1 Steen & Strøm June 2009 2 Contents 1 Scandinavian shopping centre market 4 2 Scandinavian macro outlook 15 3 Steen & Strøm overview 24 4 Shopping centre portfolio 33 5 Development projects 40 6 Financials 48 3 Scandinavian shopping centre market 4 Scandinavia – retail turnover Country Retail Population Shopping Market turnover cemtre share Norway 360 billion 4,5 mill. 115,0 billion 32,0 % Denmark 217 billion 5,2 mill. 50,0 billion 23,0 % Sweden 392 billion 8,9 mill. 129,0 billion 33,0 % Amounts ex. VAT in NOK, DKK and SEK. Source: Kvarud Analyse/SSB (Statistics Norway), Handelns Utreckningsinstitut (HUI), SCB (Statistics Sweden) and Danmarks Statistik (Statistics Denmark) 5 Scandinavian retail market Source: Leimdorfer The Scandinavian retail market has had positive growth since 2000 Consumer confidence has fallen in Scandinavia, but is still higher than in the Euro area 6 Center market in Norway Facts sheet – The entire center market in Norway • Center Market turnover is approx 115 billion NOK ex. VAT • This is a share of the total retail turnover in Norway of approx 32% • In Norway there are approx 390 shopping centers with approx 3,7 billion sq.m. and a total of approx 11500 stores. • The largest shopping centre owners in Norway are Steen & Strøm, Storebrand, Olav Thon, Vital, Amfi and Sektor 7 Shopping centres in Norway: - managed and owned 8 Center market in Denmark Facts sheet – The entire center market in Denmark • Center Market turnover is approx 50 billion DKK incl. VAT • This is a share of the total retail turnover in Denmark of approx 23% • The 103 largest shopping centres in Denmark have a total of approx. 4000 stores, approx 300 million customers annually and a total floor space of 1.4 million sq.m. 9 Shopping centres in Denmark Owned by Danica and Owned by others Managed by Steen & Strøm: Frederiksberg Centret Helsingør Bycenter Fisketorvet SlotsArkaderne Farum Bymidte Lyngby Storcenter Rødovre Centrum Nørrebro Bycenter Rosengårdscentret Hovedbanegården Albertslund Centrum AmagerCentret Hundige Storcenter Hvidovre Stationscenter Ballerup Centret Glostrup Storcenter Hørsholm Midtpunkt Ishøj Bycenter Stenløse Centret City 2, Tåstrup Viby Centret VestsjællandsCentret Sct. Mathias Marked, Viborg City Vest, Århus Nørreport Centret, Holstebro Randers Storcenter Aalborg Storcenter Kolding Storcenter Næstved Storcenter Storcenter Nord, Århus Owned by Steen & Strøm Ro’s Torv, Roskilde Bruun's Galleri HerningCentret Field's Copenhagen Bryggen 10 Steen & Strøm Denmark - Management Friis Konsulentopgave Randers Storcenter Helsingør Bycenter City Vest, Århus SlotsArkaderne, Hillerød Bruun’s Galleri, Lyngby Storcenter Nørrebro Bycenter Hovedbanegårdens Shoppingcenter AmagerCentret Bryggen, Vejle, Field’s Copenhagen Hvidovre Stationscenter Kolding Storcenter Glostrup Storcenter Vestsjællands- Ishøj Bycenter Centret, Slagelse City 2, Taastrup 11 Center market in Sweden Facts sheet – The entire center market in Sweden • Center Market turnover is approx 500 billion SEK incl. VAT • This is a share of the total retail turnover in Sweden of approx 33% • In Sweden it is about 350 shopping centers with approx 6,2 million sq.m. • The largest shopping center owners in Sweden are Atrium Ljungberg, Boultbee, Unibail Rodamco, Diligentia, Steen & Strøm and Eurocommercial Properties. 12 Steen & Strøm, Sweden • Kupolen (Borlänge) • Mitticity (Karlstad) • Marieberg (Örebro) • Sollentuna (Stockholm) • Hageby (Norrköping) • Torp (Uddevalla) • Etage (Trollhättan) • Allum (Partille) • Familia (Helsingborg) 13 Regulation governing the development of new retail surfaces • New regulations set physical limits on the creation and extension of shopping centres • The creation and extension of a shopping center is subject to conditions set out in the approved derpartmental plans, which contain the rules for the location of shops and Norway other services. • In regions that are not governed by a departmental plan, the creation or extension of a center covering more than 3,000 sg.m. is prohibited Sweden • No planning restrictions for the development of retail surfaces, city counsils being selective • The Planning Law (”PA”) imposes restriction on the creation and extension of shopping centers Denmark • As a general rule, new shopping centers must be located in city centers. • General stores may not exceed 3,500 sq.m. and specialised stores are limited to 2,000 sq.m. 14 Scandinavian macro outlook and retail market 15 Key elements Q1 •Falling economic activity in Scandinavia •Capital goods are struggling •Steen & Strøm better than the market in general •Food retailers boost turnover growth •Further extensions, but limited number of new projects 16 Shopping centres reap market shares Shopping center turnover in percentage of the total retail