Baltic Sea Properties

Investor Presentation • Aug 23, 2023

Company Presentation

August 2023

Contents

• 1. About us
• 1. Strategy
• 1. Portfolio
• 1. Financials
• 1. Risks
• 1. Economic environment
• 1. Investment opportunity

Company Presentation

August 2023

About Us

• Vision, Mission & Values
• BSP in Brief
• Leadership

Vision, Mission & Values

Vision

To be the preferred real estate partner and leading investment company in the region.

Mission

To foster a great team, to provide high quality and sustainable solutions for our partners, thus creating superior long-term value and returns for our shareholders.

Values

• Commitment to our people and their professional development
• Focusing on innovation and value creation
• Respect for our social and physical environment
• Accountability and fairness with our stakeholders
• Reliability and integrity in all we do

BSP in Brief

• Baltic Sea Properties AS (BSP) is among the Baltics' leading real estate developers & investors – owning a portfolio of logistics, industrial and commercial assets.
• BSP is a public company listed on the Oslo Stock Exchange (OSE, EG: "BALT")
• BSP has a full service, professional management team with deep knowledge of the Baltic real estate market.
• BSP is expanding quickly by developing and acquiring new assets and forming new partnerships.

Quick facts:
◦	124
Total leasable area of approx.	000 m2
Contractual annualised rental income	8.05
◦	MEUR
Land bank for new development approx. ◦	215 750 m2

Leadership

Highly qualified team with vast experience in local and international real estate

James Andrew Clarke

Chairman & CIO Executive MBA, BMI Executive Institute B.Sc. Construction Management & Engineering, SETU

25 years' experience in construction, development & investment in the Baltics, UK & Ireland

John Afseth Board Member (non-executive)

Vast experience from multiple public & private companies across Europe.

Rolandas Jonuska Managing Director, Klaipėda B.Sc. Mechanical Engineering, Klaipėda University

20 years' experience in real estate development & property management.

Bjørn Bjøro Board Member (non-executive)

Lars Christian Berger

M.A. Business and Finance, Heriot-Watt Extensive experience from asset

management of multiple real estate funds

Group CEO

across CEE.

Extensive experience from real estate investments in Norway and Baltics.

Julija Nikitraviciene Head of Legal LL.M., Vilnius University, Law

Previously Associate Partner in Ellex Valiunas with focus on corporate law in real estate.

Sigitas Jautakis Managing Director, Vilnius M.Sc. Economics, Vilnius University

Previously Head of Newsec Asset and Property Management in the Baltics.

John Mosvold Board Member (non-executive)

Extensive corporate and real estate experience in the Nordics & Baltics.

Espen Aas Financial Controller & Investor Relations M.Sc. Political Economy, Norwegian Business School (BI)

Significant experience as business manager for multiple real estate funds.

Strategy

• Goals & Objectives
• Investment Strategy

Goals & Objectives

◦ To target an average annual IRR (Internal Rate of Return) of 10-15%.

• To target the company's equity growth to 100m EUR before Y/E 2028.
• To target an annual dividend of 1.5-3.0% of Net Asset Value (NAV).
• To monitor and investigate strategic M&A (Mergers and Acquisitions) opportunities.
• To sustain a growing, high quality and balanced investment portfolio by continually researching, learning and developing our business & investment strategies.
• To continually identify, balance, mitigate and manage risks in the organisation, portfolio and individual projects.

