Entra Asa · OSL:ENTRA
Entra Asa — Q4 2022 Earnings Presentation
29 slides from Entra Asa's earnings presentation, Feb 10, 2023
Slide 1: Q4/FY 2022
Q4/FY 2022 Oslo,10 February 2023
Slide 2: Agenda
Agenda Highlights in the quarter Operations and market Financial update Closing remarks Q&A 2
Slide 3: Highlights in the quarter
Highlights in the quarter Key figures: (NOK million) Q4-22 Q4-21 Rental income 806 677 Net income from property management 320 392 Net value changes -511 2,832 Profit/loss before tax -206 3,216 Key events in the quarter: • Net letting of 4 million • Finalised two redevelopment and one newbuild proje
Slide 4: Agenda
Agenda Highlights in the quarter Operations and market Financial update Closing remarks Q&A 4
Slide 5: Letting and occupancy
Letting and occupancy Occupancy (%) • New and renewed leases of 131 million (58,200 sqm) (%) 100.0 97.9 98.1 • Terminated contracts of 76 million 97.8 97.5 97.7 97.2 97.5 97.6 97.4 97.4 97.3 97.3 97.0 97.1 97.0 97.5 96.7 96.6 96.5 96.6 96.5 96.3 96.3 96.0 96.1 • Net letting of 4 million 95.0 • Occup
Slide 6: Finalised redevelopment project in Tordenskiolds gate 12 in Oslo
Finalised redevelopment project in Tordenskiolds gate 12 in Oslo • Large redevelopment in Oslo CBD − Seafront, nearby Oslo City Hall • 13,000 sqm • 92 % let to blue chip law firm • Total project cost NOK 1,182 million (1,203 million at project start) • Yield on cost: 4.8 % (4.4 % at project start) T
Slide 7: Finalised newbuild project in Nygårdsgaten 91 and 93 in Bergen
Finalised newbuild project in Nygårdsgaten 91 and 93 in Bergen • Newbuild project in central Bergen • Next to Media City Bergen • 12,000 sqm • 85 % let (19 % pre-let at project start) • Total project cost NOK 633 million (619 million at project start) • Yield on cost: 6.0 % (5.3 % at project start)
Slide 8: Finalised redevelopment project in Møllendalsveien 6-8 in Bergen
Finalised redevelopment project in Møllendalsveien 6-8 in Bergen • Located in central Bergen • 14,200 sqm • 95 % let to public tenants (44 % pre-let at project start) • Total project cost NOK 677 million (636 million at project start) • Yield on cost: 5.4 % (5.4 % at project start) • BREEAM-NOR Exce
Slide 9: Status ongoing projects
Status ongoing projects Total project Yield on BREEAM-NOR/ Project area Occupancy cost1) Of which accrued1) cost2) Location BREEAM In-Use Completion (%) (NOKm) (sqm) (NOKm) (%) Redevelopment Stenersgata 1 Oslo Very good Q3-23 15,800 - 79 1,316 1,020 4.5 Schweigaards gate 15 Oslo Very good Q2-23 / Q1
Slide 10: Preparing for start of new-build in Holtermannsvei 1-13, phase 3
Preparing for start of new-build in Holtermannsvei 1-13, phase 3 Phase 3 15,500 sqm, 60 % pre let Phase 1 Finalised in Q1-20 11,700 sqm, 100 % let Phase 2 Finalised Q2 -23 20,900 sqm, 61 % pre let − Final step in Holtermannsveg 1-13 development − 15,500 sqm − 60 % pre let to Norwegian Broadcasting C
Slide 11: Sale of four properties
Sale of four properties Sørkedalsveien 6, Oslo Karenslyst Allé 8 A, Oslo Karenslyst Allé 8 B, Oslo Konggata 51, Drammen 21,840 sqm 2,830 sqm 5,380 sqm 3,580 sqm • Total transaction value: NOK 1.9 bn • ~ 2 % below book values as of 30.9.22 • Non-core assets, the three Oslo assets were acquired in the
Slide 12: Market development
Market development Rent and vacancy Market rental growth and vacancy in Oslo • Strong market rental growth of >10 % in 2022 12 % 10 % − Entra’s rental income adjusted with CPI of 6,5 % from 1 January 23 1) 8% 7.8 % 7.1 % 6.8 % 6.8 % 6.1 % 6.0 % 6.4 % 5.5 % 5.6 % 5.8 % 6% − Solid employment growth th
Slide 13: Market development
Market development Transactions and yields Prime yield Oslo 5% • Low activity in the transaction market in the second half of 2022 4.05 % 4.00 % 4.00 % 4% 3.80 % 3.70 % 3.70 % 3.70 % 3.86 % 3.30 % 3.30 % • Central assets with rent/value-add potential in favour 3% • Improving signs in financing marke
Slide 14: Agenda
Agenda Highlights in the quarter Operations and market Financial update Closing remarks Q&A 14
Slide 15: Key financials
Key financials NOK million Rental income Net income from property Profit/loss before tax management 900 600 781 783 788 806 800 4,500 677 433 445 3,583 700 3,216 392 406 400 3,000 600 320 1,500 500 400 0 300 200 -413 -206 -1,500 200 -3,000 100 -3,430 0 0 -4,500 Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 Q4 21 Q1
