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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Open this presentation with Wihlborgs Fastigheter. Today, we have as our moderator Albin Sandberg from Kepler Cheuvreux. And now I leave over the speech to the CEO of Wihlborgs, Ulrika Hallengren.
Thank you, and welcome to this year-end report of 2018. We at Wihlborgs always try to develop new properties, new values and new way of doing things. But still, we haven't succeeded to develop a new word for record, so we will continue to use that. A bit old, but pleasing word, even in this report because our journey, our records continues. We increased our rental income by 14%. The operating surplus increased by 13%, and the income from property management increased by 19% on a yearly basis. That corresponds to SEK 15.65 (sic) [ SEK 15.63 ] per share; and EPRA NAV increased to SEK 122.64. Our result is strongly connected to our net letting. During Q4, our positive net letting continued by SEK 14 million and summarized to SEK 85 million for the full year. That means that our positive curve of quarterly net letting continues in the right direction. We have a very strong Q2 and have fulfilled the rest of the year in a positive way as well. The rental growth for the entire property stock is affected both by acquisition and projects and can be as strong as around 12%. The rental growth in like-for-like is a very good way to evaluate if we are successful. We have an overall goal to come in about 1% above index, and the index last year was 2.3%. So under 2018, we reached as high as 4.1% at rental value and 4.6% at rental income. That means that we have been very successful, both in new events levels but also in reducing vacancy. If we look into our portfolio of offices, we have very low vacancy, especially in Malmö and Helsingborg. 96% occupancy rate is historical low values. And we continue to see a good demand connected to these levels. Our portfolio of industrial and warehouse is also in a decent level, but that means that we also have some potentials here for further improvements. Some of them is already signed. About 90% of occupancy rates is -- that's a good level. We need some services to work on further on as well. That means that the overall portfolio has an occupancy rate of 94%, excluding land and projects; and a running yield of 5.4%. Our increasing occupancy rate is one of the factors that affects our property market value. We started the year with a value of SEK 38,612,000,000. We have added on acquisitions for SEK 900 million; made investments, SEK 1,239,000,000; sold some properties. We have change in valuation, SEK 1,312,000,000, mostly driven by higher rents and lower vacancy and some currency translations. That leaves us with SEK 42,146,000,000 as property value. And here is the curve for the increased value during the time from 2005 and forward. We increased and continues a positive trend. We continue to have our largest portfolio in Malmö, with 44% of our value. It's also the strongest market for us. And the rest of the markets in Helsingborg, Lund and Copenhagen is just below 20% of the value. These are our largest tenants. Qlik has left the list, and instead, we have Ericsson as a new tenant. These largest tenants have increased the total rent value with 1%, up to 22%; and also, the part of the governmental tenants has increased by 1% to 21%. And over to Arvid.
Thank you very much, Ulrika. So I'm going to run through the numbers a bit more in detail. Here, you see the P&L for the fourth quarter, isolated. So rental income grew by 9% in the quarter to SEK 687 million. Operating surplus, likewise, increased by 9%. And the income from property management increased by 20%. It was affected by some lower financial costs in the fourth quarter as a result of our restructuring of the derivatives -- interest rate derivatives portfolio. I'll get back to that in a short while. We have posted value changes in the quarter amounting to SEK 854 million and a net effect of the value of derivatives of minus SEK 90 million, and all in all, a profit for the period in the fourth quarter of SEK 934 million. Based on that result, I also want to mention that the board proposes to the Annual Shareholders Meeting a dividend of SEK 3.75 per share. The balance sheet as of year-end 2018 looks like this. I just want to make a few highlights. Investment properties grew by SEK 3.5 billion. At the same time, equity grew by approximately SEK 2 billion; and borrowings, likewise, by approximately SEK 2 billion. But as you can see also on the balance sheet here, the deficit value in our interest rate derivatives portfolio a year ago was SEK 943 million and now stands at minus -- or at SEK 26 million. And as we announced in December, and as most of you surely know, towards the -- or in Q4, we realized the deficit values in our interest rate derivatives portfolio and entered into new interest rate derivatives positions. And that basically meant that this -- we increased our debt and our -- so it was cash-out about -- or just over SEK 900 million. But the deficit value in the derivatives portfolio is now very much smaller than it was a year ago.Looking at the financial ratios. Our equity ratio continues to increase to 36.3% now, and the leverage now stands at 54.1%. That has been affected by approximately 2 percentage points by realizing the deficit values in the derivatives portfolio. Our interest cover ratio is 3.9x. And given the new derivatives portfolio, that