1 STRICTLY CONFIDENTIALPANGEA PROPERTY PARTNERS
PANGEA PROPERTY OUTLOOK – NORDICSAt the peak or just on the way to the top? – October 2017
2 STRICTLY CONFIDENTIALPANGEA PROPERTY PARTNERS
PREFACE
This presentation is produced by Pangea Research and
presents our view on the Nordic market in 2017/2018:
» Macro economy
» Nordic real estate market
» Nordic listed sector
» Country summaries
This edition summarizes the overall Nordic market.
Complete market updates for the Swedish and Norwegian
market are also available.
BACKGROUNDSWEDEN
» Macro economy; broad-based growth well above the Eurozone average, driven by both domestic demand and exports,
coupled with public stimulations in connection to the 2018 election
» Property yields; prime yields expected to remain flat, due to exceptional demand and further rental growth, but secondary
yields starting to climb
» Rental markets; rental growth concentrated to the main cities, fueled by strong labour markets and new supply not
meeting demand, while neutral outlook in smaller cities
» Transaction volume; lower activity expected due to uncertainty related to future financing and tax costs, but still high
liquidity in a European perspective, around SEK 140-160bn in 2017 and 2018
NORWAY
» Macro economy; GDP growth picking up after some years of slow growth; driven by solid onshore GDP growth, higher
production activity and growth in employment
» Property yields; flat yield development is expected in 2018 and 2019, but some upward pressure. Higher leases expected
to be the main driver for investor returns going forward
» Rental markets; strong rental market with increasing office rents, and low net supply of new office premises expected to
reduce vacancy in Oslo and Bergen in 2018
» Transaction volume; volume slightly higher than in 2016, expected around NOK 70-85bn in 2017 and 2018. High activity
from international investors; assumed to continue looking for exposure in Norway
FINLAND
» Macro economy; positive momentum in the Finnish economy, after a long stagnation period
» Property yields; still 75-150 bps yield spread compared to the rest of the Nordics, attracting foreign interest
» Transaction volume; record high volume of EUR 9-10bn in 2017, driven by the Sponda deal (EUR 3.8bn)
DENMARK
» Macro economy; continued upswing for the Danish economy, with better capacity utilization
» Property yields; stable prime yields in Copenhagen, and increasing interest from international investors
» Transaction volume; slightly higher than 2016, around DKK 50-60bn in 2017 and 2018
Mikael Söderlundh, Nordics
Head of Research & Partner
MOB: +46 73 770 77 90
Sondre Nicander Nilsen
Norway
Head of Research Norway & Associate
MOB: +47 94 36 90 35
CONTACT
3 STRICTLY CONFIDENTIALPANGEA PROPERTY PARTNERS
Nordic property market overview
NORDIC LISTED PROPERTY SECTOR (LAST 12M), %
NORDIC TRANSACTION VOLUMES (2007-2018F), EURBN NORDIC OFFICE PRIME YIELDS (2007-2018F), %
NORDIC OFFICE PRIME RENTS (2007-2018F), EUR
Source: Pangea Research, Mrec, Lokalebasen
-15%
-10%
-5%
0%
5%
10%
Oct-16 Dec-16 Feb-17 Apr-17 Jun-17 Aug-17 Oct-17
PREX Sweden PREX Norway PREX Finland PREX Denmark
3.0%
4.0%
5.0%
6.0%
7.0%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017F 2018F
Stockholm Oslo Helsinki Copenhagen
0
200
400
600
800
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017F 2018F
Stockholm Oslo Helsinki Copenhagen
0
10
20
30
40
50
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017F 2018F
Sweden Norway Finland Denmark Forecast
INTRODUCTION
4 STRICTLY CONFIDENTIALPANGEA PROPERTY PARTNERS
PANGEA PROPERTY OUTLOOK 2017/2018
NORDIC CONTEXT 5
NORDIC REAL ESTATE MARKET 12
NORDIC LISTED REAL ESTATE SECTOR 16
1 SWEDEN 20
2 NORWAY 26
FINLAND 33
DENMARK 35
APPENDIX 37
1
2
3
4
5
8
6
7
5 STRICTLY CONFIDENTIALPANGEA PROPERTY PARTNERS
World
» Broad-based economic growth
» Geopolitical tensions
» Reduced monetary and fiscal stimulations?
US
» Slow start for ‘Trumponomics’
» Strong labour market, but no wage acceleration
» 3-4 further interest rates hikes 2017/2018
Eurozone
» Solid economic recovery
» Strong job growth and household confidence
» Long-term Brexit uncertainty
Nordics
» All countries developing positively
» Healthy public finances and banks
» Reduced population growth, but still high
Asia
» China and India growing 6-7% steadily
» ‘Abenomics’ slowly lifting Japan
CURRENT STATUS
Source: Pangea Research, IMF, Riksbanken
+2.2%
+2.0%
+0.8%
US
GDP
CPI
Population +1.7%
+1.7%
+0.2%
EUROZONE
GDP
CPI
Population
+2.1%
+1.5%
+1.1%
NORDICS
GDP
CPI
Population
+6.6%
+2.4%
+0.6%
CHINA
GDP
CPI
Population
+1.3%
+0.4%
-0.3%
JAPAN
GDP
CPI
Population
+3.8%
+3.3%
+1.0%
WORLD
GDP
CPI
Population
GLOBAL OUTLOOK – KEY FIGURES 2017F
Strong late-cycle growth despite geopolitical tensions – with Nordics being a low risk region
GLOBAL OUTLOOK
6 STRICTLY CONFIDENTIALPANGEA PROPERTY PARTNERS
20
30
40
50
60
70
80
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Sweden Norway Denmark Eurozone
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
Sweden Norway Finland Denmark Nordics Eurozone
2017F 2017-2021F
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
2010 2011 2012 2013 2014 2015 2016 2017F 2018F 2019F 2020F 2021F
Sweden Norway Finland Denmark Nordics
GDP in the Nordics on par with the Eurozone
