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A N N U A L R E P O R T 2 0 0 6

Brinova Develops Property Values

Brinova does not publish fi nancial information in English. This is part of the report in Swedish, a direct translation and should be seen as a service to readers.

(1,1) -1- eng.omsl.indd 07-06-04 11.29.46 (1,1) -1- eng.omsl.indd 07-06-04 11.29.46

(2)

Highlights of 2006 1 Chief Executive Offi cer’s Review 2 Business model, aims and strategies 4

Operations in 2006 9

Projects business area 12

Logistics business area 14

Residential & Commercial business area 16 Property valuation and fi nancial strategy 18 Shareholdings business area 20 Workforce 21 Environmental certifi cation 22

Market overview 23

Risk management 25

Brinova shares 29

Corporate governance 31

Company management 34

Board 35

Five-year summary 36

Property list 37

Defi nitions 38

Addresses 39

C O N T E N T S

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2003

Total of 557,000 sq.m., mainly in South and Central Sweden:

220,000 sq.m. in the Logistics business area, 226,000 sq.m.

in the Commercial business area and 111,000 sq.m. in the Residential business area.

Acquisitions:

Logistics business area: 1,000 sq.m.

Commercial business area: 2,000 sq.m.

Residential business area: 19,000 sq.m.

Divestments

Commercial business area: 24,000 sq.m.

Residential business area: 88,000 sq.m.

Realised changes in value: SEK 25m.

Gullbergsvass 1:1, Gothenburg.

(1,1) -2- eng.omsl.indd 07-06-04 11.30.27 (1,1) -2- eng.omsl.indd 07-06-04 11.30.27

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Brinova today

Brinova generates long-term value by purchas- ing, improving, managing and selling property holdings and shareholdings, and by structuring property assets.

Property holdings

Brinova is active in every phase of a property holding:

purchase, improvement, management and sale. We lay great emphasis on developing the potential of our properties.

Logistics

Logistics properties: large warehouse and terminal proper- ties along the European motorway network, where goods are stored and forwarded.

Residential & Commercial

Properties that can be further developed in cooperation with customers and users.

Projects

Properties under construction and those in which major conversion projects were under way at New Year 2006.

Shareholdings

Brinova owns shares in successful property companies in many of the most interesting property markets in Sweden.

These companies are characterised by high market share, good reputation, large business capacity and interesting growth strategies. We also assist in the creation of new property companies as a part-owner.

Wihlborgs Fastigheter AB

Wihlborgs is a property company that focuses on commer- cial properties in the Öresund region. The property stock is located in Malmö and Helsingborg, where Wihlborgs is a leading company, and in Lund and Copenhagen.

Fabege AB

Fabege is a property company that concentrates on com- mercial properties and projects in the Stockholm region.

Diös Fastigheter AB

Diös Properties’ niche is properties with a high yield in North Sweden, primarily in Borlänge, Falun, Mora, Öster- sund and Gävle.

Structuring of property assets — bonds

To permit further focus on, and development of, bond business a separate company was formed for these activities in September 2006. Accordingly, the Bonds business area was taken over by Amplion Strukturkapital AB, a newly formed limited company, which is jointly owned by Brinova and Catella Structured Finance A/S, Denmark.

2004

Acquisitions:

Projects business area: 31,000 sq.m.

Divestments:

Commercial business area: 74,000 sq.m.

Residential business area: 29,000 sq.m.

Realised changes in value: SEK 24m.

2005

Acquisitions:

Blocks of shares in Wihlborgs, Fabege and Diös.

Divestments:

Logistics business area: 23,000 sq.m.

Commercial business area: 11,000 sq.m.

Realised changes in value: SEK 26m.

Unrealised changes in value: SEK 89m.

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 PART OF BRINOVA ANNUAL REPORT 2006

0 5 10 15 20

2003

%

Target

2004 2005 2006

The Group in figures 31 Dec. 2006 31 Dec. 2005 Change, % Profit after net financial items, SEK m 428.4 247.6 +73

Profit for the year, SEK m 346.0 22.2 +63

Balance-sheet total, SEK m 6,214.9 4,662.5 +33

Shareholders’ equity per share, SEK 118.31 9.62 +29

Earnings per share, SEK 17.15 8.43 –7

Property income, SEK m 297.5 22.4 +40

Net operating income, SEK m 219.4 49. +47

Rental value, SEK m

)

335.7 25.8 +33

Lettable area, ’000 sq.m. 612.6 448.0 +36

Yield before property administration, %

) 2)

7.5 8.2 -0.7

1) On remaining properties at year-end.

2) Percentage points.

Highlights of 2006

Return on shareholders’ equity

0 9 18 27 36 45

2004 2003

%

Target

2005 2006

Equity ratio

0 1 2 3 4 5

2004 2003 times

Target

2005 2006

Interest-coverage ratio

Acquisitions:

Logistics business area: 56,000 sq.m.

Commercial business area: 29,000 sq.m.

Projects business area: 2,000 sq.m.

Brinova initiates property bonds to give the market an interesting investment option based on property assets.

2006

Acquisitions:

Residential & Commercial business area: 25,000 sq.m.

Logistics business area: 75,000 sq.m.

Projects business area: 9,000 sq.m.

Realised changes in value: SEK 5m.

Unrealised changes in value: SEK 76m.

Divestments:

Residential & Commercial business area: 43,000 sq.m.

Logistics business area: 2,000 sq.m.

• Profit for the year was SEK 346.0m (22.2m). This figure included pre-tax profit of SEK 5.0m (26.2m) from realised changes in value from investment properties.

• Earnings per share ) amounted to SEK 7.5 (8.43).

• Pre-tax unrealised changes in value from investment properties of SEK 75.7m (89.5m) are included in the annual figure.

• During 2006, the share portfolio rose in value by SEK 498.8m. This sum was added to the company’s share- holders’ equity.

• The Board proposes a regular dividend med SEK 5.00 per share (3.50) and an extra dividend of SEK .50 per share (0.00).

• The Bonds business area was transferred to Amplion Strukturkapital AB, a company newly formed by Brinova and Catella.

1) With conversion, the number of shares rose from 17,667,458 to 22,599,231.

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2 PART OF BRINOVA ANNUAL REPORT 2006

Chief Executive Officer’s Review

Brinova: an all-round property developer

After more than three years as a listed property company, Brinova has developed strikingly in comparison with its original self: a company formed around a number of geographically and functionally dispersed properties.

Today, Brinova is considerably more focused. Through divestments, new acquisitions and strategic investments, we have improved our assets and concentrated them in strategi- cally selected localities.

Today, under its own auspices or with partners, Brinova is developing long-term value. We are doing so by acquiring, on the right terms, properties and property stocks comprising residential units, commercial premises and logistic properties

alike. These are professionally refurbished and managed in every respect, and when fully developed can be sold to serious property managers.