turnover, private consumption and household consumption 2008 35 31,7 30 26,3 25 20 14,9 15 Precentage 10 5 0 Shopping centre turnover Total private consumption Household consumption Source: Kvarud Analyse and SSB (Statistics Norway) 17 Private consumption 2007-2010 Growth in private consumption 2007-2010 7 6 5 4 3 2 Percentage 1 0 2007 2008 2009 2010 -1 -2 -3 Norway Sweden Denmark Source:Kvarud Analyse /Source: SSB (Statistics Norway), SCB (Statistics Sweden) and Danmarks Statistik (Statistics Denmark) 18 Forecast: Norway recovers rapidly Private consumption Statistic Estimates 2006 2007 2008 2009 2010 2011 2012 Norway 4,8 % 6,0 % 1,5 % -0,4 % 3,1 % 4,3 % 4,6 % Denmark 4,4 % 2,4 % -0,1 % -2,5 % 2,3 % Sweden 3,0 % -0,2 % -1,8 % 1,5 % Source: SSB (Statistics Norway), SCB (Statistics Sweden) and Danmarks Statistik (Statistics Denmark) 19 Sweden hit by higher unemployment rates Unemployment rate Statistic Estimates 2006 2007 2008 2009 2010 2011 2012 Norway 3,4 % 2,5 % 2,6 % 3,7 % 4,7 % 4,7 % 4,2 % Denmark 3,9 % 2,8 % 1,8 % 3,3 % 4,4 % Sweden 6,2 % 6,1 % 8,7 % 10,7 % Source: SSB (Statistics Norway), SCB (Statistics Sweden) and Danmarks Statistik (Statistics Denmark) 20 Retail turnover Q1 2009: Norway and Sweden stand out Changes in retail turnover 1Q 2009 2 1,5 1 -0,1 0 Norway Sweden Denmark -1 -2 Percentage -3 -4 -4,4 -5 Source: Steen & Strøm 21 Turnover per retail sector: Widespread differences Changes per retail sector 10,0 % 5,9 % 5,0 % 5,0 % 2,5 % 2,5 % 2,4 % 0,4 % 0,0 % Food retailing Clothes and shoes Interior-1,5 % -1,1 %Cafeterias -2,0 % Other shops Total -2,4 % -2,6 % -2,6 % -3,2 % and restaurants -4,0 % and service -5,0 % -4,1 % -4,5 % -10,0 % -10,9 % -15,0 % -17,8 % -20,0 % Denmark Sweden Norway Source: Steen & Strøm 22 Expected retail sales growth 2007-2017 Expected retail sales growth 2007– 2017 – 2017 <10% 10 – 20% Sweden 21 – 30% Norway 34% (60%) 30% (43%) 31 – 40% Finland >40% 32% (51%) Denmark 42% (32%) Ireland UK 33% (73%) 24% (50%) Germany Belgium 6% (3%) 24% (22%) France Luxembourg 28% (37%) 34% (45%) Austria Switzerland 5% (1%) Portugal 6% (6%) 51% (57%) Italy 11% (8%) Spain 21% (40%) In brackets: Historic retail sales growth 1996 – 2006–2006 Source: King Sturge 23 Steen & Strøm overview 24 Unique retail real estate platform • Steen & Strøm owns and partly owns 30 shopping centres located in attractive trade areas in Scandinavia > 18 in Norway > 9 in Sweden > 3 in Denmark • Total tenant turnover of NOK 16 billions • Total net lettable area is 714,200 m2 • 26 centers under management for third parties > 12 in Norway > 14 in Denmark Inhabitants per km2 0 - 4 5-24 25 -249 250 - 999 1,000+ 25 Steen & Strøm: Developer, manager and owner in Scandinavia Strong economic and retail environment in the Scandinavian region Scandinavia’s leading shopping centre organisation with a Unique retail real estate proven financial track portfolio in Scandinavia record Strong growth and Largest shopping centre development potential operator in Scandinavia 26 History of Steen & Strøm 1. DEPARTMENT STORE - BASIS FOR THE COMPANY 1797-1991 ● Steen & Strøm was originally etsablished as a little wine shop and general store in Oslo in 1797. ● During two centuries it was developed to the leading department store in Norway. 2. AGGRESSIVE EXPANSION IN NORWAY ● Steen & Strøm Magasinet was taken over in 1992 by Agora Eiendom (tbn Steen & Strøm) 1992-1995 ● Steen & Strøm was listed on the Oslo Stock Exchange in 1994 ● Rapid expansion in Norway (bought more than 20 shopping centres) 3. ESTABLISHED A CONGLOMERATE BUSINESS MODEL ● Steen & Strøm sold 11 shopping centres to Storebrand in 1996 and entered into a long term management agreement for 1996-1998 the management of these centres ● Invested in a construction company, insurance company, sport retail chain, group of restaurants etc. ● Steen & Strøm entered into an agreement with Danica relating to the asset management of their shopping centre portfolio 4. CONSOLIDATION AND EXPANSION IN SCANDINAVIA 1999-2003 ● Initiated a process to streamline itself as a Scandinavian shopping centre company ● Further expansion into the Scandinavian market 5. INCREASED DEVELOPMENT ACTIVITIES 2004-2008 ● Several large new development and redevelopments were initiated and completed in Norway, Sweden and Denmark ● Canica acquired 100% of the shares in 2007, and delisted the company from Oslo Stock Exchange 27 Strategy Focus on Scandinavia Securing long-term Having a geographically growth “Seek to optimize the balanced portfolio total portfolio of leading shopping centres and maximize the profitability of each property” Owning and operating Securing the right balance leading large shopping between stabilised assets centers in densely and development projects populated growth regions 28 Steen & Strøm value