Sjaelso sells retail and residential projects

Danish real estate company Sjaelso Gruppen has announced the sale of two retail projects in Sweden, 75% of a residential project in Poland and 50% of a new residential investment company. Sjaelso said it expects profit before tax of DKK 700 mln (EUR 94 mln) for 2007 in light of the 'continued slow activities on the Danish residential market and the pending instability on the international credit markets'. The company forecasts profits before tax of DKK 800 mln in 2008.

Sjaelso said it reached agreement with Investea on the sale of two retail projects in Katrineholm and Linköping in Sweden. The projects, which are expected to be ready in the autumn of 2008, comprise a total area of 10,000 m² and have been let to Coop and Swedol, among others. The total value of the projects amounts to DKK 150 mln.

Sjaelso has also agreed to sell 75% of its 600-apartment residential project in the Wilanow district in Warsaw to a group of investors. Sjaelso retains a 25% stake in the project and will be in charge of the development and the construction management of the project. This is the company's first residential project in Poland. Stage 1 of the project of about 300 apartments will be initiated in 2008. The remaining 300 apartments will be initiated when a satisfactory sales rate of stage 1 has been achieved. The total project is valued at about EUR 134 mln.

Sjaelso said it sees considerable demand for new residential projects in Poland from residential buyers as well as from investors. In addition, the company said it is selling 50% of a residential investment company that was set up to profit from the favourable market for rental properties.