Earnings call transcript: Cibus Nordic Real Estate reports strong Q3 2025 results

Cibus Nordic Real Estate (CIBUS) delivered robust financial results for the third quarter of 2025, showcasing significant growth in rental income and property management profits. The company reported a notable increase in its property portfolio value, alongside strategic acquisitions and operational updates. The stock experienced a modest rise of 0.88% following the announcement, reflecting positive market sentiment.

Key Takeaways

• Rental income surged 38% year-on-year to 165 million euros.
• Profit from property management increased by 54% year-on-year.
• The company acquired 12 assets in Norway and expanded its joint venture initiatives.
• Cibus maintained a high occupancy rate of 96.1% with a focus on daily goods tenants.
• The stock price rose by 0.88% post-earnings announcement.

Company Performance

Cibus Nordic Real Estate demonstrated strong performance in Q3 2025, with substantial increases in rental income and profit from property management. The company’s strategic acquisitions in Norway and Belgium, along with ongoing redevelopment projects in Finland, contributed to its growth. Cibus operates across seven European countries, with Finland being its largest market, accounting for 50% of its net operating income.

Financial Highlights

• Rental Income: 165 million euros, up 38% year-on-year.
• Profit from Property Management: Increased by 54% year-on-year.
• Earnings Capacity Per Share: Up 8% year-on-year.
• Property Portfolio Value: 2.5 billion euros.
• Net Operating Income (NOI): Increased by 43.4%.
• EPRA NRV: Increased by 1 euro per share over 12 months.

Outlook & Guidance

Cibus aims to continue growing its earnings capacity per share and consolidating its grocery real estate portfolio across European markets. The company plans to optimize its balance sheet and explore potential expansion opportunities in mainland Europe. Cibus remains focused on accretive transactions to enhance shareholder value.

Executive Commentary

Christian Fredrixon, CEO, emphasized the company’s focus on converting food into yield, stating, "Converting food into yield is what we do." He also highlighted the steady and disciplined growth strategy, noting, "We’re growing steadily and conservatively and disciplined."

Risks and Challenges

• Increasing competition in Swedish and Finnish markets could pressure margins.
• Yield compression in transaction markets may affect future acquisitions.
• Macro-economic factors, including inflation and interest rate changes, could impact financing costs.
• Dependence on daily goods tenants may limit diversification.
• Potential regulatory changes in European markets could pose challenges.

Q&A

During the earnings call, analysts inquired about the structure of the new 2Plus joint venture, the acquisition strategy in Norway, and changes in asset values in Finland. The discussion also touched on financing costs and bank margins, providing insights into the company’s strategic financial planning.

Full transcript - ​Cibus Nordic Real Estate (CIBUS) Q3 2025:

Conference Moderator: Welcome to the Cibus Q3 2025 report presentation. For the first part of the presentation, participants will be in listen-only mode. During the Q&A session, participants are able to ask questions by dialing #5 on their telephone keypad. If you are listening to the presentation via webcast, you can ask written questions using the form below. Now, I will hand the conference over to CEO Christian Fredrixon and CFO Pia-Lena Olofsson. Please go ahead.

Christian Fredrixon, CEO, Cibus: Good morning, everyone, and thank you for dialing in and listening to our Q3 presentation for our 2025 Q3 results. Let’s dive straight into things. Speaking to you today, Christian Fredrixon, now CEO of the company. I’m joined here by.

Pia-Lena Olofsson, CFO, Cibus: Pia-Lena Olofsson, CFO.

Christian Fredrixon, CEO, Cibus: We’re calling to you from our head office here in Stockholm. The picture here is of us comparing apples to apples in one of our stores down in the Benelux, and Albert Heijn has happened to do. As you know, our slogan, Converting Food into Yield, says exactly what we do. Before we dive into the slides, I thought I’d just summarize the quarter in two main points. It’s another stable quarter for our underlying business. Profits from property management is up 54% year on year, which is 9% per share year on year, when excluding one-offs, which were in the comparable quarter one year ago. Our earnings capacity is up 8% year on year per share, so 8% up year on year per share. That’s mainly due to accretive acquisitions coming through and also lower financing costs. Back a bit more on what Cibus is: Converting Food into Yield.

We own real estate, which is let to daily goods operators in seven countries. We focus purely on daily goods properties. We’re the only listed vehicle in the Nordics to have this large share of grocery daily goods assets. We’ve been listed since 2018. We grew from Finland. A supermarket portfolio is there, into now a pan-European platform. Our main aim is to create stable cash flows and increase the earnings capacity per share. Market cap is around $1.3 billion at the end of the quarter. This is our fifth year where we pay monthly dividends to our shareholders. We’re told we’re the only listed company in Northern Europe or in the Nordics to do so. Buying the share at yesterday’s share price, we’ve been given approximately 6% annual dividend yield and paid out monthly.

Sticking and looking at our portfolio to the right, you can see that about half of our portfolio is in Finland. We own about 10% of all daily goods real estate in Finland. We grew into Sweden, then into Denmark and Norway, and most recently into the Benelux. Our second largest market is Denmark, and third largest is Belgium. Norway is our second smallest market, but we’ve managed to make an accretive transaction there as well, which we’ll talk about a bit later. Looking at our properties at the end of Q3, just over 640 assets. We’ll increase further in Q4 as we close on some of the deals we’ve already announced. Our property value now EUR 2.5 billion, which is a unique platform in Europe for grocery assets. Looking at our tenants, you’ll recognize many of these household names.

