Atrium Ljungberg
20 08
“We create living meeting places for people, for the retail sector, and for businesses.”
Contents
introduction 1 2008 in brief
2 The Managing Director’s Statement
operAtions
4 Business concept and vision 5 Goals and goal fulfilment 6 Business model and processes 8 Project development
12 The project portfolio 14 Market position 16 The real estate market 17 The retail market
19 The office market in Stockholm 22 The real estate holding 25 Shopping malls 32 City malls
34 Volume retail centres 37 Offices
41 Residential accommodation 42 TL Bygg AB
44 Risks and opportunities 46 Sustainable enterprise 52 The share and the owners 54 Board of Directors 55 Company officers, 2009 56 Corporate Governance Report 60 Definitions
61 Key ratios 62 Five-year overview 64 Real property list
68 GRI index
in-house expertise
We have our own committed and expert personnel who guide our customers through every stage of the commercial process. We use in-house personnel to manage and progress our development, project implementation and management activities.
Focusing on the customer
We give our customers what they need and want. By maintaining a presence and onsite personnel, we ensure that the customer is treated with the utmost professionalism.
Attractive environments in strong
subsidiary markets
Our real estate holding is concentrated on strong subsidiary markets. We create appealing environments that often include not only residential accommodation and workplaces, but retail and service outlets, generating attractiveness and synergy effects.
Large project portfolio We have a large project portfolio that includes substantial existing development rights.
This allows us to grow organically at the pace permitted by market conditions and with considerably better profitability than that offered by the acquisition alternatives.
Long-term ownership
Our long-term approach enables us to take decisions that are economically and
environmentally sustainable over time. This long-term approach also generates security for our customers.
strong financial base passion
Strong key ratios and a strong financial base give us the potential for doing good business in a variety of market conditions.
We are passionate about what we do!
our factors for success
Our business concept generates growth in value within the company and value added for our customers.
There are several reasons why Atrium Ljungberg is so successful in this respect:
Atrium Ljungberg is one of Sweden’s biggest real estate companies and focuses strongly on the development and management of retail and office properties. The company has been listed on NASDAQ OMX Stockholm exchange since 1994.
our brand name
The Atrium Ljungberg brand name shall reflect the company’s values. These values are based on focusing on the transaction and the customer.
Our operations are based on a long-term approach to both ownership and our relationships with customers and partners.
cooperation, reliability and innovative thinking shall per- meate our methodology and characterise our brand name. We cooperate across boundaries, generating opportunities both for us, as a company, and for our customers.
Our brand name shall be strongly associated with reliability.
We keep our promises and our word is good. Innovative thinking throughout the transaction process ensures that Atrium Ljungberg is perceived as a company with the courage to go our own way and to think along new lines. We don’t just build – we create living meeting places for people, for the retail sector, and for businesses.
A
ÖSTERSUND
UPPSALA
STOCKHOLM VÄSTERÅS
ESKILSTUNA
MOTALA
BORÅS
VÄXJÖ KALMAR HALMSTAD
MALMÖ
rentAL income, geogrAphic
Retail 56%
Offices 31%
Housing 3%
Other 10%
rentAL income, premises type
our real estate holding
Our operations are concentrated on a number of strong and expansive subsidiary markets in Sweden, primarily in Stockholm, Uppsala and Malmö. The real estate holding was valued at the end of the year at seK 19,059 million and comprised 55 properties. 78 per cent of the total rental income derives from properties in the Stockholm area.
The total letting area at the turn of the year was ca. 900,000m², with contracted annual rents of ca. seK 1,650 million.
The letting level at the turn of the year was 94 per cent, including project properties.
The real estate holding also includes substantial development rights that comprise an important part of Atrium Ljungberg’s real estate development operations.
Atrium Ljungberg is planning to invest seK 5 billion over the next five years in renovation, new construction, extension work on in-house development projects.
retail properties, offices
and residential accomodation
Our real estate holding primarily comprises retail and office proper- ties, but also includes a small percentage of residential accommodation.
The retail properties, which break down into regional shopping centres, city centre malls, volume retail centres, account for 56 per cent of the rental income, while office properties account for 31 per cent.
shopping malls, city malls and volume retail centres
Our four regional shopping malls are well established in strategic locations in Stockholm, Uppsala and Malmö. They comprise strong grocery retail trade outlets, a wide range of specialist stores, and extensive service facilities.
The city malls have central commercial locations in Stockholm’s
city centre area and in the centres of Uppsala, Västerås, Eskilstuna, Östersund,
Motala, Växjö and Kalmar. They comprise a unified range of specialist stores, and several have a strong fashion profile. The city mall grouping also includes Orminge Centrum in Nacka and Storknallen in Borås.
Our volume retail centres are primarily located along the major traffic routes in the Greater Stockholm area and are characterised by rational retail in the fields of groceries, consumer discretionary and volume goods, primarily in the DIY, sports, and home and leisure sectors.
offices
Our office properties are concentrated on the Stockholm city centre area, Kista, Sickla and Farsta. The properties in the Stockholm city centre area are modern character properties where a clear profile sets the tone. Glashuset at Slussen is a well-known example. In Kista, offices have been successfully combined with residential accommodation to create lively and secure environments. Sickla’s unique mixture of business types has created a unique micromarket for the offices, while in Farsta, the office workplaces form a natural part of the city centre zone.
residential accommodation
The real estate holding also includes a small number of residential properties located in the Ärvinge district of Kista and in the Mobilia area in Malmö.