Investment Strategy

Geography	Baltic States (primarily) – Lithuania, Latvia & Estonia
Asset type	> 65% Industrial & Logistics
	< 35% Other/Opportunity (including retail; office; DIY; hotels; residential; social & other infrastructure; renewable energy; and related private equity investment, etc.)
Equity allocation	> 65% Investment Projects
	< 35% Development Projects
Joint venture projects	< 35% of Net Asset Value
Leverage	< 60% LTV (Loan to Value) ratio for entire portfolio
Cash reserves	> 5% of Net Asset Value

Portfolio

• Investment portfolio (Lithuania)
• Portfolio sustainability & certification status
• Development portfolio
• Development approach
• Project pipeline projections

Investment properties (1H 2023)

Gross Lease-able Area (GLA) of portfolio (m2)	124 064
Gross Asset Value (GAV) excluding land bank value (EUR)	94 500 000
Number of properties	13
Contracted annualised rent (EUR)	8 044 049
Gross yield (annual rental/GAV)	8.51 %
Net operating income (NOI) yield (annual NOI/GAV)	7.90 %
Occupancy	99.50 %
Weighted Average Unexpired Lease Term (WAULT) in years	9.51

Portfolio mix by m2

Portfolio mix by income

Logistics Industrial Commercial

BSP Park - Vilnius A1 - Built to suit (BTS) logistics terminal leased to Oribalt.

Oribalt offers a wide spectre of logistics solutions for pharmaceutical producers across the Baltics.

Lease term:	2035
Year built:	2020/2023
GLA:	9 625 m2

BSP Park – Vilnius East – Acquired logistics terminal leased to Girteka Logistics.

Girteka Logistics is a leading European transport company based in Lithuania, providing services across Europe, Scandinavia, and CIS countries.

2026
2006
17 149 m2

BSP Park – Vilnius A4 - Built to suit (BTS) logistics terminal leased out to Rhenus.

Rhenus Logistics is one of Europe's biggest transportation groups, and Rhenus LT covers the group's operations in the Baltics and Eastern Europe.

2035
2017/2020
18 226 m2

Klaipeda Business Park – Klaipeda FEZ - Developed industrial business park in Klaipėda Free Economic Zone.

Klaipėda Business Park (KVP) offers multiple tenants industrial, commercial and office spaces with fully developed amenities.

Lease term:	2024-2028
Year built:	2003-2008
GLA:	24 500 m2

BSP Park – Vilnius West - Built to suit (BTS) logistics terminal leased out to Delamode Baltics.

Delamode Baltics is a dynamic supplier of freight forwarding-solutions to the global market.

2035
2020/2022
13 205 m2

BSP Park – Vilnius A3 – Acquired logistics terminal leased to Vingės Terminalas.

Vingės Terminalas is a Lithuanian logistics company within export, transit, order processing and goods transport across Europe.

Lease term:	2038
Year built:	2006
GLA:	21 929 m2

Grandus Shopping Centre - Klaipeda – Acquired neighbourhood shopping center, centrally located in Klaipėda city.

Grandus shopping centre offers over 20 sales & service outlets/units, and 230 parking spaces.

Lease term:	2024-2032
Year built:	2005
GLA:	11 437 m2

BSP Retail - Rokiškis & Šilutė - Acquired grocery retail centres leased to Maxima and other tenants.

Maxima is a leading retail chain in the Baltic States, operating supermarkets and hypermarkets in Lithuania, Latvia, Estonia, Bulgaria, and Poland.

2032
2017
4 358 m2

BSP Park – Telsiai & Siauliai FEZ - Built to suit (BTS) distribution centres, leased to DPDgroup.

DPDgroup is an international parcel delivery service, owned by France's La Poste, providing courier and express mail services in Europe and beyond.

Lease term:	2037-2042
Year built:	2022
Size:	3 881 m2

Portfolio Sustainability & Certification Status

Development Portfolio

2023 developments & acquisitions pipeline (Lithuania & Latvia)

Segment	Location	GLA m2
Commercial - development	Klaipėda	7 200
Logistics – development	Vilnius	17 225
Industrial & logistics - development	Klaipėda	8 600
Logistics - development	Riga	12 000
Logistics - development	Vilnius	12 500

Total 50 325

Development land bank (Lithuania)

Segment	Location	Land m2
Industrial & logistics	BSP Park – Vilnius A1	81 000
Logistics	BSP Park – Vilnius Vaidotai	45 300
Industrial & logistics	BSP Park – Vilnius A4	41 483
Industrial & logistics	BSP Park – Šiauliai FEZ	12 000
Commercial, retail & office	Liepu Parkas – Klaipėda	36 000