Our tenants are the main daily goods chains in each country. A very well-diversified tenant base. We integrate stable cash flows in all parts of our profit and loss or income statement. Line by line, we try and create stable income by owning assets, which are let at 81% rental income from non-cycled daily goods tenants. 95% of our assets are anchored by daily goods tenants. The average size of our assets is about 2,100 sq m. That is a supermarket-sized, average-sized asset. Being anchored by a grocery tenant means that often it is the only tenant. Maybe there is a smaller tenant, like a flower shop or hairdressers or a tobacco shop or something like that next to the supermarket. Important in growing those stable cash flows is, of course, following the CPIs in each country. 99% of our rental agreements are linked to CPI.

We have a very stable WALT. Yet again, this quarter, it is a steady WALT of 5.8 years. Important on the cost side of things is that we have over 90% of net triple net leases, which helps us from cost increases. Creating stable cash flows is important also to have a high degree of hedging. 95% of our interest rate-bearing debt is hedged. There is full transparency on every single hedge we do in every quarterly report. Diving into the Q3 figures a bit. Looking at the rental income, up 38% year on year. Our NOI up 38% year on year also. Great numbers. Our profit from property management up 54% year on year, as mentioned, excluding the one-off effects in the comparable quarter in 2024. That equates to up 9% per share. Unrealized changes in values, minus 2.9%, which is a number.

Compared to our portfolio of EUR 2.5 billion, that is only about 0.1%. Value reduction unrealized. Our EPRA NRV has increased by EUR 1 per share over the last 12 months. Serving you just some key takeaways of the third quarter. I think the first box up to the left, we have already spoken about. The second box here, earnings capacity per share, which is one of our key metrics. Important to say that we are happy to see that is growing again, the ninth consecutive quarter in a row. Grown 8% year on year, as mentioned, and also 2% quarter on quarter of our earnings capacity per share. EPRA NRV we have already talked about, but also in this quarter, it grew EUR 0.1 per share.

One of the reasons behind the increased earnings capacity per share are the lower financing costs. We are very happy to see that the financing costs are decreasing even further as we grow and we obtain cheaper financing. As seen, our average interest rate is now below 4%, 3.9%. One can compare that to our average valuation yield of 6.4%. The valuation yield is also down from 6.5% to 6.4%. We see bank margins falling. It is our all-time low bank margins, 1.4%. Also our overall average credit margins of banks and bonds has now fallen to 1.8%. That is also all-time low. ICLs are increasing. Our forward-looking net debt to EBITDA is below 10% at now 9.7x. We have not just lowered our financing costs. We’ve also created more stability on the debt side of things by extending our financing maturities.

Debt maturity is now 2.3 years, up from 1.7 last year. Our hedge duration is now 2.8 years. Also, that’s up a full year compared to one year ago. We also use caps. 27% of our hedging is caps. I think that’s a good instrument for us to use, as in this volatile interest rate environment, if interest rates fall, then we can reap the benefits of that. If interest rates were to fall 1% across the board, our financing costs would be reduced by EUR 4 million per annum, all other things being equal. I think that’s a good instrument for us to use in these volatile times. We’re good at leasing. We have the activity in our leasing. We roll our daily goods tenants. We work a lot, of course, with our non-daily goods tenants, those 19% of our rental income, which are not daily goods.

Our occupancy rate has increased in the quarter, even if the third quarter usually isn’t a big letting quarter. Usually, new lettings are done in Q2 and Q4. Happy to see the occupancy rate has continued to grow. The team in our various countries is doing a very good job there. Box number six here, I think that’s one of the most important ones as well, of course, in this quarter. We’ve carried out accretive transactions since the capital raising we did in June 2025. We raised about—exactly—SEK 1 billion in June 2025. Oh, sorry, SEK 1 billion, about EUR 90 million. We’ve now announced deals that that money has been deployed when those deals actually close. Very happy also to show that. We managed to build the strong pipelines. We can deliver on our acquisition pipelines.

Very happy with the team’s work in our seven countries, that we can carry out these transactions in a short period of time. I mean, this was a summer period. In just over four months’ time, we managed to deploy the capital and announce transactions. That’s kind of a repeat from what we did in September 2024, when we raised an amount as well, which took us three months to announce transactions and carry out those accretive transactions. Happy about the growth we’re showing and looking for more. Box number seven here, we grew in Norway this quarter as well. Happy to see that as well. Norway has been a market where it’s been slightly more difficult to grow accretively just because financing costs are slightly higher or higher than other European markets we’re in. Yield spreads haven’t been that attractive.

We’re happy to see that we grow with a sizable portfolio in Norway, 12 assets, which we acquired. I’ll tell you a bit more about that later. There’s a slide on that. I think the key takeaway here is that we added property value, about 60%, and 50% more assets in Norway, so growing there. On the operational side of things, we also opened our first office in Denmark. The reason there being twofold, really. One is, as we grow, it is said that we have one of the largest daily goods real estate portfolios in Denmark. It makes sense, both from a financial perspective and from a tenant awareness and tenant closeness perspective, to have our own boots on the ground. We have opened an office in Denmark. Now we have our own offices in Finland, Sweden, Belgium, and Denmark.