78 %
8 %
6%
Stockholm, other 53%
Uppsala Mälardalen 11%
Stockholm city centre 25%
Sweden, other 11%
our properties
PERCENTAGE OF TOTAL RENTAL INCOME FOR THE RESPECTIVE SUBSIDIARY MARKETS
B
2008 in brief
events
Atrium Ljungberg’s operations have been characterised by a high growth rate in 2008, with just over SEK 1.2 billion invested during the year.
The main projects in 2008 comprised the construction of the Sickla Kunskapsgallerian, the expansion of Sickla Galleria and Gränby Centrum, and the transformation of PUB and Västberga Handel. These projects, which were completed in late 2008 and early 2009, are now almost fully let.
Letting operations have been successful during the year, with numerous new rental agreements signed. The most significant events during the year by quarter are shown below.
Q1
• Sale of the Söderpunkten office building in Helsingborg and removal from a number of properties sold in 2007.
• Completion of the Proppen 6 property in Hammarby Sjöstad.
• Substantial lets, primarily of office premises in the Norra Station area.
Q2
• Continued substantial lets in the Norra Station area.
• Possession taken of the Storö 10 property in Farsta, which was acquired in 2007.
• Johan Edlund succeeds Kurt Jävert as President of the TL Bygg AB subsidiary company.
Q3
• A 50% holding in the Blästern 6 property in the Norra Station area was acquired in partnership with Humlegården. Possession was taken on 1st October.
• Västberga Handel opens after extensive renovation work.
• Floor 2 in PUB is completed and inaugurated.
• A new detailed development plan is adopted in Uppsala, enabling the renovation and extension of the City Hall (Rådhuset) building.
• A new detailed development plan is adopted in Farsta, enabling the construction of a new, 7,000m² retail area in Farsta Centrum.
• A new detailed development plan is adopted for Sickla, enabling the expansion of Sickla Galleria and generating the preconditions
for further development of Sickla.
• Mobilia in Malmö celebrates 40 years as a retail centre.
Q4
• Agreement signed with Atlas Copco concerning the construction of a completely new office building in Sickla with an 11-year rental contract. Completion is scheduled for 2011.
• Inauguration of the phase 1 expansion of Gränby Centrum.
Key ratios
SEK m 2008 2007
Rental income 1,500 1,513
Project and construction work 355 338
Net sales 1,855 1,850
Operating profit/loss, real estate management 887 900 Operating profit/loss, project and construction work -3 -3
Net financial items -347 -289
Profit/loss before changes in value 537 609
Changes in value -1,250 1,426
Tax 310 -398
Net profit/loss for the year -402 1,636
Investments 1,540 1,750
Cash flow from operating activities 593 474
% 2008 2007
Letting rate 94 92
Equity/assets ratio 42.2 45.5
Lending ratio 43.8 39.8
Average interest rate, period end 4.7 4.6
Interest coverage ratio 2.5 3.0
SEK/share 2008 2007
Net profit/loss for the year -3.09 12.55
Profit/loss before changes in value, ex. estimated tax 2.97 3.36
Dividend (2008: proposed) 2.00 2.00
Share price, 31st December 62.50 63.75
Shareholders’ equity 65.27 71.14
1
ÖSTERSUND
UPPSALA
STOCKHOLM VÄSTERÅS
ESKILSTUNA
MOTALA
BORÅS
VÄXJÖ KALMAR HALMSTAD
MALMÖ
The Managing Director’s Statement
“We must be ready to handle a range of future scenarios and be able to both speed up and ease off.”
the past year
2008 was, in many ways, a turbulent year with a rapid turnaround in the economy and a global financial crisis. This has affected trade and industry across the board, not least including real estate companies, whose operating preconditions have become more uncertain. Consumption has tapered off for the first time in a decade and the financing of development projects has not been a given.
The ability to deliver an operating activities result of SEK 537 million – a figure that exceeded the forecast one of SEK 500 million – in a year as uncertain as the past one is a sign of real strength. The year has been characterised by a high developmental rate on ongoing projects. Our goal is to invest SEK 1 billion in in-house development projects. We invested SEK 1.2 billion, yielding a return that was considerably higher than the acquisition alternatives. The fact that we succeeded in achieving our overall goals is largely due to the fantastic efforts of our staff, working in close cooperation with our customers. Thank you to everyone for all you have done!
Investments in projects during the course of the year have made us even stronger in a number of strategic subsidiary markets. Gränby Centrum in Uppsala has been expanded. Development work aimed at making Sickla into more of a full service environment has continued, with the expansion of Sickla Galleria and the new and unique Kunskapsgallerian. We have also made a serious start on the remodelling of Farsta Centrum and Mobilia in Malmö, with the aim of transforming them into attractive full service environments.
