Profit as expected in a stable property market

Profit as expected in a stable property market

• As a result of the transaction with AP3, net sales reduced by 15 per cent to
SEK 2,602 (3,060) m and gross profit decreased by 8 per cent to SEK 1,817
(1,982) m.
• Net sales fell by 26 per cent to SEK 571 (771) m, and gross profit by 29 per
cent to SEK 355 (501) m due to the previous year's transaction with AP3 and
increased costs relating to the severe winter.
• Profit before tax was SEK 36 (-79) m. Profit after tax was SEK 58 (-67) m,
equivalent to SEK 0.40 (-0.50) per share.
• As of 31 March 2010, the property portfolio comprised 556 (585) properties
with a book value of SEK 21,239 (21,861) m.
• No properties were acquired. 30 (6) properties were divested for SEK 602 (222)
m, generating a profit of SEK 3 (11) m. These divestments affected profit for
calculating dividends by SEK 28 (61) m.
• Profit for calculating dividends for the interim period was SEK 126 (223) m,
equivalent to SEK 0.90 (1.60) per share.
• The forecast for the full year 2010 profit for calculating dividends remains
at SEK 600 m, or SEK 4.40 per share.

“Our profits for the first quarter were consistent with our expectations and our
estimate of profit for calculating dividends. The year-on-year profit change is
mainly due to the Hemsö transaction with the Swedish Third Pension Insurance
Fund (AP3 ), and increased costs, mainly for heating and property care, of
approximately SEK 25 m, due to the severe winter.

Trading net for the quarter was SEK 3 m, after actions including the completion
of our transaction with Corem Property Group. We also had a positive tax effect
of just over SEK 30 m, after divesting properties without deducting for deferred
tax. Administration costs continued to reduce in the quarter. The reduced net
financial position was mainly a consequence of lower loan volumes after the sale
to AP3. The book value of our portfolio was adjusted upwards by SEK 12 m in the
quarter.

Vacancies rose slightly early in the year. Kungsleden has a somewhat
late-cyclical operation, and in 2010, we do expect some increase in vacancies.
Nordic Modular's sales were lower than the previous year, while its gross profit
was positive. After the adaptations to production completed in 2008-2009,
production costs were down by over 40 per cent. The clear trend improvement on
the transaction market sustained. According to Jones Lang Lasalle, transaction
volumes were over SEK 18 bn in the first quarter. Kungsleden divested a total of
about 30 properties for just over SEK 600 m. We are now observing that there are
opportunities to do good deals once again. Notably, the market for public
properties is attracting new players. It has become easier to secure short-term
credit, which is contributing to a more upbeat market outlook, while however,
long-term funding is still harder to arrange. It is important for Kungsleden to
maintain optimal funding as far as possible, for the long and short term.

At the end of the first quarter, the Swedish Tax Agency initiated additional
proceedings regarding property divestments conducted, although no regulatory
decision has been reached. Back in 2009, we provisioned SEK 325 m relating to
these tax proceedings. Our judgment is that the total liquidity effect of these
tax proceedings will not exceed SEK 300 m assuming a potential negative outcome.
Our view remains that we have complied with applicable laws and regulations.

Kungsleden was also recognised as one of Sweden's best workplaces in the Great
Place to Work survey, involving 80 companies. Kungsleden secured a top four
place of the medium-sized companies, and was the best of the property companies.
These results are very pleasing, because in recent years, Kungsleden has worked
consciously to strengthen its internal corporate culture.

We will continue to work on arranging cost-efficient long-term funding, so we
can exploit the attractive deal opportunities that we expect to arise. With
stable counterparties, long contracts and continued goal-oriented work
addressing our customers, we will be able to deal with expected modest increases
in vacancies from low levels.”

Thomas Erséus
Chief Executive

For more information, please contact:
Thomas Erséus, CEO Kungsleden,
phone +46 8 503 052 04 | mobile +46 70 378 20 24
Johan Risberg, Deputy CEO Kungsleden,
phone +46 8 503 052 06 | mobile +46 70 690 65 65

Kungsleden AB (publ) discloses the information in this press release according
to the Swedish Securities Markets Act and/or the Swedish Financial Trading Act.
The information was provided for public release on 1 March 2010 at 11.30 a.m.

Detta pressmeddelande finns tillgängligt på svenska på www.kungsleden.se

Kungsleden's strategy is to ensure sustainable high and stable returns
proceeding from its existing holding, and through acquisitions and divestments.
As of 31 March 2010, the property portfolio comprised 556 properties with a book
value of SEK 21.2 bn. The holding was located in a total of 129 municipalities,
although concentrated on the Swedish provinces of Götaland and Svealand, and the
Öresund region. Kungsleden has been quoted on the Nasdaq OMX Stockholm since
1999.