Quarterly Report • Oct 19, 2021
Quarterly Report
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| All amounts in NOK million | Q3-21 | Q3-20 | YTD Q3-21 | YTD Q3-20 | 2020 | 2019 | 2018 |
|---|---|---|---|---|---|---|---|
| Rental income | 639 | 589 | 1 832 | 1 763 | 2 353 | 2 338 | 2 243 |
| Change period-on-period | 9 % | 2 % | 4 % | 1 % | 1 % | 4 % | 8 % |
| Net operating income | 581 | 543 | 1 660 | 1 609 | 2 142 | 2 149 | 2 058 |
| Change period-on-period | 7 % | 2 % | 3 % | 0 % | 0 % | 4 % | 8 % |
| Net income from property management1) | 402 | 383 | 1 142 | 1 089 | 1 451 | 1 471 | 1 434 |
| Change period-on-period | 5 % | 6 % | 5 % | 0 % | -1 % | 3 % | 14 % |
| Net value changes1) | 794 | 918 | 2 431 | 1 172 | 5 705 | 1 955 | 1 486 |
| Change period-on-period | -14 % | 95 % | 107 % | -15 % | 192 % | 32 % | -58 % |
| Profit before tax | 1 192 | 1 354 | 3 609 | 2 351 | 7 274 | 3 735 | 3 073 |
| Change period-on-period | -12 % | 50 % | 53 % | -13 % | 95 % | 22 % | -39 % |
| Profit after tax | 930 | 1 068 | 2 830 | 1 850 | 5 696 | 3 225 | 2 735 |
| Change period-on-period | -13 % | 48 % | 53 % | -16 % | 77 % | 18 % | -39 % |
| Market value of the property portfolio1) | 64 139 | 51 842 | 64 139 | 51 842 | 56 746 | 48 964 | 45 630 |
| Net nominal interest bearing debt1) | 26 059 | 20 380 | 26 059 | 20 380 | 20 930 | 19 585 | 18 941 |
| Loan to value1) | 40.7 % | 39.5 % | 40.7 % | 39.5 % | 37.0 % | 40.2 % | 41.3 % |
| Interest coverage ratio1) | 3.5 | 3.7 | 3.5 | 3.4 | 3.4 | 3.3 | 3.6 |
| Average outstanding shares (million) | 182.1 | 182.1 | 182.1 | 182.1 | 182.1 | 182.4 | 183.6 |
| All amounts in NOK per share | Q3-21 | Q3-20 | YTD Q3-21 | YTD Q3-20 | 2020 | 2019 | 2018 |
| EPRA NRV1) 2) | 205 | 165 | 205 | 165 | 189 | 154 | 144 |
| Change period-on-period | 24 % | 8% | 24 % | 8% | 23 % | 7 % | 10 % |
| EPRA NTA1) 2) | 202 | 163 | 202 | 163 | 187 | 153 | 142 |
| Change period-on-period | 24 % | 8% | 24 % | 8% | 23 % | 8 % | 10 % |
| EPRA Earnings1) | 1.59 | 1.52 | 4.51 | 4.69 | 5.73 | 5.81 | 5.59 |
| Change period-on-period | 5 % | 7 % | -4 % | 22 % | -1 % | 4 % | 7 % |
| Cash Earnings1) | 2.18 | 2.08 | 6.21 | 5.91 | 7.83 | 8.01 | 7.74 |
| Change period-on-period | 5 % | 6 % | 5 % | 0 % | -2 % | 3 % | 14 % |
| Dividend3) | 0.00 | 0.00 | 2.50 | 2.40 | 4.90 | 4.70 | 4.50 |
| Change period-on-period | 0 % | 0 % | 4 % | 4 % | 4 % | 4 % | 10 % |
Reference
1) Refer to section "Alternative performance measures" for calculation of the key figure
2) Entra's calculation of EPRA NAV metrics are modified from Q3-21 to include dividend approved, but not paid at period end. See page 28 for further information. Figures for previous periods are adjusted from Q3-21.
3) Entra pays semi-annual dividends. Dividend for 2020 of 4.90 per share constitute dividend of 2.40 for the first half 2020 and dividend of 2.50 for the second half of 2020. Dividend year to date Q3-21 relates to approved on 13 July and paid on 12 October.
Rental income was up 9 per cent from 589 million in the third quarter of 2020 to 639 million in the third quarter of 2021, and up 4 per cent from 1,763 million to 1,832 for the first nine months of 2021. The changes in rental income can be explained by the factors in the income bridge below.
| All amounts in NOK million | Q3-20 Q3-21 |
YTD Q3-20 YTD Q3-21 |
|---|---|---|
| Rental income previous period | 589 | 1 763 |
| Development projects | -2 | -37 |
| Acquisitions | 38 | 52 |
| Divestments | -1 | -2 |
| CPI growth | 4 | 12 |
| Like-for-like growth above CPI | 8 | 34 |
| Other | 3 | 10 |
| Rental income | 639 | 1 832 |
Net contribution from development projects was negative 2 million in the quarter compared to the same quarter last year. During the last 12 months, Entra has finalised the redevelopment of Universitetsgata 2, Grønland 32, Holtermanns veg 1-13 phase 1 and Kristian Augusts gate 13, contributing of total 8 million on rental income compared to the same quarter last year. However, Møllendalsveien 6-8 in Bergen and parts of Stenersgata 1 in Oslo have been vacated in the same period for redevelopment and has thus reduced the rental income by 10 million.
The acquisition of Lagårdsveien 6 and Kanalpiren in Stavanger, Møllendalsveien 1A and Lars Hilles gate 19 in Bergen and Hagegata 27, Fyrstikkalléen 1 and Universitetsgata 11 (Hotel Savoy) in Oslo contributed with rental income of 38 million compared to the same quarter last year, whereas divestment of Tollbodallmenningen 2A in Bergen in February 2021 reduced rental income by 1 million.
Compared to last year, rental income has been positively affected by an underlying like-for-like growth of 2.1 per cent (12 million) for the quarter and 2.8 per cent (46 million) for the first nine months, of which the underlying CPI adjustment was 0.7 per cent (12 million). Near all of Entra's lease contracts are 100 per cent linked to positive changes in CPI. The annual adjustment is mostly made on a November to November basis.
Other effects stems from an administrative fee of 3 million per quarter during 2021.
Average 12 months rolling rent per square meter was 2,176 (2,157) as of 30.09.21. The increase in 12 months rolling rent over the last three quarters is mainly a result of acquisitions and finalised projects.
Compared to the same quarter last year, the occupancy rate went down by 10 basis points to 97.3 per cent. The market rental income of vacant space as of 30.09.21 was approximately 76 million on an annualised basis.
Gross letting, including re-negotiated contracts, was 133 million in the quarter of which 29 million is attributable to letting in the project portfolio.
Lease contracts with an annual lease of 102 million were terminated in the quarter, of which 72 million is attributable to Brynsengfaret 4-6 where The Norwegian Public Roads Administration notified that they will not renew their contract from Q3 2023.
Net letting, defined as new lease contracts plus lease-up on renegotiated contracts less terminated contracts, came in at negative 44 million (positive 7 million) in the quarter. The timing difference between net letting in the management portfolio in the quarter and its effect on the financial results is normally 6- 12 months, while new contracts signed in the project portfolio tend to have an even later impact on the results. Please see the project development section for further information regarding project completion.
RENTAL INCOME DEVELOPMENT
The graph above shows the estimated development of contracted rental income based on all reported events, including income effect from acquisitions and divestments, development projects, net letting based on new and terminated contracts in the management portfolio, and other effects such as estimated CPI adjustments. It does not reflect any letting targets on the vacant areas in the portfolio or on contracts that will expire, but where the outcome of any renegotiation process is not known, i.e. not yet reported in "Net letting". The graph therefore does not constitute a forecast, but rather aims to demonstrate the rental income trend in the existing contract portfolio on the balance sheet date based on all reported events.
Total operating costs amounted to 58 million (46 million) in the quarter, and is split as follows:
| All amounts in NOK million |
Q3-21 | Q3-20 | YTD Q3-21 |
YTD Q3-20 |
|---|---|---|---|---|
| Maintenance Tax, leasehold, |
8 | 9 | 22 | 21 |
| insurance | 17 | 13 | 47 | 42 |
| Letting and prop. adm. | 22 | 12 | 65 | 55 |
| Direct property costs | 11 | 12 | 37 | 36 |
| Operating costs | 58 | 46 | 172 | 154 |
As a consequence of the effects explained above, net operating income came in at 581 million (543 million) in the quarter.
Other revenue were 15 million (31 million) in the quarter and other costs were 7 million (20 million). Other revenue and other costs mainly consists of services provided to tenants and income and costs related to inventory properties (properties in the Bryn portfolio which is expected to be zoned for residential development and subsequently sold to a third party at a predetermined price).
Administrative costs amounted to 43 million (42 million) in the quarter.
| All amounts in NOK million |
Q3-21 | Q3-20 | YTD Q3-21 |
YTD Q3-20 |
|---|---|---|---|---|
| Profit from property management |
-4 | 0 | -3 | 2 |
| Other income and costs | -3 | 52 | 37 | 90 |
| Share of profit from associates and JVs |
-7 | 53 | 34 | 92 |
Share of profit from associates and JVs in the quarter is impacted by opening of the Rebel concept in Rebel U2. See the section Partly owned companies for a detailed breakdown of the results from associates and JVs.
| All amounts in NOK million |
Q3-21 | Q3-20 | YTD Q3-21 |
YTD Q3-20 |
|---|---|---|---|---|
| Interest and other finance income |
3 | 1 | 6 | 7 |
| Interest and other finance expense |
-144 | -130 | -401 | -424 |
| Net realised financials | -141 | -129 | -396 | -417 |
Net realised financials have increased in the third quarter mainly as a result of higher interest bearing debt.
Net income came in at 398 million (435 million) in the quarter. When including only the profit from property management in the results from associates and JVs, net income from property management for the Group was 402 million (383 million). This represents an increase of 5 per cent. For calculation of Net income from property management, see the section Alternative performance measures.
(Annualised, rolling 4 quarters)
Net value changes amounted to 794 million (918 million) in the quarter.
The valuation of the property portfolio resulted in net positive value changes of 780 million (892 million) in the quarter. 322 million of the total value changes in the third quarter of 2021 is related to yield effects, primarily in Trondheim. 165 million is related to projects, mainly explained by reduced risk as each project is moving towards completion in combination with improved market conditions. 142 million is attributable to increased markets rents. 121 million is a result of new contracts signed in the quarter, partly offset by effects from terminated contracts. The remaining 30 million stems from other property related changes.
Net changes in value of financial instruments was 14 million (26 million) in the quarter. The positive value change is mainly explained by higher long-term interest rates, partly offset by negative value change from two bond switch transactions executed in the third quarter.
Tax payable of 4 million (3 million) in the quarter is related to the partly owned entity Papirbredden in Drammen. The change in deferred tax was -259 million (-283 million).
Profit before tax was 1,192 million (1,354 million) in the quarter. Profit after tax was 930 million (1,068 million), which also equals the comprehensive income for the period.
EPRA Earnings amounted to 290 million (276 million) in the third quarter.
The Group's assets amounted to 66,920 million (54,441 million) as at 30.09.21. Of this, investment properties amounted to 64,163 million (51,965 million). The property Borkenveien 1-3 in Sandvika is classified as held for sale at 30 September 2021 as the tenant has exercised the option to acquire the property.
Inventory properties of 467 million (418 million) at the end of the quarter relates to the properties expected to be zoned for residential development and subsequently sold to a third party at a predetermined price.
Interest bearing debt were 25,992 million (20,688 million) as of 30.09.21, of which 19,579 million were bonds outstanding, 5,263 million were bank financing and 1,150 million were commercial papers.
Book equity totalled 31,074 million (25,442 million) at 30.09.21. EPRA NRV per share was 205 (165) and EPRA NTA 202 (163).
Net cash flow from operating activities came in at 481 million (561 million) in the quarter. The decrease mainly relates to working capital movements.
The net cash flow from investments was -1,134 million (-505 million) in the quarter. Purchase of investment properties of -167 million (-134 million) in the quarter is mainly related to the acquisition of Universitetsgata 11 (Hotel Savoy) in Oslo. The cash effect of investment in and upgrades of investment properties is -486 million (-367 million) in the quarter. Investments in associates and JVs is related to Entra's increase in the share in Oslo S Utvikling from 33.3 % to 50 %.
Net cash flow from financing acitivites was 805 million (-12 million) in the quarter. During the quarter, Entra had a net nominal increase in bond financing of 2,936 million, with a corresponding cash effect of 2,639 million, partly offset by a net decrease in bank and commercial paper financing of 1,781 million and 50 million, respectively.
The net change in cash and cash equivalents was 152 million (44 million) in the quarter.
During the third quarter, Entra's nominal interest bearing debt increased by 1,105 million to 26,315 million. The change in interest bearing debt came from an increase in bond financing of 2,936 million, partly offset by a decrease in bank and
commercial paper financing of 1,781 million and 50 million, respectively.
In the quarter, Entra issued four new green bonds with total of 6,515 million. Entra also re-opened an eight and nine year floating rate green bond issue with 700 million and 150 millon, respectively. The weighted average maturity of the bonds issued was 6.9 years. The green bonds are earmarked funding of a pool of properties/projects with high environmental standards and a certification from BREEAM with a minimum certification of "excellent". In the process of increasing the bond financing maturity, Entra repurchased 4,429 million of outstanding bonds with a weighted average maturity of 3.9 years. In addition, Entra issued commercial paper loans of 500 million.
Further, the weighted average maturity of Entra's bank facilities have been extended in the quarter by using extension options in the loan agreements. Bank facilities with a total volume of 8,250 million have thus been extended, bringing the weighted average maturity for these facilities up to 4.2 years as of 30.09.2021 (3.3 years as of 30.06.2021).
As of 30.09.21, net nominal interest bearing debt after deduction of liquid assets of 256 million (302 million) was 26,059 million (20,380 million).
The average remaining term for the Group's debt portfolio was 6.1 years at 30.09.21 (5.5 years as of 30.09.20, 5.0 years as of 31.06.21). The calculation takes into account that available long-term credit facilities can replace short-term debt.
Entra's financing is mainly based on negative pledge of the Group's assets, which enables a broad and flexible financing mix. As of 30.09.21, 80 per cent (71 per cent) of the Group's financing came from debt capital markets.
| Maturity profile | 0-1 yrs | 1-2 yrs | 2-3 yrs | 3-4 yrs | 4+ yrs | Total | % |
|---|---|---|---|---|---|---|---|
| Commercial papers (NOKm) | 1 150 | 0 | 0 | 0 | 0 | 1 150 | 4 |
| Bonds (NOKm) | 1 182 | 2 742 | 924 | 600 | 14 438 | 19 886 | 76 |
| Bank loans (NOKm) | 0 | 1 025 | 275 | 2 070 | 1 908 | 5 279 | 20 |
| Total (NOKm) | 2 332 | 3 767 | 1 199 | 2 670 | 16 346 | 26 315 | 100 |
| Unutilised credit facilities (NOKm) | 0 | 0 | 1 500 | 4 430 | 2 250 | 8 180 | |
| Unutilised credit facilities (%) | 0 | 0 | 18 | 54 | 28 | 100 |
| All amounts in NOK millions | 30.09.2021 | Finance policy |
|---|---|---|
| Loan-to-value (LTV) | 40.7 % | Below 50 per cent over time |
| Interest coverage ratio (ICR) | 3.5 | Min. 1.8x |
| Debt maturities <12 months | 9 % | Max 30% |
| Maturity of hedges <12 months | 52 % | Max 60% |
| Average time to maturity (hedges) | 2.8 | 2-6 years |
| Back-stop of short-term interest bearing debt | 351 % | Min. 100% |
| Average time to maturity (debt) | 6.1 | Min. 3 years |
The average interest rate1) of the debt portfolio was 2.12 per cent (2.33 per cent) as at 30.09.21. The change in average interest rate stems mainly from repurchase of outstanding bonds with high coupon rates.
48 per cent (52 per cent) of the Group's financing was hedged at a fixed interest rate as at 30.09.21 with a weighted average maturity of 2.75 years (2.6 years).
The Group manages interest rate risk through floating-to-fixed interest rate swaps and fixed rate bonds. The table below shows the maturity profile and contribution from these fixed rate instruments, as well as the maturity profile for credit margins on debt.
| <1 year | 1-2 yrs | 2-3 yrs | 3-4 yrs | 4-5 yrs | 5-6 yrs | 6-7 yrs | 7-8 yrs | 8-9 yrs 9-10 yrs | >10 yrs | Total | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fixed rate instruments2) (NOKm) | 1 332 | 745 | 1 000 | 1 200 | 4 229 | 2 460 | 1 000 | 1 400 | 400 | 100 | 0 | 13 866 |
| Interest rate (%) | 1.83 | 2.81 | 2.55 | 2.23 | 1.64 | 2.22 | 0.92 | 1.50 | 5.63 | 1.75 | 0.00 | 1.99 |
| Forward starting swaps³) (NOKm) | 1 000 | 1 000 | ||||||||||
| Interest rate (%) | 1.75 | 1.75 | ||||||||||
| Tenor (years) | 7 | 7 | ||||||||||
| Maturity credit margins (NOKm) | 5 241 | 2 742 | 924 | 1 470 | 5 029 | 2 094 | 2 000 | 2 900 | 2 100 | 1 815 | 0 | 26 315 |
| Credit margin (%) | 1.09 | 0.90 | 0.80 | 0.86 | 0.73 | 0.86 | 0.84 | 0.75 | 0.60 | 0.91 | 0.00 | 0.85 |
¹ ) Average reference rate (Nibor) is 0.46 per cent as of the reporting date.
² ) Excluding forward starting swaps and credit margins on fixed rate bonds (credit margins are displayed in the table to the right).
³ ) The table displays future starting point, notional principle amount, average fixed rate and tenor for forward starting swaps.
Entra's management portfolio consists of 82 properties with a total area of approximately 1.2 million square meters. As of 30.09.21, the management portfolio had a market value of 58.2 billion. The occupancy rate was 97.3 per cent (97.4 per cent). The weighted average lease term for the Group's leases was 6.9 years (6.9) for the management portfolio and 7.1 years (6.9) when the project portfolio is included. For the management portfolio, the public sector represents approximately 58 per cent of the total rental income. The entire property portfolio consists of 96 properties with a market value of 64.1 billion.
Entra's properties are valued by two external appraisers (Akershus Eiendom/JLL and Newsec) on a quarterly basis. The market value of the portfolio in Entra's balance sheet is based on the average of the appraisers' valuation. Valuation of the management portfolio is performed on a property by property basis, using individual DCF models and taking into account the property's current characteristics combined with the external
appraiser's estimated return requirements and expectations on future market development.
The market value is defined as the external appraiser's estimated transaction value of the individual properties on valuation date. The project portfolio is valued based on the same principles, but with deduction for remaining investments and perceived risk as of valuation date. The land and development portfolio is valued based on actually zoned land.
Year-on-year, the portfolio net yield is reduced from 4.76 to 4.22 per cent. 12 months rolling rent per square meter increased from 2,157 to 2,176 mainly driven by projects that are finalized in Central Oslo and by transactions of new properties to the portfolio.
The market rent per square meter has increased by 3 per cent from the third quarter of 2020, from NOK 2,249 to 2,317.
| Properties | Area | Occupancy | Wault | Market value | 12 months rolling rent | Net yield1) | Market rent | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| (#) | (sqm) | (%) | (year) | (NOKm) | (NOK/sqm) | (NOKm) | (NOK/sqm) | (%) | (NOKm) | (NOK/sqm) | |
| Oslo | 39 | 650 883 | 97.9 | 7.2 | 38 551 | 59 229 | 1 629 | 2 502 | 3.93 | 1 761 | 2 705 |
| Trondheim | 11 | 158 737 | 96.3 | 6.5 | 5 558 | 35 012 | 290 | 1 828 | 4.90 | 285 | 1 795 |
| Bergen | 8 | 115 640 | 96.5 | 5.2 | 5 330 | 46 089 | 238 | 2 058 | 4.10 | 289 | 2 499 |
| Sandvika | 9 | 98 990 | 97.6 | 7.0 | 3 176 | 32 087 | 171 | 1 729 | 5.12 | 155 | 1 567 |
| Stavanger | 7 | 119 297 | 93.3 | 6.1 | 3 005 | 25 192 | 175 | 1 470 | 5.29 | 189 | 1 587 |
| Drammen | 8 | 69 470 | 98.9 | 8.7 | 2 595 | 37 347 | 136 | 1 956 | 4.95 | 132 | 1 895 |
| Management portfolio |
82 | 1 213 015 | 97.3 | 6.9 | 58 215 | 47 992 | 2 639 | 2 176 | 4.22 | 2 811 | 2 317 |
| Project portfolio | 9 | 132 784 | 9.8 | 5 026 | 37 854 | ||||||
| Development sites | 5 | 109 847 | 0.2 | 898 | 8 175 | ||||||
| Property portfolio | 96 | 1 455 646 | 7.1 | 64 139 | 44 062 |
1) See the section "Definitions". The calculation of net yield is based on the appraisers' assumption of ownership costs, which at 30.09.21 is 7.0 per cent of market rent.
