Nordic shopping centre owner comes to market

Salto Eiendom, the fourth-largest shopping centre owner in Norway, is being marketed to the international investor community for a potential sale that could attract bids in the €500-550 mln range.

Salto's owners have appointed Nordic corporate finance advisory firm Pangea Property Partners to advise on the marketing process, dubbed Project Safari. Pangea will market Salto through January with a view to closing a transaction by the end of the second quarter.

Founded in 2006, Salto owns 19 properties covering a gross area of more than 307,000 m2. The company is forecast to generate turnover in excess of NOK 6.1 bn (€660 mln) and a gross rental income (GRI) of NOK 300 mln for 2015.

The portfolio consists mainly of shopping centres which account for 70% of the gross rental income, with big box retail accounting for 22% and other retail properties generating the remainder.

The properties are spread across Norway with 61% focused on the eastern region, home to 50% of Norway's population. The five largest assets are Bryn Senter in Oslo (gross area: 40,700 m2; retail area: 22,600 m2); Kuben Senter in Honefoss (gross area: 39,500; retail area 24,000 m2); Stortorvet Senter (gross area: 35,110 m2; retail area 19,210 m2); Olrud Handelspark in Hamar (gross area: 26,100 m2; retail area 25,660 m2) and Rortunet Senter in Slemmestad (gross area: 11,700 m2; retail area: 11,440 m2).

Salto also has the potential to develop an additional 192,000 m2 of retail, residential, office and parking space at its existing properties.

COMMENT
The sales process has attracted significant interest from international and domestic investors, said Bård Bjølgerud, CEO at Pangea Property Partners. 'There are several key reasons for this interest; first of all there are very few available opportunities to buy a well-managed, large and diversified shopping centre company and platform in Norway.

'Secondly, the Norwegian economy is robust and stable, with steadily growing private consumption and limited new building of shopping centres due to a ban on construction of such centres outside city centres. In addition, there is significant development potential in the Salto portfolio of existing centres. These factors, in combination with attractive and widely available financing, low interest rates and an annual Consumer Price Index of 2.0-2.5% help explain the interest shown for the company,' Bjølgerud concluded.