ANNUAL REPORT 05 1 THIS IS ENTRA EIENDOM AS 3 COMMENTS OF THE CHIEF EXECUTIVE OFFICER 4 2004 HIGHLIGHTS 6 KEY FIGURES AND FINANCIAL INFORMATION 14 THE PROPERTY PORTFOLIO 17 ASSESSMENT OF MARKET VALUE – EVA 22 ANNUAL STATEMENT 32 ANNUAL ACCOUNTS 37 ACCOUNTING PRINCIPLES 42 NOTES 55 CORPORATE GOVERNANCE 66 OUR BUSINESS – STRATEGIC FOCUS 76 PROPERTY INDEX 81 CONTACTS In 2004, in collaboration with Tank Design, Entra Eiendom decided to publish a book about some of Entra’s finest properties in Norway. We sent Chris Harrison, one of Norway’s most exciting photographers, on a mission from Bodø in the north to Kristiansand in the south, in order to document the interiors and exteriors of our diverse property portfolio. He came back with a large number of photographs, which formed the basis for the book «M2 – ET STREIFTOG GJENNOM ENTRA EIENDOMS BYGNINGER». In November 2005 the 145-page book was ready, full of fantastic photographs and with texts written by Mona Jacobsen, Entra’s Director of Communications. Chris was born and bred in Jarrow, in the north-east of England, and in this annual report we have asked him to tells us a little bit about his encounter with our various buildings, which between them encompass a large part of Norway’s architectural history. You can see the results of this between chapters, where Chris has worked with Tank to create small, personal documents telling about his journey, about his meetings with some of our employees on site and not least about the trials and tribulations of being a photographer in the unpredict- able Norwegian weather. His route went from Oslo to Trondheim, Bodø, Risør and Moss. Welcome to a whirlwind tour of some of Entra Eiendom’s buildings! Entra Eiendom AS was established on 1 July 2000. The company Our main area of focus is office properties. In this market we is one of Norway’s largest property companies, with a total are one of the leading players in the country. We emphasise the property portfolio of 957,000 m2. importance of developing solutions with good layouts that use The Group is engaged in the development, letting, mana- space effectively, with the key being our customers’ ongoing gement, operation, sale and purchase of real estate in Norway. requirements for adaptation and organisational change. In addition to Entra Eiendom AS, the Group comprises Entra Customer focus is a key, guiding element in the future Service AS, Universitetsgaten 2 AS, Biskop Gunnerusgate 14 AS, development of the company. Instituttveien 24 AS, Kr. Augustsgate 23 AS, Nonnen Utbygging Entra Eiendom sees long-term customer care as a strategic AS, Langkaia 1 AS, Entra Kultur 1 AS and Krambugata 3 AS, process for retaining customers and gaining access to new Kjørbo Parken AS, Kunnskapsparken Drammen AS (60%) and projects. Kristiansand Kunnskapspark Eiendom AS (51%). Since we were established in 2000, our stated aim has been The company also owns shares in UP Entra AS, Oslo S to be good hosts for our tenants. Utvikling AS, Follo Politihus AS, Kunnskapsbyen Eiendom AS The company has a sound basis for future development and Youngstorget Parkering AS. through our established customer portfolio, 86 percent of whom The Norwegian Government, through the Ministry of Trade are in the public sector, with relatively long-term leases. and Industry, owns all of the shares in the company. The Board Entra Eiendom AS’s main focus is on centrally located consists of five external members and two employee represen- properties of a high standard. Prestigious premises shall make tatives. Entra Eiendom AS operates in direct competition with up a small proportion of our property portfolio. The company private players on a commercial basis. The company is fully shall primarily operate and be a major player in the Oslo fjord financed in the private market. region, Bergen, Trondheim, Stavanger, Kristiansand, Tromsø and Since it was created, Entra has grown its balance sheet from Bodø. These are the regional centres where long-term growth a value-adjusted NOK 4.4 billion to approx. NOK 15 billion. The is expected to be above the national average. They are therefore book value of total assets has followed a similar trend, which is a considered to offer the most interesting investment opportu- result of the investments made by the company. nities for the company’s future growth. Entra’s head office is situated in Oslo. The company’s property portfolio and total rental income The company is organised into four regions: Eastern Norway, has increased significantly since it was established. Southern Norway, Western Norway and Central Norway. The regional offices are located in Oslo, Kristiansand, Bergen and thE company’S ovErall aimS StatE that Entra Trondheim. EiEndom aS Shall • have satisfied customers Entra EiEndom aS’S buSinESS concEpt iS • provide shareholders with a market rate of return to offer customised premises and services to public • be a leading player in its prioritised markets and private businesses in Norway. • offer challenging and attractive employment opportunities 9>?;<;N;9KJ?L;E<<?9;H 8e\^?