Wihlborgs Annual Report & Sustainability Report 2020 Highlights of the Year Rental income rose 3 percent to SEK 3,074 million (2,983) Operating surplus improved 4 percent to SEK 2,222 million (2,140). Income from property management improved 3 percent to SEK 1,830 million (1,775). Profit for the period totalled SEK 2,222 million (2,923), corresponding to earnings per share of SEK 14.46 (19.02). The Board of Directors proposes a dividend of SEK 5.25 (4.50) per share. Key metrics for the Group, SEK m. 2020 2019 Jan–Dec Jan–Dec Rental income 3,074 2,983 Operating surplus 2,222 2,140 Income from property management 1,830 1,775 Changes in property values 826 1,479 Changes in derivative values -73 13 Profit for the year 2,222 2,923 Earnings per share, SEK 14.46 19.02 Surplus ratio, % 72 72 Equity/assets ratio, % 41.3 38.4 Occupancy rate, %* 91 93 EPRA NAV per share, SEK 152.44 140.20 *Excluding Projects & Land. 46.1 3.3 PROPERTY VALUE RENTAL VALUE, SEK BILLION SEK BILLION 1.8 91 INCOME FROM OCCUPANCY PROPERTY MANAGEMENT, RATE, % SEK BILLION Introduction Administration Report Highlights of the Year 2 Review of 2020 77 Major events 2020 4 Proposed distribution of profit 79 Wihlborgs in brief 6 Taxes 80 CEO’s statement 8 Property valuation principles 82 Risks and uncertainties 84 Goals and strategies Mission, business model and strategies 12 Financial statements Overall goals 17 Consolidated financial statements 91 The Wihlborgs share 20 Parent Company financial statements 95 Notes to Consolidated & Parent Market and trends Company financial statements 98 The expansive Öresund region 23 Signatures 115 The workplace of the future 27 Corporate governance report 116 Auditor’s Report 124 Sustainable Business Five-year review 128 Wihlborgs’ sustainability initiatives 31 Calculation bases and definitions 129 Responsible business 34 Attractive employer 36 In-depth sustainability Commitment to the region information and its community 38 Sustainability reporting 2020 133 Sustainable properties 40 Auditors’ Statement on the sustainability report 133 Our properties Sustainability framework 134 Property portfolio and transactions 45 The UN’s Sustainable Malmö 50 Development Goals 137 Lund 56 GRI Index 138 Helsingborg 60 Reporting according to TCFD 140 Copenhagen 64 Sustainability indicators according to EPRA 142 Projects and development Sustainability information 144 Projects and development at Wihlborgs 69 Completed, ongoing and Property list future projects 72 Malmö 153 Lund 156 Helsingborg 157 Copenhagen 160 Wihlborgs Fastigheter AB (publ) is a property company that focuses on commercial properties in the Öresund region. Its portfolio is located in Malmö, Helsingborg, Lund and Copenhagen. Wihlborgs is the leading property company in Malmö, Lund and Helsingborg. The carrying amount of the company’s properties totals SEK 46.1 billion. The annual rental value of the properties is SEK 3.3 billion. Wihlborgs’ shares are listed on the Large Cap List of Nasdaq Stockholm. Cover image and left-hand image: The Prisma office building (Ursula 1) was the first to be finished in Helsingborg’s new Oceanhamnen district. 03 2020 began with the acquisition of a property previously owned by Wihlborgs We are beginning a total redevelopment of the Raffinaderiet 3 property – the Banemarksvej 50 office property in Brøndby. It was first purchased in next to Lund Central Station, to which we will also add a new building. In 1999 before being sold for a profit three years later. The largest tenant in the total, we are creating 5,800 m² of modern offices with an industrial feel and property is, as was also the case back then, Milestone System A/S. respect for the building’s history. The newly built Origo office building in Hyllie was awarded the In December, tech hub Hetch moved into the newly built Prisma (Ursula 1) “Gröna Lansen” in September – the City of Malmö’s prize for building in Helsingborg. Hetch offers accelerators, a start-up community, environmentally sustainable construction. Property Manager Ida co-working, business advisors and a network, all with the vision of Helsing- Lejdström and Project Manager Rickard Berlin are proud of this prize. borg becoming a leading tech city in Sweden. 