Danish telecom group sells 224 properties for EUR 550m

Danish telecom operator TDC has divested 224 properties in a sale-and-leaseback agreement to a company controlled by Danish pension funds ATP Ejendomme and PFA Ejendomme. The DKK 4.1 bn (EUR 550 mln) sale is expected to result in an after-tax gain of about EUR 376.3 mln, which will be included in TDC's third quarter income statement under special items.

'TDC's core business is telecommunication and not property management. Therefore, we are pleased to have found a buyer focusing on property development,' TDC president and chief executive Jens Alder said in a statement.

The telecom operator will lease back the properties, which provide a total of 480,000 m² of lettable space and are mainly used for technical and administrative purposes. Two-thirds of the divested properties are located in central districts of Copenhagen, Århus, Aalborg, Odense. After the disposal, TDC will still own 1,362 properties, although most of these are smaller technical buildings.

TDC's main office in Copenhagen was not part of the deal. This building was acquired by the Carlyle Group. The financial details were not disclosed but Carlyle said this was its fifth investment in the Nordics and brings the private equity firm's total investment in the region to EUR 885 mln. The TDC head office comprises 19 buildings in the Norregade area of Copenhagen. Carlyle said it is planning to refurbish the asset after TDC vacates it in 2009.

Thomas Lindstrom, managing director at Carlyle, said: 'The TDC headquarters is a trophy asset right in the centre of Copenhagen. We are very positive about the outlook for the Copenhagen office market, where vacancy has dropped due to demand from the business service and public sectors, following sustained economic growth in 2007.'