GDP GROWTH
GDP GROWTH (2010-2021F)
PMI – PURCHASING MANAGERS’ INDEX (2007-2017) GDP FORECASTS (2017-2021F)
» Nordics overall with a forecasted 2017 growth of 2.0%, primarily driven by
the strong growth in Sweden (3.2% in 2017)
» Strong PMI figures in the Nordics and rest of the Eurozone
» Recovery of the Norwegian GDP growth, expected to land at 1.8 % in 2017
and an average of 2.1% from 2017-2021
• Real disposable income for households expected to grow by 1.9% and 2.7%
in 2017 and 2018 (-1.5% in 2016), contributing to consumption growth
» Solid Swedish GDP growth of 2.3% projected in 2017-2021F
• Fiscal and monetary policies remain expansionary
COMMENTS
Source: IMF World Economic Outlook 2017, Statistics Norway
Index (
0-1
00)
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0.0 %
0.3 %
0.6 %
0.9 %
1.2 %
1.5 %
1.8 %
2.1 %
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017F 2018F 2019F 2020F
Sweden Norway Denmark Finland Nordics
Source: IMF World Economic Outlook 2017, Statistics Norway, Statistics Sweden
0.0%
0.4%
0.8%
1.2%
1.6%
2.0%
Sweden Norway Finland Denmark Nordics Eurozone
2017F 2017-2021F
The Nordics with a population growth well above the European average
POPULATION
POPULATION PYRAMID - NORWAY (2017 AND 2040)
POPULATION GROWTH (2007-2020F) POPULATION FORECASTS (2017-2021F)
» Exceptional population growth in the Nordics compared to the rest of
Europe, driven by Sweden and Norway
» The population growth in Sweden and Norway is primarily driven by net
immigration, high birth rates and aging population
» Number of asylum seekers in Sweden is back to a normalized level with a
2017 forecast of ~28,000
» Lower immigration in the Nordics, compared to the last couple of years,
but the impact on real estate is expected to be limited
COMMENTS
2017 2040
45,000 35,000 25,000 15,000 5,000 5,000 15,000 25,000 35,000 45,000
1
8
15
22
29
36
43
50
57
64
71
78
85
92
99
106
Retired
Working age
Minors
FEMALE MALE
+0.4%
+0.6%
+2.4%
CAGR:
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-4.0 %
-2.0 %
0.0 %
2.0 %
4.0 %
6.0 %
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017F 2018F
Sweden Norway Denmark Finland Nordics
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
Sweden Norway Finland Denmark Nordics Eurozone
2017F 2017-2021F
Strong labour market, continuing to strengthen in 2017/2018
EMPLOYMENT
UNEMPLOYMENT (2010-2020F)
EMPLOYMENT (2007-2018F) UNEMPLOYMENT FORECASTS (2017-2021F)
» Norway experienced increasing unemployment in 2015 and 2016, but the
trend reversed around year-end 2016
• Expected to continue to decrease, due to expected growth in most
Norwegian industries
» Decreasing unemployment rates throughout the rest of the Nordics; starting to reach historically low levels
» Two-folded market; lack of qualified work force, but relatively high unemployment among certain groups
» Decreasing unemployment rates across Europe too, but high levels compared to the Nordics
COMMENTS
Source: IMF World Economic Outlook 2017, Statistics Norway
0%
2%
4%
6%
8%
10%
2010 2011 2012 2013 2014 2015 2016 2017F 2018F 2019F 2020F
Sweden Norway Finland Denmark Nordics
9 STRICTLY CONFIDENTIALPANGEA PROPERTY PARTNERS
Source: IMF World Economic Outlook 2017, Statistics Norway, Statistics Sweden, Riksbanken
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
Sweden Norway Finland Denmark Nordics Eurozone
2017F 2017-2021F
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
2010 2011 2012 2013 2014 2015 2016 2017F 2018F 2019F 2020F 2021F
Sweden Norway Finland Denmark Nordics
Relatively high inflation in Norway, compared to the rest of the Nordics and the Eurozone
INFLATION
INFLATION (2010-2021F)
INFLATION FORECASTS (2017-2021F)
» Higher inflation expected globally, starting in the US, fuelled by tax cuts
and public investments
» Slight increase in inflation in the Nordics expected going forward, with
the exception of Norway that is coming from very high levels in 2016
» Swedish inflation (CPI) above 2% in June 2017 for the first time since
2010, but expected to fall back again somewhat
» Norway experienced very high inflation in 2016, mainly due to imported
inflation
• Some imported inflation in Norway is still expected due to expensive
foreign products
COMMENTS
-30%
-20%
-10%
0%
10%
20%
30%
10Y 5Y 1Y
INFLATION BY CATEGORY IN SWEDEN (10Y, 5Y, 1Y)
10 STRICTLY CONFIDENTIALPANGEA PROPERTY PARTNERS
-1.0%
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
Oct-12 Oct-13 Oct-14 Oct-15 Oct-16 Oct-17
Sweden Norway Denmark Finland (Euro)
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
Oct-12 Oct-13 Oct-14 Oct-15 Oct-16 Oct-17
Sweden Norway Denmark Finland (Euro)
-0.5 %
0.0 %
0.5 %
1.0 %
1.5 %
2.0 %
2.5 %
3m 1Y swap 2Y swap 3Y swap 4Y swap 5Y swap 7Y swap 10Y swap
Sweden Norway Denmark Finland (Euro)
Expectations of stable interest rates throughout 2017
INTEREST RATES
INTEREST RATE STRUCTURE (AUG 2017)
5Y SWAP RATES (2012-2017) SIGHT DEPOSIT RATES (2012-2017)
» Quite steep yield curve in the Nordics, especially in Sweden, indicating that the
capital market anticipates higher interest rates and a stronger economy
• First repo rate increases in the Nordics expected earliest mid 2018; Sweden
• First repo rate increase in Norway expected earliest in Q3 2019
