3rd quarter 2016 Oslo , 21 October 2016 21 October 2016 Agenda - PowerPoint PPT Presentation

3rd quarter 2016 Oslo , 21 October 2016

21 October 2016 Agenda Highlights Financial update Markets and operations Closing remarks Q&A session 2

21 October 2016 Q3 in short: Revenue growth, transactions and mandatory offer • Revenue growth 10.1% year on year * • Strengthening position on Aker Brygge ‐ Revenues NOK 229.7 million (Q3-15: NOK 220.7 million) ‐ Acquired retail assets • Earnings per share (EPS), NOK 0.36 • Sale of assets ‐ Skøyen-portfolio completed in September • Agreed long term lease contract for ‐ Stortingsgata 6, completed in October Drammensveien 60 • Mandatory bid from Geveran Trading Co Ltd. 3 *) Taking into account acquisitions and sale of assets

21 October 2016 Agenda  Highlights  Financial update  Markets and operations  Closing remarks  Q&A session 4

21 October 2016 Financial highlights 63 13 100 Value per Rental income Profit before tax and Net Loan To Value 240 share value adjustments 90 61 12 80 220 59 70 57 200 NOK per share NOK million 11 60 55 180 50 % 53 40 10 160 51 30 140 49 20 9 120 10 47 0 100 8 45 4Q 2013 2Q 2014 4Q 2014 2Q 2015 4Q 2015 2Q 2016 4Q 2013 2Q 2014 4Q 2014 2Q 2015 4Q 2015 3Q 2016 4Q 2013 2Q 2014 4Q 2014 2Q 2015 4Q 2015 2Q 2016 4Q 2013 2Q 2014 4Q 2014 2Q 2015 4Q 2015 2Q 2016 Sold assets *) One-off Net LTV EPRA NAV Quarterly rental income Net asset value (NAV) Profit before tax and value adj. 5 *) Revenues related to sold properties; Skøyen-portfolio, Lysaker Torg 35, Maridalsveien 323, Strandsvingen 10 and Finnestadveien 44

21 October 2016 Income statement – Q3 2016 NOK million Q3 2016 Q3 2015 Gross rental income 1) 229.7 220.7 Maintenance and property related cost -15.0 -17.3 Other property costs -13.9 -17.6 Administrative and group expenses -14.9 -15.2 Operating result before value adjustments 185.9 170.6 Change in market value of investment property 78.3 118.6 Operating result 264.2 289.3 Net financial items excluding derivatives -100.5 -104.9 Change in market value of financial derivatives 97.0 -107.9 Net financial items including derivatives -3.5 -212.8 Profit before income tax 260.7 76.5 Income tax (not payable) -65.0 -5.2 Profit for the period 195.7 71.2 Earnings per share (NOK) 0.36 0.13 Profit before tax and value adjustments 85.4 65.7 1) Increase of NOK 21.0 million adjusted for properties sold (Skøyen-properties) and properties bought (retail space in Fondbygget at Aker Brygge) 6

21 October 2016 Income statement – YTD 2016 NOK million Q3 2016 Q3 2015 Gross rental income 1) 696.6 640.4 Maintenance and property related cost -43.6 -49.0 Other property costs -42.2 -54.1 Administrative and group expenses -41.4 -41.1 Operating result before value adjustments 569.4 496.2 Change in market value of investment property 444.3 301.1 Operating result 1 013.7 797.4 Net financial items excluding derivatives -308.6 -328.6 Change in market value of financial derivatives 94.5 56.3 Net financial items including derivatives -214.1 -272.3 Profit before income tax 799.6 525.1 Income tax (not payable) -215.3 -134.9 Profit for the period 584.3 390.2 Earnings per share (NOK) 1.07 0.71 Profit before tax and value adjustments 260.8 167.6 1) Increase of NOK 86.1 million adjusted for properties sold (Skøyen-properties and Strandsvingen 10) and properties bought (retail space in Fondbygget at Aker Brygge) 7

21 October 2016 Yield spread 1) Source: Akershus Eiendom 8 2) NPRO net yield as summarised in slide; with Portfolio valuation by area Q3-2016

21 October 2016 Portfolio valuation by area Q3-2016 Vacancy Oslo 3) • External valuation conducted by DTZ RealKapital and Akershus Eiendom 30 ‐ Positive fair value adjustment of NOK 78.3 million (0.5 per cent of portfolio value) 25 ‐ NOK 38.2 million: positive effect from properties with short term contracts or vacancies 20 ‐ NOK 23.3 million: positive effect on other properties, primarily from reduced discount factors % 15 ‐ NOK 16.7 million: positive effect on properties agreed sold 10 5 0 Gross rent per 1Q 2014 3Q 2014 1Q 2015 3Q 2015 1Q 2016 3Q 2016 Valuation Total Net Space year Duration yield 1) Area space not generating (years) NOK NOK revenue (%) 3) (m²) (%) NOK/m² NOK/m² mill. mill. CBD 135 656 6.2 10 044.9 74 047 427.2 3 149 4.0 3.9 (Q2: 4.8) Overall vacancy 3) Skøyen 2) 41 606 2.4 959.7 23 066 94.4 2 269 9.2 0.0 (Q2: 2.8) Oslo Nydalen 89 591 4.1 1 683.8 18 794 120.5 1 345 6.7 1.7 (Q2: 2.7) 25 20 Other 79 090 3.1 1 061.6 13 423 121.6 1 538 10.8 0.0 (Q2: 0.0) 15 % Total Oslo Portfolio 345 943 13 750.0 39 746 4.9 763.8 2 208 5.2 2.1 (Q2: 3.0) 10 Stavanger 92 745 780.0 8 410 1.5 58.7 633 7.1 52.0 (Q2: 52.1) 5 Total office 0 1Q 2014 3Q 2014 1Q 2015 3Q 2015 1Q 2016 3Q 2016 portfolio 438 688 4.7 14 530.0 33 122 822.5 1 875 5.3 13.8 (Q2: 13.3) 1) For illustration; based on rents as of 30 September 2016 and estimated property expenses of 6 per cent 2) Skøyen include Hovfaret 11 and Nedre Skøyenvei 24 and 26, properties agreed sold with take over in June 2019 3) Space not generating revenue comprise light areas (office, retail etc) 9

