Ph o to s: M at s B en g ts so n , M at s L u n d q vi st , T h o m as H ar ry ss o n , J es p er O rr b ec k, H el en a A xe ls so n , O sc ar E k a n d o th er s • P ri n ti n g: B ill es T ry cke ri
Fastighets AB Balder (publ) www.balder.se • [email protected] • Corporate identity no. 556525-6905
Head office Vasagatan 54 • Box 53 121 • 400 15 Gothenburg • Tel +46 31 10 95 70 • Fax +46 31 10 95 99
Regional offices
Stockholm Drottninggatan 108 • 113 60 Stockholm • Tel +46 8 73 53 770 • Fax +46 8 73 53 779 Vårby Allé 14 • 143 40 Vårby • Tel +46 8 72 11 650 • Fax +46 8 71 02 270
Gothenburg/West Storgatan 20B • 521 42 Falköping • Tel +46 515 145 15 • Fax +46 515 71 12 18 Timmervägen 7A • 541 64 Skövde • Tel +46 500 43 64 44 • Fax +46 500 42 84 78
Vasagatan 54 • Box 53 121 • 400 15 Gothenburg • Tel +46 31 10 95 70 • Fax +46 31 10 95 99 East Storgatan 30 • 573 32 Tranås • Tel 0+46 140 654 80 • Fax +46 140 530 35
Hospitalsgatan 11 • 602 27 Norrköping • Tel +46 11 15 88 90 • Fax +46 11 12 53 05 Tunadalsgatan 6 • 731 31 Köping • Tel +46 221 377 80 • Fax +46 221 132 60 Öresund Esplanaden 15 • 265 34 Åstorp • Tel +46 42 569 40 • Fax +46 42 569 41
Stora Nygatan 29 • 211 37 Malmö • Tel +46 40 600 96 50 • Fax +46 40 600 96 64 Södergatan 10 • 252 25 Helsingborg • Tel +46 42 17 21 30 • Fax +46 42 14 04 34 North Forskarvägen 27 • 804 23 Gävle • Tel +46 26 54 55 80 • Fax +46 26 51 92 20
Sandbäcksgatan 5 • 653 40 Karlstad • Tel +46 54 14 81 80 • Fax +46 54 15 42 55 Tallvägen 8 • 854 66 Sundsvall • Tel +46 60 55 47 10 • Fax +46 60 55 43 38 Letting +46 20 151 151 Customer service +46 774 49 49 49 Fa st ig h et s A B B al d er 2 01 1
Annual Report 2011
Contents
1 Overview
2 Comments by the CEO 4 Balder’s development 5 Multi-year overview 6 Business concept, goals and strategy
8 Current earning capacity 9 The share and owners 12 Our customers 14 Organisation and employees
16 Environment 20 Market
22 Balder’s property portfolio 24 Stockholm region
27 Gothenburg /West region 30 Öresund region
32 East region 34 North region 36 Real estate valuation
39 Financing
42 Opportunities and risks
Fastighets AB Balder
is a listed property
company which shall meet the needs of
different customer groups for premises and
housing based on local support. Balder’s
real estate holdings were valued at SEK 17.6
billion (14.4) on 31 December 2011. The
Balder share is listed on NASDAQ OMX
Stockholm, Mid Cap.
Annual General Meeting
The Annual General Meeting of Fastighets AB Balder (publ) will take place on 9 May 2012 at 3 p.m. at Elite Park Avenue Hotel, Kungsportsave-nyn 36–38 in Gothenburg.
Shareholders who wish to participate in the Annual General Meeting must be registered in the share register maintained by Euroclear Sweden AB on Thursday, 3 May 2012, and must give notice of their attendance to the company by letter to Fastighets AB Balder, Box 53 121, 400 15 Goth-enburg, by telephone +46 31 10 95 70, by fax +46 31 10 95 99 or by e:mail to [email protected]. The company provides a power of attorney form on its website www.balder.se for shareholders who wish to be represented by proxy. The notification must be received by Balder no later than 4 May 2012 at 4 p.m.
Notification must include the shareholder’s name, Swedish personal identity number or corporate identity number, address, telephone num-ber and the registered shareholding. Shareholders who are represented by proxy must submit a written and dated power of attorney, which may not be more than five years old on the date of the Annual General Mee-ting. A proxy who is representing a legal entity must submit a certificate of registration or corresponding legitimacy papers showing authorised signatories.
Shareholders whose shares are held through nominees must arrange for temporary registration of the shares in their own name in order to have the right to participate in the Meeting. Such registration must be completed at Euroclear Sweden AB by Thursday, 3 May 2012.
46 Associated companies 49 Report of the Board of Directors Consolidated Statement of 54 Comprehensive income 55 Financial position 56 Changes in equity 57 Cash flows Parent Company 58 Income statement 59 Balance sheet
60 Statement of changes in equity 61 Cash flow statement 62 Notes
82 Audit report 83 Corporate Governance 88 Board of Directors 89 Management and Auditors
90 List of properties 97 Definitions and calendar
Cover picture: Interiört Rosen 9, Malmö
FASTIGHETS AB BALDER ANNuAL REpORT 2011 1 ST O C k HOL M G O T HE NB u R G /W ES T Ö R ES u N D EA ST NOR T H
Balder overview
Real estate value, SEKmProfit from property
management, SEKm Lettable area, %
5,866 SEKm 5,913 SEKm 2,792 SEKm Gothenburg/West East Öresund North 17,556 SEKm Stockholm 2007 2008 600 450 300 150 0 SEKm 2009 2010 2011 Other, 6 Office, 27 Commercial, 11 Residential, 56 1,695 SEKm 1,290 SEKm 120 90 60 30 0 SEKm 2007 2008 2009 2010 2011 Other, 11 Residential, 37 Commercial, 4 Office, 48 Other, 7 Commercial, 22 Residential, 45 Office, 26 Other, 6 Residential, 48 Commercial, 12 Office, 34 Other, 1 Residential, 96 Commercial, 3 Other, 1 Residential, 97 Office, 2 160 120 80 40 0 SEKm 2007 2008 2009 2010 2011 60 45 30 15 0 SEKm 2007 2008 2009 2010 2011 60 45 30 15 0 SEKm 2007 2008 2009 2010 2011 40 30 20 10 0 SEKm 2007 2008 2009 2010 2011 B AL d ER T o TAL
One year ago, I wrote that “my expectations for 2011 are high”. Now as we
docu-ment 2011, we can report that it was once again an exciting year with an
opti-mistic first half followed by a somewhat uncertain second half.
Comments by the CEO
I
think that the company performed well. We made a number of good long-term acquisitions and found new partners for Balder that strengthen our potential to deliver a satisfactory and sustainable increase in value. Our profit from property management also continued to develop well compared to previous years. Profit from property managementIn 2010, profit from property management exceeded SEK 400m for the first time, and one year later, we passed SEK 500m. The main reason was naturally the issues and acquisitions we carried out during the year which had a positive impact on ear-nings but also due to net operating income for comparable properties which increased during the period. The improvement was due to the fact that we managed to increase our income. We were also helped in the process by not having as cold or snowy an end to the year, compared to 2010.
Our already stable income will be strengthened further in 2012, thanks to our acquisitions in late 2011 and early 2012. We invested about SEK 2 billion in residen-tial properties with negligible vacancy levels and a fully let commercial property with long leases.
In early 2012, we took a new stride over the Öresund and completed our first acquisition of residential properties in Copenhagen. The properties are located in attractive areas and are fully let condominiums.
