Quarterly Report • Feb 14, 2017
Quarterly Report
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Central, flexible and environment friendly office properties
Property management
EPRA NAV excl. dividend
| All figures in NOK millions | Q4-16 | Q4-15 | 2016 | 2015 | 2014 | 2013 |
|---|---|---|---|---|---|---|
| Rental income | 506 | 437 | 1 899 | 1 760 | 1 772 | 1 632 |
| Change period-on-period | 16% | -3% | 8% | -1% | 9% | 3% |
| Net operating income | 455 | 376 | 1 740 | 1 574 | 1 624 | 1 475 |
| Change period-on-period | 21% | -7% | 11% | -3% | 10% | 3% |
| Net income from property management | 273 | 220 | 1 070 | 799 | 774 | 525 |
| Change period-on-period | 24% | 68% | 34% | 3% | 47% | na |
| Profit before tax | 1 475 | 717 | 3 306 | 3 075 | 1 377 | 458 |
| Change period-on-period | 106% | 65% | 8% | 123% | 201% | -43% |
| Profit after tax | 1 316 | 774 | 2 722 | 2 721 | 1 026 | 466 |
| Change period-on-period | 70% | 138% | 0% | 165% | 120% | -35% |
| Market value of the property portfolio* | 35 785 | 29 598 | 35 785 | 29 598 | 28 358 | 24 963 |
| Net nominal interest-bearing debt | 17 454 | 14 640 | 17 454 | 14 640 | 13 890 | 14 350 |
| Loan to value* | 47.6% | 46.1% | 47.6% | 46.1% | 48.4% | 56.6% |
| Interest coverage ratio* | 2.8 | 2.6 | 2.7 | 2.5 | 2.0 | 1.8 |
| Number of shares | 183.7 | 183.7 | 183.7 | 183.7 | 183.7 | 0.1 |
| All figures in NOK per share* | Q4-16 | Q4-15 | 2016 | 2015 | 2014 | 2013 |
| EPRA Earnings | 1.2 | 0.8 | 4.3 | 3.2 | 3.0 | 3 158 |
| Change period-on-period | 52% | na | 31% | 8% | na | na |
| EPRA NAV | 101 | 89 | 101 | 89 | 76 | 76 998 |
| Change period-on-period | 14% | na | 14% | 16% | na | na |
| EPRA NNNAV | 93 | 81 | 93 | 81 | 68 | 69 253 |
| Change period-on-period | 15% | na | 14% | 20% | na | na |
| Cash earnings/* | 1.5 | 1.2 | 5.8 | 5.0 | 4.1 | 3 833.3 |
| Change period-on-period | 22% | na | 17% | 21% | na | na |
| Dividend per share**** | 1.75 | 3.00 | 3.45 | 3.00 | 2.50 | na |
| Change period-on-period | na | na | 15% | 20% | na | na |
Reference
* See section "Calculation of key figures and definitions"
** Cash earnings in 2015 has been adjusted by 115 million due to termination of swap contracts in Q2-2015.
The termination fee was defined as a one-off item and did not reduce cash earnings as a basis for dividend for 2015.
*** Cash earnings definition changed from Q1-16 to also include net income from property management for JVs excluding Oslo S Utvikling. See definitions.
**** In 2016 Entra ASA started with semi-annual payments of dividends. Dividends paid in 2016 of 3.45 per share constitute of dividend approved and paid in 2016 for the first half year 2016 and dividend approved not yet paid for the second half of 2016.
Several of the numbers are marked as not applicable ("na") as the figures are not comparable either due to historical changes in the P&L or due to changes in the outstanding shares of Entra ASA.
Rental income was up by 16 per cent from 437 million in Q4 2015 to 506 million in Q4 2016, and by 8 per cent from 1,760 million in 2015 to 1,899 million in 2016. The increased rental income can be explained by the factors in the below income bridge.
| All figures in NOK millions | Q415 Q416 |
2015 2016 |
|---|---|---|
| Rental income previous period | 437 | 1 760 |
| Development projects | 6 | 46 |
| Acquisitions | 56 | 110 |
| Disposals | -7 | -49 |
| Other* | -1 | -27 |
| Like-for-like growth | 15 | 60 |
| Rental income | 506 | 1 899 |
*Extraordinary lease buy-out in Q3-15 (30 mill)
The increase in rental income in the period is mainly driven by the acquisition of Oslo City and the Skøyen portfolio in 2016, partly offset by the sale of non-core properties during 2015 and 2016. The increased rental income is also related to the completion of several projects during the period, primarily Schweigaardsgate 16, Akersgata 34/36 and Grønland 53 during the second half of 2015 and the Gullfaks building in August 2016.
On a like-for-like basis the rental growth was 4.1 per cent, compared to both the same quarter last year and compared to 2015. The annual indexation of the lease contracts constituted 2.8 per cent. The remaining growth is mainly driven by income effects from increased occupancy in the Oslo portfolio.
Average 12 months rolling rent per square meter was 1,940 (1,768) as of 31.12.16. The increase is mainly related to portfolio rotations towards more high quality assets, hereunder the acquisitions of Oslo City and the Skøyen portfolio combined with divestments of non-core properties. 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.
The occupancy rate increased to 96.8 per cent (95 per cent) as of 31.12.16. The rental value of vacant space as of 31.12.16 was approximately 66 million (88 million) on an annualised basis.
Gross letting including re-negotiated contracts was 127 million in the quarter of which 19 million is attributable to letting in the project portfolio. Lease contracts with an annual lease of 16 million were terminated in the quarter. Net letting defined as new lease contracts plus lease-up on renegotiated contracts less terminated contracts came in at 25 million (19 million) in the quarter. For 2016, gross letting including re-negotiated contracts was 434 million and lease contracts with a total value of 67 million was terminated. Net letting in the period came in at 176 million. The time difference between the net letting in the management portfolio and its effect on the financial results is normally 6-12 months. Effects from letting in the project portfolio can be found in the project table under the section Investments and Divestments.
Total property costs amounted to 52 million (61 million) in the fourth quarter and 159 million (185 million) for 2016 as a whole. Total property costs is split as follows:
| All figures in NOK millions |
Q4-16 | Q4-15 | 2016 | 2015 |
|---|---|---|---|---|
| Maintenance | 20 | 23 | 50 | 56 |
| Tax, leasehold, insurance |
5 | 7 | 30 | 35 |
| Letting and prop. adm. | 11 | 14 | 38 | 42 |
| Direct property costs | 15 | 16 | 42 | 52 |
| Total property costs | 52 | 61 | 159 | 185 |
As a consequence of the effects explained above, net operating income came in at 455 million (376 million) in the quarter and 1,740 million (1,574 million) for the financial year 2016.
Other revenues was 766 million (27 million) in the quarter and 950 million (240 million) in 2016. In the quarter, 637 million was related to the sale of the Gullfaks building in Stavanger which was classified as property and housing-units for sale. The same amount was recognised for 2016. Other costs associated with the sale of the Gullfaks building amounted to 583 million.
In addition, other revenue of 99 million in the quarter was related to Youngskvartalet in Oslo which is classified as a construction contract. In 2016, the revenue recognised was 222 million. Until the project is delivered to the buyer, the Group will recognise other revenue and other costs based on the completion level. Other costs associated with the project amounted to 99 million in the quarter and 220 million in 2016. In the 2016 other revenue of 19 million (184 million) was recognised related to sale of 5 (31) apartments at Ringstadbekk in Bærum. Other costs recognised in the Ringstabekk project was 20 million (185 million) in 2016. The remaining part of the Ringstadbekk project was sold in April 2016.
Other revenue also consists of income from services provided to tenants of 27 million in the quarter and 65 million in 2016.
Other costs also consists of other property costs mainly related to depreciation and rental expenses.
Administrative costs amounted to 42 million (45 million) in the quarter and 152 million (168 million) in 2016. The reduction is mainly a result of streamlining of the cost base.
Entras share of profit from associates and JVs was 74 million (16 million) in the quarter and 150 million (44 million) in 2016. In the first quarter of 2016, 33 per cent of Oslo City Kjøpesenter was recognised as a jointly controlled entity. From, and including, the second quarter 2016, Entra has consolidated the office section of the property. The parking section in Oslo City, of which Entra owned 50 per cent, was treated as a jointly controlled entity in Entras accounts until Entra´s share of the company was demerged into a wholly owned subsidiary of Entra at the end of the third quarter of 2016.
Entra`s share of profit from associates and JVs is composed as follows:
| All figures in NOK millions |
Q4-16 | Q4-15 | 2016 | 2015 |
|---|---|---|---|---|
| Income from property management |
0 | 1 | 30 | 3 |
| Changes in market value |
67 | 19 | 109 | 46 |
| Tax | -16 | -5 | -34 | -17 |
| Other income and costs |
22 | 0 | 45 | 12 |
| Results from associates and JVs |
74 | 16 | 150 | 44 |
| All figures in NOK millions |
Q4-16 | Q4-15 | 2016 | 2015 |
| Income from property management |
0 | 1 | 30 | 3 |
| Changes in market value |
67 | 19 | 109 | 46 |
| Tax | -16 | -5 | -34 | -17 |
| Other income and costs |
22 | 0 | 45 | 12 |
| Results from associates and JVs |
74 | 16 | 150 | 44 |
For a more detailed breakdown of the results from associates and JVs see the section on Partly owned companies.