Our work on our office properties has also been very successful during the year. Substantial lets have been agreed in Sickla to companies such as Atlas Copco, and in the Norra Station area, where we have also made a strategic acquisition of an office property during the year.
economic development – the rental and real estate market
We are in the midst of a recession whose depth and length are difficult to predict. The financial market has changed dramatically in a short space of time and made it increasingly difficult for companies to manage their financing. Government initiatives notwithstanding, the financial market has still not begun to function satisfactorily. The recession has also led to some levelling off in consumption.
The rental market has been strong overall during the year in the markets in which Atrium Ljungberg operates. The number of office property vacancies has fallen in Stockholm and rents have remained stable. There were, however, signs of reduced demand in late 2008, with rents falling in the wake of the recession.
In the retail sector, demand for premises has fallen substantially on the part of retail companies who sell capital goods. There is also an increased caution amongst other retail sectors, particularly with regard to new establishments. The rental trend within the retail trade slowed in 2008 and will, in all probability, continue to perform poorly in the immediate future.
The real estate market in 2008 was characterised by considerably fewer transactions than in recent years and by more investors – particularly foreign ones – leaving the Swedish real estate market completely. The yield requirements for properties have generally increased and the difference between strong and weak locations and products has grown.
Atrium Ljungberg calculates that the yield requirement for our properties has increased by an average of 0.6 per cent during the year. This has been compensated for, in part, by efficiently completed projects and increased operating nets.
The stock market has performed negatively over the year as a whole. The SIX real estate index has fallen by 24 per cent. Atrium Ljungberg has performed well with its share price remaining largely unchanged during the year (-2 per cent).
2
The Managing Director’s Statement operations and strategy
Our aim is to own and develop attractive full service environments in strong subsidiary markets in Sweden.
Our operations are concentrated in strong subsidiary markets. In Stockholm, for example, we are located in Sickla, Kista and Farsta, on Södermalm, in Norra Station, and around Hötorget. These subsidiary markets have good locations with good prospects for the future and are areas in which we can help create long-term sustainable full service environments.
Strategically, it continues to be important that we interact personally with our clients and conduct development using our own in-house resources. We have therefore built up a workforce with key skills in every aspect of our commercial process, from business development and project management to letting and management.
Working towards long-term sustainable development is both a given and a natural thing to do for all of us here at Atrium Ljungberg. We want to create and develop pleasant and healthy environ- ments and meeting places that contribute to sound societal development, not just economically, but environmentally and socially too. The sustainability aspect must, therefore, be considered through- out the commercial process and be a part of our day-to-day operations.
The operations of our profitable subsidiary company, TL Bygg, which primarily builds on behalf of external clients, is a smaller but important part of Atrium Ljungberg’s operations.
TL Bygg’s operations focus on repairs, maintenance and construction services – an approach that has proven to be successful in boom times and recessions alike. TL Bygg also ensures that we have our own in-house construction expertise that we can exploit in conjunction with complex renovation projects, for example.
outlook for the future
It has seldom been so difficult to assess tomorrow’s economic playing field as it is at present.
Some people are talking about a turn around in a year or so, while others believe that this will be a very long and deep recession. We must be ready to handle a range of future scenarios and be able to both speed up and ease off. There will be substantial competition both for customers and for the locations in which they choose to establish their businesses. There is also considerable uncertainty, in the short-term, with regard to financing for customers and us, as real estate companies, alike.
Atrium Ljungberg has every chance of success. Our greatest strength is our long-term approach, coupled with strong customer relationships and long rental agreements. We have a combination of different types of premises, with office and retail premises providing a solid foundation for the portfolio, and are located in subsidiary markets that I am convinced will out-perform other markets in future. We have strong key ratios and a strong financial base that gives us the potential for doing good business in a variety of market conditions. We also have a project portfolio that offers the potential for expansion and phased implementation of our projects, depending on market condi- tions at the time.
Atrium Ljungberg doesn’t just build – we create living environments for people, for the retail sector and for businesses. We aim to be the best real estate company in Sweden when it comes to taking care of our customers, our meeting places and our properties. Our work is based, at all times, on the customer and their business, and our conduct follows our fundamental values – a long-term approach, cooperation and reliability. We build partnerships and keep our prom- ises. Our day to day work is based on internal and external cooperation and on constantly having the courage to think along new lines and choose our own path. I am convinced that existing and future customers will place an even greater value on Atrium Ljungberg’s funda- mental values in today’s uncertain market.
A good 2008 with, amongst other things, efficiently completed projects that will generate increased rental income in future, will lay the foundations for ensuring that 2009 is a good year too.
Anders Nylander
Managing Director
3 2
Business concept and vision
Business concept
Through long-term ownership, development and management, we offer our customers attractive retail, office and full service environments in strong subsidiary markets.
Using our own in-house expertise and an holistic approach, we generate value added for our customers and partners and generate growth in value within the company.
Vision
“We create living meeting places for people, for the retail sector and for businesses.”
strategies
proXimity to customers. By developing and managing properties in close cooperation with customers and partners, we enable our customers’
needs to be met while simultaneously creating attractive and practical environments. All manage- ment personnel are locally based within the respec- tive market area to ensure their proximity to cus- tomers. Our aim is to have the industry’s most satisfied customers.
eXpertise. We have expert in-house personnel in key positions in the areas that form the basis of our operations – the customer and the transaction.