Total 215 783

Development Approach

Client focus

Our projects are designed according to our clients' current and future needs. We offer our partners reliability, flexibility and value innovation - allowing us to grow together

Attractive locations

We own and acquire development land in strategic locations for current and future park and portfolio expansion

Quality buildings

We design and build our projects with a focus on superior design, quality materials, modern technology and sustainability

Long-term

We believe in long-term partnership with strong clients and are committed to increasing the lifecycle value of our assets

Sustainability

Sustainability is an integral part of our development strategy, including the following standard initiatives in our new developments;

• § Project functional life cycle design with expansion and flexibility considerations
• § Roof construction to be designed and built to allow installation of solar panels
• § Building to be certified with BREEAM in-use certification minimum "very good"

Current Project Pipeline Projections

Recent Development Track Record

Projects developed

• 13 000 m2 logistics terminal for Rhenus Logistics in 2017
• 5 000 m2 expansion for Rhenus in 2020
• 6 600 m2 logistic terminals for Oribalt in 2020
• 9 200 m2 logistic terminals for Delamode in 2020
• 5 000 m2 expansion for Delamode in Q2 2021
• 4 400 m2 logistics terminals for French owned DPD in 2022
• 3 000 m2 expansion for Oribalt completed Q1 2023

Recognition

• "Strongest Brand Baltics Developers Logistics" in 2020, 2021, 2022 and 2023 (European Real Estate 500)
• "Logistics/industrial developer of the year" 2020 (Euromoney Real Estate Survey)

Financials

• Key Figures
• Finance
• Net Asset Value (NAV) Development

Key figures – Baltic Sea Properties AS

BSP Group

Investment portfolio	1H 2023	2022	2021	2020	2019
Numbers in tEUR
Investment projects (m2)	124 064	124 064	105 066	95 632	123 995
Fair value of investment projects ex. development land	94 508	93 050	71 641	62 950	63 420
Development land value	3 620	3 620	3 800	1 750	2 000
Sum fair value of investment projects and development land	98 128	96 670	75 441	64 700	65 420
Annualised contractual rent	8 044	8 044	6 560	5 749	6 229
Net rent	3 855	6 666	6 141	5 526
EBITDA	3 003	4 689	4 370	4 302
Dividend yield	2,30 %	2,40 %	2,50 %	2,50 %
Balance sheet
Net Asset Value (EUR)	39 839	39 451	36 143	30 618	27 107
Net Asset Value (NOK)	466 277	414 778	361 024	320 575	267 375
Debt from credit institutions - RE portfolio	53 938	52 163	39 222	30 400	39 341
LTV - ex cash	54,97 %	53,96 %	51,99 %	46,99 %	60,14 %
Group financing	5 034	5 276	1 379	5 000	3 994
LTV group ex cash	60,10 %	59,42 %	53,82 %	54,71 %	66,24 %
LTV group inc. Cash	57,53 %	56,95 %	50,30 %	51,74 %	58,66 %
Cash	4 384	4 193	5 285	3 714	8 458

Finance

		Debt maturity			Interest Swap maturity
Year	EUR	Share %	Interest margin	EUR	Share %	Swap fixed rate
0-1 year				17 305 324	88,03 %	0,58 %
1-3 years				2 354 042	11,97 %	0,72 %
4-5 years	53 937 907	91,46 %	2,19 %
Total funding real estate portfolio1	53 937 907	91,46 %	2,19 %	19 659 366	36,45 %	0,60 %
Mezzanine2	1 708 817	2,90 %	9,30 %
Seller credit3	3 324 800	5,64 %	8,00 %
Sum loan	58 971 525	100 %	2,72 %	19 659 366	33,34 %	0,60 %

1) Weighted average bank interest margin is 2.19 % + 3-months EURIBOR ( per 30th of June 2023). The interest swap is against 3-months EURIBOR.

