Swedish-listed property company Kungsleden has signed an agreement with Norwegian asset manager Orkla Finans Kapitalforvaltning and Oslo-based financial services group DnB NOR to sell a large mixed portfolio of commercial properties in Sweden for SEK 5 bn (about EUR 538 mln).
Swedish-listed property company Kungsleden has signed an agreement with Norwegian asset manager Orkla Finans Kapitalforvaltning and Oslo-based financial services group DnB NOR to sell a large mixed portfolio of commercial properties in Sweden for SEK 5 bn (about EUR 538 mln).
Kungsleden cautioned that the deal is conditional on the financing of two sub-portfolios by 12 December 2007. 'I regard this as a good transaction for Kungsleden and our assessment is that it will be completed,' Kungsleden’s CEO Thomas Erséus said. He told PropertyEU that Kungsleden obtained a 'good price' for the properties, which was in line with the company's targeted return on equity of at least 15%. The sale price for the mix of office, industrial and warehouse assets exceeds the book value by SEK 400 mln and the acquisition value by SEK 750 mln.
The deal was initially disclosed on 27 September and Kungsleden said there had been some changes in the structure of the portfolio following the completion of a due diligence survey. Of the two sub-portfolios, Portfolio 1 comprises 30 properties with a lettable floor-space of 280,000 m2 and is valued at SEK 1.6 bn. The sale price exceeds the book value by SEK 160 mln and the acquisition value by SEK 300 mln. Portfolio 2 comprises 55 properties with a lettable floor-space of 520,000 m2 at a value of SEK 3.3 bn. The sale price in this case exceeds the book value by SEK 240 mln and the acquisition value by SEK 450 mln.
Kungsleden's holdings comprise properties with a book value of SEK 25.9 bn as of end-September this year. The assets are spread across a total of 125 municipalities, although concentrated in the Swedish provinces of Götaland and Svealand, and the Öresund region.