Selvaag Bolig ASA

Quarterly Report • Aug 18, 2021

Oslo, 18 August 2021

Sverre Molvik, CEO Christopher Brunvoll, CFO

Q2 2021

2

Agenda

Highlights

Operational update

Financial update

Market

Outlook and summary

Highlights Q2 2021

• · Solid Q2 results considering few deliveries
• · H1'21 sales value up 38% compared to H1'20
• · Increased number of units under construction
• · Expanded land bank in Stockholm, expected sales start in 2022
• · Dividend of NOK 2.00 per share* for H1'21

Completed, ongoing and upcoming projects

* Pay-out on 31 August, 2021

Key financials Q2 and H1 2021

17.0

EBITDA** margin (NGAAP)

Per cent

Adjusted EBITDA* margin

Per cent

* EBITDA is profit before interest, taxes, depreciation and amortization. EBITDA adjusted is excluding financial expenses included in project costs. ** EBITDA is operating profit before depreciation, gains (losses) and profit from associated companies.

Agenda

Highlights Operational update Financial update Market Outlook and summary

Operational news

	A leading provider of shared facility concepts •
Pluss concept	Early mover advantage •
providing	- Service and maintenance operated by in house subsidiary with 20 employees
competitive	- Built competence through continuous learning and	development processes
advantages	- High customer satisfaction
	Strong customer demand •
	Sought after concept among regulatory authorities •
	New land acquisition with sales start in 2022 •	Bergen 150 built
Successful	- 250 Pluss units	250 under development
entry in	- Located in transformation area Barkarbystaden	Stavanger
Stockholm	Total landbank growing •	300 built
via organic	- Barkarbystaden – 250 units
growth	- Årstadfältet – 140 units	Kristiansand 300 built
	- Slakthus area – 170 units	Spain 150 built

• Lövholmen - 50 units

Sales value and units sold

Note: Sales value is adjusted for Selvaag Bolig's share in joint ventures.

Units sold are sales contracts entered into with customers pursuant to the Norwegian Housing Construction Act. In accordance with the IFRS, they are recognised as income on delivery.

Rolling sales value and units sold

Note: Sales value is adjusted for Selvaag Bolig's share in joint ventures.

*Total columns show Selvaag Bolig's gross sales. **Columns excluding dotted areas show Selvaag Bolig's net sales.

Sales value 12-month rolling Units sold 12-month rolling

Units sold are sales contracts entered into with customers pursuant to the Norwegian Housing Construction Act. In accordance with the IFRS, they are recognised as income on delivery.

Construction starts and completions

Construction starts and completions per quarter

Units

Note: Number of units are adjusted for Selvaag Bolig's share in joint ventures.

Units under construction and completions

Sales value units under construction Expected completions per quarter

• · Q2 2021: 82% of units under construction sold by Q2 2021

• · Q2 2021: 87% of construction volume in Greater Oslo Area*

• · Expected completions for the full year 2021: 867 units

• · 94% of 2021 completions sold by Q2 2021

Note: Sales value and number of units are adjusted for Selvaag Bolig's share in joint ventures. * Includes: Oslo, Lørenskog, Follo, Tønsberg, Asker.

Agenda

Highlights Operational update Financial update Market Outlook and summary

Income statement highlights Q2 2021 (IFRS)

^* EBITDA is profit before interest, taxes, depreciation and amortization. EBITDA adjusted is excluding financial expenses included in project costs.

Q2 2021 proforma figures including proportionate share of JV

* EBITDA is profit before interest, taxes, depreciation and amortization. EBITDA adjusted is *Q1 2020 adjusted EBITDA margin of 26.0% excluding other gains of NOK 1 029m. excluding financial expenses included in project costs. The difference compared to reported EBITDA is due to interest, taxes, depreciation and amortization in JVs.

Operating revenues (IFRS)

H1 2021 proforma figures including proportionate share of JV

Operating revenues (IFRS)

* EBITDA is profit before interest, taxes, depreciation and amortization. EBITDA adjusted is * Excluding other gains of NOK 1 029m excluding financial expenses included in project costs. Excluding other gains of NOK 1 029m ** NOK 1.59 ex UP transaction

Income statement highlights Q2 2021 (NGAAP)

^* Construction costs are exclusive of financial expenses in the segment reporting (NGAAP). Note: EBITDA is operating profit before depreciation, gains (losses) and profit from associated companies.

