Good morning all and welcome to Entra's second quarter presentation here in Oslo. On the front page here, you can see our building in Schweigaards gate 16, where we in the quarter signed a 12-year lease contract for the entire building with Coop.

Let's move on to some highlights. Rental income of 781 million in the quarter, that is 2.4% down from last quarter, or 1.4% up from same quarter last year.

Net income from property management of 320 million this quarter, which is down 37 million compared to last quarter due to lower rental incomes and higher operating and financial costs. Net value changes came in with a negative of 1.2 billion this quarter, mainly driven by the negative value changes on our investment properties of 1.1 billion.

Leaving us then with a loss before tax of 855 million in the quarter—sorry, that's loss after tax. The NRV per share this quarter stands at 163.3 and cash earnings per share of 3.54 for the first half of this year.

It's been a strong quarter in respect of letting with a positive net letting of 131 million in the quarter. We have started up one refurbishment project in Oslo and one in Bergen.

If we look at operations, as I already said, it's been a very strong quarter in respect of letting and I'm pleased to see that we are benefiting from the work and efforts put down through 2025, where we also strengthened our letting and marketing capabilities to meet a slightly tougher letting market. We signed new and renewed leases for 185 million in the quarter.

Out of this, as much as 175 million is new contracts, which will feed into a rental income bridge going forward. Contracts with a rental income of 43 million have been terminated in the quarter.

Out of this, approximately one-third has already been resigned as part of the Coop contract, and approximately one-third of the tenants in the terminations have chosen to resign with Entra. If we take a look at the largest contracts signed in the quarter, you can see that Vækstveien 1 we have signed Multiconsult for 16,400 square meters, and in Schweigaards gate 16 the Coop contract for 15,500 square meters, in addition to OPAC and DeepOcean in also two of our buildings at Skøyen.

At our cluster in Skøyen, we have had over the past year 29,000 square meters of terminations due to public tenants choosing to move to less expensive locations. I'm very pleased to see that we have now been able to turn that around when we have signed more than 24,000 square meters in the first half in the Skøyen portfolio.

Good momentum for us there. If we take a look at our average lease duration, it stands currently at 6.1 years, and our share of public tenants is currently slightly down at 48%, following the two large contracts signed with Coop and Multiconsult.

Our occupancy is down from 94.3 to 93.3 in the quarter. As I have commented on in previous quarters, we expect to see more fluctuations in our occupancy rates going forward.

This is explained by the three factors: that we have completed projects feeding into the management portfolio with different occupancy ratios; it also depends on the timing for when we start projects on vacated space; and thirdly, it depends on how the upcoming expiries, which already have been reflected in our rental income bridge, are relet. The increase in the vacancy this quarter is related to the portfolio in Sandvika in Bergen, following the negative net letting we had in the second half of '24.

In particularly, there are two assets here where we are working on a product development and the profitability, which has now then been included in the vacancy. We do expect to see some further near-term pressure on occupancy before stabilization, driven by the upcoming expiries not yet relet or ready for projects and project timing at the moment.

All of this is, however, reflected in our rental income bridge. The two large contracts signed this quarter contributes in securing in occupancy in the longer term with effects mainly from 2028 and onwards.

As mentioned, we've started two refurbishment projects in the quarter. First one here in Vækstveien 1.

This is a building which we in 2024 signed a large lease contract with Yara, and we were at that point planning to start a refurbishment project for Yara. One year later in 2025, we chose to terminate that contract with Yara as we got the opportunity to prolong with them in their existing headquarters building for a new 10-year period with no capex requirements.

Since that, we've been working on reletting this building and pleased now to see that we have reached an occupancy ratio of 90%, having signed both the Norwegian Public Service Pension Fund and Multiconsult in this building. This means that we now are preparing to start this refurbishment, and the remaining capex here is around 365 million, leaving us with an expected yield on cost for this building of 5.6%.

The project will be completed in two phases, where the Norwegian Public Service Pension Fund will move in during the second quarter of '27 and Multiconsult in the first quarter of 2028. Moving on to the second refurbishment project, which is in Bergen in Kaigaten 9.

