Q1 2019 Oslo, 26 April 2019 Agenda Highlights in the quarter - - PowerPoint PPT Presentation

Q1 2019

Oslo, 26 April 2019

Agenda

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Highlights in the quarter Operations and market Financial update Closing remarks Q&A

Highlights in the quarter

• Net letting of 1 million
• Finalised Powerhouse Brattørkaia in Trondheim
• Recruitment of new CEO initiated

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Key figures: Key events:

(NOK million) Q1 19 Q1 18 Rental income 585 545 Net income from property management 375 349 Net value changes 462 492 Profit before tax 857 856 Tordenskiolds gate 12, Oslo

Agenda

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Highlights in the quarter Operations and market Financial update Closing remarks Q&A

Letting and occupancy

• New and renewed leases of 30 million (14,200 sqm)
• Terminated contracts of 18 million (7,800 sqm)
• Net letting of 1 million
• Occupancy at 96.3 %
• WAULT at 6.5 yrs / 7.2 yrs

Largest new and renegotiated contracts:

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Property Tenant Sqm Contract Prinsens gate 1, Trondheim Trøndelag County Counsil 2,250 New Tullinkvartalet, Oslo Sector Asset Management 1,150 New Jåttåvagveien 7, Stavanger Lotus Exploration & Production 1,300 Renegotiated

* Net letting = new contracts + uplift on renegotiations – terminated contracts 90 92 94 96 98 100

Q313 Q413 Q114 Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q418 Q119

(%)

Occupancy (%)

• 75
• 45
• 15

15 45 75 105 135 165

Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Renegotiated New - management pf. New - project pf. Terminated Net letting Nokm

Finalised Powerhouse Brattørkaia in Trondheim

• 18,200 sqm new office building
• Occupancy: 91 % ( 6 %)
• Energy positive

− Produce 500,000 kWh renewable energy p.a. - more than 2x actual consumption

• BREEAM-NOR Outstanding
• Innovative technical solutions
• Total project cost 518 mill (- 5 mill)

− Yield-on-cost: 6.2 % ( 0,1 %)

Universitetsgata 7-9, Oslo

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Portfolio of ongoing projects

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Ownership (%) Location Expected completion Project area (sqm) Occupancy (%) Estimated total project cost 1) (NOKm) Of which accrued1) (NOKm) Yield on cost2)(%) Tollbugata 1 A 100 Oslo Oct-19 9,000 100 460 330 5.1 Tullinkvartalet (UIO) 100 Oslo Oct-19 22,700 86 1,450 1,072 5.8 Holtermanns veg 1-13 100 Trondheim Jan-20 11,700 60 340 178 6.0 Brattørkaia 12 100 Trondheim Jan-20 1,900 100 86 39 5.4 Universitetsgata 7-9 100 Oslo Sep-21 22,300 25 1,191 363 6.0 Total 67 600 3 527 1 983

1) Total project cost (Including book value at date of investment decision/cost of land) 2) Estimated net rent (fully let) at completion/total project cost (including cost of land)

Market development

Rent and vacancy

• Strong economic development;

− GDP growth > 2 % − Oslo city centre vacancy at very low level − Significant uplift in market rents

• Regional cities;

− Increased employment and higher activity in the oil sector − Increasing market rents in city centre locations

Source: Entra consensus report April 2019, average of estimates from leading market specialists in Norwegian market. Nominal rental value growth

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Market rental growth and vacancy in Oslo

8,0 % 4,6 % 4,1 %

• 4,7 %

2,3 % 4,5 % 8,0 % 6,3 % 3,1 % 2,7 % 7,2 % 7,4 % 7,8 % 8,4 % 7,8 % 7,1 % 6,1 % 5,8 % 6,1 % 6,4 %

• 5%

0% 5% 10% 2012 2013 2014 2015 2016 2017 2018 2019e 2020e 2021e

Rental growth central Oslo assets Vacancy Oslo (incl. Lysaker and Fornebu)

5,3 % 5,2 % 4,7 % 4,1 % 3,8 % 3,7 % 3,7 % 3,8 % 4,0 % 4,1 %

0% 2% 4% 6%

2012 2013 2014 2015 2016 2017 2018 2019e 2020e 2021e 52 40 62 123 74 87 86 80 74 73