04 Major events 2020 On 1 January 2020, the Banemarksvej 50 office building in Brøndby, Denmark was acquired, encompassing 19,500 m² of lettable area for a purchase consideration of DKK 100 million. We signed two new leases at Slagthuset 1 in Nyhamnen, Malmö. The co-working company Mindpark signed a lease for 1,300 m² while tech company Softhouse leased 1,100 m². Q1 We strengthened our focus on sustainability through a new business function – Sustainable business – that is represented in the Group Management and managed by Anna Nambord. The effects of the coronavirus pandemic began to become apparent among certain tenants and we attempted to jointly pinpoint sustainable solutions. Wihlborgs helped to ensure continued growth by maintaining its investments in the region, purchasing and distributing lunches, etc. All Wihlborgs’ properties in central Lund were fully let and Wihlborgs commenced planning of a project to renovate and create 5,800 m² of modern and Q2 environmentally certified offices in Raffinaderiet 3. Region Skåne signed a 15-year lease for 3,700 m² at Kranen 2 in Dockan, Malmö, for the Reproductive Medicine Center (RMC) and a speech therapy reception. The Origo (Bure 2) office building in Hyllie, at which Ingka Services is a tenant, was awarded the “Gröna Lansen” – the City of Malmö’s prize for environmentally sustainable construction. A new building comprising 4,000 m² of new office space was completed at Medeon Science Park in Malmö. Galenica, which launched at Medeon in 1999, Q3 became the largest tenant in the building. In Malmö, Wihlborgs sold 21 properties in Arlöv, Bulltofta and the port for a total of 124 000 m² and an underlying property value of SEK 1.4 billion. In Fosie, Malmö, tenant voestalpine Böhler weldCare AB moved into an entirely new logistics and production facility at Stenåldern 7. Wihlborgs improved on its result in the Global Real Estate Sustainability Benchmark’s annual evaluation of the property sector’s sustainability performance and captured first place in the Northern Europe/Diversified/ Listed group. Q4 In December, occupancy began in the newly built Prisma office building in Oceanhamnen. First to move in were tech hub Hetch, Assistansbolaget, KPMG and EY. 05 Wihlborgs in brief Our operations Wihlborgs is the leading property company in the Öresund region. Over 50,000 people have their workplace at one of our premises. People in Malmö, Lund, Helsingborg and Copenhagen all meet in city spaces designed by us, and our presence can also be felt in board rooms, club rooms and social forums as the Öresund region grows amid a wave of urban diversity and sustainability. This is our property company – Wihlborgs. The region-builder. 1,810 46.1 2.1 Tenants Property value, SEK billion Million square metres 06 Our mission Our sustainability Specialising in efficient sub-markets in the Wihlborgs is to ensure the company’s Öresund region, Wihlborgs will develop and region’s long-term sustainable and own commercial properties, as well as development. Our focus is on responsible manage them in-house. business, commitment to the region and its community, being an attractive employer and sustainable properties. 236 294 28 Full-time employees Properties Market capitalisation, SEK billion 07 08 CEO’s statement New opportunities for success forged from the changes It was a different year. The pandemic took hold and changed life for everyone. How has 2020 been? Beside the human suffering with a great number of people fall- It was successful, in many ways very successful. We enter ing ill, many companies found it difficult to keep their businesses 2021 with a stronger financial position than ever before. operational, with the pandemic resulting in furloughs, dismissals We take a long-term approach and our sustainable strategy and, in the worst cases, bankruptcies. Of course, we do what allows us to continue to deliver. Even in 2020, we noted positive we can to help our customers when the crisis is at its most net lettings in all four quarters, totalling SEK 31 million for the severe. At the time of writing, we still cannot see an end to the year. Rental income rose 3 percent to SEK 3,074 million while pandemic, but with continued restrictions and vaccinations, we the operating surplus improved 4 percent to SEK 2,222 million. will get through this crisis. Nobody can tell how quickly this will Income from property management increased 3 percent to SEK occur, but we know that this is about building for the future with 1,830 million, while profit for the year totalled SEK 2,222 million, a receptiveness and curiosity that presents us with new answers corresponding to earnings per share of SEK 14.46. In particular, and opportunities. Despite the different year, our strong posi- the equity/assets ratio has increased and the loan-to-value ratio tion in the region has prevented the pandemic from hindering has declined, placing us in a stronger financial position than us in investing and developing new ideas. On the contrary, we ever before. Our largest transaction during the year was the have increased our commitment and established new initiatives divestment of 21 properties in the northern part of Malmö to to place us in an even better position for the future. Without Blackstone for SEK 1,430 million. The properties encompass losing focus on our core operations and our earning capacity, office space and logistics and production premises totalling 2 there is a need for new innovation based on our shared experi- 124,000 m .