THE NORDIC PROPERTY MARKETS July 2019

Very active June bringing H1 volume close to €20bn. Executive summary

MONTHLY TRANSACTION VOLUMES (JUNE 2019) Arrows show change compared to previous month

SWEDEN NORWAY DENMARK THE NORDICS

2.6EURbn 1.0EURbn 1.4EURbn 1.3EURbn 6.3EURbn

EXECUTIVE SUMMARY 2 NORDIC PROPERTY MARKET MONTHLY SUMMARY JUNE 2019

MACRO ECONOMY 3

NORDIC PROPERTY MARKETS 4 – Swedish property market 5 June – Norwegian property market 6

– Finnish property market 7 EUR 6.3bn – Danish property market 8 137 deals NORDIC CAPITAL MARKETS 9

– Real estate equities 10 NORWAY FINLAND – Equity issues and IPOs 11

– Preference shares 12 SWEDEN EUR 1.0bn EUR 1.4bn – Corporate bonds 13 34 deals 22 deals CONTACT DETAILS 14 EUR 2.6bn 47 deals This monthly research report on the Nordic property market is produced by Pangea Property Partners in close cooperation with our research partners in Finland and Denmark (see below). DENMARK © Pangea Property Partners

EUR 1.3bn 34 deals CONTACT Pangea Property Partners Nordic transaction volume (last 12M)

EURbn Number of deals NORDICS 8 160 Mikael Söderlundh

+46 73 770 77 90 6 120 [email protected]

SWEDEN 4 80 Christian Sahlström

+46 72 223 26 07 2 40 [email protected]

0 0 NORWAY Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Kristian Hoem Sw eden Norway Finland Denmark No. of deals +47 99 12 12 94 [email protected] Nordic top transactions (June 2019) Country Property/portfolio Buyer Seller Price (est.)

Research partners Finland Merger of Jumbo and Flamingo Elo and Varma Elo and Varma EUR 0.6bn

Sweden Logistics and warehouse portfolio Blackstone Corem SEK 4.2bn FINLAND Johan Fager, Mrec Denmark Residential portfolio in Ørestad AXA IM Solstra Capital Partners DKK 1.3bn

+35 40 777 29 29 [email protected] Nordic capital markets (June 2019) DENMARK Jakob Dalhoff, Lokalebasen.dk MAJOR EVENTS Listing of Swedish residential property companies John Mattson and K2A

+45 26 16 44 86 TOP PERFORMING PREX INDICES PREX Residential (+6.5%) and PREX Warehouse (+4.5%) [email protected]

TOP PERFORMING PROPERTY SHARES Catena (+15%), Heba (+13%) and Corem (+12%)

Source: Pangea Research, Mrec, Lokalebasen

2 Macro economy

REAL GDP 2019F* Arrows show change compared to previous forecasts (bi-annual)

EUROZONE NORDICS SWEDEN NORWAY FINLAND DENMARK 1.3% 1.7% 1.4% 2.0% 1.9% 1.7%

*Source: IMF (April 2019), Consensus forecast (NIER), Statistics Norway

EUROPEAN OUTLOOK

GOVERNMENT BONDS (10Y) REAL GDP FORECASTS (Y/Y)

8% 2019F 2020F 2021F 7% Sweden 1.4% 1.7% 1.6% Jun-19 Jun-18 Norway 2.0% 3.1% 2.2% 6% Finland 1.9% 1.7% 1.4%

5% Denmark 1.7% 1.8% 1.6% Nordics 1.7% 2.1% 1.7% 4% Ireland 4.1% 3.4% 3.1%

3% Spain 2.1% 1.9% 1.7% UK 1.2% 1.4% 1.5% 2% Germany 0.8% 1.4% 1.5% France 1.3% 1.4% 1.5% 1% Italy 0.1% 0.9% 0.7% 0% Greece 2.4% 2.2% 1.6% UK

Italy Russia 1.6% 1.7% 1.7% Spain Russia France Ireland Greece Finland Norway Sw eden Eurozone 1.3% 1.5% 1.5% Denmark Germany Source: Reuters Source: IMF (April 2019), Consensus forecast (NIER), Statistics Norway

NORDIC OVERVIEW AND OUTLOOK

INTEREST RATES (10Y SWAP RATES) INFLATION (CPI) Jun 2019 2020 2. 5% 4. 0% 2019 forecast forecast Interest rate (10Y swap) 0.5% n/a n/a 3. 5% Inflation (CPI) 2.2% 1.9% 1.7% 2. 0% 3. 0% Exchange rate (EUR/SEK) 10.56 10.90 10.20

2. 5% Unemployment (%) 6.8% 6.3% 6.3% 1. 5%

2. 0%

1. 0% Interest rate (10Y swap) 1.8% n/a n/a 1. 5% Inflation (CPI) 2.5% 2.7% 2.0% 1. 0% 0. 5% Exchange rate (EUR/NOK) 9.69 9.30 8.90 0. 5% Unemployment (%) 3.2% 3.7% 3.6%

0. 0% 0. 0% Jun-1 8 Se p-1 8 Dec-18 Mar-19 Jun -19 Jun -18 Se p-1 8 Dec-18 Mar-19 Jun-1 9 Interest rate (10Y swap) 0.2% n/a n/a Sw eden Norway Sw eden Norway Inflation (CPI) 1.2% 1.3% 1.5% Finland Denmark Finland Denmark Exchange rate (EUR/USD) 1.14 1.13 1.18 CURRENCIES (FX-RATES) UNEMPLOYMENT Unemployment (%) 6.6% 6.4% 6.0%