Earnings capacity per share, very important metric for us, as mentioned before, up 8% year on year, ninth consecutive quarter of growth, and up 18% since mid-2023. Happy to see our earnings capacity per share growing. Why is it growing? Top-line indexation growth, important, even if we do not carry out any transactions. As long as CPI is positive, we will be receiving top-line indexation growth under the rental agreements in place. Other drivers of earnings capacity growth, lower bank and bond margins, as mentioned. Then, of course, the transactions of accretive nature. Looking back at our timeline and our expansion, you will see the yellow dots here represent when we have raised capital. Raising capital for acquisitions is an integral part of our business. Smaller acquisitions we can carry out with our own funds.

If we were to do a larger transaction or when we feel that we have built up a strong enough pipeline, we will come to the market to ask for funds in order to carry out these accretive transactions. As mentioned, that is exactly what we have done this time around as well, from June when we raised the money till now in October when we announced that we have carried out those transactions. Happy to see the accretive growth we are delivering. Diving into a bit about the transactions that we have announced, let’s start in Norway. As mentioned, this is a very pure grocery real estate portfolio. It is in northern Norway. We bought it from Arka AS, which is a grocery real estate specialist in Norway, mainly Norway and Denmark now.

I think it is a very interesting and a very accretive transaction and portfolio we managed to get our hands on here. I think the photos here do not do northern Norway justice. It is a beautiful place in the world with the fjords and everything. Those photos do not do justice. People live in northern Norway. It is pretty difficult to get between the various cities and towns up in northern Norway. There are quite a few people living there. In Norway, they have very vibrant rural communities. People wake up hungry also in northern Norway, and they need to go to the supermarkets. So happy to be able to bought this portfolio. The portfolio had nine Rema 1000 assets, which is a discount chain. And it’s a Norwegian discount chain. They’re active in Denmark now as well.

They did carry out a couple of acquisitions of the Aldi portfolio, et cetera, and are growing in Denmark. But they are a Norwegian retailer. Kiwi and Spar belong to Norway’s group. And Brynfris is an independent retailer grocery chain in Norway. Most of the assets were built. Everything was built after 2002, but most were built a lot later than that. So happy to have got our hands on that portfolio and to also grow our Norwegian portfolio. But more importantly, it was an accretive transaction. Then another transaction we recently announced is the buyout of our joint venture partner, or our part owner in the OnePlus company, part-owned company in Belgium. OnePlus was a company which Forum Estates had already set up before Cibus acquired them earlier this year. OnePlus is a company which buys ready-developed grocery assets in Belgium.

Now what we prematurely did was buy out our development partner and got our hands on these five assets, which are then thereby fully consolidated in our accounts from our Q4 accounts. Two Jumbos and a Lidl, and then one store in Mortsen there where there hasn’t been announced which grocery retailer will be opening a store there. But the lease is signed. So happy to get our hands on these assets as well. We continue to trim our portfolio. Converting food into yield is what we do. If it’s not really food, then it’s not really our game or our investment. What we’ve done in this quarter is we have sold three assets. These three happen to be in the Benelux, in Belgium. One in De Panne, which is the picture to the left here. I think this is an interesting also reletting story.

This used to be a Lidl store, which Lidl vacated. Then the team quickly relet that, divided that into two spaces, into an Action, which is a discount store, and also Vibra, which is a non-food discount store. When that was done, we could sell that for a good price. Klitvat in Lanneken is also a non-food discounter. Then we had an odd one out in Ostende, which was a gym, which perhaps doesn’t fully fit the Cibus setup. Those are the non-strategic assets we’ve sold. Following up in our Q2 presentation where we described a case study and how we work with active asset management, we thought we’d bring out some more case studies for you this quarter. Showing you two case studies, this one and on the next slide.

The first case study is in Nantali, in Finland, where we are redeveloping a K-Supermarket, so letter Kesko, to a top market. The story behind this project is that Kesko is moving out to build their own asset just across the street, a larger area of 2,500 sq m. The store they are building here is a bigger store, and they are then leaving our asset. We have immediately relet it even before Kesko has left the premises, let it to Tokmanni, and we are now redeveloping it for Tokmanni, signing a new 10-year lease. I think it is an excellent reletting story of how we actively can go from one daily goods player to another. The second case study we are showing is also in Finland. In this case, Kesko and we together are redeveloping this K-Supermarket in Ii in Finland, close to Oulu in northern Finland.

This resembles the case study we had in last quarter in Kuopio, where we together with Kesko doubled the store size in Kuopio. Here, we are doing more or less the same thing. This K-Market is being redeveloped into a larger K-Supermarket. Together with Kesko, we have acquired the neighboring sites. We have been building a new building on the extended site, and when the new store is finished and open, we will close the old store and demolish that building and make it into a larger parking because parking is very important in our business, in all of our markets, because most of the traffic, some of the traffic is car-driven. Good attractive yields, both yield on cost and IRR. I think this shows also our commitment to our core tenants and our property development skills. Pia-Lena, over to you. Thank you.