During the third quarter, Entra signed new and renegotiated leases with an annual rent totaling 133 million (51,100 square meters) and received notices of termination on leases with an annual rent of 102 million, of which 72 million is attributable to Brynsengfaret 4-6, where The Norwegian Public Roads
Administration has notified that they will not renew their contract. Net letting was negative 44 million in the quarter. Net letting is calculated as the annualised rent of new lease contracts plus lease-up on renegotiated contracts less terminated contracts.
Entra has invested a total of 788 million (336 million) in the portfolio of investment properties in the third quarter, and 5,132 million (1,374 million) in the first nine months of 2021. The decomposition of the investments is as follows:
| All amounts in NOK million | Q3-21 | Q3-20 | YTD Q3-21 | YTD Q3-20 | 2020 |
|---|---|---|---|---|---|
| Acquisitions | 168 | - | 3 537 | 156 | 193 |
| Developments | 511 | 173 | 1 269 | 997 | 1 306 |
| - Newbuild projects | 143 | -28 | 282 | 46 | 83 |
| - Redevelopment projects1) | 285 | 223 | 769 | 935 | 1 176 |
| - Refurbishment1) | 83 | -23 | 219 | 15 | 46 |
| Investment properties | 93 | 155 | 287 | 198 | 274 |
| - Incremental lettable space | - | - | - | - | - |
| - No incremental lettable space and tenant incentives | 43 | 92 | 197 | 124 | 186 |
| - Other material non-allocated types of expenditure | 50 | 63 | 90 | 74 | 88 |
| Capitalised interest | 15 | 8 | 39 | 23 | 35 |
| Total Capital Expenditure | 788 | 336 | 5 132 | 1 374 | 1 807 |
| Conversion from accrual to cash basis | -135 | 164 | -166 | 173 | 70 |
| Total Capital Expenditure on cash basis | 653 | 500 | 4 966 | 1 547 | 1 877 |
1)Also includes tenant alterations and maintenance capex when this is done as a part of asset redevelopment or refurbishment
The portfolio of ongoing projects with a total investment exceeding 50 million is presented below.
| Ownership (%) | Location | Expected completion |
Project area (sqm) |
Occupancy (%) |
Estimated total project cost 1) (NOKm) |
Of which accrued1) (NOKm) |
Yield on cost2) (%) |
|
|---|---|---|---|---|---|---|---|---|
| Redevelopment | ||||||||
| St. Olavs plass 5 | 100 | Oslo | Q3-22 | 16 500 | 68 | 1 148 | 863 | 4.8 |
| Tordenskiolds gate 12 | 100 | Oslo | Q3-22 | 13 000 | 92 | 1 203 | 807 | 4.4 |
| Stenersgata 1 | 100 | Oslo | Q2-23 | 15 800 | 57 | 1 166 | 731 | 4.5 |
| Schweigaards gate 15 | 100 | Oslo | Q2-23 / Q1-24 | 22 900 | 34 | 1 362 | 666 | 4.7 |
| Møllendalsveien 6-8 | 100 | Bergen | Q4-21 / Q4-22 | 14 200 | 95 | 636 | 459 | 5.2 |
| Newbuild | ||||||||
| Nygårdsgaten 91/93 | 100 | Bergen | Q4-22 | 11 900 | 14 | 619 | 339 | 5.3 |
| Holtermanns veg 1-13 phase 2 | 100 | Trondheim | Q2-23 | 20 900 | 29 | 703 | 202 | 5.7 |
| Refurbishment | ||||||||
| Hagegata 22-24 | 100 | Oslo | Q4-21 | 10 100 | 100 | 433 | 414 | 5.5 |
| Total | 125 300 | 59 3) | 7 269 | 4 480 |
1) Total project cost (including book value at date of investment decision/cost of land), excluding capitalized interest cost
2) Estimated net rent (fully let) at completion/total project cost (including cost of land)
3) Weighted average occupancy of the project portfolio
At St. Olavs plass 5, Entra is redeveloping a 16,500 sqm office property located near Tullinkvartalet in Oslo. The project, is scheduled for completion in Q3 2022 with occupancy currently at 68 per cent. The project is planned with a BREEAM-NOR Very Good classification.
In the middle of Oslo's central business district, Entra is redeveloping Tordenskiolds gate 12 for completion in Q3 2022. The property is 13,000 sqm and is 92 per cent pre-let.
Entra is also redeveloping 15,800 sqm in Stenersgata 1. This is the first phase of a redevelopment project comprising the office spaces. The project is 57 per cent pre-let. Tenant optionality has conservatively been taken into consideration in the occupancy rate. The project is expected to be completed in Q2 2023 with a BREEAM-NOR Very Good classification.
Schweigaards gate 15 is a 22,900 sqm office building located near Oslo central station. The redevelopment is estimated for completion in Q2 2023. The project is 34 per cent pre-let.
Entra is further redeveloping the 14,200 sqm property in Møllendalsveien 6-8 in Bergen. The project is now 95 per cent pre-let to two public tenants on 10-year contracts. The property is redeveloped in two phases and will be completed in Q4 2021 and Q4 2022 respectively.
Entra is building a new 11,900 sqm office building at Nygårdsgaten 91/93 in central Bergen. The project is planned for completion in Q4 2022, and the project is currently 14 per cent pre-let. The project aims for a BREEAM-NOR Excellent classification.
In Holtermanns veg 1-13 in Trondheim, Entra is constructing a 20,900 sqm office building, this is the second of three planned buildings totaling 48,000 sqm. This second building is currently 29 per cent pre-let. Expected completion of this building is in Q2 2023. This project aims for a BREEAM-NOR Excellent classification.
In Tøyen in Oslo, Entra is refurbishing 10,100 sqm in Hagegata 22-24. The office space going into refurbishment makes up almost half of the building area, and occupancy in the project space will remain at about 85 per cent during the construction period. The project is 100 per cent pre-let and expected to be completed in Q4 2021.
In Tullinkvartalet in Oslo, Entra has built a new 21,900 sqm office property in Universitetsgata 7-9. Occupancy currently stands at 99 per cent, and Entra has set out high environmental ambitions for the project, aiming for a BREEAM-NOR Excellent classification.
Next to Tullinkvartalet, Entra re-developed Universitetsgata 2 which will be housing Rebel a hub for tech companies managed 50/50 by Entra and an external partner. The 28,100 sqm building will consist of office spaces, co-working areas, a conference centre and restaurants. Occupancy is currently at 96 per cent for the office space.
Entra actively seeks to improve the quality of its property portfolio and focuses on acquisitions of selected properties and urban development projects in specific areas within its four core markets: Oslo and the surrounding region, Bergen, Trondheim and Stavanger. Targeted locations include both areas in the city centers and selected clusters on public transportation hubs outside the city centers, allowing Entra to offer rental opportunities at a price range that fits its customer base. Entra's experience, financial strength and knowledge of its tenants makes the company well positioned to make acquisitions that meets these criteria. The acquisition and divestment strategy is flexible, allowing Entra to adapt to feedback from customers and market changes, and to create and respond to market opportunities as they arise.
| Acquired properties | Area | Transaction quarter |
No of sqm | Transaction value |
Closing quarter |
|---|---|---|---|---|---|
| Universitetsgata 11 (Hotel Savoy) | Oslo | Q3 2021 | 5 550 | 185 | Q3 2021 |
| 16.7 % of Oslo S Utvikling | Oslo | Q2 2021 | - | 475 | Q3 2021 |
| Lars Hilles gate 19 | Bergen | Q2 2021 | 5 900 | 298 | Q2 2021 |
| Fyrstikkalléen 1 | Oslo | Q2 2021 | 39 640 | 2 399 | Q2 2021 |
| Kanalpiren (through 50 % owned company Hinna Park Eiendom) | Stavanger | Q1 2021 | 25 900 | 375 | Q2 2021 |
| Møllendalsveien 1A | Bergen | Q1 2021 | 5 800 | 208 | Q2 2021 |
| Lagårdsveien 6 | Stavanger | Q1 2021 | 13 600 | 126 | Q1 2021 |
| Østensjøveien 29 | Oslo | Q4 2020 | 2 000 | 44 | Q4 2020 |
| Hagegata 27 (parking) | Oslo | Q3 2020 | - | 36 | Q3 2020 |
| Total | 98 390 | 4 146 | |||
| Transaction | Transaction | Closing | |||
| Divested properties | Area | quarter | No of sqm | value | date |
| Nytorget 1 (sold to 50 % owned company Hinna Park Eiendom) | Stavanger | Q2 2021 | 5 150 | 92 | Q2 2021 |
| Tollbodallmenningen 2A | Bergen | Q1 2021 | 1 800 | 40 | Q1 2021 |
| Total | 6 950 | 132 |
Entra and Drammen Kommune Eiendomsutvikling own Papirbredden Eiendom AS. The company owns six properties totalling 61,100 sqm and a future development potential of 60,000 sqm in Drammen.
Entra and Camar Eiendom own Hinna Park Eiendom AS. The company owns five office properties totalling 67,000 sqm and development potential for two new office properties of 48,000 sqm. The company is consolidated in the Group's financial statements as Entra has a controlling vote on the Board of Directors.
Entra and Oslo Pensjonsforsikring (OPF) own Entra OPF Utvikling AS. The company owns two office properties totalling 59,800 sqm. The company is consolidated in the Group's financial statements as Entra has a controlling vote on the Board of Directors.
Rebel U2 AS provides facility management services at Universitetsgata 2 in Oslo – with full-service solutions, flexible and short-term leases, co-working, conferences and events.
