Fabege AB (publ) (FABG) Earnings Call Transcript & Summary

Welcome to the conference call. [Operator Instructions] Now I will hand the conference over to the speakers. Please go ahead.

Welcome to the presentation of the year-end report 2024. And as usual, after the presentation, there will be opportunities to ask questions. So let's start at Slide #2, please. Most of you know that we are focusing on Stockholm, but we only have 100 properties and a property value of about SEK 80 million, a little bit more than 1 million square meters. So I think we go directly into the summary of year-end in the next slide of the year-end report. We have stable property values for the last 6 months. We have growth in the rental income and then operating surplus in -- and growth also in the operating surplus in the identical portfolio. We had -- continued to have negative net letting even during the Q4. We'll tell you more about that later. We have as you know a very stable financial position. And we're looking forward to this year, welcome some of the new tenants in the projects that will increase the rental value with more than SEK 300 million. So with that, please, Asa, give us a little bit more about the figures.

Yes. Thank you, Stefan. I will start with a summary of the fourth quarter. In the fourth quarter alone, we reported increased rental income and improved net operating income. This was despite the fact that operating expenses in the quarter were charged with a provision for Convendum of SEK 29 million. Overall, the changes in value were small, slightly on the positive side. In the valuations, we have taken account of discounts to Convendum, which was offset by upward revaluations of projects and building rights where the plants have gained legal force. And net lettings were negative in the fourth quarter alone. Stefan will come back to this. Next slide, please. Rental income amounted to just over SEK 3.4 billion, which was slightly higher than the previous year. The decrease due to property divestments last autumn was offset by index increases and the taking of possession in previous project properties. On a like-for-like basis, income increased by 4.5%. Adjusted for the Convendum provision, operating expenses were in line with the previous year and the surplus ratio for the entire period came in at 74%. Birger Bostad's gross profit amounted to minus SEK 21 million as 2 smaller projects were completed and where the final recognition occurred. Excluding administration, the profit came in at plus SEK 8 million. And central administration amounted to minus SEK 93 million. With falling market interest rates, interest expenses decreased in the second half of the year. The total -- in total, net interest income -- sorry, net interest was in line with the previous year. Lower market interest rates that are gradually having an impact and our active work with interest derivatives have delivered good results. In addition, loans are now being refinanced at ever better margins. The result in associated companies amounted to minus SEK 91 million, of which minus SEK 102 million related to capital contributions to Arenabolaget and SEK 11 million, plus SEK 11 million related to a profit from the JV residential project in Haga Norra. And we, therefore, reported profit from property management of just over SEK 1.3 billion, approximately SEK 100 million lower than the previous year. Impairment of development properties relates to change of value of residential building rights in Birger Bostad. Unrealized changes in value amounted to minus SEK 1.2 billion after we reported slightly positive value changes in the third and the fourth quarter. I will come back to this very soon. We also reported a small realized profit of SEK 3 million, which related to a time lag from the transaction with NREP last autumn. The valuation of the derivatives portfolio follows long-term interest rates, which varied during the year. Overall, during the year, the surplus value in the derivatives portfolio decreased by SEK 143 million. And finally, the tax expense, which related to deferred tax only amounted to minus SEK 124 million. Slide 6, please. In the fourth quarter, we have once again independently valued a large proportion of the portfolio, approximately 55%. The rest of the portfolio has been valued internally. Yield requirements leveled off and have been essentially unchanged since the second quarter. The average yield