Active property development requires investments

Transcription

1 Active property development requires investments Long-term and sustainable growth implies constant improvement and development of the real estate portfolio through new construction, reconstructions and extensions as well as acquisitions. Investments will meet customer requirements for suitable premises and workplaces as well as society s need for urban environments that ensure growth over time. New development projects are added on an ongoing basis through the acquisition of properties with development potential and unutilized building rights CASTELLUM ÅRSREDOVISNING ANNUAL REPORT DIRECTORS REPORT Waleed, Christian and Robert

2 Castellum one of the largest project developers in Sweden In order to achieve the overall growth objective of 10%, Castellum needs to invest. Investments in new construction, extensions and reconstruction in our real estate portfolio often provide higher yield than acquisitions. In the last 10 years, Castellum has invested SEK 52 billion, which means SEK 5.2 billion on average per year. During 2016 Castellum had high activity in the portfolio and investments totaled SEKm 31,491 (3,553), of which SEKm 29,372 (2,321) were acquisitions and SEKm 2,119 (1,232) awere new constructions, extensions and reconstructions. After sales of SEKm 6,754 (1,140) net investments amounted to SEKm 24,737 (2,413). During the first quarter Castellum acquired the remaining 50% of the shares in CORHEI Fastighets AB (former Ståhls) corresponding to a property value of SEKm 2,083. During the second quarter Castellum acquired Norrporten with un underlying property value of SEKm 26,415. During the last quarter 2015 agreements have also been concluded for the acquisition of one office property under construction, in Hagastaden, Stockholm for SEK 1.6 billion with change of possession scheduled to February The property will be accounted for when the change of possession has taken place due to the agreements which is conditional upon i.e. completion. Requirements for sustainable investments Castellum environmentally classifies all new constructions and larger reconstructions according to at least Miljöbyggnad level Silver. Castellum currently owns 89 of Sweden s 319 Green Building-certified buildings. The purpose of certification is to reduce the climate impact and the risks in the property portfolio, reduce costs as well as create attractive premises for the customers and their business. A total 24% of Castellum s real estate portfolio is environmentally certified according to Green Building, Miljöbyggnad or BREEAM. Further new construction is ongoing of additional 479 thousand sq.m. corresponding to 11%. Development of our growth regions For Castellum, as a long-term real estate owner and urban developer, it is important to contribute to sustainable development of the communities, wherein the Group operates. Collaboration also takes place in about 100 networks and business associations to develop all regions that host our operations. We also cooperate continuously with other parties to push development, share knowledge about new technologies and exchange experiences. Examples of networking partners include the EPRA Sustainability Committee, The Energy Agency s Beställargrupp för lokaler (BELOK), Sweden Green Building Council, energy companies, local sanitation companies and Universities. ERIKA OLSÉN CHIEF INVESTMENT OFFICER, CASTELLUM AB Today s growing cities are characterized by dynamic structures with mixed development, where we ll happily contribute to building a mixeduse city. Being a great corporate citizen in Sweden s major cities, Castellum has a responsibility to carry out urban development in a sustainable and long-term manner. We contribute as a long-term owner, with great willingness to invest in urban development in many different ways. One of the best examples of our involvement in urban development is Örebro, right by the central train station. Here, Castellum is currently developing approx. 15,000 square metres of sustainable office space, featuring a façade partially covered with solar panels. The project contributes sustainable offices to the city in a prime location with direct access to public transport. Investments and sales per year Investments and sales per region 2016 CASTELLUM ANNUAL REPORT 2016 DIRECTORS REPORT 25