Thus, the old Brinova of 2003 has one thing in common with the Brinova of today: we develop property and enhance its value in every way.

Being a good landlord by developing and managing our properties in an innovative, long-term manner is, as we see it, a pledge to our customers. It is a pledge to other property managers, who can acquire properties that are interesting and well cared-for. It is a pledge to the municipalities in our market area, who can benefit from our operations since we take on disadvantaged areas and develop them up to a modern standard. And, in particular, it is a pledge to our shareholders who, in the last resort, gain from our skills and success by enjoying favourable growth in value and a good return.

Profit rise for fourth successive year

The thoroughgoing structural work and closer focus on the customers has now made Brinova both larger and more profitable.

Operating profit rose in 2006 for the fourth consecutive year, this time by 36%.

Part of this rise in profit comes, entirely according to plan, from our management operations. But a high proportion is also generated through realised and unrealised values from our work of developing and improving properties.

The properties had a total value of SEK 3,395m at 3

December 2006. This may be compared with 2003, when the portfolio was valued at SEK ,999m.

Steadily expanding market

Brinova is a company with many stakeholders. They include municipalities wishing to transform their infrastructure and create an attractive mix of residential, commercial and logistic properties; tenants, both private and commercial, who want good, functional and modern premises in attractive locations; but also managers wishing to invest in good properties of a high standard, satisfied tenants and a high yield.

All our stakeholders’ various demands and wishes contribute to a dynamic and unceasing development process.

It involves advances in logistics, ongoing urbanisation, migration to growth areas and demands for an ever higher

‘All our stakeholders’ various

demands and wishes contribute

to a dynamic and unceasing

development process.’

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3 PART OF BRINOVA ANNUAL REPORT 2006

standard of accommodation. All these factors mean that there will always be a supply of properties for us to improve.

Value growth secured by sound strategy

To make the most of Brinova’s potential to operate success- fully on the market, realise property values and attain financial objectives through management and transactions, we have made a number of key strategic choices.

We focus exclusively on growth markets. Coupled with our experience in dealing with all existing types of property, this creates a wide range of business opportunities and keeps the portfolio balanced.

We are active owners and managers of our properties,

‘We constantly seek to develop new, creative solutions that favour our stakeholders.’

‘Our ambition is to sustain this development of both property values and the property sector as a whole.’

and this generates a positive net operating income.

This enables us to await optimal

market conditions for a divestment, if this is called for.

We constantly seek to develop new, creative solutions that favour our stakeholders, such as initiating property companies and arranging new financial products, which in turn affords scope for actively expanding our operations in a profitable way, in line with our financial aims.

Unique expertise builds value

Brinova, then, is flourishing. This is largely due to the

expertise and experience possessed by the company. We have long experience of initiating and running projects, and structuring property stocks in a way that attracts the market.

We also have both the capacity and the knowledge to be able to manage and administer a multifarious range of properties, from logistic centres to apartment blocks. Where logistic properties are concerned, we also have unique specialist knowledge that gives us a prominent role in this market.

Our balanced portfolio paves the way for long-term value growth and enhanced protection against fluctuations on the various markets. Brinova’s current portfolio contains numer- ous interesting properties but our focus is, of course, on continuing to seek new projects with development potential.

The property portfolio and the companies it contains, too, developed very favourably during the year, in terms of profits and share value alike.

All in all, I find that what we have achieved together over the past few years itself proves Brinova’s ability and assures future value growth. Our

ambition is to sustain this development of both property values and the property sector as a whole.

Finally, I would like to thank all the staff for their superb contribution in 2006, as in previous years, and we face the future with confidence.

Helsingborg, March 2007

Anders Silverbåge

‘Through a significant number of divest-

ments, new acquisitions and strategic

investments, we have improved our assets

and concentrated them in strategically

selected localities.’

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4 PART OF BRINOVA ANNUAL REPORT 2006

Business model, aims and strategies

Coordinated, value-creating approach

Brinova is an active property company. We create value by acquiring land and properties of high potential and then developing and improv- ing them. We then manage them as efficiently and profitably as possible until we can divest them responsibly and at an optimal profit.

Combined with our shareholdings in well-

defined niche property stocks, these activities lay a firm foundation for new deals and further expansion.

Our mission

Brinova seeks to generate long-term value by being a proactive player in the property market: creating new property companies, structuring property assets and operating as an owner and developer of property assets, both in the form of shareholdings in property companies and through its own holdings of well-defined niche property stocks.

Brinova’s financial aims in 2006

• Over one business cycle, Brinova should show an aver- age return on shareholders’ equity at least 0 percentage points higher than the risk-free interest rate. The ‘risk-free interest rate’ means the rate on five-year government bonds.

• The target equity ratio, in the long term, is at least 30%.

• The interest-coverage ratio should not fall below .8.

• Share dividends are, in the long term, to make up at least 50% of Brinova’s profit after tax but before unrealised changes in value ) .

Brinova’s new financial aims in 2007

After the Year-End Report of 27 February 2007, the Board of Brinova revised the group’s financial aims. Now:

• Share dividends are, in the long term, to make up at least 50% of Brinova’s profit after tax but before unrealised changes in value ) .

• The interest-coverage ratio should not fall below .8.

For the property-owning business areas

• Over one business cycle, Brinova’s property business should show an average return on shareholders’ equity at least 0

percentage points higher than the risk-free interest rate. The ‘risk-free interest rate’ means the rate on five-year government bonds.

• The target equity ratio, in the long term, is at least 30%.

For the Shareholdings business area

• Over one business cycle, Brinova’s share portfolio should show an average return 2) of more than 3%.

• The target equity ratio, in the long term, is at least 50%.

1) The term ‘unrealised changes in value’ covers fluctuations in value, including tax impli- cations, of investment properties and derivates, along with corresponding items in asso ciated companies that are disclosed according to the equity method. The associated companies’ distributable profit share is maximised at the dividend obtained by Brinova.

2) Average return is calculated as the dividend received in relation to book value on the accounting (closing) date.

Gullbergsvass 1:1, Gothenburg.

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5 PART OF BRINOVA ANNUAL REPORT 2006

Strategic acquisitions Project development Improvement Financing

Management Residential Commercial Logistics Market-adjusted

sale with correct timing Market/Needs

General aims and strategy Brinova seeks to be a pro- active player in the property market and generate a re- turn on shareholders’ equity that is high and stable in the long term by:

• actively owning and developing property assets, both in the form of shareholdings in property companies and through its own holdings of well-defined niche property stocks

• using its own expertise in the sector to act as an initiator of new property companies and arranger of new financial products, based on underlying property assets structured and managed by Brinova

• having a professional organisation comprising skilful, committed employees with high ethical standards.