I think Christian has covered all the significant events during the quarter already, except for the update of the MPM program that we do every year. I think we will flip to the next slide. After the period, we have made two taps on our loan 108 bond amounting to EUR 20 million and EUR 10 million, respectively. As Christian mentioned, we have acquired the remaining shares of OnePlus, which will henceforth be consolidated into Cibus as a subsidiary. Additionally, we have initiated a new joint venture, 2Plus, which will be owned 50/50 together with TS33, and 2Plus will be consolidated as a subsidiary from start. Looking at the P&L, we have no non-recurring items in the third quarter. We see the impact of the lower credit margins reflected in our finance expenses. Profit from property management was EUR 21.8 million.

Unrealized changes in property value amounted to EUR 2.9 million, and all countries, with the exception of Finland, show increasing unrealized property values. The values in Finland declined due to the changes in the values letting assumptions in their models. The average initial valuation yield on the portfolio as a whole fell during the third quarter from 6.5% to 6.4%. Looking at the earnings capacity, rental income has increased as a result of acquisitions. Property expenses have increased due to acquisitions as well. We also have a positive impact by the divestments that we’ve made. Administration expenses have increased due to the acquisitions and also the additional new personnel. Profit from property management increased with EUR 2 per share since the last quarter to EUR 1.07 per share.

We have calculated on the new number of shares after the share issue in June, but also included the assets that we take in possession of until the 15th of October, since the share issue funds were used for those acquisitions. Looking at the net operating income in a comparable portfolio, the negative impact from the change in occupancy amounted to EUR 1.6 million. However, three properties amounting to EUR 0.6 million were assets where Cibus, in agreement with the tenants, has terminated the lease early to enable development of the property. The Nantali asset mentioned earlier by Christian being one example. The effect of indexation amounted to EUR 1.5 million or 1.3%. CPI, particularly in Finland, remains low. The effect of acquired and sold properties increased NOI by 44%. In total, the NOI in the earnings capacity increased with 43.4% to EUR 165 million.

Cibus segments its countries, and Finland remains the largest segment, contributing with 50% of the NOI. Denmark, followed by Belgium, each account for 15% of the NOI. Looking at the balance sheet, property value amounts to EUR 2.5 billion. Secured debt totaled EUR 1.2 billion, resulting in a loan-to-value of 49.8% for secured debt. In addition to this, Cibus has unsecured bonds of EUR 243 million, but also holds some funds from the share issue in June under other assets, bringing the total LTV ratio to 56.1%. The EPRA NRV was EUR 12.9 per share at the end of the third quarter. The WALT remains to be very stable, as you see in the graph below, and was 5.8 years excluding the Belgian termination rights. With the termination rights, it was 4.3 years. 82% of total funding consists of bank financing.

The average bank margin decreased by 0.2 percentage points to 1.4% in the third quarter, compared with 1.6% in Q3 2024. The average capital maturity extended to 2.3 years from 1.7 years last year. Subordinated loans of EUR 12.2 million from the former owners of Forum Estates were called and then repaid on the 12th of September 2025, using the funds from the directed share issue in June. The subordinated loans are no longer part of Cibus funding sources. Cibus is currently 95% hedged with an average fixed interest maturity of 2.8 years. All else being equal, the hedging ratio is expected to increase to 97% in the fourth quarter. Interest rate sensitivity shows that the reduction in market interest rates has a greater impact on earnings than the increases, as a large part of Cibus hedges are interest rate caps.

One percentage point increase in market rate would then affect earnings by EUR 0.6 million, while a decrease would affect EUR 4 million annually. Net LTV stood at 56.1% at the end of the third quarter. The funds from the share issue in June are temporarily reducing the net LTV and are expected to increase again, back to the Q1 2025 levels once all the funds have been deployed. The interest coverage ratio increased to 2.4 times. The net debt to EBITDA was 10.7 times. As acquisitions are debt immediately, while the EBITDA is built over time, we focus on the forward-looking ratio, which was 9.7 times. Cibus generates stable cash flow, enabling monthly dividend payments to our shareholders. Based on the closing price of EUR 169.55 per share, the dividend yield was 5.9%.

Cibus is a liquid share, trading 1.6 times its market capitalization, which is more than 68% above the average for other real estate companies, with a market capitalization exceeding EUR 10 billion at Nasdaq Stockholm. Cibus continues to enjoy strong support from its shareholders, many who have been with us and invested in Cibus for several years. The total number of shareholders keeps growing, now reaching 59,000. Over to you, Christian. Thank you, Pia-Lena. Thank you for that run-through. Moving on to the future. First, looking at ESG, what are we up to there? I mean, despite what is happening in the world with Omnibus, etc., ESG is a very, very important part of our business. We are voluntarily reporting CSR according to the CSRD framework already in 2024, and we are planning to continue to do so.

