Adresses
Malmö - Head office Wihlborgs Fastigheter AB Box 97
201 20 Malmö Visitors: Dockplatsen 16 Tel.: +46 40 690 57 00 Fax: +46 40 690 57 01
Helsingborg
Wihlborgs Fastigheter AB Garnisonsgatan 25 A 254 66 Helsingborg Tel.: +46 42 490 46 00 Fax: +46 42 490 46 01
Lund
Wihlborgs Fastigheter AB Ideon Science Park Scheelevägen 17 223 70 Lund
Tel.: +46 46 286 85 00 Fax: +46 46 18 40 96
Danmark Wihlborgs A/S Ellekær 6, opgang C DK-2730 Herlev, Denmark
Tel.: +45 396 161 57 Fax: +45 396 161 58
www.wihlborgs.se info@wihlborgs.se Board registered office: Malmö Corporate identity number:
WiHLborgs FAstigHeter Ab -AnnuAL report 2008
J a n u a r y – D e c e m b e r
The Annual Report
2 0 0 8
W i h l b o r g s F a s t i g h e t e r A B
articles of association
Articles of Association of Wihlborgs Fastigheter AB (publ), Corporate Identity number: 556367-0230
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§ 1 Registered name of the Company is Wihlborgs Fastigheter AB, which is a public company (publ).
§ 2 The object of the Company’s operations is to acquire, manage, develop and sell properties, primarily in the Öresund region, and conduct associated operations.
§ 3 The registered office of the Board of Directors shall be Malmö, Sweden.
§ 4 The Company’s share capital shall amount to not less than SEK 155,000,000 kronor and not more than SEK 620,000,000 kronor.
§ 5 The number of share shall not be less than 15,500,000 and not more than 62,000,000.
§ 6 The Board of Directors shall consist of not fewer than four and not more than eight members.
§ 7 Of the Company’s auditors, at least the auditor and the deputy auditor must be Authorised Public Accountants. Instead of an auditor, the Annual General Meeting may elect one or two authorised accounting firms, whereby no deputy auditors need to be elected.
§ 8 The Company’s fiscal year shall consist of the calendar year.
§ 9 The Annual General Meeting shall be held in Malmö. The following items of business shall be addressed at the Annual General Meeting:
1. Election of Chairman of the Meeting.
2. Preparation and approval of the list of share- holders entitled to vote at the meeting.
3. Election for one or two minute-checkers.
4. Approval of the agenda.
5. Determination of whether the Meeting has been duly convened.
6. Presentation of the annual report and the auditors’ report an, if applicable, of the consoli- dated financial accounts.
7. Motions concerning
a) the adoption of the income statement and balance sheet and, if applicable, of the consoli- dated income statement and consolidated balance sheet.
b) the disposition to be made of the Company’s profits or losses as shown in
the balance sheet adopted by the Meeting.
c) the discharge of the members of the Board and
the Managing Director from personal liability.
d) the record date for the payment of dividends.
8. Resolution of the number of members of the Board and, where applicable, the number of auditors and deputy auditors.
9. Determination of the fees to be paid to the Board members and, where applicable, the auditors.
10. Election of the Board members.
11. When required, election of the auditors and deputy auditors.
12. Election of the Nomination committee.
13. Other business that must be addressed by the Meeting in accordance with the Annual Accounts Act or the Articles of Association.
§ 10 Notice of a General Meeting of Shareholders shall be made in the form of an advertisement in the Official Gazette (Post- och Inrikes Tidningar) and in Svenska Dagbladet and in Sydsvenska Dagbladet or in another daily newspaper published in Skåne.
If publication of Svenska Dagbladet ceases, notifica- tions will be effected through an announcement in the Swedish Official Gazette and Dagens Industri.
Notice of the Annual General Meeting and of Extraordinariy General Meetings convened to address amendments to the Articles of Association shall be issued not earlier than six weeks and not later than four weeks prior to the Meeting. Notice of other General Meetings shall be issued not earli
er than six weeks and not later than two weeks pri or to the Meeting.
§ 11 To be entitled to participate in the business of a General Meeting, shareholders must be included in the share register confirming conditions five days prior to the Meeting and must notify the Company of their intention to attend the Meeting and be accompanied by a maximum of two assistants not later than 4 p.m. on the day stipulated in the Notice of a General Meeting. This day must not be a Sunday, a public holiday, a Saturday, Midsummer’s Eve, Christmas Eve or New Year’s Eve and must not be more than the five weekdays before the Meeting.
§ 12 The company’s shares will be recorded in a control register pursuant to the Swedish Financial Instru- ments Act (1998:1479).
boLAgsorDning
81
in vi ta ti on
production: Wihlborgs in collaboration with Pennan AB, Lund 2009.
Photographs: Lars Strandberg, Joachim Karlsson, Johan Windh, Marcus Carlsson, Ola Hansson, Stefan Larsson och Martin Palvén. Print: Markaryds Grafiska AB.
MILJÖMÄRKT 341T RYC K S AK115
invitation to the Annual general Meeting
The Annual General Meeting of Wihlborgs Fastigheter AB (publ) will take place at 17 p.m.
on Thursday 23 April 2009 at Slagthuset, Jörgen Kocksgatan 7A, Malmö. Shareholders wishing to attend the meeting must be included in the register of shareholders maintained by Euroclear Sweden AB (former VPC AB) by 17 April 2009 at the latest, and must also send notification of their participation by letter to Wihlborgs Fastigheter AB, Box 97, 201 20 Malmö, or by e-mail to annika.nordbeck@wihlborgs.se or phone on
+46 40 690 57 70 or fax on +46 40 23 45 52.
Notification must reach Wihlborgs by 4 p.m. on Friday 17 April 200. The notification must state the shareholders’ name, civic registration number/corporate identity number, address, telephone number and number of shares owned. Shareholder with nominee-re- gistered shares in order to participate must re-register their shares in their own name with Euroclear Sweden AB. A request for such re-registration must be made in good time before Friday 17 April 2008.