11 .0 8. 0%

7. 0% Interest rate (10Y swap) 0.3% n/a n/a 10 .0 Inflation (CPI) 0.7% 1.1% 1.6%

6. 0% Exchange rate (EUR/DKK) 7.46 7.46 7.46 9. 0 Unemployment (%) 3.7% 4.5% 4.2% 5. 0%

8. 0 4. 0% The eight consecutive month with falling 7. 0 3. 0% Nordic 10Y swap rates (-17 bps on average in June) 6. 0 2. 0% Generally falling Nordic inflation in June: Jun-1 8 Sep-18 Dec-18 Mar-19 Jun-1 9 Jun-1 8 Se p-1 8 Dec-18 Mar-19 Jun -19 Norway (-37 bps), Finland (-29 bps), EUR/SEK USD/SEK Sw eden Norway Denmark (-29 bps) and Sweden (+2 bps) EUR/NOK USD/NOK Finland Denmark EUR/DKK USD/DKK Source: Historical figures are from Thomson Reuters and forecasts from SEB, May 2019. Historical figures refer to end of month.

3 Property market Nordics

TRANSACTION VOLUMES (LAST 12M) Arrows show change compared to last month

SWEDEN NORWAY FINLAND DENMARK THE NORDICS

16.3EURbn 9.0EURbn 9.0EURbn 7.2EURbn 41.5EURbn

TRANSACTION ACTIVITY

NORDIC TRANSACTION VOLUMES (EURbn) NORDIC TRANSACTION VOLUMES (EURbn, TRAILING 12M)

45 18 40 16 35 14 30 12 25 10 20 8 15 6 10 4 5 2 0 0 Jun-18 Aug-18 Oct-18 Dec-18 Feb-19 Apr-19 Jun-19

Sweden Norw ay Finland Denmark Sweden Norw ay Finland Denmark Forecast

OFFICE PRIME YIELDS (%) OFFICE PRIME RENTS (EUR/SQM/YEAR)

7.0% 800

6.5% 700 6.0% 600 5.5% 500 5.0% 400 4.5% 300 4.0% 3.5% 200 3.0% 100

Sweden Norw ay Finland Denmark Stockholm Oslo Copenhagen

TOP 10 NORDIC TRANSACTIONS (LAST 12M)

# Date Buyer Seller Property/portfolio Country Price (est.) Nordic transaction volume 1 1 Sep-18 Vonovia Starwood, etc. Victoria Park SE SEK ~17.1bn by country (last 12M)

2 Oct-18 Kildare Partners Shareholders Technopolis FI, SE, NO EUR ~1.6bn2 Denmark 3 Jun-18 Danica SEB SEB Pension DK DKK 6.2bn3 17%

4 Jun-19 Elo and Varma Elo and Varma Merger of Jumbo and Flamingo FI EUR 0.6bn Sweden 39% 5 Oct-18 Morgan Stanley Wereldhave Itis shopping centre FI EUR 0.5bn Finland 22% 6 Jan-19 Lilium Castellum Portfolio swap SE SEK 5.2bn

Norway 7 Apr-19 DNB Liv SBB i Norden DNB Bank’s HQ NO NOK 4.5bn 22%

8 Dec-18 Victoria Park Akelius Residential portfolio SE SEK 4.7bn Nordic transaction volume of EUR 41.5bn in last 12 m 9 Jun-19 Blackstone Corem Logistics and warehouse portfolio SE SEK 4.2bn 7 out of the 10 largest Nordic deals last 12m are cross-border 10 Feb-19 Allianz/CBRE GIP NRP Logistics portfolio SE, DK SEK 4.0bn

1Property value Q2-report for entire company. 2Property value Q3-report for entire company. 3Real estate included in company takeover. Source: Pangea Research, Mrec, Lokalebasen.dk. 4Property value Q3-report for entire company. Based on transactions above EUR 5m

4 Property market Sweden

MONTHLY TRANSACTION DATA (JUNE 2019) YEARLY TRANSACTION DATA (JUNE 2019) CROSS BORDER DEALS (LAST 12M)

NO. OF TRANSACTIONS MONTHLY VOLUME 2019H1 LAST 12M FOREIGN BUYERS FOREIGN SELLERS

47DEALS 26.7SEKbn 87.0SEKbn 170SEKbn 22% 15%

Arrows show change compared to last month. H1 arrow show change compared to same period last year.

TRANSACTION ACTIVITY

MONTHLY VOLUMES (SEKbn) VOLUME BY REGION (LAST 12M)

35 >10 SEKbn

30 5–10 SEKbn

25 1–5 SEKbn

20 <1 SEKbn

15

10 TOP 10 LOCATIONS (%)

5 1. Stockholm 39% 2. Västra Götaland 14% 0 Jan Feb Mar Apr May Jun Jul Aug Se p Oct Nov Dec 3. Skåne 12%

2018 2019 4. Östergötland 5% 5. Uppsala 4% VOLUME BY INVESTOR CATEGORY (LAST 12M) 6. Jönköping 3% DIVESTMENTS ACQUISITIONS 7. Södermanland 3% STOCKHOLM 8. Västernorrland 3% Private companies 9. Örebro 3% GOTHENBURG 10. Gävleborg 2% Listed companies

Property funds

Institutions MALMÖ

Public sector Source: Pangea Research All charts based on deals with a property value above SEK 50m.