We steer and manage the entire business process ourselves – from acquisition, ideas work and con- cept development to construction and management.
This helps ensure greater profitability and gener- ates value added for our customers. It also gener- ates the potential for having the industry’s most committed employees.
concentrAtion. Our operations are concentrated on long-term strong subsidiary markets where the potential exists for long-term growth in value and where we can have a big enough presence to head development and have in-depth familiarity with the local market. This generates increased competi- tiveness.
continuity. Commercial decisions are based on a long-term approach to ownership which, amongst other things, generates the potential for sound, long-lasting customer relationships, renewed rental agreements, and sustainable enterprise.
comBinAtion. Office and retail premises are combined with service, cultural, educational and residential elements in order to generate living and attractive premises and environments. It also pro- vides a risk spread that makes us stronger in the long term over business cycles.
z
z
Atrium Ljungberg is one of Sweden’s biggest real estate companies and has been listed on the NASDAQ OMX Stockholm exchange since 1994. The company takes a long-term approach to ownership and its goal is to create attractive and functional environments for both our customers and our customers’ customers. We develop existing premises and build new ones, and combine this with in-house professional management. This allows us to achieve our goals and to generate good profitability and growth in value.
Providing a varied content for a property and an area creates attractive full service environments in which to live, work, shop and be. The combination may comprise retail outlets, workplaces and residential accommodation, and can also include a range of service and social functions, such as restaurants, health care facilities, and cultural centres, such as cinemas, galleries, arts and crafts premises, and educational facilities. Our vision is, therefore, to create living meeting places and not just to build. Our ambition is to be the real estate company that leads development in this field in Sweden and which takes better care of its customers and properties than any other company.
We don’t just build – we create living meeting places
4
Goals and goal fulfilment
goals
• The operating surplus shall increase by 10 per cent per annum.
• Investments in in-house projects shall total SEK 1 billion per year over a five year period.
• The equity/assets ratio shall be no lower than 30 per cent.
• The interest coverage ratio shall be no lower than 2.0.
• The dividend shall correspond to a minimum of 50 per cent of the profit before realised and unrealised changes in value, after estimated tax, unless investments or the company’s financial position dictate otherwise.
z z
2008 has been a year of intensive project development. This has had a negative effect on the operating surplus during the year but will have positive effects in 2009.
The operating surplus for 2008 totalled SEK 935 million (SEK 941 m), corresponding to a fall of less than 1 per cent. Atrium Ljungberg has run a number of major development projects during the year, resulting in areas being vacated for renovation work. A number of properties were also sold in 2007 in conjunction with the restructuring of the holding, with the premises vacated in 2008.
Collectively, this resulted in a lower operating surplus in 2008 than in 2007. A number of the projects in progress in 2008 were completed by the end of the year or in early 2009, which will mean increased rental income in 2009.
SEK 1.2 billion has been invested in our own properties during the year. Properties have been acquired for a total of SEK 320 million and sales have been made corresponding to an underlying property value of SEK 85 million. Net investments totalled SEK 1,540 million.
The economic history of the company in its current form, after the merger between LjungbergGruppen and Atrium Fastigheter at the end of 2006 is only accurate as of 2007 and comparative figures from earlier years have hence not been reported, other than in the multiple year overviews on pages 61-63.
The financial goals remain unchanged for 2009. The company-wide goals have been broken down and concretised in business and action plans for all departments and functions within the company, both by property and for projects and administrative functions.
goal fulfilment
interest coVerAge rAtio
diVidend As A percentAge inVestments in in-house projects
operAting surpLus, increAse
eQuity/Assets rAtio -5
0 5 10 15
2007 2008
%
-0.64 14
700 800 900 1,000 1,100 1,200 1,300
2007 2008 SEK m
947 1,220
0 10 20 30 40
50 42.4 45.5
60
2007 2008
%
0 1 2
2.5 3 3.0
2007 2008 multiple
%
40 50
67.3 60 59.4 70
2007 2008
5 4
Business model and processes
acquisition The process
managementThe process The project development
process
All acquisitions are made within the framework of the chosen business concept and strategy.
Acquisitions can be made if they offer strategic benefits or if the future return, after in-house project development, is adjudged to significantly exceed the return at the time of acquisition.
Atrium Ljungberg is mainly interested in objects in strong locations with considerable developmental potential and/or development rights, and which often entail complex projects.
Acquisition processes are handled by the company’s business development department and acquisition-related decisions are taken by the Board of Directors.
The project development process comprises three phases: concept and vision, development, and implementation. All phases are run by in-house expert personnel within the company’s various functions.
The project development process has, over the years, generated good profitability and growth in value within the company and is described in greater detail on pages 8-9.
At the beginning of 2009, the company’s existing development rights totalled ca. 270,000m² and further potential exists if alterations to detailed development plans go through. The development rights are presented in a table on page 12.
Property management is divided into ten or so market areas, based on geography and type of premises.