Business model

Project development the driver

Working with a specific customer at an early stage to optimise the project in terms of the customer’s wishes is a factor in the company’s success. Through strategic acqui- sitions, improvements geared to target groups and creative development, the foundations of our value growth are laid.

Strategic acquisitions of land and properties on stable markets pave the way for value-boosting measures. Potential for commercial development, the right risk profile and a good earning potential are other criteria for our property purchases.

Value creation through improvement and development After acquiring a property, we start developing it. This takes place, first, in the form of improvements, adapted to the target groups concerned, of existing properties by renovating and modifying them to create attractive, high-value objects.

Second, it is done by means of creative development of sites or property stocks, with new builds that culminate in new, sought-after projects of high added value.

Finally, we ensure a good net operating income and optimise capital and rental values by long-term customer- oriented management of commercial, logistic and residential properties alike.

Value-enhancing management for the long term

Thanks to the fact that we manage the refurbished properties ourselves, a stable flow of revenue is secured. This also gives us the flexibility to follow the market and consider the option

of selling completed projects when conditions are optimal.

Brinova’s properties are managed flexibly, locally

and close to our customers.

Through active manage- ment we can anticipate the tenants’ needs and swiftly adapt the properties for the tenants’ specific situation.

Value realised through well- timed sales

The sale of fully refurbished and managed properties generates a return and releases resources for acquisitions of new, advantageous objects with an ample yield potential. The timing of sales depends on the type of prop- erty concerned and the prevailing market situation. In general, a property can be sold when, for example, a serious player shows interest or when we expect to be able to manage the capital tied up in it better by reinvesting it in a new project. By and large, however, the cycles for commer- cial and residential properties are shorter than those for logistic properties since the latter, owing to long contracts and stable customers, generate a high and even return combined with an accelerating rise in value. For this reason, we do not primarily develop new logistic premises for divestment in the short term. Rather, we augment the property stock in cooper- ation with our customers with a view to long-term develop- ment. We thereby also ensure a stable cash flow. This usually applies, too, to the properties we develop in collaboration with a specific customer for that customer’s operations.

Two strong earners

Our business model is based on the value-creating concerted efforts of two strong earning areas — management and project development — and realisation of value through divestments. Brinova has extensive expertise and experience in these areas and, over the years, these strengths have resulted in numerous profitable projects and well-managed properties with high yields.

Altogether, this balance makes for a comprehensive, flexible business model with great potential for future expansion.

Broad experience

After being organised in five business areas in 2006, Brinova now comprises four cooperating business areas: Logistics, Residential & Commercial, Projects and Shareholdings.

Brinova’s long experience and proficiency in dealing with

various types of property make it possible to create interesting

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6 PART OF BRINOVA ANNUAL REPORT 2006

Business model, aims and strategies

project combinations. Thanks to the long contracts and stable cash flows of the logistics market and the higher risks and high potential returns of commercial premises, we can thereby attain a balance in terms of stable earnings and an even cash flow. Brinova’s multifaceted, flexible business model is particularly suitable for work on project development of properties and undeveloped sites, either under in-house management or through cooperation with others. In-depth knowledge and experience from disparate property types, coupled with the fact that customer wishes are paramount, put Brinova in a singularly favourable position when it comes to developing older properties and attaining a good balance between housing, commercial premises and other social functions.

This enables us to help transform old-fashioned premises

or areas into attractive properties comprising homes, shops and offices.

Focus on strategic growth markets

Brinova’s selection of localities with ample growth potential is based on high demand for commercial premises, followed by increased demand for housing. The Öresund region with its 35% of the Nordic population and Gothenburg with its substantial freight flows are key market areas for Brinova.

These regions are gateways to the new, expanding European market and Sweden’s principal commercial highways converge here.

Brinova’s logistic properties are strategically positioned along the major transport routes between Malmö, Gothen- burg and Stockholm. Jönköping, Norrköping and Örebro are important logistic hubs of this road network. They offer high long-term demand for cost-effective locations near motor- ways, rail links, airports and ports.

Local presence forges long-term relationships Brinova’s focus on geographically well-defined growth markets means that we have been able to develop both close and long-term relationships with municipalities and busi- nesses. This network, in turn, affords scope for creating

strategic joint projects and, at an early stage, obtaining valuable knowledge of needs, rents and price trends in the local markets.

Associated companies broaden the market

Our shareholdings in the three property companies Wihlborgs, Fabege and Diös are also of major strategic importance. They give us a wide-ranging geographical market with a large network of contacts and a local presence in a large part of Sweden. By the same token, we have ample opportunities for acquiring and structuring property stocks that are both large and geographically dispersed.

Clear-cut areas of expertise strategically advantageous One condition for Brinova’s ability to achieve its aims is a well-functioning organisation designed to take prompt, correct decisions. With our Board’s extensive skills, a well- composed group of committed, experienced and versatile Group management

Projects Share- holdings Logistics Residential

&

Commercial Consolidated functions

Organisation in 2007

Detail, Heideman 1, Hässleholm.

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7 PART OF BRINOVA ANNUAL REPORT 2006

Property locations, sq.m.

Projects Logistics Residential &

Commercial

2003 2006

53,241 127,144

2003 2006

79,134 99,290 8,000

21,725

2003 2006

57,622 95,996 92,309

79,396 10,736

2003 2006

46,556 63,925 169,915 41,998

Other

Total property floor space by business area, including part-owned properties, sq.m.

2003 2006

Projects 8,000 22,000

Logistics 296,302 507,522

Residential & Commercial 262,224 143,119

Total 566,526 672,641

1,697

employees with a sound understanding of market trends and a markedly decentralised organisation with short channels of command, we have what is needed to attain our goals.

From 2007, Brinova is divided into four specialist, focused business areas.

Projects business area

Through strategic acquisitions, improvements geared to target groups, and creative development, the Projects business area lays the foundations of our value growth.

In this business area, Brinova develops and improves project properties and undeveloped sites. For classifi cation as a ‘project property’, the construction or conversion require- ment must correspond to 50% of the book value of the property before construction or conversion or, alternatively, the estimated cost of the work must be at least SEK 20m. Brinova’s balanced business model creates major opportunities for successfully realising property projects and subsequently transferring them to the managing business areas.

Residential & Commercial business area

The Residential & Commercial business area acquires, manages and develops residential and commercial premises in growth areas.

Through active efforts in the operation, fl ows and measures to rationalise management, operating and mainten- ance costs are optimised. With improvements in commercial and residential premises adapted to target groups and an optimised structure in terms of shops and offi ces, we enhance both the amenities and the customer benefi ts of our proper- ties. This in turn boosts value growth in the properties, making them more attractive in the market.