A stable income level and favourable interest rate level in Denmark means that it is interesting to try to find additional investment opportunities in this market going forward.
It is difficult to predict how the global financial turbulence will affect us. So far, we do not see any change in our customers’ payment capacity and we still see conti-nued good demand for our commercial premises. In order to continue to maintain a good income level it is extremely important that we have a close relationship with our customers, in order to grow together and prevent the risk of possible rental losses.
The Balder share
It is gratifying to see that Balder is continuing to attract the stock market. The number of shareholders increased by almost 70 per cent during the year, and amounted to approximately 8,200 at year-end. This may be compared to the approx-imately 2,000 shareholders we had at the end of 2008. The liquidity in the share is good and on average, 207,000 shares were traded per day.
We carried out two successful issues during the year. One issue of ordinary shares at the end of January and one issue of preference shares - a new class of shares for us - in the middle of June. The issues, which were both heavily oversubscribed, increased
FASTIGHETS AB BALDER ANNuAL REpORT 2011 3 shareholders’ equity by SEK 1,251m and strengthened our equity/assets ratio
signifi-cantly. Apart from capital, the issues have also brought us many new shareholders. In January 2012, we carried out another new issue of preference shares which provided the company with SEK 265m. For the benefit of ordinary shareholders, our priority is to allow the company to grow through good investments in acquisitions instead of share dividends. The goal is to achieve the best possible total yield over time and at present I believe that investing further in the operations is by far the best way to pro-ceed.
Changes in value of interest rate derivatives
The long-term level of interest rates continued to fall during the fourth quarter, which meant that the deficit on our derivative instruments increased and amounted to almost SEK 800m at year-end. There is no cloud without a silver lining. A large negative deficit on our derivative instruments means that the interest rate level is lower than we expected. Apart from the fact that changes in value do not affect our cash flow, there are additional advantages. New financing can be secured at lower levels, property values are supported by the lower level of interest and last but not least, the negative values on our derivatives will be zero in due course. This means that Balder will display an increase in shareholders’ equity of almost SEK 600m after tax, when the deficit has been released
outlook for 2012
As always, my expectations are high. During the year, our organisation shall conti-nue to focus on what property management is about – long-term hard work where it is important to generate rental income and ensure cost control in order to gradu-ally deliver improved net operating income and increase in value. We shall accom-plish this with our dedicated organisation which is supported by a stable income stream and a strong balance sheet.
My hope is that 2012 will offer a continued strong trend in profit from property management and that we will receive many wonderful new business opportunities. Gothenburg, April 2012
Erik Selin, Chief Executive Officer
”
My hope is that 2012 will
offer a continued strong
trend in profit from
property management and
that we will receive many
wonderful new business
opportunities.
2011
2010
Balder’s development
2005
2006
2007
2009
2008
• Fastighets AB Balder is formed in June from the listed company Enlight AB. • Balder acquires 21 properties during the year.
• Fastighets AB Balder is re-listed on the O-list of the Stockholm Stock Exchange. • 75 properties are acquired during the year and Balder owns 128 properties at
year-end.
• Balder refines its real estate holdings through the sale of 29 industrial and ware -house properties to Corem Property Group AB, where Balder becomes a major owner. 121 properties are owned at the end of the year.
• Acquisition of properties takes place in Stockholm through the associated com
-panies Tulia AB and Akroterion Fastighets AB.
• Balder acquires ten properties and sells nine properties.
• On 31 December, Balder owns 122 properties with a lettable area of 553,000 sq.m. and a carrying amount of SEK 7.1 billion.
• Acquisition of Din Bostad Sverige AB takes place during the year. • Balder focuses on renewable energy, by investing in six wind turbines. • On 31 December, Balder owns 419 properties with a lettable area of 1,260,000
sq.m. and a carrying amount of SEK 12.7 billion.
• During the year, acquisition of 31 properties and sale of 18 properties takes place. • The number of shareholders increases by more than 50 per cent during the year
and amounts to approximately 4,900 at year-end.
• On 31 December, Balder owns 432 properties with a lettable area of 1,322,000 sq.m. and a carrying amount of SEK 14.4 billion.
• The new class of shares, preference shares is issued. The issue amounts to SEK 1 billion.
• Balder acquires 25 commercial properties from Catena AB which are sold to a newly established joint venture company with PEAB.
• The focus on renewable energy continues. During the year, two further wind tur
-bines are acquired and Balder owns a total of ten wind tur-bines at year-end. • During the year, the number of shareholders increases by 67 per cent and
amounts to 8,200 at year-end.
• On 31 December, Balder owns 433 properties with a lettable area of 1,408,000 and a carrying amount of SEK 17.6 billion.
FASTIGHETS AB BALDER ANNuAL REpORT 2011 5
2011 2010 2009 2008 2007 2006
Rental income, SEKm 1,466 1,333 854 633 678 524
Profit from property management
before tax, SEKm 516 417 315 174 179 160
Changes in value of properties, SEKm 990 1,047 4 –201 642 212 Changes in value of interest rate
derivatives, SEKm –520 148 –23 –333 7 —
Net profit for the year, SEKm 812 1,338 248 –388 785 441
Carrying amount of properties, SEKm 17,556 14,389 12,669 7,086 6,758 6,997 data per ordinary share
Net profit for the year, SEK 4.87 8.95 2.20 –4.04 8.07 4.69 Profit from property management
before tax, SEK 3.00 2.79 2.79 1.81 1.84 1.70
Carrying amount of properties, SEK 110.04 96.25 84.75 75.02 69.44 71.90 Shareholder equity, SEK 35.57 31.13 22.19 19.63 23.49 15.42 Long-term net asset value (EPRA
NAV), SEK 41.84 32.89 22.16 20.95 22.33 13.06
Share price on the closing date, SEK 25.30 29.40 12.50 7.00 13.33 17.00
Property related
Rental value full-year, SEK/sq.m. 1,163 1,087 1,072 1,298 1,193 952 Rental income full-year, SEK/sq.m. 1,088 1,016 1,002 1,218 1,107 859
Economic occupancy rate, % 94 94 94 94 93 90
Surplus ratio, % 68 66 69 70 70 69
Carrying amount, SEK/sq.m. 12,467 10,887 10,053 12,805 12,275 8,854
Number of properties 433 432 419 122 121 128
Lettable area, sq.m. thousands 1,408 1,322 1,260 553 551 790 Financial
Return on equity, % 14.3 33.6 9.6 –18.7 41.5 37.5
Interest coverage ratio, multiple 2.1 2.1 2.1 1.6 1.7 2.0
Equity/assets ratio, % 35.2 30.9 24.1 23.3 30.1 20.6
Business concept
Balder shall, acquire, exploit and manage
residential properties and commercial
pro-perties located in places that are growing
and developing positively, based on local
support.
FASTIGHETS AB BALDER ANNuAL REpORT 2011 7 Balder’s operations are focused on growth, positive cash flows and increased profit
from property management. Balder shall achieve a position in each region whereby the Company is a natural partner for potential customers.
Financial goals
Balder’s goal is to achieve a stable and good return on equity over time which exceeds the risk-free rate of interest by a good margin, defined as the yearly average of a five-year government bond. At the same time, the equity/assets ratio over time shall not be less than 30 per cent and the interest coverage ratio shall not be less than 1.5 times.
operating goals
The Company establishes quantitative and qualitative operating goals based on Balder’s strategy, overall goals and financial policy. Both short-term and long-term goals are set. The goals relate to financial targets as well as environmental, energy consumption and customer/employee satisfaction goals.
dividend policy
Since Balder will prioritise growth, capital structure and liquidity during the next few years, the dividend for the ordinary share will be low or may not be declared at all. The dividend for the preference share amounts to SEK 20.00 per year.
