year end report, january to december 2015 › main › 3302 › 2888680 › 1095533.pdf · year end...

1Akelius Residential Property AB (publ)

Year end report, January to December 2015

Akelius Residential Property AB (publ)


• Rental income SEK 4,339 million (3,602)• Rental income increased by 4.3 per cent (3.4) for comparable properties• Operating surplus SEK 2,175 million (1,882)• Operating surplus increased by 4.0 per cent (7.1) for comparable properties • Change in property value SEK 8,026 million (1,412), or 13.9 per cent (3.2)• Change in value of derivative instruments SEK 533 million (-1,149) • NetprofitbeforetaxSEK9,206million(852)• Earnings per share SEK 2.33 (0.15)• Investments in property holdings SEK 2,216 million (1,881)• Purchases of properties SEK 12,093 million (9,678)• Sales of properties SEK 5,755 million (1,084), 23 per cent (14) higher than fair value at the

beginning of the year

Summary

2015 2014 2015 2014Oct-Dec Oct-Dec Jan-Dec Jan-Dec

Rental income, SEK million 1,145 983 4,339 3,602Operating surplus, SEK million 494 424 2,175 1,882Operatingprofit,SEKmillion 4,500 626 9,977 3,226Profitbeforetax,SEKmillion 4,429 -40 9,206 852Earnings per share before and after dilution, SEK 1.12 -0.11 2.33 0.15Rent level increase for comparable properties, per cent 1.0 1.2 3.8 4.3Real vacancy rate residential, per cent 1.3 1.0 1.3 1.0Loan-to-value, per cent 48 52 48 52Property fair value, SEK million 72,764 57,736 72,764 57,736Number of apartments 51,231 47,896 51,231 47,896

2 Akelius Residential Property AB (publ)


The current currency war, with new printed money and interest rates used as weapons, has given a boost to real estate prices. We report a change in property value of SEK eight billion, of whichSEKfivebillionisattributabletothecurrentcurrency war, SEK one billion to property sales and SEK two billion to an increased operating surplus. Some markets are hot today, maybe even overheated. We will likely buy fewer properties in 2016 than we did in 2015.

Our concentration in metropolitan areas has increased. At the end of the year, 72 per cent of our properties were in cities with a population of more than one million. This is an increase of 9 percentage points since the end of 2014. Apart-ments for metropolitans is our thing.

During the year, we entered the United States with the purchase of properties in New York, Washing-ton D.C. and Boston. We grew even further with additional purchases in London, Berlin, Hamburg, Toronto, Stockholm, Paris and Montreal. Property purchases totalled SEK twelve billion, of which SEK 5.5 billion were in the United States.

Sales were carried out in Sweden, Germany, England and Canada. Our sales volumes reached nearlySEKsixbillion,23percentabovefairvalueat the beginning of the year.

Among the sales, we sold a portfolio of 900 apartments in Germany - 43 per cent above fair value - and Hamlet Gardens in London with 121 apartments - 18 per cent above fair value.

In the capital market, we issued both preferred sharesforSEKtwobillionandbondsforSEKfivebillion.Westartedtoissuecertificates,theout-standing volume is SEK two billion. Standard & Poor’s gave us a credit rating of BBB-.

Loan-to-value has fallen from 52 to 48 per cent. For secured loans, loan-to-value went down from 47 to 36 per cent. The equity to assets ratio has risen by three percentage points to 41 per cent. Liquidity is SEK eight billion, SEK four billion more than short-term loans.

Investments in properties amounted to SEK 2.2 billion, 18 per cent more than in 2014. Almost half of the investments were related to upgrading of vacant apartments. We are working tirelessly to provide both current and future tenants with better living in the megacities of the Western world.

Pål AhlsénCEO, Managing Director

Currency war boosts real estate prices

Lobby at West Square, Boston.Reception at West Square, Boston.



Property portfolio 2015-12-31

Canada 3,999

United States 1,534

Sweden 23,520

England 1,404 Germany

20,307

France 467

Lettable space, thousand sqm Fair value

CountryResidential

units Residential Commercial Total SEK million SEK/sqm

Sweden 23,520 1,617 233 1,850 31,727 17,148Germany 20,307 1,232 79 1,311 24,892 18,986Canada 3,999 226 1 227 4,859 21,424United States 1,534 111 1 112 5,451 48,769England 1,404 67 5 72 4,840 67,660France 467 14 2 16 995 62,640Total 51,231 3,267 320 3,587 72,764 20,284



Sweden

Total property portfolio Average rent, SEK/sqm/yearResidential units 23,520 Total portfolio 2015-01-01 1,156Fair value, SEK million 31,727 Sales -1- SEK per sqm 17,148 Comparable portfolio 2015-01-01 1,155- required yield, per cent 4.30 Increase in comparable portfolio 30

Vacancy rate, residential, per cent 1.5 Comparable portfolio 2016-01-01 1,185- due to upgrades, per cent 92 Purchases -1- real vacancy rate, per cent 0.1 Total portfolio 2016-01-01 1,184

2.6 %

Lysekil 295 apartments

Halmstad 1,162 apartments

Trollhättan 700 apartments

Helsingborg 2,345 apartments

Gothenburg 1,186 apartments

Malmö 3,975 apartments

Haparanda 151 apartments*

Umeå 572 apartments*

Östersund 968 apartments*

Skövde 821 apartments

Stockholm 8,957 apartmentsEskilstuna 604 apartments

Borås 1,496 apartments

Lund 288 apartments

Hamburg 4,143 apartments

*) Sold per 2016-02-01.



