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STEEN & STRØM‘S ANNUAL REPORT 2022

Steen & Strøm showed positive recovery during 2022. With a portfolio of ten shopping centers in Scandinavia, Steen & Strøm has made a good recovery following a 2021, which was affected by lockdown of shopping centers in Denmark and Norway and several restrictions in Sweden during the first semester of 2021 due to the pandemic.

Despite facing continuous macro challenges including energy crisis due to Russia’s war against Ukraine, high inflation, and overall uncertainty, Steen & Strøm has managed to mitigate the financial impacts of the ongoing crisis, and thus maintaining a solid financial position.

The portfolio comprises resilient, large, and modern assets, adapted to consumer needs and expectations. This has been confirmed during 2022, despite the ongoing, economic challenges, with retailer sales approaching pre Covid levels (‐1,8% vs. 2019), a relatively moderate impact on vacancy levels (5.5% as of December 31st, 2022) and overall satisfying collection rates (98.8% as of today). Seven assets were divested during 2021. Three assets were divested during 2022.

Net rental income on a like‐for‐like basis increased by +2.4% in 2022, mainly following last year lockdowns in Norway and Denmark, increased variable revenues, indexation and less discounts, to some extent off‐set by general increases in 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 +2.2% and the reversion rate was +0.9% in 2022.

Net interest‐bearing debt (not including lease liabilities) decreased by NOK 1 763.1 million to NOK 7 468.7 million 31 December 2022 and is reflected in the Group’s Loan‐to‐Value of 26.2% (29.1%). The average cost of debt was 1.6% in 2022 (1.7%)

Total change in fair value of investment properties amounted to NOK ‐1 027.5 million in. The valuations are corresponding to an average net initial yield of 4.7, 20 basis points above 2021, influenced by increasing cap rates and interest rates. All assets in Sweden and Denmark decreased in value due to increasing cap rates and interest rates.