Wihlborgs Fastigheter : Interim report Jan-March 2021

Wihlborgs'

Interim report

2021

January-March

STABILITY AND DEVELOPMENT AS FOUNDATIONS

Rental income amounted to SEK 738 million (781)

Operating surplus amounted to SEK 509 million (555)

Income from property management amounted to SEK 416 million (460)

Result for the period amounted to SEK 478 million (344), corresponding to earnings per share of SEK 3.11 (2.24)

EPRA NAV increased by 2 percent to SEK 155.59 (152.44)

January-March

2021

Group key figures, SEK m	2021	2020
	Jan-Mar	Jan-Mar
Rental income	738	781
Operating surplus	509	555
Income property management	416	460
Changes in value of properties	74	59
Changes in value of derivatives	97	-92
Result for the period	478	344
Earnings per share, SEK	3.11	2.24
Surplus ratio, %	69	71
Equity/assets ratio, %	41.5	38.3
Occupancy rate, %*	90	92
EPRA NRV per share, SEK	155.59	143.77

*) Excluding Projects & Land.

HETCH is a tech hub where start-ups,fast-growing technology companies and established companies can conduct research and development in shared premises. The company moved in to 2,000 m2 in Prisma (Ursula 1) in Helsingborg at the end of 2020 and the remaining 1,700 m2 will be occupied in January 2022.

Contents

CEO's comments	04
Market comments	05
Income, expenses and profit	06
Assets	08
Liabilities and equity	12
Financial reports	15
Key figures & definitions	21

Calendar

Interim report Jan-Jun	12 July 2021
Interim report Jan-Sep	22 October 2021
Year-end report 2021	15 February 2022

Wihlborgs' interim reports and the Annual Report are distributed­ electronically. The Annual Report is printed in Swedish and sent to any shareholders notifying the Company that they wish to receive it in printed form.

Financial targets

A return on equity that exceeds the riskfree interest rate by no less than six percentage points

An equity/assets ratio of no less than 30 percent

An interest coverage ratio of no less than 2.0

The loan-to-value ratio is not to exceed 60 percent

See page 19 for outcome

Development of share price

010119-310321

SEK	Number of traded shares, '000

250			25,000
200			20,000
150			15,000
100			10,000
50			5,000
0	Jan Feb Mar Apr May Jun	Jul Aug Sep Oct Nov Dec Jan Feb Mar	0
	2020	2021

Wihlborgs		Traded shares, no. per month
SX8600 OMX Stockholm Real Estate PI		Nasdaq Stockholm, Turquoise,
OMX Stockholm PI		Chi-X, Bats

This interim report is information of such a kind that
Wihlborgs Fastigheter­ AB (publ) is legally required to	CONTACTS
disclose pursuant to the EU's Market Abuse Regulation	Ulrika Hallengren, CEO. Phone: [phone]
and the Swedish Securities Market Act. The information	E-mail: [e-mail]
was submitted for publication through the agency of the	Arvid Liepe, CFO. Phone: [phone]
contact people below on 27 April 2021 at 07:30 CET.	E-mail: [e-mail]

Wihlborgs Fastigheter AB (publ) is a property company that focuses on commercial properties in the Öresund region.

Its property portfolio is located in Malmö, Lund, Helsingborg and Copenhagen. In Malmö, Lund and Helsingborg Wihlborgs is the leading property company. The book value for the Company's properties totals SEK 46.7 billion. The annual rental value of the properties is SEK 3.3 billion. Wihlborgs shares are quoted on the Large Cap List of Nasdaq Stockholm.

03

CEO's comments

The first quarter of 2021 was also impacted by the pandemic on a global level. However, in pace with vaccination efforts and with the aid of government support packag- es, expectations for a return to a more normal life and higher economic activity are rising. I do not wish to detract from the difficulties that have impacted some sectors, but I must nevertheless say that I am impressed by how many companies and organisations have been able to quickly adapt to the prevailing circumstances. Operations are being driven forward successfully thanks to significant creativity and effort, which forms the foundation for the many positive dialogues we are having with our customers today. We have also noted the positive rent trend in our portfolio - new leases are at highter rates than those terminated.

Significance and experience of the workplace

It is also through close dialogue that we, together with our tenants, tackle the issue of the needs of tomorrow. In light of this, we have conducted a survey where we leveraged AI to analyse people's expressed perceptions of compared with their behaviour in the current working conditions. The survey shows that people are torn. On the one hand, there is the perception that working remotely is working well on the whole, but on the other hand a change of behaviour displays concern for physical and mental ill health, isolation and an increased need for work-related confirmation. It is still too early to draw any conclusions about how working patterns will ultimately change, but we are convinced that all employers will need to adapt their offerings to their employees in order to attract and retain the best expertise. The experience and design of the office will form key elements in this offering.

Sustained work with property management and strategic investments for the future

Even though the decision-making process can currently take longer than usual, we are conducting many constructive talks with existing and potential tenants. It is gratifying that we can once again report positive net lettings this quarter, amounting SEK 9 million. It is our sustained work with property management that gives rise to more transactions, which combine to deliver these results. At a time when restaurants are struggling with various restrictions, it feels positive that we have now signed agreements with four restaurants that will open in the newly renovated Helsingborg Central Station after the summer. Their faith in the future bodes well in these times.

