Company presentation Last updated: 9 May 2012 Agenda Norwegian - PowerPoint PPT Presentation

Company presentation Last updated: 9 May 2012

Agenda Norwegian Property in short Market development Strategy for long-term value creation Portfolio and operations Financial performance and financing Appendices

NORWEGIAN PROPERTY IN SHORT A fully integrated real estate company with prime office properties in Norway Prime locations Gross rental income by area  42 commercial properties located in prime office clusters in Oslo and Stavanger with proximity to traffic junctions Stavanger 16 % Gardermoen Prime market 3 %  Positive rental and transaction market development Oslo area 81 % Exposure to a strong Norwegian economy  Oslo and Stavanger are two of the fastest growing regions of Norway Leasing and Development marketing High quality tenant base Value drivers Fully integrated real estate company Property Finance and  management Focused on the office sector transactions 2

NORWEGIAN PROPERTY IN SHORT Exposure to prime locations in Oslo Nydalen – 12 properties Oslo gross rent by area Total size m² 110.795 Total value NOK mill. 1.866 Gross rent NOK mill. 113 Skøyen Net yield % 5.7 26% Duration Years 6.8 Vacancy % 17.4 CBD Nydalen 40% 15% Other Majorstuen 20% Skøyen Lysaker CBD Other – 3 properties Total size m² 102.188 Total value NOK mill. 2.084 Gross rent NOK mill. 155 Net yield % 7.0 Duration Years 5.8 Fornebu Vacancy % 0.0 Skøyen – 8 properties CBD – 11 properties Total size m² 107.840 Total size m² 122.025 Total value NOK mill. 2.988 Total value NOK mill. 5.586 Gross rent NOK mill. 198 Gross rent NOK mill. 309 Net yield % 6.2 Net yield % 5.2 Duration Years 6.8 Duration Years 4.0 Vacancy % 7.9 Vacancy % 15.1 3

NORWEGIAN PROPERTY IN SHORT The value of Walkability  Urban planners, governments, and public health leaders increasingly promote pedestrian mobility due to its positive effects on: • Public health, air quality, traffic safety, and energy conservation  Impact of walkability on market values and investment returns for office, retail, apartment and industrial properties examined: • Walkability was associated with higher value for office, retail and apartment properties • Properties with a Walk Score of 80 were worth 6 to 54 percent more than properties with a 20 Walk Score • Higher net operating incomes for the office and retail properties Source: Gary Pivo and Jeffrey D. Fisher ” The walkability premium in commercial real estate investments” AKER BRYGGE SKØYEN 4

NORWEGIAN PROPERTY IN SHORT Moving ahead as planned Sale of hotel operation Well positioned for Sale of Norgani Hotels AS completed in November 2010 implementation of portfolio Improved financial flexibility investment program Net LTV from 75.7 per cent at year-end 2010 to 61.5 per cent (57.4 per cent if Norgani vendor financing is included) as of 31 March 2012 Built organisational strength to address future value drivers Industrial value creation Established in-house property management organization and systems based on four main value Established in-house development organization drivers: Strengthened market organization and financial function Established long-term master plans for major properties :: Marketing and letting Established plans for redevelopment and upgrade of major properties :: Property management Refinancing of debt secured :: Property development No debt maturing until 2013 :: Transactions and financing Loan facilities secure all loan maturities in 2012 and investment capacity 5

NORWEGIAN PROPERTY IN SHORT Investment and return strategy Investment strategy Return and financing strategy o o Focus on the most important office clusters Long-term target of 12 per cent pre-tax return with proximity to traffic junctions on equity including operational expenses and development o Mainly office space but potentially retail space o in connection to offices Long-term target of dividend payment of 30 – 50 per cent of profit after tax before value adjustments o High-quality tenants, diversified maturity o Dividend payment of NOK 0.20 approved by the profile and high degree of inflation adjustment ordinary general meeting in 2012 o Targets gradual increase of dividend, while at the same time considering the company’s capex o Focus on key value drivers plans and maintaining a strong financial position o Leasing and marketing o Development – primarily redevelopment and o Target of LTV around 55 – 65 per cent not green field o Property management o Target of a predictable cash flow requires a o Finance and transactions relatively high degree of interest rate hedging, range of 50 – 80 per cent 6

Agenda Norwegian Property in short Market development Strategy for long-term value creation Portfolio and operations Financial performance and financing Appendices