21 October 2016 Mandatory bid Geveran Trading Co Ltd. bid launched in September Major shareholders as of 30 September 2016: # Name Share (%) Number of shares Account type Nationality • Mandatory bid launched 22 September 1 GEVERAN TRADING CO LTD 53.52 293 502 335 COMP CYP 2 FOLKETRYGDFONDET 13.44 73 701 642 COMP NOR • Acceptance period extended to 3 NIAM V PROSJEKT AS c/o Langham Hall UK 12.3 67 437 425 COMP NOR 4 THE BANK OF NEW YORK MELLON SA/NV 4.3 23 730 241 NOM NLD 3 November 2016 at 16:30 5 STATE STREET BANK AND TRUST CO 0.89 4 871 008 NOM USA 6 BNP PARIBAS SEC. SERVICES S.C.A GBR 0.79 4 322 829 NOM GBR • 7 STATE STREET BANK AND TRUST CO. 0.63 3 472 928 NOM USA Offer price; NOK 10.80 per share 8 STATE STREET BANK & TRUST CO 0.60 3 305 844 NOM IRL 9 CEK HOLDING AS 0.59 3 255 807 COMP NOR • The board of Norwegian Property ASA 10 ALDEN AS 0.59 3 250 000 COMP NOR 11 J.P. Morgan Chase Ba A/C VANGUARD BBH LEN 0.51 2 792 550 NOM USA has issued a statement (dated 4 12 KLP AKSJENORGE INDEKS 0.38 2 082 065 COMP NOR October) regarding the offer based on 13 STATE STREET BANK & TRUST COMPANY 0.34 1 879 335 NOM USA “fairness opinion” from Swedbank 14 JP MORGAN BANK LUXEMBOURG S.A 0.29 1 608 501 NOM LUX 15 KAS BANK NV S/A CLIENT ACC TREAT 0.29 1 583 313 NOM NLD 16 NIKI AS 0.27 1 500 000 COMP NOR • On 20 October Geveran announced that 17 MATHIAS HOLDING AS 0.26 1 400 000 COMP NOR 18 SKANDINAVISKA ENSKILDA BANKEN AB 0.22 1 214 000 NOM FIN the company controlled 55.11 % of the 19 STATE STREET BANK AND TRUST COMPA. 0.21 1 150 728 NOM USA shares in Norwegian Property 20 STATE STREET BANK & TRUST CO. 0.20 1 113 097 NOM USA Total 20 largest shareholders 90.65 497 173 648 7/20 NOR 10

21 October 2016 Financial position Interest bearing debt and hedging 30.09.2016 30.06.2016 31.12.2015 Total interest bearing debt NOK million 7 414.2 9 405.6 9 519.7 Property value NOK million 14 529.9 16 680.2 16 256.2 Net Loan to value 1) Per cent 48.9 56.3 58.2 Cash and cash equivalents NOK million 316.3 16.3 55.8 Unused committed credit facilities NOK million 1 058.0 389.9 308.0 Average remaining duration, hedging Years 3.8 3.7 4.3 Average interest rate (including margin) Per cent 4.52 4.32 4.33 Average margin Per cent 1.59 1.46 1.40 Average remaining duration, borrowing Years 1.7 1.7 1.7 Hedging ratio 66.8 63.4 60.9 Per cent • Bank financing (NOK 5.2 bn) ‐ In the final stages of dialogues with the current counterparts of the current bank facilities with respect to continue and adjust existing facilities (including both drawn and undrawn facilities) and refinancing of the facility maturing in 2016 • Bond financing (NOK 2.1 bn) ‐ The investors in the outstanding bonds have a right to cancel their commitment following a Change of control • Facilities and cash ‐ Cash and unused committed credit facilities as of 30.09. was NOK 1.4 bn ‐ Sale of Stortingsgata was completed 14 October; NOK 0.5 bn 11 ‐ In process for increasing unused committed credit facilities with NOK 0.9 bn 1) Net loan to value = net interest bearing debt divided by gross property value

21 October 2016 Balance sheet NOK million 30.09.2016 30.09.2015 Investment properties 14 529.9 16 038.3 Property, plant and equipment 46.4 45.2 Receivables 109.4 144.2 Cash and cash equivalents 316.3 10.9 Equity 6 309.3 5 684.6 Deferred tax 474.7 203.9 Long term interest bearing debt - 9 308.3 Short term interest bearing debt 7 414.2 50.2 Market value financial derivatives (net) 503.2 683.5 Net other debt 300.6 308.1 Equity ratio (%) 42.0 35.0 NAV per share, book value of equity (NOK) 11.50 10.37 EPRA NAV per share (NOK) 12.83 11.70 EPRA NNNAV per share (NOK) 12.22 10.95 12