3 Larger ongoing projects Olaus Petri 3:244 in Örebro LOCATION: At the Travel Centre in Örebro AREA: 14,526 sq.m. TIME PLAN: Completed Q2, 2019 INVESTMENT: SEKm 420 In 2016, construction began of Citypassagen, a new office property in Örebro, situated at the northern route to Örebro and directly adjacent to the Travel Centre. There is high demand for downtown office premises in fast-expanding Örebro, and this central, seven-storey building will increase the supply of modern and flexible office space. The investment, one of the largest new constructions in the history of Castellum, is estimated at SEKm 420, of which SEKm 45 relates to the value of the property lot owned by the Group. The building is expected to be completed during the second quarter of 2019 and is 48% leased. Lindholmen 30:5 in Gothenburg LOCATION: Lindholmen Science Park in Gothenburg AREA: 9,243 sq.m. TIME PLAN: Completed Q1, 2017 INVESTMENT: SEKm 265 CERTIFICATION: BREEAM level excellent In December 2014, Castellum acquired land on Lindholmspiren in Gothenburg. At this site, located in the middle of the international engineering cluster Lindholmen Science Park, Castellum started the construction of the Blenda high-quality office property (9,243 sq. m.) in May Blenda is constructed according to the BREEAM environmental certification system, with the ambition of reaching BREEAM s Excellent level. This investment is estimated at SEKm 265, including the SEKm 53 value of the ground plot owned by Castellum. The new building is expected to be completed during the first quarter of 2017 and occupancy rate is 96%. Balltorp 1:124 in Mölndal LOCATION: At Söderleden in Mölndal AREA: 18,000 sq.m. TIME PLAN: Completed Q4, 2017 INVESTMENT: SEKm 180 On the last major exploitable lot beside Söderleden in Mölndal, Castellum began construction of a fully leased new building project totalling 18,000 sq. m. The project helps strengthen the portfolio with a modern and sustainable logistics facility in an expanding part of Greater Gothenburg. The investment is estimated at SEKm 180, SEKm 38 of which is related to land acquisition. The facility is expected to be completed by the fourth quarter of The new building is fully leased. 26 CASTELLUM ANNUAL REPORT 2016 DIRECTORS REPORT

4 Varpen 11 in Huddinge LOCATION: Smista Area in Huddinge AREA: 7,060 sq.m. car retail TIME PLAN: Completed Q4, 2017 INVESTMENT: SEKm 162 Since the millennium shift, Castellum has developed the Smista area into one of Stockholm s primary clusters for car sales. In autumn 2016, yet another investment was initiated totalling SEKm 162, including the SEKm 14 value of the lot, owned by Castellum. The new building is expected to be completed during the last quarter of 2017 and is being constructed according to the Miljöbyggnad environmental certification system, with the ambition of reaching Silver level. The building is fully leased. Nordstaden 2:16 in Gothenburg LOCATION: Central Gothenburg AREA: 9,200 sq.m. TIME PLAN: Completed Q1, 2017 INVESTMENT: SEKm 135 In central Gothenburg, overlooking the Gothenburg Opera and the harbour, an office-and-retail reconstruction, totalling 9,200 sq. m. was initiated. The project promotes portfolio development in one of Gothenburg s prime office locations. It is close to public transit, and in a few years time the area will be further refined with a new West Link train station. The investment is estimated at SEKm 135 and the reconstruction is expected to be completed during the first quarter of The new building is being constructed according to the Miljöbyggnad environmental certification system, with the ambition of reaching Silver level. Werket arkitekter Söderhällby 1:2 (part of) in Uppsala LOCATION: Östra Fyrislund in Uppsala AREA: 5,963 sq.m. TIME PLAN: Completed Q1, 2018 INVESTMENT: SEKm 101 and Green Building At the end of 2016 Castellum started a new construction in Uppsala of 5,963 sq. m. distribution premises. The property is well situated with access to E4. The investment is calculated to SEKm 101, of which SEKm 20 represents the value of the acquired land. The new building is fully let. Spejaren 5 in Huddinge LOCATION: Smista Area in Huddinge AREA: 3,480 sq.m. TIME PLAN: Completed Q3, 2017 INVESTMENT: SEKm 98 CERTIFICATION: Miljöbyggnad level Silver In Smista, Castellum has started a fully let new construction of 3,480 sq. m. for car sales. The investment is calculated to SEKm 98 and to be completed during the third quarter The new building is being constructed according to the Miljöbyggnad environmental certification system, with the ambition of reaching Silver level. CASTELLUM ANNUAL REPORT 2016 DIRECTORS REPORT 27