2) Interest rate for the mezzanine loan is including margin. Mezzanine loan was renewed and increased to MEUR 5.0 in July 2022 and MEUR 3.0 was repaid in November 2022 (credit facility is still available if needed). The loan facility expires in September 2024

3) Interest rate for the seller credit is including margin. Interest cost all-inclusive. Seller credit is related to the transaction of Grandus SC and expires at the end of 2023.

Loan financing	30/06/2023	31/12/2022
Interest-bearing debt incl. mezzanine loan and seller credit (MEUR)	58.9	57.4
LTV incl. mezzanine loan and seller credit	60.10 %	59.38 %
Interest-bearing debt excl.mezzanine loan and seller credit (MEUR)	53.9	52.1
LTV excl. mezzanine loan and seller credit	54.97 %	53.92 %
12-month running interest margin all loans (margin)*	2.73 %	2.73 %
Interest rate hedging ratio	33.34 %	39.74 %
Interest rate coverage (ICR) - group	2.34	2.39
Interest rate coverage (ICR) - SPV finance	2.92	4.5
Time until maturity interest-bearing debt (weighted)	3.92 yrs	4.4 yrs
Time until maturity interest hedging contracts (weighted)	0.66 yrs	1.3 yrs

Net Asset Value (NAV) Development

• General
• Real Estate Market, Portfolio & Assets
• Real Estate Development
• Suppliers/Contractors
• Tenants/Income & Vacancy
• Capital Management & Interest Rates
• Liquidity
• Currency
• Corporate Governance & Code Of Conduct
• Human resource Management

Risks	Major Factors & Issues	Mitigation & Management
General	Political – Invasion of Ukraine & embargos	NATO membership, refocus of transit logistics
	Economic – Inflation, growth & interest rates	Contingencies, discipline & cautious growth ambitions
	Social - Cost of living & demographics	Good ESG & HRM policies, tenant considerations
	Technological - E-commerce & automation	Understanding changes in logistics, retail & office
	Environmental - Climate & EU taxonomy	ESG policies, sustainability, renewable energy
	Legal & tax – Possible changes in	Awareness & proactive mitigation measures
	legislation
Real Estate Market	Economic uncertainity creating negative	Long term grow & hold strategy of existing portfolio with long leases and solid financing.
	implications for liquidity, finance &	Market may offer good value opportunities for growth
	valuations
Real Estate Portfolio	Sector demand and attractiveness changes	Maintaining a balanced portfolio with quality assets, good locations with sustainable
	and implications of embargos, E-commerce	income from strong tenants. Continually adapting investment & development startegies for
	& remote working trends	new opportunities.
Real Estate Assets	Increased focus on environmental impact &	Long term life cycle approach with CAPEX and upgrade investments to maintain and
	suistainability of buildings/projects	improve quality and sustainability of the projects
	Controlling quality, cost, safety and delivery	Long term partnerships with reliable partners with established project management
Real Estate Development	time of projects.	proceedures and policies
Suppliers/Contractors	Real & opportunistic inflationary pressure	Long term partnership, win-win approach with integrated supply chain management

Risks	Major Factors & Issues	Mitigation/Management
Tenants/Income	Profitability stress due to inflation & global economic slowdown	Tenant partnership approach with long term leases and good communication.
Vacancy	New leases and renewals	Portfolio weighted average unexpired lease term is over 9 years. Market rent levels for attractive premises
Capital Management	Balancing of equity & debt. Debt availability & refinancing terms	Strong partnerships with leverage rates under 60% Loan to Value (including banks and mezzaine finance) and with favourable finance terms.
Interest Rates	Euribor interest rates staying elevated	Adequate debt service contingencies Some interest rate hedging
Liquidity	Market uncertainty	Quality assets and maintaining cash reserves Already extended loan terms with Luminor
Currency	All income in Euro, small part cost in NOK	Maintaining minimal EUR/NOK cost exposure
Corporate Governance	Professionalism and ensuring compliance with fiduciary duties	Structured internal control measures Education & best practice policy adoption