Wihlborgs is the leading property company in the Öresund region. The properties’ book value totals SEK 13.6 billion with a lettable area of 1.3 million sq.m. and an annual rental value of SEK 1.3 billion.
Wihlborgs shares are listad on the Stockholm Stock Exchange, Mid cap segment.
Financial information 2009
Interim report January–March: 23 April Interim report January–June: 8 July
Interim report January–September: 29 October
1 The year in summary 2 CEO’s review 4 History 5 Operations
6 Organisation and employees 8 The environment
12 The share 14 Market overview 17 Property portfolio
34 Projects and development 36 Valuation principles 38 List of property acquisitions
and sales 40 List of properties 48 Risk factors and Tax
situation
50 Administration Report
Contents
FinAnCiAL REPORTs53 Profit and loss account 54 Balance sheet
56 Changes in equity 57 Cash flow statements 58 Accounting principles 63 notes
70 signing of the Annual Report
71 Audit Report
72 Corporate Governance Report
80 Five-year summary and definitions
81 Articles of Association
The year in summary
Rental income increased by 13 per cent to SEK 1,168 million (1,035) Net operating income increased by 15 per cent to SEK 832 million (723)
Profit from ongoing property management before tax increased to SEK 450 million (444) Changes in value of properties and derivatives amounted to SEK -637 million (1,058)
The result of the year was SEK -49 million (1,114) and earnings per share were SEK -1,32 (29,08) New lease agreements amounts to SEK 138 million (111), of which SEK 43 million (14) were signed during the fourth quarter
The Board proposes a dividend of SEK 6,50 (6,25) per share
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Key ratios1 2008 2007
Rental income, sEKm 1,168 1,035
net operating income, sEKm 832 723
Profit after financial items, sEKm -187 1,502
Return on equity, % -1.2 27.9
Equity/assets ratio, % 29.4 32.6
interest coverage ratio, multiple 2.2 2.7
Earnings per share, sEK -1,32 29,08
Cash flow from operations before change
in working capital, per share, sEK 11,99 11,36
Dividend per share, sEK2 6,50 6,25
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28 30
22 24
skånes
32
dansteater
gödecke frakt & trailer
ab sita scalado
com 1. For definitions, see page 80.
2. This refers to the Board of Directors proposal of dividend for 2008.
2
O U R E M P L O Y E E S H A V E D O N E A F A N T A S T I C J O B which is evident from strong lea- sing with newly-signed contracts amounting to SEK 138 million. This, together with project development, has increased our lease income by 13 per cent to SEK 1,168 million as well as increasing our operating surplus by 15 per cent to SEK 832 million. This balances increased financing costs as a consequence of increasing interest rates during the first ten months of the year. Seen overall, the result for current management was SEK 450 million, in other words somewhat higher than 2007. I consider this to be good growth bearing in mind the turbulence of 2008.
The Stockholm stock exchange’s development during 2008 has not been some cheerful reading. But it is my opinion that we have done a lot better than many others. We share-
holders could and can, if so decided by the AGM, continue to enjoy a good yield.
Good properties maintain their value even when times are hard
The fact that our properties have survived well and we have been success- ful in achieving a better net operating result, depends on the fact that we systematic during several years have developed our portfolio. Part’s through selling the houses that we haven’t seen future value development in and part’s through acquiring and building good modern commercial premises with good value growth. Properties located in attractive areas which we ourselves have been involved in developing in an interesting and growing market – the Öresund region.
The rental market in the Öresund region in balance
In the region’s main urban areas there is more or less a balance between supply and demand. In Malmö, for example, the vacancy levels in my opi- nion are below 6 per cent in Centre and Western Harbour. It should how- ever be borne in mind that approximately 50,000 sq.m. of new properties will be completed in Malmö over the next two years. But only 5,000 sq.m. of this volume has not yet been contracted.
In my estimation, the lower expected rate of growth and thus demand will be balanced by an increase in occupation. During 2008, around forty new enterprises were established in Malmö, four of which were head offices. The companies who chose Malmö as a location for their Swedish or northern European head offices were Mercedes, Vestas, DSB First Group and Hexagon Polymers. I am convinced, for a number of reasons, that this development will continue: Naturally the
region’s geographical location. But also a number of other factors such as expanded communications, the number of uni- versities and other centres of excellence and good recreation facilities. These are well-known factors that are important in attracting both people and companies.
To these advantages we can now add the agreed link across the Fehmarn Belt that links the Öresund region with northern Germany. By 2018, Hamburg will be no further away than Gothenburg. This will further increase the region’s attractiveness. I am also hopeful that the hi-tech EU project – the ESS materials research facility - will be established in Lund. A decision is expected during the Spring and, if it turns out to be to Sweden’s advantage, the Öresund region’s position as a centre of excellence will be further strengthened. This, I am convinced, will attract a number of new enterprises to the region.
CEO’S REVIEW
ceo
”2008 was an-
other good year
for Wihlborgs”
3
CEO’S REVIEW
New enterprises need new environmentally-harmonised premises
Knowledge and service industries which increasingly provide the basis of the region’s business and commerce demand modern premises. Premises that are effective with efficiently-used space and are prepared for new technology with internal and global networks. Open spaces with generous meeting rooms enhance communication between members of staff and thus creativity. A good working environment is also an important part of the concept. We also see how tenants subsequently make greater demands in terms of environmentally-adapted premises.
Environmental issues have been of central importance to us for a long time. We formu- lated an environmental policy at an early stage that continuously guides us towards more environmentally-friendly alternatives. Today, all of our service vehicles are
gas-driven. More or less all the property energy we consume comes from district heating, hydroelectric or wind power. Our properties at Dockan have a minimal impact on the environment. This is possible thanks to our aquifer plant at the Dockan area which, in and energy-efficient manner, se- asonally-stores ground water which cools in the summer and warms during the winter.
