Henrik Saxborn, CEO of Swedish-listed property company Castellum, says he expects the company to transact a ‘normal’ amount of deals this year in the wake of a failed takeover bid for Entra and a linked reduced transaction with The Blackstone Group.
Speaking with PropertyEU, Saxborn said in a typical year the group would normally execute between 30 and 35 deals a year: ‘My conclusion is this will be another normal year for us,’ he said.
On Wednesday, Castellum – the largest listed property company in Sweden with SEK 103 bn (€10.2 bn) of assets – revealed it had agreed to divest a portfolio of 53 logistics properties to Blackstone’s last-mile platform Mileway for a total of SEK 4.8bn (€470 mln).
However, the parties have shrunk a second tranche of SEK 13.1 bn that was supposed to have closed at the end of Q1 to SEK €5 bn.
That is because, as previously stated by the parties, the overdeal of SEK 18.1 bn was conditional upon Castellum completing a takeover of Norwegian peer, Entra.
Earlier this week, the takeover plan collapsed because Castellum failed to win agreement to acquire the requisite outstanding shares in Entra after announcing its intention to take control of the company on January 7 this year. Nevertheless, Castellum and Blackstone have agreed to press ahead with the smaller agreement for 53 properties for a 27% premium above the Q3 2020 valuation and 15% over the Q4 2020 value.
‘Castellum is continuing its strategic portfolio shift via the divestment of a mature stabilised portfolio, enabling it to expand in prime growth positions and develop the most modern and flexible logistics/warehouse offering in the Nordic region,’ said Saxborn. ‘The divestment once again demonstrates the value appreciation in our logistics portfolio. We now have a high turnover in our portfolio that facilitates strategic shifts, and we expect a continued high level of activity during the year.’
Castellum is active in 17 growth regions in Sweden as well as in Copenhagen and Helsinki, and concentrates on both logistics and flexible offices.
The company chief believes Castellum will be one of the largest developers of logistics in Sweden, pointing out it has building rights for approximately 1.2 million m2 of further assets. ‘On top of that, it is also possible to buy land from municipalities,’ he told PropertyEU.
Saxborn said of the failed bid to acquire Entra: ‘It is always sad when we don’t do a deal, but we will continue to invest. We are looking at other opportunities, maybe not as big as Entra, but we are looking at acquisitions in the market both big and small.’
‘Castellum's ambition to develop the Nordic platform in offices and logistics remains. The company currently has one of the Nordic region's strongest balance sheets with a loan-to-value ratio of approximately 40% after the divestment to Blackstone and will continue to acquire and develop new projects where Castellum has ongoing projects for approximately SEK 4.7 bn.’
