Norwegian Property to Split, Profits Rise

OSLO, NORWAY-Locally-based Norwegian Property, the four-year-old listed hotels and offices company struggling against high debt since the global crisis hit, is to begin a process of splitting into two separate firms that will group each asset type. The firm also recently reported a 25% rise in pre-tax profit for fourth quarter.

CEO Olav Line, appointed last year, says the company’s fourth quarter reflected stable, good operations, and satisfactory cash-flow. “In terms of market development, 2009 has been a challenging year, but for office properties the market seems to be about to turn, and an improvement is expected going forward. The hotel market lies slightly behind in the cycle but the negative development is expected to turn toward the end of 2010,” he says.

Management and the board completed a strategic review after 4Q09 and initiated the process to separate the company into two independent firms focused on office and hotel businesses. “Both the office and hotel operations are to be further developed into leading market players in their field,” Line said. “The goal is to create long-term value as fully integrated property companies, focusing on the value drivers of leasing, property management, development, transactions and financing.”