All personnel are based on the properties that fall within the market area in question, with ca. 5-15 employees based in every market area. The management process can be divided into two interacting components: taking care of the customer and the transaction, and taking care of the property. Over and above daily contacts, planned and structured customer meetings are held with customers between 1 and 4 times every year, depending on the size of the customer and the property and the requirements involved.
Property inspections are carried out daily or weekly and budget and result reviews are conducted five times a year for each property.
Atrium Ljungberg’s business model is largely characterised by prop- erty development, by in-house expertise, and by both internal and external cooperation.
concept and vision
Commercial and external world analyses in cooperation with customers and partners lead to a vision for content and structure.
development
The vision is concretised with architects.
Customer and partner support for structure and content are gained through
agreements.
Acquisition
Acquisitions may be made if strategic benefits can be achieved or if a very good return can be obtained as a result of development.
Focusing on the transaction and the customer, on a long-term approach, on cooperation, reliability and innovative thinking.
Values
Our values permeate everything we do throughout the business process. These values are based on focus- ing on the transaction and the customer. Our operations are based on a long-term approach to both own- ership and our relationships with customers and partners. Cooperation, reliability and innovative thinking shall permeate our methodology. We cooperate across boundaries, generating opportunities within the company and together with our customers. Our brand name shall be strongly associated with reliability. We keep our promises and our word is good. Innovative thinking throughout the transaction process enables us to generate the preconditions for having the courage to go our own way and to think along new lines.
6
Our real estate holding is concentrated on strong subsidiary markets and located in attractive environments that often include not only residential accommodation and workplaces, but retail and service outlets. This generates attractiveness and synergy effects.
We have an exciting and varied project portfolio with substantial existing development rights that enables us to grow organically at the pace permitted by market conditions, and with considerably better profitability than that offered by the acquisition alternatives. Our long-term approach enables us to take decisions that are economically and environmentally sustainable over time.
We have our own committed and expert personnel in house for every aspect of the operations encountered by our customers, i.e. our own staff who work with development, project implementation and management. The customer should always feel that we take good care of them and that our interactions with them are characterised by a high degree of professionalism. We are passionate about what we do!
Strength factors
z z z
implementation
Procurement and implementation of the construction process in cooperation with customers and the management organisation.
management
Responsibility for the customer and the property are transferred to the management organisation once the property is completed and the customer has moved in.
Focusing on the transaction and the customer, on a long-term approach, on cooperation, reliability and innovative thinking.
7 6
Project development
project development – part of Atrium Ljungberg’s business process
Project development accounts for a substantial part of Atrium Ljungberg’s business process. Transformation, development, new construction and extension ensure an ongoing refinement of existing retail, office and commercial environments. The projects are often complex and are designed to generate profitability and long-term sus- tainable environments and to contribute to a positive urban develop- ment in the areas in which Atrium Ljungberg operates.
The goal is for Atrium Ljungberg’s development projects to yield a return that exceeds that of the acquisition alternative by between 2 and 3 percentage points.
The project portfolio is shown on page 12.
in-house project development – a corporate strength
The project development work is conducted, from concept to comple- tion, by the company’s in-house experts.
A steering group made up of staff from the business development, project management and management functions is appointed for major projects and remains actively involved throughout the project.
The steering group’s work is headed by a steering group chair- person from the company’s management group. While the project is in progress, the steering group cooperates extensively with several de- partments within the company and with external experts, depending on the nature of the project and precise stage of the process.
Conducting project development in-house offers Atrium Ljung- berg the following advantages:
• Direct contact with the customer at all times.
• Early involvement by different parts of the organisation enables the vision and goals to be tracked from the beginning of the project to its end.
• A commercial approach is built into every aspect of the project.
• Faster and simpler handover from one part of the organisation to another.
• The mixture of skills ensures that all aspects are taken into account and that both the product and the transaction is viewed from an all- embracing perspective.
• The all-embracing perspective generates the potential for developing unique solutions, which is critical for companies who wish to be at the forefront of developments in the field.
• Short and quick decision-making routes enable the project to be conducted at a high tempo, thereby cutting costs.
Focusing on the transaction and the customer
A profitable transaction and focusing on the customer’s needs are our primary concern, and one that permeates the entire project devel- opment process. The entire development work process is, therefore, conducted in close cooperation with local authorities, key customers and other stakeholders, in order to ensure that the product is com- mercially and long-term sustainable, attractive to the intended target groups, and that it strengthens the customer’s business operations.
the ideas and vision phase
When a need or an opportunity arises, the work starts by structuring an underlying vision, based on an idea. The work is conducted by the company’s business development department and principally involves investigating the market and the preconditions obtaining for the pro- ject in question. Carefully selected external and market analyses are carried out to identify target groups, trade and industry structure and the area’s future potential. The property’s strengths and weaknesses and its links with the surrounding area are also analysed at this stage.
Cooperation is a key concept during the ideas and vision phase.
Close cooperation with local authority representatives is important in enabling Atrium Ljungberg to build long-term strong environments that contribute to positive urban development, but also in envisaging the ways in which the project can achieve synergy effects with the surrounding area. Comments and impressions from key customers, consumers and other stakeholders are gathered to identify both the needs of the intended target group and basic qualities required. Inspi- ration is also taken from other good examples in the market.
