The group, which manages just over SEK18 billion (€1.82 billion)of office and retail property in central locations of Stockholm andGothenburg, is to recommend an increase in the ordinary dividend toSEK2.10 per share from SEK1.90 last year. It reported an operatingresult before changes in value of SEK915 million (€92.7 million),mainly attributable to higher rents and lower maintenance costs.Though the portfolio depreciation, lower than the nearly 9% in2008, pushed it into loss, the net result was also stronglysupported by a sharp decrease in taxation – to just SEK121 millionas against SEK576 million for 2008.

Hufvudstaden Head of Finance and board member Magnus Jacobsontold PIE that the prospects for 2010 are quite positive: "There aretwo components for 2010: In yields, we believe they have increasedthrough 2008 and 2009 and that we are at the top of the levels now.The other component is rents and there we think we are at or closeto the bottom and there is not that much left for furtherdecreases... We don't see another loss for 2010. If you take awaythose value changes the most likely outcome is a return to profitthis year."

Hufvudstaden has net asset value per share of around SEK62 atthe end of 2009, and the stock is currently trading on the exchangeat around SEK55, around an 11% discount. The end-2008 NAV had beenSEK66. At end-2009, the average yield across the portfolio was5.3%, while the rental vacancy level rose to 6.2% from 5.3% atend-2008. Its equity ratio at end-December was little changed at55%, and the net loan-to-value ratio also unaltered at 16%.

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