Interim report - Cision · nued to focus on raising apartments standards by upgrading to First...

Summary2014

Jan-Mar

2013

Jan-Mar

2013

Jan-Dec

Rental income, SEK million 828 691 3,025Operating surplus, SEK million 424 349 1,579Operating profit, SEK million 818 901 3,008Result before tax, SEK million 225 597 2,897Earnings per share before and after dilution, SEK 3.89 1.20 5.45

Potential for new lets, per cent 31 28 30Rent level increase for comparable properties, per cent 1.2 2.3 5.8Real vacancy rate residential, per cent 1.2 0.6 0.7Loan-to-value, total loans, per cent 58 59 56Property fair value, SEK million 47,252 36,456 44,091Number of apartments 42,811 36,216 41,319

• Rental income increased by 5.1 per cent (5,8) for comparable properties

• Operating surplus increased by 5.1 per cent (6,7) for comparable properties

• Change in property value SEK 404 million (573), or 0.9 per cent (1.6)

• Change in value of derivative instruments SEK -281 million (-62)

• Net profit before tax SEK 255 million (597)

• Earnings per share before and after dilution, SEK 3.89 (1.20)

• Investments in property holdings SEK 277 million (269)

• Purchase of SEK 2,620 million (594) inclusive SEK 2,125 million for properties in England acquired from a sister company

• Sale of properties for SEK 95 million. The selling prices were 2.9 per cent higher than fair value at the beginning of the year

• Akelius Fastigheter AB (publ) changed its name to Akelius Residential AB (publ)

Interim reportAkelius Residential

January to March 2014

2

Akelius ResidentialInterim Report, January to March 2014

GroupOperationsAkelius Residential’s business concept entails the long term ownership, development and management of residential properties able to generate constantly growing cash flow. Low financial risk is achieved through low loan-to-value ratios, long fixed interest rates and long periods of capital tied up.During the first quarter, the business has conti-nued to focus on raising apartments standards by upgrading to First Class and on increasing property estate holdings through the purchase of real estate in Germany with high upgrade potential. The 2013 restructuring program was completed at the end of March 2014 with Akelius Residential AB’s purchase of properties in England from a sister company. At the end of the period the Group owned properties in Sweden, Germany, Canada and England with an estimated market value of SEK 47,252 million in comparison with SEK 44,091

million at the end of 2013, of which 57 per cent in Sweden, 34 per cent in Germany, 4 per cent in Canada and 5 per cent in England.Properties are located primarily in attractive, popular locations in growing major cities. 76 per cent of the portfolio is located in greater Stock-holm, the Gothenburg region and the Öresund region in Sweden, Berlin, Hamburg, Toronto and London. The remainder of the properties are located in Swedish regional cities such as Halmstad, Umeå and Östersund and in large German cities such as Cologne, Munich and Frankfurt. The proportion of residential properties is high in line with company strategy. At the end of the year the proportion of residential proper-ties amounted to 95 per cent measured by market value. The total rentable area comprised 3,082,000 square metres and the residential holding amounted to 42,811 apartments.