Overall goals
Balder creates value for the owners, customers, employees and the community. Balder accomplishes this by:
• meeting and taking care of our customers • having short decision-making procedures
• carefully choosing cost effective management solutions
• maintaining a high level of activity in management and transactions both inter -nally as well as in partnership
Balder creates value by acquiring, exploiting and managing residential properties and commercial properties based on local support and creates customer value by meeting the needs of different customer groups for premises and housing. The company works actively to acquire properties with development potential and to generate growth by investing and exploiting as well as streamlining and improving the efficiency of the property management. Balder shall be a long-term owner that bases its operations on stable cash flows and satisfied customers.
The focus is on continuing to be an active participant in the property market, both under own management and in partnership, in locations that are growing and deve-loping positively.
Current earning
capacity
B
alder presents its current earning capacity on a twelve-month basis in the table below. It is important to note that the current earning capacity should not be placed on a par with a forecast for the coming 12 months. For instance, the earning capacity contains no estimate of rental, vacancy or interest rate deve-lopments. Balder’s income statement is also impacted by the development in the value of the real estate portfolio as well as future property acquisitions and/or pro-perty divestments. Additional items affecting the operating result are changes in value of financial investments and derivatives. None of the above has been conside-red in the current earning capacity.The earning capacity is based on the real estate portfolio’s contracted rental income, estimated property costs during a normal year as well as administrative costs.
The costs of the interest-bearing liabilities are based on the group’s average inte-rest rate level including the effect of derivative instruments. The tax is calculated using a standard tax rate of 26.3 per cent, which largely consists of deferred tax and therefore does not affect the cash flow.
Current earning capacity on a twelve-month basis 2011 2010
Rental income 1,530 1,405
Property costs –465 –430
Net operating income 1,065 975
Management and administrative costs –105 –105
Profit from property management from associated companies 90 20
operating profit 1,050 890
Net financial items –445 –440
Profit from property management 605 450
Taxes –159 –118
Profit after tax 446 332
Profit after tax attributable to
Ordinary shareholders 366 332
Preference shareholders 80 —
Profit from property management according to current
earning capacity per ordinary share, SEK 3.29 3.01
The earning capacity is based on the real estate portfolio’s
contrac-ted rental income, estimacontrac-ted property costs during a normal year
as well as administrative costs.
FASTIGHETS AB BALDER ANNuAL REpORT 2011 9
The share and owners
alder has two different Classes of shares quoted on NASDAQ OMX Stockholm,Mid Cap, a preference share that was listed on 20 June 2011, as well as an ordinary share of Class B. The company’s overall market capitalisation on 31 December amounted to SEK 5,104m and the company had 8,170 shareholders (4,856) at year-end. The principal owner in Balder is Erik Selin Fastigheter AB which owns 39.4 per cent of the capital and 52.4 per cent of the votes.
On 31 December, Balder’s share capital amounted to SEK 166,396,852 distributed among 166,396,852 shares. Each share has a quota value of SEK 1.00, of which 11,229,432 were of Class A, 151,167,420 of Class B and 4,000,000 preference shares. Of the B shares, 2,859,600 were repurchased as of 31 December, which means that the total number of outstanding shares amounts to 163,537,252 shares. Each Class A share carries one vote and each Class B share and preference share carries one tenth of one vote. No repurchasing of shares took place in 2011.
The profit from property management in the past three years has
increased by 45.7 percent on average. During the same period, the
long-term net asset value increased by 27.1 per cent on average.
2006 2007 2008 150 % 50 100 0 −50 2009 2010 2011 2012 Fastighets AB Balder 147,23%
EPRA: European Public Real Estate Association EPRA Europe Index −35,95% EPRA Sweden Index 72,99% Share price development 1 January 2006 to 12 March 2012
Balder’s share price closed at SEK 33.80 on 12 March 2012, which corresponds to a percen-tage growth since 1 January 2006 of 147 per cent. This may be compared to EPRA’s Pro-perty index for Sweden, which rose by 73 per cent during the same period. EPRA’s property index for European property companies displayed a nega-tive development during the same period.
Price development of ordinary share
The price of the ordinary share was SEK 25.30 (29.40) at year-end, equivalent to a decrease of 14 per cent during the year. In 2011, the number of ordinary sharehol-ders increased by 42 percent to 6,900 shareholsharehol-ders. During the same period, 52.5 million ordinary shares were traded equivalent to 207,000 per trading day, which means that 35 per cent of outstanding shares were traded. Excluding Erik Selin Fast-igheter AB’s shares, the annual turnover almost corresponds to 60 per cent of out-standing ordinary shares. The proportion of foreign-owned shares corresponded to just over 9 per cent on 31 December 2011.
Equity growth
Equity per ordinary share amounted to SEK 35.57 (31.13) on 31 December correspon-ding to an increase of 14.3 per cent during 2011. The long-term net asset value per ordinary share (EPRA NAV) increased during the same period by 27.4 per cent to SEK 41.84 (32.89). The large difference in equity in relation to the long-term net asset value is primarily attributable to the negative change in value of derivatives, which is reversed in the long-term net asset value. In the past three years, the long-term net asset value grew by an average of 27.1 per cent per year. The share price amoun-ted to SEK 25.30 on 31 December equivalent to 60.5 per cent of the the long-term net asset value.
The profit from property management before tax in 2011 amounted to SEK 516m (417, which corresponds to an increase of 23.7 per cent from the previous year. In the past three years, profit from property management increased by an average of 45.7 per cent per year. Profit from property management per ordinary share increased by 7.5 per cent during 2011 and has increased by 20.5 per cent on average in the past three years.
Price development of preference share
The price of the preference share was SEK 267 was year-end, corresponding to a total annual yield, including dividend, of 20.3 per cent and a yield of 10.8 per cent since the listing. The number of shareholders amounted to 2,033 and during the period 20 June to 31 December, 1.8 million shares were traded, corresponding to almost 13,000 per trading day. The annual turnover in the preference share corresponds to 82 per cent of the total number of preference shares.
The preference share carries preferential right over the ordinary share to an annual dividend of SEK 20 with quarterly dividend of SEK 5. Record days for dividend are 10 April, 10 July, 10 October and 10 January. If dividend on the preference share is not paid in time or for a lower amount, the difference shall be added to amounts unpaid.