Net realised financials amounted to 153 million (112 million) in the quarter and 572 million (625 million) in 2016 and is composed as follows:
| All figures in NOK millions |
Q4-16 | Q4-15 | 2016 | 2015 |
|---|---|---|---|---|
| Interest and other financial income Interest and other financial cost |
8 -161 |
13 -125 |
14 -586 |
19 -645 |
| Net realised financials |
-153 | -112 | -572 | -625 |
Net realised financials has increased in the fourth quarter of 2016 compared to 2015 mainly due to increased interest bearing debt of approximately 3 billion compared to the same quarter last year, following the acquisition of the Oslo City and Skøyen properties. The increase in net realised financial is somewhat offset by lower interest rates on floating rate debt (Nibor).
The average interest rate was 3.48 per cent (3.69 per cent) as at 31.12.16.
Net income came in at 347 million (235 million) in the quarter and 1,190 million (840 million) for 2016. When including only the income from property management in the results from JVs, the net income from property management was 273 million (220 million) in the quarter and 1,070 million (799 million) for 2016, representing a year-on-year increase of 24 per cent in the quarter and 34 per cent for 2016.
| All figures in NOK millions |
Q4-16 | Q4-15 | 2016 | 2015 |
|---|---|---|---|---|
| Net income Less: |
347 | 235 | 1 190 | 840 |
| Value changes in associates and JVs |
67 | 19 | 109 | 46 |
| Tax from associates and JVs |
-16 | -5 | -34 | -17 |
| Other income and costs |
22 | 0 | 45 | 12 |
| Net income from | ||||
| property management |
273 | 220 | 1 070 | 799 |
(Annualised, rolling 4 quarters)
* Q215 adjusted for 115 million swap termination fee.
Net value changes amounted to 1,128 million (482 million) in the quarter and 2,116 million (2,235 million) for 2016.
The valuation of the property portfolio resulted in a net positive value change of 868 million (403 million) in the quarter and 1,991 million (1,818 million) for the financial year 2016. In the fourth quarter, about 461 million relates to the ongoing project portfolio, mainly explained by improved occupancy, increased project area and reduced risk as each project is moving towards completion. For the management portfolio, about 165 million of the value changes is attributable to yield compression and 192 million is the result of new contracts signed in the quarter. The remaining changes are related to terminations of contracts, transactions in the quarter and other property related changes. For 2016 in total, about 565 million relates to the project portfolio, while 911 million of the value changes is driven by yield compression in the largest cities and 413 million is a result of new and renegotiated lease contracts.
Net changes in the value of financial instruments was 260 million (79 million) in the quarter and 125 million (417 million) for 2016. The positive development in the quarter is mainly explained by higher market interest rates and reduced time to maturity on high interest rate swaps, partly offset by a negative contribution related to decreasing credit margins on existing fixed rate debt.
The Group, except for certain partly owned companies with marginal tax effect, is currently not in a tax payable position due to tax loss carry forward. At year-end 2016, the tax loss carry forward for the Group was 953 million. The change in deferred tax was -155 million (57 million) in the quarter and - 580 million (-354 million) in 2016. The change in deferred tax was positively impacted by 160 million as a result of change in the corporate income tax (CIT) from 25 per cent in 2016 to 24 per cent from 1 January 2017. However, the effective tax rate is less than the CIT mainly due to sales of properties without tax effect.
Profit before tax was 1,475 million (717 million) in the quarter and 3,306 million (3,075 million) for 2016. Profit after tax was 1,316 million (774 million) in the quarter and 2,722 million (2,721 million) in 2016. In the quarter the comprehensive income after tax was 1,319 million (800 million) and 2,705 million (2,750 million) in 2016 due to actuarial gain on the Groups pension benefit scheme.
EPRA Earnings amounted to 221 million (145 million) in the fourth quarter of 2016 and 784 million (597 million) in 2016. The increase in EPRA earnings in the fourth quarter of 2016 is mainly related to increased rental income.
EPRA Earnings net of tax amounted to 249 million (211 million) in the fourth quarter and 1,000 million (832 million) in 2016.
Further information about the EPRA Earnings calculations can be found on page 30.
The Group's assets amounted to 38,890 million (33,618 million) as at 31.12.16. Of this, investment property amounted to 35,629 million (28,823 million) and investment property held for sale to 168 million (165 million). 4 properties were classified as held for sale as at 31.12.16. Intangible assets were 124 million (161 million) at the end of 2016 of which 109 million is goodwill related to Hinna Park in Stavanger. The goodwill in Hinna Park was as previously announced amortised by 37 million in the quarter due to sale of the property Gullfaks.
Investments in associates and jointly controlled entities were 1,561 million (2,789 million). The decrease is mainly attributable to the establishment of Oslo City Kontor AS and Oslo City Parkering 2 AS as 100 per cent owned companies subsequent to demergers realised in 2016, partly offset by an increase of 284 million related to capital increase in the jointly controlled entity Entra OPF that develop MediaCity Bergen, as this company is funded only by equity.
Property and housing-units for sale amounted to 0 (589 million) at 31.12.16, impacted by sale of Gullfaks at Hinna Park and the Ringstabekk project.
Other receivables was 476 million (206 million) at the end of December 2016. The increase compared to the fourth quarter 2015 was affected by capitalised construction costs of 219 million, of which 99 million is capitalised in the fourth quarter of 2016, related to the property Youngskvartalet that will be delivered to the buyer in the fourth quarter of 2017.
The Group held 243 million (212 million) in cash and cash equivalents at 31.12.16. In addition, the Group has 3,830 million (3,435 million) in unutilised credit facilities.
The Group had interest bearing debt of 18,113 million (15,205 million) as of 31.12.16. The increase is mainly explained the acquisition, the acquisition of Skøyen portfolio for approximately 2.5 billion and payment of dividend of 863 million during the financial year 2016. In addition, the jointly controlled entity Hinna Park Eiendom AS has paid 70 million to the non-controlling interest of the Group.
Book equity totaled 15,124 million (13,354 million), representing an equity ratio of 39 per cent (40 per cent). Book equity per share was 82 (73). Equity per share was 101 (89) based on the EPRA NAV standard and 93 (81) based on EPRA NNNAV. Outstanding shares at 31.12.16 totalled 183.7 million (183.7 million)
Net cash flow from operating activities came to 359 million (265 million) in the quarter and 1,079 million (850 million) in 2016. The change mainly relates to higher net income from property management.
The net cash flow from investments was 88 million (-2,062 million) in the quarter and -2,972 million (-1,010 million) for 2016. Proceeds from property transactions of 692 million (52 million) in the quarter and 1,021 million (1,792 million) in 2016 was mainly related to the property transactions as described under "Transactions" on page 15 of this report
Purchase of investment properties of 11 million (-132 million) relates to pro contra adjustments to transactions closed in 2016. In the fourth quarter last year it was related to the purchase of Trondheimsporten. For the year 2016 purchase of investments properties amounted to 2,536 million (-132 million) and relates to the acquisition of the Skøyen portfolio in Oslo and the land plot Lars Hillesgate 25 in Bergen.
The cash effect from upgrades of investment properties amounted to -462 million (-238 million) in the quarter and -1,001 million (-911 million) in 2016.
Investment in property and housing units for sale of -55 million (-50 million) in the quarter and -233 million (-82 million) is mainly related to investments in the property "Gullfaks" in Stavanger that was sold with closing in November 2016 and Youngskvartalet in Oslo.
Net payments in associates and jointly controlled entities amounted to -81 million (-1,652 million) in the quarter and -253 million (-1,720 million) in 2016 of which 47 million relates to capital increase in Entra OPF in the fourth quarter and 284 million of the year 2016 partly offset by repayment related to the Oslo City closing.
Net cash flow from financing activities was -372 million (1,851 million) in the quarter and 1,923 million (174 million) in 2016.
Net proceeds of interest bearing debt was 11 million (1,851 million in the quarter and 2,858 million (634 million) in 2016. During the quarter Entra has had a net repayment of bank loans and certificates of 107 million and 300 million, respectively, and issued bond loans of 400 million. In 2016 Entra has had a net repayment of 1,083 million and 200 million in bank loans and certificates , respectively, and net issued bond loans of repaid bond loans of 4,129 million.
Dividends paid amounts to 382 million (0) in the fourth quarter of 2016 and 933 million (459 million) in 2016. In the quarter dividend of 312 million was paid to the shareholders of the Group. In addition, Hinna Park Eiendom AS which is consolidated in the Group accounts, has paid out a dividend of 140 million to the owners of which Entra ASA has received 50 per cent (net 70 million) in Q4 2016. During 2016 Entra has paid out a total of NOK 4.7 per share/864 million to its shareholders (NOK 3 per share/551 million for FY 2015 and NOK 1.7 per share/312 million for the first half of 2016).
The net change in cash and cash equivalents was 55 million (54 million) in the quarter and 31 million (14 million) for 2016
During the fourth quarter, Entra's total interest bearing nominal debt decreased by 7 million to 17,697 million. The change in interest bearing debt was composed by a bond issue of 400 million and a reduction of bank debt and commercial paper financing by 107 million and 300 million, respectively.
During the quarter, Entra reopened a fixed rate bond (maturity 02.06.2023) with 400 million. Entra has also refinanced commercial paper loans for a total of 1.000 million.
As at 31.12.16, net interest-bearing nominal debt after deduction of liquid assets of 243 million was 17,454 million.
