Swedish listed property company Kungsleden AB has signed an agreement with Merkur Development of Germany for the construction of five retirement homes in Germany. The total investment will amount to about SEK 519 mln (EUR 57 mln) including transaction costs, with the property yield estimated at 6.75%.
Swedish listed property company Kungsleden AB has signed an agreement with Merkur Development of Germany for the construction of five retirement homes in Germany. The total investment will amount to about SEK 519 mln (EUR 57 mln) including transaction costs, with the property yield estimated at 6.75%.
The properties will be managed by AWO, one of Germany's biggest public-sector operators with around 700 retirement homes in Germany. The rental agreements with AWO are for 25-year terms with rental values of SEK 35.3 mln (EUR 3.9 mln). Kungsleden is scheduled to take possession on 1 January 2009.
The properties' lettable floor-space will be approximately 26,000 m2. Four will be located near Frankfurt am Main and one will be close to Stuttgart. 'This is the first time that AWO is party to a transaction of this scale with a private player like Kungsleden, in itself making the deal unique. The properties fully satisfy our investment criteria and the long contract terms imply long-term and stable returns,' Thomas Erséus of AWO said.
