Interim Report 2021 1 January - 30 June Q2 • Acquisition of property worth SEK 1.9 bn from Higab • Development of new logistics property for NTEX • Real estate combination transaction with Volvo Cars: New development of logistics property and disposal of office properties • Platzer share receives Nasdaq Green Equity Designation • Platzer added to EPRA Index Properties • Platzer receives investment grade rating BBB- 70 • Rental income increased to SEK 589 million (571) • Income from property management increased to SEK 365 million (355) • Profit for the period increased to SEK 781 million (574) Property value SEK 24 billion • Property portfolio increased to SEK 24,386 million (22,575) • Earnings per share totalled SEK 6.49 (4.76) Key Performance Indicators Q2 2021 Q2 2020 Lettable area Long-term net asset value (EPRA NRV) per share 101.38 88.34 847,000 sq. m. Interest coverage ratio (multiple) 4.2 4.0 Loan-to-value ratio, % 49 50 Investment yield, % 3.8 4.2 Surplus ratio, % 77 76 Economic occupancy rate, % 91 94 Platzer Fastigheter Holding AB (publ) PO Box 211, SE-401 23 Gothenburg | Visiting address: Kämpegatan 7 +46 (0)31 631200 | [email protected] | platzer.se Registered office of Board of Directors: Gothenburg | Corporate ID Number: 556746-6437 2 CEO’s comment Platzer Q2 2021 Property transactions, new lettings and investment grade for green Platzer The quarter just ended was a very eventful period to say the least for our company. We concluded our second largest property transaction ever, we broke new ground by letting projects in the logistics segment, we received an investment grade rating, we are now included in the EPRA real estate index and we became the first Large Cap company to receive the Nasdaq Green Equity Designa- tion. At the same time, our day-to-day operations are continuing apace. As I sit at my keyboard writing this CEO comment, I am both proud of and grateful to our staff and partners for their incredible input. Strategic property transactions create value Through the acquisition of three properties – Odontol- ogen, Biotech Center and Hälsovetarbacken – at an un- derlying property value of SEK 1,875 million from Higab at Campus Medicinareberget we are moving into a new, interesting geographical area that already has strong and stable tenants and a very exciting future. Campus Medicinareberget, which is located next to Sahlgrenska Hospital and Sahlgrenska Science Park, is an incubation space for existing and new Life Sciences businesses. We see great potential for us to be involved in the continuing development of the area in cooperation with tenants and other property owners. We have sold two of our office properties, Sörred 8:11 (AB Volvo’s former head office) and Sörred 7:24 in Tors- landa in a real estate exchange transaction with Volvo Car Corporation (VCC). Under the swap, VCC is signing a ten-year lease for around 20,000 sq. m. of industrial/logis- tics facilities at the property Syrhåla 3:1 and will receive a deduction on the purchase consideration as part of the exchange transaction. In total, the net value of the sale is SEK 304 million. The property transactions clearly reflect our strategy for area development: to create value by taking a leading position in selected segments of the market. The acqui- sition from Higab at Medicinareberget means we are en- tering a new, exciting area and our ambition is to actively contribute to the development of the area. The sale and lease arrangement with VCC enables us to streamline our property portfolio by selling our office properties in Tors- landa and concentrate our focus in the area on becoming a leader player in industrial/logistics property. We are also strengthening our relationship with VCC, which is one of the key players in ensuring that Torslanda continues to develop into an even more attractive area to work in. 3 CEO’s comment Platzer Q2 2021 Project lettings in industrial/logistics and pos- First Large Cap company to receive Nasdaq’s itive net lettings in the office segment Green Equity Designation We achieved positive net lettings in our office proper- Our long-term efforts to create an increasingly sustaina- ty segment in the second quarter too. At the time of ble Platzer are producing results, both through improved writing, there are no statistics to share about the overall key ratios in the business, such as reduced energy letting market in Gothenburg in the second quarter, but consumption and reduced carbon footprint, and through I believe the trend of growing vacancy rates has been the company achieving various green distinctions. Our reversed and that demand for office property is more share was classified