Logistics business area

The Logistics business area acquires, improves and manages logistics centres for trading companies and distributors along focal communication routes in Sweden.

This business area has unique knowledge and long experience of logistic properties. The logistics sector has a marked need of customised premises and skilled, knowledge- able management. This calls for major investments but, in return, rental contracts are long and the tenants are both large and stable. The trend is, moreover, in the direction of

customers purchasing a function rather than renting premises, and this further strengthens the relationship. With this business area’s close cooperation between and Projects and its local networks, a supply of new strategically located object is generated at an early stage. Our knowledge of logistic properties and our ability to manage complex projects enable us to develop these as value-creating logistics centres that further strengthen our property portfolio.

Rising requirements and value

Underlying growth in the logistics market is good and an ever higher rate of outsourcing is expanding the customer base.

Development in commerce and production boosts the need for central distribution centres and third-party logistics. At the same time, there are few property companies with the knowledge and capacity to improve and manage logistic properties. For Brinova, which is already a leading player on the market for development and letting of logistic premises, this is favourable.

Stockholm region

2003 2006

59,749 121,167 9,567

Jönköping, Örebro, Norrköping Gothenburg region

Öresund region

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8 PART OF BRINOVA ANNUAL REPORT 2006

Business model, aims and strategies

This development has resulted in logistic properties being classified as a property type in its own right. Accordingly, financial conditions are changing in terms of both volume and interest rates. Combined with rising rents, these changes are generating higher value for logistic properties.

Shareholdings business area

The Shareholdings business area manages our holdings in the three listed property companies — Wihlborgs, Fabege and Diös — and our part-owned properties.

Thanks to our shareholdings in these listed property companies, we have an opportunity to discuss structural deals spanning several markets. This enables us to increase the number of possible properties for acquisition without losing our focus on our core business and geographical area.

With the part-owned properties and in cooperation with other operators, we develop properties in jointly owned companies.

Bonds business area

The Bonds business area was created to develop property bonds, to permit financing of properties with venture capital instead of borrowed capital.

To enable Brinova to focus on and develop this business area further, a separate company for these operations was formed in September 2006. Accordingly, our Bonds business area was taken over by the newly formed company, Amplion Strukturkapital AB, which is jointly owned by Brinova and Catella Structured Finance A/S, Denmark.

Terminalen 3, Malmö.

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9 PART OF BRINOVA ANNUAL REPORT 2006

Operations in 2006

Narrower focus on acquisitions with development potential

To optimise cash flow, risk and earnings, Brinova constantly maintains a good balance between project development and management of logistic properties, residential and commercial premises, and shareholdings. During the year under review, Brinova was organised in five independent busi- ness areas. Two were engaged in property manage- ment and one in project development, while two were in charge of shares and bonds.

The year in brief

• Profit after tax rose from SEK 22.2m to 346.0m.

• Seventeen properties valued at SEK 293.6m were divested, with a realised change in value of SEK 5.0m.

• Twenty-six properties were acquired at a value of SEK ,09.6m.

• Brinova’s shareholders’ equity rose by SEK 498.8m after the increase in the value of the share portfolio.

Fourth year of profit improvement

Total property income in 2006 was SEK 297.5m, approxi- mately 40% higher than the figure for 2005 (SEK 22.4m).

Net operating income also rose, thanks to the increased property income and improved efficiency in management, from SEK 49.m in 2005 to SEK 29.4m in 2006. Operating profit rose from SEK 345.7m in 2005 to SEK 470.m in 2006.

This rise is attributable to increased net operating income, the rise in value of the property portfolio and profit from the associated companies. Net financial income and expense improved from SEK –98. to –4.7m, primarily as a result of dividends from Fabege and Wihlborgs.

Financial targets and dividend policy — follow-up

Target Outcome Target Outcome Target Outcome Target Outcome 2006 2006 2005 2005 2004 2004

6)

2003 2003 Return on shareholders’

equity, % > 3.6 6. 3.2 9.3 9.3 .8 9.4 9.

Equity ratio, % > 30 43.0

5)

30 34.7

4)

30 29.0

3)

30 24.2

2)

Interest-coverage

ratio, times > .8 4. .8 3.4 .8 2.0 .8 .5

Share dividend, % > 50 70

)

50 57 50 32 50 37

1) Board’s proposal to the general meeting of shareholders, calculated according to the targets on page 4, with 54% assigned to the regular dividend and 16% to the extra dividend.

2) With full conversion, the equity ratio for 2003 is 34.4%.

3) With full conversion, the equity ratio for 2004 is 40.5%.

4) With full conversion, the equity ratio for 2005 is 47.0%.

5) With full conversion, the equity ratio for 2006 is 48.5%.

6) Recalculated according to the International Financial Reporting Standard (IFRS).

Property acquisitions during 2006

Business area Property Lettable

designation Municipality area, sq.m.

Logistics Källebäcksryd :408 Borås ,247

Logistics Sörby Urfjäll 38:2 Gävle ,427

Logistics Backa 8:9 Gothenburg ,969

Logistics Hästhagen 4 Helsingborg 38,04

Logistics Regulatorn 2 Huddinge 48,300

Logistics Jakobsberg 22:6 Järfälla 2,455

Logistics Älghunden 3 Jönköping 3,738

Logistics Ästanvinden 5 Karlstad ,330

Logistics Arnulf Överland  Kristianstad ,750

Logistics Slottshagen 2: Norrköping 4,99

Logistics Basfiolen 7 Norrköping ,38

Logistics Vasslan  Stockholm 5,399

Logistics Vanda  Stockholm 26,048

Logistics Värdshuset 3 Sundsvall ,52

Logistics Njursta :2 Upplands Väsby 3,484

Logistics Mosås 4:57 Örebro 2,089

Residential & Commercial Gullbergsvass : Gothenburg ,586 Residential & Commercial Tyfonen  Helsingborg 4,500 Residential & Commercial Jupiter 4 Helsingborg 3,220 Residential & Commercial Tigern 7 Landskrona ,580 Residential & Commercial Bulten 2 Åstorp 4,462

Projects Motståndet 2 Bromma ,697

Projects Jordbromalm 4:34 Haninge 0

Projects Ametisten 5 Helsingborg 7,450

Projects Kopparverket  Helsingborg 0

Projects Ättehögen 2 Jönköping 9,567

219,223

Accordingly, Brinova met its financial targets for 2006.

The market

The reduced yield requirements of the market have entailed both higher prices and stiffer competition in most market segments. Demands to find properties for acquisition with greater development potential have therefore risen, which we consider beneficial to Brinova.

Value growth realised in 2006

The introduction of IFRS means that rises in property value must be entered in the accounts on a continuous basis, as unrealised changes in value in the income statement.

