Asset development in Angola
Crown Energy delivers customised solutions for housing and offices to international companies with a need to station staff abroad, primarily in Angola. Thanks to a comprehensive offering in rental and related services, customers do not have to think about major capital investments but can instead focus on their core business. This business area has been a cash flow-generating part of Crown Energy’s operations, and the customers include some of the world’s leading energy companies with high credit ratings.
In addition to the rental of accommodation and office solutions, Crown Energy’s operations also include associated services such as security, transport and telecommunications. Crown Energy’s offer covers the entire chain from need-based design and construction, to leasing, property management and value-added services. The goal is to provide customers with a flexible overall solution that is easy to administrate and where tenants can thrive and feel safe. The client companies have an extensive need for professional external service providers to meet the needs of their foreign employees. There is therefore a great demand for accommodation and office solutions with a high standard, where accommodation as well as property management and related services are included in the offer.
Crown Energy’s offering is delivered by both local and international teams. The focus is to always deliver the highest quality services to achieve high customer satisfaction and create new business.
Angola’s real estate market is strongly linked to the oil and gas sector. The trend in recent years has been for companies to avoid long-term commitments, which means that landlords have to offer flexible contracts, shorter rental terms or terms adaptable to immediate needs. Alternatives to traditional rental, such as office hotels, are also appearing on the market.
The project portfolio in Angola consists of 14 property assets, one of which is subject to a sales agreement. Five of the properties are owned by Crown Energy and the rest are held via right-of-use contracts with landowners. Signed leases consist of both longer and shorter contracts with both tenants as well as landowners, and which are extended regularly. The assets include 19,917 square meters of lettable residential and office space.
The operations in Angola have two types of revenue streams: rental revenue and service revenue from owned and leased (rented) properties. Service revenue refers to charges for property services and other value-added services such as cleaning, security, catering and more. In the financial reports, the service revenue accounts for approximately 21 percent of the total revenue from the real estate assets.
Crown Energy’s tenants
Crown Energy’s tenants include global and reputable companies in the oil and gas sector, Angola-based companies, embassies, international schools, etc. Of the total rental and service income, companies in the oil industry account for 53 percent and the five largest tenants account for a total of 45 percent. Several of the larger tenants have renewed their contracts repeatedly and included in the contracts that generate the highest annual rent are tenants who signed their first contracts as early as 2009.
Crown Energy’s view is that the real estate market in Luanda is recovering. How recent exchange rate developments will affect rental levels and demand remains to be seen. The economic rental rate indicates the contracted annual rent in relation to the total rental value of the potentially rentable area. The economic rental rate for the property portfolio was as of 31 December 2022 to 74 percent.