OSU is a property development company that is undertaking primarily residential development in Bjørvika, Oslo's CBD East. In July 2021, Entra increased its share in OSU from 33.3 % to 50 %.
| Papirbredden | Hinna Park | Entra OPF | Total consolidated |
Oslo S | Total associated | |||
|---|---|---|---|---|---|---|---|---|
| All amounts in NOK million | Eiendom AS | Eiendom AS | Utvikling AS | companies | Utvikling AS | Rebel U2 AS | Other | companies & JVs |
| Share of ownership (%) | 60 | 50 | 50 | 50 | 50 | |||
| Rental income | 29 | 25 | 36 | 89 | 0 | 6 | 1 | 7 |
| Net operating income | 28 | 21 | 32 | 81 | -1 | -1 | 2 | 1 |
| Net income | 23 | 8 | 32 | 63 | -8 | -9 | -2 | -19 |
| Net value changes | 9 | 9 | -1 | 17 | 0 | 0 | 0 | 0 |
| Profit before tax | 32 | 17 | 30 | 79 | -8 | -9 | -2 | -19 |
| Tax | -7 | -2 | -7 | -15 | 2 | 2 | 0 | 4 |
| Profit for the period | 25 | 15 | 24 | 64 | -6 | -7 | -1 | -15 |
| Non-controlling interests | 10 | 8 | 12 | 29 | ||||
| Entra's share of profit1) | -3 | -4 | -1 | -7 | ||||
| Book value | 1 008 | 5 | 21 | 1 034 |
1) Recognised as Share of profit from associates and JVs
The transaction market in Norway is very active and competitive with a total transaction volume of around 87 billion year-to-date 2021. This is expected to continue also in the fourth quarter, and 2021 might thus see record high transaction volumes. Within the office segment, long, secure cash flows, value add opportunities and development projects/sites attract strong investor interest. Both national and international investors are buyers.
The financing market continues to be well functioning, particularly for solid counterparties like Entra. Norway's Central Bank reduced the policy rate by 1.5 per cent to 0 per cent during the spring of 2020 and as a result, yields contracted significantly. Despite that the Central Bank increase the policy rate to 0.5 per cent, and has signalled further increases over the next 12 months, and that long term interest rates also has increased during the quarter, the prime yield remains at 3.30 per cent according to Entra's consensus report. The spread to regional markets has narrowed with prime yield in Bergen reaching all-time low at 3.75 per cent.
Source: Entra Consensus report, Q3 2021
According to Entra's Consensus report, the Oslo office vacancy is expected to level out at around 7 per cent by the end of this year as economic activity and employment growth continue to pick up post Covid-19. The new-build volume for the coming years is relatively limited, particularly in the city centre of Oslo. As a result, vacancy in Oslo is expected to decrease slightly and rental growth is expected to increase again after a flattish period during the Covid-19 pandemic.
Bergen has proven to be robust during the Covid-19 pandemic. The overall office vacancy is currently around eight per cent and six pr cent in the city centre There is limited supply of modern premises in the city centre and fairly strong demand. Rent levels for high quality buildings in the city centre have increased over the last years, whereas the normal segment has remained more stable.
In Trondheim, the overall office vacancy is currently around eight per cent. Vacancy is highest in the fringe areas of the city. As in Bergen, rent levels in the city centre of Trondheim have increased over the last years, while there is a downward pressure on rents in the fringe areas.
The Stavanger area has been more challenging due to the volatility in the oil and gas sector on top of the Covid-19 situation. Overall vacancy is currently around 14 per cent, and there is downward pressure on rent levels in the main oil and gas intensive areas such as Forus. In the city centre the vacancy is around 11 per cent. For the city centre and at Hinna Park, there is demand for modern, flexible and centrally located office premises, and rent levels have held up well.
| 2019 | 2020 | 2021e | 2022e | 2023e | 2024e | |
|---|---|---|---|---|---|---|
| Vacancy Oslo, incl. Fornebu and Lysaker (%) | 5.5 | 6.8 | 7.1 | 6.7 | 6.7 | 6.7 |
| Rent per sqm, high standard Oslo office | 3 610 | 3 544 | 3 627 | 3 770 | 3 877 | 3 980 |
| Prime yield (%) | 3.7 | 3.3 | 3.3 | 3.4 | 3.5 | 3.5 |
Source: Entra Consensus report, Q3 2021
At 30.09.21 the Group had 182 (181) employees.
In Q3 2021, Entra had 0 injuries with long term absence from work in the ongoing projects. Entra has a continuous HSE focus and works continually to avoid injuries both in on-going projects and in the operations. Entra had an LTIF rate (number of accidents with lost time per million hours worked in last 12 months) on ongoing projects of 5.7 at the end of the third quarter 2021 (4.8 at the end of the third quarter 2020).
Entra assesses risk on an ongoing basis, primarily through semi-annually comprehensive reviews of the Group's risk maps, which includes assessments of all risk factors in collaboration with all levels of the organization. Each risk factor is described and presented with the possible negative outcome given an increased probability of a situation to occur. Entra's main risk factors consist of both financial and nonfinancial risk. A thorough description and analysis is included on pages 28-39 in the 2020 annual report.
Entra's share capital is NOK 182,132,055 divided into 182,132,055 shares, each with a par value of NOK 1 per share. Entra has one class of shares and all shares provide equal rights, including the right to any dividends.
As of 15 October 2021, Entra had 4,615 shareholders. Norwegian investors held approximately 10 per cent of the share capital. The 10 largest shareholders (of which most are nominee accounts) as registered in VPS on 15 October 2021 were:
| Verdipapirfondet Alfred Berg Gambak SUM 10 LARGEST SHAREHOLDERS |
0.8% 75.0% |
|---|---|
| State Street Bank and Trust (Nominee) | 0.8% |
| JPMorgan Chase Bank (Nominee) | 0.9% |
| J.P. Morgan Securities (Nominee) | 1.0% |
| State Street Bank and Trust (Nominee) | 1.0% |
| Danske Invest Norske | 1.0% |
| The Bank of New York Mellon (Nominee) | 1.4% |
| State Street Bank and Trust (Nominee) | 2.6% |
| Castellum AB | 31.7% |
| Fastighets AB Balder | 33.7% |
| Shareholder | % holding |
On 12 October 2021, Entra paid out a semi-annual dividend of NOK 2.50 per share. The share was traded ex right to receive the dividend from 4 October 2021.
On 12 October 2021, Fastighets AB Balder ("Balder") acquired in total 610,059 shares in Entra ASA. Following the acquisition, Balder holds shares equalling 33.67 % of the shares and votes in Entra ASA. The acquisition has triggered an obligation for Balder to make a mandatory offer to acquire all shares not held by Balder within four weeks.
The Norwegian society and office market has been less affected by Covid-19 than most other countries, and Entra has proved to be very resilient during the pandemic. The vaccine program in Norway has progressed according to plan, and 86 per cent of the adult population is currently fully vaccinated. In August, all remaining restrictions were lifted. Office rents have held up well through the pandemic, and the activity in the letting market has picked up. The investment market is strong and competitive, and prime yields remain stable.
Entra owns an unparalleled portfolio of modern, efficient and large office assets on central locations in connection with public transportation hubs. The weighted average unexpired lease term (WAULT) is almost seven years, and the occupancy rate is 97.3 per cent. The company offers investors superior cash flow visibility and quality with 58 per cent of rental income from public sector tenants with AAA credit rating.
Entra's operational platform and organisation has placed the company consistently amongst the top three performers in the annual Norwegian Tenant Index ranking of Norwegian landlords. Entra is thus well positioned in a solid Norwegian economy supported by strong public funding and a property market with low office vacancy rates and expectations for continued rental growth.
Going forward, the office market is expected to experience changes in workplace strategies and office layouts to accommodate a more mobile and digital way of working. We expect higher tenants' demand for more flexibility and somewhat changed modus operandi for many office users. This could also provide opportunities benefitting large and professional landlords like Entra.
Sustainability has been an integrated part of Entra's business model for more than 10 years. Entra is working actively to reduce the CO2 footprint of its property portfolio and has a firm ambition to become a net zero carbon company by 2030. Assets representing almost 60 per cent of the value of the management portfolio are, or in the process of being, BREEAM certified. Entra issued its first green bond in 2016 and currently has 55 per cent of its debt portfolio in green bonds and green bank loans.
Profitable project development has historically been the company's major lever for growth, and Entra has a strong track record of delivering attractive newbuild and redevelopment projects with significant value creation. The portfolio of large, ongoing development projects currently consists of 8 assets totalling 125,000 sqm. Fully let, projects will add net rental income of more than 350 million, phased in during 2022-2024.
Entra has a strong balance sheet, a well staggered debt maturity profile, and a diversified financing mix with an ample supply of unutilized credit facilities. Entra will actively use its balance sheet and strong funding to optimize and grow its high-quality portfolio and to continue to build and progress the development pipeline. Entra will focus on its role as an urban developer and leverage its competitive advantages, including expertise, network and ESG leadership.
Entra owns and manages modern, flexible and environmentally friendly assets located in selected clusters near public transportation hubs. Combined with a solid tenant base with long lease contracts, a strong financial position, and an extensive project pipeline for future growth, Entra has a proven and resilient business profile that is well positioned for the future.
On October 12, Entra's largest shareholder, Fastighets AB Balder, triggered an obligation to make a mandatory offer to acquire all shares in Entra not held by Balder for a minimum price of NOK 202.50 per share pursuant to section 6-1 of the Norwegian Securities Trading Act. The Board will carefully review the terms of the mandatory offer when announced and will in due time provide the statutory recommendation to Entra's shareholders.