» Higher interest rates likely to curb further yield compression
» Large interest rate spread between Norway and the other Nordic countries
» All else equal, high interest rates would make fixed income products more
attractive (and real estate less attractive)
COMMENTS
Source: Thomson Reuters (numbers as of September 20th 2017)
11 STRICTLY CONFIDENTIALPANGEA PROPERTY PARTNERS
PANGEA PROPERTY OUTLOOK 2017/2018
NORDIC CONTEXT 5
NORDIC REAL ESTATE MARKET 12
NORDIC LISTED REAL ESTATE SECTOR 16
1 SWEDEN 20
2 NORWAY 26
FINLAND 33
DENMARK 35
APPENDIX 37
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2
3
4
5
8
6
7
12 STRICTLY CONFIDENTIALPANGEA PROPERTY PARTNERS
NORDIC REAL ESTATE: STABLE LONG-TERM RETURNS…
Source: MSCI, Pangea Property Research
TOTAL RETURN PER ASSET CLASS (2000-2016)
Index (
2000=
100)
RETURN PROFILE (2000-2016)
CORRELATION (2000-2016)
Total return, %
100
150
200
250
300
350
400
450
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Sweden Norway Finland Denmark Nordics
0
2
4
6
8
10
Sweden Norway Finland Denmark Nordics
Total returns Risk (volatility)
Sweden Norway Denmark Finland
Sweden 100% 77% 51% 76%
Norway 77% 100% 79% 79%
Denmark 51% 79% 100% 67%
Finland 76% 79% 67% 100%
The IT bubble
(2000-2001)
The financial crisis
(2007-2008)
Unlevered total returns
according to MSCI / IPD
13 STRICTLY CONFIDENTIALPANGEA PROPERTY PARTNERS
Sweden
41%
Norway
20%
Finland
22%
Denmark
17%
1 1 1 1 NORDICS
No. of transactions, last 12m ~460 ~285 ~130 ~140 ~1,015
Transaction vol. Q1-Q3 2017, €bn 10.0 6.0 7.8 5.7 29.5
- %-change from Q1-Q3 2016 -31% +33% +40% +50% +4%
Transaction vol. 2016, €bn 22.1 8.0 7.4 6.3 43.8
- %-change from 2015 +42% -43% +24% +1% +10%
NORDIC TRANSACTION VOLUMES (2016 AND Q1-Q3 2017) NORDIC TRANSACTION VOLUMES (2007-2017F)
EU
Rbn
Source: Pangea Property Research
Based on deals above EUR 5m in property value
COUNTRY SPLIT (LAST 12M) SECTOR SPLIT (LAST 12M)
… AND HIGH TRANSACTION VOLUMES
3.0%
4.0%
5.0%
6.0%
7.0%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017F
Sweden Norway Finland Denmark
NORDIC OFFICE PRIME YIELDS
Residential
24%
Office
34%
Retail
15%
Industry/logistics
8%
Public sector
6%
Other
13%
0
10
20
30
40
50
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017F
Sweden Norway Finland Denmark Forecast
14 STRICTLY CONFIDENTIALPANGEA PROPERTY PARTNERS
NORDIC LIQUIDITY VS THE REST OF EUROPE
TRANSACTION VOLUMES (2016)
>10 EURbn
5-10 EURbn
3-5 EURbn
1-3 EURbn
<1bn
TRANSACTION VOLUMES (2016) TURNOVER OF STOCK (10Y)
Source: Cushman & Wakefield, Savills, Leimdörfer, Pangea Property Research
# Country EURbn
1 UK 59
2 Germany 53
3 France 27
4 Sweden 22
5 Netherlands 10
6 Italy 9
7 Spain 8
8 Norway 8
9 Finland 7
10 Denmark 6
Total Nordics 43
# Country %
1 Sweden 6.5%
2 UK 5.8%
3 Luxembourg 4.7%
4 Norway 4.3%
5 Denmark 3.7%
6 Finland 3.6%
7 Netherlands 2.3%
8 Germany 2.1%
9 France 1.9%
10 Poland 1.9%
Nordic average 5.1%
Nordics accounted for 17-18% of the European volume 2016
15 STRICTLY CONFIDENTIALPANGEA PROPERTY PARTNERS
PANGEA PROPERTY OUTLOOK 2017/2018
NORDIC CONTEXT 5
NORDIC REAL ESTATE MARKET 12
NORDIC LISTED REAL ESTATE SECTOR 16
1 SWEDEN 20
2 NORWAY 26
FINLAND 33
DENMARK 35
APPENDIX 37
1
2
3
4
5
8
6
7
16 STRICTLY CONFIDENTIALPANGEA PROPERTY PARTNERS
Office
39%
Mixed
25%
Retail
13%
Residential
11%
Warehouse
7%
Hotel
5%
-20%
-10%
0%
10%
20%
30%
40%
50%
0
1,000
2,000
3,000
4,000
5,000
Sweden
78%
Norway
10%
Finland
10%
Denmark
2%
Sweden
21
Norway
3
Finland
3
Denmark
2
NORDIC REAL ESTATE EQUITIES29 listed property companies with a market cap of EUR ~45bn
Source: Pangea Property Research, Thomson Reuters
MARKET CAPITALIZATION (EURm)
TOTAL STOCK RETURNS, LAST 12M
COMPANIES BY COUNTRY
MARKET VALUE BY COUNTRY
MARKET VALUE BY SECTOR
29
EUR ~45bn
EUR ~45bn
DenmarkFinlandSweden Norway
Comment: Share prices as of September 25th 2017
DenmarkFinlandSweden Norway
17 STRICTLY CONFIDENTIALPANGEA PROPERTY PARTNERS
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
PREX Office PREX Retail PREX Residential PREX Warehouse PREX Mixed
-20%
-15%
-10%
-5%
0%
5%
10%
15%
PREX Sweden PREX Norway PREX Finland PREX Denmark PREX Nordics
» 29 Nordic listed property companies (main list)
» Market cap around EUR 45bn – 78% in Sweden
» The Nordic listed real estate sector last 12m (+0%) has
underperformed compared to the overall Nordic listed market
» Sector valued around NAV
» Historically, efficient leading indicator for property prices (6-9
months lag)
LISTED REAL ESTATE: FLAT RETURN OVER LAST 12 MONTHS…
R² = 59%
-40
-20
0
20
40
60
-5 0 5 10 15 20
Pro
pert
y s
hare
s (t
)
Property (t+1)
CORRELATION PROPERTY VS PROPERTY SHARES (2000-2016)*
* Total returns for property shares (PREX Nordic) and property (IPD/MSCI) with one year lag
PREX SECTOR (LAST 12M)
PREX COUNTRY (LAST 12M)
Source: Pangea Property Research
Pangea Real Estate Index (PREX) measures equity market returns excluding dividends
18 STRICTLY CONFIDENTIALPANGEA PROPERTY PARTNERS
0.6x
0.7x
0.8x
0.9x
1.0x
1.1x
1.2x
1.3x
1.4x
1.5x
Saga
x
Jeudan
Vic
tori
a Par
k
Pan
dox
Wal
lenst
am
Fas
tPar
tner
Cat
ena
Pla
tzer
D. C
arnegi
e
Bal
der
Core
m
NP3
Hem
fosa
Wih
lborg
s
Hufv
udst
aden
Fab
ege
Entr
a
Sponda
Tech
nopolis
Diö
s
Cas
tellu
m
Atr
ium
Lju
ngb
erg
Heba
Klö
vern
Kungs
leden
Cityc
on
Norw
egi
an P
rop.