Blücherplatz 5, Wiesbaden, Germany, acquired in 2014

3


Property portfolio 31 March 2014

Lettable space, thousand sqm Fair value

Residential units Residential Commercial Total SEK million SEK/sqm

Sweden 23,756 1,634 257 1,891 27,065 14,307

Germany 16,463 1,006 49 1,055 16,253 15,407

Canada 1,683 85 0 85 1,825 21,532

England 909 51 0 51 2,109 41,283

Total 42,811 2,776 306 3,082 47,252 15,329

Canada 1,683

Germany 16,463

Sweden 23,756

England 909

4


Total property portfolio

Residential units 23,756

Fair value, SEK million 27,065

- SEK per sqm 14,307

- required yield, per cent 4.84

Vacancy rate, per cent 1.9

- due to upgrades, per cent 76

- real vacancy rate, per cent 0.4

Sweden

Åre 318 units

Lysekil 295 units

Halmstad 1,314 units

Trollhättan 700 units

Helsingborg 2,223 units

Gothenburg 1,206 units

Malmö 2,129 unitsTrelleborg 689 units

Haparanda 151 unitsLuleå 114 units

Umeå 689 units

Östersund 1,070 units

Enköping 465 units

Skövde 821 units

Stockholm 9,015 units

Uddevalla 142 units

Eskilstuna 617 units

Borås 1,496 units

Lund 288 units

Hamburg 3,848 units

Average rent, SEK/sqm/year

Total portfolio 1 April 2013 1,104Sales -8

Comparable portfolio 1 April 2013 1,096

Increase in comparable portfolio 44Comparable portfolio 1 April 2014 1,140

Purchases -12

Total portfolio 1 April 2014 1,128

Comparable properties, January to March 2014

Average rent new leases, SEK/sqm/year 1,307

Potential new leases, per cent 17

4.1%

5


GermanyTotal property portfolio








Kiel 406 units

Hamburg 3,848 unitsLüneburg 99 units

Rostock 278 units

Berlin 8,294 units

Erlangen 286 unitsNürnberg 100 unitsRegensburg 131 units

Augsburg 167 unitsMunich 689 units

Frankfurt 484 units

Stuttgart 105 units

Cologne 596 unitsDüsseldorf 571 units

Mainz 409 units

The average rent for the total portfolio at 1 April, 2014 also includes four properties bought by Akelius Residential on 1 April 2014. The total living space was 14,032 square metres. The advance payment totalling SEK 183 million is reported in the balance sheet as per 31 March 2014 under Current Assets.

Average rent, EUR/sqm/month

Total portfolio 1 April 2013 7.58

Sales -

Comparable portfolio 1 April 2013 7.58

Increase in comparable portfolio 0.43Comparable portfolio 1 April 2014 8.01

Purchases -0.25



Average rent new leases, EUR/sqm/month 11.77


5.6%

6


CanadaTotal property portfolio








10 km

Akelius Residential properties in Toronto are marked in blue.

20 km

The table above shows the development as if Akelius Residential had owned the properties since 1 April 2013.

Average rent, CAD/sqft/month

Total portfolio 1 April 2013 1.97Sales -



Purchases -0.15



Average rent new leases, CAD/sqft/month 2.63


8.3%

7


EnglandTotal property portfolio

Residential units 909







20 km

Akelius Residential properties in London are marked in blue.

The property portfolio in England, was bought from a sister company during March 2014. The table above shows the development as if Akelius Residential had owned the properties since 1 April 2013.

Average rent, GBP/sqft/month


Sales -



Purchases -0.01



Average rent new leases, GBP/sqft/month 2.27


3.4%

8


SEK, million Period, per centTotal property return 828 7.72

2009 2010 2011 2012 2013 2014

20

18

16

14

12

10

8

6

4

2

0

Total property return

Total property return, Jan-Mar 2014

SEK, millionGrowth Jan-Mar,

per centFair value, 1 Jan 2014 44,091 -Translation difference -45 0.10 Revaluations 404 0.92Investments 277 0.63Purchases 2,620 5.94Sales -95 -0.22 Fair value, 31 March 2014 47,252 7.17

Operating surplus 424 0.96

Income return Value growth Average

per cent

2009 Jan-Dec

2010 Jan-Dec

2011 Jan-Dec

2012 Jan-Dec

2013 Jan-Dec

2014 Jan-Mar

9


Operating surplus SEK 424 millionConsolidated rental income for the year increa-sed by SEK 137 million to SEK 828 million (691). Out of the total increase in revenue, SEK 101 million is attributable to the purchase of new properties and SEK 36 million is due to increased rents on comparable properties. Adjusted for changes in exchange rates, rental income for comparable properties increased by 5.1 per cent compared to the same period in 2013.Average rent for comparable residential pro-perties in Sweden increased by 1.2 per cent during the first quarter. Average rent for new lets during the quarter was SEK 1,307 per square metre and year, which is 17 per cent higher than the average rent at the beginning of the year. At the end of the quarter the average rent was SEK 1,128 per square metre and year. Average rent for comparable residential pro-perties in Germany increased by 1.2 per cent during the first quarter. Average rent for new lets during the quarter was EUR 11.77 per square metre and month, which is 53 per cent higher than the average rent at the beginning of the year. At the end of the quarter the average rent was EUR 7.76 per square metre and month. Average rent for comparable residential pro-perties in Canada increased by 1.4 per cent during the first quarter. Average rent for new lets during the quarter was CAD 2.63 per square foot and month, which is 35 per cent higher than the average rent at the beginning of the year. At the end of the quarter the average rent was CAD 1.98 per square foot and month. The vacancy rate for residential properties was 2.8 per cent, of which 57 per cent was due to apartment upgrades. The real vacancy rate was therefore 1.2 per cent, which is 0.5 per cent higher compared to the vacancy rate at the end of 2013 mainly explained by Germany.Property expenses amounted to SEK 404 million (342), of which SEK 57 million (42) was in respect of maintenance, corresponding to an average annual expense of SEK 75 per square metre (64). The net purchase of properties has increased the operating surplus by SEK 50 million. The operating surplus for comparable properties increased by SEK 17 million or 5.1 per cent. The operating surplus for the period was SEK 424 million (349). For the total portfo-lio, the operating surplus margin was 51.2 per cent (50.5).

