Annual Report 2006 Contents

Akademiska Hus Annual Report 2006 Contents Review of the year 2 Statement by the President 4 Business concept, visions and objectives 6 MARKET Rental and property market 8 Akademiska Hus market 10 Competitors 13 Our geographical sub-markets 14 Lease agreements and rental income 24 Rental and vacancy levels 26 Products and services 28 Risk management 30 The future 32 OPERATIONS Property valuation 34 [halv flik] Profitability 38 Operating costs 39 Maintenance costs 41 Five-year summary 42 Comments on the five-year summary 43 Regions and the Group 44 Regions 45 Financing 46 Projects 49 Project presentation 52 Awards for completed projects 53 Environment 54 ORGANISATION Employees 58 Corporate governance 61 Board of Directors and auditors 65 Executive management and Group management 66 FINANCIAL REPORT Summary of results 68 Income statements 69 Balance sheets 70 Changes in equity 72 Cash flow statements 73 Notes 74 Audit report 95 Definitions 96 Addresses 97 The statutory annual report, which has been 2006 audited, comprises pages 6–60, 67–94 4 Statement by the President President Thomas Norell summarises 2006 and gives his views on the market, operations and challenges facing Akademiska Hus. Pages 4–5 [halv flik] 15 Market The Market section provides detailed information about Akademiska Hus’s customers, services and market. New for this year are an expanded competitor analysis and a detailed description of the regional markets. Pages 8–33 Pictured on the front page are students at Medicinareberget in Gothenburg in the walkway between Sahlgrenska University Hospital and Medicinareberget, which links the clinical and preclinical sections of the Faculty of Medicine. 11 Operations How does Akademiska Hus work? The operations section contains information about the Company’s property valuation, profitability, projects and management process as well as financing and risks. At the end of the section you will find a five-year review and key figures, complete with comments for the regions and for the Group as a whole. 57 Pages 34–56 Organisation Who are the people behind the Company? In the organisation section you can read about employees, the executive management and the Board of Directors. You will also find detailed corporate governance information for the Group. Pages 57–66 Financial report The Financial report presents the Akademiska Hus operations in figures. At the end of the section you will also find definitions, report dates and contact details for all the regional offices. 67 Pages 67–96 Akademiska Hus – Presentation Akademiska Hus is one of the largest property companies in Profit and key ratio Sweden. The business concept is to be the leader in creative, 2006 2005 purpose-designed environments for higher education and Property management income, SEK m 4,596 4,533 research. Net operating profit, SEK m 2,843 2,727 Profit before tax, SEK m 4,229 9,270 Akademiska Hus’s most dominant customer category is universities Assessed fair value, properties, SEK m 48,454 45,616 Total yield, properties, % 9.8 24.7 and colleges. Other customers include research institutes and of which direct yield, % 6.0 6.5 research-intensive companies as well as companies, public authori- of which change in value, % 3.8 18.2 ties and other organisations that have a strategic link to our cam- Return on equity after standard tax, % 12.9 34.2 puses and which contribute to creating an attractive totality. Return on total capital, % 10.0 22.6 Operations comprise owning, managing, planning, building Equity ratio, % 47.2 44.8 and developing properties. The property holdings are to be found Loan to value level, % 33.5 35.8 in almost every part of the country – from Kiruna in the north to Interest coverage level, % 434 435 Malmö in the south. The rentable floor space is 3,230,000 square metres and the estimated market value of the properties is SEK 48,454 million. Background in brief In 1993, the centralised allocation of premises within the state sector The first decade or so for Akademiska Hus has been marked by ceased and the National Board of Public Building was dissolved. To the build-up of the Company and significant property investments as a make better use of public funds, all government operations, along result of powerful expansion in higher education. The need in recent with universities, public authorities and boards were free to go out years to make savings in the university sector, in combination with onto the market and in open competition choose and negotiate the increasing the range of premises, has heightened competition, to the premises they wished to occupy. considerable benefit of Akademiska Hus customers. The owner’s ambi- Two new companies and one authority took over the properties. tion to allow Akademiska Hus to be one of the many players on the mar- Akademiska Hus was assigned primary responsibility for universities and ket where customers can negotiate a solution that best