Ola
v T
hon
Weighted average
by country:
NORDICS
1.01DENMARK
1.16FINLAND
0.87SWEDEN
1.04NORWAY
0.80
Comment: Share prices as of 1th of October 2017, EPRA NAV as of latest interim reports
… AND VALUATIONS GOING FROM PREMIUM TO PAR
PROPERTY SECTOR VALUATION (PRICE / EPRA NAV), OCTOBER 2017
Source: Thomson Reuters, Pangea Property Research
2.0x
19 STRICTLY CONFIDENTIALPANGEA PROPERTY PARTNERS
PANGEA PROPERTY OUTLOOK 2017/2018
NORDIC CONTEXT 5
NORDIC REAL ESTATE MARKET 12
NORDIC LISTED REAL ESTATE SECTOR 16
1 SWEDEN 20
2 NORWAY 26
FINLAND 33
DENMARK 35
APPENDIX 37
1
2
3
4
5
8
6
7
20 STRICTLY CONFIDENTIALPANGEA PROPERTY PARTNERS
-1%
0%
1%
2%
3%
4%
5%
2011 2013 2015 2017F 2019F 2021F
GDP growth Population growth Inflation
SWEDENEconomic tailwind and further rental growth, but new tax regulations affecting the property market
Source: Pangea Research
MACRO ECONOMY
» Strong macro fundamentals remain, reinforcing
the view of Sweden as a stable core market
» Broad-based economic growth (above 3% in
2017F) driven by job growth, exports and public
stimulations connected to the 2018 election
» Inflation stabilizing around the 2% target
» Expectations on higher interest rates with first
repo rate increase in mid-2018
TRANSACTION MARKET
» Still high liquidity from a European perspective,
but volumes coming down from the 2016 level
» The slowdown driven by investors expecting
higher financing and tax costs already in 2018
» Increased spending power among public pension
funds expected, due to new investment guidelines
» High activity in the residential and public sector
segments accounting for almost half of the volume
YIELDS AND RENTS
» Stable and record low prime yields, pushed down
by exceptional demand and low supply
» Secondary yields starting to increase, particularly
in the retail segment
» Stockholm office rental growth continues, driven
by new supply not meeting demand
» Regulated market for rental apartments, but
large scale renovation schemes lifting the rents
KEY MACRO PARAMETERS (2010-2020F) TRANSACTION VOLUME (2007-2018F) OFFICE YIELDS AND 10Y SWAP (2006-2017)
SEK
bn
0%
1%
2%
3%
4%
5%
6%
7%
8%
2006 2008 2010 2012 2014 2016
0
100
200
300
400
500
0
50
100
150
200
250
2007 2009 2011 2013 2015 2017F
Transaction volume No of deals
21 STRICTLY CONFIDENTIALPANGEA PROPERTY PARTNERS
PANGEA PROPERTY OUTLOOK 2017/2018Overall temperature watch – the Swedish market
GDP GROWTHLABOUR MARKET
POPULATION
GROWTH
LISTED SECTOR
INSTITUTIONS
PUBLIC SECTOR
BANK LOANSRETAIL
INFLATION
INSTITUTIONS
PROPERTY FUNDS
INTEREST RATES
INTERNATIONAL
LISTED SECTOR
PROPERTY FUNDS
DEVELOPERS
ALTERNATIVE DEBT
BOND MARKET
STOCKHOLM OFFICE
HOTELS
PROPERTY YIELDS
RENTAL MARKET
TRANSACTION
ACTIVITY
FINANCING
OVERALL MARKET
YIELDSRENTAL MARKETS
REGIONAL OFFICE
HOTELSREGIONAL OFFICE
STOCKHOLM OFFICE
SECONDARY ASSETSPREFERENCE SHARES
» Strong macro fundamentals remain
2017/2018, reinforcing the view of
Sweden as a stable core market
» Still strong demand for property, with
increased spending power among public
pension funds expected
» However, higher financing costs and tax
issues making the transaction market
cool down somewhat
» Rental growth concentrated to core
offices, more downside risks in certain
retail and residential submarkets
PRIVATE COMPANIES
RESIDENTIAL
RESIDENTIALSRETAIL
MACRO BUY SIDE SELL SIDE
Solid economic growth with interest
rates and inflation on the rise
Many active investors, with new
regulations for public pension funds
Public sector (municipalities, city
councils) and developers active sellers
Slightly cautious banks, hampered
by high property prices and regulation
Rental growth concentrated to the
largest office markets
Higher financing costs put pressure on
yields, but limited overall impact
Further rental growth but transaction
volumes slightly down from 2016
Source: Pangea Research
INTERNATIONALPRIVATE COMPANIESDEVELOPERS
MACRO
22 STRICTLY CONFIDENTIALPANGEA PROPERTY PARTNERS
SWEDISH ECONOMIC OUTLOOKEconomic tailwind and scoop for rental growth, but higher interest rate risks
CATEGORY 2017F 5Y forecast COMMENT IMPACT ON REAL ESTATE OUTLOOK
ECONOMIC
GROWTH(real GDP growth)
3.2% 2.3%
• A couple of more years with solid growth, well above the Eurozone average
• Broad-based economic growth driven by both domestic demand and exports
• High historical correlation between GDP growth and property returns (but late cyclical tendency)
• Sweden looks competitive in a European perspective attracting foreign core investments
DEMOGRAPHICS(population growth)
1.8% 1.2%
• Exceptional population growth in a European perspective, also after the stop of refugee influx
• Aging population and clear urbanization trend
• Growing population creates immediate demand for housing and public services
• Focus on the largest cities and regions attracting the main bulk of people
LABOUR MARKET(unemployment rate)
6.7% 6.6%
• Strong job growth but two-folded labour market (skilled vs unskilled workforce)
• Limited wage increases due to recently settled collective agreements
• Continued strong occupier markets in the largest cities, where vacancy rates are already record low
• Lack of construction workers could mitigate the risk of a construction boom going forward
INFLATION(CPI)
1.8% 2.0%
• KPIF (and KPI) above the long-term target of 2% for the first time since 2010
• Expected to fall back again initially due to temporary factors
• Positive effect on CPI-linked leases
• However, higher inflation puts pressure on the Riksbank to hike up the key interest rate
INTEREST RATES(5Y swap)
0.4% n/a
• Expectations on gradually increasing interest rates with first repo rate increase expected mid-2018
• Long-term interest rates expected to be 50-75 bps higher at end of 2018
• More expensive property financing
• Bonds becoming more attractive as an investment(but still a gap between real estate vs bond yields)
1
2
3
4
5
Source: Pangea Research, IMF, Riksbanken
23 STRICTLY CONFIDENTIALPANGEA PROPERTY PARTNERS
