Increased occupancy and higher rental income

A strong rental market, especially for hotel properties, resulted in an rental income of NOK 33.6 million in the second quarter, representing a 12 per cent increase from NOK 29.9 million in the same
period of 2021.

The market value of the property portfolio totalled NOK 2.7 billion at 30 June 2022, which is NOK 90.9 million higher than at the same time in 2021. Yield effects from increased long-term interest rates resulted in negative total portfolio value adjustments in the second quarter of NOK 81.3 million. This translated into a loss before tax of NOK 89.2 million, versus a profit before tax of NOK 1.7 million in Q2 2021.

As of 30.06.2022 the occupancy of the management portfolio was 91.6 per cent, up from 90.3 per cent one year earlier. The increase is mainly related to higher occupancy for properties within Green Office due to changes in the property portfolio, including completion of Polymer Exploration Centre in Porsgrunn, as well as new lease contracts. The company completed the sales of two non-core properties in the second quarter. Moreover, development of the Fornebu concept building, Grow, was completed.

During the quarter, the company was renamed Recreate ASA. The name Recreate is a sign of international ambitions, but first and foremost it alludes to giving new life or energy to something, while at at the same time giving associations to recreation.

CEO and founder of Recreate ASA Emil Eriksrød comments on the performance in the second quarter of 2022:

“I am pleased to announce that the second quarter of 2022 has delivered the company’s highest rental income to date. This comes as a result of a strong letting market with increased rental income for our commercial and hotel properties. We completed two property sales aligned with our strategy to allocate more resources towards sustainable, modern, and attractively located properties. Moreover, one key development project, Fornebuveien 1-3, was completed during the second quarter. The Fornebu concept building, Grow, has one of the most attractive and central locations outside of Oslo.

Today’s global geopolitical situation has led to increased uncertainty concerning macroeconomic conditions, which may cause increased volatility going forward. In addition, the market for commercial properties was impacted by higher yields in the second quarter, driven by increased long-term interest rates. This resulted in an overall negative value adjustment for the Group’s property portfolio.

The trend towards more flexible and efficient office spaces continues to boost demand for the wholly owned flex space provider Evolve. Environmental footprint, innovation and technology have become essential features in the decision-making process for tenants. Our letting activities are going well, and with our attractive portfolio of sustainable properties centrally located in urban areas and city hubs in Norway, Recreate is well-positioned to meet market demand.”

Please find enclosed the report and presentation for the first half-year of 2022.

2022 Q2 Quarterly report