Interim report January - September 2015

Continued streamlining toward community service properties

JULY-SEPTEMBER 2015 QUARTER

• Rental income amounted to MSEK 615 (409)

• Profit from property management totaled MSEK 345 (243), corresponding to SEK
2.43 per ordinary share (1.85)*

• Profit after tax amounted to MSEK 560 (227), corresponding to SEK 4.06 per
ordinary share (1.75 )*

• Cash flow from operating activities was MSEK 260 (245), corresponding to SEK
2.14 per ordinary share (1.85)*

INTERIM PERIOD JANUARY-SEPTEMBER 2015

• Rental income amounted to MSEK 1,819 (1,190)

• Profit from property management totaled MSEK 958 (642), corresponding to SEK
6.81 per ordinary share (5.85)*

• Profit after tax amounted to MSEK 1,642 (572), corresponding to SEK 11.93 per
ordinary share (5.20)*

• Recognized property value of SEK 28.0 billion (17.5) includes 369 (195)
directly owned properties

• Net asset value (EPRA NAV) per ordinary share was SEK 69.48 (57.55)*

• Cash flow from operating activities was MSEK 797 (380), corresponding to SEK
5.59 per ordinary share (3.45)*

* Key figures were retroactively restated due to a 2:1 share split implemented
in May 2015.

SIGNIFICANT EVENTS DURING AND AFTER THE QUARTER

• Hemfosa acquired a community service property in Karlstad. The property
includes about 7,000 square meters of educational premises and is fully leased
with a 20-year agreement.

• Hemfosa implemented a private placement of preference shares. Net proceeds of
the issue amounted to SEK 166,299,833.70. After the issue, the number of
preference shares totaled 10,999,999.

• After the end of the quarter, Hemfosa’s partly owned joint venture, Gardermoen
Campus Utvikling AS, signed an agreement to develop a local medical center at
Gardermoen, near Oslo, adjacent to the specialist hospital the company began
building in September 2015. Construction is scheduled to commence in spring
2016, with completion expected in January 2018.

• After the end of the quarter, Hemfosa´s partly owned joint venture, Söderport
Fastigheter AB, divested eight properties. The total sales price amounted to
MSEK 154.

Comments from the CEO

We continue to strengthen Hemfosa Fastigheter’s position as the largest publicly
listed property company with a focus on community service properties. An
additional investment in the Oslo area confirms our position as a major player
in the Norwegian market. We also analyze the possible acquisition of community
service properties in Finland. In the third quarter, our earnings capacity was
further strengthened in parallel with lower financing risk due to a lower loan
-to-value ratio and a higher quity/assets ratio.

INCREASED FOCUS ON COMMUNITY SERVICE PROPERTIES

During the year, we have worked determinedly to focus the property portfolio on
community service properties, which now account for more than 60 percent of our
income – and our aim is to increase that share. Every market condition requires
new steps and approaches, having the courage to sit back and wait is sometimes
the most opportunistic strategy. The most attractive opportunities for Hemfosa
in the current climate are mainly large structural contracts and projects in the
public sector in the Nordic region. Our infrastructure projects in Gardermoen
are real examples of how we are literally laying the foundation for long-term
stable earnings and close relationships with our tenants.

BROADER NORDIC PLAYER

During the year, we established a clear position as a powerful player in
community service properties in Norway and we continue to growth through both
acquisitions and more projects. In autumn, our joint venture Gardermoen Campus
Utvikling AS (GCU) signed another agreement for a municipal development project
in the Oslo region – a local medical center adjacent to the specialist hospital
that we started building in September. That GCU was selected as the partner for
yet another project in this interesting area confirms that the company is also
perceived as a major player in this segment outside of Sweden. We are now hoping
to become a broader Nordic player in community service properties by turning our
attention towards Finland and actively analyzing potential contracts in the
Finnish market for community service properties. Despite some variations in the
Swedish, Norwegian and Finnish property markets, there are more factors that
unite us in our approach to community service properties, and we see great
potential for a powerful and experienced player such as Hemfosa.

A DEVELOPING ORGANIZATION

Since our foundation, Hemfosa has worked actively and consistently to secure
expertise in all parts of this rapidly growing property company. In 2015,
Hemfosa strengthened expertise in the Executive Management Team by appointing
new employees, for whom we want to present an opportunity to grow and reach
their full capacity. This kind of development is natural for our organization
and we believe that foresight, openness and real faith in the next generation is
the way forward. As part of this process, Stina Lindh Hök, currently the Head of
Transactions, will assume Lars Thagesson’s area of responsibility in connection
with his transition to a freer role at year-end. Lars Thagesson will also
continue to work exclusively with Hemfosa, as a consultant, mainly with
responsibility for managing project activities in Norway and probing the Finnish
market.
We are also proud of our nomination for the 2015 AllBright Award for a company
that “promotes a business industry that see the potential in every individual
and that recruits based on meritocracy.” In my eyes, a streamlined focus on
expertise and results is the only path to lasting business success. The
company’s success is proof that this approach pays off, for both employees and
investors.
With yet another stable quarter behind us, we will continue our journey down
this path. During the quarter, a private placement of preference shares also
strengthened our financial position. In other words, we are well-equipped, in
every possible way, to continue our development of the company.

Jens Engwall, CEO
For further information, please contact:

Jens Engwall, CEO
Phone: +46 70 690 65 50, Email: jens.engwall@hemfosa.se

Karin Osslind, CFO
Phone: +46 70 794 93 37, Email: karin.osslind@hemfosa.se