is likely to increase during 2019. Look at some numbers per share. The EPRA net asset value now stands at SEK 122. And again, I want to highlight that the realization of deficit values and the interest rate derivatives portfolio has affected the EPRA net asset value negatively by approximately SEK 6 per share. Despite that effect, we have still a good growth in EPRA NAV, and the average growth since 2009 has been 18%. And the growth adjusted for dividends in 2018 was just over 10%. Our sources of financing as of year-end 2018 was: approximately half our financing comes from bilateral bank loans; 28% from the Danish mortgage system; and approximately 23% from the bond market, both our own MTN program and via the financing vehicle, SFS, Svensk FastighetsFinansiering. This is the historical development of our LTV, on the top left of the slide, where you can see that the LTV has gradually decreased with a slight upturn at the end, as I mentioned, with paying off the interest debt derivatives portfolio. The equity/assets ratio gradually has strengthened, and the interest cover ratio, likewise. We also feel that looking at the financial stability of the company, it's always important to look at borrowings in relation to operating surplus. And that ratio stands at 11x, which we are quite comfortable with, and it's basically at the same level as 1 year previously. These are the details of our loan portfolio. Worth mentioning is that at the end of Q3, the average interest rates stood at 2.4%, and that figure is now 1.39%. And at the same time, the average fixed interest period is virtually the same. I think it was 3.7 years at the end of Q3, and it now is at 3.5 years. And we still have a very long average loan maturity at 6 years. And this is the historical development of the loan maturity on the left-hand side and of the average fixed interest period on the right-hand side. So I'll end the number-crunching there and hand back the words to you, Ulrika.
Thank you. We have made some acquisitions, and of course, that's an important way of possibilities to growth. We entered Nya Vattentornet 3 in Lund in the 1st of October and added on almost 22,000 square meters with the Ericsson as the largest tenant. We have -- they have since then increased their areas a bit, and we get the positive signal for further expansions. This past Friday, we made a new acquisition when we bought Nya Vattentornet 2 and 4 from Vasakronan. That added on 49,000 square meters, a multi-story car park and some land area. The purchase price amounted to SEK 1,260,000,000. What you see here is that house where Sony is the largest tenant, a very modern building and good location. Originally built as a single-tenant office, but refurbished into 2 single-tenants. Possible for both larger and smaller tenants with efficient workspaces. The other building, Nya Vattentornet 2, is this building. Very attractive for smaller and medium tenants. Here is Sigma Connectivity and Schneider, the largest tenants. By these acquisitions, we have get our hand of the whole part of Ideon on the eastern part of the highway. It's a very good complement to what we have on the west side. We own everything here in the red line, except for the actual water tower. And we think that we can live without that one. It's a very good location and [ in front ] of the highway, and also, the tram station will have 1 stop here and 1 stop at the square of Ideon over there. So good location for transportation. These are some of the newest tenants at Ideon. We have mentioned Volvo Cars before. They started their -- as tenants in our portfolio with 600 square meters in 2016, and hence, has since then increased their areas from 600 to 1,400 to 2,000. And from January 2020, they will rent the whole building with 7,000 square meters. Bosch is also into the car industry, and they're also planning for further growth; as well as Continental. We have some new industries at this site, and it's very interesting for further expansion. Sigma Connectivity is also an example for new companies at the site. They have actually almost been born here, started with 0 employees a few years ago, and is today, 500 persons at the company. And even United Nation are now represented at Ideon. So we hope that in a peaceful and cooperative mode, we hope that we can keep giving our tenants the best possibilities for their future growth. We don't only expand by acquisitions. Let's talk a bit more about our ongoing investments. During 2018, we have a new record on investments, SEK 1,239,000,000, and we still have SEK 1,212,000,000 more to invest in already-made decisions. In Helsingborg, we have started Prisma. It's a very attractive modern office in the very best location in the city center. And we believe that we have a great interest both from small and larger tenants. The Court of Helsingborg has now moved into the new building, and we're working on the refurbishments on the older one, to the left on the side. The whole project will be finished in September, and then we have a 20-year lease ahead of us. In the same time that we proclaim that we will start the refurbishment of Terminalen 1, we, together with the Municipality of Helsingborg, decided to change the name of this location into Helsingborg Central. It's a complicated project with 40,000 persons passing through the site every day. But after finishing the center, this will -- means that the center of Helsingborg will have a totally new standard. The income in this building comes both from