Partners-led group buys four Klépierre malls for €247m

An investment vehicle led by Parners Group has acquired four shopping centers in Norway from French retail specialist Klépierre's Steen & Strøm unit for €247 mln.

Steen & Strøm, which is 56.1% controlled by Klépierre, has sold Halden Storsenter in Halden, m2 Torvbyen in Fredrikstad, Stovner Senter in Oslo, and Markedet in Haugesund.

The buyer is Sektor Portefølje II, an investment vehicle 75% owned by Partners Group, with Sektor Gruppen controlling another 15% and Steen & Strøm retaining the remaining 10%. Steen & Strøm said its residual stake in these four centers should not be considered a long-term investment.

The portfolio offers a total of 100,000 m2 across 250 shops, with the 38,000 m2 Stovner Senter in Oslo representing the bulk of the portfolio in terms of gross space.

Partners Group said the Norwegian shopping center portfolio is an attractive investment for its clients due to its value-added potential and the attractive Norwegian retail economy. 'The portfolio provides exceptional access to the attractive local Norwegian economy and combines strong cash flows with upside potential through numerous potential value-added initiatives. We believe that the partnership is well-positioned to manage the assets and create value for our investors,' said Chris Lydiker, a senior investment manager in the private real estate team at Partners Group.

The buyers intend to expand and redevelop the scheme to improve the properties’ competitive position in their respective markets.

Klépierre said the disposal is part of its asset rotation strategy to enhance the overall portfolio profile. 'The transaction also releases financial capacity for Steen & Strøm to fund the future targeted development projects that are planned to be realized in Norway, Sweden and Denmark in the coming years,' the Paris-listed group added.

The assets generated 1.8% of Klepierre rents during the three quarters of 2013.

Norway's strong macro-economic fundamentals and latent purchasing power are drawing an increasing number of foreign investors. Last month, US investor Madison International Realty teamed up with Norway's Søylen Eiendom to create a new joint company which will own nine properties in Oslo’s premier shopping district. The properties, valued at NOK 3 bn (€370 mln), are all on or around Karl Johan, the main street in the Norwegian capital.

According to Colliers International’s Q3 report on the most sought-after retail locations, the Norwegian capital was Europe’s most improved destination with prime rents increasing by 33% in the last 12 months, and 11% in the past six months alone. They currently stand at €205/m2/month, according to the broker.