Germany

Total property portfolio Average rent, EUR/sqm/monthResidential units 20,307 Total portfolio 2015-01-01 7.77Fair value, SEK million 24,892 Sales 0.00- SEK per sqm 18,986 Comparable portfolio 2015-01-01 7.77- required yield, per cent 4.35 Increase in comparable portfolio 0.40

Vacancy rate, residential, per cent 5.0 Comparable portfolio 2016-01-01 8.16- due to upgrades, per cent 60 Purchases -0.03- real vacancy rate, per cent 2.0 Total portfolio 2016-01-01 8.13

5.1%

Kiel 406 apartments*

Hamburg 4,143 apartments

Lüneburg 99 apartments*

Rostock 278 apartments

Berlin 12,274 apartments

*)Salesagreementsigned,hand-overdateduringthefirstquarter2016.

Munich 735 apartments

Frankfurt 635 apartments

Cologne 587 apartmentsDüsseldorf 740 apartments

Mainz 410 apartments



Total property portfolio Average rent, CAD/sqft/monthResidential units 3,999 Total portfolio 2015-01-01 1.83Fair value, SEK million 4,859 Sales -- SEK per sqm 21,424 Comparable portfolio 2015-01-01 1.83- required yield, per cent 4.37 Increase in comparable portfolio 0.07

Vacancy rate, residential, per cent 11.1 Comparable portfolio 2016-01-01 1.89- due to upgrades, per cent 68 Purchases -0.10- real vacancy rate, per cent 3.6 Total portfolio 2016-01-01 1.79

Canada

3.6 %

10 km 10 km

Toronto82% of market value

Montreal18% of market value



England

Total property portfolio Average rent, GBP/sqft/monthResidential units 1,404 Total portfolio 2015-01-01 1.74Fair value, SEK million 4,840 Sales -0.08- SEK per sqm 67,660 Comparable portfolio 2015-01-01 1.66- required yield, per cent 4.22 Increase in comparable portfolio 0.19

Vacancy rate, residential, per cent 8.0 Comparable portfolio 2016-01-01 1.85- due to upgrades, per cent 65 Purchases 0.22- real vacancy rate, per cent 2.8 Total portfolio 2016-01-01 2.07

11.5 %

20 km

Properties with red dots were sold in January 2016.

London



France

Total property portfolio Average rent, EUR/sqm/monthResidential units 467 Total portfolio 2015-01-01 14.43Fair value, SEK million 995 Sales -- SEK per sqm 62,640 Comparable portfolio 2015-01-01 14.43- required yield, per cent 4.21 Increase in comparable portfolio 6.82

Vacancy rate, residential, per cent 35.3 Comparable portfolio 2016-01-01 21.24- due to upgrades, per cent 96 Purchases 1.26- real vacancy rate, per cent 1.3 Total portfolio 2016-01-01 22.50

47.3 %

10 km

Paris



United States

Total property portfolio Average rent, USD/sqft/monthResidential units 1,534 Total portfolio 2015-01-01 -Fair value, SEK million 5,451 Sales -- SEK per sqm 48,769 Comparable portfolio 2015-01-01 -- required yield, per cent 4.47 Increase in comparable portfolio -

Vacancy rate, residential, per cent 9.8 Comparable portfolio 2016-01-01 -- due to upgrades, per cent 72 Purchases 2.26- real vacancy rate, per cent 2.8 Total portfolio 2016-01-01 2.26

10 km

New York62% of market value

10 km

10 km

Boston1

Washington D.C.2

1) 29% of market value2) 9% of market value




Total property return January-December 2015

SEK million Growth Jan-DecFair value, 2015-01-01 57,736Revaluations 8,026 13.9 %Investments 2,216 3.8 %Purchases 12,093 20.9 %Sales -5,755 -Translation difference -1,551 -Fair value, 2015-12-31 72,764 26.0 %Operating surplus 2,175 3.8 %

SEK million p.a.Total property return 10,201 17.7 %

Annual property return Per cent

2009Jan–Dec

18

16

14

12

10

8

6

4

2

02010

Jan–Dec2011

Jan–Dec2012

Jan–Dec2013

Jan–Dec2014

Jan–Dec2015

Jan–Dec

Income return Value growth Average


Interim report January to December 2015

Result January-December 2015Operating surplus SEK 2,175 million Rental income for the year increased by SEK 737 million to SEK 4,339 million (3,602). Of the total increase in rental income, SEK 612 million is due to the purchase of new properties and SEK 125 million is due to increased rental income for compa-rable properties. Rental income for comparable properties, adjustedforchangesinexchangerates,increasedby4.3percent compared to 2014.

The real vacancy rate was 1.3 per cent, which is 0.3 percentage points higher than at the end of 2014. The vacancy rate was 4.3 per cent, of which 70 per cent was due to apartment upgrades and planned apartment sales.

PropertyexpensesamountedtoSEK2,164million(1,720),ofwhich SEK 408 million (314) relates to maintenance, equal to anaverageannualexpenseofSEK116persquaremeter.

The operating surplus adjusted for currency differenses for comparable properties increased by 4.0 per cent. For the total portfolio, the operating surplus margin was 50.1 per cent (52.2).

Increase in value of properties 13.9 per cent The increase in value of the properties was SEK 8,026 million (1,412), equivalent to 13.9 per cent (3.2). The increase in value is mainly due to a lower required yield. For comparable properties the required yield has decreased by 0.36 percentage points.

NetfinancialitemsSEK-771millionInterestexpensesfortheyearwereSEK1,277million(1,191).The average interest rate was 3.44 per cent, 0.50 percentage pointslowerthanattheendof2014.Derivativefinancialin-struments increased in value by SEK 533 million (-1,149) during theyear,mainlyduetoashorterduration.Otherfinancialitems amounted to SEK -26 million (-32).

NetprofitbeforetaxSEK9,206millionNetprofitbeforetaxwasSEK9,206million(852).