I think what is very important just to lift out here on the ESG side of things is in the E, 49% of our assets are taxonomy-aligned, and also almost 80% of our tenants are sustainable tenants according to the SBTI framework. As they are consumer-facing consumer goods companies, ESG is very important for them as well. Highlighting here in this quarter also is that as we purchase some of our energy for our tenants, 96% of our purchases are fossil fuel energy. Of course, a very high number, and that has helped us achieve our SBTI targets already in 2024 in scope one and two. How are we working on it on a daily basis? We are installing solar panels where we can together with our tenants. We are adding EV charging everywhere we can as well. There is a big rollout of that happening.

Also, we are looking into more renewable heating sources. We are trying to move away from natural gas, for example, and instead going toward district heating or geothermal heat pumps. A lot of work to be done there. The S is very important in our asset class as well. This is social infrastructure. People go to the supermarket not just to buy food, but in many places to interact with people. It is a meeting place. It is somewhere to buy food, get fed, but also to meet people. But also, it’s a very important part in social infrastructure when building a resilient society. Due to the geopolitical turmoil in Europe right now, this is, of course, much, much higher up on the agenda for governments and the population of Europe.

I know I’ve been talking to you before about what the Finnish government and the retail chains are doing, grocery chains in Finland, where they’re setting up a network of preparedness stores. So 150 stores spread out over Finland, which will be self-sufficient on electricity. It’ll be a place to come and get information, food, fuel, charge your phone, etc. The Finns are really moving ahead on that side of things. Now the Norwegians and the Danes are coming up with the same kind of setup. A retail chain in Norway and in Denmark, they’ve said 100 stores and 50 stores respectively, which will be the same kind of preparedness stores, which are supposed to be self-sufficient for a number of days, both from electricity but also from supply chain disruptions. There’s a lot happening on that side of things for our asset class.

I think that’s a very natural development. We’ll see what happens in our other markets. Sweden seems to be lagging a bit behind, even if media is picking up a lot on that, of what is actually being done by Swedish preparedness. Moving forward for Cibus, what are we focusing on? Six main points. One, continue to grow our earnings capacity per share in all parts of the business. I think that resonates with what we’ve been saying before. Let’s continue to do what we’ve been doing. Two, continue to consolidate this asset type and asset class across our pan-European specialist platform. We’re sticking to doing converting food into yield, but doing it in seven countries and looking at other continental European markets as well. Continue to work on our balance sheet, optimizing that, refinancing and hedging as we’ve done.

Number four, carrying out those CPS accretive transactions just as we’ve done previously, executing opportunities in existing markets and others, and looking at other mainland European markets, as mentioned. When it comes to the organization and team, we have a competent and experienced set of employees. We work pan-European across our business. We have a focus on slightly more in-housing, where it makes financial sense and/or sense to become a bit closer to our tenants. Importantly as well, number six here, we’re committed to deliver shareholder value by continuing to convert food into yield and grow our earnings per share. That was the last slide for us, and moving to the Q&A. If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad.

The next question comes from Oscar Lindquist from ABG Sundal Collier. Please go ahead. Good morning. Morning. Firstly, on the OnePlus acquisition, I understand it’s 64% grocery. Will you be looking to sort of refine that exposure, or are you happy with that? Yes. No, I think that’s a fair assumption. One of the five assets we bought is a gym, a Basic Fit gym, which doesn’t really fit in our strategy long term, but it’s a very nice asset, and we’re happy to have bought it and consolidate that for now. Good. Also on the new JV 2Plus, can we get a sense of project pipeline and potential going forward? Yeah. I think what’s important here is that we work with a skilled developer who is hungry to deliver assets to the joint venture, where the developer also owns 50%.

We’re hoping that they can establish a very attractive pipeline and assets for us to jointly buy and hold in 2Plus. We have the right of first refusal for any retail developments that this developer carries out in Belgium. Let’s hope for some very interesting volumes in 2Plus going forward. What do they have ongoing now and/or planned to start in the near term? Yeah. They have ongoing plans, for sure. I mean, as a developer, it’s pretty long timelines to get projects out of the ground, just as we know across the Nordic countries to get planning permissions, etc. They’re actively working on an interesting pipeline. I think one could assume that we find the pipeline interesting. That’s why we’re entering into a new joint venture with them. Yep. Yes. Okay.

On sort of activity in the transaction market and pricing, could you give some color to where you see. Have you seen any sort of material yield compression, or which markets are you looking more closely on? Yeah. Sure. No, I think it’s fair to say that we are seeing yield compression also in our valuation, but also in the market. I think it’s fair to say that perhaps valuations are lagging behind market developments. That’s what usually happens when markets turn. I think it’s fair to say in our asset class, it has turned. We see now that competition has been quite high in Sweden for quite some time, as you’ve heard me say before. Lots of institutional players in Sweden chasing our asset class, other listed players, private equity. A lot of investors have realized the stability and the attractiveness of the asset class, especially in Sweden.

Now I think it’s fair to say that that’s trickled over to Finland. We see both Prisma Properties and Valdo buying in Finland instead of in Sweden. I think that over time makes more competition. Over time, that should mean that yields go down as interest increases. It also means that perhaps supply will increase because. Good pricing and good processes tend to bring out more sellers to the market as well. A bit more competition in Finland. High competition in Sweden. In Norway, yields and accretive transactions have been a bit difficult to carry out. I think we’re very happy to have done that. In Norway, I hope to grow more there as well. Denmark’s been a liquid transaction market throughout 2022, 2023 as well. Lower financing costs due to the reality of the mortgage bond system there in Denmark, but lower yields as well. Interesting portfolios.

