Aurora Eiendom : Q1 Report

Q1 2023 REPORT

AURORA EIENDOM Q1 2023 REPORT

Table of contents

06	HIGHLIGHTS AND SUMMARY
08	KEY FIGURES

10

13

14

THE REAL ESTATE PORTFOLIO

DEVELOPMENT PROJECTS

SUSTAINABILITY IN AURORA EIENDOM

15	FINANCIAL DEVELOPMENTS

18

24

CONSOLIDATED STATEMENT OF PROFIT OR LOSS

NOTES

28	ALTERNATIVE PERFORMANCE MEASURES & EPRA REPORTING
35	GLOSSARY

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HIGHLIGHTS AND SUMMARY OF THE

First quarter of 2023

LETTER FROM THE CEO

A good start

• Rental income in Q1 was NOK 144.5 million (NOK 83.1 million). The increase is mainly due to growth in the shopping center portfolio in 2022.
• The quarter's gross tenant turnover in our fully owned centers was NOK 1 813 million, which is a like-for-like growth of 6.3 % compared to Q1 2022. Restaurants and cafés along with clothing stores and shoe stores experienced positive development. Categories closely connected to sales of residential units and vacation homes have had a weaker quarter.

• In Q1 the occupancy rate was 93.5 %, close to unchanged from last quarter. Leases representing 4.0 % of the portfolio's gross lettable area were extended, maintaining the weighted average lease term of the portfolio at 3.3 years.
• Alti Forvaltning AS continued its growth announcing three new management contracts in the quarter: Amfi Eikunda, Amfi Flekkefjord and Røa Torg. This brings the total of centers managed by Alti Forvaltning to 41 centers.

Contrary to our expectations, the year began with strong growth in tenant turnover. A low unemployment rate, high expectations for this year's wage growth and redistribution of spending from capital goods to consumer goods are contributing factors to the activity at the shopping centers. This is resulting in strong numbers despite increasing housing costs for consumers such as interest and electricity.

The shopping center portfolio had a tenant turnover in the quarter of NOK 1.8 billion, an increase of 6.3 per cent compared to last year. The development varies between the categories, and we see that categories closely connected to sales of residential units and vacation homes are lagging. Restaurants and cafés

increased expectations for inflation and market rent. This resulted in stable property values last quarter.

Most industries have had a taste of the impact of various macro factors in the last couple of years. The shopping center sector has proven strong so far and continued to do so in the first three months of 2023. Rarely has it been so interesting to follow the

Gross rental income (NOK million)

EPRA NRV per share (NOK)

Value of investment properties (NOK million)

Net Loan to value (LTV)

along with clothing stores and shoe stores are among the growth winners.

With tenant turnover remaining at good levels, we experience positivity among tenants with a view to upgrading stores and concepts and establishing new units. At the same time, although the number of bankruptcies is well below the levels before the pandemic, we are noticing an increase.

During the first quarter leases with a total of 2.161 square meters started and 2.213 square meters expired, which results in a close to unchanged occupancy rate. In the same period leases representing 4.0 per cent of the portfolio's gross lettable area were extended, maintaining the weighted average lease term of the portfolio at 3.3 years.

In the external valuation of the shopping center portfolio the continuing increase in interest rates led to an adjustment of the valuation yields of 0.15 percentage points. As countervailing effects, there are

development of customer spending from week to week and the distribution between the industries.

We continuously work to adjust the tenant mix to be as relevant and interesting as possible to our visitors, and we are glad to be opening the second IKEA planning studio in our shopping center portfolio at Gulskogen Senter this summer. This is another step towards developing our strong shopping destinations to also be a hub of services.

All in all, we observe that our shopping centers are resilient in changing market conditions. Occupancy remains high, turnover develops positively, and our centers are attractive locations for new and existing tenants.

Lars Ove Løseth

CEO

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Key figures

Group Key Figures		Q1 2023	Q1 2022	2022	2021
Rental Income	NOK	144 510 730	83 122 490	447 915 298	158 043 738
Net income from property management	NOK	124 980 973	71 321 160	377 828 438	129 008 000
		31.03.2023	31.03.2022	31.12.2022	31.12.2021
Market value of property portfolio	NOK	8 844 200 000	6 487 100 000	8 813 000 000	5 222 900 000
Net interest bearing debt *	NOK	4 620 966 243	2 987 144 912	4 681 651 166	2 377 271 564
Outstanding shares		30 962 431	24 510 976	30 962 431	20 550 400
Equity per share	NOK	132.3	135.8	130.5	130.7