TaxexpensesSEK-2,035millionTaxexpensesfortheyearamountedtoSEK2,035million(350),ofwhichSEK2,001millionmainlyrelatestodeferredtaxfromunrealized gains on properties. SEK 34 million is reported as currenttax,mainlyonsaleofproperties.AkeliusResidentialPropertyGrouphasnoongoingtaxdisputes.

Rental income, comparable propertiesSEK million

Operating surplus, comparable propertiesSEK million

Real vacancy ratePercentage

Jan-Dec 2014

Jan-Dec 2015

4.3%2,909

3,034

Jan-Dec 2014

Jan-Dec 2015

4.0%1,684

1,752

1 Jan 2015 1 Jan 2016

0.31.0 1.3



SalesSEK millionRequired yield Per cent

Opening, 2015-01-01 4.72Purchases -0.02Sales -0.01Comparable -0.36Exchangeratedifferences 0.00Closing, 2015-12-31 4.33

Property portfolio changesProperty purchases SEK 12,093 million 45 per cent of purchases were made in the United States, 14 per cent in Germany, 14 per cent in England, 11 per cent in Canada, 9 per cent in Sweden and 7 per cent in France. The average required yield was 4.38 per cent. Property investments SEK 2,216 millionInvestments in properties totalled SEK 2,216 million (1,881), equivalent to an annual investment of SEK 628 per square meter. 42 per cent of investments refers to apartment upgrades. Property sales SEK 5,755 million We sold properties in Sweden for SEK 2,718 million, in Germany for SEK 1,559 million, in England for SEK 1,367 million and in Canada for SEK 111 million. Selling prices were 23 per cent higher than the fair value at the beginning of the year. In total 2,752 apartments, with aprofitofSEK800million,includingSEK121millioninsellingexpenses.

Well-kept residential properties are attractive in-vestments for many types of investors, thus helping residential properties provide good liquidity. This year, we have sold properties to individuals, to small local businesses and large investors.

Property market value SEK 72,764 million The market value was SEK 72,764 million (57,736), which is equivalent to an average of SEK 20,284 per square meter. The average required yield for the entire port-folio was 4.33 per cent, which is 0.39 percentage points lower than at the beginning of the period.

PurchasesSEK million

Berlin

New York

Stockholm

London

Toronto

Montreal

Paris

Others

Purchase Fair value Sale price price plus beginning investments of the year

3,822

4,682

5,755

23%

3,362

1,689

1,597

1,392

924

884

484

850

22%

Purchases

5.5

SEK 000s/sqm

Required yield

Sweden

Germany

Canada

England

FranceUnited States

908070605040302010

%SEK 000s

Washington

Boston

359

552

5.0

4.5

4.0

3.5



FinancingEquity to assets ratio 41 per cent During the year, equity increased by SEK 8,084 million to SEK 30,667 million. The equity to assets ratio increased from 38 to 41 per cent. Loan-to-value 48 per cent Interest-bearing debt increased during the year by SEK 5,619 million to SEK 35,955 million. The loan-to-value ratio de-creased from 52 to 48 per cent.

Secured loans decreased by SEK 540 million to SEK 27,126 million. The secured loan-to-value decreased from 47 to 36 per cent. The ambition is for the loan-to-value for secured loans to be 25 percent at end of 2018. The secured loans have beenborrowedfrom35banksinsixcountries.

Unsecured loans encompass three listed bond loans, com-mercial papers and loans from related companies. These increased during the year by SEK 6,159 million to SEK 8,829 million. The nominal value of unsecured bonds and commer-cial papers has increased by SEK 5,846 million to SEK 7,196 million, fully in line with the ambition to increase our presence in the capital market. Pledged assets amounted to SEK 34,921 million and consist mostly of real estate mortgages. Capital tied up 5.7 years Interest-bearing debt was tied up for an average of 5.7 years, compared to 4.5 at the end of 2014. The loans that mature withinoneyearamounttoSEK3,847million.Therefinancingriskismitigatedbystrongliquidity,highlydiversifiedfundingand a low loan-to-value. Interest rate hedge 4.3 years SEK11,883millionhadafixedinterestratetermofmorethanfiveyearsandSEK9,257millionhadafixedinterestratetermof less than one year. The average interest rate of 3.44 per cent is 0.50 percentage points lower than at the end of 2014. The average interest rate hedge was 4.3 years, as compared to 4.2 years at the end of 2014. Liquidity SEK 7,704 million Available funds in the form of cash and unutilized credit facilities totalled SEK 7,704 million. The unborrowed share of the properties’ fair value corresponded to SEK 45,637 million.

Loan-to-valueper cent

Average interest rateper cent

Interest coverage ratio times

Dec Dec Dec Dec Dec 2011 2012 2013 2014 2015

5.26

4.85 4.75

3.94

3.44

Jan-Dec 2015 Pro forma 12 monthsSee page 21 for more information

Realized value growth

3.0

1.9

EBITDA

2014 2015

5248

Loan-to-value secured

Loan-to-value unsecured

12%

36%



Other financial informationCashflowfortheyearCashflowbeforechangesinworkingcapitalincrea-sed by 29 per cent to SEK 855 million (661). Ope-ratingactivitiesgeneratedacashflowofSEK974million (702). Net cash from investing activities was SEK-8,182million(-10,657).Cashflowrequiredforacquisitions of properties is secured before signing acquisitionagreements.Profitableandnon-man-datory upgrades can, if needed, be stopped within athree-monthperiod.Cashflowfromfinancingactivities was SEK 7,166 million (10,174).

Preference sharesIn April 2015, Akelius carried out an issue of 6,060,606 new preference shares at a price of SEK 330 per preference share, which provided the company with SEK 2,000 million before transac-tion costs.