590

610

630

650

5.1%

300

325

350

375

5.1%

0.0

0.5

1.0

1.5

0.5%

Q1 2013

1 Jan 2014

Q1 2014

1 Apr 2014

Rental income, comparable properties

Operating surplus, comparable properties

Real vacancy

SEK million

SEK million

per cent

Q1 2013 Q1 2014

10


Increase in value of properties 0.9 per centThe increase in value of the property holding was SEK 404 million (573) for the year, equiva-lent to 0.9 per cent (1.6). The increase in value is due to increased rental income. Properties were sold during the quarter for a total of SEK 95 million, which is 2.9 per cent above the estima-ted fair value at the beginning of the period.

Net financial items SEK -312 million Income from financial items for the quarter was SEK 2 million (37) and financial expenses were SEK 314 million (279). The Group’s interest expenses increased by SEK 36 million compared to the same period last year due to increased borrowings in connection with purchases of properties. The average interest rate on total borrowings decreased by 0.2 per-centage points, to 4.58 which affected interest expenses positively. The interest coverage ratio was 1.35 (1.32).

Change in fair value of derivatives SEK -281 million Derivative financial instruments during the period declined in value by SEK 281 million (-62), mainly due to the fall in market interest rate. Derivative instruments consist mainly of interest rate swaps. Estimates of the fair value of derivatives is based on Level 2 of the fair value hierarchy. Compared to 2013, no transfers have occurred between the different levels of the hierarchy, and no significant changes have been made regarding the valuation method. Cash flow in the derivative contracts is compared with the cash flow that would have been received if the contracts were concluded at market price on the closing date. The difference in the cash flows is discounted using an interest rate which takes into account the credit risk. The present value obtained is reported in the balance sheet at fair value. Change in fair value is recognized in the income statement without applying hedge accounting.

Property purchases SEK 2,620 million During the period properties were purchased for SEK 2,620, of which SEK 2,125 million relates to the purchase of properties in England as part of the Akelius Group restructuring started in 2013.Properties in Germany were bought for SEK 495 million with an average initial yield of 4.3 per cent at the average property price per square metre of SEK 11,100.

Investements

225

250

275

300

2.9%

SEK million

Q1 2013 Q1 2014

50,000

40,000

30,000

20,000

10,000

0

5.50%

5.00%

4.50%

4.00%

3.50%

3.00%Germany

Purchases SEK million

SEK/sqm Yield

85

90

95

100

2.9%

Fair value Sales price

Sales SEK million

England

11


Average yield per cent

Residential Commercial

Sweden 4.65 6.92

Germany 4.57 6.58

Canada 4.47 -

England 4.43 -

Requiered yield

Opening 4.75Translation difference 0.00

Purchases -0.01

Sales 0.00

Comparable 0.00

Closing 4.74

per centProperty investments SEK 277 million Investments in properties for the period totalled SEK 277 million (269), equivalent to SEK 91 per square metre. In conjunction with tenants moving out, apartments are upgraded to First Class, which corresponds to the quality of a newly built apartment. Total investment for First Class during the period is SEK 152 million.Other investments of SEK 125 million in improved standards concerned upgrading of residential properties, the conversion of commercial premises and lofts to apartments, densification of existing properties and water and energy saving projects.