Developing the content of the property portfolio requires continuous efforts. In December 2020, we divested some 20 properties in Malmö with the intent of improving the overalll structure and quality. At the same time, the divestments also mean that we will experience a drop in income for the current year. We also took the opportunity in 2020 to wind up some leases to be able to develop the properties in the future. This was the case for Vätet 1 and Raffinaderiet 3 in Lund as well as Sparven 15, Slagthuset 1 and Börshuset 1 in Malmö among others. In the short term, this will lead to increased vacancies but it also enables us to improve content and quality as well as raise rent levels. In the Medeon area of Malmö, we are beginning to see the results of the boost we started a couple of years ago. We have constructed a new building here but also invested in existing buildings, and we are now signing extended agreements at higher rental levels. The journey has only just begun.

04

• Developing the content of the property portfolio requires continuous efforts."

Rental income for the quarter amounted to SEK 738 million and the operating surplus to SEK 509 million. The net effect of property transactions was SEK -24 million on income and SEK -16 million on the operating surplus. In addition, negative currency effects arose of SEK 8 million and SEK 5 million respectively. Overall, the results are in line with our expectations, but of course, we are not entirely unaffected by the economic downturn. Vacancies have increased somewhat over the past quarters, and it will take yet some time before they are expected to decrease once again.

During the quarter, tenants have continued to move in to Prisma (Ursula 1) in Helsingborg. We are extremely proud of the final product and are looking forward to tenants successively moving in during the year. Among our larger projects, I would also like to name Kranen 2 in Malmö, that following extensive renovation of a total of 17,000 m² in the autumn, will welcome operations from Malmö University and Region Skåne.

Development moving forward

When the economy picks up, we will be ready. In the past few years, we have built up a strong balance sheet and healthy liquidity. On back of this, we are now underway with the new construction of the office building in Kvartetten in Hyllie, Malmö. We are creating 16,000 m² of modern, efficient and sustainable offices in an area with ideal transportation links. For Kvartetten, our greatest focus is on developing a sustainable workplace, and it seems the building will achieve the highest environmental rating with WELL and "NollCO2" certifications.

We are also growing in Copenhagen, where we have

purchased an additional office building in Ballerup comprising just over 10,000 m². We now have a property portfolio totalling 636,000 m² in our Danish operations. Looking to the future, planning is ongoing for the Nyhamnen area in Malmö and Västerbro in Lund, and work at Science Village in Lund is also beginning to yield tangible results.

Naturally, there is an element of uncertainty in the current forecasts regarding when and at what pace the economic recovery will take place. However, when this does take place, we will be able to benefit from our strong market position, our exciting project portfolio and our access to stable, long-term financing. Following the pande- mic, we are convinced that the attractiveness and growth of the Öresund region will be even stronger than before.

Ulrika Hallengren, CEO

Market comments

The global economy has been significantly impacted by the pandemic, but the recovery is underway. Major support packages, increased vaccination and reduced infection over time will continue this recovery in 2021 and 2022.

The Nordic countries have recovered relatively quickly. Even if GDP still remains lower than prior to the crisis, the downturn is no longer as substantial. In the fourth quar- ter, GDP shrank 2.1 percent in Sweden and 2.6 percent in Denmark. In Sweden, investments in the fourth quarter were essentially in line with the year-earlier period, while investments in Denmark increased 3.1 percent. Sweden recorded strong exports in the fourth quarter and an increase of 1.2 percent. On the other hand, Denmark recorded a major reduction of 9.1 percent.

In Sweden, GDP fell 3.1 percent in 2020. Indicators point toward positive growth during the first quarter, and the recovery is continuing. GDP is expected to return to its pre-pandemic level by the third quarter of 2021. Growth is estimated to be 3.6 percent in 2021. The extensive support measures enabling the survival of many companies means that these companies are expected to grow relatively rapidly once restrictions ease. Exports provide a considerable boost and private consumption is expected to increase substantially toward the end of the second quarter. GDP in Denmark declined 3.3 percent in 2020 and growth of 3.1 percent is expected in 2021.

Forecasts believe a downside risk to be more likely than an upside risk according to the Swedish National Institute of Economic Research's March 2021 Swedish Economy report. Economic Sentiment in the Swedish economy is some-

what stronger than normal, which is mainly demonstrated by the Economic Sentiment Indicator in which results rose from 103.8 in February to 105.3 in March. However, this is uniquely the result of strong signals from the manufacturing industry. In other sectors such as construction, retail, service and households, sentiment is weaker than normal.

The transaction year began surprisingly strong in Sweden. According to Cushman & Wakefield, transaction volumes are expected to rise to SEK 39.6 billion for the first quarter of 2021, almost in line with the level of the year-earlier period. Housing and industry/logistics accounted for about 60 percent of the volume. These are also segments that have maintained strength during the pandemic.

International investors have traditionally shown considerable interest in Swedish office properties. These investors are now more cautious due to rising uncertainty regarding the demand and need for offices as result of the pandemic. With greater local knowledge, domestic investors are somewhat more optimistic given that the rental market remains relatively stable.

05