Project margin development

* Construction costs are exclusive of financial expenses in the segment reporting (NGAAP).

** Project margins are exclusive of overhead costs.

NOK million

Cash flow development Q2 2021

NOK million

Note: Amounts < NOK -20m < NOK 20m are excluded from the cash flow overview.

• · Cash flow from operations negative at NOK 416m driven by increased inventories from ongoing production
• · Cash flow from investing activities positive at NOK 41m mainly due to proceeds from sale of share in JV
• · Cash flow from financing activities positive at NOK 256m mainly due to net increase in construction loans of NOK 538m, partly offset by dividend payments of NOK 280m

ASA

Balance sheet highlights Q2 2021

Balance sheet composition

Assets Equity and Liabilities

0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 Cash Non-current assets · Book value of equity NOK 24.3 per share - Equity ratio 35.7% · Changes from Q1 2021: - Inventories increased by NOK 509m - Trade and Other receivables decreased by NOK 51m - Cash decreased by NOK 118m · Prepayments from customers represent NOK 303m of other current non-interestbearing liabilities NOK million

Inventories (property) Q2 2021

Q2 21 vs Q1 21 Inventory value development

• · Land value up NOK 28m
• Mainly due to buy back of land from UP
• · Work in progress up NOK 560m
• Due to high ongoing production, construction starts, combined with limited completions
• · Finished goods down NOK 80m
• Due to delivery of previously completed units

NOK million

Debt structure

		Drawn at 30.6.21	Interest rate
	Loan facility	(NOKm)	margin*
1	Construction loan facilities from a range of Nordic credit institutions	2 012	1.75% - 2.60%
2	Land loans Urban Property**	739	3.75%***
3	Land loan facilities from a range of Nordic credit institutions	250	2.00% - 2.50%
4	NOK 150 million revolving credit facility from DNB maturing in 2023	0	2.90% - 3.40%
5	NOK 150 million working capital facility from DNB with annual renewal	0	2.10%
6	NOK 300 million infrastructure facility maturing in 2024	0	2.70%

Total Q2 2021 net interest-bearing debt NOK 2 421 million Total Q1 2021 net interest-bearing debt NOK 1 746 million

Interest-bearing debt at 30.6.21

Land loans Urban Property* Land loan Construction loan

NOK million

* Margin to 3m NIBOR.

** Repurchase agreements portfolio B.

*** + 2.00% fee at property repurchase.

* Repurchase agreements portfolio B.

Earnings and dividend per share since IPO

2.95 1.75 2.70 3.00 3.21 4.35 6.14 7.04 5.31 1.42 0.00 0.50 1.20 1.50 1.60 3.00 4.50 3.50 6.00 2.00 H2'12 2013 2014 2015 2016 2017 2018 2019 2020* H1'21 Earnings per share Dividend per share 2.95 4.70 7.40 10.40 0.00 0.50 1.70 3.20 Earnings per share Dividend per share

Accumulated dividend and earnings per share

* EPS of NOK 11.02 and DPS of NOK 22 from UP transaction included from 2020.

Annual dividend and earnings per share

* Excluding earnings and dividend from UP transaction.

Dividend policy: DPS of minimum 60 per cent of net annual profit. No equity ratio minimum.

Return on equity (IFRS)

610 530 495 471 479 25% 20% 17% 15% 19% 20%

12-month rolling net income (NOKm) ROE (%)

* Net income attributable to shareholders in Selvaag Bolig ASA.

** Based on equity at the start of the period (attributed to shareholders in Selvaag Bolig ASA).

Q1 2020 Net income excluding Other gains of NOK 1 029m

Agenda

Highlights Operational update Financial update Market Outlook and summary

Estimated completions in Oslo well below forecasted need

Sources: Historic data: Statistics Norway (SSB), Forecasted housing completions: SA – Econ Nye Boliger, Forecasted housing need: Prognosesenteret. Note: Number of persons per household in Oslo: 1.90.

