The Annual Report January–December 2006

Wihlborgs Fastigheter AB The Annual Report January–December 2006

”We’re sitting in the middle of the flow of business prospects which means that we can react quickly and make decisions when the opportunity arises”

Anders Jarl Chief Executive Officer CONTENTS Wihlborgs is the leading property company in the Öresund 1 The year in summary region. The properties’ book value totals SEK 11 billion with 2 CEO’s review 4 History a lettable area of approximately 1 million sq.m. and an annual 6 Operations rental value of SEK 1 billion. 8 Organisation and employees Wihlborgs shares are listed on the Stockholm Stock Exchange, 10 The Environment 12 The share Mid cap segment. 14 Market overview 17 Property portfolio 32 Projects and development 34 List of property acquisitions and sales Invitation to the Annual General Meeting 36 Valuation principles 39 List of properties The Annual General Meeting of Wihlborgs Fastigheter AB (publ) will take place 46 Risk factors at 5 p.m. on Thursday 26 April 2007 at Slagthuset, Jörgen Kocksgatan 7A, Malmö. 47 Tax situation 48 Administration Report Shareholders wishing to attend the meeting must be included in the register of Financial reports shareholders maintained by VPC AB by 20 April 2007 at the latest, and must also 51 Profit and loss account send notification of their participation by letter to Wihlborgs Fastigheter AB, 52 Balance sheet 54 Changes in equity Box 97, 201 20 Malmö, or by e-mail to [email protected] or phone 55 Cash flow statement on +46 40 690 57 70 or fax on +46 40 23 45 52. 56 Accounting principles

62 Notes Notification must reach Wihlborgs by 4 p.m. on Friday 20 April 2007. 69 Audit Report 70 Corporate Governance Report The notification must state the shareholders’ name, civic registration number/ 78 Five-year Summary and corporate identity number, address, telephone number and number of shares Definitions owned. Shareholder with nominee-registered shares in order to participate must 79 Articles of Association re-register their shares in their own name with VPC AB. A request for such re-registration must be made in good time before Friday

MÄ JÖ RK IL T M 20 April 2007.

341 T 115 R K Y C K S A Production: Wihlborgs in collaboration with Financial information 2007 Pennan AB, Lund 2007. Interim report January-March: 26 April Svanenmärkt, license no. 341 115. Interim report January-June: 16 August Photographs: Marcus Carlsson, Bertil Hagberg, Ola Hansson, Interim report January-September: 1 November Stefan Larsson, Martin Palvén. Print: Markaryds Grafiska AB The year in summary

2006 entailed high transaction volumes both in terms of acquisitions and sales. Wihlborgs’ property portfolio has grown substantially through property acquisitions totaling SEK 3.6 billion. The acquisition total includes Tornet’s Malmö holdings of fourteen properties and the Ideon property in Lund. The sales amounted a total purchase price of SEK 1.6 billion. During the year, new full-year tenancy agreements amounted to SEK 80m with notices of termination amounting to SEK 60m. Profit after taxes amounted to SEK 850m (470m). May 2006 Wihlborgs implemented a 2:1 share split, one old share was replaced with two new shares. The split meant that the number of outstanding and registered shares increased from 19 214 182 to 38 428 364. Wihlborgs shares are listed on the Stockholm Stock Exchange, Mid cap segment. n Rental income for 2006 amounted to SEK 909m (736m) n The profit for the year after tax was SEK 850m (470m) n Earnings per share increased to SEK 22,12 (12,33) n The Board of Directors are proposing a dividend of SEK 5,50 (3,50) per share n Equity/assets ratio was 32.7 (34.8).

Key ratios1 2006 2005 Rental income, SEKm 909 736 Net operating income, SEKm 627 497 Profit after financial items, SEKm 1,064 649 Return on equity, % 26,6 18,2 Equity/assets ratio, % 32,7 34,8 Interest coverage ratio, multiple 3,3 2,9 Earnings per share, SEK 22,12 12,33 Cash flow per share, SEK 10,96 8,24 Dividend per share, SEK2 5,50 3,50

1. For definitions, see page 78. 2. This refers to the Board of Directors proposal of dividend for 2006.

Wihlborg ANNUAL REPORT 2006 A dynamic business in a dynamic region

n Dear Shareholders,

Wihlborgs’ business model for creating shareholder value is really quite simple. It’s a case of creating value for the customers and ensuring they are satisfied. But this demands that we as a landlord engage in our tenants’ (or customers as we like to call them) needs and activities. Today we are far from the traditional image of property management. For us it seems obvious to actively resolve our customers’ premises problems. This means that, together with our customers, we engage in discussion to arrive at a suitable position as well as an optimum design of the premises by starting from existing premises or a plot. The concentration on commercial properties is a case of concentrating all our efforts and resources on one area. The concentration on the Öresund region is ”To be best at meeting also quite obvious. It is a dynamic region which has excellent prospects for con- our customers’ requirements tinued, positive growth. and demands, we will concentrate our activities Growth in the coming year is estimated at 4.5 per cent. All it needs is a quick on commercial properties look at the map to see how close the Öresund region is to the Continent’s pop- in the Öresund region.” ulation centres. Even now, more people live in the Öresund region than any other region in the Nordic Area. Living and working life are now being quickly integrated despite certain remaining fiscal difficulties between Denmark and Swe- den. Despite this there are good opportunities for increased movement into the region as a whole. This is stimulated by good business prospects and recreation opportunities for employees. It is easy to attract skills that can be developed at one of the 14 universities and colleges as well as even more research villages and clusters that are found in the region. Or one of the service and knowledge companies that are established here. Furthermore, the region has a well-developed communications structure, both digital and physical, and which is continuously being developed. Altogether, this means that Öresund is becoming an even more attractive region. We are sat right in the middle of this – close to our customers and their requirements. In this way we can offer short decision ”We’re sitting in the paths and, not least, good premises which can be refined in good locations. middle of the flow of These are premises that we have been able to acquire thanks to our local business prospects which knowledge and long-term presence. That’s the other part of our business means that we can react – transactions and project development. This is where we create value quickly and make decisions through acquiring and redeveloping properties which, later on, are sold when the opportunity on to other serious managers. Our portfolio is dynamic and we expect arises.” that, in the long term, we will have an average turnover of approximately 1 0 per cent of our properties. In this way we will renew our portfolio and adapt to market development. During 2006 we were very active and increased our property portfolio by acquiring 45 properties in accordance with our acquisition strategy for a value of SEK 3.6 billion. As the same time we have disposed of 17 properties for a total value of SEK 1.6 billion. And I feel that we have been successful. During our second full year as an independent company, we increased our result from SEK 470m to SEK 850m, an increase by approximately 80 per cent. We will therefore continue along the chosen path by acquiring and managing commercial properties that can be developed in our carefully-selected strategic areas. Thereby strengthening our positions.

”Realised and In plain words this means a strong presence in Lund, for example, which for vari- anticipated interest ous reasons is highly interesting and is therefore given priority. It is against this increases will provide background that we should view the acquisition of Ideon AB. An area where we see a correction of considerable development potential. I am convinced that we can do a lot more market prices.” with the property. But we also view it as a way to establish and develop interesting relationships within an area that is interesting for a number of reasons. We will also strengthen our existing significant presence in different ways at Dockan in

Wihlborgs ANNUAL REPORT 2006 Photo: Marcus Carlsson

Västra Hamnen since Malmö’s office market is growing outwards towards the harbour at an ever-increasing rate. This is where we will be moving ourselves during the summer. This means that we will be moving nearer to many of our customers. Copenhagen is another priority area where we already have a presence. We will be increasing our presence in order to create a critical mass for effective manage- ”And we have ment. At the same time we will gain a bridgehead for further development on the the resources to invest Danish side of the Öresund region. A market which after many years of stagnat- in good properties.” ing lease levels is beginning to appear increasingly interesting. The recent time’s focus on environmental issues, and CO2 emissions in particular, is something we take very seriously. With the environment as an integral part of our ”Environment as activities, we are working continuously with environment-enhancing meas- an integral part” ures. Our long-term environmental objective until 2009 is to reduce the consumption of electricity and heating (kWh/sq.m.) by 6 per cent in our properties. I also believe that we will see a number of business opportunities as early as during the current year. I do not believe that we will see any major price falls. But a sufficient decline to initiate a number of sales of both good and less desirable properties. A trend that will possibly arise will also be strengthened by foreign investors changing their investment horizon. Within the framework of the given solidity, Wihlborgs’ balance sheet can withstand further acquisitions to the value of approximately SEK 2 billion. Refer also to the income statement. We have traditionally chosen to finance our activities with a large proportion of variable interest rates since that has been shown to be the most profitable. To reduce interest costs during rising short-term interest rates in 2007 we use different interest derivatives. To our acquisition capacity I can add the 10 per cent renewal of the property portfolio that I spoke about earlier. I also expect that we will be able to expand our portfolio by a further 10 per cent through the profit and cashflows that we generate continuously. This is because I believe in good growth for 2007 with further reductions in vacancies. There was strong growth even in the fourth quarter of 2006. Independent assessors forecast good growth in Sweden and not least in the expansive Öresund region where integration is increasing at an ever higher rate. I have great confidence in our dynamic organisation with all its employees and their capacity to manage the properties in a competitive manner in the future thereby creating value for our customers. And I would like to take the opportunity to thank all employees for the organisation’s achievements in both development and management. Last but not least, I’m looking forward to an exciting 2007. Anders Jarl Chief Executive Officer

Wihlborgs ANNUAL REPORT 2006 History

n The Annual General Meeting of 9 May 2005 decided in accordance with the Board’s proposal to change the name of the Company from Wihlborgs Fastigheter AB to Fabege AB. This occured as a result of the impending distribution of the Company’s portfolio in the Öresund region under the Company Wihlborgs Fastigheter AB. The following section presents the history underlying the development of the property portfolio in the Öresund region. The company referred to below up to the year 2004 as Wihlborgs Fastigheter AB is the current Fabege AB.

1924 In 1924, master builder O P Wihlborg established a building company in Malmö that provided the name for Wihlborgs Fastigheter AB. For a pro- tracted period, the Company built, owned and administrated properties in Malmö.

1985 Building operations are sold to the Active Group, based in Malmö, and the Company becomes a traditional property company.

1990 Wihlborgs Fastigheter AB is listed on the Stockholm Stock Exchange’s O-List. Peab AB becomes the new majority shareholder in Wihlborgs Fastigheter AB.

1993 In conjunction with a new share issue of SEK 371m, Wihlborgs Fastigheter AB acquires 33 properties in Sweden, of which 22 properties are located in Malmö and Helsingborg. Bergaliden becomes the new major shareholder in Wihlborgs Fastigheter AB.

1995 Fastighets AB Stillman is acquired and Wihlborgs Fastigheter AB gains properties in Malmö, Lund and Landskrona with total lettable area of 44,000 sq.m.

1996 Wihlborgs Fastigheter AB acquires 76 properties with total lettable area of 178,000 sq.m. from Retriva (currently Kungsleden). Wihlborgs Fastigheter AB and Fastighets AB Storheden conduct an exchange of properties, through which the Company takes over 35 properties in Skåne with lettable area of 78,100 sq.m. The Board of Directors in Wihlborgs Fastigheter AB makes a public offer to acquire M2 Fastigheter AB on 22 November 1996, involving the acquisition of properties with lettable area totalling 364,000 sq.m. The company establishes a presence in Denmark through the acquisition of two properties.

1997 During the spring, Wihlborgs Fastigheter AB completes the acquisition of M2 Fastigheter AB. On 14 September 1997, the Board of Directors in Wihlborgs Fastigheter AB makes a public offer to acquire Klövern Fastigheter AB.

Wihlborgs ANNUAL REPORT 2006 1998 Wihlborgs Fastigheter AB completes the acquisition of Klövern Fastigheter AB and gains properties in Malmö and Helsingborg, as well as in other parts of Sweden and the Netherlands, with total lettable area of 934,000 sq.m. On 14 April 1998, Wihlborgs Fastigheter AB makes an offer for Fastighets AB Storheden. As a result, the Stockholm area becomes a key part of the Company’s operations.

2000 JM, Peab and Wihlborgs Fastigheter AB establish a new joint development company for the development of the Dockan district in Western Harbour, Malmö.

2004 Wihlborgs Fastigheter AB acquires the Stockholm-based property company, Fabege AB. In December, the Board of Directors in Wihlborgs Fastigheter AB proposes that the Annual General Meeting of 9 May 2005 approve the distribution and separate listing in accordance with Lex ASEA of the property portfolio in the Öresund region.

2005 The distributed company is given the name Wihlborgs Fastigheter AB and the distributing company changes its name to Fabege AB.

2006 Wihlborgs acquires 14 properties in Malmö with a total lettable area of 182,000 sq.m. from Tornet. Wihlborgs acquires Ideon AB in Lund by purchasing 40 per cent of the shares. The acquisition of the remaining shares is subject to government approval. The purchase includes the property Betahuset at Ideon (Vätet 1) totalling 24,000 sq.m. During May Wihlborgs implements a 2:1 share split, one old share was replaced with two new shares.

Wihlborgs ANNUAL REPORT 2006 Business concept, overall objectives and strategies

n Wihlborgs is a property company focusing on commercial property in the Öresund region. The criteria for long-term and acceptable value growth are created by activities being characterised by a clear, cashflow- oriented strategy where the creation and realisation of added value are important factors. Together with a clear dividend policy the overriding objective is to create a good overall yield for the shareholders.

Business concept Wihlborgs shall own, manage and develop commercial properties with a focus on well-functioning sub-markets in the Öresund region.

Overall objectives and strategies Wihlborgs aims to be the leading and most profitable property company in the Öresund market. To attain this, Wihlborgs must: n Consolidate and further strengthen its market positions in the Öresund region by concentrating on selected sub-markets. n Actively improve the property portfolio by purchasing, developing and divesting properties. Realisation of value growth will form a key part of the operations. n Actively and efficiently manage the property portfolio with the focus on high cost-effectiveness and a high occupancy rate by being a market leader in each sub-market. n Strengthen customer relations by active involvement and offering a high level of service in order to create the necessary conditions for long-term rental relationships. n Actively cultivate the rental market to obtain new customers and strengthen the brand in order to become the preferred choice for customers.

Financial goals Wihlborgs is to show: n A return on shareholders’ equity that exceeds the risk-free interest rate by at least four percentage points¹. n An equity/assets ratio of a minimum 25 per cent and a maximum of 35 per cent. n An interest coverage ratio to at least 2.0.

The above financial goals have to be achieved through the active development of assets and liabilities and capital structure. Wihlborgs shall always have a capital structure that gives the maximum return to shareholders, with due consideration of risk.

Wihlborgs ANNUAL REPORT 2006 Dividend policy Wihlborgs’ dividend policy is based, firstly, on transferring part of the profit generated by property management and, secondly, on transferring realized value growth: n The dividend is to amount to 50 per cent of profit from ongoing property management². n In addition, 50 per cent of realised profits from property sales are to be distributed³.

1. The risk-free rate of interest is defined as the rate on a 5-year Swedish government bond. 2. Pre-tax profit, excluding realised and unrealised changes in value, charged with 28 per cent standard tax. 3. Difference between the sales price and total capital invested, charged with 28 per cent standard tax.

Wihlborgs ANNUAL REPORT 2006 Organisation and employees

n Wihlborgs is characterised by a flat organisation with short decision paths. Wihlborgs’ organisation is designed to increase profit from day- to-day management while creating new business at the same time.

Legal structure Wihlborgs Fastigheter AB (publ), corporate ID number 556367-0230, is the parent company of a group with a total of 102 group companies and four joint ventures.

Joint Ventures Wihlborgs owns 40 per cent of Medeon AB. This is a marketing company that is operated together with Malmö Stad. Wihlborgs also owns 33.3 per cent of Dockan Exploatering AB. The company is engaged in the development of the new Dockan district located at Västra Hamnen in Malmö. JM and Peab each own equal shares in Dockan Exploatering.

Operating structure The operative organisation comprises Management and the Business Development function. Management is adapted according to local market criteria and is organised as seven geographically-distributed management units. The purpose is to create the criteria for management that is effective and close to the customer. Employees shall always be close to the customers and, in this way, meet tenants’ expectations and demands. Each management unit has a manager with a clear profit responsibility. Business development comprises two parts – Projects and Development, and Transactions. Projects and Development has a central role for improvements to the property portfolio and is responsible for new and redevelopment projects as well as procurement and monitoring. Investments in properties are prepared and evaluated by the respective manager together with a project manager. Investments in excess of SEK 10m shall be approved by the board. Transactions are responsible for all the company’s purchases and sales of properties. The transactions unit continuously monitors potential business. Evaluation is often performed in consultation with Administration to make the most of skills it has in terms of local market knowledge etc. When assessing property acquisitions the analyses conducted include the property’s long-term yield, technical standard, development potential and tenant structure. In addition to the operative organisation there are the group functions Economy/ Finance as well as Communication and IT. Group Management comprises the CEO, economy and finance director, property director, information director and assistant to the CEO. The responsibilities of group management include overall responsibility for strategy issues and business development, economic control and profit monitoring as well as issues concerning information.

Employees The skills and commitment of the employees are vital to the group’s development and for the quality of the service offered to customers. Staff policy is structured and strongly linked to the company’s activities. Employees are encouraged to engage in innovative thinking and their own initiatives since this is an important driving force for the company’s development.

Wihlborgs ANNUAL REPORT 2006 Group Management Purchase Economy/Finance

Environment Communication/IT

Management Business Development Malmö/Lund 3 management units Projects and Transactions Helsingborg 3 management units Development Köpenhamn 1 management unit

As at 1 January 2007, the number of employees was 77. The proportion of employees with an academic qualification was 29 per cent. The average age of the employees was 49 and the proportion of women amounted to 31 per cent. The largest age group that comprises 25 people was those aged 46-55. The company’s staff turnover in 2006 amounted to 13 per cent.

Sickness absence Wihlborgs has a low level of sickness absence which in 2006 amounted to 3.5 per cent. The proportion of long-term sickness absence of the total sickness absence for 2006 was 58.1 per cent.

Wellness Good health is a resource for the individual as well as the company. This is why wellness is of significant importance to Wihlborgs’ activities and profitability. All employees are offered wellness assessment and monitoring. Joint training is also offered in the form of different fitness activities.

Skills development Wihlborgs encourages its employees to engage in skills development and has partici- pated in a Växtkraft Mål 3 project since May 2006. The project is supported through the European Social Fund (ESF) which contributes to increased employment, equality between men and women, sustainable development as well as economic and social cohesion. Wihlborgs follows the approved skills development plan that has been drawn up according to the staff’s individual criteria and skills development requirements.

Incentive programme Employees in the group, with the exception of the CEO, benefit from the profit-sharing fund. The purpose of the profit-sharing fund is to stimulate employees to achieve predetermined objectives that are part of the company’s activities. A whole proportion in the event of maximum allocation corresponds to shares in Wihlborgs to a value of one base amount which is currently SEK 40,300. All employees receive equal shares in the fund irrespective of their position in the company. The share amount in the case of part-time employees or those who work only part of the year is adjusted. All funds that are allocated to the profit-sharing fund shall be invested in shares in Wihlborgs.

Wihlborgs ANNUAL REPORT 2006 The environment as an integral component

n Today’s growth has meant an increased awareness of the private sector’s important role in contributing to a sustainable society. The term sustainable business development is often used in these contexts. Wihlborgs’ environmental work is target-oriented and long- term and is operated as an integral component of both property management and business development.

Wihlborgs’ environment work Wihlborgs’ environmental work is based on the ISO 14001 standard where all manda- tory requirements are met:

Environmental survey

Environmental policy • Environmental aspects • Legislation and other Management review requirements meetings Develop Plan • Environmental objectives • Environmental management programme

Follow up Implement • Organisation and • Monitoring responsibility • Non-conformances, • Education and training corrective action and preventive measures • Document control • Communication • Explanatory documents • Activities control • Documentationn • Environmental audit • Emergency contingency measures

Environmental objectives for 2006 • Reducing heat consumption (kWh/sq.m.) by 1.5 per cent in comparison with 2005. • Reducing electricity consumption (kWh/sq.m.) by 2 per cent in comparison with 2005. • Converting oil-heated properties to district heating. The environmental objectives for 2006 were achieved, except for one oil-heated property.

Environmental objectives for 2007 • Reducing electricity and heat consumption (kWh/sq.m.) by 2 per cent in comparison with 2006. • All properties from between 1956 and 1973 shall be checked for PCB. • Compile a redevelopment plan for 2008 on the basis of this PCB inventory. Long-term environmental objective for 2007–2009: Reducing the consumption of electricity and heating (kWh/sq.m.) by 6 per cent.

Folksam’s Climate index 2006 • Folksam has assessed Wihlborgs’ environment work on the basis of the following criteria: Corporate-wide, Properties, Production, Goods transports, Business travel, Product design and Climate work. • Wihlborgs was presented in Ekonominyheterna on 30 November 2006 as one of the companies within the framework of “Next best in the class” where Wihlborgs took a leading position among property companies.

10 Wihlborgs ANNUAL REPORT 2006 New in the environmental area 2006 During the year Wihlborgs employed an environmental coordinator who will work full-time on planning, implementing, monitoring and developing Wihlborgs’ environmental work.

Environmental policy Wihlborgs’ environment work shall be a natural and integrated component of management, projects as well as purchases and sales of properties. Our environment work is continuous and objective for the purpose of preventing and reducing negative environmental impact. Activities shall be operated through the effective use of resources and employees’ environmental skills shall be continuously developed. We endeavour to harmonise solutions for energy and our tenants waste with the environment. Construction methods and materials are chosen with respect to the environment. Wihlborgs continuously improves its environmental work, where legislation is viewed as a minimum requirement, and conducts regular follow-ups.

Energy effectivisation 2006 Problem description: The property Utgrunden in Malmö was previously oil-heated. In line with environmental objectives for 2006, the property was converted from oil heating to district heating. Conversion also meant the replacement of technology and control functions. The controls function is now demand-regulated in part of the property.

ENERGY USAGE BEFORE AND AFTER CONVERSION

Month Before conversion After conversion kWh Kwh

Jan 147 340 80 000 Feb 130 970 63 116 Mar 130 000 52 725 Apr 103 685 23 133 May 68 760 15 228 Jun 39 291 22 525 Jul 38 200 1 730 Aug 40 200 221 Sep 62 210 2 831 Oct 88 405 39 807 Nov 108 050 45 983 Dec 136 427 81 579 Total: 1 093 538 428 878

Environmental auditing and building harmonised with the environment • An environmental audit is always conducted when a property is purchased. To facilitate and drive the environmental work there is a working group comprising representatives from property management and business development. • A natural part of Wihlborgs’ environmental commitment is to work with environmental programmes for all rebuilding and new building work. • Compliance with environmental requirements is demanded from our suppliers.

Environmental handbook and environmental database To facilitate day-to-day work, strict demands are made to ensure that environment- related information is available to employees. This information can be found in Wihl- borgs’ environmental handbook and is continuously updated. Wihlborgs has even developed and completed an environmental database that contains information on PCB, refrigerants, radon, oil separators etc for each respective property.

Wihlborgs ANNUAL REPORT 2006 11 The share

n Wihlborgs’ shares were listed on the Stockholm Stock Exchange’s O list on 23 May 2005. Wihlborgs have been on the Nordic Mid Cap list since October 2006. A 2:1 share split was implemented on 23 May 2006. At the end of the year the share capital amounted to SEK 192m distributed across 38,428,364 shares. Each share is entitled to one vote and each person entitled to vote at the annual general meeting may vote for the full number of shares held and represented by this person. All shares are entitled to an equal share in Wihlborgs’ profit. The company has not repurchased any of its own shares neither has the board exercised its authority to decide on a new issue of no more than 10 per cent of the remaining shares.

Market capitalisation and turnover In 2006 there was a turnover of a total of 22.4 million shares which corresponds to 91,000 shares per day. The figure is corrected for the share split on 23 May 2006. This corresponds to a turnover rate of 58 per cent of the average number of outstanding shares. At the year end the price of a Wilhlborgs’ share was SEK 142.75 which, with all outstanding shares, corresponds to a share value of SEK 5.5 billion. The highest and lowest quotation for the Wihlborgs’ share in 2006 was SEK 147.75 and SEK 92.75 respectively.