The total number of preference shares at the end of the period amounted to 18,835,606, equiva-lent to SEK 6,020 milion reported in equity.Preference shares represent 0.65 per cent of the total number of shares in Akelius Residential Property AB. At 31 December 2015, the price paid per preference share was SEK 291.5.

During 2015 Akelius paid dividends to the owners of preference shares of SEK 346 million. An additional dividend of SEK 5 per preference share was paid on February 5, 2016, for a total of SEK 94 million.

Akelius ratingIn June 2015, Standard & Poor’s Rating Services rated Akelius as BBB- with a stable outlook. Listed bonds are rated as BB+.

Parent companyTheparentcompany’snetfinancialincomeforthe year amounted to SEK 127 million (-448), whileprofitbeforetaxtotalledSEK1,127million(-624), which is attributable to positive changes inthefairvalueofderivativefinancialinstru-ments of SEK 291 million (-440) and dividends received for SEK 943 million.

Fourth quarterNet income for the quarter amounted to SEK 3,374 million (-271) and has been impacted by changeinthefairvalueofderivativefinancialinstruments of SEK 275 million (-338) and of properties of SEK 4,093 million (231).

During the fourth quarter, rental income increa-sed to SEK 1,145 million (983) and property costs increased to SEK 650 million (559), which resulted in an improvement in the operating surplus to SEK494million(424).NetfinancialitemstotalledSEK -70 million (-667), including change in the fair value of derivatives. CashflowforthefourthquarteramountedtoSEK-163million(157).Cashflowgeneratedfromoperations was SEK 682 million (196). Net cash flowfrominvestingactivitiesamountedtoSEK-1,624million(-4,642),whichisessentiallyex-plained by the acquisition of investment proper-ties for SEK -3,239 million (-4,009) and the sale of properties for SEK 2,523 million (27). Financing activitieshadapositiveeffectoncashflowofSEK779 million (4,603).

Assets held for saleAkelius has signed an agreement for the sale of real estate in Östersund, Umeå and Haparanda for SEK 1,878 million, a total of 1,693 apartments and 133 commercial premises. An agreement was signed to sell four properties with a total of 121 apartments and a value of SEK 207 million outside London, England. Agreements have also been signed in Germany for the sale of properties in Kiel with a value of SEK 431 million, in Rostock with a value of 219 million, and apartments in Hamburg with a value of SEK 65 million. Fair value measurement is based on the purchase price stated in the signed purchase agreement between buyers and sellers when agreements have been signed. The purchase price is conside-red to belong to Level 1 of the fair value hierarchy IFRS 13.



Whennosignedagreementexists,thefairvalueis determined in the same way as for invest-ment properties. As of December 31, 2015, the disposal group consisted of assets of SEK 2,802 million minus liabilities amounting to SEK 158 million,consistingofadeferredtaxliabilityofSEK 122 million and other liabilities of SEK 36 million.

Basis of presentationStatement of complianceThe Akelius Residential Property Group’s Interim report has been prepared in accordance with IAS 34, Interim Financial Reporting.

ThefinancialstatementsoftheparentcompanyAkelius Residential Property AB, corporate identity number 556156-0383, have been prepared in accordance with the Swedish Annual Accounts Act and the accounting standard RFR 2, Accounting for Legal Entities. The accounting policies adopted in the preparation of the interim report are consistent with those followed inthepreparationoftheGroup’sannualfinancialstatements for the year 2014.

Thefiguresinthisinterimreporthavebeenrounded up or down, while the calculations have been made without rounding up or down. Asaresult,thefiguresincertaintablesandkeyfiguresmayappearnottoaddupcorrectly.

Estimates and assessmentsEstimates and assessments are evaluated continuously based on empirical factors and other aspects, including anticipation of future events that are reasonable under the prevailing circumstances. The same principles are followed in the interim reporting as in the previous annual report.

Derivative instrumentsDerivative instruments consist mainly of interest rate swaps. Estimates of the fair value of de-rivatives are based on Level 2 of the fair value hierarchy.

Compared to 2014, no transfers have occurred between the different levels of the hierarchy, and nosignificantchangeshavebeenmaderegar-ding the valuation method.

Cashflowinthederivativecontractsiscomparedtothecashflowthatwouldhavebeenreceivedif the contracts have been concluded at market prices on the closing date. The difference in thecashflowsisdiscountedusinganinterestrate that takes into account the credit risk. The present value obtained is reported in the balance sheet at fair value. Changes in fair value are recognized in the income statement without the application of hedge accounting.

Valuation of propertiesThe fair value of all properties was assessed by internal valuations on the closing date. The valu-ationsarebasedonacashflowmodelforeachindividual property, with separate assessments of future earning ability and required rates of return.Thecashflowmodelisbasedonactualincomeandexpensesadjustedforanormalizedfuturecashflow.

Risks and uncertaintiesThe operational risks are limited through con-centration of the property portfolio to residential properties in metropolitan areas. Strong residen-tial rental markets in Sweden, Germany, Canada, England, France and the United States reduce the risk for long-term vacancies.

In order to further reduce the risk, or variations in cashflow,interestratesaresecuredonalong-term basis. Access to capital from a large number of banks, through the capital market and from privateindividuals,mitigatestherefinancingrisk.Overseas investments are hedged to reduce the impact of currency movements on the Groups equity to assets ratio. No material changes in the company’s assessment of risks have occurred since the publication of the 2014 annual report.