remained at 4.54%. As I mentioned earlier, the changes in value were slightly positive in the third and the fourth quarters. Total change in value for the entire period amounted to minus SEK 1.2 billion, and we are now reporting a property value of SEK 78.9 billion. In addition, there is a property -- the property value of the development property portfolio in Birger Bostad of SEK 800 million. Next slide, please. Reported equity increased during the quarter by SEK 1 to SEK 122 per share and the long-term EPRA NRV amounted to SEK 148 per share. The equity asset ratio was unchanged at 46% and the loan-to-value ratio was also unchanged at 43%. Both of these key performance indicators confirm our continued strong balance sheet. The interest coverage ratio amounted to 2.5, which is in line with the previous year. And now next slide, please. The access to and pricing of financing is still very good. This applies to both the capital markets and banks, even though the biggest improvement has taken place in the capital market with much lower margins, but banks are also now following. The commercial paper market is continuing to function well. We have reduced the margin in a couple of steps and are now issuing 3 months commercial paper at a margin of 40 basis points compared to 70 basis points at the previous year-end. As stated, the bond market is also functioning well. We have been active through several issues since last spring. During the year, the outstanding bond volume increased by just over SEK 2 billion. Falling market interest rates and lower margins meant that at year-end, we reported an average interest rate of just under 3%. Undrawn revolving credit facilities totaled SEK 6 billion at the end of the quarter. The sale of the property Ynglingen means that we will receive almost SEK 1 billion in early March, which will be used to repay debt. Overall, we continue to have good preparedness for upcoming financing needs and refinancing. We have facilities in place to cover the upcoming loan maturities. In total, we have bond maturities of SEK 2.1 billion during the second half of 2025. We intend to refinance our bond maturities with new bonds, whereas the bank's facilities are continually refinanced through extensions. Of course, what was also pleasing during the quarter was Moody's confirmation of our Baa2 rating and that the outlook was changed from negative to stable. Slide 9, please. Of the loan portfolio, 52% is fixed, mainly based on long-term maturities and mostly through straightforward interest rate swaps, supplemented by some fixed rate bonds. In addition, there are callable interest rate derivatives totaling SEK 7 billion, which now looks set to continue running. Straightforward interest rate derivatives run with a fixed interest rate between 0.11% and 2.18%. The callable interest rate derivatives run with an interest rate between 1.82% and 2.5%. The average fixed rate term amounts to 1.8 years. Adjusted for the estimated maturity of the callable swaps, it increases to 2.6 years. Our interest rate strategy provides predictability. Fixed rate terms provide protection against rising market interest rates. However, we now believe more in falling or stable market interest rates. The levels that we have managed to fix at both for straightforward interest rate swaps and for the callable swaps are levels that we are comfortable with. For a moving 12-year -- 12-month period ahead, an increase in the market interest rate of 1 percentage point will generate a higher interest expense of approximately SEK 147 million, all else unchanged. A corresponding reduction in the market interest rate by 1 percentage point results in a reduced interest expense of SEK 89 million and the average interest rate was 2.98% at year-end. Next slide, please. We achieved many of our goals in -- regarding sustainability for the year. Perhaps what we are most proud of is that we achieved our energy target, reducing energy consumption to an average of 70 kilowatt hours per square meter, a target that felt much too tough after the cold winter and the somewhat hot summer, but which we still managed to achieve during strong efforts in the operations during the second half of the year. And just before Christmas, we also got the confirmation from Nasdaq, which confirmed our status as a green share according to Nasdaq Green Equity Designation with a second-party opinion from S&P. And now back to you, Stefan.