ownership structure on 31 december 2011
Holding Number of shareholders Share- holders, % Total number
of shares Capital, % Votes,%
1–500 4,422 54.1 700,382 0.4 0.3 501–1,000 1,458 17.9 1,124,454 0.7 0.4 1,001–5,000 1,682 20.6 3,845,862 2.3 1.4 5,001–10,000 256 3.1 1,905,597 1.2 0.7 10,001–100,000 267 3.3 7,828,951 4.7 2.9 100,001– 85 1.0 150,991,606 90.7 94.3 Total 8,170 100.0 166,396,852 100.0 100.0
Market share, trading in preference share, % Carnegie 28,2 Avanza 26,4 SEB Enskilda 11,6 Nordnet 7,5 Swedbank 6,9 Erik Penser Bank 6,5 Remium 3,1 Danske Bank 2,8 Svenska Handelsbanken 2,5 Crédit Agricole Cheuvreuz Nordic 2,2 Other 2,2
Market share, trading in ordinary share, % Swedbank 18,2 SEB 15,8 Avanza 11,8 Nordnet 6,8 Carnegie Investment Bank 5,9 ABG Sundal Collier Norge 5,6 Svenska Handelsbanken 4,9 Morgan Stanley & Co. International Ltd. 3,5 Deutsche Bank AG 3,3 Goldman Sachs International 3,1 Other 21,1 100 80 60 40 20
Development of long-term net asset value (EPRA NAV)
2008 2009 2010 2011 2012
Share price/long-term net asset value
% 50 40 30 20 10 0 Kr
Long-term net asset value (EPRA NAV) 2005 2006 2007 2008 2009 2010 2011
Development of long-term net asset value (EPRA NAV)
FASTIGHETS AB BALDER ANNuAL REpORT 2011 11 ownership list as of 31 december 2011
Owner A shares B shares Preference shares Total number of shares Capital, % Votes, %
Erik Selin Fastigheter AB 8,298,594 57,207,798 — 65,506,392 39.4 52.4
Arvid Svensson Invest AB 2,915,892 13,542,540 — 16,458,432 9.9 16.0
Länsförsäkringar Fondförvaltning AB — 15,230,155 — 15,230,155 9.2 5.7
Swedbank Robur Fonder — 6,985,829 121,250 7,107,079 4.3 2.7
Handelsbanken Fonder — 5,748,453 — 5,748,453 3.5 2.2 Lannebo Fonder — 4,733,000 — 4,733,000 2.8 1.8 Andra AP-fonden — 4,470,356 27,155 4,497,511 2.7 1.7 Rasjö, Staffan — 2,067,587 — 2,067,587 1.2 0.8 Kjellberg, Göran — 1,875,000 8,000 1,883,000 1.1 0.7 Livförsäkrings AB Skandia 7,398 1,857,708 — 1,865,106 1.1 0.7 Other 7,548 34,589,394 3,843,595 38,440,537 23.1 14.2
Total outstanding shares 11,229,432 148,307,820 4,000,000 163,537,252 98.3 98.9
Repurchased own shares — 2,859,600 — 2,859,600 1.7 1.1
Total registered shares 11,229,432 151,167,420 4,000,000 166,396,852 100.0 100.0
Inom Vallgraven 36:4, Gothenburg
Analyst following Balder
Albin Sandberg, Handelsbanken Andreas Daag, Swedbank Bengt Claesson, SEB Catrin Jansson, Nordea Johan Edberg, Erik penser Bank Tobias kaj, Carnegie
dividend policy ordinary shareholders
Balder’s Board of Director has proposed to the Annual General Meeting that no divi-dend should be declared for 2011. Balder estimates that the best total yield for the ordinary shareholders will be achieved by the dividend remaining low or not decla-ring a dividend at all in the next few years. Balder will instead continue to grow by investing in new acquisitions and in existing properties.
Our customers
B
alder has its own employees who to a large extent perform the work in and around the properties. A customer survey was carried out during 2011 in order to measure customer satisfaction. Balder’s ambition is to have satisfied custo-mers and that the premises and residential properties should meet customer needs. ManagementBalder has its own management organisation which offers benefits such a short decision-making procedures, proximity to the customer and the possibility of wor-king target-oriented and on a long-term basis with property management.
The development of Balder’s properties takes place in conjunction with the custo-mers, based on their needs and wishes. Balder shall offer a large choice of premises and housing in different locations at various rental levels. In this way, Balder will be a natural partner for customers even when their needs change
Satisfied customers
Customer relationships are crucial for success and the work on ensuring that custo-mers are satisfied is an important aspect of our business.
Balder has therefore carried out its first external customer survey which will be a recurring survey going forward. A large selection of Balder’s residential and commer-cial clients were included. The survey showed that Balder obtained good marks, in line with other private landlords nationwide. The survey sheds light on the custo-mers’ perception of Balder and how different areas are handled, for example service, the residential property/premises, environment and information etc. The majority of the customers thought that Balder meets or exceeds expectations when it comes to “getting help when it is needed”.
Customer service
Balder’s customer service has direct contact with managers and caretakers who in turn are based locally and have knowledge about the customers. The customers’ views and reports of defects are two important parameters in our daily work and in improvement of our customer service efforts.
In order to facilitate and streamline this work, a new system for reporting defects will enter into operation during 2012. A new home page will also be launched.
Commitment, proximity and understanding are the
three most important aspects of customer service from
Balder’s perspective.
Balder’s ten largest customers
On 31 December 2011
• The Swedish National Courts Administration
• G4S Cash Services • ICA Sverige • Järfälla Municipality • Nordea Bank
• Proximion Fiber Systems • Rasta Group
• Stureplansgruppen • Veidekke Bostad
FASTIGHETS AB BALDER ANNuAL REpORT 2011 13 Lease structure 31 december 2011
Maturity date
Number of
leases Share, %
Contracted
leases, SEKm Share, %
2012 538 26 78 5 2013 554 27 171 11 2014 486 24 220 14 2015 296 15 151 10 2016– 162 8 227 15 Total 2,036 100 848 55 Residential 1) 9,803 — 639 42 Carpark 1) 2,997 — 10 1 Garage 1) 3,101 — 34 2 Total 17,937 — 1,531 100
1) Normally runs subject to a period of notice of three months.
Customer service www.balder.se +46 774-49 49 49 [email protected] Letting www.balder.se +46 20-151 151 [email protected] Lease structure
Balder considers that the risk of a sudden deterioration in rental income is low. This is due to the lease structure with a good division between commercial properties and residential properties and the geographical spread. In order to counter reduced rental income and a weaker occupancy rate, the company strives to create long-term relationships with its existing customers.
Balder’s 10 largest leases represent 7.4 per cent (5.8) of the total rental income and their average lease term amounts to 11.0 (5.3) years. No individual lease accounts for more than 1.9 per cent (1.0) of Balder’s total rental income and no indi -vidual customer accounts for more than 3.3 per cent (1.2) of the total rental income. The average lease term for the entire commercial portfolio amounted to 4.3 years (3.4).
The lease structure on 31 December 2011 is shown in the table, in which leases terminated on this date, where removal will or is expected to take place, are recogni-sed as leases with maturity within one year.
As a landlord, we meet many people from different sectors which is an exciting and fun challenge.
At Balder, we work to satisfy each customer’s unique needs for premises and residential properties.
We aim to do our best to create a long-term relationship and to ensure that all par-ties are satisfied.
Our ambition is to support the customer and offer suggestions and advice during the entire letting process, even if they will not become a tenant of ours we want to be help-ful and serve as a usehelp-ful sounding board.
The close cooperation with our colleagues creates very good cohesion and means that we can swiftly provide feedback, be flexible and offer the customer a tailored solution.
Naturally, everything is possible!
pernilla Trygg och Eva Jakobsson, Renter Gothenburg
Organisation and
employees
Balder has a good combination of younger and older employees, where
new ideas are mixed with solid experience.
alder has a flat organisation with short decision-making procedures that enable swift action, irrespective of whether it relates to property transactions or solving problems for a customer. In order to support the management, there are group-wide resources/functions, all located at the head office in Gothen-burg. At year-end, 37 people (26) worked within these functions.