Dividend and dividend policy Wihlborgs’ dividend policy is based partly on transferring 50 per cent of the current investment result, and partly 50 per cent of the realised result from property sales. Both were reduced by a standard tax rate of 28 per cent. The board’s dividend proposal for 2006 is SEK 5.50 (3.50). This corresponds to a direct yield of 3.9 per cent based on the share price at the end of the year. If the annual general meeting approves the board’s proposal for a dividend of SEK 5.50 and the record day of 2 May, the dividend will be paid on 7 May 2007. The Wilhlborgs’ share will be traded including the dividend up to and including the day of the annual general meeting, Thursday 26 April 2007.

2:1 Share split Wihlborgs implemented a 2:1 share split which means that one old share will be replaced with two new shares. The number of shares increased from 19,214,182 to 38,428,364. The share split was registered on 10 May and the first day of trading after the split was 23 May 2006.

Shares development 2006 Shareholders, 31 Dec 2006

SEK Number of shares (‘000) 150 Source: SIX / Hallvarsson & Halvarsson AB 5 000 140 ■ International owners, 30.3 % 130 4 000 ■ Swedish legal persons, 24.8 % 120 ■ Swedish private individuals, 22.7 % 110 3 000 100 ■ Funds, 10.7 % 90 2 000 ■ Financial companies, 6.3 % 80 ■ Insurance, pension AP funds, 3.6 % 70 1 000 60 ■ Association organisations, 1.6 % 50 0 may jun jul aug sep oct nov dec jan feb mar apr may jun jul aug sep oct nov dec 2005 2006 Wihlborgs OMX Stockholm SX4040 Real Estate Wihlborgs – Number of shares traded (’000)

12 Wihlborgs ANNUAL REPORT 2006 Ownership structure The largest shareholders in Wihlborgs are Maths O Sundqvists company and Brino- va Fastigheter AB who own 10.7 and 10.1 per cent of the shares respectively. At the end of 2006, the ten largest shareholders held 38.3 per cent of the shares and the number of shareholders amounted to 29,437. This is a fall of around 2,000 shareholders. The proportion of foreign owners at the end of December amounted to 30.3 per cent, an increase of 7.1 per cent since the previous year end. Of the foreign owners, 34 per cent are from the USA, 17 per cent from Luxembourg, 15 per cent from Great Britain, 9 per cent from The Netherlands and 25 per cent from other countries.

Information to shareholders All Wihlborgs’ shareholders have been asked if they would like printed financial information from Wihlborgs. To the shareholders who so wish, Wihlborgs distributes the annual accounts and three quarterly reports. Press releases of unaudited notes to the accounts are not printed. All financial reports and press releases are available on Wihl- borgs’ website at www.wihlborgs.se. The website has been available in English since the beginning of 2007 as are Wihlborgs’ press releases. The website also contains current information on the movement of Wihlborgs’ shares. Contacts with the share market take place in connection with the quarterly financial reports through press releases and corporate presentations in different contexts with investors, analysts, share savers and others.

SHARE DATA Abbreviated name WIHL Listed since 2005 Traded Stockholm Stock Exchange List Mid Cap Sector Financials Trading block 100 shares Largest shareholders in Wihlborgs at 31 december 2006 Number of shares Perc. of share capital thousands and voting rights, % Maths O Sundqvist with company 4,110 10,7 Brinova Fastigheter AB 3,867 10,1 Investment AB Öresund 2,000 5,2 Länsförsäkringar Fund 915 2,4 SEB Funds 885 2,3 Robur Funds 866 2,2 HQ Funds 750 2,0 Mats Qviberg including family 569 1,5 Förvaltnings AB Färgax 450 1,2 Fjärde AP-fonden 316 0,8 Shareholders reg. abroad 11,652 30,3 Other shareholders reg. in Sweden 12,048 31,3 Total outstanding shares 38,428 100,0

Distribution of shares at 31 December 2006 Number of Number of shares Per cent shareholders thousands of shares 1–100 12,432 388 1 101–500 13,410 3,184 8 501–1000 2,003 1,507 4 1001–5000 1,231 2,607 7 5001–10000 148 1,072 3 10001–100000 164 5,030 13 100001–500000 37 8,997 23 500001–1000000 6 4,217 11 1000001–2000000 5 11,426 30 Total 29,437 38,428 100,0 Källa: VPC AB

Wihlborgs ANNUAL REPORT 2006 13 Market overview

n Growth within the Öresund region during 2004 was good and in 2005 it accelerated further. According to the Øresund Institute the major breakthrough came in 2005 and we can talk about the “ketchup effect”. This concerned primarily the housing and employment markets.

“Ketchup effect” in the Öresund region The Öresund region has not experienced such a strong business cycle since around 1990 and the region’s economy has not been so optimistic about the future at any time during the period from 1996 to 2006 according to the weighted indicators that the Øresund Institute has compiled from the Danish consumer confidence indicator and the Swedish confidence indicator CCI. In terms of the Öresund region, the strong business cycle means that the region is experiencing its most expansive stage to date and that the integration of the housing and employment markets has suddenly happened very quickly. In 2006, 4,700 Danes moved to Skåne, of which 2,900 moved to Malmö. This represents a 50 per cent increase in the inflow to Skåne. Commuting across the Öresund Bridge has also increased significantly. In 2006, 14,000 commuted daily across the bridge. In total there were 20,000 people who gained some of their income from the other side of the sound. On average approximately 60,000 people travelled over the bridge every day. This represents a 17 per cent traffic increase in 2006. Approximately 3,630,000 people live in the region (Zealand and Skåne). The population is also on the increase, primarily on the Swedish side. This is a consequence of the integration that has meant that more and more Danes are moving to Skåne. The increasing inflow creates an increased demand for commerce and service which, in turn create an increased demand for activities within these sectors. In the long run this growth will drive an increased demand for all types of commercial premises.

The region creates growth The business climate continues to be strong in Denmark and Copenhagen. The business climate has also improved in Skåne with a greater demand for manpower. This

Expectations of the future from the households in the Öresund region Per cent

14 Wihlborgs ANNUAL REPORT 2006 has similarly resulted in an increased demand for premises. An important factor of this growth is the mobile telephone cluster that has emerged in the region of which SonyEricsson is an example of a significant and expansive motor. There is also significant growth in medicine and biotechnology where cross- border collaboration such as Medicon Valley has had a positive effect. A growing number of companies in the region experiences an increase in turn-over and profit. This leads to more new jobs and investments which, in turn, create an increased demand for commercial premises. The region is also characterised by a large number of projects in progress such as Brunnshög in Lund and Västra hamnen, Hyllie and Citytunneln in Malmö. Activity within the construction industry is also high in Copenhagen. Copenhagen’s local authority expects the population to increase by 40,000 over the next 15 years. The number of housing projects increased by a factor of five from 800 in the year 2000 to 4,000 in 2005. In 2006 the capital city region was responsible for approximately 30 per cent of the total investment in properties. According to the trade organisation Dansk Byggeri, 2007 will be at the same level or higher. Evidence that the Swedish side of the Öresund region is interesting is shown by the increasing number of new companies and primarily Danish companies. It is worth not- ing that the Danish/Norwegian property insurance company TrygVest chose to establish its Swedish head office in Malmö. This is an interesting break in the trend since insurance companies tend to establish their national offices in the capital city regions. Approximately 60 per cent of the Swedish subsidiaries in Denmark are in Greater Copenhagen and 24 per cent of the Danish subsidiaries are in Skåne. In terms of the populations of Denmark and Sweden, 35 per cent in the capital region and 13 per cent in Skåne are an over-representation of around 100 per cent. When the Øresund Institute measured the capital city regions’ attractiveness in Feb- ruary 2006 on the basis of the US business magazine Forbes’ list of the world’s 403 largest companies in seven selected industries and how they are localised in the Nordic Region, it was found that the Öresund region and Stockholm together had 86 per cent of the 112 Nordic head offices of which Stockholm had 49 and the Öresund region 47. Growth also indicates a shift towards the Öresund region after the year 2000. Skåne in particular is forging ahead with 8.5 new head offices in advance of Oslo, Gothenburg and Helsinki.

Forecast GNP growth (real in %) Number of established / reorganised Nordic head offices per region and time Before 2000 2000 and after Total

Stockholm Öresund region of Copenhagen of Skåne Gothenburg Oslo

Real in per cent Sweden Helsinki Denmark Odense/Vejle

Total

Source: Nordea, Danske Bank, DnB NOR, Øl Source: Øresundsinstituttet

Wihlborgs ANNUAL REPORT 2006 15 Stronger business climate Swedish business and commerce is undergoing structural change. The greatest growth is occurring in the services and trade sector whereas the industrial sector is experiencing decline. This is where Skåne has the advantage since there are many knowledge companies in the region which can fill the gaps when industrial companies cut back. The knowledge content is on the increase within most activities where SonyEricsson can be seen as one of the many examples. Their growth creates a large number of peripheral companies that serve the tele- coms sector in different ways. It is also expected that the business climate will continue to be strong and most indicators show furthermore that this will be stronger in Skåne than the rest of the country because of the Öresund region. The gross regional growth is expected to be 4.5 per cent during 2006–2007. This is growth that will be significant for both Denmark’s and Sweden’s economies since the Öresund region makes up 26.7 per cent of both the countries’ overall economy. Monetary policy remains expansive in both Denmark and Sweden. This further strengthens the business climate. There is a risk that the economy could overheat. There are signs in housing and commerce. In Copenhagen the effects have even reached the employment market that is suf- fering from the lack of available resources, something which now benefits the employment market in Skåne. According to Skat Øresund, the number of Swedish-registered taxpayers increased in Copenhagen by 150 per cent under 2006. This shows acceleration in employment market integration across Öresund. Above all, young people in Skåne are experiencing a more favourable situation than in other parts of Sweden. Unemployment among young people aged 18-24 in Malmö is 1.2 percentage units lower than the country overall. According to the Regional Employment Board in Skåne, employment opportunities are expected to increase by 2.6 per cent during 2007 and this is attributed to good domestic and Danish demand for manpower. The official level of unemployment is forecast to be 3.6 per cent at the end of 2007. For Skåne this means that the labour force can upgrade its skills and the costs of unemployment can be reduced. For Denmark this means that the favourable business climate can be extended, that new knowledge is brought into the country and that Danish business and commerce can expand into the Swedish market.

Sources: The Øresund Institute and the Skåne Regional Employment Board

Unemployment youths Unemployment total Per cent Per cent

Malmö Malmö Country Country

Sourse: AMS Sourse: AMS

16 Wihlborgs ANNUAL REPORT 2006 Wihlborgs property portfolio n PROPERTY PORTFOLIO AS OF 31 december 2006 Wihlborgs’ property portfolio consists of commercial properties in the Öresund region, located in Malmö, Helsingborg, Lund and Copenhagen. As at 31 December 2006, the property portfolio comprised 219 properties with a total lettable area of some 1,160,000 sq.m. Fifteen of these properties have a site leasehold right. The book value of the properties was SEK 10,888m, which corresponds to the properties’ assessed market value1. The total rental value was SEK 1,079m and the con- tracted rental income was SEK 987m on an annual basis. The economic occupancy rate was 92 per cent. The properties in Malmö and Helsingborg accounted for 86 per cent of the total rental value and 84 per cent of the properties’ book value. The rental value of office and retail properties, in addition to industrial and warehouse properties, totalled 70 and 28 per cent of the total rental value respectively.

The properties in Malmö and Helsingborg, where Wihlborgs is one of the leading property companies, are divided into sub-markets with different market conditions. Malmö is divided into the sub-markets of Centre & Western Harbour, Fosie & Lim- hamn and Northern Harbour & Arlöv. Centre & Western Harbour, with a lettable area of 290,000 sq.m., is Wihlborgs’ largest single sub-market. Helsingborg is divided into sub-markets of Centre, South and Berga. The Centre sub-market is Wihl- borgs’ largest sub-market in Helsingborg. In the rest of the Öresund region, Wihlborgs primarily owns properties in Copenhagen and Lund with a property value of SEK 1,713m.

Wihlborgs implements regular value-creating project Helsingborg within the existing property portfolio by conversion, Copenhagen Lund extension and new production. Projects & land account Malmö for SEK 550m of the total book value of the properties. Wihlborgs’ largest development area is the Dockan area, in Western Harbour in Malmö. Wihlborgs current and Wihlborgs’ property portfolio is located in the Öresund region – the future building rights in the Dockan area are estimated most densely populated region in the Nordic region with 3,6 million inhabitants, of whom 2,4 million live in Denmark and 1,2 million in at 90,000 sq.m. Sweden.

Rental value Rental value per Book value Book value per region property category by region by property category

Helsingborg, 31 % Malmö, 55 % Industrial/Ware- Office/Retail, Helsingborg, Malmö, 57 % Project & land, Office/Retail, house, 70 % 27 % 5 % 75 % 28 % Industrial/ Ware- Project house 20 % Rest of & land, Rest of Öresund, 2 % Öresund, 14 % 16 %

1. Wihlborgs reports its investment properties (in accordance with IAS Investment Property) at their market value, which means that the book value corresponds to the market value of the investment properties. Properties classified as project properties (according to IAS) are reported at their acquisition value. With the exception of a land site in Malmö, all Wihlborgs properties are classified as investment properties.

Wihlborgs ANNUAL REPORT 2006 17 PROPERTY PORTFOLIO AS OF 31 DECEMBER 2006

The schedule presented below is based on Wihlborgs’ property portfolio as per 31 December 2006. Rental income refers to contractual rental income on an annual basis as of 31 December 2006. Net operating income is based the earnings capacity on an annual basis as of 31 December 2006, proceeding on the basis of the contractual rental income, operating and maintenance costs and property administration over a rolling twelve months and property tax and ground rent.

DISTRIBUTION BY REGION AND PROPERTY CATEGORY

Number of Lettable Ekonomic Rental Net op. Surplus properties area Book value Rental value occupancy income income Yield ratio sq.m. SEK M SEK/sq.m. SEK M SEK/sq.m. % SEK M SEK M % % Distribution per region Malmö 111 571,248 6,197 10,849 592 1,037 93 548 384 6,2 70 Helsingborg 83 427,753 2,978 6,961 331 773 91 301 210 7,0 70 Rest of the Öresund region1 25 160,851 1,713 10,651 156 968 89 138 99 5,8 72 Total Wihlborgs 219 1,159,852 10,888 9,388 1,079 930 92 987 693 6,4 70

Distribution per category Offices/retail2 88 611,453 8,127 13,292 758 1 240 92 701 508 6,3 72 Industrial/warehouse 94 512,248 2,211 4,317 305 596 90 275 184 8,3 67 Projects & land3 37 36,151 550 15,205 16 434 71 11 1 0,2 8 Total Wihlborgs 219 1,159,852 10,888 9,388 1,079 930 92 987 693 6,4 70

Distribution by property category by region

Region/ Number of Lettable Ekonomic Rental Net op. Surplus property category properties area Book value Rental value occupancy income income Yield ratio sq.m. SEK M SEK/sq.m. SEK M SEK/sq.m. % SEK M SEK M % % Malmö Offices/retail 43 347,500 4,903 14,109 454 1,307 93 423 308 6,3 73 Industrial/warehouse 46 207,745 932 4,488 132 637 91 120 76 8,1 63 Projects & land3 22 16,003 362 22,628 6 362 90 5 1 0,3 20 Total Malmö 111 571,248 6,197 10,849 592 1,037 93 548 384 6,2 70 Helsingborg Offices/retail2 34 148,518 1,758 11,835 167 1,123 93 155 111 6,3 71 Industrial/warehouse 44 269,131 1,162 4,317 161 599 89 143 99 8,5 69 Projects & land 5 10,104 58 5,760 3 271 68 2 0 -0,4 -13 Total Helsingborg 83 427,753 2,978 6,961 331 773 91 301 210 7,0 70 Rest of the Öresund region1 Offices/retail 11 115,435 1,467 12,705 137 1,186 90 123 90 6,1 73 Industrial/warehouse 4 35,372 117 3,314 12 328 100 12 10 8,2 83 Projects & land 10 10,044 129 12,879 7 714 58 4 0 0,1 3 Total 25 160,851 1,713 10,651 156 968 89 138 99 5,8 72

Total Wihlborgs 219 1,159,852 10,888 9,388 1,079 930 92 987 693 6,4 70

DISTRIBUTION OF LETTABLE AREA BY REGION AND TYPE OF PREMISES

Lettable area by type of premises Region Offices Retail Industrial/warehouse Hotel Residential Other Garage Total Proportion sq.m. sq.m. sq.m. sq.m. sq.m. sq.m. sq.m. sq.m. % Malmö 284,367 36,545 222,817 2,947 11,981 10,768 1,821 571,246 49,3 Helsingborg 141,951 37,623 215,690 20,799 5,367 6,133 190 427,753 36,9 Rest of the Öresund region1 110,303 4,680 45,661 - - 208 - 160,852 13,9 Total Wihlborgs 536,621 78,848 484,168 23,746 17,348 17,109 2,011 1,159,851 100,0 Proportions, % 46,3 6,8 41,7 2,0 1,5 1,5 0,2 100,0 100,0

1. One property located in Hamburg, Germany, with lettable area of 8,107 sq.m., is reported in the rest of the Öresund region. 2. Two hotel properties located in Helsingborg, with lettable area of 21,262 sq.m. are reported in offices/retail. 3. According to the IFRS def. of project properties, Wihlborgs owns a project property – the site of the Dockan area in Malmö - with a book value of SEK 181m.

18 Wihlborgs ANNUAL REPORT 2006 Rental value and occupancy rate The total rental value of the property portfolio at 31 December 2006 amounted to SEK 1,079m, of which the rental value for vacant premises is estimated to account for SEK 92m. The properties’ total lettable area at 31 December 2006 was about 1,160,000 sq.m. The economic occupancy rate at 31 December 2006 was 92 per cent, with 93 per cent in Malmö, 91 per cent in Helsingborg and 89 per cent in the rest of the Öre- sund region. The occupancy rate for office and retail property was 92 per cent, with 90 per cent for industrial and warehouse facilities and 71 per cent for projects & land.

Rental income and lease structure For Wihlborgs property portfolio at 31 December 2006, contractual rental income on an annual basis was SEK 987. Rental income includes surcharges for property tax, heating and electricity costs that Wihlborgs passes on to tenants. Wihlborgs estimates that renal income as a whole is on a market level. At 31 December 2006, Wihlborgs has a total of 1,653 leases with a contractual rental income of SEK 951m and a average maturity of 3.5 years. Leases with a maturity of 3 years of more are normally subject to annual rent adjustments in view of changes in the consumer price index. Overall, the index clauses in Wihlborgs’ leases mean that rents rise at a pace of 90 per cent of the rate of inflation. Rental income from Wihlborgs’ ten largest tenants totalled SEK 211m on an annual basis at 31 December 2006, corresponding to 21 per cent of the contractual rental income.

Contractual rental income as Maturity structure for Wihlborgs’ per 31 December 2006 by lease valuE leases as per 31 December 2006 The ten largest tenants

Number Lettable Per 31 Dec 2006 Number Lettable Per 31 Dec 2006 Contractual size, SEK M leases area, sq.m. SEK M propo, % Expires in year of leases area, sq.m. SEK M propo, % Tenant Area Leases for renting premises Leases for renting premises >3,0 54 328 097 352 37 2007 434 178 637 143 15 TeliaSonera Malmö 2,0–3,0 38 100 712 93 10 2008 457 223 852 185 19 Malmö University College Malmö 1,0–2,0 136 191 979 186 20 2009 420 186 794 175 18 Teleca Malmö/Lund 0,5–1,0 181 136 630 125 13 2010 220 155 425 168 18 Elite Hotels Helsingborg 0,25–0,50 298 110 392 100 11 2011 52 106 436 94 10 Malmö City Malmö <0,25 946 123 336 95 10 2012 28 23 726 24 3 ABB Fastighet Malmö Total commercial leases 1 653 991 146 951 100 >2012 42 116 276 162 17 Green Cargo Köpenhamn/Hbg Residential leases 233 17 403 16 Total commercial leases 1653 991 146 951 100 Tullverket Malmö Parking spaces etc. 684 0 20 Residential leases 233 17 403 16 Region Skåne Malmö Total 2 570 1 008 549 987 Parking spaces etc. 684 0 20 Helsingborgs City Hbg Total 2 570 1 008 549 987

Trends in gross rental income and occupancy rate fot Wihlborgs property portfolio

Per 31 December 2005 Per 31 December 2006 Rental value, Economic Rental value, Economic SEK M1 occupancy, % SEK M occupancy, % Distribution per region Malmö 443 92 592 93 Helsingborg 275 91 331 91 Rest of the Öresund region2 121 87 156 89 Total Wihlborgs 839 90 1 079 92 Distribution per category Office/Retail3 566 92 758 92 Industrial/Warehouse 251 88 305 90 Project & land 22 83 16 71 Total Wihlborgs 839 90 1 079 92

1. Rental income during the period plus the rental value of vacant premises during the period. 2. One property located in Hamburg, Germany, with lettable area of 8,107 sq.m., is reported in the rest of the Öresund region. 3. Two hotel properties located in Helsingborg, with lettable area of 21,262 sq.m. are reported in offices/retail.

Wihlborgs ANNUAL REPORT 2006 19 PROPERTY EXPENSES

Operating expenses Wihlborgs’ largest operating expenses are heating, electricity and water as well as property upkeep. Examples of other operating expenses are insurance, security and alarm systems as well as refuse management. Operating expenses for the property portfolio during 2006 totalled SEK 153m. Wihlborgs is focusing in effectiveness in management and work continuously together with the tenants to reduce the operating expenses.

Repairs and maintenance costs Ongoing and scheduled repairs and maintenance measures are conducted to main- tain the state of repair and standard of properties. Costs for repairs and maintenance during 2006 totalled SEK 48m.

Property tax and ground rent State property tax is currently 1.0 per cent of the tax assessment value for commercial property and 0.5 per cent for residential and industrial property. Special properties are not subject to property tax. The tax assessment value for the property portfolio at 31 December 2006 amounted in Sweden to SEK 4,150m and the property tax amounted to SEK 33m. Of the Group’s total property tax, SEK 31m is passed on to tenants through rent surcharges. Ground rent for Wihlborgs’ 15 properties held on leasehold amounted to SEK 5m.

Distribution of responsibility between landlord and tenant Tenants in commercial premises, and primarily in industrial and warehouse premises, have a relatively large responsibility for both operating and maintenance expenses. Normally, Wihlborgs assumes responsibility for exterior maintenance and tenants for interior maintenance of the buildings. In Denmark, tenants are to a large extent responsible for all operating expenses.

Property administration Property administration consists mainly of expenses for rent invoicing, leasing and marketing. Wihlborgs expenses for property administration amounted to SEK 43m.

Rental income The net operational income in relation to the rental income, surplus ratio, was 70 per cent (69).

20 Wihlborgs ANNUAL REPORT 2006 INVESTMENTS Expenses arising from value-enhancing measures in existing properties are reported as investments and are not expensed. Examples of investments are costs arising from project development and customisation for tenants.

Investments amounted to a total of SEK 427m during 2006. The sum includes SEK 25m that, after an agreement with the city of Hamburg, has been paid for the freehold purchase of land for Wihlborgs’ remaining property in Hamburg. The sum also includes SEK 44m for the purchase of nine site leasehold rights in Fosie, Malmö.

The five largest investments made during 2006 were the building of a new office at Dockan in Malmö, the rebuilding of the properties Svea 7 in Helsingborg, Arma- turen 4 in Lund, Slagthuset and Förbygeln 1 in Malmö.

Planned investments in ongoing projects amounted to about SEK 413m, of which SEK 165m was invested as of 31 December 2006.

Wihlborgs ANNUAL REPORT 2006 21 22 Wihlborgs ANNUAL REPORT 2006 Malmö n In value terms, Malmö represents Wihlborgs largest location, with a total property value of SEK 6,197m as of 31 December 2006, corresponding to 57 per cent of the company’s total property value. Properties located in Malmö, Lomma and Burlöv are located in Malmö. The property portfolio in Malmö consisted at 31 December 2006 of 111 properties, of which 11 were held on leasehold, with a total lettable area of about 571,000 sq.m. The rental value of the properties totalled SEK 592m and the contractual rental income, as of 31 December 2006, was 548m on an annual basis. Of the property value, about 79 per cent were office and retail properties. The property portfolio in Malmö is divided into three sub-markets: Centre & Western Harbour, Northern Harbour & Arlöv and Fosie & Limhamn.