Other investors Half-year volume of SEK 87.0bn, 11% up compared to 2018H1 and the second highest volume ever for the period -40% -30% -20% -10% 0% 10 % 20% 30% 40% Several large transactions in June with the largest being Sw edish inve stors Foreign investors Blackstone acquiring a logistics and warehouse portfolio from Corem (SEK 4.2bn)

TRANSACTION AND RENTAL MARKET PRICING

PRIME OFFICE YIELDS IN STOCKHOLM AND 10Y SWAP RATE OFFICE RENTS IN STOCKHOLM (AVERAGE BASE RENTS, SEK/SQM)

8% 8, 500 8, 000 7% 7, 500

6% 7, 000 6, 500 5% 6, 000

4% 5, 500 5, 000 3% 4, 500

2% 4, 000 3, 500 1% 3, 000

0% 2, 500 2006 2007 20 08 2009 2010 2011 2012 20 13 2014 2015 2016 20 17 20 18 2019 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 10Y Sw ap rate Prime office yield Stockholm - CBD Prime Stockh olm - Average Source: Pangea Research Source: Strateg Analys

5 Property market Norway

MONTHLY TRANSACTION DATA (JUNE 2019) YEARLY TRANSACTION DATA (JUNE 2019) CROSS BORDER DEALS (LAST 12M)

NO. OF TRANSACTIONS MONTHLY VOLUME 2019H1 LAST 12M FOREIGN BUYERS FOREIGN SELLERS

34DEALS 9.9NOKbn 39.0NOKbn 87NOKbn 21% 19%

Arrows show change compared to last month. H1 arrow show change compared to same period last year.

TRANSACTION ACTIVITY

MONTHLY VOLUMES (NOKBN) VOLUME BY REGION (LAST 12M)

16 >10 NOKbn 14 5-10 NOKbn 12 1-5 NOKbn 10

8 <1 NOKbn

6

4 TOP 10 LOCATIONS (%)

2 1. Oslo 40% 2. Akershus 19% 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 3. Rogaland 13% 2018 2019 4. Hordaland 7%

5. Trøndelag 4% TRONDHEIM

VOLUME BY INVESTOR CATEGORY (LAST 12M) 6. Buskerud 3%

DIVESTMENTS ACQUISITIONS 7. Vestfold 3% 8. Oppland 3% Private companies 9. Østfold 3% BERGEN 10. Vest-Agder 1% OSLO Listed companies

Funds/Syndicates STAVANGER

Institutions

Source: Pangea Research Other investors All charts based on deals with a property value above NOK 50m.

Unknown Half-year volume reaching NOK 39.0bn, down 17% compared to 2018H1 but in line with the average in recent years -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% The largest transaction in June was DNB Scandinavian Property Foreign investors Foreign investors Fund acquiring Vitaminveien 4, a 24,000 sqm office building, from Skanska (NOK 1,325m)

TRANSACTION AND RENTAL MARKET PRICING

OFFICE YIELDS IN OSLO AND 10Y SWAP RATE OFFICE RENTS IN OSLO (AVERAGE BASE RENTS, NOK/SQM)

8% 5,000

7% 4,500

6% 4,000

5% 3,500

4% 3,000

3% 2,500

2% 2,000

1% 1,500

0% 1,000 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q1-19 10Y swap Oslo office yields Average - Oslo Top 15 % - Oslo CBD Top 50-85 % - Oslo CBD Source: Pangea Research Source: Arealstatistikk

6 Property market Finland

MONTHLY TRANSACTION DATA (JUNE 2019) YEARLY TRANSACTION DATA (JUNE 2019) CROSS BORDER DEALS (LAST 12M)

NO. OF TRANSACTIONS MONTHLY VOLUME 2019H1 LAST 12M FOREIGN BUYERS FOREIGN SELLERS

22DEALS 1.4EURbn 3.7EURbn 9.0EURbn 58% 27%

Arrows show change compared to last month. H1 arrow show change compared to same period last year.

TRANSACTION ACTIVITY

MONTHLY VOLUMES (EURM) VOLUME BY REGION (LAST 12M)

2,200 >1000 EURm 2,000 1,800 150–1000 EURm 1,600 1,400 50–150 EURm 1,200 <50 EURm 1,000 800 Northern 600 TOP 10 LOCATIONS (%) 400 1. HMA 66% 200 OULU 0 2. Turku 6% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 3. Oulu 5% 2018 2019 4. 5% 5. Southern, other 5% Western VOLUME BY INVESTOR CATEGORY (LAST 12M) 6. Western, other 4% JYVÄSKYLÄ DIVESTMENTS ACQUISITIONS 7. Jyväskylä 3% Eastern 8. Eastern 3% TAMPERE Private companies 9. Helsinki Region 2% 10. Northern 2% Southern, other Listed companies TURKU HELSINKI REGION (EXCL. HMA) Property funds HMA*

Source: Mrec Institutions * HMA (Helsinki Metropolitan Area) includes Helsinki, and All charts based on deals with a property value above EUR 5m

Public sector Half-year volume reaching EUR 3.7bn, down 10% compared to Other investors 2018H1 The largest deal in June was an arrangement where the pension insurers, Varma and Elo, merged the shopping centers -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% Jumbo and Flamingo to a joint asset owned 50/50 (combined Finnish investors Foreign investors value ~EUR 600m)

TRANSACTION AND RENTAL MARKET PRICING

OFFICE YIELDS IN HELSINKI AND 10Y SWAP RATE OFFICE RENTS IN HELSINKI (AVERAGE BASE RENTS, EUR/SQM)

10 % 450

9 % 400 8 %

7 % 350 6 %

5 % 300

4 % 250 3 %

2 % 200 1 %

0 % 150 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 10Y swap Helsinki office yields CBD Average

Source: Mrec

7 Property market Denmark

MONTHLY TRANSACTION DATA (JUNE 2019) YEARLY TRANSACTION DATA (JUNE 2019) CROSS BORDER DEALS (LAST 12M)

NO. OF TRANSACTIONS MONTHLY VOLUME 2019H1 LAST 12M FOREIGN BUYERS FOREIGN SELLERS

34DEALS 9.8DKKbn 27.0DKKbn 53.8DKKbn 49% 36%

Arrows show change compared to last month. H1 arrow show change compared to same period last year.