MARKET UPDATE Limited impact on Norway from international turmoil Gross Domestic Product - Mainland Norway Employed persons in Norway Percentage change from previous year Percentage change from previous year 6.0 5.0 5.6 4.1 4.9 5.0 4.4 4.6 4.0 3.5 3.2 4.0 3.0 3.3 2.9 3.0 2.5 2.7 2.6 2.0 2 1.9 1.4 1.8 1.3 1.2 1.2 1.3 2.0 1.4 1.3 1.0 0.5 1.0 0.3 0.4 0.0 0.0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 -0.1 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 -0.4 -1.0 -1.0 -1.2 -2.0 -2.0 -1.8 Gross domestic product - Mainland Norway Forecast Employed persons Forecast Source: Statistics Norway, January 2012 8

MARKET UPDATE Strong population growth forecasted Forecasted population growth Forecasted population growth Forecasted population growth - Norway - Oslo region - Stavanger region 6 500 000 1 750 000 450 000 425 000 6 000 000 1 500 000 400 000 5 500 000 375 000 5 000 000 1 250 000 350 000 4 500 000 325 000 4 000 000 1 000 000 300 000 2017 2011 2013 2015 2017 2019 2021 2023 2025 2011 2013 2015 2017 2019 2021 2023 2025 2011 2013 2015 2019 2021 2023 2025 Medium economic growth scenario Medium economic growth scenario Medium economic growth scenario Low economic growth scenario Low economic growth scenario Low economic growth scenario High economic growth scenario High economic growth scenario High economic growth scenario Source: Statistics Norway, January 2012 9

MARKET UPDATE Selective Oslo market Strong newbuilding Oslo office market: Supply, demand and vacant space activity in 2012 - may 1.000 m² FORECAST lead to some pressure in 1 000 ↓ specific geographical 13 % ↑ 13 % ↓ areas 900 ↓ ↑ ↑ 11 % 800 Increasing trend of redevelopment and ↓ ↑ ↓ ↓ ↓ ↑ 700 ↑ ↑ ↓ ↑ conversion of older, 8 % ↑ 9 % 8 % 8 % unattractive office space 600 ↑ ↓ 8 % 7.5 % ↑ ↑ 7 % 7 % 500 ↓ The division between ↑ attractive and ↓ ↑ 400 ↑ 5 % unattractive properties is 4.5 % growing 300 4 % Net absorbed space (demand) 200 Modern, Net new space (supply) environmentally friendly 100 Vacant space and space-efficient offices situated near 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 public infrastructure are increasingly in demand Source: Akershus Eiendom (March 2012) 10

Prime Office Rents and Rental Change Q1 2012 MARKET UPDATE Healthy growth in prime office rents Amsterdam Paris London City, London West End, Zurich Oslo Geneva, Helsinki, Moscow Rental Growth Rents Lyon Slowing Falling Warsaw, Stockholm Dusseldorf, Hamburg, Stuttgart Berlin, Munich Rental Growth Rents Accelerating Bottoming Out Cologne, Luxembourg Athens Copenhagen Madrid, Brussels, Lisbon St. Petersburg, Milan Barcelona, Budapest Dublin, Rome Bucharest, Edinburgh, Frankfurt, Istanbul, Kiev, Prague Source: Jones Lang Lasalle (May 2012) and Norwegian Property 11

MARKET UPDATE High leasing activity NYDALEN Nydalen Sandakerveien 138  Long term lease with Forbrukerombudet for 1 330 square meters in Sandakerveien 138  Annual rent of NOK 2.2 million, 11 years duration  Another three leases signed in Sandakerveien 138 SKØYEN Drammensveien 134  Twelve-year lease with the Norwegian Public Service Pension Fund in Drammensveien 134 (1-4) at Skøyen  Total area of almost 10 000 square meters  Annual rent of NOK 2 775 per square meter  Estimated take-over fourth quarter 2014  In addition, new leases have been signed for 1 660 square meters in total in Drammensveien 134 (5)  Annual rent for these contracts amounts to NOK 3.5 million 12

MARKET UPDATE Portfolio attractiveness confirmed by new leases AKER BRYGGE Stranden 1, Terminalbygget  10 year lease contract signed with DNO International ASA in Stranden 1 from takeover year-end 2014  Total rented area of 2 400 square meters  Annual rent of NOK 4 250 per square meter  Temporary location in Bryggegata 7  In addition, vacant space in Bryggetorget 1 (Fondbygget) has been let  Several smaller leases and temporary relocation of tenants in connection with upcoming redevelopment projects 13

MARKET UPDATE Increased transaction activity in 2012 Ibsenkvartalet Buyer: KLP Seller: Norwegian Property Transaction value: NOK 1 220 million DnB-building, Bjørvika Buyer: DNB Liv Seller: Oslo S Utvikling (OSU) Transaction value: NOK 4.8 billion Fondbygget, Aker Brygge Buyer: Norwegian Property Seller: KLP Transaction value: NOK 620 million 14