During the year, Brinova sold 7 properties at a book value of SEK 293.6m and a realised profit of SEK 5.0m. The difference between the sale price attained and the acquisition value was SEK 6.m, of which SEK 5.0m is disclosed as realised changes in value and SEK 0.m as unrealised changes in value from investment properties.

Acquisitions during 2006

Brinova purchased 26 properties at a book value of SEK

,09.6m. In addition, Brinova also manages the five properties that were acquired jointly with an external partner, and which form the basis for the property bond loan issue.

Brinova bought two sites in Lockarp near Malmö, adjacent to

the outer ring road, with the intention of erecting a facility

that will be let to Cramo Sverige AB. Brinova has also

acquired two sites of some 300,000 sq.m. each in strategic

locations along and adjacent to the E4, E6 and E20 European

highways at Tostarp in Helsingborg and the E6, E20 and E22

at Sunnanå in Malmö.

(14)

0 PART OF BRINOVA ANNUAL REPORT 2006 Lettable floor space by business area

1)

Property income by business area and total net operating income

Operating profit

Distribution of property income by business area Distribution of assets by business area

Shareholdings 43.5%

Logistics 34.7%

Residential & Commercial 19.2%

Projects 2.5%

Bonds 0.1%

0 162,500 325,000 487,500 650,000

31 Dec. 2003 31 Dec. 2002

Logistics

Residential & Commercial Projects

Sq.m.

31 Dec. 2004 31 Dec. 2005 31 Dec. 2006 0

20 40 60 80 100

0 20 40 60 80 100

Q1 Q2 Q3

2003 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2004 2005 2006 Logistics

Residential & Commercial Projects Net operating income

SEK m SEK m

0 40 80 120 160 200

Operating profit excluding changes in value

Operating profit and unrealised changes in value of investment properties SEK m

Q1 Q2

2003 2004 2005 2006

Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Logistics 57.2%

Residential & Commercial 41.6%

Projects 1.2%

Property sales during 2006

Business area Property Lettable

designation Municipality area, sq.m.

Logistics Orkanen 5 Helsingborg 3,50

Logistics Grusgropen 3 Helsingborg 5,000

Logistics Sadelplatsen 0 Helsingborg 3,260

Logistics Sandseryd 2:6 Jönköping 589

Residential & Commercial Eketånga 5:47 Halmstad 3,573 Residential & Commercial Eketånga 24:49 Halmstad 5,324 Residential & Commercial Eketånga 24:37 Halmstad ,76 Residential & Commercial Eketånga 25:89 Halmstad 2,679 Residential & Commercial Fregatten 7 Halmstad ,57 Residential & Commercial Halmstad 6:48 Halmstad 3,860 Residential & Commercial Oden  Helsingborg 8,440 Residential & Commercial Mörsaren Västra 3 Helsingborg 3,789 Residential & Commercial Grusplanen 2 Helsingborg 2,305 Residential & Commercial Plattan  Kristianstad ,356 Residential & Commercial Omformaren 5 & 6 Västerås 9,435

Projects Akterspegeln 6 Helsingborg 0

55,993

Key figures for Brinova group

31 Dec. 2006 31 Dec. 2005 Financial

Yield on shareholders’ equity, % 6. 9.3

Yield on total capital, % 0.4 0.5

Interest-coverage ratio, times 4. 3.4

Equity ratio, % 43.0 34.7

Operating profit, SEK m 470. 345.7

Profit after financial income and expense, SEK m 428.4 247.6

Profit for the year, SEK m 346.0 22.2

Balance-sheet total, SEK m 6,24.9 4,662.5

Share-related Before dilution

Shareholders’ equity per share, SEK 8.3 9.62

Earnings per share, SEK 7.5 8.43

Cash flow per share, SEK –5.92 4.07

Number of outstanding shares, million 22.6 7.7

P/E ratio 8 6

After dilution

Shareholders’ equity per share, SEK 20.3 87.55

Earnings per share, SEK 4.50 3.

Cash flow per share, SEK –2.79 9.20

Number of outstanding shares, million 25. 25.

P/E ratio 0 8

Property-related

Property income, SEK m 297.5 22.4

Net operating income, SEK m 29.4 49.

Rental value, SEK m) 335.7 25.8

Economic letting ratio, % 96 96

Lettable area, ’000 sq.m. 62.6 448.0

Yield before property management, %

)

7.5 8.2

Operations in 2006

On remaining properties at year-end 2006

(15)



PART OF BRINOVA ANNUAL REPORT 2006 Lettable area by type of premises

Industrial/ Percent-

Business area, ’000 sq.m. Logistic Residential Office Retail storage Other

5)

Total age

Stockholm 4.9 – 9.5 2.0 2.4 – 28.8 2.0

Helsingborg 57.2 2.5 23.4 .3 3.9 0.4 08.7 7.7

Gothenburg/Borås 33.8 – 24.6 .3 .3 – 6.0 0.0

Örebro 63. – 2.9 – – – 66.0 0.8

Malmö 25.0 2.7 .3 3.6 0. 4.4 47. 7.7

Klippan 47.4 – 3.6 0.3 – .5 52.8 8.6

Jönköping 38.6 – 2.0 – 7.6 0.3 48.5 7.9

Hässleholm – 3.6 6.9 – 5.0 3.9 9.4 3.2

Halmstad – – .5 – 3.0 – 4.5 0.7

Other localities 20.6 0.6 0.0 8.6 3.3 4.7 75.8 2.4

Total, properties 400.6 9.4 95.7 17.1 64.6 25.2 612.6 100.0

1) Includes the Afrika 18 property in Helsingborg, which is classified as an investment property in the accounts. This property, which houses Brinova’s head office, is reported under the Residential & Commercial business area.

2) Net operating income before property administration of remaining properties at 31 December 2006.

3) Net operating income before property administration of remaining properties as a percentage of the book value of these properties at year-end.

4) Net operating income after property administration of remaining properties as a percentage of the book value of these properties at year-end.

5) ‘Other’ includes educational premises, a garage and recreation facilities.