This building is located right next to the central bus terminal and train station in Bergen. It's also the neighboring building to our ongoing project in Nansensetergaten 4.

You can actually see Nansensetergaten 4 as the white building in the back of this picture. This is a building where the Norwegian Tax Authorities have been temporarily sitting while they've been waiting for the project in Nansensetergaten 4.

Now we have let 24% of the space in this building and have started the refurbishment here. The remaining project cost here is 243 million and leaving us with a yield on cost on this project of 5.8% with an expected completion here in Q1 2028.

If we take a look at our list of ongoing development projects, it has now been expanded with these two refurbishment projects. The list totals now 101,000 square meters, including our JV project in Kristian Augusts gate.

Let me start by saying that all these projects are progressing according to plan at cost and on time. Limited changes since our last reporting.

We can see that Drammensveien 134, the occupancy is up to 80%, following the lease contract which was signed with OPAC. The total group remaining capex on this list of projects is around 700 million.

Then in addition to this, you have the redevelopment in Kristian Augusts gate 2, which here is accounted for on a 100% basis. Also this project is progressing according to plan.

Very pleased to see that it's been well accepted in the market since we launched it, a lot of interest for this product. The remaining capex on Entra's share here is approximately 600 million kroners.

Few words on the Norwegian economy. The Norwegian economy remains resilient and is well positioned through its strong public finances, supported also by the Sovereign Wealth Fund.

Economic activity is supported by private consumption, following now several years of real wage growth, as well as public sector demand. The growth estimates for this year have been revised slightly down after a soft first quarter held back by temporary effects.

If you look at the top right here, you can see that the employment growth has remained positive for Entra over—sorry, for Norway over time, and it's also expected to remain positive going forward. In Oslo, the employment growth has, however, been more or less flat over the recent years and not provided the same support to office demand.

If we look at inflation, it is now expected to remain above the Central Bank's target for a longer period. The inflation is driven by domestic cost growth and also renewed imported price pressure following the closure of the Strait of Hormuz.

The Norwegian Central Bank raised the key policy rate in May with 25 basis points to 4.25%. In their June report, the Central Bank further signaled that one more increase is likely this year, as you can see from the bottom right graph.

Now the June CPI came in just this morning, and it came in at actually 2.7%, which was 50 basis points below the Norges Bank's estimates. The Statistics Central Bureau have said that they've had some data trouble this morning, but it should be more or less in line with what they expect to verify later.

The core inflation has not been published yet. If we move on to the letting markets and dive into what we see from the market's data there.

Arealstatistikk data, which came out earlier this week, shows that the letting volumes signed in the second quarter were more or less in line with historical Q2 levels, and we also see that the upcoming expiry volumes for 2027 and '28 should continue to provide a good basis for letting activity also going forward. Now according to Entra's consensus report, which you can see from the top right, the vacancy for the overall Oslo market is now expected to increase towards 7.8% for the overall Oslo market throughout this year before it gradually trends downwards.

This is up with some 30 basis points compared to the consensus report last quarter. The majority of this vacancy is in the segments of smaller space and also related to more secondary locations or in older building stocks not meeting the current tenant requirements.

The limited new build volumes together with continued demand for centrally located high-quality buildings and CPI indexation continue to provide support for further rental growth. Our consensus report estimates around 12% market rental growth from 2026 to 2028.

If we take our take on the market, we clearly see now that where and how to locate the office has become a much more strategic decision for tenants, seeing that they're looking for central locations, high-quality offices to much larger extent as it also is a key enabler for productivity, talent attraction, and culture. At the same time, we clearly see that tenants are cost conscious in a market environment with a high level of uncertainty.

In many cases, this flight to quality and also more urban qualities is then combined with less space to keep the costs down. We are experiencing with more strategic decisions from our tenants that the processes take a lot more time, continue to take time, with as examples with both Coop and Multiconsult, we have been working for more than a year before finally closing those deals.

We're also seeing that our city center locations and also the two projects which we brought to market earlier this year have been launched with a lot of interest, and seeing that our products are located below the CBD segments, there is a good room also there to take out the market rental growth in that segment. The picture is more differentiated in the fringes and in secondary markets, depending on the local supply and demand balance in each market.

