hiring skilled professionals. being limited because all operating ﬂows are in the same currency. Only shareholders’ equity is subject to currency exposure. Operating and maintenance costs Several other larger cost items in property management comprise tariff- Sensitivity analysis related costs such as costs for heating, power, water and waste manage- The sensitivity analysis in the following table illustrates how operations are ment. In most cases, Kungsleden is dependent on a local, often municipal, affected by changes in the primary variables, and is based on the situation provider for its water, district heating and waste management. The charges as of 31 December 2005. for these services are dependent on a range of factors such as the cost of the supplier’s investment in equipment and distribution networks, costs of Proﬁt impact, raw materials and tax. For electricity, costs are generally dependent on the Sensitivity analysis Change SEK m demand on the open power market. Rental revenue +/–1 per cent 18 Economic vacancy +/–1 percentage point 20 Property tax Property costs +/–1 per cent 5 Sweden’s rental market is subject to a central government property tax, Funding costs, upon changed interest level +/–1 percentage point 69 which at present, is 1.0 per cent of the taxable value of rental premises, and Average funding costs +/–1 percentage point 180 0.5 per cent for residential and industrial properties. This taxable value is intended to be 75 per cent of market value. There are differences in the various political parties’ view of the amount and incidence of property tax.

What do you think makes Kungsleden different from other property companies? The fact that we’ve normally got our foot on the accelerator, and rarely on the brake. Change is a constant feature, which really pulls the staff together. How would you describe ‘the Kungsleden spirit’? This is all about the fact that there’s always something going on, which means that you’ve got to enjoy change to get on at Kungsleden. The dynamism running through our organization also means that most people like going to work.

What is Kungsleden’s biggest asset, and why? Kungsleden’s staff are deﬁnitely its prime asset, because they have a variety of backgrounds and are skilled. Our level of know-how is high: right from our analysis function, which seeks out properties, preparing acquisitions and sales, right through to property management. Everyone has knowledge in a lot of areas.

What deal do you think is Kungsleden’s best so far? The acquisition of Tornet was our best deal so far, because it gave me and my colleagues a lot of interesting things to do and good business opportunities.

What do you think Kungsleden could get better at? Anita Lind Taking care of our tenants and building relationships with them. Property Manager, East Region Age: 45 How do you use your health allowance? Employed: 1994 It’s very positive that Kungsleden is prioritizing healthcare, and healthy staff are vital. I’ve invested in a gym pass. 54 Kungsleden Annual Report 2005 Audit report

PROPOSED APPROPRIATION OF PROFITS To Kungsleden AB’s (publ) Annual General Meeting

The following amounts in the parent company are at Corporate identity number 556545-1217 the disposal of the Annual General Meeting, SEK I have examined Kungsleden AB’s (publ) Annual Report, consoli- Profit brought forward –201,426,761 dated accounts, accounts and the Board’s and Chief Executive’s Net profit 3,655,099,095 Total 3,453,672,334 administration for the year 2005. The Board and Chief Executive assume responsibility for the accounts, management and for the The Board of Directors and Chief Executive propose that profits are appropriated as follows, SEK: Swedish Annual Accounts Act being observed when preparing Dividends of SEK 11.00 per share to shareholders, in total: 500,507,568 the Annual Report and for IFRS, as endorsed by the EU, and the Carried forward 2,953,164,766 Swedish Annual Accounts Act, being observed when preparing Total 3,453 ,672,334 the consolidated accounts. My responsibility is to comment on the Annual Report, the consolidated accounts and the manage- Chap. 18 §4 of the Swedish Companies Act stipulates that the ment on the basis of my audit. Board of Directors should make a statement regarding proposed The audit has been completed in accordance with generally dividends. Kungsleden’s dividend policy is to distribute at least 50% accepted accounting practice in Sweden. This means that I have of profit for calculating dividends to its shareholders. Kungsleden planned and completed the audit in order to ensure reasonably has also stated that dividends should be stable over time. that the Annual Report and consolidated accounts do not con- Profit for calculating dividends excludes items that do not affect tain any material mis-statement. An audit comprises the exami- cash flows such as unrealized value changes, depreciation and amortization and deferred tax, plus realised value changes. Profit nation of a selection of the documentation relating to amounts for calculating dividends corresponds to the cash flow from and other information contained in the accounts. An audit also operating activities item in the Cash Flow Statement. includes examining the accounting principles and the Board’s The Board of Directors proposes dividends of SEK 11 per share and Chief Executive’s application thereof, as well as evaluating for the financial year 2005, corresponding to 14 per cent of the the significant estimates the Board of Directors and Chief Execu- company’s profit after tax and 50 per cent of profits for calculating tive have made when preparing the Annual Report and the con- dividends. solidated accounts as well as evaluating the overall presentation Apart from the company’s policy, the Board of Directors of information in the Annual Report and consolidated financial considered the second and third paragraphs of chap. 17 § 3 of the statements. As the basis for my statement regarding discharge Swedish Companies Act regarding protecting restricted equity and from liability, I have examined significant decisions, measures the principle of prudence, with implications including the Board of and circumstances in the company in order to assess whether Directors considering the company’s operations, scope, risks and any Board member or the Chief Executive is liable for compen- liquidity. The company accounts the value of assets and liabilities at fair sation to the company. I have also examined whether any Board value pursuant to chap. 4 § 14a of the Swedish Companies Act. member or the Chief Executive has otherwise contravened the Of consolidated shareholders’ equity as of 31 December 2005 of Companies Act, the Annual Accounts Act or the Articles of Asso- SEK 6,649 m, SEK 1,295 m depends on this valuation being applied. ciation. I consider that my audit provides me with a reasonable foundation for the following statements. We hereby state that to the best of our knowledge, the Annual The Annual Report has been prepared in accordance with the Report has been prepared consistent with generally accepted Annual Accounts Act and thereby provide an accurate impres- accounting practice for listed corporations. The information sion of the company’s profit and financial position in accordance provided is consistent with actual circumstances, and no with generally accepted accounting practice in Sweden. The significant omissions have been made and would affect the consolidated accounts have been prepared pursuant to IFRS impression of the company created by the Annual Report. as endorsed by the EU and the Swedish Annual Accounts Act, and provide a representative impression of the group’s profit and Stockholm, Sweden, 3 March 2006 position. The Report of the Directors is consistent with the other parts of the Annual Report and consolidated accounts. I recommend that the Annual General Meeting approves the Income Statement and Balance Sheet for the parent company and the group, allocate profit in the parent company in Bengt Kjell Mats Israelsson accordance with the proposal in the Report of the Directors and Chairman discharge the Board members and Chief Executive from liability for the financial year.

Stockholm, Sweden, 3 March 2006 Jonas Nyrén Per-Anders Ovin Thomas Thiel Authorised Public Accountant

Anna W Jiffer Jens Engwall Chief Executive Kungsleden 2005 55 Deﬁnitions

Kungsleden has introduced a new structure to its accounts coincident with • For those properties where 12 months have passed since Kungsleden the adoption of IFRS. It in those instances where the new structure affects took possession, actuals for the last 12 months are included; the deﬁnitions, both the old and new deﬁnition are stated below. • For those properties where more than six months but less than 12 months Earnings capacity: properties disposed of as of the balance sheet date have passed since Kungsleden took possession, actuals are recalculated are excluded, and properties acquired by no later than the same date are to 12-month equivalents; included as if they had been owned for 12 months. Otherwise, the • For properties where less than six months have passed since Kungsleden calculation is based on the following assumptions: took possession, data from acquisition calculations is used.

Property terminology Distribution of floor-space: distribution by Mortgage ratio: interest-bearing liabilities in accommodation type implies that the floor-space relation to property book value at the end of the Property yield (new): operating net for the year in in a property is distributed by usage. There is a period. relation to the average book value of properties. division between office, housing, retail, hotel, However, the property yield for the earnings Dividend yield: dividends paid in the year in development, industrial and warehousing. capacity is calculated as earnings capacity in relation to the share price at the beginning of the Distribution by property type means the property relation to the book value of properties at year- year. is defined by that type of floor-space that end. Shareholders’ equity per share: shareholders’ represents the greatest proportion of total. Property yield (old): operating surplus in relation equity in relation to the number of shares at year- Accordingly, a property with 51 per cent of its to average book value of properties. However, the end. floor-space used as offices is considered an office property yield for earnings capacity is calculated property. Book value of property per share: book value of as the earnings capacity in relation to the book property in relation to the number of shares at Area-based occupancy: let floor-space in relation value of properties at the end of the period. year-end. to total lettable floor-space at the end of the Operating net (new): rental revenue less period. Cash flow from operations (old): operating profit operation and maintenance costs, ground rent less net financial position and adjusted for value Area-based vacancy:, vacant floor-space in and property tax. changes and items not included in cash flow from relation to total lettable floor-space at the end of Operating surplus (old): rental revenue less operating activities. Also adjusted for changes in the period. operation and maintenance costs, ground rent, working capital and tax paid. Surplus value of properties: the difference property tax and property administration. P/E ratio: share price at the end of the period in between the market and book value of properties Operation costs (new): costs for electricity, relation to earnings per share, in accordance with adjusted for deferred tax liabilities. Market value heating, water, property care, cleaning, insurance prevailing forecasts. Year-end share prices in means internal value. and ongoing maintenance less billed supple- relation to the following year’s EPS are used for ments for operations and maintenance. historical values. Financial terminology Operation costs (old): costs for electricity, P/CE ratio: share prices at the beginning of the Proportion of risk-bearing capital: the total of heating, water, property care, cleaning, insurance year in relation to cash flow from operating accounted shareholders’ equity and provisions for and ongoing maintenance. activities per share. tax divided by total assets. Economic occupancy: rental revenues, rental Earnings per share: net profit divided by the Return on equity: net profit in relation to average discounts and rental losses in relation to rental average number of outstanding shares in the shareholders’ equity. Average shareholders’ value. period. equity is calculated as the total of opening and Economic vacancy, assessed market rent for un- Interest cover (new): profit before tax less closing balances divided by two. occupied floor-space in relation to rental value. unrealized value changes and net financial Return on total capital (new): profit before tax position in relation to net financial position. Property type: the primary usage of properties less unrealised value changes and net financial (see ‘Distribution of floor-space’). Interest cover (old): profit before net financial position in relation to average assets. Average items in relation to net financial position. Rental revenues (new): rent invoiced, plus assets are calculated as the total of the opening supplementary items such as remuneration for and closing balances divided by two. Gearing: interest-bearing liabilities at the end of heating, property tax, insurance claims and other the period in relation to shareholders’ equity. Return on total capital (old): profit after financial revenues, less rental losses and rental discounts. items plus interest costs less interest subsidies in Equity ratio: shareholders’ equity including minor- Rental revenues (old): rent involved, plus relation to average assets. Average assets are ity shares at the end of the period in relation to supplementary items such as remuneration for calculated as the total of opening and closing total assets. heating, property tax, insurance claims and other balances divided by two. Total yield: the total of the share’s price gains and revenues, less rental losses and rental discounts. Beta value: the share’s correlation with the dividends paid in the period in relation to the Rental value (new): rental revenues plus market’s average performance. A beta value of closing share price at the beginning of the period. assessed market rent for un-let floor-space, rental less than one implies that a share price has Profit for calculating dividends: net profit discounts and rental losses. fluctuated less than the SAX (Stockholm All-share excluding by items affecting cash flow such as Rental value (old): rental revenues plus assessed Index). Beta value is a key component of the unrealised value changes, depreciation and amor- market rent for un-let floor-space, rental discounts CAPM (Capital Asset Pricing Model) used to tization and deferred tax plus realised value and rental losses less other revenues. calculate the market’s required rate of return on changes. Profits for calculating dividends the share. The CAPM indicates that a low beta correspond to the cash flow from operating Accommodation type: floor-space distributed by value implies a low required rate of return. Beta activities item of the Cash Flow Statement. usage. values relate to a period of 12 months. Profit margin (new): operating net in relation to Maintenance: measures intended to maintain a Adjusted shareholders’ equity: accounted total rental revenues. property and its technical systems. Relates to shareholders’ equity less (proposed) dividends. planned measures entailing the replacement or Profit margin (old): operating surplus in relation to renovation of parts of a building or technical Cash flow from operating activities (new): profit total rental revenues. systems. Also includes tenant adaptations. before tax less unrealised value changes adjusted for realized value changes on properties, items not included in cash flow from operating activities and tax paid. 56 Kungsleden 2005 Employees

Name Employed in Workplace Position Age Name Employed in Workplace Position Age

Head Office Regional office East Engwall Jens 1993 Stockholm Chief Executive 49 Andersson Göran 1966 Gävle Property Manager 59 Mukka Sinikka 1993 Stockholm Chief Executive’s Secretary 40 Annernäs Malin 2004 Sundsvall Management Assistant 22 Risberg Johan 1996 Stockholm Deputy Chief Executive 44 Appelqvist Jan 1989 Norrköping Property Manager 63 Thagesson Lars 1993 Stockholm Deputy Chief Executive 46 Axelsson Gunilla 1997 Karlstad Management Assistant 54 Bergman Kjell 2004 Stockholm Property Manager 43 Analysis Brask Karin 2000 Karlstad Management Assistant 27 Allard Andrea 2003 Stockholm Analyst 28 Broman Maléne 2001 Stockholm Property Manager 34 Nyman Anna-Carin 2000 Stockholm Analyst 33 Broman Stig 1998 Västerås Property Manager 53 Ryhle Helena 2002 Stockholm Junior Analyst 27 Christensen Carina 2001 Sundsvall Management Assistant 47 Eckerbom Nils 2001 Stockholm Management Technician 55 Servicecenter Elfving Ann-Sofi 2001 Stockholm Receptionist 31 Alenskog Åsa 2001 Stockholm Accounts Assistent 35 Eriksson Eva 2005 Stockholm Regional Manager, East 46 Andersson Mattias 2002 Stockholm Business Controller 32 Eriksson Helen 2005 Norrköping Management Assistant 35 Bengtsson Monica 1999 Vårby Accounting 51 Fransson Ulrika 1999 Vårby Management Assistant 39 Binette Pia 1999 Stockholm Rental Accounting 49 Gullstrand Susanne 1997 Gävle Property Manager 38 Blomgren Catarina 1998 Stockholm IT Co-ordinator 38 Hall Lotta 1994 Karlstad Management Assistant 59 Borkén Andersson Pia 1999 Vårby Accounting 36 Hansson Peter 2003 Norrköping Property Manager 50 Carlberg Monica 1989 Vårby IT Manager 51 Hedh Mikael 2005 Gävle Management Assistant 25 Dahlgren Petra-Sofi 2001 Stockholm Accounts Assistent 33 Hedlund Ann-Sofie 2002 Gävle Management Assistant 35 Dahlström Åke 2003 Stockholm Rental Accounting 59 Hedman Per 2002 Stockholm Technical Manager 44 Ekenberg Jeanette 2005 Norrköping HR/Payroll 37 Hellne Bengt 1997 Tumba Property Manager 63 Ekstedt Hanna 2004 Stockholm Accounts Assistent 26 Hellström Mats 1988 Sundsvall Property Manager 42 Eliasson Ingegerd 1985 Vårby Accounting Manager 58 Helzenius Carina 1995 Gävle Management Assistant 58 Elvin Maria 2005 Stockholm IT Co-ordinator 28 Jagetoft Ulf 1995 Stockholm Back Office 61 Forsberg Kerstin 1998 Vårby Audit Manager 50 Johansen Christina 1976 Köping Management Assistant 58 Frank Helena 2005 Stockholm Financial Controller 34 Johansson Eva 2005 Norrköping Switchboard/Help Desk 41 Fundin Ulrika 2000 Vårby Accounting 42 Johansson Henrik 2002 Stockholm Property Technician 32 Hamrén-Johansson Therese 2001 Stockholm Payroll Adminstrator 33 Johansson Lena 1999 Västerås Management Assistant 39 Hedberg Sofia 1991 Stockholm IT Manager 39 Jonsson Birgitta 1998 Vårby Management Assistant 58 Jönehall Jonas 2001 Gothenburg Accounting Manager 29 Jonsson Malin 2005 Norrköping Switchboard/Help Desk 33 Karlsson Annika 2005 Stockholm Payroll Assistant 26 Jönsson Stefan 2003 Norrköping Property Technician 41 Kruse Mikael 2000 Gothenburg Accounting Manager 43 Karlsson Karin 1997 Karlstad Property Manager 50 Nordin Gunilla 1999 Stockholm Accounts Assistant 35 Karlsson Reine 1994 Karlstad Property Manager 60 Norrman Stefan 2003 Vårby Controller 27 Kasslert Jan 1999 Karlstad Property Manager 40 Persson Anna 2005 Stockholm Accounts Assistant 39 Knutsson Karin 1999 Norrköping Management Assistant 47 Pihl Olle 2005 Vårby Accounting 34 Larsson Bo 2004 Karlstad Operations Engineer 50 Sterner Mats 1999 Stockholm Head of Accounting 44 Larsson Gunnar 1999 Stockholm Property Manager 48 Sydner Anja 2002 Stockholm Accounting Manager 52 Lewenhaupt Thor Margot 2005 Stockholm 1st Receptionist 55 Telby Susanne 1996 Stockholm Head of Auditing 45 Lind Anita 1994 Karlstad Property Manager 45 Theblin Åke 2001 Stockholm Company Lawyer 44 Lindau Mari 1999 Norrköping Management Assistant 42 Turai Erik 1999 Vårby Head of Accounting 40 Lindman Malin 2001 Norrköping Administrator 26 Virdeborn Gunilla 2002 Malmö Accounting Manager 45 Lundgren Jessika 2003 Karlstad Property Manager 35 Lundström Anette 1978 Gävle Management Assistant 45 Regional office South Lönnborg Nina 2005 Stockholm Assistant 26 Alvarsson Fredrik 2005 Malmö Property Manager 36 Mobäck Åsa 2004 Norrköping Switchboard/Help Desk 33 Berg Kim 2001 Malmö Management Assistant 36 Müller Susanne 2004 Finspång Estate Manager (Finspång) 46 Borgström Kristina 2005 Malmö Property Manager 31 Pettersson Kerstin 2000 Karlstad Administrator 53 Falkenström Adam 2001 Malmö Property Manager 30 Salmelin Jan 2001 Tumba Management Assistant 39 Johansson Lars 1988 Malmö Property Manager 61 Skystedt Bernt 2002 Karlstad Property Manager 42 Kristiansson Bo 2003 Malmö Property Technician 52 Sosa Johan 1998 Stockholm Property Manager 31 Lindnér Eskil 1997 Malmö Regional Manager 46 Sundström Mikael 2003 Västerås Technical Manager 38 Mosebach Jenny 2001 Malmö Property Manager 33 Svensson Eva-Lotta 1998 Vårby Property Manager 38 Nagy Ingmarie 2000 Lund Management Assistant 58 Säfström Dick 1998 Västerås Property Manager 50 Nilsson Christer 2004 Lund Project Manager 50 Söderberg Marie 1998 Sundsvall Management Assistant 41 Olsson Bo 1985 Malmö Technical Management 56 Thorgren Fredrik 2001 Gävle Property Manager 31 Persson Per-Åke 1991 Malmö Technical Management 62 Tolvers Marianne 1999 Stockholm Management Assistant 41 Sjöstedt Håkan 1998 Malmö Management Assistant 55 Valberg Harriet 1974 Tumba Management Assistant 58 Sjöstedt Johan 2003 Malmö Property Manager 33 Vallin Johan 1999 Stockholm Management Assistant 33 Stenberg Kurth 1975 Malmö Technical Management 58 Wiblom Siw 2004 Stockholm Consultant 52 Svantesson Lisbeth 2004 Lund Management Assistant 47 Sörling Fredrik 2004 Malmö Property Manager 33 Regional office Retirement Homes Ternström Gert 1990 Malmö Property Manager 43 Andersson Kerstin 2001 Stockholm Management Assistant 42 Tomasson Hanna 2004 Malmö Management Assistant 27 Fors Henry 2005 Stockholm Project Manager 39 Frantz Michael 2004 Stockholm Property Manager 50 Regional office West Jenrik Bernt 2004 Stockholm Property Manager 63 Andersson Bertil 2000 Gothenburg Property Manager 51 Johansson Roger 2003 Stockholm Accounting Manager 44 Andersson Kjell-Åke 1994 Gothenburg Back Office 57 Linder Göran 1998 Stockholm Regional Manager 37 Arfvidsson Nicklas 2005 Gothenburg Property Manager 30 Swedin Ronny 2004 Stockholm Property Manager 61 Askengren Pia 2002 Trollhättan Management Assistant 42 Öberg Annika 2002 Stockholm Management Assistant 41 Broström Sten 1998 Trollhättan Property Manager 54 Öhrn Anders 2003 Norrköping Property Manager 59 Eliasson Eva 2000 Gothenburg Management Assistant 34 Florén Aili 1998 Gothenburg Management Assistant 51 Schoolproperties Göthberg Jonny 2001 Jönköping Property Manager 43 Kaur Åke 1998 Stockholm Property Manager 50 Hellqvist Kerstin 2004 Gothenburg Property Manager 48 Hult Joachim 2005 Gothenburg Property Manager 35 Property care Ivarsson Benny 1999 Gothenburg Regional Manager 50 Andersson Bo 1977 Borås Janitor 61 Kjärr Charlotte 2005 Gothenburg Receptionist 29 Andersson Roland 2003 Malmö Janitor 44 Lindström Lars 1994 Gothenburg Marketing Manager 51 Andersson Sven-Åke 1985 Borås Janitor 52 Ljungqvist Ingrid 1991 Gothenburg Management Assistant 60 Andersson Tomas 1992 Köping Janitor 37 Olin Sven 1998 Växjö Property Manager 56 Andreasson Ingmar 1977 Skara Janitor 64 Selin Kerstin 1998 Växjö Management Assistant 50 Appelqvist Peter 2003 Norrköping Janitor 39 Sjöberg Anna 2000 Jönköping Management Assistant 32 Aronsson Sven-Henric 1974 Lysekil Janitor 61 Kungsleden 2005 57

