INTERIM PERIOD JANUARY-SEPTEMBER 2014

Sights set on growth

JULY-SEPTEMBER 2014 QUARTER

  · Rental income amounted to MSEK 409 (388)
  · Profit from property management totaled MSEK 243 (60), corresponding to SEK
3.7 per share (2.4)*
  · Profit after tax was MSEK 227 (65), corresponding to SEK 3.5 per share
(2.6)*
  · Cash flow from operating activities was MSEK 245 (52), corresponding to SEK
3.7 per share (2.1)*

INTERIM PERIOD JANUARY-SEPTEMBER 2014

  · Rental income amounted to MSEK 1,190 (1,177)
  · Profit from property management totaled MSEK 642 (230), corresponding to SEK
11.7 per share (9.2)*
  · Profit after tax amounted to MSEK 572 (136), corresponding to SEK 10.4 per
share (5.4)*
  · Recognized property value of SEK 17.5 billion (16.2) pertains to 195 (196)
directly owned properties.
  · Net asset value (EPRA NAV) per share was SEK 115.1 (118.4)
  · Cash flow from operating activities was MSEK 380 (129), corresponding to SEK
6.9 per share (5.2)*

* The number of shares at the end of the period was 65,720,000 (25,000,000)

SIGNIFICANT EVENTS DURING AND AFTER THE QUARTER

  · In July, Hemfosa’s joint venture, Söderport Fastigheter, divested a housing
project in Stockholm for MSEK 355.
  · On October 13, the Board of Directors decided to convene an Extraordinary
General Meeting to pass resolutions about an amendment to the Articles of
Association, which will facilitate the issuance of preferential shares.
  · Two major renegotiations totaling approximately 15,000 sqm were implemented
for the Police Authority and the National Courts Administration, entailing the
extension of both leases for 15 years combined with refurbishment and expansion
of approximately MSEK 120, to adapt the premises to the tenants’ needs.
  · After the quarter, Hemfosa implemented two acquisitions of public and
logistics properties in central Sweden at a value of about MSEK 795, of which
public properties accounted for approximately MSEK 200. The acquired properties
represent leasable area of about 94,000 square meters and include schools and
properties used in county council operations.

Comments from the CEO

Sights set on growth
We are leaving a quarter behind us that shows that the operations continue to
perform well – continued improvement in profit from property management,
increased earnings capacity and very strong cash flow. Today, the company also
has a significantly more favorable financial structure than in the past. The
aspect that really characterizes the soul of Hemfosa – our interest in
transactions – was quite evident in our work in the past quarter. We have a
clear focus on identifying and evaluating potential business – acquiring
property portfolios to which we can add value and that can further strengthen
Hemfosa’s property portfolio.

During the quarter, we refused a couple of objects that failed to meet our
investment criteria, while we will be moving ahead with other objects that were
deemed highly interesting. We also implemented a number of transactions. During
the quarter, we divested a housing project through our joint venture company,
Söderport Fastigheter. After the close of the quarter, we acquired public and
logistics properties in Central Sweden with a value of nearly MSEK 800. I regard
this as a completely correct and interesting transaction – it contributes strong
cash flow, improves our earnings and also strengthens us strategically in the
school sector.

Management of the existing portfolio is progressing well and, during the
quarter, this included several renegotiated leases, featuring adaptations and
renovations of premises to meet the needs of our tenants. The acquisitions
implemented earlier in the year have been smoothly integrated into Hemfosa’s
property portfolio and property management.

There is no doubt that Hemfosa has a clear growth objective. In line with this,
the Board decided in October to convene an Extraordinary Meeting to request
authorization empowering the issue of preference shares in the future. We
believe this is an appropriate way to supplement our opportunities to access
expansion capital for attractive future acquisitions.

Our impression of the market did not change during the quarter; the
macroeconomic prerequisites remain favorable for our sector, with healthy
economic growth, low inflation and low interest rates. Competition for objects
remains considerable but few possess Hemfosa’s implementation power – in the
form of both experience and expertise, but also contact network and financing
opportunities. We are proud of the platform we have built and the relationships
we have created. It is an excellent foundation on which to stand ahead of our
continued expansion.

Jens Engwall, CEO

In accordance with the Securities Market Act, Hemfosa is publishing the
information in this interim report on Wednesday November 5, 2014, at 8:30 a.m.

CONTACT INFORMATION

Hemfosa Properties AB
Tel: +46 8 448 04 80
Street address: Hästholmsvägen 28
Postal address: Box 2020, 131 02 Nacka
www.hemfosa.se

Jens Engwall, CEO
Tel: +46 8 448 04 82, e-mail: jens.engwall@hemfosa.se

Karin Osslind, CFO
Tel: +46 8 448 04 84, e-mail: karin.osslind@hemfosa.se