Classification by business area

Yield of properties

No. of Lettable Book Rental Economic Contrac- before after

proper- area, value, value, letting tual annual NOI, property property Profit Business area ties ’000 sq.m. SEK m SEK m ratio, % rent, SEK m SEK m

2)

admin., %

3)

admin., %

4)

rate, %

Logistics 28 447.5 2,093.5 23.8 98 208.6 70.9 8.2 7.5 8.9

Residential & Commercial 30 43. ,53.3 0.4 94 04.3 76. 6.6 6.2 73.0

Total 58 590.6 3,246.8 324.2 96 32.9 247.0 7.6 7. 78.9

Projects 0 22.0 47.9 .5 – 8.3 5.8 4.0 3.3 69.9

Total, properties 68 612.6 3,394.7 335.7 96 321.2 252.8 7.5 6.9 78.7

Lettable area by type of premises

Industrial/ Percent-

Business area, ’000 sq.m. Logistic Residential Office Retail storage Other

5)

Total age

Logistics 389.3 – 38.6 7.3 .9 0.4 447.5 73.0

Residential & Commercial – 8.6 53.3 9.7 47.0 24.5 43. 23.4

Total 389.3 8.6 9.9 7.0 58.9 24.9 590.6 96.4

Projects .3 0.8 3.8 0. 5.7 0.3 22.0 3.6

Total, properties 400.6 9.4 95.7 17.1 64.6 25.2 612.6 100.0

Classification by geographical area

Yield of properties

No. of Lettable Book Rental Economic Contrac- before after

proper- area, value value, letting tual annual NOI, property property Profit Geographical area ties ’000 sq.m. SEK m SEK m ratio, % rent, SEK m SEK m

2)

admin., %

3)

admin., %

4)

rate, %

Stockholm 9 28.8 632.5 70.0 99 69.3 49.4 7.8 7.2 7.3

Helsingborg 7 08.7 634. 62.6 89 55.8 40.9 6.5 5.9 73.3

Gothenburg/Borås 7 6.0 72.7 58.2 00 58.2 50.6 7.0 6.8 86.9

Örebro 2 66.0 355.3 34. 00 34. 32.2 9. 8.6 94.4

Malmö 2 47. 96.8 24.7 95 23.4 6.4 8.4 7.7 70.

Klippan 3 52.8 303.5 22.5 99 22.2 8.5 6. 5.6 83.3

Jönköping 3 48.5 69.6 7.5 84 4.7 3.0 7.7 6.9 88.4

Hässleholm 9 9.4 77.6 .6 97 .2 7.4 9.5 8.3 66.

Halmstad  4.5 . 2.0 45 0.9 –0.2 –.5 –3.3 –22.2

Other localities 5 75.8 292.5 32.5 97 3.4 24.6 8.4 7.5 78.3

Total, properties 68 612.6 3,394.7 335.7 96 321.2 2 52.8 7.5 6.9 78.7

Summary of Brinova’s property

stocks at 3 December 2006 )

(16)

2 PART OF BRINOVA ANNUAL REPORT 2006

Projects business area

Several projects in all development phases

The Projects business area purchases and im- proves older properties and undeveloped sites in areas of future potential. Strategic business acquisitions and creative refurbishment make a sound basis for growth in property values.

Comments on 2006

The main development during the year took place in logistics, where the focus has been on finding new logistics areas. One success during the year was the acquisition of two sites in prime locations on the major European highways in Helsing- borg and Malmö. Planning work is now under way, although the handling times are expected to be long.

During the year, several properties were acquired and projects begun. Brinova’s project portfolio comprises several projects that will be implemented during 2007.

In Bromma, Brinova has acquired a property in a good location immediately next to the planned high-speed tramway. Here, we shall develop premises for offices and shops. In Oxie, plans for conversion and extension were presented during the year. The idea is to connect the present shopping centre with the Pågatåg station, simultaneously creating 200 new homes and some 2,000 sq.m. of new premises for services and commerce.

In Gothenburg, in the former Pripps premises, we have established a facility for managing clothing for DHL. This means that half of the Högsbo building is now fitted out for logistic purposes.

In the city of Malmö, we acquired a site of 43,000 sq.m.

from the municipality during the year. Here, a service centre will be erected next year for the letting company Cramo’s southern region.

In November, an agreement was signed with DHL Express to erect a new terminal of 8,700 sq.m. in Transportstaden, Örebro.

Dynamic market driver

The market for project properties is driven entirely by customer demand. Increased retail volumes are boosting demand in both logistics and other sectors. Here, Brinova has obtained a strong position and shown that we have advanced skills and competitive strength. In the logistics market, moreover, the trend is towards increasingly large units. This is generating greater scope, since small premises can be converted for new areas of use.

The supply of project properties is good, but it is impor- tant to select those that are commercially viable and have good exchange potential. Our T4 project in Hässleholm shows that there is always a market for the right project.

Low interest rates have resulted in a buoyant housing market, with high demand for new projects. The trend of falling interest rates has, however, been reversed. In the long term, this is expected to affect future demand in the housing sector. Accordingly, Brinova adapted its project portfolio during the year, on the basis of this scenario, and now focuses mainly on the logistics sector.

Trängaren 1, Hässleholm.

(17)

3 PART OF BRINOVA ANNUAL REPORT 2006

0 55 110 165 220

2005 2006

2004 2003

In the Brinova group In part-owned companies SEK m

Projects business area

The Projects business area in 2006 At 3 December 2006, the Projects business area comprised 0 project properties with a book value of SEK

47.9m. It is also engaged in develop- ment projects within the framework of the managing business areas and through part-owned properties.

The year in brief

• Purchase of a property of 9,500 sq.m.

in Jönköping and one of ,700 sq.m.

in Bromma.

• Presentation of Brinova’s proposal for Oxie centrum in Malmö. The propos- al involves a new build of 200 homes and some 2,000 sq.m. of premises for services and commerce.

• Purchase of two undeveloped sites in Malmö with an aggregate area of some 43,000 sq.m. There, the Projects business area intends to erect a complex that will be let to Cramo Sweden AB.

• Agreement to erect a new terminal of 8,700 sq.m. for DHL Express in Örebro.

• Acquisition of the Kopparverket Property AB company from Interlink Logistics AB. The company has started building a logistics complex of 26,600 sq.m. in Helsingborg.

• Acquisitions of two strategic sites of 300,000 sq.m. in Helsingborg and Malmö.

• Commencement of work on detailed plans for 00 homes in Helsingborg.

‘Brinova develops the municipality’

When the regiment in Hässleholm was disbanded in the early 980s, the municipality of Hässleholm took over the whole area and then, in cooperation with Peab, started a company, Huven, with the function of developing the area.

At the New Year 2000, Huven gave way in its entirety to what became Brinova.

‘Then we started wondering together what we could do with the non-built-up areas,’ says Leif Berg, chief planning offi cer at the municipality of Hässle- holm. ‘Brinova carried out an analysis and arrived at the conclusion that the area was no longer such an oddity: it was, in fact, quite central since the town centre had expanded. Transforming the area into a new residential district was a tempting option.’

The Alma river runs through the area, and the municipality had already built an exclusive housing estate immediately alongside it. Brinova engaged two architectural fi rms to come up with proposals on how the area could be developed. These two propos- als both had their merits and angles, which made it diffi cult for the munici- pality to pick out just one.