In the Benelux, we have a great local platform. With local people and economies of scale, adding even more assets. They’re very close to the market and delivering a very interesting pipeline for us, also since the acquisition. I think that’s something we should talk a bit more about, is that the Forum Estates platform is not just a great deal for Cibus shareholders and for the Forum Estates shareholders, but it’s also a future potential pipeline of nice assets in the Benelux region. We’re looking at other markets in mainland Europe as the only company trading at a premium to net asset value owning these types of assets across Europe. This, of course, gives us opportunity. Okay. Good. Finally, on the negative value changes in Finland, were they attributable to the redevelopments you mentioned in the report, or what are the drivers here?

I understand the value has taken new assumptions on long-term occupancy in the quarter. Yes. That’s right. I think this is—let’s take one step back. We value all of our assets externally every quarter. 100% of our assets every single quarter. Not everyone does that, of course. We do that. We like the transparency it means. What’s happened in Finland is we see for certain assets, yields have compressed. In other assets, we see that there’s been slight change in occupancy assumptions. Also, of course, when a quarter passes, then if market rents have changed or occupancy or assumptions have changed, then that day comes a bit closer. That said, it’s difficult to say what’s going to happen in the next quarter. This is all—it’s what the value assumptions are changing. Looking at it, it’s a very small number. It’s EUR 3 million at a portfolio of EUR 2.5 billion.

Yes, it is a number, but it’s a very small number. Okay. Yes. On letting activity, how would you say that it’s progressing? Do you see any themes in tenants that are struggling, particularly, or expanding? No. I think—I mean, letting activity, it’s not a very big thing in our business. 81% of our rental income is from daily goods and grocery tenants. What usually happens is the rental agreements roll on. Where we need to do a lot of work is mostly in our non-grocery tenants. There it can be in discounters who are moving, etc., etc., and durable goods, etc., where there is a lot more competition and some of them are more in a tougher space. That is why we are staying to the converting food into yield space of things.

In general, I would not say there is a trend across our markets for any tenants performing badly or in general. I mean, we own very little sporting goods, for example, which has been under pressure for a number of years. We do not own much. We do not have any Plantagen or anything like that, which is a chain that has been struggling in Sweden. I would say it is a natural churn in our non-grocery tenants. That is what is driving some of the letting activity. Thank you. Thanks for taking my questions. Thank you. The next question comes from Victor Hockenhammer from Pareto Securities. Please go ahead. Hi. Good morning. Thanks for a good presentation and great to see us mention the increase in both earnings capacity per share and occupancy.

I have a question starting with investments in existing properties that have increased somewhat, both quarter to quarter and also compared to Q1. I understand that it is both given the mentioned redevelopments and ongoing portfolio growth, but they are also up as a percentage or share of your total portfolio value. Do you have any guidance for Q4 and 2026, either in absolute terms or relative to your portfolio size? Yeah. I mean, yes. We have invested in our properties. Of course, then EUR 2 million of those are tenants’ improvements, which give yield in line with the existing portfolio. Also, we have property development that is also driving some of these investments. Compared to the portfolio size, it is quite a small number in that sense.

Of course, we are more active, you could say, in also the property development and TEIs with our tenants to be able to do prolonged agreements and do these new lettings, so to say. We have not guided on the size of the investments for the year as a whole, but it is not large numbers, so to say, for portfolio on our side. Okay. Perfect. That is very clear. Then a question on M&A. Could you comment on whether you looked at the Coop transaction that MP3 completed a few months ago and why you chose to buy it? Sure. I think it would be fair to assume that any grocery portfolio in our current markets that are moving, we will look at.

I think the takeaway from that transaction is that it is very interesting to see that another listed player, MP3, which is not really focused on retail in that sense, decided to buy that portfolio. Great to see that others have understood the attractiveness of the cash flows of grocery and also the future of Coop. I mean, there has been a lot of media coverage about. What is the future of co-op. I think it’s interesting to see that there’s other skilled listed players who know what they’re doing, who are actively investing in the asset class, also with 100% or close to 100% of co-op. Coop Sweden. That’s clear. I agree. You were talking more in the market. Do you expect the deal activity now in Q4 to increase, both in the Nordics and the Benelux region, compared to Q3? In general? Did you hear that?

The acquisition activity is to increase. Generally in the market. I think that Q— Sorry, Victor? Yeah. Sorry. Go ahead. Yeah. I think generally in the property transaction market, Q2 and Q4 are quarters where there’s a lot of action. Before midsummer, before Christmas. That’s when people want to get things done. Just based on that and the increased attractiveness for our asset class, I think it wouldn’t be a surprise if transaction volumes do increase in general in the market. Yep. A follow-up from Oscar’s questions. The 2Plus joint venture, do you expect that to contribute anything to your earnings over the next 12 months, or should we more view it as a new long-term earnings contributor? I think that’s not something we’re communicating. As and when and if 2Plus does its first transaction, we will let you know. Okay. Perfect.