Development of attractive areas
Attractive office locations are often linked to the towns’ centres. The exist- ing stock of buildings is usually old and therefore difficult to convert into modern, efficient premises. In this case it is often necessary to work with active development of easily-accessible areas near to cities that can be built upon. These can then be planned effectively and, if required, in collabora- tion with local authorities. They can be provided with roads, car parking, general communications, restaurants and shops etc. This is what we have done in Lund and Helsingborg and, not least, at Western Harbour in Malmö. Here we are working flat out on the development of Dockan as one of the country’s most popular areas.
A strong player can drive development
By thinking long-term in this way and developing attractive premises that please not only today’s tenants but also entice new companies, we also create values for shareholders as well as all other interested parties including the local authorities in which we operate. As the region’s major player we have good opportunities for driving this development. Our capacity to attract activities has been illustrated through a number of notable contracts we have recently signed. The latest is Honda’s new Nordic head office. We have both the knowledge and the financial muscle to do such deals as well as continuing to exploit our attractive areas such as Herlev in Copenhagen, city centre in Helsingborg and Berga, Ideon in Lund and the major potential that we have at Dockan in Malmö. Furthermore, we have the organisational capacity as well as competent and committed employees.
With such good prerequisites we can create value for all interested parties and will conti- nue to do so.
Malmö March 2009
Anders Jarl CEO
4
The Annual General Meeting of 9 May 2005 decided in accordance with the Board’s proposal to change the name of the Company from Wihlborgs Fastigheter AB to Fabege AB. This occured as a result of the impending distribution of the Company’s portfolio in the Öresund region under the Company Wihlborgs Fastigheter AB. The following section presents the history underlying the development of the property portfolio in the Öresund region. The company referred to below up to the year 2004 as Wihlborgs Fastigheter AB is the current Fabege AB.
1924 In 1924, master builder O P Wihlborg
established a building company in Malmö that provi- ded the name for Wihlborgs Fastigheter AB. For a protracted period, the Company built, owned and administrated properties in Malmö.
1985 Building operations are sold to the Active Group, based in Malmö, and the Company becomes a traditional property company.
1990 Wihlborgs Fastigheter AB is listed on the Stock- holm Stock Exchange’s O-List. Peab AB becomes the new majority shareholder in Wihlborgs.
1993 In conjunction with a new share issue of SEK 371m, Wihlborgs Fastigheter AB acquires 33 proper- ties in Sweden, of which 22 properties are located in Malmö and Helsingborg. Bergaliden becomes the new major shareholder in Wihlborgs Fastigheter AB.
1995 Fastighets AB Stillman is acquired and Wihl- borgs Fastigheter AB gains properties in Malmö, Lund and Landskrona with an area of 44,000 sq.m.
1996 Wihlborgs Fastigheter AB acquires 76 proper- ties with a lettable area of 178,000 sq.m. from Retriva (currently Kungsleden). Wihlborgs and Fastighets AB Storheden conduct an exchange of properties, through which the Company takes over 35 properties in Skåne with 78,100 sq.m. The Board of Directors in Wihlborgs makes a public offer to acquire M2 Fastig- heter AB on 22 November 1996, involving the acquisi- tion of properties with an area of 364,000 sq.m. The company establishes a presence in Denmark through the acquisition of two properties.
1997 During the spring, Wihlborgs Fastigheter AB completes the acquisition of M2 Fastigheter AB.
1998 Wihlborgs Fastigheter AB completes the acqui- sition of Klövern Fastigheter AB and gains properties in Malmö and Helsingborg, as well as in other parts of Sweden and the Netherlands, with total lettable area of 934,000 sq.m. On 14 April 1998, Wihlborgs Fastig- heter AB makes an offer for Fastighets AB Storheden.
As a result, the Stockholm area becomes a key part of the Company’s operations.
2000 JM, Peab and Wihlborgs Fastigheter AB esta- blish a new joint development company for the deve- lopment of the Dockan district in Western Harbour, Malmö.
2004 Wihlborgs Fastigheter AB acquires the Stock- holmbased property company, Fabege AB. In Decem- ber, the Board of Directors in Wihlborgs Fastigheter AB proposes that the Annual General Meeting of 9 May 2005 approve the distribution and separate lis- ting in accordance with Lex ASEA of the property portfolio in the Öresund region.
2005 The distributed company is given the name Wihlborgs Fastigheter AB and the distributing company changes its name to Fabege AB. 23 May 2005 Wihlborgs Fastigheter AB is listed on the Stockholm Stock Exchange’s O-list.
2006 Wihlborgs acquires 14 properties in Malmö with a total lettable area of 182,000 sq.m. from Tornet.
Wihlborgs acquires Ideon AB in Lund by purchasing 40 per cent of the shares. The remaining 60 per cent is expected to be occupied in 2009. The purchase includes the property Betahuset at Ideon (Vätet 1) totalling 24,000 sq.m. During May Wihlborgs imple- ments a 2:1 share split, one old share was replaced with two new shares.
2007 Wihlborgs continues to invest in Lund and sets up a new office at Ideon. An agreement is signed with Mercedes on the construction of a new Nordic head office at Dockan.
2008 Wihlborgs leaves Germany in connection with the sale of the remaining office property at Lippeltstrasse in Hamburg. Agreements are signed with ÅF and Region Skåne for two new office proper- ties at Dockan. An agreement is signed with Honda on the construction of a new head office at Svåger- torp. Wihlborgs acquires the Scandinavian Center property in Malmö of 8,000 sq.m. Wihlborgs continu- es with the repurchase of its own shares and acquires 1,217,000 of them. Its holding at the end of the year was 2,214,350 shares.
HISTORY
history
5
OPERATIONS
business concept, overall objectives and strategies
Wihlborgs is a property company focusing on com- mercial property in the Öresund region. The criteria for long-term and acceptable value growth are created by activities being characterised by a clear, cashflow- oriented strategy where the creation and realisation of added value are important factors. Together with a clear dividend policy the overriding objective is to cre- ate a good overall yield for the shareholders.
Business concept
Wihlborgs shall own, manage and develop commercial properties with a focus on well-functioning sub-markets in the Öresund region.