Thank you. Thank you, Asa. Next slide, we see some of the transactions that have been made during -- in the [ general market ]. You've also told that the financial market has been healthy during the end of the year and better and better in the middle. And also, I think the transaction market is relatively healthy. Good properties are finding good buys at good prices. And we can see some of the transactions that has been done here at the list. The latest one was Skalen 30 in Hagastaden, also called FENIX. We don't know exactly the price right now, but Humlegarden acquired it and I think it will -- I think it has been prices that more than well confirm our valuations. We also saw that we have seen and we have discussed some of them, the other ones on the list earlier. If you look at the next slide, we have earlier said that we have signed an agreement of Ynglingen at Ostermalm. And the deal will be completed on March 4. And the cash, as Asa also said, the cash payment -- the cash will be used to reduce our debt. The office market, if the transaction market and the financial market has been relatively healthy over the last year, the office market and the rental market has been more challenging. Very little new at the end of the year, still a slow market, I think. And we see vacancies are continuing to grow a little bit in the whole Stockholm, mainly, for example, [indiscernible] and some other suburbs. I think also -- but I think that the CBD is still a relatively strong market. And we see also the trend is to continue to move to better locations or the locations continue to be very important. On the next slide, there have been very few new projects announced in the market. So we can't see that the total office space will increase over the next years, rather the opposite, that there will be some small decreases. So the demand is -- it has been challenging. We expect it during '25 to be a little bit better. But as we said, the quality of the asset -- the quality of the office, the quality of the location will be very important. But the supply, we have the vacancies, but there will be very little new supply. So the next slide, please. As you know, we have large financially strong customers. What we maybe should comment on this slide is the reconstruction phase of discussion with Convendum, which is not entirely completed. As it looks today, the units in our 2 properties will probably remain and we have good discussions with them about that. But as also mentioned, we have made a provision already for the rental losses for last year of SEK 29 million. The reconstruction are expected to be finalized in April. And before that, we can't comment that much, but we have good discussions to a new prolonged agreement with them. Next slide, please. The disappointing during the year was, of course, the net letting. It was a minus SEK 108 million. And it was also negative in -- it was negative all 4 quarters. It has been a tough market. We see a little bit more optimistic for 2025. I think the decision-making in the companies will hopefully be more stronger since we also hope we can see a better economy in 2025. We have a goal even for this year of SEK 80 million. And it has -- as you can see here in the chart, our net letting has fluctuated in recent years and that's mainly because also of the large projects we have had. 2023, for example, we have announced the Saab agreement. It was SEK 160 million. And the years before was Alfa Laval and also in the past, we have had the product portfolio to continue to develop that is an important part of our business, of course. Next slide. Occupancy rate. It's today at 88%, in my view too low. Our long-term goal is coming back up to 95% when the rent the work will -- over the next year, we'll have total focus on that. And we -- so for 2025, of course, our main focus will be the vacancies and to the rental work and also ensuring that we can meet the changing needs of our existing customers. And of course, on top of that, we will continue to work on realizing the great potential we have in our big building right portfolio. So -- and also continue to develop our new opportunities in our areas. So as I said before, the net rental target for this year, 2025, is at least SEK 80 million. Next slide, please. On this slide, I like especially to look at the fourth quarter where we have had Saab, both Saab and Alfa Laval move in and the rental incomes will start to increase when the product portfolio will be more finalized. And we will come back later -- more later in the next -- over the next quarters. Next slide, you see the ongoing projects we have in Haga Norra, in Solna Strand, the Saab project, in Flemingsburg, Alfa Laval will move into summer and Textiltorget in Hammarby Sjostad. We have signed some new contracts in -- especially in Pasen and the occupancy rate in the project portfolio are now 87%. Next slide. Birger Bostad has the ongoing project in Haga Norra. It's in total almost 300 apartments. And in the first phase, 23 apartments, of which today 18 are sold, they will start to move in, in April. In the second phase, it's 50 apartments, of which 40 is sold and they will start to move in at the end of the year. And also during the autumn this year, the rental apartments will be completed for occupancy. And in the next phases, we have already started to sell some apartments and we will start the sales process during the spring. So to summarize, we believe in Stockholm. It has been some challenging years with the pandemic, with the geopolitical situation, but Stockholm has a lot of strength. It's a unicorn factory, both in tech and in biotech. We are the capital of Sweden and the list can be long of why we think Stockholm will have a future -- a strong position for the future. On the next slide, we have the next -- we also believe in offices. We believe that the offices will be important for all companies. We believe that the people are coming back to offices. But offices will continue to be -- to develop. The office today doesn't look like a office some years ago, 10 years ago, 20 years ago. And our position to be #1 in Solna, to be #1 in Hammarby Sjostad, our strong position in CBD will be long-term. So long-term also have a lot of opportunities for us. We are focused today, you see on the next slide, to grow sustainable, of course, but without risking our strong financial position. The growth can be achieved by that we're completing existing projects, as we saw before, we mean a little bit more than SEK 300 million over the next year, that we will work with increasing the occupancy rate and the long-term goal target is 95%. We will continue to invest in new products and it could be acquisitions and also these investments that can -- that are creating value for us. And we should, of course, be cost-efficient. This will be also the main target is the growth of the management profit and to be -- that should be the best return in the portfolio of the listed companies. Part of that, you see to be successful with that, you have on the next slide, there are building rights of more than 0.5 million commercial square meters, of which about 40% are legal binding and residential of also a bit more than 0.5 million, of which almost 30% are legal binding. The opportunities in the near term, which you see on the next slide, is in Arenastaden, for example, Farao/Kairo. We will start the development with the ground during this year, but we would like to have a signed contract. We will not start a big project without signed contracts. In Haga Norra, we have the next residential phase with another 130 apartments, probably it could be starting 2026, but we will like to be slightly more -- selling more in the first phases first. On the next slide, we also have Tegelterassen at Kungsholmen, which got legal binding after 14 years, we got the decision some months ago. And the same in Solna Business Park with Parkhuset and Yrket, which are both residential and commercial opportunities. So we will both come back with some positive news over this during this year and next year. And on top of this, what we already have said also the dividend for this year are suggested by the Board to SEK 2 per share and paid 4 times a year. And today, I also announced that I will retire at the end of this year. I will be 66 during this spring. And so I think the timing is right for me to leave it over and also to have a more flexible daily life. So -- but right now and for the next of this year, it will be a full focus on doing the business here and creating value. So to summarize before we go over to the questions, as we said, in many ways, this year, we had increasing incomes in the identical portfolio even -- but -- and the interest rates are going in right direction. We have also the value changes are during the second half more positive. And -- but it is the net rent that we are now working very, very hard to be able to decrease the vacancy rates and also to be able to use the potential in our building right portfolio. So questions, please.