Other financial information



New accounting principlesThe following standards, amendments to stand-ards and interpretations have been issued but are not yet effective for annual periods begin-ning on and after 1 January 2015. Those which may be relevant to the Group are set out below. The Group does not plan to early adopt these standards. IFRS 9 – Financial Instruments. IFRS 9 introduces newrequirementsfortheclassificationandmeasurementoffinancialassets.UnderIFRS9,fi-nancialassetsareclassifiedandmeasuredbasedon the business model in which they are held and thecharacteristicsoftheircontractualcashflows.IFRS 9 introduces additional changes relating tofinancialliabilities.TheIASBcurrentlyhasanactive project to make limited amendments to theclassificationandmeasurementrequire-ments of IFRS 9 and to add new requirements toaddresstheimpairmentoffinancialassetsand hedge accounting. IFRS 9 is effective for annual reporting periods beginning on or after 2018-01-01, with early adoption permitted. IFRS 15 – Revenue from Contracts with Cus-tomers. IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognized. It replaces existingrevenuerecognitionguidance,includingIAS 18 Revenue, IAS 11 Construction Contracts and IFRIC 13 Customer Loyalty Programs. IFRS 15 is effective for annual reporting periods begin-ning on or after 2018-01-01, with early adoption permitted. At this time, the impact of the above publications isnotexpectedtobematerialtotheGroup.

OtherThe Annual Report will be available on Akelius website on 2016-03-18. The Annual General Meeting will be held on 2016-04-15 in Stock-holm. Announcement will be posted on the company’s website. As the Board has yet to decideonproposalforallocationofprofit,thisinformation will be presented in the notice convening the Annual General Meeting.

PersonnelAt the end of the period, 558 (454) people were employed in the Group.

Related party transactionsDuring the year, Akelius purchased architectural servicesfromaffiliatesoftheboardmemberIgor Rogulj amounting to SEK 2 million. Akelius Residential Property AB sold the subsidiary Akelius Spar AB to the majority shareholder Akelius Apartments Ltd for SEK 116 million. Loans from related parties have decreased by SEK 1,239 million. In addition to these transac-tions, transactions occurred with companies in Akelius Foundation Group. The scope and focus oftheseoperationshasnotchangedsignifi-cantly during the year. All transactions were executedonmarketterms.

Events after balance sheet dateWe have acquired properties with 258 apart-ments in Boston and 415 apartments in Montreal. We have sold properties in northern Sweden for SEK 1,878 million and 121 apart-ments in London for GBP 16.7 million.

Stockholm, Sweden, 2016-02-08, Akelius Residential Property AB (publ)

Pål Ahlsén,CEO, Managing Director

Theinterimreporthasnotbeenexaminedbythe company’s auditors.

Other financial information



Consolidated statement of comprehensive incomeConsolidated statement of comprehensive income

SEK million

2015Oct-Dec

3 months

2014Oct-Dec

3 months

2015Jan-Dec

12 months

2014Jan-Dec

12 months

Rental income 1,145 983 4,339 3,602Operatingexpenses -534 -421 -1,756 -1,406Maintenance -117 -138 -408 -314Operating surplus 494 424 2,175 1,882

Central administration -46 -28 -112 -54Otherincomeandexpenses -1 2 9 5Net income from the disposal of investment properties* 543 -2 800 100Net income from the revaluation of investment properties 3,510 231 7,105 1,293Operating profit 4,500 626 9,977 3,226

Interest income 2 2 4 7Interestexpenses -356 -310 -1,277 -1,191Otherfinancialincomeandexpenses 8 -19 -31 -39Changeinfairvalueofderivativefinancial instruments 275 - 338 533 -1,149Profit before tax 4,429 -40 9,206 852

Tax -1,055 -232 -2,035 -350Profit for the period / year 3,374 -271 7,171 503

Itemsthatwillbereclassifiedtoprofitorloss:Translation difference -457 538 -610 745Comprehensive income for the period / year 2,917 267 6,561 1,248

Profitattributableto: - owners of the parent company 3,338 -238 7,055 503 - no-controlling interests 36 -32 116 -

Totalcomprehensiveincomeattributableto: - owners of the parent company 2,926 296 6,443 1,245 - no-controlling interests -9 -28 118 3

Earnings per share before and after dilution, SEK 1.12 -0.11 2.33 0.15 *) SEK 121 million refer to transaction cost for 2015 and SEK 21 million for 2014.



Consolidated statement of financial position

SEK million2015

31 Dec2014

31 Dec

AssetsIntangible assets 27 14Investment property 69,963 57,736Tangiblefixedassets 32 21Derivativefinancialinstruments 25 -Deferredtax 8 9Financialfixedassets 109 119Total non-current assets 70,164 57,899

Trade and other receivables 808 612Derivativefinancialinstruments 12 -Cash and cash equivalents 238 278Assets held for sale* 2,802 -Total current assets 3,860 890

Total assets 74,024 58,789

Equity and liabilitiesTotal equity 30,667 22,583

Interest-bearing liabilities 32,108 26,519Derivativefinancialinstruments 1,983 2,466Deferredtax 4,175 2,384Other liabilities 49 33Total non-current liabilities 38,315 31,402

Interest-bearing liabilities 3,847 3,816Derivativefinancialinstruments 2 53Trade and other payables 1,035 935Liabilities held for sale 158 -Total current liabilities 5,042 4,804

Total equity and liabilities 74,024 58,789

Borrowings - unsecured 8,829 2,670 - secured 27,126 27,666Total 35,955 30,336

*) SEK 2,801 million was attributable to investment properties including SEK 1,878 million for the sale of apartments in Norrland, Sweden.



