Wallenstam interim report 1 January – 31 March 2026. Welcome to Wallenstam and the first quarter of 2026. We're on location in Årstaberg in Stockholm and shooting our film at this fantastic project. As you can see, construction is in full swing behind me. Just under 100 apartments are ready for occupancy before the summer and just over 100 apartments after the summer. The first 100 have already been leased and the next 100 are in the process of being leased. Demand is huge. When we were opening our show home for viewing we had 3,000 people registered to see this fantastic project and a show home. We're very proud of this project which in total includes 409 apartments. They will be fantastic high-quality residential properties in central Stockholm.
But now we're going to talk about the results, so join us in the show apartment. Welcome to our show apartment in Årstaberg. A fantastic and well-designed apartment with a lovely kitchen and bathroom.
But I want to again mention the current turmoil all over the world. There's war almost everywhere which is awful. People are dying and so many are affected. The big thing that affects the economy is the war between Iran, Israel and the US. It affects transport and energy in a way that impacts the whole world economy. But we can't do anything about that, we need to focus on what we can influence.
What is clear in these unsettled times is that interest rates are very volatile, up and down with big changes. We've been working on that by extending through new derivatives, Susann. Our single biggest expense is interest so there's obviously great focus on that. We've continued extending our fixed interest terms so we've hedged the interest rates for two thirds of our liabilities. You could say our interest rate hedging is spread evenly over nine years with about 2–2.5 billion maturing each year. This means we have an average fixed interest term of 3.5 years. At the end of this quarter our average interest rate is 2.43% which is 4 points higher than at the end of quarter four. Interests are our single biggest expense, but our single biggest income is rent.
Yes, we generate rent from apartments like this one for example. Good rents that facilitate the next project and so on. In terms of income this last quarter, we've completed all rent negotiations with the Tenants' Association regarding residential rents. Gothenburg was the last one and when everything is complete the rent increase is just over 3% for this year. It feels good to be able to communicate this to minimise the retroactive effect for our customers so they don't worry. We strive to reach agreements early on so everyone knows the terms for this year.
We've dealt with interest and rent and almost touched on income from property management which is roughly on the same level as quarter one in the previous year. But if we exclude the climate-related increase in operating expenses because of a cold first quarter with lots of snow which has impacted our operating expenses by about 10 million. It could've been much higher if we hadn't worked on our energy efficiency efforts as hard as we have. In quarter one of the previous year we also had a non-recurring payment of rent. If we exclude those, it's on a par with the previous year's figures.
Something which also has a negative impact on results is that we've vacated the Sergel's scraper in order to execute the project. It has a negative effect now but will produce nice results in the future. It's a fantastic opportunity to acquire such a property but it did cost 2.8 billion and was then vacated so it will obviously show in the results. But the project is in full swing and it will be a real gem in two years' time, at the end of next year. We will then unveil it to Stockholm and Sweden and show what it looks like. We're in full swing, removing the façade and planning the interior. It will be fantastic once it's finished.
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