±YfaXf 9>?;<<?D7D9?7BE<<?9;H :?H;9JEH?DL;IJC;DJ7D:<?D7D9; >]X__Bggb?TeffXa B_XF°g[eX :?H;9JEHE<9ECCKD?97J?EDI :?H;9JEHE<IJH7J;=O @baT=TVbUfXa EhaXB_f± :?H;9JEH>KC7DH;IEKH9;I FiXeeXI~ZTa :?H;9JEHFHE@;9JI7D::;L;BEFC;DJ :?H;9JEHE<C7HA;J J;9>D?97B:?H;9JEH :?H;9JEH;DJH7I;HL?9; GbebWW5±lfgTW 4aaX>Tg[e\aXF_haZ~eW A\_f9eXWe\^F^Th 8WiTeWFgXaWT_ Entra Eiendom AS was able to celebrate its fifth anniversary in doing a good job in the market. Conversely, a company that only 2005. During five years that have passed since the company was thinks about the market and customers, but fails to satisfy the nor- established, we have accomplished our task of a market return on mative expectations of society and of its customers, will find it dif- invested capital. We have achieved good financial results. What ficult to maintain a good reputation and trust over the long term. creates added value – what produces profitability? Entra aims to satisfy the three most important elements of its We believe that companies and organisations that take social responsibility to society: creating financial added value, exercising responsibility, will achieve a competitive advantage. A good social responsibility and safeguarding the environment. reputation, based on genuine social responsibility, improves We have a social responsibility to our employees in terms your reputation amongst customers, competitors, investors and of their well-being, sickness absence, senior policies and acting society at large. All stakeholders are increasingly concerned ethically. We have a responsibility to our customers in terms of about how companies and organisations operate. Companies environmental and social investments, questions of aesthetics and act and are perceived as an important part of society, and they cultural conservation, and the use of efficient and modern solu- operate not just in a market, but also in a culture, in a local com- tions. We need to develop our routines to ensure that we avoid munity and within a political system. This means that ethics, breaking our own rules indirectly through our suppliers. Last, politics and business are becoming increasingly interwoven, but not least, we have a responsibility to society which involves and trust is becoming ever more important in competition. A supporting art, culture and sport, and listening to the needs of the range of new players, who until a few years ago were hardly even local community. on the radar, are now demanding that companies should act in Our environmental responsibility applies to issues such as particular ways: from shareholder focus to social responsibility! energy consumption, waste and pollution, aesthetic and architec- Few companies are as unequivocally based on exercising social tural environmental protection, and recycling of equipment. responsibility as Entra. The parliamentary bill St.prp. 84 (1989– For Entra Eiendom this primarily means: 99) relating to the establishment of Entra, under the chapter • Being conscious of our responsibilities as the manager «The State as Client and Property Manager in a Social of government properties Perspective», states that the company shall • Building up a reputation based on us exercising genuine • be a driving force in the development of a more environ- social responsibility mentally friendly building and construction industry • Acting and being perceived as an important part of society • set a good example in areas that relate to town and regional • Not just acting within a market, but also within a culture, development, cultural conservation, research and other local community and political system development activities • facilitate pilot projects for the testing of new technologies Entra aims at fulfilling the company’s social responsibilities in a that will provide a solid foundation for setting new comprehensive manner. Our ambition is to integrate social respon- standards within the sector sibility into daily business. We still have a way to go. Nevertheless, • have a responsibility for architecture and aesthetics we are proud to say that through this work the company has to some extent achieved a positive profile in society. We are con- For Entra it is essential to have the trust of its customers, owners, vinced that the consequences of showing social responsibility are employees and of society as a whole. • A better reputation amongst customers, competitors, The sociologist Talcott Parsons posited the theory that in investors and society at large all situations where they face a choice, people will make an • Greater trust amongst our customers and suppliers assessment based on two fundamental criteria: the functional • Increased added value properties of the product, service or company as they relate to the customer’s specific requirements, as well as its normative pro- Ethics, politics and business must be seen in the same context perties.