TRANSACTION ACTIVITY

MONTHLY VOLUMES (DKKbn) VOLUME BY REGION (LAST 12M)

20 >10 DKKbn 18 AALBORG 16 5–10 DKKbn

14 1–5 DKKbn 12 <1 DKKbn 10

8

6

4 AARHUS COPENHAGEN 2

0 Jan Feb Mar Apr May Jun Jul Aug Se p Oct Nov Dec

20 18 20 19

VOLUME BY INVESTOR CATEGORY (LAST 12M)

DIVESTMENTS ACQUISITIONS TOP 5 LOCATIONS (%)

Private companies 1. Hovedstaden 52% 2. Midtjylland 21% Listed companies 3. Syddanmark 15% 4. Sjælland 8% Property funds 5. Nordjylland 4%

Institutions Source: Pangea Research All charts based on deals with a property value above DKK 50m.

Public sector Half-year volume summing to DKK 27.0bn, down 37% compared Other investors to 2018H1 but historically a fairly active half-year The largest transaction in June was AXA IM acquiring four -50% -40% -30% -20% -10% 0% 10% 20 % 30% 40 % residential properties in Copenhagen from Solstra Capital Partners (DKK 1.3bn) Danish investors Foreign investors

TRANSACTION AND RENTAL MARKET PRICING

OFFICE YIELDS IN COPENHAGEN AND 10Y SWAP RATE OFFICE RENTS COPENHAGEN (AVERAGE BASE RENTS, DKK/SQM)

9% 2, 30 0

8% 2, 10 0 7% 1, 90 0 6% 1, 70 0 5% 1, 50 0 4% 1, 30 0 3%

2% 1, 10 0

1% 90 0

0% 70 0 2010 2011 20 12 20 13 2014 2015 20 16 2017 2018 20 19 2007 2008 20 09 20 10 2011 2012 20 13 20 14 2015 2016 20 17 20 18 2019 10Y swap Cope nhagen office yields CBD - Prime Cope nhagen - Ave rage Source: Pangea Research Source: Lokalebasen.dk

8 Nordic capital markets

GLOBAL EQUITY MARKETS (JUNE 2019) NORDIC EQUITY MARKETS (JUNE 2019) NORDIC PROPERTY SECTOR (JUNE 2019)

ALL-SHARES PROPERTY SHARES PREX PROPERTY PREX CONSTRUCTION NO OF COMPANIES TOTAL MARKET CAP

+5.7% +0.4% +2.0% +6.1% 34 57EURbn

Arrows show change compared to previous month

GLOBAL OUTLOOK

GLOBAL EQUITY MARKET PERFORMANCE GLOBAL VOLATILITY INDICES GLOBAL LISTED REAL ESTATE MARKET CAP BY SEGMENT 12 % 40

Retail 20.3% 8% 35 Diversified 21.7% Office 14.8% 4% 30 Residential 17.5% Industrial 15.3% 0% 25 Healthcare 8.1%

-4% 20 Hotel 1.3% Other 1.0% -8% 15 Source: Global Property Research Chart based on listed market cap as of June 2019 -12% 10

-16% 5 Increasing global equities (+5.7%) and Jun-1 8 Se p-1 8 Dec-18 Mar-19 Jun-1 9 Jun -18 Sep-18 Dec-18 Mar-19 Jun -19 property shares (+2.0%) in June Property shares index All-share index VSTOXX (Europe) VIX (US) Overall equity market now closing the gap to property shares (2% spread VSTOXX and VIX volatility index measures 30 days expected equity market volatility on EURO STOXX 50 and S&P 500, respectively. over 12 months)

NORDIC PROPERTY SECTOR OVERVIEW

NORDIC EQUITY MARKET PERFORMANCE NORDIC EQUITY MARKET TURNOVER (EURm) PROPERTY COMPANIES BY MCAP (EURM)*

35% 3, 00 0 Balder Castellum 30% Fabege 2, 50 0 Hufvudstaden 25% Kojamo Sa ga x 20% 2, 00 0 Wallenstam Pandox 15% Entra Atriu m Ljun gberg 10% 1, 50 0 Wihlborgs Klövern 5% Citycon 1, 00 0 0% Hemfosa Kungsle den -5% Olav Thon 50 0 Jeudan -10% Hembla Fast Partner -15% 0 Catena Jun -18 Se p-1 8 Dec-18 Mar-19 Jun-1 9 Jun -18 Se p-1 8 Dec-18 Mar-19 Jun-1 9 Platzer Nyfosa PREX Property PREX Development PREX Property PREX Construction Diös PREX Construction Nordic All-share Corem Norwe gia n Property Heba NP3 John Mattson NORDIC PROPERTY SECTOR VALUATION (P/BOOK) MARKET CAP SPLIT BY COUNTRY* Stendörren Nordic property sector market cap: EUR 57bn Hoivatilat 1. 40 x Brinova K2A Denmark BoStad Finland 3% Nordicom 1. 30 x 9% 0 1, 000 2, 000 3, 00 0 4, 00 0 5, 000 6, 000

Norway Sw eden Norway Finland Denmark 1. 20 x 8%

1. 10 x Strong positive performance for PREX Property (+2.0%) and especially PREX 1. 00 x Construction (+6.1%) in June PREX Property increasing 27% over last Sweden 12M, while overall equity market plus 0. 90 x 80% 5% Jun -18 Se p-1 8 Dec-18 Mar-19 Jun-1 9 Chart based on latest fiscal interim reports (unadjusted NAVs) and Source: Pangea Research, Reuters current market capitalization figures * The graphs shows end-of-month figures