Competition remains pretty strong in the segment for smaller tenants below 1,500 square meters, where we typically also meet the sublease markets, while the larger tenants have limited options to choose from, particularly in the city center. A few words also on the transaction market.

Transaction activity slowed in the first half of 2026 as investor sentiment turned more cautious, driven primarily by the interest rate hike and also the increased uncertainty with the elevated geopolitical tensions. Transaction volumes for the commercial real estate market in the first half came in around 34 billion, and according to our consensus report now, expectations are that we will see a total volume around 80 billion for the full year, which is more or less in line with what we've seen the last couple of years.

The bulk of the transactions closed in the first half have been within the retail segment, residential portfolios, and logistics. 27% is related to offices.

This is mainly then the Anton B Nilsen portfolio. The current prime yield levels around 4.5% has been supported by equity-funded investor demand, which still can meet their return requirements at these yield levels, supported also by outlooks for CPI and rental growth.

There has been limited transaction evidence within the prime office segment during the first half. However, we know that a couple of the transactions which closed in the second quarter also confirm the prime yield levels of 4.5%.

From our consensus report, we can see that expectations are that prime yield now will increase somewhat from around the 4.5 towards 4.8% throughout the year in response to higher interest rates before reverting to a more gradual downward trajectory. Going forward, we expect that the prime and central office segment will screen increasingly more attractive to the broader investment market due to the favorable supply-demand dynamics and also with this healthy rental growth outlook.

In respect of the financing markets, they remain available and open and also with favorable credit margins at the moment. With that, Ole, the word is yours.

Thank you. Thank you, Sonja.

In Q2, our financial performance was lower compared to previous quarters. Rental income came in at 781 million, down from 800 million in the first quarter.

We had net negative impact from project of minus 8 million as we have vacated a few properties for refurbishments during the quarter, as Sonja mentioned earlier. In addition, we had negative 10 million in like-for-like growth due to reduced occupancy, mostly related to the negative net letting we reported in the second half of 2024 and Q1 2025.

This is primarily in the Sandvika and the Bergen portfolios. Compared to the second quarter last year, the average rolling rent per square meter is up 4.1%, mostly due to CPI growth and finalized projects.

The net income from property management came in at 320 million, down from 357 million in Q1 due to a combination of lower rental income, which I've already gone through, slightly higher opex, as well as increased financing cost. Profit before tax came in at negative minus 1.0 billion, including net value adjustments of negative 1.2 billion related to both our investment properties, JVs, and hedges.

I will come back with more detail on this number later on. I have already gone through the rental income part, but I will give you some more flavors on the other P&L items.

Opex came in at 72 million, or 9.2% of rental income, which is somewhat above historical levels. This is primarily due to higher vacancy cost, as well as letting-related cost.

We also had a small one-off of 2 million in the quarter. Looking at the first half as a total, the opex is 8.9% of rental income, which is more close to the historical levels.

Admin costs are relatively stable at 52 million and in line with expectation. The negative result from share of profit from JVs is due to an impairment of the investment in OSU, which impacts 128 million.

OSU is a residential development company in Bjørvika, CBD Oslo East, and the value adjustments is mostly related to lower expected growth in resi prices, as well as higher return requirements. Net realized financials came in at 346 million, up 20 million from last quarter.

This is due to higher borrowing cost of 15 million mostly related to higher interest rates, as well as a one-off of 5 million. Value changes in our investment properties are negative with 1.1 billion, and I will come back with more data on this later on.

Then we had negative value changes in our financial instruments of 84 million, and this is caused by a combination of slightly lower long- and medium-term market interest rates, as well as shorter remaining duration or maturity of the interest rate hedge portfolio. The payable tax is also slightly higher than normal, and this is due to a reassessment of tax for one redevelopment project from previous years, which we couldn't offset against current tax loss carried forward.

This gave a negative net profit of minus 855 million. Moving then over to our rental income development.

Looking forward, the model indicates that rental income in Q3 will be 781 million, which is 5 million lower compared to the bridge we presented in the first quarter. For 2026 as a whole, the total rental income in the bridge is down 15 million compared to the bridge we presented in the first quarter due to an updated assessment of the portfolio.

