Entra ASA · OSL:ENTRA
Entra ASA — Q1 2023 Earnings Presentation
24 slides from Entra ASA's earnings presentation, Apr 25, 2023
Slide 1: Q1 2023
Q1 2023 Oslo, 25 April 2023 Holtermanns veg 1-13, Trondheim
Slide 2: Agenda
Agenda Highlights in the quarter Operations and market Financial update Closing remarks Q&A 2
Slide 3: Highlights in the quarter
Highlights in the quarter Key figures: Key events in the quarter: • 12 % rental income growth • Net letting of 5 million Storgata 51, Oslo • Preparing for start of one newbuild project • Divestment of Grønland 32 in Drammen 3
Slide 4: Agenda
Agenda Highlights in the quarter Operations and market Financial update Closing remarks Q&A 4
Slide 5: Letting and occupancy
Letting and occupancy • New and renewed leases of 103 million (39,800 sqm) • Terminated contracts of 54 million • Net letting of 5 million • Occupancy at 96.0 % • WAULT at 6.1 years (6.3 years incl. project portfolio) • 57% of rental income from public sector tenants Largest new and renegotiated con
Slide 6: Preparing for start of newbuild project in Sandvika
Preparing for start of newbuild project in Sandvika − Newbuild project in Malmskriverveien 18 in Sandvika − 2,750 sqm − Fully let to Akademiet Realfagsgymnas on 25-year lease − Built on parking lot, on top of existing basement − Construction will commence in Q2-23, completion in Q3 2024 − BREEAM-NOR
Slide 7: Ongoing development portfolio progressing according to plan
Ongoing development portfolio progressing according to plan 1) Total project cost (including book value at date of investment decision/cost of land), excluding capitalized interest cost 2) Estimated net rent (fully let) at completion/total project cost (including cost of land) 3) Weighted average oc
Slide 8: Successful divestment of Grønland 32 in Drammen
Successful divestment of Grønland 32 in Drammen • Total transaction value 335 million • 18 % above book values as of 31.12.22 • Closed on 1 March 23, proceeds used to strengthen balance sheet 8
Slide 9: Entra portfolio well prepared for new EU legislation
Entra portfolio well prepared for new EU legislation • Proposal from European parliment that office buildings must be: − At least energy class E by 2027 − At least energy class D by 2030 Energy class distribution of Entra’s assets Distribution of properties with Energy Class E-G (% of market value)
Slide 10: Market development: Rent and vacancy
Market development Rent and vacancy Market rental growth and vacancy in Oslo • Resilient Norwegian economy, supported by strong government finances • More moderate expectations for rental growth in Oslo going forward after record strong growth in 2022 • Vacancies expected to remain low in Oslo • New
Slide 11: Positive post-pandemic office trends in Norway
Positive post-pandemic office trends in Norway • Study from Akershus Eiendom / JLL: − Hybrid office is here to stay, most employees in Norway are back in the office but expect higher level of flexibility − Activity at workplace around 10 % (0.5 day/week) below pre pandemic level in Norway, 20 % (1 d
Slide 12: Market development: Transactions and yields
Market development Transactions and yields Prime yield Oslo • Transaction activity at very low levels, total volume of around NOK 10 billion in Q1 23 • Financing market and interest rate uncertainty delays and halts transaction processes • Prime yields expected to top out around 4.2 % • Inflation an
Slide 13: Agenda
Agenda Highlights in the quarter Operations and market Financial update Closing remarks Q&A 13
Slide 14: Solid rental income growth; results impacted by higher financing costs
Solid rental income growth; results impacted by higher financing costs and negative value changes NOK million Rental income Net income from property Profit/loss before tax management 14
Slide 15: Key financials per share holding up well in today's market
Key financials per share holding up well in today's market NOK per share Cash Earnings1) EPRA NRV CAGR: 9 % CAGR: 12 % 1) Annualised, rolling four quarters 15
Slide 16: Profit and loss statement in line with expectations
Profit and loss statement in line with expectations NOK million • Revenues in line with expectations • Operating costs slightly higher primarily due to increased vacancy in the management portfolio • Administrative costs in line with expectations; pegging towards 210 million in 2023 • Financing cost
Slide 17: Stable rental income development expected
Stable rental income development expected* NOK million * Based on reported events. Does not constitute a forecast; aims to demonstrate the rental income development based on all reported events; does not reflect letting targets on either vacant areas or on contracts that will expire, and where the o
Slide 18: Property value development in the quarter
Property value development in the quarter NOK million 18
Slide 19: Financing position and activities in the quarter
Financing position and activities in the quarter Financing mix EPRA LTV* and ICR** Q1 activities and status • 3 bond tap-issues; total 1.0 billion on long tenors and improving terms • 5 commercial paper issues; total 1.2 billion at attractive terms • Total unutilised credit facilities of 7.3 billion
Slide 20: Expected interest rate development
Expected interest rate development Entra’s nominal interest rate, including credit margins • Effective interest rates 15 bps higher than nominal due to issuance of bonds below par value • 51 % of debt portfolio hedged at fixed rate • 4.6 years time to maturity of hedge portfolio (incl. fwd. start sw
Slide 21: Limited maturities of bonds and CP next 24 months
Limited maturities of bonds and CP next 24 months NOK million • 7.3 billion of unutilised credit facilities and 0.3 billion in cash as of 31.03.23 • 9.4 billion of debt maturing next 18 months − 3.0 billion in bonds and commercial paper − 6.4 billion in bank debt • 4.1 years average time to maturity
Slide 22: Agenda
Agenda Highlights in the quarter Operations and market Financial update Closing remarks Q&A 22
Slide 23: Closing remarks and outlook
Closing remarks and outlook • Resilient Norwegian economy, supported by strong government finances • Workplace activity back at more normalised levels • Demand for centrally located offices remain strong • Favourable rental market dynamics with low vacancies and limited new- build activity • Limited
Slide 24: Next event: 2nd quarter results 14 July 2023
Next event 2nd quarter results 14 July 2023 Kristian Augusts gate 13, 15 A-C, 17 and 21, Oslo For more information see www.entra.no/investor-relations