Consolidated statement of financial position Consolidated statement of cash flows

SEK million

2015Oct-Dec

3 months

2014Oct-Dec

3 months

2015Jan-Dec

12 months

2014Jan-Dec

12 months

Operating surplus 494 425 2,175 1,882Central administration -53 -28 -112 -54Otherincomeandexpenses -1 -17 - -14Reversal of depreciation and impairment losses 10 24 10 24Interest paid -271 -364 -1,213 -1,173Incometaxpaid 2 -1 -5 -4Cash flow before changes in working capital 181 39 855 661

Change in current assets 181 -134 76 -143Change in current liabilities 320 291 43 184Cash flow from operating activities 682 196 974 702

Investmentsinintangiblefixedassets -8 -11 -17 -14Investment in properties -752 -630 -2,216 -1,881Acquisition of investment properties -3,239 -4,009 -12,093 -9,678Acquisition of net assets -43 - 792 -Proceeds from sales of investment properties 2,523 27 5,755 1,064Proceeds from sale of net assets - - -10 -Purchaseandsaleofotherfixedassets -105 -19 -393 -148Cash flow from investing activities -1,624 -4,642 -8,182 -10,657

New share issue - 2,975 1,974 8,960Shareholder contribution -1 - 22 1,377Loans raised 2,987 5,047 19,026 10,087Repayment of loans -1,967 -264 -13,385 -6,043Purchase and sale of derivative instruments -47 -36 -26 -71Dividend -193 -3,119 -445 -4,136

Cash flow from investing activities 779 4,603 7,166 10,174

Cash flow for the period / year -163 157 -42 219

Cash and cash equivalents at beginning of year 401 121 278 59Translation difference in cash and cash equivalents - - 2 -Cash and cash equivalents at end of year 238 278 238 278



Consolidated statement of changes in equity

SEK millionShare

capitalShare

premium

Currency translation

reserveRetained earnings Total

Non- controlling

interestsTotal

equity

Balance at 2014-01-01 1,263 1,937 42 11,896 15,138 31 15,169Acquired minority - - - - - 41 41Redistribution - - - -7 -7 7 -Hybrid loan - - - - - 1,365 1,365Dividend - -1,937 - -2,211 -4,148 -52 -4,200Share issue 475 8,548 - -63 8,960 - 8,960

Profitfortheyear - - - 503 503 - 503Other comprehensive income - - 741 - 741 4 745

Balance at 2014-12-31 1,737 8,548 782 10,120 21,187 1,396 22,583Acquired minority - - - - - 22 22Redistribution - - - -52 -52 52 -Dividend - - - -377 -377 -98 -475Share issue 4 1,971 - - 1,975 -1 1,974Group contribution - - - 3 3 - 3Taxongroupcontri-bution - - - -1 -1 - -1Profitfortheyear - - - 7,055 7,055 116 7,171Other comprehensive income - - -612 - -612 2 -610

Balance at 2015-12-31 1,741 10,519 170 16,748 29,178 1,489 30,667

Attributable to owners of the parent company



SEK million Jan-Dec 2015

Pro forma, 12 months revenue and cost at balance sheet date

Rental income 4,339 4,635Operatingexpenses -1,756 -1,784Maintenance -408 -346Operating surplus 2,175 2,505Centraladministrationexcludingdepreciation -102 -102EBITDA 2,073 2,402Netinterestexpense -1,273 -1,255Otherfinancialincomeandexpenses -30 -30Profit before tax and revaluation 770 1,117Realized value growth 1,812 -

Interest coverage ratio 3.0 1.9Interest coverage ratio excluding realized value growth

1.6

1.9

Net debt as per 2015-12-31 35,718 35,718Net debt/EBITDA 17.2 14.9 Net debt/EBITDA including realized value growth 9.2 14.9

Realized value growth Akelius manages and develops residential pro-perties with the ability to generate a stable and growing operating surplus. A higher operating surplus leads to positive value development for our properties. A part of the business model is torealizevaluegrowth,whichisdefinedassales revenue, less acquisition value and investments. Profitbeforetaxandrevaluationincludingrealized value growth is a good indicator of the abilitytogeneratecashflow.

Pro formaOperating surplus and value growth are reinve-sted in current and new properties. This leads to a growing operating surplus. It is therefore more appropriate to analyze the business based on the situation on the balance sheet date.

The pro forma is based on the property portfolio’s gross rent, real vacancy, estimated operatingexpensesandmaintenancecostsduring a normal year, as well as central admi-nistrationexpenses.Theinterestexpensesibased on net debt on the balance date calculated according to the average rate. Notaxhasbeencalculatedasitrelateslargelytodeferredtax,whichdoesnotaffectcashflow.

The pro forma is not a forecast for the coming twelve months as it contains no estimate of rental,vacancy,currencyexchange,futureproperty purchases and sales or interest rate changes.

Additional information on the financial key figures



Segment information

January-December 2014, SEK million Sweden Germany Other TotalRental income 2,101 1,249 251 3,602Operatingexpenses -842 -438 -126 -1,406Maintenance -196 -101 -16 -314Operating surplus 1,063 710 109 1,882Revaluation of investment properties 838 391 183 1,412Total property return 1,901 1,101 292 3,294Total property return, per cent 7.1 7.1 16.6 7.5Property fair value 29,571 21,171 6,694 57,736

January-December 2015, SEK million Sweden Germany Other TotalRental income 2,216 1,531 591 4,339Operatingexpenses -843 -600 -312 -1,756Maintenance -262 -84 -62 -408Operating surplus 1,111 847 217 2,175Revaluation of investment properties 2,947 3,732 1,346 8,026Total property return 4,058 4,579 1,563 10,201Total property return, per cent 13.7 21.6 22.4 17.7Property fair value 31,727 24,892 16,145 72,764

Interest-bearing liabilities

DurationYears

Interest rate hedge

Amount in SEK million

Interest rate hedge

Average interest rate, per cent

Share, per cent

Capital tied up Amount in

SEK millionShare,

per cent0-1 9,257 1.64 26 3,847 101-2 2,559 3.58 7 5,104 142-3 2,631 3.77 7 4,565 133-4 3,388 5.00 9 3,348 94-5 6,237 3.72 17 7,640 215-6 3,790 5.19 11 2,436 76-7 2,549 3.81 7 883 27-8 145 3.08 - 355 18-9 1,183 4.11 3 68 -9-10 2,257 2.56 6 1,785 5> 10 1,960 4.46 5 5,926 17Total 35,955 3.44 100 35,955 100