[Operator Instructions] The next question comes from Nadir Rahman from UBS AG.

Stefan, congratulations on your career so far, given the announcement of your retirement. The question I had was on the indexation and the contribution of inflation to your rents because you obviously reported 4.5% on the like-for-like. So the first question was on how much of that was an inflation-driven contribution? And the second question was on -- well, second part to that first question was on the inflation that was reported this morning, the fash estimate, the CPIF that came in well ahead of consensus figures and how you think that may affect your business plans or operations and leasing going forward?

Sorry, many questions. I think we'll try one at a time. Indexation in 2024 was roughly 6%. So the net of -- I mean, the 4.5% is a net of indexation and companies moving in and moving out. And because of the negative net letting in the property management portfolio, there's been a negative influence from that.

And then your next question was?

It was on the topic of the -- so the second part of that question was regarding the CPIF beat today, the inflation in Sweden coming well ahead of consensus. I think it was around 2% reported versus around 1.7% predicted by the market. So how could that affect your leasing momentum and decisions from tenants going forward? And could that have an effect on net lettings?

I think it's a little bit too early to say. I think I haven't had time since we have had the report during the day to be discussed the figures, but I thought it was 2.2%. And I know that probably the food is an important part of that, food prices. I think it's more important right now for the economy in Sweden to also look at when will the lower interest rates get the effect in the economy and we expect that to happen during the spring. So I don't really know if these inflation figures will have a big impact. The interest rate was up a little bit today. I think it was 6, 7 basis points, but it's too early to say. So what we don't like it to happen is it will be even higher and moving upwards because -- so -- but I think we are still at a level around 2%. So that's the most important.

Got it. Okay. That's very clear. And the second question was, I think on the recent news of SBAB recently downsizing their lease, I think they moved to another property within your portfolio. Is this a trend of downsizing you're seeing across other tenants? And could this, therefore, be a more structural shift in preferences for office space and therefore, have a long-term effect on your vacancy and trying to reach that 5% target?

I think it's -- SBAB, they have been a tenant of ours for I think it's 10 years or something. And we have been discussing with them how to develop their business more and they are, as you said, signing a contract with us for a lease in the city. It's almost the same number of square meters, a little bit more, but it's higher total cost. So it's a positive of SEK 20 million in the net letting for us. I think we can see though that though -- I think we -- for SBAB, it's more that they like to be in the inner city. We see in some other discussion, of course, that everyone are looking at how to use the office. The office is very important, but also how should it look like? Do they need more meeting rooms? Do they need more or less space? I think -- so we see both the companies that need less or some of the companies need more when they do the changes. I don't know, all that was helpful.

Yes. That's very clear.

The next question comes from Jonathan Kownator from GS.