INVESTOR OUTLOOKInstitutions, property funds and international investors expected to be net buyers
CATEGORY CURRENT HOLDINGS CHANGE 2016 CHANGE 2017 YTD OUTLOOK COMMENT
Institutional
investorsSEK ~500bn
Net: SEK +5bn
Buy: SEK +33bn
Sell: SEK -28bn
Net: SEK +8bn
Buy: SEK +14bn
Sell: SEK -6bn
• Outlook: net buyers
• Still underweighted in real estate (9% of AUM on average)
• New regulations for the Swedish National Pension Funds (AP1-AP4)
• Some institutions shifting focus to property development
Listed property
companiesSEK ~650bn
Net: SEK +34bn
Buy: SEK +60bn
Sell: SEK -26bn
Net: SEK +2bn
Buy: SEK +19bn
Sell: SEK -17bn
• Outlook: neutral
• Stock market valuation changing from premium to par
• Good access to capital, both equity and debt
• Large net buyers in 2016 due to by Norrporten
Property funds SEK ~170bn
Net: SEK +2bn
Buy: SEK +13bn
Sell: SEK -11bn
Net: SEK -1bn
Buy: SEK +3bn
Sell: SEK -4bn
• Outlook: net buyers
• Many funds with significant capital to spend over the next few years
• Almost SEK 30bn raised to Swedish property funds/clubs in 2016/2017
• Challenging to find opportunistic returns in Sweden
Private property
companiesSEK ~1,200bn
Net: SEK -15bn
Buy: SEK +51bn
Sell: SEK -66bn
Net: SEK -8bn
Buy: SEK +20bn
Sell: SEK -28bn
• Outlook: net sellers
• Record low yields triggering strategic sales
• Consolidation trend with large companies growing larger
• Fragmented group, many small local property owners
International
investorsSEK ~230bn
Net: SEK -8bn
Buy: SEK +34bn
Sell: SEK -42bn
Net: SEK +4bn
Buy: SEK +24bn
Sell: SEK -20bn
• Outlook: neutral
• Many foreign investors considering the Nordics a safe haven
• Increasing interest from international core funds
• Mixed currency effects (USD / EUR / GBP)
Other investors SEK ~1,500
Net: SEK –17bn
Buy: SEK +17bn
Sell: SEK –34bn
Net: SEK –6bn
Buy: SEK +9bn
Sell: SEK –15bn
• Outlook: net sellers
• Municipalities sold for about SEK 17bn in 2016-2017 H1
• Further sales interrupted by the election 2018
• Non-core sales expected from city councils and owner-occupiers
TOTAL MARKET SEK ~4,300bn
1
2
3
4
5
Source: Pangea Research. Estimated property holdings
6
24 STRICTLY CONFIDENTIALPANGEA PROPERTY PARTNERS
SEGMENTS OUTLOOKOverall positive outlook with most downside risk in the retail segment
KEY DRIVERS OFFICE RETAIL RESIDENTIAL LOGISTICS PUBLIC SECTOR HOTEL COMMENTS
RENT
POTENTIALPOSITIVE NEUTRAL
SLIGHTLY
POSITIVE
SLIGHTLY
POSITIVE
SLIGHTLY
POSITIVE
SLIGHTLY
POSITIVE
• Strong job growth and low vacancy rates favouring the office sector
• Less impact on long lease properties and regulated markets such as residentials
INTEREST RATE
SENSITIVITY
SLIGHTLY
NEGATIVE
SLIGHTLY
NEGATIVENEGATIVE
SLIGHTLY
NEGATIVENEGATIVE
SLIGHTLY
NEGATIVE
• Risk of higher interest rates affecting the entire property market
• However, largest impact on low yielding properties and highly leveraged segments
DEBT
AVAILABILITY
SLIGHTLY
POSITIVENEUTRAL NEUTRAL NEUTRAL
SLIGHTLY
POSITIVENEUTRAL
• Fairly liquid bank sector and very strong bond market
• Focus on core assets and relationship-driven lending
INVESTOR
PREFERENCESPOSITIVE NEUTRAL POSITIVE POSITIVE POSITIVE POSITIVE
• Generally, strong investor demand for real estate in the current market
• Weak interest for secondary retail
NEW SUPPLY
BALANCEPOSITIVE
SLIGHTLY
NEGATIVE
SLIGHTLY
NEGATIVEPOSITIVE POSITIVE
SLIGHTLY
POSITIVE
• Risk of oversupply in some niches of the residential and retail markets
• Surplus demand and limited vacancy risks in most other segments
OVERALL POSITIVE NEUTRALSLIGHTLY
POSITIVEPOSITIVE
SLIGHTLY
POSITIVE
SLIGHTLY
POSITIVE
• Rental upside vs. risks of higher financing and tax costs
• New supply risks in the retail and residential segments
Rental growth concentrated tothe largest cities
Large differenceprime vs secondary
retail
Large difference old stock vs new
production
Long-term trading patterns favouring
logistics
Favourable demographics but pressured yields
Strong demand from both leisure
and business guestsSource: Pangea Research
25 STRICTLY CONFIDENTIALPANGEA PROPERTY PARTNERS
PANGEA PROPERTY OUTLOOK 2017/2018
NORDIC CONTEXT 5
NORDIC REAL ESTATE MARKET 12
NORDIC LISTED REAL ESTATE SECTOR 16
1 SWEDEN 20
2 NORWAY 26
FINLAND 33
DENMARK 35
APPENDIX 37
1
2
3
4
5
8
6
7
26 STRICTLY CONFIDENTIALPANGEA PROPERTY PARTNERS
0
20
40
60
80
100
120
2006 2008 2010 2012 2014 2016 2018
0%
1%
2%
3%
4%
2011 2013 2015 2017F 2019F 2021F
GDP growth Population growth Inflation1%
2%
3%
4%
5%
6%
7%
8%
2010 2011 2012 2013 2014 2015 2016 2017
MACRO ECONOMY
» Onshore GDP back to +2.0 % figures
» Inflation to normalize from 2016’s high levels, but
still remains significantly higher than rest of Nordics
» Higher production activity boost employment from
2015/16’s high unemployment. However,
unemployment still well below European average
» Population growth primality driven by net
immigration, high birth rates and aging population
TRANSACTION MARKET
» Strong transaction market in 2017 so far;
expected to land at NOK 70-85bn
» Forecasted slightly higher volume in 2017 and
2018 compared to 2016
» The Oslo and Akershus market is highly liquid,
followed by Hordaland and Rogaland counties
» High activity from international investors, with
a ~23 % market share over the last 12 months
YIELDS AND RENTS
» Historically low prime office yields
» Expect flat yield development in 2018-2019 with
an upward pressure on rents; being the driver for
investor returns going forward
» Stable repo rate of 0.5 % since April 2016. First
repo rate increase expected earlies Q3 2019
» Higher interest rates likely to curb further yield
compression
NORWAYStable economic outlook, liquid transaction market and historically low prime yields in Norway
Source: Pangea Research, IMF Economic outlook
KEY MACRO PARAMETERS (2011-2021F) TRANSACTION VOLUME (2006-2018F) PROPERTY YIELDS AND 10Y SWAP (2010-2017)
NO
Kbn
27 STRICTLY CONFIDENTIALPANGEA PROPERTY PARTNERS