Centre and Western Harbour At 31 December 2006 the property portfolio in Centre & Western Harbour consisted of 36 properties with a lettable area of about 290,000 sq.m. 72 per cent of the lettable area is offices. The properties are mainly located in the old town and in the Dockan area in Western Harbour. In value terms, the largest properties are Erik Menved 37 and Skrovet 1 with lettable area of about 24,000 sq.m. and about 13,000 sq.m., respectively. Wihlborgs largest tenant in Western Harbour is TeliaSonera. The Dockan area is Wihlborgs largest development area with several projects in progress. In Dockan area of Western Harbour, Wihlborgs owns 10 properties with lettable area of about 90,000 sq.m. In recent years, Western Harbour and Dockan have attracted a number of major companies to establish a presence such as Sigma, TeliaSonera, Malmö University College and Duni. In June 2007 Teleca will move their head-office to Dockan. The newly produced premises in Western Harbour, with their modern and space-efficient facilities, thus have a competitive edge compared with Malmö’s relatively outdated office stock. Demand in the office rental market in Western Harbour is deemed favourable. During 2006 Wihlborgs acquired nine properties with a total area of 172,000 sq.m. in Centre & Western Harbour. Wihlborgs estimates the rent level in Centre & Western Harbour for modern office area at SEK 1,500–1,900 per sq.m. with a vacancy rate of about 2.9 per cent. Corresponding office rent for older office properties is estimated at SEK 1,200– 42 1,600 per sq.m. with a vacancy rate of 14.6 per cent.

61 59 60 Arlöv 36 Wihlborgs’ sub-markets in Malmö Wihlborgs’ properties in the City Centre and Western Harbour in Malmö. 37

Arlöv 44 Northern Harbour Northern Harbour 63 43

45 51 39 57 40 53 54 Western Harbour 62 13 49

14 50 33 12 Centre 17 55 15 34 46 16 11 Western Harbour 24 32 25 52 65 10 35

3 9 27 30 8 5 Limhamn 6 21 20 33 64 31 2 1 49 7 47 Centre 38 26 4 28 Fosie 18 48 56 41 22 19 The property portfolio in Malmö is divided into sub-markets; Centre & The properties in central Malmö are mainly located in Western Harbour and in Western Harbour mainly comprise office properties, Northern Harbour the old town. Western Harbour is Wihlborgs’ largest development area and & Arlöv comprise industrial/warehouse properties and Fosie & Lim- Malmö’s largest future expansion area. For property details, see List of properties. 92 Medeon hamn consist of office and industrial/warehouse properties. 29 7 Limhamn 74 91 23 86 96 93 72 73 87

Wihlborgs ANNUAL REPORT 2006 70 23 94 69 89 88

90 84

66 95 Fosie 85

83 75 82 79 78 80 68 77 81

76 67 24 Wihlborgs ANNUAL REPORT 2006 Northern Harbour and Arlöv The property portfolio in Northern Harbour & Arlöv at 31 December 2006 consisted of 41 properties with lettable area of about 163,000 sq.m. The properties in Northern Harbour consist mainly of office, industrial, warehouse and logistics properties that are favourably sited close to major transport links in the port area. Demand for warehouse facilities and terminal buildings are good. Demand for office area in Northern Harbour is determined largely by proximity to transport links. Since the ferry facilities will move from their current location in the port to Östra Hamnen, it is expected that demand for logistics premises and office will increase. During 2006 Wihlborgs acquired five properties with a total area of 37,000 sq.m. in Northern Harbour. Wihlborgs estimates that the rent level in Northern Harbour for industrial/warehouse is about SEK 700 per sq.m. and a vacancy rate of about 13 per cent. The properties in Arlöv consist primarily of small office and industrial properties. The tenants in the area are small and medium sized companies linked to Arlöv. Demand for premises in Arlöv is relatively weak. Wihlborgs estimates that the rent level in Arlöv for industrial/warehouse facilities amounts to about SEK 600 per sq.m. and the vacancy rate to 22 per cent.

Fosie and Limhamn At 31 December 2006, Wihlborgs property portfolio in Fosie & Limhamn consisted of 34 properties with lettable area of about 119,000 sq.m. Fosie is a well-established business zone in southern Malmö, which started to exploit in 1970. With its proximity to both the inner and outer ring roads, and well established public transport there is considerable interest in establishing businesses here. The property portfolio primarily consists of trading, industrial, logistics and office premises. There is considerable interest among both large as well as small size companies in establishing a presence in Fosie. Wihlborgs largest tenant in Fosie is ABB, which lets premises in the Boplatsen 3 property. During 2006 Wihlborgs acquired ten properties with a total area of 35,000 sq.m. in Fosie. Wihlborgs estimates that the rent level in Fosie for office area and industrial/ warehouse facilities amounts to some SEK 800 per sq.m. and the vacancy to 7 per cent. Limhamn’s business zone is located in Annetorp in west Malmö close to the Öresund Link. The zone is home to primarily small and medium size companies, which are mainly active in light industry. During the last years Danish companies have shown their interest in establishing here. Extensive housing projects are planned to be built adjacent to the business area. During 2006 Wihlborgs acquired one property with an area of 4,000 sq.m. in Limhamn. Wihlborgs estimates that the rent level in Limhamn for office area and industrial/warehouse facilities is about SEK 800 per sq.m. and the vacancy rate 3 per cent.

Wihlborgs ANNUAL REPORT 2006 25 26 Wihlborgs ANNUAL REPORT 2006 Helsingborg n In terms of value, Helsingborg represents Wihlborgs second largest location with a total property value as of 31 December 2006 of SEK 2,978m, corresponding to 27 per cent of Wihlborgs total property value. At 31 December 2006, the property portfolio in Helsingborg consisted of 83 properties, of which 4 are held on leasehold, with a total lettable area of 428,000 sq.m. At 31 December 2006, the rental value totalled SEK 331m and the contractual rental income was SEK 301m annually. The property portfolio in Helsingborg is divided into three sub-markets: Centre, South and Berga.

Centre At 31 December 2006, the property portfolio in central Helsingborg consisted76 of 21 properties with lettable area of about 108,000 sq.m. Centre consist primarily of offices and hotels, Elite Hotels is the largest tenant. In the autumn 2006 Svea 7 was opened after a comprehensive rebuilding. The building is fully let and consists of shops and offices.

59 58 The former Kongresscentrum (Kärnan Södra 9) has been rebuilt for60 the school Procivitas, with an area of 900 sq.m. Friskis & Svettis has expanded their areas with 65 62 53 500 sq.m. in the same property. Wihlborgs properties in central66 47 Helsingborg have variable officesizes from 100 up to 5,000 sq.m. 67 During 642006 Wihlborgs acquired six

71 properties in Centre with a total area of 35,000 sq.m. 74 70 63 52 50 69 51 72 Berga The rental market has shown an increased demand75 the last months, which 68 56 should lead to reducation of vacancies. 49 54 61 Wihlborgs estimates that the rent level and the vacancy rate for modern office48 area in the Centre amounts to about SEK 1,200–1,900 per sq.m. and about 6–7 per 57 cent, respectively. 55

14 Wihlborgs’ properties in central Helsingborg Wihlborgs’ sub-markets in Helsingborg

Berga

11 8 5 10 6 18 7 Centre 15 23 16 9 16 13 Centre 2 17

3 1

South

The properties in central Helsingborg comprise 40 per cent of the total portfo- Wihlborgs’ properties in Helsingborg are located in three sub-markets; Centre, lio value in Helsingborg. For property details, see List of properties. South and Berga. The property locations are fairly concentrated within each 24 sub-market, facilitating efficient property management. 33

Wihlborgs ANNUAL REPORT 2006 27

21 43

34 Planteringen 22 29 31 30 45

23 20

Söder 39 37 40 35 38 36 Hamn-City

25 41 44

46 26 27 28

South Wihlborgs owned 30 properties in the South sub-market, which consist of Harbour City and Planteringen, with lettable area of about 189,000 sq.m. The South sub-market consist primarily of industrial- and warehouse properties and large units for trading operations. An extension of high-volume trading facilities in the area is planned. Demand for properties, notably from logistics companies, is good. During 2006 Wihlborgs acquired two properties in South with a total area of 6,000 sq.m. Wihlborgs estimates that the rent level in South for industrial/warehouse is about 400–600 per sq.m. and some SEK 700–1,200 per sq.m. for retail facilities, with the vacancy rate generally at about 14 per cent.

Berga In Berga Wihlborgs owned 32 properties with lettable area of about 131,000 sq.m. The company’s properties in Berga mainly consist of flexible industrial buildings and office area. Berga is currently Helsingborg’s market-leading business zone and has transformed from an industrial to a trading zone. Berga will propably grow towards the Maria Park-area and Väla-area. During the past year, Berga has experienced a positive rent trend and declining vacancies. This depends on both increased demand and the fact that rents in central Helsingborg are rising, and therefore some companies seek cheaper alterna- tives in the outskirts of Helsingborg. Berga as a whole is a well-defined geographic area, permitting Wihlborgs to offer its tenants prompt service and to increase the efficiency of management of the property portfolio. During 2006 Wihlborgs acquired eight properties in Berga with a total area of 28,000 sq.m. Wihlborgs estimates that rent level for office area in Berga is about SEK 900–1,400 per sq.m. and for industrial/warehouse facilities to some SEK 650–900 per sq.m. Wihlborgs estimates that the vacancy rate in Berga is generally about 8 per cent.

Wihlborgs ANNUAL REPORT 2006 29 30 Wihlborgs ANNUAL REPORT 2006 Rest of the Öresund region n At 31 December 2006, the property portfolio in the rest of the Öresund region consisted of 25 properties with total lettable area of 161,000 sq.m. and a property value of SEK 1,713m. The rental value totalled SEK 156m and the contractual rental income at 31 December 2006 was SEK 138m on an annual basis. The property portfolio in rest of the Öresund region is divided up into three sub- markets: Copenhagen, Lund and Other locations.

Copenhagen As of 31 December 2006, Wihlborgs owned five properties. Total lettable area amounted to about 74,000 sq.m. Two of the properties are located in Lautraupvang in Ballerup Municipality, 15 km west of central Copenhagen. Lautraupvangs business zone consists of larger office properties, the tenants are primarily IT companies. Wihlborgs properties are good and located in a desirable area. The rent level in the area is about DKK 800–1,200 per sq.m. In Herlev, which is close to Lautraupvang, Wihlborgs owns one property with total lettable area of 35,000 sq.m. The former warehouse property has been converted to an office property. In connection with this an area of 6,500 sq.m. was created. The rent level for office area in Herlev is about DKK 600–800 per sq.m. During 2006 Wihlborgs acquired one industrial/warehouse property in Bröndby and one project property in Herlev. As of 31 December the vacancy rate amounts to 12.7 per cent in Copenhagen.

Lund Wihlborgs owns 11 properties in Lund, located in the city centre, Gastelyckans business zone and west. The total lettable area amounts to 70,000 sq.m. Wihlborgs owns attractively located office and retail properties in central Lund, close to the central station. The retail outlets mainly compete with Nova Lund, which is a newly established shopping centre in west Lund. The West includes industrial, office, warehouse and retail properties. Small and medium-size companies, particularly due to its proximity to the E22. The acquisition of Ideon AB will strengthen the company’s presence in Lund and Wihlborgs will gain a new bridgehead. The Vätet 1 property with a total area of 24,000 sq.m. was included in the acquisition. Wihlborgs estimates that the rent level in Lund for office area is about SEK 900–1,600 per sq.m. and for industrial/warehouse is some SEK 650–800 per sq.m. The vacancy rate is estimated at about 9 per cent.

Other locations The property portfolio in Other locations consists of six undeveloped sites in Lands- krona, one undeveloped site in Svedala, a warehouse property in S:t Olof and one office property in Hamburg. The total lettable area in Other locations amounted to 17,000 sq.m.

Wihlborgs ANNUAL REPORT 2006 31 Projects and development

CURRENT PROJECTS IN MALMÖ The biggest project in progress in Malmö is the construction of a new office building at Dockan for Teleca. The building will cover a total of 10,700 sq.m. and Teleca will lease 9,000 sq.m. of this area. The project is expected to be completed during the third quarter of 2007. The investment amounts to SEK 230m. The lease value of the property amounts to SEK 19m and the yield is expected to be 8 per cent. Renovation of Kunskapsskolan is in progress with the rebuilding of part of Båghal- larna at Dockan. The area comprises 3,000 sq.m. and will be completed in the third quarter of 2007. This investment amounts to SEK 57m. The lease value of the property amounts to SEK 6.3m and the yield is expected to be 8.8 per cent. During the year around 70 projects in Malmö was completed to a value of approximately SEK 110m.

Dockan at Västra Hamnen In the middle of the Öresund region in a historic part of Malmö, the old shipyard area is being converted into a modern district with commercial premises and housing. In the middle of Dockan there is the shipyard dock which was previously used for building ships and has now been converted into a modern harbour for small boats. With its mix of buildings, Dockan will become a district with hustle and bustle 24 hours a day. University colleges, secondary schools and other educational buildings will contribute to the dynamics. Many companies have already made themselves at home in their new premises. Good communications, proximity to the water and a pleasant workplace for employees are some of all the criteria that Dockan meets. When fully developed, 8,000–10,000 people will have their workplaces here. Wihlborgs is building here for a dynamic business climate and tailors new premises to meet tomorrow’s requirements for the companies who are considering moving here. The area exudes optimism and forward thinking. Dockan will become one of northern Europe’s most attractive areas for housing and companies.

Dockan Exploatering AB Wihlborgs, JM and Peab each own a third of Dockan Exploatering AB which, in turn, owns the undeveloped land within the Dockan. Dockan Exploatering AB was formed in 2000 to manage the development of the Dockan area. As and when detailed plans are completed, Dockan Exploatering AB will release undeveloped land to the owners which will mean that the company will not erect its own buildings. Wihlborgs will develop the commercial premises whereas JM and Peab will construct new housing. Through its part ownership of Dockan Exploatering AB, Wihlborgs expects in the coming years to add building rights corresponding to a gross area of 30,000 sq.m. In addition to part ownership of the development company, Wihlborgs owns land areas within the Dockan area with associated building rights that correspond to a gross area of approximately 50,000 sq.m.

CURRENT PROJECTS IN HELSINGBORG A large project was completed in Helsingborg in 2006. The property Svea in Centre a former hotel was converted into modern and flexible office premises and shop premises. The investment amounted to SEK 54m. All areas have been leased and the yield will be 9.3 per cent.

32 Wihlborgs ANNUAL REPORT 2006 During the year it is expected that around 50 projects in Helsingborg will be completed to a value of approximately SEK 45m.

PROJECT DEVELOPMENT Project development is an important part of Wihlborgs’ activities. Wihlborgs acquired the Carolus 32 property amounting to 65,000 sq.m. in May 2006. The property comprises hotels, shopping centres and housing. A three-dimensional property formation was implemented after which the hotel section became a separate property, Carolus 33, and was sold. The remaining part of Carolus 32 comprising 46,000 sq.m. of housing and shops was then sold as a company. A similar property formation took place in the property Erik Menved 37 where the housing section was broken out as a separate property – Erik Menved 38 – which comprises 5,083 sq.m. and 87 apartments. The investments decided upon in current projects amount in total to SEK 413m of which SEK 165m was invested at the turn of the year.

Wihlborgs ANNUAL REPORT 2006 33 List of Property Acquisitions and Sales January–December 2006

Operating income Property Municipality Area Category Area, sq. m Price, SEK M jan-dec, mkr1 Property acquisitions Quarter 1 Bronsdolken 10 Malmö Malmö Industrial/Wareh. 1,368 Bronsdolken 11 Malmö Malmö industrial/Wareh. 962 Flygledaren 9 Malmö Malmö industrial/Wareh. 5,821 Uven 9 Malmö Malmö office/Retail 7,101 Armborstet 4 Helsingborg helsingborg industrial/Wareh. 3,000 Olympiaden 7 Helsingborg helsingborg industrial/Wareh. 3,537 Värjan 12 Helsingborg helsingborg office/Retail 1,145 Total quarter 1 22,934 198 9,1

Property acquisitions Quarter 2 Carolus 32 Malmö Malmö office/Retail 65,098 Elefanten 40 Malmö Malmö office/Retail 14,004 Erik Menved 37 Malmö Malmö office/Retail 29,159 Grytan 3 Malmö Malmö industrial/Wareh. 2,398 Gäddan 6 Malmö Malmö office/Retail 2,570 Kirseberg 31:53 Malmö Malmö industrial/Wareh. 22,869 Luggude 7 Malmö Malmö office/Retail 2,087 Löplinan 7 Malmö Malmö industrial/Wareh. 2,489 Mandelblomman 5 Malmö Malmö industrial/Wareh. 3,227 Nils 21 Malmö Malmö office/Retail 29,674 Nils 24 Malmö Malmö industrial/Wareh. 560 Rosengård 130:403 Malmö Malmö office/Retail 8,647 Sparven 15 Malmö Malmö office/Retail 21,846 Spillepengsmarken 6 Malmö Malmö Project/land - Sufflören 3 Malmö Malmö industrial/Wareh. 2,315 Syret 12 Malmö Malmö office/Retail 1,955 Vipan 7 Malmö Malmö industrial/Wareh. 1,002 Vätet 1 Lund rest of Öresund office/Retail 24,228 Total quarter 2 234,128 2,698 85,9

Property acquisitions Quarter 3 Balken 10 Malmö Malmö industrial/Wareh. 3,725 Tågarp 16:19 Burlöv Malmö industrial/Wareh. 4,316 Belgien Norra 19 helsingborg helsingborg office/Retail 9,033 Huggjärnet 13 Helsingborg helsingborg industrial/Wareh. 4,027 Persien 14 Helsingborg helsingborg industrial/Wareh. 3,930 Persien 15 Helsingborg helsingborg industrial/Wareh. 3,930 Polisen 1 Helsingborg helsingborg office/Retail 5,021 Polisen 3 Helsingborg helsingborg Project/land 10,104 Terminalen 4 Helsingborg helsingborg office/Retail 3,507 Ellekaer 6 Herlev rest of Öresund Project/land 5,800 Total quarter 3 53,393 482 6,4

Property acquisitions Quarter 4 Bronsdolken 3 Malmö Malmö industrial/Wareh. 9,668 Bronsdolken 18 Malmö Malmö industrial/Wareh. 1,311 Stångbettet 15 Malmö Malmö industrial/Wareh. 3,957 Grusgropen 3 Helsingborg helsingborg industrial/Wareh. 4,875 Grusplanen 2 Helsingborg helsingborg industrial/Wareh. 2,305 Kniven 2 Helsingborg helsingborg industrial/Wareh. 5,085 Mörsaren Västra 13 helsingborg helsingborg industrial/Wareh. 3,999 Orkanen 5 Helsingborg helsingborg industrial/Wareh. 3,150 Sadelplatsen 10 Helsingborg helsingborg industrial/Wareh. 3,260 Abildager 8–14 Bröndby rest of Öresund industrial/Wareh. 14,512 Total quarter 4 52,122 205 1,6

Total property acquisitions 2006 362,577 3,583 103

1) Operating income from the properties acquired and sold are included in the net profit for the period.

34 Wihlborgs ANNUAL REPORT 2006 Operating income Property Municipality Area Category Area, sq. m Price, SEK M jan-dec, mkr1 Property sales Quarter 1 Dimman 11 Malmö Malmö office/Retail 11,008 Eskilstorp 14:99 Vellinge Rest of Öresund industrial/Wareh. 7,611 Kvartsen 7 Lund Rest of Öresund office/Retail 7,020 Spelmanshejdan 5 Trelleborg Rest of Öresund industrial/Wareh. 6,743 Total quarter 1 32,382 190 0,4

Property sales Quarter 3 Carolus 32 Malmö Malmö office/Retail 46,129 Carolus 33 Malmö Malmö office/Retail 18,969 Rödkallen 11 Malmö Malmö industrial/Wareh. 5,252 S:t Peter 3 Malmö Malmö office/Retail 2,850 Stillman 47 Malmö Malmö industrial/Wareh. 13,676 Sagan 1 Helsingborg helsingborg office/Retail 1,190 Svedala 122:71 Svedala Rest of Öresund office/Retail 1,150 Ndr Fasanvej 117 Fredriksberg Rest of Öresund office/Retail 3,226 Total quarter 3 92,442 1,221 22,2

Property sales Quarter 4 Hammaren 8 Malmö Malmö office/Retail 3,030 Hästhagen 4 Helsingborg helsingborg industrial/Wareh. 41,598 Sköldenborg 18 Helsingborg helsingborg office/Retail 861 Thalia 15 Helsingborg helsingborg office/Retail 810 Thalia 17 Helsingborg helsingborg office/Retail 932 Total quarter 4 47,231 149 5,1

Total property sales Quarter 2006 172,055 1,560 27,7

1) Operating income from the properties acquired and sold are included in the net profit for the period.

Wihlborgs ANNUAL REPORT 2006 35 Valuation principles

n Property valuation

Valuation of Wihlborgs’ Swedish properties Malmöbryggan Fastighetsekonomi AB and Savills Sweden AB have valued all of Wihlborgs’ properties in Sweden. The values of the properties are individually considered to correspond to the market value of the respective property. The market value has been defined in accordance with the International Valuation Standards Committee’s recommendation. “Market Value is the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently, and without compulsion”. Bearing in mind that the valuations constitute the basis for the group’s economic accounting, the valuation methodology and the accounting of the valuation results are for- mulated to conform to the international accounting standard IAS 40 (Investment Property) concerning the calculation and accounting of true value for the management properties.

Valuation basis Valuations are based on the following types of documentation: n Special quality-assured information from Wihlborgs within the framework of data related to contracts and data related to properties. n Information accessed from public sources including data on the properties’ land area and site leasehold as well as detailed plans for undeveloped land and development properties. n Market intelligence – current assessments of lease growth, level of vacancies and yield requirements at the time of valuation for the constituent geographic and characteristic market segments of the building stock. n Inspections.

Quality assurance process The information related to properties comprises unique characteristics for each valuation project as well as information on all lease contracts. The components of the information accessed from Wihlborgs’ different systems are the subject of a separate quality assurance process.

Yield requirements Per cent (%) Malmö Office 5.0 – 8.0 Industrial 6.8 – 9.0

Helsingborg Office 5.5 – 8.0 Industrial 6.5 – 9.0

36 Wihlborgs ANNUAL REPORT 2006 Market analysis In the case of the local authorities where most of the building stock is located (Malmö, Helsingborg, Lund and Burlöv), the market parameters that form the basis of the individual value assessments are summarised for 78 different geographic areas. The information is divided into four segments of the lease market – housing, offices, shops, warehousing/industry – and into three different parts of the property market – housing objects, commercial objects and industry objects.

The market parameters include assumptions on: n Vacancy level n Direct yield requirements n Growth in properties leased n Normalised operating and maintenance costs

Valuation methods Built properties intended for leasing are valued using a market simulation model. This means that the market value is assumed to correspond to the yield value that can be estimated from a five-year cashflow analysis using market-related parameters on assumptions for incoming and outgoing payments, estimating residual value and cost of capital. Future incoming lease payments are used as a basis for cashflow analyses for each lease object subject to current conditions in existing contracts during the current contract period. The lease payments that refer to future lease periods and for vacant premises are estimated according to individual assessments for each individual lease object. Value assessments regarding unbuilt properties including dereliction and redevelopment objects are made as direct estimates of the object’s newbuild value in a future market use bearing in mind dereliction and exploitation costs. Wihlborgs’ site lease- holds, with the exception of three objects in Helsingborg, Terminalen block, are valued as though Wihlborgs owned the land.

Valuation of Wihlborgs’ international properties Wihlborgs’ properties in Denmark have been valued by DTZ in Denmark on the basis that agrees with the Swedish valuation. The remaining property in Hamburg has been valued by Collier Property Partners.

Summary of the market valuation The following summary shows the value of Wihlborgs’ property stock at 31 Decem- ber 2006. The number of properties on 31 December 2006 amounted to 219.

