Danish pension provider AP Pension has bought local residential company BoStad for around DKK3bn (€403m), in what is said to be the biggest Danish real estate deal this year.

AP Pension said it had bought BoStad, which has a portfolio of more than 70 homes in and around 12 Danish cities, as part of a plan it has with BankInvest to expand their existing asset management collaboration.

BoStad was sold by its majority owner, private investment firm Castlelake.

Peter Olsson, CEO of AP Pension’s real estate arm, AP Ejendomme, told IPE Real Assets that the two firms would set up a mutual investment company structure to own the BoStad properties, but the details had yet to be decided.

He said the BoStad transaction had cost AP Pension around DKK3bn. In its statement on the deal, BoStad said its sale to AP Pension was the largest transaction in the Danish property market this year.

BoStad said the company, formerly known as Admiral Capital, had grown steeply since its management team was established in April 2019. At the end of June 2021, it said, the balance sheet stood at DKK2.7bn, with equity having grown to DKK835m from DKK460m.

William Kanta, BoStad’s CEO, said: “We are proud that BoStad is now a fully implemented growth platform with excellent asset management capabilities and believe that this transaction cements its position as a leading regional player in the Danish residential market.”

BankInvest has a portfolio of commercial properties worth around DKK7.5bn, AP Pension said, adding that BankInvest expected to find just as much demand from its retail investors for residential as it has for commercial assets.

Lars Bo Bertram, CEO of BankInvest, said his firm worked continuously to offer alternatives to its retail customers – investments he said were usually reserved for pension companies and other institutional investors.

“Alternatives, in this case residential properties, are a good supplement to investments in listed shares and bonds,” he said.

Olsson said the acquisition of BoStad and its property portfolio was only the first step in its future collaboration with BankInvest.

“The agreement with BankInvest gives us a greater investment capacity and therefore the opportunity to keep more of our completed housing projects under our own auspices,” he said.

Danish property manager Thylander assisted AP Pension with the transaction, and will also help manage and operate the newly acquired property portfolio.

Private investment firm Castlelake has been the majority shareholder of BoStad since 2019.

“When we acquired what is now known as BoStad in 2019, we saw an opportunity to unlock its potential by simplifying its capital structure and optimising its team and portfolio,” said Evan Carruthers, managing partner and CIO of Castlelake.

“We were pleased to be able to invest in these high-quality assets and congratulate AP Pension on its acquisition of what we believe to be a differentiated company and asset portfolio.”

Topics