This press release does not constitute an offer, but exclusively conveys information on the Board of Directors’ proposal to an Extraordinary General Meeting regarding an automatic redemption process. The press release is not intended for parties whose participation in the redemption process necessitates additional information or registration measures, or other actions in addition to those stipulated by Swedish law. This press release is not intended for publication in such countries that require additional information or measures as stated in the previous sentence, or in countries where publication contravenes applicable rules or ordinances. The onus is on each recipient to comply with the restrictions that ensue from foreign law. Disputes relating to the redemption process, as reviewed in this press release, will be determined by Swedish law and in a Swedish court of law exclusively. The Swedish language original version of this press release is available on Kungsleden’s Website, www.kungsleden.se.

The Board of listed Swedish property company Kungsleden AB publ has resolved to convene an Extraordinary General Meeting on 19 November 2007 to consider a proposed redemption of shares by reducing share capital, with repayment to shareholders. The proposed share redemption would pay out a total of approximately SEK 1,570 m to shareholders, corresponding to SEK 11.50 per share. The Board proposal implies redemption being conducted in 2007.

Kungsleden’s CEO Thomas Erséus commented: “We’re working actively on our capital structure and are pleased that this can benefit shareholders. We’re convening the EGM a week before presenting our Interim Report because it means we will be able to complete the redemption process before year-end.”

Proposed redemption process in brief

- Subject to a resolution by the EGM on 19 November 2007, each Kungsleden share will be split into two (share split), of which one will be termed a redemption share in the Swedish Central Securities Depository & Clearing Organisation (VPC) system.
- The redemption share will then be redeemed automatically against a cash redemption payment of SEK 11.50.
- The redemption process is automatic; no action is required by shareholders.
- The record day[1] for the share split and right to redemption shares is scheduled for 28 November 2007, provided that the Swedish Companies Registration Office has registered the EGM resolution on the share split prior to this.
- The final day of trading in Kungsleden shares cum rights to redemption shares will be 23 November 2007.
- Trading in redemption shares will be conducted between 29 November and 12 December 2007.
- The payment date for the redemption is scheduled for 20 December 2007.

Reasons for the proposed share redemption

Alongside a strong cash flow, the strong profit returned by Kungsleden’s property management and property-trading operations in recent years have generated a very strong financial position for Kungsleden, despite a high dividend pay-out ratio.

Kungsleden’s Board and Management expect the property market will generally remain favourable with promising potential for deals despite recent capital market unrest. In addition, Kungsleden thinks this turbulence is likely to generate promising opportunities for deal-making in various markets for a player like Kungsleden.

Properties worth approximately SEK 4.0 bn have been divested and properties worth some SEK 5.4 bn have been acquired so far in 2007. In addition, a Letter of Intent has been signed with Norwegian asset manager Orkla Finans Kapitalförvaltning ASA regarding the sale of commercial property in Sweden worth a total of approximately SEK 5 bn. In combination with a healthy cash flow from property management, Kungsleden currently has scope for acquisitions well in excess of its assessment of the deals that may arise.

Kungsleden’s ambition is to endeavour continuously towards an optimal capital structure, to maximise returns to shareholders, considering risk. Against this background, the Board’s overall assessment is that there is scope to transfer capital to shareholders. Accordingly, the Board has proposed a share redemption totalling approximately SEK 1,570 m, or SEK 11.50 per share.

After the proposed redemption, the current scope for acquisitions is SEK 10 – 20 bn. If the divestment to Orkla Finans Kapitalförvaltning ASA is completed, this figure would be SEK 15 – 30 bn.

In order to complete the redemption process smoothly and efficiently, the Board proposes that the EGM resolve to restore SEK 28,437,930 of the company’s share capital through a bonus issue.

In addition, and to increase the company’s non-restricted equity, the Board proposes a SEK 2,063,629,662 reduction of the company’s statutory reserve through an allocation to non-restricted reserves. The statutory reserve would then be completely dissolved.

Information brochure and other documentation

An information brochure reviewing the proposed redemption in more detail will be distributed to all shareholders registered in their own name with a current valid address, with the limitations as a result of this press release, and who are included in VPC’s share register on 1 November 2007, and to all nominee-registered shareholders with a current valid address who are registered with the relevant nominee on 29 October 2007.

The Board’s complete proposal will be available at the company’s offices at the following address: Kungsleden AB, Medborgarplatsen 25, Stockholm, Sweden, and on the group Website: www.kungsleden.se from Monday 5 November 2007 at the latest and will be mailed to shareholders that so request and provide a postal address.

Appendices

Appendix 1: Convening the Extraordinary General Meeting on 19 November 2007.


For more information, please contact:
Thomas Erséus, Chief Executive, tel +46 (0)8 503 05204, mobile +46 (0)70 378 2024
Johan Risberg, Deputy Chief Executive, tel +46 (0)8 503 05206, mobile +46 (0)70 690 6565

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 30 June 2007, the property portfolio comprised 606 properties with a book value of SEK 25.4 bn. The holding was located in a total of 128 municipalities, although concentrated on the Swedish provinces of Götaland and Svealand, and the Öresund region. Kungsleden has been quoted on the OMX Nordic Exchange Stockholm since 1999.


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[1] The day shareholders must be recorded in the share register maintained by VPC.