Oaktree takes majority share in €570m Gothenburg tower project

Under the deal, Los Angeles-based Oaktree will buy the stake from landlord and developer Serneke which will remain as a shareholder and continue to act as main contractor for the construction of the 245-metre-high building.

Karla Tower is expected to become the highest building in the Nordic region following completion in 2022. Oaktree and Serneke will co-own and jointly develop the project which will provide 95,000 m2 of housing accommodation over 600 apartments, a 300-key Clarion Choice Hotel, more than 8,000 m2 of office and retail spaces and an observation deck.

'This agreement naturally represents a huge milestone for the continued development of Karlastaden and for all of Serneke. This is something we have worked extremely hard to achieve for a long time. We are very pleased that we have reached a principle agreement with Oaktree that, once closed, offers a robust financial solution and a high-quality realization of the Karlatornet project,' said Ola Serneke, CEO of Serneke Group.

Closing of the transaction is conditional upon finalization of senior financing and transaction documentation and customary conditions that are all due to be completed during the first months of 2020. Serneke and Oaktree have agreed financing terms with an international bank regarding the senior financing, which will provide all remaining funds to complete the project.

Pangea Property Partners and Setterwalls Advokatbyrå act as advisers to Serneke in the transaction.

Following the deal, Serneke remains as sole owner of the remaining building rights in Karlastaden, consisting of 150,000 m2 of mixed-use development divided into seven blocks. Serneke said it will explore different possibilities for completing the development of the remaining Karlastaden, including intensifying dialogues with potential investment partners.

Serneke announced last summer that it was seeking an investment partner for the Karla tower project.