Overall objectives and strategies
Wihlborgs aims to be the leading and most profitable property company in the Öresund market. To attain this, Wihlborgs must:
Consolidate and further strengthen its market posi- tions in the Öresund region by concentrating on selected sub-markets.
Actively improve the property portfolio by purcha- sing, developing and divesting properties. Realisa- tion of value growth will form a key part of the ope- rations.
Actively and efficiently manage the property port- folio with the focus on high cost-effectiveness and a high occupancy rate by being a market leader in each sub-market.
Strengthen customer relations by active involve- ment and offering a high level of service in order to create the necessary conditions for long-term ren- tal relationships.
Actively cultivate the rental market to obtain new- customers and strengthen the brand in order to become the preferred choice for customers.
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Financial goals Wihlborgs is to show:
A return on shareholders’ equity that exceeds the risk-free interest rate by at least four percentage points1.
An equity/assets ratio of a minimum 25 per cent and a maximum of 35 per cent.
An interest coverage ratio to at least 2.0.
The above financial goals have to be achieved through the active development of assets and liabilities and capital structure. Wihlborgs shall always have a capital structure that gives the maximum return to share- holders, with due consideration of risk.
Dividend policy
Wihlborgs’ dividend policy is based, firstly, on transfer- ring part of the profit generated by property manage- ment and, secondly, on transferring realized value growth:
The dividend is to amount to 50 per cent of profit- from ongoing property management2.
In addition, 50 per cent of realised profits frompro- perty sales are to be distributed3.
1. The risk-free rate of interest is defined as the rate on a 5-year swedish government bond.
2. Pre-tax profit, excluding realised and unrealised changes in value, char- ged with 26,3 per cent standard tax.
3. Difference between the sales price and total capital invested, charged with 26,3 per cent standard tax.
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Group Management Purchase
Environment
Business Development Economy/Finance
Communication/IT Management
Projects and
Development Transactions Malmö 3 management units
Lund 1 management unit Helsingborg 3 management units Köpenhamn 1 management unit
6
organisation
and employees
Wihlborgs is characterised by a flat organisation with short deci- sion paths. Wihlborgs’ organisation is designed to increase profit from day-to-day management while creating new business at the same time.
Legal structure
Wihlborgs Fastigheter AB (publ), corporate ID number
556367-0230, is the parent company of a group with a total of 129 group companies and five joint ventures.
Joint Ventures
Wihlborgs owns 40 per cent of Medeon AB. This is a marketing company that is operated together with Malmö Stad.
50 per cent of Ideon Center AB is owned by Wihlborgs and Ikano Fastighets AB. The company will be responsible for mar- keting Ideon and providing joint functions.
Wihlborgs also owns 33.3 per cent of Dockan Exploatering AB. The company is engaged in the production of detailed plans and infrastructure investments for the new Dockan district located at Western Harbour in Malmö. JM and Peab each own equal shares in Dockan Exploatering.
Other joint ventures do not operate any activity.
Operating structure
The operating organisation comprises the Management and the Business Development function.
Management is adapted according to local market criteria
and is organised as eight geographically- distributed management units. The purpo- se is to create the criteria for management that is effective and close to clients.
All management is provided by the company’s own staff so that is can be close to clients and can quickly respond to their expectations and demands. It is important that employees know their regular clients and are available. Each management unit has a manager with a clear profit responsi- bility. The manager sets up the guidelines for his activity in close collaboration with group management.
Business development comprises two parts – Projects and Development, and Transactions. Projects and Development has a central role for improvements to the property portfolio and is responsible for new and redevelopment projects as well as procurement and monitoring. Investments in properties are prepared and evaluated by the respective manager together with a project manager. Investments in excess of SEK 10m shall be approved by the board.
Transactions are responsible for all the company’s purchases and sales of proper- ties. The transactions unit continuously monitors potential business. Evaluation is often performed in consultation with Administration to make the most of skills it has in terms of local market knowledge etc.
When assessing property acquisitions the analyses conducted include the property’s long-term yield, technical standard, deve- lopment potential and tenant structure.
In addition to the operative organisa- tion there are the group functions Eco- nomy/Finance as well as Communication and IT.
ORgANISATION AND EMPLOYEES
Female and male managers (total 16 persons)
7 Group Management comprises the CEO,
economy and finance director, property di- rector, information director and assistant to the CEO. The responsibilities of group ma- nagement include overall responsibility for strategy issues and business development, economic control and profit monitoring as well as issues concerning information.
System support
Wihlborgs employs different system supports to effectivise its activities. The Vitec Nova lease system is used within lease administrat- ion. This is where all lease contracts are registered. All administration that applies to tenants is managed from Vitec. The Visma Control economy system is used for day-today accounting while Ocra is used for consoli- dated accounting. All invoicing is processed digitally with scanned invoices in the Baltzar invoice processing system.
Wihlborgs has developed its own tool, Hemborgen, to support property manage- ment and administration. This is integrated with the lease and economy system.
Since all information is gathered in one place, it can be easily accessed by the entire organisation. Hemborgen contains modul- es for dealing with operating costs concer- ning the company’s tenants, income reports and analysis of lease contracts. Hemborgen also contains an archive of all documents that concern properties. This is where all information can be entered in order to monitor and follow up due dates and upda- tes.
Employees
The skills and commitment of the employees are vital to the group’s development and for the quality of the service offered to customers.
Staff policy is structured and strongly linked to the company’s activities.
As at 31 December 2008, the number of employees was 81. The proportion of employees with an academic qualification was 27 per cent. The average age of the employees was 49 and the proportion of women amounted to 32 per cent. The company’s staff turnover in 2008 amounted to 8.3 per cent. The organisation comprizes 16 managers, of which 9 is men and 7 women.
Sickness absence
Wihlborgs has a low level of sickness absence which in 2008 amounted to 2.0 (2.8) per cent. The proportion of long-term sickness absence for 2008 was 37.4 (31.5) per cent. All employees are covered by health care insurance.