9 Real estate equities

COUNTRY WISE PERFORMANCE (JUNE 2019) SECTOR WISE PERFORMANCE (JUNE 2019)

PREX SWEDEN PREX NORWAY PREX FINLAND PREX OFFICE PREX RETAIL PREX WAREHOUSE +1.6% +0.4% +7.3% +0.7% +0.6% +4.5%

Arrows show change compared to previous month

NORDIC LISTED PROPERTY COMPANY KEY FIGURES

COMPANY MAIN USE SHARE PRICE MCAP 12M TURNOVER SWEDEN Last 1M 12M SEKm SEKm % Pangea Real Estate Index (PREX) Atrium Ljungberg Retail 167.8 1.6% 16.0% 22,354 2,987 13.4% PREX is a group of Nordic real estate indices provided by Balder Mixed 311.0 1.8% 33.0% 55,980 19,714 35.2% Pangea Research. PREX includes all listed property, Besqab Development 122.0 27.3% 19.6% 1,893 154 8.1% construction and development companies in the Nordic region Bonava Development 116.6 -2.8% 10.9% 12,642 4,067 32.2% and is divided into multiple sub-indices measuring country wise Brinova Mixed 21.9 1.4% 47.5% 1,584 151 9.5% as well as sector wise performance. All indices are market value Castellum Mixed 177.6 -0.8% 22.3% 48,507 30,576 63.0% weighted and presented excluding dividends in this market Catena Warehouse 292.0 15.0% 67.0% 11,008 2,781 25.3% report. Corem Warehouse 16.5 12.3% 76.9% 7,466 20 0.3% For complete index rules: www.pangeapartners.co.uk/research Diös Mixed 68.7 0.3% 27.8% 9,241 3,613 39.1% Fabege Office 139.8 -0.9% 30.8% 46,227 20,872 45.2% FastPartner Mixed 75.0 1.1% 54.7% 14,304 393 2.7% Heba Residential 84.0 13.1% 53.4% 6,935 198 2.9% PREX COUNTRY: NORDIC PROPERTY SECTOR PERFORMANCE BY COUNTRY

Hembla Residential 181.0 4.4% 24.7% 15,690 2,913 18.6% 40% Hemfosa Public sector 87.8 0.9% 42.0% 16,786 12,540 74.7%

Hufvudstaden Office 157.9 1.2% 23.1% 37,928 10,021 26.4% 30% JM Development 213.5 10.6% 33.4% 14,856 25,570 172.1%

John Mattson Residential 114.0 n.a. n.a. 3,838 n.a. n.a. 20% K2A Residential 87.0 n.a. n.a. 1,308 n.a. n.a.

Klövern Office 14.6 3.2% 46.9% 18,941 4,496 23.7% 10% Kungsleden Mixed 76.6 4.9% 23.9% 16,730 7,002 41.9%

Magnolia Bostad Development 31.8 5.3% -50.3% 1,203 264 22.0% 0% NP3 Mixed 80.6 3.5% 46.1% 4,380 439 10.0% NCC Construction 161.0 8.6% 8.1% 17,447 18,313 105.0% -10% Nyfosa Mixed 58.3 -3.7% n.a. 9,770 n.a. n.a. Oscar Properties Development 7.0 -14.9% -71.8% 419 142 33.9% -20% Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Pandox Hotel 171.0 4.7% 12.4% 28,643 3,265 11.4% PREX Sweden PREX Norway PREX Finland Peab Construction 79.4 4.4% 17.3% 23,492 8,633 36.7% PREX Denmark PREX Nordics Platzer Office 86.0 6.4% 47.0% 10,462 1,406 13.4% Sagax Warehouse 87.5 -1.1% 57.7% 32,460 1,763 5.4% PREX SECTOR: NORDIC PROPERTY SECTOR PERFORMANCE BY SECTOR SSM Development 9.1 1.3% -43.9% 357 18 5.0% Stendörren Warehouse 118.0 0.0% 37.2% 3,027 1,045 34.5% 80%

Serneke Construction 55.0 22.5% -40.2% 984 511 51.9% 70% Skanska Construction 167.7 7.1% 3.0% 70,416 51,800 73.6% 60% Wallenstam Residential 98.2 2.3% 21.9% 32,406 4,820 14.9% Wihlborgs Office 134.6 -1.6% 29.9% 20,690 6,272 30.3% 50%

NORWAY Last 1M 12M NOKm NOKm % 40% AF Gruppen Construction 168.0 5.0% 27.8% 16,634 1,022 6.1% 30% Entra Office 131.0 0.5% 17.8% 23,859 8,736 36.6% Norwegian Property Office 11.9 4.4% 10.2% 6,527 459 7.0% 20%

Olav Thon Eiend. Retail 144.0 -1.4% -3.6% 15,328 1,109 7.2% 10% Selvaag Bolig Development 44.0 2.8% 5.3% 4,126 772 18.7% 0% Solon Eiendom Development 37.5 -0.3% 23.8% 2,620 629 24.0% Veidekke Construction 82.8 -3.4% 1.1% 11,071 3,492 31.5% -10% Jun-1 8 Sep-1 8 Dec-18 Mar-19 Jun-19 FINLAND Last 1M 12M EURm EURm % PREX Office PREX Retail PREX Residential Citycon Retail 9.2 1.4% -1.2% 1,630 352 21.6% PREX Warehouse PREX Mixed Hoivatilat Public sector 10.0 4.6% 30.7% 253 78 30.7% Kojamo Residential 13.1 10.8% 43.4% 3,243 256 7.9% YIT Construction 5.4 11.3% 6.0% 1,142 812 71.1% The best sector indices in June were PREX Residential (+6.5%) DENMARK Last 1M 12M DKKm DKKm % and PREX Warehouse (+4.5%) BoStad Residential 2.2 8.8% 29.1% 302 24 7.8% The best performing individual property shares in June were Jeudan Office 1030.0 1.0% 4.5% 11,419 207 1.8% Catena (+15%), Heba (+13%) and Corem (+12%) Nordicom Mixed 5.7 -4.2% -17.4% 69 8 11.3%

