Norwegian Property ASA has signed the final agreement to acquire a portfolio of 11 office properties in Nydalen and two office properties at Økern for NOK 2,199 million from Rasmussengruppen. The following features are among Norwegian Property's reasons for making this investment:
 
  •           Rents are expected to increase substantially in the Nydalen area in the years to come
  •           Nydalen is one of the most attractive business- and campus areas in Oslo
  •           Nydalen is increasingly an important residential area in Oslo
  •           Expected return on equity for the acquired property portfolio of close to 14 %
    •  
    The property portfolio consists of approximately 116,200 square meters of mainly office premises. The estimated gross rental income for 2007 is approximately NOK 135.2 million. The tenants include Get (former UPC), NetCom, TDC Song and the Norwegian State Educational Loan Fund (Statens Lånekasse) as well as other solid and reputable companies. The four largest tenants account for approximately 55% of the portfolio's total rental income. 94% of the total portfolio is CPI adjusted annually and the average remaining contract duration is around 4.9 years. Around 1,460 parking spaces, both in- and out-door, are included in the acquisition. There is 2.5% vacancy in this property portfolio. The properties were purchased at a net yield of 5.8%. Following the acquisition, Norwegian Property is the 2nd largest property owner in the Nydalen area.
     
    Norwegian Property believes that the property portfolio has been purchased at an attractive yield level and with considerable rent level upside potential. The average office rent per square meter in the portfolio is approximately NOK 1,270 and according to reputable property brokers, current market rent level in Nydalen is around NOK 1,470 per square meter. The upside for Norwegian Property is evident due to the fact that 24%* of the lease contracts expire within 3 years and approximately 67%* within 5 years. One of the properties in the portfolio has a development potential of approximately 6,000 square meters where the groundwork already has been carried out .
    The Nydalen area is one of the most attractive business areas in the city of Oslo. Around 300 companies are located in Nydalen with more than 10,000 employees. In 2005, the Norwegian School of Management (BI), which has approximately 19,000 students moved to Nydalen. The infrastructure in Nydalen has been significantly upgraded during the last few years and now comprises high-ways, trains and also a very efficient subway.
     
    Both commercial and residential property prices have been rising rapidly in the area during the past few years. Due to this Norwegian Property expects a positive valuation development for the properties in the purchased portfolio.
     
    "This is a great deal for Norwegian Property ASA comprising 13 attractive properties in one of the most promising areas in Oslo. With more than a thousand new residential units to be constructed in the near future and the Norwegian School of Management (BI) as well as all the companies located in Nydalen, this area has a lot of potential for the future. Market reports project the market rent in Nydalen to be at a level of NOK 1,800-1,900 within a few years. This transaction will give the investors a return on equity in line with the company's overall targets.", says CEO Petter Jansen in Norwegian Property.
     
    The transaction will be completed in January 2007.
     
    See also the attached presentation of the property portfolio.
     
    Further information from
    Petter Jansen, president and CEO, Norwegian Property ASA, tel: +47 9009 8728
    Dag Fladby, Chief Investment Officer, Norwegian Property ASA, tel: +47 9089 1935
     
    Norwegian Property in brief
    - Invests in attractive and centrally-located commercial property in Norway's largest cities.
    - Today, total investments amount to about NOK 17.2 billion in 55 quality properties.
    - Total area of about 718,000 square meters provides an estimated annual gross rental income for 2007 of NOK 1,058 millions.
    - Portfolio contains almost no vacant space and has an average remaining lease term of about 7.1 years.
    - Listed on the Oslo Stock Exchange in November 2006 under the ticker NPRO. The company has about 1,000
      shareholders whereof almost 50% of the shares are controlled by foreign investors.
    - Additional information about the company is available on www.norwegianproperty.no or www.npro.no



    * Based on rental income