Fabege AB Q2 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: John Vuong - Van Lanschot Kempen N.V. - Analyst : Hi, good morning team. Thank you for the presentation. On your discussions with occupiers. Is there any specific submarkets where you see better demand than others? Could you perhaps also zoom in on the letting progress for the Haga Norra and Hammarby Sjostad development?

Question: John Vuong - Van Lanschot Kempen N.V. - Analyst : Okay, clear. And when you're talking about more potentially more turnover in those creative industries and are you talking about downscaling for these occupiers or how should I --?

Question: John Vuong - Van Lanschot Kempen N.V. - Analyst : Okay. That's fair. And then just on the last slides, slide 22, you mentioned as one of the priorities for 2024 is to enable future projects. Could you maybe talk about that? without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JULY 05, 2024 / 8:30AM, FABG.ST - Q2 2024 Fabege AB Earnings Call

Question: John Vuong - Van Lanschot Kempen N.V. - Analyst : Okay. That makes sense. That's it from my side. Thank you.

Question: Alexander Totomanov - Green Street Advisors, LLC - Analyst : Good morning and thank you for taking my questions. Two questions from me. And I was wondering, you reported a negative rent reversion of 2.3% on SEK59 million of renegotiated leases aren't a negative for negotiations limited to specific sub markets or a set of submarkets Stockholm?

Question: Alexander Totomanov - Green Street Advisors, LLC - Analyst : Thank you. And one question from me for apparel. So I'm thinking has expanded the portfolio of callable swaps to SEK7 billion from SEK6 billion previously. Could you give us an idea of the breakdown of the portfolio like come? Our volumes approximately equally spread out, say SEK2 billion in 1.8%, 2%, SEK2 billion, 2.2 %, 0.2% and maybe SEK3 billion, 2.2%, 2.5% or is it skewed in one way?

Question: Alexander Totomanov - Green Street Advisors, LLC - Analyst : Yes.

Question: Alexander Totomanov - Green Street Advisors, LLC - Analyst : Thank you.

Question: Jonathan Kownator - Goldman Sachs & Company, Inc. - Analyst : Good morning. Two questions on my end. I just wanted to double check on Telia. I think you were saying that is going be from 3.6% to 2.5% of your total rent after the readjustment, did I get that correctly? And does that mean that vacancy increases in the portfolio or it has done be put for redevelopment? The rest of the space? That was the first question, please. And the second question, just on the ICR of 2.4 times. Obviously, you've done refinancing where the margins have improved. You've increased also commercial paper to just wanted to understand whether you were comfortable at this stage with the 2.4 times ICR or whether we should look to mitigate that and whether you be potentially looking at disposals in particular, you highlighted there were a few transactions at good levels. So is that something that you're considering at this stage? Thank you.

Question: Jonathan Kownator - Goldman Sachs & Company, Inc. - Analyst : Okay. With that at this stage, I mean, one of the option that you haven't mentioned these dividend, I suspect is not an option that you're considering given these other avenues that you have currently or just essentially time will improve near the metrics as you deliver buildings and as also the variable component of your interest cost helps. Is that a fair assumption?

Question: Jonathan Kownator - Goldman Sachs & Company, Inc. - Analyst : Okay. Just to be clear, I mean, looking also at slide 15, there's no, who are new to the eye in the sense that you don't have within your top tenants any big expiries in the near term and you're forecasting fairly flat, i.e., you don't have any big departures upcoming that you are aware of?

Question: Jonathan Kownator - Goldman Sachs & Company, Inc. - Analyst : Okay. Thanks so much.

Question: Nadir Rahman - UBS AG - Analyst : Good morning, thanks for the presentation. I wanted to ask on the regarding the comments you made in the Q1 earnings release that the eye can see you had guided to be roughly 5% and therefore occupancy at around 95% and quarter years. There's been, I believe, good job reduction in the occupancy towards 90% as of this quarter. I wanted to ask, where do you see the numbers going forward from here as a forecast? And secondly, on a similar note, am with the Ltd. We wanted our scan. So we've seen it becoming flat now and where do you see that going from here? And I know there's been questions about interest coverage ratio as well. So on the LTV, where do you see that going from here with valuations starting to see perhaps some bottom out and reach at trough like we have, we're on.

Question: Nadir Rahman - UBS AG - Analyst : Thank you.

Question: Paul May - Barclays Capital - Analyst : Hey, guys, thanks for the presentation. A couple of quick ones from me. Asa spoke from transaction volume and valuations. Pete mentioned transaction volume is a proving, I think year-on-year it has been, but it's still materially down does is the sort of general average we say in terms of transaction volume. without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JULY 05, 2024 / 8:30AM, FABG.ST - Q2 2024 Fabege AB Earnings Call And so I'm surprised the confidence you have over where the values are at the moment on the basis of that still relatively muted transactional volume here, a couple of deals does not necessarily mean the whole portfolio is worth it. I'm just wondering your comments on that, if you see that transaction market improving noting June was down year on year, for example, relative to last year across Sweden. And then secondly, linked to that, it's a question I asked all companies in which you buy all of your assets today, current book values with marginal financing costs? I'm just wondering what your response on that.

Question: Paul May - Barclays Capital - Analyst : Thank you for your honesty. As a result, would you be should we be expecting more exposal's over the coming, say, 6, 12 months to take advantage of that good transaction market. And as you say not all the properties that you own, you would necessarily want to own longer term, should we expect? without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JULY 05, 2024 / 8:30AM, FABG.ST - Q2 2024 Fabege AB Earnings Call

Question: Paul May - Barclays Capital - Analyst : I'm sorry. One last one. Just on that, the debt ratio continues to sit above your target, I mean 13.9x now slightly increasing versus the 13x target that you have. How would you plan on bringing that back down is that core financial metric or are you more focused on the LTV and the ICR?