‘Then Brinova suggested that the architects should, instead, work together and develop a joint proposal,’ Leif Berg relates. ‘That was very well received in the municipality, and we’re currently working on the local plan.’

The municipality of Hässleholm expects to develop the area over a ten- year period, and is now gladly handing over responsibility to Brinova.

‘Brinova’s interest in Hässleholm means a great deal,’ thinks Leif Berg.

‘They have a professional view of their operations and of development, and know what they’re doing, which is reassuring. At the same time, they’re modest, and they understand and have an insight into how the municipal process works.’

Anders Silverbåge, CEO and Business Area Manager

Project investments

(18)

4 PART OF BRINOVA ANNUAL REPORT 2006

Logistics business area

Flexible, well-considered solutions

create value for customers — and Brinova

The Logistics business area acquires, improves and manages logistic centres for commercial companies and distributors along Sweden’s central communication routes. With extensive experience, a high capacity and long-term relationships on a market that is growing rapidly, strong value growth and a stable cash flow are generated.

Ametisten 5, Helsingborg.

Comments on 2006

During the year, various deals have been implemented in which Brinova, through its unique network, has been able to create comprehensive solutions for a number of customers.

On behalf of the Icelandic logistics company Eimskip, we erected a new logistic facility: Ametisten in Helsingborg, measuring 0,000 sq.m., with advanced cooling and freezing equipment. Eimskip’s existing building was acquired and thereafter sold.

In conjunction with Kemira Service Partner’s outsourcing of its logistics operations to Interlink Logistics AB, Brinova purchased from Interlink a logistic building, under construc- tion, of 26,600 sq.m. This building was completed in May 2007, and Interlink has signed a 5-year tenancy agreement.

During the year, two sites of 300,000 sq.m. were acquired in strategic locations along the European highways. One is close to the E4, E6 and E20 in Helsingborg and the other near the E6, E20 and E22 in Malmö. Both are currently reported under the Projects business area. They give Brinova a unique opportunity to offer perfectly positioned logistic centres to major international operators. In Norrköping, two properties are acquired: a strategically important site leasehold compris- ing 93,000 sq.m. of land and a logistic property of 5,000 sq.m. that is being rented by DHL Express.

During 2006 we strengthened our position in Stockholm by purchasing five logistic properties, in Huddinge, Upplands Väsby, Stockholm and Järfälla.

A growth market in flux

The logistics market is still expanding. One trend, however, is that both the operators and, by the same token, the properties are ever larger and fewer. Today, the focus is on buildings of 50,000–60,000 sq.m., fully equipped with storage premises, terminals and technology.

Thanks to our skills in logistics and our well-developed network, by analysing the trends and identifying the future logistic hubs, we can acquire land in strategic locations at attractive prices. Good examples of this are the acquisitions made last year in Helsingborg, Malmö and Norrköping.

The market is being globalised, and the effect is to erase national borders.

Broad customer base

Brinova has a well-balanced mix of customers in the logistics sector. Among our tenants are large global logistics companies like BTL-Schenker, DFDS, DHL and Green Cargo. But we also have customised logistics premises for niche customers. One example is Eimskip, which specialises in transporting frozen goods.

Unique knowledge of logistic properties

As the market demands new, flexible solutions and focuses on the purchase of functions rather than premises, we work on developing attractive all-round concepts. Our starting point is five factors that are crucial to our customers.

Location: our logistic premises are adjacent to the important transport routes, and in many cases also near harbours and airports.

Safety: Brinova conducts development projects with external experts to improve safety further.

Security: our long experience and our systematic safety approach, combined with our long-term commitment, represent security for our tenants.

Flexibility: our ownership close to the customer enables us to identify solutions in which both storage premises and staff can be used flexibly and efficiently. We also monitor customers’ development in the long term and can therefore adapt our use of premises and terms in line with changing needs.

Commitment: our local presence and specific

expertise make it easy for us to be an active, committed

partner.

(19)

5 PART OF BRINOVA ANNUAL REPORT 2006

Logistics business area

Mikael Halling, Deputy CEO and Business Area Manager

Logistics in 2006

At 3 December 2006, the Logistics business area comprised 28 logistic properties on Sweden’s key transport routes, with an aggregate lettable area of 447,500 sq.m. and a book value of SEK 2,093.5m. The contractual property income amounted to SEK 208.6m.

The year in brief

• Property income was raised from SEK 30.2m to 70.3m by acquisitions during the year.

• Yield before property administration fell from 9.7% to 8.2% owing to higher property values.

• Operating profi t for the year under review rose, partly as a result of real- ised and unrealised value growth, from SEK 28.m to 276.9m.

• Purchase of logistic properties in Huddinge, Upplands Väsby, Stockholm and Järfälla. The lettable area amounts to some 90,000 sq.m.

• Purchase of site-leasehold property in Norrköping with a total available land area of 93,000 sq.m. and a logistic property of 5,000 sq.m. The largest tenant is DHL Express.

• Purchase of a logistic property in Örebro with 8,000 sq.m. of land and a storage building of 2,000 sq.m.

• Acquisition of a logistic property of 38,000 sq.m. in Helsingborg.

• Purchase of Lindab’s nine properties.

The total lettable area of these properties is approximately 20,000 sq.m.

Events since year-end

• Three properties in Klippan and Trelleborg were sold at a profi t of SEK 00m after tax. This amount, SEK 00m, is disclosed in the ’unrealised changes in value’ item for 2006.

Property income and net operating income

Key fi gures for Logistics

31 Dec. 31 Dec.

2006 2005

Number of properties 28 6

Lettable area, ’000 sq.m. 447.5 283.

Book value, SEK m 2,093.5 ,257.7

Rental value, SEK m 23.8 38.8

Economic letting ratio, % 98 00 Contractual annual rent, SEK m 208.6 38.5 Outcome, property income, SEK m 70.3 30.2 Outcome, net operating income, SEK m 37.  03.3

Number of contracts 73 55

Economic letting ratio

‘Brinova knows logistics’

The Icelandic logistic company Eimskip decided in 2005 to sell its existing premises. Contact was made with the Helsingborg forwarding company WLC Transport och Spedition, which was interested in buying the premises. After a while, WLC decided that the premises did not suit them.

However, in the course of the discussions a good rapport had been established between Eimskip and WLC.

Eimskip therefore inquired of WLC’s owner whether an acquisition of the company was feasible. The interest was mutual, and a letter of intent was written.

Simultaneously, WLC had decided that they wanted to build a new property instead, and therefore contacted Brinova. Eimskip, for its part, had decided to fi nance the purchase of WLC by selling its existing premises.

Eimskip and WLC each produced a specifi cation of their needs in terms of storage and offi ce space, and handed it over to Brinova and Briggen. One requirement was that the company responsible for the construction work should take over Eimskip’s existing property.