A long-term vision is formulated in which the project’s content, target group, profile and preconditions are clearly described. The vision is the underlying idea that will then permeate the entire project in everything from content to structure.
By conducting development projects in-house, we build the product and the transaction on the foundation of an all-embracing perspective.
Unique and sustainable solutions are developed in close cooperation with local authorities, customers and other stakeholders.
ideas and vision development implementation
Acquisition Management
8
Atlas Copco and Atrium Ljungberg discuss their joint project – the new office block that will be built in Sickla and which will house both companies’ head offices. The discussions include addressing such issues as the work- ing environment with ON Arkitekter.
development phase
When the potential exists for realising the long-term vision, the devel- opment work can begin.
This phase involves investigating the physical and commercial preconditions in greater depth in order to form the basis for an overall programme description. The physical preconditions may include the traffic situation, the environment, noise, and antiquarian issues. When necessary, work also begins on the detailed planning work at this stage.
The programme description is formulated, based on the vision, in cooperation with the local authority. The vision also forms the basis for the architects who are involved, often in parallel engagements.
The architects’ proposals are evaluated in cooperation with the local authority and once an architect has been chosen, work begins on draw-ing up a more detailed programme description. The investiga- tions are pursued in greater depth and internal synoptic plans and layouts are drawn up. Commercial contacts are made with key customers and contracts are signed. A preliminary timetable and a detailed investment costing are drawn up and presented to the Board, and form the basis for an investment decision.
Investment decisions for the entire construction implementation process are based on whether a good return can be achieved and on contracts having been signed for the majority of the floor space.
If a decision to invest is taken by the Board, a number of subsidiary projects are launched, such as signposting programmes, lighting programmes, external environment programmes, etc.
implementation phase
The implementation phase sees the project being guided to the project goals set. Satisfied customers and a long-term approach to the design of buildings, in which low operating and maintenance costs, flexibility and sustainable solutions are sought, act as general guidelines for all projects. Goals with regard to returns, timing and product are specific to every project.
Atrium Ljungberg’s larger new construction and renovation projects are managed and conducted by the company’s own project department. The work is organised by project managers who form part of the project’s steering group and who are responsible for the project’s implementation, from the point when the decision to build is taken until the handover to the management personnel. The aim is for the project managers, planning managers and tenant coordinators to comprise in-house personnel. External consultants are mainly used to reinforce our own organisation.
The methodology Atrium Ljungberg uses cuts lead times and improves control over the construction process, thereby facilitating dealings with the customer. The planning and construction work can be conducted in parallel, enabling construction work to begin and completion to be achieved earlier than would otherwise be the case.
The construction implementation process is conducted in continued close cooperation with the steering group and with other personnel within the business development and management departments. The important cooperation with customers and the customers’ customers is also intensified at this stage. Ensuring that everyone involved, both within the company and external contrac- tors, are working towards the same goal scenario is an important part of the implementation phase. Clear project routines in which methodol-ogies, routines, templates etc., are described are, therefore, drawn up.
Continuous feedback is provided for the Board as the implemen- tation phase proceeds and contractors are procured, enabling the Board to conduct follow-up work on costings and returns.
completion
Once the construction process is finished and the project is comple- ted, primary responsibility is transferred to the management person- nel on site. The management personnel are responsible for the custo- mer, for the ongoing operations, and for ensuring that the concept and vision are carried forward in business plans and market plans.
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sickla Kunskapsgalleria – a successful project
the vision of a learning environment is born
The idea of a place where education and learning are part of a wider context was born from Nacka local authority’s need for more educational centres. Atrium Ljungberg, which had modernised an industrial property and opened the Designgymnasiet upper secondary school in Sickla some years earlier, was ready to take the next step in the development of learning as part of the Sickla area.
The vision of a modern learning environment in which young people would interact with adults in a natural and informal way, in which contemporary and future educational requirements would be met, and in which trade and industry, research and organisations would be integrated with upper secondary school and further education facilities, was formed in close cooperation with Nacka’s local authority. Learning would be the new component added to the overall plan for trans- forming Sickla into a hub for work, retail, culture and service.
many people helped develop the idea
The idea of a Kunskapsgalleria [Knowledge Mall] was tried out with several different players, with independent and state school principals contributing their extensive expertise. The idea aroused considerable interest and the reactions were positive.
A steering group was formed with representatives of both Atrium Ljungberg and Nacka local authority, and several potential players were contacted through networks built up through partners.
The original vision continued to be the underlying idea behind the project, but the product was further developed and refined during the cooperation process.
unconventional approach – a must
Many people were interested in the project, but our partners were chosen on the basis of the ex- isting vision. A common desire and ability to work together, to adopt unconventional approaches, was a basic precondition of the viability of realising the vision. Declarations of intent were signed with those who chose to become involved in the project and the participants collectively drew up a programme description.
Joint study trips etc., were organised in order to generate a shared goal scenario and inspira- tion was drawn from such sources as IKEA’s meeting and training centre, Sockerbruket, Dunkers’
cultural centre in Helsingborg, and Malmö University.
unique and unlimited learning centre
Real drive, vigorous ambassadorial activity, and close cooperation enabled the project to be com- pleted in a very short space of time – from idea to completion in two years. The vision has become a reality and there is now a unique and unlimited learning centre in Sickla.