50 100 150

2012 2013 2014 2015 2016 2017 2018 2019e 2020e 2021e

Market development

Transactions and yields

• Active transaction market
• Improved financing conditions

− Long term interest rate levels and credit spreads reduced

• Yields remain stable at low levels

* Source: Entra consensus report April 2019. Estimates from leading market specialists in Norwegian market

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Total transaction volume (NOKbn)* Prime yield Oslo*

Agenda

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Highlights in the quarter Operations and market Financial update Closing remarks Q&A

545 558 570 569 585 100 200 300 400 500 600 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 856 843 660 714 857 200 400 600 800 1000 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 349 364 369 352 375 100 200 300 400 500 600 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19

Key financials

Rental income

(NOKm)

Net income from property management (NOKm) Profit before tax

(NOKm)

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11 % 0 % 7 %

81 81 85 89 90 91 93 101 110 117 121 127 133 136 137 141 146 74 74 78 81 82 83 83 93 101 108 111 118 124 126 127 131 135 50 70 90 110 130 150 170 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19

NAV NNNAV

4,3 4,3 4,5 5,0 5,3 5,5 5,5 5,8 6,0 6,3 6,6 6,8 7,0 7,2 7,5 7,8 7,9 3,0 3,5 4,0 4,5 5,0 5,5 6,0 6,5 7,0 7,5 8,0 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19

Cash Earnings*

(NOK per share)

Key financials - per share

12

CAGR: 16 %

* Annualised, rolling four quarters.

EPRA NAV/NNNAV

(NOK per share)

CAGR: 15 %

Profit and loss statement

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Q1 Full year All figures in NOK millions 2019 2018 2018 Rental income 585 545 2 243 Operating costs

• 43
• 44
• 184

Net operating income 542 501 2 058 Other revenues 69 13 521 Other costs

• 60
• 11
• 500

Administrative costs

• 48
• 44
• 157

Share of profit from associates and JVs 23 14 156 Net realised financials

• 131
• 110
• 491

Net income 395 363 1 587

• of which net income from property management

375 349 1 434 Changes in value of investment properties 484 357 1 387 Changes in value of financial instruments

• 22

135 99 Profit before tax 857 856 3 073 Tax payable

• 3
• 3
• 13

Change in deferred tax

• 147
• 119
• 325

Profit for period/year 707 734 2 735

Investment property value development

14

45 279 23 361

• 291

484 231 10 46 097 2 432 48 529 40 000 41 000 42 000 43 000 44 000 45 000 46 000 47 000 48 000 49 000 Value per 31.12.18 Acqusitions Investment in portfolio Sale of properties Value changes Implementation

• f IFRS 16

Other Value per 31.03.19 JV and Associates* Total market value

* Entra´s share of gross market value of JVs and Associates (book value equity = 249 million)

(NOKm)

2,25% 2,75% 3,25% 3,75% Q1 16 Q1 17 Q1 18 Q1 19 Q1 20 Q1 21 Q1 22 Average interest rate 0,5 1 1,5 2 2,5 3 3,5 4 20% 25% 30% 35% 40% 45% 50% 55% Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Loan-To-Value (left axis) ICR (right axis)

Financial update

LTV and ICR Financing mix Development in avg. interest rate

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3.5 40.1 2 000 4 000 6 000 8 000 10 000 12 000 14 000 16 000 18 000 20 000 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Bonds Green Bonds Commercal paper Bank

585

• 1

4 3

• 12

580 583 594 588 588 590 550 555 560 565 570 575 580 585 590 595 600 Q1 2019 Divestments Acquisitions Developments Net letting Other Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020

Rental income development based on reported events

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• Does not constitute a forecast; aims to demonstrate the rental income development based on all reported events
• Does not reflect letting targets on either vacant areas or on contracts that will expire, but where the outcome of the renegotiation process is not known

Agenda

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Highlights in the quarter Operations and market Financial update Closing remarks Q&A

Closing remarks

• Supportive macro, strong rental and

transaction market

• Improving financing conditions, yields

remain stable

• Focus on progressing project pipeline,

both short and long term

• Several exciting redevelopment projects

will be added to ongoing project portfolio this and next year

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Stenersgata 1 (Oslo City), Oslo Schweigaardsgate 15, Oslo Tordenskioldsgate 12, Oslo Universitetsgata 2, Oslo

Redevelopment project pipeline

Agenda

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Highlights in the quarter Operations and market Financial update Closing remarks Q&A