Lastly, as mentioned, you focus on your current markets, and you also mentioned that you’re actively evaluating opportunities in mainland Europe. What would you say in the next 18 months? Will you stay in your seven markets, or have you entered new ones? We’re actively looking at markets, new markets, just as we did. We’re actively looking at mainland Europe when we did the Benelux transaction. When and if the right platform comes along with the right deal metrics and it’s accretive for our shareholders, then we’re happy to transact on that. There are interesting markets in Europe for our asset class. People wake up hungry every morning all across Europe as well, just as they do in the Nordics and the Benelux. There’s plenty of interesting markets, plenty of interesting grocery chains. It’s the same kind of dynamics as we’re used to from our markets in mainland Europe.

We’re actively looking at mainland Europe. Okay. Perfect. Sounds good. Those are my questions. Thanks. Thank you. The next question comes from Svante Krogfors from Nordia. Please go ahead. Yeah. Thank you, Christian and Pia-Lena. Good morning. Good morning. A couple of questions left. Most have been already answered. Could you repeat the occupancy rate improvement quarter on quarter was quite significant. Was it seasonality only, or was there something else? Yeah. The occupation rate, 96.1%. Of course. It’s of course due to some of the new lettings that we have and some seasonality. Usually, it is the new lettings that we’ve been able to do. And also the composition with new acquisitions coming in with higher occupancy, I would say. Thank you. And regarding your M&A firepower, you had added EUR 91 million in the share issue and now have acquired over EUR 180 million after that.

What’s your own opinion about how much M&A firepower you have left? We’ve acquired for about EUR 173 million since the share issue, but we’ve also repaid the subordinated loans of EUR 12.2 million. And everything we’ve done there has been accretive. Just looking at the numbers, then one could say that more or less that money is now earmarked and announced for transactions. That’s clear. Last question regarding Norway. Will you continue to make further acquisitions there, given the interest rate environment in Norway? Yes. I hope so. I think that we’ve shown that we can carry out an accretive larger transaction in Norway. What usually happens is that when you reactivate yourself in a market like we’ve done here, we did buy one asset outside Stavanger last year. This is a big media thing in Norway. It’s a pretty big transaction.

Hopefully, that will bring out a number of interesting sellers who will realize that we are active in the market and we pay good prices. Hopefully, that will lead to more transactions in Norway going forward as well. Happy to grow that market as well. Okay. The last one regarding, we discussed the Prisma in Tuusula, Finland, and potentially that S Group could be interested in that one. You haven’t received any bids on Prisma in Tuusula? It’s still being built. I’m a very happy owner of it, or to be an owner when time comes. This is a Prisma hypermarket, not to be confused with Prisma properties, of course. This is a Prisma hypermarket owned by S Group, which is co-op in Finland. Very, very financially strong tenant who love to own their own assets. I think that’s what Svante is implying. Yeah. Okay. Thanks a lot.

That’s all from me. Thank you. The next question comes from John Vong from Van Lantschot Kempen. Please go ahead. Hi. Good morning. I still have a follow-up question on the 2Plus JV. What size are you targeting for the vehicle? Also on the Rover, on all the Belgian retail projects, how does it exactly work? Are you sharing in the development risk and profits, or are you acquiring there at market yields? Sure. The 2Plus is a joint venture. The OnePlus, we owned 31% and the developer 69%. Now it’s 50/50. The way the structure works is that we have the right of first refusal to say yes or no to any ready-developed retail assets that the developer develops in Belgium.

If we feel that the grocery boiling, among other things, but it’s very important is that the grocery share is large because that’s our converting food into yield strategy. So that’s one of the key points, of course. And then, of course, it needs to be an attractive asset, a stable tenant. Good rental levels so it’s not over-rented or it could be under-rented. That’s always nice to be able to raise rents at some higher levels sometime in the future, but as long as it’s not over-rented. I think that’s kind of the parameters we would look at as and when the developer were to present any projects for us. So to understand it correctly, these are assets that are already finished, so you’re not taking any development risk here? No, no. We’re not taking any development risk.

In some cases, we may decide to forward fund parts of the development costs, for example, land acquisition prices or something similar like that. But the way the structure works, we don’t take any development risk. Okay. Clear. Thank you. And just on the activity in the transaction market, like you said, Q4 is generally a bit more active. To ask it differently, how do you see your share of the transaction activity compared to previous quarters in Q4? That’s a good question. We haven’t really spent much time on or thinking about our share. It’s not like we’re—that is not a key number for us. What’s important for us is that it’s accretive transactions and that we’re buying at good levels. We are not the party who’s going to be pressing down yields in any market just because we can.

If it were to be that our financing costs continue to fall massively, we’ve seen plenty of other companies make that mistake in the past where financing costs go down and people get a bit overexaggerated and start pushing yields down to under long-term sustainable levels. That’s not us. We’re growing steadily and conservatively and disciplined within our converting food into yield strategy. I would say I’d be surprised if we do 100% of everything in a market, that would be too much. That means we’re probably overpaying and overpriced. So I’m happy to see that there’s other players in there as well and fighting for us for attractive assets. Okay. That’s clear. Thank you. And just last one on internalization. So you said that you opened an office in Denmark and you’re focusing on more in-housing. I’m just trying to understand the financial impact here.