North region Gothenburg/
West region Öresundregion regionEast Stockholm
region
CEO
Economy/Finance managementProperty developmentBusiness IT/Administration Operations & environment Management Property caretaking Letting Region Property management organisation
The property management organisation is divided geographically into the regions Stockholm, Gothenburg/West, Öresund, East and North. Each regional organisation follows the same basic principles but differs depending on the size and property holdings of each region. Each region has a number of local offices which are respon-sible for letting, operations as well as environment and management. All property management is conducted with own personnel in order to be close to the customers and swiftly meet their expectations and demands according to Balder’s manage-ment vision. At year-end, 171 (166) people worked within the property managemanage-ment organisation.
FASTIGHETS AB BALDER ANNuAL REpORT 2011 15 Property management group
In order to boost proximity between the regions and create a uniform structure, the company established a property management group in 2012. Its main task is to create uniformity within the company by drawing up and developing common routi-nes. The work shall promote cooperation between local offices and boost proximity to the head office. Responsibility areas within both residential and commercial are part of the property management group. The group supports the local offices and draws up prioritised focus areas for each local office.
Employees
At Balder, competence and personal qualities are the most important selection cri-teria during recruitment. The company wants to utilise the qualities that diversity and an even gender distribution bring to the operations. Balder has a good combina-tion of younger and older employees, where new ideas are mixed with solid expe-rience. The company had 208 employees (192) on 31 December, of which 36 per cent (31) were women.
Corporate culture
Balder’s employees are characterised by having their own strong drive to develop in their work and an interest in working in an organisation which has a strong entrepre-neurial spirit. Good opportunities exist within the company for employees to seek new challenges, including through skills development. Balder creates work satisfac-tion by allowing employees to participate in development of their duties and the general sense of well-being at the workplace.
Healthcare
To prevent illness and maintain a continued low rate of absence due to illness, employees are offered an allowance for keep-fit activities as well as group insurance on favourable terms.
Gender distribution per age group
–29 year 60 45 30 15 0 Number 30–39 year 50 year– Women Men 40–49 year Economy/ Administration/ Finance, 18 Property management, 34 Property caretaking, 48
Balder’s employees per working area, %
Administration/
Ledning, 18 Fastighetsskötsel, 49 Förvaltning, 34
Balders personal per arbetsområde, %
The property management group was appointed during 2012 and consists of six persons.
At the top, from the left:
Niklas Dabrowski, property manager, resi-dential
Sharam Rahi, head of property manage-ment and Vice CEO
Soula Lundin, management controller, com-mercial
At the bottom from the left:
Anna Rudhag, property developer Stefan Gustafsson, property manager, com-mercial
Helena Axelsson, management controller, residential
Environment
alder’s environmental work continued to be concentrated in three main tracks including energy monitoring, energy projects and waste manage-ment.
Energy monitoring of all properties
Balder uses a reporting system where consumption per month and per property is entered for monitoring and control of energy consumption. Gathering all the pro-perties’ consumption in one energy monitoring system, enables Balder to monitor and maximise operational optimisation. An energy controller has been employed in order to further improve the monitoring.
Wind turbines
During the year, Balder continued its investment in renewable energy when a pre-vious associated company became a wholly-owned subsidiary. This meant that the group at year-end, owned a total of 10 (8) wind turbines with a production capacity of about 25 GWh. The group’s total electricity consumption amounts to 50 GWh. Energy projects
Renewable energy delivers a better environment and lower heating costs in our pro-perties. In view of this, Balder has completed a large number of heat pump projects across the country with up 60 per cent energy saving.
Another important energy-saving measure completed during 2011 is that the properties which have the same make for control technology have all been connec-ted to a web portal. This provides access to the technical installations and in this way operational optimisation can occur remotely.
A pilot project with individual measurement of hot and cold water in each
apart-ment was carried out in 392 apartapart-ments in Botkyrka towards the end of 2011. Simi
-lar projects may be implemented in other areas with high water consumption. Waste
In order to reduce the quantity of waste from our customer’s activities, training and information has been offered to boost interest concerning environmental impacts.
Supported by the company’s environmental policy, Balder is working to reduce
the environmental impact of its day-to-day operations and management work.
FASTIGHETS AB BALDER ANNuAL REpORT 2011 17 Rosen 9, Malmö
From sugar mill to restaurant and hotel
Södra Hamngatan 2
1747
1879
1813
The palace house was originally construc-ted as a sugar mill. The front of the sugar mill faced towards Norra Hamngatan, where a wooden bridge led to. The property was damaged by fire in 1792 and in 1813 but was rebuilt subsequently. When the canals towards Södra Hamngatan were fil-led in again in 1861, the front of the buil-ding turned in this direction.Sugar production was conducted until the 1840s when the building and converted into a residential property.
From War office to housing
In the early 19th century, the property was acquired by the war office which used parts of the premises for sugar production until 1841, when the banker and businessman Eduard Magnus purchased the building and Building in the harbour canal
Gothenburg was one of Europe’s most heavily fortified cities during the 17th and 18th centu-ries and the city was surrounded by ramparts and moats. With the canal as an important transport route the area has always been the centre of extensive trading activity.
“The palace house” (palacehuset) was designed in 1747 by superintendent Carl Hårleman, who also created the East India building. It was situated at Brunnsparken and built on walls in the large harbour canal. The original construction consisted of a central building towards Södra Hamn-gatan and two wings around a courtyard. The property was inaugurated on 14 May 1751.
Sugar mill
converted it to a four-family house of 6,000 square metres. The family’s daughter Göthilda inherited the house after her parent’s death in 1879. Her future husband pontus Fürstenberg moved into the palace which was then converted into a house for one family.
Modern
The first electric ceiling lamp in Gothenburg was in the house and the first long-distance telephone call was made from this property during the era of the Fürstenberg couple. Abundant art
The couple let a number of young artists stay in the house and as payment for food and lodgings they had to decorate the house. After some time, the house could
FASTIGHETS AB BALDER ANNuAL REpORT 2011 19
From sugar mill to restaurant and hotel
Södra Hamngatan 2
1879
Property factsAddress
Södra Hamngatan 22 at Brunnspar-ken, Gothenburg Property name Inom Vallgraven 14:1 Year of construction 1749, inaugurated on 14 May 1751 Architect Carl Hårleman
1885
2010
not accommodate all the art and thereforethey built another floor which was finished in 1885, which is today known as the Für-stenberg gallery. The FürFür-stenberg gallery in the west wing is the most famous part of the house. One of the largest private art collections in the Nordic region was dis-played here in the 19th century. The gallery is decorated with wine walls, brown lilac ceiling and beige stucco. A pair of high mirror doors remain in the gallery after the art collection left the building, painted by Carl Larsson’s students from Valand art college.
The property and art collection were bequeathed after the couple’s death in 1902 to Gothenburg municipality, which in 1922 opened a replica of the Fürstenberg gallery in the art museum at Götaplatsen. Palatial bank building to hotel
In 1905 the building was sold to Robert kjellström. The following year, the palace was converted to a hotel, whose proposed name was Tre kronor. At the last minute, prior to the inauguration, it was renamed as the palace Hotel, as the first name was not perceived to be sufficiently internatio-nal. The palace now became the foremost hotel in Gothenburg.
During the1970s, parts of the property were transformed into a palatial bank buil-ding. In the early 1990s, these areas were converted into a restaurant premises. In 1995, the Fürstenberg gallery was reno-vated and reopened in the palace house and since then it has functioned as a venue for parties and conferences.
Fastighets AB Balder acquired the pro-perty in 2010.