Note: Housing demand calculated on parameters such as number of persons per household, lag on housing development, housing demolition. Note: Completions exclusive of student- and senior housing.

* Estimates based on actual start and time of construction.

** Uncertainty due to project lead-time. Expected to increase as new projects come to market through 2021/2022.

Estimated completions in Viken ex Buskerud & Østfold

Sources: Historic data: Statistics Norway (SSB), Forecasted housing completions: SA – Econ Nye Boliger, Forecasted housing need: Prognosesenteret. Note: Number of persons per household in Oslo: 1.90.

Note: Housing demand calculated on parameters such as number of persons per household, lag on housing development, housing demolition. Note: Completions exclusive of student- and senior housing.

* Estimates based on actual start and time of construction.

** Uncertainty due to project lead-time. Expected to increase as new projects come to market through 2021/2022.

Share of newbuild and population growth by region

Share of newbuild and population growth by region

Source: Statistics Norway, Samfunnsøkonomisk Analyse

Newbuild market update

Source: SA - ECON Nye Boliger.

* Adjusted for temporary withdrawals or cancellations during the period.

Newbuild market update

* Adjusted for temporary withdrawals or cancellations during the period.

Source: SA - ECON Nye Boliger.

Oslo second-hand market update

Source: Eiendomsverdi.

Bergen second-hand market update

Source: Eiendomsverdi.

Trondheim second-hand market update

Source: Eiendomsverdi.

Stavanger-area* second-hand market update

Source: Eiendomsverdi.

* Includes Stavanger, Sola, Sandnes, Randaberg.

Trondheim

Stavanger area**

• YTD increase of 8.8% = NOK 4 800 per sqm*** • YTD increase of 7.8 % = NOK 3 100 per sqm***

• YTD increase of 3.1% = NOK 2 700 per sqm*** • YTD increase of 9.5% = NOK 5 200 per sqm***

Regional price* development 1.1-31.7, 2012-21

Source: Eiendom Norge.

• * Nominal price change.
• ** Includes Stavanger, Sola, Sandnes, Randaberg.

*** Based on average price per sqm per 31 July 2021

7.8%

8.8% 8.0%

Bergen

Agenda

Highlights Operational update Financial update Market Outlook and summary

Outlook

• · Normalized market sentiment
• · Attractive projects for sale in all the markets where we operate
• · Possible sales starts in H2
  • · Sinsenveien in Oslo (total 350 units JV)
  • · Ringve Pluss in Trondheim (total 600 units)
  • · New phases in ongoing projects in all regions
• · Targeting new areas for future growth

• · Sales start in Stockholm in 2022

• · Solid Q2 results considering few deliveries

• · H1'21 sales value up 38% compared to H1'20
• · Increased number of units under construction
• · Expanded land bank in Stockholm, expected sales start in 2022
• · Dividend of NOK 2.00 per share* for H1'21

Summary

* Pay-out on August 31, 2021

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Return on equity (IFRS)

^* Net income attributable to shareholders in Selvaag Bolig ASA.

12-month rolling net income (NOKm) ROE (%)

** Based on equity at the start of the period (attributed to shareholders in Selvaag Bolig ASA).

12-month rolling net income (NOKm) ROE (%)

Q1 2020 Net income excluding Other gains of NOK 1 029m Q1 2020 Net income including Other gains of NOK 1 029m

Earnings and dividend per share since IPO

Accumulated dividend and earnings per share

* Includes EPS of NOK 11.02 and DPS of NOK 22 from UP transaction.

Annual dividend and earnings per share

* Excluding earnings and dividend from UP transaction.

Revised dividend policy:

Selvaag Bolig's ambition is to pay high and stable dividends to its owners.

The company aims to pay dividends of minimum 60 per cent of net annual profit, paid in two instalments over the year. However, the size of the dividend will be weighed against the company's liquidity forecasts and capital adequacy.

Old dividend policy:

Selvaag Bolig's ambition is to pay high and stable dividends to its owners.

The company aims to pay dividends of minimum 40 per cent of net annual profit, paid in two instalments over the year. However, the size of the dividend will be weighed against the company's liquidity forecasts and capital adequacy.