The above table shows end-of-month figures with prices stated in local currencies Source: Pangea Research, Reuters

10 Equity issues (ordinary shares) and IPOs

NORDIC PROPERTY EQUITY ISSUES AND IPOS (LAST 12M)* LAST PROPERTY EQUITY ISSUE*

NO. OF EQUITY ISSUES NO. OF IPOs NEW EQUITY COMPANY DATE VOLUME

2 4 1.3EURbn Sagax May-19 200SEKm

Arrows show change compared to previous month * Among Nordic listed property companies, main list

LISTED PROPERTY SECTOR EQUITY ISSUES (ORDINARY SHARES)

COMPANY COUNTRY DATE TYPE OF ISSUE NEW EQUITY LAST PROPERTY EQUITY ISSUES (EURM)

M-Y LOCm 40 Sagax SWE May-19 Direct issue 200

Sagax SWE Oct-18 Direct issue 165 35

Hemfosa SWE Jun-18 Direct issue 1,085 30 Sagax SWE Jun-18 Direct issue 302

Sagax SWE Jun-18 Direct issue 656 25 Hembla SWE Mar-17 Direct issue 1,013

Catena SWE Dec-17 Direct issue 250 20 Sagax

Sagax Pandox SWE Dec-17 Direct issue 1,480 15 SSM SWE Apr-17 Public issue 540

10 No major equity issues in June

Sagax completed a directed share issue of SEK 200m in May 5 New market cap of EUR 1.3bn added over last 12M through IPOs and ordinary equity issues in the Nordic real estate sector (main list) 0 Jun-18 Aug-18 Oct-18 Dec-18 Feb-19 Apr-19 Jun-19 Comment: Main list only, excluding construction companies

PROPERTY RELATED IPOS

COMPANY COUNTRY DATE LISTING MCAP AT IPO LAST PROPERTY IPOS (MCAP, EURM)

M-Y LOCm 2, 600 K2A SWE Jun-19 Main list, mid cap 1,219 Kojamo 2, 400 John Mattson SWE Jun-19 Main list, mid cap 3,401 2, 200 Nyfosa2 SWE Nov-18 Main list, large cap 7,212 2, 000 Brinova SWE Sep-18 Main list, small cap 1,280 Pandox 1, 800 Magnolia Bostad SWE Jun-18 Main list, mid cap 2,421 1, 600 Entra Kojamo FIN Jun-18 Main list, large cap 2,410 1, 400 Bonava Stendörren SWE Apr-18 Main list, mid cap 2,254 1, 200 SSM SWE Apr-17 Main list, mid cap 1,760 1, 000 Bonava1 SWE Jun-16 Main list, large cap 11,560 800 Hemfosa Nyfosa Pandox SWE Jun-15 Main list, large cap 16,070 600 Hembla 1Spin-off from NCC. 2Spin-off from Hemfosa. 400 John Mattson Magnolia Bostad SSM NP3 Stendörren 200 Besqab Brinova K2A Swedish residential companies John Mattson and K2A were both Oscar Properties listed on Nasdaq Stockholm (Mid Cap) in June 0 Swedish residential property company Victoria Park was delisted from 2013 2014 2015 2016 2017 2018 Nasdaq Stockholm in June following Vonovia’s takeover

Swedish property company Nyfosa (spin-off from Hemfosa) was listed on Nasdaq Stockholm (Large Cap) on November 23, 2018

Comment: Main list only Source: Pangea Research, Reuters

11 Preference shares

NORDIC PROPERTY PREFERENCE SHARES (JUNE)* LAST PREFERENCE SHARE ISSUE

NO. OF PREFERENCE SHARES AVERAGE DIVIDEND YIELD MONTHLY TURNOVER COMPANY VOLUME DIVIDEND YIELD

7 5.8% 0.6SEKbn Aros Bostad 45SEKm 7.9%

Arrows show change compared to previous month *Among Nordic listed property companies, main list

LISTED PROPERTY SECTOR PREFERENCE SHARES

LAST PREFERENCE SHARE ISSUES (SEKM) DIVIDEND, PRICE, YIELD, TURNOVER, MCAP, MCAP PREF/ Company ANNUAL LAST ANNUAL MONTHLY CURRENT TOTAL MCAP 450 Sweden SEK SEK % SEKm SEKm % Aros Bostad

400 Sagax Pref 2.0 36.8 5.4% 15 618 1.9%

350 Corem Pref 20.0 338.0 5.9% 74 1,217 16.3% NP3 300 NP3 Klövern Pref 20.0 339.0 5.9% 149 5,575 29.4%

250 FastPartner Pref 20.0 375.0 5.3% 6 712 5.0%

200 Alm Equity Victoria Park Pref 20.0 299.0 6.7% 9 309 100.0%

150 Hemfosa Pref 10.0 188.0 5.3% 36 2,068 12.3% NP3 K2A 100 Akelius Pref* 20.0 349.0 5.7% 141 6,574 100.0% Aros Bostad 50 NP3 Pref 2.0 34.3 5.7% 266 852 19.5% SBB i Norden 0 *Listed on First North Jun-17 Oct-17 Feb-18 Jun-18 Oct-18 Feb-19 Jun-19 Note: Preference shares listed on First North with MCap below SEK 1bn not included

