Eiendomsspar (EISP) Q2 2024 earnings summary

Executive summary

• Norwegian property market in H1 2024 saw transaction volumes of NOK 40 billion, above the 2010–2020 average, with activity concentrated in fewer, larger deals.

• Office segment made a strong comeback, accounting for 48% of transaction volume, while logistics and residential followed.

• Hotel and residential rental markets remained robust, with strong occupancy and rising prices.

• Rental income increased to NOK 543.7 million for January–June 2024, up from NOK 517.9 million year-over-year, driven by CPI adjustments and higher hotel turnover rents.

• Both companies distributed significant dividends and made strategic property and share acquisitions.

Financial highlights

• Eiendomsspar's rental income rose 5% year-over-year to MNOK 543.7 in H1 2024; pre-tax profit fell 37% to MNOK 410, mainly due to lower sales gains.

• Victoria Eiendom's rental income increased 6% to MNOK 127.0; pre-tax profit surged 32% to MNOK 283.8, driven by higher dividends from Eiendomsspar.

• Cash flow per share up 2% for Eiendomsspar and 32% for Victoria Eiendom; cash flow before tax per share rose to NOK 15.46.

• Net asset value (VEK) per share at period end: NOK 584 (Eiendomsspar) and NOK 1,026 (Victoria Eiendom).

• Liquidity reserve increased to NOK 2,499 million as of June 30, 2024.

Outlook and guidance

• Office leasing market expected to become more challenging in 2025/2026 due to new supply.

• Hotel bookings remain strong, with increased foreign guest nights and limited new capacity in Oslo.

• Retail market shows mixed performance, with luxury segments outperforming and some chains facing restructuring.

• Moderate growth in housing prices and continued strong demand for prime retail and office locations are expected.