Citycon Oyj · OMXHEX:CTY1S
Citycon Oyj — Corporate Update (September 2015)
36 slides from Citycon Oyj's corporate update, Sep 22, 2015
Slide 1: Citycon Norwegian Asset Tour 22.09
CITYCON NORWEGIAN ASSET TOUR 22.09 Brief market update by Pangea Property Partners STOCKHOLM | OSLO STRICTLY CONFIDENTIAL
Slide 2: Contents
CONTENTS 1 Economic outlook 3 2 Property market 20 3 Retail market 27 2 STRICTLY CONFIDENTIAL
Slide 3: Introduction - General information
INTRODUCTION - General information GENERAL INFORMATION GEOGRAPHICAL OVERVIEW Population/work force 5.2 million / 2.7 million Area 385,178 (km2) / 148,718 (mi2) Capital of Norway Oslo Tromsø GDP (2014) - Total USD ~500bn - GDP per capita USD ~95,000 Government Unitary parliamentary constitutional mon
Slide 4: Norwegian Economic Outlook
NORWEGIAN ECONOMIC OUTLOOK - Consumption remaining steady, GDP growth picks up by 2017 and unemployment no higher than 4.6 % Real economy (growth in %) 2014 2015E 2016E 2017E 2018E Labour market and prices (%) 2014 2015E 2016E 2017E 2018E Gross domestic product 2.2 1.4 1.2 2.2 2.0 Unemployment 3.5 4
Slide 5: Norwegian Demographics
NORWEGIAN DEMOGRAPHICS - Strong population growth mainly driven by net migration COMMENTS FORECASTED POPULATION GROWTH, EUROPE (2015-2020F) >4 % 2-4 % • Norway has among the strongest population growth in Europe driven by: 0-2 % • Positive net births (increasing birth ratio, aging population) <0 % •
Slide 6: Norwegian Demographics (Cont'd)
NORWEGIAN DEMOGRAPHICS (CONT’D) - Oslo driving the population growth in Norway GENERAL TRENDS POPULATION GROWTH NORWAY (2015-2020F) • Norway is experiencing steady population growth going forward, with Above 6 % Tromsø an annual growth rate of ~1.1 % until 2020 3.5-6 % • Immigrants account for a lar
Slide 7: Gross Domestic Product
GROSS DOMESTIC PRODUCT - Oil and gas exports provide a GDP per capita above European average NORDICS IN EUROPEAN CONTEXT GDP PER CAPITA IN EUROPE (2014) NORDIC GDP 2014 – US ~1,700bn (13 % of Europe) >$80K Finland $40K-$80K 16% $20K-$40K Sweden $10K-$20K 9 34% $10K> Denmark 20% 10 Top ten countries
Slide 8: Consumption Growth
CONSUMPTION GROWTH - Strong consumption growth in Norway in the coming years 6,0 % CPI growth Real private consumption growth Nominal consumption growth ~4.7 % annually next four years 5,0 % 4,0 % 1,8 % 2,6 % 3,0 % 2,7 % 3,0 % 2,0 % 2,0 % 2,9 % 1,0 % 2,0 % 2,1 % 2,0 % 1,8 % 0,0 % 2014 2015E 2016E 20
Slide 9: Petroleum Fund, Imports and Exports
PETROLEUM FUND, IMPORTS AND EXPORTS - Gas and petroleum exports provides Norway with one of the largest sovereign wealth funds in the world THE GOVERNMENT PENSION FUND GLOBAL (GPFG) NOKbn STRUCTURAL NON-OIL DEFICIT AND 4 PERCENT OF THE GPFG (2004-2018E)* 350 The Government Pension Fund Global (GPFG)
Slide 10: Interest Rates
INTEREST RATES - Norwegian interest rates are historically low, but still a large spread to the rest of the Nordics INTEREST RATE TERM STRUCTURE – NORDICS MAIN INTEREST RATES IN NORWAY (2010-2015) 2,5 % 5,0% 4,5% Although Norwegian interest rates are low there 2,0 % is still a large spread to Sweden
Slide 11: Historical FX Rates
HISTORICAL FX RATES - Norwegian and Swedish krone vs Euro last 10 yrs IMPLICATIONS FOR SEKTOR ACQUISITION 130 NOK/EUR = 9.95 EUR/NOK PROS 125 EUR/SEK • A weaker krone results in imported inflation – NOK/EUR = Norway has among the highest inflation rates in 120 9.23 Europe (2016-prognosis at 2.9 %) •
Slide 12: FX Forecast from DNB Markets
FX FORECAST FROM DNB MARKETS - NOK was recently revised down, but with expectations of gradual improvement going forward FROM DNB MARKET’S LATEST FX REPORT IN AUGUST: • Our NOK score is revised down from - 0.33 to -0.83 this month. • The score indicates a negative view on the NOK going forward. • We
Slide 13: Historical Oil Price Development (Brent)
