Starwood closes €1.2b Nordic property deal

US-based Starwood Capital Group has closed the acquisition of two property portfolios in Sweden and Norway for €1.2 bn - the largest real estate transaction signed in the Nordics during 2014.

Shareholders of DNB NOR Eiendomsinvest earlier this month approved the sale of most of its property portfolio in Norway and Sweden to a fund advised by Starwood Capital Group. The deal was initially announced on 18 December.

The transaction, which is settled and taken over by Starwood Capital Group on Monday 26 January, includes a portfolio of 106 properties totalling close to 1.1 million m2, consisting mainly of offices and logistics/industrial assets, as well as hotel and retail properties.

The deal marks Starwood Capital's entry into the Norwegian market.

Pangea Property Partners advised Starwood Capital Group in both Sweden and Norway in relation to the transactions as well the financing aspects of the deals. Based in Stockholm and Oslo. Pangea is a full-service corporate finance and advisory firm focusing on the property sector in the Nordic region and the Baltics.

RISING VOLUMES
Transaction volumes in the Nordic region reached record levels in 2014 of about €29 bn, matching previous peaks before the financial crisis of 2008. According to research by Pangea, transaction volumes in 2014 came to €16.5 bn in Sweden and €6 bn in Norway.

'The economic fundamentals of this region are very solid, and population growth coupled with low vacancy rates makes this a very interesting market for Starwood Capital Group,' Zsolt Kohalmi, Head of European Acquisitions at Starwood Capital.

Bård Bjølgerud, CEO and partner at Pangea Property Partners, said that two factors have been of particular importance. 'There is a wall of money pointing at our markets, both equity and debt. Also, in Sweden, listed companies have been very active, while foreign investors have made substantial additional investments in the Nordics in general, seeing this as an attractive region in which to invest. We are currently working on a number of potential transactions and expect the high level of activity to continue in 2015,' Bjølgerud said.

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Want to hear more about the latest developments in Swedish and Norwegian real estate? PropertyEU is holding the first Nordics investment briefing of the year on 26 February.