as green a while back, our financing stable. is becoming increasingly green and a very large propor- Our industrial and logistics property segment is seeing tion of our properties are environmentally certified. In strong demand for newly produced logistics facilities in the second quarter, Nasdaq launched its “Nasdaq Green particular. We are pleased to have concluded two project Designation”, the aim of which is to make it easier for in- lettings in the quarter for a total of 35,000 sq. m. and with vestors to find sustainable companies on the Stockholm a rental value of just over SEK 26 million. These are not yet stock exchange. We are proud to be the first Large Cap showing in our net lettings since occupancy is scheduled company to receive the Nasdaq Green Designation. for later than 18 months from now. We are developing Gothenburg with its 500th Investment grade rating with stable outlook anniversary in mind from NCR On 4 June 2021, Gothenburg celebrated its 400th anni- Early on in the pandemic it became apparent that an versary. Due to Covid-19, the celebrations were severely investment grade rating and the objective assessment it reduced and muted, which for someone like me, whose involves was very important in order to be given priority heart belongs to Gothenburg, felt very sad. Hopefully, by lenders in a financial system suffering from a lack of the celebrations will be postponed by no more than liquidity. In the autumn of 2020, Platzer’s Board of Di- a few years and not delayed until the 500th jubilee in rectors decided to lower Platzer’s target for the loan-to- 2121, when none of us will be around to see it. However, value ratio to not exceed 50% over time, and to establish the 400th anniversary did make me reflect on the kind the conditions for achieving an investment grade rating. of company I would like Platzer to be today and in the In the second quarter we were assigned the investment future. At a time when property is increasingly seen as grade rating BBB- with a stable outlook by Nordic Credit a commodity, “a money spinner”, where the owners are Rating (NCR), which in addition to providing increased only interested in the yield and don’t care about where security in turbulent times also improves our opportuni- the properties are located, who works with the proper- ties for obtaining financing on competitive terms. ties or who the tenants are, it feels good to be represent- ing a company where we can say with conviction that we EPRA index - boost for share price are participating in the development of Gothenburg into We knew that being included in an index where global a city that we can be proud of today and in the future. capital is invested widely across a sector (listed proper- A property company that delivers value for the owners, ty companies) and a geographical area (Europe) would employees and tenants of today without comprising the have a positive impact on Platzer’s share price. When it ability to create value for future generations of Goth- was announced that we would be included in the EPRA enburg residents. It is my hope that Platzer can remain index, our share price rose sharply. Since our IPO in 2013, such a company, so that when the 500th anniversary we have monitored the progress and opportunities to be comes along, they can look out over the city and point included in the index, but failed to pass due to, among to large numbers of areas and properties that Platzer other things, the EPRA index’s requirements for liquidity has helped to create for the benefit of the city and its in the share. The fact that we have now been included residents. reflects the fact that we meet the index parameters for inclusion, including the liquidity requirement, which I believe is partly due to us now being a Large Cap com- pany. We are pleased and grateful to be included i n the index and are in close contact with EPRA to ensure that we remain part of the index. However, we as a company P-G Persson, CEO are not able to fully impact liquidity in our share. 4 Theme Platzer Q2 2021 A city that is growing in every way Since the millennium, Gothenburg has grown by around 200,000 residents. This is equivalent to 10,000 new Gothenburg residents every year. At the same time, unemployment has remained lower than in both Stockholm and Malmö. Gothenburg has also recovered rapidly since the start of the pandemic. Now the city is getting ready to grow further. The city is expected to grow by 250,000 residents by 2050, and to add 120,000 homes and 100,000 new jobs. The pace of urbanisation in Sweden is higher than in many The robustness of the upturn is confirmed by the willingness of other countries.