Wellness
Good health is a resource for the individual as well as the compa- ny. This is why wellness is of significant importance to Wihlborgs’
activities and profitability. All employees are offered keep fit training in the form of difference exercise programmes provided through Friskis&Svettis, regular health checks and free health care.
Competence development
Wihlborgs encourages initiatives from employees for competen- ce development. It is important to have the opportunity for deve- lopment at work in order to satisfy customer demands with knowledge and an individual sense of work satisfaction. Part of this development is also the annual development discussions between employees and their immediate managers.
Incentive programme
Employees in the group, with the exception of the CEO, benefit from the profit-sharing fund. The purpose of the profit-sharing fund is to stimulate employees to achieve predetermined objecti- ves that are part of the company’s activities. A whole proportion in the event of maximum allocation corresponds to shares in Wihl- borgs to a value of one base amount which is currently SEK 42,800.
All employees receive equal shares in the fund irrespective of their position in the company. The share amount in the case of part-time employees or those who work only part of the year is adjusted. All funds that are allocated to the profit-sharing foun- dation shall be invested in shares in Wihlborgs. Dividends are also reinvested in Wihlborgs shares. The share holding was 68,850 as of December 31.
ORgANISATION AND EMPLOYEES
■ Men 56 per cent
■ Women 44 per cent
8
per cent in total. This means that Wihlborgs’
long-term objective will continue into 2009.
See page 10 for more information on our environmental objectives.
A stage longer at Dockan
At the moment we are building a new office for Region Skåne at Dockan. The property will have an energy consumption at least 25 per cent lower than the requirements in National Board of Housing, Building and Planning ’s construction rules (BBR).
Our next step will be to apply for as part- ners on real estate level in the Greenbuil- ding concept. In addition to Regionhuset we will apply for further energy effective real estates at Dockan.
At Dockan we have a so called aquifer plant which, in and energy-efficient manner, seasonally-stores ground water which cools in the summer and warms during the winter.
Wihlborgs steps on the gas
Our environmental work is characterised by something new happening all the time.
During 2008 our endeavour was to highlight the change to our service vehicles when we took the step from using petrol to the use of gas. In our annual report for previous years we were able to present our investment in environmental service vehicles according to the Swedish Road Administration’s definit- ion. EcoDriving was also arranged for the majority of our employees in connection with this. It is evident from our environmental policy that we shall be receptive to environ- mental innovations and keep updated with current information. Something that has been conceived from environmental inno- vations is Sweden’s biogas plants as well as the south of Sweden’s investment in pro- ducing biogas. We therefore feel that the time is ripe to invest in gas-powered service vehicles. 22 gas-powered VW Caddy EcoFuel service vehicles were delivered in August 2008. We believe that vehicle parks in the future will be characterised by various fuels and new environmental technologies where
we’re growing in harmony with the environment
The year 2008 resulted in the debate on the environment be- coming increasingly prominent in different contexts around the world. The financial crisis in the final months of 2008 became a reality. Is a financial crisis something that causes a company’s environmental commitment to be put to one side?
Our commitment is rather quite the opposite since this type of crisis can be seen as an opportunity for change and this also applies to environmental change. In 2008 it became in- creasingly evident that the voluntary climate market grew. In other words an increasing number of companies have chosen to invest in environmental initiatives without the pressure of any legislative obligation. This applies to both the short-term and the long-term perspective. This type of environmental work is usually termed strategic environmental work. In these introductory lines we would like to present the past year’s strategic environment work.
Strategic environmental work
It’s not enough just to do things well, we also need to im- prove what is already good. Daring to compete with oneself is important. In 2008 Folksam’s Climate Index for the year 2007 showed that Wihlborgs topped the list. It is gratifying that we were highlighted for our strategic environmental work. But this does not mean that we can take a back seat - quite the reverse. It is important for us not to lower our ambition in any environmental area and, above all, not our environmental agenda. Our ambition is to continue investing in sustainable development and to promote environmental profiling. Most important of all, however, is that what is contained in our environmental strategy is applied in practice. Our objectives shall be measurable and realistic. By being able to commu- nicate both internally and externally so that we can achieve what is planned is very important.
Environmental objectives for 2008
All of 2008’s environmental objectives were achieved. This means that:
• Wihlborgs reduced its electricity consumption (kWh/sq.m.) by 2 per cent compared with 2007.
• Wihlborgs reduced its heating consumption (kWh/sq.m.) by 2 per cent compared with 2007.
• All properties built between 1956 and 1973 were checked for PCB.
• Refurbishment was done on the basis of the PCB audits.
Long-term environmental objectives from 2007 to 2009: Re- ducing electricity and heating consumption (kWh/sq.m.) by 6
THE ENVIRONMENT
Wihlborgs environment commitments in practice – 22 gas-powered service cars, here outside Wihlborgs’ head office on Dockplatsen in Malmö.
9
THE ENVIRONMENT
the common denominator is that fuel/tech- nology will promote renewable sources.
Environment brochure
An environment brochure has been compi- led during the year in order to provide con- cise information on how Wihlborgs tackles environmental issues. Among the purposes of the brochure is to use it to inform pos- sible future tenants that we are actively enga- ged in environmental work. It is highly likely that our tenants will be increasingly aware of how we deal with energy and environmental issues. If one in ten chooses us in preference to other companies since we have a well-
developed environmental strategy, then this will be of value.
In ten years there will perhaps be ten out of ten who choose us for the same reason.
Sustainable today and tomorrow
The checklist that was compiled in 2007 in order to ident- ify our suppliers’ and contractors’ environmental work was widely used in 2008. The checklist ensures that our suppli- ers and contractors are conscious that they have an impact on the environment. We want to ensure that they can offer products and/or services that have the smallest possible environmental impact.
When choosing materials for renovation, we work on the basis of Folksams Byggmiljöguide (Folksam’s Building Environment Guide) since this provides guidelines on what
10
THE ENVIRONMENT
Environmental objectives 2009 2010 2011
1. ENERgY EFFECTIVISATION - PROPERTIES
1.1 Reduce energy consumption by x % per year.
(1.1) Electricity reduced by 2 %, Hea- ting reduced by 2 %.