This graph is not a guidance; it just highlights the rental income based on reported events in existing contracts. As mentioned in previous quarters, we believe there is upside to this bridge going forward.

Firstly, we aim to let out existing vacant space, which has a rental income potential of 229 million per year. We also have market rent reversion potential of 82 million.

Lastly, we currently have a few larger properties vacated in preparation for or already in project, which should support growth going forward. However, most of this is after the end of this bridge period.

As an example, the strong net letting we had in the second quarter with both Coop and Multiconsult contracts will be phased in during 2028. Moving then over to the property value, which is down 1 billion to 62.3 billion in the quarter.

The value changes are negative with 1.1 billion, a value decrease of 1.8%. The negative value impact is predominantly due to increased rate of return requirements driven by higher interest rate levels, and this is partly offset by increased CPI revisions, as well as positive letting effects.

We see that return requirements increase more in the fringe areas, while central-located properties, which looks like being more resilient to interest rate increase. The value deviation between the appraisers is now limited at 0.5% in the second quarter.

Capex came in at 256 million in the quarter, which has also calmed down over the last few years. We will continue to have a conservative and disciplined investment strategy going forward and prioritize defensive capex to secure occupancy and realize market uplifts.

The management portfolio net yield has increased in the quarter to 5.26%, up from 5.13% in Q1. It's up 32 bips from 4.94% over the last 12 months.

Fully let at market rent, there is solid upside with a portfolio yield at 5.83%. On the right-hand side, you can see that the net asset value per share is down from 170 kroner in Q1 to 163 kroner in Q2.

6 kroner of this reduction is related to the value adjustment in our investment properties, and 1 kroner is related to impairment in our JVs. In addition to this, we paid out also approximately 1 kroner per share in dividend.

This was then partly offset by positive impact of nearly 2 kroner from our cash earnings in the quarter. Moving then to our debt metrics.

The ICR was stable at 2.16 measured over the last 12 months, but down isolated in the quarter to 2.05, predominantly due to higher interest costs. The leverage ratio increased from 47.6 to 48.6, mainly due to the negative value adjustments in our properties.

Going forward, we will continue to have a conservative approach when it comes to both leverage and interest risk to secure and improve our investment grade rating. We have created a solid financial platform with an average time to maturity for total debt of 4.0 years in the second quarter.

We had an active financing quarter also. We reopened a fixed bond at 5.5 years maturity and issued 200 million, which we swapped to NIBOR plus 112 bips.

We also issued new 6-year floating and fixed bonds under our new green bond framework totaling slightly over 1 billion NOK, and the spreads here were 120 bips. The debt capital market remained open for Entra at attractive levels, but we have seen some volatility in the spreads following the Iran conflict.

As you can see in the graph to the right, we have undrawn bank credit lines of 7.6 billion committed until 2028 and 2030. We did reduce our bank lines with 1.2 billion during the quarter to improve funding costs, but with the financing activities in the second quarter, we still have ample available liquidity the next 24 months.

On the left-hand side, you can see that now nearly 72% of our debt is green, and we have the capacity to issue more green debt with our existing environmental-friendly property portfolio. Lastly, moving to the cost of debt development.

The all-in net financial cost is up to 4.50%, while the interest rate on our interest-bearing debt is up to 4.16% in the quarter. The forward curve have shifted up during the first half of the year, although it's down slightly from peak levels.

Our interest rate forecast is based on the forward curve from July 3rd. Assuming this level, our cost of debt will increase in 2026, as you can see in this graph.

This includes our existing interest hedges totaling 67% of our debt portfolio, which partly offset the effect of higher interest rates. Sonja?

Thank you. A few closing remarks before we go to Q&A.

Operationally this was a strong quarter for us. We delivered net letting of a solid 131 million, which is the highest we've seen since back in 2020.

The letting also feeds our pipeline of refurbishment projects where we started two projects. Rental income of 781 is up 1.4% year-on-year.

We have a solid financial platform, and during the quarter we also updated our green financing framework in line with the EU Taxonomy, expanding our future access to green financing. We continue to take a conservative approach both to leverage and interest rate risk.

