Ferd Real Estate – 2015 summarised
- Several construction projects completed: the Swix building in Lillehammer, the offices for Lundin in Lysaker and the Aibel building in Bergen.
- New rental agreement entered into with Indra Navia and approval to start construction of a new 14,000m2 office building to be called Asker Tek in Asker.
- Property purchased for redevelopment and the construction of a new 10,500m2 commercial building at Østensjøveien 16, Helsfyr, Oslo.
- Purchase agreement entered into for an existing commercial building at Bergerveien 12, Billingstad, Asker, with the possibility of conversion to residential use in the future.
- Sale of the 25,000m2 office building constructed for Aibel in Bergen.
- Sale of Elopak’s production complex in Århus, Denmark.
- New financial investment in residential real estate in Sweden totalling approximately NOK 150 million.
Ferd Real Estate is an active real estate investor, involved both in real estate development and asset management, with a particular focus on the market segments of residential development, office premises and warehouse/logistics facilities.
Operations and returns
At the end of 2015, the equity value of the portfolio was NOK 1.92 billion. The portfolio generated a return on equity for 2015 of 17.3%.
2015 was shaped by a busy market for commercial property transactions that saw non-Norwegian investors assert themselves as buyers on a serious scale. At the same time, large regional differences arose in the office market, with areas with many oil-related companies experiencing higher office vacancy rates and stronger downward pressure on rental prices than other areas such as Oslo’s central business district.
With regard to the residential market, the high level of demand and the low availability of new and used residential properties in the Oslo region led to continuing strong growth in residential property prices. However, unemployment rose in regions with many oil-related companies, which led to demand for new residential property decreasing and consequently to weaker prices.
Ferd Real Estate has eight employees and is organised into the areas of development/projects, investment/finance, markets/rental and property management.
Residential real estate development portfolio
- Tiedemannsbyen, Ensjø:
The Tiedemannsbyen project has a development potential of approximately 1,400 residential units, and will be developed over a period of between 10 and 15 years. The first 660 units are being developed by Tiedemannsbyen DA, while Tiedemannsfabrikken AS will develop the following 350 units.
Tiedemannsbyen DA is owned 50/50 by Ferd Real Estate and Skanska Bolig, while Tiedemannsfabrikken AS is owned 50/50 by Ferd Real Estate and Selvaag Bolig. The remaining areas are 100% owned by Ferd Real Estate.
The third and final sales phase for Petersborgkvartalet, comprising 65 residential units of a total of 210, was launched in the spring of 2015. Petersborgkvartalet is located in a quiet and attractive area with good access to recreation areas and public transport.
The first sales phase of Utsiktskvartalet, comprising 106 residential units of a total of approximately 251, was launched in the autumn of 2015.
In total 115 residential units were sold in Tiedemannsbyen in 2015.
Ferd Real Estate is developing a residential area in collaboration with Mestergruppen at Bråtejordet, adjacent to Strømmen station. The project will comprise approximately 350 townhouses/detached houses/apartments. The first sales phase was launched in the autumn of 2014 and construction work on the first 40 units started in the summer of 2015. New sales phases for the project are being launched continuously.
Commercial property portfolio
Ferd Real Estate developed and completed several commercial property projects in 2015.Aibel’s new office building in Bergen of approximately 25,000m2 (including parking), which was completed in March 2015, is a new and future-oriented office complex constructed with an emphasis on a number of environmentally friendly and energy-efficient solutions. The building has an energy efficiency class of A and is certified as ‘Very Good’ on the BREEAM scale, and represents the first phase of what will become a modern business park at Kokstad (Kokstad Business Park). The building was sold to Bergen-based MTB Gruppen in April 2015 via a company set up by Pareto Project Finance.
Swix Sport’s new mixed-use building of approximately 10,000m2 was completed in June 2015. The building, which is located near Lillehammer, includes a visitor centre, a shop selling Swix products and a Swix museum, as well as a factory, a warehouse and a logistics centre.
The renovation of Strandveien 4-8 for Lundin, which leases approximately 16,600m2 of the total 18,100m2 available, was completed in August 2015. The property has an attractive location close to the transport interchange at Lysaker, and has good access to the E18.
After Indra Navia signed a rental contract for approximately 6,600m2 with Ferd Real Estate in October 2015, approval was given to start the construction of an office building of approximately 14,000m2 to be called Asker Tek, in Asker. Construction starts in the first quarter of 2016.
Ferd Real Estate has three sites intended for warehousing and logistics purposes at Gardermoen, Vestby and Mastemyr close to Oslo. In addition, Ferd Real Estate owns 50% of Frogn Næringspark AS, which has a 95,000m2 site intended for warehousing at Måna, immediately adjacent to the entrance to the Oslofjord tunnel. These sites represent total development potential of around 180,000m2.
Virtually all available space was fully let at the start of 2016, including the office space at Ensjø and the factory buildings that are let on leases determined by the demolition program. Ferd Real Estate’s commercial rental portfolio amounted to approximately 120,000m2 at the end of 2015.
Financial Investment portfolio
Ferd Real Estate continually evaluates financial investment opportunities both in Norway and internationally where the underlying asset is real estate. We made investments totalling NOK 150 million of this type in 2015.
The overall unemployment rate in Norway is expected to increase slightly in 2016, but with large regional differences. This will influence both the market for commercial real estate and the market for residential real estate, and we will see sizeable regional differences in the effect it has on these markets.
The expectation is that residential property prices will fall somewhat in regions with many oil-related companies and that the office market in such areas will make weak progress. Other regions, however, are expected to grow at a more normal rate. The exception to this is the Oslo region where we think the increase in unemployment will be more limited. This, coupled with the prospect of persistently low interest rates, will probably lead to the region continuing to see strong price growth in both the office and residential markets.