Interim Report January to September 2011

Transcription

1 Akelius Fastigheter AB Interim Report January to September 2011 Holländische Reihe, Hamburg

2 Akelius Fastigheter AB Registered company number: Interim report January to September 2011 Rental income amounted to SEK 1,917 m (1,832) Residential rental level increased by 4.1 percent in Sweden and by 5.6 percent in Germany Change in value of properties amounted to SEK 830 m (254), 2.9 percent Properties were sold for SEK 657 m, 18 percent above valuation Change in value of derivatives amounted to SEK -625 m (-527) Profit for the period was SEK 371 m (42) Investments in properties amounted to SEK 774 m (632) Acquisitions of residential properties amounted to SEK 3,189 m (260) The Group Operations Akelius Fastigheter s business concept entails the longterm ownership and management of properties that generates a steadily growing cash flow. The share of residential properties ought to be 90 percent measured as a percentage of the market value of the properties. Properties for commercial and public operations shall be let under long and stable rental agreements. Low financial risk is achieved through long-term fixed interest rates and capital tied-up for long-term periods. This interim report covers nine months, namely the financial period 1 January to 30 September The comparative periods refer to the corresponding period in 2010 and the previous financial year (1 January to 31 December 2010). Comparisons with regard to assets and liabilities refer to the most recent end of the financial year, 31 December This report has been prepared in compliance with the International Financial Reporting Standards, although the report is not strictly complete according to IFRS 1 as regards information that should be presented in the first IFRS-compliant financial report. This is due primarily to the exclusion of information regarding the applied accounting standards. At the end of the financial period, the Group owned properties in Sweden and Germany with an assessed market value of SEK 32,734 m (28,394). The properties are concentrated in locations that exhibit growth in rents and in population. 49 percent of the portfolio is situated in regions with more than 1 million inhabitants Greater Stockholm Area, Berlin, Hamburg, Munich, Cologne and 65 percent of the portfolio in regions with more than 0.2 million inhabitants. In compliance with the company s strategy, the share of residential properties was high. At the end of the period, residential properties accounted for 90 percent (88) in terms of market value. The lettable area of the properties totalled 2,648,950 square metres (2,424,114). The property portfolio comprised 34,973 apartments (31,502), with 11,186 (8,576) of these apartments in Germany. 2 Interim report January to September 2011

3 Sweden Germany 23,787 residential units 11,186 residential units 349 properties 235 properties SEK 23,248 m in market value SEK 9,486 million in market value SEK 12,057 per sqm SEK 13,160 per sqm 5.2% in required yield 4.9% in required yield Sweden Germany Vacancy rate 2.1% Vacancy rate 1.9% - due to upgrades 74% - due to upgrades 61% - real vacancy rate 0.6% - real vacancy rate 0.7% Average rent SEK/sqm/year 1,005 Average cold rent /sqm/month 7.24 New leases SEK/sqm/year 1,097 New leases /sqm/month 9.74 Growth rate % Growth rate % 3 Interim report January to September 2011

4 Akelius Fastigheter AB is the parent company of the Group, with the properties owned directly by the parent company or through subsidiaries. Operating surplus of SEK 1,067 m The Group s rental income for the financial period increased by SEK 85 m to SEK 1,917 m (1,832). The rental market remains strong. The average residential rent for comparable properties in Sweden rose by 4.1 percent during the period, of which 2.75 percent is due to annual rent negotiations while the remainder is a result of upgrading of apartments. The average rent for new leases during the third quarter was SEK 1,097 per square metre and year, which is 14 percent higher than the average residential rent at the beginning of the year. At the end of the period the average residential rent was SEK 1,005 per square metre and year. The average residential cold rent for comparable properties in Germany rose by 5.6 percent during the period. The main part of the increase is due to new leases of upgraded apartments. The average cold rent for new leases for the period was EUR 9.74 per square metre and month, which is 42 percent higher than the average residential cold rent at the beginning of the year. At the end of the period, the average rent for residential properties was EUR 7.24 per square metre and month. 4 Interim report January to September 2011