satisfies their colleges and Vasakronan was assigned responsibility for commercial needs has been realised. properties. Both these companies operate on market terms and in open By working under these conditions Akademiska Hus will contribute competition. The National Property Board took over responsibility for, to the development of Sweden as a country characterised by research among other things, buildings of cultural and historical importance. and knowledge. Review of the year Akademiska Hus 2006 Strong profit maintained • Rental income amounted to SEK 4,544 million (4,481). • Net operating profit increased to SEK 2,843 million (2,727), due in part to reduced maintenance costs but also to increased rental income. • Net profit for the year after tax was AB Arkitekter FFNS SWECO SEK 3,038 million (6,654). A considerable proportion of the profit comprises changes in value in the Group’s SEK 500 million investment in investment properties and derivatives the Karolinska Institute Science Park and is therefore of a non-recurring nature. A total of SEK 500 million will be invested in Park is part of the development of the 20,000 square metres of modern research Solna Campus with the aim of becoming • The level of vacant space was 3.5 per laboratories at the Karolinska Institute Sci- the leading centre of life science innovation cent (3.2) of available space. ence Park in Solna. An important customer in the Nordic region. Close by is the devel- is the biopharma company Biovitrum, opment of the Norra Station area and a • The direct yield was 6.0 per cent which has signed a 15-year lease for new university hospital is planned directly (6.5). approximately 12,000 square metres for adjacent to the campus. occupation in summer 2009. The Science Sales During the year a number of properties have been sold: • Part of the Svea Artilleri block in Stock- holm was sold to Veidekke-Bouwfonds, primarily for residential construction. The sale is part of the Svea Fanfar project where Akademiska Hus is co-operating with Veidekke-Bouwfonds, the Royal University College of Music and the Stockholm Town Planning Office. In addi- tion to housing, a new College of Music will be built under the auspices of Aka- demiska Hus. • The Mölndal Växthuset 2 property in Mölndal, also known as Pedagogen, was sold to JM, which is planning to construct residential properties. • Part of the Seminariet block in Uppsala Akademiska Hus sponsored the project Julstaden och Ljusstaden Göteborg. On the university campus in has been sold to NCC, which among central Gothenburg part of the Christmas decorations could become an all-year-round attraction. other things plans to construct residential Photo: Patrik Gunnar Helin properties. 2 Akademiska Hus Annual Report 2006 | Review of the year 10th anniversary of Akademiska Rodden Akademiska Rodden in Stockholm cele- brated its 10th anniversary in September with the traditional rowing race at Brunns- viken, beside Kräftriket on the Frescati campus in Stockholm. Akademiska Rodden is one of the largest rowing events in Sweden Green Roof Award and is arranged by Akademiska Hus. Akademiska Hus has received the Students and personnel from customers in 2006 Green Roof Award from the Stockholm compete in four-man boats with Scandinavian Green Roof Associ- a cox. In 2007, the event will be expanded ation. The award-winning Green into a national event for students. Roof can be found on a newly constructed building on the Royal Institute of Technology Campus in Stockholm with the Swedish New President and CEO National Defence College as the During 2006, Thomas Norell took over as the customer. The roof has been cov- President and CEO of Akademiska Hus. Thomas ered in easily maintained stone- has been the Vice President of the Group since crop plants which contribute to 1993. He succeeded Joakim Ollén, who resigned creating a more attractive setting. from his position on October 17. It also has a number of environ- mental benefits, including purifica- tion of rainwater. Christmas Lights An inauguration dance at the new University College of Dance building in project in Gothenburg Stockholm on September 29. Akademiska Hus has been involved in Photo: Håkan Larsson sponsoring the Gothenburg lighting project Jul- och ljusstaden. In Decem- ber the city streets and facades were decked in lights in an area extending from the Gothenburg Opera House on the river front along Kungsportsave- nyn up to the Gothenburg Art Museum at the top of Avenyn. By Akademiska Hus illuminating the campus at Ren- University of Dance moves into new premises strömsparken, located behind the Art Museum, the area could be extended During the autumn the University College for experiments which with advances in all the way to Liseberg. The Jul- och of Dance moved to the Royal Institute of technology can now be simulated on ljusstaden project aims to attract visi- Technology Campus in Stockholm.

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