Oslo, 18 October 2021
The Board of Entra ASA
| All amounts in NOK million | Q3-21 | Q3-20 | YTD Q3-21 | YTD Q3-20 | 2020 |
|---|---|---|---|---|---|
| Rental income | 639 | 589 | 1 832 | 1 763 | 2 353 |
| Operating costs | -58 | -46 | -172 | -154 | -211 |
| Net operating income | 581 | 543 | 1 660 | 1 609 | 2 142 |
| Other revenue | 15 | 31 | 52 | 69 | 113 |
| Other costs | -7 | -20 | -33 | -42 | -79 |
| Administrative costs | -43 | -42 | -139 | -131 | -186 |
| Share of profit from associates and JVs | -7 | 53 | 34 | 92 | 120 |
| Net realised financials | -141 | -129 | -396 | -417 | -541 |
| Net income | 398 | 435 | 1 178 | 1 179 | 1 569 |
| - of which net income from property management | 402 | 383 | 1 142 | 1 089 | 1 451 |
| Changes in value of investment properties | 780 | 892 | 2 286 | 1 511 | 5 980 |
| Changes in value of financial instruments | 14 | 26 | 145 | -339 | -275 |
| Profit before tax | 1 192 | 1 354 | 3 609 | 2 351 | 7 274 |
| Tax payable | -4 | -3 | -11 | -13 | -26 |
| Change in deferred tax | -259 | -283 | -768 | -489 | -1 552 |
| Profit for period/year | 930 | 1 068 | 2 830 | 1 850 | 5 696 |
| Actuarial gains and losses | 0 | 0 | 0 | 0 | -25 |
| Change in deferred tax on comprehensive income | 0 | 0 | 0 | 0 | 5 |
| Total comprehensive income for the period/year | 930 | 1 068 | 2 830 | 1 850 | 5 677 |
| Profit attributable to: | |||||
| Equity holders of the Company | 901 | 990 | 2 702 | 1 731 | 5 460 |
| Non-controlling interest | 29 | 78 | 127 | 118 | 236 |
| Total comprehensive income attributable to: Equity holders of the Company Non-controlling interest |
901 29 |
990 78 |
2 702 127 |
1 731 118 |
5 440 236 |
| All amounts in NOK million | 30.09.2021 | 30.09.2020 | 31.12.2020 |
|---|---|---|---|
| Intangible assets | 109 | 117 | 109 |
| Investment properties | 64 163 | 51 965 | 56 834 |
| Other operating assets | 16 | 18 | 17 |
| Investments in associates and JVs | 1 034 | 500 | 527 |
| Financial derivatives | 248 | 443 | 347 |
| Long-term receivables and other assets | 278 | 314 | 252 |
| Total non-current assets | 65 847 | 53 355 | 58 086 |
| Inventory properties | 467 | 418 | 461 |
| Trade receivables | 38 | 66 | 64 |
| Other receivables and other current assets | 225 | 300 | 279 |
| Cash and bank deposits | 256 | 302 | 217 |
| Total current assets | 985 | 1 086 | 1 021 |
| Investment properties held for sale | 87 | 0 | 33 |
| Total assets | 66 920 | 54 441 | 59 141 |
| Shareholders' equity | 28 924 | 23 427 | 27 136 |
| Non-controlling interests | 2 151 | 2 016 | 2 069 |
| Total equity | 31 074 | 25 442 | 29 205 |
| Interest bearing debt | 23 615 | 18 244 | 19 095 |
| Deferred tax liability | 7 683 | 5 856 | 6 914 |
| Financial derivatives | 409 | 849 | 690 |
| Other non-current liabilities | 599 | 495 | 554 |
| Total non-current liabilities | 32 306 | 25 444 | 27 253 |
| Interest bearing debt | 2 378 | 2 444 | 2 051 |
| Trade payables | 348 | 252 | 281 |
| Other current liabilities | 813 | 859 | 350 |
| Total current liabilities | 3 539 | 3 555 | 2 683 |
| Total liabilities | 35 845 | 28 999 | 29 936 |
| Total equity and liabilities | 66 920 | 54 441 | 59 141 |
| Other | Non | |||||
|---|---|---|---|---|---|---|
| Share | Treasury | paid-in | Retained | controlling | Total | |
| All amounts in NOK million | capital | shares | capital | earnings | interests | equity |
| Equity 31.12.2019 | 182 | 0 | 3 523 | 18 865 | 1 947 | 24 517 |
| Profit for period | 5 460 | 236 | 5 696 | |||
| Other comprehensive income | -19 | -19 | ||||
| Dividend | -874 | -114 | -989 | |||
| Net equity effect of LTI & employee share saving schemes | 0 | 0 | -1 | 0 | ||
| Equity 31.12.2020 | 182 | 0 | 3 524 | 23 430 | 2 069 | 29 205 |
| Profit for period | 2 702 | 127 | 2 830 | |||
| Other comprehensive income | 0 | 0 | ||||
| Dividend | -911 | -46 | -956 | |||
| Net equity effect of LTI & employee share saving schemes | 0 | 0 | -4 | -4 | ||
| Equity 30.09.2021 | 182 | 0 | 3 524 | 25 218 | 2 151 | 31 074 |
| All amounts in NOK million | Q3-21 | Q3-20 | YTD Q3-21 | YTD Q3-20 | 2020 |
|---|---|---|---|---|---|
| Profit before tax | 1 192 | 1 354 | 3 609 | 2 351 | 7 274 |
| Income tax paid | 0 | 0 | -11 | -10 | -11 |
| Net expensed interest and fees on loans and leases | 141 | 129 | 396 | 417 | 541 |
| Net interest and fees paid on loans and leases | -114 | -106 | -472 | -444 | -553 |
| Share of profit from associates and jointly controlled entities | 7 | -53 | -34 | -92 | -120 |
| Depreciation and amortisation | 1 | 1 | 3 | 4 | 13 |
| Changes in value of investment properties | -780 | -892 | -2 286 | -1 511 | -5 980 |
| Changes in value of financial instruments | -14 | -26 | -145 | 339 | 275 |
| Change in working capital | 48 | 155 | 35 | 181 | 83 |
| Net cash flow from operating activities | 481 | 561 | 1 095 | 1 236 | 1 521 |
| Proceeds from property transactions | 0 | 0 | 41 | 15 | 15 |
| Acquisition of investment properties | -167 | -134 | -3 542 | -156 | -194 |
| Investment in and upgrades of investment properties | -486 | -367 | -1 425 | -1 391 | -1 683 |
| Investment in properties for sale and inventory properties | -2 | -3 | -6 | -6 | -48 |
| Acquisition of intangible and other non-current assets | -4 | -2 | -10 | -19 | -21 |
| Net payment financial assets | 0 | 1 | 3 | 1 | 73 |
| Net payment of loans to associates and JVs | 0 | -1 | -16 | -1 | -1 |
| Investments in associates and JVs | -476 | 0 | -476 | -13 | -13 |
| Dividends from associates and JVs | 0 | 0 | 2 | 2 | 3 |
| Net cash flow from investment activities | -1 134 | -505 | -5 428 | -1 567 | -1 868 |
| Proceeds interest bearing debt | 9 216 | 3 000 | 20 598 | 10 635 | 14 635 |
| Repayment interest bearing debt | -8 408 | -3 010 | -15 726 | -9 854 | -13 390 |
| Repayment of lease liabilities | -2 | -2 | -7 | -7 | -9 |
| Dividends paid | 0 | 0 | -455 | -437 | -874 |
| Dividends paid to non-controlling interests | 0 | 0 | -38 | -20 | -114 |
| Net cash flow from financing activities | 805 | -12 | 4 371 | 316 | 246 |
| Change in cash and cash equivalents | 152 | 44 | 39 | -15 | -100 |
| Cash and cash equivalents at beginning of period | 104 | 259 | 217 | 317 | 317 |
| Cash and cash equivalents at end of period | 256 | 302 | 256 | 302 | 217 |
The results for the period have been prepared in accordance with IAS 34 Interim Financial Reporting. The accounting principles that have been used in the preparation of the interim financial statements are in conformity with the principles used in preparation of the annual financial statements for 2020.
The financial reporting covers Entra ASA, subsidiaries, associated companies and jointly controlled entities. The interim financial statements have not been audited.
The Group has one main operational unit, led by the COO. The property portfolio is divided into six different geographic areas in Oslo, Sandvika, Drammen, Stavanger, Bergen and Trondheim, with management teams monitoring and following upon each area. The geographic units are supported by a Market and Property Development division and a Project Development division. In addition, Entra has group and support functions within accounting, finance, legal, investment, digitalisation, procurement, communication and HR.
The geographic areas do not have their own profit responsibility. The geographical areas are instead followed up on economical and non-economical key figures ("key performance indicators"). These key figures are analysed and reported by geographic area to the chief operating decision maker, that is the board and CEO, for the purpose of resource allocation and assessment of segment performance. Hence, the Group report the segment information based upon these six geographic areas.
| Properties | Area | Occupancy | Wault | Market value | 12 months rolling rent | Net yield1) | Market rent | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| (#) | (sqm) | (%) | (year) | (NOKm) | (NOK/sqm) | (NOKm) | (NOK/sqm) | (%) | (NOKm) | (NOK/sqm) | |
| Oslo | 39 | 650 883 | 97.9 | 7.2 | 38 551 | 59 229 | 1 629 | 2 502 | 3.93 | 1 761 | 2 705 |
| Trondheim | 11 | 158 737 | 96.3 | 6.5 | 5 558 | 35 012 | 290 | 1 828 | 4.90 | 285 | 1 795 |
| Bergen | 8 | 115 640 | 96.5 | 5.2 | 5 330 | 46 089 | 238 | 2 058 | 4.10 | 289 | 2 499 |
| Sandvika | 9 | 98 990 | 97.6 | 7.0 | 3 176 | 32 087 | 171 | 1 729 | 5.12 | 155 | 1 567 |
| Stavanger | 7 | 119 297 | 93.3 | 6.1 | 3 005 | 25 192 | 175 | 1 470 | 5.29 | 189 | 1 587 |
| Drammen | 8 | 69 470 | 98.9 | 8.7 | 2 595 | 37 347 | 136 | 1 956 | 4.95 | 132 | 1 895 |
| Management portfolio |
82 | 1 213 015 | 97.3 | 6.9 | 58 215 | 47 992 | 2 639 | 2 176 | 4.22 | 2 811 | 2 317 |
| Project portfolio | 9 | 132 784 | 9.8 | 5 026 | 37 854 | ||||||
| Development sites | 5 | 109 847 | 0.2 | 898 | 8 175 | ||||||
| Property portfolio | 96 | 1 455 646 | 7.1 | 64 139 | 44 062 |
1) See the section "Definitions". The calculation of net yield is based on the appraisers' assumption of ownership costs, which at 30.09.21 is 7.0 per cent of market rent.