The company will maintain an equity ratio of minimum 30 per cent.

Dividend policy

Share performance since IPO in June 2012

Source: Oslo Børs.

			2.00

Share information

• · Number of shareholders: 4 665 (4 361)*
• 20 largest controlling 80.2% (80.1)
• Selvaag AS largest shareholder 53.5%
• · Trading
• 4.7 million shares during the quarter (4.6)
• Share turnover totaled NOK 288 million (279)

^* All numbers in brackets from previous quarter.

Largest shareholders at 30.6, 2021

* Further information regarding shareholders is presented at: http://sboasa.no/en.

Shareholder	# of shares	% share
SELVAAG AS	50 180 087	53.5%
Skandinaviska Enskilda Banken AB *	7 204 973	7.7%
VERDIPAPIRFONDET ALFRED BERG GAMBA	3 117 700	3.3%
PARETO INVEST AS	2 965 309	3.2%
JPMorgan Chase Bank, N.A., London *	1 960 535	2.1%
State Street Bank and Trust Comp *	1 181 749	1.3%
Morgan Stanley & Co. Int. Plc. *	1 008 976	1.1%
Skandinaviska Enskilda Banken AB *	800 000	0.9%
MUSTAD INDUSTRIER AS	770 000	0.8%
Landkreditt Utbytte	700 000	0.7%
SANDEN AS	635 000	0.7%
BANAN II AS	600 000	0.6%
VERDIPAPIRFONDET EIKA SPAR	578 441	0.6%
SPARHANS AS	550 000	0.6%
J.P. Morgan Bank Luxembourg S.A. *	537 165	0.6%
Brown Brothers Harriman & Co. *	520 667	0.6%
Brown Brothers Harriman & Co. *	502 866	0.5%
Skandinaviska Enskilda Banken AB *	478 922	0.5%
Morgan Stanley & Co. International *	452 154	0.5%
VERDIPAPIRFONDET EIKA NORGE	437 374	0.5%
Total 20 largest shareholders	75 181 918	80.2%
Other shareholders	18 583 770	19.8%
Total number of shares	93 765 688	100.0%

• · Nearly 60 000 homes over the last 70 years
• · Housing for all
• · Focus on fast growing urban regions
• · Large projects with more than 150 units

Addressing the long term housing need

Positioned to realize large projects in Norway's four largest growing urban areas

• Acquire the right mix of zoned and un-zoned land in suitable locations
• Land acquisitions in defined core areas in co-operation with Urban Property
• High degree of site utilization and strategic land development
• Substantial land bank to accommodate targets/growth in core areas
• Good infrastructure and public transport
• Joint ventures (JVs)

Land bank exposure

Trondheim 460 units

Geographical spread

Stockholm 610 units

Greater-Oslo 8 825 units

Stavanger 746 units

Bergen 787 units

Land-bank strategy

Note: The numbers represent the size of the land portfolio as at 30 June 2021. All numbers are adjusted for Selvaag Bolig's share in joint ventures. 1) Greater Oslo area: Oslo, Akershus, Buskerud, Vestfold and Østfold, 2) The residential property development portfolio consists of land plots that are to be paid for when planning permission is received. The portfolio has a development potential of ~5 900 residential units.

Change in needs calls for new concepts

Selvaag Pluss

• Lifestyle concept
• Attractive common areas
• Professional hosting services
• Service offerings and good neighbourliness, make every day living easier
• Guestrooms for family and friends
• Work-out- and fitness centre

Selvaag City

• Urban lifestyle concept with compact apartments
• Attractive common areas
• Professional hosting services
• Guestrooms for family and friends
• Work-out- and fitness centre

• Service offerings and good neighbourliness, make every day living easier

Upcoming projects 2022 to 2024

Fornebu | Greater Oslo

• · ~ 2 000 units total (50/50 JV)
• · ~ 500 Pluss units
• · Expected sales start: 2024