Statement of comprehensive income for the parent company

SEK million

2015Oct-Dec

3 months

2014Oct-Dec

3 months

2015Jan-Dec

12 months

2014Jan-Dec

12 months

Rental income - - - -Operating costs - - - -Maintenance - - - -

Operating surplus - - - -Depreciation,writedownandreversalsoffixedassets - - - -Gross profit - - -Administrationexpenses 14 -13 -38 -55Other income - 6 - 16Profitsfromsalesofproperties - - - -Operating profit 14 -7 -38 -38Profitfromsharesinsubsidiaries 433 - 943 -Finance income 228 333 868 1,093Financeexpences -313 -126 -1,032 -1,101Change in fair value of derivatives 186 -159 291 -440

Profit before appropriations 548 41 1,032 -486Appropriations 95 -138 95 -138

Profit before tax 643 -97 1,127 -624Tax -20 74 -45 137Profit of the period / year 623 -23 1,082 -487Comprehensive income 623 -23 1,082 -487



Statement of financial position for the parent company

SEK million2015

31 Dec2014

31 Dec

AssetsIntangible assets 1 5Total intangible fixed assets 1 5

Shares in subsidiaries 13,164 13,270Receivables from group companies 9,231 1,055Deferredincometaxassets 331 377Total financial fixed assets 22,726 14,702Total non-current assets 22,727 14,707 Receivables from group companies 20,182 7,911Derivativefinancialinstruments 12 -Other current receivables 1 7Prepaidexpensesandaccruedincome 192 58Cash and cash equivalents 74 155Total current assets 20,461 8,131Total assets 43,188 22,838

Equity and liabilities

Total equity 14,114 11,410

Interest-bearing liabilities 9,112 3,108Interest-bearing liabilities, group companies 17,379 2,510Derivativefinancialinstruments 474 671Total non-current liabilities 26,965 6,289

Interest-bearing liabilities 1,855 918Interest-bearing liabilities, group companies 74 3,984Accounts payable 2 2Other current liabilities 105 139Accruedexpensesandprepaidincome 73 96Total current liabilities 2,109 5,139Total equity and liabilities 43,188 22,838



Key figures

201531 Dec

201431 Dec

201331 Dec

201231 Dec

201131 Dec

EquityEquity, SEK million 30,667 22,583 15,169 9,970 8,567Equity to assets ratio, per cent 41 38 33 27 26Net asset value to assets ratio, per cent 50 42 39 32 31Return on equity, per cent 29 9 24 27 4

Interest-bearing liabilitiesLoan-to-value, secured loans, per cent 36 47 49 53 50Loan-to-value, per cent 48 52 56 59 60Interest coverage ratio including realized value growth 3.0 1.7 1.5 1.3 1.5Interestcoverageratioexcludingrealizedvaluegrowth 1.6 1.5 1.2 1.2 1.3Capital tied up, year 5.7 4.5 4.6 5.0 5.7

Fixed interest ratesAverage interest rate, per cent 3.44 3.94 4.75 4.85 5.26Fixedinterestterm,year 4.3 4.2 5.0 5.4 5.6

PropertiesNumber of apartments 51,231 47,896 41,319 35,443 35,151Rentable area, thousand sqm 3,587 3,472 2,992 2,576 2,632Growth in rental income1, per cent 4.3 3.4 5.8 4.4 3.8Growth in operating surplus1, per cent 4.0 7.1 6.7 4.1 8.3Real vacancy rate residential, per cent 1.3 1.0 0.7 0.7 0.7Vacancy rate residential, per cent 4.3 3.2 2.6 2.0 1.9

Fair value of properties, SEK millionOpening balance 57,736 44,104 35,437 32,352 28,269Change in fair value 8,026 1,412 1,569 2,671 1,025Investments 2,216 1,881 1,531 1,493 1,138Purchases 12,093 9,678 6,901 1,663 3,792Sales -5,755 -1,084 -1,801 -2,383 -1,828Reclassification - - 13 - -Exchangedifferences -1,551 1 745 454 -359 -44Closing balance 72,764 57,736 44,104 35,437 32,352

Fair value, per sqm 20,284 16,629 14,736 13,755 12,292Required yield, per cent 4.33 4.72 4.75 4.73 5.07Change in required yield1, per cent -0.36 0.01 -0.01 -0.28 0.01



Key figures

201531 Dec

201431 Dec

201331 Dec

201231 Dec

201131 Dec

Properties SwedenAverage residential rent, SEK /sqm/year 1,184 1,156 1,114 1,074 1,026Growth in average residential rent2, per cent 2.6 3.7 5.8 5.0 5.1Growth in rental income3, per cent 3.0 3.5 5.5 3.8 -Growth in operating surplus3, per cent 1.8 8.0 3.3 5.2 -Fair value, SEK million 31,727 29,571 26,797 23,456 22,574Fair value, SEK per sqm 17,148 14,899 14,115 13,809 12,055Required yield, per cent 4.30 4.78 4.84 4.79 5.15Number of apartments 23,520 24,407 23,867 21,707 23,354

Properties GermanyAverage residential rent, EUR /sqm/month 8.13 7.77 7.71 7.52 7.19Growth in average residential rent2, per cent 5.1 5.4 5.6 5.6 7.0Growth in rental income3, per cent 6.0 3.1 6.8 6.8 -Growth in operating surplus3, per cent 3.9 5.8 13.7 1.0 -Fair value, SEK million 24,892 21,171 15,549 11,981 9,778Fair value, SEK per sqm 18,986 16,752 15,398 13,649 12,903Required yield, per cent 4.35 4.72 4.64 4.64 4.87Number of apartments 20,307 19,423 15,769 13,736 11,797

