Pension fund makes major acquisition in Stockholm

Swedish pension group AMF has purchased the CityCronan mixed-use complex in Stockholm's central business district (CBD) from Deka Immobilien. The price was not disclosed but it is believed to be in the region of EUR 300 mln.

Property adviser Savills, which acted for the buyers, and Deka Immobilien noted in statements that the sale was the second largest single asset transaction to date in Stockholm and the largest single asset deal in Sweden in the last three years.
The freehold, prime mixed-use building comprises 40,000 m² of leaseable area with office (70%), retail (20%) and residential (9%) space. Nordea, the largest Nordic bank, is the main tenant, accounting for 27,000 m² of office space.

Savills approached Deka Immobilien on behalf of AMF two years ago. The negotiations have dragged on since then as Nordea was involved in separate, protracted discussions relating to its lease.

Ulf Nilsson, CEO of Savills Sweden, commented in a statement: 'This is a significant purchase for the Swedish office market and is a reflection of the current aggressive demand from Swedish institutions looking to acquire prime products in strong locations. The property offers great potential and will make a superb new addition to our client's portfolio.'

Deka Immobilien had acquired the property in 2003 for the Deka-ImmobilienEuropa open-ended mutual property fund. The closing of the transaction is scheduled for the start of 2011. CityCronan, the German company said, has been sold at a profit.

Thomas Schmengler, managing director of Deka Immobilien said, 'We received a good offer and seized this opportunity. Despite the sale, Sweden remains an attractive investment market for us. In the past 14 months, we have acquired properties in Gothenburg and Stockholm for example. We will continue to actively seek investment opportunities.'

Following this transaction in Sweden, Deka Immobilien has implemented the twelfth sale of a property above its current market value this year. Buildings have also been sold to investors in Korea, Germany, the UK, Spain and Austria. Across all transactions, Deka Immobilien achieved an average profit of about 13% on the last market value of the properties.