The average remaining term of the Group's debt portfolio was 4.4 years at 31.12.16 (4.4 years as at 31.12.15). 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. Entra's financing structure includes bank loans, bonds and commercial papers. At the end of the period, 70 per cent of the Group's financing was from the capital market.
| Maturity profile | 0-1 yrs | 1-2 yrs | 2-3 yrs | 3-4 yrs | 4+ yrs | Total |
|---|---|---|---|---|---|---|
| Commercial paper (NOKm) | 1 700 | - | - | - | - | 1 700 |
| Bonds (NOKm) | 1 529 | 1 200 | 1 700 | 700 | 5 500 | 10 629 |
| Bank loans (NOKm) | 111 | 750 | 1 660 | 2 142 | 705 | 5 368 |
| Total (NOKm) | 3 340 | 1 950 | 3 360 | 2 842 | 6 205 | 17 697 |
| Commercial paper (%) | 51 | - | - | - | - | 10 |
| Bonds (%) | 46 | 62 | 51 | 25 | 89 | 60 |
| Bank loans (%) | 3 | 38 | 49 | 75 | 11 | 30 |
| Total (%) | 100 |
| Unutilised credit facilities (NOKm) |
1 800 | - | 840 | 1 190 | - | 3 830 |
|---|---|---|---|---|---|---|
| Unutilised credit facilities (%) | 47 | - | 22 | 31 | - | 100 |
| Total | 17 697 | 100 |
|---|---|---|
| Commercial paper | 1 700 | 10 |
| Bank loans | 5 368 | 30 |
| Bonds | 10 629 | 60 |
| Sources of financing | NOKm | % |
| All figures in NOK millions | 31.12.2016 | Target |
|---|---|---|
| Loan-to-value (LTV) | 47.6 | Approx. 50% |
| Interest coverage ratio (ICR) | 2.7 | Min. 1.65x |
| Debt maturities <12 months | 19% | Max 30% |
| Maturity of hedges <12 months | 47% | Max 50% |
| Average time to maturity (hedges) | 3.6 | 2-6 years |
| Financing commitments next 12m | 117% | Min. 100% |
| Average time to maturity (debt) | 4.4 | Min. 3 years |
The average interest rate of the debt portfolio was 3.48 per cent as at 31.12.16. 53 per cent of the Group's financing was hedged at a fixed interest rate as at 31.12.16, with a weighted maturity of 3.6 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.
| The Group's total debt in millions: | 17 697 |
|---|---|
| The Group's average interest rate¹ | 3.48% |
| Fixed rate instruments² | Forward starting swaps³ | Average credit margin | |||||
|---|---|---|---|---|---|---|---|
| Amount (NOKm) |
Interest rate (%) |
Amount | Interest rate (%) |
Tenor (years) |
Amount (NOKm) |
Credit margin (%) |
|
| <1 year | 82 | 3.04 | 7 027 | 1.07 | |||
| 1-2 years | 1 700 | 3.78 | 1 300 | 2.30 | 7 | 1 950 | 1.12 |
| 2-3 years | 1 650 | 4.12 | 1 800 | 1.90 | 7 | 1 700 | 0.96 |
| 3-4 years | 1 700 | 4.05 | 1 520 | 1.16 | |||
| 4-5 years | 650 | 4.65 | 1 000 | 1.05 | |||
| 5-6 years | 750 | 2.07 | 800 | 0.78 | |||
| 6-7 years | 1 450 | 2.21 | 2 600 | 1.09 | |||
| 7-8 years | 900 | 2.71 | - | ||||
| 8-9 years | - | - | |||||
| 9-10 years | 110 | 4.36 | - | ||||
| >10 years | 400 | 5.63 | 1 100 | 0.39 | |||
| Total | 9 392 | 3.55 | 3 100 | 2.07 | 17 697 | 1.02 |
¹Average reference rate (nibor) is 1.24 per cent as of the reporting date.
²Excluding forward starting swaps and credit margins on fixed rate bonds (credit margins are displayed in the table to the right).
³The table displays future starting point, notional principle amount, average fixed rate and tenor for forward starting swaps.
Entra´s management portfolio consists of 85 buildings with a total area of approximately 1.1 million square metres. As of 31.12.16, the management portfolio had a market value of around 33.9 billion. The occupancy rate was 96.8 per cent (95.0 per cent). The weighted average unexpired terms for the Group's leases was 7.0 years (7.6) for the management portfolio and 7.7 years (7.8) when the project portfolio is included. The public sector represents approximately 70 per cent of the total customer portfolio. The entire property portfolio consists of 94 properties with a market value of about 35.8 billion. Entra focuses the portfolio on the major cities in Norway; Oslo and the surrounding region, Bergen, Stavanger and Trondheim. Entra has its head office in Oslo.
Entra´s properties are valued by two external appraisers (Akershus Eiendom and Cushman & Wakefield Realkapital) on a quarterly basis. The market value of the portfolio in Entra´s balance sheet is based on the average of the two external
appraiser's valuation of each individual property. Valuation of the management portfolio is performed on a property-byproperty basis, using individual DCF models and taking into account the property's current characteristics combined with the external appraisers' estimated return requirements and expectations on future market development. The market value is defined as the external appraisers' 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 specific project risk on valuation date. The land and development portfolio is valued based on actually zoned land.
Year-on-year, the portfolio net yield is reduced from 5.9 per cent to 5.7 per cent. 12 months rolling rent has increased from 1,768 to 1,940 per square meter, whereas the market rent has increased from 1,746 to 1,906 per square meter.
| Number | 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 | 40 | 622 910 | 97.4 | 6.4 | 23 266 | 37 350 | 1 394 | 2 238 | 5.5 | 1 392 | 2 235 |
| Trondheim | 9 | 115 227 | 98.2 | 6.1 | 2 503 | 21 724 | 179 | 1 555 | 6.5 | 171 | 1 481 |
| Sandvika | 9 | 94 589 | 87.4 | 10.2 | 2 176 | 23 010 | 128 | 1 355 | 5.4 | 127 | 1 342 |
| Stavanger | 5 | 72 680 | 96.3 | 9.8 | 2 033 | 27 978 | 137 | 1 879 | 6.2 | 123 | 1 696 |
| Drammen | 8 | 70 068 | 97.4 | 8.5 | 1 914 | 27 311 | 119 | 1 704 | 5.9 | 107 | 1 527 |
| Bergen | 6 | 57 119 | 99.4 | 4.9 | 1 264 | 22 135 | 85 | 1 491 | 6.1 | 84 | 1 479 |
| Kristiansand | 7 | 45 158 | 94.2 | 9.8 | 669 | 14 821 | 52 | 1 152 | 6.8 | 54 | 1 198 |
| Other | 1 | 5 531 | 93.5 | 4.0 | 79 | 14 283 | 7 | 1 193 | 7.2 | 7 | 1 195 |
| Management portfolio | 85 | 1 083 282 | 96.8 | 7.0 | 33 905 | 31 299 | 2 101 | 1 940 | 5.7 | 2 065 | 1 906 |
| Project portfolio | 5 | 89 875 | 18.7 | 1 422 | 15 819 | ||||||
| Development sites | 4 | 101 558 | 0.6 | 458 | 4 508 | ||||||
| Property portfolio | 94 | 1 274 716 | 7.7 | 35 785 | 28 073 |
Youngsgt. 7-9 is included in market value of the management portfolio at sales price of 60 million.
The calculation of net yield is based on the valuers' assumption of ownership costs, which at 31.12 corresponds to 8.7 per cent of market rent.
The below table reconciles the individual balance sheet items to the property market value presented above.
| All figures in NOK millions | 2016 | 2015 |
|---|---|---|
| Investment property | 35 629 | 28 823 |
| Investment properties held for sale | 168 | 165 |
| Properties and housing-units held for sale | 0 | 617 |
| Other | -13 | -7 |
| Property market value | 35 785 | 29 599 |
During the fourth quarter, Entra signed new and renegotiated leases with an annual rent totalling 127 million (57,000 square metres) and received notices of termination on leases with an annual rent of 16 million (7,000 square metres). The impact in rent from the total amount of renegotiated contracts signed within the quarter was positive with 0.8 per cent. Net letting was 25 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. On an annual basis, Entra signed new and renegotiated leases in 2016 with annual rent totalling 434 million and received notice of termination on leases with an annual rent of 67 million. Net letting was 176 million in 2016.
Entra has invested 350 million in the portfolio of investment properties in the fourth quarter. In addition, Entra has invested 120 million through its non-consolidated jointly controlled entities (239 million on a 100 per cent basis).
| Ownership (%) |
Location | Expected completion |
Project area ('000 sqm) |
Occupancy (%) |
Estimated total project cost* (NOKm) |
Of which accrued* (NOKm) |
Yield on cost** |
|
|---|---|---|---|---|---|---|---|---|
| Group: | ||||||||
| Powerhouse Kjørbo, block 3 | 100 | Sandvika | Jul-17 | 4 200 | 54 | 144 | 129 | 5.6 |
| Trondheimsporten | 100 | Trondheim | Nov-17 | 28 600 | 88 | 680 | 450 | 6.4 |
| Brattørkaia 16 | 100 | Trondheim | Jun-18 | 8 400 | 100 | 291 | 66 | 6.6 |
| Brattørkaia 17 | 100 | Trondheim | Mar-19 | 18 200 | 48 | 497 | 84 | 6.2 |
| Tullinkvartalet UIO | 100 | Oslo | Dec-19 | 21 000 | 92 | 1 489 | 517 | 5.5 |
| Total Group | 80 400 | 3 101 | 1 245 | |||||
| Jointly controlled companies: | ||||||||
| MediaCity Bergen | 50 | Bergen | Aug-17 | 45 000 | 79 | 1 830 | 1 534 | 6.1 |
| Total Jointly controlled companies | 45 000 | 1 830 | 1 534 |
* Total project cost (Including book value at date of investment decision/cost of land)
** Estimated net rent (fully let) at completion/total project cost (including cost of land)
In Tullinkvartalet Entra has started construction of a new 21,000 square metres campus building for the Faculty of Law of University of Oslo. The property is 92 per cent let to the University on a 25-year lease. The new build project will involve Entra's properties in Kristian Augusts gate 15, 19, and parts of 21, which to a large extent is being demolished and re-built. The final zoning plan was approved on 1 February 2017 and the project will be finalised in the end of 2019. Currently engineering, planning and demolishing is ongoing. The new build project aims for a BREEAM Excellent classification.