MARKET TEMPERATURE WATCHStrong macro and property market in 2017/18, but some upwards pressure on secondary yields
GDP GROWTH EMPLOYMENT
POPULATION
GROWTH
LISTED SECTOR
PROFIT TAKING
COMPLETED
DEVELOPMENTS
BANK LOANS
RETAIL
INFLATION
INSTITUTIONSPROPERTY FUNDS
INTEREST RATES
INTERNATIONAL
STRATEGIC EXITS
PORTFOLIO
SHARPENING
BOND MARKETOSLO OFFICE
HOTELS
PROPERTY YIELDS
RENTAL MARKET
TRANSACTION
ACTIVITY
FINANCING
OVERALL MARKET
YIELDSRENTAL MARKETS
REGIONAL OFFICEOSLO OFFICE
REGIONAL OFFICE
HOTELS
RETAIL
» Strong macro fundamentals, and positive
future prospects
» Persistent buy-side demand; more sellers
might emerge seeking to harvest profits
» Stable financing terms going forward;
banks’ net margin has never been higher
» Wide spread in rental market
performance
» Yields have bottomed out and could rise
in markets with sluggish rental growth
PRIVATE COMPANIES
RESIDENTIAL
RESIDENTIALS SECONDARY ASSETS
MACRO BUY SIDE SELL SIDE
Solid economic growth and inflation still
relatively high; possible higher int. rates
High demand; active financial buyers,
passive listed sector, private co’s selective
Sellers driven by good timing
for profit harvesting
Banks prefer existing clients, bonds are
attractive, increase in institutional credit
Oslo office will outperform,
but most segments positive
Possible higher interest rates put pressure
on yields, but limited overall impact
Rental growth and strong transaction
market, but some upwards yield pressure
Source: Pangea Property Research
MACRO
BORROWING
MARGINSINSTITUTIONAL
CREDIT
WESTERN NORWAY
HOTELS
28 STRICTLY CONFIDENTIALPANGEA PROPERTY PARTNERS
CATEGORY 2017F 5Y forecast COMMENT IMPACT ON REAL ESTATE OUTLOOK
ECONOMIC
GROWTH
(Real GDP growth)
1.8 % 2.3 %
• GDP growth has picked up and is expected to be on average 2.1% the coming 4 years
• Driven by solid onshore GDP growth, higher production activity and growth in employment
• High historical correlation between GDP growth and property returns (but late cyclical tendency)
• Economic growth will eventually materialize in lower vacancy rates and increased rents, especially in areas reliant on oil-activity like Stavanger and Bergen
DEMOGRAPHICS
(Population growth)1.4 % 1.1 %
• Strong population growth in Norway compared to the European average
• Driven by net immigration, high birth rates and aging population
• Positive impact on real estate as it drives demand
• Strong impact on the residential market; developers with focus on conversion to residential purposes and zoning of new central residential projects
LABOUR MARKET(Unemployment rate)
4.2 % 3.8 %
• Employment decreased with the oil price drop in 2014-2015, but show signs of recovery
• Expectations of higher production activity result in stable outlook for the Norwegian employment market with a forecasted 5yr unemployment rate of 3.8%
• Low unemployment reduce risk of vacancy
• Important factor for international investors; Norway’s unemployment rate is still well below the European and Nordic average and considered a safe haven
INFLATION(CPI)
2.1 % 2.5 %
• After a period of high inflation in 2016 (3.6%), it is expected to be just below 2.0 % in 2017
• Recent forecasts indicate inflation just below 2 % in 2018-2020; higher than rest of the Nordics and Europe
• Positive effect on rents through CPI-linked leases
• Inflation forecasts below Norway’s target of 2.5 % curbs the pressure on key interest rate hikes
INTEREST RATES(5Y swap)
1.4 %
Jan-17: 2.36 %
Sep-17: 2.40 %
Δ: +0.04 %
• Still need for expansive monetary policy due to low interest rates abroad, capacity utilization below normal and inflation below target going forward
• Key interest rate expected to gradually increase from 2019
• More expensive property financing and higher cost of capital
• Bank margins, however, are high historically, and a reduction of margins might neutralize some of the effect from increased interest rates
NORWEGIAN ECONOMIC OUTLOOKAnd implications on the real estate market
1
2
3
4
5
Source: Pangea Property Research
29 STRICTLY CONFIDENTIALPANGEA PROPERTY PARTNERS
NORWEGIAN INVESTOR OUTLOOKActive buyers and sellers – 2016 vs 2017/2018
CATEGORY EST. HOLDINGS ACTIVITY 2016ACTIVITY 2017/2018
2017 YTD OUTLOOKCOMMENT
Institutional
investorsNOK ~135bn
Buy: NOK +5.0bn
Sell: NOK -6.7bn
Net: NOK -1.7bn
Buy: NOK +4.0bn
Sell: NOK -3.2bn
Net: NOK +0.8bn
• 2016: neutral; outlook 2017/2018: neutral to net buyers
• Regulation-driven divestments from 2015 onwards
• Current allocations close to target
• Selective net buyers in 2017/2018
Listed property
companiesNOK ~91bn
Buy: NOK +7.7bn
Sell: NOK -8.3bn
Net: NOK -0.6bn
Buy: NOK +2.3bn
Sell: NOK -4.3bn
Net: NOK -2.0bn
• 2016: neutral; outlook 2017/2018: neutral to net sellers
• Stock market valuation still below NAV
• Access to capital; low loan-to-value
• Entra and OLT buyers; NPRO sellers in 2016
Property
funds/syndicatesNOK ~107bn
Buy: NOK +21.1bn
Sell: NOK -12.0bn
Net: NOK +8.8bn
Buy: NOK +10.2bn
Sell: NOK -11.6bn
Net: NOK -1.4bn
• 2016: net buyers; outlook 2017/2018: net buyers
• Many funds with significant capital to spend over the next few years
• Some financing issues for SPVs
• Profit harvesting to cause increased sales in 2017/2018
Private property
companiesNOK ~1,300bn
Buy: NOK +26.4bn
Sell: NOK -31.6bn
Net: NOK -5.1bn
Buy: NOK +20.4bn
Sell: NOK -20.8bn
Net: NOK -0.4bn
• 2016: net sellers; outlook 2017/2018: neutral to net sellers
• High profitability and capital to spend (amortizing not so interesting)
• Record low yields also triggering strategic sales
• Long-term consolidation trend, large companies growing larger
International
investorsNOK ~95bn
Buy: NOK +8.9bn
Sell: NOK -7.0bn
Net: NOK +1.9bn
Buy: NOK +14.2bn
Sell: NOK -4.9bn
Net: NOK +9.3bn
• 2016: net buyers; outlook 2017/2018: neutral to net buyers
• Many foreign investors looking at the Nordics as a safe haven
• Meets tough competition from domestic investors and low yields
• Lower required returns and use of separate accounts keep the Nordics attractive
Other n.a.