It is a place where young people can be in an adult environment and a place where upper secon- dary school facilities, trade and industry, research and organisations can meet and interact in the same premises, enabling new energies and a desire to learn to be born.
Cultural and musical educational courses interact, in the Kunskapsgallerian, with courses in international economics and trade designed to meet the needs of the world of tomorrow and the entrepreneurs of the future.
The Kunskapsgallerian is home to the newly opened municipal upper secondary school, YBC [Young Business Creatives], and two independent schools – Vittra, which offers science courses,
The idea of creating a meeting place for learning was born from a need. And thanks to carefully cultivated relationships and an open cooperation model, the project was completed over the course of just two years. The start of the spring term in January 2009 saw the opening of a unique learning environ- ment in which upper secondary school, further education, trade and industry, research and organisations and their facilities live side by side.
“There are numerous advantages to running an upper secondary school in close cooperation with other players in the educational sector.
We can all benefit in terms of efficiency by making intelligent use of shared resources. YBC sees considerable potential for exciting and ground- breaking joint projects in cooperation with our colleagues in the building.”
HANS RENMAN, PRINCIPAL OF YBC LETTING AREA 10,000M2
SPACE FOR 1,500 PEOPLE
• YBC – newly opened municipal upper secondary school (economics, business studies and the International Baccalaureate Diploma Programme)
• Rytmus Musikergymnasiet – independant school
• Vittra – independent school (science and economics)
• Karriär Nacka (employment consultants, job centre, study and career guidance officers, mentors)
• Health centre (naprapaths, physiologists, physicians)
• Didaktus (preschool teachers, nurse)
• Atlas Copco Tools Nordic
(research & development, laboratories)
• Mälardalen University (innovation & design)
• Contemplation room, (contemplation in cooperation with the Church of Sweden )
• Kaospiloterna entrepreneurial training (process project management, social entrepreneurship)
• Restaurang Sickla restaurant
• Cirkus le Fou (circus school)
• Building manager
• Interactive Institute (interactive art as a pedagogic tool)
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and Rytmus Musikergymnasium for musical studies. The learning environment is further comple- mented by the circus school, Cirkus le Fou.
Health is a key issue throughout the Kunskapsgallerian concept. A health centre with napra- paths, physiologists and physicians is available on site, along with facilities offering the chance to exercise both body and soul. A shared open-plan restaurant specialising in healthy food has been built on the building’s ground floor. The restaurant is open both to everyone working within the Kunskapsgallerian and to the general public. A Contemplation Room has been set up in coopera- tion with the Church of Sweden, offering peace and tranquillity as a learning tool.
The architecture and décor encourage creativity and spontaneous interaction between young people and adults and between education and trade and industry. The building’s interactive artworks, which have been produced in cooperation with the Interactive Institute, enliven the environment by injecting even more creative elements.
The Kunskapsgallerian has its own building manager, offering a shared service and security function for everyone in the building. The building manager is accessible to everyone, to answer questions and help people in the building with a wide variety of large and small issues.
The Kunskapsgallerian allows young people to spend time in an adult environment and offers a place where new energy and a desire to learn can arise from the interaction of upper secondary school, further education, trade and industry, research and organisation facilities in the same premises.
The Kunskapsgallerian restaurant, specialising in healthy food, is open both to everyone working in the building and to the general public.
“i want everyone who comes to the Kunskapsgallerian to be well- received and i always ask if there’s anything i can help them with.”
GORAN PEJCIC, BUILDING MANAGER OF KUNSKAPSGALLERIAN M7, WINNER OF THE “BEST BUILDING MANAGER IN STOCKHOLM, 2008” AWARD FROM THE CITY OF STOCKHOLM.
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The project portfolio
Atrium Ljungberg’s goal is to invest SEK 1 billion per year in its in-house development projects.
The implementation rate is affected by market conditions and the progression of the detailed planning work. The projects are normally divided into phases, based on the letting situation.
The project portfolio is extensive and currently totals 389,000m² project area, divided into new renovation and new construction work in existing and potential development rights. The project portfolio corresponds to a future investment of ca. SEK 6 billion and is summarised in the following tables.
potential development projects – completed detailed development plan
Project/Property Renovation New Premises Project area, Investment, Completion construction type m2, BTA SEK m 1)
Rådhuset Uppsala, Dragarbrunn 19:1 x x Retail 4,000 2009
Botkyrka Handel, Tegelbruket 1 x Retail 12,000 2009
Gränby Centrum, Brillinge x Retail 60,000 2009
Sickla, Sicklaön 115:1 x Offices 2,000 2009
Sickla, Sicklaön 83:22 x Offices 20,000 2009,2011
Sickla, Sicklaön 83:32 x Offices 10,000 2009
Haninge, Söderby Huvudgård 2:43 x Retail 10,000 2010
Sickla, Sicklaön 346:1 x x Offices 15,000 2015
total 133,000 2,000
potential development projects – change to detailed development plan required
Project/Property Renovation New Premises Project area, Investment, Completion construction type m2, BTA SEK m 1)
Mobilia Malmö, Bohus 8 x x Retail 30,000 2009-2011
Kista, land and allocation agreement x Offices 20,000 2010
Rotebro, Rotundan 1 x Retail 10,000 2010
Gränby Centrum, Gränby 21:4 x Retail 35,000 2010
Halmstad, Stormarknaden 1 x Retail 10,000 2010
Sickla, Sicklaön 117:17 x Offices 10,000 2011
Sickla, Sicklaön 87:1 x Offices 5,000 2011
total 120,000 2,500
1) Estimated investment ex. acquisition cost. 2) Temporary building permit.