Name Employed in Workplace Position Age Name Employed in Workplace Position Age

Property care, cont. Ljung Anders 2001 Norrköping Janitor 56 Berggren Jan 2005 Malmö Janitor 59 Lövgren Anders 1984 Tumba Janitor 39 Bergh Tommy 1997 Karlstad Janitor 43 Medin Staffan 1979 Borås Technical Manager 53 Blom Rune 1974 Tumba Janitor 55 Moberg Egon 1987 Söderhamn Janitor 64 Borgert Jan 2003 Hagfors Janitor 47 Nilsson Per 2003 Karlstad Service Manager 40 Bäcklin Per 2004 Gävle Janitor 45 Nilsson Stig Lennart 2003 Karlstad Service Manager 37 Callman Tomas 1979 Hjo Janitor 53 Nordlund Hans 1997 Filipstad Janitor 56 Cohn Richard 2004 Karlstad Janitor 43 Nordqvist Ulrik 2003 Sundsvall Janitor 28 Dalviken Pauli 1990 Borås Janitor 47 Näfverstam Stefan 1994 Norrköping Janitor 35 Ehn Bengt 1980 Skara Janitor 56 Olsson Conny 1987 Tidaholm Janitor 57 Ekström Jan 2004 Vårby Janitor 58 Olsson Jan 1998 Söderhamn Janitor 61 Elfving Magnus 1999 Västerås Janitor 36 Olsson Magnus 2004 Sundsvall Janitor 23 Eriksson David 1998 Hjo Janitor 35 Ottoson Robert 2004 Gävle Janitor 38 Eriksson Jesper 1995 Köping Janitor 31 Pettersson Ingemar 1989 Slagsta Janitor 54 Fred Lars 1985 Lysekil Janitor 60 Pettersson Joakim 2000 Karlstad Operations Technician 32 Frilén Jan-Åke 2004 Sundsvall Janitor 49 Pettersson Tobias 1998 Vårby Janitor 27 Hansson Lim Jonas 1999 Malung Janitor 55 Rastebrig Pasi 2005 Vårby Janitor 37 Hillman Leif 2003 Gävle Janitor 47 Salonen Teuvo 1961 Tumba Janitor 64 Holmborg Helene 1989 Stockholm Janitor 63 Saviaro Olavi 1980 Tumba Janitor 45 Hurtig Göte 1999 Uddevalla Janitor 64 Schildger Stig 1999 Karlstad Janitor 38 Hägg Peter 2004 Norrköping Janitor 44 Schwartz Lars 2002 Åmål Janitor 42 Isaksson Tage 1982 Borås Janitor 61 Sundin Kurt 2003 Sundsvall Janitor 54 Jensen Ove 1997 Färgelanda Janitor 62 Svensson Christina 1999 Arboga Janitor 53 Johnsson Eddie 1989 Borås Janitor 49 Svensson Kenneth 2005 Skara Janitor 53 Karlsson Johan 2004 Gävle Janitor 40 Svensson Ove 1978 Färgelanda Janitor 62 Karlsson Rolf 1985 Tidaholm Janitor 57 Thomasen Peter 2003 Landskrona Janitor 49 Kohtakangas Markku 2001 Vårby Janitor 39 Tingsborg Thomas 1971 Tumba Janitor 52 Kontturi Mikael 1988 Gävle Janitor 56 Wallinder Jan-Olov 2001 Västerås Janitor 57 Kämäräinen Timo 1984 Lilla Edet Janitor 50 Weimann Daniel 2002 Sundsvall Janitor 24 Larsson Gunnar 1984 Köping Janitor 62 Vesa Kyllikki 1990 Köping Janitor 55 Lietoff Jorma 1988 Gävle Janitor 61 Välimäki Kalevi 1989 Gävle Janitor 61 Lindström Urban 2004 Sundsvall Janitor 54

What distinguishes Kungsleden’s working methods? Kungsleden’s organisational features allows us having considerable freedom with responsibility. This means we can take quick decisions, and thus get good impetus. Everyone is responsible for their own activities. What’s Kungsleden’s biggest asset, and why? The people that work here—after all it’s us that create the company’s values. How would you describe a good Kungsleden property? A profitable property with satisfied tenants. Location or type is irrelevant. How do tenants know that Kungsleden owns their property? Because we look after our buildings well, and our flat structure means we can act quickly, giving our tenants a quick response and help as questions and problems arise.

What do you expect from 2006? That all my near ones and dear ones are healthy and Kungsle- den continues to exploit the good business opportunities that arise. There are always business opportunities, it’s just a matter of ﬁnding them. How would you describe ‘the Kungsleden spirit’? The Kungsleden spirit is about not making things more com- plex than they actually are. What do you think Kungsleden could get better at? Nothing really bad springs to mind, but there’s always room for improvement. For example, we could sharpen our focus on cutting vacancies.

Göran Linder Regional Manager, Retirement Homes Employed: 1998 Age: 37 58 Kungsleden 2005 Assets: Properties

v Year of Lettable floor-space Muni- construction/ Industrial/ Retirement Resi- Total Rental Rental Vacancy Name cipality Locality Address conversion Office warehouse homes Retail dential Hotel Other floor-space revenue value %

Market Area East Office properties Hållsta 6:13,15,18,19 Eskilstuna Eskilstuna Hållsta 1972/1981 24 280 ------24 280 73 9 056 99 Valpen 1 Eskilstuna Eskilstuna Kungsgatan 68 1929 4 476 ------4 476 2 519 2 519 0 Viljan 2 Eskilstuna Eskilstuna Careliigatan 8 1976/1995 7 059 2 022 - 81 - - - 9 162 7 264 7 629 5 Växlaren 4 Eskilstuna Eskilstuna Fristadstorget 10 1930 1 957 575 - 52 526 - - 3 110 3 390 3 445 2 Norr 12:5 Gävle Gävle Nygatan 13 1978 10 590 1 067 - 4 190 - - - 15 847 10 984 12 824 14 Norr 30:4 Gävle Gävle N:a Slottsgatan 5 1965 2 448 77 - 1 367 - - - 3 892 4 538 4 612 2 Diametern 1 Huddinge Huddinge Dialoggatan 1 1978 43 410 232 - - - - - 43 642 25 532 31 832 18 Rektangeln 1 Huddinge Huddinge Månskärsvägen 9 1988 8 200 ------8 200 1 049 8 548 80 Sigtuna 2:227 Sigtuna Sigtuna Skolbacken 61 2001 1 629 ------1 629 3 013 3 013 0 Kansliet 1 Solna Solna Signalistgatan 9 1940/1994 2 000 ------2 000 3 340 3 340 0 Valsverket 8-9 Stockholm Bromma Gjuterivägen 15 1947 1 485 525 - 520 - - - 2 530 1 307 1 851 29 Säteritaket 1 Stockholm Hässelby Maltesholmsvägen 88 1991 1 768 698 - - - - - 2 466 1 879 1 937 3 Gunnebo 15 Stockholm Spånga Salagatan 42 1992 4 135 ------4 135 3 094 4 739 35 Rosteriet 5 Stockholm Stockholm Lövholmsvägen 9 1956 3 270 ------3 270 4 105 4 105 0 Träbron 1 Stockholm Älvsjö Bergtallsvägen 10 1967/2000 13 667 - 3 208 - - - 5 16 880 19 956 19 913 0 Kopparen 9 Tyresö Tyresö Vintervägen 2 1960 1 139 983 - 212 - - - 2 334 1 425 1 470 0 Sävja 56:1 Uppsala Uppsala Västgötaresan 60 1990 3 017 - - 159 - - - 3 176 4 924 4 925 0 Årsta 78:1 Uppsala Uppsala Fyrislundsgatan 73 1982 2 922 ------2 922 2 158 2 540 15 Ösby 1:79 Värmdö Gustavsberg Skogsbovägen 21 1986/1990 1 324 1 367 - - - - - 2 691 2 415 2 549 5 Husby 4:25 Österåker Åkersberga Företagsallén 4 1988 1 379 ------1 379 -1 1 100 100 Husby 4:27 Österåker Åkersberga Företagsallén 10 1988 927 4 - - - - - 931 632 1 112 41 Husby 4:32 Österåker Åkersberga Företagsallén 14 1992 2 699 ------2 699 2 586 2 639 0 Runö 7:84 Österåker Åkersberga Sågvägen 2 1980 3 534 395 - 417 - - - 4 346 4 080 4 275 3

Retirement homes Betaren 4 Finspång Finspång Profilvägen 8 1964/1993 - - 1 991 - - - - 1 991 1 393 1 393 0 Hårstorp 3:366 Finspång Finspång Hårstorpsvägen 13 1972/1990 - - 2 880 - - - - 2 880 3 000 3 000 0 Tegelbruket 3 Finspång Finspång Östermalmsvägen 55 2002 - - 3 275 - - - - 3 275 4 910 4 910 0 Östermalm 1:12 Finspång Finspång Södra Storängsvägen 50 1950 - - 8 510 - - - - 8 510 7 030 7 030 0 Brynäs 55:4, Gävle Gävle Gävle 1970 - - 6 490 - - - - 6 490 4 141 4 141 0 Kristinelund 49:2 Gävle Gävle Bomhusvägen 111 1980 3 047 - 12 724 204 - - - 15 975 11 359 11 360 0 Strömsbro 4:2 Gävle Gävle Sanatorievägen 17 1910/2002 - - 5 841 - - - - 5 841 5 254 5 254 0 Södertull 13:14 Gävle Gävle Flemminggatan 11-17 1970/1996 - - 10 017 - - - - 10 017 8 734 8 734 0 Vallbacken 24:3 Gävle Gävle Barnhemsgatan 26 1970/1995 - - 4 937 - - - - 4 937 3 267 3 267 0 Varva 2:20 Gävle Gävle Norra Prästvägen 12a-b 1970/1992 - - 5 563 - - - - 5 563 3 799 3 799 0 Jakobsberg 2:2719 Järfälla Järfälla Vibblabyvägen 97-99 2000 - - 4 341 - - - - 4 341 6 343 6 343 0 Jakobsberg 34:6 Järfälla Järfälla Snapphanevägen 22 1973/2002 - - 7 055 - - - - 7 055 11 769 11 769 0 Elefanten 6 Linköping Linköping Barnhemsgatan 4 1998 - - 743 - 477 - - 1 221 1 387 1 389 0 Lillgårdsskolan 11 Linköping Linköping Ridhusgatan 2A 1996 49 - 1 461 - 157 - - 1 667 2 127 2 194 2 Valbyrån 5 Linköping Linköping Kärnavägen 3-11 1996 - - 2 656 - 94 - - 2 750 2 900 2 928 0 Rösunda 36:41 Nacka Saltsjöbaden Rösundavägen 2 - - - 11 145 - - - - 11 145 9 104 9 146 0 Mensättra 26:1 Nacka Saltsjö-boo Orenövägen 5 1995 - - 2 047 - - - - 2 047 3 731 3 731 0 Diademet 3 Norrköping Norrköping Gamla Övägen 27 1993 - - 3 625 - - - - 3 625 3 743 3 743 0 Järven 6 Norrköping Norrköping Bergslagsgatan /2004 717 - 4 054 - - - - 4 771 6 833 7 140 4 Konstantinopel 6 Norrköping Norrköping SKOMAKAREGATAN 11 2000 - - 3 183 - - - - 3 183 5 144 5 144 0 Sandbyhov 5 & 30 Norrköping Norrköping Sandbyhovsgatan 21 1920-70/2000 9 014 30 15 969 2 736 - - - 27 749 24 405 24 798 2 Linet 1 Norrtälje Norrtälje Torpvägen 5 A 1992 - - 4 314 - - - - 4 314 4 341 4 344 0 Sigtuna 2:164 Sigtuna Sigtuna Rektor Cullbergs väg 9 1943/1992 - - 973 - - - - 973 1 458 1 458 0 Hallen 4 Solna Solna Lövgatan 39 1990 1 232 - 4 599 - - - - 5 831 7 926 7 926 0 Plommonträdet 5 Stockholm Hägersten Valborgsmässovägen 16 1964 78 20 6 675 - 724 - - 7 497 8 449 8 449 0 Sjöstöveln 3 Stockholm Hägersten Folkparksvägen 156 1977/1997 325 - 7 445 - - - - 7 770 9 426 9 559 0 Flyghöjden 2 Stockholm Skarpnäck Skarpnäcks Torg 1 2003 - - 2 880 - - - - 2 880 4 695 4 695 0 Tempelriddarorden 5 Stockholm Skärholmen Vita Liljans väg 53 1999 - - 5 000 - - - - 5 000 5 918 5 918 0 Glaven 10 Stockholm Stockholm Stadshagsvägen 5 1996 141 - 3 442 - - - - 3 583 6 204 6 204 0 Kopparn 11 Stockholm Stockholm Erstagatan 32-34 1929/1995 57 - 3 085 144 - - - 3 286 4 724 4 724 0 Kulltorp 3 Stockholm Stockholm Tantogatan 19-25 1966/1997 - - 5 098 - - - - 5 098 8 526 8 526 0 Blåvalen 1 Södertälje Södertälje Tallhöjdsvägen 1-3 1927/1986 2 046 - 5 132 - - - - 7 178 9 060 9 060 0 Dragarbrunn 9:4 Uppsala Uppsala S:t Olofsgatan 44 B 2000 - - 4 020 - - - - 4 020 5 788 5 788 0 Kvarngärdet 14:5 Uppsala Uppsala Torkelsgatan 42 2000 - - 3 585 - - - - 3 585 5 273 5 273 0 Luthagen 81:1 Uppsala Uppsala Norrlandsgatan 2 2001 - - 2 740 - - - - 2 740 4 563 4 563 0 Rickomberga 9:14 Uppsala Uppsala Geijersgatan 61 2001 - - 3 200 - - - - 3 200 5 527 5 522 0 Ekeby 2:275 Vallentuna Vallentuna Ekebyvägen 40 1992 - - 2 936 - - - - 2 936 3 150 3 143 0 Rickeby 1:97 Vallentuna Vallentuna Stendösvägen 5 2003 - - 2 950 - - - - 2 950 4 541 4 536 0

Industrial/warehouse properties Hantverkaren 1 Botkyrka Norsborg Segersbyvägen 4-6 1974 2 915 6 788 - - - - 54 9 757 5 240 5 478 7 Segersby 1 Botkyrka Norsborg Kumla Gårdsväg 10 1976 - 12 019 - - - - - 12 019 6 990 6 990 0 Hemsta 9:6 Gävle Gävle Rynningsgatan 2 1984/1997 - 3 500 - - - - - 3 500 2 880 2 880 0 Sörby Urfjäll 36:3 Gävle Gävle Utmarksvägen 13 1979/1995 - 11 833 - - - - - 11 833 4 501 4 639 0 Veddesta 2:39 Järfälla Järfälla Bruttovägen 4 1972 178 3 371 - - - - - 3 549 1 816 1 815 0 Jakobsberg 22:14 Järfälla Järfälla Brantvägen 2 1962/1997 - 2 650 - - - - - 2 650 2 002 2 002 0 Generalen 7 Linköping Linköping Generalsgatan 4 1959/1976 2 087 2 979 - - - - - 5 066 2 027 2 323 13 1974, 1985, Glasberget 5 Linköping Linköping Roxtorpsgatan 13 - 8 400 - - - - - 8 400 4 328 4 328 0 1984 Rosersberg 11:37 Sigtuna Rosersberg Tallbacksgatan 13 1989/1999 - 11 394 - - - - - 11 394 8 386 8 388 0 Elektronen 1 Sollentuna Sollentuna Hovslagarevägen 5 1957/1987 261 2 052 - - - - - 2 313 1 754 1 758 0 Elektronen 4 Sollentuna Sollentuna Hovslagarevägen 3 A 1958/1992 855 2 792 - 146 - - - 3 793 2 845 3 372 15 Elementet 3 Sollentuna Sollentuna Bäckvägen 20 1963/1989 797 1 969 - - - - - 2 766 1 529 1 803 15 Domnarvet 40 Stockholm Spånga Gunnebogatan 34 1989 - 2 577 - - - - - 2 577 1 736 1 736 0 Isbrytaren 1 Södertälje Södertälje Hansavägen 6,8,10 1970 - 17 222 ------Kryssaren 8 Södertälje Södertälje Hansavägen 5-7, 11 1942 1 605 45 516 - - - - - 47 121 12 109 12 668 2 Bagaren 9 Tyresö Tyresö Radiovägen 7A 1984 - 2 220 - - - - - 2 220 1 376 1 460 4 Kopparen 8 Tyresö Tyresö Vintervägen 4 /2001 517 3 330 - - - - - 3 847 3 538 3 687 0 Upplands- Viby 19:53 Kungsängen Kraftvägen 30, 32 1992/1994 172 1 798 - - - - - 1 970 1 155 1 520 20 Bro Upplands- Viby 19:54 Kungsängen Kraftvägen 26, 28 1992 - 2 056 - - - - - 2 056 1 462 1 462 0 Bro Ösby 1:32 Värmdö Gustavsberg Varmdögatan 3 1950 234 650 - - - - - 884 1 139 1 139 0 Kungsleden 2005 59