Market value properties per Changes in the properties’ book value 31 December 2006, SEK m Changed item Malmö 6,197 Book value 1 January 2006 7,890 Helsingborg 2,978 Properties sold - 1,550 Rest of the Öresund region 846 Investments 427 Foreign country 867 Acquisitions 3,529 Total 10,888 Value regulation 629 Foreign-currency translation - 37 Book value 31 December 2006 10,888

Wihlborgs ANNUAL REPORT 2006 37 WIHLBORGS PROPERTIES IN Malmö

61 59 60 Arlöv 36

44 Northern Harbour 63 43

45 51 39 57 40 53 54 62

13 49

14 50 33 12 17 55 15 34 46 16 11 Western Harbour 24 32 25 52 65 10 35

3 9 27 30 8 5 6 21 20 33 64 31 2 1 49 7 47 Centre 38 26 4 28 18 48 56 41 22 19

92 Medeon 29 7 Limhamn 74 91 23 86 96 93 72 73 87

94 69 89 88

90 84

66 95 Fosie 85

83 75 82 79 78 80 68 77 81

76 67

38 Wihlborgs ANNUAL REPORT 2006 List of properties

MALMÖ

Constr. Year of Industrial/ Residen- Tax asess. No. Property designation Address Municipality T year value Office Retail warehouse Hotel tial Other Garage Total value, Lettable area, sq.m. SEK M Sub-market Centre & Western Harbour 1 Altona 5 Stora Nygatan 38 Malmö 1929 1980 512 181 693 5 2 Altona 22 Stora Nygatan 40 Malmö 1990 1990 701 70 771 6 3 Börshuset 1 Skeppsbron 2 Malmö T 1929 1987 4,478 864 5,342 65 4 Elefanten 40 Storgatan 20 Malmö 1988 1992 10,468 3,505 28 14,001 139 5 Erik Menved 37 Mäster Nilsg/ Kattsundsg/ Österg Malmö 1971 1971 17,459 3,385 3,219 24,063 181 5 Erik Menved 38 Mäster Nilsg/ Kattsundsg/ Österg Malmö 1971 5,028 5,028 33 6 Fisken 18 N Vallgatan 100–102/ Västerg 35 Malmö 1988 1988 6,713 21 6,734 66 7 Forskaren 1 Per Albin Hanssons väg 41 Malmö 1989 1997 16,536 225 271 17,032 122 8 Gäddan 6 S Neptunigatan 10/ Citadellsvägen 11 Malmö T 1965 1965 1,941 629 2,570 11 9 Högvakten 6 Gråbrödersg 2/ N Vallgatan 80 Malmö 1962 1986 3,056 545 3,601 37 10 Kolga 4 Jörgen Kocksgatan 4/ Stormgatan 12 Malmö 1929 2001 2,236 2,236 34 11 Kranen 1 St Varvsg 1/ Isbergs gata 1–13 Malmö 1965 10,308 10,308 0 12 Kranen 2 Högskolan Ö Varvsgatan 11 A–C Malmö 1954 15,967 650 707 17,324 0 13 Kranen 4 Ö Varvsgatan 23 Malmö 1976 1981 4,053 25 170 4,247 31 14 Kranen 6 Båghallarna Ö Varvsgatan 13 A–C Malmö 1964 830 5,615 3,050 11,495 0 15 Kranen 8 Ubåtshallen Ö Varvsgatan 9 A-B Malmö 2001 14,885 375 10 15,270 0 16 Kranen 9 Isbergs gata 15 Malmö 2001 2001 3,710 3,710 47 17 Kranen 11 Dockplatsen 1 Malmö 2000 2000 10,837 345 11,182 122 18 Luggude 7 Herrestadsgatan 2–4 Malmö 1945 1945 847 1,240 2,087 10 19 Malmen 12 Barkgatan 9-13 Malmö 1971 1971 7,501 10 7,511 35 20 Nils 21 Ö. Förstadsg/ Drottningg/ Fredriksbergsg Malmö 1965 1975 10,689 1,178 1,804 3,475 7,186 5,460 24,332 100 21 Oscar 4 Stortorget 25 Malmö 1935 1960 638 400 37 132 1,207 11 22 Priorn 2 S:t Johannesgatan 2-6 Malmö T 1944 1970 5,698 90 60 2,538 1,670 10,056 64 23 Ritaren 1 Ingenjörsgatan 11/ Stadiong 10 Malmö T 1967 1979 3,035 3,035 14 24 Skrovet 1 St Varvsg 3-7/ Isbergs gata 2 Malmö 2004 2004 12,461 459 12,920 180 25 Slagthuset 1 Carlsgatan 10-12/ Jörgen Kocksg 7 Malmö 1929 1992 8,658 8,225 130 2 777 336 20,126 125 26 Sparven 15 Drottningg 34/ Storg 15/ Ö, V Kanalg Malmö 1930 1960 13,563 7,254 20,817 73 27 Sqvalperup 12 Adelgatan 9-11/ N Vallgatan 60 Malmö 1929 1989 5,813 135 5,948 62 28 Uven 9 Diskontogången 2/ Lugna g 80-84 Malmö 6,091 1,010 7,101 54 Total office and retail properties 201,684 20,632 22,070 2,947 11,509 10,236 1,670 270,747 1 627 29 Hälsingland 1 Åmålsgatan 7-9 Malmö 1974 282 931 1,213 0 30 Nils 24 Drottninggatan 1 A-B Malmö 560 560 7 Total industrial and warehouse properties 282 0 1,491 0 0 0 0 1,773 7 31 Generalens Hage 49 Hospitalsgatan 16 Malmö 1936 1992 4,763 472 5,235 38 32 Hamnen 22:188 Hans Michelsensgatan 8-10 Malmö 1951 1951 1,057 770 6,277 8,104 6 33 Kranen 7 Ö Varvsgatan 15 Malmö 1957 1957 249 3,449 3,698 6 34 Kranen 10 Isbergs gata 17 Malmö 0 35 Sirius 3 Carlsgatan 14 Malmö 11 Total projects and land 6,069 770 9,726 0 472 0 0 17,037 61

TOTAL sub-market Centre & Western Harbour 36 208,035 21,402 33,287 2,947 11,981 10,236 1,670 289,557 1 696

Sub-market Northern Harbour & Arlöv 36 Arlöv 19:133 Hantverkaregatan 18 Burlöv 1962 1965 1,100 570 1,670 5 37 Arlöv 19:58 Hantverkaregatan 4 Burlöv 1929 1975 583 1,232 532 21 2,368 5 38 Höjdmätaren 1 Flygledaregatan 5 Malmö 1990 1990 840 1,057 1,897 6 39 Segeholm 12 Lundavägen 151 Malmö 1958 1984 7,212 795 1 123 8,007 42 40 Spillepengsmarken 8 Strömgatan 11 Malmö 1978 1978 2,502 520 3,022 16 41 Syret 12 Scheelegatan 19-21 Malmö T 1970 1970 295 1,660 1,955 4 Åkarp 1:69 Tegelvägen 4 Burlöv 1972 1974 5,277 5,277 22 42 Åkarp 1:83 Alnarpsvägen 54 Burlöv 1929 1970 641 264 905 3 Total office and retail properties 13,172 5,277 6,098 0 0 532 21 25,100 102 43 Arlöv 17:4 Arlövsvägen 23 Burlöv T 1975 1975 212 3,609 3,821 9 44 Burlöv 3:2 Smedjevägen 3 Burlöv 1974 1974 738 738 0 45 Finngrundet 4 Bjurögatan 23-25 Malmö 1963 1963 1,469 2,021 131 3,621 7 46 Flintan 3 Borrgatan 4 Malmö 1963 1963 246 3,031 3,277 4 47 Flygledaren 9 Höjdrodergatan 16 Malmö 1992 1992 5,616 5,616 17 48 Grytan 3 Industrigatan 21 Malmö 1980 1980 1,298 1,100 2,398 5 49 Gulsippan 4 Källvattengatan 9 Malmö 1992 1992 735 2,662 3,397 11 50 Hanö 1 Borrgatan 40 Malmö 1968 1974 673 519 3,888 5,080 10 51 Kirseberg 31:53 Strömgatan 3 Malmö 1994 1994 2,318 300 22,029 24 647 76 52 Skjutsstallslyckan 11 Lundavägen 60 Malmö 1958 1962 710 2,880 3,590 4 53 Spillepengshagen 1 Ågatan 8 Malmö 1967 1972 115 1,915 2,030 4 54 Spillepengshagen 3 Ågatan 4 Malmö T 1964 1964 5,724 5,724 12 55 Stenshuvud 3 Borrgatan 36-38 Malmö 1966 1976 3,327 590 13,441 17,358 49 56 Syret 13 Industrigatan 31-33 Malmö 1986 1986 1,585 1,585 4

Wihlborgs ANNUAL REPORT 2006 39 MALMÖ

Constr. Year of Industrial/ Residen- Tax asess. No. Property designation Address Municipality T year value Office Retail warehouse Hotel tial Other Garage Total value, Lettable area, sq.m. SEK M

57 Söderarm 11 Blidögatan 21-27 Malmö T 1966 1991 1,869 15,574 17,443 3 58 Tågarp 16:19 Hammarvägen 3 Burlöv 1972 1977 4,316 4,316 7 59 Tågarp 16:25 Hammarvägen 17 Burlöv 1966 1976 2,192 2,192 4 60 Tågarp 16:26 Hammarvägen 19 Burlöv 1971 1977 198 2,418 2,616 4 61 Tågarp 16:42 Företagsvägen 30 Burlöv 1968 1970 418 8,772 9,190 18 62 Utgrunden 8 Sturkögatan 8-10 Malmö T 1962 1966 10,084 10,084 10 63 Vinkeln 8 Arlövsvägen 9 Malmö T 1969 1987 1,954 6,842 8,796 29 Total industrial and warehouse properties 15,542 1 409 120,436 0 0 0 131 137,518 288 Bjärred 9:1 Västanvägen Lomma 0 0 Borgeby 15:14 Norra Västkustvägen Lomma 0 1 Borgeby 15:37 Norra Västkustvägen 75 Lomma 0 0 Borgeby 15:38 N:a Västkustvägen/ Tegelbruksvägen Lomma 0 0 Borgeby 15:51 Norra Västkustvägen Lomma 0 0 Borgeby 17:128 Löddesnäsvägen Lomma 0 0 Borgeby 17:16 Löddesnäsvägen Lomma 0 0 Borgeby 17:22 Löddesnäsvägen/ Västanvägen Lomma 0 0 Borgeby 17:24 Löddesnäsvägen Lomma 0 0 64 Fältsippan 11 Källvattengatan 6 Malmö 0 6 51 Spillepengsmarken 6 Lundavägen 146/ Strömgatan 3 Malmö 3 65 Sunnanå 12:2 Staffanstorpsvägen Burlöv 0 2 Total projects and land 0 0 0 0 0 0 0 0 12

Total sub-market Northern Harbour & Arlöv 41 28,714 6 686 126,533 0 0 532 152 162,618 403

Sub-market Fosie & Limhamn 66 Boplatsen 3 Boplatsgatan 4-8 Malmö 1980 1997 24,972 1,855 26,827 69 67 Bronsdolken 25 Stenyxegatan 33-35 Malmö 1985 1990 480 6 872 2,954 10,306 23 68 Dubbelknappen 15 Kantyxegatan 23 Malmö 1992 1992 1,533 25 1,558 8 69 Hindbygården 8 Östra Hindbyvägen 74 Malmö 2004 2004 1,630 1,630 13 70 Revolversvarven 11 Jägershillgatan 20 Malmö T 1986 1986 1 170 480 1,650 6 71 Rosengård 130:403 Agnesfridsgatan 113 Malmö 1989 1989 8,232 415 8,647 49 Total office and retail properties 36,847 8 457 5,314 0 0 0 0 50,618 167 72 Balken 7 Schaktugnsgatan 5 Malmö 1989 1989 618 1,202 1,820 5 73 Balken 10 Ringugnsgatan 3 Malmö 1997 1997 3,725 3,725 13 74 Blocket 1 Krossverksgatan 12-30 Malmö 1987 1991 3,108 3,805 6,913 25 75 Bronsdolken 3 Stenyxegatan 15 Malmö T 1986 1986 200 9,468 9,668 21 76 Bronsdolken 10 Stenyxegatan 27 Malmö 1,278 1,278 3 76 Bronsdolken 11 Stenyxegatan 29 Malmö T 522 440 962 3 77 Bronsdolken 18 Stenyxegatan 17 Malmö T 1984 1984 1,311 1,311 4 78 Bronsspannen 5 Trehögsgatan 7 Malmö T 1972 1972 735 735 2 79 Bronsspannen 7 Flintyxegatan 1 Malmö T 1977 1977 154 1,006 1,160 3 80 Bronsspannen 8 Flintyxegatan 3-5 Malmö 1975 1975 1,067 1,067 3 81 Bronsspannen 9 Flintyxegatan 3-5 Malmö 1975 1986 1,350 775 2,125 6 82 Bronsspannen 13 Trehögsgatan 3 Malmö 1980 1980 1,765 1,765 3 83 Dubbelknappen 23 Risyxegatan 3 Malmö 2005 2005 3,400 3,400 11 84 Förbygeln 1 Ridspögatan 1/ Skrittgatan 1 Malmö T 1975 1981 5,146 5,146 11 85 Löplinan 7 Sporregatan 13 Malmö T 1978 1980 2,489 2,489 5 86 Mandelblomman 5 Lönngatan 75 Malmö 1960 1960 640 1,992 2,632 4 87 Muren 5 Ringugnsgatan 8 Malmö 1990 1990 1,593 1,593 5 88 Stångbettet 15 Ridbanegatan 6/ Travbanegatan 5 Malmö T 1986 1986 179 3,778 3,957 11 89 Sufflören 3 Axel Danielssons väg 259 Malmö 1981 1981 828 1,487 2,315 7 90 Trindyxan 3 Bronsyxegatan 9 Malmö T 1972 1975 7,275 7,275 15 91 Valvet 1 Krossverksgatan 5 Malmö 1990 1990 2,692 725 3,417 10 92 Vipan 7 Odengatan 34 Malmö 1970 1970 480 522 1,002 2 93 Vårbuketten 2 Husievägen 19 Malmö 1970 1992 2,699 2,699 10 Total industrial and warehouse properties 10,771 0 57,683 0 0 0 0 68,454 182 94 Hindbygården 7 Östra Hindbyvägen 70-72 Malmö 4 94 Hindbygården 9 Östra Hindbyvägen 70-74 Malmö 2 94 Hindbygården 10 Östra Hindbyvägen 70-74 Malmö 1 95 Hällristningen 5 Boplatsgatan 8 Malmö 2 96 Vårbuketten 4 Husievägen 17 Malmö 0 4 Total projects and land 0 0 0 0 0 0 0 0 12

Total sub-market Fosie & Limhamn 34 47,618 8,457 62,997 0 0 0 0 119,072 361

TOTAL malmö 111 284,367 36,545 222,817 2,947 11,981 10,768 1 822 571,247 2,460

40 Wihlborgs ANNUAL REPORT 2006 WIHLBORGS PROPERTIES IN HELSINGBORG

59 58 60

65 62 53 66 47

67 64

71 74 70 63 52 50 69 51 72 Berga 75 68 56

49 54 61 48

57 55

11 8 5 10 6 18 7 Centre 15 23 16 9 16 13 2 17

3 1

21 43

34 Planteringen 22 29 31 30 45

23 20

South 39 37 40 35 38 36 Hamn-City

25 41 44

46 26 27 28

Wihlborgs ANNUAL REPORT 2006 41 HELSINGBORG

Constr. Year of Industrial/ Residen- Tax asess. No. Property designation Address Municipality T year value Office Retail warehouse Hotel tial Other Garage Total value, Lettable area, sq.m. SEK M Sub-market Centre 1 Belgien Norra 19 Gasverksg 23, Nedre Eneborgsv 2 Helsingborg 1965 1965 3,831 1,359 200 2,826 9,035 40 2 John Ericsson 2 Järnvägsgatan 23 Helsingborg 1896 1963 610 137 119 866 5 3 Kalifornien 10 Järnvägsgatan 35-37 Helsingborg 1972 1972 6,002 77 6,079 38 4 Kullen Västra 19 Kullagatan 30 Helsingborg 1890 1986 854 430 10 372 1,666 10 5 Kärnan Norra 21 Stortorget 17 Helsingborg 1900 1960 2,293 303 75 2,671 21 6 Kärnan Södra 8 Södra Storgatan 7 Helsingborg 1988 1988 1,707 1,707 11 7 Kärnan Södra 9 Södra Storgatan 11-13 Helsingborg 1979 1979 1,622 1,002 1,057 2,576 6,257 32 8 Magnus Stenbock 7 Strömgränden 3 Helsingborg 1976 1976 402 200 602 5 9 Minerva 19 Södra Storgatan 31 Helsingborg 1,202 1,202 0 10 Mollberg 1 Stortorget 18 Helsingborg 1885 1959 408 7,641 8,049 47 11 Najaden 14 Drottninggatan 7-11 Helsingborg 1994 1982 11,146 1,870 314 52 13,382 100 12 Polisen 1 Carl Krooksg 24, Konsul Perssons pl 1 Helsingborg 2005 2005 5,021 5,021 99 13 Ruuth 35 Bruksgatan 25 Helsingborg 1931 1989 1,736 589 136 2,461 18 14 Stattena 10 Stattena Centrum 1-9 Helsingborg 1975 1990 722 2,045 541 3,308 26 15 Svea 7 Järnvägsgatan 9-11 Helsingborg 1895 1955 4,946 1,845 313 7,104 38 16 Terminalen 2 Kungstorget 4-6 Helsingborg T 1991 1991 55 13,158 13,213 81 17 Terminalen 4 Järnvägsgatan 18-20 Helsingborg T 1991 1991 3,478 25 3,503 28 17 Terminalen 5 Järnvägsgatan 22-24 Helsingborg T 1991 1992 5,733 5,733 42 18 Vikingen 10 Mariagatan 4 Helsingborg 1935 1935 381 857 603 1,841 11 Total office and retail properties 51,686 11,100 735 20,799 5,367 4,013 0 93,700 650 19 Iris 6 Dragaregatan 2 Helsingborg 1949 1970 620 743 1,341 1,234 3,938 5 Total industrial and warehouse properties 620 743 1,341 0 0 1,234 0 3,938 5 12 Polisen 3 Carl Krooksg 24, Konsul Perssons pl 1 Helsingborg 10,104 10,104 37 Total projects and land 10,104 0 0 0 0 0 0 10,104 37

Total sub-market Centre 21 62,410 11,843 2,076 20,799 5,367 5,247 0 107,742 692

Sub-market South Arholma 4 Frösögatan 7 Helsingborg 1979 1979 115 1,475 1,590 7 20 Brottaren 17 Hästhagsvägen 3 Helsingborg 2001 2001 6,729 6,729 24 21 Carnot 11 Norra Ljunggatan 3 Helsingborg 1982 1,039 1,039 0 22 Gymnasten 4 Planteringsvägen 11 Helsingborg 1961 1977 3,535 2,290 60 5,885 24 23 Manövern 3 Hästhagsvägen 1 Helsingborg 1939 1999 240 4,739 4,979 15 24 Posten 1 Västra Sandgatan 7 Helsingborg 1973 2,830 2,688 5,518 0 25 Runristaren 1 Rusthållsgatan 43-45 Helsingborg 1996 1996 4,300 724 5,024 21 Total office and retail properties 4,224 20,778 5,702 0 0 60 0 30,764 91 26 Flintyxan 1 Stenbrovägen 40-42 Helsingborg 1979 1979 3,220 3,220 6 27 Flintyxan 3 Stenbrovägen 36-38 Helsingborg 1979 1979 3,083 3,083 5 28 Flintyxan 5 Stenbrovägen 32-34 Helsingborg 1989 1989 125 4,215 4,340 9 29 Gymnasten 9 Kapplöpningsgatan 6 Helsingborg 1962 1973 2,490 16,510 19,000 23 30 Olympiaden 7 Kapplöpningsgatan 5 Helsingborg 1970 1970 1,009 2,528 3,537 6 31 Olympiaden 8 Kapplöpningsgatan 3 Helsingborg 1965 1965 635 5,965 6,600 10 32 Orkanen 5 Landskronavägen 18 Helsingborg 1969 1969 636 2,514 3,150 4 33 Persien 14 Cindersgatan 13-15 Helsingborg 1977 1977 2,524 1,310 3,834 3 33 Persien 15 Cindersgatan 17-19 Helsingborg 1977 4,026 4,026 0 34 Planteringen 1:8 Västra Tallgatan 32 Helsingborg 1971 1971 522 1,343 1,865 3 34 Planteringen 1:9 Västra Tallgatan 32 Helsingborg 1966 1966 782 5,504 481 6,767 8 35 Plåtförädlingen 7 Strandbadsvägen 11 Helsingborg 1975 1975 1,210 1,210 3 36 Plåtförädlingen 8 Strandbadsvägen 13 Helsingborg 1986 1990 1,745 10,118 11,863 26 37 Plåtförädlingen 11 Strandbadsvägen 19-21 Helsingborg 1980 1983 9,072 10,755 19,827 42 38 Plåtförädlingen 13 Strandbadsvägen 17 Helsingborg 1992 2001 2,147 14,547 16,694 37 39 Plåtförädlingen 15 Strandbadsvägen 7 Helsingborg 1997 1997 2,496 2,496 11 40 Plåtförädlingen 18 Strandbadsvägen 9 Helsingborg 1964 1965 170 835 1,005 4 41 Rausgård 21 Landskronavägen 9 Helsingborg 1940 1984 1,925 8,691 190 10,806 24 42 Sadelplatsen 10 Fäktmästaregatan 5 Helsingborg 1956 1956 3,260 3,260 6 43 Sadelplatsen 13 Planteringsvägen 5-9 Helsingborg 1965 1991 1,880 706 16,369 18,955 30 44 Stormen 13 Landskronavägen 2-12 Helsingborg 1964 1970 6,004 6,004 8 45 Valsen 1 Svanhalsgatan 17 Helsingborg 1940 1965 730 3,483 315 4,528 8 46 Ättehögen Mellersta 6 Torbornavägen 22 Helsingborg 1970 1983 559 2,080 2,639 6 Total industrial and warehouse properties 30,977 706 126,040 0 0 796 190 158,709 282

TOTAL Sub-market South 30 35,201 21,484 131,742 0 0 856 190 189,473 373

42 Wihlborgs ANNUAL REPORT 2006 HELSINGBORG

Constr. Year of Industrial/ Residen- Tax asess. No. Property designation Address Municipality T year value Office Retail warehouse Hotel tial Other Garage Total value, Lettable area, sq.m. SEK M Sub-market Berga 47 Floretten 3 Garnisonsgatan 25 Helsingborg 1991 1991 4,978 315 609 5,902 33 48 Grustaget 1 Grustagsgatan 37 Helsingborg 1988 1988 4,008 4,008 17 49 Huggjärnet 12 Garnisonsgatan 7 Helsingborg 1990 1970 4,798 700 5,498 30 50 Musköten 13 Muskötgatan 8b Helsingborg 2001 2001 2,290 2,290 11 Nackstycket 8 Tygelvägen 5-7 Helsingborg 1991 0 Nackstycket 9 Tygelvägen 5 Helsingborg 1991 316 316 0 51 Värjan 12 Muskötgatan 12 Helsingborg 1989 1991 1,145 1,145 6 52 Värjan 13 Muskötgatan 10 Helsingborg 1968 1968 2,810 2,085 4,895 7 Total office and retail properties 20,345 315 3,394 0 0 0 0 24,054 104 53 Armborstet 4 Lilla Garnisonsgatan 31 Helsingborg 1988 1988 1,380 900 455 2,735 6 54 Grusgropen 3 Grustagsgatan 22 Helsingborg 1991 1991 634 4,241 4,875 14 55 Grushögen 2 Makadamgatan 1 Helsingborg 1997 1984 3,057 3,057 7 56 Grusplanen 2 Blockgatan 8 Helsingborg 1989 1989 1,138 1,167 2,305 6 57 Grustaget 2 Grustagsgatan 11-15 Helsingborg 1980 1991 3,981 3,981 10 58 Hakebössan 1 Karbingatan 28-32 Helsingborg 1981 1981 1,105 3,777 4,882 12 59 Hakebössan 2 Karbingatan 10-20 Helsingborg 1986 1978 1,903 366 7,132 9,401 21 60 Hakebössan 3 Karbingatan 22-26 Helsingborg 1987 1984 1,339 3,986 5,325 13 61 Huggjärnet 13 Kastellgatan 2 Helsingborg 1967 1967 454 163 3,410 4,027 8 62 Kniven 2 Mörsaregatan 17 Helsingborg 1976 1976 150 4,935 5,085 6 63 Kroksabeln 11 Garnisonsgatan 17 Helsingborg 1968 1969 701 864 6,349 7,914 14 64 Kroksabeln 19 Florettgatan 14 Helsingborg 1966 1973 943 192 7,083 8,218 12 65 Lansen 1 Florettgatan 15 Helsingborg 1985 1985 9,861 14,165 24,026 62 66 Lansen 2 Florettgatan 31-39 Helsingborg 1971 1971 1,818 3,956 30 5,804 12 67 Lansen 3 Florettgatan 7 Helsingborg T 1971 1979 1,340 1,340 6 68 Musköten 11 Muskötgatan 6 Helsingborg 1979 1979 2,920 2,920 5 69 Musköten 12 Muskötgatan 8a Helsingborg 1992 1992 1,881 1,881 4 70 Mörsaren Västra 5 Muskötgatan 5 Helsingborg 1970 1970 1,701 1,701 4 71 Mörsaren Västra 13 Florettgatan 4 Helsingborg 1973 1973 868 3,131 3,999 8 72 Spjutet 1 Garnisonsgatan 12 Helsingborg 1980 1980 1,496 1,512 3,008 7 Total industrial and warehouse properties 23,995 3,981 78,478 0 0 30 0 106,484 238 73 Barrikaden 3 Fyrverkaregatan Helsingborg 0 74 Kroksabeln 20 Muskötgatan 17-27 Helsingborg 1968 1969 2 75 Musköten 9 Muskötgatan 4 Helsingborg 1967 3 76 Snårskogen 4 Ekvändan Helsingborg 1 Total projects & land 0 0 0 0 0 0 0 0 7 TOTAL Sub-market Berga 32 44,340 4,296 81,872 0 0 30 0 130,538 349