On Brattørkaia 16, Entra is building a 8,400 square meter campus building for BI Norwegian Business School. The
property is fully let to BI Norwegian Business School on a 20 year lease. The project has high environmental ambitions and aims for a BREEAM Excellent classification. Construction has commenced and the project will be finalised in the summer 2018.
On Brattørkaia 17, Entra will build Powerhouse Brattørkaia, an energy positive and environment friendly office building of approximately 18,200 square metres, of which a 2,500 square metres parking basement. The property is approximately 50 per cent pre-let. Powerhouse Brattørkaia will utilise sun and sea water for heating and cooling. The building will be covered by 3,000 square metres of solar panels and thus produce around 500,000 kWh of renewable energy annually. This is more than twice as much as the building consumes for
heating, cooling, ventilation and lighting and means that the building has a positive energy balance in its lifetime also when all the energy that goes into building processes, materials and finally demolition is included. The project is aiming for the environmental classification BREEAM Outstanding and Energy class A. Construction has commenced and the project will be finalised in the first quarter of 2019.
"Trondheimsporten" is a new-build project centrally located in Holtermanns veg 70 in Trondheim. When completed, the property will be a 15-floor office building of approximately 28,600 square metres. The property is 88 per cent pre-let to Trondheim municipality and the Norwegian Labour and Welfare Administration on 10-year contracts. The building is expected to be finalised during the fourth quarter of 2017 with a BREEAM Very Good classification. During the quarter, the construction works up until the fifth floor is completed, and technical installations have started.
In Sandvika Entra is refurbishing the third block at Kjørbo into a new Powerhouse with a BREEAM Excellent classification. A Powerhouse shall during its lifetime produce more renewable energy than it uses for materials, production, operation, renovation and demolition. The property is 4,200 square metres and is 54 per cent pre-let to Asplan Viak.
Media City Bergen involves total renovation of approximately 35,000 square metres and an extension of approximately 10,000 square metres in Lars Hilles gate 30 in Bergen. The vision behind the concept is to create an environment for innovation and knowledge development within the media industry, through establishing a cluster of media, technology, education and research companies. The largest media companies such as TV2, NRK, Bergensavisen, Bergens Tidende, the Media Faculty of Bergen University, and Vizrt have signed lease contracts. The property is 50 per cent owned by Entra through Entra OPF. The project will be completed in August 2017.
Youngskvartalet in Oslo involves both a new building and refurbishment of three existing buildings. The project consists of 9,400 square metres and will be finalised in Q4 2017. The project is forward sold to Industri Energi as part of a larger transaction that took place in 2012, where Entra booked a total gain of 134 million. When finalized, Entra will deliver the project at cost, plus a project management fee. Total project cost (incl. land) is approximately 340 million.
In Strømsveien 96 in Oslo, the refurbishment of 18,100 square metres (12,500 sqm. office) was finalised in December and the Norwegian Medicines Agency has moved into 6,500 square metres. In December Customs Region Oslo and Akershus signed a 15-year lease contracts for a total of 8,500 square metres, the tenant will move in by September 2017. The building has aimed for a BREEAM Very Good classification and Energy class B. The property is now close to fully let.
The refurbishment of Cort Adelers gate 30 in Oslo was completed in December 2016. The building is fully let to Oslo Municipality Education Authority.
Finally, Sundtkvartalet in Oslo, a new, environmentally leading office building of approximately 31,300 square metres was finalised in December 2016. The ambition is to obtain a BREEAM Excellent classification, passive house and Energy class A. The project is organised through a joint venture where Skanska CDN and Entra own 50 per cent each. The property is now 91 per cent let.
Entra actively seeks to improve the quality of its property portfolio through a disciplined strategy of acquisitions and divestments. Entra focuses on acquisition of large properties and projects in specific areas within our four core markets; Oslo and the surrounding area, Bergen, Trondheim and Stavanger. Target areas include areas in the city centers and selected clusters and communication 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 meet these acquisition criteria.
Also, Entra actively divests smaller properties and properties outside its core markets. The acquisition and divestment strategy is flexible, allowing Entra to respond to market opportunities as they arise.
During the quarter, Entra acquired the property Kristian Augusts gate 13 in Tullinkvartalet in Oslo for 155 million. Entra has also sold the properties Moloveien 10 in Bodø, Kongens gate85/Erling Skakkesgate 60 in Trondheim and Lervigsveien 32/TInngata 8 in Stavanger for a total consideration of 155 million.
| Purchased properties | Area | Transaction quarter |
No of sqm | Transaction value |
Closing date |
|---|---|---|---|---|---|
| Kristian Augusts gate 13 | Oslo | Q4 2016 | 3 300 | 155 | 20.01.2017 |
| Skøyen portfolio (three properties) | Oslo | Q2 2016 | 61 000 | 2 529 | 01.09.2016 |
| Lars Hilles gate 25 | Bergen | Q2 2016 | 5 800 | 53 | 01.09.2016 |
| Office part of Oslo City* | Oslo | Q4 2015 | 40 250 | 1 650 | 31.12.2015 |
| Trondheimsporten | Trondheim | Q4 2015 | 28 600 | 163 | 18.12.2015 |
| Sum | 135 650 | 4 550 |
| Transaction | Transaction | ||||
|---|---|---|---|---|---|
| Sold properties | quarter | No of sqm | value | Closing date | |
| Moloveien 10 | Bodø | Q4 2016 | 5 531 | 83 | 15.02.2017 |
| Kongensgate 85/Erling Skakkesgate 60 | Trondheim | Q4 2016 | 1 769 | 16 | 31.03.2017 |
| Lervigsveien 32/Tinngata 8 | Stavanger | Q4 2016 | 6 400 | 56 | 30.11.2016 |
| Kalfarveien 31 | Bergen | Q2 2016 | 8 440 | 85 | 01.11.2016 |
| Fritznersgate 12 | Oslo | Q2 2016 | 824 | 53 | 15.09.2016 |
| Telemarksgata 11 | Skien | Q2 2016 | 4 300 | 11 | 01.07.2016 |
| Ringstabekk AS** | Bærum | Q1 2016 | 5 570 | 114 | 06.04.2016 |
| Strandveien 13, Tromsø | Tromsø | Q4 2015 | 11 560 | 158 | 28.01.2016 |
| Tollbugata 2, Bodø | Bodø | Q4 2015 | 940 | 14 | 01.12.2015 |
| Hans Kiersgate 1 b and c | Drammen | Q4 2015 | 2 230 | 11 | 30.10.2015 |
| Kirkegata 2 B | Arendal | Q3 2015 | 5 800 | 33 | 30.09.2015 |
| Gullfaks, Hinna Park (forward sale) | Stavanger | Q3 2015 | 17 900 | 727 | 30.10.2016 |
| Keysersgate 15 | Oslo | Q1 2015 | 315 | 16 | 01.03.2015 |
| Portfolio of six properties | Moss, Skien, Lillestrøm | Q1 2015 | 62 918 | 1 375 | 24.02.2015 |
| Grønnegaten 122 | Tromsø | Q4 2014 | 6 600 | 72 | 07.04.2015 |
| Skansegaten 2 | Stavanger | Q4 2014 | 4 379 | 110 | 09.01.2015 |
| Sum | 145 476 | 2 933 |
* Includes 50 per cent of parking basement
** Commercial areas included in number of sqm (residential not included)
Entra selectively gains access to development projects through its shareholding in subsidiaries with non-controlling interests and jointly controlled entities. Entra's ownership interests currently include the following companies:
Entra and Drammen Municipality own Papirbredden Eiendom AS. The company owns six office properties totalling around 59,000 sqm and a future development potential totalling around 60,000 sqm in Drammen.
Entra and Camar Eiendom own Hinna Park Eiendom AS. The company owns three office properties of around 30,000 sqm and development potential for two new office properties totalling around 29,000 sqm.
Entra and Oslo Pensjonsforsikring (OPF) own Entra OPF Utvikling AS. The company owns two properties in Bergen of which one is the project property MediaCity Bergen in Lars Hilles gate 30. According to the agreement between Entra and Oslo Pensjonsforsikring, Entra OPF Utvikling AS is not to be
financed with debt, any capital requirements are thus to be financed with equity contributions from the owners.
Entra and Skanska Commercial Development own Sundtkvartalet Holding AS. The company owns a new-built office property of approximately 31,000 square meters in Sundktvartalet in Oslo.