(1.1) 2006-2009, reduction of 6 %.
(1.1) Reducing total energy consump- tion by 3 %.
(1.1) Reducing total energy con- sumption by 3 %.
2. RENEWABLE SOURCES
2.1 Promote innovations and invest in energy from renewable sources.
(2.1) The energy and environmental group will identify potential pro- jects. Plan identified.
(2.1) Projects which mean energy that is partly renewable at a property from our stock.
(2.1) Projects which mean energy that is partly renewable at two properties from our stock.
3. PHASINg OUT HAzARDOUS MATERIALS
3.1 Clearing PCB.
3.2 Reporting clearing to the environmen- tal authority.
(3.1) Clearing properties that were reported to the environmental authority in 2008.
(3.2) New properties reported for 2010.
(3.1) Clearing properties that were reported to the environmental authority in 2009.
(3.2) New properties reported for 2010.
(3.1) Clearing properties that were reported to the environmental authority in 2010
(3.1) Final objective – all cleared.
4. TRAININg/COMMUNICATION 4.1 Basic training
4.2 Further training 4.3 Inspiration lecture(s) 4.4 Communication
(4.1) All who have not completed Wihl- borgs’ basic environmental train- ing shall undergo this in 2009.
(4.3) Joint environmental lecture for all employees.
(4.4) New “environment group” with non- “energy and environment employees” will meet twice a year led by an environment manager.
(4.2) Further training in environmen- tal issues. 100 % of Wihlborgs’
employees shall attend further training during the year.
5. gREEN IT
5.1 Integrate IT and environmental issues.
5.2 Reduce total counters for printouts.
(5.1) Integrate the concept of Green IT into our activities. The number of printouts in 2009 will be identified.
The number of printouts shall decrease by comparison with 2009.
The number of printouts shall decrease by comparison with 2010.
6. WASTE PROCESSINg
6.1 Increase the number of fractions that can be sorted.
(6.1) Map and set an action plan for Wihlborgs’ top 50 properties regarding highest costs for
(6.1) The costs of all properties identi- fied last year shall decrease.
(6.1) Map and set an action plan for Wihlborgs’ top 50 properties regarding highest costs for frac- tions.
Environmental objectives for 2009, short-term & long-term, 2009-211
As of and including 2009 we have developed 4 new areas for inclusion in our environmental objectives. Two of our earlier objectives will continue into 2009. Our long-term environmental objectives have also been updated with the result that Wihlborgs is able to present new environmental objectives up to 2011:
NEW
can be used from an environmental perspective. In the case of new constructions, we will compile an environmen- tal programme for the specific property. This programme considers energy efficiency, moisture protection and choice of material in detail.
Using “Hemborgen”
Wihlborgs’ earlier environmental database has been upda- ted during the year and is now consolidated in “Hemborgen”.
The information in Hemborgen is linked directly to a respective property. Hemborgen contains information on items such as PCB, refrigerants, radon and OVK (obligatory
ventilation inspection). New for this year is that the programme has been updated and can be more easily used in direct con- nection with other property data. Every employee has access to all information on the environment via our intranet. This contains Wihlborgs’ environmental risks, environment policy, environment audits, reports from our energy and environment meetings, and Wihlborgs’ environment news.
NEW
NEW
NEW
MILJÖ
The Sigma building photographed in February 2009.
The building was inaugurated in the year 2000.
11
THE ENVIRONMENT
Environmental objectives 2009 2010 2011
1. ENERgY EFFECTIVISATION - PROPERTIES
1.1 Reduce energy consumption by x % per year.
(1.1) Electricity reduced by 2 %, Hea- ting reduced by 2 %.
(1.1) 2006-2009, reduction of 6 %.
(1.1) Reducing total energy consump- tion by 3 %.
(1.1) Reducing total energy con- sumption by 3 %.
2. RENEWABLE SOURCES
2.1 Promote innovations and invest in energy from renewable sources.
(2.1) The energy and environmental group will identify potential pro- jects. Plan identified.
(2.1) Projects which mean energy that is partly renewable at a property from our stock.
(2.1) Projects which mean energy that is partly renewable at two properties from our stock.
3. PHASINg OUT HAzARDOUS MATERIALS
3.1 Clearing PCB.
3.2 Reporting clearing to the environmen- tal authority.
(3.1) Clearing properties that were reported to the environmental authority in 2008.
(3.2) New properties reported for 2010.
(3.1) Clearing properties that were reported to the environmental authority in 2009.
(3.2) New properties reported for 2010.
(3.1) Clearing properties that were reported to the environmental authority in 2010
(3.1) Final objective – all cleared.
4. TRAININg/COMMUNICATION 4.1 Basic training
4.2 Further training 4.3 Inspiration lecture(s) 4.4 Communication
(4.1) All who have not completed Wihl- borgs’ basic environmental train- ing shall undergo this in 2009.
(4.3) Joint environmental lecture for all employees.
(4.4) New “environment group” with non- “energy and environment employees” will meet twice a year led by an environment manager.
(4.2) Further training in environmen- tal issues. 100 % of Wihlborgs’
employees shall attend further training during the year.
5. gREEN IT
5.1 Integrate IT and environmental issues.
5.2 Reduce total counters for printouts.
(5.1) Integrate the concept of Green IT into our activities. The number of printouts in 2009 will be identified.
The number of printouts shall decrease by comparison with 2009.
The number of printouts shall decrease by comparison with 2010.
6. WASTE PROCESSINg
6.1 Increase the number of fractions that can be sorted.
(6.1) Map and set an action plan for Wihlborgs’ top 50 properties regarding highest costs for
(6.1) The costs of all properties identi- fied last year shall decrease.
(6.1) Map and set an action plan for Wihlborgs’ top 50 properties regarding highest costs for frac- tions.
0 3 000 6 000 9 000 12 000
Wihlborgs
SX4040 Real Estate PI OMX Stockholm PI Share turnover
SEK Number of shares, ’000
0 45 90 135 180
2005 2006 2007 2008
12
the share
Wihlborgs’ shares were listed on the Stockholm Stock Exchange’s O list on 23 May 2005. Wihlborgs have been on the Nordic Mid Cap list since October 2006.