Market valuation of properties The market value of all properties was assessed by internal valuations by closing day. The valu-ations are based on a cash flow model for each individual property, with separate assessments of future earning ability and required rates of return. The cash flow model is based on actual income and expenses adjusted for a normalized future cash flow. In order to guarantee valua-tions, 100 per cent of the properties have been valued externally. Values were verified by Jones Lang LaSalle and CB Richard Ellis. The average required yield for residential pro-perties was 4.74 per cent which is unchanged compared to the beginning of the period. The estimated market value of the Group’s property holding at the end of the period was SEK 47,252 million, which is equivalent to an average of SEK 15,329 per square metre as compared to SEK 14,736 at the end of 2013. The higher value per square metre is primarily due to the purchase of properties in England which, on average, were valued at SEK 41,283 per square metre. The market value has increased by SEK 404 million, or 0.9 per cent, as a result of changes in value, and decreased by SEK 45 million, owing to fluctuating exchange rates. The value increase of SEK 404 million is due to increased rental income. Purchases and investments for the quarter amounted to SEK 2,897 million and property sales totalled SEK 95 million. Residential properties constitute 95 per cent of the market value, which is in line with the company strategy of residential properties comprising a minimum of 90 per cent.

Loan-to-value 58 per centThe Group’s borrowing increased during the year by SEK 2,728 million from SEK 25,521 million at the end of 2013 to a total of SEK 28,249 million, primarily due to the net ac-quisition of properties. The loan-to-value ratio

Opening 44,091Translation difference -45Revaluations 404Investments 277Purchases 2,620Sales -95Closing 47,252

SEK millionFair value properties

12


Equity & Liabilities

Equity 31%

Deferred tax 6%

Loans without security 8%

Loans with security

50%

Other liabilities 5%

Interest hedge

< 1 year 21%> 5 years 39%

1 - 5 years 40%

was 58 per cent. Secured loans increased by SEK 1,654 million from SEK 22,472 million to SEK 24,126 million at the end of the quarter, corresponding to a loan-to-value ratio of 49 per cent. The secured loans was raised from 26 banks in four countries which leads to less dependence on the financial strength of each country and bank. Assets pledged as collateral for mortgages has increased from SEK 25,545 million at the end of 2013 to SEK 26,685 million, primarily related to the purchase of properties in England. Unsecured loans, which encompass a listed debenture loan, borrowing from the public and loans from group compa-nies, increased during the period by SEK 1,074 million from SEK 3,049 million at the end of 2013 to SEK 4,123 million. The debenture loan, which is listed on Nasdaq OMX Stockholm, had a nominal value of SEK 1,000 million at the end of the period.

Liquidity SEK 1,044 millionAt the end of the period available funds in the form of cash and secured but unutilized credit facilities totalled SEK 1,044 million, compared to SEK 1,597 million at the end of 2013. Another SEK 78 million of unutilized credit facilities is usable when offering the lenders security. The non-mortgaged share of the properties’ fair value corresponded to SEK 23,126 million at the end of the period.

Equity to assets ratio 31 per centDuring the quarter consolidated equity rose by SEK 155 million through the comprehensive income. At the end of the period consolidated equity was SEK 15,324 million, equivalent to an equity to assets ratio of 31 per cent.

Interest rate hedge 4.5 yearsOf the SEK 28,249 million in total interest-be-aring debt, SEK 6,122 million had a fixed interest rate term of less than one year and SEK 10,247 million had a fixed interest rate term of more than five years. The loans had an average interest rate of 4.58, which is 0.17 per cent lower than at the beginning of the year. The average interest rate hedge was 4.5 years as compared to 5.0 at the end of 2013.

Capital tied-up 4,5 yearsTotal interest-bearing debt was on average tied up for 4.5 years as compared to 4.6 years at the end of 2013. The loans are raised from 26 banks, 30,000 private investors, the capital market and unsecured loans from companies within the Akelius Apartments. The loans that mature within one year amount to SEK 3,661 million.

13


TaxTotal tax for the period amounted to SEK 43 million, mainly related to deferred tax from unrealized value increase in the property portfolio. Akelius Residential has no ongoing tax disputes.

Cash flowOperating activities generated a cash flow of SEK 105 million (25). The improvement is mainly due to an increased operating surplus. Net cash from financing activities was SEK -2,858 million (-712) mainly related to purchas-es of properties. Cash flow from acquisitions of properties is secured before signing acquisition agreements. Profitable and non-mandatory upgrades to First Class can, if needed, be stopped within a three-month period. Cash flow from financing activities was SEK 2,743 million (729).