new restaurants and tenants at the new office spaces, of course; but also, from advertising possibilities, parking and agreement for other corporations in this building. We have a train station, a bus terminal, and actually, a ferry terminal at the same spot. In Lund, we continue with project Raffinaderiet. Also in the city center, a very small piece but interesting for its location. The municipality parking company is one of the tenants, and we look forward to completion late this year. In Hyllie, in Malmö, we're about to finish our first project, Dungen, Gimle 1. It has a very good quality and the Customs of Sweden is one of our largest tenants there. There's a small room for a small coffee shop in the ground floor, but all other services are signed, including the darker areas in the middle of the building and also the 2 basement floors. The Customs of Sweden moves in the 1st of April. We are also in full production with Bure 2 or Origo. Now the first lease is signed and we are negotiating with several possible tenants, especially for the larger areas that are suitable for a larger company. This area has also been useful in other negotiations when companies have chosen to stay in their existing location. That is an example that is very important for us, that we have areas to offer in every location. In the Dockan area, we are working hard for the completion for the police education of Malmö University. They will move in, in August. And we have ongoing discussions for possible expansions in the building. That can give us even more projects to come. [indiscernible] in Malmö, this is a new project that will add on 4,000 square meters in an area where we have actually, as I say in Sweden, used the shoehorn to give all the tenants some space. We are now in full negotiation both regarding who will move into this new premises with a higher rent, of course; and who will stay and expand in the existing building, also with a higher rent, of course. Starting this project, we'd push this negotiation in a positive direction. Finally, our tenants has -- you can hardly see that in the light here. Our tenants have started to move in, in Mileparken 22 in Copenhagen. We are one of the tenants. And within a few months, we expect all our new tenants to be in place. Most of them are new tenants, which is very satisfying. A quite small million, SEK 69 million, has given us a totally new building with modern standard. So even if 2018 was a record in investment and we have a lot more ongoing, we will see to that we can keep the tempo also in the future. Here is some of our coming possible investments in pipeline, and this pipeline could be both short and long, of course. At the Ideon Square in Lund, the plans for further building continues. The possibilities are great, but we will first find the right tenants. A bit north, only 3 tram stations away, we will build these 3 buildings. We have at least -- we will have a lease commitment from Science Village, and thereby, we have a possibility to start this project late 2019. It will be a hotel for researchers at MAX IV and ESS. In the Central Lund, we have completed Posthornet phase 1 during 2018. We are now starting a process of changing the planning commissions from residentials into offices. We hope that, that might give us a possibility for approximately 2,000 -- 8,000 square meters at Posthornet and some added-on services also in the close by [ Sockerbruket ] and of course, some residentials. In Hyllie, our next project now has the right name. It's Hyllie 7:3. Here, we have the possibility for approximately 20,000 square meters. We can build it as 1 or 2 buildings. We have ongoing discussions for both those buildings. We cover zone one-by-one or both at the same time. They will be totally incorporated with each other, so for the future, we have the possibility also for 1 single tenant. And of course, in the city center of Malmö and also very close to our hearts, Nyhamnen. We have 3 possible attack areas: [indiscernible], Slagthuset and also at the waterfront. And we are one of -- one partner in the first planning permission that starts now in this water-closed area. We have at least 10,000 square meters offices there. Finally, some words about co-working, shared spaces, rent-a-workplace. What do we do in this matter? We have approximately 20,000 square meters of different kind in different areas in this section. Some of them are in a special focus area, for example, media evolution city, they are focused on media companies. We have a hub in med tech at Medeon. We have innovation companies at Ideon in Lund. These kind of offices can be very interesting, both for the surroundings around it but also for companies who are growing. It's quite expensive to handle a lot of new tenants. They are flexible and needs quite a lot of support. It's not the area where we earn our most money, but we keep following the trend here, of course. And we think that we have a possibility that they're willing to pay for these extra services. And the flexibility might increase by the buzz the word co-working creates today. So to summarize, we have another record year for rental income, operating surplus and income from property management. We continue to have good demand, and we have historical low vacancy. We have large projects development activity in prime locations. We have strengthened our positions in Lund by acquisitions, and we have a stable and financial strength and cash flow to capture future growth opportunities. Thank you.