OSU is a property development company that is undertaking the development of parts of the city district Bjørvika in Oslo. Entra's share of the market value of the properties and projects in OSU is estimated at approximately 1.6 billion as of 31.12.16. The estimate is based on valuations from two external appraisers. Entra's share of the net asset value as at 31.12.16 was 0.9 billion after taking into account estimated latent deferred tax of 10 per cent.
| All figures in NOK millions | Papirbredden Eiendom AS |
Hinna Park Eiendom AS |
Sum consolidated companies |
Entra OPF Utvikling AS |
Sundtkvartalet Holding AS |
Oslo S Utvikling AS |
Other | Sum associated companies & JVs |
|---|---|---|---|---|---|---|---|---|
| Share of ownership (%) | 60 | 50 | 50 | 50 | 33 | 0 | ||
| Rental income | 92 | 81 | 173 | 19 | 1 | 89 | 78 | 187 |
| Net operating income | 89 | 65 | 154 | 11 | 1 | 89 | 72 | 173 |
| Net income | 55 | 29 | 84 | 9 | -2 | 25 | 77 | 109 |
| Changes in value of investment properties | 175 | -46 | 129 | 127 | 92 | 0 | 1 | 220 |
| Changes in value of financial instruments | 10 | 20 | 31 | 0 | 0 | 66 | 0 | 66 |
| Profit before tax | 240 | 3 | 244 | 136 | 90 | 91 | 78 | 395 |
| Tax | -53 | 53 | 4 | -34 | -21 | 54 | -19 | -19 |
| Profit for period/year | 187 | 56 | 248 | 102 | 70 | 145 | 59 | 376 |
| Non-controlling interests | 75 | 28 | 103 | |||||
| Entras share of profit | 51 | 35 | 48 | 16 | 150 | |||
| Book value | 827 | 192 | 535 | 7 | 1 561 | |||
| Market value properties | 1 665 | 1 048 | 2 713 | 1 792 | 1 250 | 4 543 | 7 584 | |
| Entras share of market value properties | 999 | 524 | 1 523 | 896 | 625 | 1 515 | 3 035 |
The transaction market is highly active and characterised by high demand for properties in the largest cities. There were almost as many transactions in 2016 as in 2015 but few large corporate transactions. The total transaction volume was thus down at more normalised levels in 2016. The continuous buyside demand in the market has continued to push yields further down. Prime yield in Oslo is currently at 3.8 per cent according to Entra's consensus report, summarising inputs from leading Norwegian commercial property brokers and analysts.
TRANSACTION VOLUME NORWAY
Source: Entra Consensus report
As of year-end the Oslo office vacancy was about 7.8 per cent, according to Entra´s consensus report. The vacancy is expected to drop further due to continuous office-toresidential conversion, low construction activity in the office market in Oslo, and a slight increase in employment.
During the last quarter Oslo rents have seen a broad uplift and rent levels are expected to continue to grow due to limited new building activity, high conversion of office to residential and increasing employment.
In Bergen, the office vacancy seems to be levelling out at about 10 per cent. The office vacancy in Bergen is mainly related to properties situated around the oil and gas intensive office areas at Kokstad / Sandsli / Flesland. Rents in the city centre of Bergen are increasing due to low supply of modern, centrally located office premises.
In Stavanger, overall office vacancy has continued to rise to around 11 per cent at the end of the year. There is a downward pressure on rents in "oil and gas intensive" areas like Forus. In the Stavanger city centre, the vacancy is at about 6 per cent and rent levels are more stable.
The rent level in Trondheim has remained unchanged throughout 2016 and the vacancy level is currently around 10 per cent. There has been limited new office space coming into the market, however the volume of new office space will increase next year and the office vacancy is thus expected to rise somewhat
| 2013 | 2014 | 2015 | 2016 | 2017e | 2018e | |
|---|---|---|---|---|---|---|
| Vacancy Oslo and Bærum (%) | 7.4 | 7.8 | 8.4 | 7.8 | 7.1 | 6.5 |
| Rent per sqm, high standard Oslo office | 2 907 | 3 025 | 2 935 | 2 970 | 3 140 | 3 283 |
| Prime yield (%) | 5.2 | 4.7 | 4.1 | 3.8 | 3.9 | 4.0 |
Source: Entra Consensus report
At 31.12.16, the Group had 166 employees.
During the quarter, there were four injuries that caused absence from work The Group had an LTIF rate (number of accidents with lost time per million hours worked in last 12 months) on ongoing projects of 3.6 at the end of the quarter vs 1.7 at the end of the third quarter 2016. Entra has a continuous HSE focus both in on-going projects and in the operations and works continually to avoid injuries.
The Group is exposed to financial risk through its debt financing, and changes in interest rate levels on loans at floating rates will affect the Group's cash flow. The risks associated with the development in market rates are managed through active use of interest rate hedging instruments and fixed rate bonds. Liquidity/ refinancing risk is reduced by entering into long-term loan agreements, as well as through establishing a diversified maturity structure and the use of various credit markets and counterparties.
The Group's equity is affected by value changes on properties and financial instruments that are due to changes in, among other things, interest and rent levels, yields and other market conditions.
Entra is exposed to the letting market, which is affected by macroeconomic changes in, among other things, GDP, the CPI rate and employment. Vacancy in the portfolio and rent changes on renegotiation of existing contracts affect the ongoing cash flow. Efforts are made to reduce the letting risk by systematic customer service, following up contract expiries and plans for letting work, as well as by adapting properties to customers' requirements. By entering into long leases with a diversified maturity structure, the Group achieves a stable and predictable cash flow.
Business and strategic risks include the possible impact on the Group's operations of political decisions, regulations and significant unforeseen non-recurring events. Entra will be exposed to property tax on a majority of its properties in Oslo starting in 2017.
Entra carries out major upgrading and development projects involving risks in relation to deadlines and costs.
On 18 January 2017 Entra announced that it had entered into an agreement with Samhällsbyggnadsbolaget i Norden AB (publ) regarding sale of Entra's property portfolio in Kristiansand.
The Kristiansand portfolio comprise seven properties totalling approximately 45,000 sqm and the total transaction value is 863 million. The transaction is subject to the buyer obtaining satisfactory debt financing. Closing and settlement is expected to take place around 31 March 2017 for all properties except the 2,250 sqm new school building under construction in Kongsgård Allé 20 where closing will take place when the new build is completed, estimated to June 2018.
Entra's share capital is NOK 183,732,461 divided into 183,732,461 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 31.12.16, Entra had 5,686 shareholders. Norwegian investors held 59 per cent of the share capital and foreign investors 41 per cent.
The 10 largest shareholders as of 31.12.16 were:
| Shareholder | % holding |
|---|---|
| Norwegian Ministry of Trade, Industry and Fisheries |
33.4 |
| Folketrygdfondet | 8.5 |
| Geveran Trading | 8.1 |
| State Street Bank (Nominee) | 2.7 |
| Danske Invest Norske | 2.2 |
| The Bank of New York (Nominee) | 1.8 |
| JP Morgan Bank Luxemburg (Nominee) | 1.4 |
| The Bank of New York (Nominee) | 1.3 |
| Danske Invest Norske | 1.1 |
| State Street Bank (Nominee) | 1.0 |
| SUM 10 LARGEST SHAREHOLDERS | 61.5 |
In line with the dividend policy of distributing approximately 60 per cent of Cash Earnings, the board of Entra will propose to distribute a dividend of NOK 1.75 per share for the last six months of the financial year 2016.
The annual general meeting in Entra ASA will be held on 27 April 2017. In line with the dividend policy of distributing approximately 60 per cent of Cash Earnings, the board of Entra will propose to distribute a semi-annual dividend of NOK 1.75 per share for the second half of 2016. In October 2016, Entra paid out NOK 1.7 per share for the first six months of 2016. For the financial year 2016 Entra will thus have paid out NOK 3.45 per share compared to NOK 3 per share for 2015. Cash Earnings is defined as net income from property management less payable tax
The Norwegian economy has been influenced by a weaker macroeconomic development and general uncertainty but there has been positive development in certain key macro indicators over several quarters. The downturn in the oil sector and related industries has turned into a moderate recovery. It has primarily had a negative impact in the southern and western part of Norway, and sub markets with a high level of oil exposure have experienced increasing vacancies and pressure on rents. Entra is in a relatively good position having low presence in the geographical areas hit by the downturn, long lease contracts with solid tenants and a low exposure towards the oil sector.
In Oslo, that constitutes around 66 per cent of Entra's revenues, we expect vacancy levels to see a falling trend going forward as net new office space coming into the market in 2017 and 2018 is marginal due to low new building activity and high conversion from commercial to residential buildings. Decreasing vacancy is thus expected to lead to increasing market rent levels in Oslo going forward.
Modern offices located near public transportation are attractive and obtain solid rents compared to premises located in less central areas.
Market interest rates for longer dated maturities has increased in Q4, however the good credit availability and stable shortterm interest rates contributes to favourable financing conditions for Entra under its well-balanced interest rate hedge position.
Future financial market risk is significant, but Entra, with its strong balance sheet and predictable cash flow, is in a very good position to secure favourable financing also going forward.
Property investors seek quality properties with good locations and long and secure cash flows. The yield compression in the Norwegian market is expected to level out. However, Entra's portfolio with a healthy mix of attractive properties, value enhancing development project and a positive rental market outlook should provide a continued positive portfolio value development, albeit at a significantly slower pace.
With its flexible properties in attractive locations, strong tenant base with long lease contracts, exciting project pipeline and solid financial position, the Board believe that Entra is well positioned for the future.