Slide 16: Key financials per share
Key financials per share NOK per share Cash Earnings1) EPRA NRV CAGR: 10 % CAGR: 12 % 10.0 250 235 230 9.2 9.2 9.0 8.8 8.8 225 218 8.4 210 207 8.1 8.0 8.0 8.1 8.0 8.0 8.2 8.3 205 8.0 7.8 7.9 7.9 7.8 200 189 194 198 7.5 7.2 7.0 6.8 7.0 175 165 6.6 6.3 154 156 159 5.8 6.0 148 153 6.0 150 143 143 147 5
Slide 17: Profit and loss statement
Profit and loss statement NOK million All amounts in NOK million Q4-22 Q4-21 2022 2021 Rental income 806 677 3,158 2,508 Operating costs -74 -62 -263 -234 Net operating income 732 614 2,895 2,274 Other revenues 44 21 112 73 Other costs -29 -10 -85 -43 Administrative costs -57 -71 -210 -210 Share of
Slide 18: Rental income development based on reported events
Rental income development based on reported events* NOK million 1 000 892 896 49 876 857 849 21 5 830 806 -5 750 500 250 - Q4 2022 Divestments Projects Net letting Other Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 * Does not constitute a forecast; aims to demonstrate the rental income developmen
Slide 19: Property value development
Property value development NOK million 1,503 80,608 661 472 78,930 -617 22 78,634 -363 Investment properties Investment in portfolio Divestments Value Other Investment properties Inventory properties JVs, associates and other Total market value 31.12 30.09 changes 31.12 investments 19
Slide 20: Financial update
Financial update Financing mix EPRA LTV* and ICR** NOK million EPRA LTV ICR 45 000 55 % 4.0 52.5% 40 000 3.5 Q4 activities and status 50 % 35 000 • Extended 4 billion in bank facilities 3.0 45 % 30 000 • Issued 820 million in commercial papers 2.5 40 % 2.5 • Total unutilised credit facilities of 6.5
Slide 21: Interest rate development
Interest rate development Entra’s nominal interest rate, including credit margins 4.40 % • 49 % of debt portfolio hedged at fixed rate 4.20 % 4.00 % • 4.7 years time to maturity of hedge portfolio (incl. 3.80 % fwd. start swaps) of 22.3 bn. (2.6 years for entire 3.60 % debt portfolio 40.8 bn) 3.40 %
Slide 22: Maturity of interest bearing debt next 24 months as of 31 December
Maturity of interest bearing debt next 24 months as of 31 December 8 000 6 686 226 6 000 • 4.3 years average time to maturity of debt 5 500 • 4.4 billion of debt maturing next 18 months − 1.1 billion in bank debt 4 000 − 3.3 billion in capital market instruments (bonds and CP) 6 460 • 6.5 billion of
Slide 23: Agenda
Agenda Highlights in the quarter Operations and market Financial update Closing remarks Q&A 23
Slide 24: Strategy
Strategy Profitable growth High customer Environmental satisfaction leadership Sustainable business development and operations 24
Slide 25: Strategic target: Profitable growth
Strategic target: Profitable growth Rental income and dividend per share Total asset value and EPRA NRV per share NOK mill Rental income + 80 % NOK EPRA NRV + 123 % NOK bn NOK 82,2 250 3 500 8,0 80 3 158 218 230 7,0 3 000 70 207 210 70,3 2 508 6,0 2 500 2 338 2 353 60 59,1 190 2 243 5,1 4,9 5,1 51,2
Slide 26: Strategic target: High customer satisfaction and occupancy
Strategic target: High customer satisfaction and occupancy Portfolio occupancy Customer satisfaction score 100 100 97.0 97.1 97,9 97,8 96.8 96.5 96,5 95.0 95 95 90 90 87 87 86 85 85 85 85 84 85 83 82 82 81 80 80 80 79 80 77 77 75 75 70 70 65 65 60 60 55 55 50 50 2015 2016 2017 2018 2019 2020 2021 20
Slide 27: Strategic target: Sustainable operations, environmental leadership
Strategic target: Sustainable operations, environmental leadership Management portfolio Project portfolio 160 70% 1200 Lifecycle emissions from projects finalized in 2022 (kgCO2/sqm) 155 vs certain pioneer environment projects 152 60% 150 58% 1000 Tordenskioldsgate 12 (2022) 143 53% Nygårdsgaten 91-
Slide 28: Closing remarks and outlook
Closing remarks and outlook • Strong Norwegian economy − No signs of macro changes impacting office demand • Office market dynamics continue to be favourable with low vacancy and limited new-build activity • Prime yields expected to level out around 4 % − Strong inflation and market rental growth ha
Slide 29: Next event
Next event 1th quarter results 25 April 2023 For more information see www.entra.no/investor-relations