Properties Canada4

Average residential rent, CAD /sqft/month 1.79 1.83 1.94 2.01 1.34Growth in average residential rent2, per cent 3.6 6.6 7.7 11.2 -Growth in rental income3, per cent 4.1 7.0 20.6 - -Growth in operating surplus3, per cent 25.1 -17.8 56.4 - -Fair value, SEK million 4,859 3,432 1,758 1,074 26Fair value, SEK per sqm 21,424 21,808 20,710 22,026 19,833Required yield, per cent 4.37 4.55 4.47 4.52 4.25Number of apartments 3,999 2,823 1,683 1,046 17

Properties England5

Average residential rent, GBP /sqft/month 2.07 1.74 1.55 1.54 1.04Growth in average residential rent2, per cent 11.5 11.3 0.1 13.7 -Growth in rental income3, per cent 15.1 5.9 29.0 - -Growth in operating surplus3, per cent 23.0 9.3 31.7 - -Fair value, SEK million 4,840 3,395 1,792 1,580 145Fair value, SEK per sqm 67,660 53,606 36,430 32,730 22,872Required yield, per cent 4.22 4.36 4.64 4.53 4.77Number of apartments 1,404 1,153 870 870 97



Key figures

201531 Dec

201431 Dec

201331 Dec

201231 Dec

201131 Dec

Properties FranceAverage residential rent, EUR /sqm/month 22.50 21.31 - - -Growth in average residential rent2, per cent 47.3 - - - -Growth in rental income3, per cent - - - - -Growth in operating surplus3, per cent - - - - -Fair value, SEK million 995 166 - - -Fair value, SEK per sqm 62,640 60,732 - - -Required yield, per cent 4.21 4.11 - - -Number of apartments 467 90 - - -

Properties United StatesAverage residential rent, USD /sqft/month 2.26 - - - -Growth in average residential rent2, per cent - - - - -Growth in rental income3, per cent - - - - -Growth in operating surplus3, per cent - - - - -Fair value, SEK million 5,451 - - - -Fair value, SEK per sqm 48,769 - - - -Required yield, per cent 4.47 - - - -Number of apartments 1,534 - - - -

1) For comparable properties. The property portfolio in England was bought from fellow subsidiaries in March 2014. The table for 31 December 2015 shows the development as if the properties had been owned since 1 January 2014.

2) Growth from period start to period end for comparable portfolio.3) Growth for the period compared to the previous year s period for comparable portfolio.4) The property portfolio in Toronto, Canada, was bought from a fellow subsidiary at the end of 2013.

The tables above show the development as if the properties had been owned since 2011.5) The property portfolio in England was bought from fellow subsidiaries in March 2014. The tables

above show the development as if the properties had been owned since 2011.



Definitions

Equity to assets ratio

Interest coverage ratio

Loan-to-value

Net assets

Net asset value

Net asset value to assets ratio

Net debts

Operating surplus margin

Property portfolio

Realized value growth

Real vacancy rate

Return on equity

Vacancy rate

Equity in relation to total assets.

Operating surplus plus central administration expenses,realizedvaluegrowth,otherfinancialincomeandexpenseswithaddbackofdepreciationand impairment charges in relation to net interest.

Net assets divided by net debts.

Total assets minus cash, pledged cash and liquid assets.

Equity,deferredtaxandderivatives.

Net asset value in relation to net assets.

Interest bearing debts minus cash, pledged cash and liquid assets.

Operating surplus in relation to rental income.

Investmentpropertyandinvestmentpropertyclassifiedas assets held for sale.

Proceeds from the sale of investment properties minus acquisition costs, accumulated investments and cost of sale.

The total number of vacant apartments less the number of apartments vacant due to renovation work or planned sales, in relation to the total number of apartments.Realvacancyismeasuredonthefirstdayafter the month end.

Comprehensive income divided by opening equity.

The number of vacant apartments in relation to the total number of apartments. Vacancy is measured on thefirstdayafterthemonthend.



Akelius in briefHeadofficeSvärdvägen 3ABox104, S-18212 DanderydTel +46 (0) 8 566 130 00

SwedenRosenlundsgatan 50Box38149100 64 StockholmTel +46 (0)10-722 31 00akelius.se

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

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

EnglandCoin House2 Gees CourtLondon W1U 1JATel +44 (0) 2 078 719 695akelius.co.uk

Frankrike67 Boulevard Haussmann75008 ParisTel +33 1 40 06 85 00akelius.fr United States101 Federal StreetSuite 1900Boston, MA 02110+1 917 972 0404akelius.us

Apartments for metropolitans80 per cent of the portfolio is situated in Berlin, Hamburg, London, Toronto, Montreal, New York, Boston, Stockholm, Gothenburg and Malmö.

Better livingOur mission is to provide our current and future tenants with a better living, by continuously upgrad-ing our buildings and our service.

Acquire via cherry pickingAkeliuspreferstomakesmalleracquisitionsofexactlythe right properties - to cherry pick - rather than a smaller number of larger acquisitions of not quite the right properties.

Strong capital structure, lowrefinancingriskAkeliushasagreementswiththirty-fivebanks,listedpreference shares and listed senior unsecured bonds. Akelius is Sweden’s largest listed property company. Wehavesixteenthousandshareholders.

First-class personnelMore than one hundred and forty employees have graduated in Residential Real Estate Management from Akelius University.

Annual report 2015 2016-03-18Interim report Jan-Mar 2016 2016-04-26Interim report Jan-June 2016 2016-08-08Interim report Jan-Sep 2016 2016-10-24

Financial calendar

year end report, january to december 2015 › main › 3302 › 2888680 › 1095533.pdf · year end...

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