A few questions on my end, please. The first one on Slide 18, the rental development chart. I just wanted to check something, please. So you've got 4 buildings that are being delivered, I think, in 2025. I think you already said Saab and Alfa Laval would only kick in Q4 2025. So outside of this chart, so I just wanted to check because I think they're still slated in to be delivered before that. I think that's the first question on that. But also, what about the 2 other buildings? Are they already included in your light blue bars? Or are they also going to be delivered in -- at the end of 2025, please?

Which was the last one you mentioned?

So you've got 4 buildings that are being delivered in 2025, right? I just want to understand if any of these buildings are included in the chart in the light blue bars.

Yes, they are, to the extent that the tenants have moved in and from the day that they are starting to pay rent, they are included.

But so the question is that line from the SEK 847 million is pretty flat, right? So what I'm just trying to assess is how much indexation do you have in there? And also do you have a number of departures that compensate the fact that these buildings are going to be delivered, right?

Yes. Yes. Yes, it's a mix. So everything that we know by the end of the year 2024 of contracts being terminated during these 4 coming quarters and contracts that are being taken into possession from tenants during these 4 quarters is included. So it's a mix of companies moving out and companies moving in. And the index effect of 2025 is also included. It was only 1.57%, but that's also included.

Okay. So that's included. If we take -- so there's essentially 2 buildings that are being delivered in Q1. What about the Flemingsberg, the Separatorn 1 because that one is 95% let. Is that [indiscernible] as well? Or is it Q4 because it's...

It's in -- partly in the second quarter. So they will be in the building in the third and the fourth quarter. And Saab, the one in the property called Noten, they will move in, in November.

November, so that's Q4?

Yes. Yes.

All right. Very clear. If I -- obviously, you're talking about potentially new projects. Just keen to understand your discussion with tenant on that. Do you see any traction? Obviously, you said you wanted to secure a pre-let, which makes sense. Are you seeing good traction on these projects at this stage?

We have discussions. We see interest. But since it's very big projects, we also expect the discussions to take some time. But we see interest and I think especially for the one in Arenastaden for Kairo, which will be the next step of developing Arenastaden, I have -- I'm optimistic, but it's a huge project. Haga Norra, it's more residential and so that will be -- we also have another commercial building right in Haga Norra. So there are some -- but very large projects, so I expect them to take some time, but we have interest, yes.

Okay. That's good. I mean, obviously, maybe one final question. A number of economists expect the economy in Sweden to pick up in 2025. I mean, what are your thoughts there? I mean, is it something that you're seeing already? Or is it delayed? Or what's the story on the ground with sort of...

I think on the ground, it's generally, we -- it's too early in the beginning of the year. I don't see -- most of the economists so don't expect it to happen during the first quarter. But second quarter, especially second half of the year, many expect it to be pick up and that also the cut in the interest rates will have impact or effect.

The next question comes from Ventsi Iliev from Kempen.

First one on the net letting target for 2025. I just wanted to ask you to elaborate a bit more why you're confident that you can reach this target because you also just said that the economy will most likely pick up only in H2. And then second one, on the debt ratio, I see that you're currently at 14%, while your policy is at 13%. And I guess the most likely way to get there is through disposals. So is this -- would you like to get there in the near term? Or do you not mind being above the target?

If we start with -- Asa, with the second.

If we start with the second one, we already announced the sale of a property called Ynglingen that's close to SEK 1 billion which will be received in the beginning of March. So that will make a difference.

And when talking about the net letting, we have said at least SEK 80 million this year. And it's a mix of -- from the vacancies and from hopefully some projects. But I think that since we -- what we can see in the market, it's a little bit -- it's a better -- hopefully, a better market and also that we can -- so normally, it should be doable to get to SEK 80 million. So -- but it's up to show it, up to grab -- up for us to show it, yes.

Okay. Maybe if you just allow me to ask on leverage again. So even if I include the disposal, then I still get to a number before 13%. So yes, could you just highlight if you're still considering disposals on the near term? Or would it be just more on an opportunistic basis?

Just to keep that -- that's more of an internal target to not be above 13%. So the key metrics that we are more looking close into are the LTV level and also the ICR. So I mean, getting to -- even if this metric is a little bit above 13%, that's okay for us.