5 By the end of September the vacancy rate for apartments was 2.0 percent, although 70 percent of these apartments were vacant due to upgrading. The real vacancy rate was thus 0.6 percent, which is unchanged compared to the vacancy rate at the end of December Property costs were SEK 850 m (877), corresponding to a reduction of SEK 27 m. Of property costs, SEK 175 m (176) comprised maintenance, corresponding to an average annual cost of SEK 88 (96) per square metre. The operating surplus for the period increased by SEK 112 m to SEK 1,067 m (955). The operating surplus margin was 55.6 percent (52.1). Revaluation of derivatives SEK -625 m Interest income for the period, including interest subsidies, was SEK 69 m (69) and financial expenses for the year were SEK -819 m (-793). This gives an interest coverage ratio of 1.27 (1.15). Revaluation of off-balance instruments, interest rate derivatives, totalled SEK -625 m (-527), which was due to decreased interest rates. Property revaluation of 2.9 percent Revaluation of properties was SEK 830 m (254). This represents an increase in value during the period of 2.91 percent (0.91). Of the revaluation of properties SEK 101 m was realised through sales of properties. The total sales price of SEK 657 m was 18 percent above the market valuation of 31, December Aside from the value growth due to sales, the remaining growth is due to increased rental income, since the required yield for the assessed market values has remained unchanged. Profit SEK 371 m After-tax profit for the period increased by SEK 329 m to SEK 371 m (42). Acquisitions SEK 3,189 m During the period, properties were acquired at a value of SEK 3,189 m (260), of which SEK 1,265 m was attributable to properties in Sweden and SEK 1,924 m to properties in Germany. The average initial yield was 4.9 percent in Sweden and 4.7 percent in Germany. The average acquisition price per square metre was SEK 13,483 in Sweden and SEK 12,372 in Germany. Investments SEK 774 m Investments in the properties totalled SEK 774 m (632), which corresponds to SEK 305 per square metre. During the period approximately 1,800 apartments were upgraded during tenant fluctuation to the standard of Akelius Living, which was 45 percent of all vacated apartments. The upgrade cost was SEK 383 m, or SEK 0.2 m per apartment. Another SEK 229 m was invested during the period in the complete upgrade of properties. One of the larger projects is in southern Stockholm, where a property with 479 apartments is being upgraded. The complete upgrade entails measurements such as new balconies, new bathrooms and kitchens, new roofs and façades, and a new heating system. Other major upgrades, totalling SEK 162 m, included converting commercial units to residential, attic extensions, densification projects, and water and energy saving projects. 5 Interim report January to September 2011

6 Market valuation of property holdings As of closing day, the market value of all properties was assessed by internal valuation. The valuations are based on a cash flow model for each individual property, with individual assessments of future earning ability and required yield. The cash flow model is based on actual income and expenses adjusted for a normalised future cash flow. Over the space of a year, CB Richard Ellis examines and verifies one third of the internally estimated values. The average required yield in the assessment of residential properties was 4.9 percent in Sweden and 4.8 percent in Germany. For commercial properties, the average required yield was 6.6 percent in Sweden and 6.4 percent in Germany. The average required yield for the total portfolio was 5.1 percent, which is slightly lower than at the beginning of the year. This is due to more rapid growth of the market values in Germany, which has a lower required yield. The required yield for each property remained unchanged during the year, however. The assessed market value of the Group s property holdings as per closing day was SEK 32,734 m (28,394), which corresponds to SEK 12,357 per square metre. The market value has increased by SEK 830 m due to revaluation, corresponding to 2.9 percent, and by SEK 204 m due to exchange rate fluctuations, corresponding to 0.7 percent. Aside from SEK 101 m earned through the sale of properties above market value, the revaluation of SEK 729 m is otherwise completely down to increases in rental income. Changes in property holdings have increased the market value by SEK 3,306 m. Investments and purchases amounted to SEK 3,963 m and properties were sold for a total of SEK 657 m. Of the total market value, SEK 23,248 m (21,502) comprises properties in Sweden and SEK 9,486 m (6,892) properties in Germany. Residential properties represent 90 percent (88) of the market value, which is in line with the Group s goal of residential properties comprising at least 90 percent. 6 Interim report January to September 2011

7 Financial position At the end of the period, the Group s interest-bearing liabilities totalled SEK 21,108 m (17,721), of which SEK 17,349 m (13,883) was attributable to interestbearing liabilities with security and SEK 3,759 m (3,838) to interest-bearing liabilities without security. Of the interest-bearing liabilities without security, SEK 240 m comprised loans from the parent company Akelius Apartment Ltd. Interest-bearing liabilities with security refer to loans raised with properties as security. Of interestbearing liabilities with security, SEK 3,520 m (683) had an interest rate fixed for less than one year and SEK 9,858 m (10,274) had an interest rate fixed for more than five years. Interest-bearing liabilities with security had an average interest rate of 5.01 percent (5.11) and capital was tied-up for an average of 5.3 years (5.5). At the end of the financial period, available funds in the form of cash and granted but unutilised credit facilities totalled SEK 1,031 m (2,004). Unutilised credit facilities totalled SEK 1,096 m (1,990). During the period, the Group s equity increased by SEK 465 m and, at the end of the financial period, totalled SEK 8,035 m (7,570), corresponding to an equity/assets ratio of 23.9 percent (26.0). 7 Interim report January to September 2011

