Annual Report 2016

Steen & Strøm’s shopping center portfolio has seen a positive development throughout 2016. Total retail sales for Steen & Strøm’s shopping centers increased by 2,7 % in 2016 on a like-for-like basis.

You will find the  Annual Report 2016 as e-pages at www.steenstrom.com, Financial Information.

Per country, the sales evolution was an increase of 2,3 % in Norway, 3,4 % in Sweden and 2,5 % in Denmark. Impacted by the addition of Oslo City in December 2015, gross rental income increased 15,9 % in 2016, while net rental income increased 20,6% to NOK 1 691,3 million (NOK 1 402,2 million), implying a net to gross rent ratio of 92,1% (88,5%). On a like-for-like basis, net rental income increased by 5,5 % in 2016, whereof 2,7% in Norway, 6,4% in Sweden and 7,6% in Denmark.

The group generated pre-tax profits of NOK 3 900,2 million in 2016 (NOK 3 084,5 million) which was positively impacted mainly by value adjustments of investment properties of NOK 2 476,3 million  NOK 2 010,9 million), higher income from disposals and a decrease in payroll expenses. Steen & Strøm has, as part of its asset rotation strategy, divested three shopping centers during 2016.  Following the NOK 3,2 billion acquisition of Oslo City in December 2015, Åsane Storsenter (49.9% Steen & Strøm share) and Torp Köpcentrum (100% Steen & Strøm share) were sold to the Olav Thon Group in November 2016. The two assets had a total property value of NOK 2,25 billion (Steen & Strøm share).

Lillestrøm Torv (100% Steen & Strøm share) was divested to DNB Scandinavian Property Fund based on a property value of NOK 800 million. The closing of the transaction for Lillestrøm Torv took place in January 2017. In addition, Steen & Strøm signed an agreement with Kungsleden in December 2016 for the divestment a non-core office property tied to the Emporia shopping center in Malmö. The transaction, based on a property value of SEK 470 million, was finalized during Q1 2017 following the partition of the office property from the shopping center.

The proceeds from the disposals have mainly been used for debt redemption. As a result, Steen & Strøm has significantly improved its financial position during the year. As of 31.12.2016, the group’s net loan-to-value (LTV) ratio was 33,8%, while the book equity ratio was 51.4%. EBITDA net interest coverage, adjusted for valuation changes and one-time charges, was 4.8x for the year.

These figures reflect a long-time trend in which Steen & Strøm has improved its financial position through an active asset rotation strategy that targets high quality, large shopping centers in high-density areas. The group’s loan-to-value ratio has been lowered by approximately 25% since 2010. Steen & Strøm is now well positioned for selected acquisition opportunities or development projects that fall within the group’s portfolio strategy.

May 2 2017

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