Market
he upturn in the Swedish economy has ended and the recovery is taking a breather. Despite strong public finances and an expansive financial policy, worries regarding the European budgetary crisis, uncertainty about the Euro-pean banking system and a weaker development in the US have grown too strong for Sweden to withstand. A deterioration in external developments, particularly in the euro zone, means that Swedish exports are being hit by lower demand.
Sweden is once again in need of stimulus from a more expansive monetary and financial policy. In the prevailing uncertainty, capital is fleeing to secure investments where direct investments in real estate are an alternative. The Riksbank and the Swedish Government have created the basis for strong growth through low base rates of interest combined with tax relief and investments in social functions. GDP increased by 4.5 per cent during 2011 and the Riksbank’s forecast for 2012 is that growth will fall to 0.7 per cent. Caution among households and companies has meant that household saving has increased and is expected to remain high, while companies are expected to defer investments.
Against the backdrop of lower inflationary pressure and a weaker economic per-formance, the Riksbank decided in February 2012 to cut the repo rate to 1.5 per cent. According to the Riksbank’s forecast in March 2012, the repo rate will remain around 1.5 per cent some way into 2013. This is slightly higher than the expectations announced by participants in the money market.
The poorer economic outlook is also gradually affecting developments in the Swedish labour market. In 2011, employment increased and unemployment fell, but it is now becoming increasingly apparent that the improvement is over. Unemploy-ment at the end of 2011 amounted to 7.5 per cent and according to the forecast will also remain at this level during 2012 and 2013, to then fall during 2014.
The property market
However, house prices remain at a high level in relation to a historic trend and with a weak development in house prices in the past year, household concerns about a steeper fall in prices may have intensified, which may explain the reduced consump-tion and increased saving. The forecast for household consumpconsump-tion has been revised downwards significantly and despite a relatively strong increase in disposable income, consumption is only expected to increase by 2.6 per cent during 2012. Natu-rally, the longer uncertainty about budgetary issues in Southern Europe persists, the greater the risk that problems will spread to the banking system which contains large quantities government bonds, which would have serious repercussions for the
Lower expectations but still a good and stable
year for property companies.
FASTIGHETS AB BALDER ANNuAL REpORT 2011 21 Resource: NAI SVEFA
supply of credit in Europe. The Swedish banks are well capitalized at present in an international perspective and their direct exposure to the problem countries in Europe is extremely limited.
A volatile stock market combined with risks of an instable international financial market, suggests that capital will increasingly seek alternative investments and the-refore the property market and direct investments in real estate are becoming a more interesting alternative. During the past five-year period, a direct investment in Swedish residential apartment buildings has delivered a total yield of about 9.6 per cent according to the IPD/SFI Swedish Property Index which may be compared with the return from the stock exchange which amounted to 14.4 per cent during the same period.
The strong Swedish growth and increased employment during the first half of the year has had a positive effect on the property market, firstly in the form of an increased willingness to invest, and secondly in the form of an improved rental market for premises. The investment interest is most visible in the residential and commercial segments. Several transactions involving shopping centres were com-pleted during 2011 and investment interest has been shown in low yield require-ments in the segment and each sub-market for insolvency packages and develop-ment gallerias as well as modern shopping centres. Large net purchasers during the year haven been funds and institutions and newly established property companies with various ownership structures which showed interest in allocating more capital to the property segment.
The Swedish property companies have a good starting position. With record results for the 2010 financial year, many of the Swedish property companies are solid enough to make additional investments. If property companies choose to rein-vest capital in the operations through property acquisitions or new construction projects, 2012 can offer large investments in each company’s prioritised markets.
The market’s estimate for commercial premises has gone from unanimous expec-tations about rising rents for shops and offices in strong sub-markets in spring to expectations of unchanged rents in our regional cities to a possible slight rise in rents in our large cities. In Stockholm’s best locations, the market rent for modern offices is expected to amount to about SEK 4,300/sq.m. In Gothenburg, the market rent for such offices varies in the range SEK 1,600–2,400/sq.m. and in Malmö in the range of SEK 1,550–2,350/sq.m.
In smaller markets, where the addition of new premises is normally relatively limi-ted, there are small fluctuations in the rental market. Vacancy rates usually vary to the greatest extent, while rental levels, calculated in Kronor per square metre, are normally relatively stable. In the event of a protracted economic downturn, we will probably see vacancies increase in the commercial segment.
According to information from Jones Lang LaSalle the total transaction volume for properties during 2011 amounted to SEK 105 billion. This is a decrease of about five per cent compared to the previous year. Transactions involving foreign participants have also decreased, from SEK 45 billion to about SEK 35 billion. Above all, transac-tion volume decreased during the final quarter of 2011. The reason for this is that the property actors have become more cautious in view of the external develop-ments and the fact that financing possibilities have deteriorated.
In 2011, a large part of the transaction volume came from insolvent properties and larger property holdings under liquidation. When it comes to residential proper-ties, tenant-owner’s associations are still the buyers in attractive locations. At the end of 2011, there were about 22,000 active registered tenant-owner’s associations.
On 31 December, Balder owned 433 properties (432) with a lettable area of 1,408,000 sq.m. (1,322,000) and a value of SEK 17.6 billion (14.4).
Balder’s total rental value amounted to SEK 1,638m (1,437) at year-end, an increase of 14 percent.
Investments
Real estate investments amounted to SEK 3,859m (995) during the year, of which SEK 3,640m (835) related to property acquisitions and SEK 219m (160) related to investments in existing properties.
Of the total investments, SEK 1,097m (106) related to Stockholm, SEK 1,614m (352) to Gothenburg/West, SEK 1,107m (512) to Öresund, SEK 25m (15) to East, and SEK 16m (11) to North.
The change in the real estate portfolio during the financial year may be seen in the following table.
Balder’s commercial properties are located in the centre and immediate suburbs of big cities and surrounding municipal areas. Balder’s residential properties are located in places experiencing a favourable population growth and that are develo-ping positively. Our ambition is to continue to acquire properties in selected mar-kets.
Property portfolio Balder has 433 properties
Commercial properties Residential properties Sundsvall Gävle Stockholm Norrköping Köping Karlstad Mariestad Jönköping Gothenburg Halmstad Helsingborg Malmö Åstorp Gotland Tranås Lund Skara, Skövde, Falköping, Tidaholm
Balder’s real estate portfolio
Occupancy rate 2006–2011 2006 2007 2008 2009 2010 100 95 90 85 80 % 2011 Group, SEKm 2011 2010 Rental income 1,466 1,333 Property costs –471 –454 Net operating income 996 880 Changes in value of investment properties, realised 12 20 Changes in value of investment properties, unrealised 978 1,027 2011 2010Carrying amount
pro-perties, SEKm 17,556 14,389 Number of properties 433 432 Lettable area, sq.m.
thousands 1,408 1,322
Number of employees 208 192
For more information see the property list on pages 90–96.