HISTORICAL OIL PRICE DEVELOPMENT (BRENT) - Oil prices highly volatile to geopolitical events, especially in the Middle East 150 2008: Financial crisis of 2008 2014: Increasing supply from the US, 140 no action from OPEC and slowdown in Europe causes oil prices to drop 130 120 2003-2008: Several reas
Slide 14: Petroleum Sector Employment
PETROLEUM SECTOR EMPLOYMENT - Petroleum sector employment account for about 8-9 % of the Norwegian work force EMPLOYMENT IN THE PETROLEUM SECTOR • Since the oil price started dropping in the Summer of 2014, Norway has experienced increasing unemployment growth, although from a very low level of arou
Slide 15: Norwegian Continental Shelf
NORWEGIAN CONTINENTAL SHELF - Drop in oil price has limited effect on production next five years 10 MOST-PRODUCING OIL FIELDS IN NORWAY (2014) HISTORICAL AND EXPECTED PRODUCTION IN NORWAY (1980-2019E) Million TROLL 37,6 Sm3 oe 300 Production to remain ORMEN LANGE 21,6 Gas steady next 5 years NGL ÅSG
Slide 16: Norwegian Continental Shelf (Cont'd)
NORWEGIAN CONTINENTAL SHELF (CONT’D) - Expected production based on resource categories HISTORICAL AND EXPECTED PRODUCTION OF OIL AND GAS IN NORWAY, DIVIDED BY RESOURCE CATEGORY (2010-2030) Million Sm3 oe 250 200 150 100 50 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Slide 17: Break-even for Developing or Expected Oil Fields
BREAK-EVEN FOR DEVELOPING OR EXPECTED OIL FIELDS - 80 % of development in the North Sea will be profitable with an oil price between 40-60 dollars / barrel BREAK-EVEN OIL PRICE AND TOTAL RESOURCES* CURRENTLY DEVELOPING OR EXPECTED DEVELOPED OIL AND GAS FIELDS IN NORTH SEA Planned Resources Break-eve
Slide 18: Norwegian Equities vs Oil Prices
NORWEGIAN EQUITIES VS OIL PRICES - Oslo Stock Exchange fairly unaffected by drop in oil prices The development in oil prices and Oslo Stock Exchange last two years (indexed) A worldwide drop in the stock market, mainly due to 140 uncertainty regarding China 120 - 6.6 % 100 80 - 55 % 60 40 Oslo Excha
Slide 19: Contents
CONTENTS 1 Economic outlook 3 2 Property market 20 3 Retail market 27 19 STRICTLY CONFIDENTIAL
Slide 20: Nordic Transaction Market
NORDIC TRANSACTION MARKET - Strong first half of 2015 across the Nordics – Norway increased volume by ~150 % from H1 2014 NORDIC TRANSACTION MARKET SNAPSHOT (H1 2015) TRANSACTION VOLUME (2004-H1 2015) 40 The Nordic 35 ~400 deals EURbn property market ~EUR 16.9bn 30 Forecast H1 2015 25 20 15 10 • 204
Slide 21: Nordic Transaction Market
NORDIC TRANSACTION MARKET - One of the most liquid regions in Europe TRANSACTION VOLUMES 2014 TRANSACTION VOLUMES 2013 LARGEST EUROPEAN PROPERTY MARKETS (2014) # Country EURbn # Country EURbn >10 EURbn 1 UK 79.3 1 UK 65.0 5-10 EURbn 2 Germany 40.0 2 Germany 30.6 3-5 EURbn 3 France 23.8 3 France 15.1
Slide 22: Cross-Border Investments
CROSS-BORDER INVESTMENTS - Large interest in the Nordics among international investors LAST 12M SWEDEN NORWAY FINLAND DENMARK International International International buyers International buyers buyers buyers 23% 28% 35% 46% CROSS-BORDER DEALS Domestic Domestic Domestic buyers buyers Domestic buyer
Slide 23: Norwegian Transaction Market
NORWEGIAN TRANSACTION MARKET Fund liquidations and M&A activity boosts transaction levels for 2015 MARKET COMMENTS TRANSACTION VOLUMES LARGEST TRANSACTIONS (2014-H12015) Monthly volume (NOKbn) Transactions 16 Transaction NOKbn Seller Buyer • ~80 transactions totaling NOK ~60bn in H1 2015 2014 2015 1
Slide 24: Transaction Market Breakdown
TRANSACTION MARKET BREAKDOWN - Which markets and sectors are most popular? SEGMENT BREAKDOWN (2011-H1 2015) GEOGRAPHICAL BREAKDOWN (2011-H1 2015)* 2011 2012 2013 2014 H1 2015 2011 2012 2013 2014 H1 2015 100 % 100 % 6% 11% 16% 90 % 18% 90 % 24% 29% 36% 36% 35% 80 % 80 % 7% 41% 12% 1% 41% 70 % 28% 70
