Note 4 Costs

Direct property costs totalled MSEK 1,170 (1,235), corresponding to SEK 279 per square metre (292). Costs include both direct property costs (such as operation, maintenance, site leasehold fee and property tax) and indirect costs (lettings and property administration expenses). In addition, expenses for co-working of MSEK 120 (99) are included.

Cost trend, MSEK

 

2020

 

2019

 

Change, %

Like-for-like portfolio

 

1,048

 

1,119

 

–6.3%

Development properties

 

61

 

51

 

Transactions

 

61

 

65

 

Direct property costs

 

1,170

 

1,235

 

–5.3%

Co-working

 

120

 

99

 

Property administration

 

379

 

374

 

Central administration expenses

 

149

 

163

 

Costs

 

1,818

 

1,871

 

–2.8%

Operating costs

Operating costs include costs such as electricity, heating, water, facilities management, cleaning, insurance, rent losses and property-specific marketing costs. Most costs are recharged to the customers as supplements to rent. For warehouse and logistics properties, however, customers are in most cases directly responsible for the majority of operating costs. Operating costs amounted to MSEK 654 (711) corresponding to SEK 155 per square metre (166). Operating costs, which are considered to be at a normal level for the business, are weather dependent, and vary between years and seasons. Operating costs include rent losses of MSEK 19 (13), corresponding to 0.0% of rental income.

Maintenance

Maintenance costs are ongoing measures to maintain the property’s standard and technical systems. Maintenance costs totalled MSEK 145 (157), corresponding to SEK 38 per square metre (38).

Property tax

The Group’s property tax was MSEK 371 (367), corresponding to SEK 86 per square metre (88). Property tax is a federal tax based on the property’s tax-assessed value. The tax rate for 2020 was 1.0% of the tax assessment value for office/retail properties and 0.5% for warehouse/logistics. A large part of the property tax will be charged onward to the customer.

Lettings and property administration expenses

The Group’s lettings and property administration expenses 2020 were MSEK 379 (374), corresponding to SEK 90 per square metre (92). Lettings and property administration expenses are indirect costs for routine property management, as well as costs for leasing operations, rent negotiation, leases, and rent debiting and collecting as well as accounting and project administration costs, and costs for depreciation on equipment and installations at subsidiaries. Of those costs, MSEK 220 (202) pertained to employee benefits and MSEK 21 (12) to depreciation on equipment.

Summary property costs

Property costs per square metre, distributed by property category and type of cost are shown below.

 

 

Offices

 

Public sector properties

 

Warehouse/Logistics

Property costs, SEK/sq. m.

 

2020

 

2019

 

2020

 

2019

 

2020

 

2019

Operating costs

 

208

 

217

 

173

 

185

 

93

 

102

Maintenance expenses

 

56

 

49

 

35

 

42

 

18

 

23

Property tax

 

130

 

135

 

112

 

106

 

28

 

29

Direct property costs

 

394

 

401

 

320

 

333

 

139

 

154

 

 

Retail

 

Light industry

 

Total

Property costs, SEK/sq. m.

 

2020

 

2019

 

2020

 

2019

 

2020

 

2019

Operating costs

 

134

 

149

 

98

 

113

 

155

 

166

Maintenance expenses

 

32

 

30

 

25

 

29

 

38

 

38

Property tax

 

75

 

73

 

27

 

28

 

86

 

88

Direct property costs

 

241

 

252

 

150

 

170

 

279

 

292

Lettings /property administration expenses

 

 

 

 

 

 

 

 

 

90

 

92

Total

 

241

 

252

 

150

 

170

 

369

 

384

Central administrative expenses

Central administrative expenses consist of costs for portfolio management and administration as well as costs for maintaining the Stock Exchange listing. This involves all costs for Castellum AB covering Executive Management, the finance and accounting department, IT, staff, investor relations, annual report, audit fees, depreciation of equipment and facilities, and so on. Costs for the CEO at the regional level are also included. Of the costs, excluding the incentive plan described below, MSEK 79 (80) pertains to remuneration to employees and MSEK 13 (11) to depreciation on equipment.

Central administrative expenses also include costs relating to an earnings and share price-related incentive plan for Executive Management amounting to MSEK 14 (10).

Auditors’ fees

 

 

Group

 

Parent Company

Auditors’ fees

 

2020

 

2019

 

2020

 

2019

Audit assignment

 

5

 

3

 

1

 

1

Audit in addition to the audit assignment

 

2

 

1

 

0

 

1

Other services

 

0

 

0

 

0

 

1

Total

 

7

 

4

 

1

 

3

The Group’s total remuneration to auditors of KSEK 7,035 (4,431) refers to all remuneration to Deloitte.