Oslo, 13 February 2017
The Board of Entra ASA
| All figures in NOK millions | Q4-16 | Q4-15 | 2016 | 2015 |
|---|---|---|---|---|
| Rental income | 506 | 437 | 1 899 | 1 760 |
| Repairs & maintenance | -20 | -23 | -50 | -56 |
| Operating costs | -31 | -38 | -109 | -129 |
| Net operating income | 455 | 376 | 1 740 | 1 574 |
| Other revenue | 766 | 27 | 950 | 240 |
| Other costs | -753 | -27 | -927 | -224 |
| Administrative costs | -42 | -45 | -152 | -168 |
| Share of profit from associates and JVs | 74 | 16 | 150 | 44 |
| Net realised financials | -153 | -112 | -572 | -625 |
| Net income | 347 | 235 | 1 190 | 840 |
| - of which net income from property management | 273 | 220 | 1 070 | 799 |
| Changes in value of investment properties | 868 | 403 | 1 991 | 1 818 |
| Changes in value of financial instruments | 260 | 79 | 125 | 417 |
| Profit before tax | 1 475 | 717 | 3 306 | 3 075 |
| Tax payable | -4 | 0 | -4 | 0 |
| Change in deferred tax | -155 | 57 | -580 | -354 |
| Profit for period/year | 1 316 | 774 | 2 722 | 2 721 |
| Actuarial gains and losses | 5 | 35 | -23 | 39 |
| Change in deferred tax on comprehensive income | -1 | -9 | 6 | -10 |
| Total comprehensive income for the period/year | 1 319 | 800 | 2 705 | 2 750 |
| Profit attributable to: | ||||
| Equity holders of the Company | 1 262 | 766 | 2 619 | 2 648 |
| Non-controlling interest | 53 | 9 | 103 | 73 |
| Total comprehensive income attributable to: | ||||
| Equity holders of the Company | 1 266 | 791 | 2 602 | 2 677 |
| Non-controlling interest | 53 | 9 | 103 | 73 |
| All figures in NOK millions | 31.12.2016 | 31.12.2015 |
|---|---|---|
| Intangible assets | 124 | 161 |
| Investment property | 35 629 | 28 823 |
| Other operating assets | 26 | 35 |
| Investments in associates and JVs | 1 561 | 2 789 |
| Financial derivatives | 472 | 530 |
| Long-term receivables | 163 | 53 |
| Total non-current assets | 37 976 | 32 391 |
| Property and housing-units for sale | 0 | 589 |
| Investment property held for sale | 168 | 165 |
| Trade receivables | 27 | 55 |
| Other receivables | 476 | 206 |
| Cash and bank deposits | 243 | 212 |
| Total current assets | 914 | 1 226 |
| Total assets | 38 890 | 33 618 |
| Shareholders equity | 14 732 | 12 995 |
| Non-controlling interests | 392 | 359 |
| Total equity | 15 124 | 13 354 |
| Interest-bearing debt | 14 734 | 12 083 |
| Deferred tax liability | 3 855 | 3 324 |
| Financial derivatives | 894 | 1 121 |
| Other non-current liabilities | 358 | 237 |
| Total non-current liabilities | 19 841 | 16 764 |
| Interest-bearing debt | 3 379 | 3 123 |
| Trade payables | 290 | 142 |
| Other current liabilities | 257 | 236 |
| Total current liabilities | 3 926 | 3 501 |
| Total liabilities | 23 766 | 20 265 |
| Total equity and liabilities | 38 890 | 33 618 |
| Equity 31.12.2014 184 3 556 7 039 286 11 064 Profit for the year 2 648 73 2 721 Other comprehensive income 28 28 Dividend -459 -459 Acquired own shares - employee saving scheme 0 -6 -1 -7 Sold own shares - employee saving scheme 0 6 0 6 Equity 31.12.2015 184 3 556 9 255 359 13 354 Profit for period 2 619 103 2 722 Other comprehensive income -17 -17 Dividend -864 -70 -934 Net equity effect of employee share saving scheme -1 -1 Net equity effect of LTI share program 0 0 Equity 31.12.2016 184 3 556 10 992 392 15 124 |
All figures in NOK millions | Share capital |
Other paid in capital |
Retained earnings |
Non controlling interest |
Total equity |
|---|---|---|---|---|---|---|
| All figures in NOK millions | Q4 16 | Q4 15 | 2016 | 2015 |
|---|---|---|---|---|
| Profit before tax | 1 475 | 717 | 3 306 | 3 075 |
| Net expensed interest and fees on loans | 173 | 125 | 590 | 645 |
| Net interest and fees paid on loans | -132 | -120 | -522 | -584 |
| Share of profit from associates and jointly controlled entities | -74 | -16 | -150 | -44 |
| Depreciation and amortisation | 40 | 2 | 46 | 18 |
| Changes in value of investment properties | -868 | -403 | -1 991 | -1 818 |
| Changes in value of financial instruments | -260 | -79 | -125 | -417 |
| Change in working capital | 2 | 39 | -59 | -26 |
| Net cash flow from operating activities | 356 | 265 | 1 096 | 850 |
| Proceeds from property transactions | 692 | 52 | 1 021 | 1 792 |
| Purchase of investment properties | 11 | -132 | -2 536 | -132 |
| Upgrades of investment properties | -462 | -238 | -1 001 | -911 |
| Investment in property and housing-units for sale | -55 | -50 | -233 | -82 |
| Purchase of intangible and other operating assets | -7 | -20 | -15 | -41 |
| Net payment financial assets | -10 | -24 | -5 | -30 |
| Net payment of loans to associates and JVs | -1 | 0 | -1 | 62 |
| Net payments in associates and JVs | -81 | -1 652 | -253 | -1 720 |
| Dividends from associates and JVs | 0 | 0 | 51 | 51 |
| Net cash flow from investment activities | 88 | -2 062 | -2 972 | -1 010 |
| Proceeds interest-bearing debt | 3 111 | 7 997 | 17 536 | 19 126 |
| Repayment interest-bearing debt | -3 118 | -6 147 | -14 695 | -18 492 |
| Proceeds from/repayment of equity | 0 | 0 | -1 | -1 |
| Dividends paid | -382 | 0 | -933 | -459 |
| Net cash flow from financing activities | -389 | 1 851 | 1 906 | 174 |
| Change in cash and cash equivalents | 55 | 54 | 31 | 14 |
| Cash and cash equivalents at beginning of period | 188 | 158 | 212 | 198 |
| Cash and cash equivalents at end of period | 243 | 212 | 243 | 212 |
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 2015.
The financial reporting covers Entra ASA, subsidiaries, associated companies and jointly controlled entities. The interim financial statements have not been audited.
In the first quarter of 2016 the Group did some changes to how the profit and loss statement is presented in order to better reflect the underlying operational results and to a greater extent be harmonised with how peer companies and equity analysts present their figures. The major changes are:
In addition, some changes in the balance sheet have been done in order to improve the presentation.
The Group is organised into two geographic units: Oslo and Regional Cities. These units are supported by a Letting and Business Development division and a Development and Technology division. In addition, Entra has group and support functions within accounting and finance, legal, procurement, communication and HR.
Each of the geographic units are organised and monitored by management teams in seven geographic areas: Oslo, Trondheim, Sandvika, Stavanger, Drammen, Bergen and Kristiansand.
The geographic units do not have their own profit responsibility. The geographical units are instead followed up on economical and non-economical key figures ("key performance indicators"). These key performance indicators are reported and analysed by geographic area to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance. Hence, the Group report their segment information based upon these seven geographic areas.
| Number | 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 | 40 | 622 910 | 97.4 | 6.4 | 23 266 | 37 350 | 1 394 | 2 238 | 5.5 | 1 392 | 2 235 |
| Trondheim | 9 | 115 227 | 98.2 | 6.1 | 2 503 | 21 724 | 179 | 1 555 | 6.5 | 171 | 1 481 |
| Sandvika | 9 | 94 589 | 87.4 | 10.2 | 2 176 | 23 010 | 128 | 1 355 | 5.4 | 127 | 1 342 |
| Stavanger | 5 | 72 680 | 96.3 | 9.8 | 2 033 | 27 978 | 137 | 1 879 | 6.2 | 123 | 1 696 |
| Drammen | 8 | 70 068 | 97.4 | 8.5 | 1 914 | 27 311 | 119 | 1 704 | 5.9 | 107 | 1 527 |
| Bergen | 6 | 57 119 | 99.4 | 4.9 | 1 264 | 22 135 | 85 | 1 491 | 6.1 | 84 | 1 479 |
| Kristiansand | 7 | 45 158 | 94.2 | 9.8 | 669 | 14 821 | 52 | 1 152 | 6.8 | 54 | 1 198 |
| Other | 1 | 5 531 | 93.5 | 4.0 | 79 | 14 283 | 7 | 1 193 | 7.2 | 7 | 1 195 |
| Management portfolio |
85 | 1 083 282 | 96.8 | 7.0 | 33 905 | 31 299 | 2 101 | 1 940 | 5.7 | 2 065 | 1 906 |
| Project portfolio | 5 | 89 875 | 18.7 | 1 422 | 15 819 | ||||||
| Development sites | 4 | 101 558 | 0.6 | 458 | 4 508 | ||||||
| Property portfolio | 94 | 1 274 716 | 7.7 | 35 785 | 28 073 |
Youngsgt. 7-9 is included in market value of the management portfolio at sales price of 60 million.