Slide 25: International Investors Very Active in Norway
INTERNATIONAL INVESTORS VERY ACTIVE IN NORWAY Close to NOK 50bn of capital from international investors during the last 24 months MARKET COMMENTS ACQUISITIONS MADE BY INTERNATIONAL INVESTORS LAST 24M # Estiamted value Company Country Investments made last 24M • During the last two years, internation
Slide 26: Contents
CONTENTS 1 Economic outlook 3 2 Property market 20 3 Retail market 27 26 STRICTLY CONFIDENTIAL
Slide 27: Norwegian Shopping Center Market
NORWEGIAN SHOPPING CENTER MARKET - Introductory comments NORWEGIAN SHOPPING CENTER MARKET • The total shopping center stock in Norway (excl. centers below 5,000 sqm in retail area) was 292 centers totaling some 4.6 million sqm of retail premises in 2014 • Sektor’s portfolio* close to 9 % of total re
Slide 28: Regulation of Shopping Center Supply
REGULATION OF SHOPPING CENTER SUPPLY - Regulations to reduce development of new shopping centers “SHOPPING CENTER STOP” • In 1990, the Norwegian government introduced regulations aimed at strengthening local communities and cities by reducing the amount of new retail establishments outside urban are
Slide 29: Supply and Demand
SUPPLY AND DEMAND - Regulations for new development and strong household economy supports a positive demand gap SHOPPING CENTER SUPPLY RETAIL DEMAND • Construction of shopping center premises has seen a drop since 2013 of close to 40 %. • Both retail and private consumption has had a stable growth o
Slide 30: Shopping Center Owners
SHOPPING CENTER OWNERS - Highly consolidated ownership in the larger urban areas of Norway TOP INDUSTRIAL PLAYERS No of Turnover 2014 • Olav Thon and AMFI is, combined, by far the largest owner and operator of shopping Company Main shareholder shopping (NOKbn) centers* centers in Norway. Olav Thon /
Slide 31: Shopping Center Universe
SHOPPING CENTER UNIVERSE - An analysis of the 235 largest shopping centers in Norway NUMBER OF SHOPPING CENTER AND RESPECTIVE TURNOVER GROWTH, DIVIDED BY TURNOVER CATEGORY 60 5,0 % SEKTOR’S PORTFOLIO SPHERE 4,5 % 50 53 4,0 % 48 3,5 % No. of shopping centers 40 40 3,0 % 36 30 2,5 % 2,0 % 20 1,5 % 19
Slide 32: Turnover Development in 2015 (Cont'd)
TURNOVER DEVELOPMENT IN 2015 (CONT’D) - An analysis of the 235 largest shopping centers in Norway TURNOVER DEVELOPMENT IN 2015 Turnover between Jan-Aug in 2015 vs 2014 Above 2.5 % Tromsø • Total growth in turnover so far in 2015 has been 5.7 % 0-2.5 % • Adjusting for changes in supply brings it to 2
Slide 33: Retail Transaction Market
RETAIL TRANSACTION MARKET Higher development the last twelve months TRENDS AND DEVELOPMENT TRANSACTION MARKET THE LAST 12 MONTHS, MEASURED BY INVESTOR TYPE Divestment Investment • Total transaction volume for retail property during the last 12 months amounts to Property companies NOK 24bn. The major
Slide 34: Closing Remarks
CLOSING REMARKS - Broad outlook going forward • Private consumption – stable and growing, supported by low unemployment, wage- and productivity growth and healthy state finances • Focus on content and convenience – increased emphasis on asset management and development skills • E-commerce; partly co
Slide 35: Contact Information
CONTACT INFORMATION Bård Bjølgerud Håvard A. Nustad - Independent Nordic corporate CEO & Partner Director & Partner finance and advisory firm focusing on the property sector Mob: +47 48 40 80 80 Mob: +47 48 40 80 77 [email protected] [email protected] Erik Høvik Espen Ugland Haugen Director &
Slide 36: Pangea Property Partners Stockholm and Oslo
PANGEA PROPERTY PARTNERS STOCKHOLM PANGEA PROPERTY PARTNERS OSLO Postal address: Box 7740, 103 95 Stockholm, SWEDEN Visiting and postal address: Visiting address: Norrlandsgatan 15, 7th floor Tjuvholmen Allé 3, 8th floor, N-0250 Oslo NORWAY Website: www.pangeapartners.se Website: www.pangeapartners.