Wihlborgs ANNUAL REPORT 2006 43 WIHLBORGS PROPERTIES IN COPENHAGEN

Herlev 1 3 Ballerup 2 5

Copenhagen

4 Brøndby Kastrup

Köpenhamn WIHLBORGS PROPERTIES IN LUND

13 12 10 16

15 9

Skultelyckan 46

SKULTELYCKAN

7 11

44 Wihlborgs ANNUAL REPORT 2006 REST OF THE öresund region

Constr. Year of Industrial/ Residen- Tax asess. No. Property designation Address Municipality T year value Office Retail warehouse Hotel tial Other Garage Total value, Lettable area, sq.m. SEK M Sub-market Copenhagen 1 Borupvang 5 Borupvang 5 D-E Ballerup 1974 10,273 10,273 0 2 Hørkær 16-28 Hørkær 16-28 Herlev 1984 34,220 34,220 0 3 Lautrupvang 12 Lautrupvang 12 Ballerup 1998 9,349 9,349 0 Total office and retail properties 53,842 0 0 0 0 0 0 53,842 0 4 Abildager 8-14 Abildager 8-14 Bröndby 14,512 14,512 Total industrial and warehouse properties 0 0 14,512 0 0 0 0 14,512 0 5 Ellekær 6 Ellekær 6 Herlev 5,779 5,779 0 Total projects & land 5,779 0 0 0 0 0 0 5,779 0

TOTAL Sub-market Copenhagen 5 59,621 0 14,512 0 0 0 0 74,133 0

Sub-market LUND 6 Armaturen 4 Trollebergsv 1/ Gasverksg 1-9 Lund 1929 1969 4,958 2,300 208 7,466 49 7 Diabasen 3 Skiffervägen 30-86 Lund 1988 1995 2,053 108 6,086 8,247 19 8 Gråbröder 34 Klostergatan 14 Lund 1929 1986 1,093 1,665 2,758 39 9 Måsen 17 Fjelievägen 41 A-C Lund 2001 2001 4,169 64 4,233 39 10 Töebacken 7 Bondev 2/ Åldermansg 13/ Fjeliev Lund 3,124 1,482 169 4,775 38 11 Virket 2 Virkesvägen 3 Lund 1962 1974 321 580 879 1,780 3 12 Vätet 1 Scheelevägen 15-17 Lund 1986 2000 23,432 183 613 24,228 51 Total office and retail properties 39,150 4,018 10,111 0 0 208 0 53,486 236 13 Länsmannen 1 Åldermansgatan 2-4 Lund 1945 1984 9,080 9,080 17 14 Skiffern 2 Skiffervägen 14 Lund 1982 1982 2,910 2,910 5 Total industrial and warehouse properties 0 0 11,990 0 0 0 0 11,990 22 15 Måsen 16 Starvägen 9,11 Lund 1956 1956 2,077 662 178 2,917 9 16 Postterminalen 1 Fabriksgatan 1 Lund 1984 1,348 1,348 0 Total projects and land 3,425 662 178 0 0 0 0 4,265 9 TOTAL Sub-market LUND 11 42,575 4,680 22,279 0 0 208 0 69,741 268

Other areas St Georg Süd Lippeltstr. 1 Hamburg 1966 8,107 8,107 0 Total office and retail properties 8,107 0 0 0 0 0 0 8,107 0 Korreboda 5:1 S:t Olof Simrishamn 1929 1994 8,870 8,870 5 Total industrial and warehouse properties 0 0 8,870 0 0 0 0 8,870 5 Bilrutan 5 Kamgatan Landskrona 0 2 Pedalen 16 Rattgatan 48 Landskrona 0 Pedalen 20 Rattgatan 48 Landskrona 0 Strålkastaren 3 Rattgatan 41 Landskrona 0 Strålkastaren 4 Rattgatan 43 Landskrona 0 Svedala 122:85 Verkstadsgatan 11 Svedala 1 Örja 19:12 Rattgatan 55 Landskrona 0 Total projects and land 0 0 0 0 0 0 0 0 4

TOTAL Other areas 9 8,107 0 8,870 0 0 0 0 16,977 9

TOTAL REST OF THE ÖRESUND REGION 25 110,303 4,680 45,661 0 0 208 0 160,851 277

TOTAL WIHLBORGS 219 536,621 78,848 484,168 23,746 17,348 17,109 20,12 1 159,851 4,150

Wihlborgs ANNUAL REPORT 2006 45 Risk factors

Wihlborgs’ activities, financial position and profit are affected by a number of risk factors. The risks that represent a decisive impact on the company’s profit growth are variations in lease income, changes in rates of interest, growth in costs, property values and taxes.

Lease income and growth in lease activities Supply and demand determine the growth in lease activities for commercial premises. The demand for Wihlborgs’ commercial properties is influenced by general changes in the business climate and the respective location’s growth with regard to population and employment. The range of premises available on a market comprises an existing area as well as any possible additional, newly-produced areas. Wihl- borgs operates in a growth region and this limits risks over time. The lease level for leased premises with agreement periods longer than three years is normally linked to the consumer price index. Approximately 80 per cent of Wihlborgs’ property portfolio is subject to price adjustment at the end of each year on the basis of the consumer price index.

Leasing volume The leasing volume of Wihlborgs’ portfolio is primarily the result of the company’s own endeavours. Business cycle factors and structural changes also have an impact on Wihlborgs’ leasing volume.

Operating and maintenance costs, property tax Major cost items within operations are made up of assessment-related costs such as those for heating electricity, water and waste collection. In many cases, Wihlborgs is dependent on a local supplier, often owned by a local authority, for water, district heating and waste collection. Lease properties are also subject to a national property tax that amounts to 1.0 per cent of the rateable value of premises lease properties and 0.5 per cent for housing and industrial properties. The tax is calculated on the basis of the property’s rateable value. The property tax is usually passed on to the tenants.

Realised and unrealised value changes The potential for realising future profits on disposal of properties depends on Wihl- borgs’ own capacity to enhance the properties’ market value through changing and upgrading properties, agreement structures, customer structures etc and external factors that affect demand and supply in Wihlborgs’ property markets. Nor- mally an increase in the interest rate results in lower demand and thus falling property prices. Conversely a fall in interest rates can result in rising property prices.

Profit/loss effect, SEK million + - 1 % Rentals + -10 Vacancies + -11 Property expenses + - 3 Interest expenses + -51

46 Wihlborgs ANNUAL REPORT 2006 Other factors that are significant to the growth of property prices are the property market’s assessment of future risks and opportunities including expectations of future lease growth, value increase, borrowing potential etc. An elevated rate of interest, which can have a negative effect on property prices, can result in expectations of a growth in leases as a consequence of improved growth potential and rising inflation. Expectations of an increase in lease growth can therefore wholly or partly neutralise the effects of a rising interest rate.

Financing For information on policy issues and risk management concerning financial questions see the section entitled “Financial instruments and financial risk management” on page 62.

WIHLBORGS TAX SITUATION In the balance sheet dated 31 December 2006, the audited value of properties is stated as SEK 10,888m. The audited value exceeds the value of properties in the group for tax purposes. This means that there was a deferred tax liability on properties as at 31 December 2006 of SEK 845m. This corresponds to 28 per cent of the difference between the audited value and the value for tax purposes of the properties. According to the balance sheet there was also a deferred tax liability of SEK 10m related to untaxed reserves. Wihlborgs shows deferred prepaid taxes of SEK 10m for the group’s property holdings in Denmark. Wihlborgs makes a maximum annual depreciation for tax purposes of 2–5 per cent of the buildings’ acquisition values depending on the type of building. This means that the groups actual tax cost is reduced by a tax credit received. Corresponding amounts in the accounting records will be included as a deferred tax cost. Through a redistribution of the depreciation basis, property investments from buildings to building inventories for tax purposes, the current tax has been deferred. In addition to depreciation for tax purposes, the company has used the option to make direct deductions for certain investments.

Deficit deduction for tax purposes The total deficit deductions amount to SEK 467m (207m). This is taken into account when calculating deferred tax. SEK 335m of the deficit deductions are blocked until the year 2012. The balance sheet shows prepaid taxes of SEK 10m for Denmark. Other- wise, offset has been applied to deferred prepaid taxes and liabilities. In the tax calculation for 2006, SEK 154m has been used in the deficit deduction.

Wihlborgs ANNUAL REPORT 2006 47 Administration Report

The Board of Directors and Chief Executive Officer of Wihlborgs Fastigheter AB (publ), company registration number 556367–0230, hereby present their annual report for the Group and parent company in 2006.

The business Wihlborgs is a property company focusing on the Öresund region. The company’s property portfolio comprises commercial properties in Malmö, Helsingborg, Lund and Copenhagen. The total rental value was SEK 1,079m and the annual contractual rental income was SEK 987m. The financial occupancy rate was 92 per cent. Our properties in Malmö and Helsingborg accounted for 86 per cent of the total rental value and 84 per cent of the book value of the properties. Wihlborgs’ office and retail properties accounted for 70 per cent of the total rental value, and industrial and warehouse properties for 28 per cent.

Results The profit after tax was SEK 850m (470m). Earnings per share was SEK 22.12 (12.33)1. The rental income was SEK 909m (736m) and net operating income increased to SEK 627m (497m). Operating income increased to SEK 1,238m (798m), including gains from property sales of SEK 10m (9m) and changes in the value of properties of SEK 629m (318m). Net financial items was negative, SEK -174m (-149m).

Cash flow and financial position Shareholders’ equity was SEK 3,667m (2,842m) and the equity/assets ratio 32.7 per cent (34.8%). Return on equity was 26.6 per cent (18.2%). Cashflow from current activities produced a surplus of SEK 394m (414m). As a consequence of a major investment volume, investment activities generated a negative cashflow of SEK 2,053m. Long-term liabilities increased by SEK 1,790m and the dividend paid to shareholders amounted to SEK 134m. Overall this has resulted in liquid assets decreasing by SEK 3m which, together with the opening balance of liquid assets of SEK 89m, resulted in liquid assets at the end of the year amounting to SEK 86m. The group’s liquid assets including unused bank overdraft facilities at 31 December amounted to SEK 179m (164m). Interest-bearing liabilities at year-end was SEK 6,448m (4,388m) with an average interest rate of 3.66 per cent excluding committed lines of credit and 3.69 per cent including the cost of committed lines of credit. Out of total volume of short-term loans of SEK 6,137m, loans of SEK 1,000m were extended through an interest rate swap with a term of 10 years (see below). At year-end, the average fixed-rate term for the loans, including the effects of utilised derivate instruments, was 17 months (15). The average maturity of loans, including committed lines of credit, was 4.4 years (4.8).

Sales and acquisitions of properties In 2006, Wihlborgs acquired 45 properties for a total consideration of SEK 3,529m. The acquisition total includes Tornet’s Malmö holdings of fourteen properties (SEK 2,170m) and the Ideon property in Lund 8 (SEK 420m). Four properties were aquired in Helsingborg from GE Capital (SEK 350m). 17 properties were sold for a total price of SEK 1,560m. The proceeds exceeded

1. SEK 24,66 before split.

48 Wihlborgs ANNUAL REPORT 2006 the carrying amount by SEK 10m. The property Caroli City was sold for SEK 1,019m to two buyers after a three-dimensional property foundation.

Changes in value Malmöbryggan Fastighetsekonomi AB and Savills Sweden AB have valued all of Wihlborgs’ properties in Sweden. The value of each property is assessed individually to correspond to its market value. Our Danish properties have been valued by DTZ, and the one remaining property, in Hamburg, has been valued by Colliers Property Partners. Changes in value amounts in all to SEK 629m (318m).

Investments in existing properties and current projects In 2006, Wihlborgs invested SEK 427m in its existing portfolio. Out of this amount, SEK 280m was invested in Malmö. Major projects include Dockporten 1 an investment made for Teleca with SEK 101m, acquisition of nine site leasehold rights SEK 44m and re-building of the hotel situated near Slagthuset with SEK 9m. SEK 66m was invested in Helsingborg, where major projects included the re-building of Svea 7, SEK 26m. In the rest of the Öresund region Wihlborgs invested SEK 81m, of which SEK 35m refers to tenants improvements in Hörkaer, a property in Copenhagen. The sum for investments also includes the freehold purchase of land for Wihlborgs’ remaining property in Hamburg, Lippelstr. 1. Confirmed investments in current projects total SEK 413m, of which SEK 165m was invested as at 31 December 2006. The biggest current projects are Teleca in Malmö (Dockporten), and the rebuilding project for Kunskapsskolan in Båghallarna. Both situated at Dockan in Malmö.

Parent company The profit after tax in the parent company amounted to SEK 500m (77m). The parent company provides mostly intra-group services. Turnover amounted to SEK 70m (61m). The parent company has invested SEK 1,765m (117m) in subsidiaries.

Corporate Governance Report A separate Corporate Governance Report is presented on pages 70–77.

IFRS accounting Wihlborgs’ accounting principles and calculation methods conform with IFRS, as adopted by the EU, which also include applicable IFRIC/SIC interpretations.

Events after the end of the financial year Wihlborgs has entered into an agreement with the school Kunskapsskolan concerning rental of 2,800 sq.m. in Båghallarna, which is located in the Dockan area of Malmö. As a result of this agreement, Wihlborgs will invest SEK 57m in the property. Wihlborgs aquired Flygvärdinnan 5 (3,300 sq.m.) at the Bulltofta industrial estate in Malmö. The completion date is during the first quarter of 2007.

Environment The extent of Wihlborgs’ activities that are subject to the permit and notification requirements contained in Section 6 of Chapter 9 of the Environmental Code are very limited and normal for the industry. Read more about Wihlborgs’ environment work on pages 10–11.

Wihlborgs ANNUAL REPORT 2006 49 Prospects for 2007 There is continued strong demand on Wihlborgs’ various markets in the Öresund region. Growth is expected to remain positive in the Öresund region. During the year new projects in the Dockan area are expected to come to fruition. Wihlborgs also expects higher interest costs than in 2006. This criterion can be bridged through a greater business volume in 2007. Despite major acquisitions in 2006 Wihl- borgs has a strong position. This can be exploited for new acquisitions or projects during the year.

Proposed allocation of profits The AGM is asked to decide on the allocation of the following amounts in the parent company:

Unrestricted reserves 1,008,240,395 Profit for the year 500,237,821 Total 1,508,478,216

The Board of Directors and Chief Executive Officer propose that the amount be allocated as follows: Dividend to the shareholders SEK 5.50 per share 211,356,002 Carried forward 1,297,122,214 Total 1,508,478,216

Statement of the Board of Directors on the proposed dividend Grounds The Group’s equity has been calculated in accordance with the EU–approved IFRS standards, the interpretation of these (IFRIC) and Swedish law through the application of Recommendation RR30 of the Swedish Financial Accounting Standards Council (Supplementary Accounting Rules for Corporate Groups). Parent company equity has been calculated in accordance with Swedish law and Recommendation RR32 of the Swedish Financial Accounting Standards Council (Accounting for Legal Entities). The proposed dividend is based on 50 per cent of Wihlborgs’ income from property management and 50 per cent of realised gains from property sales less estimated tax at 28 per cent, which is exactly in line with Wihlborgs’ dividend policy. The Directors do not believe the proposed dividend will affect the company’s future business opportunities. The dividend does not conflict with the company’s financial objectives. Wihlborgs’ estimated equity/assets ratio after the proposed dividend is 30.8 per cent. The company’s liquidity, including credit, is more than adequate to support the proposed dividend.

50 Wihlborgs ANNUAL REPORT 2006 Income statements

––––– Group ––––– –– Parent company –– SEK millions Note 2006 2005 2006 2005

1-3 Rental income 4 909 736 - - Property expenses 5 -282 -239 - - Net operating income 627 497 0 0

Central administration and marketing 6,7 -28 -26 -14 -11 Gain/loss from sale of properties 8 10 9 - - Change in value of properties 9 629 318 - - Other operating income 10 - - 70 61 Other operating expenses 10 - - -70 -61 Operating profit 1,238 798 -14 -11

Profit/loss from interests in Group companies 11 - - 488 76 Profit/loss from interests in joint ventures 12 7 1 - -3 Profit/loss from other securities and assets that are fixed assets 13 3 6 212 112 Other interest income 7 8 2 42 Interest expenses and similar items 14 -187 -168 -179 -137 Change in value derivatives 15 -4 4 -4 - Profit after financial items 1,064 649 505 79

Tax on the profit for the year 16 -214 -179 -5 -2 Profit/loss after tax 850 470 500 77

Attributable to parent company’s shareholders 850 470 Attributable to minority shares - -

Data per share (there is no dilution effect, as there are no potential shares). Earnings per share, SEK 22,12 12,33 Dividend per share (2006, proposed dividend) 5,5 3,5 No. of shares at the end of period, million 38,4 38,4 Average no. of shares, million 38,4 38,1

Wihlborgs ANNUAL REPORT 2006 51 Balance sheet

––––– Group ––––– –– Parent company –– SEK millions Note 2006 2005 2006 2005 Assets Fixed assets Properties 17 Investment properties 18 10,707 7,832 - - Project properties 19 181 58 - - Total properties 10,888 7,890 0 0

Equipment 20 8 7 3 4 Total tangible fixed assets 10,896 7,897 3 4

Financial fixed assets Interests in Group companies 21 - - 1,690 972 Receivables from Group companies - - 8,614 4,313 Interests in joint ventures 22 60 53 52 52 Other long-term securities holdings 23 10 10 10 10 Deferred tax asset 24 10 18 - - Other long-term receivables 25 42 60 - 12 Total financial fixed assets 122 141 10,366 5,359

Total fixed assets 11,018 8,038 10,369 5,363

Current assets

Current receivables Trade debtors 23 7 - 1 Other receivables 86 26 1 6 Prepayments and accrued income 26 8 13 1,320 1 Total current receivables 117 46 1,321 8

Cash and bank balances 27 86 89 67 80 Total current assets 203 135 1,388 88

TOTAL ASSETS 11,221 8,173 11,757 5,451

52 Wihlborgs ANNUAL REPORT 2006 ––––– Group ––––– –– Parent company –– SEK millions Note 2006 2005 2006 2005 Equity and liabilities Shareholders’ equity 28 Share capital 192 192 192 192 Other contributed capital 2,178 2,178 - - Reserves 4 15 - - Total restricted equity in parent company 192 192 Profit brought forward 1,173 457 1,009 1,080 Profit for the year in parent company 500 77 Total unrestricted equity in parent company 1,509 1,157 Minority Share 120 - Total equity 3,667 2,842 1,701 1,349

Long-term liabilities Non-interest-bearing liabilities Deferred tax liability 29 734 633 - - Other long-term liabilities 30 38 40 - - Interest-bearing liabilities Overdraft facility 31 - 22 - - Liabilities to credit institutions 32 6,448 4,366 5,536 3,638 Loans from Group companies - - 4,493 434 Total long-term liabilities 7,220 5,061 10,029 4,072

Current liabilities Non-interest-bearing liabilities Trade creditors 73 47 3 2 Tax liabilities 15 4 - - Other liabilities 57 44 7 3 Accruals and deferred income 33 189 175 17 25 Total current liabilities 334 270 27 30

TOTAL EQUITY AND LIABILITIES 11,221 8,173 11,757 5,451

Commitments and contingent liabilities 34

Wihlborgs ANNUAL REPORT 2006 53 Changes in equity

Share Other contri- Profit brought Totalt Minority Total SEK millions Note capital buted capital Reserves forward equity share equity Group 28 attributable to the parent company’s shareholders

Equity 31 December 2004 0 2 310 10 0 2,320 0 2,320

Effect of change of accounting principles – derivatives (IAS 39) - - - -13 -13 - -13 Exchange rate differences - - 5 - 5 - 5 Shareholder contributions - 55 - - 55 - 55 New issue 192 -187 - - 5 - 5 Profit for the year - - - 470 470 - 470 Equity 31 December 2005 192 2,178 15 457 2,842 0 2,842

Dividends paid - - - -134 -134 - -134 Minority share in the acquisition of subsidiaries - - - - 0 120 120 Exchange rate differences - - -11 - -11 - -11 Profit for the year - - - 850 850 - 850 Equity 31 December 2006 192 2,178 4 1,173 3,547 120 3,667

Share Restricted Unrestricted Total SEK millions Note capital reserves equity equity Parent company 28 Equity 31 December 2004 0 187 1,030 1,217

Shareholder contributions - - 55 55 New issue 192 -187 - 5 Group contributions made - - -7 -7 Tax on Group contributions - - 2 2 Profit for the year - - 77 77 Equity 31 December 2005 192 0 1,157 1,349

Effect of change of accounting principle – derivatives (IAS 39) - - -10 -10 Dividends paid - - -134 -134 Group contributions made - - -6 -6 Tax on Group contributions - - 2 2 Profit for the year - - 500 500 Equity 31 December 2006 192 0 1,509 1,701

54 Wihlborgs ANNUAL REPORT 2006 Cash flow statement

––––– Group ––––– –– Parent company –– SEK millions Note 2006 2005 2006 2005 Operations Net operating income 1,238 798 -14 -11 Adjustments made for records excluded in the cash flow 35 -638 -326 1 1 Interest received and dividend 11 15 292 227 Interest paid -199 -160 -203 -122 Income tax paid 1 -2 - - Cash flow before change in operating capital 413 325 76 95

Change in operating capital Current receivables -51 -16 7 -8 Current liabilities 32 105 4 15 Total change in operating capital 36 -19 89 11 7 Cash flow from operations 394 414 87 102

Investing activities Investments and acquisition of properties -1,028 -414 - - Sale of properties 164 149 - - Acquisition of interests in Group companies 37 -2,642 -122 -1,765 -117 Sale of interests in Group companies 38 1,374 158 137 - Acquisition of interests in other companies - -10 - -10 Other tangible fixed assets - -1 - -1 Other financial fixed assets 79 346 -4,289 -635 Cash flow from investing activities -2,053 106 -5,917 -763

Financing activities New issue - 5 - 5 Shareholder contributions - 55 - 55 Dividends paid -134 - -134 - Change in long-term liabilities 1,790 -527 5,957 677 Group contributions - - -6 -7 Cash flow from financing activities 1,656 -467 5,817 730

Change in cash and cash equivalents -3 53 -13 69 Cash and cash equivalents at beginning of period 89 36 80 11 Cash and cash equivalents at end of period 27 86 89 67 80

Wihlborgs ANNUAL REPORT 2006 55 Accounting principles

n General The consolidated financial statements and annual report of Wihlborgs Fastigheter AB (the parent company) for the financial year 2006 have been approved by the Board of Directors and Chief Executive Officer for publication on 20 March 2007 and will be presented to the Annual General Meeting for final approval on 26 April. The parent company is a Swedish limited-liability company (publ) with registered office in Malmö. Wihlborgs’ applies the IFRS and the interpretation of these (IFRIC), adopted by the European Union. The consolidated financial statements have also been prepared in accordance with Recommendation RR30:05 of the Swedish Financial Accounting Standards Council (Supplementary Accounting Rules for Cor- porate Groups). The annual accounts of the parent company have been prepared in accordance with the Swedish Annual Accounts Act and Recommendation RR32:05 of the Swedish Financial Accounting Standards Council (Accounting for Legal Entities). Up to 29 December 2004, Wihlborgs was a dormant company, with no subsidiaries.

