NCC has completed the sale of Valle View in Oslo
NCC has completed the sale of Valle View, the last remaining part of the property development project in the Helsfyr area in Oslo that was sold in August 2019. There will be a positive impact on cashflow in the first quarter 2021 but earnings in the quarter will be impacted by provisions for rental guarantees and VAT.
Image: Lund & Slaatto Arkitekter
In August 2019, NCC sold the development project, consisting of three parts, in the Valle area in Oslo, Norway to a newly formed property company established by Pareto Securities for an underlying property value of nearly SEK 2 bn.
The project consisted of two office buildings; Valle Wood, an office building entirely in wood (7,700 sq m) that was completed in the summer of 2019 and Valle View (23,400 sq m), that has now been completed. The third part of the project is another 27,000 square meters of office development rights, called Valle Vision.
In the fourth quarter of 2019, NCC recognized the profits from Valle Wood and Valle Vision (the development rights).
The transfer and payment of Valle View will have a positive cashflow effect in the first quarter, but the positive earnings effect will happen over time. Earnings in the first quarter will be significantly impacted by the following previously communicated factors:
- Full provision for rental guarantees: NCC has provided a five-year rental guarantee for unleased areas from the date of the transfer of the property. The letting ratio for Valle View at the end of 2020 was 63 per cent
- Full provision for VAT for all unleased areas in accordance with tax regulation in Norway (reversed when leased to tenants eligible for VAT)
Updated information about the property development portfolio is available in the NCC quarterly reports. Information for the end of 2020 can be found in the quarterly report for the fourth quarter, page 12.
There are at this point no other projects expected to be recognized in profit during the first or second quarters of 2021. Earnings in the business area can also come from divestment of land or development rights, reversal of provisions for guarantees etc and rent from tenants in owned properties.
Valle Wood and Valle View will be environmentally certified under the international BREEAM system, with a rating of Excellent.
For more information, please contact:
Maria Grimberg, Head of Communication & Investor relations, NCC, tel +46 708 96 12 88, firstname.lastname@example.org
NCC media line +46-8-585 519 00. E-mail: email@example.com, NCC Mediabank
About NCC. NCC is one of the leading construction companies in the Nordics. Based on its expertise in managing complex construction processes, NCC contributes to a positive impact of construction for its customers and society. Operations include commercial property development, building and infrastructure project contracting, and asphalt and stone materials production. In 2020, NCC had sales of SEK 54 bn and 14,500 employees. The NCC shares are listed on Nasdaq Stockholm.