Thank you, Ulrika and Arvid. My name is Albin Sandberg. I come from Kepler Cheuvreux. And as usual, there will be opportunities to ask questions, both on the floor and the telecom conference.
But let me kick off, at least. Obviously, a very solid report at least relative to my expectations, and I guess, my fellow colleagues out on the Street as well. I guess, a bit of profit-taking in the shares today, most likely. But one thing that I feel when I discuss a lot with the investors about Wihlborgs is -- and you showed, for example, the Nyhamnen in Malmö, there appears to be a bit of fear that due to the potential supply coming on the Malmö market, the rental growth potential might not look as attractive as it does in Stockholm and Gothenburg, for example. And I just wondered how you see the market. And do you share those concerns or do you think they're overblown?
We are not concerned. As you can see, we have other developers in the area. Many of them don't only develop in this area. They have demands to keep up the rent levels and have a good business, of course, ongoing. So it's responsible companies developing in Malmö. It's a possibility that we, during 2019, get out almost 100,000 square meters of the market, though most of it is pre-rental. And we have, during 2018 and 2017, have very quite low new added-on areas. So we think that this just is -- it's a good take-up in the market, and it will suit very well there.
Now if I may add something. I think, also, if you look at -- I mean, you compare the Malmö market to the Stockholm market, you should also look at the long-term trend of rent levels, where you could see that Malmö's has a good stable growth but a lot less volatility in market rents than, for example, the Stockholm market. So I mean, I think, historically, if you look at a 15-, 20-year perspective, Malmö has been able to show a steady growth with low volatility, which we, of course, find quite attractive.
And you managed to show yet another quarter with positive net letting. Could you be a little bit more specific on where you were successful and maybe where do you see the strongest demand across your portfolio?
We have been especially successful in Malmö and Helsingborg. We think Lund is also a strong market, that we can do even more there. And now with those acquisitions, we have a possibility to be even stronger there. But for the last quarter, it's Malmö and Helsingborg as the strongest markets, definitely.
And is it a widespread demand or considered specifically to any sectors or so forth?
No, I think it's quite close to how we see them, the market. It's a good diversity between different kind of companies. And I think that's a strength for the market, that we're not depending on one single business. So it's a good spread also in our tenants.
And coming back to the most recent acquisition you did in Ideon, in Lund, what's your outlook there? You said you have 80% occupancy in that building.
Yes, in one of the buildings, yes.
What -- in one of the buildings, okay. So then what do you kind of foresee going forward, are you happy with the 80%? Is your deal home there? Or -- it just seems that you should get up to maybe in line with the group average.
It's not all. We have improvements to do there and we have a plan for that -- for the whole Ideon area, and we have possibilities both for changing some things into other possibilities. But the new acquisition, Vattentornet 4, is a good kind of area that we can offer certain companies that need that kind of services. So in the puzzle, in total, this suits us very well. And we have now the possibility to work on. And I think that in 2 years' time, we will be at a level that are more in our goal levels.
Yes. And in general, on the activity market that you see among transactions, do you get a lot of offers these days? Or is it...
I think 2018 ended up quite well on the market. And of course, we are always interesting if things are suitable for us. So we will be active when the possibilities come.
Do you think the price that you paid for the acquisition, was that helped in any way by the fact that you already have a strong position there? Or did you feel it was a little competition for that asset?
I think that the price level was -- of course, we have -- when we look into possible acquisitions, we are quite -- we are not so aggressive. So I think that this product suited us very well, and we think that the price level is right for us.
And I think, yes, I mean, given the position that we already have in the Ideon area, our own opinion is that we are a good owner of those assets which we now acquired.
