Page 1


Table of contents Financial update Key figures .............................................................................................................................................................................................................. 3 Portfolio valuation .................................................................................................................................................................................................. 4 Financing ................................................................................................................................................................................................................. 6 Yield spread ............................................................................................................................................................................................................ 7 Appendix Highlights ................................................................................................................................................................................................................ 8 Tenants lease expiry .............................................................................................................................................................................................. 9 Exposure overview ................................................................................................................................................................................................ 10 Exposure to locations ........................................................................................................................................................................................... 11

Emil Eriksrød Chairman


Financial update Overview and key figures Q4-2016 Key figures of 31.12.2016 31.12.2016 Properties

no

11

Portfolio size (ex. New space in development projects)

42 250

Average size per property

3 841

NOK mill.

58,0

Operational expences per year )

NOK mill.

3,5

Net rent per year (run rate)

NOK mill.

54,5

NOK

1 373

Gross market value (Inc. Development project "land")

NOK mill.

888,5

Average value per property

NOK mill.

80,8

Gross rent per year (run rate) 1

Average gross rate per m2 per year

Average value per m2 (including "land")

NOK

21 030

Gross yield, actual

%

6,5

Net yield, actual

%

6,1

Gross yield at market rent fullt let ²)

%

7,1

Net yield at market rent fully let ²)

%

6,7

Years

4,9

CPI adjustments annual

%

83,8

Vacancy (space including strategic vacancy)

%

6,0

Duration, WALE ³)

1) Assuming 6 % operating expenses on property levels 2) Assuming market rent, adjusted for county and location 3) WALE, stands for "weighted average lease expiry" by rent


Financial update Portfolio valuation by area Q4-2016 * External valuation conducted by Newsec

Area

Total space (m2)

Space 3) not generating revenue (%)

Weighted Average Lease Expiry (years)

Valuation NOK mill.

Gross rent pr year

NOK/m2

NOK mill.

NOK/m2

Net yield 1)

Gross marked rent fully let

5 059

8,1 %

1,0

85,0

16 802

5,55

1 239

6,1 %

6,8

Kjørbekk

3 169

10,4 %

3,1

39,0

12 307

2,79

879

6,7 %

3,5

Porsgrunn Sentrum

1 577

0,0 %

5,4

29,0

18 389

2,12

1 341

6,9 %

1,7

10 657

0,0 %

3,9

215,0

20 175

16,01

1 502

7,0 %

16,0

Skjelsvik E18

2 548

6,7 %

7,2

27,5

10 793

1,83

719

6,3 %

2,5

Vestfold Tønsberg (Korten) Sandefjord

16 446 2 794

9,4 % 3,5 %

4,6 8,5

408,0 60,0

24 808 21 475

26,17 3,54

1 591 1 268

6,0 % 5,6 %

26,5 4,6

Running operations

42 250

6,0 %

4,9

863,5

20 438

58,00

1 373

6,3 %

61,7

42 250

6,0 %

4,9

863,5

20 438

58,00

1 373

6,3 %

61,7

Telemark

Skien Sentrum

Porsgrunn Næringspark

Redevelopment projects Total office portfolio

1) Based on gross rent as of 31 December 2016 and estimated operating expences of 6% 2) Estimated fully let gross marked rent, based on local knowledge 3) Parking and storage is excluded from the calculation of space vacancy


Financial update Development projects Q4-2016 Gross space estimated (sqm)

Area

Telemark Powerhouse Telemark 1 Vestfold Nordre Fokserød 14 Development projects

2

Valuation (NOK mill.)

Letting ratio (%)

Before development

Fully developed

Gross rent pr year (NOK mill.)

Net yield on market rent

6 233

32,1 %

14,5

200,5

12,0

5,6 %

6 233

32,1 %

14,5

200,5

12,0

5,6 %

2 100

27,1 %

10,5

55,0

3,4

5,7 %

2 100

27,1 %

10,5

55,0

3,4

5,7 %

8 333

30,8 %

25,0

255,5

15,4

5,7 %

1) Powerhouse Telemark is a planned Powerhouse in cooperation with Snøhetta Architecture 2) Building 1 is to be completed and handover in november 2016. Property tenent ratio is 100 % on building 1. Main tenant KPMG.


Financial update Financing Q4-2016 Bank financing 1

Maturity

3m Nibor

Market int.

606,6

2035

1,17 %

2,36 %

Amount DNB Bank ASA

Finance composition

Total 4,08 %

Swap 1 80 mNOK of DNB bank financing are bounded to a 10 year SWAP beginning 7.July 2014 with total interest, 4,63 %. Swap 2 18,3 mNOK of DNB bank ASA financing are bounded to a 10 year SWAP beginning 10 May 2014 with total interest, 6,00 % Swap 3 7,9 mNOK of DNB Bank ASA financing are bounded to a 10 years SWAP beginning 30. June 2014 with total interest, 5,34 % Swap 4 96,4 mNOK of DNB Bank ASA financing are bounded to a 10 year SWAP beginning 01. March 2013 with total interest, 5,22 % Swap 5 49,4 mNOK of DNB Bank ASA financing are bounded to a 10 year SWAP beginning 01. June 2015 with total interest 4,05 % Swap 6 50,0 mNOK of DNB Bank ASA financing are bounded to a 5 year SWAP beginning 13. August 2015 with total interest 3,49 %