What do you expect the impact is on your margins, both in the short and the long term? Yeah. I mean, we have not guided on that. But of course, we are doing the insourcing here because we believe that we will get long-term advantages on cost, but also becoming closer, even closer to tenants, getting advantages of that as well. So it’s not only cost-driven, but in the short term, perhaps not that much, but in the longer term, we might see a cost reduction due to this insourcing. Okay. Thank you. That’s it from my side. Thank you. The next question comes from Stephanie Dossman from Jefferies. Please go ahead. Hello. Good morning. Most of my questions have been answered, but maybe a follow-up on asset value changes in Finland. You said it was much related to occupancy, but do appraisers also assume lower rental growth?

I mean, it would be interesting to see the yield impact compared to the rental impact. Maybe that would be my first question I have for once, please. I mean, the value is a number of, in talking general terms, there’s a number of assumptions which build up the value. One is, of course, future rental values, market rental values going forward, indexation growth, lower index would mean lower market values in the future. Occupancy rates going forward, long-term vacancy rates. There’s a number of parameters that go into their cash flow modeling, of course. In this case, it happens to be that—and we call that as a general term—occupancy assumptions. There’s a little bit of each in there, I would say. All right. My second question is regarding the yield on cost on your projects. I mean, you have shown a couple of redevelopment examples.

What do you call an attractive yield on cost on redevelopment? Could you tell us a bit about the rental at least achieved, for instance? Sure. Sure. We’re not disclosing anything on the actual numbers for commercial reasons. We only have a handful of tenants who we negotiate with every single project, so we wouldn’t want to give away too much information to them from a bargaining power perspective. One could say if you compare to another listed company, Prisma Properties, they are claiming that when they do development, they achieve a yield on cost of, is it 7% or 8%, I think they’ve been saying, which works well for them, if that’s some kind of guidance for you, what the market is like. Okay. Thank you. Maybe another question on the acquisitions. You don’t disclose yields on acquisition on a case-by-case basis anymore.

Could you please give some more colors, I would say, on that, at least on average for the acquisitions realized in the year to date, excluding Forum Estates, by the way? Yeah. Yeah. No, I think we don’t disclose any yields on an asset-by-asset level because of the same competitive reasons. The way we try and calculate is that we want an attractive yield spread over our financing costs in the local market, including our dividend yield. We try and do a weighted average cost of capital for every market where we finance ourselves locally and with potentially a bond on top as well in euro or SEK. Then we try and find yield levels which create an attractive yield spread.

That is how we kind of calculate what is an attractive deal or not, or one of the parameters that how we calculate what is an attractive yield or not so we can compare different countries to each other. An internal competition for which country can provide the best yield spreads and accretive transactions for our shareholders. All right. Thank you. You mean that for future acquisitions, you will target a spread over financing costs, right? Would it be something like 200 basis points or 250? I think your target was close to 6.5% in the past. I was just wondering how much it has changed. No, we are not disclosing any what we find interesting yield spreads. All right. Thank you so much. The next question comes from Oscar Lindquist from ABG Sundal Collier. Please go ahead. Yes. Hi. I had a couple of follow-up questions on financing.

You mentioned bank margins down to 140 basis points on average now. Could you give an indication of where you receive margins in new debt and refinancing? I mean, we have guided that we have refinanced additional bank loans in the fourth quarter, receiving then 0.3 percentage points lower margin on those EUR 33.3 million. We do see a lot of—so that is a 110 basis point margin then? No, no, no, no, no. No, of course. Since we are refinancing old bank loans, then of course they have higher margins than the average margin. Absolutely. It is not down to that. I would say in line with the average margin. We do see a lot of interest by the banks to refinance and to be part of Cibus’ growth journey and are receiving attractive financing from them.

In discussions with the banks, have they changed anything in terms of loan-to-value ratios or something like that? Are they more able to increase LTV ranges? We have different discussions. For us as a cash-driven company, of course, we could go up in LTV with the banks. They are happy to do that. There is always a discussion regarding amortization. We prefer bullet loans in bank financing. We have different discussions with the banks, but nothing more than that I can disclose now. Just as an additional point to that, I have been financing these types of assets previously in my previous career as well since early 2010-ish. LTVs are pretty stable.

50-60% for these kinds of stable assets has been where the banks like to operate. It is stable income. It is stable tenants. It is non-cyclical. It is social infrastructure. It is well-diversified portfolios. It is a great asset class for banks to finance in general. I think competition between banks is heating up, as PM mentioned. Yes. You received quite favorable terms on the bond market as well. Are you looking to increase that mix of financing? We’re quite happy with the mix that we have now. We’re happy to have the combination of both bank and bond financing. That is something we want to have also going forward. For the midterm, bank financing will be the absolutely largest part of our financing since we are getting attractive terms there. Perfect. Thanks. There are no more questions at this time.

I hand the conference back to the speakers for any closing comments. We’ve received a written question, which is, "Can shareholders look forward to higher dividends per share in 2026?" That is a question which is above our heads. That is a question for the board and ultimately a vote at the annual general meeting, upcoming in April. That said, thank you for calling in and listening to our Q3 presentation. Have a great day, everybody. Thank you. Thanks. Bye.

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