Buy: NOK +6.3bn
Sell: NOK –8.3bn
Net: NOK -2.0bn
Buy: NOK +2.0bn
Sell: NOK -8.8bn
Net: NOK –6.8bn
• 2016: net sellers; outlook 2017/2018: net sellers
• Typically private investors that does not have real estate as their core business
• Sales likely triggered by buy side initiatives
• More demanding tenants require professional management; trigger sales
1
2
3
4
5
Source: Pangea Property Research (numbers as of September 20th 2017)
6
30 STRICTLY CONFIDENTIALPANGEA PROPERTY PARTNERS
PROPERTY SEGMENTS2018 Outlook
SEGMENT COMMENTS OUTLOOK OUTLOOK
OSLO OFFICE
• All time low prime yield and all time high average office rent in Oslo
• Highly liquid market, 2017 YTD up 85 % from same period last year
• Oslo becomes bigger; inner city still considered very attractive, but due to lease levels, some tenants seek alternatives outside that can provide similar amenities, such as Helsfyr, Nydalen, Skøyen, etc.
• Reduced vacancy rate in Oslo and Bærum in 2018
• Flat office yields and upwards pressure on leases in Oslo
• Expect slight reduction in conversion from office to residential –with potential to effect vacancy, as a result of recent sluggish residential prices in Oslo
REGIONAL OFFICE
• Stavanger, Bergen and Trondheim struggle with great division in the office market
• In general, strong performance in the city center while areas outside the city center struggle with high vacancy and low office rents
• Stavanger is the definite weakest market of the three, but picking up
• Residential conversion and low net supply of new office premises in Bergen assumed to reduce vacancy – stable outlook
• Stavanger market expected to have reached its low point – positive
• Trondheim with risk of oversupply of new offices and week office rents outside the inner city center in 2018 - negative
RETAIL
• Shopping centers struggle with sluggish rents and flat turnover development
• High street retail with stable performance; positive rent development and low yields. Demand from international investors
• Big box market stable and liquid, but relatively small
• Shopping centers in process of adjusting to new consumer habits; offering more than just traditional shopping to attract visitors
• Investors willing to invest in customer experience will be the “winners” of this segment
• Flat development in retail yield assumed in 2018
HOTEL
• All time high ADR, RevPAR and occupancy rate in Norway 2017YTD (compared to same periods) since 2008
• Oslo proves itself as a strong hotel city with ~50 % growth in RevPar over the last 5 years
• Revenue growth, in an environment of low construction, paves the ground for a strong hotel year in 2017/18, with the exception of Western Norway
• Ownership is still relatively dispersed, opening for structural changes within the segment going forward
LOGISTICS
• Logistics segment in Norway is small compared to other countries
• Higher activity and demand from investors over the last 2-3 years
• More development of premises situated close to city centers
• High-tech solutions seen as key driver for rent development
• “Winners” of this segments will be landlords who are willing to invest large amounts upfront to tailor-make premises for tenants
• In such case, tenants’ willingness to pay higher rents increase
• Yield for premises situated close to the city center has the potential to fall some, along with increased trend of e-commerce
1
2
3
4
5
Source: Pangea Property Research
31 STRICTLY CONFIDENTIALPANGEA PROPERTY PARTNERS
PROPERTY SEGMENTS OUTLOOKImpact of key drivers
KEY DRIVERS OFFICE RETAIL RESIDENTIAL LOGISTICS HOTEL COMMENTS
RENT
POTENTIALPOSITIVE
SLIGHTLY
NEGATIVE
SLIGHTLY
POSITIVENEUTRAL POSITIVE
• Strong job growth and low vacancy rates favouring the office sector
• Positive momentum in the hotel segment
INTEREST RATE
SENSITIVITY
SLIGHTLY
NEGATIVE
SLIGHTLY
NEGATIVENEGATIVE
SLIGHTLY
NEGATIVE
SLIGHTLY
NEGATIVE
• Risk of higher interest rates affecting the entire property market
• However, largest impact on low yielding properties and highly leveraged segments
DEBT
AVAILABILITY
SLIGHTLY
POSITIVENEUTRAL
SLIGHTLY
NEGATIVENEUTRAL
SLIGHTLY
POSITIVE
• Fairly liquid bank sector and strong bond market
• Focus on core assets and relationship-driven lending
INVESTOR
PREFERENCESPOSITIVE NEUTRAL
SLIGHTLY
POSITIVEPOSITIVE POSITIVE
• Generally, strong investor demand for real estate in the current market
• Weaker interest for secondary retail
NEW SUPPLY
BALANCEPOSITIVE
SLIGHTLY
POSITIVE
SLIGHTLY
NEGATIVEPOSITIVE
SLIGHTLY
POSITIVE
• Risk of oversupply in parts of the residentialand hotel segment
• Surplus demand and limited vacancy risks in most other segments
OVERALL POSITIVE NEUTRALSLIGHTLY
NEGATIVEPOSITIVE
SLIGHTLY
POSITIVE
• Favourable outlook for office, logistics and hotel properties
• More downside risk in the retail and residential segments
Rental growth concentrated tothe largest cities
Large differenceprime vs secondary retail
Risks associated with the vast increase in residential prices the last
few years
Long-term trading patterns favouring
logistics
Solid underlying growth driving the hotel segment,
except for Western Norway
32 STRICTLY CONFIDENTIALPANGEA PROPERTY PARTNERS
PANGEA PROPERTY OUTLOOK 2017/2018
NORDIC CONTEXT 5
NORDIC REAL ESTATE MARKET 12
NORDIC LISTED REAL ESTATE SECTOR 16
1 SWEDEN 20
2 NORWAY 26
FINLAND 33
DENMARK 35
APPENDIX 37
1
2
3
4
5
8
6
7
33 STRICTLY CONFIDENTIALPANGEA PROPERTY PARTNERS
MACRO ECONOMY
» The Finnish economy has clearly bottomed out and
shows solid growth again, after a long stagnation
» Household confidence is improving as well as
domestic production and exports
» Major economic reforms launched concerning
healthcare, social welfare and regional governments
» More focus on the top 15 regions and significant
cost savings
TRANSACTION MARKET
» Record-high transaction volumes reaching almost
EUR 10bn in 2017, driven by foreign investors
» Large capital inflow from Sweden, but also
Germany, Switzerland, US and UK
» Focus on HMA and selective regional cities such
as Tampere, Turku and Oulu