FASTIGHETS AB BALDER ANNuAL REpORT 2011 23 Acquired properties Lettable area, sq.m Stockrosen 3 6,082 Stockrosen 10 1,761 Stockrosen 6 2,015 Olskroken 10:5 4,511 Olskroken 25:11 2,261 Inom Vallgraven 36:4 16,730 Inom Vallgraven 33:7 3,731 Inom Vallgraven 58:6 4,793 Ventrupparken 6 4,723 Catena 25 fastigheter 152,390 Katthavet 8 8,022 Högsbo 1:1 15,251 Kvasten 8 2,018 Gårda 15:12 8,459 del av Järnplåten 23 1,520 von Conow 54 20,927 Lorensberg 46:6 1,176 Total acquired 256,370 Sold properties Lettable area, sq.m Dygden 6 614 Pan 1 1,692 Åkerslätt 2 1,002 Lilla Björn 10 240 Älgen 7 1,487 Täppan 22 294 Sänket 9 353 Sänket 6 575 Nedre Skansen 1 328 Lästen 2 3,510 Plankan 12 479 Niten 6 4,058 Kålltorp 43:7 1,064 Catena 25 fastigheter 152,390 Kastet 6:4 216 Total sold 168,302
Carrying amount by region, % Carrying amount by property category, %
handel lag/ind Stockholm, 33 North, 7 East, 10 Öresund, 16 Gothenburg/West, 34 Residential, 43 Office, 34 Other, 5 Commersial, 18
Carrying amount by region, % Carrying amount by property category, %
handel lag/ind Stockholm, 33 North, 7 East, 10 Öresund, 16 Gothenburg/West, 34 Residential, 43 Office, 34 Other, 5 Commersial, 18
Change in carrying amounts of properties
2011 2010
SEKm Number SEKm Number
Real estate portfolio, 1 January 14,389 432 12,669 419
Investments in existing properties 219 — 160 —
Acquisitions 3,640 40 835 31
Sales –1,683 –39 –322 –18
Changes in value of investment properties 990 — 1,047 — Real estate portfolio, 31 december 17,556 433 14,389 432
Balder’s real estate portfolio as of 31-12-2011 1)
Number of properties Lettable area, sq.m. Rental value, SEKm 1)) Rental value, SEK/sq.m. 1)) Rental income , SEKm 1)) Economic occupancy rate, % Carrying amount, SEKm
distributed per region
Stockholm 55 375,394 516 1,376 474 92 5,866 Gothenburg/ West 183 484,010 552 1,141 525 95 5,913 Öresund 54 196,660 254 1,292 233 92 2,792 East 58 197,582 176 890 166 95 1,695 North 83 154,491 139 900 133 95 1,290 Total 433 1,408,137 1,638 1,163 1,531 94 17,556
distributed by property category
Residential 301 788,507 737 934 707 96 7,523
Office 65 376,481 554 1,472 490 89 5,945
Commercial 34 148,732 248 1,667 238 96 3,075
Other 33 94,417 99 1,046 95 97 1,012
Total 433 1,408,137 1,638 1,163 1,531 94 17,556
1) The above table refers to the properties owned by Balder at the end of the period. Sold properties have been excluded and acquired properties have been estimated using full-year values. Other properties include hotel, educational, nursing, industrial and mixed-use properties.
According to measurements carried out by the Stockholm Chamber of Commerce, the business sector in Stockholm has coped better than the country generally during the economic slowdown which has affected Sweden. This is explained by the indu-strial structure in Stockholm with a mix of different sectors, institutions and admi-nistrative departments, a large proportion of goods and services for export and a stable economic framework.
Greater Stockholm may be divided into three areas: the inner city as well as the north and south of it. In the south, there are mainly distribution and manufacturing companies while in the north there is a larger share of companies that produce ser-vices.
Stockholm county’s population is continually increasing. In early 2011, the number of inhabitants amounted to about 2,090,000. By 2020, the number is expected to have risen by about 15 per cent to 2,400,000. During the same period, the need for newly produced housing is expected to be 125,000 units.
Due to the fact that the construction of housing was not in balance with the population growth during the past two decades, a large housing shortage prevails throughout Stockholm county. Most of the current planning work for housing is taking place in Hägersten, Liljeholmen and Bromma. In total, about 9,000 housing units are expected to be completed during 2012 according to the Swedish National Board of Housing, Building and Planning.
The main project underway on the commercial side is the Arenastaden area in Solna. A new urban district will be created featuring an events arena, offices, shop-ping centre, residential properties and hotels. The new Karolinska Hospital and the new headquarters of the Swedish Security Service are part of this large construc-tion project.
One of Sweden’s absolutely largest infrastructural projects is the planned
Stockholm region
For more information see the property list for the Stockholm region on page 90.
Stockholm region
SEKm 2011 2010
Rental income 460 425
Property costs –135 –137 Net operating income 325 288
2011 2010 Carrying amount properties,SEKm 5,866 4,895 Number of properties 55 53 Lettable area, sq.m. thousands 375 365 Number of employees 40 37
FASTIGHETS AB BAldEr AnnuAl rEporT 2011 25 Stockholm bypass. Traffic routes shall connect the northern and southern parts of
the county to central Stockholm. The largest stretch will go under Stockholm via a planned tunnel of 17 km, which in such case will be the world’s longest tunnel in an urban environment.
The transaction side for commercial properties includes a large number of trans-actions. AMF Fastigheter, in two separate transactions purchased three inner city centres and Skandia’s headquarters for an estimated total purchase price of around SEK 5 billion. On the residential side, there were mainly conversions from rights of tenancy to tenant-ownership. Over the past ten years, about 110,000 right of tenancy apartments have been converted to tenant-ownership in Stockholm county.
Real estate portfolio
31 December 2011 Number of properties Lettable area, sq.m. Rental value SEKm 1) Rental value SEK/sq.m.1) Rental income SEKm 1) Economic occupancy rate, % Carrying amount, SEKm Commercial 41 238,056 368 1,547 328 89 4,049 Residential 14 137,338 148 1,078 146 99 1,817 Total 55 375,394 516 1,376 474 92 5,866
1) Refers to full year.
Balder’s real estate portfolio in the Stockholm region consists of 55 properties (53) with a total area of 375,000 sq.m (365,000) and a fair value of SEK 5,866m (4,895). The value of properties in Stockholm’s inner city amounts to about SEK 1,900m, which cor-responds to 46 per cent of the total value of the commercial properties in the region. Residential
Residential properties in the region are mainly concentrated in Botkyrka, Huddinge, Uppsala and Nynäshamn. There are also a number of properties in central Stock-holm as well as in Hammarbyhöjden, Bromma and Älta.
One of the largest ventures in the Stockholm region has been a development pro-ject relating to Vårby Gård and Vårby Gårds Centrum. Balder has taken the initiative Kvasten 8, Stockholm
SToCKHolM rEGIon
together with Huddinge municipality to draw up a programme to boost the secu-rity, growth and attractiveness of the area. The work has been very successful to date and in particular the tenant survey carried out by an external company shows that the customers’ perception of the development work is very positive.
A similar project in partnership with the municiality has also been underway in Nynäshamn during the year. Apart from the results achieved in Huddinge, we also managed to sharply reduce the moving rate.
Due to the prevailing housing situation in Greater Stockholm, the vacancy rate in the real estate portfolio in the region is very low.
A total of 1,590 apartments are part of the portfolio in the region. Commercial
Most of the commercial real estate portfolio is found in Stockholm inner city and also in Solna, Sundbyberg, Ulvsunda and Kista north of the centre and in Västberga, Farsta, Nacka and Skarpnäck south of the centre.
Demand for premises of 200–500 sq.m. was strong in both the city and around the city. For premises of about 1,000 sq.m. or more, there is less demand and custo-mers often remain in their existing leases in view of the costs and practicalities imp-lied by a move.
In Västberga, there has been strong demand for premises and the objective is to let all premises during 2012.