At the end of the year the share capital amounted to SEK 192m distributed across 38,428,364 shares and 36,214,014 remaining shares. Each share is entitled to one vote and each person entitled to vote at the annual general meeting may vote for the full number of shares held and represented by this person. All outstanding shares are entitled to an equal share in Wihlborgs’
profit. The company has repurchased 1,217,000 of its own shares during 2008.
The board has not exercised its authority to decide on a new issue of no more than 10 per cent of the remaining shares.
Market capitalisation and turnover
In 2008 there was a turnover of a total of 49.5 million shares which corresponds to 196,000 shares per day.
This corresponds to a turnover rate of 133 per cent of the average number of outstanding shares.
At the year end the price of a Wilhlborgs’ share was SEK 100.00 which, with all outstanding shares, corresponds to a share value of SEK 3.6 billion. The
highest and lowest quotation for the Wihlborgs’ share in 2008 was SEK 146.00 and SEK 65.25 respectively. In 2008 the total return on the Wihlborgs share, including dividends of SEK 6,25 was -8.2 per cent.
Net worth in the balance sheet
The balance sheet’s assets and liabilities shall reflect the market value. Consequently, the net worth is cal- culated on the basis of the balance sheet’s equity adjusted for the minority share that amounts to SEK 120 million. In this context, it shall be observed that Wihlborgs’ actual tax is lower that the nominal tax rate of 26.3 per cent. This is because the sale of properties is usually done without a tax cost and that the group receives a tax credit through different mea- sures. This is primarily through the use of maximum tax write-downs which result in tax discounting and the tax payment is deferred.
Shareholders’ equity per share, different tax rates
26.3 % 13 % 10 % 5 % 0 %
110,84 123,66 126,91 131,84 136,69
■ international owners, 35.5 %
■ swedish private individuals, 22.8 %
■ Funds, 17.7 %
■ swedish legal persons, 15.5 %
■ Financial companies, 3 %
■ insurance, pension AP-funds, 3 %
■ Associations organisations, 2.5 %
share development 2008 shareholders, 31 Dec 2008
THE SHARE
13 Dividend and dividend policy
Wihlborgs’ dividend policy is based partly on transfer- ring 50 per cent of the current investment result, and partly 50 per cent of the realised result from property sales. Both were reduced by a standard tax rate of 26.3 per cent. The board’s dividend proposal for 2008 is SEK 6.50 (6.25). This corresponds to a yield of 6.5 per cent based on the share price at the end of the year.
If the AGM approves the board’s proposal for a divi- dend of SEK 6.50 and the record day of 28 April, the dividend will be paid on 4 May 2009. The Wilhlborgs’
share will be traded including the dividend up to and including the day of the AGM, Thursday 23 April 2009.
THE SHARE
Largest shareholders in Wihlborgs 31 december 2008
Number of shares thousands
Percentage of shares and capital, %
Brinova Fastigheter AB 3,867 10.7
Robur Funds 2,538 7.0
Handelsbanken Funds 1,177 3.2
Länsförsäkringar Funds 964 2.7
Investment AB Öresund 945 2.6
SEB Funds 748 2.1
Mats Qviberg including family 691 1.9
Tibia Konsult 451 1.2
Skandia Liv 381 1.1
Skandia Funds 281 0.8
Other shareholders reg. in Sweden 11,314 31.2
Shareholders reg. abroad 12,857 35.5
Total outstanding shares 36,214 100.0
Share buy-backs 2,214
Total registrered shares 38,428
stock symbol WiHL Listed since 2005
Traded OMX nordic List
segment Mid Cap
sector Financial
W I H L B O R g S ’ F A C T S / T H E S H A R E
The share/Key figures 2008 2007 2006
share price at year-end, sEK 100,00 115,75 142,75
Development of share price during
the year, % -13.6 -18.9 48.7
Profit per share, sEK -1,32 29,08 22,12
P/E ratio,times neg. 4.0 6.5
P/E ratio current management, times 11.2 13.9 17.8
shareholders equity per share, sEK 110,84 116,29 92,30
Dividend per share, sEK 6,50 6,25 5,5
Yield, % 1 6.50 5.4 3.9
Total return during the year, % 2 -8.2 -15.1 52.3
number of shares at year-end 36,214 37,431 38,428
Average number of shares, thousand 37,208 38,304 38,428
1. Dividend related to share price at year-end. 2. Development of share price in addition to dividend
Ownership structure
The largest shareholders in Wihlborgs are Brinova Fastigheter AB and Robur Funds who own 10.7 and 7.0 per cent of the shares respectively.
During the fourth quarter, Maths O Sundqvist with companies left Wihlborgs as its largest owner. At the end of 2008, the ten largest shareholders held 33.3 per cent of the shares and the number of shareholders amounted to 26,470, an decrease with approximately 1,000 shareholders. The proportion of foreign owners at the end of December amounted to 35.5 per cent, an increase of 10.2 per cent since the previous year end.
Of the foreign owners, 29 per cent are from the USA, 25 per cent from Great Britain, 19 per cent from Lux- emburg and 4 per cent from the Netherlands.
CBD Western Harbour
3,0 6,0 9,0 12,0 15,0 18,0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009p 2010p CBD
Western Harbour
1000 1200 1400 1600 1800 2000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009p 2010p
14
Copenhagen
stabilises Skåne
The Öresund region is now also showing signs of decline. But since Denmark and Sweden have expe- rienced different phases in the economic cycle since the turn of the millennium, Copenhagen can be a sta- bilising factor. Among the reasons for this is the expectation that unemployment in Sweden will rise to 7.6 per cent in 2009 compared with 3.8 per cent for Skåne according to Arbetsförmedlingen.
Towards the end of 2008, the economic climate changed considerably and this will have a major impact
on growth in the Nordic countries in 2009.