Market Area East Retail properties Nollplanet 12 Eskilstuna Eskilstuna Mått Johanssons Väg 30 1990/1994 - - - 2 038 - - - 2 038 1 274 1 274 0 1962/1998, Valsverket 10 Stockholm Bromma Karlsbodavägen 2 - - - 18 150 - - - 18 150 10 954 10 895 0 1979/1997 Fjärdingen 35:1 Uppsala Uppsala S:t Eriks Torg 8 1929/1983 - - - 1 885 - - - 1 885 4 007 4 188 1

Care property Bylegård 37 Täby Täby Jarlabankes väg 48 1903/1993 - - 1 957 - - - - 1 957 2 903 2 933 0

School properties Södertull 33:1 Gävle Gävle Södra Kungsgatan 59 1940/1960 6 564 852 - 3 675 - - 1 487 12 578 7 988 8 834 4 Mekanikern 23 Linköping Linköping Gamla Tanneforsvägen 17 1926/1986 12 020 1 966 - - - - - 13 986 5 663 8 738 35 Järven 5 Norrköping Norrköping Bergslagsgatan 11 /2003 3 011 1 500 - - - - - 4 511 5 889 5 889 0 Sågverket 2 Södertälje Södertälje Korpuddsvägen 1-11 1985/1989 8 335 ------8 335 8 311 8 311 0 Husby 4:28 Österåker Åkersberga Företagsallén 8 1988 1 385 10 - - - - - 1 395 165 968 83

Other Hårstorp 3:110 Finspång Finspång Dunderbacksvägen 41 1974/1994-95 416 110 - - 18 432 - - 18 958 9 366 14 078 28 Husby 4:23 Österåker Åkersberga Svinningevägen 15, 17 ------Tuna 3:30, 3:182 Österåker Åkersberga Österskärsvägen 3 1994 - - 1 394 - 5 028 - - 6 422 7 506 7 628 1

Market Area South Office properties Släggan 9 & 10 Bromölla Bromölla Segervägen 2-4 1960 2 217 603 - - - - - 2 820 101 920 89 Läkaren 1 Eksjö Mariannelund Torget 1960 598 63 - 69 - - - 730 464 481 3 Klövern 1 Emmaboda Emmaboda Nygatan 16 1990 419 - - - 354 - - 773 572 618 5 Ölmestad 19:2 Gislaved Reftele Storgatan 52 1980 354 - - - 163 - - 517 386 386 0 Hillerstorp 4:18 Gnosjö Hillerstorp Storgatan 5 1976 266 - - - v- - - 266 373 373 0 Asien 20 Helsingborg Helsingborg Kvarnstensgatan 11 1989 1 280 1 268 - - - - - 2 548 1 212 1 719 30 Danmark 29 Helsingborg Helsingborg Hantverkaregatan 2 1972 7 310 242 - 1 610 1 912 - - 11 074 10 298 11 400 10 Kavalleristen 11 Helsingborg Helsingborg Bergavägen 1 1989 2 154 30 - - - - - 2 184 1 596 1 901 11 Springposten 3 Helsingborg Helsingborg Springpostgränden 3 1910/1990 2 127 ------2 127 603 2 083 66 Terminalen 1 Helsingborg Helsingborg Järnvägsgatan 1991 16 385 217 - 2 890 - - 116 19 608 43 655 46 691 4 Arkitekten 3 Hultsfred Hultsfred Bryggerigatan 7 1982 290 - - 87 - - - 377 343 343 0 Mörlunda 1:103 Hultsfred Mörlunda Stationsvägen 1 1967 230 - - 97 268 - - 595 294 354 9 Mården 7 Hässleholm Hässleholm Första Avenyn 14 A-D 1972/2001 4 534 131 - 1 356 - - 9 6 030 6 073 7 290 16 Vega 21 Lessebo Hovmantorp Centralplan 1960 233 - - 135 - - - 368 269 269 0 Företaget 8 Lund Lund Företagsvägen 28 1984 2 121 72 - - - - - 2 193 1 941 2 395 16 Verkstaden 5 Lund Lund Annedalsvägen 9 1973/1989 5 224 1 886 - - - - - 7 110 6 024 6 834 11 Brudbuketten 10 Malmö Malmö Russgatan 6 1988/1997 750 ------750 651 651 0 Brudbuketten 11 Malmö Malmö Russgatan 8 1988 1 344 ------1 344 800 1 199 30 Brudbuketten 13 Malmö Malmö Derbyvägen 20 1988 1 056 ------1 056 1 243 1 325 6 Brännaren 3 Malmö Malmö Industrigatan 13 1947 2 478 1 902 - - - - - 4 380 1 948 2 641 26 Brännaren 8 Malmö Malmö Agneslundsvägen 14 1947 5 375 20 - - - - - 5 395 4 945 5 413 7 Cementen 4 Malmö Malmö Barlastgatan 2 1982 1 673 1 414 - 650 - - - 3 737 1 545 2 009 23 Claus Mortensen 29 Malmö Malmö Baltzarsgatan 41 A 1950 4 580 335 - 1 588 - - - 6 503 5 857 7 752 18 Dadeln 23 Malmö Malmö Bertrandsgatan 3 1920 2 714 379 - - - - - 3 093 2 060 2 309 11 Davida 15 Malmö Malmö Amiralsgatan 13 A 1990 11 101 114 - 340 - - 1 11 556 15 152 18 870 20 Druvan 1 Malmö Malmö Engelbrektsgatan 7 1900 2 171 16 - 601 - - - 2 788 3 640 4 046 7 Flygbasen 4 Malmö Malmö Höjdrodergatan 17 1989 1 431 250 - - - - - 1 681 817 1 184 30 Flygledaren 1 Malmö Malmö Höjdrodergatan 14 1988 916 ------916 838 899 0 Fältsippan 8 Malmö Malmö Rimfrostgatan 1 1986/2000 - 3 625 - - - - - 3 625 2 436 2 939 14 Grönsakshandlaren 5 Malmö Malmö Jägersrovägen 80 1989-1991 3 003 ------3 003 3 074 3 074 0 Hammaren 5 Malmö Malmö Södra Bulltoftavägen 17 1966 3 188 1 111 - - - - - 4 299 3 789 3 789 0 Krukskärvan 11 Malmö Malmö Flintyxegatan 8 A 1986 1 739 933 - - - - - 2 672 1 434 1 790 6 Laxen 23 Malmö Malmö Södra Förstadsgatan 34 1971 6 762 61 - 625 - - - 7 448 10 378 12 158 11 Nejlikebuketten 6 Malmö Malmö Derbyvägen 4 1987 1 765 ------1 765 1 806 1 844 0 Oscar 16 Malmö Malmö Södergatan 3 1907 1 531 218 - 564 - - - 2 313 3 076 4 280 23 Piledal 27 Malmö Malmö Klågerupsvägen 259 1963/1978 362 ------362 443 443 0 Revolversvarven 12 Malmö Malmö Jägershillgatan 18 1987 9 926 ------9 926 9 637 10 417 5 Rosenbuketten 4 Malmö Malmö Höjagatan 1 1987/1990 4 322 - - - - - 1 098 5 420 3 060 4 623 34 Stjärnan 10 Malmö Malmö Engelbrektsgatan 6 1990 901 ------901 1 489 1 495 0 Svavlet 4 Malmö Malmö Emilstorpsgatan 24 1975 1 205 ------1 205 677 892 24 Sämjan 2 Malmö Malmö Sofielundsvägen 55 1929 6 859 2 560 - - - - - 9 419 3 345 4 699 21 Söderhavet 5 Malmö Malmö Elbegatan 5 1992 1 472 120 - - - - - 1 592 1 770 1 937 9 Söderhavet 6 Malmö Malmö Elbegatan 7 1938/1998 1 406 ------1 406 1 980 1 980 0 Söderport 8 Malmö Malmö Per Weijersgatan 4 1700 1 454 - - 325 - - - 1 779 1 744 2 679 34 Torshammaren 11 Malmö Malmö Hornyxegatan 6 1984 647 ------647 784 784 0 Vildanden 8 Malmö Malmö Geijersgatan 6-8 1967/1990/1993 8 529 32 - - - - - 8 561 2 585 8 081 66 Vildanden 9 Malmö Malmö Geijersgatan 2 1990 5 453 - - 325 - - - 5 778 5 108 6 307 18 von Conow 51 Malmö Malmö Kalendegatan 4 1884 1 481 - - 411 - - - 1 892 2 195 2 683 15 von Conow 54 Malmö Malmö Baltzarsgatan 31 1965 13 656 802 - 4 109 2 582 - 25 21 174 27 982 32 774 11 Venus 16 Nybro Nybro Nya Stationsgatan 14 1929/1955 2 473 63 - 798 493 - - 3 827 2 629 2 841 7 Banken 3 Nässjö Nässjö Nygatan 3 1970 3 370 - - 515 415 - - 4 300 3 375 3 502 3 Holje 6:191 Olofström Olofström Bredgatan 20 1958 1 103 - - 250 420 - - 1 773 1 335 1 412 5 Malghult 2:305 Oskarshamn Kristdala Vallgatan 2 1967 415 ------415 260 260 0 Lejonet 15 Oskarshamn Oskarshamn Flanaden 8 1967 3 934 204 - - - - 1 4 139 3 204 3 447 7 Lejonet 16 Oskarshamn Oskarshamn Flanaden 12 1969 1 409 23 - 1 002 - - - 2 434 2 381 2 576 7 Älvehult 1:195 Oskarshamn Påskallavik Kustvägen 53-55 1963 190 ------190 157 157 0 Sturup 1:160 Svedala Svedala Västergatan, Sturups flygplats 1972 2 365 ------2 365 1 061 1 393 20 Kräftan 7 Sävsjö Sävsjö Storgatan 1 1939/1972 1 483 - - 98 743 - - 2 324 1 582 1 765 8 Vrigstad 3:12 Sävsjö Vrigstad Jönköpingsvägen 2 1929/1960 832 - - - 385 - - 1 217 595 700 14 Örjan 19 Tingsryd Tingsryd Dackegatan 18 1971/1989 1 829 - - 439 986 - - 3 254 2 617 2 736 4 Oden 11 Tranås Tranås Nygatan 14 1979 2 795 - - - 318 - - 3 113 1 968 2 354 16 Lenhovda 5:27 Uppvidinge Lenhovda Storgatan 30 1973 240 ------240 214 214 0 Rådhuset 7 Uppvidinge Åseda Olofsgatan 6 1966 298 ------298 265 265 0 Gästgivaren 2 Vaggeryd Skillingaryd Storgatan 6 1953 811 - - - 251 - - 1 062 716 796 10 Kärnan 4 Vaggeryd Vaggeryd Järnvägsgatan 1 1974 833 ------833 581 581 0 Broby 52:2 Vetlanda Landsbro Sävsjövägen 3 1950/1966 396 - - 105 372 - - 873 482 551 8 Bredaryd 10:4 Värnamo Bredaryd Storgatan 14 1964 155 - - 245 189 - - 589 319 326 1 Elefanten 1 Växjö Växjö Rådjursvägen 2 1975 1 620 723 - 638 - - - 2 981 1 204 1 789 33 Nunnan 7 Växjö Växjö Bäckgatan 17 1979 7 100 223 - 4 116 150 - - 11 589 10 810 12 362 12 60 Kungsleden 2005 Assets: Properties

Market Area South Retirement homes Burlöv Arlöv 11:294 Burlöv Arlöv ARWIDIUS VÄG 50-66 1900/2000 - - 8 378 - 200 - - 8 578 12 882 12 882 0 Visby Pjäsen 12 Gotland Visby Pjäsgatan 12 2004 - - 6 600 - - - - 6 600 9 545 9 545 0 Norra Sjukhuset 1 Lund Lund Norra Gränsvägen 1 1975/1991 1 312 - 12 854 - - - - 14 166 12 593 12 842 0 Storskarven 12 Malmö Bunkeflostrand Norra vägen 7 1998 - - 1 900 - - - - 1 900 2 482 2 482 0 Storskarven 13 Malmö Bunkeflostrand Norra vägen 1 1996 - - 2 313 - - - - 2 313 2 815 2 815 0 Storskarven 9 Malmö Bunkeflostrand Brunandavägen 32 1993 - - 442 - - - - 442 492 492 0 Koljan 10 Malmö Limhamn Tegnérgatan 68 1995 - - 355 - - - - 355 761 761 0 Nattskärran 7 Malmö Limhamn Järnvägsgatan 29 1993 - - 1 918 - - - - 1 918 163 1 875 80 Slätvaren 40 och 51 Malmö Limhamn Sarvgränd 2C 1910/1998 - - 450 - - - - 450 728 728 0 Sädesärlan 6 Malmö Limhamn Linnégatan 18 1929/60/2000 - - 472 305 - - - 777 729 729 0 Anten 3 Malmö Malmö Eddagatan 1 1989 - - 3 040 - - - - 3 040 3 446 3 446 0 Cykeln 12 Malmö Malmö Palmgatan 17 2000 - - 2 980 - - - - 2 980 3 479 3 479 0 Idrotten 12 Malmö Malmö Hasselgatan 24 1993 - - 540 - - - - 540 409 409 0 Nicktisteln 2 Malmö Malmö Ernst Jakobssons gata 7 1993 - - 2 250 - - - - 2 250 2 834 2 834 0 Rosenbuketten 8 Malmö Malmö Höjagatan 21 1989/1997 919 - 547 - - - - 1 466 2 411 2 411 0 Torsten 12 Malmö Malmö Major Nilssonsgatan 13 1942 - - 2 400 - - - - 2 400 2 737 2 738 0 Tväråkern 16 Malmö Malmö Marieholmsvägen 3 1996 - - 672 - - - - 672 782 782 0 Solskiftet 1 Malmö Oxie Oshögavägen 2 1976 - - 6 285 - - - - 6 285 5 966 5 966 0 Stengodset 1 Malmö Oxie Stengodsvägen 4 1999 - - 1 850 - - - - 1 850 2 362 2 362 0

Industrial/warehouse properties Tågarp 20:81 Burlöv Arlöv Lommavägen 39 1929/1984 - 26 515 - - - - - 26 515 8 266 8 432 2 Dolken 3 Helsingborg Helsingborg Mörsaregatan 12 1985/1990 - 3 845 - - - - - 3 845 2 830 2 830 0 Jupiter 12 Helsingborg Helsingborg Grenadjärsgatan 8 1978 432 1 027 - - - - - 1 459 679 969 26 Ädelmetallen 14 Jönköping Jönköping Grossistgatan 5 1987 654 861 - - - - - 1 515 806 817 1 Övergången 8 Jönköping Jönköping Syrgasvägen 4 1950/1960 1 051 2 554 - - - - - 3 605 1 207 1 407 14 Överstycket 25 Jönköping Jönköping Maskingatan 2 1981 474 7 367 - - - - - 7 841 1 812 2 347 23 Överstycket 26 Jönköping Jönköping Soldattorpsgatan 15 1963, 1969 - 10 489 - - - - - 10 489 2 391 2 391 0 Cementen 4 Kristianstad Kristianstad Industrigatan 11 1989/1991 - 900 - - - - - 900 431 431 0 Plattan 4 Kristianstad Kristianstad Isolatorvägen 5 1991 - 1 328 - - - - - 1 328 522 522 0 Ventilen 10 Kristianstad Kristianstad Mossvägen 6 1980 - 900 - - - - - 900 469 469 0 Kvartsen 6 Lund Lund Skiffervägen 25 1988 - 4 217 - - - - - 4 217 3 681 3 681 0 Oket 1 Lund Lund Nöbbelövsvägen 100 1991 126 3 365 - - - - - 3 491 1 685 2 174 22 Bränslet 7 Malmö Malmö Koksgatan 6 - 12 1972, 1976 - 20 059 - - - - - 20 059 6 282 6 282 0 Böttö 5 Malmö Malmö Kosterögatan 5 1964/1993 3 915 7 528 - - - - - 11 443 6 751 6 925 1 Eggegrund 6 Malmö Malmö Hemsögatan 10 1983 391 7 523 - - - - - 7 914 2 678 3 921 31 Flintkärnan 2 Malmö Malmö Agnesfridsvägen 194 1972 437 4 104 - 184 - - - 4 725 1 683 2 334 16 Holmögadd 3 Malmö Malmö Bjurögatan 26 1969 - 11 482 - - - - - 11 482 4 383 4 383 0 Holmögadd 4 Malmö Malmö Bjurögatan 28 1969 - 14 165 - - - - - 14 165 6 518 6 518 0 Järnet 1 Malmö Malmö Spadegatan 1 1942, 1962 - 1 196 - - - - - 1 196 95 95 0 Krukskärvan 3 Malmö Malmö Flintyxegatan 10 1979 - 7 585 - - - - - 7 585 4 126 4 138 0 Lerkärlet 3 Malmö Malmö Flintyxegatan 2 1984/1987 - 1 070 - - - - - 1 070 656 656 0 Sidorodret 3 Malmö Malmö Höjdrodergatan 2 1976/1987 - 1 057 - - - - - 1 057 515 515 0 Skjutsstallslyckan 23 Malmö Malmö Lundavägen 56 1946 1 044 6 701 391 509 - - 397 9 042 3 302 4 277 18 Smörbollen 52 Malmö Malmö Pinjevägen 5 1977 - 2 629 - - - - - 2 629 609 1 032 38 Speditionen 1 Malmö Malmö Lodgatan 19-23 1992 894 4 125 - - - - - 5 019 2 533 2 631 7 Storbådan 2 Malmö Malmö Hemsögatan 22 1973 186 2 962 - - - - 100 3 248 1 218 1 311 7 Storbådan 4 Malmö Malmö Hemsögatan 18 1973 - 2 590 - - - - - 2 590 1 263 1 263 0 Storbådan 5 Malmö Malmö Hemsögatan 14-16 1973 580 12 224 - - - - - 12 804 5 652 5 806 3 Svinbådan 4 Malmö Malmö Brännögatan 9 1961 50 1 516 - - - - - 1 566 217 757 71 Svinbådan 5 Malmö Malmö Tärnögatan 3 1963 - 2 639 - - - - - 2 639 955 955 0 1937, 1939, Stålet 2 Malmö Malmö Saknas 1943, 1956, - 14 898 - - - - - 14 898 2 238 2 238 0 1963 Värmet 3 Malmö Malmö Saknas 1966, 1967 - 6 283 - - - - - 6 283 2 162 2 162 0