Risks	Major Factors & Issues	Mitigation/Management
Code of Conduct	Corruption, gross negligence, irresponsible business practices and/or partnerships	Strict policies with high standards of integrity and zero-tolerance policy for any breaches
Human Resources Management	Maintaining professional, motivated and responsible people. Business process continuity risk for key executives	Good HRM policies. Respectful working environment with fair remuneration packages with a strong focus on education/training & professional development. Developed standard procedures with shared responsibility to reduce continuity risks.

Economic Environment

• Economic Forecast 2024
• Lithuania At A Glance
• Transport Network
• Real Estate Yield Spread Comparison

Economic Forecast 2024

GDP

Lithuania At A Glance

Source: Invest Lithuania https://investlithuania.com/why-lithuania/business-environment/

Science, math, computing, engineering, manufacturing and construction bachelor graduates per young adult population

Transport Network

Internationally renowned public logistics centres

• § Logistics centers have been established at important infrastructure cross roads, and provide companies with efficient one-stop-shop solutions
• § Companies gain competitive advantage through clustering around transportation infrastructure which creates a faster and more efficient logistics process
• § Other benefits include fast-tracked customs procedures

Modern transport and energy transmission infrastructure

• § Best road system in the Baltic and ranked 1st in Central and Eastern Europe when it comes to quality of roads
• § Klaipeda is the northernmost ice-free deep-water port on the Eastern shore of the Baltic Sea, and offers the widest range of shipping routes
• § 100% of energy resources may be imported from independent suppliers Existing gas, oil port terminals and Electricity links with Scandinavian countries.

Importance of logistics

• § As reported by the Bank of Lithuania, the logistics and warehousing sector represents the largest portion of exported services and contributed approximately 13% to the national GDP in 2021.
• § In 2022, the total value of Lithuania's export concluded for 44.2 bn EUR and indicated a 28% increase relative to 2021.
• § Lithuania is recognized as the 2nd in CEE for quality of cargo routes which inter-connect Western Europe and Asia.
• § Lithuania is highly valued by companies for its favorable business environment, deep industry expertise, and robust infrastructure, all of which offer tangible benefits to new market entrants.

Sources: Statistics Lithuania, Eurostat, Trading Economics, Invest Lithuania, European Commission, Colliers International, Datamonitor, Newsec Baltics,

Real Estate Yield Spread Comparison

Yield spreads for Norwegian versus BSP prime logistics Yield gap for BSP

• BSP attracts solid financing from international and local banks with funding costs fixed to EURIBOR, with competitive margins and conditions.
• Over the past 10 years, Norwegian prime logistics have been unable to achieve yield levels similar to BSP, with an average yield gap of 1.4%, although it is currently negative.
• Currently, BSP maintains a yield gap of around +1.99 % compared to Norwegian yield gap of - 1.20% for prime logistics.

Source: Newsec, Norges Bank, Company information

* Average bank margin is based on Union Bankundersøkels" where the Q1 2023 average margin for new real estate 5-year bank loan has been applied across the data series for Norwegian comparison.

** All in BSP finance cost is current average bank margin in BSP group + 5y EURIBOR SWAP

Investment Opportunity

• Investment Rationale
• BSP Investment Case

Investment Rationale

Yield Platform Financing Market position Timing

High-yielding quality assets

We hold a portfolio of commercial real estate assets with high occupancy in good locations, yielding stable and reliable cash flows from highly creditworthy clients.

Yield-gap to the Nordics

The Baltics offers attractive risk- adjusted returns, allowing the investor to capitalise on a market position of high cash flow returns and dividend capacity.

Nordic governance, local property management

We are listed for trade on Euronext Growth Oslo and headquartered in Norway, with operations and local management offices in Vilnius and Klaipėda.

Investment strategy

We focus on long-term ownership and create added value by developing projects designed for alternative users and changing demands.