8 Effects on equity due to transition from Swedish GAAP to IFRS This financial report is the first that the Akelius Fastigheter Group has prepared in accordance with the International Financial Reporting Standards. The transition from Swedish GAAP to IFRS has affected the valuation of intangible assets, properties, work in progress and off-balance instruments (interest swaps). Deferred tax is calculated as 26.3 or 34 percent of the differences resulting from the revaluations. The income statement of the group has been affected as follows due to the transition from Swedish GAAP to IFRS. All amounts in SEK m. 31 Dec Sept 2010 Result according to Swedish GAAP Revaluation of intangible assets 3 2 Revaluation of tangible assets Revaluation of off-balance instruments Effect on deferred tax revaluations Result according to IFRS The equity of the group has been affected as follows due to the transition from Swedish GAAP to IFRS. All amounts in SEK m. 31 Dec Sept Dec 2009 Closing balance, Swedish GAAP 5,009 4,815 4,218 Revaluation of intangible assets Revaluation of tangible assets 4,577 4,670 4,841 Revaluation of off-balance instruments -1,339-1,943-1,416 Effect on provisions by revaluations Closing balance, IFRS 7,570 6,998 6,928 The cash flow analysis is not affected by the transition from Swedish GAAP to IFRS. Events after the end of the financial period Since the end of the financial period, 26 properties with 455 apartments and 28,820 square metres lettable area have been acquired in Germany for SEK 397 m with a calculated initial yield of 4.79 percent. A sales agreement for 16 properties for elderly care use in Sweden has been signed. Stockholm, 14 November 2011 Pål Ahlsén Managing Director 8 Interim report January to September 2011

9 Income Statement Amounts in SEK m 9 months 9 months 12 months Rental income 1,917 1,832 2,439 Operating expenses Maintenance Property tax and site leasehold fees Property costs ,221 Operating surplus 1, ,218 Other expenses/income Central administration expenses Operating profit 1, ,142 Financial income Financial expenses ,052 Operating profit after financial items Change in value of investment properties Change in value of derivative instruments Profit before taxes Taxes Profit for the period Attributable to minority interest Interim report January to September 2011

10 Balance sheet Amounts in SEK m Goodwill Properties 32,734 28,279 28,394 29,304 Other assets ,820 Cash and bank balances Assets 33,629 29,080 29,127 31,163 Equity 8,035 6,998 7,570 6,928 Deferred tax 1,945 1,708 1,857 1,868 Interest-bearing liabilities without security 3,759 3,809 3,838 3,405 Interest-bearing liabilities with security 17,349 14,034 13,883 16,831 Other liabilities 2,541 2,531 1,979 2,131 Equity & Liabilities 33,629 29,080 29,127 31,163 Change in Equity Amounts in SEK m Share capital Restricted reserves Minority share Retained earnings Total Opening balance ,139 7,570 Redistribution 0 Translation difference Acquired 0 0 Profit for the period Closing balance ,509 8, Interim report January to September 2011

11 Cash Flow Statement amounts in SEK m Jan Sep Jan Sep Jan Dec 9 months 9 months 12 months Continuing operations Changes in working capital * -9 1,614 1,155 Cash flow from operating activities 269 1,871 1,447 Investments in properties Acquisitions of properties -3, Sales of properties * * 639 1,434 2,381 Other investing activities * * * Cash flow from investing activities -3, Cash flow from financing activities 3,214-2,242-1,745 Cash flow for the period Cash and cash equivalents at the end of the period * The large deviation in changes in working capital is due to the amortisation of Akero bonds * * Including sales expenses * * * Including pre-payments (SEK -144 m), machinery and equipment (SEK - 1 m), condominiums (SEK 5 m) and promissory notes (SEK -27) Property holdings as per 30 September 2011 No. of Lettable area, square metres apartments Residential Commercial Total Share % Sweden 23,787 1,590, ,188 1,928, Germany 11, ,886 30, , Total 34,973 2,280, ,101 2,648, Attic extension, Berlin 11 Interim report January to September 2011

12 Change in market value /2009 Amounts in SEK m 30 Sep 30 Sep 31 Dec 31 Dec 9 months 9 months 12 months 18 months Market value, start of period 28,394 29,286 29,286 31,095 Translation difference EUR/SEK Revaluations of properties Investments in properties ,007 1,124 Acquisitions of properties 3, ,727 Sales of properties ,425-2,400-5,050 Market value, end of period 32,734 28,279 28,394 29,286 Interest-bearing liabilities with security Amount Share Average Duration, years SEK m % interest % 0-1 3, , , , , , , Total 17, Interim report January to September 2011

13 Key ratios Equity 30 Jun 30 Jun 31 Dec 31 Dec 30 Sep Equity, SEK m 6,754 8,326 6,928 7,570 8,035 Equity / asset ratio, % Venture Capital, % Liabilities LTV, secured liabilities, % LTV, total liabilities, % ICR, secured liabilities ICR, total liabilities Interest rates Average interest rate secured liabilities, % Average interest rate total liabilities, % Interest binding secured liabilities, years Capital binding secured liabilities, years Properties Number of apartments 29,056 35,676 32,988 31,502 34,973 Vacancy rate apartments, % Market value, SEK m 23,543 30,845 29,286 28,394 32,734 Market value, SEK per square metre 9,630 10,741 11,586 11,713 12, Interim report January to September 2011

14 Akelius Fastigheter AB headquarter Svärdvägen 3A Box 104 S DANDERYD tel +46 (0) northern sweden Svärdvägen 3A Box 104 S DANDERYD tel +46 (0) southern sweden Föreningsgatan 15 Box S MALMÖ tel +46 (0) Upgraded bathroom, Malmö germany Leipziger Platz 14 D BERLIN tel +49 (0) Upgraded kitchen, Lund