Profitability remains our key priority for 2026, both from increasing occupancy, from capturing the reversion potential, and also from our ongoing projects supported by selective accretive developments, asset rotation, and also a disciplined approach to capital allocation. Our portfolio is well positioned to meet the future demand trends we are seeing, and the long-term fundamentals of our letting markets remains supportive.

We continue to focus on delivering operationally, and the letting activity which we have seen through the first half will provide profitable growth going forward. I think that concludes the presentation for now, and I believe we have some questions, Isabel?

Thank you, Sonja and Ole. We'll move on to the Q&A session.

The first question is on the pipeline for letting. Given two large contract signings, how do you see your pipeline developing now?

For the third quarter, we are actually quite optimistic. We have a good leads pipeline coming out of this quarter, several offers out, and we are, in addition, also very focused on building our leads pipeline into the fourth quarter.

If we look at the fourth quarter, the outcome there will to a large extent depend also on a couple of large renegotiations with lease expiry in 2028 and 2029, which we expect also to conclude somewhere between the fourth quarter and the first quarter next year. All in all, optimistic about the third quarter from what we see right now.

You have started two new redevelopment projects targeting yields on cost in the range 5.6 to 5.8%, while your all-in funding cost is now around 4.5% and portfolio yields have moved out to 5.3%. Why is this still an attractive use of capital, and what minimum spread over funding costs do you require before approving new development projects?

Okay. We have, of course, a mix of projects in the project pipeline.

Some are more value-preserving, seeing that we have tenants moving out, and assets which have been vacated, we put in the capex required to defend the cash flow and make the products competitive. The two projects we started this quarter are more in that bucket.

We would, of course, like to see better yields on costs, but that's the way it is right now. If you look at the allocation to more new project development, I think Christian Krohgs gate is a more example of how we think there, where we choose to start a new development, seeing there that the yield on cost on that project is 5.7% versus what currently is prime yield of 4.5%, and it's an asset which should be valued around prime when it's completed.

You have a good spread there, and that kind of reflects the variance in the projects we work on. We sit tight on the cash, but we still need to put some money into more defensive bucket of capex.

Next question is on valuations. Value changes were minus 1.1 billion this quarter and minus 200 million in Q1.

What gives you confidence that today's valuation reset fully reflects current market clearing levels, and what are your expectations to value adjustments going forward?

I think we need to split maybe that answer in two. You have the external factors, and then you have the internal factors.

Future value movements will be influenced by interest rate development and market yield expectations. The net yield in our portfolio is expanded with 32 bips over the last year, which basically partly absorb some of these effects.

In the same period, we also have increased the vacancy, which basically means that we can provide some upside if we manage to increase occupancy going forward. Please also note that fully let at market rent, our portfolio yield is now 5.83%.

When it comes to the more internal factors, our portfolio is centrally located at transportation hubs in Oslo and Bergen, and as we commented earlier, the yield expansion is mostly related to fringe area and lesser degree centrally here in Oslo. Also, we have quite a stable operation.

Occupancy remains quite high, and as Sonja mentioned earlier, the tenant demand is quite solid still. Also, what we have, as mentioned earlier, we also have more or less 100% linked our contracts are more or less 100% CPI-linked, which also creates some kind of offsetting factor on this.

In a sum, property values will remain sensitive to interest rates development, but the portfolio has certain characteristics that should help mitigate the impact of higher yield expectations going forward.

Thank you. EPRA LTV increased to 53.1% following the valuation decline.

If property yields were to soften another 20 to 30 basis points from here, would protecting the balance sheet take priority over maintaining the current dividend policy? Should investors now assume a structurally lower capital distribution until leverage is back below your target range?

Go on. Okay.

We already given some flavor on this, and there are offsetting factors, as mentioning earlier. According to our capital allocation framework, we targeted distribute a minimum 30% of cash earnings, and at the same time assure that we have investment grade rating.

Any changes of capital allocation will be handled through normal board processes going forward.

Thank you. There are no further questions, and we'll conclude the Q&A session for today.

Thank you all for joining us today, and I think it just remains to say, have a great summer, and we have to finish with a big 1 2 3 ro. Ro!

Bye.