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.

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.

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

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