| Properties | Area | Occupancy | Wault | Market value | 12 months rolling rent | Net yield | Market rent | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| (#) | (sqm) | (%) | (year) | (NOKm) | (NOK/sqm) | (NOKm) | (NOK/sqm) | (%) | (NOKm) | (NOK/sqm) | |
| Oslo | 34 | 549 679 | 97.9 | 6.7 | 27 774 | 50 529 | 1 375 | 2 501 | 4.6 | 1 439 | 2 618 |
| Trondheim | 11 | 158 940 | 96.9 | 7.2 | 4 927 | 31 002 | 286 | 1 798 | 5.5 | 280 | 1 763 |
| Bergen | 8 | 119 538 | 93.8 | 5.5 | 4 884 | 40 861 | 220 | 1 837 | 4.1 | 288 | 2 412 |
| Sandvika | 9 | 98 988 | 99.4 | 7.8 | 3 071 | 31 029 | 175 | 1 771 | 5.4 | 154 | 1 559 |
| Stavanger | 5 | 78 607 | 99.0 | 6.5 | 2 230 | 28 369 | 138 | 1 755 | 5.7 | 129 | 1 636 |
| Drammen | 8 | 69 461 | 98.0 | 9.1 | 2 370 | 34 120 | 126 | 1 816 | 5.0 | 128 | 1 837 |
| Management portfolio |
75 | 1 075 214 | 97.4 | 6.9 | 45 258 | 42 092 | 2 319 | 2 157 | 4.76 | 2 418 | 2 249 |
| Project portfolio | 9 | 137 632 | 9.3 | 5 800 | 42 141 | ||||||
| Development sites | 6 | 114 859 | 0.3 | 784 | 6 826 | ||||||
| Property portfolio | 90 | 1 327 705 | 6.9 | 51 842 | 39 046 |
| All amounts in NOK million | Q3-21 | Q3-20 | YTD Q3-21 | YTD Q3-20 | 2020 |
|---|---|---|---|---|---|
| Closing balance previous period | 62 682 | 50 736 | 56 867 | 49 095 | 49 095 |
| Acquisition of investment properties | 168 | 0 | 3 537 | 156 | 193 |
| Investment in the property portfolio | 604 | 328 | 1 556 | 1 195 | 1 580 |
| Capitalised borrowing costs | 15 | 9 | 39 | 23 | 35 |
| Divestment of investment properties | 0 | 0 | -35 | -15 | -15 |
| Changes in value of investment properties | 780 | 892 | 2 286 | 1 511 | 5 980 |
| Closing balance | 64 250 | 51 965 | 64 250 | 51 965 | 56 867 |
| Investment properties held for sale | 87 | 0 | 87 | 0 | 33 |
| Investment properties | 64 163 | 51 965 | 64 163 | 51 965 | 56 834 |
Acquisition of investment properties in 2021 is related to the acquisition of Lagårdsveien 6 and Laberget 24-28 (Kanalpiren) in Stavanger, Møllendalsveien 1A and Lars Hilles gate 19 in Bergen, and Fyrstikkalléen 1 and Universitetsgata 11 (Hotel Savoy) in Oslo. Divestment of investment properties in 2021 is related to the divestment of the property Tollbodallmenningen 2A in Bergen.
The property Borkenveien 1-3 in Sandvika is classified as held for sale at 30 September 2021 as the tenant has exercised the option to acquire the property. The transaction is expected to close in the first quarter of 2022.
In addition to the transactions mentioned above, the property Nytorget 1 in Stavanger was in 2021 sold by Entra to Hinna Park Eiendom, a partly owned company controlled by Entra. As Hinna Park Eiendom is consolidated in Entra's financial statements, the transaction is not reflected in the Group's financial statements.
| Total | 409 | 849 | 690 | |
|---|---|---|---|---|
| - Derivatives | Level 2 | 409 | 849 | 690 |
| Financial liabilities measured at fair value through profit or loss | ||||
| Liabilities measured at fair value: | ||||
| Total | 64 532 | 52 442 | 57 251 | |
| - Equity instruments | Level 3 | 34 | 34 | 37 |
| - Derivatives | Level 2 | 248 | 443 | 347 |
| - Investment properties held for sale | Level 3 | 87 | 0 | 33 |
| - Investment properties | Level 3 | 64 163 | 51 965 | 56 834 |
| Assets measured at fair value through profit or loss | ||||
| Assets measured at fair value: | ||||
| All amounts in NOK million | Fair value level | 30.09.2021 | 30.09.2020 | 31.12.2020 |
Refer to the Events after the balance sheet date section on page 16 for information on significant events after period end.
Entra's financial information is prepared in accordance with the international financial reporting standards (IFRS). In addition, the company reports alternative performance measures (APMs) that are regularly reviewed by management to enhance the understanding of Entra's performance as a supplement, but not as a substitute, to the financial statements prepared in accordance with IFRS. Financial APMs are intended to enhance comparability of the results and cash flows from period to period, and it is Entra's experience that these are frequently used by analysts, investors and other parties. The financial APMs reported by Entra are the APMs that, in management's view, provide the most relevant supplemental information of a real estate company's financial position and performance. These measures are adjusted IFRS measures defined, calculated and used in a consistent and transparent manner over the years. Operational measures such as, but not limited to, net letting, vacancy and WAULT are not defined as financial APMs according to ESMA's guidelines.
| All amounts in NOK million | Q3-21 | Q3-20 | YTD Q3-21 | YTD Q3-20 | 2020 |
|---|---|---|---|---|---|
| Net income | 398 | 435 | 1 178 | 1 179 | 1 569 |
| Less: | |||||
| Other income and costs in associates and JVs | -4 | 52 | 36 | 90 | 118 |
| Net income from property management | 402 | 383 | 1 142 | 1 089 | 1 451 |
| Tax payable | -4 | -3 | -11 | -13 | -26 |
| Cash Earnings | 398 | 380 | 1 130 | 1 076 | 1 425 |
| NET VALUE CHANGES | |||||
| All amounts in NOK million | Q3-21 | Q3-20 | YTD Q3-21 | YTD Q3-20 | 2020 |
| Changes in value of investment properties | 780 | 892 | 2 286 | 1 511 | 5 980 |
| Changes in value of financial instruments | 14 | 26 | 145 | -339 | -275 |
| Net value changes | 794 | 918 | 2 431 | 1 172 | 5 705 |
| All amounts in NOK million | 30.09.2021 | 30.09.2020 | 31.12.2020 |
|---|---|---|---|
| Investment properties | 64 163 | 51 965 | 56 834 |
| Investment properties held for sale | 87 | 0 | 33 |
| Other | -111 | -122 | -121 |
| Market value of the property portfolio | 64 139 | 51 842 | 56 746 |
| All amounts in NOK million | 30.09.2021 | 30.09.2020 | 31.12.2020 |
|---|---|---|---|
| Nominal value of interest bearing debt | 26 315 | 20 682 | 21 146 |
| Cash and bank deposits | -256 | -302 | -217 |
| Net nominal interest bearing debt | 26 059 | 20 380 | 20 930 |
| Debt ratio (LTV) % | 40.7 | 39.5 | 37.0 |
|---|---|---|---|
| - Inventory properties | 467 | 418 | 461 |
| - Market value of the property portfolio | 64 139 | 51 842 | 56 746 |
| Total market value of the property portfolio | 64 606 | 52 261 | 57 207 |
| - Other interest bearing liabilities | 257 | 262 | 263 |
| - Net nominal interest bearing debt | 26 059 | 20 380 | 20 930 |
| Total net nominal interest bearing debt | 26 316 | 20 642 | 21 192 |
| All amounts in NOK million except ratio | 30.09.2021 | 30.09.2020 | 31.12.2020 |
| All amounts in NOK million except ratio | Q3-21 | Q3-20 | YTD Q3-21 | YTD Q3-20 | 2020 |
|---|---|---|---|---|---|
| Net income | 398 | 435 | 1 178 | 1 179 | 1 569 |
| Depreciation | 1 | 1 | 3 | 4 | 13 |
| Results from associates and joint ventures | 7 | -53 | -34 | -92 | -120 |
| Net realised financials | 141 | 129 | 396 | 417 | 541 |
| EBITDA adjusted | 548 | 513 | 1 543 | 1 508 | 2 002 |
| Interest cost | 141 | 129 | 407 | 424 | 555 |
| Other finance expense | 15 | 10 | 31 | 23 | 30 |
| Applicable net interest cost | 156 | 139 | 437 | 447 | 585 |
| Interest Coverage Ratio (ICR) | 3.5 | 3.7 | 3.5 | 3.4 | 3.4 |
The following performance indicators have been prepared in accordance with best practices as defined by EPRA (European Public Real Estate Association) in its latest edition of the Best Practices Recommendations Guidelines. Accordingly, Entra presents only the three new NAV metrics; EPRA NRV, EPRA NTA and EPRA NDV; which has replaced the previous NAV metrics EPRA NAV and EPRA NNNAV. The EPRA Best Practices Recommendations Guidelines focus on making the financial statements of public real estate companies clearer and more comparable across Europe. For further information about EPRA, see www.epra.com.
| Summary table EPRA performance measures | Unit | Q3-21 / 30.09.2021 |
Q3-20 / 30.09.2020 |
|
|---|---|---|---|---|
| A | EPRA earnings per share (EPS) | NOK | 1.59 | 1.52 |
| B | EPRA NRV per share | NOK | 205 | 165 |
| EPRA NTA per share | NOK | 202 | 163 | |
| EPRA NDV per share | NOK | 163 | 130 | |
| C | EPRA Net Initial Yield (NIY) | % | 4.18 | 4.74 |
| EPRA, "topped-up" NIY | % | 4.18 | 4.74 | |
| D | EPRA Vacancy Rate | % | 2.5 | 2.6 |
| E | EPRA Cost Ratio (including direct vacancy costs) | % | 15.4 | 15.4 |
| EPRA Cost Ratio (excluding direct vacancy costs) | % | 13.9 | 13.7 |
The details for the calculation of the performance measures are shown on the following pages.