Retail properties Bjärred 14:11 Lomma Bjärred Vikingavägen 1 1971/1991 2 037 - - 3 002 - - 92 5 131 5 857 6 034 3 Armringen 2 Malmö Malmö Agnesfridsvägen 190 1975 480 518 - 3 869 - - - 4 867 2 875 3 027 5 Smörbollen 12 Malmö Malmö Cypressvägen 12 1970 257 993 - 2 528 - - - 3 778 1 588 2 244 23 Köpmannen 2/ Nybro Nybro Jutarnas Väg 1 1964 300 786 - 1 858 - - - 2 944 1 773 1 878 6 Trädgårdsmästaren 8 Köpmannen 3 Nybro Nybro Storgatan 2 1992 1 075 74 - 2 049 - - - 3 198 1 721 2 360 24 Lönnen 12 Nybro Nybro Torget 1 1975 690 147 - 5 294 - - - 6 131 3 101 3 466 2 Nederled 2:63 Värnamo Rydaholm Alvestavägen 15 1934/1976 - - - 775 - - - 775 546 546 0 Ljungadahl 2 Växjö Växjö Ljungadalsgatan 6 1966/1978 528 - - 2 126 - - - 2 654 1 516 1 780 15 Ljungadal 5 Växjö Växjö Mörners Väg 112 1966/1971 - - - 3 082 - - - 3 082 1 386 1 442 0

School properties Gullriset 4 Malmö Malmö Monicavägen 18-22 1945 648 ------648 665 665 0 Kullen 5 Malmö Malmö Sturkögatan 5 1962/1981 4 870 ------4 870 6 533 6 533 0

Other Gårö 1:541 o 1:542 Gnosjö Gnosjö Gårö ------Flahult 2:348 Jönköping Jönköping Örnabergsvägen 13 ------Hamnen 22:2 Malmö Malmö Jörgen Kocksgatan 3 1952/1964 3 033 382 - - - 4 361 - 7 776 4 606 6 088 20 Krukskärvan 6 Malmö Malmö Flintyxegatan 6 ------Limhamn 152:371 Malmö Malmö Saknas ------Apollo 6 Nybro Nybro Fabriksgatan 2 1955 474 - - 251 731 - - 1 456 1 059 1 094 4 Sjöafall 1:85, 1:180 Nässjö Fredriksdal Cirkelvägen 30 ------Malmbäck 2:118,115 Nässjö Fredriksdal Saknas ------Ljungsåsa 16:7 Växjö Lammhult Köpmannagatan 5 1969 337 - - - 419 - - 756 488 521 4 Kungsleden 2005 61

Market Area West Offices Färgelanda Prästgård Färgelanda Färgelanda Centrumvägen 6 1977 286 ------286 245 249 0 1:349 Angered 100:1 Angered Rävebergsvägen 1982/1989 26 126 ------26 126 17 884 20 682 14 Bagaregården 16:9 Gothenburg Byfogdegatan 6 1949/1977 3 996 ------3 996 2 328 2 861 18 Gamlestaden 2:5 Gothenburg Artillerigatan 17 1910-talet 23 497 699 - 90 - - 108 24 394 15 373 18 622 17 Gamlestaden 2:8 Gothenburg Rullaregatan 7 1929/1966 20 882 ------20 882 16 717 16 717 0 Kindbogården 1:111 Härryda Mölnlycke Metallvägen 5 1985 1 584 1 595 - - - - - 3 179 1 739 1 739 0 Södra Hamnen 13:3 Lysekil Lysekil Rosviksgatan 5 1959/1983 1 069 - - - 790 - - 1 859 1 707 1 778 3 Köpmannen 15, 16 Mark Kinna Boråsvägen 32 1943/1968 732 - - 324 206 - - 1 262 1 038 1 093 5 Mekanikern 1 Mark Kinna Boråsvägen 50 1957/1975 2 150 - - 164 - - - 2 314 1 806 1 806 0 Krokstads Sandåker 1:46 Munkedal Hedekas Centrum 1973 309 - - 118 288 - - 715 335 391 12 Snödroppen 2 Mölndal Mölndal Flöjelbergsgatan 1 1962/1967 25 270 2 912 - 615 - - - 28 797 28 738 33 573 15 Tulpanen 3 Mölndal Mölndal Bergfotsgatan 7 1960 52 407 1 838 - - - - - 54 245 50 594 53 993 6 Munkeröd 1:61 Stenungsund Stenungsund Munkerödsvägen 4 1990 2 047 422 - - - - - 2 469 1 384 1 390 0 Ekoxen 2 Trollhättan Trollhättan Sylte Center 1973 493 - - 257 - - - 750 258 531 37 Barken 6 Uddevalla Uddevalla Junogatan 9 1990 3 674 ------3 674 3 770 4 151 9 Bastionen 28 Uddevalla Uddevalla Bastionesgatan 40 1960/1989 7 006 ------7 006 5 630 6 047 5 Solbacken 10 Uddevalla Uddevalla Silentzvägen 6 1990 1 790 ------1 790 1 630 1 724 3 Misteln 24 Vänersborg Vänersborg Drottninggatan 10 1929 2 381 - - - 592 - - 2 973 2 246 2 537 11 Resedan 16 Vänersborg Vänersborg Kungsgatan 7 1965 1 136 90 - 1 189 - - - 2 415 1 353 1 735 22 Vänersborg Vänersborg Retirement homes Vänersborg Vänersborg Heden 28:2 Gothenburg Berzeliigatan 11 1993 - - 1 840 - - - - 1 840 3 434 3 424 0 Krokslätt 147:2 Gothenburg Fridkullagatan 18 G 1996 150 - 3 124 - - - - 3 274 5 072 5 068 0 1956-62/1992- Backa 243:52 Hisings backa S:t Jörgens väg 22 - - 4 441 - 714 - - 5 155 4 876 5 345 9 93 Fiskebäck 8:7 Västra frölunda Hälleflundregatan 20 1999 71 - 6 444 - 1 270 - - 7 785 8 201 8 342 2 Näset 130:1 Västra frölunda Bjölavägen 1 2000 - - 3 701 - - - - 3 701 4 964 4 964 0 Halmstad 10:35 Halmstad Halmstad Frennarpsvägen 131 2004 - - 3 000 - - - - 3 000 5 706 5 706 0 Fallström 14 Mölndal Mölndal Fallströmsgatan 1-5, 1997 89 - 1 300 - - - - 1 389 2 169 2 169 0 Fjällräven 15 Uddevalla Uddevalla Myråsvägen 6A-F 1972 517 - 3 631 - - - - 4 148 3 513 3 513 0 Rosenhäll 1 Uddevalla Uddevalla Österled 2 1972 8 240 80 7 757 119 - - - 16 196 13 386 13 634 2

Industrial/warehouse properties Strandbygget 1 Falkenberg Falkenberg Kvekatorpsvägen 26 1970 - 4 720 - - - - - 4 720 1 436 1 436 0 Gamlestaden 740:130 Gothenburg Gamlestadsvägen 8 1947/1985 - 3 151 - - - - - 3 151 2 122 2 122 0 Sävenäs 170:9 Gothenburg Von Utfallsgatan 12 1929/1955 650 7 846 - - - - - 8 496 2 335 2 618 10 1960/1997, Backa 21:8 Hisings backa Exportgatan 19-21 - 16 908 - - - - - 16 908 5 063 5 063 0 1972 1983, 1986, Backa 96:2 Hisings backa Exportgatan 23 - 6 634 - - - - - 6 634 1 743 1 743 0 1990 Kärra 11:110 Hisings backa Ellesbovägen 101 1968 - 7 822 - - - - - 7 822 2 663 2 663 0 Fiskebäck 8:8 Västra frölunda Hälleflundregatan 18 1976 1 719 ------1 719 1 101 1 122 0 Försäljaren 9 Kungälv Kungälv Filaregatan 17-19 1974 288 7 900 - 337 - - - 8 525 4 020 4 214 3 Ulseröd 1:212 Lysekil Lysekil Lysekils Industrihotell 1975 - 9 456 - - - - - 9 456 1 749 2 426 21 Anisen 2 Mölndal Mölndal Johannefredsgatan 2 1991/1999 - 5 500 - - - - - 5 500 4 326 4 526 0 Gasmätaren 2 Mölndal Mölndal Argongatan 9 1982/1987 2 589 9 733 - 1 714 - - 30 14 066 10 357 10 357 0 Lexby 11:14 Partille Partille Laxfiskevägen 4 1956/1981 4 312 15 189 - - - - - 19 501 5 220 7 256 28 Tanum Ryland 3:6 Tanum Tanumshede Storemyrsvägen 1972/1987 - 19 016 - - - - - 19 016 8 474 8 474 0 Drivhjulet 3 Trollhättan Trollhättan Kardanvägen 65 1989 - 1 680 - - - - - 1 680 778 778 0 Hjulet 6 Trollhättan Trollhättan Kardanvägen 12 B 1980/1984 - - - 1 710 - - - 1 710 904 904 0 Hörnstenen 5 Trollhättan Trollhättan Installatörsvägen 1-3 1978/1989 - 1 664 - - - - - 1 664 505 767 34 Kugghjulet 2 Trollhättan Trollhättan Kardanvägen 66 1991 - 1 500 - - - - - 1 500 544 640 0 Kuröd 4:86 Uddevalla Uddevalla Brunnemyrsvägen 4 1976/1990 - 5 290 - - - - - 5 290 892 2 095 65 Fregatten 21 Vänersborg Vänersborg Industrigatan 2 1945/1967 - 6 677 - - - - - 6 677 2 143 2 143 0

Retail properties Köpmannen 30 Tibro Tibro Centrumgatan 6 1973 580 24 - 1 491 - - - 2 095 480 1 197 60 Ekoxen 1 Trollhättan Trollhättan Sylte Center 1970 1 119 160 - 2 241 - - - 3 520 2 309 2 703 13 Kuröds Tegar 2 Uddevalla Uddevalla Kurödsvägen 27 1978 - - - 1 878 - - - 1 878 689 689 0 Källeberg 7:18 Vänersborg Brålanda Storgatan 21 1965 386 - - 660 - - - 1 046 364 457 19 Timjan 4 Vänersborg Vänersborg Edsgatan 18 1965 173 - - 1 383 - - - 1 556 722 1 066 32

Other Baggatomten 6:1 Härryda Hindås Hotellvägen, 1937 - - - - - 4 539 - 4 539 3 795 3 795 0 Torreby 3:54 Munkedal Munkedal Torreby ------Köpmannen 26 Tibro Tibro Stora Torget 8 1986 1 034 147 - 742 1 346 - - 3 268 2 520 2 693 6 Tranemo 1:29 Tranemo Tranemo Kvarngatan ------Ekoxen 3 Trollhättan Trollhättan Sytlte Center ------Ekoxen 4 Trollhättan Trollhättan Sylte Center ------Epidemisjukhuset 1 Uddevalla Uddevalla Hovslagaregatan 1 ------5 246 5 246 1 681 2 293 27 62 Kungsleden 2005 Assets: Properties

Market Area Central Office properties Verdandi 9 Borlänge Borlänge Borganäsvägen 42-44 1929/1987 1 374 182 - 1 282 195 - - 3 032 1 227 1 918 36 Smedjan 5 Forshaga Forshaga Tryckerigatan 7 1990 788 350 - - - - - 1 138 461 517 11 Sköllersta-Kärr 1:34 Hallsberg Pålsboda Köpmangatan 3 1978 635 230 - - - - - 865 353 376 6 Blåsten 4 Karlstad Karlstad Stormgatan 8 1975/1979 2 407 ------2 407 1 349 1 349 0 Brisen 4 Karlstad Karlstad Sunnanvindsgatan 8 1973 800 ------800 658 660 0 Bromsen 1, 13 Karlstad Karlstad Blockgatan 6 1967/1991 1 218 250 - 372 - - - 1 840 940 940 0 Fjädern 16 Karlstad Karlstad Bromsgatan 4 1991 2 920 - - 1 536 - - - 4 456 2 927 2 984 2 Sågen 7 Karlstad Karlstad Lantvärnsgatan 12 1940/1975 1 834 1 910 - - - - - 3 744 1 107 1 604 31 Sågen 9 Karlstad Karlstad Lantvärnsgatan 8 1950/1973 1 093 1 462 - - - - - 2 555 877 906 2 Tången 15 Karlstad Karlstad Gjuterigatan 28 1991/1995 984 - - 990 - - - 1 974 812 1 038 21 Svanen 17 Ludvika Ludvika Carlavägen 21 1988 2 653 363 - - - - - 3 015 2 311 2 424 4 Stranden 20:4 Mora Mora Hantverkaregatan 14 1989 2 479 ------2 479 1 720 1 720 0 Klio 10 Västerås Västerås Norra Källgatan 17 1984/1998 2 472 49 - 178 - - - 2 699 2 524 2 776 7

Retirement homes Hanen 4 Västerås Västerås Hagalidsvägen 2 1964/1996 - - 2 740 - - - - 2 740 3 703 3 703 0 Vedbo 61 Västerås Västerås Erikslundsgatan/Hörntorpsv. 20 1977/1999 - - 7 200 - - - - 7 200 7 113 7 453 0

Industrial/warehouse properties Hammaren 8 Borlänge Borlänge Lustbergsvägen 6 1974/1995 - 4 175 - - - - - 4 175 979 979 0 1960, Smedjan 3 Borlänge Borlänge Gesällgatan 1, 3 - 6 046 - - - - - 6 046 571 571 0 1963/1988 Nedre Gruvriset 33:156 Falun Falun Krontallsvägen 1, 3, 16 2004 ------5 153 5 153 4 208 4 208 0 Smedjan 1 Forshaga Forshaga Framgårdsvägen 2 1973 303 - - - - - 508 811 555 555 0 Fjädern 14 Karlstad Karlstad Kolvgatan 1 1971 982 31 - 3 032 - - - 4 045 2 113 2 590 9 Kulingen 4 Karlstad Karlstad Östanvindsgatan 17 1976 - 8 425 - 450 - - - 8 875 1 851 2 597 25 Oxen 17 Kumla Kumla Västra Drottninggatan 38 - - 6 645 - - - - - 6 645 1 331 1 331 0 Terminalvägen Finnslätten Finnslätten 5 Västerås Västerås 1959/1976-77 - 50 184 - - - - - 50 184 29 272 33 802 6 Byggnad nr Kryssen 4 Västerås Västerås Regattagatan 7-31 1929-1963 1 442 11 566 - 215 - - - 13 223 4 636 6 914 8 Regattan 46 Västerås Västerås Regattagatan 8-28 1929-1964 672 11 763 - 115 - - - 12 550 5 398 5 549 2

Retail properties Gräsroten 1 Karlstad Karlstad Gräsdalsgatan 1 1987 - - - 4 961 - - - 4 961 2 151 2 151 0 Härden 3 Karlstad Karlstad Sågverksgatan 5 1952 - 519 - 501 - - - 1 020 531 531 0 Mercurius 15 Karlstad Karlstad Tingvallagatan 9 1992 1 469 8 - 4 430 1 111 - - 7 018 7 917 7 964 1 Stolpen 6 Karlstad Karlstad Ventilgatan 1 1991 - 50 - 510 - - - 560 597 603 0

School properties Kryssen 3 Västerås Västerås Regattagatan 33-53 1929-1962 5 130 1 263 - - - - - 6 393 3 508 3 711 5

Other Harneskmakaren 3 & 10 Arboga Arboga Järntorgsgatan 4 1953/1972 458 36 - 462 702 - - 1 658 808 1 113 27 Mejeriet 17 Filipstad Filipstad ------Mejeriet 18 Filipstad Filipstad ------

Market Area North Retirement homes Sköle 1:17 Sundsvall Matfors Skölevägen 15 1983 - - 6 006 - - - - 6 006 5 753 5 753 0 Skörden 3 Sundsvall Sundsvall Axvägen 7 - 9 1975 - - 8 026 - - - - 8 026 6 102 6 102 0

Industrial/warehouse properties 1974/1995, Rävsund 1:338 Sundsvall Kvissleby Pionvägen 5 1987, 1990, - 14 249 - - - - - 14 249 2 114 2 114 0 1995/1999

School property Roten 6 Sundsvall Sundsvall Tallrotsgatan 2 - 3 000 ------3 000 3 819 3 819 0 Kungsleden 2005 63 Divested properties

Year of Lettable floor-space, sq.m. construction/ Industrial/ Retirement Total Name Municipality Locality Address Offices warehouse homes Retail Residential Hotel Other floor-space conversion

Market Area East Office properties Gnistan 7 Bollnäs Bollnäs Långgatan 7 1972 1 160 - - 888 - - - 2 048 Sigtuna 2:171 Sigtuna Sigtuna Väringavägen 11 1965/1994 1 265 - - - 90 - - 1 355 Göta Ark 18 Stockholm Stockholm Medborgarplatsen 25 1984 17 811 848 - - - - - 18 659 Stenskärven 8 Stockholm Vällingby Siktgatan 2 1963, -71, -80, -87 7 946 1 746 - - - - - 9 692

Industrial/warehouse properties Brynäs 125:1 Gävle Gävle Södra Skeppsbron 21 1984 - 700 - - - - - 700 Brynäs 125:2 Gävle Gävle Södra Skeppsbron 23 1960 - 297 - - - - - 297 Magasinet 3 Södertälje Järna Tuna Industriväg 35 1970 - 21 375 - - - - - 21 375

Retail properties Torlunda 1:276 Eskilstuna Eskilstuna Folkestaleden 40 2000 - - - 13 216 - - - 13 216 Brf Midas 5 Stockholm Stockholm Lilla Nygatan 16 1929/1979 - 420 - 766 - - - 1 186 Vagnhallen 15 Stockholm Vällingby Jämtlandsgatan 153 1953 550 1 025 - 6 850 - - - 8 425 Viby 19:13 Upplands-Bro Kungsängen Energivägen 3 1981 - 2 080 - - - - - 2 080

Other Centrum 13:1 Enköping Enköping Kungsg 26/Källg 11 1977/1995 - 337 - 804 - 1 910 122 3 173

Market Area South Office properties Apoteket 2 Eksjö Eksjö Nybrogatan 4 1929/1963 797 - - 206 749 - - 1 752 Hägelåkra 3:48 Hultsfred Målilla Vetlandavägen 2 a 1967 190 ------190 Åldermannen 24 Kalmar Kalmar Storgatan 25 1970 4 300 - - 227 - - - 4 527 Kamelen 14 Malmö Malmö Storgatan 43 1934 13 500 ------13 500 Masugnen 22 Malmö Malmö Annelundsgatan 59 1948 1 064 681 - - - - 625 2 370 Söderport 7 Malmö Malmö Gustav Adolfs Torg 43 1885 927 24 - 558 556 - - 2 065 Söderport 9 Malmö Malmö Gustav Adolfs Torg 47 1910 1 697 6 - 397 - - - 2 100 Herkules 34 Trelleborg Trelleborg C B Friisgatan 4 1970 4 041 30 - - 341 - - 4 412

Retirement homes Bardisanen 14 Malmö Malmö Norra Bulltoftav 61–63 1993 - - 822 - - - - 822 Sånekulla 16 Malmö Malmö Limhamnsvägen 74 1990/1995 - - 2 240 - - - - 2 240 Vannagården 2 Malmö Malmö Husie Kyrkoväg 1 1992 - - 741 - - - - 741

Industrial/warehouse properties Strömma 1:1 Karlshamn Karlshamn Strömmavägen 1929/1950 5 082 12 070 - - - - 312 17 464 Haken 6 Malmö Malmö Vinkelgatan 15 1970 - 8 620 - - - - - 8 620

Retail properties Bokhandeln 2 Eksjö Eksjö Nybrogatan 6 1929 - - - 809 683 - - 1 492 Tranan 7 Vimmerby Vimmerby Stora Torget 2-4 1962 - - 2 606 205 - 216 3 027

