Norwegian Property agrees to sell non-core office properties

Norwegian Property said that it has entered into agreements with several parties to sell its non-core office properties valued at NOK 1.4bn (EUR 175mln) and added that talks with potential buyers are continuing regarding the sale of its hotel portfolio in the Nordic region. During the presentation of its first quarter results, the Oslo-listed real estate firm would not disclose further details on the hotels' interested parties. The firm's non-core office portfolio consists of six buildings in Oslo, Lysaker, Sandnes, and Bergen which have been sold to DTZ Realkapital Corporate Finance, Pareto Private Equity, Ryger Eiendom and Aberdeen Pan-Nordic Norway.

Norwegian Property's total portfolio comprises 57 high-quality office buildings in Oslo and Stavanger as well as 74 hotel properties in Sweden, Denmark and Norway with a total 671,000 m² of space. The company's hotel assets were valued by DTZ in end-March at NOK 11bn.

The company, which posted rental income of NOK 472mln in the first quarter of 2008, said that the international financial turmoil has so far had a limited impact on the Norwegian economy. 'The market for property transactions has slowed down as a consequence of the increase in long term interest rates and the credit turmoil, however to a lesser extent than in other countries,’ the company said in a statement. It added that only a limited amount of new office space is expected to be put in the market over the next few years, and Central Business Districts' vacancy rates are approaching zero in Norway, ensuring strong rental growth over the next few years.