Market access

As a Nordic investor in the Baltics, we get access to both the Nordic and Baltic banking and capital markets.

Preferred client

Being a Nordic stock-listed company makes us a low-risk client for local banks, giving us access to the best available terms.

Solid financing platform

Our robust financing platform allows us to capitalise on new opportunities while maintaining strong cash flow in our operations.

Preferred partner

Our Nordic governance and open-book policy makes us a trusted landlord by international and local clients.

Our people

Our team's proven track record and personal connections with top-level executives gives us a seat at the table where and when it matters.

Geography

The combined population of the Nordics and the Baltics surpasses 30 million.

Current market cycle

The current macro-economic conditions create a lucrative entry point at discounted pricing.

Megatrends

The Baltics is ideally located to serve as a logistics hub to the Baltics, Nordics and central Europe in the era of ecommerce and nearshoring.

Untapped potential

Our stock comes with the unreleased potential of economies of scale, with an organization rigged for increased portfolio size.

BSP Investment Case

Why invest in the Baltics?

• Fundamental drivers:
  • Strong GDP growth in past economic cycle and well positioned for future growth. (add stats)
  • Low public & private debt levels. (add stats)
  • Well regulated environment, with progressive governance and highly skilled labor.
  • Global & regional competitive advantages from cost, proximity and efficiency. (add stats)
  • Excellent developed infrastructure.
• Economic stability & regional security ensured by Euro, EU and NATO membership.

Why invest in Logistics, Industrial & Commercial real estate now?

• Baltic companies and real estate tenants have shown strong resilience in the current economic slowdown and have many competitive advantages.
• Strong logistics and industrial real estate demand in the Baltics, also related with global supply chain regionalization trends.
• Transition to a new economic cycle provides medium term growth opportunities in the real estate sector.
• Real estate yields have already increased significantly (100-150bpts), providing strong rental yields and medium-term valuation growth from rent inflation and possible yield decreases.
• Opportunities in the market for acquisitions due to some distressed sellers and over-leveraged investors.

BSP Investment Case

Why Baltic Sea Properties?

• Nordic governance with a regulated and visible platform on Oslo stock exchange
• Solid leadership and professional management with a strong track record
• Clearly established investment parameters and risk management including portfolio strategy, leverage, reserves, dividends, etc.
• Highly experienced & fully Integrated developer, investor & manager with no external fees or leakage
• High-yielding (8% approx.) quality assets in a diversified portfolio, with a strong development project pipeline and attractive land bank
• BSP holds a solid financing platform to seize new opportunities.
• 5-year growth & profitability strategy strong growth opportunities to increase economy of scale to >100 EURm NAV, with very attractive risk adjusted return projections of 10-15% IRR (without entry discount)
• 5-year exit & share liquidity strategy:
  • Dividend policy ensuring attractive annual returns
  • Stock exchange increased share liquidity from scale, performance, buy-back policy, economic timing and visibility (potential main listing)
  • M&A opportunities highly visible platform for potential mergers and acquisitions
  • Portfolio sale alternative/contingency liquidity strategy based on market value of assets
• Current share valuation Significant share discount (25-30%) to Net Asset Value (NAV), thus ensuring potential upside while mitigating downside risks

Disclaimer

This presentation has been prepared by Baltic Sea Properties AS in good faith and to our best ability with the purpose to give information about the company's operations and status.

This document must not be understood as an offer or encouragement to invest in the company. Baltic Sea Properties AS further makes reservations that errors may have occurred in its calculations of key figures or in the development of the presentation which may contribute to an inaccurate impression of the company's status and/or operations.

The presentation also includes descriptions and comments which are based on subjective assumptions and considerations, and thus must not be understood as a guarantee of future events or future profits.

Contacts

Lars Christian Berger

CEO

+47 930 94 319

LCB@balticsea.no

James Andrew Clarke

Chairman & CIO

+370 (612) 37 515

JAC@balticsea.no