Other Gladan 1 Vimmerby Vimmerby Drottninggatan 20 1986 - - 374 1 002 - - 1 376 Lärkan 3 Vimmerby Vimmerby Sevedeg 38, Storg 37 1957 73 - 1 783 2 618 - - 4 474 Brukspatronen 1 och 7 Västervik Västervik Smugglaregänd 1910/1974 60 - 272 1 879 - 9 2 220 Flaggan 17 Västervik Västervik Hallströmsgatan 42-50 1962 - - - 2 900 - 158 3 058 Lärkan 12 Västervik Västervik Esplanaden 19 1969 - - - 1 623 - 31 1 654 Skäran 2 och 3 Västervik Västervik Albert T v 55-61,65 1956 - - 558 7 110 - 50 7 718 Yxan 1 Västervik Västervik Perugatan 35-47 1969 - - - 14 423 - 92 14 515

Market Area West Office properties Landvetter 4:36 Härryda Landvetter Brattåsvägen 5-8 1978/1988 2 020 386 - 1 098 - - - 3 504 Landvetter 4:37 Härryda Landvetter Brattåsvägen 14 1977/1999 430 - - 268 563 - - 1 261 Vässje 1:108 Munkedal Hällevadsholm N Bohusvägen 2 A 1975 230 - - 128 - - - 358 Annestorp 24:5 Mölndal Lindome Almåsgången 5 1974/1991 2 506 - - 325 - - - 2 831 Lindome 2:43 Mölndal Lindome Almåsgången 1 1974 814 - - 653 - - - 1 467

Retail properties Angered 94:2 Gothenburg Angered Angered Centrum 1978 20 308 1 335 - 14 627 - - 3 439 39 709 Backa 171:4 Gothenburg Gothenburg Backavägen 3 1990 2 969 180 - 4 589 - - - 7 738 Hindås 1:450 Härryda Hindås Hindås Stationsv 41-47 1978/1996 783 - - 840 - - - 1 623 Floda 3:833 Lerum Floda Rurik Holms väg 1 A 1960/1991 2 695 - 769 4 168 3 847 - - 11 479 Annestorp 24:2 Mölndal Lindome Almåsgången 2 1974/1987 - 19 - 3 443 - - - 3 462

Market Area Central Office properties Duvan 3 Karlstad Karlstad Järnvägsgatan 6 1987 2 455 - - 1 963 - - 15 4 433 Kanoten 7 Karlstad Karlstad Lagergrens Gata 7 1988, 1989, 1996 9 291 144 - - - - 731 10 166 Klas 11 Västerås Västerås Hantverkargatan 5 1955/1987 5 434 818 - 2 962 - - - 9 214

Retail properties Duvan 13 Karlstad Karlstad Järnvägsgatan 2 1986, 1987, 2001 3 271 75 - 5 136 - - 122 8 604 Duvan 5 Karlstad Karlstad Drottninggatan 21 1990, 2003 2 354 66 - 2 655 - - - 5 075 Höken 11 Karlstad Karlstad Drottninggatan 13 1963, 1982, 1988 957 100 - 5 718 277 506 212 7 770

Other Energin 6 Västerås Västerås Omformargatan 22 ------

Market Area North Office properties Knuten 4 Härjedalen Sveg Fjällvägen 4 1991 350 - - 285 298 - - 933 Knuten 6 Härjedalen Sveg Kyrkogatan 20 1920 576 - - - 103 - - 679

Retail properties Firman 2 Skellefteå Skellefteå - 2005 - - - 8 223 - - - 8 223 Varulagret Skellefteå Skellefteå - 2005 ------Thor 6 Umeå Umeå Storgatan 55 1972 631 - - 2 184 - - - 2 815 64 Kungsleden 2005 Acquired properties

Market Area East Office properties Alderholmen 18:1 Gävle Gävle Hamntorget 6, 2:a Magasinsg 1 - 1 999 639 - - - - - 2 638 1 219 1 474 17 1:a Magasinsg.3/2:a Alderholmen 19:3 Gävle Gävle 1929 789 ------789 513 542 0 Magasinsg.4, Järnvägsgatan 3 Alderholmen 24:3 Gävle Gävle Norra Skeppsbron 5 - 1 001 154 - - - - - 1 155 526 771 29 Hemlingby 61:1 Gävle Gävle Kryddstigen 24 - 1 343 679 - 348 - - - 2 370 851 1 278 33 Norr 23:5 Gävle Gävle N Rådmansg 8 A-C, Nyg 22 - 2 479 40 - 2 167 1 378 - - 6 064 4 765 5 714 16 Norr 26:1 Gävle Gävle Hattmakargatan 8, Nygatan 34 1891/1985 1 044 - - - 78 - 234 1 356 876 1 077 14 Norr 26:3 Gävle Gävle Drottningg 33, Hattmakarg 6 1992 3 007 ------3 007 1 559 2 773 44 Norr 44:1 Gävle Gävle Hattmakarg 2, Kyrkog 28 1901/1983 4 158 281 - 533 - - - 4 972 2 597 3 960 34 Näringen 15:6 Gävle Gävle Beckasinv 16, Kanalv 11 - 2 269 1 432 - 408 - - - 4 109 2 191 2 377 4 Sätra 107:7 Gävle Gävle Bromsargatan 3 1991 2 570 ------2 570 1 609 2 059 22 Öster 10:1 Gävle Gävle Östra Hantverkargatan 62 - 1 279 ------1 279 1 493 1 493 0 Bäckgården 8 Huddinge Huddinge Vårby Allé 8,10,14-22 1974 3 394 1 681 - 2 143 - - 1 005 8 223 6 946 7 414 3 Bägaren 3 Norrköping Norrköping Luntgatan 28 - 4 066 ------4 066 1 697 3 458 51 Bägaren 5 Norrköping Norrköping Norra Promenaden 135 - 5 548 - - - - - 10 5 558 5 281 5 281 0 Drottningg 11-17, Hospitalsg 5, Lokatten 14 Norrköping Norrköping - 3 056 1 037 - - 355 - - 4 448 3 254 3 510 7 Trädgårdsg 6A, 8 Pelikanen 24 Norrköping Norrköping Drottninggatan 19, 21 1909/1984 926 - - 425 - - 40 1 391 676 928 27 Skeppet 10 Norrköping Norrköping Generalsg 12, Hospitalsg 30 1977 8 233 - - 86 - - 27 8 346 8 472 8 490 0 Ritmallen 2 Sollentuna Sollentuna Kung Hans Väg 6-8 1980 6 328 - - - - - 1 210 7 538 6 734 6 734 0 Tackan 9 Sollentuna Sollentuna - 1971/1999 6 329 ------6 329 6 799 7 749 0 Träbocken 1 Sollentuna Sollentuna Sofielundsvägen 2-6 1990 4 472 - - - 753 - - 5 225 7 148 7 451 4 Bang 11-19, Storg 20-26, Puman 3 och 5 Solna Solna 1975/1985 3 622 309 - - 2 841 - 740 7 512 5 046 6 788 22 Järnvägsg 4 Ugnen 5 Solna Solna Industrivägen 7 1980 3 671 ------3 671 4 290 4 352 1 Blåsåsen 5:3 Söderhamn Söderhamn Kungsgatan 75 1988 417 ------417 0 255 100 Granen 3 Söderhamn Söderhamn Köpmang 10, N:a Hamng 9 1992 1 657 - - 1 140 1 176 - 600 4 573 3 364 3 764 11 Skomakaren 10 Söderhamn Söderhamn Norralagatan 4 1984 414 - - 400 - - - 814 204 385 47

Retirement homes Ruddammen 29 Stockholm Stockholm Ruddammsbacken 28 - - - 5 188 - - - - 5 188 6 386 6 386 0 Marknaden 1 Täby Täby Attundafältet 16 A-B - 5 557 - 9 730 125 - - - 15 412 16 458 16 650 0

Industrial/warehouse properties Ren 30:473 Bollnäs Bollnäs Renslyckan 1 1991 - 1 455 - - - - - 1 455 781 781 0 Tegelängen 1 Botkyrka Botkyrka Tegelängsvägen 10 - - 1 356 - - - - - 1 356 828 828 0 Tumba 7:150 Botkyrka Botkyrka Hans Stahles väg 1961/64 31 455 38 984 - - - - 7 491 77 930 35 416 45 998 23 Reidmar 7 Danderyd Djursholm Fafnerstigen 10 1942/1968 721 1 204 - 228 - - 60 2 213 1 319 1 319 0 Forsbacka 13:49 Gävle Forsbacka Margretehillsvägen 4 ------66 66 0 Brynäs 125:1 Gävle Gävle Södra Skeppsbron 21 1984 - 700 - - - - - 700 389 389 0 Brynäs 125:2 Gävle Gävle Södra Skeppsbron 23 1960 - 297 - - - - - 297 98 98 0 Lillhagen 2:11 Gävle Gävle Korsnäsvägen 172 - - 305 - - - - - 305 294 294 0 Näringen 3:2 Gävle Gävle Strömsbrovägen 35 - - 2 851 - - - - - 2 851 1 528 1 528 0 Näringen 4:3 Gävle Gävle - 1960-tal 700 10 085 - - - - 80 10 865 3 819 3 819 0 Näringen 6:4 Gävle Gävle Lötängsgatan 13 1963/1985 470 1 038 - - - - - 1 508 896 896 0 Näringen 8:5 Gävle Gävle Strömsbrovägen 13, 19 1965 - 5 462 - - - - - 5 462 2 245 2 345 0 Näringen 11:3 Gävle Gävle Strömsbrovägen 18 1978/1982 722 3 225 - - - - - 3 947 1 668 1 851 10 Näringen 12:1 Gävle Gävle Snäppv 2, Strömsbrov 16 1956/1980 118 583 - - - - - 701 195 289 32 Näringen 12:2 Gävle Gävle Strömsbrovägen 12 - - 592 - - - - - 592 361 385 0 Näringen 12:6 Gävle Gävle Beckasinvägen 3 - 535 1 227 - - - - - 1 762 173 488 65 Sörby Urfjäll 27:2 Gävle Gävle Rälsgatan 2-4 1972 682 4 156 - - - - - 4 838 2 577 2 739 6 Sörby Urfjäll 28:3 Gävle Gävle Utmarksvägen 35 - - 2 198 - - - - - 2 198 797 1 085 27 Sörby Urfjäll 37:3 Gävle Gävle Utmarksvägen 10 - - 14 000 - - - - - 14 000 4 195 6 953 36 Jordbromalm 6:16 Haninge Haninge - 1977/2003 - 7 274 - - - - - 7 274 4 159 4 184 1 Jordbromalm 6:60 Haninge Haninge - 1983 - 6 801 - - - - - 6 801 4 167 4 338 0 Åby 1:152 Haninge Haninge - 1989,-91, 2003 - 4 366 - - - - - 4 366 2 619 3 015 6 Grottan 7 Hudiksvall Hudiksvall Kullgatan 6, 8 - 1 837 110 - - - - 5 861 7 808 7 539 8 044 6 Norränget 6:7 Hudiksvall Hudiksvall Hyggesvägen 4 - - 4 223 - - - - - 4 223 1 678 1 678 0 Jakobsberg 2:2283 Järfälla Järfälla Debetvägen 8 1976/1985 1 040 3 920 - - - - - 4 960 3 167 3 167 0 Veddesta 2:7, 2:33 Järfälla Järfälla Äggelundavägen 6 1967 700 4 300 - - - - 700 5 700 3 015 3 015 0 Upplaget 3 Katrineholm Katrineholm Högmossevägen 6 - 140 1 376 - - - - - 1 516 29 234 88 Valvakan 3 Linköping Linköping Strids gata 25, 27 1978/1987-95 430 1 956 - - - - - 2 386 1 270 1 439 12 Bägaren 6 Norrköping Norrköping Slottsgatan/Kungsgatan - - 269 - - - - - 269 5 82 94 Åttersta 19:1 Sandviken Åshammar Kylsvägen 11 1961 - 6 643 - - - - - 6 643 663 663 0 Väsby 5:1 Sollentuna Sollentuna - 1973 - 2 544 - - - - - 2 544 1 357 1 357 0 Forellen 1 Solna Solna Björnstigen 4 1954 324 1 039 - - - - - 1 363 702 714 0 Generatorn 16 Stockholm Hägersten Lintavägen 4 1958 - 2 060 - - - - - 2 060 1 317 1 399 0 Gulddragaren 24 Stockholm Stockholm Storsvängen 165, 167 1956/1994 548 959 - - - - - 1 507 1 587 1 815 13 Partihallen 1 Stockholm Årsta Uppköparvägen 1,3,5,7 1968 3 519 14 696 - - - - 2 483 20 698 13 019 13 691 5 Enen 8 Södertälje Södertälje Badhusgatan 5, 7 1939/1990 1 395 1 861 - - - - 1 3 257 3 558 3 667 0 Fotografen 5 Tyresö Tyresö Mediavägen 7 - - 1 060 - - - - - 1 060 661 673 0 Törnby 2:2 Uppl-Väsby Upplands Väsby Jupitervägen 10-12 1976/1982 3 854 15 465 - - - - 144 19 463 14 213 14 213 0 Kungsleden 2005 65 Acquired properties

Market Area East Retail properties Vretåker 2 Bollnäs Bollnäs Apoteksgatan 14,16 1965 - - - 5 136 - - - 5 136 4 009 4 778 16 Botvidsgymnasiet 1 16 Botkyrka Botkyrka Fågelviksvägen 1-7 1971/2000 11 565 598 - 14 564 - - 43 558 24 136 43 515 44 och 4-6 831 Mullvaden 10,12 Botkyrka Tumba Björkvägen 2 1985 - - - 1 925 - - - 1 925 1 042 1 042 0 Lillsidan 3:1 Enköping Enköping Västerleden 152, 154 1967 - - - 2 032 - - - 2 032 1 464 1 534 2 Laxen 2 Eskilstuna Eskilstuna Stenbygatan2, 4 1986, 2002 - - - 1 529 - - - 1 529 1 960 1 960 0 Slagsta 1:21 Eskilstuna Eskilstuna Brusengatan 11 1974, 1998 - - - 1 698 - - - 1 698 1 524 1 524 0 Torlunda 1:276 Eskilstuna Eskilstuna Folkestaleden 40 2000 - - - 13 216 - - - 13 216 11 663 11 663 0 Städet 15 Flen Flen Norra Kungsgatan 8, 10 1982, 1990 510 - - 3 767 - - - 4 277 3 575 3 962 10 Sätra 104:5 Gävle Gävle Lokförargatan 3,5 1974 - - - 4 840 - - - 4 840 3 203 3 203 0 1950/-70/- Sörby 5:4 Gävle Gävle Parkvägen 50 - - - 1 982 - - - 1 982 1 312 1 629 0 79/-97 Valbo-Backa 6:13 Gävle Gävle Johanneslötsvägen 22 1990 608 1 911 - 912 - - - 3 431 1 976 1 976 0 Söderby 2:60, 2:61 Haninge Haninge Jungfruns Gata 416-419 - 1 934 107 - 6 467 - - 6 368 14 876 12 069 13 163 7 Ribby 1:128 Haninge Västerhaninge Tungelstavägen 24 1940, 2002 - - - 1 354 - - - 1 354 1 923 1 923 0 Telegrafen 1 Huddinge Huddinge Kommunalvägen 27B 1943 1 336 ------1 336 1 609 1 609 0 Vinkeln 8 Huddinge Kungens Kurva Tangentvägen 20, 22 1997 200 795 - 1 925 - - - 2 920 5 478 5 774 0 Ringnyckeln 1 Huddinge Skogås Svarvarvägen 6 1973 395 3 242 - 3 354 - - 149 7 140 3 350 3 600 0 Ede 20:9 Hudiksvall Delsbo Edevägen 9 1966/1976 - - - 858 - - - 858 813 813 0 Rådmannen 9 Hudiksvall Hudiksvall Trädgårdsgatan 7 1665 - 184 - 5 380 - - - 5 564 5 144 5 926 13 Bredgården 1:11 Järfälla Järfälla Kaminvägen 1 1990/1991 2 290 2 991 - 1 402 - - - 6 683 5 525 5 525 0 Öje 9:87 Ljusdal Järvsö Turistvägen 45 1973, 1998 - - - 1 031 - - - 1 031 846 846 0 Nyckelharpan 2 Norrköping Norrköping Moa Martinssons Gata 24 1985 - - - 2 409 - - - 2 409 812 812 0 Rapsbaggen 1 Norrköping Norrköping Bigatan 101 1980 - - - 700 - - - 700 649 649 0 Vaktmästaren 4 Norrtälje Norrtälje Baldersgatan 21 1960/2000 - - - 1 200 - - - 1 200 629 629 0 Hotellet 25 Nyköping Nyköping Bagaregatan 42-48 1976 - - - 6 561 - - - 6 561 8 632 8 632 0 Utmålet 6 Nyköping Nyköping Gustafsbergsstigen 12 1991 163 316 - 753 - - - 1 232 1 390 1 390 0 Södra Edsbyn 13:174 Ovanåker Edsbyn Västergatan 18 1947, 2002 - - - 2 102 - - - 2 102 2 026 2 026 0 Västanå 2:59 Ovanåker Ovanåker Västanågatan 3 1970/1987 - - - 1 145 - - - 1 145 1 130 1 601 29 Dalbacken 21 Sandviken Sandviken Dalagatan 2-6 1961 245 854 - 5 768 - - - 6 867 4 294 4 470 3 Förmannen 1 Sandviken Sandviken Högbovägen 2 1951 - - - 943 858 - - 1 801 1 116 1 169 5 Strået 1 Solna Solna Odlingsvägen 4 1988, 1997 - - - 922 - - - 922 1 222 1 222 0 Diariet 7 Stockholm Bromma Registervägen 38 1959 58 1 055 - 805 - - - 1 918 2 337 2 337 0 Lönnen 10 Söderhamn Söderhamn Köpmangatan 7, 9, 11 1975 3 512 38 - 3 599 - - - 7 149 7 299 7 614 4 Söderala-Sund 1:29 Söderhamn Söderhamn Stickvägen 5 1993, 2003 - - - 4 739 - - - 4 739 4 801 4 801 0 Kyrktuppen 10 Södertälje Södertälje Storgatan 4-6 1970 592 - - 2 329 1 436 - 588 4 945 4 924 4 966 1 Luktviolen 2 Södertälje Södertälje Erikshällsgatan 40 1963 - - - 895 - - - 895 826 826 0 Kumla 69:33 Tyresö Tyresö Vendelsövägen 43 - 45 1999 - - - 1 025 - - - 1 025 1 489 1 489 0 Nåntuna 5:45 Uppsala Uppsala Nämndemansvägen 1 1990, 2002 - - - 1 888 - - - 1 888 2 390 2 390 0 Kyrkslätten 2:5 Älvkarleby Älvkarleby Östra Vägen 49 1964 - - - 3 800 - - - 3 800 1 877 2 149 13

