Swedish real estate company Klarabo has agreed to conditionally acquire a SEK 850 mln (€74 mln) real estate portfolio in Sweden from Rikshem Group.
The portfolio consists of seven properties - Batteriet 1, Batteriet 3, Batteriet 8, Batteriet 9, Brigaden 1, Värnet 2, and Värnet 3 - in Fredriksdal in the municipality of Helsingborg.
The 740-apartment residential portfolio, spanning 57,000 m2, offers value-enhancing renovation potential for approximately 63% of its units. The acquisition aligns with KlaraBo's value-add management strategy.
The portfolio is projected to yield a 5.2% return based on its value (after accounting for deferred tax), generating SEK 76 mln (€6.6 mln) in rental income and SEK 43 mln (€3.7 mln) in net operating income by 2025.
KlaraBo anticipates a 6-8% average yield from apartment renovations and an 8-10% return on investment from energy efficiency upgrades. Their existing 91 Helsingborg apartments will facilitate efficient management of the newly acquired portfolio.
Andreas Morfiadakis, CEO of KlaraBo, said: ‘After the recent years’ generally weak transaction market, we now see the opportunity to complement our organic growth with an acquisition that is significant for us and fully in line with our overall strategy and proven business model. KlaraBo is well positioned for continued growth and sees economies of scale with a larger property portfolio in a region where we are already established.’
To fund the acquisition (partially, with bank debt covering the rest) and further value-enhancing investments, KlaraBo's board approved a rights issue. The anticipated net proceeds of approximately SEK 373 mln (€32.4 mln) will primarily be allocated to SEK 298 mln (€25.9 mln) for the acquisition and SEK 75 mln (€6.5 mln) for property improvements.
The subscription period runs from December 9th to 23rd, with subscription rights trading from December 9th to 18th. The acquisition is expected to be completed on 31 January 2025.
