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

Q1 2019 Oslo, 26 April 2019

Agenda Highlights in the quarter Operations and market Financial update Closing remarks Q&A 2

Highlights in the quarter Key figures: (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 Key events: • Net letting of 1 million • Finalised Powerhouse Brattørkaia in Trondheim Tordenskiolds gate 12, Oslo • Recruitment of new CEO initiated 3

Agenda Highlights in the quarter Operations and market Financial update Closing remarks Q&A 4

Letting and occupancy • New and renewed leases of 30 million (14,200 sqm) (%) Occupancy (%) 100 • Terminated contracts of 18 million (7,800 sqm) 98 • Net letting of 1 million 96 94 • Occupancy at 96.3 % 92 • WAULT at 6.5 yrs / 7.2 yrs 90 Q313 Q413 Q114 Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q418 Q119 Largest new and renegotiated contracts: Nokm 165 135 Property Tenant Sqm Contract 105 75 Prinsens gate 1, Trondheim Trøndelag County Counsil 2,250 New 45 15 -15 Tullinkvartalet, Oslo Sector Asset Management 1,150 New -45 -75 Lotus Exploration & Jåttåvagveien 7, Stavanger 1,300 Renegotiated 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 Production Renegotiated New - management pf. New - project pf. Terminated Net letting * Net letting = new contracts + uplift on renegotiations – terminated contracts 5

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 6

Portfolio of ongoing projects Estimated total Of which Expected Project area Occupancy project cost 1) accrued 1) Yield on Ownership (%) Location completion (sqm) (%) (NOKm) (NOKm) cost 2) (%) 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) 7

Market development Rent and vacancy • Strong economic development; Market rental growth and vacancy in Oslo − GDP growth > 2 % 10% − Oslo city centre vacancy at very low level 8,4 % 7,8 % 7,8 % 8,0 % 7,4 % 7,1 % 7,2 % − Significant uplift in market rents 6,4 % 6,3 % 6,1 % 8,0 % 6,1 % 5,8 % • Regional cities; 5% − Increased employment and higher activity in 4,6 % 4,5 % 4,1 % the oil sector 3,1 % 2,7 % 2,3 % 0% − Increasing market rents in city centre locations -5% -4,7 % 2012 2013 2014 2015 2016 2017 2018 2019e 2020e 2021e Rental growth central Oslo assets Vacancy Oslo (incl. Lysaker and Fornebu) Source: Entra consensus report April 2019, average of estimates from leading market specialists in Norwegian market. Nominal rental value growth 8

Market development Transactions and yields • Active transaction market Total transaction volume (NOKbn)* • Improved financing conditions 150 123 − Long term interest rate levels and credit 87 86 100 80 spreads reduced 74 74 73 62 52 40 50 • Yields remain stable at low levels 0 2012 2013 2014 2015 2016 2017 2018 2019e 2020e 2021e Prime yield Oslo* 6% 5,3 % 5,2 % 4,7 % 4,1 % 4,1 % 4,0 % 3,8 % 3,8 % 3,7 % 3,7 % 4% 2% 0% 2012 2013 2014 2015 2016 2017 2018 2019e 2020e 2021e * Source: Entra consensus report April 2019. Estimates from leading market specialists in Norwegian market 9

Agenda Highlights in the quarter Operations and market Financial update Closing remarks Q&A 10

Key financials Rental income Net income from property Profit before tax management (NOKm) (NOKm) (NOKm) 11 % 7 % 0 % 585 570 569 558 600 600 1000 545 856 857 843 500 500 800 714 660 375 369 364 400 400 349 352 600 300 300 400 200 200 200 100 100 0 0 0 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 11

Key financials - per share Cash Earnings* EPRA NAV/NNNAV (NOK per share) (NOK per share) CAGR: 16 % CAGR: 15 % 7,5 7,8 7,9 8,0 170 NAV NNNAV 6,3 6,6 6,8 7,0 7,2 7,5 133 136 137 141 146 150 7,0 127 6,5 5,8 6,0 130 117 121 118 124 126 127 131 135 6,0 5,3 5,5 5,5 110 5,5 110 101 5,0 93 108 111 91 5,0 90 89 4,3 4,3 4,5 85 90 81 101 81 4,5 93 4,0 82 83 83 70 81 78 3,5 74 74 3,0 50 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 15 15 15 15 16 16 16 16 17 17 17 17 18 18 18 18 19 15 15 15 15 16 16 16 16 17 17 17 17 18 18 18 18 19 * Annualised, rolling four quarters. 12

Profit and loss statement 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 13

Investment property value development (NOKm) 49 000 2 432 48 529 48 000 47 000 10 231 46 097 484 46 000 361 45 279 23 45 000 -291 44 000 43 000 42 000 41 000 40 000 Value per Acqusitions Investment in Sale of Value Implementation Other Value per JV and Total market 31.12.18 portfolio properties changes of IFRS 16 31.03.19 Associates* value * Entra´s share of gross market value of JVs and Associates (book value equity = 249 million) 14

Financial update Financing mix LTV and ICR Development in avg. interest rate 55% 4 20 000 3,75% 3.5 3,5 18 000 50% 16 000 3 45% 14 000 2,5 3,25% 40.1 12 000 40% 2 10 000 35% 8 000 1,5 2,75% 30% 6 000 1 4 000 25% 0,5 2 000 2,25% 20% 0 0 Q1 16 Q1 17 Q1 18 Q1 19 Q1 20 Q1 21 Q1 22 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 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 15 Loan-To-Value (left axis) ICR (right axis) Bonds Green Bonds Average interest rate Commercal paper Bank

Rental income development based on reported events 600 594 595 3 590 4 588 588 590 585 583 585 0 -1 580 580 -12 575 570 565 560 555 550 Q1 2019 Divestments Acquisitions Developments Net letting Other Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 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 • 16

Agenda Highlights in the quarter Operations and market Financial update Closing remarks Q&A 17

Closing remarks Redevelopment project pipeline • Supportive macro, strong rental and transaction market • Improving financing conditions, yields remain stable • Focus on progressing project pipeline, both short and long term Universitetsgata 2, Oslo Tordenskioldsgate 12, Oslo • Several exciting redevelopment projects will be added to ongoing project portfolio this and next year Stenersgata 1 (Oslo City), Oslo Schweigaardsgate 15, Oslo 18

Agenda Highlights in the quarter Operations and market Financial update Closing remarks Q&A 19