Risks and contingenciesThe operational risks are limited through the property portfolio being concentrated to resi-dential properties in locations with population growth. A strong residential market in Sweden, Germany and Canada reduces the risk for long-term vacancies. In order to further reduce the risk, or variations in the cash flow, interest rates are fixed long-term. Access to capital from a large number of investors, through the capital market and from private individuals provides a low refinancing risk. Overseas investments are currency-hedged so that the Group’s equity to assets ratio is not affected by exchange rate fluctuations.

Accounting Akelius Residential’ s interim report has been prepared in accordance with IAS 34, Interim Financial Reporting. The financial statements of the mother company have been prepared in accordance with the Swedish Annual Accounts Act and the accounting standard RFR 2, Ac-counting for Legal Entities.The Group applies the same accounting prin-ciples as in the last annual report, with the exception of IFRS 11 and IFRIC 21 Levies. As from 2014, Akelius Residential applies IFRIC 21 Levies and has reported in the interim report for January-March 2014 the total amount of the annual property tax liability. Additionally, a prepaid expense has been reported and is amortized on a straight-line basis over the financial year. IFRS 11 has not had any material impact on the Group.

Estimates and judgments Estimates and judgments are continually evaluated and are based on historical experien-ce and other factors, including expectations of future events that are believed to be reasona-ble under the circumstances. The same estima-tes and judgments are followed in the interim report as in the last annual report.

Related party transactions The following related party transactions were carried out during the period. The Group has raised a loan of SEK 1,058 million from the parent company. A portfolio comprising 909 apartments in England was acquired from a sister company. The related party transactions were made on terms equivalent to those that prevail in arm’s length transactions.

Annual General Meeting 2014 At the Annual General Meeting 14 April 2014, the Board and Managing Director decided to distribute to the shareholder a total amount of 1 billion Swedish kronor. The dividend is equivalent to 2,138 Swedish kronor per share.

Significant events after the reporting periodThe company has paid a dividend of SEK 1,000 million and a new share issue has been registered for about SEK 2,000 million. Akelius Residential plans to issue preferred shares for a minimum of SEK 500 million which will be listed on Nasdaq First North. We expect an increase in equity of at least SEK 1,500 million. The company has implemented a share split entitling the shareholder to receive 4,499 new shares for each share owned. The Group intend to purchase residential property in Paris. At the beginning of May, Akelius Fastigheter AB (publ) changed its name to Akelius Residen-tial AB (publ).

Danderyd, 8 May 2014

Akelius Residential AB (publ)

Pål AhlsénManaging director

The interim report has been reviewed by the auditors.

14


Report of Review of Interim Financial Information

IntroductionWe have reviewed this report for the period 1 January 2014 to 31 March 2014 for Akelius Residenti-al AB (publ). The board of directors and the CEO are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsi-bility is to express a conclusion on this interim report based on our review.

Scope of ReviewWe conducted our review in accordance with the International Standard on Review Engagements ISRE 2410, Review of Interim Report Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing, ISA, and other generally accepted auditing standards in Sweden. The procedures performed in a review do not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

ConclusionBased on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, in accordance with IAS 34 and the Swedish Annual Accounts Act, regarding the Group, and with the Swedish Annual Accounts Act, regarding the Parent Company.

Stockholm, 8 may 2014

Öhrlings PricewaterhouseCoopers AB

Mats Nilsson Authorised Public Accountant

Stina Carlson Authorised Public Accountant

15


Consolidated statement of comprehensive incomeSEK million

2014

Jan-Mar

2013

Jan-Mar

2013

Jan-Dec

3 months 3 months 12 months

Rental income 828 691 3,025Operating costs -347 -300 -1,143Maintenance -57 -42 -303

Operating surplus 424 349 1,579Central administration -8 -10 -55Other income and expenses 4 -10 -48

Costs - property sales -6 -1 -37Net gain on revaluation of investment properties 404 573 1,569Operating profit 818 901 3,008

Interest income 1 1 8Interest expenses -307 -271 -1,203

Other financial income and expenses -6 28 -54Change in fair value of derivative financial instruments -281 -62 1,138Profit before tax 225 597 2,897

Tax -43 -115 -677Profit for the period / year 182 482 2,220

Translation difference -27 -144 206Comprehensive income for the period / year 155 338 2,426