And I guess, historically, and as you tried to point out, Ulrika, I mean, your development pipeline has grown quite nicely during the past few years again and so forth. Where do you think a normalized level is now when you had a year as a CEO, I mean, given maybe the outlook that you're seeing in terms of demand for tenants, but also maybe how you look at the balance sheet, possible constraints on that?
We keep saying that investing about SEK 1 billion a year is a good level for us, but we see possibilities that we can be a bit above that. And we hope that, that would be possible also in the future.
And we also feel that the cash flow that we generate makes us being able to be at those investment levels without increasing the financial risk.
And Arvid, you pointed out that, if I got it right, that 2% of the increase in LTV was due to the kind of the, yes, planned derivatives.
Approximately, yes.
Yes. And we have seen a trend that may be in the sector that the LTV is going down. People have become more cautious about the leverage targets and so forth. Do you have any updated views on your financial position?
Yes. Well, I think the mode is for restructuring our derivatives portfolio where, of course, partly to get a better structure of the interest rate risk management. But then it was also, of course, a factor with the changed tax legislation. So the [ asset ] values that we realized in Q4 were tax deductible, and we can use that as we need those tax deductions. Also, the restructuring will lower the interest costs for the coming few years in absolute terms. So the limitations on interest rate deductibility will not affect our tax payments for the coming years either. So that is, of course -- it's important to remember that logic behind the transactions that we've made. We feel that the -- increasing the LTV by that transaction, we feel is quite manageable, given the strong cash flow that we have. Our objective towards the end of 2019 is to reduce the LTV down to around 52% somewhere. So we foresee that we can reduce the leverage during this year.
And now you've had the time, as you said, to do those kind of deals from a taxation point of view. And now we're into this first year of new taxation rules and so on. Have you made any updated assessment on your paid tax levels and how that really would hit you and maybe benefit you?
As I said, the interest rate deduction limitations, we expect them to have no or minimal effect on our Swedish operations. The paid tax that we have is almost completely paid in Denmark, where we don't have the same interest rates -- or where we don't have the same tax deduction possibility in this aspect in Sweden.
And when you say no impact in Sweden, that's for '19, maybe '20, '21?
'21.
'21. Perfect. Okay, one more question because before I let the floor. In -- I mean, we used to see quite high occupancy rate in your development portfolio. The [indiscernible] that is completed in Q3 in Malmö, the office building, it's still at 0. What's the strategy on that asset? And...
Well, it's not 0. We have signed a few leases, but that's of the largest services because we have saved that. And we expect that we will have completed that as well before ending the project. But we have saved it and we have ongoing discussions in a very positive way. We think it's good for us to have opportunities. And -- but of course, we would like that some of those negotiations will be landed in the coming months.
Okay, perfect. Okay. So I'll open up the floor for some questions. [Operator Instructions]
A Tobias Kaj from ABG. I would like to start to ask you regarding your occupancy rates. It's improving in all 4 submarkets for the office portfolio. Do you think you can continue to improve the occupancy rate, or do you think that we have reached a peak now?
I think that we have said that we are at the right level for every increase that we have reached. But I think somewhere here is -- it's a very high level, especially for the Malmö market. We need some services to work on, and we have services going into project and so on. So don't expect it to be so much higher.
And in terms of activity on the rental market, there are lots of discussions whether the Swedish GDP growth has peaked and will slow down significantly going forward. You reported an increase in net leasing in the fourth quarter, but a slight decline in the full year '18 compared to '17. And both Castellum and Fabege reported more than 30% drop in net lease during '18 compared to '17. Is that an indication, as you say, that the best activity has passed and we should expect lower net leasing for '19 compared to for '18?
We don't see any trends like that in the ongoing discussions. So I expect that we have -- continue good levels in our markets also in 2019.
We've only had 1 quarter since 2008 with a negative net letting. And we will definitely strive to keep that good track record.
And regarding your acquisition in Lund, I think both the one you did last autumn and the one you did last week, you paid around SEK 26,000 per square meters for the offices. And if you look at your total office portfolio in Lund, the book value is around SEK 34,000 per square meter. Is -- did you do a good deal when you bought those assets? Or is it a risk downwards on your existing portfolio?