Care properties Tappström 1:50 Ekerö Ekerö Bryggavägen 8 - 2 686 ------2 686 2 830 2 943 4 Vendelsö 3:1716 Haninge Haninge Skomakarvägen 20 - 1 525 ------1 525 1 617 1 617 0 Ribby 1:451 Haninge Västerhaninge Klockargatan 13-27 - 6 518 23 - 540 - - - 7 081 5 591 6 178 5 Illern 9 Huddinge Huddinge Stuvsta Torg 4-6, 10-14 - 2 856 - - 363 - - - 3 219 3 866 3 982 1 Medicinaren 14 Huddinge Huddinge Diagnosvägen 8 - 2 137 ------2 137 2 579 2 579 0 Kallhäll 1:32 Järfälla Järfälla Kopparvägen 2B - 2 184 22 - - - - - 2 206 1 628 1 836 11 Exemplet 2 Sollentuna Sollentuna Edsbergs Torg 1, Yxvägen 37 - 1 918 - 353 - - - - 2 271 2 235 2 260 0 Akka 8 Stockholm Bromma Tranebergsplan 1-3 - 3 743 - - 231 - - - 3 974 4 829 4 836 0 Jullovet 1 Stockholm Älvsjö Annebodavägen 4-6 - 1 310 - - 23 - - - 1 333 1 227 1 267 0 Forellen 2 Tyresö Tyresö Bollmoravägen 14-20 - 6 032 16 - 557 - - - 6 605 6 384 6 608 0 Ösby 1:76 Värmdö Gustavsberg Gustavsbergs Centrum - 3 774 7 - 809 - - - 4 590 5 706 5 706 0

School properties Isskåpet 1 Linköping Linköping Tröskaregatan 73 - 75 2003 ------2 735 2 735 5 390 5 390 0 Sicklaön 126:3 Nacka Nacka ------2 400 2 400 4 792 4 792 0 Befästningskullen 8 Solna Solna Anders Lundströms gata 3 - 5 2004 ------3 388 3 388 6 000 6 000 0 Sandbacken Mindre 42 Stockholm Stockholm Sandbacksgatan 10 ------8 000 8 000 17 600 17 600 0 Karleby 2:2 Södertälje Södertälje Gärtunavägen 4 2004 ------2 950 2 950 5 350 5 350 0 Bällsta 2:1087 Vallentuna Vallentuna Bällsta ------1 513 1 513 0

Other Hyrstallet 1 Botkyrka Botkyrka ------Tumba 7:231 och 7:237 Botkyrka Botkyrka ------Alderholmen 10:1 Gävle Gävle Drottninggatan 46 1930 669 317 - - - - - 986 297 473 37 Holmsund 11:1-3 Gävle Gävle Korsnäsvägen 104-108 1958 - - - - 1 200 - 260 1 460 898 1 064 16 Holmsund 7:6 Gävle Gävle Holmsundsvägen 3-7, 17-29 1929 - - - - 3 067 - 160 3 227 2 156 2 174 1 Kastet 6:1-6:4 Gävle Gävle Korsnäsvägen 136-142 1926 - - - - 870 - 20 890 339 354 4 Lillhagen 2:1-10, 2:12, Forskarvägen 23 - 27, Gävle Gävle - 1 337 250 - 329 12 407 - 2 504 16 827 7 632 10 014 24 Kastet 5:8, 8:1, 12:1 Korsnäsvägen 170 Forskarvägen, Norra Lillhagen 5:3, 5:18-19 Gävle Gävle Nyvallsvägen, Kastsjöstrand, 1958 - - - - 3 027 - - 3 027 1 831 2 073 12 Torkavägen Norr 17:6 Gävle Gävle Ruddammsg 38/N Kopparsl 13 1988 - - - - 3 726 - - 3 726 3 234 3 260 1 Hattmakarg 11-13, Nygatan Norr 18:6 Gävle Gävle - 973 - - 832 1 732 - - 3 537 3 037 3 189 5 37-39, Kopparslagargatan 12 Norr 19:3 Gävle Gävle N Centralgatan 9, Nygatan 43 - - - - 321 2 072 - - 2 393 2 271 2 274 0 Norr 27:2 Gävle Gävle Norr 27:2, Stora Esplanadg 9 - 297 - - 480 2 015 - - 2 792 2 190 2 293 4 Norr 34:3 Gävle Gävle Kyrkog 25/N Kopparslagarg 3 1995 89 - - - - - 5 991 6 080 770 770 0 Näringen 22:3 Gävle Gävle Beckasinvägen 15 ------151 151 0 Söder 58:7 Gävle Gävle Kaserng 65, S Kungsg 44 - 321 - - 1 462 2 004 - - 3 787 2 495 2 614 5 Sörby 10:9 Gävle Gävle Falkvägen 5 A,B 1994 - - - - 512 - - 512 485 485 0 Väster 30:2 Gävle Gävle Nygatan 8 - - 233 - 386 2 823 - - 3 442 2 742 3 283 16 Nygårdsvägen 2-30, 1-23, Vårby Gård 1:16 Huddinge Huddinge Krongårdsvägen 2-24, 3-35, 1973 4 064 - - - 52 269 - - 56 333 47 290 47 868 1 Vårby Allé 32-58 Gärdet 1 Norrköping Norrköping Rågången 71-73 1958 - - - 490 4 609 - - 5 099 3 641 3 868 6 Knäppingsborg 3 Norrköping Norrköping Strömparken 22, Järnbrog 1 B 1930/1985 637 - - - 1 370 - 169 2 176 1 251 1 503 17 Norra Promenaden 102, Lammet 2 Norrköping Norrköping 1940/1980 113 - - 1 950 2 405 - 34 4 502 2 596 3 712 30 Kungstorget 2 Hospitalsgatan 9-11, Lokatten 12 Norrköping Norrköping - 52 - - 380 4 804 - 2 711 7 947 7 834 8 583 9 Trädgårdsgatan 8-14 66 Kungsleden 2005 Acquired properties

Market Area East Other Pelikanen 25 Norrköping Norrköping Hospitalsgatan 6-8 1918/1975 912 - - 405 - - 1 935 3 252 490 633 23 Planket 20 Norrköping Norrköping Bråddgatan 54 1983 - - - - 1 139 - - 1 139 944 944 0 Planket 23 Norrköping Norrköping Plankgatan 46 1940/1978 25 - - 60 940 - 600 1 625 822 912 10 Knäppingsborgsg 63, Prinsen 18 Norrköping Norrköping 1967 - - - 30 9 558 - 5 9 593 6 635 7 409 10 Hospitalsgatan 42-52 Sprutan 8 Norrköping Norrköping Gamla Rådstugugatan 52 1940/1978 168 - - 178 1 318 - 92 1 756 1 269 1 466 13 Stenhuggaren 25 Norrköping Norrköping Sandgatan 28 1960 - - - - 2 914 - - 2 914 2 071 2 251 8 Storgatan 10 Norrköping Norrköping Drottninggatan 10-12 - 484 139 - - 1 213 - 549 2 385 1 453 1 482 2 Drottninggatan 14, Gamla Storgatan 9 Norrköping Norrköping Rådstugugatan 3-7, Nya - 252 231 - 355 5 968 - - 6 806 5 988 6 005 0 Rådstugugatan 2-4 Stävan 2 Norrköping Norrköping Rösgången 32 1959 - - - - 3 639 - - 3 639 2 742 2 834 3 G:a Rådstugugatan 11, Tullhuset 1 Norrköping Norrköping - - - - 273 1 320 - - 1 593 1 099 1 324 14 Trädgårdsgatan 4A Gysingen 1:13 Sandviken Gysinge Kölnarvägen 19-23 1965 - 12 - - 289 - 573 874 199 199 0 Gysingen 1:27 Sandviken Gysinge Kjellins väg 7-11 1975 - - - - 703 - - 703 424 455 7 Bredmosstorpet 4 Sandviken Sandviken Bryggaregatan 2 1958 168 20 - 251 1 426 - - 1 865 1 369 1 380 1 Maskinisten 23 Sandviken Sandviken Sveavägen 31A-F 1957 - 81 - - 1 069 - - 1 150 869 874 1 Storhammaren 1 Sandviken Sandviken Malmgatan 4 1929 357 - - - 976 - - 1 333 1 195 1 195 0 Framnäs 16:1 & 20:1 Sandviken Österfärnebo Framnäsgatan 23 1970 - - - - 596 - - 596 392 392 0 Klappsta 3:29 Sandviken Österfärnebo Åsvägen 3 1978 764 - - 246 1 229 - - 2 239 1 632 1 914 15 Klappsta 6:8 Sandviken Österfärnebo Åsvägen 2-4 1965 42 - - 70 1 147 - - 1 259 656 792 17 Klappsta 7:17 Sandviken Österfärnebo Solängsvägen 2-8 1972 - - - - 688 - - 688 495 495 0 Ås 25:3 Sandviken Österfärnebo Framnäsgatan 29-31 1965 - - - - 482 - - 482 328 328 0 Bananen 8 Stockholm Stockholm Bergsgatan 5 A-C 1908/1985 1 204 - - - 1 552 - 260 3 016 3 887 4 020 3 Bodbetjänten 1 Stockholm Stockholm Kryddgränd 4-6 1985 2 709 - - - 2 964 - - 5 673 4 314 5 166 16 Fjäderholmsgränd, Vårholmen 4 Stockholm Stockholm 1968/83 5 911 5 799 - 3 954 7 545 - 1 342 24 551 15 915 17 447 9 Vårbergstorget Köpmangatan 12,14, N:a Alen 4 Söderhamn Söderhamn 1989 - - - 2 456 4 746 - - 7 202 6 333 7 006 10 Hamngatan 11,13 Brädgårdsgatan 38, Elefanten 4 Söderhamn Söderhamn 1888 - - - - 546 - - 546 303 447 23 Kyrkogatan 1 Närby 1:72, 1:74-85, 1:88-89, 1:91-92, 1:94- Söderhamn Söderhamn ------106, 1:108-111, 1:115 Päronet 1 Söderhamn Söderhamn Kungsgatan 27 1929 65 - - 55 634 - - 754 565 565 0 Söderala Sunnanå Söderhamn Söderhamn Lappstadsvägen 7-15 1910/1987 - - - - 1 653 - 20 1 673 722 1 082 17 3:132 Vannsätter 29:19 Söderhamn Söderhamn Björkhagsvägen 3-10 1910/1988 - - - - 1 392 - - 1 392 337 817 42 Vannsätter 29:62 Söderhamn Söderhamn Hagstigen 1900/1989 - - - - 1 166 - 140 1 306 411 705 27 Venus 1, 2 Söderhamn Söderhamn Rådmansgatan 2 1990 - - - - 988 - - 988 606 611 1 Grindvägen 1-23, Östansjö 16:22 Söderhamn Söderhamn 1910/1956 - - - - 2 171 - 580 2 751 1 034 1 362 24 Bläckhornsgatan 8-16 Furuvik 100:18 Älvkarleby Älvkarleby ------Harnäs 11:327, 11:325, Älvkarleby Älvkarleby Harnäsgatan 5-36 1900/1988 - - - - 4 051 - - 4 051 2 356 2 504 6 11:1 Medora 1 (renting) Älvkarleby Älvkarleby Klamparvägen 1 1990 ------2 500 2 500 2 077 2 077 0 Berga 10:6 Österåker Österåker Storängsvägen 16 A-B 1991 1 491 - - - 3 363 - - 4 854 3 302 4 742 30

Market Area South Office properties Stenen 1 Landskrona Landskrona Industrigatan 68 1977 2 924 804 - - - - 194 3 922 652 1 358 52 Kolet 2 Landskrona Landskrona Omnibusgatan 1 1989 460 ------460 126 126 0 Flintan 4 Lund Lund Skiffervägen 20 1990 3 550 1 342 - - - - - 4 892 3 799 3 927 3 Masugnen 3 Malmö Malmö Kopparbergsgatan 29 1970 2 007 450 - - - - - 2 457 1 086 1 530 29 Rosquist 1 Malmö Malmö Amiralsgatan 25 1986 2 270 74 - - - - - 2 344 2 341 2 726 14 Storken 32 Malmö Malmö Norregatan 27 1988 2 285 252 - - - - - 2 537 2 948 2 948 0 Vårsången 7 Malmö Malmö Gånglåtsvägen 87 - 1 544 ------1 544 765 765 0 Dockan 9 Växjö Växjö Västra Esplanaden 9 A 1971 12 951 290 - 437 - - 724 14 402 15 362 15 631 2 Lyktan 4 Växjö Växjö Kronobergsgatan 12-14 1960/1996 3 167 2 275 - 408 - - 237 6 087 4 793 5 939 19

Retirement homes Byrådirektören 4 Malmö Malmö Von Troils väg 2-8 1972 7 868 - - 190 8 155 - - 16 213 23 502 23 549 0

Industrial/warehouse properties Röinge 37:6 Hässleholm - 1970/-83/-94 210 1 010 - - - - - 1 220 815 815 0 Förgasaren 1 Landskrona Landskrona Faktorigatan 6 1967 ------5 000 5 000 325 325 0 Motellet 2 Landskrona Landskrona Hjalmar Brantings väg 11 1989 867 1 230 - - - - - 2 097 1 087 1 185 8 Pedalen 18 Landskrona Landskrona Kamg 15-27, Ramg 14-22 1989 - 3 733 - - - - - 3 733 1 526 1 526 0 Skeppsvarvet 9 Landskrona Landskrona Profilgatan 67 1952 477 898 - - - - - 1 375 165 195 15 Ratten 2 Oskarshamn Oskarshamn Gyllings Väg 9 1967 1 858 15 046 - - - - 955 17 859 859 5 788 85 Möllarp 3:2 Svalöv Oskarshamn - - 1 406 5 070 - - - - - 6 476 3 268 3 268 0 Älvdalen 1 Ängelholm Ängelholm Brandsvigsgatan 6 - 11 672 ------11 672 1 836 1 836 0

Retail properties Hjorten 10 Alvesta Alvesta Värnamovägen 4 1966 - - - 2 658 - - - 2 658 1 275 1 275 0 Jungfrun 5 Eksjö Eksjö Österlånggatan 28 1966 - - - 4 149 - - - 4 149 3 137 3 137 0 Fornminnet 2 Helsingborg Helsingborg Torbornavägen 30 1975 - - - 1 598 - - - 1 598 829 829 0 Karl XI Södra 18 Helsingborg Helsingborg - 1900/1970 4 619 2 742 - - - - - 7 361 5 939 7 528 21 Bajonetten 2 Kristianstad Kristianstad Kanalgatan 50 1963 - - - 1 915 - - - 1 915 757 757 0 Karl XV 16 Landskrona Landskrona Järnvägsgatan 4 1964 790 - - 2 855 - - 695 4 340 3 519 4 456 21 Välten 8 Lund Landskrona - 1974/1985 650 1 455 - - - - 665 2 770 1 1 293 100 Kloren 1 Malmö Malmö Scheelegatan 49 1970 - 870 - 5 257 - - - 6 127 3 837 3 950 0 Trekanten 3 Nässjö Nässjö Bandygatan 7 1929 318 61 - 314 - - - 693 486 486 0 Kronan 6 Vaggeryd Vaggeryd Järnvägsgatan 2 B 1972 - - - 2 356 - - - 2 356 1 319 1 319 0 Trucken 1 Vetlanda Vetlanda Stålvägen 11 1975 - - - 924 - - - 924 460 460 0 Tranan 7 Vimmerby Vimmerby Stora Torget 2-4 1962 - - - 2 606 205 - 216 3 027 1 528 1 532 0 Fogden 1 Västervik Västervik Västra Kyrkogatan 34 1976 - - - 5 579 - - - 5 579 4 838 4 838 0 Zephyr Västra 7 Ystad Ystad Klostergatan 16 1976 512 - - 4 546 - - 643 5 701 5 136 5 136 0 Kungsleden 2005 67 Acquired properties

Market Area South Care properties Hunnerup 1 Lund Lund S:t Lars väg 41-54 1947 13 149 2 300 - - - - 376 15 825 24 795 28 153 12 Klostergård 2:6, 2:9, 2:14 Lund Lund S:t Lars väg 1-38, 70-90 - 56 297 979 - - 879 - 3 814 61 969 46 218 47 211 2 Vårdträdet 7 Jönköping Gränna Hävdevägen 13 1999 - - - 129 - - 1 517 1 646 2 736 2 736 0 Norrahammar 28:108 Jönköping Norrahammar Postgatan 1-9 1971/2003 - - - 178 - - 2 439 2 617 3 937 3 937 0

School properties Rödjan 7 Kävlinge Österåker - 1988 - 2 019 - - - - 9 813 11 832 6 295 6 595 5 Spillepengsmarken 7 Malmö Malmö - 1966/1990 ------4 670 4 670 6 073 6 073 0 Blåbäret 10 Oskarshamn Oskarshamn Sörviksvägen 15A 1966 67 321 - 481 - - 4 513 5 382 2 274 2 658 14

Other Norrahammar 28:110 Jönköping Norrahammar Postgatan 8 A-D 1948 - 107 - 739 1 751 - - 2 597 1 690 1 890 11 Östra Roten 21 och 22 Landskrona Landskrona Järnvägsgatan 7 A-B 1931 182 - - 857 1 926 - 217 3 182 1 776 1 942 6 Östra Roten 35 Landskrona Landskrona Nygatan 2-4 1988 - - - 2 505 4 782 - 105 7 392 4 287 4 928 10 Styrkan 22 Malmö Malmö Spånehusvägen 89 1998 - - 978 - 1 120 - - 2 098 3 406 3 407 0 Gladan 1 Vimmerby Vimmerby Drottninggatan 20 1986 - - - 374 1 002 - - 1 376 965 1 016 5 Lärkan 3 Vimmerby Vimmerby Sevedegatan 38, Storgatan 37 1957 73 - - 1 783 2 618 - - 4 474 2 970 3 240 8 Brukspatronen 1 och 7 Västervik Västervik Smugglaregänd 1910/1974 60 - - 272 1 879 - 9 2 220 1 459 1 460 0 Flaggan 17 Västervik Västervik Hallströmsgatan 42-50 1962 - - - - 2 900 - 158 3 058 1 961 2 148 9 Lärkan 12 Västervik Västervik Esplanaden 19 1969 - - - - 1 623 - 31 1 654 1 152 1 225 6 Skäran 2 och 3 Västervik Västervik Albert Tengerns väg 55-61,65 1956 - - - 558 7 110 - 50 7 718 5 393 5 781 7 Yxan 1 Västervik Västervik Perugatan 35-47 1969 - - - - 14 423 - 92 14 515 8 017 9 812 18

Market Area West Office properties Frigga 10 Borås Borås Skolgatan 21 1905/00-04 900 ------900 605 851 1 Åkermyntan 5 Borås Borås Rosendalsgatan 2-10 1960-tal/00-04 4 806 - - 1 796 - - 951 7 553 3 503 3 788 6 Landvetter 2:11 Härryda Landvetter Idrottsvägen 5 1950/1996 417 175 - - - - - 592 89 356 75 Hönekulla 1:599 Härryda Mölnlycke Rådastocksvägen 1 1967 1 379 1 344 - - - - - 2 723 2 487 2 487 0 Skruven 3 Kungälv Kungälv Bultgatan 40 1991 8 144 ------8 144 6 310 7 210 12 Björnen 1 och 2 Mariestad Mariestad Esplanaden 1, Västerlångg 1 1965 2 855 - - 102 119 - 682 3 758 3 022 3 173 4 Murmeldjuret 3 Mölndal Mölndal Krokslätts Torg 1-7 1991 2 264 - - 937 - - - 3 201 2 643 2 643 0 Murmeldjuret 4 Mölndal Mölndal Fredåsgatan 13 1980/1990 6 975 ------6 975 10 162 10 162 0 Gastuben 4 Mölndal Mölndal Argongatan 2 C 1985 2 388 ------2 388 3 572 3 572 0 Ugglum 7:131 Partille Sävedalen Industrivägen 41 1991 1 871 1 756 - 150 - - 948 4 725 2 917 2 934 1 Aminoff 15 Uddevalla Uddevalla Kungsgatan 35 1962 1 909 - - 1 323 537 - 217 3 986 1 257 2 553 51 Hvitfeldt 22 Uddevalla Uddevalla Vässterlånggatan 18-22 1980 9 400 - - 96 - - 272 9 768 7 296 7 812 2 Stake 1 Uddevalla Uddevalla Lagerbergsgatan 16-18 1917/1965 3 466 867 - 99 - - 119 4 551 2 111 3 003 30

