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Introduction & Market Context
Olav Thon Eiendomsselskap (OB:OLT), Norway’s leading shopping center operator, presented its first quarter 2025 results on May 16, 2025. The presentation, delivered by Executive Vice President of Economy and Finance Arne B. Sperre, highlighted continued rental growth and increased property values contributing to improved quarterly results despite the backdrop of a challenging macroeconomic environment in Norway.
The company’s shares closed at 250 NOK on the presentation day, down 0.8% for the session, but have shown strong performance with a 14% increase during Q1 2025 and a 25% return over the past 12 months including dividends.
Quarterly Performance Highlights
Olav Thon Eiendomsselskap reported a pre-tax profit of 1,004 million NOK for Q1 2025, representing a significant 23% increase from 814 million NOK in the same period last year. The result before tax expense, value changes, and currency effects reached 598 million NOK, up from 562 million NOK in Q1 2024.
As shown in the following comprehensive financial overview, gross rental income increased to 1,009 million NOK, up from 958 million NOK in the comparable quarter:
The company experienced organic rental growth of 3.3% in Q1, driven by CPI adjustments, the addition of two new shopping centers, and upgrades to several larger commercial properties. The shopping center segment showed particularly strong growth of 8.7%, while the commercial property segment declined by 6.7%, partly due to portfolio shifts between segments.
The following chart illustrates the consistent growth in rental income from 2022 through Q1 2025:
Property Portfolio and Market Position
Olav Thon Eiendomsselskap maintains its position as Norway’s leading shopping center operator, with a property portfolio valued at 62.2 billion NOK as of March 31, 2025. The portfolio comprises 120 properties, with shopping centers representing 75% of the total value and commercial properties accounting for the remaining 25%.
The detailed breakdown of the property portfolio demonstrates the company’s strategic focus on prime retail locations:
The company owns or partially owns 56 shopping centers across Norway and Sweden, including 5 of Norway’s top 10 shopping centers by turnover. Retail sales in the company’s shopping centers increased by 1.5% in Q1 2025 compared to the same period in 2024.
As shown in the following table, Olav Thon Eiendomsselskap’s shopping centers continue to dominate the Norwegian retail landscape, with several of the country’s highest-grossing centers in its portfolio (indicated by gray background):
During Q1 2025, the company restructured its jointly owned shopping center portfolio with Coop, increasing its ownership to 100% in Amfi Sogningen and Amfi Eidsvoll, while divesting interests in four other centers.
Strategic Initiatives and Investments
The company continues to pursue its "Acquire, develop, own" investment strategy, with 324 million NOK invested in Q1 2025. This follows investments of 1.76 billion NOK in 2024 and approximately 10 billion NOK between 2017 and 2024.
Major ongoing projects include the comprehensive renovation of Koppgården in central Oslo, a Renaissance-style building from 1880 that will feature 2,200 square meters of office space and 1,300 square meters of retail space upon completion in Q4 2025.
Another significant project is the upgrade of Vika Atrium in Oslo’s central business district, a combined office and hotel property of 36,600 square meters expected to be completed in 2025-2026:
Additional projects include the expansion of Lagunen Storsenter by 17,500 square meters, the extension of a warehouse and logistics building at Gardermoen Park, and various shopping center renewals and housing projects.
Financial Position and Outlook
Olav Thon Eiendomsselskap maintains a strong financial position with an equity ratio of 52% (up from 51%), a leverage ratio of 35% (down from 36%), and substantial liquidity reserves of 10.1 billion NOK (up from 7.5 billion NOK).
The company’s financial policy and performance against targets demonstrate its conservative financial management approach:
The average interest rate on the company’s debt decreased to 4.67% as of March 31, 2025, down 0.52 percentage points from the same time last year. The company continues to enjoy good access to financing, with 76% of its debt sourced from capital markets and 24% from banks.
In terms of shareholder returns, the annual dividend for 2024 was set at 7.25 NOK per share, representing 39% of the result and a direct yield of 3.2% based on the year-end 2024 share price. The dividend payment is scheduled for May 28, 2025.
Looking ahead, management expressed confidence in the company’s prospects despite macroeconomic uncertainties:
With Norway’s central bank signaling potential interest rate cuts in 2025 after holding the key rate at 4.50% throughout 2024, the company is well-positioned to benefit from an eventual easing of financial conditions while maintaining operational performance through its strong market position and solid financial foundation.
Full presentation:
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