SHARE PRICE PERFORMANCE DIVIDEND YIELDS

10 % 7. 0%

5% 6. 5%

0%

6. 0%

-5%

5. 5% -10%

-15% 5. 0% Jun-18 Aug-18 Oct-18 Dec-18 Feb-19 Apr-19 Jun-19 Jun-18 Aug-18 Oct-18 Dec-18 Feb-19 Apr-19 Jun-19

Sagax Pref Corem Pref Klövern Pref Sagax Pref Corem Pref Klövern Pref FastPartner Pref Victoria Park Pref Hemfosa Pref FastPartner Pref Victoria Park Pref Hemfosa Pref Akelius Pref NP3 Pref PREX Pref Akelius Pref NP3 Pref

Victoria Park’s preference shares will be delisted from Nasdaq Stockholm on July 4 following Vonovia’s takeover

NP3 Fastigheter completed their third preference share issue (SEK 102m) in May

Property-related preference shares trading at a 5.8% implied dividend yield on average at the end of June

PREX PREF includes all listed property related preference shares (excl. First North) Source: Pangea Research, Reuters

12 Corporate bonds

NORDIC PROPERTY BONDS LAST PROPERTY BOND ISSUE

NO. OF NEW BONDS (JUN.) AVERAGE YIELD (TABLE BELOW) NEW VOLYME (LAST 12M) COMPANY VOLUME FLOATING INTEREST RATE STIBOR 3m + 7 2.1% 6.6EURbn Heimstaden 250SEKm 3.25% Arrows show change compared to previous month

SELECTED LISTED PROPERTY SECTOR CORPORATE BONDS

1 2 Company ID COUPON ISSUE MATURITY YIELD VOLUME SECURED

SWEDEN TYPE DATE YEARS LAST EURm YES/NO SELECTED CORPORATE BOND ISSUES (EURM) Akelius AK1 FIX Sep/15 1.2 0.0% 300 No Sagax Castellum SBB Akelius AK2 FIX Nov/17 4.7 0.8% 500 No 250500 Atrium Ljungberg AL1 FRN Mar/17 2.7 0.9% 104 No Sagax Atrium Ljungberg AL2 FIX Mar/17 2.7 0.9% 19 No Balder BA1 FIX Mar/17 2.7 0.4% 500 No 200 Heimstaden Willhem Balder BA2 FIX Sep/17 6.6 1.4% 500 No Corem CO1 FRN May/16 0.4 3.3% 28 No 150 Jernhusen Akad. Hus Corem CO2 FRN Mar/18 1.7 3.0% 81 No Hemfosa Fabege FA1 FRN Feb/17 0.2 0.7% 28 No Akelius SBB Akelius Klövern FastPartner FP1 FRN Sep/16 1.2 0.6% 57 No 100 Balder Hemfosa HF1 FRN Mar/17 1.2 2.2% 71 No Willhem SFF Klövern Klövern KÖ1 FRN Apr/18 2.8 3.8% 237 No SFF Klövern Fastpart. Wallenstam SBB 50 SBB Klövern KÖ2 FRN Nov/17 2.4 2.1% 81 No Fastator Klövern Fastator M2 Klövern KÖ3 FRN Jan/18 1.7 3.1% 142 No Nivika Jernhusen Kungsleden KL1 FRN Mar/18 2.7 1.0% 118 No 0 Kungsleden KL2 FIX Mar/18 2.7 1.1% 118 No Jun-18 Aug-18 Oct-18 Dec-18 Feb-19 Apr-19 Jun-19 NP3 NP1 FRN May/18 2.9 4.4% 36 No Sagax SA1 FRN Jun/15 1.0 2.2% 28 No Sagax SA2 FIX Sep/18 4.5 1.1% 500 No Sagax SA3 FRN Apr/16 1.8 3.5% 28 No RECENT YIELD SPREADS SELECTED BONDS SBB SB1 FRN Sep/18 Perpet. 6.2% 95 No Yield (%) SBB SB2 FRN Sep/17 Perpet. 6.5% 66 No 7. 0% Stendörren ST2 FRN Jun/18 2.0 4.6% 62 No SB2 Wallenstam WS1 FIX Jun/18 0.9 0.6% 38 No SB1 6. 0% Wallenstam WS2 FIX Nov/17 1.4 0.7% 81 No

5. 0% ST2 NORWAY TYPE DATE YEARS LAST EURm YES/NO NP1 Heimstaden HE1 FRN May/17 1.9 2.4% 118 No 4. 0% KÖ1 Olav Thon OT1 FRN Apr/17 2.8 2.4% 113 Yes SA3

Olav Thon OT2 FRN Apr/17 4.8 2.6% 67 Yes CO1 KÖ3 CC4 Olav Thon TH1 FRN Jun/16 1.0 2.1% 72 Yes 3. 0% CO2 OT2 SA1 HE1 OT1 HF1 KÖ2 TH1 CC2 FINLAND TYPE DATE YEARS LAST EURm YES/NO 2. 0% Citycon CC1 FIX Jun/13 1.0 0.3% 219 No BA2 SA2 KL2 Citycon CC2 FIX Oct/14 5.2 1.9% 350 Yes AL2 CC3 1. 0% AK2 KO1 KL1 FA1 AL1 FP1 Citycon CC3 FIX Sep/15 3.2 1.0% 300 No WS1 WS2 CC1 BA1 Citycon CC4 FIX Sep/17 6.2 2.8% 103 No 0. 0% Kojamo KO1 FIX Jun/17 5.0 0.8% 500 No 35 % 40 % 45% 50 % 55 % 60% 65%