Profit attributable to: - parent company shareholders 181 481 2,216 - holdings with no controlling influence 1 1 4

Total comprehensive income attributable to: - parent company shareholders 155 337 2,422 - holdings with no controlling influence - 1 4

Earnings per share before and after dilution, SEK 3.89 1.20 5.45

16


Consolidated statement of financial positionSEK million

2014

31 Mar

2013

31 Mar

2013

31 Dec

AssetsInvestment property 47,252 36,456 44,091Fixed assets 30 31 31Financial fixed assets 1,040 981 967Total non-current assets 48,322 37,468 45,089

Other assets 401 598 544Cash and cash equivalents 49 70 59Total current assets 450 668 603Total assets 48,772 38,136 45,692

Equity and liabilitiesEquity 15,324 10,308 15,169

Long-term interest-bearing liabilities 24,588 17,319 22,398Derivative financial instruments 1,741 2,388 1,496

Deferred tax 2,790 2,142 2,695Other liabilities 23 100 25Total non-current liabilities 29,142 21,949 26,614

Trade and other payables 627 716 762Short-term interest-bearing liabilities 3,661 5,160 3,123Derivative financial instruments 18 3 24

Total current liabilities 4,306 5,879 3,909Total equity and liabilities 48,772 38,136 45,692

Interest-bearing liabilities- without security 4,123 2,955 3,049- with security 24,126 19,524 22,472Total 28,249 22,479 25,521

17


Consolidated statement of cash flowsSEK million

2014

Jan-Mar

2013

Jan-Mar

2013

31 Dec


Cash generated from operations 386 326 1,570Interest paid -281 -300 -1,249Income tax paid - -1 -3Net cash generated from operations 105 25 318

Investments in investment properties -277 -269 -1,531Purchase of investment properties -2,620 -594 -6,901

Sales of investment properties 93 29 1,765Increase/decrease in other fixed assets -54 122 97Net cash used in investing activities -2,858 -712 -6,570

New share issue - - 2,120

Capital injection - - 680

Borrowings 2,789 2,772 9,361

Repayment of loans -46 -2,043 -6,122

Purchase of derivative instruments - - 271

Group contribution - - -27Net cash from financing activities 2,743 729 6,283

Cash flow for the period / year -10 42 31

Cash and cash equivalents at end of the period / year 49 70 59

18


Consolidated statement of changes in equitySEK million

Share capital

Share premium

Other reserves

Profit brought forward

Holding without

controlling influence Equity

Equity 31 December 2012 400 - -164 9,707 27 9,970

Profit for the year, Jan-Mar - - - 481 1 482

Other comprehensive income - - -144 - - -144

Equity 31 March 2013 400 - -308 10,188 28 10,308

Share issue 183 1,937 - - 2,120

Bonus issue 680 - - -680 - 0

Capital injection - - - 680 - 680

Appropriation - - - -27 - -27

Profit for the year, Apr-Dec - - - 1,735 3 1,738

Other comprehensive income - - 350 - - 350Equity 31 December 2013 1,263 1,937 42 11,896 31 15,169Profit for the year, Jan-Mar - - - 181 1 182

Other comprehensive income - - -27 - - -27

Equity 31 March 2014 1,263 1,937 15 12,077 32 15,324

19


Borrowings

Duration Fixed interest rates Capital tied up

YearsAmount in SEK million

Average interest, per cent

Share, per cent

Amount in SEK million

Share, per cent

0-1 6,122 3.15 22 3,661 131-2 1,401 4.99 5 8,362 302-3 3,658 4.94 13 6,014 213-4 4,039 3.97 14 3,834 144-5 2,783 5.23 10 1,079 45-6 2,763 5.84 10 387 16-7 1,539 5.83 5 10 07-8 2,970 5.25 11 0 08-9 1,075 4.72 4 241 19-10 427 4.84 2 0 010 -> 1,472 4.44 5 4,661 16Total 28,249 4.58 100 28,249 100