EPRA Earnings is a measure of the operational performance of the property portfolio. EPRA Earnings is calculated based on the income statement, adjusted for non-controlling interests, value changes on investment properties, changes in the market value of financial instruments and the associated tax effects. In addition, earnings from the jointly controlled entity OSU is adjusted for as the business of this company is development of residential properties for sale and is not considered relevant for measurement of the underlying operating performance of the property portfolio under management.
| All amounts in NOK million | Q3-21 | Q3-21 | Q3-21 Non |
Q3-21 | Q3-20 | Q3-20 | Q3-20 Non |
Q3-20 |
|---|---|---|---|---|---|---|---|---|
| IFRS reported |
EPRA adjustments |
controlling Interests1) |
EPRA Earnings |
IFRS reported |
EPRA adjustments |
controlling Interests1) |
EPRA Earnings |
|
| Rental income | 639 | 0 | 42 | 597 | 589 | 0 | 39 | 589 |
| Operating costs | -58 | 0 | -4 | -54 | -46 | 0 | -4 | -46 |
| Net operating income | 581 | 0 | 38 | 544 | 543 | 0 | 35 | 543 |
| Other revenue | 15 | 0 | 1 | 14 | 31 | 0 | 1 | 31 |
| Other costs | -7 | 0 | 0 | -7 | -20 | 0 | 0 | -20 |
| Administrative costs | -43 | 0 | -2 | -41 | -42 | 0 | -2 | -42 |
| Share of profit from associates and JVs | -7 | -3 | 0 | -4 | 53 | 53 | 0 | 53 |
| Net realised financials | -141 | 0 | -7 | -134 | -129 | 0 | -6 | -129 |
| Net income | 398 | -3 | 29 | 372 | 435 | 53 | 28 | 435 |
| Net value changes | 794 | 794 | 0 | 0 | 918 | 918 | 0 | 0 |
| Profit before tax/EPRA Earnings before tax | 1 192 | 791 | 29 | 372 | 1 354 | 972 | 28 | 354 |
| Tax payable | -4 | 0 | -1 | -2 | -3 | 0 | -1 | -2 |
| Change in deferred tax | -259 | -174 | -5 | -80 | -283 | -202 | -4 | -76 |
| Profit for period/EPRA Earnings | 930 | 617 | 23 | 290 | 1 068 | 769 | 22 | 276 |
| Average outstanding shares (million) | 182.1 | 182.1 | ||||||
| EPRA Earnings per share | 1.59 | 1.52 |
1) Excluding non-controlling interests in relation to EPRA adjustments.
| All amounts in NOK million | YTD Q3-21 | YTD Q3-21 | YTD Q3-21 Non |
YTD Q3-21 | YTD Q3-20 | YTD Q3-20 | YTD Q3-20 Non |
YTD Q3-20 |
|---|---|---|---|---|---|---|---|---|
| IFRS | EPRA | controlling | EPRA | IFRS | EPRA | controlling | EPRA | |
| reported | adjustments | Interests1) | Earnings | reported | adjustments | Interests1) | Earnings | |
| Rental income | 1 832 | 0 | 122 | 1 710 | 1 763 | 0 | 115 | 1 648 |
| Operating costs | -172 | 0 | -12 | -159 | -154 | 0 | -9 | -145 |
| Net operating income | 1 660 | 0 | 110 | 1 550 | 1 609 | 0 | 106 | 1 503 |
| Other revenue | 52 | 0 | 1 | 51 | 69 | 0 | 1 | 67 |
| Other costs | -33 | 0 | 0 | -33 | -42 | 0 | 0 | -42 |
| Administrative costs | -139 | 0 | -6 | -133 | -131 | 0 | -6 | -125 |
| Share of profit from associates and JVs | 34 | 39 | 0 | -6 | 92 | 0 | 0 | 92 |
| Net realised financials | -396 | 0 | -20 | -376 | -417 | 0 | -18 | -399 |
| Net income | 1 178 | 39 | 85 | 1 054 | 1 179 | 0 | 84 | 1 096 |
| Net value changes | 2 431 | 2 431 | 0 | 0 | 1 172 | 1 172 | 0 | 0 |
| Profit before tax/EPRA Earnings before tax | 3 609 | 2 471 | 85 | 1 054 | 2 351 | 1 172 | 84 | 1 096 |
| Tax payable | -11 | 0 | -4 | -7 | -13 | 0 | -5 | -8 |
| Change in deferred tax | -768 | -529 | -14 | -225 | -489 | -243 | -12 | -233 |
| Profit for period/EPRA Earnings | 2 830 | 1 942 | 66 | 822 | 1 850 | 929 | 66 | 855 |
| Average outstanding shares (million) | 182.1 | 182.1 | ||||||
| EPRA Earnings per share | 4.51 | 4.69 |
1) Excluding non-controlling interests in relation to EPRA adjustments.
The objective of the EPRA NRV measure is to highlight the value of net assets on a long-term basis and assumes that no selling of assets takes place. Assets and liabilities that are not expected to crystallise in normal circumstances such as the fair value movements on financial derivatives and deferred taxes on property valuation surpluses are therefore excluded. Real estate transfer taxes are generally not levied on property transactions in Norway, and such taxes are accordingly not included in Entra's valuation certificates. Consequently, no adjustment is done for real estate transfer taxes in Entra's calculation of EPRA NRV.
| All amounts in NOK million | 30.09.2021 | 30.09.2021 | 30.09.2021 | 30.09.2020 | 31.12.2020 |
|---|---|---|---|---|---|
| Attributable to non-controlling |
Attributable to shareholders |
Attributable to shareholders |
Attributable to shareholders |
||
| Total | interests | (EPRA NRV) | (EPRA NRV) | (EPRA NRV) | |
| IFRS equity | 31 074 | -2 151 | 28 924 | 23 427 | 27 136 |
| Approved, not paid dividend1) | 455 | 0 | 455 | 437 | 0 |
| Revaluation of investments made in JVs2) | 418 | 0 | 418 | 281 | 249 |
| Revaluation of purchase option | 0 | 0 | 0 | 0 | 176 |
| Net Asset Value (NAV) at fair value | 31 493 | -2 151 | 29 797 | 24 145 | 27 561 |
| Deferred tax properties and financial instruments | 7 713 | -356 | 7 358 | 5 544 | 6 673 |
| Net fair value on financial derivatives | 162 | -8 | 154 | 390 | 329 |
| Goodwill as a result of deferred tax | -109 | 55 | -55 | -55 | -55 |
| EPRA Net Reinstatement Value (NRV) | 39 258 | -2 460 | 37 254 | 30 025 | 34 508 |
| Outstanding shares at period end (million) | 182.1 | 182.1 | 182.1 |
1) In July 2021, the board of Entra approved dividend of 2.50 per share. The dividend was paid on 12 October 2021. Approved, not paid dividend is classified as a liability under IFRS and is as such deducted from equity. The Entra share was traded including dividend rights until 3 October 2021 and is consequently included in the calculation of Entra's NAV metrics as of 30 September 2021. This enhances comparability between the EPRA NAV metrics and the share price. Approved, not paid dividend was not included in the EPRA NAV metrics reported for Q3-20 in the report for the third quarter of 2020 and is updated in the table above to reflect the amended methodology. No dividend was approved, not paid at 31 December 2020.
July 2021, Entra increased its share in OSU to 50 per cent after a competitive bid process. The fair value of the 50 per cent holding as at 30.09.21 reflects the highest of the competing bids.
The EPRA NTA is focused on reflecting a company's tangible assets and assumes that entities buy and sell assets, thereby crystallising certain levels of unavoidable deferred tax liability. Entra has adopted second option in the EPRA BPR guidelines to adjust for deferred tax, estimating the real tax liability based how the company has completed property transactions in recent years.
| 30.09.2021 | 30.09.2021 | 30.09.2021 | 30.09.2020 | 31.12.2020 |
|---|---|---|---|---|
| Attributable to | Attributable to | Attributable | Attributable | |
| Total | interests | (EPRA NTA) | (EPRA NTA) | to shareholders (EPRA NTA) |
| 31 074 | -2 151 | 28 924 | 23 427 | 27 136 |
| 455 | 0 | 455 | 437 | 0 |
| 418 | 0 | 418 | 281 | 249 |
| 0 | 0 | 0 | 0 | 176 |
| 31 493 | -2 151 | 29 797 | 24 145 | 27 561 |
| 7 683 | -279 | 7 405 | 5 580 | 6 607 |
| -384 | -58 | -442 | -335 | -294 |
| 162 | -8 | 154 | 390 | 329 |
| -109 | 55 | -55 | -55 | -55 |
| 0 | 0 | 0 | -4 | 0 |
| 38 844 | -2 441 | 36 859 | 29 722 | 34 148 |
| 182.1 | 182.1 | 182.1 | ||
| 202 | 163 | 187 | ||
| non-controlling | shareholders | to shareholders |
1) The treatment of approved, not paid dividend is amended in the calculation of EPRA NTA from Q3-21. See footnote 1 to the EPRA NRV calculation for further information. EPRA NTA for Q3-20 is updated accordingly in the table above.
Estimated real deferred tax liability related to temporary differences of properties has been calculated to 1.2 per cent of the based on a discount rate of 5.0 per cent and the assumption that 50 per cent of the property portfolio are realized over 50 years in transactions structured as sale of companies in which the tax discount is 6.5 per cent. Further, the real tax liability related to the gains/losses account is estimated by assuming an amortisation of 20 per cent annually and a discount rate of 5.0 per cent.
The EPRA NDV measure provides readers of financial reports with a scenario where deferred tax, financial instruments, and certain other adjustments are calculated as to the full extent of their liability. This enables readers of financial reports to understand the full extent of liabilities and resulting shareholder value under an orderly sale of business and/or if liabilities are not held until maturity. The measure should not be viewed as a "liquidation NAV" for Entra, as fair values may not represent liquidation values, and as an immediate realization of Entra's assets may be structured as sale of property-owning companies, resulting in the deferred tax liabilities only partially crystallising.
| All amounts in NOK million | 30.09.2021 | 30.09.2021 | 30.09.2021 | 30.09.2020 | 31.12.2020 |
|---|---|---|---|---|---|
| Total | Attributable to non-controlling interests |
Attributable to shareholders (EPRA NDV) |
Attributable to shareholders (EPRA NDV) |
Attributable to shareholders (EPRA NDV) |
|
| IFRS equity | 31 074 | -2 151 | 28 924 | 23 427 | 27 136 |
| Approved, not paid dividend1) | 455 | 0 | 455 | 437 | 0 |
| Revaluation of investments made in JVs | 418 | 0 | 418 | 281 | 249 |
| Revaluation of purchase option | 0 | 0 | 0 | 0 | 176 |
| Net Asset Value (NAV) at fair value | 31 956 | -2 159 | 29 797 | 24 145 | 27 561 |
| Fair value adjustment fixed interest rate debt, net of tax | -98 | 0 | -98 | -347 | -378 |
| Goodwill as a result of deferred tax | -109 | 55 | -55 | -55 | -55 |
| EPRA Net Disposal Value (NDV) | 31 749 | -2 104 | 29 645 | 23 744 | 27 128 |
| Outstanding shares at period end (million) | 182.1 | 182.1 | 182.1 | ||
| EPRA NDV per share (NOK) | 163 | 130 | 149 |
1) The treatment of approved, not paid dividend is amended in the calculation of EPRA NDV from Q3-21. See footnote 1 to the EPRA NRV calculation for further information. EPRA NDV for Q3- 20 is updated accordingly in the table above.