The calculation of net yield is based on the valuers' assumption of ownership costs, which at 31.12 corresponds to 8.7 per cent of market rent.
| Number | 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 | 38 | 514 532 | 95.8 | 7.1 | 17 533 | 34 076 | 1 068 | 2 076 | 5.6 | 1 062 | 2 065 |
| Sandvika | 10 | 100 047 | 90.1 | 10.7 | 2 170 | 21 693 | 127 | 1 274 | 5.4 | 127 | 1 274 |
| Drammen | 7 | 70 814 | 89.7 | 9.1 | 1 701 | 24 024 | 107 | 1 514 | 5.9 | 104 | 1 466 |
| Bergen | 6 | 57 119 | 99.4 | 5.4 | 1 202 | 21 042 | 85 | 1 492 | 6.3 | 92 | 1 605 |
| Trondheim | 9 | 117 186 | 96.7 | 6.6 | 2 408 | 20 546 | 178 | 1 516 | 6.6 | 165 | 1 408 |
| Stavanger | 6 | 78 921 | 93.8 | 10.2 | 2 075 | 26 290 | 138 | 1 750 | 6.2 | 131 | 1 661 |
| Kristiansand | 8 | 45 158 | 93.4 | 9.1 | 608 | 13 464 | 50 | 1 110 | 7.2 | 48 | 1 069 |
| Other | 3 | 21 384 | 90.7 | 6.8 | 228 | 10 650 | 23 | 1 090 | 8.9 | 25 | 1 181 |
| Management portfolio |
87 | 1 005 162 | 95.0 | 7.6 | 27 925 | 27 782 | 1 777 | 1 768 | 5.9 | 1 755 | 1 746 |
| Project portfolio | 3 | 95 103 | 14.9 | 1 228 | 12 909 | ||||||
| Development sites | 6 | 129 711 | 0.2 | 446 | 3 436 | ||||||
| Property portfolio | 96 | 1 229 976 | 7.8 | 29 598 | 24 064 |
Ringstabekk housing project is included in market value of management portfolio at cost price of 19 million. Youngsgt. 7-9 is included in market value of the management portfolio at sales price of 60 million. The calculation of net yield is based on the valuers' assumption of ownership costs, which at 31.12 corresponds to 8.1 per cent of market rent.
| All figures in NOK millions | Q4-16 | Q4-15 | 2016 | 2015 |
|---|---|---|---|---|
| Closing balance previous period | 34 494 | 28 243 | 28 989 | 28 230 |
| Purchase of investment property | 143 | 213 | 4 183 | 213 |
| Investment in the property portfolio | 350 | 213 | 1 004 | 807 |
| Capitalised borrowing costs | 5 | 1 | 11 | 22 |
| Sale of investment property | -61 | -24 | -379 | -1 548 |
| Reclassified to property and housing-units for sale | 0 | 0 | 0 | -493 |
| Reclassified to construction contracts | 0 | -60 | 0 | -60 |
| Changes in value of operational lease | -30 | -40 | -28 | -59 |
| Changes in value of investment properties | 897 | 443 | 2 018 | 1 877 |
| Closing balance | 35 798 | 28 989 | 35 798 | 28 989 |
| Investment property held for sale | 168 | 165 | 168 | 165 |
| Investment property | 35 629 | 28 823 | 35 629 | 28 823 |
Investment properties held for sale include the properties Molovegen 10 in Bodø, Kalfarveien 31 in Bergen and Erling Skakkesgate 60 and Kongensgate 85 in Trondheim. During the fourth quarter 2016 Entra had closing for the investment property Lervigsveien 32/Tinngata 8 in Stavanger and Gullfaks at Hinna Park in Stavanger, that was classified as property and housing-units-for sale. Kalfarveien 31 in Bergen was sold in the second quarter 2016 and are classified as held for sale until closing that will take place 1 February 2017. Molovegen 10 in Bodø was sold in the January 2017 with closing in February 2017.
Sale of investment properties in the fourth quarter of 2016 relates to the sale of the property Lervigsveien 32/Tinngata 8 in Stavanger and for 2016 in addition the following properties: Strandveien 13 in Tromsø, Ringstabekkveien 105 in Bærum, Fritzners gate 12 in Oslo and Telemarksgata 11 in Skien.
The value change on operational lease agreements relates to the property Langkaia 1, which is owned under a lease that expires on 31 December 2030. The property will then revert without consideration to the Oslo Harbour Authority. The property is classified as an investment property under IAS 40 and is valued at 668 million (649 million) at the end of the fourth quarter of 2016. The Group records quarterly a negative value change on the property as the maturity date of the lease approaches.
Entra is currently involved in legal arbitration proceedings or disputes with Norwegian Datasenter Group AS/ Greenfield Property AS and Evry ASA.
The hearing of the dispute with Norwegian Datasenter Group AS and Greenfield Property AS took place in Oslo District Court in January 2015 and Entra prevailed on all counts. The judgment has been appealed by the counterparty and the hearing of the dispute will take place in February 2017.
The hearing of the dispute with Evry ASA/Evry AS took place in Oslo District Court in February 2015 and Evry ASA/Evry AS prevailed. Entra disagrees with the verdict and the ruling has been appealed. The hearing of the dispute took place in the Court of Appeal in October 2016 and Entra prevailed on all counts. The judgment has been appealed to the Supreme Court by the counterparty. The Supreme Court will at latest by March 2017 decide if the appeal will be treated.
Entra has not made any provision for the claims as the Group considers it not probable that an outflow of resources will be required.
The valuation methods and principles are unchanged in the quarter. See the annual financial statements for 2015 for further information. Set out below is a summary of assets and liabilities measured at fair value divided between the different valuation hierarchies set out in IFRS 7.
With the exception of equity capital instruments of 0.5 million (level 3) all assets and liabilities are level 2. Investment properties of 35.797 million are classified at level 3.
| All figures in NOK millions | 31.12.2016 | 31.12.2015 |
|---|---|---|
| Assets measured at fair value: | ||
| Assets measured at fair value with change over the result | ||
| - Investment property | 35 629 | 28 823 |
| - Investment property held for sale | 168 | 165 |
| - Derivatives | 472 | 530 |
| Financial assets held for sale | ||
| - Equity instruments | 1 | 1 |
| Total | 36 270 | 29 520 |
| Liabilities measured at fair value: | ||
| Financial liabilitites measured at fair value with change over the result | ||
| - Derivatives | 894 | 1 121 |
| Total | 8 209 | 7 075 |
|---|---|---|
| - Commercial paper | 1 700 | 1 900 |
| - Bonds | 5 615 | 4 054 |
| - Derivatives | 894 | 1 121 |
The Group has in January 2017 signed an agreement regarding the divestment of a property portfolio in Kristiansand with a total property value of 675 million. The buyer is Samhällsbyggnadsbolaget i Norden AB (publ) and the transaction is subject to the buyer obtaining satisfactory debt financing.
Closing and settlement is expected to take place around 31 March 2017 for all properties totalling approximately 45,000 sqm, except for the 2,250 sqm new school building under construction in Kongsgård Allé 20, where closing will take place when the new building is completed, estimated to be in June 2018.
Key figures for the property portfolio in total are listed below:
| All figures in NOK millions | 2016 | 2015 |
|---|---|---|
| Rental income | 50 | 47 |
| Repairs & maintenance | -4 | -3 |
| Operating costs | -2 | -2 |
| Net operating income | 44 | 43 |
| Book value as of 31.12. | 675 | 613 |
| DEBT RATIO (LTV) | ||||
|---|---|---|---|---|
| All figures in NOK millions | 2016 | 2015 | ||
| Net nominal interest-bearing debt | 17 454 | 14 640 | ||
| Total market value of the property portfolio | 36 681 | 31 777 | ||
| Market value of the property portfolio | 35 785 | 29 598 | ||
| Share of Entra OPF Utvikling (50%) | 896 | 525 | ||
| Share of Oslo City Kjøpesenter AS (33,3%) | 0 | 1 654 | ||
| Debt ratio (LTV) % | 47.6 | 46.1 | ||
| INTEREST COVERAGE RATIO (ICR) | ||||
| All figures in NOK millions | Q4-16 | Q4-15 | 2016 | 2015 |
| Net income | 347 | 235 | 1 190 | 840 |
| Depreciation | 40 | 2 | 46 | 18 |
| Results from associates and joint ventures | -74 | -16 | -150 | -44 |
| Net realised financials | 153 | 112 | 572 | 625 |
| EBITDA adjusted | 466 | 333 | 1 658 | 1 440 |
| Share of EBITDA Entra OPF Utvikling | 1 | 2 | 4 | 5 |
| EBITDA adjusted for share of Entra OPF Utvikling | 466 | 335 | 1 663 | 1 444 |
| Interest cost | 154 | 129 | 567 | 548 |
| Other finance expense | 13 | 1 | 41 | 24 |
| Applicable net interest cost | 167 | 130 | 608 | 572 |
| Interest Coverage Ratio (ICR) | 2.8 | 2.6 | 2.7 | 2.5 |
The following performance indicators have been prepared in accordance with best practices as defined by EPRA (European Public Real Estate Association) in its Best Practices Recommendations guide.
| 2016 / | 2015 / | |||
|---|---|---|---|---|
| Summary table EPRA performance measures | Unit | 31.12.2016 | 31.12.2015 | |
| A | EPRA earnings per share (EPS) | NOK | 4.3 | 3.2 |
| B | EPRA NAV per share | NOK | 101.3 | 89.0 |
| EPRA triple net asset value per share (NNNAV) | NOK | 93.4 | 81.4 | |
| C | EPRA net initial yield | % | 5.6 | 5.8 |
| EPRA, "topped-up" net initial yield | % | 5.6 | 5.8 | |
| D | EPRA vacancy rate | % | 3.8 | 4.9 |
| E | EPRA cost ratio (including direct vacancy costs | % | 15.9 | 19.1 |
| EPRA cost ratio (excluding direct vacancy costs) | % | 14.0 | 16.4 | |
The details for the calculation of the key figures are shown in the following tables:
EPRA earnings is a measure of the underlying development in the property portfolio and is calculated as net income after tax excluding value changes on investment properties, unrealised changes in the market value of financial derivatives and gains/losses on the sale of properties and their associated tax effects.