Bjerke | Oslo

• · ~ 1 200 units total
• · ~ 300 Pluss units
• · Expected sales start: 2024

Lørenskog stasjonsby | Greater Oslo

• · ~ 1 500 units total
• · ~ 250 Pluss units
• · ~ 850 units remaining for sale

Skårerbyen | Greater Oslo

• · ~ 1 100 units total
• · ~ 250 Pluss units
• · ~ 750 units remaining for sale

Upcoming large regional projects

Fredrikstad | Greater Oslo

• · ~ 1 500 units
• · ~ 400 Pluss units
• · Expected sales start: 2022/23

RingvePluss | Trondheim

• · ~ 600 units total
• · ~ 400 Pluss units

• · Expected sales start: 2021/22

• · ~ 600 units total

• · ~ 250 Pluss units
• · Expected sales start: 2023
• On 10 May, SBO had approximately 410 units for sale in Norway
• Planning for sale start of additional 415 units through Q3 2021

Sandsli | Bergen

• · ~ 600 units total
• · ~ 250 Pluss units
• · Sales start H2 2020

Land bank acquisitions

• Land bank replacement secure long-term growth
• Persistent presence in established areas in Norway
• Increasing exposure in new growth area

Lilleakerveien 47 Oslo	Årstadfältet Stockholm	Slakthus area Stockholm
· Western part of Oslo	· Söderort transformation district	· Söderort transformation district
· Up to 150 units	· 120 units	· 150 units

Barkabystaden Stockholm

• · Söderort transformation district
• · 250 units Plus

Land bank in Oslo and Greater Oslo at 30.6.21

Lørenskog 1 976 units Lørenskog Stasjonsby 625 units Skårer bolig 746 units LSV 300 units

1 976 units

Oslo South 315 units Gjertsrud Stensrud 315 units

Follo/Østfold 1 402 units Langhus 161 units Solberg 83 units Ski 88 units Grenseveien 340 units Fredrikstad 730 units

Lillestrøm

Bjerke 1 025 units

Land bank in Stavanger area at 30.6.21

*The numbers are adjusted for Selvaag Bolig's share in joint ventures.

Land bank in Bergen, Trondheim and Stockholm at 30.6.21

*The numbers are adjusted for Selvaag Bolig's share in joint ventures.

Cooperation with Urban Property from 1.1.2021

• How it works:
• Urban Property has a right of first refusal (ROFR) to purchase all new land Selvaag Bolig wants to develop
• Urban Property acquires land on Selvaag Bolig recommendations
• Selvaag Bolig has an option to repurchase the land in stages

• Fee structure:

  • 2.5% transaction fee
  • Annual option premium of NIBOR +375bp

• Eliminates need for equity when purchasing land, as SBO pay 50% of purchasing price at construction start and 50%

• Benefits for Selvaag Bolig:

• at project completion
• Increases return on equity
• Allows for a higher dividend payout ratio

• land plots

• (break fee)

• More efficient and predictable funding of existing and new

• Increases competitiveness when making land purchases - Down-side risk for SBO limited to 48 months option premium

Selvaag Bolig sold most of its land bank to Urban Property in January 2020, entering a long-term and strategic partnership. Urban Property is a financially sound, well capitalized and predictable partner.

Reduced capital binding in practice, in effect no equity needed in Selvaag Bolig for land

Residential development value chain: cooperation between Selvaag Bolig and Urban Property

Substantial portfolio for development

Total land bank portfolio at 30.6.2021

Units

Valuation of remaining land bank*

1 491

^* Part of SBO land bank not included in the UP transaction.

(Nov 2020)

NOK million

Value of units sold - gross and net

Sales value of units sold

1 431

NOK million

Number of units sold - gross and net

Number of units sold

Units

Income statement IFRS

Income statement IFRS
(figures in NOK million)	Q2 2021	Q2 2020	1H 2021	1H 2020	2020
Total operating revenues	394.2	435.5	962.0	644.6	2 698.0
Project expenses	(304.8)	(336.8)	(706.0)	(470.7)	(1 967.6)
Other operating expenses	(49.9)	(62.6)	(104.6)	(114.3)	(256.8)
Associated companies and joint ventures	39.4	25.9	45.4	112.5	135.0
EBITDA	78.914	61.970	196.779	172.220	608.481
Depreciation and amortisation	(2.6)	(2.4)	(5.1)	(4.9)	(9.8)
Other gains (loss)	-	-	-	1 028.7	1 045.1
EBIT	76.3	59.6	191.6	1 196.0	1 643.8
Net financial expenses	(2.3)	(1.0)	(6.3)	(1.0)	9.7
Profit/(loss) before taxes	74.0	58.6	185.3	1 195.1	1 653.5
Income taxes	(17.6)	(10.3)	(52.2)	(17.8)	(129.9)
Net income	56.4	48.3	133.1	1 177.3	1 523.6