Industrial/warehouse properties 1960-tal, Pantängen 14 Borås Borås Getängsvägen 14 2 710 - - - - - 602 3 312 1 677 1 677 0 1992/02-04 1960-tal/1980- Sexdalern 1 Borås Borås Trandaredsgatan 200 4 433 5 354 - - - - - 9 787 4 599 4 834 2 tal, 00-04 Källbäcksryd 1:400 Borås Brämhult Tvinnargatan 11 1979 1 928 - - - - - 30 1 958 1 095 1 103 0 Bergsjön 44:1 Gothenburg Bergsjödalen 57,59 1973/1980 546 - - - - - 2 334 2 880 1 214 1 304 7 Kortedala 36:23 Gothenburg Dagjämningsgatan 2 1961 - 8 620 - - - - - 8 620 4 785 4 785 0 Kålltorp 103:3 Gothenburg Torpagatan 8 1950 775 1 116 - - - - - 1 891 1 176 1 218 3 Kärra 74:1 Hisings-kärra Tagenevägen 25-27 1976/90-98 1 236 5 060 - - - - 782 7 078 4 219 4 219 0 Krukan 1 Halmstad Halmstad Spikgatan 12 1980/89/00 218 1 071 - - - - - 1 289 605 605 0 Hulebäck 1:505 Härryda Mölnlycke Bäckvägen 3 1973/1996 - 426 - - - - 380 806 555 555 0 Jonsered 1:12 Partille Jonsered William Gibsons Väg 1-4 1929/1957 7 950 9 800 - 60 - - 3 851 21 661 6 821 9 459 24 Bäckaskog 3 Skövde Skövde Bäckaskogsvägen 17 1988 100 427 - - - - - 527 345 345 0

Retail properties Hinden 2 Falköping Falköping Fahlegatan 11 1968 - - - 1 925 - - - 1 925 1 653 1 653 0 Betslet 1 Mariestad Mariestad Storegårdsvägen 64 1989 145 384 - 1 124 - - - 1 653 775 1 170 34 Lejonet 3 och 9 Mariestad Mariestad Hamngatan 4 1929 193 - - 2 080 900 - 1 918 5 091 2 164 2 421 10 Knallen 1 Mark Mark Boråsvägen 28 1969/90 1 333 - - 2 384 - - - 3 717 1 857 2 970 34 Koljan 1 Mölndal Mölndal Brogatan 21 1976 552 - - 3 922 - - - 4 474 5 079 5 079 0 Ståplatsen 5 Mölndal Mölndal Frölundagatan 37 1978/1988 550 424 - 706 - - - 1 680 1 077 1 131 5 Ugglum 2:328 Partille Partille Skolvägen 7 1972 - - - 1 523 - - - 1 523 1 558 1 560 0 Ugglum 1:76 Partille Sävedalen Gothenburgsvägen 88 1988 1 144 - - 3 119 - - - 4 263 3 571 3 745 5 Sjöhästen 2 Varberg Varberg Birger Svenssons väg 4 1963 - - - 924 - - - 924 349 349 0 Månglaren 6 Töreboda Töreboda Drottninggatan 2 1971 - - - 2 185 - - 2 060 4 245 4 588 4 588 0

Care properties Nödinge 38:25 Ale Nödinge Klockarevägen 16 1985 817 - 32 - - - - 849 800 800 0 Skepplanda 2:118 Ale Skepplanda Albotorget 5 1985 1 283 ------1 283 1 328 1 328 0 Tollered 4:1 Ale Älvängen Gothenburgsvägen 26 1964, 77, 88 1 558 ------1 558 2 119 2 119 0 Fonden 1 Borås Borås Sörmarksgatan 199-205 1978, 1998 3 370 - 1 176 - - - - 4 546 3 229 3 229 0 Milstolpen 2 Borås Borås Smörhulegatan 2 1981, 1995 2 420 - - 103 - - - 2 523 2 369 2 369 0 Osdal 3:4 Borås Borås Pickesjövägen 1-5 2005-2006 ------720 720 1 490 1 490 0 Samariten 4 Borås Borås Klinikvägen 48 - 12 009 ------12 009 10 482 10 482 0 Stenhuggaren 1 Borås Borås Kindsgatan 1 1995 53 - - - - - 1 393 1 446 1 384 1 384 0 Kråkhult 1:32 Borås Dalsjöfors Uppegårdsgatan 2 1977, 1978 2 502 - 3 650 89 - - - 6 241 4 463 4 463 0 Sik 1:142 Borås Fristad Tärnavägen 6 1977 2 499 - - 136 - - - 2 635 2 304 2 304 0 Sandhults-Rydet 1:230 Borås Sandared Strandvägen 11 1989 1 434 - - 60 - - - 1 494 1 615 1 615 0 Rydboholm 1:145 Borås Viskafors Hagkällevägen 2 1981, 2000 2 065 - - 96 - - - 2 161 1 833 2 128 14 Misteln 10 Essunga Nossebro Ängsgatan 3 1985 1 433 - 197 134 - - - 1 764 1 578 1 578 0 Läkaren 1 Falköping Falköping Sankt Olofsgatan 8 1948, 95, 03 2 757 ------2 757 3 301 3 301 0 Njord 32 Falköping Falköping Parkgatan 49 1945 613 ------613 506 506 0 Dyrtorp 1:77 Färgelanda Färgelanda Håvestensvägen 1 1977, 91, 01 1 918 - 4 851 - - - - 6 769 4 793 4 882 2 Flugsvampen 1 Herrljunga Herrljunga Horsbyvägen 16 1978, 99, 01 2 652 - - 214 - - - 2 866 2 704 2 704 0 Norr 5:3 Hjo Hjo Karlsborgsvägen 4 1965, 1991 3 045 - 2 702 - - - - 5 747 4 834 4 888 0 Björken 7 Karlsborg Karlsborg Björkstigen 2 1972, 2000 2 213 ------2 213 1 915 1 915 0 Kullen 18 Lilla Edet Lilla Edet Järnvägsgatan 8 1980, 1985 4 197 - 3 230 243 - - - 7 670 7 942 7 942 0 Passagården 1:32 Lilla Edet Lödöse Långgatan 11-13 1985 436 ------436 173 173 0 Tuntorp 4:34 Lysekil Brastad Lärkvägen 4 1981 1 478 ------1 478 1 325 1 325 0 Slätten 18:6 m.fl Lysekil Lysekil Lasarettsgatan 1 1932, 48, 02 16 903 ------16 903 14 610 15 556 6 Pilen 12 m.fl Mariestad Mariestad Drottninggatan 1 1946, 60, 83 13 114 ------13 114 11 843 11 843 0 Dingle 1:87 Munkedal Dingle Trädgårdsgatan 9 1984 628 ------628 543 543 0 Sälgen 19 Skara Skara Malmgatan 36 1967,71,80,82 8 355 - 4 768 233 - - 528 13 884 11 568 11 568 0 Dunshult 7:1 Skövde Skövde Hästskovägen 2 1983 679 - - - - - 30 709 570 570 0 Klockstapeln 4 Skövde Skövde Knoppaliden 3 1986 688 ------688 442 442 0 Heljeröd 1:15 Sotenäs Hunnebostrand Heljerödshemmet, Pl 1395 1931, 87, 92 1 124 ------1 124 1 152 1 152 0 Tändstickan 19 Tidaholm Tidaholm Västra Drottningvägen 11 1982 4 243 ------4 243 3 427 3 427 0 Ärlan 1 m.fl Ulricehamn Ulricehamn Nygatan 7 1915,77,95,03 5 924 - - 219 - - 39 6 182 5 827 5 827 0 Klövern 7 Vänersborg Vänersborg Östergatan 1 1910, 66, 77 11 850 ------11 850 8 587 8 587 0 Eken 5 Åmål Åmål Skolgatan 4 1922,37,66,01 2 601 - 3 974 - - - - 6 575 5 060 5 243 3 Hasselbacksv, Parkv, 25 Lillängen 2:1 Mariestad Mariestad - 897 - - - 665 - 26 808 10 883 15 172 28 Carlbecksv, Solgläntev 246 68 Kungsleden 2005 Acquired properties

School properties Backa 245:1 Hisings Backa Sankt Jörgens Väg 14-20 1961/1976 ------5 700 6 032 6 15 Sinclair 12 Uddevalla Uddevalla Klintvägen 3 1949 1 647 1 025 - - 124 - 18 584 14 513 14 896 3 788

Other Magne 1 Borås Borås Kungsgatan 46 1904/2001 ------900 900 566 1 018 0

Market Area Central Office properties Björnen 1 Karlstad Karlstad Drottninggatan 30 1940, 76, 90 1 287 308 - 635 - - - 2 230 928 2 156 57 1876, 1906, 1953, 1962, Björnen 13 Karlstad Karlstad Fredsgatan 10 3 025 4 415 - - - - 87 7 527 4 036 5 743 30 1975, 1989, 1994 1958, 1959, Bälgen 9-11 Karlstad Karlstad Elverumsgatan 27 1964, 1968, 2 780 ------2 780 2 088 2 088 0 1988, 1991 Duvan 3 Karlstad Karlstad Järnvägsgatan 6 1987 2 455 15 - 1 963 - - - 4 433 4 907 5 392 9 Ekorren 11 Karlstad Karlstad Malmtorgsg 4-6, Våxnäsg 4 1890/1951 4 466 - - - 4 118 - 360 8 944 7 850 8 230 5 1963, 1965, Freja 13 Karlstad Karlstad Drottninggatan 6 3 890 55 - 1 743 923 - - 6 611 6 489 7 210 9 1991, 1993 1909, 1929, Gruvan 1 Karlstad Karlstad Kungsgatan 6 1 623 44 2 140 647 539 - - 4 993 4 484 4 730 0 1967, 1996 Grästegen 2 Karlstad Karlstad Strågatan 3 1990 2 688 ------2 688 1 701 2 031 16 Hybelejen 17 Karlstad Karlstad Verkstadsgatan 20 1929, 1993 2 915 10 - - - - - 2 925 1 787 2 344 24 Hyttan 11 Karlstad Karlstad Nygatan 17 1978 2 288 - - 214 1 140 - - 3 642 3 036 3 114 2 Kanoten 7 Karlstad Karlstad Lagergrens Gata 7 1988, 89, 96 9 147 585 - 434 - - - 10 166 7 143 8 610 16 1920, 1950, Loke 1 Karlstad Karlstad Sveagatan 12 2 120 262 - - 495 - - 2 877 1 128 1 786 37 1986, 1991 Släggan 13 Karlstad Karlstad Sågverksgatan 20 1981 860 349 - 640 - - - 1 849 621 765 18 Styrmannen 5 Karlstad Karlstad Hamntorget 1-3 1990 6 996 60 - - - - 1 060 8 116 5 180 6 153 16 Trätälja 10 Karlstad Karlstad Fredsgatan 3 A 1961, 1962 1 428 39 - 586 645 - - 2 698 2 880 3 163 8 Tvätten 2 Karlstad Karlstad Romstadsvägen 2 1929 2 050 499 - - - - - 2 549 1 885 1 984 5

Industrial/warehouse properties Planeraren 3 Borlänge Borlänge Planerargatan 1 1994/1999 300 1 519 - - - - - 1 819 1 148 1 148 0 Blåsten 3 Karlstad Karlstad Stormgatan 6 1975, 1995 535 1 112 - - - - 500 2 147 691 985 26 1967, 1973, Bromsen 6 Karlstad Karlstad Ramgatan 7 1 041 2 140 - 200 - - - 3 381 1 507 1 593 4 1990, 1991 1981/2003/ Fallvinden 3 Karlstad Karlstad Dagvindsgatan 4 121 788 - - - - - 909 469 469 0 2005 Spärren 7 Karlstad Karlstad Rattgatan 6 1968 661 1 294 - 187 - - - 2 142 592 1 156 48 Mobyarna 113:4 Malung Malung Västra Industrigatan 1971 15 16 230 - - - - - 16 245 4 690 5 043 7 Verkstaden 20 Västerås Västerås Metallverksgatan 1-13 - 7 637 15 685 - - - - - 23 322 11 651 11 651 0 Böle 1:183 Hofors Hofors Hästskovägen 4 1960/1992 - 505 - - - - - 505 0 62 100

Retail properties Kuriren 1 Arboga Arboga Ahlöfsgatan 26 1970/1979 24 - - 3 049 - - - 3 073 2 332 2 338 0 Lastaren 1 & 2 Avesta Avesta Prästgatan 39 1960 - - - 1 349 - - - 1 349 449 455 0 Vinden 1 Avesta Avesta Axel Johanssons väg 102 1967/1987 - - - 2 555 - - - 2 555 2 401 2 401 0 Hammaren 6 Borlänge Borlänge Hammargatan 4-6 1973 250 2 355 - 3 272 - - - 5 877 2 896 3 780 23 Trasten 12 Filipstad Filipstad Viktoriagatan 2, Torget 2 1970 139 - - 1 738 - - 14 1 891 1 151 1 499 23 Björken 11 och 15 Hedemora Hedemora Åsgatan 62-66 1959 1 429 - - 1 780 - - 410 3 619 1 379 3 036 55 Björnen 7 Karlstad Karlstad Järnvägsgatan 7 1965, 2001 1 825 89 - 1 361 - - - 3 275 4 290 4 482 4 Druvan 13 Karlstad Karlstad Tingvallagatan 17 1947, 49, 88 1 750 52 - 2 094 347 - 35 4 278 4 664 5 008 7 Duvan 13 Karlstad Karlstad Järnvägsgatan 2 1986, 87, 01 3 281 139 - 5 136 - - 58 8 614 15 311 16 256 5 Duvan 5 Karlstad Karlstad Drottninggatan 21 1990, 2003 2 354 66 - 2 641 - - - 5 061 5 869 7 154 17 Gripen 11 Karlstad Karlstad Herrgårdsgatan 20 1962, 2002 3 770 - - 162 366 - - 4 298 3 733 4 188 11 Höken 11 Karlstad Karlstad Drottninggatan 13 1963, 82, 88 957 100 - 5 718 277 506 212 7 770 9 274 9 521 2 Mercurius 1 Karlstad Karlstad Drottninggatan 14 1905, 29, 95 13 341 - 1 796 1 201 - - 3 351 3 890 4 446 10 Mercurius 2 Karlstad Karlstad Västra Torggatan 10 1929 200 - - 811 - - - 1 011 1 980 1 980 0 Mercurius 3 Karlstad Karlstad Västra Torggatan 12 1870, 1929 712 62 - 741 - - - 1 514 1 202 1 452 15 Fenja 10 Köping Köping V Åpromenaden 20, Ö Långg 3 1965 109 - - 2 030 1 124 - 702 3 965 1 980 2 772 28 Nifelhem 6 Köping Köping Stora Gatan 12 1968 399 - - 1 199 - - 1 085 2 683 1 945 2 015 3 Njord 6 & 7 Köping Köping Stora gatan 16-18 1951/1969 553 - - 3 763 1 085 - - 5 401 2 082 2 416 13 Kvasta 9:2 Lindesberg Fellingsbro Bergsvägen 37 1950 114 - - 1 600 255 - - 1 969 671 688 2 Fisken 5 Malung - 1967 93 - - 2 593 - - 95 2 781 2 447 2 447 0 Myrbacka 80 Vansbro Dala Järna Myrbacka 1976 - - - 1 237 - - - 1 237 1 333 1 333 0 Skomakaren 3 Vansbro Vansbro - 1976 307 - - 1 194 - - - 1 501 1 538 1 538 0 Myrjärnet 1 Västerås Västerås Bäckby Torg 3 1971 522 - - 1 929 - - - 2 451 2 133 2 184 2 Skyttegillet 6 Västerås Västerås Hästhovsgatan 19 1988, 1989 - - - 1 051 - - - 1 051 1 198 1 198 0 Traversföraren 3 Västerås Västerås Traversgatan 4 1990 - 546 - 2 026 - - - 2 572 2 321 2 321 0 Merkurius 10 Kristinehamn Kristinehamn Kungsgatan 44 1964 370 - - 946 - - 831 2 147 1 200 1 408 15 Tvillingarna 17, Bro Kristinehamn Kristinehamn Spelmansg 25, Kungsg 52 1962 78 - - 1 592 960 - 99 2 729 1 810 1 964 8 1:3, 1:7-8 Flygfältet 1 Hagfors Hagfors Skolgatan 2 1961 429 - - 997 910 - - 2 336 1 261 1 529 18 Hofors 36:2 Hofors Hofors Skolgatan 16 - - 50 - 2 921 - - - 2 971 1 428 1 802 21

Other Helge And 16 Arboga Arboga Järntorget 8-10 1971 305 - - 328 1 035 - - 1 668 1 143 1 419 19 Kvarnsveden 3:196 Borlänge Borlänge Källgatan 3-5 1952 - 34 - 22 1 392 - - 1 448 949 995 5 Kvarnsveden 3:197 Borlänge Borlänge Källgatan 6 - 28 1955 - - - - 7 518 - - 7 518 5 294 5 507 4 Brunna 52:1 Hedemora Hedemora Ringvägen 1-7, 4-6 1952 2 312 112 - - 2 983 - - 5 407 3 524 3 783 7 Anden 9 Karlstad Karlstad Åttkantslunden 1-3, Långg 65 1938/1983 - - - - 1 472 - 180 1 652 1 321 1 378 4 Braxen 34 Karlstad Karlstad Nygatan 1, Östra Kanalgatan 8 1944 172 185 - 215 1 199 - 270 2 041 1 433 1 433 0 Ekorren 9 Karlstad Karlstad Sandbäcksg 5, S Klarag 1 1910/95 712 - - 46 1 833 - - 2 591 1 913 1 963 2 Furan 5 Karlstad Karlstad Gillbergsgatan 3 1951/1986 - - - 119 1 710 - 140 1 969 1 639 1 639 0 Furan 7 Karlstad Karlstad Jössegatan 3 1986 - - - 97 925 - - 1 022 949 949 0 Granatkastaren 4 Karlstad Karlstad Artillerigatan 1-5 1945/1986 - - - - 748 - 120 868 715 715 0 Gruvan 12 Karlstad Karlstad V Kanalgatan 3 1991 - - - 126 2 525 - - 2 651 2 541 2 544 0 Gruvan 2 Karlstad Karlstad Ö Kyrkogatan 4 1929/1985 - - - - 1 064 - 102 1 166 1 047 1 051 0 Grävlingen 3 Karlstad Karlstad Sundbergsgatan 20 1929/1985 - - - 138 1 040 - - 1 178 1 017 1 017 0 Höken 13 Karlstad Karlstad Drottninggatan 9 1983 459 17 - 1 670 5 584 - - 7 730 5 892 6 690 7 Herrgårdsg 2-4, N Kyrkog 4-6, Lantmätaren 7 Karlstad - 3 026 63 - 448 15 623 - 2 480 21 640 18 710 19 349 3 N Strandg 1-3, V Kanalg 9-11 Kungsleden 2005 69 Acquired properties