As I said before, I think we paid a price that we are satisfied with, and we see potential for further development there. So it's a good level.
And you really need to look at each individual property to have an opinion if that square meter price is correct or not. So I think it's hard to answer your question in detail.
And one follow-up also regarding investments in developments. You talked about SEK 1 billion on an annual level as a good level. In your ongoing projects, you have SEK 1.1 billion remaining investments at the moment. It was SEK 800 million a year ago. Is that an indication that for '19, we can see even higher volume of investments compared to 2018?
I wouldn't expect them to be higher than 2018. It was in a higher level, and we would like it to keep above SEK 1 billion. But in a long-term perspective, I think SEK 1 billion is a good level.
Erik Granström with Carnegie. I just had one question regarding acquisitions. In 2018, you made acquisitions for about SEK 900 million. Now last week, you did one for SEK 1.3 billion. At the same time, you're looking at focusing on an LTV of around 52%, if I'm not mistaken. Does that mean you're done when it comes to acquisitions for the rest of '19? Have you sort of -- have you blown everything in the first couple of months of '19 and now it's going to be a silent period until year-end?
I don't think you should expect the rest of the year to be quite silent. But I think the LTV objective toward the end of the year, it is, of course, an objective. And -- but we will continue to look at transaction opportunities which may or may not arise during the year.
Niclas Hoglund, Nordea. A couple of follow-up questions then, if I may. If we start with -- I mean, continuing on this sort of same question as Albin started on with the sort of Nyhamnen and the large projects on hand. You're talking about 200,000 square meters. What's the sort of time schedule here for the zoning and planning? So when should we start to get word?
When the Municipality of Malmö is talking about Nyhamnen and the expected amount of 1 billion square meters residentials and offices, the time schedule for that is until 2045 or so on. So it's a long-term perspective. But we will keep on being active in every space that we can. We built Sirius just a few years ago, and I think that was a good statement that we want to be in this area, and we want to keep on moving in as a good phase as we can.
But most likely, of these projects, Nyhamnen is probably a little bit back-loaded and old the next coming years. Or should we expect something to get started already in '19?
No, no, not under '19.
And then also on projects. You have a large project pending in Hyllie. How is the planning processes there? Is everything set for a start? Or -- and what's the sort of -- what's the interest of -- around tenants for that buildings?
The Hyllie 7:3, the detailed plan is -- the planning commissions are on -- everything is fine there. We have bought the land. So along with the discussions for the new tenants, we are -- have possibilities to start that as soon as we think it's the right time.
And I think you previously indicated that you have a build-to-costs in your Gimle 1 project of around 6%. Is there a material -- higher costs for the land or for the building? Or should we expect sort of when you get tenants in -- onboard, that the Hyllie costs is a similar level? Or is it...
Yes, you should expect similar levels.
Okay. And then as my final question, you don't -- you're not splitting out the sort of retail share of the group, and of course, you don't have any major shopping malls or what have you. But could you discuss a little bit your exposure towards that sector? Any sort of short-term threats, vacancies?
We have a very small part of our portfolio that are into retail. And we can also see that the retail in the city center are under great change. We have the Emmaus as an example, where in Elefanten -- in Elefanten, yes?
Yes.
And it's a very good example that it's different kind of shops entering in the city center. And actually, that new tenant give us a higher rent than Hennes & Mauritz did before. So changing the city center can be a way of also improving the tenant -- the rent levels.
And I think it's also worth mentioning that the retail tenants in the city center, they're basically requesting smaller space. But there's a demand -- I mean, if you -- like in this example, when H&M decreased the size of their store, there is demand for the space that they left. So it's not that demand in the city center for different shops is vanishing in any way.
And then to get the rough number of -- out of your total exposure, how big is it? Is it around 10%?
No, it's lower.
No, it's less.
Much lower, okay. And then my final question is going on to the financing. We've seen you now -- while letting out the swap agreements and your financing costs is coming down. At the same time, you're keeping very long duration, mainly related to the capital side. Should we expect that duration to come down now with these lower investments in Sweden? Or...