You can also say the reason that we're above 13% was that some years ago, we did some buybacks. And unfortunately too early, but we used [indiscernible] debt at that time. So we have almost 4% of the shares bought back. And that's the main reason. Correct me if I'm wrong, Asa, but the main reason why we are above 13%, so that to us. So we are quite -- we don't feel under stress for that.

The next question comes from Paul May from Barclays.

Just a couple of quick ones from me. Can you explain how the impact of the Riksbank rate cuts affects your debt cost? Because there's 150 bps of rate cuts that came through, you're about 40%, I think, variable debt exposed, but your cost of debt has only come down 15 basis points. Just wondered what the flow-through is and how that should work moving forward? And I've got a second question after that.

Well, if -- I'll just check what page. There is a sensitivity analysis on Page 14 in the report. So we have roughly 52% of the portfolio fixed with long-term interest rate swaps and fixed loans. And then another SEK 7 billion is sort of fixed with the cancelable swaps and they are being prolonged by the banks at the moment and they are also expected to be prolonged. So if we take that into account, if the market interest rate goes down 1 percentage, that will have an impact of roughly SEK 90 million positive on the financial net. So you can see the figures. And the vice versa, if 1% -- if the market interest rate increases by 1 percentage, that will have a negative impact of SEK 146 million in the financial net.

Okay. Have those sensitivities -- sorry, I have to check back. Have those sensitivities materially changed over the last year?

Yes, they have.

Okay. What's the reason for the changes? Sorry, just so I can understand thinking forward.

It depends, of course, on the market interest rate and where it starts from and also the number of derivatives in the portfolio.

Some of the swaps has been maturing. Some swaps that we took at very low levels 2019 matured end of August, September '24, I think. And that, of course, is...

Sorry, apologies. And just to check, these sensitivities are if your weighted average cost of debt changes? Or are these sensitivities if the underlying Riksbank rate changes?

Yes. If the market or the STIBOR changes. So 1 percentage point of STIBOR change has this impact.

Okay. Cool. And are you expecting any sort of a delayed reaction effectively, if we look to the sensitivities in the past and obviously we've had a 1.5% move. It didn't all happen at the beginning of the year, you'd expect some of that to flow through? Or is that reflected already in your average cost of debt as of the year-end?

Of course, there are always some delay in a couple of months before some of the -- are reset. But it's more a question of months, I would say.

Yes. Normally, I mean, the base in our loan portfolio is based on 3 months STIBOR. So STIBOR would normally be fixed for a period of 3 months and then reset for the next period of 3 months.

Okay. Cool. And the second question, a separate question. In terms of the outlook for '25 and I think you mentioned it's going to be a tough start to the year, but you expect it to pick up as we get into the second half and I appreciate the view on -- from economists in terms of the pickup. But is there a concern or a risk or have you considered that the increase in your occupancy rate over the last basically 2 years is a result of the structural changes of office use and you'll just structurally have a higher vacancy rate moving forward? Or is that not something that you consider to be an issue?

Of course, we are discussing that. We have to discuss it, of course, since we have -- you can see, first of all, the vacancy rates in Stockholm moving up and also that we know that there are structural changes in how to use the offices. But with that said, we also see that there are very little new office space coming into the market. We see that also that the location of the offices or the building is even more important than it was 5 years ago. So it's a mix. So I think that we can be -- we see that in our areas, our locations, there will be -- I feel confident that we will have a good location with good office -- good spaces. So -- but it has been a tough market with -- and that mainly has been I think -- it has been impacted a lot by the economy and the uncertainty of all the economy and geopolitics and also how to use the office. But we see much more that the companies now are more willing to say that, okay, the office are very, very important for us and we need to invest in it.

Cool. And just to say enjoy your retirement and we'll miss your candid responses to questions.

We have time to meet -- thank you very much. We have time to meet before that.

The next question comes from Alexander Totomanov from Green Street.

It's 3 questions for me. So I think one at a time is probably best. First one, on the SBAB Bank news that came out yesterday, if I'm not mistaken, the new lease is for the same property in the inner city where 2 government agencies are departing at the second half of this year. I assume that the net letting figure quoted in the press release yesterday, which was about SEK 21 million pertains to the SBAB Bank currently in Solna Business Park. Could you please confirm that?

