During the quarter, we saw a continued, cautious recovery and higher transaction activity, despite most analysts predicting that the statements on tariffs in the beginning of the quarter would dampen large parts of the global economy. Overall, transaction volumes in the European market increased by 11 percent in the quarter compared with the same period last year. The increase was driven primarily by improved credit conditions, which have narrowed the gap between buyers and sellers and thereby increased likelihood of closing transactions. This trend benefits all our business areas.
 
I can conclude that there are favourable conditions for continued growth and a stronger European property market, provided that long-term interest rates stabilise at lower levels. This is supported by inflation remaining under control in both the Eurozone and the wider European market.
 
Another positive factor is the growing interest in Europe among property investors, as uncertainty in the US increases. This was evident at the major investor conferences in Europe and Asia in which we participated during the quarter. Interest is rising among American, Asian, and of course European investors, many of whom have traditionally allocated a large share of their capital to North America. Several large international funds are now reassessing their asset allocations, with the US no longer the obvious focal point. Political uncertainty, challenges in major city commercial property markets, and an increasingly complex regulatory landscape are making Europe appear as a more manageable and long-term alternative.
 
That said, we must factor in slightly weaker-than-expected economic growth in many European markets, driven by global trade tensions. Ongoing geopolitical unrest in several parts of the world could also alter conditions — for example, higher oil prices could spark a new wave of inflation. Despite the uncertainty, I remain optimistic and expect increased activity in the European property market.

Operating profit for the second quarter was SEK 303 M (35), driven primarily by the result from the sale of Kaktus in the Principal Investments business area (SEK 252 M), as well as improved operating profit in both Investment Management and Corporate Finance.
 
Increased diversification after divestment
The single largest event in the second quarter was the divestment of Kaktus Towers in the Principal Investments business area. Within the business area, our focus remained on developing and completing existing projects for sale, while also exploring potential investments — both in new development projects and in additional European aggregation mandates with capital partners.
 
Looking ahead, our focus in the business area is to reduce concentration risk and diversify the portfolio through the strategic use of own capital - via early-stage investments, co-investments, and partnerships - to grow assets under management, increase recurring income, and enhance long-term shareholder value.
 
During the quarter, we announced a joint investment with global real estate investor Barings in the Vega residential project in Copenhagen. Through a joint venture to build 269 affordable apartments, the Vega project and partnership clearly reflect our future investment strategy. Another example is the Silbersteinstrasse project in Berlin, where the building permit application was submitted in early June. The project addresses the demand for new housing and will comprise 92 rental apartments.
 
With property valuations now stabilised at a new level, we see a solid foundation for new and attractive investment opportunities of this kind - fully aligned with our strategy and supported by the strong capital position created through the divestment of Kaktus Towers. We also plan to repurchase interest-bearing debt, thereby improving capital efficiency and reducing interest expenses.

Advising on major transactions
As noted earlier, the transaction market maintained its positive momentum in the second quarter, benefiting the Corporate Finance business area. During the quarter, we advised on a growing number of large transactions, strengthening the outlook compared with the normally weaker first quarter.
 
For example, Catella Corporate Finance Denmark acted as adviser to NIAM in the divestment of the approximately 75,500 square meter office property Copenhagen Business Park. In addition, the Swedish operations acted as adviser on 18 transactions with a total value of SEK 3.7 Bn.

During the quarter, in line with the Group’s strategy for increased pan-European growth, Catella created the new position of Head of Corporate Finance Europe. The role highlights both the importance of the Corporate Finance business area and its growth potential. Since 15 August, this has been my new focus, and I look forward to developing the business area together with colleagues across Europe.
 
Increased assets under management
In the Investment Management business area, we recorded some improvement, supported by a stronger transaction market. Since the previous quarter, assets under management have grown by almost SEK 8 Bn, driven primarily by new management mandates in Denmark, the UK, and Finland. This has further strengthened our base of fixed and recurring income.
 
Compared with the previous quarter, operating profit rose by SEK 22 M to SEK 41 M, driven by a higher number of transactions and the resulting increase in variable income. As noted earlier, the preceding quarter was exceptionally weak in terms of completed transactions.

Outlook
This marks my final statement as interim CEO of Catella. I am grateful for the trust the Board has placed in me during nearly a year in this role, and for their renewed confidence as I take on my new position as Head of Corporate Finance Europe.
 
I warmly welcome Rikke Lykke as our new CEO and President and wish her every success. We will work closely together, and I am confident that, alongside our colleagues, we have every opportunity to continue strengthening Catella’s position as a leading pan-European property investment company, supported by a very strong financial base that enables us to capitalise on the opportunities in the current market environment.
 
Our focus remains on executing the strategies set for each of our business areas, strategies on which we are already delivering.
Catella looks to the near future with optimism, backed by a strong liquidity and capital position, further strengthened by the divestment of Kaktus Towers. We are well positioned to seize opportunities as they arise in the market and we actively evaluate new investment opportunities to drive growth and increased shareholder value.

Catella will be presenting the Interim Report and answering questions today at 10 a.m. CEST.
To participate in the conference, please see: https://financialhearings.com/event/51908

Daniel Gorosch, interim CEO and President up until 15 August
Stockholm, Sweden, 21 August 2025