Alternative performance measures*		Q1 2023	Q1 2022	2022	2021
Interest coverage ratio		2.0	2.6	2.2	3.2
Loan to Value (LTV)	%	52.2	46.0	53.1	45.5
EPRA earnings per share (EPS)	NOK	1.65	1.74	6.42	6.37
EPRA NRV per share	NOK	137	142	135	139
EPRA NTA per share	NOK	133	137	130	135
EPRA NDV per share	NOK	132	136	131	131
EPRA Net Initial Yield	%	5.72	5.24	5.76	5.36
EPRA Topped-Up Net Initial Yield	%	5.81	5.40	5.85	5.53
Fully Let Net Yield	%	5.98	5.62	6.01	5.64
EPRA Vacancy Rate	%	2.4	3.4	2.2	1.8

* See Alternative Performance Measures for details.

Leasing portfolio summary		Q1 2023	Q4 2022	Q3 2022	Q2 2022	Q1 2022
Properties fully owned	#	8	8	8	6	6
GLA	sqm	202 055	202 323	201 905	146 558	146 152
Occupancy*	%	93.5	93.4	93.6	91.8	91.2
WAULT	year	3.3	3.3	2.6	2.6	2.7
Annualised cash passing rental income	MNOK	573 429	576 207**	534 427	383 197	382 670

• Occupied leasing area / GLA
• Consumer price index adjusted to rental income per 01.01.2023

Leasing activity
GLA		Q1 2023
Change in GLA	sqm	(268)
Change in GLA	%	-0.1
Leases started / ended		Q1 2023	YTD 2023	Q1 2022	2022
Total area leases started	sqm	2 161	2 161	428	8 786
Total area leases expired	sqm	2 213	2 213	2 229	6 510
Net area leased	sqm	(52)	(52)	(1 801)	2 276
Net area leased	%	0.0	0.0	-1.2	1.1
Average lease term	year	5.9	5.9	3.1	6.6
Leases extended		Q1 2023	YTD 2023	Q1 2022	2022
Total area	sqm	8 079	8 079	4 192	24 743
Total area	%	4.0	4.0	2.9	12.3
Average extension	year	5.9	5.9	4.0	5.1
Leases signed (not started)		Q1 2023		Q1 2022
Total area	sqm	1 663		4 314
Total area	%	0.8		3.0
Average lease term	year	10.7		9.2

Change in GLA could be as a result of acquisition, sale or development of properties, or redefinition of areas from or to common areas or non-lettable areas.

Leases extended are defined as new or extended lease contracts with the same tenant on the same area. All other lease contracts are defined as leases started.

Leases signed (not started) are leases that are signed, but have a later start date than the last day of the quarter. These lease contracts can be for areas that are both vacant and occupied at last day of the quarter. Lease contracts typical for the shopping center industry normally have a start date between three and nine months after the lease is signed.

Leasing portfolio summary and leasing activity key figures do not include Jærhagen Kjøpesenter or Maxi Storsenter.

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AURORA EIENDOM GROUP

Real estate portfolio

Shopping center portfolio

Alti Amanda	Alti Buskerud	Alti Farmandstredet	Alti Nordbyen
Haugesund 100 %	Krokstadelva 100 %	Tønsberg 100 %	Larvik 100 %

Alti Vinterbro	Arkaden Senter	Gulskogen Senter	Nerstranda Senter
Ås 100 %	Stavanger 100 %	Drammen 100 %	Tromsø 100 %

Associated companies

Alti Forvaltning	Maxi Storsenter	Jærhagen Kjøpesenter
Surnadal 50 %	Hamar 25 %	Kleppe 10 %

Key figures

202 055	NOK
sqm	8.4bn
Gross lettable area	Tenant revenue

Development projects

Alti

Buskerud

Elveparken, Krokstadelva

At Krokstad in Drammen, we have under development approx. 550 housing units with shoreline to the Drammen river. We are developing what will become a new residential area in Drammen next to Alti Buskerud. Part of the land lot will be developed to retail. Planning initiative submitted.

NOK	NOK
573m	8.8bn
Annualised cash passing	Portfolio value
rental income

Alti

Nordbyen

Hovlandparken, Larvik

At Hovland in Larvik, we have under development approx. 800 housing units on the "old Hovland Trotting Track", combined with retail areas. This is planned to become a residential area just outside the center of Larvik, with Alti Nordbyen as one of the closest neighbours. Planning initiative submitted.

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