Yes.

Yes.

Do you have a comparable net letting figure for the SBAB Bank versus the 2 government agencies which are departing?

There were -- we took them in Q1 last year and I think it was about SEK 30 million negative, the 2 authorities.

Okay. And in terms of the increase in rental income for SBAB Bank versus the government agencies, would you be able to comment?

It -- increasing rate, yes. I think in percentage, it's quite a substantial higher rent level. Of course, we also have to do some investments, but we are very happy that SBAB will continue to be our tenant at -- also that we had the right location for them in the inner city. So -- and then we see some -- of course, we have to work with the property in Solna Business Park, but we -- I think we can have some maybe hopefully, some more good ideas there.

And in terms of the investment you mentioned, I can see that I think that's about a 6-month void or so. Would you have a figure in mind for the investment, either per square meter or the overall amount?

No, not right here.

Okay. Then second question, on the SEK 29 million provision for Convendum, would you expect to take an additional about SEK 30 million over this quarter, first quarter of '25? If I understand Fabege's exposure to the Convendum restructuring process correctly, that should be limited to about SEK 60 million, I think, in total, that's about 6 months rent and you've taken about half of that.

This was a one-off in 2024 before the reconstruction of Convendum started. So the impact in 2025 will be -- there will be more information once we are -- when the reconstruction has come through. What we have said is that Convendum, as we have agreed with Convendum is that they will stay in the 2 locations they are renting from Fabege. They will have some discounts during the first 3 years. So it will not be a loss, but there will be some discounts on the rent.

And we're also discussing some that we could take back some too if we find other tenants. So it will be more flexible. But that's positive for us. So -- but as I also said, there has to be -- we have an agreement with them, but also the whole...

It's depending on the full reconstruction.

Depending, yes. Depending, yes.

Okay. And my third question on the 5% negative re-leasing spread, I think on SEK 86 million worth of rent roll, if I'm not mistaken, given the figure reported in the third quarter, that would imply that about SEK 25 million in the fourth quarter was renegotiated at about 30% down. Could you please give us an indication on what submarket in Stockholm this was relating to and whether it was isolated to a single tenant or whether it's multiple tenants?

It was a couple of contracts and it's not -- how to say it so I don't sound too -- it was not -- it was some few contracts on -- it's a relatively small volume and some, maybe you can say special situations. But we -- yes, I think...

It's not really reflecting the total portfolio.

Right. Most of the contracts are prolonged, as you can see, volume-wise.

Great. And were those tenants primarily concentrated in a single market, let's say, Solna Business Park? Or were they spread throughout your portfolio?

It was a mix. It's more -- it was a mix.

The next question comes from [ Paul Gorry ] from [ CTI ].

Alex actually just asked a couple of my questions, but just maybe one quick follow-up on Convendum. The -- so we know that it's going to be a lower rent, but I'm guessing you can't comment on where it will be. But given that's known already, is that in the rental income bridge that you provide, so the quarter-by-quarter that Jonathan Kownator was referencing, is the lower Convendum rent already in there or...

No, it's not in there. No, it's not in there.

Okay. Okay. So in April, so in Q2, we'll know where the new sort of level is...

Yes.

And be updated then.

Yes.

Hopefully, we will know it when we present the Q1 report, but we don't know -- we can't say it for sure.

Yes. Okay. Okay. And just on the accounting, so the SEK 29 million that was recognized in this quarter, again, there's no way that, that can be kind of unwound if -- I don't know if the agreement was reached with Convendum kind of is more positive than you expected? Is there a way that, that can be -- that you can see a positive impact and that gets unwound? Or are we saying that that's a sort of definite write-off and we should just take that as kind of...

We don't -- you can always hope, but I can't see how it could happen that it should be more positive more than -- we can't expect to get this SEK 29 million back, I would say. I shouldn't say that, maybe [ Hawk ] and [ Jepson ] are listening. But no, I think we have to be realistic and that leads -- okay.

[Operator Instructions]

If there are no further questions, thank you very much for listening to us and joining us this afternoon. You're always, as you know, welcome to give Asa, Peter or myself a call. And we are really looking forward to see you here in Stockholm or on some other meetings in the near future. So thank you very much.