According to SEB Nordic Outlook, the GNP in the OECD-area will fall by more than 1 per cent in 2009. This represents the weakest growth since the Second World War. At the same time, an extensive and synchronised sti- mulation policy will take shape. Interest rates fell significantly when the central banks’ thre- at scenario was increasingly dominated by recession, financial crisis and worry about deflation. Furthermore, the financial policy was used on a broad front to lessen the down- turn.
Since 2004, the property market has been characterised by increasingly lower yield demands. This is a consequence of increasing capital flows driven by increasing loan facili- ties. This growth ceased during 2008 and it is now expected that yield demands will increase once again while lease levels will no longer increase at the same rate as before. Investors have been quick to adapt to the new criteria which no longer apply to vendors to the same high extent. This has been shown in increa- sing price differences. This, in turn, has resul- ted in increasingly extended or postponed deals and, in certain cases, deals that cannot be completed at all.
But, at the same time, the Nordic countries have a large property market, high liquidity and good transparency. There are low transfer costs, similar legislation and a sta- ble political and economic situation. Seen in total, this means that the Nordic proper- ty market will continue to be an attractive market for investors. However, turbulence will continue to remain high which means that the potential for predicting future growth in the short term will be more diffi- cult than normal.
Sweden facing difficult times
Difficult times now await after a number of years of good economic growth. The econo- mic foundations are stable but, like other countries in the world, Sweden is affected by
MARKET OVERVIEW
Office rent in Malmö 2000-2008, price per sqm/year.
Source: Newsec
Vacancy rate offices in Malmö 2000-2008, per cent/year Source: Newsec
15
MARKET OVERVIEW
international turbulence within the financi- al sector. GNP growth in 2008 stood at 0.8 per cent but, according to Øresundsinsi- tittutet, it is expected to fall by 1.6 per cent during 2009.
According to NewSec, the demand for modern office properties has increased on the major lease markets. This has led to lower vacancy levels and increased lease costs. This applies, for example, to central Stockholm, Western Harbour and the cen- tre of Malmö as well as Norra Älvstranden and the centre of Gothenburg. According to NewSec, there is reason to believe that this growth can continue to some degree in Malmö and Gothenburg whereas it will level off in Stockholm.
The Swedish labour market has been strong for a number of years and unemploy- ment reached record low levels during the middle of 2008. However, it then began to rise during the last months of the last year when the number of people being warned of redundancy increased significantly. In total, 6.4 per cent were unemployed during 2008 and, according to Arbetsförmedlingen, the forecast for 2009 is 7.6 per cent.
The Swedish property market in recent years has become increasingly the focus of international investors. From being only a few per cent of the market, they became more than half during 2007. However, the financial turbulence has broken the trend and, during the second half of 2008, the international investments made up a third of the market. The increasing dominance of
Nordic investors can be interpreted as an indication that these are affected by the financial crisis to a lesser extent.
Despite the slowdown during the first half of 2008, NewSec expects that the number of deals that are completed will reach a relatively high level during the year primarily as a result of the number of major deals that were completed in the beginning of the third quarter.
Copenhagen
stabilises Skåne
The Öresund region will cope better
As early as the end of 2007 it was considered that the absolute peak of the business cycle had been passed in the Öresund regi- on. A tangible decline was noted as early as last autumn on the Danish side with a decline in demand at a high level within industry, the construction sector and vehicle sales. There were, however, few signs of a decline within important industries in Skåne at this time.
According to Øresundsinstituttet, the GNP for Själland decreased by 1 per cent during 2008 and is expected to decrease by 1.8 per cent during 2009. Where Skåne is concerned, the GNP increased by 1 per cent in 2008 and is expected to decline by 1.5 per cent during 2009. This can be compared with Sweden’s GNP which, according to Øresundsinstituttet, increased by 0.8 per cent this year and is expected to decrease by 1.6 next year.
Unemployment in the region was low in 2008 but is expec- ted to increase during 2009. During 2008, unemployment was 3.3 per cent in Skåne and 1.7 per cent in the capital city region.
The forecast for 2009 is 3.1 per cent for the capital city region/
Själland and 3.8 per cent in Skåne. The corresponding figures for Sweden as a whole are 6.2 per cent for 2008 and 7.6 for 2009.
Despite the turbulence on the financial market, there has been strong interest in investing in Malmö. Both domestic and international investors have shown interest in all types of pro- perty. The number of companies who have chosen to become established in Malmö has increased in recent years. According to information from the city of Malmö,
more than 40 new companies were established in 2008 of which four were head offices.
Economic growth in Malmö decreased in 2008 but the prediction is that the labour market will con- tinue to be strong. During 2009, the number of people in employment is expected to decrease by 0.3 per cent. The degree of vacancy in central Malmö is 6 per cent. This is primarily a consequence of an increased demand for office space. The continued conversion of antiquated, inefficient office premises to other uses has also had a positive effect on the degree of vacancy.
Lease levels have been increased as demand has increased and the degree of vacancy decreased. The highest lease rates are currently found in Western Harbour and at Universitetsholmen where the majo- rity of the modern office properties are located. Here the lease levels lie between SEK 1,800 and 2,200/sq.m.
The high demand for modern office premises has also led to high activity within the newbuilding sector.
During 2009 and 2010 it is expected that 50,000 sq.m.
of office space will be completed in Malmö. 90 per cent of the area has already been leased. Projects after that
have to be postponed in case the recession continues. Consequently there will probably be a balance between supply and demand in the years to come as well.
Copenhagen is also expected to be a sta- bilising factor in the Öresund region. The reasons for this include its business and commerce structure where industry plays a less prominent role, and the large number of jobs in the public sector. This can lead to the downturn in the economy around Öre- sund being less noticeable in many other sectors of the Swedish and Danish economies.
Sources: Arbejdsmarkedstyrelsen Denmark, Arbetsförmedlingen Sweden, Denmarks Statistik, SCB, Malmö Stad, Newsec, Nordea Denmark, Øresundsinstituttet, Øresundsbarometern.
16
MARKET OVERVIEW