Fixed rate note Floating rate note Loan to value (%) 1Remaining time to maturity 2Outstanding amount

Several larger bond issues in June, for example:

Balder issued a 5Y unsecured green bond (SEK 1,000m) with a floating rate of 1.58%

SBB issued a 3Y unsecured green bond (SEK 500m) with a floating rate of STIBOR 3M + 1.20%

Heimstaden issued a 4Y unsecured bond (SEK 250m) with a floating rate of STIBOR 3M + 3.25%

Source: Pangea Research, Reuters

13 Pangea Property Partners

ABOUT US PANGEA RESEARCH

Pangea Property Partners is an independent Pangea’s inhouse research team follows the advisory firm focusing on property related Nordic property and capital markets continuously corporate finance and transaction services in and provides an independent view on real estate. the Nordics. The company has more than 30 Please find key contact persons below. employees with offices in Stockholm, Oslo and London. In addition, there is a close cooperation with Mrec in Finland. In 2019 H1, Pangea Property CONTACT PERSONS Partners executed more than 20 transactions and NORDICS advisory mandates with an underlying property NORWAY Mikael Söderlundh Kristian Hoem value of about EUR 1.5bn. +46 73 770 77 90 +47 99 12 12 94 [email protected] [email protected] SERVICE OFFERING SWEDEN • Property Transactions Christian Sahlström • Corporate Finance +46 72 223 26 07 • Research & Strategic Advisory [email protected] • Hotel Sector Competence

RESEARCH REPORTS

Pangea Property Pangea Listed Pangea Hotel Pangea Weekly Pangea Monthly Outlooks Overview Monthly

RESEARCH PARTNERS MREC LOKALDATABASEN.DK

Mrec Oy is an independent financial adviser in property and Lokalebasen.dk is a well established player in the Danish infrastructure related transactions in Finland. Mrec was market for letting and leasing services. The company has established in 2010 as a Finnish subsidiary to Tenzing AB, a some 14 employees with office in Copenhagen and is fully leading property transaction advisor in Sweden. As a result independent. Lokalebasen.dk offers an easy to use web of the sale of Tenzing AB in 2014 key personnel acquired the portal where property owners can market their vacant Finnish company Tenzing Oy and changed the name to premises (office, retail, industrial/storage) towards a broad Mrec. After the transaction Mrec continues its mission to and diversified group of potential tenants. The company was serve clients in the Finnish property and infrastructure part of DN Erhverv up to 2013. market.

FINLAND DENMARK Johan Fager, Mrec (mrec.fi) Jakob Dalhoff, Lokalebasen.dk

+35 40 777 2929 +45 26 16 44 86 [email protected] [email protected]

14 Definitions

Currency conversion All transactions volumes have been converted into EUR based on end of month exchanges rates

Government bonds Based on 10Y government bonds (middle spread rates)

Gross Domestic Product Based on IMF World Economic Outlook forecasts (constant prices, not seasonally adjusted)

Interest rates Based on 10Y interbank swap rates (middle rates)

Inflation Based on 12M consumer price indices (not seasonally adjusted)

Currencies Based on daily exchange rates (middle rates)

Unemployment Based on figures from Statistics Sweden and Statistics Norway (monthly labour force study) showing share of population not part of workforce (15-74 years)

Property transaction volumes Based on all publicly known transactions with a property value above SEK 50m (Sweden), NOK 50m (Norway), EUR 5m (Finland) and DKK 50m (Denmark) respectively

Office yields Based on estimated transaction yields for office properties in central locations

Office rents Stockholm Annual rents based on signed office leases in Stockholm inner city, moving average base rents for 3M periods. Prime rents comprise the top five leases for offices larger than 300 m²

Office rents Oslo Annual rents based on signed office leases in Oslo CBD (top 15%) and the Oslo region, average rents for 3M periods

Office rents Helsinki Annual office rents based on signed office leases in Helsinki inner city, average base rents for 3M periods. Prime rents comprise the top leases for offices larger than 500 m²

Office rents Copenhagen Annual rents based on signed office leases in Copenhagen CBD and greater Copenhagen, 3M averages for offices larger than 250 m²

Global stock market performance Based on MSCI All Country World (all-shares index), GPR 250 PSI Global (property shares index)

Nordic stock market performance Based on PREX Property (property share index), PREX Construction (construction share index) and OMX Nordic All-share index

Nordic property sector valuation Based on daily value weighted price to book multiples (unadjusted NAVs)

Pangea Real Estate Indices (PREX) PREX includes all listed property and construction companies in the Nordic region and is divided into multiple sub-indices measuring country wise as well as sector wise performance. All indices are market value weighted and presented excluding dividends in this market report. For more info see www.pangeapartners.co.uk/research

PREX Property Price index for all Nordic property companies

PREX Construction Price index for all Nordic construction companies

PREX Country Four price indices for property companies in Sweden, Norway, Finland and Denmark respectively

PREX Sector Five price indices for all office, retail, residential, warehouse and mixed companies respectively

Corporate bond yield Measures yield to maturity as implied by current market valuation of the bond

Corporate bond yield spread Based on current yield to maturity and a corresponding benchmark yield (STIBOR, NIBOR, etc.) with the same maturity

All the information in this publication has been compiled in good faith and is based on sources that Pangea Property Partners considers reliable. Nevertheless, no guarantee can be given for the completeness of correctness of the contents, and Pangea assumes no responsibility for actions based on the contents of this publication. © 2019 Pangea Property Partners KB and Pangea Property Partners AS. All rights reserved.

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