Kenmore sells assets in Norway

Kenmore Property Group has sold a prime Oslo office building and two Norwegian property portfolios held by its funds, MK Capital and Kenmore Europe, for a combined total of NOK 421 (EUR 50 mln).

A 3,885-m² office building at Tollbugata 35 in central Oslo was sold to The Norwegian Order of Freemasons for NOK 85 mln, achieving a leveraged Internal Rate of Return (IRR) of 26.5% and a Return On Equity (ROE) of 33.1% excluding currency fluctuation. The sale price reflects a net initial yield of 6%.

The property is multi-let to a range of tenants and generates a total income of NOK 6.46 mln. Kenmore said the 9% vacancy rate offers further opportunities for income growth once this space is let. Kenmore acquired the asset in 2005 and has implemented a programme of asset management by re-gearing a number of the leases to market levels.

Kenmore Europe, a joint venture between Kenmore, HBoS and RevCap, has sold a portfolio consisting of three assets in Moss, south of Oslo. The properties comprise 11,681 m² of office retail and warehouse space. They were acquired by Kenmore Europe in 2005 at a competitive price, and have since been actively managed to implement new zone planning for the location and increase the retail offering and development potential. They have been sold to Aberdeen Eiendomsfond Ost AS, a regional property fund of Aberdeen Property Investors Norway for NOK 104 mln, achieving a leveraged IRR of 36.5% and a ROE of 45.7%. The sale price reflects a gross yield of 6.2%.

Kenmore fund, MK Capital, has sold four further properties in Oslo, comprising office and retail space. The assets provide a gross lettable area of 15,391 m² and have been sold as a portfolio to Norwegian property company Alliance Eiendom for NOK 232 mln, achieving a leveraged IRR of 26.1% and a ROE of 27.2%. The sale price reflects a gross yield of 6.3%.

'These transactions represent the successful conclusion to the assets’ business plan,' said David Dahlgren, Kenmore's Investment Director for the Nordic Region.

DTZ Norway, Colliers Norway and Glitnir Norsk Naringsmegling acted on behalf of Kenmore.