Sjaelso sells 275 apartments to Essex for EUR 121m

Danish property firm Sjaelso Gruppen has signed a final agreement with Essex Invest for the sale of 275 residential units in Greater Copenhagen for DKK 900mln (EUR 121mln). The assets are at different stages of development and comprise 30,000 m² of space, of which Sjaelso has sold 50-95% to individual buyers.

Sjaelso said the total price of DKK 1bn was brought down to DKK 900mln in return for the purchase by Sjaelso of a DKK 152mln commercial and residential property from Essex Invest which is based in Arhus, Denmark. Sjaelso said it will take possession of the site at Ørestad Syd in February 2009. The site has building permission in place for 30,500 m² of residential and commercial space.

'We welcome the fact that two well-established and well consolidated companies have agreed to work together and focus on our respective core businesses at a challenging time for the market. With the sale of the residential properties to Essex, we will be able to focus even more on the development and sale of property and will not need to invest resources in letting and administration of the properties,' said Sjaelso CEO Flemming Joseph Jensen.

Additionally, the company said it has reviewed its profit forecast of DKK 800mln before tax for the current year to EUR 500-700mln as a result of a slowing investment market in the country. 'The volatility in the financial sector is impacting on the property sector. Tenants and property investors have become more reluctant to sign rental agreements and purchasing agreements,' the company said.