‘Brinova did a good job and was keen to get it done,’ says Jan Upners, CEO of Eimskip. ‘They were also prepared to buy our property.’

In December 2005, everything was ready. The building work started in spring 2006. At the same time, Eimskip let its old premises until the time of the move.

‘Brinova had a distinct advantage since they’d built terminals before,’

thinks Jan Upners. ’At the same time, we came up with input and wishes as we went along. Brinova has been tremen- dously fl exible and changed things as quick as a fl ash when we wanted. It’s really gone well.’

0 100 200 300 400 500

0 20 40 60 80 100

31 Dec. 2006 31 Dec. 2005 31 Dec. 2004 31 Dec. 2003

Lettable area Economic letting ratio

’000 sq.m. %

0 36 72 108 144 180

0 36 72 108 144 180

2006 2005 2004 2003

Rental income Net operating income

SEK m SEK m

(20)

6 PART OF BRINOVA ANNUAL REPORT 2006

Residential & Commercial business area

New deals facilitated by value- creating divestments

The Residential & Commercial business area acquires, manages and develops residential and commercial premises in growth areas in West and South Sweden. Local presence, a strong customer focus and creative refurbishment boost both property income and value growth.

Comments on 2006

Work on structuring Brinova continued during the year.

Concentration of the main localities and logistics has meant that a number of refurbished properties have been sold. In Halmstad, for example, after managing and eliminating high vacancy rates, Brinova sold six commercial properties at a profit. This shows that, thanks to our customer focus, we are successful even in commercially difficult markets and in realising profits from our property improvements.

The sales have caused a decrease both in residential property income and in the vacancy rate. At the same time, the development properties acquired have a relatively high vacancy rate.

Development of the properties in Oxie centrum proceed- ed during 2006. As the premises were modified, the letting ratio rose successively.

In Helsingborg, the Unionen 6, 23 and 24 properties were joined in one project. Planning for a conversion and extension project is under way. This project, which will create new flats and shops, is expected to be completed during 2007. Also in Helsingborg, the Rödspottan 9 residential property, also known as Villa Wingårdh, and the Ruuth 23 property began to be developed during the year. Besides the existing homes and commercial premises, improvement for a new housing project is in progress.

Work on the local plan for the T4 area in Hässleholm is proceeding, while a new project was also initiated during the year.

The market

The market is still developing strongly and the demand for housing and commercial properties is very good. For commercial properties, development is taking place in precisely the growth areas that Brinova is focusing on:

broadly speaking, along the European highways in southern Sweden. Brinova concentrates on strategic localities and has management offices in Gothenburg, Stockholm, Helsingborg and Hässleholm.

The commercial market, in turn, is driving the housing market where growth is taking place in the form of tenant- owned and freehold properties. Where rented accommod- ation is concerned, however, demand remains low. In general, the trend is towards a shrinking number of rented housing, and this will reduce property income in the long term.

The main increase is taking place in commercial proper- ties, and future growth is also expected to take place there.

Gräset 19 & 20, Landskrona.

(21)

7 PART OF BRINOVA ANNUAL REPORT 2006

Residential & Commercial business area

Göran Jönsson, Business Area Manager.

Residential & Commercial business area in 2006

Brinova’s commercial properties are located mainly in growth areas in South Sweden. At 3 December 2006, the stock comprised 30 properties with a lettable area of some 43,00 sq.m. and a book value of SEK ,53.3m. The contractual property income amounted to SEK 04.3m.

The year in brief

• Property income rose from SEK 8.0m to 23.7m., as a result of an increase in lettable areas during the year.

• Yield before property administration amounted to 6.6%.

• Operating profi t for the period rose from SEK 68.m to 55.m.

• Commercial properties were pur- chased in Helsingborg, Landskrona and Åstorp. The total lettable area of the properties amounted to some 3,800 sq.m.

• The last of six residential blocks at Brunnshög in Lund was completed and Brinova’s portion of 50% in Brunnshög Bostads AB was sold to Peab. Profi t from this sale amounted to some SEK 5m after tax.

• A low-priority residential property in Helsingborg was sold. Profi t after tax amounted to SEK 6m.

• Five commercial properties in Helsingborg were sold to Wihlborgs with an aggregate capital gain of SEK 2m.

• Six fully refurbished commercial properties in Halmstad were sold.

‘Brinova looked after everything.’

When BergendahlsGruppen needed new premises for its AG Favör store in Landskrona, they contacted the munici- pality. At fi rst, they looked for a site on the outskirts of the city, but the munici- pality then had a site in the centre of town that it was having problems with.

There had previously been a Tempo shop there, but it had burnt down a few years before.

Axfast, which owned the site, had not decided what to do with it, and eventu- ally it had become something of a thorn in the municipality’s side. Once Axfast decided not to establish the shop, the municipality wanted to activate another party.

BergendahlsGruppen was asked to investigate whether there was any scope for establishing a new shop on the site.

The municipality undertook to facilitate this establishment by working for more car parks, and Brinova drew up a proposed tenancy agreement. Bergen- dahlsGruppen also had demands that everything should be ready in time for Christmas shopping.

‘Brinova really looked after every- thing,’ says Lars Nilsson at Bergendahl- sGruppen. ‘We told them what we required in the way of premises, and they arranged everything as we wished.’

The shop has also proved to operate much better than expected. In parallel, within BergendahlsGruppen, a project had been run to develop a small Citygross concept known as ‘Citygross Kompact’. The store in Landskrona became a pilot shop and its success has meant that BergendahlsGruppen is now rolling out its concept throughout the rest of the country.

‘Brinova accepted its responsibility in a very good way, during both the purchasing and the establishment phase,’

things Lars Nilsson. ‘When things were unclear with the municipality, Brinova took on the negotiations. They’ve dealt with everything extremely well.’

Key fi gures, Residential & Commercial

31 Dec. 31 Dec.

2006 2005

Number of properties 30 35

Lettable area, ’000 sq.m. 43. 57.2

Book value, SEK m ,53.3 92.9

Rental value, SEK m 0.4 06.5

Economic letting ratio, % 94 9

Contractual annual rent, SEK m 04.3 97.3 Outcome, property income, SEK m 23.7 8.0 Outcome, net operating income, SEK m 8.2 46.

Number of contracts 545 786

Property income and net operating income

Economic letting ratio

0 60 120 180 240 300

0 20 40 60 80 100

31 Dec. 2006 31 Dec. 2005 31 Dec. 2004 31 Dec. 2003

Lettable area Economic letting ratio

’000 sq.m. %

0 40 80 120 160 200

0 40 80 120 160 200

2006 2005 2004 2003 Rental income Net operating income

SEK m SEK m

References

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