Forthcoming IFRS-standards and interpretations EU:s Accounting Regulatory Committee, ARC, have decided to recommend the European Commission to accept IFRS 8 Operating segments, IFRIC 10 Interim Financial Reporting and Impairment and IFRIC 11 Group and Treasury Share Transactions. Before a final decision in March, IFRIC 12 ARC had an opening discussion of IFRIC 12 Service Concession Arrangements. Disclosures have been accepted earlier regarding IFRS 7 Financial Instruments. These new IFRS-standards and interpretations will probably not give any direct effects on future financial reports unless admitting further additional information.

Use of estimates In preparing the financial statements in accordance with generally accepted accounting principles, the company’s management and Board need to make estimates and assumptions which affect the reported balance sheet items and income and expense items as well as other reported information. These estimates are based on experience and on assumptions that the management and Board believe to be reasonable under present circumstances. The conclusions that are drawn from the basis for determining the carrying amounts of assets and liabilities in cases where these amounts cannot readily be determined on the basis of information from other sources. Actual figures may differ from these estimates if other assumptions are made or other conditions are present. The financial statements are sensitive to the estimates and assumptions used for the valuation of investment properties. For more information about valuation basis and valuation methods see pages 36–37.

Consolidated financial statements The consolidated financial statements comprise the parent company Wihlborgs and all companies in which the parent company directly or indirectly owns more than 50 per cent of the votes or in other ways exercises a controlling influence. The consolidated financial statements are based on accounting documents drawn up for all Group companies as at 31 December and have been prepared in accordance with the acquisition method. However, in this Group the Group companies that were acquired in December 2004 have been carried at the amounts reported

56 Wihlborgs ANNUAL REPORT 2006 in the Fabege Group under the joint verification rules. In the consolidated profit and loss account acquired or divested companies have been recognised only to the extent corresponding to the period of ownership. Internal sales and transactions and profits and losses within the Group have been eliminated in the consolidated financial statements.

Acquisition of properties via companies A company acquisition can be considered either an asset acquisition or an operating acquisition. A company acquisition, whose primary purpose is to gain access to the purchased company’s properties and where the company’s management organisation and administration are of subordinate importance for the execution of the acquisition, is normally treated as an asset acquisition. A company acquisition where the purchased company’s management organisation and administration are of great significance to the acquisition’s execution and evaluation is treated instead as an operating acquisition. In the case of an asset acquisition, there is no account of the deferred tax on the properties’ surplus value and any discount referred to the deferred tax reduces the property value instead. When assessing market values after the time of acquisition, the property value is adjusted by the discount received. In the case of an operating acquisition, the deferred tax is recorded at a nominal rate of 28 per cent on the properties’ surplus value and any temporary differences are referred to the acquired assets or liabilities. The company acquisitions that took place after the group’s formation have been treated as asset acquisitions.

Translation of foreign operations The functional currency of the Group’s foreign operations is the currency in which the respective Group units conduct their business activities. The Group’s financial reports are presented in Swedish kronor (SEK), which is the reporting currency of the parent company. Profit and loss accounts and balance sheets for foreign operations are translated into SEK according to the current exchange rate method, which means that balance sheets are translated at the exchange rate applying on the balance sheet date, except in the case of equity, which is translated at the historical exchange rate. Profit and loss accounts are translated at the average exchange rate for the period. The resulting translation difference is recognised directly in equity.

Joint Ventures Companies in which Wihlborgs has a long-term ownership commitment and exercises a controlling influence together with one or several business partners are reported in the consolidated profit and loss accounts and balance sheets according to the equity method. The income statement item resulting from participations in joint ventures shows Wihlborgs’ annual proportion of the result and, in relevant cases, the result from the sale of participations in joint ventures. The value of the participations is adjusted in the balance sheet according to the proportion of the profit and with any dividends. Adjust- ments are made to the financial statement and the balance sheet for any internal profits and write-downs. Accounts

Wihlborgs ANNUAL REPORT 2006 57 that refer to joint ventures are based on the latest annual accounts for the respective company(ies) adjusted for any deviations in the accounting principles and by an assessed adjustment for events and transactions up to the Wihlborgs group’s end of accounting period.

Transactions in foreign currencies Transactions in foreign currencies are translated into Swedish kronor at the exchange rate applying on the transaction date. Monetary assets and liabilities in foreign currencies are translated at the exchange rate applying on the balance sheet date, and the resulting exchange rate differences are reported in the profit and loss account. Exchange rate differences relating to operating receivables and liabilities are reported in operating profit/loss, while exchange rate differences relating to financial assets and liabilities are reported in result from financial investments.

Income Rental income from the company’s property management activities is recognised in the profit and loss account in the period to which it refers. In cases where a tenant is offered a discounted rent for a certain period and pays a higher rent at other times, accruals are made for the resulting deficit or surplus during the term of the contract unless the rental discount was due to gradual occupation or a similar circum- stance. Income attributable to early redemption of rental agreements is recognised as income immediately unless there are outstanding obligations towards the tenant. Income from property sales are reported when the essential risks and benefits, related to the ownership of the properties, have been transferred to the buyer and when its likely that the financial benefits related to the sale accrues to Wihlborgs, normally this means the accounting is made upon the date of possession. Interest income is recognised in the period to which it refers. Dividends on shares are recognised in the period in which the right to receive payment is deemed to be secure.

Expenses The term property expenses include all expenses relating to the let properties. This includes direct property expenses such as operating and maintenance expenses, ground rents and property tax, as well as indirect property expenses such as expenses for letting and property administration. The term central administration includes expenses for Group management, expenses attributable to the public nature of the company and other expenses connected with the company form, including central advertising and other marketing.

Leasing Rental agreements relating to investment properties are classified as operational leases. These agreements are reported in accordance with the principles for reporting of income describe above. There are also a number of relatively small leasing contracts in which Wihlborgs is the lessee. These leasing contracts, which primarily relate to cars, are reported as operational leases.

Compensation to employees Compensation to employees in the form of salaries, holiday pay, paid sick leave, etc. is recognised as it is earned. Pensions and other compensation paid after termination of employment are classified as defined contribution or defined benefit schemes.

58 Wihlborgs ANNUAL REPORT 2006 Commitments relating to defined contribution schemes are met through premiums paid to the government agencies or companies that administrate the schemes. A number of Wihlborgs employees have ITP occupational pension schemes which involve regular payments to Alecta. Under IFRS these are classified as defined benefit schemes involving several employers. As there is not sufficient information to report these as defined benefit schemes, they have been reported as defined contribution schemes.

Income tax The tax on profit for the year includes current and deferred income tax for Swedish and foreign Group units. Current tax is based on the taxable profit for the year, which differs from the reported profit in that it has been adjusted for non-taxable income, non-deductible expenses and changes in temporary differences between the carrying amounts and tax bases of assets and liabilities. The Group’s current tax has been calculated on the basis of tax rates applying on the balance sheet date. Deferred tax is calculated using the balance sheet liability method. Under this method deferred tax liabilities and assets are recognised for all temporary differences between the carrying amounts and tax bases of assets and liabilities and for all tax deductions and loss carry-forwards. Deferred tax liabilities and tax assets are calculated using the expected tax rates at the time of reversal of the temporary difference. Deferred tax assets are reduced to the extent that it is unlikely that it will be possible to realise the underlying tax asset within the foreseeable future. In the case of asset acquisitions no deferred tax on consolidated goodwill and negative goodwill is recognised initially for the acquired assets and liabilities. Deferred tax is recognised at the nominal current tax rate with no discount. Deferred tax assets and deferred tax liabilities are eliminated if they refer to income taxes payable to the same tax authority and if the Group is able to settle the tax by payment of the net amount. Both current and deferred tax is recognised in the profit and loss account as income or expense, except where the underlying transaction is credited or charged directly to equity. In such cases the tax is also recognised directly in equity.

Appropriations and untaxed reserves Tax laws in Sweden and certain other jurisdictions allow for the deferral of tax payments through provisions to untaxed reserves in the balance sheet via the income and expense item appropriations. The legal rules on depreciation allow for depreciation in excess of straight-line depreciation. Appropriations and untaxed reserves are not reported in the consolidated financial statements, however. In the consolidated balance sheet untaxed reserves have been divided into deferred tax liabilities and equity. Thereafter, equity is eliminated so that only equity earned after the time of acquisition remains. In the consolidated profit and loss account provisions to or elimination of untaxed reserves is divided into deferred tax and profit for the year.

Properties All fully developed properties in the Group are classified as investment properties, as they are held for the purpose of earning rental income or for capital appreciation or a combination of the two. Investment properties are recognised at fair value in the balance sheet, in accordance with IAS 40. The change in value is recognised in

Wihlborgs ANNUAL REPORT 2006 59 the profit and loss account and is included in operating profit/loss. The Group’s properties are reported as fixed assets in the balance sheet. As the properties are recognised at fair value, depreciation is no longer reported in the consolidated financial statements. Investment properties are valued on a quarterly basis according to an internal valuation model. At year-end, the properties are valued by external values. The valuation model used is based on long-term valuations of returns using the present value of future payments with differentiated required rates of return for each property depending on location, use, condition, standard and other factors. Wihlborgs has one property which is classified as a project property and which has therefore been stated at accumulated acquisition value. Notes 17–19 describe the carrying amounts of the property portfolio and the way in which it has been divided.

Definition of segments Wihlborgs’ primary segments are three geographical market areas: Malmö, Helsing- borg and the Rest of the Öresund region. The property portfolio is also divided into secondary segments by property category: office/retail and industrial/warehouse. Office/retail differs from industrial/warehouse in that the percentage yield is lower and the change in value is higher in percentage terms.

Equipment Assets are recognised in the balance sheet at accumulated acquisition value less accumulated straight-line depreciation and impairment. The assets are written off at 20 per cent of acquisition value per year.

60 Wihlborgs ANNUAL REPORT 2006 Breakdown into shareholders equity In the consolidated financial statements shareholders equity is divided into share capital, other contributed capital, reserves and profit brought forward. In the consolidated financial statements no breakdown into unrestricted and restricted equity is made in the balance sheet, unlike in the parent company, where such a breakdown is made in accordance with the Annual Accounts Act. Dividends to the shareholders are limited to an amount that allows for full provision to be made for restricted equity in the parent company after payment of the dividend. Moreover, a dividend may only be paid if the dividend is justifiable in view of the equity requirements arising from the nature, scope and risks associated with the business and the consolidation needs, liquidity and position of the company and Group.

Financial instruments Financial assets and liabilities are recognised in the balance sheet when the company becomes a party to the commercial terms and conditions of the instrument. A financial asset is removed from the balance sheet when the rights inherent in the agreement are realised, expire or if the company loses control over them. A financial liability is removed from the balance sheet when the obligation arising from the agreement has been met or ceased for other reasons. Financial instruments are recognised either at acquisition value or fair value, depending on the categorisation under IAS 39.

Long-term receivables Long-term receivables primarily refer to promissory note loans made in connection with the sale of properties or companies. It is intended that these promissory notes will be held to maturity. The notes have been valued at acquisition value. If the interest terms attached to the promissory note loans differ from market terms, the acquisition value will differ from the nominal value.

Trade debtors Trade debtors have been valued at acquisition value. The value of each trade debtor is determined individually and only those amounts that are expected to be received are recognised in the balance sheet.

Loans Loans have been recognised at acquisition value.

Derivatives Wihlborgs’ derivatives are categorised as financial assets/liabilities that are held for trading purposes and have been recognised at fair value. Any change in value is recognised in the profit and loss account. Fair value is determined on the basis of official prices on the closing date. In the parent company derivatives have been recognised at acquisition value.

Trade creditors Trade creditors have been valued at accrued acquisition value.

Wihlborgs ANNUAL REPORT 2006 61 Notes Unless otherwise specified, amounts are stated in SEK million.

NotE 1 – EMPLOYEES AND SALARY EXPENSES, ETC. A mutual notice period of two to six months applies between the company and other senior executives. In case of termination by the company the senior executive is entitled to severance pay of of which of which up to 18 months’ salary. Severance pay is offset by other income. Average no. of employees 2006 men 2005 men No severance pay is due in case of termination by the senior Parent company 53 35 46 30 executive. Subsidiaries 25 18 25 19 Group, total 78 53 71 49 Basis of preparation The compensation of the Chief Executive Officer for the financial year 2005 was decided by the Board of Directors. The compensa- Salaries, other compensation and social-security contributions tion of other senior executives was decided by the CEO. Salaries Social- Salaries Social- and other security and others security The following fees have been paid to the company’s auditors: compens. contributions compens contributions 2006 2006 2005 2005 Fees and expenses, SEK ‘000 Parent company 25 13 21 11 Group Parent company of which pension expenses 4 3 2006 2005 2006 2005 Subsidiaries 12 5 9 4 Deloitte AB audit assignments1 1,450 1,050 1,450 1,050 of which pension expenses 2 1 other assignments 1,059 371 1,059 371 Group, total 37 18 30 15 Aaen & Co of which pension expenses, total 6 4 Statsauktoriserade Revisorer A/S 186 100 - - Ernst & Young audit assignments 59 - - - Sick leave 2006 2005 Ernst & Young other assignments 84 - 84 - Total sick leave as a percentage of total ordinary 3,53 1,30 working time of which, share of long-term sick 1) Audit assignments refers to the examination of the annual leave (continuous leave of 60 days or more) 58,11 - report and accounting records and of the Board of Directors and Sick leave, women 5,85 1,82 CEO’s management of the company, other tasks incumbent upon Sick leave, men 2,34 1,05 the company’s auditor as well as advice and other assistance Sick leave, employees <30 years 2,85 0,80 occasioned by observations made in the course of such examina- Sick leave, employees 30–49 years 2,54 1,02 tions or the carrying-out of such other tasks. All other work is Sick leave, employees >49 years 4,36 1,55 classified as other assignments. Breakdown by sex and senior executives Board of Senior Directors executives NotE 2 – Financial instruments and financial 2006 2005 2006 2005 Men 6 7 3 3 risk management Woman 1 1 2 2 Total 7 8 5 5 Financial policy Wihlborgs’ financial activities are guided by the financial policy Compensation of senior executives adopted annually by the Board. The financial policy lays down a set Principles of general rules for how Wihlborgs’ finance function should be The Chairman and other Directors are paid a total fee of SEK managed and how the risks in the company’s financial activities 750,000 in accordance with the decision of the AGM. should be limited. The finance function is aG roup function with Compensation of the Chief Executive Officer and other senior responsibility for the Group’s financing, liquidity planning and man- executives comprises basic salary, other benefits and pension. agement of financial risks. The overall objectives of the finance Other senior executives refers to the Finance Director, Property function are to: Director, Public Relations Director and Executive Assistant to the - secure Wihlborgs’ short- and long-term capital requirements. CEO, who along with the CEO comprised Group management in - optimize net financial items in view of current risk limits. 2006. For the current composition of Group management, see - Adapt the company’s financing on the basis of Wihlborgs’ activi-- page 74. ties for the purpose of achieving and maintaining a stable long- No variable or share-related compensation is paid to Group term capital structure. management. Wihlborgs has a profit-sharing foundation that covers all employees of the Company except the CEO. This Management of financial risks means that all employees, except the CEO, receive shares in Liquidity and borrowing risk Wihlborgs based on the profit for the year. Liquidity and borrowing risk refers to the risk that the company will be unable to meet its payment obligations as a result of Compensation and other benefits in 2005, SEK ‘000 insufficient liquidity or difficulties in obtaining new loans. The Basic Variable Other objective is to ensure that Wihlborgs is always able to conclude salary/fee Compens. benefits Pension Total transactions when an opportunity arises and meet its obligations. Chairman of the Board 200 - - - 200 Liquidity risk is managed by ensuring that Wihlborgs has access Chief Executive Officer 1,841 - - 635 2,476 to credit lines or cash and cash equivalents that can be used at Other senior executives 3,021 - 161 990 4,172 short notice. Borrowing risk is the risk that finance will be una- vailable or obtainable only at highly un-favorable terms at a cer- Other benefits refer to company cars. tain time. To limit the borrowing risk, Wihlborgs strives to use credit facil- Pension expenses refer to the expense recognised in the profit ities with long maturities as well as a broad pool of creditors. and loss account for the year. Through long-term committed lines of credit, Wihlborgs has The retirement age for the Chief Executive Officer is 65 years. secured access to finance. Wihlborgs’ total available credit is SEK Expenses relating to the Chief Executive Officer’s pension refers 7,112m, of which SEK 6,444m had been drawn on 31 December to a premium of 35 per cent of the CEO’s pensionable salary dur- 2006. ing his period of employment. For other senior executives the ITP occupational pension plan Interest risk applies and the retirement age is 65 years. Interest risk refers to the risk that the company’s results or cash flow will be affected by a change in market interest rates.I nterest Severance pay expenses are the single largest expense item for Wihlborgs. How A mutual period of notice of six months applies for the Chief much and how fast a change in interest rates affects the results Executive Officer. depends on the chosen fixed-rate term.I ncreases in interest rates in case of termination by Wihlborgs the CEO is entitled to sev- are often prompted by higher inflation.I n commercial rental erance pay equivalent to 18 months’ salary. Severance pay is off- agreements rents are normally index-adjusted in line with rising set by other income. No severance pay is due in case of termina- inflation. This means that Wihlborgs can benefit from higher rents tion by the CEO. when interest rates rise, albeit with a slight delay. Wihlborgs

62 Wihlborgs ANNUAL REPORT 2006 primarily uses loans with short fixed-rate terms. With the help of Interest and maturity structure as at 31 December 2006 interest rate swaps the company can achieve the desired fixed- Interest maturity Loan maturity rate term and hedge its overall interest expenses. Through a Maturity, years Loan amount, Average inte- Available Used, combination of loans with short fixed-rate terms and interest rate SEKm rest rate,% credit, SEKm SEKm swaps a large measure of flexibility can be achieved and the 2007 5,133 3,55 221 221 fixed-rate term can be adjusted to meet the targets for the com- 2008 48 4,98 106 106 pany’s financial activities. And without the need to renegotiate 2009 25 4,04 1,242 1,242 the underlying loans. To manage interest risk and achieve stabili- 2010 1,035 3,95 635 628 ty in net financial items, the average fixed-rate term of Wihl- 2011 - - 4,601 3,940 borgs’ borrowings has been adjusted to the estimated risk level >2011 203 4,80 307 307 and interest rate expectations. As at 31 December 2006, Wihl- Total 6,444 3,66 7,112 6,444 borgs’ average fixed-rate term was 17 months. The average maturity of loans, including committed lines of credit, was 4,4 Derivates 4 4 years (4,8). Totalt incl. derivate 6,448 6,448

The derivatives portfolio contains three derivative products. Counterparty risk Terminable swap of SEK 1m. The bank can terminate the swap Counterparty risk is the risk that a counterparty will be unable to each quarter. Wihlborgs pays a predetermined interest each meet its delivery or payment obligations. In Wihlborgs’ financial quarter and receives interest corresponding to 3 months Stibor. activities counterparty risk arises primarily when the company The swap has existed during one measurable occasion in 2006. invests surplus liquidity, enters into an interest rate swap or The swap was valued at nominal value as at 31 December 2006. obtains long-term credit commitments. To reduce counterparty risk, Wihlborgs’ financial policy states that the company should Terminable swap of SEK 1m where Wihlborgs will pay interest only enter into agreements with banks or equivalent credit insti- during the first year of 2.60 per cent and receives interest corre- tutions with a rating of A or higher from both Moody’s and sponding to 3 months’ Stibor. Between years 2–10 Wihlborgs Standard & Poor’s. Risks relating to trade debtors are reduced will pay fixed interest of 3.57 per cent and will receive interest through customary credit assessments of prospective tenants pri- corresponding to 3 months Stibor as long as the bank does not or to acceptance. Similarly, the company also assesses the credit- terminate the swap. The bank may terminate the swap after year worthiness of any promissory note receivables arising from the 1. The swap was valued at nominal value at 31 December 2006. sale of properties and/or businesses.

10-year threshold swap of SEK 1 billion starting in December Currency risk 2007 containing an interest threshold of 4.75 per cent. Wihl- Currency risk refers to the risk that Wihlborgs’ profit and loss borgs will pay 3.48 per cent as long as the short-term interest 3 account and balance sheet will be negatively affected by a months Stibor does not exceed 4.75 per cent. Wihlborgs will change in exchange rates. Wihlborgs owns properties in Den- receive interest corresponding to 3 months Stibor. The swap has mark and Germany. To avoid currency risk, these properties have a market value according to IAS and, at year end there was an largely been financed in Danish kronor and euro, respectively. under value of SEK 4m in the swap. The swap has affected the Any changes in exchange rates will thus affect the net profit fixed interest according to the bank’s calculations of 3.5 years. from either country.

Operational risk Operational risk in Wihlborgs’ financial activities refers to the risk of incurring as a result of inadequate procedures and/or irregular- ities. Good internal control procedures, appropriate administrative systems, staff training and access to reliable valuation and risk models constitute a good foundation for reducing operational risks. Wihlborgs’ finance function continuously monitors the company’s administrative security and control. NotE 3 – Segments

The Group’s business is geographically divided into market areas, which also constitute the primary segment for reporting and accounting purposes. The business is also broken down by property category. This breakdown constitutes the Group’s secondary segment. Bor- rowings and financial expenses have been broken down by market area based on each area’s share of the total value of the properties.

Primary segment Market areas Malmö Helsingborg Rest Öresund Unattributed Total 2006 2005 2006 2005 2006 2005 2006 2005 2006 2005 Rental income 511 390 265 248 133 98 - - 909 736 Property expenses -160 -124 -85 -85 -37 -30 - - -282 -239 Net operating income 351 266 180 163 96 68 0 0 627 497

Central administration ------28 -26 -28 -26 Gain/loss from sale of properties 4 2 3 7 3 0 - - 10 9 Change in value of properties 458 105 189 109 -18 104 - - 629 318 Operating profit/loss 813 373 372 279 81 172 -28 -26 1,238 798

Financial income ------17 15 17 15 Financial expenses 109 -88 -52 -48 -30 -28 - - -191 -164 Profit/loss before tax 704 285 320 231 51 144 -11 -11 1,064 649

Tax on profit for the year -144 -79 -64 -63 -8 -40 2 3 -214 -179 Net profit/loss 560 206 256 168 43 104 -9 -8 850 470

Properties 6,197 4,207 2,978 2,323 1,713 1,360 - - 10,888 7,890 Other assets ------333 283 333 283 Total assets 6,197 4,207 2,978 2,323 1,713 1,360 333 283 11,221 8,173

Loans 3,670 2,340 1,764 1,292 1,014 756 - - 6,448 4,388 Other liabilities ------1,106 943 1,106 943 Total liabilities 3,670 2,340 1,764 1,292 1,014 756 1,106 943 7,554 5,331

Acquisition of properties for the year 2,495 80 533 57 501 127 - - 3,529 264 Other investments in properties 280 155 66 87 81 44 - - 427 286

Secondary segment, property category Office/Retail Industrial/Warehouse Total 2006 2005 2006 2005 2006 2005 Rental income 650 499 259 237 909 736 Carrying amount of properties 8,348 5,863 2,540 2,027 10,888 7, 890 Investments and acquisition of properties 3,315 360 641 190 3 956 550

Wihlborgs ANNUAL REPORT 2006 63 NotE 4 – RENTAL INCOME NotE 9 – Change in value of investment properties. Group Parent company 2006 2005 2006 2005 Group Parent company Gross rental income 997 824 - - 2006 2005 2006 2005 Cost, unlet -88 -88 - - Change in value of investment 909 736 0 0 properties 629 318 - - 629 318 0 0 Rental income includes rent and charges passed on to tenants for heating, electricity, water, sewage and property tax as well as To be able to determine the change in value for each period, the deductions for rent discounts for which accruals have been made market value of the properties is assessed at the end of each during the term of the respective contracts. quarter. Internal valuations are made for 31 March, 30 June and 30 September. An external valuation is made for 31 December. Malmöbryggan Fastighetsekonomi AB and Savills Sweden AB have valued all of Wihlborgs’ Swedish properties as at 31 Decem- ber 2005. The market value of each property was assessed individually. Our Danish properties have been valued by DTZ. The NotE 5 – PROPERTY EXPENSES property in Germany has been valued by Colliers International. Pages 36-37 gives an account of valuation methods, value basis, Group Parent company market parameters etc. that are used when assessing the market 2006 2005 2006 2005 value of the property stock. Heating, electricity, water and sewage 96 79 - - Operating expenses 57 47 - - Repairs and maintenance 48 48 - - Property tax 33 25 - - Ground rent 5 4 - - NotE 10 – OTHER OPERATING INCOME AND Property administration 43 36 - - EXPENSES 282 239 0 0 Parent company 2006 2005 Other operating income 70 61 Other operating expenses -70 -61 0 0 NotE 6 – DEPRECIATION Refers to expenses passed on by the parent company to other In accordance with IAS 40, investment properties are reported at Group companies, primarily property administration, property fair value, which means that no depreciation is recognised for management and share of central administration. the property portfolio.

