Steen & Strøm’s portfolio has to a wide extent resisted the consequences of economic volatility and uncertainty during 2023, with average retailer sales increasing by 7 percent, slightly above average inflation, and indexation. The relatively strong sales performances are driven by Emporia in Sweden and Oslo City in Norway.

Despite the relatively good performances, domestic retailers are hesitating to expand, with reference to the continuing uncertainties around the general, economic environment. International retailers are however still expanding, but demanding larger units, which takes longer to execute and deliver. Consequently, financial occupancy has decreased ‐50 bps during 2023 to 95% end of December.

Steen & Strøm held 10 shopping centers throughout 2023 (Galleria Boulevard divested end of year), located in major regional cities’ catchment areas. The portfolio comprises resilient, large, and modern assets, adapted to consumer needs and expectations. This has to some extent been confirmed during 2023, despite the ongoing, economic challenges (namely high inflation in first half of the year, and increasing interest rates in second half), with a relatively moderate impact on vacancy levels, an overall satisfying collection rate, and solid sales performance (surpassing pre‐Covid levels). End of the year, we have agreed to sell our Swedish asset, Galleria Boulevard in Kristianstad, at a sales price of NOK 475.8 million, with a closing date 2 January 2024.

Net rental income on a like‐for‐like basis increased by +9.0 percent in 2023 (Norway +2.9%, Denmark +6.2% and Sweden +15.2%), mainly due to indexation impact, increase in variable revenues, and increased collection rate, to some extent off‐set by general increases and recovery of service charges and some bankruptcies (impacting provision for credit losses). For the Group as a whole, the indexed linked effect on net rental income was +6.5 percent and the reversion rate was ‐4.3 percent in 2023. Reversion rate was significantly impacted by a few defensive deals in Denmark.

Total change in fair value of investment properties amounted to NOK ‐1 524.4 million in 2023 (NOK ‐343.2 million in Norway, NOK 129.0 million in Sweden and NOK ‐1 310.2 million in Denmark). The valuations are corresponding to an average net initial yield of 5.1% (4.7% in Norway, 5.7% in Sweden and 4.7% in Denmark), 39 basis points above 2022, influenced by increasing cap rates and interest rates. All assets, except Emporia, decreased in value due to increasing cap rates and interest rates. Emporia is benefiting from a dominating position in southern Sweden and currently also enjoying a high level of cross‐border trade to Danes, due to the weakened SEK.