CTM

Divestment Activity

• Completed signed divestment agreements totaling 24 billion in property value in the first half of 2026: 13.3 billion for all Öresund region (excluding Copenhagen) properties sold to Vilborgs, 5 billion for a Stockholm two-building portfolio sold to Alekta, 5.6 billion for public properties sold to AP7, and ~400 million in smaller mixed-category properties across multiple geographies.
• All signed divestments were completed at ~2% above the prior quarter's fair value; management approved the sales because the achieved prices exceeded internal return targets for the sold assets.

Leasing and Occupancy

• Current overall occupancy rate is 87.5% (vacancy rate of 12.5%), a slight increase in vacancy from the prior quarter, driven by prolonged negative net leasing excluding large projects. The large A3 tenant contract termination reduced Q2 net leasing by 95 million, which was previously expected.
• Annualized contract activity: 11% of contracts by rental value were terminated, 9% were prolonged with no rent change, 3% were renegotiated with an average 4% rent reduction. Weighted across all prolonged and renegotiated leases, the overall rent change was -1%.
• Ericsson agreed to lease the full Infinity property, and signed conditional lease agreements for two additional Hagaston buildings; these additional leases will not contribute to 2026 net leasing, and likely not contribute until the end of 2027.

Capital Structure and Capital Allocation

• Loan-to-value ratio is 37.3%, which is below the 40% maximum set by the firm's financial policy, providing healthy headroom.
• Average debt maturity remains 4.5 years; during the quarter, management refinanced 2.3 billion in secured RCFs, issued 3.9 billion in unsecured SEC bonds, and repurchased 1.7 billion in shorter maturity bonds. Terminated the S&P credit rating, as management believes one credit rating is sufficient for the firm's new strategy.
• Interest-bearing liabilities decreased from 59.5 billion in Q1 to 57.3 billion in Q2, and are expected to decline further to 49-51 billion after divestment closes, when 40% of divestment proceeds will be used for debt amortization.
• The average interest rate increased from 3.1% to 3.5% following redemption of low-coupon Euro bonds, which was required to execute the recent large divestments; this will increase annual net financial expenses by ~200 million. Interest Coverage Ratio (ICR) remains 3.2x, meeting the minimum 3x policy requirement.
• In the first six months of 2026, the firm repurchased 39 million shares for 4.6 billion, completing buyback authorizations tied to the AP7 divestment and 2025 results. The board approved a new buyback program of up to 3 billion, equal to 40% of the proceeds from the Alekta divestment, within the remaining AGM authorization; the firm currently holds ~5% of its own shares.

Sustainability

• The firm reduced total energy consumption across its portfolio by 2 percentage points in the first half of 2026, continuing its focus on energy efficiency and sustainability.

• Management did not provide explicit quarterly or full-year financial guidance, but noted that occupancy has declined and all large previously announced terminations (originally scheduled from 2025) are now reflected in current Q2 figures.
• On market conditions: Management reported leasing activity is higher in Stockholm than one year ago, the Gothenburg market appears to have bottomed out (no further decline in activity), and regional markets remain sluggish but are not declining. The firm's core goal of return on equity above 10% over a business cycle remains unchanged; annualized H1 2026 return on equity is 5.2%, which is below target but an improvement in the right direction.
• Excess capital from the Vilborgs divestment will be allocated at a later date, after closing, when market conditions and share price levels are clearer; all allocation options (dividends, additional share buybacks, reinvestment) will be considered at that time.
• Management will evaluate strategy for upcoming hybrid bond reset/first call dates (first call in December 2026, reset in March 2027) and share plans closer to the date.

Castellum is a commercial real estate firm, so all performance is aggregated across its property portfolio: as of Q2 2026, the total property portfolio value is 134 billion (includes pending unclosed divestments; 116 billion after excluding pending transactions). Net leasing for the first half of 2026 was positive 110 million, driven primarily by Ericsson's 140 million full lease of the Infinity property; net leasing excluding large new projects remains negative, though improved from the prior three years. Like-for-like in-place rents declined 1.3% year-over-year, and like-for-like property income declined 2% year-over-year, matching the decline reported in Q1. Net Operating Income (NOI) declined 4.8% year-over-year for the first half, due to lower income from higher vacancy and increased operating costs from a colder winter (higher snow removal and heating expenses). EPRA Net Reinstatement Value (NRV) per share increased 4.5% year-to-date, with half the gain from profit and half from below-NET share buybacks. Income from property management per share increased 7.3% for the first half of 2026 compared to the first half of 2025.

• The firm holds a significant proportion of its remaining portfolio that does not meet internal return targets at current fair market valuations; management would prefer to sell these assets, but final returns depend on the actual prices achieved in transaction market sales.
• Higher vacancy continues to pressure rental income, with net leasing excluding large new projects still negative, and the broader rental market remains sluggish overall.
• Recent debt transactions have increased average interest rates and annual net financial expenses, putting moderate downward pressure on the Interest Coverage Ratio, which currently still meets policy requirements.
• Property valuations have incorporated lower cash flow expectations driven by a mix of flat/declining rents and higher occupancy declines across most regions and asset classes, leading to negative quarterly value changes in Q2 2026.

Q: Analyst Staffan Byhlob asks what threshold share price would make share buybacks unattractive, what excess capital distribution options are considered for Vilborgs divestment proceeds, and how much of the remaining portfolio fails to meet return targets. / A: Management confirms share buybacks are currently very attractive due to a ~40 SEK spread between share price and net asset value (NAV), and the topic of ending buybacks has not been discussed as there remains significant headroom before reaching NAV. All distribution options (dividends, buybacks, reinvestment) will be considered when the divestment closes in a few months, as management prefers to wait to assess market conditions at that time. Management estimates a significant (but not majority) proportion of the remaining portfolio would be better sold if fair value prices can be achieved, but the actual share depends on what prices the market will offer.\n\nQ: Analyst Lars Norby asks about net leasing targets for the remainder of 2026 and current market conditions compared to last quarter. / A: Management states the firm's only target is to work to sign as many new leases as possible, as it cannot forecast overall market demand. Leasing activity has increased in Stockholm compared to a year ago, the Gothenburg market has stopped declining and appears to have bottomed, and regional markets remain sluggish but are not declining further. No large additional terminations comparable to the A3 termination are expected in coming quarters.\n\nQ: Analyst Fredrik Stensved asks if the recent 1% net decline in renegotiated/prolonged rents reflects a strategic shift to cut rents to maintain occupancy, or just market changes, and if all large planned terminations are reflected in current occupancy. / A: Management confirms the rent decline is entirely driven by current market conditions, not a strategic shift from management. All large terminations that were announced beginning last year are now fully reflected in Q2 occupancy figures.