Market Area Central Other Pilbågen 1 Karlstad Karlstad Sandelsgatan 2-8 1944/1986 - - - - 2 184 - - 2 184 1 821 1 941 6 Registratorn 1 Karlstad Karlstad Norra Allén 26 - - 56 - - 502 - - 558 495 499 1 Registratorn 8 Karlstad Karlstad Norra Allén 30 - - - - - 456 - 61 517 454 454 0 Registratorn 9 Karlstad Karlstad Norra Allén 28 - 100 - - - 466 - 29 595 496 502 1 Spiran 1-6 Karlstad Karlstad Lignellsgatan 1-11 1942/1988 - 59 - - 4 456 - 95 4 610 4 200 4 225 1 Trätälja 11 Karlstad Karlstad Drottningg 37, Pihlgrensgatan 4 1959/92 - - - 294 4 574 - 220 5 088 4 579 4 581 0 Tusenskönan 1 Karlstad Karlstad Älvdalsgatan 8 1950/1986 - - - 69 1 288 - 240 1 597 1 247 1 247 0 Väduren 3 Karlstad Karlstad Rudsvägen 1 1942/83 - - - - 1 344 - - 1 344 1 234 1 241 1 Disa 1 Köping Köping Stora Torget 3, Torggatan 11 1916/75 110 - - 713 924 - - 1 747 1 183 1 286 8 Freja 11 Köping Köping Östra Långg 8-10, Stora Gatan 8 1909/75 245 - - 631 1 736 - 107 2 719 1 933 2 032 4 Freja 3 Köping Köping Stora Gatan 6 1979 - - - 416 1 324 - - 1 740 1 374 1 436 4 Immanuel 2 Köping Köping Tunadalsgatan 28-34 1966 133 - - - 11 131 - 127 11 391 7 781 8 431 8 Inga 1 Köping Köping S:T Olovsgatan 52-56 1945/76 253 - - 34 2 271 - 166 2 724 1 899 2 025 6 Tunadal 6-9 Köping Köping Tunadalsgatan 4-8 1971 1 171 - - - 8 226 - 34 9 431 7 964 8 053 1 Apotekaren 1 Malung Malung Gröndalsvägen 38 1969 - - - 736 762 - 77 1 575 818 1 105 26 Växlaren 5 Malung Malung Gröndalsvägen 37 1966 127 - - 706 753 - - 1 586 702 1 099 34

Market Area North Office properties Stadsön 8:43 Piteå Piteå Källbogatan 77 1980 901 ------901 512 512 0 Servicen 1 Skellefteå Skellefteå Servicegatan 1 1987 5 989 ------5 989 3 154 3 684 14 Ejdern 17 Strömsund Strömsund Ramselevägen 10 1992 675 ------675 301 499 40 Veterinären 6 Sundsvall Sundsvall C A Svenssons Väg 4 1989 1 912 10 - 813 - - - 2 735 2 135 2 389 11 Kofoten 14 och 19 Sundsvall Sundsvall Södra Allén 5-7 1954/1989 1 732 ------1 732 357 1 026 65 Dingersjö 4:10 Sundsvall Sundsvall Sommarvägen 3 1944/1989 260 ------260 117 117 0 Fliten 10 Sundsvall Sundsvall Skolhusallén 9 - 3 112 18 - - - - - 3 130 2 312 2 910 20 Mars 2 Sundsvall Sundsvall Bankgatan 16 1890/1976 1 758 2 320 - 274 103 - - 4 455 2 648 2 951 10 Sundsvalls-Härnösand flygplats Norrberge 1:74 Timrå Sörberge 1992 725 ------725 658 658 0 Sörberge Norrberge 1:74, Timrå Sörberge Sundsvall-Härnösands flygplats - 3 077 ------3 077 2 769 3 591 23 (Arrende) Vivsta 3:39 Timrå Timrå Köpmangatan 44 1983 2 398 - - 490 - - - 2 888 2 062 2 096 2 Ånge 30:6 & 9 Ånge Ånge Järnvägsgatan 3 1992 3 587 278 - 140 - - - 4 005 6 289 6 527 4

Industrial/warehouse properties Kopparslagaren 1 Härjedalen Sveg Korskällsgatan 15 1976 386 2 885 - - - - - 3 271 1 001 1 201 17 Svartön 18:28 Luleå Luleå Viktoriavägen 1, 3 1987 - 2 567 - - - - - 2 567 700 700 0 Bergnäset 3:38, 3:39 Luleå Luleå Industrivägen 19, 21 - 80 970 - - - - - 1 050 504 504 0 Förrådet 1 Lycksele Lycksele - 1990 - 626 - - - - - 626 225 267 16 Stadsön 8:41 Piteå Piteå Källbogatan 69 1978 - 2 282 - - - - - 2 282 1 237 1 237 0 Öjebyn 33:211 Piteå Öjebyn Hammarvägen 20 1981 - 850 - - - - - 850 0 311 100 Mossarotträsk 1:326 Skellefteå Jörn Idrottsgatan 11 1986 - 562 - - - - - 562 107 107 0 Anläggaren 1 Skellefteå Skellefteå Servicegatan 29 1991 - 1 441 - - - - - 1 441 754 754 0 Gruvfogden 1 Skellefteå Skellefteå Gruvgatan 12 1995 - 855 - - - - - 855 316 400 21 Motorn 18 Skellefteå Skellefteå Plåtvägen 3 1990 1 028 3 018 - - - - - 4 046 1 984 2 288 13 Motorn 8 Skellefteå Skellefteå Verkstadsvägen 17 1980 - 1 455 - - - - - 1 455 656 736 11 Motorn 9 Skellefteå Skellefteå Verkstadsvägen 15 1972 - 545 - - - - - 545 175 239 27 Muttern 3 Skellefteå Skellefteå Verkstadsvägen 14 1989 360 560 - - - - - 920 442 442 0 Dingersjö 3:58, Kvissle 1974/1980/ Sundsvall Njurunda Njurundavägen 103, 105 300 4 767 - - - - - 5 067 798 1 698 53 1:124 1985 Bilen 1 Sundsvall Sundsvall Ortviksvägen 8 1968 309 6 231 - 220 - - - 6 760 4 558 4 606 1 Rälen 3, Fläkten 4 Umeå Umeå Förrådsvägen 14 1986/99-00 450 4 890 - - - - - 5 340 2 921 2 921 0

Retail properties Bävern 3 Boden Boden Svartbyvägen 2 1980, 1987 - - - 1 546 - - - 1 546 1 512 1 512 0 Fyren 9 Haparanda Haparanda Västra Esplanaden 45 1962, 1994 - - - 2 599 - - - 2 599 2 020 2 020 0 Yrkesskolan 5 Härnösand Härnösand Gångviksvägen 6, 8 1977, 2002 - - - 3 760 - - - 3 760 3 319 3 439 4 Bilen 22 Luleå Luleå Delfingatan 4 1965, 2003 - - - 4 540 - - - 4 540 4 549 4 549 0 Storheden 1:45 Luleå Luleå Betongvägen 5 1990 255 342 - 848 - - - 1 445 468 668 0 Lögdeå 23:1 Nordmaling Lögdeå Rundviksvägen 1 1958 - 50 - 480 328 - - 858 327 348 6 Haren 10 Skellefteå Skellefteå Nygatan 38, 40 1958 1 996 15 - 2 867 2 041 - - 6 919 7 302 7 686 5 Idun 10 Skellefteå Skellefteå Kanalgatan 38 1985, 1994 - - - 2 517 - - - 2 517 2 616 2 616 0 Regulus 22 Skellefteå Skellefteå Skeppargatan 20 1970/1991 - - - 1 935 - - - 1 935 1 544 1 544 0 Vargen 2 Strömsund Strömsund Bredgårdsgatan 2 1956 - - - 1 083 907 - - 1 990 860 1 060 19 Apollo 3, 7 och 8 Sundsvall Sundsvall Strandgatan 16 1956 320 1 037 - 1 130 933 - - 3 420 1 392 2 008 31 Dingersjö 3:135 Sundsvall Sundsvall Kustvägen 51 - - 227 - 1 450 - - - 1 677 597 609 0 Köpingen 1 Sundsvall Sundsvall Medborgargatan 33 1967 - - - 2 668 - - - 2 668 1 701 1 701 0 Vivsta 3:14, 3:97 Timrå Timrå Köpmangatan 37 1973 252 - - 1 940 - - - 2 192 1 447 1 453 0 Vivstamon 1:17 Timrå Timrå Terminalsvägen 24 1985 - - - 1 285 - - - 1 285 502 524 0 Motormannen 10 Umeå Umeå Verkstadgatan 1 1974, 1996 - - - 1 548 - - - 1 548 2 341 2 341 0 Singeln 13 Umeå Umeå Formvägen 8C 1990 - 633 - 1 735 - - - 2 368 2 505 2 670 6 Thor 6 Umeå Umeå Storgatan 55 1972 - - - 2 477 - - - 2 477 1 232 1 232 0 Ånge 60:132 Ånge Ånge Norra Borgsjövägen 24 1991, 1999 - - - 1 879 - - - 1 879 1 674 1 674 0 Köpmannen 1 Åre Järpen Strandvägen 12 1977, 1997 - - - 1 085 - - - 1 085 798 798 0 Norrlungånger 2:42 Örnsköldsvik Örnsköldsvik Björnavägen 45 - - - - 1 817 - - - 1 817 1 028 1 028 0 Brunflo-Backen 1:178 Östersund Brunflo Centrumvägen 15 1987, 1997 181 - - 1 926 - - - 2 107 1 506 1 515 0 Kräftan 3 & 7 Östersund Östersund Bangårdsgatan 11 1970 - - - 4 989 130 - - 5 119 2 064 2 619 21 Snickarboden 2 Östersund Östersund Hemvägen 28 1975 348 711 - 835 - - - 1 894 - - - Tröskan 12 Östersund Östersund Slåttervägen 31 1969, 2001 - - - 2 912 - - - 2 912 2 996 2 996 0 70 Kungsleden 2005 Acquired properties

Market Area North Other Gulldalen 1-17, 21-41, 2-18, Hammaren 1:247 Ragunda Hammarstrand 1988 - - - - 2 544 - - 2 544 1 540 1 641 6 22-40 Mimer 10 Skellefteå Skellefteå Hörnellgatan 16, 18 1987 586 7 - - 2 426 - - 3 019 2 528 2 571 2 Amaliagatan 30-32/Storgatan Aspen 9 Strömsund Strömsund 1975 - - - - 1 841 - - 1 841 1 357 1 418 4 33 Bävern 3 Strömsund Strömsund Lövbergavägen 20 1940 - - - 81 462 - - 543 437 490 11 Stenbiten 3 Strömsund Strömsund Pumphusgatan 2 1992 - - - - 812 - - 812 665 728 9 Sköle 2:52, 96, 97, 35 Sundsvall Matfors Egnahemsvägen 12 1972 - - - - 3 695 - - 3 695 2 728 3 053 11 & 98-110 Västland 26:3 Sundsvall Sundsbruk Finstavägen 36 1968 512 - - 688 1 076 - - 2 276 1 602 1 990 19 Aeolus 1 Sundsvall Sundsvall Nybrogatan 19 1944/75 89 30 - 501 872 - - 1 492 1 011 1 021 1 Bredsand 1:2, 1:3, 1:7, 1:19, 1:20, 1:21, Appelbergsg, Kustv, Mellanv, Sundsvall Sundsvall - - - - - 7 127 - - 7 127 5 493 5 922 5 1:22, 2:1, Dingersjö Plastv, Strandv, Vinkelv 31:3, 31:4 Bredsand 1:4, 1:8, 1:9, Appelbergsg, Kustv, Mellanv, 1:10, 1:11, 1:12, 1:13, Sundsvall Sundsvall - - - - - 4 479 - - 4 479 3 768 3 830 2 Plastv, Strandv, Vinkelv 1:14, 1:16 Dingersjö 3:131, 54:2- Appelbergsg, Bergsv, Ejderv, Sundsvall Sundsvall - 117 333 - - 24 736 - - 25 186 13 911 20 369 31 4, 52:5 Lärkv, Strandv, Tallv, Tärnv Dingersjö 3:486 och Appelbergsg, Bergsv, Ejderv, Sundsvall Sundsvall - - - - - 9 464 - - 9 464 7 333 7 974 3 28:27 Lärkv, Strandv, Tallv, Tärnv Rådhusgatan 39 A-B, Fliten 11 Sundsvall Sundsvall - 214 - - - 3 372 - - 3 586 3 231 3 338 2 Trädgårdsgatan 40, Varvsg 10 Kvissle 2:53 och 2:43 Sundsvall Sundsvall Affärsgatan 26 A-D 1962 - - - - 1 469 - - 1 469 903 1 191 24 Affärsgatan 22 A-C, 24 A-C, Kvissle 22:2, Nolby 39:1 Sundsvall Sundsvall 1969 105 20 - 224 6 310 - - 6 659 4 589 5 085 9 Brogatan 1-5 Lagmannen 10 Sundsvall Sundsvall Esplanaden 18 1962 817 1 288 - - 3 921 - - 6 026 3 817 4 398 13 Skolgatan 4, Affärsgatan 20 Nolby 1:48, 40:1, 1:108 Sundsvall Sundsvall 1983 1 070 36 - 441 4 054 - - 5 601 4 639 5 205 11 A,B, Affärsgatan 4 A-D Nolby 3:268 Sundsvall Sundsvall Brovägen 9 1990 - - - - 997 - - 997 903 915 0 Nolby 40:2 Sundsvall Sundsvall Affärsgatan 18 A-C 1964/1983 77 - - 808 2 166 - 130 3 181 1 852 2 352 21 Nolby 41:3, 37:1 Sundsvall Sundsvall Affärsg 14 A-H, Affärsg 16 A-N 1975/1976 - 43 - 1 006 5 328 - - 6 377 4 939 5 391 8 Prästbolet 1:46 Sundsvall Sundsvall Prästgatan 1 1990 - - - - 330 - - 330 283 283 0 Skönsmon 2:29, 2:83- Sundsvall Sundsvall ------87, 2:91, 2:95-96

Market Area Foreign Office properties Avenue Hermann Bryssel Bryssel - - 4 942 - - - 466 - - 5 408 2 603 5 784 55 Debroux 15 Avenue Louise 350 Bryssel Bryssel - - 6 670 ------6 670 10 175 10 490 3 Manhattan Center Bryssel Bryssel - - 37 250 - - 8 270 - - 5 044 50 564 20 000 69 000 71 Rue de Namur 72/74 Bryssel Bryssel - - 2 879 - - - 770 - - 3 649 3 525 3 711 5 Rue Montoyer 39 Bryssel Bryssel - - 1 255 ------1 255 1 282 1 346 5 Lozenberg 17 Bryssel Zaventem - - 2 788 ------2 788 3 003 3 003 0 Hogehilweg 7 Amsterdam Amsterdam - - 2 863 ------2 863 4 400 4 845 9

Other Boulevard de la Bryssel Bryssel - - 1 295 - - - 1 320 - - 2 615 2 457 2 586 5 Cambre 28/30 Kungsleden 2005 71 Annual General Meeting

Kungsleden AB (publ) Corp.ID.no 556545-1217 Reg.office Stockholm Head office Medborgarplatsen 25 Box 70414 The Annual General Meeting will be held on 6 April 2006 at 2:00 p.m. at SE-107 25 Stockholm, Sweden Tel +46-8-503 052 00 Hotel Rival, Mariatorget 3, Stockholm, Sweden. Fax +46-8-503 052 01 Application Regional office West Spannmålsgatan 14 Shareholders wishing to participate in the Annual General Meeting must Box 11284 be registered in their own name (i.e. not nominee-registered) in the share SE-404 26 Göteborg Tel +46-31-755 56 00 register maintained by VPC AB (the Swedish Central Securities Deposi- Fax +46-31-755 56 01 tory & Clearing Organisation) AB by no later than 31 March 2006 and must Regional office East notify their intention to attend by no later than 4 p.m. on 31 March 2006, on Medborgarplatsen 25 Box 70414 the enclosed application form or by writing to the company at the following SE-107 25 Stockholm address: Tel +46-8-503 052 00 Kungsleden AB Fax +46-8-503 052 01 Regional office South FAO: Sinikka Mukka Elbegatan 5 P.O. Box 70414, SE-211 20 Malmö 107 25 Stockholm, Sweden Tel +46-40-17 44 00 Fax +46-40-17 44 19 E-mail: [email protected] Regional Telephone: +46 (0)8 503 05200 Retirement Homes Medborgarplatsen 25 Fax: +46 (0)8 503 05202 Box 70414 Or via our Website: www.kungsleden.se SE-107 25 Stockholm Tel +46-8-503 052 00 Fax +46-8-503 052 01 Shareholders should state their names, personal/corporate identity num- Local West bers, address, daytime telephone number, number of shares represented Jönköping Huskvarnavägen 40 and potential representatives and assistants participating. SE-554 54 Jönköping To be entitled to participate in the Annual General Meeting and exercise Tel +46-36-16 70 07 Fax +46-36-16 70 03 their voting rights, shareholders with nominee-registered holdings must Växjö temporarily re-register their shares in their own names. Such registration Norrgatan 29 must be recorded at VPC AB by no later than 31 March 2006, which means SE-352 31 Växjö Tel +46-470-405 90 that the nominee must be informed in good time before this. Fax +46-470-74 09 20 Trollhättan Dividend Polhemsgatan 2 SE-461 30 Trollhättan The Board and Chief Executive propose that dividends of SEK 11.00 per Tel +46-520-47 63 50 share are paid to shareholders. The record day for dividends has been pro- Fax +46-520-47 63 51 posed as 11 April 2006. If the Annual General Meeting approves the propo- Local East Karlstad sal, VPC is expected to distribute the dividends on 18 April 2006. Lantvärnsgatan 3B Box 1037 SE-651 15 Karlstad Share split Tel +46-54-17 50 00 The Board of Directors proposes that the Annual General Meeting resolves Fax +46-54-17 50 01 Västerås to implement a share split whereupon one (1) existing share of Kungsleden Smedjegatan 13 AB (publ) will become three (3) new shares of the company. Thus, after the SE-722 13 Västerås share split, the total number of shares would be 136,502,064. The share Tel +46-21-12 52 70 Fax +46-21-12 52 90 split is scheduled for consummation on Thursday 11 May 2006. After con- Norrköping sultation with the Stockholm Stock Exchange, the final day for trading in Hospitalsgatan 11 the old share will be 8 May 2006, and the first trading day for the new share SE-602 27 Norrköping Tel +46-11-10 38 10 will be 9 May 2006. Fax +46-11-10 38 66 Forthcoming reports Gävle Hamntorget 6 • The Interim Report for the period January—March will be presented SE-804 23 Gävle on 25 April 2006 Tel +46-26-54 55 70 Fax +46-26-54 55 80 • The Interim Report for the period January—June will be presented Local on 15 August 2006 Retirement Homes • The Interim Report for the period January—September will be presented Elbegatan 5 SE-211 20 Malmö on 24 October 2006 Tel +46-40-17 44 00 Fax +46-40-17 44 19