Castellum mulls bid for €2.7b Swedish property owner

Swedish listed property firm Castellum confirmed on Tuesday that it is evaluating the possibility of taking over peer Norrporten and its real estate portfolio, valued at SEK 25 bn (€2.7 bn).

Norrporten is believed to be in the process of preparing an initial public offering. A bid from Castellum would offer it an opportunity of a straight sale without the risks connected to a public listing.

Norrporten is owned by AP2 and AP6, two of Sweden's national buffer pension funds. Norrporten's 125-property portfolio provides 1.2 million m2 of leaseable space and generates annual rent of SEK 2 bn.

The deal would give Castellum a stronger base in northern Sweden, as well as in the Danish capital Copenhagen. 'One of Castellum’s characteristics is its goal to develop its property portfolio by yearly net investments of 5% of the property value. There are many business opportunities for Castellum and the company therefore evaluates potential acquisitions and divestments of properties in order to develop its property portfolio on a continuous basis,' Castellum said in a statement.

Castellum owns SEK 42 bn of commercial property assets. The company is being advised by investment bank Carnegie in relation to the evaluation of the Norrporten assets.

Castellum's portfolio includes 3.4 million m2 of office, retail, warehouse and industrial space owned and managed through six wholly-owned subsidiaries in five growth regions: Greater Gothenburg, the Öresund Region, Greater Stockholm, Mälardalen and Eastern Götaland.

Separately, Castellum also announced on Tuesday that it has acquired the remaining 50% it did not already own in Corhei Fastighets for SEK 555 mln.

Corhei is the owner of a SEK 2 bn portfolio consisting of 12 office buildings and a logistics asset in Norrköping, with 111,480 m2 of space, and nine office properties in Linköping, spread over 51,000 m2. The occupancy rate of the portfolio is 84%, with an average leasing period of 4.1 years. The assets generate SEK 159 mln in annual rent.