DEVELOPMENT OF OSLOFJORD CONVENTION CENTER
The Brunstad Foundation’s largest operations are currently carried out at Brunstad within Sandefjord Municipality in Norway. Over the past 10 years, the foundation has contributed to a large-scale development, which has been estimated to cost around NOK 3,600 million.
The Brunstad Foundation and our subsidiaries therefore find ourselves within an extraordinary period of time. Extensive planning processes and preparations took place during the years before the construction started and in 2019 we put almost seven years of substantial and visible progress in the project behind us. We are proud to see that the progress is happening according to the plan and that we have good control of the costs of the project.
Extent of the development and cost framework
Preparatory construction work started in 2012 and the entire project has, on the whole, been planned to be completed in 2021.
The construction project includes:
- Better conference facilities, including the capacity for more meeting rooms as well as better kitchen and storage spaces
- An increase in accommodation capacity with 16 new hotel buildings (1600 suites)
- Activity facilities totaling approximately 20,000 m2 and an outdoor activity park
- Extensive work on outdoor areas, development of new park grounds and better access
- Improved parking, with approximately 1,500 underground parking spaces
- Fixed sequential projects for the municipality, e.g. roads, footpaths, development of recreational areas, alterations to water and sewerage lines
The construction project has an expected cost framework of approximately NOK 3,600 million.
As of 31 December 2018, approximately NOK 2,500 million of this had been invested. Oslofjord Property AS, in addition, purchased the existing conference center from the Brunstad Foundation in 2015 for NOK 202 million.
Developer: Oslofjord Property AS
In 2011, the Brunstad Foundation established the subsidiary Oslofjord Property AS. This company is the developer of the Oslofjord Convention Center expansion.
As of 31 December 2018, Oslofjord Property AS had an equity amounting to NOK 394 million.
The remaining financing for the construction project has been obtained as follows:
- Private individuals have signed 50-year lease agreements for suites in hotel buildings. The advance leasing stands at approximately NOK 350 million
- Oslofjord Convention Center AS has signed a 20-year lease agreement for hotel and conference center facilities. The advance leasing is expected to total closer to NOK 2,000 million. Oslofjord Convention Center AS is raising this capital by entering into 20-year hotel agreements with private individuals
- The Brunstad Foundation has provided a line of credit of NOK 1,150 million (4% interest per annum) covering the remaining loan needed to complete the project. The loan balance as of 31 December 2018 was NOK 1,087 million
See the financing model schematically presented below: