Heimstaden is buying a Danish residential portfolio for €1.6 bn in the biggest transaction in the Nordics this year and one of the largest in Europe.
The listed Swedish group’s Heimstaden Bostad has signed an agreement to acquire Niam’s Danish residential portfolio, HD Ejendomme, comprising 6,237 residential properties across Denmark.
The total price agreed is SEK 16.6 bn (DKK 12.1 bn), including SEK 946 mln (DKK 690 mln) in forward commitments.
Newsec and CBRE advised the buyer.
Heimstaden will take over the HD Ejendomme operational personnel at the 85-strong company, who will be integrated into Heimstaden Denmark. The portfolio will be fully owned by Heimstaden Bostad.
The transaction is expected to close early in 2021, subject to antitrust clearance, and will be financed through a mix of available cash and debt, primarily from Danish mortgage institutions. Leverage will be kept in line with Heimstaden Bostad’s financial policy.
The portfolio totals 594,400 m2 and also includes 182,700 m2 in 35 commercial properties. There are 357 residential units under construction, which will be delivered turnkey over the next 12 months. Gross rental income (GRI) p.a. for the residential portfolio is SEK 824 million, of which SEK 52 million relates to units under construction.
The transaction also includes nine land plots with residential planning in place for the construction of 73,600 m2.
The residential portfolio mainly consists of terraced houses distributed across Denmark and concentrated near large- and medium sized Danish cities, such as Odense, Vejle, Horsens, Silkeborg and Randers.
A large part of the portfolio has been constructed within the last 20 years, with 34% completed in the last three years. 10% of gross rental income is from regulated units built before 1992, in keeping with the Danish rental regime.
The commercial properties are primarily made up of logistics, storage and light-industrial real estate located in the same regions as the residential portfolio, resulting in operational synergies. Heimstaden expects to gradually divest these properties over the coming years.
Christian Fladeland, Co-Chief Investment Officer of Heimstaden, said: ‘The Danish housing market remains healthy, supported by a favourable long-term economic outlook and strong demographic trends, and with this transaction, Heimstaden will manifest its position as the largest residential real estate company in Denmark.’
Heimstaden already has 10,000 residential properties in Denmark where it is based in Copenhagen. HD Ejendomme is headquartered in Odense.