EPRA Net initial yield measures the annualised rental income based on the cash rents passing at the balance sheet date, less nonrecoverable property operating expenses, divided by the market value of the property, increased with (estimated) purchasers' costs.
EPRA "topped-up" net initial yield incorporates an adjustment to the EPRA NIY in respect of the expiration of rent-free periods (or other unexpired lease incentives such as discounted rent periods and step rents).
| All amounts in NOK million | Oslo | Trondheim | Sandvika | Stavanger | Drammen | Bergen | Total |
|---|---|---|---|---|---|---|---|
| Investment property - wholly owned | 42 650 | 6 023 | 3 267 | 1 583 | 371 | 3 182 | 57 076 |
| Investment property - share of JVs | 0 | 0 | 0 | 830 | 1 334 | 1 590 | 3 754 |
| Total property portfolio | 42 650 | 6 023 | 3 267 | 2 413 | 1 705 | 4 772 | 60 830 |
| Less projects and land and developments | -4 099 | -465 | -90 | -119 | 0 | -1 033 | -5 806 |
| Completed management portfolio | 38 551 | 5 558 | 3 176 | 2 294 | 1 705 | 3 740 | 55 024 |
| Allowance for estimated purchasers' cost | 59 | 16 | 10 | 6 | 5 | 11 | 106 |
| Gross up completed management portfolio valuation | 38 610 | 5 574 | 3 186 | 2 300 | 1 710 | 3 750 | 55 131 |
| 12 months rolling rent | 1 629 | 290 | 171 | 131 | 91 | 167 | 2 478 |
| Estimated ownership cost | 113 | 18 | 8 | 12 | 5 | 15 | 171 |
| Annualised net rents | 1 516 | 272 | 163 | 119 | 86 | 152 | 2 307 |
| Add: Notional rent expiration of rent free periods or other lease incentives |
0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Topped up net annualised net rents | 1 516 | 272 | 163 | 119 | 86 | 152 | 2 307 |
| EPRA NIY (net initial yield) | 3.93% | 4.88% | 5.11% | 5.17% | 5.01% | 4.05% | 4.18% |
| EPRA "topped-up" NIY (net initial yield) | 3.93% | 4.88% | 5.11% | 5.17% | 5.01% | 4.05% | 4.18% |
Estimated Market Rental Value (ERV) of vacant space divided by the ERV of the whole portfolio. All figures are adjusted for actual share of ownership of each property.
| All amounts in NOK million | Oslo | Trondheim | Sandvika | Stavanger | Drammen | Bergen | Total |
|---|---|---|---|---|---|---|---|
| Market rent vacant areas | 38 | 11 | 4 | 6 | 1 | 7 | 66 |
| Total market rent | 1 761 | 285 | 155 | 137 | 87 | 212 | 2 638 |
| EPRA vacancy rate | 2.1% | 3.7% | 2.4% | 4.6% | 1.2% | 3.4% | 2.5% |
Administrative & operating costs (including & excluding costs of direct vacancy) divided by gross rental income.
| All amounts in NOK million | Q3-21 | Q3-20 | YTD Q3-21 | YTD Q3-20 | 2020 |
|---|---|---|---|---|---|
| Operating costs | -58 | -46 | -172 | -154 | -211 |
| Administrative costs | -43 | -42 | -139 | -131 | -186 |
| Share of joint venture expenses | 0 | 0 | 0 | - | 0 |
| Less: Ground rent cost | 2 | 2 | 6 | 7 | 9 |
| EPRA cost (including direct vacancy cost) | -98 | -86 | -304 | -278 | -388 |
| Direct vacancy cost | -9 | -10 | -32 | -36 | -44 |
| EPRA cost (excluding direct vacancy cost) | -89 | -76 | -272 | -237 | -343 |
| 0 | |||||
| Gross rental income less ground rent | 639 | 589 | 1 832 | 1 763 | 2 353 |
| Share of joint ventures | 0 | 0 | 0 | - | 0 |
| Total gross rental income less ground rent | 639 | 589 | 1 832 | 1 763 | 2 353 |
| EPRA cost ratio (including direct vacancy cost) | 15.4% | 15.4% | 16.6% | 15.7% | 16.5% |
| EPRA cost ratio (excluding direct vacancy cost) | 13.9% | 13.7% | 14.9% | 13.4% | 14.6% |
| 12 months rolling rent Capital expenditure |
- The contractual rent of the management properties of the Group for the next 12 months as of a certain date, adjusted for (i) signed new contracts and contracts expiring during such period, (ii) contract based CPI adjustments based on Independent Appraisers' CPI estimates and (iii) the Independent Appraisers' estimates of letting of current and future vacant areas. - Property related capital expenditure, split into four components: (i) Acquisition, (ii) Development, (iii) Like-for-like portfolio and (iv) Other. The components Development and Like-for-like portfolio combined ties to the line item Investment in the property |
|---|---|
| Back-stop of short-term interest | portfolio in the investment properties rollforward, while the two other categories ties to separate line items in the rollforward. - Unutilised credit facilities divided by short-term interest bearing debt. |
| bearing debt | |
| Cash Earnings | - Net income from property management less tax payable |
| Contractual rent | - Annual cash rental income being received as of relevant date |
| EPRA NDV – Net Disposal Value | - EPRA NDV is a NAV metric reflecting the IFRS equity including the full extent of the deferred tax liability as per the balance sheet, |
| EPRA NRV – Net Reinstatement Value | including fair value of fixed interest rate debt and excluding goodwill as a result of deferred tax. - EPRA NRV is a NAV metric reflecting the IFRS equity excluding (i) deferred tax liability as per the balance sheet in respect of properties and financial instruments, (ii) fair value of financial instruments and (iii) goodwill as a result of deferred tax. |
| EPRA NTA – Net Tangible Assets | - EPRA NTA is a NAV metric reflecting the IFRS equity including only the estimated real tax liability, and excluding (i) fair value of financial instruments, and (ii) goodwill and intangible assets as per the balance sheet. |
| Gross yield | - 12 months rolling rent divided by the market value of the management portfolio |
| Interest Coverage Ratio ("ICR") | - Net income from property management excluding depreciation and amortisation for the Group, divided by net interest on interest bearing nominal debt and fees and commitment fees related to investment activities |
| Independent Appraisers | - Akershus Eiendom/JLL and Newsec |
| Land and dev. properties | - Property / plots of land with planning permission for development |
| Like-for-like | - The percentage change in rental income from one period to another given the same income generating property portfolio in the portfolio. The figure is thus adjusted for acquisition and divestments of properties and active projects |
| Loan-to-value ("LTV") | - Total net nominal value of interest bearing debt divided by the total market value of the property portfolio. |
| Management properties | - Properties that are actively managed by the company |
| Market rent | - The annualised market rent of the management properties, fully let as of the relevant date, expressed as the average of market rents estimated by the Independent Appraisers |
| Market value of the property portfolio | - The market value of all properties owned by the parent company and subsidiaries. The figure does not include Inventory properties. |
| Net Asset Value ("NAV") | - Net Asset Value the total equity that the company manages for its owners. Entra presents NAV calculations in line with EPRA recommendation, where the difference mainly is explained by the expected turnover of the property portfolio. |
| Net income from property | - Net income from property management is calculated as Net Income less value changes, tax effects and other income and other |
| management | costs from residential development in associates and JVs |
| Net letting | - Net letting is calculated as the annualised rent of new lease contracts plus lease-up on renegotiated contracts less terminated |
| Net nominal interest bearing debt | contracts - Nominal interest bearing debt less cash and bank deposits |
| Net rent | - 12 months rolling rent less the Independent Appraisers' estimate of ownership costs of the management properties of the Group |
| Net yield | - Net rent divided by the market value of the management properties of the Group |
| Newbuild | - A new building on bare land |
| Occupancy | - Estimated market rent of occupied space of the management properties, divided by the market rent of the total space of the management portfolio. |
| Outstanding shares | - The number of shares registered less the company's own repurchased shares at a given point in time. EPRA Earnings and Cash Earnings per share amounts are calculated using the weighted average number of ordinary shares outstanding during the period. All other per share amounts are calculated using the number of ordinary shares outstanding at period end. |
| Period-on-period | - Comparison between one period and the equivalent period the previous year |
| Property portfolio | - Properties owned by the parent company and subsidiaries, regardless of their classification for accounting purposes. Does not include the market value of properties in associates and jointly controlled entities |
| Project properties | - Properties where it has been decided to start construction of a new building and/or renovation |
| Redevelopment | - Extensive projects such as full knock-down and rebuild, and projects where external walls are being materially impacted (e.g. taking a building back to its core or changing brick facades to glass). |
| Refurbishment | - Projects extensively impacting an existing building, but not knocking it down or materially affecting external walls |
| Total area | - Total area including the area of management properties, project properties and land / development properties |
| Total net nominal interest bearing debt | - Net nominal interest bearing debt and other interest bearing liabilities, including seller's credits and lease liabilities for land and parking lots in connection with the property portfolio |
| WAULT | - Weighted Average Unexpired Lease Term measured as the remaining contractual rent amounts of the current lease contracts of the management properties of the Group, including areas that have been re-let and signed new contracts, adjusted for |
termination rights and excluding any renewal options, divided by Contractual rent, including renewed and signed new contracts.
Sonja Horn CEO Phone: + 47 905 68 456 [email protected]
Anders Olstad CFO Phone: + 47 900 22 559 [email protected]
Tone K. Omsted Head of IR Phone: + 47 982 28 510 [email protected]
Entra ASA Post box 52 Økern 0508 Oslo, Norway Phone: + 47 21 60 51 00 [email protected]
Fourth quarter 2021 11.02.2022
Postal address Post box 52 Økern 0508 Oslo, Norway
Phone: +47 21 60 51 00 [email protected]
Customer service centre Phone: +47 800 36 872 [email protected]
www.entra.no
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