5 Inom Vallgraven 4:1 in Gothenburg LOCATION: Central Gothenburg AREA: 2,500 sq.m. COMPLETED: Q2, 2017 INVESTMENT: SEKm 92 During 2016 Castellum started a fully let reconstruction and extension of Kungsportshuset, with a unique location in central Gothenburg. The property will be a cultural and entertainment venue with new construction standard while a genuine impression is preserved. The investment is calculated to SEKm 92 and to be completed during the second quarter The reconstruction and extension is being constructed according to the Miljöbyggnad environmental certification system, with the ambition of reaching Silver level. Majorna 163:1 in Gothenburg LOCATION: Södra älvstranden in Gothenburg AREA: 5,867 sq.m. COMPLETED: Q1, 2017 INVESTMENT: SEKm 88 In the Klippan area, on the South Shore of Gothenburg, a reconstruction is ongoing of 5,867 sw.m. office and warehouse premises. Local environments have been developed for both residential and commercial properties, and today it is an area where creative enterprises move into historic industrial buildings with innovative and exciting architecture. The investment is calculated to SEKm 88 and the propertyis being constructed according to the Miljöbyggnad environmental certification system, with the ambition of reaching Silver level. The building has an occupancy rate of 75%. LARGER ONGOING PROJECTS 2016 Name of property Area, sq.m. Rental value SEKm SEK/sq.m. Econ. occup. Total inv. January 2017 inc. land, SEKm Remaining inv., SEKm Completed Commet Olaus Petri 3:244, Örebro 14, ,400 48% Q New construction office Lindholmen 30:5, Gothenburg 9, ,500 96% Q New construction office Balltorp 1:124, Mölndal 18, % Q New construction logistic Varpen 11, Huddinge 7, , % Q New construction car retail Nordstaden 2:16, Gothenburg 9, ,300 28% Q Reconstruction office/retail Söderhällby 1:2 (part of), Uppsala 5, , % Q New construction logistics Spejaren 5, Huddinge 3, , % Q New construction car retail Kranbilen 2, Huddinge 8, ,050 40% 97 9 Q New construction warehouse/logistics Inom Vallgraven 4:1, Gothenburg 2, , % Q Extension and reconstruction cultural and entertainment venue Majorna 163:1, Gothenburg 5, ,500 75% 88 1 Q Reconstruction office/warehouse Tjurhornet 15, Stockholm 5, Q Parking facilities Visiret 3, Huddinge 2, , % Q New construction car retail Boländerna 12:1, Uppsala 3, ,400 52% Q New construction warehouse/logistic Sändaren 1, Malmö 2, , % Q Reconstruction office Gamla Rådstugan 1, Norrköping 2, ,100 30% Q Reconstruction office Verkstaden 14, Västerås 1, ,000 85% Q New construction office Bangården 4, Solna 4, , % 42 7 Q Reconstruction apartment hotel BREEAM evaluates and rates the overall environmental impact of buildnings. Miljöbyggnad is a certification system that aims to create environmentally sustainable buildings. It takes into account energy, indoor environment and building materials. Green Building means that energy consumption is 25% lower than the energy requirements in Boverkets building regulations. 28 CASTELLUM ANNUAL REPORT 2016 DIRECTORS REPORT

6 Larger completed projects Drottningparken in Örebro LOCATION: South entrance of Örebro AREA: 4,237 sq.m. COMPLETED: Q3, 2016 INVESTMENT: SEKm 103 CERTIFICATION: Miljöbyggnad level Silver In 2016, Castellum completed a new building of 4,237 sq. m. in Drottningparken, Örebro. The flexible office building in proximity to both the city centre and the South Station has become a landmark at the southern entrance to Örebro. The investment amounted to SEKm 103, and the property has been certified as Miljöbyggnad Silver. The completed building is fully leased. Verkstaden 14 in Västerås LOCATION: Kopparlunden in central Västerås AREA: 6,100 sq.m. COMPLETED: Q1, 2016 INVESTMENT: SEKm 84 CERTIFICATION: Kopparlunden is an area in central Västerås with a mix of modern technology and a century of industrial tradtion. Castellum owns approx. 12,000 sq.m. of building rights in the area. In 2016, the Company completed an extension of 3,800 sq.m. and a reconstruction of 2,300 sq.m. The investment is calculated at SEKm 84 and is fully let to a school. Varpen 10 in Huddinge LOCATION: Smista area in Huddinge AREA: 2,520 sq.m. COMPLETED: Q4, 2016 INVESTMENT: SEKm 72 CERTIFICATION: Miljöbyggnad level Silver In Smista, Stockholm region s leading cluster for car sales, Castellum has completed a fully let new construction of 2,520 sq.m. for car sales. The investment amounted to SEKm 72 and the new building is completed according the environmental classification Miljöbyggnad, level silver. LARGER COMPLETED PROJECTS 2016 Rental value Area Econ. occup. Total inv., land Remain. inv. Property sq.m. SEKm SEK/sq.m. Jan 2017 incl. SEKm SEKm Completed Comment Drottningparken, Örebro 4, , % Q New construction office Verkstaden 14, Västerås 6, , % 84 3 Q Extension and reconstruction education facilities Varpen 10, Huddinge 2, , % 72 9 Q New construction car retail Ringspännet 5, Malmö 3, , % 46 1 Q New construction car retail/garage BREEAM evaluates and rates the overall environmental impact of buildnings. Miljöbyggnad is a certification system that aims to create environmentally sustainable buildings. It takes into account energy, indoor environment and building materials. Green Building means that energy consumption is 25% lower than the energy requirements in Boverkets building regulations. CASTELLUM ANNUAL REPORT 2016 DIRECTORS REPORT 29