» Finnish institutional investors looking for partners
and international diversification
YIELDS AND RENTS
» Still attractive property yields (+75-150 bps)
compared to the rest of the Nordics
» Room for new investors and less competition in
certain sectors such as hotels, logistics, retail and
care properties
» Gradually increasing office rents in HMA, while
stable outlook in most regional cities
FINLANDEconomic growth picking up speed, making international investors look east
Source: Pangea Research, Mrec
KEY MACRO PARAMETERS (2011-2021F) TRANSACTION VOLUME (2007-2018F) OFFICE YIELDS AND 10Y SWAP (2010-2017)
EU
Rbn
0%
2%
4%
6%
8%
10%
2010 2011 2012 2013 2014 2015 2016 2017
0
2
4
6
8
10
2007 2009 2011 2013 2015 2017F
-2%
-1%
0%
1%
2%
3%
4%
2011 2013 2015 2017F 2019F 2021F
GDP growth Population growth Inflation
34 STRICTLY CONFIDENTIALPANGEA PROPERTY PARTNERS
PANGEA PROPERTY OUTLOOK 2017/2018
NORDIC CONTEXT 5
NORDIC REAL ESTATE MARKET 12
NORDIC LISTED REAL ESTATE SECTOR 16
1 SWEDEN 20
2 NORWAY 26
FINLAND 33
DENMARK 35
APPENDIX 37
1
2
3
4
5
8
6
7
35 STRICTLY CONFIDENTIALPANGEA PROPERTY PARTNERS
-1%
0%
1%
2%
3%
4%
2011 2013 2015 2017F 2019F 2021F
GDP growth Population growth Inflation
MACRO ECONOMY
» Economic recovery continues with expected GDP
growth just above 2% in 2017-2018F
» Low unemployment and increasing private
consumption, while export is still lagging
» Housing prices continue to increase, particularly
in Copenhagen and Aarhus, at a controlled pace
» Low repo rate (-0.65%) and public stimulations
TRANSACTION MARKET
» Gradually increasing transaction volumes, driven
by a large proportion of cross-border deals
» Strong interest from international investors,
gradually shifting focus from residential to office
and prime retail
» Focus on the Copenhagen region accounting for
more than 70% of the investment market, with
Aarhus holding a clear second place
YIELDS AND RENTS
» Generally low rent levels in Copenhagen, both in
the residential and office segments, due to the
city dynamics
» However, a strong labour market coupled with
low office vacancy pushes rents slowly upwards
» Downward pressure on property yields in recent
years, following a broader investor demand
DENMARKEconomic recovery continues with international investors dominating the property market
Source: Pangea Research
KEY MACRO PARAMETERS (2011-2021F) TRANSACTION VOLUME (2007-2018F)
DK
Kbn
OFFICE YIELDS AND 10Y SWAP (2010-2017)
0%
2%
4%
6%
8%
10%
2010 2011 2012 2013 2014 2015 2016 2017
0
10
20
30
40
50
60
70
2007 2009 2011 2013 2015 2017F
36 STRICTLY CONFIDENTIALPANGEA PROPERTY PARTNERS
APPENDIX:
PANGEA PROPERTY PARTNERS
37 STRICTLY CONFIDENTIALPANGEA PROPERTY PARTNERS
Corporate finance
» M&A
» ECM and DCM
» IPO's and buyouts
» Financial restructuring
» Strategic advise
OSLOSTOCKHOLM
HELSINKI
LONDON
Property transactions
» Sell-side and buy-side
» Single assets and portfolios
» Property development
» All property segments
» Strategic advise
Research
» Weekly/monthly updates
» Extensive reports
» Full Nordic coverage
» Capital and property markets
» Customized mandates
Pangea offices – In Finland, Pangea collaborates with Mrec Oy
SERVICE OFFERING OFFICES – FULL NORDIC COVERAGE
Transaction value SEK 11.5bn
ADVISED ON THE LARGEST NORDIC TRANSACTIONS
Transaction value NOK 12.3bn
Acquisition of shopping center company Sektor Gruppen in Norway
Transaction value SEK 11.5bn
Acquisition of property companies Sveareal in Sweden and Fortin in Norway
Sale of 50% of Hemsö with properties in Sweden, Finland and Germany
Transaction value SEK 26.2bn
Acquisition of Norrporten with properties in Sweden and Denmark
2016
2015
2014
2013
employees+30
Independent Nordic property adviser with full transaction focus
+330 dealsin the Nordics
(2010-2017)
EUR 27bntotal deal volume
(2010-2017)
PANGEA PROPERTY PARTNERS
38 STRICTLY CONFIDENTIALPANGEA PROPERTY PARTNERS
Sep 2016
SEK ~1.7bn
Sale of logistics and industrial portfolio
in Sweden, Norway and Denmark
Buyer:
Nov 2016
SEK ~6bn
Acquisition of 13 residential
projects in Sweden
Seller:
Apr 2016
SEK 26.2bn
Seller:
Acquisition of Norrporten with
properties in Sweden and Denmark
Mar 2016
SEK 2.9bn
Seller:
Acquisition of Garnisonen in Linköping
and Campus in Östersund
Dec 2016
SEK ~6bn
Sale of four separate property
portfolios in northern Sweden
Buyers:
Dec 2016
NOK 2.1bn
Buyer:
Sale of 58 grocery stores
in Norway
SEK ~2.4bn
Seller:
Feb 2017
Acquisition of Hilton Hotel
(382 rooms) at Copenhagen Airport and
development of a new Comfort Hotel
Dec 2016
NOK 1.0bn
Sale of Comfort Hotel Carl Johan
(181 rooms) in central Oslo
Buyer:
SEK 858m
Buyer:
May 2017
Sale of five office properties
in central Örnsköldsvik
SEK 850m
Buyer:
June 2017
Divestment of 3 properties located in
Flemingsbergsdalen in Stockholm
Not disclosed
Seller:
June 2017
Acquisition of office building
“Stockholm HUB” in
Stockholm CBD
PANGEA PROPERTY PARTNERSMore than 80 executed transactions with a deal value above EUR 8bn in 2016/2017
SEK 675m
Seller:
Jul 2017
Acquisition of 325 apartments (part
of Senapsfabriken) in Uppsala
Not disclosed
Buyer:
Aug 2017
Sale of two retail properties
in Uddevalla and Skövde, Sweden
NOK ~600m
Buyer:
Aug 2017
Sale of shopping centre Øyrane Torg
in Bergen, Norway
Jul 2017
Not disclosed
Köpare:
Sale of development project
Eldsundsviken in Strängnäs, Sweden
39 STRICTLY CONFIDENTIALPANGEA PROPERTY PARTNERS
STOCKHOLM
Norrlandsgatan 15, 7th floor,
Box 7740, 103 95 Stockholm, SWEDEN
pangeapartners.se
OSLO
Tjuvholmen Allé 3, 8th floor,
N-0250 Oslo NORWAY
pangeapartners.no
LONDON
Berkeley Square House, Berkeley Square,
London W1J 6BD, UNITED KINGDOM
en.pangeapartners.se
All the information in this publication has been compiled in good faith and is based on sources that Pangea
Property Partners considers reliable. Nevertheless, no guarantee can be given for the completeness of correctness
of the contents, and Pangea assumes no responsibility for actions based on the contents of this publication. © 2017
Pangea Property Partners KB and Pangea Property Partners AS. All rights reserved.