I mean, I -- when we financed the acquisition we made last week in Sweden, that will average down the average loan maturity. But it's still not large enough to distraught the number in any major way. So I mean, you should expect the average loan maturity to keep on being reasonably high.
But is it also fair to expect that you -- when you did the financing of that acquisition, it's on a lower level than your sort of average net funding cost in the end of the quarter?
That is on a slightly lower level than the average in the group, yes.
Stefan from SEB. On Copenhagen, could you maybe give us your view at least on the supply coming in '19, '20 there? Looking at the hotel side, I know there's a big scare of -- because of big supply coming in '19 and also '20. So on the office side, how do you see it and experience it?
We think that the rents will stay at the same level. We think that the add-on services that we offer give us a good advantage in the market. We have a growth in Copenhagen, but it's in a slower pace than in Sweden. We see -- we have ongoing and good discussions. For example, Mileparken, I think 60% of the tenants are new tenants, and they come to us by recommendations from other tenants. So I think that we have good possibilities for further development in our portfolio, but the market is not as quick growing as in Sweden.
I think it's also important that -- in the areas of Copenhagen where we are active and where we have strong position, you don't really have much new supply coming to the markets at all. So the office supply coming to the Copenhagen market currently is basically city center, which is a submarket where we're really not active.
And we also see an interest of more combined areas, more like how we did in Sweden, where you combine both offices and housing in the same area. And that makes also the offices more attractive. That kind of development is ongoing in several places where we have our offices, and that's a positive way for the city-building feeling.
Okay. And then the last question, I might have missed this in the report, but I think you earlier showed the like-for-like rental growth. And I didn't see that for the full year. Do you have that number?
Yes. For rental value, it was up 4.1%; and for rental income, up 4.6%.
So it's very good level.
Okay. We'll see with the telephone conference if there are any questions.
[Operator Instructions] And it looks like there are no questions registered on the telephones at this time. So I'll hand the call back to you, speakers.
Okay. So I have 2 more questions. And one is the worry on the stock market end of '18, I mean, quite high volatility we did see, for you specifically -- not you as a company, but the real estate sector, maybe even more worries about spreads on the bond side coming up and so on. We haven't seen so much financing being made in Q1 so far. But based on your gut feeling now, Arvid, what's happening?
I think it was, of course, interesting to follow what was happening towards the end of Q4 in the bond market. I mean, as you know, I mean, our financing strategy is really that the largest part of our financing shall continue to be bilateral bank agreements. And then it's of course important for us to have different sources of financing, where the bond market is also an important, although smaller financing source than the bilateral bank market. My impression is that the bond market is in -- has a better sentiment now than it did during December. But I think the events in December also show the volatility. I mean, the bond market can be really attractive one week and not attractive at all a week or 2 later, where my opinion is that the bilateral bank market can, of course, also have different sentiments, but the volatility in those relationships is much lower. So it's more of a long-term relationship and less variations.
And in terms of credit availability, do you feel that unchanged, improving?
Yes, I think in our different bank discussions, what we hear is that the banks are still very much willing to lend money to us. And my impression is that the bond market, although shakier than 3 months ago, it's still available, absolutely.
And then my final question would be, Ulrika, now you've been on the post now for about a year or so, and I know that you do not have a formal growth target in place, and we can look at history and so forth and see what you've done. Now I think you raised the dividend a little bit more than I think we had expected, which, I guess, is positive, but it also -- the way I see it, put a little bit more pressure going forward to keep that. But how should an investor look at Wihlborgs, I mean, let's say, '19 and '20? Or you as a CEO, what kind of income growth rate should you be happy with, given the portfolio that you have and the market you're seeing?
I think that if we, for example, look at the income from property management and the increase in that level, we reached just about SEK 1 billion a year ago, and now it's SEK 1.4 billion. That's a very good level. And we think that we will continue in a good pace and focus on our earnings and the valuation coming from that, it's hard to get a specific number.
I think you -- I mean, looking at the growth for 2019, I think it is also, of course, important to remember that the interest rate costs will be a lot lower during 2019 than in 2018. So that will, of course, contribute to growth in income from property management.
Okay. Thank you very much. And unless there are no more questions here on the floor, which I take there isn't, thank you very much for the presentation.
Okay.
Thank you.