In the properties, Sicklaön 354:1, Ektorp Centrum and Kilaberg 1, Hägersten, where vacant areas arose during the year, discussions are ongoing with various interested parties as regards project development where office space can be converted to other types of premises.
Two properties were acquired during the year. The property Kvasten 8 on Norr-landsgatan in central Stockholm has a total of 4,000 sq.m. and is owned together with the Swedish Parliament. The property Katthavet 8 with 8,000 sq.m. also inclu-des the distinguished palatial entertainment building Berns. Both of the properties are located a short distance from Norrmalmstorg. In addition, a further part of the property Järnplåten 23 on Kungsgatan in Stockholm was acquired and the participa-ting interest at year-end amounted to 82 per cent of the total property.
FASTIGHETS AB BAldEr AnnuAl rEporT 2011 27 Gothenburg is Sweden’s second largest and the Nordic region’s fifth largest
popula-tion centre with around 550,000 inhabitants and over 930,000 in Greater Gothen-burg.
Gothenburg has a central location and well developed infrastructure including airports, port and European routes. Gothenburg has been named by the Intelligent Logistics newspaper as the best logistics location in Sweden for the past eight years.
The automotive industry is dominated by AB Volvo, one of the world’s leading manufacturers of vehicles and construction machinery and Volvo Car Corporation. The bankruptcy of SAAB Automobile is a tough blow for entire “three-city region” (Trollhättan, Vänersborg, Uddevalla). For Balder, the bankruptcy has not had any direct rental effects as SAAB Automobile was not a customer previously in any of Balder’s properties in the three-city region.
During the period 2006-2010, around 1,900 housing units were completed per year in Gothenburg. The objective for the coming five-year period is 2,400 housing units per year. Ongoing housing construction is taking place in the districts of Kvil-lebäcken at Backaplan and in Järnbrott beside Frölunda Torg. During the past ten years, about 20,000 right of tenancy apartments were converted to tenant-owner apartments in Västra Götaland county.
Apart from Balder, Wallenstam and Hemfosa have made large acquisitions in the Gothenburg region.
Ongoing construction projects in Gothenburg include about 14,000 sq.m. office space beside Gamla Ullevi and three large hotel projects, at Drottningtorget, Svenska Mässan and at Älvstranden. The projects involve about 1,250 new hotel rooms in total.
Gothenburg/West region
For more information see the property list for the Gothenburg/West region on pages 91–93.
Gothenburg/West region
SEKm 2011 2010
Rental income 504 438
Property costs –156 –143
Net operating income 348 295
2011 2010 Carrying amount properties,SEKm 5,913 4,556 Number of properties 183 176 Lettable area, sq.m. thousands 484 426 Number of employees 66 58
GoTHEnBurG/WEST rEGIon
Real estate portfolio
31 December 2011 Number of properties Lettable area, sq.m. Rental value SEKm 1) Rental value SEK/sq.m.1) Rental income SEKm 1) Economic occupancy rate, % Carrying amount, SEKm Commercial 65 267,207 363 1,657 344 95 4,077 Residential 118 216,803 190 875 181 95 1,836 Total 183 484,010 552 1,141 525 95 5,913
1) Refers to full year.
Gothenburg/West region includes three administrative districts. Greater Gothen-burg includes GothenGothen-burg with 12 adjoining municipalities as well as the three-city region. Falköping also include Skara and Tidaholm while Skövde also includes Marie-stad.
Balder’s real estate portfolio in the Gothenburg/West region consists of 183 pro-perties (176) with a total area of 484,000 sq.m.(426,000) and a fair value of SEK 5,913m (4,556). The value of properties in Gothenburg inner city amounts to SEK 2,200m, which is equivalent to 54 per cent of the total value of the commercial pro-perties in the region.
Residential
Residential properties in the region are mainly concentrated in Gothenburg, Alingsås, Falköping and Skövde. The holdings in Alingsås are concentrated in the Bolltorp and Stadsskogen districts. In Skövde, they are concentrated in the Södra Ryd district while residential properties in Gothenburg are found in Kålltorp, Hisingen and in Järnbrott.
In 2011, a property was acquired with a lettable area of 8,500 sq.m. in Gårda, Gothenburg. The property mainly contains student housing but also shops and offi-ces.
FASTIGHETS AB BAldEr AnnuAl rEporT 2011 29 In Skövde, a project has been underway during the year to convert student rooms
to larger apartments. In connection with this, the new apartments have also recei-ved standard improvements.
A residential property in Gothenburg was sold to a tenant-owner’s association during the year.
A total of 3,404 apartments are part of the real estate portfolio in the region. In January 2012, six residential properties were acquired in Hisingen in Gothen-burg. Overall, they involve a lettable area of about 45,000 sq.m. and 600 apart-ments.
Commercial
The commercial real estate portfolio is mainly located in Greater Gothenburg. In Gothenburg, there are 18 properties in the city centre, Inom Vallgraven and along Avenyn. Other areas are Gårda, Mölndal, Högsbo and Sisjön.
During the year, three office properties were acquired in Mölndal and five office properties were acquired in central Gothenburg from GE Real Estate.
In Kungälv, Ale and Trollhättan, Balder mainly owns commercial properties in local shopping centres. The ongoing infrastructural project BanaVäg West means the extension of a double track railway and a motorway between Gothenburg and Troll-hättan. Among other things, a new commuter station is being built in Nödinge, which means better communications and accessibility to Balder’s property Nödinge 38:14 at Ale Torg.
In Trollhättan, the Oden shopping centre has undergone a major renovation. This includes new commercial space and new property technology such as ventilation and lifts.
Three properties located in Trollhättan, Falkenberg and Borås were sold during the year. As a result, Balder no longer owns any property in Borås.
Around 3.8 million people live in the Öresund region, which includes Skåne and Själ-land in Denmark. Malmö together with Helsingborg and Lund constitute the hub among the Swedish cities in the region. On the Danish side, the hub is Greater Copenhagen which dominates the business community, housing and development with its 1,375,000 inhabitants. The Öresund region with its strategic location, good communications and bilateral labour market, has good prospects for very favourable growth in the coming years.
The development of the infrastructure is continuing in Malmö. After the comple-tion of the City tunnel, the construccomple-tion of the Malmö ring is now underway which shall improve communications in the city. New construction of mainly commercial premises is ongoing in Västra Hamnen, Dockan and Universitetsholmen and around the City tunnel’s central stations.
Helsingborg city will be changed through the H+ urban renewal project which will link together south Helsingborg with the centre. New housing and office properties will be built. New construction will also strengthen Helsingborg’s position within logistics and commerce, which are important business areas for the city.
The transaction level was low in Malmö during 2011. Among other things, Vasa-kronan acquired commercial properties in Västra Hamnen in two transactions.
Copenhagen, which is regarded as the capital of the Nordic region, offers a high standard of living with a favorable infrastructure and a good urban environment. The number of inhabitants in Copenhagen is expected to rise by 100,000 by 2025.
Denmark was sharply affected by the financial crisis in 2008. When the prices of housing and commercial properties fell, many of the banks’ highly leveraged custo-mers had problems, and therefore so did the banks. Financing solutions using pro-perty bonds and limited partnerships with generous tax effects have also enabled
Öresund region
Öresund region
SEKm 2011 2010
Rental income 210 177
Property costs –70 –52
Net operating income 141 125
2011 2010 Carrying amount properties,SEKm 2,792 2,127 Number of properties 54 52 Lettable area, sq.m. thousands 197 171 Number of employees 20 17
For more information see the property list for the Öresund region on page 94.