0% 3M Nibor + margin (DNB)

47 %

Fixed rate / Swap (DNB)

53 % Vendor financing

Loan to value 100 % 90 % 80 %

Vendor credit Amount

1

70 %

Maturity Totalt interest

Veidekke Eiendom AS

0,8

2017

5,00 %

Dione AS

0,8

2017

5,00 %

Target for LTV ratio

68,3 %

60 % 50 % 2010

Amount

Total financing (Bank & vendor)

608,28

1

Market int. 1,86 %

Margin ² Total interest ² 1,96 %

1) Amount presented in mNOK 2) Total margin / interest is presented weighted by amount, SWAP contracts taken into account 3) 53 % of bank financing is secured by 6 SWAP contracts, risk diversification

4,08 %

2011

2012

2013

2014

Net LTV incl. Vendor credit

2015

2016

Net LTV


Financial update Yield spread 9,00

9,00

8,00

8,00

7,00

7,00

6,00

6,00

5,00

5,00

4,00

4,00

3,00

3,00 NOK GOV 10 Y 1)

2,00

2,00

3 MND NIBOR 2) Prime yield 3)

1,00

1,00

1)

Source: Norges Bank Source: Oslo Børs 3) Source: DNB Næringsmegling 2)

2016 Q4

2016 Q3

2016 Q2

2016 Q1

2015 Q4

2015 Q3

2015 Q2

2015 Q1

2014 Q4

2014 Q3

2014 Q2

2014 Q1

2013 Q4

2013 Q3

2013 Q2

2013 Q1

2012 Q4

0,00

2012 Q3

R8 Net Yield 0,00


Appendix Highlights in Q4-2016 •

Property renovation completed - Construction of Nordre Fokserød 14, building 1 is completed in Q4-2016. The property is now classified under running operation. Main tenant is KPMG AS, and several other strong brands.

Value changes - Gross change in property values with +3,0 % in Q4-2016. - Total portfolio value is mNOK 888,5.

Letting ratio increasing in Q4-2016 - Total letting ratio portfolio 93,7 %. Change from Q3 related to Nordre Fokserød 14, Torggata 8 and minor changes in other properties.

Portfolio LTV target decreased in Q4-2016 - Due to drop in portfolio yield levels, the administration has decided to move target LTV in portfolio from 75 % to 70 %.


Appendix Overview portfolio lease expiry

Revenue expiring

Number of contracts expiring

kr 25 000 000

7

kr 20 000 000

7

6 kr 15 000 000

kr 10 000 000

2017 2018 7 2019 2020 2021 2022 2023 2024 2025 2026 2027

kr kr kr kr kr kr kr kr kr kr kr kr

8

5 969 154 2 610 916 4 311 812 6 9 439 795 4 827 910 19 443 331 1 504 717 5 833 380 1 266 630 2 016 142 264 000 57 487 788

9

x x x x x x

2

6 7 7 7 6 8 2 4 4 3 3 1 54

8 7 6 5 4 3

3

kr 5 000 000

kr

3

kr -5 470 010 1 52017778

54341545 -3 146 243

kr 0

2 1 0

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027


Appendix Exposure to locations in Q4-2016

Portfolio gross Portfolio grossrent rentby byarea

Skien sentrum

12 % 8%

Kjørbekk Porsgrunn Sentrum

8%

5% 4%

4%

45 %

Porsgrunn NĂŚringspark

52 % 27 %

Skjelsvik E18 Vestfold

Portfolio total space by area

4% 6%

25 %


Appendix Porsgrunn Sentrum Storgata 106 Tenant: Multi-tenant Total space: 1 577 m² 5,4 year Duration:


Appendix Skien - Kjørbekk Grønlikroken 5 Tenant: Multi-tenant Total space: 3 169 m² 3,1 year Duration:


Appendix Skien sentrum Hesselberggaten 4 Tenant: DNB, multi-tenant Total space: 2 209 m² 1,0 year Duration:

Torggata 8 Tenant: TA , multi-tenant Total space: 2 850 m² 5,1 years Duration:


Appendix Porsgrunn Skjelsvik E18 Versvikveien 6B Tenant: Furmanite AS Total space: 2 548 m² 7,2 year Duration:


Appendix Porsgrunn Næringspark Dokkveien 8 Tenant: Multi-tenant Total space: 5 853 m² 3,7 year Duration:

Dokkveien 10 Tenant: Multi-tenant Total space: 5 035 m² 4,7 year Duration:

Land for development Total space: 2 500 m² (Powerhouse Telemark)


Appendix Tønsberg (Kjelleveien 21) Vinkelbygget Tenant: Multi-tenant Total space: 10 365 m² 4,8 year Duration:

Sentralbygget Tenant: Multi-tenant Total space: 3 781 m² 7,8 year Duration:

Parkbygget Tenant: Multi-tenant Total space: 2 300 m² 2,2 year Duration:

Land for development Total space: 4 500 m² (Nordre Fokserød 14


Portfolio Report R8 Property Q4 2016