Group Parent company Equipment 2006 2005 2006 2005 Property management 0 0 0 0 NotE 11 – PROFIT/LOSS FROM INTERESTS IN GROUP Central administration and marketing 1 1 1 1 1 1 1 1 COMPANIES

Parent company 2006 2005 Dividends on interests 1,398 76 Profit sold interests 117 - Impairment loss interests -1,027 - NotE 7 – CENTRAL ADMINISTRATION AND 488 76 MARKETING

Refers to Group management expenses, expenses attributable to the public nature of the company and other expenses connected with the company type. Property-related administration is not included, as it is treated as a property expense. Expenses for cen- NotE 12 – PROFIT/LOSS FROM INTERESTS IN tral administration and marketing includes depreciation on central JOINT VENTURES equipment of 1 (1) in the Group and 1 (1) in the parent company. Group Parent company 2006 2005 2006 2005 Share in profit/loss 7 1 - - Additional expense sold interests - - - -3 7 1 0 -3 NotE 8 – GAIN/LOSS FROM SALE OF INVESTMENT PROPERTIES Group Parent company 2006 2005 2006 2005 Sale proceeds 1,560 337 - - NotE 13 – PROFIT/LOSS FROM OTHER SECURITIES Carrying amount and expenditure -1,550 -328 - - AND ASSETS THAT ARE FIXED ASSETS 10 9 0 0 Group Parent company The gain/loss from sales of properties is the difference between 2006 2005 2006 2005 the sale proceeds and the carrying amount at the last end of Interest expenses, group companies - - 212 111 quarter adjusted for investments and expenses. The carrying Interest expenses, other 3 6 - 1 amount of each property is adjusted every quarter for changes in 3 6 212 112 market value.

NotE 14 – INTEREST EXPENSES AND SIMILAR ITEMS

Group Parent company 2006 2005 2006 2005 Interest expenses, group companies - - 29 15 Interest expenses, other 187 168 150 122 187 168 179 137

64 Wihlborgs ANNUAL REPORT 2006 NotE 15 – Change in value of derivatives of the properties’ total lease value. This is why no classification has been made for these properties as real estate used in busi- Interest rate derivatives are a financial instrument which under ness operations. Wihlborgs does not have any properties that IAS 39 should be recognised at fair value in the balance sheet. have been acquired or rebuilt with the intention of being sold Changes in the value of interest rate derivatives are recognised in and therefore no property is shown as stock. the item Change in value of derivatives in the profit and loss account. The valuation principles of derivatives appears in Note Group Parent company 2. As of 2006 the parent company applies to IAS 39 in valuation 2006 2005 2006 2005 of derivatives. Income statements before 2006 have not been Investment properties 10,707 7,832 - - translated according to the adjusted accounting principle. Project properties 181 58 - - 10,888 7,890 0 0

Real estate used in business operations is shown at market value and project properties are shown at accumulated acquisition value adjusted for any depreciation or write-downs. The market val- NotE 16 – TAX ON PROFIT FOR THE YEAR ue of the project property is SEK 270m (66m).

SEK 34m (32m) of the properties’ stated value refers to activated Group Parent company loan costs. When estimating the loan cost to be activated, an 2006 2005 2006 2005 interest rate corresponding to the average interest on the loan Current tax on profit for the year 12 5 5 2 portfolio has been applied. Adjustment for current tax from previous years -9 - - - As at 31 December 2006, the interest rate was 3.66 per cent (3.23) Total current tax 3 5 5 2 Deferred tax 211 174 - - 2006 2005 Total tax 214 179 5 2 Rateable value of Swedish properties 4,150 3,145 Net value of Swedish properties 10,021 7,023 Nominal tax (28%) on profit after financial items 298 182 141 22 Malmöbryggan Fastighetsekonomi AB and Savills Sweden AB Tax effects of adjustment items have valued all of Wihlborgs’ properties in Sweden as at 31 - Dividends from subsidiaries - - -391 -21 December 2006. The values of the properties are individually - Impairment loss shares group considered to correspond to the market value of the respective companies - - 287 - property. The properties in Denmark have been valued by DTZ. - Revaluation of loss carried forward The property in Germany has been valued by Colliers International. in acquired company -32 - - - Page 36-37 gives an account of valuation methods, value - Tax-exempt profit from sale of basis, market parameters etc that are used when assessing the group companies -45 -5 -33 - market value of the property stock. - Other 2 2 1 1 Total tax excl current tax from previous years 223 179 5 2

Adjustment for current tax from previous years -9 - - - NotE 18 – INVESTMENT PROPERTIES Total tax 214 179 5 2 Group Parent company In the parent company tax income of SEK 2m attributable to 2006 2005 2006 2005 Group contributions paid has been credited directly to equity. Opening acquisition value 7,832 7,258 - - Property acquisitions 3,529 264 - - The group shows a current tax on profit for the year of SEK 12m. Investments in existing properties 304 282 - - The current tax is calculated on the profit subject to tax in com- Sales and disposals -1,550 -328 - - panies that are part of the group. This is lower than the group Change in value 629 318 - - profit before tax. Currency translation -37 38 - - Carrying amount 10,707 7,832 0 0 The principle reasons for this are: - Value change of management properties not being included in the taxable result - Permitted depreciation on buildings for tax purposes, land improvements and property inventories that do not affect the consolidated result NotE 19 – PROJECT PROPERTIES - Direct deductible amount for tax purposes regarding rebuilding investments on properties not affecting the consolidated Group Parent company result. 2006 2005 2006 2005 Opening acquisition value 58 54 - - Calculating the current tax on profit for the year in the Investments in existing properties 123 4 - - group for 2006 Carrying amount 181 58 0 0 Pre-tax profits 1 064 Value changes -629 The project property is taxed jointly with properties that are Depreciation of properties for tax purposes -226 reported as investment properties. Direct deductions, property investments -80 Deficit deduction used -154 Taxable profit in addition to booked property sales 15 Net change to tax allocation reserve etc. 52 Taxable profit 42 NotE 20 – EQUIPMENT Taxable profit 12 Group Parent company 2006 2005 2006 2005 Opening acquisition value 30 54 5 4 Investments 7 1 - 1 NotE 17 – PROPERTIES Sales and disposals -2 -25 - - Closing accrued acquisition values 35 30 5 5 With one exception, Wihlborgs’ properties are classified as buildings held for investment purposes. At the turn of the year, Wihl- Opening depreciation -23 -47 -1 - borgs had a property with a stated value of SEK 181m (58m) as a Acquisitions via companies -5 - - - project property. This property was acquired in 2004. Construc- Sales and disposals 2 25 - - tion, which was started at the turn of the year 2005/2006, is Depreciation charge for the year -1 -1 -1 -1 expected to be completed in 2007. Wihlborgs leases offices in Copenhagen, Malmö and Helsingborg in its own properties. The Accumulated depreciation -27 -23 -2 -1 lease value of its own leases is less in all cases than 20 per cent Carrying amount 8 7 3 4

Wihlborgs ANNUAL REPORT 2006 65 NotE 21 – INTERESTS IN GROUP COMPANIES NotE 23 – OTHER LONG-TERM SECURITIES HOLDING

Parent Company 2006 2005 Group Parent company Opening acquisition value 972 855 2006 2005 2006 2005 Acquisitions 738 30 Opening acquisition value 10 - 10 - Sales -20 - Acquisitions of the year - 10 - 10 Shareholder contributions made 1 027 87 Total 10 10 10 10 Depreciation -1 027 - Carrying amount 1 690 972 Group and parent company Registrered Capital Carrying Name/Reg. no. office share % amount Subsidiary Registrered Capital Carrying Sveland Sakförsäkringar AB Name/Reg. no. office share % amount 516406-0229 Hässleholm 5,4 10 Bastionen Syd AB, 556072-2042 Malmö 100 90 Exab Utvecklings AB, 556353-2828 Malmö 100 0 Fastighets AB Bronsdolken, 556112-0345 Malmö 100 0 Fastighets AB Kvävet, 556222-8071 Malmö 100 2 NotE 24 – DEFERRED TAX ASSETS Fastighets AB Plinius, 556033-6538 Malmö 100 16 Fastighets AB Stillman, 556082-1752 Malmö 100 38 The asset refers to deferred tax relating to the Group’s property Hilab Malmö AB, 556660-1786 Malmö 100 0 holdings in Denmark. It is expected that the amount will be used Ideon AB, 556239-8718 Lund 40 80 to reduce taxable profits in the next few years. Note 29 shows Kniven 2 AB, 556706-9355 Malmö 100 9 what components the deferred tax consists of. Kolgafour AB, 556627-7843 Malmö 100 7 Lunds Byggmästaregille AB, 556058-9888 Malmö 100 1 M2 Fastigheter AB, 556101-4332 Malmö 100 555 Malmö Börshus AB, 556115-8543 Malmö 100 40 NotE 25 – OTHER LONG-TERM RECEIVABLES Spillepengen Fastighets AB, 556107-5002 Malmö 100 25 Utvecklings AB Kranen, 556286-9999 Malmö 100 108 Wihlborg A/S, Danmark, A/S 190 168 Copenhagen 100 79 Group Parent company Wihlborgs Boplatsg. 5 AB, 556675-2449 Malmö 100 0 2006 2005 2006 2005 Wihlborgs Borgeby AB, 556675-2639 Malmö 100 0 Maturity date 1-5 years from Wihlborgs Bronsdolken AB, 556232-5919 Malmö 100 4 balance sheet date 37 53 - 12 Wihlborgs Erik Menved 37 AB, 556704-3699 Malmö 100 156 Maturity date later than 5 years Wihlborgs Fastigheter i NVS AB, 556271-3924 Malmö 100 3 from balance sheet date 5 7 - - Wihlborgs Fisken 18 AB, 556675-2357 Malmö 100 0 Total 42 60 0 12 Wihlborgs Flintan 3 AB, 556675-2647 Malmö 100 0 Wihlborgs Gallerian AB, 556704-3632 Malmö 100 163 Wihlborgs Grynbodagatan AB, 556675-2597 Malmö 100 0 Wihlborgs Gäddan 6 AB, 556704-3681 Malmö 100 8 NotE 26 – Prepayments and accrued income Wihlborgs Holding AB, 556701-2827 Malmö 100 0 Wihlborgs Kirseberg AB, 556691-4874 Malmö 100 0 Group Parent company Wihlborgs Lönngatan AB, 556704-3657 Malmö 100 15 2006 2005 2006 2005 Wihlborgs Måsen 16 AB, 556627-7827 Malmö 100 7 Rental income 2 8 - - Wihlborgs Måsen 17 AB, 556627-7835 Malmö 100 2 Anticipated dividends - - 1,320 - Wihlborgs N.Vallgat. 80-82 AB, 556675-2613 Malmö 100 0 Other 6 5 - 1 Wihlborgs Nils 21 AB, 556704-3616 Malmö 100 52 Total 8 13 1,320 1 Wihlborgs Nils 24 AB, 556704-3731 Malmö 100 4 Wihlborgs Polisett AB, 556703-0589 Malmö 100 0 Wihlborgs Priorinnan AB, 556675-2423 Malmö 100 0 Wihlborgs Ritaren 1 AB, 556675-2605 Malmö 100 0 Wihlborgs Rosengård AB, 556699-7986 Malmö 100 0 NotE 27 – CASH AND BANK BALANCES Wihlborgs Sparven 15 AB, 556704-3624 Malmö 100 215 Wihlborgs Sqvalpan AB, 556675-2399 Malmö 100 0 The Group’s cash and cash equivalents comprise cash assets and Wihlborgs Sufflören 3 BA , 556704-3640 Malmö 100 7 bank balances. The Group has unused overdraft facilities, which Wihlborgs Söderarm 11 AB, 556675-2407 Malmö 100 0 are not included in cash and cash equivalents, of SEK 93m (75m). Wihlborgs Terminalen AB, 556681-1898 Malmö 100 0 Wihlborgs Uvenine AB, 556695-2502 Malmö 100 0 Wihlborgs Vikingen 10 AB, 556675-3082 Malmö 100 0 WJ Bygg AB, 556060-0529 Malmö 100 4 NotE 28 – EQUITY 1 690 The Group comprises 102 (67) companies. Accumulated translation differences in the Group amount to SEK 4m (15m).

No. of registered shares at beginning of year 19,214,182 NotE 22 – INTERESTS IN JOINT VENTURES Share split 1:10 Reg. Date 06-05-10 19,214,182 No. of registered shares at end of year 38,428,364 Group Parent company 2006 2005 2006 2005 All shares carry equal voting rights, one vote per share. Proposed Opening acquisition value 53 52 52 52 dividend per share, SEK 5.50 (3.50). Nominal value per share, SEK Share in profit/loss 7 1 - - 5.00 (10.00). Carrying amount 60 53 52 52

Name/Reg. no. Registrered Capital Carrying Parent company office share % amount Medeon AB, 556564-5198 Malmö 40,0 4 Dockan Exploatering AB, 556594-2645 Malmö 33,3 48 52 Dotterbolagen PeWi Bostadsutveckling HB, 969687-5492 Helsingborg 50,0 8 Ideon Center AB, 556239-0384 Lund 50,0 0 60

66 Wihlborgs ANNUAL REPORT 2006 NotE 29 – DEFERRED TAX LIABILITY NotE 35 – ADJUSTED ITEMS THAT ARE NOT INCLUDED IN CASH FLOW ETC. Group Parent company 2006 2005 2006 2005 Group Parent company Deferred tax has been calculated 2006 2005 2006 2005 on the basis of: Change in value of investment Loss carry-forwards -131 -58 - - properties -629 -318 - - Difference between carrying amount Gain/loss from sale of investment and tax base in respect of properties 845 626 - - properties -10 -9 - - Untaxed reserves 10 47 - - Depreciations of equipment 1 1 1 1 Net liability 724 615 0 0 -638 -326 1 1 Adjustment for deferred tax asset Note 24 10 18 - - Deferred tax liability 734 633 0 0 NotE 36 – CHANGE IN OPERATING CAPITAL Total loss carry-forwards, which have been taken into account in calculating deferred tax, are SEK 467m (207m). SEK 335m of the Group Parent company tax losses are blocked until 2012. The tax losses include fixed 2006 2005 2006 2005 assets of SEK 8m on the sale of immovable property which can be Change according to balance sheet -7 100 -1,316 22 utilized only against gains on the sale of immovable property and a Operating capital in acquired deficit in the Danish company ofS EK 40m. Group company -34 -3 - - Operating capital in divested Group company 13 3 - - Currency effect 1 - - - NotE 30 – OTHER LONG-TERM LIABILITIES Change in income tax liability -4 -3 - - Change in assets and liabilities in Refers largely to stamp duties that become payable only when a respect of interest income, dividends property is sold. dividends and interest expenses 12 -8 1,327 -15 -19 89 11 7

NotE 31 – OVERDRAFT FACILITY NotE 37 – ACQUISITION OF INTERESTS IN GROUP Group Parent company COMPANIES 2006 2005 2006 2005 Available credit limit 93 97 75 75 According to the analyses made in connection with the acquisi- Unused share -93 -75 -75 -75 tions, the value of acquired assets and liabilities in acquired Used share 0 22 0 0 Group companies were as follows: 2006 2005 Properties 2,924 125 Other tangible fixed assets 2 - NotE 32 – LIABILITIES TO CREDIT INSTITUTIONS Long-term receivables Group company 143 - Financial fixed assets 145 - Group Parent company Short-term receivables 23 1 2006 2005 2006 2005 Cash and bank balances 228 1 Maturity up to 1 year Minority interest -120 - from balance sheet date 217 434 - - Long-term liabilities Group companies -1,218 -113 Maturity between 1 and 5 years Long-term liabilities -275 - from balance sheet date 5,920 3,716 5,532 3,638 Current liabilities -57 -4 Maturity later than 5 year Purchase price 1,795 10 from balance sheet date 307 202 - - Plus transfer of seller’s receivable 1,075 113 Derivatives 4 14 4 - Purchase price paid 2,870 123 6,448 4,366 5,536 3,638 Less cash and cash equivalents in acquired comp. -228 -1 Impact on consolidated cash and As the company’s committed lines of credit at year-end exceeded cash equivalents 2,642 122 loans due during the following year, the full amount of debt relating to overdraft facilities and liabilities to credit institutions has been treated as a long-term liability. NotE 38 – SALE OF INTERESTS IN GROUP COMPANIES

According to the analyses made in connection with the sales, the NotE 33 – PREPAYMENTS AND ACCRUED INCOME value of divested assets and liabilities in divested Group companies were as follows: Group Parent company 2006 2005 2006 2005 2006 2005 Properties 1 ,392 177 Advance payment of rents 128 93 - - Short-term receivables 3 - Accrued interest expenses 6 18 5 15 Cash and bank balances - 2 Other 55 64 12 10 Long-term liabilities Group companies -605 -128 189 175 17 25 Long-term liabilities -5 -7 Current liabilities -16 -3 Purchase price 769 41 Less issued promissory note - -9 Plus transfer of seller’s receivable 605 128 NotE 34 – COMMITMENTS AND CONTINGENT Purchase price received 1,374 160 LIABILITIES Less cash and cash equivalents in divested comp. - -2 Impact on consolidated cash and cash equiv. 1,374 158 Group Parent company Commitments 2006 2005 2006 2005 Property mortgages 7,250 5,003 - - Promissory notes - - 5,911 3,853 7,250 5,003 5,911 3,853 NOTE 39 – RELATED-PARTY TRANSACTIONS Contingent liabilities 28 46 20 20 Erik Paulsson and his family and company have a controlling influence in Peab AB. In 2006, Wihlborgs received income from lettings activities of SEK 8m from the Peab Group. Wihlborgs has paid SEK 124m to the Peab Group for contract work. At the year end Wihlborgs has receivables from Peab amounting to SEK 3m and liabilities amounting to SEK 28m.

Wihlborgs ANNUAL REPORT 2006 67 Balance sheets and profit and loss accounts are subject to confirmation at the Annual General Meeting on 26 April 2007. To the best of our knowledge, the annual report has been prepared in accordance with generally accepted accounting principles for listed companies, the information provided complies with actual circumstances and no information of material significance has been omitted that could affect the impression of the company created by the annual report.

Malmö, 21 March 2007

Erik Paulsson Kerstin Fredriksson Anders Jarl Chairman Deputy Chairman Chief Executive Officer

Sten K Johnson Tommy Qvarfort Johan Qviberg

Lars Sköld

We presented our audit report on 23 March 2007 Deloitte AB

Torbjörn Svensson Authorised Public Accountant

68 Wihlborgs ANNUAL REPORT 2006 Audit report n To the annual meeting of the shareholders of Wihlborgs Fastigheter AB (publ) Corporate identity number 556367-0230 We have audited the annual accounts, the consolidated accounts, the accounting records and the administration of the board of directors and the managing director of Wihlborgs Fastigheter AB (publ) for the financial year 2006. The annual accounts of the company are included in the printed version of this document on pages 48-68. The board of directors and the managing director are responsible for these accounts and the administration of the company as well as for the application of the Annual Accounts Act when preparing the annual accounts and the application of international financial reporting standards IFRS as adopted by the EU and the Annual Accounts Act when preparing the consolidated accounts. Our responsibility is to express an opinion on the annual accounts, the consolidated accounts and the administration based on our audit.

We conducted our audit in accordance with generally accepted auditing standards in Sweden. Those standards require that we plan and perform the audit to obtain reasonable assurance that the annual accounts and the consolidated accounts are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the accounts. An audit also includes assessing the accounting principles used and their application by the board of directors and the managing director and significant estimates made by the board of directors and the managing director when preparing the annual accounts and consolidated accounts as well as eval- uating the overall presentation of information in the annual accounts and the consolidated accounts. As a basis for our opinion concerning discharge from liability, we examined significant decisions, actions taken and circumstances of the company in order to be able to determine the liability, if any, to the company of any board member or the managing director. We also examined whether any board member or the managing director has, in any other way, acted in contravention of the Companies Act, the Annual Accounts Act or the Articles of Association. We believe that our audit provides a reasonable basis for our opinion set out below.

The annual accounts have been prepared in accordance with the Annual Accounts Act and give a true and fair view of the company’s financial position and results of operations in accordance with generally accepted accounting principles in Sweden. The consolidated accounts have been prepared in accordance with international financial reporting standards IFRS as adopted by the EU and the Annual Accounts Act and give a true and fair view of the group’s financial position and results of operations. The administration report is consistent with the other parts of the annual accounts and the consolidated accounts.

We recommend to the annual meeting of shareholders that the income statements and balance sheets of the parent company and the group be adopted, that the profit of the parent company be dealt with in accordance with the proposal in the administration report and that the members of the board of directors and the managing director be discharged from liability for the financial year.

Malmö, 23 March 2007 Deloitte AB

Torbjörn Svensson, Authorized Public Accountant

Wihlborgs ANNUAL REPORT 2006 69 Corporate Governance Report

n Wihlborgs Fastigheter AB implements the Swedish Code of Corporate Govern- ance. This corporate governance report does not form part of the formal financial statements but constitutes a separate report. Wihlborgs’ Corporate Governance Report has not been examined by the company’s auditors.

Corporate governance The shareholders influence the company’s governance by participating in and exer- cising their voting rights at the Annual General Meeting, which is Wihlborgs’ highest decision-making body. All shares carry the same voting rights, i.e. a shareholder’s voting rights are proportionate to his share of the company’s share capital. The management of and responsibility for the Wihlborgs Group is divided between the Board of Directors and Chief Executive Officer, in accordance with the Swedish Companies Act, other laws and regulations, the listing agreement with the Stockholm Stock Exchange, the Swedish Corporate Governance Code, and the company’s Articles of Association and internal control instruments, such as the rules of procedure for the Board of Directors and the instructions to the Chief Executive Officer.

The Swedish Corporate Governance Code The chief purpose of the Code is to contribute to improving standards of corporate governance in Swedish companies in order to ensure that they meet the owners’ return requirements for their invested capital. Any departures from the rules contained in the Code must be reported and justified according to the principle “comply or explain”. The reasons for each departure much be clearly explained.

Wihlborgs has departed from the rules in the following respects: • No separate audit committee has been appointed. Instead, all members of the Board except the CEO have performed the tasks of the audit committee.

THE BOARD

Erik Paulsson Kerstin Fredriksson Anders Jarl Sten K Johnson Chairman of the Board Deputy Chairman Director Director Born 1942. Elected in 2004. Born 1942 . Elected in 2004. Born 1956. Elected in 2004. Born 1945. Elected in 2004.

Other Board assignments: Main occupation: Chairman of Main occupation: Main occupation: CEO of Vice Chairman of the board the Municipal Executive Board CEO of Wihlborgs Fastighe- Midway Holding AB. in Fabege AB. Chairman of in the Municipality of Burlöv. ter AB. SkiStar AB. Director of Nola- Other Board assignments: to AB. Other Board assignments: Shareholding in Wihlborgs: Chairman of Midway Hol- Chairman of Skånet AB. Coun- 24,800 shares with family ding AB and Skåne-Möllan Shareholding in Wihlborgs: cillor of Region Skåne. Director and via company. AB. 42,400 shares together with of the Regional Development family and via company. Erik Agency (Regionala utvecklings- Shareholding in Wihlborgs: Paulsson also owns shares in nämnden), SEB local Board of 243,040 shares with family Brinova Fastigheter AB. Directors in Arlöv, Sydvatten AB and via company. and SYSAV AB.