Balance sheet

(figures in NOK million)	Q2 2021	Q1 2021	Q2 2020	2020
Intangible assets	383.4	383.4	383.4	383.4
Property, plant and equipment	6.8	7.1	5.4	7.3
Investments in associated companies and joint ventures	438.6	407.9	378.8	406.9
Other non-current assets	237.8	255.9	254.3	228.1
Total non-current assets	1 066.6	1 054.3	1 021.9	1 025.7
Inventories (property)	4 681.1	4 172.4	4 276.8	3 940.8
- Land	1 036.2	1 008.0	1 088.3	909.3
- Land held for sale
- Work in progress	3 542.6	2 982.5	3 077.8	2 911.0
- Finished goods	102.3	182.0	110.7	120.5
Other current receivables	86.9	137.9	104.7	119.0
Cash and cash equivalents	580.2	697.9	678.8	885.3
Assets held for sale	-	-	-	-
Total current assets	5 348.2	5 008.3	5 060.2	4 945.1
TOTAL ASSETS	6 414.8	6 062.6	6 082.1	5 970.8
Equity attributed to shareholders in Selvaag Bolig ASA*	2 280.6	2 502.1	2 363.6	2 430.0
Non-controlling interests	7.8	7.8	7.9	7.8
Total equity	2 288.3	2 509.9	2 371.4	2 437.8
Non-current interest-bearing liabilities	1 481.8	1 074.8	1 635.8	1 100.3
Other non-current non interest-bearing liabilities	292.8	279.7	149.5	136.5
Total non-current liabilities	1 774.6	1 354.5	1 785.4	1 236.8
Current interest-bearing liabilities	1 519.1	1 368.9	1 010.6	1 368.1
Other current non interest-bearing liabilities	832.8	829.2	914.6	928.1
Total current liabilities	2 351.9	2 198.2	1 925.3	2 296.2
TOTAL EQUITY AND LIABILITIES	6 414.8	6 062.6	6 082.1	5 970.8

* Corresponding to a book value of NOK per share 24.32

Cash flow statement

(figures in NOK million)	1H 2021	1H 2020	2020
Net cash flow from operating activities	(503.0)	959.6	1 615.7
Net cash flow from investment activities	35.7	377.5	413.8
Net cash flow from financing activities	162.1		(1 837.0) (2 322.9)
Net change in cash and cash equivalents	(305.2)	(499.9)	(293.4)
Cash and cash equivalents at start of period	885.3	1 178.7	1 178.7
Cash and cash equivalents at end of period	580.2	678.8	885.3

Operational highlights – key operating figures

	Q2 20	Q3 20	Q4 20	Q1 21	Q2 21
Units sold	142	178	199	248	173
Construction starts	3 1	196	254	134	142
Units completed	104	212	286	9 5	120
Units delivered	122	212	272	124	132
Units under construction	1 357	1 342	1 310	1 349	1 371
Proportion of sold units under construction	78 %	77 %	74 %	82 %	82 %
Completed unsold units	2 5	1 9	1 9	1 7	1 5
Sales value of units under construction (NOK million)	6 327	6 660	6 413	6 627	6 749
Number of employees	8 7	8 5	8 5	8 5	8 5

EBITDA Q2 2021

Note: EBITDA is operating profit before depreciation, gains (losses) and profit from associated companies.

