Norwegian insurer DNB Livsforsikring has sold NOK4.1bn (€391m) of real estate in Stockholm and Norway amid rising interest rates.
Swedish pensions and insurance group Folksam bought one of the assets – a mixed-use property in Stockholm – for SEK3bn (€275m).
Another commercial property, Strandveien 18, in the Oslo suburb of Bærum, was sold to a syndicate arranged by DNB Markets for undisclosed amount.
Anders Skjævestad, CEO of DNB Livsforsikring, said: “The recent increase in interest rates provides opportunities for active adaptation of asset management for life companies, and DNB Livsforsikring has used the market situation to rebalance in a troubled market.”
He said DNB Livsforsikring had increased its real estate exposure in recent years amid low interest rates, but in the last year this had reduced by nearly NOK5bn.
“This normalises the proportion of real estate investments in the portfolio,” he said.
The Stockholm property, Vasahuset, which includes an office building and a hotel, was acquired by Folksam’s subsidiary KPA Pension.
Lars Johnsson, Folksam’s head of real estate, said: “We are continuing our profitable expansion of the property portfolio and it feels good now to be acquiring these two stable management properties in the middle of our core market in Stockholm.”
Folksam, which has SEK556bn of assets, said it was financially strong and continuing its expansion within real estate. Including the latest purchase, the group has bought almost SEK26bn of properties for its directly-owned portfolio in recent years.
The Vasahuset acquisition increased KPA Pension’s allocation to directly-owned real estate from 10.7% to 11.9%.
Vasahuset has more than 21,000sqm of leasable space, according to Folksam, which will gain access to the building on 1 November.
Camilla Larsson, chief executive officer of KPA Pension, said the subsidiary’s task was to provide employees in municipalities and regions with a secure pension through long-term investments that contribute to sustainable social development.
“The investment we are now making in the Vasahuset property is a good example of that, and will create even better conditions for a good return for our customers,” she said.
At a group level, Folksam said it now had nearly SEK65bn of directly-owned properties, with a focus on high-quality office properties in attractive locations.
That property is leased to Santander and Nordea, and has leasable space of 15,692sqm.