Shareholding in Wihlborgs: 200 shares.

70 Wihlborgs ANNUAL REPORT 2006 • No separate remuneration committee has been appointed. Instead, all members of the Board except the CEO have performed the tasks of the remuneration committee. No member of the company’s management has been present when these issues have been discussed. • There are no plans to provide facilities for shareholders to participate in general meetings via remote link, the reason being that the expense does not correspond to the benefit.

The Board’s reason for not establishing an audit committee or remuneration committee is that this is not warranted in view of the size of the company. The issues involved can be discussed in connection with the regular Board meetings. Wihlborgs interest-rate council has the task of following the trend in interest rates and submitting proposals to the Board. The interest-rate councils responsibilities and tasks are not fixed in the rules of procedure but appears in accordance with current financial policy.

Articles of Association Wihlborgs’ current Articles of Association were adopted at the Annual General Meeting held on 26 April 2006. The company’s business is to acquire, manage, improve and sell properties primarily in the Öresund region and to conduct such other activities as are compatible therewith. The Board of Directors shall be based in Malmö. The articles of association can be found on pages 79–80.

2006 Annual General Meeting Wihlborgs’ Annual General Meeting took place on 26 April 2006. 25.4 per cent of the number of votes (150 shareholders) were represented at the meeting. The minutes of the Annual General Meeting is available on the Wihlborgs website, www.wihlborgs.se. Decisions taken by the meeting included the following:

Tommy Qvarfort Johan Qviberg Lars Sköld Director Director Director Born 1944. Elected in 2006. Born 1981. Elected in 2004. Born 1950. Elected in 2005. Self-employed. Main occupation: Main occupation: CEO of Abitare Fastighetsut- Equity Sales Öhman Fond- Other Board assignments: veckling. kommission. Chairman of Attje - a Swedish museum of mountain and Other Board assignments: Shareholding in Wihlborgs: Sami culture. Chairman of APQ El AB. 142,820 shares. Shareholding in Wihlborgs: Shareholding in Wihlborgs: 500 shares. 50,000 shares.

Wihlborgs ANNUAL REPORT 2006 71 Election of Directors and auditors The AGM decided that the Board should consist of seven Directors. Kerstin Fre- driksson, Anders Jarl, Sten K Johnson, Erik Paulsson, Johan Qviberg and Lars Sköld were re-elected to the Board and Tommy Qvarfort was elected as a new Director. It was noted that the registered auditing firm Deloitte AB had been appointed as the company’s auditors at an extraordinary general meeting in 2004 with the Authorised Public Account Torbjörn Svensson as chief auditor.

Nomination Committee It was resolved that the Nomination Committee should consist of representatives of the three largest shareholders of the company at the end of the third quarter of 2006, plus one representative of the smaller shareholders, as represented by the Swedish Shareholders’ Association (Aktiespararna). The Nomination Committee also decides if the Chairman of the Board shall be included in the Committee. The representative of the largest shareholder shall be made chairman of the Nomination Committee unless otherwise stated. No fees are paid to the members of the committee, but the company is responsible for adequate costs which arise as a result of the committees assignment.

Acquisition and transfer of shares owned by the company The AGM resolved to authorise the Board, during the period up to the next AGM, to buy back and transfer Wihlborgs shares up to a maximum of ten per cent of all outstanding shares.

New issue The AGM resolved to authorise the Board, during the period up to the next AGM, to decide on the issue of new shares up to a maximum of ten per cent of all outstanding shares.

Decision upon a split A 2:1 split was announced at the annual general meeting held on 26 April 2006. One old share, ratio value SEK 10, was replaced with two new shares, ratio value SEK 5 each, without any change in the companys share capital.

GROUP MANAGEMENT

Anders Jarl Thomas Bråhagen Christer Johansson Iréne Johansson Catharina Lachmann Chief Executive Officer Property Director Finance Director Public Relations Director Executive Assistant to Malmö, born 1956 Malmö, born 1955 Svedala, born 1948 Malmö, born 1953 the CEO Employed by Wihlborgs since Employed by Wihlborgs since Employed by Wihlborgs Employed by Wihlborgs Svedala, born 1955 2001. 1990. since 1996. since 1992. Employed by Wihlborgs since 1985. Shareholding in Wihlborgs: Shareholding in Wihlborgs: Shareholding in Wihlborgs: Shareholding in Wihlborgs: 24,800 shares together with 15,600 shares together with 14,800 shares via compa- 7,400 shares via companies. Shareholding in Wihlborgs: family and via company. family and via company. nies. -

72 Wihlborgs ANNUAL REPORT 2006 The Nomination Committee The Swedish Corporate Governance Code states that the appointment of the Board of Directors and auditors should be prepared through a structured and transparent process controlled by the owners which provides opportunities for all shareholders to express their views on and make proposals on these issues and which establishes a good foundation for well considered decisions. The nomination committee is the AGM’s body for preparing decisions relating to appointments.

Wihlborgs’ Nomination Committee has therefore been drawing up proposals for chairman of the AGM, Chairman of the Board, Directors and Directors’ fees, and auditors and auditors’ fees. In accordance with the AGM’s decision, the names of the candidates proposed by the Nomination Committee were announced on 18 October 2006. The Nomination Committee consists of Anders Silverbåge from Brinova Fastigheter AB, Peter Lind from Maths O Sundqvist, Erik Törnberg from Investment AB Öresund and Leif Franzon from the Swedish Shareholders’ Association (Aktiespararna). The members representing the three largest owners in the Nomination Committee together represented 26.6 per cent of the votes of Wihlborgs. Anders Silverbåge was appointed as chairman of the Nomination Committee. The Nomination Committee has held two minutes meetings and has remained in contact during the periods in between. The Nomination Committee has discussed the size and composition of the Board of Directors in respect of industry experience, expertise and other criteria. Nomi- nation Committee has also discussed the issue of the Directors’ independence. The election committee proposes a re-election of Kerstin Fredriksson, Anders Jarl, Sten K Johnson, Erik Paulsson, Tommy Qvarfort and Johan Qviberg. Sara Paulsson Karlsson and Helen Olausson are proposed as new Board Members.

The Board of Directors The task of the Board of Directors is to manage the company’s business on behalf of the owners in a way that assures the owners’ interest in strong long-term return on capital in the best possible way. Under Wihlborgs’ Articles of Association, the Board of Directors must consist of at least four and no more than eight Directors. Following the AGM in April 2006, Erik Paulsson was appointed as Chairman of the Board and Kerstin Fredriksson as Deputy Chairman. The company’s Finance Director, Christer Johansson, has served as the Board’s secretary. Wihlborgs’ Board of Directors includes members that have skills and experience in fields that enable them to support, monitor and control the business of a leading property company in Sweden. The Directors have in-depth knowledge of property, the property market, finance and business development. The Board of Directors meets the requirements for Board composition laid down in the Swedish Corporate Governance Code and the Listing Rules of the Stockholm

AUDITORS

Deloitte AB

Chief Auditor Torbjörn Svensson, Malmö, born 1953 Authorised Public Accountant Chief auditor of Wihlborgs since 2004. Previously chief auditor of Fabege since 2001.

Wihlborgs ANNUAL REPORT 2006 73 Stock Exchange. The Chief Executive Officer, Anders Jarl, is to be regarded as dependent on the company. In 2006, the Board held 13 meetings, including constituent and per capsulam meetings. Out of the 13 meetings, seven have been ordinary Board meetings. The board’s work began with issues concerning the annual accounts and dividend as well as an assessment of the board’s work and procedures. During the spring of 2006 the work concentrated on the Tornet, Ideon and GE Capital acquisitions as well as other property purchases and sales. Preparations associated with the board’s tasks prior to the annual general meeting concerned the proposals for a split and the re-purchase of own shares and new company formation. The process of costing finished projects for 2005 has been reviewed. Information security associated with the company’s IT procedures has been highlighted. The sale of Caroli City was dealt with during the summer. During the autumn, the company’s financial policy, interest review combined with different derivative products were commented on. The company’s future strategies prior to 2007 and 2008, budget and property acquisitions also dominated the board’s work. The board also established ethical guidelines for the company during the autumn. According to the annual general meeting’s decision, the board’s fee amounted to SEK 750,000 of which the chairman received SEK 200,000 and other board members, with the exception of the CEO, received SEK 110,000.

Directors, independent, number of meetings and attendance

Independent Board meetings/Attendance Erik Paulsson, Chairman no 13 of 13 Kerstin Fredriksson, Deputy Chairman yes 13 of 13 Anders Jarl no 13 of 13 Sten K Johnson yes 12 of 13 Tommy Qvarfort yes 9 av 9 (elected at the AGM) Johan Qviberg yes 12 of 13 Lars Sköld yes 13 of 13 Anders Elsell yes 4 of 4 (elected at the AGM) Bo Forsén yes 4 of 4 (elected at the AGM)

Rules of procedure and instructions The Board of Wihlborgs operates on the basis of a set of procedural rules, which include instructions relating to the division of labour and financial reports. The rules of procedure, which constitute a supplement to the regulations contained in the Swedish Companies Act and Wihlborgs’ Articles of Association, are reviewed annually. Under the rules, the Board is responsible for ensuring that the CEO meets his obligations. The CEO’s performance is assessed annually in relation to the defined long-term and short-term objectives. Another responsibility is to continuously assess Wihlborgs’ handling procedures and administrative guidelines and investments of the company’s assets. The Board is responsible for setting and monitoring compliance with targets, key policies and strategic plans for the company and for ensuring that these are revised and updated subsequent to receiving a report from the CEO. Six ordinary Board meetings should be held each calendar year, in addition to the constituent meeting. At the meetings the Directors transact business relating to financial and economic reports, sales and investments, current market issues and staff issues. Extraordinary meetings may be convened for the purpose of discussing

74 Wihlborgs ANNUAL REPORT 2006 and deciding on issues that cannot be postponed until the next ordinary Board meeting. Under the procedural rules, it is the duty of the Chairman to monitor Wihlborgs’ performance through contacts with the CEO and to ensure that the Directors receive the information they require via the CEO. The Chairman is also required to consult with the CEO on strategic issues and ensure that the matters under consideration are not handled in a way that violates the provisions of the Swedish Com- panies Act, the company’s Articles of Association or the Swedish Corporate Govern- ance Code.

Group management The Chief Executive Officer The Chief Executive Officer is responsible for the day-to-day management of the company and for managing the company’s activities in accordance with the guidelines and instructions laid down by the Board. The rules of procedure for Wihlborgs’ Board of Directors includes a set of instructions for the CEO, who is responsible for ensuring that the Board receives the information it requires for its decisions before each Board meeting and is kept up to date in between meetings, and that the financial statements are presented in a way that allows the Board to make a well-informed assessment of the information contained therein. There is also a separate reporting instruction specifying the timetables.

Group management consists of: Anders Jarl, CEO Christer Johansson, Finance Director Thomas Bråhagen, Property Director Iréne Johansson, Public Relations Director Catharina Lachmann, Executive Assistant to the CEO

Principles for terms of employment of the CEO and Group management Under the Corporate Governance Code, the Board is required to propose principles for the compensation and other employment terms of Group management. The Board of Wihlborgs proposes that the compensation and other terms of employment should be competitive and based on market terms. All members of Group management receive a fixed compensation. Wihlborgs has a profit-sharing foundation that covers all employees of the company except the CEO. Allocations to the foundation are based on return on equity and are subject to a ceiling of one base amount per year and employee. The retirement age is 65 years for all employees of Group management. Expenses relating to the Chief Executive Officer’s pension comprise a premium of 35 per cent of the CEO’s pensionable annual salary during his period of employment. For other members of Group management the ITP occupational pension plan or an equivalent plan applies. Termination salary and severance pay combined must not exceed 24 months. Severance pay should be offset by other income. All Board Directors except the CEO decide on the principles for compensation and terms of employment of Group management and on the CEO’s compensation and terms of employment. The principles have been unchanged since 2005.

Auditing Wihlborgs’ auditors are appointed by the AGM for a period of four years. The current auditors were appointed at an extraordinary general meeting in 2004, and the

Wihlborgs ANNUAL REPORT 2006 75 next appointment will therefore take place at the 2008 AGM. The AGM appointed the auditing firm Deloitte AB as the company’s auditors with Torbjörn Svensson as chief auditor. Torbjörn Svensson has chief responsibility for the audit assignment in Wihlborgs. He has no other assignments for companies that are closely related to Wihlborgs’ major owners or the CEO. In addition to his audit assignment for Wihlborgs, Torb- jörn Svensson’s other major audit assignments are: Malmö Aviation AB, Doro AB, Flex- tronics, Dynapac AB, Thule AB and Skånemejerier. Torbjörn Svensson personally attends the Board meeting convened for the purpose of the discussing the company’s year-end financial statements and submits a report on his final examination of the company’s accounts. He also submits information on ongoing auditing work to the Board in its capacity as audit committee. Information about fees paid to the auditors is provided in Note 1 on page 62.

Internal control According to the Companies Act and the Swedish code for company control, the board is responsible for internal control. The board shall issue a report annually of how the internal control of financial reporting is organised to the extent it concerns the financial reporting. The report is drawn up on the basis of the guidance produced by the Confederation of Swedish Enterprise and FAR SRS. This report does not form part of the formal annual accounts documentation and has not been the subject of checking by the company’s auditors. Wihlborgs applies COSO, Internal Control – Integrated Framework. This is an internationally recognised and widely-accepted framework for internal control used to describe the company’s control structure. COSO describes the control that is divided into five components – control environment, risk assessment, control activities, information and communication, and monitoring.

The control environment The control environment is of great significance to the organisation and forms the basis for good internal control. During the course of 2006 Wihlborgs introduced ethical guidelines for the board of directors and its staff that will form the basis of the company’s behaviour towards customers, suppliers and other interested parties. All employees have received training on these guidelines. The document has been issued to all employees and is available on the company’s intranet. In its rules of procedure the board has clarified decision delegation to the management for financial reporting. The organisational structure at Wihlborgs facili- tates effective internal control. The company’s organisation in its administrative areas with an administrative manager as its head has a defined responsibility with authorities. This is described in an instruction for signing lease agreements, authorisations and projects, and a number of policies. Group reporting for Wihlborgs’ approximately 100 subsidiaries is standardised. Internal auditing is reconciled with external auditing on each reporting occasion. According to Wihlborgs staff policy, employees who work on economic issues undergo individual training programmes to ensure competence within the area.

76 Wihlborgs ANNUAL REPORT 2006 Risk assessment Wihlborgs undertakes continuous risk assessment associated with financial reporting. A risk analysis shows that the internal control is particularly significant with regard to procedures for lease debiting including supplementary debiting, the purchase and sale of properties, both private and in companies, the IT function, property valuation, project activities and risks of impropriety.

Control activities Control activities are designed to create methods for the company when dealing with risks. The intention is that the activities shall prevent, identify and correct the errors that can arise. The activities shall secure income and assets, check the cor- rectness and reliability of the financial reports but also ensure that stipulated regulatory systems are complied with. Work was done in 2006 on describing different procedures. This refers primarily to the IT function, purchase and sales plus lease debiting.

Information and communication The way in which financial reporting is communicated is shown in the company’s instructions for reporting. Information to lenders, investors and suppliers is based on the respective interested party’s particular requirements. The stock exchange’s regulations for disseminating information and reporting are particularly important. The information department is responsible for external information. The company’s information policy includes describing how financial reporting shall be done. The board receives information on risks of errors in the financial reporting and the internal control from auditors in connection with the full-year accounts and interim audit.

Monitoring Continuous monitoring and evaluation are performed to guarantee the quality of the control system. Continuous monitoring is done on an area basis and any shortcomings that have arisen in the internal control are rectified. The audit submits its findings regarding the company’s internal control to the board at least twice a year.

Malmö, 21 March 2007 The Board of Directors

Wihlborgs ANNUAL REPORT 2006 77 Five-year summary

Proforma3 Proforma3 Proforma3 2006 2005 2004 2003 2002 Financial Return on equity, % 26,6 18,2 15,5 12,3 10,2 Return on total capital, % 12,5 10,1 8,5 7,0 6,8 Equity/assets ratio, % 32,7 34,8 29,6 26,5 23,8 Interest coverage ratio, times 6,6 5,0 3,5 2,5 1,9 Interest coverage ratio, operations, times 3,3 2,9 2,5 2,1 1,7 Leverage properties, % 59,2 55,6 66,8 71,3 74,9 Debt/equity ratio, times 1,8 1,5 2,1 2,5 2,9

Share-related1 Earnings per share before tax, SEK 27,69 17,03 12,06 8,31 6,15 Earnings per share, SEK 22,12 12,33 8,68 5,98 4,43 Operating earnings per share before tax, SEK 11,16 8,34 7,30 6,47 5,28 Operating earnings per share, SEK 8,04 6,01 5,25 4,66 3,80 Equity per share, SEK 92,3 73,96 60,14 51,46 45,48 Cash flow from operations before change in working capital per share, SEK 10,96 8,24 6,04 5,44 4,57 Dividend per share, SEK2 5,5 3,50 - - - No. of shares at year-end, ‘000 38,428 38,428 38,428 38,428 38,428 Average no. of shares, ‘000 38,428 38,125 38,428 38,428 38,428

Property-related No. of properties 219 197 190 190 190 Carrying amount of properties, SEKm 10,888 7,890 7,149 6,805 6,668 Yield, % 6,4 6,6 6,6 6,9 7,3 Lettable area, m2 1,159,852 994,693 963,331 963,331 963,331 Rental income, SEK/m2 851 761 736 730 722 Net operating income, SEK/m2 597 526 490 490 506 Financial occupancy rate, % 92 90 89 90 91 Surplus ratio, % 70 69 67 67 70

Employees No. of employees at year-end 77 68 71 71 71 Average no. of employees 78 71 71 71 71

1) There are no dilution effects of potential ordinary shares to be taken into account in calculating key ratios. 2) Proposed dividend. 3) Proforma figures for 2004, 2003 and 2002 are based on the property portfolio as at 31 March 2005.

DEFINITIONS

FINANCIAL SHARE-RELATED PROPERTY-RELATED Return on equity Earnings per share No. of properties Profit as a percentage of average share- Profit divided by average number of outstanding shares. Total number of properties owned by holders’ equity. Wihlborgs as at 31 December 2005. Earnings per share before tax Return on total capital Profit before tax divided by average number of outstanding Carrying amount of properties Profit before tax plus interest expenses as a shares. Carrying amount of the Group’s property percentage of average balance sheet total. portfolio at year-end. Operating earnings per share Equity/assets ratio Profit after financial items and reversal of gains/losses from Yield Shareholders’ equity as a percentage of the sale of properties and changes in value and 28 per cent Net operating income as a percentage of balance sheet total. tax, divided by average number of outstanding shares. the carrying amount of the properties at year-end. Interest coverage ratio Operating earnings per share before tax Profit after financial items and reversal of inte- Profit after financial items and reversal of gains/losses from Lettable area rest expenses, divided by interest expenses. the sale of properties and changes in value, divided by aver- Total area that is available to let. age number of outstanding shares. Interest coverage ratio, operations Rental income per square metre Profit after financial items and reversal of Cash flow from operations before change in working Annualised rental income divided by lettable interest expenses plus gain or loss from sales capital per share area. of properties and changes in value, divided by Cash flow from operations before change in working capital interest expenses. in relation to average number of shares. Net operating income per square metre Net operating income divided by lettable area. Leverage properties Equity per share Interest-bearing liabilities as a percentage of Shareholders’ equity at end of period in relation to total Financial occupancy rate the carrying amount of the properties. number of shares at year-end. Rental income as a percentage of rental value.

Debt/equity ratio Dividend per share Surplus ratio Interest-bearing liabilities divided by share- Refers to proposed dividend for the last financial year, Net operating income as a percentage of holders’ equity. to approved dividends for previous years. rental income.

78 Wihlborgs ANNUAL REPORT 2006 Articles of Association n Articles of Association of Wihlborgs Fastigheter AB (publ), Corporate identity number: 556367-0230.

§ 1 Registered name of the Company is Wihlborgs Fastigheter AB, which is a public company (publ). § 2 The object of the Company’s operations is to acquire, manage, develop and sell properties, primarily in the Öresund region, and conduct associated operations. § 3 The registered office of the Board of Directors shall be Malmö, Sweden. § 4 The Company’s share capital shall amount to not less than SEK 155,000,000 kronor and not more than SEK 620,000,000 kronor. § 5 The number of share shall not be less than 15,500,000 and not more than 62,000,000. § 6 The Board of Directors shall consist of not fewer than four and not more than eight members. § 7 Of the Company’s auditors, at least the auditor and the deputy auditor must be Authorised Public Accountants. Instead of an auditor, the Annual General Meeting may elect one or two authorised accounting firms, whereby no deputy auditors need to be elected. § 8 The Company’s fiscal year shall consist of the calendar year. § 9 The Annual General Meeting shall be held in Malmö. The following items of business shall be addressed at the Annual General Meeting: 1. Election of Chairman of the Meeting. 2. Preparation and approval of the list of shareholders entitled to vote at the meeting. 3. Election for one or two minute-checkers. 4. Approval of the agenda. 5. Determination of whether the Meeting has been duly convened. 6. Presentation of the annual report and the auditors’ report an, if applicable, of the consolidated financial accounts. 7. Motions concerning the adoption of the income statement and balance sheet and, if applicable, of the consolidated income statement and consolidated balance sheet. b) the disposition to be made of the Company’s profits or losses as shown in the balance sheet adopted by the Meeting. c) the discharge of the members of the Board and the Managing Director from personal liability. d) the record date for the payment of dividends. 8. Resolution of the number of members of the Board and, where applicable, the number of auditors and deputy auditors. 9. Determination of the fees to be paid to the Board members and, where applicable, the auditors. 10. Election of the Board members. 11. When required, election of the auditors and deputy auditors. 12. Election of the Nomination committee. 13. Other business that must be addressed by the Meeting in accordance with the Annual Accounts Act or the Articles of Association. continued on next page

Wihlborgs ANNUAL REPORT 2006 79

§ 10 Notice of a General Meeting of Shareholders shall be made in the form of an advertisement in the Official Gazette (Post- och Inrikes Tidningar) and in Svenska Dagbladet and in Sydsvenska Dagbladet or in another daily newspaper published in Skåne. If publication of Svenska Dagbladet ceases, notifica- tions will be effected through an announcement in the Swedish Official Gazette and Dagens Industri. Notice of the Annual General Meeting and of Extraordinariy General Meetings convened to address amendments to the Articles of Association shall be issued not earlier than six weeks and not later than four weeks prior to the Meeting. Notice of other General Meetings shall be issued not earlier than six weeks and not later than two weeks prior to the Meeting. § 11 To be entitled to participate in the business of a General Meeting, shareholders must be included in the share register confirming conditions five days prior to the Meeting and must notify the Company of their intention to attend the Meeting and be accompanied by a maximum of two assistants not later than 4 p.m. on the day stipulated in the Notice of a General Meeting. This day must not be a Sunday, a public holiday, a Saturday, Midsummer’s Eve, Christ- mas Eve or New Year’s Eve and must not be more than the five weekdays before the Meeting. § 12 The company’s shares will be recorded in a control register pursuant to the Swedish Financial Instruments Act (1998:1479).

80 Wihlborgs ANNUAL REPORT 2006 ”We will continue along the chosen path by acquiring and managing commercial properties that can be developed in our carefully-selected strategic areas”

Addresses

Malmö Helsingborg Denmark Wihlborgs Fastigheter AB Wihlborgs Fastigheter AB Wihlborgs A/S www.wihlborgs.se Box 97 Garnisonsgatan 25A Hørkær 20, st [email protected] SE-201 20 Malmö, Sweden SE-254 66 Helsingborg, Sweden DK-2730 Herlev, Denmark Board registered office: Malmö Visitors: S:t Johannesgatan 2 Telephone: +46 42 490 46 00 Telephone: +45 396 161 57 Corporate identity number: Telephone: +46 40 690 57 00 Fax: +46 42 490 46 01 Fax: +45 396 161 58 556367-0230 Fax: +46 40 690 57 01