| All figures in NOK millions | Q4-16 | Q4-15 | 2016 | 2015 |
|---|---|---|---|---|
| Profit for period/year - Earnings per IFRS income statement | 1 316 | 774 | 2 722 | 2 721 |
| Add: | ||||
| Changes in value of investment properties | -868 | -403 | -1 991 | -1 818 |
| Tax on changes in value of investment properties* | 217 | 109 | 498 | 491 |
| Reversal of deferred tax arising from sales of properties (tax excempted) | 0 | -3 | -14 | -218 |
| Changes in value of financial instruments | -260 | -79 | -125 | -417 |
| Tax on changes in value of financial instruments* | 65 | 21 | 31 | 112 |
| Profit or losses on disposal of inventory in Oslo S Utvikling | -19 | -8 | -60 | -38 |
| Share of profit jointly controlled entities – fair value adjustments | -68 | -19 | -110 | -46 |
| Reversal of deferred tax EPRA adjusments jointly controlled entities | 2 | 7 | 18 | 24 |
| Net income non-controlling interests of subsidiaries | -9 | -3 | -37 | -34 |
| Reversal of tax non-controlling interests of subsidiaries | 2 | 0 | 9 | 8 |
| Significant one-off items | 0 | 0 | 0 | 85 |
| Tax on significant one-off items | 0 | 0 | 0 | -23 |
| Change in tax rate** | -161 | -252 | -161 | -252 |
| Tax payable | 2 | 2 | ||
| EPRA earnings | 221 | 145 | 784 | 597 |
| Reversal of tax adjustment above | -129 | 118 | -384 | -142 |
| Reversal of change in deferred tax from income statement | 155 | -57 | 580 | 354 |
| Reversal of tax payable from income statement | 4 | 0 | 4 | 0 |
| Reversal of tax JVs | -2 | 6 | 16 | 24 |
| EPRA earnings net of tax | 249 | 211 | 1 000 | 832 |
* 25 per cent from Q1 2016, 27 per cent previous periods
** From 27 per cent to 25 per cent in 2015 and from 25 per cent to 24 per cent for 2016
figures
The objective with EPRA NAV is to demonstrate the fair value of net assets given a long-term investment horizon. EPRA NAV is calculated as net asset value adjusted to include market value of all properties in the portfolio and interest-bearing debt, and to exclude certain items not expected to crystallise in a long-term investment property business model such as e.g. financial derivatives and deferred tax on the market value of investment properties.
The objective with EPRA NNNAV is to report the fair value of net assets in the Group on the basis that these are immediately realised. EPRA NNNAV is EPRA NAV adjusted to reflect the fair value of debt and derivatives and in order to include deferred tax on value changes.
| All figures in NOK millions | 2016 | 2015 |
|---|---|---|
| Total equity | 15 124 | 13 354 |
| Less: Non-controlling interests | 392 | 359 |
| NAV per financial statement | 14 732 | 12 995 |
| Add: Adjustment to property portfolio | 1 | 89 |
| Add: Revaluation of investments made in the JV | 368 | 118 |
| Add: Net market value on financial derivatives | 421 | 591 |
| Add: Deferred tax arising on revaluation moments | 3 091 | 2 550 |
| EPRA NAV | 18 613 | 16 342 |
| Market value on property portfolio | 35 785 | 29 598 |
| Tax value on property portfolio | 15 007 | 12 476 |
| Basis for calculation of tax on gain on sale | 20 778 | 17 122 |
| Less: Market value of tax on gain on sale (5% tax rate) | 1 039 | 856 |
| Net market value on financial derivatives | 421 | 591 |
| Tax expense on realised financial derivatives* | 101 | 148 |
| Less: Net result from realisation of financial derivatives | 320 | 443 |
| Book value of interest bearing debt | 18 113 | 15 205 |
| Nominal value of interest bearing debt | 17 696 | 14 851 |
| Basis for calculation of tax on realisation of interest-bearing debt | 416 | 354 |
| Less: Market value of tax on realisation* | 100 | 89 |
| EPRA NNNAV | 17 154 | 14 954 |
* 24 per cent from 2016, 25 per cent from 2015
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 figures in NOK millions | Oslo | Trond -heim |
Sand vika |
Stavanger | Drammen | Bergen | Kristian sand |
Other | Total |
|---|---|---|---|---|---|---|---|---|---|
| Investment property - wholly owned | 23 935 | 3 318 | 2 324 | 1 158 | 249 | 1 325 | 685 | 79 | 33 072 |
| Investment property - share of JVs/Funds |
625 | 0 | 0 | 524 | 999 | 896 | 0 | 0 | 3 043 |
| Total property portfolio | 24 560 | 3 318 | 2 324 | 1 682 | 1 248 | 2 221 | 685 | 79 | 36 115 |
| Less projects and land and developments |
-669 | -815 | -147 | -86 | 0 | -823 | -15 | 0 | -2 556 |
| Completed management portfolio | 23 891 | 2 503 | 2 176 | 1 596 | 1 248 | 1 397 | 669 | 79 | 33 559 |
| Allowance for estimated purchasers` cost |
50 | 14 | 9 | 4 | 5 | 7 | 5 | 1 | 95 |
| Gross up completed management portfolio valuation |
23 941 | 2 517 | 2 185 | 1 600 | 1 253 | 1 404 | 674 | 80 | 33 654 |
| 12 months rolling rent | 1 415 | 179 | 128 | 104 | 80 | 95 | 52 | 7 | 2 060 |
| Estimated ownership cost | 119 | 17 | 11 | 8 | 5 | 9 | 7 | 1 | 176 |
| Annualised net rents | 1 296 | 162 | 118 | 97 | 75 | 86 | 45 | 6 | 1 884 |
| Add: Notial rent expiration of rent free periods or other lease incentives |
9 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 9 |
| Topped up net annualised net rents | 1 305 | 162 | 118 | 97 | 75 | 86 | 45 | 6 | 1 893 |
| EPRA NIY (net initial yield) | 5.5% | 6.4% | 5.4% | 6.0% | 6.0% | 6.1% | 6.7% | 7.2% | 5.6% |
| EPRA "topped-up" NIY (net initial yield) |
5.5% | 6.4% | 5.4% | 6.0% | 6.0% | 6.1% | 6.7% | 7.2% | 5.6% |
Estimated Market Rental Value (ERV) of vacant space divided by ERV of the whole portfolio.
| Vacancy | 3.4% | 1.8% | 12.6% | 3.5% | 2.6% | 0.5% | 5.8% | 6.5% | 3.8% |
|---|---|---|---|---|---|---|---|---|---|
| Total market rent | 1 410 | 171 | 127 | 93 | 71 | 96 | 54 | 7 | 2 028 |
| Market rent vacant areas | 48 | 3 | 16 | 3 | 2 | 0 | 3 | 0 | 77 |
| All figures in NOK millions | Oslo | Trondheim | Sandvika | Stavanger | Drammen | Bergen | Kristiansand | Other | Total |
Administrative & operating costs (including & excluding costs of direct vacancy) divided by gross rental income.
| All figures in NOK millions | Q4-16 | Q4-15 | 2016 | 2015 |
|---|---|---|---|---|
| Maintenance | -20 | -23 | -50 | -56 |
| Total operating costs | -31 | -38 | -109 | -129 |
| Administrative costs | -42 | -45 | -152 | -168 |
| Share of joint ventures expences | -1 | -1 | -5 | -5 |
| Less: Ground rent cost | 3 | 5 | 12 | 18 |
| EPRA Cost (including direct vacancy cost) | -92 | -103 | -304 | -341 |
| Direct vacancy cost | -13 | -16 | -38 | -49 |
| EPRA Cost (excluding direct vacancy cost) | -79 | -88 | -267 | -292 |
| Gross rental income less ground rent | 506 | 439 | 1 899 | 1 772 |
| Share of jount ventures and fund (GRI) | 3 | 3 | 10 | 10 |
| Total gross rental income less ground rent | 509 | 442 | 1 909 | 1 782 |
| EPRA cost ratio (including direct vacancy cost) | 18% | 23% | 16% | 19% |
| EPRA cost ratio (excluding direct vacancy cost) | 15% | 20% | 14% | 16% |
For further information about EPRA, go to www.epra.com.
| 12 months rolling rent | - 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. | |
| Cash Earnings | - Net income from property management less tax payable |
| Contractual rent | - Annual cash rental income being received as of relevant date |
| 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 including Entra OPF, divided by net |
| interest on interest-bearing nominal debt and fees and commitment fees related to investment activities | |
| Independent Appraisers | - Akershus Eiendom and Cushman and Wakefield Realkapital |
| 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 purchases and sales of properties and active projects | |
| Loan-to-value ("LTV") | - Net nominal value of interest-bearing liabilities divided by the market value of the property portfolio and the market value of the |
| jointly controlled entities Entra OPF Utvikling and Oslo City Kjøpesenter AS | |
| 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 portfolio | - The market value of all the 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 | |
| Net Income from property | - Net income from property management is calculated as Net Income less value changes, tax effects and other income and other cost |
| management | from 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 contracts. |
| 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 |
| Occupancy | - Estimated market rent of occupied space of the management properties, divided by the market rent of the total space of the |
| management portfolio. | |
| 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 |
| Total area | - Total area including the area of management properties, project properties and land / development properties |
| 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 | |
Arve Regland CEO Phone: + 47 479 07 700 [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]
| First quarter 2017 | 27.04.2017 |
|---|---|
| Second quarter 2017 | 12.07.2017 |
| Third quarter 2017 | 19.10.2017 |
| Fourth quarter 2017 | 09.02.2018 |
Head office Biskop Gunnerus gate 14b 0185 Oslo
Postal address Postboks 52, Økern 0508 Oslo
Tel: (+47) 21 60 51 00 Fax: (+47) 21 60 51 01 E-mail: [email protected]
Customer service centre E-mail: [email protected] Tel: (+47) 800 36 872
www.entra.no
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