	Property
(figures in NOK million)	development	Other	Total
Operating revenues	868.5	12.6	881.1
Project expenses	(680.0)	(0.1)	(680.1)
Other operating expenses	(12.4)	(40.1)	(52.4)
EBITDA (percentage of completion)	176.2	(27.6)	148.5
Note: Construction costs are exclusive of financial expenses in the segment reporting.
IFRS EBITDA for the quarter, per segment
Operating revenues	381.6	12.6	394.2
Project expenses	(304.7)	(0.1)	(304.8)
Other operating expenses	(12.4)	(37.5)	(49.9)
Share of income (losses) from associated companies
and joint ventures Other gain (loss), net	39.4 -	-	39.4
EBITDA	104.0	(25.1)	78.9
Units in production	1 371	N/A	N/A
Units delivered	132	N/A	N/A

Norwegian housing market

· Low risk for housebuilders

• · Advance sales: banks require that 50-70% of homes are sold before construction starts
• · Binding offers: offer to purchase is a binding sales contract, and requires a minimum 10% cash deposit
• · High level of home ownership
• · 85% (one of the world's highest)
• · Economic benefits for home owners
• · 23% of mortgage loan interest payments are tax deductible
• · Transfer stamp duty for new houses is lower than for second-hand homes
• · Strong population growth
• · Norway's urban areas are among the fastest growing in Europe
• · Good market for new homes

Source: Selvaag Bolig and Eurostat.

Regional price* development July, 2010-21

Source: Eiendom Norge.

* Nominal price change.

** Includes Stavanger, Sola, Sandnes, Randaberg.

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Trondheim

0.1% 0.5% 1.1% -3.4% -0.9% -2.5% -1.8% 0.9% -1.6% -1.6% 0.9% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Stavanger area**

Total household debt and homeownership

Source: OECD, Statista.

Shift in demographics trigger new housing needs

Source: Statistics Norway, Samfunnsøkonomisk Analyse

* Estimated annual growth for the 2020-25 period.

** Number of persons per household in Norway.

Share of small & single households Share of newbuild and population growth by region

Price development Norway and selected regions (2005-21)

Price development (rebased 1.1.2005)

Source: Eiendomsverdi.

* Stavanger area includes: Randaberg, Sandnes, Sola, Stavanger.

Increasing share of population growth in Oslo and Akershus

Share of total population in Oslo and Akershus Share of total population growth in Oslo and Akershus

Source: Statistics Norway.

Homeownership rate among immigrants in Norway (per year living in Norway)

Immigration increases demand over time

of years in Norway

Source: Statistics Norway.

Norway – relatively limited volatility

Population growth 2020 - 2030e and 2040e Interest rates* 2013 - 2022e

Source: Bloomberg, UN.

GDP growth 2013 - 2023e Unemployment 2013 - 2023e -10% -5% 0% 5% 10% 2013 2014 2015 2016 2017 2018 2019 2020 2021e 2022e 2023e Norway Sweden Denmark Germany UK

* Central bank rates

Norway – moving back to normal in through 2021

Wages & disposable income 2019 – 2024e Prices & interest rates 2019 – 2024e

Source: Monetary Policy Report 1|21, Central Bank of Norway.

Example project calculations before and after

Example apply a land ownership period in Urban Property of 3-4 years, and a finance cost of 4% on all capital employed in the project.

	1	PROJECT CALCULATIONS 2		PROJECT CALCULATIONS
	BEFORE URBAN PROPERTY			AFTER URBAN PROPERTY
Figures for illustration purposes only	MNOK	%	MNOK	%
Sales revenue	348.5	100.0%	348.5	100.0%
Construction cost	195.8	56.2%	195.8	56.2%
Land cost	69.7	20.0%	85.2	24.4%
Other costs	24.5	7.0%	24.5	7.0%
Project cost	290.0	83.2%	305.5	87.7%
Net finance (excluding Urban Property)	16.8	4.8%	5.3	1.5%
TOTAL REVENUE	348.5	100.0%	348.5	100.0%
TOTAL COST	306.8	88.0%	310.9	89.2%
PROFIT	41.7	12.0 %	37.7	10.8%
Internal rate of return (IRR)		12.2%		28.0%

1

2

• Initial project margin and IRR before Urban Property when purchasing land at market value
• Initial project margin and IRR with Urban Property as partner when purchasing land at market value (including option premium)

In total marginal lower project margins, but significantly increased IRR and RoE

Margin development through project stages*

^* Assuming flat market development.