ongoing/approved development projects
Project/Property Renovation New Premises Project area, Investment, Completion construction type m2, LOA SEK m 1)
Gränby Centrum, Gränby 21:4 x x Retail 9,000 2009
PUB, Torgvågen 7 x Retail 7,000 2009
Sickla Galleria, Sicklaön 83:22 x x Parking/
Retail 10,000 2009
Sickla Kunskapsgalleria, Sicklaön 83:22 x Education 12,000 2009
Västberga Handel, Arbetsstolen 3 2) x x Retail 18,000 2009
Mobilia Malmö, Bohus 7 x Retail/
Residential 9,000 2009
Arosian Västerås, Igor 8 x x Retail 14,000 2010
Mittpunkten Östersund, Månadsmötet 9 x Retail 10,000 2010
Haninge, Söderby Huvudgård 2:43 x x Retail 13,000 2010
Farsta Centrum, Storö 21 x x Retail 20,000 2010
New office, Atlas Copco Sickla,
Sicklaön 83:22 x Offices 14,000 2011
total 136,000 2,800
Of which remaining investment as of 31st Dec 2008 1,600
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Market position
Text and diagrams | Leimdörfer
Atrium Ljungberg – one of sweden’s biggest listed real estate companies
At the end of 2008, 18 Swedish real estate companies with a combined market value of ca. SEK 60 billion were listed on the NASDAQ OMX Stockholm exchange. Atrium Ljungberg’s market value was SEK 8.1 billion, as of 31st December 2008, corresponding to 14 per cent of the listed real estate sector in Sweden. The corresponding figure one year ago was 10 per cent, and 2008 has seen Atrium Ljungberg go from being the fifth largest listed Swedish real estate company to the third largest. The companies with a bigger market value than Atrium Ljungberg are Hufvudstaden and Castellum.
concentration and refinement
Atrium Ljungberg is the only major listed real estate company in Sweden to focus specifically on the development and management of retail properties. The company’s combined rental value at the turn of the year totalled SEK 1.7 billion. Retail accounted for 56 per cent of the rental value, which is a considerably higher figure than for any other company. There are, however, companies with a high degree of concentration on other property types, such as Home Properties (hotels) and Heba (residential accommodation).
Atrium Ljungberg also has a high degree of geographic concentration, with properties in the Stockholm region representing 78 per cent of the total rental value. With a rental value of SEK 1.3 billion attributable to the Stockholm region, Atrium Ljungberg is, together with Fabege and Hufvudstaden, the biggest listed real estate companies in this subsidiary market. The housing company, Heba, is also geographically concentrated on Stockholm, but is considerably smaller in terms of overall size.
Atrium Ljungberg is one of Sweden’s biggest listed real estate companies and the only listed company to focus specifically on the development and management of retail properties. The company is also strongly positioned within the office properties sector in the Stockholm region.
Atrium Ljungberg
Wallenstam
Kungsleden Brinova
Diös Fast Partner
Whilborgs Fastigheter Fabege Hufvudstaden Heba
Castellum Klövern Balder
Catena
LOW
LOW HIGH
HIGH Sagax
Home Properties Din Bostad
Dagon
Degree of geographic concentration Degree of concentration
of property type
Real estate companies with a high degree of geographical concentration are shown to the right of the matrix, while companies with a high degree of concentration by property type are shown in the upper half of the matrix. Each company is represented by a circle whose size is proportional to a standard estimate of the property holding’s market value. The diagram is based on a model developed by Leim- dorfer to measure geographic concentration and concentration on property type.
mArKet cApitALisAtion And Letting AreA 1)
0 3 6 9 12 15
Market capitalisation
Klövern
Wihlbor gs F
astighet er Wall
enstam Fabege Kungsl
eden
Atrium Ljungber g Castellum Hufvuds
taden
0 700 1 400 2 100 2 800 3 500
Letting area
SEK b 1 000m2
rentAL VALue By region 1) rentAL VALue By usAge 1)
0 0.5 1.0 1.5 2.0 2.5 3.0
SEK b Wihlborgs Fastigheter
Hufvudstaden Wallenstam Klövern Atrium Ljungberg Fabege Kungsleden Castellum
Other Offices Retail
0 0.5 1.0 1.5 2.0 2.5 3.0
SEK b Wihlborgs Fastigheter
Hufvudstaden Wallenstam Klövern Atrium Ljungberg Fabege Kungsleden Castellum
Stockholm Gothenburg
Malmö Other
1) As of 31st Dec.2008, as per the Leimdörfer database.
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