Segment informationJan-Mar 2014

Sweden Germany Canada England Total

2014 2013 2014 2013 2014 2013 2014 2013 2014 2013

Rental income 525 457 272 234 31 - - - 828 691

Usage bonds costs -124 -123 -41 -33 -3 - - - -168 -156

Operating expenses -60 -54 -23 -24 -2 - - - -85 -78

Maintenance costs -40 -30 -16 -12 -1 - - - -57 -42

Site leasehold fee -1 -1 - - - -1 -1

Property tax -11 -9 -8 -7 -3 - - - -22 -16

Property administration -47 -33 -20 -16 -4 - - - -71 -49

Operating surplus 242 207 164 142 18 0 0 0 424 349

Change in fair value 205 267 109 306 106 - -16 - 404 573

Total return 447 474 273 448 124 0 -16 0 828 922

Property fair value 27,065 23,885 16,253 12,571 1,825 - 2,109 - 47,252 36,456

20


Statement of comprehensive income, parent company

2014

Jan-Mar

2013

Jan-Mar2013

31 Dec

SEK million


Rental income - 13 51Property costs - -7 -24Operating surplus - 6 27

Other income and expenses -10 -6 -57Profit from sales of properties - - 76

Profit from shares in subsidiaries - - 498Financial net -79 -35 -308Change in fair value of derivatives financial instruments -108 -202 253Profit before provisions -197 -237 489

Appropriations - - -106Profit before tax -197 -137 383

Tax 24 -1 94Profit for the period / year -173 -238 477

Comprehensive income for the period / year -173 -238 477

21


Statement of financial position, parent companySEK million

2014 31 Mar

2013 31 Mar

201331 Dec

AssetsFixed assets - 272 -Financial fixed assets 11,079 9,719 14,308Current assets 12,324 10 91

Total assets 23,403 10,001 14,399

Equity and liabilitiesEquity 6,848 3,507 7,022

Provisions - 8 -

Loans 3,130 337 2,440

Loans from group companies 12,044 5,133 4,678

Derivative financial instruments 339 530 231

Trade and other payables 1,042 486 28

Total equity and liabilities 23,403 10,001 14,399

22


Key figures2014

31 Mar2013

31 Dec2012

31 Dec2011

31 Dec2010

31 Dec

EquityEquity, SEK million 15,324 15,169 9,970 8,567 8,211Equity/assets ratio, per cent 31 33 27 26 28Risk capital to assets ratio, per cent 46 46 39 41 46

Interest-bearing liabilitiesLoan-to-value, secured loans, per cent 49 49 53 50 48Loan-to-value, total loans, per cent 58 56 59 60 61Interest coverage rate, secured loans 1.6 1.4 1.5 1.6 1.6

Interest coverage rate, total loans 1.3 1.2 1.2 1.3 1.2

Fixed interest ratesAverage interest rate secured loans, per cent 4.20 4.42 4.63 4.94 5.28Average interest rate total loans, per cent 4.58 4.75 4.85 5.26 5.63Fixed interest term secured loans, year 4.8 5.3 5.7 5.8 5.8Capital tied up secured loans, year 4.9 4.8 5.3 6.0 5.0

PropertiesNumber of apartments 42,811 41,319 35,443 35,151 31,502Rentable area, thousand sqm 3,082 2992 2,576 2 ,632 2,424

Growth in rental income*, per cent 5.1 5.8 4.4 3.8 -Growth in operating surplus*, per cent 5.1 6.7 4.1 8.3 -Real vacancy rate residential, per cent 1.2 0.7 0.7 0.7 0.6

Fair value properties, SEK millionOpening 44,091 35,437 32,352 28,269 29,255Exchange differences -45 454 -359 -44 -839Change in fair value 404 1,569 2,671 1,025 356Investments 277 1,531 1,493 1,138 917Purchases 2,620 6,901 1,663 3,792 972Sales -95 -1,801 -2,383 -1,828 -2,392Closing 47,252 44,091 35,437 32,352 28,269

Fair value, per sqm 15,329 14,736 13,755 12,292 11,662Required yield, per cent 4.74 4.75 4.73 5.07 5.09Change required yield*, per cent 0.00 -0.01 -0.28 0.01 -

*) For comparable properties

23


Key figures2014

31 Mar2013

31 Dec2012

31 Dec2011

31 Dec2010

31 Dec

Properties SwedenAverage residential rent, SEK /sqm/year 1,128 1,114 1,074 1,026 967Growth in average residential rent*, per cent 1.2 5.8 5.0 5.1 1.9Growth in rental income*, per cent 5.7 5.5 3.8 - -Growth in operating surplus*, per cent 9.5 3.3 5.2 - -Fair value, SEK million 27,065 26,784 23,456 22,574 21,377Fair value, SEK per sqm 14,307 14,115 13,809 12,055 11,435Required yield, per cent 4.84 4.84 4.79 5.15 5.15Number of apartments 23,756 23,867 21,707 23,354 22 ,926