7 Major acquisitions in 2016 Acquisition of Norrporten AB In June 2016, Castellum acquired Norrporten AB, one of Sweden s major real estate companies. Norrporten s real estate portfolio consisted of 119 properties, comprising 1.1 million sq. m., spread over 11 cities. The acquisition complemented and strengthened Castellum s market position with an increased supply of property types and varied premises, while the Group s geographical presence was expanded. The acquisition strengthens the Group s presence and market position in five cities where Castellum is already established: Stockholm, Copenhagen, Helsingborg, Örebro and Jönköping. Further, the acquisition meant that Castellum established interests in Gävle, Sundsvall, Östersund, Umeå, Luleå and Växjö. During the fourth quarter sales were completed for the entire portfolios of Luleå, Östersund and Umeå - along with portions of the Sundsvall portfolio. LOCATION: Stockholm, Luleå, Umeå, Östersund, Sundsvall, Gävle, Örebro, Jönköping, Växjö, Helsingborg and Copenhagen AREA: 1.1 million sq.m. ACCESS: June 15, 2016 INVESTMENT: SEKm 26,415 Klassföreståndaren 3, Stockholm Havneholmen, Copenhagen 30 CASTELLUM ANNUAL REPORT 2016 DIRECTORS REPORT

8 Nyttan 3, Sundsvall Högkvarteret 1, Helsingborg Kvarnen 5, Norrköping Mässhallen 2 in Malmö LOCATION: Hyllie, Malmö AREA: 7,318 sq.m. ACCESS: April 2016 INVESTMENT: SEKm 328 In November 2015, Castellum acquired a property under construction in Hyllie, Malmö. Change of possession took place when the property was completed in April, The property consists of 7,318 sq.m. of high quality office space built according to the BREEAM environmental certification system, level Excellent. The investment amounted to SEKm 328 and the property is fully leased. CORHEI s real estate portfolio in Linköping and Norrköping LOCATION: 13 properties in Norrköping and 9 properties in Linköping AREA: 162,714 sq.m. ACCESS: March 2016 INVESTMENT: SEKm 2,083 In March 2016, Castellum completed the acquisition of 50% of the shares in CORHEI Fastighets AB. The transaction included the acquisition of 12 centrally located office buildings and one logistics facility in Norrköping, totalling 111,658 sq. m as well as 9 office buildings in Linköping, which totalled 51,056 sq. m. The investment amounted to SEKm 2,083. Occupancy rates for the portfolio averaged 79%. CASTELLUM ANNUAL REPORT 2016 DIRECTORS REPORT 31