Properties GermanyAverage residential rent, EUR /sqm/month 7.76 7.71 7.52 7.19 6.85Growth in average residential rent*, per cent 1.2 5.6 5.6 7.0 4.0Growth in rental income*, per cent 3.5 6.8 6.8 - -Growth in operating surplus*, per cent -0.9 13.7 1.0 - -Fair value, SEK million 16,253 15,549 11,981 9,778 6,892Fair value, SEK per sqm 15,407 15,398 13,649 12,903 12,623Required yield, per cent 4.65 4.64 4.64 4.87 4.91Number of apartments 16,463 15,769 13,736 11,797 8,576

*) For comparable properties

24


Key figures2014

31 Mar2013

31 Dec2012

31 Dec2011

31 Dec2010

31 Dec

Properties Canada**Average residential rent, CAD /sqft/month 1.98 1.94 2.01 1.34 -Growth in average residential rent*, per cent 1.4 7.7 11.2 - -Growth in rental income*, per cent 10.5 20.6 - - -Growth in operating surplus*, per cent 15.6 56.4 - - -Fair value, SEK million 1,825 1,758 1,074 26 -Fair value, SEK per sqm 21,532 20,710 22,026 19,833 -Required yield, per cent 4.47 4.47 4.52 4.25 -Number of apartments 1,683 1,683 1,046 17 -

Properties England***Average residential rent, GBP /sqft/month 1.61 1.55 1.54 1.04 -Growth in average residential rent*, per cent 4.7 0.1 13.7 - -Growth in rental income*, per cent -5.5 29.0 - - -Growth in operating surplus*, per cent -16.5 31.7 - - -Fair value, SEK million 2,109 1,792 1,580 145 -Fair value, SEK per sqm 41,283 36,430 32,730 22,872 -Required yield, per cent 4.43 4.64 4.53 4.77 -Number of apartments 909 870 870 97 -

EmployeesAverage number of employees 265 221 213 210 176

*) For comparable properties**) The property portfolio in Toronto, Canada, was bought from a sister company at the end of 2013. The table above shows the development as if Akelius Residential had owned the properties since 2011.***) The property portfolio in England, was bought from a sister company during March 2014. The table above shows the development as if Akelius Residential had owned the properties since 2011.

25


Definitions

Capital tied up Average capital tied up is calculated taking secured but unutilised credit commitments into consideration.

Equity to assets ratio Equity in relation to total assets.

Interest coverage ratio, Profit/loss before income tax with add-back of depreciations, impairment charges, the cost of property sales, interest expenses, changes in value of assets and liabilities in relation to interest expenses for secured loans.

Interest coverage ratio, Profit/loss before income tax with add-back of depreciations, impairment charges, the cost of property sales, interest expenses, changes in value of assets and liabilities in relation to interest expenses for all loans.

Loan-to-value, Secured interest-bearing liabilities in relation to total assets.

Loan-to-value, total loans Secured and unsecured interest-bearing liabilities in relation to total assets.

Operating surplus margin Operating surplus in relation to rental income.

Real vacancy rate The total number of vacant apartments less the number of apartments vacant due to renovation work in relation to the total number of apart-ments.

Risk capital Equity, deferred tax liability and unsecured interest-bearing liabilities.

Risk capital to assets ratio Risk capital in relation to total assets.

Vacancy rate The number of vacant apartments in relation to the total number of apartments.

secured loans

secured loans

total loans

SwedenSvärdvägen 3ABox 104, S-182 12 DanderydTel + 46 (0) 8 566 130 00www.akelius.se

GermanyLeipziger Platz 14D-10117 BerlinTel + 49 (0) 30 7554 110www.akelius.de

Canada289 Niagara StreetToronto M6J 0C3Tel + 1 (416) 214-2626www.akelius.ca

England1 Earlham StreetLondon WC2H 9LLTel + 44 (0) 2 078 719 695www.akelius.co.uk

AgendaInterim report January-June .......................................................................................28 August 2014

Interim report January-September ........................................................................29 November 2014

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