9 Örnäs 1:17 in Upplands-Bro LOCATION: Brunna in Upplands-Bro AREA: 132,165 sq.m. planned land ACCESS: December 2016 INVESTMENT: SEKm 205 In 2016, Castellum purchased land in Brunna, Upplands-Bro, in the northern part of Greater Stockholm. The acquisition creates opportunities for warehouse and logistics investments in a conveniently located area next to the E18 highway, and close to the E4 highway, Mälarbanan and Arlanda Airport, where a major expansion is underway. The undeveloped property has a possible leasable area of about 60,000 sq. m. Pilgrimen 5 in Växjö LOCATION: close Växjö central station AREA: 6,036 sq.m. ACCESS: November 2016 INVESTMENT: SEKm 196 In Växjö, Castellum came into possession of the newly built World Trade Center in the autumn of It is a 6,036 sq. m. office building, part of an interesting urban development project that connects the southern and northern parts of the area around Växjö station. The investment amounted to SEKm 196. The property has been environmentally certified according to the LEED, level Platinum, and is 90%.leased. LARGER ACQUISITIONS DURING 2016 Property Rental value Area, sq.m SEKm SEK/sq.m. Econ. occup. Jan 2017 Acquisition SEKm Access Category Norrporten 1,114,274 2,053 1,850 93% 26,415 Juni 2016 Office and retail CORHEIs portfolio in Linköping and Norrköping 162, ,200 79% 2,083 Mars 2016 Office and logistics Mässhallen 2, Malmö 7, , % 328 April 2016 Office Örnäs 1:17, Upplands-Bro 205 Dec 2016 Land Pilgrimen 5, Växjö 6, ,146 90% 196 Nov 2016 Office Lerstenen 1 and 2, Lund 3, % 26 Feb 2016 Warehouse Hamnen 22:28 and 22:31, Malmö 5, % 25 Maj 2016 Warehouse LARGER SALES DURING 2016 Property Rental value Area, sq.m SEKm SEK/sq.m. Underlying prop. price, SEKm Deferred tax and Trans. Net sales costs SEKm price, SEKm Access Category Portfolio i Sundsvall, Umeå and Luleå 214, ,700 4, ,439 Feb 2017 Office and retail Portfolio i Malmö and Lund 113, , Dec 2016 Office and warehouse Lejonet 11, Luleå 21, , Dec 2016 Office Portfolio i Sundsvall and Östersund 48, , March 2017 Office and warehouse Portfolio i Östersund 18, , Dec 2016 Office Smörkärnan 1, Lund 7, , Nov 2016 Office Tågarp 16:22, Malmö 9, Nov 2016 Logistics and warehouse Sadelknappen 1 & 4, Stångbettet, Malmö 5, July 2016 Warehouse and office BREEAM evaluates and rates the overall environmental impact of buildnings. LEED evaluates and rates the overall environmental impact of buildnings. Miljöbyggnad is a certification system that aims to create environmentally sustainable buildings. It takes into account energy, indoor environment and building materials. Green Building means that energy consumption is 25% lower than the energy requirements in Boverkets building regulations. 32 CASTELLUM ANNUAL REPORT 2016 DIRECTORS REPORT

10 Building Rights and Potential Development Projects build future Castellum Part of Castellum s strategy is to build new premises. In order to offer the customer new premises with the shortest possible time for moving in, it is a competitive advantage to own building rights in attractive locations with approved plans. Castellum has approx. 920,000 sq.m. unutilized building rights. For a number of the unutilized building rights there are finalized project plans which can be started relatively promptly. Unutilized building rights are valued at SEKm 1,530 (1,352) corresponding to approx. SEK 1,700 (1,700) per sq.m. on average. Of the building rights approx. 431,000 sq.m. corresponding to approx. SEKm 1,141 (883) are reported as development projects and undeveloped land. The remaining are reported among office/retail and warehouse/industrial properties since they are addititions to already developed properties. Building rights by region and sq.m. Eminent in Hyllie, Malmö In the expansive area of Hyllie, in Malmö, Castellum plans for the construction of modern, highly sustainable office space totalling close to 8,500 sq. m. The project, called Eminent, is being planned as the first office building in the Nordic countries to be certified according to WELL an international construction standard that factors-in workplace well-being for people. The WELL standard is based on seven concepts that affect health: air, water, lighting, sound, diet, exercise and wellness, which implies particularly high requirements for ventilation, heating, lighting and sound. In addition to WELL, the intention is also to certify the building according to the Miljöbyggnad Gold environmental standard. Kungspassagen in Uppsala Castellum is constructing the Kungspassagen office building in one of the city s best locations, close to both the travel centre and the city s entire range of restaurants, services and shopping. The new office building will be built according to the Miljöbyggnad environmental classification system (silver level, minimum), and feature solar cells, green electricity and carbon-neutral district heating. Logistics Park in Gothenburg Castellum and four other players plan to jointly create a new logis - tics park in close proximity to the Port of Gothenburg: the Port of Gothenburg Logistics Park. The initiative is one of the largest of its kind in Sweden. The location near Scandinavia s largest port, featuring key industries and access to good infrastructure, is perfectly suited for efficient warehouse and logistics operations. The allocated land allows for new